Committee Reports > List of Committees > Dáil > 1994 > Committee of Public Accounts > Interim Report No. 01 - Appropriation Accounts 1992

AN COISTE UM CHUNTAIS PHOIBLÍ

COMMITTEE OF PUBLIC ACCOUNTS

Déardaoin 18 Samhain 1993

Thursday, 18 November 1993

The Committee met at 11 a.m.

MEMBERS PRESENT

DEPUTY JIM MITCHELL IN THE CHAIR

Mr. P. L. McDonnell, an tÁrd Reachtaire Cuntas agus Ciste called and examined.

Mr. Jim O’Farrell, Dept. of Finance, in attendance.

APPROPRIATION ACCOUNTS 1992

Mr. Joe Boyle, Secretary, Civil Service Commission, called and examined.

Mr. P. Graham, Accounting Officer, Office of the Comptroller and Auditor General, called and examined.

Chairman: I would like to mention to the Committee while we have an intermission, that next week included in the business will be the address by Mr. Richie Ryan, the outgoing Governor of the Court of Auditors of the EC which will be very timely in view of the fact of our visit the following week to see the European Parliament Budget Control Committee, so we will be inviting a number of Members to meet him for lunch afterwards.

Deputy Broughan: Are you concerned that the recent court of auditors report, according to Deputy Pat Cox, severely criticised some measures of control in the agricultural area in our country? Did you see those reports?

Chairman: I did, but in fact what is very clear to me is that in relation to certain EC funds generally control seems to fall between the stool of the EC parliament control and national parliament control, for instance in the case of the Kilrush marina it seems to me that the ERDF controls in Brussels are not what they should be. So maybe after our visit to both the parliament and the court of auditors later on we will be able to look at those.

VOTE 16 - CIVIL SERVICE COMMISSION

Mr. Joe Boyle, Secretary, Civil Service Commission, called and examined.

Chairman: Mr. Boyle, you are welcome. I understand that your appointment as Secretary of the Civil Service Commission and Accounting Officer was only made earlier in the year and this is your first time before us.

Mr. Boyle: That is correct, Chairman.

Chairman: We have a tradition here of being very tough the first time.

You are very welcome and may I wish you every success in your position. To help the Committee perhaps you could give us some information. The Civil Service Commissionwas set up to ensure impartiality in the appointment of civil servants. Could you tell me exactly what steps you take to ensure that for example there is no canvassing for positions or that decisions taken are not judged except by the criteria of who is best for the job.

Mr. Boyle: Chairman, the Commissioners are directed by statute to hold open competition for appointment to the civil service and to certain local government and health jobs. Regulations are made by the Commissioners governing the selection procedure and the requirements for jobs and these are openly published and are widely known and the Commissioners are meticulous in ensuring that selections are made in accordance with the published criteria.

Deputy Durkan: Could I ask how interview boards are decided upon and could you state whether in fact in your opinion the interviewer is unknown to the interviewee and visa versa and to what extent you could verify that.

Mr. Boyle: Interviews are constituted generally of experts in the particular field and the composition of an interview board would vary depending on the particular requirement of the job in question. These would typically be drawn from the civil service or the wider public sector, the academic world, the business world or other client organisations, such as health boards and local authorities.

The second question related to members of interview boards who know certain candidates. It is impossible in a small community to ensure that a member of an interview board does not know a candidate. Interviewing is done by a board not by individuals on a one to one basis, as is common in the private sector. Public appointments are made by an interview board and there are procedures about how a member of a board, who knows a candidate, should deal with the situation vis-a-vis the other members of the board.

Deputy Durkan: In a small country with a relatively small population it is difficult to ensure that a candidate is unknown to a member of the interview board. It could be an advantage or a disadvantage, depending on whether the individual liked or disliked the other person. It is also possible that more than one member of an interview board would be known to, or know, the person being interviewed. While I respect the Civil Sevice Commission which has a difficult job to do, it is difficult to achieve total or 50 per cent anonymity between the people at both sides of the table because of our population structures and the high levels of interviews for top positions in the Civil Service. This can be positive and negative from the point of view of the interviewee. Could you balance this situation in order to allay the fears of people who feel disadvantaged?

