Committee Reports > List of Committees > Dáil > 1978 > Committee of Public Accounts > Report - Appropriation Accounts 1976

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 14 Nollaig, 1978

Thursday, 14th December, 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.

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

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

548. Chairman.—The Finance Minute on paragraph 35 of the Committee’s previous Report—Comptroller and Auditor General —refers to the level of staffing in the Office of the Comptroller and Auditor General. What is the current position?

—During the past year or so we have been filling vacancies which arose through the authorisation of additional staff last year. We also intend to carry out regular reviews of the workload and to assess whether we have adequate staff to cope with it rather than allowing long periods to elapse between such reviews with the likely result of having to seek a considerable number of extra staff simultaneously. The Department of the Public Service have agreed to this. We are now starting a review of the additional workload which has arisen since December, 1976.

549. Deputy C. Murphy.—What is the staff complement?

—The staff complement is now 95.

550. Chairman.—Do you find it difficult to recruit suitable staff at higher levels?

—We recruit through the Civil Service Commission at executive officer level. We train our own staff and encourage them to pursue courses of study leading to accountancy qualifications. Vacancies arise through staff leaving after they have been trained and this is a constant problem.

That is the price of democracy.

—Yes.

VOTE 7—COMPTROLLER AND AUDITOR GENERAL

Mr. P. L. Mac Domhnaill further examined.

551. Deputy C. Murphy.—On subhead A. —Salaries, Wages and Allowances—the note states that in addition to the amount charged to the subhead £7,500, received from the Remuneration Vote, was spent on salaries. Could the Accounting Officer clarify this?

—Arising out of increases under National Wage Agreements, all Departments would have occasion to pay salaries at a higher level than had been provided for in the Estimate. The practice is that one Vote is taken to provide for increases which cannot be met from the savings on the Votes as originally framed. We, therefore, drew from that omnibus Vote an amount which we felt would be required to meet the increases payable in 1976. We have to do this on an estimated basis also because naturally the Remuneration Vote has to be taken before the end of the year and one must assess what is likely to be required. Account must be taken of vacancies which might be filled and it does not always happen that the full amount drawn would be used. This expenditure is borne on Vote 51.

The witness withdrew.

VOTE 2—HOUSES OF THE OIREACHTAS

Mr. M. J. Healy called and examined.

552. Chairman.—I should like to mention one aspect of our dealings with the Accounting Officer. I should like to thank him for his intervention and his hard work on our behalf in relation to the staffing of this Committee. We are pleased to note that the situation has improved in the interim and that shortly we will have a full-time Clerk assigned to us. I should like to thank the Accounting Officer for his endeavours on our behalf having regard to the many other competing demands on him, particularly when the House is sitting. We are very glad to be able to record our success in obtaining a full-time Clerk.

—I appreciate your remarks, Mr. Chairman. You will have a full-time Clerk as soon as we can make the administrative arrangements for alternative staff in the Questions Office.

The witness withdrew.

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

Dr. B. Hensey called and examined.

553. Chairman.—The Finance Minute on paragraph 33 of the Committee’s previous Report—Health—deals with recording deficiencies of some Health Boards in their earlier years. While the Minute states that measures have been introduced to improve the situation, what is the present position in regard to accounting and recording deficiencies in the Health Boards?

—In relation to the improvement of financial systems all the Health Boards now are using computer data processing services. Four of the Boards are serviced by the Central Data Processing Unit of the Department of the Public Service. The other four have arrangements of their own, with their own computers, or with outside firms. We are continually monitoring the system to see that through these computers the accounts systems are improved. In relation to the submission of abstracts of accounts for audit, the position has improved considerably since last year. From 1973-74 to 1977 there are five audit years. Last year only six of the 24 abstracts then available had been audited. The situation as it is now, is that of the 40 abstracts of accounts for the eight Health Boards covering the five-year period up to December 1977, we have 31 of these abstracts. Of these, 21 are audited, and we expect that all the audits to the end of 1977 will be completed within the next year.

554. On paragraph 34—Health Contributions—what is the current position with regard to collection of health contributions?

—Dating back to 1972 the total amount of health contributions collectable by Health Boards, that is from farmers, is £5,162,637 and about £1,500,000 of that is not collected yet. This in some cases represents arrears over many years. We are continually pressing the Health Boards to take action on arrears. Some cases have been brought to prosecution. That £1,500,000 represents roughly 100,000 separate payments averaging about £15 each. The rate of contribution has changed over the years. In some cases there may not be a sum due at all because the demand may have gone out to somebody who is on the rating register as being on a particular farm but who may be dead or gone away, or where the income from farming is only part of the income. Some proportion is money which should not have been sought in the first place. We have put it to the Health Boards that they should be more selective in making their demands, but to do that thoroughly they would need quite a considerable administrative staff. At present, we are planning a changeover in the system of health contributions in accordance with a Bill which will be before the House after Christmas. Under this Bill the Health Boards will be responsible for collecting income-related contributions from farmers. In this circumstance, contributions will vary depending on the income of the farmer, which will be calculated on a notional basis in relation to valuation. For this, the Health Boards will have to make a better examination of the liability of individual farmers so as to assess the contributions payable. We have at present a working party made up of officers of the Department and representatives of each of the Health Boards to work out the system by which this assessment will be done. This will mean possibly more administrative expenses for the Health Boards in assessing farmers’ liabilities but in the context of the new health scheme it is necessary to incur this. The net effect of this will be that where a contribution is sought it will clearly be a contribution from a person who is required to pay it. Another thing that will help increase the level of contributions in the future is that we intend more definitely to tie in the payment of the contribution with entitlement to the service. Both for farmers and others, we intend that in each year the individual will get a document showing the contribution paid which will ordinarily be the ticket to entitlement to hospital services.

555. Deputy Woods.—Can I take it that the most of this fund arises in the farming problem areas rather than in the city areas?

—The Health Boards are only concerned with collecting from farmers. For the present, in the case of insured workers the contribution is collected with the social insurance stamp. If the card is stamped we automatically get the health contribution. In the case of the self-employed it is collected through the Revenue Commissioners, not through the Health Boards.

556. Chairman.—On the question of arrears, I know there is a drive at the moment to collect arrears and that officers of Health Boards are scrutinising rating authority registers and registers of medical card holders in the county clinics, but the two lists do not correspond. Working on the assumption that they correspond is resulting in people getting demands for payments of arrears for which they are not liable. I do not know the solution in this very difficult area. The Accounting Officer mentioned where the rating authority may have a name and address and the medical card holder in that case is at a different address. It is nearly impossible to have 100 per cent success in the collection of arrears. Has the Accounting Officer any solution?

