HC Deb 21 March 1898 vol 55 cc531-40

In rising to move the Resolution which stands in my name I should explain that the reason why I venture to bring this subject forward at this inconvenient hour and in this form is that this is the only opportunity we have of again pressing on the Government a question which has been already twice called to their notice, and on each occasion the view which I now wish to put before the House has been supported by a clear majority of the Scottish Members present. I would just recount to the House the position of this question. When the Education (Scotland) Act, giving an Aid Grant to Voluntary schools, was passed last year, this question was pressed on the Government. Again, the other day, when the money was voted in a Supplementary Estimate, the matter was pressed on the Government, on the ground that the right hon. Gentleman opposite, during the Debate on the Bill, had given us an undertaking that some additional provision should be made for the audit of the accounts of Voluntary schools. The words used by the Lord Advocate, as reported in HANSARD, vol. li., p. 678, were these— The Lord Advocate said he thought there was a good deal of misunderstanding about the matter. He had said that there certainly would be an audit, but that he could not bind himself to there being exactly the same regulation as was provided in the English Act. He thought that under the Bill as it stood they had exactly as much power, but he was perfectly willing to insert the words of the English Act. As a consequence the words of the English Act were inserted, and I think a good many Members were very greatly astonished at the attitude which the Lord Advocate took on this question on the most recent occasion of its being drawn to his attention. Surely, after the words I have just quoted, we have a right to expect that there would be some safeguard in respect of audits that did not exist before. I do not intend to argue on the merits of the question, but twice from these Benches it has been urged on the Government, supported by a majority of Scotch Members, and the Government have not seen fit to listen to our request. I would only add this in conclusion: it does seem to me to be an extraordinary thing for those who have the care of Scotch education to maintain the present system, which is this, that while in the public schools there is great and minute inspection and audit of accounts, in Voluntary schools there is no audit whatever. We do not ask for what is in the English system, but we do ask that the schools shall all be protected equally, and that the interests of the taxpayers shall be safeguarded in respect of the expenditure on the one class of schools just as much as in respect of the expenditure on the other class. I beg to move the Resolution which stands in my name.

Motion made and Question proposed— That an humble Address be presented to Her Majesty, praying Her Majesty to withhold her consent from the Education (Scotland) Code (1898) until the same shall have been amended by the insertion of a provision requiring, as a condition of a school receiving a share of the Aid Grant under the Education (Scotland) Act, 1897, that the accounts of the receipts and expenditure of the school shall be annually audited and reported upon by the accountant of the Board of Education, in like manner as is prescribed by the Education (Scotland) Act, 1872, in the case of School Board accounts."—(Captain Sinclair.)


I cannot help repeating the remark I made last year—that there does seem to be a great deal of misunderstanding in the mind of the hon. and gallant Member as regards his matter. I, of course, perfectly understand his motive, which is that there should be, according to his view, a clause in the Code which should prescribe for the accounts of Voluntary schools the same audit as is prescribed by Statute for the accounts of Board schools—namely, an audit by the accountant of the Education Department. But where the misunderstanding comes in is this: the hon. and gallant Member said a moment ago that there was no audit of Voluntary schools. [Captain SINCLAIR: No Scotch audit.] The hon. and gallant Member said there was no audit of Voluntary schools.


If I interrupt the right hon. Gentleman, it is because I desire that this question should be argued on its merits. If I made that statement, I apologise. I am only anxious that what is right should be done, and that the House should express an opinion as to what is right.


