H.—330

16

to discover any entry of a payment for reorganization of Defence stores, or for any sum between £70 and £80 in favour of Captain Seddon. In order to make sure that there was no such payment, I examined the Treasury bank ledgers, in which all cheques that are issued on the Public Account Disbursement Account are entered, for cheques issued on the Christehurch branch of the bank from the Ist April, 1903, to the 31st March, 1905, for all amounts between £50 and £90. I then traced from the Despatch Ledgers the names of the payees of all those cheques. Not one of them was for Captain Seddon. 1 reported to the Assistant Secretary that the last examination was conclusive as to any payment between £50 and £90. 24. What is the course of dealing in the Treasury with the claims for payments on account of Imperial war expenditure?— Exactly the same as for other vouchers, except that they are received approved for payment from the Imperial War Branch of the Treasury instead of from the Audit Office.

Tuesday, 29th August, 1905. J. B. Heywood sworn and examined. 1. The Controller and Auditor-General.] What is your name, your official position, and your duties in the Treasury ?—James Barnes Heywood, Secretary to the Treasury, Paymaster-General and Receiver-General, and Imperial Paymaster-General. 2. Bow long have you been in the public service, and how long Secretary to the Treasury? — Since 1871, and Secretary since August, 1890. 3. Does the certificate of the 3rd instant, given by the Assistant Secretary to the Treasury to the Right Hon. the Premier, that there is no record of a payment to Captain Seddon for the organization of Defence stores, embrace the Imperial war expenditure of the Treasury ?—Yes. 4. What is the course followed in the payment of claims against the Imperial War Expenditure Account, so far as that course differs from the treatment of claims against the New Zealand Government?— The examination by the New Zealand Audit Department is dispensed with. 5. Have you authorised the payment of any claim against that account for the reorganization of Defence stores?—l have not. 6. Do you authorise all payments made out of Imperial funds? —1 do. 7. Did any claim for such service come before you?—No such claim has ever come before me. Nor has any such claim been received in the Imperial Pay Office. 8. Could such a claim, nevertheless, have been paid out of an imprest advance?—No such payment has been made out of an imprest advance. 9. Will you explain briefly the Treasury system of dealing with claims for payment of money out of the Public Account? —Vouchers passed by the Audit Office are entered in the Treasury Abstract-book, and are passed into requisition, and then on to the cheque-writers. The cheques and vouchers are compared. The requisition is forwarded to the Audit Office with the bank order to be signed for the total of requisition. After examination in the &udit Office the bank order, having been found to be correct, is returned to the Treasury for transmission to the bank. The cheques are then put under cover to the respective payees. The Abstract-book, of course, contains the name of the payee, and the nature of the services rendered or supplies delivered. The voucher having been numbered, this number is placed in the Abstract-book alongside the particulars of the claim. It is also quoted in the requisition to the Audit Office. The names of the payees and their services or supplies as entered on the abstract are carefully called over to make it a good reference. 10. Now, will you describe the course which was taken by the officers of the Treasury to justify a conclusive certificate on the question whether a voucher for the payment out of the Public Account to a particular person for a particular service has passed through the Treasury?— Search was carefully made by the Treasury officers of all payments made to Captain Seddon, and charged to the vote or votes for Defence services, and to the Imperial War Expenditure Account, and no trace of a payment for the reorganization or organization has been found. The ordinary course would be to search the Abstract-books. In this case, however, besides the Abstract-books, the whole of the vouchers for payments to Captain Seddon were carefully examined. 11. Have you, since Mr. Collins gave the forgoing certificate, satisfied yourself as to its accuracy?— Yes, I have, by personal examination of the vouchers. 12. Why was the certificate not given by you?—l understand there was urgency in preparing the paper for presentation to the House, and I did not get back to my office in time to give tin; certificate. 13. Was the certificate justified, and would it have been given by you if you had been in the office at. the time?—lt would have been given by me if I had been in the office at the time. In my opinion, the certificate of Mr. Collins is the best evidence of the accuracy of the statement made in it, inasmuch as Mr. Collins is and has been for so many years the Accountant to the Treasury, and therefore the most thoroughly reliable officer to give such a certificate. 14. Is the withdrawal of money from the Public Account possible, or can the Public Account be charged with expenditure without the bank order of the Audit Office?—lt can not. J. M. Babington sworn and examined. 15. The Controller and Auditor-General.] What is your full name, military rank, and your position in the Government service of New Zealand? —James Melville Babington, Major-General, commanding Defence Forces of New Zealand. 16. How long have you held that position?— From the sth December, 1901. 17. Is Captain Seddon an officer of those Forces under you?— Yes. 18. Would he perform any military duty unknown to you?— Yes. He is not under my direct orders.