Committee Reports > List of Committees > Dáil > 1979 > Committee of Public Accounts > Interim and Final Report - Appropriation Accounts 1977

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 28 Meitheamh, 1979

Thursday, 28th June, 1979

The Committee met at 11 a.m.

DEPUTY O’TOOLE in the chair.

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

VOTE 7—COMPTROLLER AND AUDITOR GENERAL

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

458. Chairman.—I should imagine, Mr. Mac Domhnaill, that due to recent legislation your workload in the Comptroller and Auditor General’s Office is becoming heavier. Would you care to comment on that and the resultant staffing position?

—What you say is true; there is a constantly changing situation because of legislation. New audits are arising—there have been some recently and there are others in the offing. Our present staff complement was authorised towards the end of 1977, at which time we had just carried out a comprehensive review of the workload. A review had not been carried out for quite some time before that and we sought some extra staff at that time. We did not get quite what we had sought. In fact we sought recently from the Department of the Public Service the numbers we were left short at that time and which we still feel we need. There is another aspect on which I should like to comment—apart from staff numbers—and, that is the question of staff training. After 1977, with an influx of staff, the situation now obtaining is that we have quite a number of staff who are short of experience. This is an aspect which should concern us immediately. We made some proposals recently to the Department of the Public Service in relation to the training aspect. We feel this is important now so that we may reap the best return from the staff we have been allocated. There are, therefore, those two aspects—the shortfall and the question of training.

459. Perhaps the Accounting Officer could give the Committee some idea of the increased workload, for example, the number of new audits his Office acquired in the past 12 months? Has the staff been increased to compensate for that increased workload?

—Perhaps I might answer the second question first. The staff has not been increased since the last authorised increase in 1977. We have been recruiting the extra staff since then but, of course, we have been losing some also. At present, of our authorised staff complement of 95—that would not be audit staff only, but includes head office staff, clerical staff and so on— we have a total of 89. In fact we have six vacancies.

460. That would include all grades? In other words, it is a global figure?

—Yes, that is a global figure. We have six vacancies on our audit teams, that is to say, on the basis of the staff authorised, not taking into account those I mentioned a moment ago, that is the ones we sought and which we had been left short of, which were three or four further heads of staff.

461. Therefore, you have not even your authorised complement at present?

—No, we have not. This is due to wastage and so on. I think we did reach the authorised complement some time during 1978, but we have lost some staff also. This happens constantly; we lose them to other Departments and so on.

462. And, presumably, also to private enterprise?

—Yes, perhaps to the semi-State sector and so on. In regard to the first question asked in relation to new audits, I should say there have been some statutory boards and so on established recently. For instance, there were the National Board for Science and Technology, the Employment Equality Agency, Bord na Gaeilge and An Bord Pleanála. Then there are others coming along, for instance, Udarás na Gaeltachta and An Chomhairle Oiliúna Talmhaíochta, in respect of which legislation has been enacted. Those will all involve additional work for us.

463. Deputy Woods.—I note that there is no subhead for consultancy services, not even a nominal provision. In view of the new boards with which you will have to deal—for instance, the National Board for Science and Technology or An Chomhairle Oiliúna Talmhaíochta, which are specialised areas—is it at all feasible to have specialist consultancy in relation to the work of the Comptroller and Auditor General?

—The work is basically on the accounting and auditing side, so I do not know that consultancy as such is a problem even though the boards might have specialised functions and so on. The problem really is a question of coping with the audit work rather than consultancy in relation to the specialised functions of the organisation.

464. I would have thought that, even at times, in understanding what, for instance, the designation of stocks was, or in understanding sophisticated scientific equipment, or other things like this, one might have some difficulty, purely from an accounting point of view, in establishing the validity of the sort of claim that might be made, whereas some specialist in science or engineering or someone else, could possibly advise within a very short time on the nature of the stocks, their value or whatever else. Does that arise at all?

—Not really. The stocks and the cost would be self-evident from the accounting records and so on. On the question of valuation we might take note of the views of the management of the organisation concerned.

