Joe O'Toole (Independent)

I welcome the Minister of State. This legislation was born out of the toughest of times and significant public interest in developments in FÁS. It is the Government's response to these developments. Notwithstanding this, I have major difficulties with regard to what is absent from the Bill and some regressive aspects of the legislation.

I take as given the points made about the good work done by FÁS. This work needs to be recognised and supported. Having spoken to many FÁS staff, it is clear morale in the organisation is low. It is vital, therefore, that Members acknowledge the good work the organisation does.

I will address specifically what the legislation does and does not do in responding to some of the issues which arose during recent deliberations at the Committee of Public Accounts. It is appropriate that the clerk to the committee is present in the House. I approve of the decision to reduce the size of the board as it was too large.

We are returning to the dark ages. However bad the previous problems were, at least somebody had to nominate persons from ICTU, IBEC and other quarters. The Bill proposes to return that power to the Minister's office. It is not the worst aspect of this proposal. The worst aspect is how one comes by the nominations. This is a major issue and I guarantee the Minister of State that of all the things which are happening the biggest issue for us is the lack of trust and confidence in the political system. There is a need to let air into it and recognise the impact of the things we, myself included, have been doing for years. I sat on the executive council of ICTU and we made nominations to FÁS. I take my share of responsibility for how things were done and how they should be done better in future.

It is proposed that the members of the board should be appointed after consultation with the Minister for Education and Science and the Minister for Social and Family Affairs from among persons who, in the opinion of the Minster, have experience and expertise in matters connected with finance, trade, commerce, corporate governance or public administration. The wording is deliberately loose and was included deliberately by the parliamentary draftsmen to give the Minister protection to make nominations. I cannot think of any aspect of life which is not connected to the functions of FÁS. It does not help us.

We should examine some of the things which we could do. In terms of NAMA, a public advertisement was issued and the Government received expressions of interest. The same should be done for this board. I ask the Minister of State to confirm there will be an approved structure and how it will be done. An advertisement only elicits and attracts expressions of interest, but one must then decide what to do with the list. At least two of the bodies included in NAMA were, for many years, in the habit of advertising for expressions of interest in the directorship of their institutions. Another great example of advertising is that done by the Courts Service for the appointment of members of the Judiciary. Publishing advertisements inviting expressions of interest is a great idea but what happens next is shrouded in secrecy.

We then need to look at the functions of the board and look for expertise and experience in finance, trade, commerce, corporate governance or public administration. Someone then has to look at giving weightings to those areas and decide which are the most important. This is something which should be done before any names are revealed so nobody can say a person who has expertise in finance also lived in a Minister's constituency or make other comments. I am not impugning any negative intentions on the Minster. Rather, I am referring to how the media, public and commentators read issues such as this. The positions should be advertised and a weighting should be given to all the requirements outlined in the Bill. People should then be selected for interview and following the interviews the names should be sent to the Minister. There is no problem with the Minister being on or having his people on the board. He does not have to be required to accept all the proposals which come to him.

I will give the Minister of State an example of how this happened in recent times. The recent Broadcasting Act gave, for the first time in the history of the State, power to the Committee on Communications, Energy and Natural Resources to select four people for nomination by the Minister, who could then reject them. I have no objection to such a provision because Governments are elected to govern and cannot be undermined. However, the Minister would have to give a good reason for his or her decision.

The reason I refer to the example regarding the board which will be the successor to the RTE authority is that the Minister nominates five people and the committee nominates four, which the Minister can reject but will not do so. There are 13 requirements governing in what areas the members should have experience and expertise. One has to find people with experience in more than one area or all the posts will not be filled. The Minister, as required by the Act, sent five names to the Committee on Communications, Energy and Natural Resources which considered them — they were good and honest citizens — and asked which of the 12 boxes each one ticked. There was a mixed group comprising people from the Government side and all other parties, and the committee could not decide which boxes they ticked. It had to ask the Minister for assistance to determine which five boxes were ticked so it did not have to examine them again but could look at the others.

The committee decided the posts would be advertised, which has been done, that there will be a short-list which will be done on the basis of weightings it approves and an interview will then take place, all of which will be done like a normal appointments process. At the end of the process, the people selected will come before a public session of the committee, not to be grilled and embarrassed as one might see in Washington, but to say they are happy to be nominated and outline what they bring to the party. I would love if such a process could be included in this Bill. Every appointment process should include a requirement that people come before a committee where they would not be embarrassed but would be properly treated as those who are doing the State some service. This is an issue about which I feel strongly. People who want to serve on a board should be happy to let the world see why they are there.

