The Naval Secretary has forwarded for advice the following memorandum:

With reference to the following request received from the Office of the Auditor-General, viz.: 'I shall be glad if you will kindly have inserted in Naval Orders, instructions to the effect that ships' books and accounts will be liable to audit inspection at any time', which it is understood is intended to mean that a representative of the Auditor-General's Office may proceed on board any of H.M.A. Ships at any time for this purpose, I am directed by the Naval Board to request that you will give an opinion as to whether under the provisions of the Audit Act the Auditor-General has power to require the Commanding Officer of one of H.M. Australian Ships to admit his representative on board at any time.

(2) The request is evidently made in virtue of section 45 of the Audit Act, but the Naval Board desire to point out that, by section 63A of that Act, the audit and inspection of ships' books are not subject to the general regulations under the Audit Act but to special regulations made under section 63A, which reads as follows:

63A (1) Notwithstanding anything in this Act contained, the Governor-General may make such regulations as he thinks necessary or convenient relating to the expenditure of moneys for the purposes of the Australian Navy and Naval Establishments, and to any matters incidental thereto, including the receipt, care, custody, and management of moneys, the due accounting for moneys, the keeping of books and accounts, the furnishing of statements, returns, and vouchers, and the inspection, record, and audit of books, accounts, statements, returns, and vouchers. Very complete regulations under this section entitled the 'Naval Account Regulations' have been made which provide for the efficient keeping and audit of naval accounts by the officers of the navy and of the Navy Department.

Regulation 113 provides that the Director of Navy Accounts shall be responsible to the Naval Board for the audit of naval accounts, subject to final audit by the Auditor-General. Other regulations provide for the rendering and keeping of the accounts, which, after audit by the Director of Navy Accounts, are passed on to the Auditor-General for final audit.

By other regulations the Commanding Officer of the ship is made responsible for the general oversight of the ship's accounts and particularly for the regular and also occasional inspection of the cash and cash accounts of the Accountant Officer of the ship.

The Accountant Officers of H.M.A. Ships are subject to the Naval Discipline Act and the Naval Defence Act, and their appointments are held by virtue of their Commissions issued under those Acts. In the event of an Accountant Officer being charged with an offence against the common law or for any neglect of duty in connection with his cash or accounts, he would be tried by naval court-martial and if convicted would be punished in accordance with the code contained in the Naval Discipline Act. The Accountant Officer, in the same way as all other members of the ship's company, is subject to the authority of his Commanding Officer in all matters relating to his duties.

3. The peculiar circumstances of a warship and the purposes for which she is maintained obviously necessitate the Commanding Officer having the powers vested in him by various statutes, and make it very undesirable that any other authority should intervene between him and his subordinates, and it would appear that it was for this reason why the section 63A was inserted in the Audit Act. The safety of the ship and of all personnel and materiel on board are the personal responsibility of the Commanding Officer and consequently he should not be subject to risks attendant by any person being allowed on board the ship without his knowledge and consent.
4. In view of the above circumstance, unless the Auditor-General definitely has the power and authority under the statutes, the Naval Board consider it highly undesirable that the Order which the Auditor-General requests may be issued should be contained in Naval Orders.

Sub-section (2) of section 63A of the Audit Act 1901-1917, of which section sub-section (1) is quoted above, provides as follows:

(2) The regulations made in pursuance of this section may direct that any of the provisions of sections thirty-three, thirty-four, and forty-six of this Act shall not apply in relation to any matter in respect of which regulations are made under this section.

It is, I think, clear, from the provisions of that sub-section that regulations made in pursuance of the power conferred by sub-section (1) of section 63A are not intended to override the provisions of the Act. Sub-section (2) of section 63A giving power to direct the non-application of certain sections of the Act, the maxim inclusio unius est exclusio alterius in my opinion applies and any regulations made under sub-section (1) cannot, therefore, affect the application of other sections of the Act.

Section 45 of the Audit Act provides, inter alia, that the Auditor-General or such person as he shall appoint may whenever he shall think fit inspect, examine and audit the books and accounts of every accounting officer and of any other person in the Public Service or subject to the provisions of that Act to whose possession or control any moneys have come for or on account of the Consolidated Revenue Fund or (by virtue of his office service or employment or of any legal process whatsoever) for on account or for the use or benefit of any other person.⁽¹⁾

The Auditor-General or any person appointed by him has, in my opinion, power and authority under that section to inspect ships' books and accounts.

With regard to paragraph (3) of the Naval Secretary's memorandum, I would point out that all that the Auditor-General asks is that the ship's books should be liable to audit. There is no suggestion that the Auditor-General wishes to intervene

between a Commanding Officer and his subordinates, or to claim a right to send any person on board a warship without the permission of the Commanding Officer.

I feel sure that a conference with the Auditor-General on the subject would remove any possibility of the administration of the Audit Act conflicting with naval discipline or naval administration.

[Vol. 17, p. 265]

(1) This is a paraphrase of section 45 as it was in the Audit Act 1901-1917 (see the citing of the Act at the beginning of the opinion). It would appear that the opinion overlooked the substitution of a new section 45 by the Audlr Act I920 (deemed, by section 2 thereof, to have commenced on 1 July I919). Section 45 (I) of the Audit Act 1901-1920 read:

'The Auditor-General shall, at such intervals as he thinks fit, and whenever required so to do by the Treasurer, inspect, examine and audit the books and accounts of any accounting officer, and of any person charged with the custody or control o f stores belonging to the Commonwealth'.