465. That is the point, the Accounting Officer is relying, in effect, on the organisation’s technical advice in that respect, as to something’s real value, and its position in the stock. I just raise that point in principle.

—Obviously we would be concerned that depreciation had been provided for at a realistic level. Perhaps the Deputy is referring to some particular equipment and whether we would know if the amount provided for depreciation for such equipment was realistic.

466. From dealing with scientific people I know that it can be very hard to know, unless one is some way involved in it, exactly what they are talking about in terms of value, and the reality of the values of the goods, whereas if one asks an independent person from outside of that sector about it, he can very often give a fairly clear impression of where these things fit in just from his knowledge of the thing. I have no doubt that we could go through accounts and point out differences, due to particular specialised knowledge. It might be dangerous to rely on the organisation to fill purely a financial accounting function without from time to time doing an audit with some advice from that side. I only raise this point for my information as to what happens when these things are done.

—I take the Deputy’s point. If the Comptroller and Auditor General had some doubts as to whether the methods being adopted were realistic he would, perhaps, consider seeking independent technical advice on the matter.

467. In such a case would there need to be a nominal sum provided here, or is it just something for which arrangements would be made on an ad hoc basis?

—We would not consider providing for it as a matter of course. We can take care of the situation if it arises.

468. Chairman.—I raised the staffing issue because of the relationship between this Committee and the Accounting Officer’s Office. It is important for us as a committee that the Accounting Officer’s Office can do their job within a specified time and it is important that the Committee be clear that the requisite number of staff will be made available to carry out their function.

Deputy Woods.—I am making the point that not only is the work increasing in volume but also in complexity and some new approaches may be needed. During our work we had tremendous assistance and co-operation from the Comptroller and Auditor General and his Office.

Chairman.—We all agree with that sentiment.

—I appreciate the Deputy’s comments.

The witness withdrew.

VOTE 47—FOREIGN AFFAIRS

Mr. A. O’Rourke called and examined.

469. Chairman.—On subhead E—Repatriation and Maintenance of Destitute Irish Persons abroad—what is the present position? Is this sort of involvement on the increase or is it a stable kind of situation?

—It is reasonably stable. There is no dramatic move one way or the other. It is impossible to say from year to year what the exact involvement of the Department will be in this area.

470. Payments made abroad to destitute Irish persons are refundable to you?

—Yes and every effort is made to recoup them. If the Committee wish, we could provide figures of the extent to which we succeed in this respect.

471. Perhaps you could give us a global figure.

—I would estimate a success rate of 80 to 85 per cent.

472. Deputy Woods.—I take it that the people concerned make the repayments over a time after their return home?

—Yes. When people approach us abroad we ask them to sign a commitment to repay us after they have returned home and before we advance funds we endeavour to make arrangements with a relative or friend in Ireland of the person concerned to make a deposit equal to the amount being advanced.

473. Chairman.—Therefore, it is a type of guarantor system.

—We seek a guarantor but sometimes a person who is destitute abroad my not be able to make contact with somebody at home who would be prepared to act as guarantor. In such a case we would, if necessary, advance the amount necessary to enable the person to come home but he would be asked to sign an undertaking to repay us. We would endeavour to recoup the money from him.

474. Deputy Woods.—A destitute person would be regarded as one who is broke?

—Yes; temporarily embarrassed.

The word ‘destitute’ has a permanent ring about it.

475. On subhead A—Salaries, Wages and Allowances—I note that there is a considerable amount less than was granted but presumably accurate estimation is difficult when expenditures in foreign currencies are involved. Rates may prove more favourable than anticipated. I am merely making an interesting observation but perhaps the situation will be more in step as a result of the EMS arrangement.

—The difference was due mainly to the strength of sterling in the past years, a situation that was somewhat unexpected.

476. Chairman.—We raised with other Accounting Officers the question of the possible overlapping of services abroad. As we remarked to the Accounting Officer for the Department of Finance, there is a comprehensive explanation in the Minister’s minute which is very satisfactory.

—I thank the Chairman.

