Committee Reports > List of Committees > Dáil > 1966 > Committee of Public Accounts > Report - Appropriation Accounts 1963 - 1964

REPORT

PART I GENERAL OBSERVATIONS.

MINUTE OF THE MINISTER FOR FINANCE DATED 21st APRIL, 1965.

1959-60 Accounts

1. The Committee notes the further observations of the Minister for Finance on paragraphs, 3,4 and 12 of its report dated 22nd February, 1961 and will be glad to be informed of any subsequent developments.

1960-61 Accounts

2. The Committee would also like to be informed of the findings of the departmental committee set up to ascertain whether more effective measures could be devised to prevent irregularities relating to Post Office Savings Bank moneys to which reference was made in paragraph 25 of its report dated 5th September, 1962.

1962-63 Accounts

3. The Committee will be glad to receive in due course the further observations of the Minister on paragraphs 12, 14, 18, 21, 27, 34 and 35 of its report dated 12th November, 1964.

External Affairs

4. The importance of keeping a close watch over expenditure on entertainment has been stressed by the Committee in several of its recent reports. It is prepared to accept the Minister’s view that the publication of details of such expenditure might prove embarrassing in certain circumstances.

Public Works and Buildings

5. The Committee desires to be informed whether examination of the inventories of furniture in Embassies and Legations abroad has been completed.

6. In paragraph 26 of its report on the accounts for 1962-63 the Committee stated that it would return to the subject of the conversion of Templemore Military Barracks into a training centre for Garda recruits. It has noted the views of the Minister for Finance contained in the minute under consideration, but it is not in a position to judge on the evidence whether the additional works could have cost less if they had been included in the original contract. It notes that the Minister is having the Committee’s views in regard to fees in the case of future large contracts examined and that it will be informed of the result in due course. The Committee is unable to share the Minister’s view that no difficulties as regards financial control were created by virtue of the exceptional arrangements unavoidably made in this instance. In this respect the evidence has been allowed to speak and dictates logically the conclusions which the Committee has drawn.

7. The Committee was told that the depot had been occupied in the year under review and that the total expenditure to 30th September, 1965 was £617,634; some minor expenditure had to be met after that date.

8. In reaching final conclusions on the unsatisfactory features of this case the Committee wish to deal with it primarily as a lesson for the future. In its view it has amply confirmed the soundness of the practice of requiring realistic estimates as a basis for authorising expenditure, and for detailed plans and firm specifications as a basis of contracts. It is clearly unwise to proceed with estimates which are so conjectural as to be almost worthless as an indication of the ultimate cost.

9. In the course of the examination of the Accounting Officer for the vote for the Garda Síochána the Committee learned that expenditure amounting to £26,000 was incurred in respect of furniture for the new training depot at Templemore. Having regard to the urgent need for economy, the Committee would like to be informed how the furniture in the former training depot was disposed of.

Agriculture

10. The Committee in paragraph 30 of its previous report expressed its concern that the canning firms appeared to have taken advantage of the Department in its efforts to dispose of cow reactors, acquired under the Bovine Tuberculosis Eradication Scheme, at a fair and reasonable price. It notes that the Minister for Agriculture has been advised that he has not the right of access to the accounts of the firms concerned and accordingly it would not be possible to ascertain the extent of their profits arising from the disposal of reactors.

11. The Committee has had further evidence on this subject and remains disturbed that the Department should find itself in the position that it could be held to ransom. Perhaps in the future consideration would be given where appropriate to widening the terms of contracts placed without competition to provide for cost investigation by the Minister. The Committee understands that this practice is followed in other countries.

PART II—PARTICULAR ACCOUNTS

Defence

12. The Committee notes that Civil Defence training equipment valued at approximately £100,000 is held in store. Apart from clothing, stocks of which have to be held permanently to meet demands, radiation measuring equipment and rescue outfits to a value of over £90,000 are awaiting issue to local authorities and some of these items have been retained for considerable periods.

