Committee Reports > List of Committees > Dáil > 1956 > Committee of Public Accounts > Report - Appropriation Accounts 1954 - 1955

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Dé hAoine, 30 Samhain, 1956.

Friday, 30th November, 1956.

The Committee sat at 11 a.m.

DEPUTY CARTER in the chair.

Mr. C. O’Neill (Secretary and Director of Audit), Mr. C. J. Byrnes, Miss M. Keily, Mr. P. S. Mac Guill Mr. J. F. Maclnerney, and Mr. J. Mooney (Department of Finance) called and examined.

VOTE 47—LANDS.

Mr. T. O’Brien called and examined.

700. Chairman.—Paragraph 61 of the Comptroller and Auditor General’s Report states:—

“Subhead I.—Improvement of Estates, etc.

61. In November, 1949, a breach occurred in the embankments protecting certain vested lands in County Clare from the tidal waters of a tributary of the River Shannon. It was estimated that the cost of repair would amount to £445 and the Commissioners authorised the necessary expenditure on 29th November, 1949, and the work was put in hands immediately. The breach, however, continued to widen and it was estimated in January, 1950, that a sum of £1,200 would be needed to effect repair. Expenditure of this amount was sanctioned by the Commissioners on 9th February, 1950. Owing to adverse weather, and tidal conditions, it became necessary to suspend the work temporarily on 13th February, 1950, to which date expenditure amounting to £734 had been incurred. When resumption of work became possible the breach had widened further and in November, 1950, the Commissioners, with the concurrence of the Department of Finance, sanctioned a total expenditure of £3,795 subject to contributions of £1,000 being made both by the tenants and the local authority. Steps were taken, without success, to secure the required contributions and the work was suspended in the meantime.

It was arranged in 1953 that the Office of Public Works should carry out a complete survey of the embankments and this was completed at a cost of £1,453 which is included in the charge to the subhead. The survey disclosed that the embankments would require complete reconstruction the estimated cost being £100,000 including £34,700 for the repair of the breach. In view of its magnitude, the work is now being carried out by the Office of Public Works under Part IV of the Arterial Drainage Act, 1945, and financed by moneys provided out of the National Development Fund.”

Mr. O’Neill.—The paragraph sets out the facts as to how the thing developed. It may be that the scope of the work would have been contained within narrower limits if more speedy action could have been taken at the outset of the trouble.

701. Chairman.—What was the actual size of the breach at first?

Mr. O’Brien. — At first it was quite small but being subject to the forces of nature it proved to be just another illustration of man’s control stopping at the shore. It has been the practice in the Land Commission when dealing with large estates protected by embankments to deduct from the landlords’ purchase money capital sums with which to establish maintenance funds for the protection of those embankments. These sums were invested to provide an income which was disbursed through local trustees to carry out the necessary repairs on behalf of the land owners affected. The fall in the value of money has left these funds far below sufficiency for the purpose for which they were originally set up. The fund in the present case in County Clare, between Bunratty and Sixmilebridge, amounted to only £450 when set up in 1919. In dealing with these embankments we are always up against the risk of a sudden breach in a freak storm and the breach grows wider with every tide. That is exactly what happened here—when a spring tide followed, up to 900 acres became flooded and remained flooded. The Land Commission tried to repair the breach but the continuing wind and tide brought about such deterioration that it became necessary in the end to undertake large-scale reconstruction work for which only the Office of Public Works was equipped. There are about 350 of these embankments altogether and their position was considered by the Drainage Commission which reported in 1940. Maintenance of embankments calls for constant vigilance and prompt repairs, but the Land Commission has no permanent organisation for that type of work. The Arterial Drainage Act passed in 1945 contains provision for the gradual transfer of embankments to the Office of Public Works; some of them will be included in the Arterial Drainage Schemes, and a few have already been transferred. It is impossible to take effective measures against tide and wind in a freak storm; that was our difficulty here.

702. Chairman.—Once a breach occurs I suppose there is grave danger if you have a heavy tide after it. It would appear that you had some delay in the early stages as a result of the procedure in dealing with the breach. From the time it was noticed first it had to be inspected, estimates made and so on. Have the Commission no direct method of trying to stem the breach? — Yes, we delegate authority to a local inspector and immediately something like this happens he can spend up to £150 without coming for sanction at all. In fact, he did that in this case; he sandbagged it quickly and promptly but the sandbags were swept away by the next tide and the breach continued to widen. The Drainage Commission mentioned the difficulty involved in such cases, and in fact commented on it in specific form. I have the text of their statement here if the Committee would wish to hear it.

Deputy Sheldon.—I do not think so.

703. Chairman.—I remember reading the Drainage Commission Report on that. It would appear that there should be something in the nature of an emergency unit for dealing with those breaches. Some members of the Committee pointed out earlier that time is vital in those matters?—The Land Commission do recognise that quite well, but their organisation is not equipped to do that type of work.

Deputy Sheldon.—In fairness to the Land Commission, in this particular case apparently they did work with reasonable speed because the breach occurred in November, 1949, and before the end of November, 1949, they had given permission for the expenditure of a larger sum than the inspector had at his disposal. It is difficult to see how they could deal with it unless they have the necessary machinery.

704. Deputy Mrs. Crowley.—How long has that £150 been sanctioned? Has it been the same for twenty or thirty years?

Mr. O’Brien.—No. Originally it was £50 and we enlarged that to £150 about a year ago.

705. Chairman.—Paragraph 62 of the Report of the Comptroller and Auditor General reads as follows:—

“62. I inquired regarding the responsibility of the Land Commission for the reconstruction and repair of embankments. I was informed that whilst the Commission had no legal liability for maintenance in the case under notice it was empowered by the Land Acts to incur expenditure on embankments generally. When reconstruction was necessary to protect lands subject to purchase annuities it was the policy to assist the tenant-purchasers if the work was beyond their capacity.”

Mr. O’Neill.—That is related to the previous paragraph. Apparently the Land Commission were under no direct legal liability to repair these embankments, but undoubtedly they had power to do so generally under the Land Acts.

Mr. O’Brien.—We do so in cases where the security for our land annuities is interfered with. In the particular case we tried to get a contribution towards the work from the Clare County Council also, but we did not succeed. The County Council were concerned about their rates just as we were concerned about our annuities.

706. Deputy Sheldon.—Is not it the case that in lands where there were embankments, when the original owners had surrendered the land and the lands were being vested in tenants, every tenant was offered two different annuities, one on the basis that the Commission would be responsible for the embankments and, in the other case, he got a lower annuity on the understanding that he would accept responsibility himself and, of course, most of them fell for the lower annuity? I understood there was a sort of general question like that.

Mr. O’Brien.—I did not ever hear it put that way before, Sir.

Deputy Sheldon.—Some years ago I had trouble over an embankment in Donegal, and I think that case was made to me.

Mr. O’Brien.—There may have been a case in Donegal in which that did occur— one particular case.

Chairman. — That would not be general?—No, it was not general.

Deputy Sheldon.—In this case there was a sinking fund?—There was a maintenance fund.

707. Had that fund been touched before?—It had, yes. Small repairs that were in the competence of local trustees were in fact carried out by those trustees. The fund is invested and the dividends from that are paid to carry out small repairs.

708. Chairman. — Paragraph 63 of the Report of the Comptroller and Auditor General reads as follows:—

“63. In connection with the division of estates, it was noted that fencing stakes, etc., were purchased at a cost of £862. These supplies were obtained from contractors through the Post Office Stores Branch, in accordance with instructions issued by the Department of Finance in 1926 (Circular 39/26) governing the allocation by the Government Contracts Committee to the three central purchasing departments of articles required for the Government service. As the production and sale of fencing stakes is one of the activities of the Forestry Division of the Department I inquired whether these supplies could not have been obtained more economically from that division.”

Mr. O’Neill.—We were informed that the Department of Posts and Telegraphs which purchased on behalf of the Land Commission had invited the Forestry Division to tender, which it did unsuccessfully. The purchasing through the Post Office was in accordance with instructions which the Department of Finance issued in 1926, allocating to the several purchasing Departments the purchase of certain items. We have had a short review carried out as to the extent to which that circular is now being observed and we find that there has been quite a number of departures from it. In this case, however, the circular was adhered to and it appears that on balance it was the most economic way to purchase the stakes.

709. Chairman.— Is there any particular reason, Mr. O’Brien, why, say, the Forestry Division or the producer is unable successfully to compete against outside firms?

Mr. O’Brien.—I take it there is no reason why they should be able to compete successfully, at least on all occasions; they have competed successfully on some occasions. A purchaser may buy timber in the knowledge that he will make his profit from devoting most of it to a specific purpose, not related to fencing stakes at all. Some purchasers probably have a residue left over which they will convert into fencing stakes and, having already made their profit, will be prepared to sell and to undercut other people — undercut the orthodox producers of fencing stakes.

