Dáil Éireann díospóireacht -
Friday, 11 May 2012

Vol. 765 No. 2

Comptroller and Auditor General (Amendment) Bill 2012: Second Stage

Deputy John McGuinness

I move: "That the Bill be now read a Second Time."

The purpose of this Bill is to make local authorities accountable to the Comptroller and Auditor General and, by extension, put them under the remit of the Committee of Public Accounts. The reason this is necessary is because every year local authorities receive substantial funding from the Exchequer, the spending of which cannot be followed by the Comptroller and Auditor General.

The latest figures are available in the annual report of the Comptroller and Auditor General, which was published last September, remind us that we are dealing with the expenditure of an enormous amount of public money and cause me to wonder why the Comptroller and Auditor General has not always been involved. The figures clearly demonstrate why the Comptroller and Auditor General should be allowed to audit local government. The amount of money provided in 2007 was €5.5 billion, in 2008 it was €5.7 billion, in 2009 it was €5.25 billion and in 2010 it was €4.45 billion.

I am delighted that this Bill is being taken today as a Private Members' Bill and not in Opposition or Government time. I am aware that many individual members of all political parties and none support what this Bill is seeking to achieve. This is exactly the sort of Bill that should be put to a free vote because it demonstrates our determination to control and hold accountable those who spend and collect public money. This is an accountability which members of the public often presume we can enforce but little do they know.

Good governance is the mantra of the times in which we live. It is a comment on its absence over many years that a troika of technocrats is in Ireland to do the job that successive Governments avoided or ignored. One cannot have good governance without accountability and transparency. The way in which the Dáil controls and audits the spending and collection of taxpayers' money is critical to good governance. If we do not carry out our work diligently and fearlessly, hand the responsibility to others rather than not supervise and, if necessary, penalise, or stand back when we should stand up, we are not doing an important element of the work we were elected to undertake.

The Committee of Public Accounts is an arm of the Dáil and, along with all committees, it should be a strong and powerful arm because it is one of the means in which the Dáil demonstrates its power in a very public and meaningful way. The committee gained its reputation, the goodwill of a large section of the public and the respect of the rest during the DIRT Inquiry. In the course of that inquiry banks and members of the public were made to provide information and pay for their mistakes over a short space of time, as was right and proper. I draw Members' attention to the other side of the coin, however. When public service accountability, transparency and efficient use of billions of euro in taxpayers' money is under scrutiny, timeframes are ignored, documents and written answers are not produced in a timely fashion and the committee is frequently treated with barely concealed annoyance and condescension. I hasten to add this does not apply to all who come before us but a hard core believe themselves to be above all that committee nonsense.

The important point to remember is that we do not live in a two speed republic. What is good for the general public should be applied without fear to the public service. The State is accountable to the Dáil and Members of the Dáil are accountable to the Irish people. The committee takes its duty seriously and, in this Bill, I seek what I believe are necessary powers to audit, investigate and hold accountable those in local authorities who together spend billions of public money in a manner that is often far from satisfactory. The Members of this House are the people who can make this happen. This is not about party politics; it is about our belief in ourselves, our willingness to demand good governance come what may and our ability to withstand the pressures that will be brought by those who prefer the veil and the vague to the cold light of objective and close scrutiny. We spend most of our time in this House debating ways of taking money through one tax or another and too little time on how we can save money, while water drips into the ground, funds are unwisely spent and expensive consultant reports fill the dustbins of Departments.

I was a member of two local authorities over a 25 year period. During that time I saw little or no scrutiny of how taxpayers' money was spent. An audit report was an exotic creature that appeared now and again during council meetings but members did not engage with it for fear it would bite. As a member of the Committee of Public Accounts between 2002 and 2007, I discovered that familiarity with the creature was not enough. One could look but one could not touch. The creature remained exotic but it was clearly expensive to maintain, even though its keepers we're not prepared to talk about this. Nevertheless, it was the Committee of Public Accounts which discovered a €9 million hole in the finances of one local authority, which brought the seriousness of the committee's inability to investigate sharply into focus.

In September 2005, the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, who was then a member of the committee, produced a report which examined the whole issue of local government accountability and transparency and concluded that it was neither. The report found that the audits undertaken by the local government audit service did not feed into the Dáil accountability process, as embodied by the Committee of Public Accounts, and as a result it was difficult for Dáil Éireann to be satisfied, as the funding organ, that the money provided was properly used and achieved value for money. The report went on to point out the practical difficulties that arise where local authorities are not held accountable to the Comptroller and Auditor General even though the accounts of funded bodies, such as the National Roads Authority, are audited by that office. The report concluded that this represented a significant restriction in the Comptroller and Auditor General's capacity to account for a significant portion of national public expenditure. In all honesty, how can we look the people of this country in the eye and tell them that billions of their money is being spent in a manner that sometimes raises grave doubts, and the State's most senior financial officer cannot properly investigate what is going on?

The report went on to outline the shortcomings of local accountability, when it stated:

The restriction on the Comptroller's capacity to account for the expenditure of these sums might not be of concern if local audit was an adequate substitute. However it is not. This is not a criticism of the professional adequacy and competence of the Local Government Audit Service. What is of concern is the lack of any coherent, systematic or sustained response by local authority members to the statements and reports of that service. Put simply and starkly, I am not convinced that local authority audit committees function in any meaningful sense, as a means of ensuring accountability for the stewardship of public funds.

l am quoting from the report and these are the words of a respected parliamentarian and Minister in the current Government, who was clearly unhappy with what he had seen and wanted it changed. I do not use his name for political reasons. I use it because it has weight and I respect what he stands for. I share his view and would contend that anyone who knows the system as well as Deputy Rabbitte or I do, would not disagree with the conclusions of that report.

Deputy Rabbitte's words are even more relevant today than when they were written six years ago. I could say that there is a greater need for change now, but the fact is that need for change was there when we had the money to afford it and perhaps if we had been as rigorous about our supervision across the board then we might not be where we are now. We have been given a harsh lesson about what happens when those who accept leadership roles hand unsupervised responsibility to others.

Most of us are not accountants, auditors or solicitors but no one in this Chamber is without experience or common sense, and we undervalue those virtues. Too often, we sell ourselves short to those who sell themselves big. We should remember that we offered ourselves as leaders and law-makers, and we made promises; we climbed a steep road to get where we are today. We are the elected representatives of the people who have given us power that we should not hesitate to use on their behalf. A healthy, mutually respectful tension should exist between politicians and public servants but the responsibility to lead is ours. If we do not do that job, a vacuum results which creates governance and control stresses that are unhealthy in a democracy and damaging to politics.

Let me illustrate where that lack of tension and rigour has led us, and give examples of the cost of lack of supervision, accountability and transparency in local government which, I believe, will clearly demonstrate that the people of Ireland, who are laden with petty rules and endless red tape, are not getting value for money, or the accountability or transparency that creates it.

Yesterday at the Committee of Public Accounts, we dealt with the cost of maintenance and improvement of local and regional roads for which €411 million was given by the NRA in 2010. The concern raised by the Comptroller and Auditor General in his report related to the cost of resurfacing work, which for regional roads ranged from €3.78 per sq. m in Clare to €10.87 per sq. m in Sligo. For local road resurfacing, the spread ranged from €2.72 per sq. m in Cavan to €11.53 per sq. m in Sligo, where the cats eyes must be made of diamonds. That is just one instance where the Committee of Public Accounts needs to be able to investigate to ensure that public moneys are not being wasted. There may be a valid reason for the divergence but it is hard to imagine that the taxpayer is getting value for money from Sligo County Council. It is in the interest of local authorities and taxpayers that this be investigated by the Comptroller and Auditor General and the fact that it is not only weakens public confidence in the Dáil. The NRA can conduct certain audit functions on the spend. It can cold call on different projects, yet the Comptroller and Auditor General cannot do so.

Let us look at water services. In 2010, the Exchequer allocated €535 million to local authorities for water and sanitary services. In fact, and I quote Comptroller and Auditor General figures here, in the period 2000 to 2010, €5.2 billion of Exchequer resources were invested in the upgrading and provision of new water services infrastructure. One of the ways we judge the effectiveness of that investment is in water quality and to be fair, this has shown constant improvement. The second way to judge the effectiveness of this investment is to look at how much treated water goes unaccounted for every year. The average loss across all councils is 41%, twice the OECD average. In some council areas, the percentage loss is as high as 58%. The result is that we invest heavily as a State in treating water, yet 40% of that investment is negative, as the water leaks from the system or whatever, but it does not get to the end user. We have now come to the point where the end user will have to pay, not only for the water he or she uses but also, in effect, for the water that is wasted. All the Committee of Public Accounts can do is raise the matter with the Department of the Environment, Heritage and Local Government.

