Committee Reports::Report - Appropriation Accounts 1974::10 February, 1977::MIONTUAIRISC NA FINNEACHTA / Minutes of Evidence


(Minutes of Evidence)

Déardaoin, 10 Feabhra, 1977.

Thursday, 10th February, 1977.

The Committee met at 11 a.m.

Members Present:


H. Gibbons,




C. Murphy,



DEPUTY de VALERA in the chair.

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


Mr. P. L. Mac Domhnaill called and examined.

656. Deputy H. Gibbons.—On the Appropriations in Aid, from whom would you receive audit fees?

—We collect audit fees in respect of certain semi-State bodies’ accounts which we audit.

657. Chairman.—We would like to know about this office. What staff have you?

—On the 1st January 1977 we had a total staff of 76, that includes everybody, from myself down to the typing and messenger staff. We have an auditing staff out in the field, so to speak, divided into two areas, the departmental accounts i.e. the appropriation accounts, and the semi-State accounts. Our staff out in the field is approximately 47 dealing with departmental accounts and 19 dealing with the semi-State accounts. The rest of the staff would be the deputy directors in head office, myself, the typing staff and so on.

All these staffs are included in your first total figure of 75?

—Everything is included.

The men in the field with the semi-State bodies as well as the headquarters staff?

—Yes. Our auditing staff out in the field comprises 47 on Votes and 19 on semi-State accounts.

658. Are you in a position to say what staff the Comptroller and Auditor General had, say, 20 years ago?

—I am. We had a staff at that stage of about 67. Taking 20 years ago, we have built up now to 76. Going back over the years it varied slightly but in 1953, 1954, 1955 and around that time there was a total staff of around 67. At that time we were, of course, doing the same appropriation account audits and some semi-State accounts. We were somewhat less engaged on the semi-State accounts at that time and much the same number of staff were engaged on the departmental audits as there are now.

659. There has been an increase, first of all, in the semi-State audits which has taken up staff. Is that correct?


The increase in activities and numbers of the semi-State bodies has resulted in your office having to put more men out of your pool on that work. Is that correct?

—That is correct. Any of the increases which we have got in the meantime could be said to be almost entirely because of the semi-State side of our work.

660. Let us take the regular civil service side of your work if I may broadly classify it that way. There has been a considerable increase in activity in certain Departments.

—There has indeed.

661. With regard to the Health and Social Welfare Departments, do they involve more work as the amount of financial business in these Departments has extended?

—They do, of course. The activity of the Departments has increased considerably. The expenditure has increased but, of course, an element of that would be inflation. However, discounting the element of inflation altogether——

The actual volume of activity.

——the new areas of activity have increased considerably. If you take the Departments of Education, Agriculture, Social Welfare, Local Government, Health and so on, there has been a considerable increase.

662. Let us take them one by one. You mentioned the Department of Education. In what way broadly has the audit load increased for that Department?

—If you take the Department of Education, you have new areas of expenditure which have all grown up in fairly recent years. You have expenditure on the comprehensive and community schools. You have free school transport. You have the increase in respect of vocational education and you have the regional technical colleges. All these are new areas.

663. What is the position regarding the Department of Local Government?

—The main areas there would probably be the housing subsidies and the question of the amount of rates to be collected by the local authorities when it was decided that certain housing charges formerly borne by local authorities would be progressively reduced over a four-year period.

Does that increase the audit load?

—Yes, because it causes more expenditure on the Department.

664. What about the Department of Social Welfare?

—The increase in Social Welfare over recent years has been considerable with the changes in structure in regard to social assistance and so on. The lowering of the pension age and the extension and improvement of the social welfare services must be taken into consideration.

665. What about the Department of Health?

—The expenditure there is very big. There are the grants to the Health Boards which run into several million. There are also the Voluntary Hospitals and the General Medical Services Payments Board which carries out certain functions in respect of the Health Boards with regard to payments in respect of health services.

666. What about the Department of Agriculture in the EEC context?

—This is a very big area. The Department itself has always been a very important audit but since our entry into the EEC it has in a way, become two departments. It was decided at that time that the Department would act as the Intervention Agency in respect of the Common Agricultural Policy and that meant a completely separate area of activity, all the intervention buying of agricultural commodities and so on. We are involved and have a commitment to the Community to audit the accounts of the Department in their capacity as Intervention Agency, and this is completely separate from the Department’s Appropriation Account. That is a huge area.

