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APPENDIX 927 January, 1987 Clerk to the Committee, Committee of Public Accounts, Leinster House, Dublin 2. A Chara, I wish to refer to your letter of 2nd December, 1986 and to enclose information on the following matters which were dealt with at the meeting of the Public Accounts Committee on 6th November, 1986: (1)The Bread Subsidy Scheme. (2)Breakdown of money paid to the Regional Tourism Organisations. (3)Space held by the Industrial Development Authority. (4)Breakdown of staff of Kilkenny Design Workshops. The Accounting Officer has agreed to supply additional material in relation to the payment of the housing subsidy in the Shannon region. This material is being finalised and I hope to be in a position to let you have it shortly. I am also returning the typed script of the minutes of evidence given by the Accounting Officer and a certificate from the Accounting Officer in regard to this. You will note that in regard to presentations made by other persons at the meeting, we have also suggested amendments where we consider these are appropriate. It is accepted that in some of these instances the text will be open to an alternative amendment to the one which we have put forward. Yours sincerely, A. McGRATH Accountant Department of Industry and Commerce, Kildare Street, Dublin 2. NOTE FOR INFORMATIONREPLIES TO PUBLIC ACCOUNTS COMMITTEE REQUEST FOR ADDITIONAL INFORMATION ON BREAD SUBSIDY SCHEME.1. Total Payments under the Scheme since its inception. The following gives an annual breakdown of expenditure incurred on the Bread Subsidy Scheme since its inception in 1975 to date.
2. Delays in Payment. Every endeavour is made to have claims paid promptly. A survey (attached) of sample claims picked at random in the section indicates that from the date of receipt of claim in the Section to actual payment, a time lag of between two to six working days would normally occur and in the majority of cases the former figure applies. Any delays that occur usually arise as a result of failure by bakeries to provide the necessary information. Delays in payment of subsidy claims can take place in the following instances: (i)Return the claim form to the bakery for amendment In cases where the claim form is not properly completed e.g. a contradiction in the amounts of units claimed in the claim form, the form is returned to the baker for amendment. (ii)New Bread Lines The introduction by the bakery of new bread lines requires the prior approval of the Section. Payment is withheld on any new line of bread claimed by the bakery pending the investigation by the Section of such bread to ensure that it is eligible for subsidy in accordance with the Explanatory Notes. (iii)Auditors’ Certificates Bakeries are required to submit an Auditor’s Certificate every quarter certifying that proper books and records have been kept. Failure to supply this certificate promptly may result in subsidy payments being withheld provisionally. (iv)Particulars of Bakery Any change in address, company name etc. must be queried by the Section resulting, perhaps, in a small delay in payment of claims. (v)Inadequate Records Where proper records are not maintained, delays in payment may occur. Survey of claims paid
3. Number of Staff The total number of staff involved in the administration of the Bread Subsidy Scheme in 1984 was: 1 Assistant Secretary (Part/time). 1 Principal Officer (Part-time). 1 Assistant Principal. 1 Higher Executive Officer. 4 Executive Officers. 11 Bread Subsidy Inspectors (Clerical Officers). 3 Clerical Assistants. 1 Accountant (Part/time). Note: Additional Inspectors have been assigned to Bread Subsidy duties from time to time as circumstances require. Control System Applied 1. Bakeries are required to maintain detailed records of sales and returns of bread, of production and wastage of bread and of flour and wheatenmeal purchases and usages (details at Appendix A). The records required to be kept by the bakery are set-out at Appendix B. 2. Claims for payment of the subsidy must be made on a standard form in respect of each two week period. 3. Bakeries are required to supply a quarterly Auditors Certificate in support of their claims for subsidy payments. 4. Regular inspections of bakeries are undertaken (up to 3 to 4 times per annum) with a view to ensuring that proper records are maintained, to check on distribution arrangements and recording systems associated with them, and to check the accuracy and reliability of records. The consistency of production and sales records and of invoices, despatch and delivery notes is checked. Returns in respect of particular retail outlets, vanmen or agents may be subject to detailed scrutiny for a test period. Explanations are sought for any significant variations in production or sales. 5. The Inspector makes a report to Bread Subsidy Section on each inspection and any further action is decided on in the light of this report. Such action can include enquiries in relation to any aspects of a bakery’s claims or records. 