Decision
A Council and the Department of the Environment, Community and Local Government
From Office of the Information Commissioner (OIC)
Case number: 140144
Published on
From Office of the Information Commissioner (OIC)
Case number: 140144
Published on
Whether the Department was justified in its decision to grant a request, to which section 29 of the FOI Act applies, for access to management letters issued by the Local Government Audit Service to the applicant.
Conducted in accordance with section 34(2) of the FOI Act
05 December 2014
On 30 March 2014 the original requester sought a copy of all management letters issued to city, county and town managers in respect of statutory audits conducted by the Local Government Audit Service ("LGAS") in respect of the financial years 2010, 2011 and 2012 from the Department. While processing the FOI request, the Department's decision maker informed all City and County Councils that an FOI request had been received for access to the records concerned pursuant to the provisions of section 29 of the FOI Act. He stated that while he was of the opinion that the records included information given in confidence (section 26 of the FOI Act) and/or personal information (section 28 of the Act), his preliminary view was that the public interest would be better served by granting than by refusing access to the records. The Department informed the Councils of their right under section 29 of the FOI Act to make submissions if they did not wish the records to be released. The applicant did not make a submission at that time. Subsequently, on 23 May 2014, the Department informed the requester and all third parties, including the applicant, that it had decided that the records in question should be released in the public interest (partially redacted in some cases). On 6 June 2014 the applicant applied to this Office for a review of the Department's decision in relation to the records relating to it.
In conducting this review, I have had regard to the submissions of the Department, the applicant and the requester. The provisions of the FOI Act and the contents of the records in question (copies of which has been provided to this Office for the purposes of this review), have also been considered.
As outlined above, the requester sought access to management letters issued by LGAS in respect of the financial years 2010, 2011 and 2012. During the course of the review, an issue arose as to whether or not the 2012 management letter issued to the applicant came within the scope of the review as it appeared that the original requester already had a copy of the letter in question. The Department indicated that as the requester had a copy of the 2012 management letter, it did not consider the letter during its decision making process. When contacted by Ms Sandra Murdiff of this Office, the requester indicated that he required a copy of the 2012 letter and that his request clearly encompassed same. Ms Murdiff informed both the Department and the applicant of her view that the 2012 letter came within the scope of the review and invited both parties to comment. Both replied that their submissions in relation to the 2010 and 2011 letters applied equally to the 2012 letter. Accordingly, the scope of the review is concerned solely with the question of whether the Department was justified, under the provisions of the FOI Act, in its decision to grant access to the management letters which issued to the applicant in respect of the financial years 2010, 2011 and 2012.
The applicant's right to seek a review of the Department's decision arises on the basis that it is a decision on a request to which section 29 of the FOI Act applies. Section 29 of the FOI Act applies to cases where the public body has considered at some stage in the decision making process that the record(s) in question qualify for exemptions under one or more of the relevant exemptions in the FOI Act (i.e. sections 26, 27 and 28 - relating to information that is confidential, commercially sensitive or personal information about third parties, respectively) but that the record(s) should be released in the public interest. Where section 29 applies, the public body is required to notify the affected third parties before making a final decision on whether or not the exemption(s) considered to apply should be overridden in the public interest. The requester or affected third parties, on receiving notice of the final decision of the public body, may apply for a review of that decision to the Office of the Information Commissioner directly.
Applying the section 29 context to this particular case, it would appear that the Department found the management letters which issued to the applicant to be exempt from release under sections 26 and 28 of the FOI Act. However, these exemptions may be set aside where the Department decides that the public interest is better served by the records being released than by their being withheld. Having consulted with the applicant on the issue, the Department decided that the public interest is better served by the release of the records than by their being withheld.
In its application for review, the applicant argued that access to the records in question should not be granted on the basis of sections 21 and 23 of the FOI Act, as well as sections 26, 27 and 28 of the Act. However, section 29 refers exclusively to exemptions under sections 26, 27 and 28. Sections 21 and 23 contain discretionary exemptions which a public body dealing with the FOI may apply. As the Department chose not to do so, I am not required to consider the applicability of these exemptions to the records at issue.
