H.—l9c

14

The audit of expenditure incurred in connection with the Expeditionary Force work in Egypt and Europe does not seem so satisfactory. Too long a period is allowed to elapse between the date of expenditure and the date of audit —sometimes as long as six months—so that if anything should need to be queried on the score of fraud or of carelessness, there might be difficulty in following it up after such a lapse of time. We recommend that the Audit Department should have a branch in London to pre-audit and post-audit all expenditure for the Expeditionary Force and on transports, which could be done in conjunction with the work now done there by the Auditor-General's representative in connection with other branches of the Dominion's activities. Striking Figures. The compiling and paying of allotments and separation allowances mean a big work, instance, for the month of March— . £ Warrants, regular payments .. . . .. 49,812 Miscellaneous, camp allotments and allowances . . 5,944 Overseas money-orders . . . . .. . . 452 Post Office Savings-bank payments . . . . . . 5,135 Public Trust . . . . . . . . . . 276 Auckland Savings-bank .. .. .. .. 110 National Provident Fund . . . . . . . . 542 Public Service Superannuation Fund. . . . . . 216 Government Life Insurance . . .. . . . . 332 Total transactions for month . . . . .. 62,288 This total is irrespective of soldiers' pay-warrants for returned men. The errors from typing and other causes, considering the difficulty in connection with staff nowadays, are small, being less than 3 per cent., and these are discovered by the checkers before warrants are posted or payments made. Care is necessitated by the average monthly variations (usually about 5,500) in payments and authorities, arising from alterations abroad, births and deaths, and adjustments, changes of address, casualties, and discharges. Curiously, payment is made for each calendar month, calculated on the varying number of days from twenty-eight to thirty-one. It would obviously be easier and cheaper to pay either for four weeks (twenty-eight days), or one-twelfth of the total annual payment monthly. In either case it would fix an unvarying amount, except in case of adjustment, which would minimize risk of error inevitable in changing the days of the month from thirty-one to twenty-eight, to thirty, and back to thirty-one, as is necessary now. Allotments and allowances for soldiers paid from August, 1914, to the end of February, 1918, amounted to about £7,000,000. The amount paid (included in that sum) for the year ended February, 1918, was £3,355,000. Expenditure in the Districts. Under paragraph 8 of the Regulations for the Administration and Equipment of Camps and Barracks provision is made for the Officer Commanding a District to have power to expend up to £25, but this is hedged around with such safeguards that now the Officer Commanding a District never avails himself of it. Accounts paid in the districts are audited in due course on arrival in Wellington ; but experts agree that it would be better to have a representative of the Government Auditor in each district to pre-audit and post-audit accounts, thus improving the present system of signing vouchers by the Officer Commanding a District, or the Assistant Quartermaster-General, which tends to become perfunctory, and is therefore of little value. Audit at present has nothing to do with seeing that public moneys are economically expended. All it has to see to is that they are expended in accordance with statutory authority, and that proper receipts are obtained. Pre-audit would improve this. The cost of audit of the Defence Department's transactions for last year was £6,870 (maximum), and the expenditure has been in all £39,467,860. The cost, therefore, has been about Is. per cent.