Appendix. aid shall have ceased. Under this arrangement their Lordships will not only receive the Estimates, &c., for the Gambia, Falkland Islands, and Heligoland, for which grants in aid are still made, but will also receive, for the present, those for the Gold Coast, Lagos, and Labuan, in respect of which the grants have been discontinued. "I am to add, that Lord Granville doubts whether it would be practicable to lay down the same rule in regard to Colonies which might be supposed 'likely to become in any way chargeable to Imperial funds, not having already been so.'" Besides the Colonies mentioned in the foregoing extract, the Colonial Office continued to send the Estimates of St. Helena, the grants to that Colony being included amongst grants in aid, although, since 1868, they have been appropriated by the terms of the Vote to specific purposes, and have been occasional only. Table I. was accordingly compiled, not for the purpose of showing what my Lords held to be a grant in aid within the purview of the Agreement of 1870, but in order to show what sums had been, as a fact, voted by Parliament and accounted for to the Audit Office, under the designation of "Grants in Aid of Local Revenues" of Colonies. In view, however, of the want of precision in the Agreement of 1870, as to what Colonial Estimates were to be submitted to the Treasury, and in order to establish harmony of action between the Treasury and the Audit Office in regard to such Estimates, my Lords were careful, in the concluding part of their letter of 25th September last, to propose that only any Crown Colony receiving an Imperial grant in aid of its general expenditure should submit its Estimates to the Treasury, through the Colonial Office, and that the period for which this obligation is to endure should coincide with the period for which the Accounts of the Colony are subject to Imperial Audit, viz., for three years after the cessation, or last occurrence, of the grant in aid. My Lords, moreover, communicated their letter to the Comptroller and Auditor General, in order that he might learn the nature of the agreement of 1870, and co-operate in effectually carrying it out. Their Lordships have been particular in describing the Treasury letter of September, in order that the Secretary of State may understand their meaning in the following observations which they have to offer upon your replies of January and February last. In your letter of the 1st January you express the "regret" of the Secretary of State "that the understanding of 1870 has not been observed with perfect regularity," and state" that he is prepared to take steps for ensuring its regular observance in future.” The Secretary of State acknowledges that "there has been an undoubted failure to transmit regularly to the Treasury the Returns of Revenue, Expenditure, and Debt " from Colonies receiving specific grants or loans, but he considers that, as regards all the Colonies receiving grants in aid, mentioned in Table I., the agreement to submit their Estimates to the Treasury has been duly observed, except in the following cases: 1. Gold Coast and Fiji. 2. Cases in which fulfilment of the Agreement was impracticable. 3. Cases which did not fall within the scope of the Agreement. This position is supported by remarks upon each Colony, many of which quite accord with the views of my Lords, and in no way clash with any statement in the Treasury Letter of 25th September; some of the others, however, require further comment. In your letter of 26th February, you say that my Lords "will have gathered from your previous letter" that Sir Michael is not prepared to accept as accurate the statement contained in the Treasury letter of 25th September. But the only distinct charges of inaccuracy that my Lords can gather from either of your letters relate to the omission from Table II. of the Estimates of Labuan for 1870 and the Estimates of St. Helena for 1876. The Estimates of Labuan for 1870 were sent to the Treasury on the 6th January 1870, i.e., five months before the Agreement of 1870 was made, and no Labuan Estimates have ever been submitted since, although, under a possible misapprehension, the Colonial Office Letter of 3rd June 1870 promised that they would be. These facts sufficiently account for Labuan making no appearance in Table II. Nevertheless, looking to the words of the heading of that table, my Lords admit that it might have been more correct to have included the estimates in question. As regards the St. Helena Estimates for 1876, my Lords have again caused search to be made in this Department, but without finding any trace of the submission of these estimates. They would be glad to know the dates on which they were sent to, and sanctioned by, the Treasury. Further, my Lords may point out to the Secretary of State the following facts : 1. Between 8th February 1875 and 6th September 1877, a period of about two years and seven months, no Colonial Estimates whatever were received by the Treasury. 