Committee Reports > List of Committees > Dáil > 1959 > Committee of Public Accounts > Report - Appropriation Accounts 1957 - 1958

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 23 Aibreán, 1959.

Thursday, 23rd April, 1959.

The Committee sat at 11 a.m.

DEPUTY DILLON in the chair

Liam Ó Cadhla (An tArd-Reachtaire Cuntas agus Ciste), Mr. C. J. Byrnes, Mr. P. S. MacGuill and Mr. J. F. Maclnerney (An Roinn Airgeadais) called and examined.

VOTE 27—AGRICULTURE.

Mr. M. J. Barry (Deputy Secretary, Department of Agriculture), called and examined.

477. Chairman.—Mr. Barry has kindly come to help us in regard to questions addressed originally to Mr. J. C. B. MacCarthy with regard to subhead J.3 of the Vote for Industry and Commerce relative to the sale of wheat. Mr. Barry, when Mr. MacCarthy was here, we asked him questions in regard to paragraph 66 of the Comptroller and Auditor General’s report on the 1957-58 Appropriation Accounts, relative to subhead J.3 of the Vote for the Department of Industry and Commerce—Losses on Sale of Wheat. I asked him—I quote from the Minutes of Evidence:—

“Mr. MacCarthy, in regard to the loss on 18,893 tons of wheat sold for animal feed was this millable wheat?”

Mr. MacCarthy’s reply was:

“I think it was not millable. This matter was almost entirely dealt with by the Department of Agriculture. We kept it on our Vote purely for convenience because we had the remnant of the subsidy but, from that year onwards, it has been taken care of on the Agriculture Vote and all arrangements for fixing prices and so forth were settled by the Department of Agriculture. This was wheat which was definitely surplus to the millers for the manufacture of flour but, yes, it was millable, I understand.”

I then asked Mr. MacCarthy:

“Does the payment on account on the anticipated losses on 33,407 tons come within the same category?”

He replied:

“Yes, that is the same.”

I then asked:

“In fact this was the sale of millable wheat primarily designed to clear storage capacity?”

Mr. MacCarthy replied:

“Exactly.”

Deputy Lynch asked:

“Was that exported?”

and Mr. MacCarthy gave some information.

Then I said:

“Am I right in saying that if this wheat had been retained, with the failure of subsequent year’s crop, it might have got into consumption as millable wheat?”

Mr. MacCarthy replied:

“I do not know. I suggest that is possibly a question that you might ask the Accounting Officer for the Department of Agriculture because, from the 1st April, 1958, my responsibility in the matter ceased.”

Deputy Lynch asked:

“What amount of the wheat was exported out of the 33,000 tons?”

Mr. MacCarthy said:

“I am afraid I cannot answer that because, as I say, from the 1st April, 1958 I have no knowledge of it. Export control is, in fact, administered by the Department of Agriculture and I would not have any figure on that.”

I said:

“I think in the light of what Mr. MacCarthy has said we might reasonably ask Mr. Nagle to see us again to discuss this paragraph with us, in view of the fact that there is this division of responsibility and that, at a certain date, Mr. MacCarthy’s responsibility ended and that responsibility moved over to the Department of Agriculture.”

Mr. MacCarthy replied:

“I think that would be much better, if I may say so. Mr. Nagle would know the answers.”

Could you tell us, Mr. Barry, were the 18,893 tons of wheat sold, in respect of which a loss of £224,053 arose, millable wheat?—Yes, Mr. Chairman, it was all millable in the sense that it had been taken in by the millers for milling but it included some 1956 wheat which was taken in by the millers, under pressure from the Government at the time, because the 1956 crop was particularly poor quality and there was a lot of trouble about sprouting and so on but it was taken in as millable wheat.

478. In regard to the payment on account of anticipated losses on 33,407 tons, was that also millable wheat?—Yes, it was all millable wheat.

479. Could you tell us, Mr. Barry, was it sold primarily to make available storage space or why was it sold at a heavy loss if it had been accepted, even under pressure from the Government, by the millers as millable into flour?—It was sold because the stores were full up with wheat. There seemed to be no possibility that it could be used for flour manufacture and another crop was expected. The figures, probably, will make this clearer. There was a carry-over from the 1956 crop of 75,000 tons and there was an estimated yield from the 1957 crop of, I think, 375,000 tons, that is the mill intake in terms of dried wheat.

Of how much?—375,000 tons. That gives a total of 450,000 tons. Using roughly 80 per cent. of native wheat in the grist and with an extraction rate of 80 per cent. the year’s requirement for flour was something like 280,000 tons, leaving, in surplus, 170,000 tons.

Which would be carried forward?— From that might be deducted a carry-forward of, say, 50,000 tons. That left in round figures 120,000 tons surplus to what the millers might have been expected to use for the manufacture of flour and there was a prospect that, given a normal harvest with an average yield in 1958, we could have an excess of something up to another 100,000 tons.

That is to say, the 1958 harvest was expected—?—If there had been a normal harvest giving a normal yield of average quality grain, we might have had another 100,000 tons added to the 120,000 tons I have just referred to.

480. Is that on the assumption that the 1958 harvest would yield 375,000 tons?— Yes—say about 380,000 tons, taking round figures.

Round figures, yes, which would have left 500,000 tons, when the 1958 harvest was in. You have 120,000 tons?—Yes.

A carry-forward of 170,000 tons, from which you subtract a normal carry-forward of 50,000 tons, leaving 120,000 tons surplus?—Yes.

Then you contemplated that you might get 380,000 tons from the 1958 harvest?— Yes.

That would give you a total of?— 500,000 tons.

Plus 50,000 tons carried forward. That would give you 550,000 tons in store?— Yes, in round figures that is the size of it.

481. Was it just in order to avoid the possibility of having to find storage for so large a quantity as 550,000 tons that the procedure was taken to dispose of over 52,000 tons?—Well, there were a couple of factors. There was the question of the physical accommodation for this wheat. There was the cost of carrying it forward and there was the prospect that if it had to be carried forward indefinitely we should one year get to the stage where there just would not be any need for a new wheat crop.

482. In fact, the 1958 crop, of course, yielded practically no millable wheat?— Only about something like 10 per cent. of it in the end came up as millable wheat.

483. So that if, in fact, this wheat had been retained, it could have been milled? —If we could have guessed that the 1958 harvest was going to be so bad then we could have provided for the short fall by keeping all this wheat.

484. And it would have been converted into flour. In your judgment is it unthinkable to have a carry forward normally of more than 50,000 tons of wheat?—The normal carry forward, from the miller’s viewpoint, is something between 30,000 and 40,000 tons but a bigger amount has been carried forward and the 50,000 tons in this case was a bigger than normal carry forward. If you hold appreciably bigger quantities, there is more involved than the mere storing of the grain because it has to be shifted from the stores where it is so that the new wheat can be taken in. In other words, drying plant is geared to a particular method of handling and wheat stocks must be got out of the storage linked to the dryers before a new crop can be put in.

485. This wheat would probably have had to be moved to the secondary storage, so to speak, and allow the primary storage, with drying equipment annexed, to be used for the incoming crop?—Yes, that is so for the bulk of the crop.

486. Would you be in a position to say —you may well not be in a position— would the removal and transfer of this wheat have been a less expensive operation than the sale at a loss of approximately £600,000 of the 52,000 tons?—The actual—we will say—bagging, moving and re-storing would have been cheaper but that might not necessarily have solved the ultimate problem of disposal.

Quite. That depended in a large degree on the size of the 1958 crop?—I think it is fair to say it would depend almost entirely on the kind of crop we got in 1958.

487. On the other hand, I suppose it could be argued that if the 1958 crop was of normal size the old wheat could have been used up and the surplus of the 1958 crop put into the carry-forward of the next year?—Yes, but it would have to go through the drying plant which would have meant re-storing it or shifting a lot of the old stuff.

488. So, it does boil down to this, I think, (1) it was a question of judgment as to storage capacity and (2) the comparative expense of handling the wheat transferred from one class of storage to another against the cost of disposing of it by export or, say animal feed?—Yes, I think that is the size of it.

489. Deputy Sheldon.—Do I take it that, in fact, what happened because 51,000 or 52,000 tons were sold was that, instead of the anticipated carry-forward of 50,000 tons, in fact, over 100,000 tons was carried forward? Apparently, of the 120,000 tons of real surplus, after providing for 50,000 tons carried forward, 53,000 tons was sold, so that there was in fact another 60,000 odd tons on top of the 50,000 tons?—No, that is not quite what happened, because, in addition to the actual export of wheat, other devices were used to get rid of part of the surplus. 25,690 tons were exported after 31st March but 68,000 tons were sold for animal feed on the home market.

That does not come into this particular year of account?—In my sense, where we are dealing with a surplus of wheat, the actual date in April on which an accounting change took place is not of such significance as the disposal of a crop, so that for us, we do not split it in the same sort of way in which it would be split for accounting purposes.

490. Deputy Lynch.—How much was sold on the home market?—Of the total surplus about which we have been speaking, 68,496 tons.

How much for feed on the home market?—That quantity was sold for feed on the home market.

