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We will state our views under these six heads seriatim.
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THE PRESENT FINANCIAL SITUATION.
We find that at the end of the present financial year on the 31st August, 1920, there will be a deficit for the year on Working Account of about £145,000, including about 845,000 of a non-recurrent character mainly in respect of an honorarium and other payments which have been made to the late Vice-Chancellor and former members of the staff; we find that
this deficit together with the previously accrued deficit on
the same account will amount to about $225,000; and we find
that the deficit is due to the Council having, especially
during the financial year between the 1st September, 1918, and
the 31st August last, embarked on a policy of expansion and
increased expenditure greatly in excess of the means of the
University. We also find that at the end of the present
financial year there will be an overdraft at the bank of about
8500,000 on Working and Capital Accounts combined.
We find that, in committing the University to
these expansions, the Council, which under the University
Ordinance 1911, is entrusted with "the government and control
of finances", did not obtain and had not before it the neces-
sary information concerning the financial position, which indeed
it appears to have disregarded. And in particular, although
by the Ordinance its authority to "borrow and owe" money is
limited to a total of $100,000, except with the sanction of a
resolution passed at one meeting and confirmed at a subsequent meeting called for the purpose, we find that the Council has in
fact largely exceeded this total without obtaining any such
sanation.
In 1915 Mr. Loke Yow, who has since died, lent the
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