Committee Reports::Interim and Final Report - Appropriation Accounts 1971 - 1972::27 June, 1974::MIONTUAIRISC NA FINNEACHTA / Minutes of Evidence


(Minutes of Evidence)

Déardaoin, 27 Meitheamh, 1974.

Thursday, 27th June, 1974.

The Committee met at 2.30 p.m.

Members Present:







H. Gibbons,





DEPUTY de VALERA in the chair

Mr. S. Mac Gearailt (An tArd-Reachtaire Cuntas agus Ciste) and Mr. J. R. Whitty (An Roinn Airgeadais) called and examined.


Mr. M. Jacob called.

No question.


Mr. T. O’Brien called and examined.

594. Chairman.—Paragraph 60 of the Report of the Comptroller and Auditor General reads:

Subhead I.—Improvement of Estates, etc.

In September 1971 an experimental group farming project was officially inaugurated at Grennanstown, Athboy, Co. Meath. An area of 232 acres was allotted between four farmers who agreed to surrender, in exchange, their existing farms in Co. Kerry. In addition to separate dwelling-houses the Land Commission constructed an outoffice complex including a silo and a milking parlour to serve the project. The farmers formed a limited company to which each leased his new holding, excluding the dwelling-house and a small outoffice and garden, for a term of twenty-one years with seven-year breaks. At 31st March 1972 the Land Commission had expended a total of £76,000 on the project comprising £26,000 on the acquisition of the land and £50,000 on improvement works. The market value of the holdings surrendered was estimated at £22,000 and the migrants were required to repay a capital sum of approximately £8,000 on a revised annuity basis. The net cost of the project to the Commission was accordingly in the region of £46,000.”

Mr. Mac Gearailt.—This paragraph is for information. It sets out the approximate cost of establishing an experimental group farm project at Grennanstown, Co. Meath.

595. Deputy H. Gibbons.—Have many other such experimental farms been established?

—None. We had intended, and made efforts, to create others in three or four centres, one in County Sligo, in Cork and in Kildare, but all those fell through. Two are in the incipient stages—one in County Meath and one, possibly, in Wexford, a private one.

596. Would it be too soon to say yet how successful they are?

—In relation to this particular one?


—The situation in relation to this particular one was that it was announced in the Third Programme for Economic and Social Development that the Land Commission would test the overall worth of a system of combined or group farming that would involve not merely machinery but the pooling of livestock and land as well. It was in pursuance of that that this particular project was undertaken. Co-operation was the basic feature of it—consultation in management and a sharing of tasks in the actual performance of the farm jobs—so that each could have some time off. In that way a seven-day week could become a five-day as far as the owners were concerned. That was the social side of it. The economic side would be efficiency in the optimum employment of capital; for example, one tractor being utilised instead of four. As far as the project itself was concerned, I might say that the goodwill and enthusiasm, so clearly evident at the outset, have not been maintained. It would probably be correct to say that the appetite for co-operation has been blunted but, beyond that, I should not care to go at this, stage. It is a personal thing to the parties concerned.

597. Deputy Bermingham.—Why did the others fall through? Was it because the people were not prepared to co-operate?

—They did not commence, really. We tested people and put the proposition to them in County Sligo, in County Cork and in County Kildare and there were no takers at that time. There is one in the incipient stages in County Meath involving three brothers. We do make a very good effort in relation to these where we can. In the case in Meath which is the subject of the Comptroller and Auditor General’s note, of the four, two were brothers and two others were married to sisters. We try to get a cohesive group like that. The cost was not any greater than if they were four ordinary migrants on transfer. This is a particular experiment in group fanning. As to the present position, I would prefer not to make any further comment at the moment.

598. Deputy Crotty.—Where were the difficulties encountered?

—Personality clashes.

599. You are aware that there is cooperative farming going ahead on a voluntary basis?

—On an entirely voluntary basis, yes.

600. Would you not imagine that if the advantages of this were pointed out to young people particularly, they would be interested in coming in, on a voluntary basis?

—In this particular case, of course, it was entirely voluntary. The four families did not rush into it without a clear and full understanding of what was involved. They were selected by the Land Commission as suitable farmers, suitable individually and as a group to participate in the project. On being told they were being selected they thought about it, discussed it among themselves. No doubt they consulted and listened to the views of others. We can all be satisfied that it was pretty well mulled over. Having finally teased it out, they were satisfied that they knew what the idea had in it for them and the effort and adjustment it would demand from them. They were free agents. It was entirely their own choice. They had one piece of ill luck. Each one brought with him twenty cows and five replacement heifers and during the following 12 months they increased the herd to 120 or 130 cows. All the herd went down with brucellosis. On the general question of group farming, the Minister of the day, when he was launching this project, did acknowledge that perhaps it would not suit everybody, that many people have a burning desire for separate ownership, prefer personal reward proportionate to personal sacrifice and to be completely independent and free. Group farming was fully explained to the people concerned before they came in. If there is a personality clash afterwards nobody can help that.

601. Would you say, with hindsight, that that it was started on the wrong footing by having relatives involved?

—One would think they would get on well together but perhaps they were too close.

602. How intensively is this project being pursued at present?

—At the moment I am not sure but I know that in the early stages they had every possible advice, guidance and assistance from the Land Commission and, in particular, from the advisory service. The CAO was very keen that they should be well served and he arranged that they would.

603. I should like to know the present position?

—I do not want to go beyond what I have said, that the original co-operation has not been maintained but one can always hope.

604. You would drop it because it did not get off the ground initially?

—I do not want to give any impression that it is dead.

That is the sort of impression I was getting from the Accounting Officer’s remarks.

—I am sorry if I gave that impression.

605. Deputy Bermingham.—Did the Accounting Officer say it was hard to get people to go into this kind of scheme?

—In regard to the project mooted for Kildare, we had land in sufficient quantity there that would enable a 3 to 4 group to operate.

606. You did not get enough people?

—That is so.

607. Would bringing in migrants be the idea?

—In the Kildare case we were not bringing them in as migrants. They were already resident there. They were Kildare resident farmers.

They would not take part in this?


608. Deputy H. Gibbons.—I understand that this system is operating in the Six Counties. Is it operating successfully?

—I know of only one instance in the Six Counties and my belief is that only about half of the land is pooled in that case.

Was this the one that appeared on television?

—I am only talking from recollection. There is the difference that in the Meath case all the land was pooled but in the Northern Ireland case only about half of it was pooled.

609. Chairman.—Paragraph 61 of the Report of the Comptroller and Auditor General reads:

Subhead L.—Appropriations in Aid

In the course of my examination of the Rent and Interest Account (No. 3) of the Land Purchase Accounts I observed that an area of 41½ acres, which had been acquired for the relief of local congestion for £2,890 6 per cent. Land Bonds in 1963, was still occupied by the vendor at 31st December, 1971. The Department’s outgoings on the land, including service of bonds, amounted to £1,489 while revenue received amounted to £255. I have communicated with the Accounting Officer in the matter.”

Have you anything to add, Mr. Mac Gearailt?

Mr. Mac Gearailt.—This paragraph deals with land which was acquired by the Land Commission in 1963. The reply received from the Accounting Officer, which members have received, is as follows:

On taking possession of this 42-acre estate (purchased voluntarily under section 36 Land Act 1923) on 29-3-1963 the Land Commission re-let the house and part of the lands to the former owner, John Martyn, to accommodate himself and his family while he was erecting, with the proceeds of the sale to the Land Commission, a new house on other lands he owned. In the event he did not proceed with the building and had then no other place to live.

Because of his family circumstances and having the sympathy of the local community—he had 6 young children at the time and was in financial difficulties— it was out of the question for the Land Commission to consider any action for recovery of possession and while the Land Commission continued to search for a solution local interest in the division of the lands waned somewhat and after a time Martyn went back into possession of all the lands. Recently 2 estates in the vicinity comprising 1,100 acres approx. were acquired altering considerably for the better the prospects for substandard landholders in the area. Martyn’s case has been examined again and proposals for a settlement with him have now emerged. These proposals provide for the allotment back to Martyn of the lands (and buildings) acquired under the 1963 proceedings in exchange for an area of 30a. 1r. 8p. of another holding his property in the townland of Rinn about 5 miles away (folio 2345) and for the purchase of the balance of this holding (10 acres approx.) under section 27 Land Act 1950 (cash). A term of this purchase will be that Martyn will, out of the proceeds, pay to the Land Commission a sum of £615 in respect of his continued occupancy of the lands sold to them in 1963. This amount, in addition to the amounts already paid by Martyn and others in respect of lettings since 1963 is acceptable to the Land Commission. The exchange will be on an equivalent basis and Land Commission will incur no loss arising from the deal. Indeed, as a result of the increase in land values since 1963 it will be possible to re-sell the lands obtained in exchange from Martyn at a considerably enhanced figure.

610. Chairman.—This is an unusual case?

—It is. I do not know if the Chairman is familiar with the details.

We have got some information on the details.

—As a follow-up to the written reply the situation is that since then the owner agreed in writing to sell to the Land Commission nine acres of his holding in Rinn and a commonage share and to exchange the balance of that holding (approximately 30 acres) for the allotment back to him of the 42-acre holding which the Land Commission had previously purchased from him. He also agreed to pay the Land Commission out of the purchase money the arrears of rent in respect of the re-letting to him of that land and also a monthly rent from the 1st January, 1973 until such time as the re-allotment is effected. The documents for the completion of this transaction have been approved by our own solicitor in the Land Commission and are with the owner’s solicitor at the moment for execution. I checked with my own accountant in relation to the matter and the belief is that there will be no loss to the Land Commission.

611. Originally this was a voluntary transaction?

—It was.

612. Under what circumstances? How did it actually come about?

—He agreed to sell his 42 acres to the Land Commission.

613. Who made the first approach?

—I imagine he did. His intention was to use the proceeds of that sale to build a house. In the event he did not proceed with building the house. He had no other place in which to live and because of his family circumstances and having the sympathy of the local community—he had six young children and was in financial difficulties—it was out of the question for the Land Commission to consider any action for the recovery of the land. In any event, local interest in the division of the property waned and we had already got about 1,000 acres of other land in the same vicinity with which we could satisfy most of the local smallholders.

614. Deputy MacSharry.—There is no loss to the Land Commission as a result of the deed because they will be able to re-sell the land obtained in exchange for the other land at a considerably enhanced figure. I did not know that the Land Commission were involved in land speculation?

—I do not think one could call it land speculation. There is a lot of land we have bought that we have sold at considerable loss. In the overall since 1923 I would imagine the Land Commission have suffered a loss in resale of about £4 million. If they can occasionally make a little profit on land acquired in 1962 and re-sold in 1974 I do not think it would be right to call that speculation.

615. I think it is unfair that this attitude would be in the minds of people as regards making money on land because in most cases when you take over land it is three to four years before you divide that land. If the division is to be on the basis of the enhanced value of the land it is unfair to the farmers who were not in a position to buy it in the first instance that now they will have to pay maybe twice as much in annuities for it.

