Committee Reports::Report - Appropriation Accounts 1984::15 March, 1988::MIONTUAIRISC NA FINNEACHTA / Minutes of Evidence


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AN COISTE UM CHUNTAIS POIBLÍ

(Committee of public Accounts)

Déardaoin, 18 Nollaig, 1986

Thursday, 18 December, 1986

The Committee met at 10.20 a.m.

Members Present:

Deputy	D. Lyons,	Deputy L. Naughten.
„	B. McGahon

DEPUTY D. FOLEY in the chair

VOTE 42—DEFENCE.

Dr. Michael J. Somers called and examined.

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

Subhead J.—Mechanical Transport

The Transport Stores and Base Workshops of the Defence Forces are located in Clancy Barracks, Dublin and supply the mechanical and technical spare parts required for the fleet of vehicles used by all units. As a result of the increased size of this fleet in recent years the number of spare parts carried in these stores has grown to a present level of approximately 26,000 classifications representing spare parts with an estimated value in excess of £1 million. Expenditure on spare parts in 1984 was of the order of £2.5 million.

The regulations issued by the Quartermaster General governing all aspects of the operation and control of these stores require that a stocktaking be completed every two years.

It was observed in the course of a local audit carried out by my staff in February 1985 that a complete stocktaking had not taken place since 1973. Furthermore, the recording of issues made from a number of sections of the stores was considerably in arrears with the result that it was not possible for my staff to carry out a test examination of the accuracy of the records and to establish whether the physical stocks held were in agreement with them.

I have asked the Accounting Officer why a complete stocktaking has not been carried out in these stores since 1973 and whether stocktaking was completed in accordance with the prescribed regulations at all other military stores in 1983 and 1984.

I have inquired why the recording of issues was in arrears and what action had been taken to clear these arrears and maintain the records up to date.

I also asked the Accounting Officer whether he was satisfied that regulations and procedures to control and safeguard stocks held in military locations are adequate and effective.”

Mr. McDonnell.—There are just two paragraphs on Defence. The first one, paragraph 55, draws attention to the failure of the Department to fully apply the prescribed internal control procedures designed to ensure that the purchase and utilisation of spare parts are properly controlled and accounted for. Obviously, these procedures would include the up-to-date recording of all items delivered by suppliers and taken into stock and also of all items issued from stores on the foot of authorised requisitions. These recording and control procedures should then, of course, be supported or supplemented by periodic stocktaking in order to ensure that they are being adhered to and also that the physical control of stocks is satisfactory. Since the date of my report the Accounting Officer has told me that at the Main Technical Stores in Clancy Barracks stocktaking was not completed every two years in compliance with the prescribed regulations due to a number of factors, mainly a threefold increase in transport vehicles and spares since early 1970, a reduction in the number of civilian staff employed on this work due to the restrictions on the filling of vacancies, financial restrictions on the working of overtime and union problems relating to the employment of civilians in stocktaking duties. These were also the reasons for the delay in the recording of issues from stores. There are two problems: there is the stocktaking and the recording of issues. The Accounting Officer said that a 90 per cent stock check had been carried out by a handover board in November 1974 and a new board, which commenced on that date, checked the remaining 10 per cent of the stores. Stock checks had been completed in a number of sections of the stores in 1981 and 1982, and, with a view to the introduction of a computerised system in 1986, which would result in greater efficiency and control, special stocktaking teams are detailed to commence a 100 per cent stock-taking in June 1985. It was also the intention that the recording of issues would be brought up to date in conjunction with the computerisation. He went on to say that a board of officers had been convened to review and amend the regulations, to meet the requirements both of expanded holding of stores and of the new computerised stores accountancy system. He said that, while stocktaking had been completed in the majority of military stores in 1983-84, a number of the larger stores found it impossible to comply with the requirement of a stocktaking within two years. In those cases continuous stocktaking was in progress with a view to achieving a full stock check as soon as possible. Ultimately, the Accounting Officer said he was hopeful that the proposed computerisation of the larger technical stores would resolve most of the difficulties which have been experienced over the years there. I hope I have given a reasonable summary of the Accounting Officer’s response, which followed the date of publication of my report.

704. Deputy Naughten.—Could you inform the committee of this computerised stock control system that is in operation at present, Dr. Somers?

Dr Somers.—Perhaps I could go back a bit to outline the background to this. The stores that we are talking about are based in Clancy Barracks, Islandbridge. It is a very old building; it dates back to the British times. It was never constructed for the purpose it is being used today. There is an enormous amount of spare parts in the place. There is something like 26,000 separate types of parts and about a half million individual parts. These range from things like alternators and starting motors to washers, nuts and bolts and so on. The present stores are physically not capable of coping with the type of equipment that we have in them at the moment. The existing building has to be abandoned in the fairly near future. The roof is leaking; it is incapable of being repaired. We have a new building in Clancy Barracks which is under construction. It is virtually finished at this stage. It is to be used as the main stores for the parts in question. In association with that we intend to computerise the stores. This computerisation will be a major task. The first element of it involves bringing up to date the posting of all documents, which had been five or six months in arrears. It is now down to about two weeks in arrears. When that is done, and in association with the move across to the new stores, our intention is to computerise the operation at that stage and to account for all the products in the stores then. We are faced with difficulties in regard to personnel. The staff in the military stores consist of a few Army officers and a number of civilian employees. Due to the operation of the embargo the number of civilian staff has dropped by about 23 per cent since 1981. We are faced with an increasing complexity in the stores because this is the main stores for all military vehicles. We have about 1,500 vehicles of quite significant complexity and variety. With engines and such like changing every few years, even if you have the same model, the engine and other parts are constantly changing. It is a major operation. We intend to start in 1986 on the computerisation of the projects. The speed at which it will go ahead will depend on the money that we can put into the computerisation and on the availability of staff to do the actual work.

705. Deputy Naughten.—Did I hear you correctly when you said you intended to start in 1986?

Dr. Somers.—Sorry, I beg you pardon, 1987.

706. Deputy Naughten.—In other words, the computerisation of stock has not started as yet?

Dr. Somers.—That is true. We had, first of all, to get the building, which is now virtually completed, and it is a modern stores building. The position at the moment is that I have gone up to see the stores and have gone through it in a fair amount of detail. Literally we have parts on the floor and in shelves hanging out of shelves. Because of the condition of the roof the parts have to be moved around every so often to get away from the leaks. We tried to get the roof fixed. Apparently the fellow who got up almost came through the roof, so attempts to fix it had to be abandoned. It is quite a shambles at the moment. We can only hope that by this time next year considerable progress will have been made.

707. Deputy Naughten.—Certainly we have heard a pretty horrific description of the type of stores that exist there at present. You will accept that there is a lot of stock there — the estimation here is upwards of one million at any one time — and, as you have pointed out, there are 26,000 items. Is it not quite possible there could be a fairly considerable haemorrhage of parts from the stores resulting in a substantial loss to the State in the absence of a reasonable standard of stock control, which, it would appear, does not exist at present, or of stocktaking on a regular basis.

Dr. Somers.—Just a slight correction there. What we have is 26,000 separate types of parts. We have about a half million parts in the stores, ranging from nuts and bolts to gaskets, to speedometer cables, right up to engines. I would not want to give you the impression that we are not very concerned about this and that checks are not being carried out. In fact checks are carried out on a fairly regular basis. In addition to stock checks by the military we have civil service audit staff who go in and check approximately every three months. They do a spot check of the equipment in the stores. To date no significant frauds or losses have been discovered. We are extremely concerned that the full stocktaking requirements are not being met. There is a vast quantity of equipment but so far we are not aware that any significant quantities have gone missing.

708. Deputy Naughten.—Is it not possible to supplement the non-military staff by military staff?

Dr. Somers.—We, in fact, have done some of that. We run into certain problems with the trade unions if we go overboard on it. We have got the recording of issues in and out down to about a few weeks arrears, down to about two weeks, from about five or six months. I think that the major break-through has to await the move into the new stores. At the moment it would be physically impossible to do a full stock-taking. It would involve the closure of the stores for a significant period of time. Given the nature of the operation that is being carried out there, it is a military operation and it has to be kept going at all times. We cannot close the stores as you might in a commercial business. At the moment it is not possible. We hope when the operation gets into the new stores that the problems we are now experiencing will largely disappear.

