I welcome this Bill. As we all know, the Houses of the Oireachtas and, in particular the Dáil, have clear responsibilities under the Constitution which both Houses jointly exercise on behalf of the people of Ireland. Constitutional responsibilities include the making and breaking of Government, making Government behave, making law, making treaties for war and peace and, most important, for the public purse. It would not be an overstatement to say that both Houses fulfil their constitutional responsibilities precariously. It would also be no exaggeration to say that the responsibility with regard to the control of the public purse is ignored.
This Bill is one of the most important pieces of legislation we will deal with this term. One of the most important constitutional functions with which this Bill deals is the way this nation, the Houses of the Oireachtas and, more particularly, the Dáil which has prime responsibility for finance, controls the public purse. It is extraordinary that as the original legislation was passed before the foundation of the State, it has taken so long to do what this Bill has done. Therefore, the Bill is welcome.
Volumes could be written about how poorly the nation's financial management and overseeing functions are performed. The brucellosis and the TB eradication schemes are only the tip of the iceberg. If one reads the reports of the Comptroller and Auditor General over the years, one will find many more tips of icebergs. These are only the pinnacle of huge ice mountains which float by unnoticed under the morass of public expenditure.
The Minister said this is an important Bill because it expands the powers of an important office. We endorse that view. It is a valuable move forward and I welcome and support it. However, I believe there are other areas which require attention.
The measures in this Bill will need to be bolstered in the public accounting system and in the way this House and the Dáil operate. Reforms are needed, particularly in the way public expenditure is accounted for and in the way the Dáil and the Seanad oversee that expenditure. It is worth reminding ourselves of the present arrangements. At present, the Appropriation Accounts are returned to the Comptroller and Auditor General in the spring of every year. They account for billions of pounds of public expenditure, which is dealt with by thousands of bodies and by hundreds of thousands of public servants. It is an extraordinary task for the Comptroller and Auditor General's Office to undertake each spring. The Comptroller and Auditor General and his staff examine these accounts and report their findings in October, when a parliamentary organ — the Committee of Public Accounts — meets.
I endorse the comments made by Senator Enright. The Committee of Public Accounts has come a long way in recent years. I do not think there has been enough public recognition of how it has progressed under the chairmanship of Deputy G. Mitchell in recent times and a number of his immediate predecessors. There were brave and courageous attempts to extend the role of the Comptroller and Auditor General which the media did not always acknowledge, recognise or even support. I will refer to two of those occasions in a moment.
The Committee of Public Accounts consists of 12 Members of the Dáil who spend the months of November and December overseeing or examining the accounts, with the assistance of the Comptroller and Auditor General and with the benefit of the Comptroller and Auditor General's examination. The audit of the public accounts is only scratching the surface, in spite of the enthusiasm and energy which is put into that task both by the Comptroller and Auditor General and by the Committee of Public Accounts. It does not even scratch the veneer because public expenditure has become so complex, so universal, so extraordinarily multi-faceted that it is a virtually insuperable challenge for any individual group of public servants or small individual committee of the Oireachtas to oversee what has been done. Extraordinarily challenges, hurdles and obstacles have been put in the way of the Committee of Public Accounts and the Comptroller and Auditor General, to hinder them in the performance of their tasks.
Historically, the Comptroller and Auditor General, with the assistance of the Accounting Officer, sought to ensure that there had been numerical accuracy in the accounts and that the money had been spent for the purposes for which it had been allocated by the Dáil. There were no examples of deliberate and specific fraud or of money having been removed. Also the Comptroller and Auditor General ensured that money was spent for the appropriate accounting period. Efficiency and effectiveness were only introduced in recent times and only because Comptrollers and Auditors Gerneral took it upon themselves to expand their role. They did so without any legislative support from either House. This is to the shame of both Houses, in particular the Dáil.
