D.—No. 1

40

PAPERS RELATIVE TO THE

Enclosure 1 in No. 19. Copy of a Letter from Dr. Kntgiit to the Hon. E. ~W. Staffobd. Sic — Dunedin, 14th March, 1867. I have the honor to report that I had an interview with the Superintendent on the 12th instant. His Honor informed me that he had received no communication from the General Government respecting the object of my mission. I then handed to His Honor the Colonial Secretary's letter addressed to me as Auditor of Public Accounts, and he informed me that nothing new had been discovered since I concluded my first inquiries. I explained that the " Defalcation " for which a vote of the Provincial Council had been taken was entirely new to me; and I requested his permission to obtain the inspection of such public documents as were necessary for the investigation of the facts connected with that transaction. His Honor at once assented to my request, and pointed out to me the locality of one of the offices. He also undertook to give me immediately an explanatory memorandum on the points more particularly alluded to in the Colonial Secretary's letter of instructions. The next day Mr. Vogel, the Provincial Treasurer, sought an interview with me, and expressed his surprise that information had been obtained from the Treasury without his permission, and that the clerk who had given it would probably be dismissed from the service. I explained that I had obtained permission from the highest Executive officer of the Province to inspect the Public Accounts, and that hitherto I had not been in official communication with the Provincial Treasury, having so far confined my inquiries to the Audit Office. I enclose the Provincial Treasurer's communication dated the 14th instant, with my reply thereto. At the Audit Office I obtained the only information that the Public Accounts will afford. I examined no officer of the Government, and confined my investigation to the inspection of the accounts and to copying entries from public documents in the Audit Office. I have transmitted to the Superintendent a copy of the letter of instructions, but I gather from the tone of the Provincial Treasurer's communication that it is not intended to admit that I am in official communication with the Provincial authorities. I have, &c, Chaiiles Knight, The Hon. E. W. Stafford. Auditor of Public Accounts.

Sub-Enclosure 1 to Enclosure in No. 19. Copy of a Letter from the Provincial Teeastjeee to Dr. Knight. Sic,' — Provincial Treasury, Dunedin, 14th March, 1867. I cannot admit that your explanation of the circumstances under which you obtained access to the Treasury books is satisfactory. • You say that you only placed yourself in official communication with the Provincial Auditor, but, strictly speaking, it does not seem to me you were in official communication with any one, since the Provincial Government have not received from the General Government any letters accrediting you, and in virtue of your own office it does not seem to me you are entitled to enter into official communication with Provincial Governments. In respect to the authority you say you received from the Superintendent, His Honor tells me that he took it for granted your knowledge of official etiquette would lead you to communicate with the head of the department. It does not seem to mo you have any right to instruct or censure the Provincial Auditor, whose duties are strictly defined by Act of the Assembly, and who is in no way subject to your directions. Equally, I cannot understand by what right you placed yourself in communication with the Provincial Banker, and sought to elicit information from that gentleman. If you desired information you should have sought it from the Provincial Government. I need scarcely add the Provincial Government are always willing to supply the General Government with information, as Messrs. Woodward, Spence, and Gisborne, who were lately here can attest. I shall ask the Superintendent to communicate a copy of this letter to the Colonial Secretary. I have, &c, Julius Vogel, Dr. Knight, Auditor-General. Provincial Treasurer.

Enclosure. Copy of a Letter from the Attditoe-Geneeal to the Peovinciai, Teeasueee. Sib,— Dunedin, 14th March, 18G7. I have the honor to acknowledge the receipt of your communication of this morning. You appear clearly to understand that on my personal application to the Superintendent His Honor gave me permission to obtain from the Provincial Offices any information I required respecting the Public Accounts of the Province. In applying to the Provincial Auditor for certain vouchers I was in communication with the head of a department, and so far I did not disappoint the reasonable expectation of the Superintendent to which you allude. In reference to your remarks on my having placed myself in communication with the Bank of New Zealand, where the accounts of both the General and Provincial Governments are kept, I may