The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1903-07-19
EXPERTS REPORT ON
AUDITORS ACCOUNTS
Treasury Committee Con-
firms DefalcatiOn Figures.
BOOKS WERE NOT CHECKED
Funds Missing to the Amount Of $751;
3o744-Eighteen Checks in Wat
sons Desk.

The long-looked-for report of the
committee of two expert accountants
appointed from the Treasury to examine
the accounts of the District Auditors
Office was made public yesterday after
noon.
Although twenty-fouT pages in length
it contains only three items OF much
Importance, namely. II corrouorates
Auditor Petty's figures as TO the
amount OF the alleged Watson defalca-
ton; It states that Watson's books were
not checked or compared during his
four years employment, and that
eighteen checks which were missing.
amounting to s7.925.99, were discovered
In Watsons desk. The amount Of the
defalcation is given as S73.S97.44.
Report Of the Committee.
The report follows in part:
Mr.. Watson appears TO have been put
in charge OF the papers and records OF
the Office pertaining TO permit work in
December. 1898. and from the time OF his
taking charge until about June l. 1903,
period Of more than four years. his
work does not appear to have been re-
vised. checked up or otherwise proved
or tested by any other employee of the
office. or b. the Auditor.
Two reasons were given for failure
TO make such revision or test: First.
the inadequacy of the working force Of
the Office. service after Office hours be-
ing frequently required 20 keep up with
current work, without undertaking re-
vision: second. that the Auditor be-
ieyed, upon what he considered to be
credible information. that from time to
time Mr. watson's work was checked
up By NJ. Lopham. Of the engineers Of
fee. who furnished in great part data
for vouchers pertaining to Watson's ac-
counts.
some time after Watson took charge
OF the work. the method was CHANGED SO
that the Auditor stated an account in
bis Own favor. the discussing oficer is
sued his check to the order of tho
Auditor. who receipted for the same 10
the Disturbing oEeor; tho check was
countersigned by the Auditor and In
dorsod BY him. sometimes by simply
signing bis name as Auditor and some
times to the order OF the Collector of
Taxes. 1t was. however, understood to
be the intention in each case that the
check should go to the Collector of
Taxes 70 be By him Endorsed and de-
posted. The new method was manifest
ly much more rnischievous than the
former method. afordlng double oppor-
tunity for the conversion Of funds. as
amply shown by the facts disclosed"
List of Checks Cashed.
The report givcs complete list OF
the checks alleged to have boon cashad
By Watson and applied 20 his OWE bene-
fit, amounting to more than $4,000. In
addition It is stated that the committee
noted eighteen checds. and the vouchers
upon which they were drawn. as missing
These checks amounted to 81 ,925
The audits and checks appear 20 have
been properly made. according to the
practice of the office. and it Is presumed
that they, or their equivalents, Will 10
through as originally intended. after
the completion OF the investigation still
in progress IN the Auditors office.
The several Items Incorporated in the
alleged defalcaticns are then treated
separately, and the number, amount,
and character OF each check enumerated
The most important part Of the report
is contained in the summary. on the last
four pages.
In those pages the committee has
noted imDerfcctions and the lack Of
proper safeguards in the methods and
practices Of the office regardless of the
responsibility.