Committee Reports > List of Committees > Dáil > 1988 > Committee of Public Accounts > Report - Appropriation Accounts 1984

AN COISTE UM CHUNTAIS POIBLÍ

(Committee of public Accounts)

Déardaoin, 22 Deireadh Fómhair, 1987

Thursday, 22nd October, 1987

The Committee met at 11.30 a.m.

Members Present:

DEPUTY G. MITCHELL in the chair

VOTE 6—OFFICE OF THE MINISTER FOR FINANCE

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

Mr. S. Cromien called and examined.

1601. Chairman.—Good morning. The Committee of Public Accounts of Dáil Éireann is this morning resuming its examination of the Secretary of the Department of Finance, Mr. Cromien, in his position as Accounting Officer for that Department. You are welcome, Mr. Cromien.

Mr. Cromien.—Thank you.

Chairman.—The first thing I want to deal with is the proposal for the change in the format of the Estimates for the Department of Education. The Committee will recall that at the last meeting with the Secretary it was proposed that the Comptroller and Auditor General, the Secretary of the Department of Finance and the Secretary of the Department of Education and I should meet to see if we could come to some agreement on the new format for the Estimates for the Department of Education. The committee will recall that there are five Votes in the Department of Education at present and there was a proposal that that should be translated into one Vote. There are a number of other changes in the format of the Estimates proposed which are agreed. This particular area was left for further discussion between the people mentioned. That meeting took place. The committee had some fears that if we were to approve a single Vote for the Department of Education that that would mean that money voted for, say, primary education could be spent on third level etc. and there would not be any control on the transfer of Votes between one area of education and the other and that it would also obviate the need for a Supplementary Estimate for approval in the Dáil. The meeting took place and what we have come up with by agreement of all present, is that there should be in the new format for Votes in the Department of Education primary, secondary, third level and further education and the Minister’s Office. That would mean that there could not be any rising of funds between one Vote and the other. I think that would maintain the parliamentary control which the committee were concerned about. I wonder does the Comptroller and Auditor General want to add anything to that.

Mr. McDonnell.—Not really. I think you have summarised the meeting and what was my understanding of what we agreed on. The tidying up which was envisaged anyway even if there had been just the one Vote would still go ahead. I gave one example of things like say, the higher education grants which are currently shown under the Office of the Minister, and they would in fact now be in the Higher Education Vote. You would then have a clear perception of what the cost of higher education in its totality was. I think you have summarised it adequately. I have nothing else to add to that.

Chairman.—Is there anything Mr. Cromien would like to say?

Mr. Cromien.—No, that would be acceptable to us.

Deputy Naughten.—I propose the suggestions as outlined by you. I think it is an improvement and I want to compliment you and those involved in the discussions. I propose that we adopt the proposals as outlined by you.

Chairman.—Any dissenting voice?

Deputy Desmond.—No, I agree.

Chairman.—The committee will write to you formally setting out what we have agreed to so that there is a formal record of exactly what is agreed. In any event, the record of this meeting will show that.

Mr. Cromien.—Thank you, I will note that.

VOTE 1 — PRESIDENT’S ESTABLISHMENT

1602. Chairman.—We will go on to the Votes. Vote No. 1. Are there any queries on this?

1603. Deputy Foley.—Would it be possible to confirm the number of staff involved there and salaries, wages and allowances?

Mr. Cromien.—The authorised establishment at 31 December 1984 was ten.

Deputy Foley.—Travelling and Incidental Expenses — the £41,000 applies to the President’s Establishment is that right?

Mr. Cromien.—That is right.

1604. Deputy Foley.—Does it cover the President himself?

Mr. Cromien.—The President’s home travel is covered under the Justice Vote but his travel abroad would be covered under subhead B.

Deputy Foley.—Subhead B would cover the travel abroad. There was a surplus of £41,000 — is that right?

Mr. Cromien.—In 1984 there was a surplus of £41,000 because there had been provision for two State visits by the President to Australia and Canada respectively. He did not go on either of these visits in that year. He went on a State visit to Germany and an official visit to Strasbourg to the Council of Europe. That was how the saving arose.

1605. Deputy Foley.—As a matter of interest, how many trips did the £36,000 under subhead B cover approximately.

Mr. Cromien.—It covered two trips for the President.

