Dáil Éireann debate -
Wednesday, 7 Apr 1993

Vol. 429 No. 4

Comptroller and Auditor General (Amendment) Bill, 1992, Report and Final Stages.

Ms E. Fitzgerald

I move amendment No. 1:

In page 6, to delete lines 14 to 18, and substitute the following:

"(7) Where the account of the Exchequer at the Central Bank has been operated to a material extent otherwise than in accordance with this section, the Comptroller and Auditor General shall, as soon as practicable—

(a) draw up a report in writing of that fact, and

(b) cause the report to be laid before Dáil Éireann.".

During the Committee Stage Deputy Jim Mitchell tabled amendments to provide that there be no delay in the submission of a report on the operation of the account of the Exchequer. This amendment uses the phrase "as soon as practicable", which gives effect to the sentiments expressed by Deputy Mitchell.

Mr. Yates

I welcome the Minister's amendment. The Minister would recall, however, that the discussion held on Wednesday last in relation to the Central Bank and its accountability was somewhat wider in scope than the provision made in the amendment. Such measures as the accountability of the Central Bank in the context of currency policy, devaluation and the bank's supervisory role in relation to financial institutions were discussed. In this amendment the Minister goes into the very narrow area of the accounts of the Central Bank. Opposition Deputies tried to emphasise last week that the Central Bank should be in some way accountable to the Committee of Public Accounts. The Minister said that she was favourably disposed to the concept of some form of scrutiny of the Central Bank. Having received the Minister's amendments just this morning, I do not see reference to this issue anywhere else. It seems that on Report Stage the Minister is tabling only two amendments. Mindful of the fact that on Report Stage one can intervene only once, I shall try to make the most of this opportunity presented to me.

Mr. Carey

Why should the bank not be scrutinised?

Mr. Yates

Essentially, the point was made last week that at present it is virtually impossible for Deputies to ascertain what the cost of a real devaluation of 8.33 per cent was to the Central Bank. We want to know what was the cost in terms of what was owed to the European banking system and in terms of replenishing the external reserves — some £3.5 billion was used in support of the currency.

The other matter raised concerned the supervisory role relating to building societies, banks and so on. At a time when we learn of scandals in relation to golden handshakes and in relation to the residential property of executives, there is no vehicle that provides for the transparency or accountability of the Central Bank. I have had questions ruled out of order in the House and other Deputies have had experiences that are similarly frustrating.

Last week Deputy Mitchell talked of the accounting officer role of the Central Bank and suggested that the bank be put on a par with other bodies in this regard. I recollect the Deputy mentioning An Bord Pleanála and other institutions. It seems to me that the Minister, in responding to that point has missed the major point made, which concerned the general accountability of the Central Bank. While the Fine Gael Party supports this amendment, my colleagues and I are critical of the fact that those points have not been taken cognisance of and have not been responded to effectively.

Mr. Rabbitte

I support amendment No. 1. Perhaps in my contribution I might make a couple of points that to some extent would obviate discussion on amendment No. 2.

I raised this matter on the last occasion on which we discussed this Bill and received the support, I think, of all other Deputies in the House on this issue. Indeed, the Minister seemed very sympathetic. As I recall it, the Minister of State drew a distinction between the critical responsibility of the Central Bank for policy matters, especially the protection of the currency from the impact of interest rates and, consequently, its knock-on effect on our economy generally. She drew a distinction between that and the accounting role of the Comptroller and Auditor General in respect of the Central Bank. I fully understand and appreciate that, but may I make this point? Nobody is seeking to impinge on the independence of the Central Bank, but the question was one of accountability. It seems to me that the role of the Central Bank is so critical in a modern economy, especially during the run-up to monetary union, having regard to our experience over recent months and to certain public criticisms that have been made public for the first time about the conduct of the affairs of the Central Bank, that we require something more than the accounts of the Central Bank being audited by the Comptroller and Auditor General in his role as auditor.

The Minister has kindly arranged to have distributed a list of the various agencies, bodies and organisations for whom the Comptroller and Auditor General carries out this function. I appreciate that, but that was not the point in the case of the Central Bank; I knew that function was being fulfilled. The difference is that the Governor of the Central Bank does not appear before the Committee of Public Accounts. That is an important element of this accountability, because we have seen in the case of other accounting officers who are required to appear before the Committee of Public Accounts that, within reason, they deal with questions of concern to Members of this House about the responsibility of that particular accounting officer. We still do not have that kind of access by the Governor of the Central Bank, nor is he required to appear before the Committee of Public Accounts. All right; he may only be answering in respect of the budgetary allocation to the Central Bank for the conduct of its affairs. However, that in itself is very important, because some of the criticisms we have observed of the Central Bank relate to such matters as, for example, the deployment of staff there, how modern are its procedures, technology and arrangements to cope with the kind of crisis we experienced over the past six months.

There are very many questions surrounding that area Deputies would like to have an opportunity to pursue directly with the Governor of the Central Bank. Of its very nature I contend that would satisfy to some extent this requirement of accountability. I think a majority in the House believe that the era of traditional secrecy and confidentiality surrounding the Central Bank is over. I think there is a consensus in the House also that the independence of the Central Bank cannot be equated to secrecy and confidentiality. Having regard to the import of decisions taken by the Central Bank — there are other agencies involved but most critically those taken by the Central Bank — there is a necessity to explain the rationale of some of those decisions and to satisfy public concerns about some of the issues that have been raised.

I do not know what was the status of the Minister's remarks on the last occasion that we in this House may have an opportunity, through the proposed Select Committee on Finance and General Affairs, to question the Governor of the Central Bank on policy issues. If the Minister is speaking for the Government, as distinct from expressing her views, perhaps she would avail of the opportunity to clarify that. I would welcome such clarification, which would constitute a major step forward.

On the last occasion on which we discussed this matter Deputy Gay Mitchell, in supporting my comments on this area, instanced his recent experience of having met the Governor of the Bank of England and the fact that the Governor of the Bank of England is required on a regular basis to be accountable to Committees of Parliament and to explain major decisions to Members of Parliament. If the Minister is saying that, in the area of policy one of the new committees — presumably the Select Committee on Finance and General Affairs — in future will have an opportunity to examine, exchange views and pose questions to the Governor and staff of the Central Bank directly, that would constitute a major step forward. But in the interim I cannot see any reason why he ought not properly be required to appear before the Committee of Public Accounts.

Mr. Cox

May I make a few comments in support of what Deputy Rabbitte has said in this regard to the Minister? For example, the First Schedule to this Bill sets out the agencies or bodies whose accounts are audited by the Comptroller and Auditor General. I take the point the Minister has properly made drawing a distinction between the policy-making and accounting functions. It is interesting to observe listed in that First Schedule bodies such as the National Economic and Social Council, Shannon Free Airport Development Company Limited and the Economic and Social Research Institute. Nobody in this House would want to have the Director of the Economic and Social Research Institute called to appear before the Committee on Public Accounts, seeking to diminish its degree of freedom with regard to policy-making decisions. But one might want to talk about how the institute chooses to allocate some of the funding it receives. Likewise, in regard to the National Economic and Social Council, nobody here would want to endeavour to delimit its function and remit in terms of its mandate; yet there is an accounting dimension involved. However, it appears to me that if we can have access in policy terms to bodies from whom we derive considerable advice and expertise — the ESRI is a classic example in terms of its publications, as is the NESC, the same kind of thing — then logically why is it not possible to extend the same procedure to the Central Bank? At the same time we recognise that the latter has an independent statutory existence, as indeed have a number of these bodies provided for in law, which will continue in tandem with but separate from their appearance here in the First Schedule. Given the independence of many of those agencies even in operational terms — for instance, the Shannon Free Airport Development Company Limited — their accountability in the First Schedule to the Comptroller and Auditor General in no way diminishes their appropriate degree of freedom under the legislation which established them and under whose provisions they must operate.

For all of those reasons there is a case to be advanced for the inclusion of the Central Bank in the First Schedule, with due regard to the point the Minister made about policy, without intruding into the policy domain of the Central Bank — no more than I would presume the Minister would expect we would intrude into the domain of the NESC, the ESRI, the Shannon Free Airport Development Company Limited or any other bodies listed in the First Schedule.

Ms E. Fitzgerald

As I said on a previous occasion, the policy functions of the Central Bank, which appear to be those in which Deputy Rabbitte has an interest, are appropriate to the select committee on Finance and General Affairs which is being established by this House. In respect of the disbursement of moneys by the Central Bank I should say that this amendment adds the words "as soon as practicable" which should speed up the presentation of any report of the Comptroller and Auditor General in relation to what is the Central Bank's internal organisation of its funds. I might point out that in fact the Central Bank made money during the recent currency crisis. I understand its profits rose by approximately £18 million. However, Members will appreciate that the Central Bank, in carrying out its functions as the independent monetary authority of the State, is not governed by considerations of what profit it will make in deciding how it devises or implements its policies. The policy functions of the Central Bank should properly be dealt with by the appropriate economic, financial policy committee of this House. Of course, I would also need to declare an interest in relation to the internal disbursement of funds within the ESRI.

Amendment put and agreed to.

Mr. Rabbitte

I move amendment No. 2:

In page 6, between lines 35 and 36, to insert the following:

"(c) audit the accounts of the Central Bank.".

As I have said, to some degree the discussion we had previously obviates the necessity to have a long debate on this amendment. I raised this matter on Committee Stage and the Minister of State, in so far as she can, has responded in amendment No. 1. However, I argue that the big deficit is that the Members of this house, through the Committee of Public Accounts, do not have an opportunity to question the Governor of the Central Bank. I do not see, even within the narrow remit to which this amendment would apply, why this should be the case.

For example, the Clerk of this House, as Accounting Officer, is answerable to the Committee of Public Accounts and must and does appear before it on a regular basis. I consider that the Clerk of the House has onerous and important responsibilities and I am sure he would take no offence if I were to suggest that the general impact of his decisions in terms of their knock on effect on the economy is not of the same import as the impact of the decisions of the Governor of the Central Bank.

The public would be greatly interested to hear that the Central Bank made a profit of £18 million during the currency crisis. There are two remarks that one could make, the first of which is that if the Central Bank did not make a profit during that period there would be no hope left for us, and the second is that this is only one side of the equation. There were other decisions to which, it has been reported, the Central Bank was firmly committed and which did not result in a profit for the economy but, as the Minister of State has said, that is a matter for discussion on another day.

I press this amendment as I do not see the reason — no more than some of the Accounting Officers who must appear before us — why the Governor of the Central Bank should not appear before us. Taken within the remit of this amendment and this debate, which is circumscribed by non-policy matters, the question of accountability in relation to its own funds is the issue on which we received much criticism in the wake of the currency crisis. I am in no position to say whether public comment about the conduct of the affairs of the Central Bank was fair or reasonable but what I do know is that some of these comments were penned by former members of the staff of the Central Bank. I would like to have an opportunity to test them against the Governor of the Central Bank who has responsibility.

I do not see how it fits in with the Minister of State's argument that we must be careful not to intrude on policy matters and that we are dealing with the narrow area of accounting. In the narrow area of accounting we would have the usual facility, as members of the Committee of Public Accounts, to question the Governor of the Central Bank on his area of responsibility as defined in this amendment.

