13

8.—20

The Colonial Treasurer does not wish to make any remarks on the matter of the difference of opinion which apparently exists between the Audit Office and the Mines Department. At the same time he cannot refrain from stating that, armed as the Audit Office undoubtedly is with large powers derived from the provisions of the Public Eevenues Acts, it does seem singular that the Controller and Auditor-General should deem it necessary to resort to the certificate already named, as the medium by which he desires to place before the public the fact that he is in conflict with one of the departments of the State. The Colonial Treasurer thinks the better course would have been to bring the matter before him with the view of seeing whether the powers possessed by the Audit Office should not be further extended so as to meet the difficulty which has arisen. Jas. B. Heywood, The Treasury, Wellington, 22nd October, 1897. Secretary to the Treasury.

No. 13. The Treasury. Audit Office, 23rd October, 1897. Now that I observe it to be so much deprecated by the Colonial Treasurer that I should add the reference in question to my certificate, it is equally a matter of regret to me that I am unable to see how to justify a certificate without such addition. If I could understand my duty to leave open to me any course, other than by the addition to the certificate, of securing less unsatisfactorily to the Colonial Treasurer all that I think it essentially my duty to secure, I need hardly say that I would be glad to take such course. The fact, however, is that, whoever may be in fault, or whether any one may be in fault or not, a verification which is thought desirable by the Audit Office has not been effected; and this is a fact on which my report cannot be silent if it is not to be misleading. It is also a fact that the Mines Department has failed to comply with the requisition of the Audit Office to supply the means of such verification. Whether it is possible to effect the verification notwithstanding the failure of the Government is another question. The last paragraph of the Treasury memorandum implies that the mind of the Colonial Treasurer is not clear of doubt whether the powers already possessed by the Audit Office are sufficient to meet the difficulty which has arisen, and the evident care and circumspection with which the memorandum has been written give strength to the implication. It was urged in the Treasury memorandum of the 16th instant that the matter might at least have been referred to the Treasury; and I, in furnishing a copy of a letter in which I had indicated the position generally to the Minister of Mines, replied that I was in doubt whether it would have been right or proper in the Audit Office to appeal to the Treasury. In that doubt lam now confirmed by the assurance that " the Colonial Treasurer does not wish to make any remarks on the matter of the difference," &c. I venture to point out, however, that the last paragraph of the Treasury memorandum, in stating that "the Colonial Treasurer thinks the better course would have been to bring the matter before him," &c, makes the Colonial Treasurer appear to be urging the very proposition of the 16th instant respecting which he " does not wish to make any remarks," &c. That lam unable to understand the paragraph but as tantamount to a repetition of what was urged on the 16th is my apology for these remarks on the point. The " Mines Department " and " one of the departments of the State " are in the present case expressions meaning " the Government." The three expressions are synonymous. The requisition of the Audit Office upon the Mines Department is a requisition upon that department of the State for the administration of which the responsibility lies with the Minister of Mines, whose acts are the acts of the Government, which includes the Colonial Treasurer; and, consequently, " the failure of the Mines Department " is the failure of the Government, and " the conflict of one of the departments of the State with the Audit Office " is the conflict of the Government with the Audit Office. Large as are the powers conferred upon the Audit Office by the provisions of the Public Eevenues Act, those powers do not appear to me—they are not in my judgment—designed to be applied in the case of the refusal or failure of the Government itself to comply with a requisition which the Audit Office makes upon the Government, and with which compliance requires an instruction by the department to its servants to furnish a certain statement. Such is the failure which has happened, and to which I regard it as my unavoidable duty to refer in certifying that I have audited and found correct a Treasury statement or compilation founded upon accounts which require such verification as a compliance with my requisition would have enabled me to effect. The truth is that such an instruction is required to the servants of a department as it is properly in the province of the administration to issue. For example, the Secretary to the Treasury, in addressing the Colonial Treasurer on the 18th December, 1896, respecting the refusal of the Audit Office to sanction the withdrawal of mining deposits without the lawful authority of the depositors, observed as follows : " I regret to notice that certain instructions have apparently been sent to the Eeceivers by the Audit Office. Officers of the Treasury should only be instructed by that department, as it is obvious that if more than one department issues instructions there is likely to arise a clashing of directions and consequent confusion in administration.—Jas. B. Heywood, 18th December, 1896." And the Colonial Treasurer's communication to the Audit Office subsequently was : "I regret the Audit Office should have so little respect for public convenience as to refuse to continue a practice that has gone on for years without a single case of loss occurring. This is a piece of red-tapeism, nothing more nor less. Under what authority has the Audit Office given instructions to Treasury officers ? I consider the action taken unwarranted and discourteous, and one which is bound to cause complications.—E. J. S. 30/12/96."