Committee Reports > List of Committees > Dáil > 1967 > Committee of Public Accounts > Report - Appropriation Accounts 1965 - 1966

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 2 Márta, 1967.

Thursday, 2nd March, 1967.

The Committee met at 11 a.m.

DEPUTY JONES in the chair.

Mr. E. F. Suttle (An tArd Reachtaire Cuntas agus Ciste) and Mr. J. Whelan, Mr. M. O’Reilly, Mr. J. R. Whitty and Mr. T. Doyle (An Roinn Airgeadais) called and examined.

329. Chairman.—For the information of members, the Vote for the Department of Justice is not being taken today because Mr. Berry, the Secretary, is still ill. He will appear later.

Deputy Treacy.—Might we all express our feelings of regret and of hope for a speedy recovery?

Deputy Healy.—We all wish to be associated with these remarks. We hope he will be all right soon.

VOTE 42—POSTS AND TELEGRAPHS.

Mr. L. Ó Broin called and examined.

330. Chairman.—I understand that this is Mr. Ó Broin’s last appearance before the Committee as Accounting Officer. I am expressing the wishes of the Committee when I say that at all times he was most helpful to the members and that he discharged his responsibilities here in excellent fashion. I and the Committee wish him many happy years of retirement, free from any badgering by anybody.

Deputy Healy.—We all join with you. Mr. Ó Broin has had a tremendous record of public service. He has been an ornament to the office he has held. Our good wishes go with him into many happy years of retirement.

Mr. Ó Broin.—I wish to thank you, Mr. Chairman, and the Committee sincerely for your good wishes. It has been a privilege and a pleasure at all times to appear before the Committee.

331. Chairman.—We shall deal first with the Report of the Comptroller and Auditor General, Paragraph 69:

“69. A test examination of the store accounts was carried out with satisfactory results.

In addition to the engineering stores shown in Appendix II as valued at £3,569,230 on 31 March 1966 engineering stores to the value of £14,310 were held on behalf of other government departments. Stores other than engineering stores were valued at £504,089 including £189,702 in respect of stores held for other government departments.

Including works in progress on 31 March 1966, the expenditure on manufacturing jobs in the factory during the year amounted to £65,029, expenditure on repair work (other than repairs to mechanical transport) to £86,780, and expenditure on mechanical transport repairs to £17,943.”

Has Mr. Suttle anything to add to that?

Mr. Suttle.—No. That is purely statistical matter for the information of the Committee.

332. Chairman.—We turn to Paragraph 70:

“70. A test examination of the Accounts of Postal, Telegraph and Telephone services was carried out with satisfactory results.

The net yield of revenue for the years 1965-66 and 1964-65 is shown in the following statement:—

£16,400,000 was paid into the Exchequer during the year leaving a balance of £2,265,411 at 31 March 1966 as compared with £1,230,147 at the end of the previous financial year.

Sums amounting to £2,021 due for telephone services provided in prior years were written off during the year as irrecoverable.”

Have you anything to add to that, Mr. Suttle?

Mr. Suttle.—Again, the paragraph is purely for the information of members.

333. Is there a reason for the increased balance being carried forward?

Mr. Ó Broin.—There is no particular reason why it is larger. This is a float we have with which to carry on the Department’s expanding business. We arranged the amount with the Department of Finance to whom it is also available for drawing on as required.

334. Chairman.—We pass to Paragraph 71:

“71. The accounts of the Post Office Savings Bank for the year ended 31 December 1965 were submitted to a test examination with satisfactory results. The balance due to depositors, inclusive of interest, amounted to £129,275,275 (including £19,362,644 in respect of liability to Trustee Savings Banks) on 31 December 1965, as compared with £126,353,059 at the close of the previous year. Interest accrued during the year on securities standing to the credit of the Post Office Savings Bank Fund amounted to £6,193,753. Of this sum £3,223,290 was applied as interest paid and credited to depositors, management expenses absorbed £415,307 and the balance, £2,555,156, was set aside towards provision against depreciation in the value of securities.”

Mr. Suttle.—Again, this is for the information of members. There are copies of a statement on the Post Office Savings Bank available for members.*

Deputy Healy.—Does it cover a full year since the increase in the interest rate? Did that mean any substantial increase in the number of depositors?—That became operative in a later year than that under review.

335. Deputy P. Hogan.—I should like to dwell for a moment on the Post Office Savings Bank. There is the matter of interest accrued on securities.

Mr. Suttle.—Money is advanced from the Savings Bank funds to the Exchequer to be used for capital services or for any other service that may require money. It is an investment by the bank and interest is paid by the Exchequer into the Savings Bank funds. It does not vary very much.

336. Deputy P. Hogan.—May I ask a general question? Last year there was a sum of £2,555,000 set aside against depreciation of post office securities. Could I find out how much is set off against this year in depreciation?

Mr. Suttle.—In the Savings Bank Account?

Deputy P. Hogan.—Yes.

Mr. Suttle.—That amount is really not set aside at all. It is just lost in the general balances of the Government. It is not separately held against depreciation in investments. Under the old Post Office Savings Bank Act, of the middle of the last century, the State is liable to repay any sums placed on deposit in the Post Office Savings Bank and on that basis there is no necessity to provide specific funds as a reserve. It is a general charge against the State in respect of any deposits made in the Post Office Savings Bank Account.

337. Deputy P. Hogan.—The position was that the investments were £126 million odd on 31 December, 1965 and there was interest of £6 million. Management expenses cost £415,000 and the balance of £2,555,156 was set aside towards provision against depreciation in the value of securities. What is the corresponding figure for this year?

Mr. Suttle.—That would not be available. It would be in the figures for the current year.

338. Chairman.—Paragraph 72 reads:

“72. Expenditure on freight by the Department is charged to a suspense account pending detailed examination of claims. At the time of my examination I observed that the total amount paid in the year 1964-65, £67,644, and £44,466 of the amounts paid in 1963-64 and earlier years, remained charged to the suspense account instead of to the appropriation accounts of the years of payment. I have asked for an explanation.”

Mr. Suttle.—Failure to have these substantial sums charged in the Appropriation Accounts of the years of payment showed that the elementary principles of Vote accounting were not being observed. The Accounting Officer has informed me that the items referred to in the Paragraph have since been cleared.

339. Chairman.—Have the payments been made?

Mr. Suttle.—Payments were made and charged to suspense in 1965-66 and those charges will now only arise in the charges on the Vote for 1966-67.

Deputy Treacy.—Is that Mr. Suttle’s observation or is it the explanation?

Chairman.—Mr. Suttle is making a comment on paragraph 72 at the moment in regard to the Suspense Account.

Deputy Treacy.—Mr. Suttle says in the latter paragraph that he asked for an explanation.

340. Mr. Suttle.—Perhaps I should read the Accounting Officer’s explanation:

The delay in charging the payments for fares and freights to the appropriate heads of account has been caused by the growth in those payments as a result of the greatly increased flow of stores for engineering works under the expanded Telephone Development programme. The stores are carried mainly by CIE freight services. As that company requires prompt payment of its accounts, this is done by charging to suspense. The accounts, however, cover a great many items and are, particularly in recent years, of considerable size and complexity and much time and effort has to be devoted to checking and apportionment before the proper charges to account can be determined. Unfortunately, by reason of shortages of experienced staff and all-round pressures arising from the Telephone Development programme, heavy arrears developed in the checking and apportionment. The situation is being gradually brought under control. All the accounts referred to in the query have since been cleared and it is hoped to have the work up to date by the end of this financial year.

Deputy Treacy.—That seems to be satisfactory.

341. Chairman.—Does Mr. Ó Broin wish to comment on this matter?

Mr. Ó Broin.—I might say, first of all, as a general observation in regard to both paragraphs 72 and 73 that we understand the concern of the Comptroller and Auditor General in this matter of suspense accounts and we are trying as fast as we can to clear them. At the same time, I think I should say that there is no money really involved in either of these cases mentioned. It is very largely a matter of book-keeping but, as I say, we are doing what we can to clear the arrears as quickly as we can.

342. Deputy Treacy.—Was this due to inadequacy of staff to cope with it?—Very much so. I have, in fact, some figures to indicate that the staff in the particular branch on whom much of the burden arising from the expanding telephone programme has fallen was quite disproportionate to their enlarged duties.

We gather from what Mr. Suttle has said that this matter of the inadequacy of staff is now rectified?—We are doing the best we can. Somehow, the staff is being found to expedite this matter.

343. Might I ask what grades of staff would be involved?—It would probably be a Higher Executive Officer in charge of a number of more junior staff, clerks and so on. If you would like particulars I would be very glad to send the precise information to you.*

It would be interesting to have it.

344. Chairman.—Paragraph 73 of the Report of the Comptroller and Auditor General reads:

“73. Payments for stores purchased for other government departments are charged to a suspense account pending recoupment. At the time of my examination I found a substantial discrepancy between the balance on the account and amounts listed as due from departments and I have communicated with the Accounting Officer.”

Have you anything to add, Mr. Suttle?

Mr. Suttle.—The Accounting Officer has informed me that the discrepancy, which amounted to approximately £15,000 at 31 March, 1965, has since been reduced to below £10,000 and that a further report will be made after the end of this financial year on efforts to reduce this figure. He has also informed me that in view of the altered arrangements with other Departments, procedures have been revised so as to effect a reconciliation each year.

