Committee Reports > List of Committees > Dáil > 1978 > Committee of Public Accounts > Interim and Final Report - Appropriation Accounts 1975

APPENDIX 2

MINUTE OF THE MINISTER FOR FINANCE ON REPORT, DATED 21 APRIL, 1977, OF THE COMMITTEE OF PUBLIC ACCOUNTS ON THE APPROPRIATION ACCOUNTS, 1974

PART 1—GENERAL OBSERVATIONS

Paragraphs 2, 4, 5, 6, 7, 14, 15.

These paragraphs do not appear to call for comment.

REPORT DATED 13 JULY, 1972.

Paragraph 1—Recovery of moneys.

The legal proceedings which the Minister had instituted in the German Courts against a German citizen for the recovery of certain moneys have not yet concluded. The Minister will inform the Committee of the outcome of the proceedings.

REPORT DATED 18 JUNE, 1973.

Paragraph 3—Payments to Special Regional Development Fund (Grant-in-Aid).

The Government inquiry into the appropriate organisation and structures for the planning, co-ordination and discharge of the functions of Government at subnational levels is continuing. The Committee will be kept informed of developments in relation to the further consideration of payments to the Special Regional Development Fund in the overall context of this inquiry.

REPORT DATED 30 OCTOBER, 1975.

Paragraph 8—Local Government.

Appendix 9.

Some of the revised procedures to reduce the possibility of road tax evasion which were provided for in the 1976 Finance Act have been introduced. Sections 73 and 74 of the Finance Act, 1976 which deal with non-display of a tax disc have recently been implemented by the Gardaí throughout the country, supplemented by traffic wardens in Galway and Naas. It is hoped that traffic wardens in Dublin will be involved in the operation of these sections later in the year. Sections 68 (recovery of arrears of tax as a simple contract debt) and 72 (automatic payment of arrears of tax in addition to a fine in cases of conviction for non-payment of road tax) of the Act will be brought into operation as soon as practicable.

As yet there is very little information about the effectiveness of the anti-evasion measures introduced in the 1976 Finance Act. However, recent indications are that the extension of the implementation of fines-on-the-spot for non-display of a current tax disc throughout the country has had a significant effect on the numbers of people taking out licences.

The foregoing measures are subject to review in the light of the abolition of road tax on cars not exceeding 16 horse-power.

Arrangements for the computerisation of motor vehicles registration are under way. The new computerised system was introduced in the Cork Motor Tax Office on 1 June, 1977 and in the Dublin Motor Tax Office on 1 September, 1977. It is proposed to extend the system to other motor tax offices throughout the country on a phased basis.

Paragraph 9—Agriculture—Recovery of Loans.

The advice of the Attorney-General on the circumstances in which recovery of the loans made to the meat industry in 1972/73 could be effected has recently been received. The advice indicates that the Minister for Agriculture has a satisfactory legal basis for pursuing the recovery of these loans, and the Department of Agriculture have been asked for their early views on the action that should now be taken. The Committee will be informed of developments.

Paragraph 10—Office of the Minister for Education—National College of Art and Design.

The Minister is reminding Accounting Officers of the necessity to ensure, insofar as they can, that State-sponsored bodies and other organisations for whose funding they have a measure of responsibility submit their accounts for audit without undue delay.

REPORT DATED 24 JUNE, 1976.

Paragraph 11—Public Works and Buildings.

Competitions for appointment as Professional Accountant, Grade III, in the Office of Public Works were held by the Civil Service Commissioners in December 1976 and June 1977. Both were unsuccessful. Consideration is now being given to alternative means of adding to the cost accounting strength of the Office including the possibility of recruiting trainees who would be expected to acquire professional cost accounting qualifications.

Paragraph 12—Payments requiring validation by specific legislation.

The Minister notes the Committee’s comments to the effect that in relation to the following four Votes the level of certain payments delimited by statute was exceeded without enactment of the necessary amending legislation:

(i) Transport and Power: grants to CIE additional to the fixed annual grants provided for in the Transport Act, 1964.

(ii) Local Government: payments in excess of the maximum house reconstruction grants provided for in the Housing Act, 1966.

