a saving in price. All such considerations enter into the preparation of a good budget. In this connection an article in the February, 1922, number of Better Times on "How to Make a Budget” is worth the study of any budget committee.

The budget committee.-The budget committee should be carefully chosen. Because it is an administrative body rather than a deliberative one my personal belief is that it should be appointive. Its recommendations may well be submitted to a deliberative body composed of delegates of the participating agencies, but I do not believe that such a delegate body should in itself be responsible for the detailed work of budget review.

The task of budget review should not be made so burdensome upon the committee as to make impossible careful consideration of the merits of each individual budget. Where budgets of one hundred or more agencies come up for consideration it is obviously unlikely that any group of lay persons competent to undertake the responsibility of budget review can or will take the time necessary to understand the merits of that many budgets. The solution in this case is to divide the agencies into groups of preferably a dozen or fifteen each and the budget committee into subcommittees of from five to ten persons each, having for instance a budget subcommittee on hospitals which will review the budgets of all the hospitals. This committee will spend three or four entire afternoons at its work. It will meet, we will say, at 1:30 on Tuesday afternoon to consider five different budgets. At 1: 30 representatives of the A Hospital, including the paid executive, the president, and the treasurer, will meet with the committee by appointment. Copies of a statement comparing the proposed budget with the actual experience of the current and preceding fiscal year, and with the budget as approved the year before for the current year, are used as the basis of discussion. The work of the hospital is briefly sketched, changes of policy brought out, extensions or new pieces of work discussed, and estimates of income and expense reviewed item by item.

Statements comparing the amount of service performed by the various hospitals per capita costs, use of Purchasing Bureau, amount of free service performed, percentage of beds occupied, and similar points receive consideration. At the end of half to three-quarters of an hour the conference is closed and representatives of the B Hospital who have been scheduled at 2:00 or 2:15 appear and so on throughout the afternoon. At the close of the afternoon recommendations are made with reference to all the budgets considered during the day. Practically all of the changes recommended by the committee have been discussed and agreed upon during the conference with the individual agencies concerned. In some instances it will be necessary to have a second conference with representatives of an agency, but with competent and adequate secretarial service this will seldom be necessary.

Much depends upon such secretarial service to make sure that figures presented to the committee as the basis for its deliberation are accurate and complete and bring out in a way that is fair to the agency those specific items which require or deserve consideration.

Control of contribution funds gives the budget committee great power, so long as the actions of the committee merit the confidence of the contributing public. The very size of the big stick which it can wield makes it necessary for the committee to flourish that stick very seldom and makes it especially necessary for such a committee to recognize the fact that it is dealing with individual agencies whose independent authority and initiative must be conserved in the best interests not only of the

BUDGET MAKING IN A FEDERATION-CLAPP

401

gencies themselves but also of the fund and of the service which both are organized o promote.

Division of responsibility between the Federation with its budget committee and he individual agency has been subject to a great deal of discussion and consideration, but so far as the speaker knows little has been definitely crystallized into settled policy. Before closing I wish to describe an effort in the direction of the

Responsibility for determining salaries and wages.-Salaries and wages represent ipproximately half of the aggregate expense budgets of the agencies participating in the community fund. In practically every budget they are the largest single item which comes to the attention of the budget committee. How far has the budget committee the right to go in determining salaries paid individual workers? What would there be left for the executive board of the individual agency to do if it had nothing to say about such important matters of internal administration as the amount of salary or wage to be paid its workers? How well could a federation function if it were loaded down with such problems of detailed administration as determining whether A should get a raise or be lost to another position? On the other hand has not the federation reason to be interested if one agency pays to workers in a given position a salary greatly out of proportion to that received by others of like training and ability in a similar position in another organization likewise supported through the fund? How can a fair and equitable salary standard be promoted under such limitations as available funds and public sentiment allow and at the same time definitely place upon individual governing boards full responsibility for administration of their agencies?

It has been necessary for the Welfare Federation of Cleveland to attempt some solution for this problem and the following resolution has been approved by the Board of Trustees of the Federation after months of consideration, which included the submission of a questionnaire to the boards of the individual agencies. This resolution will be adopted at the July meeting of the Governing Board of the Welfare Federation unless objections should be raised by the agencies to whom it has just been re-submitted in its present form. It is quoted here because it states our conceptions of certain fundamental principles and sets forth a procedure which recognizes those principlesa procedure which may, with certain modifications, be applied to other items in the budget aside from salaries and wages. We hope it may be of help to others facing similar problems.

