Committee Reports::Interim and Final Report - Appropriation Accounts 1940 - 1941::16 July, 1942::Report



Minute of the Minister for Finance dated 13th July, 1942.


Grants under the Housing (Financial and Miscellaneous Provisions) Act, 1932.

1. The Committee notes that while the Department of Local Government and Public Health considers that having regard to the practice which has been evolved express legislation to formulate a precise definition of the term “reconstruction” for the purposes of the Act is hardly necessary, the Minister for Finance agrees with the view of the Committee that the Department’s practice should be given specific expression through the medium of a statutory definition. The Committee trusts, therefore, that the point will be kept in view for consideration when further housing legislation is contemplated.


Contracts of Insurance with the Irish Employers’ Mutual Insurance Association, Limited.

2. The Committee has given careful consideration to the views put forward by the Minister for Finance and notes that the Minister is of opinion that in view of the record of the Association up to 1937-38, the passing over of its tenders would have been difficult to justify. Having regard, however, to the difficulties which were experienced in connection with the reimbursement of payments made by the Commissioners in 1937-38 the Committee is unable to modify its opinion that the Association’s tender for 1938-39 should not have been accepted as at the time the placing of the contract was under consideration there were obvious indications of the Association’s financial instability and approaching insolvency.


Export Subsidies on Cheese and Dried Milk Powder.

3. The Committee is glad to note that the question of settling an appropriate procedure for effecting adjustments of subsidy payments in circumstances analogous to those commented upon by the Committee is the subject of discussion between the Departments of Finance and Agriculture.

With regard to the second sub-paragraph, the Committee was aware of the note on the relevant Estimate to the effect that “the payments of subsidies will be at such rates and subject to such other conditions as the Minister for Finance may from time to time approve”. It understood, however, that the Minister for Agriculture had been given discretionary power regarding the fixing and varying of the precise rates of subsidy to be paid on exports of dairy products, subject to the proviso that voted money should not be used to increase the value of milk used in the manufacture of such products above an average of 6d. per gallon over the year.



4. In its report on the Accounts for the year 1938-39 the Committee referred to expenditure incurred in connection with the acquisition of a site for Post Office purposes. The Committee has had under consideration the continuing expenditure arising out of the ownership of the site and the delay in proceeding with the erection of the building. Whilst the Committee appreciates the difficulties involved under existing circumstances in carrying out building operations it trusts that every effort will be made to have the plans completed with the least possible delay, as this site has been in the possession of the Department of Posts and Telegraphs for a number of years.


5. Attention was directed to a case in which a school was closed for repairs from November, 1938, to March, 1940, a period of over 16 months, during which time payments of salary amounting to £734 2s. 9d. were made to the principal and assistant teachers though neither was called upon to render any teaching service. It appears that tenders for the necessary work were received in September, 1938, but the contract was not placed until April, 1939. The contractor failed to execute the repairs by the date, 8th September, 1939, specified in the contract, and ultimately it became necessary to rescind the contract and to employ another contractor to complete the work. During the period for which the school was closed a considerable proportion of the pupils did not attend any other school.

The Committee is not satisfied that the arrangements for carrying out the work on the school in question were made with due expedition and feels that precaution should be taken to prevent recurrence of such delays. In view of the educational and financial issues involved it is obviously essential that the period during which a school is closed for repair or reconstruction should be reduced to a minimum.


6. The attention of the Committee was drawn to expenditure on the demolition and rebuilding of a Gárda Barrack. The building was a newly-erected house purchased by the Commissioners of Public Works for £900 in 1926 for use as a Gárda Barrack. In 1927 it was found necessary to have the roof re-slated and chimneys rebuilt at a cost of £167 and during the following years additional sums were expended in remedying further defects that had developed. The total expenditure during the twelve years of occupation on maintenance and repairs to remedy the unsoundness of the building was £418. The building, nevertheless, proved to be structurally unsound and unsafe and it was ultimately decided that entire reconstruction was the only satisfactory solution. The premises were accordingly vacated by the Gárdaí in 1938 and a contract subsequently accepted for £1,762 for the demolition of the old premises and the erection of a new barrack on the site. Thus, it appears that the building deteriorated so rapidly that after twelve years it was found to be useless and had to be rebuilt, the total outlay involved being over £3,000. The Committee was informed that when the building was originally brought to the notice of the Commissioners in 1925 it was nearing completion and that it was bought on the assumption that it was as sound as it looked. The cause given for the failure of the structure was the poor quality of the concrete in the walls which, it was stated, would not be apparent on an inspection without stripping the plaster covering.

The Committee has given careful consideration to the explanations furnished by the Accounting Officer, but finds it difficult to accept the suggestion that the technical staff who recommended the purchase of the house could not have been expected to discover the unsoundness of the structure, which became manifest so soon after the date of acquisition, more especially as it appears that, at the time the Commissioners agreed to buy, the building had not been completed.

