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, 9 Feabhra, 1978.

Thursday, 9th 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) called and examined.

VOTE 41—INDUSTRY AND COMMERCE.

Mr. J. C. Holloway called and examined.

228. Chairman.—Paragraph 56 of the Report of the Comptroller and Auditor General reads:

“Subhead S.—Ardmore Studios—Administration Expenses

Reference was made in paragraph 51 of my report on the accounts for 1973-74 to the purchase and management by Radio Telefís Éireann, on behalf of the State, of the Ardmore Film Studios until such time as the Minister for Industry and Commerce would establish a new body for the promotion of a film industry. The National Film Studios of Ireland Ltd., a private company registered under the Companies Act, 1963 took over Ardmore Studios as a going concern on 1 August 1975 from Radio Telefís Éireann.

The charge to the subhead comprises:—

(1) £37,000 paid to Radio Telefís Éireann and

(2) £63,000 paid to The National Film Studios of Ireland, Ltd.

The payments to the company were sanctioned by the Minister for Finance on the understanding that they would be subject to certification in the usual way. In June 1976 the Accounting Officer furnished me with a statement of the Company’s income and expenditure in the period 1 August 1975 to 31 December 1975 certified by its accountant. This shows that expenditure on administration exceeded £63,000.”

Mr. Mac Gearailt.—This paragraph is for information and deals with the transfer from Radio Telefís Éireann to the National Film Studios of Ireland Ltd., of responsibility for the management of Ardmore Studios. It also shows the breakdown of the subhead charge of £100,000 between the two agencies. In regard to the payment of £63,000 to the film studios, the Accounting Officer has furnished me with a certified statement from the company’s auditors of their income and expenditure for the period up to 31 December 1975.

229. Chairman.—On subhead D—Geological Survey—Equipment, Stores and Maintenance—I would like to ask the Accounting Officer to comment on the large amount in the Less than Granted column?

—The saving there arises mainly from the fact that a sum of £200,000 had been contemplated for an aeromagnetic survey and we decided not to go ahead with this, mainly because there is the possibility that we will be able to get the agreement of the EEC to pay half the cost of this operation. If we had gone ahead with it, paying the cost ourselves, then that hope could not have been realised.

230. Deputy V. de Valera.—On this Vote generally, it is a Vote which carries a large number of grants-in-aid, the amounts involved being fairly substantial.

—That is correct.

How do you monitor these grants-in-aid? First of all I know they are sanctioned in the Estimate. Then they are issued under your control. Is that correct? You control the issue. You do not just automatically issue them as such or do you?

—We have a system under which these people send in requisitions and the finance division looks after the actual payment of the money. The administration division which is responsible for that particular organisation, or for a number of organisations, keeps a very tight control over their activities, or at least makes sure that it is very well informed about the activities of the organisation in question. It is always in a position to say whether the organisation needs the money and for what purpose.

You do not issue the grants automatically in toto?

—No.

Can you add anything to what you said in regard to control of over-issue? That is really the question.

—The system as I understand it is that the officers of the Department are well informed and up to date on the cash position of the organisations in question. They get returns on a regular basis and they do not issue money unless it is needed.

231. Deputy N. Andrews.—On subhead H.2—Kilkenny Design Workshops Limited —how did the supplementary grant arise?

—I think you will find, Mr. Chairman, that quite a number of the supplementaries in that year were required to meet additional wage costs. The Estimates had been prepared on certain assumptions relating to wage costs and later on there were developments—national wage agreements and things of that kind—which upset those calculations. In a number of cases Supplementary Estimates had to be introduced more or less specifically to cover the additional wage costs.

That would account more or less for all supplementaries?

—Quite a number of them. The strategy nowadays is not to make provision on the basis of assumptions that wage increases of particular dimensions will arise.

The witness withdrew.

VOTE 18—STATIONERY OFFICE.

Mr. J. F. Harman called and examined.

