Committee Reports > List of Committees > Dáil > 1963 > Committee of Public Accounts > Report - Appropriation Accounts 1961 - 1962

APPENDIX II.

MINUTE OF THE MINISTER FOR FINANCE ON REPORT DATED 5 SEPTEMBER, 1962, OF THE COMMITTEE OF PUBLIC ACCOUNTS.

Paragraph 1—

Following are the further observations of the Minister for Finance on paragraphs 3, 4, 6,1 2, 19 and 20 of the report dated 22 February, 1961, of the Committee of Public Accounts:—

RATES ON GOVERNMENT PROPERTY.

3. Payments for Water Supplies.

Negotiations on the financial terms for the supply of water to State-owned premises are proceeding with certain local authorities. The Committee will be informed of the outcome as regards any past overpayments.

POSTS AND TELEGRAPHS.

4. Erroneous payment by the Post Office Savings Bank.

To date £203 15s. 4d. has been recovered, being repayment in full of the shares received by three of the beneficiaries. Efforts to recover the balance of £203 15s. 3d. from the other three beneficiaries are still proceeding.

19 and 20: The progress made by the Departmental Committee on the safe-guarding of public funds in Sub-Post Offices is described in the Minister’s observations below on paragraph 25 of the Report of the Committee on the Appropriation Accounts for the year 1960/61.

DEFENCE.

6. Provision of adequate fire protection in Army barracks.

Comprehensive Defence Force Regulations (Q. 4—Fire Prevention and Fire Fighting) were promulgated on 30th November, 1961. The measures necessary to implement them are being taken as quickly as possible.

12. Consumption of Electricity.

Installation of separate meters in Men’s Married Quarters has been completed in the Southern and Western Commands and at the Curragh Training Camp. Completion of the work in the Eastern Command is being expedited. Further discussions with the E.S.B. about outstanding matters will be held at an early date and the Committee will be advised of the outcome in due course.

Paragraphs 6, 8, 18, 23.

These paragraphs do not appear to call for comment.

PRIMARY EDUCATION.

Paragraph 2—Promulgation of scheme for ex-gratia payments to certain retired national school teachers.

The scheme in question will be laid before the Houses of the Oireachtas at an early date.

NATIONAL GALLERY.

Paragraph 3—Registration of pictures.

The Minister has noted the Committee’s views about maintaining up-to-date registers of pictures and having regular checks of these records and is making arrangements accordingly with the Department of Education.

PUBLIC WORKS AND BUILDINGS.

Paragraphs 4—Inventories of furniture in Embassies and Legations abroad.

Following on the completion of inventories for the various Mission, the Commissioners of Public Works will arrange for periodic checks by Heads of Missions of the records of valuable furniture and equipment supplied to the Missions, so that any deficiencies will be brought to light. Consideration has been given to the employment of local valuers, but the Minister has come to the conclusion that this course is not likely to prove satisfactory because of the difficulty of securing the services of fully qualified persons. In one case where a local firm was engaged in connection with the preparation of inventories the result left much to be desired because of vagueness of description.

NATIONAL DEVELOPMENT FUND.

Paragraph 5—National Development Fund.

The Minister is in agreement with the Committee that, in general, projects undertaken by Government Departments should be financed by means of annual Votes of the Oireachtas, but considers that circumstances may arise where such a procedure is not the most appropriate. Expenditure from the National Development Fund, whether by Government Departments or otherwise, has the authority of a specific Act of the Oireachtas, the National Development Fund Act, 1954, the moneys for the Fund having been voted in three successive years. While the Act envisaged that the Fund should be wound up as from 31 March, 1957, it was in the sense that no further liabilities should be incurred thereafter and that the amount needed to meet existing commitments should be retained in and paid from the Fund. Though in some instances the discharge of these commitments is taking longer than may have been envisaged, the Minister considers that to reverse procedure at this stage and meet such commitments by way of voting the required moneys would tend to make expenditure on the objects of the Fund rather more difficult to identify and trace. Appended to the Appropriation Accounts for the relevant Votes is a statement of the objects of expenditure from the Fund during the year of account and of the amount expended on each object. As well, in the annual report of the Comptroller and Auditor General on the Appropriation Accounts, there is a statement showing the objects of expenditure from the time the Fund was set up and the cumulative total spent on each object. A comprehensive picture of expenditure is therefore available. It is not clear to the Minister that greater economy would follow the voting of moneys for the remaining commitments and, on balance, he considers it preferable to allow the Fund to be would up in the ordinary way.

PUBLIC WORKS AND BUILDINGS.

Paragraph 7—Enforcement of Contracts.

The Minister is advised that the investigations into procedures referred to by the Accounting Officer included the question of contracts and their enforceability and that the procedure in operation is designed to ensure that all contracts placed are legally enforceable.

EXTERNAL AFFAIRS.

Paragraph 9—Repatriation of destitute Irish persons abroad.

