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MIONTUAIRISC NA FINNEACHTA(Minutes of Evidence)Déardaoin, 11 Nollaig, 1975.Thursday, 11th December, 1975.The Committee met at 11 a.m.
DEPUTY de VALERA in the Chair. Mr. S. Mac Gearailt (An tArd-Reachtaire Cuntas agus Ciste) called and examined.VOTE 42—POSTS AND TELEGRAPHS.Mr. P. Ó Colmáin called and examined.200. Chairman.—Paragraph 53 of the Report of the Comptroller and Auditor General reads: “Stores A test examination of the store accounts was carried out with satisfactory results. In addition to the engineering stores shown in Appendix II as valued at £4,580,598 at 31 March 1974 engineering stores to the value of £16,333 were held on behalf of other government departments. Stores other than engineering stores were valued at £953,012 including £405,216 in respect of stores held for other government departments. Including works in progress at 31 March 1974 the expenditure on manufacturing jobs in the factory during the year amounted to £71,625, expenditure on repair work (other than repairs to mechanical transport) to £235,749 and expenditure on mechanical transport repairs to £28,705.” Mr. Mac Gearailt.—This paragraph reports to Dáil Éireann that the Store accounts kept by the Department of Posts and Telegraphs were duly audited by my Office in 1973-74 as required by statute. The paragraph also gives the value of engineering and other stores on hands at 31st March, 1974, including stores held on behalf of other Government Departments. 201. Chairman.—If you refer to your accounts, would I be right in reading these figures as meaning that you have approximately 10 per cent reserve of stores? —The stock of stores would be approximately equivalent to a year’s use or somewhat less. A year’s use? —Yes. That is probably wise in certain circumstances? —With uncertain delivery dates it is necessary to keep a reasonable amount of stock in hand for contingencies so that our workforce will not be left short of material to do the work. 202. Is this the standard that has been maintained in the past? —No, it depends on circumstances. At a time when delivery dates are good and not lengthening we can do with smaller stock. But in difficult times it is not so easy to get certain very expensive stores. In those circumstances we may have to order in larger quantities because we may find that as between one competition for supplies and the next the delivery terms may move from six months to 18 months. We have to take reasonable precautions to provide for that. 203. Do you have to consider inflation? —We have, but where it is possible to buy frequently to advantage in the case of expensive stores, as in the case of certain cables, one can have a situation where deliveries become practicable within three or four months. In those cases we purchase frequently so as to reduce the amount of expensive stores held. On the other hand, for instance with regard to poles, it is necessary to order a long time in advance while the trees are growing, get them from the forests, bark them, creosote them and so on. 204. I am talking for the year under review now. Naturally your stocks then would tend to be a little higher than they used to be? We are not criticising this— it may be very prudent. —We do not arrive at a global decision in regard to the stocks because we consider each group of stores separately. In some cases it might be higher, in some cases lower. I cannot say with certainty whether at that particular time we were high, but I do not think so. We were lower than we would have liked to be for financial reasons. For financial reasons? —We cannot always get unlimited money to provide on a generous scale. We were not limited to a point where it was affecting our performance. Nevertheless, as you know, money is not plentiful. 205. The Comptroller and Auditor General finds that his checks have been satisfactory, and that is satisfactory for the Committee. You have a large amount of storage to account for and no doubt that is distributed over a number of points? —That is so. That is a creditable result. Any question from any member of the Committee? 206. Deputy Moore.—Is there one purchasing officer or are there a number of them? —The Controller of Stores is the purchasing officer for the whole Department but small purchases can be made locally by district engineers and, in some cases, by postmasters. Chairman.—You have a procedure for checking that? —Yes. 207. Deputy MacSharry.—Do they find much stuff disappearing from their stores? —No, scarcely any at all. Any losses that do occur would have to be shown in the report. 208. Chairman.—Paragraph 54 of the Report of the Comptroller and Auditor General reads: “Revenue A test examination of the accounts of postal, telegraph and telephone services was carried out with satisfactory results. The net yield of Revenue for the years 1973-74 and 1972-73 is shown in the following statement:—
£46,300,000 was paid into the Exchequer during the year leaving a balance of £1,931,000 at 31 March 1974. Sums amounting to £57,479, due for telephone services and £4,621 for telegraph (telex) services provided in previous years, were written off during the year as irrecoverable.” Mr. Mac Gearailt.—This paragraph reports to Dáil Éireann that accounts of the revenue from Post Office services have been examined with satisfactory results. This paragraph also gives the net yield of revenue from each of the three services in the year under review together with comparative figures for 1972-73. 209. Chairman.—You have in this connection furnished the Committee—and presented to the Oireachtas pursuant to the Acts mentioned in the first page—with a statement of accounts.