MIONTUAIRISC NA FINNEACHTA
(Minutes of Evidence)
Déardaoin, 15 Nollaig, 1960.
Thursday, 15th December, 1960.
The Committee sat at 11 a.m.
DEPUTY COSGRAVE in the chair.
Liam O Cadhla (An tArd-Reachtaire Cuntas agus Ciste), and Mr. J. McGartoll (Department of Finance) called and examined.
VOTE 7—OFFICE OF THE REVENUE COMMISSIONERS.
Mr. Seán Réamonn called and examined.
281. Chairman.—The first Vote this morning is Vote 7. This is Mr. Réamonn’s first appearance here as Accounting Officer and, on behalf of the Committee, I should like to welcome him.
Mr. Réamonn.—Let me say that I am most grateful for your kind remarks. I appreciate them deeply.
Chairman.—The paragraphs on this Vote by the Comptroller and Auditor General are mainly for information. There are five in all, and they read as follows:—
9. A test examination of the Revenue Account has been carried out with satisfactory results.
10. The net yield of revenue for the years 1958-59 and 1959-60, under its main heads, is shown in the following statement:—
£101,416,000 (including £1,586,000 in respect of Special Import Levy) was paid into the Exchequer during the year leaving a balance of £3,243,610 as compared with £2,015,655 at the end of the previous financial year.
11. I have been furnished with the following statement of outstanding tax assessments:—
Note: The bulk of the tax shown in the table is charged in estimated assessments and assessments which are under appeal or inquiry.
Comparative totals of outstanding assessments for the previous year are— Income Tax, £10,077,353; Sur-tax, etc., £2,133,918 and Corporation Profits Tax, £665,036.
Extra-statutory Repayments of Customs and Excise Duties
12. Extra-statutory repayments of Customs duties and of Excise duties amounting to £16,616 and £2,444, respectively, were made during the year. The Customs duties include £91 in respect of Special Import Levy.
Remissions and Amounts Irrecoverable
13. I have been furnished with schedules of the cases involving a loss of £50 or upwards in which claims for duty under the Revenue Acts were remitted without statutory authority or passed as irrecoverable during the year ended 31 March, 1960. I have made a test examination of the items included in the schedules with satisfactory results. The total amount, £203,208, remitted or passed as irrecoverable is made up as follows:—
The distribution according to the grounds of remission or write-off is:—
282. Deputy Sheldon.—Under what heading did the remissions take place in the two Customs duties cases under paragraph 13?—There were two cases involved. The total amount remitted came to £25,563 12s. 11d. The first case was the smaller of the two. It concerned Christmas gifts of cigarettes, consigned by the British Red Cross, to Leopardstown Hospital. The amount in that connection was £76 5s. 6d. The second item was the bigger one. This item occurs, in another form, under paragraph 12. The British Coal Board informed us that they would not be able to supply our full requirements of large coal and would have no objection, therefore, to our importing coal, free of duty, from other sources. What happened was that coal, other than British coal, was imported. The duty, in the ordinary course, would have been three shillings per ton. Having been informed by the British Coal Board that they could not meet our requirements and would have no objection to our bringing in coal, duty free, from outside Britain, the various coal merchants imported, chiefly from the United States. In some cases they imported the coal, paid the appropriate duty and got a subsequent repayment of duty. In the case we are considering the merchants secured the duty-free importation of this type of coal, chiefly from the United States, and the amount of Customs Duty remitted came to £25,487 7s. 5d. That brought the total up to £25,563 12s. 11d.
Is the remission, in such cases, on the grounds of equity?—The first one was compassionate because the cigarettes were going to wounded soldiers. The second one was equity
283. Chairman.—In the case of the items under “Miscellaneous: liability not enforceable, etc.,” could you indicate in what circumstances the general liability was not enforceable?—That arises principally in what we describe as “Gone Unknown.” That is the operative phrase. The person involved has left the country and we cannot trace him, although we make all kinds of efforts to do so. If we have some kind of address abroad we communicate with him. Naturally enough, in a great many cases, we fail to get any response.
Deputy Sheldon.—This would be chiefly income tax and surtax?—That is so. I have a division, according to duty, as a matter of fact.
Deputy O’Toole.—Surtax seems to be a very small amount?—The amounts irrecoverable came to £128,233 3s. 9d. They are all income tax and surtax cases.
Chairman.—The Vote itself is on page 10.
284. Deputy Jones.—Under subhead G. —Machinery and Repairs in Stamping Branch, Dies, Plates, etc.—the Note says: “Provision was made for three special issues of postage stamps—only one was produced.” Have the other two been permanently written off?—I do not think I am in a position to answer that. In the ordinary course, we secure the printing of these stamps as agents for the Department of Posts and Telegraphs. We merely comply with their requirements. These special commemorative stamps are usually produced by the “recess” printing process. Our Stamping Branch is not equipped to execute this process and the work is, accordingly, performed by commercial printing houses under the security control and supervision of our Stamping Branch. In the year 1959/60 we had, as a result of previous correspondence with the Department of Posts and Telegraphs, provided for three special commemorative issues to be produced by the “recess” process. In fact, only one was produced, that for Arthur Guinness. With regard to the other two, the matter is not one for us because we merely comply with the requirements of the Department of Posts and Telegraphs.
285. Deputy Cunningham.—In connection with subhead J.—Boat Hire, Cycles and other Conveyances—is the procedure there that, in the case of boats, the officer hires a boat, pays for it, and is then recouped?—Yes. This is a provision we make for the hire of boats by Customs staffs for boarding vessels arriving from abroad. We made provision for £110. The actual expenditure was £83. The Customs Officer pays for the boat hire and is recouped subsequently.
Deputy Booth.—Is this at the small ports or the main ports?
Chairman.—Can you say what ports are concerned?—Mainly outlying ports.
286. Deputy Booth.—There is quite a saving shown under subhead K.—Motor Cars for Frontier Patrols, etc.—explained by the fact that cars of a smaller type were purchased. Was that a matter of policy or was it just accidental?—It was really experimental. Ford Zephyr cars were replaced; the three we purchased by way of replacement were Ford Consul, Hillman Minx and Vauxhall Victor. This was really an experiment.
Deputy Cunningham.—Is the saving due to the fact that less cars were purchased?—We thought we would have to replace nine cars but, in fact, we replaced three. I think the point was that we ran the cars a little longer than we thought we would. I suppose that is not very good for the car people. We ran them a little longer and we replaced three instead of nine.
287. Chairman.—Under subhead M.— Law Charges, Expenses of Prosecutions, Fees, Rewards, etc.—can you give separate figures for expenses of prosecutions as distinct from fees?—The Revenue solicitor has expenses which come under that heading. We made provision in that year for expenses of £300 for the Revenue solicitor in connection with this matter and, in fact, he expended £309. There are also expenses in connection with fees paid for service of summonses and then, in some cases, we have to provide travelling expenses for the staff in connection with legal proceedings.
288. Deputy Sheldon.—In relation to item No. 7 in the Appropriations in Aid —Proceeds of Customs sales (seizures, etc.) —I raised this matter before and I cannot remember that I got a very clear answer. When a customs officer makes a seizure and, on some compassionate or other ground, the amount charged is later remitted, does that affect the amount of the reward the customs officer gets?—It would seem that the amount of the reward, in each case, depends on the quantity and value of the goods, the rate of duty, whether import or export, and whether conviction was obtained. Payment of the reward is deferred until all other official action in relation to the seizure has been completed so that we can get the whole picture.
It seems to me a very odd situation that an officer who makes a seizure has his reward affected by circumstances completely outside his control. The Revenue Commissioners may remit the amount on compassionate or other grounds?—A fine may be imposed or perhaps the goods are handed back. It does not seem to be quite equitable that the officer should have his reward affected by things outside his duty.
Chairman.—Is that so?—In such cases the payment of reward is deferred until all other official action has been completed and, therefore, it is so. If I may say so I am very much obliged to the Deputy for raising the point. I wonder would he be satisfied if I say I should be glad to have it considered in my Office.
When you have it considered perhaps you would let the Committee have a note on it?—With great pleasure.*
289. Deputy Booth.—In regard to subhead N. — Incidental Expenses — the amount shown here is very small. The note on page 11 says: “... and three cases amounting to £3 as compensation for clothing damaged by defective office equipment.” I was wondering about the administrative costs in investigating these complaints. I have a feeling that possibly the amount of checking that would have to go on would vastly exceed £3. Do these cases of small losses and damages have to be carefully investigated or has someone authority, on the side, to make an award if the facts seem to be clearly established? —All those cases come under a Confidential Circular of the Department of Finance. I would say there is not a great deal of administrative expenses involved. The Department of Finance have delegated to us the investigation of those cases and the consequential payments, so there is no question of any submission to the Department of Finance. We deal with those cases ourselves.
290. Deputy Cunningham.—It is not surprising that a loss of £1 arose under subhead Q.—Losses by Default, Fraud and Accident — in respect of sample liqueur bottles destroyed while in official custody. I would call that putting temptation in their way?—In fairness to ourselves I should explain what happened in that case. These sample liqueur bottles were in our custody in Lord Edward Street, Dublin, and burglars broke in and destroyed them.
291. Chairman.—Who are the representatives on the Customs Co-operation Council?—Perhaps I might make a full reply. The Council began as a function of O.E.E.C. and is still, I think, under the aegis of O.E.E.C. There are 26 members and some are from countries outside Europe. The Council deals with such matters as standardisation of customs nomenclature, valuation of goods and procedure. We contribute, first of all, what are described as Council expenses for the Secretary-General and his staff and there are also travelling and other expenses. We pay roughly 0.5 per cent. of the total budget of the Council. There are two kinds of meetings, council meetings and committee meetings. The council meetings would normally be attended by one or two Commissioners and at the committee meetings we would be represented by a Principal Officer or an Assistant Principal Officer. Last week, there was a meeting of the Council in Brussels and we were represented by a Commissioner. In fact, we had a special arrangement this year, because the outgoing Chairman of the Revenue Commissioners is Vice-President of the Council and he went specially on this occasion. It was an honour to the country.
The witness withdrew.
VOTE 55—POSTS AND TELEGRAPHS.
Mr. Leon Ó Broin called and examined.
292. Chairman.—Paragraph 79 of the Report of the Comptroller and Auditor General reads:
“Subhead E.1. — Conveyance of Mails by Rail.
79. In paragraph 75 of the report on the accounts for 1951-52 reference was made to the fact that the formal contract with Córas Iompair Éireann for the carriage of letter mails by rail had ceased to have effect from 1941 and that arrangements thereafter rested on an exchange of correspondence between the Department and the company. The Committee of Public Accounts referred to the matter in its reports dated 18 February 1954 and 30 March 1955 and expressed the view that in a continuing service of such magnitude it was highly desirable that the contractual position of the parties concerned should be clearly defined and it trusted that the earliest opportunity would be taken to have a formal contract completed. As no new formal contract has been entered into I have invited the observations of the Accounting Officer.”
Have you any further information on this matter, Mr. Ó Cadhla?
Mr. Ó Cadhla.—We have been informed that the present informal agreement with Córas Iompair Éireann, the terms of which were negotiated in 1947, is still working satisfactorily and that the reason for the non-completion of a formal agreement at that time—that is the re-organisation of the railway services—is still valid.
293.—Chairman.—Have you any idea, Mr. Ó Broin, whether it is still possible to have a formal contract? — I have not really, nor do I think there is really any need for a formal contract. We are quite satisfied with the position as it exists on the basis of existing documents between Córas Iompair Éireann and ourselves, and that satisfaction is given to both sides.
Deputy Sheldon.—Is there any reason why the present arrangement, which has worked satisfactorily, should not be made fast?—There is a reason, but I would not like to be pressed for further information in that regard.
Deputy Booth.—The fact is that the Committee has already expressed the view that a contract would be desirable. Are we not entitled to some explanation as to why, in the view of the Department, it is not desirable?—I have given an explanation in very general terms.
294. Do the documents, on which the agreement is based at the moment, allow a certain flexibility?—Yes. The documents on which the original contract was based give that flexibility but I would not like to go beyond what I have already said. It is not to the advantage of the public really that we should publish what is between Córas Iompair Éireann and ourselves because there is no formal contract.
Deputy Cunningham.—Is this arrangement of some years standing?—Yes.
In view of the fact that there are package deals, and so on, has the question of package deals been investigated? — We have, and have always had, a very satisfactory arrangement with the transport authority having regard to the particular circumstances of our business. You might say that in a sense it was a better type of package deal.
295. Deputy Sheldon.—I take it this is really a question of policy?—Yes.
Deputy Booth.—At the same time are we entitled to ask for a disclosure of the terms of the agreements, as they are at present constituted, especially in view of the fact that we have, in this particular connection, commented adversely on the contractual relations between Government Departments and contractors because the forms of contract did not appear to us to be sufficiently well designed and to give sufficient protection for public funds? There are votes or ex gratia payments, made under various circumstances, and I think, in several cases, we referred to the matter and eventually succeeded in getting a new form of contract drawn up between Government Departments and contractors which we believe gave greater security? Would we be in order in this matter, therefore, in asking to have some indication as to what the relationship is in this particular case?—If it will help the Committee in any way I shall be glad to send a note setting out our arrangements with Córas Iompair Éireann.*
296. Chairman.—Paragraphs 80 and 81 of the Report of the Comptroller and Auditor General state:
“Subhead H.2—Losses by Default, Accident, etc.
80. The losses borne on the Vote for the year ended 31 March, 1960 amounted to £4,586. A classified schedule of these losses is set out on page 163. At page 164 particulars are given of 33 cases in which cash shortages or misappropriations amounting to £2,452 were discovered; the sums in question were made good and no charge to public funds was necessary.
81. The charge to the subhead includes a sum of £90 in respect of telegraph moneys misappropriated at a sub-post office. I am in communication with the Accounting Officer regarding this matter.”
Have you anything to add on these paragraphs, Mr. O Cadhla?
Mr. Ó Cadhla.—A system of checking of telegraph receipts, applied by the Accounts Branch of the Department of Posts and Telegraphs, was dropped in 1945 as an economy measure. In 1958, it came to light that receipts, amounting to £90, had not been brought to account at a sub-office. The sub-postmaster concerned was dismissed. A survey of receipts at other offices disclosed that sums, estimated at £26, were misappropriated at another sub-office. I am informed that the check on these receipts has now been revived.
297. Chairman.—Are you satisfied with the method of checking at the moment, Mr. Ó Broin?—It was probably stated here on previous occasions that, over the years from 1946-47 or thereabouts, the Department dispensed with a number of checks in the interest of economy. We were satisfied that the checks were not revealing anything proportionate to the cost of the checks. I think that policy was widely approved. We certainly did achieve substantial economy by abandoning checks. For instance, in the Accountants’ Branch alone, in the last four or five years, we have reduced the staff by 57 heads largely by this method. In this particular case the spot check which we had abandoned might well have discovered the irregularity. In fact, it was discovered from an examination of a return supplied for a different purpose. We have revived this particular check without discovering any other cases of defalcation. Probably we shall abandon the check again after a reasonable time. I think that would be in consonance with our general policy.
298. Chairman.—Paragraphs 82 and 83 of the Report of the Comptroller and Auditor General state:
82. A test examination of the store accounts was carried out with satisfactory results.
In addition to the engineering stores shown in Appendix No. II as valued at £1,242,691 on 31 March 1960, engineering stores to the value of £24,098 were held on behalf of other government departments. Stores other than engineering stores were valued at £408,838 including £148,449 in respect of stores held for other government departments.
Including works in progress on 31 March 1960 the expenditure on manufacturing jobs in the factory during the year amounted to £39,766, expenditure on repair work (other than repairs to mechanical transport) to £64,117, and expenditure on mechanical transport repairs to £12,373.
83. A test examination of the accounts of Postal, Telegraph and Telephone services was carried out with generally satisfactory results.
The net yield of revenue for the years 1958-59 and 1959-60 is shown in the following statement:—
£9,150,000 was paid into the Exchequer during the year leaving a balance of £758,930 at 31 March 1960 as compared with £780,537 at the end of the previous financial year.
Sums due for telephone services amounting to £3,842 were written off during the year as irrecoverable, as compared with £4,204 in the previous year.”
299. Deputy Booth. — Could Mr. Ó Broin tell us under which head does the Telex system come? Does it come under telegraphs or telephones?—It is on the telegraph side.
Is it accounted for separately? I wonder is it proving beneficial?—It is proving successful financially but it is not yet big enough to bring it out and show it separately. So far we have been carrying it on the telegraph side.
300. Chairman.—I notice that the telephone revenue is up. Does that arise from more subscribers or from increased use of the telephone?—It arises from both. We have estimated that the growth of subscribers accounts for the increased traffic to be about 35 per cent. of the total; the remainder is due to greater use generally.
Deputy Cunningham.—That is the new arrangement in regard to local calls?— Yes, all those things that we have been doing recently.
301. Chairman.—Paragraph 84 of Report of the Comptroller and Auditor General states:
“84. In paragraph 80 of my report on the 1957-58 accounts I referred to irregular transactions relating to the payment of money orders for which an officer was subsequently convicted and sentenced to a term of imprisonment. I am in communication with the Accounting Officer regarding the amount of the loss to public funds, the action taken to adjust the deficiency in the accounts and the steps taken to prevent a recurrence of similar irregularities.”
Mr. Ó Cadhla, have you any further information to give the Committee on this matter?
Mr. Ó Cadhla.—These irregular transactions were brought to light in 1957 and I am informed that the examination of the accounting and procedural aspects of the case is not quite completed. Owing to the destruction of records it has not been possible to ascertain the exact amount misappropriated but the authority of the Department of Finance will be sought to write off £1,400. All procedures have been revised, with a view to preventing the recurrence of similar irregularities.
302. Chairman.—Can you explain, Mr. Ó Broin, how the fraud occurred?—The official concerned succeeded in getting hold of a number of money order forms in the course of his duties. He issued them irregularly to himself either in his own or in another name at the rate of one a month and cashed them at busy Dublin sub-offices. The paid orders appeared in the accounts furnished by these offices and this is the only evidence of their payment now. The paid orders and the relevant advices were returned to the Money Order Section of the Department, in which this man worked, but they are missing from the files and are believed to have been abstracted by the official. The issue of the irregular money orders was concealed by recording them as money orders the issue of which had been cancelled. In some cases, the appropriate account sheets appear to have been abstracted. These entries were made after the account sheets had been checked. The frauds were ingenious and succeeded mainly because the official discovered a weak point in what was an elaborate system of check and he exploited it daringly and thoroughly. He was facilitated in doing so because he was not an officer who would arouse suspicion. He had a national record, having been sentenced to life imprisonment for his part in the Connaught Rangers Mutiny, he was elderly, his record was satisfactory and he had been about 14 years in the section. It is now known that, about four years previously, he had begun to indulge in excessive drinking and gambling. I should say that this man, in the course of a couple of years, would have been entitled to a gratuity of £700 and a pension of £250 a year. I suppose that can be put against the loss which will probably ultimately amount to about £1,400. We shall ask the Department of Finance for authority to write off something like that amount.
Deputy Booth.—When you consider the huge amounts involved the amounts of losses appears extremely low. Unless you are to have, as Mr. Ó Broin says, the most elaborate system of check, crosscheck and counter-check, I cannot see that you can expect to escape risk of defalcation otherwise than by extremely careful checking on personnel and, in this case, the very best check on personnel appears to have failed without blame attaching to anyone. When you see the amount of money involved, which is a vast sum, the percentage of loss seems to me to be amazingly low.
303. Chairman.—Paragraph 85 of the Report of the Comptroller and Auditor General states:
“Post Office Savings Bank
85. The accounts of the Post Office Savings Bank for the year ended 31 December 1959 were submitted to a test examination with generally satisfactory results. The balance due to depositors, inclusive of interest, amounted to £96,265,590 (including £13,752,671 in respect of the liability to Trustee Savings Banks) on 31 December 1959 as compared with £91,239,418 at the close of the previous year. Interest accrued during the year on securities standing to the credit of the Post Office Savings Bank Fund amounted to £3,578,757. Of this sum £2,330,701 was applied as interest paid and credited to depositors, management expenses absorbed £217,473 and the balance, £1,030,583, was set aside towards provision against depreciation in the value of securities. The amount shown as interest paid and credited to depositors is an estimated sum adjusted in respect of excess provision for the years 1955 to 1958. Any necessary revision of the provision for 1959 will be made in a subsequent year.”
Deputy Sheldon.—I note that there is over £1 million put to depreciation of reserves. Can Mr. Ó Broin tell us what the total of that reserve is?—I think perhaps that question should be addressed to the Department of Finance.
Mr. McGartoll.—All these accounts are published but if the Committee would like a note I could send one.*
304. Chairman.—I think you mentioned last year, Mr. Ó Broin, that it was proposed to introduce a system of mechanical accounting in the Post Office Savings Bank. Has that been done yet? —We shall be introducing it as from the 1st January.
305. Chairman.—Paragraph 86 of the Report of the Comptroller and Auditor General states:
“86. It was noted that £3,840 paid to make good deficiencies of savings bank and savings certificate moneys misappropriated at a sub-post office was charged to a suspense account. The deficiencies resulted from frauds carried out over a number of years for which the sub-postmaster and his wife were convicted. I am in communication with the Accounting Officer on the matter.”
Can you add anything to this, Mr. Ó Cadhla?
Mr. Ó Cadhla.—The Accounting Officer has informed me that these misappropriations were possible because some depositors trusted the sub-postmaster beyond the limits of ordinary prudence. The accounts of the office were examined from time to time but deficiencies in the accounts were apparently covered by utilising unrecorded Savings Bank and Savings Certificate deposits. Of the £4,500 embezzled only £800 had appeared on the accounts of the office.
306. Deputy Cunningham.—Reading reports of cases of this kind in the public press one gets the impression that the amounts involved, over the past few years should have been a lot larger than £3,840. Was it reduced to that figure by subsequent extraction?—This deals with a particular case.
In respect of the other cases that appear in the newspapers were the defalcations made good?—In very many cases that is so. Turning to the general question, I gather you are a little concerned about the number of cases. The number of cases has not, however, increased very markedly. I can give some figures to show you what the number has been over the years. It is true that, in the last two or three years, there has been some slight increase in the number of cases and we shall probably be dealing with some of them in the next account but the total amount involved is small, particularly so in relation to the amount of money handled and the number of transactions. These cases are occurring mainly in sub-offices down through the country. The difficulty, particularly in this case before you is that only a fraction of the total amount of money involved came into our accounts. The trust given to some of these sub-postmasters and sub-postmistresses is quite unbelievable. People do the most amazing things. I can cite extraordinary details of how they behave despite all our efforts to get them to hold on to Savings Bank books and Saving Certificates. It is really impossible to control the situation without creating mistrust of the Post Office Savings Bank and that is the last thing we want to do.
307. Chairman.—In view of the fact that this particular office was inspected does it not seem strange that the defalcations did not come to light?—It might seem so but, actually, we carried out a whole lot of inspections without discovering what was wrong. It was only by having two checks, one surprise check immediately after the normal one, that we caught this at all. The Postmaster was usually able to produce enough cash to meet the situation because, on the side, he was carrying out these extraordinary transactions with large sums of money. People trusted him with quite large sums, £500 and so on, without any receipt, any check or any inspection of the books.
Deputy Jones.—He did not issue receipts?
Deputy Booth.—The depositor placed money in his hands and walked out?— Yes, it was most extraordinary. I might mention one instance in which a depositor was advised by the wife of the sub-postmaster to withdraw £500 from the Savings Bank and to buy Savings Certificates instead. The depositor signed the warrant for repayment when she received it, endorsed the repayment cheque and handed it back to the sub-postmaster to purchase the certificates for her. That occurred in February, 1958. She eventually got the certificates dated 10th June, 1958, but her suspicions were not aroused. Later, on similar advice, she withdrew £1,000 from the Savings Bank and again handed back the cheque. This was on 8th July, 1958. She was still waiting for a certificate when approached by our investigator in September, 1958. At no stage had she any doubt about the sub-postmistress. The money had been used, during both intervals, to cover shortages in the official accounts. Another depositor, in September, 1956, had made out a cheque for £500 to the post-master’s wife for the purchase of two certificates. He had not received them up to 5th September, 1958, two years later, and had been satisfied with the explanation that they were being held in safety in the sub-office in the interim. That was the sort of thing that was going on. There were many other similar instances. One finds it extremely difficult, if not impossible, to deal with that sort of thing.
308. Would you think the system of checking is lacking in some respect when this thing can go on for months, and even years, without being found out?—I admit it is not absolutely effective. The only way we could deal with the situation would be to call in publicly all the books in an area simultaneously in order to carry out a check. That would not be practicable. In one of these cases a depositor was operating from New Zealand into an account here. Actually the postmistress was gaily spending his money on herself.
309. Who has to foot the bill ultimately?—I am afraid it is the Department or the Savings Bank. Under the present arrangements they will have to foot the bill because we must maintain confidence in the Department and in the Savings Bank. As I said earlier, the total amount is very small in relation to the total amount of money handled.
Could postmasters and postmistresses not be compelled to take out a very heavy insurance to guard against that kind of thing?
Deputy O’Toole. — A form of bond?— That has been looked into. I am positive it has been looked into but, if you like, I will look into it again.
310. Deputy Cunningham.—You say a great many depositors are not aware that it is they who should hold the books and not the sub-postmasters and sub-postmistresses?—Exactly.
Are instructions to that effect permanently displayed in local sub-offices?—We cannot do that very well because that would create a doubt about the many excellent sub-postmasters and sub-postmistresses we have. The ordinary Post Office Savings Bank book carries all the instructions to be followed. On the cover it is clearly stated: “Keep this book safe in your own possession …” That is in large print. “The Book may not be left at a post office for safe keeping as Post Office officials are strictly prohibited from taking charge of it.” That is in very large print. It is also stated that if the book is taken up the depositor should ask for a receipt. Inside, in red ink, it is clearly stated: “An acknowledgement for each deposit of £50 and upwards is sent from the Post Office Savings Bank, Dublin.”
The defalcations arose, of course, in the case of depositors who never got one of these books?—In many cases they have, of course, got the books but they just do not pay any attention.
Deputy O’Toole.—Is it the custom of the Post Office to request the books to be sent in occasionally?—Yes.
Deputy Lynch.—Actually the position is very creditable because these larcenies would not have occurred were it not for the great trust people repose in the Post Office Savings Bank. People regard it is safer even than the Bank of England or the Bank of Ireland?—That is so.
311. Chairman.—Paragraph 87 of the Comptroller and Auditor General reads as follows:—
“87. In view of the extent of the misappropriations of Post Office moneys which have come to light in recent years, I have inquired generally whether steps have been taken to improve the arrangements for their detection and prevention.”
Have you any comment to make, Mr. Ó Cadhla?
Mr. Ó Cadhla.—The Accounting Officer has informed me that six cases, involving a total of approximately £16,000, which came to notice in the past three years are still under examination. He stated also that a departmental committee was carrying out a comprehensive examination of the whole position to ensure that public funds and investors’ deposits were more effectively safeguarded.
312.—Chairman.—We will now turn to the Vote itself on page 159. There is mention, under subhead D.—Purchase of Sites, etc. (Postal and Telegraph Services only)—of sites provided for but not acquired. What exactly are they?—Due to the protracted nature of the negotiations the sites, in some cases, were not acquired within the year. As far as I remember, they were in Cavan and Dungarvan. It is expected that both sites will be acquired before the end of the present financial year.
313. Deputy Sheldon.—On subhead G.1. —Stores—I take it that the explanation of the saving means that stores which formerly would have been charged to the subhead are now charged under another subhead and they are accounted for in a different way which does not reflect either in the Appropriations in Aid or in the subheads?—We made these changes, I think, in deference to the wishes of the Comptroller and Auditor General.
314. Deputy Jones.—On subhead G. 3. —Manufacture of Stamps, etc.,—what is the position with regard to the other two issues mentioned earlier in connection with the Vote for the Revenue Commissioners?—My mind is somewhat hazy about the particular year. I do not remember exactly what the situation was. Whether we told them to go ahead with only one, while we had ordered three, or whether they themselves, anticipating things, provided for three and then we only came forward with one is something that I cannot quite recollect now. I shall have to look into that.*
315. Deputy Sheldon.—Reverting to subhead G. 1.—Stores—how much was recovered from other Government Departments?—£83,949 from other Government Departments and the Telephone Capital Account combined. I have not got the breakdown.
It is still in excess of the estimate?—It is still in excess of the estimate of £73,000.
316. Deputy Booth.—On subhead L. 2. —Contract Work—were these works abandoned or just delayed? The note says that certain works provided for were not carried out?—This is a postponement. I have the particulars if the Committee is interested.
Deputy Booth.—I do not think we need trouble with the details. I was just wondering whether anything had been abandoned.
317. Deputy Booth.—The savings under subheads O. 1., O. 2. and O. 3. are very substantial?—Yes. Again, it is a question of postponement. In one instance the installation of some automatic electronic message handling equipment for Ballygireen wireless station had to be deferred in view of a decision of the International Civil Aviation Organisation to re-organise the aviation telecommunication network in Europe. I do not know what will happen there. We may have to substitute something new. In every other case it is a question of postponement.
318. In the Appropriations in Aid I notice that the estimate and realisation for both void money orders and void postal orders are exactly the same. Is that the result of close estimation, or what is the explanation?—It is based on a fixed percentage of the value of the money orders issued during the year in question. I do not quite understand why the figures should tally exactly, but I do know that we operate on a fixed percentage of the money orders issued during the year. The percentage is based on previous experience of the number of orders which became void through non-user. I will, however, check upon this interesting point about the exactness of the figures.*
319. Deputy Sheldon.—There is a reference to counter losses of £406 and I was just wondering do these include sub-post offices or offices directly under the control of the Department?—I imagine they are counter losses generally and not particularly in our own offices.
I wonder in what way does the Department feel responsible for counter losses in sub-post offices?—They are counter losses in our own offices.
320. Deputy Booth.—On page 163, there is reference to Commemoration stamps. The total involved is £38. Is that the nominal value of the stamps? I presume it is?—It is the nominal value.
Not an actual £38 sterling, as it were? —The approved accounting practice is to charge the value of the stamps presented. The reason for that practice is that the owner of an uncancelled stamp is entitled to sell it and the Department is under an obligation to collect revenue.
Deputy Booth.—The reason I raised it was to make sure it was the nominal value and not the cost.
321. Deputy Sheldon.—In Appendix No. II, on page 169, there is a stocktaking adjustment which is very much higher than it has been for a number of years. It has been running at £200 for a number of years and it is at £2,000 this time. I wonder is there any particular reason for that?—I shall send the Committee a note on that.*
VOTE 56—WIRELESS BROADCASTING.
Mr. Leon Ó Broin further examined.
322. Chairman.—Can you say, Mr. Ó Broin, are the news announcers fulltime employees of Radio Éireann?—I think there are some part-time employees.
Do they change from time to time, or is there a regular team of announcers?— There is a regular team, with a supplemental list which is drawn on from time to time.
In what way are they recruited?—They are brought in and tested for their ability to broadcast and a selection is made from them.
323. Deputy Lynch.—Does Radio Éireann publish any reports of their broadcasts or is it possible to get copies of broadcasts? I have often got them from the British Broadcasting Corporation but, is it possible, by application, and even on payment of a fee, to get such copies? Is there any provision whereby, if a member of the public applies for a copy of a broadcast, it could be made available? —It depends on what sort of broadcast you have in mind.
A talk? A news broadcast?—I think that a question was answered in the Dáil some time ago on that subject.
I asked the question?—I think the position was explained in the Dáil.
Deputy Lynch.—It was not. That is the unfortunate part of it.
324. Chairman.—In connection with news broadcasts, is it the practice to broadcast news items without comment, or does Radio Éireann give comments in certain cases?—I think the practice is to give the news straight, and then perhaps, in another programme, to make a commentary on the news situation.
325. Deputy Lynch.—I do not know whether or not I am in order but I want to know if that provision is made. Would it be possible, even if one were prepared to pay for it, if a member of the public or anyone else heard the broadcast and said: “I wonder is that right?” for him to write in and get a typed copy of the broadcast?—I do not remember the exact reply given in the Dáil but there are, undoubtedly, considerable difficulties about giving Deputies or anyone else copies of news scripts or news bulletins. The whole of the news material is copyright to us and we could not possibly reissue it, even to members of the Dáil, without reconsidering the whole position in connection with the source of supply.
Deputy Lynch.—If any material is broadcast and it is incorrect, and a Deputy raises that matter in the Dáil he is asked to quote and he must quote from memory unless he had a tape recorder alongside.
326. Chairman.—I think that might be a question of policy. What is the position with regard to the copyright of news broadcasts?—We have a competent staff— as competent as you will find in any newspaper office, applying the ordinary standards—and I think they are probably particularly careful because the radio station is a source of supply to the whole community. That is all I would say.
When you mention the fact that news is copyright to Radio Éireann, does that arise out of a contract or an arrangement with the suppliers?—Yes.
Deputy Lynch.—I shall tell the whole story on the Estimate.
The witness withdrew.
VOTE 26—OFFICE OF THE MINISTER FOR JUSTICE.
Mr. Seán Ua Buachalla called and examined.
327. Chairman.—Mr. Ua Buachalla is with us today because Mr. Coyne is ill. Can you tell us, Mr. Ua Buachalla, what is covered under subhead A. 4.—Legal and Technical Assistance?—That consists almost entirely of fees paid to members of the legal profession who assist in the preparation of the court rules.
328. Deputy Booth.—On subhead A. 5. —Irish Legal Terms Advisory Committee —is that Committee in operation at the moment or is it in a state of suspended animation?—The Committee is in existence at the moment. Occasionally it publishes pamphlets of approved translations.
Has it been doing any work during the year under review?—I am not sure when the latest publication came out. The fact that there were no expenses does not mean it did not do any work.
329. With regard to Fees for Nationality and Citizenship Certificates, I notice there is a 10 per cent. increase. As a matter of information, how many certificates are involved in £1,031?—Roughly 50, I would say. The maximum charge is £20 per certificate but it is down to £5 in some cases. I would say that the number of certificates granted is of the order of 50 to 70.
Chairman.—Is there an increase in the number of people applying for them?— Nothing significant. As you will see, the figure is 10 per cent more than we estimated for but there is no special significance so far as we can see.
330. Deputy Booth.—Fees for travel documents—that presumably does not cover ordinary passports?—No. A travel document is a document of identity given, under international agreements, to stateless aliens who reside in the State and want to go abroad. It is not a passport.
VOTE 27—GARDA SÍOCHANA.
Mr. Seán Ua Buachalla further examined.
331. Chairman.—Paragraphs 26 and 27 of the Report of the Comptroller and Auditor General read:
26. Reference was made in paragraph 49 of the report on the accounts for 1954-55 to the arrangements for periodic stocktaking of transport stores. The results of a complete stocktaking which has since been carried out have been made available to me, and disclose a net deficiency of stores to the value of £350. As stated in the note to the account the sanction of the Department of Finance has been obtained for the write-off of this amount.
27. In the course of a local audit it was observed that eight cars which were purchased in 1958 had not been in service for a considerable time. In reply to my inquiry I was informed recently that after the cars had been in service for a short time the Garda authorities were of opinion that the brakes, windscreen wipers and heaters were defective. The contractors replaced the brakes on two of the vehicles free of charge and an order has been issued for the replacement of the brakes on the remaining cars and of the windscreen wipers and heaters on all the cars. I was also informed that the cars will be taken back into service as soon as they have been rendered satisfactory. My inquiries in this matter have not yet been completed.”
Deputy Sheldon.—Can we be told what the total value of stores is?—The total value of stores kept normally does not exceed £3,000 but the value of stores handled and used, in one year, is at present of the order of £18,000.
332. Chairman.—Have you anything to add, Mr. Ó Cadhla, on paragraph 27?
Mr. Ó Cadhla.—In reply to my further inquiries I have been informed that their suitability had not been ascertained before placing the order and that the opinions of the Post Office Controller of Stores and the Garda Transport Officer were favourable.
Chairman.—Were these new cars?— Yes, quite new.
Deputy Booth.—Are they in service now?—Yes, all are back in service now.
Chairman.—Generally, do the cars purchased give satisfaction?—Generally, yes. This was the only example, certainly in recent years, where cars were found unsatisfactory.
333. Deputy Sheldon.—On subhead C., could we be told why the expenditure was not as high as anticipated?—It was difficult to calculate the amount needed for subsistence allowances and, in that particular year, it fell lower than had been expected. The year before that we spent £7,000 more than had been provided. As you will appreciate, a good deal of this expenditure is related to conditions on and near the Border and is difficult to estimate. In the previous year we were £7,000 over the mark; this year we are about £3,000 under it, despite our best efforts at estimation.
334. Deputy Booth.—Is there a connection between subheads L. and N.? I notice a fairly significant reduction here. Is that due to greater expenditure on wireless equipment? Is there any connection between these two? Is radio being used rather than telegrams and telephones?— No, there is not any connection. Under subhead L. we deal with telegrams and telephones whereas, under subhead N., we include the purchase of wireless equipment for police cars.
Not for communication between stations?—No, for use in police cars.
335. Deputy Cunningham.—Does the practice still operate whereby Garda cars are taken from remote places like Donegal to Dublin for repair?—Generally speaking, no. The question of whether a car will be repaired locally or brought in to Dublin is examined by the Gardaí and they take into consideration such factors as whether the job is big or small and whether they can themselves do it more cheaply in the Depôt than it can be done locally. Then cost is taken into account, and the expense and delay of bringing it up and down again.
336. Deputy Booth.—On No. 4. in the Appropriations in Aid, this seems to be a case of incredibly accurate estimating or good luck—proceeds of sale of old stores and cast uniforms. Is that purely good luck—about £4 in excess?—A mixture of both good luck and accurate estimating I should say.
Deputy Sheldon.—The whole account shows very accurate estimating when they only surrender £50,000 in over £5,000,000.
Deputy Booth.—What is covered by old stores? Is that mechanical stores?—Used motor cars which have ceased to be of any use to us and a lot of other stuff of that nature such as old bicycles and motorcycles.
Deputy Sheldon.—Some of the old cars do not appear to be very valuable. I see where two were valued at £75 and transferred to St. Patrick’s?—Actually they were not in running order. They were crashed cars sent down to St. Patrick’s to familiarise the inmates with engines rather than with driving.
337. Chairman.—In connection with Appropriations in Aid, the proceeds of sale of forfeited and unclaimed property— how did that arise? It is on page 59, No. 7?—I think the position was that we held an auction in that particular year that it had not been intended to hold and we got in a good deal more money than we anticipated.
338. Deputy Booth.—The Statement of Losses refers to 13 accidents where the damage was attributable to Garda personnel, amounting to £1,368. Immediately below that we have 64 accidents where Gardaí were not responsible and the amount is £1,454 only. Were there some big crashes due to negligence by the Gardaí?—As far as I can see, there were not, but as you know the State has a knock-for-knock agreement with some insurance companies and for that reason some cases where there were accidents may not show up here at all.
339. On page 60, under Extra Remuneration, there is reference to a Garda receiving £497 from the Vote for Wireless Broadcasting. Was he acting as a Garda or a broadcaster? The amount seems rather large for part-time work in radio? —It was work done by him outside his official duties as a Garda and entirely unconnected with his official position.
I did not know anybody working part-time for radio could make £497. Was that in respect of one year’s work?—Yes. We have very little information about it apart from that. As it happens, I know that the man in question does the news in Irish almost every second week or so and, in addition, takes part in a good deal of broadcasting on Sunday afternoons involving Irish, Irish drama and that kind of thing.
He draws this in addition to his Garda pay?—Yes.
It is done in his spare time?—Yes.
Mr. Seán Ua Buachalla further examined.
340. Deputy Jones.—I notice that, in the notes on page 62, the estimated daily average number of prisoners was 385 while the actual average was 447, approximately 62 more per day than estimated for. Might I ask if that is accounted for under subhead B.?—There was an unexpected increase in the number of prisoners and that made it necessary to take a Supplementary Estimate. The increased number of prisoners made it necessary for us to bring in a number of warders greater than had been provided for and, as you will see, under subhead A., the Supplementary Estimate provided £5,000, £2,500 under subhead B., and £2,200 for subhead G. There is also the small supplementary provision in the subhead for Maintenance of Prisoners, of £1,280 in subhead M.
I note the supplementaries in regard to the extra warders and for maintenance of prisoners, but what I wanted to ask is: is the scale of diet on the same basis as it was in regard to prisoners?—Yes, there is no change in the diet.
341. Deputy Booth.—In the notes on page 63, there is reference to an ex gratia payment of £95 to the Governor of Mountjoy prison for medical expenses incurred as a result of injuries sustained in the course of duty. What medical expenses were incurred and what was the nature of the injuries?—The injuries were sustained by him on the occasion of an attempt to break out from prison. In hurrying from one portion of the prison to another he damaged his ankle, or Achilles tendon and he was involved in that expenditure and was recouped.
It was not a question of violence, but of accidental damage?—It was an accident.
But it was directly attributable to his duties?—Yes.
VOTE 29—DISTRICT COURT.
Mr. Seán Ua Buachalla further examined.
342. Chairman.—Have the District Court areas been revised yet?—It is in hands at the moment and has reached a very advanced stage.
Is it expected that that will mean a reduction in the number of justices?— Yes.
VOTE 30—CIRCUIT COURT.
Mr. Seán Ua Buachalla further examined.
343. Chairman.—I understand there is also a revision of Circuit Court areas?— Yes. That has taken place.
Can you say if the revised arrangements are working satisfactorily?—So far as we know, yes, they are.
344. Deputy Booth.—In the Notes on page 67 there is reference to a sum of £70 in respect of an equity account. I do not understand what that means. What was the error?—This was a rather unusual case which started as long ago as December, 1948. In that month an order was made, at Cavan Circuit Court, directing that a total sum of £146 be lodged in court to the credit of certain minors who had been parties in a civil action and it was directed that it should be invested by the County Registrar in Government securities. By an oversight, the cheque, when received by the County Registrar, was left attached to the file and was never lodged and when he died, four years later, in 1952, the cheque was still lying in the file and was still there up to 1959, when it came to notice. The Minister decided that the young people concerned—in other words, the minors—should be recouped a sum by way of compensation for the interest they had lost because of the negligence of the officer. It is the one and only case of its type we have had in the Circuit Court.
Was that arrangement approved by the Court or was it a personal arrangement with the minors concerned? In actual fact the Order of the Court was not carried out and the beneficiaries were at a loss?—The amount paid was that accepted by the solicitors on behalf of the minors. It was based on principles laid down in other cases of that type.
So long as it was to the satisfaction of the solicitors I am satisfied?—In addition to paying the specific sum we also paid four guineas solicitors’ costs.
345. Chairman.—Can you tell us if there are complaints now in the Supreme Court and High Court about delays in getting cases at hearing?—In the past we have had allegations that there was delay. The last time we made inquiries we found that a good many of the cases which were expressed as being delayed were not, in fact, ready to go on.
VOTE 31—SUPREME COURT AND HIGH COURT OF JUSTICE.
Mr. Seán Ua Buachalla called.
VOTE 32—LAND REGISTRY AND REGISTRY OF DEEDS.
Mr. Seán Ua Buachalla called.
VOTE 33—PUBLIC RECORD OFFICE.
Mr. Seán Ua Buachalla further examined.
346. Chairman.—From whom are historical documents purchased?—They are purchased from private individuals. They are also received from the Court offices after a certain time has elapsed.
Deputy Booth.—Would it be in order to express our regret at the absence of Mr. Coyne and send him our best wishes.
Mr. Ua Buachalla.—I will convey that message to him.
The witness withdrew.
VOTE 5—COMPTROLLER AND AUDITOR GENERAL.
Mr. E. F. Suttle called and examined.
347. Chairman.—Have the vacancies been filled yet in relation to which there is a saving represented under Subhead A.—Salaries, Wages and Allowances?— No. We had a competition lately but we did not get any suitable candidates. The posts are going ahead for further competition.
Deputy Sheldon.—Would the failure to fill the vacancies be due to the level of remuneration?—Possibly. The number of applicants was small.
348. Deputy Jones.—I notice that an officer had been loaned to An Coimisiún um Athbheocan na Gaeilge and his salary is carried on the Vote for the Comptroller and Auditor General. I notice that, if the Commission had carried this officer’s salary, there would not have been a surrender of a sum of £1,271 on Vote 15, subheads F.1. and F.2. That would not appear to be a fair representation then of the costs of the Commission?—That is an arrangement we have come to with the Department of Finance; we carry this man’s salary because his period of loan is very indefinite. It has actually extended over a much longer period than we anticipated originally.
Deputy O’Toole.—Has the Commission finished its inquiry?—No.
Deputy Jones.—I do not think they have reached the report stage yet?—Some interim reports have been issued, I think. They have not yet reached their final report.
The witness withdrew.
The Committee adjourned.
*Break-down over the various years not available.
* See Appendix XX.
* See Appendix XXI.
*See Appendix XXII.
* See Appendix XXIII.
* See Appendix XXIV.
* See Appendix XXV.