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

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Dé Máirt, 25 Márta, 1958.

Tuesday, 25th March, 1958.

The Committee met at 5 p.m.

Liam Ó Cadhla (An tArd-Reachtaire Cuntas agus Ciste), Miss M. Bhreathnach, Mr. C. J. Byrnes, Mr. J. F. Maclnerney, Mr. J. Mooney and Mr. L. V. O’Neill (An Roinn Airgeadais) called and examined.

VOTE 50—INDUSTRY AND COMMERCE.

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

62. Chairman.—Before turning to the Vote, I should like to thank you for your courtesy, both the members of the Committee and Mr. MacCarthy, in accommodating me, because I was an hour late and I appreciate how busy Mr. MacCarthy is. I was detained in the House and I could not get away until now.

On the Vote there are a number of notes. The first is on page xvii, paragraph 50 of the Report of the Comptroller and Auditor General which reads:—

“Subhead J.1.—Food Subsidies.

50. The expenditure charged to this subhead is as follows:—

I take it that that note is purely informative, Mr. Ó Cadhla?

Mr. Ó Cadhla.—Yes, all of the notes are just informative.

Chairman.—You have nothing to add to paragraph 50?

Mr. Ó Cadhla.—No.

63. Chairman.—If there are no questions on that paragraph we will turn to paragraph 51 of the Report of the Comptroller and Auditor General which reads:—

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

Have you anything to add, Mr. Ó Cadhla?

Mr. Ó Cadhla.—No.

64. Chairman.—Paragraph 52 of the Report of the Comptroller and Auditor General reads:—

“52. Payments are made by Grain Importers (Éire), Ltd. to the millers to ensure to the industry as a whole remuneration equivalent to 4/6 per sack of flour produced, after charging all admissible expenses. The sum of £6,213,594, 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 4/6 per sack, and the controlled selling price in force during the year ended 23 February, 1957.”

Have you anything to add, Mr. Ó Cadhla?

Mr. Ó Cadhla.—I understand that the examination of the millers’ accounts for 1952-53 has been virtually completed. A considerable amount of work has been done on the subsequent accounts.

Mr. MacCarthy.—We anticipate that we should have all these accounts cleared in about four months’ time.

Chairman.—With the completion of all the accounts to which you refer this whole business about the disappearance of the flour subsidy will be terminated?—Yes.

65. Deputy Haughey.—The paragraph says “to ensure to the industry as a whole remuneration equivalent to 4/6 per sack.” I presume that 4/6 is profit to the millers?—That is so. The scheme was designed to yield a profit of 4/6 per sack. We paid a subsidy of £2 12s. 6d. per sack. Having deducted the various charges that left the millers, on the average, a profit of 4/6. Some probably made more than 4/6 and others less than 4/6, depending on their efficiency.

I see. Some may have made less?—Yes.

66. Chairman.—Paragraph 53 of the Report of the Comptroller and Auditor General reads:—

“53. The payment of £12,165 was in recoupment of rebates allowed to exporters of confectionery and biscuits in accordance with the arrangement referred to in paragraph 70 of the report for the year 1955-56.”

Have you anything to add, Mr. Ó Cadhla?

Mr. Ó Cadhla.—No.

67. Chairman.—Paragraph 54 of the Report of the Comptroller and Auditor General reads:—

“54. 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 2/6 per sack and the controlled selling price. The sum of £102,786 charged to this subhead comprises £266 being final payment of subsidy to a miller for the cereal year 1953-54 and provisional payments to millers of £17,219, £48,500 and £36,801 for the cereal years 1954-55, 1955-56 and 1956-57, respectively.”

Have you anything to add, Mr. Ó Cadhla?

Mr. Ó Cadhla.—No. It is also informative.

68. Chairman.—Paragraph 55 of the Report of the Comptroller and Auditor General reads:—

“Subhead K.—Fuel Subsidy.

55. £250,000 was paid to Fuel Importers (Éire), Limited, on account of the balance of losses outstanding at 31 December, 1956, which amounted to £311,948. The accounts of the company disclose that a balance of approximately 90,000 tons of coal which cost about £800,000 remained unsold.”

Deputy Haughey. — Why did we pay only £250,000 towards the loss? Why not the lot?—The amount provided each year is only an estimate of the loss. Sales of coal in any particular year may be greater than anticipated and could cause an increase in the losses for that year. The main loss is the interest on the outstanding debt of Fuel Importers. The position is that the balance of the stocks in the Phœnix Park is being sold and it is anticipated that the sale will have been completed by March, 1959. The losses increase accordingly as the sales are made because the price at which coal is being sold is £5 7s. 6d. a ton, and that will involve a loss. We anticipate that next year it will be probably necessary to provide something like £200,000 and that should finish the transaction.

Deputy Sheldon.—This is really a payment on account. If you had paid more than £250,000 the Committee might have had further questions to ask?—Exactly.

69. Chairman.—Does that clarify the position, Deputy Haughey? You mention, Mr. MacCarthy, a price of £5 7s. 6d. Is that related to any re-sale price by the merchants who purchase that coal?—The re-sale price is not controlled but there was a conventional price and the figure of £5 7s. 6d. is a negotiated figure. There is a good deal of bargaining with the coal merchants and the figure takes into account that the coal had deteriorated considerably and that the slack content was high. It is related to the re-sale in so far as the coal merchants had that in mind.

70. Deputy Carty.—There were 90,000 tons unsold?—96,000 tons was the quantity. About 5,000 tons have already been cleared. It is a gradual process and the stock is to be cleared by the end of March, 1959.

71. Deputy Booth.—Just for my information, this coal is for industrial use only?—No. I should imagine that it is largely domestic because the industrial users would have drawn directly from the dump if it had been suitable for that purpose.

Chairman.—There is no restriction on the merchant who purchases this coal as to its subsequent disposal?—He can dispose of it any way he likes.

72. Chairman. — If there is no other question we can turn to paragraph 56 of the Report of the Comptroller and Auditor General which reads:—

“Operations of Bord na Móna Subhead M.1.—Experiment and Research (Grant-in-Aid).

56. 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, 1957, to £229,800, including the sum of £10,000 paid to the Board during the year of account.”

