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07/23/1934�r ., , .. . __ -� , _ . �. . . . : , _ . . pr<_n .... .. . � � .. �- i . . . . . .. >r�,...,� � . . � i „ . . ._�. ._. � � , �r �+�, i" ;"� � ��V' . f . �� t .,. . .. .. � . . � . . . . � ., . � . � . . ,..a. .� � .. . r 'i. . . . . � . � . . . . . . .. .. .. . ._. . . . . . . . � ..� . .. . j-; � i�; �; M INU TES OF TH�, G � TY C �11�1Vr 3S S T ON ; . . � . � fi : � � . . � � �. .. . � . � . . . � � .. . . . . .. . � . . � � . . ,:;i. . " �. � July 23rd, I9��_�, � � ; � �', F ' The Cify Commission of the City o� Ciearv��ater, Flarida, _ � . .. � � . � . .. . � . . . .. . . . . . . � � . . .':.E . . . ;� met r�n the abov� date, in called meeting ass�mbled,{joint'meeting .; ; ,,, ��,` wi t� the Gham�er of Comrrierce ) with tY+e following �rembers' present : � . . . . . . . . . . . � � . . . . . . . � . � ...R . . . � � .. � � . . � . . ! . . . H. t�. Ba skin, P��yor-�orrimissioner, ` + � ; J. A.'B�rrg, ; : E, B. Ca�1.er, Jro, ; ; ; A. N. Dillard, , ; i � F.�ade Tilley � Report of rilr. Satterfiald, City Auditar & Glerk, on � the condition of the' books of the' Radio Station, was read, ; as fallo�vs • ; ; `i � . . � .. . . . . . . . � . . . . . � . .-�..k . � . . . . . . . . . . � . � � ��. i. . . July 23, �934. ; Hanor•ablF; Cit�r Commissioaer•s, i � City �%' Clearv�ate.r, Florida. ` ;t Gentlemen� Section 55 of tfie City Gharter provides that �he Ci�y � Auditor & Clerk ahall ann�a.alTg audit a1l accounts in which the ; , munici alit is 3nterested. U ta this uar no re uest fo-r infer- � P 3' P S� � q 1 mation conce�ning the radio station has ca,ne to me from any member 1 of the city commission, and I have therefore m�de no inspection �`; of t�e books' of �he sta�ian. After this question v�ras brought out i ; ata recent Commxssion meetin�,' r approac�ed Nir, Baskin, and v��as � , 'granted permission to -examine th� books of Ra3io Station 4�FLA � ; . . � .. � � . - , . . . . . . . . .. . . . . . . . � � . . . . .i � . . and the Florida b�lesi oast Broa�.c�stin� Comp3.z;�, I subsequer_tl.� i . C ;s spent �vro full weelis ��;.�mi:�in�� nthe books . y� It immedi:ate?� ecame appar•ent that no audit has ever � I ' bzen tnade of the bc� �� °: � tY�e station., that there was na balsnce # , to the books which I coald use for a s�arting point, az�d thst an � audi� of the book� wpuld' take� several weeks or months 'o� the time # :, I have av€�iZab��. I therefore submit for your consideration a` T f : �,�report of my inspscti�n of the recards. � � � . ' � . . f _ __ _--__._ ,.... . _ . _.. _ ._ _..._. _�..__. ...._.___�__.___:.._�_ ,� ; �.r ,:. , . - ..;> ,�� -...r.�..��,.�.. .�..� - _ � �" ' � � _, "`M t. . _ , ; � ,,, : i �� r�� _�� ° � t��: � � � � � � � �� c�� `' I submit no schedules of fzgures, because the conditi�n � . . . . . � . . ... . .. . . , . � ,:_k . . . . . r . . . . � � ., . . L� ; of the bool�s is �uch thaf; I could not certify to ?such schedules # . .� ' unle s s I�,u�c a�rea t dea 7. more � ime on them . � ?