A.—4,

112

the contractors to", the officer or department requiring them, without passing into the store. All such goods are, however, included in the store accounts. The schedules for contracts are nine in number, and the list of articles very numerous. It has been found that a great saving has been affected by extending the contracts to three years. There is no special vote for stores, they are included in the vote for working railways, which is taken in one lump sum for the whole railway expenditure, and is estimated at 52^ per cent, on the estimate of the gross receipts for the year. The head of the branch of service requiring stores requisitions the contractors for them, the requisition stating on its face for what purpose the stores are wanted, and the fund and line against which they are to be charged. These orders on contractors are printed with a different coloured ink for each branch, in order to facilitate reference. The Storekeeper has no power to order goods. If he finds that his stock is falling too low, he prepares a proper order ; but sends it to the head of the branch for which the stock will be required, and gets him to sign it. In practice almost all the goods kept in the store are for the locomotive branch. With the goods the contx'actor sends a voucher in duplicate, stating the articles and their price, together with the original order; and these, after being checked with the goods and corrected, are sent on to the Accountant, who returns one copy of the voucher to the contractor. Prom this latter the contractor makes out his monthly account for payment, which is certified to by the officer by whose order the expenditure was incurred, and is then sent on to the Treasury for payment. The Accountant is held responsible for the goods in the store, but not for those sent direct to the heads of branches; and he is required by the regulations to inspect the stock in the store periodically. There is no independent inspection or audit of the stores in the store, and there does not seem to be any check or control over the heads of branches who are authorized to order goods at their discretion ; and, where any articles are not included in a contract, to procure them from any storekeeper at the usual market price. The orders on the store are usually given verbally by the head of the branch, or some one authorized by him, who signs the Issue-book for the articles he takes away. There are only two books kept in the store, one a Rough Receipt-book in which all articles are entered as received, without values, the other, a similar book for articles issued. The Issue-book is sent up monthly to the Accountant's office, where the issues are posted into the Stock Ledger The Storekeeper in charge of the store has no means of knowing what stock of any article is on hand, except by counting them; nor could any deficiency by pilfering or otherwise be found out until the annual examination of the stock. This is the only store in which so deficient a system is in force. It was the system adopted in the Railway Stores in New Zealand, which has recently been abolished. The stores delivered by the contractors without going into the store are charged at once to the work for which they are ordered, and therefore are practically issued from the store accounts at the same price at which they were purchased. But in goods brought into the store the same difficulty is experienced here as in all other stores, except the Railway Store at Ipswich, namely, that from not keeping articles of the same sort but of different prices distinct, goods bought at one price are practically issued for another. The difficulty is lessened by a regulation which requires the Accountant to average the prices of old and new stock from time to time, and to issue at such average price. But it is clear that the error thus diminished does not vanish, and the difference between the values of the goods bought and issued will not accurately represent the goods in stock, which it is supposed to do. The goods which are taken into store are not charged immediately to any line or branch of service, but to the store account, which is practically a suspense account. When issued they are charged against the line or service on which they