Newark evening star and Newark advertiser., 1912-12-13
SAYS WATER DEPT.
AUDIT IS NOT FAIR
Sherrerd Differs With Experts
and viii Go Over Books
Himself.
DENMAN SAYS REPORT HAS
y MADE FALSE IMPRESSIO
Chief Engineer and conmis-
sioner Declare Account
ing Deficient.


The appearance of the experts of
the firm of Price. waterhouse & Co.,
who audited the books of the water
department, before the Board of
Works yesterday and their explana-
tion of how they had arrived at q
deficit Of $27S,431.41, failed to satisfy
home of the members. of that body,
and as a result it was decided that
Chief Engineer Morris r. Sherrerd
60 over the figures with the experts
The deficit, which has caused con-
siderable discussion in all circles, was
also mentioned in Chief Justice Gum
mere's charge to the present grand
inquest and will be investigated by
them.
After ]. e. Sterret, head of the
auditing firm, and William Allan, the
expert who made the audit, had gone
over the figures, Chief Engineer
Sherrerd and Commissioner Denman,
who is in charge of the water de-
fpartment. were still unconvinoed, and
the commissioner expressed satisfac-
ton that the chief justice had or
dered the grand jury to probe the
matter because he said it was his be-
lief that the report had been prepared
with view to giving a false impress
sion.
Just where the deficit lies was sim
plified somewhat when Mr.. Sterret
stated that it was involved in deduc-
tion made for depreciation, amount
ing to $1,656,9S6, on the liability side
OF the balance sheet of the report.
The question also arose as to whether
sinking fund payments should not
have been credited as an asset of the
department since they appeared as an
asset on the separate audit of the
8 city.
Mr.. Sherrerd showed that since the
items of $2,381, ,0S047, as value of the
building and reservoirs of the water
department, and $2,2S2, ,620.4S, had been
carried. the depreciation figure should
have been added. Mr.. Sterret started
to explain that the figures represented
full values from which allowance had
not been made for depreciation. but
Mr.. Allan corrected him by stating
that they were net. Mr. Sherrerd in
sisted that credit should be given for
the amount but the experts did not
share his opinion in the matter
Objection was also made to the de-
duction from the general surplus ac-
count of s265,000 for bonds issued
prior to January l, 1892 Mr.. Sherrerd
and Commissioner Mungle wanted to
know where the experts found these
bonds. No one else could find them.
they declared. The experts stated
that the bonds were not carried on
the books until 1899, and Mr.. Allan.
offered to show the chief engineer
the entry of the bonds on the bureau
books Commissioner Dennan ayerred
that the bond issue had been paid Off
Mr.. Sherrerd recalled that the bonds
We're issued against the tax levy and
perhaps were not taken care OF by
the department direct.
The entire report was characterized
as unfair" by Mr.. Sherrerd and
Mr. Denman commented that it was
wholly deficient and did not clearly
state the condition of affairs. Using
the experts own terms from the re-
ports MIR. Denman sought to show
that they were not specific.
AS authority for the carrying of
water properties at their full values
rather than less depreciation on the
asset side, Mr.. Sterret quoted from
the uniform accounting system pre-
seribed by the Public Utilities Com
mission for water departments which
system the board was notified to
adopt, When it was apparent that
no decision would be arrived at the
motion to have the chief engineer go
over the accounts with the experts
and report at the next meeting of tho
board was carried.
A delegation from the Clinton Hill
Improvement Association appeared
before the commissioners to protest
against the awarding of the garbage
contract for more than a year. Com
missioner Kraemer informed the dele
cation that three-year contract
had been specified merely to invite
competitive bidding.
The South Broad street merchants
whose bond for the lighting contract
was due yesterday were given an ex-
tension of time till after the holi-
Gays.