Committee Reports > List of Committees > Dáil > 1969 > Committee of Public Accounts > Report - Appropriation Accounts 1967 - 1968

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 13 Feabhra, 1969

Thursday, 13th February, 1969

The Committee met at 11 a.m.

Mr. E. F. Suttle (An tÁrd-Reachtaire Cuntas agus Ciste) and Mr. C. J. Byrnes and Mr. J. Whelan (An Roinn Airgeadais) called and examined.

VOTE 41—TRANSPORT AND POWER.

Mr. D. Ó Riordáin called and examined.

485. Chairman.—Paragraph 68 of the Report of the Comptroller and Auditor General reads as follows:

“Subhead D.2—Córas Iompair Éireann Redundancy Compensation

68. Section 15 of the Transport Act, 1958, authorises the payment of grants from voted moneys to Córas Iompair Éireann to meet the cost of compensation paid to employees, including those of the former Great Northern Railway Board, whose services were dispensed with or conditions worsened in the period from 16 July, 1958 to 31 March, 1964. Including £374,085 charged to this subhead, grants issued amounted to £3,534,563 at 31 March, 1968. Grants are supported by auditors’ certificates of the amounts expended on compensation.”

Mr. Suttle.—This paragraph is for information. These payments will continue for some years.

486. Chairman.—Paragraph 69 of the Report of the Comptroller and Auditor General reads as follows:

“Tourism

Subhead F.1.—Grant under Section 2 of the Tourist Traffic Act, 1961 (Grant-in-Aid)

Subhead F.2—Resort Development (Grant-in-Aid)

Subhead F.3—Development of Holiday Accommodation (Grant-in-Aid)

Subhead F.4—Development of Supplementary Holiday Accommodation in Western Counties (Grant-in-Aid)

69. Grants issued to Bord Fáilte Éireann to 31 March 1968 are shown in the following statements:—

As the departmental control over issues from the Grants-in-Aid appeared to me to be inadequate, I have communicated with the Accounting Officer.”

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

Mr. Suttle.—The monthly applications from Bord Fáilte Éireann to the Department for instalments of Grant-in-Aid were not supported by statements of the Bord’s cash position. It seemed that issues were being made in excess of immediate requirements and, because of the importance of the economy of cash balances, I communicated with the Accounting Officer. His reply indicated that arrangements had been made for bank reconciliation statements to be supplied monthly by the Bord and that issues out of the grant would not be made until these had been received. This arrangement does not appear to have operated effectively; in the course of an interim audit of Bord Fáilte’s 1968-69 accounts it was noted that the Bord still continued to retain substantial cash balances sometimes approaching £½ million. On 20 January, 1969, I again asked for the Accounting Officer’s observations on the position and he has informed me that he has been in touch with the Bord again and that the matter would receive attention.

Deputy Briscoe.—So the situation is not satisfactory?

Mr. Suttle.—Not yet satisfactory.

488. Deputy Briscoe.—You are still having difficulty, Mr. Ó Ríordáin?

Mr. Ó Ríordáin.—Yes. There are some practical difficulties. We share the views of the Comptroller and Auditor General about getting these balances down to a minimum but there are a number of practical constraints under which we have to operate— (1) Bord Fáilte have no borrowing powers and cannot run an overdraft; (2) the monthly balances at the end of the month tend to be large because lodgments tend to be made towards the end of the month; (3) these difficulties could be met by very frequent payments by us to Bord Fáilte at short notice. When we get a demand from them, we immediately have to make a demand on the Department of Finance. It does not always suit that Department to let us have what we want for Bord Fáilte just when we want it. We may have to hold up payments for a while and then give a larger sum. We did have discussions with the audit staff and with the Department of Finance but the practical results have not been fully successful. We are going into the matter again with Bord Fáilte and we hope to devise some measures that will bring improvement. There are practical difficulties.

489. Deputy Briscoe.—I can appreciate that. Are these balances that Bord Fáilte would hold earning money?

Chairman.—This money is on current account.

490. Deputy Briscoe.—It is, as it were, a substantial loss to the State.

Mr. Ó Ríordáin.—We are very anxious to reduce it but there are practical difficulties.

491. Deputy Briscoe.—Is the Comptroller and Auditor General satisfied with the situation?

Mr. Suttle.—We are not satisfied and the Accounting Officer has promised to go into the matter further and see what can be done.

