privileges of any kind, have been requested to advise the Auditor of Receipts whenever any lease, or privilege, is entered into, cancelled or terminated, giving full particulars thereof, the correctness of which can be verified by the Auditor of Receipts. This information will prove of real value to the auditor's department and greatly extend its control over important revenues. In regard to rents of property owned by the city, these, in most cases, are being accrued monthly. The weakness here lies in the fact that the accruals are based upon returns received from the Collector of the City Revenues of the amounts collected or to be collected by himself. The collector of the city's revenues is the one officer from whom such information can be obtained. The control, therefore, is in his office and not in the auditing department. The Auditor of Receipts should have control over every item of rental in which the city is interested. He should be placed in a position to notify the Collector of the City Revenue of the amounts to be collected instead of the auditing department being notified by the collector, as at present. MUNICIPAL COST KEEPING. The work of installing competent machinery for Municipal Cost and Expense Accounts, as distinct from Appropriation Accounts, for the purpose of bringing the financial results of operating the city under direct accounting control and furnishing the basis for unit costs, has made comparatively slow progress. In November 1910, the Board of Estimate and Apportionment ordered the installation of such accounts as of January 1, 1911, and assigned the supervision to the Comptroller. Owing to the fact that Cost Accounting is based upon consumption and not expenditures-a new departure in the city's accounting methods-it was necessary to do a great amount of preliminary work for the formulation of ledgers, and supporting records. This work was placed by the Comptroller under the direction of the Bureau of Municipal Investigation and Statistics. A year before, this bureau, in conjunction with the Bureau of Municipal Research, had devised and installed provisional expense ledgers in the departments of Bellevue and Allied Hospitals, Health, Street Cleaning and Bridges. Fifteen other departments were asked to submit tentative classifications before February 15, 1911. Only eight responded. This work naturally must be commenced with very great care to avoid the necessity of revamping several times after installation. Owing to the lack of necessary help the bureau made little progress with the work and the development of the Expense Accounting System was transferred by the Comptroller to the Division of Expert Accounting on July 1, 1911. Since then it has been actively taken in hand and, although handicapped for the lack of accountants of ability and experience, it is now practically installed in the following twenty-two departments Departments of Street Cleaning, Fire, Docks and Ferries, Charities, Correction, Bridges, Health, Bellevue and Allied Hospitals; Departments of Parks for the Boroughs of Manhattan and Richmond, Brooklyn, Bronx and Queens; Presidents of the Boroughs of Manhattan, Brooklyn, Bronx, Queens and Richmond; and the Armory Board. It is hoped that the installation can be completed in the other large administrative departments within the next six months to record transactions from January 1, 1912. It is unnecessary to point out that it will be necessary to follow up this installation closely until the clerks in the department become thoroughly familiar with the procedure. The work of the Commission on Standardization, with its adjunct, the Standard Testing Laboratory, promises to be of immense service in connection with the unit costs developed by the expense and cost accounting system as well as in effecting the introduction of intelligent methods in the purchase of supplies. This Commission was established by a resolution introduced by the Comptroller in 1910 to formulate specifications under which the city's "supplies and materials could be most advantageously purchased." It worked under the personal direction of the Comptroller during 1910 and 1911 when, its success being assured, it was, at his request, turned over to the direction of the Board of Estimate and Apportionment. The commissioner's tabulation and analysis of the city's purchases for the year 1909 revealed a deplorable state of affairs. Utter lack of uniformity in the method of purchasing, together with wide variance in the prices paid for similar commodities, was disclosed. Some departments purchased commodities by "weight," others by "quantity" and others by "lots." It was thus difficult to make useful comparisons for the purpose of effecting savings. Such comparison of prices paid by the various departments and bureaus as could be made, however, demonstrated that enormous sums were annually wasted in the purchase of the city's supplies. The formulation of standard specifications for various classes of commodities, it is estimated, should save the city from 20 to 30 per cent. in the purchase of supplies. Standard samples for food stuffs, wherever necessary, are being used as a basis for the acceptance or rejection of deliveries. Systematic inspection of the offices of receiving agents of the various departments should ultimately lead to the exposure and elimination of any corrupt practices carried on by the vendors and connived at by dishonest employees. The eventual substitution of a Central Purchasing Bureau for the city, with effective methods of control, for the seventy-five existing bureaus, would carry this reform to its logical conclusion and is the ultimate aim. The work of the Standard Testing Laboratory, in connection with the work of the Standardization Commission, has already been fruitful of good results. For instance the city is no longer buying coal, but heat units tested by the laboratory. This alone resulted in a saving of about $200,000 in the city's coal bill last year. When the city is in possession of records showing the relative good and bad qualities of all materials purchased, the savings possible should be enormous. The laboratory will also be of great use to the city in furnishing technical data in connection with claims for damages against the city, etc. STANDARDIZATION OF WAGES AND SALARIES. Salaries and wages will cost the city about $96,000,000 this year, or over 50 per cent. of the total charge for operation, including some $50,000,000 for the debt service. This sum for wages and salaries covers those paid out of the proceeds of the sale of corporate stock as well as those paid out of the tax levy. Despite the excellent effects of the schedule segregation of salary and wage items in the budget, serious abuses continue to defeat the purpose of budget segregation, notably in the matter of increases of salaries. Two means are employed; the division of salaries where schedule vacancies exist among other employees, and the transfer of employees from the budget to corporate stock pay-rolls where they are given higher salaries, which automatically continue when the employees are restored to the budget rolls the following year. Lobbying and "log-rolling" for increases naturally produce inequalities in pay for similar service, with attendant