Committee Reports > List of Committees > Dáil > 1957 > Committee of Public Accounts > Report - Appropriation Accounts 1955 - 1956

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 3 Deireadh Fómhair, 1957.

Thursday, 3rd October, 1957.

The Committee sat at 11 a.m.

DEPUTY DILLON in the chair.

Liam Ó Cadhla (An tArd-Reachtaire Cuntas agus Ciste), Miss M. Bhreathnach, Mr. P. S. Mac Guill, Mr. J. F. Maclnerney and Mr. L. V. O’Neill (Department of Finance) called and examined.

VOTE 64—DUNDRUM ASYLUM.

Dr. W. J. Coyne called.

No question.

The witness withdrew.

VOTE 24—STATIONERY OFFICE.

Mr. T. J. Malone called and examined.

143. Chairman.—Paragraph 28 of the Report of the Comptroller and Auditor General reads:—

“Subhead D.—Printing and Binding.

28. After the appointed contractor had set up the type for the 1954 issue of the telephone directory, changes in the format introduced by the Department of Posts and Telegraphs necessitated complete resetting. The cost of the original setting was £2,358 and it was estimated that this amount would be recovered over a period of five years by savings in the cost of printing and paper resulting from the altered format. I have asked whether any assessment has been made of the savings realised on issues of the directory for the period up to and including the 1956 issue.

A reserve stock of paper purchased in 1952 for approximately £8,000, for which no other immediate demand was foreseen and which was subject to deterioration, was used in the production of the 1954 issue of the directory. The use of this stock necessitated certain additional expenditure which appeared to be justified in the circumstances.”

Have you anything further to add, Mr. Ó Cadhla?

Mr. Ó Cadhla.—I might mention that the complaint in the paragraph refers to Post Office procedure rather than to that of the Stationery Office. It struck me that if the Post Office had decided at an earlier date on the alterations in the format of the entries in the directory, the nugatory expenditure referred to might have been avoided. The Accounting Officer has informed me that he anticipates that the savings over five years will cover the additional expenditure. I understand that the savings realised on the first three issues amounted to £1,170.

144. Chairman. — Is it expected, Mr. Malone, that the nugatory expenditure would, in fact, be cancelled out by savings over a five-year period?—That is so.

Deputy Haughey.—There is still a very substantial saving on the subhead as a whole of £24,000.

145. Chairman.—Paragraph 29 of the Report of the Comptroller and Auditor General is as follows:—

“Subhead E.—Paper.

29. The charge to this subhead includes £670 expended on the purchase of certain kinds of paper. As it appeared that having regard to average annual consumption adequate stocks were available, I inquired as to the necessity for the purchase.”

Have you anything to add to that, Mr. Ó Cadhla?

Mr. Ó Cadhla.—This paragraph covers two cases. In the first the supply of approximately 90 reams of paper was purchased at a cost of £387 for the production of the volume Hugh Lane and his Pictures. A stock of 212 reams of this paper was held at the date of the order and issues over the previous three years were only 27 reams. The Accounting Officer in his reply to my inquiry explained that considerable importance was attached to the production of this volume which was sponsored by the Arts Council and a high standard of production was essential. As the stock of this paper held consisted of oddments of various makings purchased on different occasions and as there was not a sufficient quantity of any making to ensure the book would be printed on paper of uniform quality, shade and finish, it was necessary to purchase a special supply. In the second case, 88 reams of paper were purchased for £283, although a stock of 94 reams of this paper was held on the 1st April, 1955, and issues in the two years ended March, 1956, totalled only seven reams. The Accounting Officer explained that, according to the ledger records, the stock had fallen in December, 1954, below the minimum stock level and, in accordance with the usual procedure, an order for replenishment was issued in January, 1955. In other words, there was an error in the recording of the stocks. The purchase was due entirely, it seems, to the fact that this error was not discovered in time.

146. Chairman.—In regard to the first case, I think it is pretty obvious that if the publication required paper of a uniform type it was necessary to ensure that uniformity would be obtained. In regard to the second case, I suppose Homer nodded?—We did not then have a 100 per cent. check on our stock records, Sir, and, unfortunately, this was one of the items which was not checked. There was an error. The paper will not go to waste. We will use it.

147. I take it that at some stage in each year a complete stocktaking of the stock of the Stationery Office is made? —That is so, Sir.

148. Was there an error in the stocktaking on this occasion?—There was an error in the stock records. The stock ledger showed 100 reams less than we had.

Deputy Booth.—There was nothing significant about that?

Chairman.—I am suggesting that Homer nodded?—That is so, Sir.

I take it that this is not a significant error and that it is one which is not likely to recur?—It was an unfortunate happening. Of course, where we have not a 100 per cent. check on records it may occur now and again. In fact, it does occur.

We may take it that the stock checks of the Stationery Office are normally accurate? — Reasonably accurate having regard to the enormous stocks we hold.

149. Deputy Booth.—From a business point of view I know how difficult it is to get a 100 per cent. check but is it possible to have a check going on during the year?—It would be very difficult. Stocks are constantly moving in and out.

Mr. Carty.—Would it be possible to have what we call spot checks every quarter or every six months?

Chairman. — You point out, Mr. Malone, that stocks are very large, but I think the Committee would feel happier if they had your assurance that the annual stocktaking would provide you with an accurate record of what stocks were on hand?—It does, but discrepancies come to light. Somebody issues a supply of paper and, unfortunately, it is recorded under another paper. There is quite a number of types of paper. They differ very slightly in appearance and packing. The human element is there and a mistake is liable to occur, and does, in fact, occur. Practically every year we have the difficulty of stocktaking discrepancies. We have a surplus in one case and a deficiency in another case. Relatively, the discrepancy in terms of our whole stock is very small. It is insignificant, I think.

