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

REPORT

PART I—GENERAL OBSERVATIONS

MINUTE OF THE MINISTER FOR FINANCE DATED 29th JANUARY, 1969.

1. The Committee has noted the Circular Letter issued by the Minister to all Accounting Officers about access to documents by the Comptroller and Auditor General which was the subject of its interim report dated 13th December, 1967.

2. The Committee will await the further observations of the Minister for Finance on paragraph 25 of its report dated 10 March, 1966; paragraph 12 of its report dated 17 November, 1966; paragraph 3 of its report dated 14 July, 1967; and paragraphs 7, 17, 19 and 20 of its report dated 27 June, 1968.

REPORT DATED 17 NOVEMBER, 1966

Audited accounts of bodies which receive subventions from voted moneys.

3. This question was first raised in the Committee’s report dated 12th November, 1964, and further developed in paragraph 3 of its report dated 17th November, 1966. In raising this matter the Committee was primarily concerned that its examination of the appropriation accounts of voted moneys is being restricted because substantial sums have been issued from the votes to bodies whose accounts are not before the Committee for scrutiny.

Because what is at stake is the question of whether Ministers should over wide areas of their functions be allowed to avoid the discipline of accountability to Dáil Éireann, the Committee recognises and appreciates that a review by it of the accounts of State sponsored bodies poses large and complex issues which may take time to resolve. Nevertheless, as a step towards improving the information available for an examination of the appropriation accounts, the Committee in its report dated 12th November, 1964, suggested that the Standing Orders of Dáil Éireann should be amended so as to provide where appropriate, for the reference to the Committee of the audited accounts of bodies who receive subventions from voted moneys.

4. The Committee notes that, on the question of the possibility of duplication of functions and overlapping of efforts in the provision of technical assistance, the overall role of the Irish National Productivity Committee has been redefined so as to ensure co-ordination of its activities with those of other State-aided bodies operating in the field of productivity.

REPORT DATED 14th JULY, 1967

5. Fees for professional services in connection with building projects have been the subject of several reports by the Committee in recent years. It notes that this matter has been referred to in a wider context in a report of the N.I.E.C. and that the matter is being considered in relation to the Third Programme for Economic Expansion. The Committee would like to be informed of the outcome.

6. The Committee notes the further observations of the Minister regarding the price paid for a site for a fisheries research station. While it has no alternative to accepting the position, it wishes to be kept informed about the utilisation of the site and whether any portion of it will be available for disposal.

7. The action taken to remedy the defects in the swimming pool at Templemore Garda Training depot without cost to the State appears to be satisfactory. The various reports that the Committee has made regarding this project should it is hoped provide useful lessons for the future.

REPORT DATED 27th JUNE, 1968

8. The Committee notes that the extra expenditure resulting from the postponement of purchase of the plant was £550. Clearly a more flexible attitude towards restrictions on capital expenditure would have saved public money. It is hoped that this point will be borne in mind for the future.

9. The Committee notes that it has been decided that the maintenance of drainage works on the river Rye will be carried out by the Office of Public Works as agents for the Department of Agriculture. It would like to be informed of the expenditure incurred on restoration due to neglected maintenance.

10. The Committee is pleased to note that the Minister agrees that, as a general principle, adequate planning should precede the placing of building contracts in order to minimise increases in costs, and that he has asked all Departments to bear this in mind. On the particular case in question the Committee feels that the volume of adjustments to the original contract provisions was abnormal and that greater care should be exercised in future.

11. According to the Comptroller and Auditor General’s report there were 1,000 cases of employers who had failed to send in monthly returns of Income Tax under the P.A.Y.E. scheme. This is disturbing. The Committee wishes to receive more precise information of the action taken and its results.

PART II—PARTICULAR ACCOUNTS

PUBLIC WORKS AND BUILDINGS

12. The stonework and the dome structure of the Four Courts, Dublin, deteriorated and needed substantial repair which in 1960 was estimated to cost some £45,000. In June, 1961 a quantity surveyor was appointed to prepare a Bill of Quantities which he undertook to provide in nine weeks. The Bill was not delivered until June, 1965. On investigation the Comptroller and Auditor General learned that the most urgent work had been carried out in the period 1958 to 1961; that the delay in carrying out the main conservation work was primarily due to the time taken by the quantity surveyor who had pleaded illness and other commitments; and that the work would be put in hand late in 1968.

