Vol. 448 No. 1
14 Mr. McCreevy asked the Minister for Finance the amount of funds received from the EU in late 1994 but credited to 1995; the amounts of any other receipts attributable to 1994 but credited to 1995; and if he will make a statement on the matter. [1581/95]
The public finances operate on a cash-based receipts and payments system rather than on an accruals basis. Accordingly, the practice of accounting officers is to take all revenues to account in the year of receipt in so far as that is practicable, irrespective of the year to which they are attributable.
As regards the first part of the question, the position as far as my Department is aware is that all EU funds received during the calendar year 1994 were credited in 1994, whether to the benefit of departmental accounts, FÁS or the Exchequer, as appropriate.
In relation to the second part, it is inevitable that some specific items will be received too late within a particular year for value to be registered within that year. The only significant example of such carryover from 1994 which has come to notice is an amount of some £15 million in health contributions disbursed by the social insurance fund which I understand is being taken to account as Appropriations-in-Aid to the 1995 Health Vote.
It may be that the Deputy had in mind EU receipts which in the normal course would have been received in 1994 but which were in the event not received and which are now expected in 1995. In that category, I am aware of the following, which fall on the capital side of the budget:
|
£m |
|
|
ERDF and Cohesion Funds (Exchequer Capital Resources) |
109 |
|
FEOGA (Capital Appropriations-in-Aid to Agriculture & Forestry Votes) |
22 |
Is the Minister for Finance telling me that, in the first 15 days of 1995, £109 million in European Regional Development Fund and Cohesion Funds and £22 million from FEOGA has come to hand?
I am saying that the money, to which I have just referred, was expected to come in in 1994 but did not arrive. It is now expected that those sums which were factored into the 1994 figures are expected to be received in 1995.
Has some of that European Union money about which we speak come in within the first ten days of 1995?
I am not aware of that.
I will table a separate question on that matter. However, given the figures the Minister has just read out, the £109 million and £22 million from the European Union, making a total of £131 million — which were included in the figures for 1994 — is it true that those figures show beyond doubt that in 1994 there would have been a larger budget surplus which has now been factored into the 1999 figure? If I may presume to advise the Minister, this type of creative accountancy, practised in some Departments, if I may put it like that, is not in anyone's long term interests. We can have a debate later but there is considerable confusion about departmental Estimates because some European Regional Development Fund moneys include the capital side, above the line, while ESF money is included in net expenditure, whereas in all Departments expenditure should be shown gross, particularly that of agencies. Is it the Minister's intention to go down the route of gross accounting, which would give a better idea about our position after 1999, a matter to which he referred, and on which I absolutely agree with him. It would be much better to reach that stage, again nodding in the direction of the goddess, OTA and there would be more openness, transparency and accountability if that were done. We could then proceed to the matter of accrual accounting which has long been advocated and which has been successful in other jurisdictions.
I do not disagree with the Deputy's expressed views in regard to the benefits of moving to an accrual system of accountancy rather than the current one. As a professional accountant, the Deputy will be better able to evaluate the benefits of such a system. I understand that this matter is being examined in my Department to avoid the kind of problems and difficulties of interpretation of accounts which would flow naturally from one year to another having regard to the manner in which the system operates at present.
Certainly I support the Minister for Finance in having some openness, transparency and accountability introduced to the manner in which the Estimates are presented. Having gone through them in some considerable detail, as I have in recent years, I concede they are very difficult to follow whereas, if they were prepared on a gross receipts and gross expenditure basis, they would be easier to follow. For one reason or another, it would appear they are designed to confuse — there is nothing underhand or anything about that, that has been the practice — and certainly are not open, transparent or accountable. Given the problems we shall face when the tranche of funds expires in 1999, I suggest that the Minister put in train in his Department a proposal that they convert to the gross expenditure and receipts basis of accountancy about which we have spoken, after which we can proceed to the accrual basis when everybody will be able to see quite clearly the financial problems that will confront this nation at the end of this decade. I commend that system to the Minister.
I welcome the Deputy's comments and will have the matter examined to ascertain what progress has been made in that area to date.
