Committee Reports > List of Committees > Dáil > 1940 > Committee of Public Accounts > Interim and Final Report - Appropriation Accounts 1939 - 1940

APPENDIX II.

MINUTE OF THE MINISTER FOR FINANCE ON THE REPORT, DATED 29th FEBRUARY, 1940, OF THE COMMITTEE OF PUBLIC ACCOUNTS.

Paragraphs 1, 2, 5, 11 (sub-paragraph (2)), 13, 16.

These paragraphs do not appear to require comment on the part of the Minister.

Paragraph 3.—Awards of Compensation under Section 6 of the Superannuation Act, 1909, and Section 7 of the Superannuation Act, 1859.

The Minister has noted the view of the Committee.

Paragraph 4.—Contract for the erection of the Industrial Alcohol Factories.

The Minister notes the views of the Committee regarding the causes of the delay in commencing the building of the factories. He has already indicated his opinion as to the real cause of the delay in commencing the erection of the factories, namely, the necessity of inviting fresh tenders in view of the unduly high tenders received from Irish firms in response to the first invitation. With regard to the system under which the Bills of Quantities were originally calculated, the advice received orally at the time by the Department of Industry and Commerce from prominent members of the building trade in this country was that calculation in the metric system would not be a handicap to Irish firms in tendering. In fact, as the Committee has already been informed, three tenders were received from Irish firms and had any one of these been reasonable it would have been accepted. The main reason for the decision to invite tenders again was not the relatively low number of tenders received but the fact that all those received from Irish firms were, in the opinion of the Minister for Industry and Commerce, abnormally high. In issuing the second invitation to tender the opportunity was taken to issue the Bills of Quantities in British standard measurements in order to ensure that calculation of the Bills in the metric system could not be offered as an excuse by any Irish firm for failure to tender. The contract was eventually given to an Irish firm in association with a continental firm. As this Irish firm had previously tendered on its own account in the first instance on the basis of Bills of Quantities in the metric system, there is no reason to believe that had the original Bills of Quantities been prepared in British standard measurements the necessity for re-inviting tenders would have been avoided.

LOCAL GOVERNMENT AND PUBLIC HEALTH

Paragraph 6.—The scope of a Supplementary Estimate.

The Minister notes that the Committee accepts the conclusions of his Department in this matter.

Paragraph 7.—Contributions to annual loan charges of local authorities under Section 6 of the Housing (Financial and Miscellaneous Provisions) Act, 1932.

The Minister understands that the steps suggested by the Committee are being taken. The Order for the demolition of the ten houses which were reoccupied has been confirmed by the Minister for Local Government and Public Health and they will be demolished when alternative accommodation, which is being provided under a new building scheme, becomes available. The lower rate of subsidy only will be paid in respect of the houses which are being built to re-house the occupants of these ten houses.

PUBLIC WORKS AND BUILDINGS

Paragraph 8.—Contract for the re-roofing of hangars.

It is the general practice of Contracting Departments to satisfy themselves as to the financial standing of contractors before contracts are placed. In the case of the contract for the re-roofing of the hangars, the contractor was known to the Commissioners of Public Works and they had no reason to doubt his financial standing. Where they have doubts and the contract is large, they require the contractor to nominate sureties or to furnish a fidelity bond with an approved insurance company for the due completion of the contract. If sureties are nominated, enquiries are made into their financial position before they are accepted. Cases may arise, however, particularly in country districts, where rigid adherence to the general procedure may be impracticable or undesirable for special reasons, e.g., lack of competitive tendering, avoidance of unreasonable additional cost, expeditious execution of the works and the peculiar circumstances of the contractors. Whilst the Minister fully appreciates the views of the Committee, he considers it desirable that Contracting Departments should be allowed freedom of action so far as the requirements of each case may demand and that they should be left to judge when and in what manner the financial standing of intending contractors should be investigated and fidelity bonds or sureties required.