—The Committee, supported by the Minister for Finance, recommended last year that we should aim for 100 per cent. We agree with this aim, but where a person has a medical card and that was not known when the request went out for the health contribution, the request must be cancelled. Similarly, if a request went out to a person who had an income over the present limit of £3,000 outside of farming, and the farming only accounted for a minor part of the income there should not be a request because the person is not eligible for hospital services. It is not possible for the Health Boards, without an extraordinarily detailed administrative system, to be sure that when they are sending out demands the person is within the class which must pay.

Deputy C. Murphy.—A person with a medical card may wait until he has received five or six demands before he produces them to a public representative to handle them for him.

557. Chairman.—I have experience of a civil bill being issued in respect of a man who died in 1969 before the scheme was introduced. I appreciate that there are administrative snags but this kind of thing looks bad. It is difficult to expect a 100 per cent collection. All we can hope for is that the collection is as close as possible to the amount due.

—One advantage of the new scheme is that there will not be an upper limit to the contribution liability. All farmers will be liable to pay, except those with medical cards. The main difficulty in future, as at present, will be to have a correlation between medical card registers and registers of those who are required to pay health contributions.

VOTE 50—HEALTH

Dr. B. Hensey further examined.

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

“Subhead G.1.—Grants to Health Boards, etc.

The accounts of the Health Boards are audited by Local Government auditors whose reports are made available to me. In his report on the accounts of one Health Board for 1973-74 the Local Government auditor stated that, at his request. officers of the Board had carried out an examination of the system of assessing eligibility for disabled persons maintenance allowances. The examination revealed underpayments and overpayments. It also revealed losses arising from failure to follow up cases where there was entitlement to old age pensions or to have medical reviews carried out on due dates to establish whether medical incapacity still existed. In addition, particulars supplied by applicants for the allowances were not adequately checked and, as a consequence, incorrect information was entered in the records.

I have asked the Accounting Officer whether, in the light of this report, his Department has taken any action to have similar examinations carried out in the other Health Boards.”

Mr. Mac Gearailt.—This paragraph deals with the reliability of the system for assessing eligibility for Disabled Persons (Maintenance) Allowances. An examination of the system carried out by one Health Board revealed underpayments and overpayments of allowances and a number of other shortcomings, and I asked the Accounting Officer whether any action had been taken to have similar examinations carried out by other Health Boards. I might summarise his reply as follows:

The relevant statutory regulations set out procedures for ensuring that allowances continue to be paid only in appropriate cases. General reviews of all cases are carried out by Health Boards about every two years and individual cases are specially reviewed if circumstances warrant it. The need for periodic reviews of allowances is referred to from time to time at two-monthly meetings with programme managers. In the light of the specific situation referred to in the paragraph, the special attention of Health Boards was again drawn to the need for periodic review and at a meeting on 7 October, 1977, programme managers assured departmental officers that they were satisfied that the current position in regard to review of the allowances was satisfactory.

559. Chairman.—That is the summary of the Accounting Officer’s response to the Comptroller and Auditor General’s request. Do you wish to add to it?

—We are trying to improve the systems. We have special studies going on in two Health Board areas of the systems by which decisions are taken and payment of allowances monitored from time to time. There are two reasons for reviewing an allowance. One is a change in medical circumstances and the other is a change in financial circumstances. The Health Boards are required to keep an eye on medical circumstances. Very often this is only a formality as certain medical conditions cannot be reversed. In the case of medical or financial circumstances, there is an obligation on the person concerned to report a change. Health Boards are also expected to keep an eye on changes in financial circumstances. They are also expected to keep a check on those who are nearing the pension age of 67. The number of recipients under the scheme is 24,862. The number of cases brought to our attention is not a high proportion of that figure.

560. Are you satisfied that the system is not being seriously abused?

—Yes.

561. You have stated that the onus is on the person to notify the Health Board of any social welfare payment, such as an old age pension. The repayment of money to the Health Board by the person in receipt of it may cause hardship. Is there difficulty recouping money in certain cases?

—Because of inadequate liaison or because of special circumstances, a considerable amount of money may be involved. In some cases the Health Boards may have to write the money off.

562. In what way do they seek recoupment?

—Generally, the Health Boards seek a lump sum payment. In the case of a person who had other debts, they would settle for repayment over a period. Where a person who had been disabled in an accident was in receipt of the allowance and subsequently received a substantial settlement, a lump sum repayment would be sought out of that settlement.

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

“Subhead G.2.—Payments to Health Bodies other than Health Boards

The net expenditure of the General Medical Services (Payments) Board falls to be met from this subhead. The accounts of the Board are audited by Local Government auditors. In his report on the audit of the accounts of the Board for the three years 1973, 1974 and 1975, which has recently been made available to me, the Local Government auditor referred to an agreement made in July 1969 between the Pharmaceutical and Allied Industries Association and the Department of Health which provides that the General Medical Services (Payments) Board shall supply to each manufacturer and principal importer of drugs and medicines required for the General Medical Services a monthly statement of the number of prescription items dispensed by retail pharmacists for each of the firm’s products in the area of each Health Board. It also provides that each manufacturer or importer shall pay to the Payments Board a rebate of three old pence per prescription item as calculated in the monthly statement and that the rate of rebate shall be subject to adjustment so that it remains approximately 4 per cent. of the average ingredient cost per prescription item, should the cost increase materially. The Local Government auditor stated that the Association had been advised by the Payments Board in May 1973 that the rebate based on the rate of three old pence had fallen appreciably below 4 per cent. of the ingredient cost but that the Association contended that the rate of rebate was to remain at the original level pending a review which was to be carried out by the Department of Health in October 1973 and that any changes resulting from that review could come into effect on 1 April 1974. The Local Government auditor added that the sums brought to account in the accounts of the Payments Board for the three years 1973, 1974 and 1975 represented the amounts due for each year calculated on the original basis and that the adjustment provided for in the agreement had not been carried out. He stated that, if the rebate had been maintained at 4 per cent., approximately, of the average ingredient cost, the Board’s income in the period 1 April 1972 to 31 December 1975 would have been £647,765 greater. He also stated that during 1976 the shortfall in the Board’s income would be approximately £30,000 per month.

