CONTENTS. Page. Report of the Comptroller and Auditor General iii 3 .. Vote A.-Statement showing the strength of the Royal Air Force .. Paper No. 5.-Details of expenditure for works and buildings .. 46 62 65 Paper No. 6.-Statement showing particulars of land purchased, sold, and transferred Paper No. 7.-Statement of sums which have been written off as balances irrecoverable and claims abandoned .. .. 995 70 Paper No. 8.-Statement of Store Accounts which have been dispensed with REPORT OF THE COMPTROLLER AND AUDITOR GENERAL UPON THE APPROPRIATION ACCOUNT OF THE RECEIPT AND EXPENDITURE FOR AIR SERVICES FOR THE YEAR ENDED 31 MARCH 1925. VOTE A. 1. The statement on page 3 shows that the monthly average strength of the Royal Air Force was, throughout the year, within the numbers voted by Parliament. GENERAL. Comparison of Expenditure with Estimate. 2. The gross expenditure amounted to 19,121,8571. 17s. 7d. as compared with the estimate of 19,742,000l. The total receipts, including 569,9291. Os. 10d. extra receipts in excess of the estimates on Votes 1, 3, 8 and 10, amounted to 5,091,9651. 10s. 9d. as against an estimate of 4,881,000l. There were thus savings of 620,1421. 2s. 5d. on gross expenditure, and receipts of 210,965/. 10s. 9d. in excess of the estimate, making a total amount to be given up of 831,1077. 13s. 2d. (page 7). The following statement compares the results of the last four years. For this purpose the figures for 1924-25 do not include the receipt of 412,000l. for stores issued for Middle Eastern Services but not replaced, as repayment was not provided for in the estimates. It will be seen. that the figures compare favourably with those of previous years. 1921-22. 1922-23. 1923-24. 1924-25. There is a surplus of gross expenditure on each Vote, except Votes 1 and 3, the largest divergence from estimate being on the following: The saving on Vote 2 appears to be due mainly to lower prices for provisions, and to an over-estimate of the movements of personnel and stores. Vote 1 shows a deficit because the anticipated saving on account of probable variations in establishment did not materialize. The surpluses on Votes 4 and 8, and the deficit on Vote 3, are dealt with in subsequent paragraphs. FAILURE TO FULFIL ESTIMATE EXPECTATION IN NEW WORKS. 3. The largest divergence in amount from estimate was on Vote 4, as was the case last year, and the variation is attributed to postponement or revision of certain services, and unforeseen delay in execution; the most noticeable subheads again are B, Major New Works, and F, Purchases of Lands and Buildings. Provision was made for an expenditure of 1,373,500l. on Major New Works, consisting of 87 items. The actual net surplus on these items was 489,0121. 15s. 4d., or 35.6 per cent. of the estimate. Of this saving, 105,2197. 3s. 9d. was used in beginning 13 new services, not estimated for, details of which appear on pages 56-59 (Item Nos. 92-96 and 98–105), and 168/. 10s. 6d. to meet liabilities unexpectedly carried over from the previous year. The final net surplus is thus 383,6251. 1s. 1d., or 27.9 per cent. of the estimate. See Note under Subhead B. 1. on page 23. As shown on page 23, the divergence of 65,7191. 5s. 10d., or 29%, from the estimate on Subhead F is attributed as regards 41,000l. to protracted negotiations, and as to 20,000l. to the abandonment of a proposal to purchase land in Palestine. In the course of my examination, I drew attention to payments for interest on purchase moneys occasioned by protracted negotiations, but I was informed that the Air Ministry were satisfied that no avoidable delay had occurred in effecting the land purchases referred to in my inquiry. In the Air Estimates for 1925-26, an overhead cut of 500,000l. is made on the detailed estimates of Votes 3 and 4 as some provision against failure to fulfil expectations. of 4. On Vote 8, Civil Aviation, the surplus of 152,0441. 19s. 2d., recorded on page 34, also occurs mainly on the Works, Buildings and Lands Subhead, which shows a surplus of 132,2661. 5s. 11d., or 89 per cent. of the grant. This surplus has arisen chiefly in connexion with Croydon Aerodrome, 62,000l. being attributed to the purchase in the previous year land for the extension of the aerodrome, and 57,500l. to delay in the commencement of works owing to difficulties arising out of the diversion of a road, and to a revision of the reconstruction scheme. A further 10,000l. is attributed to the failure to complete purchase of land at Lympne. SPECIAL ADVANCES TO CONTRACTORS. 5. The deficit of 389,8291. 18s. 3d. on Vote 3, shown on page 20, is caused mainly by expenditure of 549,704l. 13s. 7d. in excess of the grant provided under Subhead A for Aeroplanes, Seaplanes, Engines and Spares. The explanation of this excess, given on page 19, is that contract payments, mainly under the increased programme in connexion with the Home Defence Scheme, matured more rapidly than had been anticipated from past experience. It will be seen from the correspondence on page 88 that, in their forecast submitted to the Treasury on 3 March 1925, the Air Ministry anticipated a gross surplus on Vote 3 of 30,000l. The actual outcome is the deficit of 389,8291. 