AUDITOR-GENERAL’S REPORT.

Hokitika Guardian, 20 August 1925, Page 4

AUDITOR-GENERAL’S REPORT.

criticised in house. AN ENQUIRY PROMISED. WELLINGTON. August 18. Strictures by the Controller and Auditor-General on methods of control over stores in certain branches of the Public Service were recently discussed in the House, am! led to-day to a lengthy statement by the Prime Minister, who explained that departmental heads had looked into these allegations, and he had eolleeted their replies. .MR COATE’S STATEMENT. The Prime -Minister said that it was with reluctance that the Government found it lieeessarv to comment on the Controller and Auditor-General's report, but several matters had been so set out and interpreted as to create an impression that there existed a state of laxity and failure to control the administration of finance, stores, etc., and the Government felt that Parliament was entitled to some explanation concerning the various questions raised bv the Auditor-General. The AuditorGeneral was one of the highest officers of State, placed in a position of independence and responsible to Parliament only. His reports, therefore, were entitled to every respect and consideration. But at the same time be must exercise judgment and tact in dealing with matters which came before him. His reports should be so conveyed to Parliament as to preserve a proper perspective with regard to the matters dealt with in his report. This year several matters referred to appeared to ho out of proportion to the actual ascertained Pacts, and he (Mr Coates) therefore proposed to lay l-.t-lnic members notes and reports of the Departments concerned. The first mutter dealt with by the Prime Minister was the question of audit of stores. In this connection he said that in 1922 the Public Revenues -Act was amended so that all stores must be accounted for as cash, and this men til that no loss or shortage of stores could pass without being written oil" as cash ill terms of tlie Act. Tin's had been made effective, and what the Auditor-General referred to was prior to the above date. At present the "door is not open t" speculation and extravagance.’' The reply to the charge that a Government storekeeper had been interested in a firm supplying goods was that the storekeeper in quest inn had lonilvreil his resigmi'tioli. hut owing to a shortage ol hands h** was mtermi! tciitlv employed lor a lorther .1 mouths. At the time of his resignation he was not {so far as is known) interested in the firm in question. When ho resigned he asked for stocktaking and elearame of his accounts. The Audit Department was asked to do this in March, 1921. lmt Ibis was not carried out till August. The Prime Minister lonlemled tbai the system followed by the Department by accounting for stores was and is a good one. 11 bears comparison with that set out and adopted in ile best-managed concerns carrying on! similar undertakings. Coming to the. question of tanning institutions, t He Prime Minister said that ui)- evidence could be found to support Ihe sweeping statement that “ generally irregularities in one shape or another exist ” in cases where .Government officers own farms hi the vicinity of State farms. In one case of alleged irregularities which bad been reported, investigation showed that Hi,. transaction had llm ‘-auction of the permanent head. The paragraph in the Auditor-Gene-ral’s report with regard to shortage ol motor spirits appeared to convey williout any discrimination the impression that a system of illicit sales, shortages and extravagant colisumot ioli of motor spirits exists generally ill Department-' controlling stores. Investigation showed that whatever leakagelook place was not of a fraudulent mil lire, bill occurred ibrotigli failure to cnicr 111) lie book With rcleicm c io urgent printing orders for tin- Railway Depa rt moni at Invercargill, this matter was lolly investigated I \ an accountant ol wide cominercial experience, and bis limliegs were made available to I he Audi-tor-General, wlm had seen lit lo icier to it in a way which tended to unduly magnify the actual position. The Prime Minister made reference in similar stiain to other matters ol detail referred I < > by the AuditorGeaeral and concluded by saving it was considered teat the relatively small number of surcharges and also ol prosecutions if anything redounded to the irodil of members ol the Public Service throughout the Dominion. Now Zealand bad every reason lo be proud ot its service, ami the Government could not permit to pass unchallenged anything that might tend to detract from llm high standard of integrity known to exist. Stores purchased by the Government last financial year totalled E 1,100,01X1. a very large volume of buying (iintpared with the small amount of actual stores losses reported. He further said that out of 33,000 permanent employees ol the Stale only twelve prosecutions were made during the year on account of theft, defalcations. etc. OPPOSITION COMMENT. The lender of the Opposition, Air CL W. Forbes, said lie bad followed the report with interest. While admitting that the officers of the Public Service were men of integrity he thought close watch should be kept, and the opinion of the Auditor-General respected. It would he a pity if anything were done bv the House which would have a contrary effect. The Auditor-General had not gone beyond what he was allowed bv law to do. and the House should not weaken his position. “This matter is, I think, very serious, and it should he discussed by the House immediately.” declared Air Holland. “The Auditor-General's remarks concerning a business house and a certain official if they contained only the elements of truth, should certainly furnish matter for a prosecution against that linn and that officer. The Prime .Minister’s statement, ns far as 1 was able to follow it, is in direct contradiction to that ot the Auditor-General, and what applies in this c-ase applies in a number ot other cases. It seems to me that the tact that we have such wide divergence in statements is sufficient reason for carrying the matter further. Either the Auditor-General is correct, or ho is not correct. If his statement is made earelesslr or deliberately, someone must take action in regard to him. II the statement is true, surely some action otherwise must be taken. If we take llm statement of one -ido, then the statement of the other side is immensely wrong. I think the Auditor-Genera! liim-elf lias a right to lie heard, i Hear.

