Page. 4.
13.
As a result of representations by this Department, the Assistant Financial Secretary recently authorised the Director to dispense with the procedure of public tander in conection with tho landing and storage of cargoes, and to Lake arrangents by direct negotiation with firms subject to his covering approval. This authority was dated 13th March, 1948, and related to certain arrange- nonts then under consideration and to future procedure. approval does not appear to have been given for any of the past
Covering
arrangements.
140
B. MARKETING AND RICE SECTIONS
The procurement and distribution of comoditios in short supply, other than coal and firewood, which have been issued on ration, was undertaken by the Marketing and Rico Sections and, in addition, the Marketing Section handled all goods received in completion of the British Military Administration procurement programes and purchasing missions.
15.
The distribution of the rationed foodstuff, i.c. rice, flour, sugar, meat and butter, which were obtained through the organisation of the Special Commissioner South East Asia, Singapore, and paid for through the Crown Agents to the Ministry of Food and of certain other commodities such as peas, which were used as substitutes for rice, was undertaken by cort in selected firms who acted as Goverment's agents on comission under the toms of varying agreeman ts. As stated in paragraph 8 above, the Director was given discretionary authority by Sir Mark Young to conclude agreements with distributors. Certain of those agreements are at present under examination by this Department, and in the case of the meat distribution I have been informed by the Director that there is no distribution agrecnait on the department's files and that the remuneration received by the distributor and "the liability by than in respect of heat supplied (by the department is) obodied in a table of price structures compiled by the Price Controller and (that) this is dram up as cach shipt is received". Further information is being called for in this connection and also for the authority for the supply of Government transport free of charge to the distributor. My predecessor also informed the Director that he considered that the arrangements should be covered by a formal agreement with the distributor and also expressed the view that in view of Sir Mark Young's specific delegation of authority in this connection to the Director it was "not understood why, nor (did) it appear satisfactory that the terms of distribution agreements should be fixed by the Price Controller".
16.
Arising out of an audit query regarding the payment for a quantity of flour requisitioned from a local firm, it came under notice that a portion of the flour was issued to local merchants in exchange for rice. Further examination revealed that rice had in several occasions been exchanged with local merchants for other grades mů quantities of rice.
17.
:
The Latter referred to in paragraph 16 above was brought to the notice of Government and I asked the Director to inform me of the authority under which flour and rice purchased by Government, presumably for distribution to the public, was exchanged for rice. In his reply the Director gave no reference to the authority under which these arrangements were made but stated "ny contentin, however, is that these barter trans.ctions represent a method, albeit roundabout, of fulfilling the original purpose to rather better effect than would be achieved by nomal distribution" and in conclusion stated that it was not proposed to enter into any further transactions of this naturo" as rice stocks were now more ample. When com.enting on the draft despatch to the