B.—l [Pt. ll].

XIII

Though no change has been made in the constitution of the State Advances Office Sinking Fund, the raising of the rate of interest on advances made by the Superintendent appears likely to considerably strengthen the sinking fund by increasing the amount, of profits payable thereto, and will thus to some extent obviate the shortcomings of this fund to which I found it necessary to call attention in my last report. Unauthorized Expenditure. The Audit Office is pleased to note the improvement in the control of expenditure arising as a result of the passing of section 6 of the Finance Act, 1925, which reduced the total amount available as unauthorized expenditure in any year from £500,000 to £250,000. This amendment of the law, supported by the efforts of the Treasury Department, resulted in a reduction of the total of the Unauthorized Expenditure Account for the year ended 31st March, 1926, by £104,579 2s. as compared with the previous financial year. Discharged Soldiers Settlement Account. It was found during last financial year that the form of cash-book used for recording the receipts of the Discharged Soldiers Settlement Account was unsuitable for use in connection with the revenue headings in the statutory accounts kept by the Treasury, though suited to the purposes of the departmental accounts. As a result the headings of revenue shown under the Discharged Soldiers Settlement Account in the Public Accounts were inaccurate, and the amounts shown under the individual headings were in some cases incorrect, though the total receipts were correct. On attention being drawn to the matter the Treasury decided that a new form of cash-book more suitable to the purposes of the Treasury should be adopted. The new form came into use as from the Ist April, 1926, and the transactions to be shown under the Discharged Soldiers Settlement Account for the current year will be under new headings which will more correctly record the nature of the receipts. Section 84 (3), Public Revenues Act, 1910. In accordance with the requirements of subsection (3) of section 84 of the Public Revenues Act, there is annexed to this report a copy of a case, laid before the Attorney-General, relating to a difference of opinion between the Audit Office and the Public Trustee, together with the opinion given by the Attorney-General thereon. Staff and Audit Duties. The staff at the close of the year consisted of 132 officers, as against 129 on the 31st March, 1925. The work imposed upon the Audit Office increases year by year. In addition to the ordinary work of checking and examining departmental receipts and expenditure and the local-body accounts, the additional work thrown on Audit by the examination of stores accounts and the audit of departmental balance-sheets has made an increase of staff inevitable. The staff at present is not sufficient to cope with the increased work, and further appointments will be necessary in the near future. It has only been possible to meet the urgent calls of Government Departments as well as of local bodies by imposing a heavy burden on the staff, and I am pleased to record that the members of the staff have responded in the most satisfactory manner, and that it is thoroughly efficient and zealous in the discharge of its manifold and varying duties. G. F. C. Campbell, Audit Office, 27th July, 1926. Controller and Auditor-General.