—I do not think we have been reselling land at twice as much as we paid for it.

We all know that in the last five years the value of land has doubled.

—It is a certain fact that the price of land has increased immensely in value.

616. Have the Land Commission been involved in a policy that when they buy land at a price this year and add their outgoings to it they are putting an extra price on it because of the inflated price of land in that area when they are determining the annuity to be paid by the recipients?

—It is possible they do in given cases but not on the whole. All I can say in relation to that is that since 1923 the Land Commission have suffered a loss of about £4 million.

I will accept that. If it was £40 million it does not answer my question. Is the Accounting Officer now saying to me that in certain cases you do it and in others you do not? That is too much of a loophole to me in relation to sub-division of land.

617. Deputy Crotty.—This also brings up a very important point as regards the letting of land by the Land Commission in these circumstances. It brings about a situation like they have in England at the present time where office blocks are left vacant. In other words, the Land Commission should not let land quickly in view of the inflated prices and as a result make a profit or bring in extra revenue, call it what you like. I do not think this would be a good practice or that it should even be considered by the Land Commission.

—That we—?

That you would hold land and not divide it?

—There is no deliberate holding of lands on hands.

618. But it could leave it open to this type of operation?

—It could. But the Land Commission, when letting lands, will do so in the customary way; they will take into account the custom of the district in which the land is being let. For example, there is another subhead in the Vote, subhead F— Deficiency of Income from Untenanted Land £20,000—of which we spent £8,000. I use this to illustrate my point: in that year, in the account for untenanted land, the receipts came to £563,000. That would be mainly from lettings through auctioneers and stock managers. Outgoings were £571,000, comprised mainly of rates and herds’ wages, and servicing of land bonds, leaving a net deficiency of £8,000. We made no profit at all; we made a loss that year.

619. Deputy MacSharry.—But, when you subsequently determine the annuity, you bridge the gap?

—No, on the whole we do not. All I can give is an overall figure. Perhaps I could give—in relation to the year 1971-72—what we paid for land and what we sold it for. But, overall, I feel there was no profit.

620. Why do you say then, in the last sentence of your two-page document:

“Indeed as a result of the increase in land values since 1963 it will be possible to re-sell the lands at a considerably enhanced figure?”

—That may possibly happen.

Why did it happen in this case?

—If we were to avoid a loss. Perhaps it would have been wiser not to have used that sentence.

621. Why do you not avoid the loss in every case in that event?

—We try to avoid the loss, but we cannot.

But you were able to do it in this case?

—We sell the land at the going rate, if we can get it, but there have been several instances of people who refused to take land at an annuity because it was too high. We have to reduce it. We make adjustments regularly in the re-sale price of land to accommodate allottees. If we cannot get a better price, we will sell it at what we can get for it.

Deputy Crotty.—But this does not arise too often?

—It does not.

622. That you cannot get the price for land. What worries me is that, firstly, land is held for a long time by the Land Commission before it is divided and, secondly, I was not aware that you took the new inflated price into consideration?

—I do not say that we take the new inflated price into account. In fact it is a pity that sentence is there; there is no need for it.

623. That is what gave rise to the query. You mentioned that you did take into account the inflated price. The danger is— and it is a real danger—that the Land Commission will hold on to land. We are trying to get land divided quickly. There is a genuine complaint that the Land Commission are holding on to land too long, in some cases, for up to five or six years. We have found this in all our areas. We know of cases where land has been held for ten years but in many cases, it is held for five or six years. It is a very serious thing if the Land Commission hold land and thereby reap increased annuities. I do not think it is a good practice. It is a practice about which we, on this Committee ought have a thorough explanation?

—I will give this assurance from what I know myself: that is, that the Land Commission do not—repeat “do not”—speculate in land.

624. Deputy Governey.—I want to raise something on the same lines. I have experienced this too, this business of the Land Commission holding lands. I do not know whether or not you are setting the lands. But, at the time it is divided, you are probably getting more for it. But, on top of that, you are holding lands, setting them— some people taking them over may be good people but there may be others who may run out the lands; it is not their own; they are getting it for a certain time only. There are houses going into a dilapidated state because they are being left idle there. I have seen this in my own area. If you hold land for five years on a setting basis, when it comes to the division, are you not then charging a much higher rate to the people getting that land? I could understand it if you held it for 12 months or two years but not beyond that?

—My answer to that is: on the whole; “no”; we do not charge extra. There are a lot of charges made against the Land Commission from time to time about lands being held on hands. But, when we go to erect houses and have to place contracts for installing new people on lands, it will take sometimes three or four years to get a house built by a contractor. We find it very difficult to get contractors at all. As you will see, under subhead I further down— “Saving was due mainly to difficulty in placing building contracts in some areas.” I know that in that particular year we failed to place contracts at all for ten houses. We often find that rural housing, or housing in the open countryside, will suffer when there is a boom in urban housing. We are held up in the erection of houses and out-offices by contractors. That is the reason why, very often, they are held on hands. Or we may be waiting for other land to come in in the same area, so that we could have one comprehensive scheme for a whole district.

625. But when the Land Commission take over lands on which there is a house, a person leaves the house and lands; it may be a swap and the house is left. I know of a case—and perhaps more than one—where the house has got into a dilapidated state, and you know what can happen in that regard?

—I am very conscious of that and so is the whole of the Land Commission. We have now adopted a system under which these houses will be disposed of separately and interim schemes will be prepared for them. They may even be given to a local person. We do take cognisance of the fact that the houses will deteriorate for want of occupation or heating.

626. What is your time scale on that?

—About one year.

627. Is that not too long?

—It is; very often it is too long; it is longer than I would want. Charges are often made against the Land Commission that they have lands on hands for five or six years. But, when I go to examine the situation, I find that is the impression in the locality. Invariably I find that we are not that long in possession, that this is a local feeling because Land Commission proceedings may have started and may not finish for three years; we may be in possession for two years only but the local impression is that we are there for five.

628. Deputy MacSharry.—I have in mind six or seven houses that you built near the Lisadell Estate. Something would want to be done with those before Christmas rather than leave them lying.

—I quite agree. In fact the Minister has given a policy instruction that, if possible, lands are to be divided within two years and we have nominated two people in the Department to arrange in that direction.

Deputy Governey.—I am not referring to houses built by the Land Commission. I am referring to houses that are vacated and get into a dilapidated state. I know of one such case and the house is of no use to you at the moment.

629. Deputy Tunney.—I want to make one comment on this, and here I may be differing from the views of my colleagues. Certainly I would not like it to go from this meeting that we were accepting it as a virtue on behalf of the Land Commission to make a loss. I know of cases around County Dublin where people who got these lands, held them for—I do not know what is the minimum period allowable—six or seven years and made out of them. I do not see anything wrong with the Land Commission paying its way in the matter of these transactions, especially when the recipients invariably are getting something which, notwithstanding the annuities, is a fairly worthwhile investment. Contrary to what the Accounting Officer says in regard to his regret about the last sentence of that document, I am happy to read what is there.

—It seemed to me that word “profit” was becoming a dirty word. I do not know whether that was the sense of the Committee or not.

Deputy Crotty.—No, I think it was not construed properly in that sense. What I am worried about is that land could be held too long to get this advantage. If possible, I would like to see the lettings made by the Land Commission over the last 12 months, what it cost them and the annuities they got.

630. Deputy Bermingham.—Land has been held for ten years by the Land Commission. I presume the land was acquired to meet a need which existed in the area. A period of ten years would change and probably destroy the people who were hoping to get that land. There may have been a question of the kind of farming we talked of earlier involved at one time but there is land in County Kildare held by the Land Commission for ten years and it is still not divided?

—I know the estates to which the Deputy is referring. There were three and they were being built up gradually over a period. Group farming was, in fact, raised in connection with those and that is amongst the reasons why they have been in the possession of the Land Commission for so long.

631. Deputy Crotty.—I should like to get the figures for land settings in the past year, when the land was acquired, what it cost and what annuities were charged for it?

—I do not have that with me.

Any time will do.

—I could send the Committee a note on that. I can give one overall figure. Land bought by the Land Commission between 1923 and 1972 cost a total of £22 million and the resale price of that land was £18½ million. There was a loss of about £3½ million.

We accept that but I would like a statement showing the land that was let within the last 12 months.

632. Chairman.—How much land are you holding at the moment?

—About 65,000 acres of arable land. I should like to be clear on what Deputy Crotty means. Does he mean land that was finally allotted?

Deputy Crotty.—That was allotted in the last 12 months, when it was acquired, the price paid for it and the amount that was charged for it.

Deputy MacSharry.—And the amount that was made by letting it?

—There may have been a loss.

That is all right. But you are making a profit in this case according to yourself?

—That would be a very slow thing. It would run into hundreds of cases. I do not know whether it is relevant to the accounts.

633. Chairman.—Essentially the point in question is land acquired, how long it is on hand and the circumstances in which it is disposed of. The suggestion was made that the information for one year should be given. Is that feasible?

—All the land that was allotted in 1973-74, when it was acquired, the price at which it was acquired and the price at which it was resold?

Yes. You say there will be a great deal of work in that?

—There will. It will be a slow thing to do.

634. How many transactions would be involved roughly?

—There could possibly be between 300 and 400.

Deputy Governey.—Some cases in each county?

Chairman.—Would it shorten things to confine it to a particular county? Would it make it easier?

—It would make it easier.

Deputy Crotty.—To get the overall picture we would need to get it for all counties.

Deputy H. Gibbons.—We are charged with the fact that the Land Commission hold lands too long. It is alleged that they get rents and make a profit on it. We answer by stating that we are assured that if there is extra rent this goes to the benefit of the tenant at the time of the letting. I always assumed this involved no profit for the Land Commission. If this information were made public we would not be able to use this argument in future. Nevertheless, I agree with Deputy Tunney that we should not do this at a loss either. Like the Post Office, the ideal situation for the taxpayer, who is the payer in the end, would be if the Land Commission could run its affairs with neither a loss nor a profit.

Deputy Crotty.—I agree with Deputy Gibbons on this. My only reservation is that we should not hold land for five, six or seven years just to make it break even.

Deputy H. Gibbons.—I agree. In County Leitrim there have been endless complaints about that. In County Roscommon, where farms are much smaller than in Deputy Crotty’s area, the Land Commission held about 18 farms. It was explained to me that the work would not be worth while doing unless they got this but then the farms are very small and scattered. I would say there would be no place in Deputy Crotty’s area comparable with this so the situation changes. However, this is one of the things we hear a lot about around the country.

Deputy Governey.—Is it not the duty of the Land Commission to relieve congestion? Surely, if they hold land for five or six years they are not performing their function?

Deputy MacSharry.—The congestion is relieved by then. They are all gone.

