Committee Reports > List of Committees > Dáil > 1936 > Committee of Public Accounts > Interim and Final Report - Appropriation Accounts 1934 - 1935

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Dé Céadaoin, 3adh Mcitheamh, 1936.

Wednesday, 3rd June, 1936.

The Committee sat at 11 a.m.

Mr. S Mag Craitn(Ard-Sgrúdóir) Mr. C. S. Almond (An Roinn Airgid) called and examined.

VOTE 65—ARMY.

Lieut-General P. MacMahon called and examined.

652. Chairman.—Paragraph 73 of the Report of the Comptroller and Auditor-General states:—

“I referred in my report on the Accounts for the year 1932-3 to the delay in applying the new rates of additional pay for soldier tradesmen incorporated in Defence Force Regulation, 36/1931. This regulation has not yet been put in force, but I understand that the whole question of additional pay has again been reviewed, and that revised regulations will be put into operation at an early date.”

Mr. McGrath.—Regulation 36/1931 is the regulation authorising pay to trades-men-soldiers, and yet the rates of pay under 36/1931 are not the rates that are actually being paid. I quite understand the position as regards the Finance Officer, but we thought it necessary to bring this matter forward in order to ascertain how the new arrangement is developing.

653. General MacMahon.—Everything that has been done up to the moment has been done with the concurrence of the Department of Finance. A Committee was set up to go into the question of additional pay for the soldier-tradesmen personnel. This Committee reported about a week ago, and the matter will be considered at a Defence Council meeting to-morrow morning. When the Defence Council comes to a decision on the matter, a regulation will be issued in accordance with the Minister’s ruling on the matter.

654. Chairman.—Why was this regulation 36/1931 not complied with ?—Because it was found that it would not be advisable to apply the terms of the regulation. In some cases it would be an injustice to some of the men, and in others it would be providing for additional pay in excess of what was considered necessary. We decided that we would not put it into operation and we got the concurrence of the Department of Finance in our action.

655. Was the regulation revoked ?—Yes. We brought out regulations at various intervals holding up the application of that regulation.

656. Chairman.—Is the Comptroller and Auditor-General satisfied?

Mr. McGrath.—I know the Department is doing its best to have new regulations put into force.

657. Chairman.—But this regulation was made, and it has not been complied with. Was it suspended by subsequent orders, temporarily suspending it?

Mr. McGrath.—The Accounting Officer has stated that he has got the authority of the Department of Finance for suspending the regulation.

658. Chairman.—That does not answer the question as to whether we are complying with the law. Has Finance any power to repeal any regulations that are made ?—The terms of it were suspended by regulation, and in accordance with the law.

659. You have that regulation?—Yes.

660. Chairman.—The next paragraph reads:—

“Under the terms of Defence Force regulation 15/1932, reduced rates of marriage allowance are payable in respect of soldiers whose re-engagement was approved subsequent to 2nd March, 1932. It appears that owing to lack of co-ordination between certain sections of the Department, marriage allowance at the higher rates was issued in respect of a number of soldiers for various periods after the date on which this regulation became applicable to them. The total amount overpaid was £359 12s. 9d., of which £198 18s. 0d. was borne on the Army Votes for the years 1932-3 and 1933-4. Arrangements have been made for the gradual recovery of this sum by fortnightly deductions from the marriage allowance payable in respect of the soldiers concerned, and a system of checking has been instituted which is deemed to be an adequate safeguard against the recurrence of over-payments of this kind.”

That is merely explanatory. You are recovering this money?—Yes, that is correct.

661. The next paragraph reads:—

“Included in the expenditure charged to this sub-head is the salary of a civilian instructor who was appointed as from 7th January, 1935, to give instruction in mechanical engineering in a school for boy mechanics at the headquarters of the Air Corps. As it appears that the school has not yet been established and that boy mechanics have not so far been recruited for the Air Corps, I have communicated with the Accounting Officer regarding this charge.”

Is there any explanation regarding that matter?—The instructor was fully employed from the date he was appointed, but before he commenced instruction it was necessary for him to get out programmes of training, to decide the machinery required, etc. We communicated the full facts to the Department of Finance and had their concurrence in the arrangement from the beginning to the end.

662. Your justification is that while this man was not actually instructing boys, he was operating towards that end ?—Yes, he was preparing for it.

663. You are satisfied with that?—Yes.

664. Paragraph 76 states:—

“The charges paid to the railway companies in respect of the transport of troops and conveyance of stores have been the subject of comment by the Public Accounts Committee in its reports on the accounts of previous years. I understand that new arrangements have been come to with the railway companies under which more favourable terms have been granted to the Department. Though the agreements have not yet been finally completed, the new rates were operative during the year under review and are reflected in the expenditure charged to these sub-heads.”

That is explanatory. The next paragraph states:—

“It is provided in Army Regulations that the cost of transport of members of the Volunteer force, when reporting for initial training, re-entry into Army service, annual training, over-night camps, and test mobilisations shall be borne on public funds, and in the Army Vote for the year under review a sum of £150 is provided for this service under sub-head Y (2)—Army Reserve. I have noticed, however, that considerable charges have fallen on the above sub-heads (J and L) in respect of the use of Army mechanical transport on this service, including the cost of 16 lorries purchased specifically to meet the requirements of the Volunteer force. No provision has been made for the transport of reservists under those sub-heads, and the employment of Army mechanical transport would appear to be contrary to Defence Force Regulation 61/1929, which defines the duties and services on which its use is authorised.”

You have been using Army transport proper for the transport of those Volunteers?—That is correct. We purchased lorries specifically for that purpose, with the concurrence of the Department of Finance, but we are altering the Regulation to meet the view of the Comptroller and Auditor-General.