* The introductory note says: The Commercial Accounts present the position of the Department of Posts and Telegraphs as a trading concern. They consist of Income and Expenditure Accounts and a balance sheet, compiled in accordance with commercial practice. They are used to determine financial policy, including the fixing of charges to the public. The Oireachtas controls, both in total and in some detail, the money spent by Government Departments. The Department obtains authority from the Oireachtas for its expenditure other than on capital works financed by borrowings from the Exchequer under the Telephone (Capital) Acts, 1924-1973 by way of an annual Estimate and accounts for it in an Appropriation Account. Cash revenue is paid into the Exchequer and is accounted for in the Finance Accounts. My first comment is that it is refreshing to find a document presented in this inexpensive and practical way. For instance, when one sees the expense that is involved in producing documents which come from the semi-State bodies—I do not know what the cost of that RTE document is, but I have reason to believe that it is fairly expensive—I would draw the attention of the Committee to the fact that you have not indulged in such extravagance. —In fairness I must say this is only a temporary document. Later the accounts will be published in printed form. That is an ordinary official publication in ordinary form. I make that comment as an introduction. The point is these accounts are presented as the trading accounts and I quote: “compiled in accordance with commercial practice”. How far are they completely in accordance with commercial practice or are they only an annotation to the Estimates? —No. Every year the Appropriation Accounts have to be prepared for ordinary accounting purposes. The commercial accounts are prepared on the basis of the information contained in the Appropriation Accounts and on other records. They are not as completely satisfactory as accounts which were prepared originally from an accounting system designed to produce this information. They have to be made up after the event. We have had some expert advisers in in recent years. The Comptroller and Auditor General has referred to their work in his comment at the back of this document—the last page of it, I think. The Comptroller and Auditor General has been anxious in the past that we should review the procedure for the compilation of commercial accounts and we agreed that it would be a worthwhile job. We have had experts in. The final report of the consultants was received in August last and we are seeing what they have to say on various subjects, including the basic preparation of commercial accounts. 210. I should like to ask a few questions. On page 4 you give a summary of results of what I presume I might call the outcome of the trading in regard to (1) general account (2) postal account (3) telegraph account (4) telephone account and (5) agency account. Taking these in turn, you show a deficit of £6,548,000 for the year under review as against £3,556,000 for the previous year. That is the general account. The postal account shows a deficit of £1,192,000 as against £774,000 the year before that. The telegraph account shows a deficit of £768,000 as against £276,000 the previous year. The telephone account shows a deficit of £4,588,000 as against £2,506,000 a year before. The agency account balances in both years. Unless I have made up my sum wrong, these deficits add up to approximately £13 million. Is that correct? —The General Account is a summary of the other three accounts. The total deficit is £6,548,000 made up of the deficits on the postal, telegraph and telephone accounts, £1,192,000, £768,000 and £4,588,000. This is misleading when it is looked at first. —I am sorry. It clearly must be if you have found it so. I am merely making that suggestion. —It had not occurred to us. Your deficit is £6 million, not £13 million? —Yes, in that year. That is approaching double the deficit of the previous year? —Yes. Deputy MacSharry.—Would you like to tell us what it is for this year? 211. Chairman.—The General Account gives the complete figures on that. Turning to the balance sheet, the others are the details of the accounts—I suppose they are as formidable as any other commercial accounts in modern accounting conditions— where do you include that deficit of £6 million? —The balance sheet at 31st March, 1974 shows our assets and liabilities at that date. In arriving at those figures, the deficit is— Incorporated? —Yes. Where would it be absorbed in this? —It is lost in the total. That deficit and previous ones—— That is the word—lost. —They are submerged. 212. That is a sufficient answer for the point I was making. The purpose of my question was to see how much was shown or was not. In view of the fact that you tell us that you are re-examining these and the presentation of these accounts, I do not propose to press this any further. Would you agree that it is desirable to do one of two things, either account completely as a Department of State or else furnish complete commercial accounts in commercial form for your trading? —Not only that, but we have to do both and shall continue to do so. Have you difficulty in doing this? —We expect difficulties but they are there to be solved in preparing commercial accounts on completely up-to-date standards. We are not lost in admiration of many of the commercial accounts we see elsewhere. I would agree with you. It is particularly difficult at present when even the accountants are not too sure as to how to present their accounts. —Their treatment of some items seems to us to be quite heretical as compared with the orthodox practice in the Post Office and civil service. That is a very relevant point, and it is one reason why the Committee would be slow to depart from the fundamental basis. I do not think there is any disagreement on that point. 213. Deputy MacSharry.—Buildings are shown as fixed assets? —Yes. 214. Chairman.—There is a liability to the Exchequer for revenue not yet paid over of £12 million. Where is that £12 million? Is it owed to you or is it in a suspense account? —It is money which has accrued due to the Department from subscribers. But you have not yet collected it? —No, the accounts are, of course, on an expenditure and revenue basis, not on a cash basis. We will leave it to our successors to talk to you about further developments. 215. Deputy Moore.—Has the site at the corner of College Green/Church Lane, formerly post office property, been sold or what has been done with it? —We sold that years ago. To a private developer? Chairman.—But not in this year’s account? —No. It would have been a written-off asset many years ago. 216. Would you agree that for future Committees there will be two aspects to be considered when your accounts arise, one, your accounts as a Department of the public service and the other your trading account in view of the situation that, notionally anyway, you have been put in the position of being a trading organisation which is expected to make a profit. —By all means. This is a power this Committee always had and we are happy to co-operate with them. We want to co-operate with you, because the record of the control in this Department is good. —Thank you. 217. Chairman.