CLASS II, VOTE 25-contd.

Local Loans Fund Accounts.

24. In paragraph 21 of last year's Report I stated that the Local Loans Fund accounts for 1922-23 had only recently been received in my Department. Those accounts, and the accounts for the year 1923–24, have since been examined and printed as House of Commons Papers Nos. 98 and 185, respectively, of 1925. The accounts relating to the year 1924-25 have not yet been rendered to me for audit.

CLASS II, VOTE 30.-STATIONERY AND PRINTING.
Stock in Hand.

25. The subject of the control over stocks, referred to in paragraph 22 of my last Report, has since been under the consideration of the Treasury, who have approved a scheme for complete stocktaking at contractors' depots (excluding contractors for work under the Representation of the People Act) within a cycle of five years, with the addition of surprise checks from time to time as staff permits.

It has also been decided, inter alia, that an annual revaluation of stocks, both in Stationery Office warehouses and in contractors' depots, at the prices current at the commencement and end of the financial year, shall form a permanent feature of future accounts. The information thus obtained will materially assist in the ascertainment of the actual consumption of stocks.

In raising this subject I had in mind, not only the desirability of stricter control, but also the need that the accounts should be so framed as to facilitate a comparison between the actual consumption of paper and the forecast of consumption which was given, for the first time, in the Estimate for the Vote for Stationery for 1924-25. The comparison between forecast and actual consumption during 1924-25 may be stated as follows:

I have asked for an explanation of this excess of 73,4451., and have inquired (1) whether the Treasury were informed of the excess withdrawals from stock when the Supplementary Estimate was prepared, and (2) whether the stock in hand at 31 March 1925 was above or below the normal reserve.

CLASS II, VOTE 30-contd.

Cinematography.

26. Appropriations in Aid include receipts of 1,1901. 12s. 9d. for royalties, profits, &c., in connexion with the display of official cinematograph films. The Cinematograph Section, comprising a staff of four, was transferred to the Stationery Office from the Imperial War Museum as from 1 April 1924, and expenditure of 1,0821. for salaries is included under subhead A.

The duties of this section comprise advising Government departments on cinematograph matters, the control and storage of official films, and the making of contracts in connexion with the display of films for which Government facilities are provided.

From papers that have been referred to me it appears that the question of the allocation of profits arising out of the display of these films is still under the consideration of the Treasury. In reply to my inquiries whether the accuracy of the receipts had been verified, I have been informed that, pending the decision of the Treasury as to the Vote to which the receipts should be credited, the examination of the relative accounts had been deferred, but that steps were now being taken to verify these receipts.

CLASS II, VOTE 37.-FISHERY BOARD FOR SCOTLAND.

Subhead K.-Marine Superintendence. Grant in Aid.

27. The Grant in Aid for Marine Superintendence was payable to the credit of the Marine Deposit Fund, which has borne the cost of Marine Superintendence since 1899, being financed, in the main, by an annual Grant of 15,000l. from the Local Taxation (Scotland) Account. The Account of the Fund is subject to my audit under Section 3 of the Exchequer and Audit Departments Act, 1921.

From 1 April 1925 the gross cost of Marine Superintendence will be a direct charge on the Vote for the Fishery Board, and the annual grant of 15,000l. referred to above, with other receipts incidental to the service, will be credited to Appropriations in Aid of this Vote.

The Treasury accordingly directed that the Fund should be wound up on 31 March 1925, except for the retention of a balance of 2,500l. as a provision for gratuities on retirement, and that issues from the Grant in Aid provided in 1924-25 should be restricted to the sum necessary, in supplement to the ordinary resources of the Fund, to meet actual expenditure to 31 March 1925. These directions have been carried out, and the sum charged against the Grant in Aid was consequently limited to 12,8071. Os. 1d.

CLASS III, VOTE 5.-PUBLIC TRUSTEE.

Trust Accounts.

28. A test examination of the Public Trustee's Trust Accounts has been carried out in accordance with the Regulations issued under the Public Trustee Statutory Rules. The results of the examination, which were satisfactory, have been reported to the Treasury.

CLASS III, VOTE 6.-COUNTY COURTS.

Appropriations in Aid: Fees payable by suitors, fines, and other receipts: Irregularities at a County Court.

29. The books and records of the Registrars of County Courts are not kept at the chief office in London, and the accounts of the Courts are checked in detail and certified by officers appointed originally by the Treasury under the County Courts Act, 1888, and since 1924 by the Lord Chancellor under the County Courts Act, 1924. In these circumstances the fees, &c., received at County Courts which are brought to account as Appropriations in Aid of this Vote, and amounted for 1924-25 to 839,2601. 7s., have not for many years past been audited by my Department, but have been accepted as correct on quarterly Statements of Account certified by the Registrar of the Court and the Auditor of the County Courts Department. This practice was approved by the Public Accounts Committee in 1895 (Fifth Report, paragraph 36) for the reason that when an audit is conducted by one independent set of auditors on the spot it is not worth the expense to send another set.