492. What is needed, I suppose, is an alternative system so that they would be able to get this money immediately for immediate use. What Bord Fáilte is worried about, I suppose, is that if they have to apply to the Department of Finance for money, it may take longer to get it and they would need the money instantly to pay out expenses?—Yes, if it were possible for Bord Fáilte to ask us to pay so much money to cover a cheque they were issuing they could get by with no balance but it would not be practicable. I want to say that the balances tend to be inflated around the beginning of the month and they are not that large in relation to the turnover which is around £3½ million per annum.

Mr. Suttle.—I have some statistics here. During the year 1967-68 the immediate balances were generally around £200,000. On one occasion only they dropped down to £80,000 and they were up to the £½ million mark occasionally.

493. Deputy Healy.—The view I take is that Bord Fáilte are in a rather peculiar position in that they cannot get money when they want it immediately unless they ask for some reserve. I think a figure should be struck, that is a reliable figure that would meet their immediate needs, because they have calls on them and they do not know when they have to advance money.

Mr. Suttle.—They know exactly when claims are going to be made against them because they are not like a business concern. They have built up their cases and they have all the information for months in advance of what they propose to pay. I do not see why they should not be able to keep their balances down to the minimum.

494. Chairman.—If they kept their own house in order they would not need all this money in the kitty?

Mr. Suttle.—Yes.

495. Deputy Briscoe.—I think it could be noted that the view of the Committee is that something should be done to put this position right. Whilst appreciating the peculiar position in which Bord Fáilte find themselves, they are a public enterprise and as such are guaranteed by the Government so nobody who sends in a bill need ever be worried about the money being paid.

Deputy Healy.—I would not go as far as that. I feel that the Accounting Officer should be requested to meet the wishes of the Comptroller and Auditor General in this matter but at the same time I have too much confidence in the personnel of Bord Fáilte to believe that they have not done everything possible.

Deputy Briscoe.—I agree with that.

Mr. Ó Ríordáin.—We entirely agree with the Comptroller and Auditor General. It is a practical question of trying to work out the best means of reaching this objective. We will go along with anything the Comptroller and Auditor General prescribes.

Chairman.—You are confident you will work out a system to deal with this?—We hope so, with the assistance of the Comptroller and Auditor General.

496. Deputy Healy.—In what section of this paragraph is the money given to regional tourist development boards, the Southern Regional Board, for instance? Would the money cover various festivals which are financed or directed by Bord Fáilte?

Mr. Suttle.—I could not say that offhand. It depends where the festivals are held and if Bord Fáilte are directly involved in them. I think the grant is agreed beforehand and it is only once the festival is held that Bord Fáilte issue the grant either direct through the regional board or through themselves.

497. Deputy Healy.—My objection is there is money paid by Bord Fáilte itself to various promotion and development schemes and there is money paid by the local regional companies, of which there are eight in the State. Will they accept some of the undertakings?

Chairman.—We had a festival recently in Clonmel and the regional company got the money from the Department.

Deputy Healy.—Since Bord Fáilte directly finance it where is the demarcation line?

Mr. Ó Ríordáin.—I think in principle the regional board normally agree the affair with Bord Fáilte and they get the money from Bord Fáilte as they require it and according as the plans are completed from time to time.

498. Would it be possible to get the Bord Fáilte reports?

Mr. Suttle.—They are presented to the House.

499. Chairman.—Paragraph 70 of the Report of the Comptroller and Auditor General reads:

“Subhead G.2.—Constructional Works at Airports including Furnishing of Buildings

70. In paragraph 63 of my report on the 1965-66 Accounts I referred to expenditure of £6,000 to remedy defects in the window frames at Cork Airport. The window walling of the control tower was likewise subject to rain penetration and an external cladding of aluminium and glass has been provided at a cost of £30,762. I am informed that the tower now has sound and thermal insulation, normal to modern airports, and that there will be a substantial saving on maintenance.”

500. Have you anything to add Mr. Suttle?

Mr. Suttle.—In its report on the 1965-66 accounts the Committee expressed its dissatisfaction because expenditure of £6,000 became necessary on remedial work on the airport building at Cork which had opened in 1961. A further £30,000 was spent in 1967-68 on external cladding of glass and aluminium for the control tower and I deemed it desirable to draw attention to this.

501. Deputy Healy.—Could the Accounting Officer tell us if there is any reflection whatever on the people who designed and built the tower at Cork Airport?

