The State Examiner of Wyoming
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This thesis, having been approved by the special Faculty Com mittee , is accepted by the Graduate School o f the University o f W yom ing , in p a rtial fu lfillm e n t o f the requirements fo r the degree o f
Master of Arts___ —
.___
Dean of the Graduate School.
Date
Max__2_6,__l2izQ._
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THE STATE EXAMINER OF WYOMING
by William Newton Logan
A Thesis Submitted, to the Department of Political Science and the Graduate School of the University of Wyoming in Partial Fulfillment of Requirements for the Degree of Master of Arts
University of Wyoming Laramie, Wyoming June, 1950
LIBRARY OF THE
OF WYOMING feARAMJE
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UMI N um ber: E P 22854
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Hebcrd Tvcotu
TABLE OF CONTENTS Chapter I. II.
Page ..............................
1
STATUS OF THE STATE E X A M I N E R ................
8
HISTORY
Legislative Provisions III.
IV.
....................
DUTIES AND POWERS OF THE STATE EXAMINER . . . .
8 23
Bank E x a m i n a t i o n ..........................
23
State I n s t i t u t i o n s ........................
32
S chools..................................
33
Hospitals................................
41
Counties and C i t i e s ......................
42
Irrigation and Drainage Districts ........
48
B U D G E T S ...................................... Development in the United States
50
..........
51
Essentials of the B u d g e t ..................
53
Role of the Budget in W y o m i n g ..............
54
Wyoming Municipal Budget Act
..............
69
................
74
Wyoming Budget Officers' School ............
76
Explanation of Problems ..................
78
V. PROBLEMS OF FINANCIAL CONTROL................
87
VI. ^SUMMARY...................................... ^v BIBLIOGRAPHY ......................................
93
A P P E N D I C E S ........................................
102
Budget Controls in Wyoming
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99
PREFACE The laws of Wyoming provide for most of the essential element of effective financial administration.
Statutes ex
ist relating to budgeting, uniform accounting, pre-auditing, post-auditing, taxation and revenue.
Their form and content
is such as to indicate that in matters of financial admini stration the State of Wyoming is progressive and has a high standard of financial management; however, there is room for improvement. Governmental activity and service have expanded tremendous ly in recent years.
This has had a direct bearing on the acti
vities of the state examiner's office.
More numerous agencies
with more detailed activities require more time and personnel to make examinations.
At present the state examiner has the
responsibility of examining approximately eight hundred poli tical sub-divisions in addition to various state banks and loan associations. In keeping with this growth and development, the state examiner has endeavored to revise the individual examinations in order that a more comprehensive and complete coverage of the books and records can be had. The State of Wyoming has been more fortunate than several of her sister states in that there have been fewer defalcations among public officials in recent years.
One contributing factor
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iv to the situation is the constant supervision and examinations of the several public offices by the state examiner’s office. To keep this record intact and to properly supervise the vari ous municipal offices the thorough evaluation and support of the state examiner must be continued. In preparing this thesis the method of direct approach was employed.
An evaluation, embracing the important functions of
the state examiner's office is presented.
Whenever possible
original documents were employed in securing data pertinent to the thesis.
The secretary of state’s office was most coopera
tive in making available the original records and papers. Personal interviews were resorted to when necessary to verify and enrich parts of the study. Acknowledgment is made to all whose suggestions and aid made easier the writing of this thesis.
Especially do I want
to thank Dr. Herman H. Trachsel for his untiring efforts as director.
His patience and advice have been more than helpful.
Appreciation for assistance and kindly suggestions is also extended to Dr. Ralph M. Wade.
Dr. S. Laird Swagert of San
Jose State College, San Jose, California furnished advice and inspiration to continue on to the master's degree.
I want to
thank State Examiner Morris E. Hartwell and his staff for every courtesy extended in my behalf.
Their advice and sug
gestions have been of immeasureable value.
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CHAPTER I HISTORY The necessity of regulating hanking was recognized early in Wyoming.
Mr. William H. Holliday of Albany County intro
duced a bill for this purpose in the tenth territorial legis lative assembly in January 1888.
The bill provided for the
organization, management, and control of banks, banking insti tutions, savings banks, and loan and trust companies.
It was
enacted into law by the territorial legislature and signed by Territorial Governor Thomas Moonlight on March 9, 1888.^ Thus was enacted the first legislation to control the banking institutions of the state.
As such it was the fore-runner of
our present state examiner, who is the chief bank examining officer of the State of Wyoming. On February 13, 1888 Mr. Holliday introduced an addi tional bill designated to strengthen banking control.
It
provided for the appointment of a public examiner for the territory of Wyoming and prescribed, his duties.
He was to
serve for a term of two years and be under the administra tion of the state auditor.
The bill was referred to a com-
^Journal of the Council of the Tenth Regular Assembly of the Territory of Wyoming, Cheyenne, Jan. 10, 1888, pp. 22, 231.
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mittee for consideration.
There was no further communica
tion on the public examiner bill until February 29, 1888 when Mr. Holliday moved that the bill be laid on the table from which it never emerged.
p
In his message to the eleventh territorial assembly, Governor Francis E. Warren again recommended, to the legis•X
lature, a plan creating the office of public examiner. Governor Warren suggested that the public examiner have the authority to examine the records of all territorial and county officials, and the banks, incorporated under the laws of the territory.
This was for the purpose of preventing
irregularities that were likely to occur in the administra tion of public business.
Another great advantage that would
arise from the creation of the office of public examiner would be in having a uniform system of public accounting affording a valuable means of comparison between the expendi tures of different counties.
The office of public examiner
was later to be called the state examiner. Governor Warren stated the duties and powers for the proposed state examiner in his address, which said,
"The
legislature shall provide for a State examiner, who shall be appointed by the governor and confirmed by the Senate. His duty shall be to examine the accounts of the State
2Ibid., p. 107. ^Messages of the Governors, 1869-1 8 9 0 . p. 39, Francis E. Warren1s report to the Eleventh Assembly.
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3 treasurer, supreme court clerk, district court clerks, and all county treasurers, and treasurers of such other public institutions as the law may require, and shall perform such other duties as the legislature may prescribe.
He shall re
port at least once each year, and oftener if required, to such officers as are designated by the legislature. compensation shall be fixed by law.1,4
His
The eleventh legis
lative assembly did not enact a bill creating the office of state examiner. In the meeting of the first legislative assembly, November 14, 1890, on the third day of business, the follow ing message was received from Governor Francis E. Warren. “The constitution permits the appointment of a State Ex aminer, an office originating in Minnesota, but which has since found favor in several of the States.
In the first
mentioned State the Public Examiner has a supervisory power over banks, public institutions, county treasurer's, and other offices, by means of which a uniform system of ac counting is enforced for all public funds, and safety is insured." Nothing more was done on this matter pretaining to the
4
Ibid., p. 39.
5 Journal of the House of Representatives of the First Legislative Assembly. State of Wyoming, p. 53; Message of the Governor, Francis E. Warren's report to the First Legislative Assembly of the State of Wyoming, November 12, 1890.
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state examiner until December 15, 1890 when G-eorge East of Laramie County, made known his intentions to submit a bill creating the office of state examiner, defining his duties and powers, prescribing his bond, and fixing his compensatlon.
6
On the twenty-second of December 1890 the bill was
formally introduced in the house chamber and read the first time and referred to committee.
7
On instructions from the
committee the order was given for the bill to be printed on December 23, 1890, the thirty-fourth day of meeting.®
This
was the last correspondence about the proposed state ex aminer position in the house journal. In the senate, on the forty-second day of meeting of the first legislative assembly, Mr. John McCormick of Sheridan county introduced a bill for an act providing for the office of state examiner, defining his powers, duties, bond, and fixing his compensation.
On suspension of the rules the bill
was read the prescribed three times and voted upon.
This
bill oreating the state examiner's office was passed by the g following vote: ayes 12, nays 2, absent 2. After passage in the senate chamber of Senate File #90, it was sent to the house of representatives.
On January 9,
g Journal of the House of Representatives of the First Legislative Assembly, State of Wyoming, p. 226. ^Ibid., p. 229. 8Ibld., p. 420. 9 Ibid., p. 446.
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1891, the house rules were suspended for the purpose of plac ing Senate File #90 for final passage. except nine nays and five absent.
The vote was all ayes
Thus the bill creating the
office of state examiner was returned to the senate and from there to the governor for his signature.
10
The following communication was received in the senate chamber:11 Jan. 10, 1891 To the Honorable Senate State of Wyoming Gentlemen: I have the honor to nominate here with for State Examiner, Joel Ware Foster of Converse County. Very Respectfully, Amos W. Barber Acting Governor The confirmation vote was taken in the senate and the results were ayes 15, nays none, absent 1.
Thus Joel Ware
Foster became the first state examiner of Wyoming. At the time the first state examiner took office the prescribed bond was fifty thousand dollars.
Mr. Joel Ware
Foster posted his bond with the following communication:
10 Ibld. . p. 510.
11 Journal of the Senate of the First Legislative Assembly, State of Wyoming, p. 461.
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6 State Examiner* s Bond
12
Know all men by these present that we, Joel Ware Foster as principal, and; John E. Evans Merris C. Barrow Sam Slaymaker Josiah Hazen John Storrie George Bolin Arthur B. Danick
#10,000 5,000 4,000 2,000 10,000 4,000 10,000
Howard G. Peters Harry P. Allen DeForest Richards Charles F. Mauer Addison A. Spaugh Robert White George Metcalf
# 4,000 2,000 20,000 2,000 10,000 4,000 13,000
as sureties, are held and firmly bound unto the State of Wyoming in the penal sum of (#50,000) lawful money of the United States of America, to the payment of which well and truly made, we do, Jointly and severally bind ourselves, our and each of our heirs, executors, and administrators, firmly by these present. Sealed with our seals and dated this 19th day of February A. D. 1891. The condition of the above obligation is such, that whereas the above bounden Joel Ware Foster has been, by the Governor, by and with advice and consent of the Senate, duly appointed State Examiner of the State of Wyoming for four years from the second of February A. D. 1891. NOW THEREFORE, if the said above bounden, Joel Ware Foster, shall and will truly and faithfully perform all the duties of his said office according to law, then this obligation shall be void, otherwise the same shall remain in full force and effect. Approved March 4, 1891 Amos W. Barber Acting Governor Filed March 4, 1891 Mr. Joel Ware Foster took the oath of office, as pre scribed by Wyoming Compiled Statutes, on March 25, 1891,
From the Original deposited in the Office of the Secretary of State.
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7 in Converse County and it was signed by Silas Guthrie, Clerk and witnessed by Robb A. Green, Deputy.
County
1^
At the present time the bond of the state examiner is twenty-five thousand dollars.
This bond is to be furnished
by a surety company authorized to do business in the State of Wyoming, and approved by the attorney general of the State of Wyoming. It was indeed fortunate that the legislature created the position of state examiner.
Centralized financial control has
been very helpful in the management of the state's finances. In the light of such far reaching banking and other financial difficulties as was experienced by this and other states in the past, especially in the late twenties, and early thirties, the value of the state examiner's services can be readily understood and appreciated.
Certainly the mere existence of
such an office and competent staff did immeasurable good in alleviating some of the disasterous results of such a financi al upheaval.
The general consensus of opinion has been that
the state examiner's office has contributed greatly to better financial control.
15Ibid.
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CHAPTER II STATUS OF THE STATE EXAMINER The constitution specifies that the legislature must provide for a state examiner.
His duties are to examine the
accounts of the state treasurer, supreme court clerks, dis trict court clerks, and all county treasurers, and treasurers of such other public institutions as the legislature may by law require.
He must also, according to the constitution,
perform such other duties as the legislature may prescribe. The constitution further provides that he must report at least once a year, and often if required, to such officers as are designated by the legislature.
His compensation is
fixed by the legislature.1 Legislative Provisions The legislature is directed by constitutional mandate to provide for a state examiner.
Consequently, it is the
obligation of the legislature to provide for the general organization and staffing of the office.
The powers and
duties, procedures to be followed, methods of reporting to the governor and to the legislature, and the appropriations are determined by the legislature. -
The legislative provisions
_
Constitution of the State of Wyoming, Art. IV, Sec. 14.
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9 relating to this office are discussed in the following pages. Appointment —
Term.
The state examiner is appointed by the governor and con firmed by the senate.
His term of office is four years and
until his successor is appointed and qualified.
The successor
qualifies by being confirmed by the senate and subscribing to the oath of office.
In 1945 the governor appointed a new
state examiner who did not receive senate confirmation and the incumbent examiner remained in office for a second term. This particular case involved Mr. Norris E. Hartwell, Mr. A. E. Wilde, and Governor Lester C. Hunt.
Governor Hunt
appointed Mr. A. E. Wilde, who had served eight years as state examiner from 1933-1941, as the new state examiner. This was done in the following communication to the senate: Cheyenne, Wyoming February 7, 1945 President and Members of the Senate of the Twenty-eighth Legislature Gentlemen: I submit for your consideration and approval the appointment of Mr. A. E. Wilde, of Lincoln County, to the office of State Examiner for a term of four years, from April 1, 1945, succeed ing Mr. Norris E. Hartwell. Respectfully, Lester C. Hunt Governor The senate refused to confirm this appointment by a vote
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10 of sixteen to eleven.
2
Consequently Mr. Wilde could not
qualify, and later Governor Hunt appointed Mr. Hartwell to the office of state examiner to fill out the term. When Governor Hunt took over his duties as United States senator he was replaced by the Secretary of State, A. G. Crane, who submitted the following letter of request appoint ment : Cheyenne, Wyoming February 19, 1949 Honorable President and Members of the Senate of the Thirtieth Legislature Gentlemen: I submit for your consideration and approval the appointment of Mr. Norris Hartwell of Lusk, Niobrara County, Wyoming, as State Examiner, for a term of four years from April 1, 1949 succeed ing himself. Respectfully, A. G. Crane Governor This appointment was confirmed by the senate.