However, quite apart from what the hon. Gentleman said, the point is whether there is an audit of the accounts of Voluntary schools. I hold in my hands a form which has to be filled up by the managers of every Voluntary school in Scotland that gets a portion of the Government grant or a portion of the special Aid Grant of last year. There are many questions which have to be answered with which I need not now bother the House, but on pages 2 and 3 there is a statement of accounts, drawn up in the form of a charge and discharge sheet, the one side being income and the other expenditure. The income side covers various heads—grants, endowments, voluntary contributions, collections in churches or chapels, school fees paid by scholars and paid for pauper children, amount received for books and other articles sold to children, and income from various other sources. Then on the discharge side there is the expenditure: first of all the salaries of teachers, assistants, pupil teachers, and so on, books, apparatus, and stationery, fuel, light, and cleaning, replacement of furniture, rent, rates, taxes, prizes, and so on. And then appended to the accounts are these two certificates. First of all— I hereby certify that, according to the best of my knowledge and belief, the foregoing is a true and complete account of the sums actually received and actually spent on account of the above school, in the year ended … and I further certify that no paid officer of the school is included among its contributors, or the contributors to any fund out of which the school is supported, and that no part of the amount returned as school pence has been contributed by the general funds of the school, or has been returned to the children without being accounted for under No. 7 as a payment. That certificate has to be signed by the Treasurer. Then appended to the accounts there is also this certificate— I hereby certify that the foregoing account is correctly abstracted from the cash-book of the school, which has been examined by me with the vouchers and school registers, and found to be correct. That has to be signed by the auditor. Now observe what these certificates do. They show—if they are true, of course—first of all, the whole of the income and the expenditure, and then, further, they particularly certify that no paid officer of the school is included among its contributors; that is to say, in other words, that you should not have a teacher taking, ex facie, a larger salary than he is entitled to and then returning the money by way of contribution. So that these certificates cover the whole ambit of the inquiry as to whether these sums that have been obtained by the grant have been actually expended in education, and for that purpose the accounts have to be audited by somebody or other. [Captain SINCLAIR: By whom?] Of course, it depends on the circumstances of different places; it may be a chartered accountant, or a banker, or any gentleman of position. But, first of all, let me observe this on the merits. Why is not that enough? If there were the slightest idea that the Voluntary schools—which, of course, practically means the Roman Catholic schools in Scotland—were in any way misappropriating the money, it might be necessary to have a further audit than this, but there is no reason for any suggestion of that kind. Consequently, we do precisely what is done in England. Hon. Members seem to think that in England there is a Departmental audit of Voluntary schools. There is nothing of the kind. There is a Departmental audit of the Board school accounts in England, just as there is a Departmental audit of the Board school accounts in Scotland; and why? Not for this purpose, to see whether the grant has been earned, because, as a matter of fact, the question whether the grant has been properly earned and spent is less audited in the case of Board schools than in the case of Voluntary schools; but there is this audit in order to see whether the ratepayers' money is being properly expended on the objects for which, by law, it should be expended. Of course, when you charge the ratepayers, you have a right to see that their money is properly expended; but the Education Department cannot exercise exactly the same rights over Voluntary schools, because their funds do not come out of the ratepayers' pockets. All the Department has to see is whether the Voluntary schools are properly earning their grant, and whether the money is being spent for the purpose of education. And, so far as the English practice is concerned, I hold in my hand the Minute which followed the Voluntary Schools Act of last year, dated the 15th June, 1897. It is this— Their Lordships, having had under consideration the Voluntary Schools Act, 1897, sec. 1, sub-sec. 6, Resolved—The accounts of the receipts and expenditure of every school receiving a share of the Aid Grant shall be annually audited"— not by the Government Auditor, but— by a member of the Institute of Chartered Accountants, or of the Society of Accountants and Auditors, or by a banker or bank manager, or in cases where no person so qualified is available, by some person specially approved by the Department. I am informed by my right hon. Friend the Vice-President of the Council that there are many instances in the case of English schools where the particular auditor does not happen to be a member of the Society of Accountants and Auditors, or a chartered accountant; but that is neither here nor there. The point that is put before the House by the hon. and gallant Member is whether the audit shall be conducted by a Departmental auditor. That is not the plan adopted in England; why should it be adopted in Scotland? As a matter of fact, there is no reason to suppose that the money is being in any way malapplied, and the Department do not take the certificate of a person who is not in their opinion perfectly competent. Accordingly, I think the House will see that, really, to introduce the new provision which the hon. Member wishes into the Code would be to impose a very unnecessary burden on the Voluntary schools, and would be to do that in Scotland which is not, as a matter of fact, done in England.

MR. J. BRYCE (Aberdeen, S.)

I do not think that the explanation given by the Lord Advocate will content those hon. Members who have been pressing for two years that there should be a definite system of audit which will be satisfactory to the taxpayers of Scotland, because, after all, the taxpayers have as much right to be considered in this matter as the ratepayers. The explanation which the right hon. Gentleman has just given is the first we have had from him, because on the previous occasion he contented himself with a mere reference to the inspectors. It comes to this, as I gather—that there is a balance-sheet prepared, showing the receipts and expenditure of Voluntary schools, and in addition to that there is a certificate that the balance-sheet is in conformity with the cash book; but that is not an audit in the exact sense of the term.


The right hon. Gentleman omitted to notice these words in the certificate— Which [cash-book] has been examined by me with the vouchers and school registers and found to be correct.