Mr. Boyle: To answer that question, the Commissioners have guidelines which they provide for members of interview boards and they deal with a number of procedural issues including the question of how members are to behave in the situation where they have a close knowledge either socially or in terms of a working relationship with candidates. It is true that in a small community in particular where senior appointments are concerned or where appointments in the professions are concerned it would be impossible to constitute a board where all of the candidates would not be known to one or more members of the interview board. We are satisfied that with the safeguards and guidelines that are prescribed and the traditional ethic of Civil Service Commission and Local Appointments Commission boards that there is no danger that people will be either advantaged or disadvantaged by their being known to members of the interview board. The Commission does have a representative from its own staff at every interview and part of their brief is to ensure that proper procedures apply and that any bias, intended or unintended, does not come into the picture.

Deputy Durkan: How can you be so sure that it is not an advantage or disadvantage to the person being interviewed when the question of public appointments was taken out of the political arena by virtue of the fact that it was a distinct advantage or disadvantage to be known. Does it not naturally follow that in this situation it can also happen to be a fairly considerable advantage. In other words, a certain lack of objectivity could arise if, for example, the two or more people carrying out an interview happened to be well known to the person being interviewed, may well like them or dislike them and may have worked with them previously, obviously this is going to influence them somewhat in their thinking?

Chairman: We are dealing with a human situation.

Deputy Durkan: I accept the necessity and the procedures that have to be followed. The question I am asking is are we achieving what was the image object of the exercise?

Chairman: He will say no to that.

Mr. Boyle: I believe within the constraints outlined the Commissioners are as successful as any human exercise can hope to be. They are as successful as they can be in ensuring a balanced approach. On the one hand experts relevant to the job area are included on the board. In addition to that, I mentioned earlier the Civil Service Commission or the Local Appointments Commission as the case may be, have one of their own staff present as an observer. In addition to that the chairman of the interview board is a lay person in terms of their not being associated directly with a particular discipline or the particular area involved. These procedures, together with the briefing, both oral and written, that we give members of interview boards and the fact that the Commissioners themselves are also involved in the making of final decisions, constitute effective safeguards. The Commissioners themselves are involved in all the crucial stages of any selection exercise.

Deputy Broughan: For a lot of start off positions in the Civil Service we have the system of examinations, is that correct?

Mr. Boyle: Yes.

Deputy Broughan: So at higher levels would there be any merit in bringing in people from outside for an extra exterior assessment, like you might have in relation to jobs in companies or indeed at local government level, would you see any merit in that?

Mr. Boyle: Yes, the practice varies depending on the job area, the level or the discipline involved. In the case of senior appointments in management or in the case of professional appointments, it is the practice to bring in people from the relevant discipline outside of the immediate job area. It is also the practice to bring in people from the business world where senior management appointments are involved. The Commissioners find this very valuable and they indeed have acknowledged many times the contribution that people in the private and public sector make to the operations of the Commissioners.

Deputy Broughan: Do you have any responsibility for the area of, say, the overall efficiency of the service, of the numbers throughout and the size of it. In other words have you any advice that you could give to Government to say the Civil Service is such and such a size, it should be bigger, it should be smaller? Do you do anything in that area?

Mr. Boyle: No, that is a policy issue for the Department of Finance.

Deputy Broughan: But, we would not, for example, if there were shortages in different Departments, would that be known to you. Would you know, for example, right now what the level of vacancies all over the Civil Service would be? It came to the attention of people recently that we are appointing new ushers for Dail Eireann. Would we know what the required complement of ushers would be, in other words, what the traditional levels would be and therefore what is necessary to do the business of the Oireachtas efficiently and well.

Mr. Boyle: The question of staff complements would be a matter in the first instance for an employing body, for local management to decide what their requirements were and secondly the Department of Finance would have an influence on the wider considerations. The Commission per se do not get involved in that area. We are, of course, anxious to have advance notice of vacancies coming up so that we can better provide a prompt service to clients.

Chairman: With regard to Vote 16, the explanations state:

A.1.- Excess expenditure arose due to additional staffing costs associated with the effects of the PESP and the carryover effect of additional staffing employed on the Garda Recruitment Programme.

A.2.- This saving resulted from a reduction in the interview and examination programme following lower than anticipated staffing needs in the Civil Service, local authorities and health boards.

There seems to be a contradiction there. One heading says that there was more recruitment and in another that there was less.

Mr. Boyle: I will deal with A.1 first. The Garda recruitment programme was quite a major exercise which commenced in 1991 and was completed, for all intents and purposes from our side, in 1992. There was a spillover of work from the campaign which was commenced in 1991 into 1992. No additional resources were provided in 1992. The costs involved were funded through an over expenditure under heading A.1, as is noted there, with the approval of the Department of Finance.

Chairman: Is there not a contradiction between the two?