Is there any observation you have to add to that, Mr. Ó Cadhla?

Mr. Ó Cadhla.—No.

Deputy Sheldon. — The amount provided is rapidly running down, is it intended to seek further legislation?—No. Bord na Móna can now meet the cost of these research operations out of their own resources.

73. Deputy Booth. — Is this amount vouched for in any way or just requisitioned by Bord na Móna? Is there any check on the expenditure?—It is a Grant-in-Aid. My function ceases when I get a receipt.

Chairman. — I think if you wish to pursue that inquiry, the correct procedure would be to raise in on the Minister’s Estimate in relation to the certified accounts of Bord na Móna which are made available after they have been audited by Mr. Ó Cadhla. As Mr. MacCarthy says his liability ends when he gets a receipt for the Grant-in-Aid.

74. Chairman. — If there are no other questions we will turn to paragraph 57 of the Report of the Comptroller and Auditor General which reads:

“Extra Receipts payable to Exchequer.

57. Reference was made in paragraph 75 of the report for the year 1954-55 to the liability of Mianraí, Teoranta, for advances and for interest thereon. A sum of £34,430 was received from the company during the year 1956-57 in part discharge of this liability, and the amount remaining due at 31 March, 1957, was £193,226. In exercise of the powers conferred by Sections 11 (2) and 12 (3) of the Minerals Exploration and Development Company Act, 1941, and Section 8 (2) of the Minerals Company Act, 1945, the Minister for Industry and Commerce, with the consent of the Minister for Finance, agreed to postpone to 1 October, 1957, payment by the company of instalments of advances and interest which fell due on 1 April and 1 October, 1956.”

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

Mr. Ó Cadhla.—No.

75. Deputy Sheldon. — Were the accounts paid on the 1st October 1956? The payment was postponed to that date, Mr. MacCarthy? — There is, in fact, a Supplementary Estimate, which I think was passed at the last meeting of the Dáil, which writes off the outstanding balance of advances and also the arrears of interest.

76. Chairman. — If there are no other questions we shall turn to paragraph 58 of the Report of the Comptroller and Auditor General which reads:—

“Min Fhéir, Teoranta.

58. Reference was made in paragraph 80 of the last report to the winding up of this company. The liquidation was completed in April 1956 and £8,007 in respect of sums advanced for share capital was repaid to the Exchequer. A surplus of £3,637 was also surrendered to the Exchequer.”

Have you anything to add, Mr. Ó Cadhla?

Mr. Ó Cadhla.—No.

77. Deputy Sheldon. — What was the net effect of the transaction? Was there any loss to the Exchequer? — I shall give you the figures. The total expenditure under all heads was £39,027 and the total receipts £50,671. The company actually received £37,000 from public moneys. Expenditure amounted to £39,000 so that there was a difference of almost £2,000. That was met by sales of turf which came to almost £1,000 and a further £1,000 came from the prices paid by the Department of Agriculture for surplus machinery, etc. handed over for the Land Reclamation Scheme.

Chairman. — So that there was no loss in respect of that? — No.

78. Chairman. — If there are no other questions we shall turn to the Vote itself on page 147.

Deputy Booth. — On subhead J.1 — Food Subsidies — how does the question of excess due to increased bank accommodation and increased ocean freight rates, mentioned in the note, arise under this subhead?—The increases meant increasing the expenses of Grain Importers in importing wheat from Canada and elsewhere. It was reflected in the price and consequently affected the subsidy required to yield 4/6 per sack to the millers.

Chairman. — Does that clarify the matter?

Deputy Booth.—Yes.

79. Deputy Sheldon.—In regard to subhead L.2 — Compensation for Mineral Rights Acquired—have the legal difficulties regarding the royalties mentioned in the note been overcome? — Yes, they have been overcome and payment will be made by 31st March of this year.

80. Deputy Booth. — Subhead O.1 — Annual Grant towards the Expenses of Administration — again it is a Grant-in-Aid, I presume?

Chairman. — How did they draw only £30,000 if they had £32,000 to avail of? —They had an accumulation out of other grants. We suggested they should not draw the full amount unless they needed it.

Deputy Haughey. — Is it a Grant and not a Grant-in-Aid? — It is a Grant-in-Aid.

Chairman. — The fact being that your vigilant eye, Mr. MacCarthy, discerned that they were accumulating a somewhat excessive nest egg and you suggested they should spend some of it before they asked for a further grant? — That is right.

Deputy Haughey. — What is the difference between a grant and a Grant-in-Aid?

Chairman. — I suggest that we should allow Mr. MacCarthy to deal with the Votes and then we will address that question to the Comptroller and Auditor General and ask him to give us an exposé on it.

Deputy Haughey.—We are taking it that this is a Grant-in-Aid to the Institute of Industrial Research and Standards. Is that so?

Chairman.—Yes.

Deputy Sheldon. — It is a statutory grant, is it not? — It is.

81. Chairman. — Under subhead O.4, in connection with a grant of that kind, the Institute will have to satisfy you that they have actually got the equipment before they get their grant?—Yes.

Whereas in regard to their Grant-in-Aid they could indent on you for the full £32,000 and get it and, if you get the receipt, that clears you? — Yes. I have no right to question anything done with the money once they give me the receipt.

You would have the right to query as to whether, in fact, they had got the equipment before they indented on you for money to pay for it?—Indeed, that is the case in regard to subheads O.2 or O.3. These are also grants of that kind as distinct from advances, which would be repayable, but we are not in any way relieved from the necessity of examining th whole thing and being satisfied. It is really just an expenditure subhead in the ordinary way.

Deputy Sheldon. — You would have to be particularly careful about subhead O.4, as it was coming from the Counterpart Fund? — Exactly. That is recoupable to us out of the Counterpart Fund.

82. Chairman. — That may assist Deputy Haughey in discerning the difference between a grant and a Grant-in-Aid, but we can further elaborate with the help of the Comptroller and Auditor General? — I think it is, subject to the Comptroller and Auditor General, for all practical purposes a Grant-in-Aid, but it is customarily called a statutory grant. Indeed, we have had the same problem as Deputy Haughey in trying to reconcile all these things and in the Estimate for the current year, 1958/59, we have altered the terminology. In the case of the Institute for Industrial Research and Standards we actually describe it as a Grant-in-Aid in next year’s Estimate.

