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When Postal Notes were introduced I had no instructions from the Auditor General or from anyone else, either written or verbal, that a new branch of business had been added to the Money Order Department and that I had a new class of account to look after, such notice and instructions ought to have been given I may say here that from the day I entered on my post in the Audit Office till this day I do not recollect having received from any Auditor General any instructions as to audit, or as to the methods of conducting it, I have had to find all out for myself.
In the Audit Office there is no account at all with the Crown Agents, no classification of accounts under that head. There is a category for Money Orders, but none for Postal Notes.
I suppose I heard something about Postal Notes through the newspaper when they were first introduced, but I never had any instructions or knowledge of the mode of dealing and again I say that there was in the Money Order Office no new Cash Book brought into use in respect of them, as there ought to have been and no entry of the receipt or sale of Postal Notes in any book, except this private book of the Postmaster General, which was not in the possession of Mr. Rocha, the Post Office Accountant. I confess that if I had seen, as I probably have, the phrase "postal notes" I should have thought it only another name for Post Office Orders.
Mr. BARRADAS must soon have perceived that I was ignorant of the existence of Postal Notes as a separate branch of the business and he took advantage of my ignorance, and of the absence of any books or vouchers in his office touching Postal Notes to commit the frauds he did, in the way they were effected.
My third general defence is, therefore, that I received no instructions from my superiors when the Postal Notes system was introduced, and Mr. Barradas was not compelled by his superiors to keep any new books or open any new accounts to meet the new phase of business and so I was kept in ignorance of the fact that he was receiving and had to account for moneys underhand.
The Imperial and Local Cash Books were carefully checked by me with the requisitions for Money Orders issued, the counterfoils, and the paid Money Orders and I make bold to say that so far as proper materials for audit existed these books were properly audited. I knew not of the existence of Postal Notes, and the materials did not exist for any audit of items in the account relating to payments to the Crown Agents or to the Treasury.
Now to answer the charges in detail. As to the first: as I did not know and had no means of knowing that the Superintendent BARRADAS received money for Postal Notes, I could not very well check his payments on that account and when he presented me a voucher with Mr. CARVALHO's or Mr. LISTER's well-known signatures showing an amount paid into Bank, which agreed with the amount to be paid in for Money Orders, I, knowing of no other source of revenue, accepted it without suspicion.
I do not suppose that I ever noticed the erasures on the vouchers referred to. If I had noticed them, I don't suppose I should have attached any importance to them, for the same reasons.
I was left in ignorance by my superior of the existence of the Postal Note branch of the business. Mr. BARRADAS had no book or books of account recording his transactions in respect of Postal Notes. How could I have known it or why suspect a trusted officer?
2nd charge (b.) I entirely deny having passed vouchers that did not agree in amount with the entries they vouched. If such exist they must have been altered since I passed them, I may have passed vouchers not agreeing in date but I have already given the reason. Want of time, pressure of work, entire absence of any ground of suspicion.
3rd charge (c.) I respectfully submit that it is not my duty to report such matters except in extreme cases, I am bound to assume that the head of the Post Office looks properly after his subordinates and that if any of their books and accounts are not up to date it is with his knowledge. My sole duty is to check their accounts when made up with the vouchers. I would see nothing of Mr. BARRADAS' November accounts till the Postmaster General's Collector's account came in, none came in in December or January for November.
In January I noticed the fact and that Mr. BARRADAS' accounts were getting very much into arrear and I was about to call Mr. TRAVERS' attention to it when I found that he knew of it and had spoken to Mr. BARRADAS. Mr. BARRADAS then fell sick and on his return to duty, finding nothing done, I reported to Mr. LISTER on the 17th March.
Charge 4 (d.) already answered. I knew nothing about Postal Notes and was left in ignorance by the Auditor General and by the absence of any books of account in the Money Order Department.
Charge 5 (e.) In August of 1889 there appeared in the Local Cash Book an entry "Loan from the Government Branch Offices $9,000." I knew that, as explained before, the Australian Post Offices were often largely in debt to Hongkong and that to pay Money Orders issued by them on Hongkong Mr. BARRADAS must use moneys received from other sources.
He explained to me that Australia was then largely in debt, that he had to meet claims over the counter to use moneys that he ought to have remitted to Bombay, for example. I asked Mr. ROCHA if this was all right and he assured me that it was.
I most respectfully submit that this is not a false entry, although it may be bad book-keeping and that it would necessarily vanish without any special entry in the next month's account on the receipt of remittances from the Colonies indebted to Hongkong.
One thing I can say most positively if the entry is fraudulent and wrong, I may have been tricked and deceived but I was neither careless nor negligent in passing it without question. I looked closely into it and it still seems to me correct.
Charge 6 (f.) The same answer as above applies. I could never have had any instructions for neither the Auditor General nor Mr. SILVA ever, to my knowledge, saw the books, knew of these loans, or heard of the entries. Anyhow, I have no recollections of such instructions.
Charge 7 (g.) I most emphatically deny that Mr. SILVA in any way instructed me to see that the amounts paid into the Treasury corresponded with the amounts which the Crown Agents were advised nor could I have any knowledge of how the accounts stand between Money Order Office and Crown Agents.
Charge 8 (h.) I have already answered this in part. I, in conjunction with the Accountant of the Post Office, Mr. ROCHA, examined and signed the balance sheet of 1889 which at the time appeared to be in order and I could not suspect anything wrong from it.
Charge 9 (i) My examinations were not in arrear, I could not examine an account before I received the Collector's account or before the account is closed.