Mr. Boyle: Our general programme of recruitment is separate from the Garda programme which is a single major operation we are involved in on a three year cycle.

Chairman: OK.

Mr. Boyle: The general trend was that there was less demand in 1992 than in 1991. An example of how that would have affected our expenditure is that panels which were set up in 1991 would not have had to be renewed in 1992 because fewer than expected were drawn from those panels. We continued to use panels in 1992 which we might otherwise have had to renew by new competitions in 1992.

Chairman: What steps does the commission take to ensure maximum value for money and what are its financial control arrangements?

Mr. Boyle: In relation to value for money, we have adopted a number of measures which I am still working through. First, we have taken on board the recommendations in relation to internal audit. We have established an internal audit function and a programme of work has been drawn up by the audit officer which has had my approval. Secondly, we have over the last couple of years invested in information technology and we expect that significant improvements in efficiency will flow from that investment.

We have also studied the possibilities of introducing new technology as an aid to administering examinations and managing recruitment programmes generally. We have increased the use of short listing as a means of controlling the interview programme. We are studying, on an ongoing basis, recruitment and selection techniques generally with a view to assessing whether there are any new practices which we could profitably employ.

Chairman: The Committee would like to hear in six months time which new practices and efficiencies have been introduced. We thank you and your officials for coming before the Committee and we not the account.

Mr. Boyle: Thank you.

The Witness withdrew.

VOTE 8 - COMPTROLLER AND AUDITOR GENERAL

Mr. P. Graham, Accounting Officer, Office of the Comptroller and Auditor General, called and examined.

Chairman: Mr. Graham, under the new Comptroller and Auditor General Act it is intended that the audit of your office will be undertaken by an outside agency rather than an internal audit - is that correct?

Mr. Graham: That is correct.

Chairman: From which year will that take effect?

Mr. Graham: For next year’s accounts, from 1 January 1994. At present, our audit is carried out by an auditor from our own staff who is not directly involved with administration. We look forward to the future appointment of an auditor under section 13. Technically speaking, the auditor will be appointed by the Comptroller and Auditor General, with the terms of appointment to be approved by the Minister for Finance.

Chairman: The additional responsibilities which have been assigned to the Comptroller and Auditor General’s Office, under the Act which comes into effect on 1 January, will require additional staff resources if the office is to do its job properly.

Mr. Graham: Yes.

Chairman: Has any progress been made in that respect?

Mr. Graham: Considerable progress has been made. We established a planning group after the passing of the legislation to assist in its implementation. It has completed its review. The first positive step has been taken in that we are seeking the appointment of a director for our value for money audits. An advertisement was placed in the newspapers last week. We are hoping to have made that appointment by the beginning of next year. There will be other staff appointments throughout 1994.

Chairman: How do you propose to approach examination of value for money audits compared to ordinary audits? What techniques are involved? What new assessments are involved?

Mr. Graham: I expect it will be a deeper examination than a pure financial audit. We will have to see if we need extra skills ourselves. We will be starting slowly, building to a position where we would hope after three or four years to produce in the region of 12 reports per annum on the value for money side. A complete separate division will be established to handle the value for money audits. We feel that we can build on our experience of producing the project audit reports over the past couple of years. We trust that the reports will be of assistance to the Dáil.

Chairman: What are the internal financial controls in the Office of the Comptroller and Auditor General? How do you ensure that you are getting value for money yourselves?

Mr. Graham: We are driven by the whole principles of financial control and rectitude all the way down from the Comptroller and Auditor General, myself and the directors. We are always conscious of attempting to get the best value for money and control.

We try to manage the office at as low a cost to the State as we can and we constantly keep in mind that we are trying to give good value to the State.

Chairman: It is now 1 p.m. We are asked to stand in silence for peace in this island as in the Houses of the Oireachtas.

Members rose in their places.

Chairman: It is a difficult job to audit the auditor. I am obviously familiar with the work of the Comptroller and Auditor General’s Office. I greatly appreciate the efforts being made there to improve the general standard of audits of the public service. Thank you, Mr. Graham.

Mr. Broughan: I asked a question earlier before some of the officials came in regarding the criticisms which were made by the European Court of Auditors of the management and control of certain payments in FEOGA and the agricultural grant area. The Chairman will remember that he and I represented the country at a meeting of the European Parliament’s Committee on Economics and Finance in Lisbon, where concern was expressed by different delegations that perhaps Irish controls were not sufficiently good in this agricultural area and that perhaps in the past, if not in 1992, moneys which were transmitted were not managed carefully enough. What is the position in this whole area? I am aware we will deal with the Department of Agriculture Vote. Is there concern in the Comptroller and Auditor General’s Office that there are discrepancies of some kind or there may have been illegalities in the whole area of claiming EC agricultural subsidies and that the controls are not there?