635. Chairman.—Is the Committee asking for information about land over a certain period?

—That would be more a policy matter on which the Minister has replied to parliamentary questions several times.

636. It is very difficult to get away from policy. I think what the Committee should be concerned about, first of all, is whether there is a loss, from the public accounts point of view. That is Deputy Tunney’s point and he is perfectly right. However, it is equally valid to inquire whether, in avoiding a loss, something else is happening. In other words, from our point of view how the loss is avoided. It seems to come back simply to how long land is affected. The question I would like to ask is—I am a city Deputy with no interest in this—why should there be any inordinate delay in the acquisition and the distribution of land? Surely land will not be acquired unless you have some idea of what you are going to do with it?


Deputy H. Gibbons.—Then why should it be in your hands for as long as five years or more?

—For debate purposes that sounds very reasonable and it would to anybody, I must agree, but in the actual operation of it we find that when we take land, first of all we have to improve it, fence it, divide it and we have to interview all the people in the locality who may or may not qualify to receive land. We get an enormous amount of representations in relation to it. There may be a very big job to be done in the district. We may get one piece of land in 1962. We may be after another piece in the very same area to which there will be objections. The owner may be away. His objection may be heard and adjourned for two years. Eventually the objection may be disallowed, a price may be offered and he may appeal on price. He may refuse to give possession and it might be another three or four years before we get that piece of land. The same could happen to us in regard to still another section of land where we are trying to build up a pool of land. We have all the land got say five years later and we can always be charged that we have got pieces of land on hand for five years. We have, where we are trying to build up a sufficient pool of land to do a comprehensive job in a particular district. It would be fair of the committee to recognise that

637. Deputy MacSharry.—I recognise that and this is an important point the Accounting Officer has made; but when you look at the individuals around that holding you will find that maybe one of them had rented that land for the purpose of buying it. When the Land Commission take it over some dealer in the area comes in and pays twice the price for that land and takes it away from the congests who are trying to survive on it. This happens in a lot of cases of public auctions. The small farmer is not able to compete with the big man who knocks most out of the land and destroys it.

—We seek to overcome that by letting it in sufficiently small lots to accommodate local small people who are interested.

638. You will agree in the majority of cases around my area of Sligo-Leitrim that it is the big cattle dealers who take most of the land. If they do not the small man is forced to pay up to three times more that he should have to pay.

—It comes back to price again.

639. Deputy H. Gibbons.—I should like to endorse what Deputy MacSharry has said. In my experience most of the complaints about the holding on to land are covered by the type of people referred to by Deputy MacSharry. I suggested in the past that when land is acquired by the Land Commission they should be able to place an economic rent on it and, perhaps, add 10 per cent or something for contingencies. They could go around and offer this land to the congests and say: “We are prepared to give you this land at £X per acre for the coming year. If you do not want it we will offer it to somebody else.” This would have several advantages. It would rule out competition between neighbours who, unfortunately, believe that if they pay sufficient for the land they will have it year after year.

—If we were to do that would we not be as well off to divide the land immediately? I can assure you that in actual practice that cannot be done. We have at any given time hundreds of applications for land. I saw a case this morning where there were 79 applications for land and there was only enough land for eight people on it. Seventy-one people had to go without it. What is one to do in the letting of land then? The division of land is a very agonising business because we cannot satisfy everybody. There is no hope whatever of doing it.

My answer to that is to let the eight out of that 79 go into the final running. For all practical purposes you know who is likely to get the land. Your officers have a very shrewd idea who will get it and those are the people who should get the first preference. They should get it on a letting basis for two or three years and there would be an obligation on them to maintain the land. In this way you would get over this problem. I have seen in practice that the holding on of land by the Land Commission leaves more satisfied congests and I would not agree with the argument that when you get land you should divide it immediately to satisfy some people or take people off our backs. It is often the holding on to the land which helps in the end. The point mentioned by Deputy MacSharry is the one which is creating most of the trouble.

640. Chairman.—I think we have strayed a bit. In the circumstances I did not want to function too strongly as Chairman but I think we should leave it now. I should like to come back to a point made earlier. If there is any specific information any Deputy wants we could ask for it. Deputy Crotty asked for some information on land sold. Would the Deputy like to have that?

Deputy Crotty.—I would. I think it would do a lot of good although it may cause a bit of trouble.

Deputy H. Gibbons.—I would be prepared to settle for one from each county, the greatest loss and the greatest profit.

Deputy Crotty.—That will do.

Chairman.—Can you do that?

—I am not clear as to what I am to do.

Chairman.—My own feeling is to do nothing or do a proper job.

Deputy Crotty.—I should like a proper job done.

641. Chairman.—All right. We are asking for a list of the holdings disposed of within the last 12 months stating when they were acquired, and the price, in other words during the past 12 months or, if you like, you can take one of the accounting periods, how much land was disposed of by the Land Commission and in each transaction the date on which the land was acquired and the realised price.*

—Would one figure do—that is overall totals?

No. I think it would be informative to have this information. Did you say it would be about 300?

—I am only making a guess at that. It could be between 300 and 400.

300 or 400 should be within your capacity. After all, the disposal of land is a fairly big transaction.

—Is this for the whole country or for a particular county only?

Deputy Crotty.—For the whole country.

—Perhaps I might make one observation I should have made earlier. The price for which land is bought and resold is an excepted matter and is not a matter for me, as the Accounting Officer. It is fixed by the commissioners and by them only; it is a reserved function.

642. Chairman.—Nevertheless, how much was paid is a statistical fact. You have to account for that money?

—Yes, on the cash side.

643. Whether or not you determine the payment of it, you are the Accounting Officer for that money. Martyn’s case is an exceptional one?

—Yes, it is.

644. We shall go now to the Vote itself on page 90. I note that subhead B.1. carried a note: “Excess due to increase in travelling allowances and inadequate provision for office equipment.” Is that not another way of saying there was more office equipment bought than was provided for?

—What happened there was that the rental for our computer was understated and sufficient provision was not made for it in the Vote.

645. I see a note, under subhead E which reads: “More Land Bonds than anticipated had to be sold.” What does that mean?

—That means that bonds allocated to the Revenue Commissioners in satisfaction of estate duty or income tax, if sold below par, have to be made good out of this subhead. The Revenue Commissioners have to get their full pound of flesh. If the bonds are sold at a discount, the deficiency is made good from this subhead.


Mr. T. O’Brien further examined.

646. Chairman.—Paragraph 62 of the Report of the Comptroller and Auditor General reads:

Subhead C.2.—Forest Development and Management

I referred in paragraph 52 of my previous report to improvement works, including the provision of tourist amenities, at Lough Key Forest Park, Boyle, County Roscommon. The final cost of development was estimated in March, 1972 at about £425,000 to be apportioned between Bord Fáilte Éireann and the Forestry vote on a 70:30 basis. Bord Fáilte has contributed £298,000 in discharge of its liability. Expenditure on the project to 31st March, 1972 amounted to £270,400 of which the vote has borne £72,850, including £26,300 charged in the year under review.”

Mr. Mac Gearailt.—This paragraph is for information. It shows the expenditure incurred up to March, 1972, on improvement works, including the provision of tourist amenities at Lough Key Forest Park, Boyle, County Roscommon and its apportionment between Bord Fáilte Éireann and the Vote.

647. Chairman.—As there are no questions on that paragraph, we shall take the main Vote, page 93. Under the note in respect of subhead C.3, why was £350 received from the Vote for Remuneration?

—C.3 is in respect of saw milling operations.

It is wages?

—Yes, wages. We have two sawmills, each with a mill manager.

648. Deputy MacSharry.—Might I ask a question in relation to subhead G—Game Development and Management. All the money allocated to you was not spent and I wonder why because this is a very important aspect of forestry work. I should have thought that you would have been looking for even more money there.

—I think some of the game councils just had not their accounts cleared for that particular year. Some councils do not succeed in completing programmes in a given year.

The witness withdrew.


Mr. S. Ó Conchobhair called and examined.

649. Chairman.—We resume consideration of paragraph 40 of the Report of the Comptroller and Auditor General. Have you any further information, Mr. Ó Conchobhair?

—I have a statement which I gave to the Comptroller and Auditor General and to the Department of Finance. If you will permit me I will read it to you.


—On the last occasion I was before you the specific issue in relation to the extra expenditure on the Church of Ireland Training College became somewhat obscured by general issues in relation to delegation and programme budgeting. With your permission, Chairman, I would like to make a statement in relation to the accounting of £39,080 in excess of the original estimate of the amount of direct grants sanctioned by the Department of Finance. When the Department of Finance in their minute of 18/12/1969 stated that it was not disposed to authorise any further capital expenditure on the Church of Ireland Training College, the refusal was in the context of our seeking sanction to purchase additional land adjacent to the College. The issue then narrows down to whether once the original estimate for the approved building was exceeded we should have sought the specific sanction of the Department of Finance. The increase over the original estimate was mainly due to inflationary effects on building costs, for example, wages. My case is that if my Department had to seek sanction for price increases in the case of each individual project, hundreds of applications would need to be made to the Department of Finance each year to cover inflationary increases for primary, secondary, vocational and community schools, as well as regional colleges, training colleges, etc. However, if in the particular instance of the Church of Ireland Training College, the Committee take the view that specific sanction for the excess should be obtained, I will have an immediate application made to the Department of Finance. The accounting for the excess of £39,080 took place as follows:—

(a) £19,710 was expended in the year 1971-72 out of the capital provision of £150,000 sanctioned for Training Colleges,

(b) £11,920 was expended and accounted for out of capital provision of £70,000 in the financial year 1970-71,

(c) £7,450 was expended and accounted for out of capital provision of £66,000 in 1969-70.

650. Quite apart from the case you have mentioned you have made it clear in that statement that once a sum is sanctioned for a building then you are at liberty to deal with inflationary or consequential matters yourself. Did I understand you to say that?

—If the money is voted. If we are within the subhead.

651. What is the view of the Department of Finance on that?

Mr. Whitty.—As the Accounting Officer pointed out, our limiting of the capital expenditure on this particular project was in the context of a particular thing happening, namely, that the Department of Education wanted to buy more land for the college and we refused and said we would not allow any more. That was in the context of that particular issue but we do know that especially in recent years inflation has had its effects on building costs generally including the training college and if they had come to us and said: “We have to spend this extra money because of the inflationary increases covering this particular project” we would probably have allowed it.

652. Chairman.—Yes, but surely the principle is involved. It is not so much whether you would allow it or whether the Department of Education were right in deciding that it was a cost to be paid. The question that is at issue here is the control of the Department of Finance and having regard to the statement of Mr. Ó Conchobhair I think it requires a definition from the Department of Finance on what it is delegating and what it is not. If the interpretation of Mr. Ó Conchobhair is correct, then any Department which has a global Vote covering certain activities can dispose of that Vote solely on the grounds that it keeps within the Vote and devotes it to an object that is within the Vote. I think you are raising here a very far-reaching question of the control of the Department of Finance. Are you going to keep control of expenditure on particular items or are you delegating responsibility?