83. Deputy Haughey. — On subhead S.1, would I be in order in asking why An Foras Tionscal does not operate on a Grant-in-Aid in the same way as these other bodies? — It is really a Grant-in-Aid. We have altered that in the next year’s Estimate. They were in fact covered by the Notes in the Estimates, but the descriptions “grant” and “Grant-in-Aid” were a bit inconsistent. I think you will find that is true of the Estimates Volume as a whole.

84. Deputy Sheldon. — On subhead T, do I take it that there was a Fair. Was it assumed there would be two Fairs held? — There is usually a Spring and an Autumn Fair.

And this would relate to the previous Autumn? — Yes. We missed one of them and, indeed, the entire arrangements for the Fair are under consideration at the moment. There has been much less interest on the part of firms exhibiting at these Fairs, and we introduced a new system for the Autumn of last year and the Spring Fair of this year under which we got a firm of display artists to take over the arrangements. It worked very well for the Autumn Fair but the Spring Fair was rather disappointing. We are doing an exhibit again at the Autumn Fair and then we shall consider whether or not the whole thing is really worth while.

85. On subhead V., I see from the Note on the Appropriations in Aid that the amount spent was not recoverable, because the Technical Assistance Sub-Agreement was not signed within the financial year. How did it come that so much was expended on this subhead when there was no hope of getting it back from the Counterpart Fund? I am taking the attitude that the Dáil, in voting the money, assumed from the Book of Estimates that this would be fully recoupable so that, as far as the Dáil was concerned, its expectation was out to the tune of £13,000? — I do not think it is quite entirely that way because, in fact, whether or not it was recoupable, we had a direct provision for Technical Assistance approved and provided for, really regardless of recoupment. But anything we spent was eligible for recoupment and if the Agreement had been signed, it would have been recouped. After the Agreement was signed everything was recoupable. Even when the total covered by the Agreement is exceeded we have an understanding that we may continue this Technical Assistance operation under an Estimate.

But, surely, on the face of the Estimate, the amount provided under subhead V. was £69,000 and then under subhead X., Appropriations in Aid, Number 10, it is stated recoupment from the American Grant Counterpart Special Account in respect of the Technical Assistance was not made as the Technical Assistance Sub-Agreement was not signed within the financial year and consequently no portion of the expenditure under subhead V. qualified for recruitment. Under subhead O.4, there is £10,000 and under subhead V. £69,000. Would you not say it would be a fair assumption there that the Dáil had been assured that the amount of £69,000 to be spent under subhead V. was recoupable under subhead X.10? — I think it would be a fair assumption, certainly, reading the Estimate, that we expected to get it, but again that would be conditional on the signing of the Agreement. Inasmuch as the Agreement was not signed until June, 1957, that is of course something outside our control. We did bring the matter to light then, which I think is regular, by putting a Note in the Appropriation Account to the effect that the anticipated receipt did not materialise.

Would your view be then that the expenditure under subhead V. was essentially expenditure which could only be related to the Counterpart Fund?—No. Certainly, I was not conscious that there was any understanding on anybody’s part that we could not spend that money until the Grant Counterpart Agreement had been signed.

86. Chairman. — Can you recoup the £13,086 out of the Grant Counterpart Fund now the Agreement has been signed?—No. Anything spent before the signing cannot be recouped. The only exception to that is the £800 brought to credit in respect of one scheme, an Institute scheme for additional laboratories, which was in fact the subject of a separate Agreement — that is subhead O.4.

87. Deputy Haughey. — Is that particular Appropriation in Aid specifically related to the expenditure or is it just an Appropriation in Aid of the Vote for the Department as a whole?—The Vote for the Department as a whole; that is all brought to credit of the Vote as whole.

88. A number of projects were not proceeded with. That project for £89,000 was not proceeded with and another for £5,000 was deferred for further consideration; new proposals for further projects developed more slowly than was anticipated and this resulted in a saving of £40,000. Was it because the Agreement was not signed that there was this slowing up?—No. The slowing-up there was purely because of delays and difficulties on the part of the people who had to commission the schemes. I can give you some details as to the nature of them if you are interested. The total saving was £55,314. One element in that was £9,000 arising on a minerals exploration scheme which was not proceeded with during the year. That is a scheme for which the Department is directly responsible. It would be carried out by the Geological Survey, and there were difficulties connected with the choice of a suitable contractor and also with the general business of the Geological Survey which suggested it would be better to defer it. The arrangements are now well in hand and I think the contract is now about to be placed. The second item of saving was £5,000. That was a project contemplated by C.I.E. in relation to their workshops at Inchicore but C.I.E. rather thought better of it in the end and it has been postponed sine die. The saving of £41,000 is really not attributable to any particular scheme. It is attributable just to a general slowness. In most cases the scheme involves the employment of an industrial consultant and, of course, the expenditure is really regulated by the speed at which the consultant does his work. In this case they were not as speedy as we contemplated when providing the Estimate.

89. They will qualify now the Agreement has been signed?—Anything spent after that date, yes.

90. Can you tell us anything about the industrial consultants? How do you determine who is or who is not?—We do not determine nor do we make the selection. The firms concerned come along and seek approval of the scheme. Up to recently it was on the basis of a 50-50 sharing of the cost. We provided 50 per cent. and they provided 50 per cent. Now the basis is two-thirds by the firm concerned and one-third by the State. We leave it to them really. We do not come in on details of the scheme and so we do not have to approve the consultant.

You do not have to approve of the consultant?—No.

91. Do you approve of the type of scheme?—Yes, definitely. Some proposals are rejected as not being suitable. That may merely mean that people are seeking a grant to do something they would have to do anyway even without a grant if we refuse it.

92. Deputy Booth.—At the end of the Notes there is a list of payments made out of the National Development Fund. I am just wondering how these come under the National Development Fund or can the Fund be used for pretty well anything? It seems a curious mixture of a number of works—works carried out on youth hostels and additional repairs to roads for turf-burning generating stations. How does all that come about?

