CONTROL OF FUNDS

Manawatu Standard, Volume LIV, Issue 297, 13 November 1934, Page 9

CONTROL OF FUNDS

THE UNEMPLOYMENT BOARD. REPLY TO CRITICISM. Per Press Association. WELLINGTON, Nov. 11. Replying to criticism levelled against the administration!; of the Unemployment Fund during the debate in Parliament on the Native Commission’s report, the deputy chairman of the Unemployment Board, Mr W. Bromley, said it was hot true to say that expenditure was carried out without any check or control. It was true, however, that weaknesses in control were constantly being detected and rectified, and often higher administration costs wore involved.

It was not a fair criticism, he said, to demand a perfect administration, and, at the same time, attack administration costs that were obviously most reasonably low. Although the present cost of administering the Unemployment Fund in New Zealand was less than 3 per cent, of the fund handled —relatively low when compared with the English administration costs of approximately 8 per cent—it was doubtful whether any phase of the unemployment question had been more severely criticised. Who to-day, liad not heard of the U B 32 form, requiring that applicants for relief had to supply evidence in support of their claims ? What a storm of criticism this form had produced, at intervals. It was not possible to state the number of attempts at fraud which had been detected by the use of that enquiry sheet, but they were very numerous, and many had had their sequel in the Magistrate’s Courts.

“To say that there is no check on the expenditure of the Unemployment Fund, meaning that the Unemployment Board has a free and uncontrolled hand to expend in whatever direction it may choose, is simply not correct and reveals the absence of practical knowledge of the general administration,” said Mr Bromley. “Take, as an example, the building subsidy scheme that has often been criticised, and observe how control over the fund is provided for. The board, having concluded that the problem of unemployment would be assisted by adding stimulus to the building industry in the form of a subsidy, drafts the working details of a proposed scheme. In addition to rules for the scheme’s operation, a statement must be prepared setting out the reason behind the proposal and an estimate of the cost and the anticipated effect on employment. As all expenditure must have the approval of the Minister of Finance a copy of the proposals is forwarded by the chairman of the board to the Minister of Finance. His approval having been, obtained, the copy is then forwarded to the Controller and AuditorGeneral, supported by the board’s minute authorising the scheme to take effect. Any voucher for payment, requiring as it does the approval of the audit, must thus conform with the rules for which approval has been obtained. If it is a loan to a mining company for development work a report in support of the application from the Mines Department must accompany the request for approval forwarded to the Minister of Finance, and the contract for repayment is often drawn up by the department under the control of the Solicitor-General. Payments under scheme 5 and grants to individual prospectors are made through local bodies, and from the local bodies’ own funds. Repayment is contingent upon vouchers establishing to the satisfaction of an audit officer that the expenditure comes, properly within the rules approved by the Minister of Finance, acting on the recommendation of the Unemployment Board.”