1941-03-12 — Page 5

Page

Library Su

Court

HONGKONG DAILY: PRESS

ACCOUNTANT-GENERAL GIVES EVIDENCE

Continued from Page 1

The Chief Justice Sir Atholl Mac- Gregor presided, the other members of the Commission being Mr. C. Bernard Brown, Mr. D. Drummond, Mr. H. K. Woo, with Mr. K. M. A.. Barnett as Secretary.

TERMS OF REFERENCE

Mr. Barnett read the proclame- tion appointing the Commissioners, which included their terms of re- ference as follows:--

To enquire into and report, on The manner in which the Immi gration Department has been ad- ministered since its inception:

cruited;

The adequacy or otherwise of the financial system instituted in it;

The agency system instituted by it;

the Treasury, payment may be made from an imprest ac- count granted to the Head of Department. Such pay- ments are made on the per- sonat responsibility of the Imprest holder and are sub- ject to review later by the Treasury.

.GENERAL

COMING AND GOING BY

CHINA CLIPPER

Twenty-five passengers disembarked from Pan-Americün Airways CHINA CLIPPER which arrived in Hongkong yesterday from Manila bringing U.S. mails" dated San Francisco March 4,

The Clipper was in charge of Captain P. Adam. passengers were from Manila.

FROM MANILA:" Mr. Felix M.

American

3.

Twenty-one

DEPARTURES

The following passengers were booked Clipper this morning..

to leave by the Chioa

Ellis, of Messrs. Ellis and Edgar, Manila, on ↑ business trip to Hongkong; Mr. Joseph E. Joseph of Hongkong returning alter a short

FOR SAN FRANCISCO; Mr.. Her- business trip to Manila Mr. John K. Bousfeld, executive of A.P.C., bert S. Lang of the Chinese In- returning after short business dustrial Co-operatives en route to trip: Mr. J. A. Duff, executive of New York on business. Mr. Harry International Under- Pope. businessman of Rangoon writers, on business: Mr. Harold making a round trip to San Fran- Case, of the Everest Steamship cisco on business. Co.. Manila, un a business trip to FOR HONOLULU: Mr. Carl K. Messrs. L. R. Nielson & Co., Man!- the Tato Iron and Steel Ltd, of Hongkong: Mr. L. R. Nielson, of Clark, an engineer connected with

13, on a bistness trip to Hong-Calcutta, en route to San Fran. kong: Messrs. John Männers Co., return-

Mr. H. W. Hagedorn. of cisco on home leave.

ng after a visit to Manila; Mr. Donald Paterson, of Messrs. Boyles Bros. Drilling Co.. Manila, on a business trip; Messrs. Lao For, So

ALLOWED FREE HAND In these, Colonial Regulations no attempt is made to prescribe forms or procedure or to lay down pre- cise "forms of receipts for money and the accounting officers of cach The manner in which its staff administration are given a free has been assembled and the sult- hand to institute such records ability of those appointed or re- they think it within the frame work of these Regulations. It 13. perhaps, hardly necessary to point out that these Regulations merely

engineer connected with the Stan- FOR MANILA: Mr. Joseph Cariz, give effect to elementary principles

dard-Vacuum 0 Co., returning to well known to all accountants, the

Honolulu after a short stay in The treatment accuratu to, Colonial Treasury occupying a pol-

Hongkong: Mr. C. Johnson, chemist. the facilities afforded to, the pub-tion in Government corresponding Wal, Llong Yew. Chan Fook Koon, of the Coca Cola Export Corp... lic (whether as individuals or into that of the Accounts Depart-Un Fuen Fu, Pao Ka, Lam Fok, completing a return trip by Clip- stitutions) with which the department in a business firm.

Leung Yee and Mrs. Leung, per 011 business; Major Grose, ment and its personnel have been Towards the end of October- Leung Chong. S. King Tai Quan. officer in the British Army on that a to say, more than two and Chee Ah Haol, Chinese mer-short leave; Mr. L. Nielson, of To receive oral and written evi- months after the report of Mr. chants on a business trip to Hong-Messrs. L. R. Nielson & Co., Mani- dence upon the foregoing matters. Middlebrook-the question of ac-kong; Mr. Reignson Chen, a pro- la, returning to Manila after an To ascertain and report, on whe-counts for the proposed new de-minent banker of Hongkong and overnight stay in Hongkong; Mr. ther there has been any avoidable partment was raised verbally and Manila, on business trip; Mr. S. King Tai Quan, Chinese mer- lack of efficiency, judgment or tact on Oct. 31. suggestions were made. Aw Hoe, newspaper manager of chant of Manila, returning after In relation to the matters compris copy of which is to be found at Hongkong. returning after a bualan overnight stay in Hongkong: ed in the first paragraph.

