UNEXPENDED LOANS

Sun (Auckland), Volume IV, Issue 1009, 27 June 1930, Page 13

UNEXPENDED LOANS

DIVERSION OF MONEY TO GENERAL PURPOSES CITY TREASURER EXPLAINS “Is it true, as stated in the Finance Committee’s report, that the £3,945 m the workers’ dwelling fund on fixed deposit is in fact on fixed deposit; if not. what has become of it and when and on what authority?” This question was asked by Cr. J. R. Lundon at last evening's meeting of tho City Council. It had reference to investigations the councillor had been making in tho treasury office. He took exception to unexpended loan balances being lent on temporary loan to the district fund account for general purposes. In explanation the City Treasurer, Mr. Andrew Messer, reported:—“l regret that through a clerical error the statement showed workers’ dwellings loan as on fixed deposit, instead of deposit at call. The £3.945 was placed on fixed deposit with the Bank of New Zealand for two years ended April 4, 1930. As J was waiting definite instructions from the council as to its disposal, I placed the amount on temporary loan on maturity, where it would be immediately available and at the same* time earning interest. The amount has now been transferred back to the loan account.” Commenting, Cr. Lundon said he had investigated after doubting the accuracy of the periodic report from the treasury. Tho council had been told the £3.945 was on fixed deposit earning 5 per cent., when in fact it was on temporary loan to the district fund since April 4 at 4 per cent. What was the explanation, asked the councillor. He knew the treasurer to be a careful officer who made no mistake. The point Cr. Lundon wished to emphasise was that the money had been taken out without council’s knowledge. TECHNICAL FAULT ONLY Cr. G. W. Hutchison pointed out that Air. Messer was really benefitting the City and was doing no wrong. Instead of the sum in question being employed to earn 5 per cent, it was being used to save the council 7i per cent., which would have to be paid as overdraft if it similar sum were obtained from the bank. The treasurer had merely overlooked a formality required by Statute. As a result of Cr. Lundon's investigation the council was now* losing interest on £3.945. There was statutory authority for what Mr. Messer had done, but he should have notified the Audit Department. Cr. Ellen Melville and Cr. A. J. Entrican paid tribute to the services of the treasurer, who had saved ratepayers thousands. The present flareup was making a mountain out of a mole-hill.