CO129-607-3 Revenue Reward Fund 11-11-1948 - 12-12-1948 — Page 30

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fully investigated.

With the exception of the expenditure in respect of claims arising from the war, which was referred to the Secretary of State in the Governor's Telegram No. 589 dated 1st April, 1947, it is not known whether the authority of the Secretary of State was obtained for each of these 45 Suspense Accounts: Detailed comment on these Suspense accounts will have to await completion of the examination of all Suspense accounts which is at present being undertaken by this Department.

:

84.. The position regarding the reconciliation of balances of Suspense accounts with departmental records is the same as that set out in paragraph 80 of this report.

FUNDS.

85. Currency Funds. The balances of the 1941 Security Funds, referred to in Footnote (3) to the Statement of Assets and Liabilities at the 31st of March, 1947, (Appendix 1 of the Financial Report) are

as follows:

(a) Note Security Fund $8,992,092.57 - in respect of notes

issued by Goverment.

(6)

Subsidiary Note Security Fund $2,413,438.65 - in respect of 10 cent., 5 cent and 1 cent notes issued by Government. (c) Overprinted Note Security Fund $400,000 in respect of $1

notes issued by Government overprinted on Bank of China notes. According to footnote (3) to the Statement of Assots and Liabilities, the above Funds, covering the Government Notes in issue on the surrender of the Colony, were appropriated by the Japanese, and these funds were restored in the accounts for 1946/47 as a charge against the General Revenue Balance to the extent of approximately 70% of the full amounts recorded as being in circulation at the end of 1941. The Acting Accountant General has explained, since, that the only records of the amounts in circulation at the end of 1941 are a Balance Sheet drawn up after the fall of the Colony at 25th December, 1941, and statements received from the Hong Kong & Shanghai Bank in June, 1947. From the latter statements it is observed, however, that the whole, and not 70%, of the balance in the Current Account at the Bank for the Overprinted Note Security Fund, i.c. $400,000, was credited to this Fund Account in the 1946/47 Accounts.

86: It is not clear under what authority approximately 70% of the 1941 balances of those Funds were brought into the accounts for 1946/47; nor is it clear whether authority exists for not appropriating cash or investments against part or the whole of these Funds. The position with regard to these Funds has been referred to the Secretary of State in the Governor's despatch No. 93 of 29. 4. 48 and the matter will be kept in view.

87. On the general question of the method of accounting for currency and currency funds, the attention of Government was drawn by this Department to the Draft Currency Regulations forwarded as an enclosure to the Secretary of State's Circular Despatch of the 16th of December, 1936, and the view was expressed that, in the absence of other arrange- ments having been approved by the Secretary of State, the accounts for the Colony's currency should be kept separate from the general accounts of the Colony. The Acting Accountant General agreed with this view and expressed his intention of removing the Currency Funds from the general accounts of the Colony. It seems, however, that action on the matter will be deferred until the recommendations made to the

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