232. Deputy N. Andrews.—Under Extra Remuneration, it is extraordinary that 67 officers of different grades were paid sums varying from £250 to £2,379 in respect of overtime. Was the sum of £2,379 paid to one individual?

—Yes. An important aspect of our work is security. We are in a rather large old barracks and security is an important matter. In 1971 the Board of Works asked us to have night patrols and we now employ four people for this purpose who earn substantial sums. The Committee will appreciate that we must have people whom we can trust.

The sum of £2,379 amounts to about £50 per week.

—Yes.

At what rate is that person being paid? paid?

—At that time the basic rate was £2,130.

What kind of hours was he working?

—They are divided into watches and there is an all-night shift. From Monday to Friday they work from 6 p.m. to 11 p.m. and on Saturday and Sunday from 11 a.m. to 11 p.m. When the office is not working there are always at least two people there.

Is this in addition to his normal remuneration? Is it over and above what he would normally get?

—It is.

How many hours per week would he work?

—He would be working a full number of hours in addition.

233. Chairman.—I presume the rate is time-and-a-half.

—It is the normal overtime rate for the job. The problem is that it is a large barracks and we must have people whom we can trust and who have a fair amount of service. They must be under 60 and be able to deal with any problem that arises. In 1974 the panel of two was increased to four in order to cut down on the amount of overtime earned. I should say that this will be a disappearing problem in that the Board of Works hope to move us from Beggar’s Bush. The office staff have moved already and we hope the stores will be joining them in new premises within a couple of years.

Deputy V. de Valera.—What is the overtime rate?

—The rate is about 75p per hour.

What is the overtime rate with reference to the basic?

—In 1975 the four people involved earned £2,125, £2,073, £1,893 and £1,501.

Are we to take the ratio as being for the same hours? Taking the basic rate as “time”, what is the overtime rate?

—It is time-and-a-quarter.

Deputy F. O’Brien.—He must be working 90 to 100 hours per week.

—I should mention that it is double time at weekends.

234. Deputy N. Andrews.—Even at that, it is a very unsocial regime to impose on a man, even for an extra £50 per week. According to these figures, it is £50 extra for every week of the year, so obviously at times he must work even more. Would it not be more appropriate to employ someone?

—That was examined and it was found that it was cheaper to do it this way than to employ a security firm. There is also the matter of extra reliability. The stores are scattered. The night watchman punches a clock and has a regular schedule. The people who earn the overtime are on duty one at a time patrolling the grounds to make sure that there are no interlopers.

Is this unlikely to continue?

—The Board of Works are hoping to move us to new premises in which the office staff and the warehouse will be together. Most of the office staff have been moved to Waterloo Road, a little distance from Beggar’s Bush. The warehouse is still there. It is hoped to bring the two together in another premises which is being acquired.

235. Deputy V. de Valera.—In the last analysis this is a semi-policy question. If you are paying more in overtime than the basic rate for a man, surely that suggests that one man more would be both socially and economically desirable.

—I should mention that in conjunction with the staff association we are looking at the question of widening the panel. We have always employed people with a minimum of six years’ service and who are physically capable. As the stock figures show, there is a lot of material stored and security is the main priority.

236. Deputy N. Andrews.—I have no objection to anybody earning overtime but if there is another job there it should be considered in that light. The hours worked by those people are very anti-social and unfair to the individual. Certainly they would need to be physically fit to work those hours. I object to anybody working such hours.

—I should mention that they are all volunteers.

Of course. Overtime is not a very good thing. People are inclined to get used to it and when it goes they feel the tension in a big way and it can be a cause of hardship in the end.

237. Deputy Belton.—Could it be possible that getting an extra man would not solve the overtime problem? There would still be the question of overtime by way of payment for working unsocial hours.

Deputy Kerrigan.—I would assume that most overtime is unavoidable. It would be preferable to put someone else into a job, but it is a matter of finding somebody to work unsocial hours. I was surprised to hear that time-and-a-quarter was the overtime rate.

