Committee Reports > List of Committees > Dáil > 1945 > Committee of Public Accounts > Interim and Final Report - Appropriation Accounts 1942 - 1943

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 8ú Feabhra, 1945.

Thursday, 8th February, 1945.

The Committee sat at 11 a.m.

Mr. J. Maher (An tArd-Reachtaire Cuntas agus Ciste), Mr. C. S. Almond and Mr. L. M. Fitzgerald (An Roinn Airgeadais) called and examined.

Deputy S. Brady.—I propose that Deputy Cosgrave act as Chairman of this meeting.

Agreed.

1068a. Deputy S. Brady.—Before we start our proceedings, I should like to remind the Committee that some time ago I asked for a report with reference to some machinery purchased by the Stamping Department. I got a reply from the Office of the Revenue Commissioners and I should like to raise the matter at a meeting of the Committee which would be convenient for everybody, as I am not satisfied with the information given to me. There is no urgency about it. I asked the question during the discussion of the Post and Telegraphs Vote, but I doubt if that is really the correct Vote. It possibly is the Board of Works. It is a question of machinery purchased for these automatic machines for making stamps.

Mr. Maher.—That would be a Revenue matter.

Deputy S. Brady.—I should like to have an opportunity of examining it further.

Chairman.—Maybe we could raise it on the report?

Deputy S. Brady.—Whatever is convenient, but I should like to have it investigated.

Mr. Maher.—It can be raised on next year’s accounts.

Deputy S. Brady.—Whatever is convenient.

VOTE 69—OFFICE OF THE MINISTER FOR SUPPLIES.

Mr. J. Leydon called and examined.

Report of the Comptroller and Auditor-General:

“Subhead F.—Flour and Wheaten Meal Subsidies.

“82. As in the previous year, wheat was imported by Grain Importers (Éire), Limited, and allocated to millers at prices designed to control the price of flour and regulate the earnings of the milling industry. The expenditure related to the company’s claims in respect of allocations of imported wheat in the period 29th March, 1942, to 27th February, 1943, during which the prices charged to the millers varied from 27s. 4d. to 69s. per quarter and the loss on sale amounted to £1,787,983 11s. 5d. The claims made by Grain Importers (Éire), Limited, indicated that there was available towards the cost of subsidy a sum of £371,594 15s. 0d., the balance of £650,000 at the disposal of Grain Importers (Éire), Limited, and the Wheat Reserve Committee together with £50,000, representing the amount recovered from the millers in provisional adjustment of the prices charged for imported wheat allocated in the period from 13th October, 1941, to 29th August, 1942. Subsidy amounting to £7,852 10s. 0d. was withheld in connection with stocks of wheat and flour held by millers prior to the increase in the price of flour, on 14th September, 1942, from 52s. 6d. to 60s. per sack of 280 pounds. The charge to the Vote was, therefore, reduced to £1,358,536 6s. 5d.

I understand that a further sum of £6,847 was recovered from the millers as a final adjustment of allocation prices for the period ended 29th August, 1942, indicating that surplus profits during the period mentioned amounted, in all, to £56,847. I have inquired regarding the steps taken to ensure that the agreed remuneration of the milling industry was not exceeded in the cereal year 1942-43. I am also in communication with the Accounting Officer regarding the check placed on the claims made by Grain Importers (Éire), Limited, and other matters arising out of my examination of the claims and relevant departmental files.”

1069. Mr. Maher.—The Accounting Officer has informed us that the amount of subsidy is finally determined by the profits earned for each complete cereal year in the industry as a whole and all payments must be regarded as provisional pending the final determination of these profits. The annual accounts of individual millers for each cereal year are checked by the qualified accountants in the Department with a view to determining the total profits earned by the industry. When these profits have been finally ascertained, the necessary adjustment is made in the subsidy payments so as to keep the profits for the whole year within the figure of 6 per cent. on the capital employed in the industry. The basis of remuneration for the year under review, the 1942-43 cereal year, has been changed in as much as the capital employed in the industry has been increased and agreed with the sanction of the Minister for Finance at £4,000,000. Last year it was considered on the basis of £3,600,000. As regards the second point in the paragraph, the Accounting Officer informs us that arrangements have been made to have test checks carried out at the company’s offices from time to time and that the first of these checks had already been made by an officer of the prices branch. This officer had access to all the books and records of the company and the Accounting Officer also states that he is satisfied that the checks applied are the best possible in the circumstances, having regard to the method agreed upon for the payment of flour subsidy.

