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11927
ANNUAL REPORT
OF THE
STATE AUDITOR
TO
HIS EXCELLENCY
HON CLIFFORD WALKER
GOVERNOR
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REPORT OF THE STATE AUDITOR
TO HIS EXCELLENCY HON CLIFFORD WALKER
GOVERNOR OF GEORGIA AND TO THE
HONORABLE MEMBERS OF THE
GENERAL ASSEMBLY
I have the honor to transmit the report of the De
partment of Audits and Accounts in compliance with law
and to suggest certain changes in the States fiscal and
administrative system
Detailed Audits
The detailed audits and reports of the departments
institutions offices commissions and bureaus of the State
government are on file in this office and in the office of
the Governor These reports with certain recommenda
tions therein made constitute the detailed report of the
State Auditor with regard to the financial transactions
of every organization unit made upon careful audit
While these are the basis of the specific recommenda
tions now to be made and are subject to inspection by
any member of the General Assembly I would like to em
phasize a few of our most urgent needs within the pur
view of the States financial and administrative system
and lead to a discussion of how we may improve this field
General
At the outset the government of the State is not a
business to produce profit it is an organization to serve
the people It functions well and wisely however when
it functions with businesslike efficiency and economy I
do not hesitate to say therefore that Georgias problems
are to be solved by an appraisement of the present sys
tem an intelligent survey and the application of business
principles to produce better service in government
Our present problem of State finance is going to
challenge the earnest thought of the General Asembly
for with the present scale of appropriations for the
biennium 19261927 though we shall close the year
1927 practically free from current debt provided no defic
iency appropriations are made to be paid from 1927 in
come the revenue for the next biennium will not equal
present appropriations without additional taxation
We appropriate now from the general fund twelve
millions dollars a year and our income for the next bi
ennium to the general fund will be approximately ten and

a half millions The State lost in 1927 the onecent gaso
line tax which now goes to highways approximating
150000000 thus lost to the general fund and the W
A rentals amounting to 54000000 a year for the
years 1928 to 1935 inclusive discounted for payment of
past due pensions
The attempt to make income and appropriations
match will be a problem You will be confronted with
many worthy pleas for increased appropriations The
problem can be solved by tax increases but I hope to dis
cuss the question how we can without increased taxation
make funds available to efficient and worthy departments
and institutions by decreasing expenses cutting down
waste consolidating activities effecting savings in pur
chases and by changes in the financial system
Consolidation of Collection and Disbursing Units
In the first place all income from whatever source
and whatever kind should go into the general fund ex
cept such income as represents special service for an indi
vidual as tuition fees board and sales of products at insti
tutions and all departments and institutions of the State
government should be supported by an appropriation
This means that there shall be no special funds I
take the view that it would be manifestly unfair if the
Leislature in view of the decrease in income for the gen
eral fund should determine to cut appropriations while
other departments are supported in comparative affluence
from special funds
Should this legislation fail to pass then there is a
measure designed to save large sums in interest which
ought to be enacted All funds general and special that
is all State revenue should be imbursed to the State
treasury and all disbursements be made on warrant of
the Governor with the right and power in the Chief Ex
ecutive to impress or to use any funds that is special
funds when in the treasury to the extent of his borrow
ing power for the payment of school teachers Under the
present system special funds collected largely in a few
months lie idle and untouched in the treasury while the
State has to borrow money to pay school teachers Under
the proposed plan the special funds may be impressed
for temporary needs anticipating the collection of gener
al revenue and postDoing the dates and shortening the
terms of loans and effecting a saving of at least 100000
in interest charges per annum
NOV 11943
Reversion to Treasury of Unused Special Funds
During Calendar Year
Salutary legislation could be passed requiring the
departments supported by special funds funds which the
said departments collect and expend with no control over
them to turn into the general treasury the excess of funds
over the expenses of the department or board thirty days
after the close of the calendar year We have some de
partments with savings accounts I approve of saving
rather than spending but this money should be placed
in the general fund in the treasury
These are a few changes that could be effected in
our disbursing system The Treasurys office and
staff should be enlarged by constitutional amendment to
take care of a centralized and modernized disbursing
system
There should be uniformity of collections of all rev
enue All funds should be collected by one central au
thority under one control The central collecting agency
should take over the many collecting agencies and turn
all income into the State treasury