The Committee is surprised that it has been found necessary to maintain such substantial amounts of equipment in what has been described as a transit store. It wishes to be assured that purchases have not been made in excess of actual requirements and that in the case of the radiac instruments, which form the bulk of the material in store, there is no danger of deterioration or obsolescence.

Local Government

13. Attention was drawn to two eases on this vote where payment of fully matured liabilities had been deferred. The Committee accept that this happened through inadvertence and it trusts that the restatement by the Comptroller and Auditor General, in paragraph 5 of his report, of the principle involved will focus sufficient attention on the point at issue.

Office of the Minister for Education

14. A grant-in-aid of £20,250 originally provided for Comhdháil Náisiúnta na Gaeilge was subsequently increased to £21,450 by supplementary estimate. The Committee understand that the supplementary grant was required to meet commitments for salary increases and other expenses. The Accounting Officer was not clear as to how the funds of this body were disposed of and detailed audited accounts did not appear to be available. He did not think that they had any other source of income. The Committee is of the opinion that where a body is supported mainly from public funds it should furnish proper accounts which would be open to the scrutiny and comment of the Comptroller and Auditor General.

Vocational Education

15. The comptroller and Auditor General in his report referred to the XII International Apprentice Competition which took place in Dublin in July, 1963 and was organised by a representative committee appointed by the Minister for Education. £30,000 had been provided in the estimate for the expenses of the competition and expenditure in the year under review amounted to £39,507. The organising committee also received assistance including cash contributions from other sources but the Comptroller and Auditor General was unable to obtain a clear definition of responsibility for expenditure. He was later informed that there was no agreement about this matter but that it was accepted that the expenditure would fall on State funds. The Committee would like to be informed when the final accounts of the organising committee are available and further regarding the disposal of the equipment purchased for the competition.

Health

16. Figures supplied by the Department indicate that the net expenditure on the health services rose from £16 million in 1958-59 to £22 million in 1963-64 borne equally between the Health Authorities and the Vote. Minor receipts as defined in Section 1 of the Health Services (Financial Provisions) Act, 1947 are taken into account in arriving at the net expenditure and in order to observe the trend of these receipts, the Committee would like to be furnished with an analysis of them for the years referred to above.

Transport and Power

17. The Committee noted that issues amounting to £815,000 had been made over a number of years to Bord Fáilte Éireann to provide grants towards the development of holiday accommodation, and that the Minister for Transport and Power had also guaranteed loans for this purpose. Details of guaranteed loans are furnished by the Minister to both Houses of the Oireachtas but no information was available to this Committee regarding the grants paid by Bord Fáilte. An Foras Tionscal has published details of the grants it has made for general industrial developments and there does not appear to be any sound reason for not disclosing similar information relating to the tourist industry.

18. A subsidy of £1,175,000 was paid to Coras Iompair Éireann during the year in pursuance of the provisions of the Transport Act, 1958. Abridged accounts of the undertaking are furnished to both Houses of the Oireachtas but detailed accounts did not appear to be available in the Department. The Committee feel that in the absence of fuller information regarding the various branches of the undertaking it is unable to offer any useful comment on its finances. This is of course a part of the larger issues raised in paragraph 35 of the previous Report of the Committee of Public Accounts which is under consideration by the Minister for Finance.

Courts of Justice

19. The Comptroller and Auditor General in his report stated that under the provisions of the District Court (Fees) Order, 1956 a fee of £1 is payable on the issue of a licence to keep petroleum or other substances of a like nature, and that he had inquired whether there were departmental regulations, which were being enforced, to ensure that all dealers were duly licensed and that licences were renewed where appropriate.

