Accounting for community building: the municipal amalgamation of Milan in 1873–1876

Figures & data

Figure 1. The jurisdictions of the municipalities of Milan and Corpi Santi in 1873.

Source: Civiche Raccolte Grafiche e Fotografiche del Comune di Milano [Municipality of Milan, Historical Photographs and Prints Collections], 1931.

Note: The Municipality of Milan jurisdiction is at the centre, in light, the Corpi Santi is the coloured area.

Figure 2. Paint of Porta Comasina gateway in Milan, 1835–1838.

Source: Civiche Raccolte Grafiche e Fotografiche del Comune di Milano [Municipality of Milan, Historical Photographs and Prints Collections], 1931.

Table 1. Summary of first financial reports of amalgamated jurisdictions – financial year 1873.

MILAN	Italian lire	CORPI SANTI	Italian lire
Current revenues	11,322,039	Current revenues	819,672
Current expenditures	10,889,920	Current expenditures	732,449
Surplus	432,119	Surplus	87,222
Non-current revenues	164,049	Non-current revenues	22,889
Non-current expenditures	1,276,340	Non-current expenditures	70,318
Non-current deficit	1,112,291	Non-current deficit	47,428
Deficit	680,172	Surplus	39,794
Assets and Liabilities		Assets and Liabilities
Receivables	28,206,071	Receivables	662,760
Liabilities	63,307,831	Liabilities	738,724
Deficit	35,101,779	Deficit	75,964

Source: ASCMI 1874b.

Figure 3. Financial year 1874 budget of the municipality of Milan.

Source: ASCMI 1874c.

Figure 4. Financial year 1874 budget of the municipality of Milan – social account (Annex A).

Source: ASCMI 1874c.

Figure 5. Financial year 1875 budget of the municipality of Milan.

Source: ASCMI 1874e.

Table 2. Main features of accounting change in the municipality of Milan.

	1873	1874	1875	1876
Configuration of budgeting and financial reporting	Budget not applicable (the amalgamation began on 1 October) Annual financial report composed of two distinct financial reports, Milan and Corpi Santi	Revenues and expenditures split by former jurisdictions and by the Social account District accounts (Milan and suburb) and Social account disclosed as Annex Assets and liabilities not consolidated	Same structure as 1874 apart from: A higher number of expenditures were included in the Social account, except for interest on debt District accounts (Milan and suburb) and Social account disclosed as Annex Assets and liabilities not consolidated	Revenues and expenditures disclosed for the entire government^a Consolidation of assets and liabilities (each district bearing the outstanding debt service)

Note: ^aExpenditures for snow removal, public works and duty on the sale of goods continued until 1880. These outlays were indicated separately for Milan and the suburb in the notes to financial reports. The outstanding debt of former districts was also noted separately.

Table 3. The use of cost accounting logic in the 1874 budget – municipality of Milan.

Table 4. Allocation criteria of revenues and expenditures in the financial year 1874 budget.

Categories	Inner district (Milan)	Suburb (Corpi Santi)	Social account
Revenues
Property surtax (lands, buildings)	x	x
Surtax on sale of goods^f	x	x
Income tax	x	x
Business tax	x	x
Horses tax	x	x
Other taxes (e.g. taxes on carriages, servants, dogs, depots)	x	x
Tax on occupation of public spaces	x	x	x^a
Building permits	x	x	x^a
Museums	x		x^e
Pension contributions			x
Theatres			x
Non-current revenues:
Rents and interests	x^b	x^b	x^b
Expenditures:
Current expenditures:
Street maintenance	x^b	x^b	x^b
Schools	x	x	x
Public lights	x	x
Cemeteries	x	x
Interests on debt	x	x
Employee pensions	x^c	x^c	x^c
General government	x^d	x^d	x^d
Parks			x
Theatres			x
Others (e.g. National Guard, firemen, street cleaning, medical services, subsidies)			x
Non-current expenditures:
Public works	x	x	x

Note: ‘x’ means direct allocation to the specific account. Allocation methods are specified for particular items.

^aTax revenues on public spaces derived from streets counted in the Social account.

^bDirect allocation on the basis of asset localisation.

^cDirect allocation on the basis of salaries and time on duty.

^dFair allocation of salaries on the basis of work performed by employees.

^e25 per cent of museums’ expenditure was accounted in the Social account and 75 per cent in the Milan account.

^fIncreases of local surtaxes on property and on sale of goods were permitted by legislation to balance the budget.

Table 5. Amalgamation and accounting change: extra-organisational and internal factors.

	Coercive Isomorphism (Di Maggio and Powell 1983)
Processual Approach (Dawson 2003)	Formal Pressures	Informal Pressures
Politics Influence of the King and of municipal councillors	The King of Italy: Favouring the amalgamation in order to achieve the administrative unification, simplifying public administration and reducing public expenditures	Municipal councillors: Favouring the amalgamation in order to expand the territory and increase revenue Continuous discussions and changes of the accounting practices
Context Influence of legislation and changing social expectations	Central government: State Law 2248 for the administrative unification of the Kingdom of Italy of 20 March 1865	Municipal councillors: Changing social expectations of new councillors about the improvement of the situation of both districts
Substance Accounting change – influence of the chief accountant and leading elected councillors	Full compliance with legislation (1873–1874) Unification of separate service expenditures (1875–1876) Criteria established by the internal commission	Municipal councillors and the chief accountant: Continuous discussions and changes of the accounting practices (e.g. the criteria for allocation of common expenditures and revenues)

Figure 6. The process of organisational and accounting change in the Municipality of Milan.

Civiche Raccolte Grafiche e Fotografiche del Comune di Milano, Piante e vedute della Lombardia conservate nella Raccolta delle stampe e dei disegni . 1931. [Municipality of Milan, Historical Photographs and Prints Collections, Plants and views of Lombardy preserved in the Prints Collection, 1931].

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