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

Francis N. stacy's report on the con-
h dition of the permanent improvem emit re-.
yolving fund and the city's system of &C
count is a severe arraignment of the mu-
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. Mr.. Stacy
says that the bookkeeping Of 1903 is the
same as that of 1889. The revolving fund
which in 1887 was s1,150,000, has since
shrunk to s651,oO0 and hence is short
about $500 900. 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, Ss15,000 of new bonds,
100000 of which are to replen1sh' the
permanent Improvement revolving fund,
4 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-
intending 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
s. investor who buys these bonds and TO
the taxpayer who is to redeem them a.
H system of accounts which will preserve
and account for. the proceeds In busl-
ness-like manner.
Present Accounting Condition.
4.The resolution adopted by the city
council Jan. %, 1908, authorizing the IN
yestigation on which am engaged. states
as regards the condition OF the permanent
Improvement revolving fund: There is a
deficit Of $4,000
issues which to date amount In the ag-
gregate to s1,15O, 900 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 overdraft{ and debit balance
y of SIS, 23o61.
'.The fund has to it's credit however, an
asset amounting to about 100000 in spe-
y cial assessment installrnents not yet due
and som ewhere in the neighborhood OF
$4,000 in delinquent assessments; tnese
aggregate collectable assets amounting mol
to exceed S6500OO. ....
'sSince 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 Sooo,Oo0
This product of bad accounting mas al
fected the condition Of many other FUNDS
Detailed statistics upon this point will be
nresented in an appendix to this report
to be submitted at the next council meet
Ing, May %. /,
s,The special phase of the subject to bt
considered in this report IS the account
ing system responsible for the above 7ne
like shortages, and a practicable and 1easl
Bile method of strengthening that system
.aThe deficiencies Of the accounting sys
"a tenn in vogue in the department. OF CITY
controller were thoroly reviewed by a Tor
mer incumbent of that office. John r
Il Calderwood in his report for the yea
1889. Mr. Calderwood declared at tina
time that the bookkeeping Of this cit!
was not worthy Of being called a system
and that. it was not worthy OF any GU.
that had passed beyond the village stage
The Minneapolis bookkeeping system o
1889 is substantially that of 1903.
Meanwhile various prominent cities o
this country have brought about marke
reforms in municipal accounting; .Ne'
( York Boston. Baltimore. Buttalo Gam
bridge, Cleveland, Columbus. Detroit, ..
( Pani and Chicago being especially proml
nert in the successful accounting reform
I which they have evolved and put int
practice. a.. ~ 49, .,-
chicaao's New System.
II .parhans the most notable nunicips
accounting reform in modern times !
Il that of Chicago during the past two year
4 and still in progress. 1t is doubtful II an
city in the world has been perplexed wit
a worse financial tangle than tha'
I which Chicago found itself I"
Y years ago. The Merchants clu
az Chicago first took up the subject, an
H. thereupon the mayor, controller and CT
council addressed themselves to the sur
iect in thoro- going official acts. Hasklr
e. 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 fro
1871 down to date. The two contract
one to revise the special assessment sy'
tenn and one to provide a new accountlr
system for the various funds Of the cit
L called for an investment on the part
the city Of about $145, 900. The accoun
ing firm guaranteed a. net saving to tt
sstg city of $50. 900 per annurn in the cost
administration of the accounting syster
II The net saving Sin cost OF operation +
u the first year exceeded this guarante
II and amounted to $72, $50
\ .The opening of a corrected system
u accounts unearthed during this first ye
upwards Of $65O.OOO of revenue in tt
shape Of unsolicited special assessment
and something like 100000 of uncolec
ed licenses and miscellaneous revenue
Since the first of January, this year,
am informed by Auditor A. p. King of t
special assessment department., there ha
been unearthed and collected nearly $40(
900 moro of special assessments due t.
X city; making a total during the first We
and four months. of. nearly one and on
Ell half million dollars Of net revenue r