The Dominion THURSDAY, AUGUST 12, 1943. MUDDLEMENT AT PUBLIC COST

Dominion, Volume 36, Issue 272, 12 August 1943, Page 4

The Dominion THURSDAY, AUGUST 12, 1943. MUDDLEMENT AT PUBLIC COST

One reason advanced by the Government for the unsatisfactory state of Army stores accounting, disclosed in the Auditor-General’s report to Parliament, was that “the period covered by the report was one of great expansion, due to the entry of Japan into the war.” No doubt the spread of hostilities to the Pacific did impose a strain on the ordnance section, but that docs not meet the criticism made, for the Auditor-General stated plainly that in the matter of Army stores “by far the greater number of lines have not been checked since before the war.” The appearance of Japan as an enemy came in December, 1941, so that when full allowance has been made the fact remains that these stores had not been checked since before September, 1939. No explanation was attempted in that respect.

Theoretically it may be all right for the Minister concerned to be notified when the Auditor-General points out irregularities and then, as the Prime Minister stated, for action to be taken to have the matter remedied, but what is the position when the Minister takes no action ? In the report of 1941 the Auditor-General said: “My previous report drew attention to the unsatisfactory state of Army stores accounting, and I am unable to report that there has been any considerable improvement in the position.” And that position has persisted ever since. Two years ago the Army authorities couldhiot satisfy Audit “that all stores purchased and not remaining on hand have been applied to military purposes,” and if, as the Minister of Finance told the House, there is little evidence of theft and defalcations, what explanation is there of the disparity between stocks and stock records? The matter cannot be satisfactorily adjusted by an extension- of a practice mentioned in the Auditor-General's report of 1941. Officers were detailed to visit certain stores and give advice to the staffs. In addition they “adjusted ledger balances to stocks on hand and so have given accounting officers a fresh start.” Two years have passed, and the latest report, referring to Air Force stores, says: “Inspections of the two main stores disclosed that the ledger cards were in a state of muddlement.” In many cases stations were instructed to make complete stocktakings, “and it is probable that the amount required to be written off charge as deficiencies in stock will reach a large sum.” The position was such that the department made a request “to have all past records wiped out and a fresh start made with opening balances of actual stocks on hand.” That is the process, where stocks and records differ, of adjusting the books to make them correspond with the stocks, writing off the balance unaccounted for as deficiencies. Just how far the Air Force stores accounting has fallen short of the minimum requirements is shown by the Auditor-General’s statement that “many accounts show more stock issued than is recorded as having been received,” and in many instances “this result was shown when large quantities of the relative line were actually in store.” The position disclosed is amazing. The Public Works Department, in order to reduce delay, bought, for supply to contractors, bulk supplies of certain materials. The expenditure was to be recovered by deductions from payments due to the respective contractors. “But (the report says) it now appears that in one district adequate records of deliveries were not maintained, and that complete recoupment may not be possible.” There is what is known as the Defence Purchase Division, but the Auditor-General last year drew attention to the fact that the Army had taken the purchase of mechanical transport stores into its own handstand he has now commented: “Thus a main purpose of the Division, the co-ordination of the purchase of stores, is not fulfilled.” The Minister of Finance has expressed surprise that “there had not been even greater discrepancies,” but he cannot have the slightest idea of what the discrepancies are for the Auditor-General, in a report relating to the vast quantity of stores that had been handled during the year, remarked that “in numerous instances ledger balances bear little relation to actual stocks.” That is the real position