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)

Dé Céadaoin, 20 Deireadh Fómhair, 1982

Wednesday, 20th October, 1982

The Committee met at 3 p.m.

DEPUTY CROTTY in the chair.

Mr. P. L. McDonnell(An tArd-Reachtaire Cuntas agus Ciste) called and examined.

VOTE 45—POSTS AND TELEGRAPHS

Mr. S. Ó Ceallaigh called and examined.

640.Chairman.—Paragraph 45 of the Report of the Comptroller and Auditor General reads:

“Because of the postal strike which occurred in 1979 difficulties were experienced by the Department in compiling the information required for the preparation of the annual Appropriation Account. When the account was eventually submitted to me on 23 July 1980 the Department was still not in a position to produce the usual statement of balances verifying the balance to be surrendered. Pending the production of this statement I have accepted the balance as shown by the Appropriation Account as being correct.”

Mr. McDonnell.—This is a paragraph which had to be included in the report in that year because of the absence of a balancing statement. One could not be sure at the time that all the figures shown in the accounts were correct and the alternative was to hold up the certification of the account. The Statement was since made available and has been examined and I am satisfied that the figures are correct and are supported by the balancing statement.

Chairman.—This was an exceptional situation.

Mr. McDonnell.—Yes.

641.Chairman.—Paragraph 46 of the Report of the Comptroller and Auditor General reads:

“Subhead A.—Salaries, Wages and Allowances

Wages are paid to the staff of the Engineering Branch by means of a computerised system, the total paid in 1979 being of the order of £44 million.

In the course of audit of this system a number of weaknesses in control procedures came to light. These included the absence of evidence of authorisation on a significant number of input documents, an apparent lack of control over transactions being entered into the computer for processing, an inadequate level of checking of computer-produced reports to ensure the accuracy of payroll production and the absence of an overall reconciliation between the number of staff employed and the number in receipt of wages at any particular date. It was also noted that system documentation and a comprehensive set of user instructions, essentials in an effective computerised system, did not appear to have been produced. As such weaknesses and deficiencies could facilitate the introduction into the system of inaccurate or unauthorised data which if introduced could be difficult to detect and result in incorrect or invalid payments, I have asked the Accounting Officer for his observations.”

Mr. McDonnell.—This paragraph relates to the computerised payroll system which had been put into operation for the engineering staff of the Department. An examination which my officers carried out suggested that control in some areas could be improved and this was brought to the attention of the Accounting Officer. Following correspondence with the Accounting Officer and some discussions between my staff and officers of the Department the main problems were resolved. We recently had a look at the system and found that the control procedures being followed are proving to be effective. We are happy that the system has been improved.

Have you competent computer operators?

Mr. Ó Ceallaigh.—We have. We need more operators but the staff we have are competent. The Comptroller and Auditor General was concerned about the control of input to the computer system and that has been improved.

Have you qualified staff?

—We have for this work, but we would like more for other work.

What other work?

—Telephone information systems and so on.

We have enough staff for the wages work.

We will be coming to telephones later on and we will deal with the problems at that stage.

642. Deputy Crowley.—Do I understand that the Comptroller and Auditor General has no questions in connection with paragraph 46? Is he quite happy with the position?

Mr. McDonnell.—Yes. We found when we examined the system initially that there was a danger because the input to the computer was not being controlled. The danger with a computerised system is that if you get some wrong basic data into the system it can be very difficult to detect and to remove from the system. We discussed the problems with the expert in the Department of Posts and Telegraphs. I should say that my office have a section which is becoming specialised in relation to the auditing of computerised systems. We examined the system again after the discussion. We had a fair amount of correspondence with the Department. They agreed with our recommendations and we sorted out our problems. Recently we had a look at it and we found that it is working satisfactorily. I suppose one can always keep on improving it but we think it is adequate in the present situation.

643. Chairman.—Paragraph 47 of the Report of the Comptroller and Auditor General reads:

“Subhead C.—Accommodation and Building Charges

The charge to the above subhead includes £436,682 in respect of rent, etc., of 64,000 sq. ft. of accommodation in a Dublin office block leased with effect from 1 October 1978 at an annual rental of £277,095 plus service charges and insurance.

An inspection by my officers in April 1980 revealed that only a small proportion of the area leased was then occupied by departmental staff although the Department of Posts and Telegraphs had been given full access to the accommodation in January 1979. It was also noted that certain works such as the erection of partitions and laying of floor coverings had yet to be completed at the time of the inspection.

The Accounting Officer has informed me that in the normal course rental is payable from the date on which the lessor agrees to lease a building but the property is not occupied until the legal formalities have been completed. In the case of the building referred to, agreement on a draft lease was reached in January 1979 and a staff of 45 moved in; the staff occupying the building has since increased to 74 apart from 30 trainees who attend training sessions. The Accounting Officer stated that the complete fitting out of an office block of this size would normally take at least a year and that the main causes of delay in completing this work were the provision of kitchen and dining facilities and the revision of partitioning requirements.

In regard to the kitchen and dining facilities the Accounting Officer informed me that it was originally intended, mainly for reasons of convenience and suitability, to provide the kitchen, dining and welfare facilities on the third floor. The staff associations, however, pressed strongly for full dining facilities and because of technical problems in connection with the provision of extract ventilation ducts, etc., the consulting engineers advised that the kitchen, etc., be transferred to the sixth floor so that the ducts could be taken through the roof. Permission for this work had to be obtained from the lessors who in turn had to obtain advice from their consulting engineers. This caused prolonged delay and revised drawings became necessary. The Accounting Officer stated that a contract for this work had been placed recently and was due for completion in September 1980.

In regard to the revision of partitioning requirements the Accounting Officer informed me that the partitioning layout had to be revised extensively because of

(a)the transfer of the kitchen, dining and welfare facilities to the sixth floor,

(b)changes in operational requirements and

(c)revisions carried out in consultation with the architect to ensure optimum use of the available space.

He stated that a large part of the partitioning had been carried out and that the balance was held up pending agreement with the staff regarding the detailed arrangements for their transfer to the building. Negotiations on this matter and on the related question of a disturbance allowance for the staff to be transferred had been taking place and if these could be completed quickly it was hoped that most of the rest of the building would be occupied by October 1980 unless some unforeseen difficulty arose in completing the contract for the kitchen, etc., or the partitioning or in providing the furniture needed for the staff who would be occupying the building.”

Have you anything to add, Mr. McDonnell?

Mr. McDonnell.—This paragraph refers to what seems to me to be excessive delay in occupying space leased by the Department in a large office block from October 1978 at an annual rent of £277,095. The charge to subhead C. includes £436,682 in respect of the rent and other outgoings on this building up to 31 December 1979. The Accounting Officer’s explanation of the delay is included in the paragraph. I understand that this accommodation became fully occupied in September 1981. Total outgoings for 1980 and 1981 on this area came to a further sum of almost £800,000 and I understand that the Department have also taken additional space of about 21,000 sq. ft. in the same building. I should also explain that the Department of Posts and Telegraphs look after the provision of their own accommodation needs, unlike other Departments whose needs are catered for by the Office of Public Works. The question of unoccupied accommodation generally will come up when the Committee are considering the Office of Public Works Vote because there is also a reference in the Report to that Office’s area of responsibility. It is paragraph 19. The Post Office is a particular case.

