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MIONTUAIRISC NA FINNEACHTA(Minutes of Evidence)Déardaoin, 12 Márta, 1959.Thursday, 12th March, 1959.The Committee sat at 11 a.m.
DEPUTY DILLON in the chair. Liam Ó Cadhla (An tArd-Reachtaire Cuntas agus Ciste), Mr. P. S. Mac Guill, Mr. J. Mooney and Mr. S. Ó Buachalla (An Roinn Airgeadais) called and examined.VOTE 54—POSTS AND TELEGRAPHS.Mr. Leon Ó Broin called and examined.376. Chairman.—Paragraph 78 of the Report of the Comptroller and Auditor General reads:— “Subhead H.2.—Losses by Default, Accident, etc. 78. The losses borne on the Vote for the year ended 31 March 1958 amounted to £4,479. A classified schedule of these losses is set out on page 175. At page 176 particulars are given of 20 cases in which cash shortages or misappropriations amounting to £2,112 were discovered; the sums in question were made good and no charge to public funds was necessary.” Is there anything you wish to add, Mr. Ó Cadhla? Mr. Ó Cadhla.—This is the usual paragraph. The amount charged to the Vote, £4,479, is £879 more than the Estimate, and shows an increase of £1,319 on the figures for the previous year. Compensation for loss of or damage to parcels and insured letters was £2,493, compared with £2,050 for the previous year. 377. —Chairman.—Is there any exceptional feature about that, Mr. Ó Broin? —Not actually. We regard the figure as normal. The largest single figure in it is £282, caused by the accidental loss of paid vouchers between the Waterford Head Office and the Accounts Branch. The account also includes a sum of £1,133 for stamps presented to the Universal Postal Union, on the occasion of the quinquennial meeting of that body. That has swollen it somewhat. These presentations are treated as a loss, merely for accounting purposes. They are not really a loss at all. 378. Chairman.—Paragraph 79 of the Report of the Comptroller and Auditor General reads:— “Stores 79. A test examination of the store accounts was carried out with satisfactory results. In addition to the engineering stores shown in Appendix No. II as valued at £1,586,913 on 31 March 1958, engineering stores to the value of £12,366 were held on behalf of other government departments. Stores other than engineering stores were valued at £478,798 including £182,656 in respect of stores held for other government departments. Including works in progress on 31 March 1958 the expenditure on manufacturing jobs in the factory during the year amounted to £26,281, expenditure on repair work (other than repairs to mechanical transport) to £54,981, and expenditure on mechanical transport repairs to £9,078.” Chairman.—Is there anything you wish to add, Mr. Ó Cadhla? Mr. Ó Cadhla.—This paragraph contains the usual information relating to the engineering and other stores held by the Post Office at the end of the year. Chairman.—It is a purely informative item? Mr. Ó Cadhla.—Yes. It will be noticed from Appendix II to the Appropriation Account, page 181, that the stock of engineering stores decreased by £132,000 to £1,597,000 between 1st April, 1957 and 31st March, 1958. 379. Chairman.—Paragraph 80 of the Report of the Comptroller and Auditor General reads:— “Revenue 80. A test examination of the accounts of Postal, Telegraph and Telephone services was carried out with generally satisfactory results. Irregular transactions relating to the payment of money orders which were noted are still under investigation. The net yield of revenue for the years 1956-57 and 1957-58 is shown in the following statement:—
£8,180,000 was paid into the Exchequer during the year leaving a balance of £780,642 at 31 March 1958 as compared with a balance of £699,079 at the end of the previous financial year. Sums due for telephone services amounting to £2,297 were written off during the year as irrecoverable.” Mr. Ó Cadhla.—The irregular payments referred to in this paragraph originated in the Money Order Section of the Accounts Branch. Investigation disclosed that a Clerical Officer in the Section was responsible and proceedings were taken against him. I understand that the ascertained loss for the period for which documents are available—March, 1955, to September, 1957—amounted to approximately £1,400. 380. Chairman.—Is there anything you wish to add, Mr. Ó Broin?—No, except that you will be given an opportunity of discussing that on the Appropriation Accounts for the coming year. There is nothing actually charged in the account before you. The fraud investigation has not been completed yet. The frauds were of a very ingenious nature and extended over a number of years. It involved, as the Comptroller and Auditor General said, a loss of £1,400. The officer concerned has been dismissed and prosecuted; and we have taken steps to prevent a recurrence. The matter will arise on the Appropriation Accounts next year?—Yes. 381. Chairman.