(iii) Gaeltacht: payments of housing grants in excess of limits provided for in the Gaeltacht (Housing) Acts, 1929 to 1967.

(iv) Local Government: extra-statutory grants in respect of the adaptation of houses to meet the needs of the physically disabled.

(v) Superannuation and Retired Allowances: extra-statutory and x-gratia pension payments.

Although the advice received from the Attorney General’s Office supported the view taken in the CIE case, having re-examined the matter in the light of the earlier considerations adduced by the Committee, the Minister would accept that the particular grants involved should preferably have been supported by specific legislation and that there should have been suitable notes on the face of the relevant enabling estimates. The present position is that section 6 of the Transport Act, 1964 which provided for an annual grant to CIE of two million pounds, with provision for periodic variation, was repealed by the Transport (No. 2) Act, 1974. Section 3 of the 1974 Act envisages payments of unspecified amounts to the Board out of moneys provided by the Oireachtas. These payments are now voted annually by the Dáil and included in the Vote for Tourism and Transport.

In relation to house reconstruction grants met from the Local Government Vote, section 21 of the Housing Act, 1966 stipulates that:

“A grant under this section shall not exceed:—

(a) in the case of a dwelling containing not more than three rooms, one hundred pounds,

(b) in the case of a dwelling containing four rooms, one hundred and twenty pounds, and

(c) in the case of a dwelling containing five or more rooms, one hundred and forty pounds.”

Similarly, with regard to housing grants payable from the Gaeltacht Vote, the Housing (Gaeltacht) Acts delimit the amounts of grants payable from Voted moneys. For example, a schedule (the “First Schedule”) to the Housing (Gaeltacht) (Amendment) Act, 1964 sets down certain grants payable; section 2(1) of the Act stipulates that:

“the amount of the grant shall . . . . . . not exceed the appropriate sum specified in the first schedule to the Act.”

The Minister endorses fully the Committee’s comments on such payments. That is to say that the level of these grants, which were delimited by statute, can only be increased properly by further specific legislation, and that where exceptionally it would not be possible to adhere strictly to this principle (because of, for example, pressure on parliamentary time) a Supplementary Estimate should be introduced to allow the increased grants to be paid pending the enactment of special legislation. That Estimate should make it quite clear that grants at variance with the existing statutory provisions are proposed. The Minister considers further that the necessary legislation should be introduced before the end of the year in which the payments are being made. In fact, in the light of the Committee’s comments, this procedure was followed in the case of a Supplementary Estimate for the Local Government Vote in July 1977.

With regard to the housing adaptation grants to meet the needs of the physically disabled the position is that, while these grants were not specifically provided for in the Housing Act, 1966, the Act did not preclude the Dáil from voting these grants. Similarly, the Superannuation and Pensions Acts, 1834 to 1963 did not preclude the Dáil from authorising the pension payments referred to by the Committee. However, in the light of the Committee’s views, the Minister considers that in such cases it is desirable that the grant additional to the statutory grant should, where possible, be enacted in the same corpus of legislation as the existing statutory grant so that that legislation would reflect the full extent of Exchequer assistance.

With regard to the pension payments, as the Committee has already noted in its Interim Report on the 1975 Appropriation Accounts, the necessary legislation—the Superannuation and Pensions Act, 1976—has been enacted.

The Department of Finance is taking up with the Departments concerned the question of legislation to cover the other services commented on by the Committee.

Paragraph 13—Office of the Revenue Commissioners—Steps to improve the position in regard to Tax Collection.

The Chief State Solicitor and the local State Solicitors are now dealing with penalties for the non-delivery of returns etc. This means that the Revenue Solicitor will be able to concentrate on the purely enforcement area in the larger cases. It is hoped that these new procedures should have the effect of inducing a higher degree of compliance with the requirement to submit returns, thus reducing the number of cases in which estimated amounts are referred to the County Registrars for collection.

As a result of Section 30 of the Finance Act, 1976 (which provides for revised procedures relating to appeals against Revenue assessments), there is now a considerable inducement to pay tax at an early date. This has the effect of reducing the number of estimated assessments going to the County Registrars and of reducing the number of cases recalled because of the admission by the tax inspector of late appeals. It is too early, as yet, to quantify these reductions in absolute terms, but the present indications are that they are substantial.

