Dormant Accounts Fund

Statement of Agency’s Responsibilities

The National Treasury Management Agency (“the Agency”) is required by the Dormant Accounts Act 2001 (as amended by the Unclaimed Life Assurance Policies Act 2003, the Dormant Accounts (Amendment) Act 2005 and the Dormant Accounts (Amendment) Act 2012) to prepare financial statements in respect of the operations of the Dormant Accounts Fund for each financial year.

In preparing those statements, the Agency:

• selects suitable accounting policies and then applies them consistently;
• makes judgements and estimates that are reasonable and prudent;
• prepares the financial statements on a going concern basis unless it is inappropriate to do so;
• discloses and explains any material departure from applicable accounting standards.

The Agency shall, in relation to the Dormant Accounts Fund, keep in a form that may be specified by the Minister for Finance all proper and usual accounts of all moneys received or expended by it and for maintaining accounting records which disclose with reasonable accuracy at any time the financial position of the Fund.

The Agency is also responsible for safeguarding assets under its control and hence for taking reasonable steps in order to prevent and detect fraud and other irregularities.

 

Conor O’Kelly, Chief Executive
National Treasury Management Agency

Willie Walsh, Chairperson
National Treasury Management Agency
15 June 2015

Comptroller and Auditor General Report for presentation to the Houses of the Oireachtas

Dormant Accounts Fund

I have audited the financial statements of the Dormant Accounts Fund for the year ended 31 December 2014 under the Dormant Accounts Act 2001. The financial statements, which have been prepared under the accounting policies set out therein, comprise the accounting policies, the investment and disbursements account, the reserve account, the balance sheet and the related notes. The financial statements have been prepared in the form prescribed under section 46 of the Act, and in accordance with generally accepted accounting practice in Ireland.

Responsibilities of the National Treasury Management Agency

The National Treasury Management Agency (the Agency) is responsible for the preparation of the financial statements, for ensuring that they give a true and fair view of the state of the Fund’s affairs at year end and of its transactions for the year, and for ensuring the regularity of transactions.

Responsibilities of the Comptroller and Auditor General

My responsibility is to audit the financial statements and report on them in accordance with applicable law. My audit is conducted by reference to the special considerations which attach to State bodies in relation to their management and operation. My audit is carried out in accordance with the International Standards on Auditing (UK and Ireland) and in compliance with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements, sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of

• whether the accounting policies are appropriate to the Fund’s circumstances, and have been consistently applied and adequately disclosed
• the reasonableness of significant accounting estimates made in the preparation of the financial statements, and
• the overall presentation of the financial statements.

I also seek to obtain evidence about the regularity of financial transactions in the course of audit.

In addition, I read the information about the Dormant Accounts Fund in the annual report of the National Treasury Management Agency to identify if there are any material inconsistencies with the audited financial statements. If I become aware of any apparent material misstatements or inconsistencies, I consider the implications for my report.

Opinion on the financial statements

In my opinion, the financial statements, which have been properly prepared in accordance with generally accepted accounting practice in Ireland, give a true and fair view of the state of the Fund’s affairs at 31 December 2014 and of its transactions for 2014.

In my opinion, proper books of account have been kept by the Agency. The financial statements are in agreement with the books of account.

Matters on which I report by exception

I report by exception if

• I have not received all the information and explanations I required for my audit, or
• my audit noted any material instance where public money has not been applied for the purposes intended or where the transactions did not conform to the authorities governing them, or
• the information about the Fund in the Agency’s annual report is not consistent with the related financial statements, or
• I find there are other material matters relating to the manner in which public business has been conducted.

I have nothing to report in regard to those matters upon which reporting is by exception.

Seamus McCarthy
Comptroller and Auditor General

16 June 2015

Accounting Policies

Background

The Dormant Accounts Act 2001 (as amended by the Unclaimed Life Assurance Policies Act 2003, the Dormant Accounts (Amendment) Act 2005 and the Dormant Accounts (Amendment) Act 2012), provides for a scheme to transfer dormant funds in banks, building societies and An Post and the transfer of moneys payable under unclaimed life assurance policies to the care of the State, while guaranteeing a right of reclaim to those funds. It further provides for the introduction of a scheme for the disbursement, for charitable purposes, or purposes of societal and community benefit, of funds which are not likely to be reclaimed.

The Dormant Accounts Fund consists of a Reserve Account from which reclaims and various expenses are paid and an Investment and Disbursements Account from which investments and disbursements are made.

