10
Mr. Black says :-
"The names of the payees are unknown to me. This being so and the amounts being large I should have looked with particular care to the accom- panying vouchers. I know all our large contractors and should have chal- lenged any such sized payment to anyone other than a regular contractor. I always scrutinized with particular care the vouchers relating to large che- ques. As Treasury payments go, these are very large payments.
I always require large cheques to be crossed, unless the payee has specially requested that the cheque be left open. We have a list of those contractors who have requested that their cheques be left open.
When we cross cheques we use a crossing stamp. These three cheques are crossed in ink and I should have noticed if the cheques had not been crossed when presented for signature, and I should have noticed and asked the reason why, if the cheques had been crossed in ink instead of a crossing stamp being used.
Towards the end of the year I was on the look-out for any large payments. Firstly to see that the funds at the Bank were adequate to meet them, and secondly, to see that the expenditure was duly passed by the Examination Branch as being within the Vote concerned and correct in other respects. I did in fact towards the end of December refuse to sign a number of cheques in respect of which the vouchers had not been passed by the Examination Branch because I desired to be satisfied that the amounts were within the Vote. The handwriting in the body of each of these cheques, while it bears a strong resemblance to the Cash Book Clerk's handwriting struck me, when I first saw it, as being different from the usual handwriting, and I believe I should have challenged these cheques for that reason".
We apprehend that, for obvious reasons, it would not be proper for us to express any opinion as to the genuineness or otherwise of the alleged signatures of Mr. Messer and of Mr. Black which appear on these cheques; we consider that we have fulfilled our duty by detailing the facts as found by us and by calling attention to the categorical repudiation of those signatures by these two officers respectively.
Section II.
THE MISAPPROPRIATION OF WATER ACCOUNTS.
42. In February, 1928, the Treasury and the Water Authority compared their figures as to the revenue derived from Water Accounts during the year 1927.
It was immediately discovered that there was a serious discrepancy; and on examina- tion of the Treasury Accounts it was found that sums amounting in all to $15,329.95 had not been brought to account.
This sum was made up in the following manner:
3rd. Quarter 1926 85 accounts apparently unpaid amounting to
4th.
>>
1st. 2nd.
69 1927 17 106
""
2)
9:
""
""
""
277 accounts
Total
وو
""
67
$ 2,133.70
3,458.00
2,178.00
7,559.50
$15,329.95
The accounts in question were all Hong Kong Water Accounts.
Perhaps the most disquieting aspect of this fraud is that misappropriations which occurred in December, 1926, were not discovered until February, 1928.
43. During the course of the investigation it was discovered that the Revenue Files for 1927, in the custody of the Collection Book Clerk, had been falsified is such a manner as to show $8,070.06 less to be collected than should have been collected according to the Water Authority's Schedules, and $7.582.44 more as having been collected than was actually brought to account in the Collection Books. Mr. Sung Kan, the Audit Department Clerk charged with the duty of checking these Files, states emphatically that the Files examined and marked by him bore only figures corresponding exactly with those appear- ing on the Water Authority's Schedules and in the Collection Books.