Committee Reports::Interim and Final Report - Appropriation Accounts 1977::27 June, 1979::MIONTUAIRISC NA FINNEACHTA / Minutes of Evidence


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MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Dé Céadaoin, 27 Meitheamh, 1979

Wednesday, 27th June, 1979

The Committee met at 11 a.m.

Members Present:
Deputy	N. Andrews,	Deputy	C. Murphy,
„	Kenneally,	„	Woods.
„	Morley,

DEPUTY O’TOOLE in the chair.

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

MINUTE OF THE MINISTER FOR FINANCE ON THE COMMITTEE’S REPORT (Paragraphs 35, 38, 50 and 52) ON THE APPROPRIATION ACCOUNTS, 1976*

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

419. Chairman.—The Minister’s Minute on paragraph 35—Higher Education Grants— states:

The Minister has been informed by the Department of Education that the position of the Accounting Officer in this matter, as indicated in his evidence to the Committee, is that the decision by the Minister for Education on the action of the local authority concerned was taken in the exercise of his Ministerial authority.…

On the face of it this would seem to be taking accountability from the Accounting Officer concerned. Is this a departure from the norm which has applied up to now?

—We had to look for more information here.

I appreciate that.

—There could be a very delicate matter of principle involved. When we get a report from the Accounting Officer we will be able to see if a matter of principle is involved here at all. I should imagine that if it does prove to be an issue of principle we will be coming back to the Committee on this.

420. The Committee is informed that the Department of Education was asked to furnish a list of the names and addresses of grantees approved by the local authority concerned in a typical year between 1970 and 1976. This line of approach might not necessarily elicit adequate information about the situation here. A typical year could be the most convenient year, possibly, but I am not saying that it is. Would it be possible to get the names and addresses of grantees for the whole period? Would it be beyond the capacity of the local authority to provide that infomation?

—I would not preclude the possibility. We have just got this information as we say in the Minute and we are looking at it. My staff will be alive to the possibility to which you have adverted.

421. So you are not suggesting that it might happen?

—Yes, but it is something that we have in our minds. The people in the Department of Finance who deal with these things are very “long in the tooth”.

422. This is a delicate area and it has become possibly more delicate than anticipated initially, and all the information that can be got would be appreciated.

—The Committee can rely on the Department of Finance to seek all necessary information here.

423. Mr. N. Andrews.—The Minister’s Minute on paragraph 38—Higher Education —refers to the National College of Physical Education. Are there any further developments on that?

—First of all, I would gladly give any information I have but I do not have a lot of information to offer because this is primarily a matter for the Accounting Officer of the Vote itself. I do not have any further information to hand at present except to add that when we have the information we will supply it to the Committee.

424. Chairman.—On paragraph 50—Overtime—we were talking about this some time ago. Has this matter been looked into to your satisfaction?

—The Department of Finance share the concern of the Committee that recourse to overtime should not preclude the possibility of providing more durable additional employment. We have been into this question with the Department of the Public Service and I know they share our concern. They would be very much alive to the need to translate overtime into jobs where possible.

425. There is a comprehensive section in the Minute on paragraph 52—Possible Overlapping of some Activities between Departments and other State Agencies—which deals with the possibility of the overlapping of promotional work abroad and you are to be complimented on it.

—Thank you. The Accounting Officer for the Foreign Affairs Vote was also concerned to reassure the Committee about this.

GENERAL REPORT

Mr. T. F. Ó Cofaigh further examined.

