Committee Reports > List of Committees > Dáil > 1956 > Committee of Public Accounts > Report - Appropriation Accounts 1953 - 1954

REPORT

PART I—GENERAL OBSERVATIONS.

MINUTE OF THE MINISTER FOR FINANCE DATED 24th FEBRUARY, 1956.

Social Assistance.

Qns. 1179-1238.

1. The Committee notes that the Department of Social Welfare has now been advised that Article 8 of the Education (School Meals) Regulations, 1927, is ultra vires the Acts.

The further advice that local authorities have power to operate a service under section 3 of the Act of 1914 on a non-contributory basis notwithstanding the provision of section 2 appeared to the Committee to require elucidation and it decided to take further evidence from the Accounting Officer on the matter. From this evidence it seems that the basis for the advice was that section 2 was considered unworkable because (1) moneys could not be recovered through the Courts from a defaulting parent as no contract with the parent existed, and (2) it was administratively very difficult to operate a means test for a meal costing approximately 4d., particularly in view of the fact that school managers and school teachers had protested against being made the instruments for the imposition of such a test. The Committee appreciates that these factors render very difficult the implementation of the section in full although it notes that in a few areas the section is partially operated. With the exception of these areas no effort is made to collect contributions. Public moneys, therefore, are being used, not for the contributory schemes envisaged by the Acts, but for non-contributory schemes with a resultant inflation in the State grant. The Committee considers that where a defect in legislation causes an alteration of such a fundamental nature in a scheme, new legislation should be introduced without delay either to remedy the defect without changing the nature of the scheme or to obtain Parliamentary authority for a changed scheme.

The Committee is concerned in the present case at the attitude of both Departments which seems to be, to quote a phrase of the Accounting Officer, “to turn a blind eye”, apparently indefinitely, to an important provision which governs the sanction of these grants; In particular it finds it difficult to understand the acquiescence of the Department of Finance in the continuance of the present unsatisfactory position. The Committee cannot but repeat the view expressed in the report of 3rd March, 1955, that steps should be taken to have the position regularised at an early date.

It would appear that the Acts provide that the State grants are to be made available for the provision of food only and do not extend to expenses in connection with the arrangement, preparation and service of meals. The Committee was informed that in Dublin, arrangements for the supply of meals are made with caterers and it appears that the use of the State grant was, in fact, extended beyond the provision of food. It wishes to learn whether in these circumstances grants were overissued.

The Committee asked to be furnished with a memorandum giving certain details of the operation of the scheme in the various areas. Examination of the information given on these points indicates that further information would be necessary to give a complete picture, e.g. the number of days on which the meals were served and the amounts of food used in meals in each area. There are, however, wide variations in the amounts paid per meal in the various areas ranging from approximately 1d. in a number of areas to 8½d. in one small area. With due allowance for price variations in different areas the figures seem to indicate very wide differences in the quantity and quality of the meals. In view of the high proportion of State grant to total expenditure the Committee is of opinion that consideration should be given to the question of determining a standard of adequacy which would be observed by the local authorities.

Agriculture.

2. The Committee notes that the Minister has been informed by the Commissioners of Public Works that the work of land reclamation for which the excavators were purchased could have been begun in May, 1951, had the machines been available and that the delay in the delivery was availed of by the Commissioners to investigate the possibility of designing a cheaper scheme. The Committee is unable to understand the circumstances in which it was considered necessary to purchase these expensive machines before the plans for the work had matured and in the absence of a reliable estimate of its cost. It cannot regard as satisfactory the arrangements by which, on grounds of urgency, an order involving expenditure of £20,000 in excess of the lowest tender was issued in March, 1951, in view of the fact that, as now appears, the work was not begun until May, 1955.

Misappropriation, etc.

3. The Committee notes the Minister’s view that the defalcations brought to notice cannot be attributed to any limitation of checks imposed for reasons of economy, or to any weakness in the checking system. It is pleased to note also that the Minister has no reason for believing that the cases in question indicate any general decline in the high standards of efficiency and integrity maintained in the public service.

Office of the Revenue Commissioners.

4. The Committee notes the assurance of the Revenue Commissioners that the circumstances in which the suppression of documents remained undetected arose through a partial breakdown, owing to pressure of work, in the system of control which had formerly worked satisfactorily. It trusts that the further steps which have been taken in the matter of accounting procedure will obviate similar cases of fraud in the future.

External Affairs.

5. The Committee notes the Minister’s decision to waive recovery of overpayments of exchange compensation on the grounds that the amounts involved had been accepted by the officers concerned in good faith. It also notes that steps have been taken to ensure that these payments shall, in future, be calculated on a basis which will give effect to the intention contemplated by the relevant regulations.

Army Pensions.

6. The Committee will await a further report regarding the recovery of overpayments of special allowance and the adequacy of the arrangements in operation for the verification of claims for the award of medals.