150. Deputy Haughey.—I presume the Comptroller and Auditor General investigated fully the purchase of the second lot, the 88 reams? Was it from the normal supplier and at the normal price, and so on?

Mr. Ó Cadhla.—It was fully investigated.

Deputy Haughey.—The purchase was from the normal supplier?

Mr. Malone.—Yes, in the normal way, under contract after tenders had been invited.

Deputy Haughey.—If that is so, I do not think there is any significance in this.

151. Deputy Booth.—On subhead D.— Printing and Binding—the note says: “Printing and binding requirements for the Public Service fell substantially below the level of recent years”. Is there any reason to believe that the level will remain low or is it that in that particular year it fell below and that in subsequent years it will go up?—I cannot say.

Chairman.—I am afraid it would be no exaggeration to say it depends on the Deputy’s and my speeches. Is that not so? —Yes.

152. Chairman.—If that is spread over all Government publications, I think Mr. Malone has a complete alibi in that regard. If it would not be too much trouble I think the Committee would be glad to have a note from you at your convenience on the procedure in regard to the annual stocktaking and your view as to the accuracy and dependability of the annual stocktaking?—I will send that.*

The witness withdrew.

VOTE 50—INDUSTRY AND COMMERCE.

Mr. J. C. B. MacCarthy called and examined.

153. Chairman.—Paragraph 67 of the Report of the Comptroller and Auditor General reads:—

“Subhead J.1.—Food Subsidies.

67. The expenditure charged to this subhead is made up as follows:—

Does Mr. Ó Cadhla wish to add anything to that?

Mr. Ó Cadhla.—No.

154. Chairman.—Paragraphs 68 and 69 of the Report of the Comptroller and Auditor General read:—

“68. The payments in respect of flour subsidy were made to Grain Importers (Éire), Limited, as follows:—

69. Payments are made by Grain Importers (Éire), Limited, to the millers to ensure to the industry as a whole remuneration equivalent to 4s. 6d. per sack of flour produced after charging all admissible expenses. The sum of £6,786,923, which is subject to adjustment following examination by the Department of the millers’ accounts, represents the difference between the average cost of production of flour, together with the permitted profit of 4s. 6d. per sack, and the controlled selling price in force during the year ended 25 February 1956.

Prior to 25 April 1953, subsidy was calculated by reference to a percentage of an agreed figure representing capital employed in the milling industry together with the cost of any capital provided in excess of the agreed figure. Including £75,000 in the year under review, £745,000 has been paid in respect of provisional adjustment of subsidy for the period 1 September 1950 to 25 April 1953.”

Mr. Ó Cadhla.—I understand that the examination of all accounts up to and including 1951-52 is completed. I do not know what progress has been made after that date.

155. Chairman.—Can you tell us. Mr. MacCarthy, what the present position is in that regard?—Yes. We have to move fairly fast on that because of the dropping of the subsidy and we have been making rather a strong effort. We hope to have cleared up to the end of 1955 in the immediate future and then we have to devise some arrangements for dealing with the accounts, so that, if possible, we shall not have any provision in next year’s Estimate for this subsidy. Whether we shall achieve that or not I do not know. We have put extra accountancy staff on the examination of these accounts.

156. The subsidy ceases as at the end of the financial year 1956-57? — It ceases roughly at Budget time, a date in May of this year.

Of 1957?—Yes, that is to say it ceases in respect of flour manufactured after that date but of course millers’ accounts are largely in arrears and that is our difficulty. We cannot be certain we can get them all in and have them examined before the 31st March, 1958.

157. You expect to have cleared the accounts up to the end of 1955?—That will finalise these years. We have always been about three years in arrears with these accounts, and when I say the end of 1955 I mean in respect of the milling year 1955. We hope to have these accounts finished and an absolutely firm figure reached which will mean there would not be any adjustments in respect of those earlier years after 31st March, 1958.

158. Will there then arise any necessity for adjustments in respect of the years subsequent to 1955? — Yes, there probably will because the subsidy was paid to Grain Importers (Éire) Limited, and they made advances to the millers. The exact amount payable in each case could be determined only when the audited accounts for the miller were received at the end of the year. There has been a history of adjustment all along so there are almost certain to be adjustments in respect of 1956-57 and the couple of months of the current year. What I have said is that we hope to have these latter adjustments made before the 31st March next but we may be a little bit too optimistic in that.

So that the accounts probably will be finally closed in respect of every subsidy year in the course of the coming financial year?—That is our hope.

159. Paragraphs 70 and 71 of the Report of the Comptroller and Auditor General read:—

“70. Following an announcement by the Minister for Finance in his Budget speech in May 1955 of the Government’s decision to withdraw subsidy on flour used in the manufacture of confectionery and biscuits, the Minister for Industry and Commerce indicated in Dáil Éireann that exporters of these commodities would receive a rebate in respect of the flour content of such exports. The rebate granted represents the difference between the price paid for unsubsidised flour and the price at which comparable flour was available to manufacturers in England. The payments made to Grain Importers (Éire) Limited, include £12,102 in recoupment of rebates allowed to exporters.

71. Reference was made in paragraph 60 of the report for 1952-53 and in paragraph 67 of the report for 1953-54 to advances of £13,500 and £6,000 respectively, made in respect of the remuneration of importer-distributors for the 15 months to 31 March 1951. The total remuneration payable for this period was agreed at £19,569 and the sum of £69 represents the final payment under this head.”

Chairman. — Am I right in believing that this importer-distributor allowance has now ceased altogether?—No. It will have ceased in so far as we are not now paying subsidy but the importer-distributors are still, of course, in existence and acting as agents of Grain Importers (Éire) Limited. Their activities no longer impose any charge on the Vote. These were the old importers. When Grain Importers were set up they appointed these people as their agents. They handled the wheat, put it in store and distributed it on the instructions of Grain Importers and they were remunerated at a certain rate. The rate has changed a bit. It had been roughly 7/6 a ton, and that was raised to 8/1 a ton in November, 1956. The functions are still being carried on, but it is the consumer of flour who is paying for them now and not the taxpayer.

