13. Budget have seen that the first step is to have estimates from department heads and to require that these estimates be properly sup ported by explanatory schedules and comparative statements of results in previous years. After the departmental estimates have been turned in, an inde pendent investigation should be conducted by the budget commission or its representatives ; this investi gation may be collateral with the preparation of the departmental estimates. In the final hearings on the budget, publicity is a prime essential. The com plaints or suggestions of citizens should be given due consideration.
After receiving reports from the investigators and hearing the public criticisms, the commission or body charged with the duty of preparing the budget will set the maximum limit for budget appropriation. Departmental heads will be consulted when it is pro posed to reduce any budget appropriation. In cer tain cases, the hands of a budget commission are tied by a state legislature because of the passage of special enabling acts or mandatory provisions. The budget is then usually submitted to a legislative board, which board has usually the power to reduce but not to in crease the appropriations.
14. Determining the tax rate.—Notwithstanding popular opinion, city officials in a single year can do very little toward increasing or decreasing the tax rate. -Many of the' expenditures are fixed in amount and cannot be affected by the actions of the city offi cials. For instance, interest on municipal debts, sinking fund contributions, and the municipality's share of the state or county taxes are entirely out side the control of the municipality. On the other hand, certain expenditures have been made manda tory by state legislatures, and many others are semi fixed because of their very nature.
At regular intervals during the fiscal year, reports should be published showing the amounts appro priated for the use of the various departments, the amount expended by the departments to date, the commitments against any appropriation to date even tho the expenditure has not, as yet, been actually paid in cash, and finally, the unexpended balance of the appropriation. Whenever work schedules form part of the budget, then the actual results accomplished should be set off against the work schedules.
15. Transfers and changes in the budget commission, or other board, having power to check up the operation of the budget, should also have full facilities for examining into details. They should
be empowered to approve of changes in policies and able to increase appropriations where necessary. They should also authorize the transfer of funds when such a step is advisable. In this connection, it would be well to state that any transfer of funds from one appropriation account to another or from one department to another, should be made only after the relative needs• of each department or each func tion have been carefully examined.
16. Providing in the budget for unforeseen needs. —It will frequently happen that estimates at the be ginning of a period will not be strictly applicable thru out the period. Unforeseen needs will arise in con nection with some function, or, certain other functions may be over-estimated; for example, a serious epi demic might exhaust the funds of the health de partment and make necessary an increase in the ap propriation. The accounting records will show all the surplus funds either of an individual department or of the city as a whole. The governing board hav ing charge of the preparation of the budget or its operation, should have power to re-allot these un distributed portions wherever extra or unforeseen needs arise.
17. Other public related to the subject of municipal budgets is the use of budgets in the county, state and federal governments. The conditions here are so different from those in cities that the need of budget reform has not been so notice able. Indirect taxation, which furnishes most of the revenues of such bodies, is not felt by the public and is not a subject of such direct importance to them. The tendency of the officials of such governmental bodies has been to spend the amount of the revenue received rather than to reduce the tax rate, because indirect taxation usually brings in an indefinite and frequently an excessive revenue. The budget sys tem, however, is just as essential for these forms of government and should be carried out.
18. Some fundamentals in budget While the methods followed in interpreting budgets by officials, or by taxpayers, will vary with the budget system and with the individual conditions of each lo cality, the reader will note a few fundamental points which should be observed.