New-York tribune., 1918-12-01
Better Audit Control Over
State Revenues Is Needed
State Controller Travis Points Out How Thousands of
Dollars Could Be Added to the State Income by
Supervising Collection of Revenue

The State Comptrolier's office exer-
ciSes complete check over the audit
of all expenditures, and in the follow
ing article Comptroller Eugene NJ.
Travis points out how thousands OF
dollars could be added TO the states
income each year from similar con-
troll over the collection of the mill
ions of dollars of revenue gathered
annually by ever five thousand different
state and local oflicials.l
One of the most striking develop
l1nents in state government during re-
cent years is its increasing cost This
climbing rate of public expenditures,
however, does not necessarily indicate
the existence of extravaganza, but
rather the growth of the states activi
ties. During. the last few years many
new functions. and eveal those per-
formed by the localities, have been
taken over by I've State. and this in
crease is thus, to q considerable de-
gree, due to a legitimate increase in the
states business.
These conditions in state disburse-
mcnts. however, have necessitated the
hnding of new sources of revenue,
and particularly more stringent check
upon the collection of that derived
from existing sources, ana it Is here
that great responsibility must be laid
upon the collecting authorities. In
other. words, the present srchaic and
grossly wasteful method sof allowing
approximately 5000 different state and
local divisions and agencies of gov-
ernment to collect over $S0,O0O 900 each
year of revenue unquestionably has
resulted in considerable loss in these
funds.
Duty TO Audit Revenues
Under the provisions of the state
finance law it is manifesty as much
the duty of the Controller to audit the
revenues of the state as we'll as the
expenditures. This must be partcu
larly apparent when it is realized that
Investigations have often shown that
Irregularities occur much more fire.
quently in the audit of revenues than
in expenditures of the states money.
In many respects the auditing of rev.
enues presents a much more cOmpli-
Gated procedure.
The millions of dollars of revenue, on
the other hand. are derived from great
variety OF sources and under most
distressing compleXity of laws fre-
quently changed. Moreover, the con-
stant creating of new departments has
so complicated affairs that even the
most competent official must be con-
stantly vgilant to keep pace with the
changing requirements. Although the
establishment of systematic audit of
revenue has been repeatedly urged, it
has always been attacked as a scheme
to increase political patronage
Many public officials who collect
these revenues are neither business
men nor accountants. This condition
is disclosed particularly in the work
of the municipal accounts bureau of
the State Controllers office, which is
in charge of the auditing of the
finances of Approximately 1900 NUM-
'cipalities throughout the state. While
the work of such examinations has dis
closed numerous cases of shortages and
defalcationS, 1t is only Just to point
out that most Of these have been the
result of careiessness and ignorance of
the proper laws and of accounting
methods rather than from deliberate
dishonesty.
Sources of Revenue
:, The State Controllers office collects
revenue from direct taxes and some Of
the so-called "indirect" or special ones
A large amount, however, is received
by other state and local officials
These moneys, however, in many in
stances are divided between the de-
partments and localities, and as to
their distribution the laws vary great
ly While no intimation is intended
that these are not faithfully admin
istered, the experience of many public
and private corporations which have
already adopted some system of audit
control, demonstrates that substantial
results have been obtained from the
use of this systematic check for out
weighing any additional cost.
Owing to the great diversity and ter
ritorial extent of the field of revenue,
it would not be feasible here to attempt
to give more than a general outline Of
system practical for the entire state.
This uniform classification of revenues
must be built up gradually, with spe-
cial regard TO particular subjects, but
based upon equable lines as a whole.
For example. take the. revenues under
licenses and concessions. The evi-
,denees of these privileges should be
issued serially. numbered and a record
kept by the. State Controller. Upon
audit, every license should be account
ed for and the receipts checked to
the license number.
A setting up of q system Of actual
g saccrual OF all classes of revenue be-
fore actual cash payment would not
be deemed practical at this time, as
this would require much elaboration
and duplication of work. However
some system of reports should be de-
vsed to afford a better check by phys
ical auditing. Reports should be re-
qured from all persons respons ible
for collecting revenues at frequent in
tervals whether any were received
or not. Again, reports should be made
in duplicate for both the State Treas
urer and Controller.
The state finance law charges the
Controller with the duty "to keep
audit and state all accounts in which
the state is interested and keep &C