Committee Reports::Report - Appropriation Accounts 1962 - 1963::12 November, 1964::Report




1. The Committee will await the further observations of the Minister for Finance on paragraphs 3, 4 and 12 of its report dated 22nd February, 1961 on the accounts for the year ended 31st March, 1960, on paragraph 25 of its report dated 5th September, 1962 on the accounts for the year ended 31st March, 1961 and on paragraphs 20 and 36 of its report dated 11th July, 1963 on the accounts for the year ended 31st March, 1962.

2. Paragraphs 6 and 27, 10 to 12, 24 and 30 of its report dated 11th July, 1963 are dealt with later in this report.


3. The Committee notes that the Minister remains convinced that the publication of details of expenditure on entertainment might prove an embarrassment to distinguished guests and recognises that this might be true in a very small number of cases where foreign visitors are concerned. The Committee, however, notices from the British Volume of Appropriation Accounts that reasonable details are given of expenditure on hospitality, and it trusts that the Minister will be able to go some distance in meeting its views in this matter.


Control of expenditure of health authorities

Pars. 7 and 8.

4. The Committee notes the improvements in the services and the economies which have resulted from the amalgamation of certain health authorities.

5. Generally the control of expenditure exercised by the Department of Health and the audit carried out by the Local Government Auditors should in the opinion of the Committee be sufficient to ensure economical administration by the health authorities. It is satisfactory to note that two of the larger authorities have established central pharmacies with a view to economy in the purchase of supplies and efficiency in the control of stocks. The Committee will be interested to learn whether this arrangement attains the desired ends.

6. The rise in the cost of drugs and medicines and the increase in recent years in the proportion of health expenditure attributable to these items has been noted. The Committee would like to be informed whether there is a pharmacy attached to each health authority hospital or whether in some cases prescriptions for out-patients are dispensed by retail chemists.


Disposal of spare parts

7. The Committee notes the final results from the disposal of surplus and obsolete stores which accumulated over a number of years at the central engineering workshop. The losses to public funds have been substantial, but the Committee trusts that useful lessons have been learned about the importance of careful forward planning for the purchase of stores having regard to changes in design and improvements in performance of modern plant and equipment.

Inventories of furniture in Embassies and Legations abroad

8. The progress made has been noted and the Committee will await the results of the examination of the inventories by the Office of Public Works.


Payment of subsistence allowances

9. The Committee is pleased to note the acceptance of its view that the relevant regulations should be amended so as to make it clear that subsistence allowance is not payable for periods that claimants spend in their homes. It trusts that there will be no delay in promulgating the necessary amendment to the regulations.


10. The Committee will be interested to learn of the conclusions reached by the Land Commission as a result of its examination of the report of the consultant engaged on the experimental application of an incentive bonus scheme to the operatives on a direct labour building project.


Number and grades of outdoor staff engaged on the land project

11. From the information supplied to it, the Committee finds that the average number of grant payments in each month issued for each officer, grade 6, employed, fell from 5.6 for 1959-60 to 5.3 for 1961-62. It notes that this does not give a full picture of the volume of work performed by the outdoor staff because they do other work arising out of the Fertilisers Scheme and for local authorities. Nevertheless the Committee wonders whether there is a reasonable throughput of work, and it suggests that economies might be achieved by a re-examination of field supervision procedures.

Irregularities in claims for guarantee payments by certain exporters

12. The Committee notes that legal advice indicated that there did not appear to be sufficient evidence to warrant the initiation of proceedings in the case of seven of these exporters, and that the question of proceedings against the remaining two is still under examination. When this matter is finally disposed of, the Committee would like to be informed of the outcome.


Explanatory Notes to Appropriation Accounts

13. The Committee is pleased to note that every effort will be made to meet its wishes in the matter of explanatory notes.

It is assumed that the Minister agrees that the published explanation in the case of Subhead F.—Engineering Stores and Equipment— was misleading and grossly inadequate. In the light of the subsequent evidence the Committee felt constrained to make the comments contained in its report.

It is noted that the Department of Posts and Telegraphs sometimes finds it hard to forecast whether a particular work is to be carried out by the Department’s staff, using stores and equipment directly purchased, or by an outside contractor. This is surprising as up to the year under review contract work had been provided for under a separate subhead and the Minister for Finance would have been in a position to exercise some financial control between expenditure on contract works and direct labour projects.

