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Dáil Éireann debate -
Tuesday, 11 Oct 2011

Vol. 743 No. 1

Other Questions

Fiscal Policy

Brendan Smith

Question:

47 Deputy Brendan Smith asked the Minister for Public Expenditure and Reform his views that the recommendation of the Central Bank of Ireland to make a bigger budget adjustment to public expenditure than agreed with the EU-IMF is the correct action to take; and if he will make a statement on the matter. [28534/11]

The general Government deficit target for 2012, as set by the ECOFIN Council in December 2010, is 8.6% of GDP. The Government is fully aware of the importance of achieving this target in the context of the 2012 budget as well as the views of those who have called for a more ambitious deficit target. The Government is currently examining all options as regards the required consolidation in 2012, including the results of both the comprehensive review of expenditure and the capital review. In addition, both my Department and the Department of Finance are currently in the process of assessing what implications the latest budgetary and economic data might have for 2012 and beyond. Such assessment will, along with other data, inform Government in the context of its budgetary preparations over the coming months.

The next step in this process is to publish an estimate of the 2012 deficit and the level of budgetary adjustment required to meet our deficit reduction target. That will be done at the end of the month in the pre-budget outlook.

The Minister made no reference in his response to the matter I raised regarding his views on the recommendation made by the Central Bank of Ireland. It suggests that the opportunity exists now to consider a bigger budget adjustment to public expenditure than agreed with the EU-IMF.

I will deal with that in the supplementary reply.

The Minister might give me his views on that. I know there may be scope, but I caution against making any cuts that are not needed. We have a good programme. There are always some people who are tempted to go harder, faster and deeper and that may be a positive outlook, but there are downsides. There is a limit to the pain people can take and the Minister should take heed of that.

There is a lot of wisdom in what the Deputy said. The target we have to achieve next year is 8.6% of GDP. The problem is we have not quantified exactly the level of adjustment, both in terms of expenditure reductions and taxation measures, that will get us to that. We cannot do that until we see, later in the year, the outturn figures from the State revenue and get a clear picture on the growth projections for next year.

I am inclined to agree with the Deputy. Forensically, nobody in this House is in a better position than me to know the consequences of cuts following the process I have been involved in over the past number of weeks. There is no pain-free measure that can be taken. We must get the balance right. The overarching imperative for the Government is to achieve a deficit of no greater than 8.6% of GDP next year.

Ministerial Staff

Gerry Adams

Question:

48 Deputy Gerry Adams asked the Minister for Public Expenditure and Reform the action he intends to take to redress the breaking of the salary cap for ministerial special advisers of which a number are in receipt of salaries that are nearly twice his pay cap of €92,672. [28636/11]

Gerry Adams

Question:

66 Deputy Gerry Adams asked the Minister for Public Expenditure and Reform if he signed off on the salary packages awarded to special advisers appointed to Ministers that exceed his own pay cap; his views on the fact that the latter’s salaries have exceeded this salary cap; and if he will make a statement on the matter. [28635/11]

Gerry Adams

Question:

181 Deputy Gerry Adams asked the Minister for Public Expenditure and Reform the number of occasions on which special advisers were appointed by Ministers with salaries in excess of the pay scales set out in the new Department of Finance guidelines on special adviser pay; if he signed off on the salary in each case; the Minister from whom the requests came and the reasons given for the breach of the pay guidelines in each case. [28189/11]

Mary Lou McDonald

Question:

182 Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform the basis upon which he signed off on salaries to special advisers to Ministers in excess of the guidelines on staffing of ministerial offices issued by him in March 2011 in view of the fact that special advisers are to be placed on the principal officer standard scale with such appointments generally required to be at the minimum of the scale. [28249/11]

I propose to take Questions Nos. 48, 66, 181 and 182 together.

The guidelines on staffing in ministerial offices were revised following decisions by the Government on a number of cost saving measures relating to the personal appointees of Ministers and Ministers of State. The guidelines specify that all appointments of ministerial staff, including the pay and terms and conditions of employment, require the prior sanction of my Department. Appointments from outside of the Civil Service also require the sanction of the Taoiseach.

The appointment of special advisers requires the approval of Government in accordance with section 11 of the Public Service Management Act 1997. A Minister, or a Minister of State who regularly attends Cabinet, may appoint up to two special advisers. The legislation provides that there is no limit on the number of special advisers for the Taoiseach and Tánaiste. Special advisers have been employed by Ministers of successive Governments and perform an essential function in providing expert advice, expertise and insights on the key strategic issues facing Ministers on a daily basis.