Chairman.—The figure is £10,000. At the end of another year that will be wiped out?—Yes.

345. Deputy P. Hogan.—On the Post Office Savings Bank accounts, there apparently has been a decline of a few million in deposits compared with last year.

Mr. Suttle.—It has been up and down over the years. It varies considerably.

346. Deputy Healy.—One would imagine that the issue of a National Loan would have considerable effect on deposits in the Savings Bank. Would you agree?

Chairman.—A question has been put that there is a decline in deposits. Deputy Healy suggests that the issue of a National Loan might have a bearing on this matter. Could Mr. O’Reilly comment on this?

Mr. O’Reilly (An Roinn Airgeadais).— Experience over the past year is that roughly the £1 million drawn from the Savings Bank was for re-investment in the National Loan.

347.—Deputy Treacy.—The interest rate would be most unattractive This is a problem. I think we can expect a decline in deposits in the Savings Bank if interest is not increased?

Deputy Crowley.—Even if extra interest were given it would have no effect?

Mr. O’Reilly.—Interest has gone up by 1 per cent since the 1st January. The first £70 earned in the Post Office is free of income tax. That means that 3½ per cent is equivalent to £5 10s. However, deposits can be withdrawn on demand. Money is moving constantly. It is on demand and £5 10s., even in present circumstances, is quite good. It is demand money, short-term money. The present rate equivalent to £5 10s. gross is not unreasonable in present circumstances.

348. Deputy Molloy.—We are not dealing with this financial year. Could you say that the increased interest rate is attracting increased deposits?

Mr. O’Reilly.—The rate is operative since 1 January. Deposits since 1 January have been reasonably satisfactory.

Deputy Molloy.—It will be interesting to see the position at the end of the year.

349. Deputy Crowley.—Would a national increase in rate have any appreciable effect on deposits?

Chairman.—We are getting into the realms of policy now and I must rule that question out.

350. Deputy Kenny.—Is there evidence of any breach of confidence between the Savings Bank and the depositor? For income tax purposes that could be a deterrent to depositing money in the Post Office Savings Bank.

Mr. O’Reilly.—The banks are required to return to the Revenue Commissioners particulars of earned interest over £50 a year and the Post Office Savings Bank also does this. The Post Office Savings Bank are in the same position as the ordinary commercial banks. They must make a return to the Revenue Commissioners.

Deputy Healy.—I agree with the Chairman that this is a matter of policy. If a man can earn £70 interest without being subject to income tax interest on his money, the Post Office is doing a fine job.

351. Deputy Crowley.—On subhead G.— Telephone Capital Repayments—might I ask what progress has been made on satellite communications?—Everything seems to be going well, so far. We were among the first countries to join the consortium that is exploiting the satellites for telecommunication purposes. We are a member of the club, if you like, a subscriber to the capital cost of the space sector of the global system. We have also a few transatlantic telephone circuits in the first commercial satellite launched, and we are represented on the controlling International Committee in Washington. We have likewise acquired an interest in the British ground station at Goonhilly, Cornwall.

352. Will there be a reduction in charges? —At present the satellite circuits cost about the same as the submarine circuits but all indications are that when the satellite system has been exploited further there will be a reduction in what we are charged for the use of circuits through it.

Does that mean a reduction in the charge to telephone subscribers?—I would not like to say that. Costs are increasing simultaneously in other directions and any savings we can get are usually swallowed up. We did, however, make a reduction a few weeks ago in charges for certain transatlantic calls.

But you feel that as a result of these satellites costs are kept more or less reasonable?—Well, all I feel like saying is that telephone traffic with the United States keeps on expanding rapidly and we are convinced that we will be making very substantial use of satellites as the years pass, profitable use.

353. Will we use the satellites for any other means of communication?—They are being used, to some extent, for broadcasting. No doubt, they will be used from time to time here in Ireland for that particular purpose.

Do you envisage then—within, say, the next ten years—the common utilisation of these satellites for switching on and tuning in here in Ireland?—You mean by individual possessors of sets?

Yes?—I think that is a long way off.

354. Deputy Briscoe.—Is there any chance the Department may introduce a lower rate for transatlantic calls after a certain hour, in the same way as operates for calls to Britain at the moment, in order to encourage further usage in this respect?—There is already a special night rate for transatlantic calls but the hours are not the same as in the case of calls to Britain. There is always the possibility of further changes. We are constantly looking at rates, both ourselves and our colleagues in the other administrations.

But that particular point has not come up?—I could not really say what is the likelihood but if there is any possibility at all of further reducing rates, we will do so at an appropriate time.

I am thinking more on the lines of doing so in order to gain business?—Yes that is what I meant.

355. Deputy Molloy.—Could you tell us whether there has been any great use made of the Telex system, and if you are satisfied with the use being made of it? Could you give us some idea of the charges relating to Telex subscribers in Dublin compared with those in rural Ireland? There is a difference in charges?—Of course, Telex has been very extensively used. It is one of the things which has been a very considerable success over a short period. There is a waiting list already of firms et cetera who want to get in on this system. We have laid down a differential between the area nearer the central Telex exchange and those farther away. I have not got the actual figures here to show the differential but I should be glad to send them to you.*

356. As I understand it, the charge increases the farther away you are from the Telex headquarters. The headquarters are in Dublin. Would it not have been possible for the Department to set this up in, say, Athlone, thus giving the facilities to the undeveloped areas cheaper?—It is recognised that some of the areas away from Dublin suffer in some respects, but they have other advantages, of course.

I do not understand how they may have other advantages?—It is conceivable that there are advantages in living away from Dublin, for instance as regards the cost of living.

Has it been brought to your notice by potential subscribers, who feel they are too far from headquarters?

357. Chairman.—I have been listening to the trend of the Deputy’s question. I think this is something which should be asked at another level because, by doing so now, we would be asking the Accounting Officer to deal with policy matters.

Deputy Molloy.—Could the Accounting Officer give us the number of Telex subscribers in each county?—I should be very pleased to do so.

358. Chairman.—Mr. O’Broin, will you send a note on these matters to the Committee?—Yes, I shall.*

359. On the Appropriations in Aid there is a point I should like clarified on item No. 11 (i) on page 129—rebate on purchases of petrol and oil. I was intrigued by that rebate and I should be glad to know how it came about?—My recollection is that this was a rebate we got when we were negotiating a new contract. Of course, rebates are a fairly common thing in this line of business. The amount in question here is rather substantial because of special circumstances.

360. In the classified Schedule of Losses there is an unusual case in regard to payment of £265 in lieu of contributory old age pension to a sub-postmaster who had not been insured by the Department because of incorrect information supplied by him. Does that mean the Department were held liable, although the information supplied was not correct?—Yes, that is exactly the position. We were dependent on the sub-postmaster for the information which would establish whether or not he was insurable. This turned on whether he was giving on the average eighteen hours or more personal service each week. He misled us in this matter almost up to the eve of his becoming eligible for a contributory pension and was not insured. Then he declared that he was mainly dependent for his livelihood on his sub-office earnings, and that he was working not less than eighteen hours a week for us. Anyhow, the upshot of it was that he got a pension as from a later, rather than an earlier date and we were legally advised that he could recover from us, as his employer, the amount of benefit lost in the intervening period, as a simple contract debt. Therefore, we had no option but to pay up.

361. Is it not most unusual, in circumstances like that, where a person has given wrong information, that he could benefit later?—We were, of course, guided by the Department of Social Welfare and our legal advisers and we acted on their advice, with the approval of the Department of Finance. It was a very unusual case.

362. Deputy P. Hogan.—On the Appropriations in Aid—Item 1—Recovery in respect of Telephone Capital expenditure— may I inquire is that money paid by people having telephones installed?

Mr. Suttle.—No. It is entirely expenditure on installation of telephone apparatus, which is recovered from the Telephone Capital Account. I think that is correct, Mr. O’Broin?—Yes, that is correct.

It is internal; it has nothing to do with the actual cost of installation.

363. Deputy Healy.—Where are the amounts received from the public for the installation of telephones shown?

Mr. Suttle.—It comes in now as Post Office revenue: it is brought in directly to the Exchequer under that heading.

Do you not think it would serve any useful purpose to have it operated to show us the amount of money spent on the installation of telephones over the year and the amount recovered from those who have had telephones installed?

Mr. Suttle.—It would be very difficult to do that. The capital cost of telephone installation is recovered over the lifetime of the subscriber. For instance, my telephone was installed 20 years ago and I am still repaying the capital.

When do you expect you will be finished?

Mr. Suttle.—Never.

That is what I thought.

364. Deputy Crowley.—It is shown as receipts to the Exchequer?

Mr. Suttle.—There are two ways, one, by direct payment as in the case of the postal services, the telephone and the telegraph services. Secondly, the money collected by the broadcasting services for licence fees is collected by the Post Office and it goes to the Exchequer indirectly.

365. Deputy Molloy.—Is there a very special reason why the telephone money goes directly to the Exchequer? It does not seem in line with the other Departments.