3
Vacancy in Office In case the office of state examiner becomes vacant by
Senate Journal of the Twenty-Eighth State Legislature of Wyoming, 1 9 4 5 . p. 542.
2 Senate Journal of the Thlrtleth State Legislature of Wyoming. 1949, p. 507.
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11 death, removal or otherwise, the governor is empowered to fill the position by recess appointment until the next meet ing of the legislature.
The individual appointed to fill the
vacancy must execute the same bond and take the same oath as a state examiner appointed by the governor by and with the consent of the senate.
He also has the same powers and
duties.^ Qualifications In order to be eligible for the office of state examiner an individual must be a qualified elector of the State of Wyoming and must have been a resident of the state for at least five years.
Furthermore, he must be a skilled account
ant well versed in the theory and practice of accounting.
He
must have had at least five years experience in practical banking or three years experience as a bank examiner in Wyo ming or some other state in the United States.
While occupy
ing the office the state examiner cannot be employed by or have any interest in any bank or banking business in the state.5 Assistant Examiners —
Deputy Examiners —
Employees
The state examiner, with the approval of the governor, appoints such clerical assistance as is required for the 4
Wyoming Compiled Statutes, 1945, Sec. 18-802. 5 Wyoming Compiled Statutes, 1945, Sec. 18-803.
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12 conduct of his office.
He also appoints the examiners and
assistant examiners, one of whom he designates as deputy state examiner.
The state examiner also designates one to
be senior bank examiner.
The deputy state examiner, in the
absence or disability of the state examiner, exercises all the powers of the state examiner.
The deputy is the duly
recognized representative of the office when the state ex aminer is absent.
The examiners and assistants hold their
respective positions during the pleasure of the state ex aminer.
All examiners must have at least five years of
practical banking experience or three years practical experi ence in the banking department of this or other states. Service as a national bank examiner for a like period of £ time will also meet the experience qualifications. These demanding qualifications are of the utmost importance in re taining a high calibre of personnel and efficiency within the office of state examiner. Oath —
Bond
Before entering upon the duties of the office to which they have been appointed, the state examiner, examiners and assistant examiners must subscribe to an oath that they will faithfully and impartially discharge the duties of their re spective offices.
The oath which is required of all state
g
Wyoming Compiled Statutes, 1945, Sec. 18-804; Cumulative Pocket Supplement, 1949, Sec. 18-804.
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13 officers Is found in Article VI, Sec. 20 of the Wyoming Con stitution.
Bonds must be executed to the State of Wyoming in the amounts of $25,000 for the state examiner, $10,000 for each examiner, and $5,000 for each assistant examiner.
These bonds
must be in some surety company authorized to do business in the State of Wyoming and approved by the attorney general of the state.
They are executed to assure the faithful dis
charge of the duties of the office to which the individual has been appointed and to guarantee that he will pay over to the person lawfully entitled to receive it, all moneys coming into his hands by virtue of his office. bonds is paid out of the examiner’s fund.
The cost of these 7
Salaries and Expenses
The state examiner receives a salary of $5,600 per year. This amount is to be paid in twelve equal installments.
The
deputy state examiner receives $4,800 per year which is also paid in twelve equal installments.
The senior bank examiner
receives the same amount of salary as the deputy state ex aminer.
The salary of every other examiner and assistant
examiner is set, with the approval of the governor, at such a rate per annum as the state examiner may decide.
All
clerical assistants salaries are arranged in a like manner. The annual salary of an examiner or assistant examiner must 7 Wyoming Compiled Statutes, 1945, Sec. 18-805.
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14 not be less than $2,400 or more than $4,200 paid in twelve equal payments. All actual and necessary expenses of the state examiner, examiners, assistant examiners, and clerks incurred in the discharge of their duties must be itemized on the proper vouchers and covered by the proper receipts.
These expenses
are paid by the state treasurer from money credited to the Q state examiner's fund. State Examiner's Fund In 1925, the eighteenth legislature provided for the Q
state examiner's fund.
It was created to house all moneys
appropriated by the legislature for the operation and main tenance of the state examiner's office.
All fees collected
by the state examiner are turned into the state treasurer once each month and credited to the examiner's fund.
All
expenses incurred in and about the conduct of the business of the state examiner's office are paid out of this fund. This includes the salaries of the state examiner, examiners, assistant examiners, clerks, traveling expenses, furnishings of offices, stationery, supplies, and all other expenditures necessary for the proper conduct of the office.^
Wyoming Compiled Statutes, 1945, Sec. 18-806; Cumulative Pocket Supplement, 1949, Sec. 18-806. 9 Session Laws of the State of Wyoming, 1925, Ch. 155. 10 Wyoming Compiled Statutes, 1945, Sec. 18-808.
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15 Subpoenas and Oaths The state examiner may issue subpoenas, and administer oaths in the same manner and with the same power to enforce obedience to his rules and directions involving matters per taining to his office, as the courts of Wyoming.
Persons
or parties refusing access to any books, records, or infor mation required'by the state examiner in the performance of his duties are guilty of a felony.
Upon conviction, a fine
of now less than $1,000 or imprisonment in the state penitentary for a period of not less than one year or both may be levied. The legal power of subpoena and oath is necessary for the performance of the required duties.
The very nature of
the work carried on by the state examiner in examining vari ous units of government and private business in matters of finance makes this power e s s e n t i a l . ^ Seal —
Effect
The state examiner, with the approval of the governor, must adopt a seal for his office.
This adopted seal is filed
with the secretary of state and is recognized as the lawful seal of the state examiner.
Every certificate, assignment,
and conveyance executed by the state examiner, must bear this official seal and it carries all of the power and merit of a regularly recorded deed in the eyes of the law.
Wyoming Compiled Statutes, 1 9 4 5 , Sec. 18-809.
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Copies
16 of all records and papers In the office of the state examiner, certified by the state examiner and authenticated by his seal must be honored in evidence in all cases equally and of like 12 effect as the originals. Report to Governor Every two years the state examiner must make a written report to the governor of his various official proceedings. This report must contain an abstract of the condition and the statistics of the several institutions of the county and state finances as ascertained by the state examiner during the period.
These reports must be printed when ordered by 13 the legislature.
Powers of Assistant Examiners Any duty enjoined by statute upon the state examiner may be performed by any lawfully appointed examiner.
The
increased demand for the services offered by the state ex aminer1s office has made it necessary to delegate powers to 14 the assistants. Records and Reports After making examinations of the different offices and institutions of the state, the state examiner must maintain 12
Wyoming Compiled Statutes, 1945, Sec. 18-810.
^Wyoming Compiled Statutes, 1945, Sec. 18-826. 14 Wyoming Compiled Statutes, 1945, Sec. 18-827.
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17 a permanent file of such examinations in his office and report his findings to the respective officers concerned. He must report to the governor the conditions and other pertinent information dealing with state officials and in stitutions.
Such information relative to all county offices
and institutions is reported to the board of county commis sioners.
All school district information is reported to the
board of school trustees and all municipal information to the mayor of the municipality. The maintenance of a permanent file of reports and examinations made by the state examiner expedites proceed ings in cases involving complaints.
A copy of the report
as well as the full details of the case can be submitted to the governor. The state examiner must receive and place on file in his office all reports that are required by law.
None of
these reports, except the published statements of banks and public offices are considered public records, or are open to public inspection.
This has been a controversial issue
with the public for a number of years.
The public maintains
that they should have the right to view and inspect records kept by public officials.
The nature of the information
contained in such reports, however, is of a highly technical nature and is not generally understood by the public. of paramount importance that only trained and properly 15
Wyoming Compiled Statutes, 1945, Sec. 18-835.
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It is
18 vouched for individuals be allowed access to such records. The state examiner can and does furnish to the Federal Re serve Bank and its examiners copies of the reports for the betterment of a general nation-wide bank control and guidance plan.
The Reconstruction Finance Corporation and the Federal
Deposit Insurance Corporation have legal access to the files in the state examiner's office.
The state examiner's office
does not seek to keep from the public any information that should be made available.
It is the consensus of opinion
in the legislature and the state examiner's office that such information as is reported in these reports should not be open to the public.
1 Pi
The state examiner is considered to be the chief safe guard of state banking ventures in Wyoming.
His office has
complete control, and responsibility for the safety and ef fectiveness of state banks. Qrg,anizat.ion of Bar&g. Any number of people, not less than five in any case, may organize for the purpose of carrying on general banking business.
The persons uniting to form such an association
must execute and acknowledge, according to law, a certificate of articles of association, which must contain the following:
16
Wyoming Compiled Statutes, 1945, Sec. 18-836; Interview with State Examiner Norris E. Hartwell, October 25, 1949; Opinion of the Attorneys General of the State of Wyo ming, 1941-1947, p. 278.
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19 1.
Corporate name of the company.
2.
The object for which the company
3.
The term of its existence, not to exceed fifty
shall be formed.
years. 4.
The place where its office shall be located and its
operations carried on. 5.
The amount of capital stock and the number of shares
into which it is to be divided. 6.
The names and places of residence of the share
holders and the number of shares subscribed for by each. 7.
The number of directors and the names of those who
shall manage the affairs of the association for the first year. This certificate must be made in triplicate, one of which is filed and recorded in the office of the register of deeds of the county in which the business
of the association
is to be located; one copy is filed in the office of the secretary of state; and the third copy is submitted to the state examiner. The state examiner must inquire into the adequacy of the capital structure proposed, the future earning prospects of the proposed company, the general character ana ability of the incorporators and the convenience and needs of the com munity to be served by the applying company.
The state ex
aminer is the sole judge as to whether or not a charter shall be granted, and he has the authority either to approve or
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20 reject any application. In no case will any certificate be filed or recorded, unless it bears a certificate of the approval of the state examiner.
When the examiner has given the necessary approv
al to the certificate of association, he will cause to be issued to the association a charter bearing the seal of the state examiner's office, which shall be deemed sufficient authority for the association to commence the business of banking. 17 The state examiner has authority to require all active officers and employees of state banks to furnish a fidelity bond in duplicate in an amount to be fixed by him.
The bond
must be written by a surety company authorized to do business 18 in the State of Wyoming. Change of Place of Business —
Application to State Examiner
Any state bank, situated in the State of Wyoming, may make a written application to the state examiner for permis sion to change its place of business to any other city or town in the state.
There is one qualification to this rule
and it is that no bank can apply for a change to a town al ready enjoying the privileges of a bank.
This written ap
plication for permission to change the place of business must state the reasons for desiring the change and must be signed —
Wyoming Compiled j&aW t e a, I M S , 18
Sec. 35-103.
Wyoming Compiled Statutes, 1945, Sec. 35-102.
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21 and acknowledged by a majority of the board of directors.
The
application must also have the written assent of the stock holders owning at least two-thirds of the total stock.
When
the state examiner receives such an application he must first determine whether or not such a change would be desirable. After the desirability has been determined the state examiner fixes a day for a hearing on the proposed change of address. The directors of the bank proposing the change are required to give notice of the hearing by at least two weeks publica tion in the city or town newspaper.
The state examiner may
make such inquiry and investigation as he deems desirable to 19 determine whether such a change must be made. Examining Committee —
Report
The board of directors of every state bank must appoint an examining committee of not less than two stockholders at the first meeting in January each year.
These stockholders
cannot be officers of the bank, and it is their function to examine carefully and completely all of the bank's loans and investments. months.
An examination must be made at least every six
The results of the examination is reported to the
board of directors at the next regular meeting and a copy of the findings must be forwarded to the state examiner with20 in five days of the meeting of the board of directors.
19 20
Wyoming Compiled Statutes, 1945, Sec. 35-104. Wyoming Compiled Statutes, 1945, Sec. 35-123.
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22 Report to State Examiner On the fifteenth day of January, each year, every state hank must submit to the state examiner a report of earnings and dividends for the preceding year ending December thirtyfirst.
This report must be made in the form prescribed by
the state examiner.
Also to be shown in this report are
losses sustained, expenses and taxes paid, gross earnings and profits, losses recovered since the last report and all amounts carried to surplus and dividends paid. PI Report of Dividend Every state bank that declares a dividend must within ten days after declaring it forward a report to the state examiner giving all the details involved.
This report must be
included again in the annual report which is submitted by each state bank.^ Failure to Report —
Penalty
Any bank or banker under the jurisdiction of the state examiner that fails to submit the required reports is sub ject to a fine of ten dollars for each day the reports are delayed.
This penalty is necessary and justified for the
purpose of accomplishing efficient financial control.
21
Wyoming Compiled Statutes, 1945, Sec. 35-128.
22
Wyoming Compiled Statutes, 1945, Sec. 35-129. 23 Wyoming Compiled Statutes, 1945, Sec. 35-130.
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CHAPTER III DUTIES AND POWERS OF THE STATE EXAMINER The state examiner is charged with the responsibility of determining by examination the financial soundness of all taxsupported institutions in the state.
Financial soundness
means to the state examiner that all generally acceptable business practices are followed in the course of operation. The examiner's office prescribes a uniform system of account ing.
Principles of sound budget making and administration
must be followed.
In addition to other functions under the
control of the state examiner he has the duty of supervising banks and banking institutions.
The supervision of the bank
ing profession of the state denotes that every phase of bank ing must be under the strict control of the state examiner. All books, records, and operation in general are subject to frequent and unannounced examination by a representative of the examiner's office. Bank Examination In a bank examination several procedures are used, de pending upon which institution is being examined and the particular policies and individuals connected with that unit. A bank examination covers every phase of operation and deal ings of the bank.
A bank is operated and managed by human
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24 beings of different natures and personalities.
All are con
trolled and guided by the existing laws and statutes, but nevertheless there are certain legal deviations and. interpre tations as to how their bank should be operated and managed. Experienced bank examiners from the state examiner’s office learn these existing idiosyncrasies and make reasonable ad justments.
