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Wednesday, 8 December 1965

Mr SPEAKER - There being no objection, leave is granted.

Mr CLEAVER - These reports relate, respectively, to expenditure from the Advance to the Treasurer and to other expenditure from the Consolidated Revenue Fund in 1964-65. The question foreshadowed in your Committee's Sixtieth Report, of the desirability of conducting one or two inquiries into these matters and involving one or two reports did not arise in respect of the financial year 1962-63 as the limited time available to your Committee precluded the completion of one large comprehensive report; nor did it arise in respect of the financial year 1963-64 as your Committee confined its inquiry in respect of the financial results for that year to an examination of expenditure from the Advance to the Treasurer.

In approaching its inquiry into the Consolidated Revenue Fund results for 1964-65, your Committee considered that as several departments would be involved in respect of expenditure from the Advance to the Treasurer and other expenditure from the Consolidated Revenue Fund, considerable economy of time would be achieved if a single inquiry were to be held but that, as the subject matter relating to the two matters was clearly distinguishable, two separate reports should be submitted to the Parliament.

In its previous report relating to expenditure from the Advance to the Treasurer in 1963-64 your Committee drew attention to the unsatisfactory nature of some of the explanatory statements submitted by departments and indicated that discussions would take place between officers of the Department of the Treasury and the Committee to produce a suitable pro forma statement for use by departments in connection with the inquiry in 1964-65. Your Committee's examination of the explanatory statements submitted by departments this year and based on the pro forma statement which was duly developed showed a very substantial improvement in the quality of the explanations submitted. At the same time, experience in the use of the pro forma statement showed a need for further refinement and your Committee is desirous that further discussions occur between it and representatives of the Treasury in this refining process. During the preparation of the pro forma statement for use in connection with expenditure from the Advance to the Treasurer, your Committee developed an additional pro forma for use in the examination of items of expenditure where overestimating had occurred. The use of this pro forma by departments provided us with information on a uniform basis and in each case showed the history of estimating and expenditure for a period of three years.

As the Seventy-fourth and Seventy-fifth Reports show, your Committee discovered, during the course of its inquiry, several instances in which errors had occurred and had not been detected in time for their correction to be effected in the Additional Estimates. Your Committee has commented appropriately on such circumstances where they have occurred and we believe that they reflect adversely on the departments concerned. The inquiry also showed that, as in previous years, there were explanations for variations from the estimate, which, due to unforeseen circumstances, are acceptable. The inquiry also revealed, however, examples of unsatisfactory estimating where over-confident expectations had not been borne out in reality.

As in some cases the evidence submitted disclosed a lack of appreciation of the considerations which should be taken into account by departments in the formulation of their estimates, your Committee has again enunciated in both the Seventy-fourth and Seventy-fifth Reports, the following principles for departmental guidance -

Each particular estimate should comprise a realistic assessment of the amount expected to be required, based on the information available to the department when the formulation of estimates is being made.

Estimates should not make provision for proposals that are of such an uncertain nature that the department is unable to determine what payments, if any, will be made.

Experience, wisely evaluated, should be used as the basis for formulating estimates relating to recurring expenses, and

The use of the Advance to the Treasurer should be confined to those items of expenditure which could not have been foreseen in time for their inclusion in the original or Additional Estimates.

I commend the reports to honorable members.

Ordered that the reports be printed.

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