On the 28th of February, 1948, that is to say ten days after I entered the Government, I sent a memo to the Government headed "Review of the Financial Operation of State-Sponsored Bodies" and in that memorandum I suggested as an ad hoc method of dealing with all these State-sponsored bodies the adoption of a simple course, to empower, by changing one of the Standing Orders of Dáil Éireann, the Comptroller and Auditor-General to inquire into the accounts of such bodies.
Consideration of that memorandum led to the consideration of the different types of companies with which we had to deal and at that point I began to realise the amazing difficulties of this subject. Some of the 25 or so companies which I had under my review at that moment, I found, were in the position that their accounts were audited by the Comptroller and Auditor-General. In some cases the accounts of the companies were audited by an auditor appointed by, or with the approval of, a member of the Government. In some cases the accounts had to be presented to the two Houses of the Oireachtas; in some cases they had to be presented to Dáil Éireann alone; in some cases the accounts of these companies established under statute were presented merely to a Minister and he had no responsibility after that to bring forward the report or accounts to either House of the Oireachtas. In addition to that, there was a difficulty regarding the types of companies. I am not pretending that this is an exhaustive review of the companies, but there are some companies in which part or all of the capital is held by, or on behalf of, the State. In that category I would put the three air companies as they were then—and they still exist, Irish Shipping Limited, and its subsidiary, the Insurance Corporation of Ireland, the Minerals Development Company, Irish Steam Limited, the company that is known as Céimicí Teóranta, which was the old Industrial Alcohol Company, and a temporary company, the Irish Industrial Life Insurance Company—that is in liquidation. There is also a group of statutory bodies which have no capital but which receive State grants. Chief among these is the Electricity Supply Board, and there are also two important companies, Bord na Móna and the Irish Tourist Board. There is a third group of companies in which no capital is held by, or on behalf of, the State but the borrowings of the companies—and they are entitled to borrow—are guaranteed by the State. You have companies in that category which mainly developed under the exigencies of war—Tea Importers, Grain Importers, Oil and Fats Limited and Fuel Importers. In addition to these, and I do not put these in any of these categories, I do not separate them, there is the Agricultural Credit Corporation, the Butter Marketing Committee, the Sugar Company of Ireland, the Dairy Disposals Company, the National Stud Company, the Pigs and Bacon Commission, the Racing Board and the Sea Fisheries Association. If one went through all that list and looked at the difference of objectives for which they were established, the different ways and systems under which they get money, and under which they are allowed to have credit, there was undoubtedly chaos with regard to these companies, and the mere simple business of asking the Comptroller and Auditor—General to investigate did not appear, on the whole, to be a good solution.
One special difficulty about the Comptroller and Auditor-General is this: that the Comptroller and Auditor-General, although he is supposed to be a very old institution, in fact, only dates less than 100 years, but he has rather special duties. He was set up to examine the appropriation of moneys, to see what moneys were appropriated for special means, by the ordinary system of supply here, and he has the duty of seeing that no more money was spent than was voted, and of seeing that what had been voted got to the area for which it was intended and, of course, in the main he had to be brought in nearly always to operate after the event. He certainly could not give any forewarning of anything The system of his investigations is well-known to senators. He is assisted by a body known as the Public Accounts Committee, but they report only after the event. They conduct their deliberations without the Press being present, and there is an old-time tradition, that every member of the Public Accounts Committee is bound to silence and secrecy until the Comptroller and Auditor-General reports; so that, in that way, it is very much a late event in the whole history of any accounts he investigates when the public hear anything about it. Under a very old statute which was limited by a statute of 1921, the Comptroller and Auditor-General's Department is also entitled under that Act, which was not carried over here, to examine any accounts that are sent before him by a Committee of the House of Commons. There was a thought at one time of adopting that legislation here, of having it either in the power of the Dáil, or the two Houses of the Oireachtas to send, apart from the ordinary Estimates, to send other accounts to the Comptroller and Auditor-General. In any event, the Office took a peculiar line on that. The Comptroller and Auditor-General did not report because he said it might come into conflict with another part of his work. He decided to let some members of his staff, generally some senior member, examine the special accounts sent before him. The history of that seemed to indicate a weakness, that the Comptroller and Auditor-General is not too sure of his powers under the legislation they have in England. He is not too sure whether he is entitled to access to the books of any of these companies, where he is asked to inquire by resolution of the House of Commons and, I think, it is quite clear, that if he is going to produce a proper account he would have to be allowed to inspect the books and go into the whole of the companies' business.
