HC Deb 12 May 1868 vol 192 cc116-36

said, he rose to move the Resolution of which he had given Notice. The subject was one of great importance, and well deserved the attention of the House. Unless there were some means of controlling the public expenditure, it would be very easy for the Government to ask a larger sum for a popular purpose than was required, and to apply the surplus to a less popular branch of the service. Accordingly, at the end of each Session the Appropriation Act was passed, and an examination of the accounts was, of course, necessary to see that the requirements of the House had been complied with. Up to a recent period the audit had been conducted by and on behalf of the Treasury; but in 1856 the Committee of Public Moneys was appointed, and various irregularities were brought to light, which induced the Committee to recommend that the system of audit should be altered, and that it should be transferred from the control of the Treasury to that of the House. In 1866 an Act of Parliament was passed altering the system, and expressly laying down the principle that the audit of public accounts should be made on behalf of the House of Commons. It was perfectly clear that the relative positions of the Audit Department and of the Treasury were thereby altered. The Treasury now stood in the same relation to the House of Commons as the Accounting Department before did to the Treasury, and the Audit Department now stood in the same relation to the House of Commons as it formerly did to the Treasury. The House of Commons found the money, and the Executive Government spent it; but the House of Commons nevertheless allowed the control of the Department which audited the public accounts to remain in the hands of the Treasury. They all knew that a man could not serve two masters; and in case of a collision taking place between the Executive and the Legislature—which he sincerely hoped would never happen—it was natural that the Auditors, who were controlled by the Treasury, would avoid displeasing those to whom alone they could look for promotion. It was stated that there was very little control exercised over the Audit Office by the Treasury, and he admitted and believed that to be true; for he wished to state here, once for all, that he had no imputation to make against the Treasury, either of the present Administration or the past. He was dealing with principles and not with persona. He would shortly show what the control exercised was. First, he must say that the very abolition of the Audit Board, and the substitution for it of one individual, was, he thought, a mistake, as one man was not so well calculated to withstand the pressure of the Treasury or to give the requisite time for the performance of the duties of audit as a Board was. By the Act regulating the new Audit Department, it consisted of an Auditor General and an Assistant Auditor, both of whom held patent offices, and it might be supposed, therefore, at first sight, that their position was really as independent as that of a Judge. After them came an army of inspectors, clerks,' and so forth, who were required to carry on the work of the Office, With regard to the Auditor General, the Act provided that he should have a salary of £2,000 a year paid from the Consolidated Fund; but there was a curious proviso at the end of the clause to the effect that, if he desired it, he might come upon the Superannuation Act, by which the Government would have the power of rewarding him according to their sense of his merits, as well as of enabling him to retire from the service upon an allowance before his full time was expired. The Assistant Auditor might do the same thing, but he had officially very little power; because, unwisely as he thought the House had struck out a proviso by which the Assistant Auditor would have been enabled, in case of a difference of opinion arising between himself and the Auditor General, to report separately to the House. If they had allowed that arrangement to stand they would have had two concurrent officers instead of one; and, in the case of a difference of opinion between them, it was important that the House should be informed of it. As it was, however, the Assistant Auditor was little better than a head clerk. From these considerations he thought the Treasury had great power over the heads of the Department; but in the lower offices they had still more, for they not only had the power of appointment, but of reward and advancement, so that unless they rendered themselves acceptable to the Treasury, the inspectors, clerks, and other subordinate officers had no hope of advancement in the Civil Service. They had also power to regulate the duties of the clerks; and they had exercised that power in a way which he thought was detrimental to the public interests, for they had reduced the number of classes from four to three, by which the chances of rising in the service were to a corresponding extent diminished. He thought, therefore, he had made out the terms of his Resolution, that the control and audit of the public Revenue ought to be independent of the Treasury, and directly responsible to that House. He thought he had also made it clear that that independence and direct responsibility did not exist at present; and, therefore, that the system called for a thorough revision. But, by a revision, he had no desire in any way to restrict or impede the operations of the Treasury, They were an Executive Department of the State, and they often had to perform their duties in haste and under much pressure; and he had no doubt that they almost always acted in good faith. If occasionally they were wrong it probably was not from bad intention; but, whether from bad intention or not, that House ought to be the judge. He would not have the Audit Department interfering with the Treasury. It was not an Executive or interfering Department, but merely one intrusted with the examination of accounts, and the duty of reporting to the House in respect of them. It might be said that the Audit Office was under the control of that House, as it was in direct communication with the Committee on Public Accounts; but he could not think that that control was very efficient. The Committee was, no doubt, composed of very able men, but they had not the means of checking the accounts. The two Members who understood the subject best were the only two Members who were not likely to throw light upon them—he meant the Secretary to the Treasury and the ex-Secretary—and they represented the men who were to be put on their trial. There were also independent Members on the Committee, like the hon. Member for Peterborough (Mr. Hankey); but these Gentlemen could not be expected to devote their whole time to the examination of the public accounts. What he wished to suggest instead of the present system was the appointment of a Standing Committee of the House, who should have the Audit Department under their direct control. The Auditor General would be their officer, and would be in direct communication with them; and they would then have some hope of knowing where deviations from the Appropriation Act bad occurred in the administration of the finances of the country. It had been said that this was a moribund Parliament, and that it represented an expiring Constitution. For his part he did not look with any apprehension to the result of the Bill of last Session—although they should look forward to great changes. But it was desirable, he thought, to point out to the new Parliament—who would be new to the work—that, in the opinion of the present House, the present machinery of the Audit Department was defective in the respects pointed out by his Resolution. He hoped to have the support of the Government for the views which he now advocated, and which were, indeed, admirably summarized in a speech made by the present Prime Minister, in April 1856, in which the right hon. Gentleman said— An audit administration should be complete and independent. The whole accounts of the country should be placed under its control, and it ought to be responsible directly to that House."—[3 Hansard, cxli. 700.]


