Committee Reports > List of Committees > Dáil > 1980 > Committee of Public Accounts > Report - Appropriation Accounts 1978

REPORT

PART 1—GENERAL OBSERVATIONS

MINUTE OF MINISTER FOR FINANCE DATED 19 MARCH 1980

REPORT DATED 24 JUNE 1976

Delays in Collection of Monetary Compensatory Amounts

Para 29

1. The Committee notes that every effort is being made to collect outstanding MCA charges which at the end of 1979 amounted to £670,000, mainly in respect of cattle and beef. It also notes that £350,000 of this amount related to 13 cases where court judgements had been obtained by the Department and £146,000 related to some 200 cases where court cases were still pending. The Committee wishes to be kept informed of developments in this matter. It will also await information on the outcome of the investigations being carried out into the carousel trade in pigs and cereals.

REPORT DATED 21 APRIL 1977

Primary Education—Scheme of Adaptation and Extension for a National Teacher Training College

Para 19

2. The Committee notes that, while the Minister for Finance accepts that the resolution of disputed claims under a contract is a normal part of the work of the Building Unit of the Department of Education, he considers that in the exceptional circumstances of this case prior sanction should have been sought. The Committee also notes that the Minister, given all the circumstances, is, however, satisfied with the arrangements made in this case, especially as the settlement of £38,000 reached with the contractor covered all outstanding claims with over £20,000 of this sum representing claims for work actually done and as the contribution by the College authorities towards the settlement substantially covered the claim for delay arising from the temporary cessation of work.

The Committee is concerned at the delay in concluding the agreement with the College authorities guaranteeing the exclusive use of the College for the training of national teachers or for other approved educational purposes and it notes that the Department of Education is still in communication with the Chief State Solicitor on the matter. When dealing with the 1978 Appropriation Accounts the Committee was informed by the Accounting Officer that the delay in concluding this agreement was not due to any issues of principle and related solely to the completion of the legal documentation. The Committee would like to be informed when this matter has been finalised.

Secondary Education—Local Contributions towards the Capital Costs of Community Schools

Para 20

3. The Committee is pleased to learn that agreement on a model Deed of Trust for community schools has been reached and that deeds in respect of the individual schools are to be signed by the religious authorities and the Vocational Education Committees concerned in accordance with the agreed model.

The Committee notes that with the approval of the Minister for Finance it has been agreed that the contribution payable by a Vocational Education Committee will be 5% of the cost of building and equipping the community school payable in five equal annual instalments, free of interest. The Committee also notes that in the case of the Dublin archdiocese agreement has been reached with the diocesan authorities that the local contribution will be 5% negotiable downwards in certain cases to 4% of the cost of buildings and equipment and that for new schools outside the Dublin archdiocese which do not replace an existing secondary school the standard local contribution should be 5% and for community schools involving the amalgamation of a secondary school the contribution should be not more than 5%. As in the case of the Vocational Education Committee contribution the local contribution agreed with a religious authority may be paid in five equal annual instalments, free of interest.

When examining the 1978 Appropriation Accounts the Committee was informed by the Accounting Officer that negotiations on the actual level of contribution to be paid have to be carried out in any case where a local secondary school is being amalgamated with a community school because the question of a set-off against the local contribution may arise where the authorities who are managing a school which is being closed stand to lose financially because of the closure of their premises.

The Accounting Officer explained to the Committee that the agreement that the contribution payable by the Dublin archdiocese could be negotiated downwards to 4% had been made because of a great incidence of charge in the area arising from the very high proportion of new schools in the archdiocese and also because the diocesan authorities had accepted a greater degree of responsibility than other authorities for the financing of the schools and for ensuring that the Department would get a contribution in all cases.

The Committee urges that the Deed of Trust be completed and the collection of the local contribution be commenced in respect of any community school where this has not yet been done. It wishes to be informed how it is proposed to bring the local contributions to account and it considers that any case in which the contribution collected falls short of the limits laid down should be brought to attention in a suitable note in the Appropriation Account. In view of the implications for public expenditure the Committee recommends that any agreed local contribution below the 5% figure should be separately set out in the Appropriation Account by the Department of Education.

Charging of Expenses arising out of Market Intervention

Para 25

4. The Committee notes that, following the availability of computerised stock records for 1976 for use in clearing payments-on-account of intervention expenses, the relevant accounts are now being finalised and that, since payments of intervention expenses after 1976 were, in general, made following a check of invoices rather than being on account, the problems which had arisen had to a large extent been overcome. The Committee welcomes this information and it trusts that there will not be a recurrence of these problems.

FEOGA Accounts

Para 26

5. The Committee notes that the transmission of the intervention beef accounts for 1976 was delayed pending an indication from the EEC Commission whether, following their audit of the intervention beef accounts for 1975, any amendments were necessary in the 1975 accounts which would have a carry over effect into the accounts for 1976. It understands that the Accounts for 1976 have now been transmitted to the Commission.

The Committee would urge that every effort be made to complete the preparation and submission to the Commission of all outstanding FEOGA accounts without further delay.

REPORT DATED 15 JUNE 1978

Clearance of Cashed Payable Orders by the Paymaster General

Primary Education—Overpayments of Teachers’ Salaries

Para 19

Para 23

6. The Committee is glad to learn that the full amount represented by payable orders found to be fraudulent subsequent to their encashment by banks has now been recovered.

It notes that there has been a substantial growth in the volume of payable orders since computerisation was first introduced, from some 1 million to over 3 million orders a year. It accepts that this increase could have been a major factor in causing the delay in the processing of orders by the existing computer system but it is at a loss to understand how such an increase was not anticipated and the necessary revision of the system carried out in time. One of the main advantages of a computerised system is its ability to process speedily a large volume of transactions and the Committee would have thought that such a system, if properly planned, would have been capable of processing promptly the increased volume of orders, all the more so, if, as appears to be the case, the former manual system had been dealing effectively with the processing of orders.

While the Committee welcomed the information that the Minister had directed that a revised system for clearing payable orders drawn on the Paymaster General’s Office within the two-day requirement should be brought into operation as a matter of priority and that a suitable system had been designed, it was disturbed to learn from the Accounting Officer during his examination on the Appropriation Accounts for 1978 that the accommodation which had been allocated for the new installation and which had been expected to be available in the Autumn of 1980, had been re-allocated for other purposes and that the alternative accommodation obtained for the new computer system would not be ready until six months later. This suggests that the installation of the revised computerised system is not receiving the high priority which it requires.

The Committee wishes to point out that, although the failure to process promptly the fraudulent orders in the present case did not result in any loss of Exchequer funds, there is no guarantee that such a loss would not occur from similar failure in the future, especially if the sum of money represented by the orders involved was a much larger one. It must, therefore, urge that the revised computerised system be made operational without further delay.

Secondary Education—Deductions from Salaries in respect of Social Welfare Benefits

Para 26

7. The Committee notes that all teachers who were paid full salary while on maternity leave during the period 1 January 1975 to 31 July 1976 have been written to by the Department of Education and that of 108 teachers involved seven have produced certificates that they did not receive Social Welfare benefit, two have disclosed the amounts received, recovery of which is being arranged, and the remaining cases are being vigorously pursued.

The Committee wishes to be kept informed of developments.

Fisheries

Para 28

8. The Committee notes that the Minister for Finance has been informed that, despite further discussions, agreement has not yet been reached with Mayo County Council on its rate of contribution towards the cost of the improvement Scheme at Killala harbour. The Committee would welcome information as to what further action is now proposed.

Local Government—Audit of Accounts

Para 30

9. The Committee notes that the Minister for Finance agrees that the clearance of audit arrears is a matter of urgency and that, following the expected recruitment of staff to fill additional authorised posts, it is hoped that substantial inroads into the arrears can be made during 1980.

The Accounting Officer during his examination on the Appropriation Accounts for 1978 told the Committee that the authorised number of posts in the Local Government Audit Service had been increased from 41 at 1 December 1978 to 54 at 1 December 1979 and that steps were being taken to fill the existing 13 vacancies, of which 5 were in the auditor grade and 8 in the trainee auditor grade.

The Committee wishes to be kept informed of progress made in clearing the audit arrears.

Local Government—Overissues of Housing Subsidy

Para 31

10. The Committee notes that Local Government Auditors have certified all but fourteen claims for local authority-housing subsidy in respect of the four financial periods from 1 April 1973 to 31 December 1976 and that all overissues established by reference to the certified claims have been fully recovered. It also notes that it was expected that all but three of the remaining claims would be cleared in 1980. The Committee wishes to be informed of the progress made to clear the outstanding claims.

The Committee is glad to learn that the Minister for Finance agrees with its view that the procedure formerly adopted by the Department of the Environment for the payment of housing subsidy was undesirable and that it should not be adopted in any similar situations which might arise in the future.

Health Contributions

Para 34

11. The Committee notes that it is necessary for the Department of Health to consult with the Health Boards to obtain the detailed information which it sought and that this will be forwarded to the Committee as soon as possible. The Committee must express its surprise that the Department of Health did not, apparently, see fit to seek such detailed information from the Health Boards until the Committee asked for it. Failure to seek this information could imply a complacent attitude on the Department’s part towards what were obvious divergencies in the statistics furnished by the Health Boards regarding the levels of collection and arrears of health contributions. The Committee would like to be assured that such an attitude does not exist in the Department.

When the Accounting Officer gave evidence before the Committee in connection with the 1978 Appropriation Accounts he explained that when the working party to examine the overall system relating to the collection of health contributions by Health Boards was established early in 1979 the system was being changed from a flat-rate one to an income-related one. The working party would soon be reviewing the operation of the new system in its first year but in the meantime the Department of Health had been getting better information from the Health Boards about the operation of the scheme in the earlier years and it expected to be able shortly to indicate what the rate of collection from farmers had been up to 1979. The Accounting Officer stated that the information already available to the Department showed that this rate had improved considerably but he agreed that when the final position was established there was no doubt that some arrears would have to be written off for various reasons.

The Committee will await the detailed information sought by it regarding the collection of health contributions by the Health Boards as well as information on the progress being made by the Working Party.

REPORT DATED 26 APRIL 1979

Superannuation and Retired Allowances

Para 29

12. The Committee notes that it will be informed when the schemes referred to in its Report have been signed by the Ministers concerned. The Accounting Officer, when giving evidence in connection with the 1978 Appropriation Accounts, informed the Committee that ten schemes had been finalised and that two were outstanding, one relating to the purchase of service and the second being a consolidation scheme.

The Committee also notes that the statute authorising the making of these schemes was enacted in 1976 and, while it accepts that there can be problems in agreeing the details of such schemes, it would urge that every effort be made to overcome any such problems in order that the outstanding schemes may be finalised as soon as possible.

Wealth Tax—Delay in submitting returns

Para 31

13. The Committee is disappointed to learn of the slow rate of progress in dealing with outstanding wealth tax cases. It notes that in the period 1 May 1979 to 31 December 1979 returns were received in only 170 out of 2,200 cases in which such returns were due and that, at 31 December 1979, tax still remained to be assessed in 2,100 cases. While the Committee accepts that formal assessments in outstanding cases may not result in the collection of significant additional amounts of tax over and above the payments on account already made, nevertheless, it urges that every effort be made to obtain the outstanding returns and to complete the formal assessment of the tax in all cases. It wishes to be kept informed of the progress being made to do so.

Posts and Telegraphs—Cable Television Fees and Television Licence Defaulters

Para 32

14. The Committee notes that the Department of Posts and Telegraphs will continue to take all necessary steps to ensure the prompt payment of fees and the submission of annual certified statements of gross revenue by cable television operators. It also notes, in regard to the detection of defaulters in the payment of licence fees on television sets, that four of the cable television operators, catering for about 90% of the 215,000 subscribers serviced by the twenty-one licensed operators, supply subscriber information regularly, that twelve operators supply such information on a less regular basis, and that the Department of Posts and Telegraphs continues to press all licensees for such information. The Committee welcomes the information supplied by the Accounting Officer, following his examination in connection with the 1978 Appropriation Accounts, that all licensed operators had since supplied the required information.

The Committee would like to be informed whether subscriber information received in this way has revealed any significant evasion in the payment of television licence fees.

