CO129-461 - Governor Sir Stubbs - 1920 [5-7] — Page 235

which date the Colony had no separate Auditor (the Colonial Secretary being responsible for the duty of

in which audit) and the decision to make a change

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under which a the Government of Hong Kong concurred separate Auditor was appointed and the audit of the accounts was placed under the direction of the Comptroller and Auditor General was communicated to the Exchequer and Audit Department by the Secretary of State in January 1890.

In 1893 the question of the continuance of this arrangement was raised, and, in reply to the Governor's despatch on the subject the Secretary of State informed him (despatch to Governor No: 70 dated the 21st April 1893) that he had duly considered the arguments put forward but that he was of opinion that no sufficient reason had been advanced for altering the system.

In 1909 (despatch to the Governor No: 157 of the 9th June 1909) the question was again raised and a local committee which was appointed by the Governor tu consider the matter reported that, in their opinion,

"the members of the Audit Department should continue to "be appointed by and remain under the control of the "Comptroller and Auditor general". The Governor ex- pressed himself as being in entire accord with this opinion and further observed that "the advantage which "the Colony receives from having its audit under the "general supervision of so high an authority, as well "as from the independence and continuity which the

"system affords, can hardly be gainsaid."

And now, without submitting any argument in support of it, and notwithstanding that in a recent despatch (Confidential, dated the 11th December 1919)

the present Governor had stated that he saw no reason for departing from the present system, the question is

again raised.

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I think that I need hardly repeat what has already been written in favour of the existing system, the efficiency of which does not appear to be questioned, which has stood the test of experience in many other Colonies, and I will therefore confine myself to the observations con- tained in this despatch.

I am unable to admit that the cost of the present arrangement involves the Government in unnecessary expense. Taking the figures contained

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in the Estimates of the current year, the cost of audit in Hong Kong is $37,585 while in the Straits Settlements where the audit is not conducted by this Department - the cost, (excluding the cust of "external audit" which might reasonably be added) is $61,017, an increase of approximately

+

62 per cent. But comparing the aggregate of the reveme and expenditure of the two Colonies the cost of the audit in the Straits Settlements should be only about 19 per cent in excess of that

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in Hong Kong and the inference therefore is that the cost of the audit in the latter Colony is very moderate in comparison with the cost of the similar service in the former.

It must I think be admitted that an efficient audit is a necessity from the point of view both

of the Colony and of the Secretary of State and that, therefore, any system which does not ensure that the Auditor and his principal Assistants are fully trained in the technical duties which they are required to undertake, and are moreover carefully directed and supervised, is open to criticism. It

is

I