Business of Committee

We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, who is a permanent witness to the committee. He is joined today by Ms Josephine Mooney, deputy director of audit at the Office of the Comptroller and Auditor General. Apologies have been received from Deputy Deering.

I have not had an opportunity to review the minutes of the previous two meetings. I propose we hold them over to the next meeting, when we can deal with any matters arising. Is that agreed? Agreed.

There are three categories of correspondence. Category A deals with briefing material and opening statements. Nos. 2249A, 2256A, 2257A, 2258A and 2259A are from Mr. Brendan Gleeson, Secretary General at the Department of Agriculture, Food and the Marine. These are the briefing documents and opening statements for today's meeting. We will note and publish those.

No. 2255A is from Mr. Allen Morgan and provides an opening statement for this afternoon’s private meeting. We will note this item and discuss whether to publish it during the course of the meeting this afternoon.

Category B is correspondence from Accounting Officers and-or Ministers, follow-up material from previous meetings of the committee and other items for publication.

No. 2161B dated 10 May, which was held over from previous meetings on 13 May and 13 June, is from Mr. Paul O'Toole, chief executive officer of the higher Education Authority. It encloses the report regarding the review of the relationship between Cork Institute of Technology and certain named companies and entities undertaken by Mazars. We have already noted and published this item but it was held over for discussion if any member of committee would like to discuss it briefly. I know one or two members with a particular interest in this matter are not here. We have noted and published it but we will hold it over in case any wants to discuss it. For anybody who is interested in the document, it has already been noted and published. We might have a further detailed discussion about it at the next meeting.

No. 2201B dated 31 May 2019 is from Mr. Robert Watt, Secretary General of the Department of Public Expenditure and Reform. This is the most substantial item of correspondence we have today. It encloses a minute from the Minister of Finance and Public Expenditure and Reform on periodic report No. 5 of the Committee of Public Accounts, which covered our meetings from September to November 2018. The report was published by the committee in March 2019 and I welcome the prompt response, which we received at the end of May, as I said. I will go through the comprehensive letter. I reiterate that organisations present their accounts to the committee after they have been audited by the Comptroller and Auditor General. We discuss their accounts but that the public meeting of the committee is not the end of the matter. We proceed to examine the matter in further detail, prepare a report or chapter on each meeting we have and publish the report with recommendations. We send that to the Minister for Public Expenditure and Reform who prepares a formal response to our recommendations in consultation with the relevant Departments, which is then submitted to the committee. We now have the response from the Minister. We take these responses seriously and committee members will make a number of observations. I will go through each of the report's recommendation.

Did we receive a copy of this in our pack last week?

I did not bring it with me.

We will put it up on the screen.

There is quite a bit to the report. I have gone through the report and I do not expect the committee to go through all 20 pages in public session. I will highlight the key points and if members would like clarification about certain matters, that can be done subsequently. I would like to clear this today. There are one or two points that invite follow up.

We received this 20-page document before our previous meeting. I will explain and put it in context. Our report included chapters on the National Asset Management Agency, NAMA, the President's establishment, Teagasc, the Office of Public Works, the Department of Public Expenditure and Reform, the Higher Education Authority, the Office of the Revenue Commissioners and the Department of Employment Affairs and Social Protection. We made recommendations in each chapter and the Minister has responded to the committee having consulted the various Departments as to whether our recommendations are accepted. Practically all of the recommendations were accepted and only one or two were rejected. We want to deal with those issues.

Our first recommendation dealt with NAMA. The agency's lack of systematic and routine verification of declarations under section 172 of the National Asset Management Agency Act 2009 was unacceptable and we recommended that NAMA put in place a system to verify these declarations for the remainder of its operation. This was one of the most discussed recommendations. The Minister of Finance and Public Expenditure and Reform rejects this recommendation and has set out his reasons for doing so. We noted that we were conscious that NAMA had published its annual accounts recently and 95% of its work had been completed. We noted it was expecting a surplus at the end of its operation in the order of €4 billion and that we were making our recommendation for the remainder of NAMA's work. The reason given by the Minister for rejecting the recommendation is that providing purchaser compliance with the section 172 agreement would necessitate a comprehensive asset search of every purchaser of NAMA secured assets and would be time-consuming. He stated the delay could jeopardise any purchase sales and that the process would involve a comprehensive verification of purchaser confirmations and would appear to imply that NAMA does not regard purchaser's written confirmations as having much standing. He stated the recommendation operates a presumption that many purchasers of NAMA secured assets are willfully breaking the law on this issue. The committee will write to NAMA about that. Before Deputy Catherine Murphy speaks about it, I will give my own view on the matter. By asking for a verification, the committee did not at any stage suggest that NAMA-secured clients were wilfully breaking the law. That is attributing to us an assumption that we never made. The Chairman of NAMA was a former chairman of the Revenue Commissioners. The Revenue has a self-assessment system in place and does spot checks now and again. That does not mean there is a presumption that all taxpayers are wilfully breaking the law. We were only suggesting some verification. We never suggested that everyone was wilfully breaking the law and I reject the implication to that effect that the Minister has thrown back at this committee.

The Minister goes on to say that NAMA is taking steps on this matter, in particular to ensure that the purchaser is the same party that executed the contract for sale. The party executing a contract for sale might not be the same party that completed the purchase agreement. It was NAMA which spotted that. The document also notes that NAMA expects new regulations to be in place under the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 on 22 November. A central register of beneficial ownership of companies and industrial and provident societies will be publicly available at that stage. Even at EU level, there is acceptance of the need for some verification but that will not happen until the end of November when NAMA will be nearly finished its work.

I want to counter any suggestion that has been attributed to this committee by NAMA that we were even remotely making a presumption that people were wilfully breaking the law. We never made any such presumption.

The Chairman might clarify section 172.

I might ask the Comptroller and Auditor General to help as he did a special report on the matter.

The issue is essentially that there is no connection between the purchaser of the loan-----

Mr. Seamus McCarthy

It is a legal prohibition on NAMA, which prevents it from selling an asset back to an owner or somebody with an interest in that asset. I pointed out, in the section 226 report, that it is very restricted legislation. It only applies to a sale by NAMA, not by a borrower or a receiver. It only applies to the sale of a property and not the sale of a loan. There are definitions of connected persons or debtors for the purposes of the section. Because NAMA sells loans rather than property, what it has tried to do is to extend that principle to loan sales and it is to be commended on that. That means that, while there is a legal structure there and a potential that, if NAMA were selling property, there would be some infringement or criminal offence, it is not in the same league when it has applied the same approach or looked for the same declarations in relation to the sale of a loan. It is very complicated. Any infringement or irregularity in a declaration that was made around the sale of a loan would not, strictly, be an offence under section 172.

I do not think people fully appreciated the need for a section 172 declaration when the legislation was drafted. It exists on the sale of assets but does not exist, and was not contemplated, for loans. NAMA has put in place some internal structures to try to capture some of that, even thought it is not specifically covered in the legislation.

On Project Nantes, we received correspondence which highlighted the difference between the sale of a loan and an asset. There is a particular distinction, of which we were not aware up to that point. Mr. McCarthy is working on-----

Mr. Seamus McCarthy

I am working on a report on Project Nantes. Another issue that arose in that regard was what was a connected person for the purposes of section 172. However, section 172 only applies to the sale of a property by NAMA. That is not what was happening in Project Nantes.

