Dáil Éireann debate -
Wednesday, 31 Mar 1993

Vol. 428 No. 6

Comptroller and Auditor General (Amendment) Bill, 1992: Committee Stage.

SECTION 1.

Minister of State at the Department of Finance (Ms E. Fitzgerald)

I move amendment No. 1:

In page 4, subsection (1), line 32, after "offices" to insert "by or".

This is a technical change in the definition of the term "Departments". It is necessary because there are some Appropriation Accounts — for example, the Secret Service Vote and the Vote for Increases in Remuneration and Pensions — which are not prepared "in respect of" a Department or office. Such Appropriation Accounts are prepared "by" the appropriate Department — for example, in the two cases referred to here, by the Department of Finance.

Amendment agreed to.

Question proposed: "That section 1, as amended, stand part of the Bill."

Mr. Yates

I wish to raise one point with the Minister. The first definition in the Bill relates to accounting officers. Will the Minister agree that safeguards in relation to current and future public expenditure are not adequate in terms of eliminating waste, overlap and duplication? Will she also agree that secretaries of spending Departments are the most suitable people to be accounting officers in terms of the control of public expenditure? Is it not de facto the case within the Government system that mainline spending Departments become the lobbyists for those spending sectors and that the Department of Finance acts as the controller of expenditure, if there is such a controller? My view on this matter — this is only an introductory aspect to it — is that our whole system of controlling public expenditure is intended to deal with accuracy, compliance and history as opposed to futuristic and current aspects of waste and control. Would the Minister not agree that accounting officers do not necessarily put in place controls of expenditure in the global sense in the Department but instead they simply dot the i's and cross the t's?

Ms E. Fitzgerald

I do not agree. The function of Secretaries of Government Departments as accounting officers is to ensure that the policies of the Department are carried out, and to be responsible for the day-to-day operations of the Department, including efficiency in spending money. This Bill proposes to extend the powers of the Comptroller and Auditor General in relation to providing value for money audits. The kind of issues that arise in value for money audits arise from historical experience and are applied to future policy.

This Bill arises from a report prepared by the Committee of Public Accounts in which I know Deputy Gay Mitchell was very much involved. Subsequently a White Paper on the role of the Comptroller and Auditor General's Office was prepared. This Bill takes on board the points made at that time and is an extension of the powers of the Comptroller and Auditor General to the whole area of value for money. This is a positive move that should be welcomed by the House.

We should not confuse the role of the Comptroller and Auditor General as the constitutional officer who is independent of the line Departments in drawing attention to practices and procedures in Departments, particularly to the value for money audit, with the role of the Secretaries of Government Departments as accounting officers. It is important that the Secretaries of Government Departments with responsibility for day-to-day management of Government spending should continue to be the accounting officers for those Departments. They can be questioned by the Committee of Public Accounts.

Mr. G. Mitchell

I welcome this Bill and the opportunity for Members to go through Committee Stage. I agree that the Secretary of the Department is in general the person who should be the accounting officer. That has worked well under the Exchequer and Audit Departments Act, 1866. This Bill is an updating of that Act.

Since the Minister mentioned the background to this, I chaired an advisory group on public financial accountability which reported to the Committee of Public Accounts. That group consisted of me, the Comptroller and Auditor General and people from the public and private sectors. Most of our recommendations are included in this Bill. In relation to the section on accounting officer, one thing which is not in the Bill — and which the Minister might consider including — is allowing the Committee of Public Accounts to pursue into the private sector or wherever it sees fit, the expenditure of public funds. It should not be a question of saying that it must only report on what the Comptroller and Auditor General reports to the House. If the Comptroller and Auditor General is to be independent, the Committee of Public Accounts must also be independent. The committee must not depend on the role of the Comptroller and Auditor General, one of the great officers of State, as he is the only constitutional officer who works directly for the Dáil and not for the Executive.

In Northern Ireland when the De Lorean factory located there, the Public Accounts Committee in the British House of Commons, under their National Audit Act, 1983, were able to examine the expenditure of private money and call witnesses in relation to De Lorean. If that factory had been located in the South we could not have done the same thing. We should not just depend on accounting officers, the Committee of Public Accounts should have the power to subpoena whoever it sees fit to appear before it. Persons should be compelled to appear before it and give evidence and there should be a penalty for non-compliance. The accounting officer route is the right one for Government Departments, the IDA and the National Treasury Management Agency. However, not only accounting officers should be required to attend, anybody whom the Public Accounts Committee, as the senior committee of this House, requires to attend should comply with its request. That would happen in any Parliament in the world.

An Ceann Comhairle

It seems that much of what has been said already would be more appropriate to section 2. We might proceed to adopt section 1 as amended.

Mr. Rabbitte

I just want to underline the last point made by Deputy Mitchell concerning powers to pursue money into the private sector. The committee is likely to be frequently confronted, if it is to do its job conclusively, with situations where it will require such powers. Indeed we had a rather celebrated case in the period of the last Dáil which Deputy Mitchell handled with considerable skill and even-handedness in a very emotive and controversial political climate. I would like to hear the Minister address that specific point.

On Report Stage, if I can secure the necessary expertise in the interim, I intend to return to a point which related to the question of accounting officers and specifically the absence of any parliamentary accountability vis-à-vis the Central Bank.

Having regard to the recent devaluation crisis, it seems there are matters of policy that are exclusively the remit of the Central Bank and for which it should be made accountable. In my experience, the accounting officer for the Department of Finance will not take on aspects of that responsibility. I am aware that he is responsible for the National Treasury Management Agency, but there is secrecy surrounding major decisions by the Central Bank which ought not to continue unchallenged. Decisions by the Central Bank have major economic implications, as we saw during recent months, and to this day we have had no statement of explanation or statement of policy consideration or of any of the other considerations that the Central Bank took into account in being the main mover in some of these decisions. Some method of accountability should be worked out. Perhaps this is as good an opportunity as we will get.

Section 1, as amended, agreed to.

SECTION 2.

An Ceann Comhairle

Some amendments have been tabled to section 2. Amendment No. 2 is in the name of the Minister and I observe that amendment No. 3 is related. I suggest, therefore, that we discuss amendments Nos. 2 and 3 together. Is that satisfactory? Agreed.

Ms E. Fitzgerald

I move amendment No. 2:

In page 5, lines 44 to 48 and in page 6, lines 1 to 5, to delete subsection (5) and substitute the following:

"(5) Issues or transfers of money from the account of the Exchequer aforesaid required for the time being to meet disbursements referred to in subsection (1) shall be made on the authority of credits under this section upon orders issued in writing or by means of an electronic funds transfer system to the Central Bank—

(a) in the case of disbursements referred to in paragraph (a) of subsection (1), by an officer of the Minister, authorised in that behalf by the Minister, and

(b) in the case of disbursements referred to in paragraph (b) of subsection (1), by an officer of the Minister or of the National Treasury Management Agency so authorised.".

Before discussing the amendment I wish to inform the Deputies that the issue of the right to call witnesses under penalty will be dealt with under a privilege and compellability Bill which will be introduced. The issue raised by Deputy Rabbitte in relation to the Central Bank does not arise under this Bill, but any policy questions in relation to the Central Bank would appropriately be a matter for the Minister for Finance.

Mr. Rabbitte

The Minister for Finance will not answer questions in the House about the Central Bank.

Ms E. Fitzgerald

It does not arise under this Bill.

Mr. Rabbitte

We should ensure that it will arise. The Minister for Finance will not answer questions in this House, for example about interest rate policy, matters that are within the remit of the Central Bank.

An Ceann Comhairle

As the Deputy suggested earlier, he might deal with the matter more appropriately on Report Stage.

Ms E. Fitzgerald

Amendment No. 2 is a technical amendment concerning electronic funds transfer.

Mr. J. Mitchell

Amendment No. 3 seeks to delete the words "in pursuance of orders under subsection (5)" in subsection (6) as that appears to limit the effect of the section. I ask the Minister to agree to the amendment. Will the Minister of State clarify her statement about the privilege and compellability Bill. Will this Bill affect the Committee of Public Accounts only or will it extend to all committees of this House and the other House? Can she give us some indication as to when that Bill will be introduced?

Ms E. Fitzgerald

I am not in a position to give details of that Bill as I am not personally involved in its operation. That Bill is being prepared by the Government. I am prepared to accept amendment No. 3 in the name of Deputy Jim Mitchell.

Mr. G. Mitchell

When the National Treasury Managment Agency Bill was going through the House I had consultations with the Department of Finance and the Comptroller and Auditor General as Chairman of the Committee of Public Accounts. I have always found the Department of Finance very co-operative. They sought to insert in that Bill the appointment of the Chief Executive of the National Treasury Management Agency as an accounting officer. That was the first time that was done and was a wise and good move. I am very appreciative of that and it is good for the House.

I support the point made by Deputy Rabbitte. In general, there should not be any agencies which are not accountable. There are people with supreme authority in some cases who have no accountability. Deputy Rabbitte gave the example of the Central Bank and I would give the example of An Bord Pleanála. I am not suggesting the Committee of Public Accounts should have a policy responsibility because that is not their role; that is the role of the Government and the Dáil, but they should have financial accountability. They should be asked about the workings of their office and know that at some stage they will have to account.

Nobody should wield the sort of authority and power they do without being made accountable. It is not a question of affecting their independence. They can be independent and accountable at the same time. In the case of the two agencies — the Central Bank and An Bord Pleanála — we have made them independent but not accountable. That is wrong and it should not be allowed continue. The precedent set in the case of the National Treasury Management Agency, which will now be extended to the IDA which in future will have its own accounting officer, should be used for the Central Bank, An Bord Pleanála and other such agencies so that they could at least be reviewed by some committee. I suggest the appropriate committee is the Committee of Public Accounts.

Mr. Yates

I support Deputies Rabbitte and Gay Mitchell. I recently had detailed discussions with officials of the Central Bank whose accountability to this House is virtually non-existent. While I acknowledge the need for the Central Bank to be independent, in terms of the integrity of the currency, I am concerned about such matters as the current situation in relation to building societies and an internal probe in one society relating to an executive chairman. The Central Bank is the supervisory authority and is not accountable for its actions. In fact, it is forbidden to make a statement.

Another area relates to devaluation. If this House wished to find out if speculators gained on devaluation or by how much the Central Bank lost, what its liability was to the European banking system, or the cost of replenishing the national reserves, it should be entitled to ask those valid questions. As Deputy Rabbitte said, questions of that nature are deflected and defused by the Minister for Finance. The Minister of State, in the work she is doing on other committees being formed by this House such as committees dealing with economic enterprise, finance and general affairs, should introduce a provision whereby the Governor, board of directors and management of the Central Bank could be brought to account for the cost of some of its policies — or perhaps errors — and the reasoning behind such policies. It is very much in the public interest that there should be transparency in relation to those activities and the Central Bank's supervisory powers.

Amendment agreed to.

Mr. J. Mitchell

I move amendment No. 3:

In page 6, subsection (6), lines 7 and 8, to delete "in pursuance of orders under subsection (5)".

Amendment agreed to.

An Ceann Comhairle

We proceed to amedment No. 4 in the name of Deputy Jim Mitchell. I observe that amendment No. 5 is related and I suggest we discuss both amendments together.

Mr. J. Mitchell

I move amendment No. 4:

In page 6, subsection (7), line 10, after "shall" to insert "without delay".

I wish to express my gratitude to the Minister for accepting amendment No. 3. I am very interested in the points made by Deputies Gay Mitchell, Rabbitte and Yates. While Deputy Gay Mitchell is my brother he was also the last Chairman of the Committee of Public Accounts and his work in that committee should be recognised. Indeed, he is largely responsible for the Bill before us which is a significant achievement. It may well be that I, as his successor as chairman of the committee can explore the point concerning the accountability of the Central Bank without, as Deputies said, infringing its independence on currency issues. It will be a difficult task but is one that ought to be studied and I intend to do so. This legislation does not make it mandatory that reports be made without delay. Amendments Nos. 4 and 5, seek the insertion of the words "without delay" and "at the earliest opportunity" in subsection (7). Will the Minister of State agree to accept them?