I have asked the Accounting Officer for his observations regarding the delay in having the rate of rebate adjusted as provided for in the agreement and I have inquired whether it is proposed to seek recovery of arrears of rebate from the firms concerned.”

Mr. Mac Gearailt.—This paragraph deals with the delay in adjusting upwards the rate of rebate payable to the Medical Services (Payments) Board by manufacturers and importers of drugs and medicines required for the General Medical Services. The reply of the Accounting Officer to my inquiry as to the reasons for this delay is rather detailed. The following summary covers the main points made:

The agreement between the Department and the Pharmaceutical Industries Association was to continue for an initial period of two years from the operative date which, for the commencement of the General Medical Services over the country as a whole, was 1 October 1972. The arrangements were not, therefore, due for review until 1 October 1974 at the earliest and in practical terms this could not be undertaken before January 1975 when statistics for two full years became available.

The Department holds the view that the readjustment of the rate of rebate would not be dealt with by the Association in isolation. Consideration would also have to be given to changes which had taken place in relation to two specific provisions of the agreement: (a) The industries Association could legitimately ask that the qualifying limits governing the rates of special discounts to hospitals be adjusted upwards. Such a demand could not reasonably be resisted. The resultant fall in special rebates earned by hospitals would mean an increased charge on the Exchequer; and (b) the existing agreement relates to a situation in which approximately 30 per cent of the total population is eligible for General Medical Services. In the event of a significant increase in this percentage the association has the option to renegotiate the agreement in part or in whole. As the percentage stood at 37.5 in March, 1976, it would have been virtually impossible to resist a claim by the Association that a significant increase had in fact taken place. The Accounting Officer added that the Medical (Payments) Board suffered no financial loss by the failure to increase the rebate and that the Vote as a whole would have been adversely affected were the general adjustment of the agreement pressed.

564. Chairman.—Does the Accounting Officer wish to add to that summary?

—It is a complex matter. The Payments Board are involved in the collection of a rebate at the rate of three old pence per item from manufacturers in the case of prescriptions dispensed by retail pharmacists. This was part of an agreement made with the drug industry at the time the choice of doctor scheme was being negotiated. Another part of that agreement related to the purchase of drugs for the hospital service. It was agreed that drugs would be provided to Health Boards and voluntary hospitals at the same price as they are made available to the retail trade, less discounts, the size of these depending on the size of the order. The maximum discount of 15 per cent is payable on purchases valued at £300 or more. It was agreed that the part of the agreement relating to the General Medical Services was in the context of a service covering about 30 per cent of the population and that the whole agreement would be reviewed after two years. When the two years expired we looked at this. Quite a lot had happened in relation to the price of drugs and also in relation to the 30 per cent, which had increased to 37 per cent; it is now almost 39 per cent. In looking at whether we should seek a revision of the agreement there were two factors to be taken into consideration. The first was whether we could get the substance of the agreement to stick in the context of the increase in the percentage covered by the General Medical Services and, secondly the net financial effect of seeking a revision. It became clear to us that to review the rebate of three old pence, which was out of date in 1976 and is certainly so now, and bringing it to an equivalent level. which would be about 4 per cent of the cost of drug items, would provide the General Medical Services (Payments) Board with a figure which, currently, would be about £300,000 a year more than they are getting. Balanced against that, the limit of £300 at which the Health Board are entitled to a 15 per cent discount would have to be adjusted in the same way to a figure in the region of £900 and the possibility of placing orders of that size would be much less. The discounts available now are of the order of £1 million a year. Our judgment, which was supported by the Minister at the time, was that the loss of these discounts would be greater than the possible gain by getting the extra £300,000 from increasing the rebates. It was judged that it would not be in our best interest to press for a revision of the agreement. The agreement as originally negotiated is still observed by both parties.

565. Deputy Woods.—I would not agree with the idea that because the rebate had to go up the other had to go up pro rata. Surely it is a question of the minimum size of order which is convenient. It is also tied within a bulk purchase arrangement. It would be uneconomic to operate a bulk purchase deal if the individual orders were too small. I believe there should be more comeback in that area. I was under the impression that there was some drift in the centralisation of this scheme. I should like to see a good deal of attention given to this. I am not sufficiently familiar with the detail of the ordering process to say anything more definite.

—It is not really a question of bulk purchasing. These discounts relate to purchases by individual Health Boards and hospitals from individual drug firms. Orders are based each month on the requirements of the Health Board or hospital and the drug firm must give a discount, depending on the size of the order. If the order is less than £300 it is a smaller discount and if it is over £300 it is 15 per cent. Since the price of drugs has risen, it is much easier to build up an order which will get the full discount. If the limit of £300 were to be raised to, say, £900, clearly far fewer orders would get full discount. Since the scheme was started, a very much higher percentage of orders can be placed so as to get the full discount.

566. I would need to look at it more generally to appreciate it. I have been familiar with co-operative groups and there was considerable flexibility. There seemed to be more flexibility when dealing as a free agent rather than a State agent. It is a pity more of this kind of muscle could not be brought into State operations. I am very glad to see that there are such bulk arrangements and package deals and that you have managed to recoup that kind of rebate. Perhaps more could be done in that area and it might be worthwhile to consider getting some outside advice on this matter?

—We have looked at options such as the possibility of setting up an agency for bulk purchases of drugs which would have its own distribution system. However, this would duplicate a system which already exists, and it is doubtful if there would be a net saving in public funds.

Private business operations operate with less money and assurance behind them and have a lower credit rating. At times they make deals which would surprise one. I should like to compliment the Accounting Officer and his staff on what they have achieved and on the attention they have given to it. It is exemplary that they have taken so much trouble to meet those requirements. I suggest it might be worthwhile to obtain the advice of a consultant in this matter.

567. Chairman.—Do I take it that the original agreement was based on a 30 per cent GMS membership?

—Yes. It is now 38.2 per cent.

568. While I accept the figures given by you and the doubt you cast on the saving that would come about through a revision in the rate of rebate, the fact is that the cost of drugs is not subject to the National Prices Commission or any other monitoring system. With the increases in membership of GMS, is it not a fact that at the end of the day the cost to the Exchequer has increased enormously? Consequently, the original agreement of 3d per item is not realistic. Because of the increased burden on the Exchequer on account of the 38 per cent GMS membership, would it be better for you to press ahead, or is it possible to press ahead and look for your pound of flesh on the basis of 4 per cent because of the enormous increase in the cost of drugs?

—We could but I am sure the industry would say if the cost has gone up they would have to look at the other arrangement. We have not had discussions with the industry on this but that is our assessment.