709. Deputy Lyons.—In reading that report I would sum it up by saying it is very disturbing. It is even more disturbing to hear the Accounting Officer say that stock control regulations are impossible to comply with. I want to know why a statement like that could be made. I have quite a number of queries. When was it realised that the situation of the stores, i.e. the stock in the stores and the buildings were in the situation that was described by the Accounting Officer? When was it realised that this operation — the buildings and the situation of the stock — was unsuitable? I think these were the words the Accounting Officer used. How was stock control operated? How were the fast running parts in any store replenished? Was it when you went to the bin for a particular job and the item was not there and then you had to rush around town? Is there a cardex system working there? Has there been a cardex system working? This paragraph indicates stores at Clancy Barracks. It also goes on to say that the parts are required for the fleet of vehicles used by all units. Does that mean that the chaotic situation that exists at Clancy Barracks has a spin-off effect in Renmore, Galway, in Custume Barracks, Athlone or in Collins Barracks in Cork? If that is the central stores for the entire country the problem is not just out there; it must be throughout the country. It is totally unacceptable that this situation should be allowed continue since 1973. How do we know how much obsolete stock is in our stores by the obvious changing of type, model and year of vehicles being used. I find it difficult to say in a few words what this very disturbing paragraph tells us about the stock, about the “control” of the stock, the fact that we did not have stock-taking, as anybody would understand stock-taking, since 1973. I am more appalled to think that according to a reply to my colleague, Deputy Liam Naughten, Army personnel could not be used to take the stock. I am not accepting that the computer system is going to cure all the ills, it may be a long way down the road, because if you instal a computer at Clancy Barracks, that is only the beginning of a job. If we are servicing all the other units with spare parts they must have a tie-in computer. What kind of expense are we talking about? What kind of time scale are we talking about before we have this total mess cleared up? I accept that the 26,000 classifications probably do not include in detail each item of stock. It could not possibly do so. It would run into much more than that because you could be talking about three eighth flat washer and a ½ inch flat washer, a three eighth spring washer and a ½ inch spring washer. You could go on in detail. It is obvious to anyone listening to me that I have some idea of what is involved here. It appals me that there has been no stocktaking since 1973. It would be impossible to run a store of that magnitude serving all the units of our country within the Army system without having a stock control assessment done in that period of time. I have no easy solution except, first of all, to be very critical of this very disturbing report and to say that no matter what it takes to put the matter right in finance and in personnel, that must be done before we go any further because there must have been enormous loss of time in checking out that there was something in a bin, or wherever the engines are stored, to discover if a particular engine was there. If it is not there you have to come back to the head store keeper and then run around to the various locations to get that replacement that might be urgently required. That is just one example of the waste of time that must have occurred in the absence of complete stock control and an up-to-date cardex system of whatever was there. I am not asking questions other than those I have asked. I am making a general observation on the report and it is very disturbing.

Dr. Somers.—A number of points have been raised starting with the buildings. A number of members of this committee have visited some of the military buildings particularly in the northern part of the country. You have seen for yourselves the condition of many of these establishments. A lot needs to be done with them and, unfortunately, our stores are no exception. You have seen the living accommodation of many of the troops. When I came into Defence I was quite taken aback when I saw the conditions people had to live in. The stores are no exception to this. In many instances they are in very poor condition and there is nothing new about this. We have inherited a lot of these buildings from the British and in many instances not much has been done with them since British days.

710. Deputy Lyons.—In regard to obsolete stock the military authorities go through their stores and where there is obsolete stock they dispose of it so that the stores are not cluttered up with parts in respect of vehicles that have been long off the road. The stock is modern and up-to-date. There is a card system in operation which keeps control of the items that are in the stores. The main difficulty is the physical job of counting the various items in the bins and reconciling that count with the cardex. There is a cardex system in operation and they reorder depending on the run-down of stock as identified by their cardex system. Checks are taking place, not a full stock-taking, but partial stocktaking takes place and we ourselves arrange spot checks every so often in these stores. These are the main transport stores in the country. The other stores around the country are much smaller and would carry much smaller quantities of goods. The problems relate to the main stores, which is a very large operation. We do not have the same difficulties with the smaller stores around the country.

711. Deputy Lyons.—The smaller stores would be supplied from the central stores. If we do not know what is in the central stores and we have a requisition from Collins Barracks in Cork, how do we fulfil that order?

Dr. Somers.—It is not that we do not know what is in the stores. The problem is that the military authorities have not counted every item that is in the different bins and reconciled that count with the items on the cardex. If a requisition comes in for a specific item from Collins Barrack or wherever they can check that they have the item through their cardex system and then go to the bin and take it out of the bin and send it on to Collins Barracks. There are approximately 500 stores in all in military properties around the country. It is a fairly large system.

712. Deputy Lyons.—In the case of the other units around the country, are they in a position to have parts sought locally rather than put everything through Clancy Barracks?

Dr. Somers.—The system is that they can get the goods either from Clancy Barracks or buy locally. Both options are open to them.

713. Deputy McGahon.—I just want to express my own amazement and that of my colleagues at the fact that for 13 years, from 1973 to 1985, there was no proper stocktaking with items of the value of £1 million. I find it incomprehensible to believe that that could occur. The fact that the stores department in Clancy Barracks might be antiquated and that there is a leaking roof is surely stretching the imagination too far. Leinster House was built in 1745 and it is not really suitable for us, but we function in it. The fact that an Army that fights no wars cannot have the time, either by civilian personnel or by Army personnel, to do stocktaking defies description. Surely Army personnel could be detailed to do that type of work. Surely it can be made part of the Army personnel responsibility to do that type of work.

Dr. Somers.—I accept the Deputy’s point that the Army are not fighting any wars, but they have a very considerable amount of other duties to do. We are all familiar with seeing the Army around the city and on the Border areas, etc.

714. Deputy McGahon.—They fight boredom, too. Surely you are not telling me that the Army are so overburdened with tasks that they cannot control their own stocks, or is it just another example of the fact that it is the State involved and at the end of the day, irrespective of whether you stocktake or not, or if there is an over-expenditure, the State will pay it. Is there an element of that in it?

Dr. Somers.—I would not want to give the Deputy the slightest impression that we are not concerned about this. We are extremely concerned that regular complete stocktaking should take place and that all this equipment should be properly safeguarded. In fairness to the military authorities, where I sit in the Department of Defence I receive their requests for men, equipment etc, and they put it to me that many of their troops are working 55 hours to 70 hours per week and that they have been given an enormous number of tasks to do. I must accept it when they say to me that these people are working hard and that they just have not got the personnel to put into items like stocktaking. We would not want to give the impression that nothing has been done. Stocktaking is going on all the time in different parts of the stores. In approximately 33 per cent of the main stores, stock-taking has been completed. It is just a third of the way and we intend that further progress will be made.

715. Deputy McGahon.—Could I suggest to you that you just do not know if mis-appropriation has occurred over the years or if there has been leakage?

Dr. Somers.—The evidence available to us from our own spot checks is that there have been no major losses or defalcations. Only a complete stocktaking would reveal whether some items had gone missing. There is literally a half million items in those stores, ranging from washers to major items. Looking at the thing realistically, there is little doubt that at least some washers may well have disappeared over the years.

716. Deputy McGahon.—Whether it is washers or whether it is other more sophisticated type of spare parts, it indicates the need for a proper check every year. Can I ask about the security aspect of it and, on a broader issue, the security aspect with more sensitive stock held by the Army? Is there the same laxity in that area?

Dr. Somers.—You are not talking about the technical stores in Clancy Barracks?

717. Deputy McGahon.—No, I am widening the question.

Dr. Somers.—In regard to stores where ammunition, weapons, etc. are concerned, there is absolute control. Nothing can go missing. If a single round goes missing, there is trouble.

718. Deputy McGahon.—You are quite happy that no subversive organisation could ever get access to military weapons?

Dr. Somers.—I am as happy as I think I can be in the situation. I am assured that there is no way that this can happen.

719. Deputy McGahon.—Apart from the stock control, is there 24 hours security?

Dr. Somers.—On military equipment, absolutely yes.

Chairman.—There was one question there, Dr. Somers, I think it was in reply to Deputy Lyons. Deputy Lyons might repeat the question again in regard to the building.

720. Deputy Lyons.—Perhaps I put a whole lot of things together, but there is one thing in particular I would like to know. When was the situation in the stores with regard to the buildings realised and what action was taken? Are there any proposals? You mentioned that now there is something going on. But is the situation in Clancy Barracks with regard to buildings reflected in the other smaller stores and the other units throughout the country? Would you indicate to us when was the situation as regards the stores realised and particularly with regard to the buildings where the stores were housed? I am not one to suggest that, if stock is missing, it is necessarily removed without authority or otherwise, because stock can be missing by means of a wrong number being quoted on a job card or on a document. I do not suggest, and I do not wish to suggest at any stage, that any discrepancy in stock would necessarily mean that it was removed illegally or unofficially out of the control of the Department of Defence?

Dr. Somers.—As regards the problems with the buildings, I do not know when it was first decided that the building was unsuitable. I would imagine that it must have been many years ago. The building itself dates back to British days. It is a galvanised steel wall building which would have a limited life. The provision of a new building depends on the amount of money that we can get each year. A list of priorities for building works is drawn up by the Quarter Master General who would submit this to the Department each year. Depending on the amount of money we have then, we would build either stores or accommodation or whatever. This new store in Clancy Barracks has been put up within the last 12 months. At this stage it is virtually completed. I hope it will be occupied within the next few months.

721. Deputy Naughten.—I think we should ask the Accounting Officer what can be done to get Army personnel involved in stocktaking. I appreciate that there are many demands on Army personnel between United Nations duties, courts, Border security and all the other things they are involved in. But we should try to get stocks under control. That is extremely important. I appreciate the point made with regard to the buildings. I was one of the people who visited a number of Army barracks in the last 12 months and I was surprised at the condition of some of the buildings. It was a credit to the morale of the Army for being able to operate under such conditions as existed in some barracks.

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

“Subhead GG.—Central Purchasing

The former Department of Posts and Telegraphs provided a central purchasing service for other Government Departments up to the end of 1983 when the main functions of that Department were taken over by the two new State-sponsored companies, An Post and Bord Telecom Éireann (BTE).

As an interim arrangement, pending a review by the Department of the Public Service of the organisational arrangements for purchasing the requirements of Government Departments, the Government decided in September 1983 that the central purchasing functions in relation to vehicles and transport equipment, communications equipment and clothing should be transferred to the Department of Defence from 1 January 1984.

The Government also directed that there should be no loss to the Government sector in terms of staffing, stocks or warehouse accommodation as a result of the transfer of central purchasing functions. This meant that the stocks on hands, other than those acquired for the former Department of Posts and Telegraphs, were to be transferred to the Department of Defence on 31 December 1983 together with appropriate warehouse accommodation to enable that Department to assume the central purchasing function.

