Committee Reports::Report - Appropriation Accounts 1976::02 November, 1978::MIONTUAIRISC NA FINNEACHTA / Minutes of Evidence


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MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 2 Samhain, 1978

Thursday, 2nd November, 1978

The Committee met at 11 a.m.

Members Present:
Deputy	N. Andrews,	Deputy	Morley,
„	Belton,	„	Woods.

DEPUTY O’TOOLE in the chair.

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

MINUTE OF THE MINISTER FOR FINANCE ON COMMITTEE’S REPORT ON THE APPROPRIATION ACCOUNTS, 1975

Mr. T. F. Ó Cofaigh called and examined.

174. Chairman.—The first item on the agenda is the Minute of the Minister for Finance on the Committee’s Report on the Appropriation Accounts 1975.* The position with regard to the Minute is that we got it a fortnight ago and the Committee have not had a chance to have the contents considered in detail so the suggestion is that we confine our comments today to two paragraphs of the Committee’s previous Report which relate specifically to you and your Department, namely, paragraphs 19 and 37. We then propose to discuss the other paragraphs with the appropriate Accounting Officers as they come before us. I would like to say, however, if the Committee feel it is necessary, we may ask you to come back at a later stage as you have overall responsibility for the contents of the Minute. These are the Committee’s views and this is our proposal for the treatment of the Minute.

—I will be glad to help in any way I can. If you want me to appear at a later stage I shall be glad to do so.

It just may arise or it may not.

—I should imagine that most of the matters would be matters the Committee would wish to pursue with the Accounting Officers themselves. If the Committee feel, however, that the Department of Finance has some overriding interest on possible comment by the Accounting Officer—

We are just keeping our options open.

175. The Finance Minute on paragraph 19 of the Committee’s previous Report— Clearance of Cashed Payable Orders by the Paymaster General—states in the first subparagraph:

The Minister is still awaiting a reply on the question of the legal position of the Paymaster General’s Office in regard to the claim for recovery of the amounts paid out to certain banks on foot of payable orders which were subsequently found to be fraudulent.

—I am sure the Committee will be glad to hear that we have, in fact, received legal advice quite recently and that legal advice supports the view that we have a case for recovery of this money from the banks concerned. It will be a matter now of practical politics—in other words, having a word with the banks to see if they want to put us to overt proceedings or whether we can recover the actual outstanding moneys more amicably. I would be optimistic about doing that now. The other aspect of the matter is the capacity of the Paymaster General’s Office to clear payable orders promptly so as not to give rise to delays between their encashment by the banks and their subsequent checking in the Paymaster General’s Office. We have, I am glad to inform the Committee, made arrangements very recently for this computerisation process to be speeded up drastically and we hope this will be brought to a successful conclusion very soon. On both counts there is, I think, a very optimistic indication that things will work out satisfactorily.

176. Deputy Woods.—What sort of money was involved?

—The original amount was something—I am speaking off the cuff now—around £4,500, but it came down to some £3,900 eventually. That is the figure outstanding now between ourselves and the banks. I might say this is quite an isolated thing seeing that in subsequent cases where questions arose on payable orders the banks have reimbursed the Paymaster General’s account. The system gave rise to a good deal of paper work, but the position now is coming to a successful conclusion.

As you suggest, having had legal advice, the problem seems to be resolved and it is presumed the banks will accept that?

—I would hope now that common sense would prevail and we will get the outstanding amount. It is a trifle so far as the banks are concerned but, at the same time, we have to recognise the banks have a point of view.

177. Chairman.—In the event of having to take overt legal action, that could, I presume, drag on for some time. You have established your legal position in so far as that is possible?

—It was rather forthcoming for a legal opinion. It does, I think, establish the position to our satisfaction. Of course, the courts ultimately would decide.

You might enter the area of diminishing returns if you were caught on the wrong side in that kind of sum?

—I need hardly stress that we have to bear that consideration in mind, but I would hope that would not happen.

178. Deputy Woods.—I presume there is a matter of principle involved here. Bigger sums were involved on other occasions?

—Yes, that is so.

