THE AUDIT COMMISSION.

New Zealand Times, Volume XXVII, Issue 5729, 26 October 1905, Page 2

THE AUDIT COMMISSION.

FRESH BEVELOPMENTi JIB JELLICOE WITHDRAWS FROM THE CASE. MU FISHER, M.H.R., TO EXPLAIN HIS POSITION. Their Honors Mr Justice Dcnniston, Mr Justico Edwards, and Mr Justice Cooper,- who hare been appointed as a Royal Commission to inquire into the system which obtains for the auditing of the public accounts, took further evidence yesterday. A WITNESS RECALLED. Frederick Silver, Assistant Defence Storekeeper at Wellington, who had givm evidence on the previous day, was recalled, and his evidence in chief was concluded. In answer to Mr Skerrott, the witness said there had been no transfers of stores from Wellington to Christchurch during the year 1903 to 1904. At Mr Jejlicoe’s request he produced his books. He was cross-examined at some length as to the manner in which the books of the Defence Stores were left. Ho said documents regarding the transfer of stores might bo received from the officer commanding some time before the goods woro put into the Wellington store and the foreman’s receipt given for than:. The books of the office showed all the stores that were in stock, and if no entry wore made in the books a chock would show if there was any discrepancy. There was not a periodical check made; it was only made as it was required. Witness stilted that ho could not say how frequently these checks or stock-takings were made in 1903 or 1904. Tho storeman kept a record of the arms and other materials that were in store. EVIDENCE FOR. THE TREASURY DEPARTMENT.

Robert Joseph Collins, called by Air Skc rrett, stated that be was AssistantSecretary to tho Treasury. Ho had been in tho public service for forty years, and had boon connected with tho Treasury for the last twenty-seven years. This witness described tho inanrer in which vouchors for tho payments of monoy were dealt with in tho Treasury, and tho examinations and checks that were applied to all requisitions for payments. Once a yoar they balanced with the branches, took out a list of unpressnted cheques, their numbers and amounts, and saw that the balances corresponded with the bank’s returns. 1

Mr Justico Edwards: Supposing the teller made a mistake and paid a forged cheque?—Well, the bank would discover it, and if they did not wo would, immediately ; but the bank must discover it. Mr Justice Denniston; Thou, as I understand, you say your system renders a matter of carelessness or, negligence in this way to bo impossible. Is that so?—Yes, it is, your Honor. Tho witness, in reply to Mr Skerrett, went on to explain that after vouchers had passed through tho office, and had been returned from Audit, they were filed and kept on record. A similar course was taken with regard to payments on the Imperial deposit account, with the exception that these renuisitions and payments were not locally audited. Ho had searched the books in connection with tho Defence Department, including the contingent advances for public works and the Imperial deposit account, and all accounts in which it was possible for payment to ho made to Ca!ptain Seddon for the reorganisation of defence stores or for any other duty, and found no trace of anything of tho kind. It was absolutely impossible for any such payment to have been made without any record appearing in the hooks—absolutely impossible. Cross-examined by Mr Jellicoc, witness said he had not the control of the public accounts. * That was iu tho hands of tho Audit Department. In 1903 there were, he thought, a little over a million pounds of Imperial deposits in tho public account of tho colony, and that money could not como out the public account without tho authority of the Audit Department. In fact, no money could conic out without tho authority of what was called a ‘'Governor's warrant," and that was issued on the previous authority of tho Audit Office. The Imperial deposit could only be withdrawn from the public account, by the authority of the Audit Office.

H dollicoe: If £3OO wero paid for “tips" for fail ways and steamers, and that was signed by the authorising or certifying officer, would it be the duty of the Audit Department to see that the computation of tho “lips" was correct?—l should say so—under the act. Well, supposing Die ■ Defence Office sent. np- to the. Audit Office a. claim approved by tho authorising officer for tho price of oats supplied to Die Government, and the,claim wqs passed on the calculation of 4s per bushel say for 40,000 bushels at 4s— and the Audit Office knew that tho market price in Wellington was only 2s, would the Audit Office see that the computation was correct?—That is really a question for the Audit Office, 1 and I think you had better put it to them. When did you first hear that your Minister was going to do away with the audit of these Imperial accounts?— Iliat is not the right term. I should say dispense" with the audit here. Well then, “dispense” with tho audit here?—About the first week in March. There was a congestion of the accounts, and the War Office in England was applied to—— A congestion! What was tho nature of that disease?—A largo number of vouchers had accumulated referring io large sums of money, and that money nas kept out of the Treasury on account of the congestion.

