Committee Reports::Interim and Final Reports of the Committee - Appropriation Accounts 1966 - 1967::27 June, 1968::Appendix

APPENDIX 10.

DEPARTMENT OF POSTS AND TELEGRAPHS

Commercial Accounts—Year ended 31st March, 1967

Presented to the Oireachtas pursuant to the Telegraph (Money) Act, 1920, the Exchequer and Audit Departments Act, 1921, and the Telephone Capital Acts, 1924 to 1963.


INTRODUCTORY NOTE

The Commercial Accounts present the position of the Department of Posts and Telegraphs as a trading concern. They consist of Income and Expenditure Accounts and a Balance Sheet, compiled in accordance with commercial practice. They are used to determine financial policy, including the fixing of charges to the public.


The Oireachtas controls, both in total and in some detail, the money spent by Government Departments. The Department obtains authority from the Oireachtas for its expenditure, other than on capital works financed by borrowings from the Exchequer under the Telephone Capital Acts, 1924-1963, by way of an annual Estimate, and accounts for it in an Appropriation Account. Cash revenue is paid into the Exchequer and is accounted for in the Finance Accounts.


ACCOUNTS—SUMMARY OF RESULTS

 

1966/67

1965/66

 

£000

£000

General Account:

 

 

Income

..

..

..

..

..

..

21,087

19,891

Expenditure

..

..

..

..

..

21,518

19,550

Surplus

..

..

..

..

..

..

341

Deficit

..

..

..

..

..

..

431

Postal Account:

 

 

Income

..

..

..

..

..

..

8,252

7,981

Expenditure

..

..

..

..

..

8,505

7,942

Surplus

..

..

..

..

..

..

39

Deficit

..

..

..

..

..

..

253

Telegraph Account:

 

 

Income

..

..

..

..

..

..

774

732

Expenditure

..

..

..

..

..

979

924

Deficit

..

..

..

..

..

..

205

192

Telephone Account:

 

 

Income

..

..

..

..

..

..

10,161

9,367

Expenditure

..

..

..

..

..

10,134

8,873

Surplus

..

..

..

..

..

..

27

494

Agency Account:

 

 

Income

..

..

..

..

..

..

1,900

1,811

Expenditure

..

..

..

..

..

1,900

1,811

ACCOUNTS—GENERAL ACCOUNT

Income and Expenditure for Year ended 31st March, 1967.


Income 

1966/67

1965/66

 

£

£

Postal service

..

..

..

..

..

..

8,252,258

7,980,959

Telegraph service

..

..

..

..

..

773,646

732,164

Telephone service

..

..

..

..

..

10,161,078

9,367,441

Agency services

..

..

..

..

..

1,900,319

1,810,211

Deficit

..

..

..

..

..

..

..

430,722

Total 

..

21,518,023

19,890,775

Expenditure 

1966/67

1965/66

 

£

£

Salaries, Wages, etc.

..

..

..

..

..

12,227,373

10,970,891

Pension Liability

..

..

..

..

..

868,040

775,727

Accommodation

..

..

..

..

..

677,950

632,148

Materials and Transport

..

..

..

..

1,203,977

1,162,158

Conveyance of Mails

..

..

..

..

..

1,049,379

1,190,450

Payments to foreign administrations

..

..

401,450

390,503

Depreciation on Plant and Buildings

..

..

2,193,822

1,962,764

Interest

..

..

..

..

..

..

2,554,349

2,157,456

Miscellaneous

..

..

..

..

..

..

341,683

307,749

Surplus

..

..

..

..

..

..

340,929

Total 

..

21,518,023

19,890,775

J. A. SCANNELL,


Accounting Officer,


30th November, 1967.


ACCOUNTS—POSTAL SERVICE

Income and Expenditure for year ended 31st March, 1967.


Income 

1966/67

1965/66

 

£

£

Mail Services

..

..

..

..

..

..

7,880,683

7,664,635

Remittance Services:

 

 

Money Order poundage, etc.

..

..

..

105,793

60,677

Postal Order poundage, etc.

..

..

..

169,432

152,648

Miscellaneous

..

..

..

..

..

..

96,350

102,999

Deficit

..

..

..

..

..

..

..

252,297

Total 

..

8,504,555

7,980,959

Expenditure 

1966/67

1965/66

 

£

£

Salaries, Wages, etc.

..

..

..

..

..

6,247,255

5,693,942

Pension Liability

..

..

..

..

..

360,795

332,631

Accommodation

..

..

..

..

..

88,325

94,697

Materials and Transport

..

..

..

..

492,174

409,285

Conveyance of Mails

..

..

..

..

..

1,049,379

1,190,450

Payments to foreign administrations

..

