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AN COISTE UM CHUNTAIS PHOIBLÍCOMMITTEE OF PUBLIC ACCOUNTSDéardaoin 9 Nollaig 1993Thursday 9 December 1993The Committee met at 11 a.m. MEMBERS PRESENT
DEPUTY JIM MITCHELL IN THE CHAIR Mr. P. L. McDonnell, (An tÁrd Reachtaire Cuntas agus Ciste) called and examined.Mr. Jim O’Farrell, Department of Finance, in attendance.APPROPRIATION ACCOUNTS 1992NATIONAL LOTTERYChairman: I want to move on to the National Lottery Interim Report by the Comptroller and Auditor General and I ask him to introduce the report. Mr. McDonnell: This interim report is in direct response to the Committee’s request at a meeting some weeks ago. That request arose out of concerns which were expressed by members of the Committee regarding the administration of the National Lottery grants. All members expressed the desire that there should be a transparency in the accountability process for National Lottery grants. This report, for the reasons stated at the beginning of the report itself, deals with the Department of Health area. What is said in the report speaks for itself. The Committee was anxious for a quick response and this is where we have reached so far. Chairman: The Committee on 9 September discussed the Department of Finance account on which there was a report on National Lottery funding generally and asked for a report within three months. I put it to the Committee that the worries expressed by the Committee are well justified in the light of this report. Our concern should now focus on putting things right to make sure there are proper checks and balances in the system so that National Lottery funds are as rigorously vetted and accounted for as any other funds. That is the first task of the Committee. Before we come to any direct conclusions, I will call the speakers. Deputy Broughan: In relation to the three specified cases, Walkinstown Community Centre, Walkinstown Association for Handicapped people and the Mother McAuley Centre, the former Minister John O’Connell would have made these disbursements and would have been responsible for this. Is that the year we are talking about? Chairman: Yes. Deputy Broughan: It states the examination revealed a number of cases. Does that indicate that these are a few examples or was there widespread abuses of this nature? In the three examples quoted here clearly it seems that the application was made, in effect, by the Minister. Deputy McDaid: On a point of order I thought we were discussing a different Vote today and that we have decided to put off the discussion on this matter until a further date. Deputy B. O’Keeffe: It is not fair to be handed an interim report and be expected to comment on it. I thought it would be an item on the agenda next week. Chairman: I am in the hands of the Committee. I felt that if we circulated this report in advance of the meeting it would be in the media before many Committee members would have seen it. In fairness to the Committee we decided to circulate it at the meeting and give members time to read it and decide what to do about it. What I proposed was that as members had the time to read it we would go into public session and make decisions about it. Deputy Broughan: It has entered the public domain now. The Comptroller and Auditor General has made qualified judgments and I would like some more information about what he is saying. He said these are examples. Was it widespread? Are there just these three examples of events which occurred if you like, over a significant period or was this the way the Department of Health’s Lottery money effectively was administered throughout this era. Do we know whether, for example, in the Department of Education in the same period, similar abuses or what seem to be abuses happened? Chairman: I wish to clarify the will of the Committee on this issue. It is important that the Committee is united in its understanding of its role which is to ensure fearlessly and impartially that proper controls are in place in relation to all aspects of public life. That is our job, nothing else. I wish to ensure that the Committee is ad idem on that and that nothing else confuses the picture. Deputy McDaid: In light of what you have said it is unfair to discuss one Department when we do not have interim reports from other Departments. I suggest the Comptroller and Auditor General should look at other questions and that we should discuss the entire matter at one time rather than discussing one matter now. Chairman: I do not in any way want to pre-empt discussion. The Comptroller and Auditor General has indicated in his report that the Department of Health suggested itself because it is the only major Department which does not as part of its Appropriation Accounts publish the detail of every grant. I therefore suggest to the Committee that we ask the Secretary of the Department of Health to come before us next week to ensure that proper controls are now in place and that we ask the Secretary of the Department of Finance to come before us to ensure that there are more effective controls in place throughout the Government departments than he suggested to us when he gave evidence on 9 September. Deputy Doherty: It is important that this Committee does not mistakenly attach blame to somebody who acted correctly. Procedures may not necessarily be as tight as they should be, but there can be an inference that because procedures were not as tight as they should be, an individual acted improperly. That inference is most improper and that should be stated. I agree with Dr. McDaid that if we are to discuss this matter we should ensure that we have all the facts available to us so that our proceedings here will not be interpreted as wronging any individual. Deputy Broughan: This is a very serious matter. In the case of Walkinstown Community Centre’s application, it appears that £25,000 of public money was approved without an application having