wmmrwso Publi Continued from Page 1. l I 99911 kept. but were destroyed from entitled "Th9 Olhldl‘ way-Act." Th, nmountwwhich was slloted to prlncd Edward Island by the Domin- ion Government under this Act, ap- p,“ to have been fully. taken up, Th, city of. Charlottetown and the To" of Bummereide having then been allowed to participate in the p1“, m order to ensure the expan- diture of the full Federal allotment within the Province. ruaponsibility for hmdry Cash Receipts m his evidence, Mr. L. B. McMil- lan, Deputy Minister of Public Works assumes full responsibility for cash‘ receipts relative to refunds, returned cement bags, materials sold, etc, and @1115 is borne out by the statements (y! the other witnesses examined. Mr. McMillan also admits responsibility for the lack of records in respect to Highway improvement cash receipts “,4 disbursements, which has result- ed in ens present general confusion m nunnectlfm therewith. No cash 3To___”“ ro-rmsrJcEEFrFc-Trliic-Tr" Market reports fumlshed by Green- shields a 0o. Montreal, to stews-rt Jane, g 00., 99 Greet George Bl-ffiti- Charlottetown. MONTREAL Abltlbl ..... 421 ‘erta Pacific Grain inn! stoe ... ... ... ... .... 2% Bramble ... 40% n aim I3. C. Power ... . ... 45W Building Products . .--- 37 (fnnada Car . -- 3553 Canada Cement ... 181i Canada Power and Paper .... 19% (lanada Brewng . . 6% Dominion Brldgn . 73’. Foreign Power Securities . 33 Fmser Company .....‘ 15% General Steel Wares . 14 Home Oil . . . . . . . .. ... 850 ImpcrlaIOLl .. . 29% Industrial Alcohol 8 International Nickel .. 42% International Pctrlocum 22 Ilassey Harris 37 lifonirealPcvwer 150 McColl Frontenac 26% National Breweries 82's National Steel Car ... ... 70 CEJX-lflfl. Bro-tic: ... 54 Oarlada Melting 11H Dominlon Tar 2'.) Farrlnus Players . 50% Norancla. .. .. 39H Power Corporation .. . ... ‘av. Price Bros.‘ ...-‘...- ... 83 Quebec Power Z 6‘! Sliawllugan I... ... 78',‘ mrclterc ‘ 2n n rel of Canada ‘... 4s»; si-cl of Canada’ Pidt. as lI,i'ilOll5._. .. {i7 Winnipeg Electric _ ,4: NEVWIOILK American Can 152 1 American Radiator 38’- Alleghany 32‘. Atlacmda ... ... ... ..... 75% llrndix Avlzilon ... 5i iwnsoliclatcdffras . 129% I‘-()l1lilll0l‘l Stores ..... 25% ll' "fictional Harvest . ... 103')‘; lljicrnational Hydro Elec. ... . 43% l-irlmcoott Copper ... 05'“- lilrctrlc Power and Light ..... 92hr llwntgoniery Ward ... ... 40% Nagara l-ludson Power .. 2114‘ Pry-amount Players ... ... 73 lrzilck do Ford... ... ... 48% Facr ti: Co. B. ... ... 29's Fido .. . . . . . . .. 57'; rlanelard Oil oi’ New Jersey .. 79 Fferling securities A 185s Yellnlv Truck ... ... 27 f‘ P. R. 212 Utrirrsl Motors ..‘. ' 511.5 L. sstccl ... 1947b BANKS rank of Nova Scotia . ... V927 Bank of Montreal ... 300 395 Jlsmla “Jingle lays! Mullins llll rolls and unealiaiea». i We bale the lnaetfead faeyoa- n l 5°“! V" "M. nor record of empty! blsl returned. materials sold, m. Temporary melnoranda relatiagto these matters-were alleged to have tlmefotime. it ia said as what Mr. Mdllilllh Chill hll "lllbflity" for the corresponding funds was disposed of. In any event it appears that nn pgf- manentrecords of such transactions were made, or at least.- none were brought to light during the present enquiry. ‘There was consequently lit- tie that could be audited, in the sense in which the term fa generally und- crstood; all that‘ could be done in respect to theseyarious transactions was‘ toiry to piece them together from such sources of information as were available-a. rather unsatisfac- tory and possibly not _ very reliable proceeding. . Books of Account and General Method‘ of Handling Expenditure i and Receipts Expenditure relating to Highway Improvement Account began in June 1,920. with the commencement of op- erations by the Department of Pub- lic Works; and lie/order that the ex- penditure in‘ respect thereto, subject to “Federal-Aid? might be clearly distinguishable from the Depart- ment's ordinsryactlvities by the Do- minion Government Auditors. a eel): arste Bank Account was opened at the Bank of Montreal. Evidently the intention was that all payments should be made by means ofwheques, which were to be. charged or entered in s special jour- nsl ledger kept for the purpose in _thc Public Works Department. It would likewise seem to follow that if the records were to be kept clearly and accurately all credits or receipts pp- pllcable to Highway