€14bn Apple tax fund could lose €70m this year

The escrow account in which the €14bn Apple fines are being held is set to lose €70m this year because of negative interest rates, the Comptroller and Auditor General (C&AG) has warned.

€14bn Apple tax fund could lose €70m this year

The escrow account in which the €14bn Apple fines are being held is set to lose €70m this year because of negative interest rates, the Comptroller and Auditor General (C&AG) has warned.

Seamus McCarthy, in his report, said the National Treasury Management Agency estimates that in the current negative interest rate environment, the escrow fund could decline by 0.5% per annum. “On a €14bn fund, this would amount to a loss of c. €70m per annum,” states the report.

The C&AG said the performance of the escrow fund will be determined by the prevailing interest rate environment and the asset credit quality over the duration of the escrow fund, which is currently unknown as it is awaiting the verdict of the European Courts.

The collection of the alleged State aid commenced in May 2018 with the first of a series of 12 payments to the escrow fund. The final payment was received in September 2018. The lodgements totalled €14.285bn.

Meanwhile, the public accounts committee (PAC) is to grill the OPW for spending more than three times its budget every year on maintenance and minor building works.

A measured-term maintenance contract for OPW buildings was awarded on the basis that it would cost €3m a year, but a total of €39.4m was spent between 2015 and 2018 — an average of €10m a year.

The PAC will now be fast-tracking an OPW appearance as the report said spending under the contract for minor works and maintenance on buildings in the Dublin area needs “further examination”.

The C&AG found that there were no periodic comparisons carried out between actual expenditure and the estimated value. Six projects went over the €500,000 limit under the contract and instead ended up costing between €600,000 to €2.5m.

The C&AG’s report also finds that:

  • The €41bn public money pumped into Ireland’s banks during the worst days of the economic crash risks never being fully recovered;
  • The Department of Education paid €4m, or nearly 25%, more to the Rehab Group for a site for schools in Sandymount, Dublin 4, than the amount set out in an independent valuation report;
  • The Government could be forced to pay out an additional €100m in fines as it struggles to meet its environmental targets. More than €120m has already been spent on carbon credits, with the country now facing a bill of up to €14m to cover further shortfalls on emissions targets by 2020;
  • Some 41% of claims for Disability Allowance, 35% of claims for Invalidity Pension, and 34% of applications for the Carer’s Allowance were rejected last year;
  • Settlement payouts by State bodies have increased to three times their corresponding amount in 2012, and were at €3.15bn by the end of 2018.

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