, in seconding the Motion, said, he had always been of opinion that the Act of 1866 was a mistake, and had been founded on wrong principles. One great objection to it was that it united together two functions that ought never to have been combined—namely, the office of Controller General of the Exchequer with that of Auditor General. The Controller General was the chief accountant of the Crown—all the public monies stood in his name; but no accountant ought to be an auditor. Take the case of any public company or great commercial establishment. What would be thought if the person to audit the accounts was the cashier of the company? Would a gentleman allow his accounts to be audited by the steward who received his rents; or a shopkeeper employ to audit his accounts the man who had the control of the till? It was absurd, then, that the accountant of the Crown should be also the chief and, indeed, the only auditor of public accounts. That was a fundamentally vicious system. It appeared also to him that the Audit Department, to be efficient, should be a great and powerful Department—directly responsible to the House, and having complete control over the business it had to do, and not a subordinate Department. The Court or Chamber of Accounts at Paris was not a subordinate Department of the State; it was what was called a Sovereign Court. Besides its mere accounting power it had a judicial power over accountants, might order them to bring in their accounts at particular times, prescribe by what vouchers and other documents those accounts should be supported, and so forth. This seemed to him to be a model accounting system. It had been laid down on high authority that every Department should have a complete control over its own business; but the Board of Audit formerly, and the Accountant General now, had no such power. Accounts were sent in, and, if anything was wrong, it was queried and sent back; but there was no power of compelling the Auditor to answer queries; and, in case of default, there must be a reference to the Treasury, who would instruct the Attorney General to proceed against the accountant. There was another defect. Sometimes the Board of Audit were very much encumbered with business; at other times it had scarcely anything to do. The reason was because the Board of Audit had no power to regulate its own business, to prescribe the times at which the accountants should bring in their accounts, or to compel them, unless by a roundabout process, to produce documents or vouchers, or to answer questions. They might make an order on the accountants; but, if the accountants did not obey, there was no remedy. They might call the spirits; but, if the spirits did not come, they could do nothing. Therefore the Audit Department was practically impotent to perform its duties, as it was in the hands of the accountants and of the Treasury. Now, the Audit Board ought to have the power—if necessary, by taking him into custody—to compel an accountant to appear before them. They ought to have a power similar to that of the Courts of Law of committing for contempt. He was convinced that, until the Board received independent powers over accountants, the audit of the public accounts would always be a matter of mere form. When he was a Member of the Public Moneys Committee, he remembered that the Audit Board was examined as to their functions, and it appeared that they were very much afraid of the Treasury—that they would not presume to ask any questions of that Department, or meddle with it in any way whatever. Now, the Audit Board ought to be supreme, so far as the functions of audit, went, over all the Departments of the State; it ought to be able to call them to account and exercise authority over them. Of course, it was much easier to bully an individual than a body of men. Not that he meant that the present or the late Government would do such a thing; but Parliament made laws to restrain, not good men, but bad; and times might come when the Treasury or the Government might choose to put a pressure on the Auditor General, which he, as an individual, might not have the power to resist, or who might be willing to give way; and, if he were willing to become subservient to the Government, he would do so without fear of detection. The Audit Board was little better than a Department of the Treasury. When the Bill on the subject was under discussion, he suggested that the Auditor General ought to have the appointment of his own officers, so that he might have people around him on whom he could rely; but, at present, all his officers were appointed by the Treasury, and might, therefore, have interests adverse to him. In fact, the clerks might, in some instances, be spies upon him—they might take the part of the Treasury against their superior, and be made use of by that Department to hoodwink or deceive. They all knew what "cooking accounts" meant; and the Auditor General might find it extremely difficult to prevent that curious art from being exercised in his Office. In the Public Moneys Committee, the late Mr. Wilson, then Secretary to the Treasury, took a very active part in the proceedings, and his view was, that there should be little or no control over the Treasury; that all monies should be paid into that Department; and that it should do exactly what it liked. But that was not the view of the majority of the Committee. Now, the Treasury was an encroaching Department; it had the greatest power of any Department in the State, because it bore the purse, and therefore it should be looked upon with a certain amount of jealousy, and kept under control. But the whole tendency of their legislation of We years had been to make the Treasury more and more independent—in short, to constitute it the master of all other Departments in the State. That he thought very objectionable policy; and, if there was one Department over which the Treasury should not be allowed to have control, that Department was the Board of Audit.

