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Annual Report 2007 - Finance
The Board’s financial statements for 2007 are shown at Appendix 1.
Income
The following are some comments on the sources of the Board’s income.
(a) Grant-in-aid
As in previous years, most of the Board’s income consists of a grant-in-aid received from the Department of Justice, Equality and Law Reform. Funding provided by the Government in 2007 was €24.288 million, as compared with €21.913 million in 2006.
(b) Refugee Legal Service
Exchequer funding for the RLS in 2007 was €8.617 million, compared to €7.726 million in 2006. This level of funding was adequate to cover the full year cost of the provision of legal aid services by the Refugee Legal Service.
(c) Contributions
Persons who are provided with legal services pay a contribution related to their income and, in some cases, their capital resources. The minimum contribution is €10 for legal advice and €50 for representation in court. This minimum contribution can be waived in cases of hardship.
(d) Recovery of costs
The Board may recover the cost of providing legal services from:
i. the other party to a dispute, either as a result of a court order or as part of an agreement to settle a dispute, or
ii. from the legally aided person out of monies/property received by the person as a result of the provision of legal services.
The amount of costs recovered can vary significantly from year to year, especially if a legally aided person obtains an award for costs in a case in which the other party is in a position to meet the costs. This does not generally arise in family law cases, which form the bulk of the Board’s caseload.
Costs recovered in 2007 (€1,128,800) were 16% lower than in 2006 (€1,347,433).
Expenditure
The following are comments on the major items of expenditure shown in the 2007 financial statements:
1) Salaries
The increase of €1,938,085 (11%) in expenditure on employee costs in 2007 (excluding pension charges for solicitors) is due to a number of factors including the cost of pay increases under Towards 2016, increments, an increase in the number of employees to fill temporary vacancies and pay increases as a result of the Law Clerks Regrading Claim.
2) Accommodation and establishment costs
Expenditure in this area decreased by €310,634 (7%) in 2007. This decrease occurred mainly in the area of maintenance of premises, which incurred significant refurbishment costs in 2006. Maintenance of equipment also had significant costs associated with improved I.T. systems in library facilities and investment in internal ICT systems in 2006 compared to 2007.
The tenders carried out in 2007 in the areas of cleaning, lighting and heating also contributed to a reduction in accommodation and establishment costs.
3) Legal fees and expenses
There are a number of differing elements covered in this heading - see Note 7 to the accounts - and comment is provided on each of the various headings comprising the total as follows:
(i) Counsel fees
Expenditure on counsel fees decreased by €1.943 million or 28% when compared with 2006. This occurred as a result of the comprehensive analysis carried out by the Board in 2006 for the purpose of assessing its accrued liabilities in counsel fees. The Board adopted a work in progress basis for valuation of accrued counsel fees at year ending December 2006, compared to an accrual of three months counsel fees in previous years.
The accrual for counsel fees, where work has been incurred but not yet presented for payment at December 31st 2007, stands at €5,512,955.
When costs are recovered, the amount recovered in respect of counsel fees is paid to the barrister and this is generally higher than the fee normally paid by the Board.
The following table shows the trend in expenditure on counsel fees in respect of legal aid and advice over the past seven years.
(ii) Legal fees - expenses
These case-related expenses are the additional expenses incurred by the Board, over and above counsel fees, in providing a civil legal aid and advice service to members of the public. The expenditure amount under this heading is derived from the requirements of the cases handled by the Board in any particular year.
There was a decrease of 26% in 2007. This is mainly due to a reduction in expenditure on interpreters/translation services in 2007, which is a result of a decrease in the number of asylum seekers registering as clients of the RLS.
(iii) Private practitioner scheme
Expenditure in 2007 on the private practitioner scheme was down 16% to €2.6 million. The decrease arises primarily as a result of the Board introducing a revised method of accruing for legal aid certificates issued under the private practitioner scheme in 2006 after carrying out a comprehensive exercise for the purpose of assessing the Board’s accrued liabilities in this area. In previous years the accrual was based on a figure of three months issued legal aid certificates. At December 31st 2007, the accrual for private practitioner fees, where work has been incurred but not yet presented for payment, stood at €1.597 million.
(iv) Other professional fees
Costs under this heading relate to the engagement by the Board of professionals to provide independent legal advice and other professional services to the Board. The decrease of 22% compared to 2006 reflects the decreased need on the part of the Board for recourse to its legal advisors, arising from cases taken against it and heard in 2007.
(v) Other expenses
Solicitors employed by the Legal Aid Board must have a practising certificate, which is issued by the Law Society of Ireland. The cost of these certificates in 2007 totalled €254,000.
Also included under this heading is expenditure on training and education (€423,000) and annual membership subscriptions (€11,000).
The following graph shows a breakdown of expenditure by the Board over the last five years.
The following graph shows the relationship between Oireachtas funding and the actual expenditure over the last ten years.
Cash at bank and on hand
The Balance Sheet shows that the Board had over €4.13 million on hand at the end of 2007. It can be seen from Note 12 to the accounts that the throughput of client funds in 2007 was €15.48 million. This arises from cases where, as a result of legal advice or representation in court, clients received moneys either from the other party or from the disposal of property. All such moneys are initially lodged to the Legal Aid Client Fund Account before being returned to clients less, in some cases, an amount in respect of costs incurred by the Board in providing legal services. The cash at bank figure, apart from client funds, is similar to the level of expenditure incurred by the Board each month and is considered to be a reasonable level of funding to have on hands at any one time.
Prompt Payment of Accounts Act, 1997
Section 4 of the Prompt Payment of Accounts Act, 1997 requires the Board to pay for the supply of goods or services by the prescribed payment date. This date is currently 30 days after the receipt of an invoice, or a lesser period as may be specified in a written contract. If the Board fails to make payment by the prescribed payment date, interest is payable to the supplier. Procedures ensure that the Board complies in all material respects with the requirements of the Act. The total amount of late payment interest paid to suppliers of goods and services during 2007 amounted to €nil.
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