477.Deputy Woods.—I welcome the fact that full use is being made of the cross-Border study funds that were provided. I note that the £25,000 grant was exceeded by £3,625.

478. Chairman.—On subhead F—Cultural Relations with other Countries Account (Grant-in-Aid)—can you let us know briefly what is involved? In other words, what areas of activity in the cultural sphere are involved and who are entitled to moneys from this account.

—Perhaps I should explain that grants under this heading are paid only on the recommendation of the Cultural Relations Committee. The Minister acts on the basis of recommendations from the Committee and the Committee operate under regulations approved by the Minister and by the Minister for Finance. These regulations set out the general guidelines for the Committee. To summarise them, expenditure may not be incurred except for schemes of the following character:

(1)the production or purchase, and the distribution abroad, of publicity material illustrative of Irish culture;

(2)the donation, or loan, to foreign governments, institutions, organisations, groups, or individuals of objects of Irish cultural interest;

(3)grants to Irish or foreign institutions, organisations, groups, or individuals, for the purpose of:—

(a)promoting contacts or exchange of a cultural character with foreign countries, or

(b)spreading a knowledge of Irish culture in foreign countries, or

(c)facilitating Irish participation in international non-governmental gatherings of a cultural character;

Assistance is given to Irish students for educational courses abroad subject to certain conditions. These are courses which cannot be followed at home or higher or post-graduate courses in a subject studied here to the extent of the facilities available. There is provision also for an outstandingly brilliant student of music or the visual arts to study under a great master. Assistance is given also to foreign students to come to Ireland but only to students recommended by a recognised institution or by the Irish representative in the country of the applicant. Applications from foreign students will be considered only in the case of persons wishing to study the following subjects:

(a) Celtic Studies,

(b) Irish Language,

(c) Irish Literature.

VOTE 48—INTERNATIONAL CO-OPERATION

Mr. A. O’Rourke further examined.

479. Chairman.—On subhead D—Disaster Relief—Grant £100,000, Expenditure £100,000—when one looks at the expenditure as against the grant, the grant has been exactly expended to the last penny. How do you satisfy yourself, in respect of this expenditure, that the beneficiary is entitled, or is in such need that entitlement has been established? Could you give us any brief breakdown of the kind of situation you find yourself in, that would involve you in this kind of expenditure?

—Could I say that the requests to us for assistance, in the case of disasters of one sort or another, are very numerous. For example, for the year in question, disasters in respect of which we made donations included an earthquake in Rumania, floods in Bangladesh, problems of refugees in Thailand, famine in Tanzania, refugees in other parts of the world, cyclones and drought in a number of parts of the world.

480. Deputy Woods.—I take it you would have no difficulty in spending the £100,000.

—No difficulty whatever in spending the money. What we are doing is answering requests to us from United Nations organisations, such as the UN Disaster Relief Organisation or UNICEF, and also from Irish organisations such as Concern, the Medical Missionaries of Mary, the Irish Red Cross. We try to share the amount of money available to us over the very numerous requests which we receive. I think it is very clear that when a disaster of this sort occurs, it is a cause deserving of assistance.

481. Chairman.—We are not suggesting that there is any misappropriation of funds, or anything of that nature. The demands far outstrip the resources available to you, I am sure, and you have international agencies who confirm the need.

—Yes.

482. On subhead E—Payment to Grant-in-Aid Fund for Bilateral and Other Aid Contributions for Developing Countries— this is a grant-in-aid, and on subhead F— Payments for the Benefit of Developing Countries arising from Membership of the European Economic Community—what criterion would apply here? As far as the information given in the Appropriation Accounts is concerned, I am wondering what opportunity is available to the members of the Committee and of the House to apprise themselves of the details of this kind of expenditure?

—You are referring to both subheads E and F?

Yes, to E and F.

