Democratic accountability and the Committee of Public Accounts

Introduction

Apart from their representative and legislative roles, pursuing oversight of the executive in respect of intended policy actions and completed activities is a defining feature of the legislature in parliamentary democracies. Typically, this accountability-seeking work is concerned with policy performance, process and – the subject of this celebratory publication – finance. Ensuring that a parliament is adequately equipped to pursue its responsibilities for these issues is important not alone for the efficient management of its business, but for public trust in the integrity of governing institutions and the legitimacy of the wider political system. Typically, audit committees are used to assist with this task. In this paper, the evolving role of the Irish Committee of Public Accounts (or to use the more common term, the Public Accounts Committee, or PAC) in parliamentary and public life is examined, particularly in respect of its relationship with the work of the Office of the Comptroller and Auditor-General. It is proposed that over the last century, expectations surrounding public accountability have changed significantly and with it the role of the PAC, which finds itself as but one amongst several accountability-seeking forums today.

Parliamentary audit committees and accountability

As Foster (2015) identifies, when it comes to public finances parliaments are traditionally concerned with regularity, i.e. ensuring that public money can only be used for the purposes for which it is authorized; and propriety, i.e. ensuring that public money is used in accordance with recognized legal standards. The essential role of a parliamentary audit committee is to fulfil these accountability-seeking functions and to act as a ‘watchdog’ for the taxpayer to ensure that the circle of financial control is complete, i.e. that all money voted by parliament can be accounted for. Indeed the very term accountability has its roots in the presentation and verification of these financial ‘accounts’.

The first such formal parliamentary committee charged with checking government spending behaviour was that created in the Norwegian parliament in 1814, with the Westminster equivalent emerging almost a half-century later in 1861 (Staphenhurst and Larson 2018, p.5). Over a century later, the latter was described as the most effective and important parliamentary committee in Westminster (Flegmann 1979). The Westminster system of financial oversight to this day is underpinned by the seminal Exchequer and Audit Departments Act of 1866 which merged two historic offices to create the Office of Comptroller and Auditor-General (C&AG):

• The Comptroller General of the Exchequer (responsible for ex ante authorisation of public expenditure), and

• The Commissioners of Audit (responsible for ex-post certification that the expenditure complied with the purposes for which it was authorised

In those states adopting this Westminster model of government the C&AG performs a vital role as, just as parliaments require good information to carry out their role scrutinising government, so too do PACs require relevant evidence to be effective. Therefore reports by the C&AG concerning the use and management of public sector resources provide the knowledge foundation for the work of the PAC.

In the Irish case, the issue of audit actually featured as part of the effort to develop a shadow state following the 1918 election (Biggins et al. 2024). The fourth of only five articles in the 1919 ‘Constitution of Dáil Éireann’ stated that:

All monies required by the Ministry [i.e. the executive] shall be obtained on vote of the Dail. The Ministry shall be responsible to the Dail for all monies so obtained, and shall present properly audited accounts for the expenditure of same during the month of November, 1919, and thereafter - twice yearly - in the months of May and November. The audit shall be conducted by an Auditor or Auditors appointed by the Dail. No member of the Dail shall be eligible for such appointment.

This model of an independent constitutional officer working hand-in-glove with a parliamentary committee was later enshrined in the Irish Free State Constitution in 1922, which provided for the Dáil to appoint a Comptroller and Auditor General (C&AG) to ‘control all disbursements’ and ‘audit all accounts of moneys administered by or under authority of the Oireachtas’ and to report to the Dáil (Constitution of the Irish Free State (Saorstát Eireann) Act 1922, Article 62). This carried over to the successor 1937 Constitution of Ireland/Bunreacht na hÉireann, which notes at Article 33.4 that ‘The Comptroller and Auditor General shall report to Dáil Éireann at stated periods as determined by law’. (Government of Ireland 1937). It was one of very few explicit accountability seeking institutions (outside of the judicial system) specified in the Constitution. Neither the 1922 nor the 1937 constitutions detailed how the C&AG was to engage with parliament in practice, but the use of a standing parliamentary committee – the Committee of Public Accounts, or as it became known the Public Accounts Committee or PAC - to receive and examine these reports was the format chosen (Scott and MacCarthaigh 2023).