Environment—Housing Subsidy and Rent Arrears

Para 34

15. The Committee is concerned to learn that, because the accounting system operated by a local authority did not distinguish between rent arrears and the subsidisable items in the housing account, rent arrears of that local authority, which accrued in the period 1 April 1973 to 31 December 1976 and which were attributable to a rent strike, were subsidised by the Department of the Environment. The Committee notes that, at the request of that Department, an exhaustive review of the rent arrears position was carried out by the local authority in question in the Autumn of 1979 and that, as a result, it was established to the satisfaction of the Department of the Environment that the full amount of rent arrears incorrectly subsidised was £228,884. The Committee also notes that this sum has been recovered in full by deduction from the subsidy payment due to the local authority in December 1979. While the Committee is pleased to learn that the amount overpaid has been recovered in full it considers that the overpayment need not have been made if the Department had been more vigilant in this case, since it was no doubt aware of the rent strike and must have been familiar with the way in which the housing account was presented.

It would like to be assured that the failure to advert to the inclusion of rent arrears in the subsidisable housing deficit in this case does not indicate a casual approach on the part of the Department to the examination of local authority claims in general and housing claims in particular.

Office of the Minister for Education—Higher Education Grants

Para 35

16. The Committee notes that an appropriate amendment has been made to each local authority’s scheme of Higher Education Grants directing that the lower rate of grant, as well as being applied in the case of every candidate who could reasonably be expected to travel daily between his home and college, shall also be applied in the case of every candidate whose home is within 15 miles of the college or other educational institution at which he is pursuing his course of study.

Regarding the accountability of the Accounting Officer of the Department of Education which was being investigated by the Department of Finance, following the observations made by the Committee in its previous report, the Accounting Officer of the Department of Finance, when giving evidence in connection with the 1978 Appropriation Accounts, stated that, since legal opinion had been obtained to the effect that the Minister for Education in making his decision in the specific case referred to by the Committee was acting in accordance with his statutory powers, the Department of Finance regarded that as being a satisfactory discharge for the Accounting Officer concerned because his responsibilities had been statutorily delimited by Dáil Éireann. The Accounting Officer of the Department of Education told the Committee that the Minister’s decision was not a personal one but an administrative one made on the basis of advice given to him by the Department. In regard to the effect of this decision viz, that it was considered that no excess payments had been made and that no overpayments therefore fell to be recovered from the local authority involved, the Accounting Officer of the Department of Education told the Committee that the original advice from the Attorney General that the excess grants were recoverable was based on the facts as presented to him at the time which in turn were based on the Department’s understanding of the position but that, when further investigations were carried out and representatives of the local authority interviewed, it was found that the local authority had taken precautions at all stages to keep within the legal provisions by passing appropriate resolutions. Nevertheless, the local authority was not acting on the basis which the Department would have expected nor as the Department intended under the Act. It was therefore necessary to take steps by amending the scheme in 1979 in all cases to ensure that for the future this authority would act as the Department intended it to do. The amount of the alleged overpayment had never been established and the Local Government Auditors had told the Department that, as far as they were concerned, everything was in order. Furthermore, efforts by the Department to obtain an estimate of the amount of the grants which would not have been paid had the local authority operated the scheme as intended, proved unsuccessful.

Questioned by the Committee, the representative of the Department of Finance stated that, while the Attorney General had originally advised that the payments made were recoverable in this case, the final advice given by him was that the Minister for Education had acted within his rights as given to him by the Oireachtas in legislation and that this advice was based on different information which became available subsequent to the giving of the original advice. The Accounting Officer of the Department of Education, however, stated that the Attorney General had not been asked to comment on the subsequent information because the Department did not think it necessary to do so in relation to decisions which it had to make and the decision to regard the local authority as having acted legally was therefore an administrative one taken by the Department on the basis of information given by the local authority as to the action it had taken following consultation with its legal advisers.

The Committee is far from satisfied that it understands fully what has happened in this case. The original issues which concerned it, i.e. whether excess grants had been made to a local authority and whether such excess grants are recoverable, have been joined with a much wider issue, i.e. whether and to what extent the accountability of an Accounting Officer can be delimited by Ministerial action.

Because of the wider implications which these issues, especially the latter one, could have for the control of public expenditure the Committee proposes to consider them further and to this end it wishes to be furnished with the following documentation:—

(a) a copy of the original submission to the Attorney General made by the Department of Education;

(b) a copy of the advice given by the Attorney General in reply;

(c) a memorandum from the Department of Education giving details of the additional information which came into its possession subsequent to the submission made to the Attorney General and, in particular, the nature of the resolutions passed and other steps taken by the local authority involved which it claimed established that it had acted within its legal competence;

(d) a copy of the second submission made to the Attorney General;

(e) a copy of the advice given by the Attorney General in reply; and

(f) any additional information which the Department of Education or Department of Finance considers might be of assistance to the Committee in its further consideration of the issues involved.

Secondary Education

Para 36

17. The Committee notes that the question of the establishment of an internal audit system within the Department of Education is under consideration in the light of the Report of the Inter-departmental Committee which examined the general question of setting up such units in Departments and that, in the meantime, the arrangements for improved control of the financial administration of comprehensive and community schools are continuing in operation.

The Accounting Officer, during examination on the Appropriation Accounts for 1978, told the Committee that the establishment of such a unit would also be considered in connection with the setting up of a finance unit as part of the restructuring of the Department which was being undertaken by the Department of the Public Service and that he did not expect firm proposals on this matter to be made by that Department before the end of 1980.

The Committee is concerned at the delay in setting up an internal audit unit in the Department of Education especially having regard to the considerable increase in recent years in the volume of public moneys for which the Department is responsible and the expansion in the number of cost centres involved, many of which are removed from the immediate supervision of the Department. It regards the establishment of a properly staffed unit as a matter of urgency and in the circumstances it questions the advisability of postponing such action until the finance unit, proposed as part of the restructuring of the Department, is set up. The Committee considers that action should be taken without further delay to establish an internal audit unit if this has not already been done.

Residential Homes and Special Schools

Para 37

18. The Committee notes that the covering sanction of the Minister for Finance for the charging of unvouched expenditure of £647 against the vote for Residential Homes and Special Schools has been granted. It also notes that the officers of the Department of Education responsible for examining accounts and records of expenditure have been fully briefed in accordance with guidelines agreed with the Comptroller and Auditor General’s Office.

Higher Education

Para 38

19. The Committee is concerned that a decision has not yet been reached regarding a claim in respect of the defective external wall finish at the National College of Physical Education, Limerick. It is also concerned that the question of pursuing a claim in relation to the squash courts will not be decided until the external wall issue is resolved. The Accounting Officer told the Committee in May 1980, during his examination on the Appropriation Accounts for 1978, that the position was still unsatisfactory and that no progress had been made in effecting improvements that would be apparent nor had a contract to carry out the repairs been placed.

He explained that the problem was related entirely to the Department’s legal position and that, until a decision is made which would clear the situation either one way or another in relation to the Department’s liability, progress would not be made with the improvement of the building. He added that the Department would have to have legal advice in the case and would have to act in accordance with it.

The Committee recalls that it was informed by a former Accounting Officer in November 1978 that the Department had been legally advised that the defects in the building would have to be put right at the expense of the contractors. If, as now appears, this position has since changed the Committee would have expected that it would have been informed of such change at the earliest possible date. The Committee is at a loss to understand the reasons for the delay in bringing these matters to a conclusion and it would welcome further information.

The Committee notes that the total extra cost of variations on the building contract for this College was £119,604. It also notes that the sanction of the Minister for Finance for the excess expenditure, including the cost of variations, was sought and given retrospectively and that the Department of Education has given an assurance that prior sanction will, in future, be sought in such cases.

Public Works and Buildings

Para 40

20. The Committee is disappointed to learn that, despite an intensive search for centralised accommodation for the Furniture Division of the Office of Public Works, including offices, no suitable premises could be found. It notes that negotiations are in progress for the acquisition of a warehouse to replace one of the rented storage areas which is particularly unsatisfactory. The Committee would urge that efforts be continued to secure adequate storage space for the Furniture Division which, as it has stated before, is one of the requisites for a satisfactory solution of the problems of that division. The Committee also notes that the Management Services Unit of the Department of the Public Service has completed a review of the Furniture Division covering certain problem areas, including stock control and staffing, that recommendations on alternative methods of stock control have been made to the Office of Public Works, that extra staff for the Furniture Division has been authorised and that the process of filling the posts by open competition is continuing.

The Committee trusts that these measures will overcome the staffing and other problems which have been affecting the Division for a considerable time.

Public Works and Buildings—Killarney National Park

Para 41

21. The Committee notes that, even though separate accounts will no longer be produced for the Bourn Vincent Memorial Park, Killarney, the usual records required for financial and stock control purposes will be maintained for Killarney National Park, of which the Bourn Vincent Memorial Park now forms part.

Defence-Armoured Personnel Carriers

Para 42

22. The Committee notes that there have been no other instances of moneys from the defensive equipment subhead being used to fund a project such as that for development of a prototype armoured personnel carrier. It also notes that the Minister for Finance is fully satisfied that the expenditure in question was within the ambit of the Vote for Defence. The Committee further notes that the Department of Defence has intimated that the question of financial return to the Exchequer from this State-funded project was fully considered and that a feasibility study of the project carried out by the Industrial Development Authority at the suggestion of the Department indicated that the benefits which would accrue to the economy and to the Exchequer included (a) balance of payments savings, (b) Exchequer savings, (c) personal and company taxation contributions and (d) development of new technical skills in Irish industry. While the Committee accepts that some or all of these benefits could be expected to accrue to the Exchequer and the economy if the company concerned went into production of armoured personnel carriers on a reasonably large scale, it suggests that the funding of the project by the Department of Defence rather than by one of the accepted State agencies would be of no significance in this matter.

The Committee still has reservations as to the method of financing this research and development project, especially if the present case was to be seen as a precedent by other Departments wishing to fund research and development projects of private concerns. The Committee could visualise problems arising regarding the control of public expenditure on such cases, especially if these concerns were in receipt of general funding from other State agencies. However, because this aspect of the matter might be regarded as one of policy the Committee does not wish to pursue it further.

The Committee reiterates the view expressed by it in its Report on the Appropriation Accounts for 1977—“that if, as a matter of policy, it was considered desirable to make provision for a research and development project in the Vote for Defence, such provision should have been made in a separate subhead, if necessary by way of supplementary estimate”. When the Accounting Officer appeared before it in connection with the Appropriation Accounts for 1978 he told the Committee that the Department would have had no objection to making provision for this project in a separate subhead and he stated that it would be the appropriate thing to do if the Department again undertook the funding of a similar research and development project. The Committee would be glad to learn whether the Minister for Finance agrees that the funding of such projects from voted moneys should be provided in separate subheads.

Lands—Farmers’ Retirement Scheme

Para 43

23. The Committee notes that, in general, the question of direct choice between sale under the Retirement Scheme and compulsory acquisition does not arise. It also notes that, whereas in relation to a holding offered for sale under the Retirement Scheme the Land Commission decides the value of the lands offered and negotiates up to that limit, in compulsory acquisition cases the Commission has to take the initiative towards acquiring the land and, following the appeals provisions available, often finds that the price payable exceeds its own valuation. The Committee further notes that the average price per acre paid by the Land Commission for Retirement Scheme lands, even allowing for the 10% premium in the years 1976 to 1979, was substantially lower than the average price paid for lands compulsorily acquired.

In regard to the re-allocation of holdings acquired under the Retirement Scheme the Committee is pleased to learn that this matter is being reviewed by the Department in an effort to match acquisitions and resales and that the EEC Council of Ministers are at present considering amendments to the Scheme, including a proposal to extend subventions from the EEC, to cover certain disadvantaged areas where lands released under the Retirement Scheme are disposed of otherwise than to a development farmer. The Committee welcomes the information that, when the Council of Ministers have finalised their review, it will be possible to adopt a more critical approach to the Scheme, including, if necessary, the refusal of offers of land.

The Committee accepts that the responsibility of the Accounting Officer for the issue of moneys for land purchase must be construed in the light of the powers which are reserved to the Land Commissioners under Section 12 of the Land Act, 1950 and that he does not exercise detailed control over such matters as the price payable for land or the purchase and re-allocation of individual holdings. It was precisely this limitation of the Accounting Officer’s control which prompted the Committee to raise the matter in the first instance.

As the Accounting Officer is not accountable in regard to some aspects of expenditure on land purchase the Committee considers that someone else should be so accountable if it is not to be restricted in its scrutiny of this expenditure and it would welcome the views of the Minister for Finance on this question.

Health—Rebates and Discounts applicable to General Medical Service Prescriptions

Para 44

24. The Committee will await information on the results of the investigations being carried out by consultants engaged to examine the level of rebates and discounts provided for under the existing arrangements for the supply of drugs and medicines for the Health Services.

