A (2) 28
149. A continuous audit has been maintained on the accounts of the Railway, Imports and Exports Department, and the Stores Department, in addition of course to those of the Accountant-General.
Audit Report 1937.
150. The Audit Report on the accounts of the year 1937 was placed before the Legislature on the 10th November, 1938, together with a copy of the Governor's covering despatch to the Secretary of State.
151.
L. KOWLOON-CANTON RAILWAY.
A copy of the General Manager's report for 1938 on the working of the British Section of the Kowloon-Canton Railway, which was received by the Auditor on the 15th May, 1939, is forwarded (Enclosure 21).
The accounts have been regularly rendered and satisfactorily kept.
152. Surprise Audit surveys of the Cash Balances etc. were made during the year at Railway Headquarters, and all stations, and call for no comment. In addition, stocks of stores were subjected to test verifications with satisfactory results.
153. The net profit on the Operating account of the Railway for the year was $932,418.48, which is $495,483.18 in excess of that of the previous year.
154. Prior to the invasion of South China, the volume of traffic on the Railway increased enormously, which in its turn involved a considerable addition to the work of Audit, and had these conditions persisted, it would have become necessary to apply for an increase of Audit staff to meet the situation. The lull caused by the cessation of through traffic since October last has, however, enabled the Audit Examiners to recover lost ground.
Tools and Plant Records.
155. It has come to the notice of Audit that the Inventories of Tools and Plant maintained by the Railway Department were inadequate and listed only certain of the more important items of machinery and equipment. The question of the introduction of a Tools and Plant ledger, the preparation of more complete Inventories, and the establishment of a system of 'shadow boards' in the various sections of the Railway workshops, for the better control over small tools in use, has recently been taken up in correspondence and discussed with the Manager of the Railways.
M. OUTSTANDING QUESTIONS.
1937 Accounts-Estate Duty.
156. With reference to paragraph 98 of the 1937 Audit Report, the two properties referred to have been disposed of by Public Auction, and the net sum realized, viz. $21,481, was credited to 1938 Revenue Head 3 (b) Estate Duty. The assessed duty on the Estate was $20,384 plus accrued interest.