Chapter 2 — Finance

Analysis of individual accounts

A Department of Education Report prepared in 1955 stated that the farm was making profits and that there was no evidence that these profits were being ploughed back into the school. Mazars concluded: The views of the Department Official are not consistent with the record in the financial statements, which show an overall deficit from the farm. We have not been able to identify a reason for this inconsistency.41

As to capital expenditure, the terms of the lease required the Oblates to keep the premises in suitable repair, and documentation from the Department of Finance indicated that the capitation grant was sufficient to meet this expenditure. The State was responsible for all items of capital expenditure from 1940-69. Despite the significant capital investment in Daingean in the period 1939-69, Department of Education records indicate that Daingean was not in a good state of repair. Correspondence between the OPW and Departments of Finance and Education in 1969 and the early 1970s indicates that certain buildings in Daingean were ‘structurally unsound’. A visit paid by an official of the Department of Education in 1967 echoes this view of the state of repair, referring to the premises being ‘in a bad state ........... should be demolished’42

Mazars had not had sight of a balance sheet for Daingean during the period under review and accordingly it was limited in the information which could be extracted from the accounts. The salient points in assessing the overall financial consequences included the following: There was a deficit in the bank of the Reformatory School at 30th November 1969 in the amount of €11,710. The total deficits generated by the school over the period amount to €17,706. Expenditure on the buildings (furnishing and carpentry, repairs) amounted to €72,422. In analysing the farm income and expenditure in the school accounts, it can be seen that the farm made an overall deficit of €25,003. It is not known to what extent farm expenditure includes work of either a capital or a repairs and maintenance nature.

The following is a summary of the financial position.:

Total Expenditure	€744,587	100%
Funded by:
State and Local; Authorities	€533,614	72%
Other Income	€193,273	26%
Deficit to be funded	€17,700	2%

Mazars also concluded that: An examination of the transcripts, statements and documentation of the Oblate Order made available to us describes a situation where making ends meet was a constant struggle, especially in light of the ongoing works and maintenance required ...

It is clear from the financial statements reviewed that the expenditure on furnishing, carpentry and repairs contributed significantly to the deficits in the school.43

The Oblate submission in relation to the value of the work done by the Order has already been discussed above and is central to the observations made about the overall financial position of the Oblate Order and Daingean.

The submission concurred with Mazars’ view that the accumulated loss of equivalent of €17,700 that was made over the period of operation of Daingean could not to be taken at face value to indicate that the capitation grant and other income were insufficient to cover operating costs. Goodbody looked at the flow of payments and benefits between the Order and St Conleth’s to see whether the services provided by the Order exceeded the value of goods and services moving in the other direction. If the Order gave more to the Reformatory than it received, then the inference was that the Oblates subsidised the Reformatory. If the situation was otherwise, as Mazars conclude, then the Oblates received a net benefit and can be said to have actually profited from the operation.

The accountants sought to complete the picture of the estimated surplus or deficit to the Order by making appropriate allowances and adjustments. Having done this, Goodbody concluded that the cost of operating St Conleth’s exceeded the capitation grant and all the other income sources and that, therefore, the school could only operate because the members of the Order worked there without receiving proper compensation. They concluded that ‘it is clear that St Conleth’s was operated at loss over the period in question. There was no possibility of the Oblate Order profiting from the operation at St Conleth’s. In fact St Conleth’s was only able to operate due to a subsidy from the order.’

Goodbody’s calculation was based on valuing the work of an average of 24 members of the Oblate Order throughout the period in question at the average weekly wage of an industrial civil servant, which meant a person working at unskilled or craft work.

The question whether the Oblate Congregation profited from its operation of Daingean Reformatory thus resolves itself into a consideration of whether it is legitimate to value the work of the members of the community in the way suggested by Goodbody in their report. If so, the institution could not have operated except for the net contribution made by the Congregation. If that approach is not to be considered legitimate, then it follows that the Congregation was in a position to enjoy a surplus and it would also seem to follow that the capitation payments were at least adequate.

On the basis of the discussion already outlined on the issue of the value of the work done by the Order, it is reasonable to conclude that Daingean Reformatory was adequately funded during the relevant period.

Very limited financial information was available for these institutions. In respect of Upton, there were no records for 1940-49 but there were financial documents for the years 1952, 1953, 1960-66. In relation to Ferryhouse, there were some records only for the years 1941, 1947, 1951-54, and 1960-69. In addition to the above, Mazars were also provided with the accounts of the Province for the periods 1952-53 and 1961-69.

Because of the incompleteness of the records the figures can only be regarded as indicative. With that qualification, for the years for which financial records exist, it appears that Upton enjoyed a surplus of €24,284 and Ferryhouse a surplus of €26,901.44

Mazars quoted from the submission made by the Order: The submission made by the Rosminian Fathers draws attention to a number of issues that are relevant not only to those Schools run by the Order, but also to the system of Reformatories and Industrial Schools in its entirety. These have been dealt with, in that context, in the early sections of this report. In summary, the issues raised by the Order are as follows; No State monies were available to assist with the provision of buildings and other facilities in the Industrial Schools. • The Order also notes ‘It must be kept in mind that the two Industrial Schools were only part of the financial burden on the Province that also had to provide and maintain houses for students who were called to join the Institute and who did not pay any fees for their training. From 1945 onwards, the Province had a further call on its limited financial resources when it was required to provide for the travelling expenses, health care and much more, of the members who went on mission to East Africa.’ The question of State funding of the property is, as we have already seen, complex, and is relevant to our understanding of the relationship between the State and the Orders and their collective perception of their respective roles in relation to the provision of the Reformatory and Industrial Schools’45