– having regard to Article 286(2) of the Treaty on the Functioning of the EU, pursuant to which the Council consulted Parliament (C7-0033/2010),
– having regard to the fact that, at its meeting of 15 March 2010, the Committee on Budgetary Control heard the Council’s nominee for membership of the Court of Auditors,
– having regard to Rule 108 of its Rules of Procedure,
– having regard to the report of the Committee on Budgetary Control (A7-0043/2010),
A. whereas Eoin O’Shea fulfils the conditions laid down in Article 286(1) of the Treaty on the Functioning of the EU,
1. Delivers a favourable opinion on the nomination of Eoin O’Shea as a Member of the Court of Auditors;
2. Instructs its President to forward this decision to the Council and, for information, the Court of Auditors, the other institutions of the European Union and the audit institutions of the Member States.
ANNEX 1: CURRICULUM VITAE OF Eoin O’Shea
·Chartered Accountant, Institute of Chartered Accountants in Ireland, 2000
·Member of the Irish Taxation Institute, 2005
·Diploma in Commercial Law, Law Society of Ireland, 2006
·Diploma in Legal Studies, Honorable Society of King’s Inns, 2008
·Degree of Barrister at Law, Honorable Society of King’s Inns, 2009 (Merit)
·Diploma in Commercial Litigation, Law Society of Ireland, 2009 (Merit)
Chairman, Ground Marketing Group 2000-Date
Founder of strategic marketing communications company, Ground Marketing Group in 2000. The company provides strategic marketing consulting to large national and international clients. In December 2009, the business became part of the international advertising agency, Havas Plc, and currently trades as Ground 4D Ireland.
Chief Executive, Institute of Directors in Ireland 2006-2008
Represented the interests of senior company directors in Ireland. Wrote policy and position papers on company law, competition law and taxation. Advised members on commercial and business matters. Interacted with ODCE, CRO, Dept Enterprise Trade and Employment and Dept. Finance on directors’ issues. Served on the advisory committee of the Companies Registration Office and the management committee of the IoD Centre for Corporate Governance at UCD. Lectured on the topic of non-executive directors at the UCD Centre for Corporate Governance.
Institute of Chartered Accountants in Ireland. – Served as Council Member 2005-2008, Chairman of Members in Business 2006-2008 and Member of the Ethics Committee 2005-2006.
Garda Audit Committee. – Appointed as a member of the audit committee of An Garda Siochána in October 2008 by the Minister for Justice and reappointed in October 2009 for a three year term. The audit committee’s role is to advise the Garda Commissioner on the use of state resources under his control.
Comhaltas Ceoltoiri Eireann – Appointed in January 2009 by the Department of Arts, Sport and Tourism and the Department of Community, Rural and Gaeltacht Affairs, to conduct a review of state spending of c. EUR 20 million on the development programme of Comhaltas Ceoltoiri Eireann, a national voluntary body which promotes Irish traditional music. Report presented July 2009, published September 2009.
St Andrews Agreement Review. – Appointed, in November 2007, pursuant to the St Andrews Agreement, as an expert/adviser to review the efficiency and effectiveness of the North/South bodies established under the Good Friday Agreement. Appointed by the Irish Government, in co-operation with the Northern Executive and the North South Ministerial Council. Our interim report was accepted by the North South Ministerial Council, meeting in plenary format, in February 2009.
Chartered Accountants Benevolent Association. – Appointed a Director of this charitable body in 2009. The Association assists members of the profession experiencing financial difficulties
Institute of Management Consultants in Ireland. – Served as President of the Institute 2005-2006, Vice President 2003-2005 and Treasurer 2003-2005.
Personal Details. – Aged 33, Mr O’Shea is married and lives in Dublin. He is originally from Athlone, Co Westmeath.
ANNEX 2: ANSWERS BY Eoin O’Shea TO THE QUESTIONNAIRE
1. Please highlight the main aspects of your professional experience in public finance, management or management auditing.
