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

REPORT

PART I-GENERAL OBSERVATIONS.

MINUTE OF MINISTER FOR FINANCE DATED 30th JANUARY, 1963.

1. The Committee will await the further observations of the Minister for Finance on paragraphs 3, 4, 12 and 15 of its report dated 22nd February, 1961, on the accounts for the year ended 31st March, 1960 and on paragraph 25 of its report dated 5th September, 1962.

National Development Fund.

2. The Committee notes that the Minister agrees that, in general, projects undertaken by Government Departments should be financed by means of annual votes of the Oireachtas. It is of course aware that the National Development Fund was established by legislation to finance projects which in the opinion of the Minister were of a public character and in the national interest. But it is considered that too wide an interpretation has been given to the provisions of section 7 of the National Development Fund Act, 1954, regarding the outstanding liabilities of the Fund at 31st March, 1957.

3. From the evidence of the Accounting Officer subsequent to the Minister’s minute it appears that liabilities at 31st March, 1957, had been understood to cover commitments for projects that had not commenced by that date. In the opinion of the Committee this has probably been the main cause of the delay in winding up the Fund. Provided that the scope of projects in progress will not be extended and that no new commitments will be entered into, the Committee is prepared to concur with the Minister’s view that the Fund should be wound up in the ordinary way.

External Affairs.

Appendix XXXVIII.

4. The Committee notes the information supplied regarding advances for the repatriation of destitute Irish persons abroad. A balance of £225 is shown as outstanding in respect of advances made during 1960-61 and £135 in respect of 1961-62. To enable the Committee to review the position of advances from voted moneys it recommends that Appropriation Accounts generally should include statements of all advances outstanding at the end of each year.

5. The Committee is pleased to note that expenditure on official entertainment is carefully watched and it agrees with the Minister’s views as to the occasions for such entertainment. It appears that in the official accounts of other countries the occasions on which entertainment was provided are shown in broad detail giving the cost in each case. The Committee is prepared to concede that there might be occasions when the publication of details could cause embarrassment in individual cases but it would like that this question should be further examined.

Agriculture.

6. The Committee notes that the assessed cost of the transport of reactor cows averaged ·87d. per lb. deadweight, and it agrees that this was not the most significant factor in accounting for the differential of 3d. per lb. between the average price received by the Department and that obtained by owners in the six southern counties who sold direct to the meat canning factories. The differential remains quite substantial even allowing that some of the animals sold by the Department were not in the most suitable condition for the meat trade, that all licensed canneries were invited to tender, and that the highest tenders were accepted. In view of the magnitude of the public expenditure involved in the Bovine Tuberculosis Eradication Scheme the Committee would like to be assured that the prices obtained by the Department were fair and reasonable, and to be informed of the number of firms invited to tender, the number of tenders received and the range of prices tendered.

PART II—PARTICULAR ACCOUNTS.

Health.

Qns. 87-45. Appendix VIII.

7. In recent years the Committee has been considering the health services, the cost of which has risen from £16 million to £19 million between 1958-59 and 1961-62, shared equally between local authorities and the Department of Health. The Health Authorities Act, 1960, provides for the amalgamation of certain health authorities and the Committee was informed in evidence that this has resulted in a considerable improvement in the quality of the services provided. It wondered whether economy had been achieved in the cost of administration, and the Accounting Officer supplied a statement on this aspect of the matter which is appended to this report. It is noted that four new health authorities took the place of 19 separate bodies; but the administrative re-organisation following on the implementation of the provisions of the Act was a gradual process involving detailed negotiations between the Department and the bodies concerned, and between these bodies and staff representatives. It was only during the year 1962 that the effect of the Act on the administrative arrangements of the health authorities could be regarded as having become significant.

Apart from an improvement in services, there had been increases in rates of pay of all categories of staff since the Act of 1960 was brought into force and these considerations made it impossible to assess in terms of money the economies achieved. It is noted that the process of re-organisation is still continuing and the Committee wishes to be informed, in due course, of the economies effected.

