Committee Reports::Interim and Final Report - Appropriation Accounts 1938 - 1939::29 February, 1940::Report



Minute of the Minister for Finance dated 27th November, 1939.


Fees for Verification of Weights and Measures.

1. When making the suggestion that arrangements might be introduced requiring that payment should be made to the headquarters of the Department of Justice the Committee appreciated the difficulties that would arise. As the Minister for Finance is not satisfied that the additional expense and trouble would be justified. the Committee does not wish to press the proposal further. The Committee is glad to note, however, that steps have been taken to provide additional safeguards against embezzlement.


Applicability of Section 28 of the Superannuation Act, 1936, to cases coming within the scope of Section 11 of that Act.

2. The Committee notes that the law officers have advised that the powers of the Minister for Finance under Section 28 of the Superannuation Act, 1936, may be exercised in respect of a person who has obtained a certificate in pursuance of Section 11 of that Act.

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

3. The Committee observes that in the cases under notice the Minister for Finance claims to have acted within the discretionary powers conferred upon him by statute save as to the inclusion of certain emoluments in one instance. The Committee notes, however, that the doubts raised in connection with these cases will be borne in mind should a similar case again arise. The Committee still adheres to the view that such awards are not warranted merely by removal from office unless the conditions of greater efficiency and economy prescribed by the relevant legislation are also satisfied.


Contract for the Erection of the Industrial Alcohol Factories.

4. The Committee notes that the Minister does not agree that the preparation of bills of quantities in the metric system led to the unsatisfactory response to the original invitations to tender. It still finds it difficult, however, to understand why it was found necessary to incur expenditure of £430 on the provision of new bills, the preparation of which was admitted in the memorandum dated 10th January, 1939, submitted to the Committee by the Accounting Officer, to have been a factor contributing to the delay in commencing the building of the factories and therefore to the incurring of the liability for payment of £6,500 to the technical advisers as compensation for the prolonged retention of their services. In these circumstances the Committee sees no sufficient reason for departing from its opinion that the delay in completing the work was, to some extent, avoidable and that the desirability of calculation of quantities in British standard measurements should have been foreseen. In forming this opinion, the Committee was influenced by the statement in the minute dated 5th March, 1936, from the Department of Industry and Commerce to the Department of Finance in which sanction was sought for the expenditure incurred on the second set of bills, that “it was ascertained that the failure of Irish contractors to take advantage of the opportunity afforded to them was ascribed to a difficulty in interpreting the bills of quantities which had been prepared in accordance with Continental practice.”


5. The Committee notes with satisfaction that the amount of the balances surrendered out of Votes for the public service for 1937-38 show a decline as compared with previous years. The percentage of the amount surrendered to the total of the gross estimate was 5·06 in 1937-38, as compared with 9·2 in 1936-37 and 7·48 in 1935-36. The Committee hopes that every effort will be made to ensure that the improvement shown in this connection will be maintained in future years.


Local Government and Public Health.

6. Expenditure amounting to £32 was charged to a new subhead (F. 3) with the authority of the Department of Finance on condition that should the presentation of a Supplementary Estimate become necessary during the year the new subhead should be included therein. A Supplementary Estimate was in fact taken in February, 1938, but, through inadvertence, provision for this expenditure was not made in it. A discussion of importance emerged on the general question of the extent to which, when a Supplementary Estimate is required for a Vote, provision should be made therein for the amounts required to provide for all anticipated deficits on subheads of that Vote and for any new subheads falling within the ambit of the Vote which had been opened with the sanction of the Department of Finance prior to the introduction of the Supplementary Estimate. The Committee was inclined to the view that, having regard to the general principles underlying Parliamentary control over expenditure, discretion should not be given to any Department of State to determine what item should be excluded from a Supplementary Estimate. The Department of Finance has furnished a memorandum to the Committee dealing exhaustively with the question at issue. For reasons stated at length in the memorandum the considered view of the Department of Finance is that the inclusion of items of expenditure which are normally regularised by administrative action on agreed lines would be open to grave objection. The Department of Finance suggests that if, under the agreement which qualifies the exercise of Virement, a Supplementary Estimate has to be introduced, the contents of that Estimate should follow the general lines of that agreement and should not include comparatively trifling sums unless they relate to novel services or to existing services which are being expanded in new ways or unless savings on the Vote are likely to be insufficient to cover the sums.

