Committee Reports > List of Committees > Dáil > 1954 > Committee of Public Accounts > Report - Appropriation Accounts 1951 - 1952

REPORT

PART I.—GENERAL OBSERVATIONS.

MINUTE OF MINISTER FOR FINANCE DATED 2nd OCTOBER 1953.

Public Works and Buildings.

1. The Committee notes that the dredging plant has now been sold for £10,111, and that the loss incurred on the whole transaction amounted therefore to about £2,400.

Changes in Estimates.

2. The Committee notes the reasons which led the Minister to prefer the present format of subhead B. of the Estimate for Public Works and Buildings. It is of opinion, however, that the detailed information formerly given on subhead B. should be available to the Dáil when the Estimates are being considered. It would be glad, therefore, if consideration were given to this aspect of the matter.

Superannuation and Retired Allowances.

3. Though the Committee is not wholly satisfied that it would be unreasonable to require an officer who had been awarded a lump sum under the Superannuation Acts to surrender it on resumption of pensionable employment, as such cases are infrequent, and in view of the Minister’s statement that the practice of allowing its retention is of long standing and is not repugnant to the Superannuation Acts it does not wish to pursue the matter further.

Public Works and Buildings.

4. The Committee is glad to learn that the Minister is satisfied that up to the time it was abandoned progress on the scheme of construction of workshops at Clondalkin was not unsatisfactory, and that in view of the alternative use to which the site has been put the expenditure of nearly £9,000 incurred thereon is unlikely to prove ineffective.

Local Government.

5. The Committee notes that steps are being taken to regularise the position regarding the method of calculating the non-statutory contributions payable to local authorities in recoupment of the additional loan charges arising from the increase in the rate of interest on certain loans issued from the Local Loans Fund. It will be glad to be informed, in due course, when a decision in the matter has been reached.

PART II.—PARTICULAR ACCOUNTS.

External Affairs.

6. The Irish News Agency was set up in 1950 under the Irish News Agency Act, 1949, and advances totalling £75,000 at 31st March, 1952, have been made to the Agency under Section 11 (1) of the Act from voted moneys. Section 11 (2) prescribes that advances to the Agency shall be repaid upon such terms and conditions as the Minister for External Affairs with the consent of the Minister for Finance may think proper. The Committee was informed that since its inception the Agency had been running at a loss, and, consequently, terms and conditions for the repayment of advances had not been determined, and also that, so far as could be foreseen, the Agency would continue to operate at a loss for some years to come. The Committee feels however that the advances should not be allowed to accumulate from year to year without any basis for repayment having been determined. In view of the statutory provisions it considers that even though there is no immediate prospect of any repayment being made by the Agency the terms and conditions of repayment of each year’s advances should be determined with as little delay as possible, and in any case not later than the end of the following financial year.

Science and Art.

7. A collection of Irish Volunteer medals was acquired for the National Museum at a total cost of £935 of which £685 was charged to a special subhead opened with the sanction of the Department of Finance, and only £250 against the account of the grant-in-aid for the purchase of specimens although a balance of £299 remained in this account at the close of the financial year. A note to the estimate stated that issues from the grant-in-aid would be paid over to the relevant grant-in-aid deposit account and that any amount remaining unexpended out of the sums issued during the financial year would not be liable to surrender at its close. It is well recognised that the Department of Finance has no power to authorise the application of savings on ordinary subheads of a vote to increase a grant-in-aid subhead not subject to the normal rule regarding the surrender of any unspent balance, but the Department is not precluded if the circumstances are urgent and the grant-in-aid fund exhausted, from authorising the application of savings on other subheads of the vote to a particular purchase and the opening of a special subhead to record the expenditure. The Committee is of opinion that this procedure should be resorted to only when it is not possible owing to the time factor to seek the authority of Dáil Éireann for an increase in the grant-in-aid subhead.