As an Independent I wish to raise another issue which is often not addressed. The Government has a policy position on many issues and I see nothing wrong with it having people on a board who are there because they pushed forward the policy statement or position of the Government party or the programme for Government. This is something about which we all have to be very level headed and pragmatic. It is not about being completely pure, rather, it is about getting the best people in to do exactly what we were elected to do and what the law requires. I ask the Minister of State to again examine that issue. I am glad to see he nodded in agreement with me and I would like to see how that process could be completed ethically. Senator Moylan and I were attending an ethics committee when the Minister of State was speaking so I ask him to forgive me for not hearing everything he said.

Another deficiency in the Bill is the board structure, which is left wide open. I raised a point regarding the board of NAMA during the debate last week on which the Government conceded because it needed my vote and about which I felt very strongly. I feel equally strongly about this issue. During the discussions of the Committee of Public Accounts evidence of all sorts of bad governance practices arose and I am delighted one issue included in the Bill is that of corporate governance. We discovered the audit committee reported to the executive which undermined the whole process of corporate governance.

A provision should be included in the Bill that an audit committee, a finance committee and a risk management committee be established. I ask the Minister of State to do this because if one does not put a provision such as this into the board structure I guarantee it will not be done by the board members. If there is no finance committee the financial arrangements such as deciding on budgets, cash flow meeting budgets and arrangements for debtors and creditors will be done by the executive. Such matters will be flashed by the board which will be dealing with top-level strategic decisions and will not go into the detail required. That is how bad habits start. A sub-committee of the board which will bring a report to the board and nobody else on the finances, the budget for the next year, the sinking funds, insurance and cash flow required and the benchmarked budget for the current year is required. Such a report should be examined by three or four members of the board. The board cannot chose what it puts in front of itself but should have to examine the figures from top to bottom with the financial controller of FÁS.

It is important the board and the audit committee consider the risk element and ensure external auditors come in three or four times a year to stress test the functions in place to see if it is collecting its debts and dealing with data properly and how it would deal with any risks which would arise and could threaten the whole operation. This would deal with issues such as credit cards. The expenses of the chief executive also came up. How are such matters dealt with? If the Minister of State wants them to be dealt with in a managed way, he has to consider the structure of the board. I could talk for three hours on this issue. There is no suggestion the many problems associated with the governance structure of semi-State bodies are developing because people do not mean well.

The outgoing chairman of FÁS who is a friend of mine has obviously been devastated by much of what has happened in the last year. He accepts that as chairman, he has to take responsibility for what happened during his time in that position. As he said at a meeting of the Committee of Public Accounts, he regrets that things were not done differently. I am saying this in the most honest way possible. He was not aware that the audit committee should have been reporting to the board rather than to the chief executive. I mention that as an example. It was not that the board made a decision to that effect — it was a legacy issue. It has been the case for the last 12 years. If one wants a board to perform a certain task, one should structure it in a manner that ensures it will do so.

I have spoken about related issues such as finance, audits and risk management. Such issues cannot be dealt with by a board which meets for two or three hours once a month but does nothing else. The chairman of the organisation's finance committee, whoever he or she may be, should be asked to report to its board. That report should state whether he or she has gone through the year's figures with the financial officer. It might state, for example, that they are happy with some matters, concerned about others and would like certain steps to be taken. All the papers available to the finance committee should be made available on the FÁS members' website. Any member who wants to look at them should be encouraged to do so. If everybody has access, everybody will know what is going on and nobody will be embarrassed. If all the questions are asked in the right place, it does not become an embarrassment. If a person's expenses are out of line, they will emerge through that process.

I ask the Minister of State to examine this issue carefully. I reiterate that the structure of the board is as important as its membership. While I appreciate that this legislation has been considered by the other House, I suggest the other House does not tend to deal with certain matters that are more important. I ask the Minister of State to keep an open mind on this issue of importance to make the legislation more effective. I have no doubt that there is no difference between what the Minister of State and I, or anyone else in this Chamber, are seeking to do. If one wants certain things to happen, one has to legislate for them. They will not happen if they are not put on a statutory basis. That, in a sense, is how we should set about making FÁS work. If the structures I have recommended are put in place, the issues that caused problems in the last six months will be dealt with. In the last six months there was no discussion about training, job creation or the other positive work of FÁS. There was no scrutiny of the positive objectives or purposes of FÁS because people were too busy looking at other things. We need to dispose of them now. I have suggested a good way of removing them from of the equation.

I wish the legislation well and hope to examine certain issues in more detail. I will listen closely and carefully to the Minister of State's response.