PAC Meeting | Oct 23, 2014
Re: Sudden suspension of Waterford IT and IT Carlow merger discussions
Deputy John Deasy: At the risk of clogging up the work programme I shall raise something else, a matter concerning the Waterford Institute of Technology and Carlow Institute of Technology. Both bodies come under the remit of the committee and have been in here recently.
An abrupt announcement was made a couple of days ago that the amalgamation or merger of the two organisations was ending. A joint application was being worked on by those two bodies with a mind to ultimately putting together a successful application for a technological university in the south east. Similar applications by a number of different educational institutions in Dublin are ongoing.
I have a question for the Comptroller and Auditor General. It is my understanding that when it comes to a restructuring like this one, which has gone on for many years, there is a significant cost for restructuring. Those on the boards of these two organisations have a responsibility to account for the money that has been spent on the process of restructuring which I believe could be reasonably significant. They need to answer for that. The suspension of this amalgamation or merger, as abruptly as it has occurred, needs to be questioned because of the cost that has been incurred by the State over the past few years.
I ask the Comptroller and Auditor General the following. Is it the case that a significant amount of money accrues when it comes to this kind of restructuring? Does the Committee of Public Accounts have a remit to ask both of these organisations to come in here to explain the amounts of money that have been expended and find out why they decided to abruptly end the merger or amalgamation?
Mr. Seamus McCarthy (C&AG): Certainly there is expenditure in regard to restructuring. That is not just a question for Waterford and Carlow because there are other organisational restructurings in the offing. My recommendation to any institute of technology would be to disclose exceptional expenses of that nature in the financial statement. It is the Higher Education Authority that dictates the format of accounts and the type of analysis that is done on expenditure. If there was expenditure incurred it is in the financial statements that have been presented. Therefore, for anything that is an expenditure item, one would certainly be entitled to ask and to try to go behind if the-----
Deputy John Deasy: Mr. McCarthy is saying it should be itemised for the special cost with regard to restructuring.
Mr. Seamus McCarthy: That would be my recommendation because it is exceptional expenditure. Normally, one would expect a restructuring to be on a slightly shorter timescale. In a way, it has become embedded in the institutions because this has been going on for quite some time.
Deputy John Deasy: I think what the Comptroller and Auditor General is saying is that the HEA should also be asked to come in to the committee, if we were to ask WIT and CIT to account for this. Time is of the essence here. I do not want to clog up the work programme any further but there is an imperative to ask these organisations to come in quickly. This has been going on too long. Depending on who one asks, one gets different answers as to why this occurred. It is unacceptable. Representatives of both boards need to be asked now what exactly has happened here.
Chairman (Deputy John McGuinness): In order to be able to focus on this directly, we should write to WIT and CIT and ask them to extract from their accounts over the years the exact amounts of money that were spent in regard to the project so that we get the figures. Otherwise, we will be looking at accounts and the figures will be wrapped up in some other figure for one thing or another. It is likewise with the HEA. We can bring in the three bodies and we will insist on it being done as quickly as possible.
Deputy John Deasy: Will you make it clear to them that the expectation is that they come before the committee in the short term?
Chairman: Yes, and they should bring these figures because we do not want a job of work to dig out the figures. They should have them on hand and we will then know the exact cost over the years since this began of the merger negotiations or discussions, or the project itself.
Deputy John Deasy: I think I speak for a lot of people in the south east, not just in Carlow and Waterford, who, when they look at this situation, view it as being messy. They are tired of it. It has gone on too long. They can reasonably expect a reasonable degree of governance when it comes to these two bodies and this joint application. I am coming to the conclusion that the governance of this application has not been adhered to. We need to get to the bottom of this sooner rather than later.
Chairman: I agree. We will set it up as soon as possible. We will ask for the figures beforehand because we need to see them.
Re: Sudden suspension of Waterford IT and IT Carlow merger discussions
Deputy John Deasy: At the risk of clogging up the work programme I shall raise something else, a matter concerning the Waterford Institute of Technology and Carlow Institute of Technology. Both bodies come under the remit of the committee and have been in here recently.
An abrupt announcement was made a couple of days ago that the amalgamation or merger of the two organisations was ending. A joint application was being worked on by those two bodies with a mind to ultimately putting together a successful application for a technological university in the south east. Similar applications by a number of different educational institutions in Dublin are ongoing.
I have a question for the Comptroller and Auditor General. It is my understanding that when it comes to a restructuring like this one, which has gone on for many years, there is a significant cost for restructuring. Those on the boards of these two organisations have a responsibility to account for the money that has been spent on the process of restructuring which I believe could be reasonably significant. They need to answer for that. The suspension of this amalgamation or merger, as abruptly as it has occurred, needs to be questioned because of the cost that has been incurred by the State over the past few years.
I ask the Comptroller and Auditor General the following. Is it the case that a significant amount of money accrues when it comes to this kind of restructuring? Does the Committee of Public Accounts have a remit to ask both of these organisations to come in here to explain the amounts of money that have been expended and find out why they decided to abruptly end the merger or amalgamation?
Mr. Seamus McCarthy (C&AG): Certainly there is expenditure in regard to restructuring. That is not just a question for Waterford and Carlow because there are other organisational restructurings in the offing. My recommendation to any institute of technology would be to disclose exceptional expenses of that nature in the financial statement. It is the Higher Education Authority that dictates the format of accounts and the type of analysis that is done on expenditure. If there was expenditure incurred it is in the financial statements that have been presented. Therefore, for anything that is an expenditure item, one would certainly be entitled to ask and to try to go behind if the-----
Deputy John Deasy: Mr. McCarthy is saying it should be itemised for the special cost with regard to restructuring.
Mr. Seamus McCarthy: That would be my recommendation because it is exceptional expenditure. Normally, one would expect a restructuring to be on a slightly shorter timescale. In a way, it has become embedded in the institutions because this has been going on for quite some time.
Deputy John Deasy: I think what the Comptroller and Auditor General is saying is that the HEA should also be asked to come in to the committee, if we were to ask WIT and CIT to account for this. Time is of the essence here. I do not want to clog up the work programme any further but there is an imperative to ask these organisations to come in quickly. This has been going on too long. Depending on who one asks, one gets different answers as to why this occurred. It is unacceptable. Representatives of both boards need to be asked now what exactly has happened here.
Chairman (Deputy John McGuinness): In order to be able to focus on this directly, we should write to WIT and CIT and ask them to extract from their accounts over the years the exact amounts of money that were spent in regard to the project so that we get the figures. Otherwise, we will be looking at accounts and the figures will be wrapped up in some other figure for one thing or another. It is likewise with the HEA. We can bring in the three bodies and we will insist on it being done as quickly as possible.
Deputy John Deasy: Will you make it clear to them that the expectation is that they come before the committee in the short term?
Chairman: Yes, and they should bring these figures because we do not want a job of work to dig out the figures. They should have them on hand and we will then know the exact cost over the years since this began of the merger negotiations or discussions, or the project itself.
Deputy John Deasy: I think I speak for a lot of people in the south east, not just in Carlow and Waterford, who, when they look at this situation, view it as being messy. They are tired of it. It has gone on too long. They can reasonably expect a reasonable degree of governance when it comes to these two bodies and this joint application. I am coming to the conclusion that the governance of this application has not been adhered to. We need to get to the bottom of this sooner rather than later.
Chairman: I agree. We will set it up as soon as possible. We will ask for the figures beforehand because we need to see them.
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