—It is time-and-half over three-and-a-half hours and under nine-and-a-half hours, double time over that.

238. Chairman.—I take it the general consensus is that if possible where a new job could be created, where the overtime would seem to be in excess of the basic wage, that should be done. Even though there would not be a saving in money terms it would create one more job, provided that suitable personnel could be employed.

—That is one of the snags. We have to be very careful. They have to be at least six years in the place. We must have a man whom we can trust.

The witness withdrew.

VOTE 40—LABOUR.

Mr. T. Ó Cearbhaill called and examined.

239. Deputy Belton.—On subhead E— Commissions and Special Inquiries—expenditure was less than anticipated.

—Yes. It is very difficult to estimate exactly the requirements under this subhead. Commissions and special inquiries are established by the Minister in particular situations. In some years there is substantial expenditure and in others there is not. Items of expenditure during the year in question were, first, the Emigrants’ Advisory Committee which was set up to provide information and advice to intending emigrants and to emigrants returning. Secondly, the Women’s Representative Committee which was set up in that year because it was International Women’s Year. Thirdly, there was a committee to look at safety arrangements in Dublin port following an oil spillage there. The staff for these committees were provided by the Department and the cost charged to subhead A of the Vote.

240. Deputy Woods.—Does the £904 cover all those items?

—Yes, but I would like to explain that no personnel charge is included. The biggest actual expenditure would be on personnel which was charged to Subhead A.

241. In relation to the special inquiry on oil spillage in Dublin port, which would take a considerable amount of time, are not the manpower charges included at all?

—The manpower personnel would be mainly factory inspectors. Travelling expenditure would be charged under subhead B.

242. Deputy N. Andrews.—On subhead G—Research—there seems to be considerable under-expenditure here. I wonder if the Accounting Officer could explain more fully why these delays occurred and the reason for the under-expenditure. Only £7,273 was expended from a grant of £30,000. It is stated that the saving was due to delay in carrying out a number of research projects.

—Yes. In fact, research projects invariably take substantially longer than the time estimated when the arrangements are made. Sometimes this arises from other pressures on the personnel. The people involved are engaged maybe in institutes or universities. The Department are quite sparing in giving commissions for research projects because we have available to us the work of the Economic and Social Research Institute and other organisations of that kind which we draw on and to which we contribute by way of feeding in material and making the time of personnel available to help carry out projects. It has been stated in the note that there are delays in completing these. Also we do not pay fully until we get the final report. We usually make an arrangement to pay part of the cost when a certain stage of the project has been reached. A number of projects are in fact in the pipeline and we are awaiting reports.

243. Chairman.—This subhead I presume includes only such projects initiated by you and the Department and does not include any moneys paid through the ESRI or any assistance you gave them in the form of personnel? That figure would not be included in this research under this subhead?

—No. In fact the Department is a member of the ESRI and pays a subscription. I think it is £2 a year and this gives us access to the work of that organisation. The ESRI publish a register of projects which is designed partly to prevent overlapping in situations of this kind. It discourages Departments undertaking projects where similar work is already in hand in the ESRI or in some other organisation.

244. Deputy Woods.—Is all your work commissioned out? Do you undertake no research work yourself directly?

—We do not have the capacity to do research work within the Department.

245. Deputy N. Andrews.—Would it not be appropriate to reduce that grant by half in view of the fact that you are not utilising it fully?

—We never know when we will need to have research work carried out. For instance there is to be a very big school leavers’ survey, the cost of which will fall on a subsequent Vote and a few other very substantial jobs of that kind which would all fall on later Votes.

246. Deputy V. de Valera.—Is not the principle this: that the Accounting Officer is required to be very careful about overestimation. There is quite a lot in the reports about that. Therefore he cannot overestimate as a precautionary measure. But when particular possibilities are foreseen it is a rational judgment with regard to particular possibilities, is that not the way the Estimate is framed?