Chairman.—How do these come to be charged upon the National Development Fund?—That is a matter on which the question should really be addressed to the Department of Finance. So far as we are concerned, the Fund was there. It was open to Departments to make proposals. We make the proposals; they were accepted by the authority administering the Fund as proper to be financed out of the Fund.

Deputy Booth. — So Mr. MacCarthy asked no questions, like a very wise man.

Deputy Sheldon. — He asked for the money and got it. Do you want to know why Mr. MacCarthy asked for the money or why Finance gave it to them?

Chairman. — In fact, allocations from the National Development Fund represent borrowed money, do they not, and ordinary Finance sanction would involve voted money?

Mr. MacCarthy.—It would, but, in fact, Finance control the National Development Fund. I should say that the reason for putting forward the proposal to finance An Óige on our part is that we consider it to be linked with tourism and calculated to help in the promotion of tourism, which, of course, is something that is important in the national economic interest. Therefore, we regard it as a legitimate thing but as to the precise terms of reference of the Fund, I really could not answer any question on that.

93. Chairman.—Have you any comment to make, Mr. Ó Cadhla?

Mr. Ó Cadhla. — No. The National Development Fund was set up by a vote of the House. Originally it was £5,000,000. Then it was augmented a few years afterwards and it is used for various capital purposes—capital development.

Chairman.—It is a polite way of saying this is borrowed money and, if it were not borrowed, it would be voted money.

Mr. Ó Cadhla.—It was, in fact, voted money.

Deputy Haughey.—The contribution to the Fund is voted from time to time— is not that right?

Chairman.—Yes.

Deputy Haughey.—But that money can be met by borrowing?

Chairman.—Yes.

Deputy Haughey. — Therefore, it is presumed to be spent on capital projects only.

Chairman.—As Mr. MacCarthy says, so far as he is concerned, his responsibility ends when he made certain proposals to the Department of Finance and received, in reply, Finance sanction charging these proposals on the National Development Fund, to which fact he refers in his note, and for any further particulars invites the Committee to communicate with the Minister for Finance. Is not that the position, Mr. MacCarthy?

Mr. MacCarthy.—That is so, Sir.

Chairman.—Does that provide you with the information you want, Deputy Booth?

Deputy Booth.—Yes.

VOTE 51—TRANSPORT AND MARINE SERVICES.

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

94. Chairman.—On this Vote there are four paragraphs by the Comptroller and Auditor General on page xix. The first paragraph is No. 59 which is as follows:—

“Subhead A.1.—Córas Iompair Éireann.

59. The charge to this subhead comprises—

Is there any observation you wish to add, Mr. Ó Cadhla, in respect of that note?

Mr. Ó Cadhla. — No comment, Mr. Chairman.

95. Chairman. — Paragraph 60 of the Comptroller and Auditor General’s Report is as follows:—

“Subhead A.2.—Great Northern Railway Board.

60. 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. The Act authorises the Minister for Industry and Commerce to pay to the Board the amount of any loss for which he is liable; to make advances towards making good any anticipated loss for which he would be liable; and to make payments to meet capital expenses as provided in the agreement. The certified accounts of the Great Northern Railway Board for the year ended 30 September, 1956, show the liability of the Minister for Industry and Commerce for that year to be £587,022, comprising £489,523 for losses and £97,499 for capital expenses. Advances made to the Board in 1955-56 amounted to £507,790.”

Is there any observation you wish to make on that, Mr. Ó Cadhla?

Mr. Ó Cadhla.—That paragraph also is for information.

96. Deputy Haughey. — I have some difficulty in following the figures at the bottom of the paragraph. I wonder does my difficulty arise because of two different accounting years. Could we have some explanation?

Chairman.—Mr. MacCarthy will help us if you indicate exactly what it is you wish explained.

Deputy Haughey.—The figures in the note are not the same as the figure for expenditure under subhead A.2.

Mr. MacCarthy.—That arises from the difference in the accounting years. The railway year ends in September and the financial year ends in March. It is also accounted for by the fact that there are two different things in the subhead. There is a grant in respect of the ascertained losses or a payment, rather, in respect of the ascertained losses and an advance towards anticipated losses. I said “grant” first. It is not really a grant because these payments are, in fact, repayable by the Great Northern Railway and bear interest.

Deputy Carty.—Repayable some time.

Mr. MacCarthy.—Repayable some time —notionally at any rate.

Chairman. — Does that explain the matter, Deputy Haughey?

Deputy Haughey.—Yes. In fact, we met the losses out of this subhead but our year does not coincide with theirs but we met them at some stage, is that the position?—That is so, yes.

97. Chairman.—Paragraphs 61 and 62 of the Report of the Comptroller and Auditor General is as follows:—

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

62. A sum of £54,965 was received in respect of interest on payments made to the Board for the three accounting periods ended 30 September, 1956, and credited to appropriations in aid.”

Have you any comment you wish to make on that, Mr. Ó Cadhla?

Mr. Ó Cadhla.—No, I have nothing to add, Mr. Chairman.

Deputy Sheldon. — Do the three accounting periods refer to three years?

Mr. Ó Cadhla.—Yes, three years.

98. Deputy Booth.—On subhead B., it is gratifying, in a way, to see expenditure less than the sum granted but, at the same time, these savings, according to the notes, are due mainly to unavoidable delay in proceeding with certain improvement works and to delays in the placing of contracts. It seems an extraordinary position that there should have been delay when £260,000 was made available and £67,000 was expended. Is there any explanation for all these delays or is there any responsibility resting on the Accounting Officer to put any pressure on the authorities concerned?

Chairman.—Mr. MacCarthy would certainly accept responsibility for telling us why there was delay.

