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Terminable
Annuities.

Revenue Departments, And Post Office Packet And Telegraph Services.

Vote 5.—Post Office Telegraphscontinued.

The amount recorded under the Suspense Head, which, in the year 1904-5, was shown as 211.609/. 10s. Id. has now been reduced to 199,2072. 14s. 3d. The difference of 12,4012. 15s. lOd. is due, I have been informed, "to the fact that the value of Stores allocated to Works exceeded the payments for Stores purchased plus the usual Rate Book percentages tor Stores used."

An Annuity of 70,5362. 10s. -d. has been created to repay the money borrowed in the calendar year 1905, raising the total of the Annuities created under the Acts to 469,8872. 15s. -d., provision for which has been made under Sub-Head R. of the Post Office Vote, 1906-7.

The Annuities created up to 1902 run for periods varying from 12 to 20 years from the date of borrowing. Those created since 1902 run for a period of 15 years.

Test
Examination

Allocation of Wages.

Stocktaking Discrepan-. cies and Irregular Transfers.

Store

Accounting at Manchester.

Orders for Engineering Stores placed with the Factories instead of with Contractor.

System of cross-check.

Store And Expense Accounts.'

7. A test examination has been applied by my Officers to the Accounts at the Office of the Controller of Stores in London, at the Telegraph Factories at Mount Pleasant and Holloway, and at the Edinburgh, Glasgow, Manchester, Cardiff', and Woolwich (Sub-marine) Depots.

In view of the remarks of the Committee of Public Accounts in their Second Report for the year 1906, a further test examination has been made of the Accounts of the Royal Engineers, the stations selected being Basingstoke and Wandsworth; and I am able to state that the improvement, to which reference was made in my Report of last year, has been fully maintained during the financial year now under review.

In connection with the tests at Edinburgh, Glasgow, and Cardiff, cases were brought to my notice, as in the Districts dealt with in the preceding year, in which wages had been charged to works other than those on which the men were actually employed. At Cardiff it was observed (1) that a large proportion of the discrepancies disclosed at the local stocktaking had not been reported to the Controller of Stores; and (2) that, in many instances, Accounts had been adjusted, by the transfer of Stores from one work to another, in order to effect an agreement, as far as possible, between expenditure and the authorised estimate for each individual work. In reply to Queries that I raised on this matter, I have been informed that the irregularities, the serious nature of which is admitted, have been brought under the notice of the Postmaster-General.

In continuation of the remarks contained in paragraph 5 of my Report of last year, upon the question of Store Accounting at Manchester, I have since been informed that the Postmaster-General, having called for a special Report upon this subject, deemed it his duty to take serious notice of the matter as regards each of the Officers in fault, and inflicted such punishment in each case as seemed to him justified. It was further stated that the Postmaster-General had before him proposals for securing a better control ot Engineering Accounts, but that he was not yet in a position to decide thereon.

I may add that, on the occasion of the test examination conducted by my officers in July last, the accounting at this Depot showed a great improvement, which is doubtless due to the measures recently adopted by the Post Office authorities.

8. In the course of the examination at the Factories at Mount Pleasant and Holloway it was noticed that certain orders for Engineering Stores had been placed with those Factories, although the stores, as shown by the tenders received, could have been supplied by contractors at a considerably lower cost.

In a letter to the Postmaster-General on this subject, I pointed out that the stores in question did not appear on the Statement of Work which normally was to be regarded as appropriate to the Factories, and asked for an explanation of the necessity for adopting a course which seemed to have entailed an additional and apparently avoidable loss on Public Funds.

In reply I have been informed that orders were given specially to the Post Office Factories in the early part of 1906, with the sole object of obviating the discharge of hands which would otherwise have been necessary in consequence of tho slackness of work. It was further stated that the Postmaster-General has lately considered the whole matter fully, and has assigned to the Factories the manufacture of certain additional classes of stores; and it was hoped that he would thus be able to keep the number of hands employed at the Factories fairly constant.

9. At present the Post Office has no system of check to ensure that the issues and receipts of stores between the various Engineering districts, Store-depots, and Factories duly correspond. The necessity for such a system was recognised by a Committee on the Department of the Controller of Telegraph Stores in 1902, who recommended that a "cross-check " should be instituted between these Branches. In reply to an inquiry on the subject, I have been informed that a proposal to give effect to this recommendation, Revenue Departments, And Post Office Packet And Telegraph Services.

Vote 5.— Post Office Telegraphs continued.

involving an increase of staff, was submitted to the Treasury on the 31st October 1904, who postponed its consideration pending the settlement of the question of abolishing District Depots, and this again stands over owing to the difficulty of obtaining a suitable site at Birmingham. Pending the introduction of this proposed system of cross-check, I would point out that the Post Office appear to lack a valuable safeguard against frauds or irregularities.

10. With reference to a sum of 147Z. 10s. -d., written off, with the consent of the Telephone Treasury, in respect of Telephone Apparatus destroyed by tire at Tottenham, it appears, Apparatus from the Schedule of Losses for the quarter ended 31st December 1905, that a claim for p^at the value of the Apparatus was made upon the Renters, who, however, declined to pay, Tottenham. and the Postmaster-General was advised that as the Private Wire Agreement contained no provision expressly providing for such a contingency, the claim could not be enforced. It is understood that a clause, rendering the Renters liable for any damage that the Lines or the Apparatus may sustain by fire on their premises, will be inserted in the new Form of Agreement to be prepared by the Department.

Revenue.

11. A test examination of the Account of Telegraph Revenue has been made at the ExaminaChief Offices in London, Dublin, and Edinburgh. The results have proved generally *|on 0* satisfactory, and the Post Office and the Treasury have been so informed. Account

John A. Kempe,
Comptroller and Auditor General.

POST OFFICE TELEGRAPHS (TELEPHONIC SYSTEM).

An Account of the Ileceipts and Payments by the Postmaster General under the Telegraph Acts, 1892,

1890, 1898, 1899, and 1904.

[table]
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forward.

Exchequer.

Much, 1906.

General Foot Office,

SO November 1906.

L. Maclean,

Principal Book-keeper.

Charle» A. King,

Comptroller and Accountant General.

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