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

“Outturn of the Year

The audited accounts are summarised on page xxvii. The amount to be surrendered as shown in the summary is £30,306,025, arrived at as follows:—

						Estimated	Actual
Gross Expenditure					£	£	£
Original estimates	..	..	..	..	1,831,251,213
Supplementary and Additional estimates					124,324,700
						1,955,575,913	1,923,253,973
Less expenditure in excess of Vote 46				..			22,589
							1,923,231,384
Deduct—
Appropriations in Aid
Original estimates		..	..	..	153,776,213
Supplementary do.		..	..	..	1,743,440
						155,519,653	153,481,303
Less surplus appropriations in aid to be applied, subject to approval by Dáil Éireann, towards meeting the excess
expenditure on Vote 46		..	..	..			154
							153,481,149
Net Expenditure	..	..	..	..		£1,800,056,260	£1,769,750,235
Amount to be surrendered		..	..	..		£30,306,025

This represents 1·7 per cent of the supply grants, as compared with 2·8 per cent in the previous year.”

Mr. Mac Gearailt.—This paragraph gives the usual information regarding the overall outturn of the Appropriation Accounts for the year under review.

427. Chairman.—Paragraphs 2 to 6 of the Report of the Comptroller and Auditor General read:

“Excess Vote

Expenditure amounting to £22,589 over and above the gross provision made by Dáil Éireann has been incurred on Vote 46—Army Pensions, and will require an excess vote. There were surplus receipts of £154 under appropriations in aid (See also paragraph 39 of this report).

Exchequer Extra Receipts

Extra receipts payable to the Exchequer, as recorded in the Appropriation Accounts, amounted to £13,928,771.

Surrender of Balances on 1976 Votes

The balances due to be surrendered out of votes for the public services for the year ended 31 December 1976 amounted to £44,073,700. I hereby certify that these balances have been duly surrendered.

Stock and Store Accounts

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

Statement of Receipts into the Central fund for the Year ended 31 December, 1977 Revenue:—

											£
Customs and Excise Duties				..	..	..	..	..	..	..	477,300,000
Estate, etc., Duties and Stamps				..	..	..	..	..	..	..	31,283,000
Capital Taxes		..	..	..	..	..	..	..	..	..	10,212,000
Income Tax, Sur-Tax and Corporation Profits Tax							..	..	..	..	529,976,000
Corporation Tax		..	..	..	..	..	..	..	..	..	69,644,000
Value-Added Tax (including Turnover and Wholesale Taxes)									..	..	321,218,000
Motor Vehicle Duties			..	..	..	..	..	..	..	..	32,671,264
Post Office	..	..	..	..	..	..	..		..	..	121,500,000
Interest on Advances from the Central Fund (including Dividends on
Shares)	..	..	..	..	..	..	..	..	..	..	89,650,354
Sundry Receipts		..	..	..	..	..	..	..	..	..	64,061,212
Agricultural Levies			..	..	..	..	..	..	..	..	9,367,532
											1,756,883,362

Repayments, etc.

In Respect of Issues under the following Acts:—

Electricity (Supply) Acts, 1927 to 1976	..	..	..	..	..	..	1,848,713
Nítrigin Éireann Teo. Acts, 1963 to 1977		..	..	..	..	..	62,759
Sea Fisheries Acts, 1952 to 1974	..	..	..	..	..	..	334,149
Shannon Free Airport Development Co. Ltd. Acts, 1959 to 1974					..	..	1,143,997
National Building Agency Ltd. Acts, 1963 to 1974			..		..	..	1,669,421
Tourist Traffic Acts, 1939 to 1975	..	..	..	..	..	..	14,454
Insurance Act, 1953, Section 2(4)	..	..	..	..	..	..	94,030
Turf Development Acts, 1946 to 1975	..	..	..	..	..	..	732,429
Industrial Credit Acts, 1933 to 1977	..	..	..	..	..	..	2,060,013
European Communities Acts, 1972 and 1977		..	..	..	..	..	1,364,000
Telephone Capital Acts, 1924 to 1977	..	..	..	..	..	..	1,476,040
Redundancy Payments Acts, 1967 to 1973		..	..	..	..	..	3,180,000
E.E.C. Regional Development Fund	..	..	..	..	..	..	8,496,101
							22,476,106

