19 entries for Mazars

The Investigation Committee commissioned chartered accountants, Mazars, to examine the accounts of Upton and Ferryhouse with a view to assessing the application of state funding to the institutions, and the financial consequences for the relevant institutions as a result of caring for the children over the period 1939 to 1969. The Mazars report is in Volume IV.

The topic of finance in Artane and in the other institutions specifically investigated by Mazars is discussed more fully elsewhere in this report, in the context of issues that arise in all institutions. That discussion focuses first on whether the capitation per child was sufficient in institutions generally. It then considers the accounts of four particular institutions including Artane. The reports prepared by Mazars were sent for comment to the relevant Congregations, which responded with submissions that they prepared with the assistance of their own experts, following which Mazars finalised a comprehensive report.

By making comparisons with contemporaneous indices, Mazars established that the grant paid per child in the industrial school system was adequate to provide a reasonable level of care for most of the relevant period. When other factors were taken into account, such as the value of the farm and the profit made from trades, the financial position was even stronger. A significant further factor that applied in Artane was the economies of scale that arose because of the large numbers accommodated there.

The money from the beads provided one-third of the cost of the purchase of a holiday home for the children in Rathdrum in 1954. The entire cost of the holiday home was £3,000. The Investigation Committee instructed Mazars, Financial Consultants to review the accounts of Goldenbridge. They confirmed the figure of at least £50 per week.

However, the capitation system required schools to run at full capacity to be economical, so changes to this system were not undertaken because of the financial implications. It led to more children being kept in the institution than was necessary because their presence served the needs of the bodies in whose care they had been placed. The terms of reference for Mazars Mazars was asked to look at the adequacy of the funding provided by the State to establish whether this sum was adequate to provide basic care for the children in residential institutions. Mazars was asked to examine the accounts of four sample institutions to see how the capitation grant was used and to identify what the overall financial impact the schools had on the Congregations that ran them.

The method adopted by Mazars was to produce a draft report in the first instance, which was sent to the Congregations responsible for the four institutions. These Congregations were invited to make submissions on the general issue dealt with in Part I and Part II of the Mazars’ report as well as the issues specific to their institutions at Part III. They submitted responses that Mazars took into account in producing their revised report.

Mazars was asked to look at the capitation paid to ascertain whether it was enough to do the job intended. Mazars was not asked whether the system was cheaper or more expensive than that operated elsewhere. They were asked simply to analyse whether the money paid for the maintenance of the children was sufficient to do that. Mazars used comparators that were contemporaneous and directly relevant to the costs of childcare at that time.

The Congregation criticised Mazars for failing to take note of the findings of the Kennedy Commission (1970), the Tuairim report (1966), and the Department of Education submission to this Committee. All submitted that the funding to Industrial Schools was inadequate. However, both of these reports were written at a time when numbers had fallen so dramatically that the system of funding, based on capitation, was under pressure. Even at this time, the payment per child was reasonable but the costs of keeping the institutions open for smaller numbers was becoming more burdensome and was taking an increasing amount out of the maintenance grant. The Department of Education acknowledged to the Committee that they had not conducted any investigation into the rates of capitation but had simply relied on the Kennedy and Tuairim reports and on the correspondence with the Resident Managers’ Association through the years.

In 1952, which was a time when the Resident Managers were demanding substantial increases in capitation allowances, the Sisters bought a large house in Rathdrum, County Wicklow, with this money, which they used as a summer house for the children for a couple of weeks every August. There was no record of any other Sisters of Mercy schools using Rathdrum and there is no evidence as to what it was used for during the other 11 months of the year. Such a purchase was not consistent with an institution struggling to survive. The Sisters’ response also dismissed the comparators used by Mazars on the basis that they failed to take into account the nature of the costs implicit in running an institution. It insisted that the only valid comparator was with a UK institution but, like the Christian Brothers’ submission, did not advert to the differences between the two systems.

Mazars observed: The Industrial and Reformatory Schooling system during the period under review did not provide for payment by the State, of salaries of those employed in the running of the institutions. The matter of salaries would not appear to be a matter which was raised by the Order at the time they ran the Reformatory in Daingean. Rather they appeared to accept the responsibility of managing the Reformatory and, in so doing, participated in the system as it prevailed at that time.22

The Congregation challenged five of Mazars’ assumptions, three of which were not accepted by Mazars. They were that: the land at Artane was gifted to the Christian Brothers for the specific purpose of establishing an Industrial School; the State had no responsibility to provide capital funding; the Industrial School and Christian Brother community in Artane were a single unit.

The position therefore is not clear. Mazars were, however, entitled to rely on contemporaneous documentation in the absence of any evidence to the contrary. The issue of capital funding has already been dealt with above. There is no suggestion that the State was not obliged to provide capital funding. The issue Mazars looked at was whether the capitation grant was intended to be used for this purpose. The answer would appear to be that it was not. The Sisters of Mercy and in particular the Sisters of Charity appeared to have understood this. Capital grants were available for building projects directly connected with the school and these should have been funded separately from the maintenance of the children. If State grants were inadequate to meet the needs, other fund-raising options could have been explored. The important point is that capitation was intended for the children and should have been used for that purpose.

However, the analysis by Mazars on the level of funding by reference to contemporaneous indices would indicate that, as a large institution, the capitation grant should have been adequate to provide a reasonable standard of physical care. Goldenbridge did not have a farm and did not have profit-making trades shops, but it did have a thriving bead-making industry during the 1950s and into the 1960s. No financial records survived about this income but Mazars were able to establish an estimate of the income it generated. They stated:

Bead Income
Number of children	120	90	60	30
Income per decade	IR£0.11	IR£0.11	IR£0.11	IR£0.11
Income per annum	IR£3,432	IR£2,574	IR£1,716	IR£858
Discounted income per annum	IR£2,869	IR£2,152	IR£1,435	IR£717

Where accounts are available, the position is summarised as follows:

Total Expenditure	€351,743	100%
Funded by:
State and Local; Authorities	€282,239	80%
Other Income	€102,913	29%
Surplus	€33,410	9%

Mazars noted that the expert report commissioned by the Oblates of Mary Immaculate and prepared by Goodbody Economic Consultants suggested that had the school paid wages to the religious staff working there the deficit would have been larger. Mazars accepted that the calculations carried out by Goodbody’s were reasonable but did not take into account: (1) the fact that the reformatory was not a State school; and (2) the system did not provide for the payment of wages at the time.