For the Estimates in respect of the year under review a previous Committee agreed with the proposal of the Minister for Finance to reduce the number of subheads by amalgamating related headings so as to reduce administrative and printing costs without materially affecting the information furnished in relation to the vote, thus ensuring no lessening of financial control. It is therefore disturbing to observe that in its first year of operation the revised form of the Estimate resulted in fact in a lessening of financial control. The Committee does not wish to upset understandings reached by its predecessors with the Minister for Finance regarding the occasions on which a supplementary estimate should be brought before Dáil Éireann. For that reason it will not press that aspect of the matter. But it is clear that haphazard methods of financial control should be thoroughly investigated and serious consideration given to the introduction of modern techniques of budgetary control on a businesslike basis.


14. The Committee notes that the appeal to the Supreme Court failed. As mentioned in its previous report, a non-commissioned officer who was convicted of stealing Army property valued £663, paid £200 into court and was given a period of six months to pay the balance. Immediately after this period expired an application was made for the arrest of this man but the Committee was told that the court held that the application failed because it should have been made within the six months. It was suggested to the Committee that the court rules are defective and accordingly it would like to know whether amendment is contemplated.



15. A note to the Estimate indicated that six Executive Officers, supernumerary to the establishment, were on special leave with pay while undergoing university training. The Committee was told that this scheme had had the good effect of increasing greatly the number of candidates for Executive Officer appointments, but that the results had been disappointing because some of the successful candidates, who had other scholarships, did not wish to be bound to refund the big sum involved should they fail to come back into the civil service. The Department of Finance has recently withdrawn, the scheme for reconsideration.

The Committee wishes to be informed of the cost of this scheme and also of the number of scholarships awarded, the number of candidates who have returned to the civil service, and the amount of any refunds obtained.


16. Moneys received for services rendered by the Garda Síochána at sporting fixtures, etc., are brought to credit as appropriations in aid of this vote. The Committee was told that the charges for these services go up automatically with the increases in pay. It is noted, however, that the amount received in the year under review was less than that received in the previous year and, while this could be explained by a reduction in the number of occasions, the Committee wishes to be informed whether the charges are fixed by regulation and of the procedures for ensuring that amounts due are recovered.

17. The Committee would like that consideration be given to the question of amplifying the information appended to the appropriation account regarding the Garda Síochána Reward Fund. It notes that the balance of £8,170 held at the end of the year was supplemented by £2,321 held in suspense accounts.


18. £24,290 is charged in this account for the maintenance of 113 prisoners confined in District Mental Hospitals. It is noted that the average daily number of prisoners in prisons for the year under review was 491. A statement furnished by the Accounting Officer, which is appended to this Report, supplies information requested by the Committee regarding prisoners confined in the District Mental Hospitals, and states that the daily average number of patients in the Central Mental Hospital, Dundrum, was 89. The expenses of the latter service which are borne on a separate vote (No. 55) amounted to £60,773. The Committee wishes to know whether there is any overlapping of the services provided for the treatment of mental illness among prisoners and whether greater efficiency and economy could be achieved.


19. The Committee trusts that the importance of the proper classification of expenditure will be impressed on the Health Authorities concerned.

Having regard to the mounting expenditure on the health services in recent years, the Committee inquired whether the Department could forecast a reduction in the foreseeable future. It is pleased to learn that the cost of treatment of tuberculosis continues to decline, and that with advances in medical science and better organisation the number of patients in mental hospitals will go down appreciably, and probably costs will also show a reduction. But in relation to general hospitals, the Department did not see much prospect of a reduction in expenditure because of new techniques in treatment, and rising costs of staff remuneration which was a very important element in the expenditure on this service.

In its Report dated 6th April, 1960, the Committee wondered whether, in the interests of economy and efficiency, cost accounts were kept by the Authorities, and it was furnished with details regarding the precise responsibilities undertaken by the Department of Finance and the Department of Health in controlling expenditure. In reverting to this subject the Committee considers that utilisation of general hospital bed accommodation must be an important factor in the economy of the health service administration. What would be the approximate occupancy ratio in each of the different hospital categories is a question the answer to which would be of considerable interest to the Committee.