Motion made, and Question proposed, That those who conduct the audit of Public Accounts on behalf of the House of Commons ought to be independent of the Executive Government and directly responsible to this House; and that, inasmuch as the appointment, salaries, and pensions of the officers entrusted with the conduct of such audit are more or less under the control of the Treasury, the present system is one which imperatively calls for revision."—(Mr. Dilwyn.)


, while admitting that the Audit Department was open to improvement, contended that it was far superior to the arrangements which existed prior to 1856. Any one taking the trouble to examine the accounts presented by that Department could inform himself extremely well of the mode in which the public money voted by the House had been expended. His hon. Friend (Mr. Dillwyn) had urged that the audit should not rest with any Department which was concerned in the expenditure, and the case of a steward appointing his own auditor had been mentioned. This, however, was not the principle on which the Audit Board was established. The Treasury was responsible to the country, and should alone possess the power of controlling the expenditure of the public money. To take away the power of controlling the expenditure from the Treasury, and place it in the Audit Department, would be to uproot every principle which obtained in this country with regard to the expenditure of public money. The Treasury was necessarily the spending Department, and all that Parliament could do was to ascertain that the money voted had been expended in the manner directed by the Appropriation Act. His hon. Friend had argued that the Auditor General ought to be independent; but this was already the case; for, though appointed by the Government of the day, he became, when once appointed, independent both of the Government and of Parliament, As to the proposal that he should nominate his own clerks, it must be remembered that he had no communication with the House. He would necessarily, therefore, have to apply to some Department for their salaries, and to what Department could he apply but to the Treasury? Under the present system the clerks were appointed by the Government, who were responsible to Parliament, and their salaries were voted by the House. Thus Parliament had really more control over these officers than if they were appointed by the Auditor General, independent of Parliament. Several years used formerly to elapse before the application of the sums voted by Parliament could be entirely tested; but he believed that during one Session the expenditure of the previous Session was now thoroughly audited and laid before the House. He believed this point had been nearly reached, and it ought, at all events, to be aimed at. With regard to the Controller of the Exchequer, Controllers had very different functions in different Departments, and that officer had nothing to do with the expenditure. All he had to do was to satisfy himself, before the Treasury could draw 1s. of the annual supply from the Bank of England, that it had been authorized by Act of Parliament. He admitted that the accounts might be simplified and rendered more intelligible; but there was no ground for regarding the present arrangement as a retrograde one, or for supposing that the system proposed by his hon. Friend (Mr. Dillwyn) would be an improvement.


