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are better than the average for the 14 years 1900-01 to 1913-14,
2. Grants in aid: indication to be given when repayable.-Q. 3723-25. Qs. 4030-34. Your Committee observe that in certan cases provision is made in the estimates (e.g., in the Vote for Colonial Services) for Grants in Aid which are to be repayable on conditions specified in the Estimate. It would be convenient if in the appropriation accounts any such repayable Grants in Aid were separately distinguished.
3. Form of Abstract Account. Uniformity desirable for Q. 5712. Fighting Services.-Your Committee would ask the Treasury to consider in conjunction with the Service Departments whether the Abstract Appropriation Accounts of the Navy on the one hand and of the Army and the Air Force on the other should not be drawn in the same form. Whatever form is adopted should make it possible readily to distinguish between a net deficit on the Account which requires to be made good by an excess. Vote and deficiencies of receipts on individual votes which fall to be dealt with under Section 4 of the Appropriation Act.
PARTICULAR ACCOUNTS-CIVIL SERVICES AND
4. Labour-saving appliances: extended use.-Your Committee Qs. 4980-86 are informed that the use of labour-saving appliances in the public service is being developed, and that their capital cost will be more than covered by savings in working. In the Qs. 304-6. particular case of the Savings Bank they are informed that the introduction of machines for ledger posting will effect substantial economies.
PRISONS-ENGLAND AND WALES.
5. Misappropriation of Prisoners' Moneys: Defective system. The account records a loss of £650 15s. owing to the misappropriQs. 2388-91 ation of prisoners' moneys at Wormwood Scrubbs Prison by an Para. 4 of established officer.
C. & A. G.'s
The defalcations were facilitated by the circumstance that the Report. officer at that particular prison had been allowed, in contravention of the general rule, not only to keep the record of the prisoners' moneys, but also in effect to authorise the payment of these
Qs. 2767-75 and
Para. 26 of
C. & A. G.'s
Qs. 1111-81, 4521-4739
Para. 30 of
C. & A. G.'s
moneys to the prisoners on their discharge and to make the payments. The defalcations extended over four years, during which two audits were conducted at the Prison by the Commissioners; they escaped detection on the first occasion but were discovered on the second.
Following the recommendations of a Court of Enquiry the rule has been reaffirmed throughout the Prison Service that money shall not be paid out to prisoners by the officer who keeps the books and authorises payments; an improved check by the Governors and the Stewards has been instituted, and the Headquarters' inspection has been increased so as to cover all prisons each year. Your Committee trust that these measures will prove effective for the future; but they feel bound to comment on the fact that this particular fraud was not discovered for four years.
SCIENTIFIC AND INDUSTRIAL RESEARCH.
6. Grant in Aid Fund.-The attention of Your Committee has been drawn to the existence in connection with this Vote of a special Fund built up out of unsurrendered balances of Grants in Aid and used to meet urgent developments in connection with research. Your Committee are informed that it is a matter of extreme difficulty to estimate in advance expenditure to be incurred on scientific research, as was shown by the fact that in the three years 1919-20-21, out of the provision made in the Vote more than £100,000 fell to be surrendered in each year. For this reason it seemed preferable to the Treasury to confine the provision in the Vote to the minimum sum required to meet each research, and to provide for unexpected contingencies by allowing the Department to draw on the unsurrendered balance of the Grants in Aid which have been voted from time to time for research. The result has been that the surrenders on the Vote have now come down to reasonable dimensions, and the Treasury regard the arrangement made in this particular instance as being in the general interest of economy.
Your Committee, with some misgiving, accept the assurance given to them by the Treasury, and do not suggest that this use of the Grant in Aid Fund should be discontinued. But they think it most important that the Fund should only be used to supplement the Vote for purposes of meeting urgent developments in particular researches, and not as a general Fund to supplement indiscriminately the provision which Parliament has made in the Estimate. Moreover, they would strongly deprecate the extension of this precedent to other Votes.
DIPLOMATIC AND CONSULAR SERVICES.
7. Austro-Hungarian Rolling Stock Commission.-The attention of Your Committee has been called to a question which has arisen as to the liability of Sir Francis Dent, the President of the International Commission formed in 1919 to distribute the
Austro-Hungarian Rolling Stock amongst the Successor States, to reimburse to the Foreign Office out of moneys paid to him by the Successor States certain expenditure amounting to £12,629 shown in the accounts as having been incurred between 1919 and 1922 on the work of that Commission.
The circumstances of the claim and of certain counter-claims by Sir Francis Dent have been fully explained to the Committee Appendices in memoranda appended to this Report which have been supplemented by evidence given by Sir Francis Dent and the Accounting Officer of the Vote for Diplomatic and Consular Services.
The counter-claims made by Sir Francis Dent include claims, to a total sum of approximately £544, relating to attendances on behalf of His Majesty's Government at three conferences. Your Committee have suggested to the Foreign Office that these three counter-claims might be admitted in principle. The main claim of Sir Francis Dent to an abatement from the sum of £12,629 mentioned above involves a much larger amount. This claim is more complicated and is one on which Your Committee have hardly felt in a position to adjudicate. They have suggested that it should be referred without further delay for the determination of an impartial person agreed upon between the parties. They will look forward to hearing at an early date that this long outstanding question has been finally disposed of. Meanwhile, they confine themselves to recording that Sir Francis Dent has agreed in principle that he is liable for some payment and that he has in fact made a payment on account of £6,000.