7. The Committee is concerned to find that a further case has arisen of unauthorised entry and occupation of property. In this case a former tenant of part of a Military Barracks irregularly entered and took possession of additional portions of the barracks without apparently the cognisance or authority of the Commissioners of Public Works, and was allowed to remain in irregular occupation for over two years before any action was taken, although it appears that the caretaker on the premises duly reported the matter. The question of the claim in respect of the unauthorised occupation is being pursued and may, it was stated, involve legal proceedings.

The Committee desires to advert to the views expressed in paragraph 3 of its Report dated 16th February, 1939, and wishes again strongly to emphasise the necessity for measures to prevent trespass and encroachments on State property, with possible legal liability arising therefrom, and for ensuring that any case of trespass that may arise will not be permitted to continue.


8. In connection with the outbreaks of foot-and-mouth disease in dairy yards and lairages in the City of Dublin, it was decided that the Dublin Emergency Meat Supply Committee, a body appointed by the Minister for Agriculture to operate a scheme whereby the city’s requirements of meat could be secured during the outbreak, should also arrange for the slaughter and disposal to the best advantage of non-diseased animals removed from infected premises, and pay over to the Department the realised value less expenses. Statements of account furnished by the Emergency Meat Supply Committee showed that the gross receipts in the period ended 31st March, 1941, amounted to £12,091 5s. 10d., and the expenses to £1,409 3s. 0d., and the net amount of the receipts as shown by the returns, £10,682 2s. 10d., was accordingly paid over to the Department and was included in the figure of £11,447 11s. 9d. brought to account as appropriations in aid in respect of receipts from the sale of salvaged carcases.

The Committee of Public Accounts was informed that the expenses referred to were not sufficiently vouched and it also understands that the departmental check of the statements of account revealed a number of errors, in adjustment of which an additional payment was made in the following year. As further transactions were carried out and payments made in the course of the year 1941-42, the Committee proposes to review the matter further when the accounts for that year are under examination.

9. The attention of the Committee was drawn to extra-statutory re-payments from the Dairy Produce (Price Stabilisation) Fund of the amount of levy, £1,877 10s. 0d., which had been included in the purchase price of creamery butter exported during the period subsequent to 1st September, 1939. The Accounting Officer stated that in normal course the levy would have been paid back to the persons concerned by way of inclusion in the export bounty, but owing to the abnormal circumstances existing in September, 1939, the bounty scheme was suspended to the extent that the payment was reduced to a nominal rate of 1d. per cwt. and it was not therefore possible to give a refund to exporters in the form of a statutory bounty. The Department of Finance, which was not consulted in the matter prior to the action taken, agreed that the exporters were entitled, in equity, to the payments made to them, but the Committee, while it accepts this view, wishes to reiterate the opinion it expressed in paragraph 26 of its Report dated 12th December, 1940, viz.:—that “where it is found impracticable to carry out fully the provisions of an Order, immediate consideration should be given to the feasibility of making an amending Order, and, further, where financial provisions are involved, that the matter should be reported without delay to the Department of Finance.”


10. The attention of the Committee was drawn to the action of the Department in placing a contract for the purchase of 12,000 rolls of wire netting without having consulted the Department of Posts and Telegraphs, through which supplies of stores of this nature are normally obtained, and which had in fact placed a contract for wire netting at a lower price at about the time the con-tract for the 12,000 rolls was made. The Accounting Officer explained the circumstances in which the latter contract was placed and stated that the prior sanction of the Department of Finance was obtained. While not disapproving of the procedure adopted in this instance in view of the urgency of the matter as indicated by the Accounting Officer, the Committee feels that even in the most urgent cases it should be possible to make contact with the Central Purchasing Department concerned before the State is committed to the purchase of stores.


11. As a result of inaccurate information supplied by head-quarters to local offices, unemployment assistance officers authorised in a number of cases applications for unemployment assistance which would have been disallowed if the correct information had been given. The Committee understands that the Minister for Finance has now given his covering sanction to the charge to the Vote of the payments made in these cases and has also authorised the inclusion in the Appropriation Accounts of the Vote of any similar payments which may occur in the future, subject to the submission annually, for the information of the Minister, of a schedule of such payments, accompanied by an explanation of the circumstances in which the payments were made. The Committee trusts that every effort will be made to ensure that correct information is furnished to local offices in all cases.


12. In relation to supplies for the Army, the question of protection against excessive charges in respect of profits was discussed before the Committee. It is not to be expected that the system of competitive tender, which is relied on in normal times to ensure that the prices paid are reasonable, would afford an equal degree of protection during a period of emergency; and in view of the extent of the rise in prices of some commodities in the year of account, the Committee thinks that other means of securing reasonable prices are desirable. The Department has sought help in this matter from other Departments and the Committee is satisfied that it is doing everything possible in very difficult circumstances. In the Committee’s opinion, however, closer co-operation between Departments should help to surmount some of the difficulties, e.g., consultation with the Department of Lands in the matter of timber supplies; and, in general, it feels that Departments, which purchase supplies in large quanties, should have a discretionary power to carry out such investigation of prices as would be necessary to enable them to ascertain the element of profit in the prices claimed.