The PAC is a standing committee, i.e. under the rules or Standing Orders of the House, it must be created following a general election. Its work today is defined by Standing Order 218, which establishes that as well as its examination of state expenditure and other reports by the C&AG, it also must check ‘that value for money has been achieved’. The Committee has also traditionally enjoyed the quasi-judicial power to send for ‘persons, papers and records’, and unlike other parliamentary committees does not have to first apply for this power via the Committee on Parliamentary Privilege and Oversight. Although it traditionally had 12 members, including a chair and vice-chair, the most recent version of the Standing Order 218 provides for 13 members. By tradition, the chair is not a member of one of the government parties and members are expected to take a non-partisan approach to PAC work.

The work of the PAC is based on an annual cycle and is of an ex-post nature. Over the course of the year, rather than calling before it Ministers who decide on policy, it calls each ‘Accounting Officer’, i.e. those senior public servants with responsibility for budgetary management in their organisations. This includes the Secretaries-General of each government department, who must appear before it and answer questions about their management and use of public funds. No Accounting Officer wishes to be found wanting at public PAC sittings and will seek to manage their organisations’ resources in such a manner that minimises time and difficult questions at the PAC. For each such sitting the C&AG prepares a short brief for members of the Committee for the account under examination. He or she also attends these hearings as a witness and can give evidence orally (Hamell 2010). The quality of the work of the PAC is only as effective as the information it receives, and so the relationship it has with the Comptroller and Auditor-General is vital to its work and the reports of that office provide the raw material for the PAC’s assessments and subsequent reports. When the PAC concludes its examination of accounts or of annual or other reports of the C&AG, it presents a report to the Dáil, which is then publicly available.

By way of example, the PAC’s annual report for 2021, published in mid-2022, noted that it met 56 times during that year and heard from 150 witnesses (Committee of Public Accounts 2022). It published seven reports (outside of the annual report) and made recommendations across a variety of policy issues, from prefabricated accommodation at schools to the use of paper payslips in the public sector. Its work also led to further reviews of spending issues and practices elsewhere in the administrative system. Unlike other committee recommendations presented to the Dáil, the PAC is the only one whose recommendations must receive a response from Minister for Public Expenditure, known as a ‘Minute of the Minister’.

The presence of the C&AG at PAC meetings and its formal relationship with the office also provides for an essential longitudinal perspective to the latter’s work. Other Oireachtas committees may suffer from institutional memory loss arising from the departure and replacement of members and wholescale changes after elections, but the PAC has traditionally had the advantage of a constitutional office who records the outcome of those recommendations it has suggested to the committees. This continuity is a distinctive feature of the PACs work, alongside its institutional advantages as outlined by Lynch (2023) as well as its own recently-developed system for monitoring recommendations in PAC reports. It also has a tradition of not voting on matters so as to avoid majoritarian or traditional government-versus-opposition approaches to matters of financial probity, though on occasion a vote has taken place.

The PAC and democratic legitimacy

In pursuing its role, the PAC achieves a number of important symbolic and legitimating functions. Modern states spend a lot of money which are channelled through a complex web of public sector organisational entities. Making sure that the national parliament is aware of precisely how that money is being used on behalf of the people is an accepted feature of democratic government. In the first instance therefore, parliamentary accountability for public finance is an essential element in the formal constitutional framework for maintaining fiscal discipline and preventing the misuse or misappropriation of public resources.

Secondly, the PAC brings public transparency and political accountability to government operations through its work (and that of the C&AG) providing oversight of public finances. The very fact that spending activity will be subject to scrutiny and any improper use of funds brought to public attention influences the behaviour of those with budgetary responsibility. Effective and transparent financial scrutiny limits the space for secrecy and forces disclosure. This in turn plays a role in fostering public trust in the activities of public agencies.

Thirdly, through its work in seeking out irregularities or misuse of funds, the PAC can recommend new measures or methods to guard against corruption and financial mismanagement. Lynch (2023, pp.81-2) records how some PAC chairs have used the Committee’s profile to advance changes to financial oversight practices in parliament, as well as to wider parliamentary accountability functions. The PAC has also been central to several high-profile events in Irish public life in recent decades, including the Arms Crisis (Dáil Committee of Public Accounts 1970), the Deposit Interest Retention Tax (DIRT) Inquiry (Dáil Committee of Public Accounts 2000) and in more recent times its work establishing a framework for the 2014 banking inquiry (Committee of Public Accounts 2012). Again this serves an important legitimating function for parliamentary democracy by seeking to maintain high standards of integrity across government.