Mr. Whitty.—I would not like to give a definitive answer to that as the matter you raise goes beyond the Department of Education.

653. Chairman.—The Committee need to know definitively what is the situation. Mr. Ó Conchobhair says there was a Vote and within that Vote there are a number of projects. He has claimed that provided he keeps within the Vote and confines the expenditure to the project he can virtually do what he likes with it. I know that is paraphrasing what he said. He said he is entitled to deal with the inflationary excesses out of the Vote but there is very little difference between that and claiming that he is entitled to make any of the necessary adjustments within the same terms. There is a claim by a Department in regard to expenditure. Where do the Department of Finance stand? Are you delegating that authority or keeping the control? If you are delegating the authority let us be clear about it and there is nothing further to be said to Mr. Ó Conchobhair. If you are not delegating the authority then we want to know why the control was not exercised. Is that a fair way of putting it? If you do not think it is, please say so and we will look for information.

—We are talking about a particular item which is building.

654. Yes, but you did in the course of that statement make that general observation.

—I made a general observation about the building provision. My case is if my Department had to seek sanction for price increases in the case of each individual project—that is a building project—hundreds of applications would need to be made to the Department of Finance. Every time we enter into a contract the man who contracts puts in a clause to cover himself in regard to wages. It would mean that if we exceeded it by a shilling we would have to go to the Department of Finance.

655. What has been the procedure in the past?

—The procedure up to now is that we make a contract. Generally, we have been fairly lucky in that we have been able to estimate the cost within a reasonable sum and we have not been ridiculously out. This was one of the ones that came in before our building unit took control of the situation and our estimate was fairly considerably out.

656. Deputy MacSharry.—The Chairman asked you a definite question. In the past did you not go to the Department of Finance for sanction for every little tittle tattle as described by Mr. Whitty in the last few minutes?

—Not unless they forced us to, not in regard to building and not since we started to build at second level.

657. In capital works generally the Department of Education have had Estimates approved by the Department of Finance and they could do what they liked after that, overspend?

—We also have to go to the Department of Finance to look for money in the Estimate and we say there is £X for this and so much for that. Within that limit, provided we can defend it later if Finance wants to ask about it, we can spend it as we want. They could not ask us all the time. There is a 12 per cent increase in wages and this is automatic.

658. I accept that but when they wrote to you and told you that you could not spend any more on this particular project?

—That was in relation to the buying of additional land.

659. They said no more money on that project. They did not say anything about land. The land question is coming in today. On the last day there was a specific instruction from the Department of Finance to the Department of Education that no more money be spent on this project. There was nothing about land. Could we have the letter read in?

—It is the same letter but it was in reply to a letter we had written.

660. We have to go by what was before us the last day. There was nothing about land the last day. Programme budgeting was questioned upside down and I seem to be the only one who knew it was not relevant at all, that it had nothing to do with it.

—I accept that.

661. Chairman.—The letter stated:

In summary, therefore, the Minister is not disposed to authorise money from capital expenditure on this college.

That is the end of the letter. I will read the whole letter. It states:

I am directed by the Minister for Finance to refer to your minute R0103 of the December, 1969 concerning capital expenditure at the Church of Ireland Training College. In reply I am to reiterate the opinion already expressed to the effect that the State’s contribution on a training teacher basis has already been exceptionally generous in respect of this college and in relation to the numbers to be provided for the recreational facilities are above average for this type of institution. Finally, there is the fact that there are many more urgent demands on the scarce capital resources available. In summary, therefore, the Minister is not disposed to authorise any further capital expenditure on this college.

—Could I refer to the term “recreational facilities” because this is precisely what we wrote in the minute to which that is an answer. We asked concerning the purchase of certain lands.

662. This letter seems to be in reply to a minute from the Department of Education to the Department of Finance in which you request the purchase of the extra land. There is a specific case where we want to know what is the attitude of the Department of Finance. It is as simple as that, Mr. Ó Conchobhair. We know your facts. We require the Department of Finance to say to us, without equivocation, whether they approve of what you did or whether they consider it should have been referred to them.

Mr. Whitty.—In view of the specific terms of our minute I think the extra expenditure should have been referred to us.

663. Chairman.—Very good. If you are prepared to say that unequivocally that is something for the Committee to consider and it is a point for you Mr. Ó Conchobhair then. If the Department of Finance say it should have been referred to them now we have the situation where you appear to have acted ultra vires. What do you say to that? I refer to the specific case.

—On this specific case I go to the Department of Finance. As far as we were concerned the Church of Ireland was one of many building projects we had in hands. We adopted the same attitude in every single one of them.

664. In this specific case you go to the Department of Finance. There is a comment for us. Now, take a more general case. In reply to us you have made what I might call a general claim. You have a claim of right as a Department and it seems to me that this can be regarded as an interpretation of your relationship with the Department of Finance in general terms. What do the Department of Finance say to that? I think this Committee requires a definition from the Department of Finance as to whether they are content, having sanctioned individual projects, then to leave the consequential adjustment as between these projects to the Department concerned, provided solely that it is within the overall Estimate. Is that an acceptable theory and principle for the Department of Finance?

Mr. Whitty.—As the Accounting Officer has pointed out, there is a very substantial building programme in progress on the Education side, particularly in the last, say, five or six years, since the scheme for building grants for secondary schools was inaugurated; also since the building of such things as regional and technical colleges commenced. The way that is handled is that, at Estimates time, the Department of Education tell us—in respect of each particular subhead—how much they want and how that amount is built up; if they want to start building X number of regional technical colleges, Y number of secondary schools and so on. The same applies to the vocational side. We, in agreement with them or otherwise, tell them how much they can spend under each subhead. We do not know how much a particular regional or technical college will cost ultimately. In relation to the expenditure for a particular year, we cannot tell them: you must not spend more than X pounds on a particular project. I suggest our function is that once the total of a subhead has been agreed, thereafter, it is the Accounting Officer’s responsibility as regards the expenditure of moneys out of that subhead.

665. Chairman.—Then you are happy to accept the principle enunciated by Mr. Ó Conchobhair on behalf of the Department?

Mr. Whitty.—I would hesitate to speak on behalf of the Department as a whole.

Chairman.—Well, in relation to the Accounting Officer and the Vote with which we are dealing: are you prepared to take that as a ruling principle?

Mr. Whitty.—Oh yes; I think so.

666. Deputy MacSharry.—You are stating there quite clearly that, once a subhead is agreed—naturally, a subhead will be made up of anything up to 50 items; and they are all costed in the making up of that subhead total—Finance now will say to the Accounting Officer: you spend that, as long as you do not go over that amount under that subhead. Nine or ten things could be neglected and two or three things have all of the money spent on them. I just want to get this clear in my own mind: once a subhead is passed now, it can be spent anywhere on some of the items making up that subhead total?

Mr. Whitty.—They cannot spend any more on a particular building than the contract price.

667. Deputy MacSharry.—But that is breaking it down into the individual items making up the subhead. That is a different story. You said a subhead is submitted, sanctioned and agreed and, as long as they do not go over that, they do not have to come back to you. There might be five building projects in that and they might spend twice as much money on one of them and half on the other? Is that all right with you?

Mr. Whitty.—I doubt if we can control, let us say, the building progress in respect of each of maybe hundreds of buildings. If one could extend that to national school buildings—where there are nearly £6 million in the subhead—we could not be expected to go after each particular school.

668. Chairman.—Coming back to the particular case, then on what basis do you say that the Accounting Officer should have referred it to you?

Mr. Whitty.—That particular building project took place at a time when there was relatively little building going on. It was the practice, I think, in cases of this kind— say, a training college, which was a rather unusual type of construction; it was not a series of schools as one gets in an ongoing programme like national or secondary school buildings.

669. Chairman.—But the Accounting Officer has applied the principle in regard to what we are talking about here to the one of which you have made an exception. What we want to set down here, without confusing the issue, is first the particular case which I thought was answered; you said you think it should have been referred to you for the reasons you have given. But, then, the Accounting Officer made a claim which you are looking at in another way. Quite frankly, we are somewhat confused because we do not know what is the position. It is not a question of financial policy; we want to know what are the procedures. The Comptroller and Auditor General will want to know what sanctions he has to pass; what sums are properly sanctioned and what are not. This is what we are worried about?

Mr. Whitty.—If there was a particular case of a secondary school in which we said specifically: you cannot spend more than a fixed amount on that particular project we would expect then that, if they were going to spend more on it, they would consult us.

Mr. Mac Gearailt.—Surely that would happen in this case, if you said: “you cannot spend any more money”?

Mr. Whitty.—That is what I have said.

670. Chairman.—Mr. Whitty is saying that it is this letter in this particular case that has made the seeking of sanction necessary and why the Department should have gone to them in the first instance. But we are still not quite clear on who is responsible for the authorisation of excessive expenditure in the sense that has been inferred. In other words, is there delegated authority to accept this responsibility by the Head of the Department concerned, or by the Department, or is Finance still desirous of exercising control and saying: you can or cannot spend, and you have to have our permission before you spend? The Committee would like to know about this because, quite obviously, this will crop up in the future—an Accounting Officer spending in excess of what is provided for a particular project. The Comptroller and Auditor General will ascertain that fact and the question arises immediately as to who authorised the excess and who is authorised to authorise the excess?

Mr. Whitty.—In relation to the building programmes of the Department of Education, the Department of Finance does not say to it: you may not spend more than a certain amount on a particular building. We do not say that.

Deputy MacSharry.—But you did say it?

Mr. Whitty.—We did say it in that particular case but I explained that that was at a time before this general building of secondary and higher level programmes began to come up.

671. Deputy MacSharry.—But, just to have it clear in my mind, what you are saying is that a subhead is passed for particular items. Presumably, you go through those items in Finance when Education submits them to you. It may be £40,000 for this school, £38,000 for another, £54,000 for yet another and so on. As I understand it, what you are saying to us is that it does not matter whether they spend £42,000 on the one that is £38,000; £37,000 on the one that is £42,000 and £64,000 on the one that is £43,000 as long as they do not go over the total of the subhead?

Mr. Whitty.—But the Accounting Officer would naturally be responsible to the Comptroller and Auditor General to ensure that the money was spent properly; in other words, that the contract price was adhered to.

Deputy MacSharry.—I am not going into that sphere at all. I am just getting the determination of sanction from Finance to Education, or any other Department, in relation to a subhead and what makes up that subhead?

672. Deputy Crotty.—Let us take this point a little further. Is there any control from Finance—where a project exceeds the Estimate by X per cent? I realise the Department of Finance’s and your Department’s difficulties in relation to this; that they cannot go looking for every little amount expended. But, if you are spending a fair amount of money—say, a million pounds—on a project and it turns out that it is going to need £1½ million—say, a 50 per cent increase—is there any control where the percentage cost of a project—we will take it that the Estimate is reasonably accurate; we cannot bring it down to a five-point, but, where there is a substantial percentage increase, is there any come-back from the Department of Finance to get sanction for this or, as Deputy MacSharry says, once they keep within the subhead, is it all right with Finance?