The committee must work at a macro level, which is useless. The responsible people in local government, county managers and directors of services, do not come before the committee. We deal with them though a filter of their departmental colleagues and in-house internal auditors, all of whom are too connected to make good governance possible. It is an irrational system that does not inspire confidence and with the best will in the world, in-house auditing involves conflicts of interests and does not have the impact of a completely independent audit.

All of this has not been lost on concerned citizens and taxpayers, who are beginning to look past politicians, which is not good. A number of issues have been raised by the public with the Committee of Public Accounts in the past year and we have had to tell those concerned that there is nothing we can do about what they believe is a waste of public funds.

The Minister of State, Deputy Jan O'Sullivan, will understand that delivering this message does not sit easily with me. In effect, l am telling the public that, despite its perception of the Committee of Public Accounts and of the Dáil and politicians, we are not in control of so much that goes on. How long does the Government think we can support that charade before we lose the little credibility and trust that we still have? We must assert our authority.

Let me give examples of the matters brought to the attention of the Committee of Public Accounts with which we cannot deal and for which nobody, except politicians, is held accountable because the public believes in the pretence that we are in control when we are not. In some instances, we are only scapegoats for those to whom we have delegated control, whom we are not able to supervise or hold accountable in any meaningful way.

In the case of the Poolbeg incinerator, where €80 million has been spent on a project the viability of which is questionable, the Committee of Public Accounts asked the Accounting Officer to ask the local government audit team to investigate the spend to date. This was agreed, but the committee has no idea when the report will be completed or when we are likely to examine it. It will be a long time before we see white smoke on the Poolbeg report, unless the Committee of Public Accounts is allowed to light a fire under the process.

On the purchase of lands by Wicklow County Council in Greystones, and the fact that the local authority was forced, based on the 2007 contract, to pay €3 million in 2011 for lands that are worth a fraction of that amount, I am told that these lands will never be developed as they are in a flood plain. What happened there, and why? The Dáil needs to know and the public has a right to know. The recent High Court judgement against Meath County Council which led to an award of €4 million being made against the local authority for planning irregularities is another matter on which the Committee of Public Accounts should be able to investigate and report.

The Comptroller and Auditor General can examine a body such as the NRA and look at the effectiveness of its expenditure, which puts pressure on the body to do its business efficiently and well. Local authorities, on the other hand, only seek to maximise the grants they can get from central government. The only way we can ensure that those grants are used in a manner that gives value for money is to have local authorities accountable to the Comptroller and Auditor General and, therefore, to the Committee of Public Accounts.

It is evident what the problem is and how it can be remedied. What is not evident is why local government fears - and quietly attempts to block - giving powers to the Comptroller and Auditor General. If for no other reason, and there are plenty, this is why we should ensure that these powers are given.

Since my appointment last year as Chairman of the Committee on Public Accounts, I have been advocating change. To me, it makes no sense that any layer of Government cannot be held to account by the Comptroller and Auditor General for the expenditure of significant amounts of taxpayers' money.

I note that in the Public Service Reform Plan, published last year by the Minister for Public Expenditure and Reform, Deputy Howlin, the local government audit unit, which is part of the Department of the Environment, Community and Local Government, was to be the subject of critical analysis this year, with a view to seeing whether it could be amalgamated with the Office of the Comptroller and Auditor General. I understand the review is being conducted by a group appointed by the Minister for the Environment, Community and Local Government and will be concluded at the end of June. I do not want to prejudge the finding of this group, but I have a concern that it has not sought the views of the Committee of Public Accounts. There are 140 professional staff in the Office of the Comptroller and Auditor General and there are 40 similarly qualified staff in the local government audit service. It makes sense that these bodies are amalgamated. I would be surprised and disappointed if the report found otherwise.

On average about 50% of local government expenditure comes from the State and the remainder is raised locally through commercial rates and various charges. For some of the larger local authorities, and especially the local authorities representing major urban areas, the Exchequer contribution will be below 50%. How local authorities spend their own money is a matter very much for each local authority. The Committee of Public Accounts cannot be involved because local government is constitutionally independent in its day to day functioning.

This Bill will not jeopardise that independence, rather it will deal with the reality outlined in the 1995 report produced by the current Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, which is that the Dáil must have mechanisms to account for the moneys allocated by a decision of the Dáil. That is the reality. Change needs to happen and it needs to happen quickly. The Government has a duty to investigate and hold accountable all those who spend public money. There is no doubt in my mind that this is best done by empowering the Comptroller and Auditor General.

A measure of the seriousness with which the Minister for Public Expenditure and Reform, Deputy Howlin, and his Department face the challenge of public sector reform will be if they succeed and achieve what is set out in this Bill. Vested interests will argue for the status quo and the Minister will have to deal with inertia and take bold steps if he wants to ensure that the taxpayer is the ultimate winner. Will common sense prevail or will we see Ministers and Departments hiding behind conventions and supporting systems that simply do not work? Senior management will ensure that systems, procedures and governance structures are in place and respected if they know that they will be held to account in public before the Committee of Public Accounts, which does not happen now. Furthermore, county managers should also rank as Accounting Officers. That alone would be a big step towards good governance, transparency and accountability. We have the template for how it works. We need look no further than Northern Ireland, where the audit office there has responsibility for departments, state bodies and local authorities.

I will finish by going back to the basic law of this State, our Constitution, and in particular to Article 33 which provides for the Comptroller and Auditor General "to audit of all accounts of moneys administered by or under the authority of the Oireachtas". To my mind, moneys that are voted in this House for roads, water services or social housing and allocated to local authorities fall into the category of moneys administered under the authority of the Oireachtas. This Bill is necessary. It gives us the right to follow money to the point where it is spent. It gives the Dáil, through the Committee of Public Accounts, the right to ask questions. It puts power where power should rest and demonstrates to the public and public servants that the Dáil is in control and takes that responsibility seriously. I commend the Bill to the House.

An Ceann Comhairle

I advise Deputies that the first four time slots are for the main spokespersons from Fianna Fáil, Sinn Féin, the Technical Group and the Minister.

Deputy Jonathan O’Brien

I commend Deputy McGuinness on bringing forward this Bill. It makes sense and Sinn Féin will support it. Having read the Bill and having listened to the opening speech of Deputy McGuinness, I see no reason anybody in the House would disagree with the sentiments behind it. I hope the Government will support it, but I doubt it will.

The Bill takes a common sense approach to the issue. I served 11 years on Cork City Council and am aware of the current position within local authorities. I am sure many of the Deputies in this House have similar experience on local authorities and know how they operate. Currently, the way the system works is that the local government auditor will do a report, which, when produced, is given to each member of the local authority. This seems to suggest that it is then up to each member of the local authority to scrutinise that report. As Deputy McGuinness has said, many of us are not accountants or experts in that area. Therefore, it makes sense that the spending of public moneys is scrutinised by the Oireachtas and no committee is better qualified to do this than the Committee of Public Accounts. It is unfortunate if any policy disallows or prevents this from happening. We must give the public confidence in the systems, particularly in these harsh economic times when every penny counts. We, as Members of the Oireachtas, have a responsibility to ensure that the hard earned money of taxpayers is accounted for and spent appropriately and it is for that reason that Sinn Féin will support this Bill.

Based on my experience on Cork City Council, I know that up to a number of years ago the council did not even have a finance committee. When policy committees were introduced, there was no policy committee to deal with finance. The only opportunity councillors had to question the managers or the various directors of services on how money was being spent was when the budgets were being formulated in December. Cork City Council had 31 elected councillors, yet it fell to the chairpersons of the various strategic policy committees, SPCs, to do the background work on formulating the budgets and these were then almost "presented" to the rest of the council as a fait accompli . There was very little scope to question where the money was being spent or whether we were getting value for money and little or no opportunity to transfer money between budgets. Much of the money allocated in local authority budgets was for wages and payroll, with little or no discretionary spending. This process was frustrating for many councillors.

