PAC Hearing | April 3, 2014

Mr Robert Watt, Secretary General Department of Public Expenditure & Reform, called and examined.

[Extract]
Deputy John Deasy:
First I’m going to ask you about what I regard as the largest, potentially, public-private partnership that this country has seen in many years, and possibly has ever seen. And that is something I know your Department is involved in: that is the Irish Strategic Investment Fund. It’s not listed here in your opening statement or dealt with, but I think it’s something your Department might be leading on with regard to the inter-departmental committee with Finance and the NTMA (National Treasury Management Agency). 
As much as I know about this, it’s a €6.8 billion fund which comes from the National Pension Reserve Fund, which is being turned into an Investment Fund, that is looking for commercial investments from the private sector. That €6.8bn hopefully will be matched by another €6-7bn of private money, and the Government’s idea — well, it’s started already — is that it’s being farmed out to private equity funds in Dublin, in London, to look for those commercial investments. And that’s fair enough. 
What I am interested in is: has any thought been given to where this money is going to be spent, or is this random with regard to commercial investments coming into the Government; the equity funds taking a look at these and some kind of process within Government — is there any sense, or has any thought been given to parts of this country that frankly are stagnating? 
We’ll say, for argument’s sake, there’s some truth to the idea that Dublin, for example, has seen some kind of a recovery. But other parts of the country have not. Surely because this is the largest stimulus fund this country has ever seen, or will see for years, has anybody in Government thought about diverting some of this money, as a critical policy measure, towards those parts of the country that are stagnating, that are regressing in some cases when it comes to unemployment. And that have seen no recovery. 
Has any thought been given to that considering the amount of money that’s involved here? Going through your statement, you talked about the PPPs in the past, and I’d make the point to you that many of these PPPs were targeted, they were infrastructural projects, and they would have been strategic projects that were targeted around the country for various reasons — infrastructural reasons. There was a different mindset and thought process involved in targeting that money, those billions, to those different parts of the country. 
In this case I have a suspicion that the €6.8bn and the money on top of that, that may come in from the private sector investments, is not targeted around the country at all.

Robert Watt: You’re right in terms of the investment fund. It’s €6.8bn. It previously was the NPRF, I suppose a passive investment fund which was global, which invested in property and equities and bonds across the world. The fund is in the NTMA. The Department of Finance has a role, we have a role — we’re not leading: we are part of a group ... we are absolutely involved. The fund is being reoriented towards investment in projects in Ireland that can provide a return, an economic impact, a jobs impact; also that are commercial, that provide a commercial return to fund. And they have to get the balance right between projects that for whatever reason the market won’t fund ... maybe because there’s more uncertainty about the project or because it’s a start-up activity. So it won’t be delivered by the market yet it’s commercial. It’s going to be tricky for them to identify projects.
There is legislation being drafted, a Bill is being prepared. The Minister for Finance, Mr Noonan, will be publishing it I think after Easter, around Easter time, which will set out the mandate: they’ll be obliged to set out an investment strategy, and that investment strategy will have to reflect or listen to the views of Government. 
Based on what I’ve seen there’s no regional angle or perspective to this. So their job is to invest in projects that have an economic impact, a jobs impact, and which are commercial. But as far as I’m aware at this stage there’s no regional impact.

John Deasy: And I suppose what I’m asking is, should there be?

Robert Watt: Should there be? Well, this is something to debate. You know, we look at exchequer funding or PPPs [and] we have regard to spread. Naturally, the political world and the way monies are allocated, reflects the spread.

John Deasy: That’s been the case in the past.

Robert Watt: That’s been the case in the past. So, a commercial fund, an investment fund investing in projects, is there a role for it to take account of a regional remit? That there’s regional balance? It’s something that I haven’t thought about. It’s something that could be debated. You know, clearly that there is, based on the evidence that we have, a two-tier economy emerging, that the Greater Dublin area is different — I think all the evidence suggests that it’s out of recession, and growing. You might say, well, that suggests there are greater opportunities elsewhere in parts of the country that haven’t moved as quickly out of recession: for example property values are lower or opportunities might be cheaper. But it’s something that I, Deputy, to be honest, haven’t reflected on. I don’t see any reason why a fund which is being orientated to jobs and economic activity in Ireland, why in theory it can’t have regard to a regional spread or a regional balance.

John Deasy: You know the basic figures with regard to, for example, Foreign Direct Investment: Dublin, Cork, Galway — it’s about 82%. It’s an inordinately huge number when you consider the country as a whole. And the disparity between those three urban areas and the rest of the country is... it’s immense. So here we have something that could amount to €12-13bn, and nobody’s given any thought to any regional aspect at all. And I think it’s a deficit, potentially.

Robert Watt: I may be doing them a disservice but from what I’ve seen, in terms of the legislation, I don’t see that, but that’s not to say...

John Deasy: This has started already. [The Dept of] Finance has given the presentations. He [the Minister] has said we’re open for business, bring it on. As you know, and you’ve been around the financial worlds long enough, equity funds don’t really take into consideration public policy that much. And what we’ve done is, we’ve actually given them the job to find these commercial investments. And I don’t believe that anyone has actually taken into account the fact that we may be looking at not only a two-tier economy, but a two-tier recovery. And that’s what I want to avoid. And that’s what I think this legislation should try to avoid. Now, someone might say to you, if you do that, and if you go down that line, well it makes some sense. But with regard to commercial investments, would you be actually negating, or would you be blocking some decent investments, if you made the case that a lot of that money, or some of that money, be earmarked for the areas that were suffering the worst from the recession. At the very least I think we need to start talking about that.

Robert Watt: My understanding of the legislation is that the Minister for Finance, the Government, would input into the overall strategy, the focus, but obviously the individual decisions are commercial decisions then for the body then, the ISIF set up within the NTMA. So there is a role for public policy and there is a role for Government... as you mentioned it, Deputy, no, I don’t see any reason why you can’t have regard to the regional impact of the investment, have regard to exactly the types of projects and the impact they might have. And that would have to be reflected back in some sort of mandate then to the people who are responsible for making the decisions.

PAC | March 13, 2014
Department of Justice
Secretary General, Mr Brian Purcell, called and examined.

[Extract]
Deputy John Deasy: With the indulgence of the Chairman, I will ask a further question on training, education and development programmes for former prisoners and the reintegration of former prisoners in the community. One such programme, U-Casadh, is located in Waterford. How much money is the Probation Service allocating to these organisations? Does the Department intend to increase funding for these groups? Do these programmes work and would it be worthwhile investing more money in them?

Brian Purcell: What is the name of the project in Waterford?

John Deasy: It is called U-Casadh and one of many such programmes aimed at reintegrating former prisoners into the community.

Brian Purcell: There are obviously significant benefits from having schemes that facilitate the reintegration of prisoners into the community. One can only do so much work in terms of rehabilitation within a prison setting. As I know only too well from my time as head of the Prison Service, when offenders are going back into the community, the early stages after their return are the key period. Whatever progress can be made while they are in custody, it is important that supports are available on the outside. The Probation Service has a budget for these projects and in 2012 expenditure on community based organisations was approximately €10.3 million. The Department intends, in so far as our budgets allow us, to continue to support community based projects for offenders returning to the community.

John Deasy: The focus of the committee is on saving money and obtaining value for money. Does investment in rehabilitation programmes for offenders save money in the long run? The Department obviously has conducted cost-benefit analyses in this area and of some individual projects. What is Mr. Purcell's opinion of the investment it is making in rehabilitation projects? Do they pay dividends and would it be worthwhile investing more money in them? Has the Department carried out an analysis?

Brian Purcell: I believe the projects are paying dividends. To be honest, some of them are better than others and the Probation Service examines, audits and analyses the various projects to find out which ones it considers are delivering the greatest benefits. This will continue to be done on an ongoing basis.

John Deasy: Does the Probation Service make a case to the Secretary General for additional budgets if it finds they are needed?

Brian Purcell: While the Probation Service would look for extra budgets, obviously the Department's budgets are limited by the amounts allocated to us by the Department of Public Expenditure and Reform. We fund 45 community based organisations that are funded by the Probation Service throughout the country, which represents 28% of the entire Probation Service budget allocation. These organisations provide a range of services, depending on the areas in which they operate. I certainly believe one can obtain a significant benefit from investment in community run and community based programmes for prisoners. One of the measures we have introduced that has been quite successful has been the community return scheme where we have taken suitable prisoners and put them into the community. In other words, the prisoners concerned are able to serve the tail end of their sentences in doing community service. This project has proved to be very successful since it was introduced in late 2011. I see the way forward as continuing to invest as much as possible in those services in which the Probation Service is involved because this investment is showing benefits. For the first time in a long time we have seen a reduction in the number of people coming into custody. The investment we have made in this type of project in the community and through the Probation Service has been instrumental in that regard. I am not saying by any means that it is the only reason, but it is-----

John Deasy: Mr. Purcell has made a significant statement. He has said he believes these schemes are effective and that it is worth investing money in them. I do not know if the Comptroller and Auditor General has ever examined this issue or if his office has a role in analysing the expenditure the Department and the Probation Service allocates to these organisations in terms of its effect and the end result for the Exchequer in reducing the level of reoffending and the recidivism rate among those who enter these programmes compared to that among those who do not do so. Would it be worthwhile examining this issue? Would such an examination be helpful to the Probation Service or the Department?

Seamus McCarthy: We looked at the Probation Service in considerable detail, but, again, it was probably about ten years ago. I think one of the aspects we looked at was how they assessed which programmes worked and perhaps which were less successful. While it is something we could certainly return to at some point, it is not an easy process. One could end up case-making if one wanted to support this approach or one could end up making a case to abolish these organisations if one wanted to do this. There are so many variables in the equation that it is a significant challenge for the Department. However, it is something that needs to be done.

John Deasy: Mr. Purcell has stated these programmes have had a considerable effect on the recidivism rate. Given that a study of the programmes in which we are investing €10.3 million has not been conducted in the past ten years, surely we need to analyse them to ascertain how effective they are? All of these organisations keep track of the people who avail of their programmes and each of them will, therefore, have statistics. We have all read reports on the success the Scandinavian countries have achieved in this area. I do not know if there is anything more scientific that could be done to bolster our belief and faith in investing in this area.

