15. —1 [Pt. ll]

MINISTRY OF SUPPLY STORES The Munitions Branch, of the Ministry of Supply has found it necessary to purchase large quantities of materials in bulk, mainly from overseas, to enable contractors to produce munitions on order. When an Audit officer recently visited the store for the purpose of making an examination of the stores records it was found that storage space was seriously overtaxed and that certain materials for which space under cover could not be found were running a risk of deterioration through exposure to the weather. The examination of the stores records Las not yet been completed. The Textile and Radio Sections of the Ministry were also visited, but a satisfactory examination of the stores accounting records could not be made as the work was in arrears. The Audit Office is assured that strenuous efforts are being made to bring the work up to date, and the Department hopes to have records ready for audit in the course of a few weeks. COMMERCIAL FIRMS AS AGENT FOR GOVERNMENT STORES An innovation during the year was the appointment of commercial firms as the Government's agent for the receipt, custody, and distribution of certain stores. It was anticipated that the firms, having had long experience of the particular class of stores to be handled, would be able to provide better service than Departments without such special experience, but in two cases which have come under Audit review the arrangement appears to have been unduly costly. MONEY OR STORES WRITTEN OFF Section 3 (3), Public Revenues Act, 1926 The above section provides that no moneys or stores may be finally written off and discharged from Public Account without the authority of Parliament, and the Treasury Regulations require that before presentation of relative items to Parliament the concurrence of the Audit Office and the Treasury shall have been obtained. A statement of moneys and stores in respect of which Audit concurrence to writing off has been given since last report is shown as to the more important items in the Appendix hereto, page xxii. STAFF POSITION The calls of the Armed Forces on the staff of the Audit Department have been very heavy in comparison with the total number of its officers, and the position has now been reached at which it is my duty to report that the Audit Office is no longer able to perform satisfactorily the whole of its statutory duties. It will of course be understood that apart from the particular matters mentioned in this report, a mass of routine work in connection with auditing the public revenue and expenditure falls to be done by the Audit Office, and can be given attention only according to the staff available to the Department. ROLL OF HONOUR It is with deep regret that I record the death on active service of the undermentioned Audit officers :— Ryan, Plying Officer P. H. .. Killed on air operations, October, 1942. Cook, Warrant Officer A. R. . . Killed on air operations, May, 1943. CONCLUSION Harmonious relations have existed throughout the year between the Audit Department and other Departments of the Public Service, and the staff of the Audit Department has again rendered loyal and efficient service. The Law Officers of the Crown have, as in the past, been most helpful with advice on difficult legal questions. Cyril Gr. Collins, Controller and Auditor-General. Audit Office, Wellington, 29th July, 1943.

XXI