Tougher internal audit controls must be put in place within all Government Departments within a year, following a major report ordered by the Department of Finance.
In addition, Departments have been told to put international-standard risk-management rules in place within two years to judge all future State spending projects.
Each departmental audit committee should have two external experts, including some from the private sector, to check on all spending. The chairperson should come from outside the Department, the report said.
The recommendations are made by the Report of the Working Group on the Accountability of Secretaries General and Accounting Officers, chaired by the former secretary general of the Department of Finance, Mr Paddy Mullarkey.
The group insisted that the head of each Department's internal audit group should have "sufficient status and access" to promote the unit's independence and to ensure follow-up.
The audit committee should prepare an annual report for each Department's accounting officer - normally the Department's secretary general - and meet the Comptroller and Auditor General (C&AG) once a year.
The Department of Finance should draw up explanatory memoranda for the audit committees, listing the "most serious common failings, inadequacies, issues" highlighted annually by the C&AG.
In addition, the Department of Finance, which already conducts periodic reviews of existing internal audit controls within spending Departments, would help to train internal auditors and promote best practice.
Proper risk-management rules, say supporters of such a system, would have helped to prevent the hepatitis C crisis and other problems.
"People would look at the cost of something, and at the cost, financially and in terms of reputation, if something went wrong," one management expert told The Irish Times last night.
The Working Group said there was a need to clarify where responsibility and accountability should properly lie in the Civil Service "particularly at a time when there is a greater expectation of scrutiny".
On efforts to devolve managerial powers from the top of the Civil Service, the Working Group said there was an onus on secretaries general to ensure officials were competent to perform their duties.
However, there is disappointment among senior civil servants at the Working Group's decision not to acknowledge the difficulties faced by secretaries general when they are brought before the Public Accounts Committee (PAC).
"The complexity of modern government means that the secretary general cannot be expected to be familiar with every action or decision taken in the Department," the report said.
Under existing rules, civil servants are barred from commenting on government policy when they appear before the PAC, nor are they given advance notice of the questions from the committee.
