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

Question again proposed: "That the Bill be now read a Second Time."

I fully support the ideas put forward by the Minister concerning the Committee of Public Accounts. It is essential to have continued co-operation, although one will often have conflict. There is a healthy respect for the accounting officers and others giving evidence to the Committee of Public Accounts. There were heated exchanges at times; each side gave as good as it got.

In regard to section 12 of the Bill, I have reservations about the charges of fees by the Comptroller and Auditor General and I would not like to see his office become self-financing. That was never intended and I accept that the Minister does not have this in mind. This office accounts for money spent on behalf of the Oireachtas and much of its work is tedious, slow and deliberate, which takes time and effort.

I now come to the real point of my speech. There are two Schedules to the Bill. I am happy with the First Schedule, but I have problems with the exclusion from the Bill of the different bodies outlined in the Second Schedule. The idea of this Bill was that Government spending would be analysed through the Comptroller and Auditor General, that local authority spending would be analysed through these authorities and that commercial State-sponsored bodies would be self-examining. Senator — then Deputy — Roche was the chairman of that body. I do not know his present views, perhaps he disagrees with me.

CERT is to be examined; the accounts of the Church of Ireland College in Rathmines are to be audited, Comhairle na Ospidéal and the Defence Forces canteen board are to be examined yet the Comptroller and Auditor General cannot inquire into what happened in Aer Lingus holiday holdings and it would be a good idea if he did. If the Comptroller and Auditor General had responsibility for Greencore, the scandal we witnessed there would not have occurred. It was an appalling rip-off of the Irish taxpayer and had the Comptroller and Auditor General power to examine what was taking place there the wheeling and dealing might have been prevented. However it happened and Senators have an opportunity this afternoon to decide to make provision in future for examination of semi-State bodies such as Greencore. It would be a marvellous achievement if the Minister went back to Cabinet and said there was a very strong demand from Seanad Éireann for certain semi-State bodies to be examined. There would be much support for such a move.

Bord Telecom is specifically excluded from the application of section 8 and 9. Why? We have the power if we wish to use it to speak about different bodies that I have mentioned, such as the Legal Aid Board. Many of these bodies can be dealt with under the First Schedule. However, in the past if I tried to raise a parliamentary question about bodies that are mentioned in the Second Schedule it would have been ruled out of order by the Ceann Comhairle because of the way the legislation is framed. It is not within the remit of our debates to examine the workings of these particular bodies and discussions about them are rare. The exception is when a semi-State body finds itself in trouble due to shortage of money or some other serious problem.

The Comptroller and Auditor General should be able to examine the operation of semi-State bodies. If the Comptroller and Auditor General had had power to investigate the purchase of the Telecom headquarters in Ballsbridge perhaps that scandal could have been avoided because he would have had the power to demand documents for examination. We are copperfastening an unsatisfactory situation by failing to make provision for the examination of semi-State bodies by the Comptroller and Auditor General. We may debate these matters at some stage but it is not possible for the Comptroller and Auditor General to investigate them and that is why the Bill is deficient. It is no use going half way. We should go all of the way and I ask the Minister to make that possible.

I ask the Minister to clarify who has responsibility for the spending of lottery money. Apparently it comes under the Department of the Environment and several other Departments but who has the responsibility for checking the actual spending of it? Is it the Comptroller and Auditor General? I am not doubting the people who have responsibility for it, nor am I casting any slur. As far as I am aware lottery money is being properly spent and the programme Winning Streak features various projects to which money has been allocated. People in the community are wondering how it is being spent and therefore more information should be made available.

The lottery was established under an Act of the Oireachtas and we are dealing with the spending of public money here today with reference to audit and inspection of accounts. The Comptroller and Auditor General can visit vocational schools in Roscommon and Tullamore to examine their accounts. There should be a similar facility to inspect the spending of lottery money.

Country enterprise partnership boards are being established and we are aware of problems with the Leader programme in north Tipperary. If the local authorities had been responsible for Leader spending perhaps problems would not have arisen. Who will be responsible for auditing the county enterprise partnership boards' accounts? I would be grateful if the Minister could supply that information when she is replying.

I support the Bill but I have some reservations. We have a golden opportunity here to make sure that our commercial States-sponsored bodies can be examined. I am not criticising State-sponsored bodies which have done magnificant work but occasionally money have been wasted. For example, a briquette factory was to be built at Ballyforan following election promises. While Bord na Móna employees worked hard on bogs, in all weathers and some got into bad health, approximately £5 million was wasted in architects' fees for drawing up plans for a briquette factory which was never built. It proves that money can be wasted notwithstanding the problems of Bord na Móna.

