MINUTE OF THE MINISTER FOR FINANCE ON REPORT, DATED 24 JUNE 1976, OF THE COMMITTEE OF PUBLIC ACCOUNTS ON THE APPROPRIATION ACCOUNTS, 1973-74
PART I—GENERAL OBSERVATIONS
Paragraphs 1, 2, 8, 9, 11, 13, 14, 17.
These paragraphs do not appear to call for comment.
REPORT DATED 13 JULY 1972.
Paragraph 3—Recovery of moneys.
Consequent on legal advice which he received the Minister has had proceedings instituted in the German Courts against a German citizen for the recovery of certain money spent. The Minister will keep the Committee informed of developments.
Paragraph 4—Audit of Accounts of state-sponsored bodies
The Minister notes the opinion of the Committee on the question of the scrutiny and control of State-sponsored bodies by Parliament and, in particular, by the Comptroller and Auditor General. He is of the view that, in relation to the commercial State-sponsored bodies, this issue is one which could be considered by the proposed Joint Oireachtas Committee of the Dáil and Seanad to review the activities of the State-sponsored bodies engaged in trading or commercial operations. The motion proposing the establishment of the Committee was moved in the Dáil on 10 November 1976. The position with regard to the non-commercial bodies is that, where Exchequer support is involved, they are generally funded from Voted moneys which are open to annual parliamentary debate and to the scrutiny of the Comptroller and Auditor General. Further consideration will be given to the Parliamentary review of the non-commercial State-sponsored bodies in the light of the operation of the proposed Joint Oireachtas Committee on the commercial bodies.
Paragraph 5—Payments to Special Regional Development Fund (Grant-in-Aid)
The Government has instituted an inquiry with the following terms of reference: “to examine and report on the appropriate organisation and structures for the planning, co-ordination and discharge of the functions of Government at subnational levels”. The Committee will be informed of developments in relation to the further consideration of payments to the Regional Development Fund in the overall context of this inquiry.
REPORT DATED 23 JANUARY 1975.
Paragraph 6—Roinn na Gaeltachta
The Minister accepts the Committee’s view that where, in relation to bodies like Gaeltarra Éireann, it is proposed to make an issue towards the end of a financial year in respect of expenditure accrued due by the grantee, the Accounting Officer should be fully satisfied that the expenditure being accrued relates to the service of the year for which the grant-in-aid is provided. As regards the Committee’s request that a suitable note in relation to each specific case be included in the relevant Appropriation Account the Minister considers that, as such issues form an inherent part of the grant-in-aid system and could not therefore be deemed to be of an extraordinary nature such as, say, ex gratia payments, details might be furnished to the Comptroller and Auditor General by way of a separate schedule rather than by way of specific notes on the face of the published Appropriation Account.
Paragraph 7—Breaches of Accounting Principles
It is envisaged that training courses in the principles of Government accounting will continue to be held on a regular basis in the Civil Service Training Centre.
The booklet referred to by the Committee has been issued and copies have been forwarded separately to the Committee for its information. It is entitled “An Outline of Irish Financial Procedures” and contains a summary of the principles and procedures of Government accounting. Accounting Officers have been asked, insofar as they consider it necessary, to have copies made available to the staff of their Departments. The booklet, which is expected to be of interest to persons outside the Civil Service who are interested in public finance, is also being made available generally to the public through the Government Publications Sale Office.
Paragraph 10—Supplementary Grants to Córas Iompair Éireann
The legal advice given to the Minister concerning the statutory authority for the issue of voted moneys to bodies in addition to statutory grants was conveyed orally by the Office of the Attorney General. Following the Committee’s request for an opportunity to study this legal opinion, a written submission was made to the Office of the Attorney General outlining the background to the case involving Córas Iompair Éireann, and seeking confirmation of the advice given orally. The Office of the Attorney General has now replied confirming that advice. Copies of the submission and the legal advice are attached as requested.
REPORT DATED 30 OCTOBER 1975.