The Agency is responsible, under sections 17 and 18 of the 2001 Act, for establishing, managing and controlling the Dormant Accounts Fund and has all powers (including the power to charge fees, payable from the Fund, in relation to the management and control of the Fund) that are necessary to the performance of its functions. These functions include:

• the making of disbursements in accordance with the directions of the Minister for Public Expenditure and Reform
• the maintenance of the Reserve Account
• the defraying of the specified fees, costs and expenses incurred
• the defraying of the remuneration, fees and expenses of the authorised inspectors
• the repayment of moneys transferred to the Fund
• the preparation of the annual investment plan, having regard to the disbursement plan and any direction from
  the Minister for Environment, Community and Local Government.
• the investment of any moneys standing to the credit of the Fund that are not, for the time being, required
  for the purpose of meeting the liabilities of the Fund
• the keeping of proper accounts of all moneys received and expended by the Agency
• the submitting of annual accounts to the Comptroller and Auditor General and the presentation of a copy
  of accounts so audited to the Minister for Finance and the Minister for Environment, Community
  and Local Government.

In accordance with the Dormant Accounts (Amendment) Act 2012, the Minister for Environment, Community and Local Government is responsible for the administration of the process by which the Government approves projects and programmes to which funds from the Dormant Accounts Fund can be disbursed.  In accordance with this Act, a new Disbursement Scheme was approved by Government in December 2013 and a Dormant Accounts Action Plan for 2014 was published, which details projects and programmes to which funds from the Dormant Accounts Fund may be allocated.

The significant accounting policies adopted are as follows:

Reporting Currency

The reporting currency is the euro, which is denoted by the symbol €.

Reporting Period

The reporting period is the year ended 31 December 2014.

Basis of Accounting

The financial statements are prepared on an accruals basis under the historical cost convention.

Investment and Disbursements Account

Year ended 31 December

		2014	2013
	Note	€000	€000
Moneys Transferred to the Fund in Respect of Dormant Accounts and Unclaimed Assurance Policies	1	49,344	44,561
Amount Transferred to Reserve Account	2	(23,553)	(23,425)
Disbursements	3	(1,989)	(1,487)
Interest Earned	10	835	1,509
Movement for the Year		24,637	21,158
Balance at 1 January		123,100	101,942
Balance at 31 December		147,737	123,100

 

Notes 1 – 10 form part of these financial statements.

Conor O’Kelly, Chief Executive
National Treasury Management Agency

Willie Walsh, Chairperson
National Treasury Management Agency
15 June 2015

Reserve Account

Year ended 31 December

		2014	2013
	Note	€000	€000
Repayment of Moneys Transferred to the Fund	1	(18,791)	(19,546)
Interest on Repayment of Moneys Transferred to the Fund	1	(166)	(422)
Transfer from Investment and Disbursements Account	2	23,553	23,425
Other Expenses	4	(400)	(647)
Interest Earned	10	451	210
Movement for the Year		4,647	3,020
Balance at 1 January		62,408	59,388
Balance at 31 December		67,055	62,408

 

Notes 1 – 10 form part of these financial statements.

Conor O’Kelly, Chief Executive
National Treasury Management Agency

Willie Walsh, Chairperson
National Treasury Management Agency
15 June 2015

Balance Sheet

Year ended31 December

		2014	2013
	Note	€000	€000
Assets
Financial Assets
– Investments at Cost	5	60,151	49,052
Current Assets
– Cash and Bank Deposits	6	152,386	134,378
– Debtors	7	2,484	2,137
Liabilities
– Accrued Reclaims		(229)	(59)
Net Assets		214,792	185,508
Represented by:
Investment and Disbursements Accounts		147,737	123,100
Reserve Account		67,055	62,408
		214,792	185,508

 

Notes 1 – 10 form part of these financial statements.

Conor O’Kelly, Chief Executive
National Treasury Management Agency

Willie Walsh, Chairperson
National Treasury Management Agency
15 June 2015

Notes to the Financial Statements

1. Cumulative amounts transferred and reclaimed in respect of dormant accounts and unclaimed assurance policies

 

 

