CO129-607-3 Revenue Reward Fund 11-11-1948 - 12-12-1948 — Page 42

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store accounting in the Colony for the period under review has not been satisfactory. This applies more particularly to the Government Stores Department and the Land Transport Department, which have not yet entirely extricated themselves from the chaos and confusion which arose during the period of the British Military Administration. this connection, no lists have been seen of the stores purchased through the Hong Kong London Office and charged under Head 14, "Expenses in connection with re-occupation", Subhead 1 in the accounts of Hong Kong for the thirteen months ended the 30th April, 1946, to which reference was made in paragraph 12 of the report of the Director of Colonial Audit for that period. Information is being sought regarding these stores from the Colonial Secretary.

141. Central Unallocated Stores. It was found necessary to call the attention of Government to the very serious situation that had arisen in connection with the main Unallocated Stores of the Colony. The reasons leading up to this state of affairs have been reported to the Director General of Colonial Audit. A special Board of Survey was appointed in July, 1947, to ascertain the quantity and value of stores on hand at the 1st April, 1947, and approval has been given, by the Financial Secretary, for the Board's figures to be taken on charge as the opening Store Ledger Balances at the 1st April, 1947. It has boon pointed out by this Department that the above procedure vill require the approval of the Secretary of State. At the time of writing this report, the Board of Survey had not completed the investigations and no reconciliation between the stocks and ledger balances and the financial balance appearing in the Treasury books at the 31st March, 1947, has been seen (Reference paragraph 134 of this report). In fairness to those responsible it may be said that the Stores Department has encountered innumerable difficulties in restoring order out of chaos and at the same time continuing its normal functions.

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142. Local Handling Charges. Owing to the manner in which stores arriving in the Colony were discharged from ships, and to the lack of proper organization and staff during the earlier days of the reoccupation, it has been impossible, in a large number of instances, to identify the handling charges with the various items of goods received. In order to clear these expenses from the Unallocated Stores account it was decided to transfer them to an expenditure head and, with this end in view, the Controller of Stores has stated that a supplementary vote of $170,000 has been requested. The matter is being kept in view.

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143. Supplies, Trade & Industry Department. In the course of an audit examination of the store accounts kept by the Supplies, Trade & Industry Department after the 31st March, 1947, it appeared that a considerable quantity of canned goods which had deteriorated, had been destroyed by dumping in the sea on the authority of the Director of the department. The matter was reported to Goverment by this Department and it was pointed out that the goods had not been condemned by a Board of Survey and the approval of the Governor for the destruction had not been cbtained. The matter was reported to the Secretary of State who approved, in his Savingram No.502 of the 28th May, 1948, of the stated value of the goods ($249,000) being written off but stated that the Colonial Regulation No.346 must be held to apply even where stores have been acquired in connection with a Government operated commercial under- taking of an emergency nature.

144. Receipting of Issue Vouchers. Attention was drawn to the receipting of Issue vouchers for stores issued to other Departments by the Stores Department, by persons other than the responsible officers,