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57. Mr. Gaston Pacros de Martin, M.B.E., the junior Inspector of English Schools, assisted in a limited manner in the accounting matters of the department. He was not concerned with the expenditure side, but had been instructed by Mr. Irving to take over the checking of the Fee Book, and he initialled the Collector's Account before this was put up to the Director for signature.
He does not appear to have been given instructions to ensure that all money which should have been received was in fact received and interpreted his instructions as limiting his responsibility to ensuring that there appeared in the Fee Book entries only of those amounts for which he had seen either the bank paying-in slip or the Treasury receipt for such slip, and to ensuring that everything shown in the Fee Book appeared in due course in the monthly Collector's Account.
Mr. de Martin regarded a refund as a matter touching the expenditure side as the money must have been expended before it could be refunded; consequently, if the bank paying-in slip or the Fee Book showed a refund, he did not consider himself concerned to enquire who had made it or why it had been made. This is regrettable as an enquiry as to the nature of the refund of $1,750.00 made on the 26th September, 1926, (see para. 53, supra) would have disclosed that this sum represented, and in fact exceeded, the aggregate amount of numerous sums which should have been refunded in the earlier months of that year but had been temporarily withheld by Chan. Tsz Un.
58. During Mr. Orme's administration Mr. Ralphs had not ordinarily anything to do with the financial operations of the department except in so far as they touched the affairs of the Technical Institute, and the same position prevailed during Mr. Wood's administration except when Mr. Ralphs acted as Director in Mr. Wood's absence.
Mr. Ralphs entered the Government Service in 1898 and was appointed Inspector of English Schools on the 1st October, 1913. From January, 1915, until October, 1918, while Mr. Irving was engaged on special war work, he performed the routine duties of Director of Education. He also acted as Director for periods in 1918 and 1919. He therefore has some considerable experience of the financial operations of the Department.
59. He tells us that, during Mr. Irving's administration, paylists and vouchers were carefully scrutinized first by himself and then by Mr. Irving. He says that vouchers for personal emoluments would invariably be returned to the Director after they came back. from the schools and that this would apply when he was acting as Director.
He says that he would scrutinize them and that if he saw the word "Refunded" he would con- sider it the proper procedure to see that there was a refund to the Government. Mr. Ralphs states that he does not remember any cases of items being marked "Refunded”.
An examination of the vouchers for July and August, 1925, and July and August, 1926, during which months Mr. Ralphs acted as Director in the absence of Mr. Orme and Mr. Wood, respectively, discloses that forty items on those vouchers are marked "refunded" of which twenty-five items, amounting in all to $643.00, were not in fact refunded to the Government.
Mr. Ralphs had proceeded on leave to England before this fact came to light, and we therefore have been unable to ascertain why he did not adopt that procedure which he regards as correct in relation to such items.
60. The Government gives financial support to some three hundred Elementary Ver- nacular Schools in Hong Kong, Kowloon and the New Territories. This support takes the form of subsidies granted on the recommendation of the Director of Education and these, in the year 1927, amounted to $101,690.00.
The subsidies are paid quarterly and for this purpose there are prepared each quar- ter, from records kept by the Inspector of Vernacular Schools, a number of sub-vouchers showing the situation of each school, its manager and the amount of the subsidy payable.
The Inspector of Vernacular Schools scrutinizes and initials each sub-voucher and the aggregate amounts shown on these are incorporated in Paylists which, after certifica- tion by the Director of Education, are transmitted to the Treasurer who, at the end of the quarter, sends to the Director a cheque for the amount to be disbursed.
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