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REPORTPART I.—GENERAL OBSERVATIONS. MINUTE OF THE MINISTER FOR FINANCE DATED 16th DECEMBER, 1954.Public Works and Buildings.1. The Committee is pleased to note that a statement showing the total estimated cost of each item under Subhead B, and the amount provided therefor, will be made available when the Estimate is being considered by Dáil Éireann each year. It trusts, however, that consideration will be given to the inclusion of a column showing the amounts already expended on each item. External Affairs.2. It is noted that further information will be required before a decision can be reached on the Committee’s recommendation regarding the fixing of the terms and conditions of repayment of advances made to the Irish News Agency under the Irish News Agency Act, 1949. In view of the increasing indebtedness of the Agency the Committee trusts that this decision will not be long delayed and it will await a further communication from the Minister in the matter. Science and Art.3. The Committee notes that the Minister agrees with its views regarding the use of virement to increase the expenditure on a service for which provision is made by a grant-in-aid. Posts and Telegraphs.4. As a clear definition of the Department’s contractual position regarding the arrangements for the carriage of letter mails by rail is highly desirable the Committee trusts that consideration of the matter will be brought to a conclusion with the least possible delay. Defence.5. The State Property Bill, 1954, having now become law, the Committee trusts that no avoidable delay will occur in the clarification of the position regarding lands vested in the Minister for Defence. It notes the Minister’s undertaking to have a register of Departmental properties compiled and a system of perambulation initiated. Miscellaneous Social Welfare Services.6. The Committee appreciates the difficulties involved in the operation of the Education (Provision of Meals) Acts. It would like to point out, however, that Section 2 (1) of the original Act lays down:— “There shall be charged to the parent of every child in respect of every meal furnished to that child under this Act such an amount as may be determined by the local authority, and, in the event of payment not being made by the parent, it shall be the duty of the authority, unless they are satisfied that the parent is unable by reason of circumstances other than his own default to pay the amount, to require the payment of that amount from that parent, and any such amount may be recovered as a civil debt in manner provided by the Summary Jurisdiction Acts.” The Committee is concerned at the apparent departure from this provision inherent in the present system. It accordingly is of opinion that the present system be suitably modified or that proposals for legislation be introduced at an early date to deal with the problem. Agriculture.7. The Committee notes that further enquiries are being made regarding the reasons for accepting the highest tender for excavators purchased in connection with the Land Reclamation Scheme, and that it will be informed of the result in due course. 8. The Committee notes the representations made by the Department, and accepted by the Minister for Finance, regarding the action considered necessary to ensure that wrappers would be available in the event of the re-introduction of sales of off-ration butter. It notes further that a loss of £4,261 was incurred on the disposal of the accumulated stocks of parchment, being a loss of £142 per ton. The Committee appreciates the necessity for taking steps to ensure that adequate stocks of wrappers should be available if required. It feels, however, that having regard to the stocks held at the time, and to the fact that off-ration sales of butter had been discontinued, the confirmation of the order for 9 tons of parchment which issued on the 31st May, 1951, might have been withheld until such time as the position became clarified. A loss of £1,278 would thus have been obviated. The Committee understands that the Department has now decided to accept an offer of £500 for the entire stock of printed wrappers. PART II.—PARTICULAR ACCOUNTS.Misappropriations, etc.9. The Committee views with concern the number of cases recorded in these accounts in which moneys were misappropriated by public servants. In some cases the defalcations seem to have been facilitated by the suspension of certain departmental checks—other cases point to inadequate supervision. The Committee is fully alive to the necessity for the elimination of unnecessary checks and for ensuring all possible economies consistent with the preservation of a system adequate for the safeguarding of public funds. It feels, moreover, that any system of control, particularly over the receipt and custody of public moneys, must depend in the last resort on the degree of supervision exercised by responsible higher officers. It would like to be assured that the cases recorded do not indicate any decline in the high standards of efficiency and integrity expected from and generally maintained by officials charged with the control and custody of public funds. Office of the Revenue Commissioners.10. The attention of the Committee was drawn to a case of embezzlement by an official of the Department of moneys which he irregularly collected in respect of arrears of income tax, the amount involved being approximately £1,730. The Accounting Officer stated in evidence that it was the practice, in cases of hardship, to collect arrears of income tax by instalments and that, owing to the incidence of wage increases, there had been a considerable increase in the number of persons liable to tax in recent years, with resulting pressure of work in the arrears branch of the