Improvement Account should have been similarly reflected in the same ledger, or at therefore, and the corresponding funds deposited intact in the Bank. It is} matter ofrecord that dur- ing the first year or so this method of dealing with expenditures and re- celpts appears to have been consist- ently adhered to. In fact there seems to have been no variation in this re- least in e. special revenue account - slwct at any time. 1n so far as what filly be described as regular or rou- "119 "Ilenditures or receipts were concerned. ‘rliat ls-to say, Qlpggdit. urec relative to the ordinary opera- tions of Highway Improvement Ac- count were pald by cheque, and re- eeipte on account of "Federal Aid," sales of debentures, Treasury cheques, etc., were all deposited intact. ~.- -- w...‘ ._. i Itlseems to have nctvinfrequently hI-Pllened, nevertheless, that cheques received by the Public Works Department‘ for miscellaneous items. such as payments for empty cement sacks, materials sold, refunds, etc, were not deposited by Mr. McMillan, who apparently received and was re- sponsible for all such funds. In some cases cheques of this nature, payable M! the Department, were cashed by Mr- McMillan and portions of the Proceeds retained by him, as he now states, for the purpose of making certain payments, which, it is alleg- ed, it was considered inadvisable to pass through the records in the usual way. In other instances, notably cer- tain cheques received from Canada Cement 00.. Ltd, in 1929 and 1929, cash was obtained therefore from the Bnk for the full amount of eseh cheque and retained by Mr.‘ McMil- lan; one such cheque. amounting to $485.90 not having been accounted for until considerably more than a year had elapsed afteriit had been cashed. Apparently there were charg- es to be ‘met for cleaning and prepar- ing bags for shipment, and it is stat- ectthat it was for this purpose that the practice of so retaining such funds‘ first - originated, although it would appear that some, at least, of these funds were later on applied to otherdepartmental uses, viz: bonus- es paid to Miss Hogan and Mrs. Gal- lant. Funds Received and not Accounied for within Reasonable Period ‘these various cheques received from time to time from Canada Ce- ment Co., Ltd., are referred to in de- tail in the evidence taken under The Audlt Act by the Provincial Auditor. but for convenience I shall summar- ize them as follows, giving particulars of the manner in which each was Date of Cheque Amount l. 2.’ March - m: March ‘sin. 192s . . . . . S V~l _ , s June 14th. I929 March lstf 1024 ‘January'l9th.' ms _ February 14th. i925 . April, 12th. 1920.. Novf27th, mo t . February 10th. 1929 .. ‘ e 12. February 10th. 1929 . 13. February 1st, 1929 . 6 - Regarding cheque number 12 in the foregoing list, ‘ questions relative thereto and Mr. McMillan! replies will be found in copy of the evidence, principally on pages ‘I. l2 and l4. It will also be noted that cheque numbered l3 in the foregoing list was held by Mr. McMillan from early in Ftbflllfyflli", until-he cashed it on May 6. The Bank of Montreal then called attention to it, as the Highway Improvement Account had been clos- ed since iiebruary, 1929, and the Bank was apparently in doubt astoMr. Mc- Mcldlllan’: right to endcreeon behalf of the Government. Enquiries fol- lowed, with thrresult that Mr. Me- Mlllan ‘refunded $827.14, represent- ing some four cheques thathe had ‘previously received but had not sc- counted for, as fellows: Canada‘ Cement Oe- L“- chequedalted‘ ma. to.) 1m 9-11 cheque dated Rb. i9. 192d 468.80 cheque-dated Nb. i. 192i 449-90 Belicia Ina. Ltd». ch09!" ' relating to 192'! 5000"!“ -but. apparently received j..." in m; ma: . _ $1,042.14 noes amen disbursements < gtgted to have been made out-of IWNQQI "3 PW"? cheques but for which no vouchers have been subl- l 218.09 Amount refunded 997.14 .1. will thus be mirtmtneaiou naW Lid" (Q1: $102.22‘ ‘ll also retained by Mr. McMillan: and “mounted for until more thana dealt with: How Dealt with by Mr. McMillan ‘ Dec. 5th, I921 l,'l'l4.00-'Deposited in full Feb. 4, 1992. botmDepoalted April 2i. 1922. assoc-cashed May 26, 1922, and lllll de- posited Nov. $112.07 said to have been paid out for cleaning and shipping bags. 2,5A‘i.00—-Cashed March l7. 1923. and $220.00 deposited, balance said to have been retained to pay sundry expenses of 18. 