Tuesday 7th December 1897

A meeting of the Borough Council of Newtown was held on the evening of the above day at half past seven o’clock.

Present
The Mayor (Alderman William Cox) and Aldermen Howe, Morgan, Abigail, Smith, Ibbotson, Elstub, Rigg and King.

The minutes of the previous meeting were read and confirmed and signed.
Correspondence
From Mr E. J. Miller complaining of the slippery state of the tarpaving at the corner of the Marian Street and Enmore Road.  Received and referred to the Mayor to deal with.
From the St Peters Council stating that in consequence of the insanitary condition of the premises of Messrs Martin and Andrew Brown registered dairymen in St Peters the registration and licensing had been cancelled and such cancellation had been confirmed by the Board of Health.  Since then Andrew Brown had been preceded against at the Newtown Police Court and heavily fined.  Nevertheless was still selling milk in the district of Newtown: and asking what the council as the local authority was doing in the matter.  Received and referred to the Inspector of Nuisances for report.
A printed circular was read from the elective members of the Water and Sewerage Board calling the Council’s attention to the recommendation contained in a report of the Royal Commission on the construction of the Board and recommending sundry alterations therein stated. Also from Hurstville on the same subject covering a copy of a resolution that that council agreed with the recommendations of the Royal Commission to reduce the Members of the Board to three and asking this council’s cooperation in endeavouring to have the recommendations carried out.  It was moved by Alderman Smith “that the letters be received and their consideration be postponed and made an order of the day for next meeting.” Seconded by Alderman Howe.  Alderman Rigg moved as an amendment “that the letters be received and replies sent stating that this council approves of the recommendations of the Royal Commission.”  Seconded by Alderman Abigail and lost.  The original was then put the meeting and carried.
From the Metropolitan Board of Water Supply and Sewerage covering a printed copy of the Boards Medical advisers report upon the general health of the city and suburbs for the quarter ended 30th September 1897.  Received.
From the Department of Public Works calling attention to the fact that the Bond in regard to future [—] of the Newtown Road had not yet been returned executed.  Received.
From the Water and Sewerage Board stating in reply to a letter from this Council requesting a supply of water free of charge to a new public Fountain erected by Mr Hattie on the Railway Bridge, “that the Board have approved of the request.”  Received and to be acknowledged with thanks.
Reports
Finance Committee
reported having paid accounts amounting to £452.6.2 and recommending payment of accounts amounting to £674.0.10. The Mayor moved “that the Finance report be now adopted.” Seconded by Alderman King and carried.
The Borough Treasurer
reported “that £1838.4.3 had been received and deposited in the bank: that £452.6.2 had been paid away and that there was a credit balance in the bank of 614.7.5.  Received.
The Overseer
reported the progress that had been made with the works under his supervision during the last two weeks.  Received.
The Inspector of Nuisances
reported the amount of work done in his Department and that the contractors were doing their work satisfactorily.  Received.
Motions pursuant to Notice
Alderman Abigail moved
1 “That the kerbing and guttering in Trade Street northern side be completed 20 yards at an estimated cost of £6.”  Seconded by Alderman Elstub and referred to the Works Committee.
2 “That reference be made to the Works Committee to inspect and report upon the best means of dealing with an open drain on the northern side of Trade Street and estimate cost of same.” Seconded by Alderman Smith and carried.
Questions
In reply to Alderman Morgan the Mayor said he would again communicate with the Railway Commissioners in reference to the necessity which exists for a retaining wall in lane at the back of Newman Street.
The business being concluded the council rose.
Confirmed this 21st day of December 1897.
Signed William Cox, Mayor.

Tuesday 21st of December 1897

A meeting of the Borough Council of Newtown was held on the evening of the above day at half past seven o’clock.

Present
The Mayor and Aldermen Howe, Salmon, Morgan, Smith, Ibbotson, Elstub, Rigg, McCann, Ekin and King.