Money Raised by Creation of Debt.—										£
Telephone Capital Acts, 1924 to 1977				..	..	..	..	..	..	54,000,000
Savings Certificates		..	..	..	..	..	..	..	..	15,360,000
Ways and Means Advances			..	..	..	..	..	..	..	1,497,110,416
Exchequer Bills	..	..	..	..	..	..	..	..	..	480,000,000
Prize Bonds	..	..	..	..	..	..	..	..	..	5,400,000
9½% Investment Bonds		..	..	..	..	..	..	..	..	3,670,000
Tax Reserve Certificates		..	..	..	..	..	..	..	..	158,455
National Instalment-Saving			..	..	..	..	..	..	..	8,982,065
Index-Linked Savings Bonds			..	..	..	..	..	..	..	1,645,000
11½% Finance Stock, 1981			..	..	..	..	..	..	..	24,375,000
13% Finance Stock, 1997-2002			..	..	..	..	..	..	..	23,250,000
Ireland Japanese Yen Bonds, 1977				..	..	..	..	..	..	32,287,723
8% Finance Stock, 1980		..	..	..	..	..	..	..	..	24,500,000
Other Borrowings	..	..	..	..	..	..	..	..	..	37,574,437
										2,208,313,096
Total Receipts									..	£3,987,672,564

Statement of Issues from the Central Fund for the Year ended 31 December, 1977

Central Fund Services:—										£
Public Debt Service		..	..	..	..	..	..	..	..	334,090,574
Road Fund	..	..	..	..	..	..	..	..	..	18,280,000
Annuities, Pensions, Salaries, Allowances, Returning Officers’ Expenses and
Miscellaneous		..	..	..	..	..	..	..	..	2,563,373
Contribution to E.E.C. Budget			..	..	..	..	..	..	..	24,709,762
Supply Services	..	..	..	..	..	..	..	..	..	1,772,438,005
										2,152,081,714

Issues under the following Acts:—

Electricity (Supply) Acts, 1927 to 1976		..	..	..	..	..	..	1,300,000
Local Loans Fund Acts, 1935 to 1974		..	..	..	..	..	..	102,187,000
Telephone Capital Acts, 1924 to 1977		..	..	..	..	..	..	50,500,000
Sea Fisheries Acts, 1952 to 1974		..	..	..	..	..	..	949,000
Transport Acts, 1964 to 1974	..	..	..	..	..	..	..	2,070,000
Insurance Act, 1953, Section 2 (4)		..	..	..	..	..	..	196,896
National Stud Acts, 1945 to 1976		..	..	..	..	..	..	500,000
Industrial Credit Acts, 1933 to 1977		..	..	..	..	..	..	6,682,000
Shannon Free Airport Development Co. Ltd. Acts, 1959 to 1974						..	..	4,525,000
Gaeltacht Industries Acts, 1957 to 1977			..	..	..	..	..	6,750,000
Fóir Teoranta Acts, 1972 to 1976		..	..	..	..	..	..	3,685,000
European Communities Acts, 1972 and 1977			..	..	..	..	..	26,517,748
Turf Development Acts, 1946 to 1975		..	..	..	..	..	..	1,500,000
Broadcasting Authority Acts, 1960 to 1976			..	..	..	..	..	2,320,000
British and Irish Steam Packet Co. Ltd. (Acquisition) Acts, 1965 to 1976							..	9,372,431
Bula Ltd. (Acquisition of Shares) Act, 1977			..	..	..	..	..	4,770,000
Bretton Woods Agreements Acts, 1957 to 1977				..	..	..	..	664,537
								224,489,612