Seamus McCarthy: The point about my office having looked at it about ten years ago is beside the point. The Department would be obliged, in terms of its spending on an ongoing basis, to do that type of evaluative work on a routine basis, not waiting for my office to come and do it.

Brian Purcell: We do that. We have a very close engagement with the Central Statistics Office. We have two members of staff from that office in the Department, one of whom has done a great deal of work with the Probation Service and would focus on the type of thing that works and the type of thing that does not. What I am saying is based on what we have seen ourselves. I would make the point, the Comptroller and Auditor General touched on it, that this is a very broad area and it is not always easy to pinpoint exactly what works and what does not work. In relation to the problem and the individuals one is dealing with, it is not necessarily one particular intervention that delivers the result. It depends on a myriad of different issues, most of which do not fall within the remit of the Department of Justice and Equality, or the Probation Service or the Prison Service. It also depends on a wide range of societal issues but also on a wide range of services provided by a wide range of other agencies.

John Deasy: Sure.

Brian Purcell: We try to evaluate what works best and what does not. That is something we will continue to do although, at the same time, I have to point out that we only have a limited amount of money that we can spend on these projects and we spend whatever we can.

John Deasy: That is what I am getting at. Notwithstanding the intangibles the Comptroller and Auditor General has mentioned - I accept all that and what he has said - I do not know if it is within his remit to take another look at this issue and, perhaps, assist the Department, notwithstanding the work those two individuals do within the Department, to see if this money is being well spent or if more money would result in a lower recidivism rate.

PAC Meeting | March 13, 2014
Justice and Equality / State Pathology Building Project
Mr Brian Purcell, Secretary General Department of Justice, called and examined.

[Extract]
Deputy John Deasy: We have been here for a long time so I will be as brief as possible. I apologise if this has come up previously, but I have a question about the company car and penalty points issue. The Comptroller and Auditor General examined this issue and his investigation found that the State was losing approximately €1.12 million every year because drivers using company cars were evading their penalties. The report showed that one company alone had more than 200 unresolved cases. Many companies responded to the effect that they did not know who was driving the car at the time of the offence. Almost one quarter of road traffic offences involving a company car during 2011 and 2012 were quashed and almost half were not pursued. I raised this issue with the Garda Commissioner when he came before this committee recently and asked him why, after ten years, it has still not been resolved. The problem was first noted in 2002 or 2003 and it has still not been resolved.

I understand that the Department of Transport, Tourism and Sport is obviously key in this matter. I heard a report on radio yesterday which was based on what the Garda inspectorate had reported. What kind of input does the Department of Justice an Equality have in this situation, where a problem has gone on for so long? When I asked the question of the Garda Commissioner I found his answer to be unsatisfactory. I asked him if the legislation that was passed in 2003 was ineffective and if new legislation was needed. I now understand that further legislation was passed but was not acted upon. The relevant elements within the legislation have not been dealt with by the responsible Departments. What role does the Department of Justice and Equality have in this? Whose has the lead responsibility for this within Government? In my opinion, there has been a real dearth of leadership on what is a very simple issue. A problem has been identified, legislated for but not resolved. We are talking about sizeable amounts of money and I want to know why somebody has not taken this by the scruff of the neck and dealt with it, once and for all. What role does the Department of Justice and Equality have here? What does the Department intend to do about it?

Brian Purcell: It certainly is a very valid criticism of the system that is in place at the moment. To answer the final question first, one of the recommendations in the report of the Garda inspectorate is that the Minister would immediately task the Department with chairing a group of the relevant stakeholders in all of this ---

John Deasy: I am going to stop Mr. Purcell there. Why did it take the Garda inspectorate issuing a recommendation for that to happen? This has been obvious for ten years. It has been legislated for twice. Why does the Department need the Garda inspectorate to tell it something that is already evident? It is evident to anyone who has looked at it.

Brian Purcell: Deputy Deasy is right; it has been going on for a considerable period of time. Legislation is in place, namely, the 2010 Road Traffic Act, a section of which would address this problem but that section is in Part 3 of the Act which is awaiting commencement. One of the issues that has held up the commencement of the Act is what is called the "third payment option". It is our intention, in the context of the new group that has been set up and which is having its first meeting this afternoon, to recommend that the legislation is amended in such a way as to allow for the commencement of the provision that relates to the company car issue, separately from the rest of Part 3, so that it can proceed without being held up, pending the introduction of the third payment option.

John Deasy: The legislation is deficient as is and needs to be amended. Is that correct?

Brian Purcell: To be fair, the legislation itself is not deficient. In order for the relevant section that applies to the company car issue to proceed, the Act would have to be amended to enable that element to proceed, separate from the other elements in that particular part of the legislation. I think that is how we will proceed but I do not want to pre-empt the group's discussions. The group will be jointly chaired by my Department and the Department of Transport, Tourism and Sport and I think that the best and quickest way of enabling us to deal with this problem would be to go down that route. Maybe when the group meets I will be told that there are other options but I believe that this is the way we will move it on. I can assure Deputy Deasy that the Minister, my Department and the Department of Transport, Tourism and Sport are committed to resolving the outstanding issues as quickly as possible.

John Deasy: That is fair enough, but a punter might ask Mr. Purcell why it is taking so long to deal with this. The Comptroller and Auditor General has conducted his investigation and found that very significant amounts of money are being lost to the Exchequer. Why does it take so long for two Departments and An Garda Síochána to get around a table? Why does it take a Garda inspectorate report to precipitate that? That question must be asked. The Public Accounts Committee has to ask that question. We are now potentially talking about a third tranche of legislation, assuming we amend the 2010 Act, to get this right. The question must be asked as to how efficient problem solving within our Departments really is, in the face of the company car issue. Mr. Purcell has answered my question - he has a road map and the group is meeting. However, even a cursory look at the history of the company car issue would lead one to assert that the Government has failed dismally to deal with it in a reasonable time period. I do not know if the Comptroller and Auditor General has anything to say on the issue, given that he is the person who came up with these recommendations.

Seamus McCarthy (Comptroller and Auditor General): It is disappointing that something which was first raised in 2003 and presented in a relatively straightforward way as an obvious problem has not been resolved ten years on. While there have been attempts to solve the problem and there seems to be a way to do so, the lack of a resolution thus far is disappointing.

Brian Purcell: I would not disagree with Deputy Deasy or the Comptroller and Auditor General on that. It should have been moved on before now. It was dependent on dealing with the third payment option which is something that is complicated and will be quite costly to implement, particularly in terms of the investment in IT that will be required. The solution to move this along as quickly as possible is the one I have indicated and I will certainly be pressing ---

John Deasy: Is the Department of Justice and Equality taking the lead on this or the Department of Transport, Tourism and Sport?

Brian Purcell: The group is jointly chaired by ourselves and the Department of Transport, Tourism and Sport. An amendment to the Road Traffic Act is required. I must point out, by the way, that I am not blaming the Department of Transport, Tourism and Sport but---Exactly. The Commission said that he was not blaming the Department of Transport, Tourism and Sport.

Brian Purcell: We must ensure that both Departments push this measure through. The group has not been set up to deal with this issue solely, but with a range of issues that have been covered in previous reports in addition to the latest report of the Comptroller and Auditor General and by the inspectors' report. The issues range across the core services in the Garda Síochána and other related agencies. We have been given clear instructions by the Government and the Minister that problems areas must be progressed as expeditiously as they can. That is the direction in which we are going.

John Deasy: Fair enough. On foot of Mr. Purcell's response to the question, I must address the issue of penalty points in the broad sense. I have reflected on what has happened in the past couple of years and the processes that have evolved as the penalty points became an issue in the media, the Oireachtas, the Garda Síochána, the Department and among the public. Let me list the reports: we now have a Garda inspectorate's report; we are looking forward to a Garda Síochána Ombudsman Commission report; Assistant Commissioner O'Mahoney's report; countless reports by the Comptroller and Auditor General; and other reviews. Why has nobody in the Department taken a leadership role and with PULSE technology dealt with infractions that were easy to identify? The Garda inspectorate has obviously done this. Why has it taken so long for Government to deal with this issue? Why was it a case of pushing the problem from desk to desk and passing the buck? We have ten reports. The question I pose may not be for the Secretary General directly or the Department of Justice and Equality, but they are involved, but what is the reason for the myriad of reports on an issue that should be reasonably simple to address? Should there not have been an easier way to deal with this issue? Why are elements of government in turmoil over something that should have been nipped in the bud if problems, such as those identified by the Comptroller and Auditor General years ago, were addressed? Why are we now waiting for another report from the Garda Síochána Ombudsman Commission? Does the Secretary General have a response?

Brian Purcell: It depends on which aspect of the problem is under focus. The fixed charge processing system has worked by and large in a particular way. In broad terms in a three-year period one will have 1.5 million fixed charge process tickets issued. In the context of the complaints made about PULSE, which Assistant Commissioner John O'Mahoney investigated, he examined the 1.46 million fixed charged notices issued, of which 66,000 were cancelled. Of the 66,000 cancelled fixed charged notices, some 37,000 were discretionary cancellations. Over a period of three and a half years that worked out at 10,000 a year, which was two per Garda district per week. On average, there are five Garda stations in a district, so that in every Garda station one ticket was cancelled every two and a half weeks. The vast majority of fixed charge notice fines are paid. The Comptroller and Auditor General has identified issues with summonses but in terms of the overall numbers, the system works reasonably well. The Garda inspectorate's report highlights particular issues. Given the commentary on the issue, may I point out the Minister for Justice and Equality referred the two Garda reports to the independent Garda inspectorate who provided an independent report, which has been accepted.

The issues that the Comptroller and Auditor General has rightly pointed out as needing to be addressed, such as the issue of summons, has been a problem for some time. There are difficulties with summons, such as the operational difficulty of serving summons. The changing nature of how we live, with the significant increase in the numbers living in apartments, complicates the serving of summonses. We need to take a very close look at this, but it will not necessarily be that easy to deal with. This is a problem that has bedevilled the system down through the years. We will have to come up with some sort of solution that works better than the current system. The working group will have to make progress on this.

John Deasy: I know the Minister referred the issue to the Garda inspectorate, the Garda Síochána Ombudsman Commission and so on, but having looked at it, I see a common thread. We are not dealing with issues as quickly as we should be, issues are put on the long finger and in some cases this may be up to ten years. I would add the penalty point saga to that. I do not think it is necessary for the Minister and the Department of Justice and Equality to refer it to somebody else, I think the Department should deal with it. In some cases, officials may think that is impossible and the matter should be referred to an independent arbitrator, but the leadership in the Department should deal with issues that the Comptroller and Auditor General has flagged.