Ms E. Fitzgerald

I accept the principle of the amendments and I will move amendments on Report Stage to deal with the points made.

Amendment, by leave, withdrawn.

Amendment No. 5 not moved.

Question proposed: "That section 2, as amended, stand part of the Bill."

Mr. Rabbitte

May I ask the Minister of State, since she was under the impression that the Minister for Finance did answer to the House in respect of the affairs and decisions of the Central Bank, whether on reflection she would consider — she has available to her expertise which is not available to an Opposition spokesperson — taking on board the drafting of a suitable amendment to require the Central Bank to be responsible in certain limited respects to the Committee of Public Accounts? All my colleagues agree that we are not trying to abrogate the independence of the Central Bank but we have seen, during the crises in the currency markets in recent months, precisely how important a role the Central Bank has to play in terms of the knock-on effect of decisions it makes throughout the economy. There has been some very critical public comment in newspaper articles and so on about the conduct of the Central Bank. Indeed, some articles written by present or former staff of the Central Bank raised issues of public concern.

This Bill presents us with an opportunity to make the Central Bank accountable to this House in respect of certain matters. The Minister may wish to take that on board. We cannot put questions about something as important as interest rates to the Minister for Finance in this House because he will say it is a matter for the Central Bank. Deputy Yates instanced the developments in building societies in recent weeks when again, as a result of an Act passed by this House a few years ago, responsibility was seen to rest with the Central Bank. Your office, Sir, informed me that the Minister for Finance will not take questions relating to the affairs of those financial institutions. The Central Bank should not be shrouded in secrecy. We are not trying to encroach on its independence, but we are entitled to know the rationale behind certain decisions.

Mr. Cullen

We have had the experience of the past few months to draw on in regard to what my colleagues said, but, inevitably, similar situations will arise in future. The apparent unaccountability of the Central Bank must be seriously questioned. The thrust of this Bill is in the right direction and given the move towards monetary union, the problems in the exchange rate mechanism and the decisions that inevitably will have to be made — some of which will be made in the calm light of day but others in a crisis — it is vital that the Central Bank in particular must in some way be accountable for its actions. The past six months have clearly shown that. That would be welcomed in general, perhaps not by those in the Central Bank, but by the community at large and particularly by Members of this House. Given our past experience and the likelihood of the Central Bank having to make major decisions in the future, it must be accountable to somebody and this is an opportunity to address that issue. Therefore, I welcome this proposal.

Ms E. Fitzgerald

The Deputies have raised two separate issues. Deputies Rabbitte and Cullen raised the question of accountability to this House of the Central Bank's economic policy, exchange rate policy, interest rate policy and so on. The appropriate forum for an in-depth examination of the economic policy of the Central Bank will be the new finance committee which will be set up by this House. Under the Central Bank Act, the Central Bank has statutory independence. What the Deputies have proposed does not arise under a Comptroller and Auditor General Bill which deals with accountability for moneys voted by this House. Because Central Bank moneys are not voted by this House, the accountability of the Central Bank cannot be dealt with under this Bill and the general question of economic policy does not arise.

The Bill deals with value for money audits, not the policy underlying the particular spending programmes. It deals with the effectiveness of those spending programmes and individual Ministers are answerable to this House in regard to the policy issues. Serious economic policy issues have been raised and Members are concerned with the area of economic policy which is handled by the Central Bank, but, as I said, the appropriate body to discuss those issues will be the new finance committee.

Mr. G. Mitchell

I agree with the Minister that policy issues are not a matter for the Committee of Public Accounts or the Comptroller and Auditor General, they are an audit or accounting function. The Minister of State has missed the point to some extent because it is not true that only agencies whose moneys are voted by this House have an accounting officer. The NTMA has an accounting officer and under this procedure the IDA will appoint an accounting officer. The Bill will empower the Comptroller and Auditor General to carry out a range of functions and remove other functions from him. For example, he will no longer audit commercial State-sponsored bodies because that is considered part of the remit of the Oireachtas Joint Committee on Commercial State-sponsored Bodies. The Comptroller and Auditor General will be assigned all the non-commercial areas, including the IDA, but the Central Bank and An Bord Pleanála are part of the non-commercial area. It would be within the terms of this Bill — and it should be amended if the Minister does have the power — to appoint an accounting officer for the Central Bank and An Bord Pleanála and any other non-commercial agency. In that way non-commercial agencies — all the pieces of the jigsaw — would come under the control of the Comptroller and Auditor General and his report would be brought before the Committee of Public Accounts. That would not affect their independence or interfere with their policies, it is simply a matter of having some accountability procedure.

As Lord Mayor of Dublin I was invited to make an official visit to London recently, the first such visit in the history of the State. While there I had occasion to have lunch with the Governor of the Bank of England and I asked him if he had appeared before parliamentary committees. He said that he did so regularly, yet the Bank of England is an independent body. I accept that the relationship between the Chancellor of the Exchequer and the Governor of the Bank of England is different from the relationship between the Minister for Finance and the Governor of the Central Bank. Nevertheless, we have created a certain amount of independent bodies, for example, the Central Bank and An Bord Pleanála which, in principle, is wrong. We are the Legislature and under the Constitution this is the House of Representatives. We are not just a lawmaking body, the Executive and their agencies are accountable to us. In this Bill we are updating the powers of the Comptroller and Auditor General, the supreme auditor of the State, an officer of the Constitution working for this House. We are also updating the powers of the Committee of Public Accounts and we should seek to make those agencies accountable. I am not saying we should interfere with their independence, they are entitled to that but this Bill should, in particular, deal with their financial accountability. Therefore, I ask the Minister to consider this matter before Report Stage because this principle is well covered in the Bill.

Mr. J. Mitchell

Agencies such as the Central Bank and An Bord Pleanála, like the courts, are entitled to have an independent role in certain respects. At the same time, their actions or inactions, competence or incompetence, negligence or otherwise can cost taxpayers a great deal of money. Under this Bill the question of negligence or competence is not properly addressed and such agencies would not be answerable to this House. I do not wish to curtail the independence of the Central Bank in dealing with the defence of our currency, but it is worth noting the position of the Bundesbank in Germany or the Federal Reserve in the United States. However, I would not wish to see the Central Bank becoming an instrument of Government policy to be used at the whim of the Government, which is the case in the UK. It is important that the Central Bank maintains its independence in key respects, but that must be reconciled with the need for accountability to this House.

Ms E. Fitzgerald

I listened carefully to the Deputies. Two separate points are being made in relation to the Central Bank. I take on the board the point made in relation to the inclusion of An Bord Pleanála in the Schedule, and an amendment to this effect can be put down.

The points made in regard to the Central Bank are too wide to take on board in this legislation — they have many ramifications, for example, whether the duty of the Central Bank in regard to economic policy should mean a loss or a net gain to the Exchequer. The role of the Central Bank in regard to economic policy is a much wider issue, and I do not think it can be governed by short term profit and loss considerations within the running of the bank. That is not the way to deal with economic and monetary policy. As I suggested, the appropriate forum in which to discuss the role of the Central Bank, and that ought to be a very useful debate as this morning's debate has been useful is the Finance committee which will be set up by this House, and out of which some changes may arise.

Mr. G. Mitchell

I welcome the Minister saying that she may include An Bord Pleanála in the Schedule. Will the Minister undertake to look at the question of the accountability of the Central Bank in terms of an accounting officer or of how it might account to the House? I will not press the point further, but it should be looked at.

Ms E. Fitzgerald

I can give the Deputy an undertaking that that issue will be examined.

Mr. Rabbitte

The Minister referred to two distinct matters being raised here, one of which relates to economic policy. To what does the second matter relate?

Ms E. Fitzgerald

It relates to the auditing of the Central Bank and whether that audit comes within the ambit of the Committe of Public Accounts. The economic policy issue does not arise under the Bill.

Mr. Yates

I wish to raise a separate technical point under section 2, which I would like the Minister to clarify. In regard to the control of disbursements of money from the Central Fund by the Comptroller and Auditor General, I understand that only four-fifths of a Department's Estimate can be expended without a Vote being approved by this House. A number of new offices and Departments were set up this year, for example, the Office of the Tánaiste and the Department of Equality and Law Reform. I realise that the Department of Enterprise and Employment was previously the Department of Industry and Commerce. How is it legal for new Departments to spend money and for the Comptroller and Auditor General to release money when the Department, as such, did not exist previously? This section deals with the disbursement of money by the Comptroller and Auditor General out of the Exchequer account in the Central Bank. How is the £830,000 payable to the Office of the Tánaiste legal under this section?

Ms E. Fitzgerald

I can certainly give the Deputy a reply in regard to the Office of the Tánaiste.

Mr. Yates

Perhaps the Minister's salary——

Ms E. Fitzgerald

My salary is paid by the Department of Finance. With regard to the staff in the Office of the Tánaiste, the salary of the assistant secretary, who was only appointed at the beginning of the week, is currently being paid by her parent Department, the Department of Social Welfare. Some staff will be transferred from the Office of the Revenue Commissioners as they are surplus to requirements there and they will carry out certain functions in the Office of the Tánaiste. Pending the approval of a Vote by the House, they will be paid by the Revenue Commissioners. Therefore, it is all legal.

Mr. Rabbitte

I wish to refer again to the distinction the Minister has drawn between economic policy and auditing the accounts of the Central Bank. I fully appreciate that distinction, but accountability has wonderful ways of working in practice. In my experience, while the Committee of Public Accounts always scrupulously acknowledged that its role was an accounting and value for money one, it was very difficult on occasion to distinguish that role from questions of policy without formally going into that. Under the chairmanship of Deputy Gay Mitchell, members of the committee never felt unnecessarily constrained in this area. I do not know what Deputy Mitchell major will be like in the chair. My only attempt at getting in so far was ruled out of order last week.

Mr. J. Mitchell

I can assure the Deputy that I intend to exploit the precedents to the full.

Mr. Rabbitte

I look forward to a more lax rule from here on in.

The point I am making is that once the Central Bank is listed in the Schedule and is accountable for the accounts of its office, it is inevitable, in the normal process of accountability and democracy, that certain questions will be raised. The very fact of being accountable and having to appear before a Dáil committee will put a somewhat different complexion on the traditional secrecy of the Central Bank.

Question put and agreed to.

SECTION 3.

Mr. Yates

I move amendment No. 6:

In page 8, subsection (9), line 26, to delete "April" and substitute "February".

This is a small but significant amendment. At present Departmental accounts are prepared on a calendar year basis — they start on 1 January and terminate on 31 December. The Bill proposes that all spending Departments must submit their accounts to the Comptroller and Auditor General before 1 April. That is an unduly long period. A greater degree of expedition needs to be introduced into the system, and I propose that the date be brought forward to 1 February. I know that the civil servants will oppose this proposal as it means more demands would be put on them and they would have to act more promptly. However, I believe the benefits of bringing the date forward to 1 February would be seen throughout the system. Under the present system, the Comptroller and Auditor General does not complete his review of the accounts until the autumn, the report has then to be published and the Committee of Public Accounts do not have the opportunity to look at it until the end of the year. This means that the process of accountability is historic; the examination takes place almost a year after the expenditure has occurred. We need to expedite the process whereby the Comptroller and Auditor General receives the accounts and produces his report and the Committee of Public Accounts commences work. The clear impression is that the Committee of Public Accounts and the Comptroller and Auditor General start work long after the horse has bolted. This, of course, is of no comfort to the taxpayer who has to foot the bill.

