any property belonging to the State or in which the State is interested, or who makes estimates or rolls or records which are used as a basis by any department of the State government in the disbursement of public funds.

(6) Examinations of any of the aforesaid offices, institutions, or works whenever the Governor directs.

(7) Assistance to the Budget Appropriation Commission.

Organization:

The staff of the Inspector and Examiner's office includes five persons, two of whom work only part time. The positions and salaries at the present time are as follows:

The expenditures of the office for the year ended June 30, 1923, are given in the Inspector and Examiner's report to the Budget Appropriation Commission as follows:

The appropriation for this office for the fiscal year ended June 30, 1923, was $15,800.00, the unexpended balance being $2,042.23.

Comments and Suggestions:

The Inspector and Examiner has failed to meet the legal requirements of his office in three principal respects:

(1) His program has been to make regular audits of departments and counties once in two years instead of every year as specified in the statute.

(2) He has not made the thorough audits of the offices of the Auditor and the Treasurer required by statute.

(3) He has not served the Budget Appropriation Commission to the extent apparently contemplated by the statute.

These deficiencies, however, are readily explained.

Causes of the Failure to Comply with the Law: As to the first item it is found that the Inspector has insufficient staff to make an annual round of departments and counties. Two men are employed almost entirely on county audits but they are employed for part time only and the services of both of them together amount in total to about those of one man for full time. The Inspector is frequently called on for special investigations and must plan his program so as not to exhaust his appropriation or to use so much of it in the early part of the year as not to be able to take care of emergency work coming later. The unexpended balance of his appropriation appears to represent this factor of safety. At any rate if the entire amount appropriated were spent it obviously would not enable him to audit all departments and counties in a year. It is stated that the Inspector made this situation clear to the Budget Appropriation Commission in submitting his estimates but that the Commission recommended no increase in the appropriation and the Inspector has not pressed the matter since. It is also stated that the precedent now followed in the matter of frequency of audit was established in preceding administrations.

FOREWORD

This part of the report deals with the present and possible sources of State revenue and with problems of tax administration. It indicates ways in which needs for additional State funds, which are specifically enumerated and discussed in other reports, may be met. It also indicates ways in which the present tax burden may be more equitably distributed through changes in law and better and fairer administration of the laws now in effect. It includes separate discussions of every form of State taxation and a critical analysis of the advantages and disadvantages and special problems of each.

that the present relationships between the different fiscal offices are not conducive to the best results, the achievements of the Inspector and Examiner's office must be rated as worthy of commendation. Large sums of money are each year recovered from county officers, many valuable constructive suggestions are made in the Inspector and Examiner's reports, and the whole State administration is favorably influenced by the work done. The principal faults of the present procedure are not the result of the operation of the office but pertain to the antiquated and feeble system of fiscal administration of the State.

Importance of the Investigational Function: The needs of the Commonwealth for a budget staff that will assist the Governor in preparing his recommendations to the Legislature and will assist the legislative body itself in analyzing the needs for public funds, have been considered elsewhere. The assistance which such a staff could give may be said to involve two groups of functions:

(1) Investigational functions connected with the determination of the facts as to operating efficiency and requirements for funds for different classes of work. (2) Specialized budget-making functions connected with the promulgation of systems of records, tabulation of data as to expenditures and unit costs, and assembling of budget information in the best possible manner to give the Governor and Legislature the reliable and complete facts which they require.

As has been suggested above, the opportunities to make the office of State Inspector and Examiner serve the needs for a budget office, have not been taken advantage of and the budget machinery has suffered as a result.

In view of the fact that the Inspector and Examiner has been an investigational officer, has been responsible directly to the Governor, and has reported to the Governor, it is evident that the change to make him a Budget Officer need not be great. He has been gathering the facts, but has not had the responsibility of translating them into terms of money