No. 68.
COFY
Secretary of State to Governor of Hongkong.
1
26th February, 1920.
332
sir.
I have the honour to acknowledge the receipt of
Mr.Severn's despatch No.161 of the 19th May, 1919,
referring for my decision certain questions which
have arisen in connection with the system of account-
ing in the Public Works Department.
2. After consulting the Director of Colonial
Audit on the point at issue I find myself unable to
concur in the view of the Director of Public Works,
which seems to be based upon the erroneous assumption
that the capital cost of the Water Works of the Colony
must necessarily be exhibited in the Treasury accounts.
Having regard to the exigencies of Government account-
ing such a record as he appears to contemplate cannot
be secured, and if, as I am advised should be the case
in connection with such an undertaking as that referred
to, it is desired that a capital account should be
maintained, this record should be compiled separately
from, but be capable of reconciliation with, the
general account of the Colony. It would seem therefore
that the view taken by the Treasurer and the Auditor
is the correct one with the exception that, instead of
carrying the value of the returned stores to the credit
of the "Stores Depreciation" Vote, it would be preferable
to credit all such amounts to a special subhead under
the