The advice of the Office of the Parliamentary Legal Advisers was that a director of the same company might not necessarily be a connected person. It was stated a director of a similar company might have been involved in the purchase of a loan. However, under the legislation, a director may be and, in many cases, is a connected person, but that is not always the case. We are getting into distinctions some people will follow. Their job is to tease out the detail of the issue.

Essentially, the legislation was presented in a particular light. The expectation was that anyone who was the original owner and transferred to NAMA would not become the beneficial owner again at a reduced price. That is shorthand for how it was presented. NAMA is probably being blamed for a shortfall in the legislation and in anticipating how things would play out. The public expectation was that a person would not be able to buy back a loan at less than its face value before the discount. That was an important assurance that was given. The criticism may be focused on NAMA and that may be legally wrong. At least one Garda investigation is under way and it probably relates to the circumstances outlined in a reply I received to a parliamentary question which states NAMA concluded its investigations and is satisfied that no breach occurred. What it is stating is right from its perspective. I have not listened to the definition, but the allegation is that a person is back in control of an asset that was substantially discounted.

Another aspect relates to SI 110/2019 under the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019. This information was also contained in the reply to my parliamentary question. Essentially, we are told that there will be a central register of beneficial ownership information. I do not think it will be backdated, but it will be of great importance in knowing who are the beneficial owners. As was identified when we discussed the matter of connected persons, there is a deficiency in the law and a gap in terms of what the expectation was and knowing who is the beneficial owner. I have no doubt that some people are back in control of their assets. It may be that the loan was sold and that there was a second transaction. If examples are being identified, it may be down to a flaw in the legislation. It is very frustrating to see such practices, particularly where people can point to things that others were able to do that they were not. That is certainly not the way the public expected the legislation to work in practice.

The Deputy is correct in that regard. It is strange that we are almost at the end of the NAMA story and 95% of the issue has been dealt with, but this issue is only coming out now. When the legislation was being drafted, it was decided to establish the National Asset Management Agency. I know that the asset was the loan, but people were thinking of properties and the sale thereof when the legislation was being enacted. The sale of loans was not as common at the time as it is today. It is only with the passage of time that it has become more widespread. Financial institutions around the world are no longer buying property assets from each other; rather, they are buying loans that control the assets. That was probably not envisaged from a business perspective when the NAMA legislation was being drafted. As these practices became more common, the legislation should, perhaps, have been amended. We might ask NAMA to comment on this matter. We accept what it states.

Deputy Catherine Murphy raised the issue of the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019, but they will only apply to companies incorporated here; therefore, there is a limit straightaway in dealing with this issue. It would be interesting to know how much of the disposal of NAMA's entire portfolio consisted of loan sales which were not covered by section 172 and how much consisted of the sale of assets through receivers or the owners of the assets selling and making good their loans. Mr. McCarthy may know those details. In other words, what percentage of NAMA's activity was loan sales by it which were not strictly covered by section 172? Does Mr. McCarthy have that information or should we seek it directly from NAMA?

Mr. Seamus McCarthy

Very little of what was disposed of was subject to section 172 because the property sales were mainly carried out by the developer or owner of the property or a receiver.

They were not captured.

Mr. Seamus McCarthy

The loan sales were by NAMA, but loan sales are not included. I would be surprised if there was-----

Essentially, Mr. McCarthy is saying that at the end of NAMA, very little of the realisation of the loans was by sale of property assets by NAMA.

Mr. Seamus McCarthy

Property by NAMA.

The section was set up to cover this, but, in fact, NAMA made the debtor or receiver do the selling and it was always one step removed from NAMA. It carried out all the loan sales directly.

Mr. Seamus McCarthy


Very little of NAMA's activity was covered by section 172 which we all thought originally was the belt and braces to protect the taxpayer. The Oireachtas drafted the legislation, not NAMA. It is amazing that we are almost at the end of the game and now realising that, in practice, this main safeguard for the taxpayer did not apply to any great extent during the lifetime of NAMA.

Mr. Seamus McCarthy

In fairness to NAMA, it made what efforts it could to try to impose it.

To replicate it.

Mr. Seamus McCarthy

It sought section 172 disclosures or declarations from purchasers. It made its agreement to a receiver or developer sale conditional on a declaration being made for any disposal of a property or loan by NAMA. It did the best it could-----

Given the limitations.

Mr. Seamus McCarthy

-----given the limitations of the Act.

It was working out the legislation, saw its limitations and tried to put its own arrangements in place to counterbalance the gaps in the legislation.

Mr. Seamus McCarthy


That meant that most section 172 agreements were signed at one step removed from NAMA by sellers and potential purchasers but not the rest of------

Mr. Seamus McCarthy

We looked at whether section 172 declarations had been made and, in general, they were in place. In the sample we looked at in the section 226 report approximately four out of 80 were missing or not able to be produced. In general, the declarations were made. We drew attention to the fact that there was no verification process thereafter. NAMA has outlined some of the constraints and practicalities that apply. I expect the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 tol be applied throughout the European Union such that in any European jurisdiction there will be the ability to find who is the beneficial owner.

I thank Mr. McCarthy for the clarification and going through the matter. It is far more than a perception. I accept that this is not the fault of NAMA which was set up for a purpose by the legislation.

One of the consequences is that the market has been officially kept too high in relation to property and rent. It was set up and legislation was introduced, and through the work of the Comptroller and Auditor General and the willingness of NAMA, a voluntary provision was put in.


It was non-statutory, with no means of implementing it, as has been highlighted. As a result of the work of the Comptroller and Auditor General's office and the committee, the integrity of the sales process will be looked at to ensure that both parties are the same at the beginning and at the end. I will not go into that now.

Self-analysis is lacking. This is an institution with no mechanism to highlight difficulties as they arise and no acknowledgement that, most of the time, it is selling loans and not property. There is no mechanism in place to ensure that the process is correct.

Or what was understood to be the process.

Even leaving that point aside for a moment, where is the mechanism within that institution to implement this legislation? Where is the mechanism for reflection as problems arise, so that gaps can be identified and closed where change is needed?

Essentially, the Deputy is saying that when legislation is passed, there should be a review after a certain time to see whether amendments are required.

Or even a process for the body implementing the legislation to look at it and say, for example, that section 172 has been discovered to be extremely important, but the process is minimalist at best and cannot be acted on. Surely there has to be some way of feeding back.

Mr. Seamus McCarthy

The issue did arise. My recollection, subject to checking, is that the Project Eagle report drew attention to this very omission. On Project Eagle, work was not done on a general basis; that was done in the following section 226 report. It is a number of years since this was raised and brought to public attention.

The gap became obvious.

Project Eagle was the sale of the Northern Ireland loan book.

Mr. Seamus McCarthy

That is correct.

This is probably the biggest and most contentious aspect of the correspondence, so we will spend a bit of time on it.

I have a few comments. When the NAMA Bill was going through the Houses, I was in the Senate and said that this is all new territory and I would not be surprised if, as things evolved, there needed to be a NAMA No. 2 or No. 3 Bill. There never was. Perhaps it is my conspiratorial mind, but there is form here. We are having this exact discussion on the oversight of the IBRC liquidation. Given the way the legislation is written, history will record that Mr. McDonagh and Mr. Daly and the NAMA team have done an exceptional job. It is us who did not do such a good job in providing the necessary oversight and agility in that regard. History will also record that the overall effect of authorities in Northern Ireland extracting the building industry from the NAMA process here, notwithstanding any ongoing criminal investigations, allowed them to do deals all over the place and get back to normality an awful lot quicker than us.

