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There were two or three States to which I did not refer, and I simply want to put that into the record.

The CHAIRMAN. Is there any objection to the request of the Senator from South Carolina?

Representative TABER. Do you want to put the whole thing in at once rather than piecemeal, the way it was yesterday?

Senator BYRNES. Yes. I think, in justice to the Brookings Institution, they made suggestions sometimes in two or three paragraphs and I was reading only one paragraph, and I would rather put the whole report of the institution in as to this particular question.

The CHAIRMAN. You will have to indicate to the stenographer just what it is.

Senator BYRNES. Yes. I have given to the stenographer the manuscript.

Senator BYRD. In connection with that, Mr. Chairman, I asked Colonel Wren to ascertain how these different officials in these States that were referred to yesterday held their positions, whether they were elected or appointed; in other words, so as to get the comparison between the condition here at Washington and in the different States. Reference was made by Senator Byrnes to the fact that in these States the Brookings Institution made a different recommendation to what they had made to the Federal Government, and I would like Colonel Wren to include that in the hearings when he obtains that information.

Mr. WREN. I might say, in that connection, that at the suggestion of Senator Byrd, after the meeting I concluded, rather than to go to the statutes of the States for that information, to ask the States themselves for it, and I have done so. As soon as their answers come I will bring that to the attention of the committee, and it will then be disposed of.

(The information secured as reported by Mr. Wren is as follows:)

Prior to Brookings survey:

STATE OF IOWA

State auditor elected, preaudited all claims and issued warrants in payment. There was no comptroller but the budget directed, apparently appointed, no showing as to by whom, postaudited all accounts.

Attorney general elected. His opinions were binding on the auditor and on other States officials.

Total annual expenditures of the State year prior to Brookings survey, $38,625,581.04; following year, $37,173,629.46.

After Brookings survey, budget director was abolished and a comptroller was appointed by the Governor who preaudits all claims and issue warrants in payment. Auditor, elected, postaudits. Attorney general's opinions continue to be binding on State authorities.

NORTH CAROLINA

Information secured relates to present time only.

Auditor, constitutional officer, elected. All disbursements are made on warrants issued by the auditor, some of which are preaudited by him and some handled through disbursing accounts which are postaudited by him. He postaudits all State agencies except the State school commission.

The State has no comptroller but in 1929 the assistant director of the budget, appointed by the Governor, and the budget bureau, were given the approval of all budgets of all spending agencies and the control of expenditures by allotments.

The attorney general is a constitutional officer and is elected. He is the legal adviser of all State departments and agencies but his opinions are in the main advisory.

MISSISSIPPI

Information relates to conditions since Brookings Survey, in 1931.
State auditor elected. He had function of pre-audit and post-audit.

The State has no comptroller.

The attorney general is elected. The State auditor is not bound in official acts by the attorney general's opinion.

State expenditures in 1932 estimated at $14,000,000.

ALABAMA

State auditor was and is elected. He had function of preaudit and settlement of claims. Also function of postaudit. After the Brookings Institution's survey, the State auditor was relieved of all duties in respect to the settlement of accounts and keeping of accounts, records, and the making of financial reports, but he retained the duty of post audit.

The office of comptroller was created after the Brookings Report as a part of the Governor's office and placed under the general direction, supervision, and control of the Governor. The duties given to him included those of auditing all demands by the State and preauditing all accounts submitted for the issuance of warrants. He was given control of the payment of all moneys into the treasury and of the payments from the treasury "by the preparation of appropriate warrants, or warrant checks, directing such collections and payments." He was also made the chief budget officer.

The attorney general was and is elected. The auditor was not bound to follow his rulings and neither the auditor nor the comptroller are now so bound that if his rulings are so followed, the official doing so is protected from liability if in error.

NEW HAMPSHIRE

Office of auditor was abolished in 1932, the year in which Brookings made survey. No showing as to how he was selected nor as to just what his duties

were.

Upon abolition of State auditor, his duties were taken over by the comptroller, appointed by the Governor and council. The comptroller thereupon possessed function of preaudit and postaudit.

Attorney general is appointed by the Governor and council. The comptroller observes the opinions of the attorney general concerning his official acts. No showing as to whether, prior to Brookings Survey, auditor so observed.

State expenditures for year ending June 30, 1932, before the Brookings Survey, $12,433,357.13. Corresponding figure for succeeding year is $33,101,026.69.

OKLAHOMA

State auditor elected. He has function of preaudit and settlement of claims against State.

The State had no comptroller.