come in. That is an extraordinarily serious state of affairs. You have a special responsibility, sir—— Deputy Rabbitte: Have you cleared up the procedural matter? Chairman: I want to put the procedural issue to the Committee first. I do not think the Committee should divide on these matters. Do I take it that the Committee is anxious to hold a brief preliminary discussion now and that we would hold a more substantial discussion next week, with the Secretary of the Department of Health and the Secretary of the Department of Finance? Deputy O’Keeffe: With respect, Chairman, a brief discussion will not be possible because of the number of members present. We are going to ask the Secretary of the Department to come in next week. The word “abuse” has been used here this morning about a grant. No abuse has been established yet. It would be appropriate that the Secretary of the relevant Department be here to answer questions that might arise from the interim report. It would be unfair to the Secretary of the Department of Health to go ahead with a discussion on matters relating to that Department if no officials of that Department are present. Deputy Rabbitte: I agree, it is important that we get the Secretary of the Department of Health before the Committee at the earliest opportunity, but as Deputy Broughan has said, the matter is in the public domain. I illustrate my point by reference to, for example, the second case before us in respect of the Walkinstown Association for Handicapped people. The letter of application to the Minister is dated 17 November, approximately a week before the election date. Although there is no record of ministerial approval on the file, the internal departmental direction to the Accountant to pay out the £25,000 is dated 13 November, four days before the letter of application. The payable order is dated 16 November—— Chairman: I will allow each member one brief contribution and I will then put to the procedural issue to the Committee, I suggest that we defer further discussion thereafter until we have the Secretary of the Department with us. One brief contribution each. Deputy Rabbitte: The payable order is dated 16 November which is one day before the application was made to the Minister. This payable order was subsequently cancelled in September of 1992 after the election and a new one issued on 3 December 1992. The only point I want to make—— Deputy McDaid: Deputy Rabbitte is making a Second Stage contribution. You are looking for the decision of the Committee, Chairman and I suggest you stick to that—— Deputy Rabbitte: I cannot agree with Deputy Doherty’s summary of what is before us as being perfectly proper even if procedures—— Deputy Doherty: I have not suggested that. It is bad enough to endanger people who are not present but it is most unpleasant to put those present in the position the Deputy is putting them in by such a suggestion. Chairman, I want to make this quite clear—— Chairman: I will allow you to come back—— Deputy Doherty: No, I want to make it clear now, Chairman, with your permission. I wish to ensure, and I concur with what Dr. McDaid has suggested, that we have all the facts here before we risk impugning anybody’s integrity. That is always a risk. We have had discussions on this matter in relation to other Departments and Secretaries who attended here in relation to other matters. I wish to ensure that we do not deal with this in a piecemeal fashion. We will have all the facts here and will get a result, whatever that may be, but we should not take it in a piecemeal fashion and release part of the information which could in the short term misrepresent the true situation. There are serious questions to be asked as a result of what we have here from the Comptroller and Auditor General and we should get the full facts before we begin to deal with this issue. Deputy Rabbitte: I wrote down the phrase that Deputy Doherty used. It was “no improper inference can be drawn”. There is a prima facie case to require the Secretary of the Department as Accounting Officer to come before this Committee because it seems to me that one can draw no other inference but that there was improper conduct by the Minister concerned, Dr. O’Connell, because—— Chairman: I would not like to arrive at that conclusion. Deputy Rabbitte: We have a page in front of us which says that £75,000 was paid out in the Minister’s constituency coming up to the general election date which did not comply with procedures. In some cases the only inference that one can draw is that the Minister caused the applications to be made—— Deputy O’Keeffe: Chairman, on a point of order, inferences are being drawn here by Members of this Committee. We are all concerned with the role of this Committee which is to ensure that public money is spent properly. We must also ensure that Members here are allowed the facility to discuss matters which come directly under the control of the relevant Department. It is quite unfair and the procedure is not right that individuals here should be engaged in a short discussion and should draw their own inferences when nobody from the Department is present. This is a procedural matter, we have to decide what procedure to adopt and if you decide that we will have a discussion here today, I have no problem with that. Chairman: No, I have a difficulty here because — I have a point of order from Deputy Durkan which I will take in a moment — it is very hard to distinguish between procedural contributions and substantive contributions. At the same time I am quite clear that we should make our procedural arrangements today while avoiding going in to the substantive issues. There may be passing references to substantive issues in addressing the procedural issues but we have to be seen to be fair and reasonable. We should send for the Secretaries of the Departments of Health and Finance and it may well be that we may wish to offer anybody