Mr. Ó Ríordáin.—The tower was designed by our own architects. It is not a usual type of work and is in an exposed position. Their first design, which was a very economic one, did not prove adequate in practice so they had to do this extra work. You could say it was a matter of experience. This first design did not prove adequate but I do not think that necessarily reflects on the people who designed it. They are very good architectural staff. They have done work which has received a great deal of praise. We were fortunate in that we saved money because in the interval there had been great improvements in the manufacturing techniques for this aluminium curtaining. We have now got not only a dry but an insulated control tower at less cost than if it were originally designed with more expensive cladding. I imagine the architects could provide against such eventuality by incurring much heavier expenditure. Economic design involves some risk in building of this sort.

502. Deputy Healy.—It would not be any reflection on the builders?—No. The building was to specifications.

Chairman.—We drew attention to this before. I think the climatic stresses were more than expected?—Yes, they are quite abnormal.

503. Chairman.—Paragraphs 71 and 72 of the Report of the Comptroller and Auditor General read:

“Subhead K.1.—Shannon Free Airport Development Company, Limited (Grant-in-Aid)

71. Grants to the company for its general purposes under the Shannon Free Airport Development Company, Limited, Acts, including £500,000 charged to this subhead amounted to £2,855,500 at 31 March 1968. The limit on these grants was raised to £6,000,000 under the provisions of the Shannon Free Airport Development Company, Limited (Amendment) Act, 1968.

The amount which the Minister for Finance may issue from the Central Fund to take up shares in the company is limited to £8,000,000. £629,000 issued during the year brought the total issues to £5,101,000 by 31 March 1968.

Subhead K.2—Shannon Free Airport Development Company, Limited— Housing Subsidies and Grants

72. Section 5 of the Shannon Free Airport Development Company, Limited (Amendment) Act, 1963, empowers the Minister to pay grants to the company in respect of houses provided as part of a scheme for the provision of houses and community services for the purposes of the industrial estate at the airport. As the formalities in connection with new houses completed during the year were not finalised no grants equivalent to those normally payable under the Housing Acts were paid. Subsidies to enable the company to let houses at reduced rents amounted to £47,600 in the year.

The limit on advances from the Central Fund to the company for housing and community services has been raised from £3,000,000 to £7,000,000 by the 1968 Act. £471,000 advanced during the year brought the total advances to £3,000,000 by 31 March 1968.”

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

Mr. Suttle.—These paragraphs indicate the up to date position of the State’s financial involvement in the Shannon Development Company. The accounts of the Company are audited by me.

505. Chairman.—Has the Shannon Development Company the right to borrow on their own?

Mr. Ó Ríordáin.—I do not think, off-hand they have borrowing powers. They work on grants and subsidies. They presumably have provision for running a temporary overdraft but they have not attempted to raise capital independently.

They have not done so?—No.

506. The position would then be as stated here. The grants amounted to £2.85 million, shares from the Central Fund £5 million, advances from the Central Fund for housing and community services £3 million, that is £10.8 million. Is that the position?—Yes.

507. Deputy Gilhawley.—On subhead E.— Grants for Harbours—why is the expenditure less than that granted by £117,443?

Chairman.—There is some information on that point on page 119. Perhaps the Accounting Officer has something to add to this?—It is generally very difficult to estimate the cause of delays when there is an application for a grant or when a grant has been approved in principle. We have to make the best provision we can for the claim but in most of those cases this saving arises as a result of harbour authorities having availed themselves of grants for improvement works but there is delay in starting the works and carrying them out. We have tried for years to get those down to a realistic level because it is very difficult if your estimate falls down and then the following year some payment which has been maturing for years will suddenly come.

508. Deputy Healy.—On subhead O.— Rural Electrification—could we be told how far that has progressed? Is there still much work to be done?—The present position about rural electrification is that, following the improvements in the subsidy arrangements a year or two ago, the response now is much greater than was previously estimated and it will be very difficult to meet all demands either within the time originally estimated or within the sums originally estimated. The number of applications over the next few years which the ESB now face is about twice the original estimate. This is the cause of some of the delays. If this job is to be done economically the ESB must do it on a planned basis using teams that move from one area to another. They do not do odd jobs here and there unless they are very urgent or essential.

509. Can anybody make a rough guess as to when rural electrification will be completed?

Deputy Gilhawley.—1973.

