Comptroller General's Annual Report 1970

Published by the Government Accountability Office on 1971-01-21.

Below is a raw (and likely hideous) rendition of the original report. (PDF)


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     r,   ..I ry.                   COMPTROLLER GENERAL. OF THE UMTED STATES                   -
                                               WASHINGYON . D .G . 20948

                                                                           January 21, 197 1

                    Dear   Sirs :

                           In accordance with section 312(a) of the Budge t

                      and Accounting Act of 1921, I respectfully submit th e

                      annual report on the activities of the United State s

                      General Accounting Office during the fiscal year ende d

                      June 30 ? 1970,

                                                           Comptroller Genera l
                                                           of the United State s

                      The President of the Senat e

                      The SpeakAr of the House of Representatives
  The General Accounting Office is under the con-
trol and direction of the Comptroller General of th e
United States . There is also an Assistant Comptrolle r
General of the United States who performs such dutie s
as may be assigned to him by the Comptroller Genera l
and who acts as Comptroller General during the ab-
sence or incapacity of the Comptroller General, o r
during a vacancy in that office . The Comptroller Gen-
eral and the Assistant Comptroller General are ap-
pointed by the President with the advice and consen t
of the Senate.

Comptrollers General of the United State s
John R . McCar l
  July 1, 1921—June 30, 1936
Fred H. Brown
  April 11, 1939—June 19, 1940
Lindsay C . Marre n
  November 1, 1940—April 30, 195 4
Joseph Campbel l
  December 14, 1954—July 31, 1965
Elmer B . Staats
  March 8, 1966

Assistant Comptrollers General of the United States
Lurtin R . Ginn
  July 1, 1921—November 11, 193 0
Richard N . Elliott
  March 9, 1931—Apri130, 1943
Frank L . Yates
  May 1, 1943—June 29, 195 3
Frank H . Weitze l
  October 12, 1953—January 17, 196 9
Robert F . Kelle r
  October 3, 1969--

     CONTENT                                                                                        -   -

               CHAPTER ONE---Highlights of Activities for the Year .                            t

                  Assistance to Congress	                                                      2
                  New Assistant Comptroller General and General Counsel 	                      2
                  Uniform cost accounting standards 	                                          3
                  Scope of GAO's audit work . . . .                          .	                3
                  Financial management improvement 	                                           3
                  Internal audit	                         -               .	                   4
                  Legal services	                                                              4
                  Transportation	                                                              4
                  Claims settlement and debt collection .                                      4
                  Expenses and staffing . . . .                        .	                      4
                  Training and carer : development - 	                                         4
                  Change in format of Annual Report                    -                       S

               CHAPTER TWO—Assistance to the Congress 	                                         7

                  Summary of assistance provided	                                              7
                       Reports with classified material 	                                      7
                       Unauthorized release of draft reports	                                  7
                       Relating GAO work to the needs of the Congress	                         8
                       GAO liaison with the Congress, committees, and Members 	                9
                  Reports to the Congress	                                                     9
                  Reports to committees	                                                      11
                  Reports on pending legislation 	                                            13
                  Reports to individual Members of Congress 	                                 14
                  Staff assistance to committees	                                             15
                  Assistance in legal and Iegislative matters	                                16
                  Testimony at hearings                        . .            .	              17
                  Assistance on House and Senate financial and administrative operations 	    21
                  Recommendations for legislation . . .                            .	         21
                       Recommendations to the Congress during fiscal year 1970 	              21
                       Actions taken by the Congress on recommendations made in prio r
                             years . .                    .	                                  27
                       Restatement of prior year recommendations	                             28
                       Legislative proposals to heads of departments or agencies 	            32

               CHAPTER FIRER--Assistance in Improving Agency Managemen t
                     Practices	                                                               35
                  Summary of assistance provided	                                             35
                  Congressional interest in financial management	                             35


              CHAPTER THRE€—Assistance in Improving Agency Management
                 Assistance in improving financial management 	                            36
                      Prescribing accounting principles and standards	                     36
                     Accounting recommendations of the President's Commission o n
                          Bridget Concepts	                                                36
                      Cooperative work in the development of accounting systems . . . .    37
                      Review and approval of accounting principles and standards an d
                           proposed systems designs	                                       38
                     Joint Financial Management Improvement Program	                       39
                      Survey- of planning, progranuning, and budgeting systems 	           10
                 Intergovernmental programs and operations	                                40
                 Automatic data processing 	                                               41
                 Reviews of financial management systems 	                                 42
                      Reviews of accounting systems in operation	                          42
                      Andit and settlement of accountable officers' accounts 	             43
                      Review of agency internal auditing . . .                    .	       43

              CHAPTER FOUR—Audit of Civil      Operations and Programs .                   45
                 General	                                                                  45
                 Department of Agriculture	                                                45
                 Department of the Army--Corps of Engineers (Civil Functions)	             47
                 Department of Commerce	                                                   49
                 Department of Health, Education, and Welfare	                             50
                 Department of Housing and Urban Development 	                             52
                 Department of the Interior	                                               53
                 Department of justice	                                                    56
                 Department of Labor	                                                      56
                 Post Office Department	                                                   57
                 Department of Transportation	                                             58
                 Treasury Department	                                                      60
                 Atomic Energy Commission 	                                                61
                 Civil Service Commission 	                                                62
                 District of Columbia Government	                                          63
                 General Services Administration	                                          63
                 National Aeronautics and Space Administration	                            64
                 National Science Foundation 	                                             66
                 Office of Economic Opportunity 	                                          67         -
                 Small Business Administration	                                            67
                 Veterans Administration	                                                  67
                 Other civil departments and agencies 	                                    68
                 Multi-Civil-agency reviews .      . .              .	                     69
                 Legislative andjudicial branches	                                         70
                 Organizations outside the Federal Government 	                            70



         CHAPTER FIVE-Audit of Defense Operations and Program s                     73
            Nature of audit work performed 	                                        73
            Approach to audit	                                                      73
                General	                                                            73
                 Acquisition of major weapon systems 	                              73
                 Procurement	                                                       74
            Audit reports issued	                                                   74
            Significant findings and recommendations	                               74
                 Status of acquisition of major weapon systems	                     75
                 Management of procurement programs, special studies 	              75
                 blanagem;ent of procurement programs, negotiation of contrac t
                 Management of procurement programr, other aspects 	
                 Research and development	
                 Supply management	
                 Facilities and construction	
                 Maintenance and modifications of military aircraft 	
                 Administration of military and "civilian pay and allowances 	
                 Manpower utilization ,	
                Combat readiness of military units and related supply suppor t
                 Administration of communications	
                 Administration of transportation matters	
                 Administration ofcertain other programs 	

         CHAPTER _SIX—Audit of International Operations and Programs .              87

            Nature of work performed 	
            Reviews of U .S . activities relating to Vietnam and Southeast Asia	
            Broader based reviews of program results 	
                 Countrywide reviews of U .S . foreign assistance	
                 Interagency and trade programs	
                 Other broad scope reviews	
            U.S, participation in international organizations	
            Agency for International Development 	
            Defense international activities	
            Department of State and related activities	
            Export-Import Bank          . . .              .	

         CHAPTER SEVEN—Transportation 	                                             99
            Audit of transportation_payments and settlement of claims . . . .       99
                     'Transportation payments . .         . .         . . . . .     99
                     Claims	                                                       10 0
                                                reviews-	                          10 1
             1 :,i, : a u•a ilk the !uCal licd	
                                             i                                     102
            lssistanre in the traffic and transportation field 	                   102


                CHAPTER EIGHT—Claims 	                                                        lo5
                    General	                                                                 10 5
                    Claims against the United States	                                        10 5
                    Claims by the United States	                                             10 6
                    Agency review ana assistance 	                                           10 7

                CHAPTER NINE—Legal Services	                                                  109
                    Administration	                                                          10 9
                    Civilian personnel 	                                                     11 0
                    Contracts	                                                               11 0
                    Military pay and allowances 	                                            11 3
                    Appropriations and miscellaneous	                                        11 3
                    Transportation	                                                          11 4
                    Legal reference services	                                                11 5

                CHAPTER TEN—Personnel Administration 	                                        11 9

                    General	                                                                 11 9
                    Recruiting, training, and staff development	                             11 9
                        Rccruiting—Professional staff	                                       120
                        Recruiting—Technical staff 	                                         120
                        Recruiting—Support staff	                                            12 0
                        Staff development	                                                   12 2
                        Profesa:wial development and recognitic 	                            12 5
                    Personnel operations	                                                    125

                                                    EXHIBIT S
                IxMbit K—Legidation Enacted During Fiscal Year 150 Relating to the
                    Work of the General Accounting Office	                                   12 9
                Exhibit 2—Number of Audit Reports Issued During the Fiscal Year 1970         13 4
                Exhibit 3—Transportation Audit and Collections, Fiscal Years 1961—70         135
                Exhibit 4—Transportation Claims Settled During Fiscal Years 1961—70          13 5
                Exhibit 5—Stateinent of Assets, Liabilities, and Investment, June 30, 1970   13 6
                Exhibit 6—Summary of Changes in Investment of U .S . Government, Fiscal
                    Year Ended June 30, 1970	                                                13 7
                Exhibit 7—Summary of Operating Expenses for the Fiscal Year Ende d
                   June 30, 1970	                                                            13 8
                Exhibit 8—Summary of Sources and Application of Funds, Fiscal Year Ended
                    June 30, 1970	                                                           13 9
                Exhibit 9—Functions of the U .S . General Accounting Office 	                140


                                                                                                                        CONTEN, S
                                                                                                              p a"'!
     Exhibit 10—Organization Chart	                                                                            14 1

     Exhibit II—'Map of the U .S . General Accottntin ; Ofliee Regions                         .   .   .       I la 2

     Exhibit 12—Directoty of the U .S . General Accounting Office 	                                            1113

     INDEX	                                                                                                    145

     PHOTOGRAPHY CREDITS                -
            The GAO Watchdog, pp . x, 6, 34 ; Departtntttt of Agriculture, pp . 44 and 46 : Bob Fletcher,
     1). X11 ; Public Health Service, 1) . 44 ; Tom Ray Taggart .. Tampa, Fla ., p . -1"1 ; Wagner Int er nationa l
     Photos, Tue ., N .Y., p . 44 ; Army Corps of Engineers, p . -18 ; University of Washington Primat e
     Research Center, 11. 51 ; Atomic Energy Commission, p . 61 : U .S . Navy, p . 78 : U .S . Arnry, p . 81 ;
     U .S . Air Force, p . 81 ; U .S . Marine Corps, p . 81 Umtcd Nations, p. 86 : Agency for Inter -
     national Development, p. 89 .

     NOTE :
                                           uptroller C°neral 's Annual Report contains more detailed
                                           te=General Acconntittg Olfcnt . Includ^d are 1) a compila-
                                           for improving Government operations, i 2 financial saving s
                                             a list of auc.it reports issued, and 14) a list of approval s
     of agency accounting principles and systems designs.

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                       ELMER B . STARTS, nlE COMPTROLLER GENERAL .
                                                                                    HIGHLIGHTS       OF ACTIVITIE S

                                                               These retort; include GAO eondusir,ns and recom-
                                                             mendations for waxs to achieve greats efficiency, a s
                                                             well as econonw, ill the management of Federal pro -
                                                             grans in order to obtain more effective results fo r
                                                             the taxpayers who support them . Thcre follovN ,. synop-
                                                             ses of some typical reports .

                                                             In the. Arta of Co,mmer F,otcctiou and health ,
                                                             GAO :
                                                                   Examined the enforcement of sani—ry and relate d
                                                               conditions at federally inspected meat plants by th e
                                                               Consumer and Marketing Service 4Department o f
                                                               Agriculture ` and at plants not federally inspecte d
CHAPTER ON E                                                   but receiving Federal grading service . Amon othe r
                                                               management weakne-ses, this audit showed a lac k
                                                               of unifnrmity in enforcement primarily because of
                                                               the absence of dear and firm criteria for actions t o
                                                               be taken when unsanitary conditions are found, as
                                                               was the case in . 14 of the plants visited by GAO .
HIGHLIGHTS OF ACTIVITIE S                                       iSee appendix . Section I, Item Ti .  '1

FOR THE YEA R                                                      reviewed claims by the State of California fo r
                                                               514 .2 million in Pederal funds under the Medicai d
                                                               program for providin g skilled nursing care to per -
                                                               sons in institutions for the mentally retarded . GA O
  Darin« fiscal year 1970 . the U .S . General Accoum-
                                                               concluded that a substantial portion of the State' s
in^ Office increased its assistance to the Congress i n
                                                               claims were questionable because they appeared t o
two essential ways for the central purpose of improvin g
                                                                have been made on the basis of the persons` presenc e
the management of Federal programs and operations .
                                                                 , institutions certified by the State as skilled nursing
                                                                it .

    GAO provided assistance to con:ressioual con . -            homes rather than on determinations of the person s
  mittees to the extent that nearh one-fifth of its pro-        ne:cds for skilled nursing care (See Appendix, &- -
  fessional staff of approximately 3,000 supported th e         6on I . Item 25 . )
  needs of tite Congress in meeting its constitutiona l            Showed . by a broad ; in-depth review, that Fed-
  responsibilities of leislative oversight .                    eral food inspection activities frequently ar e
    GAO increased, on its own initiative, the numbe r           performed by more than one organization at the
  of reviews designed to evaluate the effectiveness o f         same commercial establishment, often on the sam e
  Pederal programs in achieving the objectives in -             food product . The report, noting that over 14,500
  tended by the Congress .                                      people were invoked in Pederal food inspectio n
   As a result of its audits and reviews in the depart-         activities costing over 5185 million annually, recom-
ments, agencies, commissions, and corporations of tile,         mended that more effective and economical inspec-
Federal Government in Washington, throughout th e               tion methods be devised, including maximu m
United States, and in many parts of the World, GA O             standardization requirements . (See Appendix, See-
issued 1,168 reports in fiscal year 1970 .                      tion I . Item 24 . ?
     203 public reports were sent by GAO on its ow n
        initiative to the Congress--a 15-percent in -         Oil PwbIcnis Int olving National Resources and th e
        crease over fiscal year 1969 :                        Ew-ironmcnt . GAO :
     321 were made for congressional committees, of -             Advised the Congress that benefits of the progra m
        ficers of the Congress. or individual Members           for preventing watt pollution administered by th e
        at their request—a 57-percent increase : and ,          Federal ';late- Quality _'administration (Depart-
     644 reports on less significant matters were ad -          ment of the Interior? have not been as great as the y
        dressed to officials of departments and agencies .      could have been . GAO's review shoaled that many

 waste treatment facilities have been constructed on         In    Area,                        ctiritie,, GA0 :
                                                                             of Itit, ?national =-I

 wa.tcrwa% into which large polluters continue t o                   Reported on impio .enients needed for mote ef-
 discharge untreated or ;nadeciiiateh tceatcd waste .             fectiye nrura,enunt by the 1_7nited States of its par-
 ! See Appendix . Section I, Item 6-1                             ticipation in int"luational organizations- Ihe Unite d
    Found that most oil and ,as leases of federa l                Nations Childif, n's Fund . the Food and Agricultur e
 lands were awarded noncompetitiyeh by the Burea u                Onsaniiatioi-anal the United Nations Decciopmen t
 of Land -Iana,ement llnteriorj . .As a result of it s            program . 'Sce .Appendix, Suction I, Items 77, 79 ,
 audit, ( ;AO recommended that the Congress amen d                and 78 .
 the ]Mineral Leasing :Act to require the use of cotn-               Questioned the payment of taxes by the Unite d
 pctitire bidding to a%%ard oil and ,as leases on al l            Str,ccs to fnreigo Lcovcrumerts . Audits disclosed that
 Federal lands . 'Sec :Appendix, Section I_ Item 35 .             tax costs had been incurred by the United States i n
     Undertook a series of management-type audits fo r            Vietnam -$28 n;illion : v,.,iland 5-I million : an d
 the Joint Connnitte- on :Atomic Enet,_y with respec t            \\est f ;ennin--•S2 .2 million : and in other coun-
 to (1 ; issues relating to the possible establishment o f        tries . GAO ur<,.ed a strer~gthenin_, of U .S . man-
 a Government uranium enrichment enterprise . 9-                  agentent in dealing Frith foiei ,-q t tax exec np6o n
 develop tile it t of the jams reactor complex for No -           problems . !Sce :Appendix . Section I . Item 8L `
  logical research by the :Argonne National Laboi ator y             TSSUed six reports =five classified`, on "counts}'
  'see appendix, Section L Items 62 and 122, and .                                                      .S . economic assist --reviwsofaltypU
    3 = proposals by the Atomic Enerm- Commission                 ance in single counnies . These included Laos .
  conceinin<g plutonium sales policies and pricing .               Tunisia . Guatemala . Ni,eria . Ethiopia, and Thai -
On Mattel ; of National Defense, G .40 :                           land . f See Chapter Six . page 89 .
    Audited the development of three specific weap-
 ons ss°stems : NIKE-X antiballistic missile (no% c
                                                             Assistance to Congres s
 called SAFEGUARD ; . the Sheridan an(] N160
 tanks . anti the deep submergence rescue vehicle . A s          As indicated . t ; :AO's efforts to sere ; the needs of th e
 a result, GAO questioned (I) the adequacc of th e
                                                             Congress i im-ased this year, as represented by its 52 4
 Governments control over the prime contractor s
                                                             reports to the Congress as a whole, its con ;snittees, an d
  technical and administrative management o f
 NIKE-N, (2) the reasonableness of producin<_ ap-            Me :nbers. Of equal importance there various othe r
  pieciable quantities of Sheridan and M60 tanks de -        services provided by G :W . such as drafting le<islation .
  spite known deficiencies in essential components ,         making special studies, supplying information, and as-
  and 13 the need for additional deep submergenc e           si,_~ ning stall to tcork kith the committees . These serv-
  rescue vehicles . (See _Appendix, Section L Items 116 ,    ice, are discussed in detail in Chapter TNyo.
  117 . and 118 . )                                             burin-, fiscal year 1970 :
     \fade a special stud of t%yo proposed method s                GAO rcpesentati\es testified on $5 occasions be -
  for increasing competition in syeapons systems pro-           fore con-_, ressional ronnnittees.
  curement—"parallel undocumented development '                    (,_AO staff members yyere assigned to the staffs o f
  and "directed technical licensin, '—and expresse d            22 committees or subcommittees . This represent s
  its opinion to the Congress that the first metho d            approximately 5 .000 man-days of GAO staff time .
  could be used advantageous] \ in the procutrmen t
                                                                    438 reports were furnished to committee chair-
  process . !See _Appendix, Section I, Item 93 . 1
                                                                ni" , c it pending hills-- 2 81 to the Senate . and 15 7
     Reviewed the status of 57 selected major weapons
                                                                 to the House .
  systems and reported to Congress that ! 1' ther e
  :vas considerable cost _,rowth d)evond programme d
  estimates 's on many of the ssstenis and that this wa s     New Assistant Comptroller Genera l
  continuine, (2) current estimates of the capabilitie s      and General Counse l
  of many of the systems varied significall0v from or ig -
  inal estimates, and ,3i slippatres on schedules fo r          Robert E Keller. long tune career official of th e
  delivery from 6 months to more than 3 years coul d          Oeneral .Accounting Office, was nominated by th e
  be expected . + See Appendix, Section I, Item 115 .1        President and confirmed by the Senate as :Assistant

                                                                                                    HIGWLIGHTS OF ACTIVITIE S
     Comptroller Gee ral . -Mr. Keller took the oath of offic e
     on October 3 . 1969 .
        Paul G . Dcmbline. former (lene .al Counsel an d                       -_--- -      ------ -- --------------------
     I )cputc :\sso late :\chttinistiatoi of the National :Aero-        D~•G•nee	                    . . .. 	.               . .      61 7
                                                                        1mor  a!ional_                                                2Sk ;
     nautics and Space :Administration, was appointe d                  Go'rrnutcnt-tcidr--and n :ultiac*•.'ucc	             .- -       is
     General Counsel of the General Accounting, Office t o
     succead Mr . Keller .                                                       rotat	                                             1,83 7

                                                                        Financial Management Improvemen t
     Uniform Cost Accounting Standard s
                                                                           Reyietys of accountin~ systet~ :, in operation are per-
         The General ,Accountitr, Office completed this yea r           folllwd as ;)art       l'- t a :~ ( :_AO audit actiy ;ties an d
     its steel\- ' •to determine the feasibility of applying uni-       GAO cooperated (yith a envies in the (I eyclopnucnt an d
     form -ost accountin-, standards to he used ill all nego-           appruyal o1 their accountin,systa'rns.
     tiated prime contract and subcontract defens e                        GAO approved the designs of n ;ne complete ac-
     procurements of $100.000 or more ` and made its re-                count]n,- ;tens and four parts nr seraments Of systetu s
      pe,rt to ill(- Cou,ress January 19 .                              submitted I.,(. Civil and international departments and
         GAO found that it is feasible to establish and appl y          ageucics, and 12 statements of accot:ntin'-, principle s
     cost accounting standards to provide a greater de,re e             and s1andards (lacing the P 1 10 fi r ai o ar_ .At yearer:•c L
     of uniformity and consistence in cost accounting as a              20 designs of complete systems . nine ;ruts or seTntent_,
     hasis for negotiating; and administering procuremen t              of sstenis . and 13 statements of principles and stand-
     contracts and concluded that cumulative benefits fromn             ards subtitled for ippiotal be civil and ioleurttiol,a l
     the establishment of cost accounting standards shoul d             departments and a2enries t,erc heir« rcyiet,eci b y
     outyeinh the cost of implementation .                              ( =AO .
         Bill under all the wide variety of circuu7stzuce s                Of H°l c i vil and international department a :ul
      involved in Goycrnmcut contracting- GAO found tha t               agency accounun n_ s,;teuis subject to approval . tite
     it is not feasible to establish and apply cost accounting,         cotrlplctc accounting systems dcSi(,T tIS of 1 organiza-
     standards in such detail as would be necessar\-to insure           tiolial entities hall been approved as of Tune 30 .
     a uniform application of precisely pie cribed method s                GAO approved ttya complete systems desi g ns, th e
     of computing costs for each of the different kinds o f             _Air Force and Nary accounting systems for militar y
     cost .                                                             construction . In addition . GAO approved three in-
         Hearings on cost accountim, standards, at which th e           dtt,trial fund accouutin(~ system?s seanent dc,I,71S for
     Comptroller General testified, tyere conducted by bot h            the .-Air Force Printing and Duplicating SffViCc ; til e
      the Subcommittee on Production and Stabilization .                Army ACateryliet :Arsenal . tyhich is apical of simila r
      Senate Committee on Banking and CurrenCy, o n                     tpcs of :Army industrial funds ; and the Naval Ord-
      \&arch 3 f and the House Committee on Bankin'-, an d              nanrc Svycnt Conmtan(1 . G:AO also approved I t direc-
      Currency on little 19 in connection w i th legislation es-        tives all(! instructions in implementation of accountin g
      tendiwi the Defense Production .-Act of 19511 . As a re-          systems submitted by the Department of Defense .
     sult of the itearinis, a new section ryas added to th e               In \larch GAO reported to the Congress that a
     Defense Production :Act of 1950 providitt, for th e                numher of problems in the implementation of the ac-
     establishment of a Cost :Accountin ,,~ standards Board .           countin, s\ .-stem for operations ill the Department o f
     'I'he uety section was inclu(led in PubhC Law `11 -3 ;9 ,          Ucfelsc had hecn identified and specific recommenda-
     approved on :August 13 . 19 7 0 . ! For further details see        tions 4ccre made to tic• Secretary of Defense fo r
      page 11 . j                                                       correction . The reyiet, of the syseem ryas made in com-
                                                                        pliance (yitlr the direction of the Conference Repor t
                                                                        of July 1 . 1968, of the House and Senate Committee s
     Scope of GAO's Audit Wor k
                                                                        on :Appropriations +H . Rcpt . 1608, 90th Con,.' .
         ( :AO conducted 1 .837 audits and reyietys in du e                Amon-, other accomplisiments - the Joint Financia l
     United States arld in -13 other countrie, during fisca l           \4ana,ement Improvement Prottram—comprised o f
     year 19 ;11 . The results of many of these , g ill be reflecte d    re-presentatilcs fro ;u the Bureau of the Budget, th e
     ill reports to be published during, the nest fiscal year .         Civil Se Nice Commission . the Uencral Accounting Of-

Tice, and the Department of the 'FreasmAy—complete d           %'cars . %,crc settled for about S2 ; :i .00O, about 5332 .00 0
the follomng projcct~ and began implementing result-           Icss than r lambed .
ing recommendations during the }car :                             Carriers filed 1 :31 suits co%cring 16=,328 shipnun m
    Brim}' of procedures for centcalizin,1 Within th e         One hundred and thirteen of these suits and abou t
  Federal Goycrmacnt the billing and pa~unent of               165- - o1 of the shipments co%ered oycrseas movemen t
  transportation cltar ,_,es incurred by Federal agencies.     of household eoods by the Illepartment of Defense . Th e
     Survey of financial administt-ation of federa l           amount stied fill is not stated in the petitions . ffo%%e%en
  grants-in-aid to State and local gm ernnherus .              two court (letisions ha%e been rendered in connectio n
                                                               with certain issues common to the -120 household good s
                                                               suits filed to date- Using these decisions and other is -
In ernal Audi t                                                sues raised in tile case tiNO estimates potential liabili-
                                                               ties to the Government of nearly 5100 million if th e
   GAO continued to stress the importance of interna l
                                                               courts should rule adyersel for the Goyennnent on th e
audit activities in the executi%e departments an d
                                                               undecided issues .
agencies . This year reports were submitted to the Cor r
greys on the effectiveness of internal audit activities i n
the follo%%ingr departments and agencies : the Depart-         Maims Settlement an d
ment of State, the Department of the 'Freasury, the            Debt Collectio n
Veterans Administration . and the Department of
Defense .                                                         General claims against try United States in fisca l
   Pour additional reports out internal audit activitie s      %car 1970 im olaed Government contracts, compensa-
  eresubmitted to a<,ency officials .                          tion to civilian personnel . and allowances to mili-
                                                               tary personnel, retired pay . iia el . t anspo-tation an d
                                                               per diem matters, and miscellaneous clains of Gov-
Legal Service s
                                                               ernment personnel and other public creditors . Genera l
   Decisions prepare.' for issuance by the Comptrolle r        claims against and b% the United States settled by GA O
General and other leg.nl matters handled by the Ie ,a l        ;%cry as follow' .
staff totaled 5,2 .6 . This includes 703 rcporu submitte d        GAO settled 14 .9-13 claims against the United State s
to committees and Members of Congress and 63 re -              for $55 .9 million and collected 13 .201 claims he th e
ports to the Director of the Bureau of the Bud,et .            United States tonnlirn, 52.6 trillion .
                                                                  At the end of the %car_. 8 .182 clairn< tinder collec-
                                                               tion represented accounts receivable in the amount o f
Transportatio n                                                ahottt S4 .8 million . GAO reported 1 .27 .1 claims to th e
    During fiscal year 1970 . GAO, in meetim its respon-       Department of justice for collection by snit. As of
                                                               June 30 there were 5 .266 claims under collection b y
sibility for determining the correctness of chan,c s
clainned for freight and passenger transportation setz-        that Department, representing approxintatcic $1 .6 mil-
ices furnished the United States, audited $2 .4 billio n       lion in accounts receivable .
in transportation charges, consisting of $1 .5 bilfion pai d
for 59 million freight shipments and V) billion fo r           Expenses and Staffin g
3 .1 million passenger unoyennents .
    A total (if 108,499 claims of overcharges by th e             GAO operatincr expenses for fiscal year 197 0
 United States against carriers %sere settled by GM )          amounted to S71 . 7, million . :Approximately 82 percen t
 n the amount of 317 .7million .                               of this amount 558 .8 million—ryas rcquiicd to pa y
    Claims against the United States by carriers numhcr-       salaries and other personnel costs . ' File staff at June 3 0
in,,~ 13,' 25 %.ere settled by GAO in the amount of 313 . 1    totaled +.632, it net in.crcaw of 88 over 1969 . Of this
million .                                                      number, 2,906 %cerc professional staff .
    GAO also furnished assistance to the Department o f
Justice in 33 legal actions invoking claims against th e       `training and Career Developmen t
United States involv ing transportation charges for ap-
proximatcly $701,000 co%erinn 1,817 shipments.                   Oyer 1,4011 members of (GAO's staff were provide d
T%yenty-one suits, the subject of reports in this or prior     with special training, this %car through GAO internal
                                                                                   HIGHLIGHTS       OF ACTIVITIE S

facilities . Over 1,000 staff members participated i n      showin g' by functional areas the opportunities for im-
training or career development programs conducte d          prmud operations identified by G .Ao in carrying ou t
in other agency or non-Government facilities . Sixtj        its audit respoivibilitics .
staff members passed the CPA examination given b y             This %car . fm the first time, a ropy of the cotmpila-
State boards during, the gear . :A total of 486 member s    tiosl report relating to fiscal %car 1 Jh9 was distribute d
now hold the CPA certificate : 83 others r;ho have          to all \ietnbels upon its issuance to the GOnllCSS (II .
passed the required examination will receive thei r         Doc . 91-250, Feb . 26 . 1 1170 . Because man Member,
certificates upon completion of their experienc e           commented on the usefulness to them of this compre-
requirement .                                               hensive upe of report it was decided to make i t
                                                            available as a separate appendix to the Comptrolle r
                                                            General's :Annum Report . Also included in the appen-
("hange in Format o f                                       dix volume are the following lists : financial savings
Annual Report                                               attributable to the work of the General :Accountin g

  For several }'ears a special report has been issued t o   Office . audit reports issued during the year . and ap-
the Congress presentin, a compilation of General Ac -       provals of agency accounting principles and standard s
counting Officc findings and rcc ommendations for im-       and systcros designs . Most of the other appendices o f
proving Government operations for the fiscal sea r          last \-cal l s annual report are included in this volume a s
concerned . The report- provided a convenient smntnar)      exhibits . ;See table of contents .
                                                                                    ASSISTANCE TO THE CONGRES S

                                                                   of direct assistance to the Coneress in the fiscal vca r
                                                                   1971 to about 600 nian-rears .
                                                                      Reports trade on GAO's ci,yn initiative constitin e
                                                                   ont, of the primarc means of assistin, the Com_ress .
                                                                   The report information is intended to Ciye the (_:oil-
                                                                   gres, as i,cll as atrcnc}^ heads . an objectiyc appraisa l
                                                                   of operations .. patticttlarlr those nliich nta9 require
                                                                   cam,, sessional as lycll as czceutisi branch atu•iltion .
                                                                    i he i(tport, .uc also designed to assist tilt, .Apprt,ptia-
                                                                   tions Commiiittce :, in conmdh iim_ aflcmc-r bud_rt W-
                                                                   qucsis . as tseli as other couuuittcca in pctforimin+e thci t
                                                                   oyersi -'ht responsibilitirs.

CHAPTER TWO                                                        Reports With Classified Materia l
                                                                      To minimize cont!ressional problems of liandlin i
                                                                   classified information . eyt,ry cirort is made to avoid
                                                                   includiitv information in the reports to the Conktrss
                                                                   that is dr,i_natcd ao clascificcl material by the dcparo-
ASSiSTANCE TO TH E                                                 mcnt   of   tteu, y , ,It, crilecl . In tho, car ;yht,tc it is
                                                                   inrpossiblc to sati- r y rry,orting rc .<.ponsibilitics ,rithtut t
CONGRES S                                                          discussilu i assificd material . GAO atictnpts to issue" a u

                                                                    unclassified report and a separate supplement contain-
                                                                   isi=~ thr c lassificct inlonnat on . 'i he chairman of th e
Summary of Assistance Provide d                                     Senate I Orck,_n R±huions ( :ontmittcr 1(1yised ( ;AO o f
                                                                    his aIiI,i( %aI cif these efforts to rcl( tsc as nnrcli in -
    Tile Congress estahlishcd the General .Acrowuin e
                                                                    Torm ;ttion as tia –sib'c and rc(IIIt tI ( ;AO to influence
office in the leo:islatisc branch to serve as an inde-
                                                                    the t w q,ciesa10 opaitnicnt,to ;Iiou agmateratiate -
pendent . niutpuli- tical, tnd r liable source of assistant,( .
                                                                    o, . if Iht, pul'ilir's iii-dit to knoiy. ( : .AO brought thi s
in carrying out its coilstiottional poUer over the pub -
                                                                    request to tilt , attention of iht, Srcrctuies of till , Dc-
lit' pot W . TllV dnty of the GCnctal Acroiuttini' Offic e
                                                                    partim-nt, of State ~tnd Dcfcn,c and each offered hi s
to ftunish assistance to thr Cron ies : . its coininittces .
                                                                    cuoprrauott in GAO e!lot t to im 1,eaw the av ilai,ifit r
and '\Ieiii6ers is one of the n5oct important responsi-
                                                                    to the public (if Ieport~ throeL~li niininiirin'-, classihc d
bilities of the Office and receives tho toiistant atten-
                                                                    materials and through ,cparatc repotting Of securit y
 tion of its top officials.                                         infoririatioii .
    'Pile year was marked by a continuing increase i n
 ;- efforts to wive tile needs of the Congress . Abou t
 20 peicent ;(if the professional' and suppnrtnw, stal l            Unauthorized Release of Draft Reports
 msouicis were applied to l£ru~idin, direct assistanc e                To help insure that reports Submitted to the Con-
 to the Congress— draftn legislation . making studies .             gress . counnittecs, and Members are accurate . com-
                info miatiou, and stall' munthcis irorking o n      plete, and based on the most current information avail -
 asshnnh' nt i,ith comiilittees .                                   able on the fact, and issues imohrd, (,AO's practic e
     G .\O anticipates that . with Govenmient program s             is to suhniit draft reports for comment to the agencie s
 incr( isit :-T in cost and conipkrzity . till- concern of tit(,    concerned . to contractors . and to other parties directl y
 continittces and Members will intcnsify and rcquir c               affected . These drafts carry a notice that the report i s
 niau} more niin-seats of ( ; :\O professional staff as-            subject to revision and that the contents should not b e
 sistcince to in c t si, nilicant priorities of congressiona l      used for purposes other than official reyicir and con y
 requests Iwincipally in defense . education, inanfotyer,           nient . Despite e(Toi is of this Office to present prema-
 pollution control : Health, irrcouic s(rcuriLV . transports-       ture disclosure of draft report infoiniation, it ha s
 lion, housiii.v. and other urban pro+rratus . To niec t            occurred on it fri g occasions . The chairman of the
 this need, t;1O has pioiecteti all increase in its level           house Goyeinnient Operations Committee expressed


concern (pp. 3540 and 35.11, Congressional Record ,             oral pro-,anus where technological assessment is a n
Apr . 23, 1970 ) about premature disclosure of informa-         important consideration . As program objectives be-
tion from GAO's proposed reports . GAO therefore                come store concerned with and provide recognition o f
strengthened ttie re * rioted use notice on the cover of        the impact of technological application, the Office wil l
its report drafts by using= larger type, printing it in a       plan rev=iews to include more disclosures which sho w
different color ink, and by specifically calling attentio n     the impact of technology . This approach was ex-
 to this notification in transmitting copies of the draf t      plained to the Subcomtnittee on Science, Research an d
reports .                                                       Development, House Committee on Science an d
                                                                Astronautics, during its exploratory hearings on th e
                                                                need for the Congress to have a technological assess-
Relating GAO Work to the          Needs
                                                                ment capability and again during its consideration o f
of the Congress                                                 H .R . 11046, a bill to establish an Office of Technolog y
    In fulfilling the obligation of furnishing effective        Assessment, which provides for the Comptroller Gen-
 congressional assistance it is essential that GAO relat e      eral to be a member of the Technology Assessmen t
 its work closely to the interest and heeds of the Con-         Board .
 gress, particularly oil matters currently under con-              To meet the growin g need of the Congress to obtai n
 sideration . An illust ration of the effort to do this i s     information concernim .g the benefits and costs of Fed-
 the prograin initiated early in the. year for reviewin g       eral programs GAO continued its efforts to develop a
 and furnishing a-special report to the Congress on th e        systems analysis capability . The systems analysis grou p
 acquisition of selected major weapons systems . Thi s          in the Office of Policy and Special Studies provide s
 was undertaken because of the concern of several com-          consulting advice and assistance in this area to congres-
 mittees . subconunitees, and individual A-fembers wit h        sional committees, Members of Congress, and Federa l
 the large acquisition costs associated with the C-5 A          agency officials, as required .
 aircraft and other expensive defense mapons . See                 Examples of assistance to the Congress in this are a
 page 75 for details. GAO plans to continue to monito r         during the year included :
 and furnish reports to the Congress early in each ses-              Participation in work for the chairman of th e
 sion on the Department of Defense's acquisition o f              Senate Armed Ser v ices Committee to review air-to-
'major weapons systems and to extend this type of re -            ground urissile. systems and consider whether cost (
 view andreport to the civil agencies . The House Armed           benefit studies justified the chosen missiles .
 Services Committee in reporting on the military pro-                Participation in the examination into the effec-
 curetnent authorisation hill for 1971 (I-I . Rept . 91 -         tiveness of the construction grant program for abat-
  1022 on-II .R . 17123 . Military Procurement Authoriza-         ing, controlling, and preventing water pollution, de -
 tion for 1971, dated Apr . 24, 1970) favorabl y
                                                                  scribed in Chapter Four .
 commented on the potential usefulness of the selecte d
                                                                     Participation in work at the request of the chair -
 acquisition reports as an aid to the committee " while
                                                                  man of the House Committee on Ways and Mean s
 development and procurement are in progress ."
                                                                  to monitor a special review of the orogrant unde r
    A great deal of thought has been given to the lon g
 term future of GAO and how it can be of greater As-              which aid is provided to famit:e-s with dependen t
 sist-ace to the Congress . _l number of steps have bee n         children in New York City.
 taken in the past 4 years to gear operations to bette r             Participation in work on a request from Member s
 serve the Congress . However, snore effort will be re-           of Congress which required calculations related t o
 quired, particularly in the area of evaluations of on -          comparisons of the net Government costs under tw o
                                                                  Department of Housing and Urban Developmen t
 going programs and of legislative propo,ais .
                                                                  programs for college housing : one, a direct loan pro -
    As the Congress deals with neav challenges such a s
 those -associated with pollution ; supersonic transport ,        gram, and the other, an interest subsidy program .
 medical acl'ances, and nuclear energy, it Will require           GAO has had an actuarial staff since October 1
 it tircater de_giee of technological assessment capability .   1969, to provide assistance to the committees and ,
 "Pte Ccncrxl Vc ounting' Office believes that in th e          Members of the Congress on the many legislative pro-
 se%eiitics it can and should play an increasingly im-          posals involving insurance and amenities . Assistance
 p,ntuu role in thesurveillance and nonitoringof Fed -          provided during theyear included the following :