Mr. Yates

I wish to make a number of points. Would the Minister of State clarify that what she is saying is that it would be more appropriate for the finance committee to examine this issue than the Committee of Public Accounts and whether the Governor of the Central Bank will be accountable to the finance committee? Is she giving that undertaking to the House? It strikes me, if she is trying to deflect our attention towards that committee, it is only reasonable that there be transparency but I fear that this will not be the case as no provision was made for this in the terms of reference we dealt with this morning. Would the Minister of State clarify whether she is deflecting us up a cul-de-sac which is of no use or benefit in seeking transparency?

I am intrigued by the Minister of State's remarks that the Central Bank made a profit of £18 million. I am aware that that is the Central Bank's view, that if one takes a particular look at the transactions in relation to the external reserves one could come to that figure but this is less than a full account of what happened. One will find that on 31 January this year — the day the devaluation took place — the Central Bank owed the European banking system some £800 million for its support for the currency during the period in question.

Would the Minister of State clarify — on Report Stage we do not get an opportunity to tease matters out as we do on Committee Stage — that the big loser in the devaluation debacle was the National Treasury Management Agency in so far as it was instructed during the period between September 1992 and the end of January this year to borrow abroad, in hard foreign currency, an additional £2.3 billion? This money was not raised domestically or in sterling and the cost is well in excess of £220 million. In the same way as the speculators won, somebody lost. The question that must be asked, therefore, and I would like the Minister of State to clarify this, is whether the National Treasury Management Agency are fully accountable to the Committee of Public Accounts. It is a borderline case as to what is a policy decision — whether one borrows in sterling, Austrian schillings, Deutsche Marks or Swiss francs. This could be construed as a policy decision or as an Executive action but either way it is the taxpayer who has to foot the bill if there are errors of judgment.

Would the Minister of State clarify, first, whether the Governor of the Central Bank, in relation to the issue of transparency, will appear before the finance committee and, second, if the National Treasury Management Agency will be able to account fully for its almost disastrous decisions in recent months?

Mr. Cox

Like the governor of the Central Bank, I decided that on this issue I should get on my bike as well. The Central Bank made a profit of £18 million and therefore even on a wet day it could afford to send the governor here in a taxi to meet Members. At least that would be good news, that is if we provide a facility to meet him.

The Minister of State has made the point that it would be more appropriate for another committee to deal with this matter than to deal with it under the Comptroller and Auditor General Bill. I hope that is the case but I would point out to the Minister of State, in respect of the highly independent European Central Bank proposed under the Maastricht Treaty, that notwithstanding a very rigorous definition provision is made for a considerable degree of accountability in the form of an annual report by the Central Bank to the European Parliament which will be debated by its relevant committee and in plenary session. However, we have no equivalent.

If the implication of the Minister of State's assurance on this matter is that the Central Bank will be held accountable to another committee of the House in relation to policy one would be less vigorous in trying to find some bridge to ensure accountability in respect of the bank. Like the Minister of State, I am a new Member of this House and as I become more acquainted with the ring craft and stage craft in this institution, I observe that one should find some little bridge to explore material. It is important that some bridge be built between this House and the Central Bank. If the Minister of State is reassuring us that a bridge will be built to another committee this would be a satisfactory outcome and we could stop chewing on this particular bone.

Ms E. Fitzgerald

First, the amendment seeks to have the accounts of the Central Bank included under this Bill. As I said the previous day, the accounts of the Central Bank are audited by the Comptroller and Auditor General under the Central Bank Act, 1942 and to that extent the proposal is redundant. As a consequence the Central Bank falls within the ambit of section 9 of this Bill which deals with value for money audits. The White Paper on the role of the Comptroller and Auditor General has proposed changes in the terms of reference of the Committee of Public Accounts, including a change to allow it to examine reports to the Dáil and such other accounts as they see fit which are audited by the Comptroller and Auditor General and presented to the Dáil. That change in the terms of reference will give an opportunity to the Committee of Public Accounts to consider the Central Bank's role in terms of financial accountability. The role of the Central Bank and the National Treasury Management Agency in terms of economic policy is more appropriate to the two committees established today on finance and economic policy. Deputies might read the ESRI report on the national debt which refers to the issue of borrowing in foreign currencies. That is fundamentally an economic policy issue rather than an issue relating to profit or loss of the National Treasury Management Agency.

The budget arithmetic this year provides for the extra £18 million profit earned by the Central Bank from September to the end of January. It also provides an additional £100 million more than that forecast to be earned by the National Treasury Management Agency. Contrary to the implication made by Deputies opposite, the money management agencies of the State have been making money. As regards the National Treasury Management Agency, the Minister is answerable to the Committee of Public Accounts since the National Treasury Management Agency exercises powers delegated by the Minister for Finance, and the chief executive may deal with the Committee of Public Accounts in the same way as would an accounting officer. Deputies can be assured that there are reasonable measures in place to deal with the operations of the financial organs of the State in terms of accountability. The key issues concerning Deputies lie in the economic policy area and are best addressed by the committees dealing with that matter.

As a result of the Maastricht Treaty and the setting up of the European Central Bank, amending legislation will be introduced on the role of the Central Bank. That will give Deputies a good opportunity to debate the role and function of the Central Bank. In this Bill the Central Bank is very much tangential to the whole purpose of the Bill, which relates to the role of the Comptroller and Auditor General and broadening that role to ensure value for money. Many of the points made by Deputies opposite would be more appropriately dealt with by committees relating to economic policy or in legislation specifically dealing with the Central Bank. This amendment is redundant because——

Mr. Yates

Will the Governor appear before any committee?

Ms E. Fitzgerald

The Committee of Public Accounts will be empowered to deal with the accounts audited by the Comptroller and Auditor General under the heading value for money and Deputies will have an opportunity to deal with the Central Bank.

Mr. Rabbitte

Deputy Cox referred to the necessity to acquire certain ring craft here. The Minister's ring craft, if I may be so bold as to say, has certainly increased in leaps and bounds. She has managed extremely expertly to deflect the amendment without saying a great deal. Before we finish dealing with this amendment, inexpertly worded and inappropriately placed as it may be, I would like some answers from the Minister. It would be more acceptable if one had even a small share of the advice available to the Executive — I am not making a partisan point but a real one. It seems absurd that the entire weight of Civil Service and other advice is available to the Executive while advice on drafting is not available to the Opposition spokespersons. The Department of Finance has always managed to support the position that the burden of resources is with the Executive and it is difficult for the Opposition to get advice.

Will the Minister tell the House why she is so determined to keep the Governor of the Central Bank at arm's length from Members of this House? The Committee of Public Accounts is not going to contaminate him by virtue of the fact that we may ask him a couple of difficult questions. What is the reason behind the statement that there will be audited reports, that the reports will be available to the Committee of Public Accounts or that such other report will be laid before the House? We know what that means in practice — rarely does this House have an opportunity to debate reports of significance. Instruments are laid in the Library every day of the week which this House never has an opportunity to debate. The nub of the point is the question of the Committee of Public Accounts coming arm to arm with the Governor of the Central Bank, and I am not sure why the Minister wishes to protect that position. Deputy Cox believes a bridge ought to be built to the Central Bank. At present there is a subterranean tunnel and I would like to know what is going on in it. I would like to hear the rationale for some of the decisions made.

The Minister suggested — she may be right — that the Governor of the Central Bank be required to appear before the Finance and General Affairs Committee. However she is not telling us that he will be required to appear before that committee. There is nothing in the terms of reference of that committee, which were put through the House this morning, that will require, compel or oblige the Governor of the Central Bank to appear before it. Therefore the Minister is merely calling on her undoubted reserves of economic expertise, good sense and wisdom in telling us that this is what the Opposition should be seeking. I am quite prepared to be advised by the Minister and acknowledge that that is a good idea; but is this merely a request that we can debate to our hearts content on the Opposition benches, or is the Minister telling us that the Government have had an opportunity to discuss the matter and that it is the disposition of the Government that the Central Bank will be required to present themselves before the Finance and General Affairs Committee?

I appreciate that when I raised this matter on Committee Stage the Minister had no notice of it. Perhaps she can fairly say it is somewhat tangential to the Bill, but it is not tangential to the economy and the interests of the economy. From experience, I suggest the Minister should seize the day, carpe diem. We have an opportunity here to raise an important issue and it is an opportunity that may not arise soon again. I would be quite satisfied if the Minister assured us that she is speaking in the knowledge that the matter has been or is being discussed by Government and that it is the disposition of the Government that the Governor of the Central Bank will be required to appear before the Finance and General Affairs Committee.

An Ceann Comhairle

Strictly speaking, the Deputy's address closed the debate on amendment No. 2. Nevertheless, if the Minister wishes to reply to questions raised rather than tend to debate, she has my permission to do so. However, she too is under the same stricture as all of us in that she may address the House once only on Report Stage. The only Deputy who may contribute on more than one occasion is the Deputy who has moved an amendment. If the Minister wishes to intervene by way of reply to a specific question or questions she may do so with the blessing of the Chair.

Ms E. Fitzgerald

The accounts of the Central Bank are audited by the Comptroller and Auditor General and the reports, which are covered under section 9 of the Bill dealing with the value for money audits go the Committee of Public Accounts. The Committee of Public Accounts will be entitled therefore to call on the Governor of the Central Bank in relation to the Comptroller and Auditor General's report on the accounts of the Central Bank. Their discussions will relate to the accounting and not the economic policy elements, which would be appropriate to other committees.

Mr. Yates

The Minister is not answering my question: will the Governor of the Central Bank appear before the Finance Committee?

Ms E. Fitzgerald

As I have explained, the Governor of the Central Bank can come before the Committee of Public Accounts in relation to the accounting elements of the report of the Comptroller and Auditor General and how effectively the Central Bank is run. Economic policy does not arise directly under this Bill and is a matter for other legislation.

I have not been involved as a Whip in the detailed negotiation of the terms of reference and how matters will be organised, so I cannot give a straight answer. The Deputy asked whether the Governor will come before the Finance Committee. I think this is a fair point and I will raise it with my colleagues. I am sure the parties opposite can raise this matter through the Whips.

An Ceann Comhairle

How stands the amendment?

Mr. Cox

In a subterranean tunnel.

Mr. Rabbitte

I think I will retire gracefully, Sir.

Amendment, by leave, withdrawn.

Mr. Yates

I move amendment No. 3:

In page 8, line 30, to delete "April" and substitute "February".

This modest amendment, which we discussed last week, substitutes the month of "February" in place of "April" and brings forward to February the date by which accounting officers, that is secretaries of Departments, must have their appropriation accounts before the Comptroller and Auditor General, who examines the outturn of expenditure for the previous year.

This amendment is entirely reasonable. Last week the Minister of State said that "The Minister may by order bring forward the date at some time in the future". But "may" and "will" are two different things; while there may be an intention to do it, it may never happen. Since our debate last week something happened which makes my point very compelling. The Exchequer returns of tax receipts for the first quarter which had to be submitted by 31 March 1993, last Wednesday, were published on Friday, 2 April. The information can be put together in such a way that it can be published within two days. Yet we are asking for a four month period for others to account for expenditure. That shows the way we look at things. In my view there is no case against bringing forward this date. It will put pressure on the accounting officers, which is entirely desirable. It is much better to specify the date in the Bill rather than leaving it to the Government to decide whether to bring it forward.

