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, 13adh Bealtaine, 1936.

Wednesday, 13th May, 1936.

The Committee sat at 11 a.m.

Mr. S. MagCraith (Comptroller and Auditor-General), Mr. C. S. Almond and Mr. W. F. Nally (Department of Finance), called and examined.

VOTE 63—POSTS AND TELEGRAPHS.

Mr. P. S. O’Hegarty, called and examined.

183. Chairman.—The Auditor-General has some comments to make on this Vote. Paragraph 64 reads:

“The losses borne on the Vote for the year ended 31st March, 1935, amounted to £830 2s. 10d., of which £714 7s. 10d. was charged to sub-head H (2) and £115 15s. 0d. to sub-head O (6). A classified schedule of the losses is appended to each of these subheads. Particulars are given also of ten cases in which cash shortages or misappropriations, amounting in all to £2,020 19s. 7d., were discovered; the sums in question were made good and no charge to public funds was necessary.”

Deputy Goulding.—None of these was recovered?

Mr. McGrath.—They were actual losses.

Chairman.—The losses in some instances were substantial, amounting in the first case to £41 5s. 0d., of which £29 15s. 2d. was recovered, leaving the net loss £11 18s. 7d.

184. Deputy Haslett.—Was there a prosecution?—Yes, and three years’ penal servitude imposed.

185. Chairman.—The second part of the paragraph says:

“In paragraph 38 of my report on the accounts for 1931-32 I referred to certain cases of misappropriation of public moneys in which evidence of fraud existed, but prosecution had been waived for various reasons. On the understanding that in future no departure will take place from the procedure generally approved, the Department of Finance has now given its covering sanction to the action taken by the Department of Posts and Telegraphs in the cases under notice.”

Mr. McGrath.—At that time a difference of opinion existed as to when the Post Office could waive proceedings. The matter has been under discussion between the Post Office and the Department of Finance. Agreement has been come to and certain powers delegated to the Post Office. The matter is now in order and there is an understanding between the Post Office and the Department of Finance.

186. Deputy Goulding.—The note states that in certain cases of misappropriation of public moneys prosecution had been waived for various reasons. What were the reasons?—There was a multiplicity of reasons. There were cases in which the Post Office Solicitor considered the evidence was so weak that it would be inadvisable, in his opinion, to prosecute. There were numbers of cases of that sort, and there were cases where the offenders were sub-postmistresses and were very ill and unable to attend court.

187. The moneys were not recovered? —They were all recovered. These are cases in which there was no loss to public funds.

188. Deputy Haslett.—We had this matter before us at considerable length in earlier years.

Mr. McGrath.—Yes, but there has been a definite understanding between the Post Office and the Department of Finance as to the waiving of prosecutions and when they would go to the Department to ask for permission to do so.

189. Deputy Haslett.—That was our recommendation, that there should be an understanding.

Mr. McGrath.—I am reporting now that your recommendation has been carried out.

Deputy Haslett.—That is satisfactory.

190. Chairman.—The Auditor-General has the following note dealing with claims abandoned:—

“As shown in a note to the account, claims amounting to £71 16s. 6d. in respect of damaged Post Office vehicles were abandoned during the year either as irrecoverable or as the result of compromise settlements with the insurance companies concerned. I have been informed that the question of negotiation of formal agreements with insurance companies under which claims will be settled on a mutual forbearance or halving basis is still under consideration.”

Mr. O’Hegarty.—That is still in the hands of the Department of Finance.

Mr. Nally.—The matter is under active consideration.

191. Chairman.—I wonder if any difficulty is experienced in getting the same conditions from insurance people as insurance companies have amongst themselves?—I do not think so. It is purely a legal difficulty.

Mr. Almond.—Negotiations have been opened with practically all the insurance companies and with certain firms who are exempted from taking out insurance policies and are allowed to be their own insurers under the Act. The Chief State Solicitor has opened negotiations with a view to concluding mutual forbearance agreements (which are commonly known as knock-for-knock agreements) or, in the alternative, halving agreements. Under mutual forbearance agreements each side bears its own damages and losses. In the halving agreements each side bears half of the total losses. There has been some difficulty about the form of the agreements and certain legal points are involved, but these are at present under consideration by the law officers. It is hoped that agreements will be concluded very shortly. In the meantime we have been proceeding, in certain cases, on the basis of knock-for-knock agreements, or if the insurance companies wish, halving agreements in anticipation of the conclusion of such agreements.

192. Chairman.—You find no difficulty about this.

Mr. Almond.—We have not been able to act in that way in every case. Where an insurance company has been approached and expressed willingness to conclude an agreement, we have proceeded on the basis of such an agreement, although it is not actually concluded.

193. Deputy Haslett.—Are we to understand that the halving was irrespective of who was to blame?

Mr. Almond.—Irrespective of the negligence. It may be assumed, taking a large number of cases in which there is negligence, that it will work out evenly on each side.

Chairman.—That principle exists at present between the insurance companies. When there is an insurance in two different companies, they treat it as knock-for-knock, and the State Departments are following that principle. In the case of State vehicles a similar agreement is being negotiated with the insurance companies, as exists between the companies themselves. That saves law costs and is taken as a most satisfactory form of agreement.

194. Deputy Haslett.—But it seems to put the employees of the State in a position different from that of ordinary users of the road. If you do not bring home the blame in an individual case—I do not say it is true in every case—it might tend that the employees of the State would want more of the road than ordinary users.

Chairman.—That is a different matter.

Mr. O’Hegarty.—If you have a case in court, in which the State is involved, the jury find against the State employee in almost every case.

Chairman.—That does not arise. This is the arrangement where actual damage occurs and where it is found that he is liable. This does not stop a prosecution in the courts for negligence or anything like that.

Deputy Goulding.—It is arrived at as the best business arrangement.

195. Chairman.—We have it now from the representative of the Department of Finance that an arrangement is being negotiated. It is the only arrangement that would be satisfactory in my opinion. Paragraph 66 of the Report reads:—

“In paragraph 36 of my report on the accounts for the year ended 31st March, 1930, I referred to the agreements with the railway company under which telegraphists were provided by the Department at certain stations. I have been informed that it has not yet been found possible to arrange a moreequitable agreement with the company but that negotiations are still in progress.”