The attorney general is elected. No showing as to whether his opinions controlled the auditor.

Senator BYRNES. Mr. Chairman, what I had asked was not what action the States had taken, whether they had approved or rejected the reports, but simply the recommendations of Mr. Meriam to those States.

The CHAIRMAN. Is there any objection to the request of the Senator from South Carolina?

Representative GIFFORD. I wish he would tell us the purpose of his request, as to why he wants to do that.

Senator BYRNES. I have stated why, but I will be glad to state it again. I wish to have printed exactly what was said, and all that was said by the Brookings Institution in these various reports with reference to this question of postaudit and preaudit.

REPRESENTATIVE GIFFORD. Isn't that already in the record? You had it in yesterday.

Senator BYRNES. No; not all of it.

Representative GIFFORD. Did not the stenographer take it all

down?

Senator BYRNES. I stated it in some instances, but I did not read it all into the record. I did not read all that was in the report by the officials of the institute with reference to the subject. In those cases I thought it would be fair to have it all printed.

Representative GIFFORD. It simply means that you want to put it all in?

Senator BYRNES. Just one minute. You asked me a question now. Representative GIFFORD. You want to put it all in

Senator BYRNES (interrupting). Mr. Chairman, I decline to answer the question. You asked me a question and I will answer it if you want it answered.

Representative GIFFORD. Yes. I want to ask the gentleman if he wants to put in the record the statement in order to show the inconsistency.

The CHAIRMAN. Just a moment. Does the Senator wish to answer the gentleman's question?

Senator BYRNES. I did, but I do not now.

The CHAIRMAN. If there be no objection the order will be made. for the insertion of the memorandum as suggested. The Chair hears none.

Mr. MERIAM. That leaves intact, as I understand it, all that we have said in answer to that part? It just takes place of what the Senator read in the record?

The CHAIRMAN. Yes.

Mr. MERIAM. That is entirely satisfactory.

Senator BARKLEY. Why not insert it at this point and not interfere at all with the queries made yesterday?

Senator BYRNES. That was my request.

The CHAIRMAN. That was the request, which is the order of the committee.

Mr. MERIAM. This is in addition?

The CHAIRMAN. Certainly.

Mr. MERIAM. That is all right.

Representative TABER. Then, Mr. Chairman, may Mr. Meriam, after he has seen that statement, have an opportunity to insert a statement with reference to it, if he desires?

Senator BYRNES. I hope that will be done.

The CHAIRMAN. That is agreed to, according to the chairman's understanding.

(The matter referred to is as follows:)

EXCERPTS FROM THE BROOKINGS INSTITUTION STATE REORGANIZATION REPORTS RELATING TO FINANCIAL CONTROL AND AUDITING

NOTE. The following excerpts are confined to the points upon which there is a disagreement between the Brookings Institution Report to the Congress on Financial Administration of the Federal Government (No. 5) and the recommendations of the President's Committee on Administrative Management, namely, as to whether the comptrolling officer, who exercises the authority of final settlement of claims, the issuance of rulings and advance opinions, and

the conduct of preaudits, should be responsible to the Executive, or whether these functions should be exercised by an officer who is independent of the Executive.

Other points at issue are, what is the proper authority of an independent auditor who reports to the legislative body, and what is the distinction between auditing and control. The following excerpts cover the recommendations of the Brookings Institution upon these points in their report upon the reorganization of State governments.

It will be noted that the recommendations upon these points for these several States are practically identical, varying only in the detail with which they are set forth. The following excerpt from the Alabama report headed "Summary: Fundamental Reforms Needed" is perhaps the best statement of the principles and recommendations which were made by the Brookings Institution for the reform of financial administration of State governments.

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Probably the most important feature of the departmental system thus recommended is that which provides for the creation of an executive department. All efforts made in recent years to improve the administration of governmental affairs have sought to emphasize the importance of a government from the standpoint of business administration. In the past, Alabama, in common with most of the States, with the exception of those recently reorganized, has in effect been attempting to have its governmental affairs conducted without any officer corresponding in responsibility and powers to that of a general manager as found in all private corporations of any size. It is impossible to have the business operations of a government properly conducted unless there is someone who is in general control, with the duty of seeing that all of the several parts are properly correlated and are maintaining proper working relations with each other, and of exercising that general direction, supervision, and control over all the operating units that will insure that these several units are performing their duties properly and with due regard to the factors of efficiency and economy.

