ABSTRACT
Charles Darwin's account of the evolution of life upon this globe from the lowest form is very interesting. Equally interesting to an accountant is the evolution of a Municipal Balance Sheet. As we follow the tiny rivulet up to its source, we come amongst the shallows and intricacies of Roman numerals. Even in the year 1835, Parliamentary knowledge and the practice of the Corporations had not got beyond the simple “toffy-shop” methods of cash receipts and payments, and when in 1848 and 1858 there was engrafted the strong ruddy growth of the Local Boards with their Governmental audit, the Government of the day considered a simple cash account sufficient. The demand for water in our large cities was the first vigorous outgrowth towards the immense trade undertakings which Corporations have developed in recent years. A large number of the smaller boroughs were formerly Local Boards, and their accounts were kept under the strict surveillance of District Auditors, most of whom were solicitors and barristers, and not trained accountants, while even in Parliament itself an accountant was rara avis in terris. These District Auditors were most stringent in their determination not to approve of any commercial balance sheet or to sign the same as auditors. Many of our Municipal Accountants and Treasurers were educated in this school. Is it, therefore, any wonder that some of them cannot yet throw off the shackles of receipts and payments? When, in 1864, I succeeded a practical accountant (Mr. Henry Edge, of Blackburn) as Clerk to the Accrington Local Board, the District Auditor gave me no peace until I had changed from Mr. Edge's system of Income and Expenditure to the Poor Law Board's system of Receipts and Payments. He punished my Board with vexatious and trivial surcharges, until at last they gave up in disgust, and let him have his own way with their accounts. When, however, an Urban District Council obtains a charter of incorporation, it is at once free from this “Chinese Boot,” and can adopt any improved system. I am, therefore, surprised in looking through the Abstracts of Accounts of other Corporations to find from 15 to 20 Borough Accountants who still adhere to this antiquated method in the teeth of the strong recommendation of our Treasurers' Institute to change their system to Income and Expenditure. No wonder that Mr. Burdett, in his “Official Intelligence,” 1895, writes scornfully:—“The “various Corporations display little desire to agree amongst “themselves, a fact which is proved by the circumstance that “even the primary question—of Receipts and Payments, as “against Income and Expenditure—is not yet cleared up.” Since the year 1860, however, many of the large Corporations have become purchasers of their own Gas Works, and, fortunately for accurate book-keeping, it is impossible to keep Gas Works' Accounts correctly except as Revenue Accounts on Income and Expenditure lines. From this time, therefore, accountancy on scientific principles received a marked impulse.
