Committee Reports > List of Committees > Dáil > 1952 > Committee of Public Accounts > Report - Appropriation Accounts 1949 - 1950

REPORT.

PART I—GENERAL OBSERVATIONS.

OUT-TURN OF THE YEAR.

1. The Committee notes with satisfaction the close approximation of the expenditure on supply grants, in the year under review, to the Estimate, the amount falling to be surrendered being 1.7 per cent. of the supply grants. During the ten years 1939—40 to 1948—49 the percentages of savings on net Estimates ranged from 9-8 for 1948-49 to 4.7 for 1943—44, the average for the ten years being 6.6. The figure of 1.7 per cent. for 1949-50 represents therefore a considerable improvement as compared with the preceding years, and the Committee trusts that every effort will be made to maintain this standard of estimation in the future.

Minute of Minister for Finance dated 20th December, 1951.

PUBLIC WORKS AND BUILDINGS.

2. The Committee notes that an immediate decision had to be taken on the proposal to purchase from Aerlínte Éireann the lease of its New York premises and that the circumstances of urgency precluded any discussion with the Commissioners of Public Works, It notes also that these premises were regarded by senior officers of the Department of External Affairs who inspected them as more suitable for the Consulate-General than the premises in the Chrysler Building, and that Aerlínte Éireann had received other offers, the acceptance of which would have insured the Company against any loss. It has, however, not been made clear to the Committee whether premises equally suitable for the purposes of the Department of External Affairs could have been secured at less expense. It desires also to place on record its view that the procedure followed in this case is open to objection as not affording adequate safeguards against the waste of public moneys. It considers that whenever circumstances render it impossible for the Commissioners of Public Works to carry out inspection of buildings abroad prior to purchase, at least a technical report on the property should be made available for their consideration.

AVIATION AND METEOROLOGICAL SERVICES.

3. The Committee is glad to learn that the position regarding equipment and stores issued for use at Dublin Airport has now been definitely ascertained and that arrangements are being made to keep adequate accounting records in future.

NATIONAL HEALTH INSURANCE.

4. The Committee notes that the Minister for Social Welfare has now given certificates covering the amounts expended by all public assistance authorities in connection with payments under Article 3 of the Social Welfare (Substitutive Allowances) Order, 1948, and that the provisional payments made to these authorities in respect of the expenditure have, where necessary, been adjusted accordingly.

PART II—PARTICULAR ACCOUNTS.

PUBLIC WORKS AND BUILDINGS.

5. Dredging plant, which was in a bad state of repair, was purchased from a local authority in March, 1948, for £6,000 and it was estimated that the unit could be made serviceable by the purchase of auxiliary craft, and by necessary repairs, at a cost of £33,000. The purchase was sanctioned by the Department of Finance subject to the condition that a scale of charges which would ensure the recovery of the capital outlay would be fixed for the use of the plant. It appears that the necessary auxiliary craft could be procured only at a figure considerably in excess of the estimate and that expenditure of approximately £126,000 would be required to fit the plant for service. In these circumstances, and having regard to the heavy hiring charges which would be required to recoup the capital outlay, the question of abandoning the proposal to make the unit effective and disposing of it by sale is under consideration.

The Committee is concerned to find that the purchase was undertaken without reasonably accurate information regarding the ultimate cost of making the unit serviceable. It notes that expenditure amounting to £4,306 was incurred to 31st March, 1950, on towage, dry-docking and watching charges and that continuing charges at the rate of £600 per annum are being incurred for watching. It trusts, therefore, that an early decision will be reached on this matter.

DEFENCE.

6. The regulations relating to army mechanical transport allotted to units of An Fórsa Cosanta Aitiúil provide that where it is established that loss of or damage to a vehicle is due to negligence on the part of a member of An Fórsa, the entire loss should be borne on unit funds. The Committee was informed that the Department of Defence considers that the charge against unit funds in such cases should be reduced to a maximum of 25 per cent. of the cost of repairs. It understands that this view has not yet been accepted by the Department of Finance, and that the amendment of the existing regulations is being discussed by the two Departments. Meanwhile each case is being dealt with on its merits, account being taken of the state of the funds of the unit concerned. The Committee will be glad to be informed when a decision on the matter has been reached.

7. Premises for the accommodation of a local unit of An Fórsa Cosanta Aitiúil were purchased in September, 1948, for £850 but it was found that they could not be occupied until extensive repairs, renovations and decorations, estimated to cost approximately £3,000 had been effected. In these circumstances the sanction of the Department of Finance was obtained for the sale of the property. Efforts to dispose of it were, however, unsuccessful, and the Committee was informed that it is proposed to transfer it to another Government department. The Committee was also informed that the premises had been vacant for about fourteen years prior to September, 1948, and it is not satisfied that an adequate examination was carried out before negotiations for purchase were entered into. It trusts that, in future, steps will be taken to ascertain the precise condition of premises before they are acquired.

SUPREME COURT AND HIGH COURT OF JUSTICE.

8. The attention of the Committee was directed to the provision by supplementary estimate in 1940—41 of a sum of £2,500 for an advance to make good certain deficiencies in estates of minors. The deficiencies were caused by defalcations of a General Solicitor for minors, who died in 1938, and a note to the supplementary estimate stated that an Order of Court would be sought for recovery of portion of the advance from the estate of the deceased General Solicitor, and that legislation would be introduced to provide for the recoupment of the balance to the Exchequer from other sources. The expenditure against the provision was £2,252 4s. 0d. and a sum of £482 4s. 6d., received by way of dividend from the estate, was brought to account in 1949—50 as an exchequer extra receipt, leaving a balance still unrecouped of £1,769 19s. 6d.

The Committee was informed that in pursuance of the undertaking given to the Dáil when the supplementary estimate was introduced, a Bill was drafted with the object of recouping the Exchequer from dormant balances in the High Court Suitors’ Fund. It was ultimately decided, however, that the utilisation of dormant Court balances for the purpose of making good losses by defalcations of public officials would not be in accordance with accepted procedure and the principles of public finance, and the proposed legislation was not proceeded with.

The Accounting Officer suggested that the matter could be brought to a conclusion and the attention of the Dáil drawn to the position by the insertion of a note in the next Appropriation Account. The Committee feels, however, that in all the circumstances and in view of the note to the 1940—41 estimate, the question of obtaining the authority of the Dáil for charging the amount in question as a final payment should be considered.

LOCAL GOVERNMENT.

9. Section 16 of the Housing (Amendment) Act, 1948, provides for the payment of grants towards the cost of reconstructing houses in their own occupation to agricultural labourers and other persons who derive their livelihood solely or mainly from the pursuit of agriculture. Attention was drawn to cases in which grants under this section were made to persons occupying houses in urban areas and engaged in non-agricultural employment in these areas. The Committee was informed that the Department was advised that, in view of the extended definition of the term “agricultural labourer” contained in the Housing (Amendment) Act, 1941, the persons concerned were legally entitled to receive the grants by reason of the fact that they were persons working for hire whose services could be freely dispensed with. Having regard to the legal advice the Committee is not prepared to dispute that the payments in question are properly chargeable against the Vote. It considers, however, that the position as disclosed opens a field of expenditure which could scarcely have been contemplated when the legislation was being enacted and it suggests that this aspect of the matter should be considered in connection with pending housing legislation.

AVIATION AND METEOROLOGICAL SERVICES.

10. The agreement entered into by the Minister for Industry and Commerce with the catering controller at Shannon Airport provided for the exchange between them of signed copies of the inventory of furniture and equipment supplied by the Minister to the catering service. There appears to have been considerable delay in the preparation of this inventory, but the Committee is glad to note that signed copies have now been exchanged.

The Committee was informed that no stocktaking of the furniture and equipment has been carried out for some considerable time, and notes the assurance of the Accounting Officer that steps have now been taken to have this position rectified.

Qns. 737-749 and 753-755.

11. Excess expenditure of £173,162 was incurred on a provision of £300,000 under Subhead O., and was met out of general savings on the vote by the exercise of virement. A note to the Appropriation Account explained that the excess was due mainly to a decision by the Department of Finance to recoup Aer Rianta Teo. in respect of the losses amounting to £118,377 of Aerlínte Éireann for 1948-49 instead of meeting them from the profit of £457,000 realised on the sale of the latter company’s assets. The Committee was informed that this amount has been transferred as a loan, free of interest, to the Department of Finance.

The Department of Finance took the view that the profit realised on the sale of the company’s assets was a windfall and in the nature of a capital profit, and that it would be a concealment of the true position to reduce the revenue losses of the company by applying it in relief of them, the proper course being to show what the true revenue losses were, and ask the Dáil to vote a subsidy of that amount.

The Committee does not wish to comment on the treatment of the profit of £457,000. It feels, however, in view of the very considerable excess of expenditure under Subhead O. over the sum provided and as it could be met only from general savings on the vote and not from savings on another subhead or subheads of a like purpose or kind, that the authority of the Dáil should have been sought by means of a Supplementary Estimate for the additional amount required.

TRANSPORT AND MARINE SERVICES.

12. Section 18 of the Transport Act, 1944, provides that moneys required from time to time by the Minister for Finance to meet payments under the State guarantee of debenture stock of Córas Iompair Éireann shall be advanced from the Central Fund and that sums so advanced shall be repaid by the company within twelve months from the date of the advance. The section also provides that where repayment has not been made as prescribed any amounts outstanding shall be repaid to the Central Fund out of moneys provided by the Oireachtas and, further, that such repayment from voted moneys shall not exempt the company from the liability to repay, with interest, the full amount of any advance made from the Fund.

Provision was made by supplementary estimate for payment of £4,091,000 to Córas Iompair Éireann and this sum included non-repayable grants of £561,347, to enable the company to repay to the Central Fund sums previously advanced on foot of interest on debenture stock under Section 18, and £209,000 to meet current debenture interest. The Comptroller and Auditor General drew attention to the fact that the procedure followed in making these grants to Córas Iompair Éireann was not in accord with the terms of Section 18 of the Act in so far as they were issued as non-repayable and the amount required for current debenture interest was not advanced from the Central Fund. The Accounting Officer in the course of his evidence stated that this procedure was adopted with a view to giving the Dáil a complete picture of the existing position of the company and contended that while the Act provided for one procedure it did not preclude an alternative and that the procedure adopted was subsequently legalised by the Appropriation Act. The Committee cannot accept without qualification the view that it is open to the Dáil to vary or modify the provisions of a statute by way of a supplementary estimate which afterwards receives confirmation in the Appropriation Act. It is strongly of opinion that such a procedure should be used as rarely as possible and then only to meet a temporary emergency. Where such an emergency arises the fact that the proposed vote overrides an existing statute should be clearly stated on the face of the estimate with the reasons for adopting that course, so that no doubt can exist of the deliberate intention of the Dáil.

(Signed) W. A. W. SHELDON,

Chairman.

20th March, 1952.