PAC Meeting | July 2, 2015
Revenue Commissioners called and examined
Deputy John Deasy: I have a question which is a follow-on from what Mr. Cody said. I refer to the World Bank grading system as far as ease of paying taxes is concerned. This has come up previously, and it is something I know is taken very seriously by companies located here.
If we are the best in the European Union and the sixth best in the world when it comes to ease of paying taxes, are there any measures we still need to introduce that would increase that number? It has come up, and if one reads surveys of companies that are here, American companies in particular, it is certainly a big issue, more so than some people would think.
Niall Cody [Chairman Revenue Commissioners]: The Deputy is right. We take it very seriously. We talked earlier about proposals that we will make to the Department for changes in systems, but technology is critical. Our Revenue online system is the vehicle through which it is easy to pay and easy to administer, but we are not complacent about it.
We have processes in place. We are introducing shortly an electronic tax clearance system which will be available online, for which one will not have to apply. One will be able to look at it. Every year-----
Deputy John Deasy: Will that reduce time?
Niall Cody: One will be able to see one's tax clearance virtually there and then.
Deputy John Deasy: Right.
Niall Cody: In 2012, we fundamentally reorganised relevant contract tax to an electronic platform, which took over 1 million pieces of paper out of the system. We have a schedule of developments to make it easier to pay. To move up from best in Europe will present particular challenges because a number of the countries ahead of us do not have-----
Deputy John Deasy: I know where Mr. Cody is going with this. It might be impossible to get beyond five or six.
Niall Cody: It is really difficult. Some of it is the Gulf states, and short of abolishing certain taxes-----
Deputy John Deasy: So the World Bank probably should have a different scale for-----
Niall Cody: I think it is comparable. People understand perfectly the ease of paying tax in the European Union. That is the kind of standard. Similarly, a provision that is overlooked in some of the comparisons is the ease of carrying out customs transactions. We are up there on that one, which is really important.
We have spent a lot of money on an electronic manifest system which allows the electronic reporting of the manifest to facilitate the movement of goods. The Chairman talked about speaking with the trade.
We engage heavily with the trade, advisers and business interests on improving the system of doing it. We are quite proud of our record. We were an early mover in electronic filing, and we are constantly looking at enhancing the system.
Deputy John Deasy: The Chairman should stop me if I am repeating what he or anyone else has said, but I wish to ask a question about what members have been dealing with in recent weeks, which is Ansbacher...
The only question I was going to ask was whether the chairman of the Revenue Commissioners has received any information since his last appearance that would lead him to believe that Revenue missed anything in its initial or historical investigations?
Mr. Niall Cody: -----certainly, while I obviously knew we would not be going into it in any detail, in the past week I reviewed the transcript of Josephine Feehily's attendance in December.
In her preparation for that, because obviously she was retiring, I attended the various briefing sessions on that subject and, just as she was satisfied, I am satisfied that we followed through just as we would follow through on any other information we get.
Moreover, as I noted in respect of the HSBC stuff, with regard to the principal officer who has led our investigation of that portfolio, and his predecessor, I certainly would not like to tell him he should not follow through on that.
Were I to do so, he probably would be writing to members himself. It is really important to state that the professionalism of the people who are dealing with this has been lost a little bit in some of the discussions. I note that Ms Feehily did state she had never experienced any interference in doing the job, and I believe her.
Chairman [Deputy John McGuinness]: Yes, but arising from that, some of the questions that are asked here are asked of the Chairman out of a desire to be reassured or to reassure the taxpayer.
Niall Cody: Absolutely.
Chairman: That is an important part of it as well.
Niall Cody: I agree completely.
Deputy John Deasy: Neither Mr. Cody nor his organisation appears before the committee very often, but this is talked about on a constant rolling level both in the media and in here. Once the chairman appears before the committee, it is important to have clarity, a real definite view and a standpoint when it comes to the investigation about which members seemingly are talking constantly.
Niall Cody: Earlier, I outlined the legacy special investigation and the €2.74 billion that we followed through on. All those leads and pieces of paper were examined with the same rigour and have been followed through.
PAC Meeting | May 28, 2015
Department of Social Protection called and examined
Deputy John Deasy:
Regarding rent supplement and fraud, I will refer to the different schemes and payments. Every now and then there is a news story about the Department tackling fraud and saving hundreds of millions of euro.
I believe that gives people an impression that there is a massive amount of fraud taking place but, to be clear, when we compare some of our schemes to the fraud levels in the United Kingdom rent supplement schemes it seems they are higher, not by much but they are higher.
Those are the figures I have seen. How does Ms O'Donoghue respond generally to the notion that there is rampant fraud in the social welfare system? She knows the corresponding figures for different jurisdictions.
Is it a fair statement to say there is rampant fraud in the social welfare schemes? There will always be a certain percentage of it but is the fraud in some schemes worse than others?