—Is that addressed to me?

It concerns Finance but you may take it.

—We tell the Department of Finance what we expect to spend on each project within the subhead. At this stage I should like to make it clear that I am talking about building and let us not extend that to the rest of the Vote. We tell the Department of Finance what money we expect to spend. There are ongoing projects. In other words, there are buildings which started last year and are going on this year. The occasion can arise when, for a number of reasons, the money is not spent but on the other hand a contractor may finish his building faster. This has happened. We had a case this year where a builder was faster than we anticipated and he demanded his money. He must be paid for what he has done because he has a contract to erect the building for £X and he is not tied down to a specific period before he can be paid if he has the building completed. He must have the building completed within a specific period but if he completes it at any time during that period—he can do it six months before the final date—he must be paid his money.

673. Chairman.—Would you balance the two? You are not paying one but you are paying the other; would you let Peter pay Paul?

—In this case I would balance the two.

674. This is what raises the whole problem. I am taking it that we are still confined to building. As I understand it in your estimates for buildings you do not submit a global requisition to Finance; you submit your projects and it is on the basis of the examination of those projects that finance is sanctioned in the first instance?

—Nowadays in relation to capital grants for buildings we receive a global sum from the Department of Finance. We say what we are going to build and that is all we say at that point.

675. This change in procedure, if there has been a change in procedure, is what the committee want to know about. The old theory was, as I understand from the remarks of Mr. Whitty, that you submitted your projects, they were adjudicated on and a sum was allocated. As I understand it, any variations in that or any excess expenditure was referred back for the individual sanction of the Department of Finance. Any surplus would not be disposed of by the Department but would be surrendered to the Department of Finance, notionally, in an accounting sense. As I understand the position now, from the conversation here, it is that the Department of Finance gives a global sanction for a subhead and leaves it to the Department to work out the rest. Is that the position?

—One small point of explanation. Up to recently the Department of Education was not a builder. The Department never built secondary schools.

I know that.

—Neither did the Department build any other schools. The building of primary schools was done by the Board of Works who received a global sum and decided on the number they were going to build. Now we have gone into building in order to save money.

And you get a global sum?

—Our expertise is now greater than that of any other group.

676. Deputy Tunney.—I should like to have the position cleared in respect of this project. Was the overexpenditure in respect of the purchase of land which was not included in the first instance?

—We asked to buy land and that is what caused this letter.

Therefore, it is entirely in respect of unexpected inflationary prices?


If the Department of Finance give a direction I thought that must be obeyed. On the other hand, if you do not get some flexibility in it, and if different Accounting Officers have the feeling that they will be tied in certain areas, would we not be encouraging inflationary estimates so as to avoid the predicament which has arisen here? Would that be a wise policy? If I were an Accounting Officer and felt I was restricted to certain areas would not my tendency then be to inflate my estimates to cover even unlikely expenses that might occur?

677. Chairman.—The Department of Finance, I should imagine, have had ample experience of dealing with that phenomenon over the last 50 years. We are anxious to be clear on the question of procedure. We are not trying to say what is political, what is a policy or what is desirable. We are assuming that the project is in order but we are worried about the accounting procedures. We want to be clear when sanction has to be got and who is taking responsibility for the expenditure. This question has arisen now between the Department of Finance and the Department of Education and it is particularly underlined by the statement made by the Accounting Officer here, a claim of right, and we want to be clear that the Department of Finance accepts that. The practical effect is that if the Department of Finance is controlling expenditure in detail this Committee is reasonably satisfied that there is a check, a balance on the expenditure. But if the total responsibility is left with the Department concerned then this Committee has to investigate the accounts in more detail. That is the question being posed by the Committee because obviously somebody must look at the details and say if the expenditure was justified. Where an Accounting Officer comes in here and behind him there is a Department of Finance sanction then this Committee can feel that a built-in check is operating and we need not go any further; but if an Accounting Officer comes in and has the total responsibility and this Committee knows there has been no further check on the matter this Committee will have to see the accounts and the details. That is the issue being raised. If the Department of Finance abdicate their control beyond a certain point by the allocation then the Committee has to step in and see the details of any excessive expenditure of a particular size. We must do this in fairness to the Comptroller and Auditor General because he must have the necessary authorities vouched in the accounts.

Mr. Mac Gearailt.—I should like to make one comment about this particular case. Arising out of what has been said by the Accounting Officer about global figures for specific functions, in fact I know that in this particular case—the Accounting Officer will not mind if I mention the figure—that the Department of Education looked for £500,000 for a training college capital works and they were cut back to £150,000. I got no indication of where that money was to be spent. There are four or five training colleges in the country and it could be spent on any of them. The only figure I have as a guidline is the original figure sanctioned by the Department of Finance. It may be said that inflation was responsible but it must be remembered that there is another party to this particular building contract. The State was not putting up the full amount, the Church of Ireland training college authorities were also concerned. Who was to say that all the extras must be paid by the Department of Education? I cannot adjudicate on these things so I just report the facts.

678. Chairman.—Yes, but I go further and say that in the original system the Committee has the security of knowing that there has been a check when Department of Finance sanction can be quoted because that is the function of the Department of Finance. If the Department of Finance delegate beyond a certain point the Committee will have no alternative but to make its arrangements and go into the details of these cases.

—You put me in a difficulty, Chairman. I do not want to be contentious but I must try to defend my own Department. We are the best judges——

Please do not read anything into what I have said.

—But it is there.

No, it is a question of impersonal procedure. It is no reflection on anybody but it is obvious that in the public accounting system there should be a check and that check is carried out for us through the Comptroller and Auditor General. An essential part of this check is that there is something corresponding to the sanction procedure on every expending Department. There is no reflection at all on the Department concerned but that check must be there and we, if we are to have any function, must look at the position to be satisfied about the expenditure in a routine way. If the Department of Finance are not going to carry out their function in this regard then, where a question like this arises, we will have no alternative but to ask to see the full accounts in this area. I know that is a pretty radical statement but it is not your Department or this one instance that is concerned here. A question has been raised about the whole control of public expenditure.

679. Deputy Bermingham.—Is it true that the Office of Public Works built those schools previously?

—No, I said that previously we did not build secondary schools. The Office of Public Works built primary schools.

680. And they got a global sum and they decided what schools they would build?

—They did.

There is not much change then, is there?

—There is not any change.

Deputy MacSharry.—There is not any change in the case of primary schools.

681. Chairman.—Mr. Whitty has said that sanction should have been sought. I think we should be notified if there is any change in the procedures for seeking sanction. The Department of Finance are on notice now of what we have said here with regard to what their function is and we will make our own comments on this case.

Mr. Whitty.—Would you like a note from us, Mr. Chairman, about it?*

682. Chairman.—I think it would be a help because the inevitable result of this course of action will be the necessity for examining the subhead in detail making full use of the powers of this Committee and obviously that would be an inconvenient and time-consuming operation for all concerned. It would be much better if the normal procedures of sanction were observed and if the Comptroller and Auditor General did not have occasion to make any such observations. That would be the easiest way out for all of us.

—Before we are faced with this terrible thing, can I say that this has been going on from time immemorial at primary level?

I thought you did not do any building?

I am saying that there have been global sums allocated to the Office of Public Works to build primary schools and primary schools have always cost more than was bargained for.

It will only come to us through a query of the Comptroller and Auditor General.

683. Deputy Governey.—Was the same procedure adopted when the Office of Public Works were building new schools?

Mr. Mac Gearailt.—The Office of Public Works never built training colleges.

—But they built primary schools.

684. Deputy MacSharry.—Let us get back to the basic principles of this. Any global sum is made up of itemised items. There is no question of the issue being changed. Somebody else was building the schools before and public money was being spent and had to be sanctioned, not just global sums but detailed items had to be sanctioned. We all know how hard it is to get £5 of public money never mind £5 million or £6 million. What we are concerned about is procedure especially when what were before us and what are before us are contradictions in the procedures. We are entitled to a proper explanation as to what the procedure is and what we are here for at all.

Chairman.—In the case of the Office of Public Works sanctions are quoted in the documents submitted to us and I am sure the Department of Finance have not got to the stage where they sanction the Education projects in the first instance without having a detailed list and a case made for each item.

Deputy Mac Sharry.—I saw an expenditure of £5 sanctioned by the Department of Finance for painting a hut outside a Minister’s office.

Chairman.—In the case of the Office of Public Works everything is sanctioned. In the case of the Department of Education when you submitted your estimate I presume you had to itemise the projects and cost them?


And that the sanction followed an examination of that by the Department of Finance and possibly an adjustment? In these cases, therefore, we think detailed sanction would be necessary. However, I think I have made clear what the question is to the Department of Finance and I think the Department of Finance should assist the Committee by defining the position. As far as we are concerned ultimately it is a question of what will satisfy the Comptroller and Auditor General.

685. Paragraph 41 of the Report of the Comptroller and Auditor General reads:

Subhead A.3.—Special Courses for Teachers

I observed that a grant of £1,500 was paid in March, 1972 to each of three training colleges and one of £5,000 to St. Patrick’s College, Maynooth, in respect of courses for principal teachers to be held in July, 1972 on the new curriculum for primary schools. As these grants did not represent a matured liability in the year under review I asked for the observations of the Accounting Officer. In reply, he stated that difficulties had arisen in providing accommodation for the proposed courses and to avoid disruption of the whole schedule of in-service courses it was necessary to make advance payments to secure the premises and to enable certain urgent improvements to be carried out in one case. As I am still not satisfied that these grants were a proper charge in the year of account, I have deemed it desirable to refer to the matter.”

Mr. Mac Gearailt.—The purpose of the paragraph is to draw the Committee’s attention to a breach of a long established government accounting principle. Liabilities which had not matured in the year were, nevertheless, included in the charge to the account.

686. Chairman.—What do you say to that, Mr. Ó Conchobhair?

—We had to establish these courses and we had to pay reservation fees to each of the three training colleges and also to Maynooth College. The additional amount paid to Maynooth College was by way of an advance payment to enable certain improvement works to be carried out. No funds were available to the college out of which these expenses could be met. May I say that the Committee raised this with me the last time I was here and I have circularised the Department about the inclusion in the subhead of normal appropriate sums and that payment be matured before being charged against the subhead. You raised it on something else last year.

687. You will appreciate that we are still in arrears. What is the present position?

Mr. Mac Gearailt.—We will see that when we come to the current year. I am not suggesting this is the reason but it looked as if the subhead was being cleaned out. On the 28th of March you had £9,000 and you paid it out.

Chairman.—Apart from an impression that is irrelevant, if you do not mind my saying so, the fact is that the transaction was irregular.