Health—Employment of Full-time Pharmacists by Health Boards

Para 45

25. The Committee notes that four Health Boards have full-time pharmacists on their staffs whose duties include the supervision of the arrangements under which doctors in certain circumstances are entitled to dispense drugs and medicines under the General Medical Services Scheme and that it is hoped that appointments will shortly be made in the remaining Health Boards through the Local Appointments Commission. The Committee wishes to be informed when full-time pharmacists have been appointed to these remaining Health Boards.

Social Welfare—Control Procedures

Para 47

26. The Committee is pleased to learn that the Minister for Finance has been informed by the Department of Social Welfare that the survey carried out at the request of the Committee has shown that there are no areas in the Department where prescribed control procedures are not being followed.

Social Welfare—Children’s Allowance Orders

Para 48

27. The Committee will await information on the proposals being formulated as a result of its request to have Children’s Allowance Orders processed as if cash were involved.

When the Accounting Officer gave evidence before the Committee in connection with the 1978 Appropriation Accounts he stated that the proposals referred to had not yet been finalised and he outlined some of the problems which would arise from a full implementation of the Committee’s recommendations. The Committee will await the formal proposals before commenting further and it trusts that this information will be available to it shortly.

General

Para 51

28. The Committee is pleased to note that the necessary improvements have been made to the computer system in the Department of Social Welfare in order to overcome difficulties in the reporting and recording of overpayments and that the accommodation problems in the Chief State Solicitor’s Office have been resolved.

REPORT DATED 29 NOVEMBER 1979

Defence—Hireage Charge for Army Helicopters

Para 40

29. The Committee notes that, in future, recovery of the cost of helicopter ambulance missions will not be sought from the local authorities concerned but that the relevant transactions will instead be covered by notes in the Departmental Estimates and Appropriation Accounts. The Committee agrees with this procedure. It also notes that steps have been taken to review the hireage charges for army helicopters on an annual basis.

Labour—Employment Incentive Scheme

Para 41

30. The Committee notes that the Accounting Officer has reported that he is satisfied that adequate advice from official sources is available for small firms to enable them to deal competently with the technicalities of the Employment Incentive Scheme and that such firms are availing of the Scheme to a satisfactory extent.

Labour—Grant in Aid to AnCO and Parliamentary Review of Accounts of Non-Trading State Bodies

Para 42

31. The Committee notes that the possibility of establishing a Joint Committee on non-trading State-sponsored bodies was considered when the committee on commercial State-sponsored bodies was being established and that the matter has been reviewed on several occasions since then. It also notes that the Minister for the Public Service considers that, before a decision is taken in the matter, it would be desirable to have experience of the working of the committee on commercial State-sponsored bodies which has not yet completed investigation of all the bodies falling within its terms of reference. The Committee considers that the experience to date of the working of the committee on commercial State-sponsored bodies, which has already furnished eleven reports, should be sufficient to enable a decision to be made in regard to the non-trading bodies and it urges that this be done at an early date.

Office of the Revenue Commissioners—Change in Certain Control Procedures

Para 43

32. The Committee notes that all Accounting Officers are being reminded of their obligations to ensure that when control procedures are being altered the officers responsible for implementing the new procedures should fully understand the new systems.

Office of the Revenue Commissioners—PAYE Income Tax

Para 44

33. The Committee welcomes the assurance that all available resources, including legal proceedings and other collection measures, are utilised to the full to ensure that outstanding PAYE Income Tax deducted from the remuneration of employees is paid over to the Revenue Commissioners by employers (See, however, paragraph 61).

The Committee notes that from 1978 information regarding PAYE underpayments is being furnished to the Comptroller and Auditor General in conjunction with the annual Appropriation Account.

Office of the Revenue Commissioners—Collection of Interest on Arrears of PAYE Income Tax and Arrears of VAT

Para 45, 46

34. The Committee notes that the Minister for Finance is advised by the Revenue Commissioners that, in exercising their powers under the “care and management” provisions of the legislation governing the payment of PAYE Income Tax and VAT, they have felt obliged to have regard to the statements made by the Minister for Finance in Dáil and Seanad Éireann when the relevant legislation was being introduced, statements which clearly indicate that it was not the intention of the legislation that large amounts of interest at very high rates should be collected from the persons concerned but that such interest was to be considered more as a penalty than as a method of compensating the Revenue Commissioners for outstanding accounts.

While the Committee appreciates that the non-collection of interest due does not imply remission but rather deferment, it is concerned lest circumstances might arise in which non-collection could result in de facto remission. If, for example, a taxpayer liable for interest on overdue tax in a particular year met his tax ability—as distinct from his interest liability—in the years immediately following and then ceased to be liable for tax in subsequent years, would the outstanding interest be collected and, if not, would the non-collection be brought to the attention of Dáil Éireenn as is done in the case of tax not collected?

The Committee would point out that the practice being presently followed by the Revenue Commissioners in regard to the non-collection of interest on overdue tax would appear to be diametrically opposed to that followed by them in the past as evidenced by the replies of a former Accounting Officer to the Committee which examined the Appropriation Accounts for 1973/74 (Questions 456-458) and the Committee would welcome the further observations of the Minister for Finance on the matter.

There is another aspect of this case, of wider significance, which concerns the Committee. It relates to the assertion by the Revenue Commissioners that, in exercising their powers in regard to the collection of taxes and interest on overdue taxes, they have felt obliged to have regard to the statements of the Minister for Finance in Dáil and Seanad Éireann when the relevant legislation was being introduced. The Committee was under the impression that the interpretation of legislation is normally a function of the Courts who, when interpreting a particular statute, would not take cognisance of statements made by the responsible Minister when introducing the relevant Bill or at any subsequent stage during its progress through the Oireachtas. The Committee would, therefore, welcome the further observations of the Minister for Finance on this matter also and, in particular, it would like to learn whether the advice of the Attorney General has been obtained in regard to the present procedure of the Revenue Commissioners in relation to the non-collection of interest on overdue tax. The Committee would also like to be informed regarding the amount of interest on overdue PAYE and VAT the collection of which is not being pursued. The Committee welcomes the information that the Minister is asking the relevant Departments to remind State-sponsored bodies under their aegis of their obligation to pay over PAYE Income Tax promptly.

Office of the Revenue Commissioners—Pay-related Social Insurance Contributions

Para 47

35. The Committee is pleased to learn that, in regard to the failure of employers to pay over to the Revenue Commissioners social insurance contributions which they have deducted from the remuneration of employees, there is statutory authority to treat such contributions as paid for the purpose of any right to benefit under the Social Welfare Acts of the employees concerned and that entitlement to benefit is not affected unless such failure is with the consent or connivance of employees or due to any negligence on their part.

The Committee welcomes the assurance that all the resources available including legal enforcement and other collection procedures will be utilised to the full to ensure that amounts outstanding are collected.

Environment—£1,000 Housing Grants

Para 48

36. The Committee notes that the drafting of Regulations under the Housing (Miscellaneous Provisions) Act, 1979, is at an advanced stage. The Committee would like to be informed when these regulations are finalised.

The Committee also notes that, in order to ensure that only persons fully eligible receive the grants, urgent consideration is being given to a number of measures, including arrangements with other Departments, which may be able to assist in further developing the system of checks and that it will be informed of developments.

When the Accounting Officer was before the Committee in connection with the 1978 Appropriation Accounts he stated that a review of the legislation and of the regulations was proceeding in order to ascertain whether there was any need to have them amended. He also stated that, with the approval of the Department of Finance, an arrangement had been made with the Revenue Commissioners whereby grant applicants would be required to furnish a certificate that the person concerned or the person’s spouse had not claimed income tax relief in respect of interest paid on moneys borrowed to purchase or build a new dwelling and that consideration was being given to the question of extending this control procedure to Britain by asking the Revenue authorities there to furnish such certificates. He added, however, that he did not consider that this kind of extra control could be extended further afield.

The Committee welcomes the new control procedure being introduced, if somewhat belatedly, to limit these grants to first time owners as the scheme intends. It accepts that it would not be realistic to seek to extend this new procedure further. It is, however, at a loss to understand why the difficulty of establishing “first time ownership” was not adverted to when the details of the grant scheme were being drawn up in the first instance.

Social Welfare—Computerised Payments System

Para 49

37. The Committee notes the comments which have been received from the Department of the Public Service. It would accept the validity of the first comment that computer systems which have been properly designed and tested should provide more positive and comprehensive controls than the manual systems which they replace. Unfortunately, not all computer systems appear to be properly designed and tested and the Committee would suggest that a computer system introduced without proper design and testing is very likely to cause more problems that it solves.

In regard to the second comment that when a computer system is being designed it is essentially for the operating Department or agency to satisfy itself that adequate checks and controls have been built into the system so as to meet its own particular needs, the Committee wonders whether there is a suggestion here that the Department of the Public Service does not regard itself as having any major responsibility in this area. While the Committee would accept that it is for the operating Department or agency itself to specify its needs in regard to the tasks to be performed by the computer and to insist that the system being installed is capable of meeting them, it would have some doubts as to whether such a Department or agency would have sufficient expertise, at the design stage, to foresee the potentialities for irregularity or fraud which might arise when the system became operational. The Committee considers that within the Public Service there should be some central agency to which Departments could refer and on which they could rely for expert guidance in the event of operational or control difficulties with their EDP systems, and the Department of the Public Service appears to be the obvious body to act in this capacity. The Committee has in recent years been hearing of some of the tasks performed by the Central Data Processing Services of that Department but it has no clear idea of the overall role, if any, of that section in relation to the Public Service as a whole and it would welcome information on this matter.

The Committee would accept that, as stated in the third comment of the Department of the Public Service, when properly designed and tested checks and controls have been incorporated in the computer system, it is the responsibility of the operating Department or agency to ensure that these checks and controls are applied effectively.

Garda Síochána

Para 50

38. The Committee welcomes the information that the situation with regard to the processing of notices issued under Section 103 of the Road Traffic Act, 1961 has been brought under control and that in 1977 and 1978 notices not followed up represented only approximately 3% of the total number of notices issued. The Committee trusts that the level of performance which has now been achieved will be maintained and that it will not have occasion to refer to this matter in future.

Courts—District Court Offices

Para 51

39. The Committee notes that the number of warrants in respect of unpaid fines due for issue from District Court Offices had been reduced from 57,000 at 31 December 1977 to 23,000 at 31 October 1979. It also notes that the figure of 23,000 would include warrants issued in September and October 1979 which, because of the normal time allowed for payment of a fine, could not be regarded as in arrears and that, as the average number of warrants to be issued each month would be of the order of 8-10,000, it must be expected that about 15-20,000 cases will be awaiting issue of warrants at any given time.

The Committee will be glad to be kept informed of developments.

Public Works and Buildings—Deduction of Income Tax from Rent Payments

Para 52

40. The Committee notes that the remaining balance of the arrears of income tax on rent was paid over to the Revenue Commissioners in January 1980. It trusts that such tax will be paid over promptly in the future.

Public Works and Buildings—Problems of Staffing and Accommodation

Para 53

41. The Committee is concerned to learn that, despite the best endeavours of the Civil Service Commission to fill vacancies in a number of Departments and Offices, recruitment difficulties are still continuing in certain professional grades. The Committee notes that, in regard to the shortage of technical staff in the Office of Public Works, the underlying cause of the difficulty in recruitment is stated to be a shortage of engineers of all categories which is being experienced in both the public and private sectors of the economy. It also notes that this matter is the subject of a special inter-departmental examination and that in the meantime the Civil Service Commission is continuing its efforts to fill all vacancies in professional and technical grades, particularly those in the Office of Public Works.

The Committee wishes to be informed of the outcome of the inter-departmental examination and of the progress made to fill the vacancies in the Office of Public Works.

Posts and Telegraphs—Bank Account

Para 54

42. The Committee welcomes the assurance of the Minister for Finance that it remains his policy that the accounts of Government Departments should, as far as possible, be kept at the Central Bank of Ireland.

The Committee accepts the argument put forward for retaining the account of the Minister for Posts and Telegraphs at a commercial bank and notes that any change is unlikely in the foreseeable future. It also notes the notional offsetting of imputed interest on the current account balances against the charges which the bank could make for its services but does not. The Committee welcomes the information that every effort will continue to be made to keep the balances on the account to a minimum.

The Committee is grateful for the memorandum received from the Accounting Officer of the Department of Finance clarifying the reference in the Minute of the Minister for Finance to the inter-departmental study group. It notes the circumstances in which this group was set up and that, having adverted to the ongoing operational and policy considerations which appeared to preclude the re-location of the Post Office account in the Central Bank, it had decided not to pursue the matter further. The Committee also notes that it is intended that the banking arrangements for the postal service will be looked at again in some detail by the Department of Posts and Telegraphs in connection with the preparation for the transfer of the service to a State-sponsored body.