Ms Niamh O'Donoghue [Secretary General, Department of Social Protection]: I would absolutely disagree with any suggestion that there is rampant fraud in the social welfare system.
It varies from scheme to scheme depending on the nature and type of schemes involved. One of the things we do in the Department is categorise schemes into high, low and medium risk, and the high risk schemes are the ones on which we wish to spend most attention.
But in terms of international comparisons, there is no evidence to suggest that the level of fraud in Ireland is out of kilter with the level of fraud anywhere else.
I refer back to my opening statement. The evidence points to the fact that the vast majority of social welfare claimants are receiving the payments to which they are entitled, so fraud is not an issue. What we are looking at is a very small number of people who are engaged in activity, and it is our job to try to minimise the opportunity for that.
Deputy John Deasy: With regard to rent supplement, the figure I have for estimated fraud is 2.9%. The rent supplement survey established that cases paid directly to the client had an 18% rate of fraud and error while those paid to a nominated person, in other words, the landlord, had a 10% rate of fraud and error.
Has the Department considered making that payment directly to the landlord to minimise that differential as a condition of the scheme?
Niamh O'Donoghue: This is something that has surfaced on many occasions and the view of the Department always has been that the contract for rent supplement is with the claimant.
The rent agreement is between the claimant and the landlord, and it is only at the request of the claimant that we would directly make the payment to the landlord.
The real issue is a control issue for us in terms of following people through, getting communication in terms of change of circumstances or change of address, and tracking whether people are in particular locations or not.
Rent supplement was never intended to be a long-term scheme. The intention is that, over time, people who have a long-term housing need will move, in the first instance, into the housing assistance payment, HAP system, which is now up and running, and then, prospectively, into other social housing if that is a better option for them.
That is an entirely different contractual arrangement and method of payment, which probably offers better security to the State.
John Deasy: I think all Deputies got this literature in their pigeon holes this morning.
Niamh O'Donoghue: Yes.
Deputy John Deasy: What motivated Ms O'Donoghue to print this?
Niamh O'Donoghue: It is to make people aware that there is such a protocol in place and that if there is a danger of homelessness, there are arrangements in place to deal with that. It seemed, certainly from recent publicity, that this may not be as widely known or understood as we would wish it to have been.
Deputy John Deasy: Is the Department coming across that? Obviously, there was a tangible reason within the Department for this-----
Niamh O'Donoghue: We now have almost 2,000 people who are in rent supplement arrangements under this tenancy sustainment protocol, which allows for particular circumstances to be taken into account in determining the rent to be paid.
That has been a hugely effective operation in working with the local authorities and Threshold. Obviously, however, there is still publicity concerning people at risk of homelessness and calls for rent supplement ceilings to be improved or increased.
We really just wanted to make people aware that this facility, this flexibility, does exist where those circumstances prevail, and 2,000 families have already availed of that.
John Deasy: I have one final question, on the Department's definitions with regard to customer error and fraud. I read the definitions. The specific difference, I suppose, is that where somebody provides information, it is deemed fraud if there is in the opinion of the Department an intention to provide false information.
Consider the customer error rates in the various categories. With regard to the jobseeker’s payment, customer error was identified in 119 of the cases assessed. That is quite a large figure. Fraud was suspected in 21 of the 987 cases assessed.
When it comes to rent supplement, that figure is down to 55. Someone might play devil’s advocate with regard to the Department's definitions and its interpretation of those definitions when it comes to the question of fraud versus customer error.
It is a fine line, in many respects, and the interpretation involves a judgment call by the actual social welfare officer. Are there increases across the board in customer errors based on the Department’s assessments? Does the figure remain the same? Are the ratios stagnant?
"Has the rate of customer error gone up? It is subjective. One man's customer error is another man's fraud."
Niamh O'Donoghue: The trend in recent years is that the proportion of overpayments raised due to suspected fraud has been increasing rather than customer error. Thankfully, the proportion attributable to departmental error has been decreasing, which is also welcome. Obviously, it is not something we can be complacent about.
The Deputy is absolutely right that it is a subjective judgment, but it is a judgment made by a deciding officer having regard to the entire set of circumstances by which something arises. The level of previous engagement with or the case history of the individual concerned is also taken into account before the judgment is made.
Deputy John Deasy: Has the rate of customer error gone up? It is subjective. One man's customer error is another man's fraud.
Niamh O'Donoghue: Yes.
John Deasy: Across the board, has the rate of customer error in the various schemes increased?
Niamh O'Donoghue: Perhaps I could give the Deputy some figures. In 2013, of the overpayments raised, 34% were considered to be attributable to customer error. In 2014, it was 40%. So far this year — this is very preliminary stuff to the end of April 2015 — it is 38%.
We have significantly improved our investment in the training of deciding officers, and we have also put in place a fairly sophisticated new system of debt recovery and assessment, which means we are raising overpayments in a much more timely way.
Decisions are being made much closer to an event occurring rather than at some time prospectively. That probably improves the consistency with which things are defined.