Mr. Suttle.—Quite a lot of money goes directly into the Exchequer but you can see the position clearly here in the Post Office Account. For instance, income tax, customs revenue and so on are collected by the Revenue Department. You have the figures for the accounts under review in paragraph 70 of my Report. You have the figure of £17,435,000 and of that £16 million was paid into the Exchequer. There is nothing against treating the broadcasting services in exactly the same way, but it is not really Post Office revenue. It is television and radio revenue and it is different to that extent. Eventually it goes into the same pocket, that of the Exchequer.

Deputy Molloy.—We had better leave it at that, but I find it difficult to understand.

Mr. Suttle.—It is not easy to understand.

366. Deputy Healy.—The telephone service is increasing rapidly every year. There must come a time surely when the capital cost would be repaid but the subscriber is still repaying. Should not the subscriber expect a reduction sometime?—

Mr. Suttle.—You must take into account that it is not just the cost, of my telephone going into my house. I can now dial to Naas or Kildare or elsewhere, a thing I could not do 20 years ago. I am getting the benefit of that vastly improved service which is being paid out of capital moneys, and I have not paid for that yet.

Chairman.—We could have a very useful discussion on this elsewhere at a later stage.

367. Deputy Crowley.—On page 128, receipts from Broadcasting Licence Fees are shown. There was a fairly extensive television and radio campaign in respect of the payment of licence fees and I notice that the revenue realised has been considerably more than was estimated for. Do you think the increased amount of money coming in was the result of the advertising campaign?

Mr. Ó Broin.—We always find that these special campaigns pay off. We have to have them frequently. Unfortunately there are many people who dislike paying their licences.

Deputy Crowley.—Can you say, in pounds, shillings and pence, the amount of extra revenue from licence fees as a result of the advertising campaign?—I have not got the figures here. Indeed I am not sure, offhand, whether we or RTE carried the cost of that. I will send a note.*

You might tell us how much the revenue increased as a result of the advertising campaign, if that is possible.

368. Deputy Briscoe.—On the Statement of Receipts and Issues of Engineering Stores, do you purchase telephone instruments, say, years in advance of requirement?—We try to anticipate requirements, of course, keeping in mind the amount of capital available to us.

Would much be gained by purchasing a number of instruments one or two years in advance?—We do this but we must also be sure we do not hold things too long and we must consider the position as regards prices. In other words, we must consider all the elements any good businessman would take into account.

369. Chairman.—The Statement shows that the value of stores awaiting repair or condemnation has increased. Could you comment on this item?—These old stores comprise mainly telephone instruments and apparatus, switchboards and teleprinters. When the items are returned to stores by the engineers, they are examined and such of them as are repairable are repaired in due course in the factory and those found unfit for repair scrapped. The value of the holding of repairable stores has grown considerably in recent years. There are two main reasons for this—there is the increase in the number of telephone subscribers and the corresponding increase in the number of faults necessitating repair work; secondly, there is the modernisation of exchanges and apparatus and the consequent recovery of old equipment for possible use elsewhere in the system. To cope with the accumulation of stores for repair, we have taken steps to supplement the output of the factory itself by placing contracts for repair work with outside firms.

So you should be able to control this a little more?—We should.

370. Deputy P. Hogan.—There is a purchase figure of more than £3 million for engineering equipment. How can that be reconciled with the figure in subhead F.— Engineering Stores and Equipment—a figure of £5,781,882?

Mr. Suttle.—It arises mainly because a lot of stores go directly into jobs. The stores mentioned here are stores held by the Post Office for current use. Stores often go directly to the job, say, of building a new exchange.

Mr. Ó Broin.—There are also contract items. A lot of work will be done by contract which would not involve stores at all.

371. Chairman.—The Committee have asked me this morning if it would be possible for your successor to present us with the Commercial Accounts* earlier so that we will have an opportunity of looking at them?—I will certainly pass that on.

372. Deputy Andrews.—Is Mr. Ó Broin retiring?

Chairman.—At the beginning of the meeting I paid a tribute to Mr. Ó Broin because this is his last appearance before the Committee as accounting officer. Later this year he will be retiring and the Committee were paying a tribute to him for his long standing service to the public and wishing him a very happy retirement. We hope he will find time to devote to the many other activities of which we have had samples already, the very valuable contribution he has made to the history of the State by his books.

Deputy Andrews.—I would certainly like to add my words of appreciation of the work of Mr. O Broin.

Mr. Ó Broin.—I am much obliged to you.

The witness withdrew.

VOTE 43—DEFENCE.

Mr. S. Ó Cearnaigh called and examined.

373. Chairman.—Paragraph 74 of the Report of the Comptroller and Auditor General reads:

“Subhead K.—Provisions

74. Statements have been furnished to me showing the cost of production of bread at the Curragh bakery and of meat at the Dublin and Curragh abattoirs. The unit costs are as follows:—

The average price of cattle purchased for both the Dublin and Curragh areas was £92 per head in each area, as compared with £93 and £89 per head, respectively, in the previous year, while the average production of beef per head was 693 lbs. and 683 lbs. respectively, as compared with 697 lbs. and 648 lbs.

A variation in ration scales introduced in November 1964 permitted the substitution of chicken for beef on an experimental basis on one day each week.”

Have you anything to add, Mr. Suttle?

Mr. Suttle.—No. This is the usual statistical information regarding the provision of meat and bread for each year.

374. Chairman.—I notice, in regard to meat, that the price in Dublin was 46 pence a lb. in 1965-66 and it was 42.1 pence in 1964-65. The price of cattle was much the same and the average production was equally so. Production costs seem to have risen approximately 9 per cent or so. Is there any particular reason for that?—There was an increase in labour costs. That was one of the main factors in the increase, as compared with 1964-65. It was principally labour costs.

What labour would be involved there?— One officer and seven other ranks and one civilian. That is in the Dublin abattoir.

Is it army personnel who deal with all the abattoirs?—Yes, except for one civilian. In the Curragh there is one officer, six other ranks and one civilian.

375. Deputy Kenny.—Is the purchase of cattle by contract?—An agent buys them on behalf of the Department.

Does he get the full cost? Does he send in his expenditure?—He is paid the actual cost of the animals he buys plus a commission of 5/- a beast.

No matter at what price he buys?—Yes.

376. Chairman.—Paragraph 75 of the Report of the Comptroller and Auditor General reads:

“Subhead P.—Naval Stores

75. Since December 1965 a bridge in course of construction linking Haulbowline Island and the mainland has prevented the official launches from plying between Cobh and Spike Island. The cost, to March 1966, of providing an alternative service was £2,021.”

Have you anything to add to that, Mr. Suttle?

Mr Suttle.—This bridge has now been completed and the Department of Defence continue to provide the necessary alternative service under a contract which costs about £7,000 per annum.

377. Chairman.—Have you access to this bridge for the transport of personnel and stores?—No. The bridge is the property of Irish Steel Holdings and the Department have not any right to use it.

You have not access to it at all?—Not really.

378. Chairman.—Paragraph 76 of the Report of the Comptroller and Auditor General reads:

“Subhead CC.—Compensation

76. The charge to this subhead comprises:—

Have you anything to add, Mr. Suttle?

Mr. Suttle.—This paragraph is for information and I have nothing to add to it.

379. Deputy Briscoe.—How many accidents were involved in the sum of £9,460 compensation? — Approximately 25 accidents involving £50 or over.

Is the number going up or down?

Mr. Ó Cearnaigh.—It is roughly about normal. There is nothing unusual in it.

Was there any particularly large payment of compensation out of this?—The most costly accident in the group would be less than £3,000.

Deputy Molloy.—Were any of those accidents to personnel of the Irish Army serving overseas?—No. All those were at home.

380. Chairman.—Would you recover any compensation where you were the injured party? Have you any figures for that?— There are various halving agreements and knock for knock agreements with insurance firms. Sometimes we would recover some compensation.

Have you any figure for that?—No. I am afraid I have not.

Chairman.—Could you furnish that figure?—Yes.*

381. Chairman.—Paragraph 77 of the report of the Comptroller and Auditor General reads:

“Subhead Z.—Appropriations in Aid

77. Services were made available to a film company for the production of a film. It was originally estimated that the cost of providing military personnel and equipment would be of the order of £30,000 but as the work proceeded requests for additional services were made by the company. Ultimately the amount due to the Department was assessed at £90,000. Sums amounting to £35,000 were received in the course of the operation and have been brought to the credit of this subhead. I am informed that the balance due is in dispute.”

Have you anything to add, Mr. Suttle?

Mr. Suttle.—The Accounting Officer has further informed me that a re-assessment of the Department’s claim was being made at the company’s request and has promised further information on the outcome.

382. Deputy Briscoe.—Could you say that there was agreement with the film company on the matter of the amount to be paid?— Correspondence is still in progress with the film company. The revised claim is for £79,000.

383. Deputy Andrews.—What are the differences between the Department and the film company?—There is a vast amount of detailed data involved. It relates to the cost of the personnel supplied, the cost of material hired, various losses such as traffic accidents, the use of helicopters, petrol and oil. In fact an enormous range of data was involved in the preparation of the claim. We have supplied these details to the film company and they are at present examining them. They say it will take them a considerable time to check up on all the details.

Failing agreement, does the Department contemplate legal action against the film company?—Things have not reached that stage yet.

