8.—13.

Government Advances to Settlers Office, Wellington, 19th July, 1902. Memorandum for the Controller and Auditor-General. I am quite willing to adopt your construction of the Investment Account and the Management Account as set out. With regard to the other accounts, which I understand you to say that you are not obliged to audit, I would point out that they are constructed on commercial lines, and form the only possible means of conveying to Parliament and the public a comprehensive and intelligent view of the operations of the office for the past year, and the true position at its close. They are, moreover, in a form in which you have passed them for some years. I hope I shall not be considered unreasonable in asking that they be audited as in the past. I am, however, bound to say that if you are not able to agree I am obliged in this matter to follow the professional advice of the Department's accountant, just as I am, on points of law, that of the Solicitor-General. I say this certainly not by way of attempting to exercise any undue pressure, but simply so that there may be no misunderstanding as to the position I take up. Having met you on every point as to the construction of the statutory accounts, I ask you to meet me as to the commercial accounts necessary to a proper understanding of the operations and position of the Department. lam not clear whether you refuse to recognise the accounts first submitted. If so, permit me to draw attention to section 48 of " The Government Advances to Settlers Act, 1894," which enables the Superintendent to cause to be kept such other accounts as he may think necessary. John McGowan, Superintendent.

The Superintendent. The Audit Office cannot raise any objection if, in addition to accounts prepared under or in accordance with section 50 of the Act, the Superintendent issues for public information such other accounts as he may think necessary to show the financial position of his office. The Audit Office, however, certifies the accounts under section 50, and appears thus to be precluded from certifying the other accounts. A note accordingly has been placed on the accounts first submitted. 22nd July, 1902. J. K. Warburton, C. & A.-G.

Statement of Liabilities and Assets at 31st March, 1902. Liabilities. £ s. d. Assets. £ a. d. 3 per-cent. loan, redeemable Ist April. Investment Account— 1945, "A" .. .. .. 1,500,000 0 0 Advances on mort-3-per-cent. loan, redeemable Ist April, g age .. ~ £3,035,230 0 0 1945, "B" .. .. .. 500,000 0 0 Less repayments 668,530 6 1 3-percent, sundry loans .. .. 646,333 6 8 2,366,699 13 11 Suspense Account .. .. .. 4,044 2 0 Temporary investments, Bank of New Accrued interest payable .. .. 84 5 5 Zealand guaranteed stock .. .. 4,836 17 0 Profit and Loss Account £76,172 11 7 Sinking Fund Investment Account with Less amount written off Public Trustee .. .. .. 95,954 7 5 loan-flotation oharges 30,000 0 0 Assurance Fund Investment Account ■ 46,172 11 7 with Public Trustee .. .. 43,872 9 6 Mortgage instalments receivable—overdue .. .. .. .. 1,617 8 7 Bills receivable .. .. .. 990 11 T Interest receivable—overdue.. .. 7,207 13 5 Interest receivable—accrued .. 25,176 14 1 Cash in hand and in bank .. .. 36,350 8 6 Loan-flotation charges .. .. 113,928 1 8 £2,696,634 5 8 £2,696,634 5 8

Statement of Profit and Loss Account for the Year ending 31st March, 1902. Dr. £ s. d. Cr. £ s . d. To Management Expenses Account .. 5,258 10 0 By Balance at 31st March, 1901 .. 46,720 6 2 Balance, net profits to Interest Account, gross profits .. 34,710 15 5 31st March, 1901 .. £46,720 6 2 Net profits for the year ending 31st March, 1902 .. .. 29,452 5 5 76,172 11 7 £81,431 1 7 £81,431 1 T Amount written off Loan - flotation Balance down .. .. .. 76,172 11 7 Charges Account .. .. .. 30,000 0 0 Balance of net profits carried forward 46,172 11 7 £76,172 11 7 £76,172 1W

'2—B. IS.

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