8.—13.

ADVANCES TO SETTLERS BRANCH —continued. Management Expenses Account fob the Year ended 31st March, 1936. Dr. £ s. d. Or. £ s. d. Advertising, newspapers, &c. .. .. .. 5 2 7 Consent fees .. .. .. .. 16 16 9 Audit services .. .. ■ • • • 200 0 0 Cost of preparation of mortgages .. .. 81 9 0 Cartage .. .. .. • • • • 810 10 Production fees .. .. .. . . 192 4 9 Cleaning, lighting, heating, and messenger services 104 6 7 Release fees .. .. .. .. .. 146 0 0 Commission .. .. .. ■ ■ • • 208 15 5 Sundry fees .. .. .. .. .. 12 17 2 Employers' liability insurance , . .. .. 4 6 9 Refund of premium on fidelity guarantee bonds .. 35 16 4 Management charges on New Zealand stock and Balance transferred to Profit and Loss Account .. 18,648 18 0 bonds .. .. •• •• •• 3,790 19 2 Meal allowances and overtime .. .. .. 1,7011711 Motor maintenance .. •. • ■ • • 164 10 9 Office maintenance .. .. . • • • 81 610 Postages and telegrams .. •. • • 218 9 2 Post Office services .. .. • • • • 424 15 9 Printing and stationery .. . • • • 227 9 0 Public Service Superannuation Fund contribution 90 9 4 Rent .. .. • ■ ■ • • • 578 10 4 Salaries .. .. • • • • • • 8,332 1 9 Solicitors costs and Court costs .. .. 861 1 10 Telephones .. .. •. ■ ■ • • 69 10 4 Travelling-expenses .. .. .. . • 84 7 2 Typewriters and adding-maehines .. .. 71 8 3 Exchange on remittances .. .. .. 68 13 1 Valuation Department: Agency work .. .. 1,837 9 2 £19,134 2 0 £19,134 2 0 Departmental Note. —In terms of the Mortgage Corporation of New Zealand Act, 1934-35, all mortgages and certain local body investments formerly shown as assets of various branches of the State Advances Office were transferred to the Mortgage Corporation of New Zealand and, in consideration therefor, stock for a certain proportion was issued to the Minister of Finance and the balance shown as a contingent liability of the Corporation. The stock has been allocated to the various branches having regard to the purpose of the several accounts and the nature of the liabilities. These assets which have replaced the mortgages previously held are not legally vested in the Superintendent, but they have been included in the State Advances Office balance-sheets in order to show the financial results of the year's operations. Interest on this stock, together with the proportion of profits payable to the Crown under the Mortgage Corporation of New Zealand Act, 1934-35, is paid to the Public Account where these moneys have been applied in payment of the interest due on the loan-capital held by the various branches of the State Advances Office. These amounts have therefore been reflected in the accounts as presented above. Further legislation will be necessary before the accounts can be finally adjusted. Geo. G. Rose, Superintendent. F. R. Jamieson, Accountant. I hereby certify that the Balance-sheet and accompanying accounts have been duly examined and compared with the books and documents submitted for audit, and correctly state the position as disclosed thereby, subject to the departmental notes enfaced thereon and to the following exceptions : (1) The amount of exchange paid in respect of the interest which has been paid in London on the loans of this account has not been charged to the account, but has been borne by the Consolidated Fund ; (2) the Mortgage Corporation stock should not appear in the Balance-sheet as an investment of the Superintendent. It is vested in the Minister of Finance to whom the stock was issued in exchange for mortgage securities transferred to the Corporation in terms of the Mortgage Corporation of New Zealand Act, 1934-35 ; (3) Contingent Liability of the Mortgage Corporation should not appear among the assets of the Superintendent, as it is not the property of the Superintendent. In terms of the legislation, so long as this liability exists, the surplus profits of the Corporation are payable to the Public Account and not to the State Advances Account; (4) the Profit and Loss Account is overstated to the extent of the interest on the Corporation stock and of the profits of the Corporation which have been paid to the Public Account in accordance with the statute. —G. F. C. Campbell, Controller and Auditor-General.

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