384. Deputy Treacy.—Is it appropriate to ask if the film involved was one in which our troops portrayed the role of Germans? —The film was The Blue Max.

385. Deputy Molloy.—It is stated in the report of the Comptroller and Auditor General that the claim was for £90,000, and that has been reduced to £79,000. Does that mean that the film company had, in fact, a case? When you reduce the amount is it not fair to accept that you have reduced your claim? Am I making a wrong deduction?—This arose from a different interpretation of the arrangements with the film company in regard to the making available of troops for the film. The military returns took account of personnel that were being held in readiness and could have been made available if the company required them at a particular time. On reconsideration of the matter, we decided that the proper course would be to charge the company only for the personnel actually supplied to them to meet their requirements. That substantially accounts for the reduction.

386. Was there any special allowance paid to the personnel of the Irish Army who participated in this film? Was that paid by the Department, or by the film company? —It was paid direct to the personnel by the company.

That has been paid, then?—Yes.

387. Deputy Briscoe.—If in future the film company wish to use the Irish Army, will the Department of Defence adopt the line that the company will have to pay the money when the agreement is made? Will the Department require something in advance in order to stop this type of thing happening in future? This procedure takes up time and costs more by way of time wasted in trying to get the money?—The arrangement with the company envisaged the payment of instalments of £10,000 a week while work was in progress. At that time we had asked for a deposit of £40,000. The company paid three weekly instalments in succession of £10,000 each, followed by a further instalment of £5,000. At this time the question of furnishing detailed accounts arose, and the assembly of all the data and the preparation of accounts proved to be a considerable task.

388. If the Department refused to supply the Army until the £10,000 instalments which had been agreed upon had been paid, surely this would have forced the company to pay out; they would have lost money in not being able to complete the film. Could this be done in future?

Deputy Andrews.—The company probably did not forsee the difficulties that arose?— The requirement at first was a relatively simple one of 1,000 men for a fortnight in August. Then there was a request for the hire of stores, etc. Actual work on the film started at the end of May and continued to about December. The whole thing snowballed to a certain extent as filming progressed and requests for services became very numerous. After a certain time the making up of the detailed account started and that involved quite an effort on account of the vast amount of data to be processed.

389. Deputy Briscoe.—I should like to make a suggestion, if I may. If anything like this should again arise, I suggest that the Department of Defence should ask for a larger advance, with a promise to refund anything left over to the film company.

Chairman.—That is a matter on which the Deputy could make a suggestion in the Report.

389a. Deputy Kenny.—Is this the first instance of the Irish Army participating in this sort of thing? Did they ever act before? —Never on that scale, as far as I know.

Probably that is the reason why the Department of Defence did not know very much about the procedure?

Deputy Andrews.—There was no precedent to go on.

Deputy Molloy.—Had the Department on opportunity of reading the script and knowing what the film was all about, or did they just blankly accede to the request?—I could not answer that offhand.

Deputy Andrews.—Having seen the film and having enjoyed it thoroughly, I should like to pay tribute to the acting ability of our troops.

390. Deputy Treacy.—Apart from the supply of officers and men, may I take it that the Army also supplied certain vehicles, armaments and possibly planes, stores, clothing, and so on. To what extent are we involved here?—We supplied transport on hire to the value of £10,000 roughly; we hired out stores at £6,000, helicopters at over £400, aviation fuel at £3,000, lands and accommodation at £7,000; stores deficiencies amounted to £5,000. Those are the principal elements in the account apart from personnel.

Were there any planes involved, apart from the helicopters?—I do not think so.

391. Chairman.—In regard to subhead B.—Permanent Defence Force: Pay—there is a note at the end of page 142 to the effect that the amount recovered from the United Nations did not include any recoupment in respect of overseas allowances. Could you say how much was paid in respect of those overseas allowances and what is the present position in regard to recovery of them?—The principal outstanding claim for overseas allowances relates to the period from the commencement of operations, in March, 1964, to June, 1965, and at present it amounts to £477,000.

392. Nothing has been recovered of that?—There was one fairly substantial payment only; that is the net amount now outstanding in respect of that period. It is in respect of that amount the United Nations have said they will use their best endeavours to reimburse us as soon as they can, and we are optimistic about the outcome.

Therefore, there is nothing hard or fast about our recovery of it; we are dependent on the best endeavours of the United Nations to provide the funds?—That is so, but we are optimistic at the same time.

393. Deputy Andrews.—On subhead E.— Chaplains and Officiating Clergymen: Pay and Allowances—what is the number of chaplains and of what denominations?— There are approximately fourteen. These are all Catholic clergymen. We have one Protestant clergyman as a contract clergyman.

394. —Deputy P. Byrne.—On subhead G.— Civil Defence—in the Note on page 137 I notice that one of the reasons given for the saving is that grants to Essential Undertakers were lower than anticipated. What exactly are Essential Undertakers?—They are suppliers of essential services, such as, say, the gas company and the Electricity Supply Board; any provider of an essential service would be regarded as such.

395. In what circumstances do you give them grants for Defence purposes?—If they had to carry out substantial work from the point of view of protecting their installations in the event of an emergency; they would qualify for a grant in those circumstances; if they had, for example, to erect anti-radiation materials to protect personnel.

396. Has the Dublin Gas Company, for instance, received grants for this purpose?— Not so far.

397. Deputy P. Hogan.—On subhead O.2.—Helicopters—I notice there has been a substantial drop in that item from £140,000 last year to £20,000 this year. I take it the £140,000 the previous year dealt with the purchase of helicopters?—It was capital expenditure on the purchase of the helicopters the previous year, whereas, this year, we are concerned with maintenance only.

398. Deputy Molloy.—Last year I raised a question on the distinction between ambulance services and mercy missions. I should like to know whether all outstanding bills have been paid in respect of the use of helicopters for ambulance service?—There is one which is the subject of correspondence at present.

That is the same one which was the subject of correspondence last year?—No. That has been paid——

By Galway County Council?—Yes.

399. Could we have an explanation, then, as to the difference between the two services?—The ambulance service is actually requisitioned by the local authority; the mercy service is flown as and when necessary, as circumstances require, to save life.

400. Deputy P. Hogan.—Has our helicopter service—apart from mercy and ambulance service—been used for any other work, such as survey work or fishing patrol work?—It has been used on a few occasions for observing traffic. Irish Lights had the use of it on an occasion; it was used in film making, and I think the Garda had it on one or two occasions in connection with traffic observation.

Has it been used for making any territorial surveys?—Not as far as I know; aircraft are used for that purpose.

401. Deputy P. Hogan.—Has it any value from the point of view of protecting our fisheries in territorial waters?—I think it has, to some extent. Of course, helicopters could really only spot poaching trawlers. They could not, for instance, engage in arresting a trawler.

Deputy Molloy.—Are you saying they have been used in the fishery protective service?—To a small extent only.

On how many occasions? Were they used on several occasions or only once or twice? Can we take it that a request can be made to the Department for a helicopter for this purpose?—Their use would be in connection with the spotting of poaching and the Department could be told there was poaching in progress somewhere but it would be for the military authorities to decide what would be the best response to the situation.

402. Deputy P. Hogan.—My question was on how effective the helicopters can be.

Chairman.—Is there any indication of how effective a helicopter can be in this respect?—It could have only a very limited effect because it cannot intervene to arrest a poaching trawler. There are certain other difficulties.

Deputy Molloy.—Have the personnel operating the helicopters been called on to give evidence of poaching by foreign trawlers?—No.

Chairman.—It occurs to me that if a poacher saw the helicopter he would get out very quickly.

403. Deputy Molloy.—The helicopter can get to the scene very quickly. On subhead T.—Barrack Services—what exactly is covered?—All the gear and equipment, for furnishing barracks—bedding, et cetera.

Could we possibly have a breakdown of the figures in respect of expenditure on the different barracks?—That would be extremely difficult.

I agree, and withdraw my request.

Chairman.—Deputy Molloy will find a breakdown in the Estimate itself.

404. Deputy Andrews.—The amount shown in subhead W—Expenses of the Equitation Teams at Horse Shows—seems very small in relation to the number of shows to which we send our team. How many shows does this figure cover and how successful were we?—Six international shows were attended in 1966. The expensive ones were, of course, those in America—New York, Washington and Toronto. The bulk of the expense was incurred on those.

Deputy Kenny.—Were they mixed teams of army and civilian riders?—It depends on what the National Equestrian Federation— the RDS—decide. This Department pay only for the military personnel. The team going to America was a military one.

405. —Deputy Byrne.—On subhead BB.— Irish Red Cross Society (Grant-in-Aid)—do the Society submit audited accounts to you?—Yes. They let us see their audited accounts.

Are they audited by the Comptroller and Auditor General?—No. These are audited by a commercial auditor employed by the Society.

406. Deputy Briscoe.—To what compensation does subhead CC. refer?—Various traffic accidents mainly.

Chairman.—I refer the Deputy to Paragraph 76 of the Report of the Comptroller and Auditor General.

407. Deputy P. Hogan.—On subhead DD. —Lands—has there been much progress since the compilation of the register?—We have made some progress. The up-to-date position is that we have 108 properties vested in the Minister for Defence, which are State owned or held on lease for 21 years or more. Of these, 64 are now entered in the register. We have 152 properties held on short lease, mainly FCA halls and such like. Of these, 12 are entered in the register. In addition, there are 59 properties used by the Defence Forces but not vested in the Minister for Defence but in the Minister for Finance, and the deeds of these are still held by the Office of Public Works. They cannot be entered in the Department of Defence Register of Lands until they have been transferred.

