BUILDING FUNDS.

Auckland Star, Volume LIX, Issue 262, 5 November 1928, Page 9

BUILDING FUNDS.

HEAVt DEFICIENCY ALLEGED.

EX-SECRETARY ON TRIAL. CASE FROM WHANGAREI. Charged on various counts with failing to account for moneys totalling £1498 16/8, the property of the Whangarei Cooperative Terminating Building Society, Frederick William Webster, formerly secretary of the society, was on trial at the Supreme Court to-day before Mr. Justice Blair. Mr. V. R. Meredith prosecuted and Messrs. A. H. and A. K. Trimmer appeared for the accused. Mr. Johnstone raised formal objection to the form of the bill of indictment, which, he said, set out charges of the receipt of various small sums of money in a way that made it impossible to identify them. His Honor said he would rote the objection and would consider it at a later stage. Opening for the Crown, Mr. Meredith said accused was secretary of the Whangarei Building Society from the time it was founded in 1924 until he was suspended in August of his year. He was also secretary of the Whangarei Racing Club and of other bodies. Everything went quite smoothly at the outset. and at the end of the first year the auditor expressed much satisfaction with the manner in which the accounts were being kept. The secretary's salary was increased from £100 to £150. Accused paid for clerical assistance at the end of the second year, however, and the books were not in a satisfactory condition. From May 31 last until accused was suspended in August the auditor complained of dilatoriness on the part of the secretary, and of the overlapping of the accounts from month to month. Mr. Meredith .{raid he must make the comment that the auditor, Mr. Rust, signally failed in his duty in not counting a sum of £511, which Webster said was in his office when the audit was made for the year ending August 1, 1927. Following that balance day three paying slips to a total of £511 were paid into the bank in one month, and counsel submitted that these payments included moneys received in that month. The deficiency for the month of August was £107. From then on, month after month, there was deficiency. Money was being received at the office in large sums and was disappearing in large sums. Counsel submitted Webster was using the company's funds for purposes of his own. Action by Directors. Hugh Wentworth Crawford, chairman of directors of the society, said the rules included a clause that all moneys received on behalf of the society should be paid into the bank within 24 hours and the books were similar to those kept by building societies in Auckland. Albout November, 1927, the directors passed a resolution requiring a continuous audit of the books and a monthly report, to ensure that tha finances were being properly managed. The secretary had been cautioned at the end of the third year for his dilatory methods. Witness received letters from the auditor, Mr. Rutt, complaining that the books jjfrid accounts were not kept in a satisfactory manner. Mr. Johnstone said the reference to dilatoriness was not brought to Webster's notice until later. Witness read a letter dated August 22, 1928, and a financial statement, which afcowld a shortage of £1355 1/3 in the company's funds. The directors were Called together on August 24 and the letter and statement were read to them. Webster was sent for. He was shown the auditor's statement and said he could not understand it. He added: "If this statement is correct, I could not have used such an amount of money as this." Webster was asked if he had used any of it, and replied he might have taken a small amount. Asked how much he might have taken he said he would not be surprised if it was £50. Questioned further, he said it might be £150 or even £200, but he was sure he could not have taken more than £100. Witness and Mr. McLean were appointed by the directors to make an investigation and take what action was necessary. "Couldn't Have Spent It." Witness' and accused had a private conversation in Bank Street, in which witness said: "Now, look, Webster, as man to man, have y\ou taken that money?" Accused repeated his previous statement that he might have taken up to £200, but he was sure it could not be more than £100. Witness said: "Good heavens, man, where were you going to get a couple of hundred pounds to make up that deficiency?" Accused said he knew he would have to make it up, but it was ridiculous to say*jhe had spent £1300 in twelve months. That would amount to almost £30 a week, and he couldn't have spent it if he 'had wanted to. Money From the Till. Incidentally, continued witness, Webster remarked that, to take a little money out of the till, as he was doing was a thing every secretary did. Accused denied having used the society's funds to pay off liabilities in Taranaki where he had come from. Some of his debts there were 15 to 17 years old and his creditors had not pressed him for payment and would not do so. He had paid £5 a month to one creditor in Taranaki and £2 to another. Webster was suspended on the morning of August 27, after Mr. Rust had given Mr. McLean an assurance that his figures in regard to the deficiency were correct. An independent audit of the books by Mr. J. Reid was obtained and when it was finished Webster did not question the accuracy of Mr. Re id's figures. Mr. Reid stressed that the deficiency had not occurred all in one year, but gradually over four years. Accused admitted to witness the moneys had come into his office and he was responsible for them. He had not put in 1.0.U.'s when he took from £15 to f2O for his own purposes. (Proceeding.)