I put questions to the Commissioner and frankly I could not believe some of the responses because they were so scant. That is the reason I raised the company car issue. As I have said, I have come to the conclusion after drilling into the figures that issues, which are simple to explain, are put on the long finger, when there is no need to do that.

The Secretary General has answered the question. In respect of penalty points, company cars and statute barred summonses, there is a distinct lack of action, whether that is the responsibility of the Department of Justice and Equality or of collective Departments. I think the group should focus on how to respond quickly to issues as they arise and deal with them collectively.

Brian Purcell: Deputy Deasy has made a valid point. The problem was first identified in the Comptroller and Auditor General's 2003 report. While things have moved on, in particular in respect of fixed charge processing system, some of the core difficulties still exist, in spite of efforts over a long period. There may have been some improvements but we still have not managed to deal with them effectively. It is correct to say that some of the recommendations from the action plan have already been acted upon but the key issues will be dealt with.

I give an assurance to the Chairman and members of the committee that we will ensure this is driven forward from now on, regardless of what may have occurred and whatever failings there may have been in dealing with some of these issues in the past. I have been given very clear instructions by the Minister that we have to ensure this group deals with these problems quickly. If there are resource issues involved, we have to deal with that element. As I stated, however, I assure the Chairman, members of the committee and the Comptroller and Auditor General that they can expect to see progress being made quickly in this area. I take the Deputy's point which is a valid one.

John Deasy: Mr. Purcell will see that there is a significant danger that members of the public will decide that the Department and the criminal justice system are inherently inefficient if these issues are not addressed within a reasonable timeframe. They look at the entire penalty points saga and ask what is going on and why people cannot simply step in and deal with it. While Mr. Purcell is correct that the system as a whole works well, it was known for years that the use of discretion was a major factor in the penalty points system, yet the issue was not dealt with appropriately and was left hanging. We now have four or five reports which clearly point out that the problem with the system has been known about for a long time. Members of the public believe the matter should have been addressed a long time ago.

PAC Meeting | March 6,2014
International Co-operation: Foreign Affairs and Trade; Official Development Assistance

Mr. David Cooney (Secretary General, Department of Foreign Affairs and Trade) called and examined. Also in attendance: Mr. Joe Nugent, head of passport services;Mr. John Conlan, chief financial officer; Mr. Fergal Mythen, head of corporate services; Mr. Brendan Rogers, Deputy Secretary General and head of Irish Aid; Mr. William Carlos, head of evaluation and audit unit; Mr. Dermot Quigley, Department of Public Expenditure and Reform.

[Extract]
Deputy John Deasy: I heard the Tánaiste speak in the Dáil a couple of days ago about the new missions. He said the centre of economic gravity is shifting to the east. He spoke about the further development of our presence in the United States of America and a reconfiguration of our approach in Africa. He spoke about new missions in, for example, Indonesia. Can we go through the continents? It relates to the Vote. Mr. Cooney mentioned that we will have five new embassies and three new consulates. Where are we going to have them? That would be interesting to know. Where are we shutting down? That would also be interesting to know. What is the rationale for the shift?

Mr. David Cooney: The Government decided to open eight new missions which comprised five embassies and three consulates general. We have 73 missions with a further two in Armagh and Belfast. In addition to the eight openings, the Government decided to close the embassy in Lesotho. The rationale behind that closure is that while we have had a programme there of very long standing, there are absorption capacities in Lesotho. It has become a middle income country and is the most wealthy country per capita among those in which we have aid missions. The assessment after consideration was that the remaining programme in Lesotho could be handled effectively from South Africa. Pretoria is very close. We will maintain a small office but it will not be staffed by headquarters staff. It will be staffed by a local employee. The rationale is sound although it is never a happy occasion to close an embassy or to pull out of a country with which we have had a long relationship. In terms of rationalisation, we felt the resources could be used better elsewhere.

In terms of the embassies we are opening, the emphasis is on Asia where three of the missions will be located. We will have embassies in Indonesia and Thailand and a consulate general in Hong Kong. The lack of embassies in Indonesia and Thailand has represented a significant gap in our service. Certainly, pressure has been applied through the Global Irish Network and the three meetings of the forum have all pointed to this absence. I am delighted to be able to plug that gap. Indonesia is a huge country with enormous potential. Thailand is a very significant economy. Having missions on the ground in those states will allow us to exploit to a much greater extent the economic potential there. The decisions to open the missions have been welcomed greatly by the Irish communities in those countries but also by the agencies. The absence to date of a consulate general in Hong Kong has been a significant gap in our network of missions. There is huge potential there.

We feel we will be able to exploit that considerably working with the agencies, which are in Hong Kong. We think that having an embassy will assist in dealing with Chinese authorities. They are very focused on the state. It is very difficult for companies to do business in China even in a place like Hong Kong without the backing and presence of the state.

Moving on to the US, we have been very pleased with the activities of the consulate general we opened in Atlanta a few years ago. It has made a real difference on a very small budget. One career consul is in that consulate.

John Deasy: What does Mr. Cooney mean when he says it has made a difference?

David Cooney: It has made a difference on the ground in respect of the reach we are able to achieve regarding interaction with business. Atlanta is a very significant hub for business. Certainly, the feedback we have got from the agencies and business presence on the ground is that this has made a big difference to the profile of Ireland. Texas is the same. It is a very significant economy that is bigger than many national economies around the world. Putting someone into Austin, which is the political capital of Texas, will help us significantly. We decided on Austin rather than Houston. Other countries have gone to Houston but they tend to be countries that have a significant interest in the oil business which, unfortunately, is not a business in which we have a high profile. Our analysis was that we would be better focused on Austin. Again, for a very small outlay, we expect to get a decent return from that.

We have an embassy in Brasilia. Brazil is a huge country but São Paulo is the economic capital. The agencies do not have a particularly big presence there. Enterprise Ireland has a part-time presence. I think it is a Portuguese national who is operating on the ground in São Paulo. We think this will make a significant difference in establishing an Irish profile in São Paulo, which is non-existent at the moment. Brazil is a huge country with a huge and growing economy. One cannot operate consulates without first having a embassy, which we have. However, the embassy is in the centre of the country and is some distance from São Paulo so we think having a small mission on the ground will make a significant difference for us.

Kenya is the economic powerhouse of east Africa. We do not have an embassy in Kenya. We are re-opening one that closed many years ago. I think it was back in the 1980s.

Brendan Rogers: It was 1988.

David Cooney: It is the economic powerhouse of Africa and an economy that is growing significantly. Clearly, it will be different in profile compared to our embassies in Tanzania or Uganda, which are mainly development-focused. We see the Kenya mission as looking at development and having a significant role in promoting business with the region. As we can see in a country like Kenya, promoting business is a significant aspect of development. People who suggest that development and business are totally separate are making a big mistake. We have seen from this country that we only really achieved significant social and economic development when our economy grew. One can pour all the money in the world into-----

John Deasy: I agree with Mr. Cooney. However, the fact that we have opened an embassy in Africa for that reason is a pretty significant shift when one considers our recent history and the reasons that we set up missions in our programme countries. It is a significant shift to do it for those reasons.

David Cooney: I agree with Deputy Deasy. It reflects the Africa strategy and the work we have been doing. If one looks at the different stages, with an absolute disaster, humanitarian aid is going in to keep people alive. One then moves on to development where one is trying to get basic development going but then one moves on to trying to stimulate and assist with economic development. We also have a mission in Nigeria which is mainly focused on economic matters.

Croatia is completing our network of missions in EU countries which I said here before is absolutely crucial to Ireland. Every EU member state has a vote in the EU institutions - a vote that has a direct impact on the lives of Irish people. We need to be in contact with the institutions, parliaments and government departments in those countries to intervene. We had a value-for-money review of our missions in EU countries over the course of the last year. The report is available. It involved our own evaluation. An audit unit was chaired by an independent chairman and included representatives of various Government Departments, including the Departments of Public Expenditure and Reform, the Taoiseach and Finance. That report, which is a quite thorough and a very good piece of work, came to the conclusion that our missions in EU countries were value for money and that we should have a mission in every EU state.

John Deasy: Mr. Cooney mentioned eight missions. Are we including the Holy See in this?

David Cooney: No, I will come to the Holy See last. That is a separate case. Croatia will have a small one-diplomat mission. We are at the cutting edge of trying to develop new forms of diplomatic representation at a low cost. Our one-person missions have attracted quite a lot of interest from other EU member states who are interested in seeing how we can operate them. The report on the EU missions pointed out that another one-person mission is not all good news. There are stresses and pressures on a one-person mission and expectations that are difficult to achieve. We are looking at the one-person missions network to ensure we can maintain it at an effective level and provide the necessary support. It is a good idea that is working but, understandably, these missions need a bit more support from home than if they were larger missions.

I know why the embassy to the Holy See was closed. It was genuinely closed for cost reasons but it is interesting that nobody in the world believes me so I am very happy to go on the record to explain why it was closed and re-opened. It is very interesting. People are very reluctant to believe something if it does not conform with their beliefs or prejudices or the need for a good story. It was closed for cost-cutting reasons in 2011. We carried out an analysis of how we could find savings. Every Government Department was required to find savings at the time. The Department of Foreign Affairs and Trade only has two ways of making savings. We either cut the aid budget or we close embassies. I believe very firmly that had we offered significant cuts in the aid budget at that time, it would have been an ongoing process of significant cuts. The Tánaiste was very keen to protect the aid programme. I think he had considerable support for that so, therefore, we had to look at closing embassies. There were those who suggested that we should close embassies in EU countries. Again, I believe that had we closed embassies in EU countries, I do not know how many we would have lost by now. We needed to protect that network which left very few alternatives. The embassy to the Holy See was closed because it was genuinely believed, and I believe this is right, that the relationship could be most effectively handled on a non-residential and care and maintenance basis. I hoped that it could be re-opened in due course when the situation improved and that has been the case.

We have reopened it. I think there is a considerable attachment to the relationship with the Holy See among a considerable portion of the population; that was made clear. Also the direction and the leadership of Pope Francis in relation to issues of hunger and poverty very much chime with our own policy. The Tánaiste recommended to the Government that we reopen the Embassy to the Holy See. Again it will be on a very modest basis. It will be a one-diplomat mission.

