MINUTE OF THE MINISTER FOR FINANCE ON THE REPORT, DATED 4th DECEMBER, 1941, OF THE COMMITTEE OF PUBLIC ACCOUNTS.
Paragraphs 1, 5, 6, 7, 12.
These paragraphs do not appear to require comment on the part of the Minister.
LOCAL GOVERNMENT AND PUBLIC HEALTH
Paragraph 2.—Grants under the Housing (Financial and Miscellaneous Provisions) Act, 1932.
The Minister understands that in the administration of the Act the term “reconstruction” has been interpreted by the Department of Local Government and Public Health as connoting additions or alterations to a dwelling, including re-roofing, enlargement of windows, etc., which are necessary to bring the house up to a reasonable standard of habitation. The Department has, in accordance with the Committee’s recommendation, considered the question of formulating a precise definition for the purposes of the Act, but has expressed the view that having regard to the practice which has been evolved express legislation to cover the point is hardly necessary.
The Minister agrees, however, with the view of the Committee that it would seem desirable that the Department’s practice should be given specific expression through the medium of a statutory definition.
OFFICE OF PUBLIC WORKS
Paragraph 3.—Contracts of insurance with the Irish Employers’ Mutual Insurance Association, Limited.
There appears to have been misunderstanding of the facts regarding the extent of the re-insurance. When the question of taking out a policy with the Association for the year 1933 was being considered, the Department of Finance understood from the correspondence that the entire risk involved in the Commissioners’ business would be covered by re-insurance and in its minute of sanction the Department used the word “covered” in that sense. The subsequent contracts being of the nature of renewals, the main considerations that influenced the Department in sanctioning them were the quality of the service rendered by the Association and the cost compared with that of the next lowest tender; up to 1937/38, the Association appears to have given entire satisfaction and the cost all along was much less than if the work had been entrusted to any of the other insurance bodies that had tendered. When all the facts were realized, however, it was clear that complete and specific re-insurance of the Commissioners’ business would have been contrary to insurance practice in this country and would not have been practicable. The question of the scope of the re-insurance is, therefore, largely academic. The Association’s tender was the only one received for the year 1937/38 and for the following year only two tenders were received of which that submitted by it was the lower by almost £4,000 on a wage roll of £275,000. The passing over of its tenders, in these circumstances, would have been difficult to justify. In the light of these considerations, the Committee may be disposed to modify their views regarding the way in which the Commissioners handled the matter.
Paragraph 4.—Use of official cars by Headquarter Officers of the Gárda Síochána.
The Minister’s covering sanction for the expenditure referred to by the Committee was duly conveyed.
With effect as from certain dates in June and July, 1941, the provision of official cars for Headquarter Officers of the Gárda Síochána was discontinued, except in the case of the Commissioner, who continued to be provided with an official car and an official driver and to be allowed to exercise his own discretion as to the circumstances in which the car might be used.
The Deputy Commissioners and Assistant Commissioners were required to provide themselves with suitable private cars and, subject to the usual conditions, were granted commuted locomotion allowances to cover all travelling ordinarily falling to be performed by them. Authority was also given for the provision of official drivers at the discretion of the Commissioner.
POSTS AND TELEGRAPHS
Paragraph 8.—Modification of Stores Check in Stores Branch, Department of Posts and Telegraphs.
The Minister is informed by the Department of Posts and Telegraphs that the complete check has been restored.
Paragraph 9.—Payment of commission to advertising agents for sponsored programmes.
The arrangement of placing contracts through agents was adopted experimentally and would have been reviewed in the light of experience if the scheme of sponsored programmes had continued. The view expressed by the Committee has been noted for consideration in the event of the question again arising.
Paragraph 10.—Purchase of Creameries.
The Minister concurs with the opinion expressed by the Committee that the interval between the making of an advance, in respect of the purchase of a Creamery or other property, to the Dairy Disposal Company and the completion of the sale should be reduced to a minimum. An assurance has been obtained from the Department of Agriculture that in future moneys required for the purposes mentioned will not be issued from the Vote until they are actually required for the completion of purchase.
Paragraph 11.—Export subsidies on cheese and dried milk powder.
The Minister appreciates the considerations which have brought the Committee to the view that the recouping of deficiencies in subsidy payments by the subsequent payment of subsidy at an excessive rate is objectionable. He is in communication with the Department of Agriculture with the object of settling an appropriate procedure for effecting adjustments of subsidy payments in any situation which may arise similar to that commented on by the Committee, to whose view that Department has already undertaken to give careful consideration in the event of comparable circumstances occurring in future.
The Minister feels it necessary to observe that the statement in the paragraph under notice that discretion is reserved to the Minister for Agriculture in fixing and varying the rates of subsidy on exports of dairy produce appears to overlook the fact that, as stated in the relevant Estimate submitted to Dáil Eireann, “the payment of subsidy will be at such rates and subject to such other conditions as the Minister for Finance may from time to time approve”. In fact, the alterations in the rates of bounty on exported cheese and dried milk on which the Committee have commented were not notified to the Minister for Finance for his approval. Prior consultation between the two Departments might have provided a solution for the difficulty which would have avoided the unsatisfactory features to which the Committee have referred.
Paragraph 13.—Irregular Payments of Marriage Allowance.