Because the process is so slow it is virtually a year later before the Committee of Public Accounts examines matters and this means that the nature of accountability to this House is historic. The Comptroller and Auditor General has to have his report to the Committee of Public Accounts by the autumn and, due to one thing or another, it is probably into the next calendar year before the accounts are assessed. It is not possible to put the breaks on certain areas of public expenditure and to draw certain lessons from accounts that are over a year late. If we speeded up this part of the process, the time at which the Comptroller and Auditor General begins to study the accounts would be brought forward. This is very desirable and I ask the Minister to accept my amendment.

Ms E. Fitzgerald

We discussed this point at an earlier Stage and Deputy Yates withdrew his amendment. The Bill provides that the date is brought forward from the end of April to 31 March. There is provision in the Bill also for the Minister to tighten up and bring the date forward even further. We are trying to tighten up accountability, but it is important that we set a date that is practicable. I hope that the pressure will be put on and that in time we will be able to bring forward the date from 31 March to the end of February and eventually to I February, as suggested by the Deputy.

We are making a start by bringing forware the date by one month. It may not be practical at this stage to bring the date forward to the beginning of February, which is bringing it forward by three months. The difficulty is that some units operate manual systems, so one has to allow for the slowest part of the system. However, we hope to have all systems computeristed in the future. Until all operations are computerised it would not be practical to accept this proposal. We all share the Deputy's view that the procedures should be speeded up. Indeed, I would ask why it takes a year from the date of submission of the Appropriation Accounts to the time they are examined? That period could be shortened and this needs to be looked at as well. I agree with what the Deputy is trying to achieve; but it would be more effective to bring forward the statutory date by one month, enshrine it in legislation and get it up and running rather than setting a target which is too ambitious and then allowing it not to be implemented. I would prefer to do what will achieve more progress and in that light I ask the Deputy to withdraw his amendment.

Mr. Yates

I will withdraw my amendment. However, the Minister did not respond to the point on the publication of the Exchequer tax returns. It is self-evident that the situation is not satisfactory and I hope the Department of Finance and the Minister will ensure that during the four year tenure an effort will be made to bring it forward by at least one month each year.

Amendment, by leave, withdrawn.

Mr. Yates

I move amendment No. 4:

In page 14, between lines 32 and 33, to insert the following:

"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.".

Under this Bill we are proposing that the vocational education committees and the health boards move out from the watchful eye of the local government auditors' office and come under the control of the Comptroller and Auditor General. The decision has been taken that councils on which there are local authority members would not come under the Comptroller and Auditor General but remain under the local government auditors' office. A number of issues arises from this. The staff concerns need to be addressed. That is most important. The trade union, Impact, has made representations about this.

The only way to proceed is to establish a national audit office, as exists in the United Kingdom, whereby the Comptroller and Auditor General's Office would be decentralised and regionalised and would examine all aspects of the accounts of public institutions and the expenditure of public moneys. To draw a distinction between the scrutiny exercised by elected councillors and that by members of health boards and vocational education committees is invalid because the very same councillors are in the majority on health boards and vocational education committees — in other words, the same people are applying the scrutiny under the same procedures. I do not think that is correct and I do not believe the analysis in the White Paper is valid. There should be the possibility, as provided by the new section 8, that the work of local government should be brought under the Comptroller and Auditor General and that all the people in the local government audit service would be transferred to a national audit office.

This makes eminent good sense. The present liaison arrangements, whereby the Comptroller and Auditor General is sent these accounts, are not sufficient. If I want to find out whether a mile of resurfacing of road in County Donegal is cheaper than, for instance in Kerry, I cannot do so at the moment. The Committee of Public Accounts could ask the Comptroller and Auditor General to find out, but individual local government auditors cannot. I am trying to streamline the service so that everything will go in the direction in which the Government is moving for vocational education committees and health boards. This would allow us to establish a league table of effectiveness, of cost structures, of a whole variety of performance of local authorities. As a member of two local authorities, I can say that the facilities are not available for local authorities to analyse expenditure to a satisfactory extent. I do not know what other local authorities' performance level is in terms of value for money. If all this information was coming into one office it would be helpful.

When I was spokesman for health, it became obvious that the prices paid for milk, eggs, butter, cotton wool and laundry services at different hospitals bore no resemblance to each other. In one area, milk suppliers could get together to form a cartel. If the information is fed into one office the Comptroller and Auditor General could study it. Non-medical supplies in the health area are a huge element of the budget. In terms of studies between direct labour of local authority road workers, as opposed to contract services, one could draw comparisons between different parts of the country. In some areas it would pay to have the plant and equipment available for unforeseen weather circumstances.

Money from the central budget to local government is of the order of £300 million, which is not an inconsiderable sum. The White Paper pointed out that health boards and vocational education committees get more money from central funds than do local authorities, but that could change. At the time when rates were abolished the domestic rates support grant accounted for over 50 per cent of the revenue of local government. That is not the case now, but if there was a property tax that could change. The argument put forward by the Government does not hold water. We need a beefed up Comptroller and Auditor General's Office which will become a national audit office for every semi-State company, every non-commercial State body, every body that receives over 50 per cent of its revenue from central funds and every local government body, be it an elected body, a health board or a vocational education committee.

I would ask the Minister to reflect on this and consider it when the Bill is going through the Seanad. My arguments are logical and valid and international experience shows that a national audit office is more effective.

Ms E. Fitzgerald

As the Deputy knows, this is essentially a policy issue about whether we have one audit service or two. The decision of the Government is to have two, the existing local government audit service and the Comptroller and Auditor General providing a national audit service.

The decision was taken to move the vocational education committees and the health boards to the national audit service under the Comptroller and Auditor General because most of their funding comes from central Government and because they are not as directly accountable to local people as are directly elected local authorities. There is an issue about local accountability and decentralisation. It is a policy issue, and we are on different sides of the fence.

With regard to the concerns of the staff, I met their representatives and discussions will take place. In the light of discussions I amended section 17 in committee to allow flexibility for staff to opt to move to the Comptroller and Auditor General's Office or to stay with the local government service. Staff who are working on vocational education committee and health board audits will not necessarily have to move. That will be discussed as an industrial relations issue. Everybody is concerned about the effect on staff and I give an assurance to the House that there will not be any compulsory redundancies on foot of this Bill. The changes to be brought about by the Bill will be made through negotiation, organisation and consultation, as was the whole decentralisation process which has been so successful.

It is envisaged that the Comptroller and Auditor General's Office will be regionalised as a result of the changes in the Bill and the very considerable regionalisation of central Government services that we have seen in, for example, the decentralisation of the examinations branch to Athlone, the children's allowances section to Letterkenny and other elements of social welfare to Sligo. To audit those areas one must be on the ground. We will see a regionalisation of the Comptroller and Auditor General's Office which will facilitate staff moving from the local government audit service to a regionally-based Comptroller and Auditor General's Office. These are essentially industrial relations issues which will be discussed in that context with the staff concerned. There need not be any fear arising from the Bill.

Deputy Yates is asking us to make a policy change which we do not accept. It will be up to the House to decide on which view to uphold.

Acting Chairman (Mr. T. Foxe)

Is the Deputy pressing his amendment?

Mr. Yates

Yes. I have dispensed with the points argued in the White Paper. The Minister's arguments do not hold water. The legislation which we are amending dates back to 1866. It is not every day that we deal with a Comptroller and Auditor General Bill. When looking at reform we must look into the distant future regarding the potential decisions to be made. There is a case for stream-lining the system and for uniformity. In years to come it will be considered a pity that the Government did not go the whole way in revamping the Comptroller and Auditor General's Office. For posterity, I would like to press the issue so that when I am vindicated in the future, I will be able to say so.

Amendment put and declared lost.

Mr. Yates

I move amendment No. 5:

In page 14, between lines 32 and 33, to insert the following:

"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.".

My amendment proposes to insert a new section to require the Comptroller and Auditor General to include in his report a specific element of study between public and private sector costings and cost comparisons between health boards, vocational education committees and local authorities. In the last report of 1991 the project audit dealt with the collection of television licence fees and stores management and control. Private sector practices included what could be called "just in time" management techniques or proper controls of stocks so that they would not have huge amounts of biros or shoes in stock to cover three years. That would not be a good use of money. There is a myriad of areas in which we have to look at the cost of public administration through the civil or public service and consider what would be the cost if that was open to competitive tendering. It may well be that the private sector is more expensive because it is trying to make a profit.

There is justification for people saying that, despite recent increases in public sector pay, the lower grades are paid less than those in the private sector. It is also possible for performance in the public sector to be weaker. I would like to see a study on absenteeism in the public and private sectors for similar types of employment. Is it the case that some people feel they are entitled to a day off per month as a right, as sick leave? Perhaps these practices have evolved over the years. These questions need to be addressed by the Comptroller and Auditor General. At present it is left entirely to Mr. McDonnell and the Committee of Public Accounts to decide whether to examine a particular area. It is right that he should choose, as appropriate, areas which he would like to put under the microscope, for example, the cost of running employment offices. At present I understand they are done by contract. What is the cost comparison between running them and employment exchanges? Alternatively, would it be better to put employment offices entirely under Civil Service control? At present I understand an employment office is put up for contract, a manager is appointed who, in turn, rents the property and hires the staff; essentially, it is privatised.

There are many more examples, such as the TB eradication scheme where it could be asked whether it should be operated by Department or private sector vets. We do not necessarily have to move towards the private sector but there would be a cost comparison between the two. That question is valid and there should be a section specifying that he would be asked to carry out such comparisons.

The efficiency or cost effectiveness of local authorities, health boards or vocational education committees depends entirely on the quality of management. The efficient chief executive officers and management structures in individual health boards are getting better value for money than others. There is no transparency in relation to highlighting the good and the bad. The North-Western Health Board is the most efficient, I have a view on which board is the least effective, which would relate to the quality of management. There is no basis on which any Member of this House can have material forwarded to him by the Comptroller and Auditor General to make valid appraisals work. After all we are dealing with expenditure of £1.4 billion and it should come under scrutiny. The Minister of State will have to accept that this is not unreasonable and a report could include these points. I urge the Minister to accept the amendment.

Mr. Cox

I agree with much of the substance of the argument advanced by Deputy Yates which deals with systems, procedures and practices and the need to have comparisons between them. That is something on which I should like to speak later when we return to it on another section.

Ms E. Fitzgerald

During the debate the previous day Deputy Yates made a valid point concerning comparisons between the public and private sectors and between different bodies in the same class. As a result, I am proposing an amendment to section 12 which deals with this issue, it allows the Comptroller and Auditor General to make such comparisons, including comparisons of systems, procedures and practices as he considers appropriate. Where he proposes to make an examination under this section he may, at his discretion, seek the views of the Committee of Public Accounts to examine and report to Dáil Éireann on the appropriation accounts. That provides the necessary power for the Comptroller and Auditor General. Instead of it being a mandatory power it is better to leave it to the judgment of the Comptroller and Auditor General in relation to where he considers those comparisons would be fruitful. Indeed, in different years, he may wish to carry out different comparative studies. The general point is being addressed.

I would not like to leave the point without saying there are many areas of the public service where the standards of work and work practice are second to none. The parks department of Dublin County Council is an example. The quality of their work and work practices is excellent. In accepting the thrust of the point we should have some comparative figure and it should not be taken as public service bashing. The public service is second to none and many private sector operators would do well to emulate their efficiency.