The minutes of the preceding meeting were read and confirmed and signed.
Correspondence
from Messrs Richardson and Wrench with reference to a block of land in Briggs Estate at corner of Kingston Road, Railway Avenue and Trade Street situate in Newtown and Camperdown and offering to dedicate the same to the said boroughs for the widening of Railway Avenue as an improvement to the district and asking for the usual deduction form which they would endeavor to get signed.  Received and accepted.
From Mr R. B. Cropley and Mr George Christie each intimating that they were candidates for the office of Municipal Representatives on the Metropolitan Board of Water Supply and Sewerage at the next election to be held on the 22nd March next. Received.
From Mr E. R. Abigail intimating that Alderman J.W. Abigail on account of ill health had taken a sea trip and would be absent from the colony some seven to eight weeks.  Received.
From St Peter’s municipality having reference to an alleged complaint made by Messrs Makinson and Plunkett Solicitors said to arise from certain drainage and sewerage from these respective boroughs finding its way onto the property of Mr Smidmore at Marrickville and asking if this Council has arrived at any determination in the matter.  Received and the St Peters Council be informed that the subject is still under consideration.
From Mr A Beetham offering to supply the Council with concrete kerb and gutter blocks all in one delivered at Newtown Station at 495 per lineal yard. Received and referred to the Works Committee for report.
From Marrickville Council having reference to the question of systematic inspection of animal food, and asking that a delegate from each Council be appointed to form a committee to confer the President of the Board of Health as to the best means of providing such inspection.  The projected meeting to be held at the office of the Board of Health on Wednesday the 5 January 1898 at 3.30p.m.  Received and the Mayor and Alderman Smith were appointed to represent this Council.
From the Secretary to the Railway Commissioners stating in reply to a letter from this Council asking the commissioner’s to contribute towards the cost of maintaining a large lamp on the Fountain recently erected on the Railway Bridge in lieu of maintaining the large tramway lamp adjacent thereto that “the commissioners have approved of the sum at the rate of five pounds (£5) per annum being granted” for that purpose the existing lamp to be removed and the arrangement to be open to reconsideration if at any time the system of traction on the Newtown tramlines is altered. Received and referred to the Mayor to be dealt with.
From the Department of Public Works in regard to the proposed wood blocking of that portion of King Street between the Railway Bridge and Bligh Street informing the Council that until the bond forwarded on the 26 August last has been executed no further steps can be taken to proceed with the work. Received and it was resolved that the bond be signed as requested.
From the Borough of Ashfield asking cooperation in getting a reduction of Railway fares on suburban lines and recommending a deputation to the commissioners for that purpose.  Received and the request acceded to and the Mayor was appointed to represent this Council.
From Messrs Smith and Stuart offering to insure the Council against damages from accidents in roads and streets.  Received.
Reports
Works Committee
reported on the undermentioned matters as follows:-
1st In reference to the wood blocking of King Street between the Railway Bridge and Bligh a Street and the kerbing that will be required in connection therewith recommend “trachyte kerbing the substituted for the present sandstone kerbing from Australia Street to Elizabeth Street in the northern side and from the Bridge to a Bucknell Street on the southern side. The kerbing to be 9 x 16 the same as in Enmore Road.  The best of the old sandstone kerbing to be redressed and set where it required to make good the other portions of the street as may be directed from time to time by the Works Committee.
Tenders to be invited for the supply of the new trachyte and the labour of fixing same to be done by our own contractor. The tarpaving to be made good as the Committee may deem necessary from time to time.
2 Referring to the proposed ballasting of Juliett Street and Harrow Road between the Councils of Newtown and Marrickville.  Seeing that Marrickville Council has already began its portion recommend that this Council do the portion within its own boundary and thus complete the work.
3 Proposal to lay 20 yards of kerbing and guttering in Trade Street recommend that the work be done.
4 Trade Street open drain the consideration of the subject has been a postponed for further consideration so as to ascertain whether any portion of the site referred to is within the boundary of this Borough.  On a motion by the Mayor and seconded by Alderman Smith the report was adopted.
Overseer
reported the progress that had been made with the works under his supervision during the last two weeks.  Received.
Inspector of Nuisances
reported the amount of work done in his department and that the contractors under his supervision were doing their work in a satisfactory manner and in the matter of the letter from St Peters Council respecting the selling of milk in Newtown by Messrs Brown of St Peters after the registration of their premises as dairy men had been cancelled by St Peters Council that he had been allowed to visit the premises referred to and had had an interview with the Secretary of the Board of Health on the subject who stated that the Board had not sanctioned the selling of milk by Messrs Brown in any place or district outside St Peters and recommending that the Messrs Brown should not be allowed to continue this practice and that as they are not registered here they should be prosecuted for so doing.  Received and adopted and St Peters Council be informed.
Report of a Special Committee appointed at a Special Meeting of the Council held on the 11th October last to arrange for an examination of the rate books as kept by the assistant Council Mr P.E.W. Deacon. In accordance with instructions as above your committee at once arranged with Mr F. E. McLean an incorporated accountant to take over and examine the Rate books for 1894-5 1895-6 1896-7 1897-8.  Subsequently on the second of November 1897 the assistant Council clerk committed suicide. Mr McLean has now completed his examination of the books above mentioned and his report presented herewith will speak for itself. A statement has been compiled from the number of receipts which rate payers have been good enough to lend the Council to assist in discovering the deficiencies and a certified copy has been sent to the solicitors of the Fidelity Guarantee Company whose covers to the extent of £150 and a claim has for that amount. Your committee regret that they have not been able to report earlier.  The duties imposed upon them have not only been of an unpleasant nature but have entailed a great amount of anxiety and worry. The four years rate books which Mr McLean has examined each book containing about 5000 properties have taken up a considerable time and have required close application to get them finished even now.
A copy of Mr McLean’s report has been submitted to the Council Clerk and the Committee suggests that he should be allowed to make any explanation that he may deem necessary.
Signed William Cox – Mayor, J.F Smith – Alderman, William Rigg – Alderman
Received and adopted.