The guidelines provide that special advisers are to be placed on the principal officer standard scale which currently runs from €80,051 at the minimum to €92,672 at the maximum. They provide that appointments are to be on the first point on the scale except where I approve a higher starting salary. Therefore, in cases where a special adviser's basic pay prior to the appointment was greater than the minimum, it is open to Ministers to seek sanction from me to appoint the person at a higher starting level. The guidelines provide that separate arrangements apply to the staffing requirements of the Offices of the Taoiseach and the Tánaiste.

The Government recognised there would be occasions when a higher salary was required in order to secure the appointment of an adviser with particular skills and expertise. On this basis, the guidelines provide for specific individual exceptions in circumstances that are considered to be unique, special or exceptional.

Remuneration in excess of the minimum point of the principal officer standard scale has been sanctioned by me in a number of instances based on the business case presented, which I require in each case. In the majority of cases, this has been based on evidence of higher earnings in the previous employment or the current employment of people who were being recruited by Ministers. Exceptions were kept to the minimum and in all cases value for money considerations were uppermost in my mind. In a number of cases, special advisers have been appointed on substantially reduced salaries compared to what they were earning.

There have been cases where I have approved exceptions for the pay of special advisers, other than in the case of the Departments of the Taoiseach and Tánaiste. Exceptions approved by me include advisers to the Minister for Social Protection, the Minister for Public Expenditure and Reform, the Minister for Finance, the Minister for Arts, Heritage and the Gaeltacht, the Minister for Transport, Tourism and Sport, the Minister for Jobs, Enterprise and Innovation, the Minister for the Environment, Community and Local Government, the Minister for Agriculture, Food and the Marine, the Minister for Communications, Energy and Natural Resources, the Minister for Health and the Minister for Education and Skills.

The Taoiseach has two advisers, Mark Kennelly and Andrew McDowell, who earn €168,000, and the Tánaiste has two advisers, Mark Garrett, who earns €168,000, and Colm O'Reardan, who earns €155,000. I do not know how the Minister can explain to me, the House or the citizens how this is a value for money decision. The Minister said in the House that he has made exceptions in respect of these people.

To explain to the Deputy——

The Minister sanctioned them.

They are excluded from my purview.

The Minister told me in the summertime that the pay cap would be €92,672. That is a really good salary and is competitive for any level of professionalism yet the advisers in the Department of the Taoiseach and the Tánaiste's Department are on almost double that sum. One of the other exceptions is, ironically, the Department of Social Protection. This is the same Department that will pursue to the ends of the earth those who it believes are fiddling the system for comparatively paltry amounts. The Minister has answered the question and has conceded that these guys are on big bucks on the say-so of the Minister and the Government. The essence of my question is that they are well ahead of the cap identified by the Minister. The Minister should tell this House when they will be brought down to the level of the cap, bearing in mind that it is a very substantial sum of money.

There is a view that special advisers are fair game. I have been privileged to work in three Departments. Special advisers play a unique role as a sounding board. Most of the people we recruited have come at a reduced cost. In many cases we are asking people with full-time, pensionable jobs to give them up and to work for an unknown period of time. We do not know how long their positions will last but certainly we could not give them contracts for longer than five years. We also ask them to work all the hours God sends and have their names published in national newspapers and mentioned in Parliament. Many people who we invited were not willing to do that. We need advisers and every country I know of has political advisers, even for smaller executives such as in Northern Ireland. The Deputy First Minister has three personal advisers, as does the First Minister, because it is understood that even in the absence of complicated matters such as EU-related work or engaging with the troika, a skill base outside the normal Civil Service is required as a sounding board. I want to make a case for ensuring the people we use are not significantly worse off. I agree these are all good wages. However, we are asking people to give a commitment to the State. The Taoiseach and Tánaiste are excluded from the norms of the pay grade, as I explained, so they do not require sanction to be excluded; they are excluded under the regulations already.

They should not be excluded. I wonder about the quality of the advice given by special advisers in previous Administrations. I do not have a hang-up about special advisers, but there is a real problem with those salary levels. We have had the universal social charge, pension levies and welfare cutbacks, all of which had to be implemented because things are tough and we are all in it together, yet when it comes to this coterie of people, the rule book is thrown out the window. I am not surprised the Minister cannot justify or explain it, because it is beyond any kind of justification. I put it to him again: I do not accept that Ministers could not get the type and quality of advice the Government requires while keeping advisers' salaries within the very generous cap that he himself identified. What will he do about it? Is the answer that he will not do anything about it — that this is the status quo for a minority, and everyone else just has to live with it?