                                                                                              ASSISTANCE TO THE CONGRES S

                   Stud} of the actuarial and insurance subject ;             Because of the importance of the functions of the liai-
               covered in legislative bills introduced in Congress .          son office, it was transferred during the \ear to th e
               `-yrice januat~- 1- 19 ;0-sutdics vere made on rlre fol-       Office of the Comptroller General "here it is unde r
               lowim, subjects: national catastrophic illness insur-          the direct supervision of the Assistant Comptrolle r
               ance- Railroad Retirement System, federal insm-                General . The Ie'~Iislative attorne\s of the liaison offic e
               anm guaranty program . group life insurance fo r               maintain continuous contact With Members and th e
               members of the armed forces . and Federal rel-mia-             staffs of the ecnnorittees to discuss matters of mutua l
               tion of private pension plans .                                concern and to coordinate;:AO's  (      Nyork so that it ca n
                    Assistance to the House Bankin g and Currenc y            most effcctiyely fulfill tl :e varied requests of the <ont-
               C:onlmittee concernin g a procedure to obtain inyest-          tnittces . I'l,e Otficc of Legislatk e Liaison is also th e
                utent capital from private pension and fotutdatior r          central pohtt o ; contact through Which Jlemficrs an d
               Irians for the home nurct,_rage market . The actuate s         their staffs may channel their requests utcl inquirie s
                prepared illustrative mort ,alc atuortitation and a( , -      so that ( ;AO's responses may be made Nvith the utaxi-
               etnnulation tables for the use of the committee .              nnun effectiveness.
                    Re\ iow of H .R . 1573`) wilt the staff of the Senat e       `I he "GAO Newsletter" is disuibuted ntonthh to al l
                Committee nn Labor and Public Welfare . The bil l             Members of the Congress as a convenient means o f
                pros ided for an increase• in pensions under the Rail-        keepim, theta currently infornrd Of the highlights o f
                road Retuement Scstem and for a Presidential com-             ;AO's reporting . lual, and oilier activities .
               mission to stuck- the futmr financing, of the bene-               (i :AO received and filed in special sealed envelope s
                fits provided by this system . Following this rcaiew, i t     the confidential financial statentc•nts of Senators an d
                provision was added to the bill by the Senate rcquit -          -• rain officers and employees of the Senate as re-
                ing tile, enrploynrent b}' the commission of an actual %      quital by Senate Rule 1-1 and furnished it report re-
                "ho is qualified in the evaluation of pension plan s           lating to the reccipt of the statemcnis to the Senat e
                and who is a member of the American .Actdenty o f             Sclrct Colnmittu'c on Standards and Conduct- in ac-
                 Actuaries . The bill a°ith the additional provision "a s      cordance \\ith the Rtrlc -
                signed into law au,,ust 12, 1970 .                               The assistan, c which t ;AO staff render, to th e
                    Preparation of it 10-year cost projection of th e          Congress is fm-nished through several c :tteg,ones o f
                 U .S . Aline Corkers of :America Welfare and ltctire-        services ;vhich are disntssed in more detail under th e
                 rnent Fund for the Senate Subcommittee on Labo r              follrnyin" headings in this chapte r
                of the Senate Committee on Labor and Publi c                        Reports to tile Coligies s
                 Welfare .                                                          Reports to committees
                 To provide ( ;AO ' s management officials with more                Reports on pending le(6slatio n
              meaningful, comprehensive, and timely informatio n                    Reports to individual Membt is of the Congres s
              for use in the decisionnr+kinLi~ invo lv ed in the planning .         atall' assistance to connmittees
              execution, and evaluation of its accounting, auditing ,               Assistance ill legal and leg islatii e matters
              and other activities, the Office has under dcyelopntcn t               Testimony at hearim_, s
              a Cott..puter-based integrated management informatio n                As stance nn House and Senate financial -,An d
              system "Phis s5 stem will enable GAO to achieve mot e                    adnrinistative operations
              effective and efficient opet :ations and Qurcby improve               Itecornmcndations for le',islatio n
              its assistance to the Congress . In February of this vea r
              GAO established a Data Processing Center to provid e
              the eomputer services that are rcquh'ed to effectuat e          Ro oYis to the Congress
              the system .
                                                                                 -1 ;,v. responsibility of the General Accounting Offic e
                                                                              for reportimt to thr ( :on : ;rise information obtained a s
              GAO Liaison With the Congress ,
                                                                              It result of its audit cad investigat i on work is 'lead .
              Committees, and Member s
                                                                              indicated in the Budget and Accounting Act of 192 1
                GAO's Office of I,egislati%e Liaison is it cent ral co-       and is emphasised in tie related legisiatiye historV .
              ord :aation point for a(hievin!g, the objoctivr of provid-      For this reason, it major tin :rst of the efforts of th e
              ing the Con g ress with prompt and ell-ective assistance .      Oflicr is to fulfill this fundanutal obligation h%

    sue:..-                                                                                                                                   s_ 3

furnishinw to the Cnurress report> on our lindila" .                 Report on the readiness of selected reserve com-
conclusions . and recommcndatiotu covering the snid e              ponents of the _1rrm revealed serious deficiencies in
carivty of Governnu•nt dcfrrlsc and ci, it activities i n          the units organization, u'ai inw, equipment, an d
U'ashin0on . the field . and nrersea, . Special emphasi s          management which vrould present their meeting
k placed on reporting the results of assessments of pro -          mobilization requirements . ]See Appendix, Sectio n
grams in which there ]vas heen a'uonn congressiona l               1 . Rem 172 . , On the other hand . a report on the
interest in detcrminirn, ,chether then have achieved               combat readiness of the Strategic Air Comman d
the purpows intended he the Con,~ry , . Examples of                si ;rntecl a hi gh state of readiness clue apparently t o
such reports issued to the Conetcss during the rea r               well-developed management techniques and close r
are :                                                              ,turcillance . Sec .\ppendix Section I . Item 171 .',
                                                                        Report on clue>tionable pasmcnt of taxes to othe r
     Evaluation of the Aass ' s managcurnt of its Dee p
                                                                    =orcrnments mt        .S- defense actiritics otcrscas in -
  Submergence Rescue \'chicle { DSRV program .
                                                                    formed Coit,_,ress that . cnnuai . to firm U .S . polic y
  schich had significmu cost overrun, and delays i n
                                                                   and foreign agrecu ;ents, U .S . activ i ties sNere payir,l~
  development, revealed an evaluation was needed o f
                                                                    to varinus foreii-, n wva;uuents clirectl or iuditectl r
  the cost eflectireucss of four snore deep submergenc e
  rescue vehicles before purchase . See :AppendiN . SCC -          large sums annuaih in property taxes, local or munic-
  tion I, Item 118 . '                                             ipal taxes- business and wade taxes . excise taxes_. and
                                                                   import taxes . See .Appendix . Section L Item 81 .
     Survey of the SIhE–X Antiballistic Missile De-
  velopment program listed t series of imp -m entent s              \Iam- of GAO's reports to the Congress arc utilized
  needed in the adequacy of the Gmurnmeut's con-                 hs the tonunittecs for ~wdv . action, or further utscs-
  trol over the contractors technical and administra-            tiLation in performin, their orctsi!ght responsihilitic " .
  tive management of the weapon system develop-                  Gomuiitwe_ interest in the stork of the Office ttuds to
   ment of the program . .' See _Appcndiz- Section I .           ,urngtheu the ellcct of this work because the depart-
   Item 116 . 1                                                  ments and agencies are astare of the pocsibilitr tha t
      Report on the cost reduction program in the De-            conuniact , con id(nadon mass flow from the informa-
   partment of Defense, the Department of the Irt-               tion disclosed in G .AO reports . An illustration of com-
   terior, and several other depattmcnts and agencie s           mittee action, prompted br one of the reports to th e
     recommended nmmerous imptcrements in all as-                Cor,_ress is the report wl.casecl this sear by the Hous e
     pects of the project !Sce Appendix . Section I . Ite m      Committee on ( ;umnntcnt Operations ' 1I . rcpt . 91 –
     229 . 1                                                     63% . 91st Co n g ., Anus . 1_i . 196`1 % nn (lehcicncie, in th e
        Report on steak enforcement of Federal sanita-
                                                                 administration of lire Federal Insecticide . Futt_ieicie .
     tion standards at mwat plaits by the Constmter at' d
                                                                 and I:odcntiride :Act This studs hi the committec' s
     Marketing Sets ice and an earlier report ors Federa l
                                                                 Inte=."ocernmmntal Relations Suhcouunittee, which in-
     inspection at poultrs° plants pointed -ut %+cak en-
                                                                 cluded hearit ;,s an(] special assistance from GAO stafh-
     forcement of sanitation and other consumer protec-
                                                                 oe<,an after receivinC a G :AO report ~ I3-13319`_' .
     tion standards . -See Appendix . Section I, Itc ;us 2 3
     and 22 . 1                                                  Sept . 10 . 1968 ` to the Coni_,re,~ concernin, the need t o
        Reporton thcsreaknesses in the constructirnr *ran t      ii;tprose rcTulatnr7 enforcem .rrt procedures iraolvin g
     program for ahatin> , cnntrolhitur. and prc%cntirn,         pe_,tic ides . It disclosed serious deficicncic, in the opera -
     water pollution was issued because of the substan-          tion ; of the Pesticides Regulation Dirisimt of th e
     tial expenditure of Federal funds and broad con -           Department of _Aericuhurrs _Acrirultural Researc h
     _ressional interest in the seater pollution pro_"ram .      Service .
      'See Appendix . Section I . Item 64 .'1                       In addition to the sport ; issued to the Con,ress Oi l
       Report on the administration of ,ugar marketin ,          G :W's osnt initiative, the Congress, frequcntl• direct s
     quotas established by the Sus= ar :Act of 19 . 18 hoste d   the Contptrollet G " ncral to snake special studies o n
     hose a chamze in the deficit allocation provisio n          subiccts that all, of particular current interest to th e
     could substantially benefit domestic sugar producer s       cotnrritteo, and \Iemhers . Thus. G\O initiated a com-
     and reduce dollar oinflos,so as to improve the U .S .       prehensire studs prescribed hs section -108 of Publi c
     balance-of-parnteuts position . 'See Appendix . Sec-        l .aa 91--121 of the p edts
                                                                                           i trade 1) v contractors an d
     tion I, Item 1 .'                                           _uhcontractors oft ne_odated defense contacts . Th e

                                                                                 ASSISTANCE TO THE CONGRES S

results of this review will be r. p onied to tile Cou011 Us ,     ~yith cost acCOUnting standards and any apPrOye d
ear]% in lc)71 .                                                   practices set forth in it disclosure at , .ecnent or fil l
    The General Accountin g Office ompletcd a stud %              required to utaintain the data troni v%hill h suc h
"to determine the feasibility of appl'irg uniform cos t           information could be readil% t ;ro%idcd .
acmttntiu ; standards to be used in all ne,~rniated pritu e        Ifearings ou cost accounti r , ~! ;tandards for tic<_~oti -
contract and subcontract defense pron_rcnents o f               awd cortracts were conducted by both the Sub -
5100 .000 Or retort . " ' -he said\ was glade as a result o f   committee on Production and Stabilization . Senau-
the Passage of Public La,% ` i 0–370 of jul, 1, 1968,           Corunittee on Banking and Ctnienc% . and the hous e
directing the Gonrptrollcr ( ;v,wral. in coopc ;uion kit h      Committee on Banking and Gurrenc%, in connectio n
the Secretary of Defense and the Dirt-tor, Bureau o f           with legislation exendin« the Defense Procuction Ar t
the Budt, et . to call-\- out the work .                        of 1950, The Coniptioilc General testined before tile .
    On Januarn 19 . 1970, the results of the stud% wer e        Senate su 'rwornmittee nn '%larch 31 . 19 ;0, and befor e
reported, as the lai% dirccicd, to the Committees c,r,          the Ifousc a?nunittce On June 1` 1 - 1970 . As it resuh o f
Banking and Curn-ncy ant! _Aruled Siri ;ces of the Sen-         the heariuls, it new section was added to the Defens e
aw and the I louse of Represcntitti%es- See Appendi c           ProChictiOn Act of 1150 prO%iciitig for the establish-
Section I, Itcui 39a . 'I-hc report is a %cry sit nifica m      ment of a Cost Accountin, Standards Board . The net t
contribution to the literature 01 accountiric: principle s      WCoOn v .'a, included in Public Lacy Sul-$79, approve d
and tandards as they- relate to private indu<_try co" ,
                                                                On August 15 . 1970 .
accounting practices and tile utilization Of cost data i n
the ncL!otiation and administration of contracts fo r
Government procurenient of L~oods and services, It s
principal conclusions and reccunnendatiou are a S               Reports to Committee s
folloNyS :                                                         The Comptroller General is required ba the Bud e t
     It is feasible to establish and apply cost acCOUnt-        and Accountim Act, 1921_, to make such ineestioatinu s
  ing standards to provide a greater cle~ , rec of uni-         curd reports as are ordered by either 11011-e of Coll(,r tess
  formity and consistent% in cost ;xcountim, as a ba,is         or by committee, hayirw_ jurisdiction over revenues .
  for ucgotiatin'-, and aclninistecim, procuremen t             appropriations . or expenditures . Requestu by all com-
  contracts .                                                   ulittees for special audits, sur%e%s . and investigation s
    l ncic' all the wide variety of circumstances in -          are, as it matter of pohc% . accepted and given priorit y
  %ol%ccl in Gmernnierrt conu'actin ;~ . it is not feasibl e
                                                                attention .
  to establish and apply cost accounting standards i n
                                                                   Last %ear GAO furnished 109 special reports o n
  such detail as t%OUId be neresar% to insure a unilott o
                                                                audits, iu%estiftations, and reviews in compliance wit h
  application of precisely prescribecl methods of com-
  puting costs for each of the di0erent kinds of cost .         the requests of committee and subcommittee chair -
    Cost accouutina standards should not be limite d            men . The ;object of the reports included comple x
  to Defense cost-type contracts . Thc% should appl }           defense procurenr°nts and activities, sensitive inter-
  to llcootiated prOCUtruient contracts and subcon-             national Government operations, and program activi-
 tracts, bolt Bost-type and fixed price . The%shoul d           ties in the civil departments and agencies .
 be made applicable Government-wide .                                 close working relationship was maintained wit h
    Cumtdatiyc benefits front the establishment o f             the committees and stad-s through briefing sessions o n
 cost accounting standards should Outweieh the cost             GAO audit, accounting, and investigation reviews, an d
 of implement t :ou .                                           b% exchangin information on natters of mutual in-
    N'ew rnachhierp should be established for the de -          terest . GAO frecluenth adjusted work schedules to
 %elOpf"Cl t of cost accounting standards. The objec-           expedite completion of reports for use of the Commit -
 tive should be to adopt at an early date the standard s        tees upon learning that the subject matter of audit s
 of dsclosure and consistency and to strive for th e            and rcyievys which it had initiated was also on it cout-
 elimination of unnecessary sltern .ui%e cost ac(ount-          niittce ' s current m ersight or legislatiyc agenda . Brief-
 ing practices .                                                ing session, this year with the staff of the Hous e
    GontraCtors should be required rO maintain rec-             Appropriations Cotrrmittee continued to he one of the
 ords of contact performance costs in eonforruity               most elTectiyc method, Of ptiwidilu* the results o f



    G,A0 work for use by the committee in perfornio u                  mittce . oil the niarrigement of nonappropriated fund s
    its important bucl'jct W ic%% responsibilitics .                   in tine Department of Defense, as specified in the eom-
        GAO furnished tl,c House Appropriations Con i                  nuttec s report orl the Military Construction Appro-
    mitwe the 16th annual report ou si_nificant audi t                 priation .Act, 1970, 11 . Rept . 91-635, 91st Congress ,
    fin<Gus developed (1311 ing GAO's audits and other ex-             This report trill lie mailable to the committee for use
    aminations in the defense and civil agcncics of th e               early in the hearings oil the 15172 defense budget .
    Government. This report is designed to he helpful t o                    At the nrquest of the chairman of the Subcommittee
    IIousc Appropriations Committee member, it) dis-                   on District of Columbia . Senate .Appropriations Coni-
    cussim-, th, operations of the deparnnent all(! agcm y             mittce . GAO provided consiclerable information fo r
    %%ith respnnsihie officials dttrinf; the budget hearin g s .       use in the hearing, om the District of Columbia's 197 1
    °The extent that ( ;AO t%oik is used b% the :\ppropria-            budget request, inc lucimr a report on a compar ison o f
    tions Couurittec is urdieated ht the number of refer-              cost -ind expenditures for certain District of Columbi a
    ences to the C '.rAO dm in w, the appropriation hearings           (-%ernlment activities ~,ith similar activities in othe r
    of till, First Session of the 9lst Congress . 'There wer e         cities . AWith respect to GAO assistance the Senate Ap-
    i ; I grnend references and 153 Comptroller ( ;euera l             propriations Committee stated in its report on th e
    reports and decisions mentioned during the heariw,!S                1977 fiscal tear appropriation for the District of Co-
    of theconunittec• .                                                lunnhia f S . Reps 91-937, 91st Corr, . that this Offic e
        In vier of the substantial increase in the last fet e          teas - '])lost helpful and the Committee has relied i n
    yeas of tine costs to operate the military medical pro -           many instances on the extensive reach and specialize d
     ~nam_ the chairnlaiof the IIousc :Appropiiations Corll-            kno%cledLre of its personnel . "
    mitwe recfuw•tcd that a conynclletui%c review an d                       \ special report teas furnished to tile `3Ub(`0IIlIHittC C
    report be 11 lad, i . . ,Ile program called the Civilia n          on Departments of Labor, I ILW. and Related atmii-
     Iloalth and Mcdic,d p s i tin of the I nifonned Serv-             cies. Senate _Appmptiaron~ Gnnunittee . on a surre y
     ices CTIANtPCS . An intr :fin ieport t% .a issued fo r            of the pro«nss toward constructing a new teachin g
     the conunitteC, use dt ;rim, isle hcarin_s on the 197 1            hospital on the ITo%%arc•. Uni%crsity campus, which % va s
    defense hudget oil tine cost inlorntation which GA O                delayed lw v,uious factors including major changes i n
     assennbl.ed, The final report until finclillu" . conclusion .      buildin« dt"ir;ns and substantial escalation of estimate d
     and recommendations will be issued after further %cork             construction costs .
      s completed .                                                         Tile Senate Fnreiim Rclatioir Committee called o n
        The chairman of The House _Appropriation, Com-
                                                                          ;_AO for several reports relatim , to the sensitive field o f
     mittee also asked G :AO to continualh reyict% the De-
                                                                          €'rein operations_ For example, the Office undertook ,
     partment of Defense' ,, de%ciopinent, installation . an d
                                                                        at the chairnlanis request, a foltowup revicu of th e
    operation of automatic data processiii svStella an d
                                                                        stuck ( ;M) corupleted in eariv 1968 of activities i n
     make periodic reports of the results of these re%ie%%_ .
     'The results id one rc%ic%r %%are set fortis 'Il l a repor  t      Brains and ( :f!il(' Under contracts i,etwecn tile NeCIIC)'
     on the Arun g s ( :ombat Service SUpporf S% Stem t C`;) '- .       for International De ;elopn?ent and the American In-
     a mobile automatic data processing and communica-                  stitute for Five Calmer Development ATFLD %chic k
     tion system . C,_AO identified apparent problems c 11 -            is .m instrumcut for implementin,, U,S . labor polic y
      :crning tLc .estcm ' s ability to Opciate in cont 'oai _          and proerails ill Latin :\merica . Also in response t o
      Because of the si'llificant amount of lilon(% '.])yoke d          an im,!liry !)v the ehairmau, G_AO es .m1111M the ree-
     GM) recommended that the problems should lie ic-                   ords of th leparunent of State and the Departmen t
     solced hrfore e ;tendim-, the sv.Stcnn annc-uncle . Othe r         of Defense concerning the use of U .S . fill)(!, in con-
     :Asa p reports issued during_ the ve :u . pursuant to th e         nection %%ith the donation of medical supplies !i% th e
     Cha!rinan s re(luest, neluded a re%!c%% of the Aria\ * ,           Government I I londums, to the Government of th e

      Tactical Fire Direction, System 'F-AC : IR p. . I cont-            Republic i Wiegman ; . After the chainnau informed ,
      puter s%-stem %%Melt %%ill automat" artiller% functions ,          ,he Sec :etart of State that he intended to ])lake publi ,
      and a ! cyie%r (if the :Air Fon v ' s :uh-inc k,,i tic c ten t    tills report the Department nVrlumvsd tile chissifie d
       ;AC S                                                            ,taus of the inforrniation ( ;AO lurnished that th e
         GAO also undertook a comp!. hcn i%e rr%ne;%, :u til l.          t' .S, ar Fora' 1)aid .ill Opel tmh c:;pcn,es of th
      reoucst of the chairman . House :\ppropiiations Gone                                                             .ivrnztnente)Iarc%lft-onuheIimar an( t
     12                                                                                                                                                         F
                                                                                                            ASSISTANCE TO THE CONGRES S

painted Honduran :fir Fntce colors—used to trans -                                        posed by AEC u, ;r°vise uv tin-. oper n, , policic an d
port the supplies from Ilondui-as to Vietnam ,                                            practices.
    In addition . the Subcommittee on Felted Stat e
Security A,,reements and Crnmniunents Abroad re -
quested assistance of GAO staff in its studA of >c'~ore f                                 Reports on Pending Legislatio n
overseas military projects and was fur!tislted seeera i
special reports . One of the latter included a reyiei of                                       71 -he knosw ledge eained bw the professional staff of th e
the payments made to the Government of the Republi                                        General Accountin g_ Office in rc :ieswjm and obse n
                                                          ,ofthePilpnsbyI`tdSaeiupor f    the prn«rmus . Operations . a1'1 fiscal activities at C, _
the Philippine Civil :Action Group ± PI f IECAG i n                                       site of nu,st Government a_encics enables the office to
Vietnam . Because of the time-consuming_ SC Welli u'_1                                    furnish independent a(16, and infotnnation on pio-
exercised by the Departments of State and I)efensc i n                                    poscd le_rislation that would not otherwise be availabl e
making records available for examination, GAO vwa s                                       to the c,mrmittees . Durin_i the %ear GAO responded t o
required to report to the chairman that its s+ork wa s                                    438 requests by committee chairmen tot commmnts o n
seriously hampered and delayed by the reluctance o f                                      hills . GAO also furnished 63 reports to the Btrrean o f
the Department of t)efense and the Department o f                                         the Bud,,et at its request on numerous proposed mill,
sate to giyc access to the documents . paper. . ;mul                                      and cnrollccl enacunents . The advanta m of furnishuln
records which were -nsideird pertinent to (iA0' s                                        siews on hills to the I'mmoittees and to the Bureau o f
 m iew .                                                                                  the Budget is that many technical problems telat .n «
   At the request of the cl,aitman of the ]-louse Iri-                                    to fiscal and administrative provisions in proposed leg-
terior Committee ( ;A0 made a re ,: iew and furnished                                     islation can be settled prior to bein, finally considere d
two reports on the Goyum.nent
                            -     ' s hel i um pro ram fo r                               b ., the Comvress .
use to conjunction kith its lwarintis m that subject .                                         Sonic, bills on which GAO seas asked to report con-
GAO found that significant cli .ui! res had occurred sinc e                               tained prosisions directh , allectin,_ its operations . ]]all y
the helium prom . I-, was authorized iii 1960, par-                                       were enacted with the modifications %vi ich GAO sue-
ticularly that the program will not Ill' rlf-liquiclatin '                                L"ted to improve m clarify the terns or provisions o f
over a 25- to :35-year period is required by the Heliu m                                  the legislation . For example, in connection with hear-
Act and that substantial\ more helium will be stored                                      ings before a subcotu nittee of the Committee on th e
than was contemplated .                                                                   Judiciary . House of Representatives . oft H .R, 7363 .
   The close working relationship between the Genera l                                    olsr Congress .. which provided broad authority fo r
Accountini, Office and the Joint Committee on Atomi c                                    wais°er of claims of the United States arisinU out o f
Ellen--v continued durui~~ the year. In respni ;se to re -                               oeerpasnicnts of pay and allowances to inembers o f
quests by the coumiittec, the Office issued seven re -                                    the Armed forces and the lational Guard - C;AO su, -
                                                                                         -ested several substantial modifications to inuuov c
ports on activities of the Atomic Ellenv Colmnission
(AECcovet iqc~ such topics as :                                                           the waiver procedures and to protect the interests of th e
                                                                                         Gos ermnent . These sue « etions were adopted in th e
     Dcvelopnicnt <,f s,arheads for die SAI 1: ( ;UAR D                                  draftille of it substitute bill, ILR . 13582, which passe d
  antiballistic missile system .
                                                                                          the House February 16 . 1970 The vraivet :s are require d
     Oesclopmc)u of the Janus reactor complex fo r
                                                                                         to be made in accordance with standards prescribed by
  biological rescatch by the .Argnnnc Naluma l
                                                                                         the Comptroller General .
   I=aboratory .
                                                                                              Other legislation al£ecting the work of the Genera l
     Proposals bw AEC conecrnim, a possible recisio n
                                                                                         Accounting Office enacted cluing the 41st Congress fo r
  in AEC: :,upply policies for fuel grade plutoniu m                                     fiscal year I 1J70 is listed heI inuirn, oil page 129 .
  sales to the IAropean Atotric Fnergc Conunurrt s                                             In the case of many other bills, although not directl y
  and to Japan and a possible rccim tion in th e                                         affecting GAO Operat i ons, the Office was able to fur-
  I'm c for such plutonium .
                                                                                         nish ~ucaninvful comments incb.tdin« recommendation s
     Issue; relatin, to ill(' possible establishincut of a
                                                                                         for technical changes and other sug estions for clarifv-
  Cior-ernlnent uratiiuni enrichment enterprise .
                                                                                         in the provisions of bills to achicwe economy or effi-
  Sevcrai of C=AO reports swore used by tiic Join t                                      ciencw or otherwise to protect the interest ; of th e
Committee in its consideration of various actions prv-                                   Government .



     For instance, in a report to the chairman, Hous e             House
    Government Operations Committee, GAO recarn-                       Armed Services 	                                        3
    mended against favorable consideration of the bill ,               Education and Labor	                                    I
    H .R. 12115, 91st Congress, which would amend th e                 Government Operations	                                52
    Federal Property and Administrative Services Act o f               Interstate and Foreign Commerce .                     18
    1949, 40 U .S .C . 481, to require Government procure-            . Judiciary	                                           51
    ment of transportation and public utility services i n             Merchant Marine and Fisheries_	                       1 I
    accordance with all applicable Federal and State law s             Post Office and Civil Service	                  _     12
    and regulations governing carriers and public utilities .          Public: Works	                                          1
    GAO advised that the measure would create man e                    Science and Astronautics_	                              G
    administrative problems for Federal procurement offi-              Veterans Affairs	                                       2
    cers and that its economic benefit to the States woul d
                                                                                                                            15 7
    be slight . Another principal reason for GAO's reserva-
    tion to the bill was that it seemed to unnecessarily allo w           Total	                                            43 8
    Federal procurement activities to be subject to Stat e
    regulatory rules and regulations .
       In reporting to the chairman, House Interstate an d         Re p orts to Individual Member s
    Foreign Commerce Committee, . on the bill H .R . 13352 .       of congress
    91st Cong ress, which is addressed to the problem o f
    deteriorating rail passenger equipment and to the pres-          Responding to requests of individual Members o f
    et1•ation of intercity rail passenger serf ice, CIAO Su,-      tho Congress is an important part of the work of th e
    . ted -hat it be clarified in several respects cleaiin g       General Accounting Office . GAO believes that if a
    with depreciation, leased facilities, and the servicin s       Member is concerned about a Government operation
    and maintenance of railroad-owned passenger equip-             or action, the Office has an obligation to try to assis t
    ment . GAO also pointed out the need for an access-to-         him if possible . GAO encourages Members to first at -
    records clause in subcontracts made in connection wit h        tempt to obtain the information or action desired fro m
    prime contracts entered into other than under com-             the a«envy, but if this approach does not hear satis-
    petitive bidding procedures in order to permit necessar y      factorN results GAO will proceed to appropriately re-
    audits by this Office and the Secretary of Transporta-          icw the matter and furnish the Member a report .
    tion . Also strongl urged was clarification concernim ,        Frequently after consultint, the Member GAO is abl e
    the authority of the Secretary of Transportation to dis-       to reduce the aulouut of ~ .3ik involved and still satisf y
    regard «enetal statutes _, overnin,, the procedturs to b e     his reeds, thereby making it possible for GAO staff t o
    followed by executive agencies in the award of Govern-          respond to more congressional requests than would
    ment contracts rB-107449' .                                     otherwise he possible . During the year the Office fur-
                                                                   nished ! 0 7 audit and investigation reports to individua l
       Followin g is a table showing th- munber of report s
                                                                    Members covering the activities of nearly all of the de-
    on bills furnished to the committees :
                                                                   partments and agencies .
    Senate                                                             Illustrative of this type of work are two reports fur-
                                                              f    nished to Senator lfike Mansfield resultin from meet -
        Armed Services	
        Banking and Currency                                 5     'nas that were initialle held to discuss his interest i n
        Commerce	                                          14 .1   methods of providing controls over research finance d
                        _                                     I     by the Department of Defense . To clarify issues th e
        Foreign Relations .                                    1    General Accountim., Office arranged and attended join t
        Government Operations .                             31     meetin -T s between; the Senator's staff and officials of th e
        Interior and Insular Affairs .                         I    Bureau of the BudQut, the Office of Science and Tech-
        Judiciary . . .                                       4     nology, and the Science Policy Division of the Librur Y
        Labor and Public Welfare -                          47      of Con<=revs . The Senator proposed and obtained. en-
        Post Office and Civil `+crvicc                      10      acunent of an amendment ,similar to one proposed b y
        Public Works .                                        ti    Senator Fulbright` as section 203 of the 19 :0 Defens e
                                                                    Procurement Authorization Act ( Public Law 91--121 i ,
                                                           281      lirtitigg the use of funds for reseal Ch projects or studies
                                                                                   ASSISTANCE TO THE CONGRES S

to those having a "direct and apparent relationship to a           1921 is the ohligation to direct assistants from hi s
specific militan• function or operation ." Subsequently,           Officc to furnish such aid and information as ma% b e
at his request, GAO made a special study and issued a              requested by the committees ha%in« iinkclictiou o:c r
report to him in December 1969 concerning the pro-                 revenues, appropriation;, o' rsp~ndiut : cs .
cedures adopted by the Department to implement sec-                    Staff assistance is provided, hot\etcr, as a mattc r
tion 203 and the impact that section would have ha d               of policy, to all of the committees of Con,ress upo n
if enacted the previous year . A second report was issue d         request of the committee chairmen . dependent upo n
to the Senator on June 23 . 1970, pursuant to his re -             available manpmm and funds . During the tear th e
quest concerning the Department's compliance with                  Office responded to the request of 22 committees an d
section 203 .                                                      subcommittees for members of GAO sta11 to be as -
    Another example of assistance to a Member is th e              signed to assist in investigations . studies, and hearings .
work which resulted from a request in \larch 196 9                 GAO connibuted 4.945 than-&,}s of professional an d
front Congressman joint Brademas that GAO examin e                 technical assistance to c~uunittee efforts . Include d
the Army 's actions in fulfilling- its requirement for a           were the loan of ei«ht ntermers of GAO staff to th e
fleet of 18,000 new I %4-ton 4x4 trucks to cost over 510 0         House Committee on App :opt ; ations to assist in th e
million . Fulfillment of the Army ' s requirement had              studies of its SUryetS and Investigations Staff : the
generated a controversy as to whether modification t o             utilization of GAO pwsonnel in turee of its regiona l
a Kaiser jeep vehicle in the Army's supple system o r              offices by the House Interstate and Foreign Commerc e
acceptance of an unproven General Motors design i n                Committee in preparing for hearings on the propose d
the initial stages of procurement would better meet th e           Federal Bicker-Dealer Insurance Corporation legisla-
 requirement. The Army had chosen the latter course o f            tion : and the assignment of Washineton and field staf f
action, although the fo rnner appeared to offer appre-             to the Permanent Subcommittee of hnvesfigations .
ciable savings .                                                   Senate Government Operations Committee, to assist
    GAO discussed its tentative findings with the Con-             in its numerous complex investigations, including its
gressman and furnished him the information b e                     stud. Of the production cost overrun problems of tine
 requested for use in testifving on the proposed procure-           F–111 airplane .
ment before the House Appropriations Committee i n                      Over the past tear, an average of six GAO profes-
June 1969 and during the subsequent debate on th e                 sional staff members were assigned to assist the Sub -
 floor of the House when the related appropriation tea s           committee on Electrical and Mechanical Offic e
 considered . A report teas issued on November 28, 1969 ,          Equipment . Committee on House Administration, i n
 simultaneously to the Congressman and to the Secre-                its effo t to develop a program for the use of computers
 tary of Defense . In Februar}' 1970 . the army advise d            by the House of Representatives. In October 1969 th e
 GAO of the actions it would take, including, a test o f           subcommittee adopted a "Progress Report" of th e
 modified Kaiser jeep vehicles and an analysis of tes t               Corking Group which established a plan of action fo r
 results considering trade-offs between truck feature s             the developnxvt of such a system . "File chairnnan o f
 and c--t, to be completed prior to the commitment o f              t he Working Group is a GAO staff member . Othe r
 large scale funds on the procurement .                             members of the Working Group were provided by th e
    Another form of assistance to individual Members                I .il,rary of Congress and the Clerk of the House . At til e
 includes the reports GAO furnished upon request r, t-              present rime the Working Group is proceeding to de-
 cerning claims by and against the United States suc h              termine the conmessional information and analysis re-
 as those involving Government cont racts, compensa-               quirennent of tine system .
 tion of civilian personnel, pay and allowances of mili-                GAO provided staff to the joint Committee of
 tary personnel, travel. transpo tation, and per diem ,             _Atomic Energy to assist in the preparation for hearings
 matters . Darin,'" the tear, 3{?3 repo is ot` tl :i ; type were    on the future ownership of the Atomic Energy Conn -
 made .
                                                                    mission's gaseous diffusion plants, the fiscal year 197 1
                                                                    Commission authorization bill, and proposals to revis e
                                                                    the criteria for pricing uranium enrichment services
 Staff Assistance to Committee s                                    and to increase the price of the services.
    An important resp–nsibility placed upon the Ccmip-                  A summary of all assignments made during the year
 troller Gener al b} the budget and Accounting Act of               follows .




                                                                Stati rssigncd
                                                                               —                  Traeat                   Reimbursed No ea -
                              Commutec                    Profes-                    salaries    expense,   Tetat cost         by       pendii,nes
                                                          ,tonal      Other Tout                                           rvrlâ nittee by GA O

                            U .S. Senat e

    Committee on Government Operations :
       Permanent Subconi nittce on Investigations-            46       3      49    $223,545     i,5,649    $229.19-1,              0     `229, 194
    Committee on Armed Services :
       Preparedness Investigating Subcommittee . . . .         ?       0              38, 663          0      38,663        538,663                  0
    Committee on the judiciary :
       Subcommittee on Internal Security . .                   6       0        0     30 . 559       416      30, 975        30, 975                 0
    Committee on Labor and Public Welfare :
       Subcommittee on Labor	                                  2       0        2      6,945           0       6 . 945         - g-15
                                                                                                                              4"                     0

              U .S. House of Representative s
    Committee on Appropriations . _ . . . - - -                    7   _'       9     89, 074    10 . 451     99, 527         10 . 453      89,07 4
    Committee on Banding and Currency . . . . - - - . -            r   II       7     16, 598           a     16, 598               I)      16, 598
    Committee on Education and Labor :
        Special Subcommittee on Education . . . - - -          1       n        1      1, 216          a       1,216                0        1,21 6
    Committee. on Government Operations                        3       0       i           435                     -185             0           485
        Subcommittee on Special Studies_                       4       U       4      14, 608     1,607        `- 305               1)      16, 30.5
       Subconuuittee on Intergovernmental Relations,           7               7      47 . 860      637       4II, 497              0       48,49 7
        Subcommittee on Foreign Operations an d
          Government Information	                              1       0        l      1 .514          0       1,514               0          1,51 4
        Subcommittee on Legal and 'Monetary Affairs .           1      U        1      2,401           0       2-101               0          2,40 1
    Committee on Standards of Official Conduct . . . -         4       0       -4      i . 194         0       5, 111.1       5. 194               t)
    Conun:ttee on Interstate and Foreign Commerce :
        Subcommittee on Commerce and Finance . . -              i      0        3     21, 343          U      21, 313               0       21, 343      -
        Special Subcommittee on Investigations_                4       0        4      3, 389          0       3 . 381_1            0        3, 389
    Committee on armed Services :
        Special Subcommittee for Special Invest ; -
          gations	                                             2       0       2     31, 189     -4. 221      35, .410              0       35,41 0
    Committee on Post Office and Civil Service . . -           2       1       3     42,515            0      42, 515               0       42,51 5
    Committee on Merchant Marine and Fisheries :
        Subcommittee on Fisheries and Wildlife
          Conservation	                                            1   0        l      4,028           0       1,028                0         4,028
    Committee on House Administration . .                          1   0        M         721          0         721                0             72 1
    House Office Building Commission . .                           0   I        1      6, 518          0       6,518                0         6 .51 8


    Committee on Atomic Energy	                                    2   0        2      8,611           0       8,611                0         8,61 1
    Economic Committee :
        Subcommittee on Economy in Gos-ernr,en, . - -          _       0        _         563          0           568              0            56 8

           Totals . . . .                                   108        7      115    597,634     22, 983     620,617          92,230       528, 38 7

    Assistance in Legal and                                                 hundred informal requests from the staffs of variou s
                                                                            committees . S^wive in this area involves the drafting
    Legislative Matters
                                                                            of legislation and furnishing of legal advice on fiscal .
      C_10 responded to mane requests from conunittccs                      administrative . and contractual aspects of legislative
    and individual Members for advisory assistance in legal                 proposals and lass,, plus related agency t-cp itions.
    and legislative matters. Formal advisory legal opinions                    Kxamplcs of important conga ssional legal inquirie s
    were rendered to committees and Nfcnihcrs on sig-                       tcere those received from the dit1c                it    AIcnlbets o f
    nificant problems, and GAO attorney°s handled scref .al                 Congress for GAO views on the propriety of the " Phila -
    16                                                                                                                                                       r
                                                                              ASSISTANCE TO THE CONGRES S

delphia Plan" which precipitated GAO's involvemen t           Veterans Administration that the agreement did com e
in this important case and led to the august 5, 1969 ,        within the provisions of th, lavr 11-1661370 . Jan . 19,
decision that the Plan conflicted %Kith Title VII of th e     1970! .
Civil Rights Act of 1961 . The Solicitor of the Depart-         An inquire was received from Senator Winston L .
ment of Labor and the Assistant Attorney° General fo r        Prouty concerning due bill S . 1933 . enacted as the Fed-
Civil Rights had previously advised the Secretaiy o f         eral Railroad Safety Act of 1970, Public Law 91-158 .
Labor that the contract did not violate the act and the       as to whether the repeal by this act of the so-calle d
Attorney General of the United States in a forma l            Safety Appliance Acts might ha%e an adverse effect o n
opinion on September 22, 1969, concurred in thei r            the rights of employees under the Federal F' .rnploNecs
position . This divergence of views bemeen th e               Liability Act . GAO's opinion to the Senator advisin g
Comptroller General and the Attorney General wa s             that the provisions of the proposed legislation woul d
considered when the Congress suhsequenth decide d             not jeopardize t h e employees rights Naas placed b y
not to adopt an amendment which the Senate had at-            him in the Com_ressional record during the debat e
tached to the Supplemental Appropriation Bill, 1970,          on the bili {1i-11394-1, Dec . 19 . 1969) .
the effect of which would have prohibited the use o f
appropriated funds for contracts kith "Philadelphi a
Plan" provisions .                                            Testimony at Hearing s
   In considering H .R . 1479-I . the fiscal year 1970 ap-
propriation bill for the Departrnent of 'Transportatio n          Appearing before c oncressional committees to pre -
and Related Agencies, the I louse Appropriations Com-         sent_ yietys on legislative proposals and to furnish in -
mitta' requested advice on the legality of tht "parkin g      formation concerning the results of GAO's audit an d
equalization " plan proposed by the Department o f            Mvestigatiou activities is one of the most positive an d
Transportation incident to the physical consolidatio n        direct methods available to GAO for effectively as-
of its headquarters activities in urn Washington . D .C . .   sisting the Congress in its o%ersieht and legislative re-
buildings . GAO concluded that the plan, whereby the          sponsibilities . This ,car the Comptroller General, th e
Department sought to make parking privileges avail -            \s,istant Comptroller General .. and other representa-
able to its emplo} ecs at the same cost whether they ar c      tives of the Office appeared before coanmittees on -1 5
located in a Government-m%ned building or in a                occasions covering a wide variety of subjects . This is a
privately owned building=. was legally questionable . I n     substantial increase over the number of hcarim_*s i n
file same opinion . with respect to another legal ques-        prior years . refl ectin :; iu some degree the broade r
tion raised by the committee, it was held that appropri-      scope of GAO tyork coverage and its relevancy to th e
ated funds may be used to provide space for employe e         interests of the Committees .
parking in a Government-rented office building . Tltc             GAO stall appeared before the joint Committe e
committee stated in reporting the Department o f              on Atomic Energy to discuss the results of the s t:ecia l
Transportation and Related agencies :Appropriation .           reyicw GAO made at the request of the chairman con-
1971 (H . Rcpt 91-1115, 91stCong.), that "the failure         cerning the possible transfer to private ownership by
of the Department and the General Seryicc; Admin-             the Atomic Encrgy Commission of three gaseous dif-
istration to inquire about the legality of leasing th e       fusion plants which were constructed for defense pur-
employee parkins on their Dear initiative prior to en-        poses during the 19-10's and 1950`s at a cost oI abou t
tering the lease contract with the buildiuR owner ha s        52 .1 billion . There is a complexity of defense and eco-
added considerably to the ultimate cost ."                    nomic issues associated with . the disposition of th e
   Other examples of congressional requests for deci-          plants whose future use will be primarily to provide en-
sions on important legal questions included an inquir %        riched uranium for fuel in nuclear reactors of utilities
by the chairman of the House Committee on Veterans ,           for generating electric power . GAO was pleased by the
Affairs as to tdtethei a sharing agreement between th e       chairman's expression of satisfaction with the informa-
University of Arizona College of Medicine and a Pet-           tion presented for the committee's consideration i n
crans Administration I-tospital met requiretuents o f          determining the Government's course of action regard-
law . In view of the fact that the university had n o          ing its uranium enrichment enterprises. hestimony
hospital to operate in conunction with the College o f        stirs also g iven Uctorc the Joint Committee on the re-
Medicine, GAO concurred in the conclusion of the              sults of GAO's continuing review of the developmen t



     and deployment of the SAFEGUARD antiballisti c                            GAO responsibilities to assist the Congress and it s
     missile system.                                                           committees .
       GAO staff testifiecl on mane subjects that were o f                       H .R . 170=16, a bill to establish an Office of Tech-
     special concern to the Congress during the tear, such as                  nolow Assessment for the Congress, which provide s
     the F—1 I I aircraft before the Permanent Subcommit-                      for the Comptroller General to be a member of the
     tee on Investigations, Senate Government Operations
                                                                               Technology Assessment Board .
     Committee ; the U .S . financial participation in th e
                                                                                  S. 3302 and H .R . 17880, bills to establish cos t
     United Nations development assistance activities : and
     the provisions of the bill I-I .R . 117 :10, to establish a               aecountiu~ standards as reconunended by the Offic e
     Scholl} Governuuv nt-owned corporation to operate the                     in its special report to the Congress evaluating ti .

     postal service . Representatives of the Office also ap-                   feasibility of establishin, cost accountint, stand-
     peared on legislative proposals having an importan t                      ards for certain negotiated Federal procuremen t
     impact on GAO's own operations .                                          contracts .

            H .R . 1765=1, the proposed Legislative Reorgani-                  A complete list of appearances, including identifica-
          zation Act of 1970, which would greatly enlarge                  tion of the subject matter, follows .

                                        FISCAL YEAR 1970

                             Cmmr.;lh°r                            D .te                                  5u6ice t

                          U .S. Senat e

    Fipanee .                                               July     1969 Operation and status of the Medicare and Medicai d
                                                                              progra nt. .
     Post Office and Civil Service.                         July P, 19619 S . 2325, a bill to amend title 5 . US .C ., to pro-, ide for addi -
                                                                              tional positions in grades GS--i6, G3-17, and G . .-Ih .
    Appropria nom :
        Subeomr, ; ,tee on District of t :olu?nbia .        Jul, 10, 1960      .-Audits and reviews of District of Columhia Govenuuc n .
                                                                                 ilia   e ;ucu[ of its programs and actkitics .
    Judiciary :
         Subcomtnitlee on .lntitrust and V(o~iopoh-         Ju!y 14, 196Si GAO's evaluation of two proposed methods for euhencin :;
                                                                             competition in trcallous cvsictus procm-enicnt--clirrctccl
                                                                             technology licensing Mal paral!cl undocuutented (Ievek[p -
                                                                             Men t .
    .- 1pprnpriations :
          ~ubcomntittcr on I .cgislativc Branch .           Jul% 18 . 1969 Gencral Accountin'* Office budget justification fm fisca l
                                                                              year 1974
    Government Operations .                                 Jul%31 . 1969 S . 1707, to establish a Cominission on Gorenunent Pnxure-
                                                                             uuen[ .
    Government Operations :
       Subco :uutitu:e oil Executive f:cnrgsnization .      Sept . 16 . i`h,   The role of GAO in r-tvrving the result of Fedc-1 pro -
                                                                                 4r .tuls .
    Government Operations :
       Subcon:atittec oil Intetgoeermuental Relations . Sept . i7 . 196'1 S . 2-179, S. 2035, and S . 60, Federal assistance progra ns_

    Govermncnt Operation,                                   Sept, 21 . 1969 Nomination of Mr . Robert F . Keller to be A3sistan t
                                                                              Comptroller General of the United States .