665. With regard to those Volunteers, when you have sent out a Mobilisation Order do you take steps to ascertain how many men are going to report in any particular before you send transport to collect them?—It is not always possible to do that.

666. I mean, have you no local officer who would be sufficiently in charge of his organisation to know approximately the number of men who would be reporting?—We have in some areas, but they are exceptional areas. We have not sufficient Volunteer officers yet appointed.

667. Have you not non-commissioned officers?—Yes, but we found that it would be very difficult for a non-commissioned officer to discover the exact number and to let us know in time.

668. What duties has a non-commissioned officer in a local area? Has he no responsibility to you?—Yes. He has the same responsibility as the other Volunteers—to go on duty when called on, to come up for special training when called for special training and for local training when local training is carried on.

669. I think I saw in some parts of the country in which I spent some time, an order to Volunteers to go for a week-end somewhere. Is that issued by the local N.C.O. ?—It is generally sent out by an officer to the men direct.

670. Where is that officer situated?— At the district headquarters. Where there is ordinary public transport available, we ask the Volunteers to utilise it, but where it is impossible to get local transport we have to send out Army lorries for the men. Very often we might expect 20 men and only 16 would turn up. In every case where we have sent out transport, it was necessary to do so.

671. Chairman.—You need not be too dogmatic about that. I have seen lorries sent out to pick up one man where the railway fare was only 7d. I have seen three lorries sent out to lift seven men in one area. From the point of view of the efficiency of the Army, that looks bad? —Is there not a possibility that the lorry picked up men from other areas in addition to the men you saw?

672. I am speaking of cases of which I have knowledge. This procedure looks grossly inefficient, even from the point of view of the ordinary citizen?—You must remember that these are Volunteers and that a man may promise to come up to-night and change his mind to-morrow. You cannot be certain of the number of men you will get at any particular time.

Deputy Beegan.—I think the cases to which the Chairman is referring are exceptional.

Deputy Smith.—I often wondered at the manner in which that work was done, having regard to the difficulties.

673. Chairman.—These men are not bound to report?—No.

674. Are they sworn in?—Yes. They serve as ordinary soldiers for a short time and are then transferred to the Reserve. They are not bound to come up. In future, they will get a certain gratuity on condition that they attend a certain number of parades.

675. Deputy Smith.—Would not the A.O. be responsible in the case of surplus transport to which the Chairman referred? Is there not a plan prepared in each area as to the calling centres for each vehicle? In the case of three vehicles going out on a route where only one would be required, the A.O. would be more or less responsible?—Even the A.O. cannot always guarantee that men who have promised to turn up will turn up.

676. But he prepares a plan of his area showing the points which the lorry will cover?—That is always done.

677. He may estimate that 50, 60 or 100 men will be picked up on a certain route. Another vehicle will take a different route to pick up others?—That is so.

678. If he estimates that there are 150 Volunteers on a route to be covered by three lorries, and if only 20 Volunteers answer the call, it is not his fault. He cannot compel them to attend. Even what the Chairman has mentioned might not be the fault of any officer. It might be due to the failure of the Volunteers to turn up?—That is so.

679. Chairman.—The last portion of paragraph 77 reads as follows: “Mileage allowance in respect of the use of their private motor cars is payable to certain officers whose duties entail frequent travelling within their areas. From the information available it appeared to me that some of the journeys for which this allowance was paid were not made on any of the duties assigned to those officers under the relevant regulation.”—What do you complain about in that case?

Mr. McGrath.—In my note to the Accounting Officer I stated: “It is observed that while a number of Area Administrative Officers made use of public conveyance to attend conferences at G.H.Q. and District H.Q., the majority were paid mileage allowance for the use of their private motor cars, involving a considerable additional charge on the public funds. Explanation is requested why public conveyance was not availed of by these officers. In the course of the examination of the claims, it was noticed that details of the journeys are not generally given and that, in some instances, in which they were supplied, mileage allowance was paid for duties such as collecting one recruit (34 miles), conveying Volunteer to his home (40 miles) getting Volunteers dressed and delivering for training at Athlone (110 miles).” It appeared to me that these duties were not exactly duties for which they are entitled to draw an allowance from public funds. The question in my mind was as to whether some more definite line of demarcation could not be drawn, whereby the charge would be more certain.

680. General MacMahon.—The Comptroller and Auditor-General is referring, I think, to the very early stages of this scheme, when it was impossible to draw up regulations to cover every point. Since then, with the advantage of our experience, we have drawn up a regulation which, I think, is satisfactory. There were cases where the Area Administrative Officer was of opinion that it would be cheaper to bring in a man in his car than to send out a lorry. In fact, it was cheaper and he used his discretion. If he does that now, it will not cost the State anything owing to the new arrangement.

681. Deputy Smith.—I think the Accounting Officer is right in what he says. I saw men coming from week-end training camps who were supposed to avail of a public conveyance. When they landed in the chief town of the county, they found no public conveyance to bring them to the place to which they wanted to travel. These men had no way of fixing themselves up for the night, and the Area Officer had in many cases to see that they got to their homes. It is hard to know how to meet a case of that kind ?— This happened in the early, experimental stages of the scheme.

682. Deputy Beegan.—Some allowance must be made in the early stages.

Mr. McGrath.—A new arrangement has been made whereby certain minimum and maximum allowances are made to these officers.

General MacMahon.—That is correct.

683. Chairman.—It will have to be a bit elastic owing to the variety of circumstances in rural areas.

Mr. McGrath.—I think the new regulations will cover all possible cases.

General MacMahon.—I think they are as satisfactory as it is possible to make them.