667. These would not exhaust the Departments which could be named, but having regard to the total increase in the amount of public money that is involved, say, over 20 years, could you say that that increase is not all inflation, that a considerable amount of that increase is attributable to increased activity and volume of work? Would you be prepared to say anything on that line? I do not want to put words into your mouth.

—I would definitely be prepared to do so. As I said at the beginning, even discounting inflation there has been a considerable increase because of the increased activity and this, of course, involves us in extra auditing work and an increase in the volume of our auditing work. It is something which concerns me very much, that we should have the capacity to carry out the work that we have to do. The staff situation is one of my main worries.

668. The Comptroller and Auditor General has separate statutory functions and he is, in fact, a Constitutional officer. Would you be in a position, if the Committee were to request it, to set out or to brief the Committee with details showing the increase in the volume of audit work as against the inflation increase? What I am saying is, if you had the same activity and, say, the same accounts, it is immaterial whether every sum in those accounts was multiplied, say, by three and even if each particular sum was multiplied by different figures it does not matter. The audit load would be the same. But if there is increased activity, if there are other accounts, if there are other subheads to be audited and there is a wider area of reconciling partial accounts, I should imagine that would increase the audit load. Would you be in a position to supply the Committee with information if it should seek it?

—I would indeed, Mr. Chairman. It would be relatively easy to compare the situation that I gave at the beginning taking, say, a period 20 years ago and the area of activities of the Departments then and the staff that we had engaged on audits then with the situation now and the staff we have engaged on those audits now.

669. I notice in the account that whereas in many other Votes there is usually something for extra remuneration for overtime and matters of that nature, this does not appear in your Vote. Does this mean that your staff is no more than normally employed?

—We do not normally have overtime arising on the audits that we are carrying out. Of course, we would be working in Departments and would have recourse to the accounts staff in Departments and so on and have to have recourse to the books and records of the Departments and it would not be feasible that the auditors should be working overtime.

In other words, you of necessity have to work during normal office hours?

—Of necessity.

Because the books are only accessible to you during normal working hours?


Mr. Mac Gearailt.—In fairness to my Head Office staff, I should say they work at home and at weekends.

Chairman.—I have not any doubt about that. That was not the burden of my question. It was to understand the situation under which you are working. It is a question of a limited staff confined in effect to limited hours. Is not that what it boils down to?

—It is.

670. There is a limit to the thoroughness of an audit. Actually in any event in such a huge undertaking as the State there would be a certain amount of dependence on spot checks?

—Yes. In auditing there is a certain element of discretion but, of course, the auditor must do enough testing in order to be reasonably satisfied. Quite frankly, what worries me is that, with the limited staff we have engaged on the audits, I could see that there may be a danger of our getting into a situation where we would regard as sufficient what we are of necessity confined to doing rather than deciding on what we need to do and being able to do it. The level of our activity is being determined by the staff that we have to do it, whereas an auditor should do what he considers sufficient.

671. What has been the increase in your staff between now and say, 1957?

—The increase has not been all that great, in fact.

You gave the figure of 67 for 1954-55 and the appropriate figure is 76 now. That is not a very big increase.

—I would not think so.

672. Deputy Moore.—In the case of Voluntary Hospitals, is any charge made for auditing their accounts?

—We do not audit the accounts of Voluntary Hospitals. The Voluntary Hospitals’ accounts are audited by other auditors. They have their own auditors. Our involvement arises because the Department of Health pays the Voluntary Hospitals their deficits and the deficits would be determined from their audited accounts.

Mr. Mac Gearailt.—We have prepared an application for extra staff and it is before the Department of the Public Service at the moment. I have been personally perturbed about the increased work load, particularly in the semi-State area, and when my former Secretary decided last March that he wished to retire I took the opportunity of having a look at the position. Mr. Mac Domhnaill, as well as being Accounting Officer is Director of Audit and, in fact, he is Director of Audit in all the areas that he has specified here to-day. I thought the time had come to have two Directors of Audit, one for commercial or semi-State bodies and one for Government Departments. On my instructions the former Secretary made an application to have one of the Deputy Director of Audit posts upgraded to Director of Audit who would take over the semi-State bodies and the Secretary would continue to look after the Government Departments, Appropriation Accounts and so on. I am sorry to say that this application has been turned down. I have had to wait ten months for a decision. We have, apart from that, as I have said, sent on an application for extra staff just before Christmas. We have had a request for some extra information regarding this application and I am only hoping that we will be more successful on this occasion.

