Committee Reports > List of Committees > Dáil > 1983 > Committee of Public Accounts > Interim and Final Report - Appropriation Accounts 1978 - 1979

MIONTUAIRISC NA FIANAISE

(Minutes of Evidence)

Déardaoin, 12 Márta, 1981

Thursday, 12th March, 1981

The Committee met at 11 a.m.

DEPUTY TIMMINS in the chair.

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

MINUTE OF THE MINISTER FOR FINANCE ON THE COMMITTEE’S REPORT (Paragraphs 3. 6 & 23) ON THE APPROPRIATION ACCOUNTS, 1978 (see Appendix 2)

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

1. Chairman.—I note in paragraph 3 of the Minister’s Minute that discussions are still proceeding with the Department of Education and with the Vocational Education Committees. When does the Accounting Officer expect that these matters will be finalised?

Deputy N. Andrews.—Has there been any progress on that?

—We have not heard any more from the Department of Education about this. Normally it is not a thing that I would brief myself on because the Accounting Officers will be coming before the Committee to answer the paragraphs in this Minute which directly affect him. Normally, in the Department of Finance, we would wait for the Committee’s reactions on questioning the Accounting Officer, so that we could follow up and support the Committee’s views in whatever way it was appropriate. I do not have that sort of information at my disposal, but I can let the Committee know later on when I get it back if they wish.

It will be useful, before the Accounting Officer from the Department of Education comes in, to have a minute from the Department of Finance on this issue. It has been outstanding for a very long time. We should begin to get some resolution from it. Could we have a note from the Department of Finance?

—Certainly.*

2. Deputy Filgate.—As well, in relation to the whole question of community schools, apart from the financial aspects of it, one thing hinges on another. For instance, the Deed of Trust and the appointment of trustees to the community schools are totally ineffective because the monetary questions have not been clarified nor has the Deed of Trust been clarified. We should as Deputy Andrews says, take this matter up as a matter of urgency, in relation to community schools. There are quite a number of people connected with the community schools and they are, at present, as Seán O’Casey said, in a “state of chassis” in relation to them. It should certainly be questioned.

3. Chairman.—I see that the Minister proposes to discuss further with the Department the Committee’s recommendation that local contributions below 5 per cent should be separately set out in the Appropriation Accounts. When is it expected that these discussions will take place?

—We are proceeding to have these discussions with the Department of Education and we will push them ahead as vigorously as possible because we would share the views of the Committee that we want to see these things defined. I can assure the Committee that we will not be slow in pursuing it.

4. In paragraph 6 we see that premises are being prepared for a computer for the Pay master General’s Office and we would like to know when the premises are likely to be available?

—I have been in constant communication with the Office of Public Works about this accommodation, as the Committee are aware, and I have been assured by the Chairman of the Office of Public Works that it should be ready in the middle of next month. I would make a certain pragmatic allowance there and would expect it to be available by the summer, realistically speaking.

5. Deputy N. Andrews.—The computer system is ready to go into the building, is it?

—It is.

6. Where is it at the moment. Is it operating somewhere?

—Part of the equipment is already operating where the Accounts Branch is located in Agriculture House. Some of the consoles are there and are fully operational. I am not actually aware of the physical location of the remainder but the appropriate equipment is ready to go into action.

All the computerisation necessary to move into the new building has been purchased.

7. How long has the delay been between the purchase of the computer for the building that was not ready—

—I do not have the dates for that offhand, but I can give the information to the Committee. I do not imagine there is a question here of the equipment lying idle over any significant time. I imagine that the people on the ordering side of the business would have taken account of the non-availability of the accommodation. Therefore there would be a programme for installing the equipment which would allow for that.

8. What I am concerned about is that we may have gone off at half cock and spent a lot of public funds in advance on expensive computer equipment, and as technology is changing so rapidly we might have been better to wait until such time as the building was ready. We might have been spending public money on equipment which might very well prove to be out of date by the time the building is ready. The Office of Public Works should be held responsible for not having this building ready. We will take it up with the Accounting Officer at that point, but I would very much like to have an indication of when the computer was bought, the expenses incurred in purchasing it and the period of delay between the actual expenditure of that money and the building being ready.

—I will arrange to have the information made available to the Committee but, just in case I may have given a wrong impression, or in case a wrong impression may be taken, I do not think there is a matter of culpable delay arising here.* The Office of Public Works actually identified premises for the location of the accounting staff of the Department last year in Clare Street but the exigencies of the Public Service over-rode the actual moving in of Finance there, because they knew the Department of Energy had to be housed somewhere and to be put into Clare Street. The Office of Public Works then immediately had to look for alternative accommodation and they did that very speedily. We have been pressing the Office of Public Works and they re-acted very quickly when they failed to get into Clare Street and in a matter of months we will move into new premises in Earlsfort Terrace.

9. I know you cannot anticipate your political master’s will and the changes that might come in departmental appointments and new Government Ministries, but I still think there must be some way to foresee expenditure of this kind lying idle, so to speak, particularly in a high technology area such as computerisation. You may bring in the equipment and it may well prove to be out of date. We ought to tighten up on our planning. We should have contingency plans if necessary. We should have pre-planning. We should have some indication where office space is becoming available in six months’ time, or three months’ time, and have options on that space. The planning of this kind of operation is somehow wanting. I cannot put my finger on it precisely but I think there is a considerable waste there of public money.