We have saved, in the meantime, a considerable amount of money. The Villa Spada, which was one of our biggest embassies and which was the location for the residence and the chancery to the Holy See, is now the residence and the chancery for the Embassy to the Italian Republic, to Italy. It contains a much larger number of staff members. It is used far more intensively. It is now used very thoroughly. Ironically, of course, the Villa Spada is where Garibaldi made his last stand against the French at the time of the Roman Republic. It is an iconic building from the point of view of the Italian Republic and perhaps more appropriately hosts that embassy.

John Deasy: When will it reopen?

David Cooney: It will reopen over the summer. Hopefully in the next month or so the Government will decide on the appointment of ambassadors. The new embassy will be located modestly. We saved €435,000 in rent that we were spending on the accommodation of the embassy to Italy. We will be accommodating the Embassy to the Holy See for considerably less when it is reopened.

John Deasy: On the subject of presence, I wish to ask about Crimea. Somebody helpfully pointed out to me that the Department has an advisory note on its website about Ukraine. De we know how many Irish nationals are in Ukraine or how many are in Crimea? What kind of system do we have if there is a serious problem in that area?

David Cooney: At the moment we have as far as possible established there are no Irish citizens in Ukraine, other than, obviously, reporters from the media who go there. However, we have not been able to identify any Irish citizen resident in Ukraine. It does not mean to say they might not be there, but we are not aware of anybody. Nobody has been notified to us. Nobody has notified themselves to us. We have an ambassador to Ukraine. It is a non-resident ambassador, based in Prague. They have been going to Kiev on a regular basis over the last few weeks.

We have an online system where we ask citizens to register to us in all countries so that we have as good an idea as possible of how many citizens we have in each country. At the moment we have no special arrangement in place. We co-operate very closely with our EU partners and there is no move under way to arrange for the evacuation of citizens at the moment.

John Deasy: Is Mr. Cooney saying he is not aware of any Irish nationals in Ukraine apart from journalists?

David Cooney: Not Ukraine. I did not say Ukraine. If I did, I apologise - Crimea. If I said Ukraine, I apologise; it is Crimea I was referring to.

John Deasy: I am glad I clarified that. I refer to the Synthesis report. As I understand the process after what happened in Uganda, the heads of mission reviewed their own programmes; there was a meeting and they dealt with common themes. After what the Comptroller and Auditor General reported on in 2012 with regard to a risk dashboard, this is the report and recommendations we arrived at. Some of these recommendations are pretty obvious and one would question whether we should not have been doing these anyway. Point 5.4 states: "The overall finding is that there are weaknesses in this area with insufficient elaboration of the flow of funds and structures around the management of complex modalities". Did we find anything else when these missions undertook their own internal reviews, when there were comparisons? While we were investigating for this report, published in February, did we find anything else about which we should be worried within our systems and procedures in any programme country?

David Cooney: I will respond and with agreement I might ask my colleagues Mr. Rogers and Mr. Carlos to speak. When we came here in December 2012, we had all been very shaken by what had happened in Uganda. We put our hand up at the time and said we had already identified areas where things could have been done better by ourselves. We followed up very robustly. When we came here the last time, the interim report of the evaluation audit unit had already been published. Following that, the first thing to say is that we got the money back, very significantly due to the efforts of Mr. Brendan Rogers and our ambassador.

John Deasy: I apologise for cutting across Mr. Cooney. Did we not get more than the money back? Am I right in saying that because of the currency exchange rate, we actually achieved more than the €4 million as it turned out?

David Cooney: Yes, they gave us back the same Ugandan shillings but it turned out that exchange rates in the meantime meant that the Ugandan shillings were worth a little bit more in terms of euro than we had actually given it.

John Deasy: How much did we make?

David Cooney: It may have paid for some of the airfares down there to try to sort out the mess. So I do not feel too bad about it.

John Deasy: So we made €100,000 on the deal; we got our money back and we made €100,000 on top of it.

David Cooney: We got our money back, but, as I said, there have certainly been costs involved in following up on the mess that was created by the Ugandans in the first place. However, we got more back than we gave them; that is true.

We got the money back. We asked the embassies to review their risks situation and their procedures. We had a meeting with the heads of mission in Lusaka. Mr. Rogers, Mr. Carlos and I went through it and emphasised the need for vigilance. We effectively pointed out that we needed to make sure that we upped our game in terms of vigilance. The evaluation on audit unit carried out its inspections of the various missions. We had the nine missions and that has arrived at the Synthesis report, which is before us.

I went out, as I said earlier, to Kampala in July where I met the Attorney General and the Minister at the department of foreign affairs. In addition to the Synthesis report, we have also had the final report of the evaluation and audit unit into the fraud in Uganda. The two reports that have just appeared and which members of the committee have, the Synthesis report and the final report of the evaluation and audit unit into the fraud in Uganda, represent an impressive piece of work. Our evaluation and audit unit is independent of the development co-operation division and independent of Irish Aid. It is important that it can call it as it finds it and that it points out failings. As I said when I was here the last time, if there are failings, I am much happier that they are pointed out and I do not mind them being pointed out because if we do not face up to them, confront them and deal with them, we surely will fail again.

John Deasy: I wish to go through the process here. The report has just been published and obviously Comptroller and Auditor General would not have had a chance to go through the report and the effect of the recommendations. He has not had a chance to review and analyse it. However, the process is that he would review these recommendations from the report which he instigated.

Mr. Seamus McCarthy (Comptroller and Auditor General): We will assess the implications of the recommendations and take them into account in forming our opinion on the financial statements for 2013.

John Deasy: I refer to recommendation No 3 which states that a diagrammatic flow of funds for all grants to partners should be prepared at country level that will clearly illustrate the flow of funds from initial disbursement to final beneficiary. This would seem to be obvious and one would ask why this procedure was not in place previous to this. Is that a fair question?

David Cooney: I think there are matters which have been highlighted about which one would wonder why they were not done. I refer to the Comptroller and Auditor General's report. He picked us up on the fact that in his view we should have been informed earlier of the reports of the deterioration of the situation in Uganda. I cannot argue with that. I fully accept the Comptroller and Auditor General's proposal that we should have a risk dashboard put in place and we are working on that. I agree that perhaps we should have had systems in place before. That is the value of these reports. I refer to paragraph 6 of the Synthesis report which sets out a number of proposals, some of which one might legitimately say we should have had in place. I do not mind accepting that there were weaknesses and if there were, I am glad they have been pointed out and we will put them right. Mr. Brendan Rogers is responsible for this area and he may have a different perspective to me.

Brendan Rogers: I do not think so. I agree that those questions are fair. The Synthesis report is a summary of nine reports, reflecting the significant work carried out since we last met in December 2013. Uganda has been visited approximately 12 times. I have been to Uganda three times. It has been very intensive work. The reports cover the nine programme countries and they conclude that the systems are fairly strong and pretty adequate in a lot of cases but like every forensic audit, there are all kinds of gaps and areas that need to be strengthened.

The Department has accepted all those recommendations. Standardisation of the management systems is where the greatest gap occurs. The management systems were reasonably strong but they had grown separately under different heads of missions and different personnel. We have to implement a standardised system. These recommendations are telling us to standardise the management systems, the floor funds, the MOUs and the work with NGOs. As a result we have established a task group which is chaired by the head of our programme-country section. Over the next few months we will be working very hard to ensure that when we next meet the committee, there will be a very high-level strong and standardised system in place. Some of this will involve cross-learning because some of the missions have done excellent work and we need to cross-fertilise that learning into the other systems.

Deputy John Deasy: I refer to the Uganda programme for 2013. Apart from €300,000 which is being examined by the Comptroller and Auditor General, there is a misconception that Ireland has suspended aid to Uganda but this is not the case. Apart from that €300,000 we have merely stopped putting money through the governmental systems. Is this the case?

Brendan Rogers: Yes.

John Deasy: Mr. Rogers has listed where the money has gone in Uganda in the past year, a total of €21.7 million. How are these programmes determined? It is clear that the Department diverted money quickly.

Brendan Rogers: With reference to one of the issues pointed out by the Comptroller and Auditor General, I admit we should have been aware of that information intelligence sooner. We are on the ground talking to our donors and there are various rumours and views. We should be transmitting them more quickly to headquarters. That is what the dashboard system will do. However, we were picking up issues and we made a decision a few years ago that we should begin to move away somewhat from government systems. We were on that course and it was not a case of having to change the ship. We are now managing our major school-building programme in Karamoja for ourselves, using management agents. The schools are still needed by the system and they were to be built in the national system but we intend to build them ourselves and we will put an Irish flag on them. This was a major change of policy.

John Deasy: This is the point of my questions. I have been involved in this area for a good few years and it has been beaten into me that the best way of spending our money is by means of the governmental systems. There is a reason we are not doing this in Uganda. Has the Synthesis report changed the Department's view with regard to that approach anywhere else? It has always been the policy mantra that this is the most effective, sustainable way of achieving a bang for our buck. There are inherent dangers in using this system but has there been a change?

Brendan Rogers: If development is to be sustainable in the long term a country must have a national plan, a democratically elected government and a sustainable form of government. The best way that we can exit from provision of aid is when these factors are in place. There has been a major hit in Uganda because of corruption and fraud. As a result we have had to carry out a forensic and detailed analysis on our other countries. The Deputy has visited Mozambique and Ethiopia. We are still working through government systems in those countries to a greater or lesser extent because there are different levels of governance. I do not think our core belief in the need for creating good democratic institutions of state has been fundamentally shifted. However, on a practical level, if we cannot trust the systems we cannot take part. We have taken a clear decision with regard to Uganda and I do not foresee us returning soon.

John Deasy: Has the Department made decisions about any other missions or programmes?

Brendan Rogers: We have not taken any major decision as a result of fraudulent activities but we constantly analyse our own thought processes. For example, budget support was very important a few years ago when taxation revenues and remittances in Africa were very low. However, government systems are much improved now compared to when I started in this business 20 years ago. Taxation revenues are coming in and governments have capacity. As a result we have to slightly change the way we do business and look at how to do business differently. The new policy, One World, One Future, was published last year and it examines those areas.

John Deasy: I understand this may be the last time Mr. Cooney and Mr. Rogers will be attending the Committee of Public Accounts. I wish them both the best in the future.