Issues for the Redemption of Public Debt:—

										£
Ways and Means Advances			..	..	..	..	..	..	..	817,712,020
Exchequer Bills	..	..	..	..	..	..	..	..	..	480,000,000
Prize Bonds	..	..	..	..	..	..	..	..	..	2,344,000
Savings Certificates		..	..	..	..	..	..	..	..	5,370,000
National Instalment-Saving			..	..	..	..	..	..	..	3,058,815
6½% Investment Bonds		..	..	..	..	..	..	..	..	800,000
9½% Investment Bonds		..	..	..	..	..	..	..	..	535,000
Tax Reserve Certificates		..	..	..	..	..	..	..	..	200,521
Index-Linked Savings Bonds		..	..	..	..	..	..	..	..	115,000
5¾% Conversion Stock, 1977			..	..	..	..	..	..	..	111,789,214
11% Exchequer Stock, 1977			..	..	..	..	..	..	..	94,435,411
9½% Finance Stock, 1977			..	..	..	..	..	..	..	89,476,385
Other Borrowings	..	..	..	..	..	..	..	..	..	5,269,233
										1,611,105,599
Total Issues									..	£3,987,676,925

”

Mr. Mac Gearailt.—These are the usual informatory paragraphs. Paragraph 2 draws attention to the fact that the provision made by Dáil Éireann under the Vote for Army Pensions was overspent and that an excess vote will be required. The circumstances in which the over-expenditure occurred are set forth in paragraph 39 and the matter has already been dealt with by the Committee when the Accounting Officer for that Vote was under examination.

VOTE 1—PRESIDENT’S ESTABLISHMENT

Mr. T. F. Ó Cofaigh further examined.

428. Deputy Woods.—On subhead B— Travelling and Incidental Expenses—is that the total amount allowed to the President’s Establishment?

—It is.

429. What does it cover?

—It covers mainly State visits abroad. In 1977 the President paid a State visit to the Federal Republic of Germany.

430. Would this amount cover invitations extended by the President to various groups within the community?

—Entertainment expenses would be met elsewhere. This subhead deals with travelling expenses abroad.

431. My only concern about the £4,700 was that it seemed such a small sum for the President’s Establishment. I just want to make that clear in case any one thought I was querying the figure. I could not figure out how he could travel abroad on such a small sum and entertain people here. Personally I like very much to see the President entertaining people, having been entertained at one time by a former President. As a community person I thought it was a tremendous incentive to people in our community. It was in that context only that I raised it. For the record I should like to be clear about that.

Chairman.—In other words you are not complaining?

Deputy Woods.—Not at all. In fact I tend to look at it the other way.

—I have explained why the amount was so low that year. It was because of the narrow scope of the expenditure and the fact that there was only one visit abroad during the year.

VOTE 6—OFFICE OF THE MINISTER FOR FINANCE

Mr. T. F. Ó Cofaigh further examined.

432. Chairman.—On subhead A.2—Consultancy Services—there was an overestimate. The note states that the level of consultancy activity was less than estimated. I presume there would be a carry-over to the following year.

—I do not think there would be a carry-over. Our effort to calculate the level of consultancy proved to be out. In 1977 the Department hived off some of its activities to the new Department of Economic Planning and Development and to some extent this threw our consultancy plans into disarray. This explains the shortfall.

433. On the Special Regional Development Fund—there may have been a misunderstanding as a result of our previous discussion. The Committee did not suggest that payment under this heading should be terminated. We asked some questions about the allocation of money. What is the present position?

—Responsibility for the Fund has been transferred to the Department of Economic Planning and Development. The position of the Fund was being reviewed in the context of the work of the inter-Departmental committee on the organisation and functions of Government at sub-national level. We mentioned this in the first paragraph of the Minute of the Minister. That committee have not comprehensively reported on the position of the Regional Development Fund. While this is a matter for the new Department to decide. I should imagine that the activities of the Fund will continue. If it were intended to make any changes in the scope or activities of the Fund the Committee would be informed. We have undertaken this in the Minute.

434. Deputy Woods.—It is stated in the Notes to this Account that a sum of £33,325, representing principal and interest due on foot of a repayable advance of £23,674 to Connemarble Limited, was written off as irrecoverable on the liquidation of the company. What has happened to the company following liquidation and the realisation of its assets?

