Vol. 395 No. 5
6 Mr. J. Bruton asked the Minister for Finance if his attention has been drawn to the fact that the recent report of the European Court of Auditors has criticised his Department for retaining EC transport infrastructure funds instead of transferring them on a project by project basis to the authorities responsible for implementing the projects; and if he proposes to take any action or change any procedure, in light of the criticisms of the Court of Auditors in this matter.
The observations of the European Court of Auditors in its Annual Report for 1988 on the retention of EC funds for transport infrastructure by the Department of Finance do not take into account the manner in which EC funds are drawn down by the Irish Exchequer.
The Public Capital Programme — PCP — is determined each year taking account of the amount likely to be received from the European Community Regional Development Fund and the separate Transport Infrastructure Grants. If these funds were not committed by the Community the PCP total would have to be reduced by a corresponding amount. The Exchequer provides the funds for the projects in advance of receipt of the EC aid. Accordingly when EC aid is received it is retained by the Exchequer in recoupment of what it has already advanced.
These arrangements are fully consistent with the relevant EC regulations and I do not agree with the implication in the Court of Auditors report that the link between the Community aid and the particular projects aided is not evident. Consequently I do not propose to change the procedures.
Would I be wrong in interpreting the Minister as saying that he rejects the report of the European Court of Auditors in this matter and that in so doing he is setting himself, in a sense, above the law in so far as the Court of Auditors has been established, specifically with the responsibility to oversee the expenditure of European funds? May I ask the Minister under what authority he decided that in the case of the expenditure of European funds in this instance he is in a position to ignore — quite definitely to ignore — the considered opinion of the legally responsible body in this matter, the Court of Auditors?
I have to repeat again for the Deputy that I do not accept and do not agree with the implications of the Court of Auditors report that the link between the Community aid and the particular projects aided is not evident. As a former Minister for Finance, the Deputy himself is only too well aware that when we produce our Public Capital Programme each year, projects are in it which are funded by the Exchequer, subsequently money comes in from the EC and is held by the Exchequer in recoupment of what they have already paid out. That is the standard practice and it is in accordance with the relevant EC regulations. Consequently I do not accept the implications of the Court.
Would the Minister not agree that it is a very serious situation where we have the Government of a member country — which is currently holding the Presidency of the European Community — stating that it does not respect or accept, in an important matter, the conclusions of the duly established organ of the Community for the interpretation of the propriety of the expenditure of particular moneys? Would the Minister agree that that is a very serious constitutional situation where a member state simply states that it does not accept the decision of the duly established body whose responsibility it is to make this decision? May I ask the Minister, in view of the seriousness of this conflict which has now been disclosed, what measures, if any, he proposes to either have the Court of Auditors removed, on the basis that he believes they are not competent to make these decisions, or alternatively, to reach an agreement with the Court of Auditors whereby he accepts their interpretation which is their, and not his, statutory responsibility to make?
I do not think the Deputy is listening to what I am saying. I am saying I do not accept the criticisms in the report. One would think from listening to the Deputy that we were the only member state that was singled out for criticism in this regard. Paragraph 10.14 of the report states that the situation in the Federal Republic of Germany and in Ireland is similar in that Community funds are retained by the Ministry of Finance or its equivalent, that they are not transfered on a project by project basis to the authorities responsible for implementing transport projects and that, as a consequence, a link between Community funds and particular projects is not discoverable. This does not mean that projects approved by the Council for financial support have not been implemented. It will be noted that this criticism is not specific to Ireland because the Federal Republic of Germany is also cited as they handle the funds in exactly the same way as Ireland does.
This must be a final question. There are other questions to be answered also.
Would the Minister agree that Ireland and the Federal Republic of Germany are not in the same situation in two respects in that first, their Minister has not indicated his intention to defy the Court of Auditors in this matter and second, the Federal Republic of Germany is a net contributor to EC funds whereas we are net beneficiaries?
The Deputy's last comment is totally irrelevant. Whether or not they are net contributors makes no difference, good, bad or indifferent to the system of the application of funds. Second, the Federal Republic of Germany handle their funds in the same manner we do in that if we pay funds out of the Exchequer and subsequently money comes in, we hold it in the Exchequer to compensate for what we have already paid out.
In view of the totally unsatisfactory nature of the Minister's reply, I wish to raise it on the Adjournment.
I will communicate with the Deputy. I will allow Deputy Taylor a brief question because he had an earlier question which was related.
I want to ask two questions. Would the Minister not agree that it is entirely unsatisfactory and unacceptable that it should go forth from this Question Time that the Minister is in clear defiance of the appointed authority of the EC on Structural Fund payments, the Court of Auditors, and that he has reiterated his defence here? Second, is it not the clear implication that much of these funds which the Minister has received, amounting to many millions of pounds, have not been applied for the specific projects for which they are given?
We are having an element of repetition.
I could not agree with you more, a Cheann Comhairle. The same answer applies here and to Deputy Bruton's question, that is, if the Deputy has a specific project let him name it, put down a question and I will answer it. I have explained the system as clearly as I can.
You just cannot do that.
If we do our business in accordance with the relevant EC regulations and in a similar manner to the Federal Republic of Germany in that, as money comes into the Exchequer to reimburse us for money we have paid out of the Exchequer for particular projects, there is nothing wrong with that and I reject the criticism of the Court of Auditors if that is what they are referring to.
They do not count.
I did not say they did not count. I said that I rejected their criticism.
That was a Priority Question and it got 15 minutes.
That may be so, but I said Deputy Taylor had an earlier question which was related to this. Please, Deputy Allen, do not try to browbeat the Chair. I am calling the next question.