These deviations are not to be misconstrued.
They
appear in every line of human endeavor and have to be handled in the best possible means available. When an examiner enters a bank for the purpose of exami nation it is a good policy to first approach the president or cashier and make his presence known.
This introduction makes
for a better relationship and understanding between banker and examiner.
After the introduction the examiner then proceeds
to examine all books and records.
In this examination the
examiner determines if the books are in order as to accepted accounting requirements.
The examiner will then determine if
the information shown in the books and records is actual and factual.
By this is meant that he will check items on hand,
like cash and bonds that have been left at the bank for safe keeping and other items that should be present.
After all
the books and records have been examined and found true and correct, the examiner then examines the loan policy of the bank.
It is of the utmost importance that sound loan policy
of a bank should show that loans are being made and collected with the going rate of interest and that the loan policy is
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25 not too one-sided or warped.
A warped loan policy is one
that is following one particular type of loan to an extreme. To be sound and secure in its loan practice a bank should show some diversification.
A certain per cent to heavy indus
try, a certain portion to large capital outlays and like operations should be the rule.
A bank should never be too
centered or tied up to one type of loan.
It is the duty of
the examiner to determine if a bank is following a sound loan plan.
He is able to do this through experience in the field
and observations as to what other banks are doing in this state and throughout the nation. Also to be determined in the examination of loan policy is the "lines of credit".
Lines of credit is that sequence
in which an individual secures and repays loans to the bank. Does he pay on time?
How many loans has he made and how
prompt does he repay them? made?
To what use is the loan to be
All of this and more information must be known by the
examiner before he can make a report as to the condition of the loan policy of the bank.
It is known that certain bankers
have a tendency to over-loan on particular types of business undertakings.
This must be determined and remembered by the
examiner who in turn will try to show and require that the banker follow a sounder approach to this phase of banking."^ On numerous occasions the state examiner has to seek _
Interview with Senior Bank Examiner Sam B. Morgan, January 21, 1950.
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26 the counsel of the state attorney general on matters pertain ing to financial dealings and undertakings of banks and bank ing institutions.
The state examiner will state the problem
and the attorney general will render an advisory opinion as determined by the statutes.
The state examiner then makes a
decision as to the course to be followed. Various problems arise of this nature.
They must first
be studied by the attorney general on request of the state examiner.
For example, on February 18, 1942, State Examiner,
Mr. Norris E. Hartwell requested Attorney General, Erving T. Kerr to give an opinion on two questions regarding banking problems.
The questions were, "In a bank that has 400 shares
of outstanding capital stock, would 201 shares represented by election be sufficient to legally elect a board of directors of said bank?"
In answering the first question the Attorney
General replied, "It is the opinion of this office that a bank that has 400 shares of outstanding capital stock would require 204 shares of the same to constitute a quorum under the provisions of Section 10-118, Wyoming Revised Statutes, 1931.
We cannot construe fifty-one per cent as meaning a
bare majority.
We think the legislature has clearly expressed
that 51$ of the issued and outstanding capital stock shall be necessary to constitute a quorum.11 The second question to be answered was, "In the event that 51$ or more is held by one person, would it be legal for him to elect the directors, without having any other shareholder present?"
In answer to
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27 this question the attorney general ruled thus, "Under the provisions of Sec. 10-118, Wyoming Revised Statutes, 1931 of the laxir it is equally clear that if the 51% of issued and outstanding capital stock is held by one person, that person could elect the directors as the law is silent on the re quired number of share holders who must be present, but has clearly indicated that the issued and outstanding capital stock shall constitute a quorum rather than the number of share holders."
With this type of authority the state ex
aminer can proceed to advise any interested party in regard p to final settlement of the problem. Sometimes the existence of an emergency will necessitate the request for an advisory opinion.
On June 5, 1942 the
state examiner was faced with the problem of the twenty per rt cent limitation upon the loaning capacity of state banks. The legislature in 1935 amended this law to permit state banks to exceed this limit provided the excess amount was redis counted with the Reconstruction Finance Corporation or a Federal Reserve Bank.
The question that the state examiner
asked was, "Does the limitation placed upon the loaning capacity of state banks under Section 10-132, Revised Statutes of Wyoming 1931, as amended, apply when such loans are made to
Opinions of the Attorneys General of the State of Wyoming. 1941-1947, p. 138. 3 Wyoming Revised Statutes, 1951, Sec. 10-132; Wyoming Compiled Statutes, 1945, Sec. 35-133.
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28 a contractor or sub-contractor engaged in business which is deemed necessary and appropriate in the prosecution of the war."
The deputy attorney general replied,
. . In consider
ation of existing amendments and national executive orders we conclude that a state bank may loan its funds without limita tion when it receives and accepts as a part of the same trans action, an unconditional guarantee executed by either the War Department, Navy Department, or United States Maritime Com mission, agreeing to repay the portion thereof in excess of the twenty per cent limitation within ten days after demand.^ Another type of question presented to the state examiner concerned the question as to whether or not a state bank of Wyoming could act as guardian of the estate of a minor?
The
attorney general replied, on April 24, 1946, in this manner; "We refer you to the opinion of this office dated March 3, 1931, in which it was pointed out that a bank organized under the laws of this state does not ipso facto have the powers granted loan and trust companies and we are likewise of the opinion that a State Bank organized as such without having qualified as a loan and trust company, does not have trust powers.
In addition to that, we wish to point out that if
such a state bank does not have trust pox-/ers, it is by that reason incompetent to act in that capacity.
Since our statutes
confer no such powers on state banks, we doubt that if in the
Opinions of the Attorneys General of the State of Wyoming. 1941-1947, pp. 159-162.
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29 absence of such statutes any state bank could properly claim that such a guardianship is an exercise of its incidental powers necessary to carry on its business.
Therefore, we
believe that you are correct in refusing to permit such banks to act as guardians." One can see by the examples above that bank regulation is a very demanding undertaking. nine state banks in Wyoming.
There is at present twentyThese twenty-nine state banks
represent a financial holding of 181,060,665.13.® It is the accepted practice, in the matter of bank ex amination, to substitute one of the annual examinations with the annual report of the Federal Deposits Insurance Commission examiner.
This is due to the large amount of work involved in
bank examination and the lack of sufficient staff employees in the state examiner's office.
Without proper staffing in the
ranks of examiners the state examiner must, and properly so, substitute some of the many reports demanded of him.
This
practice is sound and is evidence of little deviation from normal procedure.
The results gained far exceed any dis
advantage that might arise.
The Federal Deposits Insurance
Commission examiner is a trained person working for the federal government and is able to perform his duty as well as the examiner on the state level.
This substitute examina-
5Ibld., p. 783.
6
Total deposits in Wyoming state banks, Office of the State Examiner, November 1, 1949.
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30 tion certainly helps the state examiner. If on occasion a bank official should refuse to submit to an examination for his establishment, the state examiner has expressed powers to confiscate the property and put him self in charge until such time as the matter can be satisfac7 torily settled. By actual practice the state examiner may take over a bank, but as soon as possible he must appoint a local citizen who is well versed and familiar with the local situation to be in charge until the matter is settled.
This
delegation of power to a local resident has two distinct ad vantages.
It relieves the examiner’s office of the duty so
that a field man may move on to other problems, and on the local scene the appointee may be closer to the problem and can work out a more satisfactory settlement.
One might as
sume that a higher degree of cooperation would also come about through the use of local management of the problem. Failure of banks to comply with inspectors directions may draw a fine of $10 per day for every day they fail to 8 comply. These directions by the examiner may apply to systems, records, or general policy exercised by the banks. The examiner is only limited in his recommendations by the framework of existing superior law.
The state examiner can
and does make such rules and regulations that he deems ad7 Wyoming Compiled Statutes, 1945, Sec. 18-812. ^Wyoming Compiled Statutes, 1945. Sec. 18-813.
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31 visable for better control of financial matters and institu tions.
He is only limited in this matter to a degree that
his rules and regulations must not interfere or conflict with any provision of state lav;. In the matter of examination the following table is sub mitted.
This "rate for examination" is the one used at the
present time and applies to all banks under the supervision of the state examiner.
All fees collected go directly into Q the state examiner's fund. The fees are collected at the time of examination. For all banks having total resources of £100,000 bl00,000 j>200,000 p300,000 5500,000
and and and and and
under under under under under
$200,000 $300,000 $500,000 $1,000,000
:50.00 160.00 170.00 180.00 190.00
Every bank having total resources of one million dollars ($1,000,000) and over shall pay a fee of ninety dollars ($90.00) for examination and in ad dition thereto a fee of five cents ($.05) for each one thousand dollars ($1,000) in excess The state examiner may issue subpoenas, and administer oaths in the same manner, and with the same power to enforce obedience as pertaining to courts of law of the state.
Any
refusal on the part of an officer, or any party connected with an incident, to submit to an order of the state examiner will be guilty of a felony and is liable to a fine of $1,000, one
9 Wyoming Compiled Statutes, 1945, Sec. 18-807.
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32 year in prison or both."^ Any duty that has been delegated by statute to the state examiner may be performed by any lawfully appointed examiner. This delegation of power and authority is absolutely necessary if the idea and purpose of the examiner's office is to be satisfied.
Not to belabor the point any farther, it should
be clear that one official cannot be in more than one place at any one time, consequently the necessity of delegation of power. State Institutions From the beginning of the office of state examiner the various state institutions have been subject to financial examination and advice by this office.
This procedure tends
to centralize and make for uniformity in examinations and control.
Comparisons can be made between the various insti
tutions and in that way cost of operation can be maintained at a minimum.
Belov; are a few of the tax-supported insti
tutions that are examined and advised by the state examiner. The examiner is required to visit each one of these insti tutions at least once each year for the purpose of conduct ing an exhaustive financial examination.
The examination is
unannounced.
10
Wyoming Compiled Statutes, 1945, Sec. 18-809.
^^Wyoming Compiled Statutes, 1945, Sec. 18-827.
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35
Schools The Constitution of Wyoming declares that the "legisla ture shall provide for the establishment and maintenance of a complete and uniform system of public instruction, embrac ing free elementary schools of every needed kind and grade, a university with such technical and professional departments as the public good may require and the means of the state 12 allow, and such other institutions as may be necessary." More than half of the cost of public education is paid from funds produced by the several school districts.
The
remainder is paid, in the order of the total amounts produced for the schools of the state as a whole from state, county and federal funds.
The state examiner is charged with the
responsibility of examining all of the books and records of all tax supported institutions of the state.
The educational
system is part of that responsibility. Under provision of the municipal budget act, first class school districts are termed municipalities.
These districts
are under the jurisdiction of the state examiner for financial guidance and control.
Uniform budget forms are issued to
them from the examiner's office on June first of each year. The budget forms are prepared by the state examiner's office.
1?
1^
Constitution of the State of Wyoming, Art. VII, Sec. 1.
13
Wyoming Compiled Statutes, 1945, Section 20-305; Cumu lative Pocket Supplement, 1949, Sec. 20-805. V-
.
UBKARTC mr
tw*
MBBSSITY OF WYOSWfc UKAMIE
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34 The budget forms include all pertinent and important divisions necessary for financial control of school districts. They include sub-sections covering Budget for Instruction, Budget for Administration, Budget for Operation of Plant, Budget for Maintenance of Plant and other less important sub-budgets.
Taken together they represent the budget for
a school district.
14
In addition to issuing budget forms the state examiner is charged with the responsibility of receiving the budget information submitted on the prescribed forms.
The examiner
makes periodic, unannounced examination of the books and records in school districts to determine by accepted prac1 *5 tices if the submitted data is true and complete. Any malpractice discovered by the examination is reported to the board of school trustees of the district concerned.
“j
The budget calendar for school districts is the same as applies to all municipalities as defined by the Wyoming muni cipal budget act.
A schedule of estimated requirements for
the coming fiscal year is submitted on June first.
On the
fifteenth of June the schedule of proposed expenditures is submitted to the governing board.
The governing board is the
14 From an original County Budget Form as issued by the state examiner. 15 Wyoming Compiled Statutes, 19451 Sec. 18-817. 16 Wyoming Compiled Statutes, 1945, Sec. 18-832.
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55 board of school trustees.
On or after July fourteenth the
budget summary is published in the first regular issue of a daily or weekly newspaper.
A public hearing on first class
school districts is held on the fourth Wednesday in July or the twenty-seventh of that month in 1949-50.
On the day
following the public hearing the governing board adopts the 17 budget. One might question the suddenness of adoption after hearing.
Generally speaking there is no public parti
cipation at these hearings and it is assumed that silence
gives consent.
18
Budget control in the school district is exercised by a quarterly report to the state examiner on expenditures and the amount remaining in each sub-section of the financial plan.
Any amount can be spent or used from an allotment in
any period, but the total amount must not be exceeded.
In
other words the individual separate allocations may be ex ceeded from time to time with subsequent reimbursements from other separate accounts but this shifting of accounts cannot exceed the total amount allocated for this unit.
19
The budget officer for a first-class school district is usually the clerk of the school district, however, the board
Wyoming Taxpayers Association Directive, May, 1949. 18
Interview with Superintendent of Schools James E. Thayer, Laramie, Wyoming, April 11, 1950.
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36 of school trustees of the district may designate such other oQ officer or person, as it may deem appropriate. In the supervision and examination of educational insti tutions throughout the state the state examiner arranges for and distributes various directives regarding accounting and budgetary procedure.
These directions help to insure uni
formity in financial matters and assist the local officials in performing their duties.
Below are two examples of the
instructions issued by the state examiner's office to school districts.
20
Wyoming Comoiled Statutes, 1945, Sec. 20-804.
