By this arrangement the institutions are not permitted to make expenditures for the quarterly period beyond the reduced amount fixed by the Governor or agency.

There are 11 States which have adopted the procedure of reducing appropriations by quarterly periods. Table 3 gives these States. classified according to whether the Governor or some other State agency is vested with the power. In the States where an agency other than the Governor has been designated to exercise the power, the particular agency together with its composition is indicated in the table.

Table 3.-States in which Governor or some State central agency is empowered to reduce appropriations by quarterly periods of fiscal year in order to avert deficit

Iowa..

North Carolina____

West Virginia............

Wisconsin...

Governor and executive council composed of Governor, secretary of state, treasurer, auditor, and secretary of agriculture.

Governor with advice and consent of advisory budget committee composed of Governor, chairman of senate finance committee, chairman of house finance committee, and 2 members appointed by Governor. State Board of Public Works composed of Governor, secretary of state, auditor, treasurer, attorney general, superintendent of free schools, and commissioner of agriculture.

State director of the budget subject to appeal to and final decision of Governor.

As evidenced by the data in table 3, the Governor alone possesses the power to reduce appropriations by quarterly periods in 7 of the States while in 1 State the power is vested in the State budget director subject to an appeal to and final decision by the Governor. In the 3 remaining States, the power is conferred on the Governor in conjunction with a council, committee, or board on which the Governor serves as a member. The agency is composed of State executive officers in 2 of the States and of representatives of the State legislature together with appointive members in 1 State. This power to reduce appropriations by quarterly periods applies to the State higher educational institutions in all the 11 States.

Detailed legal requirements with respect to the power differ in several of the States. Responsibility is placed on the State director

of the budget in Connecticut to determine whether the State revenues for the fiscal year will fall be ow the appropriations and thereby cause a deficit. Before his finding becomes effective, however, it must be approved by both the State commissioner of finance and the Governor. Correspondingly, the finding of the Governor in Iowa that State receipts will not be sufficient to pay the appropriations in full is subject to the concurrence of the executive council.

Instead of reducing the appropriations of all governmental units, including the institutions on a uniform and pro rata basis the State Board of Public Works in West Virginia must follow a special method stipulated in the statute. Under this method the appropriations for the different governmental units are divided into five classes according to what is regarded as the essential services performed by them to the public. Class 1 includes the appropriations for units collecting revenues and administering fiscal operations, such as the office of tax commissioner, auditor, treasurer, and sinking fund commissioner; class 2, those for units supervising, controlling, or directing executive policy and law enforcement, such as the office of the Governor, attorney general, and department of public safety; class 3, those for educational, charitable, and corrective institutions; class 4, those for other departments and services of the State government; and class 5, those involving transfers from the general fund.

Different percentages of reductions are prescribed for each class on a sliding scale varying from 5 percent for the first class to 25 percent for the fifth class, depending on the extent of the deficit confronting the State. The statute contains a table indicating the range of percentage reductions to be made for each class. It will be noticed that the State higher educational institutions are included in the third class, the services performed by them being ranked third among the essential functions of the West Virginia government.

In three of the States-Oklahoma, Virginia, and West Virginia— the power to reduce appropriations by quarterly periods is contained in the 1938-39 Appropriation Act. It is, therefore, effective only during the biennium covered by the act. In another State-Georgiathe power to reduce appropriations on a pro rata basis is also contained in the 1938-39 Appropriation Act, but a general statute authorizes the Governor to reduce them by quarterly periods.

Supervision or Administration of Disbursements of Appropriations by Governor or Other State Agencies.

Under the plan of fiscal control providing for the direct supervision or administration of the disbursements of appropriations after being made by the State legislature, a diversity of powers have been vested in the Governor or other State central executive agencies.

Varying from State to State, the powers prescribe a systematic method of controlling the amounts of appropriations to be disbursed over the course of the fiscal year. In addition, the powers provide for a regulatory, supervisory, or administrative control over types of disbursements for specific purposes and over individual items of disbursements out of the appropriations. The fundamental aim of the control is to restrict expenditures and effect economies in operation of the governmental units including the institutions. The more important powers conferred on the Governor or other agencies may be classified in general as follows:

(1) Approval, disapproval, or alteration of quarterly requisitions or work programs allotting appropriations.

(2) Prior approval or disapproval of all contracts involving disbursements of appropriations.

(3) Approval or disapproval of pay rolls, invoices, bills, or claims before payment.

(4) Maintenance of continuous check of disbursements of appropriations through periodical financial statements or reports. (5) Investigations of administration, operations, or activities of institutions with view of reducing expenditures.

