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Paragraph 2 of the Comptroller and Auditor-General's letter to the Secretary of State dated May 27th, it will be seen that the Comptroller and Auditor-General entirely concurs with my view, that an intermediate departmental audit by the Railway is absolutely essential. I consider from my past experience of the Uganda Railway Audit that the accounts and audit of the Kowloon-Canton Railway can never be run on a sound basis until the Railway Examiner of Accounts has been actually installed in that position.
I have etc.,
(sd.) H. R. Phelips, Local Auditor.
Honourable The Colonial Secretary.