§ MR. CANDLISHsaid, he rose to call attention to the imperfect audit of the Public Accounts, and to the failure of the Departments to lay their accounts before the Auditor General. Before, however, adverting to that question, he wished for information with regard to two of the items in the accounts audited for the year ending the 31st of March, 1868. He regretted that the late Chancellor of the Exchequer was absent, as the question would rather apply to the late Government than to the present. In the very first Vote of Class I. there was an excess of expenditure amounting to £6,474 over the sum voted by Parliament. Of this sum of £6,474 no less than £3,700 were expended for works on the Norman Tower and Grand Staircase of Windsor Palace. He wished to ask how it was that a sum had been spent on works which did not appear in the Estimates. He also desired to be informed how it was that in Vote 6 of the same Class, while only £1,576 was voted by Parliament for the Embassy House at Paris, the sum of £3,608 was in reality expended upon it? The reason assigned was the change of Ambassadors, but he did not think that a valid one. The great Departments of the State had failed to state their accounts to the Auditor General in pursuance of the Act of Parliament passed in 1866. Under that statute a huge Audit Department was constituted. It consisted of a Controller and Auditor General, with a salary of £ 2,000 a year; of an Assistant Controller, with £1,500 a year; of a Secretary, with £945 a year; of six inspectors of the first class and seven of the second, and of thirty-four examiners. Altogether there was a complete staff of 129 persons, whoso salaries and the expenses of the office amounted to £ 42,200 per annum. Now, from the Auditor General's Report on the Accounts of the year ending March 31, 1868, it appeared that only eighteen Votes were audited out of twenty-seven in the First Class. Six were submitted for audit in an imperfect form, and for three no accounts were submitted, and no audit took place. Of the sum, therefore, of £ 942,235 one-third never came under the cognizance of the auditor; and whether those sums had been expended properly and satis- 627 factorily there were no means of judging. The Department had failed to render accounts for the expenditure of £4,000 on the Embassy House at Constantinople, and of £76,700 for Harbours of Refuge; £74,837 had been expended on Public Buildings in Ireland; £21,000 on the Sheriff's Court Houses in Scotland, and £27,000 for Rates on Government property, without any accounts or vouchers being produced. He asked whether it was fitting that, in the matter of rates, for which receipts were always given, the Auditor General should have no power of checking the accounts? Bad as things were in Class I., they were worse in the next Class. In Class II., there were thirty-six different Votes for the salaries and expenses of Public Departments; and the House would be surprised to learn that of these only four had submitted their accounts to the Auditor General, and furnished a correct statement of the appropriation of the money which Parliament had placed in their hands. The list of defaulting offices comprised the Privy Seal Office, for which £2,938 was voted for the year ending March 31, 1868; the Paymaster General's Office, which had received £20,200, and rendered no accounts; the Public Records Office, which had received £21,383; the Poor Law Board, which had received £312,798 and rendered no accounts whatever; the Mint, which had received £44,158; the Inspectors of Fisheries, who had had £39,622; the Office of Public Works in Ireland, which had had £24,620; the Chief Secretary for Ireland's Office, which had had £15,735. In all these cases the Act of 1866 had been disregarded and ignored by the Executive Government which placed it on the statute book. There were, besides, the Copyhold, Tithe, and Inclosure Commissioners, who absorbed £20,101; the Inclosure and Drainage of Land Commissioners, £11,600; the General Register Office for England, Ireland, and Scotland, £69,025; the National Debt Office, £16,424; the Public Works Loan Commissioners, £3,449; the Lunacy Commissioners, £14,440; the Postage of Public Departments, £167,350; the whole amounting to £860,639. None of these had rendered accounts to the Auditor General such as he could audit, and they were therefore without certification. Some of these 628 had rendered cash statements, but those which followed had furnished no accounts or statements whatever:—the Houses of Parliament Offices, which had £73,491; the Treasury itself, £52,836; the Home Office, £27,308; the Foreign Office, £67,410; the Colonial Office, £33,250; the Privy Council Office, £30,423. In short, all the great Departments of State, with the exception of the Board of Trade, the Office of Works, the Woods and Forests, and another, had failed to render accounts to the Auditor General, the whole amount placed at their disposal being £1,199,819. The whole amount of money audited was £500,000, the remainder escaped audit altogether. The same neglect of duty was observable in the whole of the remaining