How many plots have been transferred from the Board of Works since last year?— Offhand I could not say but I do not think there have been any.

408. Deputy Byrne.—On the Appropriations in Aid, I notice that the sale of surplus stores at item 2 realised substantially more than was estimated. The estimated figure was £8,000 and the realised sum was £28,269. Do you invite public tender for surplus stores? —Yes.

VOTE 44—ARMY PENSIONS.

Mr. S. Ó Cearnaigh further examined.

409. Deputy P. Hogan.—In regard to subhead D—Military Service Pensions—this apparently consists of two parts, pensions allocated under the 1924 Act and pensions allocated under the 1934 Act. The number of personnel involved under the 1924 Act was 2,505 and under the 1934 Act 8,958, making a total of 11,463. Could I have the amount of money allocated under the 1924 Act and under the 1934 Act?—In the Estimate there is a breakdown between the 1924 Act and the 1934 Act. Under the 1924 Act the provision was £246,986 and under the 1934 Act the provision was £450,252.

The witness withdrew.

VOTE 27—LOCAL GOVERNMENT.

Mr. Lawless called and examined.

410. Chairman.—Mr. Lawless has come here this morning to assist the Committee. This is his first time before the Committee. I should like to welcome him here as accounting officer. We hope he will be with the Committee for a very long time to help them. I know he will be as helpful to the committee as I am sure the Committee will be to him.

Mr. Lawless.—Thank you very much.

Mr. P. J. Burke.—We all wish you luck.

411. Chairman.—Paragraph 33 of the Report of the Comptroller and Auditor-General reads:

“Motor Vehicle Duties

33. A test examination of the revenue from motor vehicle duties, etc., was carried out with satisfactory results. The reports of the Local Government auditors who examine the motor tax transactions of local authorities are made available to me.

The gross proceeds in 1965-66 amounted to £9,594,197 compared with £8,923,936 in the previous year. They include fines amounting to £217,683 collected by the Department of Justice; £4,914 in respect of fees received under the Road Traffic Act, 1961, Road Traffic (Public Service Vehicles) Regulations, 1963; £9,203 fees collected by Planning Authorities in respect of appliances and structures for servicing vehicles; £19,748 fees received by the Department of Local Government pursuant to the Road Traffic (Licensing of Drivers) Regulations, 1964, and £80,772 received from government departments in respect of State owned vehicles.

£9,574,748 was paid into the Exchequer and £19,968 was refunded leaving a balance of £144,379 as compared with £144,898 at the end of the previous financial year.”

Have you anything to add to that Mr. Suttle?

Mr. Suttle.—A report of a Local Government auditor, which recently came under my notice, indicated that the standard of administration in a local taxation office was unsatisfactory. I understand that this matter is under investigation.

Deputy Briscoe.—May I ask how soon it will be before you have a report?

Mr. Lawless.—Offhand, I could not say but certainly we will lose no time.

412. Deputy P. Hogan.—This is a question which will interest all of us in county councils. The motor vehicle receipts for 1965-66 amounted to £9 million odd. Could the accounting officer tell us how much in that same year the Department of Local Government gave back to local authorities for road purposes?—The grants paid to the local authorities was £8,893,143.

413. Chairman.—With regard to subhead A—Salaries, Wages and Allowances—I notice that a proportion of consultants’ fees was involved. Could you say on what those were engaged?—We had a consultant, Mr. Harbison, who was employed as a building consultant for advice in relation to building at the time we were contemplating going into the Ballymun Scheme. He left after a short period and he was replaced by another man. I think £735 was paid to Mr. Harbison and £500 was paid to Mr. Doyle, his successor.*

414. Deputy P. Hogan.—There has been an advance here, both in money and in the number of personnel. In the last year salaries were £426,000 and now they are £606,000 odd. The number of personnel was 428 last year and in the year under review it was 522. Could we have the observations of the accounting officer for that increase in personnel in the Department?—

Chairman.—What the Deputy wants is a breakdown of the amount that might be allocated towards increasing personnel.

Deputy P. Hogan.—There has been a big increase in one year; this represents a big increase in staff.

Mr. Suttle.—There is an increase in the driver and vehicles testing section?

Mr. Lawless.—This is a new service run by the Department. The planning sections also show an increase.

415. Deputy Molloy.—How many staff are in the planning section?—I have not the estimate for 1966-67, but in 1965-66 the total figure was 37. There is a further increase shown. In addition to the increase shown in the town planning, development and appeals sections, there is an increase in the engineering staff, mostly taken up by inspectors, inspectors employed on planning.

Are the planning inspectors engineers?— Not all of them.

What qualifications would they have?— Some are engineers. There is one geographer, but they are mostly architects.

416. Chairman.—The term “geographer” has intrigued members of the Committee. Perhaps you could enlighten us on it?— Geography was a subject which was somewhat despised in our universities, but in England, particularly in Cambridge and Oxford, it is a subject in which degrees have been given for a long time. In England a fair proportion of town planners have a basic qualification in geography. Here we are inclined to have, as the basic subject of all planners, either engineering or architecture but in England many have a basic qualification in geography. We have one, at least, on the staff whose basic qualification is geography.

Deputy Molloy.—In the 1966 Estimates in the Town Planning and Appeals Section there is a list of the staff, principal, assistant principal, higher executive officers. What standing would the engineers have?—They are shown on the following page, under Engineering, etc., Staff. There is a special section for planning. There is a planning officer, and ten inspectors.

417. Chairman.—On subhead D.— Statutory Inquiries—to what do these inquiries refer?—Legal inquiries into the acquisition of land generally, compulsory purchase order inquiries.

418. Chairman.—In regard to subhead E.1—Local Authority Housing—could you give us a breakdown for, say, grants for new houses, reconstruction, water, sewerage? —That comes under subhead E.2. Subhead E.1 refers to local authority housing. That is the housing subsidy which we pay to local authorities on loans. It is very easy to estimate; that is why we generally get an exact sum. Subhead E.2 refers to housing grants and water supply grants.

419. Deputy P. J. Burke.—Would it be possible for Mr. Lawless to send the Committee a breakdown on the private houses, water supply and sewerage grants for each local authority. How much do we give to each local authority? I do not want the information now, but perhaps a note could be furnished on it?

Chairman.—Could we have a breakdown in regard to new houses—what was paid for water and sewerage services and how they compare with the Estimate provisions?

Deputy P. J. Burke.—I want to compare one local authority with the other.—That is a breakdown on subhead E.1. I will be glad to send a note.*

420. Chairman.—In regard to subhead G. —Grants in respect of Derelict Sites, Public Amenity Works and Dangerous Quarries—how do you calculate the amount of the grants towards derelict sites, Mr. Lawless?—These grants are 50 per cent of the cost, subject to a maximum of £100. They are payable to private persons, local authorities and other bodies. Works costing less than £30 do not attract a grant. The amenity schemes grants are payable to local authorities and associations or bodies wishing to carry out approved public amenity works. They are not payable to private persons. Again the grants are up to a maximum of 50 per cent of the cost of approved works where these do not cost less than £100 in the case of amenity grants.

421. Deputy P. J. Burke.—I suppose the dangerous quarries have taken a lot of the revenue?—£400 was expended in 1965-66.

I thought it would have been more; that is why I mention it?—I think the scheme of subsidy for rendering safe dangerous quarries started only a year ago.

That is true.—Again, the grant is 50 per cent and is available to local authorities.

422. Deputy Molloy.—I should like to go back to subhead F.—Water Supply and Sewerage Schemes—how much of this money was paid out in grants towards the erection of swimming pools?—This, again, is subsidy of the loan charges of local authorities.

What commitments did the Department enter into in regard to loan charges and loans for swimming pools in that year 1965-66? Could you let us have a note on that? I think there was one pool at Longford?—Yes, I could give you a note on that. I think there is one swimimng pool only involved, the one in Blackrock, Co. Louth.

Deputy P. J. Burke.—And we had one in South Dublin—at Merrion.

Deputy Andrews.—There are plans for a swimming pool for Dún Laoghaire?—Yes. But, generally, in the case of a swimming, pool it is some time before we get involved in expenditure, because the loan has to be raised and we would not pay the subsidy until repayments started. Therefore, I think the only one here would be at Blackrock, Co. Louth. I shall check that and let the Committee know.*

423. On subhead H.—Recoupment of Expenditure in respect of Register of Electors—what exactly is this recoupment of expenditure?—The Electoral Act of 1963 placed the duty of preparing and publishing the register of electors on each county council and county borough council i.e. the registration authorities. Previously the work had been carried out by county registrars. The Act provides also that the total cost of preparing and publishing the register shall be borne in approximately equal proportions by the State and the registration authorities. The registration expenses are undertaken, initially, by the registration authorities, or local authorities, and then fifty per cent of the net expenses is recouped from the Vote.

424. Have the Department of Local Government any control over the type of person sent out to compile this register?— No; not directly, in the sense that our sanction is not required. Outside Dublin it is done by rate collectors.