Paragraph 16—Agriculture—Delays in collecting Monetary Compensatory Amounts (MCA’s).

The amount of MCA charges outstanding in the cattle and beef sector was further reduced to £0.9 million at the end of October 1977 as compared with £2.5 million approximately in November, 1976.

Every effort is being made to collect this outstanding debt as quickly as possible. Legal proceedings have been instituted against 26 debtors resident in the State. A number of these cases have been settled, but legal action is still current in 13 cases. Legal proceedings have also been instituted against 13 debtors resident outside the State and legal action will be commenced in further cases, if necessary.

The arrangements for collection of MCA’s on exports of live cattle and beef have been changed to prevent further arrears arising. Under the European Communities (Cattle Export Charges) Regulations, 1975, exporters of live cattle are required to pay the MCA export charge in advance of export or to lodge with the Minister for Agriculture an adequate financial guarantee for its payment. These Regulations came into operation on 24 November, 1975 and since then no arrears of cattle MCA’s have occurred. Since 1 April, 1977 purchasers of intervention beef are required by administrative arrangement, to pay MCA export charges in advance at the time of purchase of the beef. As from 5 August, 1977 EEC Regulations provide for the inclusion of MCA charges in the purchase price of intervention beef stored abroad. The MCA export charges in respect of beef stored in Ireland continue to be collected at the time of purchase. Collection of the MCA export charges on commerical beef is effected in a generally satisfactory way, either by collection from the exporters or by offsetting against subsidies payable.

PART II—PARTICULAR ACCOUNTS

Paragraphs 22, 23 and 29 do not appear to call for comment.

Paragraph 17—Garda Síochána—Extent of overtime payments.

The Minister accepts as valid the general comments of the Committee on the extent of overtime payments from the Garda Síochána Vote. Although the strength of the Force was increased by 624 in the course of the years 1974 and 1975, payments for overtime increased from £5,681,703 in 1974 (April-December) to £8,462,159 in 1975. Since August 1975 limits have been set by specific Government decisions on the amount that may be spent on Garda overtime in each year. The amount spent in 1976 was £5,045,000 and in 1977 (up to 30 September) it was £3,752,000. The strength of the Force is being increased significantly and this may be expected to reduce the amount of overtime further.

Paragraph 18—Office of the Minister for Education—National Council for Educational Awards.

The Minister has been informed by the Department of Education that care will be taken in future, in relation to the financing of new bodies such as the National Council for Educational Awards, to select the most practical method which will not cause accounting difficulties and will maintain adequate financial control. The National Council for Educational Awards has since been designated as an institution of higher education and is now financed through the Higher Education Authority (Vote 34: Higher Education: Subhead A.2.).

The Minister supports the emphasis placed by the Committee on the importance of surrendering surplus money to the Exchequer at the end of each accounting period, unless it has been provided as a grant-in-aid. This requirement is clearly stated in paragraph 12 of the official booklet “An Outline of Irish Financial Procedures” which was brought to the attention of all Accounting Officers in September 1976. As requested by the Committee, the Minister is reminding Accounting Officers of the rule governing surrender of surplus moneys.

Paragraph 19—Primary Education—Scheme of Adaptation and Extension for a National Teacher Training College.

The Minister shares the concern of the Committee at the lack of communication and co-operation in this case between the Building Unit and Primary Branch of the Department of Education. He notes the Accounting Officer’s assurance to the Committee that this could not happen again because such operations are now being controlled by the Building Unit.

The Minister has been informed by the Department that final figures for the project in question will be communicated to the Committee as soon as possible. The question of seeking a contribution from the College authorities towards the expenditure is being further examined, while the matter of securing an indenture from them, guaranteeing exclusive use of the premises for teacher training, is receiving attention. The Department has also informed the Minister that there were no deviations from the original contract for the works other than those relating to the kitchen and dining facilities.

The Minister assures the Committee that the general policy of competitive tendering for public works contracts remains unchanged and will be continued.

Paragraph 20—Secondary Education—Local Contributions towards Capital Costs of Community Schools.