—I will let the Committee have information on this. Again by way of further explanation, I should explain that when we are talking about a computer. I err, like the public, in visualising an enormous array of machinery. In fact, what is happening here is that we are working on the Department of the Public Service computer in Kilmainham through terminals and card punching and other equipment which will be located on our premises. We are not discussing something of very large proportions or very expensive amounts involved. We are discussing terminals and sub-equipment of a computer. I will let the Committee have the information required.*

10. Chairman.—In paragraph 23, I note that the Land Commissioners are independent in the exercise of certain functions, one of which is the purchase of land and the price paid for land. Do you agree that the Accounting Officer is in an invidious position regarding money for land purchase in view of the fact that the Land Commissioners are the people who are responsible.

—In response to the views expressed by the Committee we have examined this matter very thoroughly in the Department of Finance. I feel that the Accounting Officer is fully protected by reference to the statutory position set out here. From the Accounting Officer’s point of view he is fully protected. As regards access by the Committee to information which I think is of concern to the Committee, having gone into this matter carefully we feel that since it depends on a statute we are stopped from going further with this. It is a matter for Dáil Éireann rather than for a particular Accounting Officer. I trust that the Committee would find that acceptable.

11. Deputy Filgate.—Paragraph (b) reads: “The relevant legislation requires that the price which may be paid for land in individual cases by the Land Commission (or on appeal to the Appeal Tribunal—a Judge of the High Court) be equal to the market value of the land.” How is that determined at present? This was taken in some 20 or 25 years ago at market value. Have they the old system for arriving at the market value in the Land Commission at present? Is that market value related to the cost of the land to people who get divisions or holdings of land later on, or are there two different figures involved here?

Chairman.—I wonder if you could hold that question and ask the Accounting Officer from the Department of Lands when he comes in what the exact position is there.

Deputy Filgate.—Yes.

12. Chairman.—In connection with the memorandum you are preparing—this is at paragraph 51—when do you expect to have that available?

—Very quickly. It is a matter of transmitting it.

13. On the General Report of the Comptroller and Auditor General, have members any comments on paragraphs 1 to 7?

Mr. Mac Gearailt.—These paragraphs are for information. The Committee will note that paragraph 2 deals with an excess vote. The Committee will have to make a special interim report on that. I suggest we leave it until the Accounting Officer from the Department of Defence comes in later this morning. We can deal with it in connection with paragraph 56 under the Army Pensions Vote. Otherwise paragraphs 1, 3, 4, 5, 6 and 7 are for information.

VOTE 1—PRESIDENT’S ESTABLISHMENT.

Mr. T. F. Ó Cofaigh further examined.

14. Chairman.—The President’s household staff is now carried on the Office of Public Works Vote, and I would like to know why this change was made?

—The background to this was that previously the provision in the Central Fund for the President’s salary and expenses included the sum of £15,000 a year to cover entertainment expenses, household expenses, including pay of the Office of Public Works staff, and social insurance contributions. What has happened is that now the expenses cover entertainment and food for the household but the pay of the Office of Public Works maintenance staff and their social welfare contributions and so on are paid directly from the Office of Public Works Vote. It was thought that to do this was more appropriate.

15. On incidental expenses, there is a big saving under that heading.

—As the note indicates, there were no official visits abroad by the President that year. He made a number of visits the previous year and one visit the following year but was at home in 1979.

16. Deputy Filgate. On subhead C.—Post Office Service—a saving of £4,403 out of a grant of £7,800 in expenditure is explainable but that will show up in the following year in effect when possibly there will be over-expenditure.

VOTE 6—OFFICE OF THE MINISTER FOR FINANCE.

Mr. T. F. Ó Cofaigh further examined.

17. Chairman.—On subhead A.2.—Consultancy Services — what consultancy services were paid for under this subhead?

—The consultancy services which accounted for the £24,566, related mainly to the installation of the computer services in the Paymaster General’s office to the extent of £13,475. The next most important item was the employment by the Department of Finance of a professional accountant on loan from the Industrial Credit Company which accounted for £6,250. There were two less important items where we employed consultants to advise us on applications for grants from the Industrial Credit Company in which we were involved.

18. Deputy Filgate.—On subhead B.2.—Office Machinery and other Office Supplies—there was over-expenditure of £23,271 which was accounted for mainly by increased computer programming requirements. Is this additional equipment? We had a problem earlier about a delay, when a question was asked by Deputy Andrews. Was this money expended and was the extra programming machinery made available and installed that year?

—The expenditure here was made under three main categories. We had excess expenditure on programming in connection with the introduction of the pay-related social insurance scheme. Staffs whom we were paying were involved in this and it involved additional programming. Secondly, we had to purchase a photocopier during the year on the recommendation of the Department of the Public Service for our own office equipment. Thirdly, more than half the excess was due to the leasing by us of a Reuters monitoring machine or video machine which is essential for our departmental purposes to keep track of what is happening, for example, on the international stock exchange. We have an immense amount of money passing through our Department because of turnover in Government stocks. Something like £9 billion a year is involved.

I presume that this was unforeseen because of the introduction of the PRSI system in April 1979.

—That is only part of the explanation of the excess.

19. Chairman.—On subhead D.—Management of Government Stocks—who gets the money provided for management of Government stocks?

—The management of Government stocks falls into two main categories—domestic stocks and foreign stocks. The management of domestic stocks with one exception is done by the Central Bank. The money is payable to the Central Bank for all domestic Government stocks, including Land Bonds. There is one exception, the management of prize bonds, which is carried out for the Department of Finance by the Bank of Ireland. They are paid out-of-pocket expenses and an administration charge. The Government foreign stocks administrative expenses are paid to paying agents who are nominated in respect of each borrowing. There could be a very large number of these. The breakdown in the two accounts is as follows: for domestic stock, the expenditure was £840,000 and for management of external loans, the expenditure was £285,000.

