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

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 2 Feabhra, 1978.

Thursday, 2nd February, 1978.

The Committee met at 11 a.m.

DEPUTY O’TOOLE in the chair.

Mr. S. Mac Gearailt (An tArd-Reachtaire Cuntas agus Ciste) and Mr. C. K. McGrath (An Roinn Airgeadais) called and examined.

VOTE 34—NATIONAL GALLERY.

Dr. J. White called and examined.

170. Chairman.—Dr. White is no stranger to the Committee of Public Accounts. We welcome him here to-day.

Deputy Belton.—On subhead C—Post Office Services—the amount of expenditure is less than granted. Why is this?

Deputy V. de Valera.—This is a notional business arrangement with the Post Office.

Chairman.—The amount was less than expected.

171. Deputy C. Murphy.—On subhead D —Purchase and Repair of Pictures—when was the figure increased last or is it increased regularly?

—The figure is increased by very small amounts and is related generally to inflation. It is a rather difficult item for which to get an increase. We make the applications but one has to cope with the Civil Service who try to keep down the amount of expenditure. The amount in question here is merely a token Having regard to the cost of pictures to-day this amount would not even buy a very minor picture, for instance. The Gallery purchases its pictures mainly from other sources—from bequests made to it already. However, it would be of great value to the Gallery if the Government were to make better contributions to the acquisition of works of art.

I notice also that there is a certain amount in that grant-in-aid for the repair and restoration of pictures but I expect that the costs in this area are also very high. For example, the people who specialise in this work must command very high fees.

—Originally this grant for the purchase and repair of pictures was used at times when the Gallery, for one reason or another, had to send out pictures to be restored but when I went to the Gallery I introduced a new conservation department. You will notice under subhead E—Conservation of Works of Art—that there is a figure of £4,800. This reflects the cost of materials. We now have restorers employed in the Gallery who are paid by way of salary. We do all the restoration work to the pictures. The amount of money under subhead D is for the repair of frames.

It is really only a token estimate?

—We must confine it to the repair of frames because with about 10,000 pictures one can understand that there is decay in the frames. This work takes up a certain amount of time but the actual restoration comes under the next subhead.

172. Chairman.—On subhead B—Travelling and Incidental Expenses—I should like to get some information regarding exhibitions in the provinces. There are two pilot schemes, one in Meath and the other in Mayo, where officers are appointed on a full-time basis by the local vocational education committees for the purpose of bringing pictures to these areas. The National Library and the Public Records Office would be involved also in this. Are such expenses included in subhead B, that is, travelling and incidental expenses, or to what extent are you involved?

—That expenditure comes under the allocation by the Department of Education to the National Museum and to the National Library. When this programme was instituted some years ago, the education committee was set up by the then Parliamentary Secretary in the Department of Education. Centres were opened in Trim and in Castlebar. The committee sits in the National Gallery each month but the funds voted are voted through the Vote for the Library and the Museum. As such they do not come under my control. The figure you are referring to is £28,000. It is administered by a committee of which I am a member, so I know a good deal about it and I can give you any information.

173. Deputy C. Murphy.—How is the staffing situation now? Have you a full complement?

—If I say we have a full complement I might give a slightly false impression. Nobody is ever satisfied with the number of staff. We are fully staffed and have no vacancies in the Gallery. We made an application for a post and allowed in our Estimates money to cover it, but permission to fill that post was not given. That accounts for a sum of money which was not taken up. There was a vacancy in the restoration department which was not filled due to failure to find suitable candidates. This accounts for a second vacant post. Thirdly, the Gallery runs on a slightly different basis to almost any other Government institution in that we open seven days a week. The Gallery does not close, as the Museum does, on Mondays. We employ five men more than the number required to staff the Gallery in any one day and every man gets one day off during the week, so we have five men on rotation. We open until nine o’clock on Thursday nights and from two o clock until five o’clock on Sunday afternoons on an overtime basis. We have a fairly large amount of overtime as part of the staffing structure. We either overestimated the amount of overtime or, for one reason or another, the full amount of overtime was not worked. In general we overestimated our expenditure by £15,000, which we had to return.

Only recently I discovered the significance of the Dargan statue. I wondered for a long time why a man whom I associated with my own town and with the railways should have a statue outside the National Gallery. I heard a talk by Diarmuid Breathnach on the radio in which he said that Dargan had sponsored an exhibition before the Gallery was founded.

—In 1853 this institution was owned by the Royal Dublin Society and they lent the grounds for a great exhibition. This was held in a huge pavilion on the lawn. The pavilion can be seen in a watercolour by Mahoney just inside the door of the National Gallery. Dargan gave a large contribution towards this exhibition. A fund was set up in the following year, 1854, which resulted in the founding of the Gallery. He gave £5,000 to start it off and there is a plaque outside the Gallery explaining this. One might say that Dargan was responsible for the founding of the National Gallery.

174. Deputy N. Andrews.—Is there any possibility that you would spend some money on encouraging more schools to visit the Gallery? I am thinking particularly of inner city schools.

—If the Deputy has any particular recommendation I should be glad to try to carry it out. We have a fairly comprehensive series of lectures. In 1977 the attendance in the Gallery reached a new high of 560,000 people. It is one-fifth of the attendance in London, while we have a population of one-sixteenth. The number of lectures last year was almost 500, which is 90 more than ever before. We have regular weekly lectures for schools on Thursday afternoons. We never refuse any school group. We employ eight part-time lecturers to deal with school groups and we advertise this. We have free lecture forms for anyone to take away. The Gallery is not used by schools to the extent we would like but we are ready and available. We would welcome any suggestions.

Perhaps you would send circulars to the schools?

—Circulation is a little expensive. We have to try to make our funds meet the possibilities. We do whatever we can in the way of publicity to attract the attention of schools. We have an education officer; we deal with teachers; we have conferences, meetings and seminars. Most schools know that we are providing lectures. I should be glad to consider any suggestions.

I will write to you about it.

—Advertisements in the Press are very expensive.

175. The Gallery is being used by fee-paying schools rather than by national schools, vocational schools and community schools?

—Yes.

It would be of great benefit to the children in these other schools if the teachers and pupils were encouraged, as part of education in civics, to visit the Gallery?

—I will make a special effort to bring that about.

The fee-paying school seem to use the Gallery almost exclusively.

Chairman.—That seems to be all that arises on this Vote.

The witness withdrew.

VOTE 28—OFFICE OF THE MINISTER FOR EDUCATION.

Mr. D. Ó Laoghaire called and examined.

176. Chairman.—Paragraph 28 of the report of the Comptroller and Auditor General reads:

“Subhead A.4.—Bord an Choláiste Náisiúnta Ealaíne is Deartha (Grants-in-Aid)

Reference was made in previous reports to the failure of Bord an Choláiste Náisiúnta Ealaíne is Deartha to submit its statutory accounts to me for audit as required by Section 15 (2) of the National College of Art and Design Act, 1971. These accounts have not been received by me at the date of this report.”

Mr. Mac Gearailt.—In earlier reports I had occasion to draw attention to the non-submission for audit of the statutory accounts of the National College of Art and Design. At the date of this present report, July 1976, these accounts were still outstanding and it was necessary to report on the matter once more. However, when my report for 1974 came to be considered by the Public Accounts Committee in November 1976 I was in a position to tell the Committee that the accounts of the college up to December 1974 had recently been certified by me. In its report the Committee recommended that Accounting Officers be informed of the necessity to ensure in so far as they can that bodies for whose funding they have a measure of responsibility submit their account for audit without undue delay. The Minister for Finance in his recent Minute assures the Committee that this is being done.