As regards the Court decision referred to by the Committee, the Minister shares their view that every effort should be made to comply with it and is pointing out to Contracting Departments the need for precautions to safeguard the State against any loss or liability arising out of the execution of contracts. Such precautions have already been taken by the Commissioners of Public Works.

Paragraph 9.—Loss arising from the failure of Contractors to complete their contracts satisfactorily.

The Minister agrees with the opinion of the Committee that any additional cost to the public occasioned by failure or default of a contractor should be recovered if possible. It is, however, the regular practice of the Commissioners of Public Works to charge contractors with any such additional cost occasioned by the contractors’ failure or default in completing their contracts and no claim of this nature which can be legally enforced is waived without the Minister’s specific authority.

Paragraph 10.—Contract for the erection of a Preparatory College.

The Minister has given his covering sanction for the action of the Commissioners of Public Works in making the advance payment of £2,000. The Commissioners have undertaken that, when seeking his approval in future to alter the conditions of a contract in relation to the manner of making payments to the Contractor, they will submit for his consideration all the relevant facts which are likely to influence him in reaching his decision. As regards sums to be withheld from Contractors, the Commissioners have undertaken to keep in mind the Committee’s views in the matter and to restrict instalments on Contracts—so far as the circumstances of each case may permit or render desirable—in such a way as to ensure that the unpaid balances are adequate to cover Contractors’ liabilities for the satisfactory execution of the works.

PRIMARY EDUCATION

Paragraph 11.

Sub-paragraph (1).—Enforcement of Panel Regulations.

The Minister has agreed to the vesting in the Minister for Education of a limited discretion in certain cases in which for educational reasons or on grounds of hardship a rigid application of the Panel Rules would be undesirable. Subject to this discretion, the limits of which are well defined, the Minister is in agreement with the view expressed by the Committee that the Panel Regulations should be strictly enforced.

Paragraph 12.—Payment o State grants in contravention of Regulations.

The Minister notes the views of the Committee. In accordance with his general practice in cases of loss of public funds through the error of officials he has examined the question of recovery from the officers responsible in the case under reference. After very careful consideration of all the relevant circumstances he has accepted a recommendation by the Department of Education for the issue of a serious warning as to the action to be taken in the event of any future payment of State grants in contravention of the Regulations.

ARMY

Paragraph 14.—Rates of additional pay for soldier tradesmen.

Agreement has now been reached regarding the rates of additional pay for soldier tradesmen. It has been decided that the rates of additional pay prescribed in Defence Force Regulation No. 36/1931, which have hitherto been applied only to soldiers who became entitled to additional pay for the first time subsequent to the 3rd September, 1931, should be applied, with effect as from the 1st August, 1940, to all soldier tradesmen with the exception of those who had been in receipt of higher rates of additional pay from a date prior to 3rd September, 1931. This decision was promulgated in Defence Force Regulation No. 63/1940.

The Minister notes the views of the Committee in regard to the payment of varying rates of additional pay for the same type and grade of occupation, but he is satisfied that, in view of the necessity for retaining the services of experienced soldier tradesmen by means of voluntary re-engagement, the continuation of the higher rates for the comparatively small number of soldiers concerned is fully warranted.

Paragraph 15.—Control of consumption of Electric Current.

The Minister is in agreement generally with the views of the Committee as regards the necessity for economy in the consumption of electric current. Arrangements have accordingly now been made for the installation of meters in the larger quarters and the Minister has given his approval to scales of allowances of electric current in such quarters. These scales, which are now in operation in many cases, will be incorporated in a Defence Force Regulation, and any current used over and above the allowance prescribed will be charged to the occupant of the quarters. It is considered that the economies which might be effected by the general installation of power circuits or by the introduction of meters in the smaller quarters would not justify the expense of installation and the administrative work involved in reading the meters and adjusting the accounts. Moreover, there is reason to believe that there has been no excessive consumption of current in the smaller classes of quarters.

