Mr. E. Lyulph Stanley, appointed to investigate the affairs of
the Cardiff Savings-Bank, has sent in to the Treasury a most hopeless report. He finds that the Bank had been defrauded by its actuary, Mr. R. E. Williams, for twenty yeers. His mode of operation was to receive sums himself, often after hours, and falsify the payments upon them. This process must have been detected, but that the auditors, who only received originally £7 10s. a year, afterwards increased to £25 and £38 a year, made a purely nominal audit, or when they made adverse remarks, as one auditor did, allowed the actuary to suppress them. The managers and trustees, who should have checked both actuary and auditor, entirely neglected their duties. One of them for years merely copied out, after hours, state- ments furnished him by the actuary. The amounts received from depositors were greatly in excess of the legal limit, and when the Bank failed, the deficiency to be made up exceeded £37,000. A composition at the rate of 17s. 6d. in the £1 was made with the depositors, but Mr. Lyulph Stanley evidently thinks that the depositors acted in ignorance, and that many of the managers and trustees are liable to heavy demands. He recommends that, as there are now Post Office savings-banks, subsidies to other savings-banks should cease. Clearly the choice lies between that and the appointment of a State auditor. Managers and trustees, selected only for local position, cannot and will not check complicated accounts.
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