1070. Chairman.—I observe that there is a big difference between the price of 27s. 4d. and 69s. per quarter. I wonder could you inform us as to how the difference is made up, Mr. Leydon?—The allocation price is varied from time to time according to our estimate of what the profits of the millers are going to be. If we think the profits are going to be too low in relation to the agreed remuneration, we tell Grain Importers to lower the allocation price of wheat. If at a particular point we think their profits are going to be unduly high, we tell Grain Importers to raise the price of wheat. Grain Importers allocate imported wheat to the millers at a price which is fixed by the Department of Supplies. The price of 27s. 4d. was in operation from September, 1942, to January, 1943. At that stage we felt it was unduly low and we increased it to 69s.

1071. That was a considerable jump?— I quite appreciate that. In the long run, it makes no difference to the millers because the final adjustment is such that the milling industry as a whole gets the agreed remuneration.

1072. Do Grain Importers also allocate the amount of imported and native wheat for the millers’ grist or does it depend on each individual miller?—The grist is fixed. The percentage of native and imported wheat has to be fixed in relation to the total yield of the native crop. They must use all the native wheat available and then imported wheat is allocated to make up the difference and the percentage is fixed on that basis.

1073. Apparently as the amount of imported wheat used increases, the price increases?—There are quite a number of factors which have to be taken into account. For instance, the moisture content of the wheat has an important bearing on it.

1073a. Is the moisture content of imported wheat much less than that of native wheat?—As a rule it is, but recently one of our great difficulties has been that the moisture content of imported wheat is higher than it was at an earlier stage. Difficulties arise, too, because Grain Importers cannot always get the kind of wheat they would like to buy. They would like to buy No. 1 Manitoba but, at a particular stage, it might happen that they could not get No. 1, that they could get only No. 2 or No. 3, which has a higher moisture content. Of course, that upsets the estimate of the millers’ costings.

1074. Chairman.—The next portion of that paragraph of the Report of the Comptroller and Auditor General states:

“The balance of the charge to this subhead, amounting to £941 14s. 11d., relates to payment of subsidy to a wheaten meal miller on wheaten meal manufactured and sold in the period 13th October, 1941, to 31st March, 1942. I have inquired regarding the profits made by, and the capital employed in, this business.”

Mr. Maher.—The Accounting Officer has, since the report was issued, informed us that the manufacture of wheaten meal is only one of the activities of the firm in question and that it would be impossible, on the figures supplied, to base the payment of subsidy on the profits made or capital employed in the business during the period October, 1941, to March, 1942. Apart from these circumstances, the payment of wheaten-meal subsidy, which has been approved by the Department of Finance, is fixed by reference to the cost of wheat and the selling price of the meal. From information which has since been furnished by the Accounting Officer, it would appear that this basis is fair and reasonable and does not permit of excess profits being made over and above the figure agreed upon.

1075. Chairman.—In the case of this firm, is the subsidy based entirely on that portion of the business which deals with wheaten meal or is allowance made for the fact that some of those concerned are employed in other manufacturing processes?

Mr. Leydon.—The subsidy is related to the wheaten-meal side of their activities only.

1076. Chairman.—I take it, then, that it does not matter what profit is made by the firm: the subsidy is paid on a certain basis?—That is so. The subsidy is paid irrespective of the firm’s profits on other activities.

1077. Chairman.—Paragraph 83 of the report deals with subhead G. (Bread Subsidy) and is as follows:—

“Subsidy at the rate of ½d. per 4 lb. loaf continued to be paid in respect of batch bread baked and sold by bakers licensed under the Emergency Powers (Bakers) Order, 1941 (Statutory Rules and Orders, No. 453 of 1941).

In my last report I mentioned that in several cases where subsidy was paid on foot of improper claims, the Vote had been relieved of the amounts, which were charged to a suspense account pending further examination. The examination referred to has since been completed, and of the sum of £848 19s. 4d. involved, £680 2s. 11d. was recovered from the bakers concerned, and £168 16s. 5d., relating to cases in which it was established that satisfactory records of sales had been kept, has been charged to the Vote.”

