Committee Reports > List of Committees > Dáil > 1994 > Committee of Public Accounts > Annual Report 1994 - Covering the period 18 November 1993 to 13 October 1994, during which it considered the Report of the Comptroller and Auditor General on the 1992 Appropriation Accounts

ANNUAL REPORT

BACKGROUND

1.The Committee of Public Accounts was set up under the Exchequer and Audit Department Act 1866. When the Irish Free State came into existence in 1922 it continued the pre-existing Government accounting conventions and accordingly an Irish Committee of Public Accounts was established similar in its size and its remit to that of the British House of Commons Committee. It has been an important feature of Dáil Éireann since then.

The Committee consists of 12 Members and the Chairperson has traditionally been elected from the main opposition party. A list of Chairpersons is published in the Appendix hereto.

This Report covers the Committee’s investigation into the annual Report of the Comptroller and Auditor General on the 1992 Appropriation Accounts and other matters. The Report of the Comptroller and Auditor General was tabled in accordance with the relevant legislation at the end of October 1993. The Committee commenced its examination in November 1993 and completed them in October 1994.

During the period under review the Committee held twenty nine meetings. Twenty seven Accounting Officers covering forth three Votes were examined and twelve special issues were dealt with.”

PUBLICATION OF COMMITTEE REPORTS ON A CURRENT BASIS

2.Committees of Public Accounts have long been dissatisfied with the fact of their Reports and Minutes of Evidence have been published so late as to render them virtually meaningless; for example, the 1985/86 and the 1987 Reports were only published in 1992 and the 1988, 1989, 1990 and 1991 Reports have not yet been published.

3.At the beginning of its examination of the 1993 Accounts the present Committee introduced a new system for publication of its Reports, Proceedings and Minutes of Evidence on a current basis. Two interim Reports covering its examination of Appropriation Accounts have already been published, complete with relevant Minutes of Evidence and Proceedings of the Committee and the Final Report, on the completion of its examinations, is now with the printer and is due for publication by 30 November 1994. This the Committee sees as a major step forward in ensuring its effectiveness as a watchdog for the control of public spending.

4.The Committee acknowledges the assistance given by the Editors Office and by the Information Technology Unit of the House of the Oireachtas in helping it to reach this situation.

5.The Committee also introduced the practice of setting deadlines with Accounting Officers and with the Department of Finance for their reporting back on matters raised at Committee meetings which required further information or specific action within the Department. These issues are automatically placed on the Committee’s Agenda for the meeting next after the expiry date. This ensures that issues are not lost sight of and that Departments report promptly to the Committee.

BACKLOG OF REPORTS

6.As mentioned in paragraph 2, a build up of a backlog in the publication of Committee Reports existed at the beginning of the period under review. Considerable inroads have now been made in these arrears. The complete 1988 Report is due for publication in early December 1994. The 1989 Report is well advanced and the 1990 and 1991 Minutes of Evidence are all on disc. Much editing work remains to be done on these but it is hoped that the arrears inherited by the Committee will be eliminated before next year’s Report is due leaving only the 1991 material to be cleared during the following year.

SPECIAL ISSUES DEALT WITH BY THE COMMITTEE

7.Arising out of the examination of Accounting Officers on the Appropriation Accounts and the Report of the Comptroller and Auditor General the following matters affecting more than one Department came up for special attention:-

7.1 Off Balance Sheet Accounting

Funding of Health Boards

Payments to Bus Éireann for School Transport Service

Criminal Injuries Claims

The Committee sees its intervention in these there instances as very significant in the regulation of public spending.

Nitrogen Éireann Teoranta (NET)

Funding of Accommodation required under the Decentralisation Scheme.

The Committee is concerned that the National Accounts are being distorted by the above instances which can be represented as Off Balance Sheet Accounting. The Committee will be further examining every Vote to ensure that this practice is rooted out and, in particular, it is seeking a full report from the Department of Social Welfare on the issues which arise in relation to Equality payments and it will consider this matter in great detail when the Department of Social Welfare next appears before it.

7.2 Guidelines for Accounting Officers appearing before the Committee

The Committee, in the light of experience, drew up and issued guidelines for Accounting Officers appearing before it covering, inter alia, the completeness and accuracy of the evidence given by them and action to be taken by them in the event of it coming to their notice that information given by them was incorrect, incomplete, misleading or out of context.