Finally, the fact that the PAC is chaired by a member of the opposition, and has members from most if not all of the political parties represented in Dáil Éireann means that there is some alignment between state spending activities and the broad interests and beliefs of the electorate. Members of the PAC can question decisions around the allocation of funding for issues of particular importance to their constituencies and communities, and in so doing reflect diversity of views amongst the population about the use of state resources.

Changes to financial accountability

In line with global trends seeking more efficiency in public sector spending, the role of state auditors has changed quite significantly since the 1980s, moving beyond merely closing the circle of financial control by ensuring that all monies allocated by parliament can be accounted for in a financial year. The main development has been in respect of the ability of such auditors to comment on how money is used, albeit without straying into casting judgement on what are ultimately political decisions about policy. In the Irish case, these changes were manifested in the Comptroller and Auditor-General (Amendment) Act 1993, which did two things. Firstly, it codified in domestic legislation the procedures for C&AG control over disbursements and the annual audit of appropriation accounts, though it retained some elements of the pre-independence legislation. Secondly, it gave the office powers to engage in ‘value for money’ (VFM) audits with respect to any organisation under its remit. VFM audit involves the examination of public funds with a view to determining if they have been used:

• Effectively (whether the purpose for which the funds have been allocated has been achieved)

• Efficiently (what has been the bang for buck, and could the same ends have been achieved with less expenditure?)

• Economically (how much has been spent) (see also Scott and MacCarthaigh 2023, pp.10-11)

This shift from purely financial probity, i.e. making sure that money allocated for something was spent on that issue and nothing else, to integrating performance auditing mechanisms such as VFM assessments in its reports has naturally increased the volume of information presented to the PAC and the time required to examine it. It also changed the character of the audit work of the PAC, which as O’Halpin noted in his review of the Committee’s work between 1961 and 1980, had come to be viewed as ‘a tiresome formality, largely irrelevant to the management of national affairs’ (1985, p. 509).

The PAC within a changing accountability eco-system

Though the work of the PAC has changed considerably since 1922, it remains the case that many of the practices, procedures and even language surrounding the parliamentary stages of the annual financial and budgetary cycle remain remarkably unchanged from 1922. This point was noted in a critical review by the IMF of the Irish budgetary process in 2013 (International Monetary Fund 2013). In their review of budgetary oversight, Downes and Nichol also identified ongoing limitations to the financial oversight work of the parliament, noting that:

…the issues of effectiveness in policy delivery, and value-for-money across the totality of public expenditure, do not necessarily get a uniform level of attention and scrutiny’ and that there was a need to bring ‘the performance discussion more formally into the remit of the PAC (2016, p.87, 110).

Also, and apart from the 1993 Comptroller and Auditor-General (Amendment) Act, there have been wider changes to the budgetary process over the last quarter-century, and particularly since the 2008 financial crisis which severely affected the Irish state (Curry 2024). These include:

• Greater use of medium-term planning horizons (for current expenditure)

• Alignment of national budgetary rules to those of the EU

• Advancements in economic and budgetary forecasting

• The creation of new institutions, namely

  • The Irish Fiscal Advisory Council (external to parliament)

  • The Dáil Committee on Budgetary Oversight and the Parliamentary Budget Office (within parliament)

The resources available to committees as well as individual TDs and Senators are enormously better today compared with even twenty years ago. Furthermore, access to information about public finances and government spending is more easily achieved by means of data and analyses published by state regulatory bodies as well as NGOs, academics and non-state watchdogs. The PAC is also not immune from the larger number of print and social media sources keen to seek out and report on any maladministration, financial impropriety or wasteful spending. While some of this may be sensationalist in tone, the PAC cannot be blind to issues of public concern surrounding state finances as published in such media.

While it may have been uniquely placed a century ago as the only accountability-seeking parliamentary forum outside the main chambers, today the PAC sits alongside a number of parliamentary committees, most of which also concern themselves with issues of probity and effective use of public money as part of their remit. Indeed Lynch (2023, p. 80) points out that although it is one of over thirty parliamentary committees, the PAC received over 20% of Oireachtas committee coverage in Irish national and provincial newspapers during the course of the thirty-third Dáil (2020-24).

