FRIENDLY SOCIETIES.

Dominion, Volume 5, Issue 1517, 13 August 1912, Page 5

FRIENDLY SOCIETIES.

' * 1 GOVERNMENT REGISTRAR ON. 1 AUDITING,. p ln his annual report to Parliament tile . Registiar ot I<nciuily Societies says:— 1 co i; c ls . duty to rcferlagaia to. tho nn- , satisfactory audit arrangements of tho : societies, ono of the weakest points in : lnendly socioty management. Tho sub-' ' j ol i- J S u ,°" f; forward this year in tho i belief that no matter'how forcibly tho results ot inefficient auditing aro brought homo to societies by monetary losses, tho i measures taken by them to prevent a incurrence are, as a rulo, of quito a temporary nature, and tho necessity for real rcloihi is quickly forgotten and lost eight I of, , b , 'Tho auditing in tho bulk of tlio societies is ■ conducted by men whoso training ' and occupations, however useful for goueral administration purposos, totally unfit them for tho special work of auditing/and , it wo add to theso the auditors who for- . mally sign the Ixilanco-,sheet—and, in a caso now beforo me, oven a blank form, | leaving tho secretary to fill in his own nguros it is obvious -that thero is somo very faulty auditing in friendly societies. ' ; tho average not rnoro tlian about thirty out of tho six hundred odd friendly socioties' annual bala-nco-sheets aro 'examined by nuditors appointed undor tho Friendly Societies Act, a state of affairs that roughly indicates tho scant use mado of tho present legal provisions for the ndoquato protection of their funds.' • I am aWaro that ini mouyVeocietios thero tiro members who are,, capablo nl''' conducting a Simplo audit, but it is very doubtful wliether such members aro always selected; ■ and, in any ease, tho finances of a great number of eociotic? aro such that independent and competent auditing is absolutely necessary for the proper security of members' interests. Apart from 'tho general audit, I -am convinced that many auditors fail to renliso tho nature of tho cortificato they sign at the foot of tho statutory balancesheet iorm, wherein they declare that thoy havo 'examined tho securities.' If, as I have seen,, feputablo auditors aro caroloss in certifying to securities they have not seen, what is to bo expected where the auditors are unskilled men, who would probably bo unablo to detect a falso security, or who havo little or no conception of■ such a document? Tho avcrago amateur auditor, moreover, is reluctant to call, for tho production of nil', securities, for tho reason that such ft demand in many eases would be regarded as officious and unnecessary, and would bo strongly resented by his fellow-niem-bers. ' "A competent examination of securities would havo prevented much loss of societies' funds in the past, and tho adoption of somo such system, though not as satis-'' factory as a complete Sta'uo audit, would be a distinct improvement on present methods. "It would bo anadvantngo to attach an auditor to tho Friendly Societies Office, whoso duty it would bo to examine tho accounts of lodges throughout tho Dominion. Although ono official could not audit tho affairs of all societies in the same year, ho would bo ablo to exercise a check on tho securities, and his appointment would constitute-the basis of an independent and expert aiidit system." TOTAL FUNDS NOW <fil,4tt,BS3. "Tho'. past, year hns been 'a satisfactory • one for wicieties, taking into consideration the ineveaso in branches find in membership. Thero were 49 now lodges opened, tho greatest number for any year on record. Tho Independent Order of R-echn-bites holds first place for activity in this respoet as' compared with the other societies, and its superiority has been evident for tho last two years. Tho succor of this society would appear to be contemporaneous with the general advanco of total abstinence principles. Tho not returned membership of all societies (71,771) shews an increase of 3.G7 per 'cent—slightly ahead of lust year's rate, 3.2!). The Kechabitcs' order also leads with tho highest percentage of increase in membership, .the gross, funds of those societies increased during the year by .£!»l,flGi. and reached tho totnl sum of JH,(H1,853, representing'an average capital per head equal to' .£2O Is. Sd., tho Manchester Uiiitv Independent Order of Oddfellows holding the highest amount per member. The interest • earned on tho capital moneys of the benefit funds amounted to <C 59,5&9, equal to a rate over nil societies of 4-.M per cent'. These general facts indicate the progress of the societies, which aro still ablo to mnintnm their pre-eminent position as tho popular insurance cstnb* lislnnent for tho industrial population."