Committee Reports > List of Committees > Dáil > 1958 > Committee of Public Accounts > Report - Appropriation Accounts 1956 - 1957

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 24 Aibreán, 1958.

Thursday, 24th April, 1958.

The Committee met at 11 a.m.

Liam Ó Cadhla (An tArd-Reachtaire Cuntas agus Ciste), Miss M. Bhreathnach, Mr. C. J. Byrnes and Mr. P. S. MacGuill (Department of Finance) called and examined.

VOTE 63—HEALTH.

Mr. P. Ó Cinnéide called and examined.

196. Chairman.—In regard to subhead H, could you tell us how is the certification of accounts by the local health authorities proceeding. Is it up to date? —It is more up to date than it was in earlier years. I think it is fairly satisfactory at the moment. I could not tell you the exact position in relation to years and numbers but, generally speaking, it is regarded as being reasonably satisfactory.

I understand that, as at the end of the financial year, 1956-57, there were some audits going as far back as 1954-55 that were not then completed. Do you experience difficulty in getting these accounts certified?—The main delay occurs in the final audit of the accounts by the Local Government Auditors. It takes them some time to get round all the accounts and our final adjustment of payments in respect of health grants has to await their certification of the accounts. In the meantime, however, the local authorities have received up to 99.5 per cent of the estimated expenditure so that, in fact, the amount which they are out of pocket while awaiting final certification of the accounts is very, very small and we can always make adjustments later on if we have underpaid or overpaid. I understand there are only four accounts outstanding.

As at present?—All 1955-56.

And all the 1954-55 ones are now completed?—I am sorry. It is four of the 1954-55 accounts that are still outstanding.

That represents a fairly formidable time lag as of to-day, Mr. Kennedy?—It does, Mr. Chairman, I agree, but we endeavour to press our sister Department in the Custom House to speed up these accounts as far as they can.

Perhaps you might mention to them that you were being persecuted by the Committee on that?—I will, but I will not use the word “persecuted”, Mr. Chairman—pressed.

197. Deputy Sheldon.—I take it that subhead M.M. just did not start to function in this particular year?—No. This was a token subhead to empower us to make an advance early in the following year to enable the Voluntary Health Insurance Board to get going. On account of its being a new service, we would not have been able to make an advance to them in the following year until the Vote had been passed and reported. We could not have paid the advance out of the Vote on Account. In order to get over the technical difficulty, this token supplementary was taken and then the service did not rank as a new service in the following year.

The witness withdrew.

VOTE 38—LOCAL GOVERNMENT.

Mr. J. Garvin called and examined.

198. Chairman.—On this Vote there is a paragraph by the Comptroller and Auditor General on page xvi as follows:—

“Motor Tax Account.

45. A test examination of the Motor Tax Account was carried out with satisfactory results. The certificates and reports of the Local Government Auditors who examine the motor tax transactions of local authorities were scrutinised in so far as they were available, but in fourteen cases this audit had not been completed at the date of my test examination.

The gross proceeds of motor vehicle, etc., duties in 1956-57 amounted to £4,873,727 compared with £5,099,361 in the previous year. They include fines amounting to £23,102 collected by the Department of Justice, £6,340 in respect of fees received under the Road Traffic Act (Parts VI and VII) (Fees) Regulations, 1937, and £66,788 received from Government Departments in respect of State-owned vehicles. A statement of the gross and net receipts of the Motor Tax Account and of the payments into the Exchequer appears on pages 6 and 7 of the Finance Accounts, 1956-57.”

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

Mr. Ó Cadhla.—I mentioned that in 14 cases this audit had not been completed. The position is that only three auditors’ certificates are outstanding. That was the position on the 21st April.

199. Chairman.—When will these be brought up to date, Mr. Garvin?—The audits outstanding, as on the 31st March, were Meath County Council, Wicklow County Council and Dublin Corporation. The audit is in progress in each of these cases. They are rather big audits, but are expected to be completed fairly soon.

You do not regard the delay as being significant?—Not at this time of the year, Mr. Chairman. The audits in relation to the year under review would normally take place in the year ended on the 31st March last, so that, at the moment, there is less than a month’s arrears as from the end of the financial year.

Chairman.—I take it that corresponds with your view, Mr. Ó Cadhla?

Mr. Ó Cadhla.—That is right. The position is very satisfactory from my point of view.

