Committee Reports::Report - Appropriation Accounts 1976::23 November, 1978::MIONTUAIRISC NA FINNEACHTA / Minutes of Evidence


(Minutes of Evidence)

Déardaoin, 23 Samhain, 1978

Thursday, 23rd November, 1978

The Committee met at 11 a.m.

Members Present:


N. Andrews,


C. Murphy,


F. O’Brien,



DEPUTY O’TOOLE in the chair.

Mr. S. Mac Gearailt (An tArd Reachtaire Cuntas agus Ciste), Mr. P. H. Mullarkey (An Roinn Airgeadais), Mr. C. K. McGrath (An Roinn Airgeadais), and Mr. P. Boyle (Roinn na Seirbhíse Poiblí) called and examined.


Dr. J. White called and examined.

243. Chairman.—On subhead D—Purchase and Repair of Pictures (Grant-in-Aid)—is this a set figure?

—Being a grant, we do not have to spend it in the year. The amount we get for pictures goes nowhere towards buying pictures at modern prices. It is mostly used for repairing frames and so on. Sometimes we manage to accumulate money and buy a small Irish painting after two or three years.

244. Deputy Woods.—In effect, some of that money is carried over?

—We may do. I cannot say for certain in this instance. As a rule, we have a carry forward in the grants-in-aid. We do not have the worry that we have with other funds. As we cannot overspend we have to watch our expenditure during the year. In the case of grants-in-aid we spend as necessary.

245. You showed what was expended in the Grants-in-Aid Account?

—Yes. We keep an audited account. Whatever is left at the end of the year goes forward to the next year. At the beginning of the year we look to see if we have a surplus and then spend accordingly.

246. Chairman.—On subhead E—Conservation of Works of Art (Grant-in-Aid)— does the same situation apply?

—Yes. The money is used for restoring materials. We have three restorers and they need materials of various kinds acids, solvents and canvas, for working in their restoration laboratory, as well as occasional pieces of scientific equipment. The sum of £5,500 is a modest amount for three people for a year.

247. Deputy C. Murphy.—On subhead F —Purchase of Books and Journals (Grant-in-Aid)—I see that in 1975 the amount under this subhead was £6,000 and it is now £5,000. Is there a reason for the decrease?

—In 1975 an error was made by the librarian in charge of our art reference library. We had to make a supplementary application to transfer money because she overspent in that area. We were lucky enough to have an excess in another grant and were given permission to transfer it.

I see from the footnote that there is a special account for this subhead.

—Yes. It is a grant-in-aid like the others and is for the purchase of books. The books are on display in cur art reference library. It is visited every day by students from the school of art and the universities. It is an art reference library specialising in books on art. We acquire only books on art which other libraries such as the National Library do not acquire.

248. I understand it is not necessary to expend the full grant-in-aid in the financial year?

—No. The difference between a grant-in-aid and other Estimates is that funds can be carried forward from year to year.

249. There were not funds available to carry forward in 1976?

—The reverse happened. We overspent due to a miscalculation and, with permission, we had to transfer from one area to another.

250. It would seem that there is not an accumulation?

—Not usually. Coming to the end of the year the staff must exercise great care not to over-order. Invoices come in a considerable time after orders are sent out and VAT on books and other expenses arise. This makes it difficult to be sure of exact amounts.

251. Chairman.—On Extra Remuneration, we have been asking other Accounting Officers to change in future the format under this heading to include all people in receipt of overtime payments.

—As far as the Gallery is concerned, the only people in receipt of overtime payments are attendants and cleaners because the remainder of the staff do not qualify for overtime. We can easily adjust the format to make sure all overtime payments are shown.

252. Deputy C. Murphy.—There seems to be a lesser demand now for reproductions and miscellaneous items available in the Gallery, yet many people visit the Gallery. Is this a trend?

—The information given is correct but the explanation will make clear that it gives a false impression. The system whereby the Gallery and other institutions issue reproductions on cards and so on is related to the operations of the Government Publications Sale Office. If one wishes to publish a postcard or a book one applies to the Government Publications Sale Office, they provide the publications and one sends them the receipts. Government publications tend not to be very elegant and paper and printing are of poor quality. It is impossible for me to hope to sell the kind of publications for which they are responsible. As well as that, we have a secondary source of income which is not shown in the accounts. It is a private source of income which I obtained and with this we run a bookshop and publish large quantities of postcards, reproductions and books of all kinds and we have a thriving bookshop at the Gallery. This is run on a profit-making basis but does not come into the accounts because we have a special fund called the Magawly-Bannon Fund. A lady in America left us some money to do this and we run this bookshop on the basis of that fund. The only items which appear on this account in front of you are in respect of printings supplied by the Government Publications Sale Office and the return of money to them. The amount of money shown here is money returned to the Government Publications Sale Office for publications supplied and it is a tiny part of the activities of the bookshop. We are selling great quantities of postcards and reproductions.

253. It seems a pity we have inferior goods, as it were, on sale from the Government Publications Sale Office and a higher quality elsewhere. I wonder could we do anything to improve that situation?

254. Chairman.—I am very interested in the Accounting Officer’s comment on the quality of paper and printing emanating from the Government Publications Sale Office. It is a very significant comment. The Committee might take this up with the appropriate Accounting Officer when he comes before us?

—Chairman, I hope you will permit me to say I was not criticising the Government Publications Sale Office. They have the terrible difficulty of producing Bills of all kinds and lists of things which have to be circulated to industry. Necessarily they have to keep down the expenditure on these things from which there is a very poor return. The tendency has been in modern society for the institutions to use the Government Publications Sale Office as they exist but they were never intended to do art publications proper. Naturally I took my initiative in my own way. I would hate to give the impression that I was criticising an admirable section of the Civil Service who are doing an admirable job. I did not mean to criticise them.

Deputy C. Murphy.—I accept that. I have seen a wonderful standard in books through the medium of Irish for children. Even the colour in them is magnificent. Perhaps we could have a look at the situation.

Chairman.—I appreciate the Accounting Officer’s qualification of his statement. It would seem that more marketable merchandise can be produced elsewhere. We could look into this and hope to have it improved, if possible.

Deputy Woods.—I should like to thank the Accounting Officer for his explanation on the Appropriations in Aid. I could not understand them at first and I intended to ask something about them. I brought a group of Italian visitors to the Gallery recently. They were here in connection with the European movement and were very excited by the paintings on display and also by the service offered in the little shop you have there. It seemed to be a thriving business providing very high standards of materials. You are very much to be complimented on your initiative in that respect.

255. Chairman.—What is the position in regard to the stock of books you have which are of inferior merchantable quality?

—The position is that the Government Publications Sale Office naturally pay for what they purchase or have printed. Therefore, they would require that any surplus would be sold out. My predecessor bought a large quantity of very inferior quality postcards that you would be ashamed of. I explained the matter to the Director and got his approval to sell them off at cost. We have cheap cards which we sell at 1p or 2p. Those we ourselves got are sold at 5p or 6p. Eventually we will get rid of all the old inferior cards and there will not be any appropriations-in-aid appearing in the accounts.

I should like to thank you on this, your last, appearance. You have been very frank and forthcoming in your replies. May you have many happy years enjoying your interest in art.

—I have always been treated with great courtesy here.

The witness withdrew.


Mr. G. A. Meagher called and examined.

256. Chairman.—Paragraph 23 of the Report of the Comptroller and Auditor General reads:

Subhead E.1.—Housing Subsidy

Subhead F.—Water Supply and Sewerage

Subhead M.—Grant to the Road Fund

The payments to local authorities from this Vote in the year under review include Housing Subsidy £29,601,896 (Subhead E.1.) and Water Supply and Sewerage grants, £5,167,579 (Subhead F.). In addition local authorities received in the year grants totalling £20,705,428 from the Road Fund which in turn received a grant of £5,356,000 from the Vote (Subhead M.). The accounts of the local authorities are audited by Local Government auditors and from an examination of their reports it was noted that one auditor had drawn attention to the absence of proper internal audit in one of the authorities audited by him and that two others had referred to the lack of financial controls, in the case of two other local authorities. I inquired whether steps were being taken to improve financial controls operated by local authorities.

The Accounting Officer has informed me that the appropriate county or city manager is directly responsible for the efficiency of the administration of each local authority and that the need to give particular attention to financial control was brought specially to the notice of the managers both by way of circular letter and at quarterly meetings with the Minister and with officers of the Department on several occasions since March 1975. He stated that considerable progress had been made in recent years also with the modernisation of the accounting processes of local authorities including the introduction of a new programme form of estimates giving a much improved framework for financial control. He also stated that, in so far as the actual strengthening of staffing of local authorities on the financial side is concerned, a scheme of regrading of clerical and administrative staff had been introduced in local authorities since early 1975 and that, in addition, a new grade of Finance Officer which has been recognised by the Minister had, to date, been introduced in one local authority. This had been recommended by a Finance Sub-Committee of the Local Government Manpower Committee which is currently examining the question of support staff in accounts branches. The Accounting Officer added that his Department and the Department of the Public Service had undertaken a joint survey of staffing levels and strengths in the accounts area of local authorities and that a report on this was expected shortly.