The Comptroller and Auditor General's role has been expanded in recent years because public servants have been willing to expand their role and they have done this without any specific guidance. This Bill is welcome because it seeks to provide guidance and a little legislative clarity where previously there was none. For example, for the first time the Bill gives statutory effect in the audit to economy, efficiency and effectiveness. It is extraordinary that a State which receives and spends a large proportion of every individual's earnings has not, until recently, been overly concerned with economy, efficiency or effectiveness. It is even more extraordinary that it was not until 1993, almost 75 years since the foundation of the State, that we decided to deal with economy, efficiency and effectiveness on a statutory basis.
However, to fully implement the Bill's proposals it will be necessary to do more than give the Comptroller and Auditor General a statutory role with regard to efficiency, economy and effectiveness. That statutory role must be supported by a radical and dramatic change in our public accounting system.
The Minister knows—she and I laboured in the musty confines of the Department of Finance — that the public accounting system is a farce. No chip shop in the land is as badly run from an accountancy point of view as Ireland Incorporated. A colleague in UCD often refers to the present accounting system as shoebox accounting. It is based on a historical year and has a one year perspective. In recent years the Department of Finance introduced multi-annual programming. However, the statutory basis of our accounting system is historical, non-accrual accounting which went out with the ark. I doubt if Noah and his team would have had a more inept management system in operation at accountancy level than Ireland Incorporated because, if they had, they would never have found their way to Mount Aravat.
It is bizarre that we have no method of totting-up programmes and that we are still operating a nineteenth century Victorian accountancy model. It will be necessary, if this Bill is to be effective and the Comptroller and Auditor General's Office is to have the impact we wish, to look at the Victorian accounting system. Victorian notions and the concept of an annual budget will have to be dispelled. It is farcical for the Minister for Finance to tell us, over a period of three to four hours, about financial auguries for the year ahead. All public accounting programmes are multi-annual and they work on an accrual basis. The nonsensical British Victorian model of public accountancy — which the British have done away with — should not be in operation. We need to support and augment the worthwhile provisions contained in this Bill by introducing an accounting system which approximates to the cost accounting systems operating in business.
Given recent publicity Irish business is hardly a model of financial propriety or accountability. However, modern business accounting systems have a lot to offer the public service and public administration. We need to augment the provisions of the Bill in that area.
I want to refer to a number of specific elements contained in the Bill. The proposition is that non-commercial State-sponsored bodies are to be brought within the remit of the Comptroller and Auditor General but commercial State-sponsored bodies will remain outside his remit. This interests me both academically and personally because of my role as a public servant for many years. If we think about it and put other changes into operation the balance is probably right. I welcome the idea that non-commercial State-sponsored bodies are being brought within the remit of the Comptroller and Auditor General. It is astonishing what non-commercial State-sponsored bodies have got away with over the last 50 to 70 years. It is bizarre. They have operated without any of the control mechanisms which apply to the Civil Service and local government because they were deliberately set up to avoid such control mechanisms.
Non-commercial State-sponsored bodies were not overseen by the democratically elected local representatives. In effect, they were cut free as budget based organisations and were actively encouraged to spend their budget. No effective or efficient criteria were established and it was of no benefit to management in a non-commercial State-sponsored body to ensure economy. It is important that the scandal of non-accountability existing in non-commercial State-sponsored bodies is brought to an end. This Bill does that and I welcome this move forward. It is bizarre that the Houses of the Oireachtas have never bothered to address the issue of non-accountability of non-commercial State-sponsored bodies. Fifteen years ago when the Committee of State-sponsored Bodies was set-up it focused entirely on commercial State-sponsored bodies which had the benefit of a market mechanism to show if they were efficient or inefficient but the non-commercial State-sponsored bodies were excluded. This exclusion has continued despite the fact that I and my predecessors, as Chairman of the Oireachtas Joint Committee on Commercial State-sponsored Bodies, asked that this issue be reviewed.