PAC Meeting | February 6, 2013 (Prelude)
[Extract]
Re: Correspondence, dated 31 January 2014, from Seán Costello & Co. solicitors regarding their client Sergeant Maurice McCabe.

Clerk to the Committee: My advice is that the publication of the transcript of a meeting is a procedural rather than a legal matter. The appropriate rules which apply, therefore, are the Standing Orders of the Dáil. I have consulted senior colleagues within the office who have informed me that publishing the proceedings of a private meeting would constitute a fundamental change in procedure for Oireachtas committees and that this could have implications for the future not just of the PAC, but also for other committees to which evidence might be given in private session. The advice I received is that in accordance with Standing Order 99, the matter should be reserved to CPP if the PAC decides that it wants to accede to the request of Sergeant McCabe.

Vice Chairman (Kieran O'Donnell): I would like to hear members views on this matter. When issues of this nature arose in the past, we always took advice from Ms Mellissa English, the parliamentary legal adviser. Perhaps we might request that she come before us early next week to outline her views on this matter.

Deputy Shane Ross: I do not agree with the course of action outlined. Sergeant McCabe has made a reasonable request and surely he is entitled to a copy of the transcript. We do not need to procure copious amounts of advice in respect of an issue of this nature. We would not be releasing the transcript to the public, we were requested to release it to Sergeant McCabe. He can then do what he likes with it. I really do not understand why there should be any delay and I am of the view that the transcript should be released to him. Sergeant McCabe made a reasonable request for the transcript of the meeting at which he was the chief witness to be supplied to him. I thought we agreed last week that we would give it to him. However, I do not know what the minutes have to say in that regard. I was of the view that we agreed that if he requested the transcript, we would supply it.

Vice Chairman: What was agreed at last week's meeting was that if the witness wished to seek the transcript he would write to the committee and that the committee would consider his request. The initial feedback we have received is that any such request must be referred to the CPP and that the Editor of Debates will not provide a transcript without a direction from the latter.

Deputy John Deasy: We should make a decision on the matter rather than referring it to the CPP. It was a private meeting and the committee agreed that it would be private. The clerk referred to legal advice received, which stated that publication of the transcript would constitute a fundamental change in the way the Oireachtas and its committees do their business. The reality is that there was not a great deal of substance to what was said at that meeting. In the past five minutes, the Comptroller and Auditor General, Mr. McCarthy, debunked quite an amount of what was said in the context of the number of penalty points that were written off. The theory posited by Sergeant McCabe was that tens of thousands of penalty points were written off. The Comptroller and Auditor General made a definitive case to the effect that only hundreds of penalty points were written off.

Outside of that, the committee did not learn a great deal as a result of what was said at the meeting in question. It might be stated that the latter is a good reason to allow publication but I do not believe that to be the case. I return to the fact that publishing the transcript would give rise to a fundamental change in the way Oireachtas committees operate. If someone were to appear before one of the committees in the future to discuss security or privacy issues, there could be a danger that a transcript of the proceedings could be made public in certain circumstances. That is a step too far for the Oireachtas and its committees. I stated at last week's meeting that the committee had, to an extent, entered "The Twilight Zone". We have crossed over into the realm of the politically paranormal where a private meeting becomes a public meeting. Perhaps we should hold a public meeting and ensure that everyone swears on the Bible that he or she will not repeat what was said. It is just absurd. We must be clear and definitive with regard to how we treat private meetings. We must clarify the position completely. Beyond that, we are entering the arena of the nonsensical.

Deputy Eoghan Murphy: I agree with what Deputy Deasy said. My recollection is that at last week's meeting we agreed that if Sergeant McCabe - for legal reasons - sought a redacted transcript of the proceedings, we would consider his request and make a decision. The first thing to say is that he does not appear to be requesting the transcript for legal reasons.

Vice Chairman: I understand from the clerk that it is not possible to produce redacted transcripts.

Deputy Eoghan Murphy: Then we cannot publish a transcript at all, particularly in view of what transpired at that meeting. The letter received from Sergeant McCabe's lawyers is clearly not a request because the phrase "He has asked that we would write to you" is used. I agree with Deputy Deasy to the effect that we can settle this matter now, we do not need to refer it to CPP and we do not need to publish a transcript.

PAC Meeting | January 30, 2014

Clare McGrath, Chair of Office of Public Works, called and examined.

[Extract]
Deputy John Deasy: While members were in committee last Tuesday night, there was a briefing on Mount Congreve. Can Ms McGrath provide an update in this regard?

Ms Clare McGrath: In respect of Mount Congreve, one of my colleagues who will be present for the discussions on the Vote might be able to provide a more particular update.

John Deasy: Perfect.

Clare McGrath: I can state, regarding the Mount Congreve estate, that the Mount Congreve Foundation has expressed its intent to remain in situ in Waterford and to open to the public the gardens and the estate. As for the involvement of the Office of Public Works, OPW, in this regard, members are aware the Mount Congreve Garden Trust owns the gardens and the house. The State, through the OPW, is one of the trustees. The employees who are working in the gardens are employees of the Mount Congreve Foundation, which has expressed to us its intention to remain in situ and to run the gardens. If the Deputy wishes, I can provide him with an update directly or when we take the Vote, I can give him more information.

John Deasy: Whichever Ms McGrath prefers.

Clare McGrath: The Mount Congreve Foundation has submitted a proposed plan for the gardens, which would see them being open from Thursdays to Sundays from February to October. The foundation has suggested a charge in this regard and is projecting visitor figures of 100,000 based on the average number of visitors who came to open days in 2013. From the OPW's perspective in respect of the State side, the State will obtain freehold with regard to the gardens 21 years after the passing of Ambrose Congreve and in 2059 in respect of the house. In the interim, it is in the interest of the Office of Public Works that the gardens are being managed and cared for by the Mount Congreve Foundation.

John Deasy: This is significant, in that from the standpoint of the OPW, this constitutes progress.

Clare McGrath: Yes.

John Deasy: This issue has been ongoing for years now.

Clare McGrath: Yes.

John Deasy: I thank Ms McGrath. My second question pertains to the proposal for businesses on heritage sites and historic properties. It related to the proposal for businesses on heritage sites and historic properties. It is interesting because the budget for the area of built heritage in the past six years has probably diminished by 90% in some cases. From what Ms McGrath has explained, we are moving towards an element of self-financing when it comes to these historic properties and heritage sites. I apologise if Ms McGrath already answered the question, but what structure will this take? Where are we with regard to these proposals?

Clare McGrath: At the moment we have several proposals in and we are assessing them. We are allowing participants in the market to say to us how they can work with us to enhance visitor experience at heritage sites and to increase numbers. Our primary responsibility under legislation for many of the national monument sites is their preservation and conservation.

John Deasy: Will Ms McGrath draw a picture for me or give me an example of what we are looking at potentially in future? Can Ms McGrath highlight some places and explain what exactly we will end up with?

Clare McGrath: I will use the example of what we have ended up with to show what we are open to. In the Iveagh Gardens at the rear of the National Concert Hall and off Harcourt Street, we have allowed, under licence, the Taste of Dublin, comedy festivals and concerts on the site. This is opening up the gardens to other uses and increasing footfall. We receive a fee for that. It is similar with the Phoenix Park for concerts. We have provided for community use on many sites where people wish to host events. We are asking whether there is something more. We might not necessarily know what is possible for all of them. Certainly, we would not have the funds for it but the private sector may have the funds.

John Deasy: I presume the OPW has been relatively successful if it is extending the approach. Has the experience of the OPW been good as far as the financial aspects and income are concerned?

Clare McGrath: It has been positive because we are getting more use. The income goes to the Exchequer.

John Deasy: Is there an element of ring fencing?

Clare McGrath: From this year it has been identified that where we generate income a certain amount can come back in and we can invest it in the heritage estate.

John Deasy: It does go back to the Exchequer. Anyway, it is a significant departure for heritage in the country that the OPW is thinking in this manner and adopting this approach for the first time since the foundation of the State. There is an element of self-financing when it comes to these properties. It is significant for the Committee on Public Accounts to know that. Ms McGrath says it has been positive so far and that is why the OPW is extending it. Can Ms McGrath say how much has been raised?

Ms Clare McGrath (left): We are getting €350,000 additional this year in the Vote because of this initiative.

John Deasy: How many enterprises or ventures does that cover?

Clare McGrath: It goes across the entire range. Until we process the 12 applications we have now, identify what they involve and what is being sought from us, we are open. When we can identify that and the fee arrangement, I will come back to say what has been achieved in 2014.

John Deasy: How many proposals does the €300,000 cover?

Clare McGrath: We have not yet made out the proposal.

John Deasy: That is fine.

Clare McGrath: This is coming from what we have achieved. It is the existing income we derive from visitors to our heritage estate.

John Deasy: Fair enough. I thank Ms McGrath for her response with regard to Mount Congreve. Does Mr. Sydenham want to add anything to that? If not, that is fine. I think Ms McGrath explained it all.

John Sydenham (Commissioner, OPW, below): It was covered pretty comprehensively. It is welcome news that the foundation is remaining and will keep the facility open. There is an opportunity to bring in commercial interests to augment the outgoings and enhance the visitor experience. Equally, there is an opportunity for the State, at our level or at local level, to enter a partnership with the foundation to improve the visitor experience. We will explore that with the foundation.

John Deasy: Ms McGrath mentioned €250 million over five years for flood damage. Of that €250 million, what does Ms McGrath estimate the damage so far this year to be worth? I want to know whether this sum is sufficient for the future.

Clare McGrath: In terms of the catchment flood risk area management plans, what we are achieving and the areas we are identifying where we need to do the work, we will need more. We have to work towards that. To take a concrete example, Dublin is now protected by works that were completed by the OPW and Dublin City Council. The tide level in January 2014 was greater than that in 2002 but in 2014 there was very little damage. In 2002, for a lower tide there was €60 million worth of damage in Dublin. We will report under the Ireland Stat and the Government statistics that approximately €800 million worth of property was protected by the schemes. I think I spoke about 1996-1997. In schemes we have carried out since then we have achieved €800 million worth of property protected. Any scheme we carry out has a cost-benefit. The Dublin one is a very good example of what has been achieved. Due to the works done since 2002, although there was a higher flood tide level in January 2014, there was damage but it was small.