—F is, perhaps, more easy to deal with. We are faced with demands that we have to meet, are obliged to meet under our obligations to the European Community. The sums are levied on us in a way which can be very easily explained. Under bilateral aid, of course, we have freedom, ourselves, to determine how we shall expend the amount of money provided. We have been building up a national bilateral aid effort over recent years and, within the Department we have a division engaged in this work. We have established one officer abroad in one of the countries which we regard as a priority area, Lesotho, in order to follow very carefully the proposals which are put to us and to establish projects with which we can be sure we are dealing properly. In the future, I think we shall expand a little in this area of our activities by placing people on the ground in a few key areas, so that we shall have first-hand information on the sort of project which is desirable, and on the carrying through of projects. Perhaps I should say that in 1977 the programme was concentrated in four priority countries —Lesotho, the Sudan, Tanzania and Zambia. We are continuing to concentrate on these areas. This activity is, of course, discussed on the Estimates speech—the estimates of our Department—and we fairly frequently have parliamentary questions on this subject. Apart from that, there is no particular provision or arrangement for discussing our bilateral aid programme.

483. It is not a question, again, of casting any doubt on the validation of expenditure. It is a question of having information available to Members of the House in the form of some hand-out. For example, the Office of Public Works undertake the production of a fairly comprehensive volume of all their works in detail, and while it might be rather inappropriate to include that here, as it is included on page 169 in respect of subheads A and B, I am wondering about the suggestion of producing some kind of document that would give details of the different projects in which you are involved in the areas mentioned. It would be of help to the Committee.

—I think it would.

484. Deputy Woods.—Yes, I would agree. They are currently given in a number of ways, in a broad way. It would be very useful to break it down into the details and probably this would not be very difficult for your Department?

—No. I think we would be very glad to do so, if it is not already available in one or other of the publications of the Department.

485. The point is that they are spread about a bit. You would have to put a number of them together. Of course, the DEVCo Report gives a fairly good idea of what is being done in that area. In your own reports, the 11th and 12th Reports, you cover the EEC side of it fairly well. However, I agree with the Chairman that it would be a considerable convenience if Members of the House had a fairly simple listing in a fairly simple paper, if you like, in a stencilled form.

—I am sure my Minister would be very interested in providing any information.

486. Chairman.—For example, there is a detailed break-down in the accounts of APSO. There is no problem there. I am referring just to E and F, so if you could see your way to doing this—nothing very elaborate, of course, just a comprehensive listing of the activities—projects you are funding.

—I see no difficulty there.*

Mr. O’Rourke, I thank you very much.

The witness withdrew.

VOTE 43—TOURISM AND TRANSPORT

Mr. N. McMahon called and examined.

487. Chairman.—Subhead B.3—Post Office Services—and Subhead B.4—Cross-Channel Telephone Lines used for Civil Aviation —obviously bear some relationship to one another. But to the layman like myself it would seem that both could be under the one subhead. However, there may be good reasons for not doing so. Would the Accounting Officer like to comment on the fact that there are two subheads dealing with this one area of telecommunications?

—Subhead B.3 relates mainly to domestic installations in the country which we require for the operation of civil aviation services and also marine services. Under subhead B.4 provision is made for the payment of rentals on cross-channel telephone lines which are for the common use of the United Kingdom and Irish services. In this year, which is somewhat a transitional one, there is an overlap between them. For example, some of the moneys for which we had made provision under subhead B.4 were paid out of subhead B.3. The position was that previously the Department of Transport and Power, as it was then, paid our share of the rental of cross-channel telephone lines to the Department of Posts and Telegraphs. The corresponding British authorities paid their share to their postal authorities and then there were adjustments made between the two postal administrations. This system is in the course of being changed. What is being done now is that we pay our share of the cross-channel lines to the United Kingdom Civil Aviation Authority, who add their share, and pay it to the British postal authorities. Then the two postal authorities get together to apportion it correctly between them. In that year this system was not fully operational. Therefore some of these costs were paid out of subhead B.4 and some met out of subhead B.3 under the old system. That may not cover the question asked, which was why we had two subheads. It is a matter we could examine, but I think there is a distinction between them in the sense that under subhead B.3 we cover not alone cross-channel telephone lines such as we have under subhead B.4, but various other radar and radio installations, the recoupment of salaries in respect of engineers who are on the Post Office strength but who provide services for us, and various other postal and storage arrangements.

