The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1903-05-09

Francis N. Stacy's report on the con-
dition of the permanent improvement re-
volving fund and the city's system of ac-
count is a severe arraignment of the n1u-
nicipal bookkeeping. Former Controller
John F. Calderwood said in 1889 that the
system was not even worthy the name and
was unworthy of any municipality which
had passed the village period. MI. Stacy
says that the bookkeeping of 1903 is the
same as that of 1882 The revolving fund
which in 1887 was S1,150,000, has since
shrunk to $65d000 and hence is short
about 100000. Mr.. Stacy says in his
report:
I'm view Of the fact that the city of
Minneapolis has advertised, to be sold
on May %, 1908, $s15,000 Of new bonds,
100000 of which are to replenish the
permanent Improvement revolving fund,
6 which have become exhausted in part be-
cause of a bad accounting system, deem
it advisable at this time to submit to you
the following report reviewing the con-
dition Of said accounting and recon-
rnending certain changes based on the
experience of cities which have made
progress in municipal accounting, during
recent years: SO that the city of Mime
apolis may be able to guarantee to the
investor who buys these bonds and to
the taxpayer who is to redeem them a
d system of accounts which will preserve
and account for. the proceeds In a bust
ness-lfke manner.
Present Accounting Condition.
..The resolution adopted by the city
council JAN %, 1908, authorizing the in
yestisation on which am engaged. states
as regards the condition of the permanent
Improvement revolving fund: There is a
deficit of S260,000.'
This fund was created in 1887 by bond
issues which to date amount In the ag-
gregate to s1,15O,0o0 face value. The
fund is by law supposed to be self-sup-
porting that is. the cash advanced from
it for improvements being returnable In
special assessments on abutting property.
On Dec 81, 1902, the, report of the city
4 controller shows that. in lieu of this fund,
there is an overdraftS and debit balance
4 of SIS, 230.61.
''The fund has to it's credit. however, an
asset amounting to about 100000 in spe-
cial assessment installrnents not yet due:
and som ewhere in the ne1ghborhoOd or
4 $4,000 in delinquent assessments; these
\ aggregate collectable assets amounting not
to exceed $650,000
..Since the revolving fund was estab-
1ished in 1887 by the first sale OF bonds.
therefore, it has suffered a. total shrink
age in round numbers. of about S5O0,OO0
This product of bad accounting has az
fected the condition Of many other FUNDS
Detailed statistics upon this point will be
presented in appendix to TINS report
to be submitted at the next$councll meet
Ing, May %.
fThe special phase of the subject to pc
y considered in this report is the account
ing system responsible for the above ano
like shortages, and a pracrlcaple ana 1easl-
y BILE method of strengthening that system.
1.-THE deficiencies of the accounting sys.
5 tenn in vogue in the department Of city
controller were thoroy reviewed by a for.
mer incumbent of that office, John r.
Calderwood, in his report for the veal
1889. Mr. Calderwood declared at thai
80 hie 0If
was not worthy of being called a system
and that it was not worthy of any city
that had passed beyond the village stage
The Minnea polls bookkeeping system O.
1889 is substantially that of 1903.
Meanwhile various prominent cues o
this country have brought about marked
reforms in municipal accounting; New
York. Boston Baltimore, Buffalo. Cam
bridge, Cleveland, Columbus, Detroit, ST
Paul and Chicago being especially prom
nent in the successful accounting REFORMS
which they have evolved and put int
practice. aa-..
chicaao's New System.
..Pertaps the most notable munlclpa
accounting reform in modern times Il
that Of Chicago during the past two year
and still in progress. It Is doubtful II an.
CITY in the world has been perplexed Wit
a worse financial tangle than that II
which Chicago found itself tw,
Years ago The Merchants Gu
Of Chicago first took up the subject, an
thereupon the mayor controller and CIT
council addressed themselves to the SUB
I iect in thoro- going official acts. Hask1n
& Sells, certified public accountants
New York. were given the contract to de
wise and install a. new and complete sys
/ tenn Of accounts covering the period iron
1871 down to date. The two contracts
4 one to revise the special assessment sys
/ tenn and one to provide a new accounting
system for the various funds OF the city
called for an investment on the part o
] the city Of about s145, 900. The account
ing firm guaranteed a, net saving to tn
a; city Of $4,000 per annun in the cost i
administration Of the accounting system
The net saving s in cost of operation TO
/ the first year exceeded this guarantee
and amounted to $50.
ssThe opening of a corrected system c
4 accounts unearthed during this first yea
4 upwards Of $3.50, 900 of revenue in tn
4 shape Of uncollected special assessment.
| and something like $500, 900 Of uncollect
4 ed licenses and miscellaneous revenue e!
u Since the first of January, this year,
am informed by Auditor A. 2. King of tn
\ 81 special assessment department, there hay
il been unearthed and collected nearly $500
II 600 moro Of special assessments due tn
city; making total. during the first yea
and four months, of nearly one and one
half million dollars of net revenue re