Following the meeting of the Committee at which this matter was discussed it was suggested to the Department of Defence that the Regulations relating to the payment of Marriage Allowance should be amended with a view to providing, additional safeguards against the payment of the Allowance in cases where a soldier and his wife are separated on account of estrangement. The amendments suggested contemplated (1) that a soldier should be held personally responsible for notifying his Commanding Officer (a) if he has become separated from his wife on account of estrangement, (b) when his wife and/or any child cease to reside with him for any other reason for a period exceeding two months and (c) all changes of place of residence of his wife and/or children if they are not residing with him; and (2) that the amount of any overpayment resulting from the soldier’s failure to give such notification should be recovered from the soldier’s pay. It was also suggested that a copy of the relevant Regulations should be handed to each soldier concerned, from whom a signed declaration that he had received the document and noted its contents should be obtained. Further, it was recommended that the relevant Regulations should be published as reminders in Routine Orders at regular intervals.
After full consideration of these suggestions the Department of Defence formed the opinion, with which the Minister for Finance agreed, that the present time was not opportune for the introduction of the proposed amendments, having regard to the extent to which soldiers are separated from their families owing to the exigencies of the service arising out of the emergency.
In conjunction with the Department of Defence, the Minister has considered the possibility of providing other safeguards against irregularities, but he is not satisfied that any loss to State funds under the present procedure would be sufficiently serious to justify the heavy expenditure that would be entailed by the adoption of such measures as might be expected to prove reasonably effective.
Paragraph 14.—Purchase of Supplies.
The Minister is satisfied that, notwithstanding that it is not always feasible in the circumstances created by the present emergency to adhere to normal purchasing procedure in connexion with supplies for the Army, all practicable steps are taken to ensure that economy in supply is secured.
Paragraph 15.—Contract for the supply of Huts for the Army.
The failure of the contractor in this case to obtain a supply of timber was due to the shortage of stocks and the consequent refusal on the part of the timber merchants to supply to the contractor so large a quantity of timber as was required for the execution of this work. The Department of Defence, who could, if necessary, have resorted to compulsory requisition, were able to obtain the required quantities of timber after negotiation with the trade concerned. The contractor when tendering had no reason to anticipate that his order for timber would be refused. The foregoing information could have been furnished by the Accounting Officer had the Committee’s lack of knowledge of the circumstances been made known to him.
The Minister agrees with the Committee that under normal conditions fresh tenders should have been invited when the position regarding the supply of timber became known, or, alternatively, that some other method of having the work carried out should have been explored; and it may be taken that had considerations of urgency not been paramount one or other of these alternatives would, as a matter of course, have been adopted. The Minister was bound, however, to have regard to the fact that the completion of the work was a matter of urgent necessity, and while concerned to ensure that the cost should be kept within the lowest possible limits he felt that he would not be justified, in the exceptional circumstances already indicated to the Committee, in insisting that the normal procedure, which would have involved considerable delay, should be followed.
As already explained to the Committee the final cost was approximately £2,000 less than the tender of the next contractor in a position to carry out the work.
As regards the specific points raised by the Committee the Minister desires to make the following observations:—
(i) A sum of £77 3s. 9d. was retained for the use of Army transport for the carriage of 600 tons of timber. A payment of £24 was made to the contractor for the carriage of 75 tons of timber at a time when Army transport was not available. Consequently, on the basis of the rates of payment to the contractor, the charge for Army transport would have been £192, and not £450 as the Committee have assumed. This figure of £450 would appear to have been calculated on the basis of the number of loads carried and on the incorrect assumption that each load carried by the Army was equal in tonnage to each load carried by the contractor. As to the charge made by the contractor, the Minister was satisfied that transport was not obtainable at a lower rate from any other source.
(ii) The timber merchants were not able in many cases to supply from stock timber to the dimensions specified by the contractor, and the Department of Defence was obliged to pay prices above pre-war levels in order to compensate the merchants for the additional work involved in cutting timber of greater breadth and thickness to the sizes required. It was not possible for the suppliers to cut the timber to the exact lengths required in all cases, but an effort was made by them to supply lengths approximating to the contractor’s specifications. The total allowance made to the contractor in respect of these increased prices was £493, representing the difference between the prices actually paid and pre-war prices plus 5 per cent., and the Minister is satisfied that this allowance, to which the contractor was entitled under the War Emergency Clause, was calculated on a proper basis.
(iii) As the contractor was obliged to accept timber in running lengths he was involved in considerable extra labour in cutting and adapting the timber to suit the work and in making consequential alterations to his original plans. The allowance of 6½ per cent. made to the contractor was intended solely to cover the cost of these adaptations and alterations as well as additional wastage, and it was never contemplated that it should cover any portion of the additional cost referred to at (ii) above. The Minister is satisfied that the allowance of 6½ per cent. which had at first been approved did not represent adequate compensation for the additional labour and wastage involved, and that the further ex gratia payment of £150 made as a result of the contractor’s representations under this head was fully warranted.
(iv) The surplus timber remaining after the completion of the work was of two kinds, viz:—
Serviceable timber of various sizes;
Unserviceable waste timber.
The serviceable timber was taken over and allowed for by the Department of Defence at an agreed valuation of £168 10s. 2d., and has been used for general Army purposes.
The unserviceable timber was not accepted back by the Department. As this waste timber was of no commercial value the contractor would clearly have suffered loss to the extent of the original cost of the timber to him if some allowance had not been made therefor under the arrangement referred to at (iii) above.
(v) If the timber merchants had been willing to supply timber directly to the contractor the Minister is satisfied that the contractor would have secured a discount of 2½ per cent., and it may be accepted that as a matter of business the contractor took account of the discount in framing his tender. The Minister considers, therefore, that the transfer of the discount to the contractor was fully justified.