1606. Chairman.—Would you know — it may be an unfair question to ask you — has there been an attempt in recent times to open up Aras an Uachtaran? There seems, I understand, to be an attempt to actually clear the hidden aspect of the house itself. Would you know about that?

Mr. Cromien.—No, I am sorry, I do not know.

1607. Chairman.—It would be the Office of Public Works?

Mr. Cromien.—It would be, yes.

VOTE 6—OFFICE OF THE MINISTER FOR FINANCE

Mr. S. Cromien further examined.

1608. Deputy Foley.—For Consultancy Services the figure is £48,000. How many firms would be involved there?

Mr. Cromien.—What is involved here is the employment of accountants from the Industrial Credit Corporation in the Department. There are two such accountants.

1609. Deputy Foley.—And the two account ants cost £48,000. Is that right?

Mr. Cromien.—They cost £48,000 in 1984. There was a saving in relation to the Estimate for them that year because there was a delay in one consultant taking up duty and the payment then was less in the year. The payments are made in two six monthly intervals in arrear.

1610. Deputy Foley.—Subhead B.1. — Travelling and Incidental Expenses — £45,000. What was the highest figure paid to any individual by way of travelling expenses?

Mr. Cromien.—I am not sure if we have that figure, Deputy, but we could get it for you.

1611. Deputy Foley.—How many people would be involved in the £450,000 by way of travelling and incidental expenses?

Mr. Cromien.—Again, I am not quite sure that I can give you that figure. I have not got it in that particular form. Could I explain what was involved in it for that year? There were two substantial elements. One was the travel in relation to EC operations. Ireland held the Presidency of the Council of Ministers of the European Community in 1984. Substantial expenses were incurred in respect of that, both at home and abroad. Secondly, there was a significant amount of foreign travel related to the foreign borrowing side on which there was increased activity. I am sorry I have not got the actual amount per person or even the numbers at this stage but I could get it for you.

1612. Deputy Foley.—If possible, yes. Just one further question. Subhead F — National Savings Committee — expenditure £124,000.

Mr. Cromien.—This was in respect of the salaries etc. of staff on loan to the committee and travelling expenses of members of the National Savings Committee in that year. There was a small saving compared with the grant of £35,000.

Mr. Cromien.—There were 17 members on the committee and then there was a small staff operating with them.

Deputy Foley.—That covered the staff as well. Is that right?

Mr. Comien.—The travel here would be staff and the members.

1613. Deputy Foley.—Did they travel within the 26 counties?

Mr. Cromien.—Yes.

1614. Deputy Foley.—Seventeen on the committee plus a small staff?

Mr. Cromien.—Yes.

1615. Deputy Foley.—How many would this small staff consist of?

Mr. Cromien.—I think it was seven permanent staff working for the committee.

1616. Deputy Foley.—That is 24. Is that not rather a high figure there — £124,562 between 24?

Mr. Cromien.—The salaries etc. of staff on loan to the Committee are £119,837.

1617. Deputy Foley.—That includes the salaries?

Mr. Cromien.—Yes, salaries are £119,837; the travelling expenses and committee members is only £4,725.

1618. Chairman.—On subhead D — Management of Government Stocks — what has been happening on the stock market in recent times and is that likely to cost the State money under this particular heading?

Mr. Cromien.—You are, I take it, referring to the chaos in the financial markets over the past few years. The first point I would make is that all we can do in this country is monitor the situation. We are only small fry in this big ocean. It is difficult to predict what will happen. In relation to the market for Government stocks itself, I do not think there has been any adverse or beneficial effect so far. There are different considerations. Basically, the first matter that you are concerned about would be the rate of interest. A question that has to be asked about that is: what will the effect of the shift from equities be on Government borrowing? In the United States there have been some signs of a reduction in interest rates because people were, earlier in the week, moving away from equities, which were looked on as shaky, into Government stocks; and that brought down interest rates to some extent. That would be a favourable development if it were reflected here. On the other hand, of course, the concern is there that if this financial turbulence continued it would have an adverse effect on world economic growth, possibly causing a world recession and that that would have an effect on this country.

Chairman.—What caused the suddenness in the downturn?

