cautions taken to control all receipts by the department;" and if they relied so much on the Audit as they say they did, it was doubly their duty to see that the necessary books and accounts were furnished in due time to the Audit Office.
29. The defalcations, as we have reported, began in Mr. WODEHOUSE's time, and amounted in the years 1886 to 1889 to $29,180, and would have been detected by some vigilance on his part; yet in justice to him it must be observed that he only carried out the system which had been in force for some years, and he did not appreciate then the value or necessity of the books being balanced.
30. Mr. MITCHELL-INNES, who took over the duties of Treasurer on the 1st January, 1891, was to devote the whole of his time to the working of this Office. It was his duty to close the account of 1890, to ascertain the amount of arrears outstanding, and to cause the Rent Roll of 1890 to be balanced as soon as possible, especially when his attention was called to it by the Local Auditor. He states that on Mr. NICOLLE speaking to him about balancing the book he spoke to ALVES and was met by the plea of press of work, and he expected it to be brought up to date gradually.
31. The defalcations of 1891 and 1892 would have been avoided if the balancing of this Rent Roll of 1890 had been taken in hand in proper time.
32. We are of opinion that Mr. NICOLLE should have required the Treasurer in writing to complete the book at once, and failing compliance with this request, to have reported the matter to the Governor.
33. In our opinion the balancing of this book is not such a laborious work as it is represented to be, much of it could and should have been done during the course of the year.
34. The evidence of Mr. BRUCE SHEPHERD disposes of ALVES' excuse that he could not close the account because he was waiting for a certain book from the Land Office.
35. During the years 1888, 1889 and 1890 the Treasurer was always an officer who had other duties to perform, and the working and supervision of the Office would naturally be left more to the chief clerk than if the head of the Treasury had had no other duties to perform. We cannot therefore acquit Mr. CARVALHO of blame. We think that some supervision on his part would have revealed to him the fact that ALVES was daily receiving money. In fact he says in his evidence that he might sometimes have handed a cheque to ALVES and that ALVES might have received cheques; and it is hardly possible that Mr. CARVALHO could be ignorant of the fact that ALVES was in the habit of receiving money. Having been chief clerk so long and acquainted with the work of that Office, he was in a position to appreciate the importance of balancing the books; he should therefore have himself caused the books to be balanced, and in default of this being done, he should have brought the fact to the notice of Mr. LISTER and his successors, and pointed out to them the importance of the books being closed.
36. The then Auditor General is to blame for allowing such a long delay between the end of the year and his examination of the books, thus:-
The Rent Roll of 1882 was balanced on 7/10/84
1883 12/11/84
1884 19/12/85
1885 7/11/86
1886 29/8/88
1887 9/5/89
The Rent Rolls for 1888 and 1889 have never been balanced.
37. Mr. MAY should have insisted on the Rent Roll of 1890 being at once balanced, as it was about 15 months in arrear when he took charge of the Office. We are of opinion that he is mistaken when he says that Mr. NICOLLE referred to the Rent Roll of 1891.
38. We therefore find that the following persons have by neglect or omission of duty indirectly allowed the frauds to be committed:-
1. Mr. LISTER for authorizing ALVES to sign these receipts, for appointing a shroff who could not read English, and for not insisting on the books being balanced soon after the end of every year, especially as the matter was brought to his notice by the Auditor.
2. Mr. WODEHOUSE by neglect in not causing the Rent Rolls of 1887, 1888 and 1889 to be balanced in proper time and thus ascertaining what sums appeared as having been paid in and what amount had actually been received by the Treasury.
3. Mr. MITCHELL-INNES in not causing the Rent Roll of 1890 to be balanced, especially when his attention was called to it by Mr. NICOLLE. We are also of opinion that if ordinary supervision had been exercised by him, he would have discovered that ALVES was constantly receiving money direct from the public.
4. Mr. NICOLLE by not reporting to the Governor the fact that he had not been able to obtain the books properly balanced necessary for his auditing.
5. Mr. CARVALHO, chief clerk, &c. He ought to have exercised greater supervision over all the Clerks, and not have permitted such arrears in the keeping of the books.
6. Mr. MAY because he did not carry out Mr. NICOLLE's requirement as to balancing the book.
7. The Audit department for the years 1884 to 1890.
39. With respect to the neglect of Mr. WODEHOUSE and Mr. MITCHELL-INNES mentioned in paragraph 38 we beg to remark that the gentlemen who have in turn filled the office of Treasurer do not seem to have appreciated the absolute necessity of balancing the books as being the only effective check, and they seem all to have relied on the Audit department.
The new Financial Instructions, dated 1891, distinctly say that the Treasurer's checks are to be independent of the Audit.
Mr. MITCHELL-INNES says that the Secretary of State's instructions do not agree with the Financial Instructions and that the Secretary of State had said that the Treasurer would have no auditing to do when the new Audit system came into force: that he—Mr. MITCHELL-INNES—wrote a despatch pointing this out and stating that he could not be responsible for the checking of the receipts unless the Treasury staff was increased.
40. (4) The causes that rendered the defalcations possible and those that prevented their earlier detection.
As we have above set out these causes were the complete control given to ALVES over the receipt of money, without any check on him; the appointment of a shroff who could not read the contents of a receipt which he stamped; the non-balancing of the Rent Rolls of 1888 to 1892, and the unlimited confidence which the several heads of the Treasury and the Audit placed in Mr. ALVES.