Mr. Ó Ríordáin.—We are examining new estimates from the ESB at the moment. These will have to be considered in conjunction with what new financial provision will be required. The original estimate was that the great bulk of this would be done by the end of 1972 or 1973. Now, it may take somewhat longer and cost a good deal more because of the extra number of applications.

510. The Appropriations in Aid show landing fees for Cork and Shannon Airports but not for Dublin. Why is that?

Mr. Ó Ríordáin.—On pages 123 and 124 of the Report of the Comptroller and Auditor General the Committee will see a Statement of Expenditure and Revenue of State Airports for the year ended 31st March, 1968.

Chairman.—The Deputy will see in this Statement the landing fees received at Dublin in addition to Cork and Shannon.

Mr. Suttle.—Dublin Airport is operated by Aer Rianta and the other airports are operated directly by the Department.

The witness withdrew.

VOTE 7—OFFICE OF THE REVENUE COMMISSIONERS.

Mr. S. Réamonn called and examined

511. Chairman.—Paragraph 9 of the Report of the Comptroller and Auditor General reads as follows:

Revenue Account

“9. A test examination of the Revenue Account has been carried out with generally satisfactory results.”

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

Mr. Suttle.—This is the usual introductory paragraph indicating that the Revenue Account has been subjected to examination. Apart from the matters referred to in paragraphs 14 and 15, dealing with Estate Duty and Wholesale Tax, the position is satisfactory.

513. Chairman.—Paragraph 10 of the Report of the Comptroller and Auditor General reads:

“10. The net yield of revenue for the years 1967-68 and 1966-67, under its main heads, is shown in the following statement:—

£247,984,000 was paid into the Exchequer during the year leaving a balance of £109,392 as compared with £114,783 at the end of the previous financial year.”

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

Mr. Suttle.—This paragraph gives the net yield of revenue under its main heads for the year 1967-68 together with the comparative figures for 1966-67.

515. Chairman.—Paragraph 11 of the Report of the Comptroller and Auditor General reads as follows:

“11. I have been furnished with the following analysis of amounts of income tax, sur-tax and corporation profits tax outstanding:—

Comparative totals for the previous year are—Income tax, £8,166,193; Sur-tax, £1,738,715; Corporation Profits tax, £1,641,995.”

Mr. Suttle.—This paragraph is for the information of the Committee. I have nothing to add to it.

516. Chairman.—Paragraph 12 of the Report of the Comptroller and Auditor General reads as follows:

“Extra-statutory Repayments of Customs and other Duties

Extra-statutory repayments of Customs duties, £21,771, Excise duties, £35,490, Turnover tax, £20, Wholesale tax, £1 and Stamp duties, £102, were made during the year.”

Mr. Suttle.—Again this paragraph is for the information of the Committee.

Deputy Healy.—What does this deal with?

Mr. Suttle.—All this deals with diplomatic privilege.

Mr. Réamonn.—I can give you a rough break-down. Under the heading of Customs for the year 1967-68 the extra-statutory repayments on the score of diplomatic privilege amounted to £21,771. Under the heading of Excise in the same year diplomatic privilege extra-statutory repayments amounted to £16,127. There were other cases which, if you like, I could refer to briefly. They amounted to £19,363 bringing the total for extra-statutory repayments of Excise to £35,490. The other cases under the heading of Excise were as follows:—There were cases of tyres and tubes. It should be explained that when tyres and tubes are being delivered from the factory the excise duty is imposed at the point of delivery. It sometimes happens that if the consignee thinks that the tyre is defective he returns it to the factory. If it is found to be defective it is destroyed and the duty is repaid but if, when the consignee returns the tyre to the factory, it is found to be sound and is not destroyed it comes out again to the consignee and the duty is once again imposed on reissue because the excise duty falls on the tyre when it goes out of the factory. Therefore, there is a double imposition of duty. In those circumstances we repay the duty originally paid. For the year under review we had 421 cases of this and we repaid £9,258.

