1 - The sub-committee recommends that the Minister for Finance in the Finance Bill, 2000 or as soon as is feasible, make such provisions as are necessary to give effect to the following:
There shall be a requirement on the Revenue Commissioners to undertake a full look-back audit to April 1986 of each financial institution to assess DIRT liability;
The cost of the look-back be borne by the financial institutions being audited;
The full interest and penalties be paid in respect of DIRT arrears assessed irrespective of any currently existing statutory time limits;
That for the purposes of this review, Revenue may delegate the work in whole or in part to suitably qualified outside persons and/or may engage such consultants as it finds necessary to assist in the review;
The look-back be completed by September 1st, 2000;
The Revenue be empowered and required to report for public information only, before November 1st, 2000, to the Committee of Public Accounts, the results of its look-back in the case of each institution, specifying the DIRT arrears levied, the interest charged, the penalties imposed, any comments considered to be appropriate and if any appeal has been lodged;
Measures to ensure that the appeals process is expedited;
Provision is made for the results to be made public on determination.
2 - The sub-committee recommends that the Minister for Finance prepare proposals for the enactment by the 28th Dail of a Revenue Act to provide a clear and modern framework in law for the Revenue Commissioners.
3 - The sub-committee recommends that the drafting of the Bill be preceded by a general review by the Public Service Management and Development Division of the Department of Finance of the Revenue Commissioners and that the results of this review be reported to the Committee of Public Accounts within six months.
The review should address the issues of independence and accountability, organisation, structures and practices and the desirability or otherwise of executive and non-executive commissioners on the Board of Revenue.
Review group on Auditors:
4 - The sub-committee recommends that a detailed examination be undertaken by a review group established by the Department of Enterprise, Trade and Employment and that the review group examines:
Whether accountancy firms appointed to undertake external audit should be involved in the provision of other services to the same financial institution;
Whether the external audit function is compromised or undermined by the extent of modern-day intermingling of functions - audit, tax advice, consultancy, etc;
How the issue of fees can be determined in such a way as to give primacy to the interests of shareholders and in a manner that respects the central importance of the audit process;
What the sub-committee perceives as possible over dependence of the external auditor on a management that in practice appoints and remunerates the external auditor;
If the balance of relationships between audit and other functions is reflected correctly in the statutory provisions of the Companies Acts and related codes;
The role of the external auditor in ensuring compliance with statutory provisions (eg the DIRT legislation) and whether the existing statutory audit requirements adequately address this issue;
The sub-committee's view that the Central Bank should prescribe the scope of management letters issued by external auditors to financial institutions and that the Central Bank receive and discuss management letters with management and its external auditors on an annual basis;
The sub-committee's view that the specific audit standards pertaining to financial institutions be strengthened;
The suitability of having joint auditors to financial institutions, one of which to be proposed and appointed by the Central Bank;
The view of the sub-committee that there should be a maximum term of five years for any Auditor to a financial institution after which a new audit firm must be appointed.
5 - The sub-committee recommends that the review group established by the Department of Enterprise, Trade and Employment reports back to the Oireachtas within six months of the date of this report.
6 - The sub-committee recommends (in relation to legislation for the operation of the financial services sector, involving the establishment of a Single Regulator for the sector) that in preparing this legislation, the Department of Finance in consultation with the Department of Enterprise, Trade and Employment have regard to the following:
That the Single Regulator address ethics, professional standards and corporate governance in the provision of financial services in Ireland;
The requirement that each licensed and regulated financial institution appoints a Tax Compliance Officer, to be the Chief Executive Officer of the licensed institution;
The detailed rules and requirements in relation to the duties of directors of financial institutions to be proposed for the Single Regulator; and
A scheme and procedure for bank officials to report suspected wrongdoing.
7 - The sub-committee recommends that within six months an outline of the proposals for legislation in this regard be presented to the Oireachtas.
8 - The sub-committee recommends that the Minister for Finance consider implementation of the system of independent auditor described by the Appointed Auditor.
9 - The sub-committee recommends that the Government ensure that the Foundation for Investing in Communities is established as a Community Foundation in line with the findings in the report prepared by the Combat Poverty Agency, Community Foundations - an Introductory Report on International Experience and Irish Potential (1998).
10 - The sub-committee recommends that the Government consider the imposition of a levy on the financial institutions the proceeds of which go towards the funding of the Foundation for Investing in Communities including the National Endowment, the Children's Trust and Business in the Community.