160. Do they all discharge some function?—Their functions vary. The services performed in Cork, Limerick and Waterford are remunerated at the ordinary commercial rates and the people in these centres actually take in the wheat, do the unloading and the distribution. They are responsible also for arranging carriage and delivery to the premises. I think that in Dublin there is a rather different arrangement. The millers are nearer to them and the profit arrangement in the Dublin area is designed to give these importer-distributors 1/6 a ton. That reflects the difference in the expenses. In the other cases the distribution is over a wider field.

Do the importer-distributors in Dublin in fact do anything?—I cannot say exactly. According to my recollection while they may not handle the wheat or unload the vessels, they may store some wheat and carry out the deliveries to the mill or to the railway station if the wheat is being consigned to some miller down the country.

161. I seem to remember something in the Flour and Bread Report to the effect that the functions of these gentlemen were practically non-existent. Could I ask you, at your convenience, to let us have a note on what exactly the functions of these importer-distributors are and for what work they are remunerated?—Very good, sir.* Does that refer to all of them or just the Dublin ones?

To all of them if it would be convenient?—Yes.

162. Chairman. — Paragraphs 72 and 73 of the Report of the Comptroller and Auditor General are as follows:—

“72. The subsidy on wheaten meal was paid to millers at varying rates representing the difference between the average cost of production together with a profit of 2s. 6d. per sack and the controlled selling price. The sum of £110,607 charged to this subhead comprises £21,988, being final payments of subsidy made to millers for the cereal year 1953-54, and provisional payments of £55,098 and £33.521 for the cereal years 1954-55 and 1955-56, respectively.

Subhead K.—Fuel Subsidy.

73. The sum of £250,000 was paid to Fuel Importers (Éire) Limited, on account of the balance of losses outstanding at 31 December 1955, which amounted to £502,918. The total amount paid to the company up to 31 March 1956 was £10,546,373.”

Is there anything you care to add to that, Mr. Ó Cadhla?

Mr. Ó Cadhla.—I think there is a residue of about 90,000 tons of American coal remaining on hand, the book value being approximately £800,000. The balance due in respect of trading losses up to the 31st March, 1956, was approximately £312,000.

163. Chairman.—Could you tell us, Mr. MacCarthy, what it is proposed to do with the balance of the American coal?— The disposal of that stock is under examination at the moment. Negotiations are proceeding with the coal merchants and some of the larger industrial users. It is really a matter of the price at which they tender.

Is it anticipated that it will all be got rid of in the early future?—That is the hope. Disposal was postponed several times. It was postponed originally because of the Korean War and difficulties connected with that. We were all ready to dispose of it again when the Suez crisis came along. It was thought then that with the possible shortage of fuel oils it would be unwise to get rid of it. It was held. Now we feel we ought to dispose of it and that we are trying to do.

Chairman.—In the circumstances, we can wait until the next Appropriation Account and Mr. MacCarthy will probably be able to tell us of any future developments in regard to this residue on that occasion.

164. Paragraph 74 of the Report of the Comptroller and Auditor General is as follows:—

“Minerals Development.

Subhead L.1.—Payments to Mianraí, Teoranta, for Prospecting.

74. Section 5 (2) of the Minerals Company Act, 1947, as amended by Section 3 of the Minerals Company (Amendment) Act, 1950, authorised the Minister for Industry and Commerce, with the consent of the Minister for Finance, to pay to Mianraí, Teoranta, in each of the financial years 1947-48 to 1953-54, inclusive, a sum not exceeding £85,000 for prospecting and for the purchase of land and mineral rights. Reference was made in paragraph 74 of the report for the year 1954-55 to the payment in that year of a sum of £88,700 although the statutory provision for such payments has been exhausted, and to the Minister’s statement in October 1953 that he would ask An Dáil to vote sufficient funds to complete the scheme without specific legislative authority other than that contained in the Appropriation Act. A further provision of £40,000 was included in the Estimate for the year under review and £35,580 was issued to Mianraí, Teoranta, out of that provision.”

Is there anything you care to add, Mr. Ó Cadhla?

Mr. Ó Cadhla. — The company now exists only in name. All its assets have been disposed of.

Chairman.—And the issue of £35,580 finished the liability in respect of Mianraí, Teoranta?

Mr. Ó Cadhla.—Correct.

165. Chairman. — There will be no further Estimate in respect of Mianraí, Teoranta?

Mr. MacCarthy.—There may be, Sir, yes. This particular part referred to the Avoca scheme, that was, payments for actual prospecting work. There will be nothing further there. But, in relation to Mianraí, there will almost certainly be a Supplementary Estimate for the purpose of clearing up the question of advances in Slieveardagh. The Minister, in fact, several years ago, undertook in the Dáil to bring in a Supplementary Estimate because he had got the approval of the Dáil for exceeding the statutory limit of advances. He indicated that he would prefer not to introduce amending legislation until he knew what the final position was and what the figure to be written off was, but we have not yet got to finality on that. There will certainly have to be some action with the Dáil, either by way of Supplementary Estimate or by way of an amending Bill.

166. Chairman. — There was some money brought to credit, was there not, in respect of Avoca, which was paid by the Canadian company in respect of prior expenditure?—That is not paid yet. The arrangement with the Canadian company is that out of the profits to be made when they go into production there will be a first liability to us for the recoupment of something of the order of £500,000 which was spent on the exploration and development of the deposits but that does not become payable until (a) they go into production, and (b) they have profits from their operations.

Would that ordinarily appear as an Exchequer extra receipt?—I suppose it would, Sir, yes.

