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COMMITTEE OF PUBLIC ACCOUNTS díospóireacht -
Thursday, 25 Apr 2024

Business of Committee

The public business before us this afternoon is as follows: minutes, accounts and financial statements, correspondence, work programme and any other business.

The first item is the minutes of our meeting of 18 April 2024, which have been circulated. Does any member wish to raise any matters in the minutes? No. Are the minutes agreed? Agreed. As usual, they will be published on the committee's webpage.

I will move on to accounts and financial statements. Two sets of accounts and financial statements were laid before the Houses between 15 and 19 February. I will ask the C and AG, Mr. Seamus McCarthy, to address these before I open up the discussion to the floor.

Mr. Seamus McCarthy

Go raibh maith agat, a Chathaoirligh. First, we have the financial statements for 2022 for Waterways Ireland. This is one of the North-South bodies that I audit in co-operation with my counterpart in the North. That received a clear audit opinion. The second is the Aquaculture Licences Appeals Board accounts for 2022. It also received a clear audit opinion.

I thank Mr. McCarthy.

There is one issue.

On Waterways Ireland, was there an issue in the previous year? Presumably the Comptroller and Auditor General keeps a record from one year to the next of issues that are outstanding and that he goes back to them. Presumably, because it does not appear now, the Comptroller and Auditor General is happy that it has been resolved.

Mr. Seamus McCarthy

Yes. It was an accounting issue about the valuation of canals. It changed the way it was accounting for the canals in the 2021 financial statements. Effectively, there was a long delay while that whole process was being worked out and it delayed the completion of the 2021 audit, but it was resolved in 2021. There was no matter carrying forward to 2022.

Did it value them?

Mr. Seamus McCarthy

No. That was the point. It had been carrying them at a value and they decided that, effectively, it did not make sense to be trying to value them and to do the inspection regime to try to figure out what would be the replacement cost of the canals because, effectively, they are irreplaceable. It decided that it would carry them at nil value, but, obviously, they are still an asset. They are still a resource.

I thank the Comptroller and Auditor General for that. Is it agreed to note the listing of accounts and financial statements? Agreed. As usual, they will be published as part of our minutes.

I will move on to correspondence. As previously agreed, items that were not flagged for discussion for this meeting will be dealt with in accordance with the proposed actions that have been circulated, and decisions taken by the committee on correspondence are recorded in the minutes of the committee’s meetings and published on the committee’s webpage.

There are 12 items flagged for discussion under category B, that is, correspondence from Accounting Officers and-or Ministers and follow-up to PAC meetings. The first one there is from Ms Kate Duggan, the CEO of Tusla - the Child and Family Agency, dated 12 April, in relation to a number of issues that we raised at the meeting on 29 February. It is proposed to note and publish this item of correspondence. Deputy Catherine Murphy had flagged that she wanted to comment on this. It is No. 2524.

I am just not sure if Tusla or HIQA has a role in IPAS centre. Tusla may have a role but HIQA might not have. I just do not know.

Obviously, we got that report last week. It was the first of its kind. I am sure there are loads of other reports that go along with all those other inspections on accommodation for asylum seekers, but who does the inspection? Do they have an involvement in the inspection? In terms of standards, can we clarify that?

I am not sure about that. We will seek clarity on that.

I will move on to No. 2528. That is from Ms Oonagh McPhillips, Secretary General of the Department of Justice, and it is dated 12 April. Ms McPhillips is providing information to the committee that we requested regarding non-compliant procurement. It is proposed to note and publish this item of correspondence. I have flagged the item and Deputy Catherine Murphy has as well. Is it agreed that we note and publish it, first?

That is agreed. I call Deputy Catherine Murphy on No. 2528.

Sorry, I have No. 2527 there for some reason. If the Cathaoirleach wants to proceed, I will have a look.