20. Deputy Filgate.—On subhead E.—National Savings Committee—the National Savings Committee used less than granted by £21,000. The savings arose because the request from the Department of Posts and Telegraphs for the recoupment of the salaries of staff on loan to the Committee for one quarter was not received in time for payment in the year of account. It sounds a bit strange that the salary which is expended on the spot could not be accounted for even for one quarter, within the financial year referred to. Am I right in thinking this?

—The people who were paid had to be paid. The Department of Posts and Telegraphs accounts branch have to collate the information as regards the claim and the amount of payment made to these staffs and it will be transmitted to the Department of Finance for repayment. I should imagine that, towards the end of the year, there are quite a lot of these bulk settlements of accounts at an awkward time of the year. I am not quite sure of this, but it may have been affected also by the Post Office dispute in that year which may have delayed things.

In any case it would have been anticipated that the salaries would have been in time when the money was allocated?

—That is correct.

VOTE 10—STATE LABORATORY.

Mr. T. F. Ó Cofaigh further examined.

21. Chairman.—What are the functions of the State Laboratory and for whom does it provide service?

—The bulk of the services, which are essentially of an analytical and advisory nature, are provided by the Laboratory for the Department of Agriculture and for the Office of the Revenue Commissioners. The work for the Department of Agriculture consists broadly of examining fertilisers, feeding stuffs, milk and fats, with a view to ascertaining whether their components are in line with EEC stipulations. The work for the Revenue Commissioners consists mainly of classifying goods for customs tariff purposes, such as identifying the proportion of substances in goods so as to enable Revenue to levy the appropriate duties on the goods being imported. Miscellaneous services are provided for other Departments such as Fisheries, Health, Industry, Commerce and Tourism, and so on. As well as the work for Public Departments, there is testing for non-Government agencies. This would be, for instance, testing of dairy glassware manufactured by private firms to make sure that it conforms with milk testing standards, analyses for hospitals and toxicological examinations for coroners.

22. Deputy Filgate.—Is there a credit here for companies?

—There is an appropriation-in-aid.

VOTE 11—SECRET SERVICE.

Mr. T. F. Ó Cofaigh called.

No question.

VOTE 14—MISCELLANEOUS EXPENSES.

Mr. T. F. Ó Cofaigh further examined.

23. Chairman.—On subhead E.—Recoupment to the Central Bank of Ireland of payments to the Liquidator of the Irish Trust Bank Ltd.—are we near the end of this recoupment? How much has been recouped so far and how much more is due to be recouped?

—There is a sum of approximately £6,000 outstanding now to be recouped. The bulk of it has been paid from the Exchequer via the Central Bank to the interested people. The only reason there is a small amount outstanding is that the claimant had difficulty in establishing his right to the payment. There may be only one case at the moment outstanding. That, of course. is quite distinct from what the receiver will pay back to the State as the sole repository of the claim now. The claims of the various depositors have been transferred to the State and the Central Bank. The payments the receiver is making come now to the Central Bank and the State.

24. Deputy N. Andrews.—On Subhead F.—Compensation for damage caused by the detonation of a torpedo in Kilmore Quay in February, 1977—are we finished with Kilmore Quay now?

—I should imagine so.

VOTE 22—AGRICULTURAL GRANTS

Mr. T. F. Ó Cofaigh called.

No question.

VOTE 52—EMPLOYMENT GUARANTEE FUND.

Mr. T. F. Ó Cofaigh further examined.

25. Chairman.—None of the £3 million granted in 1979 was expended and I am wondering why?

—There were commitments identified which justified us in making the transfer, but the commitments did not mature for payment until close to the end of the year. We had to provide for them in case they did mature and we had this credit of £3 million therefore.

Chairman.—Thank you, Mr. Ó Cofaigh.

The witness withdrew.

VOTE 46—DEFENCE

Mr. M. P. Healy called and examined.

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

“Subhead G.—Civil Defence

Claims for grants payable to local authorities in recoupment of expenditure incurred by them on civil defence were formerly certified by Local Government auditors whose certificates were available to me. The Department was informed in May 1979 that this procedure was being discontinued and I inquired from the Accounting Officer as to the alternative arrangements in operation to verify the civil defence grant payments made from the Vote. I also inquired regarding claims remaining uncertified.

The Accounting Officer stated that payments of civil defence grants to local authorities were being made on a provisional basis in line with the practice followed for a number of years due to delays experienced in obtaining Local Government auditors’ reports. He also stated that the question of what alternative arrangements should be made was under examination and that it was hoped to institute procedures generally on the lines of those established in the Department of the Environment to verify the correctness of other local authority claims (see paragraph 28).

The Accounting Officer informed me that all civil defence grant claims which had not been audited by Local Government auditors would be dealt with under the proposed new procedures.”

Mr. Mac Gearailt.—Local authority claims for recovery of expenditure on Civil Defence were formerly certified by Local Government auditors. Because of arrears of work in its audit section the Department of the Environment decided that such claims would no longer be so certified. As indicated in the paragraph consideration was given to the alternative arrangements to be made for the certification of these claims and I understand that this is now being carried out on a test basis by departmental staff.

27. Chairman.—Does the witness want to say anything on that?

—Except that the situation is improving. We are getting through the arrears of the audits which had not been handled. Even though it was 1979 when we were finally told by the Department of the Environment that these audits could no longer be carried out, arrears had been accumulating for some years before that. We had some work to do in getting rid of those and are making good progress with staff in our own Department.