Department. The system which had been in operation provided that notification of each payment should be sent immediately to the appropriate Inspector of Taxes but owing to the very large number of cases under collection it was not found possible to adhere to this arrangement and notifications were accordingly withheld until a statutory instalment had been paid. The officer concerned was empowered to make arrangements regarding instalments but he had no authority to receive payment. He nevertheless made personal approaches to tax-payers and collected instalments for which official receipts were not given and which were not brought to account. Whilst normally the failure to account for such receipts would have been brought to light when the relevant files were submitted for review, the files were suppressed by the defaulter, and the suppression remained undisclosed for a considerable period owing to the pressure of work existing at the time. The Committee recognises that considerable strain was imposed on the staff engaged on the collection of arrears by reason of the increase, in the period since 1945-46, in the number of persons liable for income tax but it is concerned to note that the fraud appears to have been facilitated by the lack of adequate liaison between the Arrears Branch and the Inspectors of Taxes and by a break-down in the system of reviewing files. It questions the wisdom of modifying, during periods of increased risk, the methods of control found necessary under normal conditions and it cannot but express its grave dissatisfaction with a system which enabled a relatively junior officer to suppress important departmental documents over a prolonged period. National Gallery.11. Payments amounting to £1,000 for supplies of postcard reproductions of certain paintings were charged to this account although the postcards were not delivered until after the close of the financial year. It appears from the evidence given before the Committee that the orders for payment were drawn on 31st March, 1953, but were not issued to the suppliers until the following June, when delivery of the postcards had been made. The Accounting Officer explained that he had considered the charge justified having regard to the fact that financial provision for the supplies had been made in the estimate for the year under review. The Committee accepts his statement that he had acted in good faith, and was not aware that anything was wrong with the procedure he had followed. However, it cannot overlook the fact that the accounts had not matured for payment by 31st March, 1953, and that, in consequence, the charge to the vote was quite irregular. In the circumstances it has no option but to recommend that the charge be disallowed. The Committee had also under consideration the procedure adopted in connection with the placing of the orders for the postcards. It appeared that the contractual position with the suppliers had not been clearly defined, nor had any approach been made to the Stationery Office on the matter. It was stated that these orders were of an experimental and exploratory nature but the Committee feels that the experience of the Stationery Office might have been drawn on to some advantage and it trusts that in placing future orders this procedure will be followed. External Affairs.12. Owing to the depreciated purchasing power of Irish currency in certain countries to which officers of the Department are accredited, these officers are paid compensation under regulations approved by the Department of Finance. This compensation is subject to adjustment in respect of periods during which the officers are absent from their countries of accredition. The Committee understands that, owing to the adoption of an incorrect method of adjustment, a number of overpayments were made in past years, and that the Department of Finance has directed that any excess payments made in respect of periods since 1st September, 1949, should be recovered. That Department has indicated that, when arrangements for such recovery have been made, consideration would be given to any representations the Department of External Affairs may be see fit to make regarding waiver of recovery of any overpayments which may have been made in respect of periods prior to that date. The Committee will be glad to be informed, in due course, of the amounts recovered and of the final decision of the Department of Finance regarding any outstanding overpayments. Defence.13. The attention of the Committee was drawn to arrears of rents amounting to £693 which had accumulated in respect of certain properties taken over from the British Government in 1938. It was informed that the question of the arrears was bound up with requests for new leases by the tenants, who had refused to pay rent until their demands were granted. The Department, however, was not in a position to make new agreements, which would contain provisions regarding the arrears, pending the enactment of the State Property Bill. The Committee trusts that the recent enactment of this Bill will enable the Department to make arrangement for the collection of the arrears of rent without undue delay. 