The Bismarck tribune., 1921-12-13
STATE CANNOT
MAKE MILL PAY
SAY AUDITORS
Equitable Audit Company Re-
ported to Industrial Commits
sion Success Impracticable
BASED ON INVESTIGATION
-
Difficulty of Reconciling Ac-
counts of Mill Manager
Are Found

The Industrial Commission as for
merly constituted by Lynn j. Frazier,
William Lemke and John N. Hagan
was advised by the auditing firm 1t en-
plOyed to audit the accounts OF the
Drake mill, that the mill should be
sold.
1T is our, opinion that the only
manner in which this property can
be operated is through an ownership
of some individual who will place it
back in line with small country mills
doing a general grinding business,
grinding feed and handling side lines
of coal, etc. says a report submitted
by the Equitable Audit Company.
"rhese small mills usually pay when
operated in this manner by someone
giving his day and night attention to
it along these lines
This is the recommendation of NJ.
w. Thatcher, president Of the audit
company, in report submitted in NO.
vember after a check-up Of the busl-
ness of the Drake mill for a period
from October Is to October 81, which
followed an audit up to October Is.
The letter Of transmittal with the
audit figures is undated. The first
audit report was made public yester-
day.
The auditing company further says
that: BASED on our previous audit
report to you and as result Of fig
ures learned in this investigation we
can state that 1t Is. our opinion both
from standpoint Of the results OBJ
tained and shown in our previous
audits and this statement. together
with the experience of the actual
operating of the mill had by the au-
thor of this statement, that the Drake
mill should be closed and sold and no
longer operated by the state"
Accounts Tangled2
Accounts Of the Drake mill have
been muddled in handling, according
to the audit company's report. 1t de-
clares that its audit report for the
period of October is to October 81
lacks weight because information CIV
en- it b F. ]. German, local manager
of the mill, are obviously incorrect.
With respect to it's previously detail
ed lengthy audit covering the period
from April 27 to Oct. Is the audit
company holds it's report to be only
approximately correct"
Discussing reports. submitted for
audit by the manager of the Drake
mill the audit company report says:
'The statement submitted for our
investigation is obviously grossly in
correct and in the absence Of manu-
featuring reports as to -four and
feed, ETC., wheat used, and further,
due to, lack Information as to the
kinds, quality and the size, and
amounts of production sales, we are
unable to give any further informa-
ton than previously recited.
I'VE have however, been able to
set up schedules and results that show
to you that from his own figures, our
report as at October 18th, 1921 IS
approximately correct and that the
only changes that could be used to ef-
feet any change in our statement,
would be to the extent that any Of the
October 18th inventories were not cor
rectly stated.
"This latter feature is a most i'm
probable situation because our state
ment of statistics shows that by
weights and manufacturing percent
ages the figures we did use have been
very nearly correct.
"The only further information that
could be given on this subject would
be as the result of a detailed audit Of
the last 16 days"
Disagree on Figures.
This report of the audit company
shows great difference between the
figures arrived at by the local mana
ger of the mill and the auditing COM
pany, the latter asserting the mana.
gers figures are obviously incorrect.
The manager claimed a profit fol
the mill in 16 days of $6,12531 but
the auditing company says that "b!
the best reasoning possible and CIV
ing much benefit to the mill, we have
shown in the above combinations ar
= over-stated amount of 100000, which
would leave the mill with profit FOL
16 davs of $1,129.31" The audit re
port then proceeds to state that these
figures are unreliable without furthe1
Investigation.
In referring to it's October 18th re
mort the audit company says to tn
Industrial Commission:
"The manner in which the account
ore stated renresents a rather incom
rrehensivo ntatement but II is neces
enrilv set forth in this manner in or
der to follow his (Gorman's) arrange
ment of figures for the purpose of re
cc~o;'a-,ont /"
Vt calls attention tn a possible diff
Ecu,tv IN the part of the commission
j., trocirr some 6rures. saving "Yo
NAV havn some difficulty in lOcatin