8. In the course of evidence it was stated that drugs and medicines were purchased by health authorities through the Combined Purchasing Section of the Department of Local Government and that the cost had been going up in every area because of the emergence of new and more expensive drugs. A statement supplied shows expenditure during the year under review for institutions other than mental hospitals (£435,000), mental hospitals (£172,000) and medicines provided under the general medical service (£454,000).

A comparison of the figures shown in this statement with the overall expenditure on the health services (Appendix VII) discloses some useful information. For institutions (other than mental hospitals) the cost of medicines represents 4·75 per cent. of the overall expenditure; for mental hospitals, 4 per cent.; and for the general medical service 32·3 per cent. In the latter service the expenditure for Dublin was 45·3 per cent. and for Limerick 51·8 per cent. While the Committee recognises that variations in the pattern of outlay as between one health authority and another are inevitable, it would welcome an assurance that the Department operates a system of control which, while allowing a reasonable measure of freedom to the authorities, will enable Dáil Éireann to be assured that the substantial sums made available for the health services are administered wisely and with due regard to economy.

Public Works and Buildings.

9. There have been substantial savings for some years past on the provisions for new works and the Committee questioned the Accounting Officer to ascertain the difficulty in estimating more closely for expenditure on works for other Government Departments. Experience had shown that the Commissioners’ architects had been over optimistic in estimating the progress of works for which they were responsible, and while this had been taken into account by making a global reduction from the total provision, there were still substantial savings. The Committee is pleased to learn that this matter is under examination and it hopes that there will be closer estimation in future.

10. The Comptroller and Auditor General drew attention to a project from the conversion of Templemore Military Barracks into a training centre for Garda recruits at an estimated expenditure of £435,000, including £35,000 for architect’s and quantity surveyor’s fees. He stated that because the Commissioners of Public Works were unable to undertake the planning and supervision of the project the Minister for Justice, with the sanction of the Minister for Finance, engaged an architect and a quantity surveyor on a fee basis, and entered into a contract for the execution of the works. The contractor was selected from eleven builders who were invited to tender on the basis of a schedule of rates for new works and adaptations to be measured and valued during the progress of the works in accordance with approximate Bills of Quantities. The contract was placed in July, 1961, and expenditure amounting to £93,506 to 31st March, 1962, had been charged to the vote for Public Works and Buildings.

In evidence it was stated on behalf of the Comptroller and Auditor General that it had been deemed advisable to draw attention to this matter for two reasons, firstly because the expenditure is borne on this vote while responsibility for the execution of the work rests with the Department of Justice and secondly, because the contract entered into was not on a lump sum basis which is usual in the case of major building works. The Committee also learned that the Commissioners of Public Works had advised the Department of Justice regarding the selection and terms of appointment of the architect and quantity surveyor and also on the terms of the contract agreement.

There has been a great increase in building works for the public service and the Office of Public Works has been unable to keep up with urgent demands. The Committee is not concerned with the policy decision in this case beyond observing that the division of responsibility creates difficulties in the field of financial control.

11. On the question of the fees payable for professional services the Committee considers them to be rather high and it would like to have more details. For works of this magnitude it would have expected that special rates could have been negotiated.

12. Before the Committee could judge the merits of the contract procedure it would require more detail of the scheme of works. It is assumed that there was some general plan which included any necessary new buildings and an estimate of their cost. Information regarding the nature and extent of the supervision of the works and the checking of the accounts would also require to be amplified.

13. In paragraph 12 of its report dated 5th September, 1962, the Committee dealt with the question of surplus stores at the Central Engineering Workshops, Inchicore. From the minute of the Minister for Finance appended to this Report it appears that reorganisation of the spare parts stores has been virtually completed and that reorganisation of the general stock items and raw materials is proceeding and will be finished in a short time. All stocks have been examined and articles of a book value of £75,000 which were slow moving have been segregated. Of these, items valued £17,500 are being retained and items valued £57,500 will be disposed of. The Committee wishes to be informed of the outcome.