There have been suggestions made from time to time as to what is to be done. The simplest suggestion is to put in the Comptroller and Auditor-General on top of all these companies and give him power to inspect books; to a certain extent, that which characterises them in a general way, is that they are in some way financed by the State to a greater or lesser degree or where their borrowing has to be guaranteed, that there is sufficient State assistance being paid to enable the Comptroller and Auditor-General to obtain their books for investigation. The second suggestion, one made in England from time to time, envisages that the Comptroller and Auditor-General could do, apart from the assistance of the Public Accounts Committee, with a different group established from amongst the parliamentary assembly, with a body of persons not selected according to Party affiliations as, unfortunately, the Public Accounts Committee is, but selected because people would have some special interest in the subject matter of the company they were dealing with, or some product they were engaged in the manufacture of, or else you would get some people interested in business as such, people interested in local or general finance, that they would form an expert body to help the Public Accounts Committee or the Comptroller and Auditor-General by investigating the books and reporting to them. The third system is one I mentioned in the House earlier, and is one which is in operation in certain portions of the Continent. I know it to be in operation in Sweden, because at the time we established the Electricity Supply Board here the Chairman of the Swedish Waterfall Board suggested that we should adopt the Swedish practice. This practice, which I understand from certain speeches made here, might not be acceptable to some of the directors of these State-aided companies. The system there is that a group of the parliamentary assembly be selected and that a special day—I am talking of the Waterfall Board—is appointed for the examination of the board's activities during the year. The body of parliamentarians selected sit almost as a court. There is a special room devoted to the investigation and it may last for a week. Members of the public and of the Press are admitted and members of the public may send in statements of grievance to cause questions on the investigation to be conducted through the members of the Waterfall Board. It is the officials of the organisation who attend in every case and usually the chairman and, possibly, the permanent members of the board, the technicians on the different sides attend, and they have to be subjected to public examination.
The Swedish system is in order to enable the inquiry to be conducted in an intelligent way, somebody, who that is I do not know, somebody is entitled to make a preliminary investigation into the affairs of the board to brief people who are investigating parliamentarians or even members of the public who can then put their questions up through any member of the group. A fourth suggestion has been made, that instead of having that, you should have a specialised group who would not necessarily be confined to Parliament; that you might have people selected from Parliament, with such outside experts as might be required for some special job, and that they should then sit and go through that sort of public examination. Any of these suggestions may be considered, and the Government are definitely considering them at the moment. We have not got to the end of our deliberations, because the further we went the more the complexity of the matter was disclosed, and the fact that some of these companies have been allowed to grow up haphazardly has added to the difficulty of getting any proper solution of this.
There has been a good deal of comment on this from time to time because Parliaments are more and more taking control or, at least, having some sort of association with this type of body, which is on the increase with all sorts of multitudinous activities. I have three brief quotations from the issues of the Economist, one as far back as the autumn of 1947. The last I have here is the end of January, this year. A comment in the Economist dated the 27th September, 1947, runs on the lines that a new type of public accounting is required for a lot of the State companies that they have in England. They said that the Treasury fails, partly or wholly, to satisfy any of the three functions which its accounting should perform, and I think there is some value in this extract which I shall read:—
"First, members of the House of Commons need crisp non-technical summaries, bringing out the main trends, on which to base general discussions of policy."
Whatever may be said that you will get at any time a crisp non-technical summary that enables you to investigate anything, I do not think the ordinary company is any better off than some of these State-sponsored companies. It goes on—
"Secondly, the committees of the House engaged in more detailed investigation of particular fields should be able to call not merely for petty cash book accounts designed simply to ensure that there is no dishonesty——"
I think that was what Senator Stanford was suggesting——
"and that appropriations have not been exceeded, but for proper cost accounts designed to bring out the full costs and economic efficiency of particular services."
The Seanad will probably also agree with this quotation—
"And thirdly, the Treasury itself needs similar cost accounts to maintain a running audit of the efficiency of Departments."
That is from a journal of considerable repute in England, which devoted and fostered a good deal of thought on the matter at the time. The quotation comes from its issue of the 27th September, 1947. I come to read a quotation from the issue of January 28th, 1950. The journal then admitted that there had not been much progress since its comment of February 14th, 1948, in which it said there was no clear line of division between those questions which Ministers should and should not answer. It continued—
"The issue is a difficult one... on the one hand there are innumerable detailed matters which it would be entirely wrong for the Minister to answer or interfere with; on the other there are major questions of principle and policy for which Ministers must be directly answerable. The trouble is the breadth of the no man's land between."
That is still the trouble, and I think that we would get very definite agreement here that if these concerns are to be allowed to run with any pretence of efficiency you cannot have day-to-day interference by parliamentary questions with day-to-day actions, but, at the same time, it is clear that there are matters—big matters of policy, on which the Minister ought to be questioned in the House, because he ought to have something to do with what this journal describes as "the breadth of the no man's land between". At a later point, this article comes to the suggestion that if investigations of these matters are to get anywhere:—
"members of the boards should appear in person and not be represented by officials of their parent ministry."
I suggest that is a point on which we might also have agreement. On 28th January, 1950, the same journal, giving what amounts to a retrospect of the parliamentary procedure over five years, says:—
"From this point of view, it is particularly serious that no satisfactory method has been found by which Parliament can discuss the affairs of the new public corporations and nationalised industries. No uniform procedure has been followed in the answering of questions on these organisations; the board rule has emerged that a Minister should not answer questions on matters of the day-to-day administration but only on matters of major policy; but this is a line that has proved difficult to draw in practice. There are annual debates on the reports of accounts of boards and corporations, but these are issued only after a considerable lapse of time and there is no method by which Parliament can ascertain whether current policy is going astray. Some kind of grand committee for the nationalised industries could be evolved, but this method would have its own danger. The debates on the affairs of the Overseas Food Corporation have revealed the extent to which it is possible to thwart parliamentary curiosity. There is a risk that, unless some satisfactory basis for discussion can be worked out, the House will acquire a professional suspicion of the public corporations which will inevitably be reflected in the public attitude."
I stress that because that is the situation we have here. There is, undoubtedly, a suspicion of these boards as a whole, and that is not confined to members of the Dáil and Seanad, but the public generally have that view.