673. Deputy H. Gibbons.—Am I anticipating things if I ask what influence, if any, the new committee dealing with State and semi-State bodies will have on this question?

Mr. Mac Gearailt.—We have not been consulted about this new committee. We have not been asked to perform any function, good, bad or indifferent in its regard. I do not anticipate that my Office will have any commitments to this committee.

674. Chairman.—Is the additional load coming on you principally from the semi-State bodies or from the other sources?

Mr. Mac Gearailt.—It is coming from both sides. I am depending on my Director of Audit for advice on all of these accounts but obviously if one man has to service them it is not a fair load to put on him.

Deputy Griffin.—Would it be right for us to lend our weight to the demands of the Comptroller and Auditor General in seeking assistance because, of all offices, it is absolutely imperative that the Comptroller and Auditor General should have sufficient staff to deal with the problems that arise.

Chairman.—We will be considering our report later on. It is quite clearly a matter of extreme public importance. The Comptroller and Auditor General is a Constitutional officer, an essential part of the constitutional set-up to preserve the financial integrity of the State administration and, having regard to that very important duty, the evidence before us here is material but this is not the time for us to comment. This is the time we get our information. Quite obviously there is an indication of what could be a serious issue here. I do not think I should go any further now. We can follow it up later.

675. Deputy C. Murphy.—Dealing with the total Vote figure of £128,000, do Estimates in other Departments contain sums which are strictly used for services that you do?

—No. Departments do not pay for the audit of their accounts. It is a Constitutional function of the Comptroller and Auditor General and there is in fact no fee involved at all in regard to the work that we do for Departments. That is our function.

Chairman.—That is your function.

676. Deputy C. Murphy.—In the Vote for Public Works and Buildings, is there a sum put aside in the Estimate in connection with auditing?

—No. This is the allied service situation in that Public Works and Buildings would provide something. They are responsible, of course, for all of the accommodation for all Departments.

And similarly with the Stationery Office?

—Yes. They would provide us with our requirements in that area.

677. Chairman.—Your functions in regard to Civil Service Departments are, first of all, based on our own Constitution but, by adaptation, we have taken in the Acts of 1866 and 1921 and so on and these constitute the statutes?


We will have to study these from the point of view of the efficiency of the powers in the light of what you have said. I would be obliged if you could refer me to any other statutory authorities governing you. There is the Exchequer and Auditor Act of 1866. There is the Act of 1921.

—There is our own Act of 1923.

Is there any other Act that is material in connection with your functioning?

—No. The 1923 Act is important because it was the Act which provided for the setting up of the Office of Comptroller and Auditor General.

It adapted the 1866 and the other Act.

—In the 1866 and 1921 Acts there were other things besides but they were adapted, yes.

678. Are there any other rules, regulations, or established traditions that govern you in this area that you feel everyone is bound by?

Mr. Mac Gearailt.—What we would regard as case law has been laid down in Reports of previous Public Accounts Committees.

—In regard to some of the companies which we audit we would, of course, be governed by the Companies Act.

Chairman.—That is external. I am concerned with your primary constitutional purpose. It raises the question as to whether the Comptroller and Auditor General should at all be responsible for the audit of semi-State bodies. Of course, that is all before a committee now and we will not comment on it here at the moment. It is for another committee.

The witness withdrew.


Mr. P. Ó Colmáin called and examined.

679. Chairman.—Paragraph 55 of the Report of the Comptroller and Auditor General reads as follows:


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 £5,823,617 at 31 December, 1974, engineering stores to the value of £89,185 were held on behalf of other government departments. Stores other than engineering stores were valued at £1,471,219 including £714,866 in respect of stores held for other government departments.

Including works in progress at 31 December, 1974 the expenditure on manufacturing jobs in the factory during the period amounted to £95,873, expenditure on repair work (other than repairs to mechanical transport) to £197,355 and expenditure on mechanical transport repairs to £33,121.”

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 1974 as required by statute. The paragraph also gives the value of engineering and other stores on hands at 31st December, 1974, including stores held on behalf of other Government Departments.