A full listing of these stocks amounting in value to £3,123,022 was supplied to the Department of Defence by BTE in July 1985 but the items have not yet been identified, verified by stock count, or taken on charge by the Department of Defence. Warehouse accommodation has not been transferred. Neither have arrangements been made for that Department to take sole custody of and control over the stocks to be transferred nor over items purchased since the transfer of functions which are being stored in the warehouse accommodation still in the possession of BTE. I have sought the observations of the Accounting Officer and I have also asked for his observations on the delay in implementing the decision regarding the transfer of functions.”

Mr. McDonnell.—Paragraph 56 relates to problems experienced by the Department of Defence in taking over responsibility for the provision of services to the other Government Departments. These were services which up to December 1983 had been carried out by the former Department of Posts and Telegraphs. My concern is that the terms of the Government direction which was designed to ensure that the Department of Defence would acquire accommodation for and custody and control over stocks which were not being handed over to the two new companies should be fully and quickly implemented because there were two areas of stock: there was the stock being handed over to the Post Office which they were taking with them and the other central purchasing function for other Government Departments. If the Government decision were not quickly implemented there was the danger that it would not be possible to set up and apply satisfactory stock control procedures. Since we have been talking about stock control procedures I want to emphasise that we are not talking about military stock here. This is a service being provided by the Department for all other Government Departments. I should emphasise that the Department of Defence was given this responsibility apparently on the basis of expediency, because as I have said in the paragraph — it was seen as a convenient temporary solution to an immediate problem. It was a solution pending a review of the position by the Department of the Public Service.

Since they were given the responsibility there was the further point of verifying that the stores which they were taking over and which were stated to be worth upwards of £3 million were there on the take-over date. The Accounting Officer told me since the date of my report that it had not been possible to take custody of what is known as central purchasing stores because the necessary warehousing had not been made available to the Department of Defence for — and I emphasise this — reasons over which that Department had no direct control. At the time of transfer of functions the Department of Defence would have been satisfied to accept part of the existing warehouse facility which is situated at John’s Road, Kilmainham. But the Department of Posts and Telegraphs were insisting on separate access and so on. They were suggesting a road through the grounds of the Royal Hospital and this was unacceptable to the Office of Public Works.

There was a number of other proposals. In November 1983, it was suggested that a warehouse be acquired at another location at the expense of An Bord Telecom. That fell through because An Bord Telecom were only prepared to pay a little less than half the cost. They were prepared to pay £425,000 when the accommodation which would be required for this service was estimated to cost just under £1 million, £929,000. There were negotiations involving Finance and Communications, the Office of Public Works and An Bord Telecom. These made little progress until another offer was made to provide accommodation for the Department of Defence. The Accounting Officer has told me that this latest offer was under examination in consultation with the Office of Public Works, but there was a crucial question of whether the offer complied with the terms of the Government directive because the Government laid down that there was to be no loss to the public sector in regard to staffing, accommodation and so on.

In regard to the Department of the Public Service the Accounting Officer in November 1986 told me that the Department of the Public Service was not yet in a position to furnish a report on the review of the arrangements which would need to be carried out for this service.

I will conclude by saying on the question of verifying that the stocks which the Department of Defence were given responsibility for and which are valued at approximately £3 million, did exist on the date that the Department was given responsibility for them. The value was subsequently changed to £3.7 million. The Accounting Officer said that the listings have been verified with the actual book records and that the verification of the physical stocks would be undertaken when the accommodation problem was sorted out or in prospect of being sorted out.

723. Deputy Naughten.—First, could the Comptroller and Auditor General tell us when was that note received from the Department of Defence? Is it up-to-date or was it received some time ago?

Mr. McDonnell.—The more recent one on 19 November 1986. That was in regard to the survey by the Department of the Public Service in order to devise permanent arrangements because, as I emphasised earlier on — I hope I am not preempting the accounting officer — the Department of Defence was simply given this as an expediency measure at the time when there was an urgent problem. The Department of Posts and Telegraphs was being set up as a separate entity and somebody had to take over the responsibility for the central purchasing function for other Governments. The Department of Defence was given the responsibility but it was an expediency move pending this review.

Deputy Naughten.—Again, on a point of clarification, a Government directive was given that the Department of Defence should take over the central purchasing procedure from December 1983. Is that correct?

Mr. McDonnell.—Yes, that is correct.

Deputy Naughten.—Could Dr. Somers inform the committee as to why that procedure has not followed?

Mr. McDonnell.—I did not mean to convey that the Department of Defence were not doing the purchasing and so on since but the actual survey with the view to devising permanent arrangements had not been carried out. I did not mean to suggest, if the Deputy is getting that impression, that the Department of Defence had not been actually carrying out the function of purchasing and so on since December 1983.

724. Deputy Naughten.—I will rephrase my question. They are carrying out the purchasing but they have not got possession of the property. Why has that happened? Whose direct function is it to ensure that you do get the property? A Government directive has been given that you acquire this property together with the stocks; yet that has not happened three years later?

Dr. Somers.—In regard to this problem we are the meat in the sandwich. On the question of premises generally held by the Department of Defence there is a fairly clear divide. We own directly the military properties that are appropriate to the Department of Defence. The civilian properties, including the building that we occupy ourselves as civilians and these warehouses, would not be owned by us. The ownership would be with the Board of Works. This whole arrangement was to be an interim one pending a review of the appropriate organisational arrangements that should be made for purchasing by the individual Government Departments. The position we are in at the moment is that we are quite prepared to go ahead and do this work, and in fact have been doing most of it, but we have not got physical possession of the warehouse because of an ongoing dispute between Bord Telecom and the Office of Public Works in regard to what exactly is to be handed over. In the meantime the system is working all right. We are acting as the central purchasing agent, largely in respect of cloth and clothing and cleaning materials, but we have not got the physical possession of the building. In the meantime we hope that this on-going dispute between Office of Public Works and Telecom would be satisfactorily settled in the near future. It is a question of how much warehouse space they are prepared to hand over.

725. Deputy Naughten.—It would appear that a Government directive given three years ago is not being implemented and that BTE is deliberately preventing the implementation of that Government directive?

Dr. Somers.—As we see it, we were to get proper warehousing facilities to carry out the central purchasing function and because of this dispute between BTE and OPW we have not got it. We are not happy with that situation. If we are to do the central purchasing we should be given the facilities to do so, including the warehouse. We have written on numerous occasions to the people concerned urging them to bring this to a satisfactory conclusion and give us the warehousing facilities we want.

726. Deputy Naughten.—Are you satisfied that there was £3.7 million worth of stock there when you took it over?

Dr. Somers.—Yes, we are. A check has been done on the stock and we are satisfied the stock is in order.

727. Deputy Naughten.—Chairman, I think this committee should note in their report their dissatisfaction with the fact that a Government directive which was to come into operation in December 1983 has not yet been implemented and seek an explanation as to why.

728. Deputy Lyons.—From all of this, it appears to me that we now have — when I say “we” I mean the Government — lost control over Bord Telecom Éireann. Three years on that semi-State organisation has not complied with the directive. I do not wish to take sides in an on-going dispute between Bord Telecom Éireann and the Office of Public Works, but in my view it is time that these heads were knocked together and the directive given by the Government operated. This committee should be recommending that the directive as issued must be demanded by us so that all these functions of stores and purchasing would be put on sound footing as was intended. As long as it goes on like this, it is fraught with inefficiency and is unsatisfactory. As an accounting committee we cannot allow it to continue without making the observation that we demand it be done.

729. Chairman.—Could I make a point? Once your stocks go into the stores, who handles them? Is it Bord Telecom or your staff?

Dr. Somers.—At the moment in these stores it is Bord Telecom staff who handle them. They are responsible for the safe keeping of these stocks and to ensure there are no defalcations. We would hold them responsible if anything is missing.

Chairman.—Where do your staff come in with regard to stocks?

Dr. Somers.—We have records of all the authorised issues and receipts in and out of those stores. But the actual physical control of them at the moment is still with Bord Telecom. As I say, they are responsible for the safeguarding of those stocks.

730. Chairman.—Could I ask the Department of the Public Service why you have not carried out the review as per the Comptroller’s report?

Mr. C. Gallagher (Department of the Public Service): The review is being carried out. It is being complicated by the difficulties about the warehousing and so on, but it is being carried out. We are happy with Defence running the stores at the moment. Quite frankly, Defence had it landed on them because a Government decision was taken shortly before the departure of Telecom and the stores from the Civil Service. There is probably no other Department that could have handled it. It is tied up with a general review of the procurement function for the Civil Service generally, but we would expect it to be finished at some stage this year.

731. Chairman.—When did the review get underway?

Mr. C. Gallagher.—The review was launched almost at once in 1983 or early 1984. It was tied up initially with trying to get the interim arrangements in place. Now more long term arrangements are being looked at and the question of what functions would be handled centrally and what functions would be handled by the Departments has been given a bit of trouble.

732. Chairman.—Surely, with a review starting in 1983, and were now coming into 1987, you cannot be satisfied with that situation?

Mr. C. Gallagher.—It is pretty complicated business. Defence took the job on on an interim basis but the probability is that the bulk of the work will remain with Defence. It is the only Department that happens to have the range of expertise to handle certain of the work. If you break it up and spread it around Departments, which was the alternative that was being considered, you could end up with a lot of duplication of staff and effort. There are certain elements in it. Certain stores procurement could probably be more economically carried out by individual Departments, so what is going on is going through different elements of procurement and seeing what could best go where. Again, in an embargo situation Departments are not going to be madly anxious to take on procurement work when they are not getting the staff for it.