Deputy Crowley.—Why is the Post Office a particular case?

—It looks after its own needs.

Why does it have to look after its own needs?

—Because it has such big and varied requirements. The Office of Public Works agreed that the Department of Posts and Telegraphs, in consultation with the Office of Public Works, should carry out its own leasings. New accommodation is obtained through the Office of Public Works. If it is necessary to build a new post office or a new telephone exchange that is done through the Office of Public Works. Leasing is done directly by the Department of Posts and Telegraphs in consultation with the Office of Public Works and Valuation Office.

Deputy Foley.—On a point of information, what is the term of the lease? Is it 21 years?

Mr. Ó Ceallaigh.—It can vary. It could be quite a short-term letting of a year or two years, or a lease of 20 or 25 years with a break after three, five or seven years. We have different terms in respect of different leases. We have no standard lease. Generally it is about 20 or 25 years.

This must be a very serious case having regard to the amount of money involved. It amazes me to find that most of this accommodation was vacant for most of that year and also that it would take almost a year to refurnish these offices. When it was being negotiated was it possible to negotiate on the basis that you would have to do certain alterations and provide furnishings and so on before tying-up the lease?

—Of course one tries to negotiate the best terms. In general you can get agreement to a rent-free period of say, three or six months and you would try to get that, but three months would probably be the limit you would get.

I accept that for 1979, but what would be the position at the moment if you had to rent accommodation when competition is so keen? Are you in a position to negotiate your own terms?

—We are doing very little leasing at the moment. We got all the accommodation we wanted over the last few years. We negotiated the leasing of a number of new buildings but we have all that we need at present. However, in every individual letting you are up against a certain amount of competition and the deal depends really on the market. One tries to negotiate the best deal one can get but you have to set two things against each other. If you get a rent-free period that is one thing, but you may pay for that in the actual rate charged, so it is really a question of balance.

How many staff would be involved in this building?

—About 500. This building proved exceptionally difficult. In the normal course we would have thought that it would be occupied in about a year but we ran into a succession of problems in occupying it. We had to change the original plans because we found that certain groups of staff whom we had not intended to put in there would have to be accommodated there. With one particular group we found there would be practical difficulties if some other staff were not located in the same building because they worked very closely together and that necessitated some change in plans. We ran into problems then, as mentioned in the report, with canteen facilities. We had in mind originally provision for quite limited facilities but the staff insisted on getting full canteen facilities and that necessitated a change in the plans and bringing the canteen from the third floor to the sixth floor. We ran into problems also about the payment of disturbance allowance and finally when we thought all these problems were settled we then had problems about car parking space—there is only a limited amount of parking space and the different staff groups wanted that allocated differently. That added to the time it took to get the place occupied. We have roughly, 100 car parking spaces for about 500 staff. It was a combination of these factors that made this unusually long. It should have taken about a year. In fact it took us over two years to get it occupied.

644.Deputy Crowley.—Was there not an appalling sucession of errors here? Was any one person to blame or were a number of people to blame? I cannot understand this. Maybe it is too much for me but if this was any private firm they would have gone bust the following day. They could not tolerate this.

—I do not think that would be a correct way to describe this. It was a series of events. What was clear when this building was taken towards the end of 1978 was that we needed additional accommodation. It had not been fully determined at that time what staff would go into the building. It was known that we needed a great deal more room and the planning had to start from then. It would at best have taken at least a year to get the place fitted out and occupied, but we had these additional exceptional factors cropping up. I accept that the period it took was certainly too long by any normal standards, but we ran into quite exceptional problems.

Chairman.—It would appear from this heading and the remarks of the members here that there was a lack of planning in this instance. You mentioned in your last comment that the decision was not taken on what staff would occupy the building. That is an awful statement to have to make. In other words, there was no planning as to what staff would go there and you were just meeting situations as they arose.

—It is not too easy to plan because you have to take what is on the market. If you get a place suitable to be occupied by 100, 300 or 500 people you would plan differently in each case. We were increasing staff at the time in anticipation of the telephone development programme. This building came on the market and we decided that we would have use for the building and that it was desirable to take it while it was an offer. There were a number of options and it is a question of taking the best combination of options between the different types of staff who were effectively overcrowded.

Are you telling the Committee that office accommodation is negotiated when the building is completed? I would imagine that letting agents would be circulating what was available to likely customers once the plans for a building were drawn up even before building took place, and that this would give anyone who wished to take accommodation ample time to plan for the occupancy and the type of building and office space required and the division of it.

—It depends. In some cases what you say is true and it should generally be the case before the building is fully developed. In other cases you may be casting around and may not be particularly attracted to the building. You may regard the price as high or may not like some of the features, but you may find yourself eventually taking the best that is going. This is what happened in this case. There was a total need for more accommodation and that could have been met in quite a number of ways by redistribution between professional engineers, clerical and technical staff and so on. This had not been decided when the building was leased.

You mentioned such an effort regarding the planning. It would appear that forward planning was very lax in this situation and that one of the problems about the occupancy of the building was the division of the building from the point of view of providing office accommodation. The block was leased from 1 October 1978. When were the architects appointed to plan this building by your Department?

—I have not that information.

It is not referred to in the report.

Deputy Foley.—No.

Chairman.—Can you send us a note telling us when the architects were appointed?* You referred already to the fact that the lease was signed on 1 October 1978 and the Comptroller and Auditor General informed us that it was fully occupied on 1 September 1981. Is that correct?

—Correct, fully occupied. It was largely occupied in June 1981 and fully occupied by September 1981.

June 1981?

—Some staff were there at an early stage.

But a very limited number.

—Very limited at that stage.

The overall charge as stated in paragraph 47 of the Report of the Comptroller and Auditor General was £436,682 in respect of rent etc., and would seem to cover service charges and insurance which are referred to at the end of that paragraph. Could you give us a breakdown of those charges?

—I will let the Committee have a note of it.* I have not that information with me.

Would it be normal for the Accounting Officer to have it available for this Committee? I am rather new to this business—

—I am rather new to it, too.

Mr. McDonnell.—Perhaps I could help the Committee. The 1979 figure of £436,682, which was mentioned in the paragraph, can be broken down as rent £346,000 odd, service charge about £88,500 and insurance about £2,000. That comes to the full amount. That is for 1979 only.

—And portion of 1978.

Mr. McDonnell.—That is the rent up to the end of 1979, including the broken period of 1978, I presume.

Would the Accounting Officer have any further information on this?

Mr. McDonnell.—I have this information which I can give to the Committee if the Accounting Officer has no objection. For 1980 there was a rent of £277,000, which is the annual rent. There was a service charge of almost £71,000 and an insurance charge of £15,000.

Is this for 1980?

Mr. McDonnell.—Yes.

Have you the information for 1981?

Mr. McDonnell.—I have. The rent is again £277,000, a service charge of £146,000 approximately and an insurance charge of £11,000. Those figures were taken out recently. They are subject to the Accounting Officer’s confirmation. They might not be quite accurate.

Mr. Ó Ceallaigh.—I would accept them.

Mr. McDonnell.—I would expect only slight differences.

—I would assume that they are fairly correct.

Mr. McDonnell.—This gives a total for three years of approximately £1.3 million to the end of 1981.