From evidence the Committee ascertained that the original estimate was conjectural and that a more realistic estimate was prepared on receipt of the Bill of Quantities. It was envisaged that the work would cost about £57,000.

What disturbs the Committee is the delay of four years in obtaining the Bill of Quantities. This delay, to say the least of it, was not fully justified. As however this appears to have been an isolated instance and the Committee has been assured that organisation in the Office of Public Works has been improved and controlled to prevent a recurrence, it does not wish to make any further comment.

13. The Comptroller and Auditor General reported what appeared to be an instance of protracted hireage of a truck for transport services at Dunmore East Major Fishery Station. Sums totalling £1,100 had been paid for its hire from September, 1967 to February, 1968. He questioned the economics of this transaction as against outright purchase. He also noted that another truck the property of the Office of Public Works had been idle, according to the records, at the Shannon Embankment works from December 1966 until January, 1968 and asked whether it could have been transferred to Dunmore thus avoiding hireage charges.

The local engineers of the Office of Public Works have delegated authority to hire plant within certain low limits of expenditure, but repetitive orders are not restricted. Difficulties can arise if a local officer continues to issue orders for hire without enquiring whether the plant required could become available from the Board’s fleet on another job. In order to improve co-ordination, it has been arranged to centralise the hire of plant through the Administration Manager at the Central Engineering Workshops in Dublin. This, it is expected, will remove the weakness in the former procedure.

After he had been examined by the Committee, the Accounting Officer furnished a note. It states that he had been advised that, in order to allow for breakdowns and repairs, the complement of vehicles held at the Shannon Embankments was the minimum consistent with prudence and that the truck in question had in fact been used for short periods which had not been recorded in the log book.

The Committee believes that there was to some extent a lack of co-ordination in the use of plant, but it trusts that the measures taken by the Commissioners will ensure greater economy and eliminate excessive hireage charges.

INDUSTRY AND COMMERCE

14. An Foras Tionscal receive from the vote a grant-in-aid for the purpose of making grants to industries under the terms of the Industrial Grants Acts. Accounts of An Foras are audited by the Comptroller and Auditor General and presented to Dáil Éireann. In the course of audit a case was noted in which a company had obtained a grant of £165,000, the final instalment of which was issued in 1963. But the company failed to obtain orders for its products, never achieved satisfactory production and its assets were sold in 1964. Subsequently the company was wound up.

By an agreement of September, 1961 the company had undertaken not to dispose of any of its grant aided assets without the prior consent of An Foras Tionscal but that consent had not been sought. It appeared that the Industrial Credit Company invested £110,000 in preference shares in the company in question and was only able to recover £18,000 from the liquidator. Thus the total loss to State funds was of the order of £¼ million. The Committee wonders whether the assets of the company were sold in an efficient manner and for the best possible price.

The Committee does not doubt that there is always some risk in making grants for the establishment of new industries. Happily the failures have been few. An improved form of Agreement between An Foras and the recipients of grants provides what are considered legally enforceable clauses regarding the consent of An Foras to the disposal of grant aided assets, and for the recovery of the grants or a proportion of them in certain circumstances. The Committee judges the revised arrangements to be satisfactory but it would be glad to receive the considered views of the Minister for Finance.

TRANSPORT AND POWER

15. The Grants-in-Aid to Bord Fáilte Éireann are issued in monthly instalments by the Department. The Comptroller and Auditor General was of the opinion that the amounts requisitioned were in excess of immediate requirements and he observed that idle balances of the order of £200,000 were held on average for every day of the year. He stressed the importance of economy in the use of cash balances and had been in communication with the Accounting Officer. The latter explained the difficulties that Bord Fáilte encountered in formulating requisitions for cash and mentioned that their bank account must always be in credit. He added that he was in entire agreement with the Comptroller and Auditor General that the balances should be reduced to a minimum and hoped that with his co-operation a practical solution would be found. The Committee has on previous occasions emphasised the importance of exercising economy in the use of Exchequer balances and it wishes to be kept informed of developments.