Serious irregularities at a County Court, revealed recently by the County Court examination, have led me to consider whether this practice should be continued. When, however, the County Courts Department was transferred to the Lord Chancellor all the arrangements of the Department for accounting and supervision were overhauled, and drastic steps have been taken to improve the system of control in particular, arrangements have been made that the Departmental auditors shall furnish formal audit reports that will be available for inspection by my own officers. In these circumstances I do not suggest any alteration in existing arrangements, but I will keep a close watch on any developments that may arise.

The case referred to above has not been finally dealt with, and the extent of any loss of public funds has not yet been ascertained.

CLASS III, VOTE 7.-POLICE, ENGLAND AND WALES.
Metropolitan Police Fund.

30. In the examination of the accounts of the Metropolitan Police Fund my attention was drawn to a case in which, on the eve of his retirement, the salary of an offcer was readjusted with retrospective effect for three years, and his pension thereby increased.

The officer concerned, who was due to retire at the end of July 1924, would not, in the normal course of events, have been eligible for a pension calculated by reference to his retiring salary, but only for a smaller pension calculated on his average emoluments, owing to the fact that in April 1923, in the course of a reorganization, he had been placed on a personal rate of salary.

There were, however, as I am informed, grounds for holding that public faith had been pledged to the grant of the higher rate of pension, and the Receiver for the Metropolitan Police District proposed, and the

CLASS III, VOTE 7-contd.

Home Office agreed, in July 1924, that the reorganization settlement of 1923 should be amended ex post facto, so as to enable the officer to benefit by the rule that, in cases where an officer has been on a regular incremental scale for three years, his pension may be calculated on his actual emoluments at the date of retirement. The officer was then treated as though he had been placed on such a scale with effect from 1 August 1921; he was paid a sum of 164l. 12s. 3d. purporting to be arrears of salary (on this basis) and bonus thereon, and shortly afterwards was pensioned at the higher rate.

The Treasury, whom I consulted in the matter, inform me that, while not in a position to express an opinion upon the action taken by the Home Office in this case, they fully concur in my view that there is serious objection to the grant to an officer, at or about, the date of retirement, of retrospective increases of salary during the previous three years with the apparent object of increasing the pension to which he is entitled.

CLASS III, VOTE 8.-PRISONS, ENGLAND AND WALES, AND VOTE 15,

PRISONS, SCOTLAND.

Grants to the Central Associations for the aid of Discharged Prisoners. 31. In 1924-25 grants to the Central Associations for the aid of Discharged Prisoners were placed on a new footing, and ceased to be voted as Grants in Aid.

The balances of the Grants in Aid remaining in the hands of the Associations on 31 March 1924, viz. :-35l. 9s. 6d. in England, and 5621. 5s. 7d. in Scotland, were expended during 1924-25 on the services for which the Grants were issued.

CLASS IV, VOTE 1.-BOARD OF EDUCATION.

Outcome of the Vote.

32. The net expenditure for the Board of Education during the year amounted to 40,779,4771., showing a saving of 1,120,5331. upon the Estimate of 41,900,010l.

A comparison of the savings on Estimates during the last five years with those of the five years preceding the war may be of interest.

* Includes, for purposes of comparison, the surplus of ordinary receipts,

payable to the Exchequer.

CLASS IV, VOTE 1-contd.

The Accounting Officer has explained very fully the circumstances leading up to the variations between the Estimate and the expenditure in 1924-25. The chief item of expenditure is under subhead C., Grants for Elementary Education, 31,775,0741. The probable actual expenditure by Local Education Authorities in 1924-25, and the percentages payable thereon by the Board are as follows:

My audit of this expenditure is limited to seeing that the grants are not in excess of the percentage payable on the certified expenditure in the accounts of Local Education Authorities. These accounts, however, are audited by the Ministry of Health.

Subhead D.1.-Grants to Local Education Authorities, Higher Education.

33. The charge under this head includes certain after-allowances of Deficiency Grant on particular classes of expenditure incurred by Local Education Authorities in previous years, but disallowed by the Board when calculating Deficiency Grant for those years.

The classes of expenditure in question were broadly two, viz :—

(1) Maintenance allowances to students to whom the Board were also making such allowances direct;

(2) Grants, in respect of students in training, to institutions which were also assisted by Board's grants.

In the case of (1) Deficiency Grant was withheld on the ground that the Statutory Regulations governing the Board's Maintenance Allowances laid down that grant was not payable on Maintenance Allowances to pupils or students in aid of whose maintenance the Board pay grants under other regulations. In the case of (2) the Substantive Grant Regulations fixed a maximum for the purpose of the Board's grants, and the Treasury ruled that "the existence of that limit cannot be ignored in cases where Deficiency Grant is payable."

In consequence, however, of protests on the part of Local Education Authorities the Board decided, with the concurrence of the Treasury, to remit the disallowances, and the Statutory Regulations were subsequently amended where found necessary, with retrospective effect.

The total of the sum falling to be met from the Board's Vote as the result of these concessions is estimated at some 70,0001.

CLASS IV, VOTE 2.-BRITISH MUSEUM.

Stock of Publications at Bookstall.

34. At the annual stocktaking in February 1925 deficiencies to the value of 1731. were found, and on a further stocktaking in October 1925 the deficiencies had increased to 3201. These facts have, at my request, been submitted to the Treasury, who have the matter under consideration.