John Deasy: We have invested and are proposing to invest an awful lot more money, €17 million or €18 million, in the public services card. Has that made an appreciable difference with regard to fraud, as Ms O'Donoghue sees it?
Niamh O'Donoghue: Absolutely. There is a fixed cost associated with the public service card. We are in a contract, the value of which is €24 million. That is based on a presumption that we will issue 3 million cards by the end of 2016. To date, we have 1.4 million cards issued.
Obviously, this has been a progression in terms of ramping up our capacity to issue public service cards. What has happened is that somewhere in the order of 62 cases of fraud have actually been identified through the face-matching software that is associated with the public service card.
Equally, the public service card has contributed very significantly by virtue of us engaging with customers and inviting them to come in to be registered-----
John Deasy: Is Ms O'Donoghue saying that those 62 cases would not have been uncovered had the technology not been introduced?
Niamh O'Donoghue: I cannot say definitively that they would never have been uncovered, but let us say that the technology allowed us to uncover them very quickly. Very serious cases were identified that have gone through the courts, and custodial sentences have been handed down.
It also has a secondary effect. We have been inviting people to come in, and we now have the legislative power to suspend or stop a payment if somebody does not engage with us. On foot of that, somewhere over 200 payments have been stopped by virtue of people not attending, having gone through a whole range of natural justice processes to enable them to attend to be registered.
We really feel that it has contributed enormously on the fraud side, as well as the customer service side. Close to 400,000 people now have a public service card with the free travel badge on it, which provides much greater security to transport providers in relation to providing a service to people who are actually entitled to it.
John Deasy: With regard to the money we have invested and are proposing to invest, I believe Ms O’Donoghue said 3 million cards are to be issued by the end of 2016.
Niamh O'Donoghue: Yes.
John Deasy: Is this going to save an appreciable amount of money?
Niamh O'Donoghue: I would think so. I could not quantify precisely the fraud impact but the evidence to date is significant. The figure is certainly in the millions. Obviously, it has an ongoing effect and a huge preventative role.
Since people have to go through the registration process, they may be less inclined to try to perpetuate identity fraud. They may be less inclined to try to make multiple claims when they know we now have the infrastructure to check who they are.
Obviously, the card also has the potential to be of far greater use in a public service context. We are working with a range of Government Departments and organisations to make sure that becomes a reality, too, particularly in terms of online services. This is because we have the infrastructure to allow identity to be authenticated through the card.
John Deasy: I thank Ms O’Donoghue.
PAC Meeting | May 28, 2015
Dept of Social Protection called and examined
Deputy John Deasy: I turn to a broad issue within the Department which is the turnaround time from application to payment. I know from my own office that it is taking a great deal of time.
The one we point to most is the invalidity payment. These are people who have made contributions and worked and we estimate that in some cases it takes approximately 18 months from the time an application is made to payment. It is too long.
Obviously, there are a range of waiting times for the different payments that the Department has figures on. It knows the averages. It is not getting much better in our opinion from our anecdotal experience in the office with regard to the people we deal with when it comes to applications, assessments and the wait to final payment. It is something I have raised before but we have not seen any improvement.
Ms Niamh O'Donoghue [Secretary General, Dept of Social Protection]: I am sorry to hear that. It does not accord with what the data are telling us in the Department. I would be very happy to explore the particular issues with the Deputy or to give him more detailed information on this rather than to take too much time on it.
I accept entirely that the figures here are average processing times, but on invalidity pension the average processing time currently is 10.7 weeks.
We should bear in mind that invalidity, in common with a number of other schemes where there is a medical component, has an additional processing time. As the Deputy has correctly stated, invalidity is an insurance-based scheme and is based on a person having a contribution history but who also must meet the medical criteria.
Currently, 10.7 weeks is the average from application to what we call a "clean award". What I mean by that is the first decision to award. There is no doubt in relation to quite a number of medical schemes that initial decisions might be negative and reviews or appeals might then be looked at through which in most instances additional information is provided which, in turn, often allows for a positive decision to be reached.
There are many instances of that. The experience of the Deputy seems to out-lie what the national figures are telling us and I would be very happy to look at it for him.
John Deasy: It is fair enough that those are the Department's data. I am just saying it is not our experience. I will collate the instances I have and give them to the Secretary General. I understand what she is saying, which is that outside of the appeals process, it is two and a half months, whereas my estimate is a great deal longer.
Niamh O'Donoghue: There are a number of things we have done. In the last two and a half years, we have placed a huge focus on dealing with backlogs, which were very significant in a number of different scheme areas, including carer's allowance, disability allowance, invalidity pension and FIS.
We put a great deal of effort into trying to improve those processing times and made huge inroads. Very significant inroads were made such that the level of service has improved dramatically from what I will be the first to admit was an unacceptable level.
If the Deputy's experience or the experience of the people he is hearing about constitute significant outliers to the figures I have mentioned, it means there is some issue at play. It may be in relation to the information being provided, but I would be very happy to have a look at it and come back to the Deputy.
