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

APPENDIX 2.

MINUTE OF THE MINISTER FOR FINANCE ON A REPORT DATED 14 JULY, 1967, OF THE COMMITTEE OF PUBLIC ACCOUNTS

PART I—GENERAL OBSERVATIONS.

Paragraph 1.

Following are the further observations of the Minister for Finance on matters raised in previous reports of the Committee of Public Accounts:—

REPORT DATED 12 NOVEMBER, 1964.

12. Irregularities in claims for guarantee payments by certain cattle exporters.

One of the cases was tried on a number of counts in the Central Criminal Court in June, 1967, and the Jury returned a verdict of “not guilty”. In pursuance of the directions of the Attorney General a Nolle Prosequi was entered in respect of the outstanding counts in the case, and in the Indictment in the other case.

34. Dwelling houses erected by Land Commission contractor—proceedings issued against sureties.

One of the sureties made an offer of £200, without prejudice, in discharge of his liability. Counsel advised acceptance and the sum has been received.

An offer of £100, without prejudice, made by the other surety was also accepted on counsel’s advice. This sum has not yet been paid.

REPORT DATED 10 MARCH, 1966.

25. Claims against St. Patrick’s Copper Mines, Ltd.

Avoca Mines, Ltd. have not yet exercised their option to purchase the assets of St. Patrick’s Copper Mines, Ltd.

REPORT DATED 17 NOVEMBER, 1966.

3. Audited accounts of bodies which receive subventions from voted moneys.

The Committee’s suggestion for a review of the accounts of bodies which receive subventions from voted moneys is still under consideration.

12. Intermediate river drainage schemes.

The Abbey and Brickey schemes have been completed and a costing examination of both schemes has been initiated. The results of this examination will be reported to the Committee when they become available.

14. Storm damage to glasshouses.

The loss arising from the glasshouses damaged by storm in 1961 was £34,894. Of the 32 glasshouses damaged, 10 were reconstructed. All but one of the others were disposed of by transfer, free of charge, to the occupiers of the holdings, who indemnified the State against claims for loss or damage. The question of the disposal of the remaining glasshouse is still being pursued.

17. National Gallery—lending of pictures.

The Minister has agreed to give the Board of Governors of the National Gallery an indemnity covering loss of or damage to pictures on loan from the Gallery, provided that the Director of the Gallery is satisfied with the security aspects of the place of exhibition and with the staffing arrangements and that the local authority concerned undertakes in writing to refund to the Minister one half of any compensation he may have to pay under the indemnity.

21. Overlapping of functions between An Foras Forbartha Teoranta and the National Building Advisory Council.

Negotiations for the merger of An Foras Forbartha and the National Building Advisory Council have been concluded and the details are being finalised.

27. Possibility of duplication of functions and overlapping of efforts in provision of technical assistance.

The Department of Industry and Commerce have confirmed that there is no significant overlapping between the semi-State bodies operating in the productivity field. It is now giving special consideration to the role of the various bodies providing management education facilities.

REPORT DATED 22 FEBRUARY, 1961.

Paragraph 2.

3. Payments for water supplies.

The question of recovering duplicate payments for water supplied to certain State-owned premises is being dealt with in conjunction with a review, with the five local authorities concerned, of water supply agreements. This review has proved to be very protracted.

The duplicate payments arose out of changes in the rating law effected by the Local Government Act, 1946, which among other things abolished separate water rates, except for water supplied for non-domestic use. The State contribution in lieu of rates on Government property from then on contained an element which duplicated payments which continued to be made to the local authorities in accordance with the terms of the long-standing water supply agreements. The exact extent of the duplication, which ceased in 1958 when the payments were centralised through the Valuation Office, cannot be precisely determined as rating authorities do not show separately what element of their annual rate is in respect of domestic water supply and the ratio of the water supplied for domestic use to that supplied for non-domestic use in the State premises in question is not known. Indeed failure so far to reach agreement on the quantity of water now being supplied for non-domestic purposes is the main cause of the protraction of the review. Metering tests have been completed in one area but the results have not yet been accepted by the local authority. The Committee will be kept informed.

Paragraph 3.