Mr. Mac Gearailt.—This paragraph deals with shortcomings in financial control to which Local Government auditors drew attention in their reports on the accounts of three local authorities. Having regard to the very large sums from voted moneys and from the Road Fund made available to local authorities generally I was concerned to learn of these shortcomings and I inquired from the Accounting Officer as to the steps being taken to eliminate them. The information furnished by him is contained in the paragraph.

257. Chairman.—It seems a new grade has been created, that of Finance Officer in local authorities. How many have been appointed since the scheme was introduced in 1975?

—One in Cork Corporation, and four further Finance Officers have been approved for Limerick Corporation, Limerick County Council, Monaghan County Council and Tipperary South Riding. Further appointments are envisaged as vacancies occur in the office of County Accountant. The Finance Officer post is a higher grade than that of County Accountant and the duties specifically include the work of internal auditing. As an additional measure the Department is now monitoring expenditure and estimates on a quarterly basis in conjunction with City and County Managers. Furthermore, some courses for accounts branch staffs have been set up. Another improvement is the publication of a volume of detailed accounting prepared by a member of the Department’s auditing staff.

258. Will the Finance Officer replace what we knew as the County Accountant. I suppose many of them were not accountants in the sense of having accountancy qualifications?

—That is so. Where the Finance Officers replace the County Accountants their duties will specifically include internal auditing. Their duties will also be such as to enable the accounts of urban areas within counties to be dealt with by the Finance Officers; County Accountants, by the terms of their duties, are restricted to the county health districts.

259. The paragraph states that this Department and the Department of the Public Service had undertaken a joint survey of staffing levels and that a report was pending. Has there been a report?

—It is on foot of that report that the posts of local authority Finance Officer are being created.

260. As retirements occur in the post of County Accountant is it the intention to replace County Accountants across the board?

—As it occurs, each vacancy will be examined on its merits, and where appropriate the County Accountant will be replaced by a Finance Officer.

261. What is your estimated time scale for the completion of this?

—A lot depends on the occurrence of vacancies. County Accountants move out of posts through promotion or retirement. The promotion opportunities have been enhanced by the provision of the new posts which have been approved.

262. Do you hope this will improve the auditing situation enormously?

—That is the objective. The Finance Officer duties will include specifically that of internal auditing. Dublin Corporation are in a separate category but in their case some upgrading of staff has been approved and some of the Corporation’s accounting staff have been sent on courses.

263. Deputy Woods.—The Accounting Officer mentioned the quarterly assessment of the estimates. How is it done? Are the accounts on computer?

—Yes. Local authorities in about 12 areas are using computers. At present they are concentrating on payrolls and rates. They will move into other areas as they become familiar with the operation. The quarterly assessment consists of a review of the financial allocations to the local authorities and of their estimates under the various headings in the estimate framework set against the actual expenditure for the quarter. These returns are sent to the Department and the Department keep in contact with the managers if there is any evident problem.

264. I take it that the computer use to date is mainly related to payroll and not so much to the management of the estimates and their progress.

—I am not familiar with it in detail from area to area. Basically the use relates to payroll and rates applotment. The finer aspects of management information may not be in universal operation at present. As you know, there is a Local Government Computer Services Board which sets advisory standards for local authorities.

265. I was wondering how far it had gone and to what extent it was an aid to management. I would have thought that monthly assessments were feasible with the use of a computer. I understand from what you say that the matter is developing?

—One must also bear in mind that the complete range of local authority operations must be covered if it is to be meaningful. The finances of local authorities are based on a framework of eight main headings. Within that framework there are 39 additional sub-groupings. To cover it all the computer operation would have to be quite sophisticated at this stage.

266. Chairman.—I should like to refer to the appointment of Finance Officers to local authorities. Over-issues will be discussed in the next paragraph. As the Department of the Public Service were involved in the survey, I should like to ask Mr. Boyle if this idea was initiated by the Department of the Public Service or if it was due to a lack of audited returns from local authorities. Would it not be better to appoint these officers, take this opportunity to regrade the staffing system in the finance section and impose a Finance Officer on each local authority.

Mr. P. Boyle.—I have just taken over the Environment Vote and I have not had a chance to read the report. The Department of the Public Service’s Management Services Section would normally be invited by the Department concerned to provide this service. A team of officials would carry out an examination and make recommendations. After that it would be for the commissioning Department to decide whether it should implement the report.

267. Deputy N. Andrews.—Did your Department initiate the idea of the appointment of Finance Officers and then ask the Department of the Public Service to make recommendations?

—My recollection is that this matter arose from discussions at the Manpower Committee who advise on matters concerning the staffing of local authorities. A sub-committee was appointed to look at this matter and they reported in favour of the post of Finance Officer being created to embrace not alone the county health district accounts but also the urban areas. The objective was to raise the standard of the accountancy post and of the entrant. You have asked why the operation cannot be speeded up and County Accountants replaced across the board. There are a number of problems in this regard. One is that the Finance Officer post is at county secretary salary level and people of the appropriate experience and qualifications must be chosen for the post. A County Accountant may be suitable for the post and he may not. Without wishing to reflect on any County Accountants, our experience is that the appropriate way to fill new posts is through the Local Appointments Commission where candidates are tested against the qualifications prescribed for the post.

268. Chairman.—I appreciate that point but am confused in the sense that you are still waiting for a vacancy to occur and you could in theory be waiting for ten or 15 years in the case of some local authorities?

—That is so, but the appointment of Finance Officers is not the only operation in progress to improve accounting procedures. To wait ten or 15 years for an improvement would be too long.

I said it could happen in theory but in practice it probably will not happen.

—I agree.

269. Deputy N. Andrews.—What will happen in practice?

—There will be a turnover of accountants. The creation of the Finance Officer post will throw up vacancies in the near future. The post of County Accountant has also a fair turnover because it is often the takeoff ground for the post of County Secretary.

270. Chairman.—One problem is the availability of suitable personnel and another problem is the speed at which vacancies arise to put those people into their appropriate slots in the service. It could go on for a number of years?

—It could, but a number of things are going on at the same time, including the regrading of staff in accounts branches, the monitoring exercise and the courses being laid on. Generally the new framework within which local authorities are now providing their estimates of expenditure is bringing the whole operation of accounting into sharper focus. We are not discouraged.

271. Deputy N. Andrews.—Have you difficulty in recruiting these people?

—No. The most recently approved posts have only recently been advertised by the Local Appointments Commission and the salary offered is higher than that of a County Accountant. One must assume there will be reasonably good competition, not only from County Accountants but also from appropriate grades in, for example, the health boards.

272. Chairman.—Paragraph 24 of the Report of the Comptroller and Auditor General reads:

Subhead E.1.—Housing Subsidy

I referred in paragraph 24 of my previous report to the apparent overissue of housing subsidy to some local authorities for 1973-74 and 1974. Unaudited final subsidy claims for 1975 which were received in 1976 appeared to indicate that payments on account on the basis of the 1975 estimated claims resulted in further overissues amounting to £433,221 being made in 1975 in the case of 47 local authorities. In the course of audit it was noted that when making subsidy payments for 1976 the Department deducted the full amount of any overissue in an earlier year where the final claim for such year had been audited. Where the final claim had not been audited the deduction was limited to 50 per cent. of the apparent overissue.

The Accounting Officer explained that the overriding considerations are that, in respect of the period 1 April 1973 to 31 December 1976, housing subsidy was paid on account on the basis of estimated claims furnished by local authorities, pending receipt from the authorities of final claims which are subject to audit by Local Government auditors and checking by Housing Administration Section of the Department. Subsidy payments are a long term continuing process so that overpayments on account in any year can readily be recovered and underpayments rectified following the audit and subsequent checking in Housing Administration Section. The Accounting Officer pointed out that the procedure of limiting deductions to 50 per cent. of the apparent overissue had been adopted because an examination of unaudited final claims for 1973-74, 1974 and 1975 disclosed that the provision made by local authorities for the cost of management expenses was inadequate in many cases. When subsidy payments were due to be made in December 1976 the Department was unable to determine precisely the limits on expenditure on maintenance and management in 1975 and 1976 in the case of individual authorities and it was considered that it would have been unreasonable to deduct the total excess at that stage. The Accounting Officer added that it appeared that the 50 per cent. deduction would be excessive in some cases.”