The total of advances to destitute persons during the year ended 31st March, 1961, was £988 14s. Of this amount, £754 13s. 5d. had been recovered, and £9 1s. charged to the Vote, at the close of the financial year, leaving a balance outstanding of £224 19s. 7d. The sum of £12 written off as irrecoverable related to advances made in previous years.

Paragraph 10—Expenditure on official entertainment.

The increase in expenditure on official entertainment in recent years is due to the number of foreign statesmen and other distinguished visitors to Ireland, to increased participation by this country in international organisations, conferences and projects, as well as to national celebrations such as the Patrician Year, and to the success of the efforts of Government Departments, Bord Fáilte and other State bodies and non-governmental organisations in having Ireland accepted as a venue for international conferences. The Subhead for official entertainment in the Vote for External Affairs is intended to meet expenditure arising from entertainment given officially by or on behalf of the Government, Government Departments or Offices. Expenditure from the Subhead may be incurred only under authority (delegated or specific) of the Minister and is carefully watched both by him and by the Minister for External Affairs. The Minister considers that it would not be feasible to draw up regulations which would be sufficiently detailed to cover all the various circumstances in which official entertainment might properly be extended to distinguished persons. Furthermore, he considers that it would not be desirable to disclose particulars of the expenditure in an individual case as it might cause embarrassment to the guest concerned.

PUBLIC WORKS AND BUILDINGS.

Paragraph 11—Store records at the Central Engineering Workshop.

A joint investigation of the independent sets of store records at the Central Engineering Workshop was made by officers of the Commissioners of Public Works and of the Comptroller and Auditor General. The officers who made the investigation recommended that only one set of records should be retained. This recommendation was subsequently endorsed by the consultants and accepted by the Accounting Officer. Since the 1st November, 1961, only one set of records has been maintained.

Paragraph 12—Disposal of spare parts.

The store stocks at the Central Engineering Workshop comprise spare parts for machinery, general stock items and raw materials. Reorganisation of the spare parts stores has been virtually completed. Reorganisation of the general stock items and raw materials is proceeding and will probably be completed by 31st March, 1963. Inclusive of the stocks to the value of £45,000 referred to by the Committee, up to the 30th September, 1962, slow moving or redundant stocks from all three sections of the stores to a book value of £75,000 (calculated at the prices for new items) were segregated. The segregated items were considered by a board of survey set up for the purpose and on their recommendation items to a value of £17,500 approximately, which are likely to be required within a reasonable period, were returned to stores. Steps have been taken to dispose of the remaining segregated items valued at £57,500 and it is expected that the greater part of them will be disposed of by the 31st March, 1963. The further stocks segregated as slow moving or redundant since the 30th September, 1962, will be considered by the board of survey and retained or disposed of in the light of the board’s recommendations. The Committee will be advised of the result.

Paragraph 13—Sales of Property.

Appropriations-in-Aid must be estimated with at least as much accuracy as expenditure subheads because over-estimation would reduce the total provision available for expenditure under the Vote, while under-estimation would result in the excess receipts being surrendered to the Exchequer since they cannot be transferred by virement to another Subhead. Accordingly the Minister considers that financial control over receipts which are treated as Appropriations-in-Aid is more effective than if they were paid directly into the Exchequer and in general he favours this treatment, wherever practicable, of receipts which are a normal feature of a Vote. The degree of financial control in Appropriations-in-Aid is independent of the size of the amount appropriated.

In the light of the foregoing statements, the Minister trusts that the Committee will concur in the view that, as sales of property are a normal feature of the operations financed from the Vote for Public Works and Buildings, all the receipts should continue to be treated as Appropriations-in-Aid.

DEFENCE.

Paragraph 14—Army transport.

The Committee’s suggestion that the maintenance costs of all Army transport vehicles should be regularly reviewed has been noted. The Minister has been advised that this is already being done with a view to avoiding uneconomical expenditure on repairs, etc.

Paragraph 15—Divided responsibility in contracts.

In any future case of divided responsibility for ensuring the satisfactory completion of a contract, steps will be taken by the Department of Defence to define clearly to those concerned their individual responsibilities in the matter.

TRANSPORT AND POWER.

Paragraph 16—Jet Hangar at Dublin Airport.

While the leasing of sites at the airports to airline and other commercial concerns for the erection by them of hangars and specialised installations is not unusual, the financial and other arrangements for the provision of a jet hangar at Dublin Airport were regarded as an exceptional measure.

The jet hanger is a highly specialised building and its layout, construction and equipment against a time limit involved consultation with aircraft manufacturers and specialist advisory services. During the period within which the hangar had to be completed the technical staff of the Department of Transport and Power were engaged in a full programme of other urgent work.

Aer Rianta’s proposal to finance the construction of the jet hangar by borrowing from a bank by way of a 30-year loan secured by debentures guaranteed by the Minister for Finance was rendered financially attractive by the circumstances that the loan carried interest at a preferential rate and was a self-contained transaction, the annual repayments of principal and interest being met from the rental for the hangar. The method of financing the project represented, in fact, the most economic basis for constructing the hangar.