Chairman.—That would be merely the residue?—Yes—the residue, their profit having already been made on some other product.

710. Deputy Bartley.—Would transport enter into it? The location of the place where the stakes were used might have affected the whole transaction?—Yes. I was going to make that point also, that the Forestry Division have only two central sawmills, and even though they have some portable sawmills the distribution costs could operate against them in long distance deliveries.

711. Chairman.—I take it the timber supplied was all native timber?—Yes.

Chairman.—To what extent, roughly, do you supply the trade? We can leave that until later.

Mr. O’Brien.—The principle flowing from the paragraph seems to be that the Department, as between the Land Commission and the Forestry Division, should be self-contained as to the supply of stakes. I do not know that that ought to be an acceptable doctrine at all. The principle of combined purchasing or central purchasing is the one that is in force and has most to commend it; we followed it. Frankly, I was quite surprised to be questioned for following it. I would not be surprised to be questioned for not following it.

712. Chairman. — Of course, on the grounds of economies, you might have a question; they might think that procedure other than that would have obtained the supplies cheaper. That is the reason, I suppose. Has Finance any particuular views on this?—I imagine that it is with Finance it should be taken up. I happen to have been told on one occasion, for example, that in the Post Office, in which they have a workshop of their own, if they need to get a van repaired they will invite tenders from their own workshop and from outsiders, but their own workshop will not get the contract unless they quote lowest.

713. Chairman.—I imagine there is a certain amount of overlapping.

714. Mr. O’Neill.—I think the question of carriage must be the vital one. We have found that other Departments, buying fencing stakes, do get them from the Forestry Division direct.

715. Deputy Sheldon.—Could the Department of Finance people say whether other Departments, when purchasing fencing stakes, must also seek tenders and take the lowest one?

Mr. Mooney.—I think generally central purchase is the thing which is calculated to be the most economical one. But, I should say that in an individual case if a Department seeking stakes feel that they could get them cheaper by buying them this way, they would be expected seriously to consider that as a commonsense approach. In this case I gather that, not only was the general rule followed of purchasing through the central organisation but it was actually cheaper. Is that so, Mr. O’Brien?

Mr. O’Brien.—That is so.

Mr. Mooney.—There is no argument at all against it?

Mr. O’Brien.—No, none at all.

716. Deputy Sheldon.—I notice that the Department of Defence and other Departments have bought fencing stakes from the Forestry Division and I wondered if they have all been equally confined by the circular in the way the Department of Lands have been.

Mr. O’Brien.—They ought to have been.

717. Chairman. — Paragraph 64 of the Comptroller and Auditor General’s Report reads as follows:—

“Losses.

64. In 1952 a landholder instituted proceedings against the Land Commission for damages for flooding of his lands due to failure to clean a boundary drain on an adjoining estate owned by the Commission. The court awarded a decree in favour of the plaintiff together with costs and expenses. The plaintiff took a similar action in respect of continuing damage in 1953, when the lands had been allotted to tenants under purchase agreements, and he was again successful. The damages awarded, together with costs and expenses, amounted to £121, which has been charged to this subhead with the sanction of the Department of Finance. I have inquired whether the Land Commission, being no longer in possession of the lands, continues to be responsible for the maintenance of the drain.”

I take it these actions were in respect of the same drain?—Yes, Sir.

718. Has this type of case ever occurred before?—No, curiously enough, it has not.

Mr. O’Neill.—I understand that the matter has been referred to the law officers as to the question of the Department’s continuing responsibility.

719. Deputy Bartley.—Excuse me for cutting in. Would the witness say that the converse has happened, that the Land Commission have drained and have flooded the lands of somebody else and that there have been proceedings consequent on the Land Commission’s operations? I admit that the Land Commission, of course, as in the case of the man with his ass, will be wrong anyway. Perhaps, in dealing with it, the witness will deal with the two sides of the question— where they have failed to do anything and have been pilloried for it and where they have done something and have been pilloried for it, and say which type of case is the commoner.

Mr. O’Brien.—We have had both types of case, of course, of which the more common is where the Land Commission, in fact, do act and where the remedial drainage measures that they undertake may lead to consequential flooding lower down, but there has been a decided case on that: if the natural flow of the water is in that direction, the person executing the drainage upstream is not liable for the consequential flooding downstream.

720. Chairman.—In regard to the 1953 action, was there any specific provision for maintenance in the terms, say, of the allotment, in the terms under which the allottees, for instance, should have been liable. Was there any specific provision for maintenance mentioned?—There was, yes, Sir. The allottees of the land abutting the drain undertook responsibility for its maintenance. They also undertook to indemnify the Land Commission from claims arising out of the condition of the drain and on foot of these undertakings the Land Commission disclaimed responsibility in the case but the plaintiff’s solicitor, in correspondence, challenged the validity of that contention. We were intending to plead that we had so allotted the land and had therefore divorced ourselves from responsibility. When the case came into court we were estopped from making that plea. In these local cases it is very difficult for the Land Commission to get evidence of what the mutual responsibility had been in the past as between a landlord and a tenant. A tenant will come along and give evidence on behalf of his neighbour where he will decline to do so on behalf of a Department. On the general implications of the case the advice of the Attorney General has been sought, and I am hoping to get it very soon.

721. Chairman.—To what extent was expenditure incurred by the Commission on cleaning the drains since the allotment?—About £70.

722. Mr. O’Brien. — The particular tenant happened to be what I would call a very querulous or litigious or uncompromising individual.

Deputy Sheldon. — Tenants frequently feel that they have to be vis-à-vis the Land Commission.

Mr. O’Brien.—We were quite prepared to clean our half of the drain if he were prepared to do his.

723. Deputy Bartley.—It is not every tenant that has the courage to go to law with the Land Commission.

Deputy Sheldon. — You would be surprised how many in my county have that courage.

Deputy Bartley.—You know the proverb they apply to it.

724. Chairman.—Yes—go to law with so and so, etc. Paragraph 65 of the Report of the Comptroller and Auditor General reads as follows:—

“Subhead U.—Appropriations in Aid— Excess annuities (No. 25 of 1925 (Sec. 7 (2) and (3)) and redemptions.

65. Advances amounting to £1,620 were made between 1928 and 1931 to 81 tenants (£20 each) on Inishbofin and adjacent islands and mainland for the purpose of re-roofing their dwelling houses. These advances were charged to the improvements subhead of the Vote. An investigation by the Land Commission in 1952 in connection with the sale of a holding in default of payment of the annuity disclosed that through an oversight the advances had not been charged on the tenants’ holdings and recovery by way of excess annuity had not therefore been effected. The Commission’s legal adviser expressed doubts as to the validity of charging the advances on the holdings compulsorily in view of the lapse of time since the expenditure was incurred. In all the circumstances it was decided, with the authority of the Department of Finance, to write off the amount involved. An appropriate note is appended to the Appropriation Account.”

Mr. O’Neill.—That paragraph merely amplifies the note to the Appropriation Account.

725. Chairman.—But for the default, Mr. O’Brien, I presume this might never have come to light? — That is possible, Sir.

Deputy Bartley.—I think this might be passed over. I would commend the man who defaulted as a man with a very keen sense of justice and equity. The State Department which put corrugated iron roofs on these houses in the first instance is, in my opinion, the only body which committed an offence in putting such roofs on houses on small islands. Did they not know very well these roofs would not last any length of time? I think it is only fair that the State should come along and repair the damage and give these people substantial roofs.

726. Chairman.—That is more waste, I suppose. I am referring now to the material.

Deputy Bartley.—The roofs did last over a considerable number of years but, of course, roofs of slate or any other material would have lasted as they last in other areas. It is a mistake from which a good deal of experience has been gained and, even if it has cost £1,000 to buy that experience, I think the experience has been cheaply bought. I happen to know this area very well.

727. Mr. O’Brien. — Inishbofin and Inishark are the islands in question here. I do not know whether the Land Commission put the roofs on or whether the tenants put them on with the aid of the advances. The houses are there from the days of the old Congested Districts Board.

Deputy Bartley.—Originally it was they who put them on.

728. Chairman.—Is this the only case that has come under notice in general? —Yes. Frankly, I do not think the State has lost anything because if we had, in fact, charged these advances I doubt if we would ever have got them back. The fact of the matter is that these particular land owners have not paid their ordinary purchase annuities and I do not think that the Land Commission or the county council for rates have ever succeeded in overcoming concerted default on the part of islanders.

Deputy Bartley. — There has been a republic there for a long time.

Chairman.—It is a very difficult situation.