The Accounting Officer’s explanation is acceptable—he has pointed out that there are technical reasons for having two different subheads.

488. Deputy Woods.—On subhead E— Grants for Harbours—it is only fair to note that we have often queried under-expenditure in that area and been told of the difficulties involved in having contracts advanced and getting them to the final stage. I notice that the Howth harbour contract was placed recently and that work is going ahead at present.

—I should mention that the Howth harbour contract will not be financed from the Vote for the Department of Tourism and Transport. It is a fisheries harbour and will be financed by arrangement between the Department of Fisheries and the Office of Public Works.

489. Chairman.—There is a very big supplementary estimate under this subhead, nearly as much as the original. Perhaps the Accounting Officer could comment on that?

—The supplementary estimate arose mainly because of the need to provide for the major development scheme being undertaken at Cork harbour. Deputy Woods has commented on the difficulty of estimating accurately the progress of work on harbour development because it is very much affected by weather, sea and marine conditions generally. It was possible to make greater progress in that year on the Cork harbour scheme and this supplementary estimate was entirely for Cork harbour. Ultimately I think there was a saving of approximately £200,000, which was attributable to some slowing down because of unfavourable sea and weather conditions at a certain time of the year.

490. Deputy Woods.—Yes, it is an understandable situation arising from the nature of such development work to find oneself at one stage with a substantial surplus to give back and, at another stage, in need of supplementary finance quickly because of the rate of progress.

—Yes, it is a feature of most major capital development projects but is more acute where marine works are concerned because they involve intangible and unforeseeable contingencies that can only be guessed at in advance.

Chairman.—We appreciate the difficulty encountered there.

491.—On subhead M—Energy Conservation—a matter that has come into focus more sharply now than was the case in 1977, I note there was an underexpenditure there. Could the Accounting Officer explain what was involved under this subhead?

—The expenditure of the £160,000 arose mainly where three different services were involved. Two are grant schemes, and one represents expenditure undertaken directly by the Department. The grant schemes were introduced to encourage industrial and service industries to undertake fuel efficiency surveys, and efficiency tests of all boiler installations, to avoid wasteage of energy and also to encourage both the industrial and the domestic sectors to undertake energy conservation projects under the general supervision of the IIRS and An Foras Forbartha. In addition, the Department undertook a number of publicity campaigns designed to encourage the domestic sector—householders and so on —and the motoring public to pursue more efficient methods of utilising energy in heating, cooking and petrol consumption. In the course of this year, the energy functions generally were transferred from the Department of Transport and Power, as it was then named, to the Department of Industry, Commerce and Energy and some of the expenditure which had been envisaged, did not take place because the transfer of functions interrupted, to some extent, the momentum of the work and led to a review of some of the programmes which were then renewed under the Department of Industry, Commerce and Energy. This was the reason for the saving of approximately £40,000 on the vote.

492. Chairman.—An subhead U—Grant to Royal National Lifeboat Institution—is this grant reviewed from time to time and if so how often?

—The amount of the grant is reviewed annually. As regards a review in relation to cost, this represents only a very tiny proportion of the total costs of the services provided in Ireland by the RNLI. In fact, they told us that their total cost of operations in Ireland in that year was over £700,000 and the total amount contributed from all Irish sources, including our grant of £20,000, came only to £137,000 which means that a lot of the services they provide are financed from non-Irish sources of revenue. Our grant of £20,000 represents a gesture of recognition of their services rather than a major contribution to their expenses. The amount is reviewed from time to time, but it has remained at £20,000 for a couple of years now.

493. How does that compare with the grant they receive in the UK from Westminster? I presume that a major proportion of their finance would be from voluntary sources.

—As far as I am aware they raise practically all of their money from voluntary sources, and I am not aware that they get a government grant in the UK.

494. It does not concern us. I just want to know if there is a comparable grant.

—There is not. Our grant was introduced, not to bridge a revenue gap but as a token of our recognition of the services they provide at a considerable saving to the community.