Stationery and Printing.

7. The Committee is pleased to note that steps have been taken to ensure that charges for type-rent will not be incurred unnecessarily in future.

Industry and Commerce.

8. The Committee notes that, of the sum of £31,763 which stood to the credit of the Marine Insurance Fund at 4th July, 1952, £27,812 was accumulated in the subsidy period and had, therefore, been contributed by the Exchequer. It further notes that, with the sanction of the Minister for Finance, £11,293 of the sum so accumulated was paid to certain tea merchants who claimed that they had been deprived of their due quotas of subsidised tea during the subsidy period. The balance amounting to £16,519 has been surrendered to the Exchequer.

The Committee considers that as the sum of £27,812 represented over-issue of subsidy which should properly have been refunded to the Exchequer in full, the authority of Dáil Éireann should have been obtained for the payments made in settlement of the merchants’ claims. It regards the procedure followed as being quite irregular.

The Committee assumes that it will be informed, in due course, when the position regarding the balance which stood to the credit of the Indian Sales Tax Reserve Account has been determined.

Aviation and Meteorological Services.

9. The Committee recognises that Departments have regard to their particular requirements in recommending to the Government Contracts Committee the rejection of a lower tender by reason of the time factor. It notes that penalties for delay in completion have been enforced in some cases, but it is understood that such enforcement is quite exceptional. In the case under notice extensions of the period for completion had been granted in circumstances other than those contemplated by the contract. The Committee appreciates that cases will arise where it would be unreasonable to withhold approval of an application for an extension of time merely because the contract had not provided for the particular contingency which had arisen. It feels, however, that the tendency to forego enforcement of contract conditions may encourage contractors, when forwarding tenders, to submit unrealistic proposals regarding the periods for completion of works. It trusts, therefore, that where the circumstances appear to warrant the application of a penalty clause a waiver will be granted only for compelling reasons.

PART II—PARTICULAR ACCOUNTS.

Forestry.

10. Forests timber available for sale is generally disposed of by public auction or by tender, but where only small quantities are involved they are sold locally at prices fixed by the Department. Attention was drawn to a case in which large quantities of timber were disposed of locally, without competition. It was stated that the forest from which the supplies were obtained had been built up from a number of plantations which had been acquired by the Department. Local saw mills had been accustomed to obtain supplies from the produce of the plantations at fixed prices and the Department had considered it undesirable to interfere with the practice. Sales are now being effected by competitive tender.

The Committee is satisfied with the arrangements now made. It wishes to emphasise the necessity for securing competition where State property is being disposed of unless circumstances render such procedure impracticable.

Qns. 266-271.

11. The Comptroller and Auditor General drew attention to certain instances of laxity in accounting control which resulted in delays in the issue of invoices for materials purchased and in the collection of certain rents. Having regard to the risk of loss to public funds which such delays may entail the Committee trusts that the steps which they have been assured have been taken to avoid a recurrence will prove effective.

12. Reference was made to losses which, owing to unauthorised tree fellings, occurred at a forestry centre and which were estimated by the Accounting Officer to be in the region of £400. The Committee was informed of the system of control in operation at the several forestry centres and of the steps taken to eliminate such losses. It appreciates the difficulties involved in providing adequate safeguards and it realises that some element of loss is unavoidable. It is pleased to note, however, that in view of the expansion of the Department’s activities it is proposed to overhaul the system of control and it trusts that it will be found possible to devise an economical method which will reduce losses to a minimum.

13. Reference was made to the difficulties which arose in connection with the stocktaking of fencing materials at forestry centres. In view of the large quantities of wire netting and barbed wire held, and the disproportionate cost of physically moving and counting the rolls, the contents of the stores were estimated by volume. It was stated that a full stocktaking would be undertaken when the quantities held had been reduced by issues for current use.

The Committee appreciates the difficulties, which rose from the considerable stockpiling of fencing materials, and it trusts that every effort will be made to have a complete reconciliation of stocks in hands effected with the least possible delay.

Public Works and Buildings.

14. Section 13 of the Arterial Drainage Act, 1945, provides for the issue, by the Minister for Finance, of a certificate of completion in relation to drainage works undertaken by the Commissioners of Public Works. Under the terms of section 37 of the Act, expenditure on maintenance subsequent to the issue of such certificate is recoverable from county councils. The Committee was informed that the Brosna drainage scheme, which cost £1,157,430 to 31 March, 1954, had been completed for some time past and that expenditure had been incurred on maintenance. It is understood that pending amendment of section 37 of the Act in order to clarify the basis on which the amounts to be recovered from county councils should be assessed, expenditure on maintenance had been charged to construction works. The necessary amendment was made by the Arterial Drainage (Amendment) Act, 1955, which became law on 30 November, 1955, and the Accounting Officer stated that a certificate of completion was in course of issue. Having regard to the potential loss to State funds arising from any delay in issuing certificates of completion, the Committee wishes to stress the importance of issue being made at the earliest possible date.

