Treasury sanction to the variation of the contract, which involved an additional cost of about £800, not, it is true, ultimately to the Q. 537. nation, but to the wool trade..

We are satisfied that the placing of the second order with a gentleman connected with the responsible Committee was a perfectly bona fide transaction, made solely in the interest of the work in hand; but we consider it generally undesirable that arrangements of this nature should be entered into, and, if they are absolutely necessary, it is especially important that the proper and usual sanctions should be obtained.

COLONIAL OFFICE.

27. Assistance to Settlers.-The Supplementary Estimate for Qns. 831 et 1920-21 provided a sum of £55,000 for Assistance to Settlers seq. under a scheme which was provisionally sanctioned for three months and subsequently extended for a further three months to 30th June, 1921. A note to the Estimate stated that it was intended that the grants should as a rule be recoverable, without interest, over a reasonable period. About £18,000 was spent in the year and further sums were spent in 1921-22, bringing the total to approximately £30,000. In view of the practical diffi culties in recovering the money from these scattered settlers with out establishing elaborate and expensive machinery for its collection, the Treasury have agreed that the grants should be treated as irrecoverable.

The effect of this Treasury decision is to convert what Parliament granted mainly as a loan into a gift. While we do not say the recovery of these loans is now practicable. we think the position ought to have been foreseen, and the matter laid before Parliament as it really proved to be.

FOREIGN OFFICE.

28. In our Third Report of 1920, and again in 1921, we had Qus. 1192 occasion to comment on the inadequacy of financial control within 2004. the Foreign Office. We are now informed that a new arrange ment has been brought into operation under which the work hitherto performed solely by the Chief Clerk has been divided between the Chief Clerk and another officer, who will be Account ing Officer. The Chief Clerk, as heretofore, will be responsible for all matters of establishment, salaries, and so forth, while the. Accounting Officer will be responsible for all matters of estimates, accounting, &c.

We welcome this much-needed, and we must add long over-due reform, and express the hope that it will have the desired effect of establishing proper control over expenditure in this Depart

ment.

29. Among the balances shown as owing by sub-accountants in the Foreign Office books there have been included various sums which had actually been spent-in several cases over two years before, and in one as long as fourteen years-but had not been charged in the Parliamentary Accounts. Arrangements Q. 1250.

Q. 2616.

Qns. 26432649.

have now been made which will secure that any items, which cannot be immediately so charged, shall in future be separately shown in the Departmental books, and so kept under review: but we must urge upon the Accounting Officer the importance of clearing all outstanding accounts as soon as possible.

STATIONERY AND PRINTING.

30. A question arises as to the proper method of bringing to account the expenditure in connection with the recently instituted Stationery Office Printing Works. Alternatives which naturally suggest themselves are, either that the total expenditure connected with these Works should be shown under a special subhead or subheads, or that the expenditure incurred should be charged off (in the same way as printing done by contract) against such subheads of the Vote as record separately the cost of printing for the Houses of Parliament, the cost of Parliamentary Debates, the cost of printing for Public Departments, &c., &c. In the account under review a compromise was effected whereby out of the total expenditure in connection with the Stationery Office Works some £45,000 was charged off against Subhead E (Printing, &c., Representation of the People Act), Subhead K (Printing, &c., for the Houses of Parliament) and Subhead M (Parliamentary Debates and Records), while the balance amounting to £476,880 4s. 6d. was charged against the separate subheads relating to the Stationery Office Printing Works. The estimates for 1920-21 contained no indication that this course would be pursued, but in the Estimates for 1922-23 the position is clearly explained. We do not, however, regard this compromise as satisfactory, for even in the form employed for 1922-23 the Estimate still contains no indication of the total expenditure in respect of these Works (including the expenditure on the Parliamentary Printing done at the Works).

We recommend that in future the whole cost of the Works should be provided for under appropriate Subheads and it should be made clear on the face of the Vote (either by a note, or by alteration of the present titles) that the Subheads which record the expenditure on different categories of printing are confined to printing done by contract and exclude all work done in the Government factory. Notes should also be added giving the total estimated cost of printing (whether done under contract or in the Department's own works) for Parliamentary Debates, the Houses of Parliament, the Representation of the People Act and other heads.

31. The Store Accounts of the Stationery Office (on which we had occasion to comment in paragraph 55 of our Third Report of last year), though showing some improvements, still disclose unsatisfactory features. Now that more suitable storage accommodation has been provided there can be no reason for the continuance of these defects, and we shall expect to hear next year that they have been removed.

OFFICE OF WORKS.

32. Our attention has been called to the question whether the Office of Works should raise over-head charges for administration, interest, &c., in respect of services which it carries out as the agent either of another Government Department or of an outside body.

In a case that came before us of work done on repayment terms Qns. 572 et for a French Educational Institute, we were informed that over- seq. head charges were waived on international grounds. We raise no objection as regards this particular instance, but, obviously, so long as the Office of Works carries out agency services for others (and it cannot avoid so doing), it must employ a larger staff than it would otherwise require, and the cost of this additional staff should not fall on the Office of Works.

We recommend that if the Office of Works undertakes a service as an agent, full over-head costs (administration, superannuation, interest, &c.) should be charged wherever possible. This rule should be applied as between the Office of Works and other Government Departments, for even in this type of case the question is not merely one of book-keeping or proper accountancy. There may be cases where alternative courses are open to the Department for which the work is done, and unless the Office of Works makes it a regular practice to quote and charge the full cost, the principal Department is not in a position to determine what is, from the national point of view, the most economical course to pursue.