    Post Office and Civil Serv ice .                        Oct . In . 1969 Provisions of ILIt . 11750 which proposes to e s tablish a
                                                                              wholly ox,ned Government corporation to operate th e
                                                                              postal service .
    Judicial-, :
         Subcommittee on Separation of Powers .             Oct . 23, 1969 The Philadelphia[ flan .
     \need Services :
         Subconrtnittce on Research :tut Developme nt .     \far - 9, 1970 Adequacv of control regarding independent rscarch an d
                                                                             dec clopmcnt and bidding proposai expenses .


                                                                                            ASSISTANCE TO THE CONGRES S

                                     FISCAL YEAR 1970—Continue d

                         f not;nittec                            IJat,-                                   cubie. t

    Banking and Currency :
        Subcommittee on Production and Stabilization .   Afar . It, 1970      S . 3302, to extend the Defense Production Act, and t o
                                                                                 establish uniform cost accountine standards for defense_
                                                                                 contr actors .
    .Appropriations :
        Subcommittee on Legislative Branch .             Apr .     8, 1970    General Accounting Office budget justification for fisca l
                                                                                year 1971 .
    Appropriations :
        Subcommittee on District of Columbia .           Apr. 22, 1979        District of Columbia financial management improvemeu*s .
    Appropriations :
        Subcommittee on District of Columbia .           Apr. 22, 1970        District of Columbia financing of capital improvements .
    Government Operations :
        Permanent Subcommittee on Investigations .       Apr . 28, 1970       The F–111 aircraft program .
    Labor and Public Welfare :
        Subcommittee on Employment, Manpo%,cr and        \far      -,, 1970   Preliminary findings and observations on the job Oppor -
          Poverty .                                                             tunnies is the Business Sector (JOBS 1 program .
    Appropriations :
        Subcommittee on Deficiencies and Supplements .   Slav 26, 1970        Gener d .-Accounting Office supplemental budget justifica -
                                                                                tion for fiscal v^_ar 197 0
    Commerce :
       Subcommittee on Energy, Natural Resources,        Afav 26, 1970        Information on GAO's work in the pesticides regulatio n
         and the Environment .                                                  activip. of the Department of :Agiicu,lntre . (S . 3,266, t o
                                                                                provide for more effective protection agauv c the hazards
                                                                                of economic poisons .)
              U .S . House of Representative s

    Appropriations :
        Subcommittee on Legislative .                    July 15, 1969 General Accounting Office budget justification for fisca l
                                                                         year 1970 .
    Education and Labor :
        Special Subcommittee on Education . July 29, le69 Unnecessary interest costs being incurred by the Feder a
                                                                    GovCll,u)cnt on guaranteed student loans made wider
                                                                   "Title iv, part 33, of the Higher Education Act of 196 . ) .
    Post Office and Civil Service .  Aug . 8, 1969 H .R . i . H .R. 11750, and H .R . 13123, proposals to mod-
                                                                   ernize the postal establishment, and H .R . 1133 and ILR .
                                                                    1134, re primarily to appointments of personnel in th e
                                                                   Postal Establishment .
    Government Operations :
        Subcommittee or. Lcga! and Afoneiary Affairs . Sept . 9, 1969 GAO review and evaluation of the actions taken by th e
                                                                        Department of justice to implement recommendation s
                                                                        made in H . Rept . 1640 t88th Cong ., 2d scss .) entitled
                                                                        Judgement Collection Practices and Policies of th e
                                                                        Department of justice .
    Judiciary :
        Subcommittee No . 2 .                            Sept . 11, 1969 H .R . 13f70, II . Res . 108, H.R . 13148, and H . Res. 50 5
                                                                            silver loss claims .
    Judiciary :
         Subcommittee No . 2 .          Nov . 19, 1 0 D 1-1-R . 10068 and S . 1175, to authorize the waiving of th e
                                                            requirement of purformauce and payment bonds i n
                                                            conoection with certain contracts entered into by th e
                                                            Secretary of Commerce .
    Government Operations :
         Subcmmtuittee on Military Operations .  Nov. 20 . 1969 Aliliia .v supply srstcros .
    Science and Astronautic, :
         Subc-onnmittee on Science, Research and Dec . 4, 19'12 Role of GAO in technology assessment .



                                     FISCAL YEAR 1970®Contint :ed

                         Conm:itu=                                  llate                                         subi,el

    Appropriations :
        Subcommittee on Legislative.                       Feb . 24, 1970 General Accounting Office budget justification for fisca l
                                                                            rear 1971 .
    Armed Services :
         Special Subcommittee on Independent Research Feb . 25 7 1970 Adequacy of controls for independent research and de -
           and Development                                                veloputer,t, bidding and proposal expenses .
    Foreign :Affairs :
         Subcommittee on International Organizations \far . 5 . 1970 U .S . financial participation in the Unitcd Nations de-
           and Movements .                                                veloptneut assistance activities .
    Government Operations :
         Subcommittee oil Executive and Legislative Re- Atar_ 'k 1 070 President's Reorganization Plan No . I of 1970, establishing
           organization .                                                 a new Office of Telecommunications Policy in th e
                                                                          Executive Office of the President .
    Government Operations :
        Subcommittee on Special Studies .                  Afar . 12, 1970            :A study of the utilization and operations of interagenc y
                                                                                        and public advisory committees .
    Judiciary :
         Subcommittee No. 4 .                              Apr .      9.. 1970        1-f .R . 14071, audit and disclosure of information by federall y
                                                                                          chartered corporations.
    Government Operations :
        Subcommittee oil Foreign Operations          and   \fay        1, 1970        U .S . participation in international organizations .
          Government Information .
    Education and Labor :
        Select Subcommittee on Labor .                     \fay        I,   1 1 ,70   Preliminary findings and observations on the job Oppor -
                                                                                        umiities in the Business Sector (JOBS) Program .
    Science and Astronautics :
         Suocommittee on Science, Research and De-         Afay 20, 1970              H .R . 1704ti, to establish an Office of Technology Assess -
           velopmcn t .                                                                  n :co t .
    Government Operations :
         Subcommittee on Govermnrent Activities-           , junr     4, 1970         H .R . 164-13, to establish Federal policy concerning the
                                                                                         selection of fiats and individuals to perform architec -
                                                                                          tural, engineering, and related scivices for the Federa l
                                                                                         Government .
    Banking and Currency .                                 June ISL 1970              ILR . 17880, to amend the Defense Production Act o f
                                                                                          1950 and to establish uniform cost accounting standard s
                                                                                         for defense contractors .
                             Join t
    Atomic Energy .                                        Julv       9, 1909         Possible transfer of Atomic Energy Commission's gaseou s
                                                                                        diffusion plants to private ownership .
    Economic :
        Subcommittee. on Economy in Government .           Actg . 13,       I1 1 69   Revic, of the qualification testing of brakes for the A-7 D
                                                                                       aircraft .
    Economic :
        Subconunittee oil Economy in Governntcnt .         Dec . 2'!, Iol,9           Various aspects of military procurement indexing 0u:
                                                                                        ` should cost „ Concept of estimating costs relining t o
                                                                                        major weapons systems zinc] impfen :ent .ttion of the Trut h
                                                                                        in Negotiations Act .
    Atomic Energy .                                        Feb .      16, 1970        Briefing on the GAO's review of the SAFEGUARD
               . .,                                                                     system . (Executive mecting) .
    Economic :
        Subcotumiuce oil Economr in Gocc :-nnu-m .          Mav Zit, 1970             Government procuremment areas including : Defensr urofi u
                                                                                        stud,, fcasihifit% of "should cast" concepts, major acq- i
                                                                                        sition rcriclr, mdoary procurement cost indcx . ship °
                                                                                        buildin, claims under Navy contracts, and Lockheed' s
                                                                                         financial position .
    Atomic Energy .                                        Jun, 17, 1970              Proposed inerc ;tces in uranium enrichment service prices .

                                                                            ASSISTANCE TO THE CONGRES S

Assistance on Ilouse                                        Recommendations for Legislatio n
and Senate Financial and
Administrative Operation s                                     The Budget and Accounting Act . 1921, requires th e
                                                            Comptroller General to make recommendations to th e
   GAO has a small professional audit and accountin g       Congress "looking to greater econonnv and efficiency i n
                                                            public expenditures ." In preparing, audit reports to th e
 staff at the Capitol for the purpose of perforrnin ,g
                                                            Congress GAO carefully weighs the necessity for legis-
audits, examinations, and reviers of various activitie s
                                                            lative action to correct, improve, or eliminate uneco-
of the House and Serrate . This staff also furnishes as-
                                                            nomical practices and activities of the department s
sistance requested by officers of the Congress on nran-     and agencies .
agenent, financial, and administrative problems . T her e      The Office generally makes legislative recornrerda-
requests are received practically daily and require GA O    tions directly to the Congress in its reports, but in som e
staff to work very closely with those officials on im-      cases tnay su g gest that the agency concerned initiat e
mediate problems as well as on long range plans fo r        the legislative action . For example, as an outgrowth
improving Capitol operations, including the use o f         of participation in the Joint Agency Transportation.
computers and microfilming .                                Study, GAO sent to the Administrator . General Serv-
   GAO has been working with the staff of the Cler k        ices Administration, a draft hill designed to exemp t
of the House of Representatives in modernizing th e         transportation payments from the scope of the lac y
accounting and office procedures of the House . As          enacted in 1833 131 U .S .C . 529= prohibiting the Gov-
a result of this cooperative effort, seven documents i n    ernment from making payment in advance of the re-
the appointment process were reduced to one form ,          ceipt of services . GAO recommended that ire take th e
                                                            lead action to obtain approval of this modernizin g
employee affidavit documents were consolidated, an d
                                                            legislation since his Administration is one of the prin-
accounting procedures and records were revised result-
                                                            cipal Government shipping agencies (I3-163758) . H e
ing in tile elimination of a considerable amount of
                                                            agreed to initiate the le~sislative action .
unnecessati, work . Another improvement involved               As part of us legislative program GAO brings pro-
mailing of employee paychecks through computer op-          posals to the attention of the committee and staff mem-
erations rather than approximately 3,000 of the 6,50 0      ber. hayim± jurisdiction Oyer the subject to obtai n
employees of the house receiving their paychecks a t        action in the forth of legislation as GAO recommended ,
the Finance Office each month . This eliminated the         or modified as found necessary by the committee upon
loss of title by the staff of the Finance Office in al-     further studv . Legislative recommendations by the Of-
phabetizing the checks and by the employees ryaitin g       fice were the subject of several hearings during th e
hr line during working hours at the Finance Office t o      near.
receive their checks .                                         A discussion of these le_eislatiye reconunetrdation s
   At the request of the officers of the Senate and o f     follows.
the House of Representatives GAO audited and re -
ported on the following activities :                        Recommendations `to the Congres s
                                                            During F= iscal Year 197 0
     Capitol Guide Force
     Senate Offi, e Beauty Sho p                               1 . Re Ica- of sugar nzar,ixting quotas established b y
     Senate Employees Barber Sho p
                                                            the Sugar Act of 19,18, as amended ---Statistics p1lb -
     Senate Recording= Studio Revolving Fun d
                                                            1i5hed by the Department of Agriculture showed that .
     House Stationery Revolving Full( ]
     IIousc Finance Offic e                                 during the 6-}ear period from 1963 through 1968, an-
                                                            nual marketings of su _ar by domestic producers range d
  At the rcgneSt of the 1-I011se Select COlmtritl.Ce o n    frown 225,000 tons to 913 -000 tons--about . 1 to 1 3
the House Beauty Shop an audit was made of this             percent—below the quotas authorized by the act . 'I`h e
operation for the calendar year 1969, and assistanc e       dorucstic marketings belotti authorized quotas occurred
was given in the establishment of the- Reyolying Fun d      bcrause of rontinuilug, long-term deficits in tine suga r
for tare Houst- Beauty Shop created by the Legislativ e     production of Puerto Rico and the Via-din Islands .
Branch Appropriation Act, 1970 . Public Law                 While the Sugar Ac=t has required that unfil]ed doltles -

tic quotas be allocated to foreign countries . GAO wa s             [ions regarding insurance ceilings and land appraisal s
unformed that other domestic areas could provide th e               t%hich it belicyed ,yari-anted congressional attention .
unfilled quotas- Substantial benefits, including a st:b-               Accorditrz to applicable law, an insured mortgag e
stantial i•icrease in the income of domestic stwar pro-             on any property of a private mortgagor cannot excee d
ducers and a reduction in dollar outflow for sugar im-              S20 million . By applyinr this limitation to each seg-
ports, could be achieved by allocatin the unfille d                 ment of a lame, self-contained housing community '
Puerto Rican and Vi Lin Islands quotas to other do-                 comprking many individual but interdependent an d
mestic sugar-producing areas rather than to forei g n               inte,ral property segmerits, HUD insured or had com-
countries .                                                         mitments to insure nortgdges of abnut$270 trillion o n
   GAO recommended that the Congress in its exten-                  five particular communities .
sion of legislation--which expires on December 31 .                     Also . treatment o : each segment as a separate mort-
 1~til--consider modification of the deficit allocatio n            gage entity resulted in substantial increases in HUD' s
provisions of the Sugar Act of 1948 . as amended, t o               land appraisals and increased the land prices paid to
enable the Secretary of Agriculture to allocate continu-            the de•.eloper by the cooperative mortgage corpora-
 ing, long-term deficits of a domestic- area to othe r               tions . Legislatiyc histor% indicated that tile pi-incipa l
domestic areas rather than to foreign ('ountries . Ad -              objective of the cooperative housing mortgage insur-
ministration of Sugar- Mari:eting Quotas Establishe d                ance pio,cam ryas to assist in providing housing at re-
 by the Sugar Act of 1918_ as amended, B-118622 .                    duced costs to the consumers and that the program
Scpt . 23 . 1969 . )                                                 was to be administered to insure that its benefits woul d
                                                                     accrue to the consumers .
   2 . Assistance prodded to persr ?? already ad( quatelt ~
                                                                        GAO su,lested that the C:orrgress might wish to cotT -
housed or Iracrn g   rc?at11c large assets .—Under the
                                                                     sider whether statutory provisions and HUD's procc-
leased housing pros*ran ; administered by the Depart-
                                                                     dures relating to mortgage loan insurance ceilings an d
ment of Housing; and Urban Development THUD`- :
                                                                     land appraisals are appropriate for lame and comple x
some local housing authorities ' LHAs were pro% idin<_,
                                                                     self-contained housing communities of the type dis-
assistance to persons ah'eadv adequately housed whil e
                                                                     cussed in the report . Questions Regardim, Mortgage
applicants on t%aiting lists for federally assisted housing
                                                                     Loan Insurance Ceilings tit(! Land Appraisals fo r
continued to lice in substandard dwellines . Also, som e
                                                                     LarQc Cooperati%e Housing Conmuurities, B-158910 ,
 I IAs were providing assistance to person ; t,ho, .wr :e d
                                                                     Fcb . 2 7 . 1970 .
 relatively large amounts of assorts.
     GAO proposed that HUD require LHAs to =giv e                      1 . A'enl for c ham,,- in intei,,.t rate criteria for dctcr-
 priority- in the leasing program to lot%-incou,c person s          ot m?,, loran, inn co,tr oil Fcdr ral pow er progg am -
tyho were not adequately housed and that UlAs h e                   I hhe critcii :, used in detemlir,in, the cost of financin g
 required to establish and adhetc to reasonable hilllLa-            the Federal potycr systems of the Department of th e
tions nn asset holdings of applicants in determinim:                 Ir-terior and the Cops of Engineers—costs that ar c
 their eligibility for Federal as-si=tance undo ; t i re leasim-,    i payablc from revenues obtained from the sale o f
 program .                                                           pot,er- result in the use of interest i .ates that are no t
     HUD disagreed x6th the proposals . Conscquentl .                 epreseucuiyc of tim• cost of funds borrowed by th e
 GAO expressed the helief that the Congress might wis h             Treasury durinr Cite construct;on of the varirn u
 to consider whether priority should be givcu to lr,y-              power systems . Consequently, the Govermnent's c,,s t
 income persons who are not adequately housed an d                       linancim, these stems has been significantl y
 tyhether asset limitations ~ . ould be established fo r            tntderstated .
 detenuiniml eligibility for assistance under the pro -                 As an example of the understatement of financin g
 '1ram . :Administration of the Leased Housing Pro-                 casts, the interest rates used in the Pederal Columbi a
 g, :atn . B-I 18718 . Fcb . •1, 1970_ [                             River Power Ststem- althou_h established in accord-
  'i . -llnrtgage- loan insurance rcilingt and land at~ -            mwe t%ith !om,_wceptcd criteria, have resulted i n
prai al, for lame caoperati,. , ho -in s co muniti, . . - -          undcistatim* ht bout S22 million the Capitalized in-
In a report on the review of the procedures and I,rac-               terest costs dunlix, consu uc tion for those major ppl-
tices- of the Dcparhnent ul Housing, and L-rbart I) eye1 -           eas -tilt under constrotion in fiscal veal' 1'168 and i n
npntcrtt (HUD', for insuring IlloI gc baits for lal-Q e              ruutcrstatim.* by about tit million the interest expens e
coopetativc housing comsnuniuea . GAO raised que~ -                  for fiscal year 1968 ~m the urrepaid Federal invest -

                                                                              ASSISTANCE TO THE CONGRES S

ment related to the transmission facilities of the Boom -        In enacting legislation authorizing the establishmen t
cille Potter Administration .                                 of national recreation areas, the Congress frequentl y
   Al2hough recent ehames by the Department an d              has to define boundaries before important facts, suc h
the Corps Mill result in significant improvements . GA O      as the cost of carious tracts of land . are l;noxyrt . GA O
believes that neither will result in a realistic measur e     therefore recommended that the Congress . in enactim!
of the cost to the Treasury of borro%%ing rnoney durin g      such legislation, provide the Secretan of cite Interi m
the period of construction of poker projects .                with guidelines lot makim changes in establishe d
   Accordingly, it was suggested that the Congres s           boundaries tyhen the acquisition of high-cost proper-
might wish to consider changing the interest rat e            ties located on or near the boutdaries is in .oiyed .
criteria to provide that :                                       It was also recommended that the Congress require
      The interest costs to be capitalized as part of th e    the Secretary to prepare an analYsis of the location ;ln d
                                                              estimated cost of high-cost properties on the perimete r
   GovernmenC s investment in poker projects he base d
                                                              of those authori/ed recreation areas for uhicli addi-
   on an interest rate prescribed by the Secretary o f
   the Treasury taking into consideration the averag e        tional funds are needed and to justify to the Congres s
   market yield, during the year in which the invest-         the desirability of acquiring such properties . fPmb-
   ment is made, on the outstanding marketable obli-          lcnis in Land Acquisitions for National Recreation
                                                              :treas . 11-16-811, Apr . 29 . 1970 .
   gations which lie considers to be most representativ e
   of the cost to the Treasury of borrowing money to            6 . Feed far grtirlance to establish purpose to be ful -
   construct the power projects .                             1411cd br a zc-atcr resowces project .—The Deparunen t
      The interest to be paid to the Treasury annuall y       of the Interiors feasibility report for the San Lui s
                                                               Unit . Central g alley project . submitted to the Con-
   on the Government 's unrepaid investment in powe r
                                                               gress in 1956, stated that an important purpose of th e
   projects be based on a composite of the atera ,g?
                                                               !Unit lta.s to replenish the ground tcater. In t965 th e
   market yields used in computing the capitalize d
                                                               Bureau of Reclamation amended its contract with th e
   interest costs.
                                                               Westlands Water District, the largest user of state r
( Change Proposed in Interest Rate Criteria for Deter -        provided b-y the Unit, to include provisions uyhich, i f
mining Financing Costs of Federal Potter Program ,             fink' implemented . could prevent accomplishment o f
B--16 ;712, Jan . 13 . 19 7/0. )                               this purpose .
    5 . Acquisition of !and for national recreation arra s        I'he contract was amended to prevent ineligibl e
r " ntaiio. ?w impr-ot-ed Plop, rti<~ .—The Xational Part _    landowners (owners of more than 160 acres of irriga-
Service j NPS ; . Department of the Interior, had a~ -         ble land' front indirectly benefiting front the water
                                                               provided by dui i=nit . I'o irrigate lands in excess o f
c{uired or planned to acquire hi ih-cost improved prop-
                                                               160 acres, an ineligible owner would hase to pum p
erties located on or near the boundaries of authorize d        (uses ground water . Ineligible landowners could ben-
national recreation areas although . in GAO - s op .nion .
                                                               efit from a rise in the tcater table resulting from non -
these properties could have been excluded or Could b e         use of ground %cater by eligible lanclmNners and fro m
UNCAuied fnm thr arras -,6thout interferin ttith tb•-          percolation into the ground water of irrigation wate r
areas' development . Changes in boundaries to exclude          applied to the lands of eligible lanclowners . thus re-
such properties not vet acquired would result in sig-         s_tlting in a reduction of ineligible landowners' cos t
nificant benefits to NPS, especially in those areas wher e     of pu,nping ground crater .
authorized funds have fallen far short of tire amoun t            To prevent these henefits, the contract was amended
wquired to complete i1w land acquisition and vthere            to provide that Westlands, -Mien directed by the Bu-
considerable amounts of unimproved land %rith lotre r          reau, pump ground Mater rather than purchase water .
estimated costs an acre remain to be acquired .               This could result in the Bureau's paying Westland s
   The Deparumetrt of the Interior rejected the sue--         about ',2 million and in the Unit's losing revenue s
gestiou that consideration be ','iyen to adjusting bound-     of about : -I million .
aries of certain recreation areas to exchtcie high-cos t         The Department stated that it did not share GAO' s
improyai properties and stated that sonic acq , n-ition s     concern over the financial i : :-';)act of the amendment ,
of expensive propertie< are necessary to protect scenic ,     since it believed that Wee tlauds trouid not be require d
historical, and culturat slues .                              to pump ground water. GAO suggested, nevertheless ,


that the Com,ress mieht wish to provide guidance t o              8 . _feed to improve cjtectit~enc_s of constructio n
the Bureau as to tvhiclt purpose is of primart Impor-           grant hrog ;am for abating, controlling, and prez-cratin g
tance-rcplenishin-- and stabilizin the ground hate r            zcater pollution .—The construction ,rant program fo r
supply or prcycntinginciis~ible landotcncrs front recck-        abating, controlling . and pre%enting water pollutio n
inL, benelits from project water .                              has been administered by the Federal Water Qualit y
    C;AO sug,ested also that, if it is determined that re-      Administration lFWQA' , Department of the Interior .
plcuishinq and stabilizing the ground water suppl y             for the most part on a first-come-first-served or readi-
,hc,dd he Even primary consideration . the Gon_eres s           ness-to-proceed basis with little consideration :g iven t o
nri9"ht wish to consider the applicabilite to the San Lui s     the henefits to be attained by the construction of indi-
, :,wive area of the provisions of scyrral hills inU ochtce d   vidual treatment plants . Also, it serious question exists
in the 9154 Coufft'ess which . if enacted into late, C OUl d    as to the attainability of the States water qualitV stand-
have the effect of lesseniu, the need to puntp groun d          ards by the date, in the implementation schedule s
water. (Questionable .-Aspects C :oncernin Informatio n         because construction is proceeding at a rate well belm,
 Presented to the Congress on Construction and Opera-           the anticipat~_d rate .
 tion of the San Luis L_711i Central Valley Project ..              (iA0 reco;untended that the Secretary of the Inte-
 B-123011 , Feb . 12, 1970 . 1                                  rior require that the State, in establishin, priorities
                                                                tot. the construction of N+astr treatment facilities . an d
   7. R'strictiou on use of comp-0ire bid 1mvedure t
                                                                F\CQA in approving grants for such construction . ,ry e
in awarding Fed(?a! oil and gas lease; .—Nfost of th e
                                                                consideration to 1 the benefits to he derived from th e
leases awarded by the Bureau of Land Mana^emen t
                                                                construction of the facilities and 2 the actions taken .
,;BLM , . Department of the Interior, for the develop-
                                                                or planned to be taken . by other polluters of the water-
ment of oil and gas resources on Federal lands hav e
                                                                way, . It vvas recommended also that F\VQA conside r
1?een ,ranted on a noncourpcu j tiye basi, and . III In 111 %
                                                                utilizing systerrts artaksi, techniques in tile plarlilim !
cases, at prices less than their indicated fair marke  ' t
                                                                for and implementing of N%ater pollution contro l
value- The lands arc leased noncompcud•,eh becaus e
                                                                programs .
of the regttirement of the Mineral Leasing _Act +3 0
                                                                    The Department of the Interior agreed that a mor e
U .S .C . 181 that lands not located within a kno,, n
                                                                systematie means of awarding construction grants mus t
geologic structw'c of a producing oil or t,, as field mus t     be found, and on July 2, 1970 . the Secretary of th e
be leased noncompetitiselc . Generalh, the geologi c            Interior issued rc_ulations which require that, to b e
data needed to determine whether lands offered 1c~ r            elig j lrle for Federal tid . a new project roust fit in wit h
leasing are within such a structure arc trot atailahl e         comprehensive ricer basin-wide progi:uns for pollutio n
to the Department before lcasin~l and drdhm, .                  abatement as \,eil as tcith tnvoopolitln and regiona l
   LAO believes that the Government should and coul d           plans .
use competitive bidding_ to a "Treater 'vtent to insur e            'Fire Department took the position, however, that :
prices that more pearly approximate the land's fair             providing h°-s than ~ccondar\ treatment of wast e
market value .                                                  would not he acceptable and that interim goals shoul d
   Also, indications were found that the statuton , righ t      not he established . GAO recouunended_ therefore, tha t
of lessees to assign to other persons oil and --as lease s      the Uon ress consider requiring the Department to
of Federal lands in units as small as -10 acre, intpede >       proud, for interim goals and to allow conumnritics t o
rather than induces the devclopmcnt of oil and ga s             construct less than sec ondan' treatment facilities whe n
I esomTes .                                                     it can be demonstrated that a lesser degree of tr eatmen t
   GAO recommended to the Comress that the AMinera l            \.till result in water gnalitr enhauicement conunen -
Leasim Act be amended to s I'i require that oil and ga s        >urate with proposed present and future water uses .
leases of all Federal lands be at+°nrded competitive h              In addition, since the I~ecleral Wiwi Pollution Con-
unless otherwise just i fied and (2` increase the mint -        trol Act provides that priority for construction -rants
muni acreage l i mitations apphcah!c to the IS6 mnPr u          he ~~iyen on the basis of financial as well as hater pollu -
of such leases . ,;Opportunit for Benefits throu'-di In -       tion control needs-v%hi g h Could result it: the award o f
creased Use of Cnmoctitive Biddim to A% and Oil an d            grants that provide little benefit in terms of apprecia-
Gas Leases on Federal Lands, B-118678 . Mar . 17 ,              hh..' improving quality m uses-4iAO s m_'gestcd tha t
1.970 .                                                         the Confress might wish to consider amending esist -

24                                                                                                                               I

                                                                                      ASSISTANCE TO THE CONGRES S

    iwr legislation to provide that prior ities be establishe d      dotmcstic-industrial s.°stem, incht;trc .~.ouid have to pre-
    on the basis of benefits to be realized . FN3I II I Ila60 tt     i t cat those wastes .
    into the F.ffvctiseI less of the Construction Iit am Pm -            \l bile the 11tH irapnrt Of tlu regulations is not clear ,
    gram for Abating . Controlling . and Prc%enting AV Ac t          the% do not full weer tilt , matters GA0 suggested for
    Pollution, B--166506, :\oti . 3 . 1969 . ?                       cennsideration b% the Congress. 1 cdctal ( ;rant s
                                                                     A%%arded for Cotrst"uCtan g \\a to I Ieatr[tent Facil-
       9- Clarification of stafuttn - pooz-isicm~ . - ;,ardin s
                                                                     ities A\ filch Benefit Industrial I_scf> . 1) -166506. Abt% ,
    Federal {g rants a .cardcd fcr constructing ra,eniciPra i
                                                                     1970 . '-
    utacte treatment lacilaicr rchich beta/it indust)w !
    users .—"File Federal \\miff Pollution Cpntiol Act o f               10. Diq!,m , ,Ii fhc natur, and magnitude of a
    1956 authorizes the Federal \\stcr Qnalit% Adminis-              f)ro_,ra!r, t„ plaa additional 1aT, r± o  aren ;cnf oi l
    tration ! FWQA1 to award ,rants to State . interstate ,          +arc dol ly ee,wpl,°t,d m, o, of the Int, r .,tat, i?h-
    municipal, and intermm~ricipal agencies for the con-              car S_t Steen_Tltc Federal Iligh,%a% Adnunistratio n
    struction of necessmy waste treatment facilities to prc-         has authorized placement of an added ]a%cr of pavV -
      ent the discharge of untreated or ioadequatels treate d        rncut ~ )yellav to extend the desisLn sear of certai n
    sewage or other waste into anv v%aters . F\V'QA doe s            deteriorated segment of the Interstate Hi ,ehwa~ S%s-
    not differentiate between municipal and industria l              tent v%hich v%Cie authorized for construction print t o
    wastes and considers the terns " other v%ante " as in-           the date of tine 1 1163 aulendrnent to the Federal-Ai d
    cludil> .g industrial wastes .                                   I figlncas .-Act . Prior to the amenctnlei] t . Interstate high-
        FVV'QA has awarded grants to municipalities for th e          cns %ken to be designed to cart% the types and vol-
    const ruction of facilities to brat ! i ' domestic waste s       umes of traffic forecast for the %car 1075 the design
    Only, t2` incusnial v%astcs onl%, and 13 dotncstit an d          ycar _ 'Flit , amendmcut revised the design sear fron t
    industrial wastes . A lark amount of Federal «ran t               197 .E to 211 v c _r s from the date of authorization .
    Itltuis has been a%%arded for the (,)!!Still( lion of !,tt il-       Althou ii the o%cdav pro-eram thus far has bee n
    itics to treat sigttifiruu tlucunities of industrial v%astex .   applied onh to certain segments of the Interstate Svs-
        Although the Congress is atratr of F\\ QA's polic y          tent authorized before enactment of the 1963 umc_nd-
    of awardin, ii-ants to nnruicipalities for tile tioatinen t      ments. there \%ill be a continuing need for periodi c
    of both donustic and industrial tsastcs . it is question -       m crlay of segments of the System - a need that \% i ll in -
    able whether the Con rem intended that =rants b e                crease with the passase of time and with expected in -
    awarded for the construction of facilities for tilt- treat-      creases in v%l-i,llts and volumes of traffic Also . the
    ment of industrial t%astes only ( ;A0 therefore smg-             host of the overta% program v%ill vasty , exceed till-
    gested that the Congress might v%ish to , (lard% it s            amount reputed to the Con<-Iiess in the 1968 estimate .
    intent as to whether Federal grants arc to be awarde d           Of the cost to complete the Interstate S%stem .
    to municipalities for the construction Of facilities t o             Because of the Iona*-term need for overlays an d
    treat industrial wastes only and t 2 ~ consider other al-        the substantial costs invoh- ; d, v%hich vastly exceed the
    ternatiyes to present practices for Imam im the ran =            amount reported to the Congress, and because the in -
    struction of flit ilities for the treatment of both domesti c    tent of the Congress was not clear . GAO suggeste d
    and industrial wastes .                                           that the Crot_eress aright v%sh to express its intent rel-
       It was sungestect also that the Congress might v, ish t o     ati%c to the use of Interstate funds to up,rade cout-
    consider the information in ( :AO's report in v :eti% o f        pleted sepmcnts of the Interstate System . Also, GA O
    proposed water pollution legislation in 1070 nsard-              'm,-,Cstcd that the Cer>_ress might v%ish to consider th e
    ing the financim_= of municipal v%sstc treatment facil-          long-u-1111 need for merla%s in its deliberations on th e
    ities and the prohlem of finam ing industrial pollutio n         funding of the Interstate Svstem, any future expan-
    control .                                                          ions thereof, of am follow-on highway programs ,
       The Department of the Interior concurred its th e               Probletus Resulting from Deterioration of Pavemen t
    need to examine existing policies and to rte%elop nct %          on the Interstate IIi,hwa% S%stem, B-16-1-197, .tune 30 ,
    policies, wherc appropriate . ()it July 2, the Sec-               1971) .
    retary of the Interior issued regulations Whit 11 provid e         11. Opawathonc of they Housr Bengt, Shot .—Dur-
    that no Frtierat tyrant Ina% be made tot att%<<astc treat-       ing the audit of the House Beauty Shop for calenda r
    ment sy,teut designed to treat industrial t%astrs only .         sear 1968 . ( ;AO ste,gested that die Select Committee
    and that, if industrial wastes are to be twau v d in a joint     on the I louse Beaut, ° Shop seek Ic,is'.ation that woul d


provide for a revolting fund in the U .S . Treasury,          Expeditimi-_ D•_yelopnwnt of Niajur Weapon System s
make the Select Committee a permanent commit-                 Satisfactory for Con ;bat Use_ B–163038 . Nov. 17 ,
tee, provide for audits of the Beauty Shop by th e            1969 . )
General Accounting Office, and require surphts fund s            13 . Contractors ' independent re search and deselop-
to be transferred to the general fund of the Treasury .       ntcnt costs horue by the C oz ,c , rttnu ut .—Independen t
   All of these suggestions were adopted in the Legis-        research and detelopment (IR&D` is that part of a
lative Branch Appropriation Act of 1970 , Public Law          contractor's total research and detelopment progra m
91–14:)t which was enacted on December 12 . 1969 .            which is not conducted under it direct contract or
(Audit of the Financial Transactions of the Hous e            grant but is undertaken at the discretion of the con -
Beauty Shop for Calendar Year 1968 . B-1628 :8,               tractor . In certain cases a general agreement is ne ,go-
.lug. 6 . 1969 . )                                            tiated with the Goyernnent establishing a dollar ceil-
   12 . Production- of acapon sptrins dcspitc know n          ing on the cost of IR&D »hick the Government wil l
drfciencit°s in essential component,—Thc :Arms• pur-          accept . Lander policies of the Department of Defens e
chased quantities of the Sheridan . a tank-like weapon            l)OD_ and of the National aeronautics and Spac e
system : _M60AIE1 tank turrets : and M60AIE2 tank s           A(zministration ti NASA) . IR&D need not be relate d
which Mill require substantial mortification before the y     to : urrent or prospcctiye Goycrnment procuretr;ent .
will be fully suitable for operational use . appreciabl e     Under the police of the Atomic Energy Commissio n
quantities were authorised for production despit e               :AEC i , the IR&D cost is allotted only to the exten t
known development deficiencies in essential compo-            that it benChts the contract stork . During !968, major
nents. As a result, mane of these %,eapons ~,eie pu t         Gmerunent contractors spent about $1 .39 billion fa'
into storage instead of bein , added to the comba t            IR&D, bid and proposal, and other technical eflort .
effectiveness of the Array as planned .                        I - lie Goternrnent paid for more than half of thi s
   GAO proposed a series of actions for applicatio n          amount--almost entirely under DOD and NAS A
to current and future detelopment programs to in -            contracts .
crease management effectiveness and w deploy ac-                    GAO made a review at time plant locations of seve n
ceptable weapon systems sooner. The Armt concurred            contr actors and at several Government agencies an d
in most of the proposals and stated that tnaiL~r actitan s    icientificcl a number Of significant problem areas i n
or impro%etnents had been init i ated whidt shoul d           the Goycrnment's participation in IR&D programs .
reduce deficiencies in future program ntan ; ;ement .         Mans of the problems had been recognized for year s
   Several committees and many Alembers of the Con-           but had not been resolved .
gress had expressed a strong interest in ntajcr weapon              Both the Senate and Mouse Committees on Arme d
systems and how their detelopment and procuremen t            Services planned hearings on the subject of IR& D
could be improved . ' ho enable the Congress to exer-         and related costs . In conjunction with the hearings ,
cise appropriate legislative controls over the fundin g       ( ;AO made the following sus gestions for considera-
of major defense systeins . GAO suggested that th e           tion of the Congress .
Congress mac wish to require that ; I determinatio n                   Because no clear distinction can be made bewee n
be made by the Secretary of Defense, prior to author-               IR&D, bid and proposal, and other independen t
izing production of a new system or major modifica-                 technical effort, any agreed ceilings on IR&D ca n
tion of an existin;* system . that all of its siguifican t          be avoided through description of an IR&D projec t
components hate satisfactorily ntet all prescribed de-              tinder a different terminology . Tlierefore, all inde-
velopmental tests and t2 in am- cave where the Sec-                 pendent technical efforts of contractors should be
retary of Defense considers that authorization o f                  considered as a single entity .
production is essential even thougli not all cle%clop-             Unlike the AEC, and NASA, DOD has separate
mental tests ha.e been satisfactorily completed, a              apin-opriatlnns for procurement avid for researc h
certification to that effect be furnished b,, the Secretary     and development activities and DOD's share of con-
of Defense to the appropriate comwressional conunit-            tractors' IR&D costs generally is absorbed by th e
tees—such certification tc, include_ the reasons for au-        procurement appropriation ccithout identification
thorizing concurrent deycloptnent and production an d           as IR&D . If the Congress authorizes continuatio n
the status of development of each significant cotn-             of the present practice of allowing the inclusion o f
ponent . (Need for Management Improyctncnt i q                  IR&D as an acceptable cost element in negotiate d

