CO129-467 - Governor Sir Stubbs & Acting Governor Claud Severn - 1921 [1-5] — Page 177

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We will state our views under these six heads seriatim.

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THE PRESENT FINANCIAL SITUATION.

We find that at the end of the present financial year on the 31st August, 1920, there will be a deficit for the year on Working Account of about £145,000, including about 845,000 of a non-recurrent character mainly in respect of an honorarium and other payments which have been made to the late Vice-Chancellor and former members of the staff; we find that

this deficit together with the previously accrued deficit on

the same account will amount to about $225,000; and we find

that the deficit is due to the Council having, especially

during the financial year between the 1st September, 1918, and

the 31st August last, embarked on a policy of expansion and

increased expenditure greatly in excess of the means of the

University. We also find that at the end of the present

financial year there will be an overdraft at the bank of about

8500,000 on Working and Capital Accounts combined.

We find that, in committing the University to

these expansions, the Council, which under the University

Ordinance 1911, is entrusted with "the government and control

of finances", did not obtain and had not before it the neces-

sary information concerning the financial position, which indeed

it appears to have disregarded. And in particular, although

by the Ordinance its authority to "borrow and owe" money is

limited to a total of $100,000, except with the sanction of a

resolution passed at one meeting and confirmed at a subsequent meeting called for the purpose, we find that the Council has in

fact largely exceeded this total without obtaining any such

sanation.

In 1915 Mr. Loke Yow, who has since died, lent the

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