425. What about Dublin itself?—No direct control is exercised over the type of person employed. Generally, I understand, local authorities find difficulty in getting people.

That is clearly indicated by the way the register is compiled in the city and county of Dublin; it is compiled in a most haphazard manner and it has been known that people have been left off the register of electors. Is there any point in asking you to ask these people to employ properly experienced types to compile the register? What type of person is engaged on compiling the register?—Generally, temporary staff.

It is as well they are temporary!

Deputy P. J. Burke.—For Dublin Council they require to pass an examination to ensure they are not altogether illiterate?— Generally. We had a great deal of propaganda in recent years. We used television, and then we give to every household a form of claim to fill in. We have spent a great deal of time making those forms as simple as possible; nevertheless, quite a small proportion only are returned. There would not be any difficulty if people returned these forms. They are available in public libraries, and post offices——

Deputy Andrews.—And in Garda stations?—I know they are available in libraries and in the small post offices.

I was under the impression the postmen delivered these forms and collected them?— No, the postmen do not collect them; the forms are folded and are supposed to be dropped into the nearest postbox.

426. Deputy Molloy.—Are these forms sent out in the Dublin area only?—They are supposed to be sent out in all areas. Some local authorities do not send them out, except in some areas where there is difficulty in ascertaining the number of electors. I think every household in Dublin gets one.

Deputy P. J. Burke.—That is true, but they do not return them.

427. Deputy Briscoe.—I have not noticed anywhere in the Account the cost of the Road Safety Campaign, which I understand comes under Local Government. Is there a particular reason for that?—It is financed largely out of the Road Fund.

428. Deputy P. Hogan.—There is no grant for the Road Fund in these Returns; the subheading has been lamentably dropped. It was £200,000 in the 1964-65 Returns and it was dropped at Budget time. Now it has disappeared completely?

Mr. Suttle.—This is a statutory provision; if the statutes do not make provision for the payment, it cannot be paid.

Deputy P. Hogan.—It means the local authorities are getting less help in funds than before, I presume?

Mr. Suttle.—It is a matter for the Dáil to make provision for it.

429. Deputy Briscoe.—Well, the answer to my question is that it comes from the Road Fund?—If I may give the amount of expenditure on Road Safety propaganda: in the year 1965-66 it came to £40,054, which is made up as follows—road safety literature took £3,856; production and purchase of films took £7,042; grants to the Safety First Association of Ireland took £21,748; our own expenditure on the Road Safety Campaign came to £5,935 and grants to local authorities came to £1,473.

430. Chairman.—In regard to item 2 in the Appropriations in Aid, have you any idea of the relation between the recovery from local authorities and the expenditure on these inquiries?—Local authorities pay the full cost of the inquiries.

431. In regard to items 2, 3 and 4 of the Appropriations in Aid it is stated there were increases in administrative expenses. Item 3 shows an increase of approximately three per cent, but the increase in item 4 is about 50 per cent. Could you comment on that? —Item No. 3 represents the cost of the staff employed on road work plus a proportion of staff, including audit staff and the establishment staff in the Department.

432. Deputy Molloy.—How many inquiries are referred to at item 2.—Costs payable by local authorities in relation to inquiries?—I have not got the figure here but I can let the Committee have a note.*

We should like to know where they were held and what they were in relation to.

433. Deputy P. Hogan.—Item No. 3 covers expenses repayable out of the Road Fund under the Road Traffic Act, 1961 and I should like to know what they are?— They are the salaries of the staff of the Department engaged in the Road Traffic Section, engaged in the Driver and Vehicle Testing Section and other staff such as those working in the Road Section proper. Some of these latter staff would be engaged in work arising out of the Special Employment Schemes Office and a proportion of their salaries would not be charged to the Road Fund. There would also be staff shared by the Road Section and other sections. There are also the Audit Section and the Establishment Section.

434. Deputy Molloy.—Is there any charge made for the hire of the film on water safety?—That has been issued free.

Has it been availed of and, if so, to what extent?—Yes, by rural organisations generally.

Is it available to any organisation who apply to the Secretary?—Yes.

435. I notice that under the heading “Extra Remuneration”, an Assistant Principal Officer received £292. This seems to have been in respect of two accounting years.

Mr. Suttle.—This officer was not entitled to anything in the way of overtime but where a man gives extra special and very long service the Minister at his discretion may pay him extra remuneration.

This was made up at the rate of £140 a year. Why was it paid in one sum?

Mr. Suttle.—It was paid only after the whole job was done.

Mr. Lawless.—He was performing the duty of a higher officer who had retired.

Deputy Molloy.—I was wondering why the amount paid in the financial year under review related to previous years.

The witness withdrew.

VOTE 18—STATIONERY OFFICE.

Mr. Brian Ó Brolcháin called and examined.

436. Chairman.—We shall consider Paragraph 28 of the Report of the Comptroller and Auditor-General:

“Subhead D.—Printing and Binding

28. Urgent bookwork printing for the Stationery Office is dealt with by a panel of four contractors whose tenders for the five year period 1960 to 1965 were accepted with the approval of the Government Contracts Committee. More than half in value of the printing in this category in the period was entrusted to the firm whose price was highest. In reply to my inquiry regarding the basis on which orders were allotted among the panel members I was informed that the contractor whose price is lowest is first considered but if that firm is not found suitable for the particular work or is unable to execute it, the next panel member is then considered.”

437. Has Mr. Suttle anything to add to the paragraph?

Mr. Suttle.—The procedure in the case of this urgent bookwork printing is rather unusual in that a panel of four contractors whose tendered prices differ are appointed for the work for a five-year period. The prices tendered for the period 1960 to 1965 ranged from 33⅓ per cent to 55 per cent over schedule rates. The same four firms were appointed for the period 1965 to 1970, the price range this time being from 110 per cent, inclusive of turnover tax, to 190 per cent, plus turnover tax, over schedule rates. I raised these questions because I was not satisfied that some of the work done under these contracts should have been urgent nor with the manner in which the particular panel member was selected.

438. Chairman.—Would Mr. Ó Brolcháin care to comment on this procedure, which seems very strange?

Mr. Ó Brolcháin.—When we get urgent work we want to be able to place it out quickly to make sure it is done in the specified time. We provide in the urgent work contract that it should be clearly understood that contractors on the panel will accept orders under the contract only when they are satisfied the delivery dates specified in the orders can be met. We state in the contract that it cannot be over-emphasised that the delivery requirements must be fulfilled and that the panel is designed to enable this objective to be achieved. That is our approach to the problem.

439. It seems from what the Comptroller and Auditor-General has said that the rates on the urgent bookwork jobs are much dearer than normal work of this kind. Is this tied up with the procedure?—Yes, to a degree.

To what degree?—Rates under ordinary contracts are said to be below normal commercial rates. Certainly we are not getting the service from printers that we should get. When we come to the urgent work, therefore, the prices go up.

440. Who decides the question of whether work is sufficiently urgent to be so classed? Is this left to the Department who want the work done or to the Stationery Office?— The demanding Department make the case that it is urgent and the Stationery Office decide. The Stationery Office would have the final say.

441. Would much time be saved by this process rather than the ordinary process?— In some cases a considerable amount of time would be saved. I might point out that there are three methods of getting the work done. The first is to place it on ordinary contract with the printer. The second method is to place it under an urgent contract and the third method is to go direct to one or more contractors, say we want the work done within a short time and how much will it cost. The urgent contract is the middle group. While it is often more expensive than the ordinary long-term group contract, it is not always so. In some cases we have found it cheaper to place the work under the urgent contract than under a standard contract. The matter of percentages could possibly best be explained by using illustrative figures.

442. Is this in relation to the information which you propose to give now?—Yes I should not like to quote actual figures because this might affect tendering. The figure of the lowest man might be, say, 30 per cent above in 1960. It might climb to, say, 60 per cent by 1965 when the contract terminated. For a new contract the same firm might quote, say 100 per cent above if they found that it did not pay to work at the lower rate. In such a case the firm would not be greatly interested in the work during the five years, 1960-1965 and, because of that, a lot of the work would go to the more expensive contractors on the panel. In the case of the next firm on the list, the story might be the same or, as actually happened, they were tied up in other work of ours and the amount of work they took from us under this contract was very limited indeed. I should explain the meaning of 30 per cent above and so on—it means above 100 per cent. In other words, the figure 30 per cent above would be 130 per cent of the rates listed in the contract. We specify rates in the contracts for each operation. The printer tenders for the work at the rates in the contract plus a percentage or minus a percentage. Therefore, when a printer takes a contract at 30 per cent above he charges 30 per cent in excess of the rates we have specified. If we have specified 100 shillings for a particular operation he would expect 130 shillings for it.