The present position in regard to the accounts of the College of Art and Design is that the audit for 1975 has been completed but there are a number of matters requiring further consideration before I can certify the accounts.

177. Deputy V. de Valera.—Is there a statutory requirement that these accounts should be submitted at a specific time?

—The accounts should be submitted annually. The Act says “annually”.

178. How long has this breach of the statute been going on?

—Ever since the new board was set up in 1972.

179. Might I ask the Accounting Officer when the Committee can expect to have the terms of the statute observed?

—The position is that the onus for producing the accounts is on the board. The board produces the accounts to the Comptroller and Auditor General and it is when the accounts have been audited that they come to the Minister for Education. Whilst we on occasions have been pressing the board to be more expeditious in producing the accounts, strictly speaking, we do not feel it is the responsibility of the Department or of the Accounting Officer. There was difficulty initially but there are draft accounts now for both 1975 and 1976 being discussed directly between the board and the auditors. The matter does not really come to the Department until after the accounts have been audited by the Comptroller and Auditor General. I am quite prepared to bring all the pressure I can to bear on the board of the National College of Art and Design, but the legal responsibility is on the board, not on the Department.

180. Is it common case then that we have here a continuing failure to comply with a statutory obligation and the Accounting Officer is not in a primary position to control the situation?

—That is true.

181. If that is so, who is responsible? What Department is responsible for the legislation in question?

—The Minister for Education is.

182. Would it be in order for the Committee to draw the attention of the Department, through the Accounting Officer, to this very unsatisfactory state of affairs, point out this illegality and call for an urgent adjustment of the position through the Department’s power of initiating legislation designed to amend this continuing blemish on our public accounting system?

—Amending the Act would be a question of policy in regard to how a failure of this nature on the part of the board should be dealt with. The Act as it stands puts the responsibility on the board, no doubt with the full cognisance of the Oireachtas. As I understand it, the board had difficulties in its early stage. These difficulties are now being ironed out with the co-operation of the Office of the Comptroller and Auditor General and it seems to me that after the accounts for 1975 and 1976 have been cleared it would then be more appropriate to insist on compliance with existing legislation rather than think in terms of amending the Act.

183. Who will do the insisting? This Committee has been drawing attention to this breach and so has the Comptroller and Auditor General. Who will do the insisting?

Mr. Mac Gearailt.—Might I say that the 1975 and 1976 draft accounts have been produced. What I am worried about at the moment is what appears to me to be unauthorised expenditure which I cannot certify. With regard to the 1977 accounts, I believe the college is going to be funded through the Higher Education Authority and I would hope that would solve the problem of accounts. There will remain the difficulty of complying with the requirements of the Act which specifies that the sanction of the Minister for Education must be obtained for certain specific expenditure.

Deputy V. de Valera.—I do not want to delay on this. Let us hope that with the next accounts we will find ourselves in a more satisfactory position. Whether it is a policy matter or not I would like to draw attention to the fact that this Department has been outstanding for its administrative difficulties and that they have got to the stage where it may be a matter of policy for this Committee to see that proper accounting methods are introduced into the system. We understand the difficulties but it cannot be allowed to continue.

Chairman.—It would seem that we are bordering on policy matters here and we are probably talking specifically about weaknesses in legislation where the ultimate authority to force the board to carry out statutory duties seems to be in some vague area. The Accounting Officer has said that he is not responsible, and the board seems to be in an autonomous position as far as that is concerned. Presumably, from what the Comptroller and Auditor General says, this matter will hopefully be rectified in future accounts.

—Whilst I do not feel myself legally responsible in regard to this, I have all along been making efforts to see that these accounts are produced promptly and I propose to continue doing that.

We appreciate the Accounting Officer’s efforts.

Deputy V. de Valera.—On his own statement, the Accounting Officer does not have the necessary power in time. It is up to the Accounting Officer, if he has any responsibility at all, whether it is a policy matter or a legislative matter, to ensure that he either has the responsibility and discharges it, or surrenders the responsibility to some source directly amenable to this Committee.

Deputy F. O’Brien.—We should be talking to whoever is legally responsible.

Chairman.—The 1971 Act states categorically that the board shall keep in such form as may be approved by the Minister and so on, accounts kept in pursuance of section 15 which are the board’s responsibility, to be submitted annually to the Comptroller and Auditor General. The board seems to be the be-all and the end-all of this area of activity. We are bordering here on legislative policy and as a Committee we could point out the weaknesses in this to the appropriate authority and see what can be done about it.

Deputy N. Andrews.—There is no public accountability. This is what it amounts to.

Chairman.—There is. There is no legal way to make them comply. The question at the moment is, who makes them comply?

184. Deputy N. Andrews.—How does one rectify the situation?

Mr. Mac Gearailt.—The Act provides that when the accounts are certified by me they must be laid on the table of the House. If the accounts are continually being delayed it will show when they are laid on the table of the House.

—We are dealing here purely with accounting for what has been done. In relation to the doing of the things and the expenditure of the money, appointments and expenditures are subject to the control of the Minister for Education. The matter will be passing out of the direct control of the Accounting Officer when the college is a designated body with the Higher Education Authority. Although the money will be flowing to the College of Art through the grant-in-aid to the Higher Education Authority, the operations of the college in regard to expenditure, appointments, and so on, will still be subject to the sanctions of the Minister for Education. It is in relation to the accounts that the grey area occurs, if it is grey. I feel that it is completely and deliberately in the hands of the board of the college.

185. Deputy V. de Valera.—What would one do if one were privately trading? Withold funds?

—We have done that in relation to the 1974 accounts.

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

“Subhead A.5.—Expenses of National Council for Educational Awards

Moneys are provided by Dáil Éireann for the expenses of the National Council for Educational Awards out of an ordinary vote subhead. In paragraph 31 of my previous report I stated that I had communicated with the Accounting Officer because the Department of Education appeared to be treating the Council as a body financed by grant-in-aid. In reply to that inquiry the Accounting Officer informed me in December 1975 that the amounts issued to the Council in 1975 had been adjusted to take account of the money they had on hands from the previous year and that the Council had been instructed that the financial allocation as made in the relevant subhead of the Vote in respect of its expenses during any financial year might not be exceeded.

In the year under review the records of the Council revealed that expenditure of £195,688 had been incurred. As the amount charged in the Appropriation Account was £182,000 I again sought the observations of the Accounting Officer. In reply to this inquiry, he stated that the Council had been informed on different occasions during 1975 that the financial allocation in the relevant subhead for the Council’s expenses for the year, £182,000, should not be exceeded. He also stated that the charge to the subhead, £182,000, reflected accurately the amount issued from the Vote to the Council and, accordingly, the responsibility of the Department of Education in relation to payments to the Council in 1975. As expenses of the Council to the extent of £13,688 are not charged in the Appropriation Account of the year in which they were incurred I have deemed it desirable to draw attention to the matter.”

Mr. Mac Gearailt.—Paragraph 29 draws attention to a discrepancy between the expenditure of the National Council for Educational Awards for 1975 as shown in the Council’s records, and the expenditure as shown in the Appropriation Account. A similar discrepancy which arose in 1974 was mentioned in my Report on that year and the matter was considered by the Public Accounts Committee in its last Report. Arising out of that Report the Minister for Finance in his recent Minute indicated that the National Council for Educational Awards has been designated as an institution of higher education and is being financed through the Higher Education Authority. This method of financing should ensure that the accounting difficulties which arose in 1974 and 1975 will not be repeated.

187. Deputy V. de Valera.—The difficulty for the Committee was that, in effect, through the uncertainty in the way this was being treated, money was being held over from one year to another in complete breach of a very fundamental principle of public accounting, namely, the surrender of funds at the end of the year. We are still dealing with accounts that are past history. If the Accounting Officer were able to confirm that it is merely a matter of clearing up the past and moving on to a more efficient system I will not delay him on the matter.