Mr. Maher.—That is for information only.

1078. Chairman.—Is this subsidy of ½d. on the 4-lb. loaf still continuing?

Mr. Leydon.—It is continuing on the same basis. I might mention, for the information of the Committee, that we have recently reviewed the subject in the light of the most recent accounts received from the bakers.

1079. Chairman.—I noticed recently in the accounts of Irish Shipping, Limited, that imported wheat is cheaper than it was, as a result of reductions in freight charges. Will that make any difference in the subsidy on batch bread?—That, of itself, would not necessarily affect the subsidy on bread until a stage were reached at which it would not be necessary to subsidise flour. That would really affect the subsidy paid on flour through Grain Importers, because the less Grain Importers have to pay for imported wheat, the smaller the subsidy which will be payable on flour. Every reduction in freights on imported wheat brings a corresponding reduction in the subsidy which has to be paid to Grain Importers to keep down the price of flour.

1080. Chairman.—Paragraph 94 deals with Extra Receipts payable to the Exchequer:—

“As will be seen from the account, licences and other fees payable under Section 8 of the Emergency Powers Act, 1939 (No. 28 of 1939), amounted to £17,967 18s. 10d. The principal items were Flour and Bread (Retailers’ Licences) £5,598 7s. 6d., Butter (Wholesalers’ and Retailers’ Licences) £4,053 6s. 2d., Textiles (Manufacturers’ Licences and Permits) £3,308, Sugar (Manufacturing Consumers’ Certificates of Registration) £1,371, and Fabrics (Import Licences) £1,102 7s. 6d.

In the course of my audit of the licence fees payable in respect of the importation of certain yarns and fabrics, I observed that in a number of cases more than one import licence was issued on payment of a single fee, though the Minister for Finance had directed that a fee should be charged in respect of each licence issued under the relevant Emergency Powers Orders. In reply to an inquiry, I was informed that in these cases licences were issued by instalments for administrative reasons, that the covering sanction of the Department of Finance would be sought for the procedure adopted and that steps had been taken to ensure that all the licence fees properly payable would be collected in future. In the circumstances represented, the Minister for Finance raised no objection to the action taken and noted that it was not possible to collect the amount due in respect of fees which should have been collected when the licences were being issued or, without undue difficulty, to give an estimate of the amount involved.”

Mr. Maher.—We understand that the procedure now provides that a fee be paid on the issue of each licence.

1081. Chairman.—Could you, Mr. Leydon, estimate the total loss to the Exchequer as the result of only a single fee having been paid in respect of those licences?

Mr. Leydon.—I could not say the amount lost in those cases. We looked it up but it would involve a tremendous amount of work to get the exact figure, as we should have to go over all the licences granted.

1082. Chairman.—Is the Department of Finance satisfied with the procedure adopted?—I understand that the Department of Finance is satisfied with the procedure now adopted. If I may say so, there is room for difference of opinion as to the propriety of this particular course. What happened was: an importer got a bulk licence to cover a consignment of goods which he was bringing in. While coming in one consignment, the goods might comprise different kinds of fabrics —woollen, cotton and artificial silk goods, for instance. The Revenue Commissioners say that they cannot treat these goods as one consignment, that they must be split up because they have to be shown under different heads in their returns; therefore, there must be a separate licence to cover each item. On the strict wording of the Order, a separate licence had to be issued and a separate fee charged for each licence. I am not at all sure that it does not involve a certain hardship on the trader to have to pay a separate fee for each licence instead of one fee for a composite licence. We are looking into that matter at the moment.

1083. Deputy S. Brady.—Sugar is mentioned in this paragraph. I understand that the Department of Supplies prudently imported a large consignment of sugar when there was danger of home supplies falling short. There have been very serious complaints from the trade as to the way in which that sugar was unloaded on them. I understand that it was held for a considerable time. Whether or not the Department feared a loss through the sugar deteriorating I do not know, but manufacturers were not able to use the percentage which was unloaded on them. I should like to know if a loss was incurred on this transaction?—No financial loss was involved in the transaction. I am not sure that the Deputy has got the whole story.

