Peter Power (Limerick East, Fianna Fail)

That is another issue. The boards of many plcs and corporate entities have finance committees. It serves to illustrate the point that every entity is different. The reason the Minister cannot accept the amendment is because of its wording and the power it gives to the Secretary General. The Minister considers the amendment inappropriate in the case of the Secretary General, and unnecessary in the case of the head of finance. Therefore, the Minister does not propose to accept the amendment.

It is a core function of the audit committee to advise the Secretary General on an independent basis. It would be inappropriate to give the Secretary General an explicit right of attendance at its meetings. In practice, it would be a potential for influence in an area that any Secretary General would be reluctant to wield in corporate governance terms, having regard to the independence of the function of the audit committee. Senator O'Toole's amendment gives an absolute power to the Secretary General to attend all audit committee meetings. This does not preclude the audit committee from the right to invite in the Secretary General, but the Minister considers it inappropriate to give the right to the Secretary General to attend.

The attendance by the head of finance is already provided for in section 10(13). The head of finance currently attends most audit committee meetings as a matter of course, as the majority of issues of concern to the audit committee fall within the responsibility of the head of finance.

Amendments Nos. 2 and 3 propose giving the audit committee the function of the commission and the chairman on various audit matters. In keeping with public sector practice, it is the function of the audit committee to advise the Secretary General in his or her capacity as the person accountable for the management and control of the administration and expenditure of the voted money of the commission. The Secretary General is in turn accountable to the commission as its chief executive officer for his or her performance of these management and control functions under section 15 and section 16, as amended by this Bill, of the current Act.

The Secretary General's accountability extends beyond the commission to the Comptroller and Auditor General on audit matters and to the Committee of Public Accounts. To give the audit committee the function of advising the commission, as distinct from reporting to it, would cut across the reporting role of the committee to the Secretary General and would not be in keeping with common practice in the public service, whereby internal audit and the work of the audit committee in reviewing it is a function that reports to management at the level of Secretary General, rather than a function of oversight at board level. In any case, the audit committee reports annually to the commission, as provided for in section 10(10)(b).

This goes to the core of the issue. It relates to the proper role and function of an audit committee in terms of its advice to the Secretary General, as Accounting Officer, on expenditure, and its reporting functions to both the chairman and the commission. That is the distinction the Government would make, which means we cannot accept the Senator's amendment on this occasion. However, his points have been noted.