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As to the claim of the Department of Public Works to receive the money from the Department of Working Eailways on account of the delivery back of the property in March last, the Audit Office cannot refuse to pass the claim as a charge against imprest supply. It will, however, be necessary to the transfer of the charge that there should be a vote expressly providing for such transfer, and whatever explanation the departments responsible for the transactions in question may be able to afford to the Audit Office respecting them should now be afforded. J. K. Waebueton, Controller and Auditor-General.

Copy of Papeks. Proposal to make the following Entries in the Public Accounts. Dr. Consolidated Fund— £ s. d. Vote, Eailways ... ... ... £10,696 0 0 2,399 19 0 1,493 2 0 Cr. 14,589 1 0 Public Works Fund— Vote, Additions to open lines ... ... 14,589 1 0

The Controller and Auditor-General. It will be in your recollection that before the Public Accounts for the year ended the 31st March last were closed there were certain transfer vouchers submitted to audit for entries the converse of the above, and that these transfers were of such a character as to necessitate inquiry on the part of the Audit Office to satisfy itself that they represented legitimate transactions to which it should give its assent. I attach hereto temporarily one of these transfer vouchers for £15,000, No. 69381, passed in March last, the entries made upon which were, — Dr. Public Works Fund— £ s. d. Vote, Additions to open lines £10,696 0 0 2,774 0 0 1,530 0 0 Cr. 15,000 0 0 Consolidated Fund— Vote, Eailways ... ... ... ... 15,000 0 0 You will observe that the transfer now proposed to be made would all but completely reverse the above entries. The first item is unaltered ; the second and third appear from the documents to have been intended at first to remain unaltered also, but no doubt for some sufficient reason they have been reduced from £2,774 and £1,530 to £2,399 19s. and £1,493 2s. respectively. You will also observe from the minutes on the voucher that it was not passed without careful consideration, and that the Audit Office relied upon the certificate of the storekeeper that the material had been delivered and received, presumably for the actual requirements of additions to open lines. It would now appear, however, in the light of the present proposal, which is practically to buy back ihe material ostensibly sold by the Working Eailways in March last, that the operation then effected was merely a book entry, the first result of which was to reduce the expenditure charged upon the vote for working railways, and the second to swell the credit balance of the Consolidated Fund at the 31st March, 1898. In the following statement the entries already made and those proposed to be made are placed side by side to show more clearly the position of the matter: — Transactions in March last. Proposed Transaction. Dr. Cr. Public Works Fund— £ s. d. £ s. d. Publio Works Fund— £ s. d. £ s. d. Additions to Open lines— Additions to Open Lines— Addington Store— Christohuroh— Iron plates, Yorkshire 1,000 0 0 Iron plates, Yorkshire 1,000 0 0 Engine throat-plates.. 1,000 0 0 Engine throat-plates.. 1,000 0 0 Boiler-tubes .. 3,800 0 0 Boiler-tubes .. 3,800 0 0 Tires .. .. 2,000 0 0 Tires .. .. 2,000 0 0 Copperplates .. 2,896 0 0 Copperplates .. 2,896 0 0 10,696 0 0 10,696 0 0 Newmarket Store— Auckland Section— Boiler-tubes .. 330 0 0 Boiler-tubes .. 324 0 0 Tires <. .. 1,200 0 0 Tires .. .. 1,169 2 0 * 1,530 0 0 -— 1>493 0 0 iPetone Store— WellingtonTires .. .. 394 0 0 Tires .. .. 378 8 0 Tubes .. .. 2,380 0 0 Tubes .. .. 2,021 11 0 2,774 0 0 2,399 19 0 £15,000 0 0 £14,589 19 0 Cr. "~™™™ Dr. ™^™^^" —~ ■ Consolidated Fund— Consolidated Fund— Vote, Working Railways .. .. £15,000 0 0 Vote, Working Railways .. .. £14,589 19 0

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