—Yes.

Because you cannot be sure these possibilities will become actualities?

—That is right and besides it is negotiated in detail with the Department of Finance before it is fixed.

247. Deputy N. Andrews.—The sum allocated for 1975 has not nearly been spent; the same applies to 1976 and I do not know about 1977. We are not dealing with 1976 but you are spending the same amount on average per year. Is £30,000 justified as a grant?

—That is a fair question. Part of the explanation is that a lot of work which we would otherwise have had to undertake has been done by the ESRI.

Deputy V. de Valera.—Perhaps the next Committee can look at the record and see if you are over-estimating or not?

Deputy Woods.—Or on the other hand whether you are under-utilising your resources in that direction. It is very hard to comment on it because it is hard to see what is contained in the ESRI’s research contribution. But certainly in relation to administrative costs of £5 million under subhead J.1.—An Chomhairle Oiliúna— the contribution to research from the Department of Labour is negligible. If we looked on it in a different way I would think that we should be looking more seriously at the need for research.

Chairman.—We are into an area of policy and it is not for us to comment on this.

Deputy Woods.—Rather than reducing the subhead for research, I accept what has been said about the amount of research which will be done in a given period always being a questionable and a doubtful area. I would take the view that in the case of research the money should be allocated whether it is spent or not. I just want to make that point.

—Just one point with regard to AnCO. AnCO carries out its own research and charges it to subhead J.1.

248. Deputy N. Andrews.—On subhead N —Grants for Advisory Services for Emigrants—these are grants recommended by the Emigrants’ Advisory Committee and are less than provided for. Is there some reason for this?

—Yes. When this grant was introduced there were over 30 committees throughout the country who were engaging in advisory work for emigrants and this number has been reduced very drastically because a lot of these committees have gone out of business. Also the level of emigration has fallen so that, apart from one big committee in Dublin there are very few committees who qualify for grants. In fact the provision made in that year of £7,000 was a reduction on the provision which had been made in the previous year. The Advisory Committee look into applications from the different committees and advise the Minister as to the level of grant to be made in each case.

249. Deputy F. O’Brien.—On subhead Q —Premium Employment Programme—there seems to be a very big difference in what was granted and what was spent. Could we have an explanation on that?

—This was a Supplementary Estimate which was voted in the middle of the year.

As something new?

—Yes. In fact despite the very considerable advertising and promotional work carried out by the Department the take-up of this scheme was much less than had been hoped for at the time as a result of which a number of extensions have been made in the corresponding scheme since.

250. Deputy N. Andrews.—Has there been an improvement since?

—Yes. It was confined to manufacturing industry in the very beginning but now it has been extended to other areas.

251. Deputy Woods.—Could there have been problems in the means of issuing the money or the terms in relation to the release of the money that could have affected that situation?

—No. We did not have complaints about the rigidity of terms. This was during the course of one of the worst periods of the recession and employment was suffering at the time. Any complaints which we received about the operation of the scheme were examined and various improvements have been made since. Also certain discretions were obtained by the Minister to enable him to deal with borderline cases.

The witness withdrew.

VOTE 42—TRANSPORT AND POWER.

Mr. N. McMahon called and examined.

252. Chairman.—I would like to welcome Mr. McMahon. As there is no specific reference in the Report of the Comptroller and Auditor General to this Vote I propose we go directly to the Vote and the subheads.

Deputy V. de Valera.—Arising out of the Committee’s earlier report and previous notes I would like to ask the Accounting Officer a question. In regard to grants to CIE in, I think, the previous year or maybe the subsequent year a note appeared that this was done in accordance with EEC Regulations. There are two EEC Regulations. These Regulations provide what you cannot do and as I read them they provide, so to speak, ceilings for expenditure for giving grants to a transport organisation. That is an inaccurate way of saying it. The question I want to ask is: are grants to Córas Iompair Éireann given automatically on the basis of what is permitted—sanctioned in that sense—by the EEC Regulations which are part of our domestic law or do the Department make grants on a definite basis having regard to the actual state of CIE and making sure that it is within the terms of the legislation? I wonder does the Accounting Officer understand my question?