It is No. 2528. I want to comment briefly on it. It is in relation to non-compliant procurement. The ten contracts awarded were in place at a value of €2.369 million. Of the ones listed, there is over €1 million for Word Perfect - a contract awarded with an interpretation service that is drawn down. Ms McPhillips sets out there corrective action. The Department has commenced drawing down interpretation services under the Office of Government Procurement framework. One wonders why translation and interpretation would not have been put out to tender in the first place.

There was a second one. The second largest one is translation again. There is a figure there, a substantial figure, of €661,000. A lot of the issues listed as non-compliant are coming up. They are certainly ones that one would imagine are not specialised and for which there would be more than one provider available. That is the point that is a bit puzzling about it, and why the Department is not complying better with all of that. They set out corrective actions in it and we need to follow that when the Department comes in again to the committee to make sure these are being followed up on.

Deputy Catherine Murphy wanted to comment on this as well.

I have a note of this as No. 2527. Is that the right one?

It is dated 12 April. Sorry, No. 2527 is one as well, but the one we are on at the moment is No. 2528.

I have a note with me for No. 2527.

Okay. Has the Deputy No. 2528 available to her?

Mr. Seamus McCarthy

There has been an ongoing issue with the procurement of translation services.

There were legal proceedings relating to a couple of competitions that were run. Maybe the best way to get an overview of that would be to ask the Office of Government Procurement for a briefing on what has been the problem, whether it has been resolved and whether a framework is in place for Departments.

We can do that.

I am okay with that.

We will ask the Office of Government Procurement to come back to us on that.

Moving on, No. 2538 is correspondence from Mr. Maurice Buckley, former chairperson of the Office of Public Works, dated 16 April 2024, providing information to the committee regarding non-compliant procurement. Deputy Catherine Murphy and I have flagged this.

The same response is repeated through the report. It is copy and paste - "it is not possible to rectify this non-compliant procurement retrospectively". Perhaps we could ask the OPW if the old process was tested before it was adopted. Is the new procurement process actually in place at this stage or is the OPW still relying on the old process and it is in transition? I am not entirely sure where we are with it.

There is a new CEO in the OPW. I understand Maurice Buckley has retired. I was going through this last night and saw that in respect of non-compliant procurement and security for the National Concert Hall, prefabricated accommodation for Macroom Garda station and an information kiosk in the Phoenix Park involved figures of €127,000 and €165,000. The OPW specialises in property and deals with security companies regarding a number of properties it has around the State. One would imagine that the acquisition of prefabs or work on prefabs or this kiosk in the Phoenix Park would go out for proper tender. I think we could add that to the list for the Office of Government Procurement and let it know that we are concerned about this. Is the Deputy happy with that?

I have one general point, which may be something that is raised with the Comptroller and Auditor General at audit time and relates to procurement. Talking to people in public bodies, very often, they will not get multi-annual funding. They will get notification of funding in March and have to have it spent by October. They are handing back money because they are put in an impossible position or they are not sure about getting value for money by virtue of the way this is handled. Is this a recurring thing? Is the Comptroller and Auditor being made aware of these kinds of shortcomings and non-compliant procurement when he is carrying out an audit?

Mr. Seamus McCarthy

The way we tend to look at it is that rushed expenditure at the end of the year would pose a risk and so we would be looking to see that there is a consistent pattern in the spending. It may be different if you are talking about capital funding. Once a contract is entered into, even if it does not progress, the commitment is there and is going to have to be met for the following year. There are a couple of different risks there and nobody has specifically raised that one, namely, that you only have this expenditure and it must be done this year. If you legitimately enter a contract for a service and the service extends over a number of years, the commitment will have to be met from subsequent years' allocations. It may reduce the scope then for further commitments to be entered into the following year but the control is supposed to apply and it is there for a purpose. If the Deputy has examples of cases that were raised, we could have a look at them and see if we can come back to the committee with a better understanding of the issues that arise.

That is probably the best way to do it because they are practical examples.

The next nine items on the list are all related to non-compliant procurement. The first is No. 2518 B, correspondence from John O’Halloran, president of University College Cork, dated 11 April 2024. Members will see some of the items such as carpentry services, printing and dental services.