—In principle the situation has been cleared up, but there is one item still outstanding. I would look on it as a matter of good housekeeping. The NCEA had £16,364 unspent from 1974. We asked them to surrender that. It was surrendered to us in 1975 and brought to account as appropriations-in-aid. In the course of the year they explained that they had commitments that needed further supply and there was a Supplementary Estimate of £16,000 which brought the total provision for the year to £182,000. We told them that they should keep within this sum. Notwithstanding that, they spent the £13,000 again and what the Comptroller and Auditor General is really saying is that the expenditure of the body in that year was £13,000 over the amount that was provided. We have been trying to bring the council into line in regard to that, and we have told them that they were only authorised to spend £182,000 and that if there is a further £13,000, that is a deficit on their account that has to be taken care of in a further year. The council has been arguing as well that they should be entitled to regard that as part of their resources. I am afraid that situation continues into 1976.

188. What is the position at present?

—It is still the same. They do not regard this as being overspent but we do.

If the Accounting Officer regards them as being overspent, they are overspent. If you regard them as being overspent the Committee supports you in that view. I cannot speak for the Committee, of course, but I would urge them to take that view.

Chairman.—You may take it that, as Deputy de Valera says, we are with you on your approach to this.

Deputy V. de Valera.—That sum will have to be charged somewhere in the Appropriation Account?

Mr. Mac Gearailt.—Unfortunately the 1976 account is closed now which means that we cannot do anything on the lines suggested by the Deputy.

Deputy V. de Valera.—But there is £13,688 missing from the public accounts.

Mr. Mac Gearailt.—The charge in respect of this body for 1975 is understated in the Appropriation Account?

—I would submit that the charge in the Appropriation Account is stated correctly but the council are in debt to the extent of £13,000. A way of rectifying that would be the Department deciding to allow an excess on the subhead to that extent and meet it from savings elsewhere in the Vote.

Chairman.—Do you regard that as satisfactory?

—No.

Mr. Mac Gearailt.—As the Committee pointed out last year, the suggestion here is that this body is being financed more or less on the basis of a grant-in-aid. It is, in fact, an ordinary subhead and if the body spent money in respect of matured liabilities in 1975, that sum must appear in the Appropriation Account. To my knowledge this body has no authority to borrow from the bank.

189. Deputy V. de Valera.—So there has been spending in excess of the ordinary subhead and that has not appeared in the accounts?

—It has not appeared in the Appropriation Account.

The situation is that excess spending in respect of an ordinary subhead has not appeared in the public accounts. This is very serious. What would happen if, say, a private or a public commercial company were to find themselves in such a situation?

—So far as I am concerned there has not been excess expenditure from the subhead. I have not released it.

I take the point but what is involved is excess expenditure?

—It is excess expenditure by the council.

But in effect the State has financed them?

—The State has given the council £182,000 but the council has spent £195,000. I would submit that in so far as the Appropriation Account is concerned I am totally correct— that I have charged what I have expended.

Mr. Mac Gearailt.—I could not go along with the Accounting Officer there. The council are the authorised body for incurring expenditure under this subhead. If the Department appoints the council to incur this expenditure the Department must take responsibility for what the council spend.

—I am not dodging responsibility here. If what the Comptroller and Auditor General wants is simply that I should write into the Appropriation Account a further £13,000, there is no problem but I would not then have controlled the council of the NCEA. I would simply have regularised the £13,000 they have spent.

Mr. Mac Gearailt.—Surely this problem arises in every case where money is spent on behalf of the Department by way of a sub-account, e.g., by the various colleges who are in receipt of voted moneys from the Department.

190. Deputy N. Andrews.—Is it the position that the NCEA have overspent improperly?

Chairman.—Without sanction.

Deputy V. de Valera.—The logic of the case being made by the Accounting Officer is that any such body financed from public funds can incur additional expenditure, raising the money by external means in the knowledge that the State will adopt the expenditure?

—That is not what I am saying.

But that is the way I am understanding it?

—If I sanctioned the £13,000 excess spent by the NCEA and put it into the Appropriation Account I have accounted for it, but what I am saying is that if one overspends one must recoup the amount concerned within the grant.

Chairman.—But you have not succeeded in doing that?

—Not yet.

Deputy V. de Valera.—You are maintaining that this is a grant-in-aid?

—No.

Then, it is under the subhead and, therefore, I find myself in agreement with the Comptroller and Auditor General?

—But I have not expended this money from the subhead. It has been spent by the council but I have not released it.

Who, then, is going to pay it?

—I am saying that the money has to be accounted for within the provisions made for the NCEA and they must do this by cutting their cloth in accordance with their measure.

Mr. Mac Gearailt.—The only way they can do that is by cutting back on the following year. What you are suggesting, then, is that mature liabilities for 1975 should be postponed until 1976?

—No. I am saying that liabilities should not be incurred.

191. Deputy F. O’Brien.—But since they have been incurred the impression I get is that they should be taken up in the following year by way of a cut back to the extent of £13,000?

—I have no difficulty here. If it is decided that it is good accounting to bring this money into the accounts, there is no problem so far as I am concerned.

Chairman.—Surely it must appear somewhere in the accounts. The only course open to us would seem to be to deduct the amount from subsequent allocations?

Deputy V. de Valera.—It is obvious that we are faced not only with a question of over-expenditure but with an accounting problem. May I suggest that the Committee request that the Comptroller and Auditor General, the Accounting Officer and the Department of Finance pay particular attention to this in order to regularise the position and also to ensure that there is not taken any action that would be prejudicial to the basic principles of public accounting and that no precedents are created. I appreciate the Accounting Officer’s difficulty here but it has to be admitted that there is a problem. The danger I see from the discussion so far is the introduction of dangerous innovations in general public accounting. I suggest that this case be referred specifically to the Comptroller and Auditor General and that the Accounting Officer and the Department of Finance should be asked to give it close attention with a view to obviating any similar problems and clearing up this problem.

192. Chairman.—Paragraph 30 of the Report of the Comptroller and Auditor General reads:

“Subhead B.6.—Language Research

A firm, which supplied film strips under contract to the Department of Education, submitted invoices between July and December 1975 totalling £20,741 for deliveries made prior to 31 December 1975. I noted that £9,215 was paid to the firm in December 1975 and that payment of the balance, £11,526, was not made until January 1976. As the total amount, £20,741, was in respect of liabilities which had fully matured in 1975 I asked the Accounting Officer for his observations. He informed me that the amount provided in this subhead is utilised for the purpose of providing publications and audio-visual aids in connection with Irish conversation courses an primary and post-primary schools. He explained that the provision in 1975 fell short of requirements because the number of national schools possessing film strip/slide projectors had increased from 1,800 to 2,500 and that a sum of over £4,000 authorised in earlier years fell due for payment in 1975. In the course of 1975 it was agreed with the firm producing the film strips that, in the light of the financial situation, work would be suspended and that no further payments would arise in that year. The firm, however, continued with its work and presented further invoices totalling £11,526 for payment but in the light of the agreement already made it was felt by the Department that payment should be deferred and the amount met out of the 1976 provision for this purpose.”

Mr. Mac Gearailt.—It is a longstanding principle of Government accounting that payments which come within the ambit of a Vote and which are due and fully matured in any year should not be postponed to a subsequent year even to avoid an excess on the Vote. This paragraph draws attention to a case in which payment of liabilities of £11,526, fully matured and due in 1975, was postponed until 1976. The observations of the Accounting Officer are included.