680. Chairman.—Paragraph 56 of the Report of the Comptroller and Auditor General reads as follows:


A test examination of accounts of postal, telegraph and telephone services was carried out with satisfactory results. The net yield of Revenue for the period 1 April, 1974 to 31 December, 1974 and for the year 1973-74 is shown in the following statement:—







Postal service



Telegraph service



Telephone service






£42,500,000 was paid into the Exchequer during the period leaving a balance of £2,377,928 at 31 December, 1974. Sums amounting to £41,014, due for telephone services and £1,432 for telegraph (telex) services provided in previous years, were written off during the period 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. It also gives the net yield of revenue from each of the three services in the period under review together with the figures for 1973-74.

Chairman.—You cannot, of course, make comparisons because it was a nine-month period?

Mr. MacGearailt.—No.

681. Chairman.—Paragraph 57 of the Report of the Comptroller and Auditor General reads as follows:

Post Office Savings Bank

The accounts of the Post Office Savings Bank for the year ended 31 December 1973 which had not been presented to me for audit at the date of my previous report, 31 December 1974, were later received and submitted to a test examination with satisfactory results.

The accounts of the Savings Bank for the year ended 31 December 1974 were also submitted to a test examination with satisfactory results. The balance due to depositors, inclusive of interest, amounted to £233,272,254 (including £68,010,015 in respect of liability to Trustee Savings Banks) at 31 December 1974 as compared with £212,230,943 at the close of the previous year. Interest accrued during the year on securities standing to the credit of the Post Office Savings Bank Fund amounted to £20,526,950. Of this sum £16,560,098 was applied as interest paid and credited to depositors, management expenses absorbed £1,238,844 and the balance, £2,728,008, remained as a provision against depreciation in the value of securities.”

Mr. Mac Gearailt.—In my report for 1973-74 I drew attention to the delay in submitting to me for audit the accounts of the Post Office Savings Bank for 1973. By the time the Committee came to consider that report in December, 1975, the matter had been put right and I was in a position to report that the accounts for 1973 had been duly audited. However at the date of this report—September, 1975— the position was still to be regularised, hence the reference to it in this paragraph. The paragraph also gives information on the operations of the Post Office Savings Bank in 1974. It will be noticed that the balance, including interest due to depositors at the year end, shows an increase of £21 million approximately over the previous year end balance.

682. Deputy Griffin.—On subhead F.— Engineering Stores and Equipment—there is a provision of £19½ million; is it the policy of the Department to have the equipment, where possible, manufactured in this country.

—The Department is always very glad to be able to place orders for equipment which is manufactured in Ireland. The general rules of purchasing are laid down by the Minister for Finance and provide for the measure of preference that may be afforded for Irish manufacture or assembly. We work, as all Departments do, within the general rules laid down. Quite a substantial part of the stores are purchased within the country but, on the other hand, a great deal of exchange equipment is purchased from outside.

Chairman.—A good deal of sophisticated technical equipment is not manufactured in Ireland?

—It is not made here.

683. Deputy H. Gibbons.—Was there any particular reason why the payments to contractors were lower? Was it because they were not paid or the work not undertaken?

—There was no particular reason except that the accounts did not come to hand to the extent we expected. It was an unusual year in that there were only nine months and therefore accounts were rather distorted as compared with the 12-month period.

684. Chairman.—On subhead K.—Commissions and Special Inquiries—these were things that could not be foreseen?

—Yes. One was the settlement of a case brought.

685. By and large, the estimation of very large sums has been, percentagewise, very satisfactory. That is something with which the Committee is always concerned. On the Appropriations in Aid, what would the works carried out for services rendered to outside bodies be which would bring in receipts?

—They would include receipts from county councils where, for example, they had occasion to move Post Office plant for the purpose of widening roads. We do that at our expense and they make good the cost to us. There are occasions when private persons cause accidental damage to Post Office plant. Sometimes when the ESB is second comer with wires where we have already wires, the cost of diverting our lines will be borne by the ESB.

686. You have a detailed list of losses which amount to £58,000. Robbery and burglary have accounted for substantial sums. In other words, criminal activity has accounted for a considerable amount of your losses? Generally, the losses can be identified as being due to people outside the Department.


The extent to which the Department is at financial risk because of these activities is indicated by this list which would be a cause of concern to any administration.

687. Deputy Griffin.—The small amount given in compensation for the loss or damage of personal letters and parcels is a clear indication of the efficiency of the postal services.

—It is not for me to comment on that.

688. Chairman.—With regard to the losses which resulted in no charge, does that mean that the persons responsible were identified and paid up?

