Committee Reports > List of Committees > Dáil > 1976 > Committee of Public Accounts > Report - Appropriation Accounts 1974

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 28 Deireadh Fómhair, 1976.

Thursday, 28th October, 1976.

The Committee met at 11 a.m.

ELECTION OF CHAIRMAN.

1. Deputy Bermingham.—I move that Deputy de Valera be elected as Chairman of the Committee.

Deputy Governey.—It gives me great pleasure to second the nomination of Deputy de Valera.

Question: “That Deputy de Valera be Chairman of the Committee”—put and agreed to.

DEPUTY de VALERA took the chair.

2. Chairman.—Gentlemen, my sincerest thanks and appreciation once again for the honour. Let us hope we will be able to get through, as we have done in the past, efficiently and expeditiously. The last Committee was very efficient and I would like to thank you for your conscientious attendance. I trust we will be able to maintain the same standards in this Committee. The Committee never, I think, broke down for want of a quorum. Thank you again.

Mr. S. MacGearailt (An tArd-Reachtaire Cuntas agus Ciste) called and examined.

GENERAL REPORT.

Mr. M. N. Ó Murchú called and examined.

3. Chairman.—Mr. Ó Murchú, you are very welcome. You have the onerous task of being responsible for all Accounting Officers in the Civil Service.

—Thank you.

Paragraph 1 of the Report of the Comptroller and Auditor General reads:

“The Exchequer and Local Financial Years Act, 1974 provides that from 1st January 1975 the financial year for Government accounting purposes shall be the calendar year. To give effect to this change a transitional nine-month accounting period, 1 April 1974 to 31 December 1974, became necessary. This report covers that period and it will be appreciated that where, in accordance with previous practice, corresponding figures for the previous year are given such figures are not strictly comparable.”

Mr. Mac Gearailt.—This paragraph is for information only.

4. Chairman.—We should realise we are dealing with the year which brought in the change from financial to calendar year. It involves a nine-month period. We will consider together paragraphs 2 to 5, inclusive, of the Report of the Comptroller and Auditor General:

“Outturn of the Year

The audited accounts are summarised on page xxx. The amount to be surrendered as shown in the summary is £18,571,952 arrived at as follows:—

This represents 2-6 per cent. of the supply grants, as compared with 2-9 per cent. in the previous year.

In no case has the provision made by Dáil Éireann been exceeded and no excess Vote is, therefore, necessary.

Exchequer Extra Receipts

Extra receipts payable to the Exchequer as recorded in the Appropriation Accounts amounted to £3,673,275.

Surrender of Balances on 1973-74 Votes

The balances due to be surrendered out of Votes for the public services for 1973-74 amounted to £22,747,746. I hereby certify that these balances have been duly surrendered. I further certify that the excess expenditure of £27,818 over and above the gross provision on Vote 21—Garda Síochána, referred to in paragraph 3 of the report for the year 1972-73, has been made good by a Vote of the Oireachtas, £10 having been provided by way of supply grant and the balance being authorised to be appropriated in aid out of surplus departmental receipts.

Stock and Store Accounts

The stock and store accounts of the Departments have been examined with generally satisfactory results.”

Mr. Mac Gearailt.—Paragraph 2 gives the usual information regarding the overall outturn of the Appropriation Accounts for the period. I have no comment to make on it. Paragraph 3 gives the total of the extra receipts payable to the Exchequer collected by accounting officers in the period under review. The breakdown of this total, Vote by Vote, is shown on Page xxx. These receipts are brought to credit of the Exchequer under the head Non-Tax Revenue— Miscellaneous Receipts. As moneys are voted by Dáil Éireann for the service of a particular year it follows that any balances remaining unspent at the end of the year fall to be surrendered to the Exchequer. Paragraph 4 certifies that the moneys due to be surrendered in respect of 1973-74 balances have in fact been so surrendered. Stocks and Stores Accounts kept by Government Departments are required to be audited by me on behalf of Dáil Éireann under the provisions of the Exchequer and Audit Departments Act, 1921. Paragraph 5 informs the Dáil that the accounts were duly audited in the period under review.