495. Deputy Woods.—On subhead Z— Appropriations-in-Aid—Note 3 says that there was a surplus on Aer Rianta Teoranta Operating Accounts Dublin, Shannon and Cork Airports including passenger load fee at airports. What exactly is the passenger load fee? Is it a rate for the volume of passengers going through, or what?

—It is a levy charged by Aer Rianta in respect of each passenger handled through the airport. At one stage it was charged direct to the passengers in the form of a passenger tax but this proved rather unpopular and most countries have moved away from the direct charge on the passenger. It is now the carrier from the airport who pays it and incorporates it in his fare to the passenger. It is designed to cover the cost of baggage handling and general passenger handling at the airports.

496. Do some countries still have it as a separate charge?

—Passenger tax is still levied in some countries as a separate charge, but it causes difficulties because many people travelling home from abroad do not allow for it, or they have not the correct currency to pay. This is a more efficient way of getting it.

497. This figure increases with the volume of business from the airport?

—Yes. It is indexed to passenger volume.

498. Under the Notes on page 139, Ex-gratia payments totalling £51 were paid to four officers in respect of losses and damage to personal property in the course of official duties and during a break-in at the Mercantile Marine Office in March 1977. If this occurs, is it not surprising that it does not occur more often? Perhaps people do not claim for that sort of thing, or are they usually covered by insurance?

—Is the Deputy relating his question to this break-in or to this type of thing in general?

The ex-gratia payments for all losses.

—This is not a major expenditure.

I appreciate that. If one divides four into £51 it means that the four people got about £12 each. If it occurs at all, it is surprising that it does not occur more frequently, where so many staff work?

—It would be easier for me to answer in relation to the cases in which it did occur than in relation to cases in which it did not. By and large, staff do not pursue these things unless there is a significant loss involved which is directly attributable to official duties. In this case there was a loss of spectacles and a loss through break-in. Occasionally there is damage to clothing because of the equipment or the state of cleanliness of the office or the workplace. This was a very isolated incident.

Does the insurance not cover that?

—The State does not carry insurance against that type of thing.

Chairman.—I thank the Accounting Officer for his attendance and his replies.

The witness withdrew.

499. Chairman.—Before we conclude I should like to pay tribute to Deputy Woods who, because of his moving on to greater things, will not be with us again on this Committee. I wish him every success in his new and onerous office of Minister of State at the Department of the Taoiseach and at the Department of Defence. We are very grateful to him for his regular attendance at these meetings and for his contributions. I am confident that his new responsibilities will not present any problem for him.

Deputy Woods.—I thank the Chairman for those kind words. I have enjoyed very much being a member of this Committee. The experience has been very valuable to me. I share with you and the other members the difficulties of the Committee in that we are faced with so many complex Departments and reports. In these circumstances the Committee do a very valuable job. Naturally, we would all like to see it being done even better in various ways and in that respect I had been working up to the 1978 Accounts. I have found you, Mr. Chairman, to be a very good and thorough chairman. It has been a pleasure to work with you. You have followed the best traditions of the Committee. I should like to make the same point so far as the other members of the Committee are concerned. They have approached the work of the Committee in an objective and constructive way. It has been a pleasure for me to work with every member of this Committee. The Comptroller and Auditor General has been a tremendous help to all of us. I have learned from him during my time here and I shall value what I have learned. So far as the Clerk to the Committee, Mr. Phelan, and the other staff are concerned, I can only say that we have been very fortunate. Mr. Phelan has been diligent in his work and has given us much assistance during the year. In a way he can be regarded as the chief whip of the Public Accounts Committee, ensuring that we are here at the appropriate time. He takes his task very seriously and this is good because Deputies generally are under a good deal of pressure and it is valuable for them to have a whip in respect of a committee like this. Since Mr. Phelan has been appointed to this post he has made our task here a good deal easier. In conclusion, I thank the Chairman, the other members of the Committee, the Comptroller and Auditor General and the staff in general for the kind words that have been expressed.

Deputy Belton.—I, too, wish Deputv Woods every success in his new office.

The Committee adjourned.

* See Appendix 7