Committee Reports > List of Committees > Dáil > 1955 > Committee of Public Accounts > Report - Appropriation Accounts 1952 - 1953

APPENDIX II.

MINUTE OF THE MINISTER FOR FINANCE ON REPORT DATED 18th. FEBRUARY, 1954, OF THE COMMITTEE OF PUBLIC ACCOUNTS.

Paragraphs 1, 3 and 4.

These paragraphs do not appear to call for comment

PUBLIC WORKS AND BUILDINGS

Paragraph 2.—Changes in Estimates.

The Commissioners of Public Works will make available to Deputies, when the Estimate for Public Works and Buildings is being considered by the Dáil each year, a statement showing the total estimated cost of each item under Subhead B and the amount provided therefor in the Estimate.

LOCAL GOVERNMENT

Paragraph 5.—Non-statutory contributions towards certain housing loan charges of local authorities.

Arrangements have been made for the early recovery from local authorities of the over-payment of non-statutory contributions prior to 1st April, 1953, from which date the correct method of calculation has been in force.

EXTERNAL AFFAIRS

Paragraph 6.—Advances to the Irish News Agency.

The Minister has noted the views of the Committee on this matter. Proposals made by the Department of External Affairs are receiving attention but further information will be required before a decision can be reached.

SCIENCE AND ART

Paragraph 7.—Exercise of virement to supplement expenditure by way of Grant-in-Aid.

The Minister has noted the Committee’s views as to the use of virement to increase expenditure on a service normally financed by a grant-in-aid. It has always been the practice that the opening of a special subhead for this purpose should be authorised only in exceptional circumstances and that the grant-in-aid account should be exhausted before any payment is made from the special subhead. The procedure followed in the case under notice was abnormal and the Minister agrees generally with the Committee’s comments on the matter.

INDUSTRY AND COMMERCE

Paragraph 8.—Interest rate on bank advances to flourmillers

The arrangements agreed with the millers for the remuneration of the flour milling industry are set out in Appendix VIII to the Committee’s Report and it is understood that the remuneration is paid over to Grain Importers (Éire), Limited, as agents, to be distributed by them amongst individual millers on a basis agreed between the millers themselves.

If a Government Department had intervened with a view to securing lower rates of interest on temporary borrowings by the millers the banks might well have insisted, as a condition of any concession, on a formal State guarantee of the borrowings to cover each individual case. A decision to offer the banks such a guarantee (assuming it were considered desirable to do so) would involve prior investigation of the financial position of each individual miller. Most of the thirty-six flourmillers carry on businesses besides flourmilling (e.g., as bakers, provender millers, general merchants) and, to be effective, the investigation would have to extend to all the activities of the mills and would have to be repeated at intervals.

A State guarantee of borrowing by a private concern normally involves a first charge on all the available assets of the borrower and consequential restrictions on the application of the borrowed moneys, if not, indeed, on the conduct of the borrower’s business generally. Such a procedure would have embarrassing effects on the normal trading activities, apart from flourmilling, of the firms concerned and would also require the establishment of an elaborate system of supervision and control in the Department of Industry and Commerce which could not be justified unless the result were to be a substantial saving in subsidy payments. It seems clear from the information already furnished to the Committee that, having regard to interest rates generally, the saving, if any, which would result from the introduction of a State guarantee would not be significant.

The Minister is satisfied that it would have been difficult to devise an arrangement satisfactory both to the banks and the State because of the substantial and fluctuating amounts involved and the varying circumstances, financial and otherwise, of the individual mills.

Paragraph 9.—Advances made to the Irish Tourist Board and Fógra Fáilte.

The Minister is in agreement with the Committee’s opinion that the temporary use of departmental balances by the Department of Industry and Commerce for the purpose described cannot but be regarded as a serious irregularity.

It has already been explained to the Committee, and the Minister attaches much weight to these considerations, that it was agreed policy—to implement which legislation had been introduced—that additional payments should be made in the year under review to the Irish Tourist Board and to Fógra Fáilte and that the Department of Industry and Commerce found itself unable to give effect to that policy in the circumstances of the time otherwise than by the action which it took, with the approval of the Minister for Industry and Commerce, who had brought the position to the notice of the Government. The Irish Tourist Board was in urgent need of money to meet commitments undertaken by it with official approval and it was in these exceptional circumstances that the temporary advances from the Vote for Industry and Commerce were made. The Department of Finance was not, however, asked for its approval before the advances were made.