5. Chairman.—Paragraph 6 of the Report of the Comptroller and Auditor General reads:

“Expenditure in Excess of Authorised Issues

To enable the services of public departments, for which supply grants are voted by Dáil Éireann, to be carried on pending the passing of the Annual Estimates, Section 2 of the Central Fund (Permanent Provisions) Act, 1965 authorises the Minister for Finance to issue from the Central Fund in any financial year for such a service a sum not exceeding four-fifths of the amount appropriated for that service in the preceding financial year. It is a fundamental principle of parliamentary control that expenditure on a supply service must not exceed the amount statutorily authorised and it is the responsibility of the Accounting Officer to see that this principle is strictly adhered to in respect of each Vote under his control. In the course of audit I noted that expenditure from seventeen Votes exceeded the sums authorised under Section 2 of the Act of 1965 and accordingly I sought the observations of the responsible Accounting Officers. Particulars of the Votes concerned and of the excess expenditure in each case together with the observations of the Accounting Officer, if available at the date of this report, are given in later paragraphs (see paragraphs 10, 19, 21, 22, 23, 25, 34, 41, 43, 61 and 64).

As the Department of Finance exercises a general control over the expenditure of all voted moneys I also sought the observations of the Secretary of that Department. He stated that, while there was no question of a breach of the Central Fund (Permanent Provisions) Act, 1965 by virtue of Exchequer issues to any Vote being in excess of that authorised under the Act, it was regrettable that, although the expenditure involved was in respect of matured liabilities and could not have been avoided, payments from certain Votes in the period under review exceeded the sums statutorily authorised. He further stated that this situation had arisen during the changeover of the financial year to a calendar year basis when the usual parliamentary financial business had to be effected in the nine months to end-December 1974; that even within the nine months the time available to Dáil Éireann for estimates discussion was curtailed by special circumstances outlined to the Dáil on 17 December 1974 by the Parliamentary Secretary to the Taoiseach and that the bulk of the estimates was not taken by the Dáil until 18th December 1974. The Secretary of the Department of Finance added that the Dáil Committee on Procedure and Privileges had since conveyed its written agreement that all estimates and the Appropriation Bill would be passed before the summer recess in future years and that the Minister for Finance was issuing instructions to Accounting Officers emphasising the need for compliance with the limitations imposed on their Vote expenditures by Section 2 of the Act of 1965 in addition to observance of the overall limits on the annual supply granted by Dáil Éireann. Instructions have recently been issued by the Department of Finance to all Accounting Officers reminding them of their responsibility to ensure that at all times expenditure is kept strictly within the sum authorised by Dáil Éireann and requesting them to initiate adequate monitoring arrangements, where such are not already in operation, in respect of payments from Votes under their control so that they will have timely notice when payments are approaching the limit authorised under the Central Fund (Permanent Provisions) Act, 1965 and may take steps to avoid an excess by the timely presentation of the relevant estimate to the Dáil.”

Mr. Mac Gearailt.—This paragraph draws attention to the fact that, prior to the passing of the relevant Estimates, expenditure in the case of 17 Supply Services had exceeded the sums authorised by the Minister for Finance to be issued under section 2 of the Central Fund (Permanent Provisions) Act, 1965. The matter is raised here generally because of the responsibility of the Department of Finance for the overall supervision of State finances. The Committee will have an opportunity of considering the specific cases in which overexpenditure occurred when the responsible accounting officers appear before it. While the passing of the relevant Estimates before the end of the period made funds available which were more than adequate to meet the over-expenditure in each of the 17 cases, nevertheless the expenditure of moneys on a Supply Service in excess of the sum statutorily authorised breaches a fundamental principle of parliamentary control over the public finances.

6. Chairman.—Would the Accounting Officer like to make a general comment?

—We accept there were issues in excess of the amounts authorised during the course of that year. They were similar in nature to the excess covered by an excess Vote after a year had closed, but in fact it was not necessary to take an excess Vote at the end of the year because in the course of the year supply was voted by the Dáil to cover the temporary excess that had arisen. We have explained in the documents given to the Comptroller and Auditor General, which have been produced in paragraph 6 of his Report, the underlying cause of this over-issue. In the normal course Estimates are passed during the year and are not left until the very end, as happened in the year under review, when there were only nine months available for the passage of the Estimates. The Dáil did not pass the bulk of them until almost the close of the period. More than 80 per cent of the previous year’s appropriations had been exceeded necessarily in order to take care of liabilities proper for payment which had fully matured. Though there was a technical breach of financial propriety, no abuse occurred. In the case of two Votes, the Accounting Officer of the Department of Finance had no option but to issue payments despite the fact that they were somewhat in excess of the amounts authorised for issue at that stage. It is a situation that should not recur and was caused largely by the nine-month financial year. In the following financial year some similar excesses occurred necessarily due to the same factor, but a different aspect of it— that the basic expenditure allowable related only to nine months of the preceding year and was therefore considerably less than would be normal in a full year. The sums authorised were not sufficient to enable the payments to be made before the Estimates were passed by the House. Apart from 1974, and the limited cases in 1975, there should not be any repetition of this. The responsibility for ensuring that excesses of this kind do not take place rests on the individual Accounting Officers. We have brought this to their notice and they are all fully seized of the necessity for complying.