14. The Committee would like to be informed when all the inventories of furniture, etc., in embassies and legations abroad have been received; and of the results of the examination of them by the Office of Public Works.

Office of the Revenue Commissioners.

15. The attention of the Committee was drawn to the extent to which overtime working was resorted to in connection with Income Tax work. Staff was engaged on extra duty for long hours over protracted periods. In two cases extra duty amounted to 30 hours a week, totalling 1,300 hours in the year and the overtime earnings of these officers almost equalled their normal salaries. The Accounting Officer explained that preparations for the introduction of P.A.Y.E. including the urgent need to clear as far as possible the large number of cases of Schedule E. arrears involved much extra work which necessitated the employment of all available officers on overtime and the retention of a nucleus of experienced officers on more or less continuous overtime. The undesirability of recruiting additional staff who would become redundant in a comparatively short time and the lack of accommodation for such staff left no option to the course that was adopted. The Accounting Officer admitted that overtime working had been excessive and mentioned that, apart from the two extreme cases referred to, 47 officers had received in the year overtime pay equal to three-fourths of their salary. He indicated that further recourse to extensive overtime working would be required prior to the introduction of an electronic computer but that arrangements would be made to ensure that overtime working by any officer would be strictly limited.

The Committee appreciates the difficulties which arose in part from the commendably prompt implementation of the decision to bring the P.A.Y.E. scheme into operation. But it trusts that the Commissioners will find it possible to restrict the amount of overtime worked and to revert to the normal hours of duty at an early date.

16. Reference was made in the reports on the accounts for 1957-58 and 1958-59 to the risk of an erroneous impression of the magnitude of arrears of taxes being created by the statement of outstanding assessments published in the Report of the Comptroller and Auditor General.

The Committee returned to this subject during the year under review and while some improvement in the presentation of this statement has been made as a result of its suggestions, it feels there is still room for misunderstanding. The Committee is very pleased with the progress made in the collection of arrears and for this reason it would like the Revenue Commissioners in consultation with the Comptroller and Auditor General to examine the possibility of improving the form of the statement in question in order to differentiate between provisional assessments which are subject to reduction and final assessments.

Garda Síochána.

17. The Comptroller and Auditor General drew attention to payments made, under the provisions of the Garda Síochána Allowances Order, 1958, of subsistence allowances to members of the Force for periods they appeared to have spent in their homes. Although such payments are permissible under the Order, he considered them to be contrary to the general intention that subsistence allowance should cover only extra expenses necessarily incurred on the public service. In reply to inquiries regarding a payment of £67 10s. 0d. the Accounting Officer stated that he agreed with the Comptroller and Auditor General’s contention, and that he proposed to give consideration to an appropriate amendment of the allowances Order with a view to preventing such payments in future; meantime claims in similar circumstances would be resisted. In evidence, however, the Accounting Officer stated that he had modified his views and at this stage he would prefer to handle the matter administratively because he thought that any amendment of the Allowances Order would fall to be dealt with under the Garda Síochána Conciliation and Arbitration Scheme which is a long drawn out, cumbersome and expensive procedure. He said that the number of cases of the kind in question were few and he felt that the matter could be adjusted without changing the Order. He admitted that it would be contrary to the law to resist a claim but he felt that they could be avoided by ensuring that the circumstances would not arise in future.

The Committee has given this matter careful consideration and it has come to the conclusion that it would not be proper to allow a defect to continue in the provisions of a financial regulation. It accordingly recommends that the Order be amended.

Prisons.

Qn. 183; Appendix XVIII.

18. A statement has been furnished showing the average cost of maintaining a prisoner in Mountjoy Prison (£432) and Portlaoise Prison (£502) for the year 1961-62. This includes food, clothing, accommodation and staff. These costs seem to be rather high and the Committee wonders to what extent they are affected by the employment of prisoners so as to lessen the cost to the Exchequer of their maintenance.

