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Pennsylvania State Archives


The Office of Auditor General was created by an Act of March 17,1809, which was an amendment and consolidation of the original state government act for auditing public accounts, the act that had created the Comptroller General's office in 1782 (see RG 4). The Comptroller General, as well as the Register General (see RG 24) were discontinued by the 1809 statute, replaced by the Auditor General. By its provisions, the Auditor General took all the powers and duties of the Register General and all the books and documents then in the Register's office. Books and documents of the Comptroller General were divided. Those connected to pending unsettled public accounts went to the State Treasurer, except for some treasury warrants the Comptroller General held awaiting their time for delivery to the Treasury where they would be used to initiate the payment process. These unexecuted warrants and all Comptroller General documents and books which were closed business, went to the Auditor General.

Appointment of the Auditor General was made by the Governor for terms of three years, subject to removal when called for by a joint address of the General Assembly. Gubernatorial appointment would continue until 1850.

The 1809 Act set up the basic auditing system, a complicated watchdog or oversight function. The Auditor General was to make settlements of public accounts which then went to the Treasurer, who either approved and returned them to the Auditor, with the accompanying vouchers or, if he disagreed, negotiated his position with the Auditor. If they could not settle the disagreement, the Governor would do so. Once the final account was agreed to, if the Treasury held funds appropriated by law for such purposes the Auditor General drew his own warrant on the State Treasurer and the latter made payment. When no appropriated funds were available, the Auditor General immediately reported the need to the House of Representatives. Exempted from the Auditor General's purview, however, were salaries, annuities, and pensions fixed by law, and any other mandated State obligations that could not be affected by any accounting process or discretionary act of the Auditor General or the Treasurer. But the Treasurer was to render account of these exempted items in his department's account, which he had to submit to the Auditor General.

An Act of 1811 replaced the Act of 1809 and provided more details. The Auditor General was charged with auditing, adjusting, and settling all accounts: 1) of persons or bodies with the Commonwealth, 2) of officers of revenue or others holding public funds, and 3) of claims arising against the Commonwealth. Such audited accounts had to be accepted as legal evidence. In addition to the system of interaction with the Treasurer, the Auditor had to review actual amounts of money held in the Treasury, including deposits in banks. The Treasurer was forbidden to resist returning adjusted accounts that the Auditor had conveyed to him. Furthermore, if the Treasurer's office withheld any papers needed or demanded by the Auditor, the Treasurer could be fined. Accounts not settled promptly were to be explained annually in an Auditor General's report to the legislature. On the fourth Monday of each December, the Treasurer was to report to the General Assembly in detail all receipts and expenditures of the Treasury. The Auditor General on the same day was to submit an annual report in abstract of the state's finances, which was to include the status of the Treasury.

The Act for Regulating Banks of March 21, 1814 set up banking districts and enumerated the number of banks allowed in each. These enumerated banks were required to report abstracts of their strength to the Auditor General each December, from which he was to submit a composite report to the legislature in January. This series of reports, increased in scope at several stages, would continue as a responsibility of the Auditor General until 1891, when a Department of Banking was created.

In 1821 the powers of the escheator general were transferred to the Auditor General.

In 1840 the Auditor General received statutory power to recover moneys due the state and to employ counsel to do it. Beginning in 1842, as a result of legislation, the Auditor General's annual reports of state finance were directed to the Governor rather than the General Assembly.

By statute, in 1850, the Auditor General was made elective for terms of three years, and the last gubernatorial appointee left office in 1851.

1854 the Department was empowered to (1) disallow items in government accounts stated at figures in excess of fair cash prices, and (2) require all incorporated mining and manufacturing companies to submit annual reports showing their fiscal position and enumerated assets. In 1855, powers were further enlarged to requiring the Auditor General to seek legal recovery to the state of any suspected "defeasibly held" (meaning ownership would be void in the event of certain stated conditions) corporate property or any illegally excessive corporate income.

The Constitution of 1874 guaranteed the Auditor General executive department status, and the position was continued as a three-year elected term, although incumbents were henceforth ineligible for consecutive reelection. In 1909 a constitutional amendment increased the term to four years and was so dated as to place the election at the midpoint of each gubernatorial four-year term. The Constitution of 1874 also mandated that the Governor, State Treasurer, and Auditor General approve all contracts for printing and printing supplies, and for fuel, repairs, and furnishings of state government buildings. The Auditor General yielded some power to the newly created Secretary of Internal Affairs (see RG-14): "The Existing powers and duties of the Auditor General in regard to railroads, canals and other transportation companies, except as to their accounts, are hereby transferred to the Secretary of Internal Affairs . . . and, in addition to the annual reports now required to be made, said Secretary may require special reports at any time upon any subject relating to the business of said companies. . . "

In 1814, the Auditor General had begun to make reports on the fiscal status of certain banks (see above). In 1876, this function was strengthened so that all incorporated state banks had to make quarterly exposures to the Auditor General of assets and liabilities, from which the Auditor General prepared the annual report on banks. In 1891, when the Department of Banking was created, the annual reports ceased to be a function of the Auditor General and were assigned to the new agency.

In 1897 the Auditor General was required to prescribe forms for various fiscal affairs of those county offices that received state aid, and to appoint accountants to examine county office finances. Also, the Auditor General was made custodian of all papers evidencing property ownership by institutions owned exclusively by the State.

In 1911, legal powers were expanded by requiring the Auditor General to place liens on the franchise and property of corporations, companies, associations, or limited partnerships, for any unpaid state taxes or debts due from them to the state as shown by settled public accounts.

In 1925 the Auditor General was mandated to prescribe the form of corporation reports for tax purposes, including what methods the corporations must use to state the value their capital stock. With the State Treasurer the Auditor General was to impose the value of the stock .

The creation of the Department of Revenue (see RG 42) in 1927 again meant adjustments to older powers of the Auditor General, which were clarified in the Fiscal Code of 1929. The Department of Revenue was created to settle and collect all taxes, license fees, and other moneys due the Commonwealth previously collected by several other State agencies, including the Auditor General. But in the matter of settling accounts on taxes and bonus funds, an interacting sequence between Revenue and Auditor was established, somewhat resembling the basic system linking Treasury and Auditor. Revenue acted first by making an account settlement and forwarding it to the Auditor. When disagreement could not be avoided, the contrasting statements were sent to the Board of Finance and Revenue for a final decision; the Board was a unit within the Department of Revenue.

Because of the introduction of the Department of Revenue, the Department of the Auditor General became for the first time a true auditing agency. In other words, the combined effect of the 1929 Fiscal and Administrative Codes on the Auditor General was to confirm and somewhat enlarge the powers given that office since its inception. Duties involving approval of various state contracts, acting in conjunction with the Governor and the State Treasurer, were conspicuously set forth in the Fiscal Code.

By amendment to the 1874 Constitution, adopted May 16, 1967, the term of the Auditor General was altered to begin on the third Tuesday following the general election, and an incumbent became eligible for two successive terms. Incumbent State Treasurers were barred, however, from the office of Auditor General until four years after leaving the Treasury position. At the same time, another amendment repealed the system of combined Auditor General, Governor, and State Treasurer joint approval of certain purchase contracts, and added a requirement that the legislature should enact a competitive bidding system for purchases.

The Constitution of 1968 preserved the Auditor General without discussing his or her duties, except in Section 7 of Article 8, which requires the Auditor General to certify figures used to enforce the limit on the state's indebtedness for capital spending.

Notable additions to the Auditor General's duties now include the auditing of the federal funds allocated to programs in Pennsylvania, and the distribution of police, firemen's, and municipal workers' pension funds which are moneys raised by special taxation.

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