B.—l [Pt. ll]

Where the clothing cards are in order Army has made every endeavour to have the recorded articles collected, but inevitably there are large numbers of instances in each area where uniforms and equipment have not been returned in full. Much time and labour were being expended in the effort to retrieve the outstanding items, and as the cost was proving greater than the value of the recoveries Treasury and Audit agreed that no action would be taken to recover where the articles outstanding were of a less total value than 10s. or were of use for military purposes only. Inspectors have been engaged mostly on the clearing of accounts of units disbanded, and as the personnel concerned have usually been discharged or are overseas difficulty has been experienced in getting full information relating to transactions in question or explanations in regard to what appear to be surpluses and deficiencies. In the circumstances, the net result of many of the inspections has been the production of lists of surpluses and deficiencies on which no action can be taken except to include the latter in applications to write off in compliance with section 3 (3) of the Public Revenues Act, 1926. The Chief Stores Inspector, Army Department, has pointed out the futility of the inspections, and in view of the cost and the unprofitable use of man-power consideration is being given to the question of allowing the accounts to stand uncleared. Camps and Headquarters.—lt was reported in respect of one camp that clothing over a period had been issued in bulk and that ledger entries were not supported by schedules of cards giving details of the issues made. The accounts of two other camps will require much research before the actual position can be ascertained. At Headquarters stores ledger balances and stocks are widely at variance, and the Inspector is not satisfied that adequate steps are being taken to remedy the position. Mechanical Transport Stores.—ln the bulk store depots, which hold very large stocks of spare parts, accessories, and tools, the high standard of accounting reported last year has been maintained. Through shortage of staff the accounts of the two stores controlled by motor companies on behalf of Army have not been examined for a period of two years, but inspection is now in progress. For their services the companies are reimbursed all wages and expenses, including overhead, plus 5 per cent, plus a profit fee of £4,000. It would seem important that as early as possible Army transfer these stores to its own control. The number of vehicles in use by Army is now so greatly reduced that the accounting for and the use of petrol does not give the same cause for concern as hitherto. 3rd Division, N.Z.E.F. —Army Headquarters advised the Audit Office that substantial losses of all types of stores occurred during the period the stores were in transit from New Caledonia to New Zealand. The losses include compasses, binoculars, watches, pistols, " Tommy " guns, and engineering tools. From the preliminary report of a Court of inquiry it would appear that the losses took place at New Caledonia, on ship, and after being landed in New Zealand. The Court has still to complete its inquiry. (o) Air Force Stores Stations.—The accounts of all stations have been examined either by the Chief Inspector of Equipment or by Audit Inspectors. I stated last year that a decided general improvement had been effected in the state of the stores accounts at stations and that if the rate of improvement continued it should be possible for me to report this year that the accounts are satisfactory. Unfortunately, I am unable, so to report, as the accounts at some stations are still not up to the desired standard. As was the case last year, the main weakness lies in stores in. use and not so much in. stocks held in store. - . . \ ;

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