7. Deputy C. Murphy.—Can we be told how many there may have been last year?

—I have not got the number at the moment. It occurred in two of the Votes for which the Department of Finance provides an accounting service. I can let the Committee have a note.*

8. Chairman.—We appreciate that you mentioned the year yet to come before the Committee. There are a couple of questions I should like to ask. First of all, are we to take it that the total issue from the Central Fund was within the provisions of the Central Fund Act, 1965—that there was no global over-expenditure?

—Neither global nor in any individual case.

9. So that all we are really concerned with is the appropriation within a particular Vote, of moneys that are in excess under one heading?

—I do not think it is that. It is, as the Chairman has rightly said, that there was no excess of issues from the Exchequer to the individual Votes. In that respect the 1965 Act was respected absolutely, but in certain cases individual Departments dealing with individual Votes issued more payments than were authorised statutorily.

That was covered?

—That is right. That was covered ultimately when the Estimate was passed. It was a matter of excesses under individual Votes rather than under individual subheads within Votes.

10. How do you say that within the Votes one was within the 1965 Act?

—At the time of the excess payment, one was not within it. It was when the Dáil ultimately voted the supply that it was covered. At that time there was an excess within the Votes— a payment in excess had been made—and this was covered in the course of the year when the Estimate had been passed by the Dáil.

11. At the time of payment in the case of particular Votes there was therefore a breach of the 1965 Act which was remedied later by the passing of the Estimates, would that be a fair way of putting it?

—Not exactly.

I want to try to get it legally first and then we will talk about the merits of it. We understand your problem. There is no lack of sympathy.

—The 1965 Act really dealt with the amount the Exchequer can advance to the individual Votes. There was no breach at any time of that requirement. Then, individual Votes made particular payments which were in excess of that amount. Oddly enough, they did not there transgress the 1965 Act but the Exchequer and Audit Act, 1866 which says that in no circumstances may the Department of Finance or any other Department make a payment in excess of the amount authorised by parliament. I am paraphrasing but that is the effect of it. It was that provision which was breached temporarily by the Departments which made excess payments during this year. It was not the 1965 Act. This is rather technical but it is important. The 1965 Act puts down a limit on the amount the Exchequer may issue to any individual Vote but the transgression committed in the case of the Votes we are talking about was that they made payments in excess of the amount authorised by parliament and in doing so they were in breach of section 11 of the Exchequer and Audit Act, 1866.

12. When the Exchequer issues were made they were within the 1965 Act?

—That is so.

The actual position is that those Departments which were in error here made issues that were in excess of their statutory authority. Is that not so?

—In excess of the amount authorised.

It was possible to stay within the 1965 Act because there were moneys available globally for supplying to them by the appropriate disburser and then the matter was regularised in the passing of the Estimate within the year. Is that correct?

—Yes.

13. It is rather important to have the background clear. Now we come to the reasons for such a thing occurring. It is appreciated that there was a peculiar compulsion this year. Estimates were not passed until December. Surely Estimates were prepared and known to the Accounting Officers before December?

—Yes indeed.

This is one of the problems of accounting that you and we will be faced with, this tendency to put off passing Estimates until the last moment. Does this pose a problem for you that from the practical point of view these Estimates must be prepared at the beginning of the financial year and known to the Accounting Officers? They must know what their budget is. Can we take it that those Estimates are prepared and available in the Departments? They are not passed until the end of the year. That leaves room for adjustment in the payments and there is a certain convenience in that. Do you think that is a satisfactory arrangement or would you make any suggestions for improving it?