729. Deputy Bartley.—As we are on the subject, it is perhaps no harm to follow it a little further. I think a method whereby these land annuitants might be induced to pay up was suggested to the Land Commission. As in most islands, there is at the moment a declining population and you have, therefore, a larger number of derelict holdings than you would have on the mainland for instance. The neighbouring island of Shark had about 17 or 20 tenants, 15 to 20 years ago, and the population there is also declining. It is not possible to maintain the Shark people as a community and it is desirable that they should be transferred to the neighbouring island of Boffin. Now, it was suggested that a number of these holdings might be acquired, holdings in relation to which there is heavy default in the payment of annuities, so that the remaining families in Shark might be transferred to them. Since the people of Boffin got wind of that suggestion, I understand there has been great enthusiasm for a year or two to pay the annuities. I do not know if that effort has been sustained, but I think the Land Commission gained as much as they lost on these corrugated iron roofs as a result of the apprehension created by the possibility of the neighbours being transferred over.

730. Chairman.—Are not the annuities halved?

Mr. O’Brien.—They are and, in fact, the total advances of £1,620 here would have been £810 after the passing of the Land Act, 1933.

731. Paragraph 66 of the Report of the Comptroller and Auditor General reads as follows:—

“66. The Rent and Interest Account No. 3 of the Land Purchase Accounts records the receipts and payments in respect of untenanted land purchased under the 1923 and subsequent Land Acts and held by the Land Commission pending allotment. The receipts arise from temporary lettings, etc., while payments include rates, wages and other estate outgoings together with interest and sinking fund due to the Land Bond Fund on advances outstanding for purchase of untenanted land. Any surplus income is paid annually to the Exchequer as extra receipts. The outstanding advances include capital losses representing the difference between the cost of untenanted land to the Land Commission and the sale price. Cumulative capital losses on resale increased from £343,289 at 31st December, 1950, to £666,483 at 31st December, 1954, and the charge to the Rent and Interest Account for 1953-54 arising out of resale losses amounted to £13,530, approximately.”

Have you anything to add, Mr. O’Neill?

Mr. O’Neill.—I do not think the figures for cumulative capital losses on resale are available elsewhere. The surplus income on the rent and interest account is paid into the Exchequer and, as a result of the increased losses on resale, Exchequer income for the year was reduced to the extent of the figure given; £13,530 for sinking fund and interest charges. These losses seem to reflect the effect of Section 5 of the Land Act, 1950, which provides for payment of the market value of land acquired.

Mr. O’Brien.—The increased losses on resale occurred after the passing of the Land Act, 1950, when the price for acquired lands became fixed at the market value. These losses are really incurred on what amounts to rural slum clearance and they are analagous to the subsidy paid on the rehousing of those affected by urban slum clearance. Since 1923 the Land Commission have paid for acquired land £9,226,467. The resale price charged to allottees amounted to £8,499,180, leaving a total loss of £727,287 on the 30 years. That is less than 8 per cent.

732. Deputy Bartley.—Could the witness say whether the sum mentioned in this paragraph relates to purchases of land under the relevant section of the 1950 Act whereby the Land Commission is empowered to buy holdings offered for sale by public auction or by private treaty?

Mr. O’Brien.—No.

733. Deputy Bartley.—Is any considerable part of it represented by transactions of that kind? — Oh, no. Since the 1950 Act was passed the total purchased for cash by public auction or by private treaty has been no more than 38 holdings altogether.

All over the country?—Yes.

Under that particular section?—Under Section 27 of the Land Act, 1950.

734. Do I take it that purchases of this kind have now been dropped and have been dropped for some considerable time? Is this section being applied now? — It is, yes. Sections 27 and 28 of the Land Act, 1950, are in force but, since the passing of the Act, the total number of holdings bought was 38, the area involved was 1,306 acres and the purchase price was £30,331. That is all that has been bought under the particular section. For acquisition of untenanted land through the ordinary machinery over £9,000,000 in Land Bonds has been paid. At the time when provision for these purchases for cash was being incorporated in the 1950 Bill, it was suggested that the Land Commission should not go into the market in a very big way or try to outbid all other comers. The whole purpose was to buy holdings which would be suitable for migrants or for re-arrangement in connection with the regrouping of inter-mixed holdings. While the grant for the subhead remains at £20,000 or £30,000 the main policy has been to pick up quickly small holdings in order to relieve pockets of bad congestion.

That is a new interpretation to me. However, this is not the place to discuss it now?—The purpose for which land can be bought is laid down in the Act.

Mr. Bartley. — I know that, but the practice is what has been raised now. I do not think this is a suitable place, however, in which to discuss the matter.

735. Deputy Sheldon.—For the record, the Land Commission continues to take the odd view on arbitration that, where the figure goes against them, they back out.

Deputy Bartley.—And, of course, that was pointed out as a factor which would destroy the useful operation of the section, and that has been borne out by experience.

Mr. O’Brien.—I do not think we are talking on the same point.

Deputy Bartley. — It is not the same point, of course.

Mr. O’Brien. — Where in the normal course of acquisition the Land Commission fixes a price and the Appeal Tribunal substantially increases the price, the Land Commission may withdraw. The Dáil has given them statutory power to do so if they consider it inexpedient to purchase.

736. Deputy Sheldon.—The only reason I mention it is that I think “going to arbitration” is a rather unfortunate phrase. It is not arbitration in the sense that one side can back out.

Mr. O’Brien.—The word “arbitration” is not there at all.

Deputy Sheldon.—It is in general use. People talk about arbitration.

737. Deputy Bartley.—The seller whose land is being compulsorily acquired has the right to appeal on price and it is the word “appeal” I hear used down in my part of the country.

Mr. O’Brien.—That is right. We have not had any more than six or seven cases of withdrawal over the last two years to my own knowledge. The Land Commission invariably accept the price given by the Appeal Tribunal unless it happens to be much in excess of their own figure.

738. Chairman.—Is the halving of the annuities under the 1933 Act taken into account in determining the amount of losses?—No. There is a particular obligation in the 1933 Act that the Land Commission shall assess the annuity on the basis on which it was hitherto assessed, and then halve it.

739. To what extent roughly is improvement expenditure under subhead I. recovered in the resale price?—To the extent of about 10 per cent.

740. Are losses in general related more to increased prices rather than increased turnover on untenanted land?—There are some inevitable losses in the allotment of land. The determination of individual resale prices is an “excepted matter,” reserved exclusively to the Commissioners. I know that in fixing such prices the Commissioners have regard to the maximum security of the land for annuity purposes and they take into account that the annuity will be payable over a period of about 60 years. They are unlikely to be influenced by short periods of agricultural prosperity; they view it in an overall way, taking the good year with the bad and mindful of possible depression as well as prosperity.

741. It is long term?—Long term, yes. But such losses were envisaged and statutory provision was made for them in Section 27 of the 1927 Act.

742. Chairman. — On subhead A. — Salaries, Wages and Allowances—Mr. O’Brien, what type of post was suppressed?—They were mainly subordinate posts in the Collection Branch. We found that for the sacrifice of no more than a tiny element of very precise accounting a much cheaper method—cheaper in terms of staff—of collection and crediting of consolidated annuities could be brought into force. We did that, and effected a saving of 12 writing assistants.

743. On subhead B. — Travelling Expenses—the note says or the explanation indicates that there was a curtailment in field work due to weather conditions. Does this involve re-arrangement of the outdoor staff?—Yes. They would be able to devote the time to office work related to field work which they had done in the past. The weather conditions that year were particularly bad; if you recollect it was the winter during which the heavy Shannon flooding occurred at Athlone and there was appalling weather in December, January and February.

744. On subhead H.1.—Payments under Section 11 (7) of the Land Act, 1923—are there many new transactions arising at present involving charges under this subhead? How many new transactions? — Very little on the tenanted land side, where the Land Commission give State contributions of 10 per cent., but there is a growing number on the Costs Fund where the legal costs incidental to owners transferring their land to the Land Commission are met out of the Costs Fund of 2 per cent. That is a continuing and slightly increasing charge. The subhead grows at about the rate of £100 a year.

On subhead H.3.—Payments under Section 27 (2) of the Land Act, 1933, etc.— Mr. O’Brien, could you say how much of the charge relates to the issue of the additional bonds under the 1953 Act?— About £400. The main bulk of it, of course, is the charge for the halving of the annuities under the 1933 Act, that is £672,000.

745. Deputy Bartley.—This H. group, Mr. Chairman, is purchase money, is it?

Chairman.—Yes, and payments under various sections of the Land Acts.

