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signing himself that the defalcations arose. If the system had not been altered and Mr. Carvalho had still signed the receipts don't you think that would have been a certain check?
A.- To a certain it would have been, but I am of opinion that there is no real check except the balancing and a continuous audit."
Mr. Bird.--But if the receipts and money went through two officers it would be difficult to commit a fraud?
A.-I don't attach much importance to that. That is all very well when you start, but as the men get into grooves they become careless, and I don't think the check is an effective one,
able.
Q. But it makes fraud more difficult?
A.-
-Yes, but the two were in different offices. That alone I consider as objection-
Q.-Mr. Carvalho tells us that if that system had been continued he thinks that it would have prevented these defalcations because he said that he would never have signed anything unless it had the shroff's chop upon it and the shroff would not have allowed any false chop to pass.
A.-It may be so, but I doubt it very much. Is it perfectly certain that notwith- standing the balancing of the books nothing took place before these books were examined? Might I ask when the 1887 book was balanced?
The Chairman.--It was balanced in April, 1889.
A. That would be in my time.
The Chairman.-1887 is all right.
Mr. Bird. 1888 has disappeared.
Witness.-Has no reference been made to previous books?
The Chairman.-No.
Witness. To see whether they are balanced?
The Chairman.-No.
Witness.--I should like to make enquiry at the Treasury about them. It seems a very long time for the 1887 book not to be balanced until 1889.
Mr. Thurburn. They say it was always about 18 months after the close of the year before the book was balanced.
Witness.-Then I think the balance is no effective check.
The Chairman. If the balance was made immediately it would show a deficit.
Witness.--Was it ever made immediately?
The Chairman.-No.
Witness.-It seems an extraordinarily long time and if such has been the case always I should say the balancing is not the check that it ought to be. My own opinion is that there should be a continuous audit.
The Chairman. You will find with regard to the Rent Roll that a continuous audit would not have prevented defalcations such as these.
Witness. I am not confining myself to the Rent Roll. I mean a continuous auditing of the Treasury work. There are rates and taxes, &c., all of which, in my opinion, ought to be checked continuously. It is not possible for the head of the Department to do it, or any other officer as far as I know.