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Department of finance

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Sec. 585 (68). Divisions of department of finance: In the department of finance hereby established there shall be the following divisions : Division of accounts and control, division of the treasury, division of purchasing and printing, and division of motor vehicles. For each of such divisions, except the division of the treasury, a director shall be appointed by the Governor, subject to confirmation by the general assembly if in session when such appointment is made, and if not in session then at its next succeeding session. Each director shall hold his office at the pleasure of the Governor for a term coincident with that of each Governor making the appointments, or until his successor shall be appointed and qualified.

SEC. 585 (69). Division of accounts and control and division of the treasury: (a) The director of the division of accounts and control shall be known as the comptroller

Except as otherwise provided in this act, all the powers heretofore conferred and all the duties heretofore imposed by law upon the auditor of public accounts and the second auditor are hereby transferred to, vested in, and shall be exercised or performed by, the comptroller

(j) No money shall be paid out of the State treasury except in pursuance of appropriations made by law, and there shall be established in the division of accounts and control by the comptroller a complete system of general accounting to comprehend the financial transactions of every State department, division, officer, boa rd, commission, institution, or other agency owned or controlled by the State, whether at the seat of government or not. All transactions in public funds shall clear through the comptroller's office. All State moneys in a State depository shall stand on the books of such depository to the credit of the treasurer of Virginia. But the treasurer shall have no authority to draw any of the said money except by his check, drawn upon a warrant issued by the comptroller. If any money to his credit, as aforesaid, shall be knowingly paid otherwise than upon his check drawn upon such warrant, the payment shall not be valid against the Commonwealth.

(k) The comptroller shall not issue any disbursement warrant unless and until he shall have audited the bill, invoice, account, pay roll, or other evidence of the claim, demand, or charge and satisfied himself as to the regularity, legality, and correctness of the expenditure or disbursment and that the claim, demand, or charge has not been previously paid. If he be so satisfied, he shall approve the same; otherwise he shall withhold his approval. In order that such regularity and legality may appear, the comptroller may, by general rule or special order, require such certification or such evidence as the circumstances may demand. Lump-sum transfers or appropriations to State departments, divisions, offices, boards, commissions, institutions, and other agencies owned or controlled by the State, whether at the seat of government or not, are prohibited; but nothing in this sentence shall be construed as preventing the payment to or distribution among the political subdivisions of the State of any appropriations made to them by law. A reasonable petty-cash fund shall be allowed each State department, institution, board, and commission, or other agency, the amount of which petty-cash fund shall be fixed by the comptroller in each case, but these funds shall be reimbursed only upon vouchers audited by the comptroller. No appropriation to any department, institution, or other agency of the State government, except the general assembly and the judiciary, shall become available for expenditure until the agency shall submit to the direction of the division of the budget quarterly estimates of the amount required for each activity to be carried on, and such estimates shall have been approved by the Governor.

(m) The comptroller shall prescribe what accounts shall be kept by each State agency in addition to the system of general accounting maintained in the comptroller's office, and in prescribing what accounts shall be kept by each State agency the comptroller shall take care that there shall be no unnecessary duplication (1927, pp. 107-111; 1928, pp. 342-347). Title 10, chapter 29, State accountant and State board of accountancy--State

accountant

SEC. 550. State accountant: appointment: qualifications; salary ; bond ; re. moval; successor: There shall be appointed by the Governor, upon the recommendation of the joint auditing committee, a person whose official title shall be the State accountant

*. The said State accountant may at any time 152419_-37-9

be removed from office by the Governor for malfeasance or misfeasa nce in office or for incompetency. A vacancy so occasioned or otherwise occurring shall be filled by appointment by the Governor (1910 p. 243).

SEC. 557. Inspection of accounts and vouchers of certain officers : Said State accountant, or his deputy, shall, from time to time, inspect and scrutinize the accounts and vouchers of all State officers (id.).

SEC. 558. How inspections made; production of books and vouchers; penalty: Such inspection shall be made without notice to the officials whose accounts are to be inspected, and it shall be the duty of the official whose books and accounts and vouchers are being inspected to produce such books, vouchers, and accounts and give the State accountant or his deputy all necessary help and aid in making such inspection. Should any official fail to perform the requirements of this section he shall be guilty of a misdemeanor (id.).

SEC. 560. To whom State accountant to report defaults or irregularities: If the result of any examination made by the State accountant, or his deputy, under this chapter shall show that any moneys received have not been properly accounted for or have been paid out contrary to law or that there has been any irregularity, it shall be the duty of the State accountant to report the same to the auditor of public accounts and the Governor. In case there is any irregularity in the accounts of the auditor of public accounts, the said State accountant shall make report of the same to the Governor and to the general assembly (id.).

SEC. 561. Annual report of State accountant: Said State accountant shall make an annual report of the acts and doings of his office to the Governor (id.).

SEC. 564. When State accountant upon request to examine certain accounts: The State accountant when called upon by the Governor shall examine the accounts of any institution maintained in whole or in part by the State, and, upon direction of the auditor of public accounts, shall examine the accounts of any officer required to settle his accounts with him, and upon the direction of any other State officer at the seat of government he shall examine the accounts of any person required to settle his accounts with such officer (id.).

Title 10, chapter 24, the Attorney General

SEC. 374a. Chief officer; opinions; duties, etc. : (1) Chief Officer.-The attorney general shall be the chief executive officer of the department of law, and as such shall perform such duties as may be provided by law.