An Leas-Chathaoirleach

Even the foundations were flawed.

One must be careful to ensure that money is not wasted. If the Comptroller and Auditor General had greater powers wastage could be prevented.

The present Government has appointed many consultants and I believe that is a policy matter. However, before a consultant is appointed he or she should be given a specific brief and should then be paid a specific fee for a specific job. We do not want consultants for the sake of it. Many of the people who founded this State and who set up its administration had no more than primary school education. They built a great State by the use of commonsense, the greatest asset of all. Many consultants lack basic common sense because they are spending other people's money. A close watch should be kept on how money is spent. I ask the Minister to be careful how money is spent. I support the Bill, although I have reservations.

I welcome this Bill. As we all know, the Houses of the Oireachtas and, in particular the Dáil, have clear responsibilities under the Constitution which both Houses jointly exercise on behalf of the people of Ireland. Constitutional responsibilities include the making and breaking of Government, making Government behave, making law, making treaties for war and peace and, most important, for the public purse. It would not be an overstatement to say that both Houses fulfil their constitutional responsibilities precariously. It would also be no exaggeration to say that the responsibility with regard to the control of the public purse is ignored.

This Bill is one of the most important pieces of legislation we will deal with this term. One of the most important constitutional functions with which this Bill deals is the way this nation, the Houses of the Oireachtas and, more particularly, the Dáil which has prime responsibility for finance, controls the public purse. It is extraordinary that as the original legislation was passed before the foundation of the State, it has taken so long to do what this Bill has done. Therefore, the Bill is welcome.

Volumes could be written about how poorly the nation's financial management and overseeing functions are performed. The brucellosis and the TB eradication schemes are only the tip of the iceberg. If one reads the reports of the Comptroller and Auditor General over the years, one will find many more tips of icebergs. These are only the pinnacle of huge ice mountains which float by unnoticed under the morass of public expenditure.

The Minister said this is an important Bill because it expands the powers of an important office. We endorse that view. It is a valuable move forward and I welcome and support it. However, I believe there are other areas which require attention.

The measures in this Bill will need to be bolstered in the public accounting system and in the way this House and the Dáil operate. Reforms are needed, particularly in the way public expenditure is accounted for and in the way the Dáil and the Seanad oversee that expenditure. It is worth reminding ourselves of the present arrangements. At present, the Appropriation Accounts are returned to the Comptroller and Auditor General in the spring of every year. They account for billions of pounds of public expenditure, which is dealt with by thousands of bodies and by hundreds of thousands of public servants. It is an extraordinary task for the Comptroller and Auditor General's Office to undertake each spring. The Comptroller and Auditor General and his staff examine these accounts and report their findings in October, when a parliamentary organ — the Committee of Public Accounts — meets.

I endorse the comments made by Senator Enright. The Committee of Public Accounts has come a long way in recent years. I do not think there has been enough public recognition of how it has progressed under the chairmanship of Deputy G. Mitchell in recent times and a number of his immediate predecessors. There were brave and courageous attempts to extend the role of the Comptroller and Auditor General which the media did not always acknowledge, recognise or even support. I will refer to two of those occasions in a moment.

The Committee of Public Accounts consists of 12 Members of the Dáil who spend the months of November and December overseeing or examining the accounts, with the assistance of the Comptroller and Auditor General and with the benefit of the Comptroller and Auditor General's examination. The audit of the public accounts is only scratching the surface, in spite of the enthusiasm and energy which is put into that task both by the Comptroller and Auditor General and by the Committee of Public Accounts. It does not even scratch the veneer because public expenditure has become so complex, so universal, so extraordinarily multi-faceted that it is a virtually insuperable challenge for any individual group of public servants or small individual committee of the Oireachtas to oversee what has been done. Extraordinarily challenges, hurdles and obstacles have been put in the way of the Committee of Public Accounts and the Comptroller and Auditor General, to hinder them in the performance of their tasks.

Historically, the Comptroller and Auditor General, with the assistance of the Accounting Officer, sought to ensure that there had been numerical accuracy in the accounts and that the money had been spent for the purposes for which it had been allocated by the Dáil. There were no examples of deliberate and specific fraud or of money having been removed. Also the Comptroller and Auditor General ensured that money was spent for the appropriate accounting period. Efficiency and effectiveness were only introduced in recent times and only because Comptrollers and Auditors Gerneral took it upon themselves to expand their role. They did so without any legislative support from either House. This is to the shame of both Houses, in particular the Dáil.