The Committee was informed that museum purchases are greatly restricted by the maintenance of the grant-in-aid at the present low level of £500, and that it would be most undesirable in the interest of the National Collections to exhaust the balance completely at any particular time as moneys must be readily available for essential purchases, the necessity for which frequently arises unexpectedly. It is unable to accept this view as it sees no reason why the authority of the Department of Finance could not be obtained at short notice for the opening of a special subhead if it were urgently necessary to complete a purchase.

Industry and Commerce.

8. The Committee has had under consideration the subsidy paid to Grain Importers (Éire) Ltd. in order to control the price of flour and to regulate the earnings of the milling industry which are based on a percentage of an agreed figure representing the fixed capital employed together with the cost of providing temporary capital in excess of the agreed figure. It appeared that such temporary accommodation as was required by individual millers was obtained through the Banks at normal commercial rates, the average rates charged in the period 1942-43 to 1949-50 varying between 4.63% and 4.87% and the question was raised whether more favourable terms might not have been obtainable in view of the fact that the interest payments were, in effect, guaranteed by the State. The Committee was informed that no approach had been made to the Banks as no formal State guarantee had been given. It considers, however, that the fact that the State was undertaking ultimate responsibility for the interest payments was a factor which might have operated to influence the terms on which the loans were granted. It suggests that this aspect of the matter might be further considered by the Departments concerned.

9. Provision was made in the original estimate of the vote for the Irish Tourist Board for 1951-52 accounted for by the Office of the Minister for Finance, for a grant-in-aid of £45,000, being the maximum amount payable to the Board in any financial year under Section 15 of the Tourist Traffic Act, 1939. The final instalment of this grant was paid in September, 1951. An additional grant of £27,000 was provided in March, 1952, by Supplementary Estimate, it being indicated on the face of the Estimate that payments would be made from the vote in excess of the limit specified in Section 15 of the Act of 1939, a Bill for the amendment of which was then before Dáil Éireann. The Tourist Traffic Act, 1952, which was enacted in July, 1952, provided inter alia for the payment to the Board, in respect of the financial year ended 31st March, 1952, of such sums not exceeding £27,000 as it should require in addition to the sums provided under Section 15 of the Act of 1939.

The attention of the Committee was directed to advances of £10,000 and £7,000 which were made by the Department of Industry and Commerce, to the Irish Tourist Board and Fógra Fáilte, respectively, although the votes accounted for by that Department did not include any provision for advances to these Bodies. These advances were repaid by the Board after it had received the additional grant of £27,000 provided in the supplementary estimate. The accounting officer of the Vote for Industry and Commerce stated that the Board had been informed in June, 1951, with the agreement of the Department of Finance, that it could proceed on the assumption that additional funds would be made available before the end of the financial year, also that a Bill to provide increased financial assistance for tourist traffic purposes had been introduced in the Dáil at the beginning of 1951 and that it was considered essential that the two Bodies should be provided with funds to enable them to carry out their functions, pending the introduction of a supplementary estimate. He maintained that since the public faith was pledged and the advances were made with the agreement of the Minister for Industry and Commerce and the knowledge of the Government the procedure followed amounted to only a technical irregularity.

The Committee finds itself unable to accept this view. It considers that since public faith was pledged as early as June, 1951, the Department had ample time to arrange for the introduction of a supplementary estimate before the date of the advances. If for any reason this could not have been done, the moneys available in the Contingency Fund could have been utilised. In any case responsibility for arranging for the provision of funds for tourism rested with the Office of the Minister for Finance, which at the time accounted for the vote for the Irish Tourist Board. Having regard to all the circumstances the Committee wishes to record its opinion that the temporary use of departmental balances by the Department of Industry and Commerce for the purpose cannot but be regarded as a serious irregularity.

Public Works and Buildings.