Sadly, without the appropriate oversight, the only reflection mechanisms we have in this country are tribunals of inquiry and commissions of investigation. That is a failing in NAMA, but it is not a failing of the leadership of NAMA, who, under the legislation, has done as good a job as it could. It was envisaged that it would take 20 years and might make €1 billion; it will now be done in ten to 12 years and will make a profit of €4 billion. Those are the headline figures but there are a lot of individual stories where people may have gripes about how they were dealt with; the courts will deal with those.

There is form here, however. On reflection, we feel that the Oireachtas got it wrong, but we are doing precisely the same with the IBRC liquidation, except we have been highlighting it for two years now without any progress.

It is important to say that although the Comptroller and Auditor General had a role, the primary role was for NAMA. The spirit of section 172 could never have played out, and NAMA would have seen that most directly. We have all been knocking on doors recently, and I have noticed a gap in the planning legislation in relation to strategic projects. It is a small thing but when one notices it, one has to ask how it can be dealt with. I would have thought that part of NAMA's remit would be to make sure that the public got the absolute maximum. If something was bought and then quite quickly sold to the original owner for a fraction of-----

For the book value.

For the book value. That is not in the spirit of what was intended and it is certainly not how it was articulated publicly or to this House.

I am not in complete agreement with Deputy MacSharry about NAMA. Soon after I came on to this committee, we had a few months of back and forth on Project Eagle and a report is bring done on Project Nantes. Some very good work was done by NAMA but there are other aspects of it that history will not celebrate.

To add to that, and so I am not misunderstood, I am not saying that Project Eagle was a good thing from our perspective. From a Northern Ireland industry perspective, it played out very well.

I understand that.

I am not saying that at all.

The Comptroller and Auditor General has just raised the issue of Project Eagle. The mechanism was not effective and there was a further onus on the body, because it was aware that the mechanism was defective. That is the point I started to make. I agree with what Deputy Catherine Murphy said: there is an onus on a body to bring it to somebody's attention when it sees that something is not appropriate or effective. Every organisation has a duty to do that.

We might ask NAMA if it ever did that.

I am listening to everything that is being said and my observation is there is an interesting theme running through the response, not on NAMA but on several other issues. The sponsoring Department had to be aware of this from its ongoing contact with NAMA. It is impossible that the Department was not aware of this. I do not blame NAMA but it was impossible for the Department not to have been acutely aware of this issue all along. The Comptroller and Auditor General highlighted it in his report, NAMA's legal advice is clear and the legal advice in the Oireachtas is clear. The Department must have understood the position for years; it is the Department that should have spotted this. We will see it three or four more times, where the issues we have highlighted are essentially deficiencies in the legislation that the various Departments should have dealt with. We have had a good discussion and will note the response.

The next recommendation is the final one in relation to NAMA.

I beg your pardon. We are told that NAMA is proceeding to take steps to seek confirmation. Has that been done or are the steps being taken now?

This a very recent report, written only in the past fortnight. It is current.

Local authorities had rejected 40% of the 7,000 residential units and sites suitable for housing offered to them by NAMA. The committee suggested that if they are still available to NAMA they be re-offered to the local authorities but NAMA responded that none of the units are now available. I accept we were late in the day with that recommendation. That is the practical reality these days.

Can we get a list setting out the sites that were rejected, if there were loans attached to them and the amount for which they were offered? It might well be that they were rejected because they were too expensive or in the wrong location. I am sure there must be a list that we could get reasonably easily.

Is the Deputy seeking a list of the original rejections?

Yes. It would be worthwhile to have such a list.

When this issue arose previously, I went to my local authority and raised with it the 100 houses offered to it by NAMA. I was shown a schedule of what was offered to each local authority by NAMA, the houses that were taken up and the reason for the rejection of particular houses in specific locations. Some of them were expensive properties in the wrong locations and in other cases there was no infrastructure in place to service the sites. My local authority was able to explain satisfactorily to me. Every local authority should able to do likewise because they have the same information. The Deputy asked that NAMA be requested to provide a list of the 7,000 properties. That would be a long list. I do not want to put undue work on the system. I suggest that she asks her local authority for a list of what was accepted and rejected by it in regard to the offer by NAMA.

If the Deputy is not happy that the information she gets at local level, we will go back to NAMA. I do not want to request a list for every local authority in Ireland to be provided to the committee.

Mr. Seamus McCarthy

My recollection is that the committee has previously received statistical information on a county by county basis.

Yes, it has.

Mr. Seamus McCarthy

It includes the numbers offered, the numbers accepted and the status of others.

We will recirculate that information because it is a while since this issue was up for discussion. If anyone wants further detail on it, we will provide it.

The next issue in our periodic report is the President's Establishment in respect of which the committee made a recommendation on the audit committee that did not meet. The Minister for Finance has stated that the recommendation is accepted and the audit committee is now up and running. The next recommendation - which is a key recommendation - is in regard to there being no statutory audit of the €317,000 residential allowance paid from the Central Fund, which is granted to the Presidential Establishment under statutory instrument. The Minister for Finance notes the recommendation that relates to non-voted expenditure from the Central Fund is administered by his Department and does not require Dáil approval. The Minister has further informed the committee that while the allowance for the President's Establishment is established the principle of paying an allowance from non-voted central funds is established in the Presidential Establishment Act 1938 and any amendment would require a change to primary legislation. It is not for the Committee of Public Accounts to draft legislation but it is open to any Oireachtas Member to draft a Private Members' Bill to deal with the issue. This committee has taken this as far as it can. We are now in a situation whereby legislation is the issue. It is a legislative matter for the Oireachtas. Members can choose to follow it up if they so choose. The committee has done its bit on it.

We can recommend that the Department consider an amending Bill.

The committee's recommendation was that consideration be given to including the €317,000 Presidential allowance under Vote 1. The response was that would require a change to the law and that it is open to any Member to draft a Bill to make that change.

The Committee of Public Accounts is not going to draft legislation.

At the time of the enactment of the Presidential Establishment Act, the allowance was €5,000 per annum. It is now €317,000 per annum. This is not about the current President any more than it is about Douglas Hyde. It is about appropriate oversight. There are expenses associated with the Presidency, be that wardrobe expenses and so on, that I am sure the public would support and understand. The value that the President gives in terms of promoting Ireland internally and abroad, at €12 million, is cheap but the €317,000 allowance does not help the complexion when we are here trying to sort out other issues. I appreciate it is not the committee's function to legislate. I may consider bringing forth a Private Members' Bill which, hopefully, will get cross-party support. I am again at pains to point out and underline that this is not about the current President anymore than it is about any previous or future President but it is a matter that needs to be rectified.

I call Deputy Catherine Connolly.

I welcome the clarification and the manner in which the matter is being dealt with. The final sentence on page 3 is significant. It states: "It is worth noting that the President has separately established an independent committee to provide oversight of the 1938 allowance". That is new.

That has been changed thanks to this committee highlighting the issue.

I welcome that it is an independent committee. To whom will it report its oversight of the allowance?

It is the audit committee for the President's Establishment.

Mr. Seamus McCarthy

It is correct to state that the President has established a committee to oversee the expenditure, as I understand it. I do not audit that expenditure, nor do I have the right to audit or inquire into it.

As a result, there is an additional layer of oversight. There is an independent committee with oversight of the allowance.

No, the President has established an independent committee.

I understand that. Ostensibly, we have moved to having an independent committee with oversight of the allowance.

That is at the goodwill of the President.

That is what I am trying to tease out.

It is at the goodwill of the President.