said, that, having read with some attention the evidence taken before the Public Moneys Committee, he felt inclined to concur in the views of the hon. Member for Swansea (Mr. Dillwyn) and the hon. Member for Dundalk (Sir George Bowyer) rather than those of the hon. Member for Peterborough (Mr. Hankey). Mr. Romilly, in his evidence before that Committee, said— If a subordinate officer were placed at the Treasury for the purpose of audit, it would be a system that could hardly command confidence, and certainly would not be entitled to it. There is a very great difficulty in a Board checking the great public Departments. … In the case of the army and navy accounts there is an appeal to the superior authority of the Treasury, and the Treasury themselves have the power of deciding on disputed points. The check is one over which the Treasury have full control. … The check would be very different if it were to be exercised not by, or on behalf of, the Treasury, but over them. There is always a risk in cheeking the accounts of any Department by officers placed in that Department, that these officers become part and parcel of that Department. Mr. Romilly's opinions on this subject were entitled to great consideration. Alterations had since been made, and the Audit Board now exercised an important function in seeing that all expenditure was in conformity with Acts of Parliament. It might be said that this was a mere matter of form. Lord Monteagle's experience certainly was to the contrary; for in his time there were several differences with the Treasury. And if control and supervision were necessary in the days when the Controller General and the Audit Board were separate, it was much more necessary now that these two Departments were united. Every Opposition found fault with the Ministerial Estimates; but when they in turn succeeded to power, the tendency was always to increase, and not to diminish. The people of this country wanted to know the reason why expenditure, which was always represented in the first instance as merely temporary, was suffered to become permanent, and they called, and would call more strongly hereafter, for an account distinctly stated. The necessity for some impartial and external audit was evident. This might be thought a small matter; but the real fact was that all attempts at improvement had been but gradual and tentative since in 1780 the great jobbery of that day first attracted the attention of Burke. There was still room for more improvement, It was very easy to those versed in figures to make an account appear perfectly fair, while all the time it covered very gross extravagances. The hon. Member for Swansea (Mr. Dillwyn) had rendered good service in calling attention to the matter, and he should certainly support him if he went to a division.


said, he was much surprised that the language of the hon Member for Peterborough (Mr. Hankey) varied so widely from what it was a little time ago, on this very question. The present system of audit was established under the Act of 1866 (29 & 30 Vict., c. 39) "An Act to Consolidate the Duties of the Exchequer and Audit Departments; to regulate the Receipt, Custody, and Issue of Public Moneys, and to provide for the Audit of the Accounts thereof." When that Bill was read a second time the hon. Member for Peterborough said "it was practically an abolition of all control over the issues of Votes in Supply." And he (Mr. White) then and now was of the same opinion. The question now raised, although dry, was, in its ultimate bearings, of deep interest to the taxpayers of this country. He must premise that he could not agree with the hon. Member for Dundalk (Sir George Bowyer) in his commendations of the previous system. How utterly inefficacious that system was would be admitted on the allowing of Mr. Anderson before the Select Committee on Public Accounts in 1866, to wit, that out of an army expenditure of upwards of £14,000,000 the Audit Board objected only to the appropriation of sundry items, together amounting to £295 5s. 10d. Thus, this audit was really no audit of disbursements, but merely an examination of accounts. Again, under the old system Sir George Lewis, when Chancellor of the Exchequer, admitted that the Exchequer accounts were never audited, whilst the cost of the Audit Board was about £40,000 per annum. Under the new or re-organized system he (Mr. White) found that 127 persons were in the Audit Department at an annual charge of £42,000, an amount, he ventured to think, which ought to be adequate to secure the thorough performances of its very important duties. He regretted that the Audit Bill of 1866 had not been modified in accordance with the recommendations of the Select Committee on Public Moneys, to which Committee it had been specially referred. Their idea was that the public audit should be made a really great and independent Department of the State, but responsible only to the House of Commons for the proper performance of its duties. They were of opinion also that there ought to be an Assistant Auditor, possessing co-ordinate authority with the Auditor General, and hound, in case of difference, to report the same to the House. Now, however, all power and authority was vested in one officer, with the double title of Controller and Auditor General. He should hereafter show that the Controller and Auditor General was controlled by the Treasury, whoso issues he ostensibly controlled and whose accounts he ostensibly audited. Thirty-seven years ago Sir John Bowring was sent by the then Government to examine and report on the method of keeping and auditing the public accounts of France. He thought the late Ministry need not have disdained to copy from our neighbours in that respect, seeing that Mr. Cobden had told him that he considered the French system to be so far perfect that it had long proved to be completely efficacious in providing against all malversation or misappropriation of the public moneys, He (Mr. White) was impressed with the conviction that the House must amend the present system of audit before it could get a practical control over the public expenditure. And the first step to be taken was to make the Audit