13. Somewhat similar considerations apply to certain contracts to which the attention of the Committee was directed. These contracts for the supply and maintenance of equipment were placed on a time and material basis, and the difficulty of exercising any effective control over the time factor has been pointed out. The Accounting Officer explained the circumstances in which the Department resorted to this type of contract, and, in view of his explanation, the Committee is satisfied that departure from the normal fixed price contract was justified in the circumstances. It notes that effective supervision and control of costs of wages and materials would involve the setting up of machinery which would add materially to the final costs, and which would scarcely be justified except in relation to works of considerable magnitude. Having regard to those considerations it would be reluctant to give its approval to any type of contract in which the essential elements of cost have not been defined and are beyond the effective control of the Department, and it feels that only very exceptional circumstances would justify departure from the competitive fixed price system of contract.

14. Attention has been drawn to a charge to the Account of £2,529 13s. 2d. for meat supplied, under contract, to a military post. Monthly claims to this amount were furnished by the con-tractor, certified as correct by the responsible officer, and duly paid after the usual examination in the Department. They included claims for meat which was not delivered, these claims being arranged by collusion between members of the Forces and the contractor. Similar quantities of meat were saved by reducing the issues to which the troops were entitled. The irregularities also included dealings in butter, tea and sugar. The Accounting Officer in the course of his evidence stated that a payment of about £250 should not have been made, but it seems that the full extent of the irregularities could not be ascertained. The Committee takes a grave view of some aspects of this case. The officer charged with the responsibility of supervising the performance of the contract, and ensuring the correctness of the trader’s claims defaulted in his duty; so did the officer responsible for supervising the issues to the troops. The system of accounting devised for the purpose of safeguarding against loss was thus defeated. On previous occasions the Committee found it necessary to express its strong disapproval of the manner in which officers vested with responsibility in matters of this kind carry out their duties, and it feels that the apparent defects in organisation demand the urgent attention of the Department. The Comptroller and Auditor General has stated that the vouchers furnished in support of the sum of £2,529 13s. 2d. are unacceptable, and the Committee agrees. It understands that a full report will be furnished to the Department of Finance, and it assumes that it will be informed of the views of that Department in due course.

15. The Committee has had under consideration the apparently high rents paid in certain cases for buildings to accommodate troops and for lands for military purposes. These rents are undoubtedly high and difficult to reconcile in some particulars. Generally, they were agreed to by the Department’s officers after verbal negotiation with the owners, the lettings being regarded as matters of urgency. Having heard the views of the Accounting Officer the Committee is not disposed to comment on the amounts of the rents paid. It considers, however, that the Department might with advantage have acceded to the wish of the Department of Finance that the Valuation Office should be consulted, and it should not have been impossible to make the agreements subject to the approval of that Office.

The Committee is not aware whether there is a reluctance on the part of some Departments to consult others, but it sees no reason why the specialised knowledge and machinery available in other Departments should not be utilised when occasion arises and it is obviously in the public interest.

16. Year after year the Committee has commented on the inadequacy of the protection afforded to some section or other of Army stores. Regulations and instructions are issued with a view to remedying such defects, but it seems to the Committee that as in the case of the meat contract referred to above, they are of no avail unless those in authority take appropriate steps to ensure their observance by personnel responsible for the custody and use of the stores. On this occasion considerable quantities of medical stores purchased to meet emergency requirements lay at one centre for over a year without being taken on charge. When, finally, they were taken on charge it was found that some of the stocks were deficient, but there was nothing to show that they had been issued and used for official purposes. The Accounting Officer has informed the Committee that all these stocks are covered by vouchers, but the Comptroller and Auditor General is unable to accept some of the vouchers, and, in the view of the Committee, for very sound reasons. Having regard to the difficulty of replenishing stocks at the present time the Committee takes a serious view of the manner in which these stores have been dealt with, and it desires to be further informed when investigations have been brought to a conclusion.


17. An advance of £4,000 from the Contingency Fund in anticipation of a Vote of the Oireachtas was made during the year to an Agricultural Co-operative Society as compensation for damage to its premises caused by the dropping of bombs by foreign aircraft. For reasons explained by the Accounting Officer recoupment of this advance was not provided for until the year 1941-42, when the necessary provision was made in the Vote for Damage to Property (Neutrality) Compensation. The question of introducing an Estimate for refund of advances from the Contingency Fund at the earliest opportunity had previously been under discussion by the Committee. In view of the special circumstances surrounding the advance in this case the Committee will not object to the delay in introducing the Estimate, but it considers that normally where any amount is advanced from the Fund the authority of Dáil Eireann for the repayment should be sought as early as possible so as to maintain its control over expenditure, and, if practicable, not later than the close of the financial year in which the advance is made.



16th July, 1942.