I am a member of the Institute of Chartered Accountants in Ireland since 2000. From 2005 to 2008, I was a member of the Council of the Institute, the supreme governing body of the Chartered Accountancy Profession on the island of Ireland. In that capacity, I served as member of the Institute’s Ethics Committee (2005-2006) and as Chairman of the Members in Business Committee (2006-2008). In 2009, I was appointed as a director of the Chartered Accountants' Benevolent Association which is a charitable body that assists members of the accounting profession who are experiencing financial difficulties.
I am a member of the Irish Taxation Institute since 2005 and I hold Diplomas in Commercial Law (2006) and Commercial Litigation (2009) from the Law Society of Ireland.
While working as an Accountant and Management Consultant from 1996-2000, I conducted financial and general management reviews in Government Departments, State Agencies and large private concerns. This involved reviewing financial systems and staffing in these organisations and preparing reports to include recommendations on how the financial function should be improved. In 2005, the members of the management consulting profession in Ireland elected me President of the Institute of Management Consultants in Ireland (IMCI), prior to which I had served for three years as Treasurer of the Institute. During that time, I implemented a merger of IMCI and the Institute of Business Advisors which brought together both components of the business advisory profession in Ireland.
In 2000, I co-established Ground Marketing Group, a company which provided marketing advice and assistance to large Irish and international brands. The company’s role is to assist clients to better communicate with their customer audiences to build long term loyalty for their businesses. I was Managing Director of this company until 2006, at which point I became non-executive Chairman. The company achieved considerable success and received many peer-led awards including the national Grand Prix and a European Promotional Marketing Association Award. In 2009, the company became part of the International Advertising Agency, Havas Plc and now trades as Ground 4D Ireland. I have relinquished all positions at this company.
Between 2006 and 2008, I served as Chief Executive of the Institute of Directors in Ireland, a body tasked with representing the collective interests of Ireland’s business leaders. In that regard, I interacted with Government Departments on such issues as company law, taxation, competition law and corporate governance. I served on the advisory committee of the Companies Registration Office and on the Management Committee of the Centre for Corporate Governance, an educational establishment at University College Dublin dedicated to the promotion of excellent corporate governance.
I was appointed a member of the Audit Committee of An Garda Siochana (Ireland’s police force), by the Minister for Justice in 2008 and was re-appointed in 2009. I was responsible, together with four colleagues, for overseeing the operations of the internal audit unit, the establishment of a risk register, considering the reports and recommendations arising from audits conducted and in reporting to and advising the Commissioner of An Garda Siochana (Irish Police Force) on the management of the State resources under his control.
I was appointed by the Irish Government to undertake two significant, high profile, public financial reviews, as follows:
In 1999, six ‘North/South Implementation Bodies’ were established by the Irish and British Governments. These ‘North/South Implementation Bodies’ have executive cross-border responsibilities in the areas of tourism, trade promotion, health promotion, language development, EU funding implementation, waterways and certain fisheries. These bodies have supra-national status, reporting to a ‘North South Ministerial Council’ composed of Ministers from the Northern Ireland Executive and the Irish Government. At the time of a furtherAgreement, signed at St Andrews, Scotland, in 2006 (The ‘St Andrew’s Agreement’), the parties considered that a wide ranging review of the efficiency and value for money of each of the Implementation Bodies should be undertaken, together with an examination of the case for additional such Bodies. In that regard, I was appointed by the Irish Government, in 2007, as an expert adviser to the Review Group conducting the work of the review. Our work in connection with the examination of the effectiveness and value for money of the existing bodies was completed in 2008and this was noted by the North South Ministerial Council at its meeting in January 2009.
In 2008-2009, I was tasked by two Irish Government Departments with reviewing the effectiveness of State financial grants to a voluntary body, Comhaltas Ceoltoiri Eireann that promotes Irish Traditional music, dance and language. The State was the major funder of Comhaltas’ Development Programme which involved considerable aggregate sums of capital and current expenditure. Together with reporting on the financial controls, volume of expenditure and the financial outcomes, the report commented on and proposed a solution for a major issue within that organisation. My report was presented and published in 2009; the solution proposed was accepted and is being implemented.