Department entirely independent of the Treasury and alone responsible to the House of Commons. He held that the Auditor General should be permitted to appoint his own clerks and assistants as the Judges now did. Seeing that our normal expenditure was now £18,000,000 more per annum than it was a few years ago, he must be forgiven if he expressed a profound distrust in the Treasury as a supervising administrative department. It seemed to him an obvious anomaly that the Treasury should be empowered by the Act of 1866 to control the Controller and Auditor General. Our financial history was replete, unhappily, with gross frauds, malversations, and wrongful appropriations of public moneys. He found the first Return issued under the new audit was an account of the public income and expenditure, by which he learned the bare, unpleasant fact that the "excess of total expenditure over income in the year ended 31st March, 1868, was £2,166,023 13s. 6d." It was true, that the Chancellor of the Exchequer, when making his Fnancial Statement had blandly assured the House that he had exceeded the vast Estimates originally voted for the Army, Navy, and Civil Services. He (Mr. White) thought full printed explanations should be uniformly given for any expenditure not previously voted in Supply. And he would recommend to the Government, as a model for imitation, the Return moved for by the Secretary of State for India (Sir Stafford Northcote) in 1862, giving the amounts of excesses of Admiralty expenditure in the previous year, with the explanations assigned for those excesses by the Accountant General of the Navy. As illustrative of the practical dependence, the virtual subordination of the Audit Department to the Treasury, he would only refer to some of the clauses in the Act of 1866, under which it was now constituted. He found by Clause 8 of that Act that the Treasury was empowered to appoint officers and clerks, and to regulate their numbers and salaries. And by Clause 30 the Auditor-General, with consent of the Treasury, may dispense with an examination of vouchers. Besides this, by Clause 43, any Accountant dissatisfied with any disallowance or charge in his accounts made by the Auditor-General may appeal from his decision to the Treasury, who may direct the relief of the apellant, wholly or in part. And the same Clause declares that "the Controller and Auditor General shall govern himself accordingly." He would then ask was it not absurd to pretend that the present system of public audit was a valid and efficient one? With perfect confidence in the integrity of the present Controller and Auditor General (Sir William Dunbar) he could not help fearing, mayhap Borne years hence, there might be some startling evidence of the inefficacy of the present method of check and supervision of the public expenditure. Some of his hearers could not already have forgotten the gigantic Exchequer fraud perpetrated by Beaumont Smith. Besides, he (Mr. White) must remind the House that some men, and even officials too, have very misty notions of what were the functions or duties of an auditor. A remarkable instance came under the cognizance of the House only a few years back. The auditor of the Duchy of Lancaster—although holding a patent office—was summarily dismissed because he required to know whether the balance alleged to be lying at the banker's was really in their hands—the neglect of which simple precaution, by the way, enabled Pullinger to rob the Union Bank of £250,000. The Attorney General of the Duchy was asked by the Committee whether the auditor, if called upon by a Minute of the Chancellor, or Council of the Duchy, to sign a bill or document which, to his knowledge, was a misappropriation of the property, or contained any fraudulant act upon the property of the Duchy should do so, on the mere production of the Minute. The answer of the Attorney General of the Duchy was— Yes; I have no doubt, in his pure character of auditor, although he was aware the Chancellor had either committed a fraud in passing the Resolution, or had been imposed upon by fraud; if the Chancellor persisted in the Minute, it would be the auditor's duty to sign it. He had said enough, but he trusted in no carping or captious spirit. His sincere desire was to secure such a system of public audit as should deserve the public confidence. The House should not forget what had happened, and what might happen, unless proper checks and safeguards were provided by Parliament. As custodians of the public purse they should ever remem- ber the terse dictum of Lord Lyndhurst, "That jealousy, not confidence, is the eternally governing principle of the British Constitution."


said, it was right that the House of Commons should be satisfied that the audit of the public accounts should be entirely independent; but had any case been made out against the independence of the Audit Department? The hon. Member for Peterborough (Mr. Hankey) had so fully and clearly answered the hon. Member for Swansea (Mr. Dillwyn) on that point, that he (Mr. Hankey) had relieved him from a great part of the duty which otherwise it would have been incumbent on him to perform. There seemed to be some confusion in the minds of the hon. Gentleman who made the Motion, and of the hon. and learned Baronet who seconded it, as to the functions of Controller and Auditor General. They had spoken of that officer as an accountant in one capacity and an auditor in another. Now, he did not understand in what sense the Controller and Auditor General was an accountant [Sir GEORGE BOWYER: As Controller General he is an accountant, but as Auditor he is not an accountant.] The hon. Member for Swansea said that the whole of the public money was paid into his account; no doubt the money was paid into the Exchequer acccount; but it should be remembered that the Controller and Auditor General had not the power of drawing money from that account. The Treasury had to make application to the Controller and Auditor General; and when he had satisfied himself of the legality of the demand, he gave credit to the Treasury for a certain amount. But when that was done it was the Treasury, and not the Controller and Auditor