Show Auditors Point i Way to Prevent City Fund Loss Declare re Present Methods Make Theft of Public Money Possible U URGE R G E MODERNIZATION Hit Antiquated Accounting System Now in Use Recommendations designed to stop financial losses in various cit city departments departments de de- and to put an end to loose accounting arc contained in a report of Salt Lakes Lake's bookkeeping and accounting accounting ac ac- ac count counting ng systems made by Vincent Casella cert certified public accountants and submitted to Mayor Louis Marcus Thursday Antiquated accounting methods in use in many municipal departments the thc report states make it possible for tor many to dip into public funds with little fear of detection Loose methods the accountants assert assert as as- sert exist in many departments in in- eluding the city treasurers treasurer's office Warm Springs municipal ha baths hs and Nibley park and Bonneville golf courses leaving an open path for or fraud and embezzlement Among the thc major recommendations ire are URGES NEW SYSTEM 1 Elimination o of the antiquated accounting system and the adoption of or modern business practices 2 Passing of oC an ordinance making illegal it-illegal t for anyone employed by the city ity to adopt substitute or alter any form orm or book of record used by the city ity until it has been referred to the elt city ity auditor 3 Centralization of all nIl municipal collection agencies under the supervision supervision super super- vision of the city treasurer particularly particularly arly all departments with offices in inthe inthe the he city and county building 4 Establishment of a more rigid check heck on receipts taken in at Warm Springs and Nible Nibley park and Bonne Bonne- yule ille golf courses 5 Passing of oC an ordinance pro- pro prohibiting prohibiting the city treasurer from draw draw- in jag ig any of the city's funds and limiting this authority to the city auditors auditor's of- of flee tice ce Carrying of bank accounts Inthe in he the name of Salt Lake City corporation corpora corpora- tion ion ra rather than in the name of or an individual as treasurer of ot the thc city 6 Administration o of the municipal budget so that expenditures remain within the bounds of the appropriations ions made 7 1 Recommendation that all m mMe mMe- te- te rials supplies and equipment be purchased pur pur- chased based through requisition on the purchasing puri pur- pur i chasing hasing agent who should obtain com com- c bids wherever possible SUGGESTS CONTROL COI 8 Adoption of a practical system of f control of expenditures In the thc auditors auditor's audi audi- tors tor's office and the thc adoption of methods meth- meth ds designed to eliminate keeping the many individual financial records now maintained by the major departments of f the city and also n a change in the preparation of vouchers and drawing of f warrants in payment of expendi expendi- tures ures That city ma may derive a maximum benefIt from n a revision of the thc account account- tag ing ng methods the report suggests that the le changes and improvements be bc made under the supervision and diree direction tion on of some competent individual who vho cannot be influenced by political or r personal prejudice The suggested improvements the report states will result in a substantial sub- sub financial saving and will establish es es- a system of internal check and control that w will reduce the possibility of fraud to a minimum Discussing the need for the revisions revisions re- re visions and improvements the report says ays The UThe problems of accounting for the many and varied transactions of a municipality as large as Salt Lake are re of paramount importance and should hould receive the most careful con con- Continued on Pare Pu Two O AUDITORS MAKE ACCOUNT STUDY Continued From Prom Pl I Pare One of each and every public official officio 1 A thought In the minds of many individuals has been that the business of the municipality is so decidedly different different dif dU dif dif- f ferent rent from the ordinary commercial or industrial enterprise as to prohibit the adoption and use of many modern business practices BELIEF ERRONEOUS This is entirely erroneous for we know from the experience of many municipalities that the adoption of business methods and appliances has hns resulted in a definite control o of budget appropriations and expenditures the harmonious adjustment of or financial ll problems and many other administrative tive improvements and economies The present methods in use have to a very large degree been beers the result result re reo sult of of ideas and n opinions of oC numerous incumbents in the various offices over overa a period of years Consequently in inthe inthe inthe the past many changes chanes have been made without due regard for coordination nation between the departments and the treasurer and auditor Although objections to changes will arise the report continues they should be made from the standpoint o of protection of the city's funds and to give a true financial history of the city at all times Pointing out that 13 municipal departments departments de de- dc- dc located in the city and county building are arc now directly receiving receiving re re- re- re money and issuing thousands o of departmental receipts each year the special auditors suggest that the collection be centralized in the city treasurers treasurer's office to reduce labor and expense and to eliminate the possibility ity of peculation Discussing the temptation that exists cx ex isis with the present system the report report report re re- re- re port says AIDS DISHONESTY Failure to Issue a receipt completely complete complete- ly balances the record and enables a dishonest to escape detec detec- tion In some departments we noted that different receipt books bearing separate numbers