                                                                              ASSISTANCE TO THE CONGRES S

 contracts . DOD should be directed to break out an d          for IRCD and bid and proposal costs under sectio n
 identify separately in its appropriation requests th e        203 of the DOD MilitalN Procurement Authorizatio n
 amount estimated as required for this Purpose .               act of 1971, Public Lair 91–441, enacted October 7 ,
    The p clicics foliowcd by DOD and NASA o n                  1910, f Allowances for Independent Research and De-
 acceptability of IR&D costs differ from those of :',E C       velopment Costs in Negotiated Contracts--Issues an d
 which allow such costs as an element of overhea d              1lternaLkes . B–16-1912 . Feb . 16, 1970 .
 only to the extent that they provide a direct or in -
 direct benefit to the contract work . A policy shoul d        Actions Taken by the Congress o n
 be established b% the Congress stating the exten t            Recommendations Made in Prior Year s
 to xchich, and under g hat circumstances, Govern-
 ment agencies should participate in the contractors *           1. Goc~cmment '- cowribution_ to the cart of scr ~
 independent technical efforts .                               men's group life insurance .—The Imv authorizing th e
 GAO also identified several issues and alternative s          servicemen's group life insurance program t 38 L .S .C .
                                                               701 provides that members covered by the progra m
which warranted consideration in determining_ th e
                                                               bear the cost of normal mortality claims and that the
Government-wicle pol i cy. as foliows .
                                                               Government bear the cost of mortalities traceable t o
     Whether or not the present practice of allowin ,          the extra hazards of war. GAO's review of this progra m
  IR&D as an acceptable overhead cost in negotiate d           showed that. although the Veterans Administratio n
  contracts should be replaced b\ a stem of                    computed the Government's extra hazard costs in ac-
         tai Extending the use of direct research an d         cordance with the formula prescribed by law, the ap-
     development contracts .o inchtde those IR& D              plication of the formula resulted in serviceme n
     projects which the at*enc y wishes to support f tt p l.   contributing about $ld million during fiscal .ear 196 8
     or on a cost-sharing basis and thereby providin g         for the costs of death claims traceable to the Vietna m
     greater assurance that the desired work will b e          conflict .
     performed and that the Government will be en -               A review of the legislative history of the authorizin g
     titled to information and royalty-free right= to an y     legislation showed that the Congress intended that th e
     im-cations arising therefrom, an d                        Government bear all mortality costs traceable to the
         (b) Authorizing an allowance for a stipulate d        extra hazards of war . GAO therefore recommende d
     percentage of the remainder of the contr actor s
                                                               that, in order to implement the intent of the legisla-
     total IR&D effort, irrespective of the source of
                                                               tion . the Congress consider amendatory le gislatio n
     the funding- either as a profit factor or through
                                                               changing the formula contained in the law .
     acceptance as a recognized overhead cost, as a n
                                                                  On June 25, 1970, Public Law 91–291 was approve d
     incentive to contr actors to continue technica l
     efforts heyond those direcdv contracted with th e         containing a provision to assure that the Governmen t
     Government .                                              will bear all mortality costs traceable to the extra haz-
     Whether or not allowances to contractors fo r             ar(s of war, iLegislation Needed To Avoid Service -
  IR&D should be limited to projects that have a               men's Bearing Wartime Mortality Costs Unde r
  direct and apparent relationship to a specific func-         the Servicemen's Group Life Insurance Program ,
  tion of an agency .                                          B-114859, May 29 . 1969 . )
     Whether or not, if IR&D allowances by DOD an d              2. Compcnsotorp time off in lieu of overtime eonr-
  NASA are continued on the present basis and are              pensation /or ennplo}'ces of the Govemment Printing
  not related directly to current or prospective Govern-       Office .—In August 1966, GAO advised the Publi c
  ment procurement financial support should be pro-            Printer that it was not clear whether there was lega l
  vided to companies with similar capabilities . whic h        authority for the practice of granting compensator y
  do not hold Government contracts, as a means o f             time off in lieu of overtime pay and that he should ob-
  supporting and sti-cmgtheuing industrial tcchnolog~~' .      tain specific authority for this practice, The Public
   These suggestions were considered in hearings hel d         Printer drafted appropriate amendments to tie exist -
in March 1970 before the Senate and Ilouse Comnsit-            : : ,oz law and submitted them to the joint Co-nmittee
tees on armed Services- Subsequ(ntly, the Cannes               nn Printing, but the joint Committee deferree actio n
included restrictions on the pa)Incurs to contractors          until after Title 44, United States Code, "Public Print -


ing and Documents ." was recodified and enacted a s            tion had been made prior to designation of the 1 4
Public Law 90-26 on October 22 . 1968 .                        counties.
    In October 1969, a bill (H .R . 114531 authorizing            The Farmers home Administration contends tha t
the Public Printer to grant an employee paid on an an-         emergency area designations may be made before ap-
nual basis compensatory time off instead of overtim e          plicable Farmers Home Administration funds are ex-
pay for overtime ;cork was introduced in the House o f         hausted and that Congress never contemplated that a
Representatives and referred to the Committee o n              disaster designation should be ayithheld as long as suc h
House Administration . In Max 1970, the bill was re -          funds are available.
ported with a technical amendment and committed t o               GAO found no specific criteria in the enabling leg-
 the Committee of the `,'hole Ilnusc on the State of the       islation or pertinent legislative histrrna indicating th e
 Union . This measure was passed by the Congress an d           intent of the Congress in this matter . It was suggested
enacted as Public Law 91-369 on July 31 . 1970 . (, Ex-         that the Congress might ixish to clarify the lax% regard-
amination of Financial Statements of (_ .oxCinnien t             ng the use of funds in other loan programs before the
 Printing Office, Fiscal Year 1965 . B-1 1 .1829, Aug . 29,    use of emergency loans is approved .
 1966 . )                                                         The Department of Agriculture advised the chair -
                                                                man of the House Committee on Government Opera-
    3 . Economic opportunity program ; .--GAO review s
                                                                tions in \fay 1969 that -'I ) GAO's report correctl y
 of p'ogratns and activities carried out under the ECO -
                                                                showed the Deparunent's position on designatin g
 nomic Opportunity Act of 1961 . made pursuant t o
                                                                erttergency areas aril making 3-percent emergency
 statutory directive included in section 201 of th e
                                                                loans when other program funds arc available and t 2
 Economic Opportunity Amendments of 1967, showe d
                                                                because this has been a longstanding practice withou t
 the need for revisions to provide more effective mean s
                                                                congressional objection . the Department (lid not see a
 to achieve the objectives of the act . Accordingly, GA O
                                                                need for legislation on this matter .
 recommended to the Congress that revisions were
                                                                   GAO continues to believe that since the law o r
 needed in the programs_ and organizations established
                                                                pertinent legislative histon is not sufficiently clear re -
 pursuant to the act . The results of the revieacs . nN Ind-
                                                                ,ardin, the use of funds in other programs befor e
 in g GAO ' s recommendations . were considered hx th e
                                                                en:cr,•crt(v loan funds are used . clarification of exist-
 Congress during hearings leadin<, to the cnacunent o f
                                                                ing legislation is needed . Policies and Procedure s
 the Economic Opportunity Amendmem of 1969, Pub-
                                                                for Recommending Emet_gency Area Desie~tations ,
 lic Taw 91-177, approved Decemher 30. 1969 . Rcyiev,
                                                                B-114873 . Mar. 21 . 1969 . )
 of Economic Opportunit, Programs . B-130515 ,
 Mar. 18, 1969 . )                                               2 . Rc~lieze of politics arad practices for acquirin g
                                                               land for reservoir ptojccts .—The Corps of Engineers
                                                               was acquirin g fee title to thousands of acres of reservoi r
Restatement of Prior Yea r
                                                               project land when less costly flowage easements woul d
Recommendation s                                               have sufficed or axhen no interest was required fo r
   1 . Clari(caliort of laze regarding u, of a : ailabb-       water control purposes . GAO estimated that the addi-
funds under othc-r loan hragroru .~ bt ro?c use of cmer-       tional cost of acquiring fee title to 388 selected tract s
gency loans is approved . A CIAO revicax in 14 coun-           at seven reservoir ptrojeas amounted to about $2 . 7
ties -hich had been designated as emergency areas b% -         trillion .
the Secretary of Agriculttne shooed that 3-percen t                It ,vas recognized that fee acquisition may have bee n
emergenc} loans had been made when substantia l                desirable to satisfy purposes other than water control :
amounts of 5-percent Par*Hers Home Administratio n             however . GAO found that the Corps had not identifie d
operating loan funds were aaaiiahle . Section 321 a :          the additional cost incurred for other project purposes .
of the Consolidated I armors Home Administratio n              mainl recreation and fish and wildlife. 'The Fish an d
Act of 1961 recluires, in part . a determination tha t         X\ ildlife Coordination Act indicates that the Congres s
there exists a general need for agricultural credit K 11(1 1   desires cost information oil land acquired for fish an d
cannot be met from other source,, inc hudir," Mariner s        wildlif=- purposes_ GAO found also that the total cos t
Home :`administration p rogrrms. prior to designatio n         of the land acquired for recreation purposes was pai d
of a county for emergency !(,at) assistance. Ao docu-          for by the Federal Government even though some o f
mentation N .as available to show that this detertnina-        these costs may have been proper]\, financed by non -

                                                                              ASSISTANCE TO THE CONGRES S

Pederal interests under the cost-sharing provisions o f          The Department of the Armv disagreed with these
the Federal Water Project Recreation Act .                    finding's and stated that the policies and practices o f
   Lt response to GAO proposals, the Department of th e       the Corps were in accorclam e scith the policies and in-
Army , stated that information on acreages and approxi-       tentions of both the Coiwicss and the Administration .
mate costs to be incurred for such purposes as recrea-           In GAO's opinion, there has been a deviation fro m
tion and fish and wildlife could be furnished to th e         the provisions of 33 L .S .C . 621 . Therefore . GAO sug-
Congress, if it was desired . With respect to the addi-       Lrested that if the Con_,ress should determine that th e
tional financing which may have been available fro m          Corps' policies and procedures applicable to its dredg-
non-Federal sources, the Department stated that thi s         ing operations were to be continued, consideration b e
ccould tend to decrease recreational development by           gisrn to revisin« or repealing 33 C .S .C . 62-1_ t Need for
local interests and, at some future elate, would caus e       Improving Policies and Procedures for Estimatin g
substantial administrative problems .                         Costs . Evaluating Bids . and Av+aiding Contracts fo r
   GAO suggested that the Congress, in prescribin<v th e      Dredgintr . B-161330, au,, . 7, 1967 . 1
nature and extent of reservoir project purposes, migh t         d . Questionable statutot_v inttrprctation by ED A
wish to require that the Corps identify, for congres-         as basis for auarding certain grants .--The Public
sional consideration . the costs incurred in acquirin g       Works and Economic Development Act of 1965, as
greater interests in land than are needed for wate r          amended i-12 U .S .C- 3121 , authorizes a loan an d
control purposes, the purposes for which such inter-          ,, rants program to provide financial assistance to State s
ests are acquired, the related acreages, and the bene-        and other entities for public works and related facilities .
fits to be derived from such interests . It was also          Basic grants up to 50 percent of project costs and sup-
suggested that the Congress mi<_,ht wish to express it s       plemcntars grants that do notincrease the total Federa l
intent as to whether the additional costs incurred fo r       contribution beyond 80 percent of project costs ar e
 recreation and fish and wildlife purposes should b e          authorized . Section 101!,"c` of the act requires that, i n
treated as separable costs and be subject to cost shar-       determining the amount of any supplementary- grant ,
ing under the Federal Water Project Recreation Act .           the Economic Development Administ ration {_EDA1 ,
 (Review of Policies and Practices for Acquiring Lan d         Department of Commerce, consider the relative need s
for Resen-oir Projects . B-11863-1, Feb . 3, 1969 .            of the area . the nature of the project, and the revenue s
  3 . Policies and procedures used in estimating vest, ,       which the project --(,aid be expected to generate i n
evaluating bids, and aawdin,, contracts for dredg-             excess of those which amortize the local share of initia l
ing.     "Tlle law under which the Corps of Engineer s         costs and provide for its successful operation and main-
awards contracts for dredging_ i33 U .S .C, 62-1 stip-         tenance t including depreciation ; .
ulates that appropriated funds shalt not be used to pa y           Ahhoumh FDA's establ'shed policy requires consid-
for an\ %.work done by contract if the contract pric e         eration of project revenues in determining th e
is more than 25 percent in excess of the estimate d            amount of a grant supplementan} to a basic grant b y
cost of the Government's doing the work with its ow n          EDA- it did not require consideration of project rev-
equipment and crews .                                          enues where the basic grant was by another Federa l
   The Corps has taken the position that it is not re-         agency and the combined grants would not exceed 5 0
quired to prepare in-house estimates unless a Govern-          percent of project cost. Consideration of revenue dat a
uunt plant is or wi l l be available to do the dredging.       for three such projects included in the 18 project s
Instead, the Corps awards contracts for dredging t o           GAO reviewed indicated that, during a 30-4ear period,
the con t ractor %%ho-se bid price is lour and is not more     net revenues of about $4 .6 million could reasonabl y
than 25 percent in excess of the Corps estimate of fai r       have been expected to be available to support loan s
and reasonable cost to a contractor, exclusive of profit .     in lieu of the $363,200 supplementary grant assistanc e
GAO examination of 32 dredging contracts showe d               approved for the projects .
that, based on GAO's estimates of in-house cost, 1 I o f           Because of the impact of the EDA policy on amount s
the contracts were awarded at prices that were abou t          of grant assistance provided to applicants and in th e
$2 .1 million in excess of the statutory limitation an d       interest of providing ihtancial assistance to as man y
about $4 .4 million in excess of the costs that would hav e     neody projects as possible . GAO suggested that the
been incurred if the work had been done by the Corp s           Congress mielu wish to express its views as to wlucthe r
itself .                                                        EDA should consider project rc-renues when an EDA

grant supplementary to a basic grant by another Fed-             tional information to correct er amend their initia l
eral a,encv does not result in the total Federal gran t          income tax returns accrue from the dates the claims ar e
contributions exceeding 50 percent of project costs .            filed. except that IRS be authorized to establish a rea-
(Improvements Needed In Procedures for Determin-                 sonable period after such claims are filed within whic h
ing Supplementary Grant Assistance for Public Work s             interest-free refunds may be made . It was suggeste d
and Developmentl= aciliy Projects . 11-153-1-19 . Feb . -f,      that, if the Code were changed in this regard, the Con-
1969 . )                                                         gress might also %%ish to consider making the chanc e
                                                                 applicable to excise, cinplotiment, and estate tax re -
 5 . Opportunities for reducing interest costs to th e
                                                                 funds . ( Proposed Recision to the Internal Itccenuc
Government on certain Iypcs of Federal income tai,
                                                                 Code Goyernim_ Interest Pa ,.wents on Certain Type s
refunds .—Under the Internal Revenue Code of 1951 ,
                                                                 of Federal Income Tax Refunds . B-137762, Sept . 19 ,
taxpayers who claim refunds by correction of o r
amendment to their income tax returns receive a con-
sideration, in the form of interest at the rate of 6               6 . Op lwtunities for reducing interest costs on ic-
percent, not accorded to taxpayers who claim refunds             funds att-°butablr to net operating loss deductions .
at the time they file their returns .                             bile Intct .h, l Revenue Code of 1954 permits taxpacer s
    For refunds claimed on initial returns, interest i s         to offset net )perating business losses of a current ta x
not allowed if the refunds are paid within 45 day s              sear against a prior years taxable incom- and thereb y
following the due date for filing the return or the elat e       receive a tax refund . Interest au these refunds is pai d
the return is actuaily filed . iyhicheser is later. For thos e   by the Government at the rate of 6 percent, eonaruenc-
refunds claimed by correction of or amendment in te-             ing on the first day following the close of the Near i n
turns .. interest usually accrues for the period from th e       which the business loss occurred . Also, there is n o
prescribed due date for filing the remit until the re -          interest-free period allowed the ( ;mernn :ent withi n
 fund is certified for payment . Returns may be correcte d       which to process refunds attributable to net operatin g
or amended up to 3 Fears after tile% are ,squired to be          loss deductions . Therefore, taxpayers ayho delay filin g
 filed .                                                         claims for refunds for periods up to 3 sears receive in-
    GAO suggested a change in the Internal Revenu e               terest for the entire period . Interest paid on all refunds
 Code to provide that interest on refunds resulting frot h        attributable to net operating loss deductions durint,
 taxpayers furnishing additional information to correc t          fiscal sear 1961 was estimated to total about $2 8
 or amend their initial income tax returns accrue fro m           mullion .
 the dates the claims for such refunds are filed and tha t           GAO sub=«ested that the Congress nail*ht wish to con -
 the Internal Revenue Service 1IRSt be authorized t o             sidec anhcndint_, the Code to prcyide that interest on
 establish a reasonable period after such claims are file d       refunds resultins from net operatim, loss carryback de-
 within which interest-free refunds mac be made . Th e            ductions begin front the date that applications or claim s
 Treasur% Department disagreed primarily on the basi s
                                                                  for such refunds are filed instead of from the date fol-
 that the Congress has recognized that interest shoul d
                                                                  kmin_ the close of the taxable year in which the ne t
 be paid because the Government has had use of th e
                                                                  ctperatin_- lox, occurs, except that the Internal Revenu e
 taxpayers money . Also, the Department believed that ,
 if this proposal \sere adopted, similar le«islation migh t       Service be authorized to establish a reasonable perio d
 be required which would make it unnecessary for tax -            after applications or claims are filed vyithin whic h
 payers to pad° interest on tax deficiencies until the ex-        interest-free refunds may be made . "Phis change woul d
 piration of a reasonable period after being notified o f         he consistent with current provisions which allow th e
 the deficiency . GAO did not agree a+ith the Depart-             ( ;mcnintent an interest-free period within which t o
 ment because the Congress had previously made vari-              process ordinar% refund payments . The Assistant Set -
 ous changes in the Code to provide that interest no t            Mary of the Treasall foi- Tax Policy stated that th e
 be alloyed on certain refunds ashen justified by existin g       Treasury %vas prepared to support ie_islati .m to carr y
 circumstances even though the Government had use o f             out this proposal.
 the taxpayers' mone y durin the retention period .                  GAO suggested that the Congress aright also s, kh t o
     GAO su ggested that the Cnngres, might wish t o              consider similarly unending statutory provisions con-
  consider antendit,g the Code to provide that interes t          cernim-, interest pa}mcnts on refunds attributable t o
 on refunds resulting from taxpacers` furnishing addi-            in%csUnrnt credit carechacks, foreign credit cart~backs ,


                                                                                      ASSISTANCE TO THE CONGRES S

    and unux•d deductions of life insurance c~onnpanies .                9. Audit of the Fedc ral Deposit Inmiloic e C'ortiora-
    (Opportu nities for Redutinu Inten•st Casts on Re -               tion on a c alciular }rat i>asic . ---GAO has recommende d
    funds Attributable to \et Operatilw~ Loss 1 )educ tions -         in several annual reports on its audits of the Federa l
    B 137762, fay 26 . 196 7                                          Deposit Insurance Corporation (FDIC' that sectio n
                                                                      I ; c of the Federal Deposit Insurance act b e
       7. Proposed rc ; i,ico of late : :o .         frnmtcin,, o f
                                                                      amended u, n egture that GAO audits of FDIC be mad e
    ,alai: cost ; of I, tin d , it ~, ? : i, c awmitant, it, ,

                                                                      on a calendar wear basis rather than on a fiscal yea r
             btt Fcrlcral a~~e ncic   GAO recommended tha t
                                                                      hay s as provided in the act . Adoption of this recom-
    the Comics, consider atuendim, the• I )!,-)% i,ioll of ill( '
                                                                      meuclatior vwould eliminate the inconsistency betwee n
    civil sei6ce retirement law relatius to the pacntent o f
                                                                      till, periods covered by GAO's audit reports and b y
    annuities and salaries to reemployed retired employee s
                                                                       1 DI( :'s aunuat reports . (Audit of Federal Deposi t
     15 t .c ( : . V-11 to provide that arnounts equivalent t o
                                                                       fnsurance Corporation for the Year Failed June N .

    the annuities allocable to the period of actual emplow-
                                                                       I l l6', . R- 11-183':_ Afar . 19 . 197 0
    meot, vwhich are deducted horn reemployed retire d
    cmplo}ces' salaries, be transferred by the eriployirzt •             10. Propood wpeal of nquirentcnt that the Contp-
    Federal azemies to the Civil Seryicc Retirement an d              trollcr General make an annual audit of tltc Genera l
    Disability Fund .                                                 Subbh' Fund .—GAO submitted for the consideration
       _Amending, the civil scryice retirement latw as pro -          of the Congress a le,,islatke proposal recoil] mendirn -l
    posed vwoulcl result in the full salary costs of rcemploNe d      that section : 109fe of the Federal Property and Ad-
    annuitants bein financed by the ennp1m im, agencie s              ministratiyc- Services Act of 1949 be amended to dis-
    rather than a portion of such cost, beine lin .utccd b y          continue the specific statutor\ requirement that th e
     the retirement fund . Proposed Recision of Lary Gov-             Comptroller Geucral make an annual audit of th e
    erning Financin« of Salan Costs of Retired Civil Sety-            C=cneral Supply Fund .
     ice Annuitants Reemployed by Federal :Agencies .                    It is believed that the Accounting and Auditing Ac t
     11-1301,50 . ASac 28 . 11968 . ,                                 of 1950 and the Bud,et and Accountiue Act . 1921 ,
                                                                      provide ample authority for the General Accountin g
      8. Cost of proridia~, retirement, disability, and coni-
                                                                      Office to ru6c w the General Suppl } Fund when de-
    pcnsation bc,tefits for Fcdcral Dcpocit In,uiancc Cor-
                                                                      wimined necessary or when requested to do so by the
    poration enrplotcrs .--The Federai Deposit Insuranc e
                                                                      Congress. In the absence of the specific audit require-
    Corporation (FDIC! is required to contribute to th e
                                                                      ments of the 19-19 s.ct . GAO would have the sam e
    Civil Service Retirement and Disability Fund on sal-
                                                                      freedom of choice under the broad ~eneral audit au-
    aries paid to its employees after June 30, 1957 . Fiotw-
                                                                      therith' given to it under the 1950 and 1921 acts i n
    cyer, the law flocs not requim FDIC to pay into th c              selecting the period and scope of financial rcyie,ws tha t
    fund the GoyernnlenCS shwc of the cost of providin g              it ltas in other areas un the General Services Adminis-
    retirement and disabilit benefits for FDIC c-tnployees            tration and in other a, envies in general .
    from the creation of the Corporation through June "M .                A bill . S . 1767 . that ~would implement the recom-
    1957 . Renter does the latw require the Corporation t o            ntrndation was introduced in the Senate in May 1967 ,
    snake any pa~i ients into the employers ' ccmtpcnsatio n          but no further action was taken prior to the close o f
    fund nor to hear any portion cif the cost of administcr-           the 90th Cougress . At Jane 3Q 1910, similar bill ha d
    ing the civil service retirement, vstem; or the Eniploy-          not teen introduced it : the9lstCotgress.
    ees Compensation Fund .                                              11. A'reel to clarify!ntcrrt as to tchethci contpctitiu c
       (=aO has recommended in several annual audit re -              nr!,atiati~%n rc quire°rnc!rtr apply to the negotiation o f
    ports that the Federal Deposit Laurance All h e                   architect-rr gin, , i contracts .—In April 1967 GAO rc-
    amended to require FDIC to pad m ,flan of tile afio\ c            portcd to the Conk ress that in contracting for amhitect-
    costs. GAO belie vcs that adoption of the recortunerrda-          engincer servi(o~ the major Federal constructio n
    tion would result ill a stole equitable ,Vocation of th e         m -, encics 4werc soliciting proposals only from th e
    cost of retirement . disahilit', and conr)tnsation hene-          arcliitec t-engineer firm selected on the basis of variou s
    fits bet,wecn the Federal Governor , ni and FDIC -                qualifications and without consideration of price .
     (Audit of Federal Deposit Insnr .oue C :orpoaticzn fot           Public Lm 87-653 requires that, in all negotiated
    the Year Ended June 30 . 1960 .. R-1118 :11 . M,u' . 19 ,         procurements ill excess of x;2,500, proposals he solicited
     1970 .'                                                          from the maxinutm muuher of qualified sources an d


that discussions be conducted with all responsible of-        procurement statute and the Federal Property and Ad-
ferors whose proposals are within a c'ompetitiyc range ,      rninistratiFe Services Act of 1949 impose the 6-percen t
price and other factors considered .                          fee limitation on all architect-engineer services, in-
   In GAO ' s opinion, the procurement of architect -         cluding such services as soil borings . supen'ision and in-
engineer services was and should be subject to th e           spection of construction, master planning, and th e
competitive negotiation requirements of Public Lai n          preparation of technical operating and maintenanc e
87–653 . GAO suggested that I l ? in view of past ad-         manuals, as well as the production of designs, plats,
ministrative practices in the procurement of such serv-       drawings, and specifications .
ices, it was important that the Congress clarify it s             Also, in GAO's opinion . the present statutory fe e
intent as to whether the competitive negotiation re-          limitation is impractical and unsound principally be -
quirements of the law are to apply to such procure-           cause ~ I the limitation is governed by estimated con-
ments and (2i if tilt , Congress determined that it %% a s    struction costs which do not necessarily relate to th e
not so intended . the law should be aincnde_d to spec if-     value of the architect-engineer services rendered . (2 .
icalh- provide for an exemption for this type o f             estimated construction costs may not he known at th e
procurement .                                                  time the limitation must be applied, !3some archi-
   Bills were introduced in the 91st Congress which .          tect-engineer contracts do not involve prograun ue d
if enacted into lane . would have the effect of exempting      construction project ., (i         the limitation mac be
procuu-e : :,ems of architect-en<gincer services from th e     partially avoided by alrencies hayine their in-house re-
cot,petitive nc% otiation requirements of Public La w         sources perform services that have generally been con-
87–653 and the Federal Procurement Regulations g ri d          tracted to architect-en6ricer firms, and (5) architect-
would letalize present practices of the agencies .            et,_,ineer fees in terms of percentages of constructio n
   I I .R . 164-13 was one such bill and, on June 4, 1970 ,    cost care wideh and thus render impracticable th e
the Comptroller General testified before the Subcom-          establishment of a percentage at an appropriate leve l
mittee on Government Activities . house Committee Oi l         to elfectiyely limit the fee for the majority of contracts.
Gove_rument Operations. in connection \, ill) its hearing         The present requirements forronipetitive negotiatio n
on that hill . On September 10, 1970, the committe e           and the submission and certification of cost or pricit ;,r
reported the hill favorably .                                 data, if properly applied to contracts for architect -
   There was included in Public Law 111-511 . tin e            engineer services, should provide adequate assuranc e
Military Construction AnlhorlZation Act, 1971, -i t ) -        of reasonable fees . Therefore, CIAO recommended tha t
proved October 26, 1970, a provision which requires            the Congress repeal the 6-percent limitation imposed
the military sen-iccs to continue awa chm-, contract s         on architect-engineer fees by 10 V .S .C . 2306(4) . 4540 ,
for architect-engineer sen-ices "in accordance wit h           7212, anc1. 9540 and by section 30411 , ' of the Federa l
presenth, established procedures, customs, and prac-           Property and Administrative Services Act of 1949, a s
tice ." =Government-wide Review of the Adminis[ra-             amended . 11 U .S .C : . 251t'b) ) . A bill to implement this
tion of Certain Statutory and Regulator y_ Require-            recommendation . S . 20391 . 90th Congress . was intro-
ments Relating, to Architect-Engineer Fees . B-152306 ,        duced in July 1967 but was not acted upon . At June 30 _
Apr . 20, 1967 . '                                              1970, a similar hill had not been introduced in the
                                                               91st C.onnress . In May 1970 GAO proposed a bil l
   12 . Repeal of prcicat strttc,inrp leC limitation c n
                                                               which, if enacted into law. vyould repeal the cited 6 -
archi-'cct ngircer       - - [liemajorconitrt ;ctionagen-
                                                                percent limitation . Govenunent-scid~r Review of th e
cies were contracting for irch ; tecbem incei ~cry ices at
                                                               .Administration of C.ereain Statutory and Re,ulator y
fees in excess of the statutory provisions which limi t
                                                                Requirements R,latims to Architect-l-m-ineer Fees, B –
the fees payable to architect-engineers to 5 Percent o f        152306, Apr . 20, 1967 . ?
the estimated cost of construction . Generally, these
agencies interpreted the limitation as apply ing only t o
                                                              Legislative Proposals to Heads o f
that portion of the total lee relating to the productio n
                                                              Departments or Agencie s
and delivery of desi~ms, plans - drawirves, and specifi-
cations . Under such interpretation, rno?t of the archi-         1 . Propotcd Chanty in nnaneing Bureau of the Min t
tect-engineer contracts under wiucli the total le e           of), radiolm– GAO suggested that the Secretary of th e
exceeded 6 percent would be in compliance with th e           Treasure propose to the Coiwress that a change h e
limitations . In ( : :AO's OlMlion, hov%VVCr, the militar\    made in the method of financing the oper =ations of

                                                                             ASSISTANCE YQ THE CONGRES S
the Bureau of the Mint which would permit greate r            the Bureau's Operations . Although a bill which woul d
flexibility in planning: coin nranufaenuine operation s       have chan lged the method of financing was introduce d
and simplify financing procedures . It was suggested also     in 1967, it was not enacted into law . (Financia l
that the proposal pror ide for afFnmratis e c onereasiona l   Management of Bureau of the Mint Operations Needs
action normahy associated with the appropriatio n             Improvement. 8-114877, Jan. 16, 1970 . )
process .                                                       2 . Need to revise fees for serzices provided by US .
   The Department recognized the need for improved            marvhalr . -- GAO estimated that the fees chareed b y
financing of the Bureau's operations but heiiececl tha t       U .S . marshals durigg lisral }'car 1968 for serving pt'oc-
it should defer Submitting an%- le islative proposal Oi l      esses for private litigants were insufficient by :abou t
the matter until the new Director of the 'flint had Ita d     S-170 .006 to recover costs . :A recommendat[on was mad e
an opportunity to rcyiew the etltire Bureau operation ,       that the Departrmnt of Justice consider proposing t o
and until several proposed changes in the coina,-o lase s      the Conuress legislat i on authorizing administrative ad-
and other acts atlecting_ the Bureau's operations had         jusUnent Ot- nra .shals' lee, or revising the fees . whic h
been enacted .                                                are presenth , prescr ibed by late . -Need to Revise Fees
   GAO ha .l recommended in a 1959 report on its audi t       for 5crvices provided I)% the L .mi_ranon and Nat-
             of the Mint operations that the C111,1 1-es s    uralization Service and U .S . arshals . 8-125051 .
consider making it change in the method of financing          Oct . 7 . 1969 .

                                                                              ASSISTANCE TO TFiE AGENCIE S

                                                             priations Committee has been conducting an investi-
                                                             gation and stud}• of the usefulness and relative acc urac y
                                                             of accrual accounting as a Government-wide require-
                                                             ment and the cost of char ins, expenditure recordin g
                                                             anc; reljoiting s}'sterols to the accrual basis.
                                                                The cpuunittee's action reflects its expressed concer n
                                                             that points of diminishing return be recognized i n
                                                             applvine the accival and cost accounting provisions o f
                                                             the I3udeet anc] accounting Procedures Act of 1950 ,
                                                             as amended, to individual agencies and activities . I n
                                                             recosmition of the validity of that view- and of th e
                                                             committee's concern, during the year, GAO published ,
                                                             in pamphlet form, answers in layman's language t o
CHAPTER THRE E                                               questions frequently asked about accrual aecountincr
                                                             in the Federal Government . That document, in addi-
                                                             tion to stating the basic purposes of accrual account -
                                                                   ill more easily understood and practical terms, i s
                                                             ,eared to the current types of programs and thei r
                                                             attendant to magement problems . It was distributed
ASSISTANCE IN IMPROVIN G                                     to interested congressional committees and d-part-
                                                             tuents artd agencies in August 1970 .
AGENCY MANAGEMEN T                                               Related to the committee'; Concern that optimum
PRACTICES                                                    use he trade of GAO' s limned manpower resou rces,
                                                              GAO consolidated in a single staff unit the function s
                                                              of cooperating with agencies in the development an d
Summary of Assistance Provided                                approval of their accovAiting systems, and has limite d
                                                              such approvals to ,ta , cnicnts of principles and stand-
   Ali important part of the cork of the Genera l
                                                              ards and to s1"stems designs .
Accounting Office is providing assistance to the -u en-
                                                                 GAO reported to the Congress in March 1970 tha t
cies of the Government in bringing about greate r
cffecttrcncss; efiicieucy . and ecotatmv in tile C01ldUc t    it had identified a nuutber of problems in the imple-
of their programs and activities. This chapter describe s     mentation of the wcou-iting system for operations i n
GAO's worl, i l l in a,sisting a fencies in establishin g     the Department of Defense and was making specifi c
and maintaining their financial management infoinla-          reconuncnd :it ions to the Secretary of Defense for cor-
tion systems and improving their related nrana,eroen t        rection . 'I'liat review and report were matte in com-
practices and (,2) in certain other mana gement atc is .      pliance with the direction of the Conference Repor t
Further assistance to management is discussed i n             of iuly' 1, 1968 . of the House and Senate Committee s
Chapters Four through Six with regard to GAO' s find-         on Appropriations (H . Rcpt . 1608, 90th Cong,) tha t
ings and recc_tnmendations for corrective action result-      ( ;A( ) continue to stork with the Department in imple-
ing from its auditcyork and ill Chapters Seven throug h       nunting. the system and inform the committees of th e
Niue t+ith rc,gard to GAO assistance in the areas o f         results of those efforts. See :appendix, Section I ,
teanspoitatiol- claims, and legal services . Assistance to     Item li) . )
the Congress on its internal accounting and financia l           In Septeniher 1969 GAO issued its first annual repor t
management is discussed in Chapter Two .
                                                               to the Congress su nniarizing its findings on problems
                                                              and progress relating to improvements of Federa l
Congressional Interest i n                                     agency accountin g systems 'luring calendar year 1968.
                                                                See Appendix, Section I, Item 14.1 .`-. This annua l
Financial Management
                                                              report was recommended by the House Governmen t
  As out outgrowth of t leneral Accounting Office fiva l      Operations ('onuuittec in its repo r t dated 'March 5.
year 1970 appropriation hearings ; the House Appro-            1968 (If . Rcpt . 1159, 901,11 Cong.) .


Assistance in Improvin g                                     Comptroller General was issued on June 30, 1965, as
Financial Managemen t                                        Title 2 of the General Accounting Office Policy and
                                                             Procedures Manual for Guidance of Federal Agen-
   Federal programs continue to grow and proliferate ;       cies, and was amended in 1967 . That restatement was
the), are markedby increasing concern with humanisti c       again amended in July 1968 :
and environmental problems in addition to defens e               To restate the objectives of the joint Financia l
needs and international commitments. The size, di-             Management Improvement Program .
versity, and complexities of these programs ; the in-             To clarify the prescribed accounting principles
volvement of State and local governments and privat e          and standards to harmonize with the recommenda-
institutions ; and the human and material resources            tions of the President ' s Commission on Budge t
committed to them accentuate and vastly expand the             Concepts Ncith respect to accrued revenues and ex-
need for inananeulent information . Mere is a con-             penditures, implementing instructions for which ar c
comitant expansion of the need for sophisticate d              contained in Bureau of the Budget Bulletin No .
means, such as electr onic, equipment, of gathering.           68--10 dated April 26, 1968 .
assessing, screening, and reporting such information .            To provide for a three-stale development and ap-
   These considerations are especially important in th e       proval procedure for agency accounting systems .
financial management area, with a consequent critica l          At the present time, Chapter 3—Review and Ap-
impact in the form of novel and often intangible factors     proval of Agency Accounting Systems—of Title 2 o f
oil the need for and value of sound and fuhy respon-         the GAO Manual is being revised to reflect the actio n
sive accounting systems and effective internal controls      taken in October 1969 (see page 37) to limit the per-
including internal audits.                                   formance of GAO's statutory responsibility for ap-
   Sound budgeting and accounting provide more dis-          proving agency accounting systems to approval o f
ciplined planning and control over tile mana gemen t         agency principles and standards and s\'stenu designs .
of resources and better information for managers re-         The sections of that chapter concerned with agenc y
garding the results attained in relation to those planne d   accounting principles and standards, systems design ,
and the agencies' purposes; through the. expenditur e        and the approval process are being amplified to assis t
of those resources . While it is not possible, therefore ,   the agencies ill developing acceptable submissions fo r
 to directly measure dollar savings att•ibutalAc to soun d   approval.
accounting- systems, enlightened use of such systems i s        The improved guidance in these revisions will mate-
a significant contribution to the conservation of re -       rially assist agencies in developing adequate principle s
sources ill the form of either actual reduced expendi-       and standards and systems designs and thus shoul d
tures or optimum accomplishment .                            permit more timeh• approval of their submissions. I t
                                                             also will provide a better foundation, where the syste m
                                                             concept envisages computerization, for the concurrent,
Prescribing Accountin g                                      orderly consideration of automatic data processin g
Principles and Standard s
                                                             aspects throughout all stages of systems developmen t
   Ali important accounting responsibility assigned to       and implementation .
GAO by law is the prescribing of accounting p rinciple s
and standards to be followed by the executive agencie s
in establishing and maintaining their accounting sys-
                                                             Accounting Recommendations of
                                                             the President's Commissio n
tems. The first comprehensive statement of these prin -
ciples and standards, issued in accordance with thi s        on budget Concepts '
requirement, was released in 1952 .
                                                                The President's Commission oil Budget Concepts
   The establishment of accounting principles an d
                                                             recommended that budget expenditures and receipt s
stanchuds isnot a one-tune action : revisions and addi-
                                                             be reported oil an accrual basis instead of the cas h
tions must be made from time to time to reflect bene-
                                                             basis. Specific instructions to the executive agencies fo r
fitsgained from experience, evolution in financia l
mana± ement concepts, and the requirements of liewly         implementing the Commission's recommendations hav e
enacted legislation . A conmplete restatement of the ac-
                                                                  Rvlwrt nr the Freslilvnt     C . nimisxlon on Budget Concepts,
countirg_ principles and standards prescribed by th e        U .s- t.overiinent eviutlrg ottice,   wn ldtitztoti, D.C ., Oetolivr 14117 .
3€                                                                                                                                          1
                                                                              ASSISTANCE To THE AGENCIE S

been issued by the Bureau of the Budget (note th e            to use a cost-based presentation for appropriatio n
Office of Management and Budget) and the Depart-              requests.
nneint of the Treasury . Necessary refinements have als o        In addition to its work on the above matters wit h
been made in the principles and standards of account-         the Bureau of the Budget and the "Treasury Depart-
ing for federal agencies prescribed by the Genera l           ment. GAO redirected and expanded its ongoing sur-
Accounting Office .                                           vey of documented accrued expenditure accounting i n
   Special study reports on problem areas in convertin g      the Department of Defense to a survey of accounting
to the accrual accounting basis disclosed a wide rang e       for and reporting on accrued revenues and expendi-
of major- problems in accounting for (t) certain tax          tures for nongrant programs in the Department of De-
revenues, (2) performance raider grants-in-aid to an d        fense and in a number of the larger civil agencies . A
contracts with State and local gov~er nients and insti-       study of the significance of the variations between dis-
 tntions . and (3) constructive delivery on procurement s     bursements and accrued expenditures for selected
 to the Governments special order . Consequently, th e        grants to State and local governments and universities
Bureau of the Budget, with GAO 's concurrence an d            was also begun in furtherance of a commitment to th e
that of the Treasury Department, directed that th e           Director, Bureau of the Budget, and the Secretary of
 data in the fiscal year 1972 budget will be on a modified    the Treasury.
 basis, the modifications being as follows :
     Budget revenues ( "governmental receipts ' ) wil l       Cooperative Work in the Developmen t
   remain on a cash basis .                                   of Accounting Systems
     Grant-in-aid expenditures will remain on a cas h
                                                                 There are scores of agencies, hundreds of programs ,
   basis. Unless othenvise specified, the coverage of thi s
   modification is that of `fable- 0–8) in Specia l           thousands of geographic locations, and a wide variety
   Aural-+ses, Bualget of the United Slates, 1971 .           of activities for which improved accounting must be
      Where accrual data for constructive delivery o n        accomplished . Some agencies and programs are rela-
   procurement of made-to-order items are not avail -         tively small and not too complex ; others are extremely
   able, or are only partially available, the expenditure s   large and are very complex . Some involv e many larg e
   for such items will not be on the full accrual basis ,     contract operations with industry, universities, an d
   but will reflect as much of the accruals as i s            others . Others involve substantial programs with Stat e
   practicable .                                              and local governments, universities, and nonprofit or-
   Agencies experiencing difficulties in achieving ac-        ganizations. Appropriate coordination of these inter -
ceptable standards of reliability and timeliness in th e      locking operations is a task of some magnitude for th e
constructive delivery area (beyond the customary docn -       larger agencies involved .
nnentation of work in place on construction contracts ,          Based on a comprehensive reconsideration of it s
progress payments, holdbacks, etc .') may, with th e          policies and practices with respect to the development ,
specific approval of the Bureau, delay to another yea r       review, and approval of executive agency accountin g
the accounting and reporting - of arch data for selecte d     systems,. GAO made the following changes, in Octo-
areas of operation e .g., appropriations or po r tions o f    ber 1969, to increase the effectiveness . of these
appropriations) or selected types of transactions (e .g. ,    operations :
subcontractor performance), where necessary .
                                                                   Formal approval operations will be limited to th e
   Where inclusion of accruals in the accounting an d
reporting- is deferred in the budget revenues, grants -          two stages of (a) agency statements of principle s
in-aid, or constructive delivery areas, agencies ar e            and standards established to govern their accounting
 urged to concentrate on assuring that all nondeferre d          systems and (b) the proposed general designs o f
aspects of their accrual system are made to functio n            those systems . GAO will no longer undertake to
properly and that efforts be continued to fully achiev e         formally approve accounting systems in actua l
the accrual basis in the deferred areas in order to              operation .
obviate modifications and exceptions beyond the 197 2               In lieu of for mally approving accounting system s
budget . Firrir accounting suppo r t should be provided          in operation, GAO will devote more effort to con -
for accrual data through reliable, sound, and tinnela -          ducting reviews of agency accounting operation s
accrual accounting. All agencies also are now required           from time to time, as now required by law, and wil l



      provide reports to agency officials and to the Con-          operation . If GAO finds that the system is not bein g
      gress setting forth evaluationsand recommendations .         implemented as planned or has been adversely modi-
                                                                   fied, then cooperative action is taken with the agenc y
       To accomplish these changes, dur ing the year GA O
                                                                   to make the needed corrections.
    consolidated in the Financial Management Staff of it s
                                                                        During the fiscal year 1970, the Department of De-
    Office of Policy and Special Studies all the responsibil-
                                                                   fense submitted for approval one additional directiv e
    ity for (1) developin g GAO principles and standard s
                                                                   and instruction setting forth accounting principles and
    and related requirements, (2) cooperating with th e
    executive agencies in the development of their account-        standards and one accounting system se'ment . Mecha-
    ing systems, and (3) reviewing agency statements o f           nization of Contract Administration Services, making
    accounting principles and standards and proposed ac -          a total of 19 submissions for consideration during th e
                                                                   year .
    counting systems designs for formal approval .
       Under these new arrangements GAO has continue d                  GAO approved II Department of Defense direc-
                                                                   tives and instructions in implementation of the systems
    to devote a substantial amount of manpower to th e
                                                                   of accounting for military pay, real property, foreig n
    field of financial management, including cooperativ e
     assistance to the executive agencies in the developmen t      sales . research and development, industrial funds, ma-
                                                                   terial pricing, property disposal, and project orders .
    of improved accounting systems and procedures . Sinc e
     the change, an increasing proportion of its effort ha s       Also approved were two complete systems designs, th e
    been devoted to the development and review of ac -             Air Force and \N ary accounting systems for militar y
                                                                   construction . In addition, GAO approved three in-
    counting systems designs based on approval of state-
                                                                   dustrial full([ accounting system segment designs fo r
    nients of principles and standards that set the stag e
                                                                    the :fir Force Printing and Duplicating Service ; the
     for the detailed systems design and improvement effor t
                                                                   Army Watervliet Arsenal, which is typical of simila r
     in each agency .
                                                                    types of Army industrial funds ; and the Naval Ord-
        GAO's manpower has been working with agenc y
                                                                    nance System Command . 'File two complete system s
     officials and staffs so that, with technical assistance        designs, three segment designs, and 11 d; rectives an d
     and advice, the agencies may proceed to develop fi-            instructions made a total of 16 approval actions . At the
     nancial management systems that are designed i n               close of the Fear three submissions were under con-
     accordance with the concepts of the Budget and Ac -            sideration, as well as a directive, an instruction, an d
     counting Procedures Act and that meet the needs of             an accounting system segment design .
     the operating and central agencies of Government . I n             The agreement recently made with the Departmen t
     this cooperative work, GAO keeps informed as to what           of Defense on the supporting_ documentation to be sub -
     each agency is doing and what problems it is cocotu-           mitred, when adjusted to GAO's revised approva l
     tering in order that a conunon understanding may b e           operations, should facilitate this approval work by fm -
     reached as to the concepts and principles to be em-            proving tile_ documentation of systems designs at the
     ployed . GAO ' s purpose is to be as helpful as possibl e      service and Office of the Secretary of -Defense levels
     without assurning agency rihanagement responsibili-             prior to submission .                                           -
     ties . The head of each executive agency has the statu-             The potential number of complete accounting sys-
     tory responsibility for establishing and maintainin g           tems and segments of systems irl use in Department o f
     adequate accounting and financial managemcn t                   Defense activities which may require evaluation fo r
     systems .                                                       conformance with the principles and standards estab-
                                                                     lished by the Comptroller General has not been specif-
                                                                     ically ascertained by the Department . However, th e
    Review and _ Approval o f
                                                                     Department has indicated that approximately 30 dif-
    Accounting Principles and Standard s
                                                                      ferent types of industrial fund accounting systems wil l
    and Proposed Systems Design s
                                                                     be submitted, as well as other systems applicable t o
         After approval of systems designs, GAO has a con-            such areas as procurement, research and development ,
      tinuing responsibility to follow up on the timely im-          operations, and stock funds .
      plenientation of systems designs as approved and to                t .> .-10's review and approval activities for the civi l
      provide consultative assistance in regard to design re -        and international departments and agencies durin g
    'fincinents incident to the installation of the systems fo r      fiscal year 1970 are summarized as follows :


