n page 9 of the Report of the Visitors, this grant as you know
a
ormed part of the general financial settlement between His
Majesty's Government and the Government of Hong Kong.
Accordingly the provision in Colonial Office Votes
must take the form of a grant in aid to the Government of
ong Kong and the terms of the Vote as approved by
Parliament requires that the issue should be supported
by audited accounts and with any report thereon by the
Director General of Colonial Audit. It is recognised that
some inconvenience might result if payment of this grant
and payments in respect of C.D. & W. schemes were dealt
with by different authorities particularly as money from
both sources will be used on related capital works. While it
is not possible, in view of the terms prescribed by
Parliament to vary the condition that in the former case
,
payment would have to be through the Government of Hong
Kong there would be no objection in principle to the
University administering the expenditure from the grant
provided the audit condition can be fully met. In
this connexion regard must be had to paragraph 2 (c)
of the enclosed memorandum of July, 1948. It would
seem that the best course for the University to pursue in
order to avoid the necessity of having to distinguish
between expenditure from the C.D. & W. grant and from
the grant promised in the 1948 Financial Settlement
would be to arrange for its accounts to be subject to
audit by the Director General of Colonial Audit so as
to ensure that they were in a form acceptable in audit
for United Kingdom purposes. In this case the University
could submit one account covering capital expenditure ranking against (a) the grant under the Financial
Settlement
12