John Deasy: In other words, the OPW has averaged out the €800 million over the past 18 years and thinks on that basis that the €250 million will be sufficient for the next five years.

Clare McGrath: The Government has guaranteed the €250 million at €45 million a year to 2016.

John Deasy: I have made a rough calculation. Over the past 18 years the OPW has probably averaged €42 million per year.

Clare McGrath: We would not have been spending €45 million. That has been ramped up. It was a lesser sum earlier.

John Deasy: Coming back to this year, how much is the damage worth?

Clare McGrath: Following the recent storm there is €65 million worth of damage. That includes roads, coastal and tourism damage. Our element is those parts that protect flood defences. That is where we will help local authorities.

John Deasy: I thank Ms McGrath.

PAC Hearing | 23 Jan 2014

Management of Fixed Charge Notice System
Garda Commissioner Martin Callinan called and examined

[Extract]
Deputy John Deasy: This material includes a large number of reports, including four reports from the Comptroller and Auditor General dating back to 2000 and the report from Assistant Commissioner O'Mahoney. The Garda Inspectorate is also looking into these matters as they relate to fixed charge notices and we have a report from the Garda professional standards unit dating from April. When one looks through all this material, it is fair to conclude, as the Commissioner stated, that the system has become better in some ways. That conclusion is proved by the figures. However, the system has also got worse in some areas. There have been marginal negative changes in respect of issues such as serving summons, inputting data, allowing offences or potential offences to become statute-barred and failing to prosecute individuals who are driving company cars. While the data shows there have been improvements, there have also been areas in which no improvements have been made. The Comptroller and Auditor General has made the same recommendations consistently since 2000, yet there has not been any improvement in some categories.
I will start with the positives. With regard to the collection of fines, the position 13 or 14 years ago was that more than half of such offences went unpunished. The rate of collection has improved, with only 20% of fines going uncollected today. The cancellation rate for on-the-spot fines was approximately 8% in 1998, whereas the most recent report cites a rate of 5%, which indicates an improvement.

Deputy John Deasy: When it comes to the serving of summonses, for example, in 2000 there was about 44% non-serving of summonses but it has gone up to 50% on the latest date provided to us by the Comptroller and Auditor General. Will the Commissioner start with that issue? What are the reasons and why has there been a marginal increase in the non-serving of summonses from his perspective?

Mr. Martin Callinan: I suppose there are many reasons people will evade either getting a fine or conforming to whatever the sanction for that fine being imposed on them. It is the case that there is a greater population now, there is a transient community with people from both the North-South and east-west and there are data quality control issues in the context of registered owners of vehicles. The Deputy is right. Summonses are a difficulty and have been a difficulty for us for many years in terms of trying to get them served.

John Deasy: Let me be specific. I am sorry for cutting off the Commissioner. There are some other issues I need to get to. In the 2000 report the Comptroller and Auditor General made a recommendation and he made it again in 2012. The recommendation was very simple, that the Garda and the Courts Service need to work together to deal with the issues of summonses. That has not happened.

Martin Callinan: It is happening and we are engaging with the Courts Service and have been for some time on this issue.

John Deasy: Please continue.

Martin Callinan: I do not have a whole lot more to say to the Deputy. That is the case. We are working on it. I have a designated officer working with the Courts Service with a view to seeing what else we can do to improve. He has a group looking at it to see if there is anything further we can do. All I and my senior officers can do at every available opportunity we have is re-emphasise the need to ensure that summonses are served in a timely fashion. We reiterate that message quite frequently.

John Deasy: Has the Commissioner come across any evidence of deliberate non-serving of summonses by gardaí?

Martin Callinan: No.

John Deasy: Will the Commissioner explain to me how the serving of summonses is tracked right now? How is this monitored?
Mr. Martin Callinan: It is the function of every district superintendent to track the summonses that arrive to him or her for service. That is a function that should be taken very seriously. Primarily, he or she is responsible for doing that.
Deputy John Deasy: Has the Commissioner taken disciplinary action against any garda with regard to the non-serving of summonses?

Martin Callinan: No.

John Deasy: Has the Commissioner ever detected multiple non-serving of summonses by a particular garda?

Martin Callinan: To be fair, no. It is a volume issue. It is a difficult area for us and we accept it is a difficult area for us but we are working to try to reduce the level.

John Deasy: I am going to ask a question because we are going back 12 years. What can we expect with regard to that individual the Commissioner named as working on this with the Courts Service? Are we going to be here in 12 years' time with the same 50% figure? I have to ask that question because it is going on a long time and is getting worse. What can the Commissioner tell the committee to reassure us that figure is going to get better?

Martin Callinan: I think it is very clear that we are very serious about our business in terms of summonses and the courts process and we will continue to reinforce, as best we can, the need on our people to ensure that all of the summonses we get are served. This is not just unique to our own organisation, there are other organisations that suffer the same issues in terms of compliance with matters.

John Deasy: I will move to company cars and return to the recommendation made by the Comptroller and Auditor General in 2003. We are still in the same situation. I think the figure is 28%. Let me provide some background. The assurance at the time was that the Garda Síochána would contact the Department of Transport, Tourism and Sport, and deal with the issue. That was ten years ago. Can the Commissioner say why that did not happen with the Department?

Martin Callinan: It did happen and I have already indicated to the committee. In 2004, section 19 of the Road Traffic Act was introduced but, in effect, it was found to be not effective. It is the case that one can register a vehicle in a company name. We are working very closely on the issue. There are a number of people involved in this matter because we view it so seriously. The Road Safety Authority, the Department of Transport, Tourism and Sport, the Department of Justice and Equality and the Courts Service are all working together to try to address this.

John Deasy: I am sorry to stop the Commissioner again. In 2004 the legislation passed was not effective. That was ten years ago. The revenue foregone for 2011 and 2012 is more than €1 million. Since 2004, when the Commissioner identified that the legislation was ineffective, what steps did he take with the Department of Transport, Tourism and Sport to rectify that because in those two years the State lost €1 million?

Martin Callinan: We will work with any Department we can in an effort to improve matters but we do not make the law. We implement the law as best we can.

John Deasy: It there a lacuna in the law, the Commissioner identifies that and communicates that to different Departments all the time.

Martin Callinan: With the greatest respect, Deputy, that has been well-flagged in many Departments.

John Deasy: It has been for ten years.

Martin Callinan: It has been well-flagged.

John Deasy: This figure is very low. I will start with that again. I must press the Commissioner on this. This is fairly basic stuff. There are a lot of reports, including Comptroller and Auditor General reports but in some cases there has been no movement whatsoever with regard to changing the law and putting into place the procedures and systems to actually improve the system. In some cases it has improved but in other cases there are serious lapses, organisational lapses, legislative lapses and I do not think it is fair to say it is simply a matter of law enforcement. The Commissioner has a critical role with regard to identifying gaps in the law and communicating them to a Department so it can fix them, whether it is the Department of Justice and Equality or the Department of Transport, Tourism and Sport, but it has not been done.

Martin Callinan: With respect, it has. We are meeting those involved and are indicating the difficulties and the problems we have. On many occasions a discussion has centred around an individual's driving licence particulars being associated with a particular vehicle, for example, and maybe that might help to address the issue. In reality, what does one do with the employee who is employed by a large transport company who is driving a variety of lorries? The bottom line here is that under section 103 of the Road Traffic Act there is an obligation on either the secretary of a company or some company official to indicate who was driving the lorry.

John Deasy: They are not doing that.

Martin Callinan: Correct.

John Deasy: They are not replying-----

Martin Callinan: We have highlighted this issue many times so it is not fair to point the finger at the Garda and say it is not addressing it. We have highlighted these issues time and again and people are aware of the difficulties.

John Deasy: So the Commissioner is saying it is a lapse on the part of the Department of Transport, Tourism and Sport to deal with this.

Martin Callinan: I am not saying it is a lapse on anybody's part. All of these people can speak for themselves. What I am indicating is where problems like this manifest themselves we interact with the various agencies that are involved in the process and we bring it to their attention.

John Deasy: I will move on to statute barred offences and, again, I go back to 2003. At the time 5,500 cases were flagged as being statute barred in a particular period. In 4,561 of these no reason was stated in the computer file. The Accounting Officer at the time told the Comptroller and Auditor General that the reason for the high number of statute barred offences was due to a backlog of offences relating to the introduction of the new penalty points system. The Accounting Officer at the time, not yourself obviously, stated that since the backlog was now clear that - I stress - the situation should not arise again. In the current report the Comptroller and Auditor General examined over 3000 offences detected in 2011 and 2012, yet it is still a problem.
There were 3,000 offences detected in 2011 and 2012. It is still a problem. It results in a huge loss of revenue from the Exchequer. I do not think we can point the finger at the Department of Transport, Tourism and Sport or any other Department. This is basic in-putting of data. Court proceedings must be initiated within six months of the offence’s being detected. If they are not it will be statute barred. Why is this still a serious problem ten years on while the State is losing huge amounts of revenue because data is not entered?

Martin Callinan: There are a couple of aspects to this. If a member of the Garda Síochána who applies for a summons for a specific offence, whether it is a road traffic or any other matter, does not deal with that within the statutory period of six months it is statute barred. That is one aspect. The other is the notepads that we use. The Comptroller and Auditor General’s report, and the O’Mahoney report, identified problems for us in that respect. We have implemented a new system whereby all of these pads, which come in batches of 20, are bar-coded and accounted for. An accounting regime has been put in place. I expect to see improvements on that aspect.

John Deasy: It is a question of individuals. Some individuals are not doing this more than others.

Martin Callinan: It is. By the way, the Deputy mentioned in his question that I cannot blame any Department. I am not in the business of blaming any Department or any other agency for sins on my side of the fence. I want to make that clear.

John Deasy: That is fine.

Martin Callinan: I am putting my hand up here about several fault-lines within the system.

John Deasy: Does Mr. Callinan understand that it is reasonable to ask the question when nothing has happened after ten years and when the figures are so bad?

Martin Callinan: That is different. I will certainly answer the question but the Deputy should please not accuse me of laying the blame on-----

John Deasy: I am not.

Martin Callinan: The Deputy mentioned it. That is a point.

John Deasy: Let us be honest about this, someone is falling down in regard to dealing with this.