746. On subhead I. — Improvement of Estates, etc.—could you give us just a rough and brief indication of what improvements would be made and the type of assistance? — The main bulk of improvements would consist of dwelling-houses, drainage, fencing and road construction. The assistance to migrants would entail first of all, the cost of previewing the new holdings; then their actual transfer has to be paid for, and in addition to that if they are installed pretty late in the spring, towards the end of March or early in April, provision is made for fuel, fodder and ploughing. We give them some fuel, some fodder and plough 7 to 10 acres of the holding in advance for them if they do not come until the first weeks of April.

747. Deputy Bartley.—On the question of migration, would the Accounting Officer say whether the expenditure on this particular service in any given year is related on a proportion basis to the total sum provided for the improvement of estates?

Chairman.—You are referring to subhead I.?

Deputy Bartley.—I take it that is the relevant subhead for expenditure?

Chairman.—Yes. Are you referring to the Estimate, or what it is estimated for?

Deputy Bartley.—You have a figure here in subhead I., for improvement of estates and, in round figures, it is £600,000. Is it not out of this subhead that the services of transferring migrants are met?

Chairman.—Yes.

Deputy Bartley.—What I want to know is—I doubt if it is a matter of policy as if it is it would not be proper to mention it here—does the Land Commission, in deciding the amount that will be spent on migration, do it on a percentage basis of the total for improvement of estates? If there is £600,000 granted, do they say: “Expenditure on this service will be £5,000 or £7,000 or £8,000”?

Mr. O’Brien.—Not exactly. What happens is that we are able to realise from the volume of land on hands and the location of it how many migrants we will be able to instal in a given year and we are able to conclude from that—possibly it may be 80 migrants, 100 or 120 — how much we will have to devote particularly to those in that year.

748. Deputy Bartley.—I take it, therefore, that in preparing the various components of this Estimate, migration plans for the year are taken as a separate item and is estimated on its own merits without relation to the over-all sum?

Deputy Sheldon.—I think the Deputy will get a fair idea in the Book of Estimates where there is a very complete breakdown of subheads.

Mr. O’Brien.—There is a particular item of assistance to migrants, but that is a very small classification; it is limited to fuel, fodder and ploughing.

Deputy Bartley.—I am not referring to that exclusively.

Deputy Sheldon. — No, buildings and everything included.

749. Deputy Bartley.—Yes. I am referring to the migration service generally, in relation to the excess of its costliness in relation to land settlement generally. That is really what I have in mind because there does seem to be an erroneous idea abroad that we are robbing the taxpayer to an inordinate extent to finance this service. I think the facts do not bear that out?—On subhead I., the details of Part 3 show, I think, that it is a sum of only about £2,000.

Chairman.—£4,000.

Mr. O’Brien.—I do not think we spent that.

Deputy Bartley.—That is a satisfactory answer. I am sorry for delaying the Committee on it.

750. Chairman.—What is the Accounting Officer’s experience in regard to relative costings as between where you carry out the work by direct labour and have it done under contract?—Curiously enough, it is our experience that there is practically no difference. Our costings for direct labour work out almost exactly the same as a contractor would submit to us. Direct labour does not suit us unless we have a particular requirement or objective in hand ourselves. If we have to commence building operations late in the year—and we are anxious to get lands disposed of before the 31st March, then we will do the building ourselves by direct labour because we would not rely on a contractor to get it done in time. A contractor would not have the same anxiety, though he might be able to quote lower prices; it can be appreciated that local contractors will sometimes be able to quotes pretty keenly and very competitively for houses in isolated districts where it really would not pay us to have an engineer going out to put up a building and buying stocks and supplies of building materials.

751. On subhead J.—Advance to meet Deficiency in Income from Untenanted Lands purchased under the Land Acts, 1932 to 1953 — the extra Exchequer receipts include profit from the administration of untenanted lands during the year. Roughly, what acreage of arable land would you hold?—30,000 acres. There was a question in the House recently and the Minister’s reply to it was that the amount of arable land on hands at the 31st December, 1953, was 28,000 acres; at the same date in 1954 it was 30,000 acres and on the 31st December, 1955, it was 34,000 acres.

Chairman.—On subhead R.—Purchase of Interest for Cash (Sections 27 and 28) of the Land Act, 1950—Mr. O’Brien, you do make provision for cash, when further expenditure under subhead I., for instance, arises?—Yes.

752. The details of the Appropriations in Aid are on page 141. The surplus income of Rent and Income Accounts Nos. 1 and 2 realised £9,500 odd as against an estimated surplus of £28,000?—Yes.

753. Have you any brief details there? —Yes. The £28,000 was made up of two sums, £5,500 profits on the management of Congested Districts Board lands and £22,500 from the investment of a capital sum of £500,000, the accumulated surplus of previous years. That £500,000 had been earning 4½ per cent. interest. On realisation at the direction of the Department of Finance and on placing it on deposit at 1¼ per cent., there was a drop of 3¼ per cent. That accounted for a reduction of about £16,000.

754. Deputy Bartley. — What was the purpose of the transfer?—I do not wish to ask any official of the Department of Finance in case there may be confidential Exchequer reasons for it.

Deputy Bartley.—Is there any other reason which is not confidential?

Mr. Mooney.—The money was transferred for the purpose of making advances and in that way it would yield a smaller rate of interest. If these moneys could be invested at long-term rates of interest, instead of being used as they were they would naturally yield a much higher rate of interest, but practical considerations required them to be used otherwise. In this case the Exchequer got the advantage.

755. Chairman.—We shall now move on to the notes on page 142. Note 4 deals with a deficiency of £308, written off as irrecoverable in respect of untenanted land. can you say how long the land was in the possession of the Land Commission?

Mr. O’Brien.—About 20 years. It was one of those unfortunate cases relating to land taken over by us for annuity default in the 1930’s when there was a lot of trouble. We were able to dispose of it finally two or three years ago.

It was a long time on hands?—It was a Tipperary case where the people are quite anxious about land. We found a lot of difficulty in the case.

VOTE 48—FORESTRY.

Mr. T. O’Brien further examined.

756. Chairman. — Paragraph 67 of the Report of the Comptroller and Auditor General reads as follows:—

“Subhead C.2.—Forest Development and Maintenance, etc.

67. A right of way over avenues of a forest was granted by the Department to a purchaser of land within the forest area. The avenues became damaged by vehicles used by the grantee, and the full cost of repair was borne by the Department. I have inquired regarding the grant of the right of way without any conditions as to maintenance, and the amount expended.”

Have you anything to add to that paragraph, Mr. O’Neill?

Mr. O’Neill.—I should like to say in the first instance that we were not quite right in saying the full cost of repair was borne by the Department. I found there were certain contributions in kind by the purchaser. The granting of the right of way without conditions as to maintenance was, I believe, due to an oversight and at the moment the question of having the avenues taken over by the county council is under consideration.

Mr. Sheldon.—We would be delighted to have it.

757. Chairman. — What is the present position in regard to the right of way?

Mr. O’Brien.—Although there was no binding obligation on the purchaser to maintain the right of way he has been doing so. It was an unfortunate oversight that a maintenance obligation was not written into the sale document. Curiously enough, when a sale was first mooted full provision for maintenance of the avenues by the purchaser was envisaged but when the sale was successfully negotiated at a later date to a different party the question of liability for the avenues was not written into the documents. The county council are considering taking over the avenues.

758. Deputy Bartley.—On the question of accessibility of land, has the Land Commission power and does it exercise such power directly to give a person who has land to which there is no recognised right of way a passage to that land? I admit there are very few such cases. Indeed I came across only one myself.

Chairman. — Is the Deputy talking about Land or Forestry?

Deputy Bartley. — No. I am talking about the ownership of land to which there is no recognised right of way and where access to it is by the goodwill of the owner of land between it and the public road.

Chairman. — We are dealing with forestry now.

Deputy Bartley.—It is the same type of case, the only difference being that the Forestry Division is a public body as against the private owner in the case I have outlined.

Mr. O’Brien.—The Land Commission have power compulsorily to acquire rights of way; they exercise that power occasionally. They can confer rights of way over any land for the benefit of land subject to annuity.

759. Chairman.—Paragraph 68 of the Report of the Comptroller and Auditor General reads as follows:—

“68. It was noted that a number of contracts varying in amount from £200 to £900 for the supply of road metal in connection with the provision of roads at a forestry centre were placed without competition, and I have inquired regarding the circumstances in which normal contract procedure was not followed.”

I wonder if Mr. O’Neill has any observations to make on it?

Mr. O’Neill.—We were informed that the Department were satisfied on the particular occasion that the material could not have been purchased more economically but that tenders were now invited by public advertisement in all cases.

