AUDITOR-GENERAL’S REPORTS

Greymouth Evening Star, 13 September 1944, Page 7

AUDITOR-GENERAL’S REPORTS

SERVICE STORES.

WELLINGTON, Sept. 12. An improvement in the system of stock-taking in • Navy Department stores has been made during the last year. This is noted by the AuditorGeneral in his report to Parliament, in which he says that the stock position is gradually being brought under control.

Although stock records at Army ordnance and. air stores depots are not all that might be desired, they are in a much better state than formerly. “This is pleasing because with activities declining, it is most important that the records should reveal the true stock position, and thus limit the risk of purchasing more goods than it is desirable to hold when hostilities' cease,” says the report. “Accurate records are essential, also to.the furnishing of information to the War Assets Realisation Board of surplus stocks available for disposal. Up to the present sales of general, commodities and materials have not been numerous, although the services and departments are holding large stocks, and it would appear desirable that disposal should be hastened, first to effect a saving in storage expenses, and second to take advantage of the present favourable market.”

Referring to air force stores, the Auditor-General says that depots are holding excess stocks of goods of general household use available for disposal, and that the department had explained that this excess arose partly through providing for an expansion that did not eventuate. COSTLY LIGHTERS. WELLINGTON, Sept. 12. A remarkable deal in shipping for defence purposes is mentioned by the Auditor-General in his annual report, which was tabled in the House of Representatives to-day. In July, 1942, the Navy requisitioned from a Gisborne firm four dumb lighters for boom defence work, subject to the vessels being slipped and surveyed. After inspection, the lighters were towed from Gisborne to Wellington, but they had not been properly surveyed, and a subsequent investigation showed them to be unfit for the work for which they were intended. One was pronounced to be full of decay and useless. Two were found to be beyond repair, and the fourth was found to be fit, after necessary repairs, for light wUVk only. Accordingly, in January, 1943, the Navy asked that the lighters be returned to their owners, and in May the Marine Department advised the Naval Board that the owners had agreed, under certain conditions, to take back, the vessels. While two of the lighters were being toked back to Gisborne, they broke loose in a storm. One became a total wreck, and the other suffered such damage that the owners refused to take delivery. The two others suffered storm damage in Wellington harbour, and were then unfit for return to Gisborne. The departments concerned, after negotiations with the owners, were obliged to pay £8250 for the vessels.

The Auditor-General says that the Naval Board had expressed the opinion “that the trouble with the light-' ers would have been obviated if the Marine Department had adhered to the usual procedure in these cases. There can be no doubt that had an adequate survey been completed in Gisborne before requisitioning action was taken, the vessels would have remained in possession of their owners.” BUILDERS’ PROFITS. WELLINGTON, September 12. The profits made by builders on the master schedule system of defence contracts are referred to in the annual report of the Auditor-General (Mr. C. G. Collins). Contracts to a total value of more than £15,000,000 were let under this system. The Auditor-Gen-eral recalls that in his previous report he mentioned the desirability of testing the fairness of the prices paid under master schedule contracts by reference to the actual profits earned by contractors as shown by their own records. An examination by the Public Works Department of more than 80 contracts showed that contractors were earning profits far beyond the 5 per cent, on profit-bearing costs contemplated by the master schedule and representations were made that the department would endeavour to recover from contractors sums considered to be in excess of fair and reasonable profits. I In conjunction, with the Federated Builders’ Association of Employers an agreement was reached for the renegotiation of contracts on a voluntary basis. After some delay a contracts adjustment committee was set up to review the accounts of contractors who were agreeable to an adjustment, but so far no determination in respect of any contract had been made by the committee. “In fact,” the Auditor-General says, “the latest information to reach the audit office is that the Federated Builders’ Association has withdrawn its member from the committee, and has suggested that the committee be disbanded.”