It appears that a question arose on this matter when it was reported before. This is an agreement under which the railway company gets certain services value for £28,000 and we get something in return which is value for £9,000 approximately. Could we have any further information on this matter?—The figures you read out are Post Office figures and the railway company will not accept them. This is a very difficult situation, because the present agreement between the Great Southern Railways Company and ourselves goes back for 60 or 70 years. At the time it was made it seemed to the Post Office a very fair agreement, but now we think it is not a fair agreement. We are paying much more than we get from them, but the railway company is in the position that the agreement is an agreement in perpetuity and the Post Office cannot force them to break it. We are simply trying to get the railway company to recognise the altered circumstances and to enter into a new agreement. Negotiations are still going on.

196. Could Finance tell us anything about it?—Finance does not know anything about it. We can only ask the railway company to consider the making of a new agreement.

Deputy Goulding.—If they are making a substantial profit out of this agreement it is hard to ask them to make a new agreement.

197. Chairman.—Could we not ask the Department of Finance to take up the matter?

Mr. Nally.—The Department of Finance is in the position that it is trying to get the Post Office to arrange a new agreement with the Railway Company.

Mr. O’Hegarty.—And the Post Office is faced with the position that this is an agreement in perpetuity which it cannot break up. It can be broken if the Railway Company agree to break it. The Railway Company put one over on the Post Office 70 years ago, and we are suffering for it. We would much rather see these things settled by agreement, and we have hopes of getting the Railway Company to consider it eventually, but they say that the future of the railways is in such a state of uncertainty at present that they would rather wait a little while.

198. Deputy McMenamin.—How many stations are these telegraphists provided at?

Mr. McGrath.—42 or 43.

199. Chairman.—The Post Office and the Comptroller and Auditor-General say that the services we give to the Railway Company are value for £28,000, and the services we get in return are value only for about £9,000.

Deputy McMenamin.—They have the whip hand. They can say that they will not give us these services except at this price. The only remedy open to us, I think, if we think that this is an unreasonable agreement, is to go before the Railway Tribunal and ask for a new agreement.

Chairman.—We have the Secretary’s assurance that the Post Office is doing its best, so that there is no use in going into it further.

200. Deputy McMenamin.—Did the Post Office take any steps to bring the matter before the Railway Tribunal?— We have told the Railway Company that we shall have to consider it. They know the situation perfectly well.

Deputy McMenamin.—That is the only thing we can do, as they have the whip hand. They can say: “You can take it or leave it.”

201. Chairman.—Paragraph 67 states:

“Sums paid in respect of the pensions of officers who were not included in the staffs transferred to the Irish Provisional Government under the terms of Article 7 (1) (b) of the Provisional Government (Transfer of Functions) Order, 1922, continue to be charged to a suspense account pending completion of the reciprocal arrangements contemplated by Section 7 (2) of the Irish Free State (Consequential Provision) Act, 1922. The total amount so charged up to the 31st March, 1935, was £2,255 12s. 1d.

In paragraph 37 of my report on the accounts for 1931-32 I referred to the case of a clerical officer who transferred from the British Service to the Saorstát Post Office and for whom no Civil Service certificate was issued by the Saorstát Civil Service Commissioners. This officer has since been retired on the ground of ill health, and under authority of the Department of Finance a pension has been awarded to him. Payments under the award are charged to suspense pending the passing of the required legislation. The pension so charged amounted to £53 6s. 1d. at 31st March, 1935.”

Mr. McGrath.—The fact that these pensions are charged to suspense necessitates our bringing this matter forward.

202. Deputy Goulding.—It will be adjusted in time, of course?

Mr. McGrath.—I am sure it will. The present is not a good time, of course, to bring forward such matters for settlement, but the Audit Office must keep them before the Dáil.

203. Deputy McMenamin.—It is purely theoretical?

Mr. McGrath.—Yes. It cannot be charged up to an account as they are merely payments made on the merits of the particular case.

204. Deputy McMenamin.—Is it not a fact that a man who was an established civil servant at the passing of the Treaty was entitled to have a certificate issued to him as a civil servant here?

Mr. McGrath.—I am afraid he could not be allowed here without going through the proper formalities.

205. Deputy McMenamin.—There is no question that he was an established civil servant?

Mr. McGrath.—He was in both cases.

Deputy Goulding.—Obviously there is nothing that we can do in the matter.

206. Chairman.—Are you doing anything to have the matter regularised?— It is a matter for Finance.

Mr. Almond.—The Superannuation Bill has been given its First Reading and is in the hands of the draftsman. All these cases that have been mentioned will be included in the Bill and the payments can be removed from suspense as soon as the Bill is passed.

207. Deputy McMenamin.—That is hanging over since 1921-22?

Mr. McGrath.—Yes.

208. Deputy McMenamin.—There has been plenty of legislation passed since then which might have covered this case.

Mr. O’Hegarty.—It was his own fault purely.

Deputy McMenamin.—He must have kept himself pretty obscure.

209. Chairman.—Paragraph 68 reads:

“A test examination of the store accounts was carried out with satisfactory results.

In paragraph 46 of my report on the accounts for 1932-33, I referred to the change in the method of financing expenditure in connection with the purchase of stores for other Government Departments. The new procedure outlined therein has been in operation throughout the year under review. Only the cost price of the articles supplied is repaid to the Department of Posts and Telegraphs, no charge being included to cover cost of inspection, warehousing, etc.

In addition to the engineering stores shown in Appendix II as valued at £105,923 on 31st March, 1935, engineering stores to the value of £948 were held on behalf of other Government Departments. Stores other than engineering stores held at that date were valued at £71,989, included in this amount being a sum of £28,304 in respect of such stores held for other Government Departments.”

Mr. McGrath.—These paragraphs are written for the information of the Dáil.

210. Deputy McMenamin.—Is it not customary for the Post Office, when they do work for other Departments, to make a charge for the services rendered?— There is a charge of 5 per cent. made to cover the cost of inspection and so on. That is recovered as services rendered.

211. There is a charge then?—This is a book entry business.

Mr. McGrath.—I say in my report:—

“Only the cost price of the articles supplied is repaid to the Department of Posts and Telegraphs, no charge being included to cover cost of inspection, warehousing, etc.”

Mr. O’Hegarty.—That is included in the actual money recovered. Hitherto the thing was paid in cash. The 5 per cent. is recovered as services rendered in the ordinary Appropriation Accounts.

