2026-05-21

100. Deputy Noel McCarthy asked the Minister for Rural and Community Development and the Gaeltacht the measures being taken by his Department to alleviate the burden of community services programme funding recipients being required to provide fully audited accounts on an annual basis. [38218/26]

Before I ask my question, I welcome to the Gallery pupils from St. Joseph's National School in Fermoy in my constituency and their teachers, Mr. Barry and Mr. Flynn.

They are all very welcome. I hope they enjoy their day in Dáil Éireann.

What measures is the Department taking to alleviate the burden of community services programme funding recipients being required to provide fully audited accounts on an annual basis? I ask the Minister to make a statement on the matter.

I welcome the students from Fermoy and their teachers. The summer holidays are ag teacht. Go n-éirí leo. I thank Deputy McCarthy for this very important question. The Minister, Deputy Calleary, and I are working together in the context of the community services programme, which supports 453 services nationally through 434 community organisations to provide local social, economic and environmental services through a social enterprise model, with a budget of around €59.4 million. The requirement placed on organisations to provide audited annual financial statements comes from the Department of public expenditure and reform, through Circular 13/2014 on the management of and accountability for grants from Exchequer funds. Certain qualifying small-sized companies, including social enterprises, may be exempted from the full extent of the provision of annual financial statements to the Companies Registration Office, CRO. They are, however, required to provide audited financial accounts to their funding bodies if they are in receipt of Exchequer funding, in line with the Department of public expenditure's circular. The detailed financial information contained in audited annual financial statements enables Pobal, which administers the programme on behalf of my Department, to monitor the financial performance of supported organisations, to review the notes to the audited accounts and to rely on the independent audit assurances provided. The abridged accounts acceptable under the CRO exemption would not contain this detailed information. In addition, the funding model introduced for the community services programme, CSP, in 2023 includes the level of retained income as one of the criteria used in determining the appropriate funding category to meet the funding needs of organisations. The abridged accounts that are permissible under the CRO exemption would not contain such necessary details. On foot of the Deputy's question and ongoing conversations with him, I am aware of the additional costs being incurred by organisations in fulfilling this requirement. I fully understand, given my previous role as a member of a GAA club, that the cost incurred has increased over recent years. The Minister and I have asked officials in our Department to consider whether there are options available to support small-sized organisations.

I thank the Minister of State for his response. The reason I tabled a question in the first instance is that it was recently brought to my attention by members of a local community group that has long received CSP funding that a significant portion of this funding is taken up with providing the fully audited accounts. There is a requirement on this group to provide fully audited accounts on an annual basis. This is a local community group with, to my knowledge, no financial issues or irregularities, yet it is being requested to spend thousands each year on ensuring its financial accounts are fully audited. In the particular case I am familiar with, the costs are between €6,000 and €7,000 out of a funding allocation of €27,000. This is excessive and runs counter to the spirit of the community services programme and the important work local community groups do for communities up and down the country. I ask the Minister of State if such a requirement exists and whether it applies to all successful CSP funding applicants. Listening to his statement, I agree that we should find something else to help this group, rather than them having to face an annual burden of spending between €6,000 and €7,000 of its allocation on this.

The Deputy is absolutely right. All of us, in particular, the Minister and I, accept there is a responsibility, in terms of accountability and transparency, on organisations in receipt of public money. In saying that, if putting an onus and a financial burden on small community groups and organisations that get grants to be compliant with accounting procedures results in them spending a significant proportion of their grant on meeting that requirement, it defies the purpose of the grant scheme and the funding support to these organisations. However, none of us want to see the wild west when it comes to irregularities. We will have people coming into the House today who will question us on financial responsibility and the roles and functions of directors of companies. I know there is a burden and we will come back to that.

I thank the Minister of State for his very positive response. I understand the reasons for audited accounts but if he could speak to the Department, I am sure we could find a system which would not place a burden on community groups that do great work. If it costs them €6,000 or €7,000 out of €27,000 of a grant to do this, the Minister of State will see that they are under financial pressure. I welcome the positive response. I thank the Minister and Minister of State for their co-operation and help and I look forward to a positive reply on the matter.

The Deputy may have heard the Minister and me speak this morning about the amount of money we are spending on community development and the importance of community. We are very much aware of the auditing requirement for moneys that are allocated and given and the need for transparency and accountability. In saying that, the Deputy has outlined, and we know from our own experiences, that some of the costs being incurred by organisations in fulfilling their duties and requirements do not make sense. The Minister and I have asked officials in the Department to examine options whereby we could support smaller CSP-funded organisations in this regard. We fully accept the responsibility and duties but we hope Pobal and our Department will engage with CSP-supported organisations, which have raised concerns in recent weeks.