MINUTE OF THE MINISTER FOR FINANCE ON THE REPORT DATED 16th JULY, 1942, OF THE COMMITTEE OF PUBLIC ACCOUNTS.
Paragraphs 1, 4, 8 and 17.
These paragraphs do not appear to require comment on the part of the Minister.
OFFICE OF PUBLIC WORKS
Paragraph 2.—Contracts of insurance with the Irish Employers’ Mutual Insurance Association, Limited.
The Minister notes that the Committee is unable to modify its opinion that the Association’s tender for 1938-39 should not have been accepted.
Paragraph 3.—Export subsidies on cheese and dried milk powder.
Having carefully examined the views of the Committee and the representations of the Department of Agriculture the Minister has come to the conclusion that owing to the various factors, incapable of forecast, that might influence a decision it would be impracticable to fix any definite procedure which would be appropriate in all circumstances analogous to those commented on by the Committee, in paragraph 11 of its Report on the Appropriation Accounts for 1939-40. The recurrence of objectionable features in any arrangements adopted to meet similar circumstances in future will be guarded against by prior consultation between the Department of Agriculture and the Department of Finance. A copy of a minute addressed to the Department of Agriculture on this subject is appended for the information of the Committee.
Paragraph 5.—Reconstruction of National School.
The Minister notes, and is in agreement with, the Committee’s view that the period during which a school is closed for repair or reconstruction should be reduced to a minimum.
He has ascertained as a result of inquiries addressed to the Commissioners of Public Works that the main delay in the case under reference arose from the fact that the lowest tender was received from a contractor of whose competence the Commissioners had had no previous experience. This circumstance necessitated full investigation by the Commissioners of the contractor’s previous work and experience, and the delay occasioned thereby was enhanced by the contractor’s dilatoriness in providing the requisite sureties. That the contract had eventually to be rescinded is, in the Minister’s view, justification of the Commissioners’ hesitation in accepting the tender in the first instance. They were, however, in the absence of definite evidence of unsuitability, precluded by the general rules applying to Government contracts from withholding acceptance of this tender, which was the lowest one submitted.
To preclude effectively any recurrence of the circumstances which have given rise to the Committee’s comments would involve the restriction of competition for school repairs or reconstruction to contractors on a selected list, thus departing from the general practice in regard to Government contracts. While the Minister agrees that the reactions of the present case were very undesirable from an educational point of view, he feels that the case can properly be regarded as exceptional, and that it would hardly warrant his authorising a departure from the general contracts procedure of endeavouring to secure by open competition that work will be efficiently carried out at the minimum of cost to the Exchequer.
PUBLIC WORKS AND BUILDINGS
Paragraph 6.—Demolition and rebuilding of a Gárda Síochána Barrack.
The Minister notes the views of the Committee on this matter but understands from the Commissioners of Public Works that at the date of purchase these premises had reached such an advanced stage of construction that it would have been difficult to detect any inherent defects without tests which it would be hardly reasonable to ask the owner to permit. The Minister is satisfied that the Commissioners’ explanation is not unreasonable but he has as a special precaution, instructed the Commissioners to impress on their, architectural staff the need, in the light of this case, for extreme caution where’ purchases of this kind may arise hereafter.
Paragraph 7.—Unauthorised entry and occupation of property.
The necessarily detailed work of preparing a comprehensive rental of State properties under the control of the Commissioners of Public Works, which is essential to the adoption of an adequate system of perambulation, has been proceeding as rapidly as circumstances have permitted, but the staffing requirements of the various Departments which have been particularly affected by the present emergency have rendered difficult the provision of such additional personnel as would be necessary for the early completion of the rental as a preliminary to the institution of reasonably satisfactory protective measures. The Minister is informed that the Commissioners are taking such precautions against encroachment as in present circumstances are feasible and compatible with the isolated and remote location of many of the properties, the efforts of the local officers to prevent trespass being supplemented where practicable by the utilisation of the services of the local Gárdaí. The provision of additional staff with a view to advancing work on the rental is under active consideration.
Paragraph 9.—Extra-statutory repayments of levy from the Dairy Produce (Price Stabilisation) Fund.