I qualified as a Barrister (Irish lawyer-advocate) in 2009 and have been practising in the fields of corporate insolvency, company law, corporate dispute resolution and taxation.
I am currently (2010) studying for a Diploma in Insolvency and Corporate Restructuring with the Law Society of Ireland and to become an Associate of the Association of Certified Fraud Examiners.
2. What are the three most important decisions to which you have been party in your professional life?
During my career, I have been privileged to have been party to the following significant decisions:
St Andrew’s Review Group
The St Andrews Agreement (referred to in Question 1 above) was agreed in 2006 and formed the basis for the restoration of a power-sharing Executive (composed of Ministers) and Assembly (Composed of directly elected members, from which the Executive are chosen) in Northern Ireland. The Agreement provided, inter alia, for the establishment of a Review Group to consider the efficiency and value for money of ‘North/South Implementation Bodies’ (referred to in Question 1 Above) which had been established seven years beforehand. I was appointed, in 2007, by the Irish Government to be a member of a four-person team, comprised of members of different political backgrounds, tasked to bring an independent and impartial perspective to the evaluation of the efficiency and value for money of those Bodies. Following extensive work, involving public meetings, management meetings and documentary review, our report on the efficiency and value for money aspects was noted by the North South Ministerial Council (a Council comprising of Ministers from the Irish Government and the Northern Ireland Executive) in January 2009.
Merger of Management Consulting Bodies in Ireland
As President of the Institute of Management Consultants in Ireland (IMCI) from 2005 to 2006, I was charged with the development and implementation of a merger agreement with another body, the Institute of Business Advisors. The rationale behind the merger was to achieve critical mass and to combine financial and organizational resources. The merger was implemented during my term of Office. The combined Institute is known as the Institute of Management Consultants and Advisors (IMCA).
Sale of Ground Marketing Group
In 2009, a business in which I was a shareholder and Chairman, Ground Marketing Group (Ground), became part, in a significant corporate finance transaction, of Havas Plc, a large international advertising agency. I, together with colleagues established Ground in 2000. Since then, the company had grown to be one of Ireland’s leading marketing agencies. The selection, conclusion and outworking of the agreement was a significant event in my career.
3. The Treaty stipulates that the Members of the Court of Auditors shall be ‘completely independent’ in the performance of their duties’. How would you apply this obligation to your prospective duties?
I will strictly adhere to the provisions of the Treaty in this regard and to the Code of Conduct for Members which, inter alia, includes specific provisions concerning independence, and impartiality. Please refer also to my replies to questions 4 to 7.
4. Have you received a discharge for the management duties you carried out previously, if such a procedure applies?
I have resigned from all of my Company Directorships and my membership of the Audit Committee of An Garda Siochana (Irish Police Force). I have informed the Irish Government that I will be unable to continue my involvement with the St Andrew’s Review Group.
5. Do you have any business or financial holdings or any other commitments, which might conflict, with your prospective duties? Are you prepared to disclose all your financial interests and other commitments to the President of the Court and make them public? In the event that you are involved in any current legal proceedings, would you please give details?
I have no business or financial holdings or any other commitments which might conflict with the duties of a Member of the European Court of Auditors.
I am prepared to disclose my financial interests and other commitments to the President of the Court and to make them public, should that be required of all Court Members. I am familiar with the Code of Conduct for Members in this regard and will fully comply with it.
I am not involved in any legal proceedings.
6. Are you prepared to step down from any elected office or give up any active function with responsibilities in a political party after your appointment as Court Member?
I do not hold any elected office or have any active function in a political party.
7. How would you deal with a major irregularity or even fraud and/or corruption case involving actors in the Member State of your origin?