28. Chairman.—Paragraph 55 of the Report of the Comptroller and Auditor General reads:

“Subhead GG.—Office Machinery and other Office Supplies

Prior to July 1978 the Department of Defence relied on the computer facilities of the Central Data Processing Services (CDPS) of the Department of the Public Service for its data processing in connection with the payment of Army pay and pensions. This arrangement involved the use by the Department of Defence of a rented computer terminal located in its Finance Branch and linked by private telephone line to the CDPS computer complex in Kilmainham. In 1978 the monthly rental charge for this computer terminal and ancillary equipment was £2,000 approximately.

In 1978 the Department of the Public Service authorised the Department of Defence to enter into a three year rental contract for equipment which would replace the old terminal and would in addition enable the Department to computerise other work and process locally, data then being processed in CDPS. The contract provided for an annual rental charge of £37,000 approximately, and changeover expenses amounted to £1,100.

After the new equipment had been installed in July 1978 difficulties arose in using it as a computer terminal to transmit data to the CDPS computer and it became necessary to retain the old equipment for some months. From December 1978 the new equipment has operated satisfactorly as a computer terminal but has not been used as intended to enable additional work to be computerised nor to take over from CDPS the processing of data.

I have sought information from the Accounting Officer regarding the total additional cost of the new computer facility, the benefits which have accrued to date from its acquisition and the proposals for its utilisation to full capacity. I have inquired regarding the additional costs incurred by the Department during the period August to December 1978 when both the new computer and the equipment which it was intended to replace were under rental. I have also asked for information regarding the Department’s planning and control of this project.”

Mr. Mac Gearailt.—This paragraph deals with new computer equipment installed in the Department of Defence in July 1978 at an annual rental of £37,000, approximately, plus VAT, to replace older equipment and to perform additional functions hitherto carried out by the computer facilities of the Central Data Processing Services at Kilmainham.

Two considerations suggested that the decision to install this new equipment might have been somewhat premature. The old equipment was retained up to 31 December 1978 and certain additional functions intended to be transferred to the new equipment from the Kilmainham computer facilities had not been so transferred two years after the installation of the new equipment in the Department of Defence.

Problems associated with the new computer made it necessary to retain the old equipment up to December 1978 and the Accounting Officer has informed me that no additional costs were involved as the rental of the old equipment in respect of the retention period from July to December 1978 had been fully recovered.

The additional tasks to be performed by the new equipment relate to soldiers’ pay, officers’ pay and pensions. Of these, only one—the bank reconciliation of pensions—had been transferred to the new computer at the date of my report, in July 1980. The Accounting Officer has informed me that it was hoped to commence the transfer of the pension issues and officers’ pay system to the new computer early in 1981. Loss of experienced staff and staff deficiencies in the computer section upset the projected transfer of work to the new computer.

29. Chairman.—To what extent is the equipment being used for the purpose for which it was purchased?

—We are gradually introducing now the work which we had intended for this new computer. The original equipment was merely a computer terminal linked to the main computer in Kilmainham. But the new computer has the capacity both to act as a terminal and to process work on its own. In regard to the question of additional costs as a result of the retention of the old computer up to December, 1978 we are talking about rental costs both of the old and the new computer. We were unable to surrender the old computer simultaneously with the arrival of the new one because the new computer had a failure in its printing mechanism. We were fortunate, therefore, to be able to continue for the time being with the old computer terminal. In regard to the amount recovered which the Comptroller and Auditor General mentioned, we recovered the entire cost of the overlapping period of rental with the old computer and in addition we got £2,647 compensation for the loss of the printer facility for the new computer. My negotiating officers achieved quite a lot in that because they recovered both in regard to the old computer’s overlap and the new computer’s failure. The total recovery was £11,100 as opposed to the overlapping rental of only £8,500 for the computer which was being replaced.

In regard to the more general point raised by the Comptroller and Auditor General about the future use for which we intended the new computer, we had two rather unfortunate developments which could not have been anticipated when we decided to make this transfer. One was an unprecedented drop in the availability of expertise due to loss of staff. The second one was that in 1979 the Dáil enacted the Payment of Wages Act, section 5 of which permits the Minister for Labour to make an order determining that as from a given date all receipients of wages are entitled to a payslip. We have 12,000 soldiers paid weekly and because of different ranks, different periods of service, different rates of pay and different deductions from individual soldiers, this is a very complicated payroll system. The fact that the Minister for Labour had to make an order in which this new arrangement would come into operation meant that until we were ready to produce payslips we had to appeal to the Department of Labour not to make the order of commencement of operation until as late as possible. This has now been done. The new soldiers’ pay system providing for a payslip has been operating since November 1980. It was only in January 1981 that the enabling order under section 5 of the Act was brought into effect by the Minister for Labour. These two factors—the loss of experienced computer staff and the change-over to the revised soldiers pay system—delayed the full utilisation of the new computer.

30. Deputy O’Hanlon.—In relation to the loss of staff, did they leave the public service altogether or did they go to other Departments?

—Generally it is loss to the private sector that we are concerned about. The attractions of outside employment for people with computer expertise has been a source of concern to us and indeed to the Department of the Public Service with whom we are in constant touch about this.

31. Deputy N. Andrews.—It is the usual problem of private enterprises versus service in the public service. Have the Department ever examined the cost effectiveness and the efficiency of maintaining barracks in the centre of the city, such as Collins Barracks and Cathal Brugha Barracks? Are the security reasons sufficient to warrant a continuation of these two barracks?

