Dáil Éireann Debate, Tuesday - 17 November 2020
900. Deputy Catherine Murphy asked the Minister for Agriculture, Food and the Marine the way in which his Department’s annual amount for contingent liability is set; the factors considered when setting contingent liability; if forecasting is undertaken regarding setting future amounts; the contingent liability figure for his Department for 2020; and if the contingent has been utilised to date in 2020. [36897/20]
Amharc ar fhreagraContingent liabilities are disclosed under the prudency principle of accounting, as the earliest indication of a possible future outcome. The contingent liabilities for 2020 are set out in the 2019 Appropriation Account and cover a number of areas of the Department’s activities including EU operations, pending legal proceedings and the Haulbowline remediation site.
In terms of the EU, these contingencies are disclosed once the Department becomes aware of an audit outcome or case deliberation. It should be noted that these proceedings may incorporate an information, appeals and mitigation process and many do not result in a financial penalty; this may only be disclosed at final arbitration.
Legal contingencies are made on the basis of the likelihood that cases may arise in the course of the day to day operations of the Department. Should a legal case materialise, DPER sanction for payments would be sought and provision made in the Budgetary process for payment.
The Haulbowline case is an acknowledgement of the risk attached to remediating an industrial site, to date no unforeseen costs have arisen.
Provision for contingent liabilities is based on a prudent approach to possible liabilities which may arise in the medium to long term. They are provided for on the basis of known investigations or deliberations which may or may not result in a financial charge to the Vote as yet to be determined. This general prudent approach is taken to disclose any potential charges in the contingent liability note.