443. It strikes me, at this stage, not having technical knowledge, to be strange why the Stationery Office make the cost 100 and understand somebody will make the price above that?—Our contracts are extremely complicated documents. We have somewhat over 70 of them. They set out separate prices for the very many operations involved (stitching, punching, ruling and so on). At some time in the past prices were settled for the various operations. Necessarily those figures were inter-related; they measured the value of one operation as compared with another. It is not at all certain that the inter-relationship which was settled so many years back, is still necessarily true. I asked the printers some years ago if they wished to set up a sub-committee among themselves to suggest revised figures, if necessary. They considered the matter but they did not do anything about it so we still operate on the old relativities. There are set prices for the different operations. With the passage of time, increased pay and one thing and another, the printers found they could not do the work at the prices listed, but they accepted the prices as settling the inter-relationship, cost-wise, between one operation and another. The printers then tender for the work at a price 30 per cent above and so on. The contracts we are speaking about have up to now been five year contracts. With the passage of time, wages go up. It is provided in the contract that payments under the contract can be adjusted to meet increased wages— or decreased wages. The printers come to us from time to time and we make adjustments to meet the wage changes. The result of those adjustments would change the figure of 130 per cent to 160 per cent in the five years 1960 to 1965.

444. Mr. Suttle.—I was not so worried about the placement of the contract as about the work done under the contract. I sent a supplementary question to the accounting officer on the question of what was urgent work. While the explanation was fairly reasonable there were one or two things that did shake me a bit. One was the placing of a contract as an urgent bit of work for forms for stationery office contracts. I felt that should have been visualised 12 or 18 months previously. This production of forms for one’s own use as urgent work, is something unrealistic to me. If you like, that is the most blatant example. The money involved in those individual items is small. The extra cost in that particular case was £18. I wondered why should it have been urgent at all?—At this stage. I cannot say why this particular form had run out of stock. Forms do run out of stock. There are many reasons why stock items in the Stationery Office run out of stock from time to time. One is a sudden demand, you may have an unexpectedly heavy demand for some particular item. We handle many different things. There are about 800 items in stock. Those items may go out of stock if there is a sudden demand or if there is a delay waiting for new supplies. When we find ourselves faced with the position that an item is out of stock we may have to take action to replace it quickly. I am not convinced that we did anything wrong in this case. We must be able to supply forms when they are required.

445. Your explanation is that it is a breakdown of your own arrangement for providing the forms?—Not necessarily.

Have you not some arrangement that you would be notified when stock is going low? —We have a system of notification if stock is running low.

446. Mr. Suttle.—I want to refer to the particular item of contract forms, groups 22-24 and 27-30 marked on the list I sent you.

Mr. Ó Brolcháin.—Could I have the name? This looks like a mea culpa case. Possibly we should not have let the time run out. May I mention two points which may explain why it happened? We have had printed contract forms for many years. It was decided to put an end to the printed forms. They were a waste of time and money. Before the contract was placed the forms had to be sent out for printing and checked when they came in. It was decided to have a standard contract form, which would be produced by office copier. We were in the process of the change-over at this particular time. A side-effect of this was that printing of contract forms was delayed. There was a second factor. At that time it was found that some printers were giving poor service. A policy of dispensing with the services of unsatisfactory printers by terminating their contracts before the normal termination date was adopted. These were major steps and a side effect was that we delayed in printing new contract forms. In the ordinary course of events if a contract will not be renewed for five years it will be five years before we want that contract form again. The position may change suddenly if we terminate a contract because of bad service, or if a contractor says he wants to throw in a contract. In these cases forms must be obtained quickly. In the cases referred to by the Comptroller and Auditor General the delay was linked with other operations in the Office at that time, a change-over to stencilled contract forms which is still going on.

447. Deputy Molloy.—How many different types of contract forms are kept in stock?— We had at one time up to 100 different forms. We have reduced the number of forms now to 74. We have reduced the period from five years to one year in many cases. Also we have standardised the form, so that in many cases only one or two pages have to be substituted to convert one contract form into another.

448. When you are ordering the printing what is the usual number to order?—We do not now get them printed; we use an office copier. The contract forms are reproduced in the Office, and we do not have recourse to printing any more.

449. Chairman.—Paragraph 29 of the Report of the Comptroller and Auditor General reads as follows:

“Subhead G.—Office Machinery and other Office Supplies

29. Two address-card cutting machines were hired for the Revenue Commissioners from November 1961 pending the purchase of similar machines for permanent use. These were delivered in June 1962 at a cost of £91 each but the hired machines were not returned until May 1963 when charges accrued amounted to £468. The claim for hireage, received from the contractor in May 1963, was not settled until February 1966, the delay being due to the practice whereby the Stationery Office obtained through the Revenue Commissioners the sanction of the Department of Finance for the expenditure.”

450. Have you anything to add, Mr. Suttle?

Mr. Suttle.—The Revenue Commissioners had obtained the sanction of the Department of Finance to hire the two machines pending the delivery of the machines they were buying. These were delivered in June, 1962 but the hired machines were retained until May, 1963. The Stationery Office was unable to pay the hireage claim until the Revenue Commissioners had got covering sanction for the extended hireage.

451. It seems fantastic to pay £468 for hirage of machines, which were originally bought for £91 10s. Have you anything to say about this charge?—This case and those mentioned in paragraph 30 have one feature in common. Whilst we paid for the hireage of these machines, we were not in on the negotiations for hireage at all. We were not aware that these machines were out on hire beyond June, 1962, until we got a bill in May, 1963, or about that time. The question as to whether this bill should be paid was discussed between the Revenue Commissioners and the Department of Finance. We were not prepared to pay unless the Department of Finance gave their blessing to the payment. Whatever negotiations went on between the Department of Finance and the Revenue Commissioners are outside the scope of what I know at first hand. We got sanction dated the 4th January, 1966 to pay this excess hireage charge.

452. I do not want to interrupt you at this stage, but the question is one on the hireage charge. Was there any consideration about purchasing the machines at £91?— The Finance sanction specified hireage. I thought the total charge was scandalously high, so much so that even after we got Department of Finance sanction to pay we called in the managing director and pointed out to him that this charge for such a long period was exorbitant and that we should not be asked to pay it. He refused to give any reduction, and I was advised that we would have to pay and we paid in full. That is why there was a delay from January to February, 1966 in paying the bill—calling the managing director in and asking him to reduce his charge.

453. Have you any information as to why these arrears were kept for so long?—The Revenue Commissioners made their case to the Department of Finance and the latter considered the case. Finance authorised the expenditure.

454. The Department of Finance had to sanction this expenditure?—We would not have paid without Department of Finance sanction.

455. Mr. Suttle.—Would you not have considered that the hireage charge of £3 a week was more for the casual week? You were hiring a machine for a considerable period. Surely the £3 was for a casual week? It is unreasonable to pay £3 over a long period for a machine that cost £91.

Mr. Ó Brolcháin.—Our position here, Mr. Chairman, is that the hireage charges were not negotiated by the Stationery Office; we were told what the hireage charge would be.

456. Deputy Molloy.—Who negotiated the hire charge?—A firm figure was given to us in the sanction from the Department of Finance.

Mr. Suttle.—Who negotiated the hiring charges?—The Department of Finance sent us the sanction.

457. You are talking about 1965, but I am talking about 1961?—The 1961 Finance sanction specified the charge.

And the Department of Finance arrange it?

458. Chairman.—Mr. Doyle (An Roinn Airgeadais), the Department of Finance sanctioned this?

Mr. Doyle.—Application came from the Revenue Commissioners in September, 1961 for these card-cutting machines, amongst other equipment, and sanction was given on the 3rd November, 1961. That sanction included authority to go ahead and hire two machines for urgent work, pending receipt of two machines being purchased; and the rate was £3 per week, per machine.

459. Deputy P. Hogan.—Who negotiated the rates?—The Revenue Commissioners applied to the Department of Finance for authority to hire these machines at the rate of £3 per week.

460. Chairman.—Did the Department of Finance know this was to be a long term hireage?—No; they specified pending receipt of the machines purchased.

Deputy P. J. Burke.—You have been dealing with this firm, or at least the Stationery Office have been dealing with this firm over a number of years?

461. Deputy Molloy.—Are we to understand that the negotiation for the hireage of this machinery was not the responsibility of the Stationery Office at all, that it was the business of the Revenue Commissioners?— The Revenue Commissioners negotiated it and it was sanctioned by the Department of Finance.

Deputy Molloy.—Why are we discussing it here, then?

462. Chairman.—Might I put it to you at this stage, Mr. Doyle—is this a departure from the usual system where the Stationery Office is responsible for these things; they are being by-passed; it seems there is a lack of coordination between the Stationery Office, the Revenue Commissioners and the Department of Finance. There does not seem to be any coordination of effort in regard to this matter?—The arrangement is that the Department concerned will approach the Department of Finance, in the first instance; the Department of Finance has to look into the necessity for the equipment, to be satisfied it must be obtained. If there are no means of avoiding the purchase, this would normally entail discussion with the Department concerned. This is a direct discussion and, if the Stationery Office comes into it, it is a triangular affair.

463. Deputy Molloy.—Why does the Stationery Office come into a deal between the Revenue Commissioners and the Department of Finance?—It is a matter of centralisation in purchasing these machines for a Department; there are better rates to be got, et cetera.

Mr. Ó Brolcháin.—I think I should mention that this operation is in a small field. These is a small field of what we call “New equipment for O. and M. purposes”. In this field, there are special arrangements with a view to streamlining the procedure. I think that would cover most of the cases in mind.

Deputy Andrews.—What does O. and M. mean?—Organisation and Methods.