12. Consumption of electricity.

The Department of Defence buys from the Electricity Supply Board all electricity used in any barracks and distributes part of the supply to occupants of married quarters through equipment owned by the Department.

The basic issue here was the control of excessive electricity consumption in married quarters involving loss to public funds. This control was achieved when separate meters were installed in these quarters in 1963, thus eliminating the loss to State funds.

The second—and less important—issue is whether the Electricity Supply Board should take over from the Department of Defence the responsibility for supplying electric current directly to the married quarters. The Electricity Supply Board and the Department of Defence have now agreed in principle on the terms on which the Board will take over the direct supply of current to married quarters in all military barracks except the Curragh.

The Curragh is in a special position and it may be found that the balance of advantage lies in leaving the present arrangements there undisturbed.

REPORT DATED 17 NOVEMBER, 1966.

Paragraph 4.

19. Restoration and adaptation of Royal Hospital, Kilmainham.

The second stage is still only being planned. The work will be done by way of lump sum contract or contracts. In such contracts the tender price covers the use of any necessary scaffolding and plant and the payment of special hireage charges does not arise.

Paragraphs 5 and 6.

These paragraphs do not appear to call for comment.

Paragraph 7. Overtime in Government Departments.

As and from 1966/67, total expenditure on overtime is being shown in a note to each Appropriation Account concerned.

Paragraph 8.

24. Register of State properties administered by Department of Defence.

Arrangements have been made with the Chief State Solicitor’s Office, which is now handling this work, that priority will, as far as possible, be given to the vesting in the Minister for Defence of the State’s interest in properties owned or leased by the State and administered by that Department. This is necessarily a slow process; the procedure for the transfer of title in each of these properties to the Minister for Defence is, however, being designed to reduce to a minimum the subsequent work of recording the details of the title in the Register of Properties maintained in the Department of Defence.

The number of properties described at C of the Minister’s minute of 28 February, 1967, which have been registered has increased from 12 to 46.

REPORT DATED 14 JULY, 1967.

PART II—PARTICULAR ACCOUNTS.

MISCELLANEOUS EXPENSES.

Paragraph 9. Cost of rebuilding the Abbey and Peacock Theatres.

The cost, including professional fees and expenses, of the contract for rebuilding the Abbey and Peacock Theatres is now estimated at £725,000 which is £75,000 more than the estimate furnished to the Committee in April last. The increase is accounted for as follows:—

The Minister shares the concern of the Committee at the extent of the under-estimation on this case. He is informed that, because of the complex nature of this project, planning was only in an elementary stage when the original estimate was given; that because of site limitations, much experimentation and improvisation was involved in producing the final working plans; that site restriction also meant expensive work in providing twin-level basement areas and high building to provide dressing-rooms and other facilities; and that the site and construction plan also involved costly ventilation and safety measures. He is also informed that much of the extra stage, ceiling and lighting arrangements were designed to improve flexibility of the theatre and to minimise maintenance costs.

The professional advisers engaged on this project have indicated that their fees are within the normal published scales of fees of the professional bodies concerned. As the Committee is already aware, the professional bodies representing architects, quantity surveyors and civil engineers have rejected the suggestion, previously made by the Committee, that fees should be measured against work performed instead of against costs.

HEALTH.

Paragraph 10. Statements relating to expenditure, etc. by health authorities.

The Department of Health will arrange in future years to forward these statements as long as possible before the Committee’s examination of the Accounting Officer.

Paragraph 11. Expenditure by health authorities on drugs and medicines.

Medical inspectors of the Department of Health, when visiting dispensaries, are furnished with details of the cost of medicines and drugs issued to the various dispensaries in the previous twelve months. They inspect the stocks to ascertain if there is over-stocking or retention of old or out-of-date items. It was not possible in recent years to maintain regular inspection of dispensaries because of vacancies in the medical inspectorate. The position in this respect is, however, now improving.

An additional Pharmacist is being appointed to the Department. He will devote most of his time to local inspections and this should assist in the control of expenditure on drugs and medicines.

It would be very costly and difficult to arrange a system of adequate clerical assistance to maintain stock records for approximately 670 dispensary doctors.