—No, security is not the problem there. In fact, we have always been concerned with the growth of traffic in the city. Ready access to and egress from the city centre barracks has become a major problem. The difficulty is that there is so much money involved. In Cathal Brugha barracks in Rathmines there are major problems about military transport in an emergency moving quickly into and out of the premises. Big money is involved and the matter has been raised more than once in the Dáil. The Minister has indicated that, for the moment, it is not possible to get to the point where we can evacuate Cathal Brugha barracks. It would mean a complete new military complex in a suburban or more distant location. We had it in mind at one stage that our land in Gormanston might be used for building a new barracks but I am afraid that moneywise we are not in a position to face up to it.

32. Surely, first of all, many of the buildings in Cathal Brugha barracks in particular are out of date, inefficient, and some of them are probably irrepairable. The sale of this considerable property would give you sufficient money to build more modern premises in Gormanston or in some other area where you might have land already?

—We cannot even be sure of that. We might be required to hand over Cathal Brugha barracks to the local authority and there is no guarantee that you will get the commercial value in a transaction such as that.

33. I know we are bordering on policy here. What I am really concerned about is that it is not an effective military base with today’s traffic and with today’s congestion on the roads, and so on?

—That is the problem.

34. It is not modern. It is not sufficiently efficient for military purposes. It is a non sequitur as far as military operations and security are concerned. It is wasteful, in my view, of public money. We could use that money more effectively with a more modern establishment?

—In peacetime the disadvantage referred to in regard to access to and egress from the barracks has not proved that much of a disadvantage. What I was driving at was that, in an emergency situation, moving troops fast could be a problem there. In regard to the interior of the barracks, we have been maintaining it at the best possible level. While the married quarters of course are very out of date and very unsatisfactory, we are engaged in making some effort to renew these as money becomes available. With the priorities we do not have the capability financially to make a clean sweep and get rid of the barracks, the married quarters, and the whole set up.

35. It seems to me that it is a great waste of money that something could not be done to make the operation for which Cathal Brugha barracks was intended more efficient. It cannot be done with the traffic congestion as it stands now, and getting in and out. Perhaps in an emergency you have a contingency plan. I do not know. I do not want to know, but I am sure you have. It seems to me that Cathal Brugha barracks is very wasteful of public funds and I think something should be done about it. We will have to make a positive decision sooner or later and sooner rather than later.

—Yes, I understand.

36. Chairman.—On subhead B.—Permanent Defence Force: Pay—has there been any change or improvement in the pay position of our ranks? This matter was discussed before on the basis of the very big turnover in the Army?

—This matter is under constant review. In yesterday’s newspapers a report appeared that further benefits have been made available in the form of increased allowances to the troops. We are doing everything that we can to make recruitment as attractive as possible. The rates of pay are under regular and constant review. We did an examination of the reasons why we were losing personnel and pay is not one of them or, if it is, it comes very low on the list. One of the major reasons for the wastage from the Permanent Defence Force is the level of duties. With the existing strength, the level of security and other duties imposes a greater burden on the serving personnel, and we find this is the main reason quoted for the failure of people at the end of their initial period of enlistment to renew their engagement. We had an intensive recruiting campaign and I am glad to say—I am not talking about the 1979 Vote now which is the one we are considering—that in 1981 we are getting a steady monthly improvement in the rate of recruitment above the rate of wastage. Since November 1980 we are getting a constant net increase. The one disadvantage, of course, about this is that a new recruit is not adequate compensation for the loss of the trained man. We would prefer to keep the people we have. At least the situation has taken a turn very much for the better in the past three to four months.

37. Deputy Filgate.—On subhead F.—Civilians attached to Units: Pay, etc.—could we have a breakdown of the £6,810,000?

—The practice is that an explanation is included only where the variation between grant and expenditure is more than 5 per cent.

38. As a matter of interest, are civilians attached to units and are civilians working in the different barracks?

—They are. Many of them are tradesmen. In the Corps of Engineers and the Ordnance Corps we have people who are qualified to work in workshops and in barracks and also people who are necessary for various civilian duties. We endeavour as much as possible, through our apprentice schools, to have the serving personnel trained in various trades. In a war situation you would need uniformed personnel with these qualifications but in peacetime it has always been the practice to have Army workshops manned by civilians. We have, also, a number of different types of civilian employees other than workshop people. For example, in the Cork harbour area where we have our own transport vessels, we have civilian crews for these boats.

39. Deputy Filgate.—Is there a distinction between subheads F. and T.? There is no explanation for Barrack Services either. Are they separate?

—Barrack services are furniture and equipment for barracks. Delph, crockery, and even gymnasium equipment may come under Barrack Services.

40. That is distinct from Defensive Equipment at Subhead H.

—Defensive Equipment is what we used to call warlike stores, such as guns, tanks and ammunition.

41. Deputy N. Andrews.—On Subhead H.—Defensive Equipment—This is the purchase of defensive equipment is it?

—Yes.

£1½ million less than granted was spent. What was the intention when the Department were granted the £9,300,000. It is a considerable underestimation is it not?

—The saving in Subhead H. was due to the delivery of certain items, including armoured cars, mortar shells and large calibre ammunition, being slower than anticipated. The carryover of the unexpended money will have been paid out of the 1980 Vote rather than the 1979 Vote. All the provision of £9,300,000 which is an Estimate was committed, but unfortunately the goods were not delivered in time to be paid for.

42. Do the Department purchase from different sources?

—We purchase from Sweden, Britain and many other countries.