517. There are other cases, too, under the heading of Excise. One was in connection with the rebate to brewers. It goes back to the Finance Act of 1932 as amended by subsequent legislation. Section 41 of the Finance Act, 1932, provides for a rebate of £2 per standard barrel on the first 5,000 standard barrels of beer brewed in any year if the brewer shows to the satisfaction of the Revenue Commissioners that at least 80 per cent of the cereals used in the year beginning 1st July have been malted or roasted in the State. We had a case of a Company which failed to qualify for the rebate in the year which began on 1st July, 1966. The position was that only 72 per cent of the total quantity of cereals used by the Company for that year was malted or roasted in the State. This was the first year in which the Company failed to qualify and they made a number of points. They said they had misinterpreted the rebate provisions and in using flaked barley and wheat rather than malted or roasted they had assumed that these were qualifying materials. A second point they made was that they had made every effort to use only Irish materials in their grist and that as between flaked barley and roasted barley there was very little difference from the processing point of view. I might explain in parenthesis that for flaking the barley is moistened, heated and rolled into flakes. We understood that for future years there would be no difficulty in making the necessary arrangements. With the sanction of the Minister for Finance we made a rebate in this one case of £10,000.

518. There were just two other cases under Excise. There was one where a firm of distillers had consignments of spirits returned to them by the consignee as being unfit for sale. What happened was that bottles of spirits had been badly contaminated in transit with paint thinners. We consulted the State Chemist and he held that the spirits should be regarded as contaminated. The bouquet, which is the distinctive aroma of the spirits, could be altered by the contamination and to sell the spirits would endanger future sales of the firm’s products. We got the sanction of the Minister for Finance for extra-statutory repayment and the spirits were destroyed under the official supervision which means that they were run into the common sewer in the presence of an officer and free of all expense to the State. In that case the rebate was £66.

519. The last case was bookmaking premises registration fees. This was the case of an individual who surrendered a bookmaker’s licence and certificate of registration. This person had difficulty in getting vacant possession of the registered premises which were occupied by a butcher. The person, who happened to be a lady, had personal reasons also for not going ahead. She was getting married in fact. We were satisfied that during the year there had been no trading and we repaid £20 bookmaking premises registration fee for the year beginning 1st December, 1966. There were in all two cases of a similar kind in which we refunded £40. There were some small cases then of extra-statutory repayments under turnover tax and wholesale tax.

520. Chairman.—Paragraph 13 of the Report of the Comptroller and Auditor General reads:

“Remissions and Amounts Irrecoverable

13. I have been furnished with schedules of the cases involving a loss of £50 or upwards in which claims for duty under the Revenue Acts were remitted without statutory authority or passed as irrecoverable during the year ended 31 March 1968.

The total amount of the items included in the schedules, £66,542, is made up as follows:—

The distribution according to the grounds of remission or write-off is:—

Remission

I have made a test examination of the items included in the schedules with satisfactory results.”

Mr. Suttle.—This paragraph is for the information of the Committee.

521. Chairman.—Paragraph 14 of the Report of the Comptroller and Auditor General reads:

“Estate, etc., Duties

Departmental regulations are designed to ensure that a regular review takes place of all estate duty cases awaiting assessment or collection. In the course of a limited test check three cases were noted in which the regulations did not appear to have been implemented, while in other instances excessive delay seems to have occurred in dealing with the administrators or executors of estates. In view of the possible loss of revenue I have communicated with the Accounting Officer.”

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

Mr. Suttle.—The Accounting Officer has expained in reply to my inquiries that the regulations are still in operation and are being implemented. However, due to shortage of staff both in the Estate Duty Branch and in the audit section of the Accountant General’s Office, a slowing down in the work occurred in two periods since September, 1966. Additional staff has since been authorised and an improvement is expected. Additional safeguards have also been added to the procedures in force in the audit section of the Accountant General’s Office and it is considered that these should go a long way towards eliminating the unsatisfactory features to which I have drawn attention. With regard to the second point mentioned—i.e. excessive delays in dealing with administrators or executors of estates— I am informed that these delays were caused by the shortage of experienced staff to deal with cases which can be difficult and complex. Additional senior staff have been appointed recently and it is expected that delays will be avoided as a result.

523. Deputy Healy.—I should like to say that we are all glad to hear the last part, that experienced staff have been appointed because most people in public life are inundated with requests to expedite estates. Perhaps Mr. Réamonn would like to comment?