684. Chairman.—Paragraph 78 of the report of the Comptroller and Auditor-General is as follows:—

“Sub-head K—Provisions and Allowances in Lieu. Cost statements have been furnished to me showing the cost of production of bread at the Curragh bakery and of meat at the Dublin and Curragh abattoirs. The unit costs show a slight change from those of the previous year, and are as follows:—

That is merely explanatory?

Mr. McGrath.—That is so.

685. Chairman.—The tendency of both these things has been to rise within the past twelve months.

I can produce the various costs from 1931 to 1935, if you wish.

686. Chairman.—Paragraph 79 of the Report of the Comptroller and Auditor-General reads:—

“Sub-head O—General Stores. In the course of my audit of the accounts of the technical stores and equipment on charge to the Air Corps, I noted that various matters pertaining to the disposal of stores were brought to a conclusion without due regard to the necessity for obtaining approval before final action was taken. They include the withdrawal of airframes and engines which were becoming obsolete, the condemnation of new and unused stocks as surplus to requirements, the conversion of engines to provide spare parts and the replacement of otherwise serviceable stocks by newer material.”

Mr. McGrath.—The Audit Office, in examining the records of stock, found that no attempt had been made to reconcile actual stock in hands with the stock figures in the books.

687. Chairman.—Either it could be done or it could not be done. Either the actual stock corresponded with the stock in the books or it did not.

Mr. McGrath.—That is what I am saying.

688. Chairman.—There could be no difficulty about it.

Mr. McGrath.—I am saying that there was difficulty. I put forward certain queries and our difficulty was solved by the answer given by the Accounting Officer. He explained that certain machines were written off by the authority of the Department of Finance and others by the authority of the Board of Survey. In the case of the Department of Finance, authority was granted because of certain crashes. The Audit Office has no fault to find in those cases. as the Accounting Officer asked for the authority of the Department of Finance. However, it is thought necessary to draw attention to the fact that certain machines were written off under the approval of the Board of Survey. This Board of Survey is a branch of the Army itself and we think that, in writing off machines which are of considerable value, the authority, at least, of the Secretary of the Department should have been got. If the Secretary of the Department had been advised of the matter, I am sure he would have gone to the Department of Finance and the Audit Office would then be satisfied that the proceeding was in order. We think that in the system, on which we are commenting, there was lack of co-ordination.

689. Chairman.—Are you satisfied with the undertaking that was given you?

Mr McGrath.—The Accounting Officer will explain his position in the matter.

General MacMahon.—The position is the same as it has been for the past 14 years.

690. Chairman.—Had we this matter under consideration last year?

Mr. McGrath.—No, in 1930.

691. General MacMahon.—I do not think that this point was before the Committee in 1930.

Mr. McGrath.—The question of the stock was before the Committee then.

General MacMahon.—In 1930, reference was made to the stock at Baldonnel. There was a complete stocktaking then and it was very satisfactory. We have had the question of getting out comprehensive regulations in respect of the Air Force under consideration for a number of years. We were waiting because we felt that it was necessary to have further experience. We cannot adopt the system that exists in every other army that I know of, because in every other army the Air Corps has far more authority than the Comptroller and Auditor-General or the Minister for Finance or the Public Accounts Committee would give us here. We really had to get out regulations that are practicable and at the same time to meet the views of the Minister for Finance and the Comptroller and Auditor-General. These regulations have gone to the Department of Finance only a day ago for the approval of the Minister for Finance and they cover all these points. The custom has been up to this that where an aeroplane smashed or crashed we went to the Department of Finance, explained the circumstances and asked for their approval to write it off. In the case of aeroplanes that become obsolete through age, or where new parts have to be supplied as a result of fair wear and tear we do not go to the Department of Finance. They do not do it in any other army. We will have to do it now; it took time to prepare these regulations. They are prepared now, and I think they will meet with the views of the Comptroller and Auditor-General. I personally am more satisfied with the position in Baldonnel now than ever I was. The last stocktaking has been finished and audited by my staff. The report will go to the Minister for Finance. I would say in advance that everyone will be pleased with the result.

692. Chairman.—You keep a stock of the various parts of the aeroplanes?— Yes, a minimum amount of stock to keep them in the air. The Minister for Finance agreed and we agreed that we should not keep a big stock because the parts become obsolete quickly.

693. If you have not in stock those parts that are required must you go to the Minister for Finance for authority before you get your aeroplane requirements?—Not in all cases. If there was a big smash we would have to go to the Minister for Finance.

694. What is the principle?—If the smash is such that the machine is put out of commission for a considerable time and that it would take three months to repair it, we go to the Minister for Finance. If the smash is not considerable, we get the parts ourselves and repair the machine. In actual fact in those regulations we have put down the maximum amount which we can spend on the machine without the sanction of the Minister for Finance.

695. What would you call a petty repair or a minor repair?—We have put a figure down as £100 for an engine, £100 for the aeroplane and £50 for accessories; in other words, that it would take that much to overhaul the machine completely. That is the reason we took that figure and we asked the Minister for Finance to agree to that arrangement. Regarding those other parts to which the Auditor-General has referred, the parts that were purchased while we had other parts that were somewhat similar, the Public Accounts Committee will realise that with our resources we cannot experiment in the same way as other countries can, so that we have to keep ourselves up to date by watching what is done by the makers of machines we are using. All our machines are British and if some new development is perfected in the machines which tends to make the machine more airworthy, that development is adopted. That is what happened in these machines. It was discovered through reliable authority that these parts were superseded by the British and then we brought in the new parts which made the machines more airworthy, scrapping the others.