Mr. Seamus McCarthy

He has also published details of the expenditure of the allowance for his previous term of office. I am not sure what the publication details are but I would imagine there will be further publications on it.

I welcome that. It is a positive step. I would like to know how we will become aware of the oversight of the independent committee in regard to any President's Establishment into the future.

The answer is that we now have a greater level of transparency as a result of our debate on the issue last year.

I know that but going forward-----

The information is available on the Áras an Uactharáin website. I have seen it. I suspect journalists will seek a copy of it every year. The current information is published on the website. I have seen it.

I would like to make two points. First, 12 months ago one would have thought that this allowance was established for the current President in his previous term but it had to pointed out that it dates back to 1938. It not having been administered in a public fashion did not afford the President, as a candidate, any protection in regard to it. It is the responsibility of the Houses not to put the current President or future Presidents in the position of having to set up an independent committee. There is no doubt goodwill has been shown on the part of the President, as we said at the time.

Second, in regard to the committee's recommendation that this allowance be considered under Vote 1, therefore making it subject to audit by the Comptroller and Auditor General, did the Department think we were suggesting it just be shoved into that Vote? Of course, it requires a change in legislation.

We all know that.

Increasingly we come in her to discover that people think we are idiots. Do the officials in the Department of Finance think that we cannot join the recommendation we made with the answer given and see that contradiction?

They are stating the obvious.

It is downright insulting. It is not up to us to put forward Private Members' Bills. It is for the Department to include the recommendation as amending legislation and to do so to protect the President, whoever is in that office.

When was the legislation enacted?

In 1938.

Was it enacted through the Dáil?

The allowance was initially €5,000 and it is now €317,000.

It was established under statutory instrument.

By whom was it increased?

Ministers for Finance.

Was the approval of the Dáil sought for each increase?

It was done by way of statutory instrument, which is published. The Dáil is always free to debate a statutory instrument.

It was at the whim of the Minister of Finance of the day to increase it, or not.

I am sorry but it is a function of the Taoiseach. It was increased by different taoisigh down through the years.

It used to be under the Department of Finance and has now moved to the Department of the Taoiseach.

Had it been sanctioned by the Dáil?

A statutory instrument is published, and Members of the Dáil are free to have a discussion on it but that rarely happens.

It seems it was never mentioned until we raised it here last year. The public did not even know about it.

I want to put one thing in context-----

Mr. Seamus McCarthy

I looked back on this, and when it previously came up for discussion, there was significant debate around what was appropriate to provide to the incumbent of the office of the day, and what that level should have been.

When was that?

Mr. Seamus McCarthy

There was a debate on it in the early 1970s. It was also discussed when it was originally instituted in 1938 and there was a subsequent debate in 1944 or 1945. Questions were raised about what the allowance should be used for, and the discretion a President should have over a certain amount of resources to allow him or her some discretion and freedom to operate.

Could the Taoiseach put up another 500 if he felt like it? Is that right?

Mr. Seamus McCarthy

He could.

Let me make one observation here, to make it clear to the people watching. This fund is paid from the Central Fund, which does not go through a Vote in the Oireachtas. In addition to the President's allowance, the Central Fund also includes payments for the Judiciary and the Comptroller and Auditor General. I am a layman, but the President's Establishment, the Judiciary, and the Comptroller and Auditor General are three independent constitutional offices. It is probably to ensure the independence of those offices from the political argy-bargy that could go on in the Dáil if judges' salaries had to go through it every year during the debate on Estimates. Whether it is right or wrong, it is an effort to keep the independence of the-----

There was political argy-bargy here last year. The Chairman cannot say there was not. That may be the intention but it is not how it played out.

Mr. Seamus McCarthy

The distinction is that the fund allows for judicial salaries and pensions, the President's salary, and my salary, but this is an allowance. That is the only aspect of it that is different from the others. The amount paid to those officeholders is published and known because it is a salary, whereas this allowance has a different character.

This is not a separation of powers. There might have been political argy-bargy, or it might have been interpreted as such, but it is not our fault it ended up being the only issue in the presidential campaign. It was a fairly dead campaign anyway. I voted for the incumbent, so it is not about that any more than it is about Douglas Hyde. The Department is coming back with the usual statement that it has been noted. For the Department, "note" is just another word for a rejection, because that is what it is doing. The Department is saying it is not accepting this, and wishing us good luck. We need to have some amount of money that is available to the President for him or her to do with what he or she wants. I do not have a problem with that. It is great that there is an independent internal committee, and I have looked on the website too, but those are broad brush strokes. I first raised this before the presidential election, and I am not saying that we necessarily want to see what every shilling was spent on, but I would be happy if the Comptroller and Auditor General did. It might not be for public consumption, but if the Comptroller and Auditor General is able to say that he has audited it and is happy, that is enough. On that basis, I might, perhaps in a private capacity, consider an amendment to the Presidential Establishment Act.

We will move on. The next item relates to Teagasc. The committee recommended that Teagasc ensures procurement processes are complied with, and that has been accepted in full. We spotted an issue, and that has been accepted.

The next recommendation states:

The committee recommends that a more sustainable method for establishing funds for both (a) infrastructural maintenance and (b) longer term capital projects be developed by Teagasc, in consultation with relevant Government Departments.

The Minister has accepted that, but he also notes that there is an annual Estimates process, so that is an issue for long-term planning as the Estimates are an annual process. However, the Department accepts what we are saying.

We then move on to the Office of Public Works, OPW. We made a recommendation relating to the new headquarters for the Department of Health, the Miesian Plaza, that there be more engagement and consultation with the staff of any public body. We felt adequate consultation between the OPW and the Department of Health did not occur in this case. That is fully accepted and the Minister has informed us that the OPW intends to pilot a changed management consultancy approach for single, large-scale relocation programmes, which will improve the lines of communication. That is good. Recommendation 8 also deals with the Miesian Plaza and the fact that there was an overpayment of €10 million due to the measurements used in the project. The OPW accepts that recommendation and the Minister informs us that an independent review of all the final copies of all leases against what was originally agreed in the original terms prior to the lease agreement will be implemented, and has already been implemented in new leases.

We will move on to the next recommendation, which states:

The Committee recommends that the development of business cases by the Office of Public Works in relation to major projects include a robust analysis of key options and alternatives, plus associated costs, as required under the public spending code.

That is accepted. The OPW further states that, as part of the sanction process, the technical aspects of their cost effectiveness analyses were reviewed by the Department of Public Expenditure and Reform prior to sanction being given. On the issue of leasing properties versus purchasing them, the OPW has carried out detailed assessments of two recent major projects. That matter is being examined and it has started looking at the long-term benefits of buying or building versus leasing. It is looking at that, but that is something the Oireachtas is always going to have to keep a regular eye on in future, because it is not a once-off issue.

Next, we recommended that legislation should be implemented on a timely matter-----

Mr. Seamus McCarthy

There is also the issue of location and where one aims to locate a business. There are better value locations and higher cost locations.

The next chapter in the report relates to the Department of Public Expenditure and Reform. We had a discussion on the new single public service pension scheme. We were critical of the fact that the Department had not carried out its work before the legislation was passed, and it has accepted that completely. The Department says that, due to other pressures, it did not have the resources available to support the implementation of the legislation. That is dreadful. It goes on to say that the Department undertook a comprehensive analysis of the public service bodies to be included in the legislation in 2018, which was two years after the legislation was passed. It says it submitted a report to the Committee of Public Accounts in February 2019 and the only outstanding issue was the Dental Council of Ireland, which we dealt with last week. The Department has given us a complete update and that matter is now closed, but is only closed because of the committee's close scrutiny of the particular issue. The Comptroller and Auditor General had highlighted that, so at least that topic is now fully closed and being dealt with as a result of our vigilance on the matter.