There is only one officer in the State government who can be charged with these general duties and responsibilities-the Governor. One of the most fundamental modifications suggested in the existing governmental system of Alabama, is the one here proposed of conferring upon the Governor the powers, duties, and responsibilities of a general manager. The whole scheme

of reorganizing the administrative branch by grouping the services into departments contemplates that this system will be headed up by the Governor (vol. 1, p. 24).

If the Governor is in fact, as well as in principle, to discharge the duties of a general manager, it is essential that he be given facilities and an agency through which he can meet his responsibilities. It is for this reason that the suggestion is made that, in reorganizing the administrative branch, provision be made for a department which is designated the executive department. In this department are grouped those services for the direction of which the Governor will have immediate responsibility in respect to the government as a business organization. In this department much the most important subordinate unit will be the one designated "Service of General Administration", which service will include subdivisions having charge of such purely institutional activities as the settlement of claims, the keeping of accounts and rendition of reports, the preparation of the budget, the exercise of accounting control over the spending services, the recruitment and administration of other matters pertaining to personnel, purchasing and contracting, and the like. The head of this service will be the business manager of the State government through whom the Governor as general manager will discharge his duties.

The only subdivision of this service needing special comment is that of the office of Comptroller. In Alabama, and the same is true in most of the States, great confusion has resulted through the failure to distinguish clearly between the functions of a comptroller and an auditor. The general tendency has been to impose the duties of both upon a single officer, usually known as an auditor.

The primary functions of a comptroller are, as his title indicates, that of controlling the covering of money into the treasury and the issue of money therefrom, the settlement of all claims, the keeping of the central accounts, the rendering of annual and other financial reports, and, generally, of exercising that central control over the administration of the financial affairs of the government that is essential if such operations are to be properly performed. The comptroller thus is, or should be, the chief financial officer of the administrative branch of the government. He should be, in effect, the righthand man of the Governor in respect to all matters of financial administration. As such, he should be appointed by and hold office at the will of the Governor.

The duties of the auditor are those of reviewing all financial transactions for the purpose of determining that all requirements by the legislature in respect to the collection, custody, and disbursement of public funds have been duly complied with and that all officers having the collection, custody, or disbursement of public funds can faithfully account for all money coming into, or that should come into, their possession. As such, the auditor should be an agency of the fund-raising and fund-granting authority, the legislature, and it is to this officer that the legislature should look for means of assuring itself not only that its directions have been complied with by the administration, including the Governor himself, but that the administration in performing its duties has done so with due regard to efficiency and economy in the collection, care, and disbursement of public funds.

In suggesting the creation of an office of State comptroller, as a subordinate unit of the Service of General Administration, it is contemplated that the duties entrusted to this officer shall be solely those of a comptroller. On the other hand, this proposal carries with it the restriction of the duties of the State auditor to those of an auditor, strictly speaking, as above defined (vol. 1, pp. 25-26).

SERVICE OF GENERAL ADMINISTRATION

The establishment of a service of general administration in the executive department is recommended to bring together under unified direction all those services having to do with the operation of the Government as an institution. The ends sought to be accomplished by this proposal are:

1. The giving to the Governor of a more effective agency through which he may meet his responsibilities as head of the administration; and

2. The general improvement of the organization of the administrative branch. through the centralization aud control of all services involved in the purchase of materials and supplies, the employment and control of the personnel in the several departments of the State government, the coordination and simplification of all accounting work of the State, and the grouping of all fiscal and business matters under one directing head who will be responsible to the Governor for all routine business operations of the State government (vol. 1, p. 118). Proposed organization. The defects in the present institutional service organization can be corrected by the adoption of the plan here recommended of bringing together into a single unified service, composed of several bureaus, all those activities having to do with general administration. That is, the budget work now performed by the ex-officio budget commission should be transferred to a bureau of the budget; the present accounting work now performed by (1) the State auditor's office, (2) the State department of administration, and (3) the department of examiners of accounts, and the settlement of claims by the board of compromise should be consolidated and be performed by a bureau of central accounting and reporting; the purchasing work now performed by the State board of administration, the textbook purchasing board, and the varions institutions should be performed by a bureau of purchase and contract, all contracts being executed by this bureau except contracts for construction work: and finally, all personnel work should be centered in a bureau of personnel that will be responsible for recruitment, classification, advancement, and promotion of the State's employees.

The bringing of these agencies under a common direction will insure not only their more effective coordination but also the elimination of certain clerical work, particularly in the examination of claims and in the actual bookkeeping work now performed in the accounting departments of the State board of administration and the State auditor's office.

It is therefore recommended that a service of general administration be established in the executive department; that this service be headed by a

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