Secondary Education—Registration of Title to the Sites of Comprehensive and Community Schools

Para 55

43. The Committee notes the progress which has been made to have sales of sites closed and title registered in these cases.

The Accounting Officer informed the Committee in May 1980 that in one case, because of a problem relating to a boundary, the sale of a site had not yet been closed. He also stated that the number of cases awaiting registration of title had been reduced to nine. The Committee urges that every effort be made to complete the outstanding cases as quickly as possible.

Miscellaneous Expenses—Payments to the Irish Trust Bank

Para 56

44. The Committee notes that the Minister for Finance is satisfied as to the validity of the recoupment to the Central Bank from voted moneys of £1.8 million made available by the Bank to the liquidator of the Irish Trust Bank on behalf of the Minister for Finance. The Committee also notes that the need for validating legislation only arises in connection with that portion of the funds provided by the Bank itself to the liquidator and it wishes to be informed of the progress being made with the enactment of this legislation.

Industry, Commerce and Energy—National Film Studios of Ireland Limited

Para 58

45. The Committee notes that legislation has been introduced in Dáil Éireann providing for the setting up, operation and financing over the next four years of the Irish Film Board which will be responsible for the promotion and development of film making in Ireland.

Industry, Commerce and Energy—Petroleum and Other Minerals Development Act, 1960

Para 59

46. The Committee is pleased to learn that it has now been decided that any transactions of the type referred to in the Committee’s Report (i.e. not involving the payment of the cash to the Department) arising from the granting of exploration licences will be made the subject of a specific note in the relevant Appropriation Account and will also be included in the half-yearly report which Section 57 of the Petroleum and Other Minerals Development Act, 1960 requires the appropriate Minister to lay before the Houses of the Oireachtas.

The Committee also notes that it is not considered necessary in the circumstances that the existing legislation needs to be amended specifically in regard to these transactions but that the matter will be noted for consideration if and when any legislative changes become desirable for any other reasons.

PART II—PARTICULAR ACCOUNTS

OFFICE OF THE ATTORNEY GENERAL

23-27

47. The Law Reform Commission, a statutory body established under the Law Reform Commission Act, 1975, is required by Section 9 of the Act to keep accounts of all moneys received or expended by it and to submit these accounts annually to the Comptroller and Auditor General for audit prior to their presentation to the Minister for Finance, who shall cause copies to be laid before each House of the Oireachtas. Provision is made in the vote for the Office of the Attorney General for a grant to the Commission to enable it to perform its functions.

The Accounting Officer informed the Committee that, while he monitors the issue of voted moneys to the Commission, he exercises no control over its expenditure. The Committee is of the opinion that the provision of funds for the Commission in what may be regarded as an ordinary subhead, as distinct from a grant-in-aid subhead, places the Accounting Officer in a rather invidious position in as much as he is accountable for expenditure over which he exercises no real control. While, as a general rule, it considers that the grant-in-aid method of financing should not be used unnecessarily, nevertheless, having regard to the status of the Law Reform Commission and the statutory requirements regarding the keeping of its accounts, their audit and their presentation to the Houses of the Oireachtas, the Committee recommends that moneys voted for the Commission should be provided in future by way of grant-in-aid.

PUBLIC WORKS AND BUILDINGS

48. Agreed fees amounting to £49,500 were paid to architects in respect of a set of plans prepared by them for a new headquarters for the Department of Defence but subsequently abandoned. The Comptroller and Auditor General considers that, in the circumstances, the specific sanction of the Department of Finance should be sought for this payment, especially in view of the fact that the architects could expect to receive the usual fees when the project got under way on the basis of a further set of plans prepared by them.

The Accounting Officer informed the Comptroller and Auditor General that the plans in respect of which the payment of £49,500 had been made had met the requirements of the Commissioners of Public Works and had satisfied the Department of Defence and also the Dublin Corporation, as Planning Authority. However, subsequent action by the Corporation, arising out of their intention to widen a road adjoining the site for this project and their refusal to grant an adequate site extension to the Commissioners, necessitated a radical redesign of the building scheme which could not have been foreseen. The Commissioners, accordingly, considered that the payment of fees in respect of the abandoned plans arose in the normal course.

The Accounting Officer, in evidence, informed the Committee that the original plans for this building were prepared after consultation with the Corporation, who subsequently altered their plans on road alignment. He was not sure, however, whether the road in question appeared in the Corporation’s draft development plan.

The Committee is gravely dissatisfied that an apparent lack of consultation or co-operation between the Dublin Corporation and the Office of Public Works resulted in the payment of public moneys amounting to £49,500 in respect of plans which had to be abandoned. It understands that normally major road proposals in the Dublin Corporation development plans are planned well in advance and it is somewhat surprised to learn that the change in the road alignment in the present case was not discovered by the Office of Public Works before the Architect’s plans which had to be abandoned had been drawn up. It would welcome further information on the matter. In particular, it would like to learn whether the road in question was included in the Corporation’s development plan; the date on which the Corporation agreed the set of plans which later had to be abandoned; the date on which the Corporation decided to change its plans regarding the road; the date on which the Office of Public Works became aware of the change in the Corporation’s plans; and the date on which the architects were instructed to cease work on the plans abandoned.

The Accounting Officer, in a written submission, informed the Committee that the estimated cost of this project at March 1980 prices was £7.318 million, exclusive of fees and fitting-out costs. The Committee notes that the original estimated cost, on the basis of the set of plans finally accepted, was £4.3 million and it would welcome information on the main factors which contributed to the considerable increase in the estimated cost of the project. The Committee also wishes to learn whether a tender has yet been accepted for this project and, if so, the cost of the project on the basis of the accepted tender and the fees payable to the architects on the basis of that cost.

49. The Committee was surprised to learn that an agreement had not been signed by the Board of the National College of Art and Design nor had any rent been paid by the Board in respect of a tenancy of premises at Kildare Street, Dublin, which had been granted to it by the Commissioners of Public Works as from 1 May 1972. The Accounting Officer explained that the delay in executing the agreement in this case was due principally to continuous pressure on the Property Division in the Office of Public Works, as a result of which a block of long standing arrears had built up and some files, including that relating to the National College of Art and Design tenancy, had been misplaced. He stated that the staffing position in the Property Division had since been improved and the arrears generally had been overtaken.

The Committee is glad to learn that the Accounting Officer considers that the position in the Property Division is satisfactory. While failure to complete a tenancy agreement and the consequential non-collection of rent in the present case did not result in any loss to the Exchequer, as both parties to the transactions are funded in the main from voted moneys, such a loss might arise from a delay in signing an agreement in respect of a tenancy granted to an agency not so funded. In this connection the Committee wishes to be informed whether any such loss did in fact arise in any of the cases which formed the block of long standing arrears mentioned by the Accounting Officer.

The Committee also wishes to learn whether the agreement in respect of the tenancy of the premises at Kildare Street has yet been signed by the Board of the National College of Art and Design.

Payover of Deductions From Staff Salaries

Qns 104-107

50. Income tax and pay-related Social Insurance contributions deducted from the salaries of the staff of the Office of Public Works in the years 1973-74 to 1976-77 had not been paid over to the Revenue Commissioners by the 31 December 1978. The Accounting Officer informed the Comptroller and Auditor General that, because of staffing difficulties in his Office, it was not possible to establish the amounts due to the Revenue Commissioners and the latter were reluctant to accept a payment on account pending a final settlement.

The Accounting Officer, in evidence, informed the Committee that nearly all the arrears due to the Revenue Commissioners had occurred in 1975-76 when the staff numbers in his office were not adequate to cope with changes made in the system of paying over deductions to the Revenue Authorities. He stated that, while the arrears were being overtaken on overtime, there was an abnormal turnover of staff in the Accounts Branch which was causing problems. An organisation officer recently appointed would look at the situation there and the introduction of automatic data processing to deal with some of the work was under consideration.

The Committee notes that the failure to pay over the tax and Social Insurance deductions is attributed to staffing difficulties in the Accounts Branch. It recalls that, when the Committee of Public Accounts in its Report on the Appropriation Accounts for 1977 had occasion to criticise the failure of the Office of Public Works to pay over to the Revenue Authorities tax deducted from rent payments made to outside agencies, staffing problems in the Accounts Branch were also pleaded by the Accounting Officer as the main cause of the failure. The Committee must express its concern at the persistence of these staffing difficulties and it would urge that the Commissioners of Public Works, in association with the Department of the Public Service, take all necessary steps to solve them. Failure to solve such problems in their early stages when a solution would be a relatively simple matter only creates bigger problems which, if allowed to remain for any considerable time, may eventually prove insoluble in spite of the expenditure of much time, as has no doubt happened in the present case not only in the Office of Public Works but also in the Office of the Revenue Commissioners.

The Committee accepts the claim made by the Accounting Officer that the failure of the Office of Public Works to pay over tax and Social Insurance deductions to the Revenue Authorities did not result in any loss to the Exchequer in as much as his Office had the use of the deductions not paid over and was thereby able to reduce its drawings on Exchequer funds. It cannot, however, admit this as an argument which justifies failure to pay over the deductions promptly. The Committee has in the past been severely critical of private employers who failed to pay over promptly tax and Social Insurance deductions and has occasion to refer to this matter again in paragraph 61 of this Report. No doubt some of these employers would also plead staffing difficulties; others certainly would plead cash flow problems which do not confront the Office of Public Works.

The Committee must insist that Departments and Offices comply strictly at all times with the regulations regarding the prompt pay-over of tax and Social Insurance deductions.

FISHERIES

Claims for EEC Grants

Qns 124-127

644-645

51. Improvement works on three fishery harbours, towards the cost of which grants from FEOGA funds had been approved in 1974, were completed in 1974, 1976 and 1977, respectively, at a total cost of £530,000. The Comptroller and Auditor General drew attention to the fact that there was a delay in submitting claims to the European Commission for the grants approved.

The Accounting Officer, in evidence, informed the Committee that these claims had been submitted to Brussels in December, 1979 but that payment had not yet been received. The claims, as far as the Department was aware, were all in order and payment was expected in 1980. He explained that the delay in submitting these claims arose largely from the difficulty of agreeing the cost figures with the Office of Public Works, which had carried out the improvement works on behalf of the Department of Fisheries. The figures were not finally agreed until the latter half of 1979 and the claims were forwarded to Brussels as soon as the agreed figures were available.

The Committee takes a serious view of the delays which occurred in submitting grant claims to the European Commission in the case of these fishery harbour improvement works especially as there was a danger that EEC grant moneys could have been lost to the Exchequer because of these delays. It is at a loss to understand how delays of from two to five years could occur in agreeing the figures in respect of the cost of the improvement works at the three fishery harbours. It would hope that these delays are not due to deficiencies in the financial controls or records of the Department of Fisheries and Forestry or of the Office of Public Works and it would like to have an assurance in this matter.

The Committee found it necessary to refer to the danger of such losses in its Report on the Appropriation Accounts for 1977 and it is concerned that Government Departments and Offices might not be giving the submission of claims to the European Commission the high priority it deserves. The Committee would like to be informed of the arrangements in existence to monitor the submission of claims for grants from the various funds of the European Commission. It would also like to be informed whether any such grants were lost to the Exchequer because of the late submission of the relevant claims.

In this connection, it notes that a claim by a Vocational Education Committee, made through the Department of Education, for Community aid towards the cost of training, retraining and resettlement of workers was initially rejected by the EEC because it had not been submitted by the closing date.

FORESTRY

Provision of Assistance to Irish Board Mills Limited (In Receivership)

Qns 137-144

52. Following a Government decision that temporary funds be made available to enable Irish Board Mills Limited, which was in receivership from 28 September 1978, to be maintained as a going concern up to 31 December 1978, a Supplementary Estimate to provide the necessary funds was passed by Dáil Éireann in December 1978. In anticipation of the passing of this estimate, however, funds totalling £350,000 were paid to the Receiver of the company on foot of bills of exchange drawn on and accepted by the Department of Fisheries and Forestry. On the passing of the Supplementary Estimate the sum of £350,000, with interest amounting to £17,172, was repaid to the Industrial Credit Company and a further sum of £200,000 was paid to the Receiver from voted moneys.

The Comptroller and Auditor General expressed doubts as to whether the funding of this private company came within the ambit of the Vote for Forestry and he was informed by the Accounting Officer that section 9 of the Forestry Act, 1946 empowered the Minister for Fisheries and Forestry to aid in the carrying on of woodland industries. The Accounting Officer, in evidence, informed the Committee that the Attorney General had advised that the giving of assistance to Irish Board Mills Limited came within the definition of aiding in the carrying on of a “woodland industry”. The Committee, accordingly, accepts that the temporary funding of Irish Board Mills Limited came within the ambit of the Vote for Forestry.