The resolution is as follows: because the present form of organization of the Welfare Federation is based upon an association of independent and autonomous agencies with ultimate authority resting within the governing boards of the respective agencies; because the Welfare Federation has a responsibility to the community fund and its contributors for assuring the most effective use possible of the available funds in the service of philanthropy; because the Welfare Federation has the right to determine the amount to be appropriated by the Federation for any given purpose; because the Welfare Federation has the right to interest itself in any policy or action of a constituent agency likely to affect relations with other federated agencies, such as the payment of salaries out of line with those generally paid for similar work; and because the Federation is in position to secure and prepare information to serve as a guide to agencies and the Budget Committee in consideration of salaries.

Therefore, it has been moved and seconded that the following policy with reference to method of determining salaries shall be adopted:

1. The Federation shall prepare and issue a classification and description of positions with an accompanying schedule, indicating a recommended range of pay for each position below that of chief executive, to serve as a guide to the Budget Committee and the agencies in salary matters.

2. Each agency shall include as usual in its annual budget a salary schedule showing the number of persons it proposes to employ for each position, with the salaries being paid and those proposed for the coming year. All salaries, including those of executives, shall be subject to scrutiny and revision by the Budget Committee, with the approval of the Board of Trustees of the Federation.

3. Where the Board of Trustees of the Welfare Federation adopt any recommendation of the Budget Committee reducing the salary proposed by the agency for any individual position the governing board of the agency shall have the right to over-rule this action of the Federation. The Board of Trustees hope that any agency contemplating such action will feel the matter to be of sufficient importance to warrant consideration by every member of the governing board and the affirmative vote of at least two-thirds of such members.

4. Such action shall not be considered as mandatory upon the Federation to provide the additional funds for such salary increases, but if the Federation on recommendation of the Budget Committee feels that it cannot add to the salary budget the amount of such increases it shall be necessary for the governing board of the agency to make such provision either by rearrangement of other items in the salary budget or by provision of funds from some source outside of the budgeted income.

5. Salaries may be adjusted from time to time during the year by the governing board of the agency in accordance with the range of pay above referred to without reference to the Welfare Federation, provided the total amount to be spent for salaries by the agency is within the total amount of the salary budget, as approved by the Federation.

6. Increases in executive salaries not contemplated in the budget and made during the course of the year shall be subject to the scrutiny and recommendation of the Budget Committee under the same procedure as outlined above for budgeted increases.

In conclusion let me emphasize the need for accurate figures, for several years if possible, as the basis for your budget; the need for a carefully considered program of the service to be performed during the period budgeted; the need for a personal conference between the budget committee and those representatives of each agency chiefly responsible for making and living within the budget; and most important of all the need for safeguarding the individuality of the member agency and at the same time fully recognizing the responsibility of the Budget Committee to the fund and its contributors for the allocation of funds so that the money available may accomplish the greatest possible service to those in need.

ADMINISTRATION PROBLEMS OF COMMUNITY

COLLECTION, DISTRIBUTION, BOOKKEE

Otto W. Davis, Secretary, Council of Social Agencies, Your chairman has directed me to discuss some of the c considered dry details connected with the year-round administrat fund. I do so conscious that it will necessarily have little interest

<ecutive, but with the hope that it may be helpful to those who are facing such probems without having had previous experience in the same field.

Collection and accounting problems begin long before the campaign itself and are o closely allied that we shall consider them more or less together. The methods to be dopted should receive careful consideration at the same time the details of the campaign are considered, rather than afterward. Some of us have heard the cry for help from secretaries who did not realize the need for preparedness along these lines until well into campaign week, when they were overwhelmed with thousands of payments on pledges and found themselves with no adequate or safe method of insuring correct records.

Upon the method of recording payment of pledges will depend the character and form of the pledge card. There are two principal systems for keeping track of payments. One is on the side or back of the pledge card itself. The other, on a separate individual account card which is often filed numerically. Both have their devotees and both are used in large cities having huge numbers of subscribers. The combined pledge and account card saves work at the rush period and the frequent necessity of consulting two files. The separate individual account card, filed numerically, is, perhaps, more scientific, facilitates posting, and insures more accurate identification of payees by making possible the use of the identifying account number on all bills or statements sent to subscribers. Names, addresses, amount of subscription in cipher, and identifying account number can all be easily put on to the separate account cards where addressing machines are used and the stencil is made first. If your supervising accountant will permit, it will save work to make no account cards for those paying in full at the time the subscription is taken.

