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LOCAL AUTHORITIES BRANCH. Statement of Liabilities and Assets as at 31st March, 1936. Liabilities. £ s. d. Assets. £ s. d. Sundry loans .. .. .. .. 2,778,690 15 7 Mortgage Corporation Reserve Contribution Loan moneys: Unexpended balance under Account .. .. .. .. 2,750,443 5 5 section 72, Local Bodies' Loans Act, 1913 .. 3,987 12 10 Loan Charges Account .. .. .. 23,530 22 Temporary loan from Public Debt Sinking Fund 449 11 0 Amount due by Mortgage Corporation pursuant Sundry creditors for management expenses .. 655 3 2 to section 35 of the Mortgage Corporation of Premium on conversion .. .. .. 432 15 10 New Zealand Act, 1934-35, but not paid at Interest on loans accrued but not due .. 11,580 15 7 31st March, 1936 .. .. .. 6,821 2 0 Sinking Fund .. .. .. 81,091 0 9 Interest paid in advance .. .. .. 14,053 7 2 Profit and Loss Account . . . . .. 948 17 3 Sinking Fund Investments held by Advances Office Sinking Fund .. .. .. 81,091 0 9 £2,876,887 14 9 £2,876,887 14 9 Profit and Loss Account for the Year ended 31st March, 1936. Dr. £ s. d. Gr. £ s. d. Management Expenses Account .. .. 1,073 3 1 Income-tax Reserve Account .. .. .. 2,104 4 7 Loan-flotation charges written down .. .. 1,116 10 4 Balance: Loss for the year .. .. .. 948 17 3 Balance: Interest Account .. .. .. 863 8 5 £3,053 1 10 £3,053 1 10 Interest Account for the Year ended 31st March, 1936. Dr. £ s. d. £ s. d. Cr. £ s. d. £ s. d. Interest on.loans .. .. 102,722 0 8 Interest on debentures .. 31,142 22 Less accrued at 31st March, 1935 11,580 15 7 Accrued interest taken over by 91,141 5 1 Mortgage Corporation .. 21,624 12 3 Interest on loans accrued but not due .. 11,580 15 7 , 52,766 14 5 Less overdue and accrued at 31st March, 1935.. .. 32,729 4 2 20,037 10 3 Interest payable in accordance with section 35 of the Mortgage Corporation of New Zealand Act, 193f-35 .. .. .. .. 81,821 2 0 Balance transferred to Profit and Loss Account .. 863 8 5 £102,722 0 8 £102,722 0 8 Management Expenses Account for the Year ended 31st March, 1936. Dr. £ s. d. Gr. £ s . d. Audit Office services .. .. .. .. 30 0 0 Payment for forms .. .. .. .. 60 0 0 Cleaning, lighting, heating, and messenger services 20 0 0 Balance transferred to Profit and Loss Account .. 1,073 3 1 Management charges : New Zealand stock and bonds 446 17 8 Postages and telegrams .. .. .. 25 0 0 Post Office services .. .. .. .. 30 0 0 Printing and stationery .. .. .. 35 0 0 Public Service Superannuation Fund contribution 15 0 0 Rent .. .. .. .. .. 40 0 0 Salaries .. .. .. .. 491 5 5 £1,133 3 1 £1,133 3 1 Note. —See departmental note on Advances to Settlers Branch Accounts. 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 Reserve Contribution Account which represents the capital moneys secured by local body debentures transferred to the Corporation should not appear in the Balance-sheet as an investment of the Superintendent as it is not the property of the Superintendent. In terms of the legislation the Corporation is required to pay to Public Account interest on these moneys which form part of the General Reserve Fund of the Corporation ; (3) the Profit and Loss Account is overstated to the extent of the interest payable on the amount of the debentures so transferred in accordance with section 35 of the Mortgage Corporation of New Zealand Act, 1934-35. The interest payable is required to be paid to Public Account and not the State Advances Account; (4) accumulated losses amounting to £121,125 os. sd. have been written off against the Sinking Fund contrary to the purpose for which that Fund was established. —G. F. C. Campbell, Controller and Auditor-General.

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