2. Between 19th August 1874 and 6th June 1878, a period of not very much less than four years, the Estimates of one colony only, viz., the Falkland Islands, were received by the Treasury for sanction. 3. Within 3. Within the second period mentioned, the Estimates of the following Colonies, for one year or more, ought to have been sent to the Treasury (under the most limited interpretation of the Agreement that can be reconciled with actual practice) but were not sent, viz. : Appendix. Gambia. As regards the Gold Coast and Fiji, your letter offers no explanation. With regard to Lagos you urge that the grant in aid was a loan to be repaid, but this is equally true of the grants to Fiji and of the grant to St. Helena in 1871-72. With respect to Heligoland, you state that my Lords "have had before them the fact that no estimates are received from that Colony." My Lords, would, however, point out that this is just the fact of which they have been complaining. Heligoland is one of those Colonies in which laws may be made by the Governor alone, and which is under the absolute control of the Home Government, and yet, in spite of the promise made in 1870, and of remonstrances from this Board, the Colonial Office has never succeeded in obtaining its estimates. As regards the Gambia, you state, in effect. that the Estimates were disposed of by the Colonial Office, and as regards Sierra Leone, that they were not disposed of at all; but it will be admitted that in both cases the Agreement with this Board was not carried out. My Lords have, perhaps, now said enough in justification of their letter of the 25th September, and may turn to the proposals for the future, contained in the Memorandum enclosed in your letter of the 26th February. 1. Estimates to be submitted to the Treasury, and Accounts to be rendered to Audit Office. year By a Grant in aid of General Expenditure, my Lords understand either a Grant to cover a net excess of estimated expenditure over estimated revenue, or made, in general terms, "in aid of the Local Revenue;" or a grant which, although appropriated wholly or partially in the Estimates to specific services, such as the Redemption of Debt, Public Works, Arrears of Salaries, and the like, is none the less made upon a comparison of Revenue and Expenditure, as a means of discharging liabilities which properly belong altogether to the Colony, and is, therefore, in effect, a grant to make good a deficiency of revenue. This interpretation agrees with the fact that the Colonial Office submitted the St. Helena Estimates notwithstanding a specific appropriation of the occasional Grants in aid of that Colony. Further, my Lords are of opinion that the fact of a Grant in aid being made for one year only ought not to exempt the Estimates of a Colony from submission to the Treasury. According to the Agreement of 1870, as shown by the extracts from Colonial Office and Treasury letters before quoted, the Estimates of Colonies "likely to become chargeable on Imperial Revenue," and which have "already been so," are to be sent to the Treasury. If a Colony requires a Grant in aid in one year, there is some likelihood of its requiring another before long, unless its Estimates are carefully supervised. The Secretary of State is familiar with the cases of St. Helena and some of the West African Colonies which have put in claims for Grants in aid every two or three years. In such cases, therefore, my Lords think the Estimates should not be sent to this Board until three years after the occurrence of the last Grant in aid. Where a Grant in aid is made, free of interest, but with a more or less explicit condition of repayment whenever the circumstances of the Colony will permit, my Lords think this peculiarity is an additional reason for sending the Estimates to the Treasury, because, besides the duty of guarding against a recurrence of the Grant in aid, there is the obligation of securing the claim of the Exchequer. Whilst touching on this point, my Lords would express their satisfaction at Sierra Leone being included in the Colonial Office Memorandum amongst Colonies which are bound to repay their Grants in aid if possible. They will take care to cause it to be inserted as a Debtor for 38,000 7., in the last page of the forthcoming Finance Accounts for 1878-79. When this Grant was obtained in 1876-77, the Secretary of State, instead of holding out hopes of repayment, was in fear that it would prove the first of a series of such Grants. There are, however, certain Grants to Colonies which my Lords do not hold to be Grants in aid in such a sense as to make it necessary that the Estimates of the Colonies receiving them should be submitted to the Treasury, or that their Accounts should be subjected to Imperial audit, viz., where Her Majesty's Government decides that a public work in a Colony is carried out partly for the benefit of that Colony and partly for Imperial objects, e.g., for the use of the Army or Navy, and a portion of the cost is accordingly borne on Votes of Parliament; where, for political reasons, it is thought desirable to render the Governor of a Colony independent of local resources by voting his salary, and Appendix. 