491. Chairman.—The surplus referred to, 170,000 tons, from which you deduct the normal carry forward of 50,000 tons, leaving an estimated carry forward of 120,000 tons, is all based on an 80 per cent. extraction?—Yes.

I understand, in fact, that the extraction was subsequently reduced to something like 70 per cent.?—It was reduced to 72 per cent. from January, 1958.

That of course would have served to absorb a considerable part of that excess surplus?—It did. It absorbed 20,000 odd tons.

492. I do not know whether this calculation has been made, Mr. Barry, but supposing this wheat had, in fact, been retained in the carry-over, and had found its way into the millers’ grist for flour, would the bulk of this £591,000 have been saved?—I do not know that any calculation of the kind has been made. I do not think it could be made.

Of course we would have avoided the importation of foreign wheat, which in fact has taken its place, would we not? —Yes, but we will assume we were carrying forward 130,000 tons and——

The actual figure is 170,000 tons, 50,000 tons normal carry forward, and 120,000 tons surplus carry forward?—That would be in the normal way and adding to that what was millable from the 1958 harvest, approximately 30,000 tons, would give a total quantity available of about 200,000 tons, that is about eight months usage in the normal admixture and the normal extraction and we would still be working it off, I think.

In that event would there have been a lesser loss than did, in fact, result from the procedure actually adopted which involved a loss of £591,000 approximately? —Yes, the loss would have been lower.

493. Deputy Sheldon.—There is one point which affects this and which arises every year. Has it been possible to come to some definite decision as to what wheat is millable and what is not millable? There seems to be a great deal of confusion about it. Possibly some of the confusion is only in people’s minds but there does seem to have been that matter, that some of these surpluses would not be strictly considered as millable. You are getting the best of everything as really millable?—That seems to be a practical approach to a very thorny problem. If we are to have a standard of millability which is scientific and rigid it is going to be detrimental to the farmers, one year in three or four when there is a bad harvest. When that happens the farmers, in the normal way, will probably exert pressure on the Government to drop the standard because there happens to be a poor crop. There was a good crop in 1955 but if you accepted the same standard in 1956 it would have been quite possible that half of the wheat taken in as millable would never have reached the mills. Therefore, if we had a rigid standard which was adhered to in all circumstances, a lot of wheat might never get to the mills in a poor year and the standards would have to be lowered in about one year in three because we have bad harvests as often as that.

494. Deputy Sheldon.—In regard to the surplus of 170,000 tons I wonder how much of that surplus, of the actual physical wheat, would be regarded as conforming to the strict standards? In other words, how far would the people concerned be influenced by the actual wheat in deciding what to do with it, whether it would be fair to carry it forward? I am wondering what part of the 170,000 tons surplus was the strict standard and how much was not?—I think the easiest and fairest way to look at that is that what was carried forward from the 1956 harvest— 75,000 tons—was certainly not as good as what came from the 1957 harvest. The 1956 grain was not good at all.

Would that wheat be there physically as a surplus at the end of 1957?—It was carried forward from the 1956 cereal year into the 1957 cereal year. It was physically there after September, 1957.

Would any of it be in the 170,000 tons? —75,000 tons.

495. Chairman.—In regard to Deputy Sheldon’s question if there were to be strict standards of millability, would I be right in believing that there has been no rigid standards for the reason that if rigid standards were set up it would be impossible to take the wheat into the mills at all if every sample had to be examined to determine whether it conformed to the rigid standards which were established?—That is so. In a good year there would be no particular trouble, the quality would be good but, in a bad year, every lot of wheat might give rise to the physical job of determining on the spot whether it was going to be regarded as millable. We usually do everything we can to get the maximum amount of wheat taken into the mills as millable.

496. Deputy Lynch.—About how much per ton was made on the wheat which was exported?—We realised a price of between £18. 10/- and £23 a ton f.o.b.

497. And what did we make on the wheat which was sold at home?—It was sold for the period up to May of last year at £26 a ton, carriage paid, and £23 a ton thereafter.

Chairman.—To clarify that, Mr. Barry, I think I should ask you this. When you speak of paying £26 a ton, carriage paid, that was to any station in Ireland in six ton loads?—Yes, to the buyer’s nearest railway station

Of course that would mean, in many cases, a pretty substantial freight charge? —The average charge would come to about 30/-.

498. Deputy Sheldon.—I am still not clear whether the physical 75,000 tons of defective wheat for 1956 was still being carried forward a year later?

Chairman.—I think the point is this. At the end of the 1956 cereal year there were 75,000 tons of wheat carried forward. I think Deputy Sheldon understands you to say that at the end of the next year that same 75,000 tons were still sitting there and were carried forward again. Would I be right in saying that in all probability what happened was that the 75,000 tons passed into consumption but left a corresponding 75,000 tons of the next year’s crop in surplus at the end of the cereal year?—The matter is a bit tangled. Say, in September of 1957, there were 75,000 tons of the 1956 crop of wheat still in the mills. 1956 ended but that wheat was left. The 1957 harvest came in and it added to the surplus.

What Deputy Sheldon is troubled about is this. Are you telling us that the actual 75,000 tons of wheat from the 1956 crop which was sitting in the flour miller’s stores, remained sitting there and did not pass into consumption?—Off the cuff I should say that the millers probably used it to the best advantage as occasion arose.

It filtered into the grist during the ensuing 12 months?—I think so.

Was any of it left?—Some of it was left in stores and was actually exported later.

Have we any idea of how much?—No, we have not.

May we take it that the bulk of that 75,000 tons filtered into the open grist? —Yes, that is correct.

499. Deputy Lynch.—How much per ton does it cost to build a store? If you build a store or a silo which would hold 100,000 tons about how much would that cost? I do not know whether that information is available?

Chairman.—Have we any figure, Mr. Barry, as to what the cost of erecting storage is, measured by storage per ton? —There is a tremendous variation in the type of store and equally in the cost per ton of building storage. We have had figures as low as £6 a ton and as high as £12 a ton.

Deputy Sheldon.—If it was stored in stacks, as it is in some Northern counties, you would save a lot of money.

The witness withdrew.

VOTE 60—OFFICE OF THE MINISTER FOR SOCIAL WELFARE.

Mr. P. J. Keady called and examined.

500. Chairman.—On subhead F., how do you manage to be so accurate?—The estimate is supplied by the Revenue Commissioners and it is always as they say.

501. Chairman.—Mr. Haslam will be glad to hear this tribute to his accuracy. On subhead I., years ago there used to be a long waiting list of people to be examined by the Department doctor to determine whether they were entitled to a blind pension or not. Is the procedure expedited now?—It has been expedited considerably. When the Social Welfare Officer visits the claimant, he gives him a form which he can send to the local surgeon and he can get examined right away. The form then goes, if necessary, to our ophthalmic inspector. As a result, the whole procedure is considerably faster than it used to be.

On the Appropriations in Aid, there is a statement in the notes on page 204 that no cars were sold during the year. What cars are they?—We have a fleet of 12 or 13 which are used by sickness visitors and inspectors of agents throughout the country. The cars which are beyond their job are sold from time to time. We did not sell any last year.

VOTE 61—SOCIAL INSURANCE.

Mr. P. J. Keady further examined.

502. Chairman.—On this vote, there are two paragraphs by the Comptroller and Auditor General. The first is as follows:—

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

92. Payments from this subhead to the Social Insurance Fund in the year under review amounted to £4,487,000. As indicated in previous reports these payments are subject to adjustment when audited accounts of the Fund are available. The accounts of the Fund for the years ended 31 March 1955 and 1956 received for audit indicate that contributions from voted moneys had been overdrawn to the extent of £65,303. A reconciliation statement of the Bank balances relating to benefit payments necessary for the completion of the audit is awaited.”

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

Mr. Ó Cadhla.—I am glad to be able to inform the Committee that I have now received the Fund accounts for the years up to 31st March, 1958. The accounts show that the contributions due from the Exchequer have been underdrawn to the extent of £43,604 as at that date. In regard to the reconciliation of Bank balances, there was a time lag due to change over from the manual to a machine system for the control of the Bank accounts. I have now been furnished with sufficient information to satisfy me of the accuracy of the accounts. Reconciliation of the Bank accounts is at present reasonably up to date.

Chairman.—Have you anything to add to that, Mr. Keady?—No, Sir.

503. The Comptroller and Auditor General, in his comment on this paragraph, refers to the fact that the accounts show that the contributions from voted moneys have been underdrawn to the extent of £43,604 as at 31st March, 1958. What is the exact significance of that? —Well, it is never feasible to draw from the Vote the exact amount applicable to a particular financial year. It is related to the actual income and expenditure of the Fund for that year and the income and expenditure are not exactly known until after the close of the financial year— a matter of, perhaps, four or five weeks— with the result that, coming towards the end of the financial year you do not know whether the Vote is going to be exact or too much or too little. If you draw the full amount, you may draw too much or too little. Sometimes there is an overdraw, sometimes an underdraw. It is a very small amount in relation to the total amount involved in the Fund, which is of the order of about £17,000,000 between income and expenditure.