It is important to note that, as set out at section 34(12)(a) of the FOI Act, where a decision to grant a request to which section 29 applies is being reviewed by the Commissioner, there is a presumption that the granting of the requested access is justified unless the person (to whom the information relates) "shows to the satisfaction of the Commissioner that the decision was not justified". Thus, in this case, the onus is on the applicant to satisfy this Office that the decision to grant access in the public interest is not justified.
In its application and subsequent submission to this Office, the applicant contended that the records in question should not be released on the grounds of sections 26(1)(a), 27(1)(a), (b) and (c) and 28(1) of the FOI Act. In essence, however, the applicant's arguments relate solely to the relevant provisions of section 27 of the Act which seek to protect the commercial interests of third parties. It seems to me that neither section 26 nor section 28 are of relevance in this case. The records at issue in this case comprise letters prepared by the Department as part of their audit of the Council's annual financial statements for the relevant years. Section 26(2) of the FOI Act provides that section 26(1) shall not apply to a record which is prepared by a staff member of a public body in the course of the performance of his or her functions unless release of the information concerned would constitute a breach of a duty of confidence as provided for by an agreement or statute or otherwise by law and is owed to a person other than a public body. As no case has been made that the release of the records at issue would constitute a breach of a duty of confidence owed to a person other than the applicant (a public body), it is clear to me that section 26 cannot apply and I find accordingly.
Furthermore, no case has been made that the records at issue contain personal information relating to an identifiable individual, nor does it appear to me that they contain such information. Accordingly, I find that section 28 does not apply. The only exemption remaining to be considered, therefore, is section 27 of the FOI Act. While the decision of the Department was to release the records at issue on the ground that the public interest would, on balance, be better served by release, a consideration of where the balance of the public interest lies arises only where the information is found to be exempt under section 27(1). Accordingly, I consider it appropriate to consider, in the first instance, whether section 27(1) applies.
Section 27(1)(a)
Section 27(1)(a) provides that records shall not be released if they contain trade secrets of a person other than the requester concerned. Having reviewed the records in question, I am satisfied that they do not contain any information which would be considered the trade secrets of any person. While the applicant refers to this section in its submission, it did not provide any evidence or details of how the exemption might apply. In the circumstances, I find that this section does not apply.
Section 27(1)(b)
Section 27(1)(b) of the FOI Act provides that a head shall refuse to grant a request if the record concerned contains financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation.
The applicant states that management letters provides a mechanism for alerting senior management of the Council to issues that could ultimately become material if not addressed and that the purpose of the letters is to pre-empt matters from escalating. It argues that the auditor often highlights weaknesses that have not yet given rise to losses and that it would be perverse if publication of management letters provided unscrupulous individuals with the opportunity to exploit the identified or similar weaknesses.
There appears to be some uncertainty as to the position of public bodies under section 27. The former Commissioner took the view that section 27 is designed to protect commercially sensitive information relating to persons other than public bodies. On the other hand, the Central Policy Unit of the Department of Public Expenditure and Reform has indicated, in a decision maker's manual available on its website at www.foi.gov.ie, that the section is concerned with preventing unwarranted commercial disadvantage to persons carrying on a commercial activity and that the protection of the section applies to bodies and organisations both in the private and public sector. As a general principle, I agree that section 27 is primarily aimed at protecting the commercial interests of parties engaged in commercial activity. As such, it is not clear to me that it is entirely appropriate for a public body, which is engaged in the provision of public services, to seek to claim exemption under section 27 to protect its financial interests. In my view, such protection lies in the exemption provided for at section 31 of the FOI Act which is concerned with protecting the financial and economic interests of the State and public bodies.
