CO885-5 — Page 14

Miscellaneous, No. 41.

Printed for the use of the Colonial Office.

Report of a Committee appointed to inquire into the Question of Defalcations in the Colonies.

PUBLIC RECORD

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The Departmental Committee appointed by the Secretary of State for the Colonies to consider the question of defalcations by Government officers in the Colonies beg to submit the following report:

2. The Committee have had before them a considerable number of cases of defalcation reported from different Colonies within a recent period.

3. They have also examined certain Colonial Government officers on leave in England whose experience was thought likely to enable them to afford useful information on the subject, and they have received some valuable suggestions from Mr. Harris Nicolas of the Audit Office, who has recently been deputed to examine the system of accounts in some of the West Indian Colonics.

4. The Committee have, moreover, been furnished by the Commissioners of Inland Revenue, the Postmaster-General, and the chief magistrate of the metropolitan police courts, with information which has been supplemented by personal examination of Mr. Robinson, of the Inland Revenue Department, and Mr. Alexander, the chief clerk of the Bow Street Police Court, as to the regulations in force in the collection of Inland and Postal Revenue in the United Kingdom, and the revenue derived through the police courts of the metropolis.

5. From the consideration of the cases which have been brought before them, the Committee have arrived at the conclusion that defalcations in the Colonies have been generally attributable not so much to the absence of proper regulations as to neglect of those which existed, and they think it will probably be found that most, if not all, of the recommendations which are contained in this report have in the great majority of the Colonies been already adopted in theory, though perhaps not invariably adhered to in practice.

6. In considering the precautions to be taken against defalcation by persons entrusted with public money or other property, three main objects must be kept in view; viz. :- (I.) The reduction to a minimum of the opportunities of committing the offence. (II.) Its certain and speedy detection when committed.

(III.) The indemnity of the public against loss occasioned by its commission. 7.-(I.) In order to remove as far as possible the opportunities of committing defalca- tion, it is essential that no single officer should be entrusted with the undivided custody or possession of a greater amount of public money or other property or for a longer period of time than is absolutely necessary.

8. The easiest and most convenient micthod of effecting this object, so far as cash is concerned, is the employment of banks for the receipt and payment of public money, and the Committee are of opinion that wherever a bank exists of the stability of which the Government has reason to be satisfied, an account should be opened with such bank, or one or more of such banks, in the name of the Treasurer or Receiver-General of the Colony, and that all moneys payable to the Government exceeding a fixed minimum amount, which should be as small as possible, should be paid direct into the bank to such account, upon an order signed by an authorised officer, and that the small excepted sums which would be received by a Government officer should be paid by him into the bank to the same account in a lump sum at the close of each day; this system, no doubt, imposes a certain amount of trouble and inconvenience upon the public debtors, but the Committee submit that this objection is more than counterbalanced by the security thus afforded to the public, and they are informed that in Mauritius where it has been adopted in pursuance of the recommendation of Sir Penrose Julyan, the system has been worked without any difficulty.

9. When, however, the system of direct payment by the public debtor into the bank cannot be adopted, every receiver of public revenue, in a place where there is a

P 429.

300.-1/80. G. 86. E. & S.