The Bridgeport times and evening farmer., 1921-05-11
Chapter Three
 Gives Insight
 ToCity Finances

Chapter of LiIrs study and report or the City of Bridgeport follows. It | IS of greater length than the previous l 1nstalments, and the facts relative to | the financial affairs of the city are Shown in two main statements sup l ported by other extensive data neces- l sary to proper understanding. Sev- | era1 tables and charts are incorpor- l ated in the report, and afford an 1 condition of the municipal finances. 1 The chapter follows:
 It is now the established custom, l Tn presenting reports relating to the
 financial affairs of business enter prises to show the facts in two main l statements which are supplement ted
 by such supporting schedule or other l data as is necessary to afford a | proper understanding of the items 1n- | corporated therein.
 l One statement, called the operat- 1 ing statement. is a history of the | financial transactions which have oc- | cured during the past. It may be | for a month, three months, a year or ! a number of years. but is usually prepared for fiscal year.
 The other statement, called a bal | ance sheet, is a taking of~stock, so to speak, at given period of time. If | properly prepared it should show everything owned by the city on one | side and everything owed by the city on the other.
 The business of government re- quires third statement which deals l with the future. If properly prepared
 it shows what is proposed to be ex- pended in the future and how the city proposes to raise the money therefor. | This statement I have called the
 statement of condition of the annual | estimate of receipts and expendi- 1 lures.
 | On account Of he number of trans | actions involved, separate state ment has been prepared of the sur 1 plus account. This is usually a part ! of the operating statement. l Detailed comment regarding the composition of these statements and
 of particular items therein is re- served for Part of this report Only such general comment is included l here as is necessary to explain the
 most important aspects of the city | finances.
 The Past.
 The results of operations for the period from April l, 1920, to Decen- Der 31, 1920, are presented in the statements of operations. The trans l actions occurring during this period which do not affect the operating re- suits for the period are shown in the surplus account.
 The operating statement shows the | revenues that are accrued and from what sources the amount expended
  To avoid misunderstanding, atten- ton is invited to the fact that rev. enueS are entirely different from cash receipts The term revenue" is used cepted meaning and represents the income accruing to the City from taxes, licenses and miscellaneous other sources during the period stat ed, irrespective of the period in which the cash is collected.
 Operating expenses represent the ordinary expenses of running the City as distinguished from expenditures made for capital outlay. Operating expenses, as used in this statement, represent the cost of administration, operating and maintenance incurred during the period stated, irrespective of the date of payment
 The operating surplus of S2.975,- 446-72 represents the excess of rev. ming the City. The deductions from this amount shown in the operating statement are self-explanatory.
 It is quite apparent that the final figure shown on this statement rep resening the excess of operating rev. enues over all charges against rev. enues, amounting to $121. .s01.07, will be turned into an operating deficit on April 1. 1921
 The surplus account represents items taken into consideration which
 do not affect the results of operations for the nine months period covered by the report
 Attention is invited to the fact that the deficit on April 1, 1920, shown by the Auditors books. amounting to $9, ,456, ,343.14, is converted into a sur plus of S10,790,49o.9S on January 1, 1921, principally through the inclu- sion in the balance sheet Of items not shown on the Auditors books The manner in which this is brought about is fully explained by the tranSaclonS reported in the surplus account.
 THE PRESENT.
 The balance sheet is statement of what the city owned and what it owed at December 31, 1920. No such statement as is presented herewith has ever been prepared in connection with the city affairs, notwithstanding the fact that practically every cor poratfon and business man in Bridge port prepares such a statement of his own business or has it prepared for him by public accountants In agreeing to make a study of the financial condition of the City of Brid geport, it was understood that an audit of the books and accounts was not to be made, but I believe that the balance sheet presented herewith rep resents approximately the financial condition of the City as of the date mentioned.
 Petty cash, City Savings Bank cash, Connecticut Bank stock, and land, structures. Other improvenfen nts and equipment were not recorded upon the books of the auditor. Likewise, on the liability side of the balance sheet, the accounts payable as at Jan uary l. 1921 were not recorded on the books of the auditor.
 OPERATING STATEMENT APR Operating