Committee Reports > List of Committees > Dáil > 1947 > Committee of Public Accounts > Report - Appropriation Accounts 1944 - 1945

APPENDIX II.

MINUTE OF THE MINISTER FOR FINANCE ON THE REPORT DATED 29th NOVEMBER, 1945, OF THE COMMITTEE OF PUBLIC ACCOUNTS.

Paragraphs 1, 2, 6, 10, 13 and 16.

These paragraphs do not appear to require comment on the part of the Minister.

Paragraph 3.—Kit Deficiencies.

Subsequent to the issue of the minute of the Minister for Finance dated the 13th November, 1945, to the Committee, it was found necessary to amend the list of items of personal clothing and necessaries which, in accordance with the arrangements previously approved, were to be subject to surrender by soldiers on discharge, the principal amendment being that necessaries should not be surrenderable. The Department of Defence did not find it possible to bring the revised arrangements into full operation until the 1st February, 1946. As from that date, all losses of surrenderable items of personal clothing will be disclosed in the Appropriation Accounts.

The Department of Defence has represented that it would be impracticable, at this stage, to ascertain the losses arising out of deficiencies of personal clothing and necessaries in the kits of soldiers who were discharged or who deserted prior to the 1st February, 1946, and the Minister for Finance is satisfied that no useful purpose would be served by pursuing the matter further.

Paragraph 4.—Production of turf for use in non-turf areas.

The financial year 1942/43 was the only year in which the expenses of the production of turf for use in non-turf areas were met from a Subhead other than a Grant-in-Aid Subhead. In 1943/44 and subsequent years, the moneys for this purpose have been made available by means of Grants-in-Aid to the Turf Development Board, Ltd., and to its successor, Bord na Móna. Consequent on this change of procedure, revised accounting arrangements were adopted with the approval of the Department of Finance. The checks imposed on the Board’s accounts under these arrangements are, in general, on the lines of those imposed in the case of other Grants-in-Aid.

LOCAL GOVERNMENT AND PUBLIC HEALTH

Paragraph 5.—Overpayment in respect of grants under the Housing (Financial and Miscellaneous Provisions) Act, 1932.

The Minister notes and is in agreement with the Committee’s views on this subject. He has received an assurance from the Department of Local Government and Public Health that a special direction has been given to the Department’s Housing Inspectors on the need for personal inspection before certification. He understands further that a system of checks is being instituted to ensure compliance with this direction.

TRANSPORT AND METEOROLOGICAL SERVICES

Paragraph 7.—Accounting for Stores at Shannon Airport.

The Minister is assured that the system of accounting for stores and equipment at Shannon Airport which has been in operation since May, 1945, fulfils all essential requirements.

UNEMPLOYMENT INSURANCE AND UNEMPLOYMENT ASSISTANCE

Paragraph 8.—Recovery from Unemployment Fund of cost of administration of Unemployment Insurance Acts, and disposal of sums recovered.

Pursuant to section 12 of the Unemployment Insurance Act, 1920, the Minister has given a direction as to the sum to be applied annually out of the Unemployment Fund as an appropriation in aid of the moneys provided by the Oireachtas for the administration of the Unemployment Insurance Acts and has made fresh regulations prescribing the Votes in aid of which such sum is to be appropriated and the basis of apportionment between them.

FOOD ALLOWANCES

Paragraph 9.—Issue of food vouchers.

Instructions have been issued by the Department of Industry and Commerce to all offices from which food vouchers are distributed, impressing on the officials concerned that the greatest care must be taken to ensure that vouchers are correctly dated and issued and emphasising the difficulties which would arise from any failure to observe the relevant instructions. The Minister is satisfied that, apart from the issue of these instructions, there are no other practicable measures which could be taken to prevent a recurrence of errors in the issue and dating of food vouchers.

POSTS AND TELEGRAPHS

Paragraph 11.—Deficit on working of Post Office Factory following outbreak of fire in 1942; adjustment of costings.