212. Mr. McGrath.—I say: “No charge being included to cover cost of inspection, warehousing, etc.” There was a charge for inspection previously?—I read that differently. You are referring to the actual money recovered in cash. There is no charge for inspection in that. There is 5 per cent. to cover inspection, and that is now collected as services rendered.

213. Deputy McMenamin.—Do you consider that 5 per cent. would cover all these things?—Yes.

214. Mr. McGrath.—I am not questioning that. The real matter under review here is that the old procedure was that the Post Office bought, out of moneys in their hands from several sources—not voted moneys—the requirements for the other Departments, and held these requirements until the other Departments took them over and then paid for them. Now the Post Office buy the requirements of the other Departments with voted moneys, and they get a refund of these moneys during the same year. Is not that so?—Yes.

215. I say in my report “only the cost price of the articles supplied is repaid to the Department of Posts and Telegraphs, no charge being included to cover cost of inspection, warehousing, etc.” Previously there was a charge for the cost of inspection?—I have already explained that five per cent is the cost of inspection, and that that is recovered as services rendered, and not in cash. It is taken credit for in the Post Office commercial accounts.

216. Then we are talking about two different accounts?—I am trying to make that clear. It was not clear.

217. I am talking about the cash here. Do I understand that there is an allowance made in the commercial accounts for services rendered, but that it is not charged up in the cash account?—Yes.

218. Deputy McMenamin.—Is that shown here?

Mr. McGrath.—It is not shown here. In the commercial accounts, which are a separate set of accounts to the accounts with which the Committee are now dealing, there is an allowance for inspection, warehousing, etc., but there is no allowance in the Appropriation Accounts which are cash accounts.

219. Deputy McMenamin.—Do you examine the commercial accounts also?

Mr. McGrath.—I do.

220. Deputy McMenamin.—Did you find that item there?

Mr. McGrath.—We find items for services rendered to all Government Departments. For instance, the Post Office in their commercial accounts charge for the postal services given to all Departments. There is no charge in these accounts for postage.

221. Deputy McMenamin.—Does the 5 per cent. cover the cost of inspection and warehousing, and all the expenses that you are put to in dealing with the stores that you hold for other Departments?—We recover generally the whole of the expense that the Post Office is put to in connection with the handling of stores for other Departments. The figure is arrived at as a result of examination.

222. And you think that 5 per cent. is sufficient to cover all that?—Yes.

223. The only question is whether the 5 per cent. is sufficient to cover all these things?—Yes, we think it is.

224. Have you any method of testing whether that is accurate or inaccurate? —It is as accurate as the Post Office can make it.

225. Did you make any estimate of the cost of this warehousing? Did you get any estimate showing what the actual cost was, and did you relate that to the 5 per cent. to see whether or not the 5 per cent. covered the cost that you were put to?

Mr. McGrath.—The Post Office itself is concerned as to whether they charge sufficient to cover the cost. We are satisfied that the Post Office are acting reasonably when they charge 5 per cent.

226. Chairman.—In this discussion we are getting into the realm of administration, a matter which does not concern this Committee. Our concern is to see that the payments made have been made according to law.

Mr. McGrath.—I think this whole question has arisen owing to a misunderstanding on account of the answer given by the Accounting Officer.

Mr. O’Hegarty.—Excuse me, I think the misunderstanding is on account of your note.

227. Deputy McMenamin.—So far as I am concerned there is no misunderstanding. My only trouble is to ascertain whether the sum charged is sufficient. I asked the Accounting Officer if he thought the 5 per cent. was sufficient to cover all the services rendered by the Post Office to the other Department, and his answer was “Yes”. The only question is whether the Comptroller and Auditor-General accepts that statement or not. The Comptroller and Auditor-General has complained here that there is no charge made.

Mr. McGrath.—I am not complaining. We are not examining the commercial accounts, and there is nothing here about 5 per cent.

228. Mr. O’Hegarty.—Your note says that there was no charge for inspection. I had to explain that, seeing that it was not true. I had to explain that there was an allowance made for inspection.

Mr. McGrath.—We are not talking here about the commercial accounts at all. There is a discussion now on the commercial accounts which have not been referred to this Committee.

229. Chairman.—I rule that we can have no further discussion on this item. The Accounting Officer has explained that the five per cent. is being charged, that it is shown in the commercial accounts, and that he considers it is sufficient. That meets the situation as far as I see it. We can now take the next paragraph of the report.

Deputy McMenamin.—No. It seems to me that, as far as the Comptroller and Auditor-General is concerned, his difficulty is that this five per cent. should be transferred to these accounts.

Mr. McGrath.—I have no difficulty whatever.

Chairman.—I have ruled that the matter can no longer be discussed.

230. Chairman.—We will now take paragraph 69 in the Comptroller and Auditor-General’s report:—

“A test examination of the accounts of Postal, Telegraph and Telephone services was carried out with satisfactory results. Some doubt has existed as to the position concerning rentals in respect of telephones installed in certain lighthouses. It has now been decided by the Minister for Finance that the incidence of the rentals should be determined on the basis of user of each installation: the rentals to be charged against the Commissioners of Irish Lights in certain cases, and against the Department of Industry and Commerce (Marine Service Vote) in others.”

231. Deputy McMenamin.—This is a service that you give to the Irish Lights? —Yes.

232. But the lighthouses are entirely under the control and management of the Commissioners of Irish Lights?—Yes.

233. In view of that, how does this matter arise?

Mr. Almond.—Perhaps I can explain the position. There are telephones installed at certain shore lighthouses. In some cases the telephone is maintained solely for life-saving purposes. That is a function which belongs to the Department of Industry and Commerce. In other cases, the telephone is maintained purely for lighthouse purposes. That is a function that belongs to the Commissioners of Irish Lights. The question arose then as to how the cost of these telephones should be met. We decided that, where the telephone was used solely for life-saving purposes the cost should be met out of the Marine Service Vote under the Department of Industry and Commerce.

234. Deputy McMenamin.—What duties do the lighthouses perform in regard to life-saving?

Mr. Almond.—Simply this, that they are considered convenient places in which to have the telephone for life-saving purposes. Those stationed in them can easily get in touch with a life-saving crew in a particular area by having the telephone installed. The telephone may not be required for lighthouse purposes, but where it is used for lighthouse purposes alone we make a claim against the Commissioners of Irish Lights for the rent. In other cases, where it is used for both services, the cost is shared.