Mr. Mac Gearailt.—It was.

Chairman.—It is the irregularity of the transaction that concerns us. As I say, we are still in arrears and we presume we will not be confronted with anything like that again?

—I hope not. I have circularised the Department.

688. Chairman.—Paragraph 42 of the Report of the Comptroller and Auditor General reads:

Subhead C.1.—Salaries, etc., of Teachers in Classification Schools and Grants to Capitation Schools

In the course of audit I observed that failure to up-date computer data in connection with payment of salaries resulted in overpayments to two teachers extending over some months. As the controls and checks prescribed for the calculation and payment of teachers’ salaries, if fully implemented, should have prevented these overpayments I have asked for an explanation.”

Have you anything to add to that?

Mr. Mac Gearailt.—The Accounting Officer has since informed me that the salary overpayments arose through inadvertence and the inexperience of some staff, and he has detailed the steps since taken to prevent a recurrence. I understand also that a fully computerised pay-roll system is in the process of being installed.

689. Chairman.—Paragraph 43 of the Report of the Comptroller and Auditor General reads:

Subhead C.8.—Special Educational Project

Reference was made in paragraph 42 of my report for 1970-71 and in the previous report to a special educational project being carried out by the Department of Education in the Rutland Street schools area of Dublin in association with the Van Leer Foundation of the Netherlands. Total expenditure on the project to 31st March, 1972 amounted to £95,236 including £30,351 in the year under review. Contributions from the Foundation amounted to £43,102 at that date including £8,096 received in the year and credited to Appropriations-in-Aid (subhead E.3).”

Have you anything to add, Mr. Mac Gearailt?

Mr. Mac Gearailt.—The paragraph is for information. The project which commenced in 1969-70 will shortly have come to the end of its initial five year span.

690. Deputy H. Gibbons.—Is that the Rutland Street project?

—Yes. Actually, we did not get the second portion from Van Leer until May because we were looking for additional money.

691. Chairman.—Paragraph 44 of the Report of the Comptroller and Auditor General reads:

Subhead C.9.—Printing of new Curriculum for Primary Schools

A new curriculum for primary schools was introduced from the commencement of the 1971-72 school year and the charge to the subhead represents the printing costs of the two volumes of the curriculum. In this connection provision was made in subhead C.4 for the payment of grants on a per-teacher basis towards the cost of classroom requisites to implement the curriculum.”

Have you anything to add, Mr. Mac Gearailt?

Mr. Mac Gearailt.—This paragraph is for information. Normally the cost of printing for the public services falls as a charge on the Vote for the Stationery Office but specific provision was made in the Vote for Primary Education for the cost of printing the new curriculum.


Mr. S. Ó Conchobhair further examined.

692. Chairman.—Paragraph 45 of the Report of the Comptroller and Auditor General reads:

Subhead A.3—Science and other Equipment Grants

I observed in the course of audit that a grant of £750 was paid to each of three schools and £674 to a fourth school in respect of the furnishing of special subject rooms. The maximum grant permitted by departmental regulations in respect of furniture supplied before 1 August, 1970 is £500 per room. As the items to which the above grants related were supplied before that date, I have asked for an explanation.”

Mr. Mac Gearailt.—The former Accounting Officer informed me that the overpayments were due to a misunderstanding and oversight on the part of the officers concerned and that the amounts overpaid were being recovered.

693. Chairman.—Paragraph 46 of the Report of the Comptroller and Auditor General reads:

Subhead I.1.—Secondary SchoolsAnnual Repayment of Building Loans

Reference was made in paragraph 43 of my report for 1970-71 and in previous reports to a scheme whereby secondary schools which could not meet from their own resources the cost of new buildings or major extensions could be paid annual grants not exceeding 70 per cent of the repayment charges on loans obtained by them towards such cost. Grants totalling £395,812 were made during the year in respect of twenty-six schools. Including £2,529 in the year under review, £5,529 has been paid to a design group for a study of post-primary building costs for the Department of Education. I understand that the study has been completed and the results furnished to the Department.”

Have you anything to add, Mr. Mac Gearailt?

Mr. Mac Gearailt.—I have no further comment to make. This paragraph is for information.

694. Chairman.—Paragraph 47 of the Report of the Comptroller and Auditor General reads:

Subhead I.2—Secondary SchoolsBuilding Grants

I referred in previous reports to a scheme under which the Department of Education makes funds available for the erection or extension of secondary school buildings on the basis of 70 per cent free grants and 30 per cent loans repayable with interest over fifteen years. The charge to the subhead comprises £1,611,984, grants and £363,684, loans. Loan repayments under the scheme amounting to £127,278 were received during the year and appropriated in aid of the vote (subhead L.4). A Statement of Loans will be appended to the Appropriation Account.”

Have you anything to add, Mr. Mac Gearailt?

Mr. Mac Gearailt.—The paragraph gives, for information, the amount issued by the Department in the year in respect of grants and loans for secondary school building. The statement of loans attached to the appropriation account gives the position each year to 31st March, 1972 in regard to loans issued, and amounts repaid. It also gives the amount oustanding at 31st March, 1972.

695. Chairman.—Paragraph 48 of the Report of the Comptroller and Auditor General reads:

Subhead J.1.—Comprehensive SchoolsRunning Costs

Subhead J.2.—Comprehensive SchoolsCapital Costs

Reference was made in previous reports to the building of comprehensive schools at Cootehill, Carraroe, Shannon Airport, Glenties, Raphoe, Ballymun, Limerick and Manorhamilton. All eight schools are now in operation and their running costs, including the salaries of teaching staffs, are charged to subhead J.1. Expenditure to 31st March, 1972 on site and building works of the eight schools amounted to £2,580,541 including £265,290 for professional fees. Expenditure on furniture and equipment totalled £84,687 at that date.

The Department of Education intend to build a further six State Comprehensive Schools and eighteen Community Schools to be financed in part by loan facilities made available to the Exchequer by the International Bank for Reconstruction and Development (see also paragraph 14). A consortium of architects, engineers and quantity surveyors was appointed to act for the Department on the project. A fee of 10 per cent to cover the services normally rendered by the professions involved is payable to the consortium together with a lump sum of £20,000 for the preparation of master plans and cost plans for the schools. Payments of £67,130 to the consortium, including the £20,000 lump sum, are charged to subhead J.2. Also charged to subhead J.2. is a fee of £5,000 paid to a design group for a survey programme in connection with the development of a component system relating to the building and equipping of schools.”

Have you anything to add, Mr. Mac Gearailt?

Mr. Mac Gearailt.—The paragraph gives the position in regard to the provision of comprehensive schools up to the end of 1971-72. The question of the preparation of formal accounts in respect of the running costs of these schools has already been considered by the Committee. This matter has been discussed between my officers and the officers of the Department of Education and will come up for consideration at a later date. The Committee will note also the charge of £5,000 in respect of the cost of a survey into a component system for schools. This charge is not strictly relevant to the subhead.

696. Chairman.—The Comptroller and Auditor General said this is not strictly relevant to the subhead. Would you like to add anything further?

Mr. Mac Gearailt.—The subhead is there for capital costs of comprehensive schools. This is a charge for an inquiry in regard to the general question of component system building.

—We carried out an examination of component systems in England like CLASP Scola Method and Seac. A firm of consultants, Group Design, was appointed to assist in this investigation. We need this if we are to keep track of our building costs. We paid them a fee of £5,000 in 1971-72 and we paid them a further £4,000 in the following year.

697. Chairman.—Where did you take the payment from?

—We took it out of the subhead since we assumed that it related to building. We had sanction for it.

698. Chairman.—Paragraph 49 of the Report of the Comptroller and Auditor General reads:

Widows and Orphans Suspense Account

On the introduction of a contributory scheme to provide pensions for widows and children of secondary teachers, the Department of Finance directed that the amounts collected by way of contributions should be credited to the Secondary Teachers’ Pension Fund. The contributions in 1969-70, 1970-71 and 1971-72 were, however, credited to a suspense account and payments in respect of pensions in those years were charged to that account. In March 1972 the net credit balance of £126,956 on the account was transferred to the Pension Fund. As the use of a suspense account for the receipt of contributions and the payment of pensions over a period of almost three years was in my opinion inappropriate, I have communicated with the Accounting Officer in the matter.”

Have you anything to add, Mr. Mac Gearailt?

Mr. Mac Gearailt.—Normally suspense accounts should only be used for transactions of a temporary nature, for example, payments where the incidence of charge is not yet known, payments which are recoverable from other sources or cash receipts which await identification. This paragraph draws attention to the use of a suspense account over a longer period. The former Accounting Officer informed me that the original intention was to pay these widows and orphans pensions out of the Secondary Teachers’ Pension Fund but it was subsequently realised that there was a doubt as to whether the fund scheme covered such payments. It was then decided, in consultation with the Department of Finance, to use the suspense account pending the passing of the necessary legislation. The Accounting Officer also informed me that legal advice was being sought regarding the possibility of relying on the Teachers’ Superannuation Act, 1928, as an enabling authority to amend the Teachers Pension Scheme to provide for the payment of pensions to widows and children of secondary teachers.

699. Chairman.—What was the outcome of that?

—The money was used subsequently to pay pensions. As the Comptroller and Auditor General has said, we put the money into the Suspense Account because we did not quite know. There were two things. Firstly, we did not know whether we could put it into our own pension scheme, whether the pension scheme allowed it; and, secondly, the Department of Finance were thinking of global legislation to deal with these matters. This has not been done yet but we have learned since that we could have put it into the Secondary Teachers’ Superannuation Fund but, by that time, we had taken out the money and used it anyhow.

700. Paragraph 50 of the Report of the Comptroller and Auditor General reads:

Prefabricated Building Units Suspense Account

Recoverable expenditure of £386,648, including £247,573 in the year under review, was incurred by the Department of Education on the purchase of prefabricated classrooms for use by primary, secondary and vocational schools. The expenditure was charged to a suspense account and recoveries of £55,781 and £47,072 were effected in 1970-71 and 1971-72, respectively, leaving a balance on the account of £283,795 at 31 March 1972. This consisted mainly of sums due from vocational education committees. I have inquired regarding the circumstances in which the arrangements outlined above were made and the procedures in force to ensure prompt recoveries.”

Mr. Mac Gearailt.—This paragraph cites another case where a Suspense Account has been used over a number of years to deal with temporary payments from voted moneys and their recovery. An additional criticism here is that moneys voted for the purposes of secondary education are being used temporarily to provide school accommodation for primary and vocational schools, a purpose for which they were not voted. The Accounting Officer has informed me that this bulk purchase scheme for the provision of mobile prefabricated accommodation was initiated, following the introduction of the free post-primary education scheme, to meet accommodation requirements which, because of urgency and lack of capital, could not be met by the provision of permanent accommodation. The Accounting Officer has stated also that these arrangements were made to enable prompt payments to be made to contractors.