167. Chairman.—Paragraph 75 of the Report of the Comptroller and Auditor General is as follows:—

“Operations of Bord na Móna.

Subheads M.1 and M.2.

75. The issues from the Grants-in-Aid during the year comprised £10,000 for experiment and research (subhead M.1) and £11,400 for grants for housing (subhead M.2.).”

I take it that is informative?

Mr. Ó Cadhla.—Informative.

168. Chairman.—Paragraph 76 of the Report of the Comptroller and Auditor General is as follows:—

“76. Section 52 of the Turf Development Act, 1946, as amended by Section 2 of the Turf Development Act, 1950, provides for the payment out of voted moneys of grants towards the expenses incurred by Bord na Móna on experimental and research work, subject to a limitation of £250,000. The issues under this head amounted at 31 March 1956 to £219,800.”

Mr. Ó Cadhla.—This paragraph also is informative.

169. Chairman.—Paragraph 77 of the Report of the Comptroller and Auditor General is as follows:—

“77. Section 6 of the Turf Development Act, 1950, as amended by Section 3 of the Turf Development Act, 1953, provides for the payment to Bord na Móna of grants towards the expenses incurred by the Board under approved schemes for the building of houses for occupation by servants of the Board. The maximum grant payable per house is £570 and the total amount of such grants is limited to £420,000. The issues to 31 March 1956 amounted to £326,040.”

Are they still building houses?

Mr. MacCarthy.—No, Sir. That is discontinued. There has been no expenditure since 1955-56.

170. Chairman.—Paragraph 78 of the Report of the Comptroller and Auditor General is as follows:—

“78. Included in the Exchequer extra receipts is a sum of £153,681 received from Bord na Móna in discharge of the outstanding liability in respect of advances made to the Turf Development Board, Limited, from voted moneys in the period from 1936-37 to 1945-46, inclusive, for the development of certain bogs.”

Mr. Ó Cadhla.—The total advances of £445,000 have been repaid in full.

Chairman.—This payment completes it?

Mr. Ó Cadhla.—Yes.

171. Chairman.—Paragraph 79 of the Report of the Comptroller and Auditor General is as follows:—

“79. As indicated in previous reports the local schemes for the production of machine-won turf, which were taken over from county councils in January 1948, were discontinued and the equipment and stores disposed of. A sum of £3,394, being the unexpended balance of grants on the winding-up of these schemes, was received from Bord na Móna and is included in the Exchequer extra receipts.”

I take it this payment was also one designed to wind up the liability?

Mr. Ó Cadhla.—Quite correct.

172. Chairman.—Paragraph 80 of the Report of the Comptroller and Auditor General is as follows:—

“Subhead W.—Grant to Min Fhéir, Teoranta, for Capital Purposes.

80. In previous reports reference was made to the incorporation, under the Grass Meal (Production) Act, 1953, of Min Fhéir, Teoranta, and to the limit of £165,000 imposed by Section 14 of the Act on the aggregate amount of grants to be made to the company for capital purposes in connexion with the acquisition, drainage and cultivation of bog-land in the Bangor Erris area, the processing of grass and other plants and the carrying on of kindred and incidental activities. Including £4,300 issued in the year under review, the grants made to the company for capital purposes totalled £29,050 at 31 March 1956. It was decided in June 1955 that the company should be wound up and that the development of the bog-land referred to, comprising approximately 2,400 acres, should be undertaken by the Departments of Agriculture and Lands (see paragraphs 31 and 61).”

Do you wish to add anything to that, Mr. Ó Cadhla?

Mr. Ó Cadhla.—No. That is for information.

173. Chairman.—Vote 51—Transport and Marine Services—is really a separate Vote. For clarity’s sake it may be better to turn to the subheads of the Vote and dispose of them and then turn to paragraph 81. In regard to subhead P., does this year cover the acquisition of 26 Merrion Square by the Industrial Development Authority, Mr. MacCarthy? —That is the Industrial Credit Company.

174. Deputy Booth.—In regard to subhead T., what does that actually cover? Is that the erection of the Trade Pavilion or does it include any payment in respect of what is displayed?—That is just the maintenance, etc. of the building. These are in fact expenses which would ordinarily be met, if it were at home, by the Office of Public Works but because it is abroad the work is done by German contractors and we pay them from this Vote.

175. In regard to subhead U.3, the note says: “Excess due to cost of verbatim reporting”. Was it not reported verbatim before or was it your point, Mr. Chairman, that somebody was talking too much?

Chairman.—Was the extra cost under U.3 due to a change in procedure?—No; simply due to the length of the particular inquiry.

176. Chairman.—So that I am afraid, Deputy, your second alternative explanation is the correct one. In regard to subhead V., I notice the expenditure was very substantially less than anticipated. I see that the note says that the progress in regard to approved projects was not as rapid as was expected?—That is so, Sir, yes.

Was there any corresponding payment from the Marshall Aid Fund in respect of that?—No. The sub-agreement was signed on 14th June and anything spent before the 14th June is not recoupable.

177. In regard to subhead Y.—Appropriations in Aid—here the marked difference between the estimate and that realised is due to the same circumstance?—Exactly the same, yes.

178. Deputy Haughey.—With regard to subhead S.1—Grant to An Foras Tionscal —I presume that the £135,000 represents actual grants made to firms. Is that so?

Chairman.—In regard to subhead S.1, does this represent grants made to individual firms or does this represent the annual grant to An Foras Tionscal who thereafter are responsible for its disbursement?—That is so. The correct situation is as you have put it. But, in fact, we do not make the issues from the Vote until An Foras Tionscal need the money for disbursement to individual firms, so that the two should really be much the same.

179. Deputy Haughey.—Are the names of the people to whom the grants are issued published in any way or disclosed? —There is an annual report of An Foras Tionscal which is laid before each House of the Oireachtas. I am sorry I have not a copy of the latest one with me. They report in respect of each financial year and they give details in that report of their operations.