The Comptroller and Auditor General's role has been expanded in recent years because public servants have been willing to expand their role and they have done this without any specific guidance. This Bill is welcome because it seeks to provide guidance and a little legislative clarity where previously there was none. For example, for the first time the Bill gives statutory effect in the audit to economy, efficiency and effectiveness. It is extraordinary that a State which receives and spends a large proportion of every individual's earnings has not, until recently, been overly concerned with economy, efficiency or effectiveness. It is even more extraordinary that it was not until 1993, almost 75 years since the foundation of the State, that we decided to deal with economy, efficiency and effectiveness on a statutory basis.

However, to fully implement the Bill's proposals it will be necessary to do more than give the Comptroller and Auditor General a statutory role with regard to efficiency, economy and effectiveness. That statutory role must be supported by a radical and dramatic change in our public accounting system.

The Minister knows—she and I laboured in the musty confines of the Department of Finance — that the public accounting system is a farce. No chip shop in the land is as badly run from an accountancy point of view as Ireland Incorporated. A colleague in UCD often refers to the present accounting system as shoebox accounting. It is based on a historical year and has a one year perspective. In recent years the Department of Finance introduced multi-annual programming. However, the statutory basis of our accounting system is historical, non-accrual accounting which went out with the ark. I doubt if Noah and his team would have had a more inept management system in operation at accountancy level than Ireland Incorporated because, if they had, they would never have found their way to Mount Aravat.

It is bizarre that we have no method of totting-up programmes and that we are still operating a nineteenth century Victorian accountancy model. It will be necessary, if this Bill is to be effective and the Comptroller and Auditor General's Office is to have the impact we wish, to look at the Victorian accounting system. Victorian notions and the concept of an annual budget will have to be dispelled. It is farcical for the Minister for Finance to tell us, over a period of three to four hours, about financial auguries for the year ahead. All public accounting programmes are multi-annual and they work on an accrual basis. The nonsensical British Victorian model of public accountancy — which the British have done away with — should not be in operation. We need to support and augment the worthwhile provisions contained in this Bill by introducing an accounting system which approximates to the cost accounting systems operating in business.

Given recent publicity Irish business is hardly a model of financial propriety or accountability. However, modern business accounting systems have a lot to offer the public service and public administration. We need to augment the provisions of the Bill in that area.

I want to refer to a number of specific elements contained in the Bill. The proposition is that non-commercial State-sponsored bodies are to be brought within the remit of the Comptroller and Auditor General but commercial State-sponsored bodies will remain outside his remit. This interests me both academically and personally because of my role as a public servant for many years. If we think about it and put other changes into operation the balance is probably right. I welcome the idea that non-commercial State-sponsored bodies are being brought within the remit of the Comptroller and Auditor General. It is astonishing what non-commercial State-sponsored bodies have got away with over the last 50 to 70 years. It is bizarre. They have operated without any of the control mechanisms which apply to the Civil Service and local government because they were deliberately set up to avoid such control mechanisms.

Non-commercial State-sponsored bodies were not overseen by the democratically elected local representatives. In effect, they were cut free as budget based organisations and were actively encouraged to spend their budget. No effective or efficient criteria were established and it was of no benefit to management in a non-commercial State-sponsored body to ensure economy. It is important that the scandal of non-accountability existing in non-commercial State-sponsored bodies is brought to an end. This Bill does that and I welcome this move forward. It is bizarre that the Houses of the Oireachtas have never bothered to address the issue of non-accountability of non-commercial State-sponsored bodies. Fifteen years ago when the Committee of State-sponsored Bodies was set-up it focused entirely on commercial State-sponsored bodies which had the benefit of a market mechanism to show if they were efficient or inefficient but the non-commercial State-sponsored bodies were excluded. This exclusion has continued despite the fact that I and my predecessors, as Chairman of the Oireachtas Joint Committee on Commercial State-sponsored Bodies, asked that this issue be reviewed.

The Bill introduces inspection and I endorse this important move. We need to open public institutions, not just from the point of view of democratic control but from the point of view of overall management control. We must convince the people that public institutions are being run economically, efficiently, effectively and for the benefit of the people who pay for them rather than for the benefit of a minority who work in them. In an article I wrote in 1981 about the idea of an Ombudsman, I mentioned the need for inspection. The introduction of statutory inspection is welcome and is a dramatic move forward.

