Sessional_Paper_1889 — Page 311

309

(3.)

(Enclosure in 2.)

Report on the Secretary of State's Circular Despatch of the 18th September, 1888, regarding the present arrangements for the Audit of the Accounts of the Colony.

The Imperial Audit of Hongkong Accounts was discontinued in 1870.

2. In 1869, Governor Sir RICHARD MACDONNELL forwarded to the Secretary of State a representation from the Auditor General of the Colony (Mr. RENNIE), who pointed out that, since the passing of the Exchequer and Audit Department Act, 1866, it became a question whether it was any longer necesssary for Colonies defraying their own expenditure to send all their vouchers to England. He added that, in addition to other patent advantages, there would be a great saving of stationery, printing, and clerical work, if the then existing practice were discon- tinued.

3. The Secretary of State (Earl GRANVILLE) replied that the question had been under consideration in England, and requested a report as to the additional pre- cautions which should be taken to secure the efficiency of the local Audit "about to be relieved from Imperial supervision."

4. This was followed by a Despatch from the Earl of KIMBERLEY, intimating to the Governor the final determination of Her Majesty's Government to discon- tinue the Imperial Audit of Hongkong Accounts, and desiring the local Audit Officers to be guided in their duties by the Treasury Instructions of 1859. request was, at the same time, made for a report on the character and efficiency of the precautions taken to ensure that the local Audit should be conducted "promptly, honestly, and searchingly, and without any interference on the part of the Executive."

5. A report was forwarded as requested, the Auditor General (Mr. GARDINER AUSTIN) stating that "it was impossible to have a closer investigation of the accounts, from initiation through all stages to completion." A minute detail was given of the examination to which all vouchers were subjected, and of the checks which were adopted to secure accuracy.

6. With reference to the Secretary of State's Circular Despatch of the 18th September last, calling attention to the arrangements at present in force for the Audit of the Accounts of the Colony, and proposing that the Comptroller and Auditor General in England should be invited to undertake the whole work of audit, upon repayment of the actual cost, I am of opinion that the proposal would not be without its advantages, and that, as its adoption appears at present to be intended only as an experiment, there could be little objection to its trial. At the same time, I think there are manifest advantages in retaining the local audit, and my reasons are these. In the first place, greater promptitude in checking over- charges is possible, than if all the accounts were forwarded to England, and action delayed until replies had been received. Moreover the additional labour thrown upon local Departments by having to nish in duplicate all vouchers, contracts, tenders, powers of Attorney, letters of authority for appointments and increases of pay, &c., would involve a considerable increase of clerical labour; and I doubt whether the Public Works, Police, Medical, and Treasury Departments could do their work without an additional copying clerk each. The bulk of the monthly vouchers is at present very great; and, if it had to be doubled, it would be formidable.

7. I note, too, that the proposal does not embrace the audit of Revenue, the inspections of checks against loss and embezzlement, and of stores accounts. This points at once to the impossibility of reducing the local Audit Staff, and thereby saving expense.

8. I do not think that, under any circumstances, the present Audit Staff could be reduced. It consists of only four clerks: one for general supervision, registra- tion, and surprise audits; one for examining vouchers and keeping the Ledger;