..

72,327

70,021

Depreciation on Buildings

..

..

..

..

19,243

15,908

Interest

..

..

..

..

..

..

..

64,846

55,335

Miscellaneous

..

..

..

..

..

..

110,211

80,031

Surplus

..

..

..

..

..

..

..

38,659

Total 

..

8,504,555

7,980,959

J. A. SCANNELL,


Accounting Officer


30th November, 1967.


ACCOUNTS—TELEGRAPH SERVICE

Income and Expenditure for Year ended 31st March, 1967.


Income 

1966/67

1965/66

 

£

£

Telegrams

..

..

..

..

..

..

468,838

462,680

Telex

..

..

..

..

..

..

..

188,425

164,297

Private Wire Rentals

..

..

..

..

..

77,830

72,249

Miscellaneous

..

..

..

..

..

..

38,553

32,938

Deficit

..

..

..

..

..

..

..

205,284

192,145

Total 

..

978,930

924,309

Expenditure 

1966/67

1965/66

 

£

£

Salaries, Wages, etc.

..

..

..

..

..

585,707

539,781

Pension Liability

..

..

..

..

..

38,934

35,971

Accommodation

..

..

..

..

..

42,554

43,907

Materials and Transport

..

..

..

..

57,062

52,335

Payments to foreign administrations

..

..

129,804

139,833

Depreciation on Plant and Buildings

..

..

34,311

32,888

Interest

..

..

..

..

..

..

69,839

60,516

Miscellaneous

..

..

..

..

..

..

20,719

19,078

Total 

..

978,930

924,309

J. A. SCANNELL,


Accounting Officer


30th November, 1967.


ACCOUNTS—TELEPHONE SERVICE

Income and Expenditure for Year ended 31st March, 1967.


Income 

1966/67

1965/66

 

£

£

Exchange Line Rentals, etc.

..

..

..

..

2,527,717

2,376,690

Private Wire Rentals, etc.

..

..

..

..

171,410

183,919

Trunk Call fees

..

..

..

..

..

4,265,643

3,830,765

Local Call fees

..

..

..

..

..

..

2,499,838

2,292,111

Call Office Receipts

..

..

..

..

..

505,047

482,352

Miscellaneous

..

..

..

..

..

..

191,423

201,604

Total 

..

10,161,078

9,367,441

Expenditure 

1966/67

1965/66

 

£

£

Salaries, Wages, etc.

..

..

..

..

..

3,993,313

3,463,049

Pension Liability

..

..

..

..

..

353,060

306,178

Accommodation

..

..

..

..

..

491,606

438,162

Materials and Transport

..

..

..

..

431,024

417,043

Payments to foreign administrations

..

..

199,319

180,649

Depreciation on Plant and Buildings:

 

 

 

£

£

 

 

At prime cost

..

..

1,853,901

(1,609,980)

 

 

Supplementary provision

275,000

(295,000)

 

 

 

2,128,901

1,904,980

Interest

..

..

..

..

..

..

..

2,381,358

2,010,342

Miscellaneous

..

..

..

..

..

..

155,638

152,623

Surplus

..

..

..

..

..

..

..

26,859

494,415

Total 

..

10,161,078

9,367,441

J. A. SCANNELL,


Accounting Officer.


30th November, 1967.


ACCOUNTS—AGENCY SERVICES

Income and Expenditure for year ended 31st March, 1967.


Income 

1966/67

1965/66

 

£

£

Social Welfare Services

..

..

..

..

612,573

590,949

Savings Bank and Prize Bonds

..

..

..

342,722

330,772

Savings Certificates and Stamps

..

..

..

132,727

99,761

Collection of broadcasting licence fees

..

..

192,688

193,059

Civil Aviation and Coast Radio

..

..

..

314,586

363,761

Provision of Stores

..

..

..

..

..

139,894

133,832

Miscellaneous

..

..

..

..

..

..

165,129

98,077

Total 

..

1,900,319

1,810,211

Expenditure 

1966/67

1965/66

 

£

£

Salaries, Wages, etc.

..

..

..

..

..

1,401,098

1,274,119

Pension Liability

..

..

..

..

..

115,251

100,947

Accommodation

..

..

..

..

..

55,465

55,382

Materials and Transport

..

..

..

..

223,717

283,495

Depreciation on Buildings

..

..

..

..

11,367

8,988

Interest

..

..

..

..

..

..

..

38,306

31,263

Miscellaneous

..

..

..

..

..

..

55,115

56,017

Total 

..

1,900,319

1,810,211

J. A. SCANNELL,


Accounting Officer.


30th November, 1967.


ACCOUNTS—BALANCE SHEET

Balance Sheet at 31st March, 1967.