—Paragraph 81 of the Report of the Comptroller and Auditor General reads:— “Post Office Savings Bank 81. A test examination of the accounts of depositors in the Post Office Savings Bank was made with generally satisfactory results. The final account of the Bank for the year ended 31 December 1957 has not yet been submitted for audit.” Is there anything you wish to add, Mr. Ó Cadhla? Mr. Ó Cadhla.—The Minister for Finance’s account of the Savings Bank Fund for the year ended 31 March, 1958, was not available for some months after the date of my report. It has since been audited and the information which I normally give in my report is as follows:— “The balance due to depositors, inclusive of interest, amounted to £87,763,040 (including £11,754,849 in respect of the liability to Trustee Savings Banks) on 31 December, 1957, as compared with £84,941,414 at the close of the previous year. Interest accrued during the year on securities standing to the credit of the Post Office Savings Bank Fund amounted to £3,374,439. Of this sum £2,168,172 was paid and credited to depositors in respect of interest, management expenses absorbed £215,838 and £990,429 was set aside towards provision against depreciation in the value of securities.” 382. Chairman.—What is the practice, Mr. Ó Broin, when the valuation of securities annually yields an appreciation? Is that brought back to the credit of the account?—I think you ought to address that question to the representatives here of the Department of Finance. We do not deal with the question of the balances. We hand them over to the Department of Finance, which is responsible for the investment policy. Surely you must know what the position is about the account? Do you advert to the question as to whether there is a concealed reserve created? Is it brought back to account in accordance with the Central Bank procedure when there is an appreciation, or is there a concealed reserve in accordance with the commercial banks’ procedure?—I must confess that I leave that to the superior wisdom of the Department of Finance. I advert myself, as Accounting Officer, to the general position revealed in these accounts, and, on the question of coverage, I have some views; but the question of appreciation is not one on which I would like to comment. Perhaps at your convenience you would let us have a note. The question is a net one, as to whether the Central Bank procedure is adopted where the investments are valued each year and either an increase is shown, or the commercial banks’ procedure, where it is left as a concealed reserve. Perhaps you would let us have a note at your convenience?—Yes, I will.* 383. Chairman.—Paragraph 82 of the Report of the Comptroller and Auditor General reads:— “82. I observed that £400 was charged to a suspense account in respect of a deposit paid in error, because of a similarity in name, to the administrator of the estate of a deceased person. The depositor of this amount subsequently applied for and was refunded his deposit. Efforts are being made to recover the erroneous payment.” Mr. Ó Cadhla.—A sum of £400 was paid in error to the administrator of the estate of a deceased person, because of a similarity in name. The depositor of the amount was subsequently refunded his deposit. I understand that, so far, the amount paid in error has not been recovered. 384. Chairman.—Can you tell us any more about that, Mr. Ó Broin?—Yes, if you have the time. It is a most extraordinary case. In February, 1955, a firm of solicitors, in Abbeyfeale, wrote to the Savings Bank, inquiring if there were any monies in the Savings Bank or in Saving Certificates in the name of John Kirby, of Rylane, Abbeyfeale. There was no trace of a Savings Certificate holding, but a Savings Bank account of that name and that address was traced. As the Deposit Book relating to this account could not be produced, the solicitors were requested to furnish a specimen of the deceased person’s signature for checking against the depositor’s signature held in the Savings Bank. The specimen received was considered to compare satisfactorily with that held by the Department. In addition, confirmation was obtained by inquiry to the local postmaster, that no other person named John Kirby had resided at Rylane, Abbeyfeale. A statement of the balance at the date of death was then furnished to the solicitors and subsequently the amount, including the interest, namely, £407 10s. 7d, was paid to the administrator on production of Letters of Administration. In the month of May, 1956, the deposit book relating to the amount in question was received in the Savings Bank for examination, with a cover for its return, addressed to John Kirby, Knocknacrohy, Abbeyfeale. Inquiries concerning this John Kirby revealed that he was, in fact, the depositor entitled to these monies. He had resided in Great Britain since he was a child but had visited Rylane for