The Commission, early in its deliberations, recognized that one of the most vital areas of concern in its work and in the efficient and effective operation of the Commonwealth's government is the budget process.

Since April, the Commission, through its Subcommittee on Budget and Management Systems and its staff, has devoted extensive effort to the study of the Commonwealth's current budget process as well as those in other states. In pursuing these efforts, great care has been taken to involve other interested parties including the Secretary of Administration (functioning as the Governor's representative), the Director, Deputy Director, and staff of the Division of the Budget, the staff of the Joint Legislative Audit and Review Commission, and the staff of the House Appropriations Committee. The Commission recognizes that many parties have a valid and legitimate interest in the budget process and that the active and positive participation of all is necessary to make any system work to its full potential.

The Commission devoted its entire session on September 6 and 7 to a consideration of the budget process. At that time, a panel of state officials including Maurice B. Rowe, John R. McCutcheon, Edwin J. Crockin, H. Douglas Hamner, Marvin M. Sutherland, and William B. Rowland discussed the current budgetary process and efforts underway within the executive branch to improve the process. In addition, a panel of participants from outside the state government, including Dr. Frederick C. Mosher of the University of Virginia, S. Kenneth Howard (State Budget Officer of North Carolina), Wayne F. McGown (Deputy Secretary of Administration of Wisconsin), Glen E. Pommerening (Assistant Attorney General for Administration of the U.S. Department. of Justice), and James D. Burris (retired federal and State of Idaho budget official) discussed the development of the budget process in other states.

Again on November 15, the Commission devoted its entire program to a consideration of the report of its Budget and Management Systems Subcommittee concerning the budget process. The Commission at that meeting adopted the following report which it recommends to the General Assembly, to the Governor, and to the people of Virginia. The report is summarized as follows:

1. The concept of the strong executive budget is reaffirmed.

2. The recently developed capacity of the General Assembly for independent budgetary review and legislative oversight should be maintained and strengthened.

3. The relationship between the legislative and executive branches should be more precisely understood.

4. The management relationships between the Secretary of Administration, the other Secretaries, and agency heads should be more precisely defined.

5. There should be greater participation by the Secretaries and agency heads in the executive budget formulation and presentation process.

6. The budget should be formulated, presented, and appropriated on a programmatic basis.

7. Targets should be established early in the budget formulation process that are realistic in terms of projected fund availabilities.

8. The budget calendar should be revised both as it relates to the executive budget process and the legislative appropriation process.

9. The operation of the Governor's Budget Advisory Board should be redirected to focus its attention on major program considerations.

10. The system of financial and management control should be modernized to develop policies and methodologies which will permit delegation of substantial authorities to agency managers while maintaining essential controls at the central management level.

11. A means needs to be devised to more effectively involve the Governor-elect in the budget formulation process following his election but prior to his entrance into office.

12. The biennial budget should be continued.

13. Additional staff should be provided to strengthen the state's management capacity.