Paragraph 12—Central Statistics Office
Following examination of the general question of providing for office equipment under separate subheads, the Department of Finance, in consultation with the Department of the Public Service, has issued instructions that, as from 1977, expenditure on these supplies met by Departments from their own Votes should, where the projected expenditure is £20,000 or more, be provided for in a separate subhead of the relevant Vote. Where the projected expenditure is less than £20,000 provision will be made in the “Travelling and Incidental Expenses” subhead.
Paragraph 15—Agriculture—Recovery of Loans
The Attorney General has been asked to advise on the circumstances in which recovery of the loans could be effected. The Minister will inform the Committee of the legal position in regard to their repayment when the advice of the Attorney General is received.
Paragraph 16—Office of the Minister for Education—National College of Art and Design
The Minister has been informed by the Department of Education that accounts of the College covering the period from 1 May 1972 to 31 December 1974 were submitted for audit to the Office of the Comptroller and Auditor General on 15 July 1976, and that the accounts for 1975 will be submitted shortly.
PART II—PARTICULAR ACCOUNTS
Paragraphs 22, 27
These paragraphs do not appear to call for comment.
Paragraph 18—Industry and Commerce—Arrangements for the purchase of Ardmore Film Studios
The Board of the National Film Studios of Ireland Ltd., has advised the Minister for Industry and Commerce that it is absolutely necessary for the effective use of the studio facilities that all the land contained within the studio boundaries should be retained by the Company. It is understood, in fact, that the lands have been used extensively as exterior locations for film and television commercial production over the past year.
The Board of the Company has indicated that the availability of these facilities is essential for the future production of feature films at the studio. It considers it vitally important, therefore, to have an area free of buildings, and under the studio’s control, so as to isolate working areas from traffic and general outside noise which can interfere with the progress of filming and lead to an escalation of costs. The Board has also indicated that because of the basic nature of existing facilities, its future plans must envisage the construction of additional facilities within the present boundaries.
The Minister for Industry and Commerce has indicated that he accepts the advice of the Board of the National Film Studios of Ireland Ltd., and that he proposes to bring this matter to the attention of the Government in due course.
Paragraph 19—Industry and Commerce—Provision for Specialists’ Services
In accordance with the Committee’s suggestions, fees and expenses in respect of consultancy assignments and other commissioned surveys are now, with effect from 1976, provided for under a separate subhead A2 (Consultancy Services) of the Vote for Industry and Commerce.
Paragraph 20—Public Works and Buildings—Shortage of Professional Accountants
In consultation with the Office of Public Works, the Minister for the Public Service is considering what measures are necessary to improve the recruitment of Cost Accountants (now styled Professional Accountants). The Committee will be notified of the outcome.
Paragraph 21—Secondary Education—Delays in Submitting Accounts of comprehensive and community schools.
The Minister is informed by the Department of Education that satisfactory accounting arrangements for these schools are now in operation.
Paragraph 23—Higher Education—Issues from Grant-in-Aid.
The Minister is informed by the Department of Education that arrangements to avoid issues from the grant-in-aid to the Higher Education Authority in excess of immediate cash requirements are now in operation.
Paragraph 24—Payments Requiring Validation by Specific Legislation
The Minister notes that, while the Committee feels constrained to criticise delays in bringing certain amending legislation before Parliament, it will postpone further comment on the payments involved until it has had an opportunity of studying the legal advice referred to in paragraph 10 of its Report.
Paragraph 25—Office of the Revenue Commissioners—Problems of Tax Collection
Consideration is being given to the question of further steps to improve the position. The Committee will be kept informed of developments.
Paragraph 26—Office of the Revenue Commissioners—Comparison of VAT Returns with Accounts Submitted for Income Tax Purposes.
It is understood from the Office of the Revenue Commissioners that arrangements for reconciliation were put into operation as soon as value-added tax returns could be accumulated for periods corresponding, as close as possible, to the accounting years of taxpayers. These returns are summarised by computer and distributed to the local tax offices where they are placed on the relevant income tax files. When accounts are received for income tax or corporation tax purposes the Inspector of Taxes carries out a consistency test as between the two sets of figures. Returns from tax offices, showing the numbers of queries raised following these tests, indicate that these arrangements are working satisfactorily.