John Deasy: As far as the different payments and schemes are concerned, where are the largest backlogs and the worst delays from the time someone makes an application to payment?
Niamh O'Donoghue: I can let the Deputy know that in one moment. In terms of average times, the latest processing figures we have indicate that some of the most significant areas are widow's contributory pension and child benefit where the child benefit is being claimed under EU regulations.
John Deasy: How long is it for widows?
Niamh O'Donoghue: That is showing at 28 weeks currently. There can be issues in regard to that, ranging from people not completing forms correctly, not responding to requests for further information, not providing all the detail we ask for and, particularly in the context of the illness payment, not giving us sufficient medical information that allows for a decision.
John Deasy: A person has to wait six or seven months for widow's contributory-----
Niamh O'Donoghue: Yes, but as I said, that is an outlier. It can be as much to do with the circumstances of the particular scheme.
John Deasy: Fair enough. Every application has its own peculiarities in many respects. Looking for financial or medical records can get very complicated. Has the Department had any success in improving the wait times when it comes to widows? Is it getting worse or better?
Niamh O'Donoghue: That is one that is currently flagging as a problem area, so we will be looking at that. In all the other scheme areas where we have problems we have made significant improvements. That has been the trend over the past number of years.
Mr. Seamus McCarthy: Can I make a comment on that, and it might be something the committee could look at? There is a notification for people. It is a widow's contributory pension, so it occurs after an event when somebody becomes a widow.
Niamh O'Donoghue: Yes.
Seamus McCarthy [Comptroller and Auditor General]: There is not any conversion from other schemes, or does that arise in many of those cases?
Niamh O'Donoghue: It can arise. Obviously, if the person who died was a recipient of a primary social welfare payment, once we are aware that the person has died we would then initiate contact with the spouse for application, but I can have a look at that specifically and furnish information showing the reason for that.
It is flagging as a problem at the moment. It would not previously have flagged as a problem so there is obviously a particular difficulty at the moment for us there.
PAC Meeting | May 14, 2015
Chairman [John McGuinness TD]: We were dealing with correspondence from the HSE which is a follow-up from the 23 April 2015 meeting. There are a number of other outstanding matters that the executive has to deal with but this correspondence answers some of the questions raised.
In the context of the HSE reflecting on our meeting I suggest that we forward a transcript of that meeting to the Garda Commissioner in light of the issues raised separately, relating to the home... and other matters. We are told the Garda is investigating. It is extremely lax on the part of the HSE and the Garda that this matter is not being dealt with in a more open way.
On one side there are approximately 30 young adults who have been affected by what happened there, but I get no sense from the HSE that there is an urgency about this or any desire to resolve it.
The position is likewise in respect of the investigation into the procurement process. That has not been rightly explained to us either. Perhaps the transcript may be of help to the Garda.
A protected disclosure was made, under legislation, on more than one occasion from more than one person, but nothing has happened since. The Garda Commissioner needs to understand that we have had our hearing, that protected disclosures have been made and that we would have expected a far greater urgency as a result of that meeting.
The care of these 30 or more individuals is a matter of concern to us. Given all the reports undertaken into incidents within the HSE one wonders whether the executive is fit for purpose at all. Perhaps the transcripts should also go to the Minister out of concern for the issues raised.
Deputy John Deasy: There is a good deal in this. As you have said, one of the issues the committee dealt with has to do with procurement and tendering. The Comptroller and Auditor General has carried out reports on the matter.
Across the board when it comes to the HSE it is clear that the executive is a bad actor, frankly, when it comes to tendering within public procurement guidelines. When it comes to the issue that you have just raised and what the committee has dealt with in recent weeks, the appropriateness of hiring former HSE employees to do reports for the HSE on issues as disturbing as those we have been dealing with is questionable.
When Mr. O'Brien was before the committee and questioned with regard to the process whereby the tender was awarded, he pointed to some regulations that needed to be followed. When he was questioned about whether they had been followed in that particular case and for the particular contract in question, it was clear that they had not because the procurement office said it had no communication with the HSE on the matter.
In hindsight the answer he gave was disingenuous. We have done a great deal of work when it comes to this issue as well as the tendering of contracts by the HSE and the potential conflicts of interest that arise when former employees of the HSE get these contracts.
We should put a formal proposal from the committee to the Minister to change this arrangement. Most of the work has already been done by the committee. It would be simple to do. The issues we have raised in the committee have not been raised in any other forum in the Oireachtas and therefore it is reasonable for us to do that.
. . . The Comptroller and Auditor General has done much work on procurement and HSE tendering. I will preface my comments by saying that one would wonder about value for money as far as the taxpayer is concerned when it comes to a contract being given to a former employee and individuals who were known within the organisation and who had been there for decades but it is far beyond that, frankly. The conflicts of interest that arise in these issues are incredibly disturbing and far supersede that consideration.