a short holiday, in 1954, during which he had opened an account at the local Post Office; and the account was in the name of John Kirby of Rylane. Its existence was forgotten by the local postmaster when the original inquiries were made. He was paid the full amount due to him, out of a suspense account. The solicitors were informed of the erroneous payment to their client and they were asked to recover the money. The estate had already been divided amongst six beneficiaries, four of them in the United States. Efforts are still being made to recover the monies, but so far nothing has materialised, beyond an undertaking by one of the American beneficiaries to repay the money once she is satisfied that it is legally due. That is the whole story. 385. Was there any obligation put on the solicitor to produce the deposit book? —He had not got the deposit book. He was not aware whether there was one or not. He proceeded to make the ordinary inquiries as to whether there was an account. I presume that he established to the satisfaction of the Department that he had no deposit book. Did you raise an eyebrow when you heard that £400 had been paid without the production of the deposit book?—The Department was satisfied that all that was necessary had been done, namely, to check the existence of the account, to compare the handwriting and to establish by local inquiry what the situation was. It was in those circumstances that payment was made. 386. I would be glad to have your opinion for guidance, Mr. Ó Broin, as to the propriety of paying out a balance in the absence of the deposit book?—Well, occasionally we have to do that. Deposit books go astray, and we are anxious to be reasonable. In circumstances like these, we impose an independent check. The independent check was the confirmation of the existence of an account, the recognition of the handwritings and the inquiry from the local postmaster—who usually knows everybody—but he had forgotten about this John Kirby putting in a short appearance during a holiday. Deputy Brennan.—It is easy to visualise where a book can become misplaced, particularly where the holder has died. Chairman.—I have no doubt of that. 387. Chairman.—Paragraph 83 of the Report of the Comptroller and Auditor General reads:— “Customs Duties on Parcels 83. Irregularities discovered in connexion with the collection of customs duties, etc., on postal parcels involved loss of revenue. A Post Office official was prosecuted and dismissed. I have inquired as to the ascertained defects in the system of control which facilitated the misappropriations of revenue and also the amount misappropriated.” Have you any observations, Mr. Ó Cadhla? Mr. Ó Cadhla.—Certain irregularities were discovered in connection with the collection of Customs Duties, etc., at the Parcels Office, Amiens St., and the official found responsible was prosecuted and dismissed. In reply to my inquiry, I was informed that the system of control of parcels due for Customs treatment was subjected to a critical and exhaustive examination in the light of these frauds. The frauds may have been facilitated by a failure to carry out a standing instruction to destroy at the end of each day unused date-stamped charge labels. I am assured that this weakness has since been remedied and that the system of control is sound. The amount of revenue involved was about £78. 388. Chairman. — Any comments to make on that, Mr. Ó Broin? Mr. Ó Broin.—Yes. This was the first case in 20 years of fraud in the Parcel Office. We collect about £360,000 a year in small individual sums on incoming parcels. Notwithstanding that, losses and frauds since the inception of this independent administration have been quite negligible. The incidence of fraud on the letter office side is much higher. There is no difference whatsoever in the method of recruiting staff, or in the standard of honesty of the postmen, so we must assume that the system we have in the Parcel Office is a good system. As the Comptroller and Auditor General has suggested, the trouble in this particular case has arisen because of failure to comply completely with the procedure laid down. We think the system is a good one. It has been tightened up, and we are hoping there will be no recurrence. 389. Chairman.—Could you tell us exactly how the fraud was perpetrated?— What came to light was that a standing instruction providing for the destruction, at the end of each day, of unused date stamped charge labels was not being strictly observed. This may, to some extent, have facilitated the official, once he succeeded in gaining possession of unassessed dutiable parcels. The parcels had to be brought from one floor to another in a building which is overcrowded and quite unsuitable. This undoubtedly also facilitated the operations of this particular individual. What did he actually do?