733. Chairman.—I am not going to take issue with you. I accept the points you have made. But surely the fact that a review started in 1983 and is still going on coming up to 1987, when do you expect that review to be completed?

Mr. C. Gallagher.—I think mid-1987. You can ask me about it next year.

734. Deputy McGahon.—The Department of the Public Service say they are happy with Defence doing the purchasing, but are Bord Telecom Éireann happy? Is there any dispute over that situation?

Dr. Somers.—No, the dispute is only in regard to the warehouse, the fact that we have not got the warehouse we were supposed to get. We have no dispute with Bord Telecom.

735. Deputy McGahon.—It seems extraordinary that after three years two State bodies cannot agree on a Government directive. Is it not extraordinary that this committee has to draw the attention of the Government to that fact? Surely the Government could ensure that the two of you get together and work it out satisfactorily?

Dr. Somers.—As I mentioned at the beginning, we are the meat in the sandwich in this one. It is a cause of considerable exasperation to us that we have not got this warehouse. I share the sentiments you have expressed. We would be only too happy to undertake this and get the show on the road.

763. Deputy McGahon.—Is it likely to be resolved in the near future?

Dr. Somers.—We hope so. It is not for want of pressure from us. We have spoken to people, we have argued with them, we have written letters to them. We want the problem resolved.

737. Deputy McGahon.—You are not taking them to court?

Dr. Somers.—I doubt it.

738. Chairman.—Are there costs involved as a result of all this? Are there any substantial costs?

Dr. Somers.—The situation at the monemt is that Bord Telecom have to be paid for running the warehouse and providing the staff to do this warehousing function.

739. Chairman.—What would the figure be?

Dr. Somers.—The cost at the moment is roughly £190,000 per year. This is being paid really without prejudice because there is also a subsidiary dispute as regards the actual ownership of the premises between the Office of Public Works ane Telecom. It may be possible to recover some of that money from Telecom when the subsidiary problem is sorted out.

740. Chairman.—We will move on to the Vote, page 155.

741. Deputy Lyons.—We were talking earlier about buildings and the deplorable condition of buildings and it is fairly said that the Department of Defence or the personnel were operating in unsatisfactory conditions. Nevertheless, they seem to be performing as well as possible. I see here in this Defence Vote, Chairman, an amount under “Buildings” of £5.3 million subhead S. Could I be told briefly or generally, what was that amount of money used on? That is for one year — £5.3 million. No, it was £6 million. The grant was £5.3 million and we had an overrun of £782,550. What was that money used for?

Dr. Somers.—The principal breakdown in that particular figure is between new works alterations and additions which came to £3.2 million and repairs, renewal and maintenance which came to £2.8 million. It is not an insignificant amount of money I should say. However, it was spread among a very large number of establishments. We have 47 barracks around Ireland and there are approximately 300 other posts and they all require quite an amount of maintenance and expenditure on them. The main works that commenced in 1984 was phase 1 of a single officer’s quarters in Cathal Brugha Barracks here in Dublin and a runway radar installation at Casement Aerodrome and an anti-tank range in the Glen of Imaal. Various other works then were also planned in 1984 — billets in Ceannt Barracks; cookhouse and dining hall and men’s club in Ballincolling and a cookhouse, dining hall and men’s club in Casement Aerodrome.

742. Deputy Lyons.—In pursuing that line of questioning, would I be correct in assuming that down through the years money was allocated for the buildings? It was mentioned earlier by Dr. Somers, who referred to when we took over a lot of these buildings from the previous occupier of this country, the previous foreign power occupier of this country which is still in part of our country now I admit, but I am talking about the part that we are responsible for at the present and surely, Chairman, it is not beyond the bounds of possibility that similar figures were allocated in all of these years, since 1938 possibly, and it would appear to me that we have been repairing buildings that in effect were obsolete and that we should have had a plan of replacement so that by the time we reach the early eighties, we would have had buildings requiring less repair — £2.8 million in one year. I would accept new works at £2.3 million. It seems to me, Chairman, that the whole thinking on expenditure of money on building over the years has been a bit off-side, to put it mildly. Could I now suggest after the revelation of some of the information we have here this morning that the Department and Government would take a very serious look at this type of expenditure of taxpayers money which is in such short supply? We should not be throwing good money after bad trying to bolster up these inadequate, sub-standard buildings under the aegis of the Department of Defence. It is quite clear that that is what has been happening and I would recommend to this committee a review of where we are at with this sort of expenditure on buildings when we still have so many unsuitable buildings and in one particular instance three are buildings of great importance. No doubt there are other aspects of the buildings in the realm of the Department of Defence equally as unsuitable as the building for stores. This whole matter of expenditure would need to be looked at in the broadest context so that we could plan at least for a day to arrive sometime when we would have less of this expenditure on repairs of unsuitable and obsolete buildings. It is no excuse, or acceptable reason to me, to say that we got them from another crowd, because they never gave us anything.

743. Deputy McGahon.—Under subhead D — Reserve Defence Forces, that is the FCA, there seems to be a large under-expenditure there. Why is that? Has there been a decision to phase out the FCA and does it not continue to figure in your plans?

Dr. Somers.—Certainly there has been no decision to phase out the FCA. It figures largely in our plans. As you know, the expenditure on the FCA is largely on pay and gratuities for people who turn up for the annual summer camp and of course, the overall strength of the FCA is also relevant in this context. The saving is due to the fact that fewer turned up to the camp and fewer were in the FCA in that year, than anticipated.

744. Deputy McGahon.—How many people would be in the FCA roughly? Has it been downgraded in recent years? The fact that fewer people are showing an interest in it, is that indicative of any weakness in that particular organisation or is there any real emphasis placed by the Department on the continuation of the FCA?

Dr. Somers.—As regards the numbers, there are approximately 15,000 in the FCA. Not all of those of course would turn up for their annual summer camps or indeed for parades and there is a fairly substantial turnover in personnel in the FCA, people will join for a few years and I suppose people who are less dedicated to the whole idea drop out after a few years and would then be replaced by others.

745. Deputy McGahon.—So, they do not receive any weekly payment? It is just for parade duty and summer camp?

Dr. Somers.—Yes, if they turn up for a specific number of training sessions during the year, and attend annual training, which is just a week now, they will get paid for that week at the rates appropriate to their tank in the FCA, and also get a gratuity.

746. Deputy McGahon.—Do you see a continuing role for the FCA?

Dr. Somers.—I certainly do.

Deputy McGahon.—On subhead N. — Animals Forage etc. — is that show jumping? It is hardly pack mules anyway?

Dr. Somers.—No, the pack mules have long since gone. It is largely the Equitation School. The excess was due to some unforeseen horse purchase requirements during the course of the year.

747. Deputy Naughten.—That was one of the questions I was going to ask. How many horses did we purchase during the year? How many horses have we on hand in the Equitation School? On subhead O.2. — Aircraft — I note that there was a delay in the delivery, but how many aircraft do we have at present?

Dr. Somers.—Just to take the first question, during 1984 we purchased an extra six horses in that year at a cost of £107,000. As regards the total number of horses, in 1985 we had 63. You asked about the aircraft. We have a number of different types of aircraft. On the fixed wing aircraft, we have nine Marchetti aircraft, which are used for basic pilot training. These are two-seater piston-engined, propellor-driven machines, which were bought in 1977. We have eight Cessna aircraft. These are described as Army co-operation aircraft, with some offensive air to ground capability and with training capability. They are a military version of a four-seater propellor driven light plane. We have six Fouga Magister jet trainers which are held for pilot jet training. We have three Beech Super King Air turboproper aircraft and there is one HS125 jet aircraft, usually described as the Government jet. These are fixed wing aircraft. We then have the helicopters. There are eight Alouette helicopters. We have two Gazelle helicopters and as you know, we are in the process of acquiring five Dauphin helicopters — four have arrived and the fifth is due within the next few days.

748. Deputy Naughten.—These are the ones you can use at night?

Dr. Somers.—The latest ones, yes. The Dauphin helicopters.

749. Deputy Lyons.—On subhead D. — Reserve Defence Force: Pay, etc. — is it not true to say that the reduction of the gratuity and the reduction of the number of weeks from two to one was the biggest factor in the savings under this head? Surely the Accounting Officer must be aware of the feeling of resentment that ran right through the FCA when this occurred? The Accounting Officer has said that members were not availing of the summer camps. Certainly they were not availing of the summer camps when it was reduced from two weeks to one week. Is it intended to have any change in that regard, or is it a policy matter? If so, then the question has to be raised somewhere else. Would the Accounting Officer confirm for me something which I know; the feeling of resentment which ran right through the FCA when their summer training was reduced from two weeks to one week and that that would be one of the principal reasons why we have this saving of £467,000? It is probably policy, but we must acknowledge the the commitment of the voluntary force, the FCA and this affords me the opportunity to say that that decision was a bad one.

750. Deputy McGahon.—What was the overall Defence budget in 1984 and how much of it was spent in the Border area?

Chairman.—He could give you a note on it.

Dr. Somers.—The net total figure is £222 million for 1984. On what proportion would be appropriate to the Border, it depends what you end up counting in.

751. Deputy McGahon.—What do you count in? How do you cost it?

Dr. Somers.—We do not do the thing on a county basis. You would do a very crude thing by saying how many troops have you got in the Border region and how many have you got elsewhere?