Martin Callinan: If we allow a situation to occur whereby a summons becomes statute barred then it is clear that we are at fault. That is a given.
We are putting matters in place in respect of the electronic notepad system to repair that. If there are other issues to be addressed we will address them. According to the Comptroller and Auditor General’s report it is 0.4%.

John Deasy: With regard to what I said, it comes down to individuals not in-putting the data in some cases. Does the Garda Síochána have a system to identify those people? There are repeat offenders – offenders is the wrong word - people do this repeatedly or do not do this repeatedly. Is there a way to find those people and deal with that problem? What is the system for weeding this out?

Martin Callinan: In terms of processes, all of these things should manifest themselves in the ordinary management of a district or a division. All of these things should be addressed by line management within those areas.
I hope that the notepad issue I mentioned will take care of itself through the audit trail we now have. The inspector in the district has to make a return on a monthly basis to the fixed charge notice. It is the case, when people are out on mandatory alcohol testing, MAT, checkpoints or other road traffic duties in very inclement weather, that these forms are destroyed and are mislaid. All of the human elements come into play. I am not using this as an excuse but these are issues that arise in the course of ordinary everyday business. It is up to us in management to ensure that there are sufficient checks and balances to ensure that no summons is statute barred.

John Deasy: I have picked out three examples and I will finish on this point. I have to make the observation after going through all of this information dating back to 2000, and the four reports and sets of recommendations that the Comptroller and Auditor General and his office have made over those years, in those three areas I have outlined there has not been much improvement. In some areas there has been. To be fair it has been very positive. The system in many respects is far more rigorous. There are areas where I am to an extent at a loss to figure out why the improvements are not greater. That is merely an observation.
Since the new policy was issued in August, what improvements have been made and can Mr. Callinan give us some detail on the kinds of figures, if they have improved since then, across the board, since the new policy was initiated in August?

Martin Callinan: I have already mentioned the three-tier audit system, the professional standards unit which looks at the decision-making process-----

John Deasy: May I stop Mr. Callinan and ask what they do? Mr. Callinan said that there is a statutory requirement to have that unit. When I look across all these areas I ask myself, while all of this has been going on for the past 13 years what has that unit been doing in these areas? What is its role? How often does it meet? Mr. Callinan said it is a statutory requirement to have it but how effective is that unit?

Martin Callinan: It is a unit of its own right. It is an entity in Garda headquarters. I was statutorily obliged to set it up. As the Deputy can imagine from its title it considers professional standards for the Garda Síochána. It would typically go into a district or a division and examine the processes in operation and bring back recommendations across the whole system, not just penalty points. It makes recommendations and reports to local management.
The Deputy mentioned what has been happening in trying to correct this. Apart from those three tiers, the Assistant Commissioner, the professional standards unit and the internal audit unit, there are several changes in respect of the cancelling authority and redefining its area. In other words, superintendents in the new policy are not now in a position physically to access a machine and cancel it. It has to go to the fixed charge office with the recommendation to cancel or not.
A similar tracking system is in place in respect of the notepads so that a return goes every month to the fixed charge office which is auditing. I mentioned the three units. They are some of the things that have been happening since August under the new policy arrangement. Of course if there are other recommendations from the inspectorate or the Director of Public Prosecutions we will consider them and if we can factor them into the policy we will do so.

John Deasy: On the issue of whistleblowers, Mr. Callinan will not talk about individual cases. He has made that clear and the committee has accepted that. It is fair enough but can Mr. Callinan fill me in? I have a concern about the information that it seems is now frequently given to Members of the Oireachtas and committees. In some cases it might constitute a fragment of the information around one particular case, or an alleged offence. This committee needs to be careful about how it deals with that information because it does not give the full picture. Is that Mr. Callinan’s opinion too?

Martin Callinan: That is absolutely the case. If one considers the allegations that the Assistant Commissioner has examined on behalf of all of us it is very clear that in a substantial portion of the allegations the people who complained about corruption, malpractice, cancellations of all types had very limited access to the decision-making process. They simply did not have access, to put it in a nutshell. They opened a screen in the PULSE system and looked at a snapshot of the actual event but they did not see the complete picture.

John Deasy: Will Mr. Callinan give us an idea of what else there is? What constitutes the full picture beyond the screen?

Martin Callinan: For example, if an allegation is made that a particular superintendent cancelled a particular group of tickets, it would be necessary to go to the district office and examine the audit trail, providing it is there, of course, but this has not always been the case. If the trail exists one would have to examine it to see the circumstances, to see if it has been done correctly and whether the professional judgment exercised was proper and appropriate in the circumstances. That information is not available from these screen shots; one must go behind them.
For example, when dealing with the fixed charge notice system, in some instances the juvenile diversion scheme is at issue. Once a date of birth is recorded for a driver, it will automatically go to the fixed charge office for cancellation under the juvenile diversion scheme. Therefore, there are elements which are not visible when one looks at a screen.

John Deasy: What are the Commissioner's views on how this committee is doing its business? Let us say I agree with the Commissioner and that I have a similar concern. I am not questioning anyone's bona fides – whistleblowers – but I am getting to the nub of the issue. The Commissioner is saying that in his opinion he cannot make a decision or an analysis based on a fragment of information.

Martin Callinan: Yes.

John Deasy: What are his views on how the committee has been doing its business in that case? Is he saying that it cannot possibly-----

Martin Callinan: In relation to this particular aspect?

John Deasy: -----make a correct analysis if it does not have all the information?

Martin Callinan: I do not believe it is possible; I really do not believe it is possible. Far be it from me to criticise the important work that goes on in this committee, because it is necessary and important that we are called to account, as we should be. As the accounting officer for the Garda Síochána I have a statutory function under section 26 of the Garda Síochána Act to direct and control the force. The only effective way I can do that is to have a proper disciplinary regime in place so that when people step outside I have access to sanctions.
I should preface my remarks by indicating that one of the people who is now engaged in this so-called whistleblowing exercise is a person who is a serving member of An Garda Síochána, as I understand it. If that is the case, then he or she is subject to the disciplinary regulations. It is the case that at any time, at any place, anywhere, a member of An Garda Síochána can step outside the ordinary standards expected of that member. If that is the case then I would have to consider whether I would have access to the disciplinary regulations to deal with that issue. I am not for a moment suggesting that I will go down the road of exercising discipline in this particular case but it is certainly something on which I would have to reserve my position. If I am asked in general terms whether it is appropriate for a member of An Garda Síochána to use this committee as a platform for exercising whatever it is he or she wishes to exercise and make unsubstantiated allegations or provide sensitive personal data to a third party - such as this committee - then I will have to seriously consider my position and their position. I have already indicated to the Chairman that I have very serious concerns about the information, the data, that has been passed on to the committee. I am not aware of what is contained in that data but I can only presume it from the response of the committee. I have no issue with the committee taking legal advice and deciding how best to do its business but it is the case that I have also taken advice and I am told that, as we speak, I am in breach of the Data Protection Act and that it is possible that the person who supplied that information is in breach of the Data Protection Act. This is clearly a matter on which I will need to take action. I will reserve my position with regard to how I will deal with that. If I am asked in a general sense whether I would be in favour of a member of the Garda Síochána coming in here and using this forum, this committee, to expose material in the fashion in which it has been exposed or to make allegations that have not been substantiated, I think that is fundamentally wrong.

John Deasy: The Commissioner is also making the case that it is not possible to make a comprehensive case because not all the information is available. Is that correct?

Martin Callinan: If I may put it this way, I do not know what the committee has at its disposal. Certainly, if it is anything like the level and extent of the knowledge that the Assistant Commissioner had at his disposal about the allegations made, if that mirrors what the Assistant Commissioner was dealing with, clearly it would be impossible to make a judgment. That was part of my concern which I articulated in the letter to the Chairman. For instance, if the information is anonymous and if this committee were to rely on providing statistics in a public forum, then we are in a very rocky place unless these matters can be explored and properly teased out. I have indicated to the committee that there were issues within the system that needed to be corrected, and this has been done. However, I emphasise it is very important that as a disciplined force we do not allow a situation to occur in which 13,000 members of An Garda Síochána start making complaints about one another and investigating one another. We have to exercise some form of control. It is important that as Commissioner I have control and authority over the force. How can I manage the force unless I have access to that type of control? The organisation could not perform its policing or security remits if I and my officers were not in a position to exercise that type of control.
I do not want it to be said that I am considering disciplinary action with regard to these people. I have given it very careful consideration and I will continue to do so. However, there may come a point at which I will have to seriously consider this matter for all the reasons I have indicated. I cannot allow a situation to continue where information is being bandied around. I realise people are relying on a certain section of the law as an authority.
Wrongdoing by any member of An Garda Síochána will not be tolerated by me or by any member of my officer corps. The committee can take that as a given. There is a difference between reporting wrongdoing and consistently putting about large volumes of material. These are the parameters I must consider. When I became aware of it I issued a very clear direction to the two members involved. We had a discussion with Deputy McDonald on the last occasion I was before the committee as to when I became aware of the identities of these people and what they were saying. I have carefully checked my records since then. In December, following on from the information that the retired member of the force and a serving member, a sergeant, were working together to provide information and material for an elected representative, I took advice and I was advised that this was wrong.
In light of that advice, I set about putting in place a direction to both of these individuals that if they had any problem at all or any complaint to make, the first thing they should do is to revert either to the assistant commissioner who deals with very serious allegations or any other member of the Garda Síochána. As I recall, I used the words "without prejudice to the confidential reporting mechanism," because I fully recognise and support the confidential reporting system in An Garda Síochána and elsewhere. Everybody, not just in An Garda Síochána, is entitled to be in a position to confidentially report matters of wrongdoing that come to their attention. At the same time, these individuals have a responsibility as well, and the making of allegations that cannot be substantiated on a regular basis is a particular difficulty that I may have to deal with.

Deputy John Deasy: Thank you, Commissioner.

Deasy: When did you recuse yourself and inform everybody that you were interested in the job? You were an integral part of the process of hiring somebody to be chief executive of the CRC but you wanted that job yourself.

Conlan: It was not until I saw that the internal advertisement when the job spec-----

Deasy: You have got to be kidding me. It was not until you saw the internal advertisement-----

Conlan: The job spec.

Deasy: You were the person who was putting that together.

Conlan: Not me.

Deasy: You were part of the recruitment team.

Conlan: That was put together by Amrop Strategis. I had no hand or part in the recruitment of Amrop.