hear.) The Prime -Minister’s statement is one of the most serious indictments of a public officer ever made in this country.” The Prime Minister : What was that ? Mr Holland: The Auditor-General gives specific statements of what lie alleges to be specific cases, and the Prime Minister’s reply is that there is no foundation for them. The AuditorGeneral holds a position which is among the most important held hy any public, officer in this Dominion. if the statement made to the House today through the Prime Minister is correct. then surely every bon. member must admit that it constitutes a serious indictment against the AuditorGeneral. If the Auditor-General’s department is so loosely conducted that it is possible for statements to he pul into a public document unjustifiably alleging criminal offences against departmental officers and against citizens outside, then surely there is need for further investigation. If on the other hand, the Audition-General's statements are correct, the same tiling applies the other wav about. What ! want to see is the whole matter either Fully discussed in the House, or some investigation made by an independent tribunal. The situation that has arisen is one of the most serious that has ever arisen in the history ol this Dominion, one of the most extraordiaiv situations. It puts the departments and Government on one side, and the Audi-tor-General on the other. It places the Auditor-General in the position ol either being incapable of properly administering his high office, or ol deliberately falsifying the position. On the other hand, if the Auditor-General is correct it still leaves the Departments loosely conducted and a number of departmental officers guilty of criminal offences, according to the Audi-tor-General’s account. Mr Sidev declared that the Government was under the lash ol an independent department. Hu* AuditorGeneral had reported that low prices quoted bv a Dunedin firm lor supplies compared with those obtained iron) other centres, showed that there was a ring, lie thought the whole nuttier should l.e refer re ill to the Public Account s Committee. Mr Parrv said that the only check possessed by Parliament was the Audi-tor-General’s report. 11 was extraordinary to expect members to aeoepi the position taken up hy the Prime Minister, whose statement was merely an evasion of a report printed in plait Inglish. He moved as an amendment to the Prime .Minister's motion to print, his statement that tie whole matter he referred to the Public Accounts Committee tor inH uirv. SKI.KCT COM MITT Kit TO INQI'IRK. The Prime Minister announced after further dismission that he would s.-t up a select core mi 11 ee to < (insider t lie Auditor-General's report and the reply. It had rightly been said that the Auditor-General was an officer of Parliament. and the matter could not he left where it was, as a good many of the comment s constituted reflections on controlling officers. The matter should go to a special select' onnmiittce. and perhaps oven further. Mr Parrv, in view ol ill*’ 1 Prime Minister’s statement, withdrew hi: amendment. Subsequently the Prime Minister moved and the House agreed to the following special select commit too being appointed to consider the Controller and Auditor-General's report, and Mr Coates’s eoiitnn ill thereon:— Messrs Forbes. Tiawkou. M'l.eod. F. J. Hollostiin, Sidey. Young, lion. W. No-worthy and the Prime Minister.