200. Chairman.—What is proceeding under the token subhead O., Mr. Garvin? —A substantial amount of the work done in the Department of Local Government for the revision and codification of the Local Government law has been sent to the Parliamentary Draftsman’s Office where there is an officer specially in charge of the drafting of the provisions to be codified. I am not aware of what progress has been made. The officer in question is, I understand, in charge of statute law revision and codification for a number of Departments. That is as regards the general Local Government law. In regard to franchise, the Department of Local Government itself is working on that and we hope to produce an Electoral Law Revision Bill as soon as departmental and parliamentary time permits. In regard to housing, it is the intention that the Labourers Acts and the Housing of the Working Classes Acts should be replaced by a single code based on the Housing of the Working Classes Acts. The Labourers Acts provisions are, strange to say, temporary, even back to the year 1883 and have been renewed from time to time. A good many of those provisions are archaic and, in fact, in the biennial Housing Acts we have made some progress in replacing them by appropriate permanent legislation. That process is still going on and another instalment of it will appear in the Housing legislation which is to be introduced soon. That represents the three main divisions of the Local Government law which is in need of consolidation.

201. Deputy Sheldon.—With regard to Item No. 1 of the Appropriations in Aid —strictly speaking, I am a bit late because it is really a matter that comes under subhead H. but this relates to the back payment from the local authorities, I understood that the Department of Health were in a bit of trouble—well, not exactly trouble, but there was a delay in payment to the local authorities of health grants final settlement because of delays in audit and I take it that the auditors concerned are the auditors under this Vote. Is that right, Mr. Garvin?—That is correct.

My understanding of the position is that one of the difficulties is staff. There have been these delays and I am wondering why it was decided to cut down the number of Local Government auditors this year, as compared with the year before?—We tried for some time an experiment of having junior Local Government auditors on the staff. In effect, they were in the nature of apprentices or probationers and, as year succeeded year, we found it would be a long time before these people would make any substantial impression on the work. Under a new arrangement made with the Department of Finance, the number of the auditing staff shows a diminution, but the people on the staff are more highly qualified than those in the arrangement which operated previously. With regard to audits generally, it is true that the Department of Health may have some difficulty with the Committee here owing to waiting for completion of full audit and certification of accounts on the health side for you. I am afraid that is a difficulty inherent in the auditing system. As I remarked, in relation to the motor taxation account, it is reasonable to wait at least one year before the Accounting Officer can be expected to produce certificates to the Committee. With regard to arrears generally, there are 298 local authorities, including harbour authorities, whose accounts are audited by Local Government auditors. At the moment 72 of these bodies are in arrear, but in several of the cases their audits are in progress. The auditing staff have also to deal with educational endowments and two of these remain to be audited out of 93. There are eleven local authorities whose accounts are unaudited in respect of years prior to 1956-57 but these audits are in progress in conjunction with the 1956-57 accounts. We are really making effective progress.

Deputy Haughey.—What audit are you on in the Dublin Corporation? — The 1956-57 audit.

202. Does the audit of the Local Loans Fund come under this? — No, the Commissioners of Public Works and the Minister for Finance are responsible for that.

The witness withdrew.

VOTE 17—RATES ON GOVERNMENT PROPERTY.

Mr. J. N. McGrath called and examined.

203. Deputy Haughey.—On subhead C., Appropriations in Aid, I seem to remember that last year it was under this heading we were talking about Áras Mhic Dhiarmada in Store Street. May I raise on that the question of letting to C.I.E.?

Chairman.—I do not think so. That comes under Social Welfare.

204. Deputy Sheldon.—The British Government very nearly left you without an excess partly due to their failure to pay. How does it arise that repayments of contributions of this type by British Departments are delayed? — I do not know how that arises. They were late in paying, but they paid up in the following April, 20 days later. I do not know why that should be.

It could have been embarrassing with your surplus of only £495?—It could have been but they are not usually late. They paid promptly 20 days later.

VOTE 25—VALUATION AND BOUNDARY SURVEY.

Mr. J. N. McGrath called

No question.

VOTE 26—ORDNANCE SURVEY.

Mr. J. N. McGrath further examined.

205. Deputy Sheldon.—On subhead C. —Stores—there is a very minor matter. I wonder could Mr. McGrath tell us what the cloths are that were purchased under this subhead which provides for cloths, chemicals and inks?—The cloths are for backing maps which are mounted on very thin linen.

There is no possibility of doing that with all your one inch maps? — It increases the price of the maps but, generally speaking, the one inch maps are fairly strong.

For a while they were fairly bad, were they not?—They are put into folders. The ones we mount are not in folders as a general rule.