The current system does not work. It does not allow local authority members the expertise or ability to scrutinise local government audits properly. Therefore, it makes sense that the Comptroller and Auditor General should take over that responsibility because that would make the councils accountable to the public. They would come before the Committee of Public Accounts and give their reports. This would give Members from the various political backgrounds and parties the opportunity to question their spending. Accountability is particularly important in these tough economic times. When the Government came into office, it made a big play of its intention to reform our systems and local government and make them more accountable. This Bill will enhance that and I hope it is supported by the Government. If it is not supported, the Government must give a damn good reason as to why not and must explain how it will make local authorities more accountable for the spending of public moneys.

People are frustrated by the lack of accountability with regard to local government funding. Cork has probably the highest paid mayor in Europe, earning in excess of €117,000 - more than a Deputy or Senator - but he has very little power. Significant money is also spent on conferences and councillors' expenses, but there is little scrutiny of that spending. This is frustrating, especially when budgets are being cut for housing maintenance, road resurfacing, parks, recreational facilities and libraries. At the same time, people see city managers and senior officials walk away with huge severance packages and bonuses. This is no longer acceptable and must change. Sinn Féin has raised the issue here of cutting severance packages to outgoing city and county managers and at the time, the Minister, Deputy Howlin, said that it was one of his goals to try and get rid of that culture. However, we have not yet seen any legislation brought before the House to address this issue. That needs to be done.

It is important that we return confidence to the public with regard to how we spend taxpayers' money. This Bill does that and for that reason Sinn Féin will support it.

Deputy Catherine Murphy

I welcome this Bill as it makes sense and should be supported. I wish we had local government in this country, but instead we have a system of local administration. This could not have been demonstrated more clearly than when the local government management services board opened its fine new building on the quays and called it Local Government House. While there is no democratic component to that aspect, this was making a strong statement.

There is a great deal of experience among Members of this House who sat on local authorities for decades in some cases, including myself. Local government is a vehicle for renewal but radical reform is required to achieve that and the spotlight will be on local government in that regard. In terms of the household charge, for example, people will have a problem with that because they are paying into a system that is not the proper vehicle and they will rightly ask what they will get in return. There must be confidence in the way public funding is accounted for and in that regard the political parties have to trust the citizens of this country. Radical reform of local government would achieve that.

I have argued that the county council system should be phased out and replaced with a system of district councils and a small number of regional authorities, which would be much more beneficial from the point of view of collective procurement. Also, we need a more strategic focus in terms of planning, land use, transportation planning, and delivery of a range of initiatives, with many services decentralised to that tier and a softer focus that is about shaping a role in that area, which is one of the strengths of this country. The credit union movement and the GAA, for example, have been spectacularly successful because they had that local model of people working with each other and for their community. It is important to stress that point at every available opportunity.

An area on which the Bill would shine some light is the ridiculous needs and resources model that allocates funding to local government in an inequitable way. When it was introduced, local authorities were reassured that no local authority would lose out as a consequence of that model but there was discrimination and it ensured that local authorities that were growing did not advance in terms of matching their staffing levels or financial resources as a result of what was transferred from the national to the local. The counties that benefited least from that were those on the periphery of the major urban centres, and not exclusively those in Dublin. I refer to those in Cork county, Galway county as well as the counties on the periphery of Dublin. The standard of services vary greatly and the type of audit being examined would raise questions at national level and give a focus on areas where that is required.

Deputy McGuinness made the point about transport but Departments must communicate with each other also. The safety regime put in place by the Department of Transport was done in the absence of any kind of a remit in terms of that decision to the Department of the Environment, Heritage and Local Government. Some local authorities are abiding by those rules to the letter but others are not. I recall driving from Dublin to Galway one weekend. We had been told the grass on the motorway median could not be cut because one of the lanes had to be closed off on safety grounds but when I arrived in Connacht I saw a fellow on a tractor working on a similar motorway to the one in Dublin who it appears was not under the same restrictions. I am not saying people should be exposed to any kind of risk if they are working in a dangerous location such as a motorway but approximately one third of all the money that goes into road projects here is taken up by the need to adhere to safety requirements. That must be examined in a way that considers the people who are working on the system while at the same time adhering to safety requirements. That accounts for some of the difference in the funding allocated.

When I was first elected to Kildare County Council I asked about the location of development contributions. It got to the point where I wanted to know if they were in a Swiss bank account or the Cayman Islands because I did not know where they were located. I continued to ask about those contributions because I knew people were paying them or they were being demanded on planning applications. They certainly were not appearing in the accounts. There did not appear to be a difficulty in pursuing the small person through the courts if they did not pay water or bin charges but there was not the same focus on that big pot of money. That is an issue I have pursued over the years to the point that when Kildare County Council eventually put a system in place, at my insistence, I wanted to examine the code behind the software to make sure it achieved what was intended. I wanted to be satisfied about the matter because I had been given the run around for years on the issue. Ultimately, the council did an audit and discovered there was €15 million outstanding. That large amount of money was never collected because of the statute of limitations. That is a disgrace, and I am convinced it happened in other places.

I asked a question of the Minister of the Environment, Heritage and Local Government in February about development contributions and I discovered that in 2009, local authorities had collected €962 million in development contributions but that money could not be spent because of the conditions imposed by the Maastricht treaty and the criteria for debt; the local authority is part of that same system. I am concerned that where special contributions are applied to planning permissions that money will be handed back where projects cannot proceed and there is no money coming from central funds that can be matched with those special development contributions. A picture nationally of that is essential as is one location where it can be controlled, and the correct place to do that is under the remit of the Comptroller and Auditor General. I support the Bill.

Minister of State at the Department of the Environment, Community and Local Government (Deputy Jan O’Sullivan)

The Private Members Bill put forward by Deputy McGuinness provides for the Comptroller and Auditor General to audit local authority accounts, local authority audits and local auditor reports and the accounts of the Housing Finance Agency. There is also a provision concerning the timeframe for responses from Accounting Officers to requests from the Committee of Public Accounts. Having considered the various provisions and their impact on the process of external audit of public expenditure, unfortunately, the Government does not support this Bill. I will explain the reason for that shortly.

We welcome the opportunity to discuss this area of value for money and transparency with regard to local authority accounts in particular, which often does not get the public discussion required. Before discussing the Bill in any detail I would point out that while the Government does not support the Bill, it does support its underlying principles in terms of greater scrutiny of public money. As the House is aware, the programme for Government envisages and is delivering on a renewed focus on a range of reform issues, including legislative change to facilitate more open, transparent and better government, an increased focus on e-Government and shared services, giving citizens greater choice and input into service delivery, improving regulatory design and practice, and a more empowered, skilled and focused public service to deliver these changes. Against this background of reform and in the context of enhancing the scrutiny of public expenditure, the Government is also reviewing the scope and structure of the external audit process of public money.

Public service reform requires a commitment from the whole of government to become more transparent, accountable and efficient. One of the key deliverables in this regard is the radical streamlining of State bodies. The public service reform plan provides for the critical review of a range of state bodies, including the Office of the Comptroller and Auditor General and the Local Government Audit Service. This review will include representatives from those two bodies, the Departments of Environment, Community and Local Government, Finance, and Public Expenditure and Reform and local authority management expertise. The Government recognises the potential of a merger of the Office of the Comptroller and Auditor General and the local government audit service. The critical review of the merger of the two organisations will inform the future development of external audit at local and central government level. While there are challenges to the integration of the central and local government external audit process, there are benefits to be explored from the synergies of agency rationalisation, greater scrutiny of public money, common audit standards and enhanced accountability. Any integration must take account of the respective positions of local and central government and the local government reform agenda which, among other things, will seek to strengthen the role of elected members on oversight of local authority performance. I am sure Deputy Catherine Murphy welcomes that.

We have been asked to adopt the Bill as proposed by Deputy McGuinness. The Government supports the principle of greater scrutiny of public money but the delivery of the principle must be within the context of public service reform. The Government is driving public service reform to continually improve and deliver services faster, better and more cost effectively. Innovation, flexibility and the delivery of streamlined services are at the heart of a reformed public service. This is the context in which change must be delivered and this is the difficulty posed by Deputy McGuinness's Bill. While the promotion of the principle of greater scrutiny of public expenditure is welcome, the Bill is a missed opportunity for reform, as it does so without regard to value for money in the delivery of the external audit process.

