frsbog_mim_v21_0874.pdf

7/17/2019 frsbog_mim_v21_0874.pdf

http://slidepdf.com/reader/full/frsbogmimv210874pdf 1/3

s t . i 23G. 8 7 4

Summary of replies received i n answer to the Board*s letter St.Ul67 of

July 29, 1924, su bj ec t Expense Budget,

w

GENERAL SUMMARY

Sinc-e Jan . 1 , 1921

I Banks having some form of Budget Control:

In e f fec t

1. New York

2 . Cleveland

3 . Chicago

4 . Kansas City(partial)

Results

During last 2 years

I

Banks planning

t o

install Budget System:

January 1, 1925

As soon a s possible

B ig factor i n reducing

expenses.

Since July 1 , 1924 Too ear ly t o report.

(Operating Depts .: Jan. 1,1924 Has been a material

(Agent*s Dept.:

Foi .13

years, fac tor

i n

reducing

ex-

penses.

Sat i s factory f o r some

departments.

1 .

Richmond

2 . Minneapolis

I I Banks n o t operating under any form of Budget Control and which have made no plans

f o r instal l ing such a system;

1 . Boston

2 .

Philadelphia

3, Atlanta

4 . S t .

Louis

DETAILED SUMMARY

5 . Dallas

6, San Francisco

BOSTON

1. Has

never undertaken

t o

i n s t a l l

a

budget system.

2 . Budget might be established and lived up to in a few departments,

3 . Certain expenses cannot b e anticipated: Example - Note issuance and Fiscal

Agency.

4 . Operations i n such departments a a Discounts, Transit and Currency a r e more

, act ive a t certain t imes of the month and at certain seasons of the year

than a t others and force must be maintained t o handle peak loads.

5. Trend i f ' expenses h a a been downward during past two ye ar s: Expenses covering

f i r s t ha l f of 1924 ar e $80,000 less than f o r corresponding period in 1923.

NEW

YORK

1. Has operated under ejgpense budget since January 1, 1921.

2. Has

been

one of the

biggest factors

i n

reducing

t h e

operating expenses.

3. Plan i s a s follows:

a .

Detailed fi gu re s covering

t h e

principal i tems

of

expenditure during

the

past

two

years

a r e

submitted

to

department heads

t o

assist them

i n

making

estimates. Committee of three officers reviews these estimates and makes

report

to

Of f i ce r

1

s Council

and the

budget

i s

then submitted

to

directors

f o r

final approval.

7/17/2019 frsbog_mim_v21_0874.pdf


- 2 - S t .

4636 ^375

b . A

monthly, dep art men tal expense r ep or t w it h c-croparative f ig u re s shows

whether expenses

a r e

run nin g wi th in budget

and

also whether they have

increased

o r

decreased over

t h e

same period

of the

year before.

4 . Supplementing t h e budget i s t h e following system of making purchases:

a . Every requisition must be signed b y o f f i c e r s i n charge of department

and i f in excess of 100 must b e approved by sen ior o f f i ce r a s well,

b . Requisition then goes to Planning Division, which passes on i t s necess i ty

and whether or not the a r t i c l e i s standard both f o r manufacturer and for

bank.

c . Deputy Governor then vises a l l purchase requisitions after which they a r e

made upon a str ict ly competi t ive basis ,

1 . Has no t pu t any departments on a budget*

2. In a few

in sta nc es r es tr ic te d appropriati ons have been made.

3 .

Cost

of

food

i n

c a f e t e r i a

i s

limited

t o

approximate receipts.

ELAND

1. Has jus t es tabl i shed a budget f o r t h e l as t s i x months of 1924,

2 . Budgeted t h e expense units a s now reported i n t h e Functional Expense Reports.

• 3* Too ea r ly to repor t r e su l t s .

Plan i s a s fol lows:

a . Furnished each o f f i c e r wit h a form showing cost f o r t h e f i r s t h a l f of

192k of the expense utoits under h i s supervision and requested a report on

t h e

probable expenses

f o r t h e

las t ha l f

of

year. Budget Commit

t e e r e -

viewed estimates

and

approved figures were reported back

to

off icers wi th

statement that

th e

amounts approved were

th e

maximum amounts that could

b e

expended

an d

even these should

be

further reduced

i f

poss ible ,

BI OSMOND

1. Has n ot y et i n operat ion a budget control b u t expects t o i n s t a l l one by

January 1, 1925.

