A WEST COAST EXPOSURE.

Dominion, Volume 6, Issue 1756, 22 May 1913, Page 5

A WEST COAST EXPOSURE.

AMAZING REVELATIONS.

BOARD MEMBERS & THEIR

EXPENSES.

SYSTEMATIC ILLEGALITY.

A COMMISSIONER'S FINDINGS

A remarkable state of affairs is revealed by tho report of Mr. J. S. Evans, S.M., who was appointed, by tlio Government in November last to investigate tlio affairs of tho Westland Hospital Dnd Charitable Aid Board. Mr. Evans finds that tho late chairman and oilier members of the board systematically drew money tvom tho board's funds, to which they had no legal claim.

In tho course of his report, Mr. Evans states:—lt will bo noticed by reference to the extracts from tlio minutes that the board on its inception passed resolutions fixing tho allowances for members attending board ' meetings, viz.: £2 2s. from Ros3 and Kuinarn; .CI Is. from Kaniori and Eimu and 10s. Od. for town members. These allowances havo been paid, irrespective of the actual expenses incurred as prescribed in Section 32 of tho Hospitals and Charitable Institutions Act. Tho allowance paid to tho House Committee for visiting the local hospital was fixed at £1 Is. per month, and paid also irrespective of the actual expenses.

I liavo attached ft list giving the names of tho members of tho board _ over the period under inquiry, showing their places of residence, distances, and means or conveyance. Dealing vitli these members in their order:—

Messrs. Bock, Toomey, Kobinson, and Duff are town members, and did not draw, their iOs. 6d. for ordinary meetings. Mr. Thomas Kennedy: This member lives at Kuuiara, and drew .£2 2s. per meeting. Ho usually came by train, and his actual out-of-pocklt expenses were alwut 155.; but for about 9 months ho was working away from homo and had to hire a trap at a cost of .£l, to tasa him backwards and forwards to his work, and for a short period ho had to hire at tho rate of ,£1 10s.

Mr. Murdoch: This member also lives at Kinnara, and usually hired a trap, at a cost of dCI lOs,, to orivo to tho meetings. His hotel expenses and horso livery for tho night would be from 10s. to 12s. When ho camo by train Ilia expenses would consist of his train faro and hotel expenses for tho night—about the same amount as Mr. Kennedy's, uamely, 15s. Mr. Bruce: This member lives at Ross, and usually came by train. His expenses were Is. train faro and 10s. to 10s. hotel expenses. Mr. Clifton: This member lives at Rimu, and had to hire a trap at 155., and would havo to pay ds. or ss. for* meals and horse-feed.

Mr. M'Guigan: This member was ths chairman from April, 1910, to Apijl, 1912. He lives at Kameri, nnd usually drove in his own trap. About ss. would cover his out-of-pocket expenses. Mr. M'Guigan slates.that lie sometimes hired a trap and paid for it himself. In cases whero a trap was hired 10s. would cover tho hire. Among the miscellaneous vouchers objected to tiro some charging trap hire to and from Knnicri. These have been passed, and paid for separately. None of the foregoing members kept any account of the number of times they eniiio bv train, nor of tho number of times they hired traps. Willi regard to the Kumnra and Ross members. I cannot find that tho hiring of a trap is unreasonable, in view of tho rather inconvenient train service, nor do tho' charges of. hire seem excessive; but 1 was unable to ascertain lioiv often traps wero hired. , Mr. Byrne became a member of the board in December, 1911. At that tiiuo he lived at Stafford; he continued to livo there until June, 1012. lie travelled by coach at a cost of ss. return fare. He came in on tho morning of the meeting, and returned tho afternoon of tho following day. His hotel expenses would MKonnt io 10.5. or 12s. Sinco Juno last lie lias resided in Ilokitika. Mr. Hutchison lives at Kanieri, and usually camo ill oil his bicycle, and returned tho same night. His expenses would l)e practically nil. Messrs. Coulson and Crawford live in Hokitika, and huvo not drawn expenses.