14. A large quantity of spare parts for motor vehicles, accumulated during the Emergency, was found to be surplus to requirements in 1946. Sale up to 31st March, 1953, had realised approximately £10,900. The Accounting Officer stated that the value of the residue, comprising some 1,200 different items, amounted to about £10,000, and that consideration was being given to the best method of disposing of them. The Committee is concerned at the long delay in dealing with these stocks, having regard to the cost of storage and the risk of obsolescence, and it desires to be informed when a final decision regarding their disposal has been reached. Army Pensions.15. Section 7 pf the Army Pensions Act, 1943, as amended by the Army Pensions Acts, 1946 and 1949, authorises the grant of special allowance to certain persons who were members of an organisation to which Part II of the Army Pensions Act, 1932 applied, and who were granted medals in respect of such membership. The grant of these allowances is subject to the provision that the Minister for Defence is satisfied that the medals had been duly awarded. The attention of the Committee was drawn to three cases in which allowance had been awarded and in each of which subsequent enquiries disclosed that the persons concerned had not, in fact, been entitled to the medals issued to them. It is informed that payment of the allowances was discontinued in these cases and that recovery of the sums paid, amounting to £970, approximately, is being sought. It understands from the Accounting Officer’s evidence that when the scheme for the award of medals was introduced in 1942 it was not foreseen that any financial advantage would follow from the issue of a medal and, consequently, a more simple procedure for verification of entitlement had been adopted than would have been the case had an award of pension or allowance been in question. Having regard to the fact that the award of a medal was now a determining factor government the grant of special allowances the Department had under active consideration the question of the adequacy of the arrangements made for the verification of claims for the award of medals. The Committee is informed that other cases have come to notice in which medals were awarded but subsequent enquires disclosed that the required conditions for the grant of the medals had not been fulfilled and it views with disquiet the possibility of further loss to public funds. It will be glad to be informed, in due course, of the position regarding recovery of the overpayments referred to and of the results of the Department’s review of the arrangements for verification of entitlement to medals. Stationery and Printing.16. The contract for parliamentary printing provides that rent shall be payable for type held standing for periods in excess of six months and it is the practice to hold type set up for parliamentary bills until they have passed into law. The Committee understands that rent charges had accrued for a number of years in respect of bills which had not become law, no arrangements having been made for periodic review of the need for maintaining the type. It was stated in evidence that the Stationery Office did not become aware of this continuing charge until authority to disperse the type was sought by the contractor. The Committee is concerned at the lack of control over expenditure indicated by the facts in this case and it trusts that it will be found possible, by an inexpensive arrangement, to secure that rent charges will not accrue unnecessarily in future. 17. The attention of the Committee was drawn to the fact that a number of tenders for jobwork printing were opened before the due date and that in consequence two tenders which quoted lower rates than those accepted were not considered though received in time. The Accounting Officer assured the Committee that the contractual procedure laid down for observance by all Supply Departments is strictly observed, and that this was an isolated instance in which the staff dealing with the tenders mistook the date for opening a certain lot. Also, in some cases, the contractors were at fault in that they inadvertently associated in the one envelope tenders due for consideration on different dates. He stated further that the tenders which were debarred from consideration would not, in any event, have been accepted and that there was no loss to public funds. The Committee understands that all the facts were submitted to the Government Contracts Committee, who confirmed the original decision. In the circumstances it accepts the explanation given by the Accounting Officer. It desires, however, to stress the importance of strict adherence to the approved procedure in dealing with tenders. Office of the Minister for Education.18. The Committee had under consideration a charge of £36 6s. 9d. for travelling expenses in respect of which vouchers had not been furnished. Apparently the officer in question used a car hired on a “self-drive” basis for certain journeys and since mileage rates payable in such cases were not fixed by regulation he was allowed rates proper to journeys by taxi. The Committee fails to understand on what grounds the Department allowed the higher rates for the cheaper mode of transport. It is informed, however, that the facts have been referred to the Department of Finance and it refrains from further comment pending the decision of that Department. Science and Art.19. A sum of £2,500 was provided for grants towards the cost of publication of books in Irish by independent publishers. These grants were payable in accordance with conditions laid down by the Minister for Education with the consent of the Minister for Finance, and a body known as Bord na Leabhar Gaeilge was set up to administer them. £2,440 was issued to An Bord during the year but vouchers to support the charge of this amount to the Vote were not made available to the Comptroller and Auditor General nor was evidence produced that the conditions governing the payment of the grants were fulfilled. The Committee understands that An Bord was newly set up and was not conversant with the rules governing the disbursement of voted moneys; and the Accounting Officer undertook to have the necessary information furnished to the Comptroller and Auditor General. The Committee is informed that vouchers have now been submitted covering payments to the full amount of the charge, but that a sum of £230 16s. 