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every appropriation is dissected according to these titles. It might be thought that one appropriation would naturally be expendable under one title, and so on. To show how far from the truth such a view is, a diagram has been drawn, in which the appropriations for the fiscal year 1917 are listed and connected by lines to the various objects of expenditure, or titles. It was found impracticable to list all the appropriations, on account of the great number of them, so the diagram includes only the most important ones by name, arranged or grouped under each bureau. The number of the remaining ones not named is also stated in each case, and all titles which pertain to these appropriations are indicated by connecting lines.

It is believed that the diagram gives a better idea of the interweaving and complication of the appropriation system than could be described by pages of writing. The fact that every title, or object of expenditure, draws funds from a great number of appropriations is clearly brought out. In other words, although there are such a great number of different sums appropriated, the objects of expenditure are relatively few, and consequently it would seem more reasonable, if separate appropriations for particular purposes are to be made, that at least but one appropriation be allowed for each purpose.

However, this does not really carry us to the root of the matter. The point to be most carefully noted in this connection is that exclusive of sums allowed for specific work, such as items under “ public works,” the amounts which we carry on our books as appropriations are in fact merely the final approved estimates of the sums which will be needed during the ensuing fiscal year for the various purposes of the naval establishment. When we solidify these estimates into fixed sums, as though we had plans and specifications for definite work ahead, we become involved in many difficulties in the practical carrying on of affairs. Especially is this true under existing conditions where the terms of many of the “ appropriations" are vague and incomprehensive, and where so much overlapping exists as to the possible objects of expenditure. Let us examine for a moment the regular course of procedure in expending the sums appropriated for the navy. As we have seen, each bureau, at the beginning of a fiscal year, has at its disposal a group of appropriations to be used in carrying on' the work in which such bureau is interested. The money must be so apportioned amongst the various yards, ships etc., that each month the

expenditures must average the correct proportion of the totals available, due regard being had to the character of the demands arising. Every effort is made to avoid obligations which will result in the overexpenditure of any given appropriation. Consequently, when it is seen that the monthly demands on such an appropriation are running ahead of the allotted sums, costs which would otherwise be charged to this appropriation are located under other appropriations which, as has been explained in preceding paragraphs, are also chargeable with such expenditures. Attention is largely concentrated on keeping accurate records showing the available balances of the sources of funds (i. e., the appropriations), rather than on clearly showing the exact objects for which sums are expended. It is true that the objects of expenditure are faithfully recorded through the cost accounting system, but their importance is diminished owing to the interest in the appropriation accounting.

The acounting instructions, in treating of this matter at some length, conclude as follows:

Appropriation charges show the source or legal authorization for the expenditure of the various sums of money devoted to output and maintenance. Cost charges show the disposition of the money, the final resting place of values. The two classifications are independent and cannot be made identical without impairing the legality of one or the correctness and administrative value of the other. The cost of an item of output cannot be correctly determined except by taking into consideration the elements thereof contributed by numerous appropriations.

Now the bureaus concerned, being mainly interested in the charges to their appropriations, do not follow with equal attention the question of costs under the various expenditure heads, especially since those accumulated costs affect a variety of appropriations with many of which a given bureau is not concerned. A glance at the diagram gives some idea of the extent to which this diffusion of sources is carried. It does not tell the whole story, however, as it does not bring out the facts relating to individual pieces of work, or jobs. Not only is it true that several appropriations have charged to them jobs of similar nature, but also it is necessary that the cost of any single job be made up of charges from a variety of appropriations. The resulting complexity is obvious.

Imagine an industrial plant which, in additon to the usual plan of exhibiting its receipts and expenditures in all the detail necessary to give a clear and comprehensive understanding of

the business conducted, including a complete cost system, also endeavored to show how every element of income was distributed, tracing each sum received in such a way as to indicate the final disposition of every sum throughout the multiplication of bookkeeping details. Such a plant might then be in position to answer a question like this: “You have spent $10,000 for repairs to buildings. Where did you get the money?" The answer would be: “ The sum spent for repairs to buildings was obtained thus : Sales to Wm. Smith & Co., $43.10, interest on investments $7.42, merchandise account $8421, royalties account $3.02, and so on through a list of receipts. Such a system would be well-nigh impossible and perfectly useless. It would, however, be closely similar to our naval appropriation cost accounting system, where actually more attention is given to following the status and distribution of the sources of supply (the appropriations) than to the objects of expenditure.

To improve conditions the first step would be to have all estimates submitted under the same headings as those used for the final expenditures themselves. In this connection the following is quoted from the conference on accounting, June, 1914:

It will not be possible to put into effect an entirely suitable and satisfactory system until the methods and classifications used in submitting estimates to Congress and the wording of appropriation bills are correspondingly modified and revised so that all estimating, appropriating accounting instructions are harmonized and so that identical terms, classifications and meanings will exist throughout.

However, even were estimates submitted under the logical headings provided by the accounting system, if these estimates after approval were embodied into appropriations, as the present estimates are, the situation would be only slightly improved. There would still remain the fact that several distinct sources of supply of funds have to be entered on the treasury books, and that complications would exist due to the necessity of tracing each source to its final disposition, as well as analyzing each expenditure head, to show whether two or more appropriations were involved. The real cure for our troubles is to let estimates remain estimates and not to convert them into separate and distinct appropriations at all, except that the total of all estimates would make the total of the Naval Appropriation Act.

Is any advantage, in the way of strict accountability or accurate information to Congress, gained by the present system of

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