696. These were some new gadgets, I suppose?—Yes. If we had done something else and if there was a crash or smash, followed by an inquest, I do not think the Minister for Finance or the Minister for Defence would care to go to the inquest and admit that it was because of economy in using up the parts that were not up to date that the smash occurred. I am sure neither would the Public Accounts Committee care to admit that the crash with its loss of life and the loss of a machine worth £3,000 caused by over-anxiety for economy and using spare parts that had been out of date was justified on the grounds of economy.

Mr. McGrath.—The Audit Office has no objection to the Department of Defence being up to date, but when it is found that new parts that were never used and are of some value are scrapped, we think it is only right that the Department of Defence would go to the Department of Finance saying that because of some new development they wish to use those new parts, and that they decided formally to ask the Department of Finance for sanction. In asking that this be done, we are not in any way seeking to prevent the Free State Army from developing in an up to date way. We think that when a considerable amount of new stores are asked for that the Department of Defence should come to the Department of Finance and advise them and get the authority of that Department for these new stores, and to have the other stores put on one side. That is all we ask for.

General MacMahon.—The new regulations provide for that.

697. Mr. McGrath.—The regulations of the Defence Force provide: “Articles of considerable value that have become obsolete or which for any reason are of no further use, will form the subject of a special report to the Quartermaster-General for transmission to the Secretary for his observations.” We found that that order was not carried out.

General MacMahon.—I think the Comptroller and Auditor-General should qualify that statement. It is not done at the moment, but after our stocktaking it is done. A report is made to the Quartermaster-General. He sends it along to me and I explain the full facts to the Department of Finance. But it is not done at a particular time. The new regulations prescribe that it shall be done at a particular time.

Mr. McGrath.—The Committee will understand that I have not seen the draft of the new regulations.

Deputy Smith.—The regulation that Mr. McGrath has read out does not request that this should be done at the time. The regulation is capable of two constructions.

Chairman.—If that were so, the regulation would say “as soon as possible.” It is plain language and it clearly means that it should be done forthwith. There is no qualification, and if it were meant that it was to be done as soon as possible it would be worded otherwise.

698. Mr. McGrath.—Paragraph 5 of the regulations says:—“In the selection of stores for survey, the officer in charge of stores shall be responsible for ensuring that normally articles other than those which have become unfit for service by fair wear and tear, or chose of minor value or importance, which have become damaged or deteriorated in store, are not produced and that an article is not brought for condemnation the full value of which has already been charged to the troops as having been destroyed. Articles of considerable value which have become obsolete or which for any reason are of no further use will form the subject of a special report to the Quartermaster-General for transmission to the Secretary for his report.” That is regulation No. 5.

General MacMahon.—I think you should explain to the Committee that that regulation is got out in connection with the disposal of stores. It is dealing with stores. A Board of officers is set up to survey stores and decide what ones are obsolete and what ones should be retained. That regulation deals with that particular matter, and the terms of that regulation are carried out when we are taking stock.

699. Mr. McGrath.—Yes, but in the matter of these particular machines, I think you have half a dozen machines which were written off under the authority of Boards of Survey, and they did not make any report to the Secretary as far as I know?—They made a report to the Quartermaster-General; he reported to me and I reported to the Department of Finance.

700. In all cases?—Yes, but not at the particular time. As a matter of fact the last stocktaking was only completed a fortnight ago.

701. Chairman.—For what period?—It takes about two years to take stock—to go into it properly. I am not now referring to the spot check stocktaking in Baldonnel.

702. You are referring to Baldonnel?—

Yes, the Auditor-General is referring to it.

703. You say it takes two years to take stock?—Yes, when you consider the thousands of small articles that have to be examined the Committee will understand that it takes a lot of time.

704. How do you contend that anybody who took stock should spend two years at it?—They take particular stores at particular times and a particular type of article. Perhaps I should explain that the stocktaker would not spend two years at the work. He would be doing other work in the meantime.

705. I am only talking about the efficiency test?—He takes a different type of article—bolts, for instance—and he deals with that to a conclusion, and he knows the exact number of bolts. Then he takes some other article and deals with it to a conclusion.

706. Deputy Smith.—Does he furnish a report for each item as he completes it?—He makes a note for himself. As a matter of fact he might deal with one particular type of thing in a day. Then the report is furnished to the Quartermaster-General and he puts his comment on it. That report has been audited by my staff. In the next few days I will send that matter along to the Department of Finance with my comments. I would refer in them to these Boards of Survey that were held and the engines that were declared obsolete as a result of them.

707. Chairman.—The trouble that presents itself to me and to the Committee is this: that when the man takes two years taking the stock, he cannot at the end of that time present the right figure?—The Chairman must remember that there is a storekeeper.

Deputy Smith.—The report might be misleading for one period, but it is not misleading for the extended period.

708. Chairman.—But it is two years in arrear. What do you say to that?—I have not a great deal of faith at all in this complete stocktaking. I have far more faith in the surprise visit made by members of the Quartermaster-General’s staff and by members of my own staff. They may come down and take one particular check. They take over that particular store and examine it, and on some other day they take another part. I have more faith in that surprise visit than in the complete stocktaking.

709. I have no faith in it. Take the imperial Chemicals with a capital of £70,000,000, or Coats or the Imperial Tobacco Company. At the end of the financial year these whole organisations are able to produce down to the last ounce a full report as to the items of their stock and its value. That thing has got to be done in any business concern. I am speaking now for myself. I would not like to say that I would pass a thing like that. I had to produce reports of stock myself at one time?— Who produced those figures you referred to? Is it not the storekeeper who was the person responsible for that?