—Paragraph 55 of the Report of the Comptroller and Auditor General reads: “Post Office Savings Bank Section 13 of the Post Office Savings Bank Act, 1861, as amended, provides that the accounts of the bank shall be presented annually to me for audit. The accounts for the year ended 31 December 1973 have not yet been submitted. I understand that the delay is due to difficulties in connection with the change in 1973 from a mechanised system of accounting to a computerised system.” Mr. Mac Gearailt.—The accounts of the Post Office Savings Bank for the year ended 31st December 1973 were received in February 1975 and have since been audited with satisfactory results. Chairman.—Is this for information? Mr. Mac Gearailt.—Yes. At the time of my report there were difficulties in producing the account. I have got the accounts since this report was written. We have audited the accounts and we are quite happy. 218. Chairman.—You were mechanising, like everybody else? —Alas, yes. Have you got over your teething troubles? —We have. From what the Comptroller and Auditor General tells us—— —We got over the teething troubles in respect of the transfer of the Post Office Savings Bank, but we are also transferring a lot of other things which are behaving like difficult children. You have my sympathy. Modern automatic accounting has its drawbacks. —It has indeed. 219. With regard to Post Office Savings Banks, are your deposits keeping up? —They are doing quite well this year, better than last year. 220. On subhead B—Travelling and Incidental Expenses—there is a note: more travelling by engineering staff and higher subsistence rates. We can understand the higher subsistence rates. Could you elaborate on the “more travelling by engineering staff”? Was there anything extraordinary in the year? —There was nothing very extraordinary. The organisation is growing all the time. We are installing a great number of extra telephones, the maintenance of which involves travelling by our engineering staff. 221. On subhead D—Conveyance of Mails —there was a supplementary estimate of something over 10 per cent. Again there seems to have been close budgeting. Deputy MacSharry.—Does that include cash and registered post being transported in bags? —Anything that happens to be going through the mail and carried by contractors, CIE or others. Do you carry your own insurance on that? —We do not insure at all. Do CIE? —I could not speak about what CIE do. 222. Are your losses substantial? —Our losses have not been very great in the carriage of mail. I think that perhaps the Deputy may be under a misapprehension. For instance, in the case of losses of bank parcels, that is not the post office’s concern. The bank is insured against losses. Do bank parcels travel in your mail bags? —Yes. But they are not your responsibility? —It is not our responsibility to guard them against armed robbery but of course, we have to take care of them. 223. But they have no come-back, say, after the Sligo robbery? —No, they normally pay a registration fee but that is merely to ensure treatment in a special way. It certainly does not cover them against the loss of £10,000 or £12,000. 224. Chairman.—What is your maximum liability for registration? —The maximum liability is £400 if they are registered. That is the maximum you will accept as the post office? —Yes. Everything else is transmitted at risk? —Yes. 225. Do you have many claims for lost registered letters? —If I may refer you to page 141 of the Appropriation Account. The total loss was £24,174 and the total damage was £1,657. The amounts were relatively very small. Compared with the total, granted. 226. Deputy H. Gibbons.—The problem of delay in the conveying of mail seems to be increasing. —I am sorry that the Deputy should have that experience. It is not in accord with our general view arrived at after frequent checks. Undoubtedly there are delays from time to time. The general level, we feel, is holding up pretty well. Deputy MacSharry.—In the bigger centres that is true but it is a different situation in the provinces. Deputy H. Gibbons.—It applies to smaller centres too. The misdirection of mail on the one hand coming back a day or two later, and from the country to Dublin— even to this House—there are delays. —Delays do occur, but the general level. according to our best judgment, is not worse than it has been. If there are any particular cases that any Deputy or any member of the public wishes to have inquired into we would be very happy to enquire. 227. Chairman.—You, like everybody else. must pay for the modern world we live in. Might I ask a question? There are sometimes considerable uncertainties about mail from abroad. Are these delays or misdirections to be attributed to transit before they arrive with you or afterwards? Have you any such difficulties? —I do not think we would like to blame the foreign senders without making a survey. We do not really go into the procedure in relation to mail coming to us in any depth. We take mail once it arrives with us and do our best to deliver it. Unless there was evidence of some general failure in a particular area we would not take action. If there was would you stamp your own time of arrival on it? —We would get in touch with the administration concerned. I cannot recall any case of that off-hand but we would do that. 228. On subhead H—International Conferences and Conventions—could you enlarge on conventions? What type of conferences are involved here? They are apparently regular since you say “increased subscriptions”? —The main conferences are those of the international bodies of which we are a member. The Universal Postal Union which is the world body dealing with posts, the International Telecommunications Union is the world body dealing with telecommunications—incidentally both of those organisations are over 100 years old—and the Conference of European Posts and Telecommunications Organisation (CEPT) which was established about 15 years ago, of which the western European countries are members. All these are organisations concerned with the development and improvement of the postal and telecommunications systems. We are members of these bodies and attend their plenary meetings and also, where appropriate, we send men along to their study groups. The costs arise that way. The bodies concerned, the Universal Postal Union and the International Telecommunications Union, have fairly substantial headquarters to which all member countries have to contribute. That is where the subscription increase has arisen because, of course, the costs of these bodies have risen quite substantially, like all other costs in recent years. 