                                                                                                      ASSISTANCE TO THE AGENCIE S
                   q•                                    CrlAftni,e Jtaj,~n.e
                                                                            -- -        and assistance to agencies in dealing with financia l
                               -   -        mni       ('am pf{k       'rnn,tnla
                                          afmtdnnls    ryafuua-      oJ .ysk rn s       managenient problems . Also, an agency JFNII P
     Under review, July 1, I .i69 . . ,         l7             tl               17      liaison group was reactivated to assist the Steerin g
     Submitted for review . . . . -             11           21                   1     Committee and to keep the Committee more closel y
     Approved	                                  12            9                   f
                                                                                        aware- of agencies' viewpoints .
     Returned or withdrawn	                      3                               5
     Under revie.r, June 30, 1970-              13           20                  9         Pursuant to the goal of increasing contacts with
                                                                                        agencies, the Committee met during the year wit h
     (See Appendix_, Section IV .) At June 30, 1970, the                                the Assistant Secretary= for :Administration, or a per-
     designs of 71 complete accounting systems designs ha d                             son of comparable rank . in the following agencies :
     been approved out of a total of 145 such systems in th e
                                                                                             Department of Transportation .
     civil and international departments and agencies .
                                                                                             Department of Commerce;
                                                                                             Department of the Interior ,
     Joint Financial Management                                                              Department of State ;
     Improvement Progra m                                                                    Department of Housiti, and Urban Develop-
        The Joint Financial Management Improvemen t                                          Department of Labor .
     Program (JFMIP-)- isa Govei -.nntent-wide cooperative                                   Department of Justice. and th e
     effort of all Federal agencies to establish and maintain                                District of Columbia Government .
     systems of financial management of nnaxintunt useful -
     ness throughout the Federal Government . Leadershi p                               Meetings with other agencies will be held during
                                                                                        the coming year .
     is provided jointly by the Comptroller General of th e
                                                                                           The Joint Pro .yratn sponsored a workshop on au-
     United States, the Secretary of the Treasury, the Di -
     rector of the Bureau of the Budget, and the Chairma n                              diting in June 1970 which was attended by the chie f
     of the Civil Service Commission .                                                  Auditor and the Assistant Secretary for Administra-
        A Steering Committee comprised of a representativ e                             tion front each of the major agencies . Similar work -
     of each of the central agencies coordinates the join t                             shops on other subjects will be scheduled front tim e
     Program . The Committee meets regularly to conside r                               to tine .
     problem areas, start work projects, and evaluate finan-                               Tentative arrangements for a State-Fecleral Finan-
     cial management progress being accomplished through -                              cial Management Conference—suggested by GAO —
     out the Government. The principals of the program                                  were made during the year . The 1 %2-clay conference
     meet front time to time to receive overall reports o f                             planned for October 1970 is to be jointly sponsore d
     progress and to furnish broad policy guidance to th e                              by the JFNIIP, the Council of State Governments,
     Steering Committee .                                                               and the National .-Association of State .Auditors, Con -
        The principal JrMIP events and activities for th e                              trollers and Treasurers. The conference will (1 )
     year wer e                                                                         focus on Federal-State financial relationships in th e
            On August 12, 1969 . President Nixon, in recog-                             grants-in-aid area and (2) emphasize a partnershi p
        nition of the need for improving the decisiontakin g                            approach in carryine~ out grant programs and tack -
        processes of the Federal Government and the nee d                               ling mutual problems .
        for making more effective the Federal system fo r
                                                                                         Two JFNIIP study projects, initiated in prior years ;
        delivering program services, issue([ a memorandu m
        in support of the Joint Program . Among other things ,                        were completed, and implementation of recommenda-
        the President's memorandum directed the head o f                              tious was underway for each .
        each department and agency to cooperate with th e                                 Stud)' of procedures for ecWralisir;g within th e
        joint Financial- Nlanagennent Improvement Pro -                                 Federal Goscramrat the bill big and payment o
                      to ruake the development of effectiv e                            Nansportatimi charges incurred by Federal a ;<n-
        financial systems a higa priority in strengthening ad-                          cies .—'The Bureau of the Rudget is preparing a
        ministrative practices ."                                                       bulletin as a first step in implementing most of th e
           ' Che Steering" Committee appointed an Lxecu-                                recommendations, and the General Accounting
        tive Secretary . in November 1969, so that expande d                            Oflice and the General Services Administration ar e
        attention call -be given to more frequent contact with                          preparing legislation to remove some legal road-


    blocks to carrying out certain of the reeomnren -         obstacles to the creation of a Government-wid e
 -. datiorrs .                                                structure.
       Survey -ol' financial administration of Federa l           In general, agencies do not have extensive writte n
    grants-in-aid to State and local governments,--The        policies to guide analysts in the preparation of variou s
    report of this survey was completed in Septembe r         PPB documents and studies . In seven larger depart-
    1969 and copies distributed to selected congressiona l    ments and agencies, only one had written policies tha t
    committees, heads of - the major grantor agencies.        dealt with assumptions related to env ironmental con -
    and other persons and organizations interested i n        ditions . Six of the seven departments had no writte n
    intergovernmental programs . Follow-on projects            policies concerning coordination of analy tical wor k
    dealing with grants-in-aid administration, unde r          with other agencies or documentation required fo r
    Bureatt of the Budget leadership, have been orga-          PPB studies .
    nized An and :, project, under chairmanship of th e            Communication between accounting staffs and PP B
    General Accounting Office, is well along towar d          staffs has not been extensive . It seems unlikely that the
     producing a set of audit standards for federall y         full benefits of data available front agency accountin g
     financed grant programs . In other areas, the Burea u    systems can be realized unless there is a close r
    of the Budget' s computerized inventory of the Ped-        relationship between users and suppliers of financia l
     cral administrative requirements for State and loca l     information .
    govermrents holding grants or seeking* grants wa s             At the time of this survey, the agencies had assigne d
     substantially complete at yearend .                       full-ting e PPB responsibilities to 1,594 employees o f
                                                               whorn 920 were in the Department of Defense . Em-
                                                               ployees spending part of their lime on PPB matters
Survey of Planning, Programming ,
                                                               were equivalent to about 880 full-time PPB employees .
and Budgeting System s                                         On the average, about 39 percent of PPB staff time i s
   In August 1965 the President notified all Federa l          spent making' analyses of program outputs and effec-
Government departments and agencies that a plan-                tiveness : about 30 percent is spent on estimating and
ning, programming budgeting system, commonly re-                anahzing costs and resources ; and about 30 percent i s
ferred to as the PPB systeul, was bein g_ introduced u1         spent on PPB procedural matters .
Government .                                                       Although GAO' s study contains no recommenda-
   The system requires that agencies :                          tions, it does state that all agencies should give specific
                                                                consideration to the potential advantages of havin g
      Establish ton_ range plauninc for national goal s         written instructions describing the documentary sup -
   and objectives                                               port that shou''d be prepared for special analyses an d
      Analyze systeiu itically and present for agency hea d
                                                                other PPB reports . GAO also believes that significan t
   and presidential review and decision possible alterna -      advantages should be realized by agencies if plannin g
    tive objectives and alternative programs to mee t           and evaluation efforts pertaining to problems commo n
    these objectives .                                          to one or more agencies are coordinated by a central
       Evaluate thoroughly and compare the benefit s            agency. (See Appendix, Section I, Item 151 . )
   and costs of programs .
       Present the prospective costs and accomplishment s
   of programs oil a mule' dear basis .                        Intergovernmental Program s
   During the fiscal Near GAO made a survey of th e            and Operation s
 progress and major problems of the executive agencie s
 in inipienienthn systems of planning, piogranuning,             Because of increasing interest throughout the Federa l
 and bud{,ctutytt . 1- he results of this study were glad,     Government in improving the administration o f
 available for the list- of interested congressional com-      Federal grants-in-aid to State and local governments,
 mittees and all executive agencies .                          during the past year GAO has expanded its efforts i n
    GAO found that 20 of 21 agencies included in th e          this area .
 survey and directed by the Bureau of the: Budget 1 0             Considerable work was performed with the Advisor y
 adopt a PPB system had succeeded in developing PP B           Council oil Intergovernmental Relations . the Bureau
 program frameworks . 'I'here were dilivi-vnces anion «        of the Budget, and the lnter~gorer n rvrual Relations
 these frameworks and it was evident that there ar e           SuhCunlnuLtceS of both IIouses of the Congress in order

                                                                                 ASSISTANCE TO THE AGENCIE S

 to improve the language of the intergovernmenta l                   GAO provided advice and assistance relative t o
 cooperation bills currently bein_v considered . Impro%e -        the reestablishment of a legislative auditor operatio n
 ments proposed pertain to (1 .t more uniform account-            by the State of Oklahoma .
 in ', and financial reporting requirements by Federa l              GAO is serving on a Technical Advisors- Board fo r
 departments and agencies and (2' increased usage o f             the establishment of improved accounting and audit -
 audits performed by Mates and local agencies of goy-             ing operations for the E-dttcational Agency of th e
 ernment together NNith the development and usage o f             State of Alabama . A grant front the Office Of Edu-
 underlying audit standards.                                      cation . Department of Health . Education, acid \1'e1 -
       At GAO's suggestion, the Steering C:onunittee of           fare, is financing the project .
 the JFMIP has arrangccl for a State-Federal Financia l           GAO arranged for and assisted in a series of liv e
 Management Conference to be held in October 1970.             1-clay° seminars which were held for State auditors o r
  Representatives of the Council of State Government s
                                                               their designees for the purpose of ! 1 `„ describing th e
  and the National Association of State Auditoi s . C]otnp -   working relationships between Federal and non-Fed-
  troffers and Treasurers have indicated their interest i n    cral auditors t :-ho are auditing in the same areas usin g
 jointly supporting this project .                             a common set of audit standards and (2) explainin g
       In February 1970, GAO started a project which ha d      concepts of performance auditing a- related to it s
  as its purpose the development of standards whic h           contributions to effective management .
 could be used as criteria for the acceptance of or reli-         'Flee seminars were given in various parts of th e
 ance on audits of federally assisted programs performed       country by the Oak Ric] ge Operations Office all(] th e
  by non-Federal organizations . This project is bein g
                                                               Albuquerque Operations Office of the Atomic Energy
 carried out by a working group with full-time repro-          Commission . Representatives from almost 10 States at -
_sentatives of seen other Federal agencies (those wit h
                                                               tended, as well as personnel from several Federal
 the largest grant programs) , and representatives on a        agencies .
 part-time basis of various public interest groups repre-
 senting State and local auditors, and university con-
 sultants. Other public interest groups and professiona l      Automatic Data Processing
 associations also are assisting .
      The working group has met wilt the audit repre-             The number of electronic computers in use b y
 scnratives and selected program organizations in th e         Government agencies has increased greatly in recen t
 Federal departments and agencies . It has visited 1 7         years. Computers in use have increased from 2,412 in
 State central audit and departmental internal audi t           1965 to nearly 5,000 in 1970 and their cost also ha s
 operations as well as 10 county and city audit opera-         doubled .
 tions. It is also obtaining infornmtion by questionnair e        The Federal Government now spends over $2 billio n
 on the characteristics of State and local audi t               annually for the purchase, leas e : and operation of auto -
                                                               matic data processing (ADP) equipment and the us e
 organizations :
                                                               of this equipment in ADP systems in carrying out Fed -
      'I'he group plans to develop tentative standards,
                                                               eral Government functions has had a significant im-
 together with criteria and implementation plans . These :
                                                               pact on operations in almost every major agency o f
 standards and criteria will be concurrently tested b 1        the Government. In the Department of Defense, th e
 State auditrnsu: a group of 10 States and later sent fo r     principal management applications are in supply an d
 comment to the departments and agencies, the publi c           logistics programs and financial managcnnent opera-
 interest groups, and the professional associations.           tions . In these activities computer systems are process-
     ' Far-et-date for -publication of a code Of auditing       ing millions of transactions monthly . Numerous
 standards and related criteria is mid-1971 .                  small-scale computers are being used throughout th e
      An increasintt nntt,her of States have requested GA O    Department for base-level operations and extensive
 tiff tsist in tale resolution of audit problems.              communication facilities are being used to transmi t
     .A series of meetings wcrc held with Minnesot a           data between using organizations and compute r
   State senators and the Senate Counsel to explor e           centers .
   possibilities of GAO assistance in the broadening o f          In the civil agencies.. many large-scale paperwor k
   the State auditing heyond fiscal-type audits to in-         operations have been converted to autonitatic clat a
   elude compliance and performance auditing .                 processing systems . Important examples are found i n


the Treasury Department, the Social Security Admin-          The report recommended that each Federal depart-
istration, the ' Veterans Administration, the Depart-        ment and agency head :
ment of Agriculture, the Post Office Department, and
                                                                 Take action to implement steps requiring replace-
the Census Bureau.                                             mentof leased components of computer systems tha t
   GAO continued to provide advice and assistance t o          can be replaced with more economical plug-to-plu g
Federal agencies on questions involving the acquisition        compatible units .
and use of automatic data processing systems . In carry-          Pending the issuance of more specific police guid-
ing out its review and evaluation responsiniiities, GA O       ance by the Bureau of the Budget and the . Genera l
reviewed with agency officials deficiencies related t o        Services Administration, consider the factors de -
the planning for and use of such systems disclosed             scribed in this report in evaluating alternate sources
during its audits . GAO is currently engaged in a gen-         of automatic data processing equipment .
cral survey of ADP activities in civil departments and           Consider third-party leasing arrangements i n
agencies throughout the Federal Government . Th e              those cases where purchase of plug-to-pl u.g compati -
survey is concerned with the overall management an d           ble equipment is determined not to be advantageous .
control of ADP activities, and the participation of in-
ternal audit groups in ADP matters .                            In order to examine and evaluate the implications
   GAO has continued to work with the Civil Servic e         of GAO's recommendations on the Government' s
Commission and the internal audit units of the Gov-          policies and procedures, the Bureau of the Budge t
ernment in providing a training program for auditing         sponsored a conference of Government officials con-
in an automatic data processing en ; irooment . Thi s        cerned with ADP management and procurement a t
                                                             the Federal Executive Institute in Charlottesville, lv'a . ,
course is now being offered by the Civil Service Com-
                                                             in September 1969 . GAO representatives attended th e
mission to auditors of all Federal agencies .
                                                             conference and participated in the formation of th e
   In addition to advising and assisting individua l
                                                             conference report which, in general, supported the
Government agencies, the General Accounting Offic e
                                                             conclusions in the GAO report.
has, as a result of its continuing studies in this field ,      Or. February 2, 1970, the Bureau of the Budget
made recommendations which are directed towar d              issued its Bulletin No . 70-9 on the acquisition of pe-
achieving improvements in the management and ad -            ripheral components for installed ADP systems . The
ministration of automatic data processing facilities o n     Bulletin requires Federal agencies to review and mak e
a Government-wide basis . Studies are now being mad e        decisions on whether leased peripheral equipmen t
as a followup to earlier studies which were the subjec t     eomponer e in computer systems supplied by the system
of comprehensive reports to the Congress in June 1958 ,      manufacturer should be replaced with less costly equip -
December 1960, March 1963, April 1964, August 1965,          ment available from independent peripheral manu-
April 1968, and Jute 1969 . Copies of these report s         factur ers or other sources . Some agencies have
were widely distributed to Government agencies to as-        completed their reviews and have made replacements
sist in the development of automatic data processin g        which have already resulted in substantial savings t o
programs throughout the Government .                         the Government . (See Appendix, Section I, Item 192 . )
   The latest report in this series was issued on June 24,
1969, and was entitled "'Study of the Acquisition o f
Peripheral Equipment for Use with Automatic Data             Reviews of Financia l
Processing Systems." This report painted out that i t        Management System s
is common -practice for Government ADP manager s
to obtain all required ADP equipment from compute r
                                                             Reviews of Accounting System s
system manufacturers even though certain items of            in Opera°.io n
equipment can be procured more economically from
the original manufacturer- or from alternate source s          In lieu of formally approving accounting systems i n
of supply. It identified selected computer components        operation, GAO is now devoting more effort to review s
that are directly interchangeable (plug-to-plug corn-        of agency accounting operations from time to time a s
patibie) with certain other system manufacturers'            required by law. These reviews are made as part of it s
components and are available at substantial savings.         regular audits of agency operations which are the base s

                                                                             ASSISTANCE TO THE AGENCIE S

of the reports GAO submits to the Congress and agency             The -conduct of systematic, independent ; internal
officials .                                                    reviews to assure that effective controls are main-
   Several reports were sent to the Congress during the        tained and that appropriate administrative actions
year on reviews of accounting systems in operation a s         are taken to obtain any necessary corrective actio n
parts of ag ency financial management systems . One re -       requited.
port showed a need for improvements in the account-             GAO also (1 } reduced agencies' requirements fo r
ing for reimbursements in the food and Dru g                 reporting irregularities in accounts of accountable offi-
Administration and the Consumer Protection and En-           cers, (2) authorized them to resolve administrativel y
vironmental Health Service of the Department o f             irregularities amounting to less than $150, and (3 )
Health, Education, and Welfare . Another report deal t       informed there that GAO plans to discontinue the is-
with improvements needed in the financial manage-            suance of certificates of settlement where there are n o
ment system of the Bureau of the \lint, Department o f       outstanding exceptions .
the Treasury . A third concerned accounting by th e
General Services Administration for 52 Federal suppl y
                                                             Review of Agency Internal Auditin g
property classes for the Department of Defense, and a
fourth, the Veterans Administration's medical care cos t        The General Accounting Office, in discharging it s
accounting. (See Appendix, Section I, Items 131, 136 ,       statutory audit responsibilities and as a matter of gen-
 195, and 140. )                                             erally accepted auditing practice, reviews and evaluates
                                                             the effectiveness of departmental and agency sy=stems
Audit and Settlement of                                      of internal control, including internal audit or othe r
Accountable Officers' Account s                              methods of internal review .
                                                                In keeping with the greatly increased emphasis GA O
   In August 1969 GAO notified agency heads that             has placed on the usefulness of internal auditing t o
henceforth its audit and settlement of accounts of ac-       strengthen management, the Office continued to re -
countable officers, would be based primarily on th e         view the audit and evaluation organizations and ac-
adequacy and effectiveness of the agencies' financial        tivities of the civil, defense, and international depart-
managementsystems in lieu of transaction audits . Ac-        ments and agencies . Eight reports were submitted on
countable officers are those Federal officials who eithe r   these reviews : four to the Congress on the Departmen t
disburse Government finds or authorize the disburse-         of State, the Department of the Treasury, the Vet-
ment of funds, or collect tat or customs revenues o r        erans Administration; and the Department of Defense ;
other fluids .                                               and four to agency officials on the Department o f
   In a letter' to agency heads GAO stated that thi s        Housing and Urban Development, the Railroad Re-
change was being made- in recognition of their basic         tirement Board, and the Treasury Department's Bu-
responsibility for proper accounting and internal con-       reau of Customs and Internal Revenue Service .
trol, including internal audit, in support of the func-         The more important matters discussed in these re -
tions of their accountable officers . Since the agencies '   ports are summarized below and briefly described i n
responsibilities require that they provide adequate as-      Chapters Four, Five, and Six :
surance of the legality , propriety, and correctness o f
                                                                  Need for balanced coverage of important interna l
disbursements and collections of public funds, thei r
                                                               audit areas (RRB, Treasury, VA) .
procedures and controls should include :
                                                                  Need to improve independence of internal audi t
     Adequate administrative procedures for system-            (State, Treasury) .
  atically examining disbursement and collection                  Need to broaden scope and improve execution o f
  transactions to verify their legality, propriety, an d       internal audits (RRB, State, Treasury) .
  correctness at the point in time when any neede d               Relocation of internal audit function at a highe r
  preventive or corrective action can be most effec-           level needed (HUD, State, VA) .
  tively taken                                                    Need to establish central internal audit organi-
     Reconciliation of accountable officers' account s         zation responsible to the highest practicable leve l
  with agency accounting records prior to the time th e        (HUD, VA) .
  accounts are made available to the General Account-             Need for better coordination among and guidanc e
  ing Office for audit.                                        of management evaluation groups (DOD) .


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                                                                                                                                                                     a":1         . :G~'!
                                                                                                      CIVIL OPERATION S

                                                                   for accotnuini, prescribed he the Comptroller Genera l
                                                                   are included in the preceding chapter.

                                                                   Department of Agricultur e

                                                                      7 - hii'teen lelywts were submitted to the Congress o n
                                                                   revietrs of Departinent of Agriculture opelatiole,- 'Fel l
                                                                   of these reports were suibrilitted to the C:ot Itss as a
                                                                   whole and three were ~tibiniaed to its Members. I n
                                                                   addition 21 reports were issued to Department o r
                                                                   agency officials . A significant portion of this audit effort
                                                                   was devoted to revivw- of the enforcement of Federa l
CHAPTER FOU R                                                      sanitation and other rcguiroments at poultry and mea t
                                                                   plants . v arious aspects of the swear pros=i.ani . and loa n
                                                                   policies and procedwes of the F .umers Hone
                                                                   Administration .
                                                                      In May 19 7/0, GAO representatives testified befor e
                                                                   the Sub,onmuttec ort Eriel v . Aatrial Resouices, and
AUDIT OF CIVIL OPERATION S                                         the ILnvironntelit . Senate Coriunitive gin C :oniuu•rce .
                                                                    n connection kith reports suhuiituxi to tht C .~ns_res ,
AND PROGRAM S                                                      in fiscal tear 1969 on pesticide, re ulation activities o f
                                                                   tire Departinent .
                                                                      One of the report, utbnlittVd to the Cotlgress relate d
General                                                            to it reciv wti made pur,uaut to the reguireineut, of e,- -
                                                                   lion 201 of the Economic Oppoi timity Aiucndntenl~ o f
    As a result (-if it, work in the civil departments an d
                                                                    1967 . concerning the administration and effectivenes s
. 116cs of the ezecutiic brandl and in the le16slativ c            of the E( annmie Opportunity Loau pro ranl for lo x
and judicial branches durin fiscal %s ear 1970, the                iuconu• rural famines achninistcred hs tile Fainiens
Genital Accounting. Office submitted 293 reports t o
                                                                   IkmicAdmtinistiation :see pa Re67) .
the C egress . Of these reports, i iA were submitted t o              Sununaiies of the principal matters discussed i n

the Comress as it whole and 17=1 were submitted t o                other reports submitted to the Con,ress fellow .
its comutittees, oflicers, or Members on ret icwi mad e               In an examination of the enforcement of sanitar y
in response to their specific it-quests . In addition, 26 5        and other requirements it federalh inspected poultry
report, were submitted to department and aeeucv offi-              plants-- those en ai*cd in inwrstate or foreien conl-
cials . A list of these reports is included in Section Il l        nierce GAO identified 10 plants that were reporte d
of tho appendix .                                                  for repeated violations of mininnult standards . Becaus e
   The foiiolvinh sections of this c hapter dcscrihe bl ieff v     the Consumer and Maikctin« Service <."C&,\IS? di d
GAO's audit work in the major civil departments an d               not take timely action to suspend or terminate in>pec-
al-('116cs in tilt ' QCeI'tlli%C bl-all(IL it : lindim's, an d
                                                                   lion seixires at these plants, the consulriin°_ public wa s
atrencr coninivias and action taken on its suggestions             not at,ecfuatU1v prote~-tcd and the management at othe r
and re( ouoilt ndatinns for illiplovement in their opera-          f,deralh inspected plant, could infer that violation s
tio11K .I)etallCd descripuoits of finding's ill(] recommen-        would he tieated with mininitim consequence. Forty-
dations ill all the civil depaltirients and a i nt ;es i q til t   four plants weir also identified that were allowed t o
executive bralteh are eontailled hl Section I of th e              ship poultry conrunilig water in excess of that per-
:\~1jx•ndis .                                                      mitted by re ,-~iilations, thus increasimg the cost to th e
    C:onunetits oil GAO's worli in the civil departillent s        cnnsuumr .
and i,encies ill . "operating ill the iniplovcment of                  In response to recommendation . . C& NIS informed
their accomitin, s\SIems and ill I"e6ewill :r dlO,v %I-            ( h10 certain actions it had taken or intended to tik e

wins and approvins-r them tt hen deemed to be adegnat e            to mein . adequate sanitation in inspected plants ,
and in conformity with the principles and standards                U&MS also said that it planned aciions to preven t


poultry -from heing distributed until excessive moistur e         had been allocated to other domestic sugar-producing
had been removed . (See `Appendix, Section I, Item                areas, instead of to foreign countries as required b y
22 . )                                                            law, domestic producers could have realized additiona l
   Another examination of the enforcement of Federa l             gross income of about %2 million, and outflow o f
sanitation standards by C&NIS at 40 federally inspected           dollars for sugar imports could have been reduced b y
meat plants andat -eightnonfcderally inspected meat               about $89 million . Because of the potential benefit s
plants receiving Federal grading service showed tha t             each year ; GAO recommended that the Congress, whe n
animals were being slaughtered or meat products wer e             considering the extension of the Sugar Act of 1948 . a s
being processed for sale to the consuming public unde r           amended, authorize the allocation of continuing deficit s
unsanitary conditions at 44 of the plants . Instances of          of a domestic area to ether domestic areas rather tha n
product contamination were observed at 35 of th e                 to foreign countries . (See Appendix, Section I, Item 1 . )
plants :                                                             A review of the constitution of farms under the L .S .
   A lack of uniformity and leniency in enforcemen t              sugar program revealed instances evhere farms wer e
existedprimarily because of the absence of clear an d             considered is separate farms for subside paymen t
firm criteria for actions to be taken when unsanitar y            purposes although they should have been considered
conditions are found . Also, weaknesses existed in th e           as single farms because of common ownership an d
system for reporting actions taken to correct unsanitar y         operation . Because of the sliding scale method of com-
conditions .                                                      puting subsidy payments, farmers received larger pay-
   GAO believes that actions taken and further actions            ments for the separately constituted farms .
outlined by C&M-i will, if fully and continuously im-                Also, under the national sugar beet acreage reserve
plemented, sub tantially comply with GAO recom-                   program, which " as designed to encourage ne w
iuendations for improvement andwill provide greate r              growers to produce sugar beets, more reserve acreag e
assurance to the consuming public that meat product s             was allotted in some cases to tire- separate fauns than
are processed under sanitary conditions . (See Appen-             would have been allotted to a single farm . Thus, fewe r
dix, Section I, Item 23 . )                                       acres were available for other new `rowers.
                                                                     :Neither State nor county offices and committees had
                                                                  been making adequate reviews of farm constitutions .
                   :UE'10 UNSANITARY CONDITION S                  In response to GAO recommendations, the Adminis-
                                                                  trator, Agricultw;al Stabilization land Conservation
                                                                  Service, proposed certain actions which, if effectivel y
                                                                  implemented, should minimize the overpayments an d
                                                                  overallounents . (See Appendix, Section I, Item 2 .),
                                                                     In other reports to the Congress, GAO expressed
                                                                  its opinion on the financial statements of the Commod-
                                                                  ity Credit Corporation (CCC) and the Federal Cro p
                                                                  Insurance Corporation for fiscal year 1969 . The report
                                                                  on CCC also described the following actions whic h
                                                                  CC(-.: took on sug. estions GAO had made .
                                                                     CCC, in July 1969, adopted a revised method of
                                                                  computing interest charged on grain price-suppor t
                                                                  loans after GAO showed that CCC's practice had not
                                                                  yielded the expected average late . The revised method
                                                                  will result in additional revenue of about X570 .000 i n
                                                                  fiscal year 1971 . (Sex- Appendix, Section I . Item -I5 . )
                                                                  Also, CCC made a change in its price-support progra m
                                                                  in December 1969 to amid an extra handlimt of butte r
   During the 6-year period prior to 1969, sugar mar-             at warehouses after GAO had indicated that economie s
ketings by domestic producers Acre -about 4 to 13 per -           could be achieeed . t.See .-Appendix, Section 1 . Item 3 . )
cent below the quotas autho rized by law becautse of                 A previous re p ort -stated that sayings in transporta-
production deficits in Puerto Rico and the N'irgi n               tion costs could be realized on shipments Of butter an d
Islands ., GAO estimated that if the deficits ill one tea r       cheese . and possibly an other pvrishablr commodities,

                                                                                                    CIVIL OPERATION S

 if CCC eliminated excessive protective services. CC C         Also, there were indications that the operating units i n
 concurred with GAO's suggestion that all ev=aluatio n         the two States where the guides were generally fol-
 be made and issued new guidelines that resulted in con-       lowed were more effective than the operating unit s
 siderable savings in fiscal year 1969, (See Appendix ,        in most of the States not covered in the review .
 Section I Item 4. )                                              CIAO proposed that all operatin g, units he require d
      At June 30, 196£3 ; about 1 1 percent of the approxi _   to follow the guides in organizing . planning_ schedul-
 niatel 5827 million of operating-type loans made by           ing, and nianagin,, their work, and that the guides be
  the Farmers Horne Administration (fHA= were delin-           clarified to show the value and necessity of followinIg
 gUent . Of the total number of borrowers, 30 percen t         diem . SCS subsequently informed GAO that correctiv e
 were delinquent .                                             action had been taken . See Appendix, Section I ,
      Although such loans are to be niade only to indi-        Item 59 . )
 viduals possessing training or experience sufficient t o         Audit work in process at June 30, 1970, included
 insure reasonable prospects of success ill their proposed     reviews of such activities as the agricultural conserva-
 farming operations . FI IA continued to make operating -      tion program, the feed ;rain acreage diversion pro -
 type loans and provided assistance to delinquent hor-         gram, the water and sewer loan and grant program ,
 roiycrs even though tit t \ycrr unsuccessful and, i n         loans to farmers for rural recreational faciliticS. proce-
 many cases, had no reasonable prospects of success ,          dures for allocating forest developnt-mt road and trai l
     Several recommendations were made for Strength-           funds, and foreign meat inspection procedures .
 cning PHA's procedures for determining whethe r
 additional loans should be made and continued assist-
 ance be supplied to delinquent borrowers . The Adnti n        Department of the Arm y
 istrator, FITA, agreed with the recommendations an d          Corps of Engineers
 cited actions he proposed to take to strengthen th e          (Civil Functions)
 procedures . (See Appendix, Section I, Item 43 . )
     In another report GAO recommended that PH A                   GAO submitted two reports to the Congress as a
 charge a fee for poces .iug applications for rural hous-       v%hole on reviews of activities of the Corps of Engineers .
 ing luaus . The assessment of fees. which could amount         One report teas submitted to a congressional com-
 to S'6 to $8 million a year, would help to recove r            nrittee on it review made at its request and seven re -
progt.ant costs .                                               ports there issued to Department or wenry officials .
     Tees are generally assessed under other Pederal Itous-        In GAO's opinion, the Corps uses an inappropriat e
 ing programs---notably those of the federal HouSin! -          basis in allocating the costs of multiple-purpose wate r
 Administration and the Veterans Administration . Also,         resources projects to hydroelect ric power developmen t
 it is the, general policy ofthe Government that Federa l       purpose-s. 'The Bureau of Reclamation, Department o f
agencies charge fees for services that result in specia l       the Interior, uses essentially the saute procedures a s
benefits to the recipients heyond those that accrue t o         the Corps . An equitable allocation anong the severa l
the public at large.                                            purposes is required where the cost of one or snore o f
    FIIA also snakes other types of loans -w hich involve       the pu rposes is to be paid for by the users.
the acquisition of real property . No application fees             Unless the Corps' procedures are revised, the Fed-
were charged for these loans, which wore expected t o          eral Government will not recover about $118 millio n
total about 562-1 - million in fisca! year 1970 .               in allocated costs on the 20 federal seater resource s
    GAO was informed that FUA would adopt the rec-             projects reviewed, nor \t ill it recover substantial interes t
nnuncndation rep ardin ;, rural liousin- loan . au ( tha t     charges . The procedures used have also resulted in in -
it would reappraise its position on charging fees o n          creases! federal participation of about $wa million i n
other loan pro g rams . ice Appendix, Section 1, Ite m         two partnership projects with States or other govern -
44 . )                                                         mental units .
    In a re\imv of the conservation operations progra m           GAO recommender) that the Secretaries of the Arm y
of the SoilConservation Service (SCS) . GAO foun d             and the Interior apply revised procedures to all cur-
that Operating units ill two States that generally fol-        rent and future projects where cost allocations have not
lowed the guides issued by SC :S assisted more than twice      yet become final, pending_ establishment of uniform
the -petcenta-n of landownet, or operator, assisted i n        cost allocation standards by the Water Resource s
two other States w1wrc the :guides were not followed .         Council .


          CIVIL                OPERATION S

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          7 -he downstream face of the Detroit Darn on the North Santiarn River, 45 miles southeast of Salem, Oreg. The Detroit Danz
      -             it a unit of the Willamette River Basin Project in the Portland, Greg ., District of the Corps of F,ngmeers .

          -I'lie Departments generally disa_~reed v6tb this posi -                                 by relocations and that congressional consent to hea r
      tion . The I?epartmentof the Interior agreed, however ,                                      the increase in costs be obtained . 'See Appendix ,
      that the subject was ` worthy of further analysis and                                        Section 1, Itein6% . )
      endorsed the recommendation that the Wate r                                                     In reports to the Secretor g of the ;\nn} or the Chie f
      Resources Council undertake t1_re task of establishin g                                      of Engineers . ( ;A0 stated, among other things, tha t
      uniform policies, standards, and procedures for cost                                         the Corps should imprmc, at tic field level . the review
      allocations . (See Appendix, Section 1, Item 66. ;                                           of data and calculations used in preparing propose d
          Another report stated that the Corps needed to im-                                       allocations of costs for eater resources projects ; con-
      prove guidance for its district officials by l 1) develop-                                   sider the feasibility of furnishing fuel to its dredgim,
      ing guidelines for deteintining the extent of the                                            contractors : include certain omitted costs in reimburs-
      Govenunents obligation to relocate railroad facilitie s                                      able costs of crater resources projects : and review it s
      existing', or planned for construction on land acquire d                                     practices eel€hill, to the level anti control of warehouse
      for flood control projects ;md , 2 strengthening its
                                                                                                   imentorie . See Appendix, Section I, Items 68 . 102 ,
      proc'cdilres for• net*otiating railroad relocation agree-
                                                                                                    126, and 191 .
      mmnm The Corps subsequently issued guidelines ina-
                                                                                                      :Aedit work in process included surA'c}'s and reviM S
      plenirnting the GAO recommendation with respect to
                                                                                                   of such actisitics as the allocation of benefits of wate r
      existing, facilities.
         'File Corps did not agree, however, „ith tltc rec_om-                                     resources {p rojects to recreational purposes, dredging .
      metnkuion; which ("AO continues to believe shoul d                                           comparability of design standards for eater resource s
      he adopted, that Federal participation in the cost o f                                       projects as then relate to the Corps and the Bureau o f
      facilities planned but not constructed at the time of                                        Reclamation, and lilt, increasing cost of multiple -
      t,el!miatiorr be limited to the irrcr(ra-se it cost caused                                   purpose projects- .
                                                                                                       CIVIL OPERATION S

Department          of Commerce                                       (ause of the small amount of claims paid by the
                                                                      underwriter compared with the premiums paid for th e
    During the year GAO submitted 10 reports to the                   protection and indemnity insurance carried on the Sa-
 Congress on reviesys of Departrnent of C.otntuercc op-               rarinah, it would be )Dore economical for Maritime t o
erations . Your of these reports were submitted to the                adopt the policy of self -insurance and 2 , severa l
Congress as a whole and xis reports were Submitted t o                items of expense should have been excluded in de-
committees or llenibers . In addition- 10 reports were                wrnininQ the vessel operators overhead allowance .
 issued to Department or agency officials .                              GAO recommended that the protection an d
     Selected activities of six major constituent agencie s           indemnity insurance be discontinued and that a pre -
and offices of the lleparnrient sverc reviewed with G_A O             audit be made of the operator's general and admin-
dividing- its effort about equally between economic de -               istatise expenses when determining the operator' s
Velopment activities, scientific and technological activ-             prollt and overhead allowance in future• years . The
 ities ; and maritime activities.                                     agency a+geed to discontinue the insurance beginnin g
    One report to the Congress observed that oceano-                  it fiscal scar 1971 but disaerc•ed that a preaudit o f
graphic research and survey ships operated by the En-                 the tencral and adminkinnive expenses %%as nvcu .l .
 virontnental Science Services Administration , (ESSA )               GA() 1wheves that a preaudit is nece sarc ti, evaluate
ayeragcd . -much less time at sea than did simila r                   the wasonablene,s of the rates proposed by the opera -
research ships operated by the Military Sea 'ltanspor-                tor. tSuc Appendix, Section 1, Items 161 and 1I ; . ;
tation Service . The report concluded that, tbrotr h in -                 Fees charged by the National Bureau of Standard s
creased us ',0, ESSA could carry out more missions or                 during fiscal tears 1' .166 through 1968 for calibratim-,
could release four ships and could teduc•e plante d                   instruments for private indusu y •,-ere not high enough
ship requirements by seven ships .                                    by about 582. 1 .500 to fulh recover operating costs ,
     GAO recommended_ t I ways by which increase d                    buildin g* depreciation, and d( .oartmcntal overhead .
 utilization coi)ld be achieved and (2) that increase d               The 0cpartment of Defense, hmevvr, was over -
 utilization be considered when construction of addi-                 charged X806,000 . After receiving a draft of a GAO
 tional ships was planned. The Department of C:om-                     report, the Bureau began on July 1, 11)69, to charge
 nterce stated that utilization would he increased a s                 revised rates which should result not onh in th e
 more resources became available and that acquisitio n                Bureau's recovering its costs for calibration services
of new ships would bedeferred until the present flee t                but in equitable cha) .ges as between Gmernment wwrl-
reached optinrnn , utilization. (See :Appendix. Sectio n              cies and private_ users .
 1, Ite ;n 212 . 1                                                       Inasmuch as the Bureau did not include a facto r
    .N review of the operation of Government-owne d                   for buildine depreciation and departmental overhea d
Vesselsused -in support of military activities in South -             in its chatcs lot- other work performed for privat e
east Asia showed that ; during a period of considerabl e              industry, GAO recommended that it factor for thes e
reduction in scalift_requirements, additional costs o f               costs be included . Also, although the Bureau disagree d
about $6581100 were incurred because- vessels wer e                   that improvements were needed . GAO recommended
lJ1aced in reducTd operational status at commercia l                  that the Bureau improve its accounting system to cor-
piers rather than being) placed at Maritime Ad)ninis-                 rect inequitable or inconsistent methods of allocatin g
tration reserve fleet site, . This situation occurred be -            overhead costs, See Appendix, Section I, Items 223
cause neither Maritime not- the -Navv considered usin "               and 127 . 1
reserve fleet _ites even though their use would hav e                    One report to the Scrretarr of Commerce com-
lesulted in savinsts to the Gme-rnment . GAO vya5 in-                 mented on improvements needed in the- adminis -
fonned in March 197() that Maritime and the Nav y                     ( anon of ia)prest funds maintained by ESSA . '. Se e
had leached an understanding . which is to he formal-                 appendix, Section I . Item 129 . 1
ized ; hat all slips irinp; into ieduced operational statu s             Another - report to the- Secretary stated that, i n
will be placed at a reserve fleet si t e . +See Appendix ,            GAO's opinion, funds appropriated to furnish an d
Section 1 . Rent 21 fl.`-                                             equip a library at the U S . Merchant IMarinc A ad-
    GAO?'s revicsc of -the.adnti!tiStTation I)\' ti le Maritilli t.   cn)q syere improperly wed to supplement fond s
Adniinistralion of conLI-arts for operating and servic-               appropriated for construction and that the us-0. o f
ing the luldv it ship lacanna!) showed that ( I l be -                annual )maritime training app~opriation fonds to air-



    condition the library was in violation of U .S. statutes .   tions from some Indian vibes and other beneficiaries
    (See Appendix, Section I, Item 130 . )                        for the construction of water supply, sewage an d
      Audit work in process included reviews of the ef-          water disposal, and other sanitation facilities author-
    fectiveness of total- Federal assistance provided to a       ized by a 1959 law, although the beneficiaries are sup -
    designated redevelopment area ; the eligibility require-      posed to contr ibute and apparently could .
    ments for grant assistance for public works and de-             Both HEW and the Department of the Interior ,
    velopinent facilities ; the feasibility of consolidating     which has specific responsibilities for Indian welfare ,
    certain Maritime, Army, and Navy rescrye ship fleets ;       agreed to cooperate in programming tribal funds for
    and the effectiveness of oceanographic surveying             constructin, sanitation facilities. LIEN did not com-
    activities .                                                 ment . however, on ` .O ' s recommendation that th e
                                                                 Secretary emphasize to responsible officials the in -
                                                                 tended cooperative nature of the program whic h
    Department of Health, Education ,                             requires them to seek contributions from individua l
    and Welfare                                                  beneficiaries . This matter requires further attention .
                                                                  (See Appendix, Section I, Item 33 . )
         Thirty-one reports were submitted to the Congres s         A review of activities at four of the seven primat e
    on reviews of Department of Health, Education, an d          research centers established by the National Institute s
     Welfare (FIEM) operations, including four reports o n       of Health "NIIIi shows-d that, although VIII had dis-
    work experience and training projects which supple-          charged its administrative responsibilities in a gen-
    mented the. summary report to the Congress on th e           erally satisfactory mariner, certain conditions require d
    review of Economic Programs 11 B-130515 ,                    managenienfs attention .                                    -
     Mar. 1€3, 1969) Of these reports, I1 were submitte d           At one center planned research activities were re-
     to the Congress as a whole: and 20 were submitte d          duced in scope because, due to lack of funds, certai n
     to committees or Members of Congress . In addition, 2 5     neededfacilities had not been constructed . At another,
     reports to Department or agency officials were issued .     a valuable colony of great apes was not being full y
         In the reports to the Congress as a whole and to        utilized . Also, the visiting scientist program, an im-
     Department or agency officials, GAO pointed out op-         portant activity . was not being actively pursued . Other
    portunities for the Department to improve the effec-         matters commented on in the report concerned dis-
     tiveness of its operations in several areas .               seminatiriv information on technical innovations ,
        A 'review of the methods used by the Food an d           scheduling periodic internal audits, insuring that op-
     Drug :Administration in establishing fees for testing       cratint funds are not used for construction, s,nd nego-
    certain drugs and pesticides and performing other re-        tiating an appropriate indirect cost rate with a grante e
    lated reimbursable services for manufactu ers disclose d     university . The report contained recommendations fo r
     that the fees had not been sufficient to recover ful l      improvement and the a iency's comments thereon . !Se,
    costs. The methods used to determine costs were no t         Appendix, Section I, Item 121 . )
    sound and excluded certain administrative costs . The           GAO reviet%ecl in several States the manner i n
    Administration revised its policy to provide for the         which the Office of Education was administering it s
    recovery of full costs, and increased fees applicable t o    responsibilities under 'title I of the Elementary an d
    its principal testing program, resulting in additiona l      Secondary Education Act of 1965, which authorize s
    income of over $1 million a %ear . Some cost allocations,    funds for programs designed to meet the needs o f
    however, continued to be made on the basis of un-            children deprived of normal educational development .
    supported estimates .                                        Areport onWest Virginia disclosed that certain aspects
        GAO recontineuded that HFINV establish an ade-           of administration in that State could be strengthened .
    quate basis for allocating costs and complete it s              Participating areas within the State were not se-
    studies of the fee structure on the other testing pro        lected in accordance with Office of Education criteria .
    grams . llE,W responded that their new accounting s~s-       Salaries of persons whose duties were not limited t o
    tem would provide for adequate support of fee deter-         the prograin were charged to the program . Equipment
    minations,See Append i x, Section I, Item 131- 1             used in the regular school program was charged t o
        :Another im im showed that tlic Indian Health Sci -      the Title I program . Also, State audits were not of
    ice, flealth Services and Mental ifeahh Administra-          the scope contemplated by Office of lWitcation re-
    tion, had obtained little or no cash or labor contribu -     quirements . 'the Office of Education agreed %kith GAO