While the Minister desires to reassure the Committee in regard to the transactions under notice, he considers that they raise a general issue of importance, particularly as regards the plea of necessity advanced in justification of the irregular use of departmental balances. Accordingly, he wishes to restate the principle that moneys voted for the service of a department must not be utilised by that department, even temporarily, to defray expenses outside the ambit of that Vote—unless in respect of agency transactions which are within the department’s normal functions or specially approved by the Department of Finance. The need for adherence to this principle, as the Committee has indicated, does not rest on technical accounting requirements but is an essential feature of the system of financial control. The Minister proposes, therefore, to direct the special attention of all Accounting Officers to this general point of principle governing the use of parliamentary grants.

PUBLIC WORKS AND BUILDINGS

Paragraph 10.—Stocktaking at workshop and stores.

The Minister notes the view of the Committee that the physical stocktaking might have been carried out with greater expedition. He is aware, however, that many difficulties were encountered during the process and he has been assured that every effort is being made to bring the stocktaking to early completion. The Committee will be informed of the results in due course.

POSTS AND TELEGRAPHS

Paragraph 11.—Conveyance of letter mails by rail.

Having regard to the views expressed by the Committee, the question of having the contractual position more clearly defined is being pursued by the Department of Posts and Telegraphs. The Minister understands the matter is complex and may occupy some considerable time.

DEFENCE

Paragraph 12.—Issue and control of uniform clothing of An Fórsa Cosanta Aitiúil.

A comprehensive Defence Force Regulation governing the issue and control of uniform clothing of An Fórsa Cosanta Aitiúil has now been made by the Minister for Defence.

Paragraph 13.—Register of State properties.

The Minister notes the view of the Committee. The enactment of the State Property Bill, 1954, will facilitate the transfer to and vesting in the Minister for Defence of property at present administered by his Department but vested in the Commissioners of Public Works and will enable any doubts to be removed as to whether or not particular lands are vested in the Minister for Defence. On its enactment, steps will be taken to determine what properties should be placed permanently under the control of the Minister for Defence and to compile a register and initiate a system of perambulation of such properties.

UNEMPLOYMENT INSURANCE AND UNEMPLOYMENT ASSISTANCE

Paragraph 14.—Control and Check of Payments of Unemployment Insurance and Unemployment Assistance.

The Minister has been informed that the mechanised system of control and check is already in partial operation—covering about one half of the payments of benefit and assistance. Arrangements are in train to put the scheme into full operation.

MISCELLANEOUS SOCIAL WELFARE SERVICES

Paragraph 15.—Grants under the Education (Provision of Meals) Acts, 1914-1930.

The Department of Social Welfare has informed the Minister that it would be difficult to devise a system capable of measuring with the necessary precision the ability of parents to pay a daily contribution and that even if a means scale could be devised its application would present difficulties not the least of which would be those of obtaining full information and of carrying out the constant and costly review necessary to follow fluctuating means. The collection of contributions would also present difficulties. The cost of the system necessary to apply a precise means test and to ensure collection of contributions would be excessive having regard to the results likely to be achieved and the application of an elaborate means test might result in the position that virtually all the children at present receiving meals would be found to be eligible. The supply of meals in the case of the Dublin schools—which are responsible for almost 90 per cent. of the expenditure—is based on certificates furnished by the Managers that the children concerned are in need of the meal and to this extent an effort is being made to meet the requirements of the Regulations in this regard.

The Committee suggest as an alternative that the Regulations should be suitably amended. An amendment also of the relevant Acts would be required and this would widen the scope of the service unnecessarily and greatly increase its cost.

AGRICULTURE

Paragraph 16.—Tenders for excavators for Land Reclamation Scheme.

The Minister has been in communication with the Commissioners of Public Works and is seeking further information about the reasons for accepting the highest tender for the excavators in March, 1951. The Committee will be informed of the result of these inquiries in due course.

Paragraph 17.—Stocks of Butter Wrappers and Vegetable Parchment.

The Department of Agriculture represents that it could not have been foreseen—at the end of May, 1951—that the sale of off-ration butter would not be resumed later in the year or that butter rationing would cease in July, 1952; that it was then the intention to re-introduce the sale of off-ration butter and to import sufficient butter to enable this to be done; that supplies of parchment paper were scarce and hard to locate; and that all the parchment in stock and ordered would have been sufficient only to meet requirements for about twelve months. The Department further represents that it would have been seriously at fault if it had not made every effort to ensure that an adequate stock of parchment was available to enable imported butter to be sold.

The Minister accepts as valid the representations of the Department of Agriculture regarding the merits of the transaction and he trusts that the Committee will feel able to share that view.

Tenders for the purchase of the thirty tons of unused parchment were invited but only one tender—for five tons at £110 a ton—was received; this tender was refused and an offer of £176 a ton for the entire lot was accepted from the Dairy Disposal Company, Limited. The stock of unused printed wrappers has not yet been disposed of; efforts to do so are being continued.