179. Chairman.—We will now move on to paragraph 37—Provision of Secretarial Service for the Committee. On this particular point the case for an adequate secretarial service at the appropriate grade level has been raised on many occasions, including the occasion of your last appearance before us, and a compelling case was put by the Committee to you and your colleague in the Department of the Public Service to resolve the problem and we were hopeful our exhortations had not fallen on deaf ears. The reason I raise this matter with you again today is to emphasise the serious weakness in the control mechanism for monitoring public expenditure. Now, as you are aware, this control mechanism is essentially a triumvirate consisting of this Committee, the Comptroller and Auditor General and your Department. Without wishing to bring down the adequacy of the level of staffing of the latter two at this point there can be no doubt now as to the position of this Committee. If there is any weakness in any constituent part of the tripartite control mechanism it follows that the effectiveness of the entire body is vitiated. The Committee are satisfied that you have no desire to see that this debility, shall I say, is prolonged. The position as we see it in the Committee is nothing short of reprehensible at the moment and the problem has manifested itself on many occasions recently. As Chairman, I would like to point out that I do not wish to allow this to continue and to act as Chairman of a Committee which is not being briefed. A further case will be made to the Department of the Public Service and your ex officio intervention at this stage would be very much appreciated. I cannot emphasise strongly enough the feelings of the Committee on this. It is time, because of the important nature of our work, that we should be given the appropriate level of secretarial assistance and, indeed, might I say that our Clerk, due to the enormous workload in the Questions Office, is doing what I would regard as an impossible job, and doing it well as far as we are concerned. We feel it is unfair to him and definitely unfair to the Committee to allow this to continue.

—I wrote to the Department of the Public Service following my appearance before the Committee last year and asked them to reconsider your needs speedily. I understand that, to some extent, they have done so. They have provided some extra staff, which involved the reorganisation of the questions work. I would think in this matter it is the Committee and myself persuading the Department of the Public Service. If a case were made in writing to the Clerk of the Dáil on the lines that you have just presented to me, I would be hopeful that it would be heard by the Department of the Public Service. Certainly I will weigh in behind the Committee in support.

Thank you. I note your unqualified support in this demand. You can take it that we will be making a case in writing to the Clerk of the Dáil.

GENERAL REPORT

Mr. T. F. Ó Cofaigh called.

180. Chairman.—Paragraph 1 of the Report of the Comptroller and Auditor General reads as follows:

“Submission of Appropriation Accounts

The Statutory date for the submission to me of Appropriation Accounts for 1976 was 30 April 1977 and at that date the following Accounts had not been received:—

Vote No.	Title of Vote
8.—	Office of the Revenue Commissioners
9.—	Public Works and Buildings
16.—	Valuation and Ordnance Survey
17.—	Rates on Government Property
*27.—	Charitable Donations and Bequests
29.—	Office of the Minister for Education
30.—	Primary Education
31.—	Secondary Education
32.—	Vocational Education
33.—	Residential Homes and Special Schools
34.—	Higher Education
40.—	Fisheries
41.—	Labour
44.—	Posts and Telegraphs
47.—	Foreign Affairs
48.—	International Co-operation

With the exception of the Account for Vote 27.—Charitable Donations and Bequests, these Accounts have since been received.

*The Account for Vote 27 was received after the date of this Report and is included in this volume (see also paragraph 22).”

Mr. Mac Gearailt.—The legislation governing the submission of Appropriation Accounts requires that they be submitted to me by 30 April in each year. This paragraph draws attention to the late submission of Appropriation Accounts for a number of Votes. I may say that they were all submitted by the end of June, with the exception of one, which is covered by the footnote. Following last week’s discussion, the Committee will be aware of some of the circumstances surrounding that case.

181. Chairman.—Paragraphs 2 to 6, inclusive, of the Report of the Comptroller and Auditor General read as follows:

“*Outturn of the Year

The audited accounts are summarised on page xlii. The amount to be surrendered as shown in the summary is £44,073,700 arrived at as follows:—

Gross Expenditure		Estimated	Actual
	£	£	£
Original estimates	1,656,037,664
Supplementary and Additional estimates	25,974,380
		1,682,012,044	1,636,868,834
Deduct:—
Appropriations in Aid
Original estimates	134,105,664
Less Supplementary estimates	1,896,000
		132,209,664	131,140,154
Net Expenditure		£1,549,802,380	£1,505,728,680
Amount to be surrendered		£44,073,700

This represents 2.8 per cent of the supply grants, as compared with 1.9 per cent. in the previous year.

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

*The Account for Vote 27—Charitable Donations and Bequests, outstanding at 1 July 1977, is included.

Exchequer Extra Receipts

Extra receipts payable to the Exchequer, as recorded in the Appropriation Accounts, amounted to £11,180,506.

Surrender of Balances on 1975 Votes

The balances due to be surrendered out of Votes for the public services for the year ended 31 December 1975 amounted to £24,729,439. I hereby certify that these balances have been duly surrendered.