OFFICE OF THE REVENUE COMMISSIONERS ESTATE, ETC. DUTIES.

16. The Comptroller and Auditor General found in the course of a test check that departmental regulations, designed to ensure that all estate duty cases awaiting assessment or collection were subjected to regular review, had not been implemented in three cases. In other instances excessive delay appeared to have occurred in dealing with executors or administrators of estates. The Accounting Officer explained that shortage of staff had caused delay in implementing the regulations but this had since been remedied and more experienced staff has been provided to deal with the general public. Improvements in financial control procedures were being introduced and it was hoped that the weaknesses to which the Comptroller and Auditor General adverted would be eliminated. The Committee wishes to be kept informed on this matter.

WHOLESALE TAX

17. This tax was introduced in October, 1966 and the Comptroller and Auditor General when reviewing the system of control observed a number of underpayments which did not appear to have been followed up. He ascertained that although the information in wholesale tax returns was fed into the computer system from January, 1968, a programme to identify arithmetical errors on a daily basis was not brought into operation until April, 1968. Pressure of work in the transfer of various operations relating to wholesale and turnover taxes to the new computer system did not enable the clerical follow up of these errors at that time. The Committee desires to be informed of the present position.

18. As a cross-check on the accuracy of the wholesale tax returns a limited comparison with returns for Income Tax purposes was made in six country districts. This, the Accounting Officer stated, disclosed underpayments in 11 cases amounting to £10,400. While the comparison presents difficulties, it helps to identify serious discrepancies. The Committee suggests that a more representative cross-check should be made and that the outcome would be communicated to it.

LANDS

Appendix 2.

19. Arising out of the observations of the Minister for Finance on paragraph 13 of the Committee’s report on the accounts for 1966-67, the Comptroller and Auditor General re-opened the question of the economics of collecting small Land Commission annuities rather than encouraging their redemption. Disappointing results had been the outcome of a small pilot scheme conducted in Co. Donegal by the Land Commission; but the Comptroller and Auditor General felt that this project had not been extensive enough to form a valid judgement. He mentioned that there were over 500,000 annuitants paying half yearly instalments and in Counties Mayo and Donegal alone there were some 95,000 paying on average eleven shillings each half year. Taking the cost of postage, stationery and clerical staff, he was of the opinion that there would be a worthwhile saving if a significant number of these annuities were paid off. As the Accounting Officer agreed to have further investigations undertaken in consultation with the Comptroller and Auditor General, the Committee will await their conclusions.

HEALTH

20. From explanatory statements furnished by the Department and appended to the Committee’s reports it notes that net expenditure on the health services has grown from £22 million in 1963/64 to £37 million in 1967/68 and that the cost of drugs and medicines rose from £1.3 million to £2.88 million over the same period. For medicines provided under the general medical services as distinct from the hospital services the expenditure rose from £.6 million in 1964 to £1.668 in 1967/68. Among the reasons for these very substantial increases in expenditure on drugs and medicines the Committee would number increased prices, increased use of the public health services, and possibly over-prescriptions. The extent to which each cause has affected the increase in expenditure is not available and the Committee wonders whether the Department would be in a position to throw further light on this subject.

21. The Committee has found illuminating the statement furnished to it by the Department showing the percentage of the population for each county covered by medical card at 31st December, 1968. While the national average is 31 per cent. there is considerable variation from 8.8 per cent. in County Dublin to 50.1 per cent. in Co. Roscommon. The Committee raised in its previous report the question of the provision of health services free of charge to persons other than those who have medical cards. It notes the Minister’s observation that the changes envisaged in the White Paper on the health services should almost entirely eliminate abuses that the Committee may have had in mind. If the new legislation brings about closer financial control through cost/benefit analyses and management studies, the Committee would find it easier to accept that the services were providing value for money and that the national financial commitment gave to the people who needed it an adequate health service.