The Committee has made it very clear that it will take a very serious view of any breach of these guidelines by Accounting Officers, which comes to its notice in future.

7.3 Means Testing

The Committee is disturbed at the inefficiency, duplication and, therefore, increased cost, arising from the fact that there are as many as 17 separate tests of means among State Departments and State Agencies. Sometimes within the same Department or Agency there are two or three separate tests of means.

Not alone does this situation give rise to avoidable cost in public administration but it also leads to gross inconvenience for citizens, often at times when they are under social and economic stress. Moreover, the Committee is of the view that because of a variety of definitions as to what constitutes means and because a variety of cut-off points operate as between different schemes, it is often the case that poverty traps become an inbuilt feature. This further adds cost to the State and\or to the individuals concerned.

The Committee has pressed Departments to come together to agree on -

The Committee notes that an inter-departmental committee was established to consider this matter a number of years ago but clear progress has not been made.

The Committee proposed for consideration the following:

At present separate means tests are applied to Unemployment Assistance, Supplementary Welfare Allownance, DPMA, Non-Contributory Survivors’ Pension, Orphans Non-Contributory Pension, Non-Contributory Old Age Pension, Local Authority Rent Assistance, 3rd Level Education Grants, General Medical Service Cards, Family Income Supplement, Civil Legal Aid, Unemployment Assistance, Lone Parent’s Allowance, Deserted Wives Allowance, Back to School Clothing Scheme, Free Fuel Schemes, Domiciliary Care Allowance.

7.4 The cost of Energy in Public Buildings

The Committee has requested that Government Departments and State Agencies assess the properties occupied by them with a view to reducing energy costs generally.

The Committee is anxious that a comprehensive energy conservation plan be drawn up and implemented throughout Public buildings. The Committee has been told that savings of up to £20m could be achieved through effective conservation measures.

Collection of Fines

7.5The Committee has sought and received initial reports on the system of collection of on-the-spot fines for parking offences and fines imposed by the courts. It is very clear that under the present system there is serious loss of revenue to the Exchequer through inefficiencies in the system. The Committee will further pursue this matter with the Departments concerned. The Committee has in particular recommended means of improving the collection system through:

8.SPECIAL REPORTS

During the period under review the Committee also published four Special Reports as follows:

Kilrush Creek Marina.

Administration of National Lottery Grants.

Bovine and Tuberculosis Eradication.

Collection of T.V. Licences.

8.1Kilrush Creek Marina

This Report dealt with serious lack of cost control in the case of the development of a Marina at Kilrush, Co. Clare.

The project, which was under the auspices of the then Department of Tourism, Transport and Communications was developed for Shannon Free Airport Development Company (SFADCo) by a subsidiary body set up for the purpose - Shannon Maritime Development Ltd., (SMDL).

The Committee heard that the original estimate for the development was £7m of which it was expected that £3.2m would be met by private sector investment. The project was to be completed in two phases. Eventually Phase 1 only, or half the planned project, was completed at a cost of £6.8m, all of which was met from public funds and which was almost twice the proposed State investment on the full project. There was no private investment.

The Committee also heard that the subsidiary body (SMDL) had more borrowing powers than its parent company (SFADCo), that the plans for the development were altered without prior approval and that, while the Department of Tourism, Transport and Communications had a representative on the Board of SFADCo that Department was not kept informed of changes in plans or increased costs.

The Committee, in its Report, was critical of the lack of control exercised by SFADCo and the other bodies mentioned, in particular the Department of Tourism, Transport and Communications as well as by the Department of Finance who oversaw the funding of the project and the EU Commission which contributed towards the funding through ERDF grants.

The Report called on the Department of Finance to draw up clear guidelines for civil servants who are nominated as Directors of State Companies in relation to their responsibilities both to their Departments and to the Boards of which they are members.

8.2Administration of National Lottery Funds

This Report highlighted the urgent need for a transparent system for processing applications for Lottery funding at all stages and also the need to monitor the expenditure of funds granted, to ensure that these funds are only used for the purposes for which they are provided and that each application be assessed against other applications on hand and then priorities decided.

In its conclusions the Committee called on the Department of Finance to issue revised guidelines which would incorporate, inter alia, provisions governing the issues mentioned in the foregoing paragraph as well as the information to be supplied in writing at the application stage regarding the status of the beneficiaries and the purpose for which the grant is sought. It also sought that criteria for qualification for funding be drawn up within the issuing Departments and that an independent monitoring group be set up to assess on an ongoing basis whether there is a fair and reasonable geographic and demographic spread in the allocation of Lottery grants.

