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Committee that these advances were necessary because Sister Leung had incurred additional expenditure on construction of the School which was not covered by the building grant from the Government, for example, contract variations and other additional items such as the installation of a lift and garbage disposal chutes, change of flooring material and so on. At any rate, notwithstanding the fact that the Precious Blood Congregation had always operated on the basis of trust among the Sisterhood and the general lack of financial and management expertise, the Committee finds it difficult to accept that the Congregation was totally unaware of the methods used by Sister Leung for the repayment of those advances.
17.
Prior to April 1977 the routine audit examinations conducted by both the Education Department and the School's accountant did not detect any particular irregularity in the accounts of the School. Even the Education Department's audit exercise subsequent to the disclosure of mismanagement could not ascertain the complete picture of misappropriation because of incomplete records to account in detail for every diversion of funds. In fact the Audit team was able to identify only those funds which had originated from Grant- in-Aid. (This was possibly the reason the Police had to take more than half a year to complete its investigation.) As requested in our Interim Report the Director of Education has made public the findings of his department's inspection of the School's accounts. It will be noted that the Education Department eventually deemed all trading operations at the School to have been conducted by the School rather than by the sponsoring body, the Precious Blood Congregation. This demonstrates that a distinction between a school and its sponsoring body in such circumstances is a fine one indeed.
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