—He made out charges on these little labels and stuck them on the parcels; he then took the parcels out and secured payment of duty from people around the town. He himself carried the parcels out of the post office?—He took them out himself and obtained payment of the duty from the addressees. He masqueraded as a postman?—He was, in fact, a postman. The strange thing about it was that the assessments, where we were able to check upon them, were, in each case, correct, which may indicate that there was some collusion between him and someone else in the place. Was collusion detected?—No. Deputy Brennan.—He went to a lot of trouble for the sake of £78, did he not? Mr. Ó Cadhla.—The amounts were very small. Mr. Ó Broin.—A few shillings in each case. 390. Chairman.—Perhaps if one understood the situation better it would not sound so odd, but it does sound odd that a postman in what was virtually the headquarters of this service could walk out of the building with several parcels under his arm and deliver them around the town, collect duty and get back to his work without anyone noticing that he had gone out?—That may seem odd, but one would have to see the building to understand the possibility. The building is frequently cluttered up with parcels. There is tremendous movement from floor to floor, and constant coming and going. However this man did it, he succeeded in taking out a substantial number of parcels and claiming payment of duty on them. However, the whole thing has been gone into with extreme thoroughness—I am confident of that—and it has been agreed that the system is, by and large, a sound one. All we can do now is just to apply it more carefully. 391. Was there a supervisory officer in charge of this postman and had he anything to say as to how this postman got out during the day?—There was an inquiry, but I have not got the precise details with me. You can take it that the man was supervised, but, notwithstanding that, he succeeded in bringing this thing off. He was dismissed?—He was dismissed and imprisoned. Was any disciplinary action taken with regard to the supervisory officer?—I do not think there was. If you like, I will let you have fuller information on that score. Chairman.—I should be glad of that because it does sometimes occur to me that, if you put temptation in the way of a very junior person, he is very liable to fall if he comes to learn that the supervision is lacking.* 392. Deputy Brennan.—He disposed of the parcels. Did he dispose of them otherwise than to the addressees and, if he had done so, would he have been detected? He was not supposed to take out parcels. He took them out, and he could have done anything at all with them. Had he not been half honest, he could have sold the contents of the parcels. Deputy Haughey.—There is no such thing as being half honest. Chairman.—If he had, in fact, sold the contents of the parcels would his fraud have been detected?—Possibly not. In fact, in this particular case, what aroused our suspicions was that one of the addressees subsequently claimed a refund of duty and it was then discovered that no duty had, in fact, been paid. 393. We want all the help we can get from Mr. Ó Broin. In a great organisation such as the Post Office, difficulties are bound to arise from time to time, but what troubles me is the fact that a postman who had no authority to take a parcel out of the building at all was able to take out parcels over a period. He disposed of them to the addressees, but it appears to me as if the supervision over that postman must have been very lax? —It might not be. I am satisfied the supervision is quite good, but a clever person can sometimes get away with it. The Committee is acting on the assumption that all the employees of the Department of Posts and Telegraphs are clever persons?—It is very nice of you to say that. 394. Reverting to paragraph 82, the book, in this case, was not produced and, on inquiry by the solicitor for the deceased person, it was not to be found. Is it the experience of the Post Office that deposit books remain unproduced for protracted periods, or is it their experience that these books turn up regularly to have interest added?—Unfortunately very many depositors hold on to the books and are very careless about sending them in as required. Therefore it would cause no admiratio if a book did not turn up for two or three years although there was a credit upon it?—No. 395. Deputy Haughey.—I am sorry I was late in arriving and so was not here when paragraph 81 was being dealt with. Might I ask at this stage whether the final account has yet been submitted? Chairman. — I should tell the Deputy that the Comptroller and Auditor General gave full information on that. It has been submitted and all the particulars have been furnished to us and they will appear in the Report. That, having been disposed of, we can turn now to the Vote itself. 396. Deputy Brennan.