five classes of the Civil Service Votes. The Courts of Law and Justice, with the offices attached, comprising Class No. III., had failed to render accounts in such a form that they could be audited, most of them furnishing none at all. Then there were the Colonial Consular Establishments, and other Foreign Services, comprising 229 distinct offices, and amounting to £1,800,000, which furnished no accounts whatever. The same was the case with the Education and Science Departments. In all £8,202,000 had been voted for the Civil Service charges in 163 Votes, on only twenty-four of which had accounts been furnished to the Auditor General and approved by him—eighty-eight had been submitted, in an imperfect form, and of fifty-one no account whatever had been rendered. Now, if a public auditor of accounts were a useless officer, and the work performed unnecessary and unprofitable, let them not throw contempt on their legislation by keeping the Act of 1866 on the statute book. But he held that an efficient auditor was of great use, and it rested with the House to see that the Executive Government secured for them the audit created by the Act. Carelessness in public accounts meant public extravagance, and public extravagance meant additional taxation, which made itself felt by capitalists in lessened means of employing labour, and by the labourer in less work on the one hand and higher-priced provisions on the other, as well as in less education and less moral strength to meet the duties and bear the burdens of life. The responsibility in 629 the matter of course lay with the late Government, not one of whose Members, he regretted to say, was in his place, although they were, he thought, bound to offer some explanation as to how it happened that they had so utterly disregarded the requirements of the law, and were guilty of what, he ventured to say, amounted to a gross neglect of duty.
§ MR. AYRTONsaid, he was sure the House must feel much indebted to his hon. Friend (Mr. Candlish) for having applied himself to the consideration of a subject which was by no means an agreeable one, and very obscure. He, too, regretted that there was no one present on the front Benches opposite to offer any explanation on the subject; but, in answer to the observations of his hon. Friend, he might be permitted to explain that this Audit Act came into operation only on the 1st of April, 1867, that it required a large re-arrangement of many public accounts to give effect to its provisions, and that great difficulties were found to lie in the way in making the necessary changes. To surmount those difficulties was a work of time; and the result was that many accounts for the year ending in March, 1868, could not be completed in the form required by the Act of 1866, and that when the year expired those accounts could not be presented for audit according to the provisions of that Act. They had, however, been referred to a Select Committee which was now proceeding with its investigations into the very question to which his hon. Friend had invited attention, and which had power of calling before it officers for the purpose of receiving from them explanations on all the points to which he had referred. It was not open to him, in accordance with the rules of the House, to enter into details as to the proceedings of that Committee, and he could not, therefore, give his hon. Friend that information which he hoped would be before long at the disposal of hon. Members generally. He could say, however, that, though it was found impossible to render the accounts for the first year, the difficulty would be entirely removed in future years, and there would be no recurrence of the shortcomings shown in the accounts now before the House. When the hon. Member saw the Report and read the evidence, he would find that his 630 own details had not escaped the attention of the Committee. He could assure his hon. Friend that this subject had also engaged the attention of the Government, and that every effort would be used to have the accounts audited strictly in accordance with the requirements of the Act.
§ MR. J. WHITEsaid, that having brought this subject under the notice of the House last year, he was not surprised at the complaint now made by his hon. Friend (Mr. Candlish) at the utter failure of the Board of Audit for the purposes for which it was intended. Considering that the Treasury controlled the Controller, he was sceptical that the Board as now constituted would ever render the service expected of it, and he looked upon the £42,000 a year which this Board cost as a wasteful appropriation of the public money, because if the Treasury did its duty such costly supervision would not be required. If the Board were properly constituted the officials should not be appointed by the Treasury, but by Parliament; and the Board should report, not to the Treasury, but directly to Parliament, which voted the money. The only way of securing an independent and efficient audit, to which the country would look with confidence, was by dissociating it from the Treasury and making it exclusively responsible to Parliament.