Stock and Store Accounts

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

Statement of Receipts into the Central Fund for the Year ended 31 December 1976 Revenue:—

											£
Customs and Excise Duties				..	..	..	..	..	..	..	444,200,000
Estate, etc., Duties and Stamps				..	..	..	..	..	..	..	26,077,000
Capital Taxes		..	..	..	..	..	..	..	..	..	7,351,000
Income Tax, Sur-Tax and Corporation Profits Tax							..	..	..	..	475,539,000
Corporation Tax		..	..	..	..	..	..	..	..	..	15,898,000
Value-Added Tax (Including Turnover and Wholesale Taxes)								..	..	..	253,683,000
Motor Vehicle Duties			..	..	..	..	..	..	..	..	38,165,801
Post Office	..	..	..	..	..	..	..	..	..	..	90,000,000
Interest on Advances from the Central Fund						..	..	..	..	..	74,786,335
Sundry Receipts		..	..	..	..	..	..	..	..	..	39,787,990
Agricultural Levies		..	..	..	..	..	..	..	..	..	4,709,054
											1,470,197,180

Repayments, etc.

In Respect of Issues under the following Acts:—

Electricity (Supply) Acts, 1927 to 1976		..	..	..	..	..	..	1,745,645
Nítrigin Éireann Teo., Acts, 1963 to 1975			..	..	..	..	..	59,013
Sea Fisheries Acts, 1952 to 1974	..	..	..	..	..	..	..	293,015
Shannon Free Airport Development Co. Ltd., Acts, 1959 to 1974						..	..	592,085
National Building Agency Ltd., Acts, 1963 to 1974				..	..	..	..	59,594
Tourist Traffic Acts, 1939 to 1975	..	..	..	..	..	..	..	106,229
Insurance Act, 1953, Section 2 (4)	..	..	..	..	..	..	..	5,159
Turf Development Acts, 1946 to 1975		..	..	..	..	..	..	701,016
Industrial Credit Acts, 1933 to 1974		..	..	..	..	..	..	1,564,540
European Communities Act, 1972	..	..	..	..	..	..	..	55,432,674
Telephone Capital Acts, 1924 to 1973		..	..	..	..	..	..	1,393,684
Agricultural Credit Acts, 1927 to 1975		..	..	..	..	..	..	8,200,000
Sugar Manufacture Acts, 1933 to 1973		..	..	..	..	..	..	1,000,000
Redundancy Payments Acts, 1967 and 1971			..	..	..	..	..	1,000,000
E.E.C. Regional Development Fund		..	..	..	..	..	..	8,541,681
								80,694,335

Money raised by creation of debt:—
Telephone Capital Acts, 1924 to 1973					..	..	..	..	..	..	48,000,000
Savings Certificates		..	..	..	..	..	..	..	..	..	10,830,000
Ways and Means Advances				..	..	..	..	..	..	..	1,066,445,464
Exchequer Bills		..	..	..	..	..	..	..	..	..	480,000,000
Prize Bonds	..	..	..	..	..	..	..	..	..	..	4,700,000
9½% Investment Bonds			..	..	..	..	..	..	..	..	1,890,000
Tax Reserve Certificates			..	..	..	..	..	..	..	..	227,340
National Instalment-Saving				..	..	..	..	..	..	..	6,895,556
Index-Linked Savings Bonds				..	..	..	..	..	..	..	1,035,000
Revolving Credit Facilities			..	..	..	..	..	..	..	..	64,032,403
Ireland 8¼% Deutsche Mark Bonds, 1976 to 1981							..	..	..	..	18,584,156
E.E.C. Loan	..	..	..	..	..	..	..	..	..	..	156,123,754
8½% Deutsche Mark Bonds, 1982				..	..	..	..	..	..	..	20,670,148
7½% Swiss Franc Bonds, 1982				..	..	..	..	..	..	..	21,515,117
6⅝% Swiss Franc Notes, 1982 and 1983					..	..	..	..	..	..	23,920,994
Other Borrowings		..	..	..	..	..	..	..	..	..	121,807,891
											2,046,677,823
Total Receipts									..	£	3,597,569,338

Statement of Issues from the Central Fund for the Year ended 31 December 1976 Central Fund Services:—

											£
Public Debt Service		..	..	..	..	..	..	..	..	..	278,268,572
Road Fund	..	..	..	..	..	..	..	..	..	..	19,293,000
Annuities, Pensions, Salaries, Allowances, Returning Officers’ Expenses and
Miscellaneous		..	..	..	..	..	..	..	..	..	1,958,141
Contribution to E.E.C. Budget				..	..	..	..	..	..	..	14,598,249
Supply Services		..	..	..	..	..	..	..	..	..	1,506,668,655
											1,820,786,617

