€4m in student grants overpayments

PAC Meeting | Jan 29, 2015

Chairman (Deputy John McGuinness): The financial statements from the City of Dublin Vocational Education Committee are accompanied by a lengthy note which I ask Mr. McCarthy to explain.

Mr. Seamus McCarthy (Comptroller and Auditor General): What I was drawing attention to in the audit opinion was the disclosure by the City of Dublin Education and Training Board, CDETB, as it is now known, that there had been an overpayment totalling about €4 million in student grants, including maintenance grants. There are a couple of elements making up this overpayment. Approximately €1.9 million was paid in maintenance grants to students already in receipt of the back to education allowance. Where a student receives the back to education allowance, he or she is not entitled to receive grant payments. In addition, €653,000 was paid in fee grants to postgraduate students to which they were not entitled, while €1.2 million was paid in fees and maintenance grants to students who did not have citizenship eligibility. There was a figure of €310,000 identified which was paid in respect of students who were initially eligible, but the money was an overpayment because they were not attending their course or withdrew from it.

Chairman: Given the degree of scrutiny to which applicants are subject to obtain a grant from Student Universal Support Ireland, SUSI, and the hassle involved in terms of bureaucracy, it is staggering that this has occurred. It shows a complete lack of proper administration procedures.

Deputy John Deasy: Where do oversight and audit start and finish in City of Dublin VEC? What steps need to be taken in any regular audit or accounting of what a VEC does and where it dispenses money? Does it deal with these matters internally and does this subsequently work its way up to the Department of Education and Skills? How does the system work and how should it work? How did this issue get so badly out of control?

Mr. Seamus McCarthy: To put it in context, the figure works out at approximately 2.6% of the total amount the VEC paid out. Obviously, it is a complex system of payment. The controls are exclusively within Student Universal Support Ireland and the City of Dublin Education and Training Board and subject to audit by us. The CDETB would also have its own internal audit unit which would check these matters. The payment of €1.9 million to individuals in receipt of the back to education allowance would have come to light when the CDETB received a set of data from the Department of Social Protection which threw up this anomaly when it was matched with its own data set.

Deputy John Deasy: That was after the fact.

Mr. Seamus McCarthy: Yes.

Deputy John Deasy: The education and training board had its own internal auditors who waited for the Department of Social Protection to provide a data set. How did the disbursement of this money go so badly wrong when clear rules apply to students who are in receipt of the back to education allowance in receiving a maintenance grant?

Mr. Seamus McCarthy: Somebody who submitted an application may have overlooked to tell VEC that he or she was already in receipt of the back to education allowance.

Deputy John Deasy: Overlooked is a-----

Mr. Seamus McCarthy: I have to be careful in the case of individuals.

Deputy John Deasy: We all deal with people who receive payments from the Department of Social Protection, including some who are liberal with the truth when it comes to payments. That is fine because we usually sort out these things with the Department and the individuals in question. However, the rate of overpayment is high.

Mr. Seamus McCarthy: A difficulty also arose because there was a change of policy in this area. Some people who were in receipt of the back to education allowance and already in receipt of grants and who were, for instance, entering their second or third year of a course would have been entitled to retain the allowance and receive grant assistance. This changed with effect, I believe, from the 2012-13 year of account.

One of the issues when the SUSI system was put in place was the potential for it to get that information from the Department of Social Protection in advance of making the awards, but it did not have that system in place. It is in place now. It is unlikely that particular aspect of it would have been repeated.

I should say I have a special report coming out - it is due to be finished this week - in relation to the development of SUSI and the bedding down of it. That will be coming before the committee in due course.

Deputy John Deasy: It was €4 million altogether.

Mr. Seamus McCarthy: Some €4 million in total.

Deputy John Deasy: What happens now with regard to the moneys that were given out erroneously? In some cases incorrect information was supplied. What are the consequences?

Mr. Seamus McCarthy: I think discussions are still ongoing between the CDETB and the Department in relation to whether or not moneys will have to be recovered from students who were overpaid or in respect of whom overpayments were made. In relation to the payments where students withdrew, I think they are seeking to recover that money.

Deputy John Deasy: In the normal course of what I do every day, I deal with many people on issues with the Department of Social Protection. It is par for the course that somebody who is overpaid will be asked to pay the money back. One would expect that to be the case in this situation also.

Mr. Seamus McCarthy: I would expect that in any situation where there is a payment made to which somebody is not entitled, the public body would seek to recover it.