Mr. Mac Gearailt.—This paragraph deals with overissues of housing subsidy for 1975 and contains the observations of the Accounting Officer on the matter.

The Committee will recall that the matter of housing subsidy overissues for 1973-74 and 1974 was referred to in my report for 1975 and formed the subject of a rather long paragraph in the Committee’s recent Report.

The Minute of the Minister for Finance on paragraph 31 of that Report gives statistics as to the number of cases of established overissues made in the period from 1973-74 to 1976 and as to the totals of the overissues. The Minister assured the Committee that these particular sums have been recovered in full.

Overissues of subsidy are not established until the final claims from the local authorities have been audited and I understand that a considerable number of subsidy claims especially in respect of 1975 and 1976 still remained unaudited at 7 September last.

It may take some further time before this matter of housing subsidy overissue will have been brought to a satisfactory conclusion.

273. Chairman.—I understand there are 112 local authorities in the country. The number of unaudited claims in 1973-74 was 26; in 1975 there were 54 and in 1976 there were 98. These figures are exhorbitant in relation to the numbers of local authorities, especially in 1975 and 1976. The Minister has confirmed that the amounts of these overissues have been recovered in full. What is the present position?

—The present position is that auditing in respect of housing accounts shows a considerable improvement over the figures before you. At 23 November all county council housing accounts and all county borough corporation housing accounts had been audited in respect of 1973-74 and in the case of 1975 there were only five county councils unaudited and no county borough councils unaudited in respect of housing accounts. For 1976, 17 of the county councils remain to be audited and only one of the county borough councils. In urban areas there has also been a substantial improvement. There has been a push to get these housing accounts audited and certified.

274. Paragraph 25 of the Report of the Comptroller and Auditor General reads:

“Under Section 31 of the Public Bodies Order, 1946 (S.1. 273 of 1946) local authorities are required to submit annually to the Department of Local Government returns showing the amount of rent arrears in respect of houses let to local authority tenants. In the course of audit it was noted that returns submitted by some local authorities showed large sums in respect of such arrears. Dublin Corporation, which prepares its housing services accounts on an income and expenditure basis, had made provisions totalling £1 million in its accounts for 1973-74 and 1974 in respect of rent arrears. Other local authorities prepare their housing services accounts on a receipts and payments basis and therefore only bring to credit in any year the rents actually received in that year. As the failure to collect rents could result in increased deficits on the housing accounts which form the basis of the housing subsidy claims I sought information from the Accounting Officer regarding the extent to which rent arrears might have been subsidised from voted moneys since 1973-74.

In the course of his reply the Accounting Officer recalled that at 31 March 1973 there had been a rent strike by local authority tenants in several areas. This was settled in July 1973 in all areas except Cork city and tenants generally were allowed two years within which to clear off rent arrears. A rent withholding campaign persisted in Cork city until October 1976 when the dispute was settled. He stated that the Department, in consultation with the managements of a number of local authorities, had been reviewing on a general basis the position relating to the subsidisation of rent arrears, and that, on the completion of this review, a submission would be made to the Department of Finance on the points at issue. He also stated that, pending the outcome of the review, the rent arrears in the case of Dublin Corporation had not attracted Exchequer subsidy and that, in general, rents accrued in any one year would be recovered in subsequent years. As a general principle, arrears written off as irrecoverable in exceptional circumstances are subsidisable in respect of the period 1 April 1973 to 31 December 1976 and local authorities have traditionally allowed for irrecoverable small amounts of rent in their accounts.

The Accounting Officer added that, pending the auditing of the final subsidy claims for the period from 1 April 1973 to 31 December 1976 and the finalisation of the general review relating to rent arrears, it was not possible to quantify the extent to which rent arrears might have been subsidised from the Vote for Local Government since I April 1973.”

Mr. Mac Gearailt.—This paragraph refers to the problem of rent arrears in respect of houses let to local authority tenants. As the failure to collect rents could result in increased deficits on the housing accounts which form the basis of the housing subsidy claims I sought information from the Accounting Officer regarding the extent to which rent arrears might have been subsidised from voted moneys since 1973-74. His reply is summarised in the paragraph.

275. Chairman.—In the final sentence of that paragraph we have a statement to the effect that it was not possible to quantify the extent to which rent arrears might have been subsidised from the Vote for Local Government since April 1973. Have you any idea of the amount involved?

—We have. The latest information is that Cork Corporation are the only local authority where there has definitely been an established subsidisation of rent arrears. Ignoring Dublin Corporation for a moment, virtually all rent arrears have been recovered in other local authorities and a subsidy has therefore not been payable. The extent of the subsidisation of rent arrears in Cork is about £250,000, less the rates content of that figure which is roughly one-third and also less a figure in respect of purchase annuities. The Dublin Corporation position is unique in that their housing services accounts are kept on an income and expenditure basis, whereas the accounts of other local authorities are kept on a receipts and payments basis. This means that the housing accounts of Dublin Corporation show the accrued rent each year and therefore in a situation where the State is subsidising housing deficits the Corporation do not receive any subsidy, but they would be in receipt of subsidy if they were to write off the arrears as irrecoverable. That principle is at issue at present in correspondence between the Department of the Environment and the Department of Finance. That correspondence has not yet been completed.

276. Is there a conflict in the approach of the two Departments?

—“Conflict” is too strong. Our Department have made proposals regarding the treatment of arrears in the case of Dublin Corporation and other local authorities. In an interim reply the Department of Finance are questioning our approach to it and discussions are proposed between the two Departments. There is not a final break.

277. Deputy Belton.—Is it not a fact that there are rent arrears in Dublin due to the prolonged rent strike some years ago?

—That is right.

278. Is any progress being made in recouping any of those arrears? What is the position?

—The arrears have been reduced from the period of the strike which would have been 1973 but they are still substantial.

279. There does not appear to be great progress and I doubt that there is even a possibility of making much progress?

—One of the difficulties is that in an authority area where the total income from housing would be something over £6 million you are bound to have arrears. Some arrears derive from situations where tenants will just move out of the houses and are not heard of again by the local authority. They leave arrears behind them. Generally speaking, arrears of that kind have to be written off as irrecoverable. In the case of other arrears where the tenants are there, one can pursue them and, in fact, there have been evictions for arrears. It is difficult to say how much of the considerable sum still in arrears will be recovered.

280. Due to the fact that there is a differential rent system in Dublin practically all the tenants find it reasonably difficult to keep up with their current rent?


281. Therefore the possibility of being able to recover arrears are reasonably small?

—An arrangement was made for payment of arrears in instalments over a period of two years. Some progress has been made but, as I say, the arrears are still substantial.

The officials of Dublin Corporation have explored practically every possible avenue to recover these arrears but I doubt that they will meet with much success.

282. Deputy Woods.—If the tenant enters into a purchase agreement the arrears will be recovered at that stage. You would have to clear your arrears before you could purchase. There has been a very big uptake in the purchase of houses and in that way some of the arrears will be cleared. They also introduced a device to add on the arrears to the loan, if you like, for a purchase in which case it is recovered in that way?

—The officials do their best.

283. There are some areas in which you would have recovery. How realistic are the book figures in some of these cases because in my experience the officer in Dublin Corporation has to put down a figure without an assessment, without having the form completed and filled in and left in. Those figures are carried forward from one year to another without the proper assessments being done and without the proper documentation. I would expect there would be an element that would not just be irrecoverable but would not really have been due in the first instance, had the full assessments been done. The assessment depends on the tenant coming forward with the details?

—Yes. That is so.

284. I would imagine there must be a certain proportion of write-offs with full disclosure of the facts behind the case. Can you tell us what the current level of rent arrears is?

—Offhand I think in Dublin Corporation it is about £1¼ million. If I am materially out on that I will notify the Committee.

285. A figure of that order has been mentioned several times in the recent past?

—It was much higher.

I should like to support what the Accounting Officer says in that respect. The officers dealing with the case have made every possible arrangement to try to recover the moneys. They have been very helpful in facilitating people to pay once they come forward. I have been involved in assisting quite a number of people to come forward. Very often they are reluctant to come and explain their case and their difficulties. The number of evictions has been very few. I presume this would occur only where people refused to make any sort of reasonable arrangement. In this way, the officers have gone a long way towards people to clear the arrears which, unfortunately, were built up over that period.

286. Chairman.—The overriding factor is that you cannot get blood out of a turnip. The Accounting Officer mentioned having correspondence with the Department of Finance. Perhaps Mr. Mullarkey might comment on what their recommendations are from his point of view.