Paragraph 17—Surplus on the Dublin Airport Management Account.

In order to meet the wishes of the Committee, the Minister has arranged that, beginning with the year 1962/63, the Appropriation Accounts for the Department of Transport and Power will, in relation to surpluses on the Dublin Airport Management Account, include an explanatory note similar to that which has appeared for some years past in the Volume of Estimates, namely, “The Dublin Airport Management Account does not reflect the full cost of operating Dublin Airport since no account is taken of such factors as Meteorological and Radio Services, Air Traffic Control, Interest on Capital, etc.”

AGRICULTURE.

Paragraph 19—Disposal of reactor cows.

The Minister understands that the assessed cost of transport averages 0.87d. per lb. deadweight. This is one element in the differential in favour of the owners in the southern counties who sell direct to the factories. A more important factor, however, is that farmers in the South were able in the period under review to use their discretion in choosing their own time to dispose of reactor cows. Normally they sell cows barren and dry in the most suitable condition for the meat trade. Conditions were, however, quite different in the Clearance Areas outside the South. In these Areas once cows are identified as reactors the primary consideration is their removal from farms regardless of their suitability for the factories. In these circumstances, the Department of Agriculture is compelled to sell cows in full milk to the processors at prices which are comparatively low in view of the relative unsuitability of such animals for the beef trade.

In order to safeguard the store cattle export trade it has been essential that the removal and slaughter of reactors from herds in areas outside the South should be carried out speedily and systematically under the supervision of officers of the Department of Agriculture. All licensed canneries are invited to tender for the reactors being disposed of by the Department of Agriculture and the highest tenders are accepted.

FORESTRY.

Paragraph 20—Transfer of Mobile Workshop.

The transfer of the workshop from the Department of Agriculture to the Forestry Division was prompted by the expectation that the unit, which was surplus to Department of Agriculture requirements and could have been sold only at considerable loss, could be utilised as part of the reorganisation of servicing arrangements for field equipment which was being contemplated at the time by the Forestry Division. There was no expectation of immediate utilisation of the workshop. During a period of years of experimental reliance on servicing by suppliers and recourse to the Central Engineering Workshop of the Office of Public Works no decision was possible as to whether the commissioning of the workshop would be economic or worthwhile. In the meantime it had been decided in May, 1957 to employ a firm of industrial consultants to advise on labour and machinery organisation questions generally and it was considered proper to defer any decision in regard to the workshop until the consultant was in a position to devote attention to questions of plant servicing. Priority was given to labour questions where the main financial interests were at stake and the consultant was unable to commence work on machinery questions until the beginning of 1961.

Steps were taken to dispose of the workshop as soon as it was established that disposal was the proper course. It was transferred to the Department of Defence on 2nd June, 1962.

FISHERIES.

Paragraph 21—Leasehold rent of factory at Killybegs, Co. Donegal.

The leasehold rent in respect of the factory at Killybegs, is payable to An Bord Iascaigh Mhara but the State indirectly derives the benefit as the Board receives a grant-in-aid from the Fisheries Vote and any independent income of the Board reduces its dependence on the State for financial assistance.

EDUCATION.

Paragraph 22—Accounts of Funds.

The Committee’s suggestions appear to be acceptable but the Department of Education is examining the terms of each of the schemes involved to ensure that no obligation exists to give the information at present shown in the relevant Account. The Committee will be advised in due course of the results of this examination.

POSTS AND TELEGRAPHS.

Paragraph 24—Explanatory Notes to Appropriation Accounts.

Accounting Officers are being requested to ensure that Explanatory Notes to Appropriation Accounts, where required, will be adequate.

Paragraph 25—Misappropriation of moneys at Sub-Post Offices.

The Departmental Committee has not yet made its final report. However, its interim report makes it clear that some risk of misappropriations at sub-offices is unavoidable under the sub-office system. An essential feature of that system is that sub-postmasters are free from direct supervision, and Departmental control has to be exercised through the examination of accounts and periodic inspections. A sub-postmaster who betrays his trust is in a position to falsify accounts, or to take other steps to conceal his defalcations. Furthermore, if a depositor neglects to ensure that deposits are properly recorded in his Savings Bank deposit book or to send it annually to headquarters for examination, as he is requested to do, there are no means whereby, if the sub-postmaster does not record the transaction, the Department can know about it or discover failure on his part to remit the deposit to headquarters. In that event, the ultimate discovery may be very much delayed.

The sub-office system enables Post Office services to be provided at a reasonable cost at about 2,200 centres, and the losses that occur are very small in relation to the amount of money handled.

As indicated in the Minister’s Minute of 24 November, 1961, the Committee will be informed of the outcome of the Departmental examination as soon as it is completed.

Paragraph 26—Employment of mechanised accounting system.

The mechanised accounting system and its associated procedures were specially designed for Savings Bank purposes. The organisation and methods of work in the Department generally are under constant scrutiny, and new procedures and machines are introduced whenever opportunities of achieving greater efficiency or economy occur.