(2) Opinions.He shall give his advice and render official opinions in writing only when requested in writing so to do by one of the following: The Governor; a member of the general assembly; a judge of a court of record or a justice of the peace or trial justice; the State corporation commission; an attorney for the Commonwealth ; a clerk of a court; a city or county sheriff or constable or city sergeant; a city or county treasurer; a commissioner of the revenue; the head of a State department, division, bureau, institution, or board. Except in cases where such opinion is requested by the Governor or a member of the general assembly, the attorney general shall have no authority or render an official opinion unless the question dealt with is directly related to the discharge of the duties of the official requesting same. Opinions upon questions relating to the election laws may, in appropriate cases, be given to a chairman of an electoral board.

(8) Authority to settle disputes.The attorney general shall have authority to compromise and settle disputes, claims, and controversies involving the interests of the Commonwealth, but only after the proposed compromise or settlement, together with the reasons therefor, have been submitted in writing to the Governor and approved by him. Where any dispute, claim, or controversy involves the interests of any State department, institution, division, commission, board, or bureau, the attorney general shall have authority to compromise and settle same provided such compromise or settlement be approved both by the Governor, in the manner above provided, and by the head of the State department, institution, division, board, or bureau which is interested.

III. SUMMARY OF THESE ACTS

It will be observed that these contain the following features : 1. Control and audit are sharply differentiated.

2. Control is placed in the executive branch under a "comptroller" appointed by the chief executive and responsible to him, in some cases through the head of the department of finance.

3. The bookkeeping and accounting system is designed and enforced by the comptroller.

4. The books are kept by the comptroller (except for supporting records which are kept in the departments and agencies).

5. Audit is placed in the hands of an "auditor” appointed by the legislative branch (or elected by the people), and entirely outside the executive branch.

6. The auditor makes only a postaudit of transactions and records and keeps no books. Though his audit is generally current, he has no authority to withhold payment or to make final settlement.

7. The attorney general has no routine part in the system of fiscal control, rendering opinions only on request. (In Virginia the power of the attorney general in settling disputes or claims in which the Commonwealth or a State department, institution, division, commission, board, or bureau are involved is further limited by the fact that such settlement must have the approval of the Governor.)

By these arrangements the executive is made accountable and responsible for fiscal administration.

IV. VIRGINIA REPORTS

As a further exhibit, I wish to submit three Virginia reports, as follows:

(1) Report of the Comptroller to the Governor of Virginia for the Year Ended June 30, 1936. (It is to be noted that this report was made on Sept. 29, only 3 months after the close of the fiscal year, a record made possible by the excellent system and machine accounting.)

(2) Annual Report of the Auditing Committee of the General Assembly and the Auditor of Public Accounts to the Governor of Virginia for the Period. October 16, 1933, to June 30, 1935 (audit reports are submitted separately).

(3) Opinions of the Attorney General and Report to the Governor of Virginia, from July 1, 1935, to June 30, 1936.

The volume contains 250 opinions. Not one of these overrules the comptroller. Only eight directly involve the comptroller; seven of these were requested by him. Each opinion is a legal construction of the statute similar to that furnished by the attorney general as chief legal adviser to other State and local officers. Only seven opinions are given on the request of the auditor.

On this basis it may be said that the attorney general of Virginia has no important routine part in the Virginia system of fiscal control.

The CHAIRMAN. The chairman will convene the committee on the return of Mr. Merriam, unless it appears that he is going to be absent too long. My understanding is that he will return as speedily as possible and I will notify the chairman of the House committee, who will notify the House members.

REORGANIZATION OF THE EXECUTIVE DEPARTMENTS

MONDAY, MARCH 8, 1937

JOINT COMMITTEE ON GOVERNMENT ORGANIZATION,

Washington, D.C. The joint committee met, Senator Robinson presiding. The CHAIRMAN. The committee will please come to order.

Mr. Brownlow and Mr. Gulick have been heard. We have Mr. Merriam with us this morning and we would like to hear him.

I should like to have Mr. Merriam, in the beginning of his statement, do what I neglected to have Mr. Brownlow and Mr. Gulick dowhat I expected to have done later-namely, state the background of his experience in studies similar to that which is now being conducted for this joint committee. Mr. Merriam, will you be good enough to proceed; and when you have given us that information, discuss the plan that the President's committee, of which you are a member, has reported.

STATEMENT OF CHARLES E. MERRIAM

Mr. MERRIAM. My experience, gentlemen, has been somewhat different from that of these other two gentlemen, although on parallel lines. I suppose you know Mr. Brownlow is the head of the Public Administration Clearing House. That is an organization that clears 15 other organizations of governing officials who are trying to work on the improvement of their traditional standards, interchanging experience, information, ideas, and so forth. These organizations are put together in what is called the P. A. C. H., the Public Administration Clearing House, of which Mr. Brownlow is the head.

presentative TABER. That is a local administration ? Mr. MERRIAM. Well, some of them are local and some of them are running up and down. The Association of Public Welfare officials would run, you see, in both ways. There is the housing officials, there is the American Officials Association, the American Association of Accounting and Finance Officials, the Council of State Governments. The latter is a State organization for State officials, State legislatures, and for interstate agreements and relations.

Mr. Brownlow himself, as you know, was for a number of years Commissioner of the District of Columbia, the manager of several cities, and is, in the strictest sense of the term, an administrative expert.

Mr. Gulick is head of the National Institute of Public Administration, New York City. Mr. Gulick has been head of the organization for about 15 years. They deal with the improvement of governmental organization primarily in States and in cities. Mr. Gulick has already explained the kind of studies that he made in Massachusetts

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