Mr. Yates

I am intrigued by the Minister's last remarks. Two examples I gave were areas where the public sector could substitute work in the private sector in relation to departmental vets as opposed to private sector vets and in the running of employment offices. That is not to say because one carries the mantle of the Labour Party, especially when the Minister of State said on the previous day that her salary is paid by the Department of Finance, one should think that the public sector is beyond analysis or criticism. It is highly undesirable to construe criticism as public sector bashing.

People working in the public sector, for example, teachers and gardaí, carry a heavy burden of taxation and as part of the 1.1 million people at work they have certain rights, which should be protected by this House, in relation to value for money which they get as taxpayers. I am surprised the Minister of State should accuse me of public sector bashing when the whole purpose of the Bill is to try to get better scrutiny and accountability in the public sector. Like Mrs. Marcos the longer the Minister of State is in this House the more she will see the merit of what Members of the Opposition benches are trying to do.

Having rebuked her I welcome the substantive point made by the Minister of State in relation to subsection (3) of amendment No. 12. Subsection (4) of amendment No. 12 deals with the role of the Committee of Public Accounts to which I will refer later. I did not notice this as I did not receive her amendments until this morning. I hope that point will be brought to the attention of the Comptroller and Auditor General.

Amendment, by leave, withdrawn.

Ms E. Fitzgerald

I wish to take amendments Nos. 6, 7 and 8 together. Amendment No. 8 is the fundamental amendment while amendments Nos. 6 and 7 are grammar changes which arises as a consequence.

I move amendment No. 6:

In page 14, line 40, to delete "and".

A point arose the previous day about allowing the Comptroller and Auditor General to inspect the books, records and accounts of bodies which receive not less——

Acting Chairman (Mr. T. Foxe)

May I interrupt the Minister of State? Amendments Nos. 6 and 7 are consequential on amendment No. 8. Amendment No. 9 is an alternative to amendment No. 8 and amendment No. 10 is related.

Ms E. Fitzgerald

Amendment No. 8 seeks to allow the Comptroller and Auditor General to inspect the books, records and accounts of bodies which receive not less than 50 per cent of their gross receipts from a body which itself receives not less than half of its gross receipts directly from the State or where the aggregate of the amount received from such a body from a Department or from the Exchequer comes to not less than half the body's gross receipts. The point was well made in the discussion the previous day that where public money is involved, or if a problem arises in a body receiving a significant share of its funding from the Exchequer, the Comptroller and Auditor General should have a right to examine and report on it to the Committee of Public Accounts. I am taking that point on board in this amendment. The advice we have received suggests that the wording in our amendment is better than the alternative wording proposed by Deputy Yates in relation to "directly" or "indirectly".

Mr. Yates

Can the Minister of State clarify the difference between the two?

Ms E. Fitzgerald

This amendment is worded slightly different from that tabled by Deputy Yates. However, on the advice available to me, the words I have used are more appropriate. I think we are in agreement on what we want to achieve. Therefore, perhaps my amendment could be accepted and Deputy Yates might withdraw his.

Mr. Cox

I would like some clarification on this matter. I welcome the Minister's amendment, but will she clarify the cut-off point of 50 per cent? I suppose a cut-off point of 50 per cent is as good as any to include in the legislation but it will refer to those bodies who only receive money directly from the State.

Does the remit of this section extend to the subsidiary organisations set up by the grant-giving bodies who receive money from the State referred to in the First Schedule? For example, are the many subsidiaries of the Shannon Free Airport Development Company in which it is the substandial owner and who indirectly receive substantial State funding deemed to be included in this section?

Ms E. Fitzgerald

First, we must be clear about what we mean by indirect funding. The Committee Stage amendments in this regard would have included bodies such as Focus Point the staff of which consists of almost 90 per cent FÁS trainees and people on social employment schemes. I do not believe it is our intention to include such organisations under this legislation.

Given the arithmetic involved in SFADCo grants, I do not believe the type of bodies the Deputy referred to will be included. For example, if the Government gives money to an organisation such as the Irish Red Cross and questions arise in regard to that body, this section will give the Comptroller and Auditor General power to inspect that body. The intention of this section is to enable an investigation to be carried out into bodies such as the Red Cross, Rehab and so on where over half their funding comes from the State. In regard to commercial organisations, I do not believe that half of their money will come from the Exchequer either directly or indirectly through SFADCo. Therefore, I do not believe this will arise in regard to commercial organisations such as the IDA and SFADCo who have procedures in place in regard to funding. This section deals with a power of inspection rather than an audit. Initially, it is up to the bodies to organise their audit arrangements and we do not anticipate the resources of the Comptroller and Auditor General being so widely used that he will not be able to administer the new value for money audit we are setting him. When questions arise in regard to an organisation this new power will allow the Comptroller and Auditor General to investigate such an organisation. I accept the substantive point made here, but I am advised by those responsible for drafting the Bill that this is the best wording.

Mr. Yates

I ask for some latitude on this matter because I would have a right to reply if these amendments were taken separately.

Acting Chairman

I will allow the Deputy full latitude.

Mr. Yates

There is no substantial difference between amendments Nos. 8 and 9. Paragraph (d) has been deleted. Therefore, I am happy to accept the Minister's amendment. However, will the Minister clarify that she is rejecting paragraph (d) in section 9, which refers to 50 per cent of the equity share capital? In other words, if 50 per cent funding is given in a year, that would apply but if there was an equity injection it would not apply. Is that what the Minister is rejecting and not the wording? There is a point of substance in paragraph (d) that she is rejecting.

I referred last week to two cases where there should be a power of inspection. A total of £17 million was lost in Aer Lingus Holidays and the Comptroller and Auditor General had no power of inspection. That was regrettable, especially as no questions have been answered at any stage in regard to that company. We were told by Aer Lingus that the company was subject to litigation against its auditors and we were told subsequently by the Minister that the Director of Public Prosecutions may be involved, but three years later he has done nothing. There was a successful shroud of secrecy in regard to that entire matter and there was no accountability to anybody.

The second case I put forward was that of Tipperary Enterprises in regard to the Leader programme. That company received almost its entire moneys from a Department of State. Once this amendment is passed, will there be a right of inspection in regard to both those cases?

Ms E. Fitzgerald

First, I will respond to the specific cases raised by the Deputy. I stated last week that the Committee of Public Accounts is not the appropriate committee to deal with commercial semi-State bodies, but the Oireachtas Joint Committee on Commercial State-sponsored Bodies. Following our discussion last week I discussed this matter with my advisers in the Department, some of whom came from the audit profession.

Mr. Yates

Are they programme managers?

Ms E. Fitzgerald

Yes.

Mr. Cox

I hope the Minister insisted on value for money.

Ms E. Fitzgerald

I insisted on value for money in terms of getting people with great ability and experience.

Mr. Yates

At great expense.

Ms E. Fitzgerald

Not at great expense, but at a cut in wages.

Mr. Cox

Did they give the Minister a good answer to give to Deputies today?

Ms E. Fitzgerald

I share the concern expressed in regard to the unaccountability of public money, as occurred in the case of Aer Lingus Holidays. However, I am happy, having followed up the point, that the appropriate way to deal with such companies is for the semi-State body to appoint auditors who would then pursue the matter. If they do not, they should be used by the company. A commercial body hires commercial auditors to do a job and if matters slip under the net they are not doing their job and should be used.

As regards the involvement of this House; the Oireachtas Joint Committee on Commercial State-sponsored Bodies has responsibility for overseeing these bodies. Where State equity is involved that is the appropriate forum in which they should be addressed. Having regard to Dáil reform and efficiency, it would not be proper for two separate committees of the House to carry out two separate examinations of the one company.

In regard to Aer Lingus Holidays, the Director of Public Prosecutions has become involved and that more than anything has stalled the particular Dáil investigation. If criminal charges are to be proffered or an investigation held involving the fraud squad, nothing that would be said by any committee of this House should prejudice people being brought to justice. That should be the appropriate outcome of any investigation involving substantial funds. I will not say anything further on that because such issues are delicate. We should not engage in a turf battle on this matter between the Committee of Public Accounts and the Joint Committee on Commercial State-sponsored Bodies. The matter is under investigation by another organ of the State.

In regard to the Leader programme there is provision for the audit of the Department of Agriculture, Food and Forestry in regard to its procedures for overseeing matters. There is double indemnity, so to speak, in such cases as there is also an involvement by the European Court of Auditors. Following the case involving the Leader programme in County Tipperary, action has been taken by the Department of Agriculture, Food and Forestry in regard to the overall operation of the programme. It is also examining the operation of supervision arrangements in similar projects. The European Court of Auditors who are never behind the door, so to speak, in drawing attention to issues which it considers——

Mr. Yates

Will the Minister's amendment provide for the right to inspect bodies such as Tipperary Enterprises? The Minister's amendment refers to a person who receives "any moneys from a person to whom paragraph (b) applies".

Ms E. Fitzgerald

By definition, semi-State bodies are covered by this section. The non-commercial semi-State bodies will be audited by the Comptroller and Auditor General. I think we all accept this point. The point at issue here is whether all bodies which receive more than 50 per cent of their funding from the State should come under the direct aegis of the Comptroller and Auditor General. Following consideration of the points made during the debate, the appropriate procedure is for the Committee of Public Accounts and the Comptroller and Auditor General to be given the power to oversee the parent Department and its procedures governing the bodies under its control. The commercial auditors appointed by commercial bodies have a duty and responsibility in relation to any matters which they believe are not 100 per cent correct in terms of audit, efficiency and value for money. They have a role in this area. The sponsoring Department, the Minister responsible, or the Government as a whole appoints the board of a commercial semi-State company. It has the task of running the company and it can employ whatever specialist advice it requires in order to do this. That function is overseen by this House through the Oireachtas Joint Committee on Commercial State-sponsored Bodies. This is the right way to deal with the matter; we have to distinguish between the two areas.

I am not saying that there will be no inspection of commercial semi-State bodies. The inspection of semi-State commercial bodies will be by way of a report by private auditors to the board and a report from the board to the Minister, who will report to this House. There is adequate accountability in that procedure to cover the issues raised by the Deputy. The non-commercial semi-State bodies come under the aegis of the Comptroller and Auditor General. My amendment deals with bodies such as the Red Cross and Rehab, private organisations which receive more than 50 per cent of their revenue from the State. These organisations should be allowed to hire commercial auditors, who will be responsible to them, to audit their accounts. However, if a problem arises the Comptroller and Auditor General should have a right to trace the spending of that public money. The issue in relation to non-commercial semi-State bodies is somewhat different and there are already reasonable controls in this area.

Mr. Yates

I did not get an answer to my question about Tipperary Enterprises. I understand the point the Minister made about the Oireachtas Joint Committee on Commercial State-sponsored Bodies. However, the employment of private auditors was part of the problem with Aer Lingus Holidays. The board of Aer Lingus Holidays turned around and told the auditors, "you never identified this problem. How can you explain this oversight? Therefore, we are going to sue you". The private auditor system fell down so far as this company was concerned. Therefore, that point is not a valid one.

The Minister's point about the Oireachtas Joint Committee on Commercial State-sponsored Bodies is good in theory but the fact is that this committee receives a consultancy budget of only £30,000. I have spoken to members of that committee who have told me that the best they could do is examine two companies a year — there are approximately 31 companies under the aegis of that committee. While the committee works in theory and there is no need to duplicate its work, the point I am making is that the Comptroller and Auditor General, as a professional auditor, should be able to appoint staff to audit the accounts of commercial semi-State bodies. I do not wish to labour this point, and I will not be moving my amendment No. 9.