Mr. P. H. Mullarkey.—The correspondence has not been finalised yet but our general attitude is that, traditionally, small amounts of rents have been written off as irrecoverable. In respect of this period the Department of Finance would accept that practice. Given the type of situation we were in with the housing accounts for that period, the subsidy was open-ended in the sense that the Exchequer was left to take up the balance between rents on the one hand and management and maintenance on the other. That took a bit of psychological pressure off the local authorities which was on them to collect rents generally and in particular in the context of the rent strike. While the correspondence has yet to be finalised, and we will look at any points made, our general approach would be that rent arrears over and above traditional levels are the responsibility of the local authorities. That would be our initial reaction.

287. Chairman.—Paragraph 26 of the Report of the Comptroller and Auditor General reads:

Motor Vehicle Duties

A test examination of the revenue from motor vehicle duties, etc., was carried out with satisfactory results. The gross proceeds for the years 1976 and 1975 were:—







Motor tax and Driving



Licence fees




State owned vehicles



Fines collected by the Department of








Public Service Vehicle








Appliances and



Structures fees





Driving Test fees







£38,165,802 was paid into the Exchequer and £48,096 was refunded during the year leaving a balance of £498,805 compared with £395,343 at the end of the previous year.

The motor tax transactions of the 29 licensing authorities are subject to examination by Local Government auditors whose reports are made available to me. I referred in paragraph 27 of my previous report to the fact that these reports were somewhat in arrear and I have been furnished with the following particulars regarding the position of the audits as at 21 April 1977:—


audit of all accounts has been completed


audit of 9 accounts remains to be completed


audit of 15 accounts remains to be completed


audit of 23 accounts remains to be completed


audits have not yet commenced.

The Accounting Officer has informed me that motor taxation audits are carried out concurrently with the general local authority audits and according as each licensing authority is audited its arrears are normally overtaken.”

Mr. Mac Gearailt.—This paragraph gives particulars of the motor vehicle duties collected under the various heads. It also gives information regarding the audit of the motor tax transactions of the 29 licensing authorities which has fallen into arrears in recent years. While some progress is being made with the clearance of those arrears it would appear that the problem is still with us.

288. Chairman.—In the Finance Minute there is reference to the position as it was at the time. What is the current position with regard to the progress being made in finalising the audited accounts?

—Taking account of the note of the Comptroller and Auditor General, the up-to-date position can best be explained by comparing the figures in that note with the figures I am about to give you. Since the report was prepared, seven audits have been completed for 1973-74 leaving arrears of two audits at 31 October 1978. Thirteen audits for 1974 have been completed, leaving two in arrears at 31 October; 15 have been completed for 1975, leaving eight in arrears; and 14 for 1976, leaving 15 in arrears. I have been informed that with the work now scheduled, the estimated position at 31 December 1978 is that all arrears will have been cleared with the exception of two audits for 1975 and seven for 1976.

289. You say there are two outstanding for 1973-4—five years ago. What specific difficulties have been encountered to warrant such a situation? Is there a special reason?

—The reasons why they are so far in arrears I do not know, but I can send you a note if you wish.*

The Committee would appreciate it. Five years is a long time to have to wait for such information.

290. Deputy N. Andrews.—A thing that has always interested me is that we collect tax on State-owned vehicles and a peculiar procedure occurs that puzzles me. It is why one State Department should pay another State Department motor tax. For instance, if the Department of Justice have several cars in use they pay motor tax. It is a peculiar business, like robbing Peter to pay Paul, or putting money in a box, shaking it up and taking the money out.

Chairman.—Robbing Peter to pay Peter.

Deputy N. Andrews.—That is more appropriate. Has any consideration been given to eliminating this mysterious procedure?

—The practice originated in the context of legislation governing the Road Fund and motor taxation in general. The income from taxation has gone to the benefit of the roads. While various Finance Acts have taken away a certain appropriation of this taxation for the Exchequer, the basic principle is that vehicles using the roads should contribute, and the beneficiaries in the past have not been the State but the local authorities. In this way, vehicles using the roads contributed to the upkeep of the roads.

I am glad to have it explained.

291. Deputy Woods.—On subhead A.2— Consultancy Services—what is the reason for the under-expenditure?

—The Computer Services Board was set up and the employment of consultants was then unnecessary.

292. Has it continued in that way—do you not use outside consultants?

—Not now.

293. On subhead G—Grants in respect of Amenity Works, Derelict Sites and Dangerous Places—how has it happened that there was no expenditure?

—This is a residual provision and relates solely to dangerous places. The bulk of the money that was in that Subhead related to grants for amenity works and those grants were discontinued. The purpose of this provision for dangerous places is to enable local authorities to fence off dangerous places, such as disused quarries but there were no requests for payment in that year.

That is extraordinary, because there are many dangerous places which people say should be fenced in. It is surprising to find no expenditure.

294. Deputy N. Andrews.—In regard to Subhead M—Grant to the Road Fund— what control do the Department have over the engineering process on roads? What Departmental control is there over engineering standards?

—In brief, local authorities are required to submit to the Department proposals for major road improvement works. These are examined by the Department’s inspectors.

I am afraid the Accounting Officer has misunderstood my query. I am talking about road engineering standards, the quality of road surfaces, design and so on.

—In circulars issued, reference is often made to such items as the quality of surfaces and of the stone used. The Department has a research arm in An Foras Forbartha and research is undertaken there on road materials. There is a laboratory for that purpose. The fruits of that work are conveyed to the local authorities. The Department lays down guidelines for local authority engineering staff on design, the improvement of junctions, removal of black spots, road widths and so on. There is regular contact between the engineering staff of the Department and local authority engineers.

295. Chairman.—In regard to extra remuneration, we have asked other Accounting Officers to change the format of this heading to include all personnel in receipt of overtime payments.

—Is it a general request?

A circular incorporating the Committee’s views on this matter will be issued to all Accounting Officers.

That completes Vote 28. Thank you, Mr. Meagher.

The witness withdrew.


Mr. D. Ó Laoghaire called and examined.

296. Chairman.—A substantial section of the Finance Minute deals with Education and I propose that we deal with the Finance Minute before dealing with the Report of the Comptroller and Auditor General. The Finance Minute on paragraph 10 of the Committee’s previous Report—National Council for Educational Awards—deals with the financing of new bodies. The Minute states that the Department have a measure of responsibility in this regard. What is the present position in regard to responsibility between the two Departments?

—The Minister mentioned here is the Minister for Finance.

Yes. I am asking you for your view. Presumably there is a division of responsibility between the Departments.

—We felt that we had a full measure of responsibility and were endeavouring to exercise maximum control by not issuing money from the Vote where the Council had overspent. Generally, we accepted responsibility in that regard. However, the position has changed in that the NCEA has been designated as a body that receives its finances through the Higher Education Authority. The overall responsibility of the Department and of the Accounting Officer would then have to be read in the context of the Higher Education Act. The Higher Education Authority distributes the money to these organisations.

297. Perhaps Mr. McGrath would like to comment on his Department’s measure of responsibility as mentioned in the Minute?

Mr. C. K. McGrath.—I am not prepared for this as I was not aware that this matter would be raised. My recollection is that the primary Department would have responsibility for devising the best financing method and the Department of Finance would vet it and satisfy themselves that it was the most effective method.

—In regard to this matter, the National Council for Educational Awards is now being set up on a statutory basis and a Bill will shortly be going through the House.

298. Chairman.—In relation to Mr. McGrath’s comment, we have a Minute from the Department of Finance which is an important document to the Committee in that it gives the Department’s views on issues raised here; it is their reply to this Committee. As the officer representing the Department of Finance, I presume he can be asked questions on the matter?

Mr. C. K. McGrath.—The Agenda for the Meeting was on the 1976 Appropriation Accounts whereas the Minute is on the 1975 Accounts.

Chairman.—I appreciate that. We told your Accounting Officer that we would deal with the Finance Minute in this way and that we would deal with the appropriate Accounting Officers on other headings, which we are doing.

299. On paragraph 11—Scheme of Adaptation and Extension for a National Teacher Training College—I suppose this is now a hardy annual?

—The point at issue is securing the exclusive use of the college for the training of national teachers in consideration of the grants that have been paid. That matter is presently being dealt with by the legal people.

300. Surely the college has always been accepted as an establishment for a specific purpose and for no other purpose. Is there a legal problem?

—There is no legal problem, but in recognition of the grants that were made for the extension it was felt that there should be a legal instrument providing that the college be used exclusively for the training of teachers. This matter is being attended to by the legal people.

301. Has the work been finished?


302. According to the Minute it is not possible to give a final cost?

—It is not yet possible to give a final cost. The Committee may recall that there was an argument between the contractors and the employer in regard to one aspect of the contract.