—My information is as follows: the company went into liquidation in 1977 and a statement of affairs prepared by the liquidator in October 1977 shows that the expected assets would amount to £10,182 with preferential creditors, excluding the liquidator, due £13,838. The liquidator was of opinion that none of the money due to the Minister would be repaid and, in the circumstances, it was decided to write off the loan, plus accrued interest in the 1977 fund account, in order to prevent an accrual of notional interest. That is where the story ends so far as we are involved officially.

435. There were preferential creditors in fact?

—There were, excluding the liquidator.

436. How does that come about? Were there some sort of preference shares or were there commitments entered into by the company?

—Perhaps I am not fully appraised of the facts here but Fóir Teoranta advanced £14,000 to the company. This could have been a preferential debt.

437. I was wondering how, in principle, the repayable advances fitted into the liabilities of the company. Obviously this is a case where they come down the line?

—I think so. I have not got the details here. I could let you have them.

I am just interested in the principle really.

—I am involved in this at about four removes with the fund interposing and the liquidator interposing.

It is interesting that Fóir Teoranta come in between and can actually establish preferential treatment at whatever stage they give their loan?

—Like debts to the Revenue Commissioners, State bodies have a certain amount of “stick” or whatever.

438. Chairman.—Social Welfare comes into the reckoning. In your experience are Fóir Teoranta well up in the queue as a preferential creditor? Do they take their pound of flesh early on or where do they fit in?

—I would think that normally Fóir Teoranta are well up in the queue. Whether they exercise their right to recompense I do not know. I do not think they would.

439. Deputy Woods.—That is understandable?

—I think the actual experience is the opposite and that Fóir Teoranta are left with a deficit at the end rather than having secured their rights.

VOTE 10—STATE LABORATORY

Mr. T. F. Ó Cofaigh further examined.

440. Deputy Woods.—On the Appropriations in Aid there is a deficiency of £2,349. Would this mean people were using the service less at that stage?

—This consists of three things. Fees received for testing such items as dairy glassware manufacturered by private firms. Also fees received under the Coroners Act for toxicological work done for coroners. Thirdly, recoupment from the EEC of travelling expenses of laboratory officials. Given that sort of breakdown you can see that if you divide the £10,000 roughly by three, a relatively minor variation adds up to what you have there.

441. I was wondering do the Institute for Industrial Research and Standards tend to take over more of the independent testing which might have been done by the State Laboratory?

—I do not preclude the possibility. I think most of the testing which would be done by the State Laboratory would be a well-recognised chore and would tend to stand independently of the IIRS.

442. Less of it would be done during the year anyway?

—As we are looking at it, in 1977 it is £7,600 realised out of an estimate of £10,000. This is probably not within the terms of reference of the Committee but you might be interested to know that in the following year the estimate was also £10,000 and we got in £8,900. It has actually increased.

443. It is a sort of nominal estimate?

—Given the breakdown you can produce proportionately large variations but the absolute figures are quite small relatively.

VOTE 11—SECRET SERVICE

Mr. T. F. Ó Cofaigh further examined.

444. Chairman.—The expenditure was about half what was granted. I suppose we will leave it at that. There is no point in delving into this or asking the Accounting Officer about something because if he knows it he probably will not tell us anyway?

445. Deputy Woods.—I presume again that is a nominal figure put down each year?

—I would add to that comment that it is an Estimate and we would not like to have to bring a Supplementary Estimate to the Dáil.

Chairman.—Questions might be asked?

—It is a very modest provision for the Secret Service.

Obviously expenditure was more modest than anticipated.

VOTE 14—MISCELLANEOUS EXPENSES

Mr. T. F. Ó Cofaigh further examined.

446. Chairman.—On subhead D.—State Entertainment—that would cover the President’s Establishment?

—That was referred to earlier.

447. On subhead E.—Recoupment to the Central Bank of Ireland of payments to the Liquidator of the Irish Trust Bank Limited—what is the present position with regard to validation of payments by the bank? A repayment was made, part of which was paid by the bank, I presume?