I suggest to the Minister that we should look further into the area of inspection. Inspection needs to be expanded to local government. Power of inspection should flow not only to the Comptroller and Auditor General but to the Committee of Public Accounts. I realise that this will be dealt with in the other House by way of motion when the terms of reference of the Committee of Public Accounts are being reviewed. However, it is appropriate to comment on this issue now.

Some years ago when the Committee of Public Accounts travelled to Merrion Road to inspect premises which had been rented for many years by the then Department of Posts and Telegraphs, they were met on the doorstep by the chief executive officer of Telecom Éireann, who had been occupying the premises, and were refused admission. I recall wearing an academic hat on a RTE programme that day and saying that in no democracy would a committee of the Houses of Parliament be turned away. The extraordinary thing was that every commentator in the land thought that it was fun to turn away a parliamentary committee and that these TDs were getting their come-uppance. Nobody seemed to realise that the Members were looking after our interests.

The concept of statutory inspection is a new and welcome move forward. Those involved in its implementation are to be complimented. I suggest that if the inspection is to be provided for the Comptroller and Auditor General on a statutory basis, we should ensure that committees of the Houses of the Oireachtas have powers of inspection.

There has been a dramatic change in the way the Committee of Public Accounts has fulfilled its responsibilities in recent years. This is largely due to the enthusiasm and energy of Deputy G. Mitchell, and a number of his immediate predecessors as chairman. They pushed out the boat and have expanded the role of the committee. Given the willingness of its Members to work long hours, it is extraordinary that the committee has not been adequately acknowledged.

I look forward to the revised terms of reference because under existing arrangements we accept the need for change, for example, the need to have the right to engage consultants, etc. It was amazing to hear during the last Dáil that the Committee of Public Accounts could not engage consultants. They need to have the right, as do all committees, to compel witness to attend meetings and give evidence. We have a constitutional problem in relation to subpoening witnesses to come before committees. This is an important point because the work of the Comptroller and Auditor General can only be taken one step further by the Committee of Public Accounts. If the hands of the Committee of Public Accounts are tied and if it, therefore, lacks power, a lot of the good work which could flow from this Bill will not be possible.

The committee must have equal powers to the High Court in relation to subpoening witnesses and it must receive an adequate budget. It is a farce that for a couple of days in Dublin Castle, the powdered gentry of the legal profession receive more funding than the operation of all the Oireachtas Committees for last year and the year before. That is not an exaggeration. We struggled last year with a budget of £40,000 in the Oireachtas Joint Committee on State-sponsored Bodies. As the Minister knows, it is difficult to buy a lot of consultancy time or accounting expertise for £40,000. Nevertheless, that particular committee, like the Committee of Public Accounts, was charged with the task of overseeing thousands of millions of pounds worth of assets and expenditure. Our powers were very restricted. We had no power to subpoena witnesses, no power to compel witnesses and we could list from here to eternity the number of occasions where witnesses refused to co-operate. Furthermore, we had no budget to perform our task.

There needs to be a change in attitude to both Houses to committees. It has become fashionable to talk of parliamentary reform. I suggest that parliamentary reform is a leaky vessel as it has recently been restructured and relaunched. It is not going to get very far because the parliamentary environment in which we operate is unique. The PR single transferable seat system means that it is not profitable politically for Members of both Houses, either those who aspire to break out of this Chamber and move to the other House or those in the other House who wish to stay there, to invest their time in committee work. I do not mean it is not financially profitable, because some inducements are currently being introduced in that respect. However, it is not politically profitable.

I admire members of the Committee of Public Accounts who have no particular career interest, academic or professional, in it, and yet give immense amounts of their time. They are not rewarded with praise or recognition. The reality is the committee system will only work if there is political reward for attendance.

Another aspect about the committee system urgently requires attention. This is the scandal whereby neither this House nor the other House pays any attention to the reports produced by the committees. Currently, for example, when the Committee of Public Accounts produces a report and makes comments on it, the comments are sent to the Minister for Finance. The Minister, by way of ministerial note, replies to the incoming committee the following year indicating the response of his Department or other Departments. There is no test in the Dáil as to whether the proposals contained in the report of the Committee of Public Accounts are implemented. In fact the Dáil very seldom discusses the reports of that committee.