1922. hipment. lilac-Cached July 12 and $100.00 deposited. Balance said to have bccn retained to pay sundry charges and expenses. Lllllbfl-Dcposlted April 5. 1924. -l3.50-No record. p l,5'l5.20—Cashed March 13, 1925 and 81,093.09 deposited. Balance said to have been _ retained to meet sundry expenses. IAIZBO-Included in deposit of’ May 2s. 19:6. ‘ 2,646.20-—-$2,5’70.00 deposited Dec. .‘i, 1920, _the bslance~$76.20 having been retained, it is said, to pay certain charges in his shipment of bags. oil-Cached March 3. 1929. and account- d for in refund of $827.14 made in May 1929. canto-cashed March a, ma. and accounted _ for in refund made in May, 1999. 448.00—cashed May 6, 1929 and accounted for in refund made in May 1929. cheques above noted were so retain- ed will be found in the evidence, which, briefly, is to the effect that he considered the Bank Account in- correct and was awaiting an oppor- tunity of having it. checked. Ha disclaims any intention of hav- lng planned to retain thteso funds permanently, stating positively under oath that he would have accounted for them in any event. It is likewise claimed by Mr. Mc- Millan that unexpended portions of moneys retained by him out of the foregoing cheques were later deposit- ed in the Bank, which may possibly account for some of the unexplained deposits, to which reference will lat- er be' made. In addition ib the amounts receiv- edjrcm the "Canada Cement 00-. Ltd, further cheques and cash ply- menta appear to have been received by Mr. McMillan in respect to H1811- way Improvement Account from oth- - aourcea-some whlchwem deposited intact and in‘ other ina retain- se. u he states. to reple. the wh fund. which-it ll Allard it w m- sidered necessary to ‘maintain in the. office, from which to make sundry disbursements from time to time. Whether or not all such receipts are fully accounted for in the statement referredtowit-ia impossible to say. ithasbeencheokadascarefullyaa pang“, butcwlng to unfortunate 4mg of departmental 890"” W11- gagging all ‘these items. oomph}! Wr- iiloation at this time cannot be made. »/ am unla- ulna at in ~ ‘rheliiam of uteri credited initha nlblio Accounts ‘of 19f as "refund your rue eloondreld 5"‘ ‘m’ guutowhy this andthedfllf. i‘ , . - . c! Accountptransactlons. He also states Balanceorl time. and a full explanation in re- spect thereto will be found in me not. dmce taken before the Plflvlnglfl Auditor. I i Ullfllllained Deposits and "Glfla" of Money ' Ezrainination of deposit slips, which were secured from the Bank, disclos- ed items thereon the exact origin of which it is not possible at present to EXPIB-lll- Mr. McMillan in his evi- dence states that he was in the nab", of cashing outside cheques from the cash funds which he had retained in his office, in the manner already at. scribed, and that some of the item; on the deposit slips referred- to "n. doubtediy refer to cheques whinn came into his hands in this manner, I" lddlf-lvll. Mr- McMillan also claims w have deposited funds which did not belong to the Government, i.e., funds which had come to hiln as presents from friends and that this latter source or revenue accounts very largely for the apparent surplus receipts in m. 5P9"- W H-ilhwly Improvement Ac- count. It will, of course, be obvious to you that if extraneous funds, such sa the "presents" referred to by Mr. McMll. lan, actually found their way into the Bank or were placed with funds be- 101191113 t0 Highway ‘Improvement Account, and subsequently deposited to the credit thereof, a surplus of min. celilmeous deposits and disbursements ‘over nllscellaneou receipts would au- i-Omii-iflllly be crested. At the same, time there is no guarantee that there , was not additional receipts from sources of which no information has so far been disclosed, which would ac- count partially at least for the sur- plus which now appears to exist. For instance, lf there were additional sales of cement or gravel, of which nothing is at present known, amount- ing to say $1,000.00, such receipts would at once explain and reduce the apparent surplus or unexplained de- posits by a corresponding amount. With reference to the gifts or pre- sents of moneywhich Mr. McMillan refers to in his evidence, it will be noted he states they were confined entirely to Highway Improvement that he turned these monies over to the Government and derived no per- sonal benefit therefrom in any way, .all of which