569. Was that an element in the original agreement?

—In the one document it was part of an agreement. The entire agreement would be reviewed at one time if we sought a review.

570. Deputy Woods.—Surely there is a physical requirement in this kind of mini-package?

—It would ordinarily be delivered by van but it would be one drop to the hospital.

571. It may be a month’s supply. It may be that the one-drop situation is not directly associated with the percentage increase. On the one hand, you are claiming you should have a percentage increase from 3d to whatever figure it might be but their figure was based on a one-drop situation. Provided the quantity was sufficient to fit in with the one drop, it does not necessarily have to be a pro rata percentage increase in the actual value of the goods?

—In talking about the one drop to a hospital or Health Board I am talking about the discount we get, but in relation to the GMS the drugs are delivered to the retail pharmacists. We do not pay for them until they have been prescribed and issued to the patient. They go to the pharmacist in the same way as private purchases and it is on those drugs that the manufacturers pay the 3d rebate. In relation to the price of drugs, we do have a general monitoring on the price of drugs. The price of imported drugs are not subject to control by the Prices Commission, but we have an arrangement with the drug industry to monitor the prices of drugs and to keep them in reasonable relationship with drug prices in the United Kingdom, allowing for the smaller market, cost of distribution and so on. In that way prices here, next to the UK, are as cheap, or cheaper, than elsewhere.

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

“In the course of his report on the audit of the accounts of the General Medical Services (Payments) Board the Local Government auditor stated that the cost to the Board of medicines supplied by pharmacists on the basis of stock orders to dispensing doctors in rural areas in the year ended 31 December 1975 was £1,872,360. These medicines are supplied under a scheme which enables a doctor, having a centre of practice three miles or more from a participating pharmacist, to dispense medicines for patients served from that centre if they so desire. The Local Government auditor indicated in his report that very little control was exercised over the finances of this scheme. He stated that doctors were not required to account for medicines dispensed nor for stocks held by them. As the Board’s expenditure under this scheme falls to be met from voted moneys I have sought the observations of the Accounting Officer in the matter.”

Mr. Mac Gearailt.—This paragraph deals with the problem of control over stocks of medicines supplied to dispensing doctors in rural areas. The Accounting Officer has informed me that it was intended to introduce a scheme of keeping records in relation to these medicines as from 1 January 1978. Under this scheme a doctor will send a copy of each stock order to the Health Board which will thus be aware of the quantity and type of drugs being ordered at the time of ordering. The appointment of full-time pharmacists to the staffs of the Health Boards has been approved by the Department and thus all the Boards will be able to have these stock orders monitored and to have alleged abuses investigated by a qualified person in future. The Accounting Officer also indicated that the average cost of drugs per person under the rural scheme in 1975 was £12.25 as against £13.99 for patients supplied by chemists on prescriptions.

573. Chairman.—Has the Accounting Officer anything to add?

—These are ordered by the dispensing doctor from the pharmaceutical chemist. He fills out the order and it is paid for through the system. We can monitor the amount any doctor is ordering and relate it to the number of patients for whom he is required to dispense. As the Comptroller and Auditor General has pointed out, per person covered it costs less where the doctor is dispensing than where the prescriptions go through pharmaceutical chemists. We would, however, not be too complacent about that because the kind of patients for whom the doctor would be dispensing would be in rural areas and would be less demanding than urban patients. We have had difficulties in recruiting pharmacists to the Health Boards. As they are recruited, we are monitoring in a better way the stock orders and the kind of orders placed and the way the doctors are disposing of the drugs which they get on the stock orders.

574. Deputy V. Brady.—I find it extraordinary that doctors are not required to give an account of drugs and medicines dispensed. Has some action been taken to remedy the situation or do you anticipate monitoring it in some way?

—It has been agreed with the medical organisations that doctors will keep a record but the subsequent monitoring depends on the availability of pharmaceutical chemists employed by the Health Boards. There have been recruitment difficulties but some Boards have them and monitoring is going on. Where there is prima facie evidence that a doctor might be ordering too many drugs, the pharmacist will talk to him about it. It is a risk that has always been there, even in the old dispensary system.

It leaves it very open?

—We recognise there is a difficulty there but we monitor it as facilities allow.

Deputy Morley.—The average cost per person given of people who avail of the services through the doctor vis-à-vis those who avail of the services through normal channels indicates that there is no abuse of this aspect of the service.

Chairman.—On the face of it, that is.

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

“In the course of the report referred to in the previous paragraphs the Local Government auditor stated that a control, which had been provided for in the design of the Board’s computerised payments system, had been discontinued. Each claim for payment submitted by a doctor or pharmacist must quote the number of the patient’s medical card and the control discontinued was intended to ensure that any claim quoting an invalid number would be rejected by the computer. The Local Government auditor indicated that it was apparently decided, as an interim measure, to relax this control and that this resulted in claims quoting any number, whether valid or invalid, being listed by the computer for payment. This position had continued up to the date of his report in November 1976. He also stated that an examination carried out by him indicated that a significant proportion of numbers were read as invalid by the computer but that payments had been made in respect of all these claims. He was, however, unable to determine whether claims were being made in respect of patients who were not medical card holders.

In the light of this report I have asked the Accounting Officer whether he is satisfied that the systems operated by the General Medical Services (Payments) Board are adequate to ensure that satisfactory control exists over its expenditure which is recouped from this Vote.”

Mr. Mac Gearailt.—This paragraph deals with the problem of acceptance by the computerised system of the Payments Board of claims for payment quoting an invalid patient’s number. The Accounting Officer informed me that the Payments Board and the Health Boards had for some time been checking the lists of medical card holders with a view to achieving the greatest possible accuracy in the computer files. The Payments Board has reverted to the original procedure and payment is now being deferred on all incorrectly numbered claims. Doctors might submit details in support of claims deferred. The Accounting Officer added that it was likely that the great majority of deferred claims would be paid following investigation.

576. Chairman.—Any further comment on that comprehensive summary?

—No, except to say that a mistake in this can arise in two ways. A wrong number could be given by a doctor, or a doctor could claim for somebody who is not on his list. In either case the computer picks it up. The doctor is notified if it is a wrong number, and he can reclaim. We have quite a lot of trouble with the medical organisations on this but this has been ironed out now. So as to prevent abuses of this kind, if the patient is not on the doctor’s list, the claim is rejected and not paid. If it is simply a matter of a wrong digit in a number, the doctor can reclaim in a subsequent month.

