The Bridgeport times and evening farmer., 1921-08-31
SHOULD CHANGE PROCEDURE
 OF AUDlTS


 perate organization of Bridgeport is changed, there can and shouid De d material improvement in the acc counting and auditing procedure or the City.
 The Charter-Section 110-pro- vides that correct accounts shall De | kept under the supervision of the City Auditor of all receipts and ex- Districts constituted by Section during each fiscal year and proper | books of accounts arranged in sucn | manner and under such heads or accurately and completely the finan- cial condition of the several depart ments of the City Government"
 It is plainly evident that this Charter revision, in the light of mod | ern standards of accounting, is en- tirely obsolete. To show accurately ment of the City Government by re- cording only the receipts and eXpen- | ditutres thereof is an inpossibiity:
 Any fairly 1arge-slzed corporation receipt and cash disbursement basis would probably go bankrupt within short time. Correct accounts, of course, must be kept of cash receipts and disburse- ments, but such accounts are subor- dinate to the general accounts now required by modern standards. The accounting system of the City of Bridgeport might possibly be suit able for a town containing 800 or 1000 inhabitants, but is entirely Gdd n1o uno spending $s,000,000 year. | The following extract from the Report of the United States Bureau | of the Census on the Financial Statis- | tics of Cities for the year 1918 is pertinent to the situation in Bridge port:
 1 ''Antiquated and Diverse Methods of Classifying Revenues and Govern mental Costs or Receipts and Pay ments.-Many of the smaller and some of the larger American cities still employ methods of accounting l that were adopted before the bus | mess world generally introduced rev. enue and expense accounts to meas ure the results or outcome of finan- l cial transactions. Their accounts are | what are known in the commercial | world as cash accounts, or accounts l with cash receipts and payments. | ''They do not classify receipts with | reference to revenue; nor do they | classify payments with reference to II governmental costs, or to the costs
 of functional or departmental acttvi- Il ties"
 II The principal defects in the present
 system of accounting are as follows; | Although expenses are the only Uring the costs in government or the | functions thereof as to years or l months, and although expenses must be ascertained before unit costs can
  | accounting in the Auditors office. Il 2.-No accounting is made for the fixed assets of the City. The assets
 acquired during ecah fiscal year are II charged off to Surplus Account at the ! end of the year.
 Ii s.-The Auditor has absolutely no information to the current liabili- | ties of the City from month to month. II 4.-The Auditor is afforded no in II formation that a purchase order has
 been issued a liability incurred un-
 til he receives the voucher stating II chased and delivered In fact many such deliveries may have been con-
 stunned before the Auditor knows any
 orders are received by the Auditor II when the orders are placed, he is
 unable to protect himself or other
 City officials the public by prevent ing the appropriations from being | over encountered.
 | 5.-In ad ddition to the lack of advice regarding purchase orders, there Is a failure in the Auditors office to make | a proper record and charge appro- l priations for contracts entered into. i 6.-Accounts pretaining to revenue | are also maintained upon a cash basis. This means that the Auditor as chief no cognizance of the receipts until
 they are actually collected
 No accounting for stores is
 Materials and supplies purchased are charged to the accounts for the month in which paid, rather than being charged against the proper depart 1 ment when consumed.
 | S.-The Auditor is unable to pro duce from his accounts, either month l ly or yearly, a complete balance sheet
 of the assets and liabilities of the
 City.
 II It is, perhaps not surprising that in
 view of the Charter provision relating
 to the kind of accounts to be kept: Al I, ir1 hn n Bridgeport should be so antiquated and promotive-
 The procedure as it was during the
 period of my examination was as fol- | lows:
 All bills for materials and supplies i purchased and services rendered, 1 other than regular salaries and wages
 which are paid upon a pay ro1L are | forwarded by the various Depart
 ments of the City Government to the | City Auditors office, usually once each
 month, three or four days before the
 meeting of the Finance Committee
 of the Common Council which is us
 ually held some time after the 1f-
 teenth of the month.
 Bills received are put in plain
 jackets and the name of the appro-
 priation to be charged with the ex-
 penditure is stated on the outside of
 the voucher. It is due to say, how
 ever, that the employees of the audi tors office exercise considerable care
 in the time at their disposal in check ing the mathematical accuracy of the
 vouchers before submitting them to the finance committee.
 The finance committee of the Com mon Council examines or is supposed to examine each voucher, although
 due to the number and the limited time in which to do the work the exa nSnation is necessarily very per functory.
 As vouchers are passed, they are
 stamped with a rubber stamp. After the vouchers are jacketed and brief ed, they are listed upon a schedule and after action by the finance com mittee are presented at the next meeting of the City Council which approves the payment of the bills { without further examination, upon report of the city clerk that the com mittee has recommended payment ' thereof
 After action by the Common Coun-