I would deal with cases involving actors in Ireland in the same way as I would deal with cases concerning any other EU country. In the first instance, I would report my findings to the President of the Court. The Court's Audit Manual sets out clear procedures for dealing with the situation when major irregularities and fraud and/or corruption are suspected during the course of an audit and these would be followed. The country concerned would have no impact on how the matter would be dealt with by me. In principle, cases of suspected fraud etc., once discovered, are reported to OLAF, in accordance with clearly defined Court guidelines. OLAF then carries out a full investigation, if there is sufficient evidence to warrant it. Provided that it would not impinge negatively on OLAF's work, the audit can continue in the normal way. While ensuring that the Audit Manual procedures were respected, should the situation envisaged by the question arise, I would request the President to consider the possibility of appointing another Member to take over the audit.
Performance of duties
8. What should be the main features of a sound financial management culture in any public service?
Accountability and transparency vis-à-vis the taxpayer is the first essential obligation for a public organization. Within the organization, to ensure value for money for the taxpayer (i.e. sound financial management), the following elements are essential:
·Clearly defined mission, vision, values and strategy
·Clear allocation of responsibilities
·Clearly defined procedures
·A recognized and effective internal control system
·Motivated, skilled and knowledgeable staff
·Effective communication internally and with stakeholders
·Openness to change and development.
I have observed that all of these elements are in place at the European Court of Auditors.
9. According to the Treaty, the Court shall assist Parliament in exercising its powers of control over the implementation of the budget. How would you describe your duties with regard to reporting to the European Parliament and its Committee on Budgetary Control, in particular?
It is the Court's duty to assist the European Parliament and to report to it on the results of its work. It would be my intention, if the Parliament gave a favorable opinion on my nomination, to assist the Court to the maximum to fulfill this duty by:
·participating fully in the work of the Court in preparing Annual and Special reports and Opinions and in informing the Committee on Budgetary Control thereof;
·keeping the Committee on Budgetary Control informed concerning audits for which I am responsible;
·being available to members of the Committee to answer questions, provide information and listen to concerns that members may wish to raise.
10. What do you think is the added value of performance audit and how should the findings be incorporated in the management?
Performance audit assesses how efficiently and effectively money has been spent, whether the goals of that expenditure have been achieved within the planned time-frame and whether the expenditure has been undertaken as economically as possible. It is distinct from financial and compliance audits which focus on whether or not the relevant regulations have been adhered to. It is basically concerned with 'value for money'.
Performance audits identify areas where improvements can be made to ensure that expenditure has the desired impact at the most reasonable cost. This is their added value. Over the years, the Special Reports of the Court of Auditors have, with the support of the European Parliament, led the Commission to improve its systems and procedures. The 2008 Special Report on Technical Assistance in the Context of Capacity Development is a good example of this. In the light of the Court's audit and the European Parliament's concerns, the Commission (Europe Aid) introduced a detailed strategy to remedy the shortcomings highlighted in the report. The Court will, in due course, need to follow-up its report with a further audit to see how, in practice, improvements have been made in the area of technical assistance to developing countries. The follow-up of audits is important in the context of assuring added value.
To have real added value, performance audits must be relevant and timely. In this context it is important that there is open and honest dialogue between the auditor and the auditee. The auditee needs to know clearly what is being audited and why, if there is to be effective cooperation. The auditor, on the other hand, can benefit from the expert knowledge of the auditee and also his awareness of the existing weaknesses or failings in the area to be audited. That is why the Court, for many years now, has a policy of what it calls the 'no surprises approach' with its auditees. Judging from the quality of Special Reports in recent years this strategy has proved effective.
11. How could the cooperation improve between the Court of Auditors, the National Audit Institutions and the European Parliament (Committee on Budgetary Control) concerning the audit of the EU budget?
There is ongoing cooperation between the Court and the Committee on Budgetary Control, with the Court regularly informing the Committee of its planned work programme and the results of its audits. The Court furthermore takes into account the views of the Committee, in particular its reports and resolutions when considering future audits. To maximize the effectiveness of the co-operation it is essential, however, that open and honest dialogue takes place between members of the Committee and Members of the Court. This is something that I am fully committed to.