577. Are there difficulties arising out of wrong programming or from a lack of basic information?

—They can arise through the doctor putting in a wrong number in filling up the claim form, or as a result of wrong programming. As far as we know, it is usually the doctor making a mistake.

578. The Accounting Officer feels they are on top of the situation now?

—Yes.

579. Deputy Woods.—On Subhead A.2.— Consultancy Services—what consultancy services are these generally?

—In 1976, we had a firm of consultants advising on accounting and estimating for the health service, and on improving financial systems in two of the major hospitals in Dublin. We had a consultancy service operating on the internal audit and general systems development in the Midland Health Board. There was another consultancy service on the grading structure for secretary/manager posts in voluntary hospitals. Consultants were also involved in the development of a computerised system for carrying out a census of mentally handicapped persons.

580. There could be a few pounds over, there, for a consultancy service in relation to the kind of contracts we are talking about?

—We could not spend it at this stage out of this Vote.

I appreciate that.

581. Chairman.—On Extra Remuneration —we have been requesting Accounting Officers to supply additional information under this heading. This request will be brought formally to the attention of Accounting Officers at a later date. It is just a small change in the presentation of information. It means that the Accounting Officer will have to give the number of people, regardless of the amount, who are in receipt of overtime payments. Hopefully the Accounting Officer will be in a position to accede to our request?

—Yes.

I thank Dr. Hensey for his co-operation and I wish him a happy Christmas.

Deputy C. Murphy.—This is by far the biggest Vote to come before the Committee. I compliment Dr. Hensey and his staff on the high degree of accuracy in their Account.

Chairman.—I endorse that.

The witness withdrew.

VOTE 49—SOCIAL WELFARE

Mr. C. Collins called and examined.

582. Chairman.—Paragraph 54 of the Report of the Comptroller and Auditor General reads:

“Subhead E.—Payment to the Social Insurance Fund under Section 39 (9) of the Social Welfare Act, 1952.

The charge to the subhead represents the amount paid towards meeting the shortfall in the income of the Social Insurance Fund which bears the expenditure on social welfare benefits. In the course of audit it was noted that 742 benefit cheques amounting in value to £15,528 were stolen in January 1976 from the computer section of the Department and that it had been established that 109 of these, to the value of £2,342, had been fraudulently cashed. The Accounting Officer has informed me that the theft was apparently facilitated because of inadequate security in relation to the custody of the key to a press in which cheques awaiting issue were stored. The theft came to light as a result of inquiries by the Post Office Investigation Branch following reports of the non-receipt of cheques by payees. He also stated that he was satisfied that £2,342 represented the final amount of the stolen cheques illegally cashed and that court proceedings had been taken against a number of persons in relation to the theft. He added that new security procedures had since been introduced.”

Mr. Mac Gearailt.—The paragraph refers to the theft of 742 social welfare benefit cheques in the Department and the fraudulent encashment of some of them. The observations of the Accounting Officer on the matter are summarised in the paragraph and suggest that the theft was apparently facilitated by inadequate internal security.

583. Chairman.—The figure of £2,342 has been mentioned in the paragraph. Is that the final figure?

—That is the final figure. We have checked and nothing has come to light for a considerable time so it can be taken that that is the final amount.

584. Paragraph 55 of the Report of the Comptroller and Auditor General reads:

“It was noted that a member of the staff of the Department submitted a fraudulent claim for disability benefit in 1976 in respect of an insured person who had received benefit in 1975. The submission of the claim involved the use of the documentation relating to the benefit payment made in 1975 and the alteration of the computer records. While the fraudulent nature of the claim was detected before any payment was made I was concerned lest the controls on access to claim documents and computer terminals might not be adequate. I accordingly communicated with the Accounting Officer and he has informed me that these controls are as adequate as is possible in the type of ongoing working situation necessary for the daily issue of disability benefit payments as they fall due.”

Mr. Mac Gearailt.—The paragraph deals with the presentation of a fraudulent claim for disability benefit by an officer of the Department who was working in the disability benefit section. My main concern was to ascertain whether the Departmental internal control procedures were adequate to minimise the danger of such fraudulent claims being submitted and to identify them as such if received. The Accounting Officer’s comment on this aspect of the case is contained in the paragraph.

585. Chairman.—In regard to access to claim documents and to computer terminals, have the procedures been tightened up in this area?

—We have done everything we can. The basic difficulty is that the issue of cheques is urgent day-to-day business and the staff must have access to the visual display units. It would have been equally possible to forge claims in pre-computer days by getting blank documents. The danger is always present. All we can do is try to minimise it. The staff of the section must have unlimited access to the units during the working day. It is significant that in this case the fraudulent nature of the claim was detected before payment was made. In other words, the system caught it.

586. Is the cross-checking adequate?

—It is adequate within limits. A review of security showed that some cross-checkings had fallen into disuse but that situation has been remedied. While I do not like to make too much of it, one has to accept that making payments on time imposes constraints. As we must meet deadlines we cannot mount a huge security operation.

It is not possible to have a watertight system?

—Exactly.

587. Paragraph 56 of the Report of the Comptroller and Auditor General reads:

“It was noted that the number of recorded overpayments of disability benefit from the Social Insurance Fund increased from 1,787 in 1971-72 to 4,378 in 1975 and that, of a total amount of £197,759 discovered to have been overpaid in 1975, only 20 per cent. approximately was recorded as recovered. The Accounting Officer has informed me that the increase in the number of recorded overpayments was due mainly to the increase in the annual number of claims received and the greater all round effectiveness of the disability benefits section resulting in a higher detection rate. He stated that every possible effort is being made to effect a reduction in the incidence of overpayments. The procedures are kept constantly under review and advantage has been taken of the introduction of a computerised system for payment of benefits to build in, where possible, safeguards against overpayments. On the other hand, while it was not possible to say to what extent the level of overpayments had been affected by the introduction of this computerised system, undoubtedly overpayments had occurred which might not have arisen under a clerical system. In regard to the low recovery rate the Accounting Officer explained that most of the overpayments arising from departmental error can only be recovered by deduction from future benefit and then only at a nominal rate to avoid hardship.

In regard to the recording of overpayments recovered by deduction from current benefit he added that there is at present no facility whereby the computer can notify the Accounts Branch of such recoveries. It is only on termination of a claim or on completion of recovery that this notification is sent manually. It is. however, hoped to introduce such a facility in the computer reprogramming at present being undertaken.”