Banks – Dormant Accounts
	Opening Balance 1/1/14	Transferred	Reclaimed	Closing Balance 31/12/14	Interest Paid
Institution	€	€	€	€	€
ACC Bank plc	6,253,816	858,595	(707,745)	6,404,666	2,941
Allied Irish Banks plc	67,861,490	5,597,700	(972,945)	72,486,245	6,052
Barclays Bank Ireland plc	344,025	–	–	344,025	–
BNP Paribas SA	83,575	–	–	83,575	–
Bank of America National Association	154,778	–	–	154,778	–
Bank of Ireland (The Governer & Company)	69,123,039	6,870,716	(2,344,985)	73,648,770	7,283
Bank of Scotland plc	567,088	–	–	567,088	–
Citibank Europe plc	28,700	–	–	28,700	–
EBS Ltd	15,948,043	3,779,119	(1,615,927)	18,111,235	67,117
EAA Covered Bond Bank	122,119	–	–	122,119	–
KBC Bank Ireland plc	785,993	103	–	786,096	–
Irish Bank Resolution Corporation Ltd (in special liquidation)	629,363	–	–	629,363	–
Investec Bank plc	1,609,821	17,692	(8,575)	1,618,938	95
JP Morgan Bank (Ireland) plc	48,897	–	–	48,897	–
Danske Bank plc	5,710,171	1,014,517	(702,693)	6,021,995	3,167
Permanent TSB plc	38,582,773	3,452,933	(1,118,356)	40,917,350	–
Pfizer International Bank	33,573	–	(954)	32,619	5,833
An Post	78,126,940	13,410,555	(8,029,272)	83,508,223	44,175
An Post – Post Office Savings Bank	36,044,871	2,226,367	(701,259)	37,569,979	29,150
RBS NV (formerly ABN AMRO)	34,992	463	–	35,455	–
The Royal Bank of Scotland plc	37,336	349,399	–	386,735	–
Scotiabank (Ireland) Ltd	92,953	–	–	92,953	–
Ulster Bank Ireland Ltd	23,850,966	2,768,263	(479,744)	26,139,485	402
TOTAL (Banks)	346,075,322	40,346,422	(16,682,455)	369,739,289	166,215

 

 

Assurance Companies – Unclaimed Assurance Policies
	Opening Balance 1/1/14	Transferred	Reclaimed	Closing Balance 31/12/14	Interest Paid
Institution	€	€	€	€	€
Specified Term Accounts:
Ark Life Assurance Co. Ltd	538,504	135,349	(52,002)	621,851	–
Aviva Life International Ltd	3,225,808	532,066	(315,166)	3,442,708	–
Caledonian Life	104,748	–	–	104,748	–
Equitable Life	7,131	257	–	7,388	–
Friends First Life Assurance Co. Ltd	2,069,786	247,287	(16,632)	2,300,441	–
Irish Life Assurance plc (including former Canada Life Ire)	5,902,361	1,193,921	(49,456)	7,046,826	–
New Ireland Assurance Co. Ltd	239,681	641,171	–	880,852	–
Phoenix Life Ltd	3,581,657	1,186,603	(133,480)	4,634,780	–
The Royal London Mutual Insurance Society Ltd	6,817,645	820,453	(63,643)	7,574,455	–
St. James Place International plc	10,649	–	–	10,649	–
Scottish Legal Life	598,319	4,047	–	602,366	–
Standard Life International Ltd	1,046,720	254,088	–	1,300,808	–
Sun Life	193,599	8,445	(15,117)	186,927	–
Zurich Life Assurance plc	1,042,057	228,870	(13,512)	1,257,415	–
No Specified Term Accounts:
Acorn Life Ltd	14,846	17,958	–	32,804	–
Ark Life Assurance Co. Ltd	224,883	400,343	(35,428)	589,798	–
Aviva Life International Ltd	1,939,603	170,193	(99,479)	2,010,317	–
Caledonian Life	31,113	–	–	31,113	–
Friends First Life Assurance Co. Ltd	1,139,980	101,897	(16,315)	1,225,562	–
Irish Life Assurance plc (including former Canada Life Ire)	8,743,552	446,536	(368,511)	8,821,577	–
New Ireland Assurance Co.plc	10,775,570	641,171	–	11,416,741	–
Phoenix Life Ltd	324,881	172,051	(6,691)	490,241	–
The Royal London Mutual Insurance Society Ltd	9,605,117	1,005,468	(210,361)	10,400,224	–
Scottish Legal Life	502,824	35,860	–	538,684	–
Standard Life International Ltd	1,461,902	402,485	(383,670)	1,480,717	–
Sun Life	47,473	–	–	47,473	–
Zurich Life Assurance plc	2,218,193	291,962	(100,163)	2,409,992	–
TOTAL (UNCLAIMED POLICIES)	62,408,602	8,938,481	(1,879,626)	69,467,457	–
The Escheated Estate Fund	4,400,000	–	–	4,400,000	–
Accrued Reclaims	(58,975)	58,975	(228,581)	(228,581)	280
GRAND TOTAL	412,824,949	49,343,878	(18,790,662)	443,378,165	166,495

 

The amounts transferred to the Fund included accounts denominated in currencies other than euro.  The effect of revaluing these accounts at the year end exchange rates would be to increase the total amount transferred to the Fund and not yet reclaimed by €460,806 from €443,378,165 to  €443,838,971.

