For this purpose it is thought that there should be three documents or subdivisions, viz.: 1. A detailed analysis of estimated revenues 2. A detailed analysis of estimated cost of work 3. A detailed analysis of things to be bought and prices to be paid Detailed Analysis of Estimated Revenues Supporting the summary of revenue estimates, a detailed analysis could be prepared and submitted which would show the amounts of estimated revenues for the current year and the next ensuing year by classes, compared with the actual revenues for the last two completed years. This should be minute enough in its items to show under each class what amount of revenues accrue within each department, bureau, or office. For example, the total revenues from licenses which would be shown in the summary would be further analyzed in the detailed schedules as amounts collected from each kind of license in each of the several offices of the city. These estimated amounts for the current and ensuing years would be shown in comparison with the actual revenues raised from each of the several sources during the two preceding years. Detailed Analysis of Cost of Proposed Work Supporting the summary of expenditures showing the work program would be a detailed schedule or analysis of each function, activity, or process within each organization unit. This analysis would give the total cost and the unit cost wherever ståndards were established. It would bring together in tabular form the results developed through the expense and cost ledgers kept in the several departments. This would not only furnish an analysis of totals expended under the direction of each officer, but would also supply exact information as to what was done with the "personal services," "supplies," "materials," "equipment," etc., purchased for use by means of appropriations. The total cost of each function would be needed to resolve the work program into terms of dollars and cents. The standard unit cost would be needed to show the efficiency of the management requesting the appropriations. To this end a comparison would be instituted of cost of each process in terms of standard units, such as cost of foot-pounds," ton miles," "patient days," "horse days," etc., so that definite, comparable information would be available as to the cost of rendering public service during the expired months of the current year as compared with units of cost for each preceding year. With these facts available the estimates could also be resolved into units of result and cost per unit as a standard which the management was proposing to live up to. " Efficiency of management and economy of public resources must stand two standard tests, viz.: 1. Economy of purchase (or efficiency in trading). In addition to the analysis described which would show comparatively cost of work performed and to be performed, therefore, another analysis is needed which goes to each kind of thing purchased or to be purchased, and the price paid or to be paid. This presumes exact specifications for supplies, materials and equipment; it presumes an analysis of expenditures in such detail as to enable the citizens and officers to determine whether the prices paid for standard things were reasonable and just. Such an analysis would be of value not only at budget time; it would also be of great benefit in the administration of a departmental purchasing office or central purchasing agency for the city, and in the current inspection and audit of bills. Furthermore, the analysis itself would be of increasing value in perfecting the standardization of specifications, and in building up a favorable trading character or reputation, which would stimulate competition and better buying. Volume of Proposed Budget From the foregoing description of what a budget should contain it may be thought that it would add much to the present size. On the contrary, it would materially reduce the volume. The appropriation ordinance would be reduced to not over one-fifth, and might be reduced to one-twentieth of the size of the present ordinance. The first six summaries would require less than 10 pages. The other summaries and schedules might require 150 pages. In any event the printing need not exceed one-half the present volume. With decreased volume, therefore, the citizen or officer would have in a few first pages, summaries and analyses by means of which he could see things in perspective. 1. He could know the present financial condition and how this would affect the next year's plans 2. He would know what had been the past relations of revenues 3. He would have an analysis of past and prospective surpluses 5. He would know the significance of estimates both of revenues for efficiency and economy of past management, and to judge of the desirability of proposals. All of these data are now lacking, the only thing submitted being an appropriation ordinance, and this in a minuteness of detail that both challenges consideration and defeats the ends of management. CHAPTER II ADVANTAGES TO BE GAINED THROUGH PROPOSED CHANGES IN THE FORM OF APPROPRIATION ORDINANCE The futility of attempting to include in an act of appropriation all of the classification and itemization necessary to describe each function or activity and each object of expenditure by each organization unit has been realized by the board of estimate and apportionment, as is shown by its changing attitude during the last two years. Beginning of Budget Revision in New York In the statement made above that the only thing submitted by the board of estimate and apportionment is an appropriation ordinance, no hostile criticism is intended. We are dealing with a product of evolution. Prior to 1909 little thought was given to the subject of budget-making, except by the commission which framed the provisions of the charter of the City of Greater New York, and in the charter itself some confusion of terms may be found. In 1909 a movement was begun to enable citizens and officers to use departmental estimates and the budget as an instrument of publicity. It was urged that these documents should be the means each year of knowing what officers had been doing, what they proposed to do, whether their proposals should be supported or opposed at the annual "hearings" and in the press; in short, lay the foundation for enforcing administrative accountability and clearly defiuing responsibility with respect both to legislative policy and administrative efficiency in the conduct of the affairs of the city. Efforts to Make the Budget an Instrument of Publicity Prior to 1909 the requests for appropriations and budget items were in such form that they could not be understood except by the person who prepared a particular section or item, nor were the accounts of the several departments and offices kept in such manner that information about the cost of each of the several activities could be determined without a long process of special inquiry. During the four succeeding years (1910-1913) all efforts were turned toward making the budget an effective instrument of publicity. Begin segregation of items by functions." This, interpreted in language used by the average citizen, means that the budget should show the amounts requested for each kind of work to be done or public service which it was thought should be rendered. It was urged that since the board of estimate, acting as an executive committee, was responsible for preparing a budget," it should prepare an appropriation ordinance and explain the items in terms which the average person could understand. Neither the average citizen nor the board of aldermen can understand a request in an appropriation bill for "the mayoralty," "board of water commissioners," or department of water supply, gas and electricity." Only those in close personal touch with these offices or departments would know what work would be authorized by these titles. Amounts requested for "milk inspection," for "the operation of vaccine laboratories," and for "collection of water revenues," however, could be understood. It was urged, therefore, that the budget should provide for explaining requests in terms of work at present done and work proposed which would be analyzed by functions. Analysis by Functions During the first year of budget revision (1909) only a small beginning was made in analyzing requests for appropriations and costs by functions. During 1910, 1911, and 1912 the work of installation of accounts which would show how much was spent for each "function" or kind of work was carried forward so that by 1913 every item in the estimates and every item in the "budget" prepared and submitted by the board of estimate and apportionment was "functionalized." This was the final attainment for which the department of finance and the board of estimate and apportionment had contended against considerable odds for some five years. From time to time it was urged that the analysis of expenses, or cost by functions, should be obtained through expense and cost accounts, and that this compilation should be used as data supporting appropriation accounts. It was thought, however, that the most direct way to obtain standard classification was through the appropriations. Thus, by reason of its itemization, the act of appropriation and schedules attached which were passed in 1913 required a quarto volume of 836 pages to print. Impracticability of Act of Appropriation for 1913 The impracticability of this extreme itemization of the act of appropriation for 1913 is illustrated both by the classification of "personal services" to show the number of persons, the positions and salaries allowed for each kind of work in each department or office, and the |