Mr. Mac Gearailt.—The number of recorded overpayments of disability benefit showed a substantial increase between 1971-72 and 1975. The reasons given by the Accounting Officer for this increase are noted in the paragraph. His observations on the recovery rate of these overpayments are also summarised in the paragraph.

588. Chairman.—It seems that the computer has no facility for detecting overpayments until the termination of the claim. Would it be possible to introduce a programme that would detect an error during the course of the claim?

—The weakness is in the notification of recoveries of overpayments to the Accounts Branch. We had hoped to reprogramme the computer to enable this to be done on a week-to-week basis but we can only do it at the end of the claim. There have been many demands on our limited expertise in computers both in our own Department and in the Department of the Public Service who do a great deal of work for us on computerisation. We have not advanced as far as we would like in having an adequate system of checking on benefit payments by computer and are very conscious of the need for it. I can assure you that it will be done as quickly as possible.

589. The basic problem seems to be the training of personnel?

—To revise programmes. We are involved in other computer exercises arising from the forthcoming introduction of pay-related contributions. As a result, it is not easy to make the refinements that we would like to make in our existing programmes but we are conscious of the need for them.

I appreciate your problems.

590. Paragraph 57 of the Report of the Comptroller and Auditor General reads:

“I have been informed that overpayments of benefits from the Fund outstanding at 31 December 1976 were of the order of £873,000 as compared with £640,000 at 31 December 1975. Twenty-six individuals were prosecuted for irregularly obtaining or attempting to obtain benefits. Convictions were secured in 22 cases.”

Mr. Mac Gearailt.—This paragraph is for information. I have no further comment to add.

591. Chairman.—Paragraph 58 of the Report of the Comptroller and Auditor General reads:

“Departmental procedures provide for surveys, known as original surveys, to be carried out by the Inspection Branch of the Department, on a rotational basis, of employers’ records to ensure compliance with the Social Welfare Acts. In the course of audit it was noted that the number of such surveys had shown a marked decline from some 18,000 in 1971 to 5,400 in 1975 and I inquired as to the reasons for the decline and whether the present level of survey work is considered adequate.

The Accounting Officer has informed me that the decline in the number of original surveys carried out by the Inspection Branch has been occasioned by staff shortages. An increasing workload in the Branch was aggravated by the introduction from 1971 of a number of new assistance schemes and the gradual reduction since 1973 in the qualifying age for old age pension. The existing staff of Social Welfare Officers was not sufficient to cope with the increased work. The additional assistance claims, which arose in 1973, 1974 and 1975, were dealt with by way of overtime worked by Social Welfare Officers. This, however, was not adequate to meet the situation and the level of insurance survey work had to be reduced so that priority could be given to assistance claims. In the meantime a review of staffing levels had taken place in conjunction with the Social Welfare Officers’ Association with the help of an Organisation and Methods team to determine the numbers of additional staff needed but only 48 of the 72 heads of staff deemed necessary were sanctioned, with the result that original surveys had to be reduced from 20 per cent. to 10 per cent. on 1 February 1976. The Accounting Officer added that the present level of survey work is regarded as unsatisfactory but that proposals are under consideration for the re-examination of the work of the Inspection Branch with a view to increasing the volume of survey work undertaken.”

Mr. Mac Gearailt.—This paragraph draws attention to a marked decline between 1971 and 1975 in the surveys of employers’ records carried out by the Inspection Branch of the Department to ensure compliance with the Social Welfare Acts. The Accounting Officer explained that the decline was due to staff shortages. Information given by him regarding the steps being taken to improve the position is contained in the paragraph.

592. Chairman.—In regard to original surveys, there is a marked decline from 18,000 in 1971 to 5,400 in 1975. What is the present position in regard to staff shortages?

—The staff shortages have been made good. There has been a restructuring of the staff engaged in this work. As a result of the new quota arrangements, we are confident that in 1979 we should have the surveys back to the figure of 20,000.

593. Is this a satisfactory level?

—It is. We do not look upon them as one problem. There is the question of reputable employers and non-reputable employers. It is not necessary to visit reputable employers as frequently as non-reputable employers. There is that type of survey as well as the original survey, which means that the officer records new employers. The fall-off was due to staff shortages combined with the reduction of the pension age and the introduction of new assistance schemes, all of which required means investigation which is time-consuming. Work relating to entitlement to pensions or to some new service takes precedence over survey work. The staff has been brought up to our full requirement. We are satisfied that we will be able to bring surveys to an adequate level.

That is very good news.

594. Paragraph 59 of the Report of the Comptroller and Auditor General reads:

“I have been informed that 138 employers were prosecuted for failure to comply with the provisions of the Social Welfare Acts and convictions were secured in 133 cases. Civil proceedings for recovery of arrears were completed during the year in 94 cases. Decrees in favour of the Minister for Social Welfare were obtained in all cases, the total amount being £23,748.”

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

595. Chairman.—In relation to paragraph 59, how many cases were there in 1975?

—In 1975, 101 cases were referred to the Chief State Solicitor. That would be different from the number decided throughout the country.

596. Deputy Morley.—Does an insured person—an employee—suffer because he happens to be unfortunate enough to work for such an employer?

—He might suffer a slight delay. If he has not the requisite contributions in the governing contribution year, we probably decide a claim on that basis and he is told he is not eligible for benefit. If he says he was working for such an employer we send a man to check up. Immediately we find there was insurable employment and there was no collusion between the employee and the employer, we have power under a regulation made some years ago to give credit to the employee for those contributions, even before we have collected them, and put him into benefit. He does not lose but he may suffer a delay.

597. Would it be a considerable delay?

—Ordinarily it would not be considerable, unless the employer has gone out of business or disappeared. We must establish that there was insurable employment before we can allow credit. It would be an exceptional case that would be unduly delayed. In the meantime, the claimant could be paid unemployment assistance if he were eligible on means.

598. Chairman.—In the event of the employer disappearing without trace, where does the employee stand?

—Generally our outdoor officer would make local enquiries. Even in cities it would be difficult for someone to leave no trace whatsoever. It could be that others were employed in the same concern and the officer would check out the story. Obviously we must be careful, but I have never encountered a case where we failed to get a reasonable idea as to whether there had been insurable employment.

599. Payment of benefit is not contingent on recovery by you of contributions from the employer.

—That is so.