If we are to introduce a committee system, and I am a supporter of such a system, it will have to be a part of continuing reforms that will start and end with electoral reform. A reform that will certainly have to be introduced is some form of compulsion to discuss the reports of the committees. I welcome the fact that there will be more time on Fridays for that activity.

Regarding the exclusion of local authorities, I can understand the division between the local authority accounts and the report of the Comptroller and Auditor General. However, I put it to the Minister that the black hole of Calcutta was a more enlightening place than the accounts of our local authorities. I have been a member of a local authority since the mid-1990s and I have never ceased to be amazed at the ingenuity with which these accounts are produced. The Minister has also been a member of a local authority and like me she knows that among the more impenetrable things produced in this or any other State, almost Kafkaesque in dimension, are the accounts and the estimates of the local authorities.

It is impossible to ascertain from local officials the cost of a local government project. If they do not want you to have the figure, you will not have the figure. Motions come before my local authority asking for the erection of traffic lights and we are told the cost of this will be £20,000. However, when the manager wants to do something of equal complexity the cost turns out to be £1,000. How have the figures shifted around thus? I do not know.

This point illustrates the need for inspection, which is one of the great tools that has been introduced in this Bill. There should be a system of inspection introduced in the local authorities system. I will break a confidence. I have spoken to the last three Ministers for the Environment and I have asked them to establish a team of auditors who can be on call to inspect the programme of any local authority on the grounds of efficiency, economy and effectiveness. Such a team would pay for itself tenfold in the first year.

There have been many occasions when, as a local authority member, and I have lectured for 15 years in local government finance, I have tried unsuccessfully to establish exactly the cost effectiveness of local authority programmes. Whether the inspection would be part of concomitant change in the local government audit, or whether it would happen under the aegis of the Comptroller and Auditor General would not matter so long as an inspection was introduced. Not only should this inspection force be established but it should be allowed to be called into place by motion of local authority members. That would give back some concept of local accountability.

Section 19 of the Bill provides for the first time a statutory basis for the performance by accounting officers of their duties when they are presenting evidence of the Committee of Public Accounts. There has been no statutory arrangement governing this, and I welcome this provision specifically because of my own experience over the last couple of years in the Oireachtas Joint Committee on State-Sponsored Bodies. I want to consider this in conjunction with statements made by Senator Enright regarding the exclusion of State-Sponsored bodies by giving the House an example of how deficient the present system is.

At present there are no guidelines on witnesses appearing before the joint committees of both Houses and the Committee of Public Accounts. There have been many extraordinary examples of committees getting the two fingers from public servants. Senator Enright refers specifically to the Greencore issue. I believe that if the Oireachtas Joint Committee on State-Sponsored Bodies had got an ounce of co-operation, as opposed to a huge amount of interference, from the then chief executive of the Sugar Company in 1989, when we were conducting an examination of the affairs of that company, then what became known as the Greencore scandal would have been public knowledge much earlier. I have believed since that time that there was a deliberate effort, which was successful, to sabotage the efforts of the then Chairman of the Oireachtas Joint Committee on State-Sponsored Bodies to ensure that the committee was deflected from the examination of the affairs of the Sugar Company. I wrote letters as Chairman of the Oireachtas Joint Committee on Commercial State-Sponsored Bodies to each member of the board of the Sugar Company. Mr. Comerford destroyed all those letters and the Oireachtas Joint Committee on Commercial State-Sponsored Bodies had no power to deal with him.

It is a matter of public record, in the Houses of the Oireachtas that when we finally browbeat the Sugar Company into representing itself before the committee we were met by Mr. Tully, Mr. Comerford and Mr. Cahill and, to say the least, they would not have won any medals for co-operation.

Furthermore, charges which were made against my predecessor, Deputy Lawlor, led to his resigning his chairmanship of that committee and the information on which those charges were proved to be erroneously based emanated from the Sugar Company. This indicates something seriously wrong in the way public servants perform before Oireachtas committees. All of these issues were the subject of a special report by the Oireachtas Joint Committee on Commercial State-Sponsored Bodies. It is extraordinary that that report was never examined in either House. Some years later the Greencore issue burst upon the scene. This might be seen as a good argument for bringing in State-sponsored bodies under the scrutiny of the Comptroller and Auditor General.