There is also ongoing cooperation between the Court and the National Audit Institutions (NAIs) through the Contact Committee of Presidents of the Court and the Presidents of the NAIs. In practical terms the NAIs are informed, inter alia, of the Court’s work programme and advised in advance of each audit at which time they are also invited to participate in the audit if they so wish. The Contact Committee is assisted by a committee of Liaison Officers from all the institutions concerned. The Court and the NAIs have distinct roles and are independent but it is important to establish a basis for closer cooperation with due respect for their mutual independence. In this context, I have learnt that significant work is taking place at the level of a Contact Committee working group on common auditing standards and comparable audit criteria in the EU context. This working group, which is chaired by the Court, aims to develop common auditing standards and comparable audit criteria based on internationally recognized auditing standards tailored for the EU area. If common standards and criteria were applied to the audit of EU funds both at the national and the EU levels, it should make it possible for the Court to work even more closely with the NAIs when carrying out its audits. The Court has recently launched a pilot project for a coordinated audit with three NAIs in the context of the DAS and the results will be particularly useful in determining how cooperation between the NAIs and the Court can be made more effective.
The Court of Auditors is also in contact with numerous audit institutions and organizations outside the European Union. In particular, it participates in the work of INTOSAI, the International Organization of Supreme Audit Institutions and EUROSAI, its European equivalent, which the Court helped to found and it contributes to their working groups.
National Declarations are useful elements for the Court's audit but they cannot replace it as they have to be considered by the external auditor as more in the nature of management representations. They are, nonetheless, an important recognition of the fact that Members States are responsible for the protection and proper use of EU funds channeled through them. For Members States' Annual Declarations to be really useful and effective the Commission should endeavor to ensure that common standards and controls are applied to them. In the same way, further harmonization is needed in relation to the Annual Summaries (of audits) which have the potential to be a very useful weapon in the Commission's internal control armory. The upcoming revision of the Financial Regulation is an opportunity to make provision to ensure that National Declarations and the Annual Summaries have maximum impact in the context of the Commission's internal control system.
There is open and continuing dialogue between the Court and the National Audit Institutions and steps are being taken, as illustrated above, to seek harmonization of audit practices and procedures in relation to the audit of EU funds. There is also open and continuing dialogue between the Court and the Committee on Budgetary Control. As mentioned earlier, in deciding on its audits, the Court takes account of concerns expressed by the Committee. It also keeps the Committee informed of the results of its work.
The necessary frameworks are already in place for fruitful cooperation. Goodwill and commitment on all sides will assure success. The Committee can be assured of my goodwill and commitment in this context.
12. Would you withdraw your candidacy if Parliament’s opinion on your appointment as Member of the Court were unfavorable?
If the Court of Auditors is to carry out its duties effectively in the interests of the citizens of the EU, it must have the confidence of their elected representatives in the European Parliament. If any Member of the Court does not have that confidence, it undermines the body whole. As I strongly believe in the role of the Court in contributing to upholding the democratic values of the European Union, I would have difficulty being party to anything that might weaken the Court's impact. Therefore, in the event that the Parliament was to give an unfavorable opinion on my candidacy, I would ask the Taoiseach (Prime Minister) to reconsider my nomination.
25 February 2010
RESULT OF FINAL VOTE IN COMMITTEE
Result of final vote
Members present for the final vote
Marta Andreasen, Jean-Pierre Audy, Inés Ayala Sender, Zigmantas Balčytis, Jorgo Chatzimarkakis, Andrea Cozzolino, Luigi de Magistris, Tamás Deutsch, Martin Ehrenhauser, Jens Geier, Ingeborg Gräßle, Ville Itälä, Cătălin Sorin Ivan, Elisabeth Köstinger, Bogusław Liberadzki, Monica Luisa Macovei, Jan Olbrycht, Georgios Stavrakakis, Søren Bo Søndergaard
Substitute(s) present for the final vote
Christofer Fjellner, Edit Herczog, Monika Hohlmeier, Sidonia Elżbieta Jędrzejewska, Markus Pieper