The Department of Education has informed the Minister that the matter of local contributions towards the cost of community schools has not yet been finalised. This is due mainly to further difficulty with regard to acceptance by the ecclesiastical authorities of the arrangements for payment by them of local contributions arising from objections to the deed of trust now being encountered from teachers’ organisations. The Minister had earlier this year approved a proposal put forward by the Department of Education in relation to procedures for the payment of local contributions by Vocational Education Committees and no further difficulty is anticipated in this area. The Committee will be informed of developments. The Minister had already impressed on the Department of Education that in the case of future community schools no irrevocable commitment should be entered into until firm arrangements have been made to secure the appropriate local contribution.

The Minister is drawing the attention of Accounting Officers to the Committee’s comments in relation to the need, in future cases involving local contributions, to ensure that expenditure of Exchequer moneys is not incurred until such time as the local contributions have been collected or, at any rate, until their collection has been satisfactorily guaranteed.

Paragraph 21—Secondary Education—Construction of sports complexes.

The Minister shares the concern of the Committee that expenditure from Voted moneys was incurred without the sanction of his Department. He is bringing to the attention of Accounting Officers the Committee’s comments in this regard. The Department of Education has informed the Minister that the full amount of the total of £335,000 to be contributed locally towards the cost of providing swimming pools at certain Community and Comprehensive schools has now been collected and credited to the Secondary Education Vote.

Paragraph 24—Office of Public Works—Government Offices at Athlone and Castlebar.

The Minister agrees with the view expressed by the Accounting Officer in his evidence to the Committee that expenses incurred on a project as a result of planning changes, where this occurs in the ordinary course of the work of the Office of Public Works, should not normally require his specific sanction or a noting in the Appropriation Account. The Minister is satisfied that in most cases the New Works Statement, which is furnished to the Comptroller and Auditor General in conjunction with the Appropriation Account and a copy of which is furnished to each member of the Committee, serves to bring to notice any expenditure incurred on projects which are not proceeding or on which there might appear to have been abnormal expenditure. However, it is appreciated that from time to time there might occur exceptional cases which, because of the magnitude of the expense involved or for some other reason, would call for specific noting in the Appropriation Account. The Minister is considering the matter in consultation with the Commissioners of Public Works with a view to making appropriate arrangements in this regard. The Committee will be informed of the result as soon as possible.

Paragraph 25—Agriculture—Charging of Expenses arising out of Market Intervention.

The Minister is informed by the Department of Agriculture that invoices from cold stores in respect of handling, freezing and storage charges on beef which entered the stores after 1 January, 1977 are now being fully checked before payment is made. Some storage invoices received in 1977 relate to beef placed in storage prior to 1 January, 1977 and these have been paid subject to a detailed check later on when definitive stock registers for the period up to 31 December, 1976 become available following computerisation of all stock records for the 1973-1976 period. These registers should be available for the purpose early in 1978. Invoices in respect of refrigerated transport used to convey intervention beef to cold stores (mainly abroad) since the autumn of 1976 are being fully checked before payment is made.

As a result of completed stock registers for 1974 becoming available, it was possible in recent months to commence the work of clearing invoices for handling, freezing storing and transporting of intervention beef, which had been paid on account for the years 1974-76. Most of the invoices for 1974 have now been checked. Clearance of the 1975 and 1976 invoices is now being undertaken and every effort is being made to have this work completed in 1977.

Paragraph 26—Agriculture—FEOGA Accounts.

The Department of Agriculture has informed the Minister that, as regards clearance of outstanding FEOGA Accounts, it is pressing on with finalisation of the 1974 Accounts and it is hoped that this can be achieved during the next few months. It is also hoped to have work on the 1975 Accounts completed early in the New Year.

As regards the interest allowed by FEOGA in respect of borrowing for intervention purposes, it had been pointed out to the EEC Commission on several occasions that the rate allowed was inadequate in relation to the cost of borrowing in this country and the Department of Agriculture had sought to have the present flat rate system of recoupment changed to take account of the widely differing interest costs in the Community as a whole. The Commission did not accept the case put forward and no support was received from other Member States, some of whom gain from the flat rate system. In fact, some of the Member States are strongly opposed to any change in the present system. As a result of the fall in interest rates this year, the cost to the Department of its borrowing, by way of its latest issue of Agricultural Commodity Intervention Bills, is much the same as the present FEOGA recoupment rate.