may be as be Iryl. It will be obvious, however, that since Mr. Mcliillian apparently did not de- sire to retain such funds, the better course would have been their non- acoeptance under any circumstances. By the mere fact of his having sc- cepted such gifts, even though the funds were turned over to the Gov- ernment, Mr. McMillan would appear to have placed himself in a rather compromising position, in so far as the donors were concerned. The lat- ter could not be expectedlto know what disposition Mr. lifcMillan war making of these cash presents and consequently were likely to assume that he was under obligation to them. No Records Kept of Miscellaneous Revenue and Expenditures As already pointed out and in ac- cordance with statements of witnes- ses examined, practically no records were kept by Mr. McMillan in re- spect to refunds relative to Highway Improvement Account, sales of empty cement sacks, materials, etc, all of which he admits in his evidence. There was no cash book in which tlle receipts of these funds was record- ed, and depositsand cash payments were likewise not. entered, so that there are no departmental records or accounts/which can be examined with a view to ascertaining the ac- curacy of‘ the receipts and disburse- ment contained in Mr. McMillan! statement. It may be that this state- ment is accurate,- but. it is not pos- sible to verify it at the present time. It is indeed strange that no record was kept of funds which pan into so large s. total within a comparatively few years. True, it is alleged, such funds were looked upon as "extraor- dinary" revenue, which for purposes of the subsidy payable under the "Canada Highway Act," it was con- sldered advisable to deal with spec- ially, but. apart from whatever may be said regarding the motive, it is clear that the receipts and payments in question should have been careful- ly recorded and promptly accounted for. As it is, public funds were re- ceived and paid out, concerning which there is no record in the Public Ac- counts. Apparent Surplus Funds With regard to the reality of the surplus indicated, there appears to be little doubt of its existence at the present time. In his evidence Mr. McMillan has ldnlittedthe possibil- ity of errors having crept into the de- partmental ledger. butonly a detailed cheek of the entire llpenditure from ill) until the account .waa oloaed would reveal suoh "mistakes, provided any were made. ‘rhea-i are approxi- lvbeare to relate to the dlfferencelwork of making a re-check of these found in the Bank account at that’ records and duplicating each entry ‘witlrthe Bank statements would fee. quire s great deal of time and in- volve considerable expense. This can he done, nevertheless. 11' it. is desired.‘ Meanwhile a. surplus apparently ex- ists, strange as it may seem. That itis not a satisfactory state of affairs ls obvious, as it opens up too many avenues for speculation as to its sc- tual origin and purpose. On the oth- er hand. it may be exactly as Mr. McMillan claims, however unusual his explanation may appear. ' In any event, there apparently is no shortage of funds in so far as re- celpts which came info Mr. McMil- lan‘s hands during the period under review can at present be traced. lie admits quite frankly that he was careless ‘and that he retained. Gov- ernment funds" in his possession long- er' than he should have, but states under oath that there are no monies belonging to the Government for which he has not accounted. Cash Disbursements The practice of disbursing cash without vouchers is entirely inexcus- able. Indeed it was highly improper to have paid out cash under any cir- cumstances. All the payments which Mr. McMillan claims to have made should unquestionably have been dis- bursed by cheque in the regular man- ner. That funds were being so paid, out, however, appears to have been known to Mr. Shaw and Mrs. Gallant, and according to Mr. McMillan, by the several Ministers who were suc- cessively in charge of the ‘Depart- ment during the period in question. These cash payments however, are said not to have been known to the Provincial Auditor, the present Pro- vincial ‘Treasurer or the Deputy Treasurer. Ballent Features To the writer the most salient features in respect to this whole mat- ter. so far as Mr. McMillan is con- cerned, appear to be-ss follows: <1) ‘Phat’ he failed to keep proper records of public monies