The Committee has examined the statements, appended to the Appropriation Accounts, of the manufacturing accounts of the prisons. It notes that the turnover for 1959-60 was £24,502 and the profit £3,367; for 1960-61, turnover £24,957, profit £3,223, and for 1961-62, turnover £30,748, profit £3,331. In the latter year there has been a significant fall in the profit ratio and the Committee wishes to receive an explanation.

Local Government.

19. The Committee notes that £100 was expended on the purchase of shares in the National Building Agency Limited which are registered in the name of the Minister for Finance or his nominees. Where shares paid for out of moneys provided by the Oireachtas are not recorded in the annual Finance Accounts, the Committee considers that particulars of such shares held at the end of a financial year should be noted in the relevant Appropriation Account.

Secondary Education.

20. The Comptroller and Auditor General drew attention to certain agreements made by the Department with a firm of publishers for the publication of text books for schools conducting courses through the medium of Irish. The agreements provide for advances to the publishers towards the cost of production and require them to pay to the Department any grants made available from the Science and Art Vote through Bord na Leabhar Gaeilge in respect of the books in question and to refund the balance of the advances by half yearly instalments equal to 20 per cent. of the amount realised on sales. £9,382 was advanced up to 31st March, 1962, in respect of agreements relating to fourteen books ten of which had been published. £5,530 was repaid but the publishers were in arrears and the Committee learned from the Accounting Officer that steps were being taken to recover the amount due. He was unable to give an indication when the four outstanding text books would be published. The Committee wishes to be kept informed of developments.

Lands.

Qns. 285-301; Appendix XXI.

21. Arising out of the Report of the Comptroller and Auditor General, the question of the relative merits of building Land Commission houses and outoffices under contract or by direct labour was considered by the Committee. A tender received from a building contractor in April, 1959, for the erection of six dwelling houses and twelve outoffices for the sum of £9,120 was not accepted because the Land Commission considered that the tenderer would not be able to undertake the job immediately. Other tenders were also found to be unacceptable for various reasons. It appeared that builders found this type of work unattractive compared with that offered by private enterprise.

The Land Commission then decided to carry out the project by direct labour and the work was completed in February, 1962, at a cost of £11,971. It was stated in evidence that there had been a number of difficulties in getting the work started and that it commenced in December, 1959 and was effectively completed in May, 1961. The work had to be carried out in a locality about 8 miles from Dublin and the unit cost of approximately £2,000 was considered by the Land Commission as quite reasonable.

The Accounting Officer stated that building by direct labour has advantages particularly when completion of the work can be arranged to permit migrants or tenants to obtain possession of their holdings at the most suitable time for the commencement of farming operations. But considerable difficulty is experienced in the recruitment, in competition with contractors, of a competent labour force; and large scale direct labour projects necessitate bulk buying of materials and a central stores organisation.

Because of the present boom in the building industry, the Committee appreciates the difficulties of the Land Commission in getting work done by contract. It is pleased to note, from a statement recently supplied by the Accounting Officer, that the direct labour building techniques have been under examination by a firm of consultants, with a view to increasing productivity, through incentive bonus schemes, etc. Information regarding the outcome of this examination will be awaited with interest.

Forestry.

Qns. 334-337; Appendix XXII.

22. In evidence the Committee was told that trading accounts were kept in respect of the two sawmills at Cong and Dundrum (Co. Tipperary) and at its request copies of the accounts for the three years to 31st March, 1962, together with an explanatory note have been supplied. Trading results from the Cong Mills are satisfactory, but those for Dundrum are disappointing. The Committee trusts that its interest in this matter will expedite the investigation of all possible means of making the industry at Dundrum viable. While it is appreciated that these sawmills need not necessarily be operated for profit, the Committee is of the opinion that taking one year with another they should at least break even. It is noted that the accounts do not provide evidence of the capital employed or for interest thereon. The Committee regard the institution and business-like compilation of trading accounts as of the greatest importance in affording an effective instrument to bring about efficiency and economy and it suggests that such accounts should be prepared annually and appended to the Appropriation Account.

