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Travelling Inspectors of Accounts should be at once brought to the notice of the Accountant and, if necessary, of the General Manager of the Railway. If such irregularities are serious or continuous they should also be reported to the Governor and to the Director of Colonial Audit.

69. In his examination of the railway revenue accounts the Auditor will be guided as to points of accounting procedure by the system which obtains in the accounts of the English railways, so far as it is applicable, and he will endeavour to secure that the checks therein provided are adopted so far as local circum- stances permit.

70. The accounts of railway expenditure will be examined in detail by the Auditor on the same principles as the ordinary expenditure accounts of the Colony.

71. The general cash accounts of the railway will be examined in detail by the Auditor. The amounts brought to account as revenue will be verified, in the case of station receipts, with the amounts taken to credit by stations as shown in the audited balance sheets of coaching and goods traffic, and, in the case of receipts collected directly by the Accountant's Department, with the audited subsidiary accounts. The amounts charged as ex- penditure will be verified by a comparison of the credit entries in the cash book with the expenditure vouchers. All trans- actions on account of deposits, advances, and imprests will be carefully checked, and journal entries and ledger postings will be verified.

72. The monthly statements rendered to the Colonial Treasurer by the Railway Accountant, which should be framed on the basis of actual cash receipts and payments, will be examined in detail with the railway account books.

73. The examination by the Auditor of the accounts recording the receipts and issue of stores will be of the nature of a test only, a detailed check being, however, applied to the totals carried into the monthly stores balance sheets. Issue valuatious should be frequently verified.

74. The Auditor will make occasional surprise inspections of the accounts of every branch of the railway, which is charged with the duty of accounting for money or stores.

FINANCIAL ARRANGEMENTS.

75. The cost of the Colonial Audit Department, both effective and non-effective, will be a charge upon the funds of the Colonies, the accounts of which are audited under the supervision of the Director of Colonial Audit, and will be divided proportionately between them.

76. An annual estimate of the total cost of the Colonial Audit Department will be framed by the Director of Colonial Audit for the information of the Secretary of State showing in respect of each Colony (i.) the local charges to be defrayed by that Colony; and (ii) the share which each Colony should bear of the total home expenditure calculated upon the principle of the proportion which the total of the receipts and payments of

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each Colony for the latest completed financial year bears to the aggregate of the receipts and payments of all the Colonies concerned during the same period. Subject to the Secretary of State's approval of the recommendations of the Director of Colonial Audit, the amounts estimated to be required during the year will be provided for in the Annual Estimates of the Colonies concerned.

77. The local charges in each Colony in respect of the personal emoluments and other expenses of the local audit establishment will be defrayed in the same manner as those of other Government Departments.

78. To meet the charges in respect of the home establishment of the Department the Director of Colonial Audit will submit requisitions to the Crown Agents for the Colonies from time to time for the amount estimated to be required from the funds of each Colony towards defraying such charges, and the Crown Agents will pay the sums so required into the account of the Colonial Audit Department charging them against the respective Colonies and furnishing to the Treasurers, as vouchers, the requisitions of the Director of Colonial Audit. The suma ao paid will be allocated in the accounts of the Treasurers direct to the provision for home expenditure in the Audit Vote. Out of the funds thus paid to the account of the Colonial Audit Department the Crown Agents will, on the authority of the Secretary of State, defray the salaries and other expenses of the home estab- lishment.

79. The Director of Colonial Audit will furnish, for the information of the Secretary of State, an annual account of the home expenditure, together with a statement showing the appor- tionment of the total amount amongst the several Colonies con- cerned, the respective shares of the Colonies being calculated upon the same basis as that upon which the Annual Estimates for the year were framed.

80. Any representations relating to the estimates of the local charges in any Colony that the Auditor may desire to submit to the Director of Colonial Audit should be forwarded sufficiently early to reach the Colonial Audit Department not later than the 30th April in the preceding year in the case of Colonies where the financial year ends on the 31st December, and not later than the 31st July where the financial year ends on the 31st March. Such representations will not include proposals involving an alteration in the number or the emoluments of the local audit establishment or any additional expenditure not covered by exist- ing authority, unless in the first instance they have been sub- mitted to and have been approved by the Governor,

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