Deputy McGahon.—How many have you?

Dr. Somers.—It obviously varies from time to time. It would be of the order, specifically around the Border, of 1,500 to 2,000 troops, but again it depends on the operational commitments they would have at any particular time.

752. Deputy McGahon.—From time to time we read figures of how much Border security is costing this country, certainly it is costing us unbelievable money. How is that accounted for? Is that in a Garda context or in the Army context? How are figures compiled?

Dr. Somers.—To put the thing again in some sort of perspective, since the troubles arose on the Border area in the late 1960s the size of the Defence Forces have had to be virtually doubled. Most of that would be attributable to the problems in the North, and of course they have had to get new equipment and new vehicles and new premises.

Deputy McGahon.—24-hour duty?

Dr. Somers.—Yes.

Deputy McGahon.—Are they paid overtime?

Dr. Somers.—No. They do get allowances. People who are on Border duty or on security duty get particular allowances related to the functions that they have to perform, but they do not get overtime.

Deputy McGahon.—If a group of soldiers were on Border duty at night-time and were accompanied by gardaí, the gardaí would get paid but the soldiers do not, is that so?

Dr. Somers.—The gardaí, as I understand it, would get paid overtime. The soldiers get their Border allowance but they do not get paid overtime.

Deputy McGahon.—It would be a nominal sum?

Dr. Somers.—I can give you the details of it. For people on Border duty the current rates for officers are £3.04 per day and for other ranks £2.64 per day.

Deputy McGahon.—This is derisory?

Dr. Somers.—That is what they get paid.

Deputy McGahon.—There is no facility for overtime for soldiers serving on the Border?

Dr. Somers.—No. There is no facility anywhere in the Defence Forces for the payment of overtime. I think the military authorities would be completely opposed to the payment of overtime, because they feel it changes the whole nature and purpose of a defence force if you start paying people overtime for the type of work they are doing.

Deputy McGahon.—I would agree with you. Much of the money that is spent on the Border area goes on Garda overtime, would you agree?

Dr. Somers.—Thankfully, I do not have to answer for that Vote.

VOTE 43 — ARMY PENSIONS.

Dr. Michael J. Somers further examined.

753. Chairman.—Just one question, Dr. Somers. Military service pensions expenditure was £1.6 million. How many would qualify at the moment for military service pensions?

Dr. Somers.—The number who qualify at the moment for military service pensions is 938.

754. Chairman.—And these special allowances which involved an expenditure of approximately £3 million, how many would qualify for special allowances?

Dr. Somers.—At the moment, 2,091.

Chairman.—Any further questions? Thank you, Dr. Somers.

The witness withdrew.

VOTE 39—LABOUR.

Mr. Michael Keegan called and examined.

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

Vote 39.—Labour.

Subhead T.—Grant-in—Aid Fund for Training and Employment of Young Persons—including Youth. Employment Agency and related expenditure (Grant-in-Aid)

The amount provided under this subhead is paid into a Grant-in-Aid Fund which meets expenditure incurred on a number of employment schemes administered by the Department of Labour and other departments and also provides a grant to the Youth Employment Agency. The Youth Employment Agency reallocates a portion of its grant towards the cost of some of the departmental schemes. The account of the Grant-in-Aid Fund is appended to the Appropriation Account. One of the schemes now administered by the Department of Labour, the Grant Scheme for Youth Employment (now known as TEAMWORK) was introduced in May 1977; up to 1983 this scheme was administered by the Department of Education. Under the scheme grants are payable to organisers of projects involving desirable community works which have a high labour content and result in the direct employment of young persons.

Three types of grant are provided for—

(1) grants for labour up to a maximum of £60 per week (£70 since January 1985) in respect of each employee under 25 years and up to a maximum of £90 per week in respect of each supervisor;

(2) grants for materials up to 15 per cent of the total grant paid for labour;

(3) craft grants payable at negotiated rates where it is necessary to employ persons with specialised skills.

The scheme provides that, prior to the commencement of each project, officers of the Department examine the proposals and agree with the organisers on the duration of the project and on the number of employees and supervisors to be recruited, following which departmental sanction for the project is given and a total grant approved. During the course of the project payments on account of the approved grant are made. The scheme also provides that weekly returns must be submitted by the organisers showing the number of employees recruited and the gross wages paid to each of them.

Inspections by local officers of the National Manpower Service during the course of a project may also be carried out and, on completion of the project, grants must be accounted for by submission of an audited statement of expenditure.

Expenditure on the scheme in 1984 amounted to £6,041,516 in respect of 370 projects involving 4,300 employees and comprised £5,541,516 met directly from the Grant-in-Aid Fund and £500,000 by the Youth Employment Agency.

In the course of a limited test examination by my officers of projects grant-aided under the scheme it was noted that weekly returns for some projects disclosed that the grants paid for labour exceeded gross wages. In some cases the number of workers for which grants were paid was greater than the number employed and in other cases the maximum weekly labour grant of £60 per worker was paid to the organisers even though the wages paid to individual workers were less than this. In one instance the grant paid for labour was £28,080, but the maximum total grant payable on the basis of the number of workers employed according to the weekly returns appeared to be £22,140. It appears that no action was being taken by the Department to establish in the case of all projects the correct level of grants, to adjust the grant instalments on the basis of the weekly returns or seek refunds of any amounts overpaid. Furthermore, organisers did not in many cases furnish the required audited statements following the completion of projects and in some cases where statements were furnished they were not reconciled with the total payments made during the course of the project.

I have sought the observations of the Accounting Officer and I have asked what action was proposed to ensure that grants are paid in accordance with the terms of the scheme. I also asked whether a refund had been sought in the case to which I drew attention and whether steps had been taken to establish if overpayments had occurred on any other projects.

Mr. McDonnell.—Paragraph 49 is a fairly long paragraph. It deals with the grant scheme for youth employment, now known as Teamwork. You will see that the first part of it explains how the scheme was intended to operate, that essentially it provided for grants for wages and materials for youth employment projects. The last half of the paragraph outlines the results of our examination of some cases. We were concerned, as you will see, that it seemed to be possible that grants for wages could exceed the amount paid to the workers by the project organisers. We came across some cases of this happening. I should explain that the grants are paid in advance of the project getting underway.

The Accounting Officer explained to me, since the date of my report, that although the grants for labour should not normally exceed the gross wages throughout the duration of the project this could sometimes occur. For instance, you could have a situation where a project ended prematurely or for some other reason perhaps, such as the full amount of worker-weeks on which the grant was based, not actually having been worked. He said that reasonable variations in the number of workers employed were accepted provided that in any case the total number of worker weeks on which the grant was paid was not exceeded. This degree of flexibility allowed the scheme promoters, many of whom were local voluntary groups, to recruit labour. He also told me that the grant of £60 per worker sometimes exceeded the actual wages paid. This could happen in the case of the voluntary organisations I mentioned who would not have much resources and it was the practice to sometime allow the employer to pay the PRSI out of the grant.

He also explained to me that some steps had been taken to improve procedures and to ensure that grants were paid in accordance with the approved terms and conditions. This would include a general review of the recordkeeping and the monitoring procedures which would be carried out in conjunction with the organisation unit of his Department, and also of course involving the Youth Employment Agency. It has finally transpired that in the case I mentioned in the paragraph — you will realise that the case we mentioned arises out of a very limited test examination — there has been an overpayment of about £3,000 and a refund had been obtained. He also told me that they had discovered since that overpayments had occurred in 11 cases and refunds were being sought.

There was a further point about the furnishing of audited statements after a project had been completed. It was the practice of the Department to look for these, the Accounting Officer said, but because of general work pressures there had perhaps been occasions when the organisers were not pressed for them. But they were being sought in all cases and they were being reconciled with the returns from the promoters. The Accounting Officer did not expect that they would disclose any further significant overpayments. That is the situation as it stands at present.

756. Deputy Naughten.—First, I have no doubt about the tremendous work that has been carried out under this scheme. It was an excellent scheme, with an expenditure or over £6 million and 4,300 employees, all of whom got an opportunity to get a particular type of training. But it concerns me that the cases referred to by the Comptroller and Auditor General were allowed to arise. It would appear that there was a certain lack of good management, to put it mildly, with regard to the payment of grants in certain cases, again in a situation where grants for labour exceeded the amount of wages paid. I would not see anything wrong in the case of the PRSI being recouped, and I do not think the Comptroller is referring to that either. But if it was a situation where grants were being paid and the amount of wages were lower, allowing for the PRSI element, I would not see that as acceptable.

Mr. Keegan.—I am sure the Committee are tired hearing that this and other schemes of this nature operated by the Department have been operated on a shoestring budget — it is even an exaggeration to say a shoestring because while we were building up the numbers on all these schemes from a very low figure around 1980 to the present figure of about 30,000, not only did we get no extra staff but we suffered a diminution in staff under the process of attrition called the embargo. Our staff has been going down. The numbers on the various schemes have increased enormously. Secondly, it is a type of work to which the Department of Labour was not traditionally geared. Of course it is the duty of Departments and Accounting Officers, as soon as Governments decide on something like this, to gear their Departments as best as they can. But it is particularly difficult in the context of an embargo situation.

