The Failure of the Present Budget within its Limited Field: During the years since the budget act was passed it should have been possible to develop forms and procedure supported by a more or less adequate accounting system which would have produced the information necessary for the control of State finances within the present limits of such control. Moreover, by the development of the budget within its legal limitations it should have been possible to present clearly and convincingly the difficulties under which the system labors and possibly to have obtained relief from some of these limitations.

None of this has been done. No general statements have been produced, no adequate accounting and reporting system has been developed, and no really material assistance of any kind has been given to the Legislature. The duties imposed upon the Budget Commission, apparently, have been performed in the most perfunctory manner. To make this very clear some of the important duties of the Commission will be considered.

Absence of Useful Summary Statements: A first essential of a budget system must be to produce general statements for use in laying out a financial program for the ensuing fiscal period. These statements should summarize revenues, expenditures, treasury conditions, indebtedness, and all other elements entering into the financial situation. Also, so long as special funds are maintained it is absolutely necessary that there be a segregation by funds of all the financial data summarized in the general statements. All the information relating to the ensuing fiscal periods should be shown in comparison with corresponding information for preceding periods.

In the report of the Budget Commission relative to the years ending June 30, 1923 and June 30, 1924, the only statement of a general character was the following:

Receipts in the State Treasury for the fiscal year ending

June 30, 1921

Disbursements for the same period

Excess of receipts over expenditures.
Cash balance in Treasury

Outstanding five per cent interest-bearing warrants
June 30, 1921 ..

The probable amount of revenues exclusive of Federal
funds which will be received for the fiscal year end-
ing June 30, 1923

The approximate needs for revenues for the various ap-
propriations covered by the Appropriation Bill, in-
cluding the expense of the Judiciary, criminal prose-
cutions, and other miscellaneous items which are
not included in any specific appropriation for the
fiscal year ending June 30, 1923.....

The probable amount of revenue exclusive of Federal
funds which will be received for the fiscal year
ending June 30, 1924
The approximate needs for revenue for the various ap-
propriations covered by the Appropriation Bill,
including the expense of the Judiciary, legisla-
tive Session, and other miscellaneous items which
are not specifically covered by any section, for the
fiscal year ending June 30, 1924..

This statement is not only wholly inadequate, but is misleading and consequently decidedly worse than useless. For example, it implies or suggests a comparison of the past year's receipts and disbursements with the incomplete figures purporting to indicate the transactions of the next two years. It gives no indication of the omissions in the figures for the coming years except the misleading reference to the omission of federal funds. It states the deficit of the treasury without indicating whether or not the deficit is considered in figuring the need for funds. It grossly underestimated the probable evenues. It wholly ignores the special fund problem and so opens the way for the grossest sort of misconception. It is hard to imagine a less satisfactory or reliable summary statement.

Complete Lack of Intermediate Statements: In the budget report for 1923-24 there were no intermediate statements between the estimates of total revenues and expenditures already quoted and the detail data of departments. Following

the summary statement just described should be general statements relating to revenues and expenditures. All items of State revenues are of the greatest practical interest and the estimated amounts distributed by funds are essential to know. Statements of revenues for the preceding years, including partially estimated figures for the current year, are of equal importance for the purpose of comparison and in planning the revenue side of the budget. The general statement of any expenditures of all the departments of government, together with any non-departmental expenditures to be provided for, might be said to be absolutely necessary. The estimated or desired expenditures for each item should be shown with the distribution by funds. Corresponding expenditures for preceding years obviously are needed and should be shown suitably tabulated for purposes of comparison. These general statements of revenues and expenditures would give the totals for the general summary previously described, and would themselves be recapitulations from the detailed departmental and special statements.

General recapitulations according to objects of expenditures or budget classes would be useful both for budget and other administrative purposes. Other recapitulations and various forms of assembling data will suggest themselves when the work of preparing the budget is undertaken in earnest.

Numerous Unestimated Revenues and Expenditures: Obviously, definite amounts must be stated for each of the items in both tabulations of income and expenditure. The budget as now prepared, besides being indefinite as to revenues, contains two kinds of indefinite appropriations as noted above. The first is for expenditures from special revenue funds and the second for expenditures from the general fund of a character which makes it more difficult to determine in advance the amounts required.

Some of the items of the second class should be covered by a general State contingent appropriation (so-called "con

tingent fund"). In addition to the flexibility thus secured, further provision for the unexpected can and should be made by this means. When such an appropriation is made it is possible to a far greater degree than could otherwise be realized to set limits to expenditures that will enforce economy and still provide for unusual emergencies.

Limited Informational Value of the Detailed Schedules: It is obvious from what has already been said that the present budget cannot meet the needs as a means of bringing in complete and reliable information as to the work and requirements for funds by each State agency. It should be added, however, that the present budget does not even attempt to analyze or explain the requests for money. Each unit's request for a year is stated in a single figure. A budget classification is prescribed by law but is used by the Budget Commission only in the schedules of expenditures of the last year and not in stating the amounts requested by or for the departments.

In other States that lay claim to having a budget system, requests are analyzed with varying degrees of success. The problem of obtaining detailed information that will materially assist the Chief Executive or Budget Commission in making recommendations and especially the Legislature in finally arriving at the correct amounts to appropriate, is a difficult one which deserves to be ranked as one of the fundamental budget problems. It is a problem that can be solved satisfactorily only by extended study by a qualified budget staff supported by members of the Legislature who make the subject of financial administration their chief interest and field of service. So far nothing has been done in this direction.

Lack of a Budget Staff: The most serious faults of the present system, if it may be called a system, are attributable to the lack of a budget staff. The authors of the budget law may have contemplated the employment of the State Inspector and Examiner as budget officer, but they did not make their intention in the matter sufficiently clear. They did provide

for the State Inspector assisting the Budget Commission and attending the meetings, but the Commission has not chosen to take these provisions of the law seriously. Instead the already overworked Assistant Auditor of Public Accounts was selected as the clerical assistant to the Budget Commission and most of the duties of a budget officer were not provided for.

It is impossible for anyone who is at all familiar with the difficulties of the budget making to imagine a successful budget without a budget staff to handle the problems of form and content and to do investigational work.

Divided Responsibility for the Budget: The plan followed in the budget law of this State is that of having a commission of three who are responsible for the preparation of the budget. This commission is dealt with in the section of the report which describes the various fiscal units of the State government. Its membership is criticised on the ground that it includes the Chairman of the Tax Commission who has and can have little information to contribute (except a half page of figures) and the Auditor of Public Accounts who up to the present has been one of the least active individuals in the State government. It is believed that the budget-making authority, particularly the authority to recommend appropriations, cannot justifiably be placed with any administrative officer other than the Governor. It is practically a farce for the heads of great departments like Roads, Education, Charities, and Health to have to bring their requests to the Auditor of Public Accounts and Chairman of the Tax Commission.

To look at this matter in its true perspective, the power to recommend appropriations should be distinguished from the general supervisory powers having to do with the perfection of the budget machinery. As indicated above, it is believed to be wholly wrong to have anyone but the Governor in the position of recommending appropriations, but it may be very desirable to have a commission to exercise general supervision over the budget machinery.

On the other hand, the present personnel of the Budget