6. The onus is on a bakery to produce whatever records and other documentation is necessary to support claims for subsidy payments. Claims which cannot be satisfactorily substantiated will not be allowed by the Department. 7. Where monies have been paid in respect of incorrect or ineligible claims reimbursement of overpayments will be effected either by refunds from the bakery concerned or by deduction from the bakery’s subsequent claims. 8. While the trading practices of different bakeries may vary given the scale of production, distribution arrangements etc., the records kept by each bakery must be sufficient to allow for complete substantiation of all claims. 9. Standard instructions have been issued to all Inspectors for the operation of the Scheme. Periodic conferences are held between the Section management and the Inspectors to ensure that the same procedures regarding records and substantiation of claims are being adhered to and to keep procedures under review. 10. Attached as Appendices C and D are lists of (i) bakeries from which deductions were made since January, 1986 and (ii) claims withheld provisionally pending further examination of documentation. EXPLANATORY NOTE ASTANDARD BREAD SUBSIDY SCHEME1. General The subsidy payable on bread is a consumer subsidy. The only types of bread which are eligible for consideration for subsidy are loaves commonly described as batch bread and pan bread, wrapped or unwrapped, sliced or unsliced. It is payable to manufacturing bakeries registered with the Department in respect of bread which is sold for human consumption within the State. For subsidy purposes pan bread is baked in individual tins or containers. Bread containing improvers for the production of specialised bread and other fancy bread including bread containing added sugar, honey, eggs, cheese, fruit, nuts, aromatic seeds, etc. is not eligible for subsidy. It is a matter for the Department of Industry and Commerce to decide whether any bread falls within the classification of standard bread for the purposes of the subsidy scheme. Where clarification is required the Department should be consulted as to the eligibility of different types of bread. Subsidy is not payable on returns of unsold bread or on bread disposed of otherwise than by sale for human consumption at the point of final sale. Bread to be eligible for subsidy purposes must not be sold at weights less than those specified. The weights of bread on which subsidy is payable are:
The weight of the 600g wrapped pan should be indicated on the wrapper. The following brands of pan bread do not qualify for subsidy:— (i) Hovis, (ii) Procea, (iii) Bermaline, (iv) Hi-Vi, (v) Maltana, (vi) Dr. Vogel’s Swiss Health Bread, (vii) Thoma, (viii) Abermalt, (ix) Slimcea, (x) Veda, (xi) Tritamyl and (xii) Nimble. The purpose of the Standard Bread Subsidy is to reduce the price of bread at the point of sale for the benefit of the consumer. It is therefore necessary for the Department to monitor the overall position in the bakery industry. Firms claiming subsidy may accordingly be required to furnish audited accounts or other information which the Department requests. 2. Procedure for making application for payment All claims for payment of subsidy must be made on the official application form. Subsidy should only be claimed on the unit sizes at which bread is manufactured. The form when completed should be sent to the Department of Industry and Commerce, Bread Subsidy section, Kildare Street, Dublin 2. Applications for subsidy will be considered only in respect of bakeries which are registered with the Department. As a condition of entitlement a separate application form must be submitted promptly after the end of each specified 2-week accounting period. Such submission of correctly completed application forms will facilitate early payment of claims. Applications by companies must be signed by the Secretary or a Director, and in other cases by a responsible officer. 3. Payment of Subsidy. Subsidy will be paid at the rates in operation at the time of sale. To make for easier calculation of the amount of subsidy, provision is made in Paragraph 5 of the application form for the conversion of unit sales (excluding sales of 400g loaves) to the equivalent of 800g units. As payment is made on the basis of the number of complete 800g units, the total number of units should be rounded to the nearest whole number. 4. Claim Periods Claims are payable in respect of specified 2-week accounting periods in each calendar year as notified to registered bakeries, claims for periods other than these will not be entertained. 