(18)
SECOND MEETING.
March 2nd, 1893, at 11.30 in the forenoon.
Present: Mr. E. J. ACKROYD, Chairman.
Mr. J. THURBURN,
Mr. S. G. BIRD.
Mr. F. J. BADELEY, Secretary.
Mr. Hilgrove C. Nicolle, Government Auditor, called.
The Chairman.-What is your name?
Witness.-Hilgrove C. Nicolle.
Q-When were you appointed local auditor?
A.-I was appointed from January 22nd, and I arrived in Hongkong on April 14th, 1890.
Q-When did you begin examining the Treasurer's accounts and books?
A.-Very soon after I came here. A few days after arriving I went to the Treasury and started my examination.
Q. What books and papers did you require for your examination? Take, for instance, the Crown Rents.
A.-The books I required were counterfoil receipt books, the daily receipt book kept by Mr. Alves, the Rent Roll and this cash book and journal and ledger (all produced) and I traced the items into the cash book and ledger to see that the amounts were duly paid into the Government.
Q.-There is a ledger kept for the Crown Rent?
A.-There is a separate place in the ledger for Crown Rent.
Q.-And what totals are entered in that?
A.-The monthly totals.
Q.-What system did you follow in checking and examining this Rent Roll?
A.-I took the counterfoils and I checked them with what is known as Alves' daily receipt book. I checked the daily totals from that book into the cash book and I checked a certain number, a considerable number, of the counterfoils with this Rent Roll. I also checked the Rent Roll sent up by the Land Office with the Treasury Rent Roll.
Mr. Thurburn.-You did not go through the counterfoils?
A.-No, not all.
The Chairman.-Not every counterfoil?
A.-No, not with the Rent Roll.
Mr. Bird.-If you had checked the counterfoils you would have found all this out before?
A.-Well, we have been through the counterfoils in the Office and, as far as I know, there are only two cases in July where there is a difference and there is one case in February last, and these are the only specific cases where we should have found it out if we had checked the counterfoils with this book.
(19)
Q. How do you think the defalcations have occurred then?
A.-I think Alves received money and issued a receipt of his own.
Q.-And there were no counterfoils?
A.-No.
Mr. Thurburn.-Some of the receipts undoubtedly were forgeries, but we understood that the greater number of the frauds were committed by altering the counterfoils in the book.
A.-We only found, I think, four specific cases altogether of the counterfoils differing from this book. There is one on September 23rd, one on December 31st. There are really four different frauds and these are the only cases we could find.
Mr. Thurburn.-And what do they amount to?
A.-About $2,000 I should say.
Q-The whole deficiency is about--?
A.-$59,000.
The Chairman.-Then how do you account for the balance?
A.-By false receipts, and there is also another method under which it might be possible, and it is this. In former years, up to the middle of 1891, the counterfoils used to be filled up in advance and I think that in those days he made them agree with this book, and it has struck me that he may have filled in the number and ticked it off as though I myself had done it. Now the counterfoils are all issued in numerical order and have been for some time,
Q-How has he managed then to make away with this amount; you say that he made out different receipts altogether and never brought the amount into account.
A.-I cannot tell you how he has done it except in specific cases we have found, but, of course, they do not cover anything like the amount.
Mr. Thurburn.-The fact that he has destroyed the books, I suppose, prevents you?
A.-Yes.
The Chairman.-You say that you have been through the books?
Q.-What years are they?
A.-1891 and 1892.
Q.-Going through all the books for 1891 and 1892 you have only found the instances you have given?
A.-That is all.
Q-And they amounted to about $2,000?
A.-About that.
Q. What is the amount of the defalcations for 1891 and 1892?
A.-The amount roughly was $11,940 in 1891 and $7,336 for 1892.
Mr. Thurburn.-Then there was about $40,000 taken previous to those years?
A.-Yes.
Q. How did you find those figures out-by balancing?
A.-The Rent Rolls for 1888 and 1889 are not to be found; they have disappeared. Therefore the only thing one has to go by is the Rent Roll from the Land Office. We have the book balanced for 1887 and I have taken the arrears not paid and the amounts paid to the Treasury during 1888 and 1889. That ought to give you a balance. For the other years I have taken calculations by Alves giving the amounts he says were collected and on the other side I have taken what has been paid to the Treasury.