Mr. MacCarthy.—If I go through it item by item it is, perhaps, the easiest way to do it. The largest scheme provided for there was the Limerick scheme, where the total element in the provision in the Estimate for Limerick was £82,000. The actual expenditure was less than £10,000. The provision included the cost of a new dredger. That provision was not, in fact, required because technical difficulties cropped up after the receipt of the tenders. The whole thing had to be gone into again. The actual expenditure was only the balance of a grant towards the harbour improvements scheme which, it had been anticipated, would have been completed even in the year before this. Th next large item was Waterford— £42,500. The expenditure there was less than £5,000. There, again, the harbour authority decided to change the scheme after it had been approved and, of course, that threw the whole thing into the melting pot again. Then, the weather was responsible for quite a lot of delay. In the case of Wicklow, where there was £18,000 provided, it was just impossible, because of weather conditions, to commence the work at the scheduled time and the actual expenditure in the year was less than £6,000. In other cases, we had the opposite situation. In Rathmullen for instance, the provision in the Estimate (a balance) was £5,000, while actual expenditure in the year amounted to nearly £22,000. That was due entirely to increases in the cost of materials. In Dundalk, the estimate was £21,000. In that case we must accept responsibility for the delay. The expenditure is less than £11,000. That is simply because our technical advisers, the Office of Public Works, who were carrying out the work, were not able to go quite as fast as was anticipated. That, I think, is the only case in which the delay is due to anything other than a change on the part of the local authorities, or weather conditions.

99. Deputy Sheldon. — Could Mr. MacCarthy say if any of the expenditure that does take place where there are delays could become nugatory through some change taking place?

Mr. MacCarthy. — I could not say “no” to that question because conceivably it could happen that preliminary work, involving, perhaps, the cost of surveys or piling, might be done in certain cases and might prove to be nugatory because the local authority abandoned the scheme afterwards, but I am not aware of any such case at the moment.

Chairman.—Does that clarify the matter, Deputy Booth?

Deputy Booth.—Yes.

Chairman.—I may mention that an analogous matter was raised on the accounts when Mr. MacCarthy was with us last year and he gave a similar and very exhaustive explanation of all the matters, as he is always very happy to do.

Deputy Sheldon.—Could one assume from the fact that there is an increase in the subhead in next year’s Estimate that a lot of these delays and difficulties have been got over?—Yes.

100. On subhead D., would I be right in assuming that the overspending in this subhead is related to subhead G.? —In fact, the overspending there arose from the fact that during the year it was necessary to send the surveyors to England, where they get courses of training from the Admiralty. We had to send them on refresher courses. That involved an excess of £165. It may be thought that we should have anticipated that but, in fact, the reason is that the refresher courses lasted rather longer than we had thought might be necessary.

Deputy Booth.—Travelling expenses cover subsistence as well?—Yes.

101. Deputy Sheldon.—On subhead G. —there was an inquiry that was unforseen. The reason I mention this is that, apparently, the travelling expenses which that enquiry would lead to, came under subhead G. Would they be borne on subhead G. or on subhead D.—the ordinary travelling expenses subhead? — The investigation here was into the accident to the City of Ghent. The expenses would include all relevant charges specifically related to that particular investigation. They would not include the travelling expenses of an officer of the Department who went there, but would include the travelling expenses of the Court or any witnesses or others summoned to that Court.

102. With regard to subhead K., has progress been made in the matter of this equipment or is it intended to continue that in all the cases?—It is not intended now to buy the equipment but progress has been made in the sense that the vessels have been measured and the specifications have been established.

103. Chairman.—What is protective equipment for Irish ships?—It is degaussing equipment which is protection against magnetic mines. All the new vessels are being equipped with that automatically —the new Irish Shipping vessels—but we provided here that existing vessels on the Irish register should be measured and specifications drawn up for the equipment appropriate to each of those vessels. It had been intended when the original provision was made that we would buy the equipment. It was later decided not to proceed with the actual purchase for the moment.

Deputy Sheldon.—Would it be fair to ask why £10,000 was provided in the next year’s subhead?—The decision was taken after that.

104. On subhead M.5—Rocket Equipment—would Mr. MacCarthy elaborate on the explanation given? Why did they not buy the rockets?—Purely an economy measure. If I might revert to the question about the degaussing equipment, it is possible that we will buy it though we may not, in fact, have it installed on the vessels. The present decision is not to buy it but that may be changed.

VOTE 52—AVIATION AND METEOROLOGICAL SERVICES.

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

105. Chairman.—Paragraphs 63 and 64 of the Report of the Comptroller and Auditor General read as follows:—

“Subhead G.—Constructional Works, including Furnishing of Buildings— Shannon Airport.

Subhead H.—Constructional Works, including Furnishing of Buildings— Dublin Airport.

63. Expenditure during the year on constructional works, including furnishing of buildings, at Dublin and Shannon Airports amounted to £48,633 and £92,638, respectively. The total expenditure to 31st March, 1957, excluding the cost of acquisition of land, amounted to £1,387,735 for Dublin Airport and £2,156,396 for Shannon Airport.

Operation of Dublin and Shannon Airports.

64. 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 Sheldon.—What happened at Dublin Airport? Apparently there was increased business at Dublin Airport but not in regard to eating. The profit on catering dropped?—I cannot offer any explanation of that. It is just one of those things that happen.

It looks as if the Department was more efficient than Aer Rianta?—I should not like to offer any comment on that.

106. Chairman.—Paragraph 65 of the Report of the Comptroller and Auditor Genera reads as follows:—

“Subhead T.—Appropriations in Aid.

65. Section 25 of the Air Navigation and Transport Act, 1950, provided that the Minister for Finance might from time to time by order authorise the payment of subsidies to Aer Rianta, Teoranta, but that no such order may be made after the expiration of five years from the passing of the Act. No payment was made to the company under the authority of this section since the year ended 31st March, 1951. And the company’s General Administration Account for the year ended 31st March, 1956, showed an accumulated deficit of £14,300. As shown in the estimate provision was made for the recoupment to the company of this deficit from the surplus earned on the management of Dublin Airport. It was accordingly made good out of a surplus of £36,041 shown on the management account for 1955-56 and the balance of £21,741 was brought to credit as an Appropriation in Aid.”

