s.

The character of the financial administration must have been erroneously
represented to Her Majesty's Government if it was simply stated that
defalcations to an amount of L18,590 had taken place. It would _ex
facie_ appear from such a statement that the above defalcations had
taken place during the past year; as a matter of fact, the Inspection
Department, which has only recently been called into existence, reported
over financial matters covering the years 1884 to 1896.

It is unfair to characterise all deficiencies as defalcations, for from
the nature of the case a deficiency does not always constitute a
defalcation. The report specified the sub-divisions of monies which had
yet to be accounted for. The first item in such deficiencies amounted
originally to L12,000, and of this L6,000 was afterwards collected, and
the balance was only brought forward; another item of _L10,808 11s._ was
brought forward in its entirety, but L3,000 of this was eventually
collected and accounted for, while continual efforts were made to secure
the balance. Many items not brought forward were collected long before
and accounted for, while during the inspection of last year it was found
that a sum of L800 yet remained to be paid in out of the deficiencies,
which balance has been accounted for.

The contention that advances to officials amounting to _L2,398,506 16s.
8d._ have remained unaccounted for is also absolutely incorrect; and the
endeavour to pass this circumstance off as constituting defalcations on
the part of officials bears ample witness to the strong desire to
mislead which has actuated the informants of Her Majesty's Government.

Any person who is even superficially acquainted with financial
administration will readily admit that this is due to a system of
accounting which was followed until recently by Her Majesty's
Government, and which obtains in some British Colonies, in Natal, for
instance, at the present moment.

This system may deserve condemnation; it does not, however, necessarily
follow that because the advances may not be speedily accounted for they
have been embezzled, and it does not appear either from the report of
the Inspector of Offices, or from the debates of the Volksraad, that
such accusations were made. But in addition to this a sum of at least
L1,968,306 is included in the aforesaid total of L2,398,506 16s. 8d.
(but which is not comprised in the customary advances), such as Orphan
Chamber L80,000,