entrusted to an care, with the resultant chaotic condition of these funds: r2) That he cashed Government cheques, instead of depositing all re- ceipts intact; i9) The rather irregular manner in which certain disbursements were made; - <4) The failure ‘of Mr. McMillan to disclose the fact that he had $927.14 of Highway Improvement funds in his possession, when the Bank Ac- count was closed in February, I929. which amount was acknowledged by being refunded after enqurlles relat- ing thereto had been commenced in May lest; and (5) That in his capacity as an of- ficial he has apparently been in the habit“ of. receiving cash presents from unnamed persons or firm from time to time. These would appear to be the most serious phases of Mr. McMil- lion's conduct... There probably are other features open to criticism but the foregoing summarizes what are perhaps the most outstanding. It must be admitted, nevertheless, that Mr. McMillan does not seem to have been solely responsible for all these conditions. I-Ie was primarily responsible, it is true, since the funds were personally handled by him, but a. measure of the responsibility would likewise appear attributable to the several Ministers and officials, who were aware of what was beingdone or whose duties required that they should have had such knowledge. The entire matter requires to be studied in the light of the evidence taken before the Provincial Auditor. tinder “The Audit Act." The forego- ing is largely a summary thereof, and as such, together with copy of the evidence, is submitted for your con- sideration. - Yours very truly, (era) nowALn-s. J. HART Chartered Accountant Charlottetown, Prince Edward Island, June 19th, 1929. Hon. Albert C. Saunders, Premier, and Attorney-General of Prince Edward Island. Dear Bir: Herewith submitted is a supple- mentary report relative to the inves- tigatlon in respect to certain matters concerning Highway Improvement accounts, Department of Public Works. Iliollowing my report dated June 19th last, a further enquiry, in accordance with your request, has been made and a. copy of the addi- tional evidence taken before the Pro- vincial Auditor is =appended hereto for your consideration. , _ The chief matters dealt with in the recent enquiry may be summarised as follows: - ~ (a) Method followed by Mr. McMil- lan in handling departmental cash; .(b) circumstances relative to the of Canada Cement CUI- panyb cheque for $448.00 on May 6th and the clearing of a number oflink of ‘Montreal bills thmllh the Bank of Nova Beetle-on the following day; (d) Amount of funds on hand when t wit!!! IMWJDQI! In‘. ll "l" vouchers, 4n" r If‘. McMillan-exhibited his cash to 'er; and nowhere 1n the Act does it (d) Statements alleged to have been made by Mr. McMillan relative to Canada-cement Company's cheque 101' 0485.90 having been included in the credit item of $950.09 shown in the 1929 Public Accounts; (c) Origin of the practice of dealing with miscellaneous receipts and ex- penditures on highway Improvement Account in the manner described in "Port of June 19th last, and whether or not‘ the various Ministers were aware of what was being done in re- spect thereto; if) Audit of receipts on Highway Improvement Account. and (g) Transactions with D. A. Mc- Donald ln 1925-9. Referring first to fa), it m1] be noted that Mr. McMillan states his Own and miscellaneous Highway 1m- provement account funds were usu- ally kept together in the Public Works Department safe. I-Ie says that when a Government cheque was cashed the funds were placed in this safe and 1f he received personal funds from any source, the cash which they represented would usually go into the same compartment. Dis- bursements on Government account he also states were made therefrom, advances made to employees, cheques cashed, etc., but as stated in my for- mer report, no cash book was kept for the purpose of recording these transactions. ‘ That such an extremely loose me- Nova Scotis, in favour of C. Lyons and Co. amounting to $294.60. This note was paid, it appears, to the ilrst teller, by whom no funds are paid out, and it is at least an in- teresting fact that st the end of the day the first teller st the Bank of Nova Scotla is stated to have had on hand $270.00 in Bank of Montreal bills (F From other enquiries made it sp- Pears that the $270.00 in Bank of Montreal. ._bills, which the first tel- ler at the Bank