CO129-606-2 Treasury control over Hong Kong finances 22-1-1948 - 9-12-1948 — Page 55

Estimat

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involved, whether these take the form of subsidies for specific purposes

or of assistance under the Colonial Development and welfare Act.

will thus not in themselves require the Secretary of State's approval, but

both time annual estimates and supplementary estimates should be sent to the

Colonial Office for information at as carly a date as possible. The writing-

off of losses, etc., will not require the approval of the Secretary of State

and the other requirements of formal reference to the Secretary of State in

financial matters laid down in the Colonial Regulations will be dispensed with.

In order to carry these measures for devolution in financial matters into

effect, the Colonial Regulations will require substantial revision and I propose

to take early stops to set up a committee to advise me on the changes required.

Furthermore the major change involved in this relaxation of formal control

necessitates a thorough review of the local machinery of budgetary authorisa-

tion and control, which the Conference of African Govumers considered should

be conducted in consultation between Colonial Governments and the Colonial Office.

The local machinery of control outside the Executive is centered in the

Standing Finance Conmattees of the Legislative Councils, which in fact exercise

5.

Audit should

a strict supervision over the financial operations of Governments.

continue to be operated ar at present under the Director General of Colonial

Audit, the auditors' report being submitted to the Government concerned anā

presented to the Legislative Council. In the new conditions it may well be

desiruole to set up Public Accounts Committees at an carly stage, in order to

diffc.cntiate between the functions of authorisation and of review, but in the

meantime the auditors' report should be examined by the Standing Finance

Committee of the legislative Council.

6. As already stated, the Secretary of State will continue to have the

function of advising the King on the assent to the Appropriation and Supple-

mentary Appropriacion. Ordinances, In addition, where there is an unofficial

majority in the L gislative Council the Governor will be in a position in the

last resori vo exercisc Lis rescrve powers under the constitution. These

powers should, however, be regarded as constitutional safeguards only to be

used in extreme ca cumstances.

By the means described in this and the proceding

paragraph the responsibility of the executive to the Legislative Council on

financial