303. I note that the proposal regarding a contribution from the College authorities towards expenditure incurred should not be pursued. That is the considered opinion of the Department for Finance?

Mr. C. K. McGrath.—Yes. That was agreed to personally by the Minister.

304. Chairman.—On paragraph 12—Local Contributions towards Capital Costs of Community Schools—it would seem that the Minister for Finance in October 1970 directed that local contributions be obtained towards the capital costs of community schools. What is the present position?

—The question of deeds of trust is still at issue between the Minister, the ecclesiastical authorities and the teachers’ organisations. The deed had been brought to a point at which it might have been signed but the Minister felt that teachers should be represented on the boards of management. That led to new negotiations which brought up new points and the Minister is still endeavouring to complete those negotiations. Consequently, without a legal basis—an actual deed of trust—it is not possible to collect local contributions.

305. Deputy Woods.—What was the local contribution to have been?

—It was to have been 5 per cent.

306. In effect, local contributions could be collected retrospectively.

—That would depend on the conditions of the actual deed of trust. It is unrealistic to expect that people will want to pay retrospectively.

307. Chairman.—On paragraph 20— National College of Art and Design—the Minute states that the Department have been asked to examine the statutory provisions relating to this matter and to consider their amendment. Have the Department considered this?

—Yes, but amendments would mean new legislation and since the accounting situation is now fairly normal we do not feel we would be warranted in going back on legislation. The tradition in the case of all these institutions set up by statute is that they are given the resposibility of producing their own accounts.

308. Is the position regarding accounting procedures satisfactory?


309. On paragraph 21—National Council for Educational Awards—have you any comment regarding the difficulty encountered in relation to the 1976 account?

—I confused the earlier reference to the NCEA with this one. The difficulty I mentioned relates to paragraph 21.

310. On paragraph 22—Institiúid Teangeolaíochta Éireann—has the matter we previously discused been satisfactorily resolved?


311. On paragraph 23—Overpayments of Teachers’ Salaries—there appears to be some conflict with the evidence previously given by you. I understand that when you cancel an order you inform the Paymaster General immediately.


312. The order ceases to be valid from the moment you cancel it?

—That does not prevent people in outlying areas from cashing them through banks and in some cases they are cleared by the Paymaster General.

313. There is a time factor involved. When you cancel an order does it take some time for this information to reach the Paymaster General?

—I do not think so. An order may be cancelled but after a considerable lapse of time it may be presented and cleared through a bank and sent to the Paymaster General’s Office where it is paid on sight.

314. Is there any way of overcoming this problem?

—In many cases the difficulty is in the Paymaster General’s Office.

315. Perhaps Mr. McGrath would comment?

Mr. C. K. McGrath.—I would have to get the views of the Paymaster General’s Office, which I would be happy to report to the Committee.

316. Chairman.—There appears to be some difficulty regarding the spontaneous reaction in the Paymaster General’s Office. There is reference to allowing the order to be valid for a period of three months or six months after cancellation?

—That is a period used by the Paymaster General for payment.

317. The Paymaster General allows a period of three months on a cancelled order which is invalid. There is a grey area which is difficult to clarify. I cannot see the difficulty in solving it but possibly the procedure which has been adopted is causing some obstacles?

—The difficulty may well be in the Paymaster General’s Office when the order comes along after a lapse of time associating it back with a list of cancelled orders.

318. Deputy N. Andrews.—Would you not send the cancelled order number?

—It may be several months before the order actually comes to the Paymaster General’s Office, presented to a bank somewhere around the country.

319. That is the bank’s loss. Would you not notify the bank? This would not happen in a bank. Very few of them would get through. Why not have the same pattern in your case?

—It is not my case. It is the Paymaster General’s case. He has represented to us that he gets into difficulties with the banks if he does not honour them.

The banks are well able to look after themselves. We should begin to look after ourselves a little more carefully.

320. Chairman.—Perhaps Mr. McGrath would take this matter up with the Paymaster General’s Office?

Mr. C. K. McGrath.—I will.*

—We have been in touch with the Paymaster General’s Office on a number of occasions about this. We understand they have difficulties too.

321. Chairman.—Has the position improved?

—Not really.

Deputy N. Andrews.—Maybe next year it will.

Chairman.—It is mysterious because it is cancelled at the time the duplicate is issued. Yet another officer provides a period in which this payment is valid despite the fact that it has been invalidated through cancellation prior to that time. There is something wrong. I cannot put my finger on it.

322. On paragraph 24—Primary Education—what is the current position about the strong room?

—We have not got possession of these premises yet. Plans for a strong room are still going ahead. Apparently it will also be necessary to do some strengthening work on the fabric of the building to house the strong room. The arrangements are going ahead.

323. You are happy with the progress being made?


324. Have you any comment on paragraph 25—Secondary Education?

—The computerisation is complete and the controls are all built in. We hope this precise difficulty will not arise again.

325. Paragraph 26—Secondary Education —concerns payment during maternity leave. It states that individual cases of such teachers who were paid full salary while on maternity leave in the period from 1 January 1975 to 31 July 1976 are still being pursued. What is outstanding at the moment? What is the present position?

—I have not got the exact figure of what is outstanding at the moment. I will send it to you. We have taken all the precautions we can and we are endeavouring to get back the money overpaid.

Perhaps you would send us a note on it?

—I will.*

326. Paragraph 27 deals with Vocational Education and I appreciate this is a matter for local authorities rather than for you. I am sure you are pursuing this matter?



Mr. D. Ó Laoghaire further examined.

327. Chairman.—Paragraph 27 of the Report of the Comptroller and Auditor General reads:

Subhead C.5.—Higher Education Grants

The Local Authorities (Higher Education Grants) Act, 1968 authorises the making of grants by a local authority to eligible persons ordinarily resident in its functional area to enable them to attend university colleges or other approved institutions of higher education. Section 4 of the Act provides for refund from voted moneys to local authorities of the annual cost of such grants over and above the total amount provided by them in the year 1967-68 by way of assistance and scholarships under the Irish Universities Act, 1908 and the Local Authorities (Education Scholarships) Acts, 1944 and 1961. The annual schemes approved by the Minister for Education for all local authorities provide for payment of grants at two rates viz. a higher rate of grant for students whose normal family residence is not in or adjacent to a university town and a lower rate for students whose residence is in or adjacent to such a town. In February 1970 all local authorities were informed that, for the purpose of the grant schemes, the question of where a student’s residence was located should be decided in the light of its distance from the university town and in the light of the local public transport service available and that the lower rate of grant should be applied to every student who could reasonably be expected to travel daily between his home and the university college or other institution of higher education attended by him.

It was noted in the course of audit that in January 1976 it had come to light in the Department of Education that since the commencement of the scheme one local authority had been paying grants at the higher rate to all eligible students irrespective of whether their place of residence was in or adjacent to a university town and I sought the observations of the Accounting Officer. He informed me that the Attorney General had been consulted in regard to the recovery of the amounts overpaid from the Vote and had advised that recovery could be claimed only in respect of overpayments made subsequent to the issue of the Department’s instruction of February 1970. The Accounting Officer also stated that the Department of Finance had agreed that steps should be taken to recover from the local authority concerned an amount representing the excess grants paid since 1970 to students who should have been paid only at the lower rate.

I further asked the Accounting Officer for information regarding the steps taken by his Department to ensure that similar overpayments had not been made by other local authorities and recouped from the Vote. He informed me that the Department had no reason to assume that any other local authority had made similar overpayments but that when the case in question had been resolved a further instruction would be issued to all local authorities in the matter.”

Mr. Mac Gearailt.—This paragraph deals with statutory refunds to local authorities in respect of their expenditure under approved Higher Education Grant Schemes. Such schemes provide for payments on a two tier basis, a higher rate of grant being payable for students normally resident outside or non-adjacent to a university town.

As indicated in the paragraph one local authority was found to have been paying, since the introduction of the scheme in 1968, the higher grant to all eligible applicants whether they are living adjacent to a university town or not. The Attorney General advised that the Minister for Education was entitled to recoupment from the local authority in respect of excess payments made since 1970 to students living adjacent to a university town and the Department of Finance agreed that steps should be taken to seek such recoupment.

This was the position at the date of my report, July 1977. Subsequently, however, the council concerned made representations to the Minister for Education and the Accounting Officer informed me in June last that, in the light of these representations, the Minister considered it appropriate to deem the awards made by this council up to 1976 to be in accordance with the provisions of the grants’ scheme and to decide that excess payments had not been made by the council.

As the Department of Finance had not been informed of this decision of the Minister for Education I asked that it be so informed. I understand that this has now been done.