^Jith £ew exceptions, the inspec�ion has be�iz confinecZ i�a x 's �' the pe�iod st�bsequent ta J'anuary I, .932. ; 5 , l SCOPE QF INSPECTION; ,t _ , 1. Inspection of the various records was mads to determi.ne the i ;- m�nner in whi.ch they wer•e kept. ;, . . f � . . . . . . . . . � . . . . . . . . 2. Announcers � pr•oduc�;i�n sheets for th,e month of January, 19339 ; � werc checked to the individual, acco�nts receivable. Othez� spot i ;' checks �v��e made for �rarious dates. �, � 3. Amoun� 40 0 of the i:nriivs.dkal accounts receivable were back- i checked t� the casr, book. Only spot checks were mads as �o merchandise payments shawn on tY�e account� receivable. . . , . . . . . . . , k �' . . . . .. . . . . . . . ��a . . . . . 4. SezTeral attempts were msde, to balance c,nsh r•eceip�s os shown : in the cash recei.gts �aook, Vfith ba�:k deposits and deposits of cash � into petty cash� Bein� una�le ta s-�rike balanees, individual items ` were traced as far as possib7.e �ar several months. ; , � 5. Monthly repor•�s w�re inspected, an�: lt�r. tison was as�ed to ; i reconstruct one ?n�nth from the original records in. orc�.er to demon- � s strate the maiiner in which th� �i�;ures 6�ere arrived at. � � S. Analysis of expendi�ures �ay check and petty cash was znade fr-ont a January� I932, to datE. r a 7. Commission a•ccoun�s were sugerficiallg exam3ned and tetals � fi ,, p take�:. , 'i a ` RE�ULTS 0�' INSP�CTION: (1?aragraph numbers below correspond tb ` ,:� r trose a3ove,)' , € l. Books are s:in�le en'cry, Ther�e is no system of i.n`ter.nal check. # , No opening entries.were made, and there a.s no �eneral lEdger9 Va � control accoky,ts are ti�ep� and any ix�forntation desired must be taken �� , � , from a minute analysis af tre bool�s of or3�inal entry; Al1 records � . 1 � o� receipts areE` l��ept b;� Yr, Tisorxn Recorda vf disburser±men�s by � � s� Y cl�.eck were forme�rly kept by A+�r. Growley, and s ince September, 1933 � by Mr., Fair•cloth. .4pparently no attempt has ever been mad'e to tie the f , ' <' receip�s and disbur4emen�s together into any kind of accouni;in� � , sys tem . � � �,. _ _ . ..:_:. . .._ . �._ . �_ . ... . ,__.�_�_.._____.:� _�._:___.._:.--.-----..__._ ___:__ _ ._._. _._. _ ._ _._.. ,_ ..._ .__._� �___----- - _ _. . � . � . .. �. . . . . . . . . . . . . . . � . .. .t . � . ... . . . � , . . . . . . � . � . . . . . .� . � � . Y""Y ��r��rMr � . . .. . . � ` ,- � � t � ; ..��1`, , '=;� ` �� 3 � � � 'r _ , ; ; 2. The announcers productian sheet is a record of or�ginal. �� }. ;' entry. Postin�s are made fram it to indivicluaS acco�;�nts rece�v- �� y� t. abe2. Independent au.dit checkiz�g of these sheets j.s impossible ; ;:: '` Y�ecaus� the names of the' programs do not shovr on thezr face whether f � � �, � � �'~� they are commereial or sustainir_g. In eheckin� thesE sheets with �� t ; the � a:id of R�r. 'I'ison, the pra�rams vJhich hE; desi�nates as comme�c;�al �; ,,, � ,• appear to be reguJ.srly pasted to tre ind�uidual accaunts receivab��. '-�� ;F �. The individual accQunts receivable are kept in laase �.