A more fundamental aspect of this transaction is the manner in which the £350,000 paid to the Receiver was raised. The Comptroller and Auditor General pointed out that, while this money had been paid to the Receiver by the Industrial Credit Company Limited, it had, in fact, been borrowed by the Department of Fisheries and Forestry which had accepted bills of exchange drawn on it by the Industrial Credit Company Limited. The Comptroller and Auditor General had two serious criticisms to make of this transaction. In the first place the Department of Fisheries and Forestry had no authority to borrow and secondly, having borrowed for Exchequer purposes, without authority, the Department failed to pay the proceeds into the Central Fund, as required by Article 11 of the Constitution, but instead arranged for them to be issued for departmental purposes.

The Accounting Officer, who accepted that his Department had no specific authority to borrow, informed the Committee that the course adopted in this case was one of expediency. The Government had given a direction that Irish Board Mills Limited should be funded temporarily and, following consultation with the Department of Industry, Commerce and Energy and the Department of Finance, the Department of Fisheries and Forestry sought means of making the necessary funds available. Section 9 of the Forestry Act, 1946 empowered the Department to provide the funds but there was no provision for such funds in the Vote for Forestry. With the consent of the Department of Finance the funds were borrowed from the Industrial Credit Company Limited by the acceptance of bills of exchange drawn on the Department. The Accounting Officer added that the Department did not have any other means of getting the necessary funds; they had to be borrowed pending the passing of the necessary Supplementary Estimate.

The Committee takes a very serious view of the action taken by the Department of Fisheries and Forestry in this case. Borrowing for Exchequer purposes has long been considered the prerogative of the Minister for Finance alone and even he requires the prior authority of the Oireachtas for such borrowing and, having so borrowed, he is required to pay the proceeds into the Central Fund unless he is specifically authorised by statute to do otherwise. The Committee appreciates the difficulty in which the Department of Fisheries and Forestry found itself, in as much as the responsibility was placed on it of complying with the Government decision and of finding the funds to do so. The Committee cannot, however, accept that this was any justification for the course of action taken. The Committee wonders whether, if the Supplementary Estimate had been taken as soon as Dáil Éireann resumed after the Summer recess of 1978, there would have been any need to borrow moneys to fund the Receiver of Irish Board Mills Limited.

In so far as it was found necessary to borrow moneys the Committee is at a loss to understand why the moneys were not borrowed by the Minister for Finance who was already authorised to borrow for Exchequer purposes.

The fact that the action taken by the Department of Fisheries and Forestry had the prior approval of the Department of Finance adds to the seriousness of this matter. Unauthorised borrowing by Departments, especially when the proceeds of such borrowing are used for departmental purposes, can only seriously undermine the control of the State finances. The Committee would have expected that the Department of Finance, as the Department having overall responsibility for such control, would be ever vigilant in the matter.

In so far as the Committee is aware this is the first occasion on which unauthorised borrowing for Exchequer purposes has been brought to the notice of the Public Accounts Committee and the Committee trusts that this is an isolated case. The Committee requests that the position in regard to borrowing for Exchequer purposes should be brought to the notice of all Accounting Officers and that they in turn be requested to bring it to the notice of all officers on their staffs who are likely to be concerned with such matters.

Recovery of Moneys Issued to Receiver

53. The funds, amounting to £550,000, advanced to the Receiver of Irish Board Mills Limited (See paragraph 52) were made available to him on the understanding that the surplus on trading in goods manufactured with the use of these funds should be used in the repayment of the funds together with interest thereon should the surplus exceed the funds advanced. The Comptroller and Auditor General informed the Committee that up to March 1980 the sum repaid by the Receiver was £251,000 and that this sum had been repaid on the understanding that all or any of it might be reclaimable by the Receiver until such time as the final account had been determined and agreed. He added that the sum of £251,000 represented the balance of the State funds remaining after the deficiency on trading had been met and provision made for other expenses of the Receiver.

The Accounting Officer, in evidence, informed the Committee that the final account had not yet been received from the Receiver but that it was anticipated that the amount which would be recovered by the Department was not likely to exceed £300,000.

The Committee urges that this matter be brought to an early conclusion and wishes to be informed when this has been done.

Sales of Timber

Qns 148-159

54. Because of difficulties in the timber trade in 1974 the Department of Fisheries and Forestry, with the approval of the Minister for Finance, introduced a system of credit sales which allowed credit-worthy customers to purchase timber on a two-month credit basis instead of the normal cash basis.

The Comptroller and Auditor General drew attention to sums amounting to £186,000 which were still outstanding at 1 February 1979 in respect of timber sold in 1977 and 1978 to three companies, two of which were in receivership, one being Irish Board Mills Limited mentioned in the previous paragraphs.

In evidence, the Accounting Officer accepted that the debt due by Irish Board Mills Limited appeared to be irrecoverable and, in regard to the debt due by the second company in receivership, he informed the Committee that the affairs of this Company were still awaiting finalisation and he could not give any indication as to what the outcome might be. In regard to the third company mentioned by the Comptroller and Auditor General, the Accounting Officer stated that his Department was still dealing with this company as a customer and that an arrangement had been made to reduce its indebtedness weekly.

The Comptroller and Auditor General also drew attention to a debt of £16,377 due in respect of timber issued to a Company from a State forest in November 1977 without authority. The Accounting Officer told the Committee that this timber was released by an officer of a local forest centre without authority from headquarters. He added that it was not anticipated that the amount due would be recovered.

The Committee accepts that the difficult times being experienced by the timber industry creates problems for the Department in its efforts to collect debts outstanding for timber sold. It would, however, urge that these cases be brought to a conclusion as soon as possible either by the collection of the moneys due or by write off, with the sanction of the Minister for Finance, where collection is not possible. The Committee expects that any sum so written off will be noted in the Appropriation Account.

INDUSTRY, COMMERCE AND ENERGY

Qns 198-200

55. Under the Export Guarantee arrangements, which he made in accordance with the provisions of section 2 of the Insurance Act, 1953 (as amended), the Minister for Industry, Commerce and Energy (now the Minister for Industry, Commerce and Tourism) issues, through an insurance company acting as his agent, policies of export credit insurance. Claims from exporters under the policies are met in the first instance by way of advances from the Central Fund which are later repaid from voted moneys.

Claims met in 1977 included an amount of £169,961 in respect of default in instalment payments for equipment supplied by an Irish company to two Government Ministries in Sudan. The Accounting Officer informed the Comptroller and Auditor General that, while the Minister’s maximum liability in respect of claims arising in this case could amount to £1,069,007 over the period from 1977 to 1980, each successive default in payment is made the subject of legal process in order to secure payment. He also said that approaches had been made to the Sudanese Government with a view to expediting payments.

The Accounting Officer, in evidence, informed the Committee that the Department enters into a considerable volume of business under the Export Guarantee arrangements and a very substantial part of this business is, in the nature of things, high risk, Occasionally, therefore, cases occur in which there is a default or a delay in payment. He added that the Department would not regard the arrears in this case as amounts to be written off because it was involved in discussions with the Sudanese Government with a view to the rescheduling of the amounts outstanding and it would expect to recover a significant part of them.

The Committee welcomes the assurance of the Accounting Officer that the Department expects to recover a significant part of the outstanding instalment payments in this case and wishes to be kept informed of progress made with their recovery.

56. The Insurance Company, which acts as the Minister’s agent in the issue of policies under the Export Guarantee arrangements collects the premium income in respect of the policies and retains an agreed percentage to cover its administrative costs and expenses.

In 1977, in addition to the agreed percentage of premium income, the company retained a sum of £25,289 for payment to a firm which had taken over the business of an insured exporter in receivership and which had agreed for this sum to undertake the servicing of equipment carrying a service guarantee given by the insured exporter before going into receivership.

The Comptroller and Auditor General inquired whether this payment had the specific sanction of the Department of Finance as it did not appear to relate to a default in payment by a foreign purchaser and he was informed by the Accounting Officer that the costs involved were met by the insurance company out of premium income with his Department’s approval under the terms of the agreement signed with that company whereby the Minister could settle with the company the amount which it could retain towards administrative costs and expenses. The Accounting Officer also stated that the sum of £25,289 was mainly a negotiated figure calculated on the basis of the estimated cost of servicing machines carrying a service guarantee and that any default in the provision of that service could have put at risk the balance of £222,000 of insured loss and thus have jeopardised the Minister’s position as ultimate insurer. The Accounting Officer added that the deduction of management expenses was regarded as normal under the terms of the scheme and there was no basis on which the action in this case could be regarded as a departure from the normal practice which would require the specific sanction of the Department of Finance.

The Accounting Officer, in evidence, informed the Committee that, as the company which had made the machines involved in this case had gone into liquidation, any rights the purchasers would have had against them would have ceased on liquidation. The firm which took over the business without necessarily taking over its liabilities would have been free to decide that they would not become involved in the servicing of the machines and, if they had decided not to become involved, the purchasers who owed money for the machines would probably not have discharged their obligations. As far as the Department was concerned it was a question of paying £25,289 to have the servicing carried out in the expectation of recovering the outstanding balance of £222,000 which in fact had since been recovered.

The representative of the Department of Finance when questioned by the Committee as to the attitude of his Department towards this case was unable to offer an opinion as they had not been approached in the matter nor had they been furnished with any details of the transaction.

The Committee is glad to learn that the outstanding balance of £222,000 has been recovered in this case but it would like to be satisfied that it was intended that payments of the type made in this case would be met out of premium income. While it would hope that similar cases would not arise in the future it considers that, lest they might, it would be prudent to remove any doubt about the interpretation of the Scheme and it recommends that full particulars of the present case be brought to the attention of the Department of Finance.

Kilkenny Design Workshops Limited

Qns 214-215

57. The Committee discussed with the Accounting Officer the degree of supervision exercised by the Department over the activities of Kilkenny Design Workshops Limited especially in relation to the income generated by its design activities. The Accounting Officer explained that the Department would not seek to control the activities of such a company in great detail and so far as the activities in general were concerned would not expect it to be profit-earning. He stated that the company had been set up to fill a need which had been highlighted by international consultants who carried out a design study and it was always expected, therefore, that there would be a net outgoing of public funds which would be rewarded in terms of exports by firms availing of the design service provided. The Accounting Officer accepted, however, that industry was being provided with a good service and that there might be a case for suggesting to the company that it should consider whether a higher level of income could be attained from the design fees charged. Agencies associated with the Department had been exhorted in recent years to maximise their income and, while it was not possible to increase fees in all cases because of the danger of a consequential reduction in business, the Accounting Officer undertook to examine the position in relation to Kilkenny Design Workshops Limited.

The Committee would like to be informed of the outcome of this examination.

GENERAL

Reconciliation of Outstanding Payable Orders

Qns 237-238

479-480

593-598

58. The Comptroller and Auditor General drew attention to the failure of the Departments of Justice and Education to reconcile the figures for outstanding payable orders as calculated from departmental records with the figures furnished by the Office of the Paymaster General through its computerised system in respect of the various votes administered by these Departments. This computerised system was designed to provide Departments with monthly returns listing for each of the votes the payable orders cashed, the orders cancelled and the orders outstanding. For various reasons discrepancies can arise between the figure for outstanding orders furnished by the Paymaster General’s Office and the corresponding figure calculated by a Department from its own records. It is, therefore, essential that monthly reconciliations be carried out by Departments in order to establish the accuracy of the balances to be surrendered as shown in the relevant Appropriation Accounts. Because of the failure of these two Departments to effect the necessary reconciliations the Comptroller and Auditor General was unable to satisfy himself as to the accuracy of these balances in the case of the votes concerned.

The Comptroller and Auditor General was informed by the Accounting Officer for the votes administered by the Department of Justice that the Department had carried out reconciliations in respect of these votes for 1977 and that monthly reconciliations are now being carried out.

In regard to the discrepancies which arose prior to 1977, the Accounting Officer stated that because of costs involved, the absence of any guarantee of complete reconciliation and because the staff required to carry out the reconciliations would have to be transferred from other essential accounts work, he did not consider that further efforts to effect a reconciliation would be justified. He added that a direction had been sought from the Department of Finance on this matter.

The Comptroller and Auditor General informed the Committee that the Minister for Finance had directed that, in relation to the pre-1977 discrepancies, the relevant entries in the records of the Department of Justice should be adjusted on the basis of the figures furnished by the Paymaster General’s Office.