1084. I should not be surprised if I had not. My information was obtained from the traders who complained about the matter?—The manufacturers?

1085. They said that it was released too suddenly. They were quite willing to cooperate by using a certain percentage (I do not know much about the matter but let us say 5 per cent. or 2½ per cent.) whereas they had to take up to 50 per cent. I visited some of the factories and it was utterly impossible to use so high a percentage in the particular processes involved. I take it that the Department had to release the sugar suddenly for some particular reason?—There was no question of releasing it suddenly. It was raw sugar —not refined sugar. We refined a certain amount for ordinary domestic consumption. We understand that raw sugar is equally suitable for manufacturing purposes. The manufacturers would, I think, prefer to have refined sugar because they say chocolates and certain kinds of sweets are not quite so nice or attractive if a very high proportion of raw sugar is used in their manufacture. We could not regard that as a conclusive argument, in present circumstances, particularly as they were all put on the same footing. All manufacturers had to use the same percentage and no manufacturer suffered any hardship as compared with another. We have received no complaint from the public as regards the quality of the products. There was no question of releasing the sugar suddenly. It had to be held for a long time and, at the rate at which it is being released, it will take a long time to dispose of it all.

1086. Deputy S. Brady.—I would not agree with that at all. I visited a number of factories and I am satisfied that a definite hardship was imposed on manufacturers, that they were not able to consume the sugar at the rate at which it was unloaded. Whether the public had any complaint or not, is a question I should not be prepared to answer. Probably, they had not, because only a certain proportion of the sugar supplied to the manufacturers was, in fact, used. Some manufacturers had actually to discontinue various lines owing to the high percentage of that sugar unloaded on them.

1087. Chairman.—Would it be possible for the Department of Supplies to retain the sugar longer or was it deteriorating at a rate which forced them to unload it?— Speaking from recollection, I do not think that the sugar was deteriorating but it had to be used sooner or later. It could be used in the raw state and we did not send it to the refinery in view of the difficulties at the present time in regard to plant and fuel.

1088. Chairman.—Is any warning given to manufacturers that a certain amount of sugar is about to be released?—It was under discussion for some time with the various classes of manufacturers referred to.

Deputy Dockrell.—Without having any very technical knowledge whatsoever of sugar, it seems to me to have been a very sensible action of the Department of Supplies in view of the shortage of sugar.

Deputy S. Brady.—Everybody admits that it was a most prudent and fortunate thing to have done, to secure the sugar.

Deputy Dockrell.—And to have released it also, I think.

Deputy S. Brady.—No. There were technical difficulties which made it an extreme hardship on various traders to have to use it in such a very high proportion instead of refined sugar.

Deputy Dockrell.—It would have been worse if they were not able to produce their products.

1089. Deputy S. Brady.—No. In many cases it meant that they had to discontinue manufacturing their lines altogether, as they could not use it. Was there any loss incurred?—There was no loss in the sense that it was not sold for less than it cost. The profit on it, perhaps, was not as high as it would have been on native sugar, if the Government could have replaced it by native sugar, but we had not any at the time. It was expensive sugar.

Deputy S. Brady.—I know you could not have replaced it.

1090. Chairman.—On subhead A., has the staff increased very considerably? I see there is a considerable increase in expenditure in comparison with the grant? —Yes, there was a considerable increase in the staff.

Chairman.—We are very much obliged to you, Mr. Leydon, and we are glad to see you back again after your successful tour.

VOTE 67—EMPLOYMENT SCHEMES.

Mr. E. J. MacLaughlin called and examined.

1091. Chairman.—There is a note by the Comptroller and Auditor-General, paragraph 80:—

“With the approval of the Minister for Finance, county surveyors act as agent inspectors for carrying out minor employment schemes and receive as remuneration a percentage of the expenditure on wages and materials. As this basis of remuneration was fixed in the year 1935, and wages have since been increased, I have inquired whether the question of revising the basis of remuneration has received consideration.”

