MUNICIPAL FINANCE.

Dominion, Volume 5, Issue 1389, 15 March 1912, Page 6

MUNICIPAL FINANCE.

AN IMPORTANT REPORT.

THE MANCHESTER SYSTEM. A report of great importance and interest to municipalities was recently submitted to tho Manchester City* Council, and tho report is the outoomo of the following resolution, passed in June, 1909: —"That tho Financo Committee bo requested to consider what additional powers, if any, aro desirable to 6ecure a continuous supervision and control of tho expenditure in tho various departments of the Corporation, and to present a report on the whole subject, with such recommendations as may bo deemed necessary." In the report the Financo Committee says:— In the first place, it may be as well briefly to set out the present position. Control by the council over its expenditure is primarily exercised by means of tho submission to the council, through tho Financo Committee, of annual estimates on. capital account and revenue account, which afford the council the opportunity to review the expenditure of the corporation at the commencement of the year. Additional opportunities for control aTe also afforded in respect of capital expenditure and on the submission of thVpi'ocoedinjs of committees. THE ESTIMATES. The standing ordors require each committee to forward, to the Finance Committee in April of eacli year annual estimates on revenue uccount and capital account. The method of preparing the estimates varies in tho departments, but, generally, is as follows:—The Finance Committee passes a resolution early in February requesting that the estimates may be furnished to it by a specified date, in April. As soon as possible tho actual figures for the past financial year are entered on draft sheets, which then show tho estimated and actual payments and receipts for such year. These are sent to the heads of departments, who,. in consultation with the treasurer, insert estimated figures for the now year. Amounts relating to the service of the debt are inserted, together with certain other items, by the treasurer, and a print obtained of such draft estimates. This print is then sent out to the sub-committees which have been appointed by tho several committees, and the estimates aro considered by them. The estimates, after being amended, are reprinted and sent to the general committees, and after consideration and amendment, :'f necessary, are forwarded to the Financo Committee. The Finance Committee reports to each committee the effect of its estimates upon the city rate, and, where necessary, confers with any committee as to a revision of its estimates. The Financo Committee presents the whole of tho estimates to the council on the third Wednesday in May, accompanied by such summaries, statements, and" reports as it deems necessary. The adoption of the estitnatos of each committee is moved in the council by its chairman or other representative. Any supplementary ostimates Tvhich are found necessary during the t year are dealt with in like manner.

. CAPITAL EXPENDITURE. As regards capital expenditure, the standing orders provide that no committee shall incur capital expenditure or recommend an application to a Government Department for borrowing" powers without submitting a detailed report to the Finance Committee, which is to be presented by that committee to tho council with such observations as it may deem necessary or desirable. ' ■

SUPERVISION OF EXPENDITURE. After the estimates have been approved by tho council the Finance Committee has submitted to it week by week a statement showing as regards all the departments on the rate account (1) the estimate for the year, and (2) tho receipts and payments against tho samo to date. At the close of the first six months of tho year it is tho custom of the Financo Committee to request tho several committees to direct their responsible officials to review tho estimates and payments for the year, with a view of malting such arrangements as will prevent tho necessity for supplementary estimates. During tho last six months of tho year —in somo cases earlier—comparative statements are furnished to the committees by the treasurer, fortnightly or monthly, showing the payments against tho estimates.

WHAT THE COMMITTEE PROPOSES. The committee proceeds to say:—lt will bo seen that while there is a certain amount of control exercised over the expenditure on capital account, yet each spending committee is practically independent as regards expenditure on revenue account. That is, it may consider proposals and carry out works without regard to tho proposals of other committees, or their effect upon tho finances of the council generally. Tho constantly-increasing demands of the various departments of tho council require, urgent attention, not merely once a year, When the estimates are considered by the council, but continuously. The experience the committee has obtained in its annual consideration of the estimates, and in its consultations with committees, and by noting tho procedure at council meetings when tho estimates are considered, has convinced it that the present system needs to be revised, and the committee thinks more time should be devoted to tho work, so that the departments may be able calmly and carefully to consider the various proposals along with the Finance Committee before they are submitted to the council. A closer oversight and direction of the council's finances as a whole are necessary if its functions are to be discharged economically as well as efficiently, and the council has recognised this fact with regard to expenditure on capital account, but it appears to the committee that additional powers are necessary over expenditure on revenue account, and that continuous supervision and control should be exercised over the various departments. THE RECOMMENDATIONS. Tho recommendations of the committee fall under the following heads:Relating to now proposals or additional expenditure. Supervision of expenditure. In tho view of the committee, all new proposals for expenditure or increased expenditure should be brought more prominently before the council. There is at the present time a standing order as follows—"Prior to any works involving considerable expenditure b;ing undertaken by anv committee, the subject shall bo brought "distinctly before, the council in the form of a report." But it is the custom' merelv to mention the matter m a few words "in the epitome at the discretion of tho committee, thero being no definition of the words, "considerable expenditure," and very rarely is any amount mentioned. • . . The committee is of opinion that estimates of all such proposals should bo presented to the council by the Finance Committee. Tho responsibility for .recommending expenditure must rest with the committees charged with the. execution of tho council's various powers and duties Moreover, expenditure largely depends upon policy, and the council must be advised on matters of policy by tho executive committees. But the financial hearings of every proposal for expenditure should be examined by the Finance Committee, which should present to tho council a concurrent report upon it when submitting the estimate of the liability proposed to bo entered into. If this procedure were adopted, the council would be able to obtain a complete knowledge of the increasing expenditure, nnd would he in possession of all financial as well as other particulars before it was asked to commit itself to the liability involved. The committee make several suggestions on the preparation of the estimates which, if carried into effect, will tend to centralise finanoial control, and necessarily put mora responsibility upon the city treasurer and his department. This is absolutely essential to secure that all proposals for expenditure are duly brought before the committees and tho council, and to eoo that all the financial regulations are adhered to.