No. 2520B is correspondence from Deirdre Keyes, chief executive of Kildare and Wicklow Education and Training Board, dated 10 April 2024. Some of them are for catering. One is for a carpentry store while another is for food supplies. The total spend on non-compliant procurement was €986,000, almost €1 million.

No. 2521B is correspondence from George O’Callaghan, chief executive of Limerick and Clare Education and Training Board, dated 10 April 2024. Again, we will see printing, engineering works, hairdressing and apprenticeships, with quite a large amount spent on printing services - €375,000.

No. 2523B is correspondence from Tom Grady, chief executive of Mayo, Sligo and Leitrim Education and Training Board, dated 12 April 2024. There is a similar pattern there. Members will see the grid outlining the various items. Again, there is a variety of stuff there.

No. 2527B is correspondence from Bernie McNally, Secretary General of the Department of Education, dated 11 April 2024. Some of it is very specialised when you go through it. The correspondence outlines the measures the Department is taking to address that.

No. 2529B is correspondence from Mary Day, chief executive officer of St. James's Hospital, dated 15 April 2024. Members will see substantial non-compliant procurement there in terms of €28 million in total. With a hospital, it is understandable that a lot of it will be specialised but Fleetwood paint is in it at €20,000. One would imagine that it should be easy enough to tender for items like that.

Mr. Seamus McCarthy

Yes.

As for a lot of the information that is presented, you can see they have been able to rectify it and bring it into compliance by running a tendering competition that complies with what is required relative to the scale of the spend envisaged. We have been keeping a focus on this and we draw attention to it wherever the non-compliant procurement expenditure exceeds €500,000. It is constant and there has to be constant focus on this. Since the committee has expressed an interest in this, many organisations are now appointing specialist procurement officers and there is more professionalism and process coming into the system, which is a good thing.

We are approaching the conclusion but there are a few more to go over. On the ETBs, many are modest in size and may not be able to have a dedicated person for that. However, one would imagine there is a basic set of procedures that an official, who would have other roles, would operate to when he or she is given the job of procurement. It is not that complicated to set out procurement procedures.

Mr. Seamus McCarthy

I think procurement is actually a very specialist and technical area. It is easy for-----

But the basics in terms of looking for-----

Mr. Seamus McCarthy

Regarding basic principles, there is a set of basic things that need to be done and gone through. I think with some of them, particularly the ETBs, there is a provision that if a local school has its own budget and makes its own procurement decisions, they can go ahead and advertise locally and so on. If it is a big contract, they are still bound to do it as is appropriate to the level of spend. In that situation, one would expect the central procurement officer to be watching, checking and ensuring that the proper procedures are being followed at a local level.

Where is the central procurement officer?

Mr. Seamus McCarthy

In many particularly bigger organisations, they should have their own specialist professional procurement officer.

If it is a question that, for example, some of the ETBs are relatively short-staffed, presumably with remote working now it would be possible to have a collaborative approach in that they could employ one person between two or more of them.

Mr. Seamus McCarthy

ETB Ireland, which is an organisation that supports these kinds of processes in all of the ETBs, is assisting in developing the capacity of individual ETBs and providing training and so on on a collaborative basis. There is also scope there if two or more wanted to band together and run one competition. That is a possibility. Very often, particularly for fresh products or where small quantities are required locally, it may make more sense for the procurement to be done locally. One would not expect an individual school, particularly if it is a medium-sized school, to necessarily have a specialist procurement officer. However, I would expect an ETB to have one.

ETBs, compared with the old VECs, involve two to three counties and are bigger. They also have a bigger role and their budgets are far higher than they used to be.

Mr. Seamus McCarthy

Absolutely. Some of them are into hundreds of millions of euro.

They are running many more facilities now. If one looks at Laois and Offaly ETB and what Laois VEC used to be, they are much different.

Economies of scale are another thing. I am sure they are conscious of that too.