—It is hardly for me to comment on the way the Dáil performs its business but the fact that Estimates are passed so late in the year creates great problems for Departments not, oddly enough, in relation to the development of expenditure during the year but simply because there is this overall limitation, under the 1965 Act, on what can be issued and spent in the course of the year pending the passing of the Estimates by the Dáil. This was a perennial problem, but following the difficulties which arose in 1974, the Dáil Committee on Procedure and Privileges agreed that all Estimates and the Appropriation Bill would in future be passed before the summer recess. This should take care of almost any case one can think of. It is very unlikely that any problem will be created for any Department if the Estimates are all cleared and the Appropriation Bill passed before the summer recess.

14. Are you confident that you can maintain the control that this Committee have been emphasising in recent years that Accounting Officers will not overspend or appropriate moneys to wrong subheads in the future, that the mechanism is sufficient to enable you to control that?

—As regards the particular problem that arose in this year, we hold that it is a fundamental duty of an Accounting Officer not to spend more money on any service than the Dáil has appropriated to that service. There is not any ready mechanism by which we or anybody else can check on these matters during the course of the year any more than one can check on any other possible irregularities. Having said that, one assumes that Accounting Officers will act responsibly and having been made fully aware of their duties will be at pains to ensure that those duties are properly carried out. I have no hesitation in saying that we are satisfied with these arrangements. They go as far as one can practically go to ensure propriety and they rest, as almost any such arrangements rest, on the responsible functioning of Accounting Officers.

15. I know this does not come within your purview but the Estimates are likely to be passed, as we have seen, under the present mechanism, en masse, on the last day allowed by the order here. Does that cause any problems or disquiet to you? Does it leave you with the uncertainty of what may come later?

—It does not. As long as they abide by the undertaking to pass all the Estimates by the summer recess, it is perfectly satisfactory from our point of view. We can be assured that all Departments will have sufficient supply to cover all their demands throughout the year, and we are satisfied with the arrangements for ensuring regularity in the making of payments. The fact that the Dáil will now pass these before the summer recess removes the problem that was created for us in the past.

16. Deputy H. Gibbons.—It is obviously agreed that the Minister must have authority to pay this four-fifths in case it arises. Does this automatically allow the Accounting Officer of each Department to say: “We can exceed four-fifths of the appropriation; we know this will be recouped to us by the Minister for Finance”?

—I do not think it does. The purpose of this four-fifths is to keep the business of the State going at the beginning of a financial year. At the end of the financial year under our system all money is surrendered and one must ensure then that each spending Department has money from the first day of the next financial year in order to keep the services of the State going. It is necessary to provide it with a reasonable amount of money to carry it over until such time as the Dáil has passed the Estimate. At that time it can spend the full amount of the Estimate in the course of the year. Apart from these cases that arose where individual Accounting Officers had no option but to commit this technical breach, there have been no instances, that I know of, of an Accounting Officer assuming that he can spend more than he is authorised to spend in the confidence that the Minister for Finance will see him right eventually. It is not the Minister for Finance but the Dáil because the Dáil has the power to vote money, not the Minister for Finance. I would not see any problem of the kind mentioned.

Would the situation not be that in fact they had spent this amount without authority?

—That is so.

It will not arise in the future?

—Apart from the odd instance I mentioned, there is no reason why it should arise.

The Appropriation Act will be passed in July?

—Yes.

17. Deputy C. Murphy.—Does closer monitoring take place now between the Accounting Officers and the Departments concerned so that the Minister would be able to present an Estimate in the Dáil if necessary?

—Yes. Every Department is authorised under the 1965 Act to spend up to 80 per cent of the amount appropriated for that service in the preceding year. This is to give them a flow of money until the Dáil passes the Estimate. Under the current arrangement, that flow is more than adequate for all the requirements provided the Estimate is passed by mid-summer. The Department is then authorised to spend the full amount of the Estimate, not merely the four-fifths. The question of an additional Estimate would only arise if more money were required than was contained in the Estimate and voted in the House, and that would be provided then by way of a Supplementary Estimate which would be introduced by the appropriate Minister.

18. Deputy Crotty.—Is the 1965 Act now outdated with inflation running as it is? In relation to these technical breaches in the years—the changeover to the nine-month year and 1975 was mentioned—if it happened in 1976 would it still be referred to as a technical breach? It gives the impression that it does not matter any more. Is there any need for it at all?