—In some cases yes; in other cases the Garda caught some people. There is an item of £9,648 there in respect of theft and burglary where there was no charge. I think £8,300 of that was recovered by the Garda from the burglars in one particular case. In the case of irregular negotiations of money orders, we would disallow the amounts to the banks that had cashed money orders which had gone into wrong hands.

689. You would be able to do that? Have you any difficulty with blank money orders?


People do buy such?

—I do not know.

You can buy a blank money order without having the payee’s name endorsed at the time of buying it and that sort of thing?

—The name of the payee must be known to the Post Office and advised to the office where it is to be cashed and, unless the person going in to cash that order can say who the sender is, it will not be cashed.

In the past I have seen postal orders left blank.

—We have no real trouble with postal orders.

Simply because they are paid for and it is immaterial to you who negotiates them?

—If they get into wrong hands, somebody else is at the loss.

690. That is the point. Sorry, I was thinking of the wrong thing when I spoke of money orders. Under the heading “Loss of Stores”, you give statistics of transactions during the period. What is the relevance of putting that paragraph just there?

—I think only to give an indication of the scale of the activities.

691. I see. Under the heading “Extra Remuneration”, overtime was big but you have a very large staff.


692. Deputy Griffin.—As a matter of interest, would the Accounting Officer give us a rough indication of the cost to the taxpayer of the vandalism done to telephone kiosks?

—I have a note that there were over 3,600 incidents of vandalism and 90 per cent of these were in the Dublin area. I have not the figure in regard to cost. The cost in regard to stores would be relatively small. The major cost would be in relation to labour attending to the work. Of course, the greatest cost is to the unfortunate customers who cannot make calls from these kiosks. It is a very disturbing thing, especially in some areas at weekends where the people are precluded from making calls because of vandalism.

693. Can any of this cost be recouped from, say, the county council or the corporation as malicious damages?

—In cases where the vandalism costs £25 or upwards, we would make a claim.

How successful are the claims? Are they upheld?


694. Chairman.—In regard to postal services and revenue from them, is the volume of the business increasing or decreasing at the moment?

—It is virtually steady. The margin either way would be very slight, only in terms of 1 or 2 per cent.

Normal fluctuation?


Naturally revenue increases then under those circumstances, because of inflation and increases in charges?

—Because of the increases in our charges we will be getting more revenue.

695. Would the same apply to telephones?

—In the case of telephones, of course, traffic is always increasing and the rate at which it increases varies. In the last few years it has been increasing at a slower rate than previously because of general conditions but it still is increasing, as it is bound to do with so many extra subscribers being taken on.

696. Deputy H. Gibbons.—The Estimates volume shows an increase of about 140 in the staff of the Minister and secretariat and a reduction of about 100 in the accounts branch. What is the explanation for this?

—There was, in fact, an increase. I thought the Deputy said there had been a fall in the number employed and that had me puzzled. The numbers increased in both, in the Minister’s and Secretariat and in the Accountant’s Branch.

This seems to be a big increase. What is the explanation?

—Most of it could be attributed to the growth and development of the telephone system. The Deputy will see that there was an increase of 900 in the engineering branch in the same period. I know that in the Secretariat a large part of the increase was due to the staff on telephone administrative work, on signing up applicants and dealing with their needs. The accounts work has been progressively increasing with the increase in the volume of business. To allay any doubts, all increases in staff have to be approved by or on the authority of the Department of the Public Service.

Chairman.—Thank you. The estimation here has been very close.

The witness withdrew.


Mr. F. A. Hynes called and examined.

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

Subhead G.—Old Age Pensions (Non-Contributory)

In the period under review the procedures for the award of Old Age Pensions were revised to permit provisional pensions to be paid on the recommendations of Social Welfare Officers pending the making of awards by the relevant Old Age Pensions Committees. Arising out of the revised procedures provisional and final pensions were paid concurrently to a number of pensioners. I have asked the Accounting Officer for information regarding the number of overpayments which have come to light and the total amount involved. I have also asked for information regarding the steps taken to prevent overpayments of this nature.”