15. In the course of a discussion on the records relating to plant and machinery the Accounting Officer stated that separate records of the mechanical and financial history of each machine were kept, but they were considerably in arrear owing to shortage of clerical staff. The Committee feels that the maintaining of these records is a matter of importance and trusts that every effort will be made to bring them up to date.

Primary Education.

16. Provision is made for the payment of contributions towards the cost of conveyance of children to national schools subject to certain conditions relating to the ages of the children, the distances they have to travel, and the daily average number conveyed. The attention of the Committee was drawn to a case in which the returns furnished by the manager of the school in support of claims were inaccurate. Payment of a State contribution was sanctioned by the Department of Finance on the condition that a daily average of 15 eligible children would be conveyed for each quarter of the year. A departmental investigation of the claims furnished by the manager revealed, however, that children who were ineligible had been included, with the result that the daily average of eligible children carried since the service commenced fell below the required number.

The account under review included contributions amounting to £230 in respect of the service in question and £880 had been contributed since it was initiated. With a view to regularising the payments, the sanction of the Department of Finance was sought to reduce retrospectively the daily average requirement from 15 to 8 eligible children.

The Accounting Officer stated that arrangements had been made for more comprehensive checks of the numbers of eligible children and the distances they had to travel than those hitherto applied. The Committee trusts that these measures will provide adequate safeguards against incorrect payments and will be glad to be informed of the outcome of the representations made to the Department of Finance in the case under notice.

17. Students attending Preparatory Colleges are required to pay an annual fee. The maximum fee is £50 per annum but, in accordance with a scale approved by the Department of Finance, lesser amounts are accepted in cases where the family income or general circumstances appear to justify a reduction. Attention was drawn to certain cases in which the fees assessed appeared to be less than those warranted by the circumstances and it was stated by the Accounting Officer that the scale of fees, which was laid down in 1949, had become quite out of date in relation to the current cost of living and that the question of its revision was under consideration.

Whilst the Committee realises that a case may exist for the modification of the range of fees prescribed in 1949 it considers that the prior approval of the Department of Finance should have been obtained before a departure from the approved arrangements was permitted. It will be glad to learn, in due course, whether the proposals for revision have been accepted by that Department.

Defence.

18. A scheme for the erection of a number of houses for married soldiers, at an estimated cost of £150,000, was commenced in the year under review. As the Office of Public Works could not give the project the required priority it was decided to carry out the work by direct labour under the supervision of the Corps of Engineers. No provision for the scheme was included in the estimate and, with the approval of the Department of Finance, expenditure incurred in the period to 31 March, 1954, amounting to approximately £2,000, was charged against the provision for maintenance and minor works.

Having regard to the magnitude of the proposed capital expenditure the Committee considers that parliamentary authority should have been obtained before the work was started. It notes that in the estimate for the year 1954-55 provision for expenditure on the scheme is included under subhead S. (Barrack Maintenance and New Works). It is of opinion that capital expenditure of appreciable amount should be provided for under a distinct subhead.

Stationery Office.

19. Stocktaking of stores held by the Stationery Office is carried out at the close of each financial year, the latest results available to the Committee being those at 31 March, 1952. The Accounting Officer explained that the introduction of changes in contractual and accounting procedure in recent years had been given priority over the work of reconciling physical stocks with ledger balances. He added that it was proposed to introduce a new system of store accounting with a view to improving stock control and facilitating the investigation of discrepancies. The Committee notes the measures taken and will be glad to be informed when the arrears have been cleared.

20. The Committee was informed that following a census of typewriters and other office machinery in use throughout the public service certain discrepancies came to light and were in course of investigation. The Accounting Officer stated that when this work had been completed, it was intended to reconcile departmental and stationery office records at regular intervals and also to obtain certificates that machines were in actual use and not surplus to requirements. The Committee notes with satisfaction the steps about to be taken to secure effective control, particularly having regard to the expanding use of costly machines. It will be glad to be informed as to the results of the investigation mentioned.

21. In connection with contracts placed by the Stationery Office for the printing of Government publications, etc., it is the practice to supply stocks of paper to contractors in advance of the issue of printing orders, and on completion of the contracts, any unused quantities of paper are required to be returned to the Stationery Office. It was brought to the notice of the Committee that on the completion of certain contracts, delay had occurred in the return of unused paper. In one case paper of an estimated value of £1,200 was involved and the Committee was informed that delay in adjusting the matter arose owing to disagreement with the contractor regarding the precise quantities outstanding. Sums totalling £1,200 due to the contractor were being withheld pending settlement. As these contracts continue in force for long periods, the Committee hopes that an economical arrangement for the verification of stocks of paper in the hands of contractors, where the quantities are considerable in value, will be made.

(Signed) FRANK CARTER,

Chairman.

20th June, 1956.