I had not caught that, and of course that makes some difference; but there remains the other point—namely, that there is nothing to show that this scrutiny of the vouchers is done by a person of special knowledge, competent and accustomed to deal with accounts. That is the main point that my hon. Friend has raised. As I understand it, although he has put his Motion in the form of a demand for an audit by the Departmental accountant, he does not insist upon that. He desires merely to have some security that the audit shall be by some person competent to deal with accounts. That is secured, if I understand the right hon. Gentleman correctly, by the practice in the case of English schools. All the English regulations read out by the right hon. Gentleman point to there being a demand for a thoroughly competent person, and it is only, as I gather, in some very special and exceptional case that now and then that may be dispensed with. My hon. and gallant Friend behind me asks for an assurance that the audit shall be done by a man acquainted with accounts. We have not yet had that assurance, and apparently we are not going to get it. Having regard to the unsatisfactory nature of the right hon. Gentleman's answer, I would remind the House that in the course of the Debate last year on the Education (Scotland) Bill this question was brought forward by my hon. Friend by way of an Amendment to Clause 2, and after some discussion the Lord Advocate made the statement which has been read out by my hon. and gallant Friend, and thereupon my right hon. Friend the Member for the Stirling Burghs appealed to my hon. and gallant Friend to withdraw his Amendment. That was done, and then the Lord Advocate, himself immediately moved to insert the words of the English Acts, which are as follows— The Code may require as a condition of a school receiving a share of the Aid Grant, that the accounts and receipts of the expenditure of the school may be annually audited in accordance with the regulations of the Department"— And that was adopted. Now the insertion of that clause was clearly intended to be in addition to what was proposed; instead of that, the position, as we have heard from the Lord Advocate to-night, is exactly as it was before, and therefore the understanding to which the right hon. Gentleman assented has not been carried out. Of course, the word "may" has a different effect from that of the word "shall," and so long as there is no peremptory direction in the Code there is no satisfactory assurance that there will be a proper audit. Under the circumstances, I think my hon. and gallant Friend is justified in calling for a performance of the promise made last year by the Lord Advocate, that provision should be made for an effective audit. This is not asked in any spirit of hostility to Voluntary schools. On the contrary, we believe that nothing will do more to promote the confidence of the people in Voluntary schools than that they should submit themselves to a professional audit of the character which my hon. and gallant Friend asks. I certainly think that, without an assurance that such a provision will be made, my hon. and gallant Friend is justified in pressing his Motion to a Division.

*MR. ERNEST GRAY (West Ham, N.)

I agree with the hon. and gallant Gentle man opposite that the audit of school accounts in Scotland should be made a real one. The common practice both in Scotland and in England for years past has been for the managers of Voluntary schools to call in some friend of their own, who in many cases has no special familiarity with school accounts, who desires, no doubt, to give a straightforward and honest certificate, but who, from his want of knowledge, is quite incapable very often of doing that. The English code this year demands that the auditor shall be a man familiar with bookkeeping and accounts. It requires that he should be a chartered accountant, or a member of the Society of Accountants and Auditors, or a banker, or a bank manager, or some other person specially recognised by the Department as qualified to audit school accounts; and I venture to believe that it would fully meet the demands of the hon. and gallant Member opposite, and others specially interested in Scottish schools, if the Lord Advocate would promise that the system this year adopted in connection with English Voluntary schools should be extended to Scotland next year. There is really no reason why that should not be done. It was evidently the intention of the Government when the Scotch Education Bill was passing through this House last year. It would not entail any cost; it is perfectly fair. No managers of English schools have represented that it works badly. I believe it would be cordially welcomed by all school managers who keep honest accounts; indeed, it would free them from a large amount of suspicion which now falls upon them. I cannot see why the Scotch Education Department should offer any opposition to the proposal. An assurance tonight that the change will be fairly considered during the next year would, I

imagine, lead to the withdrawal of this Resolution, and to a better system of bookkeeping and management in Scotch Voluntary schools.

The House divided:—Ayes 27; Noes 143.