In regard to the questions raised by Deputy Naughten and by the Comptroller and Auditor General it is true that flexibility was shown in regard to the payments under this Teamwork scheme. A scheme was approved involving so many workers for so many weeks. Because they were voluntary groups and because they could not always rely on workers to turn up it was traditional to allow a flexibility in the number of workers. People might not turn up for particular weeks and there would be a lower number but the scheme would extend. So long as the total number of worker-weeks was not exceeded it was the practice to allow the voluntary organisers that flexibility and that scope and that was done. It was part of the scheme that we should get an audited statement when the work project came to an end. It was a tradition then to reconcile the figures for the money paid in wages grants, the money paid for materials and the supervisory grant with the audited statement and to make an adjustment at that stage. The experience has been that at the audited statement stage, in the great majority of cases, money is owed to the sponsors. It can happen, because the wages payments were not strictly reconciled each time we got a return from the promoters. It did happen this time. It was a fault in the system and I accept what Deputy Naughten has said. Because they were not reconciled each time and the advance payments — there were usually three payments, one at the beginning, one after a few months and one after another few months — some money was held back until the final auditors’ statement was received. It was a fault in the system — caused by the fact that people were under great pressure of work — that in every case the advances were not adjusted by reference to the number of workers on the scheme when each of the periodic reports came in. That led in this case — it was a case in County Galway — to an overpayment. However, the amount of the overpayment was recovered at the audit stage. But it was a flaw in the system and when I became Accounting Officer in the middle of 1985 — indeed, I must say that the Comptroller and Auditor General’s query helped to concentrate my mind on this — I reviewed the procedure and nowadays the periodic payments made under the scheme are always adjusted by reference to the numbers actually on the scheme and drawing wages. I accept that there was a fault in the running of the scheme at that time. I am saying that with the benefit of hindsight. In fairness, it was attributable, I think, to the fact that the staff were under great pressure.

757. Deputy Naughten.—The 11 cases of irregularities of one description or another referred to by the Comptroller and Auditor General, are they out of the 370 programmes that went on in that year?

Mr. Keegan.—I have got up-to-date figures this week on this subject. They are by reference to the number of audited statements we actually received. There were 414 audited statements. I think in my reply to the auditor I mentioned that there were 11 cases and at that time we had recovered the money in seven cases and there were four cases outstanding. I can give the Deputy the position in the four cases if he wishes.

758. Deputy Naughten.—I do not want to get into details of any particular scheme, but you mentioned that one of the 11 cases was in Galway. How many were attached to the Galway region?

Mr. Keegan.—I have not got the location of them. I have to admit that that was at a time — unfortunately when we were replying to the Comptroller and Auditor General’s query we did not set aside and earmark those files. They were the files that our study at that time revealed. We took the particulars off them and unfortunately they were filed away. Seven of them had been completed and action proceeded on the other four. I have succeeded in identifying the four but not the seven that were satisfactorily completed at that time. So I cannot say in which county they were.

759. Deputy Naughten.—Was it a deliberate attempt to get money under false pretence or was it just downright carelessness?

for wages and materials for youth employment projects. The last half of the paragraph outlines the results of our examination of some cases. We were concerned, as you will see, that it seemed to be possible that grants for wages could exceed the amount paid to the workers by the project organisers. We came across some cases of this happening. I should explain that the grants are paid in advance of the project getting underway.

758. Deputy Naughten.—I do not want to get into details of any particular scheme, but you mentioned that one of the 11 cases was in Galway. How many were attached to the Galway region?

759. Deputy Naughten.—Was it a deliberate attempt to get money under false pretence or was it just downright carelessness?

Mr. Keegan.—I would not say it was a deliberate attempt at all. In fact, I think on that particular case the amounts spent by the promoters were far in excess of what they got from us under Teamwork. With voluntary groups there are delays. They do not operate in the same way as efficient businesses that are dealing with accountancy matters every day. It is difficult to get audited statements and their record keeping is not as perfect as it would be in an ideal business environment. I certainly could not say that there way any attempt at fraud.

760. Deputy Naughten.—What rather surprises me is the low number — 11 out of 370 cases. While, of course, one would be too high, I wonder if in the situation of an investigation going on is there not a genuine effort by all concerned or by all who had been concerned or involved in any way in that particular project to ensure that any irregularities did not show up?

Mr. Keegan.—I think that is fair. It is a small number of cases but, following my reply to the audit query, I mentioned earlier that I had tightened up all the procedures and at that time also I had all files examined to see where refunds were due to ensure that these cases were pursued. In that year in all the study that I have had carried out has revealed that we have received 21 refunds amounting to £17,000, that is, refunds in 21 projects, and we are still pursing refunds totalling £17,000 is 13 projects. So it is not quite as good—

761. Deputy Naughten.—So, in fact, it is 34 cases and not 11?

Mr. Keegan.—This is for the whole of 1984.

Deputy Naughten.—Yes.

Mr. Keegan.—This was a particular study done over a period in connection with the audit query. I had every file examined for 1984 and there 21 plus 13, that is 34 cases. Twenty-one have been satisfactorily completed and we are pursuing the other 13.

Deputy Naughten.—There were 34 irregularities?

Mr. Keegan.—Refunds due, not irregularities in the pejorative sense.

762. Chairman.—What about 1983 and 1985?

Mr. Keegan.—I also have had this examination carried out in relation to all files in 1983 and 1985. In 1983 we found that refunds were due in 17 cases and refunds had been received in 14 and we are pursuing three. In 1985 refunds were due in 18 cases, ten have been satisfactorily completed and refunds in eight cases are outstanding and we are pursuing those cases.

763. Deputy McGahon.—I would accept the Accounting Officer’s explanation. Obviously, in dealing with voluntary bodies who would have less expertise than professional people teething problems did arise and I am aware of them myself in my own area. In recent years the Department that has earned its keep is the Department of Labour and I would congratulate them very briefly on this scheme and many of their other social employment schemes which have certainly alleviated the unemployment situation in the country and particularly given hope to many people in the no-hope area. I hope that we will have a continuation of these schemes in the years to come.

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

Subhead V.—Enterprise Allowance Scheme

The Enterprise Allowance Scheme was introduced in December 1983 with the object of encouraging unemployed persons receiving unemployment benefit or assistance to establish a business and to provide them with a weekly income during its first year of operation. Those eligible to participate in the scheme are persons who immediately preceding entry to the scheme were

(a) in receipt of unemployment benefit or assistance for at least thirteen consecutive weeks; or

(b) attending a training course prior to or following a period of unemployment, the two periods together making up at least thirteen consecutive weeks; or

(c) in receipt of disability benefit prior to or following a period of unemployment, the two periods together making up at least thirteen consecutive weeks; or

(d) in receipt of Disabled Persons Rehabilitation Allowance while attending a training course approved by the National Rehabilitation Board for thirteen consecutive weeks.

Weekly allowances at the rate of £50 for married persons and £30 for single persons are payable to participants for up to a maximum of 52 weeks. Under the conditions of the scheme participants may be paid a lump sum in lieu of weekly payments or a combination of lump sum and weekly payments up to a limit of £2,600 for married persons and £1,560 for single person. Persons who are entitled to pay-related benefit under the Social Welfare Acts may also receive by way of lump sum any balance of pay-related benefit to which they would have been entitled for the period of participation in the scheme.

The scheme provides that applications to participate be made through the local offices of the National Manpower Service (NMS) whose function is to evaluate the business which each applicant proposes to set up and to forward details of applicants recommended for participation in the scheme to the Department for final approval and payment of allowances.

The scheme also provides that the local officers of the NMS carry out inspections of the undertakings during the course of the year for which they are being grant-aided.

Total payments under the scheme in 1984 amounted to £5,862,389 of which £4,856,349 was met from subhead V, in respect of participants over 25 years of age, £391,040 was met from the Grant-in-Aid Fund for Training and Employment of Young Persons in respect of participants under 25 and £615,000 was paid by the Youth Employment Agency also in respect of participants under 25.

Payment of weekly allowances is made by means of an automated system. A test examination of this system carried out by my officers revealed that the departmental procedures for making payments did not include adequate controls to prevent fictitious records being set up, to prevent errors and irregularities or to detect any that might occur. It appeared that such errors had occurred; for instance a participant approved for an initial lump sum payment of £500 and for weekly payments of £50 thereafter was in fact paid £500 each week for 7 consecutive weeks from 4 March 1985 before the error was detected. The automated system had also been used for the payment of lump sums throughout 1984 and up to and including the week ending 4 March 1985 but it was then decided that, insofar as the control weaknesses applied to the payment of lump sums, they should be eliminated by transferring this work to the Department’s main computerised accounting system.

I sought the observations of the Accounting Officer on the inadequacy of control in the operation of this scheme and I asked why corrective action was delayed until March 1985 and why, when taken, it was limited to control over the payment of lump sums. I asked what measures are now proposed to prevent errors or irregularities in the payment of weekly allowances and to detect any that might occur. I also asked whether in the light of the overpayments which had occurred any action was taken to establish whether there had been any others.

As it was further noted in the course of audit at one of the Dublin offices of the NMS that there was no documentary evidence that the inspections provided for under the scheme were carried out in order to establish whether participants were complying with the prescribed conditions, I sought information also as to the extent of departmental inspections carried out in the Dublin region during 1984.

