Dáil Éireann Debate, Tuesday - 1 April 2025
847. Deputy Robert O'Donoghue asked the Minister for Further and Higher Education, Research, Innovation and Science whether subsidiary companies of universities and colleges also fall under his aegis; whether such entities are considered public sector bodies; whether public sector procurement and pay rules apply; and if he will make a statement on the matter. [15488/25]
View answerUniversities, Technological Universities (TUs) and Institutes of Technology (IoTs) have the ability to establish or hold shares in companies under their relevant sectoral legislation.
In the case of the Universities Act 1997 (as amended) and the Institutes of Technology Acts, 1992 – 2006 (as amended), Universities and IoT have the ability to establish subsidiaries without requiring Ministerial approval. Under the Technological Universities Act 2018, Ministerial approval is required for a TU to form or hold shares in companies formed by TUs within certain classes of activities.
There is no single definition of ‘public sector body’ under the Code of Practice for the Governance of State Bodies. Many of the criteria used to define such bodies do not apply to a subsidiary, therefore, we believe that they may not be considered as a public sector body. Governance, oversight and responsibility for such entities rest with the Governing Body of each Higher Education Institution (HEI).
If a subsidiary is subject to audit by the Comptroller and Auditor General (C&AG), they may be required to account to the Public Accounts Committee (PAC) in respect of those transactions, then the Chief Officer of a University, TU or IoT may be required to account to the PAC the regularity and propriety of its financial transactions recorded or required to be recorded in any book or other record of account subject to audit by the C&AG that the designated HEI is required to prepare.
The HEA requires an Annual Governance Statement (AGS) from each designated HEI, which includes confirmations from designated HEIs in respect of subsidiaries. This includes confirmations relating to:
• Governing Body oversight,
• Disclosures of any costs to the Exchequer, and
• Compliance with public sector procurement arising from financing provided to subsidiaries.
Additionally, as part of the Annual Oversight Agreement required by the HEA, each designated HEI must confirm that it operates in line with statutory requirements and the Code of Practice for the Governance of State Bodies, which extends to subsidiaries. The Chief Officer is also required to keep the HEA informed in a timely manner of any governance issues, concerns or major risks affecting the Institution.
Employees of HEI subsidiary companies are not considered to be public servants and are therefore not covered by public sector pay rules.