A Guinea a Visit. With reference to tlio House Commit-' i tee, (he members thereof made on official visit to the hospital oil the day of the board meeting (Wednesday afternoon). ( Mem burs of this committee made occasional visits during the month, but I cannot find that tluso visits cost them anything. The hospital is about iv mile ana, a half from the centre of the town. 'Iho members of the House Committee drew their guinea per month, but so far as T can .learn they were not put to any out* of-pocket expenses in malting their visits, It appears to mo that. 111 view of bootion 32 tif the Act, which is as follows:— "32. (1) A board may reimburse bo every member (lie expenses incurred and actually paid by him in going to or returning from any meeting of the board or of any committee thereof of which ho is a member, or in making any oflicial visit of inspection to any institution when appointed bv the board or any commuted thereof to' make that inspection. _ "(2). • Before any member 15 paid nny money for travelling expenses under this action he shall make a statutory declaration that ho has not been paid and 13 not entitled to bo paid any sum in respect of the samo travelling expenses by any other person or -body corporate, and shall deliver that declaration to the chairman or secretary of . the board. "(3). Any such declaration by any member other than the chairman may bo made before the chairman of the board, —the resolutions of the board, above referred to, fixing certain payments, irrespective of actual costs incurred, are ultra vires, aud I am framing my report accordingly. , All payments, therefore, made" under tho authority of these resolutions are, in my opinion,'irregular; but, for the rensous above givon» I lie ninoiwils paid "would not excocd the amounts the member.? mmht havo claimed when they had to hir© ''"This is so with regard lo' the amounts drawn by Messrs. Druee, Kennedy, Murdoch, and M'Gmgan where members can show that they actually did hiro vehicles. With regard to Mr. Clifton, I am satisfied that ho had no other means of coming in to the meetings, and his charges are within UlO amount allowed by tho Act. , , , With regard to the payment of .£1 Is, per month to the House Committee, in my opinion this is illegal, unless tho members can show that this amount was actually and necessarily expended by them on (rap hire. Secretary's Perquisites. ■Regarding the am»iints drawn by and paid to JOIIII Peake, junr., secretary, (hose are ostensibly drawn as bis travelling allowances and expenses. As a matter of {net, the secretary and tho chairman (Mr. M'Guigan) divided theso amounts between them, tho chairman getting tho larger share. The amounts in tin? vouchers nro based oh $ claim by tho secretary and chairman of -CI Is. i\er day each for their time, and were so appropriated bv (hem. There is 110 miniite or resolution of the board authorising the payment of this amount, either to tho chairman or tho secretary, in view of Seel ion 32 it appears lo me that tlioo payments lo Iho chairman are illegal, and (lie payments to tho seorolnrv wen* unauthorised. The expenses charged 111 the vouchers are, in my opinion, excessive even if the visits and inspections had been authorised. _ It is explained by tho.ohnirmnn and Iho secretary that tho matters for which tiicse vouchers were drawn wore left in Iho hands nf the chairman to deal will: between meetings. With very few exceptions, however, there am no resolutions or uiinutes of tho board to this cf-

feet, and in no case can I find any report to tho hoard as to tho results of theso visits and inspections. With, regard to tho secretary, as will bo Been by the minutes, ho was engaged at a salary of ,£2OO per annum. There is an agreement in writing also to itlio tame effect. Under this agreement ho has to do all the work usually undertaken by secretaries of similar boards, and to obey • nil tho instructions of tho board or itho 'chairman. I can find no authority or g'ustiflcation for tho payment to him of. J!1 Is. per day over and above his actual -expenses. The secretary's explanation is ,that he declined to accompany the chairman unless ho paid this amount, and tho chairman agreed to this payment. Ho •further states that it lias been the prac- , tico of former boards or Hospital Trustees (for years past to make similar payments. ' The chairman also relics on this practico ■as a justification of these payments. . . ■ L questioned the secretary as to what .lio did in regard to the matters for which 'these vouchers were claimed, and, so far as I can gather, ho did nothing boyoncl ' accompanying/ tho chairman. 1 cannot find that it was nccessary for tho secretary to accompany the chairman on theso visits, and in corroboration of 'this he has not accompanied tho present chairman (Mr. T. Kennedy) on any visit made by him since April, 1912, nor has eoy inconvenience arisen through his not doing ' so. . . . Iu the absence'of a more satisfactory explanation than has been given, I am forced 'to the conclusion that tho chairman took the secretary with him lot ' tho purpose of claiming theso allowances and having them passed or paid in tli4 :iiauie of tho secretary, with whom '■ho afterwards divided tho expenses. . . It might . have been competent for tho board, to pay the secretary XI Is. par day and expenses ,while absent from office on board business .'if such payments had been properly J authorised and passed; but in view of the | circumstancss and tho irregularities above stated, I am of opinion that all these were illegal. Expensive Trips. Regarding a series of . visits of inspection by tho chairman in connection with the opening of a new hospital at Otira, Mr. Evans says:—lt might have been, and probably was, necessary for him to 1 make ah. occasional visit as chairman ot the boardy but it could hardly have been necessary for him to spend more than a tiav there at a time. The train fore from 'Hokitika, first-class return', is 19s. 2d., and, allowing for three days away from liome, the expenses of a visit should not .havo exceeded, say, £i; instead of which T find vouchers claiming amounts varying from '£! Gs. to £2i> 15s. Under voucher •No. 269 there is a claim for !>>., and in respect of this visit there is another separate voucher (No. 208) for £S 2s. for trap hiro from luimara to Otira. Ihis, according'to the method previously ' referred to of ascertaining time, was for five days, including ono day travelling each 'way, leaving .three days spent at Otira. : 'Assuming that this visit] was for the pur- , poso of organising committees and arranging for contributions, and that it was necessary for both secretary and chairman to inako the journey, £2 should havo covered train fares and .£lO expenses. J. need,not particularise all the visits to 'Otira, but. in a word, tho farts and expenses charged in all cases aro excessive, and the allowance of <£1 Is. per day for each is illegal. In like manner, for ■a. one-dav visit 'to either Eoss (where the Totara Hospital is situated) ■ or Kumars, 10s. should cover actual exnenses, aim .£1 should cover the expenses for a two-days visit; but, except in very exceptional circumstances. a two-days' visit 'to either place'would be quite unnecessary. It will bo noticed from tire vouchers that from i£s to £9 have been charged for these visits.