645. Deputy Crowley.—I have a number of questions. The service charge covering the first 15 month period was £88,500, in the year 1980, it was £71,000 and the following year it was £146,000. Could we have an explanation of that and also the insurance increasing from £2,000 to £11,000.

Chairman.—To £15,000 and back down to £11,000.

Deputy Crowley.—That is correct.

Mr. McDonnell.—I have mentioned those figures with a certain amount of caution. They have been taken out without going into any great detail. What Deputy Crowley says is quite correct. There seems to be a distortion in the trends. This was only by way of helping the Committee.

Chairman.—I appreciate that.

Mr. McDonnell.—I do not understand why the service charge should have fluctuated or why the insurance charge should also have fluctuated.

Deputy Crowley.—Could we have an explanation of that?

Chairman.—The Accounting Officer has no details for these.

—I can include it in my note to the Committee.*

Could you also let us have information of what the service charge covered in those years? Seeing that the building was not occupied, why was there a service charge? What was this service charge for? Could we also have an explanation about the insurance charge, which comes to a total of £40,771 for a period when the building was occupied for only three months? An expenditure of this size is a very serious matter and something of which this Committee must take a serious view as this is expenditure out of public funds voted for accommodation when the accommodation was not used.

Deputy Crowley.—Was this a new building?

—A completely new building.

Chairman.—Is the building now satisfactory?

—Yes, it is.

And is it fully occupied?

—Yes.

The Comptroller and Auditor General has mentioned in his report that you have taken 21,000 extra square feet.

—That is occupied.

How long did it take to occupy that new building?

—That was occupied quite quickly, within months.

646. Are there any other buildings which the Department own or lease which have not been occupied?

—We took quite a number of buildings in 1978, 1979 and 1980 and with two exceptions I think that they are all occupied. One of these will be occupied next month. It was taken late last year. The other is a building taken also last year. That will be the headquarters of the new Telecommunications Board when established. It is being fitted out at the moment.

That is not occupied and you have it 12 months?

—Yes, it would be close to 12 months, but it is at present being fitted out, partitioned and so on.

Is this the building on Merrion Road?

—No, this is not the building on Merrion Road. This is part of Ardilaun House at the corner of St. Stephen’s Green. The Telecommunications Board are fitting this building out to their requirements for the future.

647. We have already covered the ground regarding plans for occupying buildings. It would appear that there was a lack of planning in this building and we asked about the appointment of the architect, and to be sent a note on this. You have mentioned disturbance money. Was disturbance money paid in this case?

—There was, yes.

What did it amount to?

—I have not the exact figure, but it was paid on the scale of disturbance figure agreed with the staff unions. It is £100 for removal up to one half of a mile and on a rising scale up to a maximum of £620 for distances over six miles. The amount paid would be of that order. This is the agreed payment throughout the Department for disturbance.

Is this a union agreement which still exists?

—Yes, and it does still exist.

Even if the accommodation is improved and is more central?

—That is so.

That would seem rather ridiculous to me.

Deputy Foley.—Could I mention that that is still a bone of contention in relation to the Tralee office.

—It is, yes. Could I say that the Department of Posts and Telegraphs were not the leaders in paying disturbance allowances. We followed rather belatedly what went on in industry.

I believe that this matter is causing a problem in this new building in Tralee.

—I expect that would be so.

The building is 12 months vacant. The Post Office engineering section has not yet occupied it.

648.Deputy Crowley.—Could we have any idea of the total figure for disturbance paid as a result of moving to this famous building under discussion?

—I have not the exact figure, but would estimate that it is probably an average of £200 per man for 500 people.

Deputy Foley.—That is £100,000.

649.Deputy Crowley.—Has the Department for Posts and Telegraphs given any thought to designing and building their own buildings and fully fitting these out, so that we would not have to pay a rent of £277,000 for one to four years without them being utilised? We have discovered that the cost has been £1.3 million for a building before it is occupied. Have you given any thought to that?

—Yes, the question of the Department providing buildings designed to meet its own needs is considered and we provide quite an amount of that type of accommodation, primarily outside Dublin. It is considered in Dublin as well but the general conclusion is that we are better to take lease of buildings. The question of the Department and the civil service as a whole providing their own buildings is considered centrally.

Are the Department of Posts and Telegraphs happy with that decision?

—Yes, in general.

650. Could we have some indication of how much rent the Department of Posts and Telegraphs pay each year for leased buildings?

—I do not know the figure but it is possibly in the Estimate.

Is that figure not available in the Estimate?

—It just shows three figures for rent, rates and lighting.

Could we have that figure?

—Certainly.

651.Chairman.—Does the Accounting Officer feel that the occupancy of buildings by his Department compares with the time lag for commercial firms?

—I think in general it does. We have been trying to improve our performance. We have not our own architectural staff. We have to work through the Office of Public Works in relation to the fitting out of those premises. They have to get competitive prices. We have to start negotiations with different staff groups. All of this takes rather longer than would happen in the case of commercial firms. If a man decides to change his factory or his office, he can do that very easily. The system in regard to our Department is rather slower. That is not to say that we could not improve on it and we are trying to do this.

Chairman.—The picture as painted shows that this situation is very unsatisfactory particularly in relation to this building and in regard to other buildings about which the Accounting Officer has given information, such as the building for Telecom. Could the Accounting Officer give us any idea how long that will be leased before it is occupied? I believe it is now leased for 12 months. How long will that building be on hands before it is occupied?

—I could not say definitely. Work is in progress there at the moment. I will consult with An Bord Telecom and I will include that in the note.*

Chairman.—This appears to be a very unsatisfactory situation and reference should be made by this Committee to this fact.

Deputy Crowley.—It seems to be an on-going situation and we are not alleviating the situation at all. Now there are two other buildings which have been taken over?

—It takes time to get this work done. These are big buildings. In the case of Cumberland House one of the problems which we had for a period is that the builder went into liquidation. There were several problems in relation to that. In the case of the new building for An Bord Telecom that is a major building and it takes time.

652.Chairman.—It would appear that some of the delays were caused by the Office of Public Works.

—I would not like to attach too much blame to them. They have a Government tendering system which they have to operate and that takes time. There are certain penalties attached to that system.

Do you feel that the system could be changed, updated and brought into line with commercial firms seeing that public finances are very scarce and the State must be able to compete?

—We obviously have to learn from this. With regard to Cumberland House, it took too long and we must learn from that. We are trying to learn from this experience and see how we can improve our performance.

653.Deputy Crowley.—Would the Accounting Officer consider that if the Department had its own architectural staff that would alleviate the situation? Who owned the building formerly? Whom did the Department least if from?

—I have not the name of the original owner of the building. Perhaps the Comptroller and Auditor General has it. The Department of Posts and Telegraphs have considered from time to time getting their own architectural staff. This has some superficial attractions. People would be available to the Department but the experience of the Office of Public Works over a very long period is that you lose quite a lot of architects and while you may gain at some stages you may be very badly caught at others. You would have to recruit through the Civil Service Commission and you might not be able to fill vacancies that quickly. Apart from that we had a very big building programme over the last few years and when that is completed we will be finished for perhaps the next 40 to 50 years.

654.Chairman.—The Accounting Officer mentioned about learning from mistakes. I am sure the Department have occasionally occupied new buildings over the last ten or 15 years. Is that correct?

