Joe O'Toole (Independent)

I welcome the Minister of State. It is the first time that we have faced each other in this House but we have dealt with one another in many other situations and I wish him well in the continuation of his Ministry.

Like everyone else, I welcome this legislation. Much fine work has been done in the background by the Minister of State's advisers. Many of the matters raised by the different groups I deal with have been touched on by Senator Keaveney and others. I do not wish to rehearse much of what has been said before but I want to state a few things for the record.

First, on a general basis, the issue of meeting a charity collector on the street must be considered. The simple view I have held all along is that when a person is collecting at street level, the requirement must be that we know exactly where our money is going. Many charities employ people to raise funds and in that situation only a small percentage gets to the objective. In other words, one hands over a euro and only 25 cent reaches the target charity. I recognise why this happens. There are administrative costs and all manner of other difficulties, but there is an easy way of dealing with this matter. Other groups go out collecting and every penny they get goes straight back into the charity with no one getting commission. I do not object to commission but I object to not knowing about it.

An easy way to manage the situation would be to have charity buckets or tickets bearing a figure that would range between zero and 100. That number would refer to the percentage of contribution that will go to the charity. The simple requirement is that the charity must indicate this percentage. This would be confirmed and dealt with each year in the auditor's report. It is not difficult to implement. If I were to see someone with 90 written on a bucket I would know that my 90 cent is going to go to the charity, with only ten cent going in commission to the person out there on a cold Saturday collecting or selling tickets. I know people shy away from such an action. However, that is the way things are going, especially with audited charities. Most small charities give 100% and do not keep anything for themselves, for example, a local football club selling tickets. I ask the Minister of State to bear this in mind and deal with it.

In light of where we are going as a society and as a community, many arguments have been put forward for organisations promoting equality and social justice to be included in the Bill's terms of reference. I do not know what the Minister of State's views are on that and where he stands after the Bill has gone through the Dáil. This is a defining characteristic of our society. I, Senator Labhrás Ó Murchú and others raise issues of social justice. These are fine charities, that is, if they are charities. Not all organisations promoting social justice are charities and it must be made clear when they are. I ask the Minister of State to consider that.

Another issue concerns defaulting directors. In the section concerning this it is made quite clear that directors cannot be held responsible when Government policy that previously supported the charity subsequently pulls the rug from under it. The charity then cannot meet commitments it had given on the basis of previous expectations. If people act irresponsibly or recklessly, that is a different matter and is covered in other legislation. I have no difficulty with that. Where people act genuinely, they should not be held responsible in such a situation.

I wish to discuss the issue of accountancy. I declare a conflict of interest here in that I am a member of the board of the Irish Auditing and Accounting Supervisory Authority and I chaired the audit review group on behalf of the Government some years ago. I have strong views on how the operation of auditing works and these are disinterested views. I have missives from the consultancy body of accountancy bodies in Ireland. I regularly would be on the other side of the table from these people and would differ from them in my views, so I am not merely picking up an issue here and running with it. I am looking at the concept of how auditors should work. I believe there are dangers here and I intend to put forward amendments to this.

The issue of a threshold is probably not a core accountancy issue but it is a political one. The threshold of a charity's income goes up and down. It might be left a large sum, for instance. We should be able to reflect this in the legislation. That is an easy matter. However, having an auditor who is also a charity trustee is way off and utterly in conflict. The work of an auditor must be truly independent. He or she should not be a charity trustee. A trustee cannot be the recognised auditor. In certain situations people may be trustees who, in their day jobs, might happen to be auditors. I am not talking about such situations but about the person who audits the charity's books as required. That person cannot be also a trustee of the operation.

The Committee of Public Accounts, of which the Minister of State has had experience, is the oracle in this regard. When it dealt with offshore bank accounts in 2000, its report determined that auditors should be untouched by the operation they audited. The committee, which was chaired by the late Deputy Jim Mitchell and included as members Deputies Pat Rabbitte, Ned O'Keeffe and others from Fianna Fáil, was vehement on this issue. It would not accept even Chinese walls of difference but wanted clear blue water between the operation of the auditor and what was happening on the board. The requirement was for an independent auditor. Perhaps the Minister of State has issues in respect of this matter or perhaps he takes a different interpretation. Having spent considerable time examining the issue of holding hearings in public or private, I concur with the view that they should be held in public. In the interests of fairness, however, the charities regulatory authority should be given the discretion to allow hearings to be held in private at times. The Irish Auditing and Supervisory Authority, IASA, conducts investigations on this basis under the Companies (Auditing and Accounting) Act 2003. This approach should be mirrored in the Bill before us.

The reason IASA has an option to have private hearings is that an auditor who comes under investigation in a public hearing may as well close up shop. While this is fine if he or she is ultimately found guilty, as the Minister of State will be aware, these cases proceed in a certain manner. Once allegations are made, it may take months before the matter is investigated and a conclusion reached. In the meantime, the reputation of the person subject to the allegation can be shredded. I raise this issue for reasons of fairness. I do not take a lily-livered or soft view of accountants and auditors who must be held to the highest possible standards.

Yesterday, I attended a meeting of a subgroup of the IASA board to discuss an issue. While I am not at liberty to discuss the details, the meeting focused on how we should protect the confidentiality of someone who is being investigated. It was our view that protecting confidentiality is as important as achieving the correct result. This contrasts with the view of the media that facts should be placed in the public domain and those involved allowed to argue their case. The possibility that individuals will be treated unfairly is a genuine one but if I am reading the provision wrong, I stand to be corrected.

I compliment the Minister of State and his officials on introducing this long-awaited and welcome legislation, on which there have been many dry runs. As the Minister of State will have noted, the issues I raise are minor. However, it is our role, as legislators, to try to tighten up legislation. I look forward to debating the Bill with the Minister of State who I am sure will correct me if I have leaned too far to one side. I hope he will be open to suggestions. If the Seanad makes a few amendments which necessitate re-introducing the Bill in the other House for a half an hour, it would not be a big deal. Let us make any changes that are required. I wish the Minister of State well and look forward to supporting the Bill.