2. Transfers to the Reserve Account

Under section 17 (4) of the Dormant Accounts Act 2001 as amended, the Agency pays into the Reserve Account, from time to time, an amount determined by the Agency, with the approval of the Minister for the Environment, Community and Local Government given with the consent of the Minister for Finance, for the purposes of making repayments from the Fund and of defraying various fees and expenses.   A transfer is made periodically by the Agency to maintain the balance in the Reserve Account at a currently approved 15 per cent of the total dormant funds received by the Dormant Accounts Fund and not yet reclaimed. The balance in the Reserve account may deviate from 15 per cent in the intervening period between the periodic rebalancing dates.

3. Disbursements

The following disbursements were made from the Fund during the year:

	2014 €000	2013 €000
On direction of the Minister for Public Expenditure and Reform:
Department of Children and Youth Affairs	–	800
Department of Education and Skills	(3)	8
Department of Environment, Community and Local Government	–	5
Department of Environment, Community and Local Government (adminstered by Pobal)	1,942	591
Department of Justice and Equality	50	–
Irish Prison Service (administered by Pobal)	–	83
	1,989	1,487

 

 

4. a) Other Expenses

	2014 €000	2013 €000
Board Fees and Expenses	–	1
Fees of service provider (Pobal)	400	645
Consultancy and Advisory fees	–	1
	400	647

The Dormant Accounts Board was dissolved on 26 September 2013 and its remaining functions transferred to the Minister for Environment, Community and Local Government

Pobal receives an annual service fee for its administration of certain projects in receipt of Dormant Accounts Fund disbursements.  The fee is paid by the Department of the Environment, Community and Local Government (DECLG) and reimbursed from the Dormant Accounts Fund.

4. b) Expenses of the National Treasury Management Agency

Under section 45 (1)(c) of the Dormant Accounts Act 2001 as amended, the Agency is required to report certain specified information including a separate account of the administration fees and expenses incurred by the Agency in the operation of the Fund. These are detailed below:

	2014 €000	2013 €000
General Administration	150	150

 

This is an estimate, included in the Notes to the accounts only, as the Agency has not charged these fees and expenses to the Dormant Accounts Fund.

5. Financial Asset

	2014 €000	2013 €000
4.0% Bank of Ireland Bond 2015	60,151	–
4.0% Irish Treasury Bond 2014	–	49,052
	60,151	49,052

 

6. Cash and Bank Deposits

This figure represents the cash balance held at the Central Bank of Ireland, and Commercial Term Deposits held with Permanent tsb, Bank of Ireland and Allied Irish Banks plc.

 

7. Debtors

	2014 €000	2013 €000
Bond Interest Receivable	2,219	1,885
Interest Receiveable on Cash on Deposit	265	252
	2,484	2,137

 

8. (a) Contingent Exchequer Liability

As a result of cumulative disbursements to date the net assets of the Fund are less than the dormant funds transferred and not yet reclaimed. This difference represents a contingent exchequer liability that would have to be met by the Central Fund in the event that all moneys transferred to the Dormant Accounts Fund were reclaimed. Under section 17(7) of the Dormant Accounts Act 2001 as amended, whenever the moneys in the Investment and Disbursement Account are insufficient to meet the deficiency in the Reserve Account, a payment can be made out of the Central Fund into the Reserve Account of an amount not exceeding the deficiency.  The moneys are repaid to the Central Fund, as soon as practicable, from surplus moneys remaining in the Fund after providing for any liabilities or contingent liabilities of the Fund.

(b) Analysis of Contingent Exchequer Liability:

	January 2014	Movement during the year	31 December 2014
	€000	€000	€000
Net Assets of Fund	185,508	29,284	214,792
Dormant Funds Transferred not Reclaimed	(412,825)	(30,553)	(443,378)
Contingent Liability	(227,317)	(1,269)	(228,586)

 

 

(c) The movement in the Contingent Exchequer Liability is represented by:

	Note	€000
Interest Earned	10	1,286
Interest on Repayments of Moneys Transferred to the Fund	1	(166)
Disbursements	3	(1,989)
Other expenses	4	(400)
Movement for the year		(1,269)

 

 

9. Investment Return

Under section 45 (1)(b) of the Dormant Accounts Act 2001 as amended, the Agency is required to report to the Minister for Environment, Community and Local Government the investment return achieved by the Fund. The annualised return on the Fund for the year was 0.61 per cent (2013 0.93%)¹.

10. Interest Earned

	Investment & Disbursements Account	Reserve Account	Total 2014	Total 2013
	€000	€000	€000	€000
Bond Holding	312	–	312	892
Commercial Deposits	512	436	948	776
Central Bank Deposits	11	15	26	51
	835	451	1,286	1,719

¹Comparative 2013 return has been restated for the inclusion of premiums on acquisitions of bond investments.