Paragraph 28—Forestry—Miscellaneous Appropriations in Aid
The Department of Lands (Forest and Wildlife Service) has been asked to classify the major items in the heading for miscellaneous receipts for 1977 and subsequent years. For the year 1976 the matter will be dealt with by way of a footnote to the account.
The Department of Finance is bringing to the attention of all Accounting Officers the view of the Committee that, where an Appropriation Account includes the general head “Miscellaneous” under Appropriations in Aid, details of the principal items involved should be given in an explanatory note to the subhead. The attention of Accounting Officers is also being directed to the Committee’s view on the desirability of breaking down sizeable miscellaneous provisions in debit subheads in the Estimates so as to give information regarding the nature of the expenditure proposed.
Paragraph 29—Agriculture—Delays in Collecting MCAs.
The total amount of the monetary export charges outstanding in the cattle and beef sector on 31 March 1976 was £5,903,800, of which £5,861,000 related to trade with Member States and was payable directly to the European Communities, while the remaining £42,800 related to trade with non-Member States and would be payable to the Exchequer in the first instance. The position in regard to other commodities is generally satisfactory.
The approximate amount of these Monetary Compensatory Amounts which is still outstanding is £2.5 million all of which is related to trade with Member States. The Minister is informed by the Department of Agriculture that all debtors are being strongly pressed to clear the outstanding debts and that legal proceedings have been instituted in a number of cases. In addition, some of the amounts outstanding are being progressively reduced where possible by means of offsets of United Kingdom/ Monetary Compensatory Amounts (subsidies) payable to exporters since 17 May, 1976. Where amounts outstanding relate to beef purchased from Intervention and exported to other Member States, the Department, in its role as Intervention Agency for Ireland, is withholding from the traders concerned deposits lodged on purchases of the intervention beef and which would otherwise be refunded to them. The Minister is anxious that all amounts remaining outstanding should be collected as soon as possible, and will keep the Committee informed of the success of the measures outlined above.
1. I am directed by the Minister for Finance to say that in regard to Exchequer financing of CIE the Dáil Committee of Public Accounts has expressed the view that grants voted in addition to statutory grants should themselves receive statutory approval outside the annual Appropriation Act. While the question of making grants additional to a fixed annual statutory grant no longer arises in the case of CIE (since as from 1 January, 1975, with the exception of grants to cover losses by CIE on the Galway Aran Ferry Service, Voted moneys are being paid to CIE in accordance with EEC Regulations) the Committee’s views raise the general issue of the propriety of grants supplementary to statutory grants being made solely on the authority of the Appropriation Act. Furthermore the Minister will have to reply to the Committee’s comments in relation to CIE. The Minister therefore desires to seek a legal opinion in the matter. The background to the CIE case is as follows.
2. Section 6 of the Transport Act, 1964 provided for an annual grant of £2 million from Voted moneys to CIE in each financial year, with effect from 1964-65. The Act provided that the Minister for Transport and Power could, with the concurrence of the Minister for Finance, vary by order the amount of the annual grant in 1969-70 and in each fifth subsequent financial year. The grant was to be used to defray interest and sinking fund on transport stock and the balance for the purposes of CIE’s undertaking in such manner as the Board thought fit.
3. In 1969-70 the annual grant provided for in the Act was increased to £2.65 million by an Order made under the Act by the Minister for Transport and Power.
4. As the grants paid to CIE in the five years to 31 March 1969 were inadequate to the extent of £8.612 million a once-for-all grant of this amount was paid to the Company in 1970-71 from the Transport and Power Vote, specific statutory provision for the grant having been made in the 1969 Transport Act. It was also decided in 1970-71 to pay CIE a further once-off grant of £2.98 million additional to the annual statutory grant of £2.65 million. Both additional grants were included in the second Supplementary Estimate for Transport and Power. It was stated on the face of the Estimate that the grant of £2.98 million would be Voted “contingent on the enactment of legislation”. This grant was given special statutory cover in the Transport Act, 1970; no money was paid to CIE in respect of the grant until after the 1970 Act became law.