A WORD OF W.AifXIXG. All’ Justice Edwards said it was apparent to tho Commission that this form or examination was a gross waste of time, which sooner or later would have to ho put an end to. They had allowed it to go on thus far for reasons that would bo obvious to everyone. So far as ho was concerned, ho purposed to allow it to continue for that day; but after that day tho Commission would consider what stops should be taken to deal with tho matter. Air Justice Denniston; I entirely concur. Mr Justice Cooper: So do I. Air Jollicoo expressed regret that h© had been understood to bo acting with tho object of wasting the time of the Commission. Ho asked tho witness whether he had said that he had never sent a receipted voucher to tho Audit Office. Tile answer was that this had never been done, and that after the vouchers were received by tho Treasury they were filed away. Air Jeilicoo proposed to ask whether

tho ATar Office had not boon approached with the object of helping someone in this colony to break the law. Mr Skerrett rose in prorest. Mr Justice Edwards said (severely) that the Commissioners might surely he relied upon to discriminate between evidence that was, or was not, relevant to the issue. .Addressing Mr Jellicoe, ho said; “Wo are all of opinion that you have come here deliberately to waste time, and to cloud the issues which, we are hero to consider. Wo have allowed yon to proceed so far in order that there may not be even a pretence that you have not been allowed free rope; but there will come a time when this sort of thing can no longer be allowed to go on Mr Jellicoe: I am not proceeding to do so Mr Justice Edwards; And you may have to be dealt with. Personally, I believe in dealing with persons who do not regard the rulings of tho Court. Mr Jellicoe: I am not disregarding them. Air Justice Dcnnistou: You .deliberately disregarded them from the moment you came into Court, until now. Air Jcllioco: I am sorry your Honor thinks that. Air Justice Edwards: Well, I do not “think” it-—I “know” it. Air Justice Dcnnistou: And so do I. Air Justice Cooper; I think you have deliberately wasted' time on -Monday, yesterday,' and this morning" in asking questions that are quite irrelevant. Air Jellicoe: But your Honors sec tho very difficult task I have before me Their Honors were understood to say that, they did not soo it. Air Jellicoe called for correspondence between tho Audit and Treasury Department in connection with tho dispensation of audit of public accounts. Mr Skerrett undertook that this should he produced. AVitnoss said that after Alarch, 1902, tho Treasury was in tho ha-bit of receiving vouchers from tho Imperial Department, without reference to the Audit Department. If tho claims' were in respect of Imperial services, they came from tho Imperial pay branch. A docifment could ho produced to this Commission authorising Sir Arthur Douglas to certify to vouchers for Iraperial pay. It was customary for all requisitions to pass through witness s hands. Ho passed' them on to the Audit. , , , . „ Witness -was subjected to a long crossexamination upon various points—as to tho procedure in respect of Imperial moneys, rind so on—concerning t- e Audit Department’s system, and tho manner of acting towards vouchers. Me was satisfied no vouchors for Captain Seddon passed through Ins department. Ho knew this because he had examined his abstract book. . Air Jellicoe: Upon tho assumption that your.hooks are correct, yon say that the books in your custody contain no entr; in favour of Captain Seddon i —I say that. Air Jellicoe wanted certain documents produced. , Mu Justice Edwards said that tho point in question had been already ruled upon by tho Court. They could not order 260,000 vouchers of the department to he produced. If necessary, however, steps would be taken to have thorn searched.

Mr Jellicoe (to witness): Would you exclude all possibility of a voucher being sent to the Treasury and being mislaid or lost?—h>o. In what circumstances .could . a voucher disappeaf?—lt might be mislaid, or put in the wrong place. Mr Justice Cooper: Could a voucher disappear without a record of it appearing in the departmental books? — No. Witness, continuing, said that a fraudulent voucher: could not go through tho Treasury. He would not assume a fraud in the Treasury Department because of tho cheek. Supposing that a voucher had passed Christchurch and gone astray, witness would not have found it up here. Mr Jellicoe proceeded to cnossexamino witness upon minute points. Mr Justice Denniston: Wo. had all this yesterday. Mr Justice Edwards: Yes, and we made an intimation. Wo allowed you a free ropo until 4 o’clock to-day. It is now a quarter to four, and you have a quarter of an hour to go. Mr Jellicoe: I don’t want any rope. Mr Justice Denniston: Wo have allowed nothing of this sort. Mr Justice Edwards; Mr Jellicoe has spent the afternoon in flat defiance of our ruling. Mr Justice Denniston: ! may say that tho Court gives no ruling. Mr Jellicoe may go on—until 4 o’clock. Mr Jellicoe: I ask for the production of certain documents. I ask for the postponement of this witness’s examination until those documents are produced. Mr Justice Denniston: We have not stopped you Mr Justice Edwards Except that yon have spent the afternoon, in disobeying tho ruling of the Court that your examination should bo confined to relevant matters of fact. Mr Justice Denniston: Wo have nothing more to say than that you (Mr Jellicoe) will he good enough to proceed with your examination of the witness. Mr Jellicoe:! have to say this Mr Justice • Denniston : Wo do not .wish you to say anything. MR JELLICOE GOES OUT. Mr Jellicoe; I must state Mr Justice Denniston: You must not! You must proceed, of course, on your own lines. Mr Jellicoe: I desire to state that I shall take no further part in these proceedings. Having regard to the course of this inquiry and your Honor’s ruling, I take this course because we feel that no good object can be served by our taking further part in these proceedings. Dr Findlay (jumping 11 P)I ask that Messrs Willis and Fisher be subpoenaed. Mr Justice Edwards: It remains to he seen whether Mr Fisher is responsible for the gross and improper waste of time this Court has been subjected to. and whether or no he has been a •party to an effort to obscure the issue. Tho Court adjourned until 10,30 this .morning.