Mr. Réamonn.—Just very briefly, if I might. First of all, there is control of cases awaiting assessment and then there is control of cases actually assessed and where the question of collecting, as the Comptroller and Auditor General has pointed out, is seriously handicapped by staffing difficulties. When, for one reason or another, officers leave the branch, the process of replacement is normally rather slow with the consequence that we then have a number of junior officers who are inexperienced. The control of cases awaiting assessment is dealt with within the Estate Duty Branch itself. Weekly returns are made to the head of the branch, who has the rank of assistant secretary. We are far from satisfied with the situation but we have the difficulties to which the Comptroller and Auditor General has referred and which I have just mentioned. We have some hopes for the future. The procedure for the purpose of collection control is that warrants for all assessments to Estate Duty are made out in triplicate. One copy is sent to the taxpayer or his solicitor. Another is sent to the Accountant-General of Revenue who also receives particulars of payments and cancellations. The third is retained in the Estate Duty Branch for the purpose of following up the assessment should this be necessary, that is, should the liability not be discharged promptly. We have made a few changes to remedy defects in the system. One is that the Accountant-General’s Branch examines first those cases where the duty outstanding exceeds £500 and calls on the Estate Duty Branch for a report on them. Attention is given subsequently to the smaller cases. Another recent change is that instead of cases being sent to the Estate Duty Branch on lists on which there might be inadequate space for comments or other notation a card system is now in use. The reminders for duty and accounts are handled in the Estate Duty Branch by a compartment known as the Review Section which used to adopt a system known as the “Bring Up” system but this system did not prove fully effective. This is now being replaced by what we call the Monthly Collection Book system which is entirely under the control of the technical staff. This book contains both assessed cases and cases due for assessment. Furthermore, the review procedures in the Estate Duty Branch have been somewhat recently revised for the purpose of advancing the stage at which legal proceedings would be commenced in cases where the duty has not been paid. The latest year for which a balance was due in the Accountant-General’s Branch, that is to say, the year 1966-67, was, in fact, balanced as at 31st March, 1968. The three cases to which the Comptroller and Auditor General refers at Paragraph 14 were arrears for earlier years. We have conducted a survey which has shown that 60 per cent of cases, both assessed and awaiting assessment, work themselves out within a year. A further 20 per cent are completed in two years and an additional 5 per cent in the third year. That makes up 85 per cent. In the remaining 15 per cent the hold-up is more often than not due to the other side. If we take the duty assessed in each of the three financial years ended on the 31st March 1967, the percentage that was unpaid at the 31st March, 1968 was as follows:

Of the duty assessed in 1966-67 2.31 per cent was unpaid on the 31st March, 1968.

Of the duty assessed in 1965-66 1.67 per cent was unpaid on the 31st March, 1968.

Of the duty assessed in 1964-65 .61 per cent was unpaid on the 31st March, 1968.

I should like to say a few words about the cases mentioned in Paragraph 14 by the Comptroller and Auditor General. In one of the cases referred to the manner of payment was most unsatisfactory. We had a post-dated cheque which had to be returned for amendment. Then we had a request that the amended cheque be not presented. This procedure led to some confusion with the result that the Accountant-General’s warrant was not cancelled although the liability had been discharged. In another case there was delay due to the fact that the matter was being dealt with by an inexperienced officer although there was little or no danger of the case being completely overlooked. In the long run the duty plus interest was paid in October, 1968. In the third case the file had been lost and had to be reconstructed. We are actively following up that case at the present. For all I know the duty may have been paid. I am not sure but as the Comptroller and Auditor General has pointed out, we have informed him that the departmental procedures are in full operation and with the improvements which we are trying to introduce, I think the procedure should work well provided, of course, that serious staffing difficulties do not supervene.

524. Chairman.—Does the delay lie in the process of assessment by the Department or does it lie with the administrators of the estate being slow in payment once the assessment is made?—So far as the administrators are concerned there are certain, if I might use the expression, spurs to expedition. There are certain very practical reasons why the executors or administrators should expedite matters. The first is that you cannot take out probate on personal property before paying estate duty. The second is that interest is exigible on unpaid estate duty. Except in the case of real estate interest is payable on unpaid estate duty from the date of death of the deceased to the date of payment of the duty. In the case of real estate interest does not begin to be charged until 12 months after the date of death of the deceased so that as far as the executors and administrators are concerned there are reasons why they should not delay. Of course, it is very difficult to give a general reply to your query. Undoubtedly, there is delay from time to time on the part of the executors and administrators. I am not in any sense advancing that as an excuse for us. We are not at all satisfied with the position in our branch and we are trying to improve it.

