Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-10-01
CHANCES FOR FRAUD
Criticism Of the New System of Treasury
Accounting
Eject of the Abolition Of the Con.
lusiOn in Passing Accounts.

ment, but 1t may be easily verified by any
one who cares to interview the officials
mentioned. Being employees of the govern
ment which has adopted the reform, they
are naturally averse to giving their opin-
ions publicity, but they do not hesitate to
express themselves to their intimates and
to others who will respect their confidence.
1t is pointed out that the plan proposed by
the commission Of experts selected under
the provisions of the resolution creating the
DOckery commission, and which was adopt
ed has taken away almost every safeguard
which the government formerly enjoyed in
its dealings with its servants who had
charge of the disbursement of it's funds,
and has made 1t possible for grave frauds
fear of discovery and assured freedom from
detection on the part of the parties to the
crime.
Under the old system, which was the re-
suit of years of constant study and prac-
tice on the part of the illustrious line Of
financiers beginning with Alexander Ham,
ilton who presided over the Treasury De-
partment, it was impossible for dishonest
disbursing officers to defraud the govern
n ent without certain detection. 1t was
also out of the question for error to creep
in with the result OF causing loss in the
public funds.
The System of Safeguards.
This may be illustrated in a simple man.
were sent to the treasury they were given
to the auditor having charge of the ac-
counts Of the particular department they
came from. Here they were examined and
audited, after which they were transferred
to the office of the first or second controller
In either one of these bureaus to which they
happened to go they were subjected to still
further espionage. Each Hem was exanin-
ed to see whether its Am0uAt was in ac-
cordance with the charges usually made for
articles or service of the character enumer-
ated and was also looked into to ascertain
whether the law admitted payment for the
item.
Every year the treasury was saved large
amounts of money by reason of this rigid
examination of accounts by the controllers
offices, which did not indicate any attempted
fraud on the part of the officials who had
made or disbursed the payments disallowed
but merely carelessness. A special agent of
the treasury, for instance, would send in
an expense account containing items in ex-
cess OF the amounts allowed by law or GUS
tom. III they got through the auditors Of
nee they were sure to be caught up by the
controllers force.
Under the Tweed Regime.
This, however, was oElx Q small item.
The revision of accounts. by the controller
prevented collusion between disbursinS Of
fees and employees in the auditors Office,
such as that which has occurred, in many
instances, where an auditor had the final
authority over accounts. An ilustrious eX-
ample OF this was shown in the financial
management of New York under the Tweed
regime. when millions were stolen under a
system of accounts almost identical with
that which went into effect in the Treasury
Department today-the man who disbursed
the money certified that he has spent a
certain amount for a certain purpose; the
account was passed and the city paid the
money.
Under the reorganization of the treasury
no fAr f.h.
corplish similar results. For instance
when disbursing officer sends his accounts
to the treasury they are taken in charge by
the auditor having supervision of that par
of the clerks unopened.
He examines the documents and returns
them to the auditor with his mark of ap-
proval. That official glanees at the clerks
nndlng and indcrses them accordingly
Their payment is ordered accordingly, and
they are filed away out of sight without
further delay. Suppose a clerk is a friend
or intimate of the oisbursing officer and re-
marks to the latter one day that he has
the examination of his accounts in charge
suppose that an agreement is entered into
between the two that in the next batch of
accounts sent in by the disbursing officer
there VIII be some false vouchers, which
the clerk will pass, and the proceeds of
whlch VIII be divided among the con-
SpiratorS.
Possible CoIIusion.
discovery to be made. as the clerk in the
AUDITORS office would be the final judge
the auditors connection with the accounts
being merely superficial. as no one of them
ever looks into the body of an account un-
less question rega riding it's allowance is
raised. study of the criminal operations
III state and city finances of the past
quarter century will discover that such
system of collusion as that described
in ha
OF instances. Under the former system
such oollusion was not possible, because
the controllers forces acted as a barrier
against fraud in the auditors office
II might be said in contradiction of these
statements that it would be impossible for
dlsbursing officer to send false vouchers
10 tne treasury along with his proper ac-
counts, because a d1sbursing officers ac-
counts are first looked over in the depart
ment ever whose funds he exercises con-
tro'. 1t Is true such an examination is
MADE out II is also true that the accounts
are returned to the disbursing officer after
such examination and by him are trans
mitted to the treasury, so it would be as
easy as lying for the false vouchers to be
inserted at that time. There are numerous
other ways in which the new system can
be mar aged so as to admit of fraud being
perpetrated on the treasury, and 1t is re-
peated with full knowledge Of the import
ance or the statement that the dsbursing
ofncers or the goyernn. ent In this city are a
unit in declaring that the adoption of the
new system removes the safeguards from
the treasury.
Makes Less Trouble.
1t will simplify their work, however, by
removing source of much detail and vex-
alton. Heretofore they have continually
been the recipient of communica tions from
the controllers asking for information about
items which they had allowed and which
the auditor had also Iassed, but which the
cortrQller found weres not in accordance
with law or custom
They were mostly items that were con-
sldered trivial in character, but which came
under the ban of the controller. For in
stance, special agent in his expense ac-
count charged 90 cents for porterage.
This was allowed by the auditor, but
when the accounts reached the controller
1t was discovered that the customary charge
for porterage in the section where the eX-
pense was contracted was only % cents
lmmediately-the, disbursing officer would
get letter Of inquiry regarding the charge
which would ,necessitate investigation, and
the eXpenditYre OF much time and trouble
On his part in making himself able to
frame the proper answer
Under the new system, however, disburs-
ing officers will be relieved of this onerous
duty. as the auditor, who settles his ac-
counts, is supreme, as under the new law
the first controller only takes action on
accounts when the auditors finding is ap-