The Department of Justice stated that its concern was to prescribe and collect a fee in respect of licences issued by District Justices, but the Comptroller and Auditor General found difficulty in ascertaining from District Court Offices whether licences were or were not renewable and his officers had reported that licences did not appear to have been issued in a number of cases. It appears that the Department of Industry and Commerce is responsible for legislation dealing with petroleum. The Accounting Officer for the Courts of Justice explained the confused position under existing legislation but disclaimed responsibility save for collecting a fee on the issue of a licence. From the Committee’s point of view the position is quite unsatisfactory and needs to be cleared up through the co-ordinated efforts of the departments concerned.

National Gallery

20. Since 1955-56 previous Committees of Public Accounts have recorded their concern at the absence of complete inventories of the pictures, etc., in the Gallery. In January, 1963, the Committee was informed that arrangements were being made with the Department of Education for the maintenance of up-to-date records which would be regularly checked. In evidence this Committee was told that what is now called the concise catalogue of oil paintings was published in 1964. This is a list of the majority of the paintings, but does not include drawings, water colours and other objects in the collection. The Accounting Officer considered that the records were incomplete and unsatisfactory and he informed the Committee of the steps he had taken to compile a complete inventory. While the Committee are disappointed at the progress which has been made since attention was drawn to the matter, it trusts that there will be no further delay in bringing to a conclusion this important work.

Agriculture

21. In order to ensure that the full benefit of the phosphatic fertiliser subsidy would reach the farming community the Department of Industry and Commerce on behalf of the Department of Agriculture undertook an examination of the accounts of home manufacturers for the 1962-63 and 1963-64 fertiliser seasons with a view to ascertaining whether there had been any significant change in the cost of producing superphosphate. The Accounting Officer informed the Committee that he was satisfied that there had been no excessive profit taking on the part of the manufacturers whose prices had been heavily subsidised. It appears from the evidence however that the examination of the accounts was not extensive and that the Comptroller and Auditor General had, because of the large sums involved, emphasised the necessity of full examination of the books of account of the manufacturers and traders concerned. The Committee agrees with his view on this matter.

22. A note to the account states that fines amounting to £3,439,537 incurred by holders of milling licences under Section 10 of the Agricultural Produce (Cereals) Act, 1935 for failure to meet the technical requirements of the Act to take into store specified monthly quantities of home-grown wheat in respect of the cereal year 1962-63 were remitted. This was described to the Committee as a technicality to comply with the provisions of the Act which require orders to be made every year specifying how much native wheat should be used and allocating the total among the various mills. In practice these orders have to be amended significantly as the season advances, but once the first order is made the legal position is that the millers remain liable to a fine if they do not comply, even though in the actual conditions following the harvest it would be impossible for them to carry out the terms of the Order. It is clear that no real irregularity occurs and it is felt by the Committee that the note to the account could give a false impression. It accordingly suggests that a less cumbersome method of dealing with the matter might be found.

23. The Committee discussed the form of the accounts of the Dairy Disposal Company, Ltd. This form was adopted many years ago to comply with the wishes of a previous Committee of Public Accounts who wanted to see the position of the company in relation to the Exchequer. For the future the Committee would like to have before it accounts that meet the requirements of the Companies Act, 1963.

Public Works and Buildings

24. The Committee learned that the Commissioners of Public Works had as yet no clear results from their experiments in having intermediate river drainage schemes carried out by contract rather than by direct labour. Their cost accountant was carrying out an intensive examination of all the costs involved and it is hoped that he will be able to indicate the circumstances in which contract work would be more advantageous. The Committee is interested in this subject and also in the question of incentive bonuses for direct labour schemes and would like to be kept informed of further developments.

Forestry

25. In June, 1958, a sum of £4,283, the agreed purchase price for 90 acres of land at Shelton Forest taken over by St. Patrick’s Copper Mines, Ltd., was placed on deposit in the joint names of the Chief State Solicitor and the Solicitor representing the company. There has been considerable delay in completing the legal transfer of the property due to the company’s financial difficulties and the appointment of a receiver. The Department also has a claim for £211 against the receiver for restoration of the water supply arising out of damage caused by the company’s employees. The Committee feels that the Department has not pursued its claim as actively as should be expected and it wishes to be kept informed of developments.

