PUBLIC ACCOUNTS “JUGGLING” CHARGES

Evening Star, Issue 22192, 21 November 1935, Page 8

PUBLIC ACCOUNTS “JUGGLING” CHARGES

DIVERTING " MARE’S NEST " SAYS MR COATES PUBLIC SERVICE AFFRONTED PALMERSTON NORTH, November 20. “ Diverting as is Mr Hislop’s discovery of a mare’s nest, concerning the Public Accounts,” said Mr Coates this afternoon, “it has none the less a regrettable and indeed a painful feature. If the Government really has been guilty of the deliberate deception and trickery Mr Hislop so confidently attributes to it, members of the Public Service must have been a party to it and acquiesced in it. Fraudulent manipulation of the public accounts would’ not have been possible without the connivance and, indeed, the active assistance of Treasury officials. It is much to be regretted that Mr Hislop, for the sake of a political advantage, should, in effect, have so lightly and negligently , made the gravest accusations against members of the Public Service, a body of men of whose integrity both the Government and the Opposition are equally convinced. The reckless undermining of the people’s confidence in the Public Service for the sake of a temporary party advantage is an innovation in the public life of New Zealand which I feel sure will bo censured by all right-thinking electors, whatever their political adherence may be. “It is to be noted that the Public Accounts Committee comprises members of the Opposition as well as of the Government, and it is significant that no criticism of the kind now under review could have proceeded from the official Opposition, the reason, of course, being that that body well knew the public accounts were above suspicion. In discovering that the public accounts had been fraudulently manipulated, Mr Hislop unearthed as his choice as fine a specimen of ‘ newchum’ gold as had ever delighted the eyes of an amateur prospector, but Mr Hislop ought really to have been more cautious. Even making full allowances for his eagerness to disparage the Government, some instinct ought to have warned him that such a palpable fraud on its part was too good to be true. A moment’s reflection would have taught him that such a splendid find could hardly be reserved for a late beginner. Had'his zeal even been tinctured with prudence, he would have realised that there was something wrong with a point that everyone else, including all the members of the experienced Parliamentary Opposition, had overlooked; but perhaps Mr Hislop was unaware that there was such a body as the Public Accounts Committee comprising members of both sides of the House. On that charitable assumption one could understand Mr Hislop’s assumption of the role of discoverer.” UNWARRANTED REFLECTION EX-TREASURY CHIEF’S STATEMENT [Per United Press Association.] WELLINGTON, November 20. “ The statement is a gross stretch of imagination. It is neither true nor fair and easts an unwarranted reflection on the integrity and capacity of the Public Service,” said the ex-secre-tary to the Treasury, Mr A. D. Park, when referring to-night to the statement bv the leader of the Democrat Party, "Mr T. C. A. Hislop, that “ there has been wholesale bungling and juggling with our public accounts. Mr Park added that his remarks were not connected in any way with the political situation, but that he made his statement merely as an ex-permanent head of the Treasury and as a professional accountant. BASIS OF CHARGES MR HISLOP QUOTES [Per United Press Association.] WELLINGTON, November 20. The leader of the Democrat Party, Mr T. C. A. Hislop, in a statement in reply to the Prime Minister, Mr G. W. Forbes, who criticised Mr Hislop s remarks with reference to the public accounts and the reports of the Audi-tor-General, said: “The Prime Minister charges me with being new to the political game, but I do not see any particular fault in this. If a desire to tell the truth is new, then I must plead guilt} 7 . So far as my capability to read and understand the reports of the Auditor-General is concerned, I do not think it is for Mr Forbes to question this. I have had a long ana extensive business experience, and balance sheets and accounts are the same the world over. The accuracy of the auditor’s reports I have never questioned, and I am surprised at the Prime Minister doing so. So seriously do I regard the whole matter that I propose to give a few typical extracts from the auditor’s reports during the last, four years. Further, my party is pledged to investigate the whole position and clean it up immediately it occupies the Treasury benches. For Mr Forbes’s benefit let mo first quote something that is near at homo to him. Here are the exact remarks of the Au-ditor-general with respect to the Cheviot Estate:— The closing of the separate account has not only made it possible to trace transactions relating to the Cheviot Estate in the statement of the revenue and expenditure of the public accounts, published in Book 1 (parts 1 and 2). but it has also had the effect of rendering the annual revenue account and the balance sheet relating to the Cheviot Estate inaccurate and misleading. “ May I remind the Prime Minister that this change took place, in 1930, when, strangely enough, be was Minister of Finance. Under the heading ‘ Payments Made Without Authority,’ me Auditor-general states : The system followed is contrary to law, and, in the opinion of the Audit Office, is also unsound from an accountancy point of view. The attention of the Treasury was drawn to the matter in October, 1931. and the introduction of a more correct system was suggested, hut no action was taken. The Audit Office has reason to believe that there arc other similar cases in which payments have been made from the Imprest Account, but not brought into the abstract, and for which vouchera have not

been submitted in accordance with section 64 of the Public Revenues Act. “ Regarding the treatment of the exchange in the public accounts the Audi-tor-General says; The cost of or the premium receivable on the exchange has in some cases been added to or deducted from the cost of the goods or services, while in other cases it has been charged or credited to some other head or account, and imyet. other cases has not been brought to account in any way. “In a later statement on exchange the Auditor-General said: The method of treating the exchange in the Public Accounts Jacks uniformity, and in the opinion of the Audit Office is unsatisfactory and in many cases causes the public accounts to be misleading and inaccurate. “ Further, with regard to the exchange we find an outstanding example of deliberate juggling with the accounts. In his statement the AuditorGeneral says: The same asset which was shown in the public accounts as £19,700,000 (approximately) was shown in the first published statement of the assets and liabilities of the Reserve Bank as £24,400,000 (approximately), a difference of, roughly, £4,700,000 due to the erroneous method of treating exchange in the public accounts. “ So that the public may understand the methods used in juggling with the accounts I quote an example shown by the, Auditor-General; —A and B are two sub-accounts within the public accounts. A has £217 cash in hand and B has £1,964,540 cash, the total of both being £1,960,757. B transferred to A £lO,000, which obviously reduced IPs balance by that sum and increased A’s balance correspondingly. In the acgounts as published, however, B’s bale

auce still remains at £1,900,540, w'hilst A’s is increased to £10,217, and the corresponding total of the two subaccounts is shown as having been increased to £1,970,757, whereas in reality no increase took place in the total. This statement speaks for itself. If a public company manipulated its accounts in this manner the promoters would soon find themselves behind bars. That m.v complaints regarding the juggling of the public accounts are well founded is borne out by the AuditorGeneral when he states*

During recent years the changes in the form and clasification of the Eublic accounts of the Dominion ave been so numerous and so frequent that it is almost impossible to obtain a correct comparison of the receipts and expenditure relating to individual services extending over a period of years. “ The Prime Minister can never justify the scandalous position of our public accounts and finances. I want to say to the people of New Zealand that they must place their affairs in the hands of an honest and responsible Ad-

ministration. The present Government has shown itself to be without scruple in its mismanagement and downright political corruption,”