Mr. McDonnell.—This paragraph deals with another of the Department’s schemes, the Enterprise Allowance Scheme. Again, I was concerned with some of the weaknesses in control over payments under this scheme, with the possibility, of course, that errors or irregularities could occur and also, importantly, that, if they occurred, they might have been undetected. As stated in the paragraph, you will see that from our limited examination a case did come to light of a participant who was overpaid. It works out at roughly £450 a week for six weeks. He got £500 for seven weeks instead of £500 for the first week and £50 thereafter. Again, as in the last paragraph, I start by describing how the scheme operates and the rates of grants and so on. I then outline the type of error which occurred and the inquiries I made. The Accounting Officer explained here that there had been a rapid growth in the scheme — the number of participants grew from 115 in January 1984 to 4,774 in December 1984 and to 5,738 in June 1985. In the initial stages, when the numbers were small, it had been possible to handle the weekly payments under the scheme within the existing capacity in the Department’s accounts division. But, of course, as the numbers developed, it became necessary to adopt alternative measures for producing the weekly payments and in July 1984 they were being handled on a word procesor. This had its deficiencies in the sense that it was intended to be used simply as a support for a manual system and it was not a fully computerised one. At its best, it was merely a sophisticated pay order production system and it was incapable of what a computerised system would be capable of — applying automatic controls. As in the previous case, there was also the problem of staff shortages, the Accounting Officer said, and every effort had been made to redeploy staff but some important tasks, such as strengthening the control of the system and following up overpayments could not be overtaken. That could not be done with the staff available. I had been concerned at the possibility of fictitious records being set up but I would have to say that there was no evidence of this actually happening. It was a possibility, as we saw it.

The Accounting Officer, as in the other scheme, accepted that there were some deficiencies in control procedures which had allowed the type of thing that I mentioned to happen. He explained that steps had been taken to eliminate these. They included the introduction of new procedures and the allocation of staff. He assured me that the system would be reviewed at regular intervals and that priority was being given to the introduction of a fully computerised programme. A unit had been set up to identify and deal with overpayments. A number had been discovered and they were being pursued. There is a point at the end of the paragraph about the necessity to carry out inspections of the projects as they go on. In the Dublin area, which was referred to, inspections had been carried out but no record had been kept of them having been done but they were in fact done.

765. Deputy McGahon.—This particular scheme was the best in recent years. There was a problem in the capitalisation area. It was abused which was a pity for the needy people and the genuine people who wanted the capitalisation to buy very necessary equipment. I understand that it was quite seriously abused and that some people who got capitalisation went off on continental holidays. Some went to America and some went to the races, resulting in a rather serious loss. Could you confirm or deny that? Has that capitalisation scheme been shelved?

Mr. Keegan.—I cannot confirm or deny that people went off to America or to the races or whatever with the capitalisation. I agree with Deputy McGahon that while that aspect of the scheme was very sensible in theory, it did not work out too well in practice. We found it extremely difficult to monitor. As a result in our constant reviews of the scheme we are now cutting down capitalisation to a minimum. Personally, I would like to see no capitalisation as we have had such difficulty with it. We are extremely short of staff. With all these schemes — we have 32,000 people on them — it is very difficult for our manpower people in the field to monitor them. The Comptroller and Auditor General is quite correct in saying there was a weakness. While they were being monitored by the local field staff every so often, no record was being kept of that at the time of the audit query. That should not have been so. They are now monitored on a systematic basis in so far as manpower allows. A proper record is kept of all inspections by the manpower service. If a person gets a capital sum to buy equipment, we get the receipt for that equipment. If a person, who is on the scheme, having got a capital grant of a couple of thousand pounds, ceases to function. What do we do then? We are in a difficulty. Under the scheme, in theory he should pay back the capital sum. We are pursuing people for this. There is a practical difficulty. In this respect, it must be remembered that this is a job creation scheme; it is an enterprise scheme. It is a scheme to encourage enterprise by individuals, small scale enterprise which everybody tells us is going to be the coming source of jobs. In such a case, the person sets up his own little business and then he fails. What do we do about the capital sum advanced? If he fails and he is getting paid weekly, then we should stop the payments. If he fails having got a couple of thousand pounds capital, what do we do? We are then in a situation like other State agencies which are encouraging employment and encouraging the setting up of industries, big and small, where there is a business failure. In this country, there is a particular attitude towards business failures. It is frowned upon and is not regarded as quite proper, whereas in the United States, it is regarded as so common place, that they almost measure their success by their rate of business failure. At least it shows that enterprise is alive and kicking. Many people start and fail and start and fail. This is a matter of historical fact.

I agree with the Deputy that the enterprise scheme is a very good scheme in principle. Over the last three years it has created an average of something like 5,000 jobs a year. We cannot say how permanent they are. It is only now, that sufficient time has elapsed to do a proper survey on the scheme. A survey was done a year-and-a-half ago, but it was too early to see how many were surviving and to study other aspects of the scheme, like displacement; whether they were displacing other enterprises or whether the people who set up the schemes would have set up in business anyway. These are all imponderables. Perhaps they take from the overall economy of the scheme because in theory the scheme does not cost the Exchequer any money. It sets up so many businesses instead of people drawing social welfare payments.

766. Deputy McGahon.—The only way it can cost the Exchequer money is that if some person, who is not genuine gets a capitalisation grant and blows it. His wife and children then have to come to the State; may be to the home assistance officer of the health board and get sustenance to keep them. It can cost the State money. That has been abused. The concept of the capitalisation grant is a very good one. It can enable people to buy equipment to get into business. I would ask you to look at this. I accept that you have to exercise more stringent controls but I do feel in many cases it is absolutely necessary. The other point I would like to make to you is that the enterprise allowance scheme allows a person to work and at the same time receive some State aid. It was an innovation and very opportune. It is rather restrictive in that it allows a person to get help for one year and then he is suddenly cut off. There should be staged payments for a period of three years. No man can establish a business in one year. It is restrictive in that area.

Mr. Keegan.—I think that is a fair point. I would certainly have that aspect looked at. We are in a desperate way for staff, even the representative of the Department of Finance, when I was here 11 months ago, admitted that we were under-staffed and that is saying something. On the Deputy’s point about the capital sums, I would say that we have tightened the controls on the capital sums. We have reduced the numbers considerably. We have not abolished them, although maybe as Accounting Officer, I would prefer if they were abolished. That is only to make life easy for myself which is not my objective. We have done a much closer evaluation of the people who ask for capital sums before we give them capital sums. We establish, in so far as can in advance, that they are reliable people and that they will make good use of the money.

767. Deputy McGahon.—Finally, the Manpower people play a major role in this particular scheme and a very good one. Whose decision has it been to give capitalisation grants? Was it the local Manpower officer or was it the Department?

Mr. Keegan.—The decision was made by the Department on the recommendation of the local Manpower placement officer. We are changing that from 1 January. We are delegating most of the authority for the scheme to the local Manpower offices throughout the country with what we hope are sufficient controls over the whole thing. They will be effectively running the scheme entirely.

Deputy McGahon.—You are decentralising?

Mr.Keegan.—We are.

Deputy McGahon.—I think that is very welcome.

768. Deputy Naughten.—First of all, the Accounting Officer mentioned the figure of 32,000. Is that correct?

Mr. Keegan.—On all our schemes within the Department itself, not agencies such as AnCO.

769. Deputy Naughten.—Could you give us a breakdown of what is under the different headings and the different schemes?

Mr. Keegan.—I have a breakdown here in our annual report, which was published earlier this year, of the Department’s schemes. There are various measures of the number of schemes because some of them last for a year, some of them last six months. In order to get over that we use what we call throughput — that is, the number of people who finish a scheme in a particular year. In 1985 under the Enterprise Allowance Scheme — that is the one we are talking about — there were 5,254; under the Social Employment Scheme there were 5,500. That has gone up greatly this year. Under the Work Experience Programme there were 9,013; under the Teamwork Scheme that the committee referred to earlier there were 2,975; and under the Employment Incentive Scheme 7,500.

770. Deputy Naughton.—Certainly, that is quite large numbers by any standards. The Comptroller and Auditor General in his report has referred to one case where £3,500 was paid out instead of £500. How many of those irregularities have shown up under this scheme?

Mr. Keegan.—As in the other case, following the auditor’s query I have had every file examined. It meant examining over 9,000 files for this period. The number of similar cases that have come to light is five, where a capital sum was repeated. Instead of getting the ordinary weekly allowance in the succeeding weeks he had got a capital sum. In the case referred to by the Comptroller and Auditor General that was £500 and he was supposed to have got £50 a week thereafter. A mistake was made — I admit that — and the £500 was repeated for seven weeks running. Five other similar cases have come to light. In the case referred to by the auditor we took advice of the Chief State Solicitor. He advised us that this was a matter for the Garda and the Director of Public Prosecutions. A person was brought before the courts by the Director of public Prosecutions. He pleaded guilty and the case was adjourned until the end of February for a decision kmr a court sentence or whatever the court does. In the meantime we have been getting back the money by instalments. There was a net figure of £900 due to us and to date we have got £700 back. We hope to recover the remaining £200.

771. Deputy Naughten.—The net figure was for how many cases?

Mr. Keegan.—No, Sir. This is the figure in the specific case referred to. There was an overpayment of seven multiplied by 500 but the man remained on the scheme on a weekly basis. He owed us a net £900 at the end of his period on the scheme. We left him on the scheme. He refunded £600 and another £100 in November. We are hopeful that we will get the other £200.

772. Deputy Naughten.—What about the other five cases? Did they also go to the Director of Public Prosecutions?

Mr. Keegan.—No. We are pursuing those cases at present. I had to have 9,300 files investigated. That took quite a lot of time because I had to scrape staff off other divisions of the Department to do it. We are only now at the stage of proceeding with those five cases.

773. Deputy Naughten.—With regard to the capital sums, my colleague, Deputy McGahon, was of the opinion that some went to the United States and others went to the races or holidays. Have you come across any blatant cases where there was abuse with regard to capital moneys and, if so, have you come across many of them?