Mr. Cromien.—I think the main element has been uncertainty in people’s minds about whether the bull market, as they call it, will continue. It has been going very strongly for a number of years and at some stage was bound to turn down. There is also a certain element of automaticity nowadays in decision taking about buying or selling stocks because a lot of these decisions are now made by computer and are triggered when there is a certain price fall. This exaggerates trends. This is a factor that really has not been seen before to the extent shown in the crisis that has taken place over the past few days.

1619. Chairman.—There is some suggestion of over dependence on computers arising from this?

Mr. Cromien.—The computer facilities are very useful, and are probably inevitable as a tool in the future, but they do have this drawback that they are more rigid than human judgement.

620. Chairman.—What is the kernel of it? Is it the American budget deficit?

Mr. Cromien.—Yes, this is the great concern that people have: that the American deficit will continue, that the dollar will fall and that it will eventually precipitate a recession in the United States.

1621. Chairman.—Would this affect the cost of management and Government stocks substantially?

Mr. Cromien.—As I say, where it would affect it would be in relation to interest rates. As a result what would happen to the world rates of interest?

1622. Chairman.—What is your crystal ball for the long-term interest rates?

Mr. Cromien.—I really could not make any judgement on that.

1623. Chairman.—Everybody has a crystal ball. Will they stabilise or will they continue to decline?

Mr. Cromien.—Could I put it like this? There are very strong underlying factors for growth in the world economy. At the annual meetings of the International Monetary Fund and World Bank in September it was clear that people visualised that you could have continued growth in the world economy for a period of maybe another five years provided that the major financial countries co-operated in solving the problems that are there, in other words, that the Americans and the Japanese and the Germans would make the adjustments necessary, if they do not make the adjustments necessary you will not get the growth, and this is the difficulty in predicting what will happen. If they are frightened by the events of the last few days, as they appear to be, and if they are prepared now to make the adjustments in the United States, on the one hand, in reducing their deficits and in Germany and Japan in accelerating domestic growth, you will, I think, get back to the circumstance where you will have the opportunity of getting further growth over the next few years. In those circumstances I would hope that interest rates would continue to come down.

Chairman.—Thank you, Mr. Cromien.

1624. Deputy Desmond.—May I ask Mr. Cromien what his view is of the reduction in the paper capital value of the major Irish equities at the moment and the consequential pressure and reluctance of the banks to lend to such major companies except under higher interest rates because of the reduced capacity of those entities to borrow? Surely that will be an upward pressure on domestic interest rates. Would you be of that view?

Mr. Cromien.—As I say, it is difficult to predict what will happen. It depends what will happen to these capital values. There has been a very serious fall followed by a recovery. One scenario would be that the recovery would continue and that the ground lost would be recouped substantially.

1625. Deputy Desmond.—May I ask you a final question in that regard? Has there been a shift into Government stocks in recent days?

Mr. Cromien.—In the last few days it has not been anything dramatic one way or the other. I suppose people are watching to see what will happen.

1626. Deputy Kitt.—On subhead G — Grants for County Development Work — does that relate specifically to the county development teams in the western regions?

Mr. Cromien.—Yes.

1627. Deputy Kitt.—There is a small reduction there as between what was granted and what was spent. My experience of county development teams is that they usually have a very large number of projects, an increasing number every year when application is made to the Department. I was wondering if there was any change in the criteria in 1984 that is reflected in this reduction?

Mr. Cromien.—There was no change in the criteria. It was just a small saving on salaries.

Deputy Kitt.—Does that figure include the actual discretionary grants that are paid?

Mr. Cromien.—Yes, but these come out of subhead H.1.

Deputy Kitt.—The saving was only on salary?

Mr. Cromien.—Yes.

Deputy Kitt.—There was an increase then in the grants?

Mr. Cromien.—I have not got that information directly to hand but I could provide it for the Deputy.

1628. Chairman.—I found the last discussion very enlightening and very interesting. I wonder if I could just round it off by asking you one last question, Mr. Cromien. Would you share the view that recovery is more likely to come in Europe than the United States? There seems to be a view that that is the case. I just want to put that question to you finally, to round off the discussion we were having.

Mr. Cromien.—Yes, I think the ideal scenario would be that you would have a careful but steady adjustment in the United States in their economy to reduce their enormous budget deficit and balance of payments deficit, matched by increaseing growth in Europe, particularly in Germany. It would also require continued growth in Japan. Both of those would make up for any reduction in the growth in the United States which would be necessary.

