LAMENTABLE RECORD OF WASTE.

Otago Witness, Issue 3590, 2 January 1923, Page 22

LAMENTABLE RECORD OF WASTE.

STATE TRADE DOSSES. AUDITOR’S SEVERE CRITICISM. i JTbou Obs Own Cobbespondent 1 LONDON, October 3. Interesting sidelights on some of the results of Government trading are contained in the report of the Controller and AuditorGeneral (Sir M. G. Ramsay), on trading or commercial services conducted by Government De(>artments during the period ended March 31, 1921. issued as a Blue Book. Many departments are dealt with. Two Board of Trade officials cost the taxpayers £250,CC0 as the sequel to paying £4O instead of £3O a box for Chinese bacon and lard. The Comptroller and AuditorGeneral states that this astonishing transaction “is described as an oversight.” The two officials have left the Board of Trade, and the department “is taking steps to recover the excess payment.” Other transactions equally comforting to a nation paying 6s in the pound income tax are described. The trading account for the requisition period August 9, 1919, to Maroh, 1920, shows that £5,709,000 w.as lost on trading in bacon, ham, and lard. “I was informed.” states fbe Auditor-General, ‘‘that the principal causes '. . . were deterioration of quality after importation, heavy charges for protracted storage . . . and Jail in prices.’ A drastic reduction in selling prices, he points out, became imperative in order to effect final clearance of stocks which ‘‘were not only growing in

disfavour, but were in danger of rapid and oomolete deterioration.” The following are some of the more outstanding losses: — Recontrol of bacon, £5,700,000; recontrol of currants, £960,000; Australian moat, £3,000,CC0; Chinese bacon (an oversight), £250,003; cattle food (official's mistake). £143.CC0; cattle food (official’s mistake), £122,000; building materials, £72,000; farm settlements, £94,000. FARM SETLEMENTS. Summaries of the farm and estate accounts of the various faatn settlements for ex-service men under the control of the Ministry of Agriculture indicate that the losses in 1920-21 amounted to £42,789 on the farms and £19,685 on the estates, while the aggregate loss from the commencement of operations to March 31, 1921, was £94,101. Although the cost of administering these settlements in 1920-21 was £1.4,000, only M per cent, of that amount was charged in the accounts. In reply to the Comptroller’s inquiry, the Ministry explained that the reduced amount had been charged in view of the fact that the time spent by headquarters’ officers on preparing replies to Parliamentary questions, on the drafting of the annual report, and on similar duties was of no benefit to the indivdiual settlements. The Treasury, to whom the matter was referred, stated that, they could see no justification for the arbitrary division of expenses adopted by the Ministry, and they regarded it as essentia] that the tull actual expenses of administration of tiic farm settlements should be charged in the Ministry’s trading accounts. These reservations also apply to the Ministry’s demonstration arable dairy farms, where me cost of administering the farms in 1920-2] was £2319, while only £llsO was charged in the farm accounts. ’The farm and estate trading accounts for 1920-21 show losses of

£4£Bl and £1379 respectively, and it appears from the report of a special departmental inquiry into the accounts that these results weije partly due to inefficient management and tack of control. In reply to inquiries the Ministry stated that, in view of the novel character and the difficulties of this work, it was perhaps inevitable that in the earlier stages of the operations certain de •ects of organisation should reveal themselves. They also stated that bot.h the offi cer who was in local charge of the farming and other operations, as well as the farm settlement commissioner, who was generally responsible at headquarters in the period under review, had now left the service of the Ministry, and that the system of administration and financial control of the farm settlements now in operation was, in their opinion, satisfactory, from the standpoint of both efficiency and economy. LACK OF PRECISION. The Treasury has sanctioned the write-off of £143,000, losses incurred on cattle feeding stuffs. The Treasury considers “that the proceedings showed a lamentable lack of precision, for which it is impossible to relieve the officers of the Ministry of Food of responsibility.” A loss of £122,000 on conserved cattle-feeding stuffs is attributed to the failure of the administrative officer to pass on to the consumer the charges incurred in respect of the storage and transport of feeding stuffs. The accounts of the dr.ed fruit section for decontrolled currants show a loss of £862,606 on stocks valued at. £1,849,767. The reasons given for this loss were that the season was wet. that, the packing of the currants in canvas bags allowed them to bo crushed, and that deterioration was aggravated by unavoidable delay in unloading. Of the reserve of £360.476 provided in the balance sheet for bad and doubtful debts, £200,000 is in respect of debts due for Board of Trade frozen meat. MEAT AND BREAD LOSSES. While a profit of £3,000,000 was made on Australasian meat in 1919-20. the trading in this commodity during 1920-21 involved a loss of a corresponding amount. This is stated to be due partly to the low prices actually realised. It appears in this connection that in September. 1920. the whole of the stock of Australasian beef was sold to a conliact-or, who had intended to dispose of a considerable portion of it for the Continental markets. It subsequently became impossible to dispose of it in that way, and large concessions were made in 1921 to the contractor, with Treasury sanction, with the result that the aggregate net amount realised for the stocks was very materially reduced. The accounts include the whole of the loss on account of the Bread Subsidy, which amounted approximately to £162,000,000. This amount is, however, subject to adjustment as the result of the pooling arrangement with the Allies. The balance sheet of various trading accounts in connection with the Ministry of Food showed that assets exceeded the liabilities bv £6.391,365, which was subject to considerable claims outstanding against the department, notably on behalf of American packers. In addition, the frozen meat factory at Las Palmas, which is leased to the Board of Trade, showed a profit of £617,695. MILLERS’ PROFITS. An explanation is given of a loss to the revenue resulting from the manner in which millers’ profits were dealt with under the Flour Mills Order, 1917“ An agreement was entered into between the millers and the Food Controller under which the millers were guaranteed their standard mill profits while any mill profits in excess of that standard were payable to the Food Controller. These excess profits were assessed for excess profits duty, and this duty was paid by the millers, a corresponding-allow-ance being made under the agreement by the Food Controller in ascertaining the amount of excess mill profits payable by them to him. The statutory duty on the profits payable to the Food Controller appeared therefore in effect (although not in law) to be borne by him, inasmuch as it reduced the profits otherwise payable fo him.” Certain millers have since claimed repayment of the duty owing to deficiencies in the non-milling part of their, business. One miller has reclaimed the whole of the excess profits duty paid by him, including the duty on the excess profits to the Food Controller. “The consequence is that the State has received in all a sum which falls short of the aggregate excess of the mill profits made by the controlled millers above the standard guaranteed to them.”