PUBLIC SERVICE.

Press, Volume LXIII, Issue 19176, 6 December 1927, Page 4

PUBLIC SERVICE.

ELIMINATING WASTE.

COMMISSIONER'S NEW SYSTEMS

[THE PBESS Special Serrie#.]

WELLINGTON, December 5,

In the annual report of the Public Service Commissioner there is an interesting reference to financial accounts and costing systems. Mr Vorscliaffelt states:—

"While it is recognised that Government expenditure at any time is controlled by the Government policy, it is, however, further recognised that tho administrative cost is an important, if not the most important, factor in the matter. Tho war period and tho immediate post-war period were times of expanding activity. Increased demands were made on tho Government for higher standards of service and the extension of services which necessarily involved increased appropriations. The inevitable reaction set in in a demand for economy and a reduction in public expenditure, and although the position has been reviewed from time to time with the object of eliminating anything in the nature of unnecessary expenditure, this cry is still insistent. "Experience has shown that readjustments can bo only gradually made. A curtailment of necessary _ services, or retrenchment involving either underpayment of officers or under-staffing of Departments in an endeavour to make a budget balance, is an economy dearly bought, as it means tho loss of many of the advantages of past spending, wnile with certain services continuity is of prime importance. The alternative to a short cut, and most probably a questionable economy in the long run, is to devise a system of controlling administrative expenditure that will ensure the elimination of waste and extravagance. It is in this connexion that recourse has been made by tho Government in one important instance to modern methods of accountancy by the installation of Departmental bookkeeping on commercial lines. "In addition to the usual financial accounts steps have been taken during the past few years to ensure that proper costing methods are followed in those Departments where large sums have been invested in the purchase of materials and payment of wages to enable comparative data to be compiled, and thus ensure that such Tinder-

takings are conducted with due regard to efficiency and economy. It is recognised in modern accountancy circles that a sound costing system plays ail important part in works organisation and expense control.- The sawmill and brickworks industries undertaken by the Prisons Department axe two prominent examples which could be quoted as showing where the institution of a costing system has revealed where industries which had been regarded as most successful have actually been carried on at a loss. This knowledge has led to a reorganisation of the undertakings with a resultant saving of public moneys. -The introduction of commerical bookkeeping in all departments and the establishment of prpoer costing systems has, in addition, to other advantages, undoubtedly tended to eliminate aivenues of waste which would otherwise have remained undetected. "