The Modern Board: 1920-1960 83

administration of State affairs. We accordingly recommend that no change be made in the
organizations or functions of the Board of Public Works, except that we think the State
Auditor, the Bank Commissioner and the Insurance Commissioner should... be appointed
by the Governor instead of by the board.¹⁴

The governor, who had maintained close contact with the Reorganization Com-
mission, accepted its recommendations and caused a bill to implement them to be
introduced into the 1922 session of the legislature. The bill, with some amendments,
was enacted, marking the first modern reorganization of the executive branch of the
state government. Rather than doing away with the board as recommended by Grif-
fenhagen, the act not only retained it but actually increased its responsibilities in a
number of significant ways. Through the act, the General Assembly reorganized the
executive branch into nineteen units, one of which was the Finance Department. The
Finance Department, in turn, was divided into three divisions. The Board of Public
Works, as an entity, was to "constitute the third Division of the Finance Department,
and shall have and exercise the rights, powers, duties, obligations and functions now
or hereafter conferred by law."¹⁵

Although the placement of the board—a constitutional body—as a subsidiary unit
of a statutory agency is of some interest from a purely management or organizational
perspective,¹⁶ that placement, per se, was not particularly significant from a functional
point of view. Much more important were the duties imposed on the board by part 16
of the act creating the Department of State Employment and Registration, which
encompassed the various licensing boards and commissions. The legislature gave the
board virtually total budgetary and management control over every one of these con-
stituent boards and commissions.

Section 3 of part 16 of the act required each of these agencies annually to submit
to the board an itemized estimate of its expected income and expenses for the ensuing
year. It then provided that the board should "approve all or such portion of said es-
timated expenses and disbursements as it deems proper, and each of said boards and
agencies shall make no expenditures except for purposes so approved by the Board of
Public Works, which shall in each case determine the time for such annual estimates
to be submitted." Section 4 required the agencies to account to the board for their
expenditures. At the time there was no separate budget agency, as there is today; the
board performed that critical function for these agencies.

Section 4 of part 16 authorized the board to determine where the regulatory agen-
cies were to be physically located. They were, as noted, to be part of the Department
of State Employment and Registration, which combined the functions now performed
by the Department of Personnel and the Department of Licensing and Regulation and
was headed by the state employment commissioner. Section 5 permitted the board to
determine whether the agencies should operate from the commissioner's office or from
their own separate quarters. If the former, the board was empowered to cancel the
leases for their current office space and see to their relocation.

The exercise of these control functions—budget and location—would naturally
affect the personnel requirements of the agencies, and that too, was recognized by the
legislature. Thus, section 6 of part 16 provided that "the position of any secretary or

14. Ibid., p. 43.

15. Acts of 1922, ch. 29, pt. 2, sec. 5.

16. Also of interest, organizationally, is the fact that the act created a separate Department of Public Works,
but the Board of Public Works had little or nothing to do with it. The department was headed by, and
seemed to consist entirely of, the State Roads Commission, which the act created. The Finance Department
was headed by the comptroller and the treasurer and comprised the Treasury Department created by the
constitution. The first division was the Division of Financial Review and Control, which consisted essentially
of the state auditor and his deputies, appointed by the governor. The second division was the Division of
Deposit and Disbursement, which consisted of the bank commissioner, the Insurance Department, the State
Tax Commission, and the Central Purchasing Bureau. It was headed by the treasurer. Following the rec-
ommendation of the Reorganization Commission, the act removed the appointment of the bank, insurance,
and tax commissioners from the board and placed them with the governor.