Looking at the detail of the Bill on local authorities in sections 2 to 6, the Bill provides for the Comptroller and Auditor General to audit local authority accounts, to audit local authority audits and also to audit the reports produced by local government auditors. The Bill would create an additional layer of audit by the Comptroller and Auditor General, duplicating the work of the local government audit service. Apart from the resource implications of this approach, this duplication of activity is contrary to the Government's approach to a streamlined and flexible approach to the delivery of public services. The delivery of external audit, no less than any other activity in the public service, must be delivered in line with these principles.

In considering this duplication of audit, it is useful to look at the work of the local government audit service, which provides independent scrutiny of the financial stewardship of local authorities. Its role is to carry out audits of local authorities and other bodies in accordance with its code of audit practice, thereby fostering the highest standards of financial stewardship and public accountability, and to promote the achievement of value for money in authorities by undertaking value for money audits and publishing reports. The local government audit service audits the accounts of 34 city and county councils, 80 town councils, ten regional authorities and regional assemblies and 55 other bodies.

The Local Government Act 2001 sets out the legal basis for the audit of local authorities which includes the appointment of a director of audit to organise, direct and allocate resources and assign audits to particular local government auditors. The Act provides for audits to be carried out by local government auditors, who are all professionally qualified accountants and independent in the performance of their professional functions and for audits to be carried out in accordance with a statutory code of audit practice, section 117 of Act, which embraces best professional practice for the local government audit service and provides for the responsibility of auditor to form an independent audit opinion on the financial statements; the discharge of audit responsibilities with integrity, objectivity and independence; the exercise of due professional care and impartiality; and, the audit approach that prescribes the way in which auditors should perform their functions in the light of statutory and other responsibilities imposed on them.

The local government audit service also issues an annual activity report which summarises the main issues arising in the audits of local authorities and allows comparison across a range of issues. This report is presented to the Oireachtas Joint Committee on Environment, Transport, Culture and the Gaeltacht, as recommended in the report of the local government efficiency review group. Local government auditors are strategically based around the country and have extensive local knowledge, which is invaluable when carrying out their work. This is compatible with the principle of local democracy, as articulated in Better Local Government, that services are best provided as close to the public as possible. All assignments take account of cost control and audit efficiency.

Special formalities attach to a range of issues including the serving of notices of audit, the deposit by bodies subject to audit of their books and draft annual financial statements for public inspection immediately prior to audit, the closing of audits, and the availability to the public of copies of the audited annual financial statements and any associated audit reports. The auditor assigned to audit the accounts of a local authority must give public notice of the opening of the audit and consider and determine any objections received from the public. At the conclusion of the audit, the auditor must enter an audit opinion on the financial statement, which will be either qualified or unqualified. The audit report and opinion is sent to the local authority, which must table it for discussion at the next available public meeting of the local authority. These accounts are published and are available to the public and other interested persons. In addition to entering an audit opinion on the annual financial statement of each body audited, local government auditors may also issue associated audit reports. These public reports may provide brief commentaries on significant trends or outturns disclosed in the accounts, such as budgetary comparisons, capital projects, inter-authority transactions, reliance or otherwise with the authority's internal audit function, revenue collection performance, residual matters from previous audits and other internal financial control issues.

The critical review of the merger of the Office of the Comptroller and Auditor General and the local government audit service will take account of the roles undertaken by each organisation. As provided for in the public service reform plan, the review provides the opportunity for enhanced scrutiny of public money in the context of the overall framework of reform. The guiding principles of the critical review process, applying to a range of potential mergers, include a citizen focus where any proposals should respect and enhance the relationship between citizens and the State. This is the key relationship in any democratic society and organisations operating in the public service should be designed to deliver quality public services and to contribute effectively to the business of public administration. This is a valid principle at both local and central government level.

The review process also requires an examination of the benefits of merger in terms of delivering greater democratic control, improved service delivery and/or real cash savings. Any decisions taken in the context of a critical review will be cognisant of duplication, overlapping and similarities of functions and roles of bodies, and the synergies from bringing together such separate bodies.

I am highlighting these issues to demonstrate the wider framework against which developments in the external audit of public expenditure must be considered. The narrow focus in the Bill, addressing the extension of the audit mandate of the Comptroller and Auditor General to the local authorities, without regard to the overall framework of external audit, is not acceptable and would not contribute to an economic, efficient or effective external audit process.

The Bill also provides for a number of changes to provisions concerning certain reports of the Comptroller and Auditor General. Under current arrangements, when the committee of Dáil Éireann established under Standing Orders to examine and report on the appropriation accounts - the Committee Of Public Accounts - makes a report to Dáil Éireann following its consideration of a report of the Comptroller and Auditor General, the report is considered by Dáil Éireann as soon as possible after it has been laid before the House. The amendment in section 5 of Deputy McGuinness's Bill provides, in effect, for the Chairman of the Committee of Public Accounts to place a motion on the Order Paper of Dáil Éireann seeking consideration of each report. Section 5 also introduces a statutory requirement on Accounting Officers to respond to requests of the Committee of Public Accounts within 30 days and requires Ministers to ensure compliance where Accounting Officers fail to respond.

Regarding the business of the Committee of Public Accounts, if the Deputy considers that there are issues about the Dáil's consideration of Committee of Public Accounts reports or responses to committee requests by Accounting Officers, it would be preferable if these issues were explored further before deciding that another legislative provision is the way forward. As it stands, section 19 of the Comptroller and Auditor General legislation of 1993 provides for the giving of evidence by Accounting Officers. The Minister for Public Expenditure and Reform, as he has previously indicated to Deputy McGuinness, is open to developments that create a more relevant timeframe for responses between Accounting Officers and the Committee of Public Accounts and his Department and the Committee of Public Accounts. In this regard, the Minister for Public Expenditure and Reform is happy to make officials of his Department available for further discussion on this issue.

The Comptroller and Auditor General is responsible for the audit of accounts across a wide range of State activities including the audit of Departments and offices, funds administered by Departments, State revenue collection and non-commercial State-sponsored bodies. The Comptroller and Auditor General, however, does not audit commercial State bodies.

The Housing Finance Agency Plc was established in 1981. The agency provides loan finance to local authorities and voluntary housing bodies for housing and related purposes. It is wholly self-financing, not being in receipt of State funds, and in the Comptroller and Auditor General (Amendment) Act 1993, is listed among those State bodies not audited by the Comptroller and Auditor General.

The Housing Finance Agency plc has always been audited by external auditors in recognition of its quasi-commercial mandate and public limited company status; the complex corporate governance requirements which include the UK Corporate GovernanceCode 2010; the Irish Stock Exchange Corporate Governance Annex; the Irish GAAP; the code of practice for the governance of State bodies; and stock exchange requirements for reporting within tight deadlines. The agency has already completed its annual audit for 2011 and published its 2011 annual report at its annual general meeting held on 30 April 2012. The audit costs €33,000 per annum and takes three weeks’ field work plus a further three weeks’ work to complete. The agency’s year-end is 31 December and the audit commences in the first week in February following the year-end.

As an entity not in receipt of State funding the HFA borrows debt finance on the international markets to allow it to lend to customers at the finest rates. The complex nature of the loan finance documentation requires periodic statements of compliance by the agency's external auditors to facilitate the issue of debt. Such statements are also of a particularly time-sensitive nature. The Housing Finance Agency, of course, remains willing to provide information to any committee of the Houses of the Oireachtas.

In conclusion, I reiterate that the Government is committed to greater scrutiny of public expenditure and the delivery of streamlined and flexible public services and activities. These issues are central to the Government's reform agenda. While the Bill addresses the issue of greater scrutiny and this principle is acknowledged and welcomed, we need to take account of the overall external audit environment of public expenditure and the potential for reform.

Deputy Thomas Pringle

I am pleased to have the opportunity to contribute to this debate. It is very disappointing that the Government has not accepted this very worthwhile and timely legislation. I commend Deputy McGuinness for his work.

When the Government established the practice of having Friday sittings of the House the Taoiseach said that the Government does not have a monopoly of wisdom. However, it now seems that the Government has decided it has a monopoly of wisdom because it has refused every Bill put before the House at a Friday sitting. It makes me wonder what is the purpose of this exercise when Bills are not even allowed to progress to Committee Stage. The Minister of State states that the Government is committed to public sector reform and public sector financial reform. I ask what would be wrong with allowing this Bill progress to Committee Stage where it could be tweaked and in that way achieve part of the reform at an earlier date rather than going for it all in the one shot. The Government is being very short-sighted in this regard.