701. Chairman.—Is this regular? Is it regular to spend moneys out of one Vote into another?

—We were establishing a contract, certainly. We would have to put the money into one Vote.

I am not concerned with the reasons and compulsions; I am dealing with procedures. Is this regular?

—I would say it is; that we could not differentiate between vocational and secondary.

702. But the Comptroller and Auditor General does, presumably, on the basis of legislation?

Mr. Mac Gearailt.—Well, so far as a Suspense Account on the Secondary Vote is concerned, that would indicate that you were using Secondary Vote moneys temporarily for primary or vocational schools?

—The primary were incidental only; it was mainly vocational. That was because we were making a single contract. At the time we did not know where the pressure was going to be and we were simply buying prefabs. If the pressure was in a secondary school, we would put the pre-fab there; likewise, if it was in a vocational school, we would put a pre-fab there. Therefore, we would have to put the money into one Vote anyhow. We picked the one where we thought the pressures were most likely to be greatest.

703. Chairman.—Here again, was it necessary to get sanction?

—From the Department of Finance? I am not sure whether or not we did; I presume we did.

Mr. Whitty.—For what?

—For the pre-fabs.

Mr. Whitty.—Certainly not for using Secondary Education Vote moneys to finance vocational schools facilities.

704. Deputy Tunney.—Is there some confusion here between the terms “vocational” and “secondary”? Does this not refer to the time when we had the marriage of these two, where it was all secondary schools?

—This was at the time of introduction of free education. You may remember that there was an enormous jump in the number of pupils who came forward into post-primary.

705. I notice that the Minister at the moment is referring—and, I think, correctly so—to secondary education, including vocational. Was this the beginning of that? If so, certainly I would regard them as being identical. Whether or not the fact that they had been classified under different subheads introduces an accounting problem I do not know.

Mr. Mac Gearailt.—From different Votes.

706. Deputy H. Gibbons.—If they had opened a new subhead just for the buying of pre-fabs, would not there be a lump sum transferable?

—We might build pre-fabs out of the ordinary building Votes. In fact, we have the country dotted with pre-fabs.

Chairman.—What we are primarily concerned with here at the moment is the regularity of accounting procedures. We are not querying for a moment the policy reasons or justifications which, I am sure, are admirable. What we are concerned about are the accounting procedures and this is a matter strictly for this Committee. We must pursue that. However, we have noted this now and I shall go through this Vote, No. 29 for Secondary Education.

707. Deputy H. Gibbons.—I notice that subhead A.4. says—Grant for Irish and Bilingual Schools?


Are not all schools which are not Irish schools bilingual schools? All schools which are not completely Irish schools would be bilingual, to the extent that they teach both English and Irish?

—We make the difference: we would expect that every language be taught in its own medium. But an Irish school is a school where the ordinary work, which is not language work, is done through Irish. Bilingual schools are those where some teaching is done through Irish, of subjects such as history, geography, mathematics, and where they do some through English. That is the difference we make there.


Mr. S. Ó Conchobhair further examined.

708. Chairman.—Paragraph 51 of the Report of the Comptroller and Auditor General reads:

Subhead I.1.—Regional Technical CollegesRunning Costs

Subhead I.2.—Regional Technical Colleges and Colleges of Domestic ScienceCapital Costs

Reference was made in paragraph 46 of my report for 1970-71 and in previous reports to the building of regional technical colleges at eight centres. Seven colleges are now in operation and work has commenced on the building of the college at Cork, the cost of which is being financed in part by loan facilities made available to the Exchequer by the International Bank for Reconstruction and Development (see paragraph 14). The capital expenditure on these colleges (subhead I.2.) to 31st March, 1972 was as follows:—


Prior to 1971-72







Payments to contractors




Professional fees




Other expenses








The charge to subhead I.2. also includes £5,552 for professional fees in respect of major renovation and extension work to be carried out at St. Angela’s College of Domestic Science at Sligo. The balance of the charge to the subhead, £171,800, is in respect of the provision of equipment for the colleges. A total of £552,000 is charged to subhead I.1. in respect of the running costs of the regional colleges at Athlone, Carlow, Dundalk, Letterkenny, Sligo and Waterford which were in operation in 1971-72.”

Mr. Mac Gearailt.—This paragraph is for information. It gives details of the capital expenditure on regional technical colleges up to March, 1972. The accounts of these colleges are audited by local government auditors who also audit the accounts of the vocational education committees.

709. Deputy Tunney.—On subhead C.— Scholarships—what type of scholarships were they?

—We give four scholarships to pupils who held a Gaeltacht scholarship in secondary schools and we give allowances which we call scholarships to necessitous students on the course. Up to 15 such allowances may be granted each year. We also give grants of up to £175 to students who satisfy the academic and means requirement applicable to the higher education grant. In other words, if a student qualifies for entry into the university or for a grant from us——

That is all right; I am satisfied with the reply.

710. Deputy H. Gibbons.—Did the Accounting Officer say 15 necessitous students?

—Up to 15 such allowances could be granted.

711. I should like to raise a question which has been referred to in local newspapers. I notice that under “Secondary Education” the grants are paid for choirs and orchestras but there is no subhead for this under “Vocational Education”. I have a vague recollection that a vocational committee looked for permission to employ somebody to train a band but this was not allowed. Is that the position?

—The explanation to that is simple. We do not fund secondary schools entirely but we do fund vocational committees. We pay specific grants to secondary schools, we pay capitation grants, science grants and grants for choirs and orchestras. Within the global sum that a vocational committee may ask for they can include that if they wish, but the committee referred to by the Deputy may not have done that with the result that they did not have any money for it.


Mr. S. Ó Conchobhair further examined.

712. Chairman.—Paragraph 52 of the Report of the Comptroller and Auditor General reads:

Subhead A.—Reformatory Schools

Subhead B.—Industrial Schools

It was noted that the charge to subhead A. includes a grant of £10,000 towards the cost of reconstruction and renovation of an industrial school and that the charge to subhead B. includes grants of £9,000, £5,000 and £25,000 made to three other industrial schools towards similar costs. Since subheads A. and B. made provision for capitation grants only and subhead F. of the vote provided specifically for building and equipment grants for such schools I asked the Accounting Officer for information regarding the charging of these capital grants to subheads A. and B. He has informed me that the capitation grants payable to reformatory and industrial schools are intended to make a provision towards the cost of the repair, improvement and adaptation of buildings as well as towards the general costs of maintenance of the children and the salaries of the staff. It was considered that the most appropriate arrangement would be to fix the rate of capitation grant at an amount which would meet the needs of the generality of cases and to pay additional amounts from subheads A. or B. in cases involving exceptional expenditure. He has stated also that the provision in subhead F. is essentially for the purposes of expenditure incurred on work on new buildings, or group homes or on the purchase or major adaptation of houses for similar purposes and that the grants queried come under the category to be met from subhead A. or subhead B. As I consider that the grants made should have been charged to subhead F, which makes specific provision for capital grants, and that the use of money voted for reformatory schools to meet expenditure on an industrial school was irregular, I deemed it desirable to draw attention to the matter.”

Mr. Mac Gearailt.—This paragraph draws attention to the issue from the capitation subheads for reformatory and industrial schools of grants towards the costs of reconstruction and restoration of industrial schools. We consider that these grants should have been issued from subhead F.—Building and Equipment grants—on which there was a saving of £155,000 out of a provision of £250,000 in the year.

713. Chairman.—Again this is a question of accounting procedures.

—I do not think so and, with due respect, I think the Comptroller and Auditor General is wrong here. The grants are capitation grants. Capitation grants are not just grants for students; they are grants intended to cover the cost of keeping the students whether you keep them by feeding them or by painting the place for them. Subhead F.—Building and Equipment Grants —applies particularly to the provision under the Kennedy Report. The Kennedy Report was out and the reason for all the fuss on this is that when the Kennedy Report came out these schools proceeded to spend money because of the comments made about their state. They took the money out of their capitation grants, which is what they were doing in the normal way anyhow. They would paint out of that capitation grant. Subhead F. relates to new special schools and new group homes as recommended in the Kennedy Report and we thought this was clear. We thought we were quite within our rights and that there was no question of there being a difference between capital and current grants. We were paying capitation grants to secondary schools who paint their schools. That was the thinking at the time.

Mr. Mac Gearailt.—Normally we would expect that the capitation grant would be paid per pupil and that would be the end of it. On the Accounting Officer’s thinking there will not be a lot left for the maintenance of the children if the money allocated is to cover painting and reconstruction also.

714. Chairman.—What does a capitation grant cover?

—Could I put it to you in a rather different way? These Orders were keeping these children and for keeping, housing and feeding them we paid them capitation grants.

715. On what basis? For housing, feeding and keeping them is there a grant paid on numbers?

—On numbers.

716. On the basis that you pay per capita is it not more or less implied that there is so much for the benefit of each individual rather than the institution as a whole? If you take buildings, et cetera, off that there is mighty little contribution to the individual left.

—I would regard renovation as part of what would go in capitation grants because it is important to the child that he has decent surroundings and that he is reasonably well fed.


Mr. Mac Gearailt.—Let us take the case of the reformatory schools in which, according to the Estimate, there were some 160 pupils in 1971-72. Presumably the school which received the £10,000 for reconstruction also received capitation grant at £4.50 per week per pupil for its complement of pupils. In other words, the £10,000 was tantamount to paying for more pupils than were in the school.

—It was tantamount to paying more per student.

Mr. Mac Gearailt.—In other words you have increased the rate over the £4.50?

—In that particular case.

Chairman.—There again we are back to accounting procedures.

717. Deputy Tunney.—In any particular Vote is there a subhead out of which moneys are paid towards maintenance or painting and also a subhead referring to capitation?

—Not in this Vote.

In other votes could you have it?

—In the Primary Education Vote we have maintenance and painting but we do not pay capitation grants there. We have simply capitation grants for the old type secondary schools.

Chairman.—It is perfectly clear what has happened here and the discussion will not add anything to it. I understand Mr. Ó Conchobhair’s point and the point made by the Comptroller and Auditor General.

718. Deputy H. Gibbons.—What other source of income have those schools?

Mr. Whitty.—They get a capitation grant from the local authority and a similar amount from the State.

719. Chairman.—Paragraph 53 of the Report of the Comptroller and Auditor General reads:

Subhead B.—Industrial Schools

I observed in the course of audit that a grant of £15,000 was paid out of this subhead towards the cost of running a course in Child Care in Kilkenny. As the provision in the subhead was specifically for capitation grants payable to industrial schools I asked the Accounting Officer whether consideration had been given to the opening of a new subhead to provide for this special grant. The Accounting Officer has replied that, as the course was designed for persons involved in the field of Child Care in industrial and reformatory schools, and, as the expenses arising out of such special training in the case of an individual trainee would, in the ordinary way, have to be met by the school authority out of capitation grants it was considered legitimate that the grant towards the expenses of the course should be met in the year under review out of subhead B. He added that a new subhead had been opened from 1972-73 to provide for such courses.

