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The Chairman.--You could not have detected the fraud earlier unless the book was balanced?
A.---- No.
Q.--How did you actually detect it?
A.--I was checking the December account and going through the counterfoils. I first checked them with the daily receipt book as kept by Alves. I then checked that with the Rent Roll and I lighted on a name in which there was a difference between the counter-foil and the rent roll.
Q--What did you do then?
A--I spoke to Alves about it.
Q--Had he no explanation?
A.--He said "It must be a mistake." I had always found that he was a careful man and a good worker. Mr. Ede was the person who had paid the money and he said that he would enquire from Mr. Ede.
Q.--You did not suspect anything wrong?
A.--Not at the moment.
Mr. Thurburn.--What day was that?
A.--It was on the Saturday. On the same day I found two similar cases.
Q--Did you suspect him then?
A.--Yes.
Q--You drew Mr. Mitchell-Innes' attention to it?
A.--I went to the club before tiffin intending to see Mr. Shelton Hooper and ask him to show me his receipts and see whether they really did differ. He said he would send them in during the afternoon, but I did not hear anything from him. On Monday morning I went to the Treasury first thing and Mr. Shelton Hooper produced the receipts and I then saw that the thing was utterly wrong. I waited for Mr. Mitchell-Innes and I went to the Hotel to look for him. Not finding him there I returned and then met him and I told him then about it.
The Chairman.--On that day was the book for 1891 balanced?
A.--No, that has all been balanced since.
Q--And the 1890 book?
A.--Has been balanced since.
Q--It was not then?
A.--No.
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Mr. Thurburn.--What did Mr. Mitchell-Innes do? What did he say to Alves?
A.----He came down to the Office between a quarter to 2 and 2 o'clock on Monday afternoon and immediately sent for Alves and asked him what was the meaning of this. In the meantime during the morning I had asked Alves about those other cases and Alves said "they must be mistakes" and he fiddled about the office doing his own work. Mr. Mitchell-Innes when he came sent for Mr. Shelton Hooper who came and brought his receipts and we compared them and showed them to Alves.
The Chairman.--What did Alves say?
A.----He said "Damn, it must be a mistake I cannot understand it at all."
Mr. Thorburn.--The suspicion was not strong enough to have him arrested?
A.--I do not know. I handed him over to the executive and had nothing more to do with the matter.
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The Chairman.--I don't think we have to enquire into why he was not arrested. (To witness) Mr. Mitchell Innes went on leave in 1892, did he not?
A.--I do not know.
Q--He was away during last year?
A--During a portion of last year.
Q.--He was here during the whole of 1891?
A.--Yes.
Q--In 1891 did you ever ask that the Rent Roll for 1890 should be balanced?
A.--Certainly, I called attention to its not being balanced. It was one of the first things I called the attention of the Acting Treasurer to.
Q--He only came in 1892?
A.--Yes.
Q--And did your observations refer to the book of 1890?
A.--My observations referred to the books of 1890 and 1891.
Q--Did any other book particularly require balancing?
A.--No.
Mr. Thurburn.--For the assessed taxes there was no book at all apparently?
A.--There is now.
Q.--Formerly?
A.--No, formerly they collected the assessed taxes and simply showed the calculations in a lump sum.
Mr. Bird.--There was no way to ascertain whether the taxes were paid in?
A.--If you got a man to work at it for a year he might do it. I have been checking the assessed taxes, during the past day or two, for the villages. All we have been doing is checking the counterfoils with the payments into the Treasury and looking down the assessments book. To do one quarter for the villages alone has taken three days.
Mr. Thurburn.--The book they have now adopted will balance?
A.--Yes.
Q.--And therefore they will have a check?
A.--Yes.
Q--How often?
A.--Quarterly--at least it ought to be balanced quarterly.
Q.--Of course the checking of all these other items, (indicating items in the annual financial balance sheet published in the Gazette) most of them apparently, had been in other departments?
A.--Yes.
Mr. Bird.--When they come from other departments they are probably correct, one department checking another?
A.--No.
The Chairman.--The Treasury only knows that the Bank has received so much?
A.--Yes.
Mr. Thurburn.--When the Treasury receives so much from the Post Office the Post-master is responsible for that being correct?
A.--Yes.
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