The Committee has given careful consideration to this matter and accepts the conclusions of the Department of Finance. As pointed out in the memorandum the manner in which the Department of Finance exercises its discretion in excluding particular items from Supplementary Estimates would, of course, be subject to review by the Comptroller and Auditor-General and this Committee, and the Committee requests that the Comptroller and Auditor-General will in future furnish it with a schedule of cases in which special subheads have been opened.

7. Section 6 (1) of the Housing (Financial and Miscellaneous Provisions) Act, 1932, states that the Minister for Local Government and Public Health may make a contribution towards the annual loan charges incurred by a local authority in respect of money borrowed by them for the provision of houses under the Housing of the Working Classes Acts, 1890 to 1931. The contribution is not to exceed 66⅔% of the annual loan charges where the Minister is satisfied that the houses have been provided for the accommodation of persons displaced by any operations of the local authority under the said Acts, and is not to exceed 33⅓% of the annual loan charges in any other case. Under the Housing (Miscellaneous Provisions) Act, 1931, where a local authority is satisfied that any area within their district is an unhealthy area and that the conditions in such area can be effectively remedied only by demolition of all the buildings in such area which are unfit for human habitation, the local authority shall, by resolution, declare such area to be a clearance area and shall proceed to secure the demolition of all buildings in that area. Where the local authority determines to order any buildings in a clearance area to be demolished the local authority has to make and submit to the Minister for Local Government and Public Health for confirmation a clearance order with respect to such buildings.

Appendix VI.

In August, 1933, an Urban District Council passed a resolution declaring a certain area to be a clearance area and proceeded to carry out a scheme for the provision of houses to accommodate families to be removed from that area. The new houses built under the scheme were let to tenants removed from the clearance areas, but no clearance order had been made and the houses in the clearance area were not demolished but were re-occupied. Subsequently another resolution was passed in September, 1938, declaring areas, which included the houses which were not demolished under the previous resolution, to be clearance areas and clearance orders for their demolition have been submitted to the Minister for confirmation.

It is open to question whether the local authority was entitled to payment of contribution at the higher (66⅔%) rate prior to the date of the resolution passed in September, 1938, declaring the area a clearance area. In view of the resolution passed in August, 1933, it is not clear why it was necessary to pass a second resolution.

In all the circumstances, however, as the new houses were in fact occupied by tenants transferred from an area declared to be a clearance area in 1933 the Committee feels that payment at the higher rate might be regarded as justified, provided the local body takes the steps necessary to secure the evacuation of the houses which were re-occupied and their demolition. It is presumed that the Department of Local Government and Public Health would take steps to safeguard against the possibility of payment of the higher rate of contribution in connection with any further scheme which might be undertaken to provide alternative accommodation for the tenants who had re-occupied the houses vacated.

Public Works and Buildings.

8. The Committee has had under consideration a payment of £450 in satisfaction of a Court Award in the case of a contract for the re-roofing of hangars. The Commissioners terminated the contract on the ground of want of due diligence in executing the work and the contractor brought an action for loss and damages for breach of contract. The contractor was not covered by bond or other security, the Commissioners relying for the satisfactory execution of the work on retentions by way of percentage deductions from the amounts due and payable from time to time. This contractor was adjudged bankrupt soon after he took the contract and it would appear that the failure to execute the work satisfactorily was mainly due to his financial difficulties.

The circumstances of this case indicate the importance of ascertaining the financial standing of contractors before contracts are placed and also of good sureties being obtained, wherever possible, and the Committee wishes to be assured that all possible steps will be taken in this direction in the future.

Appendix VII.