The Bill introduces inspection and I endorse this important move. We need to open public institutions, not just from the point of view of democratic control but from the point of view of overall management control. We must convince the people that public institutions are being run economically, efficiently, effectively and for the benefit of the people who pay for them rather than for the benefit of a minority who work in them. In an article I wrote in 1981 about the idea of an Ombudsman, I mentioned the need for inspection. The introduction of statutory inspection is welcome and is a dramatic move forward.
I suggest to the Minister that we should look further into the area of inspection. Inspection needs to be expanded to local government. Power of inspection should flow not only to the Comptroller and Auditor General but to the Committee of Public Accounts. I realise that this will be dealt with in the other House by way of motion when the terms of reference of the Committee of Public Accounts are being reviewed. However, it is appropriate to comment on this issue now.
Some years ago when the Committee of Public Accounts travelled to Merrion Road to inspect premises which had been rented for many years by the then Department of Posts and Telegraphs, they were met on the doorstep by the chief executive officer of Telecom Éireann, who had been occupying the premises, and were refused admission. I recall wearing an academic hat on a RTE programme that day and saying that in no democracy would a committee of the Houses of Parliament be turned away. The extraordinary thing was that every commentator in the land thought that it was fun to turn away a parliamentary committee and that these TDs were getting their come-uppance. Nobody seemed to realise that the Members were looking after our interests.
The concept of statutory inspection is a new and welcome move forward. Those involved in its implementation are to be complimented. I suggest that if the inspection is to be provided for the Comptroller and Auditor General on a statutory basis, we should ensure that committees of the Houses of the Oireachtas have powers of inspection.
There has been a dramatic change in the way the Committee of Public Accounts has fulfilled its responsibilities in recent years. This is largely due to the enthusiasm and energy of Deputy G. Mitchell, and a number of his immediate predecessors as chairman. They pushed out the boat and have expanded the role of the committee. Given the willingness of its Members to work long hours, it is extraordinary that the committee has not been adequately acknowledged.
I look forward to the revised terms of reference because under existing arrangements we accept the need for change, for example, the need to have the right to engage consultants, etc. It was amazing to hear during the last Dáil that the Committee of Public Accounts could not engage consultants. They need to have the right, as do all committees, to compel witness to attend meetings and give evidence. We have a constitutional problem in relation to subpoening witnesses to come before committees. This is an important point because the work of the Comptroller and Auditor General can only be taken one step further by the Committee of Public Accounts. If the hands of the Committee of Public Accounts are tied and if it, therefore, lacks power, a lot of the good work which could flow from this Bill will not be possible.
The committee must have equal powers to the High Court in relation to subpoening witnesses and it must receive an adequate budget. It is a farce that for a couple of days in Dublin Castle, the powdered gentry of the legal profession receive more funding than the operation of all the Oireachtas Committees for last year and the year before. That is not an exaggeration. We struggled last year with a budget of £40,000 in the Oireachtas Joint Committee on State-sponsored Bodies. As the Minister knows, it is difficult to buy a lot of consultancy time or accounting expertise for £40,000. Nevertheless, that particular committee, like the Committee of Public Accounts, was charged with the task of overseeing thousands of millions of pounds worth of assets and expenditure. Our powers were very restricted. We had no power to subpoena witnesses, no power to compel witnesses and we could list from here to eternity the number of occasions where witnesses refused to co-operate. Furthermore, we had no budget to perform our task.
There needs to be a change in attitude to both Houses to committees. It has become fashionable to talk of parliamentary reform. I suggest that parliamentary reform is a leaky vessel as it has recently been restructured and relaunched. It is not going to get very far because the parliamentary environment in which we operate is unique. The PR single transferable seat system means that it is not profitable politically for Members of both Houses, either those who aspire to break out of this Chamber and move to the other House or those in the other House who wish to stay there, to invest their time in committee work. I do not mean it is not financially profitable, because some inducements are currently being introduced in that respect. However, it is not politically profitable.
I admire members of the Committee of Public Accounts who have no particular career interest, academic or professional, in it, and yet give immense amounts of their time. They are not rewarded with praise or recognition. The reality is the committee system will only work if there is political reward for attendance.