Ms E. Fitzgerald

The date for the submission of appropriation accounts to the Comptroller and Auditor General is being brought forward in the Bill from 30 April to 31 March. It must be borne in mind that a number of Departments will sometimes have to wait for accounts from different offices before they are in a position to present their accounts. While we are in a position to bring forward the date by one month at this stage it is not possible to meet the date proposed by Deputy Yates in his amendment. Improvements are either being effected or are envisaged in the system. Section 3 (12) provides that the Minister may, by order, vary the date and it is envisaged that we will be able to continue to shorten the time for the submission of accounts. We are trying to meet the spirit of the Deputy's proposal. In view of this, perhaps he will withdraw his amendment.

Amendment, by leave, withdrawn.

Acting Chairman (Mr. Browne

, Carlow-Kilkenny): It is proposed to take amendments Nos. 7 and 9 together, by agreement.

Mr. J. Mitchell

I move amendment No. 7:

In page 8, subsection (10) (b), line 42, after "safeguarding of" to insert "and the maximisation of the benefits derived from".

There is an onus on Departments and agencies which receive money from the Exchequer to not only safeguard money but also to maximise its use. When I was Minister for Transport and Minister for Posts and Telegraphs I was somewhat astonished to find that, while the private sector was busily exploiting the property boom during that period, as it has done during the preceding period, CIE and the Post Office, who had extensive property assets, did not maximise the use of that property. A great opportunity to bring in revenue by the proper use of these assets was lost. Although authorities are more alert to these possibilities today, they are still not nearly alert enough. We should put an onus on public Departments and other agencies to whom this Bill applies to maximise the potential of the assets at their disposal.

Mr. Cullen

I fully support the point that has just been made by Deputy Jim Mitchell. There is an obvious impact from maximising benefits in this area. I can think of an example where the opposite happened when the IDA were forced, because of Government policy at the time, to sell off many of their land banks when the land boom was over when huge losses were sustained, even on the original prices paid for the land. The point Deputy Mitchell is making is that whenever the opportunity occurs to maximise assets, it should be seized. Nothing should be allowed to remain static or wrapped in cotton wool and left to one side. The Comptroller and Auditor General is looking for value for money. This directly encompasses that concept of getting value for money on an ongoing basis. I support the amendment that has been put down here and I think it should be included in the Bill.

Ms E. Fitzgerald

I appreciate the points the Deputies are making. We all want to ensure maximum benefit from public expenditure of any kind. It is considered, however, that the provision in section 9 of the Bill, giving the Comptroller and Auditor General full power to carry out examinations of the economy and efficiency of all Departments and bodies audited by him or her under this Bill or under any other Act, confers full powers which will cover the point Deputies are trying to make. Therefore, the words the Deputies want to add are redundant. We feel that the formulation of the Bill, as drafted, covers the point in the best wording possible.

Mr. J. Mitchell

I am not absolutely convinced that it is adequate. Certainly, my experience as a Minister taught me that civil servants adhere to the letter of the law and confine themselves to what is specifically required by law — and with good reason. If they do not they are likely to be tripped up and asked why they had done something when they did not have specific authority to do so. Adding the word "proposed" or similar words will impose that specific additional responsibility on Departments and agencies covered by this Bill not only to make sure that money is not used fraudulently or inefficiently but to take advantage of developments and, where possible, to maximise the assets and revenue of such body. In the Department in which I was a Minister huge opportunities were lost to engage in joint ventures, etc. which would have brought in money and saved money for the Exchequer. I know CIE is not covered by this Bill, but when this city was going through a phase of building office blocks CIE left expensive sites lying fallow and derelict. Yet they needed subvention from this House of as much as £109 million per year, although they had the potential to use their assets to better effect to bring in a flow of funds and thereby ease the demand on the taxpayer and on the Exchequer. I would ask the Minister to at least consider this point and see if there is a better formulation she could bring forward on Report Stage.

Ms E. Fitzgerald

The advice I have is that the wording in section 9 empowers the Comptroller and Auditor General to carry out such examinations as he or she considers appropriate for the purpose of ascertaining whether the resources of the Department, person, body or fund have been used, acquired or disposed of economically and efficiently, that the powers already cover the kind of point the Deputy is trying to make and that this is the best way of phrasing it.

Amendment put and declared lost.

Section 3 agreed to.

SECTION 4.

Question proposed: "That section 4 stand part of the Bill."

Mr. G. Mitchell

I welcome this section. While I am on my feet I want to pay tribute to the Secretary of the Department, Mr. Seán Cromien. As Chairman of the Public Accounts Committee I found him very accommodating and understanding. He never went beyond what was proper for him to do but was generous within that and certainly very accessible. I grew to respect him very much in his role as accounting officer. During his time he did accept the recommendation of the Public Accounts Committee that the finance accounts be modernised, and they were modernised. He brought back the new format of the finance accounts to the Public Accounts Committee, and that is something I would like to express my appreciation of, because the finance accounts are now more readable. Hitherto they were not so readable because there were so many notes, etc. Perhaps they could be looked at again to try to make them even more user friendly.

Whereas the Comptroller and Auditor General audited the constituent parts of the finance accounts, he never actually audited the finance accounts and put a certificate on them until now. It is a good principle and a good idea because the whole of the finance accounts will be there together.

One thing I would like to stress is that the Comptroller and Auditor General should not just audit the expenditure but should audit and report on any loss of revenue. He does that very well where he is aware of it. Let me give an example. One of the great scandals that did not get the coverage it should have got was in relation to the belief that somebody had decided to sell off Telecom Éireann and to commission a privatisation report without any ministerial sanction and without the consent of the accounting officer of the Department of Finance. This was an asset, no less an asset than a typewriter, a computer or a land bank owned by the State and the accounting officer should be every bit as accountable to the Public Accounts Committee for the sale of that asset as he would be for the sale of a bit of land, a computer or anything else. Yet he was not aware of this, perhaps because somebody had decided off their own bat to commission a privatisation report from somebody they knew with a view to selling off an asset. That is something that the Comptroller and Auditor General should be empowered to look into and report on. Who would have the authority to do such a thing? I recall doing an interview for "Today at Five" in which they said that later on in the programme they would have the chairman of the Public Accounts Committee who had done an interview, but that interview disappeared and I never found out why that happened. Of all the controversies that came before this House, that one got away. That controversy had the capacity to be the most scandalous — that someone could take a personal decision in relation to an asset that belongs to the people of this country and that the accounting officer of a Department had authority to report that but did not do so, not because of any fault on his part or a failure of the legislation. It is very clear that in that instance correct procedures were not followed. The Comptroller and Auditor General should, in reporting on the Finance Accounts, scan commercial State bodies, which will no longer be within his remit, to ensure that they are not cutting across the remit of the Comptroller and Auditor General or accounting officers, specifically in relation to the disposal of shares or assets which are properly within the ownership of the State.

Mr. J. Mitchell

I very much welcome section 4, which extends significantly the roles of the Comptroller and Auditor General and the Committee of Public Accounts to the Finance Accounts as revised. That measure is very welcome and I hope it will greatly improve the accountability of the Executive in general to this House and the people.

Ms E. Fitzgerald

I thank Deputy Gay Mitchell for his tribute to Mr. Seán Cromien as accounting officer and I shall pass that on. In relation to the attempt being made by interests in Telecom to privatise the company, any such proposal would, of course, have to go before the relevant Minister and the Government. No semi-State body is authorised to privatise itself. That issue does not arise in relation to the Bill.

Mr. Rabbitte

The issue may not arise in relation to the Bill, but the Minister must know that it arises this week, in that the Minister for Finance has confessed to the House that he had no role, good, bad or indifferent, in the proposal to sell off the State's remaining shareholding in Greencore. Greencore executives were involved in seeking purchasers for that stake yet the Minister said that he first heard of it on 16 February. The issue arose in the case referred to by Deputy Mitchell when he spoke about Telecom, leading to investigations into Telecom that unearthed a great deal more than an attempt to bring in consultants to prepare the company for privatisation. It unearthed material that is still the subject of investigation, in respect of which great difficulty seems to have been encountered by the inspector. The issue may not arise in the context of this Bill, but Deputy Mitchell has made a valid point. Perhaps the issue should arise in the Bill if it is within the capability of the House to make provision in that way.

Question put and agreed to.

SECTION 5.

Ms E. Fitzgerald

I move amendment No. 8:

In page 10, subsection (1) (a), line 3, to delete "section 3" and substitute "other sections of this Act".

This is a technical amendment which relates to any audits covered by the legislation to which the previous section 3 of the Act applied.

Mr. G. Mitchell

I hope the Chair will allow me licence to say a few words at this point, as I was Chairman of the Committee of Public Accounts for six years and I now have to leave the Chamber for a while.

Mr. Rabbitte

Another interview with "Today at Five", perhaps?

Mr. G. Mitchell

I am sure that my successor as Chairman of the Committee of Public Accounts will deal very ably with the Bill. I was very privileged to have been a member of the Committee of Public Accounts from 1981 and to have been its chairman for almost six years. I should like to record my appreciation, as already expressed, to the Secretary of the Department of Finance, for the work of the various accounting officers with whom I have dealt. In my time as Chairman of the Committee of Public Accounts my appreciation of the public service grew as I recognised their ability and commitment. In particular, I say a word of very special thanks and appreciation to the Comptroller and Auditor General, with whom I worked very closely, to his staff and the staff of the committee. The Committee of Public Accounts was represented by every party, certainly the make-up of the House was reflected on the committee. In all my time on the committee its members never divided on a party political basis. Some of the issues dealt with by the committee were extremely difficult, particularly during the previous Dáil when the committee dealt with them very well.

I wish also to record my appreciation of the role of the members of the committee. Certainly I got a lot of favourable comment — of course people knew I was Chairman of the Committee of Public Accounts — but other members of the committee gave me great leeway and there was a tremendous working relationship. The Committee of Public Accounts proves that, despite what is said about politicians, they can, when they put their minds to it, get together and do good work. The Committee of Public Accounts discharges a very important function on behalf of this House. Certainly in my time the committee had the co-operation of the Department of Finance, the Comptroller and Auditor General and the staff of the House and of the committee itself in carrying out that function. That appreciation should be placed on the record of the House.

Acting Chairman

Thank you, Deputy. The Deputy was probably out of order but he was very pleasant about it.

Ms E. Fitzgerald

Without wanting to be out of order also, if Deputy Mitchell has to leave the Chamber, I should like to express appreciation of the work he has done as Chairman of the Committee of Public Accounts. The Bill before the House today is a tribute to the work of the committee and its chairman. It deals with issues raised by the Committee of Public Accounts and discussed with Deputy Gay Mitchell, as chairman of the committee, and the Comptroller and Auditor General. The Committee of Public Accounts has long pressed for a wider remit for the Comptroller and Auditor General in relation to the value for money audit, which is the central thrust of the Bill introduced in a positive spirit of co-operation.

Mr. Rabbitte

As I am the only member of the previous Committee of Public Accounts in the Chamber, it would be appropriate for me to say on behalf of all parties in the House that Deputy Gay Mitchell conducted himself as chairman of the Committee of Public Accounts with great even-handedness, skill and fairness throughout my time on the committee. The House owes a great deal to the dedication and efficiency with which Deputy Mitchell conducted his chairmanship of that committee. The previous Committee of Public Accounts was a working committee of the House in the best sense of the word. As Deputy Mitchell said, some of the issues dealt with were controversial. I particularly recall the Carysfort affair, which would have tested the wisdom of Solomon. Much skill was needed to steer a course through a Scylla and Charybdis and come out at the other end, which Deputy Mitchell managed to do. I cannot account for the missing interview with Deputy Mitchell——

Mr. Yates

Several others are not missing.

Mr. Rabbitte

In my years as a member of the Committee of Public Accounts that is the only interview missing. There was another famous interview, which concerned an occasion——

Acting Chairman

Deputy Rabbitte, I do not want you to play the role of shanachie now.