The next item also deals with the single pension scheme. We recommended that consideration be given to investing these pension funds in a fund similar to the National Pensions Reserve Fund. It fully accepts this recommendation but the Department says it is a complex matter and would be a major change in approach for funding public sector pensions as contributions under the single pension public pension scheme are slightly different from the old arrangement. The Department further states:

Given the complexity of the matter, a substantial time and resource investment is required in order to ensure that the correct approach is arrived at. Accordingly, while this matter is progressing, it will not be concluded in the short term. The Department can update the PAC on progress, as required.

If somebody wants to come forward with amending legislation on how that fund is invested, that would be a matter for any Member of the House or of this committee, but not for the Committee of Public Accounts itself. We have highlighted the issue and the matter is now being examined.

The next item relates to leasing, and again to the Miesian Plaza. We were not satisfied that the balance between leasing properties and the acquisition of properties was correct and it accepts that fully. It has commenced a review, and has conducted a detailed assessment on two major projects recently. That recommendation is accepted by the Department, but we again have to follow its implementation.

The next issue refers to the credibility of the annual Estimates. We recommended that the Department of Public Expenditure and Reform should work closely with Departments with a history of requesting Supplementary Estimates, in order to ensure the Estimates presented to the Oireachtas are accurate from the outset. It notes that and hears what we are saying but does not want to accept that it presented inaccurate Estimates. I did not expect it to accept that, though we believe it.

It is saying "We hear what you say." We will ask for information on what is stated about the Department of Health because the Department of Health requires the biggest Supplementary Estimates each year. The bottom of page 9 states:

The creation of a new oversight group chaired by the Department of Public Expenditure and reform, to monitor spending and act as an early warning mechanism [in respect of the Department of Health Vote].

Monthly spending reports from Health to be submitted to the Cabinet Committee on Health each month, and

A quarterly health financial management memo to Government, to update Government on the overall health position.

I note the Government is voicing concern over health expenditure overruns at a much earlier stage in the year than was historically the case. I propose writing to the Department of Public Expenditure and Reform asking it to give us the background to this oversight group on the health Vote - who is on it; who chairs it and what its instructions are. I am pleased to see it is there, but this is the first I had heard of it and we now see it in print. Let us find out more about it.

On the Estimates, we recommended "that the Department of Public Expenditure and Reform takes all necessary steps to ensure that the Estimates are approved by the Oireachtas before the beginning of the calendar year to which they relate".

The letter notes this recommendation and states that the Estimates for 2019 were "published before the end of 2018 [on] 19 December 2018", which is fine. That is only the first step of the process, however. There is then the Revised Estimates process, which can include extra matters. They were published normally in February and go on for debate. We need to get the exact dates of when the Revised Estimates were published for the past two or three years, what the plan for next year is, and when the debate on the Revised Estimate can take place in the Oireachtas committee. While the Estimates are published early on, there is no Dáil debate on them until several months into the year when the Revised Estimates come out. The European Union has set timetables. We will ask for more specific details on the timetable for discussing and approving the Estimates, including the Revised Estimates by the Oireachtas.

On the Higher Education Authority we recommended "that, when drafting Higher Education Authority legislation, the Department of Education and Skills ensures that the Higher Education Authority is granted sufficient powers to allow it to provide effective oversight of the third level sector". That came as a result of the investigation into Waterford Institute of Technology. It fully accepted the recommendation and gave two pages of detailed response, referring to a number of changes to legislation. It states:

Currently, a Memorandum for Government is being drafted with the aim of submitting this for approval in June 2019. This Memorandum will seek approval for:

- the updating of the Higher Education Act, 1971 and the broad policy approach being adopted,

- the inclusion of a review power for the HEA in the legislation,

- the publication of the consultation report.

That is important. We highlighted practical issues over what is happening with spending. Here we find the legislation was deficient in the first place and it is now being corrected. Quite a bit of what we are uncovering in terms of following the taxpayers' money has its problems in defective or inadequate legislation in the first place. It is not for the Committee of Public Accounts to draft the legislation; our job is to highlight it. It is up to the Oireachtas, any Member of the Oireachtas or the Government to act accordingly. We have taken it as far as we can.

The next issue also relates to the HEA. We recommended "that the governing bodies of third level institutions acquire and maintain the appropriate skills" etc. It fully accepts that there should be an appropriate skills mix. The governing bodies should identify gaps themselves. There should be an annual self-assessment of the board. Under the Technological Universities Act 2018, greater emphasis has been given to this issue. This matter needs to be included in the proposed Higher Education Authority legislation. Hopefully it will be.

We come to the Revenue Commissioners. We had a recommendation for reducing the threshold at which they deem people to be high-wealth individuals for investigation. They fully accept the recommendation. We had a good outcome last week. They wrote to us last week saying they had done it and increased the number of cases now under this as a result of reducing the threshold from €50 million to €20 million for high-wealth individuals to be examined by the large cases division. There were 200 cases involved. This has resulted in another 475 being added, which is a very big increase. That is now being implemented and we dealt with that in correspondence last week. That is a very good outcome.

We recommended "that Revenue investigates the possibility of developing guidelines regarding out of court settlements for tax avoidance schemes in order to ensure a level of consistency in reaching such settlements in future". We discussed this matter. It is in our report, so people will remember what we are talking about. The Revenue Commissioners stated that in the majority of cases, like the ones we are talking about, there were out-of-court settlements and they reached settlements of €500 million in those cases. Maybe we did not delve into the detail. They say they have detailed compliance notes on that. The letter states that Chapter 8 of Revenue's "Code of Practice for Revenue Audit and Other Compliance Interventions" deals with that. We are pleased to see that.

On high-wealth individuals, we recommended that "consideration is given to requiring High Wealth Individuals to provide Revenue with an annual statement of assets held in Ireland". It states this would require a legislative change. Here we are. We highlighted a legitimate issue. When we delve into our stuff, again the problem is that the legislation does not cover it. It is not the Revenue's fault. I am highlighting that if any Member wants to deal with that topic by way of legislation, he or she should feel free to do so. It accepts the reality that it is a legislative issue that needs to be dealt with.

The next recommendation for the Revenue Commissioners dealt with the tobacco trade and the very low level of fines, which we felt were not a deterrent. They accept the recommendation, which is good. The response states, "The imposition of these penalties in individual cases is a matter for the Courts." Tax represents 80% of the cost of a packet of cigarettes. The Revenue Commissioners raise €1.4 billion in tax from tobacco products each year. They estimate that 13% of all cigarettes smoked in Ireland are illegal. Revenue estimates the loss to the taxpayer at approximately €229 million per annum. Between January and October of last year when we were doing our work, in the cases they prosecuted they followed up about €23 million worth of cases, which meant that 93% of their estimate of what was illegal was not detected or followed up on. Fines were issued for €140,000, which is fairly abysmal. They say it is up to the judges and the fines will be increased. I feel there is not sufficient detection of the issue if there is that level of revenue loss.

The next item also related to the Revenue Commissioners. We recommended "that the Minister considers whether separate identification of trading losses forward and capital allowances can be provided for in future legislation". Under the legislation, any business that has losses from a previous year can carry it forward against future profits to reduce its taxable profits in a future year. Most people accept that if a company has a trading loss, that is fair enough. Sometimes, if the losses are as a result of capital allowances relating to capital expenditure, we proposed that these be identified separately so that we can get a measure of all these losses forward. There is a big gap in knowing how the losses forward are made up.

