Committee Reports > List of Committees > Dáil > 1960 > Committee of Public Accounts > Report - Appropriation Accounts 1958 - 1959

REPORT

PART I—GENERAL OBSERVATIONS.

MINUTE OF MINISTER FOR FINANCE DATED 31st DECEMBER, 1959.

1955-56 Accounts

1. The Committee will await the further observations of the Minister for Finance on paragraphs 17 and 22 of its report dated 19th February, 1958, on the accounts for the year 1955-56.

Wireless Broadcasting.

2. The Committee is disappointed to note that all efforts to dispose as a working unit of the shortwave transmitter and its associated stores which cost approximately £12,000 have failed. It wishes to be informed of the net loss to public funds as a result of the sale as scrap of this equipment.

Lands.

3. The Committee notes that it has been decided to clarify by legislation the legal position relating to the responsibility of the Land Commission for the cleaning of drains when the Land Commission is no longer in possession of the lands.

1956-57 Accounts.

Office of the Revenue Commissioners.

4. The Committee regards as satisfactory the results so far of the measures taken to reduce the arrears of cases awaiting completion in the Estate Duty Branch. It would like to be informed in due course of the further progress that is envisaged.

Health.

5. The Minister’s observations on the progress towards the completion of the audits of the accounts of Health Authorities have been noted. But the Committee would be glad to know whether the audit of these accounts could be brought more up to date.

1957-58 Accounts.

6. The Committee still awaits further information on the matter referred to in paragraph 16 of its report dated 2nd July, 1959.

Public Works and Buildings.

7. The Committee is pleased to note that the Minister 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.

8. The expenditure on adaptation works, etc., at the Shelton Abbey buildings has been commented on by the Committee in previous reports. It notes that the Minister has been advised that the payment of £3,000 ex gratia to the contractor was a fair and equitable measure of the loss sustained by him as a result of the operation of the allowance of 25 per cent. on labour costs which was provided for in his contract, and out of which he had to meet the cost of insurances, annual and public holidays and general overheads. In the circumstances it does not desire to offer further comment.

Posts and Telegraphs.

9. The Committee notes the Minister’s views regarding the provision of indemnities in such cases. It would like to be informed in due course of the outcome of the efforts that are being made to recover the erroneous payment.

10. The Committee is pleased to note that the Minister has received assurances, which he considers satisfactory, that action already taken to ensure full enforcement of the system of control over dutiable parcels at the Dublin Parcels Office provides adequate safeguards against a recurrence of fraud of the kind in question and that the Minister is satisfied that the general system of control affords sufficient protection against other possible dishonest activities there.

Roinn na Gaeltachta.

11. The Committee notes the basis of the valuation of trading stocks transferred to Gaeltarra Éireann and also the position regarding the debt due by that Board to the Exchequer.

PART II—PARTICULAR ACCOUNTS.

General.

12. The Committee finds it necessary to emphasise the importance of clearness, precision and consistency in the Explanatory Notes appended to Appropriation Accounts. Accounting Officers vary considerably in the fullness of the explanations of the causes of variation between Estimates and Expenditure. In some cases the Notes give virtually no additional information. It is expected that, in future, the explanations will be framed in sufficient detail to cover the significant facts of each case.

Office of the Revenue Commissioners.

13. In paragraph 8 of its report dated 2nd July, 1959 the Committee referred to the statement of outstanding taxes which is included in the report of the Comptroller and Auditor General, and expressed its apprehension lest the magnitude of the sums shown as outstanding should convey an erroneous impression in regard to the collection of revenue. It suggested that, in order to minimise the risk of misunderstanding, the statement should be accompanied by estimates of the amounts which, in the opinion of the Revenue Commissioners, would prove to be collectible.

The Committee notes from the report relating to the Accounts for 1958-59 that of the sum of approximately £13 million for outstanding tax assessments the amount which will be found to be collectible is unlikely to exceed £3¼ million. There has been some confusion in interpreting these figures resulting in £13 million being regarded as taxes in arrear, whereas, as indicated above, about £10 million of this sum will not ultimately be payable.

It seems that the difficulty is caused by the relatively large amounts included in the outstanding balance in respect of protective assessments and assessments under appeal in which the final liability has not been determined. The Committee considers that this might be overcome by emphasising the arbitrary nature of the bulk of the assessments not disposed of by the end of the year. In order to reduce still further the possibility of any misunderstanding of the situation necessarily created by protective assessments the Committee suggests that the Revenue Commissioners should in future refer to “the amounts which will eventually be established to be payable” and not to “the amounts which will prove to be collectible”.

Defence.

14. In 1931 an oil company leased certain properties, including a jetty at Haulbowline and in 1947, following discussions with the Department regarding the unsatisfactory condition of the jetty, which was essential for its business activities the company indicated that if a new one were erected at State expense, it would, as soon as it became available for use, agree to an increase of rent from £2,000 to £3,000 per annum and in addition the jetty could be used by the Naval Service for refuelling, etc. On this understanding the construction of a new jetty commenced in 1949, but certain difficulties delayed the work and resulted in its completion in 1953 to a modified design at a cost of £85,000.

In 1951, however, the oil company surrendered all its leases and the Department purchased from it oil storage tanks and other equipment for £30,000. These tanks are used to some extent for the storage of fuel oil for the Naval Service.

The Committee has no doubt that when the commitment to construct the new jetty was entered into the Department envisaged that it would be a source of additional revenue from the oil company. But it is surprised that no formal agreement was made and that the company was able to terminate its leases without payment of any compensation to the Department in respect of its outlay on the jetty.

It is stated that tenders were invited in December, 1957 for a lease of the oil installations and jetty to enable an oil bunkering business to be carried on at Haulbowline, but that no offers were received.

It is noted that recent arrangements for the development of a dockyard industry in Cork Harbour provided for the granting of facilities at Haulbowline to the development company at any time up to January, 1964, should that company so require and that the grant of such facilities might compel the Naval Service to use the oil base as alternative accommodation.

The Committee is not convinced that the facilities which have been provided at a cost of £115,000 are being fully utilised and it is disturbed to learn that no further action is contemplated with a view to leasing the oil installations and jetty and that 15 of the 25 oil storage tanks have since been sold. It would like further information regarding the arrangement with the development company, particularly, as the Department would appear to be handicapped in leasing its property, and whether any payment has been made by the company for its option.

15. A vessel engaged on garrison duty at Haulbowline was out of commission for 15 months due to an engine breakdown. It appears that because of the delay in effecting repairs which was due mainly to the need for an inquiry into the cause of the breakdown, alternative vessels had to be hired at a cost of £642. The Committee trusts that the procedure for such investigations can be speeded up so as to avoid similar delays in future.

16. The Committee notes that certain items of engineering equipment, e.g., concrete mixes, compressors, etc., located at an Engineer Maintenance Company store are intended for use as standby equipment in the event of breakdown of similar equipment, or pressure of work, or large scale field exercises.

It is presumed that stocks of standby equipment are similarly held at other stores and the Committee would like to be assured that the amount of this equipment held over all the Commands is not excessive and is kept under regular review.

17. It appears from the evidence given by the Accounting Officer that, under existing regulations, there may be weaknesses in the fire protection arrangements in Army barracks. As this question is one of importance in view of the risks to life and property it is essential that adequate fire protection be provided. The Committee wishes to have further information on this subject.

18. It is noted that the Attorney General is considering the question of proceeding against the lorry-owner in this case to recover the amount paid in excess. The Committee desires to be informed as to the outcome.

Roinn na Gaeltachta.

19. The Committee notes that no details are given in Part III of the Estimate regarding the provision under subhead G for Miscellaneous Schemes, and it recognises that there may have been some difficulty in forecasting the pattern of expenditure, particularly for schemes initiated during the year under review. It feels, however, that there should be little doubt about the desirability of supplying details of anticipated expenditure under the various schemes in Part III of the Estimates so that closer financial control may be exercised.

Public Works and Buildings.

20. An agreement, entered into in 1957, between the Minister for Education and the manager of a national school provided for the refund by the manager of a grant estimated at £14,000 which had been paid towards the cost of erecting the school assembly hall, so that the hall could be used for other than educational purposes. The Committee was informed that as the assembly hall was a part of the school structure it would probably be necessary to employ a quantity surveyor to ascertain the proportionate cost.

As more than two years has elapsed since the manager’s agreement to the refund was obtained, the Committee trusts that the amount of the grant to be recovered will be calculated without further delay.

21. Attention was drawn to the question of the availability of inventories of furniture, etc., supplied to embassies and legations abroad, and to the adoption of a procedure for periodical checks of the articles to be recorded on such inventories. It appeared that this matter had been under consideration for many years, and that, in 1938, some progress had been made, but the intervention of the emergency, followed by a number of major works requiring the full-time attention of a depleted staff in the Furniture Branch, caused the delay in making arrangements regarding inventories. The Accounting Officer states that he is considering how best to have the inventories prepared without incurring heavy expenditure, particularly on travelling expenses.

The Committee is of the opinion that valuable furniture and equipment supplied for the use of missions abroad ought to be properly recorded, that these records should be checked from time to time and any deficiencies reported. It suggests that it might be feasible to employ local valuers to undertake this work, but before arriving at any final conclusions it would like to have the considered views of the Minister for Finance.

Health.

22. The Committee has noted the growth of expenditure on grants to Health Authorities, which increased from £5½ million in 1953-54 to £8 million in 1958-59, such grants being based on 50 per cent. of the cost of the health services. The accounts of the authorities are subjected to audit by Local Government Auditors whose certificates are available to the Comptroller and Auditor General. But no details are furnished to the Committee that would enable it to review the outlay. Since taking oral evidence it has received a memorandum from the Department showing how the expenditure for 1958-59 by the Health Authorities was distributed under the headings detailed in Part III of the Estimate. From this memorandum it will be noticed that over £11 million was expended on hospital services (including general, maternity, tuberculosis, mental and other hospitals) and that this represents approximately 70 per cent. of the total expenditure of £16 million. It would also appear that there was a significant variation in the pattern of the outlay by the Health Authorities on the services provided.

The Committee wonders to what extent the standard of the services throughout the State is uniform or whether, in the interests of economy and efficiency, cost accounts are prepared by the Authorities. Although it is not in a position to form a considered judgment on these questions it would like to be furnished with further information regarding the precise responsibilities undertaken by the Department of Finance and the Department of Health in controlling expenditure.

Posts and Telegraphs.

23. In the accounts of the Post Office Savings Bank for the year ended 31 December, 1958, and for the three preceding years the amounts shown as interest paid and credited to depositors were estimated sums and no adjustments have been made in respect of these estimates. The Accounting Officer explained that owing to shortage of staff, extraction from the depositors’ accounts of firm figures of interest for 1955, 1956 and 1957 had not been carried out, and because experience had shown that the method of estimation employed produced figures, which were very close to accuracy, he considered that expenditure on the work of compiling the interest figures for those years would not now be warranted. Extraction for 1958 was in progress and adjustment for that year would be made in the accounts for 1959. He also stated that new accounting machinery which would automatically calculate interest was about to be installed. The Committee agrees, in the circumstances, that the compilation of the precise interest figures for the three years mentioned need not now be proceeded with. It trusts that the introduction of mechanised accounting will result in the expeditious production of accurate figures relating to the accounts of the Bank and it will look forward to a report, in due course, on the operation of the system.

(Signed) LIAM COSGRAVE,

Chairman.

6th April, 1960.