23. A note in the Appropriation Account indicates that sums amounting to £419 were written off in respect of damage caused to the Department’s machines arising from interference by unauthorised persons during non-working hours. Included is an item of £414 for extensive damage to a crawler tractor which had been started by three boys, all under 14 years, and allowed to travel out of control up the face of a sand quarry. The youths were brought to justice but the Department was advised that a malicious injuries claim would not succeed. Questioned by the Committee whether such machines could be immobilised when unattended outside working hours, the Accounting Officer stated that he had been informed that there was no way of completely immobilising them, but that he would have the possibilities further examined. Apart from the damage to the machines, the Committee is perturbed at the obvious danger of injury to persons and it would appreciate if all possible steps are taken to eliminate this risk.

Roinn na Gaeltachta.

24. Contracts were placed in 1959 for the erection of thirty-two aluminium framed glasshouses in Connemara and South Mayo at a cost of £29,636. Heating in these houses was provided for under another contract at a cost of £7,765 and boilers for the heating plants were supplied at a cost of £4,768. When the houses were virtually completed they sustained considerable damage as a result of an exceptionally severe storm in September, 1961. In his report the Comptroller and Auditor General stated that the question of rehabilitation and completion was the subject of discussion between the contractors and the Office of Public Works who acted as agents for Roinn na Gaeltachta on the project.

It was decided that the houses could not be economically repaired and a settlement was negotiated with the contractors who erected the houses whereby their contracts were regarded as completed and they agreed to forego £3,000 of the sums due to them by the Office of Public Works. Payments made in respect of the project amounted to £39,837.

Appendix XXIII.

To supplement the oral evidence of the Accounting Officer the Committee decided to formulate a number of written questions which with his replies are appended to this report.

The Committee is aware that formerly the specification for glasshouses erected under the Glasshouse Scheme provided for timber frames and it appears that this was the first occasion on which aluminium frames were specified. It occurs to the Committee that the professional officers of the Office of Public Works would have had very little practical experience of the performance of aluminium frames erected in exposed conditions in the west of Ireland; and that accordingly it might have been more satisfactory to have experimented with a pilot scheme.

25. On several occasions in recent years previous Committees of Public Accounts have commented on defects in contract agreements. It is disturbing to note that the Commissioners of Public Works were advised that they could not enforce the terms of these contracts. The loss to public funds is substantial and when this has been finally determined the Committee wishes to be informed.

Agriculture.

26. The Committee observed that the cost of salaries, wages, allowances and travelling expenses incurred in administering the Land Project is high in relation to the grants paid. It was told that by its nature the project requires a very considerable outdoor staff and that it is a question of balancing between economy in staff and ensuring that the field work goes ahead efficiently and is properly carried out. To enable the Committee to obtain a better view of the volume of work performed, it would like to know the number of grants certified for payment in each of the years 1959-60 to 1961-62 and the approximate number and grades of outdoor staff continuously employed for each of these years.

Qns. 386-389; Appendix XXV.

27. In the course of evidence regarding the increase in the rate of loss on the purchase and sale of cow reactors by the Department under the Bovine Tuberculosis Eradication Scheme in the years 1959-60 and 1960-61 as compared with earlier years the previous Committee of Public Accounts was informed that supervising agricultural officers had been appointed to all district offices to ensure that the valuations for the purchase of reactors would be keen and uniform. The average loss incurred by the Department on the purchase and sale of cow reactors was assessed at £29 ls. 8d. for 1961-62 compared with £28 ls. 4d. for 1960-61. The Committee is concerned about the trend of increasing losses and it wonders whether anything further can be done to minimise the burden on public funds.