(1) in Treasury file No. 33/26/20, ness trip to Manila.

Messrs. Chiao Woo, Yu Khe Jin, and a form of departmental cash

FROM SAN FRANCISCO: Mr. Miss Sophia Hwang Yu, and Shlu book devised. This cash book was Sipser, a San Francisco business-Kui, Chinese Clipper commuters. not adopted. I discovered later, nor was any other form of general de-Paramount newsreel photographer

on an assignment.

The CALIFORNIA CLIPPER, Giving evidence, Mr. E. W. Pud.partmental cash book instituted. It

FROM HONOLULU: Mr. R. Kop- bringing U.S. malls dated San ney said:-

¡ts signifcant, too, that sithough it

returning after a business trip to to arrive in Hongkong on Satur- pleman, Hongkong businessman, Francisco, March 15, is scheduled United States, accompanied by Mr. day March 22, and will leave the

following morning.

brought into contact.

To make such relevant recom- mendations as may commend them

selves to the Commissioners.

THE EVIDENCE

Hongkong Government.

Fan,

and Mr. Arthur Menken,

Chao Chi.

ů

NEXT CLIPPER

I am Accountant General of the was admitted that deposits would

have to be refunded froin impres The proper control of immigra- cash the Immigration Officer-ac- tion into the Colony is dependent on cepted as probably adequate an the issue to approved persons, and imprest of $1,000 sufficient to re- approved persons only. of the ne-fund, say, 20 deposits per day. cessary permit. It is therefore es- Eventually it was found when the there seemed to be no reason why! It did not surprise me, therefore, Bnd several forged notes sential to see that permits do not department commenced to operate, everything should not run smooth-to fall into unauthorised hands. This that an imprest of no less than ly

amongst the cash brought to the The Immigration Officer was Treasury from the Immigration can only be done by a proper sys-$40,000 was necessary. In October, tem of records, controlling the re-in fact, it was not even thought allocated the services of Mr. A. J. Department, including one of $100. ceipt of blank forms, their issue that the number of deposits anti-G. Taylor, an officer of the S. C. It was impossible to discover who for completion, and their final cipated instified the printing of a& A. 9. with accounting experience, was responsible for the presence of handing over to the approved ap-special form of deposit receipt. jas an Assistant Immigration the forgeries, one of which was plicant in return for the prescrib-

obvious. Officer, but he chose to send him particularly

since the ed Ice. This is quite simple;

jas officer-in-charge' at Taipo serial number was printed in deep accounting but it is essential to the mend. to the Immigration Officer for the supervision of the accounts

It was my intention to recom- rather than to utilise his services blue. proper functioning of immigration.

At the same time the shroffs of permits which control.

would 'in their early stages.

complained of the conditions under themselves constitute the form of

But never once during all these which they had to work. In view effort was made to consult ine, as receipt for the fee paid. Without preliminary discussions did the of those facts I deputed Mr. LA. chief Accounting Officer to the consulting me, however, or, as for Immigration Officer give me any Barton, Treasury Caahler, to in- Government, when the organisations I am aware, the Auditor. the indication of the many thousands spect and report on the Immigra- of the immigration office was had printed some thousands of per-nor the hundreds and maybe thou- of view. His report is at 61 in Immigration Officer devised and of applications he would receive, tion Office from a Revenue point proposals in the report of Mr. Mid. mit forms, bound to books of 200 sands of deposits he would have Treasury file No. 33/26/20. dicbrook, dated Aug. 21. ever refer- each, which from my point of view to take each day. And things be At the same time, Mr. A. J. C. red to me either for comment ar were open to almost every possible gan to go wrong from the outset.

In spite of this, however, no

under discussion. Nor were the

for my information. It was not until the morning of Saturday March 8, 1941, that I so much as: saw a copy of that report and its proposals for the organisation of 'the Department. Such brief peru- sal as I have been able to maxе in the vast few days reveals that the question of the organisation o these fundamentally essential re-, cords is not so much as mentioned In the report. In fact reference which might in any way be con-1 strued as being directed towards accounts is on pp. 30 and 31 where it is stated that "The Head Office

will be responsible for.... (7) Fin ancial arrangements of the De- partment."

STOLZOJ

WAS NOT CONSULTED

objection, including:--

(a) No mention of the

charged.

(C)

Bound and numbered back-

Taylor, Treasury. Accountant, reported to me as in 63 the same Treasury Ale. Owing to the pressure of work in 100 Treasury due to the high rate of expenditure arising out of the war it was not possible to epare a Treasury Officer as he suggests, but on my advice in was eventually agreed to bring Mr. A. J. G. Taylor back from Talpo to endeavour to restore order in the chaos.