(6) Prior approval or disapproval of appointments, promotions, and changes in salaries of officers, staff members, and employees. (7) Actual administration or making of expenditures for purchase of supplies, materials, and equipment, including printing. It is proposed here to treat only the first five classifications of powers. Quarterly requisitions or work programs allotting appropriations.Quarterly requisitions or work programs represent a comparatively new device adopted by States for centralized supervisory control of the disbursements of appropriations. It resembles in certain respects the procedure for reductions of appropriations by quarterly periods to avoid a State deficit previously described. In several of the States the statutes provide for both quarterly requisitions or work programs and for reductions of appropriations by quarterly periods.

Under this new device of control each institution is required to submit to the Governor or agency prior to the beginning of each quarter of the fiscal year, a requisition or work program for the allotment of the amount of appropriations to carry on its work during the period. Frequently the detailed purposes for which the several types of disbursements of the appropriations are proposed to be made must also be given. A printed form with detailed segregation of items of

The statutes of many of the States in establishing this plan of fiscal control state their aim or intent. For example, the New Jersey statute declares that its intent is to provide control by the Governor of State expenditures and to aid State governmental units to exercise a greater restraint in spending the money available for their uses.

In some States the legal provisions require the institutions to submit quarterly requisitions covering the entire fiscal year in advance.

disbursements is prescribed in some States for use in preparing the quarterly requisitions or work programs. The Governor or agency is vested with power in other States to prescribe the extent to which the requisitions or work programs must be itemized.

After analyzing, checking, and otherwise reviewing them from the viewpoint of the indispensability of the proposed disbursements, the Governor or agency is authorized either to approve or alter the amounts of the quarterly requisitions or work programs or the individual items included in them. The State's auditing officer is then notified of the action of the Governor or agency, and of the appropriations allotted to the institutions for disbursement during the quarterly period. This officer is prohibited from issuing warrants for payments out of the State treasury during the quarter except in accordance with the amounts and terms of the approved requisitions or work programs. The allotment of appropriations as provided by them may be subsequently revised either upon the initiative of the Governor or agency or upon specific request of the governing boards of the institutions. providing such requests are approved.

There are altogether 17 States which provide for quarterly requisitions or work programs. In table 4 are given these States classified according to whether the Governor or some State agency is vested with the power of their approval or alteration. In the States where a State agency other than the Governor exercises the power, the particular agency together with its composition is indicated in the table.

Table 4.-States in which the Governor or some State central executive agency is vested with power to approve or alter quarterly requisitions or work programs allotting appropriations

State

Alabama

Mississippi..

Power to approve or alter quarterly requisitions or work programs vested in

Virginia.
Colorado..

Maine...

Minnesota..

Governor and executive council composed of Governor secretary of State, treasurer, auditor, and attorney general.

Governor and council composed of 7 members elected in joint session by legislature.

State Commission of Administration and Finance composed of State commissioner of the budget, State comptroller, and State commissioner of purchase.

Table 4.-States in which the Governor or some State central executive agency is vested with power to approve or alter quarterly requisitions or work programs allotting appropriations—Continued

State

New Jersey.

West Virginia.

Wisconsin

Power to approve or alter quarterly requisitions or work

programs vested in

State commissioner of finance subject to appeal to and final decision by Governor.

State Board of Public Works composed of Governor, secretary of State, auditor, treasurer, attorney general, superintendent of free schools, and commissioner of agriculture.

State director of the budget subject to appeal to and final decision by Governor.

A comparison of tables 3 and 4 will disclose the States which provide for quarterly requisitions or work programs allotting appropriations for disbursement and at the same time also provide for reductions of appropriations by quarterly periods to avert a State deficit. Such States are Alabama, Missouri, North Carolina, Oregon, Utah, Virginia, West Virginia, and Wisconsin.

The legal stipulations for the detailed enforcement of the power to approve or alter quarterly requisitions or work programs of the institutions vary among the States shown in table 4. Provisions in 6 States Colorado, Maine, Mississippi, Missouri, Nebraska, and Utah-designate other State fiscal officers to assist the Governor or agency. The quarterly requisitions or work programs in these States are first submitted to the State budget director, finance commissioner, or similar budgetary officer. This official is charged with the responsibility of reviewing them, making recommendations, and advising the Governor or agency in determining whether the amounts of the quarterly requisitions or work programs of the institutions, including items of disbursements, should be approved or altered. The final authority, however, rests with the Governor or agency.

In five States Colorado, Maine, Missouri, New Jersey, and Tennessee- a special power is conferred on the Governor or agency in connection with the quarterly requisitions or work programs. Under this power the Governor or agency is authorized to set aside a reserve out of the appropriations allotted through the requisitions or work programs for the purpose of meeting emergencies. The Governor or agency may fix the exact amount of the reserve to be set aside. The reserve may be returned at any time during the fiscal year to the appropriation of the particular institution to which it belongs upon the approval of the Governor or agency. In Missouri the statute specifies that each governmental unit, including the institutions, shall set aside 3 percent of its appropriation as a reserve which is subject to disbursement or expenditure only with the approval of the Governor.

There are three States-Oregon, Pennsylvania, and West Virginiawhere the Governor or agency is empowered to fix the period for