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maintenance by each Colony of a separate audit establishment, and the performance of all its work locally, often in an unhealthy climate, renders the cost of audit, unnecessarily expensive, and this in itself tends to restrict the scope of the Audi- tor's operations, and the efficiency of his department.

6. Considerations of this nature led to the proposal in 1886 that, in the cases of the Gold Coast Colony and Lagos, the Comptroller and Auditor General in this country should be invited to undertake the whole work of audit, upon repayment by the Colonies of the actual cost. This plan has been in force, with the cordial co-operation of the respective Governors, since May 1887, and the results are such as to lead me to propose its adoption by other Colonies, including that under your administration.

7. Under this system the present officers of the Colonial Audit Department would cease to be connected with the Colonial establishment, and would become responsible to the Comptroller and Auditor General, under whose directions they would in future act. No difference would, however, be made in their emoluments, pensions, or other advantages, and they would be eligible for promotion to other audit posts, as opportunities occurred. The Officer administering the Government would be immediately relieved of all direct responsibility for audit, although the local Audit Department would continue to afford any financial information required; and I need hardly observe that the Governor's responsibility for the proper custody and expenditure of all public money will remain undiminished. It is contemplat- ed that a large portion of the mechanical work of audit, such as checking vouchers, &c., would gradually be transferred to London, where its performance by the highly trained staff of the Exchequer and Audit Department would doubtless result in economy and increased efficiency; and a beginning is about to be made to deal with the Gold Coast and Lagos vouchers in this manner. The local Audit Department, relieved of this laborious duty, would be able to devote increased attention to the audit of receipts, the inspection of the checks against loss and embezzlement, and the introduction or improvement of store accounts. As vacancies occurred it would be possible gradually to reduce the local staff with the transfer of work to London; and it appears probable that increased efficiency of the audit would eventually be secured without any increase of cost to the Colony.

8. In the case of Colonies in which Imperial garrisons or naval establishments exist, considerable economy will probably result from combining, as it is hoped may be possible, the local audit of the Imperial with that of the Colonial establish- ments; and in the case of Colonies whose accounts are already transmitted to this country for audit, the whole expense and inconvenience caused by this duplicate audit will be avoided.

9. The wide experience and skilled staff of the Exchequer and Audit Department enables the Comptroller and Auditor General to give the Colonies the benefit of the most efficient audit at no great expense; whilst his complete independence, and absence of personal relations with the Colonial establishments, allows him to exercise, through the local Auditors acting under his directions, an absolutely impartial and continuous audit upon the general principles now well established. The trial of this arrangement at the Gold Coast and Lagos has shown that it may work without friction, and without causing unnecessary correspondence or delay.

10. An additional advantage (which has already been secured in many Colonies) is the complete separation of the functions of the Auditor and the Treasurer which it readers necessary and possible. The Colonial establishment being completely relieved of all participation in audit functions, it may be expected that the Treasurer will be able to exercise a more efficient control over the financial officers of the Government when assisted by the complete check afforded by an absolutely inde- pendent and impersonal Audit Department. It would, of course, be impossible to continue anywhere the anomalous system under which, in some Colonies, each voucher is submitted for the Auditor's approval before payment; but I do not wish to prescribe whether the approval of payments of sums due for duly authorised services should be given by the Treasurer or by the Colonial Secretary, a point upon which local usages may differ.

11. I request that you will communicate this Despatch to your Executive Council, and that you will lay it before the Legislative Council at an early opportunity. I can hardly doubt that the advantages of the proposal will commend themselves to your advisers as well as to yourself; and I need only add that the result of its experimental adoption at the Gold Coast and Lagos leads me greatly to desire its extension to other Colonies.