206. Chairman.—On subhead F.—Incidental Expenses—I take it that the Place Names Survey had not been transferred to you in this financial year?—They were transferred but there was nothing done about them in the financial year. They were not transferred to our accounting until the following year.

The witness withdrew.

VOTE 24—STATIONERY OFFICE.

Mr. T. J. Malone called and examined.

207. Chairman.—On subhead H.— Appropriations in Aid—what is your turnover in the Sale Office?—It is not quite £30,000 a year.

208. I notice that the British Stationery Office conducts quite an advertising campaign for some of their more popular publications. Does our Stationery Office take any steps to publicise their publications?—Yes, in a mild way.

Seeing you have to maintain a Sale Office, with its overheads, have you ever considered the desirability of trying to stimulate sales?—Yes, I have. As a matter of fact we are doing something about it at the moment.

Deputy Sheldon.—I expect if the debates were more interesting in the Dáil that would be an advertisement in itself.

Chairman.—There are some quite interesting publications by the Stationery Office that nobody knows about?—That is so. Recently we spent about £14 on advertising the Luke Wadding papers. Five copies were sold at £3 3s. each. I think three of them would have been sold in any event.

Perhaps you were in too religious a frame of mind?—I thought I came in at the right time as there was so much talk about Luke Wadding, but it did not work out that way.

I hope you will not be discouraged?—I shall not be.

209. Deputy Sheldon.—I notice, on page 52, that an amount of £14 was incurred reprinting a page of the District Court Rules necessitated by printing errors. I would presume the printing errors were the fault of the printer. The only possible argument is, perhaps, that the Stationery Office printed this themselves?—This was a rushed job which the contractor was asked to do in a hurry. Quick delivery was the essence of the contract. It was proofed and, after publication, it was found that there had been an error undetected in the proofs. Under the terms of the contract the printer is responsible for errors that he makes, whether they are corrected in proofs or not, but it was felt that in the peculiar circumstances of this case we should not press the printer. Nobody had time to do the job properly.

The witness withdrew.

VOTE 60—OFFICE OF THE MINISTER FOR SOCIAL WELFARE.

Mr. W. A. Honohan called and examined.

210. Chairman.—I hope you will be good enough to express our regret to Mr. Keady that he is indisposed and that we are hoping for his early recovery.—Certainly, Sir.

Chairman.—On subhead E.—Provision of Rooms for Official Purposes—what is meant by that?—Officers administering services down the country require the use of a room to interview applicants for benefit and so forth.

211. Subhead I. relates to Blind Pensions Medical Certificates. What are Blind Pensions Certificates?—Certificates by the Ophthalmic Surgeon as to the blindness of an applicant for a pension. They correspond to a medical certificate.

Are these certificates, issued under the subhead, in respect of every applicant for a blind pension?—Yes.

212. What is the average annual number of persons who apply de novo for a blind pension?—About 500.

213. I notice that the sum expended in this year was only £362. There used to be a great delay some years ago, I remember, in getting blind people examined for a pension. Is there any delay now?—No, The process has been speeded-up considerably. The certificate for which provision is made in this subhead is now available to the local pension committee when they are considering the application.

VOTE 61—SOCIAL INSURANCE.

Mr. W. A. Honohan further examined.

214. Chairman.—There are two paragraphs in relation to this Vote in the Report of the Comptroller and Auditor General, viz., paragraphs 74 and 75. Paragraph 74 reads as follows:—

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

74. Payments from this subhead to the Social Insurance Fund in the year under review amount to £3,688,000. As indicated in previous reports these payments are subject to adjustment when audited accounts of the Fund are available. The accounts of the Fund for the initial period from 5 January to 31 March, 1953, and for the year 1953-54 have been audited. These accounts indicate that contributions from voted moneys had been overdrawn to the extent of £426,066. This over-issue was adjusted in the account for the year 1954-55.”

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

Mr. Ó Cadhla.—I should like to say that I have now received for audit the accounts of the Fund for the two years 1954-55 and 1955-56.

215. Chairman.—If there is no question in relation to that paragraph we will now turn to paragraph 75 of the Report of the Comptroller and Auditor General, which reads as follows:—

“Subhead B.—Investment Return.

75. Reference was made in previous reports to the investment of moneys standing to the credit of the Social Insurance Fund in the construction and equipment under the provisions of Section 21 of the Social Welfare Act, 1950, as amended by Section 68 (5) (e) of the Social Welfare Act, 1952, of the premises known as Áras Mhic Dhiarmada.