The charges for electric current supplied to the Curragh Camp were fixed specially by agreement with the Electricity Supply Board when the change over to the national current was effected in 1937. These rates have always been regarded as fair and reasonable.

The possibility of securing a reduction in the scale of charges for electric current at other stations has been the subject of protracted negotiations with the Electricity Supply Board. The Board were able to show, however, that, with the exception of one Barracks where a considerable quantity of current was used for power purposes and in respect of which reduced rates have been obtained, the charges compared favourably with those paid by business concerns consuming an equal or greater amount of current.

Paragraph 17.—Control over hiring of halls for the use of the Volunteer Force.

The reorganisation of the Volunteer Force has now been completed, and a Defence Force Regulation embodying the revised decisions will be promulgated in the near future. Under the new scheme the hiring of halls for the use of the Volunteer Force has been discontinued. The existing State-owned halls, which are few in number, are being retained, pending further consideration, for local training, and will in the meantime be made available as far as practicable for lettings for private purposes.

Paragraph 18.—Precautions against misappropriation of Public Moneys.

Disciplinary action has been taken against the officer responsible for the supervision of the soldier clerk.

Investigation of the fraudulent transactions referred to, which were carried out in a very ingenious way, disclosed, however, that the procedure then in force in regard to the notification of changes of addresses of Reservists afforded opportunities for fraud, and that a closer degree of supervision might not have resulted in the immediate detection of the frauds.

The procedure in regard to the notification of changes of addresses has now been completely revised and the Minister considers that under the new arrangements all possible safeguards against fraud have been provided.

Paragraph 19.—Method of accounting for issues of peat fuel and anthracite coal.

The observations of the Committee have been noted. The difficulties, which are appreciated by the Committee, in connexion with the prescribing of satisfactory standards of measurement for peat fuel and anthracite coal have been increased by the necessity for storing increased reserve stocks. The Minister is assured, however, that the problem is receiving active consideration in the Department of Defence, and the Committee will be advised in due course of such remedial measures as it may be possible to take.

POSTS AND TELEGRAPHS

Paragraph 20.—Alteration of terms of agreement for the rental of a telephone installation.

The Minister is in agreement with the view of the Committee and the Department of Posts and Telegraphs has been informed that his prior sanction should be sought in any future instance where it is proposed to follow a similar course. Covering sanction to the abandonment of the claim for rental involved has been given.

LAND COMMISSION

Paragraph 21.—Replanting, etc. of Thorn Quicks.

Prior to receiving the comments of the Committee the Minister, after obtaining full explanations from the Department of Lands, had given his covering sanction to the expenditure of £131 11s. involved, and had requested the Department to take steps to obviate the recurrence of any loss of a similar nature. The Minister is in full agreement with the views of the Committee in this matter.

Paragraph 22.—Advance and grant in respect of house already erected.

The Minister has ascertained

(1) that the house was completed by December, 1932;

(2) that the Free Grant was made not to the Bank alone but to the applicant and the Bank jointly;

(3) that the application to the Land Commission in 1936 was not the first made by him for assistance towards housing himself and his large family;

(4) that the Land Commission were satisfied that the applicant’s debt to the Bank arose solely out of his need for adequate housing accommodation; and

(5) that the practice of the Land Commission is to decline to sanction expenditure on improvement works in respect of buildings to be carried out on freehold land unless they are satisfied that such works are for the benefit of lands which are subject to the Land Purchase Acts. In the case under notice, the house erected on freehold land was for the benefit of a larger attached parcel which was allotted to the applicant in 1931.

Further, the Minister has received assurances

(a) that where a tenant has completed improvement works in respect of buildings on his land without having received any undertaking that the Land Commission will grant financial assistance

(b) that the payment of a Grant or the making of an Advance for improvement works in the joint names of a tenant and a Bank will be made only in a case where the Land Commissioners have secured satisfactory evidence that the tenant’s indebtedness to the Bank arises from his expenditure on these works.

