Secretariat file 13/^
T
151.
SAVINGRAM
To the Secretary of State for the Colonies.
From the Governor, Hong Kong.
Date. 30 November, 1951......
No..
1320
(4)
54120/19/5.
413/54420/49
Your despatch 62 of 9th March 1951.
Accounts of the supplies branch of the Commerce and Industry Department,
I enclose a copy of the auditors' report on the accounts for the supplies branch of the Commerce and Industry Department for the year ended 31st March 1951. These will be incorporated in the appendices to the 1950/51 annual report of the Commerce and Industry Department to be laid on the table of the Legislative Council in due course.
2.
The auditors' comments on the operating account for Japan trade are not in my view justified. Reference to paragraph 12 of my despatch No.48 of the 19th March, 1949, will show that one of the prime reasons for adoption of the system now in operation was to relieve the department of accounting work, and it was never intended that the officers in the Japanese Trade section should check in full all payments and receipts by the banks and the commissions due to Government. The section did in fact completely check every receipt and payment made through the Open Account against the Bank Account and the Letters of Authority. This was not originally intended but had to be done in order to maintain a check on the state of the account in view of the fact that at peak periods the participating banks were so overwhelmed with business as to be unable to provide the figures with the required promptness. Moreover throughout the whole period a sample test of at least 10% of commission due was continued. The auditors themselves were satisfied with a sample test and there is no reason to doubt that this method was suitable in the circumstances.
3.
The discrepancies between the accounts of the supplies branch and the Custodian of Property which appear to have arisen from a misunderstanding between the Treasury and the Custodian have now been reconciled. Full provision for the liability to the Custodian of Property has in fact been provided for and the auditors will be informed of the position.
Encl.
RMH:IS
my I am
ISTRAX'S OFFICE - 7 DEC 1951
COLONIAL OFFICE
4