—Yes, but not to any great extent. We had fairly substantial expansion over the last few years which was not paralleled in earlier years.

I would expect also that the Office of Public Works would have been available to give you advice and that the Department of Posts and Telegraphs would not have to expend large sums of money to learn how to lease a building and to furnish it. That is putting it rather crudely but it is public funds and we must account for it.

—We work through the Office of Public Works in relation to the fitting out of those buildings. As I mentioned earlier, we had quite a number of exceptional problems here which were responsible for the delay. We ran into problems, which are mentioned in the Report, about the canteen. We had difficulty in getting a contractor to complete partitioning. He went into liquidation. We had a problem in relation to disturbance allowances and a car park and all those added to the time involved.

655. In paragraph (c) it states that revision was carried out in consultation with the architect to ensure optimum use of the available space. That is what prompted me to ask when was an architect appointed to give the Department advice on this. I would not accept that that should be a reason for holding up occupancy of the building.

—In this case plans were drawn up initially with the architect involved and it was necessary to make certain changes in relation to the groups of staff who would occupy this particular building. That is what is referred to in paragraph (c) in relation to a revision that was carried out in consultation with the architect.

Mr. McDonnell.—The Office of Public Works has its own problems and as I said in my opening statement that is also dealt with in my report and will come up in a general way.

656.Chairman.—That will be before us shortly. Paragraph 48 of the Report of the Comptroller and Auditor General reads:

“Subhead F.—Engineering Stores and Equipment

Under the departmental procedures in operation during the year District Engineers had delegated authority to place engineering contracts for works costing up to £500 by the issue of local orders, contracts in excess of that limit being placed by the Central Engineering Contracts Section.

An examination carried out by my officers of the payment records of two District Engineering Offices revealed that orders were being repeatedly placed with the same contractors for local works. While the value of each of these orders was below the £500 limit the work involved was of a type, viz., ducting and pole erection, which is required on a continuous basis by the Department. The total value of such local orders placed with individual contractors amounted over the period June to December 1979 to considerable sums and ranged in eleven cases from £10,000 to £36,000. As contracts for this type of work are controlled in all other engineering districts through the Central Engineering Contracts Section I sought information from the Accounting Officer as to why the contracts for such works in these two districts were not controlled by that section.

He informed me that the local orders referred to concerned contract work relating to duct laying and pole erection in housing estates and other areas which usually has to be carried out urgently to meet important local development and provision of subscribers’ installations, etc. He stated that these contracts normally entail a labour element only, the full value of which is difficult to estimate at the outset by reason of the nature and character of the work and that because of a shortage of engineers it is not always possible to plan such projects well in advance. Owing to the necessity for expenditious completion of certain works the District Engineers in the two districts concerned had placed contracts by local orders after seeking competitive tenders. The Accounting Officer also stated that the works in the two districts were undertaken generally by local contractors who were known to be geared up and in a position to undertake the works without delay and he confirmed that the amounts paid to them were fair and reasonable and in line with charges for similar works carried out under engineering orders.

The Accounting Officer added that all District Engineers were being reminded of the necessity for strict observance of their limits of authority in future and were being informed that they should consult headquarters in advance in any case where they considered that a local order for an amount in excess of the limit should be placed because of the urgency of the work.”

Mr. McDonnell.—In this paragraph attention is drawn to a practice which was adopted in two of the district engineering offices. There are a number of district engineering offices and two of them apparently, I would think, to circumvent the requirement that all contracts above a certain value should be controlled from headquarters, were adopting certain practices outlined in the paragraph. Again the Accounting Officer’s explanation of the circumstances which led to this being adopted locally is outlined there. The figure of £500 on a local contract is mentioned there but that is now £1,000 and may even be more by now but that is my latest observation.

Could the Accounting Officer assure the Committee that there is no malpractice involved?

—Yes, I can give the assurance. The local district engineers did this as they saw it in the interest of the service, to get on with the job. We have overcome that problem since by placing contracts running over a period of, say, 12 months under which they can place orders from time to time when jobs crop up. I can assure the Committee there was no question of sharp practice or anything like that; it was just a desire on their part to get on with the job. The prices charged were reasonable and fair.

Perhaps we should commend them for that. Were the Department aware of this practice being undertaken?

—No, we were not until the Comptroller and Auditor General reported on it.

Under the contracts system the maximum allowed is £500 and there is reference here to cases from £10,000 to £36,000.

—These were numbers of individual cases totalling that amount over a period.

657. Could the Accounting Officer inform us how does the cost of work carried out by these locally appointed contractors compare with the cost of similar work carried out by the Department staff?

—It is broadly the same, taking everything into account. We employ contractors to supplement the efforts of our own staff mainly for ducting and poling work. They have the equipment and they are local and it would not pay us to have the equipment in each of the areas where, for example, poling work is undertaken. Generally it is cheaper to have contractors in those cases.

Would you have any information on how many contractors would be requested to tender? There is no question of any little clique?

—What happens is that we advertise these locally and we get quite extensive competition.

Deputy Foley.—Would it be fair to ask the two district sections involved there where the problems were?

—Cork and Limerick.

Limerick, and Kerry is controlled through Limerick I understand. I have this from the staff involved and I understand that the situation is now greatly improved. Back in 1979 the orders had to go through Limerick and then through Dublin and this is now changed to short-circuit that procedure and they now come through direct. This change has improved matters I understand. Is that correct?

—We have made a number of changes. We have decentralised quite a lot of work to the districts and with the decentralisation we have given authority to go with it. Districts have to refer back to headquarters to a lesser extent on a wide range of work.

There is no doubt that the position has improved since 1979?

—We believe so.

658. What are the contracts mainly concerned?

—Mainly poling and ducting.

You mentioned that they are advertised locally. Is it accepted practice if a particular person is in and on the job, all things being equal, that he will continue with the work?

—It is not possible to answer yes or no. If you get two firms tendering precisely the same price and you have experience of one you probably would tend, since you know that they can do the job, to let them continue. But if you have a contractor and somebody submits a lower tender and you believe he can do the job, there is no reason why the lower tender should not be accepted.

Who decides whether he can do the job or not?

—In the case of ordinary contracts that is decided by our headquarters contract section.

Would they accept the advice of the local district engineer?

—No, they get the advice of the local engineer but they do not necessarily accept it. Obviously they would pay attention to it.

Without wishing to delay the meeting I agree with the question the Chairman asked as regards the systems. My point is that where a man is in possession, even though another man will submit a lower tender, it may be decided that he is not in a position to do the work, that he has no experience of it.

—What normally happens is that if a person tenders very low——

No, not very low.

—you might be doubtful about whether he had the capacity to do it but if somebody tenders reasonably for a fair big job and he has not previous experience you would normally give him part of the contract and try him out.

He would get part of the contract?

—That is right.

I am satisfied with that. But I may point out that it has not happened as far as I know in one section.

What proportion of lowest tenders is accepted?

—Sorry, I have not that information but the Committee may take it that all these contracts are placed subject to the rules of the Government Contracts Committee and these prescribe what happens if you are passing over a lower tender. You must be able to state why précisely you pass it over and the Committee must be satisfied with the reasons.