43. On Subhead D.—Reserve Defence Force: Pay, etc.—including I presume An Fórsa Cosanta Áitiúil, more money than granted was spent. I suppose the explanation for the £688,629 is overtime paid to soldiers supporting the regular Defence Forces.

—The excess was due to pay increases and an increase in the number of FCA personnel employed on full-time security duties.

44. Is there any explanation as to why the FCA allowances are now taxable? My recollection of the allowances of FCA volunteers, the annual allowance for training and so on, is that they were for extra duties or for duties in barracks, for training on Saturdays and Sundays, or whenever they train, and that these payments were tax free. They were not included in the individual’s outside earnings. There seems to be some stir about this taxation.

—There has been. What really happens is that when the FCA come up on annual training, for example, for their two weeks they are given standard rates of Army pay, the same as the Permanent Defence Force. During that two weeks they are treated as ordinary soldiers. The Revenue Commissioners have changed their approach to this. They have been looking far more carefully in recent years at the situation about taxing payments to the FCA and I am afraid that we do not have much say in this.

It would be more appropriate to take it up with the Revenue Commissioners?

—Yes.

Do the Department find that it is a cause for concern in recruitment into the FCA?

—No. It has never come to our attention from our military advisers that this has been a deterrent. It may be that it is not long enough in operation.

45. Deputy Filgate.—On subhead H.—Defensive Equipment—Is this the capital expenditure for the replacement of existing equipment or is there a build up of equipment? Does maintenance come into this or is it under a separate subhead?

—It is an element of both new equipment and replacement of existing equipment. One of the big items in subhead H has been considerable purchases of ammunition. The military authorities represented that our stocks of ammunition were running lower than they should and quite an amount of money has been expended on ammunition. In fact the provision for ammunition in 1979 alone, of that £9 million odd, was almost £6 million.

46. Where is maintenance of equipment accounted for?

—An element of maintenance comes under Subhead H but the amount involved in that provision was £820,000. It did not represent a large percentage of the total provision.

47. Deputy N. Andrews.—On subhead N.—Animals, Forage, Etc.,—is subhead N. related in any way to subhead W. and X. What kind of elements are we talking about? Are we talking about the Equitation School element?

—We are. In subhead N. provision is made for the purchase of showjumping horses. The forage is also included there. Subhead W. is simply the expenses of sending teams abroad, the cost of the airfare and of transport for the horses.

48. Under Subhead N. what purchases were made? Were animals bought under this subhead?

—They would have been.

How many?

—The amount for purchase of horses in subhead N. in 1979 was £103,000. As to the number of horses included in that I could not say.

49. It was just a point of information. But £103,000 was spent anyway on the purchase of horses?

—Yes. The point about purchasing horses is that it is very difficult to know whether one is going to be able to get horses of the quality required for first-class international showjumping. The price asked from time to time for some of these horses is very high and it varies considerably.

50. Chairman.—I can appreciate that. On Subhead CC.—Compensation—what compensation is paid?

—This compensation is largely for traffic accidents involving Army vehicles. It is one of the totally unpredictable subheads which we have to deal with. At times juries may award substantial damages to people who have been injured in accidents involving our vehicles. There have been years in which the total amount which has to be spent under that subhead was far in excess of what we had estimated. It is simply not possible to estimate in advance of the financial year, first, how many accidents you are likely to have and, second, about compensation you may have to pay. I remember one very simple accident where a child ran in front of an Army vehicle and, because it was established that there was a danger that the child might later suffer from epilepsy, the award made by the court was out of proportion to what we expected. You are really up against a very unpredictable situation.

51. Chairman.—On subhead DD.— Lands — can you explain a little more about that?

—These are Army lands which are associated in many cases directly with barracks. We have to acquire lands occasionally. For example, there was a sum in the 1979 Estimate for £40,000 for property which was adjoining Dundalk barracks and another £40,000 for the technical school at Longford. The word “lands” embraces lands and premises. When Dundalk barracks became one of the border posts which we were rehabilitating and enlarging, we had to acquire land adjacent to it and we spent £40,000 there. The technical school at Longford included building as well as land. That cost us £40,000. Under the general heading of “lands” we also have the hire of halls for FCA training operations. Sometimes we actually acquire sites and build FCA halls. All of this expenditure is accounted for under subhead DD.

52. Chairman.—On Subhead EE.1.—Assistance to Sail Training — there is a considerable amount under the heading “Less than granted” for sail training. Why was that?

—That was in connection with the construction of the vessel which the Taoiseach commissioned on Saturday last, the Asgard. In 1979 the saving incurred was due to delay in the construction of the vessel which the shipbuilders attributed to very late completion of a new building in the builder’s yard and the late delivery of an overhead crane. These slowed up the progress of the operation and the amount which we had expected to spend that year of £300,000 was not reached at all.

That subhead was purely for the purposes of the Asgard?

—Entirely.

It was not a question of assisting other sailing groups around the country?

—No. But in the immediately following subhead you have expenses of operation of the sail training scheme.

53. Where does that go?

—That is dealt with by way of a Grant-in-Aid. Coiste an Asgard, the committee responsible for organising sail training of which the chairman is the Minister for Defence, is composed of a number of people who are involved and interested in sailing and who have no connection with the Department. They administer that scheme. They do it on the basis of a Grant-in-Aid which is Subhead EE2.

54. Deputy Filgate.—Is there an expenditure element in the picking up of members of the defence forces, especially for duty along the Border, as distinct from ordinary transport? Is there a service in this regard?

—This would be for the transport of soldiers to and from their homes.