193. Chairman.—Why did the firm continue to produce film strips in view of the agreement with the Department?

—This is a continual difficulty in regard to exercising 100 per cent day-to-day control. The agreement was that they would not produce these things but they apparently went ahead and produced them. It was desirable that the material should be available, but we were not aware in 1975 that the material was continuing to be produced. That is the reason that the payment was made in 1976 instead of 1975.

194. Deputy V. de Valera.—When you told them not to produce, were you bound by contract?

—Not in any formal sense.

Then they produced at their own risk?

—Yes.

Therefore, there is no liability on the State to pay. In an ordinary business transaction, if I have a contract with, say, the Deputy opposite and if I tell him not to do something and he goes ahead and does it and then charges me, I refuse to pay. His only remedy is to bring me to court. The same principle should apply in public accounting. If you were correct and were not in breach of contract in saying that this work should not be done, then the contractor undertook the work at his own risk and there is no liability on the State to pay. The State is not a charitable institution. What does the Accounting Officer say to that?

—He agrees fully with it.

It raises an interesting point.

—That is why we did not pay in 1975.

Why should we treat it as a liability? Why should we recognise it at all? You say it is not due and, therefore, it should not be in the accounts. The other side can go to the courts if they think it is due. Then it will come into the accounts in a regular way, even if it is by way of settlement. There is a regular way of doing things and an irregular way and our battle is to try to have a regular way. The policy behind it is a totally different matter but there are ways of regularising accounting policy.

195. Chairman.—Paragraph 31 of the Report of the Comptroller and Auditor General reads:

“Subhead D.3.—Transport Services

Under the terms of an agreement made in 1968 between the Minister for Education and Córas Iompair Éireann buses required for the free transport of school children were provided by Córas Iompair Éireann out of repayable advances from the Exchequer. As indicated in paragraph 33 of my previous report the Minister for Finance sanctioned a new arrangement in 1972 whereby interest-free capital grants would be made available to the company from voted moneys for the provision of school buses from 1 April 1974. It was subsequently agreed that the Department of Education would take over the ownership of the fleet of buses which had been provided out of Exchequer advances. Accordingly, a sum of £2,299,309 was paid from this subhead to Córas Iompair Éireann, being the written down value, as certified by the company’s auditors, of the school bus fleet in existence at 1 April 1974 and the company refunded this sum to the Excequer in reduction of its liability for repayable advances (see paragraph 6).”

Mr. Mac Gearailt.—This paragraph is for information. It outlines in a general way the financial arrangements made for the provision of buses for the transport of school children. Prior to April 1974 these buses were purchased by Córas Iompair Éireann out of repayable advances received from the Exchequer. The £2,299,309 mentioned in the paragraph was paid to the company from the Vote for the buses so purchased. The company in turn paid back this sum to the Exchequer thus redeeming in part its liability for advances. Buses purchased subsequent to 1974 were paid for out of interest-free capital grants paid to Córas Iompair Éireann and the ownership remained with the Department of Education. The net position is that ownership of all buses paid for out of Exchequer monies now rests with the Department.

196. Deputy V. de Valera.—Do you control the administration of this service?

—Most of it, but not the scheduled services run by CIE.

197. Chairman.—Paragraph 32 of the Report of the Comptroller and Auditor General reads:

“Subhead G.17.—Institiúid Teangeolaíochta Éireann (Grant-in-Aid)

As indicated in the Appropriation Account payments to An Institiúid in the year under review amounted to £84,700 being £82,000 provided in the original estimate and £2,700 provided in a supplementary estimate taken in December 1975. The accounts of An Institiúid for the year ended 31 December 1975 show a cash balance of £70,000 with outstanding liabilities of £23,000 leaving a surplus of £47,000. As it appeared, therefore, that public moneys in excess of immediate requirements had been paid over in this case, I sought the observations of the Accounting Officer.

He informed me that issues to An Institiúid are based on the amount provided in the estimate as a grant-in-aid and that this in turn is based on forecasts furnished annually to the Department by An Institiúid before the preparation of the estimates. The demands of An Institiúid are subject to close examination and reduction, as considered necessary, before a final figure is arrived at. The accounts of An Institiúid are not available in time to have adjustments carried out within the year; the accounts for 1975 were not available until April 1976. In 1975 there was provision in the estimates of An Institiúid for certain staff appointments to be made from the beginning of the year but it was not possible to make some of these appointments and others were not made until later in the year. There was also provision for scholarships which had not been awarded and for office repairs which had not been carried out. The supplementary estimate taken in December represented the amount due to An Institiúid for increases under the terms of the 16th round of the National Wage Agreement.

The Accounting Officer added that issues from the grant-in-aid in 1976 would be adjusted so as to ensure that An Institiúid would not have a large surplus at the end of that year and also that arrangements had been made to have an account of the financial position of An Institiúid furnished to the Department each year before the final instalment of the grant-in-aid is issued.”

Mr. Mac Gearailt.—This paragraph draws attention to the fact that the voted monies issued to the institute in 1975 were substantially in excess of its requirements even if we include its outstanding liabilities at the year end. The circumstances in which this happened, as explained by the Accounting Officer, are outlined in the paragraph. We are concerned here that an economy of balances of Exchequer funds should be maintained. While the institute placed its surplus funds on deposit in the bank there is every likelihood that the interest received would not meet the cost to the Department of Finance of raising such funds. It is not desirable that surplus Exchequer funds should be lying idle on deposit in various accounts, while at the same time the Department of Finance may be borrowing additional monies for Exchequer purposes.

Deputy V. de Valera.—This is obviously a serious matter. As the Accounting Officer said, it looks in the future as if this will be under control. We should draw the attention of the Department of Finance to the embarrassment likely to result to themselves in individual officers allowing such practices to occur.

198. Chairman.—One of the principal objectives of this Committee is to ensure efficiency and economy in administration. We are anxious that bodies in receipt of grants-in-aid would not have large surpluses on hand at the end of an accounting period. How effective are the remedial measures taken in this regard?

—They have been completely effective.

VOTE 29—PRIMARY EDUCATION.

Mr. D. Ó Laoghaire further examined.

199. Chairman.—Paragraph 33 of the Report of the Comptroller and Auditor General reads:

“Subhead C.1.—Salaries etc. of Teachers in Classification Schools and Grants to Capitation Schools

Payment of primary teachers’ salaries is made by means of a computerised payroll system. In the course of audit it was noted that a considerable amount of inaccurate data was included in the computer master file containing the salary records, that schedules and payable orders printed out by the computer were being frequently altered manually because of errors arising from the input of incorrect information, that reconciliations of monthly issues of pay were not being carried out and that data and records were not subject to regular internal check. Some incorrect payments had occurred and as it appeared that the procedures and controls relating to the calculation and payment of salaries were inadequate I sought the observations of the Accounting Officer. He informed me that many of the errors, which related to coded differences between teachers’ personnel and financial positions, did not give rise to overpayments. The errors with financial implications were due to incorrect coding of data; these had been corrected and the amounts overpaid had been or were being recovered. He stated that it was hoped that greater familiarisation on the part of the staff with the requirements of the computer and an insight into the principles on which it operates would help to eliminate errors in future. He added that reconciliations of monthly pay issues are now being carried out on a continual basis and that it was proposed, within staffing limitations, to initiate regular checking of data and records on a percentage basis.”

Mr. Mac Gearailt.—This paragraph refers to errors which occurred in the operation of the Department’s computerised system for the payment of primary teachers’ salaries. Some, but not all, of these errors gave rise to overpayments. The Accounting Officer’s explanation in the matter is included in the paragraph.

200. Chairman.—You appear to have had some teething problems in relation to primary teachers’ salaries. Has the incidence of error been cut significantly?