659.Chairman.—Paragraph 49 of the Report of the Comptroller and Auditor General reads:

“Engineering Works Orders

A budgetary control system operated by the Engineering Branch provides that in the case of each engineering project a works order is maintained showing the estimated cost of the project and the actual costs under the various expense heads, viz., labour, stores usage, etc., as they are incurred. The effective functioning of this system requires that details of charges should be recorded promptly on the works orders. These should be closed as soon as possible after the projects have been completed and should be reviewed promptly for financial control purposes.

In the course of audit it was noted that there had been considerable delays in reviewing some completed works orders and also that some outstanding orders were not being followed up and I sought the observations of the Accounting Officer.”

Mr. McDonnell.—This paragraph relates to a breakdown in an important control procedure designed to enable the Department to determine whether excess costs are incurred on Post Office engineering projects. Expenditure on engineering works throughout the country is controlled by means of Works Orders. Each individual job and its estimated cost must be authorised beforehand and actual costs under various headings must be recorded as they are incurred. This enables discrepancies between estimated and actual costs under the various headings to be investigated when the job is finished. The paragraph points out that very many completed works orders were not being reviewed and that some outstanding orders relating to completed works were not being followed up. The Accounting Officer informed me in January 1981 that of all orders opened between 1970-71 and 1978, just under 2,000 had not been closed although work was still in progress in only about 660 of these. Of the remaining 1,300 or so where work had finished, about 550 were in the process of being closed leaving about 750 cases to be dealt with. He stated that difficulties arose in closing main works orders due to the increase in the number opened following the telephone development drive, the inexperience of engineering field staff, shortage and turnover of clerical staff and backlogs of work arising from the engineering and postal disputes of 1978 and 1979. Special arrangements, including the allocation of extra staff and a reduction in checking, had been made for the clearance of the arrears and it was hoped to have this work up to date in six to nine months at which stage consideration would be given to the future level of checking. In addition extra staff was allocated to the district engineering offices and they were reminded to keep these orders under review. It was also arranged that unclosed orders would be reviewed twice yearly. The work is now reasonably up to date and this has been done without any reduction in the level of checking. It was a budgetary control procedure which we saw as essential to control costs.

Chairman.—Did failure to review the completed work orders or to follow up work orders create any loss of State funds?

—No. It was desirable to control these costs. The work is up to date now and has been so for the last six months.

Would the checking of these work orders help in controlling outgoings on current work?

—These work orders show the costs of material, labour and so on and are given to the field staff who are in control of the job. They are told to watch them and bring to notice any excesses.

660.Chairman.—Paragraph 50 of the Report of the Comptroller and Auditor General reads:

“Stores

A test examination of the store accounts was carried out with satisfactory results. In addition to the engineering stores shown in Appendix II as valued at £22,778,157 at 31 December 1979, engineering stores to the value of £17,379 were held on behalf of other government departments. Stores, other than engineering stores, were valued at £3,305,732 including £1,296,693 in respect of stores held for other government departments.

Including works in progress at 31 December 1979 the expenditure on manufacturing jobs in the factory during the year amounted to £138,890, expenditure on repair work (other than repairs to mechanical transport) to £317,848 and expenditure on mechanical transport repairs to £44,261.”

Mr. McDonnell.—This is more or less a standard paragraph which reports that the store accounts kept by the Department have been examined as I am required to do by legislation. It also gives figures on the value of the engineering stores and other stores which were held at the end of the year.

Chairman.—I should like the Accounting Officer to comment on the value of the stores held on 31 December 1979. They appear to very high.

Mr. Ó Ceallaigh.—It is relatively high. Largely because of high interest rates, we are concerned to keep our levels of stock as low as we can. Our level of stock is equivalent to an average six months’ usage. That is broadly in line with international telephone Administrations. There is quite a mix of stock. We try to keep a level of stock available so that staff can be productively occupied. We have a month’s supply of some types of stock but in the case of poles we might have a two-year supply. We normally order them from the Baltic at the end of the felling season. We get them in the following summer but they must be left to season for about a year. In order to guard against a failure we keep a two-year supply of poles. Over the last three months we set up a group to look at the whole question of stores and see if we could effect economies in this area.

Commercial firms keep their stocks to a minimum. In relation to stores have you any problems with regard to security, depreciation of stock or equipment becoming obsolete? We are all aware of the technological advances in telephones and telegraphs. If large amounts of stocks are held they could lose their value.

—I take the point. In general our main stocks are of cables, poles, telephones and switchboards. There is no danger that these will become obsolete. However this problem could arise in the case of telephone exchanges where we are changing from the step by step cross bar exchanges to digital exchanges but in general we try not to have a large amount of spares for these.

661.Chairman.—Paragraph 51 of the Report of the Comptroller and Auditor General reads:

“Revenue

A test examination of accounts of postal, telegraph and telephone services was carried out with satisfactory results. The net yield of revenue for the years 1979 and 1978 is shown in the following statement.

Due to the disruption in the Department’s accounting system following the postal strike in 1979, the figures for that year are provisional. The telegraph and telephone revenue figures for 1979 include £2 million and £14 million, respectively, which, due to billing delays caused by industrial action in the Engineering Branch in 1979, were not collected in that year. Furthermore, because of the postal strike, the collection of telephone revenue amounting to £36 million and telegraph revenue amounting to £6 million was delayed until 1980.

£109 million was paid into the Exchequer during the year leaving a balance of £2,268,810 at 31 December 1979. Sums amounting to £223,407 due for telephone services and £4,973 for telegraph (telex) services were written off as irrecoverable. I have made a test check of amounts written off with satisfactory results.”

Mr. McDonnell.—In this paragraph I am reporting on the accounts of revenue from the Post Office services which have been examined with satisfactory results. I should draw attention to the fact that if we compare figures for the two years a number of factors arose which caused distortions, so some additions and subtractions will have to be done before we can have a valid comparison. Apart from the delay in collecting revenue under those headings in 1978 and 1979 the postal strike caused an actual net loss of revenue from the postal service.

662. Deputy B. Desmond.—Have you any idea of what the revenue would have been in 1979 if the dispute had not occurred?

Mr. Ó Ceallaigh.—We had budgeted for revenue of £43 million. It was £31 million.

The projected loss was around £12 million.

—Yes, but we did not pay the staff during the dispute.

663. On the telephone revenue side £36 million was delayed and the telegraph revenue amounting to £6 million was delayed until 1980. In terms of cost to the Exchequer have you done any calculations on that?

—We estimate that we lost between £12 million and £14 million on the postal side during the strike and about £8 million on the telephone and telegraph side. Those figures have been offset to some extent by the non-payment of wages. This is particularly so in the case of the postal side. We did not carry out an overall assessment of the net loss as against unpaid wages. On a rough calculation the strike probably cost between £5 million and £10 million to the Exchequer.

664. Chairman.—You appear to have encountered staff and industrial difficulties for a number of years. What is the situation at present? Are you taking action to see that there are the least possible number of disturbances?

—There were difficulties in 1978 on the engineering side and in 1979 on the postal side but I am glad to say that we are back again to a situation where relations are good. We give this matter close attention.

665. With regard to the question of revenue from the telephone service, at present there are problems in relation to telephone accounts. There is much unrest about these accounts. What is the up-to-date position?