The basic principles of procurement should be-----

Mr. Seamus McCarthy

It is important to get competition and to have proper processes that give you assurance that you are getting what you need at the best price.

I wish to return to No. 2527, which is one that the Chair called out. It is a relatively small one at €48,000. It is about four or five from the bottom and it states:

A competitive tender process through eTenders - [you need a magnifying glass to read this] - was carried out in ... 2023 to fill this role. This competition was unsuccessful and did not result in us entering into a new contract without a competitive process. The contract has now expired...

They contracted on a temporary basis. I wonder about when they cannot use something. That relates to a GIS system that is predicting school numbers, for example, or that is one of the purposes it is used for. If that was not in place, would that have an impact then on predicting, for example, adequate school places?

We are looking at consequences.

Moving on, there is one more ETB. It is No. 2532 with Ms Caitríona Murphy, chief executive officer of Dublin and Dún Laoghaire Education and Training Board. That is a similar situation. Again, there is a list of non-compliant procurements ranging in size from €146,000 to €54,000 for painting and decorating. They are not ones that should not be coming in as non-compliant. We will note that along with the rest of them.

No. 2535 is from Mr. Kevin McCarthy, Secretary General at the Department of Children, Equality, Disability, Integration and Youth, dated 16 April. That is No. 2535. Deputy Murphy will need her magnifying glass here again. It looks to me like there was €111,579,000 in non-compliant procurement. Am I reading that correctly? The print is tiny.

Mr. Seamus McCarthy

Yes, I think the Chair is correct. The bulk of the non-compliant procurement reported by this Department relates to the provision of accommodation for international protection seekers or applicants.

It is in the years. I understand an emergency but I think from here out with this Department, we need to be able to see that. The word "emergency" is used a fair number of times down through the attached columns. From here out, there will need to be greater care taken of this and a greater examination of it to ensure that there is some level of competitiveness in securing these different venues. Up to now, it seems to be a case of “just get whatever you can get and use it because we are stuck” and there is pressure on. That is obviously by far the biggest at €111 million.

The last one is No. 2537.

I wish to comment on No. 2535.

Sorry, go ahead Deputy.

When we see non-competitive procurement, it tends to be for one year. However, by virtue of the fact this is put in the “emergency” category, it is not following the usual processes that are very public processes where there is a tender. This is kind of doubly non-compliant because it would be following the normal type of procurement where there would be multiple tenders for something. I picked out No. 59 on the list, which states:

This company provides Facilities Management in a number of centres which accommodates International Protection Applicants. No competitive process took place.

I can understand the emergency in relation to the accommodation but I cannot understand the emergency in relation to facilities management. I do not see why that would not be tendered for, certainly in the second year - whatever about putting something in place immediately. That one jumped out to me.

When the Secretary General, Mr. Kevin McCarthy, was here he said that the service continues to be contracted outside compliant procurement.

The document states:

Facilities Management services are now subject to a procurement process for new sites acquired. A Facilities Management framework is currently being established.

It seems they are just grappling with this now.

I do not doubt that Department had, and has, an enormous amount to do. Everything has been located in one Department. Even if there has been an increase in staff numbers, they have had to be moved around to make sure that payments were made, where there is a regime around payments being made on time and so on. This should be cross-Government. That is where we will start to see pressure being taken off that one Department. We are starting to see it in things like that coming through.

No. 2537B is from Graham Doyle, Secretary General of the Department of Housing, Local Government and Heritage, and is dated 16 April. It is proposed to note and publish this item. Mr. Doyle states in his letter that the Department of Housing, Local Government and Heritage awarded 128 public contracts where the value exceeded €25,000, exclusive of VAT, to the value of €21.415 million. He further states that the Department complied with procurement guidelines, with the exception of five contracts to the value of €1.246 million, that these figures show that 94% of contracts were compliant with public procurement rules, that each of the five non-compliant payments have been reviewed by the Department, and steps have now been taken to bring them into compliance. The important bit is that progress is being made on that. It is one we will watch. Officials from that Department are before the committee on a regular basis so we can get an update from them on it. Again, looking at the list of services on the back of it, including what there will be for Irish language translation and a Webex cost, there is a possibility of starting to procure those services and doing that properly.