I did not mean that facetiously, but quite seriously——

Deputy Molloy.—I should like to express my belief in this; I am not at all clear why three Departments were involved in the hiring of two address-card-cutting machines. We are told it was the Revenue Commissioners who wanted them and the Department of Finance sanctioned them?

Chairman.—At the moment, Deputy, you are not eliciting information from either Mr. Ó Brolcháin or the Department of Finance in regard to this matter of procedure. Mr. Ó Brolcháin is here to give us what information he has in regard to it and the Committee can return to that later.

464. There is just one further point, Mr. Doyle, two and a half years seems to have been a very long time to have awaited sanction for this payment. Surely a delay like that could hardly be justified?

Mr. Doyle.—The fact is the application came from the Revenue Commissioners for payment of this bill in December, 1965 and it was cleared on 4 January, 1966.

465. But these machines were hired; they were not returned until May, 1963. The charges accruing between 1961 and 1963 are those with which I am concerned. The Department of Finance did not hear about them, then, until 1965?—Yes, that is correct; they were not aware of this position.

466. It seems that here centralisation seems to have broken down completely?

Mr. Ó Brolcháin.—We became aware of the position in 1963 and we referred the matter to the Revenue Commissioners at that point. We made it clear to the Revenue Commissioners we would not pay until we got Finance sanction. When we get a bill which requires Department of Finance sanction, and it is a bill for goods held by a Department, we inform the Department that this bill has been supplied to us and that we are not prepared to accept the charge on our Vote until they obtain Finance sanction. That is what we did in this case.

467. Chairman.—What I am putting to you is that this does not satisfactorily clear up the issue of why there was this time lag of two and a half years. It does not clear it up, to my satisfaction, as to why there was a two and a half year delay between these two.

Deputy Andrews.—I agree with the Chairman here, and I would ask that we get some sort of report back to the Committee on this transaction. I should like to have it clarified. In effect, this contract began in November, 1961 and the contractor was not paid until February, 1966. Somebody made the point that he was annoyed at being asked to reduce the sum of £468; I can appreciate this man’s position, if he was five years out of his money, in effect.

Chairman.—I think, Deputy Andrews, it is something the Committee will be considering. Perhaps the Committee might take a note of this and make a report on the matter. The Revenue Commissioners will be coming up next week.

468. Deputy P. J. Burke.—Anyway, Mr. Ó Brolcháin has given very clear and explicit information.—May I make just one point? So far as the Stationery Office is concerned— as you will understand, Mr. Chairman, I am concerned with the Stationery Office Vote —this did not become a charge to be borne by the Stationery Office Vote until I received Finance sanction of the 4 January, 1966. From 5 January, 1966, to 11 February, 1966, the period during which we held up payment, we interviewed the managing director and pressed him to reduce his charges but without success. Though I appreciate that the Committee may have other points in mind, with deference to them could I put it that this is not a Stationery Office delay.

Chairman.—I am sure that when the Committee come to deal with it they will make a note which will not be unfair to any of the parties concerned.

469. We now come to Paragraph 30 of the Comptroller and Auditor General:

“Subhead G.—Office Machinery and other Office Supplies

30. A considerable number of other claims for hireage of office machinery for the Revenue Commissioners were overdue for payment at 31 March 1966 and I was informed that payment had been withheld in some cases because the Stationery Office had not Department of Finance authority to pay and that in other cases information was required from the Revenue Commissioners to vouch the claims.

Having regard to the comments of the Public Accounts Committee on the question of delay by government departments in settling accounts I have deemed it necessary to draw attention to these matters.”

470. Has Mr. Suttle anything to add?

Mr. Suttle.—The Stationery Office practice in the case of hireage of office machinery is that the hiring Department obtain the sanction of the Department of Finance and a copy is sent to the Stationery Office. When the Stationery Office receive a claim for hireage in respect of which they hold no sanction or inadequate sanction, they request the hiring Department to obtain covering sanction. In the interim, the claims, which I understand amount to a considerable sum, remain unpaid.

471. So there are claims still unpaid. Could you give us any idea of the claims outstanding?

Mr. Ó Brolcháin.—The amount outstanding as of now would be £1,225 out of a total of £9,513.

How long has that been outstanding?— There is quite a run of sums going back some time. I am sorry I have not got actual dates but the amount still outstanding goes back over a number of years.

472. The point we are concerned with is why the Stationery Office have not sanction to make these payments or why they are let stand over?—I have the same regrets. In some of these cases we are still awaiting Department of Finance sanction and it may well be the Department of Finance are exploring the problem of whether these charges should be allowed at all. This type of inquiry may take a considerable time. Last year when I was before you it was mentioned that we had four or five bills outstanding for a long time but that we negotiated a settlement which showed a considerable saving as compared with what it might have cost the Exchequer had the negotiations not taken place. Apart from that consideration there is a question of vouching. We cannot pay a bill unless the Department concerned are prepared to give the necessary vouching information and sometimes bills are held up because we have not got that information.

473. It seems to me that in some of these cases the hiring was done without sanction? I shall put it to you this way: as far as the Stationery Office are concerned we had not yet had sight of a Department of Finance sanction.

474. Deputy P. Hogan.—Are there many other Departments in the same situation as the Revenue Department? Are there other Departments involved in this claims transaction?—No. This relates entirely to the one Office.

475. Deputy Molloy.—Could Mr. Ó Brolcháin explain the procedure involved when the Revenue Department make a purchase, say a duplicating machine? He has told us that the Stationery Office are a central purchasing office. Can the Revenue Department make a request to the Stationery Office to make a purchase of a duplicating machine, and do the Stationery Office make the purchase without calling for Department of Finance sanction?—We do not require sanction in these cases. The position is that there are certain machines——

476. This is a very small machine. If you need sanction for a machine that will cost £90 what is the procedure?—This matter of the £91 machines was part of a much larger system. If you take each individual item, it may be small but if the system is under Department of Finance control——

477. Deputy Kenny.—Has there been any delay in payments in cases in which sanction has not been necessary or must you have sanction for every transaction?—For the vast majority of transactions handled by the Stationery Office we do not require sanction.

478. My earlier point was whether in these cases there are delays in payments?—In cases where we handle them ourselves the answer broadly is no. Normally what we try to do, if we can, is to achieve payment within one month of receipt of the bill. This is not always possible because of the requirement to vouch delivery and so on but our aim is payment within one month.

479. In appears, therefore, as if delays are caused by waiting for sanction?—It can also arise where delivery is made direct to a Department. We cannot pay that bill until the Department concerned certify that they took delivery and that the machine was in good order. If the bill relates to a maintenance agreement we must be satisfied that the maintenance agreement is being carried out. Delays are due either to our awaiting sanction or awaiting vouching by the Department concerned.

480. Deputy Molloy.—How can the Committee find out the items in respect of which you need sanction and those for which sanction is not needed?

Chairman.—At this stage we are asking an omnibus question. Mr. Ó Brolcháin has told us he does not require sanction in regard to the matter before us today. The Committee might leave it at this stage until they come to deal with it on Report.

Deputy Molloy.—I should like to say that the system as it seems to operate does not appear to be as fair to Mr. Ó Brolcháin, who must come in here and carry the buck, as it might be.

Chairman.—Revenue will be here next week and perhaps we can ask the question then and at Report Stage we might make a comment on the system.

481. Deputy Molloy.—In regard to the sale of publications, could we inquire if the number of Dáil Debates purchased has increased? We got the figure for last year. What is the figure this year?—It is 155. Last year it was 138. I should mention that the bound volumes of the Dáil Debates are also obtained by a few libraries, like Cork city and county libraries.

482. Deputy Andrews.—I notice that the receipts in respect of notices in Iris Oifigiúil have gone down. Would it be possible to make copies of Iris Oifigiúil available to Deputies? I know they are in the library but that is not the same. I should like to have a copy sent regularly to me so I would not have to go to the trouble of going to the library.

Chairman.—If you make a request to the General Office you will get it.

Deputy Andrews.—It is a pity it is not sent to all Deputies.

Chairman.—A lot of those things are sent on request. If you make a request you will get it.

483. Deputy P. Hogan.—On the Accounts of the Government Publications Sale Office,* how does the loss in the profit and loss account compare with the previous year?— The last time we had £5,877 15s. 10d. and now it is £5,316. Since you mention the matter of a loss, might I explain why we have a loss. First, the Revenue Commissioners, with our concurrence, changed over from sale forms to free forms. They changed over, for the purpose of conveniencing the public, to free forms. That meant a loss of about £2,000 a year in the Sale Office accounts. Secondly, we found we had to give better services to the public in the case of the postal trade. We handle about 100 post orders a day and we set up a special section to handle this post trade. This increased our overheads.

The witness withdrew.

The Committee adjourned.

*See Appendix XXIV.

*See Appendix XXV.

*See Appendix XXVI.

*See Appendix XXVI.

*See Appendix XXVII.

*See Appendix XXVIII.

*See Appendix XXIX.

* Additional information furnished by Accounting Officer by note of 21 March 1967: “Dr. Nathaniel Lichfield and Associates, employed to report on planning and development in the Limerick Region, received £13,500, and £22,000 was paid to Professor Myles Wright in connection with a similar report on the Dublin region.”

*See Appendix XXX.

*See Appendix XXXI.

*See Appendix XXXII.

*See Appendix XXXIII.