18s. 3d. referred to. From my examination it appeared that this result was due largely to payments, made towards the close of the financial year, of advances to contractors amounting to approximately 268,000l., which were not claimable under the specific conditions of their contracts, and were in no case in respect of matured liabilities. As stated in paragraph 86 of the Report of the Public Accounts Committee, 1923, Departments are allowed, within narrow limits, in what are known technically as "special cases," to make such advances to contractors. The object of this is to avoid the necessity of surrendering, at the end of a financial year, money provided in the estimates for that year and not allowed for in the Vote for the succeeding year. In the present case, however, as there was an excess expenditure on the Vote, I asked the Air Ministry to explain the circumstances in which the advances were made. I was informed that when the arrangements were made with contractors for the advances in question, the position was that Vote 3 was likely to be underspent. Further, the Air Ministry considered that the conditions regulating special advances were not infringed, as the work for which advance payments were made was work which formed part of the authorized programme for the year, and for which provision had been made in the Estimate for the year and not in the Estimate for the following year. In view of the rules governing the payment of special advances laid down by the Public Accounts Committee, I am of opinion that the power of the Ministry to make such advances ceased when it had become evident that there was no surplus on the Vote. NEW VOTES FOR MEDICAL AND EDUCATIONAL SERVICES. 6. In paragraph 59 of their Report for 1923, the Public Accounts Committee approved, in principle, a recommendation of the Treasury that two new Votes should be instituted for Educational and Training Services and for Medical Services. The sums taken in the Estimates, Votes 5 and 6, were described, respectively, as those required to defray the expenses of Medical and Educational Services. The new Votes do not, however, include expenditure on travelling and transport, accommodation, barrack services, fuel and light, general stores, clothing and provisions for the Medical and Educational Services, charges for which are borne on Vote 2, Quartering, Stores, Supplies and Transport. Vote 6 excludes Training Services as the Air Ministry did not feel justified in including these Services, owing mainly to the dual nature of establishments at which flying training is carried out. The Treasury agreed to the Vote being confined for the present to the educational establishments shown in the Estimates and Accounts, subject to further review in 1926. INSUFFICIENTLY VOUCHED EXPENDITURE. 7. Particulars of insufficiently vouched expenditure, charged in the Account under a general authority of the Treasury or with specific sanction, appear on pages 12, 16 and 20. I have no reason to take exception to the inclusion in the Account of any of these charges. CLAIMS UPON THE GOVERNMENT OF INDIA. 8. In my Reports of the last three years, I have drawn attention to the delay in settlement of the various contributions due from the Government of India on account of Air Force units in the service of that Government. The annual contribution for Home effective charges has again been made on the basis of a provisional capitation rate, a sum of 97,6001. being brought to credit on page 13 of this Account. A first approximation of India's liability has been submitted to the Treasury. I understand that the calculations indicate that the final rate will be very materially in excess of the provisional rate that has been paid for the last four years. No final settlement has yet been reached in regard to the following further questions (a) the contribution for non-effective charges, (b) sea-transport of Royal Air Force personnel to India before 1 April 1920, viz. 34,310l. 10s., which still stands charged to suspense in Air Ministry books, and is shown as an outstanding balance on page 74 of the present Account, and (c) the rate of departmental expenses to be added to the value of aeronautical stores supplied to India by the Air Ministry. MIDDLE EASTERN SERVICES. Comparison of Expenditure with Estimate. 9. The claim for Middle Eastern Services borne on Air Votes, including a sum estimated at 412,000l. for stores issued but not replaced in 1924-25, as explained in paragraph 10, was 3,702,606l. 16s. 7d., and this amount has been recovered from the Colonial Office and credited to the |