Another aspect about the committee system urgently requires attention. This is the scandal whereby neither this House nor the other House pays any attention to the reports produced by the committees. Currently, for example, when the Committee of Public Accounts produces a report and makes comments on it, the comments are sent to the Minister for Finance. The Minister, by way of ministerial note, replies to the incoming committee the following year indicating the response of his Department or other Departments. There is no test in the Dáil as to whether the proposals contained in the report of the Committee of Public Accounts are implemented. In fact the Dáil very seldom discusses the reports of that committee.
If we are to introduce a committee system, and I am a supporter of such a system, it will have to be a part of continuing reforms that will start and end with electoral reform. A reform that will certainly have to be introduced is some form of compulsion to discuss the reports of the committees. I welcome the fact that there will be more time on Fridays for that activity.
Regarding the exclusion of local authorities, I can understand the division between the local authority accounts and the report of the Comptroller and Auditor General. However, I put it to the Minister that the black hole of Calcutta was a more enlightening place than the accounts of our local authorities. I have been a member of a local authority since the mid-1990s and I have never ceased to be amazed at the ingenuity with which these accounts are produced. The Minister has also been a member of a local authority and like me she knows that among the more impenetrable things produced in this or any other State, almost Kafkaesque in dimension, are the accounts and the estimates of the local authorities.
It is impossible to ascertain from local officials the cost of a local government project. If they do not want you to have the figure, you will not have the figure. Motions come before my local authority asking for the erection of traffic lights and we are told the cost of this will be £20,000. However, when the manager wants to do something of equal complexity the cost turns out to be £1,000. How have the figures shifted around thus? I do not know.
This point illustrates the need for inspection, which is one of the great tools that has been introduced in this Bill. There should be a system of inspection introduced in the local authorities system. I will break a confidence. I have spoken to the last three Ministers for the Environment and I have asked them to establish a team of auditors who can be on call to inspect the programme of any local authority on the grounds of efficiency, economy and effectiveness. Such a team would pay for itself tenfold in the first year.
There have been many occasions when, as a local authority member, and I have lectured for 15 years in local government finance, I have tried unsuccessfully to establish exactly the cost effectiveness of local authority programmes. Whether the inspection would be part of concomitant change in the local government audit, or whether it would happen under the aegis of the Comptroller and Auditor General would not matter so long as an inspection was introduced. Not only should this inspection force be established but it should be allowed to be called into place by motion of local authority members. That would give back some concept of local accountability.
Section 19 of the Bill provides for the first time a statutory basis for the performance by accounting officers of their duties when they are presenting evidence of the Committee of Public Accounts. There has been no statutory arrangement governing this, and I welcome this provision specifically because of my own experience over the last couple of years in the Oireachtas Joint Committee on State-Sponsored Bodies. I want to consider this in conjunction with statements made by Senator Enright regarding the exclusion of State-Sponsored bodies by giving the House an example of how deficient the present system is.
At present there are no guidelines on witnesses appearing before the joint committees of both Houses and the Committee of Public Accounts. There have been many extraordinary examples of committees getting the two fingers from public servants. Senator Enright refers specifically to the Greencore issue. I believe that if the Oireachtas Joint Committee on State-Sponsored Bodies had got an ounce of co-operation, as opposed to a huge amount of interference, from the then chief executive of the Sugar Company in 1989, when we were conducting an examination of the affairs of that company, then what became known as the Greencore scandal would have been public knowledge much earlier. I have believed since that time that there was a deliberate effort, which was successful, to sabotage the efforts of the then Chairman of the Oireachtas Joint Committee on State-Sponsored Bodies to ensure that the committee was deflected from the examination of the affairs of the Sugar Company. I wrote letters as Chairman of the Oireachtas Joint Committee on Commercial State-Sponsored Bodies to each member of the board of the Sugar Company. Mr. Comerford destroyed all those letters and the Oireachtas Joint Committee on Commercial State-Sponsored Bodies had no power to deal with him.