of Nova, Sootln, had on hand at the end of the day on May 6th, was made up 01,13 twenty. dollar bills and one ten-dollar bill, R11 0f which it is but fair to say may have been merely a coincidence. The fact remains, nevertheless, that Mr. McMiilan apparently did transact business with the Bank of Nova 5co- tia on May 9th, notwithstanding his evidence to the contrary. With reference to (c), you will note that Mr. McMillan claims he had in U" Vicinity of $800.00 on hand when he exhibited his cash to you on or about May 21st last. The writer, of course, has no personal knowledge of this phase of the situation, but has received from the Provincial Auditor -Mr. John Anderson~a copy of a letter which he has written you, in which M.r. Anderson states that Mr. Mcltflllasl informed him on the same day that the funds which he had pre- viously exhlblied to you amounted to thod of handling public funds was. to say the least, highly irregulnr nndi contrary to the clear intention 01' "The Audit Act." is beyond any ques- i tlon, and I cannot too strongly con-i demn the practice followed by Mr. McMillan in this respect. Dealing with lb), i.e., the circum- stances that led him on May 6th to cash the Canada Cement Companys cheque for $448.00, which appears to have been in his custody since early in February. i029. Mr. McMillan stat- es that he can recall no special rea- son for deciding to cash it at the Bank of Montreal on the date named. His replies to questions relative to this cheque. the disposition of the funds, and other matters having a bearing on the subject will be found in detail on pages 4, 5, 6 and 7. 11c claims that as far as he is now able to recall whet occurred on May 6th, he had no particular object in cash- ing this cheque on that date, other than it was not. desirable to retain ii too long. Hero again Mr. McMillankl conduct was directly ln conflict with the ex- press provisions of "The Audit Act" as set forth in Section 21, clauses i1). i2) and (3). clause i3) specifi- cally states that when fundsare re- ceived by any department or officer, the same shall be immediately de- posited with the Provincial Treasur- appear that any official is entitled, by ministerial authority or otherwise. to vary this procedure or retain de- partmental fllnds in his possession. And this is not. the onlyinstance in which the provisions o! "The Aud- it Act.” appear to have been ignored by Mr. McMillan, as see the evidence in respect to Canada. Cement Com- psnys cheque for 9495.80 (the pro- ceeds of which were retained for fif- teen months); the DeBlois Bros], cheque, and other instances. 1t also seems that Mr. McMillan received from the Bank 20 Twenty- dollar Bank of Montreal bills and $49.00 in bills of small denominations, when he cashed the above described cheque; and it is apparently a mat- ter of record that 19 Twenty-dollar Bank of Montreal bills were "clear- ed" through the Bank of Nova Sco- tia the following morning. It is, of course, impossible to say whether or not the 19 Twenty-dollar bills which thus came back to the Bank of Mon- treal were perl, of the lot of 20 re- ceived by Mr. McMillan on the prev- ious day; but in view of other infor- mbtion received the fact is consider- ed of sufficient importance in the interests of all persons concerned to be mentioned in this report, espec- ially since reference is also made thereto in the evidence recently tak- en before the Provinolal Auditor. Mr. McMillan states in his evi- dence that he is unable at present to recall any personal transaction st. the Bank of Nova, Scotia - on May 6th, which would have involved the use of these bills. I-le says he had no large personal bills or notes fall duo at this time that could not have been taken cure of out of his own funds, with which he was fairly well sup- plied on the date named. so far as he can remember, therefore, he claims he had no transactions at the Bank of Nova Scotia, ‘but suggests that possibly he cashed cheques for per- sons, which may have resulted in some of the bills received from the Bank of Montreal in this way reach- ing the Bank of Nova Bcotis. There is a serious conflict, howev- er between Mr. McMillafre evidence to the effect that he had no tran- sactions st the Bmk of Nova Bcotia on May 0th and that of Mr. Murray, Manager of the hank, who was sum- moned by yourself as Attorney-Gen- eral to nlake a statement before the Provincial Auditor. In his evidence about $370.00, and not between $500.