—It has been cut down. The year 1975 was a bad year because there were five different salary changes in the course of the year and it was very difficult to keep track of all of them.

201. Paragraph 34 of the Report of the Comptroller and Auditor General reads:

“The arrangements for the payment of primary teachers’ salaries provide that when a teacher notifies the Department that he has not received his salary payable order he is requested to sign a declaration that, on the understanding that a duplicate order is issued, he will return the original order to the Department if he subsequently receives it.

In the course of audit it was noted that overpayments occurred as a result of the cashing by some teachers of both original and duplicate orders. In reply to my inquiry the Accounting Officer stated that, where this occurs, it is the policy of the Department to deduct the entire overpayment from the next salary payment to the teacher. As orders remain valid for some months, it may not be possible to verify immediately whether or not the original has been cashed and the Department has no option but to issue a duplicate on receipt of the declaration from the teacher. He also stated that, of the total number of cases in which duplicate orders are issued, very few arise where both original and duplicate are cashed. To guarantee against this the Department would have to wait until the original order was out of date and, as the present system of recovery of overpayments seems adequate, such action would not appear necessary.

The Accounting Officer explained that the situation which gives rise to the greatest number of overpayments and which involves the largest amounts overpaid, arises when teachers leave the teaching service during vacation periods without signing off the school returns as having resigned and without giving due notice to the school manager. In such cases salary is issued for the vacation period irregularly since, in order to qualify for payment for vacation period, a teacher must serve on the date the school closes for vacation and must resume on the date it reopens and serve for a reasonable period thereafter. In the case of summer vacation a considerable overpayment may occur. The Accounting Officer added that, in an effort to overcome this situation, it was proposed, in regard to the summer 1976 vacation, to seek from school managers, before 1 July 1976, such information as they might have regarding teachers who would not be resuming after the vacation.”

Mr. Mac Gearailt.—This paragraph refers to overpayments of teachers’ salaries due (a) to the encashment of both original and duplicate pay orders and (b) to the payment of salaries to teachers for vacation periods although the teachers concerned were not entitled to such payment since they failed to resume duty after the vacation periods. The observation of the Accounting Officer on the circumstances in which these overpayments occur are included in the paragraph.

202. Chairman.—I presume the overpayments were all recovered?

—They were all recovered.

Mr. Mac Gearailt.—If I might make one comment on overpayments due to duplicate orders. I wonder why the original orders cannot be cancelled, as happens everywhere else. When you issue a duplicate why can you not cancel the original?

—We always cancel them as fast as we can but the Paymaster General’s Office regards orders as current for three months and I understand in practice they allow six months currency.

If you cancel the order as you issue the duplicate then, as far as you are concerned, you are in the clear. If the Paymaster General cashes the two orders, then the responsibility is his.

—We cancel as fast as we can.

Deputy V. de Valera.—And, as soon as you cancel, is the Paymaster General not notified?

—He is, yes.

Then it is out of your hands?

—Yes.

Chairman.—What is the position now?

—Sometimes it is very difficult because people are not always that readily focussed on the dates of payable orders. It is very easy when there is delay in payable orders coming along for someone to cash two in good faith.

Mr. Mac Gearailt.—When a teacher applies for a payable order, saying he did not get his monthly payable order, automatically you produce a duplicate? I would have thought that the first thing you would do then would be to cancel the original?

Deputy V. de Valera.—You are not a managing director or an accountant. They would tolerate very few repetitions of that kind of thing. If they did, they would not last very long.

—I imagine they would last indefinitely so long as there was not an overpayment.

That is what I am saying.

—If there was an actual overpayment? But if the payable order did not arrive he would issue a duplicate because his intention would be to keep his staff happy.

Deputy N. Andrews.—One could keep staff very happy that way.

203. Chairman.—You have that problem too. On the question of refunds being demanded from teachers who have resigned, retired or left the country, you could cause hardship by demanding a lump sum, certainly in cases of resignation or retirement?

—We try to get the money back as quickly as we can. We have to recognise hardship in some cases and give an extended period for a refund.

You accept instalments?

—Yes. We try to recover from future payments as well.

204. Do you have many instances of people leaving the jurisdiction for some very good reason from whom you cannot recover overpayments?

—We have some few—not very many.

205. Paragraph 35 of the Report of the Comptroller and Auditor General reads:

“In the course of audit it was noted that the arrangements for the secure custody of blank and preprinted payable orders utilised for the payment of primary teachers’ salaries were inadequate and I sought the observations of the Accounting Officer. He has informed me that the Department is in consultation with the Office of Public Works regarding the provision of a strong room and that, in the meantime, procedures have been laid down to ensure the safe custody of these orders. I have not yet had an opportunity of examining these procedures.”

Mr. Mac Gearailt.—This paragraph deals with shortcomings in the control of both blank and preprinted payable orders used for the payment of teachers’ salaries. This matter came to light during the 1975 audit. A subsequent examination carried out by my officers in April 1977 showed that the position had improved and that a strict security system was being operated. A strong room for the storage of the payable orders had not yet been provided and I understand that this is still the position. —The position in regard to the strong room —I am not quite sure how much detail one should release for publication in relation to things like this—is briefly that when we tried to instal it in the premises we are using we found the expenditure ran to something in the order of £12,000 or £13,000 and the Board of Works wanted an assurance that we would be continuing to use those premises. Most of our premises are not 100 per cent suitable for operations of this kind. It was understood—it still is— that we will have alternative premises within, perhaps, the next six months and it is intended the strong room will be supplied in different premises.

206. Chairman.—Paragraph 36 of the Report of the Comptroller and Auditor General reads:

“I noted that consultants, who were engaged with the approval of the Minister for Finance from November 1972 to May 1975 for the purpose of designing the computerised payroll system referred to in paragraph 33, estimated in February 1973 that under the new system there would be a 40 per cent, saving of the time of some staff and a 50 per cent. to 60 per cent. saving of the time of others. This estimate was revised in September 1975 to a 30 per cent. saving in staff time, but an Organisation and Methods survey carried out jointly by the Department and the Department of the Public Service in September 1975 indicated that there was little possibility of staff savings as a result of computerisation. I sought the observations of the Accounting Officer and he informed me in May 1976 that, in the light of the Organisation and Methods survey report and the experience to date, it would appear that the estimate of staff saving made by the consultants was too high. He further stated that it was hoped that the possibility of some staff saving would be realised when the initial problems of a computerised payroll have been overcome and the Department has had experience of the system as planned. He added that it should also be noted that the question of saving had to be considered in the context of the increase in the number of teachers being catered for, the frequency of changes in pay and allowances, the introduction of P.A.Y.E. and the increase in the general workload of the section concerned.”

Mr. Mac Gearailt.—One of the benefits, which it was suggested, would follow the introduction of the computerised payroll system for primary teachers, would be a substantial saving of staff time. In the event such a saving has not been realised. In the circumstances I sought the observations of the Accounting Officer and these are spelt out in the paragraph.

207. Deputy V. de Valera.—Computerisation often does not bring the forecast benefits at once?

—Not always. There was probably an element of optimism in the forecast of staff savings. This had not come to my direct attention when the answer went in, but there is an element of saving in overtime on these payments that has not been taken into account. Certainly it has not resulted in the saving on full time staff that was expected. This is due largely to the fact that the operation has become more complicated and we have larger numbers to cope with.

There are always teething troubles with a computer system.

Chairman.—There is some saving?

—Yes, on overtime.