                                                                                                      CIVIL OPERATION S


          3                                       I   ~ a                                                           I

    A R&,,us monkey invisual training apparatus for studies of amblpopia ("tired eye " ) under a research program supported b y
                                              the Notiowd Iustitutcs of Health .

    recommendations and said that the State had issue d            tion of the Fund at June 30, 1968, or the results of
    directives designed tocorrect some of these and othe r         the operations for the year then ended .
    matters discussed iu the report . (See Appendix, Sec-             Claims made by the State of California for Fed-
    tion 7, Itetn 18 . )                                           cral funds under the Medicaid program for providin g
         A review of disbursement practices under the Guar-        skilled nursing care to persons in institutions for th e
    anteed Student Loan program administered by th e               mentally retarded wee e questionable because the claims
    Office of Education showed that the Government, a s            appeared to haye been wade on the basis of th e
    principal loan insurer, could have reduced its interest        persons p resence in institutions certified by the Stat e
    costs by possibly $,9 million for the period Novembe r         as skilled nursing homes rather than on determina-
    1 11 65 through 6ecember 1968 if the private lendin g          tions of the persons needs for skilled nursing care . A
    institn6ons had disbursed the funds oftener than an-           review by I1EM' sustautiated these indications .
    nually . N-fore frecInent disbursements would also re -           GAO recommended that the Secretar), HIM', h r
    duce the risk of defaulted loans and provide othe r            sure that participating States determine, on a case-
    advantages,                                                    by-case basis, the types and levels of care needed h N
        Iit response to its recommendation, GAO was in -           mentally retarded persons and that such persons are ,
    for ned that Federal regulations would be amende d             in fact, receiving such care . GAO also recommende d
    to provide that disbursements are not greater than th e        that the propriety of past claims by the State of Cal-
    amounts required by t he students for given semester ,         ifornia and seven additional States be reviewed b y
    quarter, Or term. (See Appendix, Section I, Item 48. )         FIEW and that appropriate adjustments of Federa l
         In another report tothe Congress GAO expresse d           payments be. made .
    the opinion that the financial staternetits of the Stu -          IIE1!' stated that it would take the actions recom-
    dent Loan Insurance Fund, administercd'by the Offic e          mended . Further, the State of California informe d
    Of Education, did not present fairly the financial posi-       Ill AV that reviews in that State had already resulted



    in the termination of billings for persons found no t           local mental health foundation, purported abuses b y
    to need skilled nursing carer (See Appendix, Sectio n           scientific equipment manufacturers under the health
    I, Twin 25 .)                        –                          prograis, contracts for support of a laboratory o f
        At the request of the chairman, House Ways an d             clinical pharmacology, and a survey of progress toward
    Means Committee, GAO monitored a special review                 constructing a new teaching hospital on the Howar d
    of the aid to families with dependent children (AFDC )          University campus.
    program in New York City conducted by HEW an d                     Reports to Department officials related to certain as -
    the New York State Department of Social Senvices .              pects of the administration of Title III of the Elemen-
    Although the IIEW-State review was performed i n                tary and Secondary Education Act of 1965, selected
    a competent and `effective manner, GAO did no t                 aspects of Hill-Burton grant programs for constructio n
    agree Nvith HEW-State conclusions as to the reason s            and modernization of hospitals and other medical fa-
    for the rise in the AFDC caseload, the eligibility              cilities, opportunities for improvements in the admin-
    and correctness of AFDC payments, and the prob-                 istration of selected Children's Bureau medical car e
    lems which hinder provision of employment and self -            Programs, allocation of administrative costs under th e
    support services to AFDC "recipients .                          Medicare program, and other matters.
        GAO pointed out that changes were needed in the                 Audit work in process included revietcs of the De-
    clUality control system used by the States to evaluat e         partment's programs relates] to narcotic rehabilitation .
    cligibility determinations, since it did not alert respon-      community mental health centers, Mcclicare an d
    sible officials to the high rate of ineligibility found dtn--
                                                                    \ledicaid, student financial aid, Teacher Corps, famil y
    ing the special review . HFW advised the chairma n
                                                                    planning, and publications activities .
    that a thorough review of the quality control system
    would be made. (See Appendix, Section I,-Item 27 . )
        In a report to a congressional cornrnittee, GAO             Department of Housing and
    stated that Medicare payments of $1 .6 million ha d
                                                                    Urban Developmen t
    been made to an association of supervisory and teach-
    ing physicians for professional services provided to
                                                                        As a result of reviews of the activities of the Depart-
    .Medicare beneficiaries. According to hospital records ,
                                                                    ment of Housing mui Urban Development (HUD) .
    nearly all of the services billed in the names of thes e
                                                                    GAO submitted 20 reports to the Congress : six re -
    Physicians ball been provided by residents and intern s
    ~chose salaries were reimbursable under the program .           ports to the Congress as a whole and 1-1 to its commit-
                                                                    ices or NIenrbers. In addition nine reports Were issue d
     h , some cases, hospital records showed no evidence
     that ,he services paid for had been provided .                 to HUD officials. `1'he reports dealt principally with
        On tare basis of this rociew, the Social Security Ad-       HUD activities involvin g mortgage financing, housin g
    ni.rlisnatio; : _determined that overpayments of $1 . 1         assistance, and internal auditing .
    millim, itad hi-en made to the association . Subsequent-            A report to the Congress on the leased housing pro -
    h .-the association refunded $300100 and agreed to                =raur for loco income persons stated that greater prog-
     refund $'800 1 00') by offsets against future payments          ress could have been made in achieving the program' s
    clue the association.                                           objectives in the early mars throuljh better administra-
        At _)title 3 7 1970, congressinnal consideration wa s        tion by HUD . 'The report questioned whether it was
    being given to amending the Social Security Act t o             appropriate to pros ide housing assistance to person s
    c ange thebasis of reinrbulSelnent for supervisor y             already adequately housed cc hen other eligible persons
    and teaching physicians, i 5ce Appesidix, Section I ,           on the waiting lists- Neere livim, in substandard housin g
     Item ` 'i 1. )                                                  and %%hether the program should assist persons wit h
        Other reviews tirade it the request of congressiona l        rrlativeh large anio a is of assets .
    coannittecs and :embers of Congress included suc h                  i111) initiated some improvements in its adminis-
    matters as the effectiveness of procedures establishe d          tration of the leased housing prograut but did not agre e
    ht'• HENV' to strengthen control over donations of hig h         with the proposal, regarding priorities and asset lim-
    cost surplus Property . a comparative studyof reitn-             itations . GAO therefore expressed die belief that th e
    bursennents to hospitals under Blue Cross private plan s         Con Tess might wish to consider these proposals, lice        (1
    and the Medicare program, use, of grant funds by a               App .ndrx. Section I . Item I9 . ;

    52                                                                                                                            l
                                                                                                 CIVIL OPERATION S

   In a_report on inspections of concrete used in the         Department of the Interio r
construction of federally assisted low rent public hous-
ing projects GAO_ pointed out that the practices o f             GAO submitted 21 reports to the Congress on re -
HUD and local housing atdhorities .were not adequate          views of Department of the Interior operations . O f
to insure compliance with contract specifications an d        these reports, 13 were submitted to the Congress as a
that certain actions inc addition to those proposed b y       whole and eieht were submitted to its eonunittecs o r
HUD were needed to strengthen its controls. Accord-           Members. Also, 1£3 reports were issued to Departmen t
ingl y; GAO recommended that HUD make more effec-             or agency' officials .
tive use of its rcgional representatives to insur e              Summaries of findings and recommendations in th e
compliance with _contract specifications . (See Appen-        reports to the Congress as a whole and in certain othe r
dix, Section I, Item 50 . ?                                   reports follow .
   Another report raised questions for the consideratio n
of the Congress relating to insurance ceilings and lan d      Water Pollution Coatro l
appraisals in connection With insuring ntortgage loan s           The benefits of the pro,ram administered be th e
for certain types of large cooperative -housing commu-        f =ederal Water Quality Administration (FWQA '
 nities comprising many separate but interdependen t           (formerly the Federal Water Pollution Control Ad -
and integral propertt segments . By applying the stat-         ministration ; for abating, controlling, and preventin g
utory mor t gage insurance limitation (if $20 million to       water pollution have not been as great as they coul d
each of the individual segments of such large connnu-          have been because many waste ticaunent facilities hav e
nities, HUD insured or had commitments to insure               been constructed on waterways into which major pol-
mortgages aggiugating about 5270 million on five par-          luters continue to dischar',e unneated or inadequately
ticular connnunities . Application of the $20 millio n         treated waste. Grants have been imarded on a first-
limitation to indivith al sex inents of large developments    come-first-served or readiness-to-proceed basis with
inav not have beet) envisioned by the Congress . Treat-        little consideration being_ given to the benefits to be de -
ntent of eachsegment as a separate mortgage entity             rived and the actions taken or planned by othe r
also resulted in substantial increases in land appraisals .   polluters.
 r See Appendix, Section I, Itein 58 . )                          A more effective approach requires a coordinated
    In other reports to the Congress, GAO expressed it s       and systematic effort on the part of FWQA, the States ,
opinion on the financial statements of the Federa l            and all polluters . FWQA and the States should be abl e
Housing Administration for fiscal years 1968 and 196 9         to choose from alternatives and establish priorities o n
and the Federal National Mortgage :Association for             the basis of the benefits to be attained . 'I'hc use of sys-
fiscal year 1968 .                                             tems analysis techniques would . (- of substantial bene-
    In a repot to the Secretary of HUD, GAO stated             fit. Tlne Department agreed that a nnm'e systematic
that a sib 1t, a- : i' t organization placed at the highest    means of awarding construction ur,nts must be found
practicable organizational level should provide greate r       and, on July ?, 1970, took some action toward thi s
opporumity for myna; flexible use of staff resources and       end .
plat-the auditors in a better position to independentl y          Although the Department did not agree, GAO rec-
and objectively review and report on all HUD pro-              ono nended that the Congress ( 1 ? consider allowin g
grams .`1 ht Secretary agreed and placed all audit func-       the construction of less than secondary treatmen t
tions tinder the Department's _Office -of Audit . `I'h c       Iacilities when this could result in Nvater quality en-
Office of :Audit was to continue to report to the assist-      hancement ant! (2) might wish to provide that priori -
an( Secretary for Administration on the basis of the           ties be established on the basis of benefits to be realized .
Sr retary's determination that this was the hi=ghest           a matter not fully covered in the Department's subse-
practicable level to which the Office of Audit shoul d         quent action of July 2 . 1970 . (See Appendix, Section I ,
report, (See Appendix . Section I, Item 1-III . )              Item 61 . )
   Audit work in process included reviews of }IUD ac-             Annonu the grants made by FNVQA are grants t o
tiyitie involving urban renewal . model cities, nnetro-       municipalities for the construction of facilities to nea t
palitan devehrinnent, mortgage financing . special             (I1 domestic wastes only, (2) industrial wastes only ,
insur=ance operations, housin g assistance, and Depart-       and (3) domestic and industrial wastes . A large amoun t
nnent-aide financial administration -and managenievIL         of these in-ants have been for the construction of facili -



    ties to treat_ significant quantities of industrial wastes .   primary= importance replenisliing and stabilizing th e
       Although the Congress is aware that grants are mad e        ground water supple or preventing ineligible land -
    for the treatment of domestic and industrial wastes ,          Owners front benefiting; from project water—and - t o
    it is questionable whether the Congress intended tha t         consider making more land eligible for use of projec t
    grants be awarded for the treatment of industrial              crater, thus lessening the use of ground water by in -
    wastes only. Therefore, GAO suggested that the Con-            eligible landowners . (See Appendix, Section I, Ite m
    gress might wish to clarify its intent and also conside r      70 . )
    other alternatives for financing the cost of facilities fo r      A report to the Secretary of the Interior commente d
    treating both domestic and industrial wastes; (See             on the need for including, in all future long term .
    Apipendix, Section I, Item 65 . )                              Bureau of Reclamation water service contracts, pro -
                                                                   visions for adjusting rates for the sale of municipa l
    Water Resomces Dcveloprn n t                                   and industrial water when the rates, which are base d
       The criteria used in determining the cost of financ-        on estimated costs, are later found to be inadequate t o
    ing the Federal power systems of the Department of th e        re-over all costs allocated to municipal and industria l
    Interior and the Corps of Engineers costs that are re-         purposes. (See Appendix, Section I, Item 72 . )
    payable from' revenues obtained from the sal e
                                                                   Land ~tlanq~entcrit and A'`atur~l Resource s
    of power result in the use of interest rates that are no t
    representative of the cost of Treasur y borrowing . Con-           In response to a request by the chairman, House
    sequently, the cost of financing and, hence, the amoun t       Committee on Interior and Insular Affairs, GAO re-
    to be repaid from revenues has been significantl y             viewed the Government's helium program . Significan t
    understated .                                                  changes have occurred since the program was author-
       Although the Department of the Interior and th e            ized in 1960 which may have an effect on the De-
    Corps of Engineers announced or proposed to mak e              partment of the Interiors ability to meet certai n
    certain changes in computing interest costs, it is be-         anticipated objectives of the program . For example,
    lieved that the changes . %%-]tile representing significan t   si(-.nificantly more helium may be stockpiled than was
    improvements . will not result in a realistic measure o f      forecast by the Bureau of Mines when the program
    the'Freasury's cost .                                          teas undertaken . Further, the program may not b e
       GAO proposed that the Congress consider it uni-             self-liquidating over a 23- to 35-year period as re-
    form method of cleterntining'the interest rates to b e         quired by the Helium Act .
    used in computing this cost . 'These rates, vuhich woul d          Several possible alternatives to bring the progra m
    lie. representative of the cost of funds borrowed b y          more in accord with that initially contemplated wer e
    the "Treasury during the period of construction . \could       offered to the committee, wi r h the suggestion that i t
    be. determined by the Secietary of the Treasury . 'See.        might wish to reevaluate the basic concept and size o f
    Appendix, Section I . Item 69 ,                                the program . (See Appendix, Section I, Item 31 . )
       A stated purpose of the San Luis irrigation unit .              Most oil and gas leases of Federal lands were
    Central - Valley project, California, was to replenis h        awarded by the Bureau of I_.and Management non-
    and stabilize the level of ground water in the unit' s         courpetitively and, in many cases, at prices that ap-
    service area, but an amendment to a contract with th e         peared to be less than fair market value . Although
    units rag c ::aver user would, if implemented, de-             substantial public interest ill acquiring noncompeti-
    featthat purpose . The amendment, clesi gncd to insur e        tive leases indicated that effective price competitio n
    that ineligible landowners in the area do not benefi t         could have been obtained . the first qualified applican t
    by using , round water resulting front the units opera-        is entitled under the km to lease certain lands without
    tion, would -require the contractor. when directed by          competitive bidding- Also, the statutory tight of lessee s
    the Bureau of Reclamation, to use ground water rathe r         to a.si l,n leases in units as small as -10 acres appeared
     than purchase water for irrigation .                          to impede rather than induce development of Oi l
       GAO suggested that the Congress might wish t o              and , as resources GAO recommended that the Coif-
    provide guidance to the Bureau as to which is of               t,r -ss amend this :Mineral Leasing Act to require th e

                                                                                             CIVIL OPERATION S

use of competitive bidding to award oil and gas leases      and local districts sharing the cost of educating thei r
on all Federal lands, unless otherwise justified, an d      resident students. (See Appendix, Section I, Item 20 . '
to increase the acreage limitations on assignments . (See     A report to the Commissioner, Bureau of India n
Appendix, Section 1, Item 35 .'.                            Affairs, commented on the loss of cash discounts o n
   In another report, the Yising cost of acquiring lan d    purchases because of Belays beyond the discount perio d
for national recreation areas Nyas discussed, In enact-     in paying vouchers and the failure to take the clis-
ing legislation authorizing the establishment of na-        counts offered on vouchers processed within the dis-
tional recreation areas, the Congress frequently ha s       countperiod . _See Appendix, Section I, Item 231 . 1
to define boundaries before important facts, such as
the cost of various tracts of land, are known . The De-     Afappil w
partment of the Interior rejected GAO's suggestion t o         An opportunity exists for the Federal Government
adjust the boundaries of certt .in areas to exclude ex-     to realize additional revenues if the Geological Surve y
pensive properties located on or near the boundar y         would sell its maps at prices based on their fair marke t
lines .                                                     value . Maps sold by the Survey ar- priced essentiall y
   Therefore ; GAO recommended that the Congr^ss ,          on the basis of direct costs incurred in printing an d
in enacting authorizing legislation, provide the Secre-     distribution although it appears that the fair marke t
tary with guidelines for making changes in establishe d     valac of the maps exceeds the established prices . - fh e
boundaries when the acquisition of high cost prop-          applicable Bureau of the Budget (BOB? circular pro-
ertics on or near the boundaries is involved and, fo r      vides that full cost is to be recovered when a servic e
those areas for which additional funds are requeste d       is rendered and that market value is to be obtained
to permit acquisition to be completed, require the          when resources or property are sold .
Secretary to estimate the cost and to justify the de-          GAO believes that maps are tangible commoditie s
sirability of acquiring such properties . [See Appendix,    and should be priced at levels up to fair market value ,
Section I, Item 36 . ;                                      but Department officials believe that supplying th e
                                                            maps is a service . Consequently, GAO recommende d
Indian    Affairs                                           that BOB proceed as soon as possible with a review i t
   In the three principal States participating in th e      planned to resol v e the issue Government-\%ide . (Se e
 Johnson-O'Malley program for contributing to th e          Appendix, Section I, Item :i 1 . ,
 cost of educating Indian reservation children, GAO            State and local agencies doing mapping udder pro -
 found instances where the distribution of Federa l         grams financed in part with Federal funds should use ,
 funds to school districts appeared to be improper o r      where appropriate, scales and standards comparable to
 where the Bureau of Indian :Affairs could not be sur e     those used by the Surrey tin its national topo,lraphi c
                                                            mapping program. Thus, some steps in the nationa l
 that the funds- had been used for the intended pur-
                                                            program could be eliminated and overall sayings coul d
 poses. .Also, fluids were provided where needs may no t
                                                            be realized . After considering this GAO suggestion ,
 have existed and the funds may not have benefite d
                                                            13011 revised its Circular No, A--16 to provide for th e
 Indian children . lu addition, the Bureau was payin g
                                                            coordination of such mapping activities with the na-
the full costof educating Indian children living i n        tional program whenever practical and feasible . Also,
 Federal dormitories although most of the children wer e    the Survey's N-lap Information Office planned to ex-
 residents of the particular States . In GAO's opinion ,    pand its activities, as GAO had suggested, to serve a s
 the school districts, counties, and States should have     a central infor.--m -,,n referral point on utappng ac-
 shared in the cost .                                       tivities of Federal, State, and local agencies aided b y
   The Department of the Interior agreed with th e          Federal funds . (See Appendix, Section I, Items 5 2
 proposals to improve controls over the administratio n     and 53 . )
of the program and informed GAO of certain steps
                                                            Trust Territorie s
 that had been taken . Also, the Department indicate d
 that the dormitory program agreements should be               after reporting again on the need for improvemen t
 phased out in the shortest time possible, with the State   in the financial management system of the `[ - rust Ter-

  P-1 —1— ~ .

 ritery of the Pacific Islands, GAO was informed of cor-           The other report to the Congress concerned th e
 reetil7e actions taken or planned . GAO continues t o          financial statements of the Federal Prison Industries ,
 believ e that the Department should establish appro-           Inc ., for the fiscal year 1969 .
 priate surveillance techniques to insure that correctiv e         The reports to the chairman, Legal and Monetar y
 actions are taken . (See Appendix, Section I, Item 132 . , 7   Affairs Subcommittee, evaluated the actions taken b y
    Audit work in process included reviews of suc h             the Department to implement recommendations mad e
 activities as the operation and maintenance of nnmic-          by the House Committee on Government Operation s
 ipal waste treatment plants, tite financial operation s        in 1964 concernin g collection of judgments, fines,
 of the Missouri River isasin project, and the interes t        penalties, and forfeitures and responded to question s
 ratecriteria used in determining the financing cos t           on the Department's judgment collection activitie s
 allocated to imunicipal and industrial water . Other           generated in hearings held by the subcommittee i n
 reviews were being made of the controls used to insur e        September 1969 . (See Appendix, Section I, Item 162 . )
 receipt of proper royalty payments for oil produce d              Reports to the Attorney General commented o n
 from leases on Federal lands, the Bureau of India n            opporttmities to reduce the mileage and per diem costs
 Affairs' financial management of friian trust monies ,         of U .S . marshals and deputy U .S . marshals and th e
 and the Bureau's progress in meeting the objectives o f        unauthorized hiring of certain employees by the Im-
 the Indian housing program .                                   migration and Naturalization Service . (See Appendix,
                                                                Section I, Items 1833, 181, and 163 . )
                                                                   A report to the Commissioner of Industries, Federa l
  Department of Justice                                         Prison industries, Inc ., included GAO's comments o n
                                                                the need to revise certain accounting policies and prac -
     During fiscal year 1970, fuur reports oil reviews of       ,ices. (See Appendix, Section I, Item 133 . )
  Department of Ju .ti-e ~jperations were submitted t o            Audit work in process included reviews of suc h
  the Conere v a to the Congress as a w_`iole and t , o         activities as collection practices, grants and contract s
  to the-cha' . .an of the Legal and Nfo: et,4ry Affairs        for law enforcement purposes, transportation of alien s
  Subcommittee, House Committee on Governmen t                  in the Southwest Region of the Immigration and Nat-
  Operations . Fourteen reports were issued to Depart-          uralization Service, and accelerated inspection an d
  ment or agency officials .                                    foreign preclearance of persons entering or en route to
- Fees charged by the Immigration and Naturaliza-               the United States .
  tion Service (INS) during fiscal year 1967 for certain
  services were insufficient, by about $2 .8 million, to re -
  cover costs while fees for other services exceede.i cost s    Department of Labor
 by about $2 .2 million . Some of th•_t fees had been estab-
  lished by statute, but legislation enacted in Octobe r           A major portion of C:AO's work at the Departmen t
  1968 authorized the Attorney General to set these             of Labor was directed toward reviews of the Neigh-
  fees . In response to recommendations that fees be se t       borhood Youth Corps, Concentrated Lmployment, an d
  to recover costs, the- Department said that it woul d         related programs authorized by the Economic Op-
  establish anew fee structure .                                portmity Act of 1964, as amended . Reviews of thes e
     Also, fees charged by L .S. marshals during fisca l        ptograms, which are administered 1w the Departmen t
  year 1968 for servin; processes for private litigant s        of Labor under authority delegated by the Office o f
  were insufficient by about $170:000 to recover costs .        Economic Opportunity ,. were made pursuant to th e
  The Department replied it was considering proposin g          requirements of section 201 of the Economic Op-
  legislation, as GAO recommended, which would an-              portunity Amendments of 1967 . During fiscal yea r
  thorize it to adjust the fees or would revise the fee s       1970, GAO submitted to the Congress 10 reports_ on
  presently prescribed by law, and that it concurred with       the effectiveness and administrative efficiency of th e
  GAO's recommendations for determining costs of serv-          Neighborhood Youth Corps program and four re -
  ices provided by the marshals and by INS . (See Ap-           ports on the Concentrated Employment program a t
  pendix, Section I, Item 224.)                                 select,d locations. !See page 67 .)
                                                                                               CIVIL OPERATION S

    Other major Federal manpower training program s          Congress as a whole and eight were submitted to it s
were also reviewed, including _(1)'the institutional, on -   committees or Members. In addition, 10 reports were
the-job training, and skill center programs authorize d      submitted to Department officials. These reviews cov-
by the Manpower Development and Training Act o f             ered varied activities, such as planning for large mech-
7962, as amended ; (2) the job_ Opportunities in th e        anized marl-Handling facilities, manpower utilizatio n
Business Sector program, (3) the Special Impact pro -        and staffing of postal facilities, and transportation an d
gram, (4) certain aspects of the Work Incentive pro -        delivery of mail .
gram authorized by the Social Security Act, and (5 )             GAO provided assistance to the Congress by com-
the operations of the JOB Bank, a computerized sys-          menting on the sixth proposal dealing with the mod-
tem for centralizing and disseminating job-order in -        ernization of postal operations through the establish-
formation operated by the Federal-State employmen t          ment of a Government corporation . In testifyin g
security offices. Reviews of departmental determina-         before the Senate and House Committees on Pos t
tions of prevailing wage rates under the Davis-Baco n        Office and Civil Service, GAO representatives stated
Act and related acts for federally financed residentia l     that some form of corporate structure could be justifie d
housing projects in selected States were also made .         for the Postal Service to provide management with a
    Pursuant to requests for information on certai n         greater degree of flexibility to better enable it to man-
Department of Labor operations and activities, si x          age its commercial operations on a business-type, self -
 reports were submitted to congressional committees o r      sustaining basis.
Members of Congress . In addition, six reports were              In one report to the Congress GAO estimated that ,
 issued to Department officials .                            of the costs incurred by the Post Office Department fo r
    One report informed the Department that the Man -        providing address correction service to postal patron s
 power Administration could improve services to jo b         in fiscal year 1969, at least $2 .8 million was not recov-
 applicants and employers in its administration of th e      ered from users of the service . The Postmaster General
 employment security program in the four States cov -        concurred in the proposal that the Department mak e
                                                             a cost study to ascertain the fees that should be charge d
Bred in the review . ' Other improvements needed i n
                                                             to recover the full costs of this service and stated tha t
 program procedures and application included a nee d
                                                             such a study had been undertaken . (See Appendix ,
 for the Manpowe r_ Administration to establish, and t o
                                                              Section I, Item 225 . )
 apply to all State employment security offices, criteria
                                                                 In another report GAO stated that the 8-hour day
 on when these offices should be closed or their opera -
                                                             of railway and highway Post Office employees include d
 lions curtailed . (See Appendix, Section I, Items 14 ,      an allowance of I hour and 35 minutes for performin g
  15, and 16 . )                                             duties, such as stamping facing slips and preparin g
    In Alav 1970 GAO representatives testified at the
                                                             labels, while away from the mobile units . Because of
 request of the chairman, Select Subcommittee o n             changed operating conditions since the allowance was
 Labor, House Committee on Education and Labor ,             established, most of these duties have been eliminate d
 and the chairman, Subcommittee on Employment ,              or could be eliminated or reduced . In view of the
 Manpower and Poverty, Senate Committee on Labo r
                                                              potential for considerable savings, the Post Offic e
 and Public Welfare, on GAO's preliminary findings           should establish realistic work schedules for these em-
 and observations in the review of the program results
                                                              ployees and request a change in applicable legislatio n
 and administrative efficiency of the jobOpportunitie s       if desirable or necessary .
 in the Business Sector program .                                The Department agreed that conditions had substan-
                                                              tially changed and that the allowance may be in exces s
Post Office     Departmen t                                  of Curren needs. The Department also stateu that an
                                                              80-percent reduction in mobile unit employees had
   Ten reports on reviews of Post Office Departuieu t        been made since February 1. 967 and that further re-
activities were submitted to the Congress in fiscal yea r    ductions might be made . If it found that a certain
 1970. Two of these reports were submitted to the            amount of mobile unit service would be needed in-


definitely, it worrld consider whatever adjustments were      States were unwilling to accept the results as a basi s
appropriate.GAO believes, however, that timely cor-           for determining the extent of Federal participation i n
rective action is needed inasriiuch'as the costs are stil l   the acquisition costs .
substantial . (See Appendix, Section I, Item 175 . )              In spite of the problems noted, retrospective ap-
   In view of the concern expressed by Mcmbers of th e        praisal programs, if properly planned and executed ,
Congress regarding the usefulness of the Department' s        could be used effectively when the extent of Federa l
cost ascertainment report, GAO suggested that th e            participation is found to be questionable. The Depart-
Department eliminate unnecessary detail and repeti-           ment of Transportation took or promised to take
tion and correct certain inconsistencies and other deft-      actions which should minimize recurrence of thes e
cieucies in the report . The Department' s revise d           problems . (See Appendix, Section L Item 31 . )
format, used in the report for fiscal year 1969, incorpo-         GAO stated in another report to the Congress tha t
rates most of the changes suggested . (See Appendix ,         there \g ill be a continuing need to periodically up -
Section I, 1 tern 134 . )                                     grade, through additional construction (overlays) ,
   Audit work in process included reviews of suc h            completed segments of the Interstate Highway Systern .
activities as the maintenance and repair of mechanized        Although the Department did not concur in the need
mail-handling equipment, the transportation an d              for the actions GAO proposed to improve the admin-
delivery of mail, manpower utilization, and researc h         istration of the overlay prot;rarn . GAO recommende d
and engineering activities .                                  that FIINVA establish maintenance standards for th e
                                                              Interstate System ; recognize through linritim , th e
                                                              amount of Federal participation, that overlays reliev e
Department of Transportatio n                                 the States of a portion of their maintenance responsi-
                                                              bilities ; and establish uniform standards to provid e
   A significant portion of GAO's audit effort in th e        more assurance that overlays are applied in a timel y
Department of Transportation was devoted to review s
                                                              manner and in the proper amount.
of programs related to (I ;i the Federal :Aviation Ad -           Because of the long term need for overlays and th e
ministration's (FAA) efforts to automate and improv e         substantial costs invoked . which vastly exceed the
the air traffic control system, (2) FAA's air safet y         amount reported to the Congress, and because the in -
activities, (3) the Federal Highway Administration' s         tent of the Congress was not clear . GAO suggeste d
 FHt1'Al-administration of certain Interstate High -          that the Congress aright wish 1 < to express its inten t
way prograin activities and right-of-way acquisitio n         relative to the use of Interstate funds to upgrade com-
appraisals, and { } i the Coast Guard ' s vessel construc-    pleted segments of the Interstate System and (2) t o
tion and search and rescue activities .                       consider the long term need for overlays in its delibera -
   Seventeen -reports were submitted to the Congr es s         tions ore tht• funding of the Interstate System, an y
on reviews of Department operations : three of these          future expansions thereof, or any follow-on highway
\%-ere submitted to Congress as a whole and 1-1 wei e         programs. iSce Appendix, Section I, Item 30 . i
submitted to its committees, or Members . Also, Depart-           Another report to the Congress expressed GAO' s
rnentor agency officials were issued 1-1 reports .            opinion on the financial statements of the Saint Lavw-
   In one report to the Congress GAO commented that ,          rettce Seaway Development Corporation for the calen-
because of unsatisfactory practices . FI-IWA require( ]       dar year 1968.
five States to evaluate the reasonableness of the cost o f         Reports to the Secretary of Transportation conr-
rights-of-way acquired in prior years. These retrospec-       mented on the need to determine the underlyin g
tive appraisal programs confirmed that many appraisal s       calls(- ,, and necessary preventive measures for certai n
did not provide a reasonable basis for determining the        general aviation accidents, the need to monitor th e
federal share of the cost .                                    time required for processing proposed or amended ai r
   To a large extent, these programs were inadequatel y       safety regulations_ and certain charges to the C;overn -
planned and executed and, as a result, differed amon g         q tentfor the design of it supersonic t r ansport engine .
the States. Because them was no prior agreement, the               In another report to the Svc•retar\ GAO stated tha t

                                                                                                      CIVIL OPERATION S

the Coast Guard would benefit front a financial man-             classifications . Also . there wa, it need to im p rove cos t
a<,ement system that tt'ould jiroviele for the, um of in-        accountir>_ to provide better financial information fo r
ternal lost-based hud_ets, based 'on and its( (I in con -        management through more accurate matchimz of th e
junction with an accoitntin' SySteu : that would develo p        cost of resomcos used kith the tittle periods in tyhic h
and ieport cost dat,t r'onsistcnt with internal budgetar y       the}' were used . "See :Appendix, Section I . p ent 135 .
                                                                     _Audit work in process included reyietcs of program s
                                                                 related to F A .A-s efforts to automate and improve th e
                                                                 air traffic control system : aircraft and 1li_ht pro__ranis ;
                                                                 operations at Washington National and Dulles Inter -
                                                                 national :Airports ; FH«' .A's hiEdi ay construction ac-
                                                                  tivities on the various Federal-aid systems ; and its
                                                                 transportation planning and highway sales programs ;
                                                                  the Coast Guard ' s value engineering and public famil y
                                                                 housin" pro ot.ams : the Pedet of Railroad Administra-
                                                                  tion's hi,,ll Speed ";round nan,portatiou program : the.
                                                                  Northeast Corridor transportation project : and the ad -
                                                                 ministration of urban mass transportation grarnts .
                                                                     During' the year G :AO still]' worked closely wit h
                                                                 staff members of the Gotertnncnt Activities ')it)) -
                                                                  committee . House Committee on Government Opera-
                                                                  tions, in its consideration of problems related to th e
                            r~ >                                  automation of the air traffic control system .

                         •f -

                                                                            These picturcc of a section ot air interstate high-
                                                                              z, .a1~ thou- cracks and depreisiartr it, the whee l
                                                                              path, Thi; ,ecuon has been o er ;aid since these
                                                                              pictures zecre taken .


Treasury      Department                                         defer submitting legislative proposals to revise th e
                                                                 method of financing Bureau operations . (See Appen-
    During the fiscal year, GAO submitted to reports to          dix . Section I . Item 136 . )
the, Congress oil reviews of Treasury Department op-                In order to obtain the full benefits of price com-
erations : four of these ieports there to the Congress a s       petition front the sale of excess si lv er to small business
it whole <tnd six were to its committees or Members .            concerns. GAO suggested that the Treasury Depart-
Also, Department or l,ency officials were issued 2 8             ntent require the General Services Administratio n
reports .                                                        (GSA", the selling agent, to sell such silv er on a scaled-
    In Order for internal auditing to be a more effectiv e       cempetitive-bid basis but at not less than an establishe d
<undintegral part of the ;I'reasury Department's man-            nrinini uir acceptable price . Sales to small business
agennent control system, GAO suggested that the in-              concerns were being made oh a noncompetitive basis
ternal audit staff's in the Department's 10 operating            at the lowest bid price accepted in concurrent cotn-
bureaus and offices, with the exception of the Internal          petitive sales ir. which small business concerts ha d
Revenue Service (IRS) staff, be consolidated, that th e          broadly participated . Oh May 20, 1969, GSA an-
consolidated organization be responsible to the highes t         nounced that the silv er set aside for small busines s
authority practicable : that reviews in addition to thos e       concerns would be offered for sale to small busines s
of financial matters he rnade . and that IRS internal            concerns on the basis GAO had suggested . (See Ap-
audit activities be subject to departmental guideline s          pendix, Section I, Item 213 . )
and continuing appraisal .                                          Reporting on an examination of the financial state-
    The Department believed that its present interna l           ments of ttte Bureau of En,_gax in r and Printing Fond,
audit system could best accomplish these sugeestions .           GAO stated that, in response to a proposal made in a
The L nder Seeretary stated that he did not think i t            prior G_1O report . the Bureau had made a commend -
was the proper tintcto ronso l i clate the audit staffs or t o   able but unsuccessful effort to chcourage other sup -
change their rehortin- 1, —v,!. GAO's report therefore           pliers to bid on Bureau currency' paper requirements .
contained recommendations for strengthening the De-              However, cost reductions totaling S555 .755 twill b e
partmenis internal audit scstcnr within its presen t             achieved Deer a . 1-year period because the BUrea n
ok,, anizational structure . 'rhe Department planned t o         changed from all annual to a d-year contract beeinnint-
implement, in taryin~ degrees, most of these recont-             in fiscal year 1970 and the supplier--the only b idder—
niendations :-(See Appendix, Section I, Item 1-Iq i              was awarded it contract at it lower unit price tha n
    A report - to the Secretary of the "FreasmV com-             the 1969 unit price.
mented un the need to improve internal auditing in th e             In the absence of adequate and effective competi-
Internal (revenue Service . (See Appendix, Section 1 ,           tion, hotceyer, the Bureau needs to have better assur-
Item 150.                                                        ance as to the reasonableness of the prices for run enc y
    Another report stated that the Bureau of the _flin t         paper. GAO therefore su vested that, if there- is a n
needed better information for use of the C ongniss and           absence of adequate and effective competition in th e
for its own its (, in managing, its operations and neede d       future, dtc Bureau negotiate a contract on the basi s
to revieth its entir e data processing rcquirenunts . Also .     of the supplier's certified cn<t or pricing data in accord -
                                                                 ance ,kith the Gode of Federal Re g ulations . GAO wa s
a revision in the method of financing Bureau opera-
                                                                 infornlc-d that the Bureau Director intended to adop t
tions would enable the Congress to stren rthen its cot ; -
                                                                 phi, su ~restion . (See Appendix, Section 1, Item 101 ;
trol over Bureau activities, Hermit ,greater flexibilit y
                                                                    Reports to con,ressiona! committees or \lentbcrs o f
in planning coin unanufacttrin,, and simplify fivanci n
                                                                 Congress on reviews tuade at their request concerne d
procedures. 'Phis revision would require congressiona l          such matters as procedures for offcring~ marketabl e
action .                                                         obligations of the 1 -wasury Department, execs cos t
   'rhe Ttcasury Department alueed with most o f                 of issuing participation cettific .ttes by the Federal X'a-
GAO's proposals but cited it need for (I ) Bureau o f            t ono ; AIorwage Asscuiation over the cost of obtainin g
thr Bud-et approval rc ardirwl tenision, of its finz.ncia l      funds tluc ,,glt ditect borrowim,s Lw the Treasury . an d
reports and (2 i sufficient qualified personnel to estab-        cancellation and destruction of onfit currency at %art-
lish - a centralized arc=ountint system using automati c         ous I-ederal Reserve banks and hrattches .
data ptoccssing aquipt cut- Ali Assistant Secre tar,- of            Reports to aofency officials related to such matter s
the fteastuY belictcd that the Department shoul d                as internal audit activities at the Bureau of Customs,


                                                                                                            CIVIL OPERATION S

    cmuW over- bonded jet fuel withdrawn by air carriers                undertaken at the v qwu of be Joint Committee "Al l
    at selected locations, procedures governing the ex-                 respect to I t development of warheads for the SAFE -
    amination of imports prior to assessirient of duty ,                GUARD antiballistic mkzile y~tcin . 2 issues rolatim t
    selected activities, of the IRS data center in QUA L                to the possible cstab I islinwnt of a( Cioyernment uraniu m
    Mich . 1 need for retaining unissued gold and sih'e r               cruhhurreta vweq&w . A development of the Janu s
    certificates, and settlement of accounts of accountabl e            reactor complex for biolovical ic,vatch by thuAr.,ann e
    officers.                                                           \aticnal I-aboratory, and , -1 proposals by AII : con-
       Audit work in process included reviews of such mat -             cerning plutonium sales policies and Inicin g .
    tens as the use of resources at IRS smwice centers, mwe -              During fiscal year 1969_ at be request Of the Join t
    housing of imported metal_-hearing ores . administra-               Committee . GAO examined certain factors relatin g
    tion of accounts icceivable resulting from import du          -     to the PMUC Irma" of MIA dmv "sum" IN -
    0s, we of dutphee jet ILICI by aircraft simultaneously              lion plants to private ownership and iSNU(-d t\r(, IC-
    engaged in domestic and forvi g"i trade, and rent-fre e             ports to the committee an that sul ;ject . AS a followu p
    cue of SIXICC in G ONT I'll 1110 11 t -OW tied buildings by th e    to that request, GAO iepium-ntatkes testified befor e
    Office of the Comptroller of the Currency.                          the committee on July 9- 1969 . on the results of the
                                                                        review .
                                                                           Because of the importance of this matter . the com-
    Atomic Energy Commissio n                                           mittee requested additional studies of the question o f
                                                                        future ownership of AEC', -,asvous diffusion plants .
      GAO submitted seven reports to the joint Corn-                    particularly with respect to the vstablislnnent of a Gov-
    ruittee on Atomic Energy and hued five reports to                   ernment I-ImAwn enrichment rcuTnIvAn . GAO's re-
    agency officials on various activities of An A"nie En-              port stated that the roost KWormm mmwm !"W d
    ergy Ownrnission (AEC n Pknariy these reviews were                  in a possible transfer of AEC's uranium enrichmen t