Qns. 396-397; Appendix XXVI.

28. As stated in the Report of the Comptroller and Auditor General, the guarantee payments, introduced in July, 1960, in respect of exports of uncertificated fat cattle continued during the year. Payments to exporters varied weekly in relation to the level of British guarantee payments. A rate of 13s. 6d. per live cwt. on eligible fat cattle in early April, 1961, increased to 44s. per live cwt. towards mid July. But from 31st July, 1961 the guarantee was limited to a maximum of 20s. per live cwt. and from the end of September the rate payable was below this maximum. Corresponding guarantee payments were also made in respect of carcase beef. The total payments in the year amounted to £4,212,446 compared with £265,590 in the previous year. In evidence the Committee was told that there were serious falls in the price of cattle and beef on the British market during mid 1961 and that the scheme of guarantee payments had had an appreciable effect in preventing a catastrophic decline in farmers’ prices at home. Owing to the enormous cost to the Exchequer it was decided to limit the guarantee payments from the end of July, 1961. The scheme terminated on 31st March, 1962. At its request the Committee has been supplied with a statement which shows that subsidy payments in excess of 20s. per live cwt. during the period 8th May, 1961 to 31st July, 1961 accounted for £1,151,552 of the charge to the Vote.

29. Attention was drawn to irregularities discovered in claims for guarantee payments by certain exporters. Overpayments amounting to £7,287 had been made, but unpaid claims to a face value of £30,000, approximately, were held by the Department pending investigation. It appeared that when the claim forms showing the particulars of weights, numbers and identification of animals as certified by the Department’s officers were returned to the exporters for presentation at the port of embarkation the certified weights were altered by the exporter or his agent so as to obtain increased subsidy payments. The Committee learned that only a small number of exporters was concerned; that all the cases discovered as a result of the departmental investigation were referred to the Garda authorities for appropriate action; and that no loss to public funds was expected. The Committee would like to be informed of further developments.

Posts and Telegraphs.

Appendix XXVIII.

30. Stores costing £315,000 were taken into stock but not paid for by the end of the year. Payment during the year would have caused an excess on the Vote and the Committee’s uneasiness is not entirely relieved by the Accounting Officer’s explanation which indicates that an appreciable time-lag between receipt of stores and payment for them is accepted as normal. The Committee is concerned that there should not be any undue delay in paying for stores supplied and because of the obvious danger to the system of control of public expenditure it suggests that the Department’s procedures should be reviewed.

Appendix XXIX.

31. The accounts of the Post Office Savings Bank are presented to the Oireachtas in accordance with the Post Office Savings Bank Acts and the Comptroller and Auditor General reports on his examination of the accounts in the course of his Report on the Appropriation Accounts. The Committee feels that it would be facilitated in its work if copies of the Savings Bank accounts were made available in connection with its consideration of the Comptroller and Auditor General’s Report thereon and it would be glad if arrangements were made accordingly.

32. Notwithstanding the adverse comments of previous Committees of Public Accounts in their reports for 1958-59 and 1960-61 in regard to explanatory notes appended to appropriation accounts, the present Committee was compelled to return to the subject when it undertook its examination of this account. The explanations given for the causes of variation between expenditure and grant contained little information and in seven out of ten subheads covered the causes were described as “casual variation”. The Committee’s examination of the Accounting Officer disclosed that in some cases significant divergence from the Estimate details had not been adverted to in the explanations.

The outstanding example is subhead F.—Engineering Stores and Equipment—where there was a saving of £145,511 on a provision of £2,195,000. The Committee learned that when it became apparent during the year there would be a substantial saving on contract work it was decided, with the approval of the Department of Finance, to build up supplies of stores and equipment. The outturn for the year showed a saving of £294,000 on contract work and of £32,000 on Civil Aviation and Meteorological equipment offset by excess expenditure of £181,000 over the provision for the purchase of stores. In addition the Committee noted from the account that stores costing £315,000 had been delivered but not paid for during the year. Obviously the published explanation “mainly due to delays in undertaking or completing certain contract works” is inadequate, particularly in view of the large sums involved. In addition, the Committee feels that it is highly undesirable that such excess expenditure be incurred deliberately without express sanction from Dáil Éireann.

