submitted to the Chief Secretary's Committee for a decision on priorities. The Secretary hopes that the Admistration would be in a position to come to some definitive conclusion and to plan the way ahead by the end of 1981
55. Handling and transportation of Government stores. An audit review of the transportation orders issued by the Government Supplies Department to contractors for the handling and transportation of Government stores revealed a number of cases where the transportation charges had been incorrectly calculated. The terms of the contracts stipulated that the appropriate rate should be paid on dead weight or measurement whichever was the greater according to bills of lading or other documentary evidence obtained by the Director of Government Supplies. However cases were noted where the volume quoted in the transportation order was either disproportionate to the dead weight of the goods transported or substantially greater than the total volume of the items transported as shown in the supporting documents. Based on a sample check of transportation orders issued during the period April 1983 to March 1985, I estimated that overpayments to the contractors of $118,000 had been made, involving 71 transportation orders.
56. I have invited the attention of the Director of Government Supplies to the discrepancies found in the transportation orders, pointing out that the system of internal checks over the payment of transportation charges was not entirely satisfactory. I have suggested that the control procedures should be critically reviewed and that written instructions should be issued highlighting the need for control over the handling and transportation of Government stores in order to prevent a recurrence of similar cases.
57. The Director of Government Supplies has agreed that certain inconsistencies have occurred and he has informed me that steps have already been taken to ensure that they do not recur. The Director has also informed me that an internal audit team has been appointed to carry out a thorough investigation of the queries raised in the audit review and that he would await the team's detailed report before replying.
58. Personal Emoluments. Review of departmental procedures for the calculation and recording of leave eligibility. The Government's annual expenditure on salaries in 1984–85 was more than $9,000 million and with the exception of those remunerated on the Government's model 1 pay scale and those with less than ten years service, all officers are eligible to receive a minimum of 30 days full-pay leave a year in the form of vacation and casual leave, which represents the equivalent of one month's salary. In view of the considerable expenditure represented by leave I have, as part of my audit of the Government's payroll, carried out reviews at a number of departments on the records maintained and the procedures in force relating to the calculation, approval and recording of leave earned and leave taken. Irregularities were observed in four departments where it was found that departmental procedures laid down were not sufficiently comprehensive and the internal checks carried out were inadequate to ensure that the records were accurately maintained. I was particularly concerned about the overstatement of vacation and casual leave earned by the staff of the Engineering Development Department, the Electrical and Mechanical Services Department and the Urban Services Department, as a result of miscalculations.
59. The Director of Engineering Development has recently completed a detailed check of all leave records for the period April 1983 to December 1984 and has reported that errors were found in the leave records of 850 officers out of a total establishment of 3 700 and the cost of the errors, quantified in money terms, amounted to $123,000. The Director of Engineering Development has corrected the errors found in this period but because of the difficulties involved he is reluctant to make a detailed check of the period prior to April 1983 and has sought the approval of the Deputy Financial Secretary not to make any further checks. This request is presently under consideration by the Deputy Financial Secretary.
60. The Director of Electrical and Mechanical Services advised in February 1985 that a detailed check of the leave records of all officers was being conducted within his department and by September 1985 he had checked and corrected the leave records of 970 officers out of a total of 7 000 although he had not quantified the errors discovered in money terms. He has assigned a number of clerical staff to work overtime during the period September to November 1985 in order to complete the exercise and he has informed me that he should be able to report the results in December 1985.
61. Irregularities and miscalculations of leave earned by the staff of the Urban Services Department had already been noted by the Secretary for the Civil Service in early 1984 prior to my inspection and the Secretary had recommended to the Director of Urban Services that he should conduct a thorough check of the leave records, as inaccuracy in the records could give rise to other problems in addition to overpayments. Unfortunately the results of the checks which the Director may have conducted are still not available, and a reply from the Director of Urban Services to my observations which were issued in February 1985 is also outstanding.
62. Having regard to the financial implications arising from incorrectly stated leave balances, the Secretary for the Civil Service has taken action to design new forms for leave applications and for recording leave earnings and he will issue an aide-mémoire to all controlling officers drawing attention to the proper method of calculating leave earnings, and on the need to carry out departmental random checks which should be followed by detailed checks if errors are found. In the light of the incidence of errors revealed so far, I have suggested to the Deputy Financial Secretary and the Secretary for the Civil Service that they may wish to consider the desirability of requiring all controlling officers to conduct a detailed check of leave records with a view to confirming their correctness.
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