I know the Deputy prefers to broadcast than to receive, but I thought I had answered those questions. We are in a crisis as a country. We are marshalling the resources of the State and making decisions that have major impacts in real time.

Over the last six or eight months the decision was made to establish my Department, followed by decisions on the economic management council, bank recapitalisation issues, the comprehensive review of expenditure and the public sector reform agenda, which we will talk about in other questions. I need help as well as the public service help I have, as does every other Cabinet Minister. We need to have people there for support and they must be people of calibre. Of course one could get people to work for less, but it is hard to ask individuals to leave jobs that are better remunerated, full-time and pensionable — in certain cases I could mention — with a lot less stress and fewer hours, to come and work for a period of time in the public service. We might get people to do it, but Ministers need to be able to select people they know they can work with, who will do the job for them. By and large, I do not begrudge reasonable remuneration packages for those people, and we should defend them. If the Deputy thinks some of them are excessive——

They are. They are utterly excessive, and the Minister knows it.

That is a matter for debate.

We must consider people with the same level of responsibility in the private sector. We have already lost one, who was much better remunerated before he was persuaded to come and work with a Cabinet Minister, to the private sector. He could not stay because he was head-hunted back. We want people of that calibre to work within our public services, to guide us back. I know this jars with people who are struggling — I appreciate that. However, I would prefer to stand up here and defend a salary scale that most people find difficult to accept than to make the wrong set of decisions that would ruin our country and cost us millions or even billions.

Were the people I mentioned party people?

Sorry, Deputy; we are going on to the next question.

I will ask that question again.

Public Service Reform

Billy Kelleher

Question:

49 Deputy Billy Kelleher asked the Minister for Public Expenditure and Reform the reason the Cabinet sub-committee on public service reform which was established in April 2011 has had only one meeting since its establishment; and if he will make a statement on the matter. [28516/11]

The Cabinet sub-committee on public service reform, which is chaired by the Taoiseach and convened by me, held its first meeting on 13 July and is scheduled to meet again on 26 October. I remind Deputies that my Department was only formally established on 6 July this year. It is envisaged that the Cabinet sub-committee will meet regularly as the reform programme is implemented over the lifetime of the Government to ensure progress is being made on the reform agenda.

Cabinet sub-committees such as this are subject to the normal confidentiality that applies to Cabinet and, as such, I cannot discuss the contents of the agenda or what is discussed at the meetings. In light of these constitutional provisions, the well-established precedent in regard to questions on Cabinet sub-committees is to answer only matters of a factual nature. I can say, however, that implementation of the public service reform programme is a priority for the Government, as the creation of my Department clearly shows. Detailed implementation plans are being developed which encompass the commitments to reform in the programme for Government and priority areas from the existing Transforming Public Services programme. In the last two months my officials have been meeting with all Departments and major offices to identify their priorities and the challenges they foresee in bringing about the reform programme. This will assist us in deciding how best to deliver reform in a co-ordinated and integrated way.

I am disappointed by the information presented by the Minister today. This Government has been in office for eight months, but the Cabinet sub-committee on public service reform has met only once since its establishment in April. The Minister indicated — possibly prompted by this question — that another meeting will take place towards the end of the month. I do not accept that the Minister could not have dealt with this issue in a more timely fashion. That his Department was not legally established until July does not mean he was not a member of the Cabinet since the establishment of the Government and responsible for public sector reform from the beginning. There seems to be some amount of heel-dragging in this matter.

I recall a reference by the Minister at a recent meeting of the Oireachtas Committee on Finance, Public Expenditure and Reform to various presentations that were made by different people and organisations on this issue. He indicated at the meeting that it might be beneficial for the committee and the Oireachtas to have access to some of the key presentations so we could see what is involved in the process. I am not talking about breaching Cabinet confidentiality. I do not know who made these presentations, but it might be helpful to the Oireachtas to have access to their content.