                                       ~nn     ~O~,
                                  Mj                      - t dig
                                                                As     10


    Th e Atomic Energy COlanlissiol"v Oak Ridge Gavenvv Dijfn s-`,)n Plant . Maj- facilities include : high-enriching facilities (i n
         MAV : ta"wirurns, YAW K : bolur production pMw and related jarititie+l e-weh and deMoprent ja,ililies :
         uranium irwentory facilities and    Nmge arms ;   W    adminwialu c . maintenance . wit other support arliuilio .


 function to -a Government enterprise were (1) issue s           and continued tonnake payments to a contractor who
 pertaining to the functions, facilities, and material s         Was not complying with contract terms . In response to
 related illuranium enrichment, .-(2) organization and           GA O's proposals, AhC informed GAO of actions tha t
 rnanaf,tlnent of enrichment activities, and (3) capi-           had been taken or which AEG and the center propose d
 talization and financing_ Also, a-number of alternative s       to take upon expiration of the contracts on little 30 ,
 for future ownership of the uranium enterprise wer e            1970 . (See Appendix, Section I, Item 112 . 1
 identified, ranging from AEC ownership with author-                In another report to the Chairman, AEC, GAO
 ity to borrow fluids to a mixed (;overrtrlrerrt-industr y       commented on the fact that :AEC ryas not represente d
 Corporation, and the -advantages and disadvantages o f          on, not did its representatives attend as observers a t
each were discussed . ;See =Appendix, Section I, Ite m           meetings of, committees established to select the mos t
 62 . )                                                          appropriate experiments to he conducted on its Con-
    On June 17, 1970, GAO representatives testifie d             tractor-operated accelerators tinder the national hig h
 before the committee regarding ( I j it proposal to             energy physics research program . _AEC agreed to adop t
establish prices for uranium enrichment services pro-            GAO's proposals on this matter and on the need fo r
 vided by AEC oil a eonunercial basis rather than on a           evaluation and approval of an%- automated systems sug -
cost reinibuiseinent basis and (2) a proposed price              gested by the contractors foi analyzing experimenta l
 increase based oil the new criteria. A report on this           data, ! See .Appendix, Section 1, Items 12 :i and 124. 1
subject was submitted to the committee shortly afte r
 the close of the fiscal year .
    A report to the joint Committee oil the develop-             Civil Service Commissio n
ntent of theJanus reactor complex at AEC's Argonn e
.National Laboratory connnented on the. Causes o f                   A significant portion of GAO's audit effort in th e
delay's, cost increases, and other problems encountered .         Civil Service Commission ryas devoted to reviewin g
'I'he report stated that there was a need, with respec t          the administration of selected aspects of the Federa l
to future developmental projects invol ving the con-              employees health benefits and group life insuranc e
strnctiou of costly new facilitieswith operating- funds ,         programs. The proposed design for the automated ac -
for Argonne to develop and provide to AEC (1) i t                 counting s\steu7 for the administrative, [fiscal . an d
schedule for conrpletit>g the major steps invol v ed i n          budgetary activities of the Commission \vas also re -
project development, (2) a description of the or-                 viewed and approved .
ganization to be used in managing the project, and (3 )              During the year one report was submitted to th e
the effects anticipated, front other work, on the Labora -        Congress, quc to a \Iemher of the Congress, and fora '
torc's ability to keep theproject on schedule. Improve-           to Cornrrnissiori official s
irnernts were proposed in Argonne's method of account -              Onc report stated that the Commission had admin-
inn for the costs of such projects and AEC :'s procedure s        istered the Federal employees' group life insurance pro-
for coordinating the development of reactor projects             graor in it general) satisfactory marina- ; however, the
for use in programs of its research divisions . AEC: an d        administration of the prograrrr could he improved by
.Argonne agreed to accept the proposals . (See Ap-                Stnn ,gthening nianagenreut controls_ over certain as-
pendix, Section I, Itenn 122 . )                                  pects of tilt' III nKraill .
   Two reports to the joint Committee related to re -                GAO reronullended t 1 t requiring accounting sup -
views of AEC proposals Concerning the price of Pluto-             port for certain cost charged to the progr:un by the
                                                                  principal insurance carrier and paid for on the basis o f
ilium and the teinis for foreign sales .
                                                                 it fixed percentage of - _rotis premimns, 2i rcamring th e
   GAO reported to the Chahrnan . AEC, thatsuhstan-
                                                                 carrier to report systennatically to the Commission o n
tial savings might have accrued if a research cente r
                                                                 all program funds held by it . t3 independently evalu-
operating under a cost-hype contract with .AEC ha d              ating the reasonableness of the charge made by th e
beenablc: to negotiate' agreements \y tli contractors sup -      carrier when an inNured employee converts to all in-
plying._klystron-tubes to lintitpavnic-nts to the contrac -      dividual policy, and t1 4 % including the deficiency under
tors for horns of riche use if tube life prowd, as it did ,      the life inSUrmice' agreements of certain employees '
to he substantially longer than expected . .Aso, the cen-        heteficiai associations in the foam ission's actuaria l
ter diet not obtain certified cost or pr icing data flout th e   valuations of its regular insurance progr .iiur . ' Fliv Com -
contractors is a basis lot- in ice tregotiation, is required .   mission took of pronnised to take action on all of these

                                                                                                     CIVIL OPERATION S

recommendations . !'See Appendix . Section 1, Items               analyzing and comparing costs and labor horns on in -
176, 177, 178, and 1"i9 . )                                       house projects with those oil contact work, Miel e
  At June 30, 1970, a report oil a review of the Gov-             feasible . and with advance= estimates : also. that criteri a
ernment-wide service benefit plan under the Federa l              be developed prescribing the repair and tnaintenauce
ennployees ' health benefits program was being prepare d          vmik to be perfomwd by school custodians . t ;_AO wa s
and a review of the 0-innnissimi s administration of th e         informed that conrctive action would be taken . i See
Government-wide hulenutity benefit plan under thi s               Appendix . Section 1, [rein 173 . ?
program had started .                                                 In a report on automatic data pros e sing GAO com-
                                                                  mented on the practice of certain departments an d
                                                                  anencies of the District acquirint; their osln computers
District of Columbia Governmen t                                  or contracting for data processing services althoug h
                                                                  time for some of this amrk was available on existin g
    GAO ' subniitted six reports to the Gem,=Tess nn I'(, -       District computer facilities. Also, more tithe would
views of District of Columbia operations . Three ci f             have been available and some duplication of data proc-
these reports were submitted to the Congress as a whol e          essing_ could have been avoided if the facilities ha d
and threewere submitted to its committees or Mem-                 been operated more efficiently . Iistrict officials aitrced .
bers: Also issued were three reports to the Commnis-              in i_, eneial, with these findings, and corrective action s
sioner. District of Columbia Government, three report s           are heir -, talo n . or are planned, for expanded coordi-
to department or agency officials, and one report t o             nation of data processing all(] sharing of computer sys-
the General Alana,cr FAashingtonNicuopolitanAre a                 tenis. =See Appendix, Section 1 . Item 193 . )
`Transit Authority . Selected District-wide operatioi s              Statistical inf,)rniation regarding the level of en v
and activities in right District departments were ce-             plocment and expenditures for certain activities in th e
x'imml, including operations related to procurcnnent ,            District of Columbia and seven other cities was ftu--
buildinq, construction and maintenance, payroll admin-            nished to the chairman, District of Cohunbia Subcom-
istration, and motor vehicle nian ;uUenwnt _                      mittee . Semw. Conunittce oil Appropiiations. Also, 1 6
    One report ant building construction inspection s             papers covering reviews of various District activitie s
stated that the District had not trade required or rec-           were furnished to the stall director of that sauce sub -
onmiended tests to determine whether concrete me t                committee at his request to assist the subcommittee i n
specifications : had accepted concrete that dill not mee t         iecieiying the District's fiscal year i971 appropriatio n
specifications : had not received required sanni li a . ;clo p    request .
drimiligs, descriptive liteiative . and icillfications to            Jn reports to the Coiiunissioner of the District o f
determine whether materials, equipment, and system s              ( :olunlhia, GAO commented on the need to study pro-
~net specifications : g ild had accrptccl compacted soi l         curement of fitted equipment to be installed in newl y
  fill and backtill) ibaL slid not neet specifications . 'I-h e   constructed schools and nu the need for the Depart-
District took action to improve its inspections be pro-           ment of General :Administation to follow its operatin g
viding, nrtded ~guidance and test equipment to it s               procedures for the selection and evaluation of architect-
inspectors and be implentegtinR a better system for le -          engineer firms .
poi tit>l, and rek ie in =t'esults of inspection activities .        Audit \ p ork in process included reviev,s of selecte d
  See Appenclix . Section I, 1 rein 92 . )                        activities in the Department of Public Health . Sanitai y
    In another report GAO stated that the Disti ices pe r         l;n>,, ineeiing, Public Welfare, lligbways and Traffic .
pupil cost of rep airing and maintaining school build-            and 1:co110mic Developnaun, as well as i,eneral re-
                                                                  6eNws related to ne ntiated seivices contr acts, non -
ing's was :sigtthevnth- higher than other school systems '
                                                                  tax revenue collections. and motor equipmen t
costs ; the cost of painting work performed by its paint-
                                                                  management .
eis was higher than the cost of _similar work performe d
under contract ; its work force took about 96 percen t
more tinie to do ceriain repair and maintenance. vwr k
                                                                  General Services Administratio n
than had been estimated : and school custodians wer e
not performing minor maintenance work-, GAO Iecotn-                  :A significant portion of GAO's audit effort ill the _
mended thatinfotmatiott provided 1w the District ' s ac-          General Services Administration (GSA) was devote d
couittin.- systeni be used more effectiveh through                to reviewiii!= supply management, transportation and

communications, buildings management, and prop-                 der these programs be reviewed by GSA interne' audi-
erty tuaua~winent activities . 'flu'ee reports were sub-        tors . t_See .Appendix, Section 1 . Item 196 . ?
uiitted to the Congress as a whole and nine were sub-               The third report to the Congress related to furnish -
mitted to its committees or Members. Also, 15 report s          in ',, supplies to Goverrunent agencies overseas . 'I'h e
were issued to the Administrator of General Service s           Federal Supply Service operates depots in each o f
or other agency officials.                                      GSA's 10 regions in which cornnton-use items ar e
    One report to the Congress related to actions taken         warehoused for sale to Government agencies locate d
by GSA after ntanagentent responsibility for stock s            in the continental United States or overseas . A test i n
valued at about- $19 .5 million and representing 5 2            the largest export region showed that a high percentag e
Federal supply classes was transferred from the De-
                                                                of export requisitions were not filled in the prescribe d
partment of Defense (DOD) to GSA on July 1, 1967 .
                                                                processing time . In general . GSA management was
1 `ests after the transfer showed substantial discrep-
                                                                receptive to GAO suggestions for improving suppl y
ancies in GSA's inventcny records, and subsequen t
tests by DOD shov=ed that stocks valued at about $ 5            effectiveness, and actions were taken to carte ou t
million had not been included in the records an d               GAO suggestions (See Appendix, Section I, Ite m
therefore were , lost- ' to tlte. Supply system . As a           16-1 . 1
result, GSA purchased some identical stocks and di d                 In a report to the Administrator of General Serv-
not, in some cases, fill requisitions in a timely manne r       ices, GAO suggested that, when changes in publi c
because it did not know that the items were o n                 building construction project specifications are ap-
hand . ,                                                        proved, consideration he given to whether the related
    GAO believes that these deficiencies arose becaus e         construction standards--which are used in developin g
procedures adopted as a result of a previous GAO re -            the project plans and specifications--should also b e
port on the transfer of handtools and paint had no t            changed . GSA did revise its procedures to enabl e
been effectively implemented with respect to the 5 2             the central office to give such consideration, but th e
Masses. GAO was informed that additional manage-                value of the revised procedures would be enhanced i f
mentcontrols would be applied to future transfers to             the regional offices would suggest revisions and submit
insure that past difficulties were not repeated . (Se e          their reasons when they believe the standards shoul d
:Appendix, Section I, Item 195 . )                              be revised . ;Sec Appendix . Section I, Item 208, )
    Another report concerned the presence of nones-                  Audit work in process included reviews of GSA' s
scntial items in GSA's stock system through which i t           activities under Public Lave 89-306, which places o n
makes available conitnon-use supplies and equipmen t             GSA certain Government-v%°idc responsibilities fo r
needed by Federal agencies and Government-relate d               tnanagement of autos , tic data processing equipment ,
organizations . -GSA did not have an effective pro -
grain for for eliminating nonessential items--inactive, low -
demand, and uneconomical items—from the system .                National Aeronautics an d
Data gathered at GAO's request showed that ther e               Space Administratio n
were over 15,000 items, valued at more than S15 mil -
lio n; for which less than six orders were received durin g        GAO's \cork in the National :Aeronautics an d
 fiscal. near 1969. No orders were received for abou t          Space Administration (NASA , during the fiscal year
6,27,5 of these items . GAO also cited examples where           1970 %+as perforntcd at NASA headquarters and a t
elimination of items which u vere more expensive tha n          various NASA Field installations. Eleven reports were
other available items with similar or identical char-           submitted to the Gongress--wo to the Congress as a
acteristics couldhave saved up to 5768 .000 in fisca l          whole and nine to committees or Members. In addi-
year 1969 .                                                     tion_ agency officials were issued five reports . Th e
    In response to GAO's prol)OSaIS, ( ;SA intplcmcute d        reviews .ere concerned ptincipalh• with the ade-
a program to delete inactive and low-demand item s              quac of management controls over space research an d
 and established tt program, which would receive con-           development programs, contracting and procurement.
 certed-effort previously lacking, to eluuinate uneco-          and Various administrative activities .
 nontical items . GAO recommended that progress un -               A review of selected procurement contracts which

                             y                                                                                                  CIVIL OPERATION S

                 r                ,
                      s. ~

              UNMANNED -
              SCIENTIFI C
              SATELLITE -                       ,

                                               TRACKING STATIONS RECORD DAT A
      -         --                                  FROM SATELLITES ON
                                                   MAGNETIC ANALOG TAPE

                                                                                                                                                         `._- -
                                                                                 `                                       WORLD–WIDE
                                                                                                                         NETWORK OF        I
                                                                                             @} \ r..                     TRACKING
                                                                                                                          STATION S
                                                                                     ~           t .Yt

                                                                               ANALOG DATA
                                                                             TAPES ARE SHIPPE D
                                                                              TO THE GODDAR D
                                                                            SPACE FLIGHT CENT[..- R

                         LEGEND          NO . OF TAPES                                                                          _
                                                                                                                  •,rra a
          `          ANALOG DATA TAPE       489,000                  :art                            'r   %                         r~r`       f* .!   VN't

                -~ DIGITAL DATA TAPE        355,000                                                                 "d',i'p }   r               sJ sj

                                                                                             .                                                                          i
                                                                                                 rri                                                              L . ~w:
                     TYPE OF DATA TAPE                           /          /X                                7    ' 1
                       UNDETERMINED          8 4_ 0,0 0

                                                                                                                                                              I       r.
                                            9 :800           :                                          nl . . I: I C'~ !1                 Z
                                                                                                  GREENBELT MARYLAND                            '.-

                      Systcm j or eeei-ring and recording data {or processing at the Goddard Space Flight Center .

provided incentives of about $26 .2 million for accel-       National Science Foundatio n
erati nng delivery schedules showed that the incentive s
                                                                 GAO audit efforts at the National Science •ounda-
were not needed . NASA contracts containing incentiv e
                                                             tion (NSF? during fiscal year 1970 were directe d
provisions amounted to about $6 .7 billion as of Jun e
                                                             principally to (1 ) the grant-supported program for
30, 1969 .
                                                             developing the scientific research and educationa l
    NASA disagreed that the incentives were not needed
but subsequently issued an incentive contracting guid e      capabilities of universities. (2) operations at the Na-
jointly with the Department of Defense which state s         tional Radio Astronomy Observatory in Green Bank ,
that rewards for advancing delivery schedules ar e           NV . Na .---one of five NSF-supported national researc h
                                                             centers in astronomy and the atmospheric sciences, an d
usually not advisable and that, generally, penalty-onl y
incentives are the most appropriate ineans of insur-          (3) the progr.ants for promoting, the development an d
 ing delivery on schedule . The new guidelines, if prop-     improvement of national systems for the disseminatio n
erly implemented, should preclude a recurrence of th e       of scientific and technical information .
situations' described in this report . (See Appendix,            Two reports Nvere transmitted to the Director, NSF ,
                                                              on the results of GAO audit work .
 Section 1, Item 105 . )
     NASA's Goddard Space Flight Center was pur-                  NSF was crediting certain income generated unde r
 chasing large quantities of new magnetic data tape s         grant-supported activities to appropriated funds fo r
                                                              further use in NSF's programs rather than depositin g
 instead of rehabilitating used tapes, substantial quan-
 tities of which Ncere being stored for indefinite periods    such income into the U .S . Treasury as miscellaneou s
 because of inadequate procedures for making the m            receipts . After CIAO stated that this practice was im-
                                                              proper in the absence of specific statutory authority ,
 available for reuse . Also, Goddard was not realizin g
                                                              NSF said that the practice would he discontinued . fSee
 the full sayings possible front greater use of reliabili-
 tated tapes because of its limited capacity for              Appendix, Section I, Item 138 . )
                                                                  Also, certain administrative procedures at the con-
rehabilitation .
   NASA took significant action to improve the con-           tractor-operated National Radio Astronomy Observa-
trols over magnetic. tapes and agreed to stocky way s         tory needed improvement. Sayings were availabl e
of increasing Goddard's capacity for rehabilitation .         through increased use of General Services Administ ra-
After GAO stated that additional action was desir-            tion sources of supply ; adequate records of the use o f
able. NASA agreed to study ways for further improve-          Government-owned vehicles were needed ; claims fo r
ment . (See Appendix, Section I . Item 197 . )                refunds of State fuel tax should have been filed ; and
   A report to the Administrator, NASA, stated tha t          timekeeping, practices for the contractor's hourly wag e
NASA needed to establish objective output measure-            employees needed to be strengthened . NSF advised
ment standards for,deteimining fees to be awarde d             GAO that these recommendations for corrective actio n
to support service contractors haying cost plus awar d         could receive prompt attention . (See Appendix, Sec-
fee contracts with NASA . Although such contract s             tion 1 . Items 11-1 and 198 . )
provide for fees based on evaluations of the qualit y              In accordance with suggestions GAO had previousl y
of the contractor's performance, GAO surveys indi-             made, NSF reorganized its audit office in May 1970 t o
cated that fees were paid which could not be readil y          broaden the scope of internal audits and include com-
related to performance . NASA stated that its con-             prehensive examinations of program managemen t
tracting-guide would be revised to recognize its more          activities and practices . This action should strengthe n
recent experience in the use of award fee contracts .           the effectiveness of the audit office's work and increas e
 (See Appendix, Section I, Item 89 . )                         its usefulness to management .
   Audit work in process_ included reviews of suc h                :A report to the Congress on support by NSF an d
acts Ides as logistics operations, use of consultants ,
                                                                the Nayv of shore facilities and vessels for researc h
 procurement, actions taken by NASA and the Ai r
                                                                activities at oceanographic institutions was in proces s
 Force to eliminate;- duplicate` functions, the Skyla b
                                                                at June 30, 1970 Also underway was a survey of th e
 project, and the use of automatic data processing
 equipment.                                                     Ocean Sediment Coring program, it national research

                                                                                            CIVIL OPERATION S

pro.grain for conducting studies' and analyses of core     evaluations, economic development and demonstratio n
material obtained from the (feel) sea floors .             programs, and 0h0-11111ded credit unions .

Office of   Economic     Opportunit y                      Small Business Administratio n

   During fiscal year -1970 GAO completed the re -            GA0 submitted one report to the Congress and tv o
views and reports to the Congress required by section      reports to Members of the Congress on Small Busines s
201- of the Economic Opportunity Amendments o f            Administration (SBA) activities . Also, three reports
1967 which authorized and directed the Comptrolle r        were issued to in cncy officials .
General of the United States to make all investigatio n       In the report to the Congress, GAO expressed th e
of programs and activities financed in whole or in part    opinion that analyses made by SBA loan specialists o f
by funds authorized under the Economic Opportunit y        borrowers business operations and financial condition s
Act of 1964 to determine the efficiency of the adminis-    were not sufficiently. c0111prchensive to adequately de-
tration of such programs and the extent to which suc h     termine whether repayment of loans %vas reasonably
programs achieve theobjectives set forth in the act .      assured from borrowe,s' earnings . 'rhe Administrator,
    Seventeen reports were submitted to the Congres s      SBA, stated, in response to GAO's suggestions, tha t
covering the effectiveness_ and administration a t         actions had been taken to improve supervision ove r
selected locations of Community Action, Job Corps ,        loan processing. 'These actions, if properl imple-
and other economic opportunity programs adminis-           mented, will result in intprcn•emeuts . but more specifi c
tered by OEO . In addition, 19 reports were submitte d     criteria should be provided to the loan specialists for
covering- the effectiveness and administration a t         determining when additional financial data should b e
selected locations of the Concentrated Employmen t         obtained . i See Appendix, Section 1, Item 39 .
and Neighborhood Youth Corps programs achninis-               Reports issued to agency officials dealt %%ith effort s
tered by the Department of Labor, the Work Experi-         of SBA to increase participation by private lending in-
ence and Training prog*rant administered by the De-        stitutions in its business loan program and with th e
                                                           valuation of collateral offered to secure SBA loans .
partment of Health, Education, and Welfare, and th e
                                                              Audit %cork in process included a revie%% of the smal l
Economic Oppor'tunitV Loan program for low incom e
rural families administered by the Farmers Home Ad -       business investment company program .
ministration, Department of Agriculture, under all .
thority- delegated by OEO f see pages 56, 50, and -15) .   Veterans Administratio n
   'I'hcse reports supplemented -a report submitted t o
the Congress oil March 18, 1969 (B–130515) sum-                At the Veterans Administration (NA), GAO re-
marizing GAO findings and recommendations result-          viewed selected phases of the medical, compensatio n
ing from the reviews made pursuant to section 201 .        and pension, loan guaranty, insurance, facilities con-
(See the -Comptroller {general's Annual Report fo r        st-uction, education, and supply management pro -
fiscal \ear 1969 . be,6nningr at page W )                  grams and submitted H reports to the Congress, in-
   Twenty-two reports o-cre submitted to committee s       cluding six reports to the Congress as a whole and
or Members of Congress on reviews of OEO-operate d         eight to its committees or Members . Twenty-nixie re-
programs utacle. at them request and one report wa s       ports were also issued to agency officials .
issued to OEO .                                               In addition to the above-mentioned reports GAO
   Audit work in process included reviews of activities    submitted comments to congressional committees o n
of specific community action agencies made pursuan t       legislative proposals concerning commercial insuranc e
to requests of committees or Members of Congress,          companies' absorbing, to a certain extent, the cost of
manpower training programs carried out by Opportu-         hospital care for non-service-connected disabilities and
nity Indiist•ialiation cenicus, Comprchcnsive Health       on the centralized administration of a programoftrain-
Services programs contracts for support services and       in g for interns or residents.


        In one report, GAO stated that VA's medical car e           in making simultaneous analyses of specific function s
    cost accounting system, which accounted for appropri-           or programs at several stations . Also, both audit group s
    ations of about $1 .4 billion in fiscal year 1968, coul d       reported to officials who were directly responsible fo r
    be revised to provide more useful cost data on th e             certain operations that the auditors reviewed .
    various medical activities conducted by VA hospital s              VA informed GAO that, in consonance with GA O
    and othe r, medical facilities . At the time of the review ,    recommendations, it would conduct more of the broa d
    VA was planning to inake certain revisions . In imple-           progrwn-tvpe audits, the two groups had been consoli-
    menting these changes, VA gave careful consideration            dated, and they would report directly to the Deputy
    to GAO suggestions and made a number of significan t            Administrator. (See Appendix, Section I, Item 152 . )
    changes to improve its system . (See Appendix, Section             GAO believes that the interest rate charged by V A
    1, Iteni 140 . )                                                on loans uuade to veterans holding pernnancnt pla n
        GAO reported that consolidation of VA's two insur-          policies under the five Government life insurance pro -
    ance field offices into one would save the Governmen t          -ranns should approximate the interest rate earned o n
    about $872,500 annually during the initial years an d           new investments of the insurance funds. If, in calendar
    as much as $1,118,700 annuall y beginning in January             year 1968, N` A had charged 5 percent, 6 percent, or 7
     1974 . Nonrecurring costs of the consolidation would b e       percent, instead of the rate of 4 percent which has bee n
    abort $2 .5 million ; however, within 3 years accumu-           in effect since 1936, the earnings distributable to policy-
    lated savings would exceed these costs . A consolida-           holders would have increased somewhere betwee n
    tionatPhiladelphia, rather than at St . Paul, could b e         $500,000 and S1 million, depending on the rat e
    achieved at a lower cost without a reduction in service ,       charged and the number of new loans made .
    uyould affect fewer employees . and would result in les s          In view of the reluctance of VA to adjust the in-
    temporary disruption of operations .                            terest rate . the Coiwress may wish to consider estab-
        VA informed GAOthat it would be advised of th e             lishing specific criteria for adjusting the rate and
    Administrator's position on the recommendation tha t             removing. the statutory limitation of 5 percent no w
    St . Paul insurance operations be consolidated with th e        existing oa one program_ the U .S. Government Life
    existing operations at Philadelphia as soon as the cleci-       Insurance program./See Appendix . Section I, Ite m
    sion process was completed_ °Sec Appendix, Section I ,          63 .'.
    Iteut 174 . 1                                                      Another report expressed GAO's opinion on the fi-
        In another report, GAO stated that N'A had not es-          nancial statements of the Veterans Canteen Service for
    tablished a clear policy for placing veterans in con y          fiscal year 1969 .
    nniunit° nursin~l hones or specific criteria for determin -        Audit work in process included reviews of the ad -
    hn veterans' financial eligibility . Duplicate inspection s     ministration of VA's educational assistance programs .
    of~nursinghonnes were made under the VA progra m                the supply system, hospital planning and construction ,
    and the Medicare program, Monthly progress report s             automatic data processincr, and hospital affiliatio n
    of nursing homes did not usually sear a useful pur-             agree nrents.
    pose . Neither the full host of operating \'A nursin °
    home care units nor a comparison of this cost wit h
    the cost of providing care in \'A hospitals was dis-            Other Civil Department s
    closed in the Operating reports . In response to GA O           and Agencie s
    recommendations, A'A agreed to take various actions
    to achieve the improvements needed . (_Sec Appendix,              GAO 's audit work in certain civil agencies of th e
                                                                    Federal Government consisted primarily of the exam-
    Section L Itenrl-65 . )
                                                                    ination of their financial statements . Reports on thes e
       Another report concerned VA's internal audit ac-
    tivities . One A'A audit group Was responsible for audit -      exam inatioils are identified below .
    in- all fiscal activities. _A second group expended its re-          Audit of certain hanks of the Farm Credit Syste m
    sources primarily o7 audits that covered all activities,          superyiscd by the Farm Gredit Administration, fisca l
    including fiscal activities, of a field station although it s     year 1969 . B–I 14806. Feb . 9, 1970 .
    resources could have been used to better advanta,,c                 Audit of the Federal Deposit Insurance Gorpora -



                                                                                                   CIVIL OPERATION S

       ti-n for year ended June 30, 1969, B–114831 ,               one report to art agency official oil reviews involvin g
      lkfar. ',", 1 9 M                                            activities of two or more , ivil departments or agencie s
          Examination of financial statements of Federa l          of the Federal Government were issued during th e
       holne" load banks supervised by the Federal Hon e           \.Car.
       Loan Bank Board, for year ended Dec . 31, 1968 ,               One report to the Congress related to a review o f
       13-11-1827, \ug . 17 . 1969 .                               the cost reduction and management hnprovenrent pro-
          Examination of financial statements of the Fed-          gram in fire departments and agencies. In March 1965 ,
       eral Horne Loan Bank Board for year ended Dec . 31 ,        the President directed the head of each departmen t
        1968, B–111827, Sept . 5, 1969 .                           and agency in the executive branch to put into efTect -
          Audit of Federal Savings and Loan Insuranc e             a formal, org anized program to reduce the cost o f
       Corporation superv ised by the Federal Home Loa n           Government . G .AO reciev%ed the operation of this pro -
       Bank Board ; for year ended Dec . 31, 1968, B–114893 ,      g rant in the selected departments and agencies in vie w
       Oct . 14, 1961) .                                           of the significance and long range nature of the pro -
          Examination of financial statements of th e              gram, inquiring into the manner in which it was being
       Panama Canal Company and the Canal "Lone Gov-               carried out and identifying opportunities for int-
       ernment . fiscal years 1968 and 1969, B–114839 ,            provement . GAO eon( :udcd that such a program coul d
      liar. 13 . 1970 .                                            be a useful tool of management in developing cos t
          Examination of financial statements of th e              consciousness in employees of the Federal Gm ernureu t
       'Tennessee lralley Authority for fiscal year 1969 ,         and in motivating the development of cost-sating idea s
       B-1 1 . 1850, Apr . 15, 1970 .                              and techniques .
                                                                      In some departments and agencies the program ha s
       ;111 remaining Government capital in the Federa l
                                                                   been aggre•ssiveh' implemented but in others littl e
    intermediate credit hanks and the banks for coopera-
                                                                   effort has been made to use the program forcefully fo r
    tives v.~as retired in December 1968 and all remaining
                                                                   the purposes intended . Although many worthwhil e
    g overnment capital in production credit association s
                                                                   savings were reported . improvement was needed in al l
    was retired in January 1969. Inasmuch as all Govern-
                                                                   aspects examined . The report to the Congress sum -
    ment capital had previously been vvithdr.awm from th e
                                                                   marized GAO findings and recommendations whic h
    Federal land hanks, the General Accounting Office i s
                                                                   had previously been included in separate reports t o
    no loner authorized to audit any of the organization s
                                                                   the department and agency heads . i Sac , :appendix ,
    supervised by the Farrar Credit Administration .
                                                                   Section I, Item 229 . 1
       GAO was unable to fully discharge its responsibili-
                                                                      Another multiagency review concerned certain bene-
    ties for auditirt l- the Federal Deposit Insurance Cor-
                                                                   fits granted to watch companies operating in the Av ir-
    poration hecause the Corporation would not permit un-
                                                                   gin Islands . Your of the 1_r watch companies operatin g
    restricted access to examination reports, files, and othe r
                                                                   in the Virgin Islands as of June 30, 1968, not onl y
    records relative to the banks it insures . Without suc h
                                                                   benefited from the importation of their products int o
    access, GAO was unable to express an overall opinio n
                                                                   tfre United States duty free, but also benefit(-(] fro m
    on the Corporation's financial statements . 'Fire on-
                                                                    10 year grants of tax exemption and subsidy hN th e
    portancrz>f resolvir,* the access-to-records question i s
                                                                   GnvernlrlCL=t of the t' Irglll Islands.
    indicated b y the Corporation's estimate that there were
                                                                      'I'll(- need for continuing the tax exemption an d
    insured deposits of $2,109 million in 212 in hank s
                                                                   subsidy benefits for the fou r companies was questione d
    at June 30, 1969 . A bill, H .R . 40, %%-)rich, if enacted ,
                                                                   because of the substantial profits being earned . 'Th e
    would resolve the access-to-records problem, was in-
                                                                   Department of Commerce agreed with GAO's v,evv
    troduced in tile 91st COIll" ress .
                                                                   and the Governor of the Virgin Islands - stated that
                                                                   the tax exemption and subsnly grants for the fou r
    Multi-Civil-Agency Review s                                    companies should not he extended or renewed . (See          –
                                                                   Appendix, Section I, Item 230 . :
      'I'vc, o reports to the Congress as a v%hole, seven rc-          \nother report related to the use of Government-
    ports to committees or Members of the Con g ress, and          yehicles, which are prohibited for use' for other- tha n



    official purposes. Inasmuch as the term `official pur-             Two reports to the Congress expressed GAO' s
    poses- ~, as not defined and was being interpreted dif-          opinion on the financial statements of the Governmen t
    ferently lrn , various Government agencies, GAO recont-          Printing Office for fiscal years 1968 and 1969,
    mendeil that the Bureau of the Budget formulate ap-              respectively.
    propriate guide l ines, which the Bureau then agree d
    to don (See Appendix, Section I, Item 205 . )                    Judicial Branch
                                                                        During fiscal year 1970, reviews were completc-i of
    Legislative and Judicia l                                        financial and other activities of the U .S . District Court s
    Branches                                                         in the Central District of California, the Norther n
                                                                     District of Illinois, and the Middle District of Florid a
                                                                     and the results of each review, includin_a suggestion s
    Legislative Branch
                                                                     for operational improvements, were reported to th e
       Audit work in the legislative branch included exami-          respective chief district judues . Audit work in process
    nations at the site of operations of the followin g              included reviews of selected activities of the Admfinis-
    activities :                                                     trative Office of the : .S. Courts and terminal leave
                                                                     pa~ntents made to former judicial branch employees .
        The Senate :
          Senate recording; studio revol v ing fun d
          Senate Employees barber shop
                                                                     Organizations Outside th e
          Senate office beauty sho p
                                                                     Federal Governmen t
        The House of Representatives :
          The Sergeant at Arras                                           Pursuant to the act of May 7, 1928 (22 U .S.C .
          House finance offic e                                      278a!, GAO examined tine financial statements for
          House recording studio revolving fun d                      fiscal year 1969 of the Corgas 'slemorial Institute of
          House stationery revolvinn, fun d                          Tropical and Preventive Medicine, Incorporated— a
          House beauty sho p                                          private domestic nonstock corporation which receive s
                                                                      a substantial part of its income from the U .S . Govern-
        Architect of the Capitol :                                   nient . The examination was made at tae Institute' s
          U .S. Senate Restaurants                                    headquarters in Washington . D .C ., and at the labora-
          House of Representatives Restaurants                        toiv site in the Republic of Panama . GAO expresse d
          Capitol Power Plain t                                      its opinion on the Institutes financial statements in a
                                                                      report addressed to the Board of Directors of th e
        Capitol Guide Force
                                                                      Institute and included in the Institute's annual repor t
        Go, (-rnunent Printing Offic e                                to the Congress.
                                                                         GAO also expressed its opinion on the financia l
         The salaries, mileage, and expense allowances o f
                                                                     statements of Government Services, Inc ., its Employee
    Senators, salaries of officers and employees of th e
                                                                     Retirement and Benefit Trus' Fund, and its Supple -
    Senate ; clerk hire of Senators, and other expenses o f          mental pension Plan for the year ended December 31 ,
    the Senate are examined on the basis of docuunent s               1969, in a report <Adressed to the Board of Trustees ,
    submitted to GAO.                                                Government Services, Inc_ Copies of this report wer e
         Eighteen -reports on audits of activities in the legisla-   sent to the President of the Senate and to the Speake r
    ti%e branch were issued during the year. Four of thes e          of the house of Representativcs, The examination was
    reports related- to activities of the Senate, seven t o          made at the request of tine corporation's Board of
    activities nt thelTotrse, ttlo toaet_ivities of the Architec t   'I' ntstces .
    ,d eL~ : Capit,dl mo to activities of tile Capitol Guid e            Examinations %sere made of the financial statement s
               uul thi-er t ai tk ities-of the Government Print-     of the Disabled American Veterans National Head-                    ~
    i- .c ! >fitlr .                                                 quarters for the year ended December 31, 1968, atl(!

                                                                                          CIVIL OPERATION S

    of the Life \iembership Fund and Service Foundation   ber 18, 1967 t36 U .S.C . 9011 . A report, expressing
    for the year ended June 30, 1969, pursuant to the     GAO's opinion on these financial statements, was sub -
    requirements of Public Law 90-208, approved Decem-    mitted to the Congress during the fiscal year .


