Committee Reports > List of Committees > Dáil > 1968 > Committee of Public Accounts > Interim and Final Reports of the Committee - Appropriation Accounts 1966 - 1967

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

ACCOUNTS—GENERAL ACCOUNT

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

30th November, 1967.

ACCOUNTS—POSTAL SERVICE

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

30th November, 1967.

ACCOUNTS—TELEGRAPH SERVICE

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

30th November, 1967.

ACCOUNTS—TELEPHONE SERVICE

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

30th November, 1967.

ACCOUNTS—AGENCY SERVICES

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

30th November, 1967.

ACCOUNTS—BALANCE SHEET

Balance Sheet at 31st March, 1967.

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.

STATEMENTS—TELEPHONE CAPITAL REPAYMENTS: RECENT BALANCES

Statement Two: Telephone Capital Repayments

Statement Three: Balances over last Ten Years

Surplus or deficit (after charging Interest on Capital)

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.

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.

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