760. Chairman.—In what circumstances was the normal contract procedure not adhered to in this case?

Mr. O’Brien. — These transactions occurred between 1952 and 1954 at a time when forestry road construction on a large scale was only in its infancy. Requirements of road making materials were quite small and the practice had been for the forester to look for local tenders; sometimes it was difficult to get tenders because the number of dealers in stone in any locality is limited. That was the method employed and only two tenders were received.

761. Was the approval of the contract committee necessary? — It would have been if the amount involved were more than £1,000.

762. Does the Forestry Division operate any quarries of its own?—Yes. In fact in this particular instance we tried to operate our own quarry but found that the contractor’s price was much cheaper. The contractor was operating at a loss and eventually he rejected our offer to raise the price from 9/- to 10/- per ton. That proves how economically we were doing business. In the supply of road materials from a quarry owned by the Department ability to work the quarry efficiently is more important than price. If you get your supply from a contractor by tipper lorry you also secure economies in spreading costs, which is a very important point.

763. Chairman.— Paragraph 69 of the Report of the Comptroller and Auditor General reads as follows:—

“Stocks of Timber.

69. It was noted that a very large quantity of poles had accumulated at forestry centres as a result of thinning operations and I have inquired regarding their disposal.”

Has Mr. O’Neill any point to make on it?

Mr. O’Neill.—There was a very considerable increase in the stock of poles on hands on March 31st, 1955, as compared with the previous year. This was due to an acceleration of thinning operations, unaccompanied by a corresponding increase in sales. We have been informed that a reorganisation of sales procedure has been put in hands.

764. Chairman. — Is the increase in stock a new feature?

Mr. O’Brien.—It is a natural growth. We thinned 8,500 acres of forest in 1953-54; the following year we thinned 9,000 acres. There is bound to be a progressive increase. Thinning is a necessary practice. In this operation desirable trees are favoured at the expense of undesirable ones because to leave all trees to fight it out for themselves would not be forestry but folly. Along with a continuous thinning programme we have a continuous sales programme.

765. Deputy Sheldon.—Have sales improved in recent years?—They have.

766. Deputy Mrs. Crowley.—Is the timber always disposed of by public auction or is it open for a farmer who wants hayshed poles, for instance, to go to the local Forestry centre and purchase his needs?—Generally the arrangement is that large quantities are sold by tender following advertisement in the public Press. Smaller quantities are sold by local auction. Purchases of a few poles can always be arranged at prices fixed by the Department. Periodic auctions can meet the requirements of local farmers.

767. Are they only at stated periods?— Poles in small quantities may be sold at fixed prices at the forest, a farmer paying so much per foot or per pole.

768. Deputy Bartley.—Is there a big export outlet in respect of the sales for use as pitprops?—Yes; fairly big.

769. Chairman.—It is not reflected in the receipts, is it?—Pitprop exports come to about £50,000 each year, or have been coming to that in recent years.

770. Do you anticipate any increase? —We do. Overall State forest receipts for timber have grown from £155,000 in 1953-54 to £207,000 in 1955-55, and possibly to £250,000 in this current year.

771. Deputy Bartley.—Are they all thinnings? — Mainly thinnings, there being very little mature timber. Not all the thinnings are exported. Some are consigned to the Irish Wallboard Co., Ltd., Athy, and to Killeen Paper Mills, Ltd., Inchicore, for example.

772. Chairman.—Subhead A. refers to Salaries, Wages and Allowances. Have the additional forester posts been created yet?—Yes. There are about 225 foresters serving now.

773. Subhead C.1 refers to Acquisition of Land (Grant-in-Aid). You expended £93,100 on the acquisition of land. What, roughly, was the average price?—About £5 10s. per acre; in that year we acquired 17,497 acres.

774. Subhead C.2 refers to Forest Development and Maintenance, etc. Does the charge to this subhead represent normal development and maintenance during the course of the year?—Yes. That subhead covers new planting, road construction, nursery work, weeding and pruning as well as maintenance of all descriptions.

775. I suppose you employ various types of machinery under capital works?—We have 22 crawler tractors, 45 wheeled tractors, 8 lorries and 11 compressors. We have 14 rotovators in the nurseries and finally, we have mechanical ploughs, concrete mixers, motor mowers, portable saw benches, chain saws, and so on.

776. Deputy Sheldon.—In the note in relation to subhead C.2, there is a reference to a saving resulting from overestimation of the amount to be paid to the Office of Public Works in respect of repairs to machinery effected in the central engineering workshops of that Office. What precisely happened? Did you not need as many repairs or did they not carry them out?—We provided £29,000 for repairs but all we had to pay to the Office of Public Works was £16,500. The main trouble was the difficulty of the Office of Public Works in framing an account of their full costs before the close of our Appropriation Account in the following autumn.

Did they carry out all the repairs?— Yes.

777. Chairman. — Subhead C.3 refers to Timber Conversion. I notice you estimated for an expenditure of £18,000 and that your receipts came to £25,000. How did the actual figures work out?— £25,000 would not represent the entire income from that source. Much of the sawn timber would be used for our own constructional purposes and would not be shown here at all as Appropriations in Aid, e.g., fencing for our own forests, the construction of houses for foresters, and so on.

778. Would there be sawing on behalf of members of the public?—Yes—mostly for local farmers supplying their own timber and having it sawn to specification.

779. What else would be represented in that £25,000?—Mainly planks and scantlings for sale.

780. Deputy Sheldon. — Your receipts were less than was estimated in respect of sawn timber. You estimated for £25,000 and you received £22,179. Was there a corresponding reduction in your expenses?—Yes; instead of being £18,000 the expenses were £16,000.

781. Deputy Bartley.—Subhead D. refers to Grants for Afforestation Purposes. Can you give the Committee any details?—That subhead refers to private planting grants. In that particular year, a total of 442 acres was planted under these grants.

781a. Deputy Sheldon. — Why was it originally anticipated that the receipts from the sales of timber would be reduced? The Estimate was reduced from £140,000 to £130,000. Then you brought in a Supplementary Estimate. What was the position?—On the supplementary the Estimate was increased from £130,000 to £140,000.

My Book of Estimates, page 251, shows under “Sales of Timber” £140,000 for 1953-54 and £130,000 for 1954-55. In other words, there was an anticipated drop of £10,000. Then it was corrected by a Supplementary Estimate for £10,500. Was it that the £140,000 had not been reached in the previous year?—Yes. We also expected a falling-off in the sale of the produce of old woodlands in that particular year.

VOTE 49—GAELTACHT SERVICES.

Mr. T. O’Brien further examined.

782. Chairman.—Subhead A. refers to Salaries, Wages and Allowances. The explanation, again, is that the saving is due to vacancies in technical posts remaining unfilled. What is the present position in regard to such vacancies? — We had 29 vacancies, most of which are still unfilled and most of which are on the technical side. For instance, we required a carder spinner for tweed. Furthermore, the job of factory manager on the knitwear side has been vacant for the past three years. One or two persons came along but stayed only for a few months. Tourmakeady is rather remote. The important post of production manager on the knitwear side has been vacant since 1953.

783. Deputy Sheldon.—Could you say if the difficulty in getting a production manager would be a contributory cause of the decline in the knitwear industry?— Yes. I think that, in that particular year, we expected to reach £176,000 from the sale of knitwear but we realised only £130,000.

784. Chairman.—Would salary, housing or location be a contributing factor? —All three, unfortunately.

785. Deputy Sheldon.—Has the Department made representations to the Department of Finance on the question of salary?—Yes.

786. Chairman.—Subhead D.1 refers to Machinery and Maintenance in relation to rural industries. The note says that the saving is due to the postponement of the purchase of machinery. Has the absence of machinery retarded the development of the tweed industry?— No; the postponement affected only the finishing of certain ranges of tweed. It was principally a question of space that was needed. The machines were installed in the following year. Our tweed sales were not interfered with at all. In 1952-53 the figure was £113,000 for tweed sales; in 1953-54 it was £179,000; in 1954-55 it was £248,000.

787. Subhead D.2 refers to Manufacturing Materials. How many ranges of tweeds do you produce? — Over 2,000 ranges.

788. Do you find any particular range more suited to the export market than the others?—The taste varies. Our export market extends over America, Canada, Germany, Switzerland, China. Even on the North American continent, the taste varies as between America and Canada.

789. Deputy Sheldon.—You talk about over 2,000 ranges. I take it that you are referring to patterns?—Yes.

790. How many different weights and types of tweed have you rather than just patterns?—There would be only about a dozen varying from five ounces to sixteen ounces.

791. Deputy Bartley.—On the question of the maintenance of machinery, have you the necessary technical supervisory staff for that purpose?—Yes.

