8.-l [PT. ll].

their full salary in the ordinary manner and failing to repay the advances already obtained. I may explain that it has for many years been customary in the High Commissioner's Office to grant advances against salary, and many officers, from the Secretary downwards, have been accustomed to make use of this privilege, though in the case of officers other than those involved in the irregularities, any advances obtained have been repaid out of the salaries when drawn. The granting of such advances would not be permitted in New Zealand, but there has not been the same stringent control in the High Commissioner's Office, and in the opinion of Audit the rule followed in New Zealand should also be applied by the Treasury in the London Office. In justice to the Assistant Audit Officer in London it must be stated that early in the present year he discovered that defalcations had taken place. Though subordinate in status to both the officers responsible for the irregularities, he immediately took the matter up with them and vigorously pressed them to restore the moneys to the account, eventually notifying them that it would be his duty to report the matter to the Secretary to the Treasury on his arrival in London. The Finance Officer then confessed his guilt to the Secretary to the Treasury presumably as a result of this action. Consolidation of Government Loan Authorities. In my report for last year I referred to the desirability of consolidating the various Government loan authorities under each loan account. At present there are several, and in some cases many, loan authorities for the one account, and it seems unnecessary that there should be more than one such authority for each account. ... , . Such a consolidation would effect a considerable economy not only by simplifying and reducing the size of the statements of the Public Debt published in 8.-l [Fart lII] and of the statement of interest published in 8.-l [Part ll], but, also by reducing the number and complexity of the accounting entries, and thereby greatly lessening the clerical work both of the Treasury and Audit Departments. In view of the desirability of effecting every possible economy at the present time, I would again suggest that steps be taken to effect such a consolidation. _ _ With a view to indicating the reduction in the size of the debt accounts which would immediately be effected by consolidation, a statement is appended showing the loans relating to the Public Works Fund—General Purposes Account, as they would appear if consolidated by a Consolidation Act. This statement covers the loans shown under Public Works Fund, General Purposes Account in 8.-l [Part lII], 1931-32, pages 21 to 29. It will be seen that the entries of the loans which now occupy eight pages w r ould if consolidated occupy less then three pages. If consolidation were effected the way would be opened to a further considerable reduction by suitably arranging the maturity dates in such a way as to reduce the number of entries. I have taken the General Purposes Account as an example, but the same arguments will apply to all other loan accounts as well. In effecting any consolidation of loans it would be necessary, in the interests of correct accounting, to maintain the distinction between the loans raised for the purpose of different accounts.

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