Furthermore, although the PAC is quite distinctive within the Oireachtas committee system, it does need the cooperation of these committees and to coordinate with them effectively. Given that the PAC’s remit encompasses the breadth of government operations, occasional ‘turf wars’ may emerge between it and departmentally-focused committees over who has jurisdiction in a matter. For example, in 2012 the Public Accounts Committee and the Joint Finance Committee both argued they should be allowed conduct a proposed inquiry into the 2008 banking crisis (McGee 2012). Similarly, in 2021 the chair of the Joint Committee on Social Protection wrote to the chair of the PAC asking for that committee to cease its work investigation bogus self-employment claims as it was working on the issue (Brennan and McConnell 2021). And in 2024 both the PAC and the Joint Committee on Tourism, Culture, Arts, Sport and Media held parallel public sessions inquiring into financial practices at national broadcaster RTÉ (Horgan-Jones and Leahy 2024)

Finally, important changes to Irish financial reporting have affected the work of the PAC. As part of the 2010-13 loan programme agreed between the Irish government and the ‘Troika’ of the IMF, European Central Bank and European Commission, a series of financial management reforms were introduced. Many of these had been discussed prior to 2008 but the context of the crisis accelerated their implementation. These included the introduction of a performance budgeting system under the aegis of the new Department of Public Expenditure and Reform created in 2011 (MacCarthaigh 2017, pp.193-212). The use and analysis of performance information by the Oireachtas remained weak however, and a review by the Organisation for Economic Cooperation and Development (OECD) published in 2015 found room for much greater political engagement in budgetary priority-setting and oversight, including by the PAC (OECD 2015). The report noted that ‘the level of budget engagement of the Houses of the Oireachtas is the lowest observed in any OECD country’ (OECD, 2015: 82) and its recommendations were instrumental in the creation of the Committee on Budgetary Oversight and the Parliamentary Budget Office mentioned above.

Since then, considerable effort has since been invested in moving the Irish system of public sector financial reporting from a cash-based to an accruals-based one (Moretti et al., 2019; Connolly and Stewart 2021). In 2019 the government approved a decision to introduce accrual accounting in central government departments and offices, based on the International Public Sector Accounting Standards (IPSAS) across the public sector and to consolidate all public sector entities into a ‘whole of government’ account (rather than a series of vote accounts). Curry (2024) notes how similar changes in the UK have sought to assist macro-economic planning and the transparency of public finances. The PAC will play an important role in the use and interpretation of the new data in the political decision-making arena.

The next century of the PAC

The quantum of Irish government spending has never been as large as it is today and continues to grow annually. This places considerable burden on the state’s financial oversight infrastructure to ensure that all spending is accounted for and that there is public trust in the system of public sector audit and financial accountability. Within this the PAC will retain a distinctive and essential role on behalf of parliament. In achieving this role, the ability to access high-quality information through the C&AG, a bi-partisan approach to its work, and the freedom to raise issues as it feels necessary remain as the central elements of the PAC’s work. Transparency in its processes will also remain an important guiding principle, as it fosters trust.

Looking forward and in order to ensure the ongoing relevance of the PAC it is useful to consider the factors identified by Stapenhurst and Larson (2018) and the Commonwealth Parliamentary Association (2022) which they suggest influence the effectiveness of PACs:

• Opportunity, i.e. that the institutional and legal framework within which the PAC operates remains robust.

• Capacity, i.e. that the PAC has the necessary resources available to it to achieve its work, including committee member skill, financial and knowledge resources.

• Motivation, i.e. that members have the political will to achieve their mandate and retain freedom from executive influence or partisan considerations.

Attention to all three should inform any future reforms of the PAC or the parliamentary oversight function more broadly so as to ensure the Oireachtas fulfils this critical part of its democratic mandate. The PAC will also not be immune to the increasing role played by technology and AI across all aspects of government and should be able to take advantage of such developments to gain better analyses of how public money is being used as well as to publicise its work. Finally, while some overlap may be inevitable given its range of interests, ensuring there are clear lines between any inquiries performed by the PAC and other sectoral committees will be important so as to avoid redundancy of effort.

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