In the Central Pharmacies in Dublin and Limerick general comparisons are made in relation to previous issues over a number of months to various dispensaries. The Chief Pharmacist in these Central Pharmacies also visits dispensaries and ensures, as far as possible, that they are not over-stocked and that stock likely to go out-of-date is returned to the Central Pharmacy for early use elsewhere. He maintains a constant review of the costing of drugs and medicines used at the various dispensaries and enquires into any notable increases. Information is also supplied to doctors on the availability of non-proprietary equivalents of proprietary medicines.

The cost of medicines supplied to persons other than those covered by medical cards amounted to £35,520 in the year ended 31st December, 1966. This is not a major item in the overall increase in the cost of medicines.

The arrangements for stock control of medicines supplied under the general medical service will be kept under review in relation to any changes in the structure of the service.

NATIONAL GALLERY.

Paragraph 12. Conservation of works of art.

This paragraph does not appear to call for comment.

PUBLIC WORKS AND BUILDINGS.

Paragraph 13. Site for fisheries research station.

A site at Galway Harbour, which was the property of Galway Harbour Commissioners, was originally chosen for the Fishery Research Station but the Commissioners eventually refused to sell this site and an alternative had to be sought.

The Departments of Health and Defence were then asked whether a suitable area was available in their properties in Galway, viz. Merlin Park and Renmore Military Barracks. The replies were in the negative.

The three plots of land near Merlin Park, Galway, had been disposed of by the Department of Health before the refusal of the Harbour Commissioners to sell the Harbour site made it necessary to seek an alternative. None of the three sites would, in any case, have been suitable.

An exhaustive search was made and an advertisement issued for a suitable alternative site. A number of sites came to notice but all were turned down on account of distance from Galway city, or difficulty of access, or lack of public services. The site eventually bought was the only suitable one available. The owner was not prepared to sell part of it and would not take less than £9,000. In the absence of compulsory powers of acquisition there was no alternative but to pay this price for it.

Plans are being prepared for the buildings to be erected on the site. Until these have been completed it will not be possible to say whether any portion of the site could or should be disposed of.

Paragraph 14. Conversion of Templemore Military Barracks.

The report of the independent consultant on the swimming pool has been received and is the subject of correspondence between the Department and the architect and contractor.

Paragraph 15. Underestimation of cost of certain works.

The Committee’s comments about the importance of having realistic estimates before entering into financial commitments have been brought to the notice of all concerned.

The accurate estimation of the cost of repairs, adaptation works or improvements to old buildings presents a special difficulty. Structural defects or weaknesses often exist of which no superficial evidence is apparent to the architect. Dealing with such defects, when revealed, usually adds very substantially to the original estimated cost. For this reason, firm estimates for works on old buildings cannot be given in advance. Whilst all proposals involving such works will continue to be considered most carefully, estimates of cost can only be provisional; inevitably there will be cases where the best estimates that can be made will be exceeded.

SOCIAL WELFARE.

Paragraph 16. Overpayments of old age pensions.

The records have been corrected and are now considered reasonably reliable, having regard to the constantly changing composition of the register of old age pensioners.

POSTS AND TELEGRAPHS.

Paragraph 17. Suspense Accounts.

This paragraph does not appear to call for comment.

Paragraph 18. Post Office Commercial Accounts.

The Department of Posts and Telegraphs has given an assurance that it will make every effort to meet the Committee’s wishes that these accounts should be available as far as possible in advance of the Committee’s examination of the Accounting Officer.

DEFENCE.

Paragraph 19. Recovery from film company of cost of military personnel, equipment, etc.

Following further negotiations with the film company concerned, a final claim for £77,300 was made and this has been paid.

With the experience gained in this case, the method of assessing the charges for similar services and facilities has been simplified. Advance payment will be requested to such extent as it is feasible to estimate and collect in advance of the facilities being provided.

LOCAL GOVERNMENT.

Paragraph 20. Standard of administration in local taxation office.

An Organisation and Methods examination of the motor taxation office is in progress. Four interim reports have been furnished so far. The final report is still awaited.

STATIONERY OFFICE.

Paragraph 21. Urgent bookwork printing.

In five of the eleven jobs placed under the urgent bookwork contract to which the Comptroller and Auditor General drew attention, the cost of printing was less than it would otherwise have been; in one case the cost was the same; in the remaining five cases the cost was greater. The Minister understands that in none of these cases was there neglect to place an order in good time leading to the payment of an incentive above ordinary rates.