—The first requirement is that one should have confidence in the system. The problem is that people do not have a meter in their own home where they could check their telephone calls. They are depending on the system to produce the right results. The system was undermined to some extent by the strikes in 1978 and 1979 because there was delay in billing. Accounts were sent out irregularly and rebates of rental were made to people who did not have a service during the strikes or had a very bad service. All of that undermined the system to some extent and people lost confidence in it. However, the system is basically sound in that there are meters to record the calls. The meters are reliable and are of a type used worldwide. In so far as there could be errors they would come normally from two sources: first, the meter might be read incorrectly and, secondly, in making the decuction from the previous meter reading the calculation might be incorrect. However, errors in such cases would be corrected at the next billing period. We have been doing a number of things to improve the system. The first is that all the meters for the current quarter are photographed and this reduces the possibility of error; secondly, for three-quarters of the bills in this quarter the meters will be read automatically into the computer and the deductions will be made in this way. This should help to eliminate errors. The balance will be treated in the same way in the next quarter. With regard to problems in connection with telephone accounts, this is not peculiar to us. The British have had considerable public correspondence about the same problem and, in fact, it is a worldwide problem. Towards the end of this year or early next year we will have available a subscriber’s meter which a person can buy or rent. In this way he will be able to check his meter usage and it can be used by those who doubt the present system. We hope to ease the problem in this way. When a person disputes his meter reading all we can do is to check the meter and associated equipment and this is what we do. If we find nothing wrong we have to maintain the charge but from the point of view of the subscriber that may not be very satisfactory. We cannot point out that he made certain calls on a certain day and so on, but that will be possible in the course of time when we have the new digital exchanges. The question of producing detailed bills for all subscribers by means of computerised digital exchanges is being examined in countries throughout the world. It is only when that is available that we will be able to satisfy customers that they are being charged the correct rate. That is the 100 per cent solution. The other methods are an effort to try to make the system as good as we can.

I wish to thank you for a very comprehensive answer. If a person can prove to the Department that his phone was not used during the accounting period in question I presume that would be taken into account?

—Yes. We give rebates if the meter usage is clearly out of pattern or if the subscriber has been away.

Is the equipment your Department use of world standard?

—Yes.

666. Deputy B. Desmond.—What is the extent of malicious damage to the apparatus of the Department?

—It is between £200,000 and £250,000 a year.

What is the trend at present?

—It is fairly static. We have not had much experience so far of the new pay phones. They are quite sturdy and we hope that with the new aluminium kiosks the amount of damage will be reduced. About five years ago the damage caused was of the order of £100,000 and having regard to inflation that would be about £250,000 now.

Is there any difference between damage caused in rural as opposed to urban areas?

—Damage in urban areas is much more severe. Despite the fact that it would be much easier to damage kiosks in rural areas, the position is that we do not get much damage there. Damage is mainly caused in urban, built-up areas.

667. Chairman.—Paragraph 52 of the Report of the Comptroller and Auditor General reads:

“Rebates of rental to the extent of £160,000 and £547,000 in respect of disruption of service during the industrial action in the Engineering Branch in 1978 were granted to telegraph (telex) and telephone subscribers, respectively.

A further loss of telegraph (telex) revenue arose from the non-availability, due to the industrial action, of call records relating mainly to telex calls to Great Britain and other countries between February and May 1978. It was decided not to issue estimated accounts in respect of these calls although the normal procedure followed in cases where call records are not available is to issue estimated accounts based on subscribers’ level of usage during previous periods. I understand that the loss of revenue under this head is in the region of £500,000.”

Mr. McDonnell.—This draws attention to the losses of revenue arising from industrial action as distinct from delays which we were talking about in the previous paragraph. The rebates total about £700,000 and the shortfall in telex revenue, because the Post Office did not have proper call accounts, is estimated at £500,000. As is stated in the paragraph, in these latter cases it was decided not to issue estimated accounts even though normal procedure would be that if we did not have call records estimated accounts would be issued. This was an exceptional situation.

Deputy Crowley.—How were the rebates given? Were they given as a result of requests from individual subscribers?

—There were two different situations in 1979. Some people did not have any service. Normally they had manual service but because the manual operators were not at work, they did not have a service. We gave rebates automatically in those cases where we could identify them. The remaining cases were dealt with upon request by the subscriber who claimed he did not have a service and if that was supported by the fact that no calls were made during that period, or by other sufficient reason, we gave rebates.

668.Chairman.—Paragraph 53 of the Report of the Comptroller and Auditor General reads:

“Post Office Savings Bank

Section 13 of the Post Office Savings Bank Act, 1861, as amended, provides that the accounts of the Bank be presented annually to me for audit. The accounts for the year ended 31 December 1979 have not yet been submitted to me for audit. I understand that the delay in their submission is due to the disruption of the Department’s accounting system following the postal strike in 1979.”

Mr. McDonnell.—As I reported, the accounts had not been received at the date my report was going to press. They were subsequently received and the audit was carried out with satisfactory results.

Chairman.—They have now been presented and are in order. Is that correct?

Mr. McDonnell.—Yes.

669. Deputy B. Desmond.—On subhead A —Salaries, Wages and Allowances — under the income and expenditure accounts a figure of £102 million is given for salaries and wages. Presumably pension liability and so on is included under this heading bringing the total to £125 million.

Mr. Ó Ceallaigh.—These are commercial accounts.

Mr. McDonnell.—In note 2 there is an explanation of the different accounting systems. There are no accruals in the Appropriation Account: one is a receipts and payments account and the other is an income and expenditure account, and note 2 of the commercial accounts refers to that. We are showing the cash position in the Appropriation Account and the actual expenditure position in the commercial accounts and there are fluctuations.

—In the Book of Estimates agency services and so on are included. The make up is different between the Book of Estimates and the commercial accounts.

670. Deputy B. Desmond.—On page 162 the figure in respect of overtime was £18.5 million and presumably that is incorporated in the figure given for salaries and wages. Bearing in mind that the Departments of Posts and Telegraphs, Justice, Revenue and Social Welfare are the Departments with very high overtime payments, would you not consider that separate headings for overtime and allowances might be justified?

Mr. Ó Ceallaigh.—I am not sure if it is for the Post Office to determine the general format of these accounts. I think that is determined centrally. We would have no objection to doing this if it was decided centrally. These figures are given in detail in the Estimates. In 1979 the £18 million overtime was paid following the strike. A number of sub-offices continued to function during the strike and a great deal of documentation built up at those sub-offices. A lot of work which should have been done was not done. To catch up on this necessary work we had a high expenditure on overtime in 1979.

Would it be true to say that there would be a loss to the State because of that dispute of £5 million to £10 million as well as substantial additional costs, such as £5 million or £6 million in overtime?

—There was an increase in overtime as a result of the strike.

Taking this as an on-going expenditure of £18 million in 1979, in 1980 the figure was around £22 million and in 1981 it increased to £24 million—

—It went over £30 million.

The Book of Estimates for 1982 shows the figure to be down to £24 million.

—Yes.

