8. A variation of the lump-sum budget plan.— Under this method, the appropriation is not arbi trarily fixed for the entire year. In order to obtain the advantages of the segregated budget and the flexi bility of the lump-sum budget, the budget commis sion will make quarterly allotments of the appropria tion for the necessary purposes during that quarter. This practically results in a quarterly examination of the department and its needs. The allotment cannot be made unless the budget commission is thoroly fa miliar with the conditions and plans of the depart ment. It results in a segregated budget, or, rather, a classification of expenses for the ensuing quarter.
9. The essentials of municipal budget preparation. —In the first place, it is necessary in the, preparation of a budget that the transactions of previous years be compared and used as a basis for the appropriation for the ensuing period. The estimates should give details with such minuteness and in accordance with such standard classifications as will enable the com parison to be made. Second, estimates should be pre pared by department heads with the aid of their sub ordinates. As in a private business, every opinion of weight in the division or department should be called for at the time the estimates of the budget are first being made up. Third, the estimates should be sub sequently examined and investigated by some person who is familiar with the details and needs of each de partment but who is not connected with any of them. This may require the services of an independent in vestigation bureau. Fourth, the estimates should be considered at public hearings at which interested tax payers may discuss any details to which they object or in which they are otherwise interested. Fifth, the budget should not grant a lump sum to any depart ment which it may spend in any way it pleases. The budget should be segregated sufficiently to allow a reasonable check on the actions of the department heads. The department head should be required to make the best use of whatever funds are at his dis posal. Sixth, the budget must be founded on law and based upon clear and honest accounting records.
10. Legal foundation for budget be successful in operation, a budget, no matter what its form, must be founded on law. Its features of administrative and financial control will not operate to any advantage unless they are compulsory. -His tory furnishes one or two instances where the chief executive has tried to follow out a budget plan with out securing the passage of a budget law. His at tempts, while commendable, were not successful be cause he could not secure the cooperation of the legislative body and of his subordinates. The law
prescribing a system of budget preparation must be complete in all details and must lay down the rules of procedure in the most minute degree. The tempta tions of public positions will frequently turn honest men into dishonest public employes unless some legal and capable check is placed on their work.
11. The accounting foundation in budget making. —A proper accounting system is equally important. If the legal statutes pertaining to a budget system cover the accounting procedure, so much the better. A comprehensive accounting system, providing com plete information regarding the detailed operation of every department, is necessary. Standard accounts and a uniform classification of expenditures for the various departments should be required. The records of actual expenditures of previous periods should be available for comparison with the estimated expendi ture for subsequent periods.
12. Statistical methods in connection with budget reports.—In municipal transactions the personal and financial elements are of equal importance. Personal ,,ervice records of all employes, with detailed informa tion as to their ability and past records, should be kept. Positions should be standardized and classified by competent investigators. It is not easy to find the right type of men to do this work, and much of the criticism that has been leveled at bureaus of standards is justified, because of the incapacity of those who have been entrusted with t4is work. There is a large field for the development of the use of statistical meth ods in connection with budget reports. Department heads, in submitting their departmental estimates, and the budget commissions, in presenting a complete budget to the legislative body or to the public, should make use of graphic exhibits. Important points that would be lost in the maze of figures will show up far more clearly if pictured in graphic form. Unit costs, wherever obtainable, compared with the results of previous years, will often be interesting. Charts of the intangible results obtained from the operations of various departments will measure to some extent the efficiency of these departments. For instance, the exhibit of the fire department might chart the number of fires during the year, the amount of fire loss for each year, and comparative figures with the results in other cities. The police exhibit, the health exhibit, etc., might take much the same form. The savings made in operating expenses, thru the use of modern mechanical aids to bookkeeping and record ing, might also be illustrated.