The Department of Public Expenditure and Reform has said that Sean Fleming's is wrong in his assertion that new rules for appointments to State boards will not apply to Irish Water.
The rules published yesterday will see most positions filled through the Public Appointments Service.
However, Deputy Fleing has alleged that commercial bodies like Ervia, Irish Water, Bord na Móna and Coillte will not be subject to the new rules.
The Fianna Fáil TD said: "It was written under a little footnote at the end of one of the pages in the guidelines issued yesterday."
However, the Department of Public Expenditure and Reform said: "The position set out by Deputy Fleming is incorrect."
Deputy Fleming said he would have thought the Government would have got "NewEra to talk to the Public Appointments Commission to come to a resolution on this before he issued the guidelines."
The Department said: "NewEra companies are covered by the guidelines in a manner that recognises New Era's existing statutory role as the shareholder's advisor.
"Irish Water, in common with other NewEra companies, is clearly encompassed by the guidelines.
"The companies differ only in that NewEra is the shareholder’s advisor. One of the functions of that role is advising on the appropriate individuals for the Boards of NewEra companies.
"The guidelines make reference to the Public Appointments Service and NewEra agreeing precise procedures with regard to board appointments and that approach being subsequently included in the guidelines."
The Department said that four of the seven vacancies currently being advertised by stateboards.ie are Ervia positions, a NewEra Company.
They said that was "a manifest demonstration that the bodies are encompassed by the guidelines".