Chairman.—That is to be found in the Library of Dáil Éireann or, of course, a copy would be furnished to any member of this Committee who requires it.

VOTE 51—TRANSPORT AND MARINE SERVICES.

Mr. J. C. B. MacCarthy further examined.

180. Chairman.—Paragraph 81 of the Report of the Comptroller and Auditor General is as follows:—

“Subhead A.1—Córas Iompair Éireann

81. The charge to this subhead represents the sum repaid to the Central Fund in recoupment of the amount advanced to Córas Iompair Éireann in the year ended 31 March 1955 to meet payments of interest on transport stock. This is in accordance with Section 30 (7) of the Transport Act, 1950, which prescribes that any such advance out of the Central Fund which has not been repaid by the Board within twelve months from the date of the advance, shall be repaid out of moneys provided by the Oireachtas.”

That, I take it, is informative?

Mr. Ó Cadhla.—Yes.

181. Chairman.—Paragraph 82 of the Report of the Comptroller and Auditor General is as follows:—

“Subhead A.2—Great Northern Railway Board

82. The agreement scheduled to the Great Northern Railway Act, 1953, provides for the apportionment between the Minister for Industry and Commerce and the Minister of Commerce, Northern Ireland, of the profits and losses, and the capital requirements, of the Great Northern Railway Board. Section 30 of the Act authorises the Minister for Industry and Commerce to pay to the Board the amount of any loss for which he is liable and to make advances towards making good any anticipated loss for which he would be liable. Section 33 authorises him to make payments to the Board to meet any capital expenses to be provided by him under the agreement. The certified accounts of the Great Northern Railway Board for the accounting periods ended 30 September 1954 and 30 September 1955 show the total liability of the Minister for Industry and Commerce in respect of the losses and the capital expenses of the Board for these periods to be £917,250, comprising £559,550 for losses and £357,700 for capital expenses. Advances made to the Board out of voted moneys in 1953-54 and 1954-55 on foot of this liability amounted to £530,627.”

Do you wish to add anything, Mr. Ó Cadhla?

Mr. Ó Cadhla.—I have nothing further to add to the information contained in this paragraph.

182. Chairman.—Paragraphs 83, 84 and 85 of the Report of the Comptroller and Auditor General are as follows—

“83. The charge to this subhead comprises payments as follows—

84. Pursuant to Sections 30 and 33 of the Great Northern Railway Act, 1953, £36,327 was received from the Board being interest on payments made for the accounting periods ended 30 September 1954 and 30 September 1955. It has been brought to account as an Appropriation in Aid.

Extra Receipts payable to Exchequer

85. Reference was made in paragraph 81 of the report for the year 1953-54 to the agreement reached between the Minister for Industry and Commerce and the Minister of Commerce, Northern Ireland, relating to the apportionment of the operating losses of the Great Northern Railway Company (Ireland) for the period 1 January 1951 to 31 August 1953. Advances amounting to £723,337 were made out of voted moneys in the years 1951-52, 1952-53 and 1953-54 to meet the liability of the Minister for Industry and Commerce. A final analysis of the company’s financial operations for the period referred to disclosed that this administration had made payments of £214,734 in excess of its liability. This sum was refunded by the Great Northern Railway Board and is included in the exchequer extra receipts.”

Is there anything you wish to add to paragraph 85, Mr. Ó Cadhla?

Mr. Ó Cadhla.—No.

183. Chairman. — I take it Mr. MacCarthy, that in arriving at the estimates of what are due to these companies it is not easy to arrive at an accurate figure?—Very, very difficult, Sir, because, of course, what is needed depends on how they do in the coming year. In each year we have two operations. We pay in respect of the ascertained losses roughly half of what we spend each year —that is half in respect of ascertained losses of a previous period and the balance is an advance towards possible losses in the succeeding period.

Therefore, by its very nature we must expect fairly wide margins pro and con? —Yes.

Each involving substantial refunds or possibly substantial supplementary payments?—Yes.

184. If there is no other question, we may turn to the Vote itself on page 155. Under subhead A.5. there was no original provision for this service, for the Galway-Aran boat? It is all by way of Supplementary Estimate, Mr. MacCarthy?—Yes.

Was there any special reason?—Well, the reason really was that C.I.É. had taken over the Dún Aengus in pursuance of the arrangement made with the Minister. They discovered that it needed extensive repairs and reconditioning which they had carried out in 1951-52 and they protested that it was not fair to saddle them with the cost, as they had merely taken over the service at the request of the Minister. It was decided that there was substance in the C.I.É case and the Supplementary Estimate was introduced.

185. From whom was the Dún Aengus acquired?—There was an old arrangement, Sir, with the Galway Bay Steam Boat Company under which the Galway Bay Steam Boat Company became indebted to the Government. The Government had a lien on the assets of the company. The company failed to meet their obligations and the vessel became in effect the property of the Government. In 1949 the Government decided that the method of operation of this vessel in future should be to transfer it to C.I.É. It was really a Government vessel at that stage and was transferred to C.I.É. who represented afterwards that the Government had transferred a rather unseaworthy vessel to them and that it was not fair to saddle them with the responsibility of putting it in order.

186. The Galway Bay Steam Boat Company, I gather, had nothing?—They had nothing. They got a certain amount of compensation at the time, but I have not the figure with me. That was a matter of 10 years ago.

187. I suppose they have long ceased to exist?—I imagine so.

So even if there were a claim against them we need not pursue it?—That is so.

188. Deputy Haughey.—The Accounting Officer says the decision to hand over to C.I.É. was made in 1949. This expenditure was in 1955/56?—The decision was taken in 1949. The boat was actually taken over by C.I.É. in 1951. Then, of course, it was unsatisfactory and all these representations went on. It was not until some time after the main Estimate for 1955/56 had been introduced that we got down to finality and decided that the State would undertake responsibility for the repairs.