229. On subhead I—Losses—in view of your first answer to Deputy MacSharry, you have a liability for £3,450 there for two robberies. Would that be for mails or for other damage? —It is stocks and cash belonging to ourselves. The same would go for all these? —For all these. 230. With regard to the fraudulent withdrawals from the Savings Bank Account by three members of the public who were prosecuted, were the prosecutions successful in the sense of convictions? —In the words of the note I have here, the offenders “were apprehended, prosecuted and sentenced to terms of imprisonment”. That is as it should be. It is not always easy to press your case home. —It is the police, of course, who deserve the credit, in association with our Investigation Branch. 231. The police cannot make anything more of their case than the base of it. The note states that cash accounts and accompanying vouchers were lost in transit between a head Post Office and the Accountant’s Branch on four occasions. The documents were reconstructed as far as possible but in the absence of certain paid British vouchers, claims could not be substantiated against the British administration. It is not a very large sum, but what happened? —The cash accounts—we mentioned four instances there—at those particular periods did not arrive at headquarters, and as soon as it was found that they were missing we set about reconstructing them. The postmaster submitted a duplicate account but, of course, he had not his vouchers. They were gone. We reconstructed as far as we could, in the case of one lot we got down to nil and in the other three cases there was £492.09, £83.39 and £409.85, all in respect of British vouchers and in the absence of the vouchers we could not recover from the British administration. It happens from time to time that something is lost in transit despite the excellence of the postal services, and when it does happen it almost always is possible to clear it up. On these occasions it did not prove possible. 232. With regard to the note—fraudulent negotiation by a member of the public of five British unembossed giro cheques at various post offices—is not that a problem for you? The amount is commendably small. —The five giro cheques? I think it has ceased to be a problem. 233. The loss, then, is a very small loss when everything is considered. There is another note—negotiation through a British bank of two duplicate money orders notwithstanding negotiation of the original orders—I am just curious to know how the duplicate orders arose. —What happened was that the two sets of money orders, each uncrossed, were bought at two different sub-offices in Dublin in September, 1970, during the bank strike. They were payable to Barclays Bank in London for lodgment to the purchaser’s account and in some way or other, we do not know how, both the advices and the orders went to Barclays Bank. The advice should not, of course, have gone to Barclays Bank. The bank appears to have credited the amounts shown on the advices and on the orders to the purchaser’s account and to have claimed these amounts against the British Post Office, who would claim from us. They disallowed the claim in respect of the advices, naturally enough, and the purchaser then promptly demanded duplicate money orders here, claiming that he had been given advices instead of orders. He got them and a long time afterwards it came to light that both the originals and duplicates had been cashed by Barclays Bank. And paid? —To him. Was there any remedy against him? —Our opinion was that they were paid to him. The account holder was advised of the over-payment but he denied that he got double credits and promptly closed his account with Barclays. We cannot prove that he got the amounts. It was a mishap during the period of the bank strike and we cannot really fully trace how the advices got there either. 234. Was that the worst that happened you during the bank strike? —Not quite. What was the worst? —With your permission I will leave it to the Comptroller and Auditor General to draw attention to our sins. That is fair enough. We do not want any individual information in general terms. We quite appreciate what the Comptroller and Auditor General is up against here. Mr. Mac Gearailt.—Is that an invitation? Any serious criticism I would have—— Chairman.—This is not in the nature of criticism. This is in the anxiety of the Committee to be able to co-operate with you. This obviously arose out of the difficulty of the bank strike when practically every commercial undertaking, and indeed I am sure State undertakings, had very serious problems. You would not be alone in this. You do a very varied and difficult business with a very large number of people involving a large number of small financial transactions. The question I asked was, what was the worst that happened you in the bank strike? What was your greatest difficulty? Mr. Mac Gearailt.—In relation to the Post Office accounts? Chairman.—Yes. Any loss or difficulty the Post Office had arising out of the bank strike? Mr. Mac Gearailt.—Offhand, I cannot recall. I would not like to offer an opinion without consulting my people who were involved in the audit. Chairman.—If we had an answer here it might prevent us having to ask for further information which I do not want to pursue. —May I put it like this in case it might help to clarify the matter. Any loss we had arising out of the bank strike would have come to the notice of this Committee or will, in future, come to the notice of the Committee in so far as any item has not yet been cleared. They would all come to the notice of the Committee. 235. Thank you for that reassurance. Have we everything in this particular year before us, or is there still something to come? —I cannot give a firm assurance on that because inquiries frequently overlap years. In fact, I know of one case which dates back earlier than this which has not yet been cleared because there is a Receiver in bankruptcy and we have claimed against losses that we may have sustained. We do not know how much the losses will be. Are they substantial? —Reasonably substantial, but we may get preferential treatment for some of them and we do not know what it will come to. The point is that it will all come before the Committee in due course. 