Los Angeles herald., 1906-09-20
FINDS BOOKS IN
AWFUL MUDOLE
EXPERT ACCOUNTANT SAYS
NO SHORTAGE EXISTS
Man Engaged on Examining Affairs in
City Engineers office says sys-
tenn Is Very Nearly
Worthless

-------------
J. Henry Wood, the expert account
ant engaged TO go over the books OF
the city engineers department. yestet-
day rendered his report to the board
Of public works In this report Mr..
Wood declares he found many errors
of omission, but apparently none OF
commission. This Is "A great relief to
the friends of the late city engineer,
Harry Stafford, who feared that after
the expose of the overpayment on the
work of construction on the outfall
sewer to Stansbury a. Powell all might
not be right with his books
In his report Mr.. Wood says nothing
about this overpayment, as he was
not called upon to investigate how
much of the outfall sewer had been
completed.
The overpa yment OH this work was
due to the fact that the contract
ors had been paid for more than they
had done and this has no effect on the
city engineers office accounts. The
expert has found where Stansbury q
Powell were overpaid $1,000 through
duplication.
MIR. Wood s report is divided into two
sections-the first covering general
bookkeeping and the second contracts.
He reports that the audit disclosed
many errors and omissions, but no evil
dence of wiIlful dishonesty. The ir-
Irregularities are chargeable to lack
of systematic bookkeeping"
Finds Discrepancies
Section one deals with the general
cash bookkeeping and accounting de-
partment, as distinguished from the
details and payments affecting con-
tracts. 1t includes cash book, supply
journal payrolls, time book in general
ledgers, inspection registers, demand
records but not the contract records.
1t covers receipts and expenditures,
including engineers guaranty deposit
funds, inspection fees and all other re-
ceipts of this department. Mr.. Wood
states that there is no actual shortage
of cash funds, "but there is a discrep-
ancy between the cash book and the
balance called for by the city treasur-
er, and this is caused by bookkeeping
errors and omissions" He declares
that errors appear in almost every part
of the work and most of them are in
excusable and would not be tolerated
elsewhere.
Demands which have been issued
to contractors contain errors of amount
and of computation. The demand reg
lister contains errors and is not in bal
ance with auditor. The ledgers con-
in scope. Time certificates have been
over-issued or rather duplicated. Bills
for supplies are not always properly
o KID and in some instances have
been paid twice. This latter phase Of
irregularity is proof positive that the
system is weak and dangerous"
Safeguards Are Lacking
lie sizes the general situation up as
follows: Errors and omissions
abound; safeguards against errors and
irregularities are lacking, absence of an
intelligent system or even uniformity
of operations throughout the admins
tration and the bookkeeping depart
ments-no central or even individual
responsibility OH which to locate
blame.
"Tbe remedy les he says, lin COM
plete reorganization. The bookkeep-
ing and accounting for all departments
for the board of public works should
be concentrated into one bureau and
supervised by an audit department.
There are too many disjointed meth
ods in use
In regard to contracts Mr.. Wood
comments that no bills or reports of
engineers or inspectors and no verified
data, not even the city engineer S
memo reports are attached to copies
of demands No method of safeguard
ing against clerical errors or irregu-
larities is employed. No o KS as to
the correctness of extensions, footlngs.
etc, appear on the only evidence of
payments. No consecutive or numer-
cal record is kept of these demands,
hence there is no convenient means of
knowing the total expenditures, either
by contracts, funds or other classifi-
cations.
City interests Neglected
"You have no means of knowing pos
itivey what demands have been is
sued from this office. This suggests an
opportunity for serious irregularities.
a demand once issued and o KID passes
through to the city treasurer without
further effort to dispute its legiti-
macy. nor Is there any way that you
would discover such Irregularities ex-
cept by accident. You will readily see
that under such circumstances an aud
1t of your own imperfect record of
payments cannot be conclusive proof
Of actual payments.
Because of its importance, both in
amount and type. the error of $1,000 in
demand issued to Stansbury & Powell,
July rs. 1905, should receive special
mention. That such an error could
exist for more than year without
discovery aud almost without chance
Of discovery Is certainly a serious mat
ter and conclusive evidence that the
city's interests are not protected"
1t appears that on July TO- 1905, the
city owed Stansbury & Powell for eX
tras S30375O, but paid them $4O37 so,
and the smaller amount only was to-
tailed This overpayment went through
and was detected by Accountant Wood.
Books in Bad Condition
Mr.. Wood recommends that in view
of the large percentage of errors and
Irregularities discovered i'm the audit
Of contracts and I'm connection with the
fact that other branches of the ac-
counting discloses a similar condition,
an investigation be extended to cover
all the transactions OF the past two
or three years i'm each department now
under the control of the board of pub
lie works.
Mr.. Wood says further:
"Under tho head of city engineer $
guaranty deposit fund the city ensi-
neer's books showed siO7.O6 less than
the city treasurer's."
Mr.. Wood declares that the cash
book now IN use and I'm which so many
errors occur Is "A curious conglomera-
tion OF complicated entries, ADJUST
ments and memorandum balances ut