DÁIL ÉIREANN AN COISTE UM CHUNTAIS PHOIBLÍ COMMITTEE OF PUBLIC ACCOUNTS Dé Máirt, 22 Meitheamh 2021 Tuesday, 22 June 2021 The Committee met at 9.30 a.m. MEMBERS PRESENT: Deputy Colm Burke, Deputy Paul McAuliffe, Deputy Matt Carthy, Deputy Imelda Munster, Deputy Cormac Devlin, Deputy Verona Murphy, Deputy Alan Dillon, Deputy Sean Sherlock. Deputy Neasa Hourigan, DEPUTY BRIAN STANLEY IN THE CHAIR. 1 PAC Mr. Seamus McCarthy (An tArd Reachtaire Cuntas agus Ciste) called and examined. Business of Committee Chairman: Apologies have been received from Deputy Catherine Murphy. We are joined remotely by the Comptroller and Auditor General, Mr. Seamus McCarthy, as a permanent wit- ness. I welcome everyone online to the meeting. Due to the current situation with Covid-19 only the clerk, the support staff and I are in the committee room. Members are attending re- motely from within the precincts of Leinster House. This is due to the constitutional require- ment that in order to participate in public meetings members must be physically present within the confines of the place the Parliament has chosen to sit, namely, Leinster House or the conven- tion centre. I will ask members to confirm their location before contributing to ensure they are adhering to this constitutional requirement. I ask those in attendance to mute themselves when not contributing so we do not pick up background noise or feedback. I also ask them to use the “raise hand” feature when they wish to contribute and cancel it when they have finished. As usual, I ask people to keep mobile phones on silent or switched off. Members are reminded of the provision in Standing Order 218 that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objective of such policies. Members are reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against any person outside the House or an official either by name or in such a way as to make him or her identifiable. The business before us today is the minutes of previous meetings, accounts and statements, correspondence, the draft work programme and any other business. The first business is the minutes of meetings of 1 and 3 June, which have been circulated to members. Does any mem- ber wish to raise a matter in relation to the minutes? Are the minutes agreed? Agreed. As usual, the minutes will be published on the committee’s web page. The next matter is accounts and financial statements. Four sets of financial statements and accounts were laid before the Dáil between 14 and 18 June. These are now appearing on screen. They are from Dundalk Institute of Technology, the Private Security Authority, the National Asset Management Agency and Údarás na Gaeltachta. The Comptroller and Auditor General issued a clear audit opinion in relation to the accounts but our attention is drawn by him to certain matters in the accounts of Dundalk Institute of Technology and Údarás na Gaeltachta. I will ask the Comptroller and Auditor General to address the accounts and statements before opening the floor to members. Mr. Seamus McCarthy: I want to point out to members that three of the sets of accounts relate to periods of account ending in 2019. These are the accounts for Dundalk Institute of Technology, the Private Security Authority and Údarás na Gaeltachta. A number of these are late in being presented. Following the committee’s procedure, it will probably want to follow up and get explanations on these. With regard to Dundalk Institute of Technology, the code of governance for institutes of technology requires a review by the institute’s governing authority of the system of control in the period of account. This usually has to be carried out at or near the end of the year, and up to three months after the end of the period of account is allowed. In Dundalk’s case this was not 2 22 JUNE 2021 carried out until six months after the end of the financial period. With regard to Údarás na Gaeltachta, I draw attention to a disclosure in the statement on internal control of weaknesses in the management and control of a capital project where the budget was €1.2 million for refurbishment of an industrial property but it ended up costing €3.5 million. The board of Údarás na Gaeltachta has put in place further measures to improve the controls over capital projects as a result. The accounts of the National Assets Management Agency are for 2020. The turnover in the year was €274 million and there is a clear audit opinion. Chairman: Mr. McCarthy mentioned with regard to Údarás na Gaeltachta that the matter he is concerned about relates to an industrial property. Where was the industrial property? The estimated cost for refurbishment, if I heard Mr. McCarthy correctly, was €1.2 million but sub- sequently it cost in the region of €3 million. Will Mr. McCarthy give us a little bit more detail about this? Mr. Seamus McCarthy: The detail is on pages 3 and 4 of the statement on internal control. The property is in the Meath Gaeltacht, in Ráth Chairn. The original budget for the project was €1.2 million but it ended up costing €3.5 million. The difficulty was that the board of Údarás na Gaeltachta was not aware of the escalation of costs so there were obvious control failures there. The project increased in scope and the board was not aware of it until quite late in the process. Chairman: As normal, we will write to Dundalk Institute of Technology regarding the late review of the internal control which, as the Comptroller and Auditor General outlined, should have happened within a three-month period. I will ask the clerk to write to Dundalk Institute of Technology regarding this. Are the accounting statements agreed? Agreed. They will be published as part of the min- utes. We have a standing agreement to write to the bodies that are late laying their accounts be- fore the Houses of the Oireachtas, in this case Dundalk Institute of Technology, as well as with regard to significant expenditure not compliant with procurement guidelines. Is that agreed? Agreed. Moving to correspondence, as agreed, correspondence that was not flagged for discussion for this meeting will continue to be dealt with in accordance with the proposed actions that have been circulated, and decisions taken by the committee on correspondence are recorded in the minutes of the committee’s meetings and published on the committee’s web page. The first four items of correspondence have been held over from previous private meetings for consideration in today’s public meeting. The first category of correspondence under which members have flagged items for discussion is correspondence from Accounting Officers and-or Ministers and follow-up to meetings of the Committee of Public Accounts. No. 606B is a comprehensive response from Mr. Adam O’Hare, director of finance and procurement, Beaumont Hospital, dated 21 May 2021. It provides information requested by the committee on non-compliant procurement. It is an example of the responses we receive to our requests for explanations for instances of significant expenditure not in compliance with procurement guidelines. Interestingly, Mr. O’Hare states: ... compliance with the public procurement regulations poses a greater challenge to the health sector than to most other public sector organisations. Historically, the over-arching 3 PAC remit to provide rapid clinical care, coupled with the absence of an effective centralised pur- chasing model managed by the HSE, have dictated that local purchases were occasionally made, of necessity, without recourse to formal tendering procedures. At our meeting of 1 June we decided to note and publish this. Deputy Carthy flagged the matter for discussion. Deputy Matt Carthy: We were meant to have the HSE before the committee before the summer break to discuss procurement, but it appears that will not now happen. In that context, it is worth highlighting that Beaumont appeared to lay the blame squarely on the shoulders of the HSE, stating that, aside from the remit to provide clinical care, there has historically been an “absence of an effective centralised purchasing model managed by the HSE”. That is a direct quote. Assuming that the HSE visit will now take place sometime in the autumn, it would be useful if we could clarify with Beaumont whether that absence is indeed historical, whether it has been addressed in full by health business services, HBS, or whether it considers the issue ongoing. It would be useful also if we could ask the other voluntary hospitals to present a simi- lar submission to get a broader overview ahead of that engagement with the HSE. Chairman: I will ask the Comptroller and Auditor General to come in on this. We have ad- dressed this issue of the absence of a centralised procurement model within the HSE a number of times. It is something that has been promised, and deadlines have been missed or, more cor- rectly, targets to have it in place have been pushed out further and further. Mr. Seamus McCarthy: Obviously, there has been a systemic problem, and no doubt there are challenges in the health sector in achieving competitive procurement. The table included at point 5 on page 2 of the submission is interesting in that it compares the five major teaching hospitals in Dublin and one can see that Beaumont Hospital and St. James’s Hospital have the highest level of tendering. They are publishing tenders to the market.