BY DOUBLE ENTRY

Evening Post, Volume CII, Issue 150, 22 December 1921, Page 8

BY DOUBLE ENTRY

GOVERNMENT ACTIVITY

BALANCE-SHEETS PRESENTED

A now dopai'turo in Government 110----counliug, L.hn product-ion of (lupurltnonLiil baluiu'ii-sheots uiiil hliiloiniuil.i ofuucounUt in comniereinl form, linn 'on huvwjil occasions boon rodirrinl Ui l>,y' Mm I'riuio Minister. YiMtlnrduy Mm (Irttt Imtuh of accounts was lulilod in Mip llomiu of Representatives. l(,. <uini'|ii'l«nd thu following : —

Audited Accounts.—Kxti'vuul AlYuim, Government Life Insuriuicn, (jovnnimoiit Accident Insurance, Housing, Knurigum Industry, National Provident Fund, Printing and Stationery, Public Service Superannuation, I Public Trust Office, State \Advances Office, State Cs"al Mines, State Fire Insurance, State Forests, Waihou and Ohinemuri Rivers Improvement. ..

Accounts; not yet Audited.—Audit, Census and Statistics, Crown Law, Customs, Defence, Discharged Soldiers Settlement, Dominion Laboratory, Electoral, Hauraki Plains, Health, High Commissioner, Immigration, Industries and Commercej Internal Affaire (combined), Internal Affairs (Department only), Labour, Land and Income Tax, Marine, Museum, National Provident and Friendly Societies, Nauru and Ocean Islands, Pensions, Post and Telegraph, Public Service Commissioner, Railways, ißangitaiki Land Drainage, Registrar-General, Repatriation, Stamp Duties and Land and Deeds Department, Swamp-land Drainage, Treasury, Valuation, Scenery Preservation. The following balance-sheets were not ready for publication.—Agriculture, Coolstorage Account, Education, Justice, Lands and Survey, Legislative, Mental Hospitals, Mines, Native, Naval Defence, Police, Prisons, Public Works, Tourist, War Expenses.

A note attached by the Secretary to the Treasury (Mr. G. F. C. Campbell) states :—

"While'tHe present method of showing the financial operations of State Depart-^ ments conforms to parliamentary requirements as expressed in the various statutes, it has been considered by the Government that a more accurate expression of these operations would be presented to the public if they were focused into a balance-sheet and revenue account. With this object in view it was decided that Departments should keep their accounts on the double-entry system, the foundation of which was already well laid by the existing Treasury accounting methods. "A true perspective of Departments from a financial standpoint cannot be shown unless proper provision is made for depreciation and interest charges, outstanding revenue and -expenditure, inter-departmental services, etc., and although this fact has long been- recognised by the Treasury it has hitherto been found necessarily imposeible to include any reference to such items in the Statement of Public Accounts, which are purely cash statements showing the amounts actually expended and the revenue actually received within each financial year. "It is hoped that the preparation of an annual balance-sheet by each Department will, besides preserving to the Stats a valuable record of State-owned assets, lead to economical working of State services • and also stimulate a greater public interest in the very important Department of Finance, which really dominates all the many and varied activities of the State. . Great difficulties have been met with in connection with, the valuation of assets and the apportionment of certain items of revenue and nxpenditure. In respect to the former it was necessary to havexall office furniture, fittings, equipment, stores, materials, etc., inventoried, and, together with land and buildings, valued. For this work the co-operation of the Public Works and Valuation1 Departments was sought. Other assets, such as machinery, plant, steamboats, etc., have been valued by the experts of the Departments concerned. All valuations are not yet complete, and it has been necessary in some cases to accept conservative estimates, which will be adjusted during the current year to the correct figures. "In respect to the capital asset* of the Railway and Post and Telegraph Departments, the valuations have been based on the ascertained capital expenditure thereon to the 31st March, 1921.

"Interest has been based on the average rate of interest paid on the Public Debt of New Zealand.

"The introduction of the Treasury Adjustment Account, which appears in the balance-sheets of nearly aU Departments not operating their own banking accounts, was rendered necessary to enable the principles of double-entry bookkeeping to bo adhered, to. It is virtually a cash account, as it ia debited with all receipts actually received, and credited with all payments actually made,- by the Treasury on behalf of State Departments. Transfers from one Department to another are passed through this account, and for the past financial year it has ako formed the medium for WTiting off services which have been taken into Department's accounts but. for which transfers had not been passed. "Considerable difficulties have been experienced by some Department* in drawing up their balance-sheets, and it is not suggested that in all cases the results are as complete as might be desired, but it is anticipated that improvements will be effected in future years. It is also regretted that there are some Departments whose balance-sheets in a commercial form are not yet ready for publication. It will be, of .course, impossible to prepare a general balancesheet for 'the whole service until all the separate Departments come into line."