1629. Deputy Foley.—Just to follow on that point, you mentioned the United States, Japan and Germany. Would it be you opinion that it would be a book-keeping exercise to adjust these figures, in order to help the situation?

Mr. Cromien.—I do not understand.

1630. Deputy Foley.—Would it mean a strike off of so much money in each case by reducing the actual figures?

Mr. Cromien.—I do not know whether the Deputy is concerned about the world debt problem.

1631. Deputy Foley.—The debt situation.

Mr. Cromien.—That is a very complex issue that is overhanging the world. Various solutions have been suggested for it, including some way of taking over the debt. A number of the less developed countries have been suggesting ways of handling this by which, instead of private banks having the burden of this debt, some international organisation, or some other arrangement would be made which would take over the debt and service it from then on. No one is terribly willing to do that. You see the debt of one country is, in fact, an asset in the books of the major international banks, so if you strike off that in those banks you are reducing the assets of the bank and you are undermining the banks viability.

1632. Deputy Foley.—In view of recent events on the Stock Exchange would it not be better that in each of these cases, especially with regard to the United States, they would adjust these figures with regard to the national debt?

Mr. Comien.—At the moment the United States has a budget deficit, just as we have in this country. That is an actual amount of money that has to be found. At present it is being found by borrowing from abroad, in the case of the United States, and this is causing a distortion across the world. Decisions have to be taken to reduce that deficit. There is no easy way to do that. You cannot strike it off, or strike off the debt. What you have to do is to raise more taxes or cut back spending. We are familiar with the message here. That is the problem that the United States have to face: They have to decide to cut back on certain areas of their spending. The President is not keen to cut back defence spending. Other people suggest that you should increase tax revenue and he is not keen to do that. This is the dilemma that the other countries are concerned about.

1633. Deputy Desmond.—Regarding the management of Government stocks, this would include, under subhead D, payments made in respect of the management of the £2.6 million there in 1984. The management of foreign loans under Government stocks.

Mr. Cromien.—It includes management of external loan; yes.

1634. Deputy Desmond.—That would include the international treasury transactions of certain Irish banks and financial institutions, in the management of foreign loans, payments made.

Mr. Cromien.—This is mainly the question of raising loans.

1635. Deputy Desmond.—and the cost thereof?

Mr. Cromien.—And the cost of raising the loans and the cost in foreign—

1636. Deputy Desmond.—But certain Irish financial institutions, in terms of their international treasury transactions, would benefit from this money?

Mr. Cromien.—I am not quite sure, Deputy, that I follow you. This is the management of Irish Government stocks in the Department of Finance.

1637. Deputy Desmond.—Part of which is international currency and international loans?

Mr. Cromien.—Yes.

1638. Deputy Desmond.—The point I am coming to is that a number of the very companies involved will also undoubtedly be moving to the Custom House dock site.

Mr. Cromien.—Yes.

1639. Deputy Desmond.—And they will be getting a 10 per cent corporation profits tax on any moneys they make on that site.

Mr. Cromien.—Yes.

1640. Deputy Desmond.—And the Exchequer will be foregoing a 40 per cent corporation profits tax entitlement as of now and as of 1984 in relation to those companies, with the reduction, That is our understanding.

Mr. Cromien.—The Deputy is basically discussing the arrangements for companies moving into the Custom House dock site.

Deputy Desmond.—True, but the management of Government stocks, the Exchequer expenditure, the very companies who will be moving, will also, or have historically been benefiting from payments in respect of management of Government stocks.

Mr. Cromien.—I think it a rather tenuous connection. I am not quite sure that I follow.

1641. Deputy Desmond.—I am inferring that certain companies in this city who are going down to the Custom House and who are going down on a certified basis this year, under the 1987 Finance Bill, will be making very substantial corporation profits tax killing. They do not have to go down there for another five years, as we know. Just get a licence from the Minister and off they go, theoretically. But these self same companies will, I am sure you will agree, be benefiting enormously from their international treasury transactions, part of which relates to the Government stocks.

Mr. Cromien.—In the case of external loans, or the management of Government stocks, persons are employed to do certain work. They do the work and they are paid for it and they are entitled to be paid for it. I am not quite sure what the connection is with the Custom House docks.