The Minister noted the recommendations but under the scheme of corporation tax, they do not actually do the breakdown. The letter stated, "The amount of any trading losses... is not broken down between that which relates to capital allowances and that which relates to other trading expenses". That is exactly what we asked them to do. The Minister for Finance looked at this issue in respect of the banks, which is relevant to all corporate entities, in a report published in 2018. Again people might want to draft legislation on the matter; it cannot be done without legislation. The Revenue Commissioners made it clear that they have no legal authority to seek the information and the legislation does not require it.

If people feel it is a matter that needs to be dealt with by legislation, they should do so.

In this case, the Minister "will consider whether it is possible to introduce legislation". Is that slightly different? This is stated just after recommendation A.21. Is it slightly different? Is the Minister considering previous money and just saying it is a matter of legislation? Is that a subtle difference?

He said the Department looked at it.

It states that he "will consider whether it is possible to introduce legislation".

It states: "will consider whether it is possible to introduce legislation that would allow, in the future, trading losses carried forward to be separately identified". Of course, it can do that. Anyone who sees the corporation tax forms or and income tax forms will know there are 864 different questions on breaking down expenses on some of the forms that are sent out. It is easy to-----

I am not delaying this; I am just asking the question.

We could do with a departmental dictionary to explain what these terms mean.

We will not crack that one. It takes years of experience.

We accept that. He sees the validity and notes what we are saying, and he is saying he will consider it. He is not saying "Yes" or "No", and he has not rejected it. It is up to any Oireachtas Member if they want deal with that issue. That is how I see it. It is legislation, full stop. It is the finance Bill. One would then have to get the signature of the Taoiseach, and I am sure there would be a cost to the Exchequer, but we will not even get into that debate.

The next item concerns the Department of Employment Affairs and Social Protection. The report states that the committee recommends that an annual review take place to ensure the new controls regarding overpayments to jobseeker's under 25 are working effectively. When they introduced that scheme, there were different rates for persons under 21, those aged 21 to 25, and those over 26. It was difficult for the Department. It was a new scheme and there were inconsistencies across the Department. Officials told us at the time there was one person in each office with particular expertise who looked at all of this. They have acknowledged the work has been carried out. The most recent review was conducted in February 2019 and all cases reviewed were confirmed as being correct. A further review is being planned, subject to the outcome being satisfactory and, in line with the recommendations of the Committee of Public Accounts, it is proposed to schedule further reviews on an annual basis. The Department has taken up the recommendation and worked on it. The recent reports of cases examined means they are fully correct, so at least the recommendation is being carried through and the Department is going to keep an eye on it into the future.

I completely understand that we are making sure this is being properly applied. On a minor but important issue which I come across, flexibility is also required in some of these matters. I have dealt with youngsters who perhaps grew up in a foster arrangement or in care. When they are 18, they are in a very different position from somebody who is at home in a middle-class household. Whereas we are sometimes looking for rigidity or consistency in how something is applied, we should not lose sight of the fact that flexibility can be important as well.

I totally empathise. I was nervous of this recommendation lest it be seen that we were trying to get at vulnerable young people. We tried to make our recommendation as sensitive as possible because we all understand the point the Deputy is making. We hope the Department is listening to that.

Mr. Seamus McCarthy

This came from some audit work where we looked to see whether the conditions and the over-ides to the reduction had been applied consistently. If there are exceptional cases, so long as they are documented and it is recognised that they are exceptional cases, and why they are exceptional, that is in a different league to somebody inadvertently being paid more than the law says they are entitled to.

The next item also deals with the Department of Employment Affairs and Social Protection. We were concerned about delays in dealing with any payments that required a medical assessment, such as disability or invalidity benefit, in that there is a lack of doctors and there is always a delay on the medical side. We made the recommendation to examine the possibility of contracting nurses to carry out medical assessments more promptly. The Department fully accepts the recommendation and states:

Overall, the numbers of medical opinions provided have been maintained over the two years - 2017 and 2018- at 87,908 and 87,603 respectively. Currently the numbers awaiting a medical opinion at claim stage are below 1,000, [which seems quite low] with an average waiting time of less than 2 weeks for most schemes, 3 weeks for Domiciliary Care Allowance and 4 weeks for Disability Allowance.

Following the recent recruitment competition for medical assessors, seven candidates have been successfully placed on a panel and the first placements commenced in early March 2019.

The Department is currently considering the option of employing registered clinical nurse practitioners [as part of this process].

It also points out these applications can be held up because of means tests but we were concentrating on the medical side. The Department seems to have acknowledged there was an inordinate delay. It has recruited the staff since March of this year.

There is a high rate of success on appeal in the social welfare area, particularly in respect of disability payments. Essentially, the problem goes further back. There is a non-acceptance of medical evidence and the case then has to be reassessed. This is where a consultant says somebody has an illness that will continue for 12 months, and, in any case, the person will not qualify for, say, invalidity pension unless the disability is going to be continuous for a period of not less than 12 months. While the consultant says that and the GP backs that up, the case can still be rejected. The Chairman has seen this himself.

We have all seen it.

It then goes to appeal and other medics need to come in and oversee it. There is a rush to disallow some of these applications. The number of cases overturned on appeal shows us there is a problem in the original decision, despite there being a decent volume of evidence. I am not saying people should be paid allowances or benefits without providing the information but, in my office, I see people submitting copious volumes of information. This was prevalent in regard to domiciliary care payments and we just told people to expect a refusal and, if they did not get one, it was a bonus. There is a problem further back. While some of that has been rectified, there is still a problem in regard to the rate of refusals that are overturned.

I concur with the Deputy. Somebody in the Department should undertake a strategic analysis of the outcomes of these cases from the appeals office. If so many are being overturned, perhaps the criteria the appeals office are using should be used as the criteria for stage 1 of the application. We all know that when a case goes to the appeals office, the officials will tell the person to get more up-to-date medical information due to the passage of time, if nothing else, given the long delays involved, and the person will need to have an up-to-date consultant's report. That tends to work in the appeals office. The question is why it did not work on day one. The Department should examine what is done in the appeals office and see what manuals it is using, and then try to use the same approach from day one. We all share the same experience.

The next item deals with the same Department. The committee recommends that the JobPath programme be reviewed on a value for money basis to determine whether the programme should continue. The Department accepts the recommendation in full. It has conducted many surveys and the CSO has conducted a survey, with the statistics and business intelligence unit within the Department.

The note states: " econometric evaluation which was prepared as part of a collaboration between the Department's Statistics and Business Intelligence Unit (a part of the Irish Government Statistical Service which is headed by the CSO), and the Directorate for Employment, Labour and Social Affairs of the Organisation for Economic Co-operation and Development (OECD)." The Department says it has examined this and it concluded that 20% more people get jobs when compared to those who did not go in the first instance, although that is not very high. It then says that those who do get jobs earn, on average, 16% more than those who do not, perhaps because they get a better job.

The Department states that it is going to compile another report on the savings from the scheme as a result of people no longer claiming social protection payments. It will continue to produce reports to justify the scheme.

Absolutely. We look for evaluation reports and we get predictable responses.

We have been referred to the OECD's report.

I express a note of caution on these assessments. They certainly do not reflect the feedback received.

