F.—No, 5.

The Chairman laid before the committee papers and returns promised to be supplied by Mr. Rolleston, Under Secretary of the Native Department. The Committee examined the returns furnished from the Native Department, and found that a record of all sums expended under ■' The Native Appropriation Act, 1862," under the head of " Miscellaneous," had been kept at the Native Office. The vouchers covering the " Electoral" expenses, which had been called for on the 6th August, were laid upon the Table. The committee examined certain vouchers covering " Electoral " expenses, more especially in the Provinces of Canterbury and Otago, whereupon it was Resolved —That it is desirable to call the attention of the House to the very heavy expense incurred for advertising and printing electoral rolls, lists of claimants to vote, &c. Native Purposes Appropriation Act, 1862. Mr. Young, clerk in the Native Department, attended to give further information respecting the expenditure under this head. Ho stated that for large sums charged as " Miscellaneous" and " Presents" authority had been obtained previous to expenditure, but in cases where the amounts were small the authority for expenditure was, in most cases, given afterwards. With regard to G-. Law's defalcations, Mr. Young explained that Law was a Civil Commissioner at Taupo, and that advances in money were made to him to pay the salaries of Native assessors and other officers in his district. He sent in to the Government abstracts purporting to [be signed by Natives, but the signatures being thought not to be genuine inquiry was made, and it was discovered, that he had not paid away the moneys. He was then charged with embezzlement before the Resident Magistrate in Auckland, but the case was dismissed. Nevertheless, the Government believing that the money had not been paid to the Natives, Law was dismissed the service. By the Chairman.] Had Mr. Law been required to give security for money advanced ? Ido not think he had. The whole defalcation took place within a period of about seven months. I believe officers in the Native Department are now required by the Treasury to give security. With reference to the charges for " Native purposes "in Provinces in the Middle Island, Mr. Young explained — There is a branch of the Native Department maintained in Nelson principally for the purpose of looking after the Native reserves, and attending to the Natives resident chiefly in Massacre Bay and Motueka. The salaries are principally for a Civil Commissioner and Native Assessors. Of the latter there are three employed. The expenses in Marlborough are incurred for similar reasons. With regard to Canterbury, there is a branch establishment maintained in Christchurch, with an Interpreter, Assessors, and a Medical man. The salaries under the head of Otago arc for an Interpreter and an Assistant. In Southland the expenses are for a Magistrate, a Medical man, and Assessors.

The following written questions, given to Dr. Knight on the 6th of August, with the answers furnished by him, having been given in, were read : — Q. —In your certificate (dated 4th July, 1866), you state that you have examined the receipts and expenditure for the financial year 1864-6. Will you have the goodness to inform the committee by what process this examination has been conducted, and whether or not all vouchers for detailed expenditure have been passed through your office and found to be satisfactory ? A. —The certificate mentioned bears reference to the eighth section of the Audit Act, and to the fifth, sixth, and seventh clauses of the Schedule to that Act. The vouchers have been examined with reference to the requirements mentioned in the parts of the Act above referred to, and I find that the Colonial Treasurer is entitled to his ' quietus' from the House. But the certificate does not entirely cover the transactions of his Sub-Accountants. There may be errors in computations, &c, in some of the vouchers of the Sub-Accountants, and till the whole of these have been satisfactorily adjusted, the Auditor will not issue the ' quietus' required to be given under the fourth clause of the Schedule to the Audit Act, 1858. It is clear that the Legislature did not intend that the statement of the Colonial Treasurer which is now under the examination of the Select Committee of the House should be withheld from the House until every matter in the Sub-Treasury accounts has been satisfactorily adjusted. The Audit Act requires the Treasurer's statement to be laid before the House within ten days after the same shall have been received by the Auditor. The whole of the vouchers for the detailed expenditure at the Colonial Treasury have been passed through my office, the authorities and computations examined, and all objections satisfactorily adjusted. The whole of the Customs vouchers for the revenue collected have aiso been examined and found satisfactory. The vouchers for detailed expenditure at the Sub-Treasuries have been examined with reference to the following points and satisfactorily adjusted : — Ist. Whether or not the expenses have been duly authorized by Ministers ? 2nd. Whether they are within the Estimates or not ? 3rd. If not within the Estimates that the amount in excess of the Estimates has not been charged against the revenues of the year in the Colonial Treasurer's annual statement ? 4th. Whether the Receivers of Eevenue have accounted for their collections ? sth. Whether the balances shown in the accounts of the Sub-Accountants are in the Bank ? It may be mentioned that the vouchers objected to by the' Auditor under inquiry No. 1, and which have been brought under the special notice of the Ministers for their consideration, exceed 4000 in number; and, in reference to the expenditure on account of the Militia, I find that about 6000 queries have been issued on the vouchers for the period subsequent to the month of February, 1864, and the number of surcharges on those queries were above 1500, and the total of the surcharges on those accounts, £896 Is. 2A

11

APPOINTED TO AUDIT THE FINANCE ACCOUNTS.