33. The Office of Works has carried out the proposal mentioned Qns. 493in our Third Report of 1921 to re-arrange their accounts so as 948. to distinguish handling charges (" freight, handling and incidental charges, including wages, rent, &c.") from the purchase cost of stores. These charges in the year under review greatly exceeded the estimate, one of the principal causes of excess being an overlap caused by a change of system, in consequence of which work formerly done by contract was carried out by staff in the direct employ of the Department. It is not certain, however, that this change has been an economic success: the Office of Works is giving further consideration to the comparative cost of direct and contract labour.

SECRET SERVICE.

34. We are glad to learn that, acting on the recommendation Q. 2253. made in our Third Report of 1921, the Treasury have now arranged that a proper certificate shall be given by a responsible Minister of the Crown in the case of all Extra Receipts arising in connection with the use of the Secret Service Funds.

BOARD OF AGRICULTURE, SCOTLAND.

35. Under the Land Settlement (Scotland) Act, 1919, subse- Q. 1769. quently amended by the Land Settlement Amendment Act, 1921, the Board of Agriculture, Scotland, were empowered to borrow

Q. 1771.

Q. 1779.

Q. 1789.

Qns. 16161655.

money from the Public Works Loan Commissioners to an aggregate amount not exceeding £3,500,000 for the acquisition and adaptation of land for Land Settlement under terms and conditions laid down by the Treasury.

The Act of 1919 received Royal Assent on 23rd December, 1919, but, in anticipation of its passing the Board of Agriculture, Scotland, without communicating with the Treasury, incurred considerable liabilities in the matter of the purchase of estates. which would ultimately have to be financed from the funds available under the Act. We were informed that this course was adopted in order to expedite land settlement in Scotland, and it was urged that the liabilities incurred were not greater than could be met by the Board out of the Agriculture, Scotland, Fund, over which at the time the Treasury had no control. Nevertheless, it appears to us that these considerations in no way justified the Department, without previous communication with the Treasury, in entering into these commitments. We were glad to receive an assurance from the Accounting Officer for the Board that he accepts this view.

Appended to the Appropriation Account are statements showing the losses incurred by the Board of Agriculture, Scotland, for the two years ended 31 March, 1921, in connection with the loans raised for the purposes of the Act. Owing partly to the form of the accounts submitted to us it is difficult to get a clear view of the result of the operations, but it seems probable that in many cases the rents receivable in respect of the holdings will not pay more than one-fourth, or at most one-half, of the annual loan charges for a good many years to come.

ROYAL IRISH CONSTABULARY.

36. The examination of the accounts of the Royal Irish Constabulary has disclosed various irregularities, such as over-issues of pay and allowances, errors and defects in the store accounts, as well as considerable losses of stores. We are satisfied, however, that they are in the main attributable to the disturbed condition of the country. We see no need to refer to them in detail.

37. Our attention has been drawn to the fact that salary, together with house allowance, has continued to be issued to an ex-Inspector-General of the Royal Irish Constabulary in respect of a period of over two years subsequent to 10th March, 1920, although a successor had been appointed to that office as from 11th March, 1920. These payments have been provided out of the Vote for Royal Irish Constabulary, but they have been carried to a suspense account and have not been charged to the Vote. We were informed that they were made on the authority of the Irish Government, acting on legal advice that the officer was, on a proper construction of correspondence which had passed, entitled to them. Provision has been made in the Vote for Royal Irish Constabulary (1922-23) with a view to enabling these payments to be charged against the Vote. We cannot but express our surprise that an unusual payment of this kind should

have been made and continued so long without Parliamentary authority.

BOARD OF EDUCATION.

38. In our Third Report of 1921 we called attention to certain Qns. 1057 et points in regard to which the practice of the Board of Education seq. in administering the School Teachers (Superannuation) Act appeared to differ from the rules observed in awarding pensions to Civil Servants.

We are glad to learn that the Board of Education has now agreed with the Treasury as to certain rules of practice governing the main types of case. Frequent consultation now takes place between the two Departments, and the present position appears to be satisfactory.

DIPLOMATIC AND CONSULAR SERVICES.

39. Special Missions.-A heavy excess has been incurred on subhead K, Special Missions, of the Diplomatic and Consular Services Vote (Cl. V, Vote 1), the expenditure having been £621,411 as against an estimate of £339,200. This excess, while partly due to the Rhineland High Commission and other international Commnissions the cost of which is recoverable under the Peace Treaties, is in the main attributable to the fact that missions, the cost of which falls entirely on the British Exchequer, and which had been specifically provided for, lasted longer than was expected.

We are glad to know that for the year 1922-23 the estimate has been reduced to £77,856, but we trust no effort will be spared rigorously to curtail the outlay on all missions by restricting the numbers sent and the rates of allowance. In particular we would urge that the practice of allowing actual expenses (of which instances still occur) should be altogether abandoned.

40. A conspicuous instance of this practice is seen in the Qns. 843Colonial Office Vote (Cl. II, Vote 6) in the case of the visit of 893. the Secretary of State to Cairo. In this case a scale of allowed expenses per day was at first fixed by the Treasury, but in response to a telegram from the Secretary of State from Cairo they waived this regular practice and agreed to allow actual expenses in lieu of the allowances, i.e., not to impose a limit. In reply to our questions we were told by the Treasury representative that this would have been unusual before the war, certainly; I cannot say Q. 891.

that it is unusual now.'

Appendix 12.

It seems to us that it is very undesirable for unlimited power Q. 881. of spending to be given to any mission, and equally undesirable for a Cabinet Minister to set the example of asking it.

41. Mission to the Imam of Sanaa.-In July, 1919, it was decided by the Foreign Office, without seeking the prior sanction of the India Office for the expenditure, to send a special Mission to the Imam of Sanaa (200 miles north of Aden). It was anticipated that the cost would be trifling in comparison with the results, and that it would be chargeable to India as part of the expense of the

Q. 1257.