CRITICISM OF THE PRESENT ORGANIZATION Divided Responsibility for the Budget Recommendations Benefits to Accrue Through Legislative Representation The Requirements as Regards a Budget Staff The Revenues, Expenditures, and Financial Condition of the Commonwealth Introductory: No intelligible or reliable financial statements of the operations and cash condition of the State government are now prepared as a part of the accounting procedure of any State fiscal office. So far as is known such statements never have been prepared by any officer or by any special investigating body up to the present time. Among the more fundamental classes of information which are never produced, the following are typical: Information as to the total income or revenue of the Commonwealth for any fiscal year or years. Information as to all the distinct sources of revenues and the amounts from each source. Information as to the total expenditures of the State for any fiscal year or years. Information as to the purposes of expenditure and the amounts for each purpose. Information as to the nature of expenditures (according to what thing the money is used to buy) for each purpose and in total. Information as to the net total of cash resources of the Commonwealth at any date. Information as to the availability for appropriation of the cash resources of the Commonwealth. Information as to the total indebtedness of the State. Information (based upon the preceding) as to the financial condition of the Commonwealth and changes in financial condition from year to year. Information as to the probable effect of the Legis lature's appropriations upon the Commonwealth's financial condition. These classes of information until now have not been obtainable. It has been found that the more or less approximate figures for total cash transactions, which are used generally instead of the figures for total revenues and expenditures, may be a million dollars different from the total which they are assumed to represent in spite of the effects of compensating errors. It has been found also that figures for individual departments as shown in the Auditor's books may be a half million dollars out. Many detailed figures of interest are not shown at all in the Auditor's books while a few other figures are so misleading that it would be better not to show them. The present accounts of the State give cash transactions of the treasury-receipts and disbursements irrespective of whether for revenues and expenditures or for refunds, transfers, corrections, or other kinds of transactions, without attempt to classify items for the purpose of giving intelligible totals, and without attempt at accuracy in allocating transactions to the years to which they belong or to give consideration to accruals. Many transactions of State departments are not recorded in the central accounts of the State. The trouble is not due to errors in keeping the books but belongs to the system of bookkeeping now employed. Many weeks have been spent in analyzing records of the office of the Auditor of Public Accounts and reports sent to the Budget Commission with a view to assembling financial data that would serve to give a reliable picture of the condition of the treasury and transactions of the fiscal year 1922-23. The results have been as successful as they could be under the circumstances. No complete audit could be undertaken and as a result many discrepancies in figures (for example, between department records and those of the Auditor) had to be allowed to remain unreconciled. Except in a very few instances, however, figures could be selected which were known to be representative of the facts, and consequently it was possible to prepare statements which will serve as a reliable basis for a study of the State's financial condition. and revenues and expenditures in total and in detail. A part of the work of preparing the data was made difficult by the insistence of some of the minor agencies that they are lawfully independent of the Budget Appropriation Commission and do not have to make financial reports. A very few, like the State Board of Accountancy, could not be induced to cooperate in time to incorporate their figures in the report. The Statements: The Statements submitted herewith are the following: Statement I Financial Condition of the treasury as of the beginning and the close of the fiscal year July 1, 1922-June 30, 1923. Statement II Expenditures of the Commonwealth for the fiscal year 1922-23 under a general functional classification and analyzed according to objects of expenditures. Statement III Revenues and Other Receipts of the Commonwealth for the fiscal year 1922-23 classified according to their source or character. Statement IV Distribution of Revenues to Funds for the fiscal year 1922-23. Following each statement is a short discussion of the figures presented. It will be noted that from an accounting standpoint, Statements I and IV are not comparable with Statements II and III as the latter include all transactions for which data was available while the former are restricted to the transactions affecting the State treasury, in the limited sense (that is, the transactions recorded in some manner by the Auditor of Public Accounts). Also Statement II embodies a number of corrections in the allocation of charges by fiscal years. The totals from the statements shown, together with totals of the transactions of the treasury not elsewhere shown, are as follows: *From Statements I and IV. Figures for State revenues and expenditures as here shown are incomplete and are not adjusted for refunds, etc. They agree with the Auditor's figures for total receipts and total disbursements. †Statements II and III. |