Deasy: Can someone tell me who made up the remuneration sub-committee?

Chairman (John McGuinness): Mr. Goulding, Mr. Martin and Mr. Nugent.

Deasy: Okay. At your meetings with MERC, did you discuss pay?

Conlan: No.

Deasy: You did not discuss pay at all - no salary? So you went to a recruitment company and you did not discuss pay? You did not mention the salary of the incoming chief executive at all? That is unbelievable.

Conlan: The meeting with MERC was to establish whether it would be suitable to recruit the CEO. That was the substance of the meeting.

Deasy: You did not get into pay or salary at all?

Conlan: Not that I can recall.

Deasy: What is the HSE going to do about the money that has not been disclosed to date, which found out about in its investigation with the interim administrator? What decision has the HSE taken with regard to the moneys that have been given to Mr. Kiely of which it was not aware?

Barry O'Brien: First, I want to make reference to the recruitment process and draw the Deputy's attention to a letter we previously put on the record that was dated 24 April 2013. It was a letter from the then chairman, Mr. Ham Goulding, to Ms Laverne McGuinness, national director of the HSE, stating: "In accordance with the terms of our Memorandum and Articles of Association we are commencing a recruitment programme to find his replacement." This refers to the CEO. It goes on to state: We have signed a contract with Amrop Strategis to handle the recruitment on our behalf and they have started the Executive Search process which will be carried out by reference to their contacts and database and by newspaper advertisement. We would like to have the new executive in place by the end of June[.]
The next thing we heard about it in the HSE was when the appointment was then made by way of an internal competition. So, with reference to Deputy Deasy's second question, what we are now saying is what our internal administrator stated in a letter to the committee:
At this stage it is necessary for the CRC to satisfy itself that the payments made/benefits conferred are reasonable and proper (in the context of its memorandum of association) and that any amounts paid were correctly calculated and authorised.
In the event of there being a loss to the CRC (or the Friends and Supporters of the CRC), steps to make good that loss [and deal with other consequential issues] will require to be taken.

Deasy: What is Mr. O'Brien's opinion? Were they reasonable and proper?

O'Brien: No. The Deputy is asking my opinion. Quite clearly, we already heard at a previous hearing that the then CEO was part of a private pension scheme whose terms and conditions he would benefit from. I also think it is hugely erroneous for the CRC to make reference to a package which was available in 2010 in the HSE when in fact Mr. Kiely chose to retire in June 2013 when no such package was available. To use that as a basis for calculating or as a methodology to award benefits--

Deasy: You are talking about the HSE's early retirement scheme.

O'Brien: In 2010 only.

Deasy: That is grand. Thank you very much. Again, I go back to page 2 of the minutes, which talks about the package being in line with the recommendation of the remuneration sub-committee. Could Mr. O'Brien tell me if there is any documentation as to whether a recommendation was circulated to members, or was this just brought up at this board meeting?

O'Brien: For the record-----

Deasy: Normally, when there is a recommendation, that means there is a paper trail. Normally, that means that people on the board would be notified that there was a specific recommendation and the figures would have been cited in that recommendation before people got to sit at the board.

O'Brien: As the Deputy asked the question about 20 minutes ago, I have been advised that there are only minutes of one meeting, which was the one we have provided to the committee, and that no minutes can be located for the remuneration sub-committee.

Deasy: No minutes?

O'Brien: That is to the end of March.

Deasy: So you do not have any paper trail with regard to that particular sub-committee meeting?

O'Brien: That is the most up-to-date position, Deputy. They are not available.

Deasy: And you are not aware of any recommendation in writing that was circulated to members from that sub-committee meeting?

O'Brien: No, we are not.

Deasy: When you go through page 1 of the letter and get to the last paragraph, it talks about the moneys paid by Friends and Supporters of the Central Remedial Clinic that was described in the draft internal accounts as a donation.
I ask Dr. Smith, who is an auditor, whether that is falsification of accounts.

Dr. Geraldine Smith: The wording is important. The documents states "draft internal accounts". Obviously they have not been subjected to an audit. One would expect that reference would be made in the final accounts to the purpose of the donation but it is also interesting to note that in the previous accounts the word "donation" was also used between 2010 and 2012, as well as the draft accounts for 2013. There was no reference to what the donation was in respect of-----

Deasy: Can one do that, professionally?

Dr. Smith: I always read accounts from the perspective of the man in the street. Any individual taking up a set of audited accounts should be able to assume that the accounts provide full information so that he or she can get a full understanding of the transactions involved.

Deputy John Deasy: It is misleading, is it not?

Dr. Smith: One would certainly expect more information.

Deasy: Is it not misleading?

Dr. Smith: I have been informed by the Chair that I can say it is misleading.

Chairman: It is also misleading in regard to the payments to the Mater hospital, which were described as a fee. There was not a fee.

Dr. Smith: No, there was not a fee.

Chairman: The auditors also have questions to answer in regard to the description of these sums.

Deasy: The terms are misleading. One could go so far as to say there was falsification. I am not accountant or an auditor. I do not have any great expertise in this area but, as Dr. Smith noted, the accounts should be written so that the ordinary man in the street can understand them. When I look at this and the interim administrator's account of it, I would go so far as to say it was done to deceive. That is very serious. This is the point he is making in the last paragraph, because he singles out the word "donation". It was not a donation in any sense of that word.
I ask the HSE about its guidelines on lump sums - I touched on this issue at the last meeting - and its interaction with Mr. Kiely in early 2013. Did it put the scare on him? What led to this? Was it in contact with the CRC and Mr. Kiely about his salary in early 2013? I do not know whether Ms Lawlor was involved.

O'Brien: From mid-2013 we were in contact with every section 38 agency and we asked the same questions, specifically about compliance with public pay policy, Department of Health consolidated salary scales and whether additional payments were being made.

Deasy: What contact did HSE make with Mr. Kiely and the CRC regarding Mr. Kiely's salary in the time leading up to his resignation?

Dr. Smith: Perhaps the most significant aspect was the communications from me in regard to the audit. As I informed the committee previously, I built on information provided by the CRC to the HSE in regard to various questions that had arisen around public pay policy, members of boards, fees being paid, etc. It is perhaps possible that the interaction from audit to seek clarification of the information already provided, an assurance that the information was accurate and correct and other information on directors' fees, pension payments to private funds - I do not think that had been asked previously - was a significant factor.

Deasy: It might have been a significant factor.

Dr. Smith: I do not know what factors determined Mr. Kiely's decision to reply. The audit report issued in March 2013, and perhaps that was the culmination of the issues.

Deasy: It seems to me that the audit of March 2013 put the frighteners on certain people. When people discovered they were going to be scrutinised by the HSE in regard to their salaries, they resigned. However, the deal they constructed around the resignation was incredible. I think they deceived people within the organisation with regard to how they accounted for it. I think the board members were aware of that. Certainly, some of them had to be aware of it. We are going from the attitude that mistakes were made and pay policy was breached to full knowledge of things that should not have happened. The scale of sanction with regard to how things were accounted for is something I have to question. I think it is very serious. It is not just a case of "maybe we paid him too much". If I was a member of the friends and supporters association I would have serious questions about the now resigned board members of the CRC. I do not know what steps they might take after this.
When Mr. Conlan resigned from the Mater hospital, what kind of retirement package did he receive?

Conlan: I retired under the cost neutral early retirement scheme.

Deasy: What does that mean?

Conlan: It means that someone who is over 55 years of age can avail of the VHSS retirement scheme. I retired under that.

Deasy: Are all those details with the HSE?

Conlan: Yes.

O'Brien: The distinction between retiring on a cost neutral basis and what was available in 2010 for enhanced early retirement was that in the former case an actuarial adjustment was applied to the value of the number of years an individual missed for full service, whereas there was no actuarial adjustment on the years of service in 2010.

Deasy: I said I would revisit the issue of the early retirement scheme. Earlier I used the word "deception". The interim administrator's letter makes reference to a statement that the proposed package was considerably less beneficial to Mr. Kiely than these terms and refers to the HSE early retirement scheme of December 2010, for which Mr. Kiely was ineligible. That is untrue, is it not?

O'Brien: Mr. Kiely was never eligible for that scheme because he was not a member of the scheme. He was always a member of a private scheme. He was one of the CRC staff who were in the Irish Pensions Trust scheme.

Deasy: I ask for clarification on the interim administrator's letter, which states that the chairman, in outlining the details of this package, intimated that the proposed package was considerably less beneficial to Mr. Kiely when compared with the terms of the HSE's early retirement scheme. Is that true?

O'Brien: Yes, he was not entitled to it but the proposed package was considerably less beneficial to Mr. Kiely.

Deasy: This is made up. He could not have been entitled to it.

O'Brien: That is correct.

Deasy: It is an absolute falsification. Is that not the case?

O'Brien: It is not correct, yes.

Deasy: Yes, it is misleading information, disinformation, misinformation.

O'Brien: It has no bearing on what Mr. Kiely was or was not entitled to.

Deasy: It has no bearing on any fact at all. It is a complete fabrication. Is that right?

O'Brien: It has no bearing on Mr. Kiely's entitlements in the pension scheme of which he was a member.

Deasy: We are dealing with a twisted web. We are just clipping the tip of this iceberg. I have been introduced to much of this only today. Things have been constructed by members of the board. I will use my words carefully. It seems to me that what was constructed was disingenuous at the very least. I go so far as to say that the details and reasons given for this were completely false in some cases and there is an element of deception here. The donation and how it was regarded within the accounts is a serious matter. I am unsure how we should proceed. Do we bring in members of the board again and ask them what they knew and did not know? My guess is that people will deny they knew anything. There must be some accountability here. I have asked the HSE how it intends to proceed. If Mr. O'Brien accepts what I am saying, and he seems to, the HSE administers and polices this area. I ask again, what does he propose to do regarding this entire situation?

O'Brien: Delivery of the services remains our primary focus. When we have all the facts and information before us we will take whatever steps are necessary to ensure there is appropriate probity and governance, and if that includes seeking assistance from another statutory agency in finding the best way to proceed, we will do that with the sole interest of the integrity of CRC.

Deasy: To what statutory agency is Mr. O'Brien referring?

O'Brien: It may be necessary, depending on the information that arises, to seek the assistance of the Garda Síochána.

Deasy: Fine. I thank Mr. O'Brien.