I also understand that moneys withheld from the Council in respect of expenditure on grants in 1975 and 1976 have been paid in full.

328. Chairman.—We all know this is a very sensitive area. The final solution to the problem is that the Minister considered it appropriate to deem the awards made by this council up to 1976 to be in accordance with the terms of the grants’ scheme. You have taken advice from the Attorney General’s Office which would seem to indicate that these moneys are recoverable. It would now seem we are flying in the face of legal advice on this matter. What is the present position? The Minister has decided this, a decision which is in conflict with the advice given to you by the Attorney General. Is that not the position?

—Not really. The main concern in this is to get the county council concerned to accept that they should operate on the basis of adjacent and non-adjacent. They agreed to do this from 1977. It was on that basis the Minister made his decision. In other words, the position has been regularised from 1977 onwards. The council also said they were satisfied none of the students concerned was in an adjacent category in their view. This is something Departments and Ministers really have to leave to the local authorities because the detailed position of transport and so on in an area can be answered for only by the local authority.

329. Take the position of Dublin city. If they had applied the same kind of criteria in 1970 and decided that the higher rate would be paid across the board in respect of students in Belfield—I do not know the moneys involved in the case of Cork—we would have been faced with an enormous problem. It would seem that the local authority in this case did not apply the terms of the directions and the regulations which were very specific; there was not anything ambiguous about them. Yet they seemed to be able to get away with it, despite the fact that the Attorney General advised that the Minister for Education was entitled to recoupment. We appreciate that it may be unfair to you to ask you to deal with these matters, but I would nearly go so far as to say that it was irregular in this case to have allowed overpayments which were not recovered. Galway and Dublin could have done the same thing and, it seems, got away with it if they had “copped on” at the time. They might have got away with it. They might have said Cork had set out to evade the regulations and that they had got away with it, which is contrary to very specific, unambiguous regulations laid down in 1970.

—This is true. The regulation has been repeated in 1978. It has been made clear to all councils in the 1978 circular that the regulation must be complied with. In the case of Cork it is being complied with. All I can say in regard to it is that what was done was done with a proper exercise of ministerial authority. I do not know if one could call it irregular.

330. It may have been an extreme use of the word in the generally accepted sense, but when we see it in conflict with the Attorney General’s advice it raises some concern and, as Chairman of the Committee, I must say it is not satisfactory from the Committee’s point of view.

—Sometimes when we get legal advice that certain things should be done it is not alway practicable to follow out that advice if the other party is advised to resist. One could find oneself involved in a protracted bout of litigation and our advice was fairly tentative.

331. If litigation in respect of Cork found on the side of the local authority we presume you would become involved with Galway and Dublin for retrospective payments to them which they should have got from the beginning?

Mr. Mac Gearailt.—I should like to indicate my problem. A scheme was submitted by the county council, it was approved by the Minister, and strict instructions were given. It appears to me that when the Department went to the Attorney General there was prima facie evidence that there had been excess payments. If the Minister wanted to exercise authority, what he might have done was to decide to write off the excess payment and put a note in the Appropriation Account. I doubt if the Minister, any Minister, could off his own bat decide that there was not an excess payment under a scheme which he had approved himself, certainly not without the sanction of the Minister for Finance.

Chairman.—From the comments of the Comptroller and Auditor General it would seem the issue is very important because it has created a precedent. I do not know if this can be repeated. As the Comptroller and Auditor General has said, any Minister could come along and say that an overpayment had not been made. It is a rather sweeping statement in the light of what had gone on before. Certain regulations had been laid down and sanctioned and had been accepted by both parties, and then one party backed out. The lack of sanction by the Minister for Finance, from our point of view, is the most serious aspect of this. At least, any evidence of that sanction having been sought is not with us.

332. On subhead B.6—Language Research—does this refer to methods of teaching?

—It is largely for Buntús Gaeilge.

333. On subhead D.5—Training Courses —Audio Visual Aids—there is a large discrepancy between the amount granted and actual expenditure.

—Yes. A number of scheduled courses at the Communications Centre in Booterstown could not be held because of some internal difficulties there.

334. Deputy N. Andrews.—On subhead G.17—Institiúid Teangeolaíochta Éireann— the amount expended was much less than granted.

—That resulted from the correction of balances they were holding. They found they could manage in 1976 with a grant of £70,000 rather than the estimated £140,000 because they had some money in hand.

335. Chairman.—On Extra Remuneration, we have been asking Accounting Officers to change slightly the format of the information given under this heading to include all personnel in receipt of overtime. The present format includes only those with overtime earnings of £200 or over. I understand a circular will be issuing to all Accounting Officers setting out guidelines.


Mr. D. Ó Laoghaire further examined.

336. Chairman.—Paragraph 28 of the Report of the Comptroller and Auditor General reads:

Subhead A.2.—Loans and Grants to Training College Students

Subhead F.—Appropriations in Aid

Rule 154 (2) of the Rules for National Schools provides that if a training college student satisfies the Minister for Education that he is not in a position to pay the annual fee, the Minister may advance such fee in whole or in part to the training college on his behalf, the advance to be recovered by instalments from his salary as a teacher when he obtains an appointment in a national school. Subhead A.2. includes a provision for the making of fee advances and the amounts recovered are brought to account as appropriations in aid (Subhead F).

In the course of audit it was noted that the fee advances were not being recovered in full in a number of cases and I recently sought the observations of the Accounting Officer. He has informed me that every effort is being made to complete inquiries as soon as possible into the precise position in the cases mentioned in my query.”

Mr. Mac Gearailt.—This paragraph deals with the non-recovery of loans advanced to training college students to enable them to meet their college fees. Our query related to 23 cases which came to light as a result of our limited test check. In his final reply to my inquiry the Accounting Officer outlined the approved procedures for the recovery of these loans and stated that the irregularities in the cases listed by me appeared to have occurred because of pressure of work at peak periods and to staff inexperience. He added that this aspect of the matter was being further inquired into by the personnel section of the Department.

His reply gave particulars of the steps being taken to effect full recovery in the cases raised by me.

337. Chairman.—This was discovered through a test check. Have other cases come to light, to your knowledge, and if so what is the present position?

—I do not think there are cases other than those listed. Our problem in this area, first of all, is that it is related to the mechanisation, the computerisation, of payments. Though simple, the procedure is extremely tedious. The computer has to be fed in detail and the staff dealing with it are under pressure at various times to get payments out in time and so on. Unfortunately, there is also a fairly substantial turnover of staff in this area—people move on—and the personnel section, in consultation with the section dealing with it, and in consultation with the Department of the Public Service, is looking into the situation in detail to see what can be done about it. In the change over to mechanised arrangements it was anticipated there would be some staff saving, but the fact that there was some such saving in the process has in itself produced a certain amount of difficulty. Our feeling is that perhaps we have gone a little too far with staff saving in this area, and that the tediousness of the work is such that we will have to step up our own internal auditing procedures as well as the audits made by the Comptroller and Auditor General. At the moment we are trying to sort that out internally and with the Department of the Public Service.

There are 23 cases, and no more have come to light?


338. On subhead A.1.—Training Colleges —there is a discrepancy of 20 per cent to 25 per cent between the grant and expenditure. Was it that places were not taken up in the training colleges? There is a saving of £719,000.

—That is a reflection of a change in the method of financing rather than anything else. Some savings arose because there was a change in the method of financing and because of matters connected with the staffing of the colleges as well. Some of the saving on the capital side was related to the suspension of work on Carysfort Training College.

339. On subhead A.3.—Special Courses for Teachers—are these in-service courses?


340. Deputy N. Andrews.—On subhead C.6.—Aid towards the cost of School Books—there is an under-expenditure. Does this subhead include the free school books’ scheme?

—No. The saving here is due to the fact that it had been intended to increase the grant payable in 1976 but, in the course of the year, it was decided that could not be done owing to budgetary restrictions.

341. Chairman.—On subhead C.8.—Special Educational Project—is that the special school?

—That is the Rutland project, the Van Leer foundation.


Mr. D. Ó Laoghaire further examined.

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

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

The running costs of comprehensive and community schools (excluding wholetime teachers’ salaries, travel and subsistence and compensation payments) are paid by the schools out of imprest advances made from this subhead. The amount provided in the subhead comprises annual budgetary allocations for the schools, compiled from estimates submitted by the Boards of Management. Monthly receipts and payments accounts with supporting vouchers are furnished by each school to the Department.

Local audits of the accounts of seven schools were carried out by my officers in the year under review and it was noted in the case of two schools that budgetary allocations were being exceeded as evidenced by:—

(a) charges having been incurred in repect of interest on bank overdrafts and

(b) invoices in respect of matured liabilities to the extent of £7,000, approximately, having been on hands and unpaid at 31 December 1975.