5. In 1971-72 a further grant additional to the fixed annual statutory grant was provided for. The additional grant amounted to £4.464 million and was provided for in the second Supplementary Estimate for Transport and Power in 1971-72. This Department indicated that special legislation was unnecessary and consequently the footnote “contingent on the enactment of legislation” was not inserted on the face of the Estimate.
6. In November, 1972 the Comptroller and Auditor General sought the observations of the Accounting Officer, Department of Transport and Power on the absence of specific statutory authority for the additional grant to CIE in 1971-72. Following consultation with this Department the Accounting Officer replied as follows:—
“Legislation was not considered necessary for the additional grant of £4,464,000 referred to above because it was made clear on the face of the Estimate that the grant was additional to the statutory grant. An analogy is to be found in the grants to Health Boards etc. provided for in the Vote for Health, where grants supplementary to the statutory grants are provided for. The footnote to the Supplementary Estimate made it clear that part of the additional grant was for the purpose of enabling CIE to meet interest payments to the Exchequer. Moreover, the position was fully explained to Dáil Éireann in the Minister’s Speech on the Estimate (Dáil Debates Vol. 257 of 25th November 1971, columns 475-477). It is considered, therefore, that the undertaking given to the Public Accounts Committee in the Finance minute of 23rd July, 1952 and accepted by them in paragraph 6 of Part 1 of their report dated 26th February, 1953 has been complied with”.
7. Grants of £6.232 million and £9.6 million additional to the statutory grant were provided for CIE in 1972-73 and 1973-74 respectively. In neither case was the additional grant voted contingent on the enactment of legislation.
8. In the April-December 1974 financial period provision was made in the Transport and Power Estimate for an additional grant to CIE of £6.6 million. This was subsequently increased to £11.3 million by way of a Supplementary Estimate. While this grant was not voted contingent on the enactment of legislation it was decided to avail of the Transport (No. 2) Act, 1974 to give the grant specific statutory cover. The main purposes of this Act was to amend the 1964 Transport Act to enable the introduction from 1 January, 1975 of new subvention arrangements for CIE required under EEC Regulations.
9. The propriety of the additional grants to CIE has been raised by the Dáil Committee of Public Accounts in its Reports on the Appropriation Accounts. Relevant extracts from the Reports and the Minister’s comments thereon are attached.
10. The statutory authority for the issue of Supply is contained in the Central Fund (Permanent Provisions) Act, 1965 and in the annual Appropriation Acts. It is the Minister’s view that, while specific statutes may include provision for grants out of moneys to be provided by the Oireachtas, this cannot be regarded as more than an indication of the intention of the Oireachtas since the precise authority for the actual provision of money can only be given year by year through the medium of Votes and the Appropriation Act. The provision in Section 6 (1) of the Transport Act, 1964 was in the nature of a guarantee to CIE that, subject to ratification through the Vote system and the Appropriation Act, a fixed annual grant of at least £2 million would be made. Given that provisions regarding Voted moneys in legislation other than the Appropriation Act cannot be regarded as more than an expression of intention and since in the case of CIE the Transport Act, 1964 did not stipulate that a grant of “not more than £2 million shall be made”, in the Minister’s opinion the Oireachtas was not precluded from varying or modifying its intention by making provision in the Transport and Power Votes for once-off grants additional to the fixed annual grant laid down in the 1964 Act. The Minister is unable to accept the statement in the Committee’s Report on the 1972-73 Appropriation Accounts that in cases of extreme urgency an estimate may be introduced which is at variance with existing statutory provision provided the additional grant is Voted “contingent on the enactment of legislation”. To do so could mean that, since money could not be issued from the grant until the special legislation had been passed by the Oireachtas, the urgent need which the additional grant was designed to meet might not in fact be met in time. While it is the Minister’s view that the Appropriation Act represents necessary and sufficient authority for the issue of Supply he would accept that it is desirable in principle that a grant additional to a fixed annual statutory grant should, where possible, be enacted in the same corpus of legislation as the fixed grant so that that legislation would reflect the full extent of Exchequer assistance involved. The Minister would be glad if you would confirm the advice already conveyed orally to this Department.