This Bill is a very useful legislation as more accountability is needed in the finances of local authorities and how the moneys are expended. There is a complete disconnect between councillors and the financial administration of local authorities in which councillors do not take an active role. It is very difficult to understand in detail the budget books and the system of accountancy. It is very difficult to discover where particular items are accounted for in budget books and to be able to scrutinise how money has been allocated. Councillors who ask questions at the budget meetings of local authorities in order to understand the details of the budget book soon realise that it will take a long time and that they will rarely receive a reasonable answer or get to the heart of their query, for instance, to find out how the council has budgeted for a particular item of work. This is why councillors are disconnected. In my view, the councillors are the opposition and the executive is the government. In many cases, the councillors are trying to get their own pet projects through and if they are successful in this respect they will not scrutinise other activities.

While the Local Government Audit Service produces the audited reports it is not provided with the desired assistance from local authorities and this leads to a situation whereby the executive can continue to do whatever it wishes as regards the finances of the local authority. It would be a welcome development if the Committee of Public Accounts were permitted to scrutinise the audit reports and if the Local Government Audit Service were to be absorbed into the Office of the Comptroller and Auditor General. The service could still be based around the country and retain its local knowledge but with that extra level of external scrutiny, which would be very valuable. It is hoped this would do away with the practices as outlined by Deputy McGuinness in his contribution. More than €4.5 billion is spent annually by local authorities, therefore, this accountability needs to be in place.

I will cite a case with which I am very familiar, my own local authority, Donegal County Council. For seven years, the county manager engaged consultants to advise him on management change within the local authority. In fairness to the audit service, this expenditure was revealed in the 2009 audit but more than €2.3 million had been paid to two consultants, a total of €30,000 a month for seven years, for their work for Donegal County Council. This work was not tendered, was not shown anywhere in the accounts, was not in the budget. It was, in effect, a project of the county manager's. When this expenditure was revealed by the Local Government Audit Service, there was great reluctance on the part of the executive to deal with it. I was the only councillor who raised it on the floor of the council meeting. There was consternation that I had the audacity to raise the matter. Rather than justifying the expenditure or investigating how it was spent, the issue was personalised into a vendetta when this use of public moneys should have been questioned.

A small budget was allocated each year for organisational development but there was expenditure of hundreds of thousands of euro more each year. This was tweaked at a later date and sorted out. This kind of activity should not be allowed to continue and the Office of the Comptroller and Auditor General and the Committee of Public Accounts should be enabled to scrutinise such expenditure so that this could not happen in the future. There must be accountability, yet unfortunately, councillors cannot enforce it. The Local Government Audit Service can do its bit and provide reports but, unfortunately, councillors do not scrutinise them nor do they ask enough questions. There is no real debate within local authorities as to the proper expenditure of public moneys. This is where the system falls down. This Bill would go a long way to making the system more accountable. I am disappointed that the Government will not progress it to Committee Stage where it could have been amended as the Government sees fit.

Deputy Mattie McGrath

I am pleased to speak in support of this Bill. I compliment Deputy McGuinness for his research which he carried out himself as, like any of us, he has no support. As other Deputies have observed it is regrettable that the Government has rejected this Bill outright instead of allowing it be discussed and amended on Committee Stage. The promise of reform rings hollow. Four or five Private Members' Bills have been discussed at Friday sittings of the House and each one has been rejected by the Government. Such Bills entail a significant amount of work and this has to be done with one's own resources. I agree the Minister of State's approach is reasonable but when I presented a Private Members' Bill, the Minister of the day ridiculed me. He said I should have spoken to him beforehand to enlist his support but he had notice of the Bill several months earlier. That is a matter for another day. It is a pity that meaningful pieces of legislation are not taken in good faith and allowed go to Committee Stage.

Deputy McGuinness is the Chairman of the Committee of Public Accounts and he also has significant experience as a member of that committee. In order to have good governance, as has been said, there must be accountability and transparency. I want to echo what Deputy Pringle has just said. I was a member of a county council for almost ten years, and one does not get answers. If one starts to ask questions, one can be blacklisted and regarded as a nuisance and not the good boy in the class. On some occasions, one may be told, "Change your attitude or you won't get any kind of services". That will be hinted at subtly, but it is wrong because we are elected by the people to represent them and raise issues. Accountability is a big issue. Some €5 billion per annum was spent before the Minister, Deputy Rabbitte, produced his report. That is a huge amount money, although it has decreased to €4.5 billion this year. There are anomalies and shortcomings - we all have those, unfortunately - but there is no accountability because county managers are all powerful.

What sticks in people's craw is that when county managers and senior officials retire, at a young enough age with big severance packages, they are back the next day in a consultancy role advising county councils how to amalgamate services. This is not good enough. With 450,000 people unemployed, why do we have to re-hire retired senior departmental officials, county managers and assistant mangers to undertake reviews? It is a gravy train but it should be stopped because there are thousands of people well qualified to deal with those issues.

The National Roads Authority has done a lot of work with senior council officials, but one cannot talk to it. They are the real gods on high. I have said before that we got rid of the IRA but now we have the NRA. I mean that because the authority is untouchable and one cannot engage with it. The NRA built the motorways, which is a fine network, but there are no rest areas. The NRA would not listen to anybody. The NRA consumed large parcels of land in my constituency which were not needed. We are now damned year after year by seasonal traders who upset everybody. The NRA took acres that were never required, but why was it allowed to do that? The land was the subject of compulsory purchase orders and was bought dearly. The NRA had nearly enough land to build two roads, but there was no accountability involved. When I asked why it took over this land, I was told "You'll have to talk to the design team".

Anyone travelling from Dublin to Cork will know there is a problem with part of the motorway on the Tipperary-Limerick border where one lane is currently closed for repair works. I was told it was a drainage problem but we do not know. I asked who would pay for the repairs because that road was built by a contractor. It was a fine job which was delivered on time and under budget, so is there a guarantee or will the country council have to pay for the repairs? If not, who will have to pay? It should not be a matter of guess work to find out.

The Minister for the Environment, Community and Local Government, Deputy Phil Hogan, is introducing household, septic tank and water charges. I want to raise the issue of consultants again. A village in my area - Grangemore, near Cahir - badly needed a sewage treatment plant. In November 2010, I was delighted when a sum of €1.2 million was allocated for that work. We have been unable to get that work done, however, because it had to go to the consultants. This is the case even though a private developer had purchased land and designed a housing scheme and a sewage treatment plant, working every step of the way in conjunction with the county council. Conjunction may be the wrong word, but all the time he had pre-planning and had consulted with the county council. In fact, the council told him to take over the scheme. It was stipulated in the planning grant that if he had not done it by a certain date, the council would do it. The developer has those plans, which cost a lot of money. I am not saying they are perfect but the council refused to take them on board. The council has put out a tender for more consultants to design a scheme. It is an outrage that taxpayers' money is sitting there waiting to be used while everything is going into the river. That scheme was properly designed with county council engineers, using qualified architects and designers. It is not a penny-ha'penny job, it is top class and is necessary. I will raise the matter as a Topical Issue to try to get it moved on. It is there and ready-made. I am not saying that we have to cut out the tendering process, but they are now tendering for consultants. I believe that one of the consultants who did not get the job is objecting because he probably had a cosy little patch there and is wondering why somebody else got it.

We have had no action on the ground, however, and are still waiting for it. The backlog is still there and the damage has been done by the consultancy industry. When I joined the county council in 1991, a county manager, a county engineer, a county secretary and area engineers ran the council. Now we have a county manager, six directors of services and senior people below them. It is all chiefs and no indians. The staff on the ground have been stripped. The office staff and ordinary officials had to pay the pension levy, while the county manager and director of services were exempt. That is because the then Minister for Finance, the late Brian Lenihan - God be good to him - went back on the decision to put a pension levy on those earners. When I asked about a group of officials at a certain level, I was told there were only 16 or 17 of them, but there were in fact 700 or 800 who do not pay the levy. Meanwhile, ordinary staff who earn the bonuses that these people get at the top, must pay the pension levy. The system is unfair and rotten to the core.

Deputy McGuinness's Bill is badly needed in order to get some accountability in this regard. As he said, we get stick for the ways things happen, but we have no control over it. We should have control, however, because control must be brought back to this place. It should be taken away from advisers and senior officials. Some of them are very good and decent people, but others would treat one with contempt.