—There is a remarkable saving attributable, I think, to improved methods and reductions in staff. It is a rather significant saving. Could we have some indication as to what the improved methods are?—The reduction in staff arises mainly from improved working methods and a re-organisation of services generally. Taking telegraphs alone, we have re-organised the service very drastically and replaced morse point-to-point working by a modern teleprinter automatic switching network between the main centres, based on a telegraph automatic exchange at Dublin and based also on the telephoning of short distance messages directly from originating to delivery office. We have also got on to a new basis of agreement with the railway companies, introducing a modernised service for them, and recovering the post office clerks who were unprofitably employed in many centres throughout the country. As a result of these operations we have, as I say, reduced staff and by these and other means have cut the very serious telegraph deficit which, in 1954-55, amounted to £378,000, down to £178,000 in 1957-58. That is to say we knocked £200,000 off it. It has gone down further since. All the time we continue to look at the whole of the Department’s services and every aspect of them. Every opportunity we get we avail of to effect economies or introduce better methods of working. At the same time, it is probably true to say that, by and large, we have kept our rates as low, if not lower than, those across the water. Simultaneously, we have maintained the standards of services, where we have not improved them. 397. Deputy Brennan.—I was wondering to what extent automation was displacing personnel? Chairman.—Has automation, in fact, contributed to the reduction in personnel? —Yes. Of course, in some directions the staff is expanding. The introduction of automation has reduced personnel. Any redundancy that has occurred we have hitherto dealt with reasonably satisfactorily. 398. How many sites have you awaiting development?—We have quite a substantial list of jobs of that sort on the way, but I have not got the particulars before me. If you are interested, I will send them to you. Chairman.—We should be glad to have them.* 399. Deputy Haughey.—I mentioned this matter before: we have salaries, wages and allowances, and with that we have rent and office fittings, purchase of sites, etc. It is a question of grouping the items under more convenient headings. Chairman.—Is this in relation to subhead E.1.—Conveyance of Mails by Rail? Deputy Haughey.—No—in relation to subheads A. to D. The heading is “SALARIES, WAGES AND ALLOWANCES”. Under it, we find Purchase of Sites, Rent, Office Fittings, etc.—subheads C. and D. Mr. Ó Cadhla.—It is intended that the line drawn under subhead A.4. would indicate separation of the first four subheads from the remainder. There is no main heading for subheads B., BB., C. and D. Chairman.—Does that explain Deputy Haughey’s point? Deputy Haughey.—It explains my point, but it does not meet my objection. I imagine that an additional heading should be inserted to cover subheads B. to D. Chairman.—Perhaps you would look into that, Mr. Ó Broin? Deputy Haughey.—It is just a purist approach. Mr. Ó Broin.—I think an opportunity will arise in connection with the reconsideration of the form of the Estimate, which is proceeding. 400. Deputy Haughey.—With regard to subhead E.5.—Conveyance of Mails by Air—the note on page 174 says “Increased traffic and more accounts cleared than expected.” Could we have a little more information about that subhead?—The main reason why air mail payments have been rising steeply is that more and more letters for long-distant countries are being sent by air. There has been no significant increase in recent years in the payments for air transport for correspondence between here and Britain. Such increase as is taking place the whole time is in respect of payments for long-distance conveyance. In that case, are our receipts from this particular source going up?—Yes. On the revenue side, there is a corresponding, if not a greater, increase than is here shown Deputy Brennan.—How do the air-mail receipts compare with the over-all cost of the service?—We make a profit on the business. 401. Chairman. — Will the Packet Services (British and Foreign), under subhead E.4. tend to decline as the conveyance of mails by air, under subhead E.5., extends?—No. Certainly not the Packet Services. The principal item there is the service between here and Great Britain. An interesting situation of that —I was looking into it only in the last few days—is that the volume of mail conveyed by the night Aer Lingus service to Britain is limited by the capacity of the plane. Because of the steady growth in the volume of letter correspondence between here and Britain, the volume conveyed by the packet service in both directions is now nearly as large as it was immediately before the air service was introduced. In 1949 the traffic was about 15,500 bags per month; now it is about 15,000 bags per month. So the aeroplanes cannot carry the traffic you would give them?