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consequently took no precautions; but we consider that Mr. Wood should at once have terminated a system under which a Class III clerk was given the unsupervised disburse- ment of large sums of money.
109. Mr. Ralphs, after the experience which he gained in 1916, should have rea- lized the danger of entrusting such considerable financial duties to a clerk; and we con- sider that it was his clear duty to direct Mr. Wood's attention to this danger. He failed to do so.
110. Mr. Ralphs appears, from his own statement, to have realized the necessity for examination of vouchers for personal emoluments after signature by the payees, and to have appreciated the fact that it was his duty to ensure that any unpaid sums were re- funded to the Treasury. He states that when he was acting as Director the vouchers would be submitted to and scrutinized by him.
In the absence of any explanation we would therefore regard him as responsible for the loss of $643.00 due to the failure to refund twenty-five items in the months of July and August in the years 1925 and 1926 when he was acting as Director.
111. We do not regard as satisfactory the reasons given by Mr. Ralphs for his failure to investigate in 1924 the causes of the over-expenditure of the vote for subsidies which led to his submission of a special warrant for $3,255.00. This amount was misappro- priated by Chan Tsz Un.
112. (a) We are not satisfied that the initials purporting to be those of Mr. Ralphs which appear on the two fictitious vouchers for $2,670.00 each in March and June, 1923, are forgeries.
If Mr. Ralph's statement that Mr. Irving always required him to scrutinize and ini- tial vouchers and to initial cheques is correct, it is difficult to see how the requisite funds were obtained without his having initialled the vouchers.
It is clear that any such initialling must have been done without close scrutiny of the vouchers.
In the case of the payments of subsidies in March, 1923, the cheque drawn in favour of Mr. Forrest for $6,825.00 to enable the cash payments to be made is signed by Mr. Ralphs himself. Presumably he must have seen all the vouchers for the quarter in order that he might return the amounts for which he should sign cheques and as the total amount for which cheques were signed included the amount of the bogus voucher we can only conclude that he saw this last mentioned document.
(b) With further reference to the responsibility undertaken by an officer who ap- pends his initials to vouchers or accounts which are thereafter to be submitted to his superior officer, we have indicated in paragraph 57 how Mr. de Martin, after a mechani- cal check of the Fee Book against the paying-in slips or the Treasury receipts and of the Collector's Accounts against the Fee Book, had initialled the Collector's Accounts without enquiry as to the precise nature of the refunds shown on those accounts, and we have pointed out that enquiry would have disclosed the withholding of moneys which should have been refunded.
We regard the initials of the subordinate as certifying to the accuracy of every detail on the document initialled, and consider that the initialling officer must be regarded as accepting the responsibility not only for ensuring the mathematical accuracy of the docu- ment, but also for making such checks and enquiries as will ensure that all items appearing on the document rightly so appear and that they are in due order. It is essential that the utmost care should be exercised as the superior officer presumably appends his signa- ture on the faith of the initials of his subordinate.
Mr. de Martin appears to have laboured under a misapprehension as to the nature of the duty which devolved on him as the initialling officer.
113. It appears to us that the failure to make the necessary refunds should have been noticed in the Treasury.
The duty of scrutinizing vouchers on return to the Treasury fell upon Mr. Tsang On Wing, the Cash Book Clerk, but we find that this officer had received no instructions as to the course to be adopted by him when sums were noted as due to be refunded.
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