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5.
the existing arrangements should be discontinued and that a separate audit department should be created for this Colony. I do not advise that the staff should be recruited from the Cadet service, owing not only to the unlikelihood of finding in that service men qualified for this work and willing to undertake it but also to the difficulties involved in regard to acting appointments, since the Auditor must either be debarred from such appointments, which would be a source of dissatisfaction to him, or he must be allowed to hold them, in which case the unsatisfactory position of an officer's auditing his own accounts is sure to arise sooner or later.
I advise, therefore, that an Auditor and an Assistant Auditor be appointed from outside the service and I suggest for the Auditor a salary of £900 rising to £1,000 by £25 annually and for the Assistant £620 rising to £800 by £20 annually. It might be advantageous that one or both of these officers should be a Chartered Accountant as suggested by the Salaries Commission, but I do not attach importance to the point, especially as I should suppose that good profes- sional men would be able to command much higher salaries than I suggest in England,
After careful consideration I recommend that
6.
So far as I can see at present two officers should be able to do all that is required if the department is relieved of the audit of the Weihaiwei and Postal Agencies accounts. There ought, it is true, to be two audit officers constantly here and, therefore, when either the Auditor or the Assistant is on leave some special arrangement will be neces- sary. I propose to meet the situation when it arises by appointing an officer of the Cadet service to act as Assistant Auditor and I foresee an appreciable indirect advantage in such an arrangement.
At present junior officers in the service have little opportunity of acquiring any knowledge of financial
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