CO885-(20-21) — Page 204

PUBLIC RECORD OFFICE

Reference :-

C.O.885

21 PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

REPORT OF THE COLONIAL AUDIT COMMITTEE.

PRELIMINARY.

By a minute dated 23rd of December, 1909, the Secretary of State decided that so much of the work of Colonial Audit as is at present undertaken, on his behalf, by the Comptroller and Auditor-General should in future be entirely carried out locally in the Colonies and Protectorates concerned by Local Auditors, supervised in London by a small central establishment connected with, but not forming part of, the Colonial Office. The Local Auditors and Assistant Auditors as well as the staff of the central office would form one Department, their salaries and expenses being defrayed by the Governments which avail themselves of their services.

2. The Secretary of State further directed, after consultation with the Comptroller and Auditor General, that an Interdepartmental Committee should be appointed to submit proposals, for the consideration of the Secretary of State and the Comptroller and Auditor General, as to the details of the arrangements to be made for giving effect to this decision. The Committee was composed of Mr. G. V. Fiddes, C.B., C.M.G., as Chairman, Mr. H. J. Read, C.M.G., Mr. C. Strachey, Mr. A. E. Collins and Mr. W. D. Ellis (representing the Colonial Office), with Mr. II. J. Gibson, C.B. and Mr. A. E. Stephenson (representing the Exchequer and Audit Department), and Mr. J. F. N. Green, as Secretary.

HISTORY OF THE ORGANISATION OF THE COLONIAL AUDIT SERVICE.

3. The duty of auditing Colonial accounts was formerly discharged by the Commis- sioners for West India Accounts, established in 1806, and the Commissioners for Colonial Accounts, established in 1814. The functions of these Boards were transferred to the Audit Office, then a division of the Treasury, in 1821 and 1832 respectively (by 1 and 2 George 4. c. 121 and 2 and 3 Will. 4. c. 26). On the repeal of these Acts in 1867 by 29 and 30 Vic. c. 39, some new arrangement became necessary, and it was at first proposed that the audit of the accounts of all Crown Colonies should be conducted at the Colonial Office. The question was at the same time mooted whether the cost of audit ought not to be defrayed by the Colonies themselves, but this idea did not meet with the approval of the Secretary of State. It was ultimately arranged that the accounts of Colonies should be audited by the local Governments, subject to an audit by the Comptroller and Auditor-General in the case of Colonies receiving grants-in-aid from Imperial funds.

4. In 1886 the Comptroller and Auditor-General was invited by the Secretary of State to undertake the audit of the accounts of Lagos and the Gold Coast and, as a part of the arrangements which became necessary on his acceptance of this responsibility, a "Colonial Audit Branch 11

was establishel at the Exchequer and Audit Department in 1889.

5. This branch did not form part of the Home Civil Service, appointments being made thereto on the nomination of the Comptroller and Auditor-General and the cost being defrayed by pro rata contributions from the Colonies concerned. The work of the branch grew rapidly, and in 1905 it was concerned with the accounts of 17 Governments. In 1906, with a view to removing certain difficulties and to providing a wider field for the selection of trained men to undertake Colonial audit work, the Colonial Audit Branch was amalgamated with the regular establishment of the Exchequer and Audit Department, the repayment of the cost by the Colonies being credited as Appropriations in Aid to the Exchequer and Audit Department Vote. At that time the expenditure accounts of these Colonies were examined in London, the audit of the Revenue and Store Accounts being performed locally. Since then arrangements have been made for the entire local audit of accounts in certain Colonies, and it was in contemplation to extend this system to others on a favourable opportunity.

6. The re-organisation now to be undertaken contemplates the transfer of this work from the control and direction of the Comptroller and Auditor-General to that of the Secretary of State for the Colonies, the supervision of the work of the new Department devolving upon an officer responsible to him.

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REORGANISATION.

(a) CENTRAL ESTABLISHMENT.

7. The Secretary of State has decided that the first appointments to the new Department should be made on the nomination of the Comptroller and Auditor General, who will select persons for this purpose from the officers of his staff having the requisite knowledge of Colonial accounts. "The Colonial Audit Department," and that the head of the Department should be styled We recommend that this Department should be entitled "Director of Colonial Audit.'

8. It seems desirable that the organisation and scale of salaries of the central establishment of this Department should conform closely to those in force in the Colonial Office, and we recommend that the higher staff should consist of

Director of Colonial Audit

Assistant Director of Colonial Audit Three Second Class Clerks

ㄓ

£

£

850 by 50 to 1,000 600 by 25 to 200 by 20 to

800 500

9. So far as can be foreseen at present, the subordinate staff required will be a clerk of the Second Division or an Assistant Clerk of the Abstractor Class, a boy clerk, and a messenger. The salaries and, ultimately, the pensions of the higher staff would be borne by Colonial funds directly, but it is probable that in the case of the subordinate staff it may be more convenient to arrange for men to be seconded from the Home Civil Service, the cost of their salaries with a contribution to cover pension being refunded to the Treasury. We recommend that, as the audit of both receipts and expenditure is to be carried out in the Colonies, the annual expenditure of the home establishment should be divided between the Governments concerned in the proportion which the receipts and payments of each Colony for the latest completed financial year bear to the aggregate of the receipts and payments of all the Colonies concerned during the same period (see paragraph 19).

10. The initial cost of the home establishment on the scale proposed above will be approximately £2,500, which amount compared with the estimated cost in 1910-11 under existing conditions (omitting from the latter the non-effective charges, amounting to £1,477) shows a reduction of nearly £3,000. however, inust be placed the cost of necessary additions to the local establishments to Against this estimated reduction, meet the increased local work arising out of the local audit of expenditure, estimated at about £1,500, and the cost of passages, &c.

11. The proposed staff should be sufficient to provide for the occasional absence of the Director or Assistant Director on a tour of inspection of groups of Colonies. This system is already in force under existing arrangements, and we desire to take this opportunity of stating that we attach considerable importance to its continuance

as a means of maintaining efficiency, being impressed with the fact that the visit of the Assistant-Comptroller and Auditor in 1907 to East Africa, Cyprus, and Gibraltar was of considerable value to the Colonies and Protectorates concerned.

12. We consider it essential, in order to obtain the best results from the new scheme, that the Colonial Audit Department should be accommodated in the same building as the Colonial Office. The matter is already under the consideration of the Office of Works, and we understand that it is probable that the additional rooms required can be obtained.

(b) LOCAL ESTABLISHMENTS.

13. The Local Auditors and Assistant Auditors will be appointed by the Secretary of State, who will determine the salaries and number of the establishment in any Colony after consultation with the Governor. Such appointments should, we consider, be made on the recommendation of the Director of Colonial Audit. The appointments of Local Auditors and Assistant Auditors will be subject in all other respects to the conditions which apply to other Colonial Civil Servants of corresponding rank or position, down in the Regulations for His Majesty's Colonial Service and the local regulations of as laid the Colony in which they are serving.

14. The Local Auditors will correspond with the Director, under regulations similar to those which govern at present their correspondence with the Comptroller and Auditor General, on all technical questions arising directly out of their examination of an Account. Questions of importance, or involving matters of principle, will be referred to the Secretary of State through the Director or the Governor, according to the circumstances in which the question has arisen, and he will communicate his decision to the Governor in the usual way.

(15717-2.) Wt. 33930-G, 60. 253. 3,10. D & S,

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