1642. Deputy Desmond.—Well, simultaneously will the very same companies not also be going down to the Custom House dock site, the self-same companies?

Mr. Cromien.—I am not quite sure, to be quite frank, who is going down to the Custom House dock site.

1643. Deputy Desmond.—Where does the £2.6 million go?

Mr. Cromien.—It goes for the management of these stocks to the various bodies but largely domestic. In the case of foreign loans, management expenses are paid to foreign banks to cover expenses involved in their managing various issues on Ireland’s behalf.

1644. Deputy Desmond.—Well, a proportion goes to Irish stockbrokers, handling foreign loans. Is that the position?

Mr. Cromien.—There would be no payments to Irish stockbrokers from the vote in relation to this market. Basically what we are talking about now is the management expenses relating to foreign loans raised by Irish officials.

1645. Deputy Desmond.—True, but many of the transactions would be done through Irish agents.

Mr. Cromien.—In some case Irish banks would be involved but more by way of underwriting or arrangement than management. In such cases the costs would be met from the Central Fund and not from the vote.

Deputy Desmond.—These self-same agents will finish up in the Custom House dock site. I draw the analogy because we will come to it in further years, particularly in 1985-86 because of what frankly I can only regard and I would be interested in your views, it is not general to this discussion — as the reduction in corporation profits tax from such transactions, from 50 per cent down to 10 per cent and the subsequent loss of State revenue by virtue of that unique Finance Bill of 1987.

Chairman.—I think we are really in the policy and conjecture areas and I do not want to——

1646. Deputy Desmond.—We are, and I do not want to impose, but could I pass on to another aspect of the Vote with your permission, Chairman. There is £1 million being spent in 1984 on the ESRI. Have you contemplated, as Accounting Officer, indeed, in charge of public expenditure over the years, the amalgamation of both the ESRI and the NESC situation and the IPA under the one subhead more particularly since the DPS are responsible for the IPA subhead, the Department of Finance are responsible for the ESRI subhead — amalgamating in the rational way the economic expertise of those bodies and the training functions of the general economic input of such bodies?

Mr. Cromien.—I am not sure that there is such a significant overlap between the three bodies that are mentioned. The ESRI is a research institute; it is involved solely in economic and social research. The IPA is mainly a training institute; over 50 per cent of its funds goes to training. They have a small research unit of about six or seven people. That would have some relationship with the work in the ESRI; but it is different research, it is administrative research rather than economic and social research. You could think of that going to the ESRI. The NESC is a different institution. That is an organisation representative of a substantial number of bodies in the country.

It is an organisation with representatives of the social partners and a number of independent people. They do research, which is very largely commissioned. Some of the work they do might draw on the ESRI, or draw on other consultants, but it is complementary to the work of the ESRI. I am not sure that there would be that much of a saving between the three. There are more similarities between NESC and the ESRI than between both of those and the IPA, I would think. It is an interesting idea.

1647. Chairman.—I wonder just before we pass on from Vote 6, could you tell us this? The cost in 1984 was £100,000 for the Commission on Taxation. What was the entire cost of the Commission?

Mr. Cromien.—I can give you that in a moment. It was £675,280.

1648. Deputy Dempsey.—Very briefly, in relation to page 17, on the item Road Improvements Amenities, is there a list of the projects that were approved under that? Have the Department the list of projects approved? Would you be happy with the supervision and the manner in which the money was spent in this area?

Mr. Cromien.—I am not clear what the Deputy is referring to. Is it the Special Border Areas Programme.

Deputy Dempsey.—Yes, Road Improvements/Amenities.

Chairman.—Page 17 of the Appropriation Accounts.

Deputy Dempsey.—Could we have a list of the projects? You may not have it with you.

Mr. Cromien.—I am sure we could supply that to the Committee.

Deputy Dempsey.—Are you happy with the control procedures that were in operation for the money that was spent under this heading, or is that a matter for the Department of the Environment?

Mr. Cromien.—That would be a matter for the Accounting Officer of the Department of the Environment.

Chairman.—Unless any other Deputy wants the information, you could supply it directly to Deputy Dempsey.

Deputy Naughten.—I would like that information also. Regarding the other matter raised, the county development works, perhaps I could also get a note on how many projects were grant-aided that year?

Chairman.—Yes.