General, who were concerned with the issue of the money. When it was issued, then came in the function of the Controller and Auditor General as Auditor, to see that the money had been spent in accordance with the provisions of the Appropriation Act. It appeared to him that there was now a very proper and stringent system of check; and, as far as the Act had been tried, he must say it had worked well. He might remark that the present Government were not responsible for that Act, which was introduced by the late Government, and had received the sanction of the Committee on Public Accounts. The only fault, as far as he was aware, to be found with the Act, was that the alteration which it introduced has been pressed forward somewhat too hurriedly; and the consequence was that no little difficulty had been experienced in giving effect to its provisions. In all other respects it had worked well. The hon. Member for Peterborough (Mr. Hankey) had shown the great improvement which had been brought about by the Act with regard to the check on the expenditure of the public money. The hon. Member for Brighton (Mr. White) had quoted certain expressions made use of by the hon. Member for Peterborough on the second reading of the Bill, previously to its being sent to the Committee on Public Accounts. The hon Member for Peterborough, however, served on that Committee; and if, after a careful examination of the Bill, he became satisfied with regard to its provisions, the hon. Member's more matured opinion ought surely to be taken in preference to that which he expressed on the second reading But it was said that the Controller and Auditor General was not really independent; and that was the point to which he would now address himself. Certainly, if he was not independent, he ought to be made so; but he maintained that he was independent, and he did not think there was any force in the arguments which had been; adduced this evening with the view of showing that he was not independent. It was true that he was appointed by the Government of the day; but so was every public functionary in this country. It was obvious, indeed, that the Crown must make the appointment; for he did not imagine that even the hon. Member would propose that the Controller and Auditor General should be elected by the House of Commons. It ought to be borne in mind that the Controller and Auditor General held his Office by patent during good behaviour, like the Judges of the land; and that, consequently, he could only be removed by an Address of both Houses of Parliament. As regards his tenure of Office, therefore, no one could deny that he was completely independent. But it was also alleged that he was not independent because he did not possess the power of appointing his own officers. Now, considerable difficulty would arise if a person who was debarred from sitting in that House had the appointment of officers in the Audit Department. But let the House consider what was the nature of those appointments. At present, if a vacancy occurred in the Department promotions were made; the result being that a junior clerk's place had to be filled up by the Treasury; and the hon. Member would surely not pretend to say that the appointment of a junior clerk by the Treasury really interfered with the independence of the Controller and the Auditor General. The hon. Member, however, had remarked, and with truth, that a junior clerk might in course of time attain to the highest posts; but he had overlooked the circumstance that, under the Act, all promotions in and removals from the Office were entirely in the hands of the Controller and Auditor General. Consequently the officers were not dependent, in regard to their promotion, on the Government of the day. Then an objection was raised by the hon. Member that the Treasury bad the power of fixing the amount of the retiring allowance of the Controller and Auditor General and of other officers in the Department. Now, in point of fact, the Act prescribed the limits within which those allowances might be granted; or, if those provisions were not resorted to, the retiring pensions were to be granted under the General Superannuation Act. If any special pension were awarded to the Controller General, or any other officer in the public service, beyond the limits laid down in the Superannuation Act, it was necessary that a special Minute should be made and submitted to the House of Commons, which of course had then a full opportunity of considering the matter. In regard to the salaries in the Audit Office, it had been pointed out by his hon. Friend opposite that the Controller and Auditor General, not being a Member of that House, was unable to bring forward any Estimates for the salaries in his Office. The salaries bad to be submitted to a Vote of the House; and if the Treasury were to make them unduly high for the purpose of obtaining influence, the vigilance of the House would soon detect such proceedings. It could not, therefore, be said that this was a matter which really interfered with the independence of the Office. Allusion had been made to the Treasury determining what should be the form of the accounts. The Treasury had been endeavouring to adopt such forms of accounts as would correspond with the Estimates; and since the Treasury settled the form of the Estimates, it was desirable that they should settle the form of the accounts also. No great stress could be laid on that circumstance, which certainly did not interfere in any way with the independence of the Controller and Auditor General. He was of opinion that, by the operation of the Act, the House would gain a complete knowledge of the manner in which the public money had been expended. At present it could hardly be said that the Act was in full operation; and he had been informed by those who were well acquainted with the subject, that three or four years would probably elapse before the system got into perfect working order. He did not say that it might not be necessary to introduce some modifications into the Act; but he must express his opinion that its principle was a sound one, and that, as far as experience went at present, it had worked remarkably well.


