4
33
16.
(a)
Public money received by, or on behalf of a public officer, is being used instead of being paid into a bank account of the Accountant General, contrary to Colonial Regulation 233;
(e) Disbursements of public money are being
made by, or on behalf of a public
officer, who is not acting, by instruction, as a sub-accountant of the Accountant General contrary to Colonial Regulation 242;
(f) Payments are being made from a bank
account otherwise than by cheque
signed by the Accountant General or an authorized sub-accountant, contrary to Colonial Regulation 243.
It is possible that the Director of Audit in so commenting has possibly failed to realise the policy underlying the whole question of trade with Japan. As you are aware, it is of the utmost importance that the balance of trade should be maintained in our favour, especially in view of the possibility of an adverse balance having to be liquidated in United States dollars. A favourable balance necessarily means a credit to the Supreme Commander, Allied Powers, and thus involves a debit balance on the No. 2 (Japan Trade) Account. The Director of Audit in a communication to me has manifested some concern at the size of this overdraft, which on the 19th February, 1949, amounted to $16,035,493, but possibly failed to realise that the permanent overdraft on this account is always offset to a considerable degree Nor by the credit balance in the Import Margin Account. indeed is it yet possible to obtain a true picture by an examination of these accounts alone; only when the former Suspense Account has been cleared and amalgamated with the
This has been done new accounts can this be available. provisionally by the Department of Supplies, Trade and Industry, but it has proved as yet impossible to obtain final reconciliations from the Supreme Commander, Allied Powers, in view of the shortcomings of his accounting branch.
17.
I understand that the Director of Audit has forwarded a report on the four Japan Trade Accounts to the Director- General of Colonial Audit, but he does not appear to have supplied me with a copy. He has further indicated verbally that he is unable to undertake any audit of these accounts. In so far as his communications to me are concerned, I should perhaps point out that his criticisms appear to be based on
This ground does the ground that public money is involved.
not appear altogether secure, for no public money has in fact been appropriated, nor has any Government guarantee been
I much regret that in given in respect of the overdraft.
acting as I have done, I appear to have contravened so many of your instructions.
18.
As indicated in the Memorandum by the Financial Secretary, no Profit and Loss Accounts in respect of the various activities of the Department of Supplies, Trade and Industry have yet been produced, but work to this end has gone steadily ahead since the appointment last August of Messrs. Lowe, Bingham and Matthews, a local firm of Chartered Accountants, to take charge of the accounts. These Profit and Loss Accounts will be presented to Legislative Council when available, and present indications are that