CO129-568-7 Report to Director of Colonial Audit- 1937- queries and correspondence 24-10-1938 - 13-7-1939 — Page 32

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immediately by the Public Works Department, and that that Department should have assumed complete responsibility for their custody and the accounting for of receipts from sales.

52. Further the arrangement which permitted the Resident Engineer, to dispose of the plant, which was of considerable value, on a commission basis, and without requiring any Gov- ernment department to exercise supervision and control over the matter is, in the opinion of Audit, open to objection. It is also contrary to the usual Government method of disposal of surplus stores. It must also be noted that after the "scheme had been completed the Resident Engineer could in no sense be considered a Government official.

53. The apparent failure to issue in the first instance any special instructions regarding the method of accounting for moneys received from sales was unfortunate. That definite ac-

counting instructions were necessary, and close supervision was desirable, became evident after certain accounting irregularities regarding the disposal of proceeds of the sales of plant had been accidently disclosed during an audit of the Imprest Account.

54. The first move in the taking over of the plant by Government was apparently made in January of the present year, when Audit was informed that it would be transferred to the Public Works Department, but that the Resident Engineer would retain first cull on it for remedial work which it had been found necessary to undertake at the Pineapple Pass Dam. It was also stated that he would continue to have the right to sell plant on commission provided that no sales at less than catalogue prices were effected without Govermanent approval.

55. At a later date however Government for various reasons considered advisable to defer its transfer to the Public Works Departament.

56. A question regarding the apparent non-payanent of hire charges for a derrick forming part of the Shing Mun plant, which it appears was loaned some time ago by the Resident Engineer to a private company, has not yet been explained to the satisfaction of Audit.

57.

1.-STATEMENT OF ASSETS AND LIABILITIES.

The excess of Assets over liabilities at the

31st December, 1937 was

As compared with at the end of the

previous year

.$ 14,002,278.11

12,917,132.29

Showing an increase of

.$ 1,085,145.82

58. Assets.

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Cash $1,547,810.91.-This sun was composed of Bank balances totalling $1,519,8J4.35 and cash balances held by the undermentioned departaments :—

Accountant-General

Medical

Supreme Court

Official Receiver

59. Verification of Cash Balances etc.

$27,462.79

400.25)

.51 53.01

(a) Bank Certificates have been produced in support of the balances of the various Bank Accounts, but 110 Cash Certi- ficates other than those rendered by the Heads of the depart- ments concerned have been seen for the Cash Balances held in the offices of the last three departinents mentioned in the previous paragraph. The reason for this is that Boards had not been appointed to survey the cash of these departments at the cose of the year.

(b) In the case of the Accountant-General's departament the Members of the Board appointed to survey the balances omitted to record, on the certificate rendered, the amount of cash found, although they reported it correct.

60. The existence of the Cash Balances and Sinking Fund Investiments etc. held by the Crown Agents has been verified with the certified statement received from the Comptroller and Auditor-General.

61. Fixed Deposits.

The receipts obtained from the Banks for amounts appearing under this head have been examined by Audit.

62. Advances Miscellaneous. ($220,148.51).

This shows an increase of $145,703.05 over the 1936 figures, the difference being more than accounted for, by the sum of $154,450.24 which is shown as outstanding under the heading "Shanghai Refugee Committee. ' There is however a sun of $14,117.37, being recoveries from Refugees, which appears in the Colony's accounts as a "Deposit" and therefore may be set off against the above advance account. The net suin advanced on behalf of Shanghai Refugees is recoverable from the Imperial Government.

63. It has been verified that no advances have been out- standing for an unduly long period. A detailed statement of advances is attached. (Enclosure E.)

64. Advances-Pending Re-imbursement from a proposed new loan. ($56,783.30).

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