525. Deputy Healy.—Is it possible that interest would accrue and would have to be paid on estates due to delays in the Revenue Office?—No. because in practice no interest is charged in respect of the period when accounts are in the Estate Duty Branch awaiting assessment. I might say also, that no interest is charged in practice while the parties are replying to queries which the Branch has issued provided there is no unconscionable delay. Furthermore, we allow a period of 21 day’s grace in which interest is not charged from the date of assessment, in other words, when the duty is assessed. In practice, further interest is not payable until a period of 21 day’s grace has elapsed.

526. Chairman.—Paragraph 15 of the Report of the Comptroller and Auditor General reads as follows:

“Wholesale Tax

15. I mentioned in paragraph 20 of my report for 1966-67 the introduction of a wholesale tax with effect from 1 October 1966. I have now had an opportunity of testing the procedures and accounting arrangements relating to the new tax which appear to be generally satisfactory. I have inquired, however, about underpayments of tax noted in the course of my audit and I have also sought information on the progress achieved in comparing the annual accounts furnished for income tax purposes with wholesale tax records.”

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

Mr. Suttle.—Although the payment and details shown in Wholesale Tax returns were put on the Honeywell computer system as from 1st January, 1968, the computer programme which identifies arithmetical errors on a daily basis did not come into operation until April, 1968. Owing to very heavy pressure of work in the transfer of various operations relating to Wholesale and Turnover taxes to the new computer system, it was not possible to initiate the clerical follow-up of those errors at that time. The work is now on a current basis and all errors identified by the computer since the programme became operational in April last are examined as they come to notice. With regard to the second point of the Wholesale Tax records, I shall read an extract from the reply of the Accounting Officer which is as follows:

It is the intention that summaries of all the returns made during a taxpayer’s financial year will be prepared on the computer in the Collector-General’s Office and sent to the Inspectors in order to supplement the monthly photo-copies and to facilitate a quick yearly comparison with the accounts furnished for Income Tax purposes. This will commence when a computer programme for the purpose becomes available in January, 1969.

This reply is dated some time back. The extract concludes as follows:

The summaries will be similar to those made on forms CC 47 for Turnover Tax.

528. Chairman.—In respect of furnishing information and trying to arrive at some kind of reconciliation figures between the Income Tax and Wholesale Tax, would that apply also to Sales Tax and Turnover Tax?

Mr. Réamonn.—Yes. In fact, the reconciliation is a more satisfactory process in the case of the Turnover Tax. There are difficulties in the path of achieving anything like an exact reconciliation between the monthly records for Wholesale Tax and the accounts submitted for Income Tax purposes. The reason is that many goods are exempt from Wholesale Tax and all services are exempt and, accordingly, the gross turnover will not be easy to reconcile with the Income Tax figure for turnover. The position as regards Turnover Tax is different because the Turnover Tax is a comprehensive charge. Nevertheless, the comparison between the Wholesale Tax records and the accounts submitted for Income Tax purposes helps to identify bad cases of discrepancy. I might add that, during the years 1966-67 and 1967-68, a small number of Wholesale Tax returns were examined by the auditors in six country districts. Undercharges were discovered in 11 cases and the total came to £10,400. These underpayments were due to genuine errors or misunderstandings about the basis of liability. In no case did we consider that court proceedings were justified.

529. Does exemption from Wholesale Tax present any difficulty for you in the field of checking?—Not so much in checking the Wholesale Tax returns as in comparing them with the Income Tax returns.

530. Deputy Healy.—The note relating to subhead A—Salaries, Wages and Allowances—reads:

Saving was due to vacancies and to staff changes involving appointments at lower points on salary scales . . . . .

Is the position about vacancies on the staff resolved now? Is the matter improved? —I can say, straight away, that, in the year 1967-68, the vacancies varied from 132 to 199 and the average number of vacancies during that year was 151, so we are still in a difficulty about vacancies.

531. Are they mostly in the junior grades? —I can give the Committee the precise position. I went to the trouble of ascertaining the vacancy position on 31st January, 1969, which is the most up-to-date point. Take the recruitment grade of inspector: we had 11 vacancies. One of the troubles here is that, in recent years, prominent firms of accountants have been inducing trained inspectors of taxes to leave the Civil Service and enter into their own employment. As I say, there were 11 vacancies for posts as inspector of taxes. I have pointed out that inspector of taxes is a recruitment grade. For the post of officer of customs and excise, we had 11 vacancies. We had three vacancies for executive officers and 19 vacancies for clerical officers. I think that will give the Committee an idea of the picture. On 31st January, 1969, the total was 105. If I might repeat what I have said, for the higher posts we had vacancies for 11 inspectors, vacancies for 11 officers of customs and excise and three vacancies for executive officers.