These two important functions collecting and dis
bursing should be under two major departments only
The details can be worked out As an instance of savings
effected
In the audit of the ComptrollerGenerals depart
ment I have explained in detail a complete plan for a
check on county tax collectors settlements We have
sent one auditor in an effort to collect delinquent taxes
and in a year there has been turned into the treasury
nearly 4000000 In one year three auditors could turn
into the treasury net of expenses 12500000 annually
of delinquent ad valorem taxes
The gasoline tax which has now reached high pro
portions about 600000000 annually should be collect
ed monthly instead of quarterly Oil companies at times
under quarterly settlements owe startling amounts and
every now and then a small company fails owing the
State and having no assets It would impose no hardship
as oil companies make monthly reports to home offices
and the tax is not paid until it has been collected from
the consumer The transfer of this tax to the treasury
monthly will add practically 50000000 to the treasury
balance and add 1000000 to the States income In addition all distribution of gasoline should be required to
register as such in Comptrollers office and file indemnity
bond
Pensions
A change in the method of pension payments would
produce a saving of about 1500000 a year by the sim
ple mthod of payments direct by check instead of through
ordinaries Instead of paying a fee of 200 per pensioner
to the ordinary or about 2000000 a year checks could
be mailed direct at a cost of 500000 and we could se
cure better receipts through the clearing of checks
through banks
Oil Inspection
The oil inspection fee should be divorced from the
Department of Agriculture This fee should be collected
in the central collecting office With the distillation test
substituted for the gravity test and the inspectors cut
from 190 to the smallest possible number we would save
10000000 a year to the State The laboratory for the
distillation test should be at a school of technology and
engineering school for three reasons This scientific work
could be more efficiently done at a college second the
educational value to our young men in practical work
third it will enable us to materially increase our approp
riation to our Engineering and Technological School with
out additional burden of taxation
Fertilizer Inspection
The fertilizer tag tax should be collected by the cen
tral collecting agency divorcing it from the Department
of agriculture and the test should be made at a college
fully equipped to teach agricultural science for the same
reasons as above stated This would result in a sub
stantial saving and the General Assembly would be en
abled to materially increase the appropriation to our col
lege equipped to teach agricultural science without strain
upon income
I have suggested ways of reducing costs at some
points and thus releasing funds for better service in other
directions If we are to make governmental service most
efficient the General Assembly of 1927 has a wonderful
opportunity We learn from business that today is the
day of consolidation avoidance of duplication of activi
ties and small economies which mean increased profits
and servicesReorganization of the Administrative functions
of the Executive Branch
The State could reorganize its fiscal and adminis
trative system and coordinate and reduce in number all
activities into twelve or fourteen major departments with
the Executive in charge and the following subdivisions as
a basisunder which grouping all of our present activi
ties can be placed
Education Health and Hygiene
Highways Penal and Corrective
Finance Eleemosynary
AgriSre Labor and Industry
Corporations Law
Conservation State
This affects only the Executive Branch through administrat
ive heads and recognizes the threefold division of power and au
thority under our Constitution the legislative the judiciary and
the executive with administrative heads
There should be a modern executive budget law in
this State By this I mean a law should be well drawn
creating a Director of the Budget and requiring that all
appropriations be made under the budget law Any bud
get law without authority in the Director is of no perma
ent benefit The present budget and investigating com
mittee simply receive the requests for appropriations and
passes on them in the light of present appropriations and
anticipated income
There should be a centralized system of purchasing
under a Board of Control I would like to see small sup
plies standardized and stocked by the State and large
equipment let to contract Coal and many other supplies
could be purchased in large quantities at considerable
savings The elasticity feature must be recognized in
the case of certain purchases at certain institutions
Now these three modern plans i e the reorganiza
tion the executive budget and the control of purchasing
require the painstaking and sympathetic thought and con
sideration of our representatives As a beginning an ef
ficiency commission could be set up by this Legislature
with the right to employ technical and expert assistance
in working out the plan I am opposed to any commission
that is not set up by legislative authority and does not
number among its members some legislators The most
100759useful commissions have existed when the legislature
named five the chief executive two with two fiscal offic
ers and the Governor exofficio members This would pre
vent the copying of laws of other states and yet to em
body all new functions that are desirable without top
heaviness
The Auditor wishes to again emphasize the fact that