I am not impressed by the way commercial auditors have operated in the case of commercial State-sponsored bodies. I have seen over the years some quite extraordinary examples of failures by these commercial auditors. They are not answerable to anybody and may be appointed on the basis that they play golf with the chairman of the board of the State-sponsored body or in some other way that is hidden from us ordinary mortals. We do not know how or why they are appointed and there are myriad examples of their failure. This whole process needs to be tightened up. I understand why the Bill has not taken the step of bringing the commercial State-sponsored bodies under the control of the Comptroller and Auditor General. I would suggest that we strictly monitor the way the commercial auditors operate. They are not giving value for taxpayers' money.

Senator Enright spoke about the Aer Lingus Holidays issue. For a year and a half the Oireachtas Joint Committee on Commercial State-Sponsored Bodies wished to look into that matter but was completely impotent. It had no power to pursue the matter once it could be declared sub judice. Both Houses need to look closely at the way they operate the sub judice ruling and how that contains Members.

The issue of the commercial State-sponsored bodies, their accountability and the way we examine their performance requires urgent review. If the House is serious about parliamentary reform it might consider the report of the sixth Oireachtas Joint Committee on Commercial State-Sponsored Bodies examining how the role of that committee could be expanded to allow it to perform more efficiently.

There has been a whole series of scandals in the State-sponsored bodies over the years, for example, the Irish Shipping scandal—there is no other way to describe it. That company had operated profitably virtually from the end of the war. The employees of that company worked hard and performed well. The company went down not due to any failure on behalf of the ordinary workers, but as a result of a catastrophic failure of management. The tragedy in that case— I might be in agreement with Senator Enright—was that nobody knew until it was too late that Irish Shipping was sunk. Had there been a proper, efficient management service and a proper system of control and inspection in operation, that need not have happened. Yet it did happen and there were commercial auditors in that company who knew what was happening. This débâcle did not happen overnight but over a period of 12 to 18 months. Something could and should have been done. Had there been an efficient management system—I mean a supervision system—it would not have happened. The question of how commercial auditors perform in the State-sponsored bodies needs to be looked at. Greencore and Telecom Éireann, among others, are unedifying examples of failure.

I had better end on a positive note or everyone will look carefully at their PAYE deductions and think that more of their money is going down the drain. I accept it is not possible to resolve all problems at once. Government has become so complex and multifaceted and it cannot solve all our problems at once. This Bill is an honest effort to solve some serious problems and I commend it. I look forward to Committee Stage debate.

I wish the Minister of State well. She is an old colleague from the Department of Finance. The Minister of State understands from the inside—we are both poachers turned gamekeepers—the inefficiencies of the system. The Minister of State, probably worked in public expenditure division for longer than I did, so she has even more first hand experience of the inefficiencies of the system of managing our public expenditure programmes.

The Department of Finance has made good efforts—I have to say this because one never knows when one might have to fall back on them—over the past few years to move forward and modernise, for example, the programme budgets. This change is a good example but more needs to be done. Work needs to be done in the Houses of the Oireachtas to complement the provisions of this Bill. I wish the Minister and the Bill well.

The contributions from Senators were extremely constructive. There is a general consensus that getting better value for money is an aim shared by all sides in this House and in the other House. We all want to ensure that we get the best system so that the taxpayer, who puts up the money, is given value.

The day to day work of the Comptroller and Auditor General is not high profile but he and his staff do a good job. As Senator Roche and Senator Enright said, the work of the Committee of Public Accounts is often unsung but it is valuable. This Bill reflects the kind of donkey work done by the Committee of Public Accounts and reflects their thinking. I would pay particular tribute to Deputy Gay Mitchell. He pushed out the boat, so to speak, in terms of the work of that committee.

The main point made in the debate has been the auditing of commercial State-sponsored bodies. We all share a concern about issues where public money appears to have gone astray and they have been listed by the Members concerned. Senator Roche spoke about the difficulty of the Oireachtas Joint Committee on Commercial State-Sponsored Bodies in getting people to appear before it and getting answers to questions. This will be addressed. The Government has given a commitment to legislate on privilege and compelling witnesses to appear in relation to all Oireachtas committees. That is at an advanced stage and is going before the Government in the next couple of weeks. That will improve the situation. The Director of Public Prosecutions has more than a passing interest in Aer Lingus Holidays. However, there is a limit to the inspection an Oireachtas committee can carry out in this case.

The general approach in the Bill is that it is the function of the Comptroller and Auditor General to report to the Dáil on non-commercial State bodies. In the case of commercial State bodies, as with commercial bodies in the private sector, it is the duty of auditors to examine and report to the board of the company on efficiency, effectiveness, economy and whether any money has gone astray. If the auditors fail in their duty they can be sued by the company concerned.