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37
COPY COUNTIES AND SCHOOL DISTRICTS THE STATE OF WYOMING OFFICE OF STATE EXAMINER Instructions fox ihe Preparation of J&e, 1948-49 B.Udget The Municipal Budget Act, as passed by the 1945 Legislature, provides that " . . . the State Examiner shall prepare and prescribe budget forms suitable to the several classes of municipalities and to the re quirements of this act." In compliance with this provision, suitable forms have been prepared and a copy of the Budget Act, as amended, has been made a part of these forms. THE BUDGET MAKING AUTHORITY AND ALL OTHERS WHO HAVE A PART IN THE PREPARATION AND OPERATION OF THE BUDGET SHOULD CAREFULLY STUDY THE BUDGET ACT IN ITS AMENDED FORM IN ORDER THAT ALL PROVISIONS MAY BE STRICTLY ADHERED TO. In the Preparation of the budget forms it is necessary that all schedules and exhibits be completed. It is quite possible that in some instances individual items may have been omitted from some schedules or some departments not set up, such as airports, which the budget officer of the governing board may wish to in clude. In such cases the items or department may be inserted; however, it is urged and recommended that you conform to the present budget forms so far as pos sible. For your assistance the following outline is sug gested in the preparation of the budget. 1.
Complete all of the detail expenditure schedules first (B-l, etc.) as you must submit a schedule or proposed expenditures by June 15 (see Sec tion 20-810 (a) of the budget act.)
2.
Bring the total of these schedules to Exhibit B which is a summary of the detail expenditure schedules.
3.
Assemble the estimated revenues called for on Schedule A-2.
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58 4.
Obtain the information called for on Schedule A-3 and A-4 from the County Treasurer. Be sure that only the actual proportion due each account is shown.
5.
Transfer the General Fund total from Schedules A-2, A-3, and A-4 to Section B of Schedule A-l. (In the County Budget, the General Fund portion of A-4 should be shown under County Treasurer on Schedule A-2.) The total of each other fund shown on these schedules will be transferred to its respective schedule shown elsewhere In the budget forms.
6.
Complete Section A of Schedule A-l. On lines 2 and 3 of the County Budget or line 2 of the School Budget of this section, show only the unpaid bills which will be paid the first meeting in July. Provide for all others in the current budget.
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39
COPY THE STATE OF WYOMINGOFFICE OF STATE EXAMINER CHEYENNE TO SCHOOL DISTRICT TREASURERS AND CLERKS: FINANCIAL ACCOUNTING PROCEDURE FOR SCHOOL DISTRICTS Ins.tructions M
Treasurer:
1.
The fiscal school-year ends on the third Saturday of June, — at which time the Clerk and the Treasurer should have all records balanced. Start your cash book with the balance you had at the close of the previous school year.
2.
Issue your official receipt for any and all money collected, regardless of the source of income. The receipts should be pre-numbered and issued in dupli cate, the original to be given to the person from whom the money is received and the duplicate to remain in the receipt book as a part of the perman ent records of the District, The receipt should be issued at the time the money is collected. Enter each receipt in the cash receipt side of the cash book, being careful to enter in the proper column.
3. Enter all paid warrants in the cash disbursement side of the cash book, being careful to enter the warrants in the proper column. Do not enter any warrants in the cash book until they have been actually paid by the bank. It is recommended that the practice of writing a check for each warrant be discontinued and the following procedure followed: After the warrant has been written and signed by the Clerk and Director, it is turned over to the Treasurer. The Treasurer will then countersign the warrant, after which it is to be used the same as a check. The Treasurer should instruct the depository bank to honor all warrants that have been properly signed, and charge them again st the school district's account. This method will save both time and work for the Treasurer. 4. At the close of the school year, balance your cash book. The cash book balance must agree with the bank balance plus any cash on hand. If the two balances do not agree, check for an error. To keep
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40 an accurate set of books, much depends upon your careful work in entering all receipts and dis bursements and in totaling each page of your cash book and carrying forward the correct amount to the following page. 5.
At the close of the school year, the Clerk and Treasurer shall reconcile their books as to the total warrants issued, warrants actually paid, and the warrants still outstanding. All warrants still outstanding should be listed, and the list signed by both the Clerk and the Treasurer.
6.
The following books and records are to be mailed by the treasurer to the county Superintendent of Schools, for examination purposes: (a) Treasurer's bash book, which should be in balance. (b) Receipt books, containing all dupli cate receipts. (c) Warrants paid during the year. (d) Bank statements for the year. (e) Treasurer's annual report. (f) List of outstanding warrants, which should be certified by the Clerk and the Treasurer. (g) List of securities pledged by deposi tory bank, if your balance exceeds $5,000.
Instructions to Clerk: 1.
The Clerk shall keep a warrant register, all warrants to be entered in numerical order as issued.
2.
At the close of the school year, the Clerk and the Treasurer shall reconcile their books as to the total warrants issued, warrants paid, and the warrants still outstanding. All warrants still outstanding should be listed, showing name, number, and amount, — list to be signed by the Clerk and the Treasurer.
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41 Hospitals The financial control and guidance of county hospitals is also governed by the state examiner.
This municipal unit
also receives the prepared uniform budget form that is dis tributed by the state examiner.
In this form the problems
and needs that are peculiar to hospital financial management are planned and provided for.
Sub-sections that are covered
in the hospital prescribed form are Budget for Administration, Budget for General Payroll, Budget for Supplies, and various other budget sections that are found in budgetary under takings.
The same rules for submission of the budget apply
to hospitals that apply to other municipal units, covered by the municipal budget act.
There is one exception.
The
public hearing for the county hospital budget is the fourth Monday in J u l y . ^ General rules applying to the operation of the budget under the budget act are also applicable to hospitals.
Fre
quently unannounced examinations of financial books and records are executed by the state examiner's office.
In these examina
tions the examining officer is ever watchful for new and more expedient ways of financial control and management that can be applied uniformly throughout the whole system. There have been occasions arise dealing with hospital budget affairs in which the state examiner had to request an opinion from the Attorney General.
Only July 19, 1945, the
Wyoming Compiled Statutes, 1945, Sec. 20-810.
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question arose, "Would the county clerk be the- Budget Officer of a County Hospital?"
The Attorney General replied, "In the
case of county hospitals, the situation is much the same, ex cept that by statute, that is, Section 29-1002, Wyoming Re vised Statutes, 1931, which provided that: "no money shall be expended out of said fund without the approval of the Board of Commissioners."
Therefore, the commissioners in
this instance would have more control over the actual opera tions of a hospital than they would in the case of a county library.
In other words, the boards of the hospitals and
library make up their own individual budgets and submit them to the county clerk, whereupon, if approved, such budgets op should be set forth at length in each county budget." When the state examiner receives such a ruling he can proceed to advise and assist the requesting unit on the program to follow. In case the examiner finds a hospital financial officer negligent in his duty he can report his findings to the county board of commissioners.
p 'Z
Counties and Cities Financial control over counties and cities is an impor tant function of the state examiner.
They involve the largest
single units financially supervised by the examiner. 22
The
Opinions of the Attorneys General of the State of Wyo ming , 1941-47, p. 681. 23 Wyoming Compiled Statutes, 1945, Sec. 18-831.
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43 county government financial undertakings cover a number of sub-sections.
Under the requirements of the municipal budget
act, the board of directors of each county library and the board of trustees of each county hospital must submit their respective budgets to the county budget officer on or before the first day of June of each year.
The county budget sub
mitted to the state examiner contains the budgets of the hospitals and libraries and other county units. 24 The county budget form prepared by the state examiner is a composite budget.
By this is meant it includes budgets for
all the departments and offices of the county.
Below is a
list of the "sub-budgets11 included in the form prescribed by the state examiner. Budget for the Board of County Commissioners.
2.
Budget for County Clerk.
3.
Budget for County Treasurer.
4.
Budget for County Assessor.
5.
Budget for County Sheriff.
6.
Budget for County Attorney.
7.
Budget for County Superintendent of Schools.
8.
Budget for County Surveyor.
9.
Budget for County Coroner.
• o
H
1.
Budget for Agriculture Department.
11.
Budget for District Court.
12.
Budget for Justice Court.
24 Wyoming Compiled Statutes, 1945, Sec. 20-812; 20-813.
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44
14.
Budget for Road and Bridges.
15.
Budget for Water Commission.
15.
Budget for Livestock Inspection.
17.
Budget for Elections.
18.
Budget for Health Officer.
19.
Budget for Miscellaneous General.
20.
Budget for Cash Reserve Fund.
•
to 1 —1
Budget for Courthouse and Jail.
These various "sub-budgets" are basically the same in content, but the necessity for the divisions is the particu lars demanded by each department or section.
For example,
items included in the budget for county sheriff deal with law enforcement activity— Extradition of Fugitives when County Responsible.
On the budget for elections there is 25 included an item for— Ballots. Supplies and Stationery. When all of these "sub-budgets11 are grouped together the state examiner can easily and quickly determine the financial condition of the county.
This applies to all counties and
insures uniform control and guidance by the state examiner. An example of the worth of the state examiner in matters of control and revenue saving on the county level is evidenced in the directive issued to the clerks of the district courts by the state examiner:
25
From an original county budget as issued by the state examiner.
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45 C O P Y THE STATE OF WYOMING
Office of STATE EXAMINER Cheyenne TO ALL CLERKS OF DISTRICT COURTS: It has come to the attention of this department that in some districts the counties have lost an appreci able amount of revenue due on probate cases filed in the District Courts. Under certain conditions the Clerk of Court is liable for fees, even though they may not have been paid. Attention is directed to Article 28 of Chapter 6, Wyoming Compiled Statutes, 1945, pertaining to fees and costs. It is urged that each Clerk of Court carefully observe the provisions of this article, and that the full cooperation of the District Judge be solicited in order that the proper fees may be collected when so ordered. There have been cases wherein the Judge has ordered the court costs paid and at a later date has approved the final account, discharged the administrator or executor without the costs having been paid. Your careful attention in these matters is necessary in order that you may be fully protected. Yours very truly
Norris E. Hartwell State Examiner NEH:jrh This matter came to the attention of an examining of ficer working for the state examiner in county financial in spection.
It exemplifies the control element, and savings
to the taxpayers, exercised by the state examiner in county
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46 af fai rs. If in the future the state examiner should find that the discrepancy still existed he can report it to the authority in charge for necessary action.
26
In regard to state examiner control of financial matters involving cities, the municipal budget act defines cities as those of four thousand or more. the first class.
These are termed cities of
There are seven cities of the first class
in Wyoming as determined by the 1940 census. 1.
Cheyenne
2.
Casper
3.
Laramie
4.
Rawlins
5.
Rock Springs
6.
Sheridan
7.
Cody
They are:
It is expected that when the final results are known for the 1950 census there will be additions.
Among the prospec
tive cities are Riverton, Powell, Worland, Torrington, and possibly others. The state examiner submits a prescribed budget form to each of the cities of the first class, by June first each year.
On this prescribed form the city clerk must prepare 27 the budget for the coming fiscal year. 26 Wyoming Compiled Statutes, 1945, Sec. 18-834. 27 Wyoming Compiled Statutes, 1945, Secs. 20-804; 20-805.
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47 The budget form is of the composite type.
It contains
sections for the various sub-divisions found in city govern ment. it.
Each sub-division prepares the section allocated to The city clerk takes the submitted information and com
piles the data into the city budget.
He then submits the
budget to the council or commission.
The council or com
mission gives notice of a public hearing at which time any citizen can make his desires known in regard to the proposed budget.
These public hearings are scheduled for the fourth 2q Tuesday in July. After the public hearing the budget is -— -•■s.
adopted, with hour'without changes.
The city clerk submits a
copy of the adopted budget to the state examiner for review and authorization, within 10 days after final revision. rule applies to all budgets covered by the budget act.
This
29
From time to time the state examiner makes unannounced examinations of the various city books and records.
These
examinations are to determine if the officials are following accepted rules and procedure as defined by statute and dir ectives issued by the state examiner.
Should any malpractice
appear in the books or records of a city official the state examiner has the power to report them to the mayor of the municipality who has the authority to suspend the officer. In case the defalcation cannot be made good the mayor may 28 Wyoming Compiled Statutes, 1945, Sec. 20-810. 29 Wyoming Compiled Statutes, 1945, Sec. 20-812.
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48 declare the office vacant.
The office will then be filled by
appointment as required by law.
The party so complained again
st has the right or authority to appeal to the governor.
The
governor can after due consideration, reverse the decision of the state examiner.
30
There are other institutions which are under the financi al control of the state examiner, in addition to those already mentioned.
The state examiner examines the accounts of the
Wyoming Soldiers and Sailors Home in Buffalo, Wyoming.
He
provides and supervises the accounting system to insure uni formity with the other governed bodies.
The reformatory, edu
cational, and charitable institutions of the state are under 31 the supervision of the state examiner. Irrigation and Drainage Districts Of the many duties assigned to the state examiner one of the more recent is the examination of books of irrigation and drainage districts in the State of Wyoming. On February 15, 1929 the legislature made a provision for the inspection of the books and records of the irrigation and drainage districts of the state.
The legislature also
provided for a fee to be charged to the amount of ten dollars per day for each day consumed in making the examination and
30
Wyoming Compiled Statutes, 1945, Secs. 18-833, 18-834.
31
Wyoming Compiled Statutes, 1945, Sec. 18-817.
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49 to cover traveling expenses, incident to making the examina tion. These examinations will only be made on the request of the board of commissioners of the district.
The state ex
aminer must pay particular attention to the various items of receipts and expenditures, and submit a written report to •XO
the commissioners.
32 Wyoming Compiled Statutes, 1945, Sec. 18-818.
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CHAPTER IV BUDGETS The word budget is very old and stems from the Old English word Bougette.
In the Old English form, used in the
fifteenth century, the meaning had reference to a leather bag.
Bougette was later used to signify the sack or pouch
from which the chancellor of the exchequer extracted his papers in presenting to Parliament the government financial program.