It is said that 22,207 people were involved in the payment of this overtime, earning an average of £835 per person in 1979. That figure is very high but the figure for 1980 is even higher. We are not discussing those Estimates at this stage. An analysis of the overtime worked in the various sections might be very useful to the Committee, particularly as we will shortly be examining the 1980 accounts. Perhaps we could have a breakdown in terms of overtime attributable to clearing up the backlog of the postal strike, as well as ongoing overtime and that worked on Christmas deliveries. I have often wondered precisely how much is paid out for overtime working at Christmas. I gather that delivery of telephone directories is currently done on overtime, as well as collection of licence fees and detection and surveillance work. A note on this matter would be very valuable for the Committee, bearing in mind the large amount of money involved.

—Yes.*

671.Chairman.—You mentioned a saving to the Department on wages not paid out that year.

Is this reflected here?

—Yes, it would be taken into account.

Would this be the £1.3 million which was not expended?

—No. While we saved some money due to the fact that wages were not paid during the strike, in fact there were quite substantial pay increases that year under the national pay agreement and separate agreements with the Post Office unions. There were also lump sums paid in advance which were subsequently recovered from pay. All those things tended to bring about a situation where we had to get a Supplementary Estimate for subhead A before the end of that year.

672. On Extra Remuneration, the sum is very large and it would appear that payments of almost £10,000 have been made to some employees for overtime. Some people received more in overtime than their normal salary and this is very peculiar. The explanation is that these are highly technical people who are on call. At a time of scarce money and scarce jobs it would appear that more employment could be created if less overtime were worked. Employees are very conscious in any negotiations of the overtime content of employment and a very serious look will have to be taken at this matter.

—We are very concerned about the level of overtime. It rose fairly steeply after the 1979 strike in order to catch up with arrears. Afterwards in getting the telephone development programme under way we had not enough trained staff and we employed engineering staff fairly extensively on overtime. It reached a peak in 1981 but we have taken quite a number of steps to cut back the level of overtime. On the engineering side there is a general directive that nobody should work more than ten hours overtime per week. There are some exceptions for people who are on call but we are restricting the type of work for which staff can be called out after hours. We are not attending to the same types of repairs as we did previously. This will have an effect on the level of overtime. The evidence is that the incidence of call-outs is dropping and consequently the amounts paid to individuals are also falling. We are taking action over a fairly wide front to reduce the amount of overtime. Engineering workers working several miles from their headquarters used to finish at 5 o’clock and travel back on overtime. That has now been changed and they travel back in the Department’s time. On the postal side we are cutting back gradually and trying to get the work done with less overtime. We are having a fair amount of success but it is a fairly slow process and there will not be dramatic results. We are heading in the right direction but it requires continuing effort to get overtime down to an acceptable level. There is an inescapable amount of overtime in the Post Office because it provides a seven-day 24-hour service. Telephonists who work on Sundays must be paid overtime. On the postal side overtime is economical to deal with the work of getting out the night mail from the sorting office. We cannot entirely eliminate such overtime.

Is there any prospect of creating employment with the money formerly expended on overtime?

—We are working on that and we have done quite a bit.

673. Deputy B. Desmond.—I am sure the staff recruitment embargo has hit you somewhat, particularly on the postal side.

—Yes. We fill only one in three vacancies.

As a consequence overtime must be worked.

—Yes. We are trying to take action on two conflicting fronts. We must try to cut down on overtime while not filling vacancies. Nevertheless, we are still cutting overtime.

674. On subhead D — Conveyance of Mails —has there been an increase in the hiring of private contractors for the conveyance of mail?

—No, it is much the same. Subhead D includes payments to CIE, shipping companies and so on. The mail contractors are only a small part of that.

675. Chairman.—On subhead F Engineering Stores and Equipment — there is a large overexpenditure but it appears that there were savings on international telecommunication circuits. What type of circuits were involved and why was there such a high saving?

—The main savings came under the purchase of engineering stores and mechanical transport, £1,470,000, and on payments to contractors for telephone capital works, £1,890,000 partly offset by lower expenditure £710,000 on international telecommunications circuits. When these international circuits are available one takes them and, if they are not on offer or if one does not need them at the time because the traffic has not grown, the Department does not take them until the need arises. The traffic may not have increased as a result of the strikes or, on the other hand, the circuits might not have become available from the international agencies.

676. On Subhead H. — International Conferences and Conventions — some subscriptions were not paid up amounting to £116,000. Were they carried forward?

—Yes, they would be carried forward. The accounts were not received in time to be paid in that year and they would be paid the following year.

677. Deputy B. Desmond.—On subhead I. — Losses — could we have some observations on the savings bank losses? There seem to have been 42 separate cases. Is the incidence regarded as acceptable or how do things stand at present?

—Most of those losses arise as a result of fraudulent withdrawals. The incidence of those remained fairly static over the years. A few hundred crop up each year. It has not varied greatly over the past number of years. It is quite some time since precautions against savings banks defalcations were examined in detail. Another detailed examination has been put in train to see whether the system can be improved to prevent fraud. The situation in so far as fraud is concerned has not changed that much over the years.

678. Chairman.—On subhead K.I. — Commissions and Special Inquiries — what does that cover?

—There are three groups. The Post Office Users’ Council which is continuing. The Post and Telegraphs Special Review Group was set up in 1978 to examine the question of whether the post and telecom services could be given autonomy and taken out of the Civil Service. The Broad casting Complaints Commission was the third. Those are the three groups involved.

679. On subhead K.2. — Consultancy Services — who provides them and on what basis?

—Quite a number of consultancies were involved, some with the Post and Telegraphs Review Group which had two consultancy studies done. Some others were carried out for the Departments. A decision has to be made on what work should be done and who is best fitted to do it.

Who makes the decision?

—Normally that is done by the Department in consultation with the Department of the Public Service.

680. Deputy B. Desmond.—On subhead L.1.

—Grant for General Purposes equivalent to Net Receipts from Broadcasting Licence Fees (Grand in Aid) — this deals with the collection of the licence fees?

—It also deals with the licensing of retailers and other people.

RTE and other bodies have observed that there is a substantial shortfall not only in 1979 but on an ongoing basis in the collection of such fees by virtue of the mechanism operated by the Department of Posts and Telegraphs. What is the view on that?

—I should say at the outset that we are not fully satisfied that we are getting desirable results. There is undoubtedly a level of piracy and failure to pay the licence fees. We are doing a number of things to try to maximise the revenue. We get lists from the TV dealers and we check them against the licences taken out. We also get lists from the cable dealers and we check them. Special campaigns are carried out from time to time. There is one on at the moment to try to catch up on defaulters. We are trying to improve the recording system as well. The records are being computerised and we hope that will have two benefits. We hope it will enable us to handle the data better on who has paid and who has not paid, and also to release more staff for full-time inspections. These are measures apart altogether from the normal system of checking on people who have licences to make sure that they renew them. Despite all these we would have to say we are not satisfied with the level of detection. There is and has been a level of failure to pay licence fees. The object is to try to catch up with these people and get them to pay.

The RTE report for 1979 indicated that the best estimates were that in 1979-80 licence evasion represented a loss of income of more then £4 million. Do you accept that figure?

—We cannot accept it or deny it. It cannot be estimated accurately. We would say that it is too high.

681. Chairman.—I wonder would the Accounting Officer like to comment on remarks by high ranking Radio Telefís Éireann people that sufficient effort is not being put into the collection of licence fees and, further, that they would do a much better job themselves.