The premise is in place. You have done a great deal of work in this area, Chairman, as has the Comptroller and Auditor General. Perhaps you could feed into any report that the committee might do. That would be useful. Rather than simply point out the position, we should come up with a solution.
I think we should come up with a clear determination, as a committee, about what should not happen when it comes to the issuing of a contract by the HSE. This should include an absolute bar on individuals who are former employees of the HSE getting these contracts. I believe that step will need to be considered by the Minister and we should make that recommendation and consideration.
Mr. Seamus McCarthy [C&AG]: The only comment I would make in that regard is that there may be a problem in law in respect of making a restriction completely debaring people who have legitimately set up in business from tendering for work.
The complication in this case was that it was people, who had previously worked for or who had been previously engaged with the HSE, who were appointed without any competition.
Deputy John Deasy: If the Government is prepared to pass a law that prevents politicians or former politicians lobbying their former colleagues, I do not see a problem with the Government passing a law preventing former employees of the HSE getting contracts as it applies to cases like these. Anything can be achieved if enough thought and consideration is given to it. I understand Mr. McCarthy's point, but if the will is there and the potential conflicts are understood well enough by the Department, it can probably do that too.
Seamus McCarthy: I do not want to argue for or against the proposition the Deputy is making because it comes into a policy area. I am just saying there may be a restriction in terms of the contestability of the issue and excluding certain categories. However, it is a matter that can be looked into.
Chairman: We can bring forward a draft report that we will present to the Minister in a short format. We can then discuss it and members can decide on recommendations, such as the one Deputy Deasy is putting forward.
It is clear, in the context of all these reports, that there is a crisis in the management of the HSE. No political system or Minister could manage the HSE the way it is. It will appear before the Joint Committee on Health and Children this morning.
The stonewalling that goes on when one is trying to sort out a problem is just incredible. It is unacceptable and somebody will have to do something about it. My concern is that while we are discussing this and while we had our meeting with the HSE and are now going to bring forward this short report with recommendations, there are individuals out there who are suffering because of it and nobody seems to mind.
The system seems to be conditioned to a high level of acceptance of this stuff going on. It is not acceptable. That is what members are saying in the context of trying to achieve balance and a change. Somebody has to change the system in the interest of justice and fair play. It is all one side at the moment and no one seems to be paying a bit of notice to any of the public hearings that are going on.
That is not acceptable. We will have this short report as soon as possible. We will put it before the members and then we can decide what is necessary.
PAC Meeting | May 14, 2015
Chairman: [John McGuinness TD]: . . . a number of reports were given to us by a whistleblower relating to Cork Insitute of Technology. I know this is a different matter but it is still part of the third level sector.
Then there were reports on Waterford Institute of Technology, there were problems in regard to the amalgamation of Carlow and Waterford ITs and Tralee and Cork ITs. Within what was said at those meetings, there were serious issues which have not been addressed in an adequate way.
We should not just remind the Department of Education and Skills but, if necessary, bring forward the date of our hearing with it if we do not get the appropriate replies. Extremely serious allegations were made but it seems to me that the Department has not taken them seriously.
In the context of the amalgamation of institutes at both Carlow and Waterford and Tralee and Cork, significant moneys are involved and the Department has not clarified the matter yet the amalgamations continue apace.
Again, it is a question of having the information before us, being able to make a decision and not allowing a process to continue that will further cloud the financial circumstances of the colleges involved so that we will never get to the end of the matter.
We should express our concern directly to the Department about these matters that have been raised. If we do not receive a comprehensive reply to the queries raised by members and whistleblowers, then we should have an earlier than planned meeting with the Department, the Higher Education Authority and representatives from the different colleges concerned.
Deputies could deal with the issues raised in the correspondence supplied by the Department at that meeting. The allegations are far too serious for this committee to ignore.
Deputy John Deasy: We should wait until Mr. Michael Kelly finishes his report. It might be more useful to have him in when we meet the HEA and the Department. I have spoken to him and he has agreed to meet the Committee of Public Accounts once he has finalised his report.
My understanding is that he is taking a look at some of the issues you raised as well. He has had to wait until the two governing bodies in Waterford and Carlow met and until they have been put together before he issues his report.
There has been a delay because of that and I believe that is reasonable. However, if we are asking in the Higher Education Authority with the Department of Education and Skills then I believe it would be useful to bring him in and discuss his report and findings as well, because he is examining the issues you have raised.
Chairman [John McGuinness]: I have no difficulty with that, Deputy Deasy, save to say that what Deputy Costello has raised and what I have raised are almost separate from the particular issue of Waterford and Carlow ITs.
Deputy John Deasy: Yes, that's grand.
Chairman: It is a broader issue of governance and reporting between the colleges and the Department, and, in turn, reporting between the Department, the HEA and the Committee of Public Accounts. It is obvious that we are not getting the information. It is clear to me that there is almost an attempt not to give us full information, and that is not acceptable.
