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On page 24 of this report, comment will be found on the need for an explanatory text, accompanying the budget, even though all the details be summarized and presented in the form of:
A financial program,
A balance sheet,
An operation account,
Summaries of estimates of revenues and expenditures
The significance of these summaries must be interpreted by some one. is contemplated therefore that such a presentation or interpretation would be made by the mayor as the chairman of the board of estimate, or by the board as a whole. In any event, the explanatory text would admit of minority report in case there were not concurrence of all members.
It is not thought desirable in this report to outline the subjects to be formally discussed-only to indicate that in this place an address by the board of estimate to citizens and their representatives would be found. In this report, however, it seems desirable to say something about the exhibits which follow. These are of two general classes:
1. Those which would be printed in the budget (Exhibit 1-13, inclusive)
2. Those which would appear as collateral documents (Exhibits
The first thing in a budget that should catch the eye is a summary statement of the next year's financial policy, in some such form as the following:
text as a basis for comment. It lays the foundation for discussing not only the appropriations for current expenses and the revenue requirements, but also for discussing improvements and borrowing requests, debt and sinking fund requests. The supporting details of this would be found in a schedule (see p. 93). The advantage of establishing a revenue and borrowing policy of the next fiscal year, based on the "work" needs and the prospective "financial condition" at the beginning of the year would seem to be apparent. If there has been any doubt in the past, this doubt would be removed by the recent experience and action of the board of estimate on the recent $100,000,000 loan. The city is now committed to taking into account its proposed improvements and borrowings at the time it makes its appropriations and fixes the tax rate.
Before the financial needs can be determined, consideration must be given to the work to be done. When this has been made the basis for financial action, the plan or "program" of work should be carried with it by official act. The form suggested with the resolution attached to appropriations is aimed to provide the means whereby the board of estimate will be required to assume responsibility for changes in workprogram and for keeping these changes before the citizens as well as executive officers. In submitting the budget the proposed increases and decreases in appropriations should be interpreted in terms of changes in work-program. The detail schedules showing departmental estimates and board modifications would give the other side of the picture-the changes which are thought desirable by administration officers and the action taken by the board on the requests.
A brief description of each exhibit follows:
BRIEF DESCRIPTION OF THE PURPOSE OF EACH EXHIBIT
Exhibit 1-Financial Program-With Resolution Establishing the Revenue and Borrowing Policy for the Next Fiscal Year.
This exhibit provides for showing the means by which the appropriations authorized are to be financed, i. e., it shows the sources from which the revenue is to be derived that is required to meet the appropriations and the character of the expenditure to which the classes of revenue are to be applied. The exhibit is supported by detailed statements setting forth authorized expenditures classified by organization. units and functions.
Exhibit 2-Suggested Form of Work-Program
It is intended that a work-program would be prepared which would include all departments in the general form of Exhibit 2. This exhibit would provide for showing for each organization unit of the depart
therefor in accordance with the will of the legislative body. In addition to this it provides for showing also for each activity the distribution of the amount to be expended between current expenses, upkeep of property, capital outlays, fixed charges, etc.
Exhibit 3-Suggested Form of General Fund Appropriation Ordinance It is intended that the appropriation ordinance would carry items for each department of the same general character as that shown for the Department of Health (Exhibit 1). This provides for showing the amount appropriated for each object of expenditure. The text of the ordinance would cover all.
Exhibit 4-Balance Sheet
This exhibit sets forth the condition of the current assets and liabilities. It should be produced as of the latest date possible at the time of transmittal of the budget. The surplus figure as shown by this exhibit is carried forward as a resource to the fund statement. The Philadelphia balance sheet is used as illustrative for the reason that the New York balance sheet has never been published. To the balance sheet would be added a column showing "estimated condition as of December 31."
Exhibit 5-Operation Account
The purpose of this exhibit is to set forth the relation of revenues to expenses. Here again the Philadelphia statement is used. To this would be added a column for estimate. In this statement the expenses incurred are off-set against the revenues accrued in order to ascertain the actual and prospective current deficit or surplus which is carried. forward to the surplus account (Exhibit 6).
Exhibit 6-Surplus Account
The surplus account sets forth the changes that have taken place in the amount of the surplus balance at the beginning of the year. Again the Philadelphia form is used. To this would be added a column for estimates as of December 31. These changes consist of the current deficit or surplus brought forward from the operation account and all gains or losses that are not applicable to the operations of the current year but which are in the nature of adjustments of the surplus balance as determined at the beginning of the year. The new surplus balance shown as a result of these calculations is carried forward to the balance sheet.
Exhibit 7-Debt Statement
The purpose of this statement is to show the details relating to the extent to which the city has approached its debt limit. This statement should be produced at the latest date possible at the time of transmittal