—There is. I want to make it quite clear that the technical breach is related to the fact that you had quite exceptionally a nine-month year cropping up and that has two consequences. In the nine-month year Estimates were passed very late and Departments had to keep their services going in advance of the passage of the Estimates within the last fortnight of the financial year and that was one of the problems in relation to 1974. In relation to 1975, Departments were authorised to spend 80 per cent of the amount appropriated for nine months so that, in effect, they had, perhaps, 60 per cent and that also gave rise to shortfalls. Also, at that time the Dáil had not got round to taking the Estimates by mid-summer. They have done that now. In future we will be talking about 80 per cent of the appropriation for a full year rather than a nine-month year so that there would be no problem in relation to that. If it happens that a particular service has a seasonal pattern and that very heavy payments arise in the first months of the year, it would be possible to deal with that by having that Estimate taken early in the year. That would be quite exceptional but apart from that I do not see any problem.

19. Deputy Moore.—When referring to overspending is it £1 or £1,000 or millions?

—There are various ways of thinking of overspending. We are talking about spending more than the amount authorised by the Dáil, and one penny is overspending there. You are authorised to spend so much, and if you spend anything over the specified amount it is a breach, and we, and I am sure the Comptroller and Auditor General, would regard it as an excess.

20. Chairman.—The continued use of the word “technical” in this discussion is not a help to the overall controlling officer because it seems to imply an excuse that he or the Committee cannot really accept. We cannot take from the Accounting Officers generally an excuse that a thing is a technical breach. There should be no breach. The overall controller will appreciate that this is not a reproach.

—I take the point.

21. The other point I want to refer to is the 1965 Act which was raised by Deputy Crotty in relation to inflation. Under the terms of the 1965 Act it is a proportional limit. It is not an absolute monetary limit?

—That is so, and that is a built-in safeguard against the effects that the Deputy was apprehensive of.

22. Deputy Crotty.—In 1965 there was a set pattern whereas now you can have wide variations.

—The fact that it is a percentage figure means that you are rising on the inflationary tide every year, and you would have to have quite extraordinary inflation from one year to the next if 80 per cent of the previous year’s appropriation would not suffice for half the next year.

23. Chairman.—There is a definite point there. Does any other member wish to make any general comments? If there is anything that the overall controller would like to say we would like to hear it, as we appreciate the overall problems and we would like mutual co-operation here to make the machine work?

—I am glad to find so understanding an acceptance of the difficulty that was created in 1974 by the nine-month year. It makes our task easier. Earlier I made the point that, strictly speaking, there was not a breach of the 1965 Act as such. But there were breaches of the provision in the Exchequer and Audit Act, 1866, which says no Department may authorise the spending of money for any service in excess of the amount authorised. That is basic and runs right through our control and the Committee’s control of Government expenditure. In regard to the point about a technical breach, a breach is a breach and has to be looked at. The question of technicality, or otherwise, is possibly something one takes into account in determining culpability; but, in strict terms, any breach has to be looked at and we, in the Department of Finance, have to be on guard against breaches for whatever reason.

Would the Comptroller and Auditor General like to comment on this?

Mr. Mac Gearailt.—I think the Accounting Officer has explained the position. My own difficulty arises because of the late passing of the Estimates. As I mentioned, the responsibility is with the Accounting Officers. They are not entitled to spend more than is available. They did so.

Chairman.—It is neither a trivial nor a technical matter because in one case there was £13¾ million involved and a technicality could hardly cover £13¾ million.

—I agree.

24. Paragraph 7 of the Report of the Comptroller and Auditor General reads:

“Statement of receipts into the central fund for the period 1 April 1974 to 31 December 1974.

Statement of issues from the central fund for the period 1 April 1974 to 31 December 1974.

Mr. Mac Gearailt.—This paragraph shows the breakdown under various heads of moneys received into and paid out of the Central Fund in the period under review.

25. Chairman.—This paragraph reflects the inflation in that year. Would that be correct?

—I presume it is. It reflects the increased requirement of the Exchequer and that in itself reflects a factor of inflation. It was the year following the oil crisis and that had its own problems.

26. Paragraph 8 of the Report of the Comptroller and Auditor General reads:

“The revenue from Agricultural Levies as shown in paragraph 7, £2,608,725, represents the following receipts into the Central Fund in respect of “Own Resources” collected under E.E.C. Regulations:—

Mr. Mac Gearailt:—This paragraph is for information and refers to a new head of revenue which has arisen since we became a member of the E.E.C.

27. Deputy H. Gibbons.—Would it be in order to ask what is the mechanism for collecting the monetary compensatory amounts?

—It is certainly in order to ask. It is quite a complicated mechanism and I would be glad to deal with it by way of a note. I would be happier to give you a note rather than try to explain it here. I might mislead you.