discouragement among the deserving but unrewarded. The urgent necessity of standardizing salaries has long been recognized. A preliminary investigation conducted by the Bureau of Municipal Research, at the request of the city authorities, has recently resulted in an appropiation of $25,000 by the Board of Estimate and Apportionment to proceed with the actual work. This investigation demonstrated that it is in the city's pay-rolls that the old regime of favoritism is most strongly entrenched. The inequalities of pay for substantially the same quality of work were found to be as striking as the difference in prices for similar commodities found when the investigation which preceded the reform in the methods of purchasing supplies was made. In the clerical service comparisons of some 2,000 salaries showed a salary range of $300 to $2,100 in one grade where the same quality of work was performed; in another grade, from $600 to $2,400, and in a third grade from $1,200 to $4,000. The demoralizing effect of such inequalities in remuneration does not need to be emphasized. Some veritable sinecures are said still to exist in the city's pay-roll. Upon the basis of the facts already developed, the Bureau of Municipal Research estimates that the standardization of wages and salaries should save the city from $5,000,000 to $7,000,000 annually, and, at the same time, increase the efficiency of the service. The departmental estimates for 1913 carry salary and wage allowances for increases and added force amounting to $20,000,000. There is a strong feeling that increases of salaries and wages, which would become permanent charges against the city, should be postponed until the imporant readjustment involved in standardization is completed. The Comptroller advocates this course, and the Bureau of Municipal Research has requested the sub-committee to call the matter to the attention of the Chamber of Commerce. Accompanying the standardization of salaries and wages there should be a radical reform in the methods of recording the time of the city's laborers. The time-sheets at present do not give adequate control. FINANCIAL POSITION. One of the main objects aimed at by the new system of accounting is the preparation of a General Balance Sheet of the city. To this end a General Ledger was opened on January 1, 1910, with arbitrary balances pending the verification and adjustment of the accounts. Until this laborious work of reconciling balances is completed, it is recognized that this ledger will be of little real value. As a result of the work, a large sum has already been transferred to the General Fund for the Reduction of Taxation, but it is yet impossible to say how the final adjustment of open accounts will affect future tax levies. In the books of the Chamberlain and the Collector of City Revenue the sub-committee found many accounts, the final adjustment of which may become an additional charge on the budget. The books of the collector of city revenues, for instance, show amounts due the city for railroad franchises, street car license fees, etc., amounting to over $1,750,000, the greater portion of which will probably be uncollectable. Among the other accounts were the following: In the books of the Chamberlain are several large accounts for expenditures on improvements in excess of authorizations; for example, the following: New County Court House. General Park Fund.... Central Park Improvement Fund.. Tax Relief Fund.. Assessment Fund. Assessment Fund, Public Drive from 59th Street to $700,087 157,842 50,621 43,416 159,154 250,684 $1,361,804 It is manifestly undesirable that old accounts of the magnitude of those cited above should be carried on the books, and their speedy adjustment must be accomplished regardless of the effect upon the budget. There are many other controlling accounts of the General Ledger which have not yet been proved. The current transactions are kept in balance pending the work of adjusting the arbitrary balances. It is hoped to complete the work of reconciliation before the end of the current year, but as the period required to examine various accounts differs widely, it is impossible to predict when it will be completed. Much other information is required by the Department of Finance before it can present a true statement of the city's condition. Accurate records of the amounts owing to the city and owing by the city are not yet in its possession, but efforts are being made to procure this necessary data. The departments have been furnished with forms on which to make the necessary returns to the Department of Finance. While many of them have complied, others have failed to do so. The Collector of Assessments and Arrears reported that he carried dead assets amounting to almost $14,000,000 of arrears of assessments, some of them running back seventy-five years, against the property of the City of New York, assessments against charitable, religious and other exempt institutions, including cemeteries, and property of the state and federal governments. Upon analysis the Comptroller questioned the accuracy of these figures, and, with a view to clearing these items off the books, inaugurated a search of old titles to determine the exact extent to which the city had been assessing itself and exempt property. THE CITY'S PROPERTY. The setting up of a Balance Sheet and Proprietary Accounts for the city makes it necessary to determine in a comprehensive fashion what property the city owns. work. The Collector of the Bureau of Assessments and Arrears estimates that there are now about $20,000,000 worth of city property This also will entail an immense amount of in private use. In the various municipalities comprising the present City of New York it had been customary to vest title in various commissions, such as the Park Commission, Superintendent of the Poor, Board of Health, etc., and at consolidation the City of New York was without the necessary information to assert its ownership. Under the new tax lien law, such property was assessed and the liens sold for taxes, and it was only under foreclosure of the tax liens that the title ownership will not be uncovered. It is imperative that steps be taken to ascertain what real estate within its boundaries is actually vested in the city, or upon which it holds mortgages, having previously parted with the title. Information regarding city property is now widely scattered. and the Board of Education undertake to keep track of property within their jurisdiction. Action should be taken through the Sinking Fund Commission, to ascertain and establish this information in one central The Dock Department, the Department of Water Supply place. A systematic search would doubtless reveal many astonishing facts. Already it has been established that some of the old roads in use during the Dutch sovereignty, which were subsequently abandoned, are being treated as private property and it is known that warehouse buildings have been erected upon the city's waterfront rights. A determination of the property owned by the city also would enable it to dispose of property it does not require, like school and fire station sites which were never utilized, and which, unnecessary for the $400,000 worth of vacant city lots vested in the Borough of Brooklyn |