Mr. Maher.—We noticed that the actual remuneration received was in some cases considerable—in one case over £1,000, in another £820 and in another £724. The Accounting Officer has since informed us that the county surveyors did this work for the Department with some reluctance and that since the duties were assigned to them the rotational system of labour on employment schemes which was introduced in 1936 caused a good deal of additional work. Morever, only portion of the commission is retained by the county surveyor himself, the remainder being divided amongst the assistant county surveyors, the clerical staff engaged in the checking and discharging of wages sheets, the issue of paying orders, the stamping of insurance cards and so on. Moreover, the control over the county surveyors in this work is not particularly strong and the Accounting Officer states, in his reply to us, that if any effort were made to reduce the percentage basis of remuneration, they would be disinclined to carry out the work at all.

1092. Is there any basis on which the amount the county surveyors receive, Mr. MacLaughlin, is allocated? Is a proportion allotted to the county surveyor himself and another proportion to his assistants?—We regard that as a domestic matter for the county surveyor, but we have general information about it. The proportion varies in the different counties. The county surveyor is our agent and we allow him to make the necessary arrangements without particular enquiries as to the distribution. We know that a considerable proportion of the commission goes to the clerical staff for the preparation of wages sheets, issue of drafts to workmen, etc., and that a good deal goes to the assistant county surveyors.

1093. Are you satisfied with the way in which the scheme is working?—On the whole, yes. It varies with different counties, but is reasonably satisfactory.

1094. What is the percentage remuneration?—On the first £3,000, 6 per cent.; on the second £3,000, 5 per cent.; and on any additional expenditure 4 1-6 per cent.

1095. Chairman.—The paragraph continues:—

“In previous reports I referred to expenditure incurred on the provision of a labour camp at Clonsast under a scheme for peat development, and to the arrangements entered into with the Turf Development Board, Limited, for payment of rent by the Board while in occupation of the camp and the payment to the Board of an allowance for caretaking for periods when the camp was unoccupied. These arrangements were continued in the year under review, but I understand that the buildings and equipment have, with the consent of the Minister for Finance, since been sold to the Board.”

Mr. Maher.—The total cost of these buildings was £7,645 and the cost of equipment was £950. We have been informed that, after some correspondence, an offer of £4,000 was accepted, that the sanction of the Department of Finance was obtained and the buildings passed to the Turf Development Board on the 1st January, 1944.

1096. Chairman.—It appears, Mr. MacLaughlin, that the Board made a rather good purchase, if the buildings cost £7,000?—That is possible.

1097. Deputy Dockrell.—I suppose no other tenders were received?—No, we did not think it necessary to ask for tenders, as the hostel in this case was situated beside the Turf Board’s other premises at Clonsast and on their land. It would have been quite impracticable for the Turf Board to allow anybody else to use the hostel as it stood. The only alternative was the taking down of the building and selling it and we knew there would be heavy loss on that. As well as that, it was probably a consideration that it would indirectly help the Turf Board, as they had occasional need for additional accommodation for workmen, since labourers in the district were very scarce. It was the only course open in the circumstances.

1098. On the Vote itself, under the heading of “Extra Receipts Payable to the Exchequer,” could you say for what services these repayments are made? Firstly, repayments in respect of loans to co-operative creameries?—These were loans made some ten or 11 years ago under the Unemployment Relief Act, 1931, and were made at the time for concreting creamery yards and work of that kind around creameries. These are merely instalment repayments of loans coming in. I think they are almost finished now.

1099. And regarding refunds of overpayments in previous years, £8,436 10s. 10d. was realised?—That was in respect of the agent Departments employed by us for carrying out these employment schemes. The Department of Local Government was principally concerned.

1100. For how many years did the overpayment occur?—I think that would arise in respect of just one year’s accounts. The accounts of the local authorities are not audited in time to bring the repayments or any mistakes that are discovered within the scope of the particular financial years they are dealing with.

VOTE 73—SPECIAL EMERGENCY SCHEMES.

Mr. E. J. MacLaughlin further examined.

1101. Chairman.—There is a note by the Comptroller and Auditor-General, paragraph 87:—

“Issues to the Turf Development Board, Limited, from the Grant in Aid provided under sub-head E. 1. (Cost of Administration), amounting to £19,240, were made during the year with the consent of the Minister for Finance. No request was received in the year for issues from the Grant in Aid provided under sub-head E. 2. (General Development) and no issues were made.