Whichever system is used, it will save much time if the paid-in-full pledges or account cards are filed separately as fast as paid or at least at the close of each month after all accounts have been proved and statistical data taken.

With all individual account cards properly filed at least to the point where you make your cut-off, the file should be divided into a convenient number of sections called ledgers, none of which should contain more than 5,000 cards. Ledgers may be made for each letter of the alphabet if desired.

If you tape on the adding machine the cards for each ledger, you will obtain the number of cards and the total subscribed. The latter is entered in your control ledger in the accounting department and becomes the basis for all future calculations. If cards for new subscriptions are added to one of the individual account ledgers, an equal amount must be added to the same ledger control account, and vice versa.

From now on each sectional ledger is treated exactly as if it contained all of the accounts. Cards on which payments are made during the month are filed separately and at any given time the total of the unpaid accounts in any ledger must equal the amount shown in your control ledger as outstanding while the amount posted equals that shown by the control ledger to have been received and deposited.

In the best supervised agencies the control or balancing of individual account cards with control ledger is made monthly and is the best practice. It should always be done at least quarterly.

Not until all the above has been completed are we ready to begin posting payments. Meanwhile, what has happened to the payments that have been tendered? Here again we find several systems. Probably the most common one is the use of a triplicate

receipt book composed of perforated receipts. The original is given to the person making the payment if done in person. In most cities it would be considered unwise to mail receipts except when cash is received by mail. The duplicate receipt goes to the posting department, while the triplicate remains as the permanent record for checking by auditors.

Probably a better system is the use of a three-way cash register which furnishes a protection for cash payments found in no other system, registers an accurate total, furnishes a receipt, a duplicate for posting purposes, a permanent record of each transaction for auditing, and if carefully planned and used, does many other useful and helpful things. Some agencies find it especially helpful in auditing pledges and payments during the campaign. The individual ledger card number can be registered if desired. A new and greatly improved cash register is just being placed on the market and is worthy of the careful consideration of every executive of a community fund in a large city.

If the office force is large enough, all moneys should be received by a cashier, who never touches the posting or the books in the accounting department. The cashier certifies daily the amount received. The posting clerk likewise certifies daily the amount posted to each ledger, the total of which must equal that received and deposited by the cashier. In this way a good internal check is secured. In some federations each day's payments are typed alphabetically. This list is good for reference purposes in case of a complaint and facilitates posting.

We are now ready to consider more specifically the matter of collections. If subscribers are encouraged to make pledges on a quarterly basis, rather than monthly, the labor and expense of collection will be simplified. Sending a letter or statement soon after the campaign acknowledging the subscription and requesting prompt payment as well as emphasizing the saving prompt payment will effect has been found to bring good results. It is customary to send a statement showing amount pledged, amount paid, and payment due, at least quarterly, with follow-up statements or letters monthly to all delinquents. Subscribers should be encouraged to pay instalments regularly. Using the phone to remind delinquents has been found very effective. A good follow-up system culminating in a personal call, where necessary, is essential.

Enlisting the aid and co-operation of heads of business houses or firms is often found helpful in collecting from employees. A warning should be sounded, however, against doing anything which will cause a subscriber to feel embarrassed among his fellowworkers. It is easy to make him into a chronic kicker who can do far more damage than his money is worth. This is particularly true of the moderate or small subscriber. There is less danger in putting pressure upon well-to-do men as they are usually known when they are poor pay, and their kick finds a less ready lodging place.

Many cities avail themselves of the opportunity to do propaganda work by inclosing a piece of literature with the monthly or quarterly statement or as a part of the statement. As a last resort, in some cities, use has been made of the Credit Men's Association in trying to secure payment from well-known dead-beats. Some have tried to force payment by legal action, but so far as the writer knows, the reaction has been always unfavorable. Considerable amounts may sometimes be obtained by filing claims where wills of wealthy deceased persons are probated and also in cases of bankruptcy proceedings.

Before funds are distributed, every well-organized federation will require from each participating agency a detailed statement showing exact receipts and disbursements