Mr. Mac Gearailt.—This paragraph refers to overpayments which occurred as a result of revised procedures for the award of non-contributory old age pensions. In the course of his long reply, the Accounting Officer explained that, following the extension and improvements provided for in the Social Welfare Acts, 1973 and 1974, there was an abnormal increase in the volume of work in this area. In accordance with the requirements of the Minister for Social Welfare to have the rate increases, expansion in numbers and other improvements implemented within the short time available, this work had to be carried out at an abnormally intensified work rate involving prolonged overtime and extended work weeks which gave rise to a corresponding increase in the incidence of excess payments through errors on the part of the staff concerned. Extra staff had to be trained and existing staff had to learn new procedures because they had no previous experience in regard to some of the improvements introduced. In regard to the two specific matters on which I sought information, the Accounting Officer informed me that the amount of all overpayments written off in 1974 was £20,700, but that it would not be feasible to separate overpayments which arose as a result of the new procedure from other overpayments and that it could not be said that any of the overpayments arose directly from the new procedure. Regarding the steps taken to prevent overpayments of this nature in future, I am informed that the procedures are kept under constant review to eliminate deficiencies, where necessary, and to prevent irregularities, including duplicate payments, and it is considered that the controls in operation are adequate to prevent duplication of payments in normal circumstances. As I pointed out, the Accounting Officer furnished a rather full explanation and I have summarised it as best I could.

698. Chairman.—Will the Accounting Officer tell us exactly what the problem was here?

—In the year in question, 1973, the budget increased the rates of pension and benefit in every service the Department was administering and many new services were brought in. In the case of non-contributory old-age pensions, the rates were not only increased but the pension age was brought down by a year and we also paid increased rates for children. In 1974 for the first time we paid an allowance for the adult dependant of a non-contributory old-age pensioner. The reduction in the pension age by a year meant that in one year alone the outdoor and indoor staff had to deal with double the average number of claims we would normally deal with in the one year. We were inundated with claims and we had, at that time, a great deal of young and inexperienced staff. We were at the tailend of a period in the civil service when the service was not attractive to men. A lot of young girls came in and very often stayed in our Department for only a few months before going away to university, to teaching or nursing. The result was that we found great difficulty in acquiring a substantial backing of trained staff. As an instance, I mention one branch where there were about 250 clerical assistants and clerical officers. At one period just before that, the senior girl in the whole place had only two years service, which shows how much we were dependent on a very junior and inexperienced staff. With a change in the rules and conditions and because we were working under great pressure it was inevitable that some errors would occur. Ordinarily in the Department mistakes are solely the result of human error. In that particular year and in the following year, we were really ground into the ground as regards work. We were congested in accommodation. In one section they did not even have enough chairs to sit on and some of the staff had to take turns sitting on the ground. They shared tables also. The whole aim was to get out the pensions as quickly as possible. We found that not only was there a build-up of claims in the Department at one stage but there was a build-up of claims with Pension Committees. Pension Committees, especially in rural areas, meet infrequently, sometimes only every three months. The result was that claims were accumulating and we were getting a lot of complaints. The Minister said we must do something to improve the situation, so we brought in a new procedure which is one of the things the Comptroller and Auditor General was complaining about. We took a step, which was rather unprecedented. When an officer had recommended the pension for a person, it had to go for approval to the Pension Committee. We decided we should award pensions on a provisional basis to save time. The committee’s approval came later and even if the committee took a different line there was no danger of an overpayment as Pension Committees almost invariably recommend a higher pension in cases where the officer recommends a pension at a rate lower than the maximum. But it did happen because of procedures adopted at the time and the accumulation of work, that overpayments did occur. Duplicate books were issued to people and duplicate arrears payments were sent out. That was largely due to inexperience on the part of the staff and to the difficult conditions under which they worked. The revised procedures are still in operation and are working satisfactorily. There is an indication that the rate of error is going down and that the amount being overpaid is much smaller than it was. There is still a weakness in the organisation in that there are three separate sections involved and they are not as closely linked as I would like. We did not get a chance to do any real organisation and methods study on this aspect of the work because the following year we had the same thing again—another year down in the age limit and we had the increases in payments in October. This means that we now issue revised pensions twice a year and issue books twice a year. We got a break from this last year—the pension age was not lowered—but we had an October increase for pensions. The pension age has come down again this year but we have a longer time in which to implement the change. We have until October. We had a very short period in 1974. We are proceeding with computerisation of our work in the Department. We have made quite a good deal of progress in that field and it has been very helpful. We intend to move into the pension field in due course. I feel that at this juncture it would not be worth while doing a major reorganisation of the sections concerned because next year we expect to be carrying out a large scale reorganisation when computerising the work. At that stage the danger of error will be very considerably reduced. I find that most overpayments last year occurred through concealment of means, not through departmental errors.