Procedures in the Stationery Office are reviewed regularly and efforts are continuously made to improve the service.

Paragraph 22. Delay in payment of accounts for, and prolonged hire of, office machinery.

The Revenue Commissioners have already explained to the Committee the circumstances in which, as a result of oversight in their Office, there were delays in the settlement of outstanding accounts. They have made arrangements to ensure that similar oversights will not recur.

The special attention of all Departments has been drawn to the necessity for the closest liaison with the Stationery Office and, as appropriate, with the Department of Finance, in relation to retention of hired machinery and payment of accounts of this nature.

TRANSPORT AND POWER.

Paragraph 23. Cork Airport—underestimation of cost of erecting buildings.

The Committee’s observations on the importance of realistic estimates in the sphere of financial control have been noted.

Paragraph 24. Cork Airport—repairs to windows to prevent leaks.

The Minister understands that statistics of rainfall and wind were compiled for the Cork Airport site only from 1960 and 1962, respectively, and no complete records of weather conditions were available at the planning stage. The type of construction planned for the buildings had been proved adequate in normal conditions of exposure, both at home and abroad. It was not possible to draw on local experience as there were no high buildings in the vicinity but similar construction at Dublin Airport, which is also on an elevated and exposed site, had not led to any difficulties. The penetration was found to take place only when there was a combination of high winds and heavy rain. If the necessity for a special type of construction could have been foreseen, the initial cost of the building would have been much higher.

OFFICE OF THE REVENUE COMMISSIONERS.

Paragraph 25. Checks on returns of taxable turnover.

Up to now, attention has been directed principally to the areas outside Dublin and the audit programme has been completed in 12 of the 15 country districts. At least 30% of the persons registered in those districts have been examined, and, in addition, some checking has been done to ensure that unregistered businesses were, in fact, not required to be registered. When the audit has been completed in the remaining country districts in a few months time, it is intended to concentrate on the Dublin area.

In the year to 31 March, 1967, the audit has disclosed discrepancies in 320 further cases, of which 2 involved negligence or fraudulent evasion of tax. Prosecution proceedings have been successfully completed in 20 of these cases and 9 others are still in the initial stages. The remaining cases were settled on payment of a total of £49,073 representing tax underpaid together with interest and, in some cases, an additional sum representing compromise penalties.

AGRICULTURE.

Paragraph 26. Scheme of grants for calved heifers.

A suitable formula to explain the discrepancy between the number of heifer grants paid and the lower overall increases in the cow population would have to measure the following factors operating towards decreasing cow numbers in the national herd:—

(a) mortality of cows,

(b) slaughtering of cows at licensed factories,

(c) slaughtering of cows at unlicensed premises, e.g., butchers,

(d) exports.

Offsetting factors operating towards an increase in numbers are:—

(a) the overall intake of calved heifers (not merely those attracting grants),

(b) imports.

While some of the above factors are measurable with reasonable accuracy, others (in particular the total intake of calved heifers into herds) are not, so that any close reconciliation is impossible.

Heifer grants are paid to all individual herds which can show that the number of cows in the herd at the time of inspection has increased over that recorded in a base year, as established from the herd’s bovine tuberculosis records, provided that the increase was achieved in terms of calved heifers.

It is inevitable that the number of grants paid on increases in participating herds would be greater than the overall increase in the national herd because of removal, without replacement, of cows in both participating and non-participating herds, for reasons of infertility, mortality, unsuitability, T.B. eradication, farm management and so on. The scheme was so designed, however, that animals from participating herds had to be replaced and the herd increased before the herd could again participate in the scheme.

Paragraph 27. Accounts of An Bord Bainne.

The Department of Agriculture and Fisheries has undertaken to try to ensure, that, in future, the accounts will be available in good time for consideration by the Committee. The accounts for the year ended 31 March, 1967, were presented to both Houses of the Oireachtas on 13 September, 1967.

Paragraph 28. Bank interest on overdraft of An Bord Grain during bank strike.

The Committee’s views have been noted and will be borne in mind in the event of similar circumstances arising in the future.