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99. Mr. Messer lays great emphasis on the responsibilities of the heads of depart- ments and of the Audit Department, and appears to look to them to ensure accuracy and to pick up inaccuracies respectively and to consider that no blame can attach to the Trea- surer if they fail to do this.
100. For instance, in the case of the frauds in the Education Department in connec- tion with personal emoluments, the vouchers were returned to the Treasury unsigned by the payees in respect of certain items, and bearing in lieu of signature the word "re- funded" written in red ink.
Mr. Messer did not consider that the appearance of this word put him on his en- quiry, but that, as the Director had signed the certificate at the foot of the paylist, this constituted a receipt for the money and was a sufficient discharge for the Treasurer (the certificate is not so worded); and the whole duty of ensuring that a refund was made fell on the Director. Accordingly no enquiry was made within the Treasury as to whether the money had been refunded. He expresses the view that it is a most difficult thing to check refunds, and that the Auditor should do it.
Undoubtedly audit should have disclosed the fact that the refunds had not been made, but we are unable to perceive the difficulty of checking them in the Treasury itself and do not consider that the failure of officers of the Audit Department to deal with these Refunds in any way absolve the Treasury from the duty of examining returned vouchers, and seeing that amounts shown on them as refunded were duly brought to account.
Part IV.
THE RESPONSIBILITY FOR LOSSES, DEFALCATIONS AND FINANCIAL IRREGULARITIES.
101. There are certain broad principles to which regard must be had in determining the responsibility of officers for the recent losses, defalcations and financial irregularities.
The effective conduct of the administrative and financial operations of any large Government department must necessarily entail some delegation of authority and the repos- ing of some degree of trust in the subordinate members of the staff. Such delegation must not, however, be accompanied by a complete relaxation of vigilance or supervision over the member of the staff to whom the authority is delegated.
102. It is expressly laid down by Colonial Regulation 220 that no officer will be re- lieved from any portion of his responsibility should he depute to his subordinates the performance of duties which he should have performed himself.
It therefore behoves an officer to give serious consideration to the question of what duties he may properly delegate, and he must ensure that the delegation is not contrary to the dictates of common sense or to the spirit of the regulations framed for his guidance.
He must, moreover, consider whether the officer to whom the duties are delegated possesses the qualifications requisite for the performance of those duties and whether his status in the service is such that the duties may with propriety be delegated to him.
Finally, it appears to us that it is in the highest degree essential that delegation should be accompanied by explicit instructions as to the duties to be performed and the manner of their performance. The delegating officer should assure himself that his deputy fully comprehends the nature of his duties and that he is performing them in a satisfactory
manner.
103. It is clear that the lack of proper precautions in safeguarding cheque books con- tributed materially to facilitating the perpetration of the cheque frauds; and the Colonial Treasurer cannot be absolved from responsibility for the existence of a faulty system of dealing with most important documents.
We consider also, that the Accountant (Mr. Black) as the person responsible for the supervision of the Expenditure Branch of the Treasury, should, even in the absence of instructions to that effect, have taken steps to ensure the proper custody of the cheque books and that he is therefore also responsible for the lack of precautions.
104. We regard the loss by the misappropriation of Water Accounts as attributable to a system the defects of which we have pointed out in the First part of this Report.
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