710. I am not concerned with the machinery?—The machinery here is a matter for very great concern. The people at Baldonnel can produce all this information. I am talking about outside people who are supposed to see that those stocks are correct. Each storekeeper can produce an account of everything he has, the technical and the ordinary storekeepers. They have their books there for inspection. The stocktaking I am talking about is carried out by people who have no connection with Baldonnel, who check up things and see that they are as the books set out.

711. The implication of that is this, that in the Imperial Chemical Company or Coats, or the Imperial Tobacco Company the procedure is slipshod, and it is not true and accurate?—I am not suggesting that at all.

712. But that is the implication of it?— It is not.

713. If you take the cigarette department of the Imperial Tobacco Company for instance, and you walk in and then say: “There is what I have got,” why, the place would be bankrupt in a year?—In every business place in town they do as you suggest in connection with Imperial Chemicals; they present a statement of their assets. I can do that at Baldonnel, but the Comptroller and Auditor-General is not satisfied unless I see that people not connected with Baldonnel have examined every item and passed them. I do not think a complete audit is carried out until the complete report is issued.

Chairman.—I am afraid you do not know about this thing; it has to be done.

Deputy Smith.—That question does not arise. There is a certain type of return that he can have in a very short time by applying to the head of each store. Very often he will get it there and then. But if you send to Baldonnel independent people who will roam about and check each item, you could not do that in a short period. We are getting away from the point we were discussing, as to whether or not the Army have power under the regulation cited by the Comptroller and Auditor-General to hold back their report. I disagree with the Chairman there, and I submit that according to that regulation they were perfectly justified in holding back the report in the way they did.

Chairman.—But the whole point is about the efficiency of the thing. The question is, is it of any material use?

Deputy Smith.—I am talking about the regulation read out by the Comptroller and Auditor-General. You contend that that is capable of only one interpretation. I disagree with your contention, and I believe the Army authorities were justified according to that regulation in doing the thing as they did it.

Chairman.—The thing is spread over such a period that as an actual test of an actual state of affairs—

Deputy Smith.—We are not discussing that at the moment.

Chairman.—We are discussing the machinery by which it is done.

Deputy Smith.—I respectfully suggest we are discussing a comment of the Comptroller and Auditor-General as to certain articles and machines that he contends the Army should have reported immediately to the Secretary and the Secretary to the Department of Finance. The Accounting Officer says that report is made, but it is not made at the time the Comptroller and Auditor-General thinks it ought to be made. I believe that under the regulation cited by the Comptroller and Auditor-General the Army were entitled to do as they have been doing.

714. Chairman.—If it is possible to create better machinery, we should help in doing that. Surely from some of the big organisations you could get some method by which, within a month, you could have a report issued?—It is impossible, Sir. Even taking the case quoted, it would be physically impossible.

715. Do not take it that I am censuring you at all?—It is physically impossible for the Imperial Tobacco Company or Switzers or any firm to close up their premises on Tuesday evening, say, examine their stock, see that everything is right and report to the Directors next morning that everything is right. It is a physical impossibility, and it could not be done in Switzers or Clerys or any business place you like.

Chairman.—There must be some machinery in these big concerns whereby in a month or six weeks, at a given date, some outsider can have some machinery by which he can say that on a particular day there was so much stock all over the whole organisation. It might be done by different men not by the one man.

716. Deputy Smith.—That is altogether unreasonable. If you take the case of a local authority appointing a stocktaker to take stock of a couple of hundred utensils, it takes him six or seven weeks. If you expect an individual to go to Baldonnel and make a complete check of every article in the time you mention it would seem to me, and I know very little about it, to be an absolute impossibility. If you want that exact type of check you refer to, and if you think it can be done inside a month or two months, and that it can be up-to-date, you will never get it unless you turn the whole Army into an army of stocktakers.

General MacMahon.—If we can do anything to speed up stocktaking, we will do it. If you take the case of the British Army, they have local people to do that work, and these people even have power to write off. The Accounting Officer in our Department of Defence has not one-tenth of the power of the people who do that work for the British Army.

717. Mr. McGrath.—I am not speaking about whether it is possible for the Accounting Officer to take stock on a certain day or not. I have a list of airframes and a number of these have been written off without the authority of the Secretary of the Department. I should like that gone into in order to see if it can be arranged that the Secretary of the Department should be notified before the writing off of these airframes.

General MacMahon.—Do you understand what writing off means?

Mr. McGrath.—I ought to.

718. General MacMahon.—You seem to think that if a thing is written off it is thrown out of the place, it is finished. The fact of the matter is that certain officers examine those articles and see if they are serviceable. Would it not be ridiculous if they were to come to me and ask: “Is this serviceable or not?” They examine those things and decide whether or not an article is serviceable. If it is not, they put it on one side. The matter is brought to my notice before it is disposed of, if it can be disposed of. It would be ridiculous if technical officers who examine a machine carefully were obliged to come to me and say: “Will we say this is serviceable or not”.

719. Chairman.—You are not the technical adviser?—Those technical officers examine an article to decide whether or not it is serviceable. If it is not, they put it on one side as no longer fit for service, but before it is disposed of I have to know all about it and so have the Department of Finance.

Mr. McGrath.—This particular matter will be dealt with under the new regulation?

General MacMahon.—Yes.

720. Report of Comptroller and Auditor-General:—

“It seems also that considerable delay has occurred in bringing to notice losses resulting from damage to and destruction of aircraft. Due partly to the absence of regulation laying down the procedure to be followed in dealing with matters of this kind, adequate financial control does not appear to have been exercised.”

Chairman.—Are these things not reported ordinarily through the machinery of the Army at once?—In all cases they are not reported at once.

