THE GLOBE. SATURDAY, JUNE 18. 1881. THE AUDITOR-GENERAL’S REPORT.

Globe, Volume XXIII, Issue 2250, 18 June 1881, Page 2

THE GLOBE. SATURDAY, JUNE 18. 1881. THE AUDITOR-GENERAL’S REPORT.

The report of Mr. J. B. Fitz Gerald, Controller and Auditor-General, “ on the management, accounts and audit of the Public Revenues,” has just been laid before the two Houses of Parliament. It is a voluminous document, consisting of 163 pages, but is not altogether such dry reading as might bo expected. Mr. Fitz Gerald’s well-known literary ability has enabled him to clothe the dry bones of an involved and highly technical subject with some sort of a fleshy covering, and his remarks allude to such a variety of but little known facts that the report will wall repay the time spent on it. His inquiries included the processes which are in uso in each colony with regard to the Receipt, the Appropriation, the Expenditure, the Audit and Accounts of Public Moneys, and also such special subjects as Railways, Stores, Laud Funds, &c. It is with the third of these processes, namely, tho payment of public money, that wo propose to deal. And wo do so with tho more pleasure, because wo observe that Mr. Fitz Gerald quite bears out tho view we have for a long time hold as to the cumbrous nature of the system in vogue in this colony. Payments in New Zealand are made in two ways—first, by cheque from the Paymaster-General or the nearest branch Bank to the payees; secondly, by imprest. Tho latter method is used chiefly in the case of the Railway, Armed Constabulary, and Survey staffs, where the exact amount due on the pay-day is not known at the Treasury. The report informs us that there are five modes in which in the various colonies payments are made to Government creditors. Firstly, by cheque of the Treasury to the payee direct, drawn on tho public account on the nearest Bank to the payee; secondly, by advances to the head of an office or a paymaster of the exact sum to be paid by him to the staff of his office or district; thirdly, by imprest advances i of round sums to an imprestee, to bo accounted for by receipted vouchers or refunds of balances unexpended; fourthly, by cash credits, by which a paymaster is authorised to operate on tho public account by cheques on a branch Bank, or on tho ! Bank at the seat of Government, negotiable at a branch Bank or on tho Treasury directly; fifthly, by cash over tho j counter in the Treasury. It will be r observed that tho first of these systems is the one in general use in New Zealand—that is to say, the creditor is paid by j cheque of the Treasury drawn on the public account on the nearest Bank, the vouchers having been audited before payment. The third system, namely, that of f imprest advances of round sums to an imprestee, is only, as stated above, employed in the Railway, Armed Constabulary, and Survey Departments. For the purpose of making a fair comparison between the five methods mentioned, Mr Fitz Gerald enquires what are tho principal objects that any audit system should aim at, and he comes to the conclusion that they are three in number—First, 3 that payment should be made as promptly as possible after it becomes due; second, that money shall be transmitted to the payee with security, passing through as L few hands as possible; third, that tho payment should be brought to charge in the Treasury books with the greatest , expedition possible. If several systems i, satisfy the last two requirements it is a evident that, of these, the one that most fully satisfies the first is the most desirable. Or, in other words, if several systems give equal security to the payee and f equally provide that payments be brought • smartly to charge on the Treasury books, of these the one that allows payments to t bo made the most promptly is the one - most suited to Now Zealand, and indeed » all countries. Salaries and fixed charges I are, remarks the report, paid with nearly equal punctuality under any system; but i in the case of incidental expenditure, r and especially in the case of contracts, delays in making payment not only - cause great dissatisfaction, but, not [> unfrequently, tend to raise the cost of articles supplied to, or work done for, the Government. Now anyone who has done work for tho Now Zealand Government will, we fancy, back us up in the assertion that promptness of payment is not one of the virtues of the several departments. This, of coarse, is not the fault of tho officers, but of tho system. Where vouchers have first of all to bo sent up to Wellington, and there duly digested, and then to be sent back again, it is evident that much valuable time is lost, and that tho creditor of the t Government suffers proportionately. The ; whole method is cumbrous, and there seems to bo no valid reason why it should • be continued. Mr. Fitz Gerald appears 1 quite to take this view of the case, and 1 states that tho systems in force in Queensland and South Australia are deserving of favourable consideration. He says “ tho system in force in Queensland of cash credits at the Bank in favour of tho officer incurring the expenditure, and in South Australia of cheques or orders on the Treasury drawn by the same officer, is that which, as it appears to me, most fully allows for promptitude of payment, and must, no doubt, be tho most popular. Cheques on tho Treasury given by a responsible officer of the Government would operate, to a groat extent, as a circulating medium, and might pass through many hands before appearing at the Treasury for payment.” Tho Government officer in charge of any department in any district is made aware of the amount he has to spend, and is allowed to make payments through a cash credit at the Bank, or by cheques or orders on tho Treasury. He has no more power than an ordinary imprestee, and would bo not more likely than such imprestee to uso his power for improper purposes. Moreover tho expenditure is brought quite as rapidly to charge in the Treasury' books as under tho Now Zealand system, because tho officer is required to send a daily return to tho Treasury of tho cheques ho issuss, together with tho receipted vouchors. Surely this is a sufficient chock on any man holding a responsible situation under Government, who operates on his own responsibility and with tho full knowledge that his payments will bo carefully examined. Besides, in tho throe large departments mentioned above, namely, the Railway, Armed Constabulary, and Survey departments, tho imprest system is employed, and there seems no valid reason why the officers in those departments should bo more trusted than those in other branches of the public service. Wore the Queensland or South Australian system adopted a uniform system might bo employed in all tho Now Zealand Government departments. The imprest

system is acknowledged to bo a bad one, ■ because it delays the final entry of the expenditure in the public accounts and throws a heavy responsibility on the imprestee. By the arrangement suggested it might be done away with. In concluding his remarks on the subject of the method of payment, Mr. Fitz Gerald says that if the process of paying claims on the Government is to be reconsidered, the value of a prior audit of vouchers must necessarily come in question, and he allows that if the pre-audit ■were abandoned and the system of cheques on the Treasury adopted, •provided the audit were armed with sufficient power to enforce immediate attention to its calls for correction in the vouchers, the control over the details of the expenditure would bo little, if at all, ■weakened.

Into the wider question as to whetho the Queensland or South AustraUai system would do away with the power a present supposed to bo possessed by tin Audit Office of refusing to issue money at all where the payment is contrary to law, we do not propose to enter, simply because the idea that the office has such power is incorrect. As Mr, Fitz Gerald points out, “the Government has the large margin of the unauthorised vote, £IOO,OOO a year to fall back on—practically, indeed, £200,000, because at the end of each financial year a second £IOO,OOO may bo operated on —and the question whether money shall or shall not bo paid, always resolves itself into the question whether the payment shall or shall not bo charged to ‘ unauthorised.’ ” And again, because the SOth section of the Public Revenues Act really abolishes the control of the Audit Office in the very cases in which it might become effective by enacting that the Governor in Council shall settle the matter if any dispute occurs between the Government and the Audit Office. “ If, therefore,” concludes this portion of the report, “ the whole matter is after all to be determined by the Government of the day, of what use, it may well be asked, is the machinery by which a control, based on a pre-audit of payments, is supposed to be maintained ? Or, at all events, is the pre-audit of such importance, and the control such a reality, that its preservation in its present form should bo allowed to stand in the way of any simpler and more expeditious mode of paying the creditors of the Government than that at present in force ?”