189. Deputy Brennan.—And after spending £23,302 on its repair they have now got rid of it, a year and a half afterwards?—Yes. They have decided now that they ought to go ahead and get a new one.

Chairman.—I take it that as soon as they took it over in 1949 they had an obligation to make it seaworthy, for fear they might lose the passengers?—Yes.

Deputy Haughey.—Some of them were quite distinguished.

And now they have determined they can work more economically?—Yes.

190. Chairman.—The solicitude of the Irish Republic is for its humblest citizens. What has become of the boat?—I do not know what happened to the existing boat. I do not think they have disposed of it yet. Part of the delay, incidentally, in meeting the claim was due to an insurance company being involved in it, in respect of boilers and so forth and that actually delayed the payment of the claim.

191. Lest it might appear on the record that this Committee was less solicitous than it should be, even if we did recover a substantial sum from C.I.É. by way of compensation for this outlay, would I be correct in saying that the high probability is that we would be thrusting our hand into the lefthand pocket in order to recoup the righthand pocket?—Without any question.

I do not think, Deputies, we should press for protracted arbitration as to where the liability in respect of this charge should fall, as it must ultimately fall on the Exchequer, no matter what the arbitrator’s report might be. In the meantime, the company will have to carry on the service as required?—Yes.

192. Deputy Brennan.—On subhead B, the note says that the savings were mainly due to delays by Harbour Boards in placing contracts. I thought the delay in these contracts, quite candidly, usually arose from delays by the Board of Works due to shortage of engineering staff.

Chairman.—Can you give us any particulars as to how these savings were due to delays by Harbour Boards?—I can give the various items covered by the expenditure and the items which have been covered by the Estimate on which the full expenditure is not made. I would say that the situation would vary. Sometimes there would be Board of Works delays and other times local authorities delays. There have been some fairly glaring cases of local authorities taking a long time after everything was sanctioned. The original provision made in the Estimate for 1955/56 covered Arklow Harbour and the work there was on a groyne construction, bar dredging and work on the wharf. The actual expenditure was £11,000 approximately and the saving was £8,000. What happened there was that the actual construction of the groyne was discontinued because it was decided it was not a good way of going about the job and the dredging then had to be suspended until the new groyne scheme was settled. In the case of Cork we had a relatively small saving. There was a total of £20,000; £17,700 was spent and the saving was £2,280. That was merely due to the work being a little slower than anticipated. In the case of Dublin, on the other hand, we had a very large excess—the provision was £67,000 in the Estimate but the actual expenditure was £111,000 because the work went ahead more rapidly than was anticipated. In Dundalk a provision of £15,000 was included but the actual expenditure was only £4,400. That was due entirely to technical reasons; they had to change their whole plan because of some technical difficulty. In Galway the provision was £50,000 and we had a saving of £30,000. That was entirely due to the local authority delay in inviting and considering tenders. In Limerick we had a saving of £18,000 on a total of £124,000; that was because a sum was provided for the purchase of a dredger but they were not really ready to order it during the year and they did not buy it. Then they got some technical advice on the matter which suggested to them that they ought to change their design slightly. In the case of New Ross, the Harbour Authority itself changed its mind and submitted modified proposals after a provision of £8,000 had been included, and spent only £9 out of the £8,000. In Rathmullen it was just the work itself that was slow; we saved £6,000 out of £20,000. In Tralee, which includes Fenit, on the other hand, we incurred an excess. In Waterford nothing happened because the Harbour Commissioners did not find it possible to raise the money for their share of the expenditure. In Westport it was a case of dredging. Dredging is something which is affected very much by weather and local conditions and that was responsible in the case of Westport and Wicklow for savings on provisions for dredging. That is the story so far as that particular year is concerned.

Deputy Brennan.—Thank you very much.

Chairman.—Does that cover your query, Deputy?

Deputy Brennan.—Yes.

193. Chairman.—On subhead L, what is this protective equipment for Irish ships? —It is a type of apparatus which is fitted underneath the ship for the purpose of protection against magnetic mines. It is a standard fitting on all newly built ships—at least, it is at the option of the person commissioning the building of a ship to have it included—but it is something which has to be attached to old ships. All this expenditure covers is the specifications and designing of the apparatus for the Irish ships. It does not include the actual purchase and it may well be that we may not purchase. That is a matter of policy for the Minister, but the work on designing and drawing up specifications and so forth will have been done as a result of this expenditure.

This is the modern version of degaussing a ship?—Yes, that is what it is called—degaussing.

Deputy Booth.—It is not so much a matter of identifying magnetic mines as of protection against them, rendering the ship unattractive to magnetic mines.

194. Chairman.—Is it contemplated that this money will be spent, or has it been spent, in subsequent years?—No, Sir. The specifications have been completed but I think that under one of the later years—last year—there was some actual expenditure. The work was done by the British and we paid the British Admiralty for their work.

VOTE 52—AVIATION AND METEOROLOGICAL SERVICES.

Mr. J. C. B. MacCarthy further examined.

195. Chairman.—There is a paragraph by the Comptroller and Auditor General as follows:—

“Subheads G. and H.—Constructional Works, including Furnishing of Buildings—Shannon Airport and Dublin Airport.

86. Expenditure during the year on constructional works including furnishing of buildings, at Dublin and Shannon Airports amounted to £43,424 and £65,118, respectively. The total expenditure to 31 March 1956, excluding the cost of acquisition of land, amounted to £1,339,102 for Dublin Airport and £2,063,758 for Shannon Airport.”

Is there anything you would wish to add, Mr. Ó Cadhla?

Mr. Ó Cadhla.—I have nothing to add, Mr. Chairman.