236. Yes. There is another point for the Committee to consider. The Committee is appointed by Dáil Éireann with terms of reference covering a specific year. It is the Committee’s duty to ascertain the facts in connection with accounting for that year. The Committee cannot accept the principle that if the finances in that matter are not finalised in the year, it should not come to the Committee. This is something we should know about if something has happened in a particular year. The Committee, I hope, will be understanding about this, but I think it is only right that they should be informed, especially of outstanding potential liabilities for the year. There can always be the case where an Accounting Officer may wish to say something that does not go on the record and that can be provided for but, nevertheless, the Committee are entitled to be fully informed of everything that happens during the year being considered. Remember that the next Committee will not be charged with the accounts of this year. We are the Committee responsible for the accounts of this year. —We will be happy to meet the Committee’s wishes. It is not our wishes. You see our position. —Quite so. Hitherto the practice, I think, has been to report only on, for example, a loss at the stage where it became a charge to the account. For instance, at any given time we might have hundreds, perhaps thousands, of possible doubtful debts which we are not sure will become bad debts and we do not bring them into the account until we decide to write them off. But, subject to mentioning that fact, we shall be happy to comply with any decision of the Committee. 237. That is completely accepted. That would be the only rational method of accounting because that will automatically come in when the charge is made to accounts in the following years. You mentioned the bank strike. We know that the bank strike was a very perturbing experience for everyone and it must have been an exceptionally disturbing one for you because not only had you all the difficulties of a commercial concern but you possibly had demands on you as bankers, which aggravated your problem. Could you tell us, in general terms, what were the biggest problems that that gave you in this year under review? If you feel that for public or other reasons you do not want it on the record that can be arranged, and the Committee will treat everything in confidence. —There were no insuperable problems. I do not think that the strike occurred in this year. It did not. So you had no problem arising out of this strike in this particular year? —To the best of my recollection. I do not know if anybody else’s memory is clearer on the bank strike but I think it was over at this time. The item which gave rise to this discussion had occurred earlier. And it is not yet cleared up? —It is being cleared up this year. We are writing off the amount that arose out of the dual advice notes in this year but it arose out of an incident in September 1970. With dual advice notes? Are you still referring to the duplicate money orders which were paid notwithstanding the negotiation of the original orders? —Yes. 238. We are satisfied about that. I asked you if that was the worst that happened to you and you gave us the impression that there was something else outstanding that was of greater import. Please correct that impression if that is wrong. —The question in regard to the bank strike arose from the fact that this loss arose through the circumstances of the bank strike, but the bank strike did not take place, to the best of my recollection, in the year of account. It has not left you with a sword of Damocles hanging over your head? —Looking to the kindness of the Committee, I would say not. 239. Deputy H. Gibbons.—I am not clear on one point—the obligation of the Accounting Officer to make available to the Committee the amounts of money outstanding at the end of each year. What exactly does it cover? I am thinking of the person who has not paid the telephone bill by the 31st March. Must the Accounting Officer log this in in the particular account or can he put it in globally and is the money due to the Department at that time? —At any moment there would be millions of pounds owing to us by thousands of telephone subscribers, for example. Those debts do not come in except in a global way in the balance sheet. They do not show up until there is a bad debt. 240. Chairman.—In your accounts you talk about revenue not paid. Is that right? And that would be included? —£12 million. That would be included in that? —That would include all this. The individual accounts would be open to the Comptroller and Auditor General to check on if he wished? —Yes. 241. Arising out of that, in the income on the telegraph services and indeed in a number of cases, you have headings “Miscellaneous” and on the general accounts these “Miscellaneous” come to £1.2 million. What is covered under the heading “Miscellaneous”? —It is broken down into postal, telegraphs and telephones—— Yes, but in each case there is a fairly sizeable sum under the heading of “Miscellaneous”, and I am coming to Deputy Gibbons’s point. 242. Deputy H. Gibbons.—I understood that by accounting in this way the Accounting Officer has fulfilled his obligation to the Public Accounts Committee at this time and that the individual item only became apparent when it became a loss. Mr. Chairman, you made the point that the Committee should be informed each year of the amount of money outstanding, and as we were discussing individual amounts on page 139, I got the impression that you were suggesting to the Accounting Officer that all the individual items at that time should be accounted for by him to us, individually rather than—— Chairman.—He would naturally in accounting to us and in the general accounts summarise it. Would I be right in this, that items do not get into the accounts until they are certain—I am talking about ordinary losses now—in the case of ordinary debts they appear as debtors until they are written off. Mr. Mac Gearailt.—Are we talking about this account or about the Appropriation Accounts? Chairman.—We are talking about post office debts. Mr. Mac Gearailt.—This is prepared simply on a cash basis. Here we are taking into consideration what is owing as well as what is got. Chairman.