235. Chairman.—We can now take paragraph 70 in the report of the Comptroller and Auditor-General:—

“The accounts of the Post Office Savings Bank for the year ended 31st December, 1934, were submitted to a test examination with satisfactory results. No charge has yet been included in the accounts to provide for the pensions of staff wholly employed on Savings Bank work.”

Mr. McGrath.—This is the third or fourth time that I have made the same comment with regard to the provision of pensions for the staff wholly employed on Savings Bank work. It is really a matter for the Department of Finance.

236. Deputy McMenamin.—Is there such a staff employed?—Yes. This is one of the Department’s book entries that no one understands except the Department of Finance itself.

237. Chairman.—I take it that the people who are employed in the Post Office and who do Savings Bank work as part of their ordinary duty get pensions? —They do. They do general Post Office work. This refers to the headquarters staff.

238. Deputy McMenamin.—Is he not a civil servant? Is he not entitled to his ordinary pension?

Chairman.—It seems he is not.

Mr. O’Hegarty.—The Savings Bank is not a Post Office service at all. It is an agency service; we carry it on for the Department of Finance.

239. Chairman.—Can the Department of Finance give us any information as to whether that is likely to be righted?

Mr. Nally.—Last year the question was discussed by this Committee. The Committee were then told that the Department of Finance proposed to settle the question by inserting a clause in a new Superannuation Bill which was under discussion. That Bill has since been drafted and introduced, and the clause is in the Bill. When the Bill becomes law the difficulty will disappear. The people affected principally are a large body of staff employed at headquarters solely on Savings Bank work. They are not employed at all on Post Office work. They are employed in the Post Office only as a matter of convenience, the Post Office being the agent of the Minister for Finance for the administration of the Post Office Savings Bank service.

240. Deputy Goulding.—I take it, of course, that that will be retrospective?

Mr. Nally.—Yes.

241. Deputy McMenamin.—The Post Office does all the work, telegraphs, letters, telephones, savings bank, etc. You do not segregate those at all?

Mr. Nally.—No. Outside of the body of staff at headquarters to whom I am referring, there is nobody in the Post Office employed whole-time on Savings Bank work. The remainder are employed on Savings Bank, telegraphs, and so on, at the same time.

Deputy McMenamin.—It is a curious arrangement.

Chairman.—We now come to paragraph 71, which reads as follows:—

“A test examination was applied to the accounts of the Post Office factory with satisfactory results. The expenditure on manufacturing jobs, including work in progress on 31st March, 1935, amounted to £14,268; the expenditure on repair works (other than repairs to mechanical transport) amount to £12,113; and the expenditure on mechanical transport repairs to £2,622. I observed that certain manufacturing work was undertaken during the year to meet requirements of the Department of Defence, although Department of Finance authority had not been obtained to include the various items in the schedule of articles which the factory is authorised to manufacture.”

242. Deputy McMenamin.—In other words, this work was being done for the Department of Defence without authority, and without any remuneration for it? Is that it?

Mr. McGrath.—The point here is that certain work is being done on behalf of the Department of Defence by the Post Office factory, such work not having been authorised by the Department of Finance. In cases of this sort, where the Post Office factory undertakes new work, the factory has to go before the Department of Finance and prove whether they can produce the article on a competitive basis. I have here a reply of yesterday’s date, in which the Department of Posts and Telegraphs say they are going to Department of Finance for covering sanction.

243. Deputy McMenamin.—Is this work charged against the Department of Defence as well?

Mr. Nally.—Yes.

244. Chairman.—Is this usual work they are proceeding with?

Mr. O’Hegarty.—It is work on a number of articles which are not manufactured outside the Post Office factory at all, and cannot be got in this country. It was in order to get the articles in this country that the Post Office factory put in tenders.

245. Deputy Coburn.—It states here that those items are not in fact in the schedule of articles.

Mr. O’Hegarty.—We interpreted the authority in a slightly different fashion, and have gone to the Department of Finance to clear it up.

246. Chairman.—You did not think it necessary to get the prior sanction of the Department of Finance before you proceeded with this work?—The Post Office Secretary did not know about this until after those things were done. They were done by the Controller of Stores in interpreting the instruction in his own way, and they were mostly done with the knowledge and approval of the Government Contracts Committee.

247. And you are now proceeding to have the matter rectified by getting the Department of Finance covering sanction for it?—We have actually written to the Department of Finance asking for covering authority.

248. Deputy Coburn.—What would be the nature of the items which you state cannot be manufactured?

Chairman.—Military equipment of various types.

Mr. O’Hegarty.—Cartridge carriers, web equipment, and things of that kind. There is also an item of 11,000 housewives; I do not know what that is at all.

249. Chairman.—Has the Department of Finance any further comment to make?

Mr. Nally.—The Department of Finance have received a letter from the Department of Posts and Telegraphs asking for covering authority. We thought it well to hear the discussion here this morning before giving it any further consideration.

Mr. O’Hegarty.—I may say that in regard to the greater portion of the items involved here the Minister for Finance has already given us authority through the Government Contracts Committee.

250. Chairman.—It seems his hands are fairly well tied then.

Mr. Nally.—The Minister for Finance would not admit that the Post Office having got agreement from the Government Contracts Committee would entitle them to do something outside the authority already given to them by the Minister for Finance.

Mr. O’Hegarty.—This is a letter giving authority——

Mr. Nally.—There are two entirely different questions. The history of this case is that six or seven years ago consideration was given by the Department of Finance, on representations from the Post Office, to the question of the articles which should be manufactured in the Post Office factory. The Post Office factory was set up in the first instance as a repair shop. After it had been so set up it was suggested to us that, in addition to doing repairs, the factory ought to manufacture some things as well. It was suggested that the manufacturing work might be taken on to provide full employment for the staff during slack periods in the repair work. It was also represented that there were certain articles which could be more economically produced in the Post Office factory than anywhere else. The Department of Finance examined those submissions, and gave authority to the Post Office to manufacture certain articles on certain conditions, and accompanying their authority was a schedule prepared by the Post Office itself. The Comptroller and Auditor-General’s comment here is concerned with the fact that several articles were manufactured which were not in fact in the schedule. The schedule enumerated only items which the Department manufactured regularly. Articles manufactured once in five years, for instance, need never be put in the schedule, so long as specific authority for their manufacture was obtained before their manufacture was commenced by the Department. It was represented to us on a few occasions in connection with three big items mentioned in the Post Office letter of yesterday that the Department did require our sanction, because those certain items were not in fact in the schedule, and there we have a recognition by the Department that they should not manufacture items which were not included in the schedule.