208. Paragraph 37 of the Report of the Comptroller and Auditor General reads:

“Subhead C.9.—Special Educational Project

Reference was made in previous reports to a special educational project being carried out by the Department of Education in the Rutland Street schools area of Dublin in association with the Van Leer Foundation of the Netherlands. The project was aimed at offsetting the educational disadvantages of children in the area and was to be financed over a five-year period broadly on the basis that the Department would meet such educational expenditure as would normally fall to be met from voted moneys and one half of any abnormal expenditure, the balance being met by the Van Leer Foundation.

Total expenditure on the project to 31 December 1975 amounted to £372,667 including £106,595 in the year under review. The contribution received from the Van Leer Foundation and credited to appropriations in aid since the commencement of the project amounted to £109,328. As noted in the Appropriation Account, the Van Leer contribution ceased in 1974 following the formal conclusion of the experimental programme operating at preschool and junior school levels. Pending a Government decision as to the future of this project the Minister for Finance has approved its continuation by the Department of Education and the charging of the expenditure to this subhead.”

Mr. Mac Gearailt.—The Special Project referred to in this paragraph commenced in 1969. As stated the Van Leer contributions towards the costs ceased in 1974 when the experimental programme formally concluded. I understand however that Government approval for the continuance of the project was given in November 1976 and that it is still being carried on.

Chairman.—We should compliment the people involved in this project because this is one of the very few projects that is of immense benefit to underprivileged children.

—The problem arose because the Van Leer Foundation were not prepared to fund it. They were prepared to fund the senior classes but not the junior classes.

209. Paragraph 38 of the Report of the Comptroller and Auditor General reads:

“Subhead E.—Building, Equipment and Furnishing of National Schools

As stated in paragraph 17, provision for grants towards the cost of building, improvement, equipment and furnishing of national schools, which was formerly made in Vote 9—Public Works and Buildings, has been transferred to this subhead with effect from 1 January 1975.”

Mr. Mac Gearailt.—Paragraph 38 is merely for information.

210. Deputy V. de Valera.—On subhead A.1—Training Colleges—there was a very substantial comment in the 1974 account in connection with the training college in the Building Unit. The Accounting Officer knows what I am referring to. What is the position in regard to that now on the broad basis of the 1974 Report of this Committee?

—We now have a figure of final costs which is agreed between the Building Unit and the contractors. There is an item of the order of £30,000 outstanding which is claimed by the contractor as being due in respect of the interruption of work which occurred on the contract.

211. Is the position that the matters which were the subject of paragraph 19 in the 1974 Report of the Committee are now satisfactorily resolved with the exception of the indication the Accounting Officer has given?

—There is one other item in regard to that. That is the question of a contribution being made by the college in respect of the amount that was in question. That matter is still the subject of correspondence between the Department of Education and the Department of Finance.

Mr. Mac Gearailt.—We have not seen the final account yet. We certainly have not cleared the account yet. The local contribution is a matter between the Department and the Department of Finance. The Department of Finance will, no doubt, have the last word on that.

212. Deputy V. de Valera.—As far as the Comptroller and Auditor General is concerned, coming to the accounts we are dealing with, there is no matter continuing from paragraph 19 of the previous report.

—No.

213. Deputy N. Andrews.—On subhead C.7.—Aid towards the cost of School Books —£66,200 less than granted. In view of the pressure that comes upon public representatives in the administration of the free school book scheme, how is it that we have arrived at a situation where we would have that much less than granted?

—The position is that at the time of presenting the original estimates a sum was included to provide for an increased rate in grant and this ultimately was not sanctioned, and was not paid. That explains it.

Chairman.—It was not sanctioned by whom?

—The Minister for Finance.

Deputy N. Andrews.—So that is where that figure comes from?

—Yes.

Deputy O’Brien.—In other words it was not granted.

—Technically it was granted but the expenditure of it was not authorised.

Deputy N. Andrews.—It shows a lack of flexibility in the whole scheme, does it not?

—Not in the scheme. The opposite is the case. It highlights a flexibility that perhaps should not be there. If it is not absolutely clear that the expenditure is going to be sanctioned, the question arises as to whether it should really be voted.

Chairman.—The reverse should be the position. This is serious.

Mr. Mac Gearailt.—This is not unusual. After all, the Dáil will approve a large sum for salaries but unless the salary scales are approved by the Minister for the Public Service the Department cannot pay them. This is the same thing. The Dáil approved the money but the proposals in the revised scheme were not approved.

—The sanction was not obtained.

214. Deputy V. de Valera.—What do the Department of Finance say to that?

Mr. C. K. McGrath (Department of Finance).—The case was considered by the Department of Finance and the Minister in his wisdom declined to increase the rate of grant in that year.

Deputy V. de Valera.—This increase is made in spite of the Department?

—Yes.

Mr. Mac Gearailt.—It has always been the accepted principle that the making of a provision in the Estimate is not sufficient authority for the payment unless the necessary ministerial sanction has been obtained.

Mr. McGrath.—That is so.

Deputy V. de Valera.—In previous reports the Committee have emphasised this point in general terms. We would like to insist that the sanction is obtained properly by Departments. The Department of Finance have the overriding responsibility here and they must be facilitated in discharging that responsibility.

VOTE 30—SECONDARY EDUCATION.

Mr. D. Ó Laoghaire further examined.

215. Chairman.—Paragraph 39 of the Report of the Comptroller and Auditor General reads:

“Subhead B.—Incremental Salary Grant

In the course of audit it was noted that a number of payable orders, prepared for issue to teachers and included in the schedule of authorised issues of payable orders forwarded to the Paymaster-General’s Office, remained unissued and uncancelled in the Department for at least six months following the issue of revised orders to the teachers. As there was a danger that a loss of public funds could arise if the original orders were cashed I sought the observations of the Accounting Officer on the failure to cancel them promptly. He informed me that it was mainly owing to pressure of work that these payable orders were not cancelled regularly and promptly but that arrangements had been made to ensure that, in future, orders not cleared within a month are cancelled.”

Mr. Mac Gearailt.—We are concerned in this paragraph with the failure of the Department of Education to cancel promptly a number of payable orders in respect of teachers’ incremental salaries although revised orders had been issued to the teachers concerned. The uncancelled orders had been included on the schedule forwarded to the Paymaster General and there was a danger that they could have been cashed if they had fallen into wrong hands. The explanation furnished by the Accounting Officer in the matter is included in the paragraph.

A recent examination of the position by my officers indicated that the new arrangements referred to by the Accounting Officer were then operating satisfactorily.

—This again is the old problem. There is an increase of 20 per cent in the number of teachers involved. The staff were under very severe pressure, particularly in 1975, when there were changes in rates. It is not a matter of a simple change in salaries and rates on the secondary side. There are involved also principals’ allowances and allowances in respect of posts of responsibility and the operation is very complicated. We are doing our best to ensure that cancellations will be made promptly.

216. Deputy N. Andrews.—Would computerisation help in that regard?

—It is in progress.

Chairman.—For secondary teachers?

—Yes.

217. Paragraph 40 of the Report of the Comptroller and Auditor General reads:

“Subhead B.—Incremental Salary Grant

Subhead J.1.—Comprehensive and Community Schools—Running Costs

An examination by my officers of the system of accounting for salaries paid to secondary, comprehensive and community school teachers showed that deductions made from the salaries in respect of income tax, social insurance, voluntary health insurance, etc., were not being paid over promptly to the Departments and other Agencies concerned and that this resulted in the deductions made in 1974 and 1975 not being charged to the Vote in the correct year of account. The examination also showed that reconciliations between amounts deducted and amounts paid over were not being carried out on a regular basis.