§ MR. M'LARENsaid, he thought that the explanation of the Secretary to the Treasury (Mr. Ayrton) was unsatisfactory. No doubt his hon. Friend was not in Office at the time referred to; but in this case the House had to deal with Departments, and not with men. How could the best auditors in the world audit accounts if none were laid before them? Yet that had happened in several instances here. For example, even the Treasury, spending £52,000, the Home Office spending £27,000, and the Foreign Office £67,000, had sent in no accounts; and in another class of cases the accounts sent in were imperfect. On the whole, the House had great reason to be dissatisfied, for the half-yearly accounts of any railway company—of the London and North-Western, amounting to £1,500,000, for example—were audited and a dividend paid within three months, after the books were closed, while the Treasury accounts for the year ending, March 31, 1868, showing an expenditure of only £52,000, had not yet 631 been audited. Any railway company would dismiss from its service men who, dealing with a trifling expenditure like that, could not make up their accounts ready for audit within a month; and if the head men in these Government offices were chosen, from their abilities, as those of any ordinary company were chosen, instead of from personal favouritism or aristocratic interest, there would be no difficulty. It was most discreditable to our finance that such things should continue, and he hoped that no time would be lost in putting matters on a better footing.
MR. GLADSTONEjoined with his hon. Friend (Mr. Ayrton) in regretting that no one was present connected with the late Government to take part in the conversation on this most important subject. Probably, however, if they had been present they could hardly have been in possession of the kind of minute and technical knowledge which would be requisite in order to enable Members of this House to come to a perfectly just estimate of the merits. His hon. Friend the Member for Sunderland (Mr. Candlish) had rendered a public service in bringing this question forward, and he would not put himself in conflict with the arguments used by him or by the hon. Member who had just sat down; but there were special difficulties in the case of Government accounts, so that you could hardly draw any analogy between them and the accounts of railway companies. Where the Government Department was a pure spending department, and nothing else, it was probable that the analogy might to a great extent apply. But even then it must be taken into view that the operations of all the great Departments of the Government extended over the whole world, and also that there was not and could not be a discipline as efficient in the hands of the Executive Government for securing strictness and punctuality on the part of subordinates as private employers could secure. The geographical difficulty was especially to be remembered; for, if questions arose upon the accounts, instead of having like the London and North-Western Railway to send to a place within one day's post in order to obtain explanations, the Government Department might have to send to a place from which it could only obtain an answer within two or three, 632 or even four months. [Mr. CANDLISH: But that would not apply to the Civil Service Estimates.] It would apply to the accounts in general, and even a large portion of the Civil Service Estimates referred to accounts which involved transactions at a great distance, and might require distant references. In the main, however, it must be remembered that our system of accounts was still in some respects in its infancy. Until the Audit Act of 1866 was passed its condition was altogether unsatisfactory. Without presuming, therefore, to the knowledge which would enable him to give specific answers to the statements made, he would say that some degree of patience and indulgence was requisite until such time had elapsed as would justify hon. Members in expecting that the system should be brought to something like perfection. With regard to the remark of the hon. Member for Brighton (Mr. J. White) whom he understood to say that we might save altogether the establishment of the Board of Audit, and transact the business through the Treasury, he had to reply that, in the first place, the Government had used great efforts to effect a saving in the Board of Audit. That Board consisted years ago, within his recollection, of a large number of Commissioners; and they had now by degrees got rid of the whole of those Commissioners. The Board now cost much less, though the general establishment might not cost less; and it must be remembered that some years ago only a small part, comparatively, of the bublic expenditure came under the view of the auditors. He could not hold out the hope to the hon. Member for Brighton that the Board of Audit would be dispensed with, and the business transacted through the Treasury. He maintained, indeed, that the Board of Audit ought to be perfectly independent of the Treasury, and to make its Reports to Parliament. As a matter of fact, it did so make its Reports, though the Reports were transmitted to the Treasury. The Auditor General was a Parliamentary officer, appointed for the security of the State, and nothing would be more satisfactory to him (Mr. Gladstone) than any arrangement tending to place the Auditor General and his Department more closely and distinctly under the control of Parlialiament. It was undoubtedly the busi- 633 ness of that House to be responsible not only for the inception of all public expenditure, but also to follow the money raised by taxation until the last farthing was accounted for; and whatever could be done or suggested in furtherance of that principle would at all times commend itself to the acceptance of the Government.
§ MR. ALDERMAN LUSKsaid, it was difficult to know where or how the money voted by that House went, and he trusted that the Government would endeavour to simplify the matter as much as possible.