—Yes I think I understand what you are interested in all right. I will try to explain the position to you. There are a number of EEC Regulations that are relevant to subventions to transport undertakings and there are four, I think, that are relevant to our particular situation. They provide the legal framework under which governments may assist transport undertakings. They do not in themselves impose limits, certainly not specific financial limits, but they provide, as I say, the framework within which a government must act in assisting in transport undertakings. These Regulations do not in practice impose very stringent constraints on a government because they provide for aid under a number of possible headings and in fact the Government in settling the annual subvention to CIE take account of the actual and forecast position of CIE, their estimate of future revenue, their estimate of future expenditure needs, the possibility of expansion of traffic or expansion of revenue, and the subvention is fixed in the light of those considerations and at the same time within the legal framework imposed by the EEC. But the EEC Regulations do not in practice impose a very severe financial constraint on a government which sees the need to assist transport undertakings in the public interest.

And therefore one might say they are not specific authority for a specific sum.

—Certainly not.

They are not specific authority for a specific sum?

—You are quite right.

253. In other words it would have to be voted? It is the Dáil grants that you are talking about, not the EEC grants?

—Yes. The EEC Regulation is part of our law because it is a Regulation but nevertheless the money must be voted by the Dáil. The Regulation itself does not vote the money.

254. Chairman.—To add to what Deputy de Valera has said, do you envisage, in theory at least, any conflict between the needs of CIE and the framework imposing certain restrictions from EEC sources—in other words, if at any time you found that CIE was in such a state that they required £X, because of restrictions which are now part of our domestic law, they could not be granted that amount?

—No. There would be no danger at all that that would happen. I mentioned the certain flexibility within the EEC Regulations and one of them, for example, provides for payment to meet residual deficits and I think that expression in itself give a certatin flexibility to governments to meet the type of situation you have in mind.

255. Deputy Woods.—On subhead A— Salaries, Wages and Allowances—there is a certain amount here that is less than granted. Would that include all overtime and other salaries and wages expenditure?

—Yes. This is a gross figure covering all remunerations.

256. On subhead D.1.—Grants to Córas Iompair Éireann—I realise that the supplementary was that passed by the Dáil, but could you enlighten us on the reason for an over 55 per cent supplementary in that year?

—There were two main reasons for the supplementary in that year. The original Estimate did not provide for the National Wage Agreement which was subsequently negotiated. Therefore an additional subvention would have been necessary to enable CIE to meet that additional cost. In addition there had been an increase in the CIE fares and rates in May of that year and the Government in June decided as part of a wider economic package to provide additional moneys to CIE to enable them to reduce the fares. There was a budget in June of that year. So this money included funds to enable CIE to withdraw price increases that had been implemented and thus to balance on the basis of the earlier estimates.

257. Deputy N. Andrews.—That supplementary was continued in 1976 and, I think, also in 1977?

—There was a Supplementary Estimate also in 1976 and, I think, in 1977 also.

258. Deputy Woods.—On subhead E— Grants for Harbours—is there any particular reason for the grants for harbours being delayed? It says in the Explanatory Notes that there was a delay in certain projected development works.

—The harbour subhead consists of a collection of different projects, and in work of this kind it is sometimes quite difficult to forecast the pace at which each of them would continue. Such factors as design, the assessment of possibly conflicting technical advice, weather problems in the actual execution of the job and so on can affect the pace of the job and therefore it is very difficult, as in the case of all capital works, but particularly with marine works, to give precise estimates in advance.

259. I presume there are feasibility studies and that sort of thing?

—Yes. It would include feasibility studies.

260. Deputy N. Andrews.—I come again to the matter of overtime. Under Extra Remuneration I see 358 employees received sums varying from £201 to £3,206 for overtime. Could the Accounting Officer tell us how many employees received £3,206, which is equivalent to approximately £64 per week?

