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ADVANCES OFFICE SINKING FUND ACCOUNT. Statement of Liabilities and Assets as at 31st Maech, 1936. Liabilities. £ s. d. Assets. £ s. d. Sinking Fund .. .. .. .. 2,249,547 7 7 Contingent liability of Mortgage Corporation Interest earned for the year under section 38 (2) of the Mortgage Corporaended 31st March, 1936— £ s. d. tion of New Zealand Act, 1934-35 .. .. 2,263,608 3 5 Settlers Branch .. .. 11,493 19 0 Workers Branch .. .. 574 5 4 Local Authorities Branch .. 1,992 11 6 14,060 15 10 £2,263,608 3 5 £2,263,608 3 5 Note.—The Advances Office Sinking Fund is held by the following branches : Settlers, £2,088,114 13s. 5d.; Workers, £94,402 9s. 3d.; Local Authorities, £81,091 os. 9d.. Total, £2,263,608 3s. sd. Interest Account for the Year ended 31st March, 1936. Dr. £ s. d. Gr. Interest on investments transferred to Sinking Fund Interest on loans to—■ £ s. d. £ s. d. Account .. .. .. .. .. 14,060 15 10 Settlers .. .. .. 40,124 14 4 Workers .. .. .. 2,271 15 4 Local bodies.. .. .. 5,915 14 10 48,312 4 6 Less overdue and accrued at 31st March, 1936.. .. 34,252 14 4 14,059 10 2 Interest on outstanding payments .. .. 15 8 £14,060 15 10 £14,060 15 10 Note. —Incidental to the apportionment of the Mortgage Corporation stock and contingent liability the local authority debentures held by the Advances Office Sinking Fund were transferred to the Public Debt Sinking Fund in exchange for contingent liability. Portion of these funds amounting to £121,125 os. 5d., which represented investments of the sinking fund of the Local Authorities Branch, has been used for writing off an accumulated loss in that Branch, previously carried forward, although this is not authorized by the present statutes. See also 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 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; (2) the assets of the fund should include local body investments which have been transferred to the Public Debt Sinking Fund Branch without legislative authority.—G. F. C. Campbell, Controller and Auditor-General.

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