We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, who is a permanent witness at the committee. He is joined by Ms Orla Duane, deputy director of audit. Apologies have been received from Deputy Shane Cassells.
Are the minutes of 19 September agreed? Agreed. No matters arise from those minutes.
We shall now deal with correspondence. There are three categories of correspondence. Category A comprises the briefing documents and opening statements in respect of today's meeting. No. 2425A, dated 1 October 2019, and No. 2426 A from An Bord Pleanála are briefing documents and opening statements for today's meeting. We will note and publish these. Is that agreed? Agreed.
Category B comprises correspondence from Accounting Officers or Ministers or both and follow-up documents on Committee of Public Accounts meetings and other items for publication. We discussed No. 2342 on the Strategic Banking Corporation of Ireland last week. The information provided was not that requested by the committee and we circulated among committee members what we asked for precisely. We decided not to publish at the time and to hold the matter over until we received a response from the corporation. When we receive it, we can consider publishing.
No. 2354B is from Professor Phillip Nolan, President, Maynooth University, dated 29 July 2019, responding to a request from the committee for details on an investment by the university in a subsidiary which will not be recovered, as well as information regarding employment contracts for employees in the organisation. Professor Nolan confirms the loss and states the investment was appropriate based on the information and advice available at the time. He also provides an information note in regard to employment contracts and states that engagement of staff on an occasional basis is necessary, appropriate, fair and in compliance with relevant legislation. While we will note and publish this item, I want to make a few remarks on the subsidiary. Maynooth University set up a subsidiary called Innovation Value Services Limited for research and development and the organisation did not meet its expectations. The company was ultimately wound down at a loss to the university of €750,000. That is a very substantial figure and that is why we wrote to the university. In its detailed reply to us, it points out that the provision of €750,000 against the impairment of the loan to Innovation Value Services Limited represents a real and regrettable loss, and that it will not impact on education or services to students but will reduce the university's capacity for research and knowledge transfer. That is an honest answer from a third level college. Normally it is said there is no effect but at least in this case the university says there will be an impact on its capacity for research and knowledge transfer. The university had an innovation value institute in the college that had attracted over €10 million since 2010. It decided to set up a subsidiary, which it is entitled to do. Before it set up the company, based on what is projected, it commissioned PwC to produce a report, and the latter advised against the initial business plan, which projected an investment of €1.25 million. The investment plan was then scaled back on that basis. The university invested €410,000 in the subsidiary in October 2015 and, in May 2016, it advanced another €300,000. After the first year of operation, it agreed to defer the loan repayments until December 2019 because it knew the organisation was not meeting expectations. In May 2019, the decision was taken by the university executive not to invest further in the company. The board of Innovation Value Services Limited met on 18 June 2019, which is not that long ago, and decided to wind up the company and cease trading by the end of the financial year, which I presume is about now. Those are some of the salient facts. We need to ask for a copy of the final accounts for the company when it is ultimately wound up and audited.
Second, we raised the question as to whether the loan of €750,000 was included on the university's risk register. The replay given was that the risks associated with Innovation Value Services Limited were not specifically included in the register. The university said it updated the risk register in February 2017, which was two and a half years ago, and it was further updated over the summer of 2019, which has just passed. At this stage, we must write to the university and ask for the risk register. In my view, this should be produced on an annual basis, at a minimum. The HSE produces them on a quarterly basis. It does miss things but at least it has a system in place every quarter. I expect a body such as the university to produce a register regularly. A year is the most that should elapse before producing a register. Even if we get a register once per year, it will not be too bad. The one the university is operating from is two and a half years old. I propose that we write to it asking it for the risk register it was working on over the summer. Let us see where that stands.
That is all I want to say about the matter.
I mentioned the occasional lecturers. The university gives details on this on page 17 of its letter, which is a very comprehensive document. There are about 40 pages in the reply. It indicates there are 1,394 occasional staff, 668 of whom receive under €1,000 and 239 of whom receive between €1,000 and €2,000. The overwhelming majority of them receive under €4,000 and would not be considered in any way full-time. They are occasional, perhaps. Most of them are postgraduates at the college. That is what the university says here. I will come to Deputy Catherine Murphy, who will have more knowledge on this. I am just putting on the record what the university says because we will discuss the response. I want to put the response on the record because the university does not expect everyone to read the 40 pages. The university is saying the overwhelming majority of the occasional staff are postgraduates doing just a small amount of work here and there. It says it complies with legislation. That is the university's response. I have a duty to put it on the record.