whose behaviour might be impugned by the proceedings an opportunity to come before the Committee also. We should leave aside political considerations and concentrate on the financial control positions which are the remit of the Committee. The Committee must fearlessly and impartially pursue that regardless of who, or what, is involved. A point of order was raised. (Interruptions.) Deputy B O’Keeffe: If we must be satisfied with the way money is spent it behoves us to have the people present here who are charged with the responsibility of running their respective Departments properly. The Chairman mentioned procedural matters and substantive issues. With respect, the contributions from Deputies Broughan and Rabbitte dealt more with the substantive than with the procedural. My point of order is that we now decide whether we are going to postpone this matter until the Secretary of the Department is here, which in my view is the correct and proper approach, or whether we are going to have a discussion on it. Chairman: I have noted that point. Deputies Durkan and O’Malley were also offering points of order. Deputy Rabbitte: I was in the process of asking the Comptroller and Auditor General a question. Chairman: There are points of order which I have to deal with. Deputy Durkan: The point of order is that we should proceed with the discussion. It has been suggested that persons outside this Committee may be impugned in one way of another. We are dealing with the report of the Comptroller and Auditor General. To refuse to deal with it now would be a reflection on him. We have no option but to proceed with the full discussion. The point at issue is whether we believe what we have before us, from the Comptroller and Auditor General and whether that is substantive enough to oblige us to proceed with the discussion. What members say is a matter for themselves but if we refuse to proceed on the basis that we need Secretaries of Departments present, it may reflect on the Comptroller and Auditor General. We have the report in front of us. Deputy O’Malley: This report could only have been drawn up by the Comptroller and Auditor General after he had discussed the matter with the Accounting Officers and had got information from the relevant Departments. Perhaps the most disturbing feature of what is in this document, and it speaks for itself, is the last sentence where the Comptroller and Auditor General draws the Committee’s attention to this kind of activity, which he had described earlier as non-applications - money being paid without being applied for and no check being done by the Department on what it had been expended on - and finishes by saying that this kind of activity “may well be a general feature of the scheme as administered by the Department of Health”. If that is the case this Committee should make a recommendation now, at this meeting, that a freeze be put on all disbursements by the Department of Health in the light of that statement because the implication, and the Comptroller and Auditor General does not seek to make it any more than that, is that this may still be going on in one form or another. It should be the recommendation of this Committee that, whatever about other Departments, the Department of Health would now be precluded from allotting any further Lottery funds. Chairman: I am going to make a ruling on this very shortly. Mr. McDonnell: I want to clarify something Deputy O’Malley said. We are only dealing with the discretionary element of the Department of Health grants. Chairman: Seven million pounds. Mr. McDonnell: It is a part of the Department of Health Lottery allocation. Deputy Rabbitte: That was the very point I wanted to ask the Comptroller and Auditor General about. Mr. McDonnell: What is set out in the report are the facts as gleaned by us from the only papers which were made available. We examined all the papers that we got and had some discussions with officials of the Departments to ensure that we had all available papers. The Committee’s concern as expressed on 9 September was with the administrative process for dealing with Lottery grants and specifically with the process of applications and payment. The report addresses the question of applications. Deputy O’Malley raised an additional point which we have addressed in the report but I do not think the Committee referred to it the last day, and, that is, the use of funds for the purpose for which they were granted. We did find that there was a lack of follow up in that area. That is what we have done. We were dealing with the application process. The legislation simply says that the Lottery funds may be used for various purposes such as culture etc. and such other purposes as may be determined by the Government. The legislation does not say anything about applications so there is no legal framework for making applications. The law simply says what the Government decides. The administrative process is what the Committee was concerned with and specifically the applications and we have addressed the question of applications vis-á-vis payment. Chairman: There are two things that guide this. First, the Department of Finance circular on the grants and, very clearly in this case, the requirements of that circular have not been met. Second, there is a confidential circular, Number 2 of 1986 from the Department of Finance dealing with grants in aid and how they should be dealt with. Bearing in mind that it is a confidential internal document to Government, we will circulate copies of that to members before next week’s meeting on the basis that it must be treated confidentially. Deputy Foley: I just want to make the point that this has been going on for quite some time because in The Star of 10 September, there is a major headline with regard to this particular funding. We, as a Committee, must be seen to examine all aspects of financial accountability and, in view of the Comptroller and