Feedback from people suggests that the State's local employment scheme is much more effective as a result of its more wholesome and comprehensive approach. Only the specific criteria that fit with the result the Department wants are assessed. That is my opinion. I have looked at the issue carefully and I have met people on the ground. The assessment does not take into account other very important criteria.

Other members share that view.

It is certainly not providing value for money. I will come back to that.

There is a second person here with the same opinion. The unemployment rate stands at 4.6%. We were told during the so-called boom years that 5% represented full employment. There is a value-for-money issue in respect of these contracts. There is more than one aspect that we need to consider.

The report's final recommendation reads, "The Committee recommends that annual targets are developed to ensure the number of PRSI checks remains consistent." The Department accepts this and state that in recent years the number of employer PRSI inspections has been low. It is very important for the protection of employees that the proper PRSI is deducted and recorded. The report also states :

This programme included a special Employer Inspection Conference that took place in early April 2019 and was attended by approx. 200 Inspectors. [...] Arising from this, and as part of its 2019 control plan, the Department has now set a target of 8,000 employer inspections for this year. In 2018, the Department carried out just over 2,050 employer inspections.

That is nearly a quadrupling of inspections. As Chairman of the Committee of Public Accounts, I want to tell employers that there will be four times as many inspections of the records of employers' PRSI contributions in the future in order to ensure that people who are in employment are getting the benefit of the PRSI contributions to which they are entitled. The Department is stepping up those investigations. Some people will like that. It is important for the protection of employees. That took a long time. It is a big report. It is an example of the work we do. I want to quickly move on to-----

Comprehensive replies such as this are welcome. In case it appears that this is all one-way criticism, I note that there is some very good stuff in it as well.

There is good stuff there. We are doing our work. It is good to have the interaction. It is regularly pointed out that a legislative issue is the cause of what we have uncovered. It is up to members to deal with that.

I now want to move on to the rest of the correspondence as quickly as possible. Some of it is relevant to this issue. One of the reasons I want to mention some of it is that issues raised within it are mentioned in some of this morning's newspapers. As Chairman, letters went out in my name to quite a few public bodies whose accounts were not submitted to the Comptroller and Auditor General by the end of March. We would like to see accounts within three months of the end of the year in the interests of good financial governance. We waited until the end of April to send these letters, thereby giving the bodies a bit of leeway. There are 18 bodies on the list and we have received replies from 13 so far. I will mention them briefly.

No. 2202B is correspondence from Water Safety Ireland in which it states it submitted its accounts by 30 May. We will ask the Comptroller and Auditor General to give us a report on the small number of bodies which have still not submitted their accounts at next week's meeting. By then it will be almost the end of June. We will ask for an update next week.

Mr. Seamus McCarthy

We will provide an update on the situation as of today's date.

Are we talking about the 18 accounts?

No, there are more than 18 accounts. Some of these Departments have multiple accounts.

I meant are we talking about the 2018 accounts?

Yes, we are talking about the accounts for 2018. We wanted all of the accounts submitted.

Have all of the accounts for 2016 and 2017 been submitted to the Committee of Public Accounts?

Mr. Seamus McCarthy

There is one outstanding. We will brief the committee on that next week.

The Comptroller and Auditor General will clarify that next week.

No. 2203B is from Technological University Dublin, which says it submitted its accounts on 29 May. That is good.

We also have a letter from Mr. Brendan Gleeson, Secretary General of the Department of Agriculture, Food and the Marine, regarding the financial statements for the fishery harbour centres. I am not completely happy with this. He states that the emphasis in the Department is on getting the Vote accounts ready for audit, which is fine, and that, as this is now well advanced, the Department has been liaising with the staff of the Office of the Comptroller and Auditor General and has confirmed that the statements for the fishery harbour centres will be submitted for audit later this month. The Comptroller and Auditor General can give us an update next week, although I would still ask the Secretary General to get these statements in on time in future and to ensure that the Department has the resources to do so.

The next item is No. 2231B from the Secretary General of the Department of Employment Affairs and Social Protection. This is on a different topic. We will hold this item over until the next meeting. It is not on the topic about which we are talking.

No. 2232B is from the HSE and has regard to the account for the long-stay repayment scheme, the long-stay repayment scheme donation account and the private property account. The HSE says that the first two of these accounts have been submitted and the patient private property account was submitted on 3 June. They are all coming in. The reason I am reading these out is that some of them may be of public interest.

The next item is from Dublin City University, DCU. It has sent a long letter. It states that there was a once-off issue due to the DCU incorporation project. That involved the amalgamation of St. Patrick's College, Drumcondra, the Mater Dei Institute of Education and the Church of Ireland College of Education into DCU. We understand that this was a start-up process. As a result of all of this, DCU had to restate its previous financial statements, which had been audited by the Comptroller and Auditor General and KPMG. I can understand that involved quite a bit of once-off work. The university says that, notwithstanding that, it is working closely with the Comptroller and Auditor General and KPMG in this regard. The Office of the Comptroller and Auditor General is scheduled to begin its audit on 24 June. We will get an update on that. The letter is quite detailed. We will note and publish it, even though I believe it is already in the public domain.

The next item is No. 2234B, which is correspondence from St. Angela's college, Sligo, which states that its audit was scheduled to commence on 17 June. As it is now 20 June, I take it that the accounts are in. We will get the update.

University College Cork states that its audit is due to commence with a site visit on 24 June. I take it that the accounts will be submitted in time for that.

No. 2238B is from the Legal Aid Board. Its accounts were submitted on 31 May.

The next item is from the Church of Ireland united diocese of Dublin and Glendalough with regard to the Church of Ireland College of Education. It states that the college was being wound up.

Mr. Seamus McCarthy

That is correct. It was amalgamated into DCU. It is one of the related institutions.

It was not quite sure who was responsible for the final set of wind-up accounts.

Mr. Seamus McCarthy

It was also unsure as to who was going to pay for the audit.

It did not know who would produce the accounts. We understand that this is an unusual situation.

Mr. Seamus McCarthy

It is also the case that there were no transactions, or at least very few, on this account during the period in question.

It is really just a matter of producing a final set of accounts.

Mr. Seamus McCarthy

It is just tidying up.

No. 2240B is from the Archdiocese of Dublin with regard to St. Patrick's College, Drumcondra.

Mr. Seamus McCarthy

That is another college which went into DCU. It is a similar situation. There are details to be tidied up but there will have been very few transactions.

The next item of correspondence is from the National Treatment Purchase Fund.

No. 2248B is a reply from the chief executive officer of the National Treatment Purchase Fund stating that a new patient access management system went live on 23 May in all public and private hospitals, which took longer than anticipated to implement. The new system will facilitate the earlier finalisation of draft accounts and ensure timely submission of annual financial statements in future. The CEO says the organisation will be ready for audit in July, after which we will get an update.

At this point, given that we have covered so much this morning and the witnesses are waiting, I propose that we note the remaining replies relating to overdue financial statements and then hold over the remaining correspondence until the next day. No. 2237B is a reply from the president of Letterkenny Institute of Technology indicating that its financial statements were submitted to the Comptroller and Auditor General on 3 May and explaining the reason for the delay. No. 2235B is a letter from Mr. Derek Moran, Secretary General of the Department of Finance, referring to a number of accounts under the Department's remit which had not been submitted when we wrote to him. He indicates that the sundry moneys deposit account was sent for audit on 13 May and, on 14 May, financial statements for the hepatitis C special account, the hepatitis C reparation account and the local loans fund were sent.