- 00 and $600.00. There is therefore s-serious coll- fllct between the sources pi informa- ilon which I have concerning this matter, including your own recollec- tion of the incident, and I cannot do other than draw the matter to your attention. Taking up item (d), Mr. McMillan states in his evidence that he did not intend to try to lead you and others on or about May 21st last, to believe that he had included the Canada Cc- ment Company's cheque for $495.80 in the item of $956.08 credited as "re- fund for empty cement bags" in the 1928 Public Accounts; but here again I find that Mr. McMlilalfs evidence conflicts -witl1 the statement of the nlatier contained in the Provincial Auditor‘: letter to you already refer- rcd to, as well as your own recollec- tions concerning the matter. Ac- cording to Mr. Anderson, Mr. McMil- lan turned up the 1929 Public Ac- counts and pointing out the item of $956.09 stated to you and the Minist- ers who were present that tha $495.90 cheque formed a part of this credit. Doubtless others present at the time will recall the incident. 1n respect to me), or the origin of the practice followed in dealing with cement bags and other miscellaneous Highway Improvement receipts, al- though the matter was the subject of a series of questions, little, if any, further light has been thrown upon the matter. The evidence as to whe- thcr or not thc several Ministers wllo succeeded Mr. Crosby were aware of the irregular mariner in which these receipts continued to be handled is neither conclusive nor satisfactory; but in any case. as l-lar. already been pointed out, all was coll- trary to “Th8 Audit Act," the provis- ions of which none of the several Ministers had authority to vary in any way; and as an official of tlle Government for upwards millan was not aware of these regu- lations. . Referring to (f), or the audit phase Millarrs evidence. ‘“‘ "‘ " . the writer has no data. relative to the tion offered in Mr. Anderson's state- ment on the subject, points out. the obvious impossibility of auditing receipts, in the books, but which in so for as the itcms making up the balance of were concerned, were known only to Mr. McMillan him- self. ln addition to the foregoing, Mr. McMillan was also examined relat- ive to the D. A. McDonald transac- explanstions in respect thereto will be found on pages l1 and 19. Some further light was cast upon the ‘mat.- ter by Mr. McMillan} statement that a car of cement had been sold or transferred to Mr. McDonald by the Department of Public Works in I925, but the manner in which the invoice‘ therefore was settled by Mr. McDon- ald has not been satisfactorily estab- lished. (See lilacs i1 and 19.) 1118i- cement or other material should have been disposed of in this way is by no means a justifiable condition of affairs, particularly in view of the fact that the evidence (see page 19) rather leads one to believe that Mr. McMillan was ‘personally interested in some, at least, of Mr. McDonald's contracts. Hie nplies, when ques- tioned on the subject. at any rate, wercanythlng but satisfactory, and since no definite-record of peyote: covering this‘ car of cement could \ shown by Mr. McMillan, who does not deny "that hewas personally. in- relative to tile matter m. Murray spine Premll on or about any 21st, says that Mr. McMillan on May 0th y“. m” “gent yoga". in reelfty ease of Ueleqerpllll. lvihltthl 1W5 ..=»s~----~---_-_._____- palda personal notq at the nauk of is considered sufficiently important *-——1 when Mr. McMillan was q v! 8144-00 paid w. Mcuonjld for bags, he dld not disclose the fact that the cement had, in t t " place been supplied by him the Department of Public Works; and when again queried on ject by Mr. Lea on June 15th Was likewise reticent conccmlng this phase of the matter, leaving tile im- presslon that he had merely included the lot of 740 bags with a shipment belonging to the Government, as a favour to Mr. McDonald; whereas it now appears Lise bags (containing cement) were originally supplied through the Department of Public Works. That the Department of Pub- llc Works should thus become a brok- erage agency for the convenience of contractors is almost incredible, but added to this is the fact that the re- cords fail to show if or when pay- ment was received for the car of ce- ment in question, and further