RECORD OF WASTE.

Press, Volume LVIII, Issue 17611, 14 November 1922, Page 10

RECORD OF WASTE.

I STATE TRADE LOSSES. AUDITOR'S SEVERE CRITICISM. (from ottb own cobbsspondkkt.) LONDON, October 3. Interesting sidelights on some of tho results of Government trading are contained in the report of the Comptroller and Auditor-General (Sir M. G, Earnsay), on trading or commercial services conducted by Government Departments during the period ended March 31st, 1921, issued as a Blue Boole. Many Departments are dealt with. Two Board of Trade officials j cost the taxpayer £250,000 as the sequel to paying £4O instead of £3O a box for Chinese bacon and lard. The Comptroller and Auditor-General states that this astonishing transaction "is described as an oversight.'' The two officials have left the Board of Trade, and the Department "is taking steps to recover the excess payment." Other transactions equally comforting to a nation paying 6s in the £ income-tax are described. The trading account for the requisition period, August 9th, 1919, to March, 1920, Shows that £5,709,000 was lost on trading in bacon, ham, and lard. "I was informed," states the AuditorGeneral, "that the principal causes . . . were deterioration of quality after importation, heavy charges for protracted storage . . and fall in prices." A drastic reduction in selling prices, he points out, became imperative in order to effect final clearance of stocks which "were not only growing in disfavour, but were in danger of rapid and complete deterioration." The following are some of the more outstanding losses: — Eecontrol of bacon, £5,700,000; recontrol of currants, £960,000; Australian meat, £3,000,000; Chinese bacon (an oversight), £250,000; cattle food (official's mistake), £143,000; cattle food, £122,000; building materials, £72,000; farm settlements, £94,000. Farm Settlements.

Summaries of the farm and estate accounts of the various farm settlements for" ex-Service men under the controlof the Ministry of Agriculture indicate that the losses in 1920-21 to £42,789 on the farms, and £19,685 on the estates, while the ! a gg re g a te loss from the commencement of operations to March 81st, 1921, was £94,101. Although the cost of administering these settlements in 192021 was £14,000, only 50 per cent, of that amount was charged in the accounts. In reply to the Comptroller's enquiry, the Ministry explained that the reduced amount had been charged in view of the fact that the time spent by headquarters officers on preparing replies to Parliamentary questions, on the drafting, of the annual report, and on Similar duties was of no benefit to the individual settlements. The Treasury, to whom the matter was referred, stated that they could see no justification for the arbitrary division of expenses adopted by the Ministry, and they regarded it as essential that the full actual expenses'of administration of the farm settlements should be charged in. the Ministry's trading accounts. These observations also apply to the Ministry's demonstration arable dairy farms, where the cost of administering the farms in 1920-21 Was £2319, while only £llsO was charged in the farm accounts. The farm and estat§ trading accounts for 1920-21 show losses of £4BBI and £1379 respectively, and it appears from the report of a special departmental enquiry 1 into the accounts that these results were partly , due to inefficient management and lack of conj.trol. In reply to enquiries the Ministry stated that, in view of the novel character and the difficulties of,. this Work, it was -perhaps inevitable that in the earlier stages of the operations certain defects of organisation should I reveal themselves. They also stated" that both the officer who was in local charge of the farming and other operations, as well as the Farm Settlement Commissioner, who was generally responsible at headquarters in the period under review, had now left the service of tho Ministry, and that the system of administration and financial control of the farm settlements now in operation was, in their dpinion, satisfactory, from the standpoint of both efficiency and economy.

Lack of Precision. The Treasury has sanctioned the write-off £143,000, losses incurred on cattle-feeding stuffs. The Treasury considers "that the proceedings showed a lamentable lack of precision, for which it is impossible to relieve the officers of the Ministry of Food of responsibility." A loss of £122,000 on conserved cattle-feeding Btuffs is attributed to the failure of the administrative . officer to pass on to the consumer the charges incurred in respect of the storage and transport of feeding stuffs. The accounts of the dried fruit section for decontrolled tiurrants show a loss of £962,606 on stocks valued at £1,849,767. The reasons given for this loss were that the season was wet, that the packing of the currants in canvas bags allowed them to bo crushed, and that deterioration was aggravated by unavoidable, delay, in unloading. . Of the reserve of £360,476 provided in the balance-sheet for bad and doubtful debts, £200.000 is in respect of debts due for Board of Trade frozen meat. Meat and Bread Losses. While a profit of £3,000,000 was made on Australasian meat in 191920, the trading in this commodity during 1920-21 involved a loss of a corresponding amount. This is stated to be due. partly to the low prices actually realised. It appears in this connexion that in September, 1920, the whole of the stock of Australasian-beef was sold to a. contractor, who had intended to dispose of a considerable.portion of it for the Continental markets. It subsequently became impossible to dispose of it in that way, and large concessions were made in 1921 to the contractor, with Treasury sanction, with the result that the aggregates net amount realised for the stocks was very materially reduced. The accounts include the whole of the loss on account of the Bread Subsidy, which amounted approximately to £162,000,000. This amount is, however, subject to adjustment as tho result of the pooling arrangement with the Allies. The balance-sheet of various trading accounts in connexion with the Ministry of Food showed that assets exceeded the liabilities by £6,391,365, which was- subject to cousiderable claims outstanding against the Department, notably on behalf of American I packers. In addition, the frozen meat factory at Las Palmas, which is leased to the Board of Trade, showed a profit of £617,695. Millers' Profits. An explanation is given of a loss to the revenue resulting from the manner in which millers' profits were dealt with under j the Flour Mills Order, 1917: —"An agreement was entered into between the millers and the Food Controller, under which tho millers were guaranteed their standard mill profits, while any mill profits in excess of that standard were payable to the Food Controller. These excess profits were assessed for Excess Profits Duty, and this duty was paid by the millers, a corresponding • allowance

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being made under the agreement by the Food Controller in ascertaining the amount of excess mill profits paid by them to him. The statutory duty on the profits payable to the Food Controller appeared therefore m effect (although not in law) to be borne by him, inasmuch as it reduced the profits otherwise payable to him." # Certain millers have since claimed repayment of the duty owing to deficiencies in the non-milhng j>art of their business. One miller has reclaimed the whole of the Excess Profits Duty paid by him, including the duty on the excess profits payable to the Food Controller. "The consequence is that the State has received in all a sum which falls short of the aeerezate excess of the mill profits made by the controlled millers above the standard guaranteed to Wttu.l^