251. Deputy Goulding. — Why not amend the schedule then?

Mr. Nally.—The manufacture of other items, such as those referred to by the Comptroller and Auditor-General, was never authorised, although two of the items were in fact reported to the Government Contracts Committee in the schedules of orders. At the same time we think that the Minister for Finance will have no objection to giving covering authority for the manufacture of those particular items. We would also be prepared to meet the Department by delegating to them some further authority if they should require it. We would much prefer to do that rather than let the Department take into its own hands authority which it has not got. If the Minister for Finance gives the Department authority for manufacture of the articles not in the schedule, he would be disposed to ask the Department to inform him— in schedules furnished, say, every six months—of the articles which it did manufacture, because we think that there is so much expenditure concerned in this matter that the Post Office will need to be watched.

252. Deputy Smith.—Have the Contracts Committee any responsibility for examination of the schedule before giving the contracts?

Mr. Nally.—No. It is entirely a matter of examining the contracts.

253. Chairman.—I should like to know what Mr. O’Hegarty has to say to all that.

Mr. O’Hegarty.—I think it is all very fine and large, but this is one of those rigid cases in which it is not always possible to follow the exact line which the Department of Finance would like. This matter arose out of the fact that the Controller of Stores interpreted the authority in a way with which the Department of Finance would not agree, and which we, perhaps, would not agree with if we had known beforehand. The thing having been done, we asked the Department of Finance for covering authority and no harm has been done. They were articles that could not be produced here.

254. Chairman.—I think the matter is now on a satisfactory basis. The Department of Finance has stated the conditions for future action, and has commented on the past conditions. The secretary is undertaking to meet that line, and I think the matter will adjust itself.

Deputy McMenamin.—Could these things be manufactured anywhere else?

Deputy Coburn.—This removes the element of competition. I should not like to agree to have Government control extended in regard to the manufacture of other articles which possibly could be manufactured as well by private persons, thereby removing the competition that would necessarily exist if those people had an opportunity. There is a principle involved.

Chairman.—The very moment you get on to that you are on the question of policy and administration. These matters are the function of the Dáil; I cannot allow the discussion.

Deputy Coburn.—Do you want us to agree with the matter?

Chairman.—All that we are here for is to see to it that the moneys expended are expended according to law.

Deputy Smith.—There is no question of doing an injustice to private enterprise because we have been told that those articles were not manufactured here.

Chairman.—We are not going to discuss that.

Deputy Smith.—Whether we are to discuss it or not, the question of injustice does not arise.

Chairman.—I am not going to allow that discussion to take place. If there are no other questions in regard to the statements which have been made, we will turn to the Vote, which is on page 189.

255. Deputy Haslett.—With regard to sub-head E-Conveyance of Mails—are these contracts arrived at by competition or are they just arranged as between road and rail services?—Yes, they are competitive contracts.

256. Are they open contracts?—Yes.

257. Tenders are asked for?—Yes.

VOTE 64—WIRELESS BROADCASTING.

Mr. P. S. O’Hegarty further examined.

258. Chairman.—The Comptroller and Auditor-General has a note on this Vote, at paragraph 72, which says:—

“In paragraph 67 of my last report I stated that the arrangements for the cataloguing, filing and custody of the stocks of music and gramophone records were still unsatisfactory. The cataloguing of the music has since been completed, but the work of classifying and registering the gramophone records has not yet been finished.”

Mr. McGrath.—This matter was dealt with last year, and we find that the Department has advanced somewhat in the matter. They have succeeded in cataloguing the music and the cataloguing of the gramophone records is being dealt with.

Mr. O’Hegarty.—It is almost finished, as a matter of fact.

259. Deputy O Briain.—Is there a big stock of records?—We have about 10,000.

260. Deputy O Briain.—It would no be a bad idea to burn a lot of them.

Deputy Haslett.—And save cataloguing.

261. Deputy Goulding.—You sell these records, of course?—No.

262. What do you do with them?—We send them to hospitals and places like that.

263. Deputy Crowley.—With regard to sub-head C—Travelling Expenses—in what way are they incurred?—If you have an outside broadcast, from Athlone or some of those places, we have to send engineers down to fix up plant, and so on.

Witness withdrew.

VOTE 47—SECONDARY EDUCATION.

Mr. F. O’Duffy, called and examined.

264. Chairman.—There is no note from the Comptroller and Auditor-General on this.

265. Deputy Coburn.—With regard to sub-head A (3)—Bonus to Choirs and Orchestras—where are those choirs?— They are in different secondary schools. Choirs and orchestras in secondary schools, if they submit to a practical examination, get a bonus at the end of the year. There are about 100 choirs and 35 orchestras, and the amount of the bonus varies from about £5 up to £15. The average is about £7.

266. That is to encourage choirs?—Yes.

267. What is the general standard of the choirs?—The standard is high. These choirs are examined by a board of examiners. Dr. Larchet, Professor O’Brien, and a number of others form a board which travels around the country and examines them. In order to earn the bonus, they must receive at least 75 per cent. The standard is always said to be very high.

268. The high standard is reflected in the Feis Ceoil?—I do not know if secondary schools generally can enter for the Feis Ceoil competitions; secondary schools in remote parts of the country, like Monaghan and other parts, at this season of the year, when they are preparing for examination, could scarcely afford the time to send a choir. It would probably take a number of days to send a choir to the Feis Ceoil.

Deputy Coburn.—Still, one would expect that their experience during the school years would have some effect on their future life and be reflected in it. However, I merely wanted to inquire about them, and to learn that this is designed to encourage these choirs.

269. Deputy O Briain.—With regard to sub-head D, is this sub-head in connection with the Intermediate Examinations?— It includes provision, first of all, for scholarships given as a result of the Intermediate Examinations, and also for scholarships for people from the Gaeltacht.