there is considerable ground for the belief that Mr. McMillan was personally interested in the contract for which this cement was supplied. On page 9 of the evidence it will also be noted that Mr. Mclvflllan ad- mits a shortage of about $125.00 which he says he was obliged to make up from other sources when he was called upon to pay over to the Tress- ury the amount of $897.14 on May 22nd last. 1111s in itself is a most. sig- nificant admission, quite apart from the fact that in view of the express provisions of "The Audit Act" there was no Justification for the retention of any of these funds in Mr. McMil- larrs possession. The evidence of Miss Hogan and Miss Webster, clerks in the F, merit of Public Works, was also’ ' -" en relative to the matter of chick- lng bills, etc. submitted for payifent. (See pages 1a, 14, 15 and 1c.) 5 1i Apparent Surplus l ‘F’? As pointed out in my providing: port no records were kept in respect _. to certain miscellaneous receipts and l disbursements on Highway Improve- f merit account, e0 that there are no: present means of establishingWiif-l" dit the correctness or otherwise of the apparent surplus of $1,417.09, re,- ,. ferred to therein. By employing; cep- ' tain figures relative to receipte,;_vvhioh cement Company's cheques pad’) few other items, were obviously, pre- y pared from memory by Mfr. McMii-p lan, and deducting therefrom , gip- j." bursemenis claimed to have bean vouchers) as well as varioufunex- plalned bank deposits, amounting to some $2,033.28 there is ‘an apparent its-over reported or traceable receipts equal to the sum stated. W‘ p‘ however, that there was no guargg- tee that all such receipts had been f been sold and the funds received: therefor omitted by Mr. McMillan. . who states himself that proper ha; cords had not been kept; fact that it has since developed to have been sold to D. A. McDonald" , Q! forty in 1925) was paid for, lends further I years it is inconceivable that Mr. Mc- c . olor to this view. ._ ._ i The claim put forward by Ms. Mo- ' ' Mlllan that he had augmented “raga.” way Improvement" receipts by means of the situation, as raised in Mr. Mc- o; certain cash ~p,.e5eny5_i- which he states he received ls not, I am bound to say frankly. a very conv "N9? procedure followed and consequently explanation, as applied to tlrlipir! can only refer you to the explcrw ticular phase of the matter undergo, view. The fsccthat he allowed him- in which he s elf to become the recipient of such "presents" from the sources indicat- conoernillg ed in his evidence implies a sltifdfifii -'~ which there was not only no record w hlch is anything but reassuring, not only insofar as “Highway Improve- ment" transactions arc concerned $827.14, refunded 0n M51‘ 22nd 18st. but in respect to other depar apparently o perations as well. I therefore find it increas more difficult not only to accep genuine this apparent surplus itself, but also the explanations cred concerning the sources of venue tlons during 1925 and 1929. and his from which it is alleged to have been largely built up. - In conclusion let‘ me say th'a\ in general the evidende taken during a recent enquiry inclines me of e' view that it reveals a far more un- satisfactory condition in respect to the manner in which "Highway Im- provcment" affairs have bceh con- ducted than was apparent nt. the time my earlier report was submitted. Mr. McMillan! evidence was far from convincing, particularly during the recent enquiry, when so many of his statements; were found to be at var- iance with other sourccs of infome- tlon. I an) accordingly let to conclude that "Highway Improvement" sf- fslrs have been loosely conducted, leaving many grounds for the belief that there have been various tran- sactions of a grossly irregular and , unwarranted nature. vie of the express atlpula -- é Audit Act.” 3- Yours Wfy truly, ' (Sci-l DONALD 8. tereefed in thrccntract fer which the cement was supplied, the matter f ‘ Chartered Charlottetown. Prince Edward Allllll 6th. 1999. ‘to be callci t: your special at cntiah. - Q stion- . " ed on June 13th concerning t item - with the exception of the _ made in cash (and not supporteil by a _ excess of disbursements and slopes-...... l r- I It was pointed out in my repsrej"'--~' accounted for. Materials may.hava'- -- sad-the.“ there is uncertainty as to the man-l- ., ncr in which a car of cetmentwisqfl; i l i g. t. I