20. Attention was drawn by the Comptroller and Auditor General to the fact that stores costing £558,469 out of total purchases amounting to £2,083,534 had not been paid for at 31st March, 1963. A similar point was raised on the 1961-62 accounts, and the Committee in paragraph 30 of its Report dated llth July, 1963, expressed concern about the delay in settling accounts and the substantial carry forward of liabilities in respect of stores delivered. Further evidence from the Accounting Officer that contractors were slow in rendering accounts has rather surprised the Committee. It notes from the minute of the Minister for Finance on its previous report that the Department of Posts and Telegraphs has been reviewing its procedures so as to eliminate undue delay in paying for stores supplied and it trusts that the promise of the Accounting Officer to show substantial improvement in the matter for the year 1963-64 will be fulfilled.


21. Further consideration was given to the questions raised in paragraph 24 of the Committee’s previous report about the aluminium framed glasshouses erected in Connemara and South Mayo which suffered severe storm damage in September, 1961. The reasons why aluminium frames were specified in preference to the traditional wooden frames have been noted, but, where expenditure of about £40,000 was involved, the Committee remains of the opinion that a prototype glasshouse with aluminium frames might have been erected as an experiment.

There were twenty damaged houses. Eight have been replaced by new wooden framed glasshouses which have been handed over to those who are participating in the scheme. The sites of the remaining twelve houses are being cleared because the persons concerned were not prepared to go on with the scheme.

One of the difficulties which confronted the Committee in examining this case was that the Accounting Officer’s responsibility was remote from the service in question. Consequently his evidence was less valuable and might not be a safe guide to the Committee in forming conclusions on the points at issue. It is noted that when the net loss to public funds has been finally determined the Committee will be advised.


Appendix XVIII.

22. It is stated in a note to the account that two hundred and seventy-six employees mainly in the Meteorological, Aviation Radio and Air Traffic Control services, received sums varying from £51 to £538 in respect of extra attendance and special duties. A memorandum furnished by the Accounting Officer shows that twenty-nine officers received sums in excess of £200 for either night duty allowance or overtime. It is noted that there were exceptional circumstances necessitating the working of large amounts of overtime by the Radio Service staff.

While the Committee is satisfied with the explanations it has received, it trusts, that because of the danger of inefficiency through fatigue caused by excessive hours of work, every effort will continue to be made to ensure that overtime work by individual officers is strictly limited.


23. £22,000 is charged to the vote in respect of a loss incurred as a result of a trade loan guarantee given in May, 1955, by the Minister for a bank loan to the Slaney Cabinet Works. The original loan was £30,000 but the company failed to meet its obligations and the Minister was called upon to honour his guarantee. Including interest due, £30,218 was paid from the Central Fund to the bank. The Minister appointed a receiver in February, 1959 who kept the business going until January, 1960 when it was sold as a going concern. The total amount realised by the receiver was £20,688, of which £1,307 was required for preferential creditors, and £11,161 for the expenses of running the business, including £3,430 for his fees and outlay. Having regard to the substantial loss to the Exchequer in this case the Committee desires to be furnished with a copy of the receivership account and details of the receiver’s fees and outlay which it considers are rather high. The Committee would also like to know why it took almost twelve months to dispose of the business.


Appendix II. do. XXI.

24. The previous Committee had under consideration questions raised regarding the project for the conversion of Templemore Military Barracks into a training centre for Garda recruits, and it has noted the observations of the Minister for Finance on paragraphs 10, 11 and 12 of its report dated llth July, 1963. For the year under review further evidence disclosed that the original estimated cost for the reconstruction of existing buildings was £282,500 and for the provision of new buildings £102,500. These figures have been revised to £302,200 and £124,300 respectively. It will be seen from Appendix XXI that a large number of additional works were ordered, apparently as after-thoughts, and that these will bring the final cost of the project to about £576,500 plus fees and the cost of furniture.

The Accounting Officer explained that there were consultations between the architects with regard to the necessity for the extra works and that he thought the architects would agree that if they were to achieve what they set out to do these works would have to be carried out. The Committee had assumed that a general plan for the conversion scheme had been prepared in advance. It is, therefore, perturbed that this turned out to be incomplete and that a substantial amount of extra work was necessary. In this contract there was no fixed price from the beginning—it was an open-ended contract with mounting claims under the price variation clause. There is no doubt in the minds of the Committee that fixed price contracts are the correct way to control costs.