196. Chairman.—There is a further paragraph by the Comptroller and Auditor General as follows:—

“Operation of Dublin and Shannon Airports.

87. I have been furnished with statements giving particulars of the cost of operating Dublin and Shannon Airports. Dublin Airport is managed by Aer Rianta, Teoranta, on behalf of the Department and Shannon Airport is managed directly by the Department.

The expenses and receipts under their main heads are as follows (the figures for the previous year being shown in brackets):—

Deputy Haughey.—With regard to paragraph 87, under Dublin Airport there is shown a “Profit on catering” of £10,000. In the case of Shannon Airport it says “Receipts from catering etc.” Are we to take it that the receipts at Shannon, £86,000 was actual profit?— Yes, that is a profit on catering. The reason for the difference of treatment is that at Dublin it is Aer Rianta, a separate company, which has been designated as manager of the airport. Aer Rianta does everything and merely surrenders to the Minister any surplus that there may be. Now, as to whether it is a profit or not, of course, that is a somewhat vexed question, because it all depends on what you take into account in determining the profits. That is the object of this schedule which is set out in paragraph 87. It brings into account other things such as State services of one kind or another which are not taken into account by the managements. In the case of Shannon, the figure mentioned is a surplus of income over expenditure. You can call it an operating profit but in deciding whether it is a commercial profit or not you would have to have regard to all these other things—and that again is the reason for the breakdown under Shannon Airport in paragraph 87.

197. Deputy Haughey.—It is a terrific profit. By the way, is the Comptroller and Auditor General the auditor for Aer Rianta?—Yes.

198. Most of the other public bodies such as Bord na Móna send us a copy of their accounts. Aer Lingus or Aer Rianta do not. Could it be arranged that they would? — The Minister lays the annual reports and the accounts of all these bodies before the Oireachtas. The companies themselves may not send them but we make a presentation of them to the Oireachtas.

199. Chairman.—I do not think it is within the competence of this Committee to review all the accounts of State companies.

Mr. Ó Cadhla.—It is not. The only accounts coming before this Committee are the Appropriation Accounts—also the accounts of the management of the two airports.

Chairman.—But not of the companies concerned?

Mr. Ó Cadhla.—Not of the companies.

Chairman.—I think I am correct in stating that the position is that it has long been a matter for consideration by successive Governments both here and in Great Britain as to what is the appropriate machinery to review the accounts of State companies. There have been two or three commissions in Great Britain who tried to solve the position and I know that two Governments here have given protracted consideration as to what is the best machinery to employ. Nobody has yet arrived at a satisfactory solution but I think it has been agreed generally that the Committee of Public Accounts cannot properly act as the reviewing body as far as these accounts are concerned.

Deputy Haughey.—In the case of these companies there is a slight difference that the Comptroller and Auditor General is also auditor to the companies.

Chairman.—That is not deemed to establish a distinctive difference sufficient to justify intervention by the Committee of Public Accounts, but I think that if the papers concerned have been laid on the Table of the House the Deputy is entitled to raise any matter arising from the accounts on the Estimate as presented by the Minister to Dáil Éireann. However, there is undoubtedly a lacuna in Parliamentary procedure arising from the expenditure of these State Companies which no Parliament has yet succeeded in solving satisfactorily.

200. Chairman.—Would I be correct in saying that the annual charge to the Exchequer in respect of these two airports is correctly measured at the figure of £447,537?

Mr. MacCarthy.—That is correct.

Mr. Ó Cadhla.—I should think so. There may be a slight difference but it would be very small. In connection with Shannon Airport the figure is correct, taken from the Appropriation Accounts as certified. In the case of Dublin Airport the figures are extracted from the certified Income and Expenditure Account.

201. Deputy Haughey.—There is a figure given in the Vote on page 160 of the Appropriation Accounts in respect of receipts from Aer Rianta, Teoranta, in respect of management of Dublin Airport. The figure is £26,548. That does not seem to tally with the figure given in the note of the Comptroller and Auditor General. How does that come into the Vote?

Mr. MacCarthy.—It is brought to credit as an Exchequer extra receipt.

Deputy Haughey.—The receipts do not come into the Appropriations in Aid?— Shannon does but Dublin Airport does not. The expenses in the case of Dublin Airport do not fall on the Vote because Aer Rianta employ the management staff.

202. Chairman.—In fact, there is a deficiency ultimately in regard to the services rendered in respect of Dublin Airport of £208,061.

Deputy Haughey.—That is my reason for saying that in order properly to examine the Vote you would need to have these accounts.

Mr. MacCarthy.—It is only in respect of the management and the catering at Dublin Airport that this Aer Rianta complication arises. At Shannon Airport we have Colonel Maher as Manager and all his staff are paid out of this Vote. At Dublin Airport we have Aer Rianta who pay all of their staff themselves and the balance for the year is remitted and brought to credit as an Exchequer extra receipt, the figure being £26,548 this year.

203. Chairman.—When regard is had to the interest and depreciation charges and the total receipts at Dublin Airport the net charge to the Exchequer is £208,061. Is that correct?

Mr. Ó Cadhla.—That is correct.

Chairman.—And in respect of Shannon Airport the net charge is £239,476.

Mr. MacCarthy.—Even that could not be accounted so simply. These figures also take account of depreciation and to that extent there would be rather a duplication. Both Exchequer extra receipts and Appropriations in Aid are included under the heading referred to in the Auditor’s note.