Deputy Sheldon.—Might I inquire where the surplus of £36,000 on the Management Account for 1955-56 came from?—That was the surplus shown on the Management Account presented by Aer Rianta. These accounts are audited by the Comptroller and Auditor General. I should say that the Tables shown on page xxi of the Comptroller and Auditor General’s Report are constructed accounts. They are merely a picture and not accounts in themselves. There was, in fact, a surplus shown in the Management Account, but that Account takes no account of interest on capital expenditure or depreciation or anything like that. It is purely an operating surplus shown by the management.

Deputy Haughey.—It does not include interest or depreciation. I was looking at the accounts before I came up and they do not include air navigation services?— No. They are State services, but we brought this in on this Table on page xxi for the purpose of giving a clear picture.

107. Chairman.—Are we to assume that the £36,000 which was a surplus on the Management Account, 1955-56, was, so to speak, held in suspense, that £21,000 of it was used as a balance brought to the credit of the Appropriations in Aid subhead and the rest to extinguish this loss?—Exactly. Aer Rianta are agents for the Minister in operating the airport. They are in the position of contractors and they are accountable to the Minister naturally for their stewardship during the year. If there is a surplus it is ordinarily surrendered to the Minister and brought to the credit of the appropriations in Aid subhead. In this case, in determining the amount to be collected from them the Minister allowed as a charge this deficit on the general Administration Account. That deficit, incidentally, arose out of air age education propaganda which was designed primarily to increase the use of Dublin Airport by private fliers and by groups of children coming to see the hangars, and so on.

108. Deputy Haughey.—On subhead L. —Transport of Staff—Shannon Airport— could Mr. Ó Cadhla tell us if any of that refers to catering staff?

Mr. Ó Cadhla.—No. The subsidy is reflected in the Catering Account.

Deputy Haughey.—Therefore, you would have included it in your summary of the accounts?

Mr. Ó Cadhla.—Yes, that is right.

109. Chairman.—On subhead T.— Appropriations in Aid—do you happen to know in connection with the note at the foot of page 161 in relation to the sale of crops and lettings of surplus lands, if they are still manufacturing grass meal from the grass growing on the aerodrome?— Not at Shannon. They are at Dublin.

110. Deputy Booth.—In regard to the catering service referred to at the bottom of page 161, how is it that £113,500 was estimated and only £85,808 was realised? —I explained that the last time I was here. Accidentally or fortuitously, the catering controller remitted three half-years’ payments in the previous year with the result that we are short one half-year but, in fact, the total for the 12 months was much larger than the total for the previous 12 months.

111. Deputy Haughey.—On page 163 there is a note about two ex gratia payments. Could Mr. MacCarthy tell us the circumstances in which the sum of £571 at (a) was paid to the firm of naval consultants?—This was in connection with a new crash launch which we got for Shannon following the K.L.M. accident. The naval consultants did a lot of work beyond the call of duty and beyond what was provided for and with the agreement of the Minister for Finance we paid them a larger fee than was originally provided for. The loss referred to at (b) represents a loss of one rubber coat and a number of pairs of rubber boots by Aer Lingus personnel when the Swissair plane crashed at Shannon. The coat was actually used for covering one of the bodies and the boots were lost in the mud. We recouped Aer Lingus the total.

112. In regard to (a), would Mr. MacCarthy tell us the cost of the launch? —The launch was pretty expensive. It was approximately £25,000.

This £571 represented additional payments. Have you the total fees?—The total cost of the launch was £22,881, say, £23,000. I have not got the actual total for the fee but it can be inferred. The original fee was 2½ per cent. of the £23,000. The additional fee is a further 2½ per cent. In effect, we doubled the fee so that the total payment would have been £1,140.

Deputy Booth.—Under what heading is that expenditure of £23,000 shown, plus the fees?—That would come under the subhead for Works and Equipment at Shannon Airport, subhead G.

113. Deputy Jones.—Is it appropriate to ask in regard to Shannon Airport what are the admission charges? They are on a different basis from those at Dublin Airport?—The figure varies. It is 2/6 for a car plus 6d. for every passenger. If a person has any business at the airport he is entitled to get a refund of the fees paid once he gets inside the airport.

If he is a visitor in the ordinary way and has a meal is he not entitled to a refund?—At Dublin the fee has been abolished, but it used to be the system that if a visitor had a meal he was refunded the cost of the ticket, but it is not the case at Shannon.

Deputy Jones.—No, but I think it would be more appropriate to raise that at some later stage.

Chairman.—If we want to advocate a change in the existing arrangement the Dáil would be the right place and the Minister the right victim rather than the Accounting Officer.

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.

114. Chairman.—There are three paragraphs by the Comptroller and Auditor General on this Vote, at page xxvi. Paragraph 77 of the Report of the Comptroller and Auditor General reads:—

“Advances to the Irish Tourist Board.

77. Repayable advances to the Board from the Central Fund under Section 16 of the Tourist Traffic Act, 1939, amounted to £421,597 at 31st March, 1950. No further advances were made after that date. In accordance with the terms of this section the advances were to be expended on works, investments and loans of a profit-earning character.”

Is there anything to add to this, Mr. Ó Cadhla?

Mr. Ó Cadhla.—These three paragraphs are informative and refer to the question of disposal of remaining properties.

115. Chairman.—Paragraph 78 of the Report of the Comptroller and Auditor General reads:—

“78. It was decided in 1948-49 to dispose of the hotel and other properties the acquisition of which had been financed from the advances. Up to 31st March, 1957, £143,362 realised on sales was surrendered to the Exchequer and I understand that disposal of the remaining properties is nearing completion. Repayment of advances amounting to £132,088 was waived by the Minister for Finance, leaving the balance of advances outstanding at £146,147.”

Are you in a position, Mr. MacCarthy, to give the Comptroller and Auditor General final information with regard to the disposal of the other properties?—I think it is not quite so much a question of the disposal of the remaining properties as the clearance of remaining advances. All the hotel properties, Ballinahinch Castle and Estate and Recess Fisheries, the Commodore Hotel, Cobh, the Portmarnock Country Club, Termon Hotel, Newtown, the Hydro Hotel, Lisdoonvarna, and the hotel stocks have all been disposed of. Ardmore was disposed of, as were Bundoran, Courtown, Furbo, Killarney, Lea House, Ballsbridge, and Tramore. Loans were made in Gaedhlacas Teo. and the Lisdoonvarna Trust and expenditure was incurred on a number of items such as stores, maintenance and consultants’ fees. Bord Fáilte Éireann have just submitted certain proposals, which are under examination, for dealing with the two loans. I do not know if that answers the Comptroller’s question.

