APPENDIX TO REPORT OF THE FINANCE COMMITTEE.

MEMORANDUM OF THE AUDITOR-GENERAL ACCOMPANYING FINANCIAL STATEMENT CONTAINED IN HIS EXCELLENCY'S MESSAGE No. 14. Period included b tween January Ist and September 30th, 1853. The Constitution Act came into operation in New Zealand on the 17th January, 1 853 ; but for financial purposes, and for the more convenient distribution of the surplus Revenue, it is assumed that its operation in the Colony commenced on the first day of the year 1853. It is also necessary to premise that no appropriation has been made by the Assembly of the surplus Revenue of the Colony collected during the period included between the Ist of January. 1853, and the 30th of June, 1854,'n0r does Constitution Act make any provision regula ing its appropriation, Her Majesty's Revenues having been entirely raised under Ordinances of the late Legislative Councils in New Zealand. Nevertheless it has been considered more convenient in the following observations, and in the accompanying statements, to exhibit the surplus Revenue a3 distributable according to the rule prescribed by the Constitution Act, in respect of Revenues raided under any Act of the General A ssembly, Surplus Revenue, It will be seen on reference to the the account of "Services in General," that : the balances in the Colonial Chests on the Ist of January, 1853, amounted to i £15,284 lis lid. This sum was chargeable with the arrears of expenses undefrayed, amounting to £11,760 4s. 6d.*—with the New Zealand Company's " fourths, amounting to £6,318 12s. 2d ; —besides certain Deposits lying in the Treasury Chests. So that it is found on making up the accounts that the ap- [ parent surplus was a real deficiency of at least £2000, No portion, therefore, of the balances in hand on the Ist of January, 1853, can be considered available for distribution. Before passing on to the further consideration of this financial period, it is necessary to draw attention to the manner in which the Queen's Revenues in New Zealand must be treated. They are by the Constitution Act the General Revenues of the Colony, payable into the Public Treasury after deducting the costs of collection and the expenses incident to the receipt thereof; and are issued under the Governor's warrant, without regard to the particular Province in which they are raised. It is only when a surplus of Revenue is to be distributed that it is necessary to consider in which portion of New Zealand they were collected, in order that the distribution may be made in due proportions. It is also necessary to premise, that should it be regulated by the General Assembly that the surplus Revenue accrued during the periods prior to the 30th June, 1854, is to be divided between the Provinces according to the rule established by the Constitution Act, it would make no difference in respect of the amount which would be payable into each Provincial Treasury on the final distribution of the surplus Revenues, whether the expenses incurred in any Pro- * \ ide Ist column of Statement shewing amount of Expenditure to be provided for by vote of the General Assembly for the period ending 30th September, 1853. No. 7,

ISerrices in General account, No. I. Vide account of N.Z. Company's "fourth«'i No. 5.