XN000022-1978-07-14 — Page 4

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FRIDAY, JULY 14, 1978

10. THE SCHOOL'S ACCOUNTS FOR THE PERIOD TO 31 MARCH 1974, AND THE YEARS TO 31 MARCH 1975 AND 31 MARCH 1976, WERE AUDITED BY A FIRM OF CERTIFIED PUBLIC ACCOUNTANTS. THERE WAS NO QUALIFICATION ON ANY OF THESE AUDIT CERTIFICATES. THE AUDITED ACCOUNTS FOR THE YEARS TO 31 MARCH 1977 AND 31 MARCH 1978 HAVE NOT YET BEEN RECEIVED BY THE EDUCATION DEPARTMENT.

GOVERNMENT GRANT ACCOUNT

11.

LEDGER ACCOUNTS OF GRANT TRANSACTIONS WERE MAINTAINED IN THE REQUIRED FORM (SEE PARAGRAPH 3 ABOVE) BUT THE FOLLOWING ERRORS OR OMISSIONS WERE DISCOVERED:

(A)

INCOME FROM HIRE OF SCHOOL PREMISES NOT CREDITED TO CAPITATION GRANT ACCOUNT

(B) AMOUNT INCORRECTLY CHARGED TO JANITOR STAFF GRANT ACCOUNT (SEE PARAGRAPH 20 BELOW)

(c)

AMOUNT INCORRECTLY CHARGED TO ADMINISTRATION GRANT ACCOUNT

TOTAL AMOUNT DUE TO GOVERNMENT GRANT ACCOUNTS

OTHER SCHOOL FUNDS

12.

$ 3,062.12

63,980.00

18,210.00

$85,252.12

LEDGER ACCOUNTS OF TONG FAI RECEIPTS AND DISBURSEMENTS THEREFROM WERE MAINTAINED IN THE REQUIRED FORM (SEE PARAGRAPH 3 ABOVE).

13. DURING EARLIER INSPECTIONS OF THE SCHOOL'S ACCOUNTS BY EDUCATION DEPARTMENT STAFF ON 4 DECEMBER 1974 AND 25 JUNE 1976, THE SCHOOL AUTHORITIES WERE ASKED, INTER ALIA, THE FOLLOWING TWO QUESTIONS ON EACH OCCASION:

(A) DID THE SCHOOL OPERATE SALES OF EXERCISE BOOKS, TEXTBOOKS

OR SCHOOL UNIFORMS?

(B) DID THE SCHOOL OPERATE A TUCKSHOP?

ON EACH OCCASION THE THEN PRINCIPAL AND SUPERVISOR, SISTER LEUNG, ALLEGED THAT EXERCISE BOOKS AND BADGES WERE SOLD BY THE SPONSORS AND NOT THE SCHOOL. SHE ALSO ALLEGED THAT THE TUCKSHOP WAS SIMILARLY OPERATED BY THE SPONSORS AND NOT THE SCHOOL, AND THAT ALL ELECTRICITY WAS SEPARATELY METERED AND PAID.

/14. IN CONNECTION