Yes.

—We have two ways of doing that. If there is transport which can be utilised to move soldiers in that way, it is made available to them, but otherwise they get travel vouchers to use public transport.

Such expenditure would be covered under the ordinary transport subhead?

—Subhead U.—Transportation, etc.

VOTE 47—ARMY PENSIONS.

Mr. M. P. Healy further examined.

55. Chairman.—Paragraph 56 of the Report of the Comptroller and Auditor General reads:

“Excess of Expenditure over Grant

The Appropriation Account shows excess expenditure of £35,571 over the gross estimate and a surplus of appropriations in aid of £43,146. The Accounting Officer has informed me that the excess expenditure was incurred because there were considerable difficulties in paying pensions and in accounting for the Army Pensions Vote during 1979. As a result of computer difficulties, including a shortage of skilled computer staff, precise figures of monthly expenditure on cashed warrants were not available throughout the second half of the year. The withdrawal of postal services in the first half of the year seriously disrupted the distribution of pension warrants and distorted the monthly pattern of expenditure for almost the entire year. In this connection the value of the warrants cashed in November/December exceeded the value of warrants in October/ November by £197,000. The Accounting Officer added that a firm of consultants had been engaged to resolve a number of difficulties in connection with the computer and that, as a separate measure, arrangements were being made to introduce certain organisational changes designed to improve control.”

Mr. Mac Gearailt.—The provision made in this Vote has been overspent and this paragraph indicates the circumstances in which this occurred as reported to me by the Accounting Officer.

In order to regularise the position it will be necessary for the Committee to bring the matter to the notice of Dáil Éireann by way of Interim Report recommending that the sum required to make good the excess be voted, if the Committee sees no objection to this course.

56. Chairman.—Have you any comments on that, Mr. Healy?

—I am reminded that there was a naval officer once who had a macabre sense of understatment and he said that a serious collision at sea can spoil one’s whole day. Excess on a vote can spoil the Accounting Officer’s whole day in the same sense. This might never have happened if the computer that we were talking about under the earlier vote had been available to us. The difficulty is that we are dealing with pensions under this heading and there are something like 22,000 pensions warrants issued every month. The amount of a pension warrant is not charged to the vote at the time of issue. It is not charged to the vote until it has passed through the banking system and returned to us for recoupment to the banks. Because they are not charged against at the time of issue it is very difficult to keep a parallel record of all these warrants as a potential charge against the vote as soon as they are cashed. We will manage far better now with an up-to-date reconciliation system. In the past it has been done on the basis that we have a regular flow of warrants. But in 1979, with the postal strike, a complete distortion of the situation arose. Many people apparently did not cash their warrants at all and coming towards the end of the year we got an inflow of discharged warrants which were at a level far in excess of the normal monthly sum coming for payment. It was too late when this became evident to have a Supplementary Estimate for the sum involved. After the end of the financial year we found that this amount of £35,000 had been over-spent. The level at which the warrants came to us in the last few months was really extraordinarily high and we were completely caught, but the installation in our new computer of a revised reconciliation system should enable us to determine, with greater accuracy, potential charges against the vote as well as the actual charges. The excess almost certainly would not have happened but for the complications introduced by the postal strike in 1979.

57. Deputy Filgate.—Have we any legacy in relation to pensions payable as a result of the 1921 Treaty? It is referred to here under Subhead G. Is that still a continuing factor with us?

—We are paying substantial sums by way of military service pensions. The military service pensions apply to the period 1916 to 1923 and military service pensions in 1979 amounted to over £1 million.

Under what subhead do we find 1916 to 1923?

—Under subhead D. We have three codes of pensions in the Department. Military service pensions are pensions in respect of service in 1916-1923. Defence Force pensions are pensions paid to the modern army in respect of service in the Defence Forces since the establishment of the forces and under the Army Pensions Acts all death and disability pensions are paid including those covered in subhead G for Special Allowances. Special allowances are paid to people who are disadvantaged through age or infirmity and can establish membership of the organisations, IRA, Cumann na mBan and so on. The 19161923 payments relate mostly to subhead D and G. Subhead D is purely service. It does not involve any question of a disablement. Subhead G relates to the people who, through age or infirmity, are disadvantaged veterans of the War of Independence and who get these special allowances subject to a means test.

58. Have we any explicit responsibility under particular articles of the Treaty in relation to pensions directly related to the Treaty?

—No. Our statutory obligations are confined to the legislation that we administer.

Chairman.—On behalf of the Committee I thank Mr. Healy for his help and assistance.

VOTE 15—STATIONERY OFFICE

Mr. J. F. Harman called and examined.

59. Chairman.—Paragraph 21 of the report of the Comptroller and Auditor General reads:

“Subhead D.—Printing and Binding

It was noted in the course of audit that a number of contracts entered into with a printing company had been terminated by the Stationery Office due to the inability of the company to carry out the work at the contract prices. Department of Finance sanction to terminate the contracts was accorded on condition that there would be no loss to public funds and in March 1977 the company agreed to pay compensation for any loss incurred by the Stationery Office in re-placing the contracts. I inquired as to the total amount established as due from the company, the steps taken to effect recovery and the amount recovered to date. I have been informed that a preliminary claim of £11,022 was made on the company in December 1979 and repeated in March 1980. This claim has been resisted by the company on the ground of inability to pay. Pending resolution of certain legal matters the amount concerned has, however, been withheld from sums due to the company under another contract.”