Deputy John Deasy: That is fair enough. He is probably the one person who has been tasked with independently reviewing the governance matters that you are talking about. Therefore, if we are going to have a meeting on the matter it might be useful to have him before the committee to talk about his findings when it comes to the governance and the stream of information between the Department, the Committee of Public Accounts and the HEA.
PAC Meeting: April 2, 2015
Deputy John Deasy: The essential part of this for the past ten years has been the money we put into Irish Aid and the systems within the Vietnamese Government's structures of accounting for that. We felt comfortable about its practices but that will be part of the report we do and the findings.
It probably should be mentioned that a director from the Comptroller and Auditor General's office accompanied us to go through the controls within the Vietnamese Government's systems. That will be part of the report we compile. It is important because this involves a great deal of money. That should be included as well...
I will develop the trade element... particularly the export of dairy products. The current value of Irish dairy exports is €1.6 billion, but the market for liquid milk and milk ingredient products in Vietnam is worth $6 billion.
That market has not been tapped into by Ireland in any great shape or form. It became an inescapable fact that much work needs to be done in this area. A lot has happened since we returned home.
The draft report has been compiled and will issue to members in due course. We came to the conclusion that we need more personnel from Bord Bia and Enterprise Ireland on the ground in Vietnam.
With the ending of milk quotas and the free trade agreement being hammered out between the European Commission and the Vietnamese, this is timely. We have had conversations with the Minister for Agriculture, Food and the Marine since our return.
He has spoken to the Department of Public Expenditure and Reform and agreement has been reached to fund additional personnel in emerging markets.
The Minister has agreed in principle to use some of that money to fund an individual from Bord Bia in Vietnam to promote the food and dairy industries specifically. From that standpoint, the work we did with the embassy will bear some fruit.
It became inescapable after being there just for a few days the kind of market that has begun to open in Vietnam, with a lower middle class income range emerging there.
It is important we spread our risk effectively when it comes to the dairy industry outside China. The free trade agreement that will be hammered out between the European Commission and Vietnam does not just affect Vietnam but also acts as a gateway to the Association of South East Asian Nations, ASEAN, countries, with a population of approximately 630 million people.
The Kerry Group has been working in Vietnam and will make an announcement when it comes to a very tiny slice of the milk industry there. It has a collaboration with an indigenous company and that is really the first kind of enterprise that has taken hold in Vietnam with an Irish-owned company.
Bord Bia's presence is in Shanghai in China and the comment or criticism from people we met in business circles dealing with food is that all our bets seem to be placed in China.
As a result of what is happening in south-east Asia, the idea is that we need to create a presence outside China. In many respects, Vietnam is the engine in south-east Asia and those people believe strongly that the presence should be in Vietnam.
There is also an issue with regard to where the embassy is located. The commercial hub of Vietnam is Saigon or Ho Chi Minh City and not Hanoi. That is also significant.
There is some precedent in the agricultural sector. The pork market was opened and exports began in 2014. Work has been done within the Department in that regard.
When it comes to the initial step, the timing is right for that funding of an individual or individuals in Vietnam. As we learned, the most significant groundwork for contacts within official and government circles has been done over the past ten years.
It has taken that long for our officials in the embassy to create a very substantial and solid contact network within government circles. The timing is right for these kinds of initiatives because of contacts made over the past ten years.
I will not be mealy-mouthed about the fact that we have helped programmes through Irish Aid over the past ten years and, as a result, this has allowed us access to government circles.
That has proved very productive with respect to government officials and politicians understanding Ireland a little better. We should capitalise on that, and there is a need for us to use those contacts in an area like food and dairy.
That is the conclusion everyone reached, including us, the embassy and the Department of Foreign Affairs and Trade.
Since our return, that issue has been solidified, and I believe it will result in additional personnel from Bord Bia being funded to go to Vietnam.
For that reason, it was a positive trip.
Chairman: I welcome the report. I will ask the clerk to change the foreword to reflect the fact that Deputy Deasy and others contributed in the way they did. I ask that we do some form of press presentation. We can send out a press release and flag the success of the delegation and what has transpired since it returned.
In light of the fact we give €12.25 million in aid, it is important for us to have the right structures to monitor that spend. As has been proven in Vietnam, the structures are there and are being used by other countries which are delivering aid in Vietnam.
From a trade perspective, I cannot agree more with Deputies Deasy and Costello in that having a presence in the country is very important. It can take many years for a business to build a relationship with a partner in parts of Asia and that requires a lot of investment.
The Government should invest, first and foremost, and put its foot forward because having a presence in Vietnam is essential. This is especially relevant when we consider the Chinese economy, which has many advance factories built in Vietnam.
The Chinese are looking at that market and their presence there. All that is based on the cost of labour. It is important, therefore, for us to be in the middle of that economic activity.
Having people on the ground means they might look at the markets other European countries are exploiting such as Taiwan. We have raised this previously with various Departments that have appeared before us.