I drew the attention of the Accounting Officer to these deficiencies in the accounting procedures and he informed me that they arose because of:—

(i)pressure of work, shortage of staff and staff changes;

(ii)the introduction, as from 1 April 1974, of pay-related Social Welfare contributions and the removal of the salary ceiling for normal Social Welfare contributions—this created a large volume of new work;

(iii)the incomplete data given on the schedules of salary payments resulting in a great deal of reconciliation work before payments on foot of deductions made can be authorised, and

(iv)the change in the financial year in 1974 which brought the end of the year to 31 December—immediately after the Christmas break—rather than 31 March as formerly.

He also informed me that the accounting system had been improved in order to ensure that, in future, remittances would be made on a monthly basis to the bodies concerned and that every effort was being made to effect reconciliations between amounts deducted and amounts paid over.

The Accounting Officer added that it was not possible to adjust the incorrect charge in 1975 as the year was closed when the matter was brought to his notice but that since the beginning of 1976 deductions from the salaries of these teachers are being charged correctly.”

Mr. Mac Gearailt.—The charge to the Vote in respect of teachers’ salaries comprises the net salaries paid plus deductions in respect of income tax, social insurance, voluntary health insurance, superannuation contributions and so on. The charge in respect of the deductions is set up as and when they are paid over in bulk to the Department or Agency concerned, for example, Revenue Commissioners, Department of Social Welfare, Voluntary Health Insurance Board and so on. If there is a time lag in making the payover at the year end the charge to the Vote will be understated and this in fact happened in 1974 and 1975. Moreover failure to reconcile on an ongoing basis the total of deductions made under each head with the total paid over to the relevant receiving agency could mean that the Department are not aware at any particular point of time whether they stand in a credit or debit position in relation to that agency.

The Accounting Officer has indicated the difficulties in the Department which gave rise to these accounting shortcomings and these are summarised in the paragraph. Briefly what we are talking about here is that the charge set up in the Appropriation Account for salaries, represents the net salaries paid and then as income tax deductions and deductions in respect of voluntary health insurance et cetera are paid over they also are charged. If these pay orders are delayed it means they may be charged against the following year’s account. Therefore the figure in the Appropriation Account is understated to that extent. The Accounting Officer has indicated the problem.

218. Deputy V. de Valera.—The delays referred to in paragraphs 39 and 40 seem to indicate difficulties in making the accounting system within the Department function properly. What is the extent of the difficulty? Does it amount almost to a breakdown in the accounting system from the point of view of the requirements of the Comptroller and Auditor General and of this Committee?

—That is true in respect of 1975. The pressure in this area then was such that the accounting procedures were not adequate.

Then, there was a breakdown?

—Yes. We are hoping that computerisation will prevent this happening in the future.

219. Chairman.—Are deductions on a monthly basis now?

—Yes.

Presumably this will rectify any lack there may have been in accounting?

—Yes, but they must be balanced at the end of the year.

220. Paragraph 41 of the Report of the Comptroller and Auditor General reads:

“The rules which govern payment of incremental salary to teachers were amended from 1 January 1975 to provide for the payment to teachers on maternity leave of full incremental salary for a period of 12 weeks less any amount of social welfare maternity allowance payable to them. As it was noted that salaries continued to be paid in full to teachers on maternity leave, I asked for information regarding the procedures adopted by the Department to implement the terms of this amendment. I also inquired from the Accounting Officer whether it was proposed to amend the incremental salary rules to provide for the deduction of social insurance benefits, payable in respect of ordinary sick absences, from the salaries of teachers who are entitled to full pay during such absences.

The Accounting Officer has informed me that, for the future, immediately an application for maternity leave is received from a teacher who is fully insurable under the Social Welfare Acts, she will be requested to furnish details of maternity benefit as such benefit is obtained, these details to be supported by confirmation from the Department of Social Welfare. In the event of failure to submit the required information, payment of further salary would be suspended until such time as this requirement was complied with. He also stated that consideration was being given to the action which might be appropriate in the case of fully insured teachers who were granted maternity leave with full pay in the period 1 January 1975 to 31 July 1976.

In regard to other social insurance benefits payable in respect of sick absences the Accounting Officer stated that it is proposed to introduce the necessary amendment of the rules with effect from 1 August 1976 in order to provide for the deduction of such benefits from the salaries of teachers who are entitled to full pay on sick leave.”

Mr. Mac Gearailt.—This paragraph deals with the position of teachers who were in receipt of full incremental salary during absences on maternity leave when, as insured persons under the Social Welfare Acts, they are entitled to social welfare maternity benefit. It also deals with the deductions of other Social Insurance benefits payable in respect of ordinary sick absences in the case of teachers entitled to full sick pay during such absences. The action proposed by the Department in such cases as outlined by the Accounting Officer is indicated in the paragraph.

221. Deputy V. de Valera.—To what extent can we disentangle the accounting here from management policy? To what extent is it a question of the managerial policy of the Department which the Minister, through the Accounting Officer, is entitled to exercise?

Mr. Mac Gearailt.—I should imagine that both the Minister for Education and the Minister for Social Welfare as well as Government policy would be involved here. My problem was that teachers were being paid in full while they were receiving maternity benefit so that there seemed to be an element of double pay involved.

Deputy V. de Valera.—It is right that the Comptroller and Auditor General should draw attention to this but I am wondering how far it is a matter of policy for the Department to say this is all right. I know that the matter has been argued in other places besides the State service, but if there was an inadvertent issue of bonuses, that would be questionable. If, on the other hand, these payments were made in full pursuance of a considered policy decision—I do not mean a formal decision but continued recognised conscious policy—it is a different matter and is out of our hands. I suppose we must leave the matter to the Department of Education and also to the Government.

Mr. Mac Gearailt.—The Accounting Officer has shown his hand in his reply as indicated in the paragraph by saying that steps were being taken to eliminate the problem.

—We are trying to deal with it but there is at least some element of an accounting problem involved.

Deputy V. de Valera.—In other words, it was happening without your knowledge and that justifies the Comptroller and Auditor General raising the matter.

222. Chairman.—Paragraph 42 of the Report of the Comptroller and Auditor General reads:

“Subhead J.2.—Secondary, Comprehensive and Community Schools—Building Grants and Capital Costs

In paragraph 37 of my previous report I stated that I had communicated with the Accounting Officer in regard to the failure to collect local contributions towards the cost of eleven community schools. In reply to that inquiry the Accounting Officer stated that the Minister for Education had informed the Episcopal Commission and the Council of Managers of Catholic Secondary Schools in December 1970 that it was expected that the local contribution for each community school, to be shared between the Vocational Education Committee and the Secondary Schools concerned, would be 10 per cent of the initial capital expenditure required for the site, buildings, etc., but in June 1974 the Minister for Finance agreed that site costs could be excluded. The Accounting Officer also stated that negotiations in individual cases had not been completed at the date of his reply (23 December 1975) because of the desire to draw up, first of all, an agreed version of a Deed of Trust. He added that there was then an agreed version of such a Deed and that before negotiations were entered into with the individual groups of school authorities immediately concerned it was desired to reach agreement in principle with the ecclesiastical authorities in regard to the amount of the local contribution to be inserted in the Deed. I have recently communicated again with the Accounting Officer regarding the collection of the local contributions.

Expenditure to 31 December 1975 on the erection of fourteen community schools amounted to £5,395,703.”

Mr. Mac Gearailt.—This paragraph deals with the failure of the Department of Education to collect local contributions towards the cost of Community Schools. This matter was referred to in my 1974 Report and was considered by the Public Accounts Committee in December 1976 when dealing with that Report. The Committee took a serious view of the long delay in collecting these local contributions and requested that all possible steps be taken to bring this matter to a satisfactory conclusion without further delay. In his Minute dated 6 December last on the Committee’s Report the Minister for Finance states that he was informed by the Department of Education that this matter had not yet been finalised.