600. Paragraph 60 of the Report of the Comptroller and Auditor General reads:

“Subhead H.—Children’s Allowances

From an examination carried out by my officers it appeared that the controls relating to the preparation, custody and issue of children’s allowance books and over the disposal of books returned to the Department were inadequate in a number of areas and I communicated with the Accounting Officer in the matter. He informed me that in some of the areas to which I drew attention the controls were considered adequate and that in other areas they were as good as were possible having regard to the constraints of the daily work routines, the accommodation provided and the staff available to deal with the increased volume of work in this branch in recent years.”

Mr. Mac Gearailt.—We are concerned in this paragraph with the controls exercised by the Department over the custody and issue of children’s allowance books and over the custody of allowance books returned to the Department. The paragraph contains a very brief summary of a long and detailed reply furnished by the Accounting Officer on various aspects of these controls which were queried by my Office. Subsequent to the receipt of this reply the Accounting Officer met with my officers and discussed with them the main areas in which we considered the controls were deficient and I understand that controls have since been strengthened in a number of areas. I appreciate the difficulties facing the Children’s Allowance Branch of the Department, especially in recent years, such as staff problems, accommodation problems, increased workload and shortened time schedules for preparation and issue of allowance books. Nevertheless having regard to the very considerable cost to the Exchequer of children’s allowances, the substantial face value of individual allowance orders as well as the relative ease with which they can, apparently, be cashed on occasions, I feel that our aim should be to secure that the controls over their custody and issue should be on a par with the controls exercised over the custody and issue of cash itself.

601. Chairman.—Has the Accounting Officer anything to add?

—I have inspected the Children’s Allowance Branch with particular reference to the security aspect and we have made a number of improvements. Part of our difficulty was accommodation. Presses had to be in corridors and that type of thing. As in the case of the disability benefit, there is a heavy daily traffic. For example, children’s allowance books are returned to have the post office of encashment changed and every day children are reaching 16 or 18 years of age. When one considers that there are probably 430,000 claims live at any time covering 1,100,000 children, it is obvious that there is heavy traffic. There were certain weaknesses such as the keeping of a key in a particular drawer rather than in the personal custody of an officer. The solution was to have a couple of keys held in personal custody. All stencil cabinets are held in a locked room, a responsible officer having the key and most of the plates for addressing books are held in locked cabinets. When we solve our accommodation problems we should be able to meet all reasonable requirements on that. There is a constant flow of blank books from the storeroom to the different sections every day and that is one of the problems. There must be free access during the day. On the advice of the Comptroller and Auditor General’s Office, we have reintroduced monthly stocktaking. I have satisfied myself that we have gone a good way towards the level we should reach and that we will be able to do more when some of our accommodation problems have been solved.

602. I presume you have pressed for an improvement in your accommodation?

—Yes.

603. At the moment, unofficial access to books is literally a licence to print money?

—Yes.

604. The orders in a children’s allowance book could be worth a few hundred pounds?

—The value can be quite high.

605. Paragraph 61 of the Report of the Comptroller and Auditor General reads:

“Overpayments of Social Assistance

I have been furnished with the following information regarding overpayments of Social Assistance:—

Four individuals were prosecuted for irregularly obtaining or attempting to obtain assistance. Convictions were secured in three cases.”

Mr. Mac Gearailt.—This paragraph is for information.

606. Chairman.—What is the current position with regard to overpayments not disposed of at 31 December 1976?

—This is a cumulative figure going back for years. While there was a substantial increase in 1976 in the amount of overpayments that came to light we are aware that a good deal of that was due to pressure on staff in those years. For example, we had for a few years a reduction every year in pension age which, in effect, doubled or more than doubled the intake of claims. Similarly, there was a live register increase and all of these were on the assistance side. Unfortunately it was not possible to get sufficient staff to deal with those and the pressures were on to get the claims dealt with. The result is that overpayments occurred. Even though the increase in the figure looks bad, it may be a sign of more attention being devoted to that aspect now. In 1977 and 1978 the figures are still high even allowing for the increased value of payments, which is also a factor. We are trying to improve our procedures for discovering the overpayments. On the question of recovery, we regard them as recoverable until there is obviously no hope and then we seek the sanction of the Department of Finance to write off the amounts. On the question generally, if errors are due to some fault of the Department we have to be very careful about recovering the overpayment from the payee, who was really guiltless, and while we try to recover by instalments one must have regard to the fact that the total payment being received by the individual is probably small and hardship could be caused if we tried to embark on a more rigid recovery policy.

607. Most Deputies are au fait with the procedures involved. While we accept that the larger sums represent extra vigilance on your part, the number of cases brought to prosecution stage—four—seems to be quite small?

—The number of prosecutions has been stepped up considerably in recent years. It is in the 50 range now. On the unemployment assistance and benefit side it has increased and it is in the 70 range with regard to disability benefit. It is not always easy to bring prosecutions because of the evidence of identification required even from our own officials in employment exchanges. A case has to be very soundly based before we can go to court. We are stepping up on the prosecutions where we have adequate evidence.

Deputy Morley.—It is very commendable that in cases where the person is overpaid because of some deficiency in the system that the recovery procedure would be very lenient. To demand a lump sum repayment, or even substantial instalments, would in many cases cause severe hardship. When, because of lack of staff or for some other reason, the Department were not in a position to process a claim as closely as they should have, it is only fair that the person concerned should not have to suffer undue stress.

608. On subhead G.—Old Age Pensions (Non-Contributory)—there is a large sum here, almost £2 million, which was less than granted. Would that reflect a more rigid scrutiny of claims, a more rigid determination of means and assessment of income by the Department?

—No, I would not say that. While the figure looks large—at £1.8 million—it is on an original grant of £73,500,000. It is an error in estimation rather than a reflection of any altered attitude on means. The means scale has not been changed and our officials are required to implement the means scale as laid down by the Oireachtas. There would not be any question of a more rigid application of the means test. The number of pensioners is approximately 135,000. We make the estimate long before the commencement of a particular year. We have no idea of how even the current year is working out when preparing the estimate for the following year. With the incidence of deaths and the reduction in age in recent years, it takes time for a pattern to emerge to enable us to come somewhat closer. We are not always notified immediately of deaths of pensioners. The point I am making is that the reason for this variation is just that we were not able to estimate the requirement any closer.

It is understandable.

609. Chairman.—The amount of the saving is only about 2 per cent.

—Yes, 2.5 per cent.

610. On Extra Remuneration—we have been asking Accounting Officers to supply additional information in respect of this heading in the Appropriation Accounts. Accounting Officers will be notified formally of the request which is really only a change in the form of presentation. I hope the Accounting Officer will be able to accede to our request.