It proposed to note and publish the nine items. Is that agreed? Agreed.

There is a note with No. 2535B from the Department of Children, Equality, Disability, Integration and Youth. That item was supplied on the basis that we do not publish the attachment because of commercial sensitivity. With the exception of that, it is agreed that we note and publish everything else.

We will move to category C, which is correspondence from, and related to, private individuals and any other correspondence. There is one item from Deputy Violet-Anne Wynne dated 11 April. It requests the committee to invite the University of Limerick, UL, Hospitals Group to a meeting. This is not a stand-alone hospital independent of the HSE. The person who is accountable to the committee for the UL Hospitals Group is the CEO of the HSE, Mr. Bernard Gloster. It is proposed that we include UL Hospitals Group as an area of interest the next time we schedule a meeting with the HSE regarding its financial statements. Is that agreed? Agreed. It is a given, whenever the HSE is in again, that the issue of UL Hospitals Group will definitely come up because considerable work is ongoing in trying to improve services there and the difficulties that are being encountered. That concludes correspondence.

Moving to the work programme, members have been circulated with a draft programme for discussion, which is now displayed on their screens. We will go through that. Next week, we will meet with the National Transport Authority, NTA, on 2 May regarding its 2022 financial statements. The committee has flagged BusConnects, the purchase of buses for companies providing public transport, the provision of bus shelters, and the active travel investment programmes as areas of interest.

On 9 May, we will engage with UL on its 2022 financial statements. We will be joined by the deputy president, who has been delegated the accountability function in the absence of the president, and chancellor. Representatives of the Higher Education Authority and the Department of further and higher education will also attend.

On 16 May, we will meet with the Department of Education. The following areas of interest have been flagged: running costs and demand management for schools, school building programmes, school transport, disposal of assets of religious orders, and Caranua. We must be nearly at the end of Caranua.

On 23 May, we will engage with the Department of Defence on Vote 36 - defence, and chapter 12 of the Comptroller and Auditor General's annual report on stock management in the Defence Forces.

Mr. Seamus McCarthy

On that, the Department of Defence also has an Army pensions Vote. It may be worthwhile, to get a complete view of expenditure in that area, to include that Vote as well.

We will ask for that to be included. Defence takes in the navy.

Mr. Seamus McCarthy

It does.

I suggest we include as an item, since there is an issue coming up in relation to it, that what was the FCA and is now the Reserve Defence Force also be included. There may be some questions around that. The strength of the Reserve is down to a fraction of what it used to be.

On 30 May, we will meet with the National Paediatric Hospital Development Board regarding its 2022 financial statements.

On 13 June, we will engage with the Office of Public Works on Vote 13 - OPW. The following areas of interest have been flagged: the national children's science museum project, flood relief schemes, and vacant properties in the OPW portfolio. If there is any other issue members want to include, they should send a request to the clerk and the secretariat. Sometimes, with the OPW in particular, there might be an issue in the area or region where members live that they want dealt with. An issue I will ask to be included is that of modular homes for Ukrainian refugees.

Last week, it was agreed to schedule a meeting with the Department of Agriculture, Food and the Marine regarding the Irish Horseracing Regulatory Board, IHRB, and the Road Safety Authority for the remaining slots in June and July. The secretariat is in the process of finalising these dates. The IHRB has confirmed 20 June. The secretariat is in the process of finalising the other two dates.

Do members wish to comment on or add anything to the work programme? I take it that the work programme is agreed.

Moving to the last item on the public agenda, are there AOB items? I take it we are all right on that.

We will briefly resume in private session before adjourning until 9.30 a.m. on 2 May, when we will engage with the NTA.

The committee went into private session at 2.08 p.m. and adjourned at 2.22 p.m. until 9.30 a.m. on Thursday, 2 May 2024.
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