JOHN C. CORRIGAN,
14 September, 1976.
REPORT OF THE COMMITTEE OF PUBLIC ACCOUNTS ON THE 1971-72 APPROPRIATION ACCOUNTS
Annual grants for CIE are voted in accordance with the provisions of the Transport Act, 1964. Additional grants were voted for the company in 1970-71 in accordance with the provisions of the Transport Acts of 1969 and 1970. The additional grant of £4,464,000 voted in 1971-72, to which reference was made in the previous paragraph, received no such specific statutory approval. In this connection the Committee notes that the Public Accounts Committee in paragraph 12 of its Report dated 20 March 1952 expressed the opinion that in any future case in which the introduction of an estimate at variance with existing statutory provisions became necessary such variation should be expressly mentioned and explained on the face of the estimate. The Committee further notes that the Minister for Finance in his minute of 23 July 1952 gave an undertaking that regard would be had to the views of the Committee on this matter.
The Accounting Officer stated that legislation was not considered necessary because it was made clear on the face of the estimate that the grant being voted was additional to the statutory grant. He added that the Minister for Finance had been consulted and that the Minister held that the undertaking given to the Committee in 1952 had been complied with in the present case. The representative of the Department of Finance added that with regard to the enactment of legislation his Department would take the view that the sum involved appeared subsequently in the Appropriation Bill which became the Appropriation Act for that year and this would give statutory cover for the payment.
The Committee is of the opinion that there is a matter of principle involved in this case. It considers that grants voted in addition to statutory grants should themselves receive statutory approval. In this connection it is unable to understand why it was considered valid to pay an additional grant in 1971-72 without the sanction of legislation when it was considered necessary to make specific provision for such grants paid in 1970-71 in two Transport Acts. Moreover, it recalls that in relation to one of these latter additional grants the relevant estimate indicated that it was being voted “contingent on the enactment of legislation”. The Committee finds itself in complete agreement with the views expressed in paragraph 12 of the Report dated 20 March 1952, quoted above.
Furthermore in regard to the claim by the representative of the Department of Finance that the authority of the annual Appropriation Act was sufficient in this case it wishes to reiterate a view expressed by its predecessors in the Report dated 20 March 1952—
“The Committee cannot accept, without qualification, the view that it is open to the Dáil to vary or modify the provision of a statute by way of a Supplementary Estimate which afterwards receives confirmation in an Appropriation Act”.
Minute of the Minister for Finance on the Report of the Committee of Public Accounts on the 1971-72 Appropriation Accounts
Paragraph 35—Supplementary Grants to Córas Iompair Éireann.
The Minister notes the views of the Committee. He is of the opinion that, while the Appropriation Act in itself represents necessary and sufficient statutory authority for the issue of supply, it is desirable that special legislation should be enacted, where possible, to vary or modify an existing statutory provision regarding voted moneys. The Minister considers that, where, exceptionally, the enactment of special legislation may not be feasible, a note on the face of the enabling estimate should make it clear to the Dáil that a grant supplementary to a statutory grant is proposed.
REPORT OF THE COMMITTEE OF PUBLIC ACCOUNTS ON THE 1972-73 APPROPRIATION ACCOUNTS
Supplementary Grants to Córas Iompair Éireann.
The Committee notes that the Minister for Finance is of the opinion that, while the Appropriation Act in itself represents necessary and sufficient statutory authority for the issue of supply, it is desirable that special legislation should be enacted, where possible, to vary or modify an existing statutory provision regarding voted moneys. It further notes that the Minister considers that, where, exceptionally, the enactment of special legislation may not be feasible, a note on the face of the enabling estimate should make it clear to the Dáil that a grant, supplementary to the statutory grant, is proposed.
The Committee does not agree with the proposition that the provisions of an Act of the Oireachtas may be amended other than by further legislation. It accepts that it may be necessary to introduce as a matter of extreme urgency an estimate which is at variance with existing statutory provisions but it considers that such an estimate should not only make it clear that a grant supplementary to a statutory grant is proposed, but it should be voted contingent on the enactment of the necessary amending legislation.