Issues under the following Acts:—

Electricity (Supply) Acts, 1927 to 1976		..	..	..	..	..	..	1,300,000
Local Loans Fund Acts, 1935 to 1974		..	..	..	..	..	..	116,350,000
Telephone Capital Acts, 1924 to 1973		..	..	..	..	..	..	48,000,000
Sea Fisheries Acts, 1952 to 1974		..	..	..	..	..	..	2,000,000
Transport Acts, 1964 to 1974	..	..	..	..	..	..	..	4,455,000
Insurance Act, 1953, Section 2 (4)	..	..	..	..	..	..	..	114,243
National Stud Acts, 1945 to 1976	..	..	..	..	..	..	..	246,590
Industrial Credit Acts, 1933 to 1974		..	..	..	..	..	..	11,018,969
Shannon Free Airport Development Co. Ltd., Acts, 1959 to 1974						..	..	5,105,000
Gaeltacht Industries Acts, 1957 to 1975		..	..	..	..	..	..	5,600,000
Finance Acts, 1953 (Section 16) and 1954 (Section 22)				..	..	..	..	200,000
Fóir Teoranta Acts, 1972 to 1976		..	..	..	..	..	..	103,000
National Building Agency Ltd., Acts, 1963 to 1974				..	..	..	..	700,000
Agricultural Credit Acts, 1927 to 1975		..	..	..	..	..	..	7,700,000
European Communities Act, 1972	..	..	..	..	..	..	..	44,292,013
Sugar Manufacture Acts, 1933 to 1973		..	..	..	..	..	..	1,300,000
Redundancy Payments Acts, 1967 and 1971			..	..	..	..	..	1,890,000
Nítrigin Éireann Teo., Acts, 1963 to 1975			..	..	..	..	..	12,280,000
Turf Development Acts, 1946 to 1975		..	..	..	..	..	..	3,800,000
Broadcasting Authority Acts, 1960 to 1976			..	..	..	..	..	5,591,000
British and Irish Steam Packet Co. Ltd. (Acquisition) Acts, 1965 to 1976							..	3,600,000
								275,645,815

Issues for the Redemption of Public Debt:—

Ways and Means Advances				..	..	..	..	..	..	..	782,488,399
Exchequer Bills		..	..	..	..	..	..	..	..	..	478,000,000
Prize Bonds	..	..	..	..	..	..	..	..	..	..	2,171,000
Savings Certificates		..	..	..	..	..	..	..	..	..	5,360,000
National Instalment-Saving				..	..	..	..	..	..	..	2,764,075
6½% Investment Bonds			..	..	..	..	..	..	..	..	870,000
9½% Investment Bonds			..	..	..	..	..	..	..	..	470,000
Tax Reserve Certificates			..	..	..	..	..	..	..	..	415,300
Index-Linked Savings Bonds				..	..	..	..	..	..	..	15,000
11% Conversion Stock, 1976				..	..	..	..	..	..	..	20,000,000
8¾% Conversion Stock, 1976				..	..	..	..	..	..	..	90,000,000
Other Borrowings		..	..	..	..	..	..	..	..	..	118,578,000
											1,501,131,774
Total Issues									..		£3,597,564,206
											”

Mr. Mac Gearailt.—Paragraphs 2, 3 and 6 are the usual informatory paragraphs included in my report. Paragraph 4 certifies that the previous year’s balances were duly surrendered to the Exchequer during 1976 and paragraph 5 certifies that the stock and store accounts have been examined as required by statute.

VOTE 1—PRESIDENT’S ESTABLISHMENT

Mr. T. F. Ó Cofaigh further examined.

182. Chairman.—On subhead A—Salaries, Wages and Allowances—the expenditure is less than granted by a small amount, in the region of 12½ per cent.

—Essentially, the expenditure is small. The salary of one person is enough to cause a big percentage saving. There are such petty details as the fact that a post of door-keeper was not filled during the year. That would account for one salary. There were delays in filling vacancies for a clerical officer and a clerical assistant. These explain the saving of this small sum, though proportionately it is a large saving.

183. On Extra Remuneration, a higher executive officer received an allowance of £306 for the purpose of higher duties. We have been discussing this heading with other Accounting Officers and we have asked them to change in future the format to include the total number of people in receipt of overtime payments. In this case it does not matter so much because the amount is so small, but it would give a clearer picture to the Committee if the total number involved and the range were included.