It is largely through the Accounting Officer that Dáil Éireann exercises its control for securing regularity in Departments of State and the power which the Committee possesses of calling on him to defend or explain the reasons for which any particular course was adopted constitutes a very valuable check. The explanatory notes in this account generally fall short of the standard suggested by previous Committees. This Committee trusts that appropriate action will be taken to ensure that adequate notes are appended to appropriation accounts in future and that it will not be necessary to refer again to this subject.

33. The Committee had under consideration a case noted in the Appropriation Account relating to a loss of £228 in respect of a consignment of radio valves from America which was found on delivery to be both short in supply and below specification. In accordance with the terms of the contract which provided for settlement by means of an irrevocable letter of credit payment had been made against the priced invoice and shipped Bills of Lading. The loss could not be recovered as the firm had gone into liquidation.

The Committee is pleased to be informed that in future letters of credit will be opened only with firms of world wide repute or whose bankers guarantee repayment in the event of non-fulfilment of contract.

Defence.

34. A non commissioned officer who was convicted in a civil court on a charge of stealing Army property valued at £663 paid £200 into court and was given a period of six months in which to pay the balance. Although this period expired in December, 1961 no further sum has been received in the Department. The Committee was informed that action taken in the High Court had failed and that the Attorney General was considering an appeal to the Supreme Court. In the unusual circumstances of the case it would like to be advised in due course of the outcome of the legal action.

Qns. 526-531.

35. The Comptroller and Auditor General drew attention to expenditure estimated at £2,674 on the reconstruction of the roof of a workshop built under the supervision of the Corps of Engineers in 1956. The Committee was informed that cracks had occurred in the corrugated asbestos sheets of which the roof was constructed, but that a claim against the manufacturer of the sheets could not succeed because his instructions for fixing them had not been complied with. It seems that these instructions may not have reached the Engineer Officer in charge of the work. In fact it is not possible to say if they were ever received in the Department.

The Committee in its report of 5th September, 1962, commented on the poor liaison between the Engineering staffs and other sections of the Department; the present case emphasises the need for improving the arrangements for recording and circulating technical information within the Department, and it trusts that the necessary action will be taken.

36. Attention was drawn to claims made on Health Authorities by the Department for daily capitation payments in respect of patients in approved military hospitals who were eligible for institutional services under the Health Acts. It is understood that these claims are legally enforceable but one authority questioned the amounts on the ground that the incidence of hospitalisation among soldiers was very much greater than among civilians in its area. As the matter is still under examination the Committee does not wish to comment at this stage but in view of the substantial amount outstanding it trusts that a decision will not be long delayed.

37. The contract procedure of the purchasing departments has been the subject of criticism by the Committee on several occasions in recent years. It was therefore surprised to learn that a standard form of running contract, in use for nearly forty years, for the purchase of foodstuffs for the Army contained an inherent defect which rendered the Department liable for damages to a contractor when no supplies were ordered. It notes with satisfaction that the form has been suitably amended and that other purchasing departments have been informed of the circumstances.

Office of the Minister for Social Welfare.

38. It became evident to the Committee in the course of its examination of the Votes for the Office of the Minister for Social Welfare, Social Insurance and Social Assistance that its work would be facilitated by an amalgamation of these votes. There is a close relationship between the services provided and if the votes were combined it is considered that there would be no diminution of financial control.

Social Insurance.

39. The Social Insurance Fund is an integral part of the financial structure of the social welfare services and it would be of assistance to the Committee if the accounts of this Fund were made available when these services are under investigation.

(Signed) DENIS F. JONES,

Chairman.

11th July, 1963.