I received additional replies last night from several other bodies in response to our letter regarding overdue financial statements. I note them now and we will circulate and publish them next week. One was from the State Examinations Commission, in respect of which I had particular concerns. It is a detailed letter indicating that draft financial statements were submitted to the Comptroller and Auditor General on 31 May.

I also have a letter from the Discovery Programme - Centre for Archaeology and Innovation Ireland. I am not sure which Department is responsible for that programme.

Mr. Seamus McCarthy

It is an initiative of the Heritage Council.

The reply indicates that the late submission of its accounts for 2018 arose because the board had to accommodate the work schedule of the accountants it engaged. I am informed that the accounts will be submitted to the Comptroller and Auditor General's office this week, on 21 June..

I also received a reply from Mr. Mark Griffin, Secretary General of the Department of Communications, Climate Action and Environment, regarding financial statements for the environment fund. Departmental officials agreed last year that the accounts would be submitted on 30 June. Mr. Griffin indicates that arrangements have been put in place to ensure that timeline is met.

The reply from the Pre-Hospital Emergency Care Council thanks the committee for its letter and indicates that its accounts have since been submitted to the Comptroller and Auditor General's office. There may have been a slight misinterpretation of our letter in that the council took it to mean that we wished to see its accounts before they went to the Comptroller and Auditor General. To clarify, our letter was to request that they be submitted to Mr. McCarthy's office.

That last batch of letters came into my possession yesterday. I did not have time to circulate them before today's meeting but I wished to get them on the record. We have made great progress in ensuring that public bodies submit their financial statements for audit. It may be boring stuff, but it is important to keep the pressure on them. If they do not produce annual financial statements, they are not doing their work and we cannot do ours.

I was not here last week and wish to clarify something. The documentation included a list of correspondence from the board of the national children's hospital, but I do not see it anywhere today. It referred to outstanding documents we requested, various questions we asked, information on business cases etc. The Chairman said at the meeting two weeks ago that if those documents were not submitted by a particular date, we would bring the witnesses back before the committee.

My understanding is that we did receive that information.

Did we get a response to everything on the list?

Yes. We will recirculate that information to members.

That would be very helpful.

A topic we have discussed at recent meetings is the liquidation of the Irish Bank Resolution Corporation, IBRC. In response to a priority question I asked in the Dáil yesterday, the Minister indicated that he is not going to set up a committee of inspection. He also said that the special liquidator has produced six voluntary reports, which are available on the Department's website. Those reports do not necessarily form part of the scrutiny we are conducting here, but some of the content may be relevant. It would be useful to go through them if we are having a discussion here, so that we can compare one thing against the other.

That is included in our work programme, which we will move on to shortly.

Are there penalties or restrictions that may be applied to public bodies which drag their feet and fail to submit their audits on time?

Three weeks in front of this committee.

The only sanction is public embarrassment, which I hate to have to do. It should not be our job to police how the well-paid people in these public bodies are doing their jobs. However, if nobody else will police them, including the departmental sectoral committees, we will do it for them.

Is it the same bodies that are always non-compliant in terms of not submitting their accounts on time?

Not necessarily. Bodies under the remit of the Department of Education and Skills were very bad some years ago. For instance, almost all the education and training boards were routinely late. We have smartened that area up.

Mr. Seamus McCarthy

There has been a huge improvement in submission times as a result of the sustained pressure from my office and from this committee. There are no specific penalties for late submission but there is a great deal of expense and difficulty involved once they go into an arrears position and must get things back on track. It is really important that organisations get it over with and submit promptly. If they are called before this committee to discuss a specific issue, they should do so, deal with it and move on. There is nothing to be gained for any organisation from delaying.

In the year before this Committee of Public Accounts commenced its work, 40% of accounts were not in within three months. Last year, 87% of public bodies submitted on time, and I expect that figure to be even higher this year.

What time limit applies? Is it six months?

It varies. We are trying to ensure they submit their accounts within three months.

Mr. Seamus McCarthy

The aim is to have all accounts submitted within three months. From a resource point of view, we cannot get to everybody within that time, but at least we have more options to schedule once the organisations are ready to go. It is in everybody's interest to do things promptly.

We will now move on to the work programme. We have no statements of account to consider. We will shortly welcome delegates from the Department of Agriculture, Food and the Marine to discuss the 2017 appropriation account for Vote 30. In the afternoon, we have a private meeting with Mr. Allen Morgan, a former surveyor at the Office of Public Works. I ask as many members as possible to try to attend the afternoon session.

Next Thursday, we will have delegates from the Department of Health and the Health Service Executive here to discuss in public session the health Vote and the HSE's financial statement for 2018. The following Thursday, we have a discussion with delegates from the National Treasury Management Agency. The State Claims Agency will probably be our main focus in that discussion, so we might allocate separate time for that. On 11 July, we will discuss the accounts for the Houses of the Oireachtas, followed by a private meeting that afternoon to discuss the IBRC liquidation.

In addition, we will have a private meeting next Tuesday at 1 p.m. to consider the first input to our next periodic report, which is a discussion document produced by the secretariat. We might have to hold another meeting the following day, because we must complete our first reading of it next week if it is to be ready for publication before the recess. I have a word of caution for any journalists listening who may receive a copy of the document that is issued to committee members this week.

The document is not from the Committee of Public Accounts. It is a discussion document prepared by the secretariat, so people should draw conclusions or reprint potential conclusions at their peril. The report will be significantly amended by the committee over the course of our three or four meetings on the matter. Anyone who prints what they think is a conclusion is barking up the wrong tree. That is all I can say. They can print away if they want. I make that observation because it tends to happen, so I am putting out that public warning. That is the work programme and those are the private meetings. We might have to go into private session before the witnesses come in, or we can do the private session this afternoon. Some items correspond, but the Irish Bank Resolution Corporation, IBRC, was mentioned.

I want to follow up on Deputy Catherine Murphy's parliamentary question. The six reports are glorified PowerPoint presentations, which we would have received. There is not much in them besides a headline figure so they will not give us much detail on that, though we could review them before the private meeting. It is good that Deputy Catherine Murphy asked about IBRC, but the response was unsatisfactory. The Minister is obviously a very busy man and these responses are often written on Ministers' behalf by their teams. We can understand that. However, in his answer to Deputy Catherine Murphy, which she has shared with me, the Minister clearly sets out that we disapplied normal rules in legislation for this liquidation, which is the biggest in the history of the State. The Minister says we can go through the six PowerPoint presentations on the website to see the headline figures. However, we have established here that two people have effectively been put in place in lieu of a committee of inspection, and that was reaffirmed recently. Based on my own humble experience, having voluntarily liquidated my own company with very modest turnovers and so on, it is just laughable. The issue here is not that we are not going to get to the end of this, because we will, no matter how long it takes. We will all celebrate and back-clap and say how well it was done, but we have highlighted that we had no benchmark position because no evaluations were done at the beginning, and so on. Apart from that, the Government is heading for costs, by its own admission, of €306 million, and we do not know if that represents good value. The Minister cannot be satisfied, despite what he said in response to Deputy Catherine Murphy's question. We need to stay on this and keep pushing it because long after we are gone, that reflection mechanism Deputy Connolly spoke of will be no doubt set up, there will be a commission of investigation or a tribunal of inquiry, and we could save the State a great deal of money by just doing a few little bits now.

We have scheduled a private meeting specifically on this topic, which is in our work programme. At this stage I am going to suspend for a few minutes to allow the witnesses to take their seats.

Sitting suspended at 10.43 a.m. and resumed at 10.50 a.m.