25. The Committee was informed that when the work commenced the fees for the architects and quantity surveyors were estimated at £35,000. They have recently been estimated at £60,000 but the ultimate figure is not yet known. The Committee feels that in large contracts of this nature it should be possible to negotiate an agreed fee with the architects and quantity surveyors, and that in this particular case the fees have been inflated by reason of the facts referred to in paragraph 24.

26. In its previous Report the Committee commented on the difficulties created by divided responsibility in the field of financial control. This was again emphasised in the year under review. The evidence of the Accounting Officer made it clear that his responsibility was incomplete and was, therefore, less valuable in forming conclusions on the points at issue.

When final figures for the project are available the Committee shall return to the subject.

27. Drainage schemes undertaken by the Commissioners of Public Works under the provisions of the Arterial Drainage Act, 1945, have in the past been carried out by direct labour, but in the year under review it was decided as an experiment to employ a contractor on an intermediate river scheme. His tender of £35,900 was accepted for specified work in the Owvane catchment area, but following the commencement of the project further bank protection work in excess of that specified in the contract was approved. Expenditure under the contract to 31st March, 1963, amounted to £45,494. The Accounting Officer was questioned about the merits of contracts versus direct labour for this type of work, but he preferred to defer an expression of opinion until further experience is gained from three other jobs which are in progress. The Committee will be interested in the outcome.


28. From the report of the Comptroller and Auditor General the Committee learned that sums recovered in respect of overpayments charged in prior years’ accounts were:—£30,641 in cash credited to appropriations in aid and £5,817 withheld from current entitlements.

Overpayments amounting to £7,166 had been treated as irrecoverable and the overpayments not disposed of by 31st March, 1963, amounted to £65,114. In the year under review 60 individuals had been prosecuted for irregularly obtaining or attempting to obtain social assistance and convictions were secured in 57 cases. In the course of evidence it was revealed that there were no prosecutions in respect of old age pensions overpayments and that civil proceedings were taken to recover where necessary in such cases. The Committee wishes to be informed of the number of cases in which civil proceedings were taken, the amount involved and the amount recovered.


Land Project

29. The Committee was informed that estimates for work under the Land Project are costed at current local costs. The grants payable are limited to two-thirds of the estimated cost subject to a maximum of £30 per statute acre. In the course of evidence it was stated that the average amount of grant per acre has shown on the whole an increasing pattern in recent years as follows:—


£14 16s. 0d.


£14 11s. 0d.


£13 12s. 0d.


£15 4s. 0d.


£16 5s. 0d.



Apart from increases in wage rates which would be a factor in the rise in costs, the Committee notes that the trend from 1960-61 to 1963-64 reflects an increase of about 50% in the overall rates per acre. It wishes to be informed what other factors contributed to this substantial increase.

Bovine Tuberculosis Eradication Scheme.

30. The Comptroller and Auditor General drew attention to a departure from normal practice in competitive tendering for the disposal of reactor cows to canning firms in the quarter ended 31st March, 1963. Joint venture bids, submitted for the various tendering areas of the six southern counties, were not regarded as competitive by the Department but following discussions with the firms an increased price offer was accepted. The Committee was informed that on 1st October, 1962, the Department began to purchase directly the cow reactors which were becoming available in the six southern counties. As a certain identity of quotations was observed in the tenders submitted for the quarter commencing on that date it was decided to reserve the right in the event of equal tenders being submitted for the quarter ending 31st March, 1963, to draw by lot the firms to which the tenders would be awarded. But tenders were submitted on the basis of joint venture bids, that is, for each of the three parts into which the area was divided the tenders received from firms appeared to have been arranged in such a way that each of the firms would get a certain amount of business in some area. This procedure was, however, considered not illegal. The position was discussed in meetings with the firms who represented that from their point of view a highly important development had arisen with the State handling a very large percentage of their raw material which ordinarily they would buy according to normal commercial methods; that a system of competitive tendering might result in some factories closing down because others might secure the bulk of the contracts; and that the price tendered was a fair and reasonable one. As a result of the discussions, however, the firms raised their collective bid by, on the average, about one halfpenny per lb. which was accepted.