The judgment delivered in this action raises important issues, as the Court held that the determination of a contract must take place during the currency of the period of the contract.

The Committee trusts that as far as is practicable every effort will be made to comply with the Court decision and that all possible precautions will be taken to safeguard against any loss or liability arising out of the execution of contracts.

9. Attention was drawn to two cases where, owing to the failure of contractors to complete their contracts satisfactorily other contractors had to be employed, but the additional cost incurred in having the later contracts carried out was not recovered from the original contractors. While it recognises that special difficulties made it impracticable to recover in these cases, the Committee desires to emphasise that any additional cost to the public occasioned by failure or default of a contractor should be recovered if possible, and if it is found necessary to forego recovery the sanction of the Department of Finance should be sought for waiver of claims.

10. A contract, amounting to over £81,000, was entered into by the Commissioners of Public Works for the erection of a Preparatory College. The terms of the contract stipulated that 10% should be deducted from each instalment of the contract price payable from time to time as the work progressed, one-half the amount of retentions so deducted to be paid to the contractor on satisfactory completion of the works and the other half nine months later. Under a clause in the contract the Commissioners might, at their discretion, pay the latter sum before the expiration of the nine months period. Following representations made by the contractor, the Commissioners with the approval of the Department of Finance agreed to vary the conditions of payment to the extent that no further retentions would be made after the sum withheld amounted to £4,000, which would be paid nine months after the date the work was completed. In consideration of this concession the contractor was required to pay interest at 5% on the sums that might have been retained, from the several days on which they were paid to the date of completing the contract. The work was completed early in September, 1937, and the contractor was then paid £2,000 being one-half of the retained sum, the remaining £2,000 being withheld for the full period. The Committee was informed that the advance payment of £2,000 was made by the Commissioners in the exercise of the discretion permitted by the clause of the contract referred to, but that they were prepared in the circumstances to seek covering sanction of the Department of Finance for the action taken in this case, on the understanding that their discretion in regard to payment of retentions on contracts was not prejudiced.

While recognising the value of the discretionary power exercised by the Commissioners in dealing with retentions, the Committee is of opinion that when seeking the approval of the Minister for Finance in cases where the terms or conditions attaching to a contract require to be altered, all relevant facts, including the method of payment, should be submitted for his consideration. The Committee also desires to emphasise the necessity and importance of safeguarding public interests by ensuring that sums withheld are adequate to cover contractors’, liabilities for the satisfactory execution of works carried out by contract.

Primary Education.

11. In connection with the Scheme adopted for the purpose of providing security of tenure for teachers whose positions would otherwise fall to be vacated owing to reduced average attendances, arrangements have been made by which vacancies are required to be filled from panels, framed on a diocesan basis, of the teachers so situated, Attention has been drawn to the fact that, in certain cases, appointments of non-panel teachers had been sanctioned although it appeared that eligible panel teachers were available. Whilst the Committee realises that educational and other grounds can sometimes be urged against a rigid application of the panel system, the continuance of salary to teachers whose retention is not warranted by the attendance of pupils imposes a burden on the Exchequer and the Committee therefore considers that the panel regulations should be strictly enforced.

Another point considered in connection with the panel system related to the position of non-efficient teachers who were being retained under the conditions of that scheme. It appears that under the regulations such teachers are entitled to the protection of the scheme unless and until their recognition has been withdrawn on educational grounds. The Committee is pleased to note that steps are being taken to speed-up the examination of such cases with a view to securing improvement in efficiency where possible, or the dismissal of the really inefficient.

12. Owing to inadvertence, salary was continued to a teacher for a number of years beyond the date from which it should have been withdrawn under the then existing regulations and a considerable overpayment resulted. The Committee takes a serious view of this matter and wishes to state that, where loss of public funds is occasioned by the error of officials, it is open to the Committee to recommend that steps should be taken to recover the amount of the loss from the officers responsible.

Industry and Commerce.