Hence the modern association to matters of finance.^
The dictionary definition of budget is "a financial plan of the estimated revenues and expenditures of a county (origin— o Great Britain) for a definite period of time." The plan for a financial statement of the estimated revenues and expendi tures applies to practically all units of government today, in the United States.
This plan should be prepared and sub
mitted by the responsible executive to the legislative body, whose approval and authorization are necessary before the plan may be executed.
"^Extract of an article by W. F. Willoughby, Encyclopaedia of Social Sciences, Vol. Ill, pp. 38-44.
2
Webster1s New International Dictionary, Second Edition, p . 349.
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51
Development In the United States As early as 1872 the laws of the State of Illinois provided that objects of appropriation must be specified and that no further specifications could be made unless approved by popular vote. In 1899 the National Municipal League drafted a model Municipal Corporation Act which contained the following provisions:
"It shall be the duty of the Mayor in each
year to submit to the Council the annual budget of the current expenses of the city, any item in which may be re duced or omitted by the Council; but that the Council shall not increase any item in, nor the total of, said budget." The next important step in the development of the budget was the work of various citizens' bureaus of muni cipal research.
The oldest of these bureaus is the New
York Bureau of Municipal Research, and one of its reports was made in 1907 and entitled, "Making a Municipal Budget," dealing particularly with New York City's expenditures for 4 he alth administration. A budget should not be considered as containing magical qualities which may be used to insure efficiency, justice or solvency within a governmental body. plan.
The budget is a
If this proposed plan is lax and poorly organized,
3 Extract of an article by ¥. F. Willoughby, The Ency clopaedia of the Social Sciences, Volume III, p. 41. 4 Arthur E. Buck, Public Budgeting, p. 13.
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52 so is the budget.
There must be a plan for getting money,
for carrying on the work, and for controlling expenditures within the expected revenues.
"A budget conceived in mental
laziness, adopted in despair or by political horse trading, and treated like a pampered child or homeless orphan, can be of no value."
5
A budget may be considered the most important single element in government.
The success or failure of a govern
mental unit may depend upon a well planned budget, or work program.
Extreme care should be diligently exercised to
insure a feasible plan of financial procedure.
When pre
paring the budget every person in authority should exercise his utmost ability to include all xvork planned for the coming year.
The chief executive, in conference with his
subordinates, should decide what program of activities will best serve the public needs.
In preparing estimates of
revenue an intelligent and conservative approach should be employed.
The legislature should consider the purposed
budget carefully and adopt it only after consultations with the chief executive. also be sought.
The approval of the citizens should
When executive authority is so placed that
control may be exercised to the end that public services are economically carried out, then the budget can be con sidered worth while.
Expenditures and revenues should be
Municipal Finance XIII Feb. 1941, Number 3, p. 2.
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55 properly related and in accord to Insure the adequacy of the budget.
"The budget is an aid for those who want to carry
out a public program in the most intelligent and useful manner." Essentials of the Budget The budget should set forth in summary and in detail the total authorized expenditures.
It should state the purposes
for which these expenditures are to be made and the total estimated receipts, as well as the sources from which the funds are to be raised. S. Gale Lowrie, Professor of Political Science, University of Cincinnati, calls attention to certain essentials of the budget which also logically apply to state and local budgets. A most essential feature of any budget is a budget balance— a close correlation between the state's receipts and disbursements. Should the revenues of the government exceed the authorized expenditures, a surplus will ac cumulate in the public treasury which not only represents an economic loss in taking funds needlessly from commercial channels, but which, as the experience of our federal government particularly has shown, invites extravagance upon the part of succeeding legislative assemblies. On the other hand, should the income of the state provide inadequately for the program adopted, the governmental functions must be interrupted and grants authorized be denied, or the services must be carried on through borrow ings which must be repaid with interest at some future time. To establish a proper balance between estimated receipts and disbursements requires the most intelligent planning by persons possessed of the fullest information of the fiscal affairs of the state. It is no slight evi-
6 Ibid., p. 2.
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54 bence of the skill with which the British budget is pre pared that in normal times, the discrepancy between actual receipts and disbursements seldom exceeds 1-g- per cent. Not only must a balance be established between income and expenditure but a most careful scrutiny must be made of the work to be undertaken to see that the available funds are distributed wisely among the various state services. This can be accomplished only where the planning body has an intelligent understanding of the many phases of the state's activity and a definite program in view. Role of the Budget in Wyoming The end of government in a democracy is to carry out the xtfill of the majority of the citizens and at the same time safeguard the rights of minorities. exception.
State government is no
Administrations that watch for signs of discon
tent, that act to satisfy the wants of many persons, and groups, are not just being selfish in trying to maintain themselves in office, and they are not just playing politics. They are making: democracy work.
They are fitting the govern
ment to the people instead of the people to the government. State government must be responsive to the people. Good government in itself is not dramatic.
The citizen
cannot "see and feel" sound purchasing methods or intelligent budget making and administration. enough.
Good government is not
The best methods are of no interest to the citizen
unless they are being used to supply effectively his wants
S. Gale Lowrie, "The Proper Function of the State Budget," The Annals of the American Academy of Political and Social Science, Vol. 62, November 1915, p. 48.
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55 and needs.
While budgeting expenditures help conserve the taxpayer’s dollar and contributes to sound government in Wyoming, the mere existence of a budget does not, in itself, eliminate overspending.
Protection against spending more than is pro
vided in the budget depends upon proper administration of the budget. tion.
The real test of any budget comes in its administra
The best plan will fail if it is not properly admini
stered and even a poor plan may succeed when well administered. The first municipal budget act was passed on February 20, 1939, by the 25th Wyoming legislature. to counties.
This act applied only
This budget law was not intended to and did not
decrease or in any way affect the constitutional and statutory limitations of the amount which can be raised by the county by taxation.
This was a formalized plan encompassing the
many limitations that existed before and utilizing many new ideas that had been developed.
Every county could lawfully
raise by taxation and lawfully expend exactly the same amounts as before the budget law was first enacted. The prime purposes of this budget law are: 1. 2.
3.
To make certain that the revenues of the county from taxation and other sources would be applied to the specific purposes for which such money was raised. To prevent expenditures by the counties beyo.nd the amounts which could lawfully be raised within the limitations prescribed by the constitution and statutes. To prevent the sale of machinery, merchandise, etc., to counties in excess of the amount the counties were empowered to expend for such purposes and to prevent the enforcement of claims for such machinery,
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56
merchandise, etc., against the county, regardless of the constitutional and statutory limitations. To provide an orderly and uniform system of budget ing the income and expenses of the counties; to give the tax payer an opportunity to have full in formation of the fiscal management of the county and an opportunity to be heard on any question with re spect to it.
4.
The county budget act of 1939 made certain stipulations as to the content of the budget.
There was to be a budget
message prepared by the officer making the budget.
The
budget message included such information as was needed for an adequate and accurate summary of the proposed budget.
An
outline of the fiscal policy of the county for the current year, describing the important features of the budget plan were included.
Relations between the total proposed expendi
tures and the total anticipated income were shown.
All
amounts relating to fees, license tax, taxes to be levied, unexpended balances and delinquent taxes from prior years
were reported in the summary.
All other means of financing
the budget for the current year, contrasted with the cor responding figures for the last completed fiscal year and the year in progress were included.
The general budget sum
mary was to be supported by explanatory schedules or state ments classifying the expenditures contained therein by offices, departments, and funds.
0 County Budget as provided by 11County Budget Act of 1939," compiled by A. E. Wilde, State Examiner, 1933-1941.
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57 In each county the board of county commissioners was to be the budget making authority.
It could, however, designate
or appoint one of its own members or the county clerk, county treasurer, or county purchasing agent as the budget making official.
In the event of this appointment the individual
appointed was to enjoy all the power and authority delegated to the original source. Part two of the budget was to include the detailed budget estimates, both of expenditures and revenues.
The
second part of the budget also included statements of the bonded indebtedness of the county, if any, showing the debt redemption requirements, the debt authorized and unissued, the condition of the sinking fund, and the borrowing capacity. It was also to contain any statements relative to the financial plan which the budget making authority deemed advisable, or which would be required by the county boards. ^ef^part three of the budget was to be composed of the resolutions or motions required to give legal sanction to the financial plan when adopted by the county board.
These resolu
tions or motions would include an appropriation resolution as a motion authorizing by spending, agencies and by funds all ex penditures of the local government for that year, and such other resolutions or motions that would be required to provide Q
the income necessary to finance the budget.
9
Session Laws of the State of Wyoming, 1959, Ch. 87.
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58 If there was any doubt in the mind of the local board, the county attorney was to be consulted.
It should be re
membered that the local board was dealing with the fundamental principles of taxation, and there was to be no mistakes.
The
county attorney was the legal advisor and was to be called on when needed. The next attempt at budget making laws came in 1945 when the municipal budget act was passed and approved.
This act
under which the municipalities of Wyoming are now operating repealed all previous budget laws.
It is a comprehensive
budget act, and except, perhaps, for a few minor changes, is believed to meet with the approval of most municipal officers interested in a proper financial plan for the various munici palities coming under the act. The word "municipality11 as used in the municipal budget act of 1945 is held to include and mean all:^ Cities of more than 4,000 population First class school districts Counties County Hospitals County Libraries County Fair Associations The county clerk serves as the budget officer for the county, the city clerk serves for the city, and the clerk of
10
Wyoming Compiled Statutes, 1945, Sec. 20-802.
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59 the school district is the budget officer in first class school districts.
This arrangement or provision may he
changed by the will or discretion of the governing board. In cases where the budget officer is not provided for or named by law, the governing board of the unit may name any one it deems worthy and competent. The state examiner is required to prepare and prescribe the budget forms to be used by the above mentioned units. These forms must be ready for distribution to the using units by June first of each year.
The forms must be distributed at
cost and that cost is not to exceed ten dollars to any using unit.
All money received from the furnishing of prescribed
budget forms is paid directly into the fund of the state ex aminer to partially reimburse his office for the cost of pre paring the forms. The budget form includes a complete financial plan for the fiscal year to which it applies.
In addition the budget
must set forth the balance on hand in all funds, the antici pated cash income, including an itemized schedule of all revenues from sources other than property taxes.
It must
also show the anticipated collections of delinquent taxes together with the amount of taxes to be levied to finance the budget. 1.
The budget document embraces three parts: A budget message outlinging the fiscal policies,
^Wyoming Compiled Statutes, 1945, Sec. 20-805.
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60 setting forth any unusual requirements. 2.
The general budget summary supported by explanatory
schedules or statements classifying the expenditures contained therein, by funds, offices, departments, and activities and the income by funds, offices, departments, institution and activities. 3.
Complete drafts of the resolutions, ordinances, or
motions required to give legal sanction to the financial plan when adopted by the governing board.
12
The budget calendar in effect at the present time in Wyoming is prescribed by law and is as follows June 1— Forms furnished to budget officer by state examiner. June 1— Schedule of estimated requirements for fiscal year submitted by department heads, (library, hospital) to budget officer. June 15— Schedule of proposed expenditures is submitted by budget officer to the governing board. This schedule, showing departmental requests and budget officer's recommendation is entered in minutes of the governing board. July 14— Budget summary is published in first regular issue of daily or weekly newspaper on or after this date. July 25— Public hearing, county budget (including hospital, library). July 26— Public hearing, city budget. July 27— Public hearing, first class school districts budget. July 26-28— Final budget adopted by each governing board one day following public hearing. August 8— Budget summary statement filed by governing board with board clerk and state examiner within ten days after final adoption.
12 13
Wyoming Compiled Statutes, 1945, Sec. 20-208. Wyoming Taxpayers Association, issued, May 1949.
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61 The preparation of the budget forms, which are distri buted to the various municipalities, takes considerable time and study.
This is especially true in the years following
the convening of the state legislature at which time budget amendments have been passed.
The state examiner must
thoroughly analyze the amendments before they can complete the budget forms.
There are various and lengthy conferences
with the attorney general to insure legality and adequacy. A different type of budget form must be prepared for each class of municipality coming under the municipal budget act.
This means that the state examiner must prepare six
different types of budgets.
Also included with the budget
forms is a set of instructions.
The state examiner estimates
it takes the greater part of one month for two trained men from his office to complete the budget forms. 14 At the time of sending the budget forms out, the state examiner requests that certain pages of the budgets be sent to his office as soon after July first as possible.
This is
to allow time to review the submitted pages and offer any needed advice.
By following these instructions errors may
be eliminated prior to final adoption. In order that a more uniform system of budget prepara tion and execution may be brought about, the state examiner
14
Interview with State Examiner, Norris E. Hartwell, January 19, 1949.
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62
also furnishes suggested forms for the quarterly reports which are required to be sent to the examiner's office.
Also
forms of notice to be published for transference of funds are supplied by this office. It is the avowed aim of the state examiner to keep the municipalities advised of all opinions and rulings in con nection with budgets and budget procedure. Below are a few examples of the directives and instruc tions distributed by the state examiner.
These instructions
aid the municipalities in budget preparation.