were being used simultaneously during the year This presents further opportunity for misappropriation misappropriation mis mis- appropriation as there is no assurance that all receipts have been remitted to the city treasurer Cash register tapes at Warm Springs and Nibley park and Bonne- Bonne yule golf courses should be accessible only to the city auditor the report says so that the receipts can be checked with the tape It also sug- sug ests that the auditor inspect all can can- tickets from front these enterprises and ind establish safeguards to prevent sale of tickets more than once In irs the past it has been customary for the treasurer to sign checks drawn on the city's funds in payment of Interest Interest in interest In- In terest coupons on special improvement improve improve- ment bonds the report says Moreover Moreover Moreover More over prior to the administration o oJ of J J. J Parley White it had been customary for the treasurer to draw checks on the funds of the city in any amount presumably for the purpose of or supplying supply supply- jag ing cash for payroll warrants Because of the treasury shortage which resulted from this practice over a period of 15 years the thi auditors recommend that the sole authority authority authority au au- au- au to draw warrants be given to the thc city auditors auditor's office URGE CENTRALIZATION To further centralize the work in irs inthe inthe the treasurers treasurer's office it is also suggested sug sug- that one be chosen to keep all financial records in the of of- of fice flee The report compliments City Cily Auditor Audi- Audi tor br or Samuel F F. Nicholls for his his' work in n attempting to keep departments from Tom overstepping the bounds of ot their budgets and also for improvements made in 1 accounting for receipt and disbursement of city funds The auditors also suggest that the preparation of vouchers and drawing of f warrants in the auditors auditor's office in payment of expenditures be changed At the present time the report says ays all vouchers arc drawn by the respective major departments and submitted to the auditor for payment During the course of our audit for the year ear 1931 we found that under the method then in irs use many separate vouchers had been drawn each month in n favor of each vendor with whom the he city docs does business This is unnecessary unnecessary un- un necessary and is a waste of time and effort The revised system of accounting ac- ac counting countin now in use requires the Issuance Issuance ance of only one voucher and one warrant variant for lor the total monthly invoices invoices In- In voices in favor o of each cach vendor and that hat all vouchers shall be issued by bythe bythe the he auditors auditor's office However we find ind that each department still continues continues con- con to issue its own vouchers BOOKS nOOKS A ANTIQUATED Antiquated accounting books used in n the auditors auditor's office also should be disposed of the report recommends and nd should be supplanted by loose- loose leaf eaf forms adapted for use of bookkeeping book- book keeping machines This also would result in irs a considerable saving it is pointed out With reference to the recommendations recommendations we cannot be too urgent in requesting the complete cooperation of f all members of the board o of city commissioners the auditors say Inthe in inthe the he report The city purchasing agent gent is appointed for the particular purpose o of purchasing all nil equipment materials and supplies of the city at athe atthe atthe the he best obtainable price Unless he receives the cooperation of all city officials and he is placed at t a decided disadvantage o and is not in n a position to function to the best o of ofis his is ability Other suggestions for chan changes es are arc Installation of uniform accounts receivable rc- rc ledgers in lieu of old-fash- old bill registers now no used adoption adoption tion on of uniform invoice forms by each department and standardization of departmental forms establishment of ofa a department of office supplies and purchase under direction of the purchasing pur pur- chasing hasing agent establishment of a central central cen- cen ral storeroom for materials and sup- sup piles pies ics installation of oC a property led ledger er erIn In n the auditors auditor's office in which all physical proper property owned by the city could be recorded SUGGESTS CASH BASIS Pointing out that there arc are delinquent delin- delin quent ch charges lr es in the records of the city ity sexton and city cemetery as well as in other departments the report suggests that all nIl departments rendering render render- in ing ng service be placed on a cash basis and nd that all charges be followed up until collection is made or until the items are arc charged off oft by the city com corn missioners Recommendation 1 is made that the tho city ity judge in police court keep a n record record rec- rec ord rd of fines imposed in addition to records kept b by the clerk to prevent possible misappropriation of funds The need for tor ion of or all eit city ity accounts is also stressed as a means of providing a basis for a corn com and comprehensive analysis at an any time In many cases the report points out the present classification fails to provide accurate information for the basis of the bud budget ct a condition condi condi- tion lion due largely to the lack of uniformity uni uni- in classifying the accounts which varied from year to year ear to such an extent that a comparison of expenditures between periods has been of l little value On motion of Mayor Marcus the re report report re- re por port was ordered filed by the city commission and the auditors paid as one-fourth one the annual cost of the special audit Another progress report is expected to tobe be submitted early in August |