There are some moneys outstanding still?

—At any given time there are moneys outstanding. This has been an in and out process. We have moneys going to the E.E.C. and coming back. By and large, we have money owed to us at any given time, but it is a continuing process. Then, when the year is ended, there is always an adjustment in the course of the following year.

Chairman.—The Committee would be very much obliged if you would furnish us with the note, as you have suggested.

—I will be glad to do so*

28. Paragraph 9 of the Report of the Comptroller and Auditor General reads:

“Issues under the European Communities Act, 1972

Issues amounting to £67,180,188 were made in the period and comprise:—

(1) £66,412,190—this amount was advanced to the Minister for Agriculture and Fisheries to enable him to discharge his function as the Communities’ official Intervention Agency (see also paragraph 49).

(2) £500,000—this represents the third and fourth instalments of Ireland’s subscription to the capital of the European Investment Bank.

(3) £267,998—this represents the third and fourth instalments of Ireland’s contribution to the European Investment Bank’s statutory reserve and to such of its provisions as are equivalent to reserves.

Including the amount shown under (1) above the total advances from the Central Fund to the Minister for Agriculture and Fisheries up to 31 December 1974 amounted to £71,054,416 and repayments to the Central Fund up to that date, including £12,391,364 in the period under review, totalled £13,079,447.”

Mr. Mac Gearailt.—This paragraph gives the breakdown of the issues “below the line” during the period under review from the Central Fund under the European Communities Act, 1972. The main item £66,412,190 consists of advances made to the Minister for Agriculture and Fisheries to meet expenditure in relation to beef offered for intervention.

VOTE 1—PRESIDENT’S ESTABLISHMENT.

Mr. M. N. Ó Murchú further examined.

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

“Expenditure in excess of Authorised Issues

In paragraph 6 above I referred to payments made from seventeen Votes in excess of the amounts authorised by Section 2 of the Central Fund (Permanent Provisions) Act, 1965. They include payments of some £700 from this Vote and £8,000 from Vote 10—State Laboratory. I sought the observations of the Accounting Officer. He has informed me that the expenditure involved took place during the changeover of the financial year to the calendar year basis when the usual Parliamentary financial business had to be effected in the nine months to end-December 1974 and that even within this period the time available to Dáil Éireann for estimates discussion was curtailed by special circumstances outlined to the Dáil on 17 December 1974 by the Parliamentary Secretary to the Taoiseach. The delay in passing the estimates gave rise to the temporary and regrettable excesses which because of matured liabilities were unavoidable.”

Mr. Mac Gearailt.—Paragraph 6 which you have just considered, draws attention in a general way to payments made in the case of 17 supply services in excess of issues authorised under section 2 of the Central Fund (Permanent Provisions) Act, 1965. This paragraph draws attention to two specific services in which there was overspending—Vote 1, President’s Establishment, and also Vote 10, State Laboratory.

30. Chairman.—We will deal with this in general terms. We will take the two together. Could you say what happened in each case? We will be querying Accounting Officers and we had better set a precedent with this.

—In the case of the President’s Establishment practically all the expenditure is on salaries and allowances. These are payments that simply cannot be deferred. You cannot tell people: “We cannot pay you because the Dáil has not yet voted the money”. Payments had to be issued. In each case the net overissue was small in relation to the entire Vote but was unavoidable. These two cases exemplify fairly well the problems that arise, even in the case of the £13¾ million overpayment mentioned. It gives us in the Department of Finance a certain fellow-feeling with other Accounting Officers because we were ourselves caught in the trap at the time.

31. Could we relate it to the figures. The Comptroller and Auditor General will not have any objection to our dealing with this at this stage?

Mr. Mac Gearailt.—No.

Chairman.—Can you relate it to the figures when we refer to the Vote itself and say what happened about the £700?

—I am not sure if I have anything as detailed as you want but I would be glad to send you a note on it.*

Perhaps you would do that in both cases. It would be a guide for us in dealing with other accounting officers?

—Certainly.

It will be a help to us in getting business done quickly.

—Very good.

32. Deputy H. Gibbons.—What is the President’s salary now?

—As far as I can see, the figure at the moment is £18,030 per annum in respect of personal remuneration.

Deputy Griffin.—What would the pension be?

—Quite frankly, I do not know. That is something for the Department of the Public Service.

I think it is geared to that of the Chief Justice?