Roinn na Gaeltachta

26. Paragraph 21 of the Committee’s report dated 12th November, 1964 and an earlier report dealt with questions arising out of losses sustained through damage by storm to glasshouses erected in Connemara and south Mayo. The Committee was informed that ten out of twenty damaged houses in Connemara were replaced and that in south Mayo, as the people concerned were no longer interested, it was decided not to replace the twelve houses damaged in that area. The question of recovery and disposal of the salvage arising from the abandoned glasshouses was raised by the Committee but the Accounting Officer did not hold out much hope of realising even the cost of recovery. The Committee would like to be informed of the ultimate financial loss when it has been ascertained.

27. Statistics compiled by the Department of Agriculture of the returns to the growers under the Gaeltacht Glasshouse Schemes were furnished to the Committee by the Accounting Officer. From these it is clear that, judged from the average returns received by growers in County Donegal, the Connemara results are very disappointing. The Committee would like to have the Department’s observations on this aspect of the matter.

Office of the Revenue Commissioners

28. The Comptroller and Auditor General in the course of his scrutiny of schedules of cases in which claims for duty under the Revenue Acts were remitted without statutory authority or passed as irrecoverable noticed from an examination of documents that an item of £866 had not been included in the schedules. The circumstances were, as explained by the Accounting Officer, that this was a repayment made in accordance with the double taxation agreement with the British Authorities in respect of income tax which had been deducted from interest payable to a mortgagee resident outside the State but the Revenue Commissioners were unable to recover the tax from the mortgagors in this country because of their poor circumstances. The reason why the amount in question was not included in the schedules of losses was that there had been no assessment to tax. While this may be a technically valid explanation, the Committee feel that where the Revenue Commissioners make a repayment in respect of tax which they fail to collect such cases should be brought specifically to the notice of the Comptroller and Auditor General.

29. Balancing statements relating to Income Tax assessable under Schedule E in the Dublin General District for 1950-51 and subsequent years were furnished to the Comptroller and Auditor General. To collect this tax the Central Collection Branch was set up on 1st January, 1952 and the statements referred to the position as at 26th March, 1962 in respect of the periods 1950-51 to 1954-55 and 1955-56 to 1959-60. Of £1,275,813 tax outstanding in respect of the periods mentioned, all but £83,751 had been paid, discharged or passed as irrecoverable by 31st March, 1965. The Accounting Officer brought the position up to date when he told the Committee that the full balancing had been completed for 1960-61 and 1961-62, but that the three years 1962-63, 1963-64 and 1964-65 presented special complications and that the task of balancing may take some time. These complications arose mainly from the failure by taxpayers to furnish the appropriate documents at the time of payments or through inaccurate recording in the offices of the Revenue Commissioners. The Accounting Officer hoped that there would be no difficulty in balancing the accounts for 1965-66.

It appears to the Committee that the establishment of the central collection and the introduction of mechanised procedures led to accounting difficulties which the Commissioners have not found easy to surmount. It trusts that with an improvement in efficiency and the co-operation of the general public the difficulties will be overcome by the time the accounts are again brought under review.

30. During the year an electronic computer was installed by the Revenue Commissioners in the Central Collection Branch. Income tax and sur-tax assessments, etc., and accounting and statistical work are carried out by the computer which also prepares reminders and performs other work in connection with the turnover tax. The Committee noted that P.A.Y.E. had not been included in the computer’s operations but it is now informed that a pilot scheme for this work is at present under trial. It is further noted that the Commissioners contemplate obtaining a much larger and more sophisticated electronic computer and the Committee expect that before entering into firm commitments there will be a thorough investigation to ensure that new and expensive equipment will be availed of by other Departments when not being used for tax purposes.

(Signed) DENIS F. JONES,

Chairman

10th March, 1966