Moreover, it was noted that payments totalling £24,112 were made from the Vote to a number of schools in August 1976 to meet excesses incurred by them over their budgetary allocations for 1975. Because of the probability of increased charge falling on Exchequer funds as a result of the incurring of excess expenditure by these schools I sought information from the Accounting Officer on the controls exercised by the Department to ensure that the budgetary allocations are adhered to. In the course of his reply he informed me that these schools are advised, when being allocated their budgets, that the allocations should not be exceeded without the prior approval of the Department. The expenditure of individual schools is reviewed quarterly and any school whose expenditure is running ahead of its allocation is advised to keep its expenditure under continuous review throughout the year, not to enter into any commitments involving an excess without Departmental approval and, if an excess is envisaged, to notify the Department accordingly, outlining the corrective action proposed. He added that schools have also been asked to submit monthly a list of invoices awaiting payment so that the Department will be aware whether they have sufficient funds to meet their commitments.”

Mr. Mac Gearailt.—As the running costs of comprehensive and community schools are met out of voted moneys it is important that strict control should be exercised over them. In the course of local audits we came across evidence that some schools were exceeding their budgets and we accordingly sought information as to the controls exercised by the Department in the matter.

The information furnished by the Accounting Officer is contained in the paragraph. The control procedures adopted appear to be adequate provided they are fully complied with.

343. Chairman.—Is the Accounting Officer satisfied that matters have improved in regard to expenditure and the keeping of accounts?

—We have introduced controls and are doing our best to see that they are complied with.

In other words, there is an improvement.

—There is.

344. Paragraph 30 of the Report of the Comptroller and Auditor General reads:

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

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

In the course of the local audits at comprehensive and community schools it was noted in three of the schools that adequate stock records were not being maintained and that regular stocktaking was not being carried out. I sought the observations of the Accounting Officer and he has informed me that the three schools concerned have been advised of the necessity for keeping and maintaining stock records of equipment, school furniture and fittings, whether supplied by the Department or purchased by the schools, and that they have also been reminded that stocktaking must be carried out annually.

It was also noted that at two of these schools equipment was obtained under leasing agreements entered into by the school authorities and that the monthly instalments paid on foot of these agreements were charged to the schools’ imprest accounts as running costs. It was further noted that the cost of equipment purchased directly by the schools through the monthly imprest accounts was charged to Subhead H.1. as running costs whereas the cost of equipment supplied by the Department is charged to Subhead H.2. as capital costs. In regard to the leasing agreements the Accounting Officer informed me that the equipment was acquired and the agreements entered into without seeking the approval of the Department. He stated that the Boards of Management of all comprehensive and community schools have since been told that the Department does not generally allow the leasing of equipment and that the Boards must have prior approval of the Department before entering into such agreements. He also stated that the cost of equipment supplied to newly-established schools is charged to Subhead H.2. and that, subject to certain limitations, the cost of items purchased by the schools and of replacements for items originally supplied by the Department is borne on Subhead H.1. He added that arrangements have now been made to charge any future purchases, which are clearly of a capital nature, to Subhead H.2.”

Mr. Mac Gearailt.—Comprehensive and community schools carry sizeable stocks of equipment, some of which is rather costly. Our local audits revealed that the stock records being kept by some of the schools were inadequate. It was also noted that some schools had acquired equipment under leasing agreements, the instalments being charged against running costs. Also charged against running costs was expenditure on equipment bought out of the school imprests. It is essential that adequate stock records of equipment be kept by all schools for control purposes and also that all expenditure of a capital nature be charged against the specific provision made for it by Dáil Éireann—in Subhead H.2. The observations of the Accounting Officer on the matters raised in my query are contained in the paragraph.

345. Chairman.—There is a limit beyond which purchases do not go and schools have obviously got around this by leasing equipment. What maximum guidelines apply to expenditure on leasing or have you solved the problem of leasing?

—We have issued instructions that leasing should not take place except with prior sanction, as it is a way of getting around the capital provision. We would only approve leasing if it was within the capital provision and was a better proposition than an outright purchase.

346. Has a universal format been issued in regard to keeping records of this kind of equipment?

—It has.

347. So all schools keep the same kind of records?

—All community and comprehensive schools.

348. Paragraph 31 of the Report of the Comptroller and Auditor General reads:

“In the course of the local audits referred to in the previous paragraphs it was noted that equipment supplied to two schools in 1973-74 for the teaching of junior cycle metalwork had not been used and that some items remained unpacked at the dates of the local audits in May and October 1976. I sought the observations of the Accounting Officer. In his reply he stated that these packages of equipment were supplied to the schools as part of an overall programme of supply to 19 such schools. The only reason why metalwork was not taught at the two schools referred to was the non-availability of metalwork teachers because the supply of such teachers had not kept pace with demand in recent years. He also stated that this position obtained at one other community school which had opened in September 1976. The Accounting Officer added that the total cost of the metalwork equipment supplied to the three schools was £24,848.”

Mr. Mac Gearailt.—Metalwork equipment supplied to two schools in 1973-1974 remained unused at the dates of my local audits in 1976. The explanations given by the Accounting Officer are summarised in the paragraph.

349. Chairman.—Has the Accounting Officer any comment to make on that matter?

—Three schools were innvolved in this matter. They now have metalwork teachers and the equipment is being used.

350. Paragraph 32 of the Report of the Comptroller and Auditor General reads:

“The charge to this subhead includes the cost of television sets supplied to comprehenive and community schools for use in connection with the Educational Television Service, the cost of which is borne on Subhead D.4. of Vote 29.—Office of the Minister for Education. In the course of the local audits referred to in the previous paragraphs, which were carried out during school terms, it was noted that at two schools television sets supplied were not being utilised and that some of them had not, in fact, been unpacked. In reply to my inquiry, the Accounting Officer informed me that 99 television sets had been supplied to comprehensive and community schools at a total cost of £9,187 but that, from the information normally available to the Department, it was not possible to state the number of sets being utilised and it was proposed to seek this information from the schools.”

Mr. Mac Gearailt.—Paragraph 32 also deals with the non-utilisation of equipment —in this case, television sets—supplied to schools. As stated in the paragraph, the Accounting Officer informed me that 99 such sets had been supplied. Subsequent to the date of my report, he notified me that 43 sets were not utilised for the following reasons: difficulty in time-tabling the programmes; unsuitability of times of programme showing; non-availability of piped service and poor reception. In addition, some of the sets were too old. The Accounting Officer added that the Department had decided to transfer sets not being utilised to schools under construction whose authorities will guarantee to use them and that television sets will not be provided in future unless the schools satisfy the Department that they will be utilised.

351. Chairman.—Has the Accounting Officer any comments to make? Is the present position one of maximum utilisation of these sets?

—Yes, in so far as we can secure it.

352. How do you check the usage of this kind of television set?

—The inspectors inquire about audiovisual equipment.


Mr. D. Ó Laoghaire further examined.

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

Subhead G.—Payments in respect of Superannuation Charges

Section 25 (3) of the Vocational Education Act, 1930 authorises the Minister for Education to refund to local authorities one half of the payments made by them in respect of superannuation allowances and gratuities granted to former officers of Vocational Education Committees. In the course of audit it was noted that claims made by the five local authorities in November 1975 for refunds of superannuation charges totalling £23,017 were not met until March 1976. As the claims represented fully matured liabilities in 1975 I asked the Accounting Officer for his observations regarding the deferment of payment to 1976. He informed me that deferment of payment in these cases appears to have been due to an oversight under pressure of work and that, although the usual arrangements had been to make these payments within the year of maturity, there had not been a specified procedure to this effect. He added that instructions have now been issued which should obviate such an occurrence in the future.”

Mr. Mac Gearailt.—It is a fundamental principle of Government accounting that all matured liabilities be met promptly, certainly before the end of the year in which they mature. This paragraph draws attention to a breach of this principle which the Accounting Officer says was due to an oversight under pressure of work. I should state that this was an isolated case that came to our notice.

354. Chairman.—Has this been rectified?

—It has. We have issued instructions that it should not happen again.


Mr. D. Ó Laoghaire further examined.

