Exhibit B. STATEMENT NO. 2.-Mexican Currency. Of coin, bank-notes, drafts, deposit-warrants, bonds, bank stock, &c., not taken up on the regular books of the treasury, but accounted for to the Auditor on separate monthly returns, on hand June 30th, 1900. (1) Funds received at the Spanish General Treasury, being mostly deposits made as guarantee for government con- Spanish gold coin. Mexican and Spanish-Filipino coin.... Notes of the Banco Español-Filipino, Manila... 5 00 728 62 Certified bearer check.... †Philippine Treasury notes, Series "B". Spanish Treasury Bonds. I,240 00 671 00 32,322 00 18,000 00 18,500 00 tamiento of Manila: Philippine Treasury Bonds, Series “B”. (2) Funds seized at and belonging to the Ayun Philippine Treasury Bonds, Series "B". Shares of the Banco Español-Filipino, Manila.. +Fire Department medals in box. 7,700 00 18,800 00 "Junta Provincial:" (3) Funds received from and belonging to the (5) Funds deposited with the Treasurer by American officers as "Special Deposits" American and Spanish gold... Mexican and Spanish-Filipino coin. 18,719 91 Said to belong Belonging to 2,532 13 16,611 42 STATEMENT No. 2-PAR. (5)-CONTINUED. Notes of the Banco Filipino-Español, Manila... 14,810 00 3.00 2,739 00 245 83 2,675 00 3,000 00 10,300 00 47,500 00 175,021 23 466 40 I certify that the above is a true statement of all funds and property received by me and not accounted for on the regular books of the Treasury, up to and including June 30, 1900. C. F. PARKER, 1st Lieutenant, 2d Artillery, Treasurer Philippine Archipelago. Manila, P. I., Aug. 15th, 1900. I have the honor to make the following report for the Auditor's Department for the fiscal year ending June 30, 1900. As there was no mention made of this department in the annual report of Major General Otis, for the period ending June 30, 1899, I take the liberty of going back to the inauguration of the Department and the appointment of an Auditor. G. O. No. 3, O. M. G., September 5, 1898, states "At the end of each month officers, charged with the disbursements of those funds"-(public civil funds derived from customs, taxes and other revenues in the Philippine Islands,)—"in the several departments of administration, will render, through the heads of such departments, to the Auditor of Public Accounts hereinafter designated, a statement, on authorized blanks, of all receipts and expenditures" and "Major Charles E. Kilbourne, Paymaster, U. S. A., is hereby designated Auditor of Public Accounts. Major C. E. Kilbourne was relieved from duty as Auditor by S. O. No. 4, O. M. G., October 10, 1898, which also appointed Lieutenant Colonel C. L. Potter, U. S. V., to the vacancy "to investigate and report upon expenditures of all public funds and to perform such duties in addition to those which devolve upon him as Chief Engineer Officer of this department." The accounts submitted were few in number at first and were examined by the chief clerk of the Engineer Department and revised by the Auditor, but the accounts gradually increased in number so that they could not give them proper attention, in addition to their department duties. The accounts were rendered by officers, many of whom were not familiar with the details required by the War Department, and but few of those submitted could be accepted, thus necessitating many letters of instructions to officers actively engaged in the field and with whom it was difficult to communicate, owing to the lack of proper mail facilities. However, by careful watching and by the issuing of numerous circular letters, the department managed to get the accounts in fair shape, as is shown by those on file. Under date of May 8, 1899, the President issued an order creating "Offices of Auditor of the Islands; one Assistant Auditor for auditing the accounts for Department of Customs and one Assistant Auditor for auditing the accounts for the Department of Post-Offices," and, under date of May 11, rules and instructions were issued by the Secretary of War to carry into effect the executive order. Lieut. Col. C. L. Potter, Auditor, submitted a report of the revenues and expenditures of the islands up to June 30, 1899, under date of August 29, which was duly forwarded to the Secretary of War. It appears there had been no books or records of any kind kept (with the exception of a letter press copy book) by the Department. It is understood that Lieut. Col. C. L. Potter requested assistants, but was denied them on the ground that civilians were en route from the United States to reorganize the Department, and consequently he merely confined his efforts to examining all papers submitted, noting that they were correct, supported by proper authority, and in accordance with Army Regulations. G. O. No. 39, O. M. G. dated September 20, 1899, appointed "Captain Albert Todd, 6th Artillery, U. S. A., Auditor of Public Funds of the Philippines," "relieving Capt. Charles L. Potter, Corps of Engineers, U. S. A." Shortly thereafter, the Department was moved from the office of the Chief of Engineers to the present suitable and commodious premises in the Treasury Building. Two clerks and a stenographer were engaged, and, with one enlisted man detailed, began the work of organizing the Department on a business like basis. The completing of proper records of all accounts on file, the keeping work of examination up to date, was all this small force could accomplish. About the middle of November the services of a bookkeeper were engaged (relieving one clerk) and another enlisted man detailed to the Department. Start was made on a "Scratch Ledger" entering up all accounts therein from the date of American occupation. It was very slow and unsatisfactory work but was finally completed about the beginning of March 1900, when the entries were transferred into a permanent ledger. Up to the end of December the methods, as set forth in the Rules and Instructions herein referred to, had not been followed, but on January 1, 1900, requisitions for funds for paying necessary and proper expenses were made upon this Department and receipts for funds deposited with the Treasurer were countersigned by the Auditor. A Treasurer's Ledger was started, in which were entered daily, all funds received and transferred by the Treasurer. This ledger is balanced daily with the Treasurer's books. Before the end of January the force was again augmented by the addition of a Property Clerk and another enlisted man, making total force nine (9). The number of accounts, however, were doubling and the force could not handle them. On April 1, when I took charge, Captain Albert Todd, 6th Artillery, having been relieved by G. O. No. 41, O. M. G., March 30, only a few of the accounts for the month of January, and practically none for February and March, had been examined. The first matter to be attended to was a half yearly report for the six months ending December 31, 1899. Also a detailed |