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Present Condition of Municipal Accounting

NCJ Number
Journal of Accountancy Volume: 6 Issue: 5 Dated: (May 1936) Pages: 376-385
A N Lorig
Date Published
10 pages
The nature of financial information needed by municipal governments is discussed, with emphasis on the need for uniformity and improved methods of accounting for municipalities.
Accounting for municipal governments differs considerably from that commonly practiced by private industry. Municipal governments' organization, services, methods of obtaining income, and policies determine the character of financial information needed. This in turn determines the type of accounting system required to supply the information. Financial information concerning municipal governments is needed by operating executives, chief executives, controllers, treasurers, council members, citizens, other governments, and creditors. Each group has specific information needs. Therefore, financial information should cover the financial condition of funds, the financial condition of appropriations, current operations, and other information used in budgeting. Additional information for cost accounting and miscellaneous information is also needed. Although enough similarity exists between the municipalities studied to cause their needs for financial information to be quite similar, their accounting systems are currently diverse. Moreover, many do not follow generally accepted accounting procedures. Data from these 13 cities with populations between 100,000 and 150,000 (1930 census figures) illustrate the lack of uniformity in accounting systems. Variations concern funds, treatment of capital expenditures, classifications within funds, and accounting bases. A model system of accounting for municipalities is needed.