Mr. Rabbitte

I shall avoid that danger. During Deputy Mitchell's time as Chairman of the Committee of Public Accounts he missed another interview. At the time we were thousands of feet under ground at Tara Mines, inspecting whether the State had got a fair return for its stake, which had been disposed of just prior to our visit. One of Deputy Mitchell's colleagues was responsible for having him summoned to one of the pit stops to take a telephone call for "Morning Ireland". Of course there was no such telephone call, and by the time Deputy Mitchell returned to the truck the rest of us had gone and had left him underground. That incident is not to be taken as any kind of comment on the very valuable work done by Deputy Mitchell for the Committee of Public Accounts.

Amendment agreed to.

Question proposed: "That section 5, as amended, stand part of the Bill."

Mr. J. Mitchell

Section 5 (1) (a) (ii) contains the exclusion "(other than a fund under the control of the Courts)". Will the Minister clarify the meaning of that exclusion? Is it intended to include, for instance, the Funds of Suitors? Does the exemption affect fines imposed by the courts but uncollected?

Ms E. Fitzgerald

Because of the constitutional independence of the courts the provision of this section will not apply to the various funds under the control of the courts. There cannot be dual control because of the constitutional separation of powers. That is the issue.

Mr. J. Mitchell

In my capacity for some time as chairman of Dublin Corporation traffic sub-committee I know there is great concern at the lack of effectiveness in enforcing traffic law and in collecting fines imposed by the courts. This should be a legitimate concern of this House. Is this an area exempted by this phrase, or will the House continue to be able to question the Minister for Justice and the Department on the collection of fines and so on?

Ms E. Fitzgerald

I understand that the House will still be able to question the Minister for Justice on the collection of fines where there is specific control exercised by the court over funds that fall within the specific jurisdiction of the courts which, because of the separation of powers, could not be included in this Bill.

Mr. Cullen

In regard to the first Schedule — there may be an obvious answer to this — I see Trinity College and so on listed. Why is University College Limerick not listed, or indeed University College Dublin, the new Dublin City University? Are all of those bodies specified elsewhere, or do they come under some different heading altogether? Why is it that only Trinity College and St. Patrick's College, Maynooth are listed or included?

Ms E. Fitzgerald

These other bodies have been included already. The list in the First Schedule merely includes those universities which have not been included previously.

Mr. Cullen

How could the new University of Limerick have been included already since it is a new university?

Ms E. Fitzgerald

I might refer the Deputy to section 14 (2) of the National Institute for Higher Education, Limerick, Act, 1980.

Mr. J. Mitchell

With regard to section 5 (1) (a) (iv) can the Minister elaborate on the European Guidance and Guarantee Fund and explain the mechanisms under which moneys are expended by the Minister for Agriculture, how they are recouped and the responsibility of this House in vetting that expenditure and its disbursement?

Ms E. Fitzgerald

I am not here to make a long presentation on that matter. If the Deputy has any specific questions in relation to that overall area they would be better tabled to the Minister for Agriculture. The relevant subsection makes statutory provision for the audit by the Comptroller and Auditor General of the Irish operations of the guarantee section of FEOGA. The House will be aware that we will be establishing an International Affairs Committee which will subsume the functions of the Joint Oireachtas Committee on Secondary Legislation of the European Communities. That will afford Members an opportunity to tease out all sorts of detail in relation to FEOGA funds. The provision in this Bill is merely to bring that particular audit under the control of the Comptroller and Auditor General.

Mr. J. Mitchell

I want clarification of the powers being given the Comptroller and Auditor General and, therefore, the Committee of Public Accounts in this respect. For example, would we be able to delve behind intervention costs, which is what this deals with, the whole matter of EC Common Agricultural Policy directly affecting intervention?

Ms E. Fitzgerald

Issues of policy will not, but issues of accountability will be dealt with.

Mr. Yates

Does that mean that matters now pertaining to the Tribunal of Inquiry into the Beef Processing Industry in relation to irregularities would come within the remit of the Comptroller and Auditor General? Is that the type of area about which the Minister of State is talking? Perhaps she could also explain how the European Court of Auditors will relate to the work of the Comptroller and Auditor General. For example, will there be duplication there, or will the Comptroller and Auditor General, in turn, report to the Court of Auditors at EC level?

Ms E. Fitzgerald

As I understand it the Department of Agriculture as an intervention agency is an agent for the European Communities. Where the Department of Agriculture is involved, the provisions of section 4 provide for the audit of the accounts of transactions in the State in each financial year of the guarantee section of the European Guidance and Guarantee Fund as established by the Treaty of Rome and so on. If arising out of such audit there are alleged financial irregularities, they would be matters on which the Comptroller and Auditor General would report to the House and to the Committee of Public Accounts.

Mr. Yates

And the relationship to the European Court of Auditors?

Ms E. Fitzgerald

The European Court of Auditors has a function in relation to auditing and pursuing expenditure of EC moneys. Therefore, there could be some element of overlap there since a lot of the work would be done here at home.

Mr. J. Mitchell

Would the provisions of this section extend, for example, to include insurance cover for export risk where it was found subsequently that the export risk did not arise directly from the State but rather from intervention?

Ms E. Fitzgerald

That is a national scheme and would not be the subject of audit by the European Court of Auditors. If issues arise involving public moneys and bodies included in the Bill, they would be matters on which the Comptroller and Auditor General would be entitled to report, which reports would then be considered by the Committee of Public Accounts.

Mr. Cullen

Is the Minister saying that in the matter of export credit insurance, value for money and the risk involved, henceforth the Comptroller and Auditor General will have a role to play in analysing what was the value for money in regard to the attendant risk and the amount of money granted? For example, if all of the money available under the export credit insurance scheme was given to one industry only, not just one company, could the Comptroller and Auditor General question why it was not given to others?

Ms E. Fitzgerald

When the Bill has been enacted the Comptroller and Auditor General will have responsibility in terms of powers and a value for money audit, for example, of the operations of the Department of Enterprise and Employment. Any issues arising under the Vote for that Department can be examined by the Comptroller and Auditor General and reported on to this House.

Mr. J. Mitchell

I want to ask the Minister one further question in relation to the European Guidance and Guarantee Fund. We may need to tease out this section somewhat more on Report Stage and ascertain whether there is proper accountability in respect of export credit insurance and intervention and how they may relate improperly from time to time. Would the Minister say whether the provisions of this section cover the national lottery and disbursement of such funds? I am very concerned about the attitude obtaining in regard to the national lottery. Is it being assured that somehow it deals with unaccountable funds, that its funds are less rigidly spent and can be obtained more easily than normal Exchequer moneys? The attitude appears to be: we will get it from the national lottery, as though they were not public moneys. Can the Minister say whether the Comptroller and Auditor General and the Committee of Public Accounts in auditing the national lottery will be able to examine the efficacy and efficiency and indeed the justification for some or all of that expenditure?

I have heard some hair-raising stories about the way money was spent; I have heard stories about Ministers at functions announcing a cheque would arrive the following day without any application for the money being made. I have heard that two such instances occurred during the past year. Frequently, it is paid under the guise of the national lottery as if money can be slipped through without anyone being held accountable.

Ms E. Fitzgerald

Disbursements under the national lottery included in the Estimates will be subject to the terms of section 9 which relates to the value for money audit.

Mr. J. Mitchell

Will the Minister of State elaborate on that? She stated that disbursements under the national lottery included in the Estimates will be subject to the terms of the Bill. Are any disbursements under the national lottery not included in the Estimates and, if so, who has to account for them and in what manner?

Ms E. Fitzgerald

The projects to which the Deputy referred are covered by the Estimates. For example, youth and sport grants are covered in the Estimate for the Department of Education while amenity grants are covered in the Estimate for the Department of the Environment. They will be subject to the terms of the Bill. Everything, except operational costs, is covered by the Estimates and, therefore, will be subject to the terms of the Bill.

Mr. Rabbitte

As I understand it, the Court of Auditors will be responsible for auditing European moneys disbursed here. However, the export credit insurance scheme, for example, falls directly within the ambit of the Comptroller and Auditor General and there is nothing to prevent him carrying out an assessment of the efficacy of that scheme. In other words, to answer Deputy Yates's question, this major issue of concern to the beef tribunal could have been investigated by the Office of the Comptroller and Auditor General provided, of course, he had been given the basic facts. For example, one would have to know — we still do not know this — when the export credit insurance scheme was revived. No date for that can be found. There are several other aspects of it which it would not be proper to go into now. While we have to be very wary of the many people who criticised the cost of the beef tribunal and approached the issue with value laden judgments, this work could have been done by the Comptroller and Auditor General provided one had been given full and truthful answers to parliamentary questions and the information had been made available.

Is it not the case also that there is nothing to prevent the Comptroller and Auditor General, or the Committee of Public Accounts suggesting to the Comptroller and Auditor General, that other instruments of economic policy be assessed in terms of value for money? For example, I recall the Comptroller and Auditor General in the last Dáil carrying out an audit report on the efficacy of section 84 based lending. He dealt with the cost to the Exchequer, whether it was truly an instrument of industrial development and whether the lending institutions benefited most rather than the borrower and so forth. Finally, may I inquire who will be accounting officer for Temple Bar Properties Limited?

Ms E. Fitzgerald

Temple Bar Properties Limited is dealt with in section 16 (1) of the Temple Bar Area Renewal and Development Act, 1991 under the aegis of the Department of the Taoiseach. I am not sure if it is the Assistant Secretary in that Department who is a member of the board or——

Mr. Rabbitte

I thought the Minister of State, Deputy Stagg, had responsibility for that issue.

Ms E. Fitzgerald

It now rests with the Department of the Environment.

Mr. J. Mitchell

It is excluded under the Second Schedule.

Ms E. Fitzgerald

Up to now its accounts have been audited by the Comptroller and Auditor General but from now on as a commercial State-sponsored body it will be excluded under the terms of sections 8 and 9.

Mr. Rabbitte

Therefore, it will be a matter for the accounting officer of the Department of the Environment?

Mr. J. Mitchell

That company will not be held accountable?

Mr. Yates

It will still be a State company, just like Aer Lingus.

Mr. Rabbitte

It is on occasions like this that one can pick up information which might be useful subsequently. Will Temple Bar Properties Limited be held accountable through the accounting officer of the Department of the Environment or the Department of the Taoiseach? During the term of office of a certain previous Taoiseach one could have read political messages into that; in other words, Temple Bar Properties Limited would not have been as important as it was when first established if it was not under his aegis but under that of the Department of the Environment. Have we established that it will be the accounting officer of the Department of the Environment who will be responsible and that the Minister of State, Deputy Stagg, will be responsible for this element of urban renewal?

Ms E. Fitzgerald

I did not come to the House with a detailed brief on Temple Bar Properties Limited as I did not anticipate that this question would be raised. I will check the matter and communicate with the Deputies.

Mr. J. Mitchell

It seems clear from the Second Schedule to the Bill that Temple Bar Properties Limited will be excluded from application of sections 8 and 9. In that event it would seem that no accounting officer will be held accountable to this House, through the Committee of Public Accounts, for Temple Bar Properties Limited. It may be that as a result of this legislation it will be the responsibility of the Joint Committee on Commercial State-sponsored Bodies.

I wish to give notice that, to cover the points raised by Deputy Rabbitte, I intend to table two amendments on Report Stage to include Temple Bar Properties Limited in the First Schedule and to exclude it under the Second Schedule. Those amendments would have the effect of making Temple Bar Properties Limited answerable to this House through the Committee of Public Accounts. The point made by Deputy Rabbitte is a valid and interesting one.

The national lottery is not mentioned in any of the Schedules but An Post is. Under the Second Schedule it is excluded from the application of this Bill and, therefore, will not be covered by the Comptroller and Auditor General and the Committee of Public Accounts. Will the Minister of State clarify the position because the national lottery is deemed to be a subsidiary of An Post and it is excluded under the Second Schedule from application of sections 8 and 9? Would the Minister of State be prepared to include it in the Bill and within the remit of the Comptroller and Auditor General?