11d. included therein was properly chargeable against the vote for the financial year 1953-54, not having been expended by An Bord by 31 March, 1953. It desires to emphasise once again that the system of accounting for voted moneys calls for strict adherence to the rule that the date of payment determines the year of charge. It recommends accordingly that the charge of £230 16s. 11d. be disallowed. Fisheries.20. The Committee had under consideration the question of arrears of annuities set up to repay advances made to the Sea Fisheries Association for boats and gear. These arrears, which amounted to £33,525, at 31st March, 1952, had increased to £48,200 by 31st March, 1953. It was stated in evidence that repayments depended upon the earnings of the fishermen to whom loans had been granted and that there were factors which made it almost impossible to effect collection up to the full amount of the annuities. The Committee notes that the arrears have increased progressively in recent years; it understands, however, that the matter is under discussion between the Department of Finance and An Bord Iascaigh Mhara; and it will be glad to be informed of the outcome. Industry and Commerce.21. The accounts of Tea Importers, Ltd. for the period to 4th July, 1952, when subsidy ceased to be payable, showed a balance of £1,156 as due to the Department of Industry and Commerce. The Committee understands that in arriving at this amount the Company had taken credit for £81,000 which, it was claimed, was not built up out of subsidy and was, therefore, not proper to be refunded. The Department had not accepted this view. Of the amount in question, £45,000 represented a profit earned by the company in the four months prior to 1st November, 1947, when payment of subsidy commenced. The Accounting Officer explained that the purchase price of tea varied from time to time whereas frequent changes in the selling price were undesirable and occasional profits or losses were, therefore, inevitable. The profit of £45,000 made prior to the introduction of subsidy had been used, since subsidy ceased, to stabilise the price of tea and the Department now accepted the view that it was properly used for this purpose. The Committee has no comment to make on this item. The balance of £36,000 comprised £32,000 which had accumulated in a Marine Insurance Fund, and £4,000 which was an amount held in reserve to meet a possible liability for Indian Sales Tax. The Committee understands that the disposal of these sums is still under discussion and it will be glad to be informed when a decision has been reached. 22. The limit of £88,000 imposed by the Minerals Company Acts on advances to Mianraí, Teoranta, in connection with Slieveardagh Coalfield had been reached by 31st March, 1952, and, in order that operations in the area could be continued, a Supplementary Estimate was taken during the year 1952-53 to enable further advances to be made to the company. A note to the Supplementary Estimate indicated that payments would be made in excess of the limit specified in the statutes and that amending legislation would be introduced at the earliest date possible. A sum of £16,614 was advanced to the company under this authority. The company’s interest in the Slieveardagh Coalfield was sold in February, 1953. In the circumstances the Minister considered that it would not be appropriate to introduce legislation solely for the purpose of regularising the payment of £16,614 and he proposed to seek the approval of Dáil Éireann, by way of provision in a later estimate, to have the advance treated as a non-statutory free grant. The Committee is informed that the introduction of the estimate was deferred pending completion of the sale which had been delayed owing to legal difficulties. In view of the desirability of having the position regularised it trusts that the matter will be brought to an early conclusion. Aviation and Meteorological Services.23. A contract for the execution of certain works provided for completion within a period of 5½ months, and for the liability of the contractor for penalties in the event of failure to complete within the stipulated time unless such failure was due to certain specified circumstances. It appeared that extensions of the period for completion were allowed by the Department from time to time in circumstances other than those contemplated in the contract conditions, and that in fact the time taken to finish the work was approximately eighteen months. The Committee had under consideration the position regarding the liability of the contractor under the clause providing for penalties, and regarding the circumstances in which time extensions were granted for reasons other than those covered by the clause. It was stated in evidence that factors outside the contractor’s control interrupted the progress of the work and that it was considered that the Department was not precluded from granting extensions for compelling reasons not stipulated in the contract. From inquiries addressed to Departments generally it appeared that although clauses providing for penalties for delay in completion are usually incorporated in contracts for the execution of works, such penalties are rarely, if ever, enforced. In the particular case under notice a lower tender, which provided for completion within twelve months, was set aside because of the length of time proposed for the work. If it is considered inexpedient to seek to enforce penalties where the contract conditions regarding fulfilment are not complied with, it is, in the Committee’s view, a matter for consideration whether acceptance of a tender other than the lowest can be justified by reason of the time factor. (Signed) W. A. W. SHELDON, Chairman. 30th March, 1955. |
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