As a result of correspondence with the Department of Posts and Telegraphs the Minister is satisfied that the amount of the deficit for the year 1943/44 might have been somewhat reduced if a slightly higher percentage than that applicable immediately before the Post Office Factory fire had been added to the direct labour costs to cover overhead charges. A substantial deficit could not, however, have been avoided during the period when the Factory was being reconstructed and new plant and machinery were being installed as any abnormal increase in the percentage added would have meant that the tenders of the Factory would be so high that they could be accepted only in cases where other suppliers could not compete, and this would have seriously delayed the return to normal working. If the Factory plant and machinery had been in working order during the year in question the rate of output would have been approximately the same as just before the fire, and overhead charges would have been completely covered by the percentage actually added. The Minister, therefore, considers that the deficit of £4,251 as against overhead charges is proper to be regarded as an indirect loss due to the fire, and he has accorded his covering sanction for the maintenance of the pre-fire percentage addition of 100 during the period from 5th July, 1942, to 31st July, 1944.

Because of increasing overhead charges and an anticipated restricted output arising from the difficulty in obtaining stocks of raw materials, the percentage addition for overheads was increased to 125 as from 1st August, 1944, even though the reconstruction and refitting of the Factory were not completed until some three months later. The deficit was reduced to £1,262 in 1944/45, and it was found possible to reduce the percentage addition to 120 as from 1st April, 1945.

WIRELESS BROADCASTING

Paragraph 12.—Control and custody of gramophone records.

The system of indexing gramophone records in the Wireless Broadcasting Gramophone Library is still under examination with a view to improving, if practicable, its effectiveness for audit purposes while retaining its suitability for its primary purpose of providing ready access to records required for broadcasting.

The Library, which formerly was housed in two small rooms affording inadequate accommodation, now occupies a large single room under the direct supervision of the Gramophone Librarian and is being organised and equipped generally on lines similar to those obtaining in public libraries. In the course of the transfer to the new accommodation some records previously reported missing were discovered, mis-sorted to wrong positions.

The Library staff has been augmented by the appointment of an Attendant who has been instructed to obtain receipts for all records taken from the Library, a procedure which was not always practicable formerly. The new arrangements will ensure much more effective control of the records than was possible under the conditions that obtained previously.

SUPPLIES

Paragraph 14.—Transfer of shares in Irish Shipping, Ltd., to the Minister for Finance by Grain Importers (Éire), Ltd.

It does not appear to the Minister for Finance that his purchase, for a nominal consideration, of the shares in Irish Shipping, Ltd., held by Grain Importers (Éire), Ltd., constituted an infringement of Emergency Powers (No. 72) Order, 1941, or that, even if the market value of the shares could be satisfactorily assessed, the reduction of the flour subsidy would of itself have been a sufficient reason for taking a Vote to pay for them at their full value. The information given to Dáil Éireann in notes appended to the Supplementary Estimate for Supplies (1941-42) and the subsequent Estimate for that service regarding the availability towards the cost of flour and wheaten meal subsidies of surplus funds of Grain Importers (Éire), Ltd., made it evident that the purchase of shares in Irish Shipping, Ltd., by that Company, which had been announced in connection with the Vote for Shipping (1941-42) had absorbed funds which would otherwise have been available to offset subsequent payments of subsidy. To regard that original purchase as if it were a private commercial transaction, entitling the Company to a corresponding share in the equity of Irish Shipping, Ltd., would have been inconsistent with the treatment of the purchase moneys as the equivalent of public funds, besides ignoring the provision for ultimate surrender of any surplus assets of Grain Importers (Éire), Ltd., to the Exchequer. Moreover, it appeared desirable that the cost of flour subsidy in 1943-44 should not be depressed below the true amount by a payment of an extraneous character from a special Vote. While the Minister appreciates the Committee’s concern to ensure that Dáil Éireann should be given prior notice of transactions involving the acquisition of shares for the State, he desires to assure them that the procedure criticised in this instance was not adopted with any object of concealment but because, for the reasons stated above, it appeared to be, in all the circumstances, the preferable course to follow.