—The salary is related to that of the Chief Justice, but what the precise pension is I do not know. The Department of the Public Service, which has the same Minister but a different Accounting Officer, deals with that. You might like to raise it with him. Alternatively, we could send you a note.

33. Chairman.—Is the provision in subhead A with reference to the staff of the President’s Establishment?

—Yes.

Where is the provision for an allowance for maintenance and running?

—That is included in the Vote for Public Works and Buildings, in common with all State properties.

34. Deputy C. Murphy.—Were there extra posts created and, if so, were they filled?

—I do not think so. There were posts of messenger and doorkeeper and the post of doorkeeper was filled in June, 1975.

VOTE 6—OFFICE OF THE MINISTER FOR FINANCE.

Mr. M. N. Ó Murchú further examined.

35. Chairman.—Subhead B refers to a saving in the cost of training staff?

—In the normal course staff are sent on courses every year and the main reason for the underspending in this year was that there were only nine months and some of the courses either did not take place or the staff could not be released to attend them.

It does not mean there was a decrease in staff training?

—No. These courses are run by various institutes and the Department of the Public Service now have active and expanded training capacity for all grades in the civil service. Training is becoming more rather than less important.

Expertise is becoming increasingly necessary, especially in your Department?

—That is so.

36. Deputy C. Murphy.—On subhead C— Post Office Services—savings with the Post Office appear to have gone up?

—The Post Office deal with saving certificates, saving stamps and so on. The whole thing is based on the actual expenditure involved. With the increase in the size of investments, more staff are involved. The main components of the agency charge are salaries, pensions, transport, interest and so on, which are on a rising scale. There is also the increased volume of savings which goes on from year to year.

37. Chairman.—There is no note in regard to subhead D. Apparently in 1974 no particular problems arose in connection with management of Government stocks?

—No. In fact the Estimate was quite close and it was adequate.

Is there a danger now, with the monetary situation and continuing inflation, that trouble will be caused in future budgeting?

—There is a danger. It is more difficult to estimate in advance what the expenses of management will be, but so far we have not fallen down on it. We have been able to manage carefully enough.

38. Deputy H. Gibbons.—Is the management done by a section of your Department or by an agency or both?

—Most of it is managed by the Central Bank for the Department. Up to August, 1974, national loans were managed in part by the Bank of Ireland and by the Central Bank. Since 1974 State domestic stock is managed by the Central Bank. The fee charged is £300 per £1 million. The Bank of Ireland manage prize bonds but they will be taken over eventually by the Central Bank. At the moment there is a very large staff and accommodation involved and the Central Bank cannot take them over.

39. Deputy Griffin.—On subhead E—Economic and Social Research Institute—have the staff vacancies been filled since?

—They have. The Institute are now practically at full establishment. What happens is that if they want to undertake a piece of research they may not have a man qualified to do it and there would therefore be a delay.

40. What is envisaged in regard to subhead G—Grants for County Development Work? What is the type of work? It seems to be a very small expense.

—One has to look at subheads G and H together. They are both part of the one service. They are administered by county development teams of which there are 13 throughout the country. Subhead G covers the teams running costs. Grants are paid from subhead H— Special Regional Development Fund (Grant-in-Aid). The teams can make smaller grants for county development work which, by and large, they can give with less formality than under the Central Development Committee.

41. Deputy C. Murphy.—Is the Regional Development Fund not limited to certain areas?

—It is limited to the areas where you have those special county development teams. Roughly speaking, it is the west and the underdeveloped areas.

We have a county development team in County Wicklow but I did not think we were getting any money under this.

42. Chairman.—On subhead I—Science and Technology—were the personnel recruited since?

—They have been. As you know the responsibility for this service has now been transferred from the Department of Finance to the Department of Industry and Commerce. In fact a Bill is before the Dáil at present for setting up a new national board for science and technology.

43. Deputy C. Murphy.—How were the priorities with regard to the projects approved for funding in 1974 decided on? Who put forward the projects as being suitable for funding? Is this a matter of policy?

—No. There are a number of committees under the National Science Council. They have a number of ways for giving money for these projects. There is, for example, a scientific research grants scheme. This is a scheme of grants for research and development at third level which came into operation during 1969. It is administered by the secretariat of the National Science Council under the aegis of the university research committee whose members are appointed by the National Science Council on a three-year basis. This committee includes members of the council, persons of standing and authority at third level establishments from the State research institutes and from industry. The procedure is that, following departmental examination of grant applications by the university or research committee assisted by external assessors, the council recommend to the Minister for Industry and Commerce—in this year it would be the Minister for Finance—the proposals which they consider are worthy of support. That is the way they are decided on. They are reviewed and assessed by the research committee and then recommended to the Minister.