Nevertheless, I am prepared to accept in the circumstances of this case that the FOI Act does not prohibit the applicant from relying upon the provisions of section 27(1)(b) in circumstances where it is claiming that the disclosure of the management letters at issue could reasonably be expected to result in it incurring a material financial loss. On this point, however, it is noteworthy that the applicant has not pointed to any specific information contained in the records at issue that, if disclosed, could reasonably be expected to give rise to such harm. Rather, it makes a general assertion that the disclosure of weaknesses identified by an auditor in a management letter might be exploited. In previous decisions, this Office has explained its approach to interpreting the words "could...reasonably be expected to...." in the context of section 27 of the FOI Act. In determining whether access "could reasonably be expected to affect adversely" one of the interests outlined in section 27(1), this Office takes the view that there must be adequate grounds for any such expectation at the time the decision to refuse access is made. The mere possibility of some adverse effect is not sufficient.
In this case, while I accept that applicant has outlined a potential harm arising from the release generally of records of the type at issue here, it has not explained how such harm might arise having regard to the contents of the specific records at issue. As such, it seems to me that the applicant has not shown that section 27(1)(b) applies. Even if it had so shown, I am required to consider, pursuant to the provisions of section 27(3), whether the public interest would, on balance, be better served by release of the records sought. For the sake of completeness, therefore, I will consider the applicability of section 27(3) separately below.
Section 27(1)(c)
Section 27(1)(c) provides for the refusal of a request where the records sought contain information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates. While the applicant referred to this section in its application to this Office, it has not identified any contractual or other negotiations which could be prejudiced by the release of the records at issue. I find, therefore, that section 27(1)(c) does not apply.
Section 27(3) - The Public Interest
Section 27(3) provides that the exemptions contained in section 27(1) do not apply where the body considers that the public interest would, on balance, be better served by granting than by refusing to grant the request. As outlined above, the applicant's primary argument is that management letters often highlight weaknesses, the disclosure of which might give rise to the exploitation of the identified or similar weaknesses. It argues that exposing it to such a risk far outweighs the public interest in release.
Given my findings that section 27(1) does not apply in this case, it is difficult to see how the public interest would be better served by refusing access to the records sought. Nevertheless, even if I had accepted the applicant's argument that the disclosure of the records could reasonably be expected to give rise to the harm identified, the public interest that would be served by granting the request remains to be considered. The applicant argues that the management letter will be of less value to management and will ultimately prove less effective if it is available for general publication. I disagree. In my view, there is a significant public interest in optimising transparency and accountability in relation to the provision of public services by city and county councils and the utilisation of public funds for those purposes. I understand that members of the public have unique rights as part of the public accountability framework for local government. For example, they can inspect the annual financial statement, records and other documents relating to the accounts to be audited for seven days before the formal audit commences. It seems to me that where audits identify weaknesses in internal control mechanisms, there is a public interest in knowing that such weaknesses have been identified and that public bodies are being held to account in terms of addressing those weaknesses.
The applicant also argues that the principle of openness and transparency is well served by separate published reports by the Local Government Audit Service and the Audit Committee wherein each and every concern they have can, and is, expressed and subsequently debated by elected members and, indeed, reported in the press. However, this does not mean that further mechanisms for increasing such openness and transparency are not in the public interest. In the circumstances, it seems to me that any public interest in withholding the records at issue in this case is clearly outweighed by the public interest in granting access. Accordingly, I find, having regard to the provisions of section 34(12)(a) of the FOI Act, that the applicant has not shown, to the satisfaction of this Office, that the Department's decision to grant access to the management letters sought was not justified.
Having carried out a review under section 34(2) of the FOI Act, I hereby affirm the Department's decision to grant access to the management letters which issued to the applicant in respect of the financial years 2010, 2011, and 2012.
A party to a review, or any other person affected by a decision of the Information Commissioner following a review, may appeal to the High Court on a point of law arising from the decision. Such an appeal must be initiated not later than eight weeks from the date on which notice of the decision was given to the person bringing the appeal.
Stephen Rafferty
Senior Investigator