�;�.f �� ; �� ;� form. Debij�s are posted either frozn the annauncer�s production �; ;3 sheet or irom ori�inal cr�ntracts. Credi �s are poste�. from the dail;� `� � ,,. ; cash book9 vrhere cask�i: i� involved, or directlg to the individual �? account as an ori�inal enitr. y, �r�ere merchandise is involved. $ t . . . . . . . . . . .. . . . . . � . 1 ��t � . . , . . � � . . 1 :.'� . Concerning the mercYa3ndise credits, it is necessariy to re�y on i'� ,, the memory of �he statior� direc�or; as no r•ecord is kapt of what �� ,� merchandise KTas or v�rhere it wss usedw Certain merchandise �redit4 �; r ,� i{ have been charged a�sinst the commisaion accounts of �°ariaus s�lesmzr_, and N:r. �ison and M� . Baskin. Several items mark�d t'cash�` � ' '€ or "ck" in the accoui�ts rec�ivabZe, and not appearing in. the cash `� � baok �vere later found ta be merchandise credits a 4a Records of cash recei�#ts are kep� in an exceedin�ly awk-�vard � mr�raner. Checks received are entered in the cash bnok and deposi�ed, ; Pr:ithout apparent discrim3nation, in ti�e '�ank ac�count of ei�ther � � WFL.A or F. �l. C. B. Co., or 3n acco�nt known as the "capitsl Account". ` f Actual currency rec�ioed, though sometimes in lar�Q amount's, 3.s � seldom deposited in: the bank, but put into a petty cash box. IInti1 � ( Oc-tober 3, 1.932 , no rec'ord was kept of �t deposits or vrithc3.z�syvals `� in tlle petty cash box. Sinee thst time a"petty cash book�' has been ' � kept, and deposits in tk�e box are indicated, �vit�out indica�ing7� � � i the source. Deposits are made in Zump au�ns, �vrich can oly be traced , � . . . `�\' . . . . . . � . . �'. i . � to the cash receipts book by �rea�in� down the sums to individual +� � � , 3tems by trial and error. Several months were trace�. in th�.s ; F , msnner; ho��ver no balanee can be struck from the wri.tten recordp � because of nume�ous payrr�ents f'rom cssY: �eceived, as shown 3_n the ' , { � ca�h receipt;s book, b�for•e depositing said cash �.n t-he petty cash { � i ' book, and concerning which no record was kept. I am a�v�.sed these �` . . . . . � � .. . . . . 4 . . . � . , �. . . . . . . . . . . .. . . . . . ' ?. . . � . . { ' payments were for taleni and sa7.es?ner_s con�missianse � � . ` � � _, . ... :9 r-" .,_� ,� �' � � � � # � t . � �,. . . �... �;:��3 - � _ ; Surplusps in ��e pett�r cas'rs �ox are from `time ta ti.me deposit- � r _ Z ? ed either �n one oi th,e bank a�eoux�:ts or the �afety de�osit box. �� ` �` � � The cash receipt �iook coniains numer�ous gencil memos, upon : ,, ,3,° v�hich Mr. Tison x�e7.ies in mak-�n his mon,thly sta�tement.' � �,� � ,�� : 5. The foi�ov�ring m,onthly reports are m�,�'s: 1 r =� :{ . ' (l } te+ INS�JN, sha�ving j o3nt bu:sine�.�. and adju�ting cross- € �, :, ; �harg�a be+ween the stations. � :• � ; (2 ) to �m�ric,�n Soc�ety of Compos�rs, Authors and Publishers, E , �' shov�ing the rece�pts of wk:ich they sre entitled to 4� fee� i _ . � � . . . . � . . . �. �� . .. . . . . � . . � ,i.