Again, the Committee was informed that as the bovine tuberculosis scheme was then at a very critical stage from the point of view of rapid eradication it would not have been possible either to delay or to make no contract as the scheme would have been held up and could conceivably in the long run prove more costly. Also, there was no other market available for these reactor cows except in this particular industry. But the Department felt that the final figure of one halfpenny per lb. extra was rather on the low side.

The Committee has considered the evidence presented and notes the close relationship with ancillary matters previously adverted to in paragraphs 6 and 27 of its Report on the 1961-62 Accounts. It is concerned that a concerted approach would appear to have been employed by the canning firms to take advantage of the Department in its efforts to dispose of cow reactors at a fair and reasonable price. It would accordingly be glad to learn to what extent the Department is in a position to satisfy itself that excessive profits, at Exchequer expense, have not accrued to the canning firms.

Payments to Pigs and Bacon Commission

Appendix XXXIV.

31. Payments are made from the Vote for Agriculture to the Pigs and Bacon Commission in connection with the operation of a scheme of support prices for exports of Grade A bacon. At the request of the Committee the Accounts of the Commission for the year ended 31st December, 1962, were furnished for its information. While it understands that the scheme provides a subsidy to curers designed to make up the difference between market and guaranteed prices it would be glad to be informed as to the basis on which the guaranteed prices are determined, particularly in view of the charge imposed on the Exchequer.

Marketing, etc., of Dairy Produce

32. From the provision made in the Vote for the marketing, etc., of Dairy Produce £2,172,031 was paid to An Bord Bainne during the year of account. The Comptroller and Auditor General informed the Committee that the Accounts of An Bord for the year under review were not available. The Committee attaches great importance to prompt presentation of accounts to the Oireachtas and is surprised at the long delay in this case.

Special Agricultural, etc., Schemes

33. Under the Seed Distribution Schemes a merchant failed to supply seed potatoes as required by his contract and the Department incurred additional expenditure of £394 in obtaining substitute supplies. The Department held the contractor liable for the consequential loss but later was legally advised that the prospects of succeeding in recovering the loss in Court were very poor. As a result of negotiations £51 was accepted from the contractor and the balance of £343 was written off. On a number of occasions in recent years previous Committees have commented on losses arising from the non-enforcement of the terms of contracts. This Committee is disturbed to learn that the legal advice obtained by the Department indicated that the prospects of successfully pursuing this case in the Courts were poor. It would accordingly like further clarification of the legal position, and in particular as to whether there was unreasonable delay on the part of the Department in formulating its claim and, if so, whether this was the factor which made the contract unenforceable.


34. The Comptroller and Auditor General drew attention to a payment of £400 compensation to a migrant in respect of defects in a dwellinghouse, erected by a Land Commission contractor, on the holding allotted to him. From the evidence, it appears that this contractor entered into a contract for the erection of three dwellinghouses on an estate in Co. Kildare for £4,650. There were serious defects in the houses and the migrants claimed compensation. One case has been settled and the other two claims are under consideration. One of the migrants has been transferred to another house and the other two may have to be treated in this way. The question of rehabilitating the defective houses is also being considered and legal proceedings may be taken against the contractor or his sureties in due course.

The Committee wishes to be informed of developments in this case as they occur.


35. In the course of its deliberations the Committee has been conscious of the substantial amounts of voted moneys paid to State sponsored bodies. Responsibility for the expenditure of these moneys rests, under various statutes, with the Board or other Authority concerned whose reports and accounts are generally presented to both Houses of the Oireachtas. The Comptroller and Auditor General audits the majority of the accounts referred to, but there is no provision in the Standing Orders of Dáil Éireann for referring these accounts to the Committee for examination and report to Dáil Éireann.

It has not been the custom to have a formal review of the accounts of State sponsored bodies by Dáil Éireann. This is a question that has been discussed by both Houses of the Oireachtas on many occasions without reaching any definite conclusions. As a first step, the Committee suggests that consideration might be given to an amendment of the Standing Orders of Dáil Éireann so as to provide where appropriate for the reference to the Committee of Public Accounts of the audited accounts of bodies who receive subventions from voted moneys.

(Signed) DENIS F. JONES,


12th November, 1964.