Mr. Graham: There are a number of ways I could answer that one. We have reported in the past on a number of matters arising on the agricultural side. We have in our current legislation the provision that the Comptroller and Auditor General shall actually audit the accounts of the Irish section of the European Guidance and guarantee Fund.

Chairman: FEOGA.

Mr. Graham: FEOGA. From the point of view of other European moneys generally these will flow through departmental accounts and will be subject to our normal audit of the Department. I would not like to give a categoric yes or no to your question, Deputy. It sounds as if I am avoiding the question but where we have become aware of problems we have reported on that in our own report on the Appropriations Accounts and I do not think I could go any further than that.

Deputy Broughan: Would you be concerned that some European Auditors would be expressing a view that would seem to be casting some aspersion on the way in which we manage our own controls?

Deputy Cox reported that.

Chairman: The Comptroller and Auditor General wishes to come in on the point of what co-ordination there is between national audit offices and these audits.

Mr. McDonnell: The treaty of course which set up the court said that the courts’ audit in the member states will be carried out in liaison with the national audit offices and this is a subject which has concerned all of the national audit offices throughout Europe as to what exactly liaison means and how it should operate. It is a subject which we discuss every year because we have an arrangement whereby the national audit offices of the member states meet once a year. We have discussed it last month in Lisbon because this whole question of how this operates concerns the court. There had been different approaches in the different member states on different degrees of liaisons. The whole question of overlapping is one of concern to us. It is a fact that the authorities in the member states are charged with protecting Community funds. The Community legislation requires the authority of the member states to have adequate controls. The question of overlapping audits by the European Court and audit by the national authorities would be of a concern to us. It is a problem in regard to the client. The approach that we are looking at now is the extent to which the European Court will rely on the work of the national audit offices. Heretofore there tended to be a situation where the national audit office simply was a facilitator rather than a participant and they facilitated the European Court in carrying out their audit. They went their own way and carried out their own examinations. They would have regard to matters which the Accounting Officer has mentioned which we would have raised in our report but we would have been concerned with two aspects in raising questions. We would have been concerned first of all with the possible impact on the national Exchequer if European funds were misspent because it is also a principle of European legislation that if moneys are wrongly spent by a member state, that is going to fall on the national Exchequer unless it can be recovered from the beneficiary. We would have been concerned with that aspect. Also, the Court did not just rely on our work. It went its own way and carried out such tests as it considered necessary itself. We are looking at a more structured integration and we are at this moment considering the question of joint audits with the Court. We have a visit coming up in a couple of weeks’ time from one of the members of the Court. We will be carrying out a joint audit with them. This whole question of integration of what it is, is being looked at. We are as concerned as the court would be.

Deputy Broughan: Including the extended legislation and so on, increased powers which you got recently are you happy that - I asked the Minister for Finance recently - the transfers between the EC and ourselves over the period of the national plan can be adequately monitored. The net transfer to Ireland is something like £11 billion which would be great in a single Irish budget. Would you be concerned that you have enough resources to keep track of this huge volume of inflow funds into the country?

Mr. McDonnell: We will have to look at that because one of the things we are looking at in the context of what I was just saying is the extent to which the court will rely on the national audit offices. Depending on how that works out because as you will appreciate our audit is carried out on a test basis. We generally look at the systems of control and do a limited amount of substantive checking. It depends on how we are going to work out this question which is arising at present, the court will be looking for a statement of assurance from the member states. Under the Maastrict Treaty the court are required to do that, to look for a statement of assurance and the extent to which we will need to, perhaps, have a more intensive audit in that area, is something that we are going to be looking at in the next short while.

Deputy Broughan: OK.

Chairman: This whole area of co-ordination between national audit offices and national parliamentary committees and the EC Court of Auditors and the EC Budgetary Control Committee is something that we are pursuing. We will have Mr. Richie Ryan from the Court of Auditors next week before us. The following week we will be going to meet the EC Budgetary Control Committee in Brussels. On that I want to thank Mr. Graham and we will note the Vote. I think we will not refer it back. We will note the report of the Comptroller and Auditor General. Thank you. Meeting adjourned.

The Witness withdrew.

THE COMMITTEE ADJOURNED.