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No. 111. Sib,— Wellington, 21st November, 1903. I have the honour to inform you that, in compliance with the directions given in your! letter No. 1903/1792, on the 31st August last, 1 proceeded to Rarotonga, via Niue, by the schooner " Countess of Ranfurly," which left Auckland on the 11th September, and duly audited the official accounts at both places with the following results: — Niue. The official accounts of this island, which date from the 3rd December, 1901, have been very carefully kept, and all vouchers and other official documents are neatly and systematically filed. Up to the present only a cash-book has been kept, Mr. Maxwell explaining that, as the entries were so few in number, he had not found it necessary to keep any ledger accounts. As, however, there is every prospect of considerable sums being expended in road-works, surveys, and other public works in the near future, I advised Mr. Maxwell to keep ledger accounts. This he has agreed to do as soon as the necessary books can be obtained. I thoroughly checked all the official accounts from the 3rd December, 1901, to the 19th September, 1903, and found them correct in every particular. The credit balances on the last-named date were: — Niue Treasury — £ s. d. In Bank of New Zealand, Auckland (see certificate attached) 748 10 0 In Post-Office Savings-Bank (Account No. 104284, Auckland) 106 12 9 Cash held by Resident Agent ... ... ... ... 816 5 0 £1,671 7 9 Post Office Account — Cash in hand ... ... ... ... ... ... 13 12 9 Stamps unsold ... ... ... ... ... 107 15 6 Postal notes unsold ... ... ... ... ... 38 9 3 £159 17 6 I might mention that the proceeds derived from the sale of Niue postage-stamps at Auckland are paid to the credit of an account in the Post-Office Sayings-Bank. This acount is operated on by the Controller, Savings Bank Department, on behalf of the Resident Agent, for the purpose of paying claims against the Niue Treasury. As there does not appear to be any valid reason why this monej- should be kept in a separate account, I would recommend that the balance be transferred to the credit of the Niue Island Account at the Bank of New Zealand, Auckland, and the Resident Agent directed to pay all future claims by cheque. I would also recommend that, in future, the proceeds derived from the sale of stamps at the post-office, Auckland, be regularly paid to the credit of the Niue Island Account, and a duplicate deposit slip, covered by a memorandum, should be forwarded direct to Mr. Maxwell every time a payment is made. Rarotonga. Upon arrival at Rarotonga, I interviewed Lieut.-Colonel Gudgeon with reference to the purpose of my visit. He informed me that from the time the last audit was made by an officer of the New Zealand Audit Department up to the Ist April, 1902, the accounts had undergone a thorough investigation at the hands of several persons, and that no good would result from a further examination, owing to the fact that many documents and vouchers are not now available. I therefore decided to confine my attention to the period from the Ist April, 1902, to the 6th October, 1903. The accounts covering the latter period have been excellently kept, and all the documents relating thereto have been carefully filed. I examined the accounts of the Cook Islands Treasury, also those of the Government Schooner Department, High Court, and Land Titles Court, and with one exception found everything in order. The exception referred to is the Customs duty levied on claret. I found that for some time past it has been the practice to pass an entry for the full amount of the duty —viz., 6s. per gallon, and afterwards to put in a voucher for a refund of 4s. per gallon, the result being that only 2s. per gallon is collected on all claret imported. The Collector of Customs informed me that the refund of duty was made on the authority and by the direction of the Resident Commissioner. The credit balances were as follows: — Cook Islands Treasury, 6th October, 1903— £ s. d. In Bank of Australasia, Auckland — Fixed deposit at 3 per cent, interest per annum ... 1,000 0 0 Current account (see certificate attached) ... ... 274 16 10 Cash in hand ... ... 532 2 9 Cash lent to Post Office to meet money-order payments ... ... ■•■ ••. 913 0 541 15 9 £1,816 12 7 6—A. 3.

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