10. The Committee of Public Accounts in its report dated 26th February, 1953, on the Appropriation Accounts for the year 1950-51, referred to the fact that stocktaking of machinery and stores held by the Commissioners of Public Works for use on arterial drainage schemes had not been carried out since 1947, and stressed the importance of the periodical check of stores for the purpose of ensuring adequate control. The Committee has now been informed that the store records have been written up and that the physical check of stocks is proceeding. It notes that the delay in completing this work is explained by the Accounting Officer as due to shortage of accommodation, shortage of staff, and the sudden expansion of drainage activities, but nevertheless it is not satisfied that the physical stock-taking of these valuable stores and plant could not have been carried out with greater expedition. It trusts that this work will be completed at an early date and it wishes to be informed of the results in due course.

Posts and Telegraphs.

11. The Committee is informed that owing to the partial railway strike which continued from 18th December, 1950, to 1st February, 1951, the rail service for the conveyance of letter mails was interrupted but no adjustment of the annual payment made to Coras Iompair Éireann for this service was effected. It appears that the formal contract with the Company had ceased to have effect from 1941 owing to the difficulties of the emergency period and that since then the arrangements have rested on exchanges of correspondence, it being understood that the annual amount payable should be reviewed in the event of any material increase or decrease in the services rendered by the Company. In this case it was estimated that the amount which might have been claimed for the non-performance of rail services during the strike period would have been very largely offset by the Company’s counterclaim for the cost of providing alternative road services, and the Department of Finance agreed that no adjustment of the annual payment need be made in the circumstances.

Whilst the Committee raises no objection to the action taken it deems it desirable that in a continuing service of this magnitude the contractual position of the parties concerned should be clearly defined and it trusts that the earliest opportunity will be taken to have a formal contract completed.

Defence.

12. The question of the recovery of articles of clothing and equipment in the possession of ex-members of An Fórsa Cosanta Áitiúil and the absence of regulations governing the general issue and control of uniform clothing of An Fórsa, to which reference was made in the report on the accounts for the year 1947-48, was again reviewed by the Committee. It notes that the draft regulations are still under consideration, that difficulty in recovering clothing and equipment continues to be experienced, and that the assessed value of items unrecovered from members who were discharged or became ineffective in the years 1946 to 1951, inclusive, was over £15,000. The Accounting Officer stated that the absence of regulations did not contribute to the losses, which are regarded as inseparable from voluntary organisations. While the Committee accepts this view, it considers that formal regulations covering the whole field of issue and control of uniform clothing for An Fórsa Cosanta Áitiúil are none the less essential and it trusts that it may be possible to have them promulgated at an early date.

13. A register of State properties administered by the Department of Defence has not yet been compiled, nor have arrangements been made for a periodic perambulation of the properties. The Committee referred to the absence of such a register in its report on the accounts for the year 1936-37, when it was informed that the question of the responsibility for the administration of State lands and buildings occupied by the Department of Defence but vested in the Office of Public Works was under consideration by the Department of Finance. It now understands that appropriate arrangements could not be made for the compilation of a register until a pending State Property Bill, in which power would be taken to vest the lands in the appropriate Minister of State, had been enacted. In view of the risk of loss to public funds arising from the absence of a complete register of properties and of regular perambulations the Committee feels that every effort should be made to have the position regularised at an early date.

Unemployment Insurance and Unemployment Assistance.

14. The Committee was informed that the cost of the internal audit of unemployment assistance and unemployment benefit carried out by the Department of Social Welfare was not justified by the results obtained, that this audit had been suspended and that there was about to be introduced instead a mechanised system of control and check which was expected to be more efficient and more economical. It was also informed that all employment exchanges and all branch employment offices are subjected to test inspections at which payments of unemployment assistance and unemployment benefit are closely scrutinised. The Comptroller and Auditor General explained that the nature and scope of his audit was governed by the character of the departmental examination and that if the new system of control fulfilled all the expectations of the Accounting Officer the position would be satisfactory from his point of view. The Committee appreciates the efforts being made to reduce the cost of departmental administration, and it trusts that the new system will be brought into full operation as quickly as possible.