It was also observed that of the £10,000 issued to the organisers of the course up to 29 February, 1972 some £8,200 remained unspent at that date and I asked for information as to the circumstances in which a further £5,000 was issued in March, 1972 and as to the evidence on which the £15,000 was charged in full as having been spent in the service of the year. In reply the Accounting Officer stated that in March, 1972 the conductors had considerable commitments in respect of the course, that a full statement of accounts would be provided by them and that, in deciding the grant to be made in respect of the 1972-73 course, the Department would have regard to the unspent balance of the 1971-72 grant. I am, however, not satisfied that the whole grant can be regarded as properly chargeable in the year under review, and I understand that the statement of accounts promised is not yet available.”

Mr. Mac Gearailt.—There are two aspects of this grant which we criticise. In the first instance we consider that a grant towards the cost of running a course in Child Care does not fall within the ambit of a capitation grant subhead. A special subhead should have been opened with Finance sanction to take the charge. This has been done in 1972-73. Secondly the full grant (£15,000) was issued and charged in the year under review although there was no evidence to show that the total sum had been expended by the course organisers by the 31st March, 1972. Any sum not expended at that date should have been surrendered to the Exchequer. In fact, the Department of Education has treated the moneys issued here as if they were grant-in-aid payments, which is something which may not be done without the sanction of Dáil Éireann. No vouchers have been seen in respect of this expenditure of these moneys. I understand the Department got a statement subsequently of the expenditure.

—Yes, you were not satisfied with the precise kind of statement we got so we have gone back for more details.

Mr. Mac Gearailt.—I also understand that they appointed commercial auditors.


720. Chairman.—Paragraph 54 of the Report of the Comptroller and Auditor General reads:

Subhead C.2.—St. Lawrence’s, Finglas

St. Lawrence’s, Finglas, a Preventive Centre for boys, which was opened during the year, is administered on behalf of the Minister for Education by the De La Salle Brothers. The cost of providing the building for the Centre falls on Vote 8— Public Works and Buildings, and the payments to 31 March, 1972 amounted to £374,801.”

Mr. MacGearailt.—This paragraph is for information. It points out that the cost of providing the buildings for the Centre— £374,801 at 31st March, 1972—falls on Vote 8—Public Works and Buildings. The cost of administering the Centre, including maintenance, staff wages and incidental expenses, is charged to subhead C.2, of Vote 31—Reformatory and Industrial Schools.

721. Chairman.—Paragraph 55 of the Report of the Comptroller and Auditor General reads:

Subhead F.—Building and Equipment Grants

Work was commenced during the year under review on the building of a Remand Home and Assessment Centre adjoining the Preventive Centre mentioned in the previous paragraph. The charge to the subhead in respect of this project was £22,843 consisting of £13,600, professional fees, £8,884, contract payments and £359, other expenses.

A site was purchased and a contract placed during the year for the erection of a Training School for boys at Oberstown, County Dublin, to replace the reformatory school at Daingean, County Offaly. The charge to the subhead for this school is £71,626 comprising £40,950, site cost, £4,350, contract payments, £24,825, professional fees and £1,501, other expenses.”

Mr. Mac Gearailt.—This paragraph apportions the charge to the subhead— £94,469—between the two building projects, namely, the Remand Home and Assessment Centre at Finglas and the Training School for boys at Oberstown.

722. Deputy Tunney.—On subhead D— Conveyance Expenses—there is a note to say that the cost of conveyance of children was less than anticipated. Was that because the number of children conveyed was fewer?



Mr. S. Ó Conchobhair further examined.

723. Chairman.—Paragraph 56 of the Report of the Comptroller and Auditor General reads:

Subhead G.1.—Limerick Institute of Higher EducationCurrent Expenditure (Grant-in-Aid)

Subhead G.2.—Limerick Institute of Higher EducationBuilding, etc., Costs and Special Development Costs (Grant-in-Aid)

I referred in paragraph 48 of my report for 1970-71 to the appointment of a Director for the proposed Institute of Higher Education at Limerick. In the year under review the sum of £33,937 charged to subhead G.I. was issued in monthly instalments to meet the Director’s salary and administrative costs including the expenses of a Planning Board appointed by the Minister to advise regarding the steps to be taken for the establishment of the Institute.

Reference was also made in previous reports to the purchase of a site for the proposed Institute. Renovation work has been undertaken on an existing building on the site to serve as an administration centre and to meet the classroom needs of the first students at the Institute from the commencement of the 1972-73 academic year.

The charge to subhead G.2. comprised:—



Payments on renovation







Professional fees




Furniture and equipment



Site development




Professional fees on planning


of the Institute










Mr. Mac Gearailt.—This paragraph is given for information. The Accounting Officer has informed me that the question of the establishment of the Institute on a statutory basis awaits determination by the Government on the provision to be made for the future development of higher education generally. I understand that a local firm of auditors has been appointed to audit the Institute’s accounts but the Accounting Officer has assured me that the books and accounts will be made available to me for examination.

724. Deputy H. Gibbons.—Who makes the decision to have an outside auditor audit the accounts?

—The NIHE. While we fund the Institute they act independently. We do not interfere with what they do. They got their own auditors and this is something that we would encourage because eventually we will have to cut them loose from us.

Mr. Mac Gearailt.—They are on a par, to a certain extent, with the universities. Their money comes from the same Vote. In the case of the National University of Ireland and its three constituent colleges we are the statutory auditors. In the case of Trinity and Maynooth we have no audit function. In the case of the Dublin Institute of Advanced Studies we are the auditors. As I have stated, the Limerick Institute has appointed commercial auditors and we wrote about this to the Department of Education and we also asked for the observations of the Department of Finance.

725. Deputy H. Gibbons.—I do not feel strongly about it. The only thing that strikes me is that you are giving away powers that you have.

Mr. Mac Gearailt.—Arising out of the Committee’s recommendations on grants-in-aid I understand that arrangements have been made for the current year and that my office will have access to the books and records of all grant-in-aid funded bodies with, I think, one exception. I understand that in all the other cases even though they might have their own audit arrangements, I would have access to their books and accounts.

726. Chairman.—Paragraph 57 of the Report of the Comptroller and Auditor General reads:

Subhead L.—College of Physical Education (Grant-in-Aid)

I referred in paragraph 50 of my report for 1970-71 to the purchase of a site for a proposed National College of Physical Education at Limerick. The charge to the subhead includes £40,537 for professional fees, £1,447 expenses and £1,219 for contract work in connection with the planning and building of the college.”

Mr. Mac Gearailt.—This paragraph is for information and gives details of the expenditure from this subhead on the planning and building of the College of Physical Education in 1971-72.

727. Chairman.—Paragraph 58 of the Report of the Comptroller and Auditor General reads:

“The balance of £92,632 charged to the subhead, comprising £78,000 in respect of siteworks, £13,983 for professional fees and £649 for other expenses, relates to development work at the adjacent site of the Limerick Institute of Higher Education. As provision for this work is made under subhead G.2. I have asked for an explanation.”

Mr. Mac Gearailt.—In regard to the charge of site development costs to this subhead the former Accounting Officer in reply to our query, stated that the National Institute of Higher Education and the National College of Physical Education are being developed on the one site, that there will be extensive sharing of facilities and that there was no way by which a precise apportionment of site work’s costs could be made between the two institutions. In the event these costs were met to the limit of the funds available to either institution. Two separate sites were purchased for these institutions and two separate fees were paid to the auctioneers. Nevertheless we understand that the sites are adjacent and we agree that their joint development together with the provision of common services and facilities should make for savings. However the absence of an apportionment of expenditure on site development and common services and facilities makes the monitoring of the expenditure on the separate institutions impossible. We are back again to the question of the overall figure. The Department of Finance sanctioned the erection of a College of Physical Education, the cost not to exceed a certain figure.

—Is it not a fact that what you are talking about is expenditure on the National College of Physical Education which is on what you call the site of the NIHE.

Mr. Mac Gearailt.—On an adjacent site. —What happened was that we got our sanctions in two bites. The Department of Finance sanctioned the National Institute of Higher Education. Our original plan for Limerick was as it is now. We bought enough land to enable us to go ahead. Then we got the sanction for the second part and we bought additional land. I would not say a separate site because the two Institutes are jammed up against each other on the original NIHE site but the costs of building are separate because they are under a different architect and a different contractor. I admit that they are on what you call the NIHE site.

Mr. Mac Gearailt.—I think we should have some apportionment of these if possible. I think your predecessor said that we could not have a precise apportionment. There is about £97,000 charged on the physical education site which I think should have been on the other site.

—I have been down on the site. A lot of this money was spent on the actual physical education building. They have an enormous gymnasium and sports hall and they are on what you call the site of the NIHE. You could not charge the NIHE costs that did not relate to them

Mr. Mac Gearailt.—What I am saying is your Department hold the view that there is no way by which a precise apportionment of the site work costs can be made. My understanding was there were two separate costs. I admit they are adjacent.

—There was additional land. I am not prepared to say there were two separate sites. It was simply that the site was expanded in order to provide for the second college. There is quite a difference, I am afraid. I was in on this at the beginning and we never intended that there would be separate sites. We have a situation here where we have a higher executive officer down there as bursar. She acts for both institutes. I do not know how you would split up the money.

Mr. Mac Gearailt.—I would not regard her money as site work costs.

—How do you split the site works? If you are doing site works and you are building a college you tear up the site. Site works tear up a site. How do you apportion it?

Mr. Mac Gearailt.—In a way you are making my case. If there was only one site there should be only one subhead involved.

—We have kept the colleges separate because we are not prepared yet to join them into one single grouping, one single governing body.

Mr. MacGearailt.—When you say two colleges you are talking of the actual buildings?

—Yes. We have two Institutes.

728. Chairman.—Paragraph 59 of the Report of the Comptroller and Auditor General reads:

Subhead M.—Capital Equipment Costs for Third Level Institutions (Grant-in-Aid)

The charge to the subhead consists of the following amounts issued for the purchase of equipment:—



University College, Cork



Limerick Institute of


Higher Education





Mr. Mac Gearailt.—This paragraph is given for information and shows the opportionment of the grant-in-aid between the two recipient Third-level Institutions.

729. Chairman.—There appear to be no questions on the subheads of the Vote. We realise that you have taken over now and that you were not the Accounting Officer during the period we have been questioning. I would like it to be understood that the questions the Committee were asking here are towards procedure and not any question of the exercise of your own administration.

—I understand that.

They are particularly financial and accounting procedures and the observance of what I might call accounting rules. We will be back to you, I am sure, on the current Estimate and then you will be responsible.

—Yes, the next time.

Thank you very much for your help.

The witness withdrew.

The Committee adjourned.

*See Appendix 16.

*See Appendix 17.