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(b) Since the discovery of the frauds adequate steps have been taken to ensure proper payment of the subsidies.
For the Urban districts these are all paid by means of cheques which are handed to the Managers of the Schools by the Inspector of Vernacular Schools. In the New Ter- ritories the Managers have no banking facilities, and payment is necessarily made in cash. Here again the payments are made by the Inspector of Vernacular Schools out of cash furnished by the District Officer. The office clerk no longer handles cheques or cash.
This arrangement is satisfactory and should be adhered to.
(c) The system of dealing with school fees has always worked satisfactorily and no change appears to be essential.
(d) Where refunds are made the money is now brought or sent to the junior Inspec- tor of English Schools and a receipt is given. This enables a check to be kept on refunds, and the practice should be continued.
(e) The accounting operations of the department are now largely under the super- vision of the junior Inspector of English Schools. The Inspectors of English Schools are on a salary scale of £850 per annum rising by increments of £50 to £1,100 per annum, and it does not seem to us to be an economical proposition that a large proportion of the time of an officer on this scale of salary should be devoted to the routine work of
accounts.
The number of schools dealt with by the Inspectorate of English Schools, viz. twenty-five schools including Government and Grant Schools, scarcely seems to justify the employment of two inspectors, and this seems to be borne out by the statement of the senior Inspector that the junior Inspector has done practically no educational work during the past six months.
We have considered the position carefully and have come to the conclusion that the accounting operations of the department are not of such an involved nature as to justify the employment of a trained accountant but that the need for closer supervision of the accounting might be met by the appointment of a Secretary with some accounting experience.
Such an officer could well attend to the correspondence and other routine matters not requiring any special educational qualifications which, according to the "Statement of Work" put in by Mr. de Martin, clearly occupy so much of the time of the Inspectors of English Schools, and if such an appointment were made we consider that the services of one Inspector could be dispensed with.
(f) The financial operations of the department do not appear to have been effectively supervised by the head of the department for the past four years; and whether the pre- sent system be continued or a person of some accounting experience be appointed for service in the department, the need for effective supervision by the head of the depart- ment is insistent.
(g) Under the system in force since November, 1927, there seems little opportunity for fraud, if proper supervision is exercised; but we would suggest that, where the head of the department relies on the scrutiny of vouchers by a subordinate, it is desirable that the latter should sign instead of initialling the voucher, and, that in those cases in which the vouchers are consolidated in a paylist, the subordinate should also sign the paylist.
(h) We regard it as advisable that the Director of Education should forward periodi- cally to the Treasurer and the Auditor lists of the subsidized schools and the amounts of their subsidies. In the absence of such lists the Examination Branch of the Treasury and the Auditor have no means of checking anything more than the arithmetical accuracy of vouchers to the extent of over $100,000 per year.
Section V.
QUEEN'S COLLEGE.
125. (a) Any alteration of a bill by the insertion of new items or erasure of existing items might be prevented by the person who passes the bill for payment, in this case the headmaster, writing the amount in words above his signature.
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