Ms E. Fitzgerald

As the national lottery is a wholly owned subsidiary of An Post it is included, with An Post, in the Second Schedule. However, the disbursements under the national lottery which are included in the relevant subheads in the Estimates, excluding administration costs and the commission paid to agents, are covered under the Bill and will be audited by the Comptroller and Auditor General.

Mr. Cullen

I am glad the point about Temple Bar Properties Limited was raised by Deputy Rabbitte. Notwithstanding the fact that the Joint Committee on Commercial State-sponsored Bodies will have a role to play, I have tabled an amendment to reverse this decision and give the Comptroller and Auditor General a role in regard to the commercial State-sponsored bodies. It is interesting that as we go through the Bill we can think of examples as to why he should have this role, notwithstanding the role of the Oireachtas Joint Committee on Commercial State-sponsored Bodies in this area. We will be addressing this at a later stage but I do not believe that all the commercial side of the activities of the Comptroller and Auditor General should be excluded from his remit. I do not understand that and I wait to be convinced during this debate that it is the right course of action.

Mr. Yates

In the First Schedule relating to section 5 the Defence Forces Canteen Board is included. I would have thought that would come under the Vote for the Department of Defence. Perhaps the Minister of State would clarify why that is the case?

Ms E. Fitzgerald

I understand it is a private organisation.

Mr. Rabbitte

Contract catering.

Mr. McCormack

I am anxious to have further clarification regarding national lottery funding. We are jumping from one section to another but that is the nature of the debate at this stage. What Minister will be responsible for the disbursal of national lottery funds? I had the privilege of sharing a constituency with the previous Minister in the last Government who had responsibility for disbursing national lottery funds in west Galway, and who referred to it widely during his election campaign.

Mr. Rabbitte

It did not seem to work.

Mr. McCormack

In fact a leaflet was issued to each parish indicating the amount of national lottery funds expended by him in each of them. As Deputy Rabbitte observed, it did not seem to work because the people realised it was their money he was spending and, unfortunately — I am not sure if I should use that word — that Minister was not returned to the Dáil.

Acting Chairman

We are debating section 5.

Mr. McCormack

Will the practice continue, will it be catered for in this Bill?

Mr. Broughan

I wish to echo some of the queries raised concerning Temple Bar Properties Ltd. There seems to be an odd relationship, to say the least, between Temple Bar Properties Ltd. and the Temple Bar renewal project which I understood also came within the remit of the Department of the Environment. As one of the local representatives in the area people have been saying to me recently that the Temple Bar Council is unhappy with the close relationship between two semi-State bodies and the development of the area. I would welcome any further information that the Minister of State could provide on this matter.

Ms E. Fitzgerald

I did not come into the House today with a detailed brief on every semi-State body listed in the Schedules. I am not in a position to answer questions on the operational details of those bodies. The principle adopted in this Bill — we will be coming to it in later sections — was that the commercial semi-State bodies would not be audited by the Comptroller and Auditor General. They would be in a position to obtain their own audit advice and the commercial auditors would have the normal duties of commercial auditors in any public company. The Comptroller and Auditor General's function will be extended in relation to the areas which will be assigned to his responsibility. That is the basic principle and thrust of the Bill.

Points have been raised in relation to Temple Bar Properties Ltd. Again, I am not in a position to deal with those matters raised by Members today but I will endeavour to have them addressed and get back to the Deputies concerned.

Mr. J. Mitchell

This is an important section of an important Bill. It deals with the question of which bodies will be audited by the Comptroller and Auditor General. I take the point raised by Deputies Rabbittee and Cullen and other Deputies in relation to so-called commercial semi-State bodies, some of whom are in receipt of very substantial annual grants from the Exchequer. Where there are substantial grants, as in the case of Córas Iompair Éireann, and the Exchequer may be subventing perhaps £100 million per year to that body, surely the Comptroller and Auditor General should have some residual inspection powers in respect of that money voted by the Oireachtas? He may not necessarily have to audit such bodies but he should be able to report to the House on whether subvented money is being expended properly, efficiently and effectively. Will the Minister agree to amend the Bill, if necessary, to grant the Comptroller and Auditor General inspection powers where substantial public funds are invested in State sponsored bodies designated as commercial?

Ms E. Fitzgerald

The House through its Oireachtas Joint Committee on Commercial State-sponsored Bodies will have an opportunity to debate the functions of those bodies. The thrust of this Bill is to bring into audit and to broaden the scope of audit of a variety of non-commercial companies which are in receipt of substantial public moneys dealt with under section 5 and listed in the First Schedule to the Bill. The decision taken has been that the commercial semi-State bodies will be dealt with by the commercial auditors who have duties and responsibilities under law.

Acting Chairman

Is section 5, as amended, agreed?

Mr. J. Mitchell

On Report Stage I may table amendments to deal with the question of commercial State-sponsored bodies and inspection rights for the Comptroller and Auditor General.

Question put and agreed to.

SECTION 6.

Amendment No. 9 not moved.

Acting Chairman

Amendments Nos. 10, 13 and 14 form a composite proposal. Amendments Nos. 15, 18 and 19 form a related composite proposal and, therefore, may be discussed together. Is that agreed? Agreed.

Mr. J. Mitchell

I move amendment No. 10:

In page 12, subsection (5), between lines 33 and 34, to insert the following:

"(b) The date specified under this subsection shall not be later than 6 months following the end of the financial year to which the accounts relate."

Section 6 (5) states:

(5) The accounts of a health board shall be submitted to the Comptroller and Auditor General for audit on or before such date in the year following the financial year to which they relate as may stand specified for the time being by order made for the purposes of this section by the Minister after consultation with the Minister for Health.

The amendment proposes that the specified date shall not be later than six months following the end of the financial year to which the accounts relate. In this case it should not be more than six months after the expiry date of the financial year to which the accounts apply. I consider that a reasonable provision bearing in mind what Deputy Yates and the Minister stated earlier about bringing forward the accounts of Departments to 1 April rather than 30 April. Indeed, Deputy Yates wished to bring the date forward to the end of February or the beginning of March. I hope the Minister will accept this amendment, the other amendments are similar. One set of amendments relates to the health boards and the other set relates to the vocational education committees. There is a dictum in law that justice delayed is justice denied and this could also be applied to accounts. If accounts are delayed very often the focus on them is lost and real accountability may also be lost. There is a need to have these accounts brought forward at the earliest possible date.

Ms E. Fitzgerald

I agree with what the Deputy is trying to achieve but in the circumstances the import of his amendments may not be the most effective way to do it. If we specify a date in legislation it tends to be the date that will accommodate the slowest body in the system. While many bodies are operating computerised systems and are in a position to present returns very readily, some bodies still retain manual systems. To specify a date that accommodates the slowest body may give the wrong signal to those who can readily present the information. The way we will deal with this in the Bill is to specify that the dates will be set by regulation. That is preferable. Some bodies will be well able to have their accounts ready before six months and we hope to make progress in tightening the dates progressively by ministerial order. Realistically speaking, this is the best course to follow.

In some cases it may be an improvement to have the information presented within a four month or six months period but I hope it will not be too long before we can expect an even better performance. As soon as the Bill comes into effect ministerial orders will be made and the dates will be set as tightly as the Minister for Finance believes can be achieved. A regular review of the dates of submission will be instituted with a view to achieving progressive improvements.

It must be borne in mind that the Comptroller and Auditor General will be taking on the audits of the vocational education committees and the health boards for the first time. Also he may have views on what are appropriate submission dates and this needs to be taken into account. Obviously he will be anxious that the accounts be presented to him as soon as possible.

I agree with the spirit of what the Deputy is trying to achieve. I now give an undertaking to Members that we will endeavour to bring forward the dates as speedily as possible. If we were to fix the date in legislation we would have to accommodate the slowest body in the system and that would not achieve what we are setting out to do, the speedy presentation of accounts and the speedy audit of them.

Mr. Yates

I rise to support Deputy J. Mitchell. The Minister's point does not hold good. If she still has ministerial powers she can shorten the timeframe and set an earlier date at a later time. Deputy Mitchell seeks to set an absolute limit of no more than six months. I do not think there can be any reasonable excuse for not doing that. At present there is no time limit on the submission of accounts by health boards. When this goes beyond parliamentary scrutiny and accountability, the Minister might not be in the job and her assurances may then be worthless. I think it is only reasonable that this modest time limit suggested by Deputy Mitchell should be what the House insists on. If at a later date computerisation means that the timeframe can be shortened by way of ministerial order, that does not take from the point Deputy Mitchell is making.

Mr. Cullen

I agree with the points made by previous speakers. I very much welcome this section which provides for the audit by the Comptroller and Auditor General of the accounts of the health boards. This is long overdue. Huge sums of State moneys are being dispersed to the health boards and this accounts for the largest budget of any Department. The Comptroller and Auditor General will spend a great deal of time in the short term examining this. It is essential that a time limit be set. As Deputy Yates said, it can always be shortened; but it is very important that a definitive date is stated to ensure that things happen as quickly as possible and meet the Comptroller and Auditor General's requirements.

As the Minister may well know, all the assurances in the world need not necessarily ensure that things happen. I would like to see a time constraint because it would act as a signal to the health boards that change will occur. The opportunity exists in this Bill to set a time limit and I think a time limit should be set for the health boards, given the huge sums involved. The time limit can always be foreshortened at some date in the future.

Mr. McCormack

I also support the amendment. We in this House have to accept responsibility for what we put in this Bill and I think specifying a period of six months is reasonable. Promises are not just good enough. Several health boards, including the health board in my area, the Western Health Board, are suffering because at the end of the year they are often owed £3 million or £4 million by the Departments. They are struggling to maintain services in spite of the fact that they may be owed this money for 12 months or more. The figures are astronomical and cannot be allowed to continue. We must make provision for this in the legislation.

Mr. J. Mitchell

I ask the Minister to reflect again on this group of reasonable amendments. Anybody who has been a member of a local authority will know that audits have been delayed in many of the bodies referred to in this group of amendments by as long as three or four years. When I was Minister for Transport I was astonished to find that many of the harbour authorities had not had an audit for four years. That should not be the case. That means there is no accountability for public funds.

As Deputy Yates said, six months is the outside limit, and in a sense that is as much a restriction on the Minister as on the agencies concerned. The Minister, if he or she sees fit, may shorten the period; so it is a little disingenuous of the Minister of State to say that the six months will become the latest date to become enshrined in the legislation. It will not become the latest date if the Minister is determined that an earlier date will be required by order.

Mr. Broughan

I welcome the assurances the Minister has given in this regard. I support her. In view of the extension of the Comptroller and Auditor General's powers in these areas is it envisaged that in the future, with the possible reorganisation of the health boards and, in the field of education, with the setting up of local education boards, his control will extend to all areas? In the areas of health and education, voluntary bodies over which we have no control whatsoever spend huge amounts of State money.

Ms E. Fitzgerald

First, I will reply to Deputy Broughan. The principle of this Bill is to extend the powers of the Comptroller and Auditor General to local bodies which are not directly elected and which deal directly with substantial amounts of central Government funds. I presume that principle will continue to apply in any reorganisation. May I say to the Deputies opposite that I take very seriously the assurances I give to the House on speeding up the audits and they are given in good faith.

This group of amendments relates to various bodies — from the Bray vocational education committee, which administers one school, to the health boards, including the Eastern Health Board, which deal with hundreds of millions of pounds. There is a diversity of systems in place. I know that in part of the Eastern Health Board manual accounting procedures are still in place, with obvious inherent delays. When the Comptroller and Auditor General takes over the auditing function he will be as concerned as the Deputies to ensure that the accounts are presented speedily so that he can get to work on them. I have given an assurance to this House that it is the solemn intention to shorten by regulation the timeframe to what we can humanly achieve.

Amendment put and declared lost.

Acting Chairman

We now come to amendment No. 11 in the name of An tAire. Amendments Nos. 12, 16 and 17 are related and therefore these amendments may be discussed together by agreement.