676
(18)
SECOND MEETING.
March 2nd, 1893, at 11.30 in the forenoon.
Present: Mr. E. J. ACKROYD, Chairman.
Mr. J. THURBURN,
Mr. S. G. BIRD.
Mr. F. J. BADELEY, Secretary.
Mr. Hilgrove C. Nicolle, Government Auditor, called.
The Chairman.-What is your name?
Witness.-Hilgrove C. Nicolle.
Q-When were you appointed local auditor?
A.--I was appointed from January 22wl, and I arrived in Hongkong on April 14th, 1890.
Q-When did you begin examining the Treasurer's accounts and books? A.--Very soon after I came here. A few days after arriving I went to the Treasury and started my examination.
Q. What books and papers did you require for your examination? Take, for instance, the Crown Rents.
A.-The books I required were counterfoil receipt books, the daily receipt book kept by Mr. Alves, the Rent Roll and this cash book and journal and ledger (all produced) and I traced the items into the cash book and ledger to see that the amounts were duly paid into the Government.
Q.-There is a ledger kept for the Crown Rent?
A.-There is a separate place in the ledger for Crown Rent.
Q.--And what totals are entered in that?
A.-The monthly totals.
Q.-What system did you follow in checking and examining this Rent Roll?
A.--I took the counterfoils and I checked them with what is known as Alves' daily receipt book. I checked the daily totals from that book into the cash book and I checked a certain number, a considerable number, of the counterfoils with this Rent Roll. I also checked the Rent Roll sent up by the Land Office with the Treasury Rent Roll.
Mr. Thurburn.--You did not go through the counterfoils ?
A.-No, not all.
The Chairman-Not every counterfoil ?
A.No, not with the Rent Roll.
Mr. Bird.-If you had checked the counterfoils you would have found all this out before?
A.---Well, we have been through the counterfoils in the Office and, as far as I know, there are only two cases in July where there is a difference and there is one case in February last, and these are the only specific cases where we should have found it out if we had checked the counterfoils with this book.
( 19 )
Q. How do you think the defalcations have occurred then?
A.-I think Alves received money and issued a receipt of his own.
-And there were no counterfoils?
A.-No.
Mr. Thurburn. Some of the receipts undoubtedly were forgeries, but we understood that the greater number of the frauds were committed by altering the counterfoils in the book.
A.We only found, I think, four specific cases altogether of the counterfoils differing from this book. There is one on September 23rd, one on December 31st. There are really four different frauds and these are the only cases we could find.
Mr. Thurburn.--And what do they amount to?
A.--About $2,000 I should say.
Q-The whole deficiency is about-- ?
A.-$59,000.
The Chairman. Then how do you account for the balance?
A.-By false receipts, and there is also another method under which it might be possible, and it is this. In former years, up to the middle of 1891, the counterfoils used to be filled up in advance and I think that in those days he made them agree with this hook, and it has struck me that he may have filled in the number and ticked it off as though I myself had done it. Now the counterfoils are all issued in numerical order and have been for some time,
Q-How has he managed then to make away with this amount; you say that he made out different receipts altogether and never brought the amount into account.
A.--I cannot tell you how he has done it except in specific cases we have found, but, of course, they do not cover anything like the amount.
Mr. Thorburn. The fact that he has destroyed the books, I suppose, prevents you?
A.-Yes.
The Chairman.--You say A.-All that he loft.
Q.--What years are they?
A.-1891 and 1892.
that you
have been through the books?
Q.-Going through all the books for 1891 and 1892 you have only found the instances you have given?
A.-That is all.
Q-And they amounted to about $2,000?
A.-About that.
Q. What is the amount of the defalcations for 1891 and 1892?
A.-The amount roughly was $11,940 in 1891 and $7,336 for 1892.
Mr. Thurburu.--Then there was about $40,000 taken previous to those years? A. Yes.
Q. How did you find those figures out-by balancing?
We
A.-The Rent Rolls for 1888 and 1889 are not to be found; they have disappeared. Therefore the only thing one has to go by is the Rent Roll from the Land Office. have the book balanced for 1887 and I have taken the arrears not paid and the amounts paid to the Treasury during 1888 and 1889. That ought to give you a balance. For the other years I have taken calculations by Alves giving the amounts he says were collected and on the other side I have taken what has been paid to the Treasury.
676
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