The following sums were issued during the year, with the sanction of the Minister for Finance, for development of the bogs indicated and for the production of hand-won turf:—

These issues are repayable by the Board on terms and conditions which have been referred to in previous reports, and the amounts outstanding, including interest on these and previous issues, at 31st March, 1943, were:—

Advances amounting to £3,000, which were made in respect of the development of Lyracrompane bog, were refunded in the year and have been accounted for as exchequer extra receipts.

Schemes operated by the Board for the production of hand-won turf have been discontinued and the Department of Finance has agreed that interest on the advances outstanding should not be charged beyond the 31st March, 1943. I understand that it is proposed to seek authority to write off the loss which has been incurred.”

What were the terms and conditions under which the issues were repayable by the Board?—I understand that they varied in connection with the different undertakings of the Board. The understanding was that, when development began and until it was complete and machine production could commence, no repayments would be required, but interest would be charged.

1102. I observe that the sum of £3,000 which was given in respect of the development of Lyracrompane bog was refunded. Could you say how it was that a refund was made in that particular case?—That proved to be a more profitable undertaking than the others.

1103. Why were the schemes for the production of hand-won turf discontinued? Were they found unprofitable?—Yes. It was one of the experiments entered upon at the beginning of the emergency and it proved quite uneconomic.

1104. Did the Army personnel give any assistance in connection with the production of this hand-won turf?—The Army Construction Corps gave their services in the development of bogs but not in connection with the particular item mentioned in the Auditor General’s note.

1105. Deputy S. Brady.—Why, in your opinion, was the scheme for the production of hand-won turf a failure? Was it due to the type of men employed?—There was a variety of reasons. In Glenties, County Donegal, where one of the principal experiments was carried out, according to the explanation we got from the Turf Board (we got an explanation in all these cases) the bulk of the turf crop was lost. It was a bad turf area, and this proved to be a bad season. Another reason was that the Board had hoped to have a light railway to bring out the turf but owing to the scarcity of rails they did not succeed. All these circumstances combined to make it an unsuccessful scheme and the view of the Turf Board, following their experiments, was that hand production could not be carried out economically; and they have abandoned any further attempt at it. Perhaps it is as well to explain that at the beginning of the emergency there was fear of a fuel famine, as you will remember, and at the time the best means of supplying the fuel deficiency was not quite understood. The county surveyors were only beginning their operations and the late Mr. Hugo Flinn, who was Turf Controller, was seeking round in every direction for the best means possible of production. He had to try a great many different methods and this was one of them. Some of them were bound to be unsuccessful. That was the atmosphere in which these experimental schemes were carried out.

1106. Chairman.—Had the sanction of the Department of Finance to write off the loss been secured?—Yes.

1107. Chairman.—Paragraph 88 of the report reads:

“Subhead F.—Production of Turf for use in Non-Turf Areas.

“88. In paragraph 79 of my last report I referred to the provision of camp accommodation for men employed on the production of turf. Sums amounting to £195,425 10s. 8d. were expended during the year under review, and, including the amount of £57,348 7s. 8d. charged to the Vote in the previous year, the total expenditure on the provision and equipment of the camps amounted to £252,773 18s. 4d. to 31st March, 1943.

The camps were ready for the reception of the workers in the summer of 1942, and were taken over by the Turf Development Board, Limited, acting as agent for the Special Employment Schemes Office. The approved arrangement for recoupment to the Board of the expenditure on wages and other outgoings connected with the production of turf by the workers accommodated in the camps provided that the payments made to the Board were not at any time to exceed the aggregate of the expenditure. The periodical claims for recoupment were in a form designed to show the receipts and payments by the Board to the latest date for which figures were available and also included an estimate of expenditure to the date of the claim. The issues made during the year to the Board amounted to £267,980 12s. 0d. while the actual expenditure subsequently shown by the final account amounted to £239,365 9s. 3d. which has been charged to the Vote. The overissue amounting to £28,615 2s. 9d., which was charged to a suspense account, was recovered in November, 1943.”

Have you anything to add, Mr. Maher?