� . ' receipts from political talks, and aecounts paici '3.n i ` ,, merchar_dise are not included �n this report, _ � i (3) i;o Statian :n�na�ementr shov�ing cash receipts and opyi�at- r � � 5 " in� disbursement� only, to�ethex� with s balancir,g fzgure � � " vrhich, is designat;ed as '�net profit'� or "net loast►. This` ; ;' " 3esignat�on is oLviously in error, for the follawing � � . . .....� . . . . . . . .. . . �� . �...�k . . . ��ssons• � � (a )�h� repor� does not take into cons3.dera�Lion an� � t ` s eapital e�cpenditure, ��hich iner�ases the va�.ue ' ; F � ' oi the pl�.gsicr�l �s'sets of the station. � � 4 . . . � � . . � . . � . . . � � � . . . � . . . . . . .. . . . . . . . . . ..:'� � � � . . _' . . . . . . . . . � . . . � �. . r. . . . . . : (b) Tt does no�: t�ke into consideration any cot�mt�.- t ; ssio!zs earned and not paid, or any �ther obl3.ga- ; tions incur�ed or bills outs�anding, ; i , (c} It does n.o� take into consider�tia� sny � :j merckaandise rece3.;r�ds such receipts sornetimes k � � amauntin� to several hundred dollara in one ( _ � mr:nth. Sizch mercYi�nd�se must obviously either 7 � l. Increa�e pYtysical v�lue o,f' s�atson, ,�� - 2. Reduce commfi.ssion accounts puts�anding,-or � , � , , � 3. Be charged ta expense snd so shown on �he � . . . . . . . . . � .. � � �. . � . . � � � - . . � , .:4 � � .. � . . . i . . . . � . . . t. report. � , � ':i (d j Since �he first fe�v rzports, it does not take � � . into consideration any increase or decref�se � ,`^ in accounts receiva�ale. � { ;, } . 6. T�xsbursements are suthorized. eith�r by Mr. Baskin or i�fro � �'. . ;'. . .. . . . . . . .. . . . . . . ...0 . . � .,.: �.. . .. � . . . . . . . . . .. . . . . � '� . . � . �' Ti�pns; and en.ecks are sigred by botliQ Nc� vouc"ner sya�e�n is main- �`�' ,, , ��in.nd, nnd 3itt�.e info�ma�ion is kept on?the c'he:ck stubs. It is � � ,, E _. � s , , . � � r_. . . _._. . ..__� ._ _ ____ _ .� ._., — __._� .,.�_ _.....,_ _ .�.. �� , , . � . . � �,. _ �, � . �� . ' ��.�:� ��,�+` :�� ,� ; . _, ` . � �.ot: pcg�ibiP excepic b� analyis :o� �he 3.n�ividual ehQcks to ;_ E � � _ '� ' s�p�rat$ mi.scellane�:zs equjpment replacemeri�s from ca�+ita1 � ; � . � � expendiicares, or to subdiv.ide ca�i�al expEnditures ?ntc, variou� : G__ , , € ;' pro jeets . Tn these anal.,ys�rs, mem�r� or penci�. memo subsequen.t].y ,� � .�� ;- �� ' entered are indispensable,. ; o' � J. 7. 'Gommission account,s are memoran�.�am accounts. '�5� a�f �ross '� . �: ;, inc4me from a11 advertising �oes to �he ca«�missioi� accounts, � �, _ � ; wh�c'� are ai�3.aea �e�v�reEcn the salesmen and �hs ','hous��'. r i � As re�ards comi�iissions on receipts irom the N. BaC. cnai�,; j f 25� comm3.ssions vrzre taken by t�e }�ouse for a few months,� sfter � l ;, which i;hey v�ere set up in a 4uspense memarandum secount and not � ;. paid, to consez�ve the cagh on hand., �nt�ies �rsere made in this s; , � , � > accoun� for s�veral ,yegrs,, brin�inp; the amour�.t on the books ta , � ; sometr�ng over �8,OOO.QO. Upon