the fiscal officials have often had a vexatious problem in
attempting to hold the various departments and institu
tions within the limit of their appropriations An individu
al is wise who lives within his means Most states have
penalties for officials who exceed their appropriations
and such penalties are salutary I want to say that we
can never hope to make progress in Georgia until an of
ficial learns that the department or institution must live
within the appropriation
Deficiency appropriations except those for acute and
unforseen emergencies encourage extravagance in office
rewards the official who disobeys legislative instructions
and penalized the one who lives within the limits pre
scribed
For what sound reason does the Legislature struggle
with an appropriation act dividing the income to the
various units according to the needs and in their best
judgment and then pat the man on the back who disobeys
their instruction with a deficiency appropriation
Educational Survey
We are much criticized about our appropriations to
higher education and no one who loves his State could be
thoroughly satisfied with conditions existing as to our
higher educational system I do not believe that abuse
and criticism and invidious comparison with other states
can solve the problem Let us face facts
We are appropriating 133475000 to the Universi
ty and its branches or 65 of the total amount that is
given by the one South Atlantic State that appropriates
most Yet many of our appropriations to our different
educational units are pitifully small as compared with
other states similar units What is the answer Ten is the
greatest number of state colleges in any of these states
Georgia has twentyfour
Can Georgia feed twentyfour hungry colleges This
invites consideration and study when other states are
now reducing colleges by consolidation and elimination
6Of course I realize I am discussing this question from
the financial end and the educator approaches it from
another viewpoint
Can we not secure a survey of the educational system
and institutions in this State and map out a schedule of
what we should undertake educationally how many
large wellequipped colleges would be required to carry
out this plan and the amount of money required to main
tain and equip this system We need concerted action to
secure this result
The Auditor is no educational expert and is not dis
cussing this question from that angle but looking at our
population our resources our taxable values the Auditor
sees no hope of adequate support for twentyfour colleges
of various types and grades
The question is whether we shall have a smaller num
ber of wellequipped wellsupported colleges and a large
university whose curricula and whose faculty could amp
ly provide for the boys and girls or shall we limp along
with twentyfour schools and colleges meagerly main
tained poorly equipped and every year have the message
go out as to how illsupported and poorly equipped are
our colleges
I believe that an educational survey commission
should be authorized by this Legislature and that at least
five members should come from the Legislature two from
the educational group two from citizens of the State who
are business men with the public welfare at heart the
Chancellor of the University the Superintendent of Pub
lic Instruction two fiscal officers of the State and the
Governor exofficio and that this Commission undertake
this survey with the right and with sufficient funds to
employ educational experts advice particularly that of
the Federal government and the General Educational
Board who should study the local conditions As a result
of this survey we should know what is the matter what is
required and then we should at once apply the remedy
and raise the money
I know that local pride and fear have operated to
keep such a survey from being made but I believe now
all will cooperate Much good work has been done in
the past but still the limitations upon former commissions
prevented anything much beyond a discussion of the
needs of various colleges but we want to go deeper and
find out what is necessary to give our boys and girls thebest educational facilities upon the least wasteful most
economical plan and when we do this the money will be
provided A complete survey might reveal other than
financial ills in our educational system
In concluding these recommendations I feel that it
is but right I should express thanks for the support I have
received from the Governor and for the attitude of the
heads of departments boards and institutions I have
been treated with uniform courtesy and consideration
The members of the General Assembly personally and as
a body have treated this Department with every consid
eration The press of the state have given largely of their
space in carrying details of audits and such publicity in
my opinion has been very salutary
Conclusion
In a review of three years it can be seen that much
progress has been made but the goal is still far ahead of
us
The Legislature will have much important business
before it I firmly believe that you will without bitterness
and rancor dispatch the same for the good of Georgia I
think you are going to enact prudent and carefully
planned laws The Governor who shall counsel and ad
vise with you will in my judgment cooperate in every
way to help you The Auditor is anxious to cooperate
with the executive and legislative branches to his furth
est capacity to improve State government to secure one
hundred cents in value for every dollar of tax money ex
pended
Respectfully submitted
S J SLATE
State Auditorwmmm
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