The Department and the Minister responsible for appointing the board of a company should ensure it carries out its duties in overseeing the management of the company and ensure that there are procedures in place to review whether this has been done. That is the most appropriate way of dealing with this issue. It is important that we do not end up having two Oireachtas Committees falling over themselves dealing with the same area. The Parliamentary scrutiny undertaken by the Oireachtas Joint Committee on Commercial State-sponsored Bodies has been valuable, it is the appropriate committee to deal with these bodies. The accounts of non-commercial State bodies are examined by the Committee of Public Accounts.

Senator Enright referred to cost overruns on projects. This is an issue to which the Comptroller and Auditor General has referred in the past. He will have legal power under the Bill to examine such overruns. He has very specific powers. Senator Enright referred to the reports of regional development organisations. I am aware of the work done by the Eastern Regional Development Organisation when I was a member of Dublin County Council and I take on board the points made by the Senator.

Section 12, which enables the Comptroller and Auditor General to charge fees, was referred to by Senator Enright. At present he charges fees for some audits, although he does not have a specific statutory authority to do this. The purpose of section 12 is to grant him such authority. It is not envisaged that Government Departments will be charged audit fees. A private sector company provides for its audit fees in its financial accounts. Section 12 enables the Comptroller and Auditor General to charge fees in similar circumstances.

Senator Enright asked who has responsibility for spending national lottery moneys. These moneys are included in the Book of Estimates and are assigned to specific Departments. The Comptroller and Auditor General can audit them when he is examining the accounts of the Department concerned; for example, amenity grants are administered by the Department of the Environment and the Accounting Officer for these moneys is the secretary of that Department. The youth and sport grants funded by the national lottery are administered by the Department of Education. The secretary of that Department is the Accounting Officer for these moneys. The power in the Bill to examine the expenditure of a body which receives more than 50 per cent of its funding from State sources gives a further power of inspection to the Comptroller and Auditor General.

Senator Enright raised a point in relation to the Leader programme. This has been investigated by the Department of Agriculture. The Leader funds undergo a double audit in that they are audited both by the European Court of Auditors and the Comptroller and Auditor General.

The Government has not made a detailed decision in relation to the audit of the county enterprise partnership boards. If they are development promotion bodies it is envisaged that they will be audited by the Comptroller and Auditor General; if they remain within the Civil Service they will be audited by the normal procedures. It is open to the Minister under the Bill simply to add them to the Schedule. No decision has yet been made because the proposals are being finalised at present. We can discuss this on Committee and Report Stages if a clear decision has been made by then.

Senator Roche referred to the need for radical and dramatic changes in the public accounting systems of both Central Government and local authorities. I fully agree with him. There are areas where it seems expenditure of £5 is assigned its own subhead, whereas expenditure involving sums like £300 million is covered by one block subhead. This area certainly needs reform. A joint working group representing the Department of Finance and the Comptroller and Auditor General is examining accounting procedures with a view to improving the relevance and extent of information given in the Government accounts. I agree that the format of the Estimates needs to be improved so that they provide clear and relevant information.

The format of local government accounts is laid down by the Department of the Environment. Local authorities do not have any discretion except to prepare their accounts in this most impenetrable way. One of my responsibilities is to liaise with the Minister for the Environment in relation to local government reform. Change in accounting procedures is an area we can examine. I would be glad to bring my experience to bear in trying to deal with that problem.

The exclusion of local authority accounts from the scope of the Bill was raised by Senator Roche. The local Government auditors are also moving towards value for money auditing and improved reporting standards. These developments are taking place in parallel with the reforms provided for in the Bill. The reports of the local government auditors are available to the Comptroller and Auditor General who can draw them to the attention of the Committee of Public Accounts. This enables the Committee to examine at second hand the accounts of local authorities. It is envisaged that in future there will be close liaison between the local government audit service and the Comptroller and Auditor General.

Senator Roche referred to the role and performance of the Oireachtas Joint Committee on Commercial State-Sponsored Bodies and its failure to deal effectively with certain issues. I hope the reform of the committee system, including compulsory attendance of witnesses, will enable committees to function more effectively and prevent them from being thwarted in their work. All Members of the House are concerned about money going astray or the taxpayer not receiving value for money. We need procedures which ensure proper openness and accountability and that people who represent the public serve the public interest rather than their own.