The Minister referred to the Red Cross and other organisations. May I take it that after the enactment of this legislation the Comptroller and Auditor General will be able to appoint staff to audit any of these companies as and when he sees fit? Will bodies such as the ISPCC and other bodies which receive 50 per cent of their gross receipts from a health board be scrutinised in the same way? It is not uncommon for organisations such as the Roscommon Kidney Association, or a wheelchair association which wishes to build a centre to apply for a once-off capital grant from the national lottery, a health board or a local authority. If such organisations receive 50 per cent of their gross receipts——

Acting Chairman

I said I would give the Deputy some latitude, but——

Mr. Yates

Not to the extent that I can refer to the Roscommon Kidney Association. This is my last intervention on this amendment. I am trying to clarify which organisations can be inspected under the Minister's amendment. I accept the spirit behind the amendment, but I ask here to outline which bodies, organisations and companies are included under it.

Ms E. Fitzgerald

A Leader project which received more than 50 per cent of its funding from the State will be included. A body such as the ISPCC which receives more than 50 per cent of its funding from a health board or the Department of Health will also be included.

Mr. Yates

Regardless of the organ which gave it the money?

Ms E. Fitzgerald

The amendment provides that a body which receives more than 50 per cent of its funding from the State is deemed to be a semi-State body for the purposes of this section. We must look at the total State funding channelled both directly and indirectly to bodies. It is not intended that people on FÁS schemes will be deemed to receive indirect funding. The amendment does not deal with that kind of indirect funding.

Mr. Yates

As sure as night follows day, there will be a scandal in FÁS.

Ms E. Fitzgerald

One has to adopt a reasonable approach in this respect.

Amendment agreed to.

Ms E. Fitzgerald

I move amendment No. 7:

In page 14, line 47, to delete "year." and substitute "year, and".

Amendment agreed to.

Ms E. Fitzgerald

I move amendment No. 8:

In page 14, after line 47, 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 whom paragraph (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 first mentioned person in that year.".

Amendment agreed to.

Amendments Nos. 9 and 10 not moved.

Acting Chairman

Amendment No. 11 in the names of Deputies Cullen and Cox. Amendments Nos. 12 and 13 are related. Is it agreed that we take amendments Nos. 11, 12 and 13 together? Agreed.

Mr. Cox

I move amendment No. 11:

In page 15, line 49, after "General" to insert "for the purpose of ensuring economic, efficient and effective management of resources, the report of the Comptroller and Auditor General may recommend systems, procedures and practices deemed to constitute best practice in respect of any matters examined under this section".

I note with approval the Minister's amendment No. 12 which, in substance, picks up the intent of this amendment. This amendment deals with the issues of value for money, effectiveness and the necessity to be able to compare systems. procedures and practices. Of all the innovations proposed in the Bill, section 9 is perhaps the key innovation. Last week the Minister argued that it might be invidious to expect the Comptroller and Auditor General to come up with a thesis of best practices, so to speak. I welcome the formulation of that notion into a comparison of systems. Unless every system is like a curate's egg — good in spots and bad in spots — presumably some systems will be better than others and a comparison will, of itself, recommend best practice. This is extremely important. I rise to speak on this amendment not to take issue with the Minister's amendment but to point out the necessity to ensure that great emphasis is placed on this matter in any dealings between the Minister's Department and the Comptroller and Auditor General's office in regard to the implementation of this legislation. Members of the House look forward to getting comparitive material. This is precisely the point made earlier by Deputy Yates in relation to his amendment on section 8. It is in the comparison of procedure, practice and system that there is so much to learn across the public sector. The group of amendments now under discussion tries to take that aspect on board.

Having regard to the Minister's amendment No. 12, I should be happy to withdraw amendment No. 11, tabled in my name and that of Deputy Cullen. I welcome amendment No. 12.

Subsection (3) of amendment No. 12 picks up the substance of amendment No. 11. Subsection (4) of amendment No. 12, which deals with section 9, states:

Where the Comptroller and Auditor General proposes to make any examination under this section, he may, at his discretion, seek the views of the Committee of Dáil Éireann established under the Standing Orders of Dáil Éireann to examine and report to Dáil Éireann on the appropriation accounts.

Given that the Comptroller and Auditor General is the only constitutional officer who does not report to or work directly for the Executive, as distinct from reporting to this House, that provision is useful. Perhaps I am anticipating an issue that will be reached later, but I regret that the Ministr's amendments do not give any indication of Government willingness in terms of policy to concede that there may be instances when, for example, the relevant committee of the House might invite the Comptroller and Auditor General to initiate a special project audit. In any one year we benefit from the report of the Comptroller and Auditor General in that we are able to consider various special reports.

Given the very particular nature of the office of Comptroller and Auditor General, which as I said, expressly relates to the functions of the House and not directly to the Executive, what is the policy logic for excluding any right of initiative on the part of a relevant committee of the House? I am disappointed that not even the slightest degree of initiative is afforded to a relevant committee. Is the Minister prepared to offer any solace in regard to that question? Even if there were a requirement that only highly specific issues could come under consideration or if the full unanimity of the committee were required — and it should be remembered that the Committee of Public Accounts normally operates on that basis — Members of the House would have open to them a reasonable amount of discretion. The right to take initiatives would, of course, have to be circumscribed — naturally, not every single project could come under investigation in such a way. However, if a committee of the House was able to take the initiative in inviting the Comptroller and Auditor General to examine particular matters that fall within its remit it would be of benefit. I am disappointed that the thrust of subsection (4) of amendment No. 12 is not towards such an initiative.

Mr. Yates

Amendments Nos. 14 and 15 make the specific point just referred to by Deputy Cox.

Mr. Cox

That is correct.

Mr. Yates

Amendment No. 12, in the name of the Minister, is welcome as it relates to amendment No. 5 in my name. However, it does not deal with some major points discussed last week.

I agree with Deputy Cox that section 9 is the most important section of the Bill, as it deals with the issue of the effectiveness of expenditure. The Government has limited the level of the review of effectiveness to systems, procedures and management. The effectiveness of programmes does not come within the scope of that review.

Subsection (4) (a) of amendment No. 13 proposes that the expenditure programmes undertaken should also be reviewed. In other words, the Comptroller and Auditor General should be able to say to what extent the TB eradication programme eradicated TB, to what extent the housing programme alleviated homelessness and the effect welfare programmes had on poverty. At present, all that can be reviewed is the effectiveness of departmental officers in the expenditure of money. The Government has missed the whole point, the need to be able to examine the value gained for the money spent. It appears that those concerned with expenditure who wanted just their own jobs scrutinised, rather than examining the main thrust of the programmes, have got their own way in the White Paper but it funks the big question.

I feel very strongly that the office of the Comptroller and Auditor General should be supplemented by a new office. Someone should be able to advise the House on value for money of public expenditure per se, which verges on a policy area and which would, undoubtedly, be controversial. There are many examples of matters that should be examined, for instance, the value for money gained from computerisation programmes, the opportunities computerisation has opened up for staff redeployment and the potential savings in terms of staff redeployment of further computerisation expenditure. At present the only aspects that can be examined are whether the computers worked effectively, whether they provided value for money and whether the money was spent on computerisation, as planned. The main point at issue is ignored — why the computers were installed in the first place and how many staff members were released. The taxpayer is interested in the big picture. Therefore, if the Government wants to avoid getting the advice of the Comptroller and Auditor General on areas in which £200 million of the £10.5 billion spent on public expenditure might be saved, a new office could be set up along the lines of the “Board Snip” which operated when former Minister MacSharry had responsibility for the Department of Finance, when there was some iron resolve in that Department unlike the present ritual when people come along with bloated spending estimates. For the past few years the effect of the present system has been an increase of 6 per cent in public expenditure, with no improvement in public services. In this regard the resolve of the Department of Finance is weak and withering.

Did the Minister, in her discussions with her programme managers and advisers, put to them the arguments made in the White Paper? It is a cop-out to say that this concerns a policy question and that the House does not want to get into the area of policy. Informed judgments about policy cannot be made without the availability of information on the cost of programmes, not the cost of management programmes or the systems followed. For example, one could analyse whether the expenditure of Structural Funds — funding on which the Minister is waxing eloquent at present — on infrastructural projects eliminated the worst traffic bottlenecks——

Mr. Cox

It did in Castlebar.

Mr. Yates

——was made on the basis of marginal political constituencies, or where Ministers were involved. We should be able to analyse the strategic routes taken vis-à-vis airports and seaports and the way in which expenditure on them was made. The Comptroller and Auditor General can only say that the money was spent through a particular contractor or local authority, that a certain number of kilometres was the subject of road works and that provision was made for a hard shoulder and a couple of traffic islands, for instance. It brings into question the accuracy of the expenditure, the compliance of the expenditure; it does not deal with the fact of the road perhaps having been constructed in the wrong place, which is the most important question for the taxpayer. People on this side of the House have to ascertain how we can improve government, how we can improve value for money, how we can improve the lot of the taxpayer, either by saving money or getting better public services and facilities. But we cannot make informed judgments because there is nobody to advise us on that. All we are getting is an historic analysis of expenditure.

Therefore, what I am seeking to do is to ensure that the Comptroller and Auditor General, or some adjunct to his office, could identify areas of duplication of effort, a number of which spring to mind. Again I come back to the Department of Defence, where one may well pose the question: are those responsible for the managerial aspects of the Army doing what the Department of Defence is doing and, if so, what are 300 people in the Department of Defence doing? Undoubtedly there is duplication.

Within the Minister's own Department, the Department of Finance, the question arises: what work is being duplicated in that Department that is being done by accounting officers in other Departments? I contend this constitutes a major gap in public adminstration. We must remember who is writing these White Papers. Perhaps it is the accounting officers who are writing them, who do not want the effectiveness issue to be raised or big questions to be asked. Politicians must take responsibility because at the end of the day it is we who are accountable to the public, not the accounting officers. We are the people who can be voted out, not the accounting officers — they remain regardless of whether they have wasted money or expended it wisely. I do not wish to be accused of bashing the Civil Service, but the fact of the matter is that if we complacently accept that everything is all right, nothing will ever improve. If the Minister believes that within expenditure of £10.5 million there is no waste, I do not share that view. Beginning from that disposition, I believe we need to strengthen the provisions of the Bill.

While the Minister of State has moved in paragraph (b) to a point that will arise later in amendments Nos. 14 and 15, it was still a bit wishy-washy. She used phrases such as "may" or "under consideration, examination or analysis". That is very weak. I do not like it. I prefer something tangible not open to ambiguity. We should remember that a point of law is to give certainty, not give rise to ambiguity. After all what we are doing is making law.

Those who lectured us on probity have not gone one step further and sought in Government to ensure there would be value for money. If one is seroius about open Government what one needs is a new office of public expenditure comptroller who can advise this House independently and say that there is waste or duplication in a Department or that an expenditure programme is not achieving the objective set for it by the policy makers. In such circumstances the effectiveness of the whole programme comes into question rather than the effectiveness of its management. I regret that the Minister has baulked at this, has pulled back from it and has not, in consultation with her experts, seen the merits of the argument.