—I am not sure if I have that precise information. The position about overtime in our Department arises mainly in the operation of technical services at the airports, in the meteorological service which we have to provide on a 24-hour seven-day basis for 365 days of the year and there are certain posts which must be manned, allowing for absences through unforeseen circumstances, such as sick leave and so on. We find that in this situation a certain degree of overtime is completely unavoidable and the fact that certain persons may work what appears to be an undue amount of overtime sometimes reflects the unwillingness of other people to do overtime because of domestic or other circumstances and, therefore, particular personnel may make themselves available to meet emergency or other deficiency situations in personnel. So a small number of people will sometimes accumulate considerable sums in overtime payments. I could, if the Deputy wished, provide some additional information on the exact breakdown but I do not seem to have the information with me.

I feel that if there are half a dozen people making £3,206 per annum there is obviously a possibility that a job could be created there and I am not, as I said earlier, in favour of overtime as a means of employment. I do not think it achieves anything. That is a policy matter but nonetheless the amount of £3,206 is an awful lot of money and represents an awful lot of time for any one individual to work in addition to his normal week. If there were jobs to be created, I think they should be created, rather than spend money on overtime.

Deputy Kerrigan.—I would agree. I always felt that such people were confined to a very limited amount of overtime due to the nature of the job itself. It seems to be a very high amount.

—If I could add to my comments, I think there is, in fact, only one person who earned this level of overtime during the particular year. I certainly take the point that if excessive overtime is depriving additional people of permanent employment then that would be something we would all deplore. Some of these services have been re-organised in recent times and additional posts have been created and overtime is being reduced. I would not envisage, and I should be honest about this, that it would be possible to eliminate overtime in the type of service which we provide in aviation.

Deputy N. Andrews.—I am sure the Accounting Officer accepts my point that if jobs could be created they should be created?

—We accept that.

Deputy Woods.—The average would seem to be about £800 if we take it that there were 358 employees receiving sums varying from £201 to £3,206 and the total amount paid in respect of overtime was £293,770. I appreciate that you will have a requirement for overtime but if a job could be provided, then it would be preferable to have such a job rather than more overtime.

—I can assure the Committee this is the aim of the Department.

Chairman.—The general consensus would seem to be that where a job can be created it should be created.

—Certainly.

261. There are several grants-in-aid provided for in this Vote. How do you see your function in disbursing these grants-in-aid?

—I would make no distinction about the degree of responsibility I bear in relation to appropriations-in-aid as contrasted with the expenditure subheads.

Grants-in-aid?

—I am sorry. In the case of grants-in-aid they arise particularly in the case of Bord Fáilte. Under the Oireachtas the board of Bord Fáilte have been entrusted with certain statutory functions. The accounts of Bord Fáilte are, of course, audited by the Comptroller and Auditor General and the Department does not engage in that type of detailed scrutiny in relation to the Board. We are concerned with the policies pursued by the Board. Some of these require the Minister’s approval, such as grant schemes for accommodation development or development of amenities. In other cases the Board are allowed a certain necessary degree of discretion but we would have fairly regular consultation with them as to their priority in the use of this money. We naturally assess their performance over the year in terms of improvement in amenities and facilities, numbers of visitors, the spread between different markets and the general strategies which they pursue. We envisage in the future engaging in a closer and deeper analysis of the performance of Bord Fáilte. We have established within the Department a Planning Unit which is at present engaged in trying to develop criteria or indicators by which performance in a slightly difficult area like tourism can be more carefully analysed to ensure that the State gets value for money.

You are talking about value for money?

—Yes, value for money and the correct allocation of priorities. I do not know whether this deals with your inquiry. This is the way I would see the Department’s responsibility in relation to grants-in-aid.

Thank you, Mr. McMahon, for your cooperation.

The witness withdrew.

The Committee adjourned.