Report from Mr F. P. McLean, Incorporated accountant
Acting under instructions received from the Mayor and Alderman Smith and Rigg as a Special Committee of the Newtown Borough Council and in accordance with the terms of my letter of 28th October last I have checked the credit entries in the Rate-book of your Council for the current Municipal year and have also made out notices for the amounts found to be due by Ratepayers to the Council according to the Rate-book. These notices were handed by me from day to day to Mr Swan the Borough Inspector for delivery.
I find that 56 amounts had been credited to Rate payers accounts in the Rate book for the current year which have not been added up in the total credits for the various months and which are not accounted for in either the cash receipts or passbook.  I append a list of these items amounting in all to £90.6.9.
Since the delivery of the notices a large number of Rate payers have called at the Council Chambers and disputed their accounts. In most cases the Council clerk has obtained receipts for these amounts.  I have carefully examined those receipts and compare them with the book entries and found that the amount received by the late assistant Council Clerk in this way in excess of the cash accounted for reaches a total of £192.18.7 during the current.  Adding to this the amount already referred to viz: – £90.6.9 it would appear that the Council has being defrauded during the current municipal year to the extent of £283.5.4 so far as can be ascertained from documents that have come under my notice.
In all 2245 notices were issued for rates due amounting to £4801.19.10.
There has been a very considerable response to these notices the receipts for the month of November amounting to £1747.5.5 while the total receipts from the 1st to 20th December inclusive amounted to £3470.2.0.
It became evident from the nature of the false entries in the Rate book for the current year that a careful examination of the books for the previous years would be necessary. Accordingly upon the completion of the issue of the notices to Rate payers I commenced an examination under your instructions of the Rate books for the years 1894-5, 1895-6, 1896-7.  I found that in all these years the same kind of false entries have been made although the amount of deficiency in the first year 1894-5 was comparatively small.
Ratepayers accounts in the rate book had been credited with amounts which are not accounted for in the cash receipts or bank books. I have compiled lists showing the amounts received in this way and not accounted for in the cash.
The total amount so dealt with in each year is as follows:-
1894-95 £13. 3. 3
1895-6 £187. 4. 2
1896-7 £228. 3. 0
1897-8 £90. 6. 9
£518.17. 2
To this already large amount must be added the amount of Rates paid during the current year and not accounted for in any way, viz:- £192.18.7 which brings up the total cash deficiency in the late assistant’s accounts to £711.15.9.
So far as the misappropriation of these amounts is concerned the late assistant clerk is solely responsible for what has occurred but I am bound to say that any reasonable and careful checking of the rate book.  The amount deficient in the Rate book for 1894-5 was only the comparatively small sum of £13.3.3.  Had the additions in this book been carefully checked and the bringing forward of the arrears also checked the discrepancy would have been discovered at once and the Council would probably have been saved about £700 which has since disappeared.
The system adopted in the Councils Rate book provides an easy and [—] upon this Cashier but any system is worse than useless if it is not properly carried out.
The late assistant clerk appears to have put in the items credited to Rate payer’s accounts already referred to after the monthly totals were added up and compared with the cashbook.  The effect of this was to balance certain accounts and prevent the arrears in those accounts from coming forward into the new Rate book.  I have examined the Council Clerks rates account in his ledger and find that he has practically accepted figures appearing in the rate book with respect to arrears and has not satisfied himself by careful checking that the amount of arrears there shown was correct as a matter of fact excepting in one or two cases of clerical mistakes the individual accounts for arrears as carried forward were correct but the assistant clerk adopted the device of adding up his columns wrongly in order to bring forward a larger amount of arrears than the individual accounts would show.  Nothing but the consciousness that the addition were not checked could have induced him to adopt such a method of deception.
In order to ascertain the amount in each year which your Council has lost in this way it has been found necessary to check the whole of the additions in the Rate books for the past four years.
It appears almost incredible that such a system of deception could be successfully carried on for any length of time but your Council Clerk has evidently not deemed his duty to check this part of the work of the subordinate officer it cannot be contended that the late assistant clerk was solely responsible for the keeping of the Rate book.  Apart from any suspicion of fraud the checking of these additions was necessary to secure accuracy.
I understand that the Borough Auditors have not been in the habit of checking the arrears brought forward from year to year.  They have certified to the statement of receipts and expenditure and checked the accounts with respect thereto with the books and vouchers.  It is quite possible that the false entries were not made until the Auditors had finished their checking of the books. The object of cause being to balance the ratepayers accounts and prevent the arrears coming forward so far as individual accounts were concerned.
I am bound to say that the present system of Municipal Audit does not appear to me to give the Councils that effective check which they should have upon the work of their officers.  As the current municipal year will expire in the beginning of February next within about six weeks I would [—] that the various rate accounts in the ledger and rate book be adjusted and placed upon a proper basis for the coming year.  I have shown corrected additions right through the rate books for the four years submitted to me and it will be comparatively easy to adjust the accounts in opening a new book with this information at hand.
Signed F. E. McLean
A.S.I.A
Resolved that Mr McLean’s report now read be received and copies be sent to the Auditors and Council Clerk for any explanation they may deem it necessary to make.
Resolved that this meeting do now adjourn until 7.30 tomorrow evening.  Meeting adjourned accordingly.