One cannot move a bend in the road now without getting consultants to design it. It is a shameful racket which needs to be exposed. As Deputy Pringle said, it is literally a gravy train. There was no such thing as a consultant back in 1991. The council engineers did their work, but now if they want to build a scheme of perhaps ten houses in a village, they put it out to tender and a consultant will design it. If they want to build five houses in the next village, they will put it out for tender again and get different consultants. That nonsense has to stop. I know one cannot lift the design for one village and use it for the next, but surely one can tweak a pretty basic design. One should not have to use the consultancy process again.

I have been trying to advance the Burncourt and Fethard regional water scheme for 20 years. Money was approved for it in 1998, yet a shovel has still not gone into the ground. People there tell me they will not pay any water charges because they have a notice to boil drinking water for almost ten months of the year. One could not drink that water, yet here we have consultants doing designs, which go up to the Department. The Department looks at them for six months and probably gets in more consultants, although I do not know. The designs are then sent back down again and the consultants have to do another design, build and operate plan. It is just shuffling paper from here to there in order to justify their existence. Nothing is happening apart from wasting money that has been approved for projects, so it is never spent on them. When I asked if the money was still there, I was told "No, we had to hire consultants and do reports". The money is gone and nothing has been done on the ground. It is beyond a joke. Somebody needs to examine this matter and this Bill is an ideal vehicle for such an examination.

How could anyone spend that kind of money on the plans for a new national children's hospital? How could the consultants and designers adopt that sort of design without knowing that it would be knocked back? There is such a thing as pre-planning for any kind of building. When one is considering building a house, one is encouraged to undertake pre-planning. How could that kind of money be wasted on a children's hospital project which was rejected due to its height? I only know what I have read about it, but it seems they knew it was not going to be passed. All the money has gone, but it beggars belief that they did not cop on. Can we not get some kind of indicative reply from An Bord Pleanála or the officials on Dublin City Council? This will not do. They say it is grand and they will re-design it, and they are still talking about looking for sites. It goes on in every county council and town council, yet there is no accountability.

Two years ago, I sent out a number of texts wishing people a happy new year. I received a most obnoxious text back from a town clerk, which I brought to the attention of the county manager. It amounted to a threat and when I told him he was not the boss he told me to away. There is no accountability. That is the type of thing that is happening. At that time I was a Member of this House and while I was not a member of a county council, I and other Members have a working relationship with the county councils. It is something we must have.

This legislation is timely and long overdue. I am disappointed the Minister of State indicated he will not be accepting it. If accepted, it could be referred to a committee where we could add to it, delete from it discuss it in detail and her Department officials could then deal with it. Ordinary Members do not have any resources to research such Bills other than those they have themselves, such as their personal assistant and a secretary and perhaps some voluntary assistance. We are not able to match what is in the Department but sometimes I think we nearly could. Common sense prevails where we are concerned most of the time but it seems to get very fazed and convoluted when it comes to issues and when consultants are brought in. It is time to cry halt to the bringing in of consultants.

Another issue in this context that arose in Tipperary relates to the upgrading of a road. People had been waiting for 40 years to have this work done and some €120,000 was spent on it. A fine job was done but after a night's rain all the work was undone. A big investigation was undertaken to find out the cause of the problem and a report that was done on it stated that the chips used could have been dirty, that the tar was not laid at the right temperature, that the wet mix was not at the right temperature or of the right quality, or that it could have come down to the mechanical operator of the machine. The attitude was, "Go away and do not be asking more questions". After all that, somebody had to take responsibility for these issues. That road had to be redone the next year and that meant other roads on the list to be upgraded took even longer to be done. There was no accountability for the waste involved. The cause was attributed to the possibility of four or five different matters. If a private contractor had been doing that job, he would have had to redo it at his own expense and that would be proper order. We cannot continue to have such a waste of resources. When people like Deputy McGuinness make a reasonable effort to discuss legislation such as this, it should be accepted.

On the matter of the attendance here today, the Technical Group, which is one of the smallest groups in the House, had by far the largest number in attendance at the start of proceedings this morning. The benches on the Minister of State's side of the House are pretty empty.

Deputy Jan O’Sullivan

The Deputy should look behind him.

Deputy Mattie McGrath

I am talking about when we started this morning. There were only four Members on the opposite side. There were between 15 and 18 Members present on this side. Having these Friday sittings is merely paying lip-service to reform because they are not meaningful. There is no Order of Business, we cannot vote on this legislation and any vote that is called on it will have to be deferred until next Tuesday. Bills are being rejected out of hand on every Friday sitting, which does not augur well for the way we do business. I am not saying that the Government should accept every proposal that comes from this side of the House but surely this Bill could be accepted as a work in progress document, referred to a committee and amended but whatever else, consultants should not be brought in to consider it. They should be kept away from it because if they are brought in matters will definitely get convoluted as they will want to protect their own skins. They have contacts in the county councils and it is like a merry go around, a nice cosy cartel. It needs to be unshackled, unbuckled and broken. The EU-IMF troika is crucifying us and I cannot understand how it cannot see or expose this waste that is taking place on a daily basis and that it is allowed to continue.

I thank the Chair for his indulgence. I commend Deputy McGuinness on his work on this Bill and I am disappointed that it is not being accepted.

Deputy Eoghan Murphy

This is the sort of Bill that should be put to a free vote. I agree with that idea and I do not see a danger in doing that. The Government needs to loosen its grip on this Chamber, particularly in areas such as this where we agree with so much. I am a member of the Committee of Public Accounts and I very much support the thrust of this Bill. The committee investigates the spending of public money. That is its role, namely, to ascertain where that money is spent and if we are getting value for money on behalf of the taxpayers. Yet, when it comes to local authorities our role in that respect ends. That is not acceptable because it is public money, taxpayers' money. We as a public accounts committee should have the ability to see how that money is being spent.

A central element of Deputy McGuinness's Bill is section 2, which introduces a new section 5A, and I support that principle. Every year €5 billion of taxpayers' money goes form central government funding to local authorities and we cannot follow it. That is frustrating. One of the frustrating experiences I have had in the Dáil since I was elected was when I, together with other members of the Committee of Public Accounts, were investigating the spend of money on the Poolbeg incinerator. The Secretary General of the Department of the Environment, Community and Local Government came before the committee and Deputy McGuinness and I questioned her on how the money to date has been spent. It is more than €80 million and still nothing has been built. When we went through the rough breakdown we received from the Department - this was supplied to me by Councillor Paddy McCartan - we saw that the spend for client representative services was just under €26 million, for a category "other consultancy" it was just over €3 million, for legal fees it was just under €2 million, and for public relations it was just over €4 million. What has that money been spent on? What is the "other consultancy" on which €3.3 million was spent? What are the client representative services, at a cost of just under €26 million, and the public relations, at a cost of just over €4 million, for something that has not even been built? When we quizzed the Secretary General on how that money had been spent we got no answers.

A total of €43.7 million has been spent on land acquisition for the project and we heard that the compulsory purchase orders that were done in 2010 were put at 2007 prices. That is ridiculous and yet we still cannot investigate how that money was spent, why it was spent and whether we got value for money. As many people know, and as Deputy Kevin Humphreys and myself, who come from the constituency in which it was proposed to build this project, are aware, we are not getting value for money here but, more importantly, the Committee of Public Accounts cannot establish that. We have been told we will get a further breakdown of these figures but only after the final decision on this project has been made. That basically means when it is too late to determine this is bad money being spent on a bad project and when it is too late to stop further money being spent on what would be a failure and a catastrophe for the Dublin region and for the country. That is not acceptable.

We need to give the Committee of Public Accounts and the Comptroller and Auditor General more resources in order that we can investigate the spend of money on local authorities. If we are to give the Comptroller and Auditor General greater powers, we need to give that office greater resources. It has come up time and again on the Committee of Public Accounts that the Comptroller and Auditor General does not have sufficient resources to do its job, nor does the committee or us as Deputies.

People expect more from us as elected representatives. They expect more from their Dáil, committees and Government. We are in a time of crisis. We have much more work to do but we are doing it at a time when our resources and the money we can spend and the people we have working in government are reduced. That is creating difficulties and we are encountering those difficulties on a weekly basis at the Committee of Public Accounts. We need to make savings, there are huge savings to be made particularly in this House but are we making the correct savings? I am not sure that we are. Some of that needs to be looked at again in much more detail. We are spreading our resources too thin.