13. The Committee had under consideration various questions raised by the Comptroller and Auditor-General in connection with expenditure on the production of industrial alcohol. As the Accounting Officer, however, represented that these matters might arise in litigation which was then pending between the Department and the late Managing Director of the undertaking, the Committee has decided to postpone further consideration of the subject and to request the Comptroller and Auditor-General to bring it forward again in his Report on the Accounts for the year 1938-39.


14. The regulation of the extra allowances payable to soldiers who are employed as tradesmen in the Army seems to be a matter of much complexity. A regulation which was issued in 1931 was found not to be generally acceptable, and the enforcement of certain of its provisions was postponed pending the preparation of a new scheme. Meanwhile certain classes of soldier tradesmen continued to be remunerated on the scales which had operated up to 1931. The working out of the new scheme of remuneration seems to have occupied the Department during the intervening years, but when the scheme was completed it was found to contain the same defects as the previous one, and the Committee understands that it is proposed to apply it in a modified form only. As this matter stands, it appears to the Committee that a number of rates of additional pay are applicable to the same type and grade of occupation. It regards this position as definitely unsatisfactory as the partial application of such schemes must in time lead to inequalities and to confusion. The Committee, while appreciating the difficulty of the problems involved, trusts that the Departments concerned will be able to devise a comprehensive scheme and wishes to be informed in due course of its adoption.

15. The position regarding the use of electric current presents some serious aspects. At the principal stations there is no method of ensuring that the use of electric current and electric appliances is in accordance with the regulations and that lighting circuits are not used for power purposes. Instances of the very considerable increase in the consumption of current in recent years, of the payment at lighting rates for current used for power purposes, and of the general inadequacy of the control exercised over consumption were brought to the notice of the Committee, as a result of which the Committee is satisfied that there is room for effecting very considerable economies in this field of expenditure. It understands that the matter is engaging the active attention of the Department, and it desires to be informed when appropriate measures have been taken to ensure that expenditure under this head is effectively controlled.

The method of assessing the charges for electric current used at the various military stations has also been the subject of discussion before this Committee, and it notes that negotiations are being conducted on this matter with a view to obtaining more favourable terms for the State. The Committee would like to be informed of the outcome of these negotiations in due course.

16. The attention of the Committee has been drawn to the heavy annual loss which was incurred in operating an official Army laundry, the continued maintenance of which was a matter of military policy. The Committee is informed that the laundry is now closed and it understands that considerable economy will result.

17. With reference to the annual charge arising out of the hiring of halls for the use of the Volunteer Force, it has been pointed out that in many instances little or no use was made of the halls during the periods of tenancy, and unnecessary expense might be avoided if definite instructions were issued regarding the conditions on which premises should be retained, and the circumstances in which steps should be taken to surrender them. The Committee understands that the Volunteer Force is being reorganised on a new basis and that control will be very considerably improved. Having regard to these circumstances, and to the assurance of the Accounting Officer that the utility of the new halls which are under construction or about to be constructed will not be adversely affected, the Committee does not propose to make any comment at this stage, but it hopes that when the work of reorganisation is completed the causes for complaint regarding the non-use of premises will have disappeared.

18. The Committee has had under consideration a case in which a soldier clerk committed a series of fraudulent transactions over a period of more than two years. Obviously very considerable latitude must have been afforded to this clerk since he was able, without being detected over this period, to take the preliminary steps to enable him to commit embezzlement in the 46 cases which were brought to light. The Committee views with concern the repetition of offences of this kind in the Army, as it points to a definite weakness in the system of controlling the work of subordinate staffs. It found it necessary to advert to this matter in its Report of last year, and it desires to be informed whether any steps have been taken with a view to remedying the position.

19. Some defects in the method of accounting for stores, more particularly for peat fuel, have been brought to the notice of the Committee, and the Committee realises that this matter is rendered more difficult owing to variations in the quality of the supplies and the relatively rapid disintegration to which turf is subject in storage. As adequate safeguards against pilferage and wastage are essential, the Committee trusts that means will be devised without delay to rectify the defects in the Accounting system and to prevent occurrence of loss in this service.