The work of the Comptroller and Auditor General has been characterised by independence and a commitment to public service. The constitutional independence of this office has put him in a unique position to give an objective appraisal of integrity in public expenditure. We have been served well by those who have held this office.

The extension in this Bill of the role of the Comptroller and Auditor General to cover questions of economy, efficiency and effectiveness of management will play an important role in building on the qualities of probity and integrity we expect from the public service. This will be welcomed not least by public servants themselves who realise that under the Bill there will be ample opportunity for recognition and acknowledgement of good public administration. When the Bill was discussed in the Dáil I moved an amendment giving the Comptroller and Auditor General the power to examine and recommend what he considers to be good standards of practice and draw comparisons. It is through such work that we gradually improve efficiency and effectiveness. I support what Senator Roche said in relation to publicity because it is through publicising the work of the Comptroller and Auditor General and the Committee of Public Accounts and highlighting areas where public money has gone astray that we increase vigilance everywhere, not least in the public sector. The Government, in bringing forward this Bill, are demonstrating a commitment to public accountability and to exposing the machinery of Government to more penetrative scrutiny.

We cannot afford waste and inefficiency because of the demands on the public purse. We cannot afford to have poor quality administration. The aim should be to improve the standard of accountability, efficiency and value for money throughout the public service. However, in every large organisation, there will inevitably be areas where there is scope for significant improvement in the application of modern methods. Changing demands and technology mean that no organisation can remain static. While the legislation, as Senator Enright said, has served us well in the past and, indeed, stood the test of time reasonably well, it is time that we brought the Comptroller and Auditor General's powers a stage further. These are the new powers involved in this Bill.

Underlying the change which organisations must make, there is one area which is extremely important and that is the application of good management. Management should be aware of the implications of what is happening in the wider world. Organisations in the public sector need to be able, as an ongoing process, to appraise the effectiveness of their operations. This appraisal should be such as to allow them to anticipate problems and opportunities so they may take timely action.

Senator Roche spoke about what happened in Irish Shipping. This Bill will subject systems and their effectiveness to the examination of the Comptroller and Auditor General. He would look at the systems, for example, in the Department of the Marine for monitoring the board so that we would not have a recurrence of that kind of situation. It goes beyond simply auditing whether the money was spent to buy ships that proved to be poor value for money. He would examine the effectiveness of the procedures used to decide if the purchase was sensible, whether the Department of the Marine was in touch with the board and if the board was in touch with commercial reality. That is the kind of role envisaged for examining effectiveness. There would be a follow through on issues like that. It does not cover semi-State bodies. The concept of effectiveness is to see what systems are in place in Departments to enable them to monitor the bodies and their aegis.

In examining management effectiveness, the Comptroller and Auditor General will have a new and important role in ensuring that public service organisations have proper management systems in place. It is not necessary or appropriate for the Comptroller and Auditor General to have a direct involvement in the appraisal of effectiveness itself. The Bill's procedure in this area follows the Canadian formula. Good administration is the responsibility of the management of the bodies. The role of the Comptroller and Auditor General is to examine and report on how that responsibility is carried out. The new role of the Comptroller and Auditor General in this area will, I am sure, be effective in heightening awareness among public service managers of the need to be responsive to changing demands.

Following the Dáil debate, where many of the points made today were also made, I spoke to people involved in auditing to get a viewpoint as to where the appropriate balance would be between a public audit by the Comptroller and Auditor General and the auditors employed by the semi-State bodies themselves. The reply I received was that if an auditor is doing his job correctly, that the auditor's duty might lead him to go even further than the Comptroller and Auditor General in spotting problems within a semi-State organisation. As bodies with a commercial mandate, they should be following normal commercial practice and if their auditors are not doing their job, they can be sacked or sued. Auditing practice should also be reviewed to see how well it is working. The board should ensure that they are getting the best audit service. There is no shortage of good commercial audit practice if it is required. I listened to the points made in the Dáil debate and I followed them up and took advice. That is the advice I received and I am happy with the balance in the Bill as to who will audit in the various areas.

I look forward to Committee Stage. We had constructive Committee and Report Stages in the Dáil and I was in a position to take on board some amendments and suggest some amendments of my own which improved the draft of the text. The contributions on Second Stage have been constructive and I look forward to similar contributions from Members on Committee Stage.

Question put and agreed to.
Committee Stage ordered for Wednesday, 12 May 1993.
Sitting suspended at 5.15 p.m. and resumed at 6 p.m.