721. In a motor accident you are bound by law to report the matter. If I am driving a car and I knock you down, I must report the matter to the Guards and to my insurance company?—If that were done in this case it would mean increasing the staff at Baldonnel and at the Department of Defence.

722. Deputy Beegan.—Is there any insurance paid in this connection?—Not on Army property. The only things that are insured are certain engines and other items as boilers.

723. Report of Comptroller and Auditor-General:—

“I am informed, in reply to my inquiries, that suitable regulations are now being prepared and that a complete stocktaking of all stores on charge to the Air Corps has been undertaken. The results of this stocktaking are not yet available.”

Chairman.—What period does that cover?

Mr. McGrath.—At the date of my report, issued last March.

724. Report of the Comptroller and Auditor-General (paragraph 8, Sub-head P)—Warlike Stores:—

“Under the terms of an agreement for the purchase of two tanks, sums amounting to £6,952 6s. 8d., being two-thirds of the purchase price, were paid in May, 1934, and were charged to this sub-head. It was stipulated that the tanks should be delivered not later than 1st February, 1935, but this clause of the agreement was not observed. I am informed, however, that one of the tanks was delivered in November, 1935, and it is hoped that the other will be delivered in May, 1936. In view of the time which has elapsed since the payments referred to were made, I have deemed it desirable to draw attention to this transaction.”

725. Chairman.—Of course, these were purchased under contract?—Yes; we had the sanction of the Department of Finance.

726. Was it a condition of the contract that two-thirds of the price was to be paid at a certain date?—Yes.

727. Was there a counter condition in the contract that, if the contractor failed to deliver the goods by a certain date, he would have to pay penalty?—Yes, but in the peculiar circumstances relating to this contract we asked the authority of the Department of Finance not to enforce that condition, and we got approval for waiving it.

728. Why?—The delay was due to causes over which the firm had no control, and that was taken into consideration by the two Departments concerned. There had been strikes at that time. We were satisfied that there had been strikes, and when all the circumstances had been explained to the Department of Finance the Minister decided that, in the circumstances, the penalty clause should not be enforced. In the case of the second tank, it went on fire when on trial. They had to manufacture a second one, which has not yet been delivered.

729. They were absolutely new tanks? —Yes.

730. Report of the Comptroller and Auditor-General, paragraph 81, sub-head X-Incidental Expenses:—

“In the course of my audit I noticed that officers in charge of areas, who are issued with imprests, provide the secretaries of sluagh committees with funds out of those imprests to defray incidental expenses, and these expenses are included in the charge to this sub-head. It appears from the form of the certificate furnished to support the charges that some of them are not admissable in so far as they were not incurred in the conduct of recruiting and enlistment in accordance with the relevant regulation. It seems also that the authority of the Department of Finance was not obtained for the issue of imprests out of public moneys to the secretaries of committees.”

Mr. McGrath.—There is one point about this which I wish to bring to the notice of the Committee. These imprests were issued to the secretaries of sluagh committees. It appears to the Audit Office that these imprests were not issuable to these secretaries. As far as we know, money is only issued to civil servants?—And Army officers.

731. These were not Army officers. If they were, we would not have queried this?—The sum involved was very small. This occurred at an early stage of the Volunteers. The area administrative officer was issued with an imprest of, roughly speaking, about £5. He found that the secretaries of the sluagh committees had certain correspondence in connection with recruiting, and he advanced them very small sums to defray the cost of postage. In actual fact the money was accounted for. At the moment, and in the future, it will not be necessary for the secretaries of sluagh committees to have any State funds at all. As I have said, the sums involved were very small, and they were correctly accounted for.

732. Mr. McGrath.—Another point is that the sums taken credit for by the sluagh committees were for general activities as distinct from sums properly chargeable for recruitment. It is rather a fine point, but we have to have regard to it in the Audit Office. There are certain sums chargeable for recruiting, but there are also sums chargeable for general activities to these sluagh committees. These sluagh committees have funds of their own independent of these imprests? —Any money that was issued by the area administrative officer was accounted for and was certified by the secretaries of the sluagh committees as having been used in connection with their duties.

733. For recruiting purposes?—Yes.

734. And not for general activities?—As a matter of fact, it was all for postage.

735. Chairman.—The second portion of paragraph 81 of the Comptroller and Auditor-General’s Report reads:—

“Consequent on the passing of the Damage to Property (Amendment) Act, 1933, the Department of Defence undertook the settlement of claims in respect of loss or damage attributed to the ‘official’ action of Free State forces. Ex-gratia payments amounting to £1,439 were made in a number of such cases, and are included in the expenditure accounted for under this sub-head.”

That is merely explanatory.

Mr. McGrath.—It is not usual to pay such charges as damage to property out of incidental expenses. That is one of the reasons why I have noted it here. It should be paid out of the sub-head for damage to property under the Act, but this Act was only passed in 1933.

Deputy Smith.—Whatever source it was paid out of I can say, from personal experience, that the Department was quite miserly.

Report of Comptroller and Auditor-General, paragraph 82. Sub-head Y (2) —Army Reserve:—

“In connection with the organisation of the Volunteer force arrangements were made with civilian medical practitioners for the medical examination of recruits. This service does not appear to have been specifically provided for, but the fees paid during the year, amounting to £1,144 1s. 0d., have been charged to this sub-head with the sanction of the Department of Finance.”

736. Chairman.—The point here, I take it, is that he got each volunteer examined by the local medical officer so as to save expense, and that for doing that the medical officer charged a nominal sum?—Three shillings. We charged that to this sub-head on the instructions of the Department of Finance.

