REVENUE DEPARTMENTS, REPORT OF THE COMPTROLLER AND AUDITOR GENERAL. 1. I continue this year the practice of issuing in a separate volume the Appropriation Accounts of the Revenue Departments. My observations on the accounts of these three departments, including the accounts of the receipt of revenue and the store accounts, are contained in the present Report. Out-turn of the year. 2. As shown in the Summary, pages 2 and 3, the gross estimated expenditure for Revenue Departments amounted to 71,487,7501., and the gross expenditure actually incurred to 64,142,548. 10s. 2d. Appropriations in Aid were estimated at 5,390,9697. and realized 2,876,208l. 2s. Od. The net expenditure thus amounted to 61,266,340l. 8s. 2d., compared with the Supply Grants of 66,096,781. The amount to be surrendered on these Votes is 4,830,440l. 11s. 10d., viz. : 3. A test examination has been applied by my officers, with satisfactory results, to the Store Accounts of the three Departments. VOTE 1-CUSTOMS AND EXCISE. 4. A test examination of the Revenue account was carried out at London, Bristol, Southampton, and Liverpool, with satisfactory results. Remissions. 5. I have been furnished with a statement from which it appears that there have been no cases during the year 1922–23 of extra-statutory remission of duty or abandonment of claims on account of revenue by the Commissioners involving a loss of 501. or upwards. VOTE 2-INLAND REVENUE. 6. A test examination of receipts and repayments of Revenue has been carried out at the Head Offices of Inland Revenue in London and Edinburgh, and at certain of the District Offices of Inspectors of Taxes throughout the kingdom. Income Tax Repayments. 7. As from 1 March last, an important change was made in the procedure for repayment of Income Tax. Up to that date, claims for repayment, after being certified by an Inspector of Taxes, were paid from a central Repayments Branch, amounts up to 401. being paid by money order, and over 401. by cheque. Under the new arrangements, repayments are made from the offices of the Inspectors of Taxes by means of crossed cheques. The change has involved the abolition of the Repayments Branch and the creation of a Departmental Audit staff. It may be observed that the new system, by abolishing the use of money orders, relieves the Department of the increasing liability for losses occasioned by the fraudulent encashment of money orders. The losses from this cause increased from 391. (six cases) in 1921–22 to 5471. (twenty-five cases) in 1922–23. Remissions. 8. I have been furnished by the Board of Inland Revenue with a schedule of the several cases, involving a loss of 501. and upwards, in which claims for duty or interest receivable under the Revenue Acts were remitted during the year ended 31 March 1923 without statutory authority, from motives of compassion or equity arising out of particular circumstances in individual cases. The reasons given for remission appear on examination to be satisfactory. The total of the amounts shown as having been remitted during the year is 349,018/. 4s. 4d., as compared with 330,5421. 15s. 3d. in 1921-22, and 263,848. 1s. 1d. in 1920-21. The greater part of the sum remitted was on account of Income Tax and Inhabited House Duty. 308,2211. related to 308 cases in which (a) there was no real liability, or the liability was too doubtful to make it advisable to take legal proceedings for recovery of the duty, or (b) estates were in bankruptcy or liquidation, and the duty was given up under the regulations made between the Inland Revenue and the Board of Trade, or upon the ground of the prospect of recovery being insufficient to justify proceedings; 19,3351. related to 103 cases of poverty, and 15,9491. to 60 cases of assessment on salaries, interest, or directors' fees, which the Board of Inland Revenue were satisfied would never be paid. VOTE 3-Post Office. Officers lent to Foreign Administrations. 9. In paragraph 11 of my Report on the Revenue Departments Appropriation Accounts, 1921-22, I drew attention to the failure of the Post Office to comply with the procedure laid down by the Treasury for safeguarding the pension rights of officers lent to the Mesopotamian Administration, and to furnish vouchers in support of the charges against the salary subheads of the Vote. I added that the Post Office had informed me that the receipts were not available and that the procedure adopted would be communicated to the Treasury. In May last, the Treasury informed the Post Office that the procedure adopted did not in itself suffice to preserve to the officers a title to pension from Imperial funds, and advised the Department that it would be necessary to obtain from each officer the income tax on his salary from the Post Office and a receipt for the net amount of his salary. I have not yet been furnished with any receipts for the salaries in question, nor, so far as I am aware, have any recoveries been made on account of income tax. The present account includes further unvouched charges for the salaries of these officers, and also similar charges on account of other Post Office servants lent to the Palestine Administration. Engineering Cost Accounts. 10. I referred last year to the introduction, as from 1 July 1921, of a new system of cost accounting, and stated that, owing to my limited experience of its working, I refrained from expressing an opinion as to its results. Minor modifications in matters of detail and procedure have been made from time to time, with a view to improving the system as an instrument of control. The effect of these modifications, and the development of the system, will continue to receive my attention. I have, however, formed the opinion, as a result of my examination of the accounts up to 31 March 1923, that, in its operation, the new system has effected improved control over expenditure on labour. Allocation of Engineering Expenditure between Vote and Telephone Capital Account. 11. The Public Accounts Committee, 1923, were informed that the under present conditions of the ratios, based on cost of labour and materials in 1913-14, employed in allocating expenditure on telephone plant between Vote and Telephone Capital Account. I learn that this investigation has not yet been completed. Telephone Capital Account. Unusual method of payment. 12. In March 1921, the Post Office entered into provisional arrangements for the purchase of a site for a Telephone Exchange, and acquiesced in the demand of the vendors to be paid, on completion, in Local Loans Stack of a nominal value of 13,500l., being the amount of stock represented at the market value on 15 March 1921 by the agreed purchase price of 7,000Z. Legal negotiations were unavoidably protracted, and the purchase was not completed until March 1923, when, owing to the appreciation of securities, the cost to the Department of the 13,500l. Local Loans Stock, transferred in payment of the purchase money, was 8,8931. 2s. 6d., an excess of 1,8931. 2s. 6d. over the original price of 7,000l. The Treasury have expressed regret that the Post Office should have acquiesced in the vendors' demand to be paid in stock, and have directed that, in future, specific Treasury authority shall be sought before any arrangement is entered into involving an unusual method of payment. Post Office (London) Railway for Mails: Capital Account.* 13. In paragraph 20 of my Report last year, I mentioned that the issues from the Consolidated Fund had been restricted to 1,089,500/., leaving unissued 10,500l., the estimated amount to be received from a re-sale of land and applied to meet expenditure for the purposes of the Act. The Treasury have recently approved the retention, for the present, of the land in question, and have issued from the Consolidated Fund the balance of 10,500. Expenditure during the year on the completion of existing contracts, amounting to 5,1011. 7s. 2d., has been charged to subhead E.6 of the Vote. 14. The completion and equipment of the Railway, which it was estimated in October 1922 would cost 550,000l., have recently been authorized as part of the Government programme of unemployment relief, and I understand that Parliament will be asked to make the necessary financial provision in a Supplementary Estimate for 1923-24 and in subsequent Post Office Estimates. Post Office Savings Bank Accounts. 15. The arrears, alluded to in previous Reports, in the Post Office Savings Bank Accounts have now been overtaken, and the accounts for the years ended 31 December 1921 and 31 December 1922 have been received, and subjected to the usual test examination. My inquiries on certain points arising from the examination are still under consideration by the Post Office. * The Account is presented to Parliament as a separate paper. |