—The two link up at this point. Two things are appreciated—supposing you have a case of a default and you are chasing it, it will provisionally appear as money due to you, as debt, while it is outstanding? —It will be in our accounts. Eventually, you may have to write it off. In that case, it is finally disposed of and it occurs in the year in which that happens. Take a debt that you have not cleared up like the ones you were talking about. That appears here as a debt. It will appear in the subsequent year as a loss if it was uncollectable. —It is not shown as a debt this year. Is it in the accounts at all? —It is in as revenue. When I speak of a debt I mean revenue due. —And it appears finally when we can dispose of it. That is equivalent to the same thing. —Yes. 243. It appears as revenue in that way. That is not the point I was making. That is covered. The point I was making is this: if any exceptional circumstances arise where the Department are subject to a substantial prospective loss—the Committee should be informed of it in the year because it is in the interest of all of us. In that case, you have a point when you refer me to the Comptroller and Auditor General. Mr. Mac Gearailt.—He has it shown in the balance sheet, a figure for bad debts reserve. Chairman.—I am not terribly worried about routine debts and bad debts. They will be accounted for in the routine and accepted way and you will look after that. What I am concerned about is any extraordinary circumstance. It is quite obvious that nothing of this sort happened, but if something serious happened in your Department that led to apprehension that there could be substantial loss or substantial failure in administration, it should not be postponed merely on an accounting basis. Do you follow what I mean? I want to be no more explicit than that because to be explicit might suggest something which I have by no means suggested. —I am quite confident that the Comptroller and Auditor General would feel it his duty to bring such a situation to the notice of the Committee. 244. I am afraid I misunderstood your remark. But perhaps that discussion will do no harm. On subhead L.1—Grant for General Purposes equivalent to Net Receipts from Broadcasting Licence Fees (Grant-in-Aid)—You control the issue of the grants-in-aid, do you not? —Yes. I suggest that in the present stringent circumstances it might be desirable to watch unnecessary expenditure? —I shall be happy to bring your comment informally to the notice of the Director General. Informally, yes, because I have not purposely mentioned the matter. Money is needed everywhere for positive application. 245. Deputy Tunney.—I would like to link subhead L.2—Grant for Capital Expenditure of Radio na Gaeltachta (Grant-in-Aid)—and subhead L.3 which deals with the high-powered radio transmitter. Initially the estimate for L.2 was for £56,000 and for L.3 £315,000. In arriving at those estimates you had to take into account different elements when considering purchases for that year. We are told here that for one reason or another it was not possible to make the purchase. Is the money not spent identically with the provision made in the original estimate? —The position as regard L.2 is that that was a final payment. The job was finished with an expenditure of £23,266. That was the amount of money that was due. That would explain that. —In regard to the high powered station, they were not able to make progress as fast as they expected. The station, I am happy to say, is in operation at present. And has been equipped at the figure indicated in that Estimate? —As supplemented by provision in a subsequent year. 246. My question refers specifically to that one. It was hoped to make purchases in that year for which certain allocations were made. There was a delay in completing the contract. What happened the allocation which was provided for items not purchased subsequently? Does the sum of £59,000 refer to the original provision in respect of those particular purchases? —The £59,000 represents the difference between what it was hoped to spend in the year and what it was found possible to spend. To the extent that there was an underspending in that year I would have expected expenditure in the following year. The equipment of the radio transmitter, as originally envisaged, was bought in full. 247. I am anxious to avoid a situation where estimates were provided for certain items some of which were not received. How sure can we be that the shortfall here represents the items not received? Would it be possible that there was over-expenditure on other items? —It is possible that some particular items in the works cost more and others cost less than was visualised when the estimate was being formulated. Would we be getting a true picture of the situation? —We are getting a true picture of what was provided by the Dáil and the amount spent towards fulfilling the purpose which the Dáil had in mind in that particular year. If that were a final statement—which it is not—it would mean that we got the work done for much less than we had expected, as for instance, happened in the case of Radio na Gaeltachta; we had to pay out less eventually than was provided. If there is any additional information which the Committee wishes to have—— 248. Can we take it that the work was completed at the figure provided here? —No, the work was not fully covered by the provision in that year. The work of providing the high powered transmitter was spread over a number of years and the provision occurred over a number of years. No one year stood on its own. 249. Chairman.—I would like to make a further comment in regard to losses. It is to be noted that more than £7,000 was recovered and resulted in no charge to public funds. It is all too easy to accept a loss, and that reflects a commendable energy on the part of the Department which should be noted. 250. Deputy Tunney.—I should like to ask a question. On page 141, misappropriation of official cash by a postmistress, who was subsequently dismissed—was this the only charge—£110—made against her? —That was the only misappropriation of which she was considered guilty. She was not prosecuted. The quality of mercy … She was not prosecuted? —To the best of my knowledge she was not prosecuted. Does the lady in question get an opportunity of paying this money back or is it the policy of the Department that once a person is found guilty of—— —We would never refuse to take the money back. And leave her in her job? —The question of action to be taken in regard to the person’s dishonesty would be a matter for decision at the time. Chairman.—If a person is in a fiduciary capacity, minding money, I for one would be very slow to reinstate her in that position. There I disagree with the Deputy, obviously. Deputy Tunney.—There are more things in Heaven and earth, Horatio. I have heard of other cases—— Chairman.—I was talking in general. Deputy Tunney.