B.—l [Pt. ll].

Schedule C. Blenheim Borough Council .. Borrowing of moneys after expiration of period stipulated by the Order in Council consenting to the raising of the loan. Buller County Council .. .. Raising loan on terms other than those authorized by the Order in Council consenting to the raising of the loan. Hauraki Plains County Council .. Issue of debentures after expiration of period stipulated by the Order in Council consenting to the raising of the loan. Invercargill City Council .. .. Council engaged in vegetable growing. Kaikoura County Council .. .. Unlawful expenditure of loan moneys. Mt. Roskill Road Board .. .. " Unauthorized " expenditure exceeded by £25 15s. Bd. Napier Harbour Board .. .. Personal receipts not obtained from certain employees for wages paid through an agency. Nelson City Council .. .. Issue of debentures after expiration of period stipulated by the Order in Council consenting to the raising of the loan. Newmarket Borough Council .. " Unauthorized " expenditure exceeded by £81 18s. lOd. Oamaru Borough Council .. . . " Unauthorized " expenditure exceeded by £4 12s. lOd. Patea Borough Council .. .. Council sold land which it had only power to lease. Surcharges. Section 69 of the Public Revenues Act, 1926, provides that the Controller and Auditor-General, shall surcharge the person responsible wherever it appears to the Audit Office that public moneys or stores have been lost through the default, neglect, fraud, or error of any servant of the Crown. In the past year it was found necessary to surcharge ten officers, seven of the surcharges being in respect of damage sustained in accidents involving Government motor-cars or trucks. Any person surcharged has the right to appeal to the Minister of Finance under section 71 of the Public Revenues Act, and the Minister may thereupon confirm or waive the surcharge as lie thinks fit. Each of the surcharges issued during the year was made the subject of an appeal, and all were waived with the exception of one, which was confirmed to the extent of £l as a nominal penalty. The appended table summarizes the surcharges issued and the results of the appeals : —

Statement of Irregularities in connection with Public Moneys and Stores. The following comments and the statement which follows them are furnished in terms of section 89 (2) (c) and (e) of the Public Revenues Act 1926 : — Although there has been a decrease in the number of defalcations by departmental officers, the total loss of public moneys and stores under this head shows an increase over the figures published in my previous report. The largest loss occurred in a district office of the Public Works Department and was made possible because certain workmen who were employed in an isolated locality arranged with a departmental officer that he should act as an unofficial banker for varying portions of the wages due to them. Moneys held for these workmen were misappropriated to a total of £1,068, and the officer used £593 of official imprest moneys towards making good the shortage. In view of the trust which had been placed by the workmen in a public official, the Government decided to make good the balance of the loss which would otherwise have fallen on the workmen, and the necessary sum of £475 was provided from public moneys as a charge against " unauthorized."

XVI

Upon Appeal. _ Number of Tnfnl Department. Surcharges. — T ° tal - Confirmed. Waived. £ s. d. £ s. d. £ s. d. Health. .. .. ■ ■ 1 • • 35 8 8 35 8 8 Housing .. .. •• 1 •• 3 5 0 3 5 0 Lands and Survey .. .. 2 . . 9 13 2 9 13 2 Marine 1 ■ • 19 15 6 19 15 6 Public, Works .. .. .. I 1 0 0 195 6 7 196 6 7 Treasury .. .. 1 ■• l05 8 9 105 8 9 10 10 0 368 17 8 369 17 8