Gay Mitchell: ‘It adds up to PAC operating within a powerful remit’

0
70

Gay Mitchell: ‘It adds up to PAC operating within a powerful remit’

Sound public finances demand that this committee examines where public money flows to


Court ruling: The Supreme Court found the PAC ‘acted significantly’ outside its terms of reference in a case taken by former Rehab CEO Angela Kerins
Court ruling: The Supreme Court found the PAC ‘acted significantly’ outside its terms of reference in a case taken by former Rehab CEO Angela Kerins

Once, over dinner, I told the Canadian Auditor General that our Comptroller and Auditor General had reported that a woman was discovered to have been claiming benefits for 83 children.

When I asked the secretary of the Department of Social Welfare, the late James Downey – one of the best civil servants ever to appear at the Public Accounts Committee (PAC) – if she had been particularly philoprogenitive (prolific in childbearing), he played along nicely by replying: “Philopro – what, chairman?”

The Canadian Auditor General’s response was: “Sure that’s nothing. We once discovered that for many years there was a horse on the payroll of the Canadian Department of Defence.”

Please sign in or register with Independent.ie for free access to this article.

Sign In

window.gigyaIntegration = window.gigyaIntegration || {};
gigyaIntegration.command = gigyaIntegration.command || ;
gigyaIntegration.command.push(function() {
gigyaIntegration.addEventHandlers({
onLogin: function(e) {
location.reload();
}
});
$(‘#datawall-sign-in’).click(function(e) {
e.preventDefault();
gigyaIntegration.showLoginScreenSet({
signupSource: ‘opinion’
});
});
$(‘#datawall-sign-up’).click(function(e) {
e.preventDefault();
gigyaIntegration.showRegisterScreenSet({
signupSource: ‘opinion’
});
});
});

The Supreme Court has ruled that the PAC “acted significantly” outside its terms of reference in a case taken by the former CEO of Rehab, Angela Kerins. But what is its proper role? Each year about €55bn goes into the State’s Central Fund. There are only two ways to authorise its distribution: an Act of the Oireachtas (a law) or the annual budget process. It is on this flow of money and related assets that the PAC is meant to examine after the event, ie it has an audit related function.

The Scottish economist James Wilson (1805-1860) said: “Finance is not mere arithmetic; finance is a great policy. Without sound finance, no sound government is possible.” This remains a truism over 150 years later.

The machinery on which much of the Irish governmental system of finance is based was established by William Gladstone in 1866, while he was still chancellor of the Exchequer. His legislation, the Exchequer Audit Departments Act, created the Public Accounts Committee (PAC) and office of Comptroller and Auditor General (C&AG).

The PAC is always chaired by a deputy from the largest opposition party and the comptroller and auditor general is appointed by the President, on the nomination of the Government (by recent convention, following consultation with the chairman of the PAC).

Because taxation and spending matters are a direct constitutional responsibility of the Dail, the PAC is a Dail (not an Oireachtas) committee. What gives this committee great status is that the C&AG reports directly to the Dail (not the government) and his reports are automatically referred to the PAC for their examination. Furthermore, the C&AG is permanently present at the PAC, as a witness, when other relevant witnesses are called to account.

The meat of the PAC’s examinations is the C&AG’s report on how each department of State has cared for the taxpayers’ money and assets.

Gladstone provided that each spending department would have an accounting officer – the most senior permanent head… in Ireland’s case almost always, with some exceptions such as the Garda Commissioner, the secretary-general of the department, not the minister of the day.

So, the PAC is meant to avoid policy (this is for ministers and the Dail) and to deal with regularity of spending, ie did the Dail approve such spending and did it come in on budget? And, since 1993, was value for money based on economy, efficiency and effectiveness obtained?

When I became chairman in 1987, there were huge arrears in PAC annual reports, some of them going back many years. I set about driving the clearance of this backlog (related to the number of elections in the period) and, at the same time, setting up the Advisory Committee on Public Financial Accountability, which I also chaired. This group recommended those new powers of Value for Money (VFM) auditing for the C&AG.

VFM can be explained as follows: if the Government bought, say, polio vaccines, at the lowest price consistent with quality (economy), if it said on the tin that a unit of vaccine should immunise 10 people, did we get 10 shots (efficiency), and did polio reduce to the levels expected (effectiveness)?

Just over half a century ago Paul Einzig, in his book The Control of the Purse: Progress and Decline of Parliament’s Financial Control, wrote that: “Even the boldest officials, who would stand up to ministers, awaited with trepidation the annual ordeal of giving evidence before the PAC.”

One former secretary general told me after he retired that appearing before his departmental committee made him prepare, but appearing before the PAC made him lose sleep. Sometimes there was good reason for this sleeplessness.

The Government has no money of its own. The Dail takes money from taxpayers and entrusts it to the Government. Therefore, the Government must answer to the Dail for that spending. In this process Gladstone described the PAC as “the last portion of the circle of control”.

In the 1970s-1980s, much criticism was voiced about our system of public financial accountability. This included concerns raised by the Government’s legal adviser, the attorney general.

That issue was comprehensively addressed by the Advisory Group Report (which took only six months to report) and by the legislation it recommended.

This was introduced in 1993 by Bertie Ahern TD as Minister for Finance, with the support of his departmental secretary general. It was in every way a co-operative outcome.

As chairman, I tried to make the committee more relevant and up-to-date. There is no doubt this resulted in some headline seeking, but we did our job and reformed the system at the same time. The late Brendan McGahon, TD, a man for whom I had great regard, told the PAC that sheep were so often moved, to claim grants twice, backwards and forwards across the border in high trucks, that they had vertigo. Things have moved beyond the humorous and there is some evidence that Dail proceedings are not always protective of citizens’ rights – especially the right to a good name.

There are now departmental Oireachtas Committees to deal with policy. The PAC is our audit committee and is a great instrument of public accountability, but it must act within its quite powerful remit. Sound public finances require it.

Gay Mitchell is author of ‘By Dail Account, Auditing of Government – Past, Present and Future’, published by the IPA, 2010, and was chairman of the PAC (1987-93)

Sunday Independent

LEAVE A REPLY

Please enter your comment!
Please enter your name here