792. Chairman.—Subhead D.6 refers to Advertising and Publicity. How far was the increased expenditure incurred (a) inside the State and (b) outside the State?—The increased expenditure in the case of the tweed industry was due to our participation in international Trade Fairs—the Spring and Autumn Fairs at Frankfurt cost altogether £786 during the year. Expenditure on advertising for Munich Fair was £56 and on the advertising of tweeds in German Trade Journals £451. Advertising in a variety of journals in the U.S.A. amounted to £617.

That is on the export side?—Yes.

793. Under subhead E.—Marine Products Industries — the reduction in the purchase of searods is stated to be due to marketing difficulties. What was the nature of these difficulties and could you say how far do they continue to exist? —We have only one customer really and that is the Alginate Company. We are tied to their requirements.

794. Deputy Bartley.—That is your own company of course?—Yes.

795. Chairman.—You have no other outlet?

796. Deputy Bartley.—There is a matter which arises from this and I do not know if the Accounting Officer is the proper person to whom the inquiry should be addressed. It is the developing of outlets for searods by improving and adding to the number of processes carried out in the factory. As I understand it, we prepare only a raw material in this factory. I wonder would the Accounting Officer be in a position to confirm or modify that statement? — The Deputy is quite right. What we do at the Kilkerrin factory is to grind the searods preparatory to sending them to Scotland where the alginic acid is extracted. My information is that extraction cannot be carried out at the Kilkerrin factory. The extraction of acid on a commercial scale is a trade secret which has not been made available to the Irish firm.

797. Deputy Bartley. — That information has been given to us in the Dáil, but my supplementary question was what is our Institute of Research doing in the matter? I freely recognise that it is not a task which should be imposed on the Alginate Company or on the Gaeltacht Services organisation, but we have set up an organisation for problems of this kind.

Chairman.—That would not altogether be a question for the Accounting Officer.

Deputy Bartley.—The reason I ask the question is what has Gaeltacht Services done to impress upon this Institute the necessity and the desirability of making progress in the matter?

Mr. O’Brien.—I have advised the manager of the Alginate Company of this matter myself since it was raised at this Committee last year.

798. Chairman.—Did he raise it with the Institute? — My information is that the Company were not very keen to do it. They felt they might only be injuring themselves by setting up as rivals with the only firm which was buying the rods and converting them into the finished product. There is only a very small market, controlled by two firms; one is the Scottish group and the other is an American group.

799. Deputy Bartley. — I understand that the products of the Scottish factory are used in the manufacture of a very wide variety of articles, including cosmetics. I have no knowledge of the marketing organisation which caters for the supply of these raw materials but it seems to me that it is a pretty world-wide market. It seems to me that if we could produce the products now being produced in Scotland that with such a market available it should be possible to find outlets for them. Would the Accounting Officer say exactly what interest the Scottish firm has in the Kilkerrin factory?

Mr. O’Brien.—I can only state that in terms of cash because the Company is really outside the Department. They own £7,000 shares out of a total capital of £50,000.

800. Deputy Bartley. — Then the Department has a controlling say?—Yes —but not in the affairs of the Scottish company.

801. In regard to carrageen, it is stated that prices continued so high that purchases were curtailed as in the previous year. Purchases are usually curtailed when the market contracts, but rising prices usually indicate an expanding market. This note is not too intelligible to me. Could we get an amplification of it?—The prices to gatherers ran as high as £72 a ton. The collection and marketing are still in development stages. The preparation of carrageen as food was carried on during the Emergency but was discontinued in 1946 as private concerns engaged in the work. The preparation of carrageen for industrial purposes has been the subject of experiments since 1952. Only four cwts. were bought in 1952-53, 14 tons in 1953-54, 8½ tons in 1954-55 but in the subsequent year 1955-56 we bought 142 tons. The Scottish company have no interest in the carrageen.

802. Deputy Bartley.—Does the Scottish company make vital decisions in the matter?—Not as far as carrageen is concerned. All the decisions relating to carrageen are made by the Irish company.

803. Deputy Bartley.—Before the witness leaves it is worth noting on this service that it has made considerable progress, more than any comparable service in the State, I suppose, at being self-sufficient. I think we should not pass from it without noting that fact. I would like any comments that may have seemed critical on my part to be qualified by that remark.

804. Mr. O’Brien. — Thank you. This particular service has been detached from the Department of Lands and is now under the Department of the Gaeltacht.

805. Deputy Bartley.—I am not referring to Parliamentary responsibility in the matter. I am referring to the actual carrying out of the work involved.

The witness withdrew.

VOTE 60—OFFICE OF THE MINISTER FOR SOCIAL WELFARE.

Mr. P. J. Keady called and examined.

806. Chairman. — On subhead A.— Salaries, Wages and Allowances — Mr. Keady, did the staff re-organisation result in a permanent economy?—Yes, Sir, the saving shown is £40,587. Staff retrenchment following re-organisation, non-filling of vacancies——

Yes, we have that in the notes, but what I am referring to is: does this result in a permanent economy?—Yes, but not the whole amount of the £40,000.

How much roughly?—About £10,000.

807. Under subhead F. — Manufacture of Insurance Stamps—I notice that you were able to estimate this provision accurately. How is this so? — The Estimates under this subhead are supplied by the Revenue Commissioners who manufacture the stamps and the amount they say each year is the amount actually paid over.

807a. Chairman.—On subhead H.—Insured Person’s Medical Certificates—do you pay the full cost?—We set up a kind of a fund calculated at the amount of 3/6 per insured person for the year and that sum is divided among the doctors in proportion to the number of medical certificates they issue to insured persons.

808. Deputy Bartley.—What is the payment per certificate?—It varies according to the area. There is a higher rate in rural areas than in county borough areas because more travelling has to be done by the doctors.

809. Between what two limits does the variation take place?—From 10d. for a certificate in the county boroughs up to 1/6 in the rural areas.

810. Chairman. — On subhead K.— Transport and Compensation — who uses the motor cars?—They are used by the inspectors of agents and the sickness visitors whose job it is to supervise the claims made by insured persons to see whether they are genuinely sick.

To establish the claims?—Not quite. To investigate claims which may not be genuine claims.

811. On Appropriations in Aid—Item 1: Social Insurance Fund—does this represent the full cost?—There is recoupment from the Fund to the Vote in respect of the cost of administration of the social insurance side of the scheme, not the assistance side.

VOTE 61—SOCIAL INSURANCE.

Mr. P. J. Keady further examined.

812. Chairman.—Paragraph 106 of the Report of the Comptroller and Auditor General reads:—

“Subhead A.—Payment to the Social Insurance Fund under Section 39 (9) of the Social Welfare Act, 1952.

106. Section 39 (9) of the Social Welfare Act, 1952, provides that the amount by which the income of the Social Insurance Fund for any year is less than its expenditure shall be paid into the Fund out of moneys provided by the Oireachtas, and further provides that the income and expenditure of the Fund for any financial year shall be determined for the purposes of the sub-section by the Minister for Social Welfare on such basis as may be agreed with the Minister for Finance. Section 39 (10) provides that any sums payable into the Fund pursuant to sub-section (9) shall be paid in such manner and at such times as the Minister for Finance may determine. Such payments are subject to adjustment when audited accounts of the Fund are available. In accordance with these provisions sums amounting to £2,098,000 were paid to the Fund from the Vote during the year under review. It is indicated in a note to the account that the saving of £666,000 was due to excess provision having been made for the year 1954-55 and to an adjustment in respect of an overdraw from the Vote for 1953-54. The accounts of the Fund, which was established on 5th January, 1953, have not yet been furnished to me.”

Have you anything to add on that paragraph, Mr. O’Neill?

Mr. O’Neill. — This payment to the Social Insurance Fund is the sum estimated to represent the deficit on the Fund as at 31st March, 1955. It is, of course, subject to adjustment. The accounts of the Fund have not yet been submitted to us and I do not know whether their form has been finally determined.

813. Chairman.—Is there any explanation as to the delay in furnishing the accounts?—Before the preparation of the accounts of the Social Insurance Fund which was set up in January, 1953, could be started, it was first necessary to dispose of the outstanding accounts of the separate insurance schemes which were superseded by the new scheme. There were seven such accounts and they were cleared in the normal course. In the meantime we had to determine the form of the new accounts and in arriving at a conclusion on that we had to consult the Department of Finance and the Comptroller and Auditor General. We have arrived at a stage now when agreement on the form of accounts is in sight. When that agreement is final we shall be in a position to submit the accounts up to March, 1953, and April, 1953, to March, 1954, within the course of a few weeks.

814. Paragraphs 107 and 108 of the Report of the Comptroller and Auditor General read:—

“Subhead B.—Investment Return.