Ms E. Fitzgerald

I move amendment No. 11:

In page 12, subsection (6), line 37, after "accounts" to insert "to the board and".

This and the subsequent amendments are technical ones which provide that health boards will receive copies of their audited accounts together with the certificate and report of the Comptroller and Auditor General at the same time as they are submitted to the Minister for Health. The health boards will publish these documents when they have been laid before the Houses of the Oireachtas. The purpose of the amendment is to ensure that health board members and the Minister receive the accounts simultaneously. The intention is similar in the amendments relating to vocational education committees.

Amendment agreed to.

Ms E. Fitzgerald

I move amendment No. 12:

In page 12, subsection (6), line 43, after "Health" to insert "and then the board shall publish the accounts, certificate and report".

Amendment agreed to.

Amendments Nos. 13 and 14 not moved.

Question proposed: "That section 6, as amended, stand part of the Bill."

Mr. Yates

In this section the substantive issue — Deputy Cullen referred to this matter — relates to whether the accounts of health boards and vocational education committees should be audited by the Comptroller and Auditor General. The local government audit service currently audits these accounts. All Deputies will have received a submission from the IMPACT trade union about this matter in which it raises some valid points as to the reason accounts of elected bodies are excluded from audit by the Comptroller and Auditor General while those of non-elected bodies such as health boards are included. As a member of two local authorities, I do not agree with that. All accounts should be audited by the Comptroller and Auditor General.

The relationship between the Comptroller and Auditor General and the local government audit service comes into operation. There is a strong case for giving assurances to staff about job preservation because we are talking about extending the office of the Comptroller and Auditor General. We should follow the route of the UK national audit office which audits all accounts. That would give information relating to health boards in terms of effectiveness, efficiency, competitiveness and so on. We need to regionalise and decentralise the office of the Comptroller and Auditor General. I agree that the local government audit service should be incorporated with the office of the Comptroller and Auditor General. The local government audit service comes under the aegis of the Department of the Environment and is therefore in the public sector. There is need to amalgamate these two offices; it would be a sensible and coherent move. In that way local authorities, health boards and vocational education committees would work together in a uniform way and would know where they stand.

I am asking the Minister to clarify the position for the people working in the local government audit service. What is their future role? Liaison between the two offices is not sufficient. Assurances need to be given in this regard, because on the one hand the Comptroller and Auditor General will say that as a result of the legislation he will need extra resources and staff, while people in the local government audit service who are currently carrying out the audit service for health boards do not know what their fortune is. IMPACT have suggested that the system be left as it is. There is merit in amalgamating the two offices, but at the same time must be safeguarded. I believe it is possible to marry the two.

Detailed arguments have been put forward in the White Paper as to why the accounts of health boards and vocational education committees are included in the work of the Comptroller and Auditor General while those of local authorities are excluded. Members of health boards should not be subject to less scrutiny than members of county councils — very often councillors are members of vocational education committees and health boards. This is a false distinction and it should be removed. If there is a case to be made for accounts of health boards and vocational education committees to be excluded from audit by the local government audit service, the same case can be made in relation to accounts of urban councils, town commissions and county councils. What is needed is a national office of the Comptroller and Auditor General covering all areas of the public service. It is not sufficient to have a strong Comptroller and Auditor General's Office and a weak local government audit service. The policy in this regard is ad hoc and in some ways this Bill will add to that problem.

I would like the Minister to give assurances about staff and to consider the question of amalgamating the two offices while at the same time decentralising and regionalising the system and applying uniform treatment for elected bodies, health boards and vocational education committees,

Ms E. Fitzgerald

A new section 17 is proposed which will give assurances in relation to staff. It will provide for arrangements to be made for the transfer of staff from the local government audit service. This relates to staff in general rather than to staff working on specific audits, as was the case in the previous section 17. There will be flexibility in relation to recruiting staff to the Office of the Comptroller and Auditor General from the local government audit service. It is envisaged that in future there will be a regional dimension to the work of the Comptroller and Auditor General.

The principle, as laid down and decided on by the Government, is that in dealing with local bodies that are not directly elected and the majority of whose funds come from central Government, the audits are examined by the Comptroller and Auditor General. Most of the funds of health boards and vocational education committees come from central Government and there is need to account to this House for that money. Roughly half the funding of local authorities, whose members are directly elected, is locally raised. It was considered appropriate that the local government audit service would continue to audit the accounts of local authorities and that the reports would be answerable to the local elected members. The distinction is drawn on the basis of whether the proportion of public funding comes primarily from this House or is raised locally. As this House is the directly elected body dealing with the Votes for Health and Education, it is appropriate that the Comptroller and Auditor General report to this House on the accounts of vocational education committees and health boards. There is a directly elected structure dealing with local authorities and a substantial amount of their money is raised locally rather than through central Government. It is on that basis the Government decided to make a distinction between the two services.

Mr. Yates

What will be the future role of the local government audit service? This Bill clearly diminishes its role in that it will no longer deal with vocational education committees and health boards. I appreciate the point about the new section 17 in terms of assurances for staff. It is a little vague, but the unions will deal with that matter in negotiation and I understand consultation is taking place in that regard. A pedantic approach has been taken in the distinction between elected and non-elected bodies. In my experience members of local authorities comprise the majority membership of health boards and vocational education committees.

The domestic rate support grant, which comes directly from this House, is a vital part of public funding. Therefore, the Comptroller and Auditor General's Office is entitled to know, for example, whether the ESB charges every local authority the same price for erecting public lights. Is the cost of resurfacing trunk, county and minor roads the same throughout the country? I am told that what is charged by contractors for bitumen and other substances varies greatly. These are areas of valid questioning that could be carried out by the Public Accounts Committee and the Comptroller and Auditor General. Only the Comptroller and Auditor General can get all the information and do a full analysis. The permanent presence the Comptroller and Auditor General has in Departments could work its way through local authorities so that we could get the inside story, which is the case in Departments at present. Another example relates to the fire brigade service. Is the cost of a fire brigade tender in Sligo the same as in Kerry, and if not, why?

The question of value for money applies to all bodies and we should not distinguish between money spent by a local authority or a health board. If local authorities are not given a local Government audit service, one might just as well close the service down. We could use the skills and experience of those personnel by amalgamating the two offices and by not drawing this distinction. All the powers of the local Government auditor to inspect local authorities could be retained. All the local accountability of the members to the auditor can still be retained. I do not seek to change what is good in the local Government audit service, but to bring some element of commonsense to it. I disagree with the Minister's distinction with regard to funding and his comments on councillors. In County Wexford I could name councillors who are members of the vocational education committee and the health board and they are either vigilant or neglilgent about public money right across the board, depending on their characters.

At present 50 per cent of local authority funding comes from the Exchequer but a future Government could decide to have a property tax centrally paid in and then we would have a far larger proportion. This percentage changes and, in 1977, when rates were abolished, I am sure the figures were entirely different. We have seen the erosion of the domestic rates support grant. The Minister should again look at this and in discussions with the personnel of the local Government audit service secure their future by combining the two services, so that we can get a proper league table of the most efficient — and inefficient — health board or local authorities because the taxpayer pays the bill for them all.

Mr. Cullen

I do not necessarily agree with Deputy Yates on the question of local authorities. I want to see the primary of elected authorities strengthened. In the context of this Bill, I see the merit of allowing local authorities to retain the local government audit service.

Another point which is probably more important is where we go from here in the context of what is happening in this Bill to the position of the Comptroller and Auditor General. Without allowing for it in this Bill, we are heading towards a national service that should be in control throughout the country with a strong regional input from the various services. It is unnecessary and unhelpful to create a distinction between the local government audit service and the national service. The existence of a unified strong body would facilitate the easier flow of information and there would be better value for money, particularly at local level. We should have a national unit with a separate strong regional focus under the office of the Comptroller and Auditor General. The Bill is pushing us down that road without necessarily dealing with the outcome. A future Bill in this area will probably be along those lines. Despite the definitions and the differences being created and the substantial weakening of the local Government audit service, by removing the health boards and the vocational education committees from its remit, with which I agree, what is left should not be necessaarily on its own.

The answer to that difficulty is to have one effective national unit with a strong regional basis. Unquestionably the flow of information necessary to pinpoint value for money would become easier under a national service. That should be considered.

Mr. Broughan

I support the Minister in this matter and I welcome the insertion in section 17. The last thing we want is to extend the dead hand of the Department of the Environment further into local authorities. In the premier local authority of which I am a member only a small proportion of income comes from central Government. We provide the vast bulk of our own income. The local audit service should audit our work at first hand. I agree with the Minister that there is a democratic surplus in relation to local authorities which, in the Dublin area, does not apply to the health boards and the vocational education committees. There should be as much scope as possible for local decision making and control.

I hope the Government, in another area of the Minister's responsibility will look seriously at extending the powers and facilities of local councillors. The strengthening of local Government would benefit our economy. I support the general drift of this amendment. Our locally elected democratic councils should look after their own financial affairs. The inputs from central Government can be looked through the Department of the Environment.

Ms E. Fitzgerald

Ultimately this is a matter of policy. The White Paper and the Bill respect the local nature of accountability in the elected local authorities where, as Deputy Broughan said, a substantial amount of the money is generated locally.

The new procedures will allow the local government audit service to concentrate on a uniform class of local authorities rather than working with health boards, vocational education committees and local authorities. That will allow the development of custom built value for money audit within the local government audit service. The Government has agreed to a formalised strengthening of the existing liaison arrangements between the Comptroller and Auditor General and the local government audit service. It is interesting to note that the Committee of Public Accounts in the 1988 special report did not recommend the audit of local government by the Comptroller and Auditor General.

Mr. Yates

In reply to Deputy Broughan, I would be the last to extend the dead hand of the Department of the Environment at the expense of councillors, but the issue here is the Comptroller and Auditor General versus the local government auditor. I fear for the jobs of the people in the local government audit service and an amalgamation of the two offices would be the best way to secure those jobs. Perhaps the Minister could give an assurance now that nobody working in the local government audit service will lose his job or suffer any diminution of pay and conditions as a result of this Bill.

Ms E. Fitzgerald

Arising out of this Bill there is no intention of diminishing anybody's pay and conditions or of making anybody compulsorily redundant.

Section 6, as amended, agreed to.

SECTION 7.

Amendment No. 15 not moved.

Ms E. Fitzgerald

I move amendment No. 16:

In page 14, subsection (6), line 15, after "accounts" to insert "to the committee and".

Amendment agreed to.

Ms E. Fitzgerald

I move amendment No. 17:

In page 14, subsection (6), line 19, after "Education" to insert "and then the committee shall publish the accounts, certificate and report".

Amendment agreed to.

Amendments Nos. 18 and 19 not moved.

Question proposed: "That section 7, as amended, stand part of the Bill."

Mr. Cullen

As a result of the Colleges Acts where regional colleges are no longer under the remit of the vocational education committees how will regional colleges be audited or has some provision been made in the Colleges Acts? Where regional colleges exist, as they do in my own area of Waterford, a large portion of the vocational education committee funding went to the regional college but the regional college no longer comes under the remit of the vocational education committees. How are the regional colleges, which were funded by the vocational education committees, taken care of?

Ms E. Fitzgerald

I understand that the relevant legislation is accounted for by the Comptroller and Auditor General. I understand it is covered in the Colleges Act and the Dublin Institute of Technology Act.

Mr. Cullen

Is the Comptroller and Auditor General specifically responsible for those?

Ms E. Fitzgerald

Yes.

Question put and agreed to.

NEW SECTION.

Mr. Yates

I move amendment No. 20:

In page 14, before section 8, to insert the following new section:

"8.—(1) Accounts of elected local authorities (other than those which may be audited by him under other provisions of this Act) shall be audited by the Comptroller and Auditor General in the manner provided in section 6.

(2) For the purposes of subsection (1) of this section, references in section 6 to a vocational education committee and to the Minister for Education shall be construed as references to a local authority and to the Minister for the Environment, respectively.

