John O'Mahony (Mayo, Fine Gael)
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Question 71: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if she is satisfied that Enterprise Ireland and Shannon Development have not engaged in excess expenditure on advertising, foreign travel, events, corporate entertainment and that they are fully compliant with public procurement policies; and if she will make a statement on the matter. [45020/08]

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The Deputy will appreciate that I have no role or function in the day to day operations of Enterprise Ireland and Shannon Development. My Department has responsibility for ensuring that corporate governance procedures, systems of financial control and reporting relationships are in place within those organisations.

Both Enterprise Ireland and Shannon Development have confirmed that they operate in accordance with the framework code of best practice set out in the code of practice on the governance of State bodies. The code demands that boards "introduce controls to prevent fraud including adequate controls to ensure compliance with prescribed procedures in relation to claiming of expenses for business travel." Each year both agencies confirm in their annual reports that they are in compliance with that code. Additionally, I receive a separate report from their chairpersons affirming that they are in compliance with payment of expenses to the board.

I have been advised by Enterprise Ireland that it has taken steps to ensure an appropriate control environment is in place by establishing formal procedures through various committee functions to monitor the activities and safeguard the assets of the organisation, clearly defining and documenting management responsibilities and powers and developing a strong culture of accountability across all levels of the organisation.

Enterprise Ireland has an internal audit department that operates in accordance with the internal audit charter approved by the audit committee of the board. This committee meets on a quarterly basis to review reports prepared by internal audit and other departments. The audit committee reports regularly to the board on the matters that it has considered.

Enterprise Ireland observes the Department of Finance guidelines on public procurement. The organisation has a comprehensive purchasing procedures manual which ensures compliance with purchasing guidelines and legislation for both national and European tendering.

Enterprise Ireland's advertising spend relates exclusively to its public calls for proposals and publicising applications to its three national competitive funds for Irish enterprises.

Additional information not given on the floor of the House.

Shannon Development has confirmed to me that, on the basis of the systems and processes in place, all appropriate procedures for financial reporting, internal audit, procurement and asset disposals are being carried out by Shannon Development, that the company has not engaged in excess expenditure on advertising, foreign travel, events, and corporate entertainment and that the company is fully compliant with public procurement procedures.

With regard to foreign travel, I have been assured that both agencies comply with Department of Finance regulations. In addition, in the light of recent concerns in this regard, the Department of Finance's main guidelines on foreign travel have again been circulated to all agencies and they have been asked to confirm by 15 December that the guidelines are being complied with. The situation will be monitored under existing liaison arrangements between the Department and Shannon Development.

Leo Varadkar (Dublin West, Fine Gael)
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I look forward to reading the balance of the reply. The purpose of this question is to ensure that given the poor oversight of FÁS actions are being taken by Government to ensure we do not have similar activities in other agencies. I am happy to hear that work is being done in this regard. I am not aware of any waste or particular allegations with regard to these agencies but a cursory reading of their budgets shows one very obvious expense which is the extent to which all of these agencies have heavy staff costs and overheads. More than two thirds of Enterprise Ireland's budget goes on staff costs and overheads and less than one third is spent on grants to business. This is not to state there is impropriety or wrongdoing. Does the Minister of State share my concern that all of these agencies seem to have phenomenal costs with regard to overheads and staff relative to their core work which relates to support for business?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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With regard to Shannon Development the same applies. We receive reports and it is monitored.

Enterprise Ireland has 31 offices throughout the world so its activities must be taken into account with regard to its cost base and what value we get for it. With regard to missions abroad and what they achieve for business in Ireland I believe they give value for money in this context and I have quoted these figures previously, including €65 million in China and €25 million in Dubai. It must be measured against activities and its level of presence in other economies and throughout the world. In the context of public sector reform I am sure the numbers will be examined. My views on this are known and I will continue to express them and hope we will have an efficient and professional public service for the future.

Willie Penrose (Longford-Westmeath, Labour)
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Deputy Varadkar will probably agree with the Minister of State but I will not.

Leo Varadkar (Dublin West, Fine Gael)
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Deputy Penrose just wants to borrow another €2 billion. That would definitely work.

Billy Kelleher (Cork North Central, Fianna Fail)
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We are more flexible over here.

Arthur Morgan (Louth, Sinn Fein)
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These are all top-class questions today. They might as well have come from me.

Willie Penrose (Longford-Westmeath, Labour)
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There are now two socialists in the House.

Arthur Morgan (Louth, Sinn Fein)
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It is going in the right direction.

Willie Penrose (Longford-Westmeath, Labour)
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It is.

Arthur Morgan (Louth, Sinn Fein)
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The Minister of State's reply stated an audit committee is in place and it reports. This is great news. However, is the Minister of State satisfied it is fulfilling its function properly? Like Deputy Varadkar, I have no information that anything is wayward at Enterprise Ireland or certainly nothing remotely like what was going on at FÁS. Nevertheless while structures are in place it is important to know they report accurately and that the system in place is sound. Is the Minister of State aware this is the case?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I do not accept what the Deputy states. These organisations and Departments come before the Committee of Public Accounts and every year their accounts are examined.

Arthur Morgan (Louth, Sinn Fein)
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So did FÁS.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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It did not take that for this to happen. It has been happening and is happening in every State agency. Enterprise Ireland and Shannon Development have the same controls within their systems and have reported to my Department. I am answering the question before me on these organisations. I gave a reply on Shannon Development and Enterprise Ireland.

Arthur Morgan (Louth, Sinn Fein)
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I asked a supplementary question.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Enterprise Ireland has 1,151 activities abroad in more than 30 offices.

Leo Varadkar (Dublin West, Fine Gael)
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It is not the activity but the result that matters.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Whether there are controls within the organisations is reflected in the context of their annual reports and the audit procedure within the Committee of Public Accounts and the Comptroller and Auditor General.

Arthur Morgan (Louth, Sinn Fein)
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Is the Minister of State satisfied they are working well?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I am satisfied that I have received reports that they are working well.