107. As stated in previous reports Section 21 of the Social Welfare Act, 1950, as amended by Section 68 (5) (e) of the Social Welfare Act, 1952, authorises payments from the Social Insurance Fund in respect of expenditure by the Minister for Social Welfare on the acquisition of lands, premises, furniture or equipment, and the construction or reconstruction of premises. It also provides that an investment return in the form of contributions to the Fund shall 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 expenditure under this section up to 31st March, 1955, was £1,273,572 including £69,500 in the year under review. The whole amount was expended on the construction and equipment of Áras Mhic Dhiarmada. Part of the premises so constructed has been occupied by Córas Iompair Éireann and I am informed that negotiations regarding the rent payable have not yet been completed, but that sums amounting to £12,500 have been paid on account by the company into the Fund. Pending completion of the agreement, a sum of £367,000, being the estimated capital cost of the occupied premises, has been excluded from the expenditure on which the investment return was calculated.

108. In the years 1953-54 and 1954-55 certain works and services for which Córas Iompair Éireann and certain Government Departments were responsible were necessary in connection with the completion and occupation of Áras Mhic Dhiarmada, and for administrative convenience their cost was temporarily met out of the Social Insurance Fund.

As the precise amount of the expenditure under Section 21 of the Act had not been defined when payment of investment return fell to be made, the charge to this subhead of £38,000 was arrived at on a provisional basis.”

Have you anything to add, Mr. O’Neill?

Mr. O’Neill.—These paragraphs explain the position of the investment return payments as at the date of the report. I am not clear whether agreement has been reached with C.I.É. as to the terms of the letting or whether the cost of the works performed for C.I.É. has been recovered.

815. Chairman. — Has agreement on these questions been settled with C.I.É.? —No. It is not finally settled. The question is still outstanding. We had to obtain the sanction of the Department of Finance as to the amount of the rent to be fixed. We obtained that sanction. C.I.É. had already paid on account the sum of £12,500. They have made no further payment in respect of the amount of rent which we have asked them to pay and the matter is still under discussion between us and the Department of Finance.

816. Deputy Bartley.—The Department of Social Welfare is the owner of the building?—Not the Department. It is really owned by the Social Insurance Fund and held by the Minister on behalf of the Fund.

817. What is the annual rent which has been demanded from C.I.É.?—The sum of £15,000.

818. Chairman. — On paragraph 108, does this mean that this expenditure did not earn any investment return? — This sum was included in the total cost of the building because the works and services were necessary in the course of completion and occupation of the building. The greater portion of the account is for work done for C.I.É. in the finishing of the bus station and the remainder represents expenditure considered to be proper to the Office of Public Works, supplies and services of a maintenance nature. The total sum is approximately £23,700.

819. Made up of?—£15,000 odd from C.I.É. and about £8,000 from the Office of Public Works.

VOTE 62—SOCIAL ASSISTANCE.

Mr. P. J. Keady further examined.

820. Chairman.—Paragraph 109 of the Report of the Comptroller and Auditor General reads as follows:—

“Subhead A.—Old Age Pensions.

109. As noted in the account sums amounting to £1,470, representing unrecovered balances of overpayments of old age pensions which were included in the accounts of previous years, were treated as irrecoverable with the sanction of the Department of Finance. This amount includes payments totalling £414 made to a pensioner in respect of the period December, 1938, to the date of his death in February, 1952. It appeared from particulars furnished by the Estate Duty Office in June, 1953, that the deceased had been in possession of certain assets which he had not disclosed when applying for pension. A question was accordingly raised regarding the validity of his entitlement to pension and, by a decision of the appeals officer dated 18th May, 1954, an overpayment as indicated was set up. Meanwhile, the period prescribed by the statutory notice to creditors had expired and as the estate was distributed in July, 1953, no funds were available to meet the State’s claim. I have inquired whether in cases where there is prima facie evidence of overpayment any steps could be taken by way of provisional claim against estates pending the formal determination of any question that might be raised as to the deceased’s entitlement.”

Have you anything to add, Mr. O’Neill?

Mr. O’Neill.—We were informed that it has not been the practice to lodge provisional claims in cases of this kind. A difficulty arises from the fact that whilst the Department might be aware that the deceased pensioner had a capital sum, they have no information as to the nature of the assets, and the annual value of the capital sum is determined by reference to the form in which the capital is held. A further difficulty is that in order to sustain a claim it would be necessary to prove fraud.

821. Deputy Sheldon.—You say they do not know the nature of the assets?

Mr. O’Neill.—Not the nature, just the amount.

822. Deputy Bartley. — Is not the method of computation very specifically laid down in the Social Welfare Act, 1952, as to how you will assess an income from capital no matter how the owner holds it?

Chairman.—Yes, that is the procedure. That is true providing the owner made clear that he had a capital sum.

823. Deputy Bartley. — If it is discovered after the death, do you not proceed to assess this annual value on the basis laid down in the Act?

Chairman. — Yes, but suppose the assets are distributed?

Mr. Keady.—I might be able to help on that. The first thing that happens is that we are informed by the Estate Duty Office of the death of persons over 70 years of age having assets over £100 or some such sum. There is an upper limit of, I think, £2,500. They do not give the actual composition of the assets. They just say the total value of an estate, is, say, £1,000. The possession of such assets in the form of a house that is occupied would not necessarily debar the pensioner from an old age pension, but there is a different method of computation if the sum was held in Government securities. The first thing we have to do is to find out if the person is an old age pensioner. We have to go to the local records for that. Then we must find out the composition of the assets which may mean approaching his solicitor or executor and getting permission to obtain bank records. That is not always forthcoming. If we get that information we are in a position to determine the value of the assets of the deceased pensioner at the time of death only. We then have to find out what date the assets came into his possession. That affects the past history of the pension. Under the Act, no recovery can be made if there is no fraudulent concealment of means. All these points have to be established before we can make any claim, provisional or otherwise, against the estate.

824. Chairman. — Do you have some cases of over-payment during the lifetime of a pensioner?—I can give you our experience for the year under review. We got information in the case of the deaths of 348 people over 70. We found that 133 were old age pensioners. We raised questions with the local pensions committee regarding possible over-payments in 26 cases. That amounted to a possible over-payment of £3,840 of which, under the present procedure, we recovered £3,025.

Chairman.—That was satisfactory.

825. Deputy Bartley.—With regard to the question of fraudulent concealment, if a pensioner is discovered to have had a sum of money of which the Department was not aware, is that bona fide evidence of fraud?

Chairman. — The Department would still have to prove fraud in the courts of law. Is not that so, Mr. Keady?—The position is this. If the assets came into his possession since the date he was last asked by a Social Welfare officer what his means were, he has made no concealment.

826. Deputy Bartley.—I see. He is not obliged, when he gets a sum of money of this sort, to go forthwith and inform any officer of the Department that he has it.

Chairman. — Strictly speaking, he would, I believe.

Deputy Sheldon.—I did not think the Deputy was such an idealist.

Deputy Bartley.—I am asking a question.

Chairman.—Is he expected to report any change of circumstances in that event?

Deputy Bartley.—In general, he does. Perhaps it is better not to pursue the matter?

Mr. Keady.—I do not think it is desirable.

827. Deputy Mrs. Crowley. — I cannot understand how the Department can find out, when the pensioner is dead, whether it was fraud or not because the person concerned might be a mental case. How is it proved? — We might have a record dated after the date he got possession of the assets in which he said his assets were less in which case it would be fraud.

828. Deputy Sheldon.—I know of a man who swore an affidavit he had not money. It was found that at the time he made this sworn statement he had £2,000.

Deputy Bartley.—Maybe he forgot it.

Deputy Sheldon. — It was about the ninth application for an old age pension.

Deputy Bartley.—It is extraordinary, if you leave money in a bank and get only 1 per cent., how easy it is to forget you have it.

Deputy Sheldon.—This was not in the bank.

829. Chairman. — Paragraphs 110 and 111 of the Comptroller and Auditor General’s Report read as follows:—

“Subhead C.—Unemployment Assistance.

110. Reference was made in paragraph 107 of the previous report to the arrangement by which the Department of Posts and Telegraphs restricted the extent of its check of payments of unemployment assistance and unemployment benefit made through post offices. Following the introduction of a mechanised system of control in the Department of Social Welfare precise figures of the amounts of such payments became available as from 1st December, 1953. The aggregate of these figures for the period to 31st March, 1955, was less than the amount claimed as having been paid by the Department of Posts and Telegraphs. The net discrepancies amounted to £515, and I have inquired how it is proposed to adjust them.

111. Reports of departmental checks of unemployment assistance payments made through employment exchanges have been furnished to me. The results disclosed call for no special comment.”

Have you anything to add, Mr. O’Neill?