270. Deputy Coburn.—What would be the amount spent on prizes nor Irish as distinct from scholarships?—The proportion is very small. It would be about £55.

271. Deputy O Briain.—With regard to sub-head E—Grant towards publication of Irish Text Books—is this grant supplementary to the question of the publication of text books?—This is the amount that is available for publication of text books-books suitable for texts in Secondary Schools. It is dealt with by the same Committee as that which deals with the publication of ordinary reading books in Irish.

272. Deputy McMenamin.—These are Secondary School Irish Text Books?—Yes.

273. Deputy O Briain.—How many text books were published during the year under review?—During the year under review there were eight published. Of course, you cannot compare the expenditure here with the books actually published in the year under review, because a book might be accepted from an author and the author might be paid, and then it would be sent to the printers and we find that often there is a very long and tedious process to go through before we get it from the printers. Sometimes it takes a year and a half or even two years. That means that you might have here this year a sum in respect of a book that might not be available for perhaps a year afterwards.

274. Deputy McMenamin.—With regard to sub-head F-Appropriations-in-Aid—this sum here for the translation of these books: are these books sold afterwards? —Oh, yes.

Do the receipts in that connection come into your Department?

Chairman.—Further down you will notice receipts from the Stationery Office for the sales of Irish text books.

Deputy McMenamin.—But that note deals with Elementary Schools—not Secondary Schools.

Chairman.—Well, go on down still further.

275. Deputy McMenamin.—I see, Mr. O’Duffy, that you presented £97 worth of text books in Irish to National Schools in the Fíor-Ghaeltacht?—That is a different matter. There are two different questions arising now. The number of these school text books that are sold and the receipts are shown on page 125 of the Appropriation Account. The other question —the presenting of a number of text books to certain schools—is a separate matter. Some of these books, that had been published a few years ago, were not selling very rapidly and there was a large stock of them on hands. It was thought desirable to present them to some of the poorer schools in the Gaeltacht in order to enable them to form a sort of nucleus for a library in each school. We picked out a number of books for each district —in Connacht Irish for the West, Northern Irish for Donegal, and Munster Irish for schools in the South. We made a present of these books to the principal teacher of a selected number of schools in the Gaeltacht. We imposed certain conditions, the chief condition being that the books should be put in a book-case and should form the basis of a library, the books to be lent to the pupils and returned in the usual way.

276. Deputy Haslett.—Has anything been done in regard to pensions in connection with Secondary Education?—Yes. We have a pension scheme for Secondary Teachers. I take it that the Deputy is referring to the fact that no money appears here, but there is a contributory pension scheme for Secondary Teachers. As I say, it is on a contributory basis and, so far, the contributions have been sufficient to pay the pensions and the State has not been called upon to help the fund. However, I do not know how long that will continue.

VOTE 48—TECHNICAL INSTRUCTION.

Mr. F. O’Duffy further examined.

277. Chairman.—There is a note on page xiii, paragraph 29, which reads as follows:—

“The charge to sub-head D includes £18 1s. 11d., being a grant paid to an industrial concern in respect of the training of apprentices. It appeared that the grant represented a proportion of the wages paid to a forewoman in respect of the time devoted by her to the supervision of learners who formed part of the ordinary organisation of the factory. I have asked that the covering sanction of the Department of Finance may be obtained for the payment.”

Mr. McGrath.—The covering sanction under the Department of Finance has since been forwarded to the Audit Office. Deputies will see that this is a very peculiar payment, and the Audit Office looked upon it as one that required attention. It appeared to us that the learners in question formed part of the ordinary factory organisation and were in receipt of wages. The Audit Office only received the reply a couple of days ago and had not time to go into the matter fully. There are some regulations to be made under Section 109 of the Vocational Education Act, 1930, and it is quite possible that when those regulations appear an item such as this will be allowable. However, as I said before, it appears that this payment is made to a business firm, and not exactly to pupils receiving technical education or instruction.

278. Deputy McMenamin.—In other words, is there any sum paid for the training of these pupils by the Department to these firms that train these apprentices?

Mr. O’Duffy.—The position is that there was, under the old Department of Agriculture and Technical Instruction, provision for the payment of grants towards the training of apprentices. The provision was that three-fourths of the cost of training an apprentice for the purpose of any industry or in any factory would be refunded by the Department. We have been continuing to act on those regulations. That is really what has occurred in this case. A certain concern inquired if we gave any assistance for the training of apprentices. That firm was setting up or developing a factory here in the city. We at once informed them about these old regulations—Section 4, Grants, as they were called—and this firm agreed to avail of the assistance or facilities offered by these grants. Then this factory took one of their staff—a forewoman, I think, in the factory—and she was employed for a certain number of hours each day for the purpose of training six or eight pupils. We recouped the factory three-fourths of this woman’s wages for the training of these girls and also three-fourths of the small allowance for waste and destruction of material during the period of that instruction. These were the regulations that formerly applied for the payment of such grants.

279. Yes, but you say that the grant represented a proportion of the wages paid to a forewoman in respect of the time devoted by her to the supervision of learners who formed part of the ordinary organisation of the factory. These people would be learning under the guidance of the expert under whom they were being taught their trade. Was it not the function of that person to superintend these boys or girls, as the case may be, while they were doing that? Where did the lady supervisor come in?

Mr. McGrath.—She is the forewoman there, I understand.

280. Deputy McMenamin.—Yes, in the factory, but this looks to me to be like an honorarium to this lady. Is that not so, Mr. O’Duffy?—Oh, no. I assume that if that lady had not been set aside to superintend and train these girls she would be doing other work for the factory and earning wages.

281. Deputy Coburn.—It amounts to this, that instead of training these pupils within the walls of the technical school, the training is being done in the factory? —That is true.

282. And with the materials in hand there, they would probably learn more? —Yes. As a matter of fact, in this particular factory the machinery is different from that used in similar factories. I may as well say that it is a factory for the making of collars and shirts. We have classes in the city technical schools in shirt-making but not in collar-making, as far as I am aware. It also appears that the machinery used in this factory is different, that it is highly organised, and the girls must be skilful in order to have a job clear in a certain time. I understand that the factory uses a type of conveyer belts, somewhat like the Ford factory, and for that reason extra training is needed.