Ms E. Fitzgerald

Having listened to lengthy submissions on amendment No. 13, perhaps I might be permitted to move amendment No. 12.

Acting Chairman (Mr. McGrath)

I am told that does not arise at present.

Mr. Yates

Amendment No. 11 was the amendment moved.

Ms E. Fitzgerald

I understood that the Deputy was not pressing amendment No. 11.

Acting Chairman

The Minister can speak on amendments Nos. 11, 12 or 13. Amendment No. 11 has been moved. She can speak on the others if she so wishes.

Ms E. Fitzgerald

Perhaps I can speak in favour of my amendment No. 12. As Deputy Cox has acknowledged, the first part of amendment No. 12 deals with the point he is making in amendment No. 11. Omitting the phrase "best practice", I think he acknowledges the point we have been trying to make here: that we should examine systems in a comparative sense rather than saying which is the best. That is fair enough. Amendment No. 13 (4) allows the Comptroller and Auditor General, at his discretion, to seek the views of the Committee of Public Accounts in relation to project audits. As we discussed on the last occasion, the Comptroller and Auditor General is a constitutional officer. Therefore, it would not be appropriate for the committee to direct the Comptroller and Auditor General in any particular area. But, given the close relationship between the two, this gives explicit power to the Comptroller and Auditor General to seek the views of the committee.

When the Bill has been enacted there will be a review undertaken of the terms of reference of the Committee of Public Accounts at which point we would seek to insert a section which would specify the committee may put forward their views. That would deal with that point. I do not think there would be any problem with it in practice, but in legislation we need to respect the constitutional autonomy of the Comptroller and Auditor General. That is why the word "may" is used in this case. It is not an attempt to be wishy-washy but rather an attempt to meet the point but to do so in a way that respects the constitutional independence of the Comptroller and Auditor General.

Amendment No. 13 invites the Comptroller and Auditor General to carry out economic appraisals. In section 9 there is a distinction to be drawn between issues of economy and efficiency and that of effectiveness. What the Bill proposes is that the Comptroller and Auditor General, in terms of value for money, can pursue economy, efficiency and systems to ensure there is effectiveness.

This morning we established a series of committees of this House. Those committees will be looking at Estimates. That is the manner in which this House will be examining effectiveness at the policy end of what is involved in particular expenditure programmes. The public expenditure division of the Department of Finance is charged with the task of monitoring and controlling public expenditure in other Government Departments, including examining the effectiveness of programmes. It is that body, plus the Government, rather than an outside body, such as "An Bord Snip", that examines public expenditure programmes.

Deputy Yates mentioned the effectiveness of housing programmes in tacking homelessness as being one of the issues involved. One of the main effects of "An Bord Snip" was virtually to abolish the local authority housing programme when homelessness soared. We have seen a massive increase in numbers of local authority housing waiting lists nationwide as a result of a policy decision to abandon a housing programme rather than something that was about trimming its effectiveness or examining whether we are getting value for money in our contracts and so on.

Mr. Yates

That was a policy issue.

Ms E. Fitzgerald

It was a policy issue. I would not deify "An Bord Snip" as being about achieving effectiveness rather than something that has intruded into policy areas. Certainly I would query policy decisions they took and the fiscal rectitude achieved on the backs of our homeless. I am glad to note that the present administration has been in a position to reverse that policy and has resumed a serious local authority housing programme which in time will overturn the damage done within that earlier period.

In regard to the point Deputy Yates made about the cost effectiveness of programmes, I contend it is necessary to draw this distinction between the general value for money audit and getting into the policy area. There are to be established now committees of this House which will have the time to delve into the kind of policy detail that is required. There is a role for the Comptroller and Auditor General in ensuring that the staff in each Department are geared up and have assistance in place to ensure effectiveness.

Where Deputy Yates's amendment No. 13 — subsection (4) (b) — refers to proposed future expenditure programmes, I should say that relates to policy and would be entirely inappropriate for the Comptroller and Auditor General. Paragraph (c) refers to the need to identify areas of duplication of effort and expense and other areas of inefficiency. The substantive point there is covered already in my amendment No. 12, where it is said "make such comparisons, including comparisons of systems, procedures and practices". The power being given the Comptroller and Auditor General to undertake such comparative studies will identify areas of duplication of effort or other areas of inefficiency. Therefore, that point would be covered.

In relation to policy, as more of the work of the House will be done by committees it will be able to examine the Estimates in more detail and to review the effectiveness of the policy decisions which lie behind them. This has not been possible up to now because only a cursory look was given to the Estimates. Under the process of Dáil reform committees will specialise in particular areas. For example, the social affairs committee will consider developments in the social welfare area and review the effectiveness of policy decisions to see if they are succeeding in eliminating poverty while Ministers and their Departments will be called to account for the effectiveness of their objectives.

It is important that we do not involve the Comptroller and Auditor General, who is independent under the Constitution, in policy matters. Under the new arrangements the powers of Deputies will not be diminished but rather increased. However, we need to make a distinction in relation to the role of the Committee of Public Accounts. It may well be that in the past, in the absence of an effective committee system in this House, the Committee of Public Accounts broadened its remit to examine matters which should more properly have been examined by a policy committee.

Acting Chairman

Is Deputy Cox pressing his amendment?

Mr. Cox

No, but I seek your guidance. We have been discussing amendments Nos. 11, 12 and 13 but it strikes me that it would be appropriate, before we reach a final conclusion, on the issue, to discuss amendments Nos. 14 and 15 having regard to the fact that all these amendments refer to matters on page 15, line 49.

Acting Chairman

It has already been agreed that amendments Nos. 11, 12 and 13 should be discussed together. We must first decide on these before we can move to amendments Nos. 14 and 15.

Mr. Cox

I regret to say that I have to contest the Chair's decision and will point out my reason for doing so. I spoke briefly on amendment No. 12 which seeks to include a new subsection (4) which relates to the relationship between the Committee of Public Accounts and the Comptroller and Auditor General. This is also the subject matter of amendments Nos. 14 and 15. In addition, amendments Nos. 12, 14 and 15 refer to page 15, line 49. It seems that if we are to agree to the Minister's proposal we should first tease out the implications of amendments Nos. 14 and 15. I ask that we be given that opportunity before we reach a final conclusion on the matter.

Ms E. Fitzgerald

I support the Deputy having regard to the fact that amendments Nos. 12, 14 and 15 deal with the same point.

Mr. Yates

I have no problem with that and it should not take that long to deal with them. The House can do what it likes if there is agreement.

Acting Chairman

Since there is agreement it would be sensible to do this. Therefore, amendments Nos. 14 and 15 may also be discussed with amendments Nos. 11, 12 and 13.

Mr. Cox

Amendment No. 15 is similar to the amendment tabled by Deputy Yates. I listened with great care to the point the Minister of State made in relation to the constitutional position of the Comptroller and Auditor General, that it would be most improper if this House was allowed to intrude into the domain of that office. Nonetheless, I notice that amendment No. 12, which seeks to include a new subsection (4) in section 9 — I welcome this and the Minister of State is quite correct to make provision for this — reads:

Where the Comptroller and Auditor General proposes to make any examination under this section, he may, [I agree that it should not be mandatory] at his discretion, seek the views of the Committee of Dáil Éireann established under the Standing Orders of Dáil Éireann to examine and report to Dáil Éireann on the appropriation accounts.

This proposal that the Comptroller and Auditor General should have discretion is to be welcomed and in giving him discretion we are not creating an offence in relation to the constitutional position of the Comptroller and Auditor General in the sense that the word "may" is used as opposed to the word "shall".

May I make the parallel case? Without prejudice to the constitutional position of the office amendment No. 15 in my name reads:

The Committee of Dáil Éireann established to examine and report on the appropriation accounts may direct the Comptroller and Auditor General ...

I note that the word "direct" is infelicitous and improper in the context of the constitutional position and that we are going to replace the notion of directing the Comptroller and Auditor General with the notion of requesting.

Would it be possible, in parallel with the proposal in amendment No. 12 to give the Comptroller and Auditor General discretion to consult the relevant committee, to allow that committee discretion to request the Comptroller and Auditor General to do certain things? If the Comptroller and Auditor General will have discretion to communicate with the relevant Dáil committee it would be appropriate that there be traffic in the opposite direction which would be subject to the same requirement. This would respect the House and this constitutional office-holder who deals with this House rather than with the Executive. Furthermore, it would create no offence in relation to the legitimate domain and sphere and activity of the Comptroller and Auditor General provided that we remove the reference, which I accept may be deemed improper, to the notion of directing the Comptroller and Auditor General. I ask the Minister of State to consider making an addition to her amendment to provide for a flow of traffic in the opposite direction. This would follow the receipt of a request and not as a result of a direction. If the Minister can allow the Comptroller and Auditor General, at his discretion, to communicate with the relevant Dáil committee without creating an offence in relation to the domain and functions of that office the committee ought to have discretion in the matter without creating any offence in relation to the constitutional position which the Minister of State is trying to preserve.

Having listened to what the Minister of State had to say she has a point that the language used in amendment No. 15 is improper in the sense that it includes the word "direct" but it would be entirely proper if it included the word "request". I ask the Minister of State to consider this request given that she made the point that an attempt is being made to enhance the political process. I agree with some of the remarks she made earlier and I do not stand for the view that we should abdicate to various officers of the State, including the Comptroller and Auditor General, functions which are properly the preserve of politicians such as those which relate to public policy reviews, programming and priorities which suit the overall national interest. I argue strongly that we should, in parallel with the new subsection (4), give the committee discretion. Even at this very late stage I urge the Minister and her advisers to consider that, because I believe it is appropriate and it could be done if the infelicitous phraseology of my amendment was to be changed.

Ms E. Fitzgerald

Deputy Cox has accepted the point that we cannot direct the Comptroller and Auditor General, but it might be considered if in legislation we phrased it as a request. The feedback we got on this amendment was that it was too direct in terms of the Comptroller and Auditor General's constitutional independence. I think the point is best teased out in the terms of reference of the Committee of Public Accounts when the Bill is being enacted. I said already that the power of initiation should be given to the Committee of Public Accounts. Provided the constitutional niceties of the office of Comptroller and Auditor General are respected and the Comptroller and Auditor General does not feel he is being pushed about, in practice there will be no problem in terms of joint co-operation. That is the way to address the substantive point being made rather than the way the Deputy suggested.

Acting Chairman

We are discussing two groups of amendments, amendment Nos. 11 to 15, inclusive, which should be recommitted.

Bill recommitted in respect of amendments Nos. 11 to 15, inclusive.

Mr. Yates

I move amendment No. 11:

In page 15, line 49, after "General" to insert "for the purpose of ensuring economic, efficient and effective management of resources, the report of the Comptroller and Auditor General may recommend systems, procedures and practices deemed to constitute best practice in respect of any matters examined under this section".

I hope the Chair will allow some latitude in the debate.

Acting Chairman

Everbody will be able to speak again.

Mr. Yates

I have listened to the points going ping pong across the floor and I do not agree with the point on which consensus has been arrived at.

Everything is fine while the present holder of the office of the Comptroller and Auditor General is still there, but we have to provide in law for the future where there may be somebody who regards politicans as a crowd of wasters, who may not have any respect for Members of the House or members of the Committee of Public Accounts. We have to provide in law for certainty in any situation that might arise. I think the words the Minister has put forward are too grovelling in nature. Subsection (4) of the Minister's amendment states:

Where the Comptroller and Auditor General proposes to make any examination under this section, he, may, at his discretion, seek the views of the Committee ...

