14

[J. K. WABBtJBTON.

I.—lla.

being one balance-sheet for the two mines, does not comply with the statutory requirement, and cannot be audited or certificated as doing so." Had the Minister, on receipt of that memorandum, asked me to certify the balance-sheet, 1 should have certified it in accordance with that minute— that it could not be audited or certificated as complying with the statutory requirement. The questions which have been asked of the accountants as to what has been called the dispute between the Administration and the Audit Office with respect to the law seem to me to be questions which should have been asked of a legal adviser rather than an accountant. But before Igo to the question of the law, which I think is the only point of dispute, if there is any dispute, I should like to read what 1 wrote about three or four years ago on the subject. Ido not know to whom I addressed this minute, but I said, " The accounts which are required to be prepared and laid before Parliament are only the accounts to which section 14 of the Act of 1901 applies. With respect to each mine there should be—(l) statement of liabilities and assets, (2) Capital Account, (3) Working Account, (4) Profit and Loss Account. Sections 2 and 3of the Act of 1902, besides providing that moneys of the State Coal-mines Account shall be paid into the Public Account to credit of a separate account, appropriates moneys to give effect to the purposes of the Act; but these sections relate to the accounts under section 14 of the Act of 1901 only to the extent of providing for charging costs and, expenses incurred in raising capital, and all interest and sinking fund. The State Coal-mine receipts and expenditure, being included in the Public Account, are examined and certified by the Controller and Auditor-General in ordinary course, and form no part of the accounts required to be prepared by the Mines Department. No general account, either of liabilities and assets, capital, working, management, or profit and loss, is required by the Act. It requires only the four accounts in, respect of each mine. Of course, general accounts should be kept—such as for capital and management — to be closed periodically b~y transfer to the mines accounts; but, like the statement of the cash receipts and payments, such general accounts are not required to be published." All that, concerns the Audit Office, therefore, is the law, and the Audit Office has found no fault with any form of accounts furnished by any administration or accountant which complies with the law. So long as a balance-sheet which is required by the statute complies with the statute, the Audit Office does not do more than occasionally suggest what would be better. In the case of the State Coalmines the Audit Office has suggested nothing. We were satisfied with the two separate accounts rendered last year. They were rendered according to the judgment of the accountant, in the form —that is, as the two separate balance-sheets —required by the Audit Office. Section 108 of the Act has as its governing clause, "'With respect to each coal-mine worked by the Minister under this Part of this Act, the following provisions shall apply." Then, subsection (c), subject to that Governing clause, provides, " Such, balance-sheet and statement shall be so prepared as to show fully and faithfully the financial position of the mine" —it does not say the position of the two mines—" and the financial result of its operations for the year." Subsection (c) then states, " The balance-sheet and statement of accounts, duly audited, together with a report by the manager on the operations of the mine for the year, shall, within ten days after the audit is completed, be laid by the Minister before Parliament, if sitting, and if not, then within ten days after the commencement of the next ensuing session thereof." Ido not think there can be any question whatever as to the meaning of that section, and the other questions seem to me to be matters for the Administration and for Parliament to deal with. The Audit Office saw last year that a balance-sheet for each mine had been prepared in accordance with the Act, and that the revenue and the expenditure had been accounted for according to law, so far as the Audit Office could ascertain. This year there is one balance-sheet for the two mines. The principal contention raised against a separate balancesheet for each mine is that the money raised by loan cannot be wholly allocated; but there is no authority to raise the money by loan except to provide funds to be spent for the purposes of the purchase of each mine. The provision is, "In order to provide funds for the payment of all compensation or purchase-moneys payable in respect of any resumption or contract under the aforesaid sections sixty-four and sixty-five hereof, or for the construction, erection, or acquisition of buildings," &c. There is no authority but to provide money for one or the other mine or both. The" question of the difficulty of allocation is not one for the Audit Office to consider, and that, I think, is a matter of opinion. This is the objection of the Audit Office: that the general balancesheet is not the balance-sheet required by the Act to be audited and laid before Parliament. 218. Hon. Sir J. G. Ward.] If, as was stated by Mr. Heyes, there is a separate account kept for each coal-mine in the books of the Department, with the exception of accounts for three or four —or whatever the number was—items that go into a general account for allocation at the end of the year, and if your Audit Department has certified to the accuracy of the accounts by ticking them all off in the books, would you not regard that as keeping a separate account for the purposes of audit? —I confine myself to the balance-sheet to be audited —the balance-sheet and the"four statements in connection with it mentioned in the memo, which I read ; and those are submitted. I have stated here that there should be kept by the office a general account —that is, not an account required by law, but that from that account there should be made to the separate accounts what transfers are necessary to make up a separate account for each mine—a complete separate account for each mine, just as if each mine were the property of, and were managed by, two separate individuals. 219. That is not an answer to my question. If your Audit Inspector examined and ticked off the separate account for each mine in the books of the Department, and he reported that to you as being correct, you would not regard that as sufficient to warrant the correct statements in the books being focussed into one balance-sheet for your certificate?—l do not quite follow the question. 220. In other words, if in the books of the Department there is a separate account kept for each mine, and that is ticked off by your Audit Inspector, who reports it to you, and both accounts tire focussed into a balance-sheet, you would not regard that as sufficient warrant for your certificate to be attached? —No; I should want a separate balance-sheet according to the Act. What I have to deal with under the Act is the balance-sheet.