said, he was of opinion that a considerable improvement had been effected in the system of audit by the Act of 1866, for which the country was mainly indebted to the right hon. Gentleman the Member for South Lancashire, but that it was still in some respects deficient. The Audit Department ought to be an independent one, responsible to Parliament alone, and its duty should be to see that the money voted in the House of Commons was applied to the purposes for which it was voted. Therefore, the Audit Department should be supreme in respect of audit over all other Departments, and responsible only to Parliament. Within his own Department the Auditor General ought to be supreme and independent. The Select Committee recommended that the Assistant Auditor General should have the power of reporting separately to Parliament; but it would have been most undesirable to give effect to that recommendation. It was inconsistent with one of the main objects of the measure, which was to substitute individual responsibility for the divided responsibility of a Board. The proposal was a sort of compromise between two things, either of which alone might have been desirable; but of the two he preferred individual responsibility. The matter is very clearly stated in the Correspondence laid before Parliament last year. It said— The main object of substituting for the Board of Audit a single chief with supreme authority in the Department, is to fix the whole responsibility of the due execution of all the duties upon one public officer. It is true the Bill emerged from the Select Committee with some important alterations. A power was given by it to the Assistant Controller and Auditor, to report jointly with the Auditor General. On what grounds this change was proposed by the Committee it was difficult to say, as they neither took evidence on the point, or made any allusion to it in their Report to the House. When the Bill came back in its amended form to the House, it was pointed out by several Members, and among others by the right hon. Member for Oxfordshire (Mr. Henley) that the proposal to assign co-ordinate functions to the assistant officer was inconsistent with the measure itself, one of the purposes of which was to substitute individual responsibility for the divided action of a Board. The Chairman of the Select Committee (Mr. Bouverie) represented to the then Chancellor of the Exchequer the desirableness, on public grounds, of omitting the provision in question. This suggestion met with Mr. Gladstone's ready acquiescence, as it was an admission of the soundness of the original views of the Government—that on the supercession of the Board of Audit, individual responsibility was the only alternative basis upon which the business of the Consolidated Exchequer and Audit Department could be satisfactorily conducted. It did not seem a practicable proposal to have a Standing Committee of that House associated with the Auditor General, who would be able to throw responsibility upon them. The Auditor General should be the supreme and final authority us to the form in which the accounts should be made out. Much was said of "Departmental audit;" but that was simply an. Office examination of accounts, and could not be spoken of in the sense of an Appropriation audit, the object of which was to see that money was spent under proper authority from the Treasury. The audit of the India Office accounts was first intrusted to an auditor at £200 a year; a more adequate salary had since been paid, but it would be well if the India Office accounts were also submitted to Parliamentary audit. With regard to the Motion of his hon. Friend the Member for Swansea (Mr. Dillwyn), he thought it was substantially right in its spirit; but, in his opinion, it was not necessary that it should then be pressed upon the consideration of the House.


wished to say a few words on a question which had been brought forward so much to the public advantage by the hon. Member for Swansea (Mr. Dillwyn). Many interesting questions had been raised in the debate, such as the audit of Indian expenditure and other matters, which would doubtless be again brought forward; but he would confine himself to two—namely, the importance of securing in the Executive Government a proper system of control over the public expenditure, and, in the Audit Department, a proper system of audit for the information of the House; and these two things had been in some respects a little confused. On the first he deprecated the language of his hon. Friend the Member for Dundalk, who said the House should be jealous of the power of the Treasury over other Departments, and several hon. Member, perhaps without weighing their language, had spoken of the Treasury, as a great spending Department. Now there certainly were large spending Departments, and over these it was necessary that the House should strengthen the control of the Treasury, removing from it the idea that it was a spending Department and resisting the tendency to place the expenditure of money in the hands of the Treasury. If this were always done, the Treasury would be and should be considered the instrument of and fellow-worker with this House in the cause of economy; and, considering the little financial control now exercised by Parliament, if the House were jealous of the Treasury and gave expression to that jealousy, the Departments would be unrestrained. Coming to the question of audit, it was quite true that until 1833 the audit of the public accounts of the country was conducted simply for the Treasury, and for no one else. There was no Appropriation audit. All this was now at an end. By the Act of 1866 the whole of the public expenditure—and not only the Army and Navy Services and some Civil Votes which had been regulated by intervening Acts—will be subject to Appropriation audit. Instead of an irresponsible Board, an Auditor General, holding Office by the tenure of a Judge, had been appointed and he had absolute control over the promotion of his officers and the business of his Office. The hon. Member for Swansea (Mr. Dillwyn) said that the Audit Department ought to communicate their accounts direct to Parliament. But the Act directed that the Audit Commissioners should send the accounts direct to Parliament in case the Treasury did not do so within a specified time. The hon. Member also said the Auditor General ought to have the power of selecting