737. You think that this could not be done more economically?—I do.

738. Report of Comptroller and Auditor-General, paragraph 83. Sub-head Z —Appropriations-in-Aid:—

“In the course of audits of the receipts brought to credit of this sub-head, I noticed that a military display was organised in connection with a Publicity Associations’ gala week, and included among other items displays by the Army gymnastic team and performances by an Army band. Some military stores were also lent for the occasion. As there seemed to be no authority for the support rendered to the Association in this instance, I have requested that the matter be referred to the Department of Finance for its covering sanction.”

General MacMahon.—In connection with that we have got sanction.

739. Chairman.— What were the grounds for providing this military display?—I think that is a matter really for the Minister. Any cost to the State that was involved was recovered. This display did not cost the State anything, and I suppose that on the grounds of policy the Minister agreed to it.

740. About last Christmas I got the Army Band for a charitable function and you charged me £10 15s.?—As far as the bands are concerned, there is a regulation to the terms of which we must adhere.

You were very hard on me, anyway.

741. Report of the Comptroller and Auditor-General. Paragraph 84:—

“The system of control of and accounting for Barrack Services stores in the Curragh area was the subject of discussion before the Public Accounts Committee when the accounts for the year 1929-’30 were being considered. It appears that the unified account system then introduced did not work as satisfactorily as was expected, and the system was reverted to whereby the Curragh is divided into a number of areas, each in charge of a barrack accountant, who is responsible for the safe custody of all stores in his area. The prior sanction of the Department of Finance was not obtained for this change, but I understand that its approval has now been sought.”

742. Chairman.—That is being attended to?—It is.

743. Report of Comptroller and Auditor-General. (Paragraph 84 continued):—

“I had occasion to refer in previous reports to the fact that complete stocktaking is not regularly carried out at some of the large central stores. This work has not been done for a considerable time in some cases, and appropriate certificates to the effect that issues have been made in accordance with regulations and that the book records of stocks have been verified have not been furnished by the officers responsible for the safe custody of these stores. I am in communication with the Accounting Officer on this subject.”

744. Chairman.—The Comptroller and Auditor-General remarks in his report that: “This work has not been done for a considerable time in some cases.” Is there not a very rigid order that stocktaking must be done at a certain time so as to keep things right throughout the whole organisation—that there is some date fixed on which you know where you stand exactly. I take it that the implication in this note is that the work of stocktaking is not co-ordinated? —You cannot lay down an exact date. The most you can do is to say that after the 30th September each year stocktaking will be taken in the shortest possible time. In the case of some units, the time occupied in taking stock would not be very long, but in the case, say, of the Curragh Camp, if the stocktaking there were to be 100 per cent, the work would occupy at least two years. If you are simply to go into a store and ask a man what he has and he tells you that he has so many lots of this and that, and that all you have to do is to tot up the lots, that, of course, is a simple enough matter, but if you have to examine every single item in a store, that, obviously, is going to take a much longer period of time.

745. I take it that in some of those stores you would have stocks of outfitting such as clothes, boots and shirts. They will come under one heading, say. You might also have in the store rifles and ammunition, machine-guns and other things. Are you able to give the number of headings under which stock is classified?—I am not able to say off-hand, but I should say the number would be a couple of thousand. Take, for instance, the bootmakers’ shop, the tailors’ shop, the engineers’ store and all the things it contains, and then think of all the stock in the hospital, the operating theatre— the various dressings there and all the rest of it. The number of single items in all these places would be considerable.

746. I do not mean that you should go through each item. I take it that when purchases are being made you buy so many lots of this and so many gross of that. Stocktaking does not mean that one need go through each item in a lot or in a gross of articles. You simply find out how many lots are there, or how many gross?—I think it would be necessary to go through each item if you were to have a 100 per cent, stocktaking.

747. Mr. McGrath.—I speak here in my note of “The system of control of and accounting for barrack services stores.” That is a particular sort of store, is it not?—What does it include?

748. Barrack services stores mean, I take it, certain articles?—A very big number of articles.

749. Are there not stores called barrack services stores as distinct from ordnance stores?—Yes, as distinct from ordnance and medical stores.

750. You just spoke of the tailors’ shop? —The tailors’ shop does not include ordnance and does not include medical stores.

751. The discussion here would seem to go on the lines that it was impossible to take stock in the Army. I want the committee to put that idea out of their minds?—I never said such a thing. Stocktaking is going on continuously in the Army. The Comptroller and Auditor-General is talking about 100 per cent. stocktaking.

752. Excuse me, I did not mention 100 per cent. I say here: “The system of control of and accounting for barrack services stores in the Curragh area was the subject of discussion before the Public Accounts Committee when the accounts for the year 1929-30 were being considered.” Now that discussion, if I may bring the Committee back to it, referred to certain deficiencies that were found in certain stores. It was put forward at that time that, as there were a number of stores, if they were all amalgamated, these apparent deficiencies would disappear. I think the Accounting Officer will bear me out on that point. The amalgamation actually took place.

General MacMahon.—The Chairman and yourself are discussing two different subjects.

753. Mr. McGrath.—I am discussing the subject I speak of here. The amalgamation actually took place, but now the amalgamation is being done away with and they are going back again to the system of maintaining separate small stores. I understand that barrack services mean certain articles, not medical, not clothing and not guns, but certain articles that can be well defined as within the term “barrack services”?—It is principally furniture and includes bedding, cooking utensils and things like that.

754. I contend that there ought to be a date by which the stocktaking of these stores should be closed. I am not saying that it should be taken within a week or within a month. I do not care how long it takes, but there ought to be a closing date and a comparison made with the books showing that certain stocks should be on hands. Deficiencies and surpluses ought to be shown. All these things should be done so that, on some occasion, somebody outside the staff of that Department could go in and take an independent check to see whether the stocktaking system is a good one or not. That is all we are asking to be done?—That has always been done.