Asher, Alexander Goddard, Daniel Ford Pease, Joseph A. (Northumb.)
Birrell, Augustine Gray, Ernest (West Ham) Pirie, Captain Duncan
Brigg, John Haldane, Richard Burdon Provand, Andrew Dryburgh
Bryce, Rt. Hon. James Hayne, Rt. Hon. Chas. Seale- Shaw, Thomas (Hawick B.)
Buchanan, Thomas Ryburn Lambert, George Stevenson, Francis S.
Caldwell, James Lyell, Sir Leonard Ure, Alexander
Clark, Dr. G. B. (Caithness-sh.) Moon, Edward Robert Pacy Wedderburn, Sir William
Duckworth, James Morgan, J. Lloyd (Carmarthen) TELLERS FOR THE AYES—
Dunn, Sir William Morrell, George Herbert Captain Sinclair and Mr.
Ellis, Thos. Ed. (Merionethsh.) Nussey, Thomas Willans Munro Ferguson
Ashmead-Bartlett, Sir Ellis Flower, Ernest Murray, Rt. Hn. A. Grhm (Bute)
Atkinson, Rt. Hon. John Forster, Henry William Murray, Chas. J. (Coventry)
Baden-Powell, Sir Geo. Smyth Forwood, Rt. Hon. Sir Arthur B. Nicholson, William Graham
Bagot, Capt. J. FitzRoy Galloway, William Johnson Nicol, Donald Ninian
Bailey, James (Walworth) Godson, Augustus Frederick O'Brien, Patrick (Kilkenny)
Baird, John Geo. Alexander Goldsworthy, Major-General O'Connor, Arthur (Donegal)
Balcarres, Lord Gordon, Hon. John Edward Platt-Higgins, Frederick
Balfour, Rt. Hn. A. J. (Manch'r) Gorst, Rt. Hon. Sir John Eldon Plunkett, Rt. Hn. Horace Curz'n
Balfour, Rt. Hn. Grld W. (Leeds) Goulding, Edward Alfred Pryce-Jones, Edward
Banbury, Frederick George Gretton, John Purvis, Robert
Barton, Dunbar Plunket Greville, Captain Rasch, Major Frederic Carne
Bathurst, Hon. Allen Benj. Gull, Sir Cameron Rentoul, James Alexander
Beach, Rt. Hn. Sir M. H. (Brist'l) Hammond, John (Carlow) Richardson, Sir Thos. (Hartlpl.)
Beresford, Lord Charles Hanbury, Rt. Hon. Robert Wm. Ridley, Rt. Hn. Sir Matthew W.
Bond, Edward Hanson, Sir Reginald Robertson, Herbert (Hackney)
Boscawen, Arthur Griffith- Hare, Thomas Leigh Round, James
Brodrick, Rt. Hon. St. John Healy, Maurice (Cork) Russell, Gen. F. S. (Cheltenham)
Brookfield, A. Montagu Healy, Timothy M. (N. Louth) Russell, T. W. (Tyrone)
Bullard, Sir Harry Heath, James Savory, Sir Joseph
Carvill, Patrick Geo. Hamilton Helder, Augustus Scott, Sir S. (Marylebone, W.)
Cavendish, R. F. (N. Lancs.) Hermon-Hodge, Robt. Trotter Seely, Charles Hilton
Chamberlain, Rt. Hn. J. (Birm.) Hill, Rt. Hn. Lord Arth. (Down) Sidebotham, J. W. (Cheshire)
Chamberlain, J. Austen (Worc) Hubbard, Hon. Evelyn Sidebottom, Wm. (Derbysh.)
Chaplin, Rt. Hon. Henry Jebb, Richard Claverhouse Smith, Abel H. (Christchurch)
Charrington, Spencer Jordan, Jeremiah Smith, Hon. W. F. D. (Strand)
Cochrane, Hon. Thos. H. A. E. Kemp, George Stanley, Lord (Lancs.)
Coghill, Douglas Harry Kenyon, James Stewart, Sir Mark J. M'Taggart
Collings, Rt. Hon. Jesse Kimber, Henry Strauss, Arthur
Commins, Andrew Knox, Edmund Francis Vesey Strutt, Hon. Charles Hedley
Cook, Fred. Lucas (Lambeth) Lafone, Alfred Sullivan, Donal (Westmeath)
Corbett, A. Cameron (Glasgow) Lawson, John Grant (Yorks.) Sullivan, T. D. (Donegal, W.)
Cross, Alexander (Glasgow) Leigh-Bennett, Henry Currie Talbot, Lord E. (Chichester)
Cubitt, Hon. Henry Lockwood, Lieut.-Col. A. R. Tomlinson, Wm. Ed. Murray
Curzon, Rt. Hn. G. N. (Lanc S. W.) Lopes, Henry Yarde Buller Valentia, Viscount
Curzon, Viscount (Bucks.) Lowe, Francis William Wanklyn, James Leslie
Dalrymple, Sir Charles Lowles, John Webster, R. G. (St. Pancras)
Daly, James Loyd, Archie Kirkman Webster, Sir R. E. (I. of W.)
Denny, Colonel Macaleese, Daniel Wentworth, Bruce C. Vernon-
Dickson-Poynder, Sir John P. Macartney, W. G. Ellison Williams, Jos. Powell- (Birm.)
Doogan, P. C. Macdona, John Cumming Wilson, J. W. (Worc., N.)
Douglas, Rt. Hon. A. Akers- Maclure, Sir John William Wodehouse, Edmond R. (Bath)
Drucker, A. M'Arthur, Chas. (Liverpool) Wortley, Rt. Hon. C. B. Stuart-
Duncombe, Hon. Hubert V. M'Hugh, E. (Armagh, S.) Wylie, Alexander
Edwards, Gen. Sir Jas. Bevan Malcolm, Ian Wyndham, George
Fellowes, Hon. Ailwyn Edw. Massey-Mainwaring, Hn. W. F. Wyndham-Quin, Major W. H.
Finlay, Sir Robert Bannatyne Mildmay, Francis Bingham
Fisher, William Hayes Milward, Colonel Victor TELLERS FOR THE NOES—
Fison, Frederick William Monckton, Edward Philip Sir William Walrond and
Fletcher, Sir Henry Morton, Arthur H. A. (Deptf'rd) Mr. Anstruther.

House adjourned at 12.55.