204. Chairman. — The depreciation charge is something which would appear in the accounts of Aer Rianta?

Mr. MacCarthy. — No. Aer Rianta do not do the constructional work. Buildings are not included as an asset in their accounts. The buildings belong to the Minister for Industry and Commerce. They have never been transferred and they do not really appear on the Aer Rianta accounts at all. Perhaps I could give it to you in detail. We provide for depreciation at the rate of 4 per cent. per annum in respect of all capital expenditure whether on the construction of buildings at Shannon under subhead G. or at Dublin under subhead H. The Department of Posts and Telegraphs supply radio equipment and I think there is provision also for the meteorological services in so far as capital equipment is concerned. We apply to the total a depreciation rate of 4 per cent. per annum. Of course we do not produce a commercial account. We merely give these figures to show what Dublin and Shannon are costing.

Chairman.—On that basis, it would be correct to say that the cost of Dublin Airport to-day is £208,061.

205. Deputy Carty.—I notice that the amount shown for deficiency of revenue at Shannon Airport amounts to a net sum of £239,476. Compare that with the figure for Dublin Airport which is £208,000. Does that not suggest that it is more expensive to run Dublin Airport than Shannon?

Mr. MacCarthy.—There is no question about that in a relative sense.

Chairman. — Of course that would be due to the heavier traffic at Shannon.

Deputy Haughey.—And to the vastly heavier landing fees.

Mr. MacCarthy.—And the larger catering facilities.

206. Chairman.—We can now turn to the Vote itself.

Deputy Booth.—On subhead G., what exactly was the necessity for this expenditure? Is it purely in respect of oil installations or has it some significance from the aviation services angle?

Chairman.—Why do we want a larger boathouse and slip at Rineanna?

Mr. MacCarthy. — We moved the launch. It was headquartered at Foynes, but at the time of the K.L.M. accident it was found that it took the launch a great deal of time to get from Foynes to Rineanna. It was decided then to have a launch stationed at Rineanna. It was also decided that the type of launch then employed was not very good so we purchased a much more up to date and faster one. Of course, Rineanna is a distinct base from the Foynes base.

Chairman. — Does that explain the Deputy’s point?

207. Deputy Booth.—Yes. What about the approach lights? Are they there to guide aircraft and are they approach lights to Shannon Airport?

Mr. MacCarthy.—Yes. They were provided to guide aircraft to Rineanna.

208. Chairman. — We turn now to Appropriations in Aid. They are analysed at the bottom of page 161 and at the top of page 162.

Deputy Haughey.—There seems to be a difference between the figure of £529,000 given here and that given in the note of the Comptroller and Auditor General. Where does the difference come in?

Mr. MacCarthy.—The total receipts in the note by the Comptroller and Auditor General in paragraph 87?

Deputy Haughey.—Yes.

Mr. MacCarthy.—The immediate answer is that the only receipts we have taken into account in the Table set out in paragraph 87 are receipts germane to the operation of Dublin Airport and Shannon Airport. The particular item you are interested in includes revenue from such sources as fees under the Air Navigation and Transport Acts. These are not brought in at all for purposes of paragraph 87; they are fees in respect of the officers of the Department of Industry and Commerce who examine candidates for navigators’ licences and pilots’ licences. We would have that even if we had no State airport, as long as we had people flying. The same is true of a number of others.

209. Chairman.—All the Appropriations in Aid do not go into the paragraph in the Auditor’s Report?—No. We do bring in the receipts from landing fees, from the sale of crops, the letting of surplus land, the letting of offices and stores, receipts from staff hostels and passengers’ hostels and admission charges. Receipts from catering services also go in.

210. Presumably the Auditor’s note is a net figure and this is gross? — The receipts from the catering service for Dublin are shown as an Exchequer extra receipt. In the case of Shannon the catering accounts are made up half yearly and the surplus is remitted by the Comptroller. We got in three half years in 1955-56 but for the purpose of paragraph 87 only two (i.e., a year) were taken into account.

211. Deputy Brennan. — The amount realised from catering services at Shannon Airport, £131,562, is that net or gross?—That is net.

Chairman.—If Deputies will look at the note thoughtfully provided by Mr. MacCarthy, before the account was supplied, Note 11, they will see that “Profits exceeded estimate by £16,737 and in addition a sum of £52,625 came to hand in the year of account although not expected until after the close of the year.”

212. Deputy Booth.—What are concession fees?—The largest single item is the concession fees payable by the oil companies; the fee amounts to a fraction of a penny per gallon on aviation spirit sold. The Bank of Ireland pays a concession fee and some car-hire firms who have a concession pay concession fees also. The fees are for anything like that, let out on a concession basis. The largest one is the oil concession.

They pay rent as well?—If they take offices or any space of land they pay rent.

VOTE 53—INDUSTRIAL AND COMMERCIAL PROPERTY REGISTRATION OFFICE.

Mr. J. C. B. MacCarthy called.

No question.

VOTE 66—TOURISM.

Mr. J. C. B. MacCarthy further examined.

213. Chairman.—There is a paragraph by the Comptroller and Auditor General on page xxxii:—

“Grant for the Encouragement and Development of Tourist Traffic.

100. A footnote to the Estimate indicated that, dependent on the enactment of the Tourist Traffic Bill, 1954, and the date on which the Act came into operation, issues out of the grant would be made to the bodies established under the Tourist Traffic Act, 1952, or to the Board named in the amending legislation. The Tourist Traffic Act, 1955, which came into operation on 1 July 1955, provided that An Bord Fáilte should be renamed Bord Fáilte Éireann and that Fógra Fáilte should be dissolved and its functions and property transferred to Bord Fáilte Éireann. Issues from the grant in the year under review comprised £30,000 paid to Fógra Fáilte, £40,000 to An Bord Fáilte and £330,000 to Bord Fáilte Éireann.”

Is there anything to add to that, Mr. Ó Cadhla?—No.

There is only one subhead in this Vote and I think Mr. MacCarthy’s responsibilities end when he receives a receipt from the Tourist Board that they got the money?—Yes.

The witness withdrew.

The Committee adjourned.

* See Appendix XIV.

* See Appendix XV.