(3) Fees under section 12 shall not be chargeable by the Comptroller and Auditor General in respect of audits under this section.".

We have just debated whether local authorities should be audited by the Comptroller and Auditor General's office. I have made the point that the local government audit service should be amalgamated with the office of the Comptroller and Auditor General. The Minister of State said this was a policy question. We now have a Comptroller and Auditor General (Amendment) Bill, 1992 — the previous Bill was in 1966 — and I hope it will not be as long again before policy is reviewed. There should be an ongoing review of policy if the taxpayer is to get value for money. It may transpire that the move of health boards and vocational education committees under the ambit of the Comptroller and Auditor General service, as opposed to the local government audit service, is a success. As spokesman on transport I was unable to elicit from the Minister for the Environment satisfactory information in relation to cost comparisons between local authorities, and that information is absolutely essential. As spokesman on health I had a similar experience. I recall that the price paid for eggs, cotton wool and laundry — non-medical items — varied enormously between the eight health boards. There were some hospitals where the heaters were on full blast and the windows wide open. Those hospitals were very inefficiently run.

The Office of the Comptroller and Auditor General will discover exactly which health boards are well run and which are not. A county councillor in Letterkenny cannot know whether his county manager is doing as good as or a better job than his Cork counterpart as he does not have the information. No matter how vigilant he is as a local public representative he does not have the data available to him to enable him make cost comparisons of that kind. On the policy side, emphasis has been laid on the liaison which will take place between the local government audit service and the Comptroller and Audit General service. I would ask the Minister and the Department to keep an open mind on policy in this area. If the need evolves for a uniformity of costings or improvements in efficiency, there are some very good managers in health boards who have obtained efficiencies for which they have been badly rewarded by the Department of Finance. If they have underused their expenditure the estimate for the following year is reduced and this can act as a distincentive in the system. I am happy to withdraw my amendment because we have discussed the principle contained in it. I would ask the Minister of State that the whole question of the local authorities would be reviewed because councillors, no matter how vigilant, do not have the resources to know how effective or efficient their local authority is as opposed to others.

Ms E. Fitzgerald

We have already discussed at some length the point of principle. Under section 9, as part of the value for money examination, the Comptroller and Auditor General will be in a position to examine the steps taken in the Department of the Environment to ensure that their disbursements to local authorities are economic and efficient and that the Department has adequate arrangements to appraise the effectiveness of that expenditure. That will give a role in relation to supervising Exchequer disbursements to the local authorities.

The unified local government audit service will be in a position, particularly if it is concentrating on just one aspect of local authorities, to look at value for money in relation to, for instance, roads, drainage operations, parks and so on. Because it will have a more homogenous set of functions, the local government audit service may be in a good position to provide the kind of overview Deputy Yates is seeking in terms or comparing one local authority with another. That is the function of the local government audit service.

Amendment, by leave, withdrawn.

Mr. Yates

I move amendment No. 21:

In page 14, before section 8, to insert the following new section:

"8.—The Comptroller and Auditor General shall include in each report prepared by him under this Act a comparison of costs—

(a) as between the public and the private sectors, and

(b) in the case of health boards, vocational education committees and local authorities, as between the body which is the subject of the report and other such bodies having the same functions as it.".

Out of £10.5 billion of public expenditure there are areas of fat in the system. Because of the retrenchment of public expenditure from 1987 to 1989 I do not accept that everything is pared to the bone. There are areas of overlap, duplication and waste, though marginal in some cases. Even a marginal change, resulting in an efficiency of 2 per cent could save £200 million, and that is a lot of money. I am not saying the waste is widespread but in terms of this volume of expenditure there is no reason it could not be pared down in some way. One way of discovering where the waste is and where substantial savings could be made is to insert a provision in the Bill to require the Comptroller and Auditor General to include in his annual report to the Committee of Public Accounts cost comparisons in the provision of public services between the public and private sector.

In the case of local authorities, cost comparisons can be made between direct labour schemes and contract. These are matters of fact rather than opinion. I have no ideology, sentiment or any other reason for making this point. I am merely seeking value for money. Such procedure is applied in many areas. For example, is there an accepted level of absenteeism in the public sector whereby people feel they are entitled to so many days off each year on grounds of illness? There is no disability benefit system for civil servants. I would be very interested in a study on the level of absenteeism from sickness in the public sector vis-à-vis the private sector. It is suggested sometimes that because people are allowed so many days sick leave per year, without question, they take those days. People who do not avail of such sick leave, sometimes regarded as one of the perks in the public sector, are regarded as not being as cute as they might be. Of course, such a study might reveal that the public sector is more efficient than the private sector and that the private sector is profiteering on contracts. Nevertheless, there is no basis for drawing conclusions one way or the other on such issues in the Comptroller and Auditor General's report.

Local government audited reports do not carry out a proper analysis. They basically state that the i's are dotted and the t's are crossed and, in the historic nature of accounting, the audit is correct. They do not address the detailed question of value for money.

Mr. Broughan

Neither do private companies.

Mr. Yates

That is true, but a management consultancy role might be carried out in private sector companies. In other words, an auditor might highlight the need for a management analysis of particular areas, and in the private sector one pays for what one gets. The average sole trader or small company for £1,500 will merely want their accounts audited for tax purposes but large companies may require an accountant's report detailing points in relation to efficiency, cost savings and on on.

Amendment No. 21 proposes the insertion of a new section whereby the Comptroller and Auditor General should include a comparison of costs in his report to ascertain where potential savings can be made. The Comptroller and Auditor General should report to this House so that we are more informed about the way in which public expenditure is examined. We are elected on behalf of the taxpayers to spend their money and we should have access to the Comptroller and Auditor General's report. In any Department, the Comptroller and Auditor General deals with one of four topics. In other words, in the Department of Agriculture he might deal with the TB scheme and not with the intervention scheme. In a cursory way, I would like him to include in his studies some element of comparison between the two sectors. I would like him to be able to say, having analysed all the areas, he may not be able to stand over the relative costings between one local authority and another in regard to, for example, fire services, public lighting, road resurfacing and house repairs. In regard to house repairs, some years ago we sold half of our local authority houses, but have we halved the number of staff in the housing administration and repair sections of all local authorities? Perhaps we should not do that because of the backlog of repairs, but if the number of houses to be repaired is halved, we should not need the same number of people to repair them. As a shadow Minister it is not possible for me to determine the truth about any of those issues.

I am not happy with the overall philosophy of the office procedures of the Comptroller and Auditor General. They are historical and deal only with the question of accuracy, establishing if the money was spent as appropriated by this House and whether any fraud was involved. That is valid and necessary, but we need to go further and have an informed debate in regard to getting value for money. The Minister may say that project audit reports are produced.

Last year only two such reports were produced, one relating to the BES scheme and the other on the collection of TV licences. That is a pathetic record for an office dealing with an expenditure of £10.5 billion and I am not being disrespectful to the Comptroller and Auditor General's Office in saying that. That is not even scratching the surface of accountability regarding value for money. It is a joke.

I would like a new office of public expenditure controller established which could give advice on current and future expenditure. In the next ten years there will be a reduction in the number of pupils in our educational system. We will have more teachers than pupils, and that is desirable. There may be a strong case for lowering the pupil-teacher ratio; but if that results in more sabbaticals and teacher training will we get value for money? What would be the demographic dividend to the taxpayer if we did not use the money for what is intended by the teachers' union?

Mr. Broughan

The pupil/teacher ratio here is the highest in Europe.

Mr. Yates

I do not disagree with the principle of reducing the pupil/teacher ratio or appointing more remedial teachers, but it is reasonable to ask what the taxpayer would have got if we had not done those things. We must have an informed debate on public expenditure control but the reality is that a few academic economists, perceived as Thatcherite killjoys, take a sadistic macho pleasure in cutting public expenditure while we have very well articulated, well reasoned genuine cases for increased expenditure. We must have an independent office which would report to this House on how we might get value for money. If we need to cut public expenditure we should do so in a way that impacts least on the public and provides better administration and value for money. There is a major gap in our public offices in this regard and those two modest proposals in my amendment are worthy of consideration.

Ms E. Fitzgerald

Much of what the Deputy proposes in his amendment would be possible under the terms of the Bill. In regard to Government Departments, section 3 (10) provides the Comptroller and Auditor General with ample scope to comment on his reports and the comparisons which he has made. As regards bodies listed in the First Schedule — health boards, vocational education committees and bodies audited by the Comptroller and Auditor General — section 11 (2) (a) (ii) of the Bill empowers the Comptroller and Auditor General to report on any general matters which he wishes to raise. Comparative studies could clearly be reported on under this section and it would be a matter for the Comptroller and Auditor General to carry out such comparisons as he deemed useful.

As regards comparisons between public institutions and private companies, the Comptroller and Auditor General has no special rights of access to private bodies unless they are substantially dependent on public funding. It would be inappropriate to provide any powers of access in this Bill. There will of course be nothing to prevent the Comptroller and Auditor General drawing conclusions in regard to any information on private sector operations which he can obtain on a voluntary basis for that purpose. Indeed, the Comptroller and Auditor General already does this. His recent project audit report on stores control draws comparisons between the public service and private sector. Such information tends to be of a general nature — for example, regarding good management systems and good practice. Having regard to those considerations, I cannot accept the amendment.

Mr. Yates

As this is a once-off opportunity to legislate in this area and because we have an excellent Comptroller and Auditor General at present, we should not assume that we will always have somebody as enthusiastic as the present office holder. If the Minister believes that section 3 (10) is appropriate in regard to what should be contained in the Comptroller and Auditor General's report, I would ask her to consider inserting a paragraph (e) that would allow him freedom, would not question his entitlement to make private and public sector comparisons and allow that area to be extended. The stores and management report was one of two published in that year. While it was significant and will have future benefits, it is only an example of the possibilities of what the Comptroller and Auditor General can investigate. There is no doubt that the new policies of stock control should be applied — in other words of not having hoards of Garda helmets or whatever in storage — and adopting the principle of "just-in-time" management in regard to running stock controls on a much tighter cash flow basis.

Whether we like it or not, in the business world the one thing that discriminates the private sector from the public sector is that it must be competitive in order to survive. That is its defining principle. A business will go out of business if it is not competitive. We are dealing here with areas of public administration which do not have to be competitive — no one can put them out of business, no one is even considering doing that and no one will do so in the future. I am not upset about this. The point is that the lack of a competitive and tendering environment in many areas of the public service means there is a need for greater scrutiny. I am happy to withdrawn my amendment on the understanding that the Minister will consider including a specific provision in a new paragraph (e) in section 3 (10) which would give the Comptroller and Auditor General the scope to go further in the area of cost comparisons, which, as the Minister said, he has already initiated.

Ms E. Fitzgerald

I will look at the matter between now and Report Stage. As I understand it, the section gives this latitude to the Comptroller and Auditor General without imposing a specific obligation on him. The general framework of value for money audits implies that people look at value in a comparative way. That is part of the general remit of the Comptroller and Auditor General. I would prefer to have a more general form of wording than the specific wording proposed by the Deputy. The Deputy's point has been well made, and I will look at the matter.

Amendment, by leave, withdrawn.

Acting Chairman (Mr. McGrath)

We now come to amendment No. 22 in the names of Deputies Gay Mitchell, Ivan Yates and Jim Mitchell. Amendments Nos. 23, 24, 25 and 26 are related. Is it agreed that we take those amendments together? Agreed.

Mr. Yates

I move amendment No. 22:

In page 14, subsection (1), between lines 41 and 42, to insert the following:

"(c) the accounts, books and other records of any person for a financial year of the person in which the person received any moneys from a person to which subsection (1) (b) applies or from a Minister of the Government or a Department or directly from the Central Fund if the amount or the aggregate of the amounts received constitutes not less than 50 per cent, of the gross receipts of the person in that year,

(d) the accounts, books and records of any person for a financial year at the end of which not less than 50 per cent, of the equity share capital of the person has been financed by a Minister of the Government or a Department or the Central Fund or by any combination thereof:

Provided, however, that the provisions of section 12 shall not apply to any inspection under paragraph (c) or (d).".