1649. Deputy Naughten.—Getting back to subhead D.1-1 Management of Government Stocks, there is a loss of money involved here. How are the fees calculated or how many firms are involved?

Mr. Cromien.—The registers of some Government stocks are held by the Central Bank and the fee is payable to the Central Bank. It was calculated at £300 per £1 million on the total nominal amount of stock up to 1983, and in 1984 that was reduced to £250. As you see in the account, the cost of management of the loans was less than had been estimated that year because of that cost reduction. The payments to the Government stockbroker are in another subhead. They are also fixed at a certain standard rate.

1650. Deputy Naughten.—Can I take it from what you say that figure of £2.6 million was paid to the Central Bank?

Mr. Cromien.—A substantial amount of it was paid to the Central Bank and a portion was paid to the Bank of Ireland in respect of the management of prize bonds. I can send a breakdown of that to the Committee, or to the Deputy, if necessary.

1651. Chairman.—Are you requesting a breakdown, Deputy?

1652. —Deputy Naughten.—Yes. At the end of Vote No. 6 you referred to repayable advances outstanding at 31 December 1984. Are these advances still outstanding?

Mr. Cromien.—This is in respect of what, Deputy?

Deputy Naughten.—Western Development.

Mr. Cromien.—Yes. At 31st December there were loans to five companies outstanding. There are now three outstanding, small amounts.

Deputy Naughten.—By the same companies as are mentioned here?

Mr. Cromien.—There of the five.

Deputy Naughten.—Are all these companies still trading?

Mr. Cromien.—I understand they are. Yes, I think they are.

Deputy Naughten.—I would like a note from the Accounting Officer to check out if they are. It is my information that some of them are not.

Mr. Cromien.—Yes. Could I check for the there because I am not sure from the note I have before me.

Chairman.—You might communicate directly with the Deputy on that matter, Mr. Cromien.

VOTE 10—STATE LABORATORY.

Mr. S. Cromien further examined.

1653. Deputy Foley.—On subhead A— Salaries, Wages and Allowances, £840,000. What number of personnel were involved?

Mr. Cromien.—In 1984 there were 69 staff involved.

1654. Deputy Foley.—On subhead B — Travelling and Incidental Expenses — £96,000, how many staff would be involved?

Mr. Cromien.—I have not got the breakdown of the number of staff involved in Travelling and Incidental Expenses.

1655. Deputy Foley.—What would be the highest figure paid to any individual member?

Mr. Cromien.—I would not have that detail either, but I can get it for the Deputy if necessary.

1656. Deputy Foley.—On subhead D — Apparatus and Chemical Equipment — £258,000. You underspent in that period by by £126,000?

Mr. Cromien.—There was a saving there. That year the Government required a saving on pay across the public service. It was agreed in that Vote, because of the small scope for saving in respect of pay, that this element of current expenditure — purchase of apparatus — would be cut or reduced. That is how this very substantial saving was made.

1657. Deputy Foley.—Is all that apparatus that was purchased at the time in use at the moment?

Mr. Cromien.—I could not answer that question, frankly, Deputy, but my assumption is that it is, since it was purchased only that recently.

1658. Chairman.—The State Laboratory is located out in Abbotstown?

Mr. Cromien.—Yes.

1659. Chairman.—Would the expenditure that is included here include forensic science expenditure for the Department of Justice or does that come under their Vote?

Mr. Cromien.—That is a separate Vote.

1660. Chairman.—What in general does the State Laboratory do, please?

Mr. Cromien.—It does two sorts of things. First of all, it does analytical and advisory work for Departments and offices. For instance, it will examine fertilisers, feeding stuffs and so on for the Department of Agriculture and Food, with a view to seeing whether their components are in line with EC requirements. For Revenue, it classifies goods for customs purposes. Again, it examines whether the proportion of substances in them is such as to enable Revenue to levy the appropriate duties on the goods.

The second type of work is testing for nonGovernment agencies. Toxicological examination at the behest of coroners. These consist of the analysis of body contents for the presence of alcohol, drugs and so on. That is the major work.

Chairman.—Fine, if the Committee is agreed, we will move on to Vote No. 11.

1661. Deputy Crotty.—Under Appropriations in Aid, in relation to recoupment of certain travelling expenses, what recoupment was involved?