—They have claimed that they could do a better job. They have represented that to the Minister and the Minister is considering that, but the Minister recognises the force of the basic argument that RTE are the most interested in the collection of this revenue and have the best motivation to collect it. Motivation is a factor. They have submitted a scheme for the taking over of licence fees and that is being examined by the Department at the moment. However, it is not a simple matter to decide whether it is to be done by RTE, the Post Office or the new postal board? There are staff interests and strong staff resistance to a change could be expected from the staff doing this work at present. The postal board are anxious to continue doing this work and they have been asked by the Department to prepare proposals for discussion with RTE with regard to the future of the licence collection and the Minister will make a decision at the end of that as to who should do it.

682. Deputy B. Desmond.—Offhand, about how many staff are involved in the collection process?

—Offhand, only about 15 to 20 are full-time on it. Quite a number of others are part-time, totalling between 60 and 70 altogether in different post offices throughout the country. It is dealt with as incidental to other work. The small number of people on it full-time are in Dublin and in Cork. That is the extent of the full-time employment.

Chairman.—I mention to the Accounting Officer that this matter has arisen on a number of occasions over the last number of years at this Committee and reference has been made to the fact that the Accounting Officers from the Department of Posts and Telegraphs have stated that they have not the funds or personnel to make a 100 per cent or near 100 per cent collection. Is that still the situation?

—In a sense you could always use more staff to good effect for this collection. If the Department had more staff there are other things they would do — for instance checks in relation to defaulters and so on. Detection work is a job which is done largely on overtime and a change could give rise to resistance.

Why is this job carried out on overtime when an estimated £4 million is involved or estimated for and I am sure that is reasonably accurate?

—It is done by Post Office clerks who are on other work during the day. Apart from that, detection work is better done at night when people are at home and sets are in use. That is the best time to do it and it is done on overtime. There is a campaign at the moment and if we had more frequent campaigns we would catch more people.

I agree, but could more employment be made available in this area?

—I am sure officers could be recruited but it would have to be on the basis of having evening work rather than working during the day. There would be benefit from staff doing this as part of the normal day’s work rather than on overtime and more people could be employed. This is being considered by the Department. This is what the postal board are considering too at the moment. We will do it ourselves when the system is computerised. Essentially one needs staff devoted on a full-time basis to do this work with hours of duty related to times when this inspection work should be done.

683. Under subhead T — Appropriations in Aid — item 10 is repayment by the British Government in respect of compensation allowances (Subhead J). What does that involve?

—That relates to people who were transferred from the British Civil Service on the change of Government under Article 10 of the Treaty. Some of them are still surviving. They were given certain conditions on transfer and they claimed later that they did not get quite all the conditions they should have got. They took a court case and got some improvement in their conditions.

684. Under the heading — Losses Classified Schedule — we have fradulent withdrawings from Savings Bank accounts by a number of persons one of whom was prosecuted. How were these fradulent withdrawals made? Was there any set pattern?

—There are two patterns. One is where people have opened accounts and changed the amounts in the books and the other is books stolen or lost.

685. Deputy B. Desmond.—On robberies, offhand what was the total in terms of armed robberies and so on in post offices in the year 1979, affecting post offices? How has that gone in the past couple of years?

—I do not seem to have a note of that. It remained remarkably static for a few years but it has jumped this year. I have not the accurate figure.

686. Chairman.—Under the headings of theft from a sub-post office and theft by persons unknown from a department motor van I see that £35 made good by the postmaster was offset against the larceny and in the other case a sum of £15 was made good by the postman driver and was offset against the loss. What was the situation?

—One looks at each case to find out whether the postmaster, the driver or whoever it was was at fault and if he was he may be called upon to make a contribution towards the loss.

687. In relation to raids at post offices have the Department taken any action to protect its servants there, sub-postmasters and so on? As robbery from post offices has become very prevalent now that the banks have more protection is any action being taken?

—We are taking quite a number of precautions. Obviously, one does not publicise much of what is being done because it might be used. We are tackling the problem on three broad fronts — getting increased Garda protection, improving security by means of time-lock safes and anti-violence screens and other physical improvements and improvement of security procedures. The Garda authorities have given us much greater protection, as a result of which robbery of cash in transit which has been the main problem, has been virtually eliminated. We are getting a lot of co-operation from the Garda in this respect. We have a problem in relation to the physical security of premises, particularly sub-offices, many of which are run in conjunction with other business. The same person attends to the post office and the other business. We have, however, begun a programme of providing time-lock safes and antibandit screens for some of the more crime prone offices. We have made a fair amount of progress recently and expect to make substantial progress next year in that particular area. However, it will not be possible to do much about some of the post offices because of the way in which business is carried on in them and because the volume of cash involved would not justify very elaborate precautions. We have also had a very complete review of procedures, practices and so on to ensure that gaps are closed wherever they exist. One must keep on looking into procedures and the sense of being on the alert always must be instilled into the staffs to prevent lapses facilitating robberies. The banks would appear to have taken care of the situation with regard to their security, but we have approximately 2,200 post offices to take care of and a number of these offices are small. We are making improvements on the physical side, having added protection from the Garda and we will be doing much more next year.

688. Deputy B. Desmond.—The good name of post office staffs has on occasions been denigrated by allegations that where major robberies have occurred some people must have had access to or information about premises, internal movements of mail or of persons. Has that been a matter of concern to you?

—It has, yes. Obviously sometimes one can get evidence to clear staff involvement, but when one cannot get evidence it is very hard to do anything about it.

689. What about areas where sub-post offices are used for the payment of unemployment benefit, necessitating the presence of substantial sums of cash? Is there any way of avoiding that? Have you been in consultation with the Department of Social Welfare?

—We have.

Perhaps cheques could be issued? Payment by cheque would avoid easy pickings in certain post offices.

—We have been in consultation with the

Department of Social Welfare, but they are anxious to preserve the existing system. They want to keep up the cash payments by the Post Office for a variety of reasons, security of another type being the primary reason. We are agents for the Department of Social Welfare in that matter and so long as they want us to pay, we will do that.

690. Chairman.—That is really a matter for the Department of Social Welfare. It is their problem. Is there any other matter on the subject of losses? We have already dealt with Extra Remuneration. There are two tables dealing with expenditure to 31 December 1979 which are self-explanatory. I do not think anything arises from them. That ends the examination. Thank you very much.

The witness withdrew.

691. Chairman.—Could I remark to the Department of Finance representative here that there is only one further account to be examined which is that for Public Works and Buildings. We requested the presence of an Accounting Officer here today and were informed that none was available and that an Accounting Officer has not been appointed as yet. I would point out that these accounts are long overdue, being the 1979 accounts. The last time that this committee sat when the Vote concerned was due for examination was a considerable time ago — May 1981. At that time the then Accounting Officer was summoned, there were difficulties and he did not appear. The Committee takes grave exception to the fact that an Accounting Officer for this Vote has not been made available to enable the Committee to finish the 1979 Accounts. Could the official present inform his people of that?

Mr. J. R. Whitty.—I certainly will.

Could they ensure that an Accounting Officer be made available to the Committee in the very near future? Would you contact your Secretary?

Mr. J. R. Whitty.—I will do that.

The Committee deliberated.

The Committee adjourned.

* See Appendix 15.

* See Appendix 15.

* See Appendix 15.

* See Appendix 16.

* See Appendix 17.