—The Central Bank made all the payments on behalf of the Minister. It was envisaged that the Central Bank itself would finally bear £996,000 of the charge. This was roughly the equivalent of 29p in the £ which the liquidator was expected to recover. The balance which was £1,800,000 was expected to be a final charge on the Exchequer. The liquidator is working on the recovery of the amounts involved. I was informed only this morning that it is a very slow process. Some of the assets are located in Australia. It will be a protracted operation to recover the amounts.

448. A final figure has not yet been fixed?

—No. It will be a considerable time before we have a final figure.

449. Deputy Woods.—By way of explanation, State entertainment includes the President’s entertainment. Would it include other Departments’?

—It covers all Government entertainment of a formal nature, for instance, luncheons, dinners, receptions for distinguished persons hosted by a Minister, Minister of State or official of a Department with the Minister’s authority.

It covers the whole lot.

—Yes. It also covers expenditure on transport and accommodation for distinguished persons.

450. Chairman.—Does it include State Apartments’ entertainment?

—Yes it does, the cost of the entertainment as distinct from the cost of the State Apartments which is borne on the Public Works Vote. To correct a wrong impression I may have given, the £15,000 entertainment allowance for the President is charged on the Central Fund. It would not be in a Vote.

451. We are now taking over the Presidency of the EEC again. That will involve very substantial entertainment of Community countries here. Will the cost of that be borne by us during our Presidency or by Brussels?

—It will be borne by us. It is part of the host country’s expenses.

VOTE 21—AGRICULTURAL GRANTS

Mr. T. F. Ó Cofaigh further examined.

452. Chairman.—On Subhead C—Employment Allowance—Arrears and Adjustments—that has been phased out.

—Yes. There are two main divisions now, holdings up to £20 and holdings of valuation over £20. The primary allowance is 100 per cent of rates on holdings up to £20 PLV. On holdings valued over £20 and up to £33 valuation 100 per cent relief is allowed on the first £20 valuation and full rates are payable on the balance. On holdings valued over £33, 80 per cent relief applies to the first £20 valuation and 30 per cent to the balance. Eighty-two per cent of all holdings are valued £20 or under which gives an indication of where the money is going. The total grant accounts for, in 1977, some two-thirds of the gross rates payable on agricultural land.

CONTINGENCY FUND DEPOSIT ACCOUNT

Mr. T. F. Ó Cofaigh further examined.

453. Chairman.—The Contingency Fund concerns a new Department?

—That is correct. The Contingency Fund is a long-standing institution in our estimates. It is used very occasionally and is a small provision. On this occasion it enabled us to meet the expenses of the Minister who was appointed in July before the Dáil could vote money for his Department. As Departmental officials were on loan from various Departments, mainly from Finance, we paid their salaries.

454. He has his own vote now?

—Yes.

455. Deputy Woods.—It shows the wisdom of having a Contingency Fund.

—It proves its usefulness.

456. It is expressed to be a deposit account. Could the Accounting Officer elaborate on that?

—It is not in the bank sense but we replenish it either from the Vote concerned or by way of a special Vote for repayment as a Contingency Fund. The moneys voted would be deposited with the Exchequer and used in the meantime.

457. Chairman.—I should like to thank you for your attendance and apologise for the inconvenience caused to you by our changing of dates. On your last appearance, the Committee, having particular regard to the special relationship which exists between the Committee and your Department, drew your attention to the inadequacy of the secretarial services which we had. Thankfully, the position has now been redressed and the Committee acknowledge your endeavours on our behalf in this field and appreciate it very much. It shows the importance of co-operation between this Committee, your good self and your Department in this area.

—Thank you. As I said on the last occasion, we are very conscious of the tripartite interest in proper financial control, the Committee representing Dáil Éireann, the Comptroller and Auditor General and ourselves. It is an essential formula for proper financial control.

The witness withdrew.

The Committee adjourned.

* See Appendix 2