THURSDAY, 11th JULY, 1918. (At Perth.)

Present: Hon. W. C. Angwin, M.L.A., Chairman. Hon. J. F. Allen, M.L.C. | Hon. R. G. Ardagh, M.L.C. T. H. Harrison, Esq., M.L.A. | S. M. Brown, Esq., M.L.A.

ROSS STAPLEY CHILD, Accountant, Wheat Marketing Scheme, sworn and examined:

1885. WITNESS: I desire to reply to certain statements made by Mr. Hammond. In connection with the accounts, Mr. Hammond made two serious statements, one of which was to the effect that the accounts of the Scheme had not been audited up to the time he left the board. I cannot understand how Mr. Hammond could make that statement, for there was an audit of the books extending from the 14th February to September in 1917.

Upon reading Mr. Hammond's evidence I obtained from the Auditor General information as to the dates on which the audit by him had been conducted. There was no Act authorising an audit of the accounts until December, 1916, and immediately this Act was passed the Auditor General and the Scheme discussed the scope of the audit; and this resulted in an inspector with an assistance, and also for part of the time a machinist to check total, being placed in the Wheat Scheme offices for the purpose of making a thorough check of the books to as late a date as possible.

After finishing in September there was a break till February of the current year, when Senior Inspector Waterhouse, together with another assistance, again commenced a check from the period at which the previous audit finished. Mr. Waterhouse has been engaged on this work practically continuously, though there have been a few breaks of minor importance; and the audit now being conducted by the Auditor General is a continuous audit, and not, as had been inferred, a periodical one. A periodical audit is an audit of periodical statements, and is undertaken, generally speaking, only once in the period covered by the statements. The Auditor General is of opinion, so he has informed me, that his audit is continuous; and I am of that opinion also. The audit will remain continuous. Mr. Hammond's statement was totally incorrect; and personally I think it must be admitted that a statement so wide of the mark must necessarily affect his other statements dealing with this branch of the Scheme. If an audit of six months' duration can take place without a person's knowledge, it is not likely that that person can have any very intimate knowledge of the work of the accounts.

Mr. Hammond's other statement referring to the accounts was to the effect that the accounts were in a muddle prior to Mr. Grogan's taking over, and that whilst they were satisfactory during his control, they immediately became again unsatisfactory upon his handing over to Mr. Berkeley. I became inspector of agencies to the Scheme in March of 1916, just prior to Mr. Berkeley's transfer to the Lands Department; and I acted in that capacity during the whole of Mr. Grogan's stewardship, while upon the return of Mr. Berkeley I continued to act as inspector of agencies until early in 1917, when I also took charge of the certificates of the branch work. Though I did not come into the control of any internal work to any considerable extent until early in 1917, I was also always more or less in touch with same, for both Mr. Berkeley and Mr. Grogan discussed with me any matters of import before taking any action.

Mr. Berkeley practically ceased his intimate connection with the accounts work in August or September of 1917, so far as the books were concerned; and though I was acting accountant for portion of the time, to the 31st December last, I was still carrying on my duties as inspector of agencies. During that period the work dropped back somewhat; but when I definitely took over the position of accountant, I state, the accounts were not in a muddle, nor in any condition that could possibly be termed a muddle. During the period just prior to that, the Australian Wheat Board had decided upon the basis of apportioning the 1915-16 and 1916-17 payments, and there was a very considerable amount of work to be done in connection with this apportionment.

The work was very strenuous, but from the knowledge of the books that I gained up to then and since I am of opinion that at no time had there been any muddle in the accounts. Mr. Berkeley installed a system upon which the accounts were worked at the commencement, and I believe the principles that he observed have stood the test of time better than those in any of the Eastern States. I may say that while I was in the East I inspected the accounts of at least two of the schemes, and consulted with the accountant of the third scheme as to his books. From the time I took charge of the certificates branch my connection with the internal work gradually became greater; and during the last few months of 1917 I had a more or less sort of half-recognised control, whole during Mr. Berkeley's absence in the East and on leave I was acting. I had my work to do as inspector of agencies and mill accounts; and when it is taken into consideration that during these and the previous few months vital decisions were being come to by, or were arising from, the Melbourne accountant's conference, and also from previous decisions of the Australian Wheat Board, it is rather natural that work should accumulate somewhat. This work has since been brought up, and I am pleased to state that I believe our records to be as close to date as those of any of the other States, while matters in the accounts branch are working smoothly and the system appears to be a success.

As stated previously, alterations have been made since I took over and the gristing agreement which we entered into with the millers as from the 3rd November last, also necessitated very considerable extra work. The books, however, have been closely under audit, and the audit inspector seems thoroughly satisfied that the system is sound and well run; and no man acquainted with this branch could, in my opinion, state that the work has been in any way muddle at any time since I have had anything to do with it, and previously to that, in my opinion, there was no muddle either. Each branch of the accounts work has been carefully planned, and the whole is co-ordinated into the summary of results obtained; that is, the general ledger. Mr. Hammond makes another point, that he based this assumption on the erroneous impression which he has regarding the audit given to the books by the Auditor General.

For your information I would like to state that Senior Inspector Waterhouse, who is charged with the detailed audit, is a Fellow of the Western Australian Institute of Accountants, and was in private practice for some years before joining the Audit Department in 1905. Personally I am of opinion that no more independent or unbiased audit could be obtained that that of the Auditor General. I have no objection whatever to an independent audit, whether an outside auditor conducts the work or the Auditor General conducts it; for personally I value the audit as a means of assisting me in discharging the duties that are thrown on