44. Chairman.—Under subhead J—National Economic and Social Council—was the relevant expenditure incurred later?

—Yes.

45. Does this council not supply valuable data?

—It really supplies valuable comments on particular aspects of economic and social policy.

For instance, the one on social statistics?

—Yes. They also had one on Public Expenditure in Ireland. Another recent one, which was very topical, was Prelude to Planning which related in many ways to the Green Paper which has been issued.

These are valuable to you and to administration.

—They are valuable in policy formulation and policy assessment. The Minister for Finance in a recent public statement has mentioned how valuable he found the Report on Public Expenditure and also the Prelude to Planning in recent months.

46. Would you agree that it is important to maintain this activity—I know we are going into policy reasons here—and that money spent here is money well spent from the administrative point of view?

—Yes. In fact, from the amount of reportage which it produces its costs are very modest.

In other words, it is very efficient.

—It is producing good reports and a large volume of them which we think are at a very reasonable cost.

That is a tribute to their efficiency.

—Yes.

Although it is irregular to express an opinion we hope that work will continue and that they will have the resources to do this.

47. On subhead K—Appropriations-in-Aid —how is it that an Estimate of £2,000 became ten times that sum?

—We would relate this disparity to the disparity between the Estimate and the expenditure subhead B. You will see there was £18,000 more. We recovered practically all of that from the E.E.C. in the course of the year.

It is a bookkeeping entry to some extent?

—Yes.

48. Deputy H. Gibbons.—On the Special Regional Development Fund, how does income tax arise here?

—Sometimes when payments are made to this fund, income tax is deducted from them as is the case in many payments of interest. In other words, the payment is made nett of income tax. The fund is not liable to tax but gets a refund of tax. It is only a bookkeeping adjustment.

49. Is the fund re-invested in other things?

—Yes.

50. Is there any difficulty about the repayable advances outstanding?

—There are not any difficulties except that most of these firms which have received advances are firms in financial difficulties. It is not as easy to get repayment from them as it would be from more viable firms. In some cases the advances have had to be written off. I do not suggest this is the case with any of those mentioned here. Of its nature this assistance from the fund is rather speculative. It is not a gilt-edged security and you have to take the risk of some losses. We are not experiencing any particular difficulties with any of those.

51. Deputy C. Murphy.—On page 13, in items 1 and 2, £62,180 and £66,844 were outstanding, and I suppose companies were in receivership or in liquidation. How do they proceed? Would any of that be recoverable? Would that be shown in following years?

—It would be shown in following years. This is an on-going process. Of its nature these are likely to cause more trouble than normal because all of these firms were firms which were initially in financial difficulty.

VOTE 10—STATE LABORATORY.

Mr. M. N. Ó Murchú further examined.

52. Chairman.—We have already had the comment of the Comptroller and Auditor General about the £8,000 that was spent in excess of statutory authority. We need not go back on it. On subhead D—Apparatus and Chemical equipment—this is largely a Revenue laboratory is it not? It is largely an analytical laboratory for Revenue purposes?

—That is so. That is its main purpose.

53. Deputy C. Murphy.—Is the apparatus standard or are there new appliances continually coming on the market?

—I can answer that best by telling what was bought in that year. The major items bought in 1974 were a Bekk apparatus costing £1,000. That is used, I understand, for the classification of paper for tariff purposes. The second item was a Cahn microbalance.

VOTE 14—SECRET SERVICE.

Mr. M. N. Ó Murchú called.

No question.

VOTE 15—AGRICULTURAL GRANTS.

Mr. M. N. Ó Murchú called.

No question.

VOTE 17—MISCELLANEOUS EXPENSES.

Mr. M. N. Ó Murchú further examined.

54. Deputy C. Murphy.—On subhead D— Centenarians’ Bounty—is this just a once-off or does it continue?

Chairman.—How did the £50 get into it?

—It is £50 for each bounty.

Deputy C. Murphy.—Does he get £100 again when he is 101?

—No.

The witness withdrew.

The Committee adjourned.

*See Appendix 4.

*See Appendix 5.

*See Appendix 4.