Chapter 2 — Finance

Analysis of individual accounts

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

Mazars responded to these points: With regard to the additional financial burdens on the Order, we note that this question is relevant to an understanding of how the Religious Communities viewed the Schools as a potential contributor to other unfunded or under-funded activities of the Order. From our examination of the financial information made available to us by the Rosminian Fathers it is our view that the Schools did leave the Order in a net surplus position, to the extent that the closing balance sheets of the schools show an improved position on the earliest available accounts. However, the contribution of the Schools to other Community activity does not, based on the available information, appear to have been sufficient to yield the Order a significant surplus.46

The Rosminian Order made a more reflective submission as part of its final submissions to the Investigation Committee. They stated that the ‘Mazars draft report raises many controversial issues’.47

They submitted that The predominant financial characteristic of the Schools was persistent under funding and accumulated debt. Where funding increased it was too little and too late, and the financial relationship between the schools and the State was adversarial. We have already described how the Schools financial position was a struggle. In fact the relationship with the State is best described overall as dysfunctional. This is illustrated by two phenomena. Firstly, the Schools’ Inspector usually (but not always) characterised the quality of provisions in school as satisfactory, but increases in State grants were usually accompanied by the requirement that school conditions be improved. The underlying conflict in those assessments disguised a lack of focused thought, and guided standard. Secondly, if it is assumed that funding was even barely adequate, the temptation for the Schools to seek maximum numbers of boys on the basis of economies of scale (same overheads, more income) was destructive to standards of performance, because boys were then being kept for money, and not vice versa.48

The Rosminians also submitted that a ‘definition of the purpose of State funding to the schools’ was irrelevant because: Whilst the use of its property was clearly donated to the Industrial School Purpose, the Order itself had very little other resources, and as the buildings aged and standards of living rose, the Industrial School project as a whole obviously had increasing capital needs. Whilst the issue of capital expenditure might well have become part of the polemic of the acquisition of State funding and increases, it was plainly unrealistic to expect an Order without substantial means to carry and ever increasing burden. This is very clearly acknowledged in the Cussen Report.49