699. The pressure has its origin, if I understand you properly, in your authority and the duty laid on you by legislation? There has been nothing irregular?

—That is so.

You complied with the legislation which, in fact, imposed this activity upon you?


700. Would it be fair to say that, and this would be a matter of interest to the Dáil as the legislature, the rapid impact of legislation of this nature on an administering Department can impose almost intolerable administrative burdens and strains immediately in the short term?

—In the short term, yes.

In other words, it is desirable when preparing and considering such legislation, to consider the administrative implications as well?

—One might say that but I must point out we did not fall down on the job. We managed to meet the deadline set for us. Prior to 1973, the budget was usually in April and we did not increase the pension until August or October. Then it was assistance payments in August and insurance payments in October. In fact, at an earlier stage the increases were made in October and January. Suddenly in 1973 we had to implement the increases by 1st July. The budget was in mid-May that year so the time scale was cut down.

Being wise after the event, one could say that in making changes of this nature it would be wise to foresee and provide for the administrative difficulties involved?

—The consequences, yes.

That is all the more creditable. The situation is reasonably understandable.

701. Paragraph 63 of the Report of the Comptroller and Auditor General reads:

Overpayments of Social Assistance and Social Insurance Benefits

Sums recovered in respect of overpayments of social assistance charged in prior years’ accounts were £25,379 in cash credited to appropriations in aid and £19,279 withheld from current entitlements. Overpayments amounting to £24,092 were treated as irrecoverable. Assistance overpayments not disposed of at 31 December, 1974 amounted to £178,692 as compared with £154,945 at 31 March, 1974. Overpayments of benefits from the Social Insurance Fund outstanding at 31 December, 1974 were of the order of £430,000 as compared with £325,000 at 31 March, 1974. Forty-three individuals were prosecuted for irregularly obtaining or attempting to obtain assistance or benefits. Convictions were secured in all cases.”

Mr. Mac Gearailt.—This paragraph is for information. I have nothing to add.

702. Deputy H. Gibbons.—On subhead L,—Social Assistance Allowances—old age care allowances for non-pensioners for which £1,000 was provided in the Estimate, under what circumstances does this arise?

—Old age care allowance has nearly disappeared. I do not think we have any cases at all for payment since the raising of the upper means limit for non-contributory old age pensions in the Social Welfare Act, 1973. There are no cases at all now. That is a token sum in case some cases should arise.

703. Chairman.—There is a very substantial sum under Appropriations-in-Aid of roughly £80,000. How is that made up? It is under “Miscellaneous”.

—I can give you a breakdown. Interim payments of assistance, £78,000 in 1974; refund of EEC travelling expenses, £3,348; impressed stamping fees, that is, fees paid for using stamping machines for insurance cards, £924; agency services, £765; refunds of social insurance contributions paid in error, £759; recovery of salaries and wages overpaid in prior years, £297; proceeds of sale of cars and parts, that is, cars used by some of the outdoor staff, £273; refunds by local authorities of miscellaneous grants, £144; cash surpluses at local offices, £101; sundry items, £112. Sundry items cover refund of fraudulent cashing of children’s allowances orders, charge for collection of insurance premiums for unestablished staff, refund of overpayment to a medical certifier, sale of waste paper and unclaimed salary deductions.

704. Since the first item is rather big would it not be advisable to put that as a separate heading and list the others in a running paragraph, as is done in other accounts?

—We could look at that.

Would you, please?

—That item arises because when people claim a social insurance benefit we have to check their entitlement, especially the ones involved in insurance in England. We pay them often, as an interim measure, unemployment assistance or a non-contributory old age pension until their claims to insurance benefit are determined and then we recover the assistance paid from whatever insurance payments they are entitled to.

I suggest, especially when it is the larger part by far, that a separate heading and the rest in a simple running paragraph would be an improvement. We will leave it to you to consider that?

—We will consider that.

705. Deputy Griffin.—Is the Accounting Officer satisfied with the co-operation from his British counterparts, considering there are so many emigrants returning?

—Very much so but they have not got exactly the same system as we have here. If we are looking for an insurance record or current record they have to write to the local employment exchange and it often takes time to get it back. If the person has moved around a lot it is difficult to check records, especially recent records, but that is not due to lack of co-operation. We have very good relations with the authorities there.