—Certainly.

I thank Mr. Collins for his co-operation and wish him a very happy Christmas.

The witness withdrew.

VOTE 40—FISHERIES

Mr. A. W. Duggan called and examined.

611. Chairman.—Paragraph 46 of the Report of the Comptroller and Auditor General reads:

“Subhead C.3.—Main Fishery Harbour Works including Payments to the Fishery Harbour Centres Fund

Reference was made in paragraph 55 of my previous report to an improvement scheme at Killala Harbour which commenced in 1969 and on which work was suspended in 1973. The Accounting Officer informed me that no progress was made in 1976 towards the completion of this project because of the failure of Mayo County Council to contribute the full amount of the local contribution. The Office of Public Works has indicated that the scheme would take about twelve months to complete.

I understand that the expenditure already incurred amounts to £142,247, that the present estimate of final cost is £225,250 and that, in addition, a sum of £3,066 has been expended on the clearance of silt at Inch Island in the sea approach to Killala.”

I propose that we take paragraph 28 of the Finance Minute together with this paragraph.

Mr. Mac Gearailt.—Exchequer expenditure on an improvement scheme at Killala harbour formed the subject of a long paragraph in the Committee’s Report of June last. The comments of the Minister for Finance on that paragraph are contained in paragraph 28 of the Minister’s Minute dated 18 October 1978.

612. Chairman.—The Minute states that meetings took place between the Accounting Officer’s Department, the Office of Public Works and the local authority. What is the current position with regard to this? The two members present happen to be members of the local authority concerned, and we wish to declare our interest in the matter.

—I am aware of that. There were two meetings. One was on 15 March, between officials of my Department, representatives of Mayo County Council and the Office of Public Works to try to iron out these difficulties. There was a further meeting on 8 June as a result of which we had a report from the Office of Public Works which made two main suggestions for further work on the harbour. These suggestions were considered by the Mayo County Council who found neither of them acceptable. There is a request for a meeting with my Minister who is quite prepared to meet the council. This meeting will be arranged shortly to suit the convenience of the county council. There has been no movement beyond that. I feel a bit like the jam in the middle of a sandwich—I am being squeezed from both sides and I have little room to manoeuvre so as to accommodate all the people involved. I feel that the meeting with the Minister will serve very little purpose unless the Board of Works take part, and I will suggest that to the Minister and the council.

I endorse what has been said about the usefulness of the presence of the Office of Public Works. Deputy Morley will bear me out in that their report used the words “rectification” and “improvement”. The county council do not seem to be too happy about getting involved in the process of rectification, but there might be room for manoeuvre on the question of improvements. We are getting down to verbiage now, and the definition of words, which is not very helpful. We had better leave it until the meeting takes place with the Minister, with the Office of Public Works hopefully present.

613. On Subhead C.1—Sea Fisheries Development—in that case there is a fairly substantial percentage reduction at least in the expenditure as against the grant. The note is fairly comprehensive here.

—A fair measure of detail is given in the note.

614. On Extra Remuneration, we have requested additional information for the future under this heading from Accounting Officers and this request will be brought formally to your attention. It means a slight change in the presentation of the information concerning overtime payments. I hope you will be able to accede to our request.

—Yes.

VOTE 37—FORESTRY

Mr. A. W. Duggan further examined.

615 Chairman.—Paragraph 40 of the Report of the Comptroller and Auditor General reads:

“Subhead C.2.—Forest Development and Management

In the course of audit it was noted that in the case of a contract for the supply and delivery to designated forest centres of five tractors the contract price of £82,191 was paid in full into the supplier’s bank account on 24 December 1976, following the receipt of invoices dated 22 December 1976. As an examination of machinery allocation records showed that the five tractors were not delivered to the forest centres until 1977, the final delivery being made on 12 May, I inquired why payment was made from the Vote in 1976 in respect of a liability which had not fully matured in that year. The Accounting Officer informed me that the contract price took account of a trade-in allowance on four old tractors and the cost of additional work involving the attachment to the new tractors of four winches salvaged from the tractors traded in and one from another tractor being retained by the Department. He stated that the new tractors were delivered at the supplier’s premises in December 1976 and were inspected by the Department’s mechanical engineer who formally took possession of them. The firm could only deal with the transfer of winches to one machine at a time and since the old machines were operating at remote centres it was agreed that they would be left there to complete ploughing before being taken over by the firm. The withdrawal of all machines simultaneously would have interrupted work programmes and resulted in increased costs of transportation. He added that payment was made on foot of the contract in December 1976 after formal possession was taken of the tractors at the supplier’s premises but that the payment inadvertently included an amount estimated at £1,100 being the cost of transferring the winches and delivery to sites, work which was not completed until 1977.”

Mr. Mac Gearailt.—The contract price for five tractors ordered by the Department covered delivery to designated forest centres throughout the country. Payment in full was made in December 1976 whereas delivery to the designated centres was not effected until the following financial year. As it appeared to me that a liability which had not fully matured had been met from voted moneys in 1976, I sought the observations of the Accounting Officer on the matter and these are contained in the paragraph.

616. Chairman.—Has the Accounting Officer anything to add?

—This was a package deal. We were buying five new tractors and trading in four tractors. The fifth one was being fitted with an existing winch. The winches last longer than the tractors. The package deal involved the trade-in allowance, the removal and fitting of the winches and delivery of the tractors to the areas where they were to be used. The old machines were fully engaged in the ploughing programme at the time. It is normal practice to arrange for them to be brought in one by one as the winches are fitted. We do not want to bring them in from the country and then have them go out again as this would mean that 10 per cent of our tractor fleet would be out of commission if we took them in together. Therefore, it suits us to arrange it in this fashion. There was a payment prior to the actual work being carried out in respect of the fitting of the winches and in respect of delivery. It was estimated at £1,100. This point is likely to arise in the future and we will be able to make a settlement which will exclude that part of the payment until the job has been completed.

617. On subhead E—Forestry Education —do you have a specific number of applicants for your training programme? The note states that there is a saving due to a reduced number of trainees.

—At the time the Estimate was prepared we were budgeting for a higher number. We had 14 completing their training in that year and we took in only nine trainees. Our estimate was for a higher number. It also affects the expenditure if the trainees are put on practical training in the forests. During such time they are paid under subhead C.2 as forest workmen.

I should like to take this opportunity to wish you all a happy Christmas.

The witness withdrew.

The Committee deliberated.

The Committee adjourned.