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63
COPY
THE STATE OF WYOMING OFFICE OF THE STATE EXAMINEE CHEYENNE
TO THE COUNTY CLERK: _____________ COUNTY There are enclosed four (4) sets of forms for the use of your County In preparing the Semi-Annual Abstract Statement of the receipts and expenditures for the LAST SIX MONTHS of this year, In accordance with the provisions of Section 27-817, Wyoming Compiled Statutes of 1945. Form paged 3 and 4 is to be prepared by the County Treasurer, and form paged 1 and 2 should be pre pared by the County Clerk; the certificate on page 2 should be executed by the Chairman of the Board of County Commissioners and the County Clerk. We ask that you have these forms properly completed and the originals mailed to this office as soon as possible after the first of next month. Yours very truly,
Norris E. Hartwell State Examiner
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54
COPY STATE OF WYOMING OFFICE OF STATE EXAMINER Cheyenne BUDGET INFORMATION
Bulletin #1-48)
This bulletin has been prepared as a means of furnishing you with information relative to the Municipal Budget Act as amended by the 1947 Legislature. We hope the following information will be of benefit to you in the preparation of your budget. TENTATIVE BUDGET: The Budget Officer shall by June 15th submit to the governing board of the municipality, a schedule of the proposed expenditures for the ensuing fiscal year. The Board shall consider the proposed expendi ture schedules and make such alterations as it may deem necessary. jA summary of the tentative budget shall be entered upon the minutes of the governing board. HEARINGS FOR BUDGET: Cities School Districts Counties PUBLICATION OF
July 27 (Fourth Tuesday in July) July28 (Fourth Wednesday in July) July 26(Fourth Monday inJuly)
NOTICE OF HEARING;
Said publication shall be made in the first regular issue of the designated newspaper appearing on or after the 14th day of July. The notice need be published only once. ADOPTION OF BUDGET; On the day following the public hearing, the govern ing board of the municipality shall meet and adopt the final budget. GENERAL INFORMATION ROAD AND BRIDGE SINKING FUND; This fund shall be shown as a separate item in the budget and all expenditures from this fund shall be
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65 made in the same manner as from other special funds and must be shown on the quarterly report of expendi tures under Special Funds. CASH RESERVE FUND: If necessary, 80% of the Cash Reserve Fund can now be used to supplement the various departments. Notice of intention to make such transfer shall be published once by order of the governing board in a newspaper of general circulation in the municipality, with a copy to the State Examiner, at least one week prior to the date of the meeting of the board when such transfer is proposed to be made. In the event any board must adopt for the transfer shall be entered lished as a part board.
transfer is approved, the governing a resolution setting forth the reason and the amount. Such resolution upon the official minutes to be pub of the official proceedings of the
No expenditure can be charged directly to the Cash Reserve Fund but must be transferred to the account affected by resolution of the governing board. Once a Cash Reserve Fund is established it cannot be abolished but must be restored in the next years budget according to its original amount. A Cash Reserve Fund can be increased from year to year but there is no provision in the statutes to decrease it or abolish it. OTHER TRANSFERS: SURPLUS IN OTHER DEPARTMENTS: If, during the latter half of the year, there are no funds available from the cash reserve fund, unanticipated requirements can be met from funds deemed surplus in other departments. Notice of intention to transfer must be done in the same manner as transferring from the Cash Reserve Fund. UNANTICIPATED INCOME: If necessary, unanticipated requirements can be met from funds received in excess of the amounts anticipated in the budget. In order to use these funds, notice of intention to transfer must be done in the same manner as transferring from the
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66
Cash Reserve Fund. DEPRECIATION RESERVE FUNDS: The budget act now permits the establishment of Depreciation Reserve Funds. It is the opinion of this department that there is little, if any, need for these funds to be set up, except perhaps in unusual cases. It is our opinion that if established, they should be from expended balances remaining in the particu lar budget fund of the department for which the Depreciation Reserve Fund is created. If any Depreciation Reserve Funds are established, proper accounting must be made of all expenditures from these funds on your books and also reported under Special Funds in the quarterly report of expenditures to this office.
Bulletin #1-48
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67
COPY STATE OF WYOMING OFFICE OF STATE EXAMINER Cheyenne In accordance with Section 15 of the Municipal Budget Act of 1945 it will be necessary for your political subdivision to send to this office a quarterly statement showing the amounts appropriated for each department or activity, the amounts expended each quarter, the amounts expended to date and the unexpended balances remaining in each department or activity. During the prior periods some difficulty was experienced in securing uniform reports from the various political subdivisions. As a means of securing uniform reports showing the necessary information, this office is sending you sample forms for your convenience in preparing your future reports. These forms will not be supplied by this Depart ment in the future; however it is our desire that you follow this form when submitting your quarterly reports. The following explanation may help: Column 1:
The account number of the department or activity, such as B-l, B-2, etc.
Column 2:
Name of the Department or activity corresponding to the account number shown above.
Column 3:
Amount of Appropriation for each depart ment or activity, according to the classification as budgeted for the year.
Column 4:
Amount expended during the quarter, from each account.
Column 5:
Total amount expended to date, from each account.
Column 6: Unexpended balance remaining in each account, according to the classification.
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68
Your cooperation in the preparation and filing of the quarterly reports, immediately following the close of each quarter, will he appreciated. Very truly yours, Norris E. Hartwell State Examiner
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69
Wyoming; Municipal Budget Act The Wyoming municipal budget act has been on the statute books for five years.
It is no longer a thing of mystery,
and with the changes brought about by the 1947 legislative session, it is now a workable and somewhat flexible document. These changes had to do with various sections in the original lav;.
In the years 1945 to 1947 various changes were deemed
advisable and the original bill was amended.
The change in
volved the date on which the state examiner had to furnish the prescribed budget forms.
The amended version set the date 15 back from May first each year to June first. Another change brought about in 1947 dealt with the cash reserve fund.
Prior
to this date the statute contained a proviso which "provided that the total budget including such cash reserve shall not exceed the actual expenditures of the highest one of ten pre ceding years by more than fifty per cent." -I
sion this percentum clause was dropped.
In the 1947 ver-
r*
The third change
mentioned above would relieve the confusion that was brought about by a misinterpretation.
The word in question was
catastrophes and the 1947 amendment changed it to emergencies. This misinterpretation came about in supplementing funds from
15
Wyoming Compiled Statutes, 1945, Cumulative Pocket Supplement, 1949, Sec. 20-805. -j g
Wyoming Compiled Statutes, 1945, Cumulative Pocket Supplement, 1949, Sec. 20-809.
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70 the cash reserve fund to meet any unforeseen event.
The
legislature evidently considered "emergency" less ambigious 17 than "catastrophe". The other two changes in 1947 had to do with clarifying sections of the original bill.
All of
these amendments contribute to the workability of the origi nal budget act. The budget act provides that the state examiner is to furnish the forms suitable to the several classes of munici palities and meet the requirements of the budget act.
Each
year there have been some revisions in the arrangement and desired information.
These revisions came about as the
examiner and staff became more familiar with budgetary pro cedure.
In some cases more expedient and economical ways
were discovered.
One timely example is in the 1949-50 forms,
which contained the following statement, "the total appropri ation does not include the amount required for the cash re serve fund.
The cash reserve is shown below the amount re
quired for actual appropriations, but it is included in the 18 total requirements." As stated above, the municipal budget act is a somewhat flexible document.
This is particularly true as it relates
to the avenues for obtaining increased appropriations after 17
Wyoming Compiled Statutes, 1945, Cumulative Pocket Supplement, 1949, Sec. 20-811. 18 Wyoming municipal budget act, an excerpt from an address by Percy F. Jowett, former assistant examiner in the state examiner's office, June 10-11, 1949.
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71 the budget has been formally adopted.
There are three ways
to supplement a departmental appropriation if the amount is believed to be insufficient by reasons of unexpected demands not foreseen at the adoption of the budget:
(a) Transfer may
be made from the Cash Reserve Fund; (b) In the latter half of the fiscal year a transfer may be made from funds that are believed to be in surplus; and (c) Any unanticipated income received during the year may be used to supplement a lagging appropriation. 19 After all the precise and detailed consideration which the state examiner's office exercises with the preparation of departmental estimates, revision by the local budget officer, penetrating scrutiny of a public hearing and final approval by the governing board, there are still these three ways by which a departmental appropriation may legally be increased. The budget, as prepared under the municipal budget act, is a flexible document. The municipal budget act requires that the same formality be observed in increasing an appropriation through transfer from the Cash Reserve Fund as was originally required when the budget was adopted. 20 w The budget act is not specific in the method to be followed with regard to increasing an appropriation by transfer from one
19
Wyoming Compiled Statutes, 1945, Sec. 20-811.
20
Wyoming Compiled Statutes, 1945, Sec. 20-811.
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72 department to another, or through the medium of unanticipated income.
It is the opinion of the state examiner that there
must be a published notice and that other steps and arrange ments be made the same as would be necessary if the transfer 21 involved the Gash Reserve. The state examiner must be guided by the budget act as contained in the statutes just the same as local officials or anyone else concerned.
In instances of doubt or question,
an opinion is requested from the attorney general.
The
following letter is an example of a requested opinion on a question involving the municipal budget act. June 27, 1945 Mr. Norris E. Hartwell State Examiner Supreme Court Building Cheyenne, Wyoming Dear Mr. Hartwell: We have your letter of June 26th, containing the following statements: "It appears that the Municipal Budget Act of 1945 provides that a levy can only be made for the purpose of raising funds for the fiscal year. There are several municipali ties that have been making a levy for suf ficient funds to take care of bonds and interest coming due the succeeding year, iirhich is prohibited under the new budget lav;. 11
21
Interview with State Examiner, Norris E. Hartwell, December 1949,
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73 "We would like an opinion from your office as to whether or not a municipality may levy during the fiscal year an additional amount of money to pay bonds and interest coming due July 1, 1946, which would be in the next fiscal year." Also, we note the letters attached showing the circumstances upon which your inquiry is made. Sub-section (b) of Section 14, Chapter 110, Session of Laws of Wyoming. 1 9 4 5 , states: "Nothing in this act shall be construed to limit, amend, or repeal any provision of law providing for the establishment and control of any sinking fund, or any necessary reserve established in connection with any municipally owned public utility." (Wyoming Compiled Statutes. 1 9 4 5 . Sec tion 20-813.) We take this exception to include such "sinking funds" as are required for the retirement of bonded indebtness of the municipalities governed by the budget act. (Chapter 110, Session Laws of Wyoming. 1945.) More over, in each case, where a bonded indebtness is author ized by statute, we find that the almost uniform require ment of the statutes providing for payment of bonds and interest is to the effect that "there shall be annually levied" a tax sufficient to redeem such bonds and pay the interest thereon as they shall fall due. Such provisions are mandatory. An examination of Sections 18-204, 221609, 22-1618, 22-1703, as amended, 29-709, 29-715, 29727, 29-807, and 99-1018 as amended, Wyoming Revised Stat utes . 1 9 5 1 . will show the general plan for the retirement of various kinds of bonds. Further, it would seem that once a municipality has sold its bonds, it would be legally obligated to pay them according to the terms thereof, and we doubt very much if in passing the budget act the legislature in tended to interfere with the obligation of contract repre sented by these bonds, or to interfere with the plans al ready in effect, whereby such bonds would be paid accord ing to their terms, and we might add that the legislature cannot impair the obligation of such contracts. Therefore, we are of the opinion that the munici palities embraced in the budget act should make the neces sary levies each year, in order that they might have on
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74 hand the cash necessary to pay the bonds and interest as they fall due, this irrespective of any other pro vision of the budget act. Very truly yours, Hal E. Morris Deputy Attorney General No arbitrary stand is taken by the state examiner on what should or must be done in matters regarding budgets and budgetary procedure.
The position of the examiner is one of
friendly assistance so that the terms of the law are complied with and that all concerned might benefit. From time to time through the year the state examiner's office sends out numerous directives and tables of instruc tions to the various units of government that are covered by the budget act.
These directions are sent out for the ex
press purpose of helping the units and to insure a uniform system of budgeting for the State of Wyoming. Budget Controls in Wyoming The purpose of budget controls in Wyoming is to provide adequate safeguards so that budget expenditures will conform to estimates.
The municipal budget act provides that the
budget officer must furnish to the governing board and to the state examiner, a quarterly statement showing the amount
^ O p i n i o n s of the Attorneys General of the State of Wyoming, 1941-1947, pp. 668 - 670.
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75 of the appropriations for each department and the total ex penditures charged against the appropriation.
Also shown p 'T
on this report is the unexpended balances remaining to date. u In this way the governing board and the state examiner are able to watch and guide the units in the financial plan that has been adopted. The second budget control provides that after the adop tion of the municipal budget by any municipality subject to the requirements of the municipal budget act it must adhere to the amounts set forth.
No officer, department, or other
spending agency is allowed to spend or contract to be ex pended any amount in excess of the amounts provided in the budget for such office or department.
However, the exten
sion of a contract beyond the close of a fiscal year between municipalities and the State of Wyoming or the United States or between a municipality and a school teacher covering services to be performed within eighteen months will not be deemed to be in violation of the budget act. 24 There are three ways mentioned in the section on the Wyoming municipal budget act that allow the municipalities to adjust various accounts and still remain within the boundaries of legality.
They are as follows:
(1) a trans
fer may be made from the Cash Reserve Fund; (2) in the latter
23 24
Wyoming: Compiled Statutes, 1945, Sec. 20-814. Wyoming; Compiled Statutes, 1945, Sec. 20-815.
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76 half of the fiscal year a transfer may be made from funds that are believed to be in surplus; (3) any unanticipated income received during the year may be used to supplement a lagging appropriation.
Each of these adjustment devices
is instigated and operated in the same formal manner found 05 in adopting the original budget.*" There are three distinct controls that apply to municipal budgets.
They are:
(1) the state examiner prepares the
forms to be used which insures uniformity; (2) quarterly re ports are submitted by the budget officer to the governing board and the state examiner; and (3) the statutory require ment that makes it illegal to exceed the amount set forth in the adopted budget.
These are the three major budget controls
in Wyoming municipal budget procedure. Wyoming Budget Officers1 School The Wyoming Budget Officers' school was started at the request of the County Officers Association.
This association
was of the opinion that with the increased demands made on the elected officials of the state that some type of program of instruction should be started.
In 1947 there was a meeting
of the budget officers of the various municipalities through out the state.
This meeting was held at the University of
Wyoming under the joint direction of the Division of Adult
Wyoming Compiled Statutes, 1945, Sec. 20-802.
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77 Education and Community Service and the State Examiner's Office.
It was the opinion of the officers that the meetings
should be held once each year. The budget officers' school plans a program of orienta tion of budget affairs to aid the municipal budget officers in their duties.
The program is supported by instruction
furnished by the state examiner and his staff.