conferring wi�h 1�r. Basliin sn.d ;�r. # � ; Tiso�a regarding �his account, they advise that they r�ovtr �ai�r� al1 � ;� claim to N. B. G. commissions. ,; _r , t ; TncZuded in cotnmiasians paid to t�r. Baskin and 1�'Ir. '� Tison, is an entry dated June 30= i�34, of �1500�Q0 each, �n��rked ��` i �rGov � t� Bonds ." The se bonds wers �'ormerly held in the s�f ety � � � deposi t box as �n asset of` -�he station. n�r. Baskin advises tiaat � escrow i he a�d I�r. Tison now ho'?3 �hes.e bonds yn�¢��^'-��,� for the benPfit af ; , i , the station. f � ; GENERAL : .� .� , This report dnes ��ot take into considei�a�ion a�et' of � bQ�ks set up by h�r. �.yer, a su�sequent to �'unt3 14,1934, c'ove�irg ,,i th2 pe�io� su.bsequ�nt to Januar,� 1, �932, f oz� the Florida ;Nest ; � , � Goast Broadcasting Campan,y an1y. These �ooks h�ve been' disre�arded i ;; because the� were prepared �or t"�e express �urpose of ne�otiati�n � � :' with the 7;nternal, Ret*znue Depar�ment r�nly, thay arE not kept ,'� 'f ry curs�entl,y,do not �o back of the actual bank deposits fo� �their �, . ,.� �'ounda�ion, and �.o no� ti_E into the genersl a�countin� of�the � � : �tatio�. Theyare merely� superimposed.. _ } This rz'por�t is made in �y capacit� as Gity Auditor �; � '� � : ,� C:L�rk� and 3.s without retnark excep� ta show the conditiansj'sT • � ' ` , .:� iou�.d them. � " , . i�e3pectfully su'c�nitted, ' � ,. , � J,_ �. Sa�t�rfield, ��ty .�uditcr & �lerk. � � � .,� .._ __ , _ � .._ _---_._.________. . _ _.�___� __ _�. ._ ._ __ �� i . � ; , , ,. � , _ :. � . -� __ _. � �; �JF `. �� , � � �� ;�� , t^; Moved b5r ?Yt�c. Tilley, sF�or�aea by n�r. l�illard, and a . � _� carrisd, �that the rep��rt bp rejectsd, anc"x �hat the Gommission � ;n... :, , , awai� ax� audi t . � �'` Moved l��r l�r. Dillard, seconded by �Fro 13arry, and � . . . � j . � � . . .. . � . , � caz°ri�d, that tY�e f�'llowin� wor� project>s be approved; f'or F. �,. � . . � ,� � �. A. ` � f ' � Corztinus work on athletic field. � �� , Ex:ten.sion of J-skvn bowl�.ng courts, etcs � ; ; ' _'; r Home fr�r V, F. W. � # �,`' 14;o�ed b,� Mr. DiSlard, seconded by 11�r. �asi�r, �` ,., r �� and carried, tk�at �Ir_•, Janes be aathor3.zed to go to Tallahassee Y �; , � � on the K].etrm c a s P. _ �, r Mee�ir_� adjourned:. � ,,j ; ; : � ! Ii, H. Bask3.n , i N:ayor-Comrr!issioner � , } ; A'tt�stt � ;f ;t J� E. SattGrfield. ; � ; City Audztor & Clerk. � . . . . . . .. � . . . . . . � . . .. 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'M1� . . . . . �. �.� � � . . .. . . . � .. ... .�. .. . . . . � . .. �..: . . � �. � . �:�, _ �:., . . . . .. . . .: � .. . . . ; .._, . ... . . . • � . . , •.'t. . - . . . . . . . -.: � �. . . � . . . . � � � - � .. . . . .3 . . - . . .. . 1� . ' i ' �. . . . . � .. �-. � ' . ' � �? � � .. . �� . ' . . ' . n�'� � . , .�. .« � . � . �. � ,� . . , #.. . . : . .. �.. .. . , . .. .. .. . �� . t.. ... r ,._.., r . . _. __..._„_.__ .. � �_ ,.-._-_.....__. �. .� ..... ..��. __._.r.;r1�� ._ .._ ........s.a..e�.>-',_...�..,� __. -�.. . . . .