his officers. But, except first appointments of young men of eighteen or twenty, he had absolute power in the promotions of his officers, and could remove or dismiss them as he liked. As to the pension of the Auditor General, no doubt he was entitled to a fixed pension and to no more; but if he had served in any other public Department he would have a right to a fixed sum in regard to that service. The whole question resulted in whether or not any practicable amendment of the Act of 1866 could be suggested, or anything could be advanced which would justify them in altering it. But the result of the working of that Act would not be apparent until next year, and it would be absurd to amend an Act before they had a practical experience of its working. Before 1866 questions respecting pensions, appointments, promotions, and so forth, were settled by the Treasury, and the Audit Board was a subordinate Department; but the Act of 1866 made that Board independent of the Treasury. It had been suggested that the clerks of the Audit Office ought to be appointed by this House, or by a Committee of the House, or by the Speaker; but he thought the House would pause before assuming patronage of that kind. He was as anxious as anybody could be to make the Audit Department independent, and to carry out reforms in the system. He believed that reforms might still be made with advantage in that system, but nothing had yet occurred to require amendment of the Act. Some remarks had been made as to the impropriety of placing officials or ex-officials on the Committee upon Public Accounts, The position he held upon that Committee was no doubt one of honour, but it also involved great trouble and labour, and he could only say that if any section of the House did not think he was likely to fill the position impartially he should very gladly relinquish it. If, however, all those who had had experience of the public accounts were to be withdrawn from the Committee, and if the duties cast upon the Committee in reference to audit were at the same time to be increased, he was afraid that the control over the public expenditure and accounts would take a much longer time to work out than it did at present. He hoped that under all the circumstances his hon. Friend would not divide the House upon an abstract Resolution.


said, he was by no means satisfied with the explanation or the interpretation put upon the Act of 1866 by his hon. Friend (Mr. Childers). What he desired was to secure that, as far as possible, the audit of public accounts should be wholly independent of the influence of the Executive, and that was what was recommended by the Committee on Public Accounts, as an audit in connection with the Treasury gave the Executive a very obvious power of control. He had no wish to interfere with the free action of the Executive; all he wanted was to secure a complete Report to Parliament of how the money voted was expended. He should therefore feel it is duly to persist in his Motion.


rose to make an appeal to his hon. Friend. He begged him to observe the position in which he proposed to place the House. The Motion consisted of two Resolutions, the first of which was— That those who conduct the audit of Public Accounts on behalf of the House of Commons ought to be independent of the Executive Government, and directly responsible to this House. Now that was a proposition which was full of undeniable and sound doctrine. The Audit Department ought to act on the part of the House of Commons, and ought to be directly responsible to that House so far as it was in the power of the Executive Government to make it. It was impossible to deny that proposition, and why, then, should his hon. Friend make the House divide upon it? The only course that could be taken against his hon. Friend would be to move the Previous Question; but that was a course which he should be loth to adopt, as it would seem like placing an obstruction in the way of his hon. Friend, whose object was a rational one. When once the House had got a fair sample of the working of the Act of 1866 in the shape of the accounts produced under that Act, then, if there was a sentiment on the part of his hon. Friend or the House that there ought to be further inquiry and that further legislation might be needed, he should think it extremely unwise on the part of the Executive to place any obstacles in the way; because if there was any jealousy felt by the House of Commons, that jealousy would be sure to be stimulated by any resistance of the Government, even though plausible reasons might be given for that resistance. If a portion of the representatives of the people entertained jealousy and suspicion with respect to the machinery provided for auditing the public accounts, the existence of such feelings would be a good reason for granting any further inquiry which might be demanded. But his hon. Friend, he thought, would see that it was not desirable for the dignity of that House to call upon it to assert this first proposition as an abstract Resolution; for every one, whether on the Opposition or the Treasury Bench, must be of one mind with his hon. Friend on the subject. The second Resolution, as a matter of fact, was more doubtful. That Resolution was— That, inasmuch as the appointment, salaries, and pensions of the officers intrusted with the conduct of such audit are more or less under the control of the Treasury, the present system is one which imperatively calls for revision. Now, the words "more or less" made a very important difference, for if the salaries and pensions were "more" under the Treasury, or, in other words, if they were to a considerable degree under it, the system might call for revision. But if they were but little under the Treasury, the call for revision might not be so imperative. The House had not really got the facts to enable it to judge how the new system was working, and he thought it would be very disadvantageous to the cause which his hon. Friend had taken up if he were to insist on the House giving judgment before the materials of that judgment were in their hands. He hoped, therefore, his hon. Friend would not force a division in a case in which the apparent weight of authority against him might produce an effect unfavourable to the object he had in view.


said, he could not resist the appeal which had been made to him by his right hon. Friend.

Motion, by leave, withdrawn.