Agreement has not yet been reached regarding the rent payable by Córas Iompair Éireann for the portion of the premises occupied by the company. The figure of £15,000 previously adopted as the annual rent was again used for the purpose of computing the amount of investment return payable to the Fund. This was assessed at £38,922 and was related to a total expenditure from the Fund to 31 March, 1957, of £1,294,939.”

I think, Deputy Haughey, this would be an occasion on which you might like to ask a question.

Deputy Haughey.—I want to know the up-to-date position in this regard.

Chairman.—The Comptroller and Auditor General mentions, in paragraph 75, that “The figure of £15,000 previously adopted as the annual rent was again used for the purpose of computing the amount of investment return payable to the Fund.” He also mentions, in that paragraph, that: “Agreement has not yet been reached regarding the rent payable by Córas Iompair Éireann for the portion of the premises occupied by the company.” Has that matter been resolved?—No. We expect it will be resolved very shortly. Considerable progress has been made. As regards the rent, a large sum has been received by the Department from Córas Iompair Éireann during the past year—£50,000—without prejudice.

Deputy Haughey. — You accepted the cheque this time?—Without prejudice, yes.

216. I want the position to be clear. Investment from the Fund in this building is assessed at £1,294,939. Therefore, in respect of this £38,922 figure given here, is that regarded as the income which should accrue to the Fund each year from that investment? Can you give us any further information?—Yes, excluding the capital sum which is related to the portion of the premises leased to Córas Iompair Éireann. It represents the return on the rest of the capital.

That is what I want made clear. It seemed to me from this that the £38,922 represented the total return and, of that, you got £15,000 back from Córas Iompair Éireann for their portion. Is that so?

Deputy Sheldon. — £38,922 is the amount assessed for the portion of the building after £15,000 is credited from Córas Iompair Éireann.

Mr. Honohan.—That is correct.

Deputy Sheldon.—It is a bit confused.

Deputy Haughey.—Are we quite sure about that?

Mr. Ó Cadhla.—It is confusing.

Deputy Haughey.—In other words, we regard the amount which should accrue to the Fund as a rent from these premises between the Department and Córas Iompair Éireann as £38,922 plus £15,000?

Deputy Sheldon. — The investment return is £53,922 — £15,000 from Córas Iompair Éireann.

Chairman.—In effect, the Department is deemed to pay a rent of £38,922 for that part of the building occupied by them and Córas Iompair Éireann is deemed to be liable for £15,000 in respect of that part of the premises that is occupied by them. These two sums accrue to the credit of the Social Insurance Fund?—That is correct.

Deputy Haughey. — I wanted to get clear whether or not the £38,922 included the £15,000. It does not.

217. Chairman. — Might I inquire, if you take these two sums to which we have been referring together, do they represent interest and amortisation or are they merely interest?

Mr. Ó Cadhla.—Interest only, I understand.

Mr. Honohan.—Yes. It corresponds to a rent in the ordinary sense.

Chairman.—I think that point is valid. Does the Fund contemplate that the building will stand for ever or is there any depreciation of the building contained in the annual charge?—We have no provision for depreciation.

Chairman.—I do not know what is customary in a matter of that kind. If one has a building in which one has invested £1,500,000, I imagine one assesses the annual rent at a figure which will meet the rent charges and make a modest provision to meet depreciation of the building.

Mr. Ó Cadhla.—I think the position is that the final figures for the cost of the building have not yet been arrived at. There is also the proposition that the building should be passed over to the Office of Public Works for maintenance. That has been done, I think.

Mr. Honohan.—Yes.

Mr. Ó Cadhla.—There are some matters relating to the building which have not yet been decided. This probably is one.

Chairman. — Perhaps, at your convenience, Mr. Honohan, you would look into this matter and let us have a note as to the exact position in regard to the assessment of the rental credited to the Fund. Does it contain any provision for the amortisation of the building or are these matters still in suspense?—I can say definitely it does not include any sum in respect of amortisation. The amount of the rental has been fixed in agreement with the Department of Finance.

Deputy Haughey.—Is it 5 per cent. on your capital outlay or is it on that basis? —I think it is now 4¾ per cent. on the capital cost of the building and 8¼ per cent. on the capital cost of furniture.

Chairman.—I think we might reasonably trouble you, Mr. Honohan, if convenient, to let us have a note as to the basis on which these charges have been determined. It may be that certain considerations are as yet in suspense. In that event, we cannot have any definite answer.*

VOTE 62—SOCIAL ASSISTANCE.

Mr. W. A. Honohan further examined.

218. Chairman.—Paragraph 76 of the Report of the Comptroller and Auditor General reads as follows:—

“Overpayments.