Assets 

31st March, 1967

31st March, 1966

 

£

£

£

£

Fixed 

 

 

 

 

Plant and Buildings (see note 8 (a), page 12)

..

 

43,294,179

 

38,665,959

Current 

 

 

 

 

Engineering stores in stock

3,598,416

 

3,569,230

 

Debtors for revenue

..

2,598,339

 

2,342,862

 

Cash: On capital account

..

251,381

 

45,048

 

On revenue account

..

2,386,260

 

2,265,411

 

Subscribers’ deposits

..

15,000

8,849,396

15,000

8,237,551

 

 

52,143,575

 

46,903,510

 

 

 

 

 

Liabilities 

31st March, 1967

31st March, 1966

 

£

£

£

£

Capital 

 

 

 

 

Exchequer for capital advances (see note 8 (b),

 

 

 

 

page 12)

..

..

 

47,063,324

 

42,086,320

Current 

 

 

 

 

Sundry creditors:

 

 

 

 

For engineering stores

80,652

 

193,917

 

For revenue

..

..

624,596

 

483,751

 

Exchequer for revenue not

 

 

 

 

yet paid over

..

..

4,375,003

 

4,139,522

 

 

 

5,080,251

 

4,817,190

 

 

52,143,575

 

46,903,510

J. A. SCANNELL,


Accounting Officer.


30th November, 1967.


NOTES ON THE ACCOUNTS, 1966/67.

1. Accrual of Income and Expenditure


The accounting system of the Department is on a receipts and payments basis, but in these accounts the expenditure incurred and income due for the year are shown. Exceptionally, in the case of salaries and certain other expenses and services, where the variation would be small, or difficult to ascertain, the actual payments and receipts are normally taken as the expenditure and income for the year.


2. Apportionment of Common Service Expenditure


As far as possible expenditure on the operation of the Department’s services is directly apportioned to the postal, telegraph or telephone service as incurred. Most non-engineering expenditure cannot be so apportioned and, where necessary, an estimated apportionment is made on a statistical basis.


3. Pension Liability


This is the estimated contribution that would need to be made to a fund to provide the superannuation and related benefits accruing to established staff now serving.


4. Accommodation


This includes maintenance and repair of buildings, rent, rates, minor building works and alterations, furniture, water, electricity and fuel, but excludes depreciation and interest on capital costs. The cost is apportioned to the different services on the basis of user.


5. Depreciation


(a) Plant—The straight line method of depreciation is used. The prime cost of each type of plant is depreciated in accordance with the estimated life. In view of rising costs, the adequacy of the present basis is under examination, and, pending the result, a supplementary provision of £275,000 has been made in the case of telephone plant. Engineering stores are depreciated when brought into use.


(b) Buildings—Depreciation and interest are covered by annuities set up when costs are incurred.


6. Interest


The rates of interest are prescribed by the Minister for Finance. The interest paid in 1966/67 represented 5.8 per cent on outstanding capital. The average interest payable on new capital is 6.5 per cent.


7. The Agency Services Account


This Account shows the value of services which for reasons of convenience or economy, the Department performs on behalf of other Government Departments (e.g. the payment of Social Welfare benefits and the issue of various licences at post offices). As from the 1st April, 1964, all agency services performed by the Department have been placed on a cash basis, except for the collection of broadcasting licence fees. (These fees are paid in full into the Exchequer and a grant of an equivalent amount less the costs of collection, etc., is made from the Exchequer to Radio Telefís Éireann.) Payments by the Department for the services it receives from other Departments are included in the expenditure shown in the Postal, Telegraph and Telephone Services accounts.


8. The Balance Sheet


(a) Assets—Fixed assets are shown at prime cost. Details are given in Statement One on page 13.


(b) Liabilities—The figure of £47,063,324 for capital liabilities represents the net total (allowance having been made for depreciation provision) of advances under the Telephone Capital Acts 1924-1963 and other amounts furnished by the Exchequer for the provision of fixed assets, i.e. plant and buildings, and stocks of engineering stores.


STATEMENTS—FIXED ASSETS

Statement One: Fixed Assets for the year ended 31st March, 1967.


 

Telegraph Plant

Telephone Plant

Accommodation Plant 

Land

Buildings

Total

 

£

£

£

£

£

£

At 31 March, 1966, Value at

 

 

 

 

 

 

Prime Cost

...

...

733,250

43,686,517

503,983

287,974

4,650,818

49,862,542

Less: Depreciation

...

...

102,082

10,296,198

231,967

566,336

11,196,583

Depreciated Value

...