I have before me in large bold letters a reminder of the confidentiality of these discussions, which are protected under Cabinet privilege. Perhaps I was too expansive when I spoke to the committee about these matters. I assure the Deputy that I am committed to reform. We will undertake more reform in the lifetime of this Government than has happened in a generation. I would like the opportunity to present the elements of our considerations — because people would engage with it — to the Oireachtas committee, and I will do so as soon as the deliberative process at Cabinet is completed. I hope that will be shortly after the next Cabinet sub-committee meeting.

I look forward to the Minister coming before the committee. It comprises more than 20 members and the meeting will take place in public.

The committee is open to all Oireachtas Members.

Yes, it is an open forum. I also welcome the Minister's indication that this discussion will take place in advance of the budget. The deliberative process on this matter is not connected with the budget in December, because these issues are ongoing and not restricted to a particular budget. I look forward to the discussions.

Pension Provisions

Charlie McConalogue

Question:

50 Deputy Charlie McConalogue asked the Minister for Public Expenditure and Reform the discussions he has had with public sector unions and other organisations prior to the publication of the Public Service Pensions (Single Scheme) and Remuneration Bill 2011; and if he will make a statement on the matter. [28523/11]

Extensive consultations on the proposed single public service pension scheme, which forms the main part of the Bill to which the Deputy refers, have taken place since early 2010 between officials of my Department and public service staff representatives. In particular, my officials have met to discuss the proposed scheme with the ICTU public services committee, which includes representatives of AHCPS, ASTI, CPSU, IMO, IMPACT, INMO, INTO, POA, PSEU, SIPTU, TUI and UNITE, as well as with the Irish Hospital Consultants Association, the Irish Dental Association, the Psychiatric Nurses Association and representative organisations for personnel in the Defence Forces and An Garda Síochána. In total there have been more than 20 meetings between my officials and staff representatives in connection with the proposed single scheme.

As Minister for Public Expenditure and Reform, I meet frequently with unions representing public servants and other workers. With specific regard to the proposed single scheme in the public service, following the publication of the Bill, I met last week with a deputation from the three teacher unions to hear their concerns. Consultations on the proposed new scheme have also taken place between my Department and other Departments, including by way of an interdepartmental working group which examined the issues arising prior to the original announcement of our intention to bring forward a single scheme in budget 2010.

I thank the Minister for his reply. I welcome his indication that there has been a considerable degree of consultation with staff representatives, particularly in view of the initial reaction by the teacher unions when the proposal emerged. We all agree there must be a comprehensive single scheme for the public service, but has the Minister considered all the implications of a switch from linking pensions to inflation as opposed to salary increases? In recent years, for example, inflation has risen while salaries in the public service have decreased. In that situation, linking to inflation would mean those in receipt of pensions would be entitled to increases while those continuing in service would suffer reductions. I intend to table amendments on Committee Stage of the Bill to provide for a hybrid scheme which would balance these two positions. Over a period of 40 years the balance may swing from one side to the other. Instead of coming down on one side, there must be a middle ground in the legislation.

I look forward to a detailed discussion of these issues on Committee Stage. I hope to introduce Second Stage next week and to get through it quickly so we can have a more protracted Committee Stage debate to tease out the details. The only provision in the published Bill that would impact on already retired public servants is the possibility of changing from a linkage to the salary associated with the last post held to a linkage with the consumer price index, CPI. It is important to note that the new arrangement will act as a valve in that payment can be increased in accordance with increases in the CPI but cannot be decreased if the CPI goes down. It is an enabling provision which cannot be operated until at least the completion of the Croke Park agreement in 2014. There is merit in what the Deputy proposes and I will consider it between now and Committee Stage.

Will the Minister confirm whether this pension scheme will apply to local authorities and other public sector bodies? He mentioned county managers earlier. There are enormous inconsistencies in the Croke Park deal in terms of rationalising technology and payroll processes. I would not like to see another PPARS situation arising out of all the differences at local level. Those differences must be ironed out before we seek to rationalise.

The scheme refers to all public servants. Civil servants, non-commercial semi-State employees, members of the Garda Síochána, the Army, the Oireachtas and the Judiciary will be encompassed within the single pension scheme.

Public Service Appointments

Timmy Dooley

Question:

51 Deputy Timmy Dooley asked the Minister for Public Expenditure and Reform when the Top Level Appointments Committee process for the appointment of Secretaries General will be disbanded; and if he will make a statement on the matter. [28513/11]

I have no plans to disband the top level appointments committee, TLAC. In April of this year the Government decided the membership of TLAC would be changed to include a majority of outside members. Heretofore the majority of the membership comprised serving civil servants. I was of the view this should be changed immediately and it was included in the programme for Government. The new TLAC comprises a majority of outside members, one of whom is the chairperson. The new committee is charged with identifying and selecting candidates for the most senior positions throughout the Civil Service. The interview panels also include a majority of, and are chaired by, external members.