—My personal concern is that because of a deficiency of that amount a person would be dismissed. Chairman.—“Deficiency” was not the word used, it was “misappropriation”. There is a difference between “deficiency” and “misappropriation”. “Misappropriation” is a very definite word and I do not think we could condone it. 251. Deputy H. Gibbons.—Going back to the sum of £57,000 for telephone services which were written off, what was the highest sum written off, and under what circumstances? Chairman.—Perhaps the Deputy would give the reference. Deputy H. Gibbons.—It was mentioned in paragraph 54 of the Comptroller and Auditor General’s Report. —I am afraid I could not say off hand what was the highest individual amount, but it will be observed that the total represents 0.22 per cent of revenue and it would be made up of a great number of individual cases. Chairman.—These are examples of something shown as revenue in previous accounts. It is equivalent to debtors in previous accounts because revenue does not mean revenue collected. In your case revenue does not mean revenue collected—it means revenue due and, therefore, it includes your debtors. In previous years it was shown as revenue and now it is finalised, it becomes a bad debt and it is written off. 252. Deputy Tunney.—On Extra Remuneration, in respect of an ex gratia payment to a solicitor of £600, who would guide the Accounting Officer as to what would be the appropriate amount to pay? —The Department’s solicitor as distinct from the assistant solicitor to whom the payment was made. If we required advice from the Attorney General’s Office we would seek it. The expenditure has to be authorised by the Department of the Public Service. Chairman.—There is a sanction there. Deputy Tunney.—I know. I wondered who the guiding hand would be. I noticed that the 52 postmasters got amounts from £101 to £225 in respect of extra duties or extra attendances. I am taking it that their work is considered that much less than the work of the solicitor who got £600? —The extra work they had to do was apparently appraised as properly valued at those amounts, as compared with the appraisal of the extra work on higher duties and extra attendance given by the assistant solicitor. The witness withdrew. VOTE 20—OFFICE OF THE MINISTER FOR JUSTICE.Mr. A. Ward called and examined.253. Chairman.—Paragraph 25 of the Report of the Comptroller and Auditor General reads: “Subhead I.—Grant to Free Legal Advice Centres Provision was made by supplementary estimate for a grant of £5,000 to Free Legal Advice Centres to meet their expenses in providing free legal advice. Payment of the grant was made on condition that accounts of the expenditure be maintained and made available for inspection.” Mr. Mac Gearailt.—This paragraph is for information. The Free Legal Advice Centres organisation has since been incorporated as a company limited by guarantee, having no share capital, under the Companies Act, 1963. 254. Chairman.—On subhead D.1—Payments to the Incorporated Council of Law Reporting for Ireland—material for printing legal books was not ready to the extent anticipated. This came before the Committee last year. There is still considerable difficulty in getting legal books to the printing stage? —That is right. Is there still a deficiency of legal texts? —Yes. The difficulty is in finding people who are able and willing to write a text book and who have the necessary time to do it. As far as the actual routine law reports are concerned no question arises? —That is right. 255. On subhead D.2—Committee on Irish and Comparative Law (Grant-in-Aid) —that looks very nominal. —In that year, it could be described as a token sum. 256. On subhead G.—Compensation for Unsaleable Chemical Substances—I take it that includes things like chlorate, nitrates, weed killer and so on? —Yes. The fertilisers which were in stock at the time the order prohibiting them came into force. In other words anything from which, say, chlorates and ammonium nitrate could be extracted. Is that right? —Yes. The compensation is the difference between what it had cost people who had the materials and what it was possible to get from re-exporting. 257. What are the prohibited chemicals that are mainly involved in this? —You mentioned weedkiller which in fact is one. Sodium chlorate and materials of that kind were being used as weedkillers. A more common one was ammonium nitrate which was normally used as fertiliser. The composition was such that it was very easy, or relatively easy, to make an explosive substance. These were brought under control and at that time there were substantial stocks of them in the country. In effect, other forms of fertilisers are substituted now for them. Most of the stocks were re-exported at a loss to the companies. A loss was inevitable because, for one thing, the carriage in and out was a loss. 258. On subhead I.—Grant for Free Legal Advice Centres—— Deputy Moore.—Are they in operation? Chairman.—The general note said they are being incorporated externally. Is that correct? —These are voluntary centres. There are a number of them in operation. Perhaps the best known one is in Coolock which began operations at the beginning of this year. In that centre they have a full-time solicitor and some other full-time staff. 259. Deputy Moore.—Is there a dispute going on? —The dispute is in a different area. Could I just perhaps briefly explain? This particular grant is to a voluntary organisation which provides an advisory service and sometimes represents people in court. The dispute is in a different area. It concerns people who are not going to these advisory centres at all but who simply, for instance, when charged in court apply for legal aid and if they get it their representation is paid for by the State. This can arise either in relation to solicitors or barristers. There was what was popularly described as a strike by the solicitors for a few months. That was settled. At the moment the barristers have withdrawn their services, and that still remains the position, but this does not affect what is at issue here in subhead I which relates to the voluntary organisation popularly called FLAC. 260. Suppose a person needs some protection, could it be possible that he would not get counsel because of this dispute? —At the moment that is so. What is happening in practice is that cases are being adjourned in the hope that a settlement will be reached very quickly. There is a committee investigating the question of legal aid at the moment. While the dispute is in the area of assistance in criminal legal aid, other matters are also involved. The dispute is a bit wider than that. Nevertheless everybody hopes that some agreement can be reached very shortly whereby barristers will go back into this legal aid scheme. 