Mr. Maher.—The Accounting Officer has explained that an over-estimate of the requirements to the end of March, 1943, was made by the Turf Development Board. I should mention that at the end of March this service was transferred to the Department of Supplies, and that in making provision for the estimated expenditure it was anticipated that a large payment amounting to £25,000 would have to be made to the Department of Defence. Actually that payment did not come in course of payment within the year, and that accounts for the bulk of the over-estimate.

1108. Chairman.—For what service was the payment made to the Department of Defence?—Catering—the provision of food. That is for the camps in Kildare.

1109. Chairman.—The paragraph continues:—

“The final settlement of the board’s claims was based on a cash account of the transactions during the year, certified by a firm of professional accountants, and I have inquired as to the extent of the examination and verification of the items in the account undertaken by the Special Employment Schemes Office. The amount charged to the Vote includes certain items which would appear from the certified cash account not to be properly chargeable to public funds. I am in communication with the Accounting Officer on this and other matters which came under notice in the course of my examination.”

Have you anything to add, Mr. Maher?

Mr. Maher.—I should say at the outset that the Turf Development Board took over the scheme as agents for the Special Employment Schemes Office in April, 1942, and as the turf programme was transferred to the Department of Supplies on 31st March, 1943, the Special Employment Schemes Office was responsible for only one year. The Accounting Officer has informed us that no check or verification had been made by his office of the wages sheets and other vouchers before the transfer of the turf programme to the Department of Supplies. Arrangements were just then in train with the Department of Finance for the provision of staff to enable a check to be made directly by that Office of the accounting work arising out of the State turf scheme. Arrangements were, however, made at the same time for the exercise of a continuous local examination of the expenditure by the auditors dealing with the accounts of the turf board’s other undertakings, and who, accordingly had experience in the examination of accounts of this class. An inspection at a later date, in July, 1943, by the officers of the Special Employment Schemes Office showed that the scrutiny carried out by the auditors was of a comprehensive nature and that the procedure on which they insisted appeared to do all that was possible to ensure the correct keeping of accounts by the Board’s officials.

1110. Chairman.—As this is a large sum of money, can you say, Mr. MacLaughlin, why no accounts or no check were kept by the officers of your section? —The matter was discussed at the outset, before the Turf Board took over the agency for us, with the Department of Finance, and the general lines of the check to be made by our officers were laid down. It was decided at the time that as the Turf Board had the services of a firm of chartered accountants to look after all their other undertakings, and as they were very familiar with the type of business, the check carried out at headquarters by our office need not be a very elaborate one and need not be frequent. A period was mentioned at the time of six months. As a matter of fact, the Turf Board did not begin their operations until the early summer. As you know, the season is over in four or five months. We were not finished with our preparations for the check when the programme was transferred to the Department of Supplies, so we really had no opportunity. We had taken up the question before that with the Department of Finance, and made a requisition for the necessary accounting staff to investigate the wages sheets for the undertaking. The matter was in train when the transfer of the turf programme to the Department of Supplies took place. I should explain to the Committee that it would not be quite right to say that we had not any check on the work that was being carried out by the Turf Board. On the contrary, before they began their operations, we devised a number of weekly return forms in which the Board showed the expenditure under all the agreed headings. The returns showed the output of work, the production of turf, and all the other matters that were necessary to enable us to keep control of what the Board were doing.

1111. Was the Department of Finance satisfied with this arrangement?—The arrangement I referred to at the start, the checking of the actual wages sheets, was to be of a six-monthly nature. That was agreed to by the Department of Finance.

1112. Chairman.—The paragraph continues:

“The charge to the subhead, in addition to the amounts of £195,425 10s. 8d. and £239,365 9s. 3d. referred to above, includes £5,865 19s. 3d. on bog development schemes, £14,319 8s. 8d. on tools and materials, £6,755 8s. 2d. on recruiting and training, £2,625 4s. 0d. on turf transport, and certain miscellaneous expenditure amounting to £1,144 17s. 3d.”

Mr. Maher.—That note shows how the total is arrived at.

1113. Chairman.—Paragraph 89 reads:

“Subhead K.—Farm Improvements Scheme.