Will the Minister indicate the identity of the new external members of TLAC and how they came to be appointed? Does the committee have the power to set the terms and conditions of candidates' appointments? We have heard recently of extraordinary exit packages awarded to senior members of the public service. There is a suggestion that a Secretary General who recently announced he will be moving on may not have had that arrangement, although I understood it was standard procedure under the TLAC process.

On the senior Government position that is exempt from the TLAC procedure — the Secretary General to the Government and the Taoiseach — and I presume the Secretary General to the Minister for Finance and perhaps the Minister's Department, the Secretary General in the Department of Foreign Affairs and Trade and the Office of the Revenue Commissioners, will the terms of reference not consider bringing them all under the one arrangement? Like everything, we introduce a cap but the first thing we do is clear the exceptions and the exemptions. I suggest the Minister bring those exemptions under a streamlined arrangement rather than have a different approach.

I am intrigued at the Deputy's embracing of reform after spending the past 11 years in government.

I never sat in government.

I do not disagree with what the Deputy has suggested. There is merit, and I availed of it, in being able to headhunt somebody to lead my own Department that I thought would be good at the job. I should not make personal mention of that person but the Government made a wise choice. The TLAC process will have to be looked at very carefully. I would be willing to discuss it with anybody who has ideas. By way of explanation the new chair of the TLAC is Ms Maureen Lynott. The other members include Dr. Dorothy Scally, a HR consultant, Mr. Martin Murphy, managing director of Hewlett Packard Ireland, Mr. Clive Brownlee, Praesta Ireland, and Mr. Kevin Empey, head of HR at Tower Watson. Those are the five external members. The internal members are the Secretary General of the Department of Public Expenditure and Reform, the Secretary General to the Government, and two ex officio members, the Secretary General of the Department of Agriculture, Food and the Marine and the Secretary General of the Department of Education and Skills.

I thank the Minister for that information. Apropos a previous discussion, was Mr. Dermot McCarthy at any stage a member of TLAC?

The Secretary General to the Government is ex officio a member.

So he was an ex officio member of the body who made the contractual arrangement which the Minister could not challenge even with the pensions legislation.

The TLAC arrangement to which I referred was done in 1987.

I am aware of that.

It would be disingenuous to suggest——

I did not suggest.

——that Mr. Dermot McCarthy or anybody else currently had anything to do with the terms determined in 1987.

Pension Provisions

Seán Crowe

Question:

52 Deputy Seán Crowe asked the Minister for Public Expenditure and Reform his views on the Association of Secondary Teachers of Ireland, Irish National Teachers Organisation and Teachers Union of Ireland's assertion that the proposed Public Service Pensions (Single Scheme) and Remuneration Bill will be in some instances less valuable to ordinary teachers than no pension provision whatsoever. [28640/11]

Seán Crowe

Question:

64 Deputy Seán Crowe asked the Minister for Public Expenditure and Reform his views on the Association of Secondary Teachers of Ireland, Irish National Teachers Organisation and Teachers Union of Ireland's assertion that the value of many teachers’ contributions under the proposed Public Service Pensions (Single Scheme) and Remuneration Bill will exceed the value of benefits. [28639/11]

I propose to take Questions Nos. 52 and 64 together.

I do not accept that the value of benefits payable to teachers in the proposed single public service pension scheme will exceed the value of employee contributions nor do I accept that the scheme will in some instances be less valuable to ordinary teachers than no pension provision whatsoever.

It is true that the teacher unions have voiced concerns along the lines indicated in the Deputy's questions. These concerns are stated by those unions to be substantiated by a report by Trident Consulting entitled "Future Pension Provision" which was commissioned by the ASTI, the INTO and the TUI. In quantifying employee contributions to the single scheme, the Trident report appears to regard the public service pension-related deduction as a pension contribution. That is a really important point and it was one I stressed when I met with the teacher unions. However section 7(2) of the Financial Emergency Measures in the Public Interest Act 2009 makes clear that the pension-related deduction is not a pension contribution. It is reviewable annually and it is not to be considered to be a pension contribution. If it was to be rolled into a permanent pension contribution it would change the basis of pension contributions in the public service generally.