General and
sometimes specific problems are discussed and settled at this meeting. The school met again in April 1948.
The sponsorship had
increased and now included, in addition to the Adult Education Division and the State Examiner, the Wyoming Taxpayers Associ ation. In arranging the program for the budget officers' school the common problems that occur in the field were considered. Every effort was, and is, being made to give the participating budget officers a thorough knowledge of the budgetary procedure in Wyoming. A new plan was used in the 1949 school in instructing the participants.
It was realized that among the municipal budget
officers there tyere three different catagories involved.
To
save time and increase interest the workshop approach was used.
There was a workshop for cities, schools, and counties.
Each workshop discussed problems common to their phase of budget preparation.
At the conclusion of the two-day meeting
the various workshops made recommendations as to future policy
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78 and undertakings of the school. It was the opinion of all workshop groups that the pro visions of the municipal budget act should be extended to other districts and phases of local government.
The members
also very heartily recommended that the school be held the following year and that more employees who actually do the budget work attend these meetings. G-enerally speaking every one agrees that the Wyoming Budget Officers' school is performing a service to the state and all of its citizens.
When the officials who handle the
budget making duties are thoroughly familiar with their jobs and cognizant of the responsibility associated with their jobs the state will realize efficient government.
These are
the principles upon which the budget officers school operates. An example of the practice problems that are submitted to the participants at the budget officers school is shown below.
This is a hypothetical problem.
Explanation of Problems The first question to be answered is, what amount has to be raised by property taxes?
It is then necessary to deter
mine the tax levy required to raise that amount of money.
The
amount to be raised by property taxes in the problem is $135,525.
This amount was determined by adding columns 5
and 6 and subtracting column 4 as directed on Exhibit A.
The
amount shown in column 5 ($300,500) is the total amount needed by the county offices, road and bridge fund, and the cash
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79
reserve fund.
The separate amounts are shown on Exhibit B.
The information shown on Exhibit B is given in the pertinent information section.
For the sake of clarity the amount of
|100,000 shown opposite the title courthouse and jail on Exhibit B represents the total amount appropriated for all the county offices shown above the figure.
In reality the
amount of 0100,000 would be distributed among the many county offices. The amount in column 4 is the total of columns 2 and 3 on Exhibit A.
This is by direction shown on Exhibit A.
The
figure shown in column 6, Exhibit A, is determined by taking 5 per cent tax delinquency of 1947-48,
stated in the pertinent
information section, of the recommended 1948-49 total appropri ation of 1300,500.
The result is |15,025.
For the amount in
column 7 add columns 5 and 6 and subtract column 4. amount is $135,525.
The
To determine the mill levy divide the
amount in column 7, 0135,525, by the total assessed valuation of the county.
This amount is 042,000,000 which was given in
the information section.
The mill levy is .0032.
In preparing the budget summary Exhibit A the amount shown in column 2 is given in the pertinent information sec tion.
The amount shown in column 3 is determined from
Schedule A-l.
To arrive at this amount of 131,500, which
represents the enencumbered cash balance available for the budget, subtract that amount from the total of non-property tax revenues and uncollected taxes which is 0131,500.
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The
80 result Is $99,500, the amount shown In column 3. In explanation of Problem B all the amounts needed are given in the pertinent information section.
The amount shown
in column 3 of Exhibit C is $107,000, a total of $32,000 allowed for salaries and maintenance and an amount of $75,000 allowed for replacement of lost bridges tahen out by flash floods.
The other amount of $23,000 equals the expenditures
of county offices to date.
Problem B is an example of the
quarterly report that is submitted to the state examiner by op using units as required by statute.
26 Wyoming Compiled Statutes, 1945, Sec. 20-814.
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81 WYOMING BUDGET OFFICERS SCHOOL Problem A.
Any County, Wyoming; June 30, 1948; Assessed valuation 842,000,000
Pertinent information;
GENERAL FUND
Cash on hand Unpaid bills Purchase orders outstanding to be paid September 1 Established cash reserve fund total Recommended 1948-49 total appropri ation, general fund Tax delinquency 1947-48 Estimate of delinquent taxes to be collected during 1948-49 Total non-property tax income available for the budget General fund appropriations: County offices, total Road and Bridges
$80,500 31.000 13.000 70,500 300,500
b% 1,000 130.000
100.000 130,000
Things to be d o n e : 1. 2. 3. 4.
Determine the amount to be raised by property taxes and set the tax levy. Prepare the Budget Summary— Exhibit A. Prepare a Statement of Cash and Revenue Available for the 1948-49 Budget— Schedule A-l. Prepare a Summary of General Fund Appropriations in the manner of Exhibit B, disregarding the experience of previous years as indicated by the first two columns.
Problem B.
September 30, 1948
Expenditures of county offices to date Expenditures, Road and Bridge; a. Salaries and maintenance b. To replace bridges which were taken out by flash floods, con tract have been awarded which total
$23,000 32.000
75.000
Things to be d o n e : 1.
In accordance with Section 20-814 of the Municipal Budget Act, prepare a quarterly report of approprl-
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WYOMING- BUDG-ET OFFICERS SCHOOL (continued)
ations, expenditures, and balances to county commissioners and the examiner. The quarterly report will involve budget ing a transfer and establish allotments.
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Exhibit
-------------------------------------------------------------------------------County BUDGET
SUMMARY AND COMPUTATION
For the
________2. Total Cash Available for Budget
FUND
3.
Fiscal
Year
A
TAXES
Ending June 3 0 ,1 9 4 8
4.
Total A n ticip ated Income Available for Budget
OF
5.
6.
7._________ 8.______
Estimated E s tim ate d Tota Provision Budget O ffic e r Total Cash Requirments for fo r Tax Estim ate fo r Shrinkage Tax Levy and Income A ppropriations (C o ls .2 & 3 ) (See Note) Requirements
Tax Levy Requirem ent Tentatively Approved
(C o ls .5 & 6 )
less Col. 4 Amount
General
Weed and Pest Control
80,500
99,500
180,000
300,500
1.5,025
Mill Levy Amount Mill Levy
135, .0032 525
135, .0032 525
County Fair County Hospital Library Bond
S inking
Bond
Interest
NOTE:
Provision See
for
Tax
S h rinkage
cannot
exceed
actual
am ount
not
c o lle c te d .
Section I I — D.
CD
W )
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_________________ GENERAL FUND
County Schedule A-l
Statement of Cash and Estimated Revenue Available for the 1947-48 Budget A.
CASH 1.
General Fund $ 80,500______ On Hand June 30, 1947 Road & Bridge Fund Road and Bridge Sinking Fund
|_____________ f______________
$
80,500
LESS: 2.
B.
Unpaid Bills, Warrants and Certificates, June 30, 1947 (Include only bills which will be paid first meeting in July; provide for all others in 1947-48 budget.)
3.
Funds to establish Depreciation Reserves
4.
Unencumbered Cash Bal. June 30, 1947. (Cash Bal. Available for Budget)
I 49,000
$ 51,500
ANTICIPATED REVENUE 1. P
Non-property Tax Revenues (See Schedule No. A-2) . . . T T n n o l
T
y o g
•
Estimated Collections— (See Schedule No. A-3)........ 3.
$150,000
Total Estimated Revenues Available for Budget
....
$
1,000 $. 99,500
OD
SU M M A R Y
OF
GENERAL
2*
DEPARTMENT
OR
ACTIVITY
1 9 4 6 -1 9 4 7
Total
Total
Actual
4*
1 9 4 7 -1 9 4 8
5.
Requested
by
Department
Expenses
3*
1 9 4 7 -1 9 4 8 B udget
O fficer
Final by
Approval Board
Recommendation
HH OJIO OIO *• t* OIO OIO OIO 1
Elections Health O ffic e r Cash R eserve Fund Miscellaneous General General
Road and Total
Actual
A PPRO PR IA TIO N
E x h ib it B
Commissioners Clerks Treasurer
County Assessor County S h e r if f County Attorney County Supt. o f S ch o ols County Surveyor County Coroner Agriculture D epartm ent District Court Justice Court Courthouse and Jail Road and Bridge Water Commissioner Livestock Inspector
Total
3*
1 9 4 5 -1 9 4 6
Expenses County County County
FUND
Fund
Bridge
1
Requirements
Sinking
Requirem ents
1 1-J 1O I'* 1CJ1 1O 10 1
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___________________________________________ County
Fund
300,500 NONE 300,500
Note The figur e to the left represent s the total for that part of the column.
86
Exhibit C QUARTERLY REPORT Any, County 2. Amount of Appropriation
County Offices
100,000
23,000
23,000
77,000
Road and Bridge
130,000
107,000
107,000
23,000
Cash Reserve
3. Expended During Qt.
4•
1• Budget Classification
Total Amount Expended
5. Unexpended Balance
70,500
300,500
70,500
130,000
130,000
170,500
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CHAPTER V PROBLEMS OF FINANCIAL CONTROL The principal defect of the organization for financial administration in the state government is the lack of adequate coordinating authority empowered to design, install, and super vise the operation of a unified financial system.
There is no one official in Hyoming to view the financial transactions of the state government as a whole, to visualize the part that each agency should play, to consider how all financial administrative processes should be coordinated, and actually to bring about coordination. The state examiner, who is responsible for all post auditing, is appointed by the governor by and with the advice and consent of the senate, and he reports to the governor. He is thus appointed by, and responsible to, the chief execu tive whose administration he must audit.
These points of duty
are reintroduced at this time to show the lack of proper admini strative procedure.
This arrangement is not designed to insure
that under any circumstances an impartial audit of all trans actions of the government will be made.
An auditor must be
able to pass on all transactions of the government without fear or favor and it is of extreme importance that he be in dependent of the administration. Probably the most common problem affecting the state
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examiner concerns the rapid, turn-over of elected officials in the local governmental units.
The state examiner prepares
the budget forms used by the municipalities.
In preparing
the forms he must keep in mind that the personnel using them will not be in office long and therefore will not be well trained in budget procedure.
After preparing the forms the
state examiner must see that the using officers are adequately instructed in the correct manner of application.
They must
adhere to the rules and demands set forth in the instructions to insure a uniform system.
The idea of uniformity is highly
desirable to the state examiner because from the material submitted by the municipalities, he will draw his informa tion to include in the biennial report to the governor.
All
the information must be prepared in the same way and in the correct categories for purposes of comparison. With "election to office" demands and requirements as they are, in this and other states, the best and most highly trained personnel are not always elected.
An elected local budget
officer or any local officer under the jurisdiction of the state examiner, who is faced with short tenure plus the task of interpreting and using technical information, presents a serious problem to the examiner. a state wide aspect.
Especially when viewed from
One must not make the assumption that all
elected local officials are untrained or unaxitare of their duties and requirements, but one must consider the problem so long as
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89 it does exist. Another serious problem is that of inadequate appropri ations.
Because of lack of funds the state examiner is
forced to deploy his assistants very sparingly to their required duties.
This cannot be considered lightly.
The
state examiner's work is most important and he should not be expected to perform the duties of his office without suf ficient personnel.
The office is under staffed at present.
This shortage of personnel has been recognized from many quarters, but unfortunately no one has instigated proper action to alleviate the situation.
The City Workshop divi
sion of the 1949 ’ Wyoming Budget Officers School recommended that the State of Wyoming employ more state examiners prefer ably University of Wyoming graduates.
This recommendation was
made in the interest of greater and more efficient use of the municipal budget act.^
It can easily be seen and understood
by the layman that with the required duties placed upon the office of state examiner and the amount of personnel allowed that some work is going to be neglected. tion on the state examiner.
This is no reflec
At the present time the examiner's
office has approximately eight hundred political subdivisions, plus a number of tax supported Institutions and the state banks to examine tv/ice a year with a force numbering fourteen including the state examiner.
Hardly and adequate number to
■^Report of City Workshop, Walter T. Schmehl, "Abstract of the Proceedings of the Third Budget Officers' School," 1949, p . 9.
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perform the legal duties. The present state examiner appears to be cognizant of the necessity for effective audits of public agencies and realizes the need for adequate and unified accounts.
However, he is
well aware of the fact that the staff is not adequate for the effective discharge of all the duties required.
It is hoped
that this condition can be remedied in the future.
It is
fortunate that the present state examiner is of such a nature that the utmost in performance is being delivered with the least amount of personnel. The state examiner is some times faced with emergency duties.
During the winter of 1949 the state examiner's office
played an important role in ''Operation Snowbound."
This
office prepared and submitted the financial statements of the appropriations and disbursements in connection with the Emer gency Storm Relief.
The examiners devoted considerable time
and effort to the examining of claims in attempting to be fair to the individuals, counties and the state. The following three schedules show the financial project submitted by the state examiner: Schedule #1
This schedule covers the Federal Emergency Relief Fund, which was a grant from the United States Government in the amount of .$125,000 to be used for emergency storm relief. Disbursements from this fund were governed by certain restrictions as to dates, type of labor, and roads cleared. The majority of it was remitted direct to counties for reimbursement of funds spent by the counties, for the type of work which met the government requirements, however, some claims were paid direct to individuals.
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91 Schedule #2
Covers the first appropriations made by the State Legislature which convened shortly after the big blizzard. This appropriation was for $200,000 and was to be used in re imbursing counties on a 60-40 basis.
Schedule #3
This schedule covers the second State Emer gency Relief Board Contingent of $500,000.
Federal Emergency Relief Fund
SCHEDULE #1
Received from Federal Works Agency . . . $125,000.00 Interest credited to f u n d ............ 68.74 Disbursements: To 12 Counties for road w o r k .......... To individual contractors in three counties for road w o r k ............ Total disbursed STATE EMERGENCY RELIEF BOARD Contingent ■State legislative appropriation
77,503.15 47, 565.61 $125,068.74
SCHEDULE #2
....