The Accounting Officer for the votes administered by the Department of Education informed the Comptroller and Auditor General that the discrepancies in the case of these votes go back for a number of years and are believed to have arisen mainly from the failure in the Paymaster General’s Office to cancel out of date orders which had been replaced by other orders.

He stated that the position had been aggravated by the bank strikes in 1970 and 1976 and he added that, while efforts to reconcile the discrepancies were continuing, it was difficult to visualise a complete reconciliation being effected.

The Accounting Officer, in evidence before the Committee, agreed that the position in regard to the reconciliation of payable orders was unsatisfactory. In pre-computerisation days there were no problems in effecting a complete reconciliation between the Department’s figures and those furnished by the Paymaster General’s Office. Following the introduction of computerisation the number of staff employed in the Department in the issue of payable orders was reduced but this meant that there was a shortage of staff for reconciliation work. He was inclined to the view that it would not be possible to operate a computerised system in the Paymaster General’s Office and a manual system for the work of reconciliation in the Department of Education.

The Accounting Officer stated that the Department had succeeded in effecting a reconciliation in the case of the two smaller votes administered by it. He added that it was quite impossible to effect a reconciliation in the case of the major votes of the Department and that he proposed to have discussions with the Department of Finance and the Paymaster General’s Office in regard to the further action to be taken in the matter.

The Committee is seriously concerned at the failure of the Departments of Justice and Education to effect reconciliation between the figures for outstanding orders furnished by the Paymaster General’s Office and the figures calculated from departmental records. It wishes to be informed of the outcome of the discussions between the Department of Education and the Department of Finance and it urges that this matter be brought to a conclusion with the minimum delay.

The Committee regards the failure to effect reconciliation in these cases as further evidence of the unsatisfactory functioning of the payable order clearing system operated by the Paymaster General’s Office. It hopes that when the new computerised system referred to in paragraph 6 of this Report is introduced in that Office it will cater effectively for the needs of all Departments in this accounting area.

AGRICULTURE

Storage and Transport of Intervention Beef

Qns 276-280

59. The Comptroller and Auditor General drew attention to the fact that the Department of Agriculture, as Intervention Agency, did not enter into formal contracts with the cold stores in which intervention beef was stored. He also pointed out that the storage rates paid by the Department in respect of this beef were not determined as a result of competitive tenders but were agreed from time to time between the Department and the association representing the cold stores.

The Accounting Officer informed the Comptroller and Auditor General that, while no single document embodying all the terms of the contract is signed by both parties, the contract entered into in each case is evidenced by the issue of documents and instructions to the stores and, although under these arrangements the stores do not specifically accept liability for losses due to theft, deterioration etc., they have in practice been meeting such losses. The Accounting Officer stated that the feasibility of using a standard contract document incorporating a reference to the cold stores’ liability for losses was being examined but that the number of cold stores involved and the number of jurisdictions in which they are situated makes this difficult to attain.

In regard to the storage rates, the Accounting Officer told the Comptroller and Auditor General that, in the case of Irish stores, central negotiations take place with their representative body, the factors taken into account being the national trends in labour costs, electricity charges, general overheads and, in so far as the Department has access to them, the rates currently being charged to commercial users. For foreign stores negotiations as to storage rates are conducted on a company by company basis and regard is had both to the rates paid by intervention agencies in the Member States in which these stores are situated and to the general level of rates being charged in each country.

The Accounting Officer, in evidence, told the Committee that the cold stores’ representative body had recently indicated that they would probably have to raise their charges if the Department insisted on a formal liability clause in the storage documents. The question facing the Department was whether to insist on a formal liability clause and pay for it through increased charges or continue, as at present, without such a clause and rely on the cold stores to meet any claims which might arise. The Accounting Officer stated that they were still examining the matter to see if they could, in discussion with the stores’ representatives, arrive at some formal contract that would give the Department better protection. He added that they had recently sought tenders from a number of consultants for the carrying out of a study of the Department’s entire beef intervention system, covering the physical, the documentary and the accounting controls and that the question of a standard contract would come up for consideration when they were deciding what action to take on the results of this study.

The Comptroller and Auditor General also drew attention to the fact that formal contracts are not entered into with the individual factories or haulage firms which transport intervention beef. Standard rates for transport of this beef to cold stores in Great Britain or on the mainland of Europe are agreed from time to time with the Irish Fresh Meat Exporters Society. In the case of beef transported within Ireland varying rates were paid to the individual factories or haulage firms concerned.

The Accounting Officer informed the Comptroller and Auditor General that a substantial amount of the beef placed in cold stores in Ireland and abroad was moved directly from the meat factories and the most effective way of providing haulage for such movements was to allow the factories to engage the hauliers and to recover the cost from the Department. He also stated that the Department had arranged the hiring of transport for the movement of bone-in beef from certain public cold stores in Ireland to cold stores abroad and that consideration was being given to the direct engagement of hauliers on the basis of on-going contracts for all such movements in the 1979/80 winter season but that there were many practical difficulties to be overcome, including the capacity of the hauliers to provide facilities for the movement of large quantities of beef at short notice.

In this connection the Accounting Officer told the Comptroller and Auditor General that in August 1979 a number of major refrigerated hauliers in Ireland were invited to quote for the transport of intervention bone in beef from commercial cold stores in Ireland to continental cold stores. In the event, the quantity of beef to be moved proved at times to be beyond the available capacity of all the Irish based hauliers who had quoted and it became necessary to engage some foreign based hauliers also. The Accounting Officer added that the cost per consignment of transporting this beef ranged from £1,000 to £1,475, with a weighted average of £1,129, whereas in the same period consignments of intervention bone-in beef transported to continental stores by hauliers engaged by the factories themselves were paid for at a flat rate of £1,075 per consignment, a rate agreed with the factories at the commencement of the season.

In evidence, the Accounting Officer told the Committee that, in regard to the transport rates and, indeed, in regard to the storage rates mentioned earlier, the problem was the haulage capacity and the storage capacity available. The Department uses all that is available and in these circumstances the possibility of competition is reduced somewhat. He considered that the main conclusion to be drawn from this experience in the matter of transport of intervention beef was that whichever system was used the cost was much the same.

The Committee appreciates the difficulties facing the Department in regard to the storage and transport of intervention beef, especially having regard to the considerable quantities involved and the limited storage and haulage facilities available. In the Committee’s view, however, formal contracts are most desirable in relation to both the storage and the transport of intervention beef. The Committee notes that the Department is still examining the matter in discussions with the cold stores representatives to see if it is possible to arrive at a normal contract in regard to the storage of beef and it would be glad to learn of the outcome of these discussions. It would also welcome information on the results of the study which the Accounting Officer stated was to be carried out by consultants on the entire beef intervention system. In regard to the transport of intervention beef, the Committee considers that, until such time as it is found feasible to conclude formal contracts on the basis of competitive tendering with haulage firms, the rates paid for such transport should be closely monitored at all times.

VAT on Intervention Transactions

Qns 281-282

60. The Comptroller and Auditor General drew attention to an anomaly in the treatment for value-added tax purposes of payments made by the Department of Agriculture, as Intervention Agency, in respect of storage charges. VAT charges included in the storage claims from the commercial cold stores were paid by the Department but VAT charges included in the storage claims from the meat factories were not paid. The Revenue Commissioners have ruled that all such storage charges are liable to VAT and the Accounting Officer, in evidence, told the Committee that this ruling meant that the Department owed money to the factories. He added, however, that he understood that discussions were taking place between the factories and the Revenue Commissioners about liability in this matter and the Department was awaiting a final determination.

The Committee trusts that this matter will be resolved without delay and wishes to be informed of the final outcome.

OFFICE OF THE REVENUE COMMISSIONERS

PAYE Arrears and Tax Evasion

Qns 303-309

61. Statistics supplied by the Revenue Commissioners to the Comptroller and Auditor General in regard to the collection of taxes and included by him in his Report on the Appropriation Accounts (see paragraph 33) indicate that income tax amounting to £8.5 million, approximately, deducted by employers under the PAYE system from the remuneration of employees was outstanding at 31 May 1979. The Accounting Officer, in evidence, indicated that this was the arrears figure as shown by their records but he stated that, were it not for the delay in the delivering of documents due to the postal strike which existed for some months prior to 31 May 1979, the PAYE arrears figure would probably be larger.

On the more general question of tax evasion, the Accounting Officer informed the Committee that, while the Commissioners were aware that there was evasion, they had no way of measuring the amount of tax involved. He stated that over the previous two years the Commissioners had stepped up their efforts to track down evasion by employing more outdoor officers. He added that they had strengthened very considerably the field force working on the PAYE tax area and also in the area of pay-related social welfare contributions and this was giving good results.

The Committee has in the past indicated that it viewed as reprehensible the action of employers who failed to pay over to the appropriate Department sums deducted from the remuneration of their employees. It commends the increased efforts of the Revenue Commissioners to track down the defaulting employers in this area, as well as tax evaders in general, and it urges that these efforts be maintained and, if necessary, further intensified in order to ensure that the problem of unpaid tax be reduced to minimal size if it cannot be solved entirely.

Write-off of Uncollected Taxes

Qns 312-314

62. The approved procedure in the Office of the Revenue Commissioners for passing unpaid tax as irrecoverable requires that any case in which there is no realistic prospect of collecting unpaid tax be submitted formally to the Commissioners to have such tax passed as irrecoverable and that schedules of all such cases involving a tax loss of £100 or upwards be passed to the Comptroller and Auditor General who carries out a test examination on the items included and reports his findings to Dáil Éireann in his Report on the Appropriation Accounts.

The Comptroller and Auditor General drew attention to delays in the Office of the Revenue Commissioners in following this approved procedure in a number of cases in which turnover tax remained unpaid and which were regarded as closed. The Accounting Officer informed him that a small staff sub-section had been dealing with the residue of turnover tax cases, largely on a manual basis, and had been endeavouring to get each case to the stage where a decision could be reached as to the prospects of securing payment. If there are no realistic prospects of securing payment the case is regarded as closed although the computer records would continue to indicate the tax as outstanding until the case is eventually submitted for passing the unpaid tax as irrecoverable. Because of the limited staff resources available the preparation of such submissions had to be deferred in order that ongoing cases could be processed.

In evidence, the Accounting Officer informed the Committee that after the Comptroller and Auditor General had drawn attention to these cases the process of bringing them to the point where they could be removed from the records was being speeded up. He pointed out that, while it was important that this operation should be completed, it was one which would not result in any gain to the Exchequer.

The Committee appreciates that the finalisation of these cases will not benefit the Exchequer. Nevertheless, it considers that all cases in which there is no prospect of collecting unpaid tax should be brought to a conclusion by having the tax formally passed as irrecoverable and should, if necessary, be included in the schedules submitted to the Comptroller and Auditor General for test examination.

VAT

Qns 315-319

322

63. The Committee considered at length certain shortcomings in the procedures being implemented for the collection of VAT, which the Comptroller and Auditor General brought to attention and which could result in losses of revenue to the Exchequer. The shortcomings mentioned included—

(a) failure to review on a regular basis cases in which action for the recovery of tax had been suspended for a number of years;

(b) failure to reprocess cases in which applications for registration for VAT purposes had been rejected by the computer; and

(c) failure to establish in advance that traders receiving tax repayments below certain levels were entitled to such repayments.

Regarding the failure to review cases in which the collection of tax had been suspended for some years, the Accounting Officer outlined the circumstances in which such suspension could occur and he stated that steps had been taken to have all such cases reviewed twice yearly. He explained that the rejection by the computer of a trader’s application for registration was due to the fact that the trader had been allocated a registration number already in use. He added that new procedures adopted for the examination of rejected applications would ensure that these would not remain unregistered in the future. The Committee welcomes the Accounting Officer’s assurance that these procedures will ensure that all cases in which tax collection has been suspended will be reviewed regularly and that cases in which applications for registration are rejected by the computer will be reprocessed and not left unregistered.

The Committee hopes that the new procedures will prove effective.

In regard to the failure to establish the genuineness of claims for VAT repayments below certain levels, the Comptroller and Auditor General noted that these claims were being met without the entitlement of the claimant to the repayment being first established. As a result, there was an obvious danger of irregular claims for repayment being met, especially in the light of the comparative ease with which traders can register for VAT purposes. The Accounting Officer informed the Comptroller and Auditor General that, even before the introduction of VAT in November, 1972, the Revenue Commissioners had considered it essential that priority treatment should be given to the inspection of VAT returns which showed repayments due but, as it was obvious that available staff resources would only be able to make repayments within a reasonable time in respect of a traction of the claims if every claim was to be verified, it was decided that a claim, or a number of claims from the one trader, could be repaid without prior check if the aggregate of the current claim and preceding claims in the latest twelve-month period did not exceed £1,000.

