B.—l fPT. 111.

X

I may make special mention of the Mental Hospitals Department, which during the year has been most active in its endeavours to bring all its stores to charge, with the result that plant and materials to the value of over £40,000 have already been brought to charge and will appear as an asset in the next balance-sheets. In the Agriculture Department considerable improvement has been effected in the system for accounting for stores and free issues. In the case of the Education Department satisfactory progress has been made in the stores accounting system. Considerable reduction has also been made in the stocks, which have been reduced from £54,344 in 1922 to £13,000 in 1926. The Mines Department has not yet published its new rules, but preliminary instructions issued by the Department have produced good results. The latest Audit reports show that there has been improvement in connection with the Store Accounts at the coal-mines. With regard to the Prisons Department I have to comment that the departmental instructions issued and action taken throughout the year have been most effective. The Department has now a good system in operation. New rules are in course of preparation in the Post and Telegraph Department. I may say that this Department has had a most difficult task in carrying out Audit and Treasury requirements. The results to date have exceeded Audit expectations. Good progress has been made by the Printing and Stationery Department, and the system introduced leaves little to be desired. As regards the Public Works Department, departmental forms and the internal system of check in connection with stores have been revised, and instructions have been issued which have proved beneficial. The Railways Department Board has requested that the compilation and issue of revised rules be held over until the reorganization of the Department is completed. The State Forest Department has made very good progress. A system of cost accounting is now in operation. In pursuance of the terms of section 65, Public Revenues Act, a surcharge was issued against an officer of the Government in respect of a sum of £17 9s. 6d., representing the value of stores supplied to him from a departmental store. The. amount was duly paid to the Public Account. Motor-cars. During the year a special committee was appointed by the Government to consider the standardization of methods of recording the running and maintenance cost of motor-vehicles. Special forms were drawn up and full instructions were issued. As the system has only been recently introduced, it is too early to form any opinion as to its effectiveness. Hospital Boards. At the Hospital Boards' Association Conference held in Dunedin in February last the following resolution was passed : " The Government Audit inspection should include an examination of the stores records of a Hospital Board." This opens up a very large question —namely, as to whether Audit should exercise the same control over the stores systems of local bodies as it now does over the local bodies' cash. At present the Public Revenues Act gives full authority for the Audit inspection of the balance-sheets and of the local bodies' cash accounts, but there is no direct authority contained in the Act for Audit to inquire into the custody and disposal of local-body stores and property. The above resolution refers to Hospital Boards only, but there is evidence to show that there is at least equal necessity for supervision in the case of other local bodies, including Education Boards. Audit of Accounts of Local Authorities. The work of auditing local bodies' accounts has been continued, and although the arrears are still considerable, they are being gradually overtaken. The irregularities and breaches of the law which have been ascertained are very much on a par with previous years, and I may safely say that in the large majority of cases the failure to comply with the requirements of the law is due to want of knowledge of statutory requirements rather than to any intentional desire to evade the provisions of the legislation. There are certain anomalies now existing which it would be advisable to remove by legislation should a suitable opportunity present itself. For instance, there is an absence of uniformity in respect to the conditions which constitute disqualification of members of the various local authorities. Some local authorities come under the provisions of the Public Contracts and Local Bodies' Contractors Act, 1908, while in the case of counties and certain other local bodies there are specific provisions applicable to each respectively. A difficulty is also experienced in enforcing the provisions of the law with regard to the payment of travelling-expenses of members of local authorities. It would save a great deal of audit work and correspondence if a simple and uniform scale could be laid down which could be made applicable to all local authorities. This question is, I understand, at present receiving the consideration of the Government.