261. Is it possible, therefore, that a person could be in prison or on remand awaiting the settlement of the dispute before his case would be brought before the court? —In practice, no. It has not worked that way, I am glad to say. We should be thankful for that part of it. 262. Chairman.—On subhead H—Appropriations-in-Aid—the note reads: Unanticipated proceeds from sale of legal text books published some years ago by the Incorporated Council of Law, Reporting for Ireland—can you say off-hand what kind of textbooks these were? —There are only two in fact. We have three on sale but one was published only recently so that this figure in the accounts can relate only to two. One is Practice in Administration and Mortgage Practice, and the other is The Law of Landlord and Tenant. What is the third? —Registration of Title, which was published fairly recently. VOTE 21—GARDA SÍOCHÁNA.Mr. A. Ward further examined.263. Deputy Tunney.—On subhead A— Salaries, Wages and Allowances—you are out much more than you are normally. Percentagewise it is not all that big, but it is, of course, out by a substantial sum. —I avoided putting in percentagewise. Chairman.—Even percentagewise, one in 22 or 23 is a sizeable percentage? —It was not good estimating. 264. Was the real difficulty estimating numbers? —Not so much. The real difficulty related to a combination of the question of numerical strength and the amount of overtime— the interrelationship of the two. We now have a computerised system which enables us to see developments much more quickly than was possible at that time. There is no problem of recruiting reflected in this? —No. 265. On subhead C—Post Office Services —there is an unusual note here: Expenditure on telephones was less than anticipated. That is an unusual comment in a Department’s accounts. Would you like to say why? —It is always very difficult to estimate what will be spent on telephones, particularly when what one is talking about, as in this case, is the total amount of usage of telephones all around the country by Gardaí. It is impossible to estimate it except by reference to what has happened in previous years. It seems to go up and down. 266. Deputy Tunney.—On subhead G— Transport—there is a note: the number of cars purchased was less than anticipated. Invariably there is clamouring that the Gardaí should have more cars. Is there any reason why we did not buy all the cars we could have afforded? —Yes. First of all, may I say that for quite some time now that kind of clamour was almost always based on wrong information. In fact, for several years the Gardaí have had funds to buy as many cars as they needed. In this particular case, the explanation is that the cars bought by the Gardaí the previous year were not bought until very late in the year. The result was that they had a fairly up-to-date fleet and did not need to replace them during this accounting period to the extent expected. VOTE 22—PRISONS.Mr. A. Ward further examined.267. Chairman.—Paragraph 26 of the Report of the Comptroller and Auditor General reads: “Subhead H.—Welfare Services The charge to the subhead comprises:— (1) grants towards the cost of providing hostels for young offenders and delinquent boys:—£35,000 to the Sons of Divine Providence, Dublin; £5,000 to the St. Vincent de Paul Society, Cork; £2,790 to the Dublin Lions Club and (2) grants towards the cost of employing trained social workers in adoption activities:—£7,000 to the Catholic Protection and Rescue Society; £1,400 to St. Bridget’s Adoption Society.” Mr. Mac Gearailt.—This paragraph is for information. I have no further comment to make. 268. Chairman.—On subhead B—Buildings and Equipment—there is a note that some major projects could not be undertaken within the year. Deputy Tunney.—It seems a pity that whatever were the intentions in the matter of the building programme, it was not possible to proceed with them. You would have got much more work for £1 million then than you will now. Chairman.—What was the reason for not proceeding? —A number of different reasons. Some of the items here did not come forward as quickly as had been hoped; for instance, the modernisation of Mountjoy Prison. It proved to be much more difficult to work in a situation where there were more prisoners than had been expected because you cannot work in one part when there are many prisoners in another. Regarding the question of the allocation for the purchase of a women’s prison, there was a great deal of trouble about the acquisition of a site. It took longer than expected. Under some of those heads that are mentioned, substantial progress has been made in the meantime. 269. Deputy Moore.—Are the new buildings in Mountjoy completed yet? —Some are—the training centre and so on —but there is further work to be done in the way of modernising the prison itself. That is going ahead but it is not yet finished. 270. I visited it myself some time ago. Are you satisfied that the training facilities are as good as they should be? The general staff and the prison officers were very keen to improve matters. —Do you mean training facilities for prisoners or for prison staff? For prisoners in the motor car section. —The new training centre which is ready now will, I think, stand comparison with almost anything in Europe. It was not so good the day I was there. VOTE 23—COURTS.Mr. A. Ward further examined.271. Chairman.—On subhead A— Salaries, Wages and Allowances—it is very much less than granted for salaries. Provision for additional assistance was not used and expected staff increases in the Metropolitan District Court did not materialise. What is the position there? —We have got since then the staff increases that were in question at that time. VOTE 24—LAND REGISTRY AND REGISTRY OF DEEDS.Mr. A. Ward further examined.272. Chairman.—On subhead A— Salaries, Wages and Allowances—there is a note to say that proposed staff increases were not operative as soon as expected. What was the reason that it was not operated as soon as expected? —Some of the staff in question had to have special technical qualifications— draughtsmen and so on—and there were difficulties in recruiting them. Again, the position has substantially improved since. The witness withdrew. The Committee adjourned. |
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