Mr. Ó Cadhla.—Quite.

116. Chairman.—If there are no other questions we will turn to paragraph 79 of the Report of the Comptroller and Auditor General which reads:—

“79. Section 17 of the Act provides for the payment of interest on outstanding advances. After allowing for £49,860, the payment of which was waived, the liability for interest amounted to £58,109 at 1st January, 1957, and the Minister for Finance, in exercise of the powers conferred by Section 16 (3) of the Act, has agreed to the postponement to 1st July, 1957, of the payment of the amount due.”

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

Mr. Ó Cadhla.—No.

Chairman.—What happened on the 1st July, 1957, Mr. MacCarthy?—The matter is still postponed.

A further postponement?—Yes.

117. If there are no other questions we will turn to the Vote itself on page 210. What are your liabilities under this grant, Mr. MacCarthy?—Just to get a receipt.

118. Deputy Haughey.—Why is the auditor’s certificate different here? Is it because it is a grant?

Mr. Ó Cadhla.—That is so.

Deputy Haughey.—What exactly does that certificate mean? Is it that he has examined the accounts of Bord Fáilte?

Chairman.—At the bottom of page 210 it states:—

“I certify that this Account has been examined under my directions, and is correct.”

Deputy Haughey.—You only mean the account as it appears on the page?

Mr. Ó Cadhla.—We get receipts from Mr. MacCarthy and there are no details of the different expenditures.

The witness withdrew.

VOTE 56—DEFENCE.

Lieutenant-General P. MacMahon called and examined.

119. Chairman.—I do not think this opportunity should be allowed pass without commenting on the fact that this is the 32nd Committee which General MacMahon has come to help in his time. Unhappily, this is the last Committee that it will be his duty to advise as he will be retiring from his present responsibilities in the very near future. I think I can, with authority, speak for the 32 Chairmen, when I express our warm gratitude to a very distinguished public servant.

General MacMahon.—Thank you very much, Sir.

120. Chairman.—There are some paragraphs on this Vote. Paragraph 70 of the Report of the Comptroller and Auditor General reads:—

“Subhead K.—Provisions and Allowances in lieu.

70. Statements have been furnished to me showing the cost of production of bread at the Curragh bakery, and of meat at the Dublin and Curragh abattoirs. The unit costs are as follows—

The average price of cattle purchased for the Dublin and Curragh areas was £64 7s. 4d. and £62 17s. 5d. per head, respectively, as compared with £78 13s. and £74 19s. 8d. in the previous year, while the average production of beef per head was 705 lb. and 664 lb., respectively, as compared with 710 lb. and 671 lb.”

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

Mr. Ó Cadhla.—No, the paragraph is only for information.

121. Chairman.—Paragraph 71 of the Report of the Comptroller and Auditor General reads:—

“Subhead T.—Military Lands.

71. In paragraph 88 of the report on the accounts for the year 1951-52 reference was made to the compilation of a register of properties in the charge of the Department of Defence. The arrangements for the compilation of such a register were postponed pending the enactment of fresh legislation in connection with State property. In view of the enactment of the State Property Act, 1954, I have inquired as to the present position regarding the compilation of the register.”

Mr. Ó Cadhla.—I am informed that steps have been taken towards the settlement of the Department’s responsibility regarding these properties. A list has been compiled of the properties which the Department desires to retain and it will be submitted to the Department of Finance in connection with the transfer of titles.

General MacMahon.—I am afraid it will take a considerable time. The titles are not as clear as they might be, not through the fault of the Office of Public Works, and it will take a year or more. I do not want the Committee to think that it will be cleared up within the next few months. It will take a year or possibly longer.

Deputy Carty.—Deputy Corry will never wait.

122. Chairman.—If there are no further questions we shall turn to paragraph 72 of the Report of the Comptroller and Auditor General which reads:—

“Statement of Losses.

72. Losses written off during the year are detailed in a statement appended to the account. The total is made up of:—

The corresponding figures for losses in the previous year were £360 and £6,435.”

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

Mr. Ó Cadhla.—No.

Chairman.—What is the meaning of “Deficiencies of stores and other losses not affecting the 1956-57 vote?”—It affected a vote prior to that.

And it came to light in this financial year?—That is correct.

123. Chairman.—If there is no other question we will turn to the Vote itself on page 180.

Deputy Sheldon.—In regard to subhead N.—Animals and Forage—the note on the subhead says that the programme for the replacement of horses was not fully carried out and that there was also a consequent saving on the provision for forage. I cannot quite appreciate where the “consequent” comes in. I know that you do not mean the replacement of horses by tractors but presumably one horse eats very much the same as another and where then does the saving in forage arise?—Certain horses were not up to standard and were sold and new horses were not purchased because they did not come on the market.

124. Deputy Haughey.—Under subhead W. — Insurance — under what circumstances do we insure?

Chairman.—What actually do you insure?—We insure certain machinery so that we will have expert inspection of it. The insurance people carry out an inspection and, in fact, if we did not insure the machinery the inspection would probably cost more than the premium would. Of course there is social welfare insurance too as far as the Army is concerned.

125. Deputy Cunningham.—I was going to ask about social welfare insurance. Under that we come up against cases of exemption. I find it difficult in having these exemptions made where individuals apply to the Department of Social Welfare. The difficulty is that the employer should apply generally for employees as a class, like caretakers in charge of barracks and so on. Has any request been made in that regard?—No. not that I am aware of.

Chairman.—This is a detail, General, and perhaps it may be more convenient for you if you looked it up and let us have a note on the matter raised by Deputy Cunningham, whether any application has been made by the Minister for Defence to the Department of Social Welfare for an overall exemption, so as to qualify individual applicants who might apply for individual exemption and who are not free to do so in the absence of an over all exemption?—My recollection is that the question has never arisen. I do not think any application has been made.