Also, it has been pointed out by the Commission that the allowances for intervention expenses (storage, transport, interest etc.) are intended as a package so that a loss on one item might be made up on another. In fact, in the case of the two years 1974 and 1975 combined, FEOGA recoupment to the Department of Agriculture exceeded expenditure despite a loss on interest. In 1976, expenditure exceeded recoupment, but the loss would have been substantially reduced had it been possible to credit against it the previous years’ surplus of FEOGA recoupments over expenditure. The latter, however, had been surrendered to the Exchequer.

The Commission have also pointed out that in practice an interest gain is made on FEOGA funds, a gain which is not reflected in the Vote. About a week before the beginning of each month, the Commission make an advance to the Intervention Agency of the total expenditure estimated to arise under the FEOGA Guarantee Section during that month (on refunds and compensatory amounts on exports, the cost of various production aids and premiums as well as incidental expenses connected with intervention purchases). Some of the advance is not paid out until the last day of the month i.e. about five weeks after receipt, while the rest is used gradually throughout the month. There is normally a sizeable carryover from one month to another and hence a substantial balance is available free of interest throughout the year for the benefit of the Exchequer.

Paragraph 27—Office of the Comptroller and Auditor General—Staffing.

In 1954/5 the number of staff in the Comptroller and Auditor General’s Office (67) was substantially higher than in the following decade, e.g. in 1965 the number was 53. The selection of 1954/5 as the base year does not, therefore, reflect the trend in staff numbers in the Office in recent years which has been one of steady increases as well as of considerable upgrading of staff. In 1967 there was a comprehensive review of work in the Comptroller and Auditor General’s Office, when the authorised establishment was revised to the satisfaction of the Comptroller and Auditor General. Since then, all applications for additional staff have been sanctioned, apart from a recent application for staff in the lower grades which was the subject of a survey by the Management Services Unit of the Department of the Public Service. The survey recommended that 19 of the 23 posts sought should be sanctioned and this has been done. This sanction has increased the total number of staff of the Comptroller and Auditor General’s Office by 25%.

Paragraph 28—Social Welfare—Overpayments of Non-Contributory Old Age Pensions.

The Minister is informed by the Department of Social Welfare that, as a result of a restructuring of procedures in the Department, the three sections involved in this area now operate with greater co-ordination and apply cross-checks specifically designed to eliminate duplicate book issues and duplicate arrears payments, the main source of the overpayments referred to by the Committee. Since the pressure of work arising from the 1973 and 1974 Social Welfare Acts ceased, the staff have familiarised themselves with the new procedures, which are now understood to be working satisfactorily.

Since 1974 (April-December), when overpayments of old age non-contributory pensions which were written off amounted to £20,677 or .063% of the total expenditure on these pensions, there has been a marked reduction in the extent of overpayments which, in 1976, amounted to £12,274 or .017% of total expenditure.

The Minister agrees with the Committee’s recommendation that, when legislation of the type referred to is being prepared, adequate consideration should be given to the administrative implications involved. In the normal course, administrative implications of proposals for legislation are carefully examined in particular by the sponsoring Department and by the Department of the Public Service. The Department of the Public Service will impress the Committee’s recommendation on Departments preparing legislation with administrative implications.

Paragraph 30—Delays in furnishing information to the Comptroller and Auditor General.

The Minister notes that the Committee has had occasion to express its extreme dissatisfaction with the apparently unwarranted and unnecessary delays by some Accounting Officers in replying to references from the Comptroller and Auditor General and in furnishing other information and documentation to him. The Minister shares the concern of the Committee that such delays might obstruct the Comptroller and Auditor General in carrying out effectively his Constitutional duty of reporting to Dáil Éireann, might consequently deprive Dáil Éireann of information on matters which he might wish to bring to its attention, and might also hinder the work of the Committee itself. He is impressing on Accounting Officers the overriding need to facilitate the Comptroller and Auditor General and the Committee in the discharge of their functions by promptly responding to all requests for information. The particular attention of Accounting Officers is also being directed to the Committee’s concern at the delays which have occurred from time to time in obtaining the sanction of the Department of Finance for revised limits for capital expenditure.