631,168

33,390,319

272,016

287,974

4,084,482

38,665,959

Changes in 1966/67, VALUE Prime Cost at 31 March,

 

 

 

 

 

 

1966 (as above)

...

733,250

43,686,517

503,983

287,974

4,650,818

49,862,542

Additions during 1966/67

83,839

5,372,100

153,312

14,233

446,548

6,070,032

 

817,089

49,058,617

657,295

302,207

5,097,366

55,932,574

Less: Assets written out

 

 

 

 

 

 

during 1966/67

...

...

Gross value at 31 March, 1967

817,089

*49,058,617

657,295

302,207

5,097,366

55,932,574

DEPRECIATION

 

 

 

 

 

 

Depreciation at 31 March,

 

 

 

 

 

 

1966 (as above)

...

102,082

10,296,198

231,967

566,336

11,196,583

Add: Provision for 1966/67

27,000

2,100,630

39,583

26,609

2,193,822

 

129,082

12,396,828

271,550

592,945

13,390,405

Less: Cost of renewals

 

 

 

 

 

 

1966/67

...

...

...

77,962

663,427

10,621

752,010

Depreciation at 31 March,

 

 

 

 

 

 

1967

...

...

...

51,120

11,733,401

260,929

592,945

12,638,395

NET VALUE at 31 March, 1967 (as shown in Balance

 

 

 

 

 

 

Sheet)

...

...

...

765,969

37,325,216

396,366

302,207

4,504,421

43,294,179

 

£

Overhead wires, poles, etc.

...

...

...

14,277,568

Underground cables and ducts

...

...

16,089,186

Exchange equipment

...

...

...

...

17,919,350

Submarine Cables

...

...

...

...

148,979

Television Link

...

...

...

...

470,873

Telecommunications Satellites

...

...

92,814

Other equipment

...

...

...

...

59,847

 

£49,058,617

STATEMENTS—TELEPHONE CAPITAL REPAYMENTS: RECENT BALANCES

Statement Two: Telephone Capital Repayments


Annuities paid to the Department of Finance in respect of advances under the Telephone Capital Acts, 1924—1963

Capital Repayment

Interest

Total

 

£

£

£

Year ended 31st March, 1967

..

1,148,208

2,083,661

3,231,869

Statement Three: Balances over last Ten Years


Surplus or deficit (after charging Interest on Capital)


Year

Postal

Telegraph

Telephone

Total

 

£

£

£

£

1957/58

..

+104,999

-177,556

+366,377

+293,820

1958/59

..

+4,672

-140,144

+413,048

+277,576

1959/60

..

+129,771

-136,867

+396,179

+389,083

1960/61

..

+91,291

-149,524

+426,822

+368,589

1961/62

..

-75,489

-195,113

+281,634

+11,032

1962/63

..

-99,031

-201,095

+346,734

+46,608

1963/64

..

-170,447

-191,228

+197,111

-164,564

1964/65

..

-144,798

-279,264

+356,783

-67,279

1965/66

..

+38,659

-192,145

+494,415

+340,929

1966/67

..

-252,297

-205,284

+26,859

-430,722

CERTIFICATE OF THE COMPTROLLER AND AUDITOR GENERAL

I have examined the foregoing Accounts and Balance Sheet in accordance with the provisions of the Exchequer and Audit Departments Act, 1921. I have obtained all the information and explanations that I have required and I certify, as the result of my audit, that in my opinion these Accounts and Balance Sheet together with the notes thereon and Statement I (Fixed Assets) are properly drawn up so as to exhibit a true and fair view of the transactions and state of affairs of the services to which they relate, subject to the observations in my report.


E. F. SUTTLE,


Ard Reachtaire Cuntas agus Ciste.


(Comptroller and Auditor General).


REPORT OF THE COMPTROLLER AND AUDITOR GENERAL

Results of the Accounts


As shown in the General Account of Income and Expenditure there was a deficit of £430,722 on all services as compared with a surplus of £340,929 in the previous year. The separate accounts show a surplus of £26,859 on the Telephone service and deficits of £252,297 and £205,284 on the Postal and Telegraph services respectively.


Pension Liability and Depreciation of Telephone Plant


I am informed that the investigations referred to in my reports on the accounts in recent years, into the adequacy of the provisions for pension liability and for telephone plant depreciation are nearing completion. The supplementary provision of £275,000 for telephone plant depreciation shown in the accounts for the year under review has been made in view of the probable effects of rising costs on replacement.


E. F. SUTTLE,


Ard Reachtaire Cuntas agus Ciste.


(Comptroller and Auditor General).


12 Nollaig, 1967.


* An analysis of this sum is as follows:


Accommodation Plant. The amounts shown under this heading are mainly in respect of heating and lighting installations and are common to all services