755. We have not been able to put any check lately on these particular stores. There are certain stores which we call barrack services in the Curragh, and we have not been able to put any check on them because we have not been able to get any record of a recent stocktaking to compare it with the stocks appearing in the books. That is my case. The Accounting Officer may have a very good case against that?— There was a 100 per cent, stocktaking in 1935.

Mr. McGrath.—I am not doubting the stocktaking at all, but I want, on some occasion or other, to be able to say: “We have put a test on the stocks and found matters satisfactory or unsatisfactory.”

756. Chairman.—You see what the Comptroller and Auditor-General is driving at? I agree with him. We know of other countries where a tight grip was not kept on things and we know what happened. Ultimately, it will wind up with a scandal. That would be bad for us as a Committee having sat here while that scandal was going on. It would also be bad for the country and for the reputation of the Army. That is the only thing we are concerned with. I suggest that your Army chiefs should be spoken to with a view to the creation of machinery whereby they will be required to produce an account of stocks on a particular day. I have seen too much of this thing and I have seen prosperous places ruined. I know of one particular case in which the man concerned thought he had a very good grip of the business but before he knew where he was he found that he had not got that good grip and there was a scandal.

757. Mr. McGrath.—The Accounting Officer has replied to me and said that draft defence regulations providing for complete stocktaking within a definitely prescribed period have been prepared, and it is hoped to have it promulgated at an early date, and that an appropriate certificate has been added as an appendix. At the closing of these stocks, it is the duty of an officer to give a certificate to the effect that issues have been made in accordance with regulations. My staff had not been able to find any of these certificates. It is necessary to have a certificate that issues being made are being made under the regulations. You cover that by saying that the appropriate certificate has been added as an appendix, so that if the Accounting Officer carries out the agreement he made in his reply of 18th February last, the Audit Office is satisfied.

General MacMahon.—We are doing that, but, lest the Committee be in any doubt about the matter I may say that we had a complete stocktaking in 1932 and 1935. In addition, we had spot checks and. with all due deference to you, Sir, I have great faith in spot checks.

758. Chairman.—You may issue a certificate in all good faith but a scandal may be going on—pilfering or something of that kind—and your reputation is gone. I am concerned for your own reputation and I should be very sure, before I sign my name to anything in relation to stocks that the stock was there. It is your own reputation is concerned, because you are at the head and you are responsible. You cannot assume that everybody is quite honest—

General MacMahon.—I think we are going to the other extreme—watching each other too much. That is my view.

759. Report of Comptroller and Auditor-General. Paragraph 85:—

“Losses written off during the year are detailed in a statement appended to the account. The total is made up of—

The latter figure includes £1,093 0s. 8d. in respect of damage caused by fires, £1,571 1s. 9d. in respect of damage to aeroplanes, and £370 12s. 4d. in respect of rents of certain lands at the Curragh which it was found impossible to recover and which were the subject of comment in previous reports.

No question.

VOTE 66—ARMY PENSIONS.

Lieut.-General P. MacMahon further examined.

760. Report of Comptroller and Auditor General, Paragraph 86:—

“The investigation of applications for pensions under the Army Pensions Acts, 1923 to 1932, was continued during the year under review by the Military Service Registration Board and the Army Pensions Board, and awards were made in about 240 cases. Gratuities amounting to £750 were paid under the Army Pensions Act, 1932, to a number of persons who in the opinion of the Law Officers did not come within the provisions of that Act, and I have inquired whether it is proposed to write off the amount involved.”

Mr. McGrath.—In connection with the payment of these gratuities amounting to £750, I should explain that payments were not made previous to the legal adviser advising that they were proper to be paid. My original note was a little fuller but, as it appears here, it scarcely does justice to the Accounting Officer. It would appear from this note that he made certain payments and afterwards found that they were not legal but, in fact, he did not make the payments until he was advised that they were legally payable, and afterwards the law officers changed their minds.

Chairman.—So he is not responsible?

Mr. McGrath.—No.

761. Report of Comptroller and Auditor-General. Paragraph 86 continued:—

“Persons whose applications were refused under the Act of 1923 were debarred from again applying under the Act of 1932 by Section 14 of the latter Act. It appears, however, that the departmental procedure for dealing with ‘refusals’ under the Act of 1932 was defective, as the law officers have expressed the opinion in a particular case that a refusal was not duly arrived at under this procedure, and, consequently, the applicant concerned was not debarred by Section 14 of the Act of 1932 from again applying. In view of this opinion I have inquired of the Accounting Officer whether he is satisfied that the procedure followed in dealing with ‘refusals’ under the Acts of 1927 and 1932 conforms to the requirements of those Acts.”

Mr. McGrath.—Persons whose applications were refused under the Act of 1923 were debarred from again applying under the Act of 1932, but it has now been ruled by the Law Officers that the refusal should have been given by the Minister and not by anyone on his behalf, and that those people were not debarred from again applying.

Chairman.—So that, technically, those people were saved.

762. Report of Comptroller and Auditor-General. Last part of paragraph 86:—

“The Military Service Pensions Act, 1934, which amended and extended the Military Service Pensions Acts, 1924 to 1930 came into operation during the year. Under the terms of this Act, a Referee was appointed with an Advisory Committee of four members to investigate all applications for the grant of Military Service certificates, and to report to the Minister in the prescribed form on all such applications. The grant of service certificates is based on those reports, and the pensions payable are calculated on the service and rank of the applicants as certified therein. During the year of account payment of pensions was made in twelve cases only.”

No question.

The witness withdrew.

The Committee adjourned until 11 a.m. on Wednesday, June 10th, 1936.