H. 19c

12

Pre-audit is for such items as purchase of supplies, stores, and equipment ; fitting up, reconditioning, and hire of transports ; claims for hospital maintenance and attendance, dental treatment, &c. ; purchase of ammunition-supplies ; and ration-allowance claims in New Zealand. Pre-audit commenced in October, 1915 ; and prior to that the goods were purchased without going through one central head (now, for instance, the Department of Munitions and Supplies) ; consequently a number of officers were purchasing the same article at different prices. Claims about which there are questions are settled before payment, and better order has been arrived at and large savings effected. It is impossible to say how much the saving would be, but there are credits obtained and savings effected on definite items shown specifically at £4,385. Post-audit is for the pay of the Defence staff, payment of allotments, separation and other allowances, pay of Expeditionary Force, miscellaneous allowances, and travelling-expenses. The usual responsibility attaches to the Government Auditor, as in other branches of the Service, to see that the claims are in proper form, that the computations are correct, that there is due authority for payments, that these are charged against the proper vote or account prescribed by Parliament, and that receipts have been given for any payments by the person legally qualified to give a discharge. The audit is strict, but is not resented by the Defence Department. In point of fact, in answer to clear specific questions we learned that the Minister of Defence has never objected to the Auditor challenging items, but has on several occasions thanked him for directing his attention to matters of expenditure. The AuditorGeneral says, "To some officers an audit query is like a red rag to a bull; and it has actually been set up that professional men should not be subjected to such indignity as to be asked for an explanation as to their dealing with matters of expenditure." The Audit found that generally accounts are paid without delay, and that all discounts possible are thus obtained. We were fortunate that two important witnesses, the Auditor-General and the Secretary to the Treasury, in addition to being distinguished and experienced public servants, are also Colonels in the Military Forces, and we have quoted liberally from their valuable evidence. Both were able to give the most satisfactory assurance that no case of fraud in Defence expenditure had come under their notice. Accounting. The pay accounting of the Defence Force is divided into two branches : — (1.) Ordinary military expenditure under a Director of Financial Services — an Army Major drawing the pay of Lieut.-Colonel. (2.) War expenses, under an officer of the Treasury holding no military rank. He did not ask for it. Had he done so, doubtless he would have been granted it. The Defence Department has to do with soldiers only until they are discharged from military service. After that their maintenance in public hospitals is paid for, but their pay is a matter for the Pensions Department. Payment of Allotments and Pensions, Ac. Allotment and separation allowances are continued to the wife of a deceased soldier for thirteen weeks, if necessary, to allow time for the pension to be fixed and the first payment to be made. Notification of the cessation of allotment and allowances is sent out at the same time as a form of application for pension is forwarded, so there need be no gap between the cessation of payment of allotment and allowances and the first payment of pension. Pensions are paid to disabled soldiers from the date of their discharge, and there should be no hiatus between discharge and the first payment of pension. Until the Pay Branches of the Department had been organized there were sometimes delays in paying men on their return to New Zealand for discharge, and a gap arose between the date their pay ceased and the commencement of their pension. The hiatus was bridged by the Patriotic Associations, which have done great work. Delay arose also through non-arrival of final acquittance rolls from the Staff Paymaster, London, who is dependent on British and other Paymasters