30 Samh 2012, 12:11
Budget estimates and targets should be examined by Oireachtas Committees on a quarterly basis rather than at year-end, according the Committee on Finance and Public Expenditure.
30 November 2012
The Committee is writing to the Minister for Public Expenditure and Reform Brendan Howlin, TD setting out a proposal to change the current system where estimates, budgets and accounts are reviewed on a once-off basis near the end of the year.
Ciarán Lynch, TD, Chairman of the Committee on Finance, Public Expenditure and Reform, said: “In areas where there is control over expenditure and specific targets are set, rather than estimates being examined at year-end, these instead should be considered on a quarterly basis by the Committee on Finance, Public Expenditure and Reform to examine if these targets are being met. In the private sector there would be a monthly, a quarterly and a half yearly examination of expenditure against the estimate and any deviation must be explained by budget holders so action can be taken. In terms of Oireachtas oversight, a similar procedure should adopted with the expenditure against the voted estimate considered every three months.
“The problem with the current system is that cost over-runs or failures to make savings often only become apparent in the final quarter, leading to some departments seeking extra financing or having to make larger savings or a ‘balloon’ saving in the final months or weeks of the year to meet targets.
“At our Committee meeting this week, I used a simple example to illustrate this problem. A saving of €10 a week has to be made over a 52 week period – if that hasn’t been done after quarter one, two or three, then, what happens is that we end up with a €40 saving that has to be made every week in the final quarter to reach the target. Such an approach causes difficulties, ultimately impacting upon Departments which have managed their spending within budget.
“Instead, if the expenditure against the estimate is examined on a quarterly basis, we can see if they are on target earlier in the cycle and, if they are not, we can ascertain the reasons behind any slippage. In some cases, the saving that is being envisaged may not be realisable and it is better to know this in the first or second quarter, so that a different approach may be considered. In other situations, the adjustment in the estimates is not being achieved because it is not being managed properly. Again, if this is the case, it is better to establish this after the first or second quarter and the committee could bring in the relevant managers to explain why this has been allowed to happen.
Reviewing expenditure against estimates on a quarterly basis would introduce a certain fiscal discipline into the management of national accounts and allow smaller adjustments to be made earlier in the cycle rather than in a large adjustment at year-end. We hope that the Minister will give the Committee’s proposal due consideration.”
For further information please contact:
Paul Hand,
Houses of the Oireachtas,
Communications Unit,
Leinster House,
Dublin 2
P: +353 1 618 4484
M: +353 87 694 9926
Committee Membership
Deputies
Richard Boyd-Barrett, People Before Profit
Michael Creed, Fine Gael
Jim Daly, Fine Gael
Pearse Doherty, Sinn Fein
Stephen Donnelly, Independent
Sean Fleming, Fianna Fáil
Joe Higgins, Socialist Party
Heather Humphreys, Fine Gael
Kevin Humphreys, Labour Party
Peter Mathews, Fine Gael
Mary Lou McDonald, Sinn Fein
Ciarán Lynch, Labour Party (Chairman)
Michael McGrath, Fianna Fáil
Michael McNamara, Labour Party
Dara Murphy, Fine Gael
Timmy Dooley, Fianna Fáil
Kieran O’Donnell, Fine Gael
Arthur Spring, Labour Party
Brian Stanley, Sinn Féin
Billy Timmins, Fine Gael
Liam Twomey, Fine Gael
Senators
Sean D Barrett
Thomas Byrne
Paul Coghlan
Michael D’Arcy
Aideen Hayden
Tom Sheahan