283. Deputy Smith.—Were the trainees connected with the schools in the city?— They were actually apprentices in the factory.

284. And they had not been previously connected with the technical schools here? —As far as I am aware, no.

285. It seems hard to see how your Department would be responsible for training people who would afterwards contribute to the industry to which you refer?—Well, the position is that our Department has always been in the position to do so and that we have done so, off and on, on other occasions. In fact, I might add that on this particular occasion there was a complaint from the factory because we did not refund also part of the wages of the apprentices concerned. They were quite indignant about it and held that we were not giving them enough. We have made the same offer to at least two or three other concerns in the last couple of years and they did not avail of the offer. When the offer is availed of, our inspector must visit the factory, see the conditions under which the work is being carried out, and inspect the books and see what wages are being paid to the instructor. A number of factories apparently are not willing to give these facilities.

286. If you do not do that, how would it be done? If you do not grant these facilities to this particular institution, who would do it?—The management would have to bear the cost themselves. The manager would probably take on one or two apprentices at a time and let them pick up their trade as well as they could by watching other people doing the work. Our idea is that you will get a more successful and a better trained worker under our system. Under our system the foreman or the forewoman not only explains how a thing is done, but why it is done. That type of instruction may be given in factories normally, but I do not think it is.

287. If you are making people competent to take up jobs, that would be all right; but here you are paying for equipping people that the management would have to equip if you did not intervene at all?—I do not see very much difference. In our school we train young people for particular trades. For instance, in shirt-making there are a large number of girls trained and these are available for the shirt factories when they require additions. There is no serious difference.

288. I think there is. If, for instance, this Committee desired to manufacture a particular article and a certain amount of staff was required, we would have to get the staff and pay for it and see it was competent. If people would have to be trained we would have to pay the cost. Here in this case your Department comes to the rescue and you proceed to give that company the technically skilled workers and to pay for them?—If the Deputy or anyone else is prepared to start an industry and if the Department of Industry and Commerce assure us that that industry is not already over-crowded or saturated —whatever is the word—we are willing to train staff for you if you put up a proposal to us to-morrow. We have, through the country, quite a number of places. This is the only instance in which any payment for training has been made by us direct to the factory. We have in quite a large number of centres people being trained and equipped to step in and work in the factory directly.

289. Deputy Coburn.—You have trained workers for a few factories?—The Deputy possibly refers to the boot factory in Dundalk. In that instance the local vocational committee have trained apprentices there. Then there is a factory at Nenagh, the aluminium factory; the tannery at Carrick-on-Suir; the pottery at Arklow, the tile-making factory at Tralee, and the clothing and dressmaking trades in Dublin. It is quite a usual thing. We offered the same facilities to one or two other factories, but they did not follow it up.

290. The only question with which we are concerned is to see if you got value for that expenditure. What guarantee has your Department that these apprentices are kept on in the factory? Do they keep these learners in constant employment? —So far as we are concerned, I think there are probably more people being retained if we come in and pay for the training of apprentices in the factory than if we were to train people outside, because they may or may not get employment later. I feel there is less danger of waste under this system of training apprentices in the factory than if we trained 20 or 30 outside, in which case the factory might employ only ten or 15 of them.

291. Deputy Haslett.—I understood that Deputy Smith wanted to know how you connected—were these people first enrolled in the class and then sent on to get practical experience in the factory, or how did you arrive at this particular number? I understood that was what Deputy Smith was at, first.

292. Deputy Smith.—That was part of it, but I find it very difficult to agree with the whole principle. I do not see why your Department should take it on itself to accept the responsibility of training people in order to hand them over to me or someone else so that I might make, if you like, a profit out of them. If I proceed to establish an industry such as you have mentioned, it is my concern to pay the cost?—It has been put to us frequently that our business is to give technical education and provide young people who can take up skilled employment. We have always aimed to do so.

293. Deputy Goulding.—You train the young men and girls at the request of the factory?—In this particular case the factory had taken in these young people and they found it difficult to train as many as they required. They made a request to us and we said “certainly.”

294. That is happening in Waterford City and other places at the moment?— Yes.

295. Chairman.—You have since got Department of Finance sanction for that? —Yes, towards the end of last month.

296. As a result of the Comptroller and Auditor-General’s query you got Finance sanction?—Yes.

297. Deputy Smith.—Can we as a Committee express an opinion on the wisdom or otherwise of the continuation of that policy?

298. Mr. McGrath.—I think it would be within the power of the Committee to do so. A matter similar to this was discussed here almost ten years ago. Mr. O’Duffy had not anything to do with it. It was in connection with a payment and it was alleged it was a subsidisation of a particular firm. If this payment was made to one industry—I call it an industry as distinct from a firm within an industry —it would be a different matter. There may, for instance, be 12 shirt factories in the Free State and one gets advantages such as we have been speaking of.

299. Deputy Coburn.—In one case in Dundalk I understand the Minister for Finance made up payments from another source and it was thought that that meant giving a preference to a factory. There were boys working overtime at night learning their trade and they were making boots and things for other factories.

300. Deputy Smith.—I think there is a sharp distinction between Mr. O’Duffy’s Department undertaking the equipment of boys and girls to go out in the world and compete for all types of employment and a business starting in the city, the people starting the company being relieved by your Department of the responsibility of training staff that they would have to pay for, anyhow.

301. Deputy McMenamin.—Surely the business of the Department is to specially equip the boys for this job? That is what the Department is for?—The matter is undoubtedly very complicated. One consequence of our declining to give assistance of the kind might be to concentrate all industry in the one place. We have shirt factories in a certain place. Anywhere you have shirt factories you have a floating surplus of girls who have had some training in shirt work. Supposing you got a man anxious to start a shirt factory he will go to the place where they are already, with the intention of getting skilled labour. This has always been done; it has been done for years. The last instance was the training of a number of people for basket-making and wicker-work in County Wexford. That was in 1931. The main object is to turn out young people of general skill and training in many industries, particularly where a highly specialised form of machinery is used. Unless young people have a familiarity with it they are not employable. That is why in Dundalk it was found necessary to train young people in boot factories. In the case of shirt-making, you can train them in the technical school and you can do the same in regard to knitting-work, but in the case of highly specialised machinery you must actually go to the factory.

