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CORPORATION ACCOUNTS.

A statutory meeting of the City Council was held last night for the purpose of considering the Corporation accounts. The following letter was received from Mr Catkin, Audit Office, Wellington Wellington, June 28,

I have the honor to acknowledge the receipt of your letter of the 11th inst., and, in reply to your second paragraph, to point out that there are two limits to the amount which the Council is permitted to overdraw. First, the overdralt must not exceed the ordinary revenue of the previous year. Secondly, the total liabilities, including the overdraft, must not exceed the ordinary revenue of the current y.ar. Your ordinary revenue, exoludve of Government grants, for 1888 was L 32.695105, and in 1889 it was L32,79119s 7d. Your overdraft on the general account on 31st March, 1889, was L 38,368 lls Bd, or, increased by tho excess of the transfer from the gas account, which was clearly illegal, L 39.297 Os 3d. This total largely exceeds the first limit. As to the second limit, the liabilities on the general acc unt were L 38.733 2s 7d, which also largely exceeds the ordinary revenue shown above. I beg to enclose the statement of assets and liabilities, which I have certified.

The Town Clerk read the following report Tho Auditor-General, in his letter of the 28th ult. on completion of the audit, states that the Council’s revenue on the general account for 1889 being L 32.791 19s 7d, and the overdraft and liabilities L 38.733 2s 7<l, tho latter is consequently L6,9113s iu excess of the limit allowed by law. This result Is obtained by treating the municipal (or general) account as distinct and separate from tho accounts in resptob to gas and water. Treating, as tie Council is advised, tho Corporation accounts as one account, tho revenue for 1889 was L 38.549 Gs Id, and tho overdraft and liabilities together were L 37.022 5s lOd, or LI 477 0a 3d within the legal limits. According to the Municipal Corporations Act, 1886, the several accounts must bo treated as one—viz, tho borough fund account. The whole of the receipts of the Council, from whatever source, form together the borough fund, and these are to be paid into one account, to be called “ the borough fund account.” The Act does not contemplate the keeping of separate bank recounts. It is iu its owu books that the Council should keep the amounts aspirate. There is, however, nothing incorrect or irregular in the mode of three bank accounts adopted by the Council for convenience, but the several accounts must all bo treated as the borough fund account. In estimating the revenue, firing the limit of overdraft and liabilities, tho part of the income derived from tbe sale ef gas is deemed a sepaiate rate and excluded by tie Act. The part, however, derivable from the sale of residual products, and all other sources other than from the sale of gas, form part of revenue, and can be reckoned in estimating the Council’s power to borrow by way of overdraft. In like manner the rates and income derived from the sale of water are not included, but revenue derived from other than these sources fall to bo reckoned in estimating the power to borrow. As regards the indebtedness to the bank upon overdraft, the Corporation, in considering the extent to which it may overdraw, is entitled to treat the whole cf the accounts as one account. Consequently any credit balances to the water or gas accounts may bo reckoned in reduction of the liabilities in respect to tbe other accounts, and the net balance of the overdraft on these accounts treated as the overdraft for tho time being. The Council’s overdraft for 1889 was L33.33512s 3d, or nearly LI,OOO less than the previous year, so that its financial position lias improved.— A. Gibson, Town Clerk.

Cr Kimbeu, said that as the balance-sheet had only recently been placed in tho hands of the councillors, he would move—“ That this meeting be adjourned for a fortnight.” Councillors would in the meantime have an opportunity of looking into the accounts, Cr Barron seconded. Cr Cbamonu moved as an amendment—- “ That tho balance-sheet be adopted.” There being no seconder to the amendment, the Mayor put the motion, which was carried.

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Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/ESD18890711.2.38

Bibliographic details

CORPORATION ACCOUNTS., Evening Star, Issue 7956, 11 July 1889

Word Count
717

CORPORATION ACCOUNTS. Evening Star, Issue 7956, 11 July 1889

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