The Minister uses the word "may", not "shall", and she also adds the words "at his discretion" in case the committee is stroppy in trying to do its work effectively. I think the words "at his discretion" are superfluous and I ask the Minister to consider withdrawing them. In the Constitution the Dáil has primacy, because the people have spoken and elected a Dáil. From an examination of the White Paper which deals with the revised terms of reference of the Committee of Public Accounts, it is quite clear that the Dáil takes precedence over everything. While the Comptroller and Auditor General is a constitutional officer, I do not accept that he is above the Dáil or that he is not answerable to the Dáil. The whole point of his office is that he is uniquely accountable to the Dáil and, in this case, to the Committee of Public Accounts.

As the amendments have been recommitted and we can discuss them again, will the Minister confirm that the proposed terms of reference set out in pages 41 and 42 of the White Paper will still apply or whether in the light of this debate it is intended to expand on them. On the last occasion a number of points were raised in discussion but there is no point where we can discuss the terms of reference of the Committee of Public Accounts except here. Will the Minister comment on whether the terms of reference need to be expanded?

I have great respect for the collective wisdom of the Committee of Public Accounts. As has already been explained, it is non-political. In my amendment No. 14 I sought to insert the words "may direct the Comptroller and Auditor General"; but the word "direct" and "shall" have been taken out and therefore the words in the Minister's amendment "at his discretion" are totally unnecessary. The Comptroller and Auditor General could point to what exactly was said in the Dáil and say that it was entirely up to him, or the person at the time, whether he listens to us or not. While there is a harmonious working relationship between the Committee of Public Accounts and not only the Comptroller and Auditor General but also the Secretary of the Department of Finance, the fact is that this may not always be the case and I believe paramount discretion should be given to the committee in this instance.

This is particularly appropriate in relation to project audit reports. Either way the Office of the Comptroller and Auditor General will do a root and branch analysis of the spending of every spending Department. Therefore, the area of special study is not in dotting the "is" and crossing the "ts" but in the project audit area. I believe the committee will have a level of expertise that reflects the ordinary punter in the street in areas that might warrant attention. It may also be the case that the committee could say that it does not think two project audits are enough for £10.5 billion expenditure. It may believe that it is necessary to carry out six or seven project audits at a minimum. There are matters of detail here which are very pertinent to the real effectiveness of the committee and which go beyond the relationship of the present members of the Committee of Public Accounts and the present holder of the Office of Comptroller and Auditor General.

Apparently the Minister cannot accept my amendment No. 14 because of her absolute determination to revere the Office of Comptroller and Auditor General and because she does not feel the House has a role to direct or instruct the Comptroller and Auditor General within certain parameters. That attitude presupposes that the committee is reckless or irresponsible and that it would ask him to do things which he would not want to do. I do not think that is so. I ask the Minister specifically to remove the words "at his discretion" from amendment No. 12.

Mr. Rabbitte

I apologise to the House for having to leave to attend a meeting of the Committee of Public Accounts. I am not sure that on this occasion I agree with my Opposition colleagues Deputies Yates and Cox. One of the very valuable things about the office of the Comptroller and Auditor General is its constitutional status. From my experience, notwithstanding the good intentions behind the amendments, I can see a situation where, in the nature of adversial politics in this House, members of the committee would want to send off the Comptroller and Auditor General to carry out audits of issues that might be controversial at the particular time. I do not think this would necessily add anything to the valuable role he plays.

As I understand it — I have not heard the Ministers's contribution — we may at any event discuss a particular project with the Comptroller and Auditor General if we are so disposed. There is nothing preventing us from doing this. The relationship is very good, it is long established over the years with the changing personnel of the Committee of Public Accounts. There is no inhibition there. If the chairman of the committee on its behalf were to recommend to the Comptroller and Auditor General that the committee felt very strongly about a particular matter and that it ought to be the subject of an audit report, I believe that within the resources the Comptroller and Auditor General would be likely to take that on board.

Mr. Cox

That is precisely what this is about.

Mr. Rabbitte

It is precisely what it is about, but it is seeking to give to the Committee of Public Accounts the power to direct the Comptroller and Auditor General.

Mr. Cox

The Deputy missed out, because we have changed the offending phrase to try to see if it could be done in a discretionary way.

Mr. Rabbitte

We are talking about excising "at his discretion".

Mr. Cox

We are talking about a request, not about issuing a direction.

Mr. Yates

The question relates to the adequacy of subsection (4) of amendment No. 12.

Mr. Rabbitte

Deputy Yates spoke about the removal of the phrase "at his discretion". I have no hang-up about that; it may even strengthen the Minister's amendment. The consultation process envisaged in the amendment may also be to the advantage of the committee. For example, the committee may wish to seek the views of the Comptroller and Auditor General or to request him——

Mr. Cox

That is precisely the point we were discussing.

Mr. Rabbitte

Therefore we are ad idem on this matter. If the various parties constituting the Committee of Public Accounts are in agreement on some matter and the chairman, acting on behalf of the committee, wishes to request the Comptroller and Auditor General to do whatever is contemplated it seems reasonable that he should respond to such a request. The caveat, “at his discretion”, adds nothing to the term. If that is all that is at issue the Minister ought to accede to the request. The relationship between the Committee of Public Accounts and the Comptroller and Auditor General is a very important one and, as Deputy Yates said, I do not think it is likely to be abused. I was talking in the context of the committee having power to give the Comptroller and Auditor General a direction and in view of that being excluded what is sought here is reasonable.

Ms E. Fitzgerald

I think Deputy Rabbitte missed some of the discussion. It is envisaged that the terms of reference of the Committee of Public Accounts, as proposed in the White Paper, be extended as soon as the legislation is passed to include a form of words to allow the committee to initiate suggestions in terms of project audits. The reason the words "at his discretion" are included is to underline the constitutional autonomy of the Comptroller and Auditor General. There are legal tomes on the use of the word "may". If it is used in this case without the words "at his discretion" it could be construed as meaning that he "shall" do something. That could be perceived as being a directive to the Comptroller and Auditor General which would not be constitutionally appropriate. That is why the words "may at his discretion" are included as a phrase.

This matter relates to constitutional autonomy which is something that is jealously guarded, and rightly so, by the Comptroller and Auditor General. For example, he can only be removed from office for stated misbehaviour. We need to be careful in this regard. There are no practical problems posed by my suggestion to include subsection (4) of amendment 12 which gives the Comptroller and Auditor General the right at his discretion to consult with the committee on the areas in which project audits will take place.

We propose, through the terms of reference of the Committee of Public Accounts, a parallel function for that committee in terms of suggesting areas in which project audits might take place, in a way that respects the constitutional independence of the Comptroller and Auditor General. I do not anticipate under this or any future Comptroller and Auditor General practical problems arising provided the niceties are observed and we avoid, to use Deputy Cox's phrase, infelicitous language.

Mr. Cox

I know the Chair has given some latitude in this matter and I do not wish to abuse that position but I would like to refer to Article 33 of Bunreacht na hÉireann. Of course the constitutional position of the Comptroller and Auditor General must be respected. Article 33.6 of the Constitution states: "Subject to the foregoing"— in other words all the constitutional niceties that have to be observed —"the terms and conditions of the Office of Comptroller and Auditor General shall be determined by law". We are making law, not rules about the procedures of the Commitee of Public Accounts. I accept the Minister's bona fides that the Committee of Public Accounts should have the ability to request, at the discretion of the Comptroller and Auditor General, that certain matters be considered. Now that we are making law consistent with the Minister's stated policy in respect of the terms of reference of the committee and with Article 33.6 of the Constitution, why not state the policy in law and the detail can follow in terms of procedure and practice?

Mr. Yates

The Minister did not answer my question about the terms of reference of the committee.

Ms E. Fitzgerald

It is envisaged that they be wider than those proposed in the White Paper to include points raised in the debate.

Mr. Cox

Can the Minister not use discretion with her advisers to consider the matter in respect of law making?

Ms E. Fitzgerald

It can be seen from today's Report Stage debate that I have used considerable discretion. I acknowledged many of the points made in the very constructive debate we had on Committee Stage. I have gone a long way in meeting the points raised. On this matter there was specific consultation with the Comptroller and Auditor General and, arising from that consultation, I am putting forward this proposal. The Comptroller and Auditor General is doing an excellent job and if he feels that certain forms of words or certain ways of achieving the desired result would impinge on his constitutional independence we should respect his view. My proposal will achieve the desired result and I see no problem with it. It is important, in terms of the language used, that we respect the constitutional independence of the Comptroller and Auditor General.

We are taking a two-fold approach in this matter. First, the Comptroller and Auditor General will be empowered at his discretion to invite the views of the Committee of Public Accounts on what areas project audits should be carried out. Second through the terms of reference the Committee of Public Accounts will be empowered to put forward suggestions in relation to project audits rather than make requests which may sometimes be considered as directives. If the work is carried out in that way I envisage no great problem in carrying out project audits. We are talking semantics here. It is important that in achieving our objectives we respect the constitutional independence of the Comptroller and Auditor General.

Mr. Cox

I will not be pressing this matter. I acknowledged earlier that the Minister has come a long way in regard to a number of points brought to her attention by the Opposition. The Minister has had the opportunity to consult the Comptroller and Auditor General and neither he nor the Minister should presume that this House wishes to impinge in any improper way on the function of the Comptroller and Auditor General. Perhaps, if the Comptroller and Auditor General was here listening to the views of the House he might be happy to agree to our suggestions. Of course, this House must take account of constitutional officers and their rights but we too have rights and that is what we are trying to tease out. I welcome the Minister's unqualified reassurance that the Committee of Public Accounts will be empowered to determine questions about special audits and, through its procedures, to bring those to the attention of the Comptroller and Auditor General. If the Minister pursues that policy I will let the matter lie because we will have arrived at the desired conclusion, which was not signalled by amendment No. 12 (4).

Amendment, by leave, withdrawn.

Ms E. Fitzgerald

I move amendment No. 12:

In page 15, after line 49, to insert the following:

"(3) Without prejudice to the generality of subsections (1) and (2), the Comptroller and Auditor General may, in carrying out examinations under this section, make such comparisons, including comparisons of systems, procedures and practices, as he considers appropriate.

(4) Where the Comptroller and Auditor General proposes to make any examination under this section, he may, at his discretion, seek the views of the Committee of Dáil Éireann established under the Standing Orders of Dáil Éireann to examine and report to Dáil Éireann on the appropriation accounts.".

Amendment agreed to.

Mr. Yates

I move amendment No. 13:

In page 15, after line 49, to insert the following:

"(3) In carrying out examinations under this section, the Comptroller and Auditor General may also carry out an economic appraisal of a person, body or fund to whom this section applies and may publish his report thereon.

(4) In carrying out an appraisal under subsection (3) the Comptroller and Auditor General may have regard in particular to—

(a) actual expenditure programmes undertaken,

(b) proposed future expenditure programmes, and

(c) the need to identify areas of duplication of effort and expense and other areas of inefficiency,

but he shall not include in his examination or his report those matters which constitute the policy of the person, body or fund which is the subject of review.".

Amendment put and declared lost.