5. Auditor’s Certificates Quarterly Auditor’s Certificates are required to be submitted promptly covering claims made in each of the specified quarterly periods notified annually to registered bakeries. Failure to supply the certificate promptly may result in future subsidy payments being withheld. The certificate should be in the following form:— I have examined the books and records of . . . . . . . . . . . . for the period commencing . . . . . . . . . . . and ending . . . . . . . . . . . In my opinion proper books and records adequate for the purposes of this certificate have been kept. I certify that the amounts claimed by the applicant(s) under the Standard Bread Subsidy Scheme during the above period are correct to the best of my knowledge and belief. 6. Substantiation of Claims: Keeping of Records The Department of Industry and Commerce reserves the right to investigate further any application for payment including payments already made and to request additional information or further substantiation of claims by way of invoices or otherwise and to inspect relevant records of applicants. Complete sales records of bread must be kept (including inter-bakery sales and purchases of subsidised bread) with supporting documentation (e.g. invoices, despatch and delivery notes) together with production records. Bakers must also be in a position to substantiate the sales of subsidised bread by agents and sub-agents. Particulars of unsold loaves returned to the manufacturing bakery or otherwise disposed of must be recorded. Records of flour and wheatenmeal purchases (including statements and invoices) must be kept and the quantities used in the manufacture of subsidised bread, non-subsidised bread and confectionery, and disposed of by retail or otherwise must be recorded. It is a requirement that all such records must be held available for inspection by authorised officers of the Department and retained for at least two years after the period to which they relate. 7. Recoupment of Overpayments Where monies have been paid in respect of incorrect claims and/or it transpires that the bread on which subsidy was claimed was not eligible for subsidy, reimbursement of overpayments will be effected either by refunds from the bakery concerned or by deduction from the bakery’s subsequent claims. EXPLANATORY NOTE BThe records required to be kept by the bakery are as follows: (1) Records of sales and returns by the bakery via shops, vanmen, agents, contracts, inter bakery sales etc. Substantiation of these must be available in the form of invoices, cash receipts, dockets and docket books, contracts, statements, credit accounts etc. It must also be possible to follow cash receipts through the bakery’s accounting system. (2) Records of production and wastage are required to be accurately kept by the bakery and not arrived at by formula or estimate etc. (3) Records of flour and wheatenmeal purchases and usages. Purchases must be substantiated by invoices and statements from the various mills. Flour and w/meal usages for both subsidised and non-subsidised products must be actually recorded and not estimated or formulated. Each bakery must carry out a physical stock count of all flour and w/meal at the end of each fortnightly period in respect of which subsidy is paid. (4) Records of sales to and purchases from other registered bakeries and subsequent unsold bread must be recorded and substantiated by invoices. Purchases of subsidised bread from another bakery must be excluded from the purchasing bakeries’ subsidy claims. (5) Particulars of imports and exports must be maintained and substantiated by invoices, dockets and customs sheets. Bread exported must be excluded from subsidy claims. (6) Sales of bread, the importation of which is substantiated, must be accounted for in the same way as bread produced by the bakery itself. EXPLANATORY NOTE CDEDUCTIONS FROM BAKERIES — 1986
CLAIMS WITHHELD (PROVISIONALLY) 1986 AND STILL OUTSTANDING
SUBVENTION TO REGIONAL TOURISM ORGANISATIONSIn 1984 Bord Fáilte allocated £2.342 million directly to fund the operations of the 7 RTOs as follows:
In addition to the above Bord Fáilte contributed £3,800 towards administrative/legal expenses incurred as a result of the merger in 1984 of Dublin Tourism and the Eastern Regional Tourism Organisation resulting in the establishment of Dublin and Eastern RTO. Also £14,880 was contributed by the Bord to the RTOs nationally towards certain administrative expenses e.g. familiarisation programmes for staff of RTOs. In all, therefore, Bord Fáilte’s contribution to the RTOs in 1984 was £2,360,680 as per Bord Fáilte’s Annual Report. INDUSTRIAL DEVELOPMENT AUTHORITYDetails of the square footage of unoccupied factory space held by the Authority as at December, 1981, 1982, 1984 and 1985, June, 1983 and November, 1986 are set out below:—
KILKENNY DESIGN WORKSHOPS LIMITEDKilkenny Design Workshops Limited employ a total staff of 138, including those in its retail shops. 89 persons are employed in Kilkenny and 49 in Dublin. 25 of those employed in the Company are engaged on design work, in the following categories:
*This delay occurred as an outstanding outitor’s certificate was not received until 11.9.86. |
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