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AN COISTE UM CHUNTAIS PHOIBLÍCOMMITTEE OF PUBLIC ACCOUNTSDéardaoin 21 Aibreán 1994Thursday 21 April 1994The 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.NATIONAL LOTTERY REPORTChairman: We will now discuss the National Lottery Report. I ask the Comptroller and Auditor General to introduce his final report. Mr. McDonnell: At the end of 1993 the Committee asked me to carry out a detailed examination of Lottery grants paid out over recent years in order to establish whether the governing rules were being persistently applied across the board. At the end of November I gave an interim report to the Committee in relation to the examination in the Department of Health, which we had started at that stage. This report, which you have in front of you, reflects the position in the other Departments with responsibility for issuing a significant level of Lottery grants. It deals with the Department of Social Welfare, the Department of Education, the Department of the Environment and the Department of the Taoiseach. I remind you that responsibility in the Department of the Taoiseach has now passed to the Department of the Arts, Culture and the Gaeltacht. My examination revealed a high level of compliance with the instructions laid down in 1987 by the Department of Finance and with the administrative procedures drawn up by the Departments. A general reservation I have is that Departments could improve on follow up procedures to ensure grants were being used for the purposes for which they were given. In a small number of cases there were departures from established practice which are referred to in the report. However Departments generally did their business properly. I feel adoption of the Committee’s recommendations would make a significant contribution to improving control over the allocation and issue of Lottery grants and to the important process of following up on the use of those grants. Those recommendations, if implemented, would bring an extra dimension of transparency to the whole process. I would welcome that and I am sure the Committee would also. I refer to the draft recommendations which were prepared already. Chairman: I thank the Comptroller and Auditor General for his final report. The Committee will recall that we have already approved draft guidelines. We consulted the Comptroller and Auditor General’s Office and the Department of Finance and following these discussions made minor amendments to those guidelines. The Department of Finance has intimated by letter that they are prepared to accept those guidelines as soon as the Committee adopts its report on this matter. If members agree, I propose that we will put the formal report for adoption at next week’s meeting with the necessary preamble and the transcripts of our hearings on this matter. Is that agreed? Agreed. Deputy O’Malley: In relation to his investigation, could the Comptroller and Auditor General say if he became aware of Ministers in 1987 and 1988 in certain parts of the country offering cheques to sporting clubs, some of which rejected the offers on the grounds that the amount was not adequate and they could get a greater amount from another Minister? Mr. McDonnell: No, I did not discover that. Announcements and representations were made and the initiation of the grant process on some occasions was on the basis of representations but I did not come across specific occurrances as outlined by Deputy O’Malley. If it happened it may not have been documented. Chairman: Is it true to say that the report only dealt with 1992-93? Mr. McDonnell: No, it goes back further. Deputy Durkan: Has the method of application been cleared up at this stage? For example, is it possible to make a retrospective application? It would appear that was the case and not only were some applications retrospective but, as Deputy O’Malley said, some awards seem to have preceded the application, which is alarming. Mr. McDonnell: There was evidence of a certain casualness about applications. If the recommendations of the Committee are adopted that problem will be resolved because they would provide for formalising the process of application, evaluation, recommendation and decision by the Minister, in that sequence. The report did not go back to 1987 so incidents as mentioned by Deputy O’Malley would not have been covered. Deputy O’Malley: Is 1989 the earliest date mentioned? Mr. McDonnell: That is correct. Deputy O’Malley: The worst abuses had finished by 1989 because they had been exposed at that time, particularly in County Limerick. As the Comptroller and Auditor General said the practice described, which did take place, would of its nature not be likely to be recorded in writing. It was purely a verbal activity, apart from the cheque which was in writing. The beneficiary could be filled in as the occasion demanded. In some cases no application was received from some of the beneficiaries who were somewhat startled to have this munificence thrust upon them. Deputy Durkan: Has all evidence of such practices disappeared? Is there any current evidence to suggest that it may continue? I raise this matter because if one puts down a question in the House on a specific area on the National Lottery, one tends to receive a reply that it is repeats a question about Lottery funds for the Kanturk national development project or a similar scheme. Usually the matter mentioned in the reply has no relevance whatsoever and the question is not a repeat. It is a convenient way to avoid replying to the question. This worries me and it has always been a problem with Dáil questions about National Lottery funds and administration. The next reply will be that this is a matter for the National Lottery and the Minister has no responsibility to the House. Any issue on public moneys is answerable to the House at some stage and certainly to this Committee. Given that environment I worry about the possibility of a grey area. Is it possible to eliminate any doubts so there can be some transparency? The National Lottery is not for Governments, Ministers or anyone to use at their whim at election time or between elections. Deputy McCormack: To echo a point mentioned by other members, did the Comptroller and Auditor General in his investigations discover any cases of people who received cheques although they had not applied for them? Mr. McDonnell: The representations may have been made by persons other than the benefitting organisation in some cases. Deputy McCormack: I often made representations myself but I never got a cheque. Deputy Upton: Do not give up hope. Deputy McCormack: Is it possible to be more specific about this? I had some experience of this in my constituency, so did the Comptroller and Auditor General came across cases where cheques were given to people or associations who had not lodged applications? Mr. McDonnell: The application process was not as formalised as one would like. Accounting Officers also recognise that position. As to whether I came across instances where payments were made to organisations who did not make applications, as I said, the application was not necessarily made in the first instance by the organisation itself. Deputy McCormack: Will what we have done ensure that system will be corrected and that there is no possibility of such occurances happening again? I know from experience this did happen before. What have we done as a result of this investigation to ensure the rules are tightened up so this cannot happen again and applications will be dealt with by those who applied for them, not by other people who may have made representations on their behalf? Mr. McDonnell: This is dealt with in the report. For example, under education, it was noted that in late 1992 and 1993 a small number of new projects under the recreational facility scheme were approved for Lottery grant purposes apparently on the basis of representations only. It goes on to point out that in any case where a grant did issue, all the necessary terms and conditions were complied with prior to payment. In answer to Deputy McCormack, there were instances where the initiation of the process was on the basis of representations by persons who were not members of the benefiting organisations. As regards the second part of the Deputy’s question, I do not know if the draft recommendations have been circulated. Chairman: They are in the report. Mr. McDonnell: The Committee recommends that there should be a standard application form for National Lottery grants which, apart from the normal details as a minimum, would set out the purpose for which the grant is being sought, the number of people who would benefit from the work of the organisation seeking the grant, the sources of the organisation’s funding and which would separately identify sources of State funding to prevent possible overlap or duplication. There should be a structured process to ensure objectivity in evaluating competing applications for funding by reference to agreed predetermined criteria. I would welcome the adoption of the Committees recommendations. Deputy McCormack: I am also satisfied with the recommendations. If this standard application form becomes the correct way to apply for National Lottery funds, will representations other than the standard form be accepted? Mr. McDonnell: That is the intention, but it is not for me to implement it. If these recommendations are put in place, I hope Departments will adhere to them rigidly. Deputy O’Malley: Did the Comptroller and Auditor General say that the practice of grants being made from National Lottery funds on the strength of representations, presumably by a Deputy rather than on the basis of an application by the body concerned, happened again as recently as 1992-93? Mr. McDonnell: Yes. Representations would be considered and a Ministerial decision would be made as to whether or not to grant moneys. Deputy O’Malley: Would the beneficiaries fill in the form before or after they got the cheque? When the twin fairy godmothers of Limerick West were distributing largesse, the cheque came first. Does the form have to be filled before the cheque is handed over? Mr. McDonnell: Yes. The process began with representations, then an outline approval was given. However, documentation was subsequently formalised before a cheque was issued. Deputy O’Malley: One might call it ex post facto legitimisation. Deputy McCormack: From what the Comptroller and Auditor General has said, it would appear that cheques produced at functions in advance of applications were only camouflage cheques. Such cheques were produced at a function which I attended. Mr. McDonnell: I did not come across that. Deputy McCormack: The real cheque was probably issued after the process which the Comptroller and Auditor General spoke about was completed. Mr. McDonnell: That was clearly stated in my interim report on the Department of Health. However, in my final report on the Departments of Social Welfare, Education, the Environment and the Taoiseach, I did not come across any instances of that sort. Deputy McCormack: I came across instances where applications were produced at functions without the people being aware that they had made one. One must assume that these were counterfeit cheques. Mr. McDonnell: I did not come across that. As regards cases which have gone through the formal process, I do not know how the Department puts the cheque in the hands of the benefiting organisation, whether it posts or delivers it. Deputy O’Malley: If the Department delivers the cheque, it should be commended for saving the 32p on the stamp. Deputy Foley: We should be serious about this. I compliment the Comptroller and Auditor General on his report. The Comptroller and Auditor General points out that the day to day administration of National Lottery funds and recreational grant schemes, including the processing of all grant applications was, with the approval of the Department of Finance, delegated by the Department of the Environment to Local Authorities in 1989. All applications furnished since 1989 are submitted to Local Authorities first and the Local Authority subsequently sends this or its nominated projects to the Minister for approval and are later notified by the Department of the projects approved for grant and the amounts involved. In view of points made by members, the Comptroller and Auditor General said he found a high level of compliance with the terms of reference laid down in regard to National Lottery grants, is that correct? Mr. McDonnell: That is correct. Deputy McCormack: During earlier discussions on this and other matters, we pointed out that National Lottery grants should be handled by Local Authorities and that applications should be vetted by them. Local Authorities know what is happening on the ground and what would benefit an area. Local Authority members are representative of their community and they represent all shades of political opinion. Have we made progress in regard to the recommendation that the National Lottery funds should be administered through the Local Authorities? Chairman: That is not a matter for this Committee as it is not involved in policy. Our job is to ensure value for money, efficiency and effectiveness, that fraud does not occur and that due financial procedures are observed. The purpose of this report is to examine whether procedures have been adequate in the past, whether they have been observed and to ensure better procedures in the future. Deputy McCormack: That is why I am asking that question so as to ensure value for money, that fraud does not occur and that there will not be breaches in the future. Chairman: It is a policy matter. We recommended that an independent monitoring group be established with a remit of assessing on an ongoing basis if there is a fair and reasonable geographic and demographic delegation of National Lottery grants. Deputy McCormack: Local Authorities would be the group to do that, rather than setting up another group. Chairman: That is not the Committee’s function. Ministers make policy decisions and make choices. Our concern is to ensure that those choices are within proper financial frameworks and safeguards. Deputy McCormack: That is why the recommendation should be included. Chairman: The independent monitoring group is included. I propose that the Committee return next week with the report for Dáil Éireann.
23 March 1994 Ms Una Connolly Clerk Committee of Public Accounts Dear Ms Connolly, I am directed by the Comptroller and Auditor General to transmit herewith a copy of the Final Report on our examination of National Lottery grants. Yours sincerely,
John Purcell Director of Audit |
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