It was also decided that an Inspector, following examination of a trader’s records, could authorise any amount less than £20,000 per claim for automatic repayment in the following twelve-month period. The Accounting Officer stated that by July 1973, however, it was noted that repayment of claims was falling into arrears and it was found necessary to reduce the number of claims being sent to Inspectors by abolishing the twelve-month aggregate provision with the result that any claim under £1,000 per two-month taxable period could be automatically repaid and by raising to eighteen months the period during which claims of up to £20,000 could be automatically repaid following examination of a trader’s records. However, the introduction of zero-rating for food, oral medicines etc., in September 1973, caused a rise in the level of repayment cases and the increase in other tax rates in 1976 contributed to further rises and, as a result, it became necessary in May 1977 to raise the automatic repayment level from £1,000 to £2,500 per taxable period and at the same time to increase from £20,000 to £40,000 the Inspector’s discretion to authorise repayment of claims.

The Accounting Officer further stated that in January 1979 tighter controls on automatic repayments were introduced in the case of traders whose VAT registration commenced on or after November 1978. Under these new arrangements the first repayment claims in excess of £100 are not being met automatically but are referred to the VAT Inspectors to establish that trading exists. The Accounting Officer added that, while it was intended that this experiment would be reviewed after some months of operation to see how the Tax Districts and the Collector General’s Office were coping with the extra work involved, this review had not yet taken place because, owing to the postal strike, the revised procedures had not been fully operational on a countrywide basis for a sufficient length of time to enable their success or otherwise to be assessed.

The Committee must express serious concern at the failure in the Office of the Revenue Commissioners to establish that traders claiming VAT repayments below a certain level are entitled to such repayments. Failure to establish entitlement in such cases in advance could encourage the making of fraudulent claims for repayment, especially in view of the comparative ease with which traders can register for VAT purposes.

As the Committee understands the position, it seems that up to July 1973 a trader’s claims not exceeding a total of £1,000 over a twelve month period were automatically paid without his entitlement being first established. From July 1973 to May 1977 the total VAT repayment that could be claimed by a trader, and paid without his entitlement being first established, was increased to £1,000 per taxable period representing £6,000 over a twelve-month period and from May 1977 these limits were raised to £2,500 per taxable period or £15,000 over a twelve-month period. While it accepts that the tighter controls introduced in January 1979 would go some distance to remedy a very unsatisfactory position, the Committee notes that these new controls apply only to cases first registered for VAT purposes on or after November 1978. The Committee appreciates the importance of making repayments of tax without undue delay but it has difficulty in accepting the logic of making such repayments without first establishing that they are in fact due. In regard to the question of establishing the entitlement of traders to repayment, it appears to the Committee that the only consideration which weighed with the Office of the Revenue Commissioners in deciding the level of checking to be done was the staff resources available. The Committee would have thought that the need to protect the Exchequer against fraudulent claims would have been the prime consideration in this matter.

The Committee wishes to learn whether the review of the new procedures introduced in January 1979 has yet been carried out and, if so, it wishes to be informed of the outcome. It also wishes to learn whether there has been any change in the level of the prior verification of claims in the case of traders who first registered for VAT purposes prior to November 1978.

The Committee would welcome information as to whether it has been established that VAT has been repaid on the basis of fraudulent claims and, if so, as to the number of such cases and the total of VAT involved.

ENVIRONMENT

Private Housing Grants

Qns 348-352

64. The Committee questioned the Accounting Officer as to the reasons for a saving of £2.5 million out of a total of £17 million provided for private housing grants. He explained that the saving arose because of a low rate of approved applications maturing for payment during the year in relation both to improvement grants and new house grants. The Accounting Officer stated that another factor giving rise to this saving was the shortage of building materials due to industrial disputes in the two main producers of concrete products in the Autumn of 1978. He agreed, however, that delays in the processing of applications because of staffing problems, which cause arrears to build up are normal and that delays were also caused by the necessity to have inspectors make a number of visits to the same house because the applicant was repeatedly not on hand to allow the inspection to be carried out. As a result of previous suggestions by the Committee, the Department had taken steps to improve the situation by ensuring that an Inspector, following an abortive call, would notify the applicant that he had called and give advance notice of his next call so as to try to ensure that the applicant would be available on a later date. Notwithstanding this the Department still had the problem that applicants are not at home when the Inspectors call.

The Committee again suggested that the Department should consider introducing a system of giving advance notification to applicants of the proposed date of inspection, not only because this would speed up the processing of applications but would also avoid the nugatory expenditure involved in abortive calls.

The Accounting Officer undertook to consider this suggestion but in a memorandum subsequently sent to the Committee he pointed out that one of the conditions attaching to payment of the £1,000 new house grant is that the applicant must occupy the dwelling on completion as his place of normal residence on a year round basis and that the purpose of this condition is to ensure that grants are paid to persons who buy or build houses for their own occupation and not to persons who do so for letting as investments. The Department’s Inspectors regularly find that houses which are the subject of grant applications are being let or being occupied by persons other than the applicants. For this reason, proper enforcement of the occupancy condition could be defeated if all new house grant applicants were advised beforehand of an impending call by an Inspector. The Accounting Officer added that every effort is, however, made to facilitate genuine requests for an appointment in advance.

In regard to house improvement grants the Accounting Officer indicated that all applicants are required to give their telephone number to facilitate the Inspector who may wish to contact them when an appointment is requested. Inspectors are able to arrange economic itineraries which facilitate the carrying out of other inspections should a call prove abortive and failure to gain access to a house may not, therefore, give rise to any additional expenditure. In the case of abortive calls the Inspector is instructed to notify the applicant of his call and of his intention to call again when next in the area and the applicant will receive a few days’ advance notice of the date of this new inspection.

The Committee is slow to accept the Accounting Officer’s argument against notifying all applicants for new house grants in advance of Inspectors’ impending visits. It considers that it should be possible for the Department to ensure by other methods that houses in respect of which such grants are paid are occupied by the grant recipients. It suggests that the Department gives further consideration to the problem and it would welcome information on the outcome of this in due course.

POSTS AND TELEGRAPHS

Telephone Revenue

Qns 385-392

65. The Comptroller and Auditor General drew attention to a number of weaknesses in the implementation of the approved procedures for the collection of telephone revenue, including—

(a) failure to restrict service to subscribers whose accounts are in arrears;

(b) serious delays in issuing initial and final accounts to subscribers, and

(c) serious delays in passing overdue final accounts to the claims section for collection.

The Accounting Officer informed the Comptroller and Auditor General that serious arrears in the issue of accounts in 1976 resulted in a considerable shortfall of revenue in 1977 and it was necessary to take special steps to collect the budgeted revenue for that year. These included the relaxation of the service restriction procedure which had to be completely suspended in 1978 because of various industrial actions. In evidence, the Accounting Officer assured the Committee that the normal procedure of service restriction had been resumed.

The Accounting Officer explained to the Comptroller and Auditor General that the delays in issuing initial and final accounts to subscribers were in the main due to the failure of the Engineering Branch of the Department to pass promptly to the Accounts Branch the necessary advice notes indicating that telephone service had been provided in the case of the initial accounts or had been terminated in the case of final accounts. Occasionally the delays might be due to an advice note being lost in transit or mislaid in the Accounts Branch. In evidence, the Accounting Officer told the Committee that the position in regard to the issue of advice notes had improved quite considerably but that the matter was being watched continuously because of the danger, especially in the case of final accounts, of some revenue being lost to the Exchequer.

The delays in passing overdue accounts to the Claims Section for collection were stated by the Accounting Officer to be due to a number of factors including, the late issue of accounts in 1976, the abnormal number of queries raised by subscribers on their accounts and pressure of work coupled with staffing difficulties. In evidence, he stated that the current position in regard to the passing of final accounts to the Claims Section for collection was quite satisfactory and he indicated that the Department considered that losses of revenue arising from these delays were insignificant.

While the Committee is very much aware of the serious problems with which the Department has been faced in recent years, particularly problems arising from staff shortages and industrial action in a number of areas, it is concerned that losses of telephone revenue should be kept to a minimum and, to this end, it expects that the approved collection procedures should be fully implemented.

It welcomes the assurances of the Accounting Officer that the weaknesses to which the Comptroller and Auditor General drew attention have largely been corrected and that the Department is keeping the areas involved under continuous supervision.

Broadcasting Licence Fees

Qns 393-413

66. The Comptroller and Auditor General drew attention to the fact that a large number of television dealers, registered under the Wireless Telegraphy Act, 1972, were not fulfilling their statutory obligations to furnish to the Department monthly returns of their sales or rentals of television sets and he pointed out that their failure to do so deprives the Department of one means of detecting the evasion of payment of television licence fees. An examination of the dealers’ register maintained in the Department revealed that of the 720 registered dealers, 103 claimed to have little or no sales or rentals, 93 had failed to furnish any returns, 211 were up to a year in arrears, 281 were over a year in arrears and only 32 were up to date in furnishing their statutory returns. The Accounting Officer informed the Comptroller and Auditor General that since the provisions of the Wireless Telegraphy Act, 1972 were brought into effect on 1 March 1973 over 450,000 transactions, including over 52,000 in 1978, had been notified to the Department and this information had been of considerable benefit in dealing with cases where television sets were unlicensed or inadequately licensed. The Accounting Officer also stated that the arrears arose largely from pressure of other work and shortage of experienced staff coupled with the further difficulty that, during the postal strike, registered dealers could not be asked to declare their transactions in television sets. This was now being done and if the Department did not get a satisfactory response to its request for this information the records of some of the larger registered dealers, who were not sending in returns regularly, would be inspected to establish whether they were in breach of the law and prosecutions would be brought if necessary.

The Accounting Officer agreed, in evidence, that the 720 registered dealers did not represent all the retail outlets for television sets and he indicated that the number registered had in fact decreased to 680. An advertising campaign pointing out to television dealers the obligation to register had been carried out and there had been some response but, while the Accounting Officer was satisfied that some dealers were still not registered, he had no way of knowing how many. He did not feel, however, that, in the door to door campaign conducted by the Department to detect unlicensed television sets, the Inspectors would have the right to demand information regarding retail outlets where television sets had been purchased. The Department’s objective was to get the registered dealers to furnish the statutory returns and to get dealers willing to register to do so but there was a shortage of staff for inspection work and it would be necessary to increase the staff for that purpose.

The Accounting Officer further stated that the problem had also been discussed with RTE who were very interested in what was being done by the Department but he felt that whoever was made responsible for collection of licence fees would have to rely on some system of house to house inspection. The Department had not devised a better system nor had one emerged from their discussions with RTE. While RTE had estimated the shortfall in revenue because of evasion at £3 million, the Accounting Officer stated that the Department had no evidence to support or to disprove this figure. He did, however, indicate that in the first two weeks of the Department’s detection campaign 17,000 unlicensed or wrongly licensed television sets were discovered and, in addition, a total of 38,000 licences was sold in that period compared with the normal figure of 18-20,000 licences for a two-week period.

The Committee accepts that there is a considerable amount of evasion of payment of television licence fees and recommends that all possible steps be taken to identify the holders of unlicensed or wrongly licensed sets. It agrees that the door to door inspection appears to be the most effective method of detection available at present. Other methods of detection available to the Department include the inspection of returns furnished by cable television operators referred to in paragraph 14 of this Report and the inspection of returns by registered television dealers. The Committee would urge the Department to continue its efforts to secure the registration of all television dealers and to make full use of the returns furnished by these dealers and by the cable television operators.

SOCIAL WELFARE

Recovery of Arrears of Social Welfare Contributions

Qns 453-458

67. The Committee notes that, while 425 cases were sent to the Chief State Solicitor in 1978 for the institution of civil proceedings against employers for the recovery of arrears of social welfare contributions, only 53 cases were completed in the year. These figures suggest that there could be a considerable back-log of cases with the Chief State Solicitor awaiting action and the Committee would like to have information regarding the number of cases on hands awaiting legal action with an indication of the length of time they are on hands, and the total amount of money involved in such cases.

The Committee notes that £4.9 million arrears were recovered from employers in 1978 as a result of the efforts of the Department’s outdoor staff without recourse to legal action and it commends these efforts and their successful outcome. However, the size of the sum so recovered suggests widespread non-compliance with the provisions of the Social Welfare Acts on the part of employers. The Committee urges the Department to continue its efforts to identify these employers and to recover all arrears, if necessary, by recourse to legal action.

