Chapter II: ADOPTION OF A BUDGETARY SYSTEM.--A scientific budgetary system

has been adopted. Under the system the estimates are made under the supervision and control of the department heads who have the power to add or cut down items. These different estimates are then submitted to the Secretary of Finance, who coördinates them. Any conflict between a departmental head and the Secretary of Finance is submitted to the Council of State for decision. Once the budget is definitely approved by the Council of State the Governor-General submits it with a message to the Legislature.

The lower house is the first one to take up the budget. The corresponding Department Secretary appears before it to explain the details of the budget for his Department and to answer all questions by the members. Once the budget is approved in principle it is sent to the Committee on Appropriations with instructions to draft the appropriation bill in accordance therewith. When the appropriation bill is approved by the house, it is sent to the Senate and practically the same procedure is followed.

[The Emergency Board]

To make the budgetary system sufficiently elastic to meet changing conditions, there has been created the so-called Emergency Board composed of the Secretary of Finance as Chairman, two members of the Legislature, the Insular Auditor and the Attorney-General as members. In the general Appropriation Act, this board is given a substantial amount with which to supply the additional funds that the various units of the government may need for the purpose authorized by the appropriation law. As an additional safe-guard, the actions of the Emergency Board do not become operative until after approval by the Governor-General and the presidents of both houses.