Office of the Comptroller and Auditor General - Press release VFM examination report on The Administration of Premium and Headage grant Applications

Press release issued on 21 December 1998

Value for Money Report on the

Administration of Premium and Headage Grant Applications

The Comptroller and Auditor General, Mr John Purcell, has carried out an examination of the administration of premium and headage grant applications by the Department of Agriculture and Food.

CAP reforms introduced in 1993 shifted the emphasis in financial support for farming from intervention purchasing of farm products to direct grant schemes to farmers. This resulted in significant increases in the level of grant expenditure, in the number of grant applications and in the volume of grant payments made. By the end of June 1998, a total of ?786 million had been paid out in respect of 543,000 applications made under the 1997 grant schemes. In Ireland, grant payments now make up almost half of the total income from farming.

Most of the funding for the schemes is provided by the European Union which specifies the payment rates, eligibility rules and administrative arrangements for the schemes. The examination looked at the extent to which grant applications are processed economically and efficiently with particular attention to the on-farm inspection system.

A report on the examination is being presented to Dáil ?reann today. The main findings of the examination are summarised below.

For further information about the report contents, please contact:

Fergus O’Brien at (01) 679 3122

Main Findings

  • Payments were made promptly under the 1997 sheep and tillage schemes but some 1997 cattle scheme payments were significantly delayed. These delays arose because the Department had problems with the computerised mapping system designed to capture details about each farmer’s landholding and because of extra work associated with BSE and agrimonetary compensation payments. Errors made by applicants also led to processing delays.
  • Real improvements in bringing forward payment dates have been achieved since 1993.
  • The Department spent an estimated ?18.1 million on administering the schemes in 1997. Administrative costs have been stable in real terms.
  • Since 1993, the EU has imposed financial penalties of ?9 million on the Department for failure to achieve required standards of timeliness and financial control. This was avoidable expenditure.
  • Inspection costs could be reduced by improved matching of staff to workloads and/or by the substitution of temporary field staff for permanent staff to reflect the highly seasonal nature of inspection work.
  • Department staff carried out inspections of almost 77,000 applications under the 1997 schemes. In the vast majority of these cases, the applications were found to be in order. Inspectors recommended the imposition of penalties on around 3,700 applicants for livestock grants. They concluded that applicants had been seriously negligent or had made fraudulent applications in over 900 of the cases inspected, including nearly half of the sheep cases.
  • Recommendations made by inspectors are reviewed by supervisors and are also subject to review by administrative staff and by the appeals unit. It appears that a significant proportion of the inspectors’ recommendations are not implemented but the Department does not monitor the outcome of inspection cases.
  • There is very considerable variation from county to county in the level of irregularities discovered through inspection. This could be due to differences in the incidence of irregularity or to differences in the quality of inspections. Inspection methods should be systematically reviewed to ensure a consistent standard is applied.
  • The Department’s information systems are not geared towards providing performance indicators on areas such as the incidence, causes and means of discovery of errors in the schemes and the monitoring of the underlying level of these errors.

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The contents of this page were last updated on 26/09/03