We are seeking in these amendments to extend the inspection rights conferred on the Comptroller and Auditor General in section 8 to the accounts of bodies, persons and organisations which rely on public moneys for more than 50 per cent of their revenue. These are reasonable amendments. The giving of money to the Red Cross in 1970 in relation to the arms trial could be investigated by a sub-committee of this House because it was a grant-in-aid. As I understand it, if a grant-in-aid is not spent within the calendar year it can be spent the next year while a grant per se given in the calendar year is not subject to this type of inspection. We either have a principle of accountability and transparency or we do not. If people want public money it must be open to public scrutinty. I am zealous about achieving efficiency in the public sector, but I am no less enthusiastic about ensuring efficiency in terms of private bodies, persons and organisations which also receive public money. The Minister's proposals in this regard is a bit watered down and it needs to be beefed up somewhat.

These amendments do not propose to impose a necessity on the Comptroller and Auditor General to carry out such inspections. I would make the point that another Bill dealing with the powers of the Comptroller and Auditor General may not be introduced during our lifetime. The nature of legislation is that it seeks to deal with as many issues as possible at one time so that it is not necessary to deal with it again for some time. Therefore, it is important that we avail of this opportunity to give the Comptroller and Auditor General these extra powers of inspection. I do not think there is any reasonable excuse for not accepting these amendments, particularly amendment No. 22.

The other amendments deal with the same point. They include different riders such as a resolution of the Dáil and other regulations which may be established for the purposes of such inspection. The principle of public money being subject to public accountability is a valid one. How the money is given or by whom it is given is not a valid reason for exempting one from the inspection process.

Mr. Cullen

My amendment No. 26 is very broad in its implication. We touched on this issue earlier in the debate. It mainly related to the Second Schedule. I am not satisfied, for all the reasons I outlined earlier and others, that commercial semi-State bodies should effectively be excluded from any inspection by the Comptroller and Auditor General. If it is legitimate for him to inspect non-commercial State companies then it should be even more legitimate for him to look at the operation of semi-State companies in the commercial sector.

The Minister may say that a committee of the House examines the commercial sector. However, this committee does not have the specific role and authority of the Comptroller and Auditor General. I do not understand why companies such as NET and Aer Lingus should not be subject to inspection. Such inspections would be helpful in terms of achieving value for money and would enable the Comptroller and Auditor General to make a comparison between semi-State bodies and how money is spent. It would also enable him to have an overview of how similar systems operate in various companies and see which ones are giving the best value for money and working properly. He would then be in a position to make judgments and suggest changes which could lead to substantial savings, cost efficiency, effectiveness, best practice in business, best use of economies of scale and so on. These matters should come under the remit of the Comptroller and Auditor General. It is wrong to exclude the commercial semi-State sector from inspection.

Reference was made earlier to Córas Iompair Éireann, a huge conglomerate involved in the provision of transport, which was broken down into Dublin Bus, Bus Éireann and Iarnród Éireann and the possible welcome development of a rapid transit system in Dublin. If £110 million-£115 million of State funds, not to mention hidden subsidies which could amount to £40 million-£60 million, is given to those companies I do not understand why the Comptroller and Auditor General should not be given the power to inspect them. He, or she as may be the case in the future, should have the power to investigate such companies.

What the Comptroller and Auditor General may see when inspecting the non-commercial companies may be applicable equally to companies in the commercial area and vice versa. In confining the inspection role of the Comptroller and Auditor General to non-commercial companies, it presupposes that somehow there is no relationship to the activities carried out in the commercial semi-State companies. It would be wrong to make a presumption. Issues such as the systems used, best practices and the utilisation of resources are equally applicable regardless of which side of the line companies are on. Giving the Comptroller and Auditor General the power to inspect commercial semi-State companies would strengthen his position and the position of his office. If his office is to develop along the lines referred to earlier it is very important that the Comptroller and Auditor General be given the power to inspect the commercial semi-State sector also.

Amendment No. 6 proposes that this section should apply to all bodies and persons, including those specified in the Second Schedule other than local authorities. This proposal could be made more specific by stating the companies which should be looked at. However, I do not think the Comptroller and Auditor General should as a point of principle be excluded from inspecting commercial semi-State companies.

Ms E. Fitzgerald

Amendment No. 22 would extend the remit of the Comptroller and Auditor General to cover bodies receiving money from organisations which are funded directly from public funds, or where 50 per cent of their equity share capital is publicly owned. This would include bodies receiving grants from the IDA, Bord Fáilte, Bord Tráchtála and other such State agencies and would also cover the commercial State bodies.

The Government believes that bodies funded directly by Departments on an annual basis who are receiving over 50 per cent of their funding should be audited by the Comptroller and Auditor General. Section 8 (1) (b) of the Bill makes provision accordingly for the inspection by the Comptroller and Auditor General of such bodies. However, the Government considers that it would be better for the present if the Comptroller and Auditor General, in the context of the widening of his remit for which this Bill provides, concentrated his efforts on the arrangements within those agencies for monitoring the operations of bodies receiving grants from them rather than inspecting the recipient bodies himself. He will be empowered to do this by section 9 of the Bill. This would be a better and indeed a more cost effective, approach than for the Comptroller and Auditor General to dissipate his efforts in inspecting the recipients of grants from State agencies. If he is dissatisfied with the procedures in agencies for monitoring the expenditure of bodies to which they make payments from public funds, he would certainly be able to report on that. As a general point, I would be concerned at the possibility that the general effectiveness of the Comptroller and Auditor General would be weakened, by his officers directly pursuing public moneys beyond those agencies which are assigned the responsibility of issuing grants. In other words, it is the responsibility of individual agencies to make sure, where they are disbursing money, that they have procedures in place for ensuring it is done effectively. If the control were to move from, say, the Department of Enterprise and Employment back to the Comptroller and Auditor General, we would be likly to see a dilution of control. It is up to the Department of Enterprise and Employment or the IDA to see that they have procedures in place for chasing moneys where they are disbursing them to organisations.

In regard to paragraph (d) in the amendment, this would cover all the State bodies, commercial and non-commercial. All the non-commercial State bodies, whose equity share capital is provided by the State, will of course, be subject to audit by the Comptroller and Auditor General. In addition, the Bill provides for the audit of their subsidiaries by the Comptroller and Auditor General. It is intended that all future non-commercial semi-State bodies will also be subject to these provisions. Since this will place a statutory obligation on the Comptroller and Auditor General to audit all the non-commercial State bodies, the question of inspection will not arise.

In regard to the commercial State bodies, to which amendments Nos. 24, 25 and 26 also refer, there are weighty arguments against taking this step even though it may appear superficially attractive.

Section 8 (3) of the Bill provides that the Comptroller and Auditor General shall not inspect the commercial State bodies or their subsidiaries as outlined in the Second Schedule. The Committee of Public Accounts, in their 1988 Special Report, recommended that the Comptroller and Auditor General should be relieved of the responsibility for those few commercial bodies which at that time were still audited.

The core constitutional function of the Comptroller and Auditor General relates to departmental expenditure, the extension of his role to cover bodies which are dependent on an ongoing basis on voted funds is a logic extension. Furthermore, the involvement of the Comptroller and Auditor General could merely dilute the responsibility and, ultimately, the legal liability of the private sector auditors in carrying out a full, objective and professional audit. Involvement by the Comptroller and Auditor General would also greatly complicate the relationship between these bodies and their auditors and could inhibit the auditors from giving the type of forthright commercial advice and services which auditing firms are generally now in a position to offer. It would also tend to dissipate the Comptroller and Auditor General's resources and distract his attention from matters relating to his core constitutional role. It would tend to lead to constant pressure on the Comptroller and Auditor General to police the commercial State sector and to be involved in contentious matters which are properly the province of the Ministers concerned answering directly to Dáil Éireann, the Garda, the DPP or the courts.

In addition the role of the Comptroller and Auditor General in examining the economy, efficiency and management effectiveness of Departments will, of course, also involve him in examining the arrangements in Departments for monitoring the operation and performance of commercial semi-State bodies under their aegis. This general approach is likely to be more productive than a direct involvement by the Comptroller and Auditor General.

The Department of Finance book "Public Financial Procedures", which is sent to all accounting officers on their appointment, sets down Departments' responsibilities in regard to bodies under their aegis. It states:

"It is essential that a clear framework exists (whether administratively or legislatively or both) within which proper control and accountability mechanisms are working to ensure that public funds are used effectively, that they are accounted for properly and that reporting to the responsible Ministers and to the Oireachtas is timely, accurate and comprehensive.

In his examination of Departments the Comptroller and Auditor General will be able to check whether such a clear framework is in place.

One of the most important considerations is that the Oireachtas Joint Committee on Commercial State-sponsored Bodies is given wide-ranging terms of reference which help to ensure that commercial State bodies are already accountable to Parliament. Involvement by the Comptroller and Auditor General would lead to subsequent involvement by the Committee of Public Accounts in this area, an unnecessary duplication of effort by two Oireachtas committees.

In a case where there is agreement in this House that the Comptroller and Auditor General should report to the House on a matter, a resolution can be passed in this House to that effect.

Amendment No. 25, is largely consequential on amendments Nos. 23 and 24 which have already been referred to. With regard to the final paragraph of this amendment, I would draw the attention of the House to section 7 (2) of the Comptroller and Auditor General Act, 1923, which is being retained, which provides that it shall be the duty of the Comptroller and Auditor General to report to Dáil Éireann on such matters and at such times as shall, from time to time, be prescribed by law or by resolution of Dáil Éireann. This provision has not, to my knowledge, been used in the history of the State and I consider it would be used only in most exceptional circumstances having regard to the Comptroller and Auditor General's independent position as a constitutional officer of the State. Nonetheless, it clearly provides a mechanism for this House to deal with exceptional matters which may be of such general concern that it would seem appropriate for the Comptroller and Auditor General to investigate and report to the House on such a matter. The proposal in this amendment to refer to this power is, therefore, unnecessary as the power sought is already available and a resolution can set down, as appropriate in each case, the terms of reference for the Comptroller and Auditor General when preparing his report.

Mr. Yates

I will be hard on the Minister. I never cease to be amazed at the ability of Ministers to read prepared data which seems so removed from a proper discharge of his or her responsibilities. The Minister has a mind of her own and she must ask about the LEADER programme, what happened in Tipperary, to Aer Lingus Holidays, whether the system works, and whether parent Departments give answers or have adequate controls. This is a very modest proposal to grant inspection rights to someone who, uniquely in the Constitution, reports to this House. We are talking about Deputies' rights. The Minister is a Deputy; she got the highest number of votes in the election. Surely it makes sense to her that she is accountable to the people of South Dublin? Nobody else is accountable to them in this context.

The Minister should count the organisations on the Second Schedule, 31 are mentioned. Even with a zealous chairman such as the previous one, Senator Roche, it will not get around 31 different bodies to see what is happening. The system, as it is, does not work, and there has been a modest proposal that, in areas where this House is not satisfied, the Comptroller and Auditor General should have the right to inspect. For example, in relation to Tipperary Enterprises £0.5 million vanished without trace, all sorts of people may have got money to which they were not entitled. We are just looking for the reasonable right to inspect. The amount that vanished in the case of Aer Lingus Holidays is £70 million. I went to a lot of trouble with the management of Aer Lingus. I asked questions in the Dáil to try to get some answers and I found a maze. Aer Lingus said it was suing the auditors of its accounts. It also said it was not happy with its management accountancy practices and that they have been changed. When I asked questions I was told that the Minister is not directly responsible. There was a complete clamp-down and a file is being prepared for the Director of Public Prosecutions because it is alleged that the people in Aer Lingus may have been involved in some matter which caused the loss of money.

Progress reported; Committee to sit again.

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.