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ORDER OF REFERENCE.

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The cost of preparing for publication the shorthand Minutes of
Evidence taken before the Committee was £230 7s. 4d.

The cost of printing and publishing this Report is estimated by
the Stationery Office at £708 10s. Od.

FIRST REPORT.

THE COMMITTEE OF PUBLIC ACCOUNTS have made progress in the matters to them referred, and have agreed to the following FIRST REPORT::

Your Committee have to report that during the year ended. 31st March, 1923, expenditure in excess of the amount voted by Parliament has been incurred under the following Vote :

STATEMENT OF EXCESS.

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A STATEMENT of SUM required to be VOTED in order to make good an EXCESS on the GRANT for the BANKRUPTCY DEPARTMENT OF THE BOARD OF TRADE, for the Year ended 31st March, 1923.

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For this sum the sanction of Parliament will be required.

It was explained to your Committee that this Excess arose in Subhead G.Stationery and Printing. The provision proved to be insufficient by £4,261 88. 7d. to meet the additional requirements resulting from increased Bankruptcy Work. £2,410 178. 1d. of the Excess on the Subhead has, with Treasury Sanction, been met from Savings on other Subheads of the Vote, leaving £1,850 108. 8d. to be provided. It is proposed to appropriate in aid of this sum under Section 91 of the Bankruptcy Act, 1914, £1,840 10s. 8d. out of Fees, etc., received under the Act, leaving a nominal sum of £10 to be voted. Your Committee see no objection to this sum being provided by an Excess Vote.

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SECOND REPORT.

THE COMMITTEE OF PUBLIC ACCOUNTS have made further progress in the matters to them referred and have agreed to the following SECOND REPORT:

GENERAL.

1. Out-turn of the Year.-A noticeable feature of the accounts for 1922-23, to which your Committee desire to call very particular attention, is the extent to which the requirements of Departments in general have been overestimated. This may be simply illustrated by the following table, which shows that on total supply grants of £540,462,000 no less than £71,916,000 fell to be surrendered, being 13.3 per cent. of the Estimate.

The corresponding figures for the year 1921-22 show the very large total surrender. of £92,817,000 on supply grants of £786,225,000 or 11.8 per cent.

For the year 1913-14 the total surrender was £3,366,000 on grants of £165,500,000, or 2:03 per cent. of the Estimate for the five years 1909-10 to 1913-14 the average surrender was 1.83 per cent. of the Estimate. These figures demonstrate how far departments have fallen from the pre-war standard and how great is the need for improvement.

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The surrenders for 1921-22 were no doubt to a large extent swollen by savings on unclassified services (mainly items arising out of the War, the Estimates for which were of necessity very conjectural) but your Committee would have expected that for the following year, as the complications due to the war disappeared and as progress was made towards the normal state of accounts, Departments should have been able to make a much more exact estimate of their requirements.

2. The savings in 1922-23 are to some extent explained by measures instituted as the result of the Geddes Committee and the economy campaign, but after making allowance for these special factors, your Committee are of opinion that the requirements of Departments were largely overstated and that it should. have been possible, very considerably, to reduce their demand for supplies.

3. An examination of the Accounts will, we think, abundantly justify this statement To our mind they contain ample evidence that Departments have estimated in full for the services which were known to be existing, that they have made excessive provision against contingencies and to meet charges which might arise out of general decisions of policy not taken when the Estimates were framed, and have made insufficient allowance for the delays which, as experience shows, invariably arise in carrying out departmental works or in obtaining deliveries from contractors. A few illustrations may be given, which are taken almost at random from the Votes.

4. On 17th May, 1922, a Supplementary Estimate was pre- Q. 3245. sented for the Colonial Office Vote by which the House was asked to make further provision for Overseas Settlement and the services arising out of the Empire Settlement Act, 1922, to the extent of £652,000. This Estimate had been considerably reduced at the suggestion of the Treasury, but even as thus reduced was altogether excessive. Out of £350,000 voted for the services under the Empire Settlement Act only £35,000 was spent and the surplus which eventually fell to be surrendered on the Colonial Office Vote was £479,000.

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5. The Vote for Road Grants, Unemployment Relief (Un- Qns. 4416classified Services Vote 1) amounted to £1,540,000. £192,000 was spent, while on the Vote for the Relief of Unem- Qus. 3122ployment (Unclassified Services Vote 3) £1,000,000 fell to be

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26.

Q. 5487.

Q. 1142.

Q. 5638.

Q. 6128.

Q. 6173.
Qns. 2420-

2438-41.

surrendered on a total grant of £2,570,000. These two Votes are admittedly difficult to forecast, as the demands upon the Exchequer depend upon the requirements of the local authorities, but your Committee cannot avoid the conclusion that the Departments made an excessive allowance for possible demands. 6. Supplementary Estimates were voted for the Ministry of Labour in the course of the year amounting in all to a net sum of £3,562,000. The net surplus on the Vote amounted, however, to no less than £2,136,000, and perhaps the most striking item, to which we would call special attention, was the fact that the provision under Sub-head A for salaries, which included a Supplementary Grant of £293,000, proved no less than £577,000 in excess of the actual expenditure.

7. Again the group of Votes administered by the Office of Public Works and Buildings has for some years exhibited the same tendency to over-estimate and your Committee feel that the accumulated experience of the Department should have prompted a great reduction in their demands.

8. The Navy Account, with large surpluses on the Votes for purchase of stores of all kinds and for Works, indicates that the Admiralty had made quite insufficient allowance for the downward trend of prices, reductions due to economy, for the possibilities of utilising existing stocks, and for delays in contracts.

9. On the account for Air Services there was a net surplus of £1,912,000, after meeting charges amounting to £615,000 which were not provided for in the Estimate; and the surplus on the services for which provision was made in the Estimate was no less than £2,527,000, or 23 per cent. of the net Estimate

10. In regard to the Army Account your Committee would call special attention to the observations made on the outturn of the year by the Treasury, who prefaced their criticisms by the remark that the miscalculation, amounting to nearly £12,500,000, of the Army requirements was sufficient in itself seriously to affect the Budget Estimate of the total revenue required to be raised for the year.

11. The Committee enter their protest against these over-estimates, and they are glad to learn from the Treasury representative and from the principal Accounting Officers that, in view of the experience of 1922/23, the latest Estimates have been severely cut. It is interesting to notice in connection with the Navy Estimates for the current year that it has been decided to discount in advance possible causes which delay the progress of expenditure by an overhead cut of £3,000,000.

12. Telegrams.-As from 1st April, 1922, the practice was 21, 2427-35, introduced of requiring Government Departments to pay the Post Office in cash the cost of telegrams sent on their behalf, and provision was made with this object in the Estimates for

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