NATIVE AFFAIRS DEPARTMENT

Timaru Herald, Volume CXXXVII, Issue 19667, 8 December 1933, Page 2

NATIVE AFFAIRS DEPARTMENT

ADMINISTRATION OF FINANCES

URGENT QUESTION IN THE HOUSE By Telegraph—Press Association WELLINGTON, December 7. The comments of the Controller and Auditor-General in reference to the administration of the finances of the Native Affairs Department were the subject of an urgent question addressed to the Prime Minister by Mr M. J. Savage, Leader of the Opposition, in the House of Representatives this afternoon. Mr Savage asked whether Mr Forbes could state if the comments were based upon proved facts and were a fair representation of those facts; also whether the Prime Minister was aware of additional statements which were being generally made, and which were now public property, in reference to the freely alleged misapplication or misappropriation of funds entrusted to the Native Affairs Department to the effect that at least one prosecution was pending and that several Government auditors, accompanied by a detective, had gone to the Ruatoria district to carry out further investigations, and whether the Prime Minister could inform the House if any funds granted in the form of subsidies, loans or grants from the Unemployment Board for developmental purposes or otherwise to the Native Department, or to any organisation dealing with native affairs, were involved in circumstances which had been the subject of the strictures of the Controller and Auditor-General, or were likely to be involved in the further investigations which it is alleged were taking place. Mr Forbes said that he thought the question could best be answered by quoting a letter he had received to-day from the Controller and Auditor-Gen-eral in reply to an inquiry as to what the latter had done to deal with the position disclosed in the report he had presented to Parliament. The letter was as follows: Auditor-General's Letter.

“In reference to our several conversations on the subject of the improvement of the administration of the Native Department, it may be as well that I should place before you in the briefest manner possible the present position from the audit point of view of the matters we discussed. “Since the commencement of the work of developing native lands and providing unemployment relief for natives, the Audit Office has met with many difficulties in carrying out the audit of the expenditure owing to the want of a proper departmental system and the absence of the necessary records concerning the purchase and distribution of live stock, grass seed and other farming requisites. The administrative duties instead of being centred in responsible departmental officers were to a large extent being exercised by the Native Minister by virtue of the very wide powers vested in him by Parliament under section 522 of the Native Land Act, 1931.

“With the object of removing this objection the Government constituted the Native Land Development Board last session, and more recently has made an important alteration in the administrative staff of the Native Department in Wellington which should lead to better departmental control. It has, however, been ascertained that before the Board could be expected to function properly, the powers conferred on the Minister by section 522 above referred to should be exercised by the board instead of by the Minister. I am now advised that the Government has decided to ask Parliament to amend the Native Land Act in such a manner that these powers will in future be exercised by the board instead of by the Minister. In my opinion these changes will result in better control, more efficient and economical administration and certainly will afford facilities for a more satisfactory audit. Three Auditors at Work. “One of the most urgent matters connected with the administration will be the establishment of a proper stores control system. The question as to whether the present method of investigation by audit Inspectors should proceed, or whether it would be advisable to appoint a Royal Commission or other Independent form of inquiry, was fully discussed at our interview, and this phase of the matter has been carefully considered by the Audit Office. I am of the opinion that the present procedure should continue. I have now three audit inspectors on the East Coast and I am j>repared to send others there if it is found necessary. The audit inspectors nave special training in this class of work and, as you are aware, have ample statutory

authority to enable them to obtain information concerning public moneys from any person or bank or otherwise The Audit Office does not hesitate tc make use of these powers when necessary, and I am of the opinion that with the assistance of the Department as it now is constituted, work "f audit will be much facilitated and w‘ll suffice. Police Assistance. “I may also add that, the Audit Office is receiving much valuable assistance from the Polic- Department in identifying natives and translating the information supplied, etc. If a Royal Commission were set up It would prove very much more costly than 'he audit system, and If it were required to Investigate operations which have been in progress in various parts ot the North Island Its investigations would prove not only expensive but lengthy. “In my annual report to Parliament I have referred to the fact that Irregularities and falsification of documents have been discovered during the audit of the development schemes and c. the distribution of Maori Unemployment funds on the East Coast. Tills matter has been placed in the hands of the police " A Labour member: Why don't you drop the Minister? Mr F. W. Schramm (Lab Auckland East): It is a first class scandal. Mr Speaker: Order, order.