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The shroffs are seated at the counter and the collection book clerks are at desks immediately behind the respective shroffs with whose collections they are concerned.
The Book-keeping and Examination Branch staffs are accommodated in an office communicating with the General Office and also with the Colonial Treasurer's room.
8. The Treasury staff is under the general supervision of Mr. Black, the Accountant, and this officer is in charge of all matters relating to expenditure and to book-keeping in connection therewith. He also countersigns cheques on the Government's General Ac- count and the accounts of the Public Works Loan and the Trade Loan.
The work of the Revenue Branch staff is under the supervision of Mr. Barton, the Cashier, who countersigns only such cheques as are drawn on the Praya East Reclama- tion Account.
For the proper appreciation of the system in force in the Treasury and of the duties performed by the various officers it appears necessary to enter into some detail with re- gard to both receipts and expenditure.
9. The Revenue Branch is concerned with the receipt of moneys falling under forty- four heads of revenue. The most substantial of these are Assessed Taxes, Crown Rents, Water Excess Supplies and Meter Rents, Liquor Licences and Pawnbrokers' Licences.
The duty of handling the money paid in is apportioned amongst the seven shroffs concerned with the collection of revenue and the primary accounting is apportioned amongst the six Collection Book clerks.
One of the seven shroffs is secured for a sum of $5,000.00 and the remainder for $1,000.00 each. The senior shroff, whom we regard as a member of the Expenditure Branch Staff, is also secured for $5,000.00. The Collection Book clerks are strictly forbidden to receive moneys and are therefore unsecured.
10. It seems desirable to set out the procedure, and to show the various stages, from the time when an account becomes due until the money paid in settlement thereof is banked and brought to account in the ledgers of the Colony.
As this Report will at a later stage proceed to deal with the recent defalcations in re- lation to Hong Kong Water Accounts these may be taken to illustrate the procedure, which is substantially the same for all types of revenue paid at the Treasury.
11. At the close of each quarter the Water Authority prepares and sends out accounts for all consumers and despatches to the Colonial Treasurer and the Auditor Schedules for each district embodying the material details of these accounts.
The Schedules are handed over to the clerk in charge of the Collection Book for Hong Kong Water Accounts, and he posts in the Revenue File the gross amount to be collected as shown by each Schedule. At all times material to this Enquiry the Revenue Files were loose leaf files. A new Revenue File is opened each year, but the arrears are brought forward therein as one aggregate sum and not as separate amounts for the various quarters to which they relate, and the Files do not show separately the collections made in respect of any given quarter. They are consequently of little value as indicators of the progress in the collection of revenue for any given quarter.
12. The consumer desiring to pay an account presents the account and the money to the shroff, who notes the account number and the amount in a rough unofficial book intend- ed solely for his own guidance. He retains the money and passes the account to the Col- lection Book Clerk. The latter compares the account with the item appearing on the Schedule, and stamps the latter with a stamp indicating the date of payment. He then prepares a receipt with a carbon copy and posts the payment in his Collection Book. Ile next hands the original receipt to the Shroff who impresses on it his private chop to indicate receipt of the money. As the receipts are at busy times handed to the shroff in large batches he does not exercise any care in scrutinizing these but relies on the accu- racy of the amounts inserted by the Collection Book Clerk. The Collection Book Clerk then takes the original receipt, the duplicate (retained in the book) and the Collection Book to the Cashier, who after comparing the details of the receipt with those in the
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