I am delighted the Deputy managed to visit some schools and industry and that he met some project leaders on the ground, which was very important. As was the case in other visits, time was taken to look at the disability and research sectors.
I support Deputy Costello's view on trade missions. It is important we have a full trade mission to Vietnam. I thank Deputy Deasy and the other members of the delegation for their work there and their work since they returned. We should continue to highlight the aid programme and the strong possibilities for trade as we do our work.
PAC Meeting | March 26, 2015
Chairman (Deputy John McGuinness): No. 3B.9 is correspondence, dated Wednesday, 11 March 2015, from Mr. Aidan O’Driscoll, Secretary General, Department of Agriculture, Food and the Marine, concerning vacant properties at fishery harbour centres.
We are now in a position to report on the fishery harbour centres... With regard to the individuals in business whom we met at Howth there are significant questions regarding a number of matters that we need to deal with in the context of our report.
While that may be the response of the Department it certainly falls way short of what is required with regard to the response that the business people in that locality are asking for.
From looking at the different sites there the response falls far short of what a commercial operator might do in terms of the development of Howth.
There are lots of issues still to be dealt with and we can deal with these issues in the context of the report and raise the fact that there are many other issues at ports around the country of which we are aware... The State has a lot to learn from the commercial world which it seems to continue to ignore.
Members will have input in the report as a result of our visit that day. I ask that we would pay particular attention to it because it is probably the best example I have seen to date of poor practice and poor commercial insights or poor commercial knowledge on the part of the State.
Deputy John Deasy: I agree with the Chairman in so far as Howth is concerned and it is hard not to agree. The situation might not be as bad with regard to the other State ports.
I did some checking with regard to Dunmore East where there are some vacant buildings and they are looking for leaseholds. There is a difference of opinion among people who actually use the port as to the utilisation of certain buildings within the port but certainly it would not be as bad as Howth.
I am not familiar with the situation in the other four State ports but I spoke to the Minister about this after we had visited Howth. I think it is fair to say that he has an open mind with regard to what the committee might report on.
My question is as to where we are going with this report. Are we going to suggest that another State agency be involved in these properties to assist the Department when it comes to the utilisation of the vacant buildings?
Sometimes if one takes an adversarial attitude with the Department, one will not get anywhere, but there is probably an opportunity to get something done here. That is the attitude that was registered. What direction does the committee plan to take with regard to the buildings?
Deputy Joe Costello: ...Five properties in Howth not currently in use are subject to legal, operational or planning considerations. I suggest that we request a breakdown of the category of consideration, whether legal, operational or planning and the nature of the difficulty. Such further material would be very useful before we make recommendations as to how to move forward.
Chairman: In reply to Deputy Deasy's question, we visited Howth and we have had a hearing with the Department. We will set out what we found and we will make recommendations arising from the input of members. As with other reports we will set out our findings followed by our recommendations. We will have a draft report in a couple of weeks with some recommendations. The members can then decide on the tone and extent of the report.
Deputy John Deasy: From my cursory conversations with the Minister, Deputy Coveney, I think there is probably a willingness to deal with it. There is probably an agreement that, in many cases, some of these buildings are vacant for too long and the processes involved are too lengthy. If we were to collaborate with the Department I think some progress would be made.
Chairman: The same applies to Killybegs. If there was a collaborative effort and a willingness to co-operate, there might not be the conflicts between the Department and individuals.
Perhaps the Minister should reconsider the action being taken by the Department in relation to that particular case. We should make that suggestion to the Minister, in view of his willingness, as mentioned by Deputy Deasy. I think we should test his willingness.
PAC Meeting | March 26, 2015
Chairman: I think we should discuss No. 4, lapses in controls at Waterford Institute of Technology, WIT. The issues raised there had to do also with Carlow, Cork and Tralee. We should put it on the agenda for our next meeting.
Deputy John Deasy: There has been significant movement in regard to Carlow, Waterford, the HEA and education. I understand the President of Waterford IT has left and is now working with the Higher Education Authority.
Mr. Michael Kelly who is carrying out a report on the merger between Waterford and Carlow ITs is probably finalising that work. Would it be useful to invite Mr. Kelly to present to committee after he makes his report?
Chairman: I understand the report has to go to the Minister before it is available to us. We have already agreed to bring back the Department and the HEA and we can ask them to invite in Mr. Kelly to discuss his report.
Then, we could perhaps bring into that discussion the report here relating to the WIT and the reports on the other institutes. We are still awaiting the report from the Department on the Vocational Education Committees, which is before the Minister.
Deputy John Deasy: It would be useful to have Mr. Kelly come before us. I believe the hearing we had with the HEA and the Department of Education and Skills woke some people up and that some issues were resolved after that hearing.
We should continue with that to bring this to a conclusion, if possible. Having Mr. Kelly appear would be useful in that regard.