706. Chairman.—I believe, Mr. Hynes, this is the last time you will be present at the Committee. The Committee would like to wish you happiness in your retirement. It is pleasant to see that the accounts are in an efficient state and you are leaving the Department in good hands.

—Thank you very much.

The witness withdrew.


Dr. B. Hensey called and examined.

707. Chairman.—Paragraph 64 of the Report of the Comptroller and Auditor General reads:

Expenditure in excess of Authorised Issues

In paragraph 6 above I referred to payments from seventeen Votes in excess of the amounts authorised by Section 2 of the Central Fund (Permanent Provisions) Act, 1965. Excess payments of some £13,730,000 were made from this Vote. I sought the observations of the Accounting Officer who has informed me that until 30 September, 1974 expenditure was within the authorised amount and it was felt that an excess would be avoided if the estimate were passed when Dáil Éireann re-assembled in October, 1974. In the event the estimate was not passed until November. The Accounting Officer explained that most of the expenditure from the Vote is on grants to Health Boards and other health agencies to whom no alternative source of funding would have been available had further health grants been withheld at the end of October. This would have led to non-payment of salaries of permanent officers and of certain statutory allowances and cash benefits. In the circumstances, grants were issued at the end of October in anticipation of the approval of the estimate by the Dáil and on the understanding that the estimate would be taken at the earliest possible date.”

Mr. Mac Gearailt.—This paragraph deals with the last of the 17 cases of overexpenditure referred to in paragraph 6. The circumstances in which the overexpenditure occurred, as explained by the Accounting Officer, are outlined in the paragraph.

Chairman.—We are familiar with this problem. You, Dr. Hensey, are one of the Accounting Officers who answered the Comptroller and Auditor General in good time. I commend you in that regard.

—Thank you.

708. Paragraph 65 of the Report of the Comptroller and Auditor General reads:

Subhead Q.—Appropriations in Aid

In paragraph 66 of my previous report I drew attention to regulations made by the Council of the E.E.C. which prescribe that a Member State shall refund social security benefits provided on its behalf by another Member State. In that paragraph I referred to an agreement under negotiation between this country and the United Kingdom for such refunds on a lump-sum basis and to a payment on account, £1,500,000, made by the United Kingdom in respect of its estimated net liability for 1973-74, pending completion of the agreement. A further payment on account, £1,300,000, was received from the United Kingdom in the period under review in respect of its liability.”

Mr. Mac Gearailt.—This paragraph, which is for information, refers to the arrangements regarding social security benefit arising out of Ireland’s membership of the EEC.

709. Chairman.—Does the Accounting Officer wish to make any comment?

—No, except to say that we have continuing discussions with the United Kingdom authorities on this arrangement. It continues to work satisfactorily.

710. We will pass on now to the Vote itself. On subhead G.—Grants to Health Boards—I take it this was the occasion of the Supplementary Estimate. Is that right?

—Yes. It was expenditure which arose and it needed a supplementary for the additions to these grants.

711. May I ask a question which is not germane to the accounts but there is a subhead about fluoridation here. Under subhead P—Fluoridation of Public Water Supplies—a great many water supplies still come from natural sources, such as lakes and rivers. As the danger of pollution increases, is the old filter method sufficient? Will it be, or is it already, necessary to treat the water chemically, for example, using a little chlorine or something like that?

—I am not an expert on methods of treating water but, as far as I understand it, the water is treated in different ways and when it has been treated then the fluoride is added for this specific purpose.

712. There is no additional cost arising to the State because of the necessity of adding other chemicals? That really would be the relevant question here.

—If there were such a cost it would certainly not be on the Health Vote. It would be the responsibility of the local authority which was arranging to supply the water. Our responsibility relates to the cost of the fluoride which is added and of the apparatus for adding it.

On occasions in the Dublin water supply you realise that there is some chlorine there; it is almost as strong as in a swimming pool. However, I realise you are bound to get pockets. I wanted to know what cost was involved but that is not your responsibility. Would your Department, as the Department of Health, not have an interest in supervising the suitability of water for human consumption, in a general way?

—In a general way the Minister for Health would be concerned, but the responsibility is local, and local authorities in making their arrangements have the guidance of the local medical officers of health on the quality of the water provided. Beyond a general interest in it we would have no specific function.

The witness withdrew.

The Committee deliberated.

The Committee adjourned.