$200,000.00
Disbursements: To state examiner for audit .......... 1,772.87 Administrative and clerical expense . . 964.90 Road w o r k ................. * ......... 279.33 Communications expenses .............. 717.01 Transportation of road clearing equipment 129.05 Total disbursed ...................... $3,920.64 Auditor's balance August 15, 1949 . . . $196,079.36 STATE EMERGENCY RELIEF BOARD Contingent State legislature appropriation
SCHEDULE #3
....
$500,000.00
To counties for administration, road work and other expenses ............ Adjutant General's contingent ........ Miscellaneous expense ................ Total disbursed ...................... Reverted to General Fund ..............
226,694.00 14,350.00 4,051.29 ^245,105.22 ^245,894.78
Disbursements:
TOTAL DISBURSED BY STATE EMERGENCY RELIEF 2 B O A R D ................................. $374,094.60 2
Louise Love, Report of Wyoming's "Operation Snowbound," 1949, pp. 86-88.
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It can be seen from the above project that the state examiner is important to financial matters of the state. This report shows adequate financial control as exercised by the state examiner in this emergency.
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CHAPTER VI SUMMARY From the early history of Wyoming there has been finan cial control.
This power was granted to the state examiner
by the constitution and has changed only to keep pace with the growth of the state. The state examiner is the administrative leader of centralized financial control for the State of Wyoming. other states also have this type of organization. Arizona and Montana.
Two
They are
Eoth of these have state examiners.'*'
The power of supervision exercised by the state examiner has contributed greatly to a sound financial program but there is still room for improvement.
In the supervision of state
banks the improvement in operation and absence of failures has been heartening.
In the absence of adequate laws the state
examiner was powerless to do much in the way of relief during the bank catastrophe of the early thirties.
However, the
presence of this office did contribute toward the control of the upheaval after it had once started.
After the bank holi
day there was in Wyoming an organization already in existence to start anew and control the banks in a more sane manner.
"^Austin F. MacDonald, American State Government and Ad ministration , Fourth Edition, p. 247.
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94 The presence of an existing, organized unit armed with new laws and rules of procedure contributed greatly to Wyo ming's speedy recovery.
Today the state examiner exerts great
influence in regard to state bank policy.
His authority, in
matters of finance, is hampered only by the absence of an ade quate staff and sufficient appropriation. It is suggested that in the future a fund be created to be called the State Examiner's Emergency Fund.
This fund
would be held in abeyance for use in stemming a financial crisis should it arise due to conditions beyond the power of the examiner.
The fund would only be available through an
order by the governor, upon the advice of the state examiner. This type of fund would strengthen the authority and control element of the state examiner.
It would also help to achieve
a recovery should the need arise.
Having a fund on hand is
more expedient than having to call the legislature into spe cial session to appropriate badly needed funds.
This suggestion
can be considered over-cautious, but when matters of finance of a state-wide nature are concerned, Gaution should be the byward.
Every feasible means should be employed to provide
a sound, safe and well controlled state banking system.
It
behooves a state to contribute means of control and guidance to protect this system.
On December 31, 1949, the twenty-
nine state banks of Wyoming held |2,418,929.27 in obligations
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95 of state and political subdivisions.
p
This is a considerable
sum of money and the institutions holding it should have every protection possible.
The present state examiner is fully
aware of the responsibility accorded him and is exercising every means available to achieve a sound state banking system. The municipal budget act that was passed in 1945 did much to strengthen the office of the state examiner.
The
law delegated the duty of preparing the budget forms, to be used by the municipalities, to the state examiner.
This as
pect is of extreme importance and it can be said that the whole budget procedure is made more workable with adequate and feasible budget forms.
These forms are a studied project
and embrace all the many intricacies of budgetary procedure. Should they be inadequate then one may surmise that the budget plan would fail.
The present municipal budget plan
has not failed, but has increased in efficiency.
There is
every reason to believe that in the future it will embrace all political subdivisions in the state.
This was the
general recommendation of the 1949 budget officers school. In addition to prescribing the budget form to be used to Insure uniformity, the state examiner has to inspect the various budgets and pass on their merits. degree that they must abide by the law.
At least to the In this way the
state examiner has a good financial picture of conditions
2 Annual Report of the Division of Banks of the State Ex aminer of Wyoming, for the year ending Dec. 31, 1949, p. 6.
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96
existing in the various municipalities and can come to their aid when needed.
The aid supplied by the state examiner is
strengthened by the quarterly reports submitted by the munici palities.
This financial safeguard is a great service to the
state and to the citizens. The budget is of extreme importance to all levels of governments in the United States.
Although it has not been
in general use for a long time, at the present there is hardly a governmental unit that does not have some financial plan governing receipts and disbursements. is termed a budget.
This financial plan
In Wyoming the state examiner not only has
supervision over municipal budget affairs, but he must see that all tax supported institutions adhere to their financial plans. These institutions Include the various eleemosynary ventures supported by the state and institutions of correction and edu cation.
Their budgets are examined to determine if the infor
mation declared is true and correct.
All books, records, and
vouchers are examined from time to time in unannounced visits from the state examiner.
Every venture of state government
where tax money is involved is examined by the state examiner. This service is comforting to the taxpayer. A suggestion is offered to the effect that in matters of financial control a more centralized program should be enacted. A coordinating authority should be provided.
This would facili
tate the operation of a unified financial system for the entire state.
Included within this coordinating authority would be
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the state examiner1s office.
It has been stated previously
that the examiner through the exercise of his duties has a good picture of financial natters on the municipal level. This plan for a coordinating autboritj’g with the examiner's office included, would possibly complete a picture of govern ment finance throughout the state.
Not only would the financi
al condition be easier to determine but future plans and policies would be in harmony.
VJhere the state examiner has
been able to show by comparison the cost of municipal govern ments and bring about savings to the citizens of the state so might it be possible to do the same with state government agencies and departments.
By having: this plan of an authority
in power to coordinate the financial arrangements and ventures of the entire state a great saving could be possible.
This
saving would be possible by the elimination of waste, duplica tions and overlapping duties. This authority could be planned on a commission arrange ment.
Included would be the treasurer, auditor, state ex
aminer and the state purchasing authority.
It could be called
the Finance Commission and have an appointive official as its administrative leader.
The appointment would be made by the
governor with the advice and consent of the senate. The commissioner could cover sections providing for ade quate budgeting, accounting, pre-auditing, fiscal reporting, treasury management and revenue administration.
All of these
tasks could be woven together in a unified and integrated
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98 system.
One could expect to have real effective financial
administration with a program calling for the coordination and correlation of the various processes involved.
Another
advantage arising from such an arrangement would be the op portunity of an effective post-audit by a completely inde pendent group.
This post-audit could cover all the processes
included under the commission. In the matter of budget controls there is much to be desired.
Wyoming has budget control on both the state and
local levels but there is reason to believe there is room for improvement.
Savings and efficiency are realized at
present, but these desirable aspects could be increased by a more effective use of budget controls.
It is possible that
if budgetary control is weak this weakness will be reflected throughout the various governmental segments in the form of inefficiency and waste.
The elimination of inefficiency and
waste should be a desired goal of all governments. From its earliest history Wyoming has been conscious of the advantages of effective financial controls.
It is be
lieved that in the future this awareness will grow and the elimination of wastes and inefficiency in government will be reduced to the minimum.
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99 BOOKS Buck, Arthur E . , Public Budgeting (New York: 612 p p .
Harper, 1929).
Erwin, Marie H . , Wyoming Historical Blue B o o k , A Legal and Political History of Wyoming 1869-1945 (Denver: Brad ford Robinson Printing Company, 1943). 1453 pp. Groves, Harold M . , Financing Government (New York: 1945). 653 pp.
Holt,
Macdonald, Austin F . , American State Government and Admini stration (New York: Crowell, 4th ed., 1946). 722 pp. PERIODICALS Lowrie, S. Gale, "The Proper Functions of the State Budget," The Annals of the American Academy of Political and Social Science, Volume LXII. 323 pp. Willoughby, W. F . , "Budgets, 11 Encyclopaedia of the Social Sciences (New York: Macmillan Company, 1930) Volume 3. 681 pp. , Municipal Finance, XIII, February, 1941. Number 3 (Chicago: Municipal Finance Officers Association of the United States and Canada, 1941). WYOMING STATE PUBLICATIONS Anonymous, Constitution of the State of Wyoming, Including all Amendments Adopted to January 1, 1949 (Casper, Wyoming: Prairie Publishing Company, 1949). , 1949-50 County Budget Form (Sheridan, Wyoming: Mills Company, 1949).
The
Division of Banks, Office of the State Examiner. Annual Report, December 5 1 , 1949 (Cheyenne, Wyoming: Pioneer Printing Company, 1950). Griffenhagen and Associate, Report Made to the Special Legisla tive Committee on Organization and Revenue, 1933 (Cheyenne, Wyoming: Wyoming Labor Journal Press, 1933; Casper, Wyoming, Prairie Publishing Company, 1933, Volume 2 imprint). This publication was processed by the two publishers listed above. The Prairie Publishing Company published the Volume 2 edition. Both volumes were ori ginally published by the Wyoming Labor Journal Press.
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100
, Journalof the Council of the Tenth Regular Assembly of the Territory of Wyoming, January, 1888 (Cheyenne, Wyo ming: E. A. Slack, Printer and. Binder, Daily Sun Office. , Journal of the House of Representatives of the First Legislative Assembly, State of Wyoming, November, 1890. The Journal for the first legislative session was not printed. Hand written originals are in the vault of the secretary of state's office. , Journal of the Senate of the First LegislativeAssembly, State of Wyoming, November, 1390. The Journal for the first legislative session was not printed. Hand written originals are in the vault of the secretary of state's office. , The Journal of the Senate of the Twenty-eighth State Legislature of Wyoming, January, 1945 (Sheridan, Wyoming: The Hills Company)’. , The Journal of the Senate of the Thirtieth State Legis lature of Wyoming, January, 1949 TSheridan, Wyoming: The Hills Company). , Messages of the Governors, 1369-1890, Francis E. Warren's report to the Eleventh Assembly (Cheyenne, Wyo ming: Bristol-Knabe Printing Company, 1890). , Opinions of the Attorneys General of the State of Wyo ming , 1941-47 '('Sheridan, Wyoming: The Mills Company")". , Session Laws of the State of Wyoming passed by the Eighteenth State Legislature, January, 1925 (Sheridan, Wyoming: The Mills Company, 1925). , Wyoming Revised Statutes, 1951, Annotated (Casper, Wyoming: 3. E. Boyer and Company, 1931). _____, Wyoming Compiled Statutes, 1945 (Indianapolis: Bobbs-Merrill Company, 1945). 5 Volumes.
The
, Wyoming; Compiled Statutes, 1945. , Cumulative Pocket Supplement, 1949 (Indianapolis: The Bobbs-Merrill Co., 1949). 5~~volumes. The Wyoming Emergency Relief Board, Report of Wyoming's "Ojderat ion Snowbound,11 1949. Arranged and edited by Louise Love. Issued by the governor's offic-e.
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MISCELLANEOUS
_> An Abstract of the Proceedings of the Third Budget Officer1s School, Laramie, Wyoming, June 10-11, 1949. Copy In office of Adult Education and Community Service. .> Arizona Compiled Statutes (Revised) , 1959 (Indianapolis: The Bobbs-Merrill Company, 1940). 6 Volumes. .> Budget Schedule, May, 1949. (Cheyenne, Wyoming: ming Taxpayers Association). (Mimeograph copy.)
Wyo
.> County Budget Act of 1959, Compiled by the State Ex aminer A. E. Wilde, 1940. (Mimeograph copy.) Issued by State Examiner's Office. Original State Examiner1s Bond, 1890. Secretary of State Office, Uapitol Building, Cheyenne, Wyoming. .> Revised Code of Montana, 1955 (Helena, Montana: State Publishing Company; Great Falls, Montana: Tribune Print ing and Supply Company, 1956). 5 Volumes. Wyoming Municipal Budget Act. An excerpt from an ad dress by Percy F. Jowett, former examiner of the state examiner's office. Given at the Third Budget Officer's School, Laramie, Wyoming, June, 10-11, 1949. Copy in the office of Adult Education and Community Service. PERSONAL INTERVIEWS Hartwell, Norris E., State Examiner, Supreme Court Building, Cheyenne, Wyoming. Morgan, Sam B., Senior Bank Examiner, Office of the State Ex aminer, Supreme Court Building, Cheyenne, Wyoming. Thayer, James E., City Superintendent of Schools, Laramie High School Building, Laramie, Wyoming.
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Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
Deputy State Examiner W. E . Banks
Public
Bank Examiners
Account
Examiners
M. Clair Carter, Examiner E Floyd Devel, Examiner Joseph Heslep, Examiner C C Browning, Examiner
Sam B. Morgan, Senior Bank Examiner Robert E Scott, Asst Bank Examiner Brenton C. Leavitt, Asst. Bank Examiner
Assistant Examiners Charles
E Johnson
John A. Kennedy A. H Royce S. N Maddox
Clerical
Employees
201
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STATE EX A M IN ER Norris E. Hartwell
104 ROSTER OF EXAMINERS* 1891-194— Name
Term of Office
Joel Ware Foster
March 25, 1891 to December 28, 1892
H. B. Henderson
December 28, 1892 to June 16, 1909
T. C. Nevrlin
June 16, 1909 to October 1, 1920
Rudolph Hofmann
October 1, 1920 to February 1, 1923
Byron S. Hule
February 1, 1923 to November 28, 1924
Stanley A. Brown
November 28, 1924 to April 1, 1927
A. L. Putnam
April 1, 1927 to April 1, 1929
John A. Reed
April 1, 1929 to October 1, 1932
William Reeves, Jr.
October 1, 1932 to April 1, 1933
A. E. Wilde
April 1, 1933 to April 1, 1941
Norris E. Hartwell
April 1, 1941
*Marie H. Erwin, Wyoming Historical Blue B o o k , p. 965.
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