Chairman: We do not have a date set for that meeting. If we can find out when the report will be available after the Minister completes her examination of it, we can set an early date for that hearing.
PAC Meeting | March 5, 2015
Deputy John Deasy: I refer to the note we received in regard to a different issue. Does the Chairman want to bring it up now or will he wait?
Chairman (Deputy John McGuinness): I will bring it up in the context of this issue. The documents were released yesterday. They could have been released in error or for any reason but the history of the HSE and the Committee of Public Accounts has been that we have often had hearings and while people from the HSE have been with us, documents would be released to the newspapers.
There is more than one example of that. Now that this issue is in the public domain, we need to understand why it happened. Some Senators and other people had this document yesterday but we still have not been provided with it out of courtesy in order that we would know what is in it. Luckily enough, we were meeting today and the Comptroller and Auditor General explained it.
I want to tie what has happened into a note members received this morning. Members received the note this morning simply because a big document was presented to me and I gave it to the clerk, about which I informed the committee a number of weeks ago. This document shows where contracts were awarded without any tender.
They were awarded to former employees of the HSE who are now acting outside of the HSE in an independent business. In more than one instance, these contracts were awarded without a competitive tender and in one case at least a report was prepared at a cost of €98,374.23. That report was reviewed by another company at a cost of €58,216.41 to date. This is all happening between HSE and companies outside of the HSE which happen to employ former employees of the HSE.
It is alleged in the document that in one instance the Health Service Executive is recommending former staff to section 39 bodies where investigations are needed, at a cost of €1,000 per day. In light of the information that emerged in the public domain yesterday and the allegations made in the note circulated by the clerk to the committee, which is a summary of the information in the larger document, we should have representatives of the HSE come before the committee sooner rather than later.
Deputy John Deasy: The most worrying element of this information is the potential conflict of interest that arises. Having recently dealt with two or three cases involving sexual or physical abuse of people in care, I find it very worrying that someone who may be contracted by the HSE could potentially have a conflict of interest.
One of the tasks of the committee will be to ascertain how widespread is the practice of not tendering contracts and employing former HSE staff to do various jobs and carry out investigations.
Chairman: On the basis of members’ comments, I will ask the representatives of the HSE to appear before the committee sooner rather than later. The clerk will contact the HSE to arrange a meeting. It may be necessary to arrange it outside the dates set out in our work programme.
Deputy John Deasy: How many of the contracts awarded by the HSE in the past ten years went to former staff? That is the simple question we should put to the HSE in the meantime. We could then take the matter from there. That is an easy question that can be answered immediately.
Chairman: We will proceed on the basis that the sooner we can have representatives of the HSE before us, the better.
Deputy John Deasy: We need to find out if certain contracts were tendered.
PAC Meeting | March 5, 2015
Clerk to the Committee: Arising from Chairman's request, I contacted the London office [of HSBC] and I got a phone call late yesterday evening when I came back from Belfast to say that the reason the banks' representatives appeared before the UK Public Accounts Committee is that its headquarters is in the UK.
It did not mean any disrespect to this committee but it does not have any information. That is the gist of the information they gave me. The letter they sent says they are not in possession of records with regard to this matter.
Chairman (Deputy John McGuinness): Is this from the Dublin office?
Clerk to the Committee: Yes, and the bank is headquartered in London. That is why the bank attended the Public Accounts Committee in London.
Deputy John Deasy: That is a flimsy excuse to give for not coming in. From what the Chairman said, we can take up the offer to attend. Are they willing to come in?
Chairman: The letter says that they are willing and that they would send representatives but they do not know how helpful their representatives could be. If the individual in London was helpful to the Public Accounts Committee in the UK, surely they can provide information via him that is of interest here.
If it is the wish of members, we can get back to HSBC in Dublin and in the headquarters and suggest they send to the meeting of the PAC someone who has some briefing material.
Deputy John Deasy: We should ask them in and take them up on the offer to come in. Let us not beat around the bush. We can ask them questions correctly. If the representative comes back and says that he does not have the information, we will make our minds up then.
Chairman: They may be separate entities within HSBC, but before getting into that, we should write to Mr. Duffy again and to the individual who appeared before the Public Accounts Committee in the UK and ask if someone can be briefed who can assist us with our efforts with the Revenue Commissioners. That would be helpful. A representative should be here.
Chairman: As there is no other business, we will agree our meeting for Thursday, 12 March at which we will have presentations from the Revenue Commissioners and HSBC. I will ask the clerk to report to committee members on the availability of the delegate from HSBC and on what we can expect, so that members are briefed before the meeting.
...I will ask the clerk to ensure members are aware of the response from the HSBC and the extent of the information the delegate will have, so that we are clear in regard to what information can be gleaned through questions.
In regard to the HSE, we should get representatives in as soon as possible. If that is to happen next week, we will sit on Tuesday. The matter is in the public domain and because the HSE caused it to happen, we need an explanation. They will be told we are available to meet them on Tuesday or Wednesday.