The department accepted fees fee from applicants at the time of p- plication for a permit without the (b) No reference to the date of issue of a receipt and such suris issue (from which the cur- were not brought to account in any rency of the permit ran). ¡way, At one time the Immigra-

tion Officer informed me that. wards, according to Euro-his safe was full of money to an unknown amount belonging to un- (d) So devised that the pasting known persons and that various of the applicant's photograph drawers in the office were similarly on the counterfoil would ¡full. Amounts were paid into have caused the binding to Treasury, without adequate sup- burst long before the Duo porting. details as to what they these reports I reported to Govern- was completed.

¡represented.

ment in the terms of 31 in C.3.0.

pean standards.

In view of the revelations in

Shortly after this occurred an

Eventually, on Treasury advice, I recall in particular an amount file No. 2887/41. The comments of these forms were scrapped and the of just over $20,000 paid in by the the Hon. the Financial Secretary present system of serially number Immigration Officer for the credit to the Hon. the Colonial Secretary, led booklets hurriedly substituted. of deposit accounts although he together with the latter's remarks

About the same time a system of was admittedly BASIC PRINCIPLES

unable to state are on page 9 of that.C.S.O, file. records. was devised by me and from whom it had been received Colonial Regulations framed by accepted.

SUPPLIES RUN OUT by the Immigration and consequently, to whom. It the Secretary of State for the officer, showing both quantities should be repaid. Colonies and incorporated in the and serial numbers o General Orders of the Hongkong passing to and fro in the depart- different individuals. Civil Service lay down certain basic ment, to be kept by officers en- principles regarding colonial fl-trusted with:- ances and accounts. These prin- ciples are suficiently wide to allow of departmental details being made to conform to departmental organisation provided that adequate safeguards against Irregularities are provided. The principles lald:] down in these Colonial Regulations are briefly.:--

It must have event which I think should be permits represented nearly one thousand brought to the notice of the Com- mission. At 4 p.m. on the after-

(a)

A official receipt must be

Issued in respect of all

monies received.

(b) All monies received must be

promptly brought to account in a Cash Brus

of Chinese New Year--the

Detalls of the serial numbers of noon of Sunday, January 26 that Deposit receipts issued and brought is to say on the afternoon of the (a) The custody of blank per- Ito account from time to time in eve

mits:

the Treasury disclosed gaps which Immigration Officer rang me up to (b) The receipt of blank Der-were explained by the Immigra- say that his supplies of deposit

mita for completion and tion Officer as representing receipts receipt books had run out,

Could their completion.

1ssued in respect of security other I let him have some more at once?

4

(c) The receipt of completea than Hongkong dollars. No detail--And this, although he was well permits for signature and led statement has, however, been aware that Treasury does not keep their signature.

furnished in respect of receipta so a reserve stock of special depart (d) The custody of completed issued and I have little hope of mental receipt forms, All the

permits.

ever getting such a statement. I printing works were shut and (e) The Leeue of permits against am quite unable to accept foreign would remain sbut for several the receipt of the prescrib-currencies or to acquiesce in their days. What could he do? I had ed fees

Jacceptance by other departments. no alternative but to agree to his This system was designed to pre. There was even a suggestion at one preparing a limited quantity on a vent permits going astray, either time of accepting deposits in kind duplicating machine, allocating a (c) All monies received must be by accident or design, and to assist No attempt was made to open a special series letter to this issue. paid over in full to the C-in ensuring that all fees were duly Deposit Ledger and the only at-personally initialling each one and collected and brought to account, tempt at keeping a departmental notifying me and the Auditor of (d) Payments on behalf of the and was simply in the extreme, cash book was so amateurish as the quantity thus prepared.

Department must be made being morely a series of debit and to be quite useless. by the Treasury, after the credit books which could be kept Accountant General has by any intelligent person. As will satisfied himself that the be seen later, this system was only amount is in order and duly partially carried out authorised by warrant under the hand of His Excellency

lonial Treasury.

||

$100 FORGED NOTE Early in January it came to my notice that a number of unsecured ladies were handling monies and

Al-

barc

though I have asked for it not yet been informed as to how many were prepared, whilst those which "I have seen bear, not the initials of the Immigration Offeer but a "chop" which, I am inform-

ACCOUNTING EXPERIENCE that the monies they received were ea is his Chinese name, the Governor.

Deposit receipt forms, especially placed with those of shroffs sup- On February 3 I personally in- (e) It is provided, however, that designed for immigration purposes, plied to the department after spected the Immigration once. where the circumstances are were then prepared by mutual Treasury training so that it was The state of affairs which I found such that immediate pay agreement between myself and the impossible to verify or control the is best described in my minute to ment is necessary without Immigration Officer and with the cash received by any particular the Hon the Financial Secretary allowing prior reference to Cash Books already recommended |dividual.

·Cont'd Page 8, Gol. 2

WEDNESDAY, MARCH 12, 1941.-PAGE 5

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