Deputy Sheldon.—I am sorry to say I am not terribly clear yet about the effect on the Vote. Subhead A. of the Vote itself shows that the expenditure exactly equalled the amount of the voted moneys. Does this underdraw mean that in fact another £40,000 should have been voted? —Yes, that is, in effect, what it means.

504. Chairman.—The next paragraph by the Comptroller and Auditor General reads:—

“Subhead B.—Investment Return

93. As stated in previous reports section 21 of the Social Welfare Act, 1950 as amended by section 68 (5) (e) and (f) of the Social Welfare Act, 1952, authorises payments from the Social Insurance Fund in respect of expenditure by the Minister for Social Welfare on the acquisition of lands, premises, furniture or equipment, and the construction or reconstruction of premises. It also provides that an investment return in the form of contributions to the Fund shall be made in respect of such payments at rates to be agreed upon from time to time between the Minister for Social Welfare and the Minister for Finance. The expenditure under this section up to 31 March 1958 was £1,295,137 all of which related to the construction and equipment of the premises known as Áras Mhic Dhiarmada. A portion of these premises is occupied by Córas Iompair Éireann but agreement has not been reached as to the annual rent. In these circumstances £15,000 has been adopted as a provisional rent for the purpose of arriving at the contribution payable to the Fund out of voted moneys and the charge of £39,655 to this subhead has been computed as follows:—

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

Mr. Ó Cadhla.—There is little to add to the information contained in this paragraph. The Exchequer contribution is based on the average yield of the Fund’s securities each year—hence the adjustment mentioned. The rate of contribution cannot be determined until after the end of the financial year. For the years 1956-57 and 1957-58 it was fixed at 4¾ per cent. Agreement has not yet been reached with Córas Iompair Éireann on the question of the rent payable for the portion of the premises occupied by that Company.

505. Chairman.—Have you any information, Mr. Keady, to give us on the question of the rent?—Formal agreement as to the amount of the rent cannot be arrived at, until the terms of the lease have been settled. The terms of the lease have not yet been settled and continue to be the subject of negotiations, tripartite negotiations, between ourselves, Córas Iompair Éireann and the Office of Public Works. In actual fact, so far as the financial position is concerned, the position is not unsatisfactory, because we actually received from Córas Iompair Éireann sums totaling £76,500. Therefore, to that extent, the Fund is not losing money. The delays which have occurred so far are due to differences of opinion as to the allocation of the cost of common services—air conditioning, plant for the sprinkler system for fire protection, the supply of hot water, fuel, lighting and so on. The actual apportionment of the cost of these has been a difficult technical matter, involving examination by Office of Public Work’s Engineers and subsequent haggling with Córas Iompair Éireann as to the proportion to fall on either side. That has not yet been resolved, but I hope it will be resolved quite soon.

Deputy Sheldon.—I suppose that, as far as we are concerned, it is a matter of the swings and the roundabouts.

Chairman.—I think you will agree that it would be desirable to have the question settled finally?—I agree.

VOTE 62—SOCIAL ASSISTANCE.

Mr. P. J. Keady further examined.

506. Chairman.—There are four paragraphs by the Comptroller and Auditor General on this Vote. The first paragraph reads as follows:—

“Subhead B.—Children’s Allowances

94. The rates of allowances payable under the Social Welfare (Children’s Allowances) Acts, 1944 to 1952, were increased from May 1957 by the Social Welfare (Children’s Allowances) Act, 1957 and effect was given to this revision by the distribution of amending slips for affixation to the orders in allowance books already issued. These slips were prepared from the information available in the schedules which contained particulars of the then current allowance books. These schedules did not reflect revision of rates made after the books had been issued. I am informed that apart from the cost, which would have been substantial, it would have been impossible in the time available to prepare fresh schedules from the 228,000 claim files, and that the over-payments resulting from the use of the latest existing schedules were estimated not to exceed £1,000.

Arising out of an overpayment discovered in the course of audit, I inquired whether a departmental check had been applied to the revised payments. I am informed that a check carried out by the Department revealed 172 overpayments of which 106, amounting to £470, were attributed to revisions not being reflected in the schedules used, and 66, amounting to £227, were due to the issue of slips of a higher value than appropriate. I am also informed that the work of determining the rate of and issuing the amending slips was carried out on overtime by a large staff many of whom were not normally engaged on children’s allowances.”

Have you anything to add to paragraph 94, Mr. Ó Cadhla?

Mr. Ó Cadhla.—The schedules used for the issue of the amending slips had been prepared from two to twelve months previously. The increases were announced in the course of the Minister’s Budget speech on the 8th May, 1957 and it was aimed to make the first payment of the increased allowances on 2nd July, 1957. Inexperienced staff were employed on overtime for the purpose. The net over-payments, as ascertained by Departmental check, were attributed partly to errors and partly to the ‘stale’ payment schedules used. I understand that recovery is being effected in all cases.

Chairman.—Have you anything to add to that, Mr. Keady?—Nothing, Sir.

Has recovery, in fact, been effected?— Recovery of the amount overpaid has been effected in 171 out of the 172 cases.

507. Chairman.—The average, Mr. Keady, is reasonably satisfactory. The next paragraph reads as follows:—

“Subhead G.—Welfare of the Blind

95. A Board for the employment of the blind was set up by the Minister for Social Welfare in April 1957 to acquire and equip a workshop with a view to providing employment for blind workers from any part of the country. A contribution of £15,000 was paid to the Board towards its working capital expenses.”

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

Mr. Ó Cadhla.—No. That paragraph is merely informative.

508. Chairman.—The next paragraph reads as follows:—

“Overpayments

96. As shown in the details of the appropriations in aid recoveries in cash of overpayments of assistance made in prior years amounted to £7,317. £3,574 was recovered by withholding current payments and unrecovered balances amounting to £2,836 were treated as irrecoverable with the approval of the Department of Finance. The total amount of overpayments outstanding at 31 March 1958 was £31,900. During the year forty-eight individuals were prosecuted for irregularly obtaining social assistance and convictions were secured in forty-three cases.”

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

509. Chairman.—Would you tell us, Mr. Keady, if you know, how this £15,000— which is a contribution to the Board— to acquire and equip a workshop for blind workers from any part of the country— was spent?—Portion of it was spent in meeting the deficit which occurred. First of all, in the initial expenses of setting up the Board, they had to acquire premises, and so on, and they had to meet expenses of administration while they were getting the main work of the Board in train. I have no actual details of the expenditure.

Chairman.—Are they succeeding in providing employment for many blind people?—They have taken over the workers from the Richmond and from St. Joseph’s and I understand they have got a manager. They have premises in Baggot Street and they are carrying on, in an improved way, the sort of activities that the Richmond itself had been carrying on, with some success.

510. Chairman.—Paragraph 97 of the Comptroller and Auditor General’s Report is as follows:—

“97. In the course of a test examination of old age pensions twenty cases were noted in which overpayments varying from £112 to £467 had been outstanding for periods of from two to ten years. I am informed that it is proposed to seek the authority of the Department of Finance to write off the outstanding balances, totalling £1,813 in seven of these and that in twelve others involving £3,240 efforts to effect recovery are continuing. In the remaining case £228 has been written off in this account. I understand that under a revised procedure a regular review will be carried out of cases in which no recovery has been effected during the preceding year.”

Mr. Ó Cadhla.—The limited test examination carried out on old age pensions overpayments disclosed that there had been delays in following up the overpayments and bringing cases to a conclusion. As indicated in my note a revised procedure has been put into operation to ensure more regular reviews in future.

Chairman.—Are you satisfied, Mr. Ó Cadhla, that, in view of the revised procedure, delays attracting your attention are unlikely to occur?

Mr. Ó Cadhla.—I think so.

511. Chairman.—In regard to subhead E. of the Vote, is there any standard meal prescribed under the Education (Provision of Meals) Acts referred to?—There is no meal prescribed but, in general, they conform to a pretty common pattern— milk or cocoa with buns, bread and butter, jam. In a few cases, in convent schools, they get hot soup or stew of some sort.

512. In regard to subhead H., what exactly are the provisions in this scheme for the supply of fuel for necessitous families?—It applies to old age pensioners and blind pensioners and persons in receipt of widows’ and orphans’ pensions. They constitute one group and they receive one cwt. of turf at a cost of 6d. Persons in receipt of unemployment assistance who have dependants are also entitled to one cwt. of turf but they have to contribute 1/-. Then the local authorities also include persons on low incomes who do not come within those two categories and they receive one cwt. of turf for a contribution of 2/-.

And this is administered by the local authorities?—It is administered by the local authorities.

513. Is it mainly operative in the cities?—Yes, the urban areas, the non-turf areas, mostly on the eastern seaboard.

Does it apply in any rural areas?—It does not apply in any rural area, no.

Only urban areas?—Sixteen cities and towns.

514. Deputy Cunningham.—On subhead F., is this also administered by the local authority?

Chairman.—Grants under the School Meals (Gaeltacht) Acts?—Yes, it is administered by the local authority through the schools in the Gaeltacht areas.

