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Wednesday, 12 May 1920

Mr HIGGS (Capricornia) .- I propose to call attention to remarks of the Auditor-General in his report for 1917-1S. First, however, I would remind honorable members that Sir John M. Higgins, when referring to the same, subject stated, in his report on the Austraiian wool clip for 1916-17, presented to Parliament on the 25th July, 1917 -

Continuous audits are conducted under the direction of -the Auditor-General's Department of all business transacted through the Central Wool Committee and all State Committees.

I will now relate what the AuditorGeneral himself said in his report for 1917-1918 (vide Hansard, 24th July, 1919, page 10984)-

On the 1st March, 1917, agreements were entered into between the Commonwealth Government and Whiddon Bros. Limited, of Sydney, and the Colonial Combing, Spinning and Weaving Company Limited, of Sydney, respectively, under which these companies were authorized to purchase wool for the purpose of manufacturing wool tops. It was provided that all the books, vouchers, and documents in the possession, or under the control of, the respective companies, relating to the purchase, manufacture, or sale of the sheepskins, wool, and wool tops, referred to in the agreements, should be produced to an auditor nominated by the Commonwealth Government for that purpose, and it was also provided that any nomination or other communication by the Commonwealth Government to the Committee should be deemed to be duly given if signed on behalf of the Commonwealth Government by the Chairman of the Central Wool Committee.

Sir JohnHiggins was the Chairman of that Committee, and he appointed Mr. Allard,of Sydney, as Auditor. I do not wish to cast any reflection upon that gentleman. The Auditor-General proceeds -

In pursuance of this provision, the Central Wool Committee appointed a Fellow of the Australasian Corporation of Public Accountants to conduct the audits. Subsequently the right honorable the Treasurer (Lord, then Sir John, Forrest) submitted his opinion that these audits should be conducted under the control of the Auditor-General of the Commonwealth, and suggested that the auditor appointed by the Central Wool Committee should act under an appointment made by the AuditorGeneral, under the provisions of section II. of the Audit Act - should the Auditor-General be willing to make such appointment.

Mr. Israelstates further ;

I was quite prepared to do this, but, upon the matter coining under the notice of the Chairman of the Committee (Sir John M. Higgins), he declared that such an agreement would not be as satisfactory as the then procedure.

The Auditor-General further proceeds-

Upon receiving the balance-sheets of the auditor appointed, the Treasurer (Lord Forrest) asked for further information with respect thereto, but it was pointed out by the auditor that his reports were final, and that if further information with respect to accounts was required, this should be obtained from the companies direct. It is evidently desirable that in any future similar agreements, or in any regulations governing the agreements under review, provision should be made for such control by the Auditor-General as would enable the Treasurer and the Auditor-General to obtain all' the information that may be desired. The position with respect to these audits has been fairly set forth in a memorandum prepared by the Assistant Secretary to the Treasurer, and, as it agrees with my own views, it is published under Appendix D.

That memorandum, referred to as coming from the Assistant Secretary to the Treasurer, states -

From many points of view this business was in a most indefinite and unsatisfactory position.

It is quite true that the Assistant Secretary said further that he doubted whether much good could accrue from going back over this matter. It may be superfluous to go over Mr. Allard's work, but I urge the Committee to pay some attention to the request of the Auditor-General in respect to future agreements - namely, that he should be in a position to audit them himself and ask for any information.

Mr Ryan - The fact remains that the Treasurer was not able to get information when he asked for it.

Mr HIGGS - No . When Lord Forrest was Treasurer he did not feel satisfied. He asked for information which he could not get. I believe that the attitude taken up by the Central Wool Committee was that if the further information which he sought were obtained, it would not be fair to the company, because it would disclose its business to the general public, but of course a company which enters into a business arrangement with the Commonwealth must always be prepared to have all its actions made public. However, provided the AuditorGeneral is authorized to audit the books, accounts, and vouchers of any company in which the Government has a pecuniary interest at the present time, I do not insist upon the date being put back to 1st January, 1916, but I would ask the Committee to amend clause 8, and provide that the Auditor-General shall have power to audit the accounts of any existing firm or company in which the Government are pecuniarily interested. I ask leave to withdraw my amendment.

Amendment, by leave, withdrawn.

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