Mr. O’Neill.—Paragraph 110 relates to a slight discrepancy and the Department of Posts and Telegraphs has decided to accept liability. I have nothing to add with regard to paragraph 111.

830. Chairman.—Roughly, Mr. Keady, what was the amount of assistance over-paid?—I think you can take it that it is the sum of the three items. Have you got the information?

Chairman.—Yes, I have. Paragraph 112 of the Comptroller and Auditor General’s Report is as follows:—

“Overpayments.

112. As shown in the details of the Appropriations in Aid overpayments of assistance made in prior years amounting to £6,335 were recovered in cash and, as stated in a note to the account, £2,599 was recovered by withholding current payments. Unrecovered balances amounting to £1,672 were treated as irrecoverable with the approval of the Department of Finance.

I have asked for particulars of over-payments outstanding at 31st March, 1955.”

Have you anything to add, Mr. O’Neill?

Mr. O’Neill.—We have been furnished with details of the overpayments outstanding at the end of March. They amount to approximately £25,000 of which £20,000 was for old age pensions, £2,800 for unemployment assistance, and minor balances for widows’ and orphans’ pensions and children’s allowances.

831. Chairman. — Roughly, how much has been recovered?—The total outstanding at the end of the year 1953-54—this is the information I have given to the Comptroller and Auditor General—was about £18,500. We recorded fresh over-payments of something over £23,000 in the year under review. We had outstanding at the close of that year £25,000. It is the difference between £42,000 and £25,000, that is about £17,000.

832. Deputy Bartley.—Is it not a fact that the recovery of overpayments in respect of some of these services, particularly unemployment assistance, is a comparatively simple matter; that most of those people continue to be qualified to receive assistance? Is it not just the mechanical operation of not paying over a certain period? I understand that is how recovery is made?—That is the usual method of recovery in the case of unemployment assistance.

833. Chairman.—The net loss over any period of years in unemployment assistance would not, I understand, be considerable?

Deputy Bartley. — It would only be irrecoverable in respect of a person who would leave the country or who died.

834. Chairman. — I see there is overestimation in respect of subhead C.— Unemployment Assistance. Have the numbers decreased?—It is not quite that, Sir. We made this Estimate somewhere about the autumn of 1953. We had at that time only 7 or 8 months’ experience of the new scheme which gave title to unemployment benefit to a new class of person. Our experience for the preceding few months was not sufficient to indicate to what extent there would be a switch-over to unemployment benefit from unemployment assistance. The result was that there was a greater switch-over to unemployment benefit than we had anticipated with the result that there was a saving on the assistance Vote.

835. With regard to these grants under subhead L. — Extra Statutory Grants— how do these arise?—They arise principally through old age pensions and widow’s and orphan’s non-contributory pensions, cases in which payment of the pension is not obtained within the statutory period three months after the date on which it becomes payable. That sometimes happens because postmasters do not cash an order which is due to be paid. An old age pensioner might present 13 orders and receive cash for only 12. We authorise the postmaster to pay.

835. Deputy Bartley. — The term “statutory period” is used. That has nothing to do with the general authority for the payment?—No. The subhead was created under authority of a Department of Finance minute in March, 1954.

The witness withdrew.

VOTE 24—STATIONERY OFFICE.

Mr. T. J. Malone called and examined.

836. Chairman.—Paragraph 25 of the Comptroller and Auditor General’s Report is as follows:—

“Subhead H.—Appropriations in Aid.

25. Advertisements in Government publications, etc., are, in general, placed through advertising agents who deduct commission from their receipts and remit net sums to the Stationery Office. As remittances from agents appeared to be unduly delayed, and the contractual arrangements were not in all cases clear, I have asked for information regarding these arrangements and the control exercised over receipts.”

Have you anything to add, Mr. O’Neill?

Mr. O’Neill. — There were two points which we raised with the Accounting Officer. One dealt with the commission allowed to contractors placing advertising contracts and the other related to delays which we noticed in the collection of receipts from the same source. We have been informed that the whole field of advertising contracts is being reviewed and that legal advice is being sought on certain aspects of the matter. There is, we are assured, more control now over the collection of receipts.

837. Chairman.—Had you many cases of delay of the kind referred to?—There were two cases, Mr. Chairman.

838. How many of your publications carry advertisements and what are the other means of advertising referred to?— That is rather a hard question. The Telephone Directory would be the principal one. There is the Trade Journal, but that is not a popular medium. There are the gun licences. The Telephone Directory and the Trade Journal are the two principal ones.

Deputy Bartley.—The principal one is the shop in the Arcade.

839. Chairman.—Yes. It is not known to all and sundry. Do agents handle all your advertising?—Yes.

840. You never deal direct with the papers?—No.

841. Chairman.—Paragraph 26 of the Report of the Comptroller and Auditor General reads as follows:—

“Stores.

26. The result of the stocktaking of stores carried out at 31st March, 1953, has been furnished to me. It reveals surpluses to the value of £1,571 and deficiencies of £2,069. I am informed that the investigation of the discrepancies disclosed by the stocktaking at 31st March, 1954, is proceeding.”

Mr. O’Neill.—The net deficiency as at 31st March, 1954, amounted to £117 which is a very small percentage of the total stock. These deficiencies are mainly due to book-keeping errors.

842. Chairman.—You told us at a previous meeting that you were revising the system of stock accounting, Mr. Malone. How is it working out? — It is rather early to express any opinion on it. My experience has been very short. I think it will be a success once the staff get used to it.

843. You appear to be overtaking arrears?—We are, yes.

In connection with Explanatory Note to subhead A. — Salaries, Wages and Allowances—were there many officers on the sick list?—I could not answer that without inquiry. I would say there is nothing extraordinary in our sick leave rate.

844. Your note says that 12 officers were paid sums varying from £53 to £104. Presumably there were others who received less than £50?—Yes.

845. What is the total amount included in the account for overtime? You estimate £600?—The figure is £1,811.

846. On subhead C. — Incidental Expenses—you bought a fork lift truck. Is it used to deal with the stores? — Yes, with heavy paper stores.

847. You had estimated for a second truck but apparently you changed?—We did. There were difficulties in the way of using it, but we may buy it at a later stage.

848. On subhead E.—Paper—roughly by how much were supplies to the public services reduced and stock run down?—I would say they were let run down almost to danger point. We might have cut it a little bit too fine. We had very little elbow room anyway, I know that.

849. The service would be a bit curtailed?—We tried to get along as best we could.

850. Deputy Bartley.—On subhead H.— Appropriations in Aid—I notice the Dáil Debate is selling well?

Deputy Sheldon.—We had a discussion about it last year and the year before.

851. Chairman. — What was the new publication which increased your receipts by £1,700?—It was a treatise on the law relating to Local Government written by a man called Street. We charged £8 a copy for it.

852. Deputy Bartley. — Was it a best seller in numbers?—Relatively speaking, yes.

Deputy Sheldon.—It was a good solid piece of work.

853. Chairman.—You have a statement of the value of stock on 31st March, 1955. I presume reduced purchases would be reflected in this?—Yes.

854. Regarding the Explanatory Notes on page 53, I notice there has been an increase in the number of ex gratia payments in recent years. Could you tell us why this should be?—One of the items there—in fact it is the main item—arose from a situation that will scarcely arise again. There was a contract placed and there was no wage increase clause in it. The contractor claimed some recognition of the increase in wages he had to pay. He felt, we felt, and I think the Department of Finance felt, that in equity he should get something. That was the explanation of that, the third item. I might add that a new contract has been made with that particular contractor.

855. Could you give us the total amount involved in each of the cases mentioned in paragraph 5 of the notes—paper bags and parchment skins?—The amount concerning parchment skins involved about £90.

856. And the paper bags? — We have not the figures.

857. Deputy Sheldon. — Regarding paper bags, it is not very easy to see from the figures given how this was due to a clerical error. To put down 139/9 instead of 246/6 seems a very odd type of clerical error?—There was a complete miscalculation by the contractor of the quantity of his paper. He was able to satisfy us about that.

The witness withdrew.

VOTE 5—COMPTROLLER AND AUDITOR GENERAL.

Mr. C. O’Neill called and examined.

859. Deputy Sheldon.—On Explanatory Note A, regarding retrenchment of staff, I presume this retrenchment does not go as high as auditors?—In this case, yes.

860. Deputy Sheldon.—Is this retrenchment having a material effect on getting your work done? — No. It was made possible by a redistribution of duties following the closing down of the Unified Societies’ accounts. We were able to reorganise the audits and an auditor retired and we did not fill the vacancy.

861. Chairman. — You train all your own staff?—Yes.

862. None of them are chartered accountants?—No, not chartered.

The witness withdrew.

The Committee adjourned.