Teagasc is not able to access borrowing facilities which is bringing about challenges in the management of cashflow, the Public Accounts Committee heard on Thursday. Director of Teagasc Gerry Boyle presented the authority’s audited accounts to the committee, highlighting challenges in relation to funding working capital and public procurement requirements.
Working capital
In 2017 Teagasc – a registered charity – received €56m in non-grant-in-aid (GIA) income. It received a further €125m in GIA income and a further capital grant of €3.15m.
“In the absence of access to borrowing facilities, Teagasc faces significant challenges in funding its working capital requirements,” Gerry Boyle said. “This issue has become more acute in recent years as Teagasc’s non-GIA income has increased significantly.”
Teagasc is obliged to match expenditure with income. But in recent years the decision was made to build up a surplus in order to deal with its cashflow difficulties.
“The decision was taken to build up a capital reserve to be able to meet on a sustainable basis recurrent capital requirements. We managed to do this through prudent management,” Boyle said.
Labs at Johnstown Castle
Teagasc’s GIA earmarks funding for infrastructural purposes “which is only sufficient to partially cover maintenance costs and some minor capital works.
"More substantial infrastructural needs are funded as the opportunity arises through the sale of assets that are no longer programme priorities, or through once-off special capital grants from Government.”
Beef 2018 in Teagasc, Grange, Co Meath \ Philip Doyle
This reliance on sale of assets is not sustainable for the organisation, Boyle said. For example, he told the committee that the agency’s former campus in Kinsealy, Dublin had been valued at €12m without planning and is in the process of being sold.
Boyle hoped to convince the Department of Public Expenditure and Reform to retain the proceeds of the transaction to invest in Teagasc facilities. This would be “several years down the line”.
When asked about Teagasc’s next investment needs, Boyle said the most immediate one was to build a new suite of labs at Johnstown Castle in Co Wexford to conduct research on climate change, followed by the refurbishment of agricultural colleges, for which Teagasc gets no grants from the Department of Education.
Procurement
During the auditing process the Comptroller and Auditor General pointed out some procurement issues in Teagasc.
Gerry Boyle said that the issues were due to two factors:
Quotes being sought from a number of local suppliers rather than advertising through eTenders. Extension of existing contracts for services where the requirement was being reviewed, where there were delays in the implementation of the Office of Government Procurement process or where a similar service had already been procured from that supplier. In the first instance, Boyle said that he was confident that it did not impact value for money.
“While no breaches can be tolerated, it is noted that the breaches amounted to tender values of €1.35m out of a total of €42m or 3.2%,” he told the public accounts committee.
With reporting from Barry Cassidy and Thomas Hubert.
Read more
Beast from the East review ongoing at Greenfield Farm
Teagasc is not able to access borrowing facilities which is bringing about challenges in the management of cashflow, the Public Accounts Committee heard on Thursday. Director of Teagasc Gerry Boyle presented the authority’s audited accounts to the committee, highlighting challenges in relation to funding working capital and public procurement requirements.
Working capital
In 2017 Teagasc – a registered charity – received €56m in non-grant-in-aid (GIA) income. It received a further €125m in GIA income and a further capital grant of €3.15m.
“In the absence of access to borrowing facilities, Teagasc faces significant challenges in funding its working capital requirements,” Gerry Boyle said. “This issue has become more acute in recent years as Teagasc’s non-GIA income has increased significantly.”
Teagasc is obliged to match expenditure with income. But in recent years the decision was made to build up a surplus in order to deal with its cashflow difficulties.
“The decision was taken to build up a capital reserve to be able to meet on a sustainable basis recurrent capital requirements. We managed to do this through prudent management,” Boyle said.
Labs at Johnstown Castle
Teagasc’s GIA earmarks funding for infrastructural purposes “which is only sufficient to partially cover maintenance costs and some minor capital works.
"More substantial infrastructural needs are funded as the opportunity arises through the sale of assets that are no longer programme priorities, or through once-off special capital grants from Government.”
Beef 2018 in Teagasc, Grange, Co Meath \ Philip Doyle
This reliance on sale of assets is not sustainable for the organisation, Boyle said. For example, he told the committee that the agency’s former campus in Kinsealy, Dublin had been valued at €12m without planning and is in the process of being sold.
Boyle hoped to convince the Department of Public Expenditure and Reform to retain the proceeds of the transaction to invest in Teagasc facilities. This would be “several years down the line”.
When asked about Teagasc’s next investment needs, Boyle said the most immediate one was to build a new suite of labs at Johnstown Castle in Co Wexford to conduct research on climate change, followed by the refurbishment of agricultural colleges, for which Teagasc gets no grants from the Department of Education.
Procurement
During the auditing process the Comptroller and Auditor General pointed out some procurement issues in Teagasc.
Gerry Boyle said that the issues were due to two factors:
Quotes being sought from a number of local suppliers rather than advertising through eTenders. Extension of existing contracts for services where the requirement was being reviewed, where there were delays in the implementation of the Office of Government Procurement process or where a similar service had already been procured from that supplier. In the first instance, Boyle said that he was confident that it did not impact value for money.
“While no breaches can be tolerated, it is noted that the breaches amounted to tender values of €1.35m out of a total of €42m or 3.2%,” he told the public accounts committee.
With reporting from Barry Cassidy and Thomas Hubert.
Read more
Beast from the East review ongoing at Greenfield Farm
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