Miscellaneous Social Welfare Services.

15. Under the Education (Provision of Meals) Acts, 1914 to 1930 local authorities are repaid from voted moneys one-half of the net expenditure incurred by them in providing meals for children attending national schools in their areas, subject to the expenditure having been incurred in accordance with the relevant statutory regulations. The net expenditure is arrived at by deducting from the gross expenditure sums received as contributions from parents or from voluntary sources. Article 8 of the regulations states that food shall not be supplied free of cost except to children whose parents or guardians are unable from their own resources to provide such food or to contribute towards the cost of the provision thereof. The Committee was informed that the Article was still in force but was not generally operated owing to the difficulties of imposing a means test and that it was only in a few areas that small sums were occasionally collected in payment for meals. The Accounting Officer stated that this matter was under discussion with the principal local authority and that if it was found not practicable to collect contributions the Minister for Social Welfare would probably consider legalising the present position by amending the regulations. The Committee feels that earlier consideration should have been given to the problem arising from the difficulty in applying Article 8 and that a decision either to implement in full or to amend the regulations should now be treated as a matter of urgency.

Agriculture.

16. The Commissioners of Public Works, acting as agents for the Department of Agriculture, placed an order in March, 1951, for six excavators for use on certain river improvement works to be undertaken by them in connection with the Land Rehabilitation Project. Four tenders for suitable machines, varying in amount from £30,936 to £51,125 were received. In view of the desire of the Minister for Agriculture that the works should proceed as rapidly as possible the highest of these was accepted as it was the only one which provided for completion of delivery as early as May, 1951. However, the first machine was not delivered until October, 1951, and the sixth until May, 1952. The Committee notes that the Commissioners’ report on the preliminary engineering survey of the river improvement works was not received by the Minister for Agriculture until February, 1952, and that in view of the estimated costs he decided to postpone the work pending further consideration. It was subsequently decided to use the plant on the drainage schemes being carried out by the Commissioners under the Arterial Drainage Act, 1945. The Committee, however, cannot regard as satisfactory the fact that grounds of urgency were adduced for the acceptance of the highest tender when plans for the commencement of the work were quite undeveloped. It cannot understand why it was considered necessary to order the machines for delivery in May, 1951 when the report on the preliminary engineering survey of the works and the estimated costs could not be made available until February, 1952.

17. Regulations made by the Minister for Agriculture in May, 1950, under the Dairy Produce Act, 1924, prescribed a form of wrapper to be issued by the Minister for use by registered creameries for the wrapping of creamery butter for sale off the ration. Although a decision to discontinue the issue of the official wrappers was taken on the 4th May, 1951, an order issued to the Stationery Office for the supply of nine tons of vegetable parchment was confirmed on 31st May, 1951, and an order for the printing of 2¼ million wrappers was issued in the following November. The Accounting Officer stated that the decision of 4th May, 1951, was a temporary one and was due to the low level to which butter stocks had fallen. Efforts had been made to procure quantities of imported butter and it was intended to re-introduce off-ration sales when the supply position had sufficiently improved to warrant that course, but before this could be done the Minister for Finance in his budget statement on 2nd April, 1952, announced that the rationing of butter would be discontinued from 5th July, 1952. The Committee was informed that 30 tons of vegetable parchment, costing £9,541, and approximately 3¼ million printed wrappers remained on hands following the abolition of butter rationing, and that whilst the parchment was likely to be readily saleable, difficulty might be experienced in disposing of the wrappers. Whilst it appreciates the necessity of having stocks of wrappers available in anticipation of the probable re-introduction of off-ration sales it finds it difficult to understand why the order for 9 tons of parchment was confirmed having regard to the stock of thirty tons remaining on hands after the abolition of the rationing of butter, and it desires to be informed in due course of the results of the efforts being made to dispose of the surplus stocks.

(Signed) W. A. W. SHELDON,

Chairman.

18th February, 1954.