305
No. 21
89.
HONGKONG.
DESPATCHES RESPECTING THE AUDIT OF THE ACCOUNTS OF THE COLONY,
Presented to the Legislative Council, by Command of His Excellency the Governor.
(1.)
Secretary of State to Governor.
CIRCULAR.
SIR,
DOWNING STREET,
18th September, 1888.
I have the honour to invite your attention to the arrangements at present in force for the audit of the accounts of the Colony under your administration.
2. This service is now performed, as in other Colonies, by a local Audit Depart- ment forming part of the ordinary civil establishment of the Colony, and under the general supervision of the Colonial Secretary and the Officer administering the Government of the Colony. The whole of the work of audit is thus carried on locally, and the immediate responsibility for seeing that the audit is adequate and properly performed devolves upon the Officer administering the Government.
3 I recognise with pleasure that the manner in which the work of audit is now done has, in most Colonies, greatly improved in recent years; but I have, never- theless, been led to the conclusion that the present system leaves much to be desired.
4. The small scale upon which the audit establishment of a single Colony must necessarily be fixed renders it difficult to secure a complete professional training for the subordinate officers of the department; whilst great difficulty has always been experienced in obtaining as Colonial Auditors men fully qualified by special technical preparation for the important duties of the position. The limited experience of each Audit Department tends to prevent the introduction of improved methods of accounting, or new expedients for preventing fraud; and the frequent changes caused by the leave system have in many Colonies been detrimental to the continuity of policy and of general principles of action which should govern an Audit Department. At the same time, the close personal relations in which the officers of the Colonial Audit Department necessarily stand to their colleagues in the other branches of the Colonial establishment is apt to be a source of embar- rassment in the official relations of the department, and a cause of weakness in its action. The relative positions of Auditor and Governor tend to create the same difficulty; and the necessarily supreme authority of the latter cannot fail to have some effect towards diminishing the independence and the control of the Auditor.
5. These causes, coupled with other circumstances, have not infrequently pre- vented a Colonial Audit Department from attaining that efficiency in checking financial irregularity which the importance of its function demands. The Governor has sometimes been unable to obtain from the Audit Department that valuable assistance in administration which an efficient and independent Auditor can supply; and this result is the more to be regretted because an Officer chosen to administer a Government can rarely possess the special training necessary to enable him to maintain a real supervision over the accounts of a Colony. At the same time,
The Officer Administering the Government of
HONGKONG.
the