The Detroit times., 1911-06-21

FROM TIE SAME
To the Honorable the Common counch.
\ Gentlemen-rhe Deputy Controller.
who represented the city at the recem
convention OF the National Association
OF Comptrollers and Accounting ON
GERS. has made a report TO me In writ
ing on several points on which
| seemed TO this ofnce that the city
might be Interested. This report Is
OF. detail on which this office desired
\ Information and concerning which a
verbal report has been made.
18th. the written REPORT In question
matters OF general interest 10 the city
officials: 1 therefore request that your
Honorable Body may direct the same
TO be printed In the proceedings In
connection with this communication.
DAVID E. HErNEMAN.
Controller.
The following is the report which
| on motion was ordered printed In the
proceedings as requested by the Con-
] tIoller.
Hon. David K. Heineman. Controller.
! Detroit, Mich.
/ Sir--ln planning our attendance at
the Washington convention OF the Ma
Accounting Officers, Mr.. Bullock and
myself aimed 10 touch at as many
places where we could get informa-
b ton with regard to municipal methods
and accounting as was possible. We
\ did, In fact visit the offics or the
! Comptroller and Purchasing Agent IN
Pittsburg, the Auditors office OF the
1 District OF Columbia the statistical
| division of the Federal Bureau OF the
! Census dealing with uniform account
ing methods for cities. the Philadel-
phia Comptroller's office the New
! York Comptroller's office the Bureau
! or Municipal Research In New York
city. and the Auditors and Purchas-
each OF these places we We're shown
! the bookkeeping and accounting
methods.
At the Washington convention. also.
we were able to discuss matters par
| ticularly affecting our accounting with
| offcials from other cities than those
visited. In addition the discussion at
the sessions OF the convention was on
| topics affecting every city. and IL was
pleasing to note that the delegates
from other cities. after the reading or
| your paper upon the methods used by
Detroit In getting rid OF back taxes,
| expressed themselves as OF the opinion
\ that this city Is very fortunately stu
aed In this regard.
In seeking Information. my efforts
were directed particularly along these
lines: Cd Budget-making; CD Ac-
counting methods; tS) Methods OF pur-
chasing; CD Revenue; CD Tax collec-
| ton. Will take these up In order.
| Cd BUDGET MAKING. Detroit now
has budget which, In It's complete
litemization. is the superior OF that or
any city which we visited Our man
ner OF considering the estimates first
In Common Council and later In Boari
or Estimates, seems to give greater
publicity than obtains elsewhere. a
possible Improvement might be made
however by different division OF the
items. Al present the funds outside
OF those providing for debt service,
are divided into improvements and
Maintenance, improvements. properly
speaking. are permanent things which
Will endure for long term OF years
while Maintenance Is term which
hn HnV Hnn IN for
the operating cost OF the city for the
current year only. There Is a middle
class OF expenditures. such as furni-
which are expected to last more than
one year but which are not perma-
nent
division. therefore. of the budget
into improvements. OUTLAWS and Main
tenance would give a truer view to
the taxpayer OF the actual costs or
government
ing comprehensive plan OF the per-
manent improvements and certain out
lays which will be required during a
term OF years and then dividing these
so that a portion OF them will be in
cluded in the estimates each year
n Such policy should produce more
even tax rate. and. perhaps. result In
economies in the total cost OF such a
program OF expenditures.
CD ACCOUNTING METHODS. The
accounting methods OF the City OF De-
\
OF most other cities OF the approx
mate size or larger, and this would
seem TO be an advantage TO be re-
tanned. New York. for instance. has a
system so complex that II could not be
applied to the affairs of this NUM-
cipality without large increase In
force employed Cleveland also has
very efficient system. which is how
ever. copyrighted, and which would
require a larger force. 1t is doubtful
II any gain in efficiency proportionate
achieved by making any important
changes I'm system.
In some details improvements might
be advantageously made.
II (a) We now have but one CLASH
lcation OF balances remaining In any
fund. 1t might prove advantageous to
divide the balances into two classes
those in which the purpose of the ap-
preparation has been fulfilled and the
amount remaining Is a net balance;
and those In which the purpose OF the
appropriation has not been completed
and there are contracts or other COM
mtments outstanding, The ret ball
ances could be posted to balance ac-
count for each fund during the cur
rent year and transfers cleared
Through this balance account Instead
of balances being transferred from
lone account TO another. BY keeping
the net balances separate from other
balances the work OF the aldermen and
Iestimators would be aided at the time
lof considering the estimates.
I'd by some changes In keeping
the records of appropriations and rev.
lenue, the City of Detroit could issue
each year. In addition TO the present
form OF Controllers Annual Report.
a condensed report based upon the
forms OF the Census Bureau for uni
form reports. Such report would be
te6Sffy- comparable with the reports of
other cities using the federal forms
The Issuance OF a quarterly report
showing expenditures, revenue and
balances Is also matter for consid-
Ieration.l Some cities now issue such
statements for the information Of their
IcitiZens.
Co After the triplicate order sys-
tenn has been put In full effect, n fur
ther Improvement might be made by
having the departments transmit TO
the office Of the Controller eepies-eF-
advlces of all invoices received for
posting into a Liabilities Outstanding
Ledger IL would then be possible AT
the end OF any period TO give cor
rect statement OF Outstanding Liabil-
tiles and Contingent Outstanding Ii
abilities, the latter consisting OF or
ders and contracts on which invoices
had not been received
1 (d) number OF American cities
now present a balance sheet purport-
Ing to give the assets and liabilities
lof the municipality. The Philadelphia
balance Sheet was topic for con-
siderable discussion at the washing
ton convention and. after hearing this
discussion, 1 am convinced that such
a balance sheet when kept IN the
most approved form Is thing which
none but expert accountants can ua-
lAW - A. III.