Page 665
[vi
ii}
cautions taken to control all receipts by the department;" and if they relied so much on the Audit as they say they did, it was doubly their duty to see that the necessary books and accounts were furnished in due time to the Audit Office.
29. The defalcations, as we have reported, began in Mr. WODEHOUSE's time, and amounted in the years 1886 to 1880 to $29,180, and would have been detected by some vigilance on his part; yet in justice to him it must be observed that he only carried out the system which had been in force for some years, and he did not appreciate then the value or necessity of the books being balanced,
30. Mr. MITCHELL-INNES, who took over the duties of Treasurer on the 1st Jan- uary, 1891, was to devote the whole of his time to the working of this Office. It was his duty to close the account of 1890, to ascertain the amount of arrears outstanding, and to cause the Rent Roll of 1890 to be balanced as soon as possible, especially when his attention was called to it by the Local Anditor. He states that on Mr. NICOLLE speaking to him about balancing the book he spoke to ALVES and was met by the plea
press of work, and he expected it to be brought up to date gradually.
of
31. The defalcations of 1891 and 1892 would have been avoided if the Lalancing of this Rent Roll of 1890 had been taken in hand in proper time.
32. We are of opinion that Mr. NICOLLE should have required the Treasurer in writing to complete the book at once, and failing compliance with this request, to have reported the matter to the Governor,
33. In our opinion the balancing of this book is not such a laborious work as it is represented to he, much of it could and should have been done during the course of the
year.
34. The evidence of Mr. BRUCE SHEPHERD disposes of ALVES" excuse that he could not close the account because he was waiting for a certain hook from the Land Office.
85. During the years 1888, 1889 and 1890 the Treasurer was always an officer who had other duties to perform, and the working and supervision of the Office would naturally be left more to the chief clerk than if the heal of the Treasury had had no other duties to perform. We camior therefore acquit Mr. CARVALIO of blame. We think that some supervision
on his part would lave revealed to him the fact that ALVES was daily receiving money. In fact he says in his evidence that he might sometimes have handed a cheque to ALVES and that ALVES might have received cheques; and it is hardly possible that Mr. CARVALHO could be ignorant of the fact that ALVES was in the habit of receiving money. Having been chief clerk so long and acquainted with the work of that Office, he was in a position to appreciate the importance of balancing the books; he should therefore have himself caused the books to be balanced, and in default of this being done, he should have brought the fact to the notice of Mr. LISTER and his successors, and pointed out to them the importance of the books being closed.
36. The then Auditor General is to blame for allowing such a long delay between the end of the year and his examination of the books, thus :-
The Rent Roll of 1882 was balanced on
1883
1884
1885
*
1886
1387
The Rent Rolls for 1888 and 1889 bave never been balanced,
7/10/84
12/11/84
19/12/85
7/11/86
.297 8/88 9/ 5/89
ix]
37. Mr. MAY should have insisted on the Rent Roll of 1890 being at once balanced, as it was about 15 months in arrear when he took charge of the Office.
We are of opinion that he is mistaken when he says that Mr. NicoLLE referred to the Rent Roll of 1891.
38. We therefore find that the following persons have by neglect or omission of duty indirectly allowed the frauds to be committed :---
1. Mr. LISTER for authorizing ALVES to sign these receipts, for appointing a shroff who could not read English, and for not insisting on the books being balanced soon after the end of every year, especially as the matter was brought to his notice by the Auditor.
2. Mr. WobrutoUse by neglect in not causing the Rent Rolls of 1887, 1888 and 1889 to be balanced in proper time and thus ascertaining what sums appeared as having been paid in and what amount had actually been received by the Treasury.
3. Mr. MITCHELL-INNES in not causing the Rem Roll of 1890 to be balanced. especially when his attention was called to it by Mr. NICOLLE. We are also of opinion that if ordinary supervision had been exercised by him, he would have discovered that ALVES was constantly receiving money direct from the public.
4. Mr. NICOLLE by not reporting to the Governor the fact that he had not been able to obtain the books properly balaneed necessary for his atditing.
5. Mr. CARVALHO, chief clerk, &c. He ought to have exercised greater supervision over all the Clerks, and not have permitted such arrears in the keeping of the books.
6. Mr. May because he did not carry out Mr. Nicole's requirement as to
balancing the book.•
7. The Audit department for the years 1884 to 1890.
39. With respect to the neglect of Mr. WODEHOUSE and Mr. MirCHELL-INNES mentioned is paragraph 38 we beg to remark that the gentlemen who have in turn filled the office of Treasurer do not seem to have appreciated the absolute necessity of balancing the books as being the only effective check, and they seem all to have relied on the Awlit department.
The new Financial Instructions, dated 1891, distinctly say that the Treasurer's checks are to be independent of the Audit.
Mr. MITCHELL-INNES says that the Secretary of State's instructions do not agree with the Financial Instructions and that the Secretary of State had said that the Treasurer would have no auditing to do when the new Audit system came into force : that he-Mr. MITCHELL-INNES—wrote a despatch pointing this out and stating that be could not be responsible for the checking of the receipts unless the Treasury staff was increased.
40. (4) The causes that rendered the defalcations possible and those that prevented their earlier detection.
As we have above set out these causes were the complete control given to ALVES over the receipt of money, without any check on him; the appointment of a shroff' who could not read the contents of a receipt which he chopped; the nou-balancing of the Rent Rolls of 1888 to 1892, and the unlimited confidence which the several heads of the Treasury and the Audit placed in Mr. ALVES.
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