The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-04-26
MUCH ROOM FOR FRAUD
BUSINESS METHODS IN PosTOFFICE
DEPARTMENT ANTIQUATED.
Attention of Congress often Called to
IL, but No Heed Given-New
Features Added.
Washington Post.

had far outstripped the facilities for assur-
ing honest dealings. and at the present day
the postal affairs of the country, rivaling
i'm magnitude any commercial enterprise
between the two oceans. are conducted
along lines no good business man would toll
crate. II all that is now charged and sus-
pected in regard to mal-administration
should prove true. it would only be pin
scratch on the surface. compared with deep
abysses OF possible disaster. inherent in the
system OF doing a private financial and
transportation business on the government
account. even as IL is now being done, with
out regard to proposed extensions.
The total money transactions Of the postal
service. including the money order system,
for the fiscal year will reach $1,000, 100000
The accounts are all kept in the offices of
the auditor of the Postofice Department,
and from there time and time again alarms
have been sounded regarding defeetlVe
methods
But that is only one feature of the enor-
nous postal business Of the country, fur
nisning, under the present lax arrange
ments and absence of checks upon en-
ployCs. thousands Of ioopholes for improper
expenditures. Almost every year Congress
has under consideration some scheme Tor
the extension Of the postal system. During
1899 bill was pending which appropriated
100000. IL necessary. to buy or build
postal telegraph, but did not even mention,
much less provide for, any plan or force
for keeping or auditing it's accounts.
In season and out OF season for several
tious and thorough official, has been call
ing attention TO VIGOROUSLY defective
methods" I'm branches of the postal service.
He has emphasized these matters in his an
nual reports, but official reports rarely COM
mand much scrutiny from Congress or
from others in authority. He has also
written OF them in magazine and newspa-
per articles. AS long ago as 1900 Mr..
Castle was telling Congress about the inn
proper auditing OF claims for railway mail
transportation. This is due" said he, Ito
the insufficient data furnished this office
by the Postoffice Department, Ii being a
settled principle that in auditing an account
We are entitled TO all the information in
the possession of the department when the
account was approved. The expenditures
unoer this head, aggregating more than
SSz0ooO annually, would seem to require
special attention and the more rigid accu-
racy In ascertaining the amounts due be-
fore final payment.
CONDEMNED BY CONTROLLER.
The glazing defects In our system have
been commented on in very severe terms by
the controller OF the treasury In a pub
lished opinion. We do not receive the data
necessary to correct this fragrant omission.
and IL we did receive them, we could not
make the audit with our present force. AS
I have stated to the appropriations COM
mittees OF both houses in two successive
sessions OF Congress, at least twenty addi-
tional clerks are needed that this auditing
may be assumed. The suggestion was ig-
nored, and the responsibility for falling TO
perform this necessary FUNCTION still rests
Strong official protests have been made
against ENGRAVING new features upon the
postal system. already grown 20 enormous
at he
time provided for keeping check upon all
transactions Nearly all OF the engrafted
money order. merchandise post, and other
branches. have been conducted at a loss
which has been IN part compensated for by
the profits In other branches chiefly the
mail matter. Mr.. Castle has based his pro-
tests against these large increases chiefly
on "the vitality important fact that the ac-
enable US to properly care for the various
branches already in vigorous operation"
The serious defects In keeping account of
the money order transactions OF the coun-
try were dwelt upon by Mr.. Castle in his
annual report for 1901 in about as vigorous
language as one could employ. 'At least
$4,000. 900 money order funds" said he, ARE,
by the present accounting system, at ali
times nomfnally in the hands OF postmas-
tiers unaccounted for. The postmaster who
sells money orders transmits to this office
his report OF such sales weekly, semi
monthly. or monthly. as the case may be.
These reports are necessarily held here for
period averaging Ave months before the
money orders which constitute vouchers
verifying the amount OF the postmasters
receipts can be assembled from all parts of
numbers, and then checked against the re-
port. Not until all this time has elapsed
and all this work has been done can we
ascertain whether the postmaster has ac-
Meanwhile. there Is abundant oppor-
tunity to the dishonest for heavy embez-
elements. which. In fact. are constantly
carried on successfully in this loose man.
ner. An additional safeguard would con-
sist In requiring each postmaster to send
IN brief his cash receipts from the sale OF
money orders during that day and his dis
position 5s bsr OF b, the o sane These statements
as soon as possible by the regular report
sent In
WOULD RESTRICT DISHONESTY.
while this would not be perfect pro-
lection against loss. IL would be a long
step In that direction, since IL would un-
questionably have a restrictive influence
on dishonest officials. II would enable this
ONCE TO detect fraudulent variations be-
tween the daily statements and subsequent
fun reports, and IL would be otherwise
beneficial to the service. A large additional
force would ne required TO properly re-
ceive. enter and verify these statements
but the government. having engaged in
this business, owes to itself the adoption
or every possible precaution."
Again last year Mr.. Castle emphasized
stu another defect In the present system
the oid-time plan OF reviewing all the work
having been abandoned. On this point he
said:
In the earlier history OF this bureau the
practice prevailed OF reviewing substantial
ly all the work In order that the highest
degree or accuracy might be attained in
the settlement OF postal accounts AS time
advanced. while the postal service ramified
ly Increased I'm the volume OF its fiscal
operations, this review was more and more
restricted Within recent years N was
largely abandoned. and when the present
auditor entered upon the discharge of his
duties IN 1877 review existed only in the
bookkeeping and pay divisions.
here the magnitude or the interests In
volved, the enormous collection OF reve-
nue. from the sale OF postage stamps ETC.
and the large payment for clerk hire rent
light and fuel. free delivery service. rail.
way mail service. payments to railway and
other contractors for carrying the mails
with tne LIABILITY TO error involving large
who were In default. had seemed TO REQUIRE
q reaudit or substantially all the settle
ments made IN the pay division and ALI the
settlements or paymasters' accounts in the
bookkeeping division In which difYerences
were found In the other divisions a re-
was Immediately impressed upon the mind
or the auditor but the clerical force wa a
limited as to utterly preclude ire aarIy
Introduction The business OF the hursa1,
was rapidly expanding, while the numher ~
helpers Increased very slowly and the en-