355. Chairman.—Paragraph 34 of the Report of the Comptroller and Auditor General reads:

Subhead B.—Special Schools

The charge to this subhead comprises payments in respect of the remuneration of staff (other than teachers paid from the Vote for Primary Education) and the maintenance of pupils in special schools. In the course of a local audit at a special school in February 1977 it was noted that, in the period from January 1972, when the school opened, to 31 December 1976, sums totalling £16,976 were made available for the purchase of social insurance stamps of staff paid through the school imprest account. It was also noted that a stock of stamps to the value of £3,267 was on hands and that school employees’ social insurance cards for 1975-1976, also on hands, were mainly unstamped at the date of the local audit. As there appeared to be a discrepancy between the amounts made available for the purchase of stamps and the value of stamps accounted for, assuming full stamping of the employees’ cards for earlier years, I asked the Accounting Officer to have a reconciliation carried out. He has informed me that the matter has been investigated and that records in the school and in the Department of Social Welfare have been scrutinised in detail by officers of the Department of Education. The investigation showed a minor dicrepancy of £27, assuming that an estimated sum of £620 had been expended on the purchase of stamps in cases where the insurance numbers were not available or where the cards were outstanding. The amount unaccounted for may have been due to any one or more of a number of factors which could not now be resolved. He stated that the Department’s inquiries had afforded no basis for suspecting dishonesty, but that there had been laxity in attending to the matter of regular stamping of cards. The School Director’s attention was being drawn to the need for adhering strictly to correct practice in the stamping of cards and the question of installing a stamping machine was being investigated.

The Accounting Officer also informed me that annual checks of school accounts had been carried out on site by officers of his Department since 1973. These checks included inspection of accounts and records, checks on staff lists and staff pay, selective check of vouchers and receipts and a check on cash and cash-handling procedures. He added that arrangements were being made to have the staff engaged in this duty given a more detailed briefing for the future.”

Mr. Mac Gearailt.—As stated in the paragraph, in the course of a local audit at a special school my officers noted an apparent discrepancy between the sums made available for the purchase of social insurance stamps and the value of stamps accounted for. At my request the Accounting Officer had a reconciliation carried out and this resulted in a minor discrepancy of £27. The Accounting Officer reported that the Department’s inquiries had afforded no basis for suspecting dishonesty but there had been laxity in the stamping of cards. The school director had been informed and had agreed to adhere strictly to correct practice in the stamping of cards in future.

356. Chairman.—It is stated that annual checks are carried out on site by officers of the Department since 1973. There seems to be something wrong in this case. One would imagine that annual checks would uncover discrepancies of this nature.

—Yes, one would, but apparently they had not been alerted to the position in regard to stamps.

357. In other words, the scrutiny of contributions was not part of their terms of reference?

—They apparently had not looked at them, but have since been briefed on this matter.

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

“In the course of a local audit at another special school it was observed that receipts for the period from October 1974 to September 1976, totalling £7,365 and arising mainly from usage of the land attached to the school and from the sale of farm equipment, were not credited to the school imprest account but were, instead, credited to a separate school bank account and used to make payments not charged to the imprest account. Supporting documentation was not available to enable my officers to satisfy themselves regarding the correctness of these receipts and payments. I asked the Accounting Officer for information regarding the failure of the school authorities to bring these receipts to credit in the school imprest account and regarding the control exercised by his Department over moneys received and expenses incurred in connection with the usage of these lands. He informed me that it had been the Department’s intention that the development of land usage would be examined when the initial phase of getting the school fully operational had been completed. In the absence of formal instructions in the matter of land usage the Director of the school drew up a programme and obtained oral sanction from the Department to let some of the land on conacre. The Accounting Officer stated that it was assumed that the conacre rental would be entered in the school imprest account. The Director, however, had instead instituted a farm account.

The Accounting Officer also stated that the matter has now been regularised by the inclusion of farm or land usage accounts in the ordinary school accounts which are submitted monthly to the Department and on the basis of which the voted moneys are paid out. The various items in these accounts relating to the working of the farm will be subject to check by officers of the Department.

The Accounting Officer added that the Department was satisfied that all land usage receipts and payments had been accounted for.”

Mr. Mac Gearailt.—Imprest accounts giving details of receipts and payments are submitted monthly to the Department by the authorities of special schools funded from this Vote. This paragraph draws attention to the failure of one such school to bring to account in its imprest accounts sums totalling £7,365 arising over a number of years mainly from the use of land attached to the school. The circumstances in which this happened, as explained by the Accounting Officer, are summarised in the paragraph. The matter has now been regularised.


Mr. D. Ó Laoghaire further examined.

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

Subhead F.1.—Grant-in-Aid Fund for Capital Building Costs and Planning Expenses of third level institutions not funded by An tÚdarás um Ard-Oideachas.

As shown in the account £121,025 was issued from this subhead to the Grant-in-Aid Fund. The account of the Fund is appended to the Appropriation Account and expenditure was incurred as follows:—



National Institute of Higher


Education, Limerick



Dublin Dental Hospital



Cork Hospitals Board





Mr. Mac Gearailt.—Paragraph 36 is for information only.

360. Chairman.—Paragraph 37 of the Report of the Comptroller and Auditor General reads:

“At 31 December 1976 £1,039,010 had been expended on the construction of premises for the National College of Physical Education for which a contract in the sum of £672,500 had been entered into in 1972. I asked the Accounting Officer for information as to the extent to which the excess expenditure over the contract price was due to the cost of extras not included in the original contract or to variations from the original plans and specifications. He informed me that the final account has not been completed but that the expenditure of £1,039,010 includes £22,400 being the cost of extras due to extremely difficult site conditions and £119,210 for variations, contingencies not provided for in the contract and extras. The balance, £224,900, of the excess over the original contract figure comprises adjustments under the price variation clause and adjustments of prime cost sums.

It was noted from the relevant departmental files that the external wall finish of the new building was defective and that there was an error in the dimensions of the squash courts erected under the contract and I inquired regarding the pursuit of claims which the Department might have in respect of these defects.

The Accounting Officer informed me that, with a view to establishing where responsibility lies for the defective external wall finish, the Department had obtained technical reports in the matter. He also stated that legal advice had been sought as to the steps open to the Department to ensure that remedial work— estimated to cost £70,000—is carried out without expense to the Department. As soon as this advice is available the further action to be taken will be considered.

The Accounting Officer stated that the effect of the error or some inches in the dimensions of the squash courts is that they are not recognised for national or international competitions. They continue, however, to be used for their basic purpose of providing facilities for the teacher-students in the College. The error was apparently detected by the consultants but because the new College was urgently required remedial action was not taken in the matter. The Accounting Officer added that when the major issue of the external wall finish is being brought to a conclusion, the question of pursuing a claim in relation to the squash courts will also be considered.”

Mr. Mac Gearailt.—Expenditure on the construction of premises for the National College of Physical Education had at the date of my report exceeded by more than 50 per cent the contract price. This paragraph lists the main heads which the Accounting Officer states, accounted for the excess expenditure. The paragraph also draws attention to the existence of defects in the external wall finish of the new building and to errors in the dimensions of the college squash courts. It notes the intentions of the Department, as indicated by the Accounting Officer, in regard to the remedial work required on the external wall and the pursuit of a claim in relation to the squash courts.

361. Chairman.—What is the present position in regard to the external wall, seeing that everything depends on its completion?

—The legal situation has to be borne in mind. All letters between the building unit and the contractors have to be cleared by the Chief State Solicitor’s Office. The contractors are also acting through their solicitors. Our advice is that these defects must be put right at the expense of the contractors and we are pursuing that. Our consultants are working on a detailed indication of what exactly must be put right and as soon as we get that we will send it to the contractors through the Chief State Solicitor.

362. Deputy N. Andrews.—There seems to be some very serious discrepancies. Is it correct that legal proceedings are pending?

—We hope it will not come to legal proceedings.

The consultant obviously erred regarding the difficulty of the site and that cost £22,400. There is a figure of £119,000 for variations and a further £224,900 in excess of the original estimate because of price variations and adjustments. In view of possible legal proceedings we had better not say too much.

363. Chairman.—There are variations and price variations. I presume that “variations” concern the physical structure. Were these variations requested by the contractors or by the building unit?

—Some variations were requested by the contractors and some by the building unit. Variations in contracts are a normal feature but this contract seems to have been particularly unfortunate.

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

Subhead F.2.—Grant-in-Aid Fund for Capital Equipment Costs of third level institutions not funded by An tÚdarás um Ard-Oideachas.

As shown in the account, £1,045,986 was issued from this subhead to the Grant-in-Aid Fund. The account of the Fund is appended to the Appropriation Account and expenditure was incurred as follows:—



National Institute of Higher


Education, Limerick



National College of Physical


Education, Limerick





Mr. Mac Gearailt.—This paragraph is for information. I have no comment to make on it.

Chairman.—That completes the education group. I should like to thank Mr. Ó Laoghaire. Go raibh mile maith agat.

The witness withdrew.

The Committee adjourned.

*See Appendix 10.

*See Appendix 11.

*See Appendix 12.