Para. 33 of
8. Method of application of Balance of Sudan Grant in Aid.-Q. 1197 and Arrangements have been agreed between the Secretary of State C. & A. G.'s and the Sudan Government as regards the application of the Report. available balance of the Sudan Grant in Aid, voted in March, 1925, and the funds in question, hitherto on deposit account under the control of the Foreign Office, have been transferred to the Account of the Sudan Government. The transfer of the whole balance at the present stage is not strictly consistent with the letter of the Estimate voted by Parliament; but Your Committee offer no objection to it, as it is justified on the grounds of practical convenience, and conditions have been laid down which seem fully sufficient to secure that the money is or will be used in accordance with the intentions of Parliament.
MIDDLE EASTERN SERVICES.
Para. 40 of
9. Waiver of Claim against Iraq Government. It is stated Qs. 3964-68 in a note on page 406 of the account that the claim against the and Iraq Government in respect of certain works of public utility C. & A. G.'s taken over from His Majesty's Government valued originally at Report. Rs.94,09,510, and later at Rs.76,09,510, has been waived with the concurrence of the Treasury following the recommendations.
Q. 3556 and
of the Financial Mission appointed by the Secretary of State for the Colonies to enquire into the financial position and prospects of the Iraq Government.
This, so far as Your Committee is aware, was the first formal intimation of this waiver which Parliament received.
Your Committee are of opinion that steps should have been taken to inform Parliament of the decision at the earliest. moment, following the spirit of the arrangement recorded in paragraph 85 of the Report of the Public Accounts Committee, 1923, under which gifts of public property of an unusual nature or exceeding £10,000 in value are brought to the notice of the House of Commons.
10. Fraud by official: lack of supervision.-Your Committee have investigated the circumstances in which sums amounting to £6,605 18s. 9d. were misappropriated by a temporary official during the period 1923 to March, 1926. The officer in question was employed as Assistant Secretary to the Irish Grants Committee, and dealt with advances to, and refunds by, persons. having claims on the Irish Free State Government in respect. of compensation for arrears of rent, etc. The frauds comprised the misappropriation of incoming cheques and of outgoing payable orders, combined with forgery of the signatures of the payees.
The frauds appear to have been facilitated by the procedure adopted in the branch concerned, which allowed this officer not only to arrange for the payment of advances and for their subsequent recovery, but also to handle the relative payable orders. and incoming cheques. As the result of the recommendations of & Committee of Enquiry which was held, the office procedure has now been amended.
Your Committee, while making full allowances for the fact that the staff in the branch consisted of but four persons, cannot but express surprise that more adequate arrangements were not made for separating the financial from the administrative duties.
UNEMPLOYMENT FUND ACCOUNT.
11. Remission of arrears of contribution without statutory authority. Under the terms of the Unemployment Insurance Act employers are bound to contribute in the prescribed manner in respect of insurable employees, and are liable to legal proceedings for neglect. Cases from time to time come to light in which an employer has failed to comply with the terms of the statute over a long period for some reason other than wilful evasion or gross neglect. In such cases there are frequently reasons which make it inexpedient to attempt to collect full arrears, nor is it always possible to ascertain how much the
arrears may be, and the practice has grown up under which
The Ministry of Labour, when challenged by the Comptroller Q. 1991.
Para. 6 of
12. Educational Charities-Liability to Income Tax.-The Qs. 114-142 attention of Your Committee has been drawn to an instruction and issued to Inspectors of Taxes in August, 1926, based upon an C. & A. G.'s announcement made by the Chancellor of the Exchequer in con- Report. nection with what is known as the Brighton College case, during the Debate in the House of Commons on the Finance Bill.
A decision had recently been given by the House of Lords (confirming, as Your Committee understand, the practice of many years) that the profits of certain public schools were liable to assessment to Income Tax. Apprehensions were then expressed that some of the schools in question which had hitherto escaped assessment would, in consequence of this decision, be brought into assessment, not only as regards the future but also as regards arrears. To meet the case of arrears an instruction was issued to the Inspectors of Taxes, in pursuance of the undertaking given in the House of Commons, directing them when raising after 5th July, 1926, for the first time the question of liability in any such case to confine their investigation to the year 1924-25 and subsequent years.
It was explained to Your Committee, in evidence, by the Accounting Officer for the Department of Inland Revenue that the announcement made in the House was not that assessment in past cases would not be made. That rested upon the discretion of the Local Commissioners of Taxes who are alone the authorities to make assessments. The undertaking was merely this, that the energies of the Inspectors of Taxes would not be diverted from their more usual duties into this particular sphere, and he urged that the announcement did not alter the substance of what would occur in the ordinary course of the business of the Inland Revenue Department, nor conflict with the law.
As the House of Commons was informed of the intention of the Chancellor of the Exchequer, and acquiesced in the course