52 APPENDIX TO REPORT:-COMMITTEE OF PUBLIC ACCOUNTS. perhaps that of his Secretary; or to promote the federation of several Colonies by voting the cost of a steamer; or where, for reasons of a jointly political and commercial character it is considered advisable to assist a Colony in maintaining a Mail Packet Service which exceeds the actual requirements of the Imperial Post Office. Moreover, looking to those Colonies which have hitherto been the most frequent recipients of Grants in aid, my Lords see a good prospect of removing all of them speedily from the class of estimate-submitting and account-rendering Colonies. After the year 1879-80, the Falkland Islands Grant will be restricted to the Governor's salary: a like arrangement should probably be made for Heligoland; and unless St. Helena sees her way to be entirely self-supporting, any further help that may be extended to that Colony should take a similar shape. The West African Colonies do not seem very likely to need further Grants in aid, and my Lords hope there will be no recurrence of the Grants for Fiji and Transvaal. Should these anticipations be realised, at the expiration of three years from 1879-80, neither Treasury nor Audit Office need be troubled with Colonial Estimates or Accounts. 2. Annual Returns of Revenue, Expenditure, and Debts of Colonies to be Furnished to the Treasury. These should be sent to the Treasury, in respect of (1.) All Colonies whose estimates are submitted to the Treasury. (2.) All Colonies which are indebted to the Exchequer for Votes on condition of repayment free of interest, or for loans at interest. (3.) All Colonies which receive annually recurrent grants for salaries of Governors or other officers, or for the maintenance of a steamer, or as mail subsidies other than are requisite for Imperial Post Office purposes. In reference to grants of this nature the Colonial Office Memorandum mentions the West Coast of Africa (steamer) as an example of a specific grant, the receipt of which will entail the obligation of sending Returns to the Treasury. But I am to remind you that in your letter of the 1st January, the West Coast of Africa is stated to be "merely a geographical expression." My Lords presume that in the present connection the Colonial Office identify it with the Colony of Sierra Leone. (4.) All Colonies which have raised loans under Imperial guarantee. In the case of such of the above-described Colonies as possess responsible governments it is no doubt out of the power of the Secretary of State to insist on special Returns being made to the Treasury; but in cases of that kind, ample Returns are published by the Colonial Governments, and all that my Lords would ask is that copies of those Returns which give the requisite information may be furnished to them. Their Lordships would observe that in the Returns actually received there is a great diversity of form, and that some of them are not in accord with the fundamental principles of financial classification: borrowed money is mixed up with proceeds of taxation in the Accounts of Income, and repayments of public debt with current cost of establishments, in the Accounts of Expenditure, besides other solecisms too ludicrous to mention. It would be well to fix a general form for use by all Colonies, for which such can be prescribed by the Home Government. 3. Date when Instructions to Audit Office are to take Effect. The only remaining question is the date from which the Audit Office should give effect to the instructions of this Board, that proof of Treasury sanction to the Colonial Estimates or to any deviation from them should be required before the accounts of a Colony are passed. My Lords are of opinion that these instructions should be applied to all Colonial accounts for the year 1878, and future years, that are sent to the Audit Office for examination. If circumstances render it necessary to make any special exception the case should be brought before this Board for consideration. My Lords may record here, that by a letter of 10th January last, they agreed that the Comptroller and Auditor General should look to the Colonial Office for production of proof of Treasury sanction to the Estimates, instead of his being informed of the fact by the Treasury, as proposed in the letter from this Department of 25th September. I am to add that my Lords have arranged for the presentation to the Committee of Public Accounts, 1879, of this correspondence, together with their general Minute on the Reports of last year. The Under Secretary of State, Colonial Office. I am, &c. (signed) Henry Selwin-Ibbetson. |