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

REPORT

PART I—GENERAL OBSERVATIONS.

MINUTE OF MINISTER FOR FINANCE DATED 11th DECEMBER, 1958.

1955-56 Accounts.

1. The Committee will await further reports on the matters referred to in paragraphs 4, 7, 9, 17 and 22 of its report dated 19th February, 1958, on the accounts for the year 1955-56.

1956-57 Accounts.

Office of the Revenue Commissioners.

2. The Committee would like to be informed in due course whether the revised accounting procedures in the Estate Duty Branch of the Office of the Revenue Commissioners have facilitated the clearance of the arrears of cases awaiting completion.

Commissions and Special Inquiries.

3. The Committee notes the assurance given that the activities of the Irish Manuscripts Commission and the Place Names Commission do not overlap that of other Commissions or bodies engaged in the field of the Irish language. While appreciating the difficulties of recruiting and retaining suitable staff for the Place Names Commission, it is disappointed with the progress made having regard to the outlay of £27,000 in the period of 10 years.

Public Works and Buildings.

4. The Committee notes the steps which the Commissioners of Public Works propose to take to ensure that there will be no alteration in building requirements between the approval of plans and the completion of working drawings, and trusts that unnecessary expenditure will thus be avoided.

5. Having regard to the additional information supplied in this case, the Committee does not desire to offer any further comment.

Health.

6. The Committee notes the progress made towards the completion of the audits of the accounts of Health Authorities. But it does not consider it satisfactory that one account for the year 1954-55 had not been certified in December, 1958.

Social Insurance.

7. The Committee is glad to learn that the Minister has requested that the negotiations for the lease of the Bus Station at Aras Mhic Dhiarmada to Córas Iompair Éireann should be pressed forward to completion.

PART II—PARTICULAR ACCOUNTS.

Office of the Revenue Commissioners.

8. The Committee had under consideration the amount of outstanding taxes of which particulars were given in the report of the Comptroller and Auditor General. The Accounting Officer explained that in cases where the Commissioners had not sufficient information to assess the precise liability to tax, protective assessments were made, which were in many cases much greater than the amounts eventually found to be collectible. The amounts shown as outstanding in the Comptroller and Auditor General’s report include protective assessments and assessments under appeal all of which do not necessarily represent collectible arrears. While the Committee is fully satisfied with the position in regard to the collection of revenue it is concerned lest the magnitude of the sums shown as outstanding should convey an erroneous impression of the amount of tax uncollected. It suggests that estimates of the amounts which, in the opinion of the Revenue Commissioners, will prove to be collectible should accompany the statement of outstanding taxes.

Public Works and Buildings.

9. The attention of the Committee was drawn to an ex-gratia payment of £1,300 to a contractor to compensate for extra labour and other costs incurred on the erection of a Telephone Exchange between the years 1949 and 1952 at a cost of £75,000. The Accounting Officer stated that a competitive demand for skilled labour arising from the simultaneous erection of a Regional Sanatorium in the same locality obliged the contractor to employ his men on almost continuous overtime at trade union rates. He agreed that this competitive demand was an ordinary hazard of contractors, but that the Commissioners’ policy was not to take too rigid a view in such cases. They considered it justifiable to make a contribution to losses sustained through unusual or special circumstances because they were anxious to retain the goodwill of contractors provided that the concessions made were not unreasonable. The Committee is, however, reluctant to accept lightly departures from the principle that fixed sum contracts should be completed within the terms of the contract. It agrees that extra-contractual payments should be confined to unusual or exceptional difficulties which could not be foreseen by the successful or any other tenderer. It is therefore with some hesitancy that it accepts the explanation given in this case.

10. Reference was made in previous reports to a contract of £2,899 for preliminary work and for the elimination of dry rot, prior to the adaptation of the Shelton Abbey buildings for use as a forestry school. It had been intended to place a separate contract for the latter work, but this was not found to be feasible owing to the extent of the dry rot infestation and the general nature of the adaptations. The entire works were therefore carried out under the “time and material” clauses contained in the preliminary works contract, and the final cost amounted to £110,000 of which £70,000 was attributed to the elimination of dry rot. In the year under review attention was drawn to a further payment of £3,000 ex-gratia to the contractor which was made on the grounds that the addition of 25 per cent. to the cost of labour allowed to him in his contract for £2,899 was insufficient to cover insurances, annual and public holidays, and general overheads, and to allow a reasonable profit for a job that ultimately cost £110,000 and which extended over a much longer period than was envisaged in the contract.

The Committee appreciates that the contractor may not have had sufficient margin to cover his overhead expenses and to allow him a reasonable profit. But it looks askance at the position in which the Commissioners found themselves committed to pay a sum of £3,000 ex gratia, and it again desires to stress the importance of tighter control of expenditure incurred on building contracts carried out on a time and material basis.

11. The Committee had under consideration the results of the first stocktaking at the Central Engineering Workshop and Stores at Inchicore. This stocktaking was completed in 1954 and disclosed surpluses to the value of £56,577 and deficiencies valued at £51,983. A second complete stocktaking commenced in January, 1957, and the results are expected in a short time. In paragraph 20 of its report on the accounts for 1955-56 reference was made to two independent sets of records maintained for these stores, but the Accounting Officer expressed himself as being reluctant to abandon either set of records until the question was investigated. The Committee has agreed to defer further consideration of this matter until the results of the second complete stocktaking become available.

Defence.

12. Reference was made in paragraph 7 of the Report dated 13th June, 1957, to air raid precautions equipment and medical stores purchased during the emergency and located at various centres and hospitals throughout the country. The Committee notes that inspection of medical stores has been completed in 90 out of 99 hospitals and that it was hoped to complete the inspections at an early date. It wishes to be informed of the outcome.

13. In paragraph 8 of its report on the accounts for 1954-55 the Committee noted that the question of recovering the loss sustained through a contractor’s failure to carry out his contract to purchase 125 motorcycles had been referred to the law officers for consideration. The Committee understands that this matter is still under consideration and it expresses surprise that it should take more than three years to bring it to finality.

Employment and Emergency Schemes.

14. Delays by local authorities in submitting suitable schemes to absorb the full allocations was the explanation for a saving of £37,000 in the provision for Urban Employment Schemes. The Committee was informed that the authorities in Dublin and Cork found difficulty in submitting schemes containing a sufficiently high unskilled labour content and that in these circumstances issues of grants were delayed. It trusts that no effort will be spared by the local authorities concerned in the way of advance planning and early consultation with the Special Employment Schemes Office to secure that, while it remains necessary, moneys voted for the relief of unemployment shall be fully utilised.

Stationery Office.

15. Attention was drawn to payments of £347 and £667 to a printing contractor in respect of rent for type held standing for prolonged periods. The former payment relates to printing of the rules of the High Court and the Supreme Court, and the holding of the type would appear to have been due to delay on the part of the Department of Justice in furnishing the balance of “copy”. It is stated that the revision of the rules will not be completed until 1960. The other payment relates to work for the Irish Manuscripts Commission and the Committee was informed that the delay was mainly due to the difficulty in obtaining the services of persons suitably qualified to prepare the works for printing. The Accounting Officer stated that he has arranged with the Commission that as far as possible no new work will be sent for printing until complete copy is available. It trusts that this and the other arrangements that have been made will obviate the necessity for expenditure on the retention of type for prolonged periods, save in very exceptional circumstances.

Rates on Government Property.

16. Contributions in lieu of rates paid from this vote in some cases included charges in respect of water supplies. But the Committee was informed by the Comptroller and Auditor General that several Government Departments also made payments to Local Authorities in respect of water supplied, and that in view of the possibility of duplicate charges for the same service he had issued an inquiry to have the position clarified. The Accounting Officer explained that the charge included in his contribution payments related only to domestic water supplies and that water supplied for other purposes would involve additional payments to the Local Authorities. He suggested that possibly the payments made by the other Departments related to non-domestic water supplies. In view of the doubt raised by the Comptroller and Auditor General’s inquiry it had been decided that as from 1st April, 1959, all payments for water supplies should be made by the Valuation Office from this vote, and the Accounting Officer stated that payments made during the year under review would be re-examined to ascertain whether they were in fact due. The Committee would be glad to learn the result of this re-examination.

Posts and Telegraphs.

17. The Committee’s attention was drawn to a payment of £400 by the Post Office Savings Bank which was made in error to the administrator of the estate of a deceased person because of a similarity in name. The depositor subsequently was repaid his deposit and efforts are being made to recover the erroneous payment. The Accounting Officer informed the Committee that a firm of solicitors in February, 1955, inquired if there were any moneys held by the Post Office in the name of a deceased person, and a Savings Bank account was traced in that name and with the same address. The deposit book was not presented but the local postmaster confirmed that no other person of the same name resided in the district and a comparison of the deceased’s signature with the depositor’s signature was regarded as satisfactory. In May, 1956, the depositor presented his deposit book and claimed his deposit. It then transpired that he had opened his Savings Bank account while on holiday from England in 1954, but that he had not resided in the district since childhood.

The Committee is not impressed by the efficiency of the official procedure in this case and since the non-presentation of the deposit book should normally give rise to an element of doubt, it suggests that some form of indemnity might be considered in such cases.

18. Irregularities were discovered in connection with the collection of Customs Duties, etc., at the Parcels Office in Dublin and the official found responsible was prosecuted and dismissed. The Accounting Officer explained that a postman obtained possession of unassessed dutiable parcels and of certain unused charge labels which he affixed to the parcels and recorded thereon the duty payable. He delivered the parcels to the addressees, collected the duty and retained the proceeds. The Committee was informed that the frauds were facilitated by a failure to carry out a standing instruction to destroy at the end of each day the unused labels, and by the unsuitable accommodation and congestion at the Central Parcels Office. The Accounting Officer stated that he is satisfied that the system of control is sound, but that there was a lapse in its enforcement. The Committee raised the question of supervision and has received a note from the Accounting Officer on this point. It is disturbed to note that the investigation failed to disclose how the parcels came into the possession of the postman without being assessed for duty, and at the possibility that an accomplice may still be employed in the Office.

Industry and Commerce.

19. Payments amounting to £641,322 were made during the year on account of losses sustained by Grain Importers (Éire) Ltd. on the disposal of a quantity of native wheat of the 1956 and 1957 harvests which was surplus to requirements and the bulk of which was sold as animal feed. The Committee understands that the wheat sold was all millable, but that it had to be disposed of to clear storage accommodation. After the 1957 harvest was saved there was an abnormal surplus over anticipated requirements of 120,000 tons, excluding a normal carryover of 50,000 tons. The 1958 harvest was estimated to yield 380,000 tons and so storage accommodation would have been required for 550,000 tons. The 1958 crop yielded only about 10 per cent. of the estimate and it was necessary to import a considerable quantity of foreign wheat to meet requirements.

While the Committee appreciates that the very disappointing results of the 1958 harvest could not have been foreseen when the decision was made to dispose of the surplus, it wonders whether future losses could be better controlled if storage accommodation were more fully availed of.

Roinn na Gaeltachta.

20. The methods of accounting and control of stocks of raw materials and finished goods of the Gaeltacht industries have been the subject of examination and comment by the Committee, and in its report dated 17th July, 1958, a request was made that a complete survey of the store records be undertaken by the Accounting Officer and the Comptroller and Auditor General agreed to co-operate to this end.

The results of the survey are shown in the Accounting Officer’s reports appended to the minutes of evidence. While the Committee accepts the assurances of the Accounting Officer that the discrepancies disclosed by the survey were not significant in view of the quantities involved and the period covered, it is still not satisfied with the methods of control exercised by the Department over its stores. Since the operation of the industries was handed over on 1 April, 1958 to the Board established under the Gaeltacht Industries Act, 1957, it has decided not to offer further comment.

21. Under the Act the assets and liabilities of the industries were transferred to the new Board. The Committee wishes to be informed as to the basis of valuation of the trading stocks on transfer and also regarding the manner in which the net liability of the Board to the Exchequer will be discharged.

22. It would facilitate the proceedings of the Committee if an English version of the Appropriation Account of Roinn na Gaeltachta was made available in future.

(Signed) JAMES M. DILLON,

Chairman.

2nd July, 1959.