223. Chairman.—I presume we can expect that the problem of the local contribution towards the cost of community schools will be solved. I appreciate the difficulties in collecting the local contributions. It is a human problem which also arises in the case of national schools.

—It is a problem in that sense but it is also a problem for me in a different sense which almost impinges on policy. I do not want it to be assumed that I am taking refuge in that. I am not. I have been very anxious to collect these local contributions. We had agreement between the Minister for Education and the Minister for Finance that they could be collected on the basis of 5 per cent from the vocational education committee and 5 per cent from the secondary school interests involved. There was a question of an attempt to collect the vocational educational committee contribution from the local rates and, as you can imagine, that produced problems for the committees. That was eliminated and we were in a position to go ahead on the basis of the arrangements in the deeds of trust and so on. An event in July supervened and as a result of that I am not in a position to go any further with it for the moment. The local contributions have not yet been collected.

Deputy V. de Valera.—The matter still remains that the Committee have drawn attention to this matter following the Report of the Comptroller and Auditor General and I suggest that we have not any reason for changing our attitude.

224. Chairman.—Paragraph 43 of the Report of the Comptroller and Auditor General reads:

“I referred in paragraph 39 of my previous report to the charging of expenditure on the building of three vocational schools to the Vote for Secondary Education and I pointed out that such expenditure was outside the ambit of the Vote. The three schools are located at Cavan, Athlone and Tullamore. In December 1975 the Accounting Officer informed me that during negotiations between the Department of Education, the Department of Finance and the World Bank in 1970-71 the Bank accepted new vocational schools at Cavan and Athlone among the community/comprehensive schools the cost of which it agreed to finance in part by way of loan facilities made available to the Exchequer. Tullamore was one of the centres proposed for a community school but when local agreement for such a school was not forthcoming it was agreed to proceed with the erection of a vocational school there to be financed in the same way as the vocational schools at Cavan and Athlone.

It was a requirement of the World Bank that a component systems approach be used in the design and construction of the school buildings. Investigation of such systems in other countries indicated that these systems were not appropriate to Ireland and, with the approval of the World Bank, the Department appointed a firm of consultants to develop a simple system which would give the full cost benefits of a systems approach and of standardisation and bulk purchasing. The system so developed required that the schools be grouped together in programmes and this meant that there must be only one client for all the schools. Cavan was included in the first programme of ten schools and Athlone and Tullamore in the second programme of six. A similar approach, i.e. bulk buying and standardisation, was adopted for the procurement of equipment and furniture for these schools and considerable savings in construction, furnishing and equipment costs and in professional fees were effected in this way. The Minister for Education was the client in the case of both programmes and was responsible for all expenditure. Payment was made out of voted moneys available to him. As the arrangement was on the basis of the acceptance by the World Bank that these schools were in the nature of community/comprehensive schools the expenditure was charged to the subhead for such schools in Vote 30—Secondary Education. The Department of Finance was informed in March 1972 of the intention to make all payments arising under the programme covered by the World Bank loan out of the Vote for Secondary Education.

The Accounting Officer added that the financing of all future similar cases which come under the World Bank loan would be made from loans obtained by the Vocational Education Committees from the Local Loans Fund.

In the year under review further expenditure of £227,424 on the construction of these three vocational schools was charged to the Vote. In addition sums amounting to £254,940, including £119,420 in 1975, were expended on the equipping of these schools bringing the total expenditure to £1,741,535 at 31 December 1975.”

Mr. Mac Gearailt.—This paragraph deals with the charging to the Vote for Secondary Education of expenditure on three Vocational Schools, expenditure which was clearly outside the ambit of the Vote. This constituted a breach of a fundamental principle of Government accounting. The matter, which was raised in my 1974 Report and considered by the previous Committee, has already been dealt with. On that occasion the Accounting Officer gave an assurance that such a breach would be avoided in the future.

The present Report is dated 9 July and at that date the matter had not been considered by the previous Committee. Hence the reference to it here.

—This resulted from our involvement with the World Bank and since that involvement is over it will not happen again.

VOTE 31—VOCATIONAL EDUCATION.

Mr. D. Ó Laoghaire further examined.

225. Chairman.—Paragraph 44 of the Report of the Comptroller and Auditor General reads:

“Subhead A.—Annual Grants to Vocational Education Committees

Subhead I.1.—Regional Technical Colleges—Running Costs

The provisions made in these two subheads are based on estimates furnished by Vocational Education Committees. Payments made to the Committees represent the full amount of such estimates as approved by the Department. Variations between estimates and actual expenditure, ascertained when accounts, certified by the Chief Executive Officers, are received in the Department, are taken into account in determining the amount of subsequent payments to be made to the Committees. The accounts, which are subject to audit by Local Government auditors, are made available to me. The Accounting Officer has furnished me with the following information regarding the position of the audit of the accounts of the 38 Vocational Education Committees and the 8 Regional Colleges.

Mr. Mac Gearailt.—This paragraph summarises the basis on which payments from these two Subheads are made to the vocational education committees. I do not audit the accounts of the committees nor the accounts of the regional technical colleges administered by them. These are audited by Local Government auditors whose certificates I accept as evidence that the voted moneys have been expended on the purposes for which they were voted. The paragraph also indicates the overall position of the audit of these accounts at the date of my Report—July 1976. Information given to me in June 1977 by the Accounting Officer regarding the audit of these accounts would appear to suggest that the position had deteriorated somewhat.

—This is true. It is a question of the burden on the Local Government auditors. The last complete audit was 1972-73. I understand that in 1973-74 33 committees were audited from a total of 38; in 1974 22 committees were audited; in 1975 eight committees were audited and in 1976 only one committee has been audited so far.

Chairman.—It is a serious matter.

—It is a question of the burden on the Local Government auditors.

226. Deputy V. de Valera.—Is there any practical way that pressure can be brought to bear?

—It is a question for the Department of Local Government. The argument has been advanced that these accounts should be audited by the Comptroller and Auditor General. It is a matter of where one puts the burden.

Mr. Mac Gearailt.—I have been in touch with the inspector of the Local Government audit on the matter. The problem was a matter of staffing but I understand that his staff numbers have been increased fairly recently.

Deputy V. de Valera.—There is a question of organisation here. It is a matter of how far the Comptroller and Auditor General can carry such detailed loads himself and how far he has to accept these certificates. The Committee would want to be rather careful about suggesting overloading the Comptroller and Auditor General with local matters. How would pressure be brought to bear on the local institution responsible so that the Comptroller and Audtior General would be supplied with the information in precisely the same way as we have insisted that Departments would supply him with information?

227. Chairman.—Am I right in saying that the accounts come before us for information only?

Deputy V. de Valera.—No. The certificate of the auditor in these cases is an essential document for auditing the public accounts.

—I am not sure that is correct. I have the impression that the discharge of the Local Government auditor is sufficient for the local authority and that what the Comptroller and Auditor General is auditing is the issues by the Department of Education.

Mr. Mac Gearailt.—There is a charge in respect of the vocational education committees and I have no way of finding out so I have to accept the reports of the Local Government auditors.

Deputy V. de Valera.—He does need those local reports.

—That is a matter for the Comptroller and Auditor General. Does he need those reports or does he simply need to be satisfied that the Local Government audit is operating?

Mr. Mac Gearailt.—Matters brought to attention by the Local Government auditors in their reports which should be brought to the attention of this Committee are included in my reports from time to time and will continue to be.

VOTE 32—RESIDENTIAL HOMES AND SPECIAL SCHOOLS.

Mr. D. Ó Laoghaire called.

No question.

VOTE 33—HIGHER EDUCATION.

Mr. D. Ó Laoghaire called.

No question.

The witness withdrew.

The Committee adjourned.