On Wednesday the 22nd December 1897 the adjourned meeting was held at 7:30 p.m.

Present the Mayor (Alderman Cox) and Aldermen Howe, Salmon, Smith, Ibbotson, Elstub, Rigg, Mc Cann, Ekin and King.
Moved by Alderman Rigg and seconded by Alderman Ibbotson “that Mr F. E. McLean’s report re the assistant Council Clerks defalcation be adopted and that he be thanked for the valuable information and willing assistance rendered to the Committee beyond the duties of which he was engaged.
The following letter from the Council Clerk was read in explanation. viz:-
In reply to your request for any explanation I may deem necessary on Mr McLean’s report on the defalcations of the late assistant I respectfully call your attention to the following facts.
In the first place permit me to say that I had known my late assistant nearly all his life.  He had worked with me for the last 10 years and I respected him and trusted him as implicitly as the Council has trusted me for the last 17 years, I regret that he took advantage of my confidence and friendship.  But I hope to be able to show you that his defalcations were not caused by my neglect.
His position was necessarily one of trust and to have completely checked his work so as to prevent any possibility of fraud would have been equivalent to doing the work myself.  With the knowledge and approval of the Mayor and Aldermen received the rates and gave receipts for same as I was mostly engaged with other work, what monies he actually received I could only learn by referring to the butts of receipt books which always corresponded with the amounts put in the till and which were duly entered and the cash receipts books and banked in due course.  In cases where he took receipt forms from books not in use could not have been discovered by me unless I had constantly stood over and watched him.
The system of deception defeated the scrutiny both of myself and the Auditors.  The totals in the rate book not being altered prevented any suspicion of the correctness of the additions in the columns or that the books had been tampered with.
To have discovered the frauds it would have been necessary to have checked the back accounts which in their original state as submitted to the Auditors there seemed no reason to question.  It is not usual in Business Houses to examine past work.
Therefore whilst deeply regretting the Councils loss, I respectfully submit that I am not so blameable as some suppose, I need hardly add that not one penny of the money which has been lost was received by me.
In conclusion I respectfully remind you that I have been in your employ for the last 17 years and trust that my long service will induce your favourable consideration of the present unfortunate circumstances.
Signed Jesse Cowley, C. Clerk.
Moved by Alderman Howe and seconded by Aldermen Salmon “that the letter be received and referred to a committee of the whole Council with closed doors.  An amendment moved by Alderman King and seconded by Alderman Ekin that the word “closed” be omitted and the word “open” substituted. The amendment was lost on the Mayor’s casting vote.  The Council divided on the subject as follows:
In favour of the amendment Aldermen King, Ekin, Elstub, Smith and Rigg (5). In favour of the motion, the Mayor and aldermen McCann, Ibbotson, Salmon and Howe (5).  The Mayor gave his casting vote in favour of the motion.
Resolved on the motion of Alderman Salmon seconded by Alderman King that a copy of Mr McLean’s report be sent to the Auditors for an explanation they may wish to give.
Resolved that the thanks of the Council be given to the Mayor and Aldermen Smith and Rigg for their services in connection with the investigation of the Council’s books and for the satisfactory arrangements with the special Auditor.
The council then resolved in committee of the whole to consider the foregoing subjects and on resuming brought up the following report viz:-  the Council Clerk’s letter of explanation dated 22nd of December 1897 having been read and duly considered the Committee came to the conclusion that the explanation contained therein is not satisfactory: that it cannot hold him blameless believing that he has been guilty of neglect in not exercising a more careful supervision over the affairs of the Council and its books: that his services be dispensed with and that he be given one month’s notice from the first day of January next.
Signed William Cox, Mayor.
It was moved by the Mayor and seconded by Alderman McCann “that the report now read be adopted”.
The business being concluded the Council rose.
Confirmed this 4th day of January 1898
Signed William Cox, Mayor.

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