Mr. Keegan.—I will say this much. Our review of the 9,300 files did reveal overpayments but I am not aware of any abuse of the type mentioned by Deputy McGahon. In all 9,300 cases we did not come across a case in which we could definitely say that fraud existed.

774. Deputy Naughten.—In your opinion of the number of jobs created — I know you referred to this earlier on and that you said it was difficult to give an answer to it — have you any idea how many of the people assisted under the Enterprise Allowance Scheme are still operating on their own at this point in time?

Mr. Keegan.—I would only be guessing at that. As I told Deputy McGahon, I am going to have this reviewed early in the new year, possibly by an independent body, to try to come to grips with this problem. I just do not know at the moment. There was a preliminary study done about 18 months ago, but it was too early at that stage because the scheme only started on a trial basis in December 1983 and then the Government decided it would operate on an unlimited basis in February 1984. It was about a year later that this preliminary survey was carried out. We will have a proper survey done early in the spring. I do not want to guess at that because, for instance, in Britain there have been two recent reports on this very subject in relation to a somewhat similar scheme operated by the Department of Employment there. One of them showed a quite favourable result; the other showed a less favourable result. They were done by two different organisations. The Department of Employment, I think, is quite pleased with the result. There have been drop-offs. They expected drop offs. It is inevitable in this type of scheme. But between 50 per cent and 60 per cent of the participants were continuing after two years in the scheme.

775. Deputy Naughten.—I look forward to the survey which the Accounting Officer has referred to and to see the detailed outcome of it. From my own experience I have found it an excellent scheme. From my experience the vast majority of the participants are operating their own business today. It is a very worth-while scheme and I agree totally with the sentiments expressed earlier on. It is much better to try and fail than not to try at all. God knows, we have too little of that in this country.

Mr. McDonnell.—Could I just make a comment before we move on? I am concerned that the impression might be given that we were pushing the Department into a lot of work in order to find five cases of the type mentioned. As I understand it, the Accounting Officer said that there were five cases of that type. Our mentioning of that case arose from a test examination. I understand that there were other types of cases being looked at by the Department involving other possible overpayments other than precisely that type. Perhaps the Accounting Officer may like to comment on that.

Mr. Keegan.—That is so. The five cases I mentioned were of the same type as the specific cases raised by the auditor. I said that in response to the question I was asked. We did go through the 9,000-odd files and we had them all examined. We did find that there were overpayments due to defective systems which were in operation at the beginning when the scheme expanded from a couple of hundred to nearly 5,000 within a year with no staff to run it and people had to be paid every week. The system was inadequate and almost broke down. I can give the committee, Chairman, a summary of what the study of all files revealed. It revealed that there were, what we call, runovers. This was due to the inadequacy of the first machine that was used and the insufficient use of the programmes on the word processor to which the accounting arrangements were passed so that there was no adequate arrangement for stopping people after 12 months. These runovers amounted to 236 cases. This covers files over a number of years from December 1983. There were 236 cases of runovers with payment going on to the 53rd week or maybe even longer. Most of them only went on for one week or two weeks. Of the 236 cases we have pursued them and have recovered the amounts due to us in 44 cases. We are now pursuing 192 cases. The total sum of money involved in the 236 cases where runovers happened was £84,000. We have recovered £6,000 and we are pursuing a sum outstanding in respect of the 192 cases of £78,000. That, I admit, was due to a faulty system, inadequate staffing and no satisfactory arrangement to stop payments after the 52 weeks.

776. Chairman.—Are there other categories?

Mr. Keegan.—Sorry, I was just going to give you the other categories now. I regard these runover cases as cases that should not have occurred. I am saying this with the benefit of hindsight to a degree and under less pressure perhaps than when this section was set up but the system of control was inadequate and these cases occurred and we are pursuing them. There are two other categories. There are drop-outs on weekly payments and drop-outs where capital sums were paid. The drop-outs in weekly payment cases where a participant ceased to continue in the operation for which he was approved and we did not become aware of it and payments continued until we did become aware of it. There are going to be drop-outs and they are inevitable. If we had far more staff at headquarters and at local level we would be able to eliminate those. I do not think we will ever be in that situation unless you inspect them every week and we cannot do that.

777. Chairman.—Could you just give the categories, numbers and amounts involved.

Mr. Keegan.—Of the weekly drop-out cases we have found a possible 231 cases.

778. Chairman.—How much money?

Mr. Keegan.—£36,000. Then there were parallel payments with social welfare numbering 55 — and totalling £31,000 which we are pursuing. Then there is the biggest category which is in the nature of business failures, capitalisation where the person ceased to function, 215 cases and £174,000. There was also a miscellaneous category — incorrect payments, inadvertance payments and people who were paid but never entered on the scheme as they were supposed to do. There were 26 of those — £18,000.

779. Deputy Naughten.—It is rather a pity that the Accounting Officer did not give us these figures at the beginning. Obviously, there has to be a reason for the decision to virtually drop the capitalisation scheme. Again, I believe the concept of it is very good and very necessary for this type of enterprise. your own experiences suggest the reason. You suffered a loss of £124,000. I would hope that by your decision — and a wise one it is — to delegate authority to the local Manpower people many of these problems will be resolved but I would again stress the need to have at least capitalisation on at least part of it built into the scheme. I think it is absolutely necessary if people are to continue and to operate it on a genuine basis.

Mr. Keegan.—I hope the Deputy is not suggesting that I was trying to mislead him because I answered the question I was asked. They are losses but the people got the money and they have ceased business. If people get money from the IDA and cease business, it is a loss in that sense that they ceased the business but it is in a different category from which I admitted the first category of overruns for which the Department was responsible and the inadequate control systems were responsible. That £174,000, Deputy — I think you said £124,000 in the capitalisation drop-outs — we have spent £29 million on this scheme now since it started so it is not very big in that context.

780. Deputy Naughten.—The numbers of irregularities are quite high. But if one examines this in the context of job creation and the cost of an industrial job the amounts of money are still relatively small. Whether it be five cases or 105 cases, the Comptroller and Auditor General was correct to draw the committee’s attention to it because if it is five this year and not corrected it could be 50 next year.

781. Chairman.—We now go to page 130 — any questions? Could I just make one point? On subhead A.2—Public Service Pensions — the expenditure is £107,000. You have an overrun of £83,000; you were only granted £24,000. How many were involved in the £107,000?

Mr. Keegan.—There were three unexpected retirements which necessitated additional gratuities of £73,000. This is the Labour Court. There was also one payment of £4,5000 — a refund of contributions under the Labour Court Spouses and Children’s Pension Scheme. These relate to the special pension scheme for the Labour Court.

782. Chairman.—On subhead R — Trade Union Amalgamation—there was an overrun of £6,000 there, making a total expenditure of £16,453.

Mr. Keegan.—Sorry, I have it here.

Chairman.—It is O.K. Any further questions?

783. Deputy McGahon.—On subhead U.1 — Grants for the Provision of Recreational Facilities — there is an underexpenditure. Surely, with the need in every county in Ireland for recreational facilities for youth, the full grant should be expended?

Mr. Keegan.—That would seem so, but we are dependent on voluntary groups. We cannot guarantee that they will reach the expected level of construction.

784. Deputy McGahon.—Are you saying there has been an under demand from voluntary groups?

Mr. Keegan.—I am saying that the demand did not come up to what we had expected.

Deputy McGahon.—In that particular year, how is it now? Surely that type of money should always be utilised?

Mr. Keegan.—In a perfect world it should. In a perfect world, with inadequate facilities of this nature, even more so, But when you dealing with voluntary groups you anticipate a certain level of expenditure and something goes wrong and does not come up to that and we have no control over it.

785. Deputy McGahon.—It is food for thought. There is certainly plenty of uses for it in my county. On subhead H — Resettlement Allowances—whom do you resettle? Redundant TDs? I would like to go to Spain.

Mr. Keegan.—Right. We will give you a lump sum.

Chairman.—Have you a premonition?

Mr. Keegan.—This was a scheme to help resettle people in Ireland whose skills were in short supply. It was introduced several years ago. Then I think the scheme ceased, but people could claim within two years. We thought at the time we were framing the estimate that 15 workers would be claiming who had resettled before the scheme was terminated — the scheme has been terminated, of course — and that they would claim roughly £2,000 each. In fact only eight of the workers who had resettled made claims.

786. Chairman.—Can I ask you what type of workers?

Mr. Keegan.—Skilled workers. This was in the halcyon days when there was a scarcity of workers in this country, particularly in certain skill areas. This scheme, the Deputy will recall, was to help them come back here and give them some money towards resettlement and removal expenses. It is no longer in existence. But people who had resettled were allowed up to two years to claim.

787. Deputy Naughten.—Just one question. It is with regard to the provision of recreational facilities. What type of grants are they and how are they paid?

Mr. Keegan.—This was a scheme which we took over from the Department of Education.

Deputy Naughten.—Is it no longer in operation?

Mr. Keegan.—It is no longer in operation in the Department of Labour. It went back a year ago to the Department of Education.

Deputy Naughten.—Is it the capital grants scheme?

Mr. Keegan.—This is subhead V.I. dealing with recreational facilities.

Deputy Naughten.—It is no longer in operation?

Mr. Keegan.—It is in operation in Education. The staff who were on it and the scheme itself went back to Education.

Deputy Naughten.—It is not under your control any longer?

Mr. Keegan.—No.

Chairman.—Thank you Mr. Keegan.

The witness withdrew.

The committee adjourned.