ARMY

Paragraph 15.—Payment of Consolidated Ration Allowance to Officers.

Under revised arrangements introduced on the 1st July, 1946, Consolidated Ration Allowance is issuable on the furnishing by the Officer of a monthly certificate declaring that, during the month concerned, rations in kind were not issued to him and that he had not any claim for nightly rate of subsistence allowance or commuted subsistence allowance except on certain dates specified by him.

In connection with the introduction of the revised arrangements a circular was issued by the Quartermaster General to all Officers pointing out that, in future, the onus of furnishing correct certificates was placed on the Officer claimant and that the greatest care should, therefore, be exercised by all Officers in making their claims on the new form. It was also intimated that inaccurate or false claims would lead to immediate disciplinary action against the offender.

It is hoped that the action taken will obviate a recurrence of the irregularities referred to by the Committee. As there is no reason to suppose that there has been any laxity or carelessness on the part of Officers in furnishing any other certificates which form the basis of payments from public funds, the Minister for Defence considers, and the Minister for Finance concurs, that the issue of a general instruction as to the necessity for ensuring the accuracy of such certificates is not necessary.

Paragraph 17.—Harbour Dredging Operations.

The Minister notes that the Committee cannot regard as satisfactory the arrangements made in connection with the project. While he agrees generally with the view of the Committee he wishes to point out that the increased unit cost of the operations was attributable mainly to circumstances which could not have been provided for in the agreement or which could not reasonably be expected to have been foreseen at the time the agreement was entered into, viz.:—

(i) The fact that the Harbour Commissioners concerned objected to the use of the dumping ground situated within the harbour, resulting in a reduction in the number of loads which could be removed each day and the restriction of such removals to occasions when weather conditions were favourable.

(ii) The peculiar quality of the mud which reduced the efficiency of the suction apparatus on the dredger and resulted in the dredging having to be performed mainly by the grab.

(iii) Adverse weather conditions.

The Minister is, moreover, disposed to regard as being not unreasonable the explanation furnished by the Department of Defence as to the failure to detect the defects in the dredger before taking it over and also as to the failure to raise the question of including in the agreement a reservation as to the Department’s liability to make good undisclosed defects.

In all the circumstances the Minister has accorded his covering sanction for the expenditure involved.

Paragraph 18.—Disposal of surplus stores.

The surplus stocks of the stores referred to in this paragraph have been sold. There has been no avoidable delay in the disposal of other surplus Army and Air-raid Precautions stores.

Paragraph 19.—Air-raid Precautions—Grant to an essential undertaker.

In view of the doubt expressed by the Committee the question of the admissibility of the charge for overheads was submitted to the Attorney-General, who advised as follows:—

1. The purpose and effect of regulation 4 (S.R. & O., 1940, No. 180) is to recoup the essential undertaker for the net cost incurred by him in carrying out the A.R.P. scheme.

2. I do not doubt that the expenditure approved by regulation 4 includes all items of cost incurred by the undertaker in carrying out the scheme even though some of them can only be arrived at by accountancy, e.g., depreciation of machinery.

3. In the complex working system of to-day I think that the net expenditure authorised by regulation 4 can only be arrived at by adding a proportion of overhead charges to the actual cost of wages and materials.

4. In the case here in question no element of profit was included and the percentage of overhead charges allowed was that which the undertaker had based on his general costing experience. I think that was a reasonable way of arriving at the net expenditure authorised by the regulation.

PUBLIC WORKS AND BUILDINGS

Paragraph 20.—Default of a contractor for the erection of a National School.

The Minister is informed by the Commissioners of Public Works that, the legal issues involved having been referred to the Law Officers, these officers have expressed the opinion that the Commissioners were incorrectly advised regarding the release of the sureties from liability, but that the sureties were discharged from all further obligations once the Commissioners acting on the advice received entered into a settlement with the contractor.

The Law Officers have further advised that the Commissioners could not legally have withheld payment of the sum of £59 16s. 0d. referred to by the Committee and that the payment of this money was right and proper.