76. As shown in the details of the Appropriations in Aid recoveries in cash of overpayments of assistance made in prior years amounted to £4,896. £3,092 was recovered by withholding current payments and unrecovered balances amounting to £2,916 were treated as irrecoverable with the approval of the Department of Finance.

I have been furnished with a statement which shows that the total amount of overpayments outstanding at 31 March, 1957, was £31,435. During the year 22 individuals were prosecuted for irregularly claiming social assistance and convictions were obtained in all cases.”

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

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

219. Chairman.—If there is no query on that paragraph, we can turn to the Vote itself on page 201.

Deputy Haughey.—Subhead C. relates to Unemployment Assistance. There has been some talk in the Dáil about the question of fraudulent claims for unemployment assistance. Could we have some information about the position?

Chairman. — What is the position in regard to fraudulent claims for unemployment assistance?—The Department’s officials are always alive to the danger of fraudulent claims. When evidence of such fraud comes to our notice we take suitable action by prosecution, and so on.

Deputy Haughey.—Some people seem to have the impression, from the recent statement in the Dáil, that there are fairly widespread fraudulent claims.

Chairman. — I do not think we may check on observations by the Parliamentary Secretary by asking Mr. Honohan to confirm or correct them. I think that would more appropriately be raised in the Dáil.

220. Deputy Haughey. — To some extent, this is an auditing or accountancy matter. I do not want Mr. Honohan to comment on what the Parliamentary Secretary said. However, could he say if he regards the present system as completely suitable or if he is hindered in getting after these fraudulent claims in any way?—No system is perfect. We are all the time endeavouring to improve various methods we have for locating these frauds. I do not think it can be said that any part of the departmental machine is hindering the discovery of fraud.

I do not know exactly what I can ask. At the back of my mind there is the point that there is an impression abroad that there are widespread fraudulent claims under these Acts which are not being detected. Is that so? If it is, can we do anything about it?

Chairman.—In the paragraph on page xxv, it is set out that: “During the year 22 individuals were prosecuted for irregularly claiming social assistance and convictions were obtained in all cases.” I think we may ask Mr. Honohan is he satisfied that the machinery available to the Department, for checking on the validity of claims for Unemployment Assistance, is adequate?—All I can say in answer to that is that we think the machinery is adequate. While saying that, I may add that we are all the time endeavouring to improve it. There is now a new type of fraud, but it arises more in connection with Unemployment Benefit, that is, fraudulent employment so to speak. People put stamps on their cards for weeks in which they were not really employed, and, in that way, they seek to qualify for unemployment benefit. That is a new type of fraud which admittedly we are experiencing some difficulty in pinning down.

Chairman.—Does that dispose of your inquiry, Deputy?

Deputy Haughey.—Yes.

Chairman.—We may now turn to the Vote itself.

221. Deputy Haughey. — Under subhead H., the explanation says that the excess was due mainly to an increase in the numbers participating in the scheme. What is the reason for the increased numbers participating?—It appears that there had been a gradual decrease in the numbers and there was a sudden sharp increase for which we do not know the explanation.

Would it have anything to do with a more mild or a more harsh winter, or anything like that?—Well, it applies to the number of people in the different categories of assistance, rather than the severity of the weather, I think.

Chairman. — I suppose it might be related to the increase in the price of coal, which would affect certain persons who would not bother to seek this benefit when prices were low and who would be pushed to seeking it when prices rose?— That is possibly it, Mr. Chairman.

222. On subhead I., how is this estimated so closely? Is it by block grant to the local authorities?—It is a fixed sum, agreed with the Department of Finance. It is agreed to pay up to this limit.

It is paid out to local authorities?— Yes.

Do they surrender at the end of the year any balance that may be in their hand?—We pay on the accounts that they send in. We pay half of the net cost of the footwear, within the limit of the amount voted. I understand that in practically all cases it is the full amount that they get.

They just match your grant with a corresponding appropriation from the rates; they spend that, and no more?—Quite so.

223. Deputy Sheldon.—On subhead J., the Appropriations in Aid, under Note No. 4, does that include anything that is recovered in cases of fraud—or are you ever able to recover in cases of fraud?— Oh, yes. The answer, I think, is that it could include the amounts recovered in cases of fraud, but just at the moment I have not the information as to whether this particular figure of £332 does include any such sum.

As far as the accounting is concerned, that is the place it would come in?— Yes, if it came in in cash.

The witness withdrew.

The Committee adjourned.

* See Appendix XVI.