CO129-607-1 Enquiry into loss of public money 22-5-1948 - 26-10-1948 — Page 17

2

The committee recommended that:

(a) The Accountant General should examine the accounting system

of the District Office.

Enclosures 2 to 4

Enclosure 5

W

The account books of the department should be checked and initialled at least once a week by the District Officer.

The officer in charge of accounts should be given clear written instructions.

(b)

The account books of the Department should be checked from time to time by the Treasury.

(c)

(a)

(e)

(f)

(g)

(h)

(i)

A shroff receiving money from another shroff should each time render a formal receipt.

Only one key held by the District Officer, should be kept for the safe in which cash is held.

Payments should be made daily by the head office into the bank.

The accounts of the department should be placed in charge of an Executive Grade officer.

The department should have its own bank account in Kowloon.

3. The report was sent to the District Officer, New Territories, the Accountant General, and the Director of Audit for comment and their observations are recorded at enclosures 2 to 4. A further report from the Accountant General amending slightly the original figure of the loss incurred is attached as enclousre 5.

4.

I am of the opinion that none of the officers concerned should be called upon to accept personal and pecuniary responsibility for the loss of these public funds and that the sum of $34,366.29 should be written off. I consider the loss was fundamentally due not to any lack of inspection or attention to detail but to a sleight of hand trick performed with three cheques which normal checking and care would not have prevented. I am satisfied on the evidence produced that the cheques were presented by the shroff in such a way that the face of the cheque for $20,040.24 was covered up by one for $84, and the officer endorsing was thus given to believe that all the cheques were for insignificant sums.

He

5. The District Officer New Territories has administered his area under difficult conditions since the reoccupation of the Colony. has been faced with a shortage of efficient and experienced staff, destruction of records and the problems of communism and political crises resulting from large-scale resumption of land and rumours concerning such resumption. In the face of these difficulties he has tackled his problems with energy and determination and his achieve- ments would probably not have been possible with a slavish observation of the letter of many financial and procedural regulations. I consider however that both Mr. J. Barrow and Mr. J.T. Wakefield should be reprimanded for the state of the accounts revealed in the committee's report.

6. The forfeiture of the $1,000 security of CHUNG Tse Chuen has been ordered. He is still at large.

I have the honour to be,

Sir,

Your most obedient, humble servant,

28 SEP 1948

.Y.

5 Enclosures.

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Ма

OFFICER ADMINISTERING THE GOVERNMENT.