Deputy Cunningham.—I do know that some employees made an application and were informed that it would have to be made by the employer to cover a class? —The unions did not raise it and the caretakers did not raise it.

Deputy Sheldon.—The Estimate only provides wet time insurance for engineer tradesmen. It does not seem to take in caretakers and people like that?—That is true. It does not apply to caretakers.

Chairman.—It seems to me quite clear we cannot expect the General to have at his fingertips full information on a somewhat complicated matter of detail of this character. Perhaps you would look into this question of wet time insurance at your convenience and have a note prepared as to what categories of persons in the service of the Department of Defence are covered by the insurance and whether any overall application requires to be made to the Minister for Social Welfare and, if so, has that application been made?—Very well.*

126. Deputy Booth.—On a point of correction, the insurance on plant and equipment appears to come in under subhead Q. and not subhead W.

Deputy Haughey.—I knew it came up again under another heading. I mistook the heading. I meant to raise it under Engineers’ Stores. The General has explained that the insurance of plant for £250 is really to get the insurance people to inspect the plant, and it is cheaper to do it that way?—That is quite right.

127. Chairman.—Under subhead X.3 do they not get their Grant-in-Aid or do they have to perform their operations before they indent on you under subhead X.3—the Irish Red Cross Society?—Their accounts are examined in the Department each year and, on the basis of their expenditure and cash in hands, the Minister for Defence decides what sum he will provide in the Estimate for the Irish Red Cross in the following year.

When he has provided this sum, it can happen occasionally that they do not draw it all because in this year the Minister provided £14,200 and in fact they did not draw £3,748?—It depends on the state of the accounts of the Irish Red Cross. If they do not need the funds the Department of Finance say: “We will not give them the full amount. We will give them a lesser amount.” Usually they get the full amount.

Deputy Carty.—The amount provided in the Estimate is the maximum they can obtain.

Chairman.—I gather it is a general forecast of what they are likely to ask for. I have a certain sympathy with Deputy Haughey whose eye I see flashing because this is described as a Grant-in-Aid. This really does not apply to your Vote, General, but Deputy Haughey has been inquiring on previous Votes as to the difference between a grant and a Grant-in-Aid. We thought we had explained it fully, but I am sorry to say that the form of subhead X.3 does not conform to the explanation that we provided for Deputy Haughey. However, we can take it up on another occasion. In this regard, in any case you issue the Irish Red Cross Society such part of the money voted as their outlay would appear to justify?—That is correct.

128. Deputy Jones.—In regard to subhead Y.3, on what basis is the amount provided for in An Fórsa Cosanta Aitiúil? Is it on the basis of £1 per member, as it used to be at one time?— It is a lump sum given on condition that they carry out their training—the minimum amount of training laid down—and is paid at the termination of the training period.

Deputy Haughey.—I think we are at cross-purposes. It is a Grant-in-Aid in subhead Y.3.

Deputy Jones.—A Grant-in-Aid of Unit funds?—It is a lump sum now. At one stage it was £1 per man but it is now a lump sum given to Unit funds.

Have Unit funds to provide, as they used to, for the issue of boots?—No, the boots are issued from Army stores.

129. Chairman.—In regard to subhead Y.4, what is the position in regard to the Bureau of Military History? Is it continuing?—Only to a very limited extent. They are winding up now and the winding up will be completed by December at latest. We have only made provision for nine months.

130. Deputy Cunningham.—It was estimated from the sale of surplus land that there would be a sum of £25,000 and the actual amount realised was £6,000. Were all these lands advertised for sale?

Chairman.—It was estimated there would be some £25,000 realised and in fact only £6,176 was realised. Was all the land available for sale advertised?— Yes. One of the parcels of land has to be auctioned still—that at Tallaght—but the Baldonnel lands are actually sold. The Land Commission took them over, in fact. They had been advertised for sale and we did not get what we expected to get and the Land Commission took them over. The lands of Tallaght are actually being auctioned in the next couple of weeks.

Deputy Cunningham.—It was thought they would be sold in this particular year?—Yes.

131. Deputy Haughey.—At page 187, there is a note that during the year certain losses by fire not covered by insurance were sustained. I take it that normal losses by fire are not insured. Is that not the position?—In that particular case there were stores the property of the Department of Defence, and they were not insured. There were also stores there that were issued to the Dublin Corporation and insured by the Dublin Corporation although the property of the Department of Defence. That is the distinction between the two.

Army property as a rule is not insured: —That is so.

VOTE 57—ARMY PENSIONS.

General MacMahon further examined.

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

“Subhead O.—Special Allowances to Persons who served in Easter Week, to Persons Awarded Medals and to Persons granted Pensions under the Connaught Rangers (Pensions) Acts.

73. The statutory conditions for the grant of special allowances include the application of a means test and recipients were required by Section 43 of the Army Pensions Act, 1953, to notify the Minister for Defence of any improvements in their means with a view to the revision of the rates of allowances awarded. Difficulties were encountered in securing compliance with this provision and it was decided, with the approval of the Department of Finance, that, pending the enactment of amending legislation, overpayments of special allowances which arose through the failure of recipients to notify improvements in their means should be treated as payments legally made and not recoverable. Section 43 was repealed by Section 38 (7) of the Army Pensions Act, 1957, thereby removing the obligation on recipients to notify the Minister of improvements in their means which are subject to periodical departmental review.”

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

Mr. Ó Cadhla.—No. The paragraph is fairly complete. I am informed that the overpayments which had come to light and in respect of which recovery action is not being pursued amounted to £1,447. As stated in the paragraph, the position regarding these payments has now been regularised.

Deputy Carty.—Regularised to such an extent that nobody can get the special allowance.

Chairman.—When you say regularised, there has been Department of Finance sanction for it.

Mr. Ó Cadhla.—That is so.

Chairman.—For their being abandoned?

Mr. Ó Cadhla.—That is so, and the Act has been amended by the Army Pensions Act of 1957.

Chairman.—Since there appear to be no other questions, may I say we are very much obliged, General. We wish you many happy years in which to enjoy your distinguished retirement.

General MacMahon. — Again, many thanks, gentlemen.

The witness withdrew.

The Committee adjourned.

* See Appendix VIII.