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Q.--- You did not sign receipts for taxes or Crown Rent?
A.---No, not as far as I remember.
Q.---What did your duties as Treasurer chiefly consist in?
A.---I should say in keeping the work up to the mark as much as possible, seeing that the different collections were made in time, and so on, and in correspondence and in Executive and Legislative work.
Mr. Thurburn.---Making out the estimates?
A.---As a member of the Legislative Council, attending meetings and so on.
The Chairman.---You cannot tell us that you insisted that the book of 1888 should be balanced?
A.---I cannot, I should think probably I did not.
Q.---Why?
A.---I think I should recollect if I did.
Mr. Bird.---As far as we can make out, the system of balancing was the chief check you had. If it had been insisted upon there could have been no fraud. You understand the system?
A.---Yes. What I always felt was the want of a daily audit. One had to trust and rely upon these visits of the Auditor and what I felt was that every day, from day to day, there ought to be a continuous audit going on.
Mr. Thurburn.---That duty would have been in the Treasurer's own department?
A.---Yes, but there was no officer to do it. I say there ought to be an officer.
Q.---You had not sufficient clerks?
A.---They were all busy with their own work.
Q.---In fact it was impossible?
A.---Unless there was a special man.
The Chairman.---That being so, did not you consider that it was very important that the only check which the Auditor had, namely, the balancing of the book, should have been attended to?
A.---I certainly see now after the event that it should be done, but it did not strike me at the time. So much so indeed that I am unable to say whether it was done or not.
Mr. Thurburn.---Did you know that Alves was in the habit of receiving money?
A.---It never came specially to my notice.
The Chairman.---What do you mean by specially?
A.---It was never brought to any notice.
Q.---The system seems to have been to institute a check on the shroff, but there was no check on Alves?
A.---Yes.
Q.---Except by balancing the book at the end of the year, and that was not done?
A.---Yes.
Q.---So there was absolutely no check upon him?
A.---No.
Mr. Thurburn.---We were told that Mr. Lister altered the system---that formerly Alves made out the receipts and that they were all signed by Mr. Carvalho,---and it was owing to Alves not only keeping the register of crown rents, making out receipts and signing himself that the defalcations arose. If the system had not been altered and Mr. Carvalho had still signed the receipts don't you think that would have been a certain check?
A.---To a certain extent it would have been, but I am of opinion that there is no real check except the balancing and a continuous audit.
Mr. Bird.---But if the receipts and money went through two officers it would be difficult to commit a fraud?
A.---I don't attach much importance to that. That is all very well when you start, but as the men get into grooves they become careless, and I don't think the check is an effective one.
Q.---But it makes fraud more difficult?
A.---Yes, but the two were in different offices. That alone I consider as objectionable.
Q.---Mr. Carvalho tells us that if that system had been continued he thinks that it would have prevented these defalcations because he said that he would never have signed anything unless it had the shroff's chop upon it and the shroff would not have allowed any false chop to pass.
A.---It may be so, but I doubt it much. Is it perfectly certain that notwithstanding the balancing of the books nothing took place before these books were examined? Might I ask when the 1887 book was balanced?
The Chairman.---It was balanced in April, 1889.
A.---That would be in time.
The Chairman.---1887 is all right.
Mr. Bird.---1888 has disappeared.
Witness.---Has no reference been made to previous books?
The Chairman.---No.
Witness.---To see whether they are balanced?
The Chairman.---No.
Witness.---I should like to make enquiry at the Treasury about them.
Mr. Thurburn.---They say it was always about 18 months after the close of the year before the book was balanced.
Witness.---Then I think the balance is no effective check.
The Chairman.---If the balance was made immediately it would show a deficit.
Witness.---Was it ever made immediately?
The Chairman.---No.
Witness.---It seems an extraordinarily long time and if such has been the case always I should say the balancing is not the check that it ought to be. My own opinion is that there should be a continuous audit.
The Chairman.---You will find with regard to the Rent Roll that a continuous audit would not have prevented defalcations such as these.
Witness.---I am not confining myself to the Rent Roll. I mean a continuous auditing of the Treasury work. There are rates and taxes, &c., all of which, in my opinion, ought to be checked continuously. It is not possible for the head of the Department to do it, or any other officer as far as I know.
