PAC may seek losses explanation by ‘wards of court’ fund

The committee responsible for almost €1.5 billion worth of funds held for the State's 18,500 wards of court may be invited before the Public Accounts Committee (PAC) to explain why investments on behalf of vulnerable adults and children have lost money.

The PAC discussed its draft report on the wards of court system on Thursday.

Independent TD Shane Ross asked that the investment committee, which is under the aegis of the Courts Service, be summoned to explain decisions to invest the money in high-risk equity funds rather than in cash or government bonds.

He cited one case - already highlighted by Sinn Féin TD Mary Lou McDonald when the Courts Service appeared before the committee last November - where a family had seen a sum of €510,000 fall to €280,000 in just two years.

Mr Ross said the investment performance of the fund had been “absolutely dismal” and that this was a very serious situation.

He also questioned some €1.83 million in fees paid in respect of the management of the funds.

“That’s an extraordinarily high figure. It may be justified but it doesn’t say what it’s for or why.”

Mr Ross said PAC should invite the investment committee to appear before it.

“We’ve got to ask what’s being done with the money and are we getting value for money out of it.”

Fine Gael TD John Deasy said it had been submitted to the committee that the investments had been placed in "the most conservative products".

For that reason, the question had to be asked about the success they have had.

The Courts Service holds about €1.47 billion under management in respect of 18,500 beneficiaries.

They include funds held on behalf of minors arising from court proceedings. Most wards of court are brought into wardship because of age-related deterioration in mental capacity. Others may have an intellectual disability or suffer from a psychiatric illness. A small number of wards of court cases arise from personal injury awards in the courts.

The investment committee is guided by an outside investment advisor, which advises on the overall investment strategy.

The Courts Service has told the committee that the average annual performance of the fund is 6.2 per cent and that this yield takes account of the fact that it lost value during the financial crisis. In 2008 alone, the fund fell in value by 17 per cent.

Courts Service chief executive Brendan Ryan told PAC in correspondence last December that the funds of all wards were managed "diligently and professionally".

The PAC’s draft report recommends that the ward of court fund should be subjected to independent assessment in respect of its financial performance and that it should be audited by the Comptroller and Auditor General. It says legislative amendments to allow for such audits should be brought forward by the Minister for Finance.

A spokesman for Inclusion Ireland, an umbrella body for organisations advocating on behalf of people with disabilities, also called for an independent audit of the fund by the Comptroller and Auditor General to investigate "serious financial losses incurred by families since 2008".

“Some families that have contacted us are facing the possibility of the ward’s funds being seriously depleted or even running out completely. This is unacceptable.

“Once the Assisted Decision-Making (Capacity) Bill commences, current wards of court will have their situation reviewed and be released from wardship within a three-year period. It is essential that their financial affairs and their funds are reviewed in advance of any discharge from the system so that appropriate planning for their futures can take place.”