—We would be glad to co-operate with the Committee*.

VOTE 6—OFFICE OF THE MINISTER FOR FINANCE

Mr. T. F. Ó Cofaigh further examined.

184. Deputy N. Andrews.—On subhead A.2—Consultancy Services—what is involved here?

—We spent £24,000 on consultancy services in that year and this involved mainly the Industrial Credit Company. Half of the expenditure was the salary of a chartered accountant whom we had on loan from the ICC. His expertise was available to us in considering accounts of State bodies, in so far as we are involved with such accounts. The remainder was a service fee for Mergers Limited and, finally, there was one personal consultant who was paid a salary of £5,900.

185. Chairman.—On subhead B—Travelling and Incidental Expenses—there was a comparatively large Supplementary Estimate which, I presume, was due to unexpected expenses. Is that so?

—This arises largely due to expenditure on office equipment, including three Nixdorf computer accounting machines in connection with the introduction of salary payments and the impact of PAYE. We also spent £37,500 from the Supplementary Estimate on advertising. There was actually a saving on travelling and subsistence expenses.

186. On Appropriations in Aid—Recoupment of salaries, etc., of officers on secondment—how did that arise?

—There are four members of our staff on loan. One is on loan to the GAA, another is on loan to the NCEA, another to the IPA and there was also an officer on loan during the year to Roinn na Gaeltachta. The salaries involved amounted to £24,000 in round figures and that accounts for the vast bulk of the Estimate.

187. On Extra Remuneration, you realise the new format we are seeking?

—Yes.

188. Deputy Morley.—I see that an assistant principal officer received payment for higher duties. Would such duties be appropriate to the man’s office or would they be duties appropriate to a higher office?

—We might have a vacancy to which we would promote somebody, but it could happen that the officer concerned would not have the requisite minimum service. He would be on the job and would be recompensed by way of payment for higher duties. That would be a normal case.

189. Chairman.—Would the extra remuneration equate to the salary for the job?

—It could be less. I do not think we are called upon to discuss the details. Generally speaking, if a man is told he will be promoted in six months’ time he is only too pleased to show his paces at the job while receiving recompense.

190. Deputy Morley.—Do I take it that in the filling of higher offices you do not have the qualified applicants with the necessary length of service and that this necessitates a man having to wait for a period of, perhaps, six months, for which he must be recompensed in some form other than the salary for the new appointment?

—This is not a regular feature; it is exceptional. Given the age and service structure in the Department, if several vacancies occur in the assistant principal grade it can happen that the most senior administrative officer or higher executive officer would be short by a year or six months of the service which the Department of the Public Service lay down as the minimum. It happens occasionally. The staff would like it to happen more frequently. Their complaint is that they are not promoted quickly enough.

VOTE 10—STATE LABORATORY

Mr. T. F. Ó Cofaigh called.

No question.

VOTE 11—SECRET SERVICE

Mr. T. F. Ó Cofaigh further examined.

191. Chairman.—Could one be bold enough to ask why there is only 50 per cent expenditure of the amount granted, without giving away any secrets?

—Without revealing any secrets, this is a Vote where we would prefer to err on the safe side. It is not the sort of Vote where one would want to seek a Supplementary Estimate. The saving this year was the same as the saving the previous year.

The estimate is necessarily conjectural, so we will leave it at that.

VOTE 14—MISCELLANEOUS EXPENSES

Mr. T. F. Ó Cofaigh further examined.

192. Chairman.—On subhead B—Centenarian’s Bounty—how much is this now?

—It is £50.

Deputy N. Andrews.—You certainly estimated correctly there.

—Forty-one people got it.

193. Deputy Belton.—I wonder if there is any possibility of making it the century, giving them £100, £1 for each year?

—I am afraid that is outside our terms of reference.

VOTE 21—AGRICULTURAL GRANTS

Mr. T. F. Ó Cofaigh further examined.

194. Chairman.—Under subhead C—Employment Allowance—there is a note saying the expenditure related to previous years for which no provision was made?

—Up to 1976 the rates rebate was £17 for each adult male worker employed during the previous calendar year. It was abolished in 1976 and this small carryover probably was due to one local authority. The normal expenditure on the employment allowance was of the order of half a million pounds. It is very, very minor.

This arose prior to its abolition?

—Yes.

The witness withdrew.

The Committee adjourned.

*See Appendix 2.

*See Appendix 14.