Fiscal Control of State Expenditures
| Author | George Shiras Call |
| Date | 01 May 1924 |
| DOI | 10.1177/000271622411300111 |
| Published date | 01 May 1924 |
| Subject Matter | Articles |
75
Fiscal
Control
of
State
Expenditures
By
GEORGE
SHIRAS
CALL
Director
of
Accounts,
Commonwealth
of
Pennsylvania
THE
introduction
of
the
budget
sys-
i.
tem
among
state
governments
in
recent
years
has
been
a
noteworthy
improvement
in
state
financial
meth-
ods,
and
it
has
resulted
in
increased
efficiency
and
decreased
expense
in
the
conduct
of
state
business.
Yet
the
budget
alone
is
not
a
cure
for
all
the
financial
ills
of
the
state.
The
budget
is
a
careful
and
systematic
study
of
the
probable
revenue
of
the
state
and
the
apportionment
of
that
revenue
among
the
various
departments
and
institu-
tions,
so ~ that
each
one
of
the
state’s
activities
will
receive
its
fair
share
of
the
available
funds.
I.
PURPOSE
OF
FISCAL
CONTROL
The
budget
provides
a
method
for
planning
an
equitable
distribution
of
the
state’s
revenue
and
for
preventing
appropriations
in
excess
of
that
reve-
nue,
and
it
is
prepared
and
submitted
to
the
legislature
as
a
guide
in
making
appropriations.
After
the
appropri-
ations
have
been
made,
the
budget
has
served
its
purpose
and
a
system
of
fiscal
control
must
be
installed
in
order
to
make
sure
that
the
state
actually
lives
within
the
appropriations.
In
any
well-managed
private
corpo-
ration,
some
system
is
used
for
report-
ing
to
the
officers
and
directors
the
financial
condition
and
financial
prog-
ress
of
the
company
each
month
or
each
quarter.
Such
reports
enable
those
interested
to
keep
in
close
touch
with
the
affairs
of
the
company;
to
study
the
actual
revenue
and
expense;
the
expenditures
for
new
construction
and
equipment;
the
working
capital
of
the
concern;
and
the
various
other
factors
that
enter
into
the
financial
side
of
the
business
operations.
In
addi-
tion,
the
financial
condition
and
finan-
cial
progress
for
the
current
period
are
compared
with
the
corresponding
fig-
ures
for
the
previous
period
or
previous
year,
so
that
it is
possible
to
make
an
intelligent
study
of
the
trend
of
the
business
and
to
compare
the
fluctu-
ations of
the
different
items
of
assets,
liabilities,
revenues
and
expenses.
The
operations
of
a
state
differ
from
those
of
a
corporation
organized
for
profit,
and
yet
many
of
the
principles
of
accounting
and
finance,
which
have
been
applied
to
private
corporations,
can
also
be
introduced
in
state
account-
ing
methods.
The
chief
executives
of
a
state
need
the
same
information
con-
cerning
financial
condition
and
finan-
cial
progress
that
are
needed
by
the
officers
and
directors
of
a
corporation:
and,
due
to
the
fact
that
the
appropri-
ations
of
the
several
state
departments
are
fixed
for
a
year
or
two
in
advance,
particular
care
must
be
taken
to
pre-
vent
any
overexpenditure
of
those
ap-
propriations,
just
as
the
officers
of
a
corporation
must
see
that
operating
costs
are
kept
below
the
revenue
of
the
company.
In
the
old
days,
before
the
intro-
duction
of
the
budget,
deficiency
ap-
propriations
were
popular.
A
state
department
which
used
up
its
original
appropriation
before
the
end
of
the
one- or
two-year, period
simply
asked
for
an
additional
amount
from
the
next
legislature
in
order
to
carry
it
through
the
remaining
months.
This
scheme
amounted
to
self-appropriation
by
the
different
department
heads
and
it
largely
forestalled
any
attempts
made
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