To appreciate how the single scheme will continue to provide valuable pensions to teachers, it is instructive to look at the 2009 report of the Comptroller and Auditor General on public service pensions which estimated the annual pension cost to the State for teachers, that is, primary teachers, post-primary teachers and special needs assistants, to be 22.4% of pay. The new single scheme is expected to reduce that cost by approximately one third, to around 15%. The 15% of pay is what the State contribution will be for future pensions. The employee contribution in the new scheme will be 6.5%. This is comprised of 3% on pensionable pay and 3.5% on net pensionable pay which is equivalent to 4.9% of pensionable pay according to the Comptroller and Auditor General's report, leaving approximately a 10% employer contribution.

In summary, the arguments put forward by the teachers' unions do not reflect the true position. It must be pointed out that while pension accrual will be on a career average rather than final salary basis, the new single public service pension scheme will continue to offer defined benefit pensions for teachers and other public servants. It is very hard to find a defined pension scheme anywhere in the public sector now so this is a very valuable commodity.

The Trident report said, as the Minister acknowledged, that members would pay more to the scheme in contributions than they would receive from its benefits. In fact, the report goes on to say that teachers would be better off to opt out of the pension scheme. The Minister said he has spoken with the teachers' unions. Has he identified for them the flaw in the Trident report and, if so, what was their response? So far as I know the teachers have not accepted the Minister's analysis that the pension is watertight. They appear to be of the view that Trident got it right.

Figures are figures. If one counts the so-called pension levy which all workers, some of whom who do not have a pension entitlement, are paying as a contribution to one's pension the sums are different from the actual contribution to one's pension, which will be 6.5% under the new regime. I have indicated to them from my perspective that I do not regard the so-called pension levy to be a permanent feature. It was introduced under the Financial Emergency Measures in the Public Interest Act to get us through. I do not think the vast majority of teachers would like people to present it as a permanent contribution to their pension ever more. I made that point to people. Obviously they have strong views on that matter and will articulate them publicly. I will not try to put words in their mouth, they can say what they believe. Objectively the new pension was designed to ensure that new entrants joining the public service, once this measure is enacted, would have a pension at the end. While our demographics are changing, the dependency ratio will alter between now and the middle of the century, one of our obligations is to ensure that people will have a good pension. In the case of teachers, they will be one of the groups least affected by the new scheme because they have a relatively flat trajectory on a career average basis. It is people, whom the Deputy has expressed a great interest in, who entered the public service as executive officers and end up as Secretaries General who will have the biggest negative impact on their pensions. Instead of their pension being determined by their final few years at the top of the pile, it will be determined by a career average. I think that is a much fairer system. When I said it was fair, that is what I meant.

The teachers and everyone else know full well that the pension levy is a tax and is not a contribution to pension.

But they will argue——

If Trident is wrong on that basis and if, as the Minister has said, the pension levy is not set in stone can I assume the Minister gave the teachers unions some reassurance or a timeframe as to when the pension levy might end?

It is not for me to make that determination, that is for my colleague, the Minister for Finance. However, I can give the Deputy my views on the matter. If the Deputy is asking when we will be out of the economic mess, I do not know. We have a trajectory to get a balanced budget, a deficit of 3% by 2015. The Government is determined to achieve that and we will achieve it. We have no control over external forces. We can only control what we can control. We are determined to get a balanced budget, to work towards norms in terms of the deficit, to ensure we pay our way and that we get out of the economic programme that our predecessor Government bequeathed us in order that we can make economic decisions in the best interests of the Irish people without being overseen by any external party.

Departmental Audit Unit

Patrick Deering

Question:

53 Deputy Pat Deering asked the Minister for Public Expenditure and Reform his plans to establish a new unit within his Department through legislation that will have authority to audit and to identify areas of compliance, financial and programme value for money audits with investigative powers including fraudulent activities, to oversee the work of external auditors, to examine problems and carry out special assignments identified by the Comptroller and Auditor General, and to establish a fraud and waste hotline programme in his Department. [28463/11]

Derek Keating

Question:

67 Deputy Derek Keating asked the Minister for Public Expenditure and Reform his plans to establish a new unit in his Department based on the Auditor General’s office of the city of Toronto, Canada, the functions of such office through legislation will have a mandate to access audit projects to identify areas of compliance, financial and programme value for money audits with investigative powers of a forensic nature including fraudulent activities to oversee the work of external auditors, to examine problems and carry out special assignments identified by the Comptroller and Auditor General, to establish a fraud and waste hotline programme in the Department, this auditor general will have day to day access to records of all public expenditure sectors; and if he will make a statement on the matter. [28145/11]

I propose to take Questions Nos. 53 and 67 together.