Auditor General’s report, it is imperative that we have the Secretary of the Department present before dealing further with this document. I hope we can get a consensus on that. I see nothing wrong with dealing with this because valid points were made by Deputy Rabbitte and others. We should devote next Thursday’s session to discussing this. Deputy Broughan: We have the Comptroller and Auditor General’s report and surely we should be able to question him. For example, I asked one question about the papers he referred to. If there was this haphazard system, are these the only examples or were there other examples? This Committee is the oldest committee of the Dáil and how come we never examined this subject when your famous brother, Deputy Gay Mitchell, was Chairman over the last four or five years. It does seem extraordinary. Deputy Rabbitte: We did not have any time we were so busy with other matters. Deputy Foley: It is unfair of the Deputy to say, “your famous brother”. You are more famous than he. Deputy Rabbitte: I would like to ask the Comptroller and Auditor General a question. In relation to the table on page 2, Lottery expenditure on Health, the last line refers to what are called discretionary grants by the Department. I cannot recall whether it was a Parliamentary Question, an Adjournment debate or Private Members Business where this issue was discussed in 1990, but I am almost sure that an answer was given at that time that this element of discretionary grants by the Department were virtually eliminated. Indeed, if one looks at 1990 it would seem to bear that out because there is only £330,000 in that category. The extraordinary thing is that it absolutely rockets to £7.7 million in the year of the general election. We will have to check the record of the House on this but the commitment—— Mr. B. O’Keeffe: On a point of information, it is only appropriate—— Mr. Rabbitte: Chairman, this is the second time. I did not interrupt—— Chairman: I am going to make a ruling because we are getting into the substantive issue—— Mr. Rabbitte: Of course we are!—— Chairman: I am now ruling—— Deputy O’Keeffe: Deputy Rabbitte also knows that £6 million was taken out of the allocation to the Department of the Environment and put into—— Chairman: Deputy O’Keeffe, I am ruling as follows—— Deputy Rabbitte: But can the Comptroller and Auditor General—— Chairman: I am sorry, I am now going to make a ruling on the matter. This is a draft about which I have consulted the Comptroller and Auditor General and which I put to the Committee that while the report before us is an interim one, it is already clear that the Committee’s concerns were well founded and it is vital that the system must be changed so that there cannot be a recurrence in the Department of Health, or in any other Department. We will await the Comptroller and Auditor General’s final report on the matter but the Committee wants to put down a marker of its intentions at this stage. What interests the Committee is that there should be a transparently equitable system in all Departments for the dispersal of Lottery grants. This is our duty. I propose to close this discussion by putting to the Committee that we summon the Secretary of the Department of Health and the Secretary of the Department of Finance before us next week, and that we would deal more comprehensively with the subject on that occasion. Deputy Rabbitte: Could I suggest we would also write to former Deputy John O’Connell and give him the opportunity, if he wishes, to present before the Committee—— Chairman: Yes. I have already said that and I think the Committee would agree. Agreed? Deputy O’Malley: Would it not be much better if the funds of the National Lottery were disbursed to genuine charities now rather than have them sucked into all of this? Deputy Rabbitte: Chairman, can the—— Chairman: No. Sorry, I am closing the discussion—— Deputy Rabbitte: Can the Comptroller and Auditor General clarify this point? Deputy O’Malley: If the St. Vincent de Paul, or people like that, had the money would it not be a great deal better than leaving it open to constant abuse? Chairman: I am closing the discussion. Sorry, we have made a decision and I am moving on—— Deputy Rabbitte: Could I suggest that the Committee visit the Centres and have a look for itself also? Chairman: That is something that we should consider. Well I had better say no more at the moment. There are more serious matters before us at the moment. Deputy Durkan: I have not spoken on the issue at all—— Chairman: No. I am sorry—— Deputy Durkan: Hold on. I am not speaking on it now either. It is a procedural point I would like to raise.—— Chairman: I am closing the discussion on the subject—— Deputy Durkan: Hold on. Hold on. On a procedural point—— Chairman: Deputy Durkan, you will have to allow—— Deputy Durkan: But this is entirely related to procedure. Virtually everybody in the room has made a speech on the issue and I refrained from doing so in order to come within your ruling. I am now suggesting to you—— Chairman: Hear the Chair out—— Mr. Durkan: You will not hear me out, Chairman. The point that I want to make is this. Do we—— Chairman: I am not allowing any further—— Deputy Durkan: Do we restrict ourselves entirely to the Department of Health or do we extend to all Departments? Chairman: We have already decided that the Secretary of the Department of Finance is coming here next week also and I am not allowing any further discussion. We will go on now—— Deputy Durkan: But Chairman, surely—— Chairman: Deputy Durkan, you are out of order—— Deputy Durkan: I presume that when we are discussing National Lottery funds we must extend to other Departments also. Surely, Chairman, you must give some indication on that one—— Deputy Rabbitte: By the time we finish this investigation we will all be candidates for the Mother McAuley Centre. |
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