Mr. Cromien.—This is in respect of EC travel. This was recouped from the EC.

1662. Deputy Naughten.—Would part of their work be to define precise standards of products for the purpose of EC refunds, etc?

Mr. Cromien.—Yes.

1663. Deputy Naughten.—We had a situation here recently where whey powder was classified as skimmed milk powder and then re-classified. It cost the State a substantial amount of money. How could an error of calculation like that happen in the State Laboratory?

Mr. Cromien.—I understand that this is a matter that is sub-judice at the moment. I could not comment on it. Proceedings are taking place.

1664. Deputy Kitt.—Can all of the required testing be done in Abbotstown or does the laboratory have to organise testing outside the country? I would also like to know — if that is the situation — who pays for that. Is it included in this particular Vote?

Mr. Cromien.—My understanding is that it is all done in the laboratory.

Deputy Kitt.—There is no testing done outside the country?

Mr. Cromien.—I have no information to the effect that there is anything done outside the country. Not as far as I can see from my papers here.

VOTE II—SECRET SERVICE

Mr. S. Cromien further examined.

1665. Deputy Foley.—Less than £79,000 of the £170,000 granted was expended. What is the purpose of this fund?

Mr. Cromien.—I think the purpose is just to provide finance to Ministers for the purposes of secret services.

1666. Chairman.—Would it be largely in the purchase of intelligence?

Mr. Cromien.—I could not comment on what it is for. You understand the background to this? The Committee normally does not press me on this because the Dáil waived their right to examine this in detail, because of the nature of the service.

1667. Chairman.—What the Dáil have done is permitted the expenditure of this money once it is certified by any two Ministers. Is that correct?

Mr. Cromien.—Yes.

1668. Chairman.—It does not include salaries?

Mr. Cromien.—I could not comment on anything that is in it, to be quite frank.

1669. Chairman.—But it would be fair to say that any salaries for the security services are paid out of other Votes, Justice or Defence or whatever?

Mr. Cromien.—Yes.

1670. Deputy Desmond.—It is appropriate to say that the certification, the note there by the Comptroller and Auditor General, certificates from the responsible Ministers that that includes the Minister for Finance?

Mr. Cromien.—The procedure here is that a Minister who wishes to have an advance from the fund, applies to the Minister for Finance for an advance. If and when the Minister approves the application, the advance is made by the Department to the Minister. The Minister concerned then certifies to the Minister for Finance the amount actually spent. It is those certificates that the Comptroller and Auditor General will note.

1671. Chairman.—I do not think it would be fair to leave on the record the suggestion that the Dáil has waived its right to examine this account. In fact, there was one very historic situation where the Dáil went into this particular Vote in great detail. It is also fair to say that the reason why there is usually an under-expenditure in this area is that the Department does not want to come back to the Dáil for a Supplementary Estimate.

Mr. Cromien.—Yes.

1672. Chairman.—And thereby draw attention to this Vote at any time in the year. So, there is usually a refund on this.

Mr. Cromien.—There is usually a margin in it, Chairman.

VOTE 14—MISCELLANEOUS EXPENSES

Mr. S. Cromien further examined.

1673. Chairman.—State entertainment is now allocated across the various Votes, from 1988 onwards?

Mr. Cromien.—That will be the intention.

1674. Chairman.—What is the bounty for a centenarian?

Mr. Cromien.—It is £250 now. At the time of this Vote it was £50.

1675. Deputy Desmond.—The recoupment to the Central Bank of payments to the liquidator in the Irish Trust Bank — do you have the aggregate cost to the Exchequer of that exercise?

Mr. Cromien.—The final cost is likely to be about £940,000.

1676. Deputy Desmond.—You might to be able to give us some assistance on the number of depositors whose particular plight was relieved by the then Minister for Finance.

Mr. Cromien.—I have not got the number but I could make it available to the Deputy.

CONTINGENCY FUND DEPOSIT ACCOUNT

Mr. S. Cromien further examined.

1677. Chairman.—What is the Contingency Fund Deposit Account for?

Mr. Cromien.—This is usually used to pay the salary and expenses of a Minister in charge of a new Department before the Dáil can vote money for his Department. It was not drawn on in 1984.

Thank you very much, Mr. Cromien. You have been very informative.

The witness withdrew.

The Committee went into private session.

The Committee adjourned.