—We find it most desirable to retain the packet service as a standby and because it carries parcels. It is available on days not merely when the plane cannot go because of bad weather—which is about 5 per cent. of flights—but at week-ends when we do not require the expedition that the aeroplane gives. In any event, it ties in with the national economy to retain the packet service. 402. Deputy Brennan.—Are the mails not specifically marked “Air Mail” sent by air to Great Britain?—Normally our aim, up to the maximum capacity of the plane, is to send everything except parcels that way. Does that apply to the United States? —There is a different situation there. There, you pay the extra fee. You mark the thing “Air Mail.” It is sorted out and sent specially. Chairman.—Am I right in believing that the only destination to which ordinary mail goes by air is Great Britain?—To Great Britain, certainly. Deputy Haughey.—And the Continent? —I am not quite sure about that but certainly all the stuff to Great Britain and possibly to the Continent via Great Britain goes by air. It gets expedition through Great Britain. Chairman.—Not to other Commonwealth countries, if they are sent via Great Britain?—I do not think so. Chairman.—Perhaps Mr. Ó Broin would let us have a note in answer to Deputy Brennan’s point of exactly what ordinary mail is carried by air if it is not endorsed “Air Mail”.* 403. Deputy Brennan.—With regard to subhead K.—Engineering Materials—the note on page 174 says “Relief from Telephone Capital funds less than expected.” Chairman.—What is the basis of allocations of expenditure out of that subhead between Telephone Capital funds and the Vote itself?—All stores purchased out of the K. (Engineering Materials) subhead are used on capital—telegraph and telephone—renewal or maintenance works. The value of stores used on telegraph capital, and all renewal and maintenance works is charged to the Vote and the value of stores used on Telephone Capital works is charged to Capital, that is, to the extent to which the value of telephone plant is increased. New telephone works are charged to capital and renewal and maintenance go on the Vote. So that here the explanation is that more maintenance work was done than contemplated and rather less work of a capital character?—Yes. That was caused in this particular year by the restrictions on capital expenditure which led to concentration on the maintenance works and on capital works with a high labour content to avoid unemployment. 404. With regard to subhead L.2.— Contract Work—how do you determine when you will do work by contract and when you will do it yourselves?—We put the big or highly specialised jobs out to contract as, for example, the provision and installation of exchange equipment, the installation of central heating plant, lifts and the restoration of road surfaces. 405. Subhead N.2. refers to Compensation Allowances under Article 10 of the Treaty of 6th December, 1921. Are these officers retiring under Article 10?—These are retired officers. And are there still officers retiring, under the provisions of Article 10, in your Department?—No, but there are some pensioners still in existence who could have retired under Article 10 but did not do so. And they are drawing pensions and they continue to appear in the Account not as Article 10 pensions but as ordinary pensions?—Yes. 406. Subhead O.2. refers to Provision and Installation of Equipment and Operating and Maintenance Charges, Rent, etc. Is there any explanation for the saving on that subhead?—We deferred, in consultation with the Department of Industry and Commerce, expenditure on a number of important works in which we were jointly interested. I have the particulars here. On general grounds of economy in the year?—Certainly I would say that if money had been easier we would probably have gone ahead faster with some of these works. And some of them will have proceeded in the current year?—Yes. VOTE 55—WIRELESS BROADCASTING.Mr. Leon Ó Broin further examined.407. Chairman.—Are the licences tending to increase or dwindle?—They are still increasing slightly every year. Do you collect a licence fee for a television set?—Yes, we do. We do not issue any television licences but we charge the ordinary 17/6d. to holders of television sets. Deputy Haughey.—If somebody has a wireless and a television set in the home, what is the position?—We charge only the one fee. Deputy Cunningham. — Suppose a person has two wireless sets. Are two fees collected?—No—only in respect of the home, one fee in respect of each separate place. Deputy Brennan.—That was the result of a High Court decision?—I think that decision referred to whether or not a motor car was, in fact, a place. 408. I want to ask a question regarding receipts from advertisements. Are the sponsored programmes showing a profit? —If you put the question perhaps differently. Does Radio Éireann pay for itself? I am asking the question because, if the time available for sponsored programmes were extended, would it not help to make up losses in other directions?— Of course, it would but you may take it that not everybody in broadcasting is concerned that there should be an extension of the time. The Comhairle feel very strongly on that subject. Chairman. — You must remember, Deputy, that we are confined to matters of administration and not of policy. Deputy Brennan.—We are discussing the question of making the thing pay. Chairman.—I do not think we really are. That is a matter for discussion in the House. If there is no other question on Wireless Broadcasting, we are very much obliged to you, Mr. Ó Broin. Deputy Haughey.—We look forward next year to examining the accounts on television. The witness withdrew. VOTE 58—EXTERNAL AFFAIRS.Mr. C. C. Cremin called and examined.409. Chairman.—Paragraph 90 of the Report of the Comptroller and Auditor General reads as follows:— “Subhead C.1.—Cultural Relations with other Countries (Grant-in-Aid) 90. Compensation amounting to £376 was paid to the owners of two pictures in respect of damage to the pictures while on loan to the Cultural Relations Committee for showing at the Venice Biennale Exhibition of 1956. The pictures were insured by the Department against all risks excluding risks whilst on exhibition. I inquired as to the circumstances in which the pictures were damaged, and the position regarding settlement of the claim against the insurers. I am informed that it was not until January, 1957, when the pictures were returned to the owners, that they were found to be damaged and that negotiations on the claims were still in progress with the insurers.” Can you give us any more information? —The position is this. In the meantime, the matter has been closed by the settlement by the insurers of the claim by a payment to us of £235, which means that we are at a loss, by reference to this figure of £376, of £141. I might perhaps say something about the curious nature of the case. The two pictures went to the Venice Festival in 1956 and, as indicated in the paragraph, they got damaged, but the painter—it was Mr. Le Brocquy— received an award at the Festival and this enhanced the value of the pictures as insured by us. They were, in fact, insured for the full value of the pictures at the time they were despatched. Meantime their value had appreciated. On the other hand, neither of the pictures was destroyed: they were only damaged but the owners were not prepared to sell them. They made certain claims. Their claims came to £458 15s. 0d. We proposed to reject those claims but we were ultimately, on the basis of legal advice, advised to settle. We settled on the basis of a figure of 200 guineas for one picture and £166 for the other, which is the total here of £376. We took the matter up with the insurers at the same time. They, for various reasons, determined they were not obliged to refund to us the total for which the pictures had been insured. Ultimately, we got from them £235 in respect of the two pictures so that the matter is closed in that manner, leaving us with a loss of £141. Deputy Haughey.—It is in the cause of Art. 410. Chairman.—Paragraph 91 of the Report of the Comptroller and Auditor General reads as follows:— “Subhead C.2.—Irish News Agency 91. Repayable advances amounting to £15,000 were issued under section 11 (1) of the Irish News Agency Act, 1949 and extra-statutory grants to the amount of £22,668 were also issued to the Agency to meet the expenses of winding up its affairs. The liquidation was not completed at 31 March 1958. The repayable advances issued to the Agency since its formation in 1949-50 amounted to £333,500 but no repayments have been made in respect of these advances. The accumulated losses shown in the Agency’s balance sheet at 31 March 1957 were £315,336.” Any comment on that, Mr. Ó Cadhla? Mr. Ó Cadhla.—The Irish News Agency is being liquidated. The total advances from voted moneys to the Agency from its formation in 1949 to date amounted to £333,500, including £15,000 in the year under review. No repayments have been made in respect of these advances. During the year extra-statutory grants amounting to £22,668 were also made to the Agency from this Vote to meet the expenses of winding-up its affairs. The accumulated losses in the Agency’s balance sheet as at 31st March, 1957, were £315,336. I understand that the liquidation is now nearing completion. 411. Chairman.—Has the liquidation been completed? Mr. Cremin.—Not entirely. It will be completed, we expect, on the 25th of this month. The dissolution took place in November, 1957. The winding-up process has been rather protracted. There is a meeting of the shareholders on the 25th March which, it is expected, will complete the winding-up. There may be some slight refunds, not very many—a matter of a £100 or £200. 412. Does the figure for accumulated losses include the cost of winding-up or is that an addition?—The cost of winding-up would be in addition to the accumulated losses because these are as on the 31st March, 1957. The total figure would appear to be £356,168. That would be the total cost of this enterprise, subject to whatever small refund that may occur when the winding-up is completed in a fortnight’s time. When that is complete, will it be the subhead of an Estimate in some particular financial year? How will the money be provided? — The repayable advances amount to £333,500, plus £22,668 as extra-statutory grants. In effect, that is equivalent really to a repayable advance but when it came to winding-up the Agency it was not clear from the Articles of Agreement whether that operation would justify a repayable advance: the Articles of Agreement did not envisage the situation which would arise when the Agency was being wound up. It was necessary on the other hand to complete the operations to make this sum available and this method was adopted. Chairman.—Have you any comment to make on that, Mr. Ó Cadhla? Mr. Ó Cadhla.—In respect of the repayable advances amounting to £333,500 I assume that the authority of the Dáil will be obtained for the write-off by way of Supplementary Estimate?—Whatever is required in that respect will be done. Chairman.—That will ordinarily be done in the coming financial year or in this financial year?—In the coming financial year. Mr. Ó Cadhla.—It is now very near the end of March. 413. Deputy Haughey.—Just before we leave that—I notice that the accumulated losses up to the 31st March, 1957 were £315,336 but, in addition to that, there would appear to be another £40,832— namely—the difference between £315,336 and the £356,168 which the Accounting Officer mentions. Did the Agency cease operations on the 31st March, 1957, and, if so, is that £40,832 entirely applicable to the winding-up costs or are there additional operational losses subsequent to the 31st March, 1957?—The position is this. There is a working loss subsequent to the 31st March, 1957. It was £14,289 19s. 3d. up to the date of the dissolution which was in November, 1957. The remainder of the additional expenditure is made up of the payments to staff, in lieu of notice, which worked out at almost £12,500; payments to directors, in lieu of notice, which worked out at £850 and payments in consideration of the cancellation of contracts which came to £7,350 odd. I think that is the approximate total of the difference between those two figures. 414. Apart from the additional operational loss up to November, there is £26,539 to be accounted for. You have £333,500 plus £22,668. That gives you £356,168, the figure you gave us. If you take from that the accumulated loss up to March, 1957, £315,336 you are left with £40,832. Deduct from that £40,832 your operational losses up to the cessation in November, £14,289 19s. 3d., and you are left with £26,543 to be accounted for?— Yes, I think those figures are correct. The total is £41,000 approximately. The figures I mentioned only came to £33,000. There is a gap of £8,000. Chairman.—Perhaps the Accounting Officer would let us have a Note at his convenience? It is extremely difficult to deal with figures by way of question and answer. If it is convenient, Mr. Cremin, would you let us have a note on these figures? I may add that the Clerk to the Committee will, if you so require, furnish you with details of Deputy Haughey’s questions in order to assist you in preparing the note* 415. Deputy Haughey.—On subhead D.—Appropriations in Aid and Extra Receipts payable to Exchequer—in one of these headings in a previous year we dealt with the question of bank charges in relation to sums remitted abroad?— The heading that includes those in this Vote is A.3. I have got the figure. Actually, £400 was the total of the bank charges in that year, representing a commission of one-eighth of 1 per cent. on such transfers. Chairman.—Deputy Haughey, do you want to refresh your memory as to the questions you asked on the previous occasion? Deputy Haughey.—No, only to be satisfied that these were normal banking commissions; that there were no savings which could be effected. Mr. Cremin.—It appears to be normal banking practice. If this particular item is of interest, I may mention that it appears also in the next Vote in respect of each of the main subheads. VOTE 59—INTERNATIONAL CO-OPERATION.Mr. C. C. Cremin called.No questions. The witness withdrew. The Committee adjourned. |
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