To take the example of Friday sittings, people complained that we were not sitting and doing enough and we decided that we would sit one extra day a month and now they are complaining that it costs too much. The Government needs to be above that kind of rubbish. I have had two Bills published and we have not had a chance to debate them because we only sit one Friday a month and only discuss one Bill. That needs to change as well. There is no reason we could not debate three Bills today. The Houses are open, people are working and the lights and heating are on. We could be in here doing much more work and being much more efficient in the use of the time we have here. That needs to change. I urge the Minister of State to discuss with her colleagues in Government and in Cabinet how we can further progress the reforms that have already been brought in by the Government. I welcome them but we need to go further. We need more reforms, to make ourselves more efficient and enable the new Deputies to do a better job. We were elected at a time of change and people expect more of us. We want to do more, yet we find it frustrating because there is not the time provided and there are not the required resources.

I very much welcome section 5. One suspects that certain Departments believe that if they simply ignore the members of the Committee of Public Accounts, we will go away, but we will not. Last October it was revealed that there is a €3.6 billion accounting error in the Department of Finance and the Committee of Public Accounts investigated it. We were promised two reports. We are now drawing towards the end of May and we have seen nothing. We need to introduce a measure in legislation that would see that not only are the Secretaries General of the various Departments compelled to report to the Committee of Public Accounts but that when it writes to a Department that its request is treated with the utmost importance and that the Department gets back to the committee, not in three or four months but ideally within a week or two and, if not, that it does so no later than 30 days. That is an important principle and I welcome that part of the Bill.

I commend Deputy McGuinness on bringing this Bill to the House. We have done a great deal of work to date on the Committee of Public Accounts and we have more to do. All we are asking for is the ability to do further work in the public interest, to ensure that the taxpayers' money that is being spent by the local authorities is being spent correctly and that we are getting value for money. That is not too much to ask. The Minister, Deputy Hogan, wants to bring in further reforms in this area and I welcome them but, unfortunately, I will not be supporting this Bill.

Deputy Kevin Humphreys

I commend Deputy John McGuinness on the time and effort he has clearly put into formulating this legislation. It has provided a welcome opportunity to debate several important issues in the area of local government reform. Deputies Eoghan Murphy, Thomas Pringle and Mattie McGrath, in particular, raised issues regarding accountability at local government level and the powers of city and county managers. Deputy Eoghan Murphy referred to the €81 million expenditure associated with the development at Poolbeg. I listened with interest when the Secretary General attended a meeting of the Committee of Public Accounts to address this issue and was struck by the weakness of the response in that regard.

I was first elected as a city councillor in 1999. Deputy Mattie McGrath spoke about a resistance to involving councillors in the budgetary process. It has been my experience, however, that in many cases, local councillors do not exercise the powers at their disposal, the agreement of the budget being one of the most significant of these. This notion of officials elbowing elected councillors out of the way is quite disturbing and I would be concerned that councillors should allow that to happen. Agreeing the budget and holding management and officials to account is one of the fundamental functions of local authority members. If we want more accountability in respect of the €4.5 billion that is spent every year at local government level, we must empower councillors to make their contribution and to hold management to account for decisions made. Councillors often tell me that one of the greatest frustrations of their role arises from the legislative stipulation that while they may be members of the local audit committee, it is not open to them to assume the role of chairperson and thus steer the direction of the committee's investigations. Money is being spent every week and month on the Poolbeg Peninsula project, for instance, and the local council has no power to call a halt.

We must review the powers assigned to management, enhance the powers of local councillors and ensure city and county managers are accountable and answerable in the same manner as chief executive officers. With that end in view, I urge the Minister to speed up the process of local government reform, part of which should involve an enhancement of councillors' existing powers to hold management to account for every euro that is spent. That would help to prevent a recurrence of events such as those in Donegal to which Deputy Pringle referred. It is a cause for concern that only one councillor in that instance articulated how much money was being spent on consultants to examine the reorganisation of management. One wonders what the other councillors were doing. Each role in government, both locally and nationally, brings with it particular responsibilities. We in this House must ensure that local authority members have the power to exercise their responsibilities effectively by holding management to account.

As a Government Deputy I do not propose to support the Bill, but I thank Deputy McGuinness for bringing it to the House. I take this opportunity to clarify that I do not undervalue these Friday sittings. In fact, I have attended every such sitting and have contributed to the debate on every proposal that was put forward. We have dealt with some excellent Bills, the current proposal being another such. The direction and ideas contained therein must be taken on board and worked back into the system. I ask the Minister of State to take on board the sound ideas contained in the Bill with a view to progressing them.

Minister of State at the Department of the Environment, Community and Local Government (Deputy Jan O’Sullivan)

I reiterate my thanks to Deputy John McGuinness for bringing this Bill before the House and to all of the Deputies who contributed to the debate. It has been a very useful discussion featuring good ideas from all sides of the House. We have seen a general agreement on the need to achieve better accountability, transparency and value for money with regard to the expenditure of public funds across the system. Nobody in this House would be opposed to that. My rejecting Deputy McGuinness's Bill is not a case of rejection for rejections's sake. I take this opportunity to articulate my support, as Deputy Kevin Humphreys did, for the Friday sittings. I have been a Member of this House since 1998, most of that time in opposition and, in common with colleagues, found it very difficult to have a Private Members' Bill discussed in any way. I was, in fact, fortunate to have a Private Members' Bill accepted by a Minister - a Fianna Fáil Minister in this instance - but that was a very rare occurrence. The arrangements instituted by this Government enhance the potential contribution of all Members.

The fundamental difficulty with the Bill before us today is that it proposes a duplication of the audit process for local government services. This is not a fault that can be tweaked on Committee Stage. As I said in my opening statement, the Government's objective is to achieve overall reform of local government, part of which is a consideration of the possible merger of the Office of the Comptroller and Auditor General and the local government audit system. If that is done, it will achieve, at least to some extent, the substance of what the Deputy is proposing in this Bill. I am concerned by the view put forward in the debate today that local councillors cannot effectively scrutinise, as alluded to by Deputy Kevin Humphreys. Some Members seem to be of the opinion that if something is not scrutinised by the Committee of Public Accounts, there can be no democratic scrutiny of what happens in local government. That is a very disturbing view. Local councillors certainly must be given the power and resources to undertake proper scrutiny at local level. As Deputy Eoghan Murphy observed, the Minister, Deputy Phil Hogan, has indicated his intention to bring forward recommendations on local government reform very soon.

Several Deputies referred to the role of local audit committees, which add real value to corporate governance at local government. Each committee normally comprises five members, three of them, including the chairperson, external members, plus two councillors. The committees carry out their functions under a formal charter and are approved by the members. They also prepare annual reports of their work for consideration by the full council. Their oversight functions are to review the council's financial and budgetary reporting practices and procedures; foster the development of best practice in the internal audit function, including approval of the annual internal audit work plan and the monitoring of its delivery; request special reports for internal audit as considered appropriate; review local government auditors' reports and monitor follow-up actions; assess and promote value for money and efficiency; and consider whether processes are in place to manage risk effectively in accordance with organisational guidelines and business plans. In line with best corporate governance procedures, the local government auditor attends audit committee meetings in order to present his or her audit report and clarify any matters arising from it. The committees have contributed significantly to ensuring that issues raised by the auditor are addressed by the authorities.

As I said, I am quite disturbed by some of the contributions today, including those of Deputies Mattie McGrath and Pringle, suggesting that local councillors cannot question the manager or raise these types of issues. There is something wrong with our local democracy if that is the case and it must be addressed. As a relatively small country, one might argue that the Committee of Public Accounts could include the scrutiny of local authorities in its work, which is the central tenet of Deputy McGuinness's proposal. However, in larger countries a great deal more of this type of work is done very effectively at local and regional level. This is something that we as public representatives and, in many cases, former members of local authorities would seek to achieve. There is a significant amount of work to be done in that regard.

This has been a useful debate and important issues have been raised which require address. I am sure Deputy McGuinness would have wished for the Government to accept his Bill but, as I explained, there is duplication in the course recommended therein. I reiterate the Government's intention to pursue a reform agenda, the central tenets of which are value for money, transparency and accountability.

Moreover, such an agenda would ensure, particularly given the State's present finances, that no money goes astray but is spent wisely and that such expenditure is scrutinised at all levels of government.

