FULL REPORT

Reform of Municipal Accounting	April 24, 1936

Report Outline
The Basic Importance of Municipal Accounts
Movement for Improved City Accounting
Accounting as the Basis of the Budget
Reporting of Municipal Finances
Audits of Municipal Accounts
Small City Accounting: Machines and Personnel
Special Focus

The tool of good administration is good accounting. Where poor accounting methods are employed by city governments waste and inefficiency are inevitable, and corruption—discovered or undiscovered—is an all too frequent result. Good accounting and good financial reporting to the citizens of the community can be made to contribute to the solution of a wide range of city problems.

In the preparation of the following report, Mr. Chatters has been guided by an outline designed to bring out the information that will be of greatest use to American newspapers in dealing with this subject. As executive director of the Municipal Finance Officers' Association of the United States and Canada, and as one who has had extensive practical experience in assisting cities with their accounting problems, Mr. Chatters writes with authority. He freely expresses his convictions and makes specific recommendations for improvement in municipal accounting and financial reporting.

The Basic Importance of Municipal Accounts

Adequate accounting has long been recognized by business executives as basic to the successful operation of the modern corporation. It is no less essential to efficient conduct of the affairs of the modern municipality—although widely neglected by city administrators, and a subject of little interest to the general public. It took suicide by an official of the Detroit controller's office to arouse interest in that city's budgeting and accounting practices. Prior to that incident, there had been no public discussion of the city's accounting methods. Now the newspapers are demanding sweeping reforms and the Detroit News has suggested that the city appoint for a long term of years a controller with powers similar to those of the controller general of the United States. The drama of self-destruction is not always essential to emphasize the need for good accounting, but it often takes the theft of a few hundred thousand dollars in a big city, or the arrest of some minor official in a smaller community, to direct public attention to this basic requirement of honest and efficient city government.

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