89. The charge to this subhead includes grants for the improvement of farms, together with administrative expenses in connection therewith and with the schemes for the distribution of seed and lime, direct expenditure on which is charged to subheads L. and M., respectively. Provision was made for the payment, under certain conditions, of grants equivalent to one-half of the approved estimated labour cost of works such as field drainage, land reclamation, fencing and the improvement of farmyards and farm roadways. The maximum grant payable to any one applicant under any seasonal scheme was £100 and the minimum grant £5, except in Congested Districts where the minimum grant was £1. The grant paid amounted to £178,889 18s. 0d., made up as follows:—

The administrative expenses mentioned above, amounting to £43,667 19s. 9d., account for the remainder of the charge to the subhead.”

Mr. Maher.—That paragraph is for information only.

1114. Chairman.—Does the Department of Agriculture bear some responsibility for this scheme?—They are the agents who actually do the work.

1115. Does the Department of Agriculture decide the maximum and minimum amounts granted?—That is so, in consultation with the Department of Finance, of course

Chairman.—One would do very little work for £1, I imagine.

Paragraph 90, Comptroller and Auditor-General’s report:—

“Extra Receipts Payable to Exchequer.

A sum of £526 4s. 11d. was collected as bog rents during the year and brought to account as exchequer extra receipts. In reply to an inquiry as to the basis on which rents were fixed and the system adopted for the receipt, control and disposal of the payments made by the tenants, I was informed that the rents were fixed on the basis of the rents charged before the bogs were taken over or, in the absence of previous lettings, on the prevailing rates for similar turbary in the district. The lettings were made by Inspectors of the Land Commission, seconded to the Special Employment Schemes Office for the purpose of carrying out development works on Government bogs, and the procedure adopted followed the practice of the Land Commission in regard to temporary bog lettings, except that the rents were collected locally by the Inspectors. This method of collection was deemed advisable in view of the large number of small amounts involved. The details of lettings, together with map references, were embodied by the Inspectors in schedules which were transmitted to the Special Employment Schemes Office and there served as a rental for the purpose of accounting for the amounts collectable. In the circumstances I have asked that the covering authority of the Department of Finance be sought for the arrangements made.”

1116. Chairman.—Have you anything to add to that, Mr. Maher?

Mr. Maher.—We have since been furnished with the Department of Finance’s authority for the arrangements made for the collection of these rents.

1117. Deputy Dockrell.—Covering authority has been received?—Yes.

1118. Chairman.—As to Subhead J.— Miscellaneous Fuel Production Scheme— what does that mean?

Mr. MacLaughlin.—The only scheme that was carried out in that year was one by the Forestry Division of the Land Commission. It was of an experimental nature to provide timber for Fuel Importers, Ltd.

1119. Deputy Dockrell.—The note with reference to Subhead J. says: “The proposed scheme for the production of fuel from privately-owned estates did not prove practicable”. How did that come about? —The Land Commission, through the Forestry Division, had hoped to have quite an extensive scheme for the provision of timber from private estates.

1120. In small quantities?—Yes, in small quantities on different estates. They tried an experiment in this particular case but, for a variety of reasons, they found it was not encouraging.

1121. The units were too small, I suppose?—I think that was one of the difficulties. Then there were transport and other difficulties.

1122. Machinery and everything else?— Yes.

1123. Chairman.—As to Subhead K.— Farm Improvements Scheme—if a person applies for a grant to carry out a certain work, has the work to be passed by an inspector or engineer before the grant can be made, or, if sufficient details concernin the work are given by the applicant, is the grant made automatically?—A supervisor of the Department of Agriculture visits the site and sees what is to be done before a grant is authorised.

1124. It is not confined to any particular counties or areas; it applies to the whole country?—Yes, to the whole country.

Witness withdrew.

VOTE 4—COMPTROLLER AND AUDITOR GENERAL.

Mr. W. E. Wann (Accounting Officer) called and examined.

1125. Chairman.—As to the item: “Extra receipts payable to the Exchequer:—Audit fees, £732—could you say what these fees are?

Mr. Wann.—These are fees received from a number of audits we carry out on a repayment basis.

1126. For private firms?—Some of them are commercial audits and some of them are statutory audits, such as the Road Fund and the Savings Bank Fund.

The Committee adjourned.