Amendments Nos. 14 and 15 not moved.

Amendment No. 12 reported.

Acting Chairman

We are now out of Committee Stage and the rules in relation to Report Stage apply.

Mr. Yates

I move amendment No. 16:

In page 17, between lines 27 and 28, to insert the following:

"(4) Whenever the Committee of Dáil Éireann established under the Standing Orders of Dáil Éireann to examine and report to Dáil Éireann on the appropriation accounts makes a report to Dáil Éireann following its consideration of a report of the Comptroller and Auditor General, the report of such Committee shall be considered by Dáil Éireann as soon as possible after it is laid before it.".

This is a matter of some practical concern as it is not possible within the terms of reference of the committee to solve this. It is a matter for the House and relates to the whipping system and so on.

We have often had excellent reports from the Public Accounts Committee which never got beyond its hallowed chambers and which were not discussed in the House. The delay in dealing with this legislation is evidence of that. Deputy Gay Mitchell and other members of the committee have been seeking this legislation for some time. It is important that the House should give the Public Accounts Committee the respect it deserves by including a section in the Bill to specifically provide for a proper debate on its reports. Given the nature of debates in this House, for instance on the Estimates, we know that there will be a panic to get through 20 or 30 Estimates amounting to hundreds of millions of pounds in the three days before the summer recess; I might get 20 minutes in which to contribute and Deputy Rabbitte might get four. Hundreds of millions of pounds go through without proper analysis. The checks and balances in the system are non-existent. It suits the Executive to have it this way, to remove itself from proper scrutiny.

The jury is out on all these committees. I chaired the Oireachtas Joint Committee on Small Businesses. I know that the success of any committee is entirely dependent on the chairperson and on the back-up resources available. The primary responsibility of Deputies is to be reelected, let us make no mistake about it, which is not unreasonable. However, as there may be difficulty in obtaining a quorum for all these committees we should not assume that the proposed committee system will be a panacea for all our ills. The debates on the floor of the House will still constitute an important aspect of our work and the plenary sessions of the Dáil will still be those most likely to attract public interest and debate. If we are to take the Public Accounts Committee seriously the Minister should agree to amendment No. 16 which would allow for debate on the reports as soon as possible. Reports may never be debated unless such provision is made. I do not accept that any change in the terms of reference of the committee would cover my proposal for debates on the floor of the House. If we are to take the question of public expenditure control and scrutiny seriously we should accept this amendment.

Mr. Rabbitte

I am happy to support the thrust of Deputy Yates's amendment because it raises the important point that much of the work done by the Public Accounts Committee remains in the confines of the committee and this House is rarely given an opportunity to debate it. The Deputy's caveat as to the efficacy of the committee system is timely. It remains to be seen how the new array of committees will work in practice.

It is a pity that Dáil reform is equated in the public mind with setting up new committees. Our situation is not comparable with the House of Commons where they have 650 members, even when one takes out Ministers and Front Bench spokespersons there are still over 500 members, many with expertise, who are available and anxious to contribute in their area of expertise. When one extracts 30 Ministers and at least 15 Front Bench spokespersons from the Members of this House it remains to be seen whether the very onerous committee structure imposed on our existing system can work. I am sure that, for instance, Deputy Mitchell would like to have been here for the debate this morning, but he was chairing a meeting of the Committee on Public Accounts. We will come up against that kind of problem regularly.

I approve of the spirit of the amendment. In the last year of the previous parliament we had a very detailed hearing of evidence and a report on what became known as the Carysfort Affair. The House did not debate that report, which was regrettable, apart entirely from its appropriation accounts dimension. I urge the Minister to accept this amendment.

Ms E. Fitzgerald

I will be happy to accept the amendment. In the interests of Dáil reform, it might speed up the discussion.

Mr. Cox

I welcome the Minister's acceptance of the amendment. I recall Deputy Rabbitte's phrase in relation to carpe diem. If we did not follow what he was getting at we might have spent the whole day carping.

I recall that in the European Communities Act, 1972, there was a provision for elegant reports to be drawn up every six months. A shelf in my office is groaning under the weight of these six monthly reports which, unfortunately, notwithstanding the provision, were not discussed in the House. In welcoming this amendment I urge the Government and all sides of the House to take these things seriously and schedule them at an appropriate stage. We should not, as we do with European business, catch up once every decade with 20 odd reports that have been lying fallow in the meantime.

Mr. J. Mitchell

I congratulate Deputy Yates on his amendment and I thank the Minister for accepting it. This is a significant step in the right direction. If Dáil reform means anything it should enable the House to perform its major role of holding the Administration and the Executive to account in the interests of the public. We can only do so if reports like those from the Public Accounts Committee are debated speedily.

Amendment agreed to.

Mr. Yates

I move amendment No. 17:

In page 17, between lines 27 and 28, to insert the following:

"(4) The Comptroller and Auditor General may, from time to time, undertake comparative studies of the control and audit mechanisms which exist in other member states of the European Communities and shall report to Dáil Éireann thereon.".

I do not wish to delay the House unduly on this amendment. Auditing of Government accounts, public expenditure, scrutiny and control is an international matter. The Minister made play of the fact that in practice the Comptroller and Auditor General consults with his counterpart in New Zealand. This is a learning time for all Comptroller and Auditor Generals. With the advent of new technology and with people dealing with trillion pound budgets people will develop an expertise. It should be part of his brief to study the European Court of Auditors and the magistrate type system. There may be lessons to be learned there as to how we might be open to change in the future because everything is constantly changing.

An aspect of the work of the Comptroller and Auditor General should be to keep up to date with international developments, liaise with the European Court of Auditors and other national audit offices. The appendix to the White Paper indicates that it was found important to carry out a study of the US, New Zealand, the UK, Canada and other countries. It is a vital part of democracy that we keep up to date. The merits of the amendment speak for themselves.

Ms E. Fitzgerald

I dealt with this point extensively on Committee Stage and with the international contacts which the Comptroller and Auditor General's office have through membership of Into-sai, the International Organisation of Supreme Audit Institutions, and Euro-sai, the European Supreme Audit Institution and through secondments, placements and constant contact with the European Commission office. This work takes place not only at European level but at a wider international level. In that sense the amendment is redundant.

Under section 13 the Comptroller and Auditor General is empowered to include any international developments in the report to this House. There is good international contact in that they try to bring good international practice into the Office of the Comptroller and Auditor General and they exchange information. The Comptroller and Auditor General does not need powers to do this as he does it and, perhaps, in that light the Deputy would withdraw the amendment.

Acting Chairman

Is the Deputy pressing his amendment?

Mr. Yates

No. I take the point the Minister of State made in relation to the example. It should be provided for in the Bill but it is not of desperate importance. In view of the time constraint I will not labour the point and will withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Yates

I move amendment No. 18:

In page 21, line 40, after "General" to insert "but shall thereafter hold office and be employed by the Comptroller and Auditor General on terms relating to pay and conditions of employment not less favourable than those terms which applied to them prior to such transfer".

All Deputies have received representations of concern from IMPACT that there would be a diminution of their position. They are concerned that they may be forced to go from, say, the headquarters of the North-Eastern Health Board in Kells to Cork or Dublin because functions relating to health boards and vocational education committees carried out by the local government audit service are being transferred to the Comptroller and Auditor General under this section.

This amendment seeks to provide a legal protection which is standard in other legislation. The pay and conditions of people no longer in the local government service under the Department of the Environment should not be less favourable. They are concerned not only in relation to compulsory redundancy but that they would be accommodated, where possible, in local offices. I am pressing this amendment because it is a matter of some concern. This is not unreasonable given that the office will be expanded. The Minister can give assurances and she has indicated that she had had consultations, but, of course, consultations are only consultations, they do not mean tangible commitments. Therefore, it is important that we keep the Government on the straight and narrow in this regard and I ask the Minister of State to accept the amendment in the interests of those who have lobbied.

Ms E. Fitzgerald

I am reluctant to accept this amendment. First, I can give assurances that what is involved is the transfer of staff from the local government audit service to the central Government audit service. Those staff will remain public servants. I can give assurances that there will be no——

Mr. Yates

What about office location?

Ms E. Fitzgerald

——changes in relation to pay or anything of the kind. In the past assurances were given in legislation when people moved from the Civil Service to semi-State bodies. Staff feared that they would have a different relationship with the Government than previously. That is not envisaged here and in that sense laying down something specfic in legislation would be redundant.

I can assure the Deputy that any transfers will be negotiated with the staff and their trade union, IMPACT, for whose negotiating skills I have great respect. The transfers will be carried out in a human and reasonable way as have all transfers which have been negotiated, for example, in the decentralisation programme. I am reluctant to take on board the phrase "conditions of employment" because there could be litigation if, for example, somebody was in a less prettily decorated room in their new office and took that as a condition of employment. If they were moving to a less attractive town than Wexford there might be litigation.

Mr. Yates

I do not think that would happen in Blacklion.

Mr. Cox

Obviously, the Deputy is not from Cavan.

Ms E. Fitzgerald

They may compare the attractiveness of different towns and so on and I do not think that would be helpful.

Mr. Cox

That would never arise in the case of Cork.

Ms E. Fitzgerald

The Deputy has sampled a number of locations in his employments and he should be able to give us comparative information on the relative attraction of various places.

Mr. Cox

Precisely.

Ms E. Fitzgerald

If overtime levels were to change on moving to a new location there could be arguments against that. I do not think it appropriate that a provision such as this should be put into legislation in the form the Deputy suggests. I have given assurances to the House that there will be proper negotiations with the staff. I have amended section 17 to allow for flexibility in relation to deployment. We envisage there will be regional operations of the Comptroller and Auditor General's office. These matters are best left to trade union and staff negotiations rather than being dealt with by way of legislation. It is not envisaged that there will be any diminution in the rates of pay or other conditions of employment. If somebody moves from an office which is painted in an attractive shade of pink to an office which is painted in a hideous blue——

Mr. Yates

Does the Minister of State believe they would get an award for that?

Ms E. Fitzgerald

——I cannot give an assurance that their conditions of employment will be considered to have diminished. In general, any transfers will be done through negotiations and in a humane way and nobody need have anything to worry about.

Mr. J. Mitchell

I am a little puzzled by the Minister's refusal to accept this amendment because, as she said, there are precedents. I recall inserting a similar provision in the Postal and Telecommunications Services Act, 1983, to give assurances to employees of the former Department of Posts and Telegraphs who were being transferred to An Post and Telecom Éireann. This greatly facilitated and eased the transition. If the Minister is as good as her word why not put such a provision in legislation? There is a problem about the Labour Party giving assurances in this House because we all remember Deputy Spring's speech on 5 November and how he went back on every word of it. I regret to say that this will have an impact on the credibility of Labour Party Ministers in this House in the future.

Acting Chairman

I cannot call on the Minister of State again.

Mr. Yates

The Minister of State has to depend on my tender mercies.

Acting Chairman

The Deputy will be bowing to my tender mercies because it is now 1.30 p.m.

Mr. Yates

It is important that the Labour Party vote this provision down. Are they reluctant to give workers these rights?

Acting Chairman

It is now 1.30 p.m. and I cannot put the Deputy's amendment. I am required to put the following question, in accordance with an order of the Dáil of this day: "That Fourth Stage is hereby completed and that the Bill is hereby passed."

Question put and declared carried.

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