Mr. Mac Gearailt.—A printing company, which terminated a number of contracts because of alleged inability to carry out the work at the contract prices, agreed to pay compensation for any loss incurred by the Stationery Office in replacing the contracts. However, when it was presented with a preliminary claim for £11,022 the company pleaded inability to pay.

Prior to deducting this sum from monies due to the company on other contracts and pending the receipt of the advice of the Attorney General, the Stationery Office withheld from the company payment of a bill in excess of the amount of its claim.

I understand that the Attorney General has advised that the Stationery Office have the right of set-off in this case.

60. Chairman.—Have there been any further developments in connection with this?

—We wrote to the company concerned on 27 February telling them that the money had not been received and that we were prepared to deduct it. We are in the process now of deducting it from the company. The Comptroller and Auditor General mentions a preliminary claim of that amount. There are just four very small items in addition that have still to be fixed up. They are publications in the foreign treaty series of the Department of Foreign Affairs. These are kind of things that hang on a long time. The cost of one job is £58 and another is £36. The third has not been made out yet and it was delivered in January, and the fourth one has also not been charged. At the very most there is probably another £200 on those four bills. The amount which we will recover from the company in this case will be only the difference between the cost as it would have been under their contract and as re-arranged, and that might be £50 at the very most. Of course, as soon as the last order has been delivered, we will make out our bill and make the necessary deduction from the company, but that is a very small item.

61. Deputy N. Andrews.—You have an allocation there for consultancy services, what was it intended for?

—As I mentioned to the Committee on previous occasions, we have been in a very bad way as regards our quarters, the warehousing, and so on. We are in the process of moving—“process” may be too strong a word in the sense that the Office of Public Works are working on it. They are issuing a tender, I believe, next month for work on premises they have acquired for us at the back of Jacobs in the Aungier Street-Bishop Street area. They have a lot of work to do there. We were concerned to make sure that, if we are going into new premises—and most of this would be a good warehouse, up to around 30 feet or so in height—we would make the best use of it. Since then, but not in 1979, we have employed the IIRS engineers to do a job for us on it.

Chairman.—Thank you, Mr. Harman. I should like to apologise for holding you so long. We were running a bit late.

The witness withdrew.

VOTE 4—CENTRAL STATISTICS OFFICE.

Mr. T. P. Linehan called and examined.

62. Chairman.—I should like to welcome Mr. Linehan and to apologise for keeping him so long.

—That is all right.

On Subhead D.—Collection of Statistics — who gets the money for the collection of statistics?

—This expenditure relates to 1979 and the greater part of it was for the 1979 census of population. The actual collection of the forms was carried out by a large number of temporary enumerators who were paid an appropriate fee for the collection. That would account for the major part of the expenditure. Another portion would be payment for the regular collection of agricultural statistics each June.

63. Deputy Filgate.—This was the census statistics for 1979 and did not include a labour force survey like the ones in 1975 and 1977. Is that correct?

—In 1979 a labour force survey was also taken immediately following the census. Subhead D would cover the field costs of the collection of that information also.

I presume the cost of the labour force survey had increased in 1979 as against, say, 1975.

—It would have been greater, but the census would have been the greater proportion of that cost.

Each survey taken embraced a greater number of people?

—Not the labour force surveys. The 1979 labour force survey was slightly smaller than the 1977 survey because of the fact that it was directly linked to a census covering all the population at the same time.

64. Deputy N. Andrews. — On the Appropriations - in - Aid and the European Economic Community receipts, what are they and what happens to them?

—The receipts are in connection with some surveys carried out particularly in the collection of certain agricultural statistics. The money is paid as an Appropriation-in-Aid into our Vote.

65. Where does the money come from and for what reason? The estimated Appropriation-in-Aid was £145,000 and you realised £244,277. What is it?

—There is, in the Community, a statistical office located in Luxembourg. That, in conjunction with the statistical offices in the different countries, organises and tries to improve the harmonisation of statistics. For that purpose certain surveys are carried out. For example, the labour force survey we spoke about is one of those which is carried out on similar lines in all the countries. When a survey is organised especially with the Community objective in mind as well, certain funds are available in order to offset part of the costs of such a survey.

66. Are these surveys carried out at the request of the EEC, at your request, or both?

—In joint consultation. In the case of the labour force survey we try to ensure that it satisfies national needs as well as Community needs. We would have some national value from the survey as well. Part of the money is in respect of the collection of some of the agricultural statistics. We carry out two smaller sample enumerations in respect of pig statistics twice a year which were inauguarated especially for Community purposes. There are other similar livestock surveys and, as Community requirements are especially taken care of in them, there is money available for these surveys. The reason more was received than was expected was that some of the money was received more quickly than previous experience had led us to believe it would be.

Europe is becoming more efficient?

—This will mean that in 1981 we will be a little bit the other way round.

67. Deputy Filgate.—Do all these surveys include visual enumeration as well as the collection of statistics?

—All the surveys we are speaking of, that have Community backing, involve the actual collection of statistics in the field by somebody going to the person and getting the particulars.

I was speaking more in relation to a visual survey of buildings and houses.

—By actual visual observation of the field officer, no. There is not an inspection type of visual survey in that sense in all the surveys in question.

68. Is there not an updating of the maps, or was there at one stage?

—As part of the duties allocated to the field staff involved, in the labour force survey, yes. They would have been supplied with some maps and, if they came across the additional buildings which had not been on the maps when they received them, they would bring that fully up to date for us.

Chairman.—Thank you, Mr. Linehan.

The witness withdrew.

The Committee adjourned.

* See Appendix 4.

* See Appendix 5.

* See Appendix 5.