The Committee was pleased to note that the Department of Finance issued guidelines to all Heads of Departments in October 1994 which incorporated most of its recommendations.

8.3Bovine Tuberculosis Eradication

This Report, which was initiated in the previous Committee of Public Accounts, examined the cost effectiveness of the Department of Agriculture’s disease eradication programme. It noted that it has cost the State about £500m in historic costs and is currently costing the State a net £30m per annum. About 70% of this relates to Bovine TB.

It noted also that while 97% of herds are now disease free, progress in reducing infection in the final 3% of herds over the past 25 years has been minimal.

The Committee considered these findings and recommended that future principles guiding the eradication scheme should be

It suggested tighter controls in the testing and movement of cattle including testing by State as distinct from farmers’ own vets of herds which have a history of disease. It also recommended that a process for tracing back diseased carcases to the herd of origin be devised and implemented.

8.4Collection of TV Licences

The Committee considered the problem of Television Licence evasion, including the system of collection of licence fees and also the manner of transferring moneys collected by An Post as the agent of the Department of Arts, Culture and the Gaeltacht to Radio Telefís Éireann. It highlighted the fact that the licence fee for large hotels and multi-dwelling buildings is the same as that for a private residence. It made recommendations aimed at reducing evasion, including concentration of effort on those households which have not held a television licence in the preceding few years. It also sought an amendment of legislation to provide that it can never be economically beneficial to pay a fine instead of a licence fee.

9.VISITS

The Committee visited and had discussions with the Public Accounts Committee and the National Audit Office in the United Kingdom - 5 Members attended in March 1994 and in Finland - 6 Members attended in September 1994.

The Committee also made the following visits:

- 6 Members visited Kilrush Creek Marina in connection with their examination of expenditure on that development in October 1993. That was the subject of a special report as listed at paragraph 7 above.

- 6 Members visited the NTMA Headquarters, Dublin in October 1993 and heard an explanation of the Agency’s activities.

Conferences

- 3 Members represented the Committee at the Conference of EU Parliamentary Committees on Budgetary Control, in Lisbon, in November 1993 and

- 3 Members attended the Conference of Budget and Finance Committees of EU Parliaments, in Brussels, in February 1994.

10.NEW TERMS OF REFERENCE

The Committee welcomes the amendment of Standing Order No. 130 which gave it New Terms of Reference in conjunction with the enactment of the Comptroller and Auditor General (Amendment) Act, 1993. The main provisions of this Standing Order is to bring non-Commercial State Sponsored Bodies including Health Boards, Tourism organisations, and Vocational Education Committees within the remit of the Committee and also to broaden the scope of its examinations to include value for money and efficiency and effectiveness in the disbursement of public funds.

11.COMPELLABILITY OF WITNESSES

The Committee must again draw attention to the urgent need for the introduction of legislation covering the Compellability of Witnesses. The Committee found itself frustrated in progressing its examinations when three different Accounting Officers, one former Accounting Officer and the Governor of the Central Bank, refused to come before it. Senior public officials refusing a summons of the Committee is a very serious matter. It undermines the authority of the Committee and undermines its vital role in ensuring full accountability.

The Committee reiterates that the promised legislation on Compellability and Privilege of Witnesses is important to underpin and make more effective public accountability and requests that this legislation be brought forward without further delay.

12.THE COMMITTEE’S PLANS FOR THE FUTURE

Besides the matters listed for follow-up in the foregoing paragraphs, a programme of examinations of Accounting Officers on the 1993 Report of the Comptroller and Auditor General has been drawn up. The Committee has also discussed with the Comptroller and Auditor General a number of subjects for value-for-money audit including;

Energy Management in the Health Service, Local Authority Housing Construction and Maintenance Costs, Regional Development Programmes, Garda Fleet Management, Telephone costs in the Civil Service and Procurement Practice in Universities.

13.Under its own new work schedule the Committee planned to finalise its examination of the 1992 Appropriation Accounts and Report of the Comptroller and Auditor General before the publication of his 1993 Report. This deadline was met and the Committee, as planned, commenced its consideration of the 1993 Report on the third Thursday in October - the Report having been received two weeks earlier. It is the determination of the Committee to keep to this schedule in future.

JIM MITCHELL T.D.

Chairman.

November 1994.