AGRICULTURE

22. Information obtained by the Comptroller and Auditor General of the work being carried out at the Department’s Veterinary Research Laboratory appeared to indicate that there was a similarity between this work and some of the research projects undertaken by An Foras Talúntais. He questioned whether there was any duplication of effort or overlapping of functions and was assured that overlapping is avoided as far as practicable and that there is consultation towards this end. The Accounting Officer stated that generally there is no duplication, but that research by An Foras Talúntais on certain aspects of animal production could impinge on veterinary research in some areas common to both veterinary and non-veterinary interests. While the Department has the principal and basic responsibility for veterinary research, the work of An Foras Talúntais is determined by its Director subject to general control by the Council. As far as the Department was aware, the Council has not set up a veterinary research unit. The Committee trusts that there will be close co-operation between the various bodies, including the universities, to ensure that there is no avoidable duplication or overlapping of work in the field of veterinary research.

23. In paragraph 14 of this report the Committee has referred to a case where grants were made available by An Foras Tionscal for the establishment of a new industry which subsequently failed and there was no enforceable agreement for recovery of some or all of the grants issued. A somewhat similar case was brought to notice by the Comptroller and Auditor General in the course of his audit of the expenditure of the Department of Agriculture. Grants to a total of £22,398 had been made for modernisation of a bacon factory in the years 1960 to 1968 and the factory ceased production and was closed down in January 1968. The Comptroller and Auditor General was informed that the Department had not considered it appropriate to include in the scheme for grants for the modernisation of bacon factories a provision for the repayment, or partial repayment, of grants in circumstances where such a course appeared to be warranted. This scheme terminated in March, 1969. In the light of the experience in the case under review, the Accounting Officer agreed with the Committee that it would have been prudent to have provided in the scheme for repayment of grants on an equitable basis where such a course was justified.

GENERAL

24. Due to vacancies for staff remaining unfilled during the year the appropriation accounts show significant savings on the provisions for pay, etc. A number of Accounting Officers gave the Committee their explanations for the staff shortages in their Departments.

25. The Central Statistics Office was chronically short of staff both in the Clerical Officer and Clerk Typist grades, and also, unfortunately, of statisticians. There was an average of 20 vacancies in the year in the clerical grades. In these grades the turnover was substantial because replacements very often did not stay long in the civil service and the processes of recruitment were slow. This is a phenomenon common to all Departments. One reason given by the Accounting Officer was that at the present time there is a much greater variety of jobs for young people than heretofore and that it is an age of change. The Committee suggested that for the clerical grades the educational standards might be too high and might be reduced but the Department of Finance view was that there had been deterioration in the standard of typing and spelling and that it would not like to contemplate going down further on the educational scale. At the same time it appeared that some candidates with educational standards above the minimum were successful at the examinations and this could be a factor which caused them to leave the service for better or more interesting jobs.

26. In the Department of Labour there were 100 vacancies for clerical officers and there was a great deal of overtime worked which cost £29,000. The Accounting Officer believed that the civil service was not as attractive to those leaving school as it had been.

Qns. 336-7 Appendix 15.

27. The Department of Defence found difficulty in filling clerical vacancies of which there were 10 for Clerical Officers and 28 for Clerk Typists. The Department of Social Welfare considered that staff could not be obtained when they were needed, to some extent due to the time lag in recruitment procedures.

28. In the opinion of the Committee the Department most seriously affected is the Office of the Revenue Commissioners. In the year 1967-68 vacancies varied from 132 to 199 and the average daily number was 151. These included 11 vacancies for Inspectors of Taxes. Trained inspectors are frequently induced to leave the service for outside employment. Breakdowns and delays in procedures for safeguarding the revenue have been attributed by the Accounting Officer, in his evidence before the Committee, to shortage of staff.

29. Clearly something needs to be done to improve the image of the civil service. The Civil Service Commission has improved its methods of publicity but more could be done in this respect. Changes in conditions of employment and an extension of the field of recruitment are measures that suggest themselves to the Committee. From the point of view of budgeting and financial control, it is unsatisfactory that Dáil Éireann should be asked each year to provide money for some staff which in existing circumstances are unlikely to be available.

PATRICK HOGAN

23rd July, 1969.