It is a matter of public record, in the Houses of the Oireachtas that when we finally browbeat the Sugar Company into representing itself before the committee we were met by Mr. Tully, Mr. Comerford and Mr. Cahill and, to say the least, they would not have won any medals for co-operation.
Furthermore, charges which were made against my predecessor, Deputy Lawlor, led to his resigning his chairmanship of that committee and the information on which those charges were proved to be erroneously based emanated from the Sugar Company. This indicates something seriously wrong in the way public servants perform before Oireachtas committees. All of these issues were the subject of a special report by the Oireachtas Joint Committee on Commercial State-Sponsored Bodies. It is extraordinary that that report was never examined in either House. Some years later the Greencore issue burst upon the scene. This might be seen as a good argument for bringing in State-sponsored bodies under the scrutiny of the Comptroller and Auditor General.
I am not impressed by the way commercial auditors have operated in the case of commercial State-sponsored bodies. I have seen over the years some quite extraordinary examples of failures by these commercial auditors. They are not answerable to anybody and may be appointed on the basis that they play golf with the chairman of the board of the State-sponsored body or in some other way that is hidden from us ordinary mortals. We do not know how or why they are appointed and there are myriad examples of their failure. This whole process needs to be tightened up. I understand why the Bill has not taken the step of bringing the commercial State-sponsored bodies under the control of the Comptroller and Auditor General. I would suggest that we strictly monitor the way the commercial auditors operate. They are not giving value for taxpayers' money.
Senator Enright spoke about the Aer Lingus Holidays issue. For a year and a half the Oireachtas Joint Committee on Commercial State-Sponsored Bodies wished to look into that matter but was completely impotent. It had no power to pursue the matter once it could be declared sub judice. Both Houses need to look closely at the way they operate the sub judice ruling and how that contains Members.
The issue of the commercial State-sponsored bodies, their accountability and the way we examine their performance requires urgent review. If the House is serious about parliamentary reform it might consider the report of the sixth Oireachtas Joint Committee on Commercial State-Sponsored Bodies examining how the role of that committee could be expanded to allow it to perform more efficiently.
There has been a whole series of scandals in the State-sponsored bodies over the years, for example, the Irish Shipping scandal—there is no other way to describe it. That company had operated profitably virtually from the end of the war. The employees of that company worked hard and performed well. The company went down not due to any failure on behalf of the ordinary workers, but as a result of a catastrophic failure of management. The tragedy in that case— I might be in agreement with Senator Enright—was that nobody knew until it was too late that Irish Shipping was sunk. Had there been a proper, efficient management service and a proper system of control and inspection in operation, that need not have happened. Yet it did happen and there were commercial auditors in that company who knew what was happening. This débâcle did not happen overnight but over a period of 12 to 18 months. Something could and should have been done. Had there been an efficient management system—I mean a supervision system—it would not have happened. The question of how commercial auditors perform in the State-sponsored bodies needs to be looked at. Greencore and Telecom Éireann, among others, are unedifying examples of failure.
I had better end on a positive note or everyone will look carefully at their PAYE deductions and think that more of their money is going down the drain. I accept it is not possible to resolve all problems at once. Government has become so complex and multifaceted and it cannot solve all our problems at once. This Bill is an honest effort to solve some serious problems and I commend it. I look forward to Committee Stage debate.
I wish the Minister of State well. She is an old colleague from the Department of Finance. The Minister of State understands from the inside—we are both poachers turned gamekeepers—the inefficiencies of the system. The Minister of State, probably worked in public expenditure division for longer than I did, so she has even more first hand experience of the inefficiencies of the system of managing our public expenditure programmes.
The Department of Finance has made good efforts—I have to say this because one never knows when one might have to fall back on them—over the past few years to move forward and modernise, for example, the programme budgets. This change is a good example but more needs to be done. Work needs to be done in the Houses of the Oireachtas to complement the provisions of this Bill. I wish the Minister and the Bill well.