515. Deputy Cunningham.—Is there any check at all by the Department as to the method of operating the school meals scheme? Do the Department just provide the money and have no further check on the method of provision?—We do inspect from time to time and, I think it was a couple of years ago, we had a special examination of the administration of this particular scheme in the Gaeltacht area and made certain suggestions as to improvement to the local authorities. I understand these improvements have been effected in many cases.

Has it been found that in all cases the provision of meals is a regular daily occurrence? I believe that in some cases the provision of meals is not a regular daily occurrence, that the amount of bread, say, and other materials available is divided at the end of the week or twice a week, or something like that?—I have a recollection that there was a case in the West where, owing to the difficulty of milk deliveries in the area, they were unable to serve meals on every day of the week. What the present position in that case is I am not aware. I know that we took steps and made suggestions to secure that they would have meals every day.

516. Deputy Jones.—In regard to subhead H., is the supply of fuel confined to a certain time of the year and is there a limit to the amount a recipient may get?—It operates from November to March and there is a limit in the sense that each recipient is limited to one cwt. a week.

517. Chairman.—I am a little troubled, Mr. Keady, about the situation under subhead F. Is it not clearly the intention of the scheme that a daily meal should be supplied?—It is the intention.

May we take it that your supervisory function would result in the Department checking any area where the meal was provided only two or three days a week? —We would regard a scheme as being ineffective if they did not succeed in supplying a meal every day and, if difficulties arise about that, it is part of our job, with the local authority, to see that the difficulty is overcome.

So that we may take it that if any case has arisen in which a meal has not been provided every day steps are ultimately taken, in consultation with you, to put an end to that situation? —Yes.

And if any case of that kind arises, it would be the duty of any public-spirited citizen to direct your attention to that fact so that appropriate measures might be taken?—Quite.

518. Deputy Brennan.—I should like to know what supervision is exercised over the purchase or sanction of the type of boots to be purchased, knowing that there are numerous complaints in regard to quality, which leads at times to vouchers being irregularly or improperly used. The voucher is frequently exchanged with a little cash for a better type of boot which, I often think, is attributable to the fact that the quality sanctioned under the scheme is not up to the standard?—The question of the quality of the footwear is discussed between officials of the Department and the manufacturers each year. We meet them each year on the question of sizes and stocks and quality and we arrive at an agreement on price on that basis. The actual testing of that is left to the local authorities as well as our own inspectors. We have inspectors of our own who have the power to see that this scheme is being properly administered. If complaints arise as to poor quality we can take them up, if we receive these complaints, with the local authorities or our inspectors.

519. Deputy Cunningham. — Donegal County Council did, I think, bring this matter up with the Department because there were complaints, first of all, that the footwear was of very inferior quality and secondly, that being one of the reasons, boot and shoe merchants were not willing to stock footwear of that type and holders of vouchers found it difficult, even if the footwear was bad, to get it and had to travel some distance to a shop that stocked it. When they used the vouchers to purchase other footwear of a better quality with a cash payment, they were penalised. At least, the shopkeepers who supplied them were penalised. Has that matter been gone into?—That is on the quality?

Quality and availability?—As regards quality, perhaps I should have added, in reply to Deputy Brennan, that if a complaint is made to us about quality we take it up with the manufacturers and we have found that they are willing to replace the defective article. As to availability, I have no reason to believe that they are not generally available throughout the country but, there again, if we do get any representation in the matter, we can easily take steps to have it rectified. I have not heard complaints of that kind.

Deputy Sheldon.—I do not want to blow my own trumpet but I may direct Mr. Keady’s attention to a lengthy memorandum that I put into his Department some years ago. The whole scheme, in my opinion, is cock-eyed and just will not work really effectively to give a proper supply throughout the country.

Chairman.—I think I am obliged to intervene at this stage and to say that the Accounting Officer is here to reply to questions arising out of the Appropriation Accounts for 1957-58 and I do not think we may fairly ask him to advert to a memorandum several years old.

Deputy Sheldon.—I would ask him just to have a look at it and then they will know the answer to give to Deputy Cunningham.

Chairman. — Your attention, Mr. Keady, is directed to a memorandum which was furnished to your Department. When was it furnished, Deputy Sheldon?

Deputy Sheldon.—It must be seven or eight years ago.

Chairman.—If that memorandum is still extant, Mr. Keady, Deputy Sheldon would be grateful if you would look at it?—I certainly shall.

Deputy Cunningham.—There is another from the Donegal County Council on the same lines.

Chairman.—When was it submitted?

Deputy Cunningham.—Last year.

520. Chairman.—Last year there was a memorandum from the Donegal County Council on the same matter. What can you do, Mr. Keady, if you receive a complaint that there is no shop, say in a town like Ballybofey or Kilcar, stocking these goods?—Obviously we cannot compel them to stock these boots but we can approach them, or get the local authority to approach them, and try to induce them to do so. If they will not stock them I do not see that we can do anything about it. I do not think it would be open to the Department to set up shop.

The best you could do then would be to say that there is a shop in Letterkenny, or in whatever is the nearest town adjoining the particular place, where the boots are available?—Quite so.

Mr. Sheldon.—The scheme could be revised. I think they should be available.

Chairman.—That is a matter we should raise on the Minister’s Estimate in the Dáil.

Deputy Lynch.—We will all have a try at it.

The witness withdrew.

VOTE 49—ROINN NA GAELTACHTA.

Mr. Seán Ó Braonáin called and examined.

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

“58. Accounts of the trading operations of the Department for the year ended 31 March 1956 have been submitted to me for audit. I am not in a position to certify them until certain matters relating to the closing stocks have been finally agreed. I have not received the accounts for the years 1956-57 and 1957-58.”

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

522. Chairman.—On the last occasion, we discussed certain discrepancies with Mr. Ó Braonáin and I think I am right in saying that your office undertook with the Department, a very careful investigation of the trading figures for rural industries?

Mr. Ó Cadhla.—Quite so.

Chairman.—Have you any information to give us as to the result of that investigation?

Mr. Ó Cadhla.—I may mention that throughout the whole field of what I might term State owned stores, and that field is very extensive, only in three or four cases is it necessary to assess the total value of the stocks on hand at the end of each accounting period for the purpose of showing the financial results of trading—the Department of Posts and Telegraphs publish commercial accounts annually, also the Stationery Office Sale Office and Gaeltacht Services. Others are the Management Account of Collinstown Airport and the Catering Services at Shannon Airport. In regard to the Gaeltacht Services, when dealing with the Appropriation Accounts for the year 1955-56, I informed the Committee that I had not been furnished with the results of stocktaking of tweed at Dublin, knitwear at Tourmakeady and lace at Bruckless and Cliffoney. The position at that time was that no record of the “movements” of the stocks of tweed received at the Dublin Depot existed, and the records of knitwear were suspended in 1956. This matter was set right in October, 1957, when a complete system of records was introduced. The Accounting Officer furnished to the Committee a statement regarding the position of tweed at the Dublin Depot as at 31st March, 1956. This statement showed a surplus of 30,000 yds. of tweed on the year’s transactions. At a later meeting of the Committee the Accounting Officer gave certain information regarding the position of knitwear at Tourmakeady and lace at Bruckless and Cliffoney. The Committee did not accept the Accounting Officer’s explanation of the surplus and, in its report on the accounts for 1955-56, stated that it felt that little reliance could be placed on the figures supplied to it regarding tweed in Dublin. In my report on the accounts for 1956-57 I referred to irregularities in the adjustment of the records of knitwear yarns and the control over these stores at the Dublin Depot. When this report was being considered by the Committee the Accounting Officer explained that the storekeeper had, without authority, adjusted the records of yarns to clear discrepancies which he had discovered in his stocks and that investigation of the discrepancies had disclosed that they were mainly due to clerical errors. In view of these complaints the Committee expressed the view that a full report, following a complete survey of the accounting records of all stores in the custody of the Gaeltacht Department, was necessary before it could reach a final opinion on the matters at issue. The survey was carried out during the period from May, 1958 to August, 1958. The compilation of the figures was carried out by Departmental staff and a check was applied by my officers to ensure that all the relevant documents were taken into account and to verify the accuracy of the figures. It involved visits to Tourmakeady, Cliffoney, Bruckless, Crolly, Kilcar and Ellybay. The stocks were dealt with under four main heads—tweed, knitwear, linen embroidery and toys. The position regarding raw materials was not surveyed by my officers as some of the essential records were not available. In regard to tweed it was decided that the best method of dealing with this industry was to establish what stocks were held on the 1st April, 1955, both in Dublin and Kilcar, to ascertain the total production and sales in the three years to 31st March, 1958, and to reconcile with stocks held at the latter date. 18,000 pieces were produced in the three-year period and more than 20,000 invoices were examined. The accounting officer’s report sets out the result—a deficiency of 22,800 yds. It might be as well to deal with this matter first.

523. Chairman.—The Comptroller and Auditor General speaks of a deficiency of 22,800 yds. of tweed. What comment do you care to make on that, Mr. Ó Braonáin?—We can account for the deficiency inasmuch as the records did not include the use of tweeds for patterns. Quite a considerable amount was used in that way every year as it is a trading custom to supply patterns in all markets in which business is done. I might mention that a pattern is not merely a small piece of tweed such as you get in a retail shop. In some cases the patterns issued to wholesalers and clothing manufacturers consisted of pieces of tweed between 12” and 14” in length across the whole width of the piece. Many of the patterns were as big as that. Furthermore there is the factor that in every piece of cloth sold, not alone in the case of Gaeltarra Éireann, but throughout the trade generally, about a yard is left surplus with the piece in order to make up for fraying and making up patterns. I referred to these matters in my report to the Committee as follows:—

“The Reconciliation Account submitted herewith shows a gross deficiency of 22,823 yards but—”

Deputy Lynch.—From what part of your Report are you reading?

Mr. Ó Braonáin.—I am reading from the paragraph commencing at the foot of page 2.* The Report goes on—

“—but it is to be noted that, on the sales side of the account, no allowance has been made for the normal trade practice of allowing to all customers at least one yard per full piece (averaging 73 yds. finished) when invoicing sales. A total of 18,278 pieces were sold during the three-year period and on each of these at least one yard was allowed to the customer in invoicing the length. The total of 18,278 yds. should accordingly be offset against the deficiency. Furthermore it is to be pointed out that patterns which are cut from tweeds produced at Kilcar and for which no credit has been claimed in the Account were issued in considerable volume to agents and customers. Patterns varied in size from 9″ × 5″ to a quarter yard of the full width of a piece.”

I am quite satisfied that those two factors accounted for the deficiency.

524. Deputy Lynch.—Were no records kept of the amount drawn from the stocks and issued as patterns?—No. Patterns were made up and sent out in bundles to the different agents.

That would not indicate that there was really tight accounting?—I do not think it is the practice anywhere and it was never done in Gaeltarra Éireann.

525. Chairman. — Assuming, Mr. Ó Braonáin, that the Committee accepts that in the normal trade there is a yard attached to each piece delivered, that substantially reduces the gross deficiency to something in the order of 4,000 yards? —Yes.

And you attribute the bulk of that to the provision of patterns for the wholesale and retail trade?—Yes. I have discussed this matter very closely with the people concerned. I took particular interest in that point, namely, whether the patterns could absorb such a quantity of tweed and they satisfied me that they could without doubt.

526. Deputy Cunningham.—What was the largest length issued by way of pattern?—The biggest length would be what I mentioned. Patterns vary in size from a few inches to cuttings 12-18 inches of the full width of the piece.

527. Deputy Lynch.—Could tweed go to a customer without being invoiced?—I do not think so. Not on a sale. The patterns would not be invoiced.

There could be a whole lot of tweed taken as patterns out of the stores and sent without invoices?—I could not see that happening. I do not see what use tweed would be to a customer if it were cut up into small pieces.

Deputy Lynch.—If it had happened? I am only surmising that it must have happened, when there was a shortage of over 22,000 yards.

Chairman.—I think you are overlooking, Deputy, in regard to that shortage, that he was suggesting that no less than 18,000 yards is accounted for by a recognised trade practice of invoicing, say a piece of 72 yards, where the actual measurement was 73 yards, so that a customer would be indemnified against any selvedge or ravelling at each end of the piece. The other counter deficit is in the order of 4,000 yards and Mr. Ó Braonáin attributes that to the preparation of patterns.

528. Deputy Booth. — Assuming that that is the explanation and even assuming that the average pattern, as Mr. Ó Braonáin says, takes a maximum of a quarter yard, that would mean 16,000 patterns at the very least; whereas in actual fact, Mr. Ó Braonáin says that some of the patterns were small enough. That brings it up possibly to 18,000 or 20,000 patterns. Is there that variety of patterns or is there that enormous demand for them? It seems to me an enormous figure—unless this is a cumulative figure over a very long period.

Deputy Cunningham.—It is a three year period.

Chairman.—Is this deficit of 4,000 yards, attributable mainly to patterns, covering a period of three years?—Yes, three years.

That reduces the annual consumption pattern, should we say, from 18,000 patterns to 6,000 patterns a year, which is not extravagant.

Deputy Booth.—No.

529. Deputy Cunningham.—It is usual for tweed companies and other cloth manufacturing companies to send out pieces by way of pattern which are large enough to make, say, a lady’s costume or a gent’s sports jacket. Was that done in the case of Kilcar?—I am sorry, but I do not understand the Deputy’s point.

Some cloth manufacturing firms send out pieces of cloth as a sample, the piece being large enough, say six or seven yards, to make a garment, say a lady’s costume or a gent’s jacket?—Yes, but they would not be sent as patterns or samples. They would be a sale. We did that business, which is a specialised business here in Dublin. Small pieces of special tweed are actually made to order. Whether that is good business or not is another matter, but it has been done. Gaeltarra Éireann keeps a tremendous variety of stock. Taking into account the weight, weave, colouring, texture and so on, they have between 2,000 and 3,000 different varieties.

530. Deputy Jones.—Might I ask if this practice with regard to patterns is a normal practice in regard to Gaeltarra tweed products, that the representative of the wholesalers who would be buying this tweed would not come and see these products at a centre rather than be supplied with individual patterns?—That has happened in the case of traders in Dublin. They come and look at the shelves to see what we have and they give a certain order, but that is not the normal type of business—the normal business is done through selling agents at home and abroad.

Might I take it that the selling agents leave with the wholesalers, then, such a selection of patterns as is mentioned?— They may leave them with them—I think they do—and they carry a large quantity themselves. They deal with retailers and wholesalers. It is not confined to wholesalers.

Might I ask, further, would they take the patterns round and show them or leave the patterns with the wholesalers?— I could not answer that question definitely.

Deputy Brennan. — Many of the patterns in question go abroad, to places as far apart as Germany, France, America and Canada. I know the practice of the private firms working in Donegal is quite a different business to that of the civil service system where they have to account for every square inch of cloth. That is not done in their case and where the agents are abroad, they are generous with them in the matter of issuing patterns. They have to be.

Chairman.—I think I should direct the attention of the Committee to the fact that it is past events with which we are now concerned. We are not concerned with suggesting a superior practice for the future, because all this business has been transferred from the Department of the Gaeltacht to the new Board, who are hereafter responsible. I am bound to say that my experience corresponds exactly with Mr. Ó Braonáin’s observation, that there would ordinarily be a yard allowed in a piece of cloth and that that is, in fact, a conservative estimate of the allowance on a 72-yard piece. That reduces this deficit to 4,000 yards and, so far as I know, that would not be at all an unreasonable allowance for cutting patterns, where a manufacturing concern is dealing with the wholesale trade, the retail trade and the making up trade and with an effort, successful in varying degrees, to promote a foreign trade, where agents have to be treated on a very liberal basis in order to provide every facility for someone who is trying to break into a new foreign market.

531. Deputy Lynch.—Are the staffs recruited through the civil service? Are they whole time staff or part time staff in the stores?—The present staff?

Yes?—The Board is recruiting its own staff. There are a few civil servants still on the staff of the Board, as a temporary arrangement.

At that time, were they part time?— No, whole time. They were civil servants of varying grades, right down to warehousemen, packer-porters, etc. They were classified as civil servants because they were established.

Were they full time or part time?— Full time.

532. Chairman.—Gentlemen, we might turn now to the Comptroller and Auditor General’s reference to knitwear.

Mr. Ó Cadhla.—Most of the knitwear production is channelled through Tourmakeady. The various pieces making up a garment are knitted in centres around Tourmakeady, assembled and viewed at Tourmakeady and then dispatched to Dublin. Complete garments knitted and assembled at Falcarragh, Roundstone and other smaller centres are sent direct of Dublin. Seventy-five per cent. of total production comes through Tourmakeady. The same procedure, as in the case of tweed, was followed to ascertain the final stock position. The production figures were obtained from the consignment notes dispatching the goods from the production centres. These documents contain the basic information regarding production. They serve a dual purpose. In all, 6,000 consignment notes and 12,000 sales invoices were examined. The result is as set out in Accounting Officer’s report—a surplus of 30 dozen articles.*

Chairman.—The Members of the Committee will find Mr. Ó Braonáin’s comment on that paragraph, from the middle of page three of his report to the first paragraph on page four. Are you satisfied, Mr. Ó Cadhla, in connection with this matter of knitwear, that this is a normal and reasonable out-turn in all the circumstances?

Mr. Ó Cadhla.—In all the circumstances and as a result of the information I have obtained from my officers, I think so.

533. Chairman.—I should like to put one question before leaving finally the question of the tweeds. In the light of the Accounting Officer’s explanation set out in his report, do you accept the view, allowing for the trade concession of a yard in the finished piece, and the issuance of patterns, in all the circumstances of the trade, that the out-turn in respect of tweed is reasonably satisfactory?

Mr. Ó Cadhla.—Yes; and if the Committee accepts the explanation it goes a long way towards accounting for the deficiency.

Chairman.—Is there any question, then, to the Accounting Officer on the matter of knitwear?

534. Deputy Lynch.—We have the accounts apparently checked for two years in this case and they were checked for three years in the case of tweeds.*

Mr. Ó Cadhla.—I found that the closing stocks taken at the end of 1954-55, that is, on the 31st March, 1955, were not reliable. Therefore, we considered that the tweed should be accounted for over the three year period. That was not so with regard to knitwear. We were quite satisfied with the figures for 1955-56.

Deputy Lynch.—In what way was the system adopted not reliable?

Chairman.—Deputy Lynch, perhaps, has not grasped what the Comptroller and Auditor General said. He said that, in respect of tweed, he found the records at the end of 1955-56 unsatisfactory. You remember that it was at that time that the storekeeper was found altering his records.

Mr. Ó Cadhla.—No, we are dealing with tweeds.

535. Chairman.—Three years were done on the tweed stock. Deputy Lynch points out there is only two years done on the knitwear.

Mr. Ó Cadhla.—That is right. In the case of knitwear yarn we accepted the figures until, in the case of one year, 1956-57, we found that the storekeeper had been interfering with the records.

Chairman.—In respect of tweed?

Mr. Ó Cadhla.—No, in respect of knitwear yarn.

Deputy Lynch.—The storekeeper was interfering with the records?

Mr. Ó Cadhla.—He found discrepancies in his record and amended the figures to agree with the actual stock he held.

Chairman.—That is the reason why all this investigation was started, Deputy.

Deputy Brennan.—We had that discussion last year.

Chairman.—When the new storeman took over, I think he found the physical stock did not agree with the records and he adjusted one to correspond with the other.

Mr. Ó Cadhla.—In regard to tweeds, there were no records. While the actual lists, showing actual physical stocks—that is, the value of the stocks for the purposes of the Annual Trading Account—were quite correct, I could not get sufficient information to satisfy me that the stock which was in store at that date, the 31st March, was the stock which should be there, because there were no records kept of the movement of stocks.

Deputy Lynch.—No records held of the movements of stocks?

Mr. Ó Cadhla.—Receipts and issues.

Deputy Lynch.—That, of course, would be the storekeeper’s business, what would be issued from the store and taken into the store?

Mr. Ó Cadhla.—Yes.

Deputy Lynch.—They had no record?

Mr. Ó Cadhla.—They had a record—at a particular stage, but apparently the Department’s business increased in the early 1940’s and the system which was in operation, say from 1935 onwards, when the business was very small, was not adjusted to meet the strain put on it in the early 1940’s.

Chairman.—I think, Deputy, you will find that this matter was discusseed very fully the last time Mr. Ó Braonáin was before us, in respect of last year’s Appropriation Accounts. It was arising out of that discussion that this investigation was set on foot.

Deputy Lynch.—Very well.

536. Chairman.—If there is no other question on the knitwear, we will now examine that part of the Comptroller and Auditor General’s statement which refers to linen, lace and embroidered goods.

Mr. Ó Cadhla.—This industry is carried on at Bruckless, Co. Donegal and Cliffoney, Co. Sligo. Sales are effected both from the Dublin Depôt and the production centres. No production records were maintained at the centres before April 1958 and production figures were ascertained from works orders, of which 25,000 were examined. The results are set out in the Accounting Officer’s report.

Chairman.—Deputies will find the Accounting Officer’s comment on that at page 4 of his report. His comment states, in its final paragraph:

“The Store Reconciliation Account discloses a deficiency of 140 dozen articles which could be due to the method of ascertaining the figures in the Account.”

In the previous paragraph the Accounting Officer states:

“Some uncertainty existed in ascertaining the number of individual articles produced and sold since the number of articles in the same kind of set was not constant because of variations in customers’ requirements. In cases of doubt it was assumed that a standard set (fixed number of articles) was involved.”

There does appear to be a formidable discrepancy here, Mr. Ó Braonáin?—Yes; relatively it is bigger than in the other cases but I would attribute that to the uncertainty just referred to. The Comptroller and Auditor General has mentioned that the only way we could ascertain production figures was to examine the carbon copies of the work dockets, that is, the dockets issued to the workers. I may say that all these workers are outdoor. There are, of course, workers at the finishing centres but the articles are produced by outdoor workers. These dockets were all examined individually. We found in some cases that it could not be stated definitely because of the faint carbon imprint whether the job was a complete set or a set with a lesser number of articles. Sets are made up of varying numbers of articles. It was assumed in those indistinct cases that a full set had been produced and in that way we ran the risk of a deficiency.

It is clear, however, in connection with this matter that there is an element of ambiguity remaining?—Yes, I admit that, because of the uncertainty mentioned.

537. Deputy Jones.—What would be the maximum number of pieces and the minimum numbers of pieces in a set?— There are individual sets. There would be table sets, full dinner sets, which might run into 15 pieces. Thirteen pieces is, I think, the usual number in a dinner set— doyleys and that sort of thing.

Chairman.—Some of the sets would be substantially less than 13, would they not?—Yes, substantially less.

Deputy Jones.—What number was taken as being a full set?

Chairman.—Thirteen pieces.

Deputy Booth.—With that number of pieces of, say, a dinner set, you would be dealing in various sizes, would you not, so that it is quite impossible ever to get an accurate record. If you are going to bring it down to the total amount of work done, presumably there would be big table mats and small mats, and so on, so that we are really asking for the impossible.

538. Chairman.—I think the only fact that here emerges is that there does remain a certain ambiguity in regard to this deficiency of 140 dozen articles and nobody really knows with certainty what the deficiency, measured in terms of individual articles, really is?—That is right.

539. Deputy Sheldon.—Perhaps it is somewhere else but I do not see the figure. How many dozen would be produced in the period?—You will find that, Deputy, in the Reconciliation Statement at the back.

Twelve thousand dozen?—Those were sales. On the other side you will find production.

Yes, 14,000 dozen?—14,406 dozen.

Deputy Sheldon.—I was just looking for the percentage.

Deputy Brennan.—It may not be strictly relevant, but the main centre concerned in that production is just a couple of miles from where I live and I know the working of it pretty well. It is an old centre, established by a lady back in the Congested Districts Board days, and I do not think that anyone who was familiar with the working of it would ever attribute anything irregular to it. I refer to the Bruckless centre. It has a unique reputation that it has always been pretty well run. It was organised under the Congested Districts Board and was one of the few in Ireland that survived so long.

Chairman.—Not in any way giving a short answer, Deputy, most of us are familiar with the history of sprigging and the difficulties are substantial. Nevertheless, we have the disagreeable duty as a Committee of Public Accounts to query everybody’s bona fides. That is our function.

Deputy Lynch.—And it looks as if we were perfectly justified. The way in which they kept their accounts does not show that they were running the place too well. It may have been all right in the Congested Districts Board days when it would have been more or less benevolently run but now, when there is a whole lot of the taxpayers’ money pouring into this business, there should have been better accounting.

540. Chairman.—It is relevant to observe that in the last year that fact was adverted to and reformed accounting systems were introduced and ultimately the decision was taken that the whole business should be transferred to a Board equipped to deal with it on the ground that it was outside the resources of the Civil Service adequately to control a business which had grown to these dimensions. Is not that so?—Yes, that is the position.

541. Chairman.—The Comptroller and Auditor General has comments to make in respect of toys.

Mr. Ó Cadhla.—The production from this industry consists of toys, pram rugs, shopping bags and dolls’ cots. The toys are divided into two sections: animals, that is, soft stuffed toys, made mainly at Ellybay, County Mayo; dolls—soft plastic dolls made and dressed at Crolly, County Donegal, and hard plastic dolls—bodies made at Spiddal, County Galway, and finished and dressed at Crolly. The pramrugs are made at both Ellybay and Crolly. Shopping bags and dolls’ cots are made at Ellybay. Sales are effected through the Dublin Depot but consignments to customers are made direct from the factories in Mayo and Donegal, only samples are held in Dublin. Again, the same procedure was followed as in the case of tweed, production figures being obtained from the production records at the factories in Ellybay and Crolly, and the total sales from the sales invoices, of which there are about 10,000. The results are shown in the Accounting Officer’s report.

542. Chairman.—Deputies will find the Accounting Officer’s comment on this at the end of page 4 and the beginning of page 5 down to the sub-heading “Raw Materials”. Your comment, Mr. Ó Braonáin, states that the sum of all the invoices issued for job lots amounts to £289 16s. 9d. There is, however, according to the Store Reconciliation Account a deficiency of 102 dozen toys, 9 dozen pram rugs and 64 dozen shopping bags, amounting, in all, to a deficiency of 175 dozen articles. You account for this by saying that they were probably disposed of in job lots but the total amount of the invoices for job lots comes to £289 16s. 9d. Are you satisfied that that would account for the bulk of these deficiencies?—Not in its entirety. I say, Mr. Chairman, “this deficiency can, in part, be explained as follows,” and then I proceed to refer to this job lots business.

Yes?—That is as far as we can go.

543. There is no explanation for the difference between £289 16s. 9d. and the 102 dozen toys, the 9 dozen pram rugs and the 64 dozen shopping bags, coming to 175 dozen articles?—I noticed that point when I was putting this report together and here again I made special inquiries. I discussed this aspect of the business with the officials. The first thing to be pointed out is that those job lots were very cheap goods. £289 worth could cover quite a lot of goods. They were goods that had gone out of fashion or that might have become in some way shop soiled or goods that were not moving and we made a job lot sale of quite a quantity at a time to get rid of them. There was no possibility of selling them as a business proposition. I did feel that that could account for a considerable amount. It satisfied me that there was nothing seriously wrong in that deficiency. That is the way I put it.

Chairman. — Was your attention directed to that difference between the total of 175 dozen articles in deficiency and the sum of £289 16s. 9d. realised for job lot sales, Mr. Ó Cadhla?

Mr. Ó Cadhla.—No, I am afraid I did not examine that aspect of the matter.

544. Deputy Lynch.—There were, in all, 22 invoices representing a total value of £289 16s. 9d. Were they to different people?—Different people, yes. Well, one person may have got two job lots at different times but you can take it that they were sold to various people.

Chairman.—Do they set out the quantities on each invoice?—No. that is the difficulty—“a job lot”.

That does not seem to be a very satisfactory method of invoicing a job lot? —I agree. That observation was made by me also when I saw the invoices.

545. Deputy Lynch.—Could it have been possible that one person could have got the bulk of these job lots? Was there any record to show that?—We could assure you on that point by looking back over the invoices but my recollection is that they were sold to various people, that there was no question of one person coming in and getting the lot or getting half the lot but I think I do recollect one person did make more than one purchase. I do not say that 22 invoices were 22 people. There may be 15 people involved.

Chairman.—There were only 22 invoices, Mr. Ó Braonáin. Would it be convenient for you to let us know as soon as possible how many such invoices were made to individuals?—Yes.*

546. In fact, how many consignees were there in respect of these 22 invoices?— Yes, we have the invoices.

And I take it that we are agreed that the form of invoice setting out a job lot without enumerating the articles at least was not a very satisfactory procedure. May I take it that we have your agreement on that, Mr. Ó Braonáin?—Yes. That was the impression I formed when I saw the invoices and I asked could we not have full particulars and I was told that they were not available, that that was the only information available.

I should like you to let us have the amount of each of these separately?— Yes.

547. Deputy Sheldon.—Do the invoices disclose which of these “toys, pram rugs, and shopping bags” were concerned?—I think that would be shown. The Accountant has some doubts but we will go into that in the Note which we will send you.

548. Deputy Lynch.—I should like to know if the storekeeper or any member of the storekeeper’s staff was engaged on part-time work, or has any connections with any other firms? Is there any way of finding that out?—One case was mentioned to me of a storeroom man who was temporarily employed on overtime, that would be after his normal day, with a firm called Dooley and Burton, in preparing orders for despatch. That was the only case I ever heard of amongst storekeepers.

549. Chairman.—This firm was, in fact, dealing with Gaeltarra Éireann?—Yes.

Was that a regular procedure for him, to accept employment of an overtime nature like that?—I have not got the full details. I could not say for how long he was engaged by the firm, but it was mentioned to me that this man did take such work.

Would that be regarded as proper conduct for a person in his position in Gaeltarra Éireann?—I would not go so far as to say that it would be improper.

But slightly heterodoxical?—It might perhaps be unusual.

550. We come now to the question of raw materials and I have to inform you that when the Accounting Officer’s report was shown to me the following paragraph therein arrested my attention—

“As I stated when before the Public Accounts Committee on 8th May, 1958, a careful and exhaustive stocktaking was made at the close of the year 1957/58. I have examined the stock lists returned by the stocktakers and I am satisfied that the true stocks found compared satisfactorily with the book stocks.”

On that being submitted to me, I asked the Clerk to the Committee to address a letter to the Accounting Officer stating that, in my opinion, the Committee would not be satisfied with the general statement that he examined stock lists returned by the stocktakers and that he was satisfied that the true stocks compared satisfactorily with the book stocks, as I felt that that paragraph was too vague. Mr. Ó Braonáin, in the light of that letter, very kindly had a further memo prepared, of which you have copies before you. In this he sets out—

“The Secretary to the Committee of Public Accounts sent me a minute dated 17th November, 1958, stating that it was the wish of the Chairman of the Committee that I should furnish a further statement showing how the true stock compared with book stock for raw materials and giving particulars of any excesses or deficiencies that were found.

In compliance with the foregoing request I submit the following statement in regard to the stocks of raw materials held by Gaeltacht Services on 31st March, 1958 …”

Mr. Ó Cadhla, have you had time to examine this further return?*

Mr. Ó Cadhla.—We had it examined and the auditor has very little observation to make on it. The surpluses and the deficiencies of stocks were all relatively small and most of the items are of small value.

551. Are you satisfied, Mr. Ó Cadhla, that on the supplementary report of Mr. Ó Braonáin, the Accounting Officer, the stocks in fact compare satisfactorily, in your sense of that word, with the book stocks?

Mr. Ó Cadhla.—On the information which I obtained from the auditors I am satisfied.

552. Deputy Cunningham.—On what date did the handover take place to the new Board?—On the 1st April, 1958.

553. In the case of tweed could we have the type of stock, the value of it, whether it was seconds or job lots and so on, when the handover took place?—There was an inventory prepared of the tweed which was in fact handed over to the new Board.

That would be the stock as at the 31st March, 1958, as included in the accounts and based on the stock lists prepared on that date?

Chairman.—That was actually what was handed over?—That was handed over at a valuation.

Deputy Cunningham.—I would be interested to discover particulars of the items in regard to quality and so on?

554. Chairman.—Does the inventory of that stock show its condition and describe it?—I do not think it would be possible to go back and get details such as the Deputy mentions. The stock lists were put together merely for the purpose of a valuation and the value given to each stock item would indicate its quality. The experts, the men who know tweeds, knew how the market stood when they were arranging the price per piece. Perhaps in some cases there might have been an indication regarding quality, it might have been marked “out of date” or something like that. In regard to each piece, however, I do not think we could go back and indicate the quality of the piece on the 31st March, 1958.

555. Deputy Cunningham.—The total value of the tweed and the total quantity are available?—Yes, I have submitted those details.

Chairman.—Are we to take it that when the Board took over the stock of tweed the Department was credited with the amount which appears in the stock list as the value of the tweed transferred? —It is not actually a question of crediting the Department but they took on the stocks at a valuation. The assets of what was known as the Gaeltacht Services were transferred to the Board under the Act as they stood on the 1st April. These assets have been valued and the Board will take on a liability to the State in respect of them but the conditions under which the liability will have to be discharged have not yet been settled. That is a matter that has to be settled between the Board, the Minister for the Gaeltacht and the Minister for Finance, as laid down in the Act.

Supposing the value of your tweed stocks on the 31st March was £100,000 does the Board now stand liable to the Department for that amount?—Yes, you can put it that way.

There was a revaluation?—No.

556. Deputy Cunningham. — If the Board disposes of stocks handed over to them at the 31st March at a very low price does that mean that the amount of money which will eventually be arrived at as repayable to the Department will be decided on that price?—I do not think so. Speaking as Accounting Officer I must say that I would resist any suggestion, if made by the Board, that the value of stocks on the transfer date should be cut down where they have disposed of them at less than the stock list value. I think it should be resisted because it could end up anywhere.

Deputy Cunningham.—I know of course that the Accounting Officer has no control in the question of an adjustment but I know that some of this material has been sold at very low prices, say as low as 6/- a yard.

Chairman.—That is a matter for the Board. I deeply wish that it would be relevant, but I am perfectly clear that it is not relevant nor can Mr. Ó Braonáin be asked to explain. His sole function is to give an account to this Committee of matters under his control and he told us that these stocks have been disposed of to the Board at the price shown in his stock lists at the 31st March, 1958?—That is the position at the moment but we must remember that the whole question of the value of these assets is to be the subject of discussion with the Department of Finance.

557. Deputy Cunningham.—So that the action of the Board would not affect this matter which we are dealing with?

Chairman.—We are not concerned with the actions of the Board but only the actions for which Mr. Ó Braonáin is responsible. We cannot instruct Mr. Ó Braonáin to act other than in accordance with the policy laid down by his Minister. His Minister will act with the Department in determining the settlement which is to be made. Would we embarrass you, Mr. Ó Braonáin, if we asked you what advice you proposed to tender to the Minister?—I did give an indication of what my attitude would be in regard to the writing down of these stocks. I know quite a lot about this because of my dual capacity of being in the Department and on the Board.

558. Deputy Cunningham. — To my mind, as far as the Committee is concerned, there is some unfinished business, because the value of stock which came under our control at the 31st March, 1958, has yet to be determined.

Chairman.—Is that correct?—Yes, to be finally determined, yes.

Mr. Ó Cadhla.—All the assets and the liabilities of the Department were transferred to the Board, under the Act, and no money will pass as a result of the taking over of the services by the Board. There will be no financial adjustment as far as the Department is concerned.

559. Chairman.—I ask this question of Mr. Ó Braonáin. If your stock, as revealed by the stock sheets, is worth £100,000 on the 31st March, are we to assume that the Board will be responsible for £100,000 in respect of the stock acquired by them; and will they ultimately pay that sum as an Appropriation in Aid or an Exchequer Extra Receipt to the Department of the Gaeltacht?—The position is, Mr. Chairman, assuming it to be £100,000, that the Board have taken over that stock under the Act as at the 1st April, 1958. If the valuation put on that stock by the Department of the Gaeltacht— that is, by Gaeltacht Services—at the time was £100,000, we will insist, as far as we can, that that valuation will remain. I might go a little further and say that I have gone through the stock list and I am satisfied that, where stock was lying on the shelves for quite a long time, it had been written down very considerably before the transfer to the Board. There was quite a lot of cheap stuff lying on the shelves of Gaeltarra Éireann.

Chairman.—What will happen? Will the Department of the Gaeltacht receive any payment from the Board for these stocks? —No decision has been made with regard to that yet, Mr. Chairman. The Act states that the assets of the Board shall be valued in agreement with the Department of Finance and the Board shall be responsible for the value of those assets as a repayable debt. The conditions of repayment of that advance are not specified in the Act but are to be settled by the Department of Finance.

560. Deputy Brennan.—I was going to try to elicit what Deputy Cunningham was probing. His fear, as far as I can see, is that the Board’s liability to the Department will not be influenced by the rather low price we are prepared to accept for the stock, in disposing of it.

Deputy Cunningham.—We might get it this way. In valuing the stock at handover, say the 31st March, were any of the quantities of tweed priced so low, or valued so low as 5/- or 4/6 per yard?— There were stocks on hand at the 31st March, 1958, priced as low as 5/—I have a personal recollection of that—and in some cases they may have been less.

Deputy Cunningham. — That possibly clears my point.

561. Chairman.—I take it that when the final settlement is made, Mr. Ó Braonáin, this Committee will be notified of its terms?—I wonder how that could be done, I do not see how it could be done in the ordinary course in connection with this Appropriation Account except by putting it in as an addendum to the account, perhaps.

Mr. Ó Cadhla.—The transfer to the Board will be referred to in my next Report.

Chairman.—We are in this difficulty, that it appears to us, that substantial assets—to wit, the stock of Gaeltarra Éireann—are being transferred under Statute to a statutory Board. These stocks have a value and were originally purchased out of public funds. It appears to me that this Committee would wish to know how they were ultimately disposed of and what reaction on public funds resulted therefrom.

Deputy Brennan.—Exactly.

Mr. Ó Cadhla.—I should venture to say that these stocks are part of the assets that have been transferred under the Act to the Board and, apart from valuation of the assets for the purpose of fixing the capital of the new Board, no money will pass as between the Board and the Department.

Chairman.—I think I should say that it is likely that in our report we would include a paragraph—I cannot say anything on that until we come to the report —indicating that we would wish to be informed of the ultimate conclusion of this statutory transfer and of the reaction, if any, it had on public funds.

562. Deputy Lynch.—The statement on the development in marketing has been in our hands only about a week.* I noticed when I got it that the Comptroller and Auditor General certified this on the 1st April, There would be a time lag in getting this copy sent to us.

Mr. Ó Cadhla.—The explanation is that the account which I signed was submitted in Irish and it was necessary to get the Dáil translators to prepare the translation. That is the copy you have before you.

563. Deputy Sheldon.—Arising out of that, may I make a point? I notice that the Appropriation Account appears in Irish; and I am not aware that this Committee had its attention drawn to this change in the presentation of the Account. I would be glad to hear what the Department of Finance have to say about that.

Chairman.—I do not think that this is a matter on which I would feel myself free to question the Department of Finance, as I am of the opinion that it is open to any Department of State to use either language in the discharge of public business. In respect of this report, when it was submitted to me in Irish, I informed the Clerk of the Committee that I wanted it translated into English so as to have it available in a form which would be comprehendible to all the members of the Committee; and I desired it in both forms. I would be quite prepared to consider, in drafting our report, a similar request to the Accounting Officer of the Department of the Gaeltacht that he should arrange with the Department of Finance to incorporate his account in both languages in the Appropriation Accounts, if that is the will of the Committee—and I think it may well be?— I may say, Mr. Chairman, just for your information, that we put the Appropriation Account in Irish this year because the Estimate had gone through in Irish.

Deputy Sheldon.—The attention of this Committee was not drawn to the change in the Book of Estimates.

Chairman.—I think I should comment on that. I am extremely jealous of the prerogatives of this Committee, but I do not know that we could direct, or that I could direct, that we should be consulted prior to the insertion of this Estimate in the Irish language. I think we have a perfect right to request that there be a translation of the Irish, but I do not feel that we have a right to request that it should not be in Irish.

Deputy Sheldon.—May I just make a point that, normally, the Committee is informed of changes in the Book of Estimates and I was construing this as a material change.

Chairman. — While I may stand corrected, I do not regard it as a material change to use either English or Irish. I think that it is generally accepted as a permissible alternative. I know that the Department of Finance and the Department of the Gaeltacht would wish to accommodate this Committee and so I shall confidently approach them to provide the Appropriation Accounts at least in the form acceptable to the members of this Committee.

564. On subhead F., is that Gaeltacht Housing?—Yes, Mr. Chairman.

Why is it that there was £47,000 less spent than was provided?—There was a difficulty during that year with regard to the supplementary allowances which are paid by the county councils. In the early part of the year, there was some doubt as to whether those grants would be continued and that slowed up a lot of cases in the early part of the year, with the result that less work was completed and less work qualified for the grant during the year.

Deputy Lynch.—Does the area of Ring, Co. Waterford, qualify for these grants? —Yes.

565. Deputy Brennan.—Would it not be a contributory factor, too, in the case of the Gaeltacht grants, that the Local Government grants have been for some time equal to the Gaeltacht grants and usually entail less difficulty?

Deputy Cunningham.—That would not affect them in the particular year.

Deputy Brennan.—For instance, to qualify for a grant under the Gaeltacht Housing Scheme, one must be replacing an existing house which is held to be no longer habitable.

Chairman. — Not “habitable,” but adequate.

Deputy Brennan. — Adequate, yes— whereas in the case of the Local Government grant they are not so strict in their rebuilding schemes. I find that many people go for Local Government grants in preference to Gaeltacht grants at the moment?—The position is as the Deputy has said, Mr. Chairman. The grants at the moment happen to be the same since the Local Government Act was passed in July last. We are bringing in an Act—I say this without anticipating the decisions yet to be made—to bring the Gaeltacht Housing Grants to an amount which will restore their advantage over the Local Government grants to what it has always been.

566. Chairman.—With regard to subhead G., there is an under expenditure of £32,000. What is the reason for that? —These are Improvement Grants for the Gaeltacht. The expenditure was almost entirely on road schemes. Many schemes were carried out in continuation of schemes started under the old Oifig na Gaeltachta agus na gCeantar gCúng. Very few schemes of any other kind came to fruition during the year, although quite a number—such as sewerage and amenity schemes—were started but grants in respect of them did not come in course of payment.

567. Deputy Cunningham. — Do these schemes have to be put up by the county council? Are these grants payable to the various county councils?—Yes—to the county councils.

Have delays by councils in submitting claims caused the non-expenditure of some of this money?—Well, I would not like to blame the county councils only, without having particular cases in mind; but there were some cases when we would have liked to have got some particulars from them a little earlier.

Deputy Jones.—May I, like Deputy Cunningham, ask would there have been any cases where it was postponed because of the local contribution not having been made?—There is no contribution in respect of road schemes. It is a 100 per cent. grant.

568. Chairman.—Where is there in this Vote, any provision for the pig scheme, Mr. Ó Braonáin?—That is under the Development subhead, subhead G.— Scéimeanna Feabhsúcháin sa Ghaeltacht.

How much actually was spent on the pig scheme in that year?—1957-58? It did not come into operation until the following year.

It did not come into operation until 1958-59?—1958-59.

569. Deputy Jones.—As an item of interest, in regard to the number of children sent to the Gaeltacht, were these from Dublin? I refer to the assistance that was given to send children to the Gaeltacht. Were the children all from Dublin?—I would say that the majority were from Dublin in that particular year but children went from almost every part of the country, including, I may say, the Six Counties.

This assistance is available to children all over the State?—Yes.

570. Deputy Cunningham.—On subhead N.—Coimisiún Béaloideasa Éireann, is it intended to continue this service?—That service has been returned to the Department of Education. It does not appear in our Vote this year. I think we stated that in our notes.

Chairman.—There is no note on that in the Appropriation Accounts?—No; I am sorry, there is no note in the Appropriation Accounts, but it has been returned by Government decision.

The witness withdrew.

VOTE 5—COMPTROLLER AND AUDITOR GENERAL.

Mr. E. F. Suttle called and examined.

571. Deputy Sheldon.—May I ask a question? I wonder how it comes that the incidental expenses can be so accurately forecast?

Mr. Suttle.—It was pure coincidence.

The witness withdrew.

The Committee adjourned.

* See Appendix XXVII.

* See Appendix XXVII.

* See Appendix XXVIII.

* See Appendix XXVII.

* See Appendix XXIX.