532. Deputy Healy.—I am wondering why it is so difficult to get recruitment into these grades. I am sure we all know men who are at the point of retiring and who are very well able to carry on for a few extra years. Is there any provision made to extend their years of service in a position where we find it difficult to recruit?—This is done in certain cases, with the sanction of the Minister for Finance.

533. Deputy Healy.—Is that exceptional or is it general policy?—I think that this question is an Establishment matter. I suppose, really, a person can be retained on either one or other of two grounds, namely, (1) hardship, which you can have in certain circumstances where people would be entitled to a comparatively small pension and (2) the national interest. It is really a matter for the Minister to decide upon individual cases.

Deputy Healy.—It is a matter of policy then. I am not advocating that you keep people on and deprive the younger generation of their fair share but if you cannot recruit people and this work is being held up——

Deputy Gilhawley.—I wonder what is the reason for the difficulty in recruiting people for these vacancies?

Chairman.—I understood from the Secretary of the Department of Finance that they cannot be got through the Civil Service test.

534. Deputy Gilhawley.—You must have quite a number of vacancies in the junior staff because I had difficulty in getting out a certificate from the typing office and the reason given to me was shortage of staff.

Mr. Suttle.—There was an advertisement in the paper recently for 350 clerical assistants.

Mr. Réamonn.—What is found in practice is that there is not merely a certain difficulty of recruitment but a difficulty of retention—in other words, the turnover is rather more rapid than it used to be years ago.

535. Deputy Healy.—Is the trouble then that they get jobs outside the Civil Service?

Mr. Whelan (An Roinn Airgeadais).— This is a problem that we have had for some time. On the one hand there has been a big increase in State activities of all sorts due to public demand; naturally, more staff are needed for these increased activities. On the other hand, because of the increasing prosperity of the country, there are many more openings for young people outside the Civil Service than was the case 25 or 30 years ago, when many of the brightest people went into the Civil Service. Another point is that a generation ago about 30 per cent of the women under, say, 40 were married. Now 40 per cent are married. We require girls on marriage to leave the Civil Service. It follows then that because more people are getting married, and at an earlier age, too, and because of the many openings elsewhere, there is a fairly rapid change-round of girls. A number of other things militate against the Civil Service. It is no harm to mention that, to some extent, the image of the Civil Service is not that——

Deputy Briscoe.—Glamorous?—Yes. People nowadays want glamorous jobs in which they do not have to sit at a desk, jobs involving a good deal of travel and that sort of thing. Then some young people may feel that, for their particular talents, the pay, conditions and prospects afforded by a Civil Service career would not be as attractive as those outside. The result is that they are not attracted to the Civil Service. Another factor might be mentioned. The Investment in Education Survey which was carried out on behalf of the Department of Education some years ago revealed that only 500 boys with honours leaving certificate, would annually be available for employment at the age of 18. The other boys so qualified seem to go on for higher education. As you know, there are more inducements now to go to the university than was the case a generation ago. Anyway, if, as this survey showed, only 500 boys with honours leaving certificate are annually available for employment over the country as a whole and if there are many more business openings available for them than was the case in earlier years, the Civil Service must of necessity suffer.

536. Deputy Gilhawley.—I cannot subscribe to that view at all. In the West of Ireland I know quite a number of leaving certificate standard boys—I will not say they all have honours—I have half a dozen of them on my books trying to get in as male nurses to mental hospitals. I know thousands who have gone to England because they cannot get employment at home. I was speaking to some of them in the Irish Centre in London two nights ago. Therefore, I cannot understand that point. Possibly some of those lads have gone beyond the age limit because they took up temporary jobs. They may have gone beyond the age limit for the Civil Service but I can give you the names of plenty of them if you want them.

Mr. Suttle.—In a recent examination the age was extended, I think, to 25. Formerly it was 20. That was within the last couple of months.

Deputy Healy.—Leaving certificate is not compulsory?

Mr. Suttle.—No, it is a separate examination.

Deputy Healy.—I think there are many people who are not aware of these vacancies. They are afraid of the Civil Service. Many people think it is beyond their capabilities.

537. Deputy Briscoe.—What about the question of married women? Would this solve the situation?

Mr. Suttle.—It is not recommended.

Chairman.—We are going into policy now.

The witness withdrew.

The Committee adjourned.