11 - The sub-committee recommends that, as soon as is feasible, legislation be prepared by the Minister for Finance so that the resource represented by funds in dormant accounts may be used for specified purposes of societal and community benefit. There is a precedent in the Funds of Suitors provisions.
The sub-committee recognises that this recommendation raises important considerations including property rights and liquidity issues.
The sub-committee recognises that the Minister for Finance should have discretion as to the timing and content of the proposal.
12 - The sub-committee recommends:
The establishment of an independent permanent Oireachtas Commission, similar to the UK Parliamentary Commission.
The commission should be chaired by the Ceann Comhairle and oversee and control the funding, staffing and organisation of the Houses of the Oireachtas;
That the committee system should be funded from a separate vote and that the Ceann Comhairle should be accountable to the Oireachtas for the assistance to and approval of the Oireachtas Commission;
That the vote for the Houses of the Oireachtas be increased substantially for the year 2000 and future years;
That the preparation of the vote for the Oireachtas Commission be independent of the Department of Finance and should be proposed to the Dail by the Ceann Comhairle.
13 - The sub-committee recommends the establishment by Houses of the Oireachtas of an Oireachtas Law Agent to act as:
Legal adviser to the Houses of the Oireachtas; and
Provide ongoing legal and procedural advice to Oireachtas committees and sub-committees and represent the Houses of the Oireachtas in any legal matter including procedures in hearings under the Compellability Act, 1997.
14 - The sub-committee recommends that provision is made in law so that the Houses of the Oireachtas may:
Appoint from time to time a Parliamentary Inspector with powers similar to and adapted from those of a High Court Inspector; and
Appoint persons as Parliamentary Inspector including certain Officers of State (eg the Comptroller and Auditor General).
15 - The Sub-Committee recommends:
A parliamentary inspection be initiated only by resolution of the Houses of the Oireachtas;
The resolution sets out clearly defined terms of reference for the inspector and designates a relevant committee to which the Parliamentary Inspector shall report;
The committee's remit in relation to the issue under inquiry be clearly defined in the same resolution; and
The Parliamentary Inspector should report directly to the Oireachtas Committee designated in the resolution; and
That the committees of the Oireachtas are granted the Right of Initiative in proposing an inquiry and any motion to that effect from a committee should be decided upon in the Houses of the Oireachtas within 21 days and that standing orders of both Houses of the Oireachtas be changed to give effect to this.
Legislating and parliamentary questions:
16 - The Sub-Committee recommends:
1. Urgent consideration be given to an increasing role for Oireachtas committees in
The passage of legislation, especially as a means of avoiding hasty scrutiny
The taking of questions for oral reply not reached in the House
2. Meetings of committees should not be scheduled to run in parallel with plenary sessions of the Oireachtas.
Accountability of Chief Executive Officers:
17 - The sub-committee recommends that where ministers are not accountable for operational decisions of State companies, the chairman and chief executive should be amendable to the appropriate Oireachtas committee.
Possible conflict of interest - Civil Servants:
18 - The sub-committee recommends that the Department of Finance report back to the Committee of Public Accounts within six months on proposals to avoid any conflict of interest where officials leave the civil service for employment in the private sector.
Future parliamentary inquiries:
19 - The sub-committee recommends that:
1. Committees
Each Chairman of an Oireachtas committee is fully briefed on the modalities of parliamentary inquiries;
A handbook of parliamentary inquiries be prepared by the Secretariat of committees; and
Powers of discovery for committees be amended so that any documentary discovery made by any Parliamentary Inspector is automatically discovered to the committee.
3. Witnesses
General powers of Direction of Witnesses be included in the resolution of the Oireachtas establishing a parliamentary inquiry;
The procedures for taking of evidence before a parliamentary inquiry provides for groups of witnesses to be taken; and
That all witnesses appearing before a committee to which the Compellability Act, 1997 applies should be under direction.
3. Business
All business, including ordinary business of the Committee of Public Accounts should be under direction;
All parliamentary inquiries be conducted by a sub-committee of manageable size;
Provisions should be made to have all further parliamentary inquiries and tribunals of inquiry broadcast live on television; and
A comparative study be undertaken by the Department of Finance and the Attorney General's office into parliamentary inquiries and tribunals of inquiry in the light of this inquiry and to report back to the Oireachtas by December 1st, 2000.