South Westland Journey. S With regard to visits to South West- ■ : )airl, there is one item on which I must .draw special attention. On page 2 of tho •jnintites, under date" February 1, 1911, thero is a resolution of the board inviting the residents of the district to discuss matfcrs with "-Messrs. Duff and Murdoch during their visit to South Westland/' '-(Messrs. Duff and Murdoch were going to 'South Westland on County Council business). They met tho residents, and on tho same page of tho minutes, under date Murcli 1, 1911, Mr. DufE reported the result of the meeting, and received a voto of thanks. No claim for expenses was made by these members in respect of this visit, and under Subsection (2) of Section 32 no claim could be made bv them. The chairman (Mr. M'Guigan) did not meet the settlors on that occasion, and was lijot authorised so to do, but on February 26, 1011, by voucher No. 1382, ho drew £la l'or this visit. This voucher was neither authorised nor passed. Ho explains tho voucher by saying that he originally intended to go, but when Mr. Duff was appointed he agreed to give ltim JJIO. Neither Mr. Duff nor Mr. M'Guigan could explain why Mr. Duff did not draw his own expenses if he were legally entitled to them. Mr. Sl'Guigan explains tho retention of the £5 as part of his expenses ■in installing Dr. Cairns in the previous 'Septomber. In this connection, however, he liad already drawn two vouchers for the same installation—ono (No. G27) on September 17, 3910, and another (No. 7GG) on November 13, 1910-amounting in all to ,£lO 55.; in addition to which Cameron •had been paid by separate voucher (No. ' 7G5, September 17,1910), the sum of £ih for ;buggy hire (see "Miscelaneous Accounts." iNo explanation was given as to why tho ■chairman had not drawn his full expenses x>n the previous vouchers. , With regard to vouchers for attending '{meetings put in by tho chairman, it will ,be seen that ho has claimed for more Imectings than any other member of tho (board, and for .more meetings than actually took place. He explains this by ■paying that when ho visited town on board ['business he charged tho visit as for a 'meeting. No records exist as to thesa Visits, except tho vouchers. . Referring to matters reported on by tho •lAuditor-General, Mr. Evans, says:—Tra'veiling expenses—(a) Secretary: I have '.already dealt fully with this matter. _ I (have just to add, however, that during 1910-11 the secretary drew .£213 19s. Gel. Of this amount (according to the secretary's version, which is practically assented to by the chairman. Mr. M'Guigan) Hie chairman received i£U2 lis. Gd., being '.£7l 3s. Gd. for hiro of his (the chairJinan's) own trap, and half of' .£142 lis., the amount claimed at the rate of .£1 Is. per day. I have not made the calculations for the year 1911*12, but the amounts :aro sufficiently clearly shown on the Touchers in Exhibit A; the system of 'division being that tho secretary received 'half tho amount claimed as "allowances" and tho chairman got the balance. Tho nther matters under this head havo been separately dealt with.

Passing, then, to the present- management of the board's business, Mr. Kennedy was* elected" chairman in April last, jmd sinco then the system of tho chairman drawing remuneration and travelling allowance under the guise of tho secretary has been discontinued, and the Eecretury has ceased to . accompany the chairman on his visits of inspection. Tho board has, however, under dato January 10, 1912, fixed a limit of ,£BO per annum for tho chairman's allowance. Under authority of this resolution, Mr. Kennedy lias drawn'two vouchers of .£2O each per quarter for travelling _ allowance. While this system is preferable to tho one previously in vogue, it is still, in my opinion, illegal, in visw of Section 32. Tho members of the board still charge the samu fees as formerly, or at least they had done so up to tile date of the meeting of the board. la feTinectian with the general matters under inquiry, I learn that the Hokiiika Borough Council, asi a contributing local'body, raised objections to the payments now. under review. In May last a committeo of the Hospital and Chari-table-'Aid Board met a committeo of the Borough Council in Ilokitika, at tho board's office, in the evenings, and went through tho vouchers and accounts of the board. The members of the board who attended theso committee' meetings have charged at the rate of .CI Is. per meeting. With the exception of Mr. Kennedy, who came from Kumara for the purpose, none of the. members attending tho meetings' nould be put to out-of-pocket expenses. Having regard to tho purpose for which the meetings wero ■ held, it appears to me doubtful whether any payment of any kind could be mado to members out of the board funds for attending these meetings. The last caso dealt with is that of Mr. \ W. R. Bock. "Mr. Bock," says the Commissioner, "was on tho board from 1910 to 1912. During the time Mr. Bock was a member of the board he was employed in the firm of Johnson and Co., of which business his father was tho sole proprietor under that style. Prom all I can '"learn Mr. Dock had no interest in tho business beyond that of uu employee, but during tho period under inquiry tho board purchased goods from the firm in quostiou to tha jaluo of .£579 JK