There are no plans to establish a unit of this nature within my Department. The Comptroller and Auditor General is an independent constitutional officer with a distinct role in accounting for the effective and efficient use of public funds. The role of the Comptroller and Auditor General is to control, on behalf of the State, all disbursements and to audit all accounts of moneys administered by or under the authority of the Oireachtas. The Office of the Comptroller and Auditor General under legislation has responsibility to audit and report on the accounts of public bodies; establish that transactions of public bodies are in accordance with the legal authorities governing them and that funds are applied for the purposes intended; provide assurance on the system of internal financial control put in place by each body; examine whether each body administers its resources economically and efficiently and has mechanisms in place to evaluate the effectiveness of operations; and authorise the release of funds from the Exchequer for purposes permitted by law.

The Comptroller and Auditor General also has authority under legislation to carry out special value for money examinations. Such examinations will result in either a special report which records the results of in-depth examinations of specific issues or general matters arising from audits, inspections or examinations carried out, or a value for money report which records the results of examination into the economy and efficiency with which State bodies acquire, use and dispose of resources and the systems procedures and practices employed by State bodies for evaluating the effectiveness of their operations. In implementing this mandate, account is taken of the special considerations which attach to the management of public funds including the requirements of probity and sound corporate governance. Additionally, in the context of this mandate, the programme for Government includes a provision to give the Comptroller and Auditor General new powers in relation to value for money audits of State programmes.

Departments and agencies are responsible, in the first instance, for project management and ensuring value for money. Within my Department, the central expenditure evaluation unit is a centre of expertise on appraisal and evaluation in the public service. It is involved in an assurance process for capital appraisal which includes spot checks for compliance with the capital appraisal guidelines. It leads on the value for money and policy review initiative which includes taking a co-authoring role on all value for money reviews in the four big spending Departments — Health, Social Protection, Education and Skills and Justice and Equality. It is also actively involved in value for money reviews in all other Departments.

Additional information not given on the floor of the House

With regard to the abuse of public funds, the Comptroller and Auditor General considers all circumstances involving an abuse of public funds brought to his attention by members of the public. Whether a particular matter warrants investigation or examination as part of the normal financial audit will depend on the circumstances of the case, its materiality and the evidence available to substantiate the circumstances surrounding the alleged abuse or waste of public funds.

Responsibility with regard to matters surrounding the prevention, detection and dealing with fraud lies with the management of individual Departments and agencies in the first instance and relevant organisations can be contacted by the public in this regard. The perpetration of fraud is a criminal offence and as such must be dealt with on a formal basis by the appropriate authorities.

In view of the structures already in place in relation to audit, evaluation and reporting of abuse or fraud, there are no plans to duplicate these processes within my Department.

I thank the Minister for his reply. I have been a Member for a very short time but I am sure that our country is losing millions of euro in fraud, waste and bad management. This morning I contacted the Auditor General of the Toronto city audit department and in discussing this matter, he made clear that it is very difficult to measure the deterrent factor of a hotline that exists in Toronto but that it acts as a deterrent and it has established already not only significant results in reporting fraud, waste and bad management but has engaged those in management to be more responsible and conscious that it is public money and not their own money that is at issue. His second point is that the benefits of the audit process have been proven to pay for the department seven or eight times over.

The city of Toronto has saved millions of Canadian dollars on waste by reforming the methods by which it spends money, value for money audits and dealing with fraud. That is the reason that I tabled this question. I would like to discuss some of the finer points that I have learned about this week. How long does it take in the current circumstance to process queries, investigations and spot checks?

I thank the Deputy for tabling the question and for his investigative work. Deputy Keating approached me directly about the question and I asked my Department for a briefing because I was not aware of the audit function of the city of Toronto. I have a detailed briefing on the Auditor General and the role of his office. I would be happy to discuss that. The Deputy might consider it in the context of the committee system. I am advised that the so called Toronto model would conflict with the legislative and constitutional role of our Comptroller and Auditor General.

I am interested in anything that will reduce waste, identify fraud and eliminate it and will get better value for money for the taxpayers. I thank the Deputy for his initiative.

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