Posts and Telegraphs.

20. The Committee’s attention was directed to a case in which the terms of an agreement for the rental of a telephone installation were altered without the authority of the Department of Finance. The effect of the amendment was that a claim for approximately £283, which would have been payable to the Department of Posts and Telegraphs under the original agreement was abandoned. It does not appear that the amount foregone in this case was irrecoverable and the Committee feels, while not disapproving of the action taken by the Department of Posts and Telegraphs, that in the special circumstances the prior sanction of the Department of Finance should have been sought.

Land Commission.

21. Reference was made to expenditure of £131 11s. 0d. in connection with the replanting, maintaining and relifting of a supply of thorn quicks purchased for £271 17s. 6d., for which the covering sanction of the Department of Finance has been sought. It appears that the additional payment arose owing to delay on the part of the Land Commission in giving the necessary instruction to the contractor. While the Committee is not satisfied that the delay and consequent loss in this case was unavoidable, it realises that on occasions delay may arise from circumstances outside the control of the Department, and it hopes that all possible steps will be taken to avoid nugatory expenditure of this nature in the future.

22. An advance of £80 and a Free Grant of £37 were made in respect of a house which had already been erected on freehold land in possesssion of the applicant and these amounts were paid to a Bank in reduction of the applicant’s loan. The covering sanction of the Department of Finance has been sought for the Free Grant. The Committee has given careful consideration to the Accounting Officer’s explanation regarding the circumstances in which the Grant was made and is of the opinion that the charge to the Improvement subhead of the Vote of the amount of the Free Grant made in this case is open to grave objection. It would accordingly like to have the views of the Minister for Finance on this matter with special reference to the fact that the house had been completed some three years prior to the grant and that the grant had been paid to a bank in reduction of the applicant’s overdraft.

Gaeltacht Services.

23. In his Report the Comptroller and Auditor-General referred to the loss of £1,672 2s. 7d. occasioned by the sale of buttons, and the Committee has had under consideration the observations of the Accounting Officer regarding this case, and is gravely concerned to find that a loss of so large an amount could arise in such circumstances. The Committee is of the opinion that a considerable portion of the loss might have been avoided by the exercise on the part of the responsible officers concerned of greater care and foresight and by greater control and discretion in purchasing and estimating requirements and in the disposal of surplus stores. In view of the facts which have come to light in this case the Committee would like to have an assurance from the Minister for Finance that the purchase and control of stores for this service is now on a satisfactory basis.

24. The circumstances in which continued monthly advances of £25 were being made to an Agent abroad in anticipation of commission to be earned from the sale of Gaeltarra Éireann goods were reviewed by the Committee and in view of the fact that at the 31st March, 1939, the balance due by the Agent had increased to £433, the Committee hopes that the arrangement under which these payments are made will be reconsidered at an early date.


25. The attention of the Committee was drawn to the fact that butter valued at £24,560 9s. 8d., originally purchased for export from moneys provided in the appropriate subhead of the Vote, was diverted for sale on the home market, the cost being transferred to a suspense account which was credited with the receipts from sales. A token provision for the purchase and resale of butter on the home market was made under subhead M.7 in the Estimate for the Department of Agriculture and it would appear that the expenditure should have been charged to this subhead. The Committee is concerned to note that this expenditure was not disclosed in the appropriate account.

Export Bounties and Subsidies.

Appendix XIII.

26. The rates of subsidies on certain exports of dairy produce other than creamery butter were increased by the amounts of bounty formerly payable from the Dairy Produce (Price Stabilisation) Fund, and the Department of Finance was not informed of the action taken. While the Committee is aware that the Minister for Agriculture is empowered to amend or suspend, at his own discretion, the rates of bounty payable from the Fund referred to, it considers that an element of weakness in financial control has been made apparent in the present instance, and is of opinion that the Department of Finance should be informed of any future adjustments in rates of bounty which materially affect Voted expenditure.




29th February, 1940.