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Q.--- You did not sigu receipts for taxes or Crown Rent?
A.-No, not as far as I remember.
Q-What did your duties as Treasurer chiefly consist in?
A.--I should say in keeping the work up to the mark as much as possible, seeing that the different collections were made in time, and so on, and in correspondence and in Executive and Legislative work.
Mr. Thurburn.-Making out the estimates?
A.--As a member of the Legislative Council, attending meetings and so on.
The Chairman.--You cannot tell us that you insisted that the book of 1888 should be balanced?
A.--I cannot, I should think probably I did not.
Q.--Why?
A-I think I should recollect if I did.
Mr. Bird.--As far as we can make out, the system of balancing was the chief check you had. If it had been insisted upon there could have been no fraud, You understand the system?
A. Yes. What I always felt was the want of a daily andit. One had to trust and rely upon these visits of the Auditor and what I felt was that every day, from day to day, there ought to be a continuous andit going on.
Mr. Thurburn.
That duty would have been in the Treasurer's own department?
A. Yes, but there was no officer to do it. I say there ought to be an officer.
Q.-You had not sufficient clerks?
A.They were all busy with their own work.
Q-In fact it was impossible?
A.-Unless there was a special man.
The Chairman.----That being so, did not you consider that it was very important that the only check which the Auditor had, namely, the balancing of the book, should have been attended to?
A-I certainly see now after the event that it should be done, but it did not strike me at the time. So much so indeed that I am unable to say whether it was done or not.
Mr. Thurburn.----Did you know that Alves was in the habit of receiving money?
A.-It never came specially to my notice.
The Chairman.What do you mean by specially?
A.--It was never brought to any notice.
Q.-
-The system seems to have been to institute a check on the shroff, but there was
no check on Alves?
A.---Yes.
Q-Except by balancing the book at the end of the year, and that was not done?
A. Yes.
Q.--So there was absolutely no check upon him? A.--No.
Mr. Thurburn. We were told that Mr. Lister altered the system-that formerly Alves made out the receipts and that they were all signed by Mr. Carvalho,-and it was owing to Alves not only keeping the register of crown rents, making out receipts and
signing himself that the defalcations arose. If the system had not been altered and Mr. Carvalho had still signed the receipts don't you think that would have been a certain check?
A.--To a certain it would have been, but I am of opinion that there is no real check except the balancing and a continuous audit.
Mr. Bird.--But if the receipts and money went through two officers it would be difficult to commit a fraud?
A.-I don't attach much importance to that. That is all very well when you start, but as the men get into grooves they become careless, and I don't think the check is an effective one.
able.
Q. But it makes fraud more difficult?
A. Yes, but the two were in different offices. That alone I consider as objection-
Q.-Mr. Carvalho tells us that if that system had been continued he thinks that it would have prevented these defalcations because he said that he would never have signed anything unless it had the shroff's chop upon it and the shroff would not have allowed any false chop to pass.
inay
very
A.-It be so, but I doubt it much. Is it perfectly certain that notwith- standing the balancing of the books nothing took place before these books were examined? Might I ask when the 1887 book was balanced?
The Chairman.-It was balanced in April, 1889.
A. That would be in time.
my
The Chairman.---1887 is all right.
Mr. Bird.--1888 has disappeared.
Witness. Has no reference been made to previous books?
The Chairman.-No.
Witness.--To see whether they are balanced?
The Chairman.--No.
Witness.--I should like to make enquiry at the Treasury about them.
very long time for the 1887 book not to be balanced until 1889.
It seems a
Mr. Thurburn.--They say it was always about 18 months after the close of the year before the book was balanced.
Witness.-Then I think the balance is no effective check.
The Chairman.--If the balance was made immediately it would show a deficit. Witness.--Was it ever made immediately?
The Chairman.~No.
Witness. -It seems an extraordinarily long time and if such has been the case always
I should say the balancing is not the check that it ought to be. My own opinion is that there should be a continuous audit.
The Chairman.----You will find with regard to the Rent Roll that a continuous audit would not have prevented defalcations such as these.
Witness.-I am not confining myself to the Rent Roll.
I mean a continuous anditing
of the Treasury work. There are rates and taxes, &c., all of which, in my opinion, ought to be checked continuously. It is not possible for the head of the Department to do it, or any other officer as far as I know.
690
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