2 , Present system of expense control i s a t a l l times under the careful super-

v i s i o n of t he execut ive of f icers and i s designed t o maintain a rigid super-

vision over salaries of employees, promotions and t ransfers , te rminat ions and

replacements,

a s

well

a s a l l

purchases

of

supplies

and

equipment

a nd t h e d i s -

t r i b u t i o n of sup pli es from sto ck.

m a m

1, Has

never established

a

budget system.

2 ; Purchases a r e made on a competitive b id b a s i s and approved by Managing

Committee.

3 . Board of Directors reviews salaries of employees every 30 days.

4, .

CHICAGO

1 . Operating departments now working under budget plan f o r first year , al though

Agent's department h a s used budget f o r three years.

2 . Substant ial reduction h a s been effected i n operat ing force an d general ex-, 4*>

penses of bank and the establ ishment of the budget i s considered a material

fac tor ,

3 Plan is as fol lows:

7/17/2019 frsbog_mim_v21_0874.pdf


° 7 6

, 3

-

St.4236.

a .

Officers were furnished with forms showing detailed expenses

f o r

' 1922 and 1923 and asked f o r estimates f o r 1924-. Procedure Comnittee

reviewed estimates an d made necessary re vis io ns . Relation ship b e -

tween actual expense

and

budget

i s

shown

i n

monthly expense reports.

ST.

LOCJIS

1, Ho

budget system

i n

e f f e c t

a s

local procedure camiittee

h a s

been unable

t o

r see

wherein

a

benefit would

be

derived from

i t s

adoption.

2, I f

budget system

i s

establ ished,

i t

should

in no way

int erf ere wi th

t he

present policy of the bank regarding economy and efficiency, which has

been very succ.es sful*

MINNEAPOLIS

1. Has never established a budget system f o r t h e control of expenses,

2 .

Suggestion, however, appeals

t o

Governor

an d

such

a

system will

be put

i n

operation

a s

soon

a s

possible .

3 .

Points

o u t

that there

a r e

some departments,

f o r

example, Failed Banks

where

th e

budget system would

not be

applicable,

KANSAS CITY

1. Ho

regular budget system although such

a

system pa rt ia l l y

i n

operation

d u r -

i n g

l a s t

two

years,

2 .

Estimates

of

expenses made

a t

various periods

and if

actual expenses

ex -

ceed estimates,

a n

invest igat ion

i s

made.

3 .

At

present operating costs

a r e

being compared with expenses

f o r

correspond-

i n g period of 1923 said any increase will be immediately investigated.

b .

Believe

i n

budget system

as a

Whole

b u t

could

n o t

toaintain efficient

service

i f

kept within

a

cost

of

operation that

was

estimated during

a

previous period when conditions

may

have been quite d if f er e nt .

m m

1.

Budget

ha s no t

been established because

i t was

thought that

on

account

of the

size

of t he

organization

end the

character

of

work perfo rmed,

th e

expenses

could

b e

controlled

i n

other ways.

2. I f the

Board concludes, after

a

further study, that

th e

plan would work

t o

t h e

advantage

of a

bank

of

th is size

and

perf orming

the

character

of

operations

performed

by us we

would

be

glad

to

give further consideration

to the

matter.

SAN

FRANCISCO

'

1. Has no t adopted a budget system a s a means of controlling expenditures.

2 .

Functional expense reports have been

an

admirable means

of

detecting

any

material variat ion

i n t he

cost

of

conducting

t h e

different operating functions

of the bank. These re po rt s do n o t , however, provide th e essent ia l fac t s f o r

a n • i n t

srj9

i s t r i c t

-

x oqiaris

en .

t>fex penses.

3 .

Greatest help

we

could receive would

be a

visi t from

an

operating represent-

a t i v e ;

of

Board's Committee

to

determine whether

or not the

bank

i s

economically and efficiently conducting i t s various operations.

frsbog_mim_v21_0874.pdf

Documents

Transcript of frsbog_mim_v21_0874.pdf