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evidence of these frauds. As I was unable to await the next sitting of the Court, I placed these cases in the hands of the police. In a letter dated the 2nd March the Crown Prosecutor informs me that the Clerk has been committed on these charges also. The Crown Prosecutor further states that additional indictments have been framed in respect of two of the previous cases, so that the charges now number fourteen in all. 87. In concluding my observations on the county accounts for the six years from the Ist of April, 1880, to the 31st March, 1886, I think I may say that, with the exception of the rates and certain small contract deposits, the receipt side of the accounts may be looked upon as completely elucidated. On the expenditure side I think it more than probable that frauds may yet remain undisclosed. Amongst the vouchers for payments to labourers I observed several which appeared of doubtful character. As, however, no useful purpose would have been served by prolonging my investigation, I determined to pass them by. 88. Accounts of the Six Months, Ist April to 30th September, 1886. —0n my arrival in Queenstown I found that no entries had been made of the transactions of the half-year, Ist April to 30th September, 1886, cither in the cash-book or the ledger. The rates received to date had been entered up in the rate-book. Eecords of other receipts had been kept on loose sheets. The records of expenditure consisted of the paid vouchers, and payments out of petty cash entered up in the petty-cash-book. The minute-book was written up to the 4th October, 1886. One meeting had been since held, the minutes of which were not entered. The county had, it appears, arranged to commence the keeping of the county accounts in the amended form required by sections 19 and 20 of " The Counties Act Amendment Act, 1885," on the Ist April, 1886, and for that purpose had obtained a new cash-book arranged in a form designed by the County Auditor, together with a rate cash-book. The present County Clerk, Mr. Black, who only entered on the office in the month of April, and had had no experience as to the keeping of county accounts, explained that the system contemplated differed so entirely from that previously in use that he was doubtful how the new books were to be commenced, and for that reason had determined to await the arrival of the County Auditor before entering the transactions of the half-year therein. Under the supervision of Mr. Livingston this work was accomplished, and the accounts were then duly audited and certified as correct, with the customary exception of travelling allowances paid to a member of Council not coining from a distance. 89. Although these accounts had but just passed through Mr. Livingston's hands, I felt it to be my duty, in obedience to your Excellency's instructions, to subject them to the same special audit as I had made of those of the antecedent period. I made, therefore, a complete audit of the receipts and payments as shown by the several vouchers and recorded in the several books of account. I found that payments of travelling expenses to the amount of £8 had been made to a member of the Council without authority of law, and that in three cases these allowances had been overpaid to the amount of £12 in all. Payments not sanctioned by law had been made, to the amount of £12 55., to Clerks to Licensing Committees. As regards the sums improperly paid as travelling allowances, applications have, as previously stated, been made for the refund of the amounts. The other payments will be recovered by surcharge. I found that sums amounting to £3 10s. received by the late Clerk as fees on hawkers' licenses issued had not been accounted for within the half-year. I learned, however, on inquiry, that the sum had been paid by Boult on the 7th December, 1886. An overpayment of 7s. made in the previous half-year was still awaiting adjustment. Notes as to both the last-mentioned sums had been made by the County Auditor in the cash-book. 90. I observed that the overdraft at the bank at the end of the half-year (£3,281 ss. lid.) exceeded the amount of the previous year's ordinary revenue (£3,014 17s. 4d.) by the sum of £266 Bs. 7d., and was to that extent illegal. The subject of the overdraft was brought before the Council at a meeting held on the 3rd January last, by a letter from the bank requesting that the amount might be reduced. At the same meeting a memorandum from the County Solicitor was read, in which that gentleman, in answer to a communication from the County Chairman, pointed out that the limits within which the county could borrow by way of overdraft were considerablyrestricted by the Act of 1886. The county is therefore fully apprised of its position in this matter, and will no doubt be careful in the future to keep its overdraft within the statutory limit. 91. I have stated that the county had procured a new cash-book with a view to bringing its accounts for the financial year 1886-87 into the form required by sections 19 and 20-of "The Counties Act Amendment Act, 1885." The design had, however, as regards the first half of the year been very imperfectly carried out. The Council had evidently made no such classification of the works performed as is required by subsection (3) of section 19 of the Act, and the particular items of expenditure which will be ultimately chargeable to the respective ridings will require therefore to be determined hereafter. The omission is at the present moment of slight importance, since the mode prescribed by the Act for determining the income of the several ridings for any financial year requires that the year shall have closed before the terms of the equation on which the computation rests can be obtained. The Act referred to has now been amended by that of 1886, which came into operation on the Ist January, 1887. The accounts of the county for the financial year ending on the 31st March, 1887, will nevertheless require to be made up in terms of the Act of 1885, and at the close of the financial year will need to be entirely reconstructed. The provisions of the Act of 1886, sections 145 and 146, for determining the income of the ridings, while simplifying the production of the first term of the equation, by providing that the estimated instead of the actual revenue of the county shall be taken, still defers to the end of the year the production of the second and third terms, by basing the computation of the surplus on the actual expenditure, and the income of the riding on the actual receipts. The elements of the computation are on the whole less simple than in the^Act of 1885, for, while in that Act the income of each riding was measured proportionably by the " general rates " only, under the Act of 1886 it is to be measured by the " general rates and goldfields revenue received from such ridings." 92. With the exceptions above referred to I found the accounts of the half-year, Ist April to