302. Deputy Goulding.— You are actually paying the apprentices who have been taken on already by the factories and whom the factory would have to train in any event?—The factory might, but this factory might find, for instance, that after a while they can get girls who have some training in shirt-making and they might say: “We will stop collar-making because it is too troublesome.” In the case of factories in industrial centres you always have a certain number of trained people. I do not know how they get their original training. Perhaps they are apprenticed in small numbers and they are instructed to look at the adult worker carrying out his duties. If a concern is starting, they have a difficulty. The principle has been in operation in the Department for at least 30 years. This is identical procedure to training people who are actually apprenticed and who are working in a factory.

303. The owners of the factory would have contracted with the apprentices to pay them in any event?—I am afraid the contractual engagement in a shirt factory is very slight. Of course, I have no means of knowing. I am afraid there is a very flimsy condition, but I cannot speak with knowledge. In this particular case they had eight apprentices when the proposal came forward and only six finished.

304. Deputy Coburn.— Were these lessons given during the working hours? —They must be given during the working hours.

305. Chairman.—Various points of view have been expressed. I think we can leave the Vote now.

306. Deputy Smith.—Mr. O’Duffy is arguing that you are trying to induce somebody to do something here and therefore they will give this concession to that person. He says that some man may come along intending to manufacture shirts and collars, but he does not care whether he does or not. I am not accepting that. I am taking it that the man who comes here to manufacture shirts and collars is interested. He feels that it is something that is going to pay him. I believe that in that case it is not a matter of holding something out to him in order to induce him to do that. I believe there are other concerns who have to send apprentices to other countries and they pay for the technical knowledge they acquire there. I believe this practice here is a dangerous one.

307. Chairman.—That is a thing we can comment on in our report. The matter scarcely arises now. Unless there is some other question that Deputies want to ask Mr. O’Duffy, I think we should proceed to other aspects of the Vote.

308. Deputy Haslett.—We should not lose sight of what this Department exists for. It exists to enable young people to take their place in the world, and I think we should not narrow it down as far as Deputy Smith suggests at the moment, that is, because a particular firm might derive some profit by its people being more proficient. It is the duty of Mr. O’Duffy’s Department to make them efficient.

Chairman.—That is a case that can be made when we are sitting in Committee drawing up our Report. I will listen to you at that stage.

Deputy Haslett.—I do not want to discuss it any further.

309. Deputy Goulding.—On the matter of sub-head A—Trade and Industrial Scholarships—can you tell us, Mr. O’Duffy, if these are given as a result of examination?—Normally these scholarships are given to apprenticed tradesmen. It works out this way. In certain trades —motor-car engineering or some skilled trade—you take up apprentices on two years’ training. It is not a question of examination, for normally you have not got more than enough to fill the group. They are filled by applicants from qualified persons as a rule, and it is not necessary to have competitive examinations. We give them a course then in technical schools, where they are taught for six to eight months as a rule in the skilled branches of their trade. Then they receive an allowance of 30/- a week if living away from their homes. They get these allowances and instruction. Those would be what are called trade scholarships. In the year under review we had first of all the continuation of those industrial scholarships given the year before. These are distinct from trade scholarships in this way, that they are generally scholarships of a more valuable kind, given to train young people to fit them to become managers. In that year we trained six young chemists with a view to fitting them for the sugar factory work. They received that training in Glasgow. The second part of that financial year was devoted to the training of 18 apprenticed skilled tradesmen for the sugar factories. That is, apart from these higher managerial posts, we trained 18 for posts in the sugar factory. As I have already said, they receive an allowance of 30/- a week, and of this sum the sugar factory paid 25/- a week, and we paid 5/- a week.

VOTE 49—SCIENCE AND ART.

Mr. F. O’Duffy further examined.

309a. Chairman.—There is no note on this Vote. With regard to sub-head AX— Special Purchases of Specimens—what are these?—What really happened there was that the provision of £1,000 was not sufficient, and we got authority to spend more within a limit of £500. We actually spent £111 14s. 1d. That was owing to the campaign of excavations going on through the country, and we found it necessary here and there to spend sums which totalled up to £111.

310. Deputy McMenamin.—Under sub-head B (3)—Production of an English-Irish Dictionary—the expenditure is £1,333 18s. 2d. Is that work completed yet?—Yes, it is.

311. Deputy Goulding.—Under sub-head B (4)—Production of Irish County Histories—could you tell us how many of these have been produced?—Two of them have been written, but as yet none has been published. They were written in English, and they are being translated into Irish.

Deputy Goulding.—How long has it taken to produce the two?

Chairman.—I do not think there is any necessity for going over this matter again. Deputies will find it in the last report.

312. Deputy O Briain.—In regard to sub-head B (8), does the item there cover the cost of publication?—It covers all expenditure.

VOTE 50—REFORMATORY AND INDUSTRIAL SCHOOLS.

Mr. F. O’Duffy further examined.

313. Deputy O Briain.—How many of these schools does this Vote cover altogether? —There are only two reformatories, one for boys and one for girls. There are 32 industrial schools.

Chairman.—I think that concludes Mr. O’Duffy’s evidence.

VOTE 45—OFFICE OF THE MINISTER FOR EDUCATION.

Mr. S. Preston, called and examined.

Chairman.—Mr. Preston, I understand, is acting for Mr. Morrissey, and for Mr. Joseph O’Neill. We will only finish Vote 45 to-day. I am afraid we will have to bring you back again for the Vote on Primary Education. There is no note from the Auditor-General on this Vote. I notice under sub-head A 3, Rents, an item of £165 8s. 6d. What are these rents made up of?—We pay rent for 28 and 29 Marlboro’ Street, and for Talbot House.

314. Under sub-head B (1)—Salaries—I take it these are the salaries of the inspectors?—Yes, and the organisers.

315. Deputy Coburn.—Is the item £18,017 18s. 3d. for travelling and incidental expenses for the inspectors and organisers?—Yes.

316. Chairman.—These are all vouched? —Yes, they are made up of cars, railway fares and subsistence allowance. They are all vouched.

Chairman.—That finishes the Vote for the Office of the Minister for Education. We will proceed no further to-day. Vote No. 46—Primary Education—is adjourned until this day week. Will that suit you, Mr. Preston?—Yes, Sir.

The Committee adjourned at 1 o’clock until 11 o’clock on Wednesday, the 20th May, 1936.