The Minister considers that the transaction is open to grave objections, though not necessarily on the same points and (on some points) to the same degree as appeared when the matter first came under review by the Committee; but in view of the additional information received he does not regard it essential to refuse his sanction and so seem to point the way to a disallowance. Further, in view of the assurances mentioned above, he is inclined to think that abuses are not likely to arise hereafter in connexion with any cases in which Banks are concerned or in which applications for assistance are made after the completion of works, and, subject to any observations which the Committee may decide to make, he will be prepared to give covering sanction to the free grant of £37 in this case in due course.

The Minister thinks it well to add that he considered it advisable to enquire under what statutory authority the Land Commission made a Free Grant of £37 in this case in addition to that paid by the Department of Local Government and he was informed that the statutory authority was given by Section 12 of the Land Act, 1903, that the amount to be expended on improvements lies at the Commissioners’ discretion, that there is no statutory provision against their incurring such expenditure when any other Public Department has already done so, and that, while they would take any grants made by other Departments into consideration, they were not limited in the amount of their expenditure by those grants.

In the view of the Minister, however, the discretion conferred upon the Commissioners by the Section mentioned was implicitly limited when Acts were subsequently passed authorising the making of grants by the Minister for Local Government and Public Health for the construction or reconstruction of houses in the country as well as in urban areas. The grants were presumably intended by the Oireachtas as the measures of the help or inducement considered necessary to secure the provision of the desired number of houses of different types by private persons, public utility societies, local authorities, and so on; and this opinion is confirmed by enactments such as the proviso to Section 5 (1) of the Housing Act, 1929, Section 5 (3) (f) of the Housing (Financial and Miscellaneous Provisions) Act, 1932, and Section 4 (d) of the Housing and Labourers Act, 1937. Inequality would also arise because the help of the Land Commission could not be given towards the erection of a house in an urban area.

If the Minister’s view on this point is adopted, it may be deemed desirable to obtain an additional assurance from the Land Commission to the effect that they will not sanction a Free Grant to supplement a free housing grant already sanctioned by the Department of Local Government. The same degree of objection does not, in the Minister’s opinion, apply to the making of an Advance by the Land Commission within the existing limit of £80, in addition to a Grant by that Department.

GAELTACHT SERVICES

Paragraph 23.—Purchase and control of industrial materials.

By the employment of technical officers to advise on everything concerning the purchase of industrial materials, the Gaeltacht Services Division has succeeded in improving gradually the system of controlling the purchase and use of those materials. While the possibility of loss arising in the ordinary course of trade cannot be entirely eliminated, the Minister for Finance is satisfied that the technical advice now available should prove an adequate safeguard against a recurrence of the type of loss commented on by the Committee.

Paragraph 24.—Advance payments to an Agent in anticipation of commission to be earned.

No advances of the kind referred to in the Committee’s report have been made to this agent subsequent to the 31st July, 1939. The Department of Lands (Gaeltacht Services Division) terminated his services on the 31st March, 1940, and are actively pursuing the recovery from him of the amounts outstanding.

AGRICULTURE

Paragraph 25.—Use of suspense account to reduce charge to Vote.

The Minister agrees that, when the butter originally purchased for export from moneys voted for that purpose had to be diverted for sale on the home market, the charge should have been transferred in full to the subhead appropriate to the latter transaction, the receipts of sale being credited as appropriations in aid.

EXPORT BOUNTIES AND SUBSIDIES

Paragraph 26.—Notification of changes in rates of bounty from Dairy Produce (Price Stabilisation) Fund which materially affect Voted expenditure.

The Minister is in agreement with the opinion of the Committee that he should be notified of any adjustments in rates of bounty which materially affect Voted expenditure. The arrangement with the Department of Agriculture in this matter, which is quoted in Appendix XIII to the Committee’s Report, is considered satisfactory.