Deputy John McGuinness

First, I thank all contributors, regardless of whether they spoke in favour of the Bill or against it. Such an exchange is healthy and often can result in a better Bill being decided on by the House. I am not disappointed for myself that the Government has not accepted this Bill. I am disappointed for the members of the Committee of Public Accounts, who repeatedly have expressed their interest in, and support for, achieving what is proposed in this Bill, not in their own interest but in that of good governance. This is what they sought as they simply wished to do their job by extending the committee's remit to cover local government audit and so on. They wished to ask the Minister whether he would insist that Accounting Officers be obliged to respond to the committee's requests, letters, correspondence or queries within 30 days. They simply asked that an annual report be debated by this House in order that each Accounting Officer and each citizen could be reminded on a yearly basis that the Committee of Public Accounts was doing its best on behalf of the people it represents and was determined to achieve value for money in every respect of the expenditure of the State.

The taxes collected from citizens are hard-earned but Members do not appear to have the bottle to ensure they are spent correctly in the interest of the people they serve. This is the disappointing part of this outcome as while I am not being party-political about this issue, the Government promised this would happen. Moreover, the words spoken by the Minister of State were not really her own. I know her and that speech was not her own. In response, I note there is no attempt to duplicate work. A total of 140 professional people are employed in the Office of the Comptroller and Auditor General, while 40 are employed in local government. Were this scenario to obtain within a public limited company, the offices would be amalgamated immediately to bring about greater efficiency and a central effort to the work they were doing. This is what Ireland is doing outside the walls of Leinster House, where all businesses are downsizing and getting value for money for themselves. Although they all are doing so, the State believes, on taxpayers' money, it can simply continue with business as usual.

Deputy Jan O’Sullivan

That is not true and is not what I said.

Deputy John McGuinness

However, it cannot be like this in respect of the public accounts. The Minister of State has heard examples today of other councillors' views as to what goes on. I am not critical of councillors and served as one for 25 years. In addition, my father spent 50 years before me and with me on that council and I shared 25 of those years with him. I am familiar with local government but rarely have seen a county manager being held to account. This is not because county councillors are unable to so do but because time and effort must go into it. This is similar to the time and effort I put into this Bill. I considered what the Opposition members of the Committee of Public Accounts and others in this House had to say about these issues. I listened to their frustration and sometimes their anger regarding questions that were avoided by Accounting Officers or in respect of how the latter would talk down the clock or submit promised replies either too late or which meant nothing to the issue in question, as a device to gain further time in the hope the issue would be forgotten about. This is what the Committee of Public Accounts is dealing with.

However, despite the non-acceptance of this Bill, I pledge to this House and to the members of the Committee of Public Accounts that I will continue to do my utmost with each Accounting Officer who comes before the committee to ensure that value for money is achieved and that the committee really does act as a watchdog for the taxpayer. I give that commitment. I also refer to the request by the Minister for Public Expenditure and Reform, Deputy Howlin, to talk again about it. I have spoken to the Accounting Officer from Deputy Howlin's Department and to Deputy Howlin himself. He knows my views on a wide range of issues and I am no longer interested in talking about it but am interested in action that must be taken. This is not for John McGuinness - I note my name is peppered through the contributions made today - as this is not about me. This is about governance and public accounts and Members are not doing their business properly by a long shot. I refer to the €5 billion that Members mentioned, which constitutes €5 billion of taxpayers' money that goes into public accounts, having been directly voted from this House, but which Members cannot follow. I reiterate the point that in 2007, some €5.5 billion went to local government. How many value for money audit reports were conducted on the collective expenditure of that amount of money? The answer is one. In 2008, some€5.7 billion was spent without any value for money audits being carried out. In 2009, some €5.25 billion was spent and a single value for money report was carried out. The Comptroller and Auditor General has stated repeatedly that office should at least be allowed to follow the money. For example, that office should be allowed to follow the €81 million spent on the Poolbeg project, about which the Committee of Public Accounts received no answers or clarifications. Out of concern for taxpayers' money and the effort made by the members of the committee, I asked the Accounting Officer in question to ensure she would ask the local government audit team to investigate the aforementioned €81 million and then to report to the Committee of Public Accounts. I was told she would be obliged to ask for such a report for herself in the first instance, after which it would be at her discretion to make it available to the Comptroller and Auditor General and thereafter to the Committee of Public Accounts. Where is accountability or democracy in this instance? Where is the interest in the citizen in this regard? It simply is not there and this constitutes business as usual, perhaps not for the Minister of State, but certainly for the civil servants and the Accounting Officers who I meet.

This can no longer be tolerated because there is too much waste and inefficiency. Both this Administration and its predecessor, in which my party participated and I do not make any distinction between them, have asked the hard-pressed taxpayer to pay more stealth taxes to support local government. Members simply refuse to consider the efficiency of expenditure within local government to ascertain whether savings could be achieved there first, before putting the boot in to those they represent. This no longer is good enough because one is told everyone must do more for less. I will sign up to that but I ask everyone within the service here to sign up to it because what is happening is appalling and no longer is acceptable.

I commend Deputy Eoghan Murphy on his contribution. He is one of the newer members on the Committee of Public Accounts who diligently goes through his work each week. He presents, out of his own sweat, his own approach to questions and his own analysis of the expenditure. He shows neither fear nor favour to those who he questions, because he is working in the interests of the taxpayer. His contribution this morning was accurate and non-party political. I suggested there should be a free vote in this House on this issue because it is not about politics but about the expenditure of taxpayers' money and about Members acting properly as watchdogs for the taxpayer. I urge Deputy Eoghan Murphy and the other newer and younger members of that committee not to be disappointed by the non-acceptance of this Bill. They should not be frustrated or angered by it because, as I wrote in my book of the same title, the House always wins. However, neither should they be put off by it and they should approach in a determined fashion the reform that is necessary in this House and on the aforementioned committee. They represent a new generation of politicians in this House. Deputy Murphy and the others represent an electorate that looks in on this House with cynicism and unless he continues the reform programme he outlined this morning, such cynicism simply will grow and Members will lose respect. Much of this weighs on the Deputy's shoulders but I believe he has the ability to make such a contribution and hope he will continue with this work. Deputy Eoghan Murphy is a member of the Fine Gael Party but that does not mean he is in a Fine Gael straitjacket. The party will benefit from his type of thinking, as will the system and the electorate. I commend him on his contribution to this debate and urge him to continue his participation in it.

The €3.6 billion fiasco was mentioned in the context of the audit of local government. Had the Comptroller and Auditor General had auditing powers in this area, that fiasco would not have occurred. The Department of Finance stated last October that it would undertake two reports in this regard, for which we are still waiting. The response of the Central Statistics Office on this matter, which was provided at no cost and was reasonable and accurate, would have been acceptable to the Committee of Public Accounts yet the Department of Finance is paying consultants to report on it. When will common sense be applied to the system, which is frustrating everybody?

As regards Friday sittings, I have been in the House on a couple of occasions during Friday sittings, in respect of which the Secretary General of the Houses of the Oireachtas Commission, Mr. Kieran Coughlan, gave a report to the Committee of Public Accounts. A great deal of effort went into preparing this Bill, as did a great deal of consideration in terms of other Members. The reform being proposed by me and others like me is not about the here and now rather it is about preparing the way for a new style of politics and a new way of managing our affairs. If we do this, we will get people's respect.

I believe in debate in this House. I also believe that there should be a far more extensive use of Friday sittings. Seven Members spoke this morning on this Bill, which addresses an important issue for this country. As I understand it, the cost of a Friday sitting is €90,000. What an appalling waste of money. We need to ensure proper consideration of Bills during Friday sittings. With no fear from the Government side, this Bill could have been sent to a committee to be dealt with. It is not duplication. Much of what the Minister of State, Deputy O'Sullivan, said in her speech is the view of a senior civil servant. It was not a political answer but a glossing over of what is a serious problem in terms of our public accounts and our approach in this regard.

Deputy Jan O’Sullivan

I was speaking on behalf of the Government.

Deputy John McGuinness

That this Bill has been refused further consideration, says so much about this House, which I deeply regret.

Question put.

An Ceann Comhairle

In accordance with the Order of the Dáil yesterday, the division is postponed until immediately after the Order of Business on Tuesday next, 15 May 2012.

The Dáil adjourned at 12.15 p.m. until 2 p.m. on Tuesday, 15 May 2012.