John Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

Thank you, Chairman. Good afternoon, Dr. Walsh. I have a long initial question. I would ask you to bear with me, maybe. It concerns a number of quotations from the booklets that you would have been provided with. The first one is from Vol. 2, page 93, the KPMG report on review of the effectiveness of the internal audit function, "The existing internal audit function is not best practice ... In particular it lacks the depth of experience necessary to challenge the areas of key risk which include Treasury and Commercial Lending."

And then in Vol. 1, at page 163, I think, there is a letter from the regulator. It says that "the Society's internal audit department needs to build up its experience and training in order to perform reviews of key risk areas which are currently outsourced to a third party service provider." And then similar concerns are raised in a letter from the regulator in 2004. That is at Vol. 1, page 171, I think. The quote is, "The level of resources in this area are deemed to be inadequate ... The FSR has concerns with regard to the level of expertise and experience which exists in the IA function."

The Financial Regulator also expressed concerns in 2007 echoing, I suppose, their earlier expressed concerns. Can you explain how in this period, which stretches over exclusively - it's five years when you would have been the chairman of Irish Nationwide - that no apparent success at least appears to have occurred in addressing the issues that were raised by your external auditor, KPMG, and the Financial Regulator with regard to the internal audit function of the building society?