In giving his covering sanction for the payment extra-statutorily from the Dairy Produce (Price Stabilisation) Fund of the amounts in question, the Minister has emphasised that his prior sanction should be sought in future where any transaction affecting the Fund is proposed which is not expressly covered by the statutory provisions. The Minister has already expressed his complete agreement with the Committee’s view that, where any departure from the provisions of a statutory Order carrying financial implications is necessary, consideration should at once be given to the feasibility of making an appropriate amending Order. The Accounting Officer has represented that in the instance under review such an amending Order would have been inexpedient.
Paragraph 10.—Contract for purchase of wire netting.
The Minister notes and is in agreement generally with the views expressed by the Committee.
UNEMPLOYMENT INSURANCE AND UNEMPLOYMENT ASSISTANCE
Paragraph 11.—Errors in payment of Unemployment Assistance.
The attention of the Department of Industry and Commerce has been drawn to the comments of the Committee, and the necessity for ensuring, as far as possible, the avoidance of errors of the kind referred to by the Committee has been impressed upon the Department.
Paragraph 12.—Price of supplies.
The Minister is assured that the Department of Defence avail to the fullest possible extent of the advice and experience of other Departments in the matter of supplies.
As regards supplies of commercial timber in cut lengths the Department of Defence ascertained some years ago from the Department of Lands that, as their output of such timber was small and readily absorbed locally, they were not in a position to supply Army requirements. Following the meeting of the Public Accounts Committee at which this matter was raised the Department of Lands were again approached and they confirmed that the position had not altered.
If the Department receive tenders which appear to them to be unduly high an investigation of invoices is carried out. It emerged, however, in the course of a recent investigation that the firms tendering for a particular commodity were themselves obliged to pay high prices in order to obtain supplies, and examination of the invoices showed that the element of profit sought by the firms concerned was not unreasonable in present circumstances.
Paragraph 13.—Contracts on a time and material basis.
The Minister concurs with the opinion expressed by the Committee that the competitive fixed price system of contract should not be departed from save in the most exceptional circumstances.
Paragraph 14.—Irregularities in connection with the supply of provisions at a military post.
The Minister is satisfied that the regulations regarding the supply of provisions, if duly observed by the officers responsible, provide an adequate safeguard against loss. Cases are bound to occur, however, in which officers, either deliberately or through carelessness, fail to implement the regulations.
Periodical and surprise inspections of stores and provisions are carried out by both military and civilian officers. These inspections are effective in bringing to light certain irregularities. Particular types of fraud, however, cannot always be detected by such inspections, e.g., cases involving short issue of rations; but as frauds of this kind cannot be carried out without collusion the risk of discovery always exists.
In every case where an officer is found guilty of an irregularity he is suitably punished and, where possible, the amount of the loss to State funds is recovered from his pay and allowances. Where the case is serious enough to involve dismissal the officer loses any entitlement to pension or gratuity.
The Minister is of opinion that, however carefully regulations may be framed, reliance must, in general, be placed on the integrity and sense of responsibility of the individual officer for the due observance of the regulations, and that, where these qualities are lacking, the only deterrent against fraud or carelessness is the fear of severe punishment that would result from discovery.
A full report on the particular case referred to by the Committee will shortly be furnished to the Department of Finance and the Committee will be informed in due course of the views of the Minister for Finance.
Paragraph 15.—Emergency accommodation.
In view of the large number of premises required throughout the country and of the necessity for urgent acquisition, the Minister, on representations by the Department of Defence, decided not to press the suggestion that the Valuation Office should be consulted in regard to all lettings. Where it was felt that the advice of the Valuation Office would be helpful and time permitted, consultation took place with that Office.
Paragraph 16.—Medical stores.
The investigations referred to by the Committee are nearing completion and the Committee will be furnished in due course with the views of the Minister for Finance.
APPENDIX TO THE MINUTE OF THE MINISTER FOR FINANCE
With reference to your minute (G. 1620/42) of the 16th ultimo, and previous correspondence arising out of the observations of the Public Accounts Committee in its Reports on the Appropriation Accounts for 1939-40 and 1940-41 on the procedure adopted by your Department in the former year in varying the rates of subsidy on cheese and dried milk, I am directed by the Minister for Finance to state that he adheres to the view that this procedure was open to objection in principle. He desires that, without prior consultation with this Department, there should be no departure in future from the payment of subsidy by reference to definite standards affording an exact and appropriate basis of calculation, even if no excess beyond the limit of the discretion given to your Department to vary subsidy rates is involved.