10,992 entries for Inspections - State
BackAn analysis of income and expenditure for the period 1940-69 indicated that ‘the school operated at approximately a break-even position for the first two decades under review but ran into deficit during the third decade.’39 The deficit in 1969 was €20,602.
The primary sources of income were government and local authority grants. Other sources of income included farm sales, stipends, and sundry sales. Indirect sources of income involved the labour of the boys in the trade workshops.
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.
Separate accounts were not kept for the farm. The school accounts showed the farm making a loss of €25,003 over the period 1940-69. These figures do not, however, take into account the value of farm produce consumed by both the boys and the Brothers and Fathers resident at the School. In availing of farm produce to feed the boys and Brothers, there was, presumably, both a financial saving to the school, which would have resulted in lower total expenditure and lower deficits than if these costs were incurred externally, as well as a corresponding loss of potential income. Similarly, the accounts do not reflect the fact that labour on the farm was largely that of the boys and the Brothers. Again, there would have been a certain saving to the school in using this ready pool of labour as opposed to employing additional farm labourers.40
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.:<br><table><colgroup><col></col><col></col><col></col></colgroup><tbody><tr><td>Total Expenditure</td>
 <td>€744,587</td>
 <td>100%</td>
 </tr><tr><td>Funded by:</td>
 <td></td>
 <td></td>
 </tr><tr><td>State and Local; Authorities</td>
 <td>€533,614</td>
 <td>72%</td>
 </tr><tr><td>Other Income</td>
 <td>€193,273</td>
 <td>26%</td>
 </tr><tr><td>Deficit to be funded</td>
 <td>€17,700</td>
 <td>2%</td>
 </tr></tbody></table>
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.