As a matter of fact, the foregoing is a report made from accounts

in actual operation.

Cost of Stabling and Feeding Horses

For the purpose of keeping account of the cost of maintaining horses it is desirable to have an analysis which will show the cost of forage, cost of supplies other than forage, and the cost of labor. It may also be desirable to have this stated, in terms of unit cost, per horse day, and the forage analyzed in terms of pounds per horse day.

Assuming that there are 23 stables in which horses are kept, and analysis was made of the cost of each, it would be desirable to report results, for administrative purposes, in some such manner as the following:

As a matter of fact, this is a monthly report which was prepared from accounts that had been successfully operated for years to show these results.

With a view to the effective exercise of administrative control over the cost of operation and maintenance of a filtration plant, it might be desirable to have an analysis which will show:

Supervision and general overhead

Prefiltration

Final filtration, etc.

Again, analysis might be carried further; for example, "final filtration " may be analyzed to show:

But this does not lay the foundation for unit costs. The elements must be still further analyzed to show, for the cost of "cleaning," the following:

Cleaning sand

Cleaning separators and injectors

Cleaning pipes and pressure lines
Miscellaneous

and these several elements of cleaning must be subanalyzed to such a point that definite units of cost may be established which may bu significant when used as standards for judgment with respect to the efficiency and economy with which the work is done. For example, the several operations of " cleaning sand" may be as follows:

Scraping into piles for ejectors

Scraping direct into ejectors

Scraping and piling sand

Ejecting into separators

Ejecting to court

Washing by separators

Washing in place

Raking

Raking after spading

Raking after flushing

Spading before washing by separators

Spading after washing by separators

Spading after flushing

Leveling, after washing by separators

Resanding from court

Connecting hose, etc. for washing sand
Disconnecting hose after washing sand

Repairing sand basins

Moving sand into and out of filters

laid for complete, up-to-date information that will enable the executive or administrative officer to put his finger on the points of weakness or waste from month to month and bring the whole operation up to the standard of efficiency that is desired. As a matter of fact, this analysis is being used in cost accounts that are now being operated.

Futility of Trying to Show Costs in Fund Accounts

To attempt to show data of this kind in appropriation accounts would be absurd. In the first place, appropriations could not be made in such manner as even to establish control over these cost data, unless the purpose of the appropriation account itself was destroyed. Again, it would be impossible to set up accurate data in appropriation accounts for the reason that the charges to cost are entirely different from the charges to appropriations.

Labor Cost Must Be Based on Time Analysis

Charges to cost must necessarily be made on a time analysis basis. Appropriations are charged with payroll. The individual may have worked in 50 different places or on jobs which affect 50 different accounts during the month. To attempt to charge labor distribution to appropriation accounts would put the administrator to an unnecessary cost for accounting or would cause him to force his accounts in order to avoid it. But there are also administrative difficulties which make it practically impossible. Assuming that a resolution is adopted through which the appropriating body may exercise control over the contracting relations for labor, the necessary approvals and certifications to vouchers chargeable against appropriations for labor would be practically prohibitive. But what is more to the point, it is wholly unnecessary, as a clear distinction is made between cost accounts and the appropriation accounts.

Material Cost Must Be Based on Use and Not on Purchases

When the subject of supplies and materials is approached, the problem becomes still more difficult. Appropriations are made for the purpose of providing funds to purchase materials and supplies. When the purchases are made they must be paid for. In large institutions purchases ordinarily go into stores in order that control may be exercised over the things which have been acquired pending their use, and furthermore, with a view to having on hand a stock sufficient to serve the working purposes of the institution and to enable the personnel to carry on the work without delay. If the charge is made against the appropriation when goods are purchased and go into Possibly certain general relations may be guessed at which approximate accuracy, but when an attempt is made to determine for which automobile particular gasoline, lubricating oil, grease, or other supplies, will be used, any attempt to analyze the purchase in this manner will reduce the cost accounting to a farce. The same is true of forage and other supplies for horses. While a calculation might be made on general average that would be very near the truth, this would not result in a cost account or give the administrator exact information necessary for knowing whether horses under one foreman were being more efficiently or economically kept than under another. The whole purpose of cost accounts is to provide exactness of detail in charges, so analyzed as to enable the officer or the public to measure results in terms of standards of efficiency and economy. This may go not only to measure of cost in terms of units but also to the ascertainment as to whether the cost is kept within the revenues. For example, for purposes of convenience, men who are working on mess projects some such information as the following may be desired:

It is patent that neither ean the purpose for which the supplies which are to be used be foreseen at the time they are purchased or put into stock, nor can the results of cost as against revenue returns be gained from appropriation accounts.

Accounts of Property and Stores

Accounts of custodianship, such as for property and stores, can have no point of agreement with appropriation accounts except the stores account, however. Even when considering the controlling account or total summary of all stores for a particular department, it would show stock on hand at the beginning of a period, amount acquired during the period, amount dispensed, or otherwise disposed of during the period, and balance on hand at the end of the period. Such a summary account, however, has no administrative importance other than for purposes of control through summary report. In a particular subdivision of the city, such as the department of water supply, gas and electricity, there may be a hundred or more different stores in which goods are placed when purchased and kept under custodianship until issued for use. The purchases for any one, or all, of these stores may be met from a single appropriation. Moreover, the exercise of control over the custodianship of stores requires that a separate account be kept with each kind of thing purchased. This is not only required for orderly storekeeping, but also as a means of taking inventory, making inspections, determining the unders and overs, and doing various other things incident to stores management, such as ascertaining whether stores are running low or whether the storekeeper has too much of a particular kind of stock on hand.

Nothing in Common With Fund Accounts

In considering the essential difference of both of these kinds of accounts (cost and stores) from appropriation accounts, attention is called to the resolution passed by the board of estimate and apportionment and made a condition attached to the budget of 1914 of the board of estimate and apportionment:

"The heads of departments shall submit to the department of finance on the first day of each month, or as soon thereafter as possible, a statement showing the amounts consumed the previous month chargeable against each supporting schedule line of appropriations" (Page xxi of Resolutions)

Present Resolution of Board Impossible to Execute

This resolution, on the face of it, is impossible of execution. Goods when issued from stores for consumption cannot be charged against appropriation schedules. The appropriation is to pay for "supplies" and other things purchased and taken into stores. Since the purchase voucher is so charged, it would be impossible to charge the appropriation account again when the goods are issued for consumption. Even though it might be conceived that the conditions attached to the act of appropriation were such that it could not be charged with the payment when made but with the issue from stores,