                                                                                                         DEFENSE OPERATION S

                                                                          and the SEA1`I\F.I_ ., its predecessor : the main battl e
                                                                          tank ; \Ili 1 ' -- D' : the drone anti,uiintaiine helicopter :
                                                                          fire AN SQS-26 sonar ,}'stem ; and the Army*s specia l
                                                                          purpose individual %%eapon . 12 administration an d
                                                                          curient status of other programs such as the Civilia n
                                                                          Health and Nfedical Piourant of the Uniformed Seiv-
                                                                          is vs-, ten• c hitnicai and bitao,-tical %i arfmr pror.un_ th e
                                                                          acquisition of computers for %arous automatic dat a
                                                                          prot:c sing systems . and the project REFERRA L
                                                                           'assistance to retired military personnel seekiu ,.
                                                                          civilian careers . 3 question, Concernin g the exist-
                                                                          ence of ;caste. c_xtravatance, or other improper prac-
                                                                          tices b% the military departments . !-h procuremen t
    CHAPTER FIV E                                                         lrractices iu accluirim" specific <,00ds or services -and
                                                                          adtnin :,tration of specific contacts . and 15inquiries
                                                                          concetnt pu,pcsed transfer . consolidation, of phase
                                                                          out of functions perforated at various niditar y

    OPERATIONS AND PROGRAM S                                              Approach To Audi t

                                                                          Genera l
    Nature of Audit Work Performed
                                                                              BC( 111-         ntanpt,%.Cr IO>OU1tC~ are hinit^d i n
         GAO's audit effort in the I)epartnent of Defens e                mlation to the ui :t_tutudc ;aid run txexiu of the opcia-
    continued ut he directed tort°ar-d aiding in the iniptove-            tinn> o . III, Departnen of I )c±cnse . it i= c ontiaf that
    inctit of 111,1oaketneitt and operating controls and finan -          _ .du cifort he c .toted to „Iv( wd areas %,here findings
    cial , idmini .,tration of the complex operations of th e               tot! m ominri datum, can fa- of most a„istamcc it ]
    I)epattntent . Re_ul r audits and revie%%s complete d                 i ; io-ill, ahnut nerded imlt :o,rinents in ! nuta_cnten t
     duriu~ rile year or in I .ro!Tess at the close of the yea r          anti control alld b” tun<t !i ponsivc to to!t,tessiona l
    related to prntsrains and operations in such func t iona l               ;trrest in the opetauon, In kcvpin« kith this con -
     areas as acquisition of inaim weapon systems .                       11-Pt (,V) ha, trdirccud it> uidit e11ort in the area s
     1,2 , procurement ?includin oe,,otiation of c ontrac t               of au t uisiticut of utajrx %lapel swells ant i
    prices and administration of contract terms and con -                 procurrmont .
    (I it ions t : i43 ieseatch and doyeloltnlent . I' stiplih
    i na nai,t9 neat, '-) faciliiics and construction . f6 °              Acquisition of Major Weapon System s
    iil .il i pox%vr - II t iliza tiolt t includitld; admini,tation o I
    inilitaty and civilian pad' and allotcanccst . and                        l'!te conipicxit- of mod .m iceapon syst e ms has
       i accounun, sv ;tcins and accounting operations .                  brous,ht about a '-w nuellis increase in their costs and
         In addition to these re% ieus. GAO inacle a number               in the potential ! irks that the systems as produced Ana}
    of special audits, jm stdt;itions, and surveys at th e                 fail tc meet the• perfornianc_ obicetives for which the e
    request Of various cotnniatecs of the Congress an d                   %tree dc-i,tned .1 'he. Comics, ha: txpiessed ina'easin g
    individual Nlenihcrs of thi- Congress . On this specia l              ,onreni that, for malty of ~hc nr%c .vcapon systems ,
    work 126 teport %sere issued to tire- conimittec'e an d               actual costs fur cxceodinc, by sictnificant amounts th e
    \fem beis_itf the Ccu~res,—:iu increase of 68 mer th e                initial estimates of costs to develop and produce theta :
    nuuiher of reports steed in the hrccediw fiscal Fear .                t_nic Sehedtiles for development anti production ar e
    'Hiese reports relatud p!'incipall} to 1 i adminismitio n             contiuoallc cstendecl . deliveries are delayed and de-
    Mid cntrvilt status ill t%vaptoir-systcnf acquisition fro -           plovment cf the st tcnis is deformd for mangy° month s
    Riams, such a, (ilt,, SA1 I'GC A RI) annballktic                              .uc!' w1watcd cxieit .ions of tulle ,Ilvdole an d


    the actual performance characteristics of ti,e system s         and (51 es aluations of contractors' engineering ch .nge
    frequently tall substantially short of those expected           order proposals .
    front the original design .
        In recognition of this congressional concern, th e
    General Accounting Office has established a staff with -        Audit Reports Issued
    in its Defense Division—the Major Acquisition s
                                                                       GAO submitted 180 congressional reports on it s
    Group—to maintain continuing reviews, on a curren t
    basis, of major weapon systems which are in variou s            audits and investigations : 511 to tile Congress and 12 6
                                                                    to committees or Nfembers of the Congress on specia l
    stag=es of the acquisition cycle—from the fotuulatio n
    of the concept of the system, throug h_ the phases- of con -    investigations utade at their rTquest . (Five of the re-
    tract definition, development, and production, to it s          ports to thc~ Congress involved operations of other de-
                                                                    partments and agencies of the Government as -well as
    operational deployment . For this purpose, weapot
                                                                    operations of the Department of Defense . t In addi-
    systenis are considered "major'' if costs are expected t o
                                                                    tion, 313 reports tcere submitted to officials of the De-
    reach $25 million for iliseatc :r, development, test, an d
                                                                    partment of Defense ; of these, 41 were directed to
    evaluation, or $100 million for production . The Majo r
                                                                    the secretarial level and clealt principally with suppl y
    Acquisitions Group has as its primary objective the de -
                                                                    ntana<c ntent, pay and allowances, and support servic e
    termination of the basic causes of cost -,, rowth, schedule
                                                                    matters xchich teem not deemed to he of sufficient sig-
    slippage, and deterio ration of the oru,inally expected
                                                                    nificance to report to the Congress : 206 were directe d
    performance characteristics, in order to make recom-
                                                                    to loner Itscl officials and dealt principally with mat -
    mendations for improving the %eapon acquisitio n
                                                                    tors relating to settlenrer,t of disbursing ofheers ' ac-
    process .
        GAO helicves that its reports to -, - ,c Corwress oi l      counts and tuatters relat i ng to local policies, proce-
                                                                    dures, and practices disclosed in site examinations o f
    these colitimting reN iexvi will prolride the means o f
                                                                    ci\ ilian payrolls and related records .
    keeping the Con-, w,< <md ;ipptnpriate congressiona l
                                                                        -1 - 11e discussion of GAO's general ;cork in the IBc-
    Committees cmrentl -informed nn the progress an d
                                                                    partntent of Defense on matters relatin_ to transpor-
    status of the major programs in the weapon acquisitio n
                                                                     tation is included in Chapter .Seven, Transportation ,
    process and assist theot in folmulatim, decisions affect-
                                                                    hcgioning on page oo . The reports issued on such wor k
    ing autlimization and - appropriation of foods for th e
                                                                    are not iucludTCl in the number of reports issued a s
                                                                    cited above . A list of the reports issued, incluclinr,_ thos e
                                                                     dealing c ith transportation matters, is presented in th e
    Procuremen t                                                    Appendit . Section Ill, of th i s repot .
       For many Nears the maior part of GAO's audit ef-
    fert-in the area of procurement had been applied t o
    the pricim-, of livLotiated contracts_ Interest in thi s        Significant Findings an d
    area continues . flowever, with the increased respon-           Recommendation s
    sihility and effcctirencss of the Defense Contract Audit
    a r nc%- {DCAA`~ in the postaxard reviews of contrac t              :AO recieti+s of the n .nagt•nn~nt of the operation s
    prices, GAO is able to give ,raater attention to other          of the Department of Defense and the military depart-
                                                                    ntents frequently result in Ilndia-g s which indicate nee d
    illWortant a .,liccts of procurement .
        GAO's work in the aucht of contracts and the work           for itnproventent in nranar,cnu•ut controls . Reports on
    of ill(- ])CAA are complenicntaiy rattier than chq,lica-        such lindin!_s include recommendations for irrnprove-
    tive, As ill(- DCAA has increased its eflectncness ,            ntent .
    GAO's emphasis nn audit (if individual contracts ha s              The replies of the Dept intent of Defense officials t o
    been shifted to bioac tct areas of procurement and con -        reports in which achninisu-atiye actions on the part o f
    tract :administiation . GAO is no giving , icater at-            Defense officials are recommended have been generally
    tention to such other important aspects of pmcutenten t         responsive, indicating, in a large percenta,goof th e
    as 'I • procrssirn, of errorac tots ' claims n ; price          cases, Wfleemtvtt with the findin=is and an intention t o
                                                            11 -,   instil w c<nrective measin`es Numerous replies advis e
    calation provision mdudcd in negotiated contracts
       3, -fmnishim-, of niatetials to Contractor, and Con-         that lww dio'cir :es and instrnr tions have either hee n
    trol mor such nia ctidk I          contract tetrninatiot_s,      ~ucd ,t ur intc°udcd to hr i»ued . To inure that the•
    74                                                                                                                                    1

                                                                                                          DEFENSE OPERATION S

    revised directives and newly announced policies ar e                ods for enhancing competition io weapoo systems
    being carried out, GAO emphasizes the need for in -                 procurement, requested by the Subcommittee on .AnJ -
    dependent reviews at higher echelons within the De-                 trust and Monopoly, Senate Cononittee on th e
    partrnrnt and by internal audit organizations .                     Judiciar}' .
      The principal areas where GAO findines indicated a                     In requesting the first study, the subconnnittee de -
    need for improcenlecnt in management controls are                   fined the "should cost" approach as an attempt t o
    discussed in the followilig sections of this chapter .              determine the amount that a weapon system or prod -
                                                                        uct ought to co,t given attainable e$Iciencv and econ-
                                                                        only of operation . The studs resealed that it is feasible
    Status of ` Acquisition of
                                                                        for GAO, in auditing and reviewing contractor per-
    Major Weapon System s
                                                                         formance, to utilize "should cost' analyses . The great-
       In February 1970 GAO submitted to the Comress it s               est opportuuity for the Government to benefit fron t
    initial report oti the status of the acquisition of selecte d        the applicatien of " should cost" appeared to be throug h
    major, weapon systems. According to the records o f                  its use . on a selective hasis, in preaward cyahtatiom o f
     the Department of Defense, there ;core 131 majo r                   contractors
                                                                           ouh-actors      I
                                                                                        ' r'te t~ Imo xtsa~s -  : S F .%, Appendix, Sectio n
    programs in various phases of acquisition as ( ; June 30 ,           I, Item 1 t 0
       -- . These pro graini wcrc estimated b, cost abou t                   'I- he second study invoked tv%o proposed method s
    5111 billion . CIAO reviewed the status of S5 selecte d              for enhancing competition in weapon systems pro-
    nnajor weapon systems included in these proturauts .                 curen ;ent, "parallel undocumented development" and
       On the basis of the review . GAO concluded that :                 " i rented technical he ensin<_ . - The first ure.thod implie s
                                                                         sustaiuio'-r tyro of more contractors tcell into the perio d
          "There s%-as considerablecost _, rowth on many cm -
                                                                         of engineering developnent v%hich normally is no t
      rent development programs and the cost Lrowth wa s
                                                                         done--and provides for competitive a%var-d and pricin g
      con till it ill,
                                                                          of production on the basis of demonstrated prototypes
          There %t ere * significant tat iculces- existiu-, or antic-
                                                                          instead of rely role heavily on paper studies, plans, an d
      ipated, between the pe rforananc - ori,einally expecte d
                                                                          proposals . Lander this method, documentation ordi-
       and that :currentiv cstimatcd for -a lark nnnrber of
                                                                         narily required by the Government would be
       file systems .
                                                                          deferred---except for the data essential to the develop-
          There were slippa g es, existing, m anticipated, i n
                                                                          ment process itself —until one of the production con -
       the originally established pro_gmalo scthedules of fron t
                                                                          tractors is chosen . The second method proposes a
      6 lnontlis to more than 3 V-cars on ulam , of th e
                                                                          clause in the early development contract allo%ring th e
       systems .
                                                                          Goye I'll Merit to reopen competition for subsequent o r
      No reconmnendations here made in the report . How-                  folloty-on production . select the winner, and appoin t
    evet% during the course of the review GAO made lnam'                  him as a licensee . In return for royalty and technica l
    su e"Iestions for the improvement of acquisition nlan-                amistance lees, the licensor %vould then provide th e
    agement and the Dcpartnent took action on the sug-                     %vinner tnth marufacturim, data and technica l
    . ties _AppendiN, Section I, Item 113 .
    gestions   1
                                                                           assistance .
       At June 30, 1 1 )511- GAO was eyarnininf= the nnanage -                GAO expressed the opinion that the first method- -
    nYetit controls applied in each of the phases of th e                  parallel undocumented development—had merit an d
    weapon acquisition cycle .                                            cited the circumstances under which it could be used
                                                                           advaota eously . Although the main objectives of the
     Management of Procurement Programs ,                                  second method—directed technical lieensiog wer e
     Special Studie s                                                      attractive. it posed problems which seemed to evad e
                                                                           a workahlc solution . See Appendix, Section I, Ite m
       Two reports were issued to the Colwress on specia l
    studies of procurement matters requester! lw sou_,res-                 93 . 1
                                                                               In addition to studies requested l :% coq*reJSiona l
    aoual ronimittecs : a study of the feasibility of applyin g
    "should cost" analyses in ( ;A0 audits and reviews o f                 conlmittv° , ,, the following stutdirs %ern directed b y
    Gpyeriunent proctircnlent_ requested b}` the Sub -                     Ir,Ulatiwl ,
    Coninlittec on Rc000lll~ in ( ;oycatl :uerlt, .Joint Eco-                  A 1968 :unenehnent to the Ilcfros e I'roductiou Ar t
    notilic Committee : and a study of hro proposed nrctlt -               of P) 5 6 -Public Last 9tl          a -di!V1 tell ( ;AO to stud y

                                                        t-_ .   _
                                 _`~ ._ ~,ys.~.
                                                      y~- °
                          ~` ~
     k;.~ -T~-       A.    ~ ,        ~
     y ti ~ J    ~        aoy

                                                                       INDE X
                                        A                                    Air Force, Department of the :
                                                                               Accounting systems design . 3, 3 8
           Access to records :                                                 ADP activities, 1 2
             Denial of, 13„6 9                                                 Audit reports issued . ( .See Defense, Department of . )
             Iiegislation enacted dining F .Y . 1970 affecting, 129, 130 ,     Combat readiness, 10, 113
                  13 1
                                                                               Contractor profit study, 13 1
           - Pending legislation concerning, 1 4                               Decisions involving, l f 3, 114, 11 5
          :Accounting principles and standards :                               International activities, 12, 9 5
              prescribed . by the Comptroller General, 36, 37, 38      -       Military aircraft, maintenance and modifications of, 80
              Review and approval of statements of, 3, 5, 35, 37, 3 8          Military pay and allonances, 8 2
           Accounting systems :                                                Research and development, 7 9
              Development of, 3 . 37,3 8                                       Supply management, 7 9
              GAO ' s annual report to the Congress on, 3 3                    Transportation matters, administration of . 8 4
             Submission, review, and approval of designs, and opera-         American Institute for Free Labor Development, 12, 9 4
                     tion of . 3, 5, 35, 36, 37, 38, 42                      Annual Report, GAO, change in format of, 5
                  Air Force, Department of the, 3, 3 8                       Architect of the Capitol . 70
                  Army, Department of the, 3, 3 8
                                                                             Army Corps of Engineers (civil functions), 23, 28, 29, 47 ,
                  Civil Service Commission, 62                                 54, 11 4
                  Consumer Protection and Environmental Health See ,.- -
                                                                             Army, Department of the :
                     ice. 43 -
                                                                               Accounting systems design, 3, 3 8
                  Defense, Departntentof the, 3, 35, 3 8
                                                                               Audit reports issued . (See Defense, Department of . ?
                  Food and Drug Administration. 4 3
                                                                               Automatic data processing, ! 2
                  General Services Administration, 4 3
                                                                               Combat readiness, 10, 83
                  Health, Education, and Welfare, Department of, 5 0
                                                                               Contractor profit study, 13 1
                  Mint . Bureau of the,'-1 3
                                                                               Decisions involving, 111, 113, 11 5
                  National Bureau of Standards, 4 9                             Facilities and construction, 80
                  Navy, Department of the, 3, 3 8
                                                                                fnternational activites, 9 5
                  Peace Corp ., 9 6
                                                                                Legislative recommendations, 2 6
                  Treasmy, Department of the, 6 0
                                                                                Manpower utilization, 8 3
                  C .S .: Coast Guard, 59                                       Military aircraft, maintenance and modifications of, 8 1
                  Veterans Administration, 43, 6 P
                                                                                Military pay and allowances, 8 2
           Accounts of accountable officers, audit and settlement of,
              .13                                                               Procurement, 1 5
                                                                             Assistance to the agencies, 35, 102, 10 7
           Accrual accounting in the Federal Government, 3 :5, 36, 3 7
           Actuarial staff of GAO, 8 .                                       Assistanre to the Congress . (See Congress, assistance to the . )
           Agencies, assistance to, 35 ; 102,10 7                            Assistant Comptroller General, new, 2, 10 9
           Agency for fnternational Development, 12, 90, 91, 9 3             Atomic Energy Commission :
           Agricultural Research Service, 1 0                                   Argonne National Laboratory, 2 . 61, 6 2
          - Agricultural Stabilization and Conservation Service, 4 6            Audit reports issued, 13, 6 1
            Agriculture, Department of :                                        Contractor profit study, 13 1
              Agrititltidal Research Service, 1 0                               GAO uork in the agency, 6 1
    -   -      Agricultural Stabilization and Conservation Service, 46          Gaseous diffusion plants, 17, 20, 6 1
              Audit reports issued, •1.5                                        Janus reactor compies, 2, 61, 6 2
              Commodity Credit Corporation, 4 6                                 Research and developninrt, 26, 7 9
              Consumer and Marketing Service, 1, 10, 4 5                        Transportation field, assist, nce in the, 10 3
              Decisions involving, 11 0                                         Uranium enrichment enterprise, 2, 17, 20, 61, 6 2
              Economic .Opportunity profii ants, -kit, Q                     Audit reports :
              Farmers llonfcAdminisn.htion, 8, 15, 47, 6 7                      List of, 5
              Federal Crop Insurance Corporation . 4 6                          Number issued, 1, 13 4
              Foreign programs of, 87, 90; 9 2                                     Civil, 45
              GAO a rk in the Department, 4 5                                      Defense, 73 7 4
              fxgislnticriecounnendations, 21, 28, 4 6                             International, 11 7
              Soil Consri varion Service, 4 7                                      Legislative, 7 0
                Transportsuunehargts,JF f11'stud .,of,103                          Multi-civil-agency, 69


       INDE X

        Audit reports—Continue d                                         Civil Service Commission, U .S .—Continued
          Number issued-Continued                                           Personnel management evaluation system, 12 5
              Organizations outside the Federal Government, 7 0             Retirement Fund, 31, 13 2
              transportation management reviews, 10 1                       Revolving Fund, 13 0
              Vietnam, relating to programs and activities being con -   Claim :
                 ducted in, 88                                             Against the United States, 4, 10 5
          To Congress, 1 ;9, 134                                            By the United States, 4, 10 6
        Audit work :                                                        Legislation enacted during P.Y. 1970 affecting, 13 3
          Civil operations and programs, 4 5                               Settlements :
          Contracts, 74                                                        General . 4, 10 6
          Defense operations and programs, 7 3                                 Transportation, 4, .,9, 13 5
          fnternatioial operations and programs, 8 7                        Waiver of, 13, 106, 107, 13 3
          Legislation enacted during F .Y. 1970 affecting, 12 9          Coast Guard, U .S ., 58, 59, 113, 13 1
          Legislative and judicial branches, 21,70                       Combat readiness of military units and related supply sup -
          Multi-civil-agency reviews, 6 9                                   port, 8 3
          Organizations outside the Federal Government, 7 0              Commerce, Department of :
          Other civil departnennts and agencies, 6 8                        Accounting system, -1 9
          "Transportation managenent reviews, 10 1                          Audit reports, 4 9
    - Automatic data processing equipment :                                 Economic Development Administration, 2 9
      -   Acquisition and use, 41            -                              Environmental Science Services Administr ation, 4 9
              Agency for Inteniat i nal Development, 9 1                    Financial management improvement. program, participa-
              Air Force, Departm,       of the, 1 2                            tion in, 3 9
              Army, Department . the, 1 2                                   GAO work in the Department, 4 9
              Defense, D .epartnic -. .,f, 1 2                              Hearings on contracts of, 1 9
              District of Columb     i:overruoent, 63                        International activities, 8 7
              Ceneral Services A ministration, 64                           Legislative recommendation, 2 9
              House of Represent :rives, 1 5                                Maritime Administr ation, 4 9
              Internal Revenue Service, -.6 1                               Multi-civil-agency review . 69
              Mint, Bureau of the, 60                                       National Bureau of Standards, 4 9
                                                                            Transportation charges, JFMIP study of, 10 3
              National Aeronautics and Space Administration, 6 6
              Navy: Aviation Supply Office, 7 8                          Commission on Goverarnent Procurement, 18, 13 1
              State, Department of, 9 1                                  Commodity Credit Corporation, 1 2
                                                                         Communications, administration of, 8 3
          ' training programs pertaining to, -12, 123, 12- 1
                                                                         Community Action Program, 6 7
                                                                         Comptroller of the Currency, Office of the, 6 1
                                      a                                  Concentrated f-:mployment program 56, 6 7
       Balance-of-payments position, U .S., 10, 9 1                      Congress, asmst :unce to the, 1, 2, 7
                                                                            .Actuarial staff of GAO, 8
       Bid protests, I I I
       Bonneville Power Administration, 2 3                                 Assignun-mi of staff t-conmmittces, 1, 2, 1 5
                                                                             _Audits of House and Senate activities . 21 . 7 0
       Budget, Bureau of the :
                                                                            GAO liaison with Congress, 9               -
         Financial management in the Federal Government, 3, 37 ,
                                                                             Hearings, testimony of GAO representatives, 2 . 1 7
            39, 10 3
                                                                             Legal and lv~,islative matters, 1 6
         Recommendations to, 7 0
                                                                             Legislation, pending :
         Reports to, 4, 11 3
                                                                               Reports on, 2, 1 3
         Transportation charges, JFMIP study of, 39, 10 3
                                                                               Testimony on, 1 8
         Uniform cost accounting standards, 3, 11, 18, 20, 7 7
                                                                             Legislation, recommendations for, 2 1
       Budget Concepts, President's Commission on, 36
                                                                             RepraIs to, t, 2, 7, 9, 11, 13, 1 1, 15, 115, 13 4
       Bureaus, (See other part of name. )                                   Systems analvsis, use of in GAO, 8
                                                                         Consumer and Marketing Service, 1, 10, 4 5
                                      G                                  Consumer Protection and Environmental Health Service, 4 3
                                                                         Contract audits, 74
       Capitol Guide Force, 7 0
                                                                         Contractor profit study, 13 1
       Career development, 4, 12 2
                                                                         Corps of Engineers . (See Army Cotes of %ngineers, )
       Civilian pay and allowances, 81, 11 0                             Cost accounting standards, uniform, 3, 11, 18, 20, 7 7
       Civil Service Commission, U .S . :                                Cost reduction and management improvement program, 10, 6 9
        _ Accounting systems design, 6 2                                 Customs, Bureau of, 43, 60
          ADP training programs, 42, 123, 12 4
          Audit reports issued, 6 2                                                                         D
          Decisitans involving, 13 0
       - financial management in the Federal Government, 3, 3 9          Debt er,ll ui„n .s, 4 . 100, 10?, 106, 107, 1 :3 5
          GAC) work in the agency. 6 2                                   ll isior . . 'r, 109, 111, 115, 116

       146                                                                                                                             +1

                                                                                                                           INDE X

    - Defense Communications Agency, 8 4                                Farmers Hone Administration, 28, 45, 47, 6 7
       Defense Contract Audit Agency, 7 4                               Federal Aviation Adnnnistratitm, 58, 59, 11 0
       Defense, Department of . (See also Air Force, Army, and          Federal Columbia Rivcr Power System, 23
            Navy. )                                                     Federal Credit Union Administration, 12 9
         Accounting systems designs, 3, 35 : 3 8                        Federal Crop Insurance Cor poration, 4 6
         Accrual accounting. 37                                         Federal Deposit Insurance Corporation, 31, 68, 69              -
         ADP activities, 1 2                                            Federal Ilighway Administration, 25, 58, 5 9
         Audit reports -issued, 73 ; 74, 13. 1                          Federal Home Loan Bank Board, 6 9
         Combat `readiness of military units and related suppl y        Federal hone loan banks, 6 9
            support, 8 3                                                Federal Housing Administration . 47, 53
         Communications ; administration of, 8 3                        Federal National Mortgage Association . 53, 6 1
         Contract audits, 74                                            Federal Power Program, 2 2
         Contractor profit study, -131         -                        Federal Prison Industries, Inc ., 5 6
         Cost reduction program; 10            -                        Federal Railroad Administration, 5 9
         Decisions involving, 11 2                                      Federal Savings and Loan insurance Corporation, 6 9
         Facilities and construction, 8 0                               Federal Supply Service, 6 1
         GAO work in the Department, 7 3                                Federal Water Quality administration, 1 2-1 5 25, 5 3
         Hearings oil, 20                                               Field offices, GAO, 141, 142
         Internal auditiing,4 3                                         Financial managenent in the Federal Government :
         international activities, 12 . 13, 87 ; 91, 9 5                   Congressional interest in, 3 5
         Manpower utilization, 6 2                                        GAO assistance to agencies for improvement in, 3, 36, 4 2
         Military aircraft; maintenance and modifications of, 8 0         Joint Financial Ma;tagement Improvement Program, 3, 36,
         Military assistance programs, 95                                     39, 41, 10 3
         Other programs, administration of, 8 4                            Reports oil :
         Pay and allowances :                                                 Consumer Protection and Emironmental Health Service ,
             Civilian, 8 1                                                       -1 3
             Military, 13, 81, 11 3                                           Food and Drug Administration, -13
         Procurement, 2, 15, 74, 75, 7 7                                      General Services Administration, -1 3
         Research and development, 14, 26, 7 8                                Mint, Bureau of the, 4 3
         Supply management, 79, 8 3                                           `Frust Tel rit,uy of the Pacific Islands, 5 5
         Training courses, 12 4                                               U .S . Coast Guard, 59
         Transportation matters, administration of, 8 1, 10 1                 U .S . Information Agency, 96
         Transportation suits involving, 4, 10 2                              Veterans Administration, 4 3
         Uniform cost accounting standards, 3, 11, 18, 20, 7 7             Reviews of. 4 3
         \\' capons systruns, 2, 8, 10, 20, 26, 73, 75, 79, 95          Financial savings attributable to the work of GAO, 5
       Department: (See other part of name)              -              Financial statements, confidential (Senate Rule 44), 9
       Directory of the U .S . General Accounting Office, 14 3          Financial statements of GAO, 136, 137, 138, 13 9
       Disabled American Veterans National Ileadquarters, 7 0           Findings and recommendations . compilation of GAO, 5
       District of Columhis Govertme nt ; .12, .18, 19, 39, 63          Food and Agriculture Organization of the United Nations, 2 ,
                                       E                                Food and Drug Adminisuration, 43, 5 0
                                                                        Food for Peace, 9 0
      Economic Development Administration, 2 9
                                                                        Food inspection activities, 1, 84
      Economic Opportunity, Office of, 56,6 7
      Economic Opportunity programs, 28, 45, 50, 67, 13 0               Foreign Affairs Community Agencies, 9 1
      Education assis'ance programs, 13 0                               Foreign assistance programs, 87, 89
      Education, Office of, 50, 5 1                                     Foreign currency, 90, 9 4
      Educator-consultants, 119 _                                       Foreign Exchange Operations Fund, 9 0
      Electronicdata processing. fS'e-e Automatic data processing . )   Functions and organizations of GAO, 140, 14 1
      Employee,: (See Personnel. )
      Engraving and Printing, Bureau oL 6 0                                                          G
      Fnvitomnental Science Services Administration, 4 9
      European Branch, 87, 14 3                                         Gaseous diffrsion plants, 17, 20, 6 1
      Executive Office (If the President, 8 4                           General Iccouming Office :
      Expenses and staffing, GAO, , ,, 13 2                               Actuarial staff, 8
      Export-Import Bank of the United States, 87, 9 7                    Annual report, change in format of, 5
                                                                          Appropriations, legislation enacted during P .Y . . 1970 ,
                                                                             affecting, 13 2
                                                                          Data Processing Center, 9
       Facilities and construction, military, 8 0                         Directory of, I El
       Far Fast Branch, 87, 14'3                                          Fxpen :es and stalling, 4, 13 '
       Finn Credit Administration, 68 . 69                                F'inr~ncial sntemcnu of . 136, 1a7, 138, 139


    INDE X

    General Accounting Office Continue d                            Housing and Urban Development, Department of—Con.
    -- Findings and recommendations for improving Governmen t         Financial management intproccment program, participa-
          operations, report on, 5                                      tion in, 3 9
       Functions and organization, 140, 14 1                          GAO work in the Department, 5 2
          Chart, 14 1                                                 Internal auditing, 4 3
          INIap of regional offices, 14 2                             Legislative recommendation, 2 2
       Legislation enacted during F .Y . 1970 relating to th e
          work of GAO, 11 9                                                                        1
       Manual for Guidance (if Federal Agencies, 3 6
       Newsletter, 9                                                Immigration and Naturalization Service, :5 6
    General Counsel, new, 2, 10 9                                   Indian Affairs, Bureau of, 55, 5 6
    General Services Administration :                               Indian Health Service, 5 0
       Accounting system, 4 3                                       Interagency and trade programs, 9 0
                                                                    Inter-American Development Bank, 9 3
       Audit reports issued, 64
       Automatic data processing, 64                                Intergovernmental programs and operations, 4 0
       Decisions involving, 112, 11 4                               Interior, Department of the :
       Federal Supply Service, 6 4                                     Audit reports issued, 5 3
       GAO work in the agency, 6 3                                     Bonneville Poker Adminisnation, 2 3
       General Supply Fund, 3 1                                        Cost reduction program, 1 0
      - Legislative recommendation, 2 1                                Decisions involving, 11 4
     - Operating Fund, 132 .                                           Federal Water Quality Administration, 11, 24, 25, 5 3
       Transportation charges ; JFMIP study of, 39, 10 :3              Financial management improvement program, participa-
    General Supply Fund, 3 1                                                tion in, 3 9
    Geological Survey,5 5                                              GAO work in the Department, 5 3
    Corgas - Memorial Institute of Tropical and Preventive Medi-       Geological Survey, 3 5
       cine, ,Inc ., 7 0                                               Indian Affairs, Bureau of, 55,5 6
    Government Printing Office, 27, 7 0                                 Indian welfare, 50
    Government Procurement, Commission on . 110, 111, 117 ,            Land management and natural resources, 5 4
        13 1                                                           Land Management, Bureau of, 2, 24, 5 4
    Government Services, Inc ., 7 0                                    Nlapping, 5 5
                                                                       Mines, Bureau of, 5 4
    Grants-in-aid to State and local governments, 37, 39, 40, 4 1
                                                                       National Park Service, ° 3
    Guaranteed Student Loan Program, 19, 5 1
                                                                        Reclamation, Bureau of, 23, 47, 48, 54, 11 4
                                                                       Trust Territory of the Pacific Islands . 55, 13 0
                                  H                                     Water pollution control, 2, 10, 4, -?5, 5 3
    Health, Education, and Welfare, Department of :                    Water resources projects, 23, 28, 47, 48, 5 4
      Accounting system, 43, 5 0                                     Internal auditing . 4, 41, 43
-     Audit reports issued, 5 0                                        Customs . Bureau of . 43, 6 0
      Consumer Protection - and Environmental Health Service,          Defense, Department of, 4 3
        43                                                              Housing and Urban .Development, Department of, 4 3
      Decisions involving, 1 1 4                                        Internal Revenue Service . 43 . 6 0
      Education, Office of, 50, 5 t                                     International organizations, 9"?
      Food and Drug Administration, 43, 5 0                            Na ' .nd Science Foundation, 6 6
      GAO work in the Department, 5 0                                   Railroad Retirement Board, 4 3
      Indian-flealth Service, Health Services and Mental Healt h        State, Departncnt of, 43, 96
         Administration . 5 0                                          Treasury, Department of the, 43, 6 0
      Medicaid, 1, 18, 57                                               Veterans Administration, 43, fib
      Medicare, 18, 52, 6 8                                          Internal Revenue Service, 30, •13, 60, 61, 10 2
      National Institutes of Health, 5 0                             International activities, 2, 8 7
      Social Security Administration, 5 2                              Agency for International Dcvelopmcrtt, 13, 90, 91, 9 3
     -Transportation charges, JFMIP study of, 103                       Agriculnvc, Department of, foreign agricultural func-
      Work Experience and Training program, 50, 6 7                          tions of, 87, 90, 92
    Health Services and Mental Health Administration :                  Audit reports issued, 87, 13 1
      Indian Health Service, 50                                         Coninw-e, Department of, 8 7
    House of Representatives, US ., 14, 15 1 -16, 19 . 21, 7 0          Defens.- international activities, 1        13, 87, 91, 9 5
    Housing and Urban Development, Department of :                      Export-lmj-    ;-t Bank of the United States, 8 7
      Audit, Office of, 5 3                                             Food n' Peace, 9 0
      Audit relic, t, iss„cd, 5 .' -                                    1- MViUi AfL,irs Cool snits Aeereies, 9 1
      t Ir     6            rejec t                                     1 n_ie           r n c pt -gout    t . 13 9
      Fell( " 111      t   ldurni t tion 17 53        -                 ( ; .\() ref, ur     1

              l : uot . ..l l m igaly As> r at.dn ; 'i3, 61 ,            1 vl e n v ;end t id .- fire L:raln_, 90


                                                                                                                                        INDE X

        International activities Continue d                                                                   M
           International organizations, 'U .S . participation in, 9 2        Management iticpr,n vement and rost reducti-, programs ,
           Military assistance ptegrams, 9 :5                                  10,6 9
           Peace Corps, 87, 91, 96, 97, 13 3                                 Manpower Administration., 5 7
           Post Office Department, 87, 96                                    Manpower utilization . 8 2
           State, Departtent cif, 87, 9 :y 92, 93, 9 6                       Manual for Guidance- of Fcdcral At ;cnues. GAO, 3 6
            1 reasuty, Department of the, 87, 93                             \ferhime Administration, -19          -
            U .S . Information Agmey, 87; 91,-96, 9 7                        Medicaid . 1, 18 .5 7
        inter national Atomic. Energy Agency, 8 8                            Medicare, 18, 52, 6 8
         International Labor Organiza!ion, 9 2                               Military Airlift Command, 10 0
         International organizations, L .S . participation in, 92i           Military assistance programs, 9 5
        Interstate highway System, 25 ; 5 8                                  Militaty -pay and allowances, 13, 81, 11 3
                                                                             Military Sea Tran,pm'tatio n S,iN       -19, 99, 11 5
                                                 J                           Military Traffic Manaeement and Terminal Service, 102 ,
                                                                                103 . 11 .5
        Janus reactor comple%, 2, 61 ; 6 2                                   Mines, Bureau of. 5 1
        Job Corps Programs, 6. 7
                                                                             Mint . Bureau of the, 32, 13, 60
        Job Opportunities in the Business Sector; 19, 20, 56, 5 7            Multi-cisil-agenry rctiews, 69, 13- 1
        Joint Financial Management Improvement Program, 3, 36 ,
          -39,41, 10 3
        Judicial branch audits, 7 0
        Justice, Department of :                                             lNatirmal Advisory Council on International Monetary an d
          Assistance to, 49% 102, .111 .                _                         Financial Policies, 9 3
          Ai dit reports issued, 5 6                                         National Aeronautics and Spare Administration :
          Claims reported to for collection, 102 ; 10 6                          Audit reports issued, 6-1
          Federal Prisons Industries, Inc ., 5 6                                 Automatic data processing, 6 6
          Financial management improvement program, participa-                    Contractor profit study, 13 1
             tion in, 3 9                                                         GAO work in the agency, 6 4
         - GAO work in the Department, 56 .
                                                                                  Research and development, 26, 7 9
          Hearings (,n, 1 9
                                                                              National Air Pollution Control Administration, 11 4
           lnunigration and Naturalization Service, 5 6
                                                                              National Bureau of Standards . 4 9
          Legislative recommendation, 3 3
                                                                              National Com municat :ons System . 8 3
                                                                              National Inst : tutesof Health, 5 0
                                                                              National Park Service, 2 3
        Labor, Department of : '                                              :National Radio Astr onomy Observatory, 6 6
           Audit _reports issued, 56, 5 7                                     National Science Foundation_, 6 6
           Concentrated Employment, 56,6 7
                                                                              Navy Aviation Supply Office, 7 8
           Financial management improvetiueut program, participa-
                                                                              Navy; Department of the :
              tion in, 3 9
                                                                                  Accounting systems design, 3, 3 8
           GAO work in the Department, 5 6
                                                                                  Audit reports issued . ' See Defense, Department of . )
           Joh Oppo rtunities in the Business _Sector, 19, 20, 56, 5 7
           Manpower Administration, 5 7                                           Automatic data processing 7 8
           Neighborhood Youth Corps, 56, 6 7                                      Contractor profit study, l3 1
           Special Import program . 5 7                                           Decisions involving, 111, I l 2
           Transportation field, assistance in, 103     -                         Deep submergence rescue vehicle . 1 0
           Work`-Incentive prograin, 5 7                                          Facilities and construction, 8 0
        Land Management, Bureau of, 2 . 2 .1, 5 4                                 Manpower utilization, 8 2
        Legal services, 4, 109, 115 .      -                                      Military aircraft, maintenance and modifications of, 80           -
           Assistance in the field of transportation : 102, 11 4                  Military pay and allotlance%, 8 2
            Assistance to wencies, 10 9                                           Ships in reduced operational status, 4 9
         - Assistance to CuaSress, .1 6                                           Supply mnanagentent, i 9
           Dc visions and zither legal matters handled during F.Y . 1970 ,        Tra isp_ .rtation field, assistance in, 10 2
              4 ; 109, 111 . 115 . 1-1 6
                                                                               Neighborhood Youth Corps, 56, 6 7
           f c sl,rti~ u, p . nJing, 2, 13                       -             N ;rrth Atlantic 1 reaty Organization, 9-5

        dS gislaticu rni,wd during IZ:1 197 0 relitun- to the wor k
          of C; . W, I-`)             -                 -                                                      a
                                                                             Offices 'Se, other ]-,.It( if nallic ,
    _                           iv   .   .   .       lor_, if                Oleill at : xu, :and fuatc ;atu , of ( ;AO, I-Hl . 111                     -   -
                                                                             Onr!.i tr,t,i,;u, ~,ut,ido 0w f d r :al G, s :raiment 7 0. 131



                                              P                            Slate, Department of :
                                                                             Accounting system, 9 6
     Pacific Islands Trust Territory; 55 ; 130
                                                                            -Audit reports issued, 9
     Panama Canal Company and Canal Zone Government, 6 9
                                                                                               proecssing;      91 -
     Pa; and allowances :
                                                                             Financial management improvement program, participa -
       Civilian, 81, 11 0
                                                                                tion in, :;9
       Military, 13, 81, 11 3
                                                                             GAO work in the Department, 9 6
     Payments ; erroneous, waiver of, 13 3
                                                                             fntcrnal auditing, -11, 9 6
     Pay, waiver of clainis for erroneous payment of, 13, 106, 10 7
                                                                             International activities, 12, 13, 87, 91, 92, 93, 96
     Peace Corps, 87, 91, 96, 97, 13 3
                                                                           Strategic Ai Command, 10, 83                                                                        -
     Personnel :
                                                                           Student Loan insu rance Fund, 5 1
       Administration, 11 9
       Development, 12 2                                                   Supply management, 79, 83                     -
       Equal employment opportunity ; 12 5                                 Systems analysis, 8, 53
       Professional development and recognition, 125
       Recruiting, training, and staff development, 4, 11 9                                              T
       Statistics :                                                        Technology Assessment, Office of, If, 18, 20
          Accounting and auditing staff in relation to total em-
                                                                           Telecommunications Policy, Office of, 20, 8 4
            ployment, 12 1                                                 Tennessee Valley Authority, 69
          Assignments to congressional committees, 1 6
                                                                           Training and career development, -, 119, 122, 12 5
          Length of service, 12 1
                                                                             Given through agency or non-Government facilities . 123,              -
     Philadelphia Plan, 16, 1 8
                                                                                12 4
     Planning-Programming-Budgeting System, survey of, 4 0
                                                                             Given through GAO facilities, 122, 123
     Post Office Department :
                                                                           Transportation activities, 4, 9 9
       Audit reports issued, 5 7
                                                                             Ai!encies, GAO assistance t% 10 2
       GAO work in the Department, 5 7
                                                                             At :dits and claims, 99, 100 . 135                                                -                   -
       International activities of, 87, 96
                                                                             Collections .. 100, 102, 13 5
     Poverty programs. {See Economic Opportunity Programs . )
                                                                             Decisions, involving, 11 4
     PPB; surve} of, 40
                                                                             Justice. Department of, GAO assistance to, 4, 99, 102, 11 1
     President 's Commission on Budget Concepts, 3 6
                                                                               anagement reviews, 10 1
     Procurement reviews . 2, 15, 7 :4,75, 7 9
                                                                             Reports oil, 84, 10 1
                                                                             Transportation Manual, 11 5
                                                                           Transportation charges . JFMIP study of, 39, 10 3
     Railroad Retirement Board, 43                                         Transportation, Dcpartmcn : of :
     Reclamation ; Bureau of, 23, 47 1 48, 54, 11 4                          Access to records, 1 4
     Records, access tit . (See Access to records . )                        Accounting systc-m 5 9
     Recruiting and staff development, 4, 119, 120, 122, 12 5                Audit reports issi cd, 5 8
     Regional offices, GAO, 142, 14 3                                        Coast Guard, U .S ., 58, 59, 113, 13 1
     Reports :                                                               Decisions invol ving, 17, 114                                             -
       Audit. (See Audit reports . )                                         Federal Aviation Administration, 58, 59, 11 0
       Draft, unauthorized release of, 7                                     Federal Higlovay Administi mion, _5, 58 ; 59                                          -
       Legislative and legal, 115, 11 6                                      Federal Railroad Administration, 5 9
       On pending legislation, 2, 1 3                                        Financial management improvement program, participa-
       Statistical summaries of, 115, 11 6                                       'ion in, 39                                                   -                               -
       To Congress, comittees, and individual Members,          9, i 1 .     GAO work in tine Department, 5 8
         14, 15, 2 1                                                          interstate Highway System, 25 . 5 8
       With classified material, 7                                           Saint Laicrence Seaway Development Corporation, 58                            _
     Research and development, 14, 26, 7 8                                 Treasury, Department of the :
                                                                             Accounting system, 43, 6 0
                                              S                               Audit reports issued, 60                                                                     -
     Saint Lawrence Seaway Development Corporation, 58                        Automatic data processing, 6 0
     Senate, U .S- . 1.4, 46, 18, 21 , 70                                    C:ompu'ollcr of the Currency, Office of tile, 61              -                           -
     Small Business Administration, 67, 112 .. 11 4                           Customs . Bureau of, 4,l, 6 0
     5-ocial Security administration, 5 2                                     Engraving and Pta :ting, Bureau of, 6 0
     Soil Conservation ier ice, .-1                                           Financial management in the F ederal Go ernment, -1, 3 7
     S " oklic '! Asia . Ili, fill                                               39
      it   i:u1Impact pr g it        t                                        GAO 1 i . ili in the Department, 6 0
        .iu~"         I r ." r.t .-I .119.122 . u '                           Intl nal :ntdlt activitit 1 :1, fin


            Treasury, Department of the-Continue d
               Internal Revenue Scriice, 30, 43, 60, 61, 102             Veterans Adin i     tratto n
              International activities, 87 . 93                            Accounting s      mn,-43; 68                                 -
              Mint, Bureau of the, 32, 43, 60                              Andit repor t     sued, 67
              President's Ommoission on Budget Concepts, 37                Decisions in %    ing, 17, 11 4
        -     "Transportation charges ; JFMI-P study of, 103               GAO work i t       c agency, 6 7
            Trost Territory of the Pacific Islands, 5 :I, 130                                g, 43, 6 8
                                                                           Internal an d
                                                                           Legislative r i   ninicndation, 2 7
    -                                    - U                               Veterans Ca t     en Service, 68 -
                                                                         Vietnam, _, I .'    3, 77, 83 ; 87, 88, 89, 91, 93, 94, 10 1
            Uniform cost . accounting standards, 3, 11, 18, 19, 20, 77
            United Nations Children 's Fund, '_, 9 2
            United Nations Development Program, 2, 20, 9 2                                               W
            Uranium enrichment enterprise, 2, 17, 20, 61, 62             Water polluti m      ntrol 2, 10, 'I, 25, 53 -
            U .S . Coast Guard, 58, 59, 113, 131                         Water Resource      :ouncil, 4 8
            U.S . Courts, 70     -                                       Water resourc e      ,,j, t 23, 38, 47, 18, 5 I
            I' .S . House of Represcntatives, 14, 15, 16, 19, 21, 70     Weapon syste n      2, 8, 10, 20, 26, 73, 75, 79 ; 9 5
            U .S . information Agency, 87, 91, 96, 97                    NVork $sperien      and Training program, 67                       -
            U .S . Senate, 14, 16, 18 ; 21, 70       -                   \Fork Incentive     ograIn, j7                  -
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                                                                                               DEFENSE OPERATIONS

    the feasibility of applying uniform cost accountin g            mates and if agency= officials had made adequat e
    standards to negotiated defense contracts of $100,00 0          evaluation of the data . (See Item 97 . )
    or more . The report of the study, issued to the Congres s        Rental rates negotiated for barges used in Viet-
    iru January 1970 ; concluded that it is feasible to estab-      narn included costs for towing the barges from th e
    lish and apply such standards. This report is discussed         Philippines to Vietnam and returning them whe n
    in greaten detail_ in Chapter Two, Assistance to th e           no longer needed ; a number of the barges %%-ere al-
    Congress, beginning on page 7 .                                 ready in scn•ice in Vietnam and 0- -ir towing costs
       A provision of the Armed forces Appropriation Au-            had been paid under prior con ga          =ee hens 98 . )
    thorization, 1970-Public Law 91-121—directed GA O                  A contract price of $3 .5 nr %._ rock-crushin g
     to study and review on a selective, -epresentative basis ,     plants was accepted by a contracting officer withou t
    the profits : made by contractors and subcontractors o n        first reporting to higher authority, as required by De-
    contracts, on which there is no formally advertised com -       fense regulations, that he considered the price un-
    petitive bidding, entered into by the military depart-          reasonably high and that the contractor refused to
    ments and certain other Government agencies. Thi s
                                                                    negotiate . (See Item 100. )
    study was in progress at June 30, 1970 .
                                                                    The Department of Defense generally agreed wit h
                                                                  these findings and took corrective action .
    Management of Procurement Programs ,
    Negotiation of Contract Prices
                                                                  Management of Procurement Programs ,
      Six reports were issued to the Congress on review s         Other Aspect s
    of negotiation of -ontract prices . Digests of these re -
    ports are presentee _n the Appendix, Section I, a s              Three reports to the Congress covered other aspect s
    further identified in the following summaries .               of procurement : control over Government-owned ma-
          Prices were negotiated on the basis of catalog          terials in plants of overseas contractors, use of valu e
      prices of commercial items sold in substantial quan-        engineering clauses in contracts, and automated proc-
       tities to the general public—and thus exempt fro m         essing of small purchase transactions .
       the provisions of Public LