Committee Reports::Report - Appropriation Accounts 1960 - 1961::05 September, 1962::Report




1. The Committee will await the further observations of the Minister for Finance on paragraphs 3, 4, 6, 12, 19 and 20 of its report dated 22nd February, 1961, on the accounts for 1959-60.

Primary Education.

2. The Committee wishes to be informed when the scheme to be made under the provisions of the Teachers’ Superannuation Act, 1928 for ex-gratia payments to certain retired national school teachers has been promulgated.

National Gallery.

3. The Committee notes that a summary catalogue of all the oil paintings in the Gallery is in course of printing, and that all pictures other than oil paintings are registered, but that publication of catalogues will take some time. While the progress towards meeting the Committee’s wishes is not unsatisfactory, it assumes that arrangements will be put in train to keep the registers up-to-date and for regular checks of these records.

Public Works and Buildings.

4. With reference to the question of the preparation of inventories of furniture, etc., in premises occupied by Irish Missions abroad, the Committee trusts that when this work is completed, its suggestion regarding the checking of the inventories, contained in its report dated 6th April, 1960, will be given consideration.

National Development Fund.

5. The Committee notes the information supplied by the Minister for Finance about the outstanding committments of the National Development Fund. It is estimated that £600,000 will be spent on the completion of projects and that one of these will not be completed until 1966. From the point of view of financial control, the Committee doubts the wisdom of financing projects undertaken by Government Departments other than by means of annual votes of the Oireachtas. The National Development Fund Act, 1954, made provision for the winding up of the Fund immediately after 31st March, 1957. It could scarcely have been envisaged that some projects might not be completed until nine years after winding up the Fund. Moreover in a number of cases moneys made available from the Fund have been used to supplement voted moneys; a practice which the Committee regards as objectionable because it causes confusion, makes comparison difficult and may not be conducive to economy. The Committee would go further and ask the Minister to consider whether at the close of the present financial year the unexhausted balance of the fund might be surrendered to the Exchequer leaving the cost of completion of projects to be provided for out of votes of the Oireachtas.

External Affairs.

6. The Committee notes that Accounting Instructions provide that Missions abroad should furnish accounts of receipts and payments for each month to the Department of External Affairs not later than fourteen days after the end of the month to which the account relates. In evidence it was stated that for several reasons these instructions had not been fully complied with, but the Committee understands that there has recently been a marked improvement. The Committee attaches importance to this matter and it expects that in future the Accounting Instructions will be fully observed.

Public Works and Buildings.

7. While the Committee notes the Minister’s statement that the procedure for the enforcement of Government contracts is well defined and has proved satisfactory in practice, it was concerned with unenforceable contracts which had been brought to its attention.

It trusts that the investigations by the Accounting Officer have covered this question and that all current contracts are legally enforceable.

8. The question of stores control at the Central Engineering Workshop is dealt with later in this report.


External Affairs.

9. In the course of the evidence of the Accounting Officer the Committee learned that expenditure on repatriation is charged to a suspense account in the first instance and that it only falls as a charge on the vote when efforts to obtain recovery have failed. In the year under review the relatively small sum of £12 fell to be written off as irrecoverable, but the Committee, in order to ascertain the extent of this service, would like an indication of the amount advanced during the year, the amount recovered and the total amount outstanding at 31st March, 1961.

10. The Committee notes a tendency for expenditure on official entertainment to increase, and from the evidence of the Accounting Officer it has deduced that there may be doubts as to the scope of official hospitality. From its nature such expenditure needs to be carefully watched. The Committee would accordingly be glad to learn that definite regulations covering such expenditure have been drawn up and it would expect that any departure from them would be brought to its notice. The Committee also wishes that details of the major items of expenditure included in the charge to the vote should in future be furnished with the Appropriation Account.

Public Works and Buildings.

11. Previous Committee of Public Accounts commented on the store accounting system and the question of surplus stocks of spare parts at the Central Engineering Workshops, Inchicore. In its report dated 19th February, 1958, the Committee referred to the existence of two independent sets of store records and an investigation was promised. It would like to know the outcome of this investigation.

12. Surplus spare parts of a book value of £45,200 were sold for £5,400. Other spare parts of a book value of £45,000 were moving slowly. These have been segregated and while some of them may be used the bulk will probably have to be sold or otherwise disposed of. The need to acquire extensive plant and adequate stocks of spare parts to service machines arose the Committee has been informed just following the end of the second World War when market conditions were uncertain. The selection of spares was a difficult problem owing to the variety of machines and wartime developments and improvements. The Korean War gave rise to further uncertainties and substantial purchases of reserve stocks were made to guard against a disruption of the programme of arterial drainage works if machines had to be idle for want of spare parts. While this explanation appears to the Committee to be not unreasonable, it felt that another reason for the excessive purchases of spare parts was the lack of experience of the Commissioners’ staff in planning requirements. The Committee is pleased to note that major changes have been made in the organisation of the Workshop and stores, especially in the sphere of purchasing and material control and that it is expected that these will, when fully implemented, prevent a recurrence of unnecessary purchases. It trusts that the new arrangements will prove effective. The Committee wishes to be kept informed of developments regarding the disposal of the slow-moving spare parts valued at £45,000.

Qn. 114. Appendix X.

13. The Committee suggested in its report dated 13th June, 1957 that, in order to reduce the volume of accounting, trivial receipts should be accounted for as appropriations in aid instead of as extra receipts payable to the Exchequer. In the year under review it notes that the account of the vote for Public Works and Buildings shows receipts from the sale of property under both Appropriations in Aid and Extra Exchequer Receipts. The Accounting Officer explained that during the year it was decided to appropriate in aid of the vote all such receipts but that before the change some receipts had been treated as payable to the Exchequer.

When making its suggestion the Committee had in mind only trivial receipts and it did not contemplate any change in the long established practice relating to the proceeds of important sales of property. In order to preserve financial control, the Committee is of the opinion that substantial receipts of the kind in question should be paid into the Exchequer, but it will await the observations of the Minister for Finance on this matter.


14. The economy of continuing to maintain army transport vehicles some of which were twenty years in service and had mileages ranging from 100,000 to 150,000 was brought to the notice of the Committee.

Expenditure varying from £100 to £250 had been incurred on six vehicles and the Accounting Officer explained that the maintenance rather than replacement of such vehicles had been dictated by budgetary considerations. All the vehicles were needed for the service but a programme of replacement had been pursued in recent years and it is intended to step this up in the future. The Committee ventures to suggest that the maintenance costs of all vehicles should be regularly reviewed so that uneconomical expenditure will be avoided.

15. A steel perch which marked the position of a dredged channel used by the Department’s vessels in passing from Haulbowline to Spike Island became defective and was replaced by a concrete perch. The new perch was erected at a cost of £1,440 in a position some fifty feet from the edge of the dredged channel and while it is considered satisfactory it is not as good a mark as the old one. The Committee was informed that liaison between the Department’s representatives and the contractor during the currency of the work was not all that could have been desired and that a Court of Inquiry which investigated this matter found that it would not have been possible to site the perch nearer the edge of the dredged channel. It trusts that steps have been taken to define clearly the responsibilities of the naval and engineering staffs in matters of this kind.

Transport and Power.

16. The total expenditure from voted moneys on construction works at Dublin Airport amounted to £1,943,712 to 31st March, 1961. The Comptroller and Auditor General states in his report that £265,224 was expended by Aer Rianta Teoranta on the construction at the Airport of a hangar for jet aircraft but that this work was financed from sources other than the Exchequer. Aer Rianta Teoranta manages Dublin Airport on behalf of the Department and the Committee learned in evidence that this hangar was urgently required but that technical staff was not available in the Department to plan and supervise the project. Accordingly, Aer Rianta Teoranta had the hangar constructed and financed it by means of a Bank loan. The Committee was informed that the hangar is vested in the Minister for Transport and Power and hired by Aer Rianta Teoranta to other companies, the rents being utilised to pay interest and repay instalments of the loan. While the Committee would be prepared to accept that staff might not have been available in the Department for this work it does not consider this as a valid reason for a departure from the normal financial procedure.

17. The Committee feels that the reference in the Comptroller and Auditor General’s report to a surplus on the Management Account of Dublin Airport, while technically correct, may create an erroneous impression. It suggests that for clarification the amount received from Aer Rianta Teoranta and appropriated in aid of the vote should be described so that there could be no confusion between that amount and the outturn of the financial operations relating to the Airport.


18. The subsidy to manufacturers of home produced superphosphate to enable them to make supplies available on the home market at world prices was based on the difference between the estimated economic ex-factory price, as determined by the Department of Industry and Commerce, and the landed price of imported super-phosphate. After a review of certified financial accounts and manufacturing costings for the 1958-59 season the Department of Industry and Commerce established in April 1960 that the economic ex-factory price had been overstated to the extent of 9s. 6d. per ton and that subsidy amounting to £90,920 had been overissued. The Committee notes that overissues amounting to £86,519 were recovered by 31st March, 1961, and is pleased to learn that it is hoped to avoid such substantial overissues in future by deferring the final determination of the economic price until the commercial accounts of the manufacturers for the subsidy season in question would be available.

19. The question of the relative economy of two methods employed by the Department for the disposal of reactor cows under the Bovine Tuberculosis Eradication Scheme was considered by the Committee. In localities outside the six southern counties, the Department purchased reactor cows from their owners at a valuation and sold them to canning factories under contracts arranged quarterly on the basis of competitive tenders that provided for the cost of transporting the animals to the factories being borne by the contractors. In the six southern counties the owners sold reactors direct to the factories and it was noted that the average price received by them was approximately 3d. per lb. higher than the prices received by the Department. The price differential was explained by the Accounting Officer as being due to two factors. One was the cost of transport which the Department did not know, and the other was a difference in the type or character of the animals purchased on a commercial basis from farmers in the southern counties.

While the Committee appreciates that some animals sold under the Department’s contracts may not have been in the most suitable condition for the meat trade, it would have expected that the Department should be in a position to assess the cost of transport to the factories. The differential of 3d. per lb. is substantial in the context of the overall expenditure on compensation and in the absence of information regarding transport costs the Committee finds it difficult to judge whether the existing contracts between the Department and the canning firms are really competitive.


20. A mobile workshop valued at £4,600 was transferred from the Department of Agriculture in September, 1955, for the purpose of servicing the Forestry Division’s mechanical fleet.

It appears that the workshop was not used by the Forestry Division since it was acquired and that it is now planned in accordance with the recommendation of an industrial consultant to continue to have the fleet serviced by commercial contractors.

The Committee is perturbed that an item of plant valued at £4,600 should remain idle for over six years and that the advice of consultants regarding the use of the workshop was only sought five years after it had been acquired. The Committee trusts that there will be no avoidable delay in disposing of the workshop.


21. An Bord Iascaigh Mhara was paid £38,230 in recoupment of expenditure incurred by it on the purchase of a fish meal and fish oil factory at Killybegs, Co. Donegal. The Committee learned that this factory had been built by a company with the aid of a State grant of £59,000 but that the company went into liquidation because of a scarcity of raw materials.

It appears that the factory has been leased by An Bord Iascaigh Mhara to a Danish firm and is now operating with a fair measure of success. Almost £100,000 has been invested by the State in this project and the Committee desires to be informed whether the leasehold rent is payable to the State.


22. The Committee had under consideration the accounts of funds administered by this Department under various bequests and trusts. As the audit of the Accounts by the Comptroller and Auditor General ensures that the terms of the bequests, etc., are complied with, it is scarcely necessary to repeat these details annually at the head of each Account. It is also felt that the Accounts themselves could be summarised into two simple statements of Capital and Income without losing very much of the details at present available.

Posts and Telegraphs.

23. Sums charged in the account under Losses by Default, Accident, etc., include the face value of commemoration, etc., stamps presented to various bodies. The Committee felt that a misleading impression was being created because it considered that no real loss was involved. It is pleased to be informed that, in future, such presentations of stamps will be accounted for by way of an adjustment in the postage stamp account instead of by a charge to the Losses subhead.

24. In paragraph 12 of its Report on the Accounts for 1958-59 the Committee commented on the inadequacy of the information sometimes given in Explanatory Notes appended to Appropriation Accounts. In the year under review, because of the unsatisfactory nature of some of the explanations on this vote of the causes of variation between Expenditure and Grant it was necessary to ask the Accounting Officer, in the course of his evidence, to amplify them. The Committee wishes to reiterate that it is important that explanatory notes should deal adequately with such matters as require explanation and it trusts that it will not again be necessary to refer to this subject.

25. Reference was made in the Report on the 1959-60 Accounts to defalcations, mainly of Post Office Savings Bank moneys, at sub-offices and to the setting up of a Departmental Committee to ascertain whether more effective measures could be devised to prevent such irregularities. In the account under review the losses included an item of £7,252 misappropriated, apparently over a number of years, at a sub-office. The Committee appreciates that, as stated in evidence, the defalcations were facilitated by the neglect of depositors to carry out the Department’s instructions in regard to the custody of their savings bank deposit books and that undue pressure on depositors to secure compliance with instructions might have undesirable repercussions. It is perturbed, however, to find that the sub-postmistress in a small village was able to misappropriate such a large sum and that the irregularity was not discovered at an earlier stage. It trusts that as a result of the Departmental inquiry a solution to the problem of the control of Savings Bank moneys at local offices will be found without delay.

26. It had not been possible in the past to ascertain, in time for inclusion in the annual accounts of the Post Office Savings Bank, precise figures for the interest paid and credited to depositors. The Committee referred to this matter in a previous report and is accordingly pleased to learn that the introduction of a mechanised accounting system enabled firm figures to be included in the 1961 accounts. It also has learned with satisfaction that the new system has produced economies worth £50,000 a year over the cost of the equipment, mainly through the release of staff for employment in other branches of the Department. The Committee wonders whether the mechanised accounting system might be employed in other directions with similarly satisfactory results.

(Signed) DENIS F. JONES,


5th September, 1962.