In regard to the additional grant of £4,464,000 voted in 1971-72 without specific statutory approval, the Committee has received no satisfactory evidence to indicate that the enactment of the necessary amending legislation was not feasible and before commenting further on this matter it would welcome any such evidence as is available.
Minute of the Minister for Finance on the Report of the Committee of Public Accounts on the 1972-73 Appropriation Accounts.
Paragraph 22—Supplementary Grants to Córas Iompair Éireann.
The Minister notes the Committee’s view that the provisions of an Act of the Oireachtas may not be amended other than by further legislation. While the Minister is legally advised that the Appropriation Act constitutes such further legislation, he accepts that, as already indicated, it is desirable that a grant additional to a fixed annual statutory grant should, where possible, be enacted in the same corpus of legislation as the fixed grant so that that legislation would reflect the full extent of Exchequer assistance involved. He notes that the Committee accepts that in cases of extreme urgency, an estimate may be introduced which is at variance with existing statutory provisions but he does not agree that, in such circumstances, the additional grant should be voted contingent on the enactment of special legislation. To do so could mean that, since money could not be issued from the grant until the special legislation had been passed by the Oireachtas, the urgent need which the additional grant was designed to meet might not in fact be met in time.
As regards the additional grant to CIE in 1971-72, the position is that special legislation was not introduced in the light of the continuing pressures on parliamentary time and because, in the opinion of the Minister for Finance, the grant had sufficient statutory cover.
REPORT OF THE COMMITTEE OF PUBLIC ACCOUNTS ON THE 1973-74 APPROPRIATION ACCOUNTS
Supplementary Grants to Córas Iompair Éireann.
The Committee notes that the Minister for Finance is legally advised that the Appropriation Act constitutes the further legislation which it considers should be enacted to validate the issue out of voted moneys of grants in excess of the limits laid down in existing legislation. The Committee does not accept this view. The Appropriation Act merely appropriates moneys voted by Dáil Éireann for services described generally in Part 1 of the relevant estimates. The Act does not appropriate moneys under subheads within an estimate, nor does it purport to amend the provisions of existing legislation fixing the limits of grants to be made from voted moneys for specific purposes. Moreover if the principle now being advanced were accepted there would be no need for specific legislation to authorise the issue of grants out of voted moneys. The Committee would welcome an opportunity of studying the legal opinion received by the Minister and the submission on which it was based.
The Committee reiterates its view that where, because of urgency, an Estimate is introduced at variance with existing statutory provisions, the additional grant should be voted contingent on the enactment of legislation. The Committee consequently does not accept the contrary submission in the Minute of the Minister for Finance.
In paragraph 24 of this Report reference is made to further cases which were brought to the Committee’s attention during its examination of the 1973-74 Accounts and in which amending legislation required to validate payments for voted moneys in that year had not been enacted by February 1976. This is a cause of great concern to the Committee in that it amounts to an unlimited delegation of parliamentary functions to the administrative authorities.
22 September, 1976
I refer to Mr. Corrigan’s minute of the 14th instant. The matters set out in paragraph 10 of that minute contains the advice given by me orally to your Department and expresses it better than I recall doing. I would add only two matters for emphasis sake. First—there is no difference in principle between voting moneys to a body which also receives a grant under statute on the one hand, and voting moneys to a body which does not receive any grant under statute on the other hand. In other words, if the Transport Act had not provided for the payment of grants, money could be voted; the fact that the Transport Act does provide for certain grants does not inhibit Dáil Éireann in the exercise of its power to vote—or, not to vote—money.
Finally, the theory that a provision in a statute for the payment of an annual sum is only an undertaking and that the money must still be voted is, in my view, correct. It accords with the history of Parliament that its basic function was to vote money, which I believe to have been enshrined in our Constitution. However, interesting though this theory may be, I think there is no point in entering into this vast area for study since the need to do so does not arise. Should a statute provide for the payment of a grant and Dáil Éireann refuse to vote it the legal implications will have to be considered but, hopefully, not until then.