Committee Reports > List of Committees > Dáil > 1952 > Committee of Public Accounts > Report - Appropriation Accounts 1950 - 1951

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Dé ardaoin,4ú Meán Fhómhair,1952.

Thursday,4th September,1952.

The Committee sat at11a.m.

Mr. W. E. Wann (An tArd-Reachtaire Cuntas agus Ciste), Mr. M. Breathnach and Mr. C. J. Byrnes (An Roinn Airgeadais) called and examined.

VOTE 38—GOVERNMENT.

Mr. J. Garvin called and examined.

665. Chairman.—Paragraph 44 of the Report of the Comptroller and Auditor General reads as follows:—

“Subhead I.1.—Contributions towards Housing Loan Charges of Local Authorities.

Non-statutory contributions amounting to £55,495 15s. 2d. were made during the year towards loan charges on certain loans, advanced from the Local Loans Fund to local authorities, in recoupment of the additional charges incurred on subsidy housing schemes by reason of the increase from 2½ per cent. to 3¼ per cent. per annum in the rate of interest, prescribed by the Local Loans Fund (Rate of Interest) Direction, 1948 (Statutory Instrument No. 158 of 1948). Contributions towards loan charges of local authorities under the Housing (Financial and Miscellaneous Provisions) Acts, 1932 to 1949, account for the remainder of the charge to the subhead, £673,913 14s. 5d. In addition, grants totalling £3,183,568 towards the cost of housing schemes were made to 78 local authorities out of the Transition Development Fund.

I am in communication with the Accounting Officer regarding the basis on which the non-statutory contributions referred to above were calculated.”

Have you anything to add, Mr. Wann?

Mr. Wann.—With regard to the final sub-paragraph, the advances from the Local Loans Fund are repaid by fixed annuities over a term of years. The non-statutory contributions are calculated by the Department as the difference between the interest content in the loan charges at 3 ¼ per cent., the new rate. and what it would have been at the old rate, 2½ per cent. It seemed to me that the Department of Finance sanction contemplated payment of contributions based on the difference between the total amount of loan charges now payable and what is would have been if the Local Loans Fund rate had remained at 2½ per cent. The difference between the two bases is considerable. In one case, for example, that of the Kilkenny Corporation, the Department’s basis warranted a payment of £1,544 in respect of the three years 1948-49, 1949-50 and 1950-51, whereas the excess loan charges actually paid for those three years over those which would have been payable on the old basis is £1,166 approximately, a difference of £378. I have been informed by the Accounting Officer that the Department has no objection to adopting the method of calculation based on loan charges but could not do so unless particulars of the loan charges at 2½ per cent. and at 3¼ per cent. were supplied by the Commissioners of Public Works; and the matter is being taken up with the Commissioners in conjunction with a review of the present arrangements for payment of the subsidy.

666. Chairman.—Have you anything to express, Mr. Garvin?

Mr. Garvin.—We are in the hands of the Commissioners of Public Works, as indicated by the Comptroller and Auditor General. The Comptroller and Auditor General has been informed that the method adopted by the Department for calculating the special interest subsidy involves higher payments initially but that in respect of the period over which the loan charges operate the initial increase would tend to be cancelled out and there would be no loss to State funds in respect to the period as a whole. It seems to us a rather complicated method that the local authorities should individually have to pay the 3¼ per cent. rate in full in connection with the loan charges and then, on the basis of a subsequent calculation made in the Government Departments, be recouped in respect of the difference covered by the special subsidy. It would seem simpler that the Commissioners of Public Works, in respect of these subsidised loans, should reckon the rate of interest at the net figure and that the provision in our Vote in respect of the subsidy should be transferred over to the Commissioners of Public Works. We have made that suggestion to the Office of Public Works and either that or the request referred to by the Comptroller and Auditor General, that we be informed in advance, will enable us to comply with the views of the Comptroller and Auditor General.

Mr. Wann.—I agree that the position would be equalised if the subsidy were continued over the whole period of the loan, but there is no guarantee that the Dáil will vote the subsidy every year.

667. Chairman.—Has Mr. Breathnach anything to say from the Department of Finance point of view?

Mr. Breathnach.—We are awaiting a proposal from the Board of Works and we favour the simpler way of doing this.

668. Chairman.—What do you mean by the simpler way?

Mr. Breathnach.—Recouping the Board of Works rather than recouping the individual local authorities.

669. Chairman.—I do not quite follow the difference. How does it arise that there is, in fact, a difference in the amount? According to the Comptroller and Auditor General local authorities are actually getting more than they would if the ordinary subtraction were used. What is the basis of the calculation? How is the recoupment to the local authority worked out?

Mr. Breathnach.—I have not gone into it but I take it that there are two annuity calculations—one at 3¼ per cent. and one at 2½ per cent.—rather than simply taking the difference between 2½ per cent. and 3¼ per cent.

670. Chairman.—How does this excess referred to by the Comptroller and Auditor General arise, could you say, Mr. Garvin?

Mr. Garvin.—I take it that the annuities at the two rates of interest show a difference as compared with our calculation of a simple ¾ per cent. rate of interest in respect of the amount outstanding in the first years of the loar.

Mr. Wann.—The position is that the local authorities are actually getting more than the additional annuity they are paying.

Mr. Garvin.—So it would seem, in the first years of the loan.

671. Chairman.—For how many years would you say this would operate?

Mr. Garvin.—I take it that the interest content of the diminishing balances would tend to diminish and that that represents the difference.

672. Chairman.—Probably after halfway?—The period is 50 years.

673. That would mean that for something around about 25 years local authorities would actually be getting more?—So it would seem.

674. That does not seem a very happy position?—As I say, we are prepared to accommodate ourselves to any other method of calculation simpler or more accurate, but we cannot indicate in advance for the purpose of our estimates what the subsidy should be, based upon the method suggested by the Comptroller and Auditor General, unless we are informed in advance by the Commisioners of Public Works what would be payable in respect of a 3¼ per cent. rate of interest and what would be payable in respect of a 2½ per cent. rate. The method by which we get it from the Board of Works now is post factum. If they can tell us in advance we can provide in advance; or, alternatively, the method suggested by me and Mr. Breathnach could be adopted, namely, that we would subsidise the Local Loans Fund instead of subsidising the local authorities in recoupment.

675. You will forgive me but I do not quite follow. I take it there are two methods of calculating—that that is the difficulty rather than who is subsidised?— Yes.

676. Personally I cannot see why, supposing there is to be a loan of £1,000,000, it is not perfectly easy to arrive at the difference between what Would be charged at the 2½ per cent. rate and what would be charged at the 3¼ per cent. rate?—We are in correspondence with the Commissioners of Public Works on that. They manage the Local Loans Fund. We wrote to them last April inquiring if particulars could be given showing the loan charges on the issues from the fund at the interest rates of 2½ per cent. and 3¼ per cent. We also suggested simplifying the procedure so that moneys borrowed from the fund in the period should be calculated at an annuity rate of 2½ per cent. and local authorities assessed at that rate and a demand made half-yearly on the Department of Local Government for payment of an amount representing the difference between what the annuity represents and the instalments of loans issued. I am awaiting the result of an examination of the official reply from the Office of Public Works and of some semi-official discussions with their officers.

677. The only thing I am not clear about at the moment is how it arose that under the method of calculation actually used more apparently was given than should have been?—The method adopted by the Department was simpler—to calculate at the rate of ¾ per cent., which is the difference between the gross rate and the subsidised rate, and issue from our Vote the appropriate amounts to the local authorities concerned in recoupment of the rate of 3¼ per cent. which they pay on advance from the Local Loans Fund. That has given rise to the difficulty pointed out by the Comptroller and Auditor General. We are prepared to adopt alternative methods if given the opportunity.

678. What will happen about payments already made which are apparently in excess?—They are in excess initially but can be adjusted immediately if the Department of Finance so requires, or they could be adjusted over a period.

679. One other point: What period is covered by these loan charges?—Fifty years.

680. That is the repayment period?— They started in 1948.

681. When is there a final date?—I have no idea. As has been pointed out, this is provided for in successive years by vote of the Dáil.

Mr. Wann.—I think that the Finance authority authorised the payment of subsidies on the borrowings from the 4th May, 1948, up to a “Current date” —is it February, 1950?

682. Chairman.—Perhaps Mr. Breathnach could tell us what is meant by “current date”?

Mr. Breathnach.—We hope to review it so as to charge the appropriate rate of interest. We are not committed indefinitely to subsidising interest in this fashion. This is really a rather elastic term “current date”—it means as soon as we can get the Department to agree with us that a full economic rate can be charged.

Chairman.—It is a sort of euphemism? —Yes.

683. Chairman.—I presume, Mr. Gavin, that between the Department of Local Government and the Department of Finance this matter can be threshed out; but I still do not see why a calculation of ¾ per cent. should give rise to this difference?

Mr. Garvin.—It is calculated de facto upon the estimated commitments in respect of the loans for the year in question, whereas the annuities are worked out on tables for the whole 50-year period. I take it that that accounts for the discrepancy.

684. You will understand that we cannot feel very happy when we find more has been paid than appears to the Comptroller and Auditor General to be correct. All we can hope at the moment is to get this matter threshed out and next year it may be all right?—Yes, I hope that the matter will be fully settled before we discuss it again.

685. Chairman.—The first sub-paragraph of paragraph 45 of the Report by the Comptroller and Auditor General is as follows:—

“Motor Tax Account.

A test examination has been applied to the Motor Tax Account with generally satisfactory results. The certificates and reports of the Local Government Auditors who examine the motor tax transactions of local authorities were scrutinised , in so far as they were available, but in eight cases, including one relating to the previous year, this audit had not been completed at the date of my test examination.”

Have you anything to add to that, Mr. Wann?

Mr. Wann.—I understand that the, position is that four of the cases for 1950-51 are still outstanding and also a case relating to 1949-50.

686. Chairman.—What has happened about this case, Mr. Garvin, that is so much in arrears?

Mr. Garvin.—Our audit arrears are made up of current arrears in respect of which the greater portion of the current year’s audits would not yet be completed. Then there would be others extending into the financial year preceding that, and some few in respect of the year before that again. It is a question of how far our audit staff can cope methodically with the audit work. If an auditor is sent to a particular town that may be a county town, he may have a big county council account to do. A smaller urban audit in another part of the county might have to await completion of work in the county town. There are all sorts of difficulties like that. We are not quite satisfied that the audit staff is at the necessary strength and we are, in fact, having the staff reviewed with a view to increases to cope with the arrears. They are doing good work and expeditious work, but the audit staff as a whole inform me that the number of transactions in the accounts of local authorities are getting greater and more complex every year.

Chairman.—As a member of a local authority I can well understand that.

687. Deputy Brady.—Is it a matter of personnel, that you have not enough personnel, or is the hold-up at the local authorities’ end?—There is no complaint about the local authorities that I am aware of. There is one question of personnel, that is, that we had a grade of assistant auditor, and it meant bringing in unqualified persons who would have to spend a long time gaining experience. We now intend to suppress that grade and increase the ordinary audit staff with new recruits, being men with experience already.

688. In other words, that grade would have slowed up the procedure?—It would have.

689. Chairman.—What sort of scale pay are your auditors on?—They have a scale which rises to a fairly satisfactory maximum, but it is a very long scale and the point of entry is rather low. That was one of the reasons for having this junior grade of assistant auditor. We hope to have that adjusted some time also.

690. Chairman.—Most people know that anyone who goes in for accountancy in ordinary commercial life enjoys a highly remunerative position, and certainly I was looking at the scales suggested for auditors, not in your Department, but in some of the other Departments, and how you manage to get anyone interested in auditing on those scales, I do not know. That is a hint to the Department of Finance. The second part of paragraph 45 is as follows:—

“The gross proceeds of motor vehicles, etc., duties in 1950-51, including £37,857 18s. 1d. attributable to fines collected by the Department of Justice, amounted to £2,838,763 8d. 2d. compared with a total of £2,644,197 15s 8d. in the previous year. Fees amounting to £6,237 15s. 0d. received on behalf of the Commissioner of the Garda Síohána under the Road Traffic Act (Parts VI and VII) (Fees) Regulations, 1937 (Statutory Rules and Orders, No. 92 of 1937) are also included in the receipts. A statement of the gross and net receipts of the Motor Tax Account, and of the payments thereout to the Exchequer, appears on pages 6 and 7 of the Finance Accounts, 1950-51.”

That is for information, Mr. Wann?

Mr. Wann.—Yes.

691. Chairman.—There is a very considerable excess on subhead B.—Travelling Expenses—Mr. Garvin. I see that it is largely due to the acceleration of housing activities?

Mr. Garvin.—Yes.

692. Could you not have foreseen that considerable increase on this subhead? I think the amount asked for was exactly the same as in the previous year?—Yes

693. Yet, the Local Authorities (Works) Act, which was going to affect it, came into law in July, 1949?—I may inform the Committee that I did foresee it, and I asked for a higher provision. However, it was decided elsewhere to leave it at the level of the previous year. I was quite certain at the time that it would be exceeded.

694. In respect of subhead F.F.— Expenses of Committee on Road-surfacing in relation to Horse-drawn Traffic— is not this report published now?—Yes, Mr. Chairman, Administrative effect had, in fact, been given to a number of recommendations contained in it, before it was published. There were difficulties with regard to the personnel of the Committee vacating offices held at the time of appointments and difficulties which retarded publication of the report.

695. I take it that the excess under I.2 was due to the Department’s expectation that people would avail more of the scheme under I.3?—I think, in fact, the idea was that they might elect to go in for the letting grants. But the bodies. concerned—building societies and companies—felt that the conditions attaching to letting grants would prove more onerous than would pay them to avail themselves of those grants in lieu of the smaller grants they were getting without any conditions.

696. In respect of I.5, has any progress been made with this competition for designs for housing schemes?—The difficulties which have been referred to in successive years proved so persistent and so insuperable that it has been decided to abandon the competition.

697. Was the competition more on the subject of layout rather than the design of the particular houses?—It was for both. There was to be a city scheme, an urban scheme down the country and a rural scheme, both in regard to location of site and the planning of layout to harmonise with the countryside and also with regard to the internal design of the houses. These competitions were intended to produce plans which would be models for local authorities in respect of the three different types of designs. We had a number of professional men on the Committee together with persons of administrative experience. There was to be an advertisement offering specific prize money with fees to follow in respect of the carrying out of the scheme. The question of fees for architects and engineers for such scheme and for local authority schemes generally was the subject of controversy at the time. So, I am afraid, the deliberations of the Committee were retarded by the knowledge of the existence of that controversy. As time went on we felt that a great deal of the individual knowledge of people such as those who were on the Committee had already been made available to local authorities and their advisers in the design of housing schemes and that as much would not be gained in the year 1952 and succeeding years by the holding of these competitions as might have been gained if they had been held in 1948. In view of the delay and the difficulties we decided to write off the provision.

698. I have seen some local authority housing and I think it is a pity that the competition has been abandoned because there are times when the layout of the houses is very far from perfect . Sometimes extraordinary things turn up. Is this £7 3s. 4d. the only charge on the subhead?—There will be other liabilities arising out of the existence of the Committee, but the exact amount of them has not yet been determined.

699. Deputy Carter.—What became of the design of Mr. Synnott, the County Manager for Wexford? He had a standard design for a house that could be built at, I think, £900. Did he ever submit that to the Department?—There has been correspondence about various designs in Wexford but, in respect of urban houses in Wexford, I am aware that the actual schemes carried out involved a much higher expenditure than £900 per house. If you got an unserviced rural cottage for £900, you would be doing very well at present prices.

700. I agree, but did he submit that design to the Housing Section of the Department?—I could not say how it stands at the moment. I know that we have had designs from several areas, including Kerry, which are lacking in various types of amenities which most people expect to get nowadays. An effort is being made to get them to expand their ideas, to some extent at any rate. We do not want them to follow the more expansive and expensive ideas, but we are trying in Wexford to get a compromise between luxury and sub-standard designs.

701. Chairman.—In regard to subhead N.—Text-book on, and Revision and Codification of, Local Government Law—that is another item which does not seem to be proceeding very fast?—All that is retarding the book, Mr. Chairman, is the perennial difficulty of printing. It is in the hands of the printers. It may be out early next year.

702. Will that include complete codification of local government law?—No, it is merely introductory to that work, but that also has proceeded and, in fact, it has reached the stage when the draftsman can get to work on it. I am glad to be able to report considerable progress.

703. That is good and very desirable? —The work is still behind closed doors at the moment but good progress is being made.

704. Deputy S. Collins..—Under the item Miscellaneous of the Appropriations in Aid, I note that the estimated figure was £17 and that £709 2s. was the amount realised. How did that come about?—I think it probably represents overpayments.

705. On page 98 of the Appropriation Accounts the note in relation to this item states: “Receipts realised include refunds of housing grants”?—That would arise out of the review of the final position of a scheme. If a Transition Development Fund grant were made in respect of houses that showed a loss and subsequently a gain—houses given to better-class tenants instead of to tenants removed from slum clearance areas— adjustments would arise in such a case.

706. That would mean a refund of the capital grant?—Yes, of portion, and similarly some private house grants would be due to be refunded.

The witness withdrew.

VOTE 27—AGRICULTURE.

Seán Ó Broin called and examined.

707. Chairman.—Paragraph 22 of the Comptroller and Auditor General’s Report reads as follows:—

“Subhead E.2.—Veterinary Research.

Provision was included in a Supplementary Estimate for the purchase of a farm, etc., at Abbotstown, Castle-knock, County Dublin, for use as a veterinary research laboratory and the charge to the subhead includes sums amounting to £38,850 in connection therewith. The purchase was sanctioned by the Department of Finance subject to the conditions that the farm at Brownsbarn, Clondalkin, which was purchased for this purpose in November, 1946, would be sold, that the residence and out-offices on the property now acquired could be converted to meet the Department’s veterinary research needs for ten to 15 years and that the cost of conversion would not exceed £10,000. I understand that the farm at Brownsbarn was disposed of in 1951-52.”

Mr. Wann.—Brownsbarn farm was sold in May, 1951, at, I think, a small profit.

708. Deputy S. Collins.—I wonder could you tell us what the profit was?

Mr. Wann.—I have not got the figure.

Mr. Ó Broin.—We paid about £22,000 for the farm and we got £23,500 for it.

709. Chairman.—I wonder, Mr. Ó Broin, could you say how much has been spent on the conversion of Abbotstown Farm?—So far, there has not been very much spent. We had a discussion with the Department of Finance about the sum of £10,000, and that held up progress for a while, It will cost considerably more than £10,000 to adapt the place and to make it suitable for a veterinary laboratory. Now we have authority to go ahead, and we are proceeding.

710. Deputy S. Collins.—How long will the conversion take?—We do not know. We are trying to go ahead as fast as we possibly can, because we find the existing veterinary laboratory at Thorndale to be quite inadequate and unsuitable. Therefore, we are anxious to get out of the place and to get established in Abbotstown.

711. Chairman.—Paragraph 23 of the Comptroller and Auditor General’s Report states:—

“Subhead G.3.—Improvement of Poultry and Egg Production.

Apart from remuneration and travelling expense of staff amounting to £10,543 12s. 10d. and expenditure of £7,380 11s. 9d. on equipment for poultry technicians, advertising, etc., the expenditure on this service consisted of grants towards the cost of providing accommodation and equipment for poultry-keeping and of subsidies on sales of day-old chicks. Grants paid directly amounted to £58,044 16s. 5d., comprising £2,031 12s. 10d. towards the establishment or extension of commercial hatcheries, £37,247 towards the establishment or extension of approved hatching-egg supply farms, poultry stations and pedigree poultry breeding farms and £18,766 3s. 7d. towards the cost incurred by ordinary poultry keepers in providing accommodation for adult birds. Subsidies paid to licensed hatchery owners on sales of day-old chicks totalled £109,394 8s. 5d. Also, £16,722 10s. 0d. was paid to certain County Committees of Agriculture in recoupment of grants made by them to ordinary poultry keepers towards the cost of chicken houses and equipment and £325 in respect of special premiums paid to private breeders of pedigree stock.

Fees amounting to £2,594 6s. 0d. for poultry hatchery licences, etc., are brought to account as Appropriations in Aid.”

Mr. Wann.—That paragraph is informative.

712. Chairman.—I take it that the figure of £109,394 8s. 5d. which was paid as subsidies on day-old chicks includes the Gaeltacht scheme?

Mr. Ó Broin.—It does, Sir.

713. The subsidy for the Gaeltacht is much higher?—That is so. It is 17/6 per dozen of chicks supplied to the Gaeltacht areas as against 5/- per dozen in the ordinary course.

714. Have you got separate figures for the Gaeltacht scheme?—I have figures here for the four seasons 1948-49 to 1951-52. The numbers of chicks distributed to Gaeltacht areas during those seasons are as follows: Connemara, 278,600; Donegal 427,200; Mayo, 115,000; Clare, 83,000; Kerry, excluding the Bere Peninsula, 249,000; and the Bere Peninsula, 39,000.

715. That is quite a lot of chicks. Have you any evidence as to the effect of this scheme on poultry in the Gaeltacht areas? —Well, evidence of a very general kind. It must have the effect of keeping up the stocks of good-class poultry.

716. Was it not Rhode Island Reds, for the most part, that were distributed to the Gaeltacht areas?—That is so.

717. I was travelling in Donegal recently, and I must say that I have never seen such a mixed lot of chicks. I wondered where the Rhode Island Reds had got to?—The figures I have given show that a large number—close on 500,000—Rhode Island Reds were distributed in Donegal.

Perhaps they were very carefully hidden away.

718. Deputy S. Collins.—They would probably be disposed of by now. Would they not, Mr. Ó Broin?—I do not think that would be general.

Chairman.—One would imagine that, Rhode Island Red chicks having been issued in considerable numbers to a certain area, most of the hens in that area would be of this particular breed.

719. Deputy S. Collins.—It seems that the Department have no evidence to satisfy themselves that this particular breed of hen is the best?—It is the view of our poultry experts that this breed is very suitable as a dual-purpose bird.

720. Chairman.—It is very hardy, and it makes a good table bird as well as being a good layer. The people of Donegal take a very poor view of the prices offered to them for table birds. They do not get anything like the price they should get because their county is so remote?—The price for poultry on the British market has slumped considerably. The price up to fairly recently was satisfactory enough, but in recent months it has gone down.

The people of Donegal were never satisfied with the price they were getting for poultry.

Deputy S. Collins.—It must not bear any relation to the retail price we have to pay for them.

721. Chairman.—We will now turn to the first portion of paragraph 24 of the Comptroller and Auditor General’s Report which reads:—

“Subhead I.3.—Scheme to encourage the Commercial Production of Glass- house Crops in Gaeltacht Areas.

Reference was made in previous reports to the placing of contracts for the erection of central buildings and glasshouses in Counties Donegal and Galway. Further payments amounting to £5,000 were made in the year under review, bringing the total amount paid on foot of these contracts to £101,234 19s. 0d. on 31st March, 1951. The charge to the subhead also includes £500 for architect’s fees and £5,542 14s. 2d. for remuneration and travelling expenses of staff and general expenses.”

Have these contracts been completed?— The contract has been completed in Connemara but there are some small jobs still outstanding in Donegal. These are jobs which we think should be done by the contractor who, however, does not see eye to eye with us in that point. We are at present trying to settle the difference.

722. Have you yet got any figure to show what the final cost would be?—I have not got the precise estimate of the final cost with me, but the sum stated here by the Comptroller and Auditor General must approximate very closely to what the final figure will be.

723. Deputy S. Collins.—This will complete the present envisaged scheme. Is there any extension envisaged?—The question of another scheme is under consideration at the moment. It has been suggested that there should be a scheme for Kerry similar to this one.

I was wondering would you yet be in a position to give us an indication of the economic value of that scheme from the experience of it in the areas in which it has been working.

724. Chairman.—The remainder of paragraph 24 reads as follows:—

“Each grower for whom a glasshouse was erected entered into an agreement to repay £150 of the cost, with interest at 2½ per cent. per annum ,by annual payments of £20 or 10 per cent. of the net proceeds of the crop, whichever was the less, and to bear a proportion of the running expenses of the scheme. In the 1950 season, tomato plants propagated in the central buildings were transferred to 195 glasshouses and approximately 200 tons of tomatoes were marketed, the net proceeds of sale being £13,290 11s. 8d., of which £8,886 6s. 2d. was paid to the growers and £4,383 12s. 0d. credited to Appropriations in Aid in the year under review and £20 13s. 6d. in the year 1951-52. The liabilities of the growers in respect of the 1948,1949 and 1950 seasons were not fully discharged at 31st March, 1951, and I have asked for information as to the total amount outstanding on that date.”

Mr. Wann.—I am informed that the liability of the growers outstanding in respect of the three seasons at 31st March, 1951, was: for 1948, £372 7s. 2d.; for 1949, £681 14s. 6d.; and for 1950, £373 10s. 9d. The Department of Finance has agreed to the deferment of the collection of these amounts.

725. Chairman.—Could you tell us what the earnings per house were in Galway and Donegal?

Mr. Ó Broin.—They varied between very wide limits. In 1948, for instance, there was a payment to one grower in Connemara of £168 1s. 9d. In 1949 there was a payment of £103 7s. 0d. which was the highest payment in that year. In 1950, there was a payment of £90 6s. 0d., and in 1951 a payment of £152 5s. 0d. The lowest payments in Connemara during the same years were: £45 in 1948; £30 in 1949; £30 in 1950; and £29 16s. 10d. in 1951.

726. The figure charged to the growers, £4,383 12s. 0d., seems very high?—That includes not only the repayment of the principal and interest, in accordance with the arrangements made, but also their share of the local running costs. There are expenses involved at the local propagation stations in the purchase of seeds, manures and the employment of staff, packers and local labour.

727. Deputy S. Collins.—How did the tomatoes turn out from the point of view of uniformity, size and quality?—There is a great variety. Some have been very badly hit by disease. That applies particularly to Donegal.

728. Chairman.—You mention that you charge principal and interest. Does that affect these arrears?—Yes. The arrangement made in respect of these three years was that we would not deduct from the net returns of the growers a sum that would leave them a net return below £30. If, say in the year 1950, the net return were £32, we would deduct only £2 instead of one-tenth.

729. Deputy Brady.—Are these arrears mainly in respect of people who are good producers or those who do not produce very much?—From people whose net returns were low. We did not want to bring the net returns below £30.

730. Or people who do not put the same effort into it?—It may be partly that and partly because they are more unfortunate than others. In the case of some growers in Donegal houses have been badly hit by disease, a matter over which they have no control. This result was in no way contributed to by lack of care or skill.

731. Deputy S. Collins.—Is there any kind of uniformity of effort amongst the owners of the glasshouses?—There is a certain amount of it naturally. As is the case with practically everything, there is a certain amount of difference between the skill, care and attention shown by some people as compared with others.

732. Where, say, a glasshouse realises a profit of £100, has it been your experience that that was invariably the result of the owners being more diligent and more expert?—That combined with the fact that their houses were more fortunate to escape disease.

733. Chairman.—When the growers are charged, say, £20, is that all they are charged in respect of the loan?—I think that, in practice, the £20 hardly ever arises. The deduction is 10 per cent. of the net proceeds.

734. Is that all you charge them?— That is all they are bound to pay in the year, 10 per cent. of the net proceeds or £20 whichever is the lesser sum. I do not think we have had many cases where we had a charge of £20. In most cases the charge has been 10 per cent. of the net proceeds.

735. Does that include the interest?— Yes, that is to cover both the interest and some of the principal as well. If a man paid, say £12, £4 would be put against the interest and the rest would go towards a reduction of the capital.

736. Deputy S. Collins.—What proportion of the sum deducted is credited to the cost of the running of the central propagation station?—That has to be worked out in each case each year.

737. What would be the maximum percentage charged against the net yield of the crop?—The figures given here in the Comptroller and Auditor General’s Report would be a fairly good indication of that, something about £4,000 out of £13,000.

738. That is a fairly high charge. Is that charge likely to decrease or is it one that will remain static?—The charge in respect of the local running expenses has to be retained, of course. At present, growers are not paying all the expenses of the local staff. We have a horticultural instructor at the centres and his salary and travelling expenses are borne on the Vote and are not paid by the growers.

739. Chairman.—Paragraph 25 of the Report of the Comptroller and Auditor General reads as follows:—

“Subhead M.M.5.—Special Temporary Scheme of Loans for the Purchase of Cattle and Sheep.

The charge to the subhead, £3,217 13s. 10d., represents sums paid to the Agricultural Credit Corporation, Limited, in respect of the cost of administering the special scheme of loans made to assist farmers who suffered serious and abnormal losses of cattle and sheep as a result of severe weather conditions in the early months of the year 1947. The loans are free of interest and are repayable in four instalments spread over a period of four years. Sums amounting to £79,044 19s. 7d. received during the year in repayment of the loans are included under subhead R.—Appropriations in Aid. The amount outstanding on 31st March, 1951, in respect of these loans was £83,541 2s. 0d. as shown in the statement appended to the account.”

I take it that the repayment of that money has been highly satisfactory, Mr. Ó Broin?—It has. There were 4,281 loans amounting to £302,775 advanced. The sum outstanding at present is about £400.

740. That is very good. It shows that our farmers are credit-worthy occasionally?—That has been our experience.

741. Deputy S. Collins.—In connection with the charge to the subhead of £3,217 13s. 10d., would the machinery that the Agricultural Credit Corporation set up to administer this scheme have something to do with it? What would be the result if they had dealt with it in the normal way? That sum seems to be a rather heavy charge?—The original arrangement was that they were to get 2 per cent. of the amount of the loans outstanding from time to time to meet their expenses in connection with the running of the scheme. That contribution was paid half-yearly, in November and May.

742. Was that sum to include interest payable by way of service charge by the Agricultural Credit Corporation?—That was to cover all their expenses in connection with the issue of the loans and all the various operations in connection with the work, the printing of forms, and so an.

743. Chairman.—Paragraph 26 of the Report of the Comptroller and Auditor General is as follows:—

“Subhead M.6—Improvement of the Creamery Industry.

As will be seen from the account, no expenditure or receipts arose under this head during the year. The total expenditure from voted moneys to 31st March, 1951, on the improvement of the creamery industry amounted to £1,197,869 5s. 6d. and receipts were £394,873 16s. 11d., leaving a net charge on public funds of £802,995 8s. 7d.

I have the last balance sheet in connection with the Dairy Disposal Company and Associated Companies. It appears to be quite a profitable concern?—Yes, that is so. The accumulated profit amounts to a very considerable sum—£431,990 7s. 7d.*

744. Is there any prospect that this money could be used to discharge the charge on public funds?—The profits are used in the development and running of the business and in replacing assets that have to be replaced from time to time. The company are running the business with their own profits.

745. Deputy S. Collins.—They are certainly not making any effort to speed up the problem for which they were set up —the disposal of the creameries?—I do not know that the Dairy Disposal Company is altogether to blame for that. There is great difficulty in getting people to buy. The question of price arises again. Even when the properties were offered at a reasonable figure there was great difficulty. They failed completely to sell any properties in more recent years.

746. Chairman.—If they could dispose of a property would the final result mean that there would be no charge on public funds?—We should be able to dispose of the properties at figures that would involve no charge on public funds at all except the charges that were originally agreed upon. There are certain things that, under the original arrangements, would have to be borne by the Exchequer—compensation to redundant employees and items of that kind. Apart from these the company should be able to dispose of the properties at figures that would not entail any loss.

747. Suppose that happened and suppose there was a profit, what would happen to the money?—It would accrue to the Exchequer.

748. Chairman .—Paragraph 27 of the Report of the Comptroller and Auditor General is as follows:-

“Subhead M.9.—Potato Reserve Scheme.

The amount, £3,168 14s. 1d., charged to this subhead was paid to the Irish Potato Marketing Company, Limited, in recoupment of losses incurred by the company on the disposal of reserve stocks of potatoes which were purchased to provide against a possible shortage in the early summer of 1950. I am in communication with the Accounting Officer regarding verification of the loss sustained by the company.”

Mr. Wann.—I have been recently informed that, as a result of an independent check, a refund of £203 10s. 7d. has been received from the company. This amount has been brought to account as an Exchequer extra receipt.

749. Chairman.—You do not audit the accounts of this company, Mr. Wann?— No, Sir.

750. Chairman.—How is the audit carried out?

Mr. Ó Broin.—They have their own auditor. They appoint their own auditor just the same as any commercial company does.

751. Mr. Wann refers to an independent check. Was that check made by the Comptroller and Auditor General?— No, by officers of the Department of Agriculture.

752. Deputy S. Collins.—Do your officers ultimately have to verify the charge?—We have to be satisfied that the charge is proper and correct.

753. Chairman.—Is it usual to pay out sums like this before the check has been made?—Normally we would check first but in this case we were anxious to discharge the sum to the company before the end of the financial year. We knew the account had been certified by the secretary of the company. He, although then an employee of the company, is, in fact, a chartered accountant and we knew it was approximately correct and that we were quite safe in paying, subject to the check we afterwards made ourselves.

754. Was there any particular reason why there should have been a variation between the figures?—There was some slight misunderstanding as regards some consignment of potatoes. In some cases the amount chargeable to the reserve fund was overstated and in other cases understated, but the net result was that they overstated the claim by about £200.

755. Is the balance sheet of this company available to Deputies?—I could not say that at the moment.

756. Deputy S. Collins.—Is it a State-sponsored company?—It is.

757. Chairman.—It is non-profit making?—It is.

758. The only point I see is that, while it is non-profit making in the ordinary commercial sense, its expenses might be so high that they might represent quite substantial profit—Yes.

759. Where does it get its funds; it does not get any State subsidy?—No, Sir. It derives its funds from the proceeds of the potatoes it sells.

760. Has the Department any control over that angle?—Two of the Minister’s, officers are members of the board of the company. In that way we have very close contact with the operations of the company.

761. They are still officers of the Department?—Yes, they are part-time directors. The manager of the company is a seconded officer of the Department of Agriculture.

762. Deputy S. Collins.—Then it should be possible to make the balance sheet available to us?—I cannot say offhand what the position is in regard to making the balance sheet available. It is a private company, of course. It is not statutory in the sense that it has not been set up pursuant to any particular statute. Of course, it operates under the Companies Acts the same as any ordinary commercial company.

763. Does it get money direct from the Exchequer?—It gets no money from the Exchequer.

764. Chairman.—Except on an occasion like this?—Where the Department employed the company as an agent for the purpose of operating this reserve scheme.

765. Deputy S. Collins.—Does not the company act as the agent of the Department in connection with these schemes?— The main purpose of the company was to take into its hands the marketing of seed potatoes—that was the principal purpose —so as to give the highest possible price to the growers of seed potatoes.

766. Deputy Brady.—If the company suffers a loss how is it recouped, apart from this case; must it not be recouped for losses?—There may be losses on the ordinary operations but the company must manage them itself. I suppose the handlers and the growers of the seed would ultimately have to bear them.

767. Chairman.—Apparently this company is closely allied with the Department but the accounts are not audited by the Comptroller and Auditor General and do not come before us. I wonder how that arises?—I have not examined that particular point and I cannot tell you straight off.

768. You appreciate that it is a matter of considerable interest to a great many people. What worries me is that, while there may not be a charge to public funds, these people are using for their expenses money deducted from individuals in this country. It is surely a matter of considerable importance to see that there is no waste, that the expense sheet is not unduly swollen?—Yes. Of course, it would be the duty of the Minister’s representatives on the board of the company to see to that.

769. Deputy S. Collins.—Surely subsequent to that we have a right, in discharging our responsibility, to see what the picture is?—I would not like to say anything definite on that without looking into it.

770. Chairman.—We are only responsible for moneys voted by the Dáil?— There are no moneys voted by the Dáil to this company.

771. I would be glad if you would look into it and, if you think it might clear up the position, send us a note on it?—I will.*

772. Chairman.—Paragraph 28 of the Comptroller and Auditor General’s Report reads:—

“Subhead M.10.—Farm Buildings Scheme.

The expenditure charged to this subhead comprised £77,896 7s. 2d. for administrative expenses and £235,419 0s. 6d. on grants for the construction and improvement of farm buildings and for certain allied works. The grants made included £144,050 4s. 9d. paid to rated occupiers towards the cost of newly constructed farm buildings or extensions at rates varying according to the nature of the work undertaken; £22,317 4s. 2d. for improvement, repair or conversion of farm buildings on the basis of 50 per cent. of the approved estimated cost of the labour required, subject to a maximum grant for each building equal to three-fifths of the grant for a new building of the same class; and £69,051 11s. 7d. for other approved works on the basis of 50 per cent. of the approved estimated labour cost.”

773. Deputy S. Collins.—The expenditure charged for administrative expenses seems inordinately high having regard to the sum administered. Have you any observations to make on that, Mr. Wann?

Mr. Wann.—I do not think I have.

774. Deputy S. Collins.—It struck me, Mr. Ó Broin, that the sum charged for administrative expenses, in view of the amount granted under the scheme, seems inordinately high?

Mr. Ó Broin.—It would be misleading to judge this as a permanent feature of the scheme. Sometimes there might be considerable administrative expenses on staff, etc., and the amount of money spent on the works might, for some reason or other, be comparatively small. Various factors, such as bad weather, availability of materials, and so on, enter into the picture. You might have chargeable to a particular year a comparatively small sum for grants but you will have to have the same sum for staff as in a year in which the amount in grants might be considerably higher. In other words, you cannot judge the position on the figures for one particular financial year.

775. Chairman.—At this early stage? —It was in its very early stages then.

776. Chairman.—Paragraph 29 of the Comptroller and Auditor General’s Report, which is informatory, reads as follows:—

“Subhead M.11.—Land Rehabilitation Project and Water Supplies.

The expenditure on this service was made up as follows:—

777. Chairman.—Paragraph 30 of the Comptroller and Auditor General’s Report states:—

“The Land Reclamation Act, 1949, authorised the Minister for Agriculture to carry out land reclamation, field drainage and other works and provided for the payment by the occupiers of a contribution towards the cost, the contribution being payable when the Minister certifies that the work has been completed or, if an occupier has so elected, by means of an annuity. As stated in my last report, an occupier may arrange to have approved work carried out by the Department on agreeing to pay two-fifths of the estimated cost plus the cost of fertilisers supplied, subject to a maximum of £12 per acre, or, alternatively, he may carry out the work himself and receive a grant amounting to two-thirds of the estimated cost, subject to a maximum of £20 per acre less the cost of fertilisers supplied.

A further scheme was introduced in the year under review to enable occupiers of land to obtain supplies of lime and artificial fertilisers on credit, and to have them spread by the Department, with the object of rehabilitating land deficient in soil fertility but not needing the specific works already provided for, i.e., field drainage, etc. It provides for the testing of land to establish its need of lime and fertilisers on payment by the occupier at the rate of 1s. per statute acre. A farmer who elects to avail of this scheme is required to deposit at least 10 per cent. of the cost and to repay the balance by means of an addition to his existing land purchase annuity.”

778. Deputy S. Collins.—I thought that scheme had been devised so that a farmer could get this done without any deposit of 10 per cent.—that he could have the total cost spread over the period of his annuities?

Chairman.—That would be true of the drainage part of the scheme but not of the fertilisers.

Mr. Ó Broin.—The fertiliser scheme is as stated in the paragraph and the 10 per cent. is an essential part of it.

779. Chairman.—Under the fertiliser scheme there is no grant?—No, it is a loan.

780. Deputy S. Collins.—How is the fertiliser scheme working?—It is not being availed of by farmers to a very great extent. Quite a number of them have paid the initial charge for the analyses of soil samples from their holdings at 1/-per acre, and have then gone no further with it. They decided to do the fertilising themselves by distributing manures as it suits them. We have not actually had very much work under that scheme.

781. Deputy O’Sullivan.—I think many farmers are quite unaware of the existence of the scheme. It does not seem to have got the same spotlight as the drainage and the land rehabilitation.

Deputy Carter.—It is publicised by each county in the agricultural officer’s report each year.

Mr. Ó Broin.—There is a good deal of local publicity about it.

782. Deputy S. Collins.—The responsibility for the publicising of it in the final analysis comes down to the County Committees of Agriculture?—No. The responsibility would be ours initially, but naturally the officers of the County Committees of Agriculture give a good deal of publicity to all our scheme. It is part of their ordinary work.

783. I am inclined to agree that somehow or other this scheme has not gone forward to the same extent as the Land Rehabilitation Scheme. Perhaps the 10 per cent. is responsible?—There were quite a number of farmers who started off by getting their soil sampled and then dropped the scheme afterwards.

784. They did not believe your reports, apparently?—They thought it more advantageous simply to take the results of the analysis and use them themselves in their own time and in their own way instead of doing the whole farm in one “go”. They said to themselves: “We can do a bit this year and another bit next year.”

785. Chairman.—Of course, a farmer can get his soil tested without charge?— Yes. He can get his soil tested free through the County Committee of Agriculture.

786. Deputy Brady.—I take it the Department has frequently suggested to local authorities to publicise the scheme?—Yes.

787. Chairman.—Paragraph 31 of the Report of the Comptroller and Auditor General states:—

“The grants to farmers include payments amounting to £4,435 13s. 4d. under a scheme of grants for the installation of water supplies to farm dwellings, introduced during the year. Fifty per cent. of the approved estimated cost of installations was allowed, subject to a maximum grant of £100, but no grant was payable for any work or combination of works estimated to cost less than £10.”

788. Deputy S. Collins.—How is that scheme working?—Moderately well. We have a fair number of applications.

789. Deputy Carter.—Do you find that this scheme works better from a co-operative point of view where the Electricity Supply Board have extended the Rural Electrification Scheme? Are there any cases where a group of farmers might take advantage of the scheme by reason of the fact that rural electrification had been extended to a village, say a group of four or five houses?

Deputy S. Collins.—The grant is not available for groups?

Mr. Ó Broin.—Grants are available for individual farmers but not for groups. Of course, individuals can join together themselves if they so wish. To give the Committee an idea of the extent to which the schemes are being availed of, on the 31st March, 1951, we had about 2,734 cases altogether in which work was actually in progress throughout the country. It is going on moderately well.

790. Chairman.—In my district it is going more than moderately well. Paragraph 32 of the Report reads:—

“I communicated with the Accounting Officer regarding the inadequacy of the system of accounting for the machinery and stores purchased for the Land Rehabilitation Project, and was recently informed that the difficulties attendant on the formulation of a satisfactory scheme of store accounting which were experienced at the inception of the project had been overcome and that an adequate system is now in operation. The position will be reviewed in the course of the audit of the accounts for 1951-52.”

Mr. Wann.—That is the position. I cannot say whether the system now in operation is satisfactory until the audit for 1951-52 has been completed.

791. Deputy S. Collins.—This is a new type of accountancy and it was apparently impossible to present the accounts in the proper form in the early stages?

Mr. Wann.—There was no adequate system in operation.

792. Chairman.—You could not say, Mr. Ó Broin, if there has been any loss?

Mr. Ó Broin.—I do not think there has been any loss. It was just impossible in the early stages to organise properly a full system of recording. We had all the materials for the records but it was a question of staff, opportunity and time to get the records in proper shape to satisfy the Comptroller and Auditor General. I think they have been organised since in a way that will prove satisfactory.

793. Are there many stores?—This relates to a large store we have taken in Inchicore where we have a certain amount of machinery and a considerable quantity of spares, and also some apparatus for repairing machinery that goes out of order.

794. Deputy S. Collins.—It seems extraordinary that this difficulty should arise. We know from experience that the engineering department of the Post Office has large stores and carries tremendous quantities of spares. Yet they have a foolproof system of accounting. Would it not be possible to get some assistance of that kind?—It was largely a matter of time and of the facilities available. We started off without any experience or staff and then we had to try to get on with the project. I think we have now brought a satisfactory system of accounting into operation.

795. Deputy J. J. Collin.—What type of machinery have you stored there?—We have some heavy machines, excavators and the like.

796. I thought that the contractors were responsible for the maintenance of their machinery?—A good deal of the work is done by contract but we have some machinery which is our own property and which is operated by our own employees. We repair this machinery and for that purpose it is necessary to keep considerable quantities of spare parts.

797. Is the machinery your own property constantly in use?—Yes. In fact the position is we have not enough machinery for all the demands made on us.

798. What would be the strength of the machinery operated by you under this scheme as against that operated by contractors?—There would be more machinery in the hands of the contractors. We have 21 drainage units, which comprise large crawler tractors, drainage ploughs and excavators. We have additional excavators for miscellaneous jobs. Then we have tractors engaged in clearing scrub and clearance work generally—17 of them.

799. You still maintain that there is a shortage of machinery throughout the country?—We are judging by the number of applications we receive and the questions put by Deputies in the Dáil asking for machinery here and there.

800. Deputy S. Collins.—What would be the value of the machinery you have which is your own property?—I would say—this is an approximation—it would be about £350,000.

801. That would involve the keeping of tremendous reserves of spares?—Yes.

802. Chairman.—Have you carried out a stocktaking of the stores?—I think not yet but I cannot say straight off. It is our practice to carry out periodic stocktaking in all our institutions.

Chairman.—All this will come up to be dealt with next year.

803. Deputy J. J. Collins.—The reason I ask these questions now is that it seems that applications have been in from West Limerick and West Kerry for the last two years?—Yes, because there is not enough machinery.

804. It is a type of machinery that is not readily available?—It is very difficult to get it.

805. Chairman.—Paragraph 33 of the Report of the Comptroller and Auditor General reads:—

“A sum of £2,170 was paid in February, 1950, for a tractor which was loaned by the supplier, with the Department’s permission, to a contractor engaged on land project work on condition that it would be replaced by the supplier within three months. I understand that, owing to supply difficulties, replacement has not yet been effected.”

Mr. Wann.—I understand that the tractor was replaced early this year.

Mr. Ó Broin.—That is so.

806. Chairman.—Was any charge made for the use of this money from the beginning of 1950 up to the beginning of this year—that is, about two years?

Mr. Ó Broin.—No. The tractor had been ordered and paid for by us. We allowed the supplier to sell it to a contractor and in due course the tractor was replaced.

807. In effect the supplier had the use of £2,170 of the Department’s money for two years?—Yes, but a new tractor was supplied at that figure although the price had meantime gone up.

808. Deputy S. Collins.—You bought and paid for the tractor but waived your priority to it and he paid for another tractor after two years?—He bought the tractor and we got another later in replacement from the supplier. He paid the supplier.

809. Deputy Carter.—The supplier was paid twice. He was paid for the tractor delivered two years ago and also paid for the tractor which replaced the one originally supplied.

Deputy S. Collins.—There was only one tractor involved?

Mr. Ó Broin.—There was a set-off in respect of the increase in price. All these heavy tractors went up very much in price within the two years but we got the second machine delivered to us at the original price although the price had gone up very considerably in the meantime.

810. Chairman.—Perhaps you would give us a note as to the value of the tractor at the time it was supplied?— Yes.*

811. Chairman.—Paragraph 34 of the Report of the Comptroller and Auditor General states:—

“Subhead O.5.—Agricultural Produce (Cereals) Acts, 1933 to 1939, and Emergency Powers (Cereals) Orders, etc.

Reference was made in previous reports to arrangements whereby growers who sold wheat of the 1943, 1944 and 1945 harvests were enabled to obtain, in exchange for dockets which they had received from authorised purchasers of the wheat, fertiliser credit vouchers for 2/6 per barrel of wheat sold, and the fertiliser suppliers were recouped the amount of the allowances made by them on submission of monthly claims supported by the relevant credit vouchers. These arrangements continued in operation during the year under review and were extended to growers of the 1946 crop. Including expenditure of £288,358 3s. 9d. charged to this subhead, the total paid to fertiliser suppliers in connection with the redemption of the 1943, 1944, 1945 and 1946 dockets amounted at 31st March, 1951, to £910,740 11s. 5d.

The charge to the subhead also includes a payment of £5,000 to a company in respect of losses incurred on stocks of pedigree seed wheat unsold at the end of the 1948-49 sowing season. Provision for this payment was made in a Supplementary Estimate.”

I notice from the subhead itself that there was a considerable saving; in other words, much less was claimed than you had anticipated?—That is so.

812. It looks as if some farmers had lost their credit vouchers?—I think a number of them must have lost them, mislaid them or forgotten about them. That does not mean that they will not come along at some later stage and claim this money.

813. Even if they are lost?—Even if they are lost we try to identify them as the sellers of the particular consignments of wheat and they have an opportunity of making their claims. It means a good deal of extra trouble for us if people lose their dockets.

814. Deputy S. Collins.—Ultimately it will mean, I take it, that the scheme will drag out longer than anticipated?—It may drag out for a year or two longer.

815. Chairman.—Paragraph 35 of the Report of the Comptroller and Auditor General reads:—

“Subhead P.—Flour and Wheaten Meal Subsidies.

The expenditure on these subsidies amounted to £8,365,000, made up as follows:—

The flour subsidy, paid to Grain Importers (Eire), Limited was the amount required to control the price of flour and to regulate the earnings of the milling industry, which were limited to a percentage of an agreed figure representing capital employed together with the cost of providing any additional capital in excess of the agreed figure. The expenditure comprised £7,833,622 19s. 7d. in respect of losses incurred in connection with the allocation of imported wheat and flour for periods up to the 24th February, 1951, offset by £39,648, being the balance due from the company in final adjustment of subsidy for the cereal year 1947-48 following examination of the millers’ accounts by officers of the Department; £20,626 12s. 11d. for remuneration of importer distributors for wheat handled on behalf of the company in the calendar year 1948; and payments on account amounting to £431,205 8s. 11d., being £219,205 8s. 11d. against losses incurred in the period 25th February, 1951, to 31st March, 1951, £200,000 in respect of provisional adjustment of subsidy for the cereal year 1948-49, and £12,000 for remuneration of importer-distributors for the calendar year 1949.

The subsidy on wheaten meal for the cereal year 1949-50 was paid at varying rates representing the difference between the average cost of production, together with a profit of 2/6 per sack, and the controlled selling price.”

Mr. Wann.—The last cereal year for which a final payment was made to Grain Importers, Ltd., was 1947-48. Only payments on account have been made for the subsequent years.

816. Chairman.—The position now, Mr. Ó Broin, is that this has been taken out of your hands?

Mr. Ó Broin.—Yes.

817. I am sure you are not very sorry to lose it?—It was taken back to the Department of Industry and Commerce in October, 1951. We had it since about 1948.

818. I take it that this is the last year it will crop up in the accounts for the Department of Agriculture?—I think there may be something about it in the accounts for the year 1951-52.

819. Deputy S. Collins.—You will not have much regret in losing it?—It is a very difficult job to examine these accounts and to be sure that the payments claimed are properly payable.

820. Chairman.—I take it that the time lag that has arisen could not be helped?—I do not think so.

821. Chairman.—Paragraph 36 of the Report of the Comptroller and Auditor General states:—

“Subhead Q.—Subsidies, Allowances, etc., for Dairy Produce.

Allowances on the production of creamery butter were payable at such rates as enabled the price of milk supplied to creameries to be maintained at 1/2 per gallon for the period 1st May to 31st October and at 1/4 per gallon for the period 1st November to 30th April. The sums disbursed on allowances on creamery butter produced on and after 1st April, 1950, amounted to £2,666,089 19s. 2d. In addition to expenditure of £2, 532,011 15s. in the year 1949-50 for allowances on creamery butter produced in that year, payments amounting to £254,745 17s. 8d. were made from this subhead during the year under review, bringing the total cost of these allowances for the production of the year 1949-50 to £2,786,757 12s. 8d., as compared with £2,302,842 15s. 9d. for the year 1948-49. The charge to the subhead includes £72,496 10s. 3d. paid to the Butter Marketing Committee in respect of a deficiency in the committee's trading account for the year ended 31st March, 1950, and £40,000 paid on account against an anticipated deficit for the year 1950-51. The remainder of the charge to the subhead comprises £39,037 8s. 8d. paid to creameries in connection with the Department’s scheme for the cold storage of creamery butter and £1,680 1s. for the printing of butter wrappers.”

Mr. Wann.—In previous years the provision for this service was met by a separate Vote.

822. Chairman.—Is it right to say, Mr. Ó Broin, that there was no subsidy on off-the-ration butter?

Mr. Ó Broin.—That is so. The price of off-the-ration butter was the economic price.

823. And the difference was 10d. per lb.?—Yes.

824. What exactly is meant by the words in the Report “a deficiency in the committee’s trading account”? Does that refer to their expenses?—That refers to a point that has cropped up here from time to time. It is attributable principally to the cost of cold storage of butter which the Butter Marketing Committee have been doing in respect of the supply of butter mainly to the Dublin area as well as to some other areas in the country which might otherwise run short of butter. The committee had to look after these areas specially.

825. Deputy S. Collins.—I take it that the committee itself had not cold storage accommodation and had to hire it?—The committee had to buy the butter, cold store it and pay for the storage, since it had no cold storage of its own.

826. Chairman.—Paragraph 37 in the Report of the Comptroller and Auditor General, which is informatory, reads:—

“Regulations made under the Dairy Produce Act, 1924, provide for the use at registered creameries of a prescribed form of wrapper issued by the Minister for Agriculture for the wrapping of creamery butter in rolls for sale off-the-ration. The Butter (Maximum Prices) Order, 1950 (Statutory Instrument No. 135 of 1950) prescribes that creamery butter contained in wrappers issued by the Minister shall be sold at the rate of 3/6 per lb. and in any other case at the rate of 2/8 per lb. The wrappers were sold to creameries at the rate of 10d. each and, as will be seen from the account, receipts amounting to £241,388 9s. 8d. have been brought to account as Appropriations in Aid.”

827. Chairman.—Paragraph 38 of the Report reads:—

“Dairy Produce (Price Stabilisation) Fund.

The income of the fund was made up of £1,373 19s. 5d. from levies, mainly on home sales of creamery butter and raw cheese, and £17,651 3s. 3d. received from catering establishments in accordance with the Creamery Butter (Prices for Catering Establishments) Orders (Statutory Instruments Nos. 355 of 1948 and 130 of 1950) in respect of butter purchased under permit. The Orders referred to prescribed prices for creamery butter sold to catering establishments by virtue of permits issued under Article 9 of the Emergency Powers (Distribution of Butter) Order, 1944 (Statutory Rules and Orders No. 121 of 1944) and provided that payment, on account, should be made to the Minister for Agriculture at the rate of 9d. per lb. on the issue of permits.

The payments out of the fund, £5,898, were made to the Butter Marketing Committee to meet administrative expenses.”

Why was the difference 9d. in this case whereas it was 10d. per lb. in the case of the off-the-ration butter?—In the case of the off-the-ration butter there was an additional cost relating mainly to wrappers which had to be specially procured and printed on special paper.

828. On subhead F.3, would it be possible to avoid overlapping between the Veterinary College and veterinary research which comes under subhead E.2, or are they two separate bodies?—They are two separate bodies and have separate functions. The Veterinary College does a certain amount of examination of pathological specimens sent in by veterinary surgeons. It requires to do that for the instruction of the students. The veterinary research laboratory is engaged on research, the examination of specimens sent to it by veterinary surgeons and the making of vaccines.

829. On subhead H.1.—Grants to County Committees of Agriculture—I take it that the limestone subsidy scheme would have been affected in that year by the ground limestone scheme?—Yes, and also by the fact that the subsidy on burned lime was limited to 15/- a ton.

830. On subhead H.2.—Parish Agricultural Advisory Service—I see that this scheme has been abandoned?—It has been abandoned by the present Minister.

831. On subhead O.6.—Acquisition of land (Allotments) (Amendment) Act 1934—I observe that there has been a fairly considerable amount of expenditure on this as well as on the Vote for the Department of Local Government where the figure is about £7,000 for the actual acquisition of land. Have you any figures to show how many allotments there are, and can you tell us what is the acreage involved?—I have not any figures with me in regard to the acreage, but I can give approximately the number of allotments. The number has been going down in recent years. In 1949, the number of allotments for unemployed persons was 7,111; in 1950, the number was 5,035; and in 1951, 4,546.

832. The expenses seem very considerable in view of the number of allotments involved?—Of course, in addition to supplying free seeds, implements and spraying materials, we also have a special staff of allotment instructors to give instruction.

833. If the number of allotments continue to decrease, I presume you will be able to use some of this staff on other work?—We would have to reduce the staff of instructors if the number of allotments went down appreciably.

834. I notice that at the time of the Supplementary Estimate you anticipated savings on various subheads of about £1,500,000 and that your net surplus to be surrendered was roughly the same amount of money—that is, on the original Vote. There is a saving of very nearly £3,000,000 there. The large savings appear to be on subheads G.3 and M.10 and M.11 which, it was mentioned in the Estimates of that year, would be regarded as capital services. May we take it, therefore, that the savings in this Vote would not materially affect the year’s taxes—that they were all of a capital nature?—The savings on the Vote were mainly savings on capital items such as the land project and were, I think, taken into account in the framing of the Supplementary Estimate. In other words, though they might be regarded as for capital items they were regarded as moneys voted for the particular year. The savings were taken into account in drawing up the Supplementary Estimate.

835. I can see that but, in effect, the savings on the three subheads mentioned in the Vote as being dealt with as capital services amounted to almost £2,750,000 out of a total of £3,800,000 in the original Estimate. Perhaps the representatives from the Department of Finance might be able to clear up this matter for us. What is the precise effect? Further, does it make any difference as compared with the normal voted moneys?

Mr. Breathnach.—It means that you are really borrowing to meet some of the excess expenditure on some of the current subheads. In effect, that is what it means. You are using borrowed moneys to meet that excess.

836. Chairman.—Do you mean instead of the purposes for which it was meant originally?

Mr Breathnach.—Yes.

837. Deputy S. Collins.—Do you mean that you are borrowing from moneys voted to capital expenditure in order to bolster up current expenditure?

Mr. Breathnach.—Yes.

838. Chairman.—In practice, the only excesses on this Vote were £13,900.

Mr. Breathnach.—There was saving on the capital subhead.

839. Chairman.—The saving is on the capital subhead but, does it not in practice, affect taxation?

Mr. Breathnach.—No.

840. Chairman.—With regard to extra receipts payable to Exchequer, pages 61-62, may we take it that the reason for the inclusion of moneys received under the land rehabilitation project as extra receipts rather than Appropriations in Aid is because the project is a capital service?

Mr. Ó Broin..—That is so.

841. I notice on page 69, under Extra Remuneration, what I presume to be a misprint. It is mentioned that a temporary lay inspector received an allowance for the performance of higher duties. If there is not a misprint, these duties must have been of a clerical nature. What is the position?

Deputy S. Collins.—It might have been an unqualified man.

Mr. Ó Broin.—The lay inspectors, as we call them, are assistants to veterinary surgeons. I think that this man was probably performing marketing work which is of a higher character than his ordinary duties.

842. Chairman.—I thought that these higher duties might have been of a clerical nature.

Mr. Ó Broin.—Not in that sense; the distinction here is between lay and professional.

843. Chairman.—I notice on page 70 that fines amounting to over £500,000 were remitted. When the Department of Industry and Commerce were remitting fines they had to bring in a special subhead in order to draw attention to the matter. How does it arise that the Department of Agriculture have only to insert a note in connection with the matter?—In recent years this has largely become a formality. It arises out of an obligation imposed on millers before the war under the Cereals Acts to purchase certain specified quantities of home-grown wheat. During the war and since the end of the war that obligation could not be enforced. Nominally, they have incurred these penalties, but it is recognised that it is purely a technical matter. The fines are more or less automatically remitted after reference to the Department of Finance.

844. Chairman.—My point is that there has been a difference in the treatment of a somewhat similar matter by the Department of Industry and Commerce. They inserted a special subhead in respect of the remission of penalties which were nominal.

Mr. Breathnach.—I think the reason is that the Department of Industry and Commerce had not statutory authority for the remission. Under the Act, the Department of Agriculture have such permission. It was thought desirable to bring the Department of Industry and Commerce case to the notice of Dáil Éireann before remitting it.

VOTE 28—FISHERIES.

Seán Ó Broin further examined.

845. Chairman.—Paragraph 39 of the Report of the Comptroller and Auditor General reads as follows:—

“Subhead F.5.—Compensation, etc.

The sum of £66,000 was provided under this subhead for compensation payable under Sections 35 and 67 of the Fisheries Act, 1939, and for miscellaneous expenses. The expenditure includes £10,595 paid during the year to six owners under Section 35 of the Act which provides for the restriction of the use of nets in freshwater and for the payment of compensation to the owners of nets, and £51 4s. 2d. for miscellaneous expense . No payment of compensation was made during the year under Section 67 of the Act in respect of transferable fisheries.”

What is the basis of compensation?— Roughly, the basis is the value of the fishery and of the business to the persons operating it before the abolition of the rights net in these fresh waters. They have to supply information as to their takings, and so forth, over a period. On the basis of that information, the amount of compensation is assessed. A good deal of correspondence and delay is involved. It is a very tedious job to complete these compensation cases.

846. Where a payment is made, is that final?—Yes.

847. Do the amounts not seem fairly considerable in some cases?—Some of the fisheries were very valuable properties.

848. Deputy Mrs. Crowley.—Are many more cases outstanding?—I have not particulars with me of the precise number of cases which are outstanding, but I think that a good many are still outstanding .The establishment of the legal title in respect of payments of compensation is a tedious process.

849. Deputy Carter.—Are you referring to the owner of fishery rights, say, on the Corrib, and so forth, who would let some of these rights and collect rent in respect of these lettings in any given year?—Yes.

850. I take it that that does not include the Shannon fisheries?—They have been the property of the Electricity Supply Board for some years past.

I notice that the manner in which the Department have dealt with the letting of fishery rights is in marked contrast with the matter of the Shannon fisheries. In my opinion, some of the fishery folk there got a very raw deal.

851. Chairman.—Paragraph 40 of the Report reads as follows:—

“Subhead G.2.—Repayable Advances for Boats and Gear.

Including the advances of £75,000 charged in this account, the total advances for boats and gear to 31st March, 1951, amounted to £313,500. The half-yearly instalments of the annuities set up to repay these advances falling due to 31st March, 1951, amounted to £174,598 5s. 2d. The sums collected by the Sea Fisheries Association from borrowers and transferred to the Department in payment of the annuity instalments amounted to £149,291 5s. 2d., including £12,592 8s. 10d. repaid in the year under review and credited to Appropriations in Aid. The repayments were, therefore, in arrear on 31st March, 1951, to the extent of £25,307 as compared with £18,847 16s. 2d. on 31st March, 1950.”

Am I correct in assuming that the amount in any year which is in arrears is conditioned by the fishery season?— If it is good the payments are fairly good, and so forth. Is that so?—That is so. In addition, there seems to be an inherent weakness in the whole arrangement. I think there is a situation here whereby some part of the arrears can never be overtaken. For instance, you have the case of a man who is purchasing a boat on the hire-purchase system and who fails to pay the appropriate amount of money to enable the advance to be repaid to the Exchequer. When that boat is taken up from him it has to be reissued to somebody else at a different and lower figure. There is, therefore, a gap between the original figure and the figure at which it is issued to the second purchaser. The bridging of that gap becomes nobody’s particular responsibility unless, from their general commercial transactions, the Association managed to make up the deficit. It is a matter which, I think, will have to be adjusted in some way by the new Fisheries Board which is now taking over the responsibilities formerly discharged by the Sea Fisheries Association in respect of hire-purchase arrangements.

852. Chairman.—Paragraph 41 of the Report of the Comptroller and Auditor General reads as follows:—

“Subhead G.3.—Repayable Advances for General Development.

The total advances for general development made to the Sea Fisheries Association amounted to £24,150 on 31st March, 1951, including £3,700 charged in this account. These advances are repayable over a period of 20 years by half-yearly instalments covering principal and interest, and sums totalling £1,143 17s. 4d. were repaid during the year under review and are included in the Appropriations in Aid.”

I take it these advances did not get into arrears?—No, these are up to date.

853. Chairman.—Paragraph 42 of the Report of the Comptroller and Auditor General reads as follows:-

“Fishery Loans.

The balance outstanding on fishery loans on 31st March, 1951 was £20,510 11s. 8d. including arrears of £20,473 1s. 4d. There were no repayments or remissions of loans during the year under review.”

These are very old loans?—These are the very old loans some of them dating back to 1910 or 1912. I think a number of them have recently been written off. The likelihood is that most of them will have to be written off.

854. When it is mentioned that there were no repayments or remissions during the year, do you add interest? the figure does not seem to have gone up very much during the year?—Adding interest to the amount outstanding would be a purely theoretical transaction because the likelihood of recovering any of them is very remote.

The witness withdrew.

VOTE 60—OFFICE OF THE MINISTER FOR SOCIAL WELFARE.

Mr. W. Maguire called and examined.

855. Chairman.—Paragraph 86 of the Report of the Comptroller and Auditor General reads as follows:—

“Subhead A.—Salaries, Wages and Allowances.

The Social Welfare Act, 1950, provided for the dissolution of Cumann an Árachais Náisiúnta ar Shláinte and the transfer of its functions to the Minister for Social Welfare. The 1st August, 1950, was appointed to be the transfer day by the Social Welfare (Dissolution of Cumann an Árachais Náisiúnta ar Shláinte) Order, 1950 (Statutory Instrument No. 182 of 1950). In accordance with Section 7 of the Act persons who immediately prior to the transfer day had been officers or employees of the society were appointed to situations in the Civil Service and such pensionable service as they already had became reckonable as pensionable service for the purposes of the Superannuation Acts, 1834 to 1947. The staff of the society was transferred to the Department of Social Welfare and their salaries, travelling and other expenses were paid from this Vote as from 1st August, 1950. Under Section 16 (1) of the Act a sum of £215,000, representing the costs of administration formerly borne by the society, is to be paid out of the National Health Insurance Fund in every financial year and appropriated in aid of the moneys provided by the Oireachtas for the expenses of administration of this Act and the National Health Insurance Acts, 1911 to 1948. Section 16 (2) of the Act provides for an initial payment of a proportionate part of the £215,000 if the dissolution of the society should take place on a day other than the first day of the financial year then current. A sum of £143,333 6s. 8d. was accordingly paid from the fund during the year under review and has been accounted for as an Appropriation in Aid.”

856. Deputy S. Collins.—Does there not seem to be a big discrepancy here under subhead A?

Chairman.—I think Deputy Collins’s remark applies to two or three subheads. I take it your difficulty was that you had to bring to the notice of the Dáil a sum of £143,230, you could not bring in a negative Vote and you had to show savings whether they really materialised or not?—We had to add a considerable sum-about £20,000 extra—to arrive at the token Vote of £10 which explains the large discrepancy. It takes £22,000 actually out of the excess on subhead A.

857. Deputy S. Collins.—You seem to have a fairly chronic position in regard to staffing?—I do not know that I can agree with that. Perhaps you would elaborate your question.

858. I am just reading here in your explanation to-day that certain vacancies were not filled?—There is always a certain amount of that. We have managed, too, not to fill some vacancies following the transfer over to us of the National Health Insurance Society. That has made a difference also.

VOTE 61—OLD AGE PENSIONS.

Mr. W. Maguire further examines.

859. Deputy S. Collins.—Under subhead A. there is again a big discrepancy?

Chairman.—It is a very small proportion.

Deputy S. Collins.—It may be a small proportion but it is a fairly big sum.

Chairman.—The number of old age pensioners who will die would be very conjectural

Mr. Maguire.—I think this coincides with an epidemic of influenza in the early part of that year. Although the general experience is that the number of old age pensioners is increasing, as a result of that epidemic we had the unusual experience of the number actually going down. I think that explains the reduction here. In any case, it would be quite impossible to estimate more closely what the expenditure figure would be.

860. Deputy S. Collins.—I quite agree. I raised the question because I had an idea that there was something peculiar about that year?—That is so. There was the epidemic.

861. Chairman.—Is there any particular reason why the order of the alphabet has been upset there?—A., B. and C. are the subheads in the Estimate. D. and E. come into the Appropriation Account only.

VOTE 62—CHILDREN’S ALLOWANCES

Mr. W. Maguire called.

No question.

VOTE 63—UNEMPLOYMENT INSURANCE AND UNEMPLOYMENT ASSISTANCE.

Mr. W. Maguire called.

No question.

VOTE 64—WIDOWS’ AND ORPHANS’ PENSIONS.

Mr. W. Maguire called.

No question

VOTE 65—NATIONAL HEALTH INSURANCE.

Mr. W. Maguire called and examined.

862. Chairman.—Paragraph 87 of the Report of the Comptroller and Auditor General reads:—

“Subhead E.—Investment Return.

Section 21 of the Social Welfare Act, 1950, empowers the Minister for Social Welfare to make payments out of the National Health Insurance Fund in respect of expenditure on the acquisition of lands, premises, furniture or equipment or the construction or reconstruction of premises, and provides that an investment return in the form of contributions to the Fund should be made in respect of such payments at rates to be agreed upon from time to time between the Minister for Social Welfare and the Minister for Finance. Such contributions fall to be made out of moneys provided by the Oireachtas. The payments made out of the Fund under this section during the year under review amounted to £416,152 4s. 4d. and, as shown in the account, the amount paid from the Vote to the Fund during the year as investment return was £5, 395.”

This, I presume, is largely Store Street?—Yes. In fact, it is all Store Street.

863. On what basis is the investment return calculated?—It is calculated—this s describing the situation roughly—to restore to the Fund the income which it roses by the Withdrawal from it of capital sums to pay for building or for whatever is bought. It is related to the investment yield of the Fund generally. The prime purpose is to restore the Fund income to the same position as nearly as possible as if capital sums had not been withdrawn for the purpose of these purchases.

864. What rate of interest do you calculate?—The Estimate is prepared on the basis of £3 11s. 0d. per cent. The general yield on the securities of the Fund is 3.7 per cent.

865. There are a lot of different bases in respect to some parts of this money? —An additional percentage is allowed in the case of furniture as distinct from the building. A building is regarded as a permanent article and the furniture is perishable. Therefore, an additional 3.5 per cent. is allowed in the case of furniture to provide for its wearing out ultimately and its replacement.

866. I do not quite follow why that was done?—The building is an asset; it remains all the time, but the furniture will have to be replaced and presumably it will be replaced out of the Fund. In order to build up the Fund again this additional percentage is allowed for perishable articles.

867. I take it that the upkeep of the building itself will be borne by the Office of Public Works?—Yes, that is the ultimate intention.

868. How much has been spent to date on Store Street?—Up to June, 1952, £761,812. I have not a more recent figure, but if the Committee want it, it can be got.

869. That is near enough?—Payments did not fall to be made so rapidly as was anticipated when the Estimate was prepared; that explains the difference between the Estimate and the actual expenditure.

VOTE 66—MISCELLANEOUS SOCIAL WELFARE SERVICES.

Mr. Maguire called.

No question.

The witness withdrew.

VOTE 5—COMPTROLLER AND AUDITOR GENERAL.

Mr. W. J. Kiely called and examined.

870. Deputy S. Collins.—Do you suffer many great hardships from the fact that you cannot fill your staff? I see that vacancies are not filled and that there is a saving of £2,720. Is that because of a shortage of the particular type of technicians needed in your Department?—No, it is because of the delay in filling vacancies. We train our own staff.

871. Chairman.—I think that considering the size of the funds and the amount of work that is done by this Department, the State gets off very lightly in this Vote and even in the emoluments of the Comptroller and Auditor General

Deputy S. Collins.—Even if your staff were complete the State would still be getting off lightly.

Mr. Wann.—The cost of the Audit Office is a very small percentage of the total of the money audited.

The witness withdrew.

The Committee adjourned.

*See Appendix XXII.

*See Appendix XXIII.

* See Appendix XXIV.