jA A800 A1 11927 ANNUAL REPORT OF THE STATE AUDITOR TO HIS EXCELLENCY HON CLIFFORD WALKER GOVERNOR AND svsX v A VA MEMBERS OF THE GENERAL ASSEMBLY TATE OF GEORGIATHE LIBRARY OF THE UNIVERSITY OF GEORGIAaMaaaaaa mMik 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 7 I M mm GAYLAMOUNT PAMPHLET BINDER Manufactured by I GAYLORD BROSInc Syracuse N Y Stockton Calif JNIVERSITY OF GEORGIA LIBRARIES 3 510A D5357 5bSD