Joe O'Toole (Independent)

I welcome the Minister of State and I also welcome the legislation, which I support enthusiastically. I was a member of the first Houses of the Oireachtas Commission and I am a member of the Irish Audit and Accounting Supervisory Authority. I would like to raise a number of issues which I hope the Minister of State will take on board. I concur with Senator Ó Murchú's remarks. The commission is doing a difficult job well and it has expanded services.

I have had arguments about individual issues with the commission now and again but we made a mistake when it was established. A number of parliaments that have set up similar commissions and tied in the work of their committees on procedure and privileges with the work of their commissions. We had that choice and it should have been done. I called for it at the time but it was not done and it never will be done. Consequently, there has been regular conflict between the decisions of the commission and those of the Committee on Procedure and Privileges and there is not a clear understanding of the differentiation between them.

I refer to the guide for board members of State bodies in Ireland, a copy of which I was given on the day I was appointed to the commission. I acknowledge that the commission has an audit committee, although it is not statutorily necessary. The document states: "The Chief Executive, Head of Finance and Head of Internal Audit should attend meetings, though not as members of the audit committee". This is the Government's position on audit committees. I would like this provision inserted in the legislation. The Bill provides for the Secretary General to appoint somebody with a background in finance. The head of finance is crucial to audit. For instance, he or she is mentioned in the Sarbanes-Oxley Act in the US as the person rather than the chief executive who takes the hit. This is Government policy and I ask the Minister of State to insert this provision in the legislation. There are good reasons for that.

The Department of Finance recently issued a code of practice for the governance of State bodies. I am on a number of State bodies and this document has been gone through in minute detail to meets its stringent requirements. I would like to ensure we do the same in this legislation. Paragraph 9.2, which is crucial to how the code works, states:

A small number of bodies have an Accounting Officer within the meaning of the section. In such cases, the accountability of the Accounting Officer to the Oireachtas must [not may] be differentiated from that of the board's general responsibilities.

That is key to my problem with the legislation. It does not make that distinction explicit enough but it is required. A basic tenet of the code is that all semi-State bodies should comply with its requirements.

It is also important that the code provides that the chairperson of each subsidiary should formally report to the main board. That would apply to the audit committee of the Houses of the Oireachtas Commission. The greatest failing in the legislation is the lack of a requirement to report to the board. A report should be made to the commission after every meeting of the audit committee and every paper produced by the committee should be available to every member of the board. This is crucial to transparency. The problem in FÁS is the board never saw the outcome of its internal audit unit's investigation. That cannot happen under this legislation but it only provides for a report to be made once a year whereas the code of practice requires that the chairperson of a State body should provide an interim report to the relevant Minister on significant issues within six months. There is a continuing responsibility on the chairperson to carry out various functions.

While section 10 provides, rightly, that the audit committee should advise the Secretary General on financial matters, I would like the committee to advise the chairperson as well. I have witnessed on a number of occasions chairmen of State bodies appearing before the Committee of Public Accounts who clearly were not aware of their responsibilities. This is where the breakdown begins. This is small provision to insert. It would strengthen the Minister's position and it does what his advisers would want to have done. We cannot have a scenario where people can point to a gap in the governance structure of the Oireachtas in comparison what is required of other State bodies.

The code of practice states further: "The Board should lay down formal procedures whereby Directors may take independent professional advice if necessary at reasonable expense, if they feel they need it." This happens regularly and it should be addressed in the legislation. Another issue covered by the code of practice but not the legislation is the protection of whistleblowers. I cannot think of somebody working for another State body who would require more protection than a member of the Oireachtas staff who wanted to draw attention to an issue without it rebounding on him or her. An amendment should be made to reflect this.

The Minister of State referred to the challenge to how we do our business. The legislation should provide for a formal review of the performance of individual directors. Every Member in both Houses would say that is badly needed. It would be a little humbling and unattractive to measure the competence of board members, as each member would be asked by an external body what he or she thought of the contribution of colleagues. My comments are not a reflection on the legislation or the commission. I do not object to one word of the Bill and I will support it. However, I have a great deal of experience in this area and I guarantee the issues to which I have referred will be raised. Each issue has been discussed over the past three months since the new code of practice was circulated to every semi-State body. I hope nobody replies that the Oireachtas commission is not a semi-State body.

I also have a copy of an old Department of Finance publication on internal audit. Members of the Green Party raised questions about how internal audits work within Departments. Will the Minister of State take on board the issues I raised? I have tabled amendments on Committee Stage to address a number of them but I did not have time to address every issue because the Bill was introduced so quickly. I will understand if the Minister of State cannot accept the amendments today but I have asked that Report Stage be taken next week in order that he can examine the issues I have raised. If there is something wrong with what I said, I will accept that but these issues are raised at audit meetings all the time.