Overpayments of Social Assistance

Qns 459-461

68. The Committee notes that the balance of overpayments of social assistance not disposed of through recovery or write-off had increased from £825,376 at 31 December 1977 to £1,215,524 at 31 December 1978. The Accounting Officer, in evidence, explained that these overpayments could be due to departmental error as, for example, the issue of payments at the wrong rate or they could be due to fraud through the concealment of means by the recipients. He indicated that the largest items in this outstanding balance represented unemployment assistance and old age pensions, the bulk of which related to cases in which there had been concealment of means. He added that for some years the Department’s outdoor branch was rather short-staffed and attention had to be given to current cases involving new or revised awards rather than to the investigation of old cases. Factual assessments of the means of small holders since 1975 revealed cases in which there had been concealment of means and when the staff was brought up to full strength there was an improved degree of efficiency in investigating which resulted in an increase in the overpayments discovered.

The Committee accepts that an increase in the overpayments recorded for recovery could indicate improved efficiency on the part of the investigation staff. It could also indicate a rise in the level of overpayments being made. The Committee is concerned at the considerable increase in the balance of social assistance not disposed of, an increase of almost 50% over a period of one year, and it urges that action be taken with a minimum of delay to dispose of these outstanding overpayments especially as any delay could result in the prospect of recovery being reduced.

Collection of Health Contributions

Qns 462-467

69. The Comptroller and Auditor General drew attention to refunds to employers of certain health contributions which had been collected through the Social Insurance stamping system on behalf of the Department of Health and which amounted to £644,430 and £832,369 in 1977 and 1978, respectively. These contributions had been collected in respect of insured employees who, because of their levels of remuneration, were not liable to make them. The claims for refund appeared to have been met without verification by reference to the insurance contribution records of the employees. The Comptroller and Auditor General was concerned that fraudulent claims might have been received and met. The Accounting Officer informed him that the refund system had been arranged in conjunction with the Department of Health and the Federated Union of Employers and it was envisaged that claims would come from reputable employers in respect of highly paid non-manual workers with little danger of fraudulent claims being made. Claims were checked for arithmetical accuracy and to avoid duplication in refunds but, as employee contribution records were not available until after the end of the contribution year, they could not be used to check current claims. However, a post factum check on such records relating to 902 contributors established that only 175 excess contributions had been refunded representing 0.38 per cent of the contributions paid in respect of these 902 contributors.

In evidence, the Accounting Officer also pointed out that, although contribution records could establish retrospectively the contributions paid for each employee, reference would also need to be made to the employer’s own records to establish whether the employee was classified as manual or non-manual and whether, at the relevant time, his remuneration was over the prescribed limit to qualify for a refund of the health contribution element.

The Committee appreciates that the insurance contribution records of the employees concerned were not available to the Department at the time when it was making these refunds and it recognises also the difficulty in establishing, retrospectively, the essential facts regarding the status and remuneration of employees during the period in respect of which the refunds of contributions were made to employers. Having regard to the large sums which were refunded to employers in 1977 and 1978 without prior verification by reference to the relevant contribution records, it is somewhat perturbed to note that the limited check carried out retrospectively by the Department on the contributor’s insurance records was not commenced until the Comptroller and Auditor General had already drawn attention to this matter and was mainly confined to the records of employees either in State sponsored bodies or in some of the larger and more reputable firms who were less likely to make fraudulent claims. The Committee considers that the Department might have been more assiduous and less selective in carrying out such test checks.

GARDA SÍOCHÁNA

Clearance of Advances

Qns 483-484

70. The Comptroller and Auditor General drew attention to delays in clearing advances made to members of the Garda Síochána in respect of travelling allowances and witnesses’ expenses, some of which were made up to ten years ago and were the subject of assurances given to a previous Committee that they would be cleared quickly.

In evidence, the Accounting Officer told the Committee that the position was not yet fully satisfactory although it had greatly improved in regard to cases involving advances made up to 1977, the number of which had been reduced by almost 70% in 1979. The problem arose in relation to current cases and was caused by the difficulty of getting returns from the Gardaí. A number of directions regarding the submission of claims had been issued by the Garda authorities but, because of transfers to border areas where personnel are operating under difficult conditions, there was a certain reluctance to put pressure on them in this matter. In 1978 there was an average delay of five months between the issue of an advance and the submission of the related claim but in 1979, despite the best efforts to secure quicker clearance, this delay had increased to 6 months. The Accounting Officer also told the Committee that it would be difficult to clear some of the amounts outstanding in respect of witnesses’ expenses because they included advances which should have been cleared several years ago. Furthermore, since some of the Gardaí to whom advances had been made may have died or left the Force, it was difficult to see how the problem could be fully solved in the normal way and consultations might have to take place with the Department of Finance and the Comptroller and Auditor General about how the expenditure of these advances could be vouched. In the case of current claims, however, the Commissioner had issued several sets of instructions with a view to getting them submitted more promptly.

The Committee is concerned that, despite successive reviews and renewed directives by Garda authorities over several years on the furnishing of claims, a satisfactory position has not been achieved in the clearance of long standing advances to members of the Garda Síochána in respect of travelling allowances and witnesses’ expenses and that it now appears unlikely that all such advances can be satisfactorily accounted for. The Committee notes that further efforts to eliminate the arrears position and to have current claims furnished more quickly are in train. It wishes to be kept informed of progress made in both these areas.

COURTS

Disposal of Bail Moneys

Qns 490-491

71. The Comptroller and Auditor General drew attention to the accumulation in the Dublin District Court Offices of bail moneys lodged over a number of years in respect of accused persons who subsequently failed to comply with the conditions of the recognisances entered into by them before the Courts. The Accounting Officer informed him that all bail money received in the Court Offices is lodged to the credit of the general cash accounts of the District Court Offices and, in the case of non-performance of the conditions of a recognisance, the Gardaí initiate proceedings for the estreatment of bail in accordance with the District Court Rules. Bail money estreated by the Court is paid into the Department of Justice Fines Account.

The Accounting Officer, in evidence, informed the Committee that the bail moneys in the Dublin District Court Offices had been accumulating there over a period of 21 years, at least, and related mainly to cases involving persons who had no known address in the State or persons who might not be living in the State and who could not, therefore, be contacted. Following the raising of this matter by the Comptroller and Auditor General the Garda authorities appointed a special inspector to try to unravel the situation but he was unable to make any worthwhile progress. Any effort to go back over the years in order to sort out this problem would certainly cost more than the sum of money involved, which was of the order of £30,000. The Accounting Officer stated that it was proposed to apply to the Court for disposal orders in respect of these moneys and it was hoped that the Court would be ready to exercise the power it has to declare these moneys forfeit to the State. In regard to the position on current bail moneys, the Garda authorities have very firmly undertaken that this situation will not be allowed to recur and instructions have been issued by the Commissioner indicating the action to be taken in such cases in future.

The Committee is somewhat at a loss to understand how unestreated bail moneys could accumulate in the accounts of the Dublin District Court Offices over a period of some 21 years without attracting some attention from the responsible Court officials or from the Department’s accounts staff. It notes the steps which it is proposed to take to bring this matter to a satisfactory conclusion and it wishes to be kept informed of the progress being made. It welcomes the information that the Garda authorities have given assurances that this unsatisfactory situation will not be allowed to recur.

The Committee would like to learn the results of the examination carried out by the District Court examiners into the position regarding the disposal of bail moneys in District Courts outside the Dublin area.

On a more general issue, the Committee would like to be assured that there are no other moneys accumulating in accounts under the control of the Courts which are not being disposed of on a regular basis.

DEFENCE

Recovery from the United Nations of the Cost of Peace-Keeping Forces

Qns 514-517

72. The Comptroller and Auditor General drew attention to the fact that sums due from the United Nations in respect of expenditure, which arose from requests for forces to serve overseas, amounted to £3,080,528 at 31 December 1978 and, of this total, £2,989,000 (partly estimated) related to peace keeping forces in Lebanon.

The Comptroller and Auditor General also indicated that a sum of £434,000, of which £392,000 related to forces dispatched to Cyprus, was due from the United Nations in respect of pensions, allowances, etc.

Further expenditure amounting to £804,144 was incurred by the Department of Defence in replacing, with Army reservists at home, troops dispatched to Cyprus. Formal claims had been lodged with the United Nations in respect of £274,920 of this expenditure but claims in respect of the balance, £529,224, while prepared, had not yet been lodged. The Accounting Officer informed the Comptroller and Auditor General that, following representation from the United Nations, it was decided that Government approval be sought to absorb these costs on the understanding that the United Nations confirmed its agreement that such claims were admissible and would be regarded as having been absorbed by the Irish Government. The Committee wishes to be informed whether a final decision has been reached in this matter. The Accounting Officer, in evidence, informed the Committee that the amount outstanding in respect of forces serving in Lebanon is building up all the time because this is a continuing operation and that, although payments amounting to £3.68 million had been received, the balance outstanding had increased to £4.8 million. The preparation of claims in respect of stores consumed by the peace keeping forces was a very time-consuming job but the Department was pressing forward with these all the time.

Having regard to the considerable sums due from the United Nations over a protracted period, the Committee asks whether consideration has been given to the making of a request to that organisation to make regular payments on account pending the submission of claims in respect of the expenditure actually incurred.

Recruitment to the Permanent Defence Force

Qns 525-529

73. The Committee noted that a saving of £2.7 million on Subhead B. Permanent Defence Force— Pay was stated to be due to a decrease in the other ranks strength of the Force. The Accounting Officer, in evidence, pointed out that soldiers can sign on for three years and, while there was a fairly big intake of men in the three year period up to 1978, some 45% of these did not extend their service. Heavier duties, including border duties and security duties, take up more time leaving the personnel less leisure time. When members of the Force are unhappy with the level of duties they leave, which means that the men remaining in the Force have a heavier load to carry. The Department had launched an expensive recruiting campaign on television and in the newspapers and, while they were getting recruits, they had not succeeded in stopping the wastage. An analysis carried out on the wastage of manpower in the Defence Force indicated that the major element causing them to leave was the incidence of duties. Theoretically a soldier is on duty 24 hours a day for seven days a week and, while they get extra pay for such things as border duty or security duty, this is a fixed sum which is not measured in terms of the number of hours worked which could be far in excess of the level acceptable in industrial life.

The Committee shares the Department’s concern at this relatively high wastage of manpower in the Defence Force which obviously gives rise to considerable expenditure on recruitment campaigns and Training of new entrants to the Force. It accepts that the level of duties, which obviously has been rising in recent years, is a major factor contributing to this wastage. While it sees little prospect of any big improvement in this area in the short term, it considers it that should be possible to make a career in the Defence Force more attractive than it appears to be at present by comparison with other careers in the public service.

EDUCATION

Residential Homes and Special Schools—Structural Defects in a Training School

Qns 649-650

74. The Comptroller and Auditor General in his Report referred to structural defects which came to light in 1974 in a training school building which was being erected under a contract entered into in 1972 in the sum of £324,962. When the defects came to light the work was virtually completed but the contractor refused to remedy them, although he was considered liable to do so, and the Department of Education, with the approval of the Department of Finance, made arrangements to have the remedial works carried out by another contractor. Later, in 1976, the original contractor went into liquidation.

When the original contract was being placed the contractor was required by the Department of Education to provide, through an insurance company, a performance bond in the sum of £86,250 and it was a condition of this bond that, in the event of non-performance by the contractor, the Department of Education should give due notice of that fact to the insurance company within one month. When the contractor refused to remedy the defects for which he was considered liable the Department failed to notify the insurance company within the specified time limit and, as a result, the insurance company was in a position to repudiate liability under the bond.

The Accounting Officer informed the Comptroller and Auditor General that the insurance company’s repudiation of liability might be open to question. He also indicated that the overall cost of the works carried out by the original contractor came to £532,848 of which £513,325 had been paid leaving a balance of £19,523 to be offset against expenditure on the remedial works which had cost £37,928 up to 31 December 1978 but he pointed out that the Receiver might contest any decision to retain moneys due to the original contractor. He added that a final account for the remedial works had been received and was being examined.

In evidence, the Accounting Officer informed the Committee that this case could go to Court and that he could not, therefore, enter into any discussion on it. The Department had, however, applied to the Receiver to ascertain if there were any funds available.

The Committee wishes to be kept informed of developments in this case.

On a wider issue, the Committee would welcome information as to whether Government Departments, generally, insist on the provision of performance bonds in the case of all contracts.

GENERAL

75. In the course of its deliberations the Committee had occasion to note the non availability of detailed information regarding capital and non-capital grants to private institutions. The Committee feels that the principle of public accountability would be enhanced by the making of such information available in relation to all such grants.

PADDY O’TOOLE,

Chairman.

3rd December, 1980.