Sunday, November 7, 2010

Údarás na Gaeltachta at the Public Accounts Committee


When the Secretary-General of the Department of Community, Equality and Gaeltacht Affairs was recently examined at the Public Accounts Committee he responded to charges that the travel expenses regime at Údarás na Gaeltachta  read like ‘a mini FÁS’ by indicating  that the agency has provided him with assurances that ‘all spending was within rules’.

It is noteworthy that the board of the Údarás did not facilitate public understanding of this important examination by publishing their 2009 annual report on the web months beforehand.  However, a review of the annual reports from 2002 to 2008 suggests that there is ample scope for the Public Accounts Committee to ask some penetrating and insightful questions.

The Údarás has a staff of 107 persons, whose travel expenses between 2002 and 2008 were €7.17 million, an average of over €67,000 per employee – sufficient to cover the cost of 19 round-the-world business class airline tickets for each and every employee.

The Gaeltacht has a population of approximately 90,000 persons – about the same as the population of Co. Wexford.  This represents 5.4% of the 1.66 million people in the country, aged 3 and over, who can speak Irish.  There are 775,000 persons in the national workforce who can speak Irish.

The primary function of Údarás na Gaeltachta is enterprise development.  Total employment in grant-supported firms increased by 622 to 8,193 between 2002 and 2008.  But the total amount of grants approved during this period was €201.47 million and the total amount of grants paid was €122.8 million.  If tax credits rather than grants had been approved the recipient businesses would have been required to generate a profit in the region of €1.6 billion and sales perhaps ten times greater than this sum to qualify for this scale of incentive.

Total expenditure by Údarás na Gaeltachta in this 8-year period was €429.3 million, €19.1 million more than its income.  Expenditure between 2002 and 2006 exceeded income by €30.2 million, attributable mainly to a more aggressive depreciation policy of buildings from 2002.  Why does the Gaeltacht not enjoy the economic vitality of Qatar with such a massive investment inflow to a relatively small population? 

Údarás na Gaeltachta spent over €80.6 million on buildings in that 8-year period.  That expenditure presumably made some vendors very rich.  A total of 1.5 million was spent on ‘building projects that did not go ahead’. But if there was no growth in overall employment why was it necessary for the State to spend so much on construction, especially a time when the construction industry was expanding at breakneck speed and on auto-pilot, heading eventually to its own self-destruction and obliteration?  What proportion of this construction expenditure has yielded an economic return?  Who now bears the risk in respect of that part of the buildings portfolio which is fallow or redundant? 

If the provision of infrastructure was the primary argument for the provision of these buildings, how much was spent on broadband infrastructure given that enterprise is much more dependent on adequate broadband connectivity.  Fast broadband, Facebook, Twitter and Skype removes the disadvantage between the Gaeltacht and the rest of the universe, not empty buildings.

The Údarás is governed by a 20-member board of directors elected by plebiscite.  The cost of members’ fees and expenses of that board during these 7 years was €2.13 million but the PAC might like to examine the context and circumstances of how €8.2 million was paid in grants, or other transactions, to enterprises which employed board members or in which they were otherwise personally interested.  Annual Reports indicate that board members complied with Department of Finance guidelines covering situations of personal interest and did not receive documentation or participate in the board discussion relating to such matters.  But the nature of the these payments remains as watertight as the Third Secret of Fatima while there is some detail provided of grant payments to the general public.  The PAC might enquire with respect to grants, the extent to which recipients invested their personal resources, particularly their own cash, in grant supported projects and what sustainable value the State obtained for the peoples’ money and the peoples debt.   

The Committee might also consider how a 20-person board can possibly govern a 107 person organisation and function as coherent, focused and inspiring thought leaders to an 11-member management.  Should politicians be directly involved in disbursing public money?

85% of Ireland’s sovereign debt is held by foreigners.  The ‘men-in-red-braces’ reflect their verdict on Ireland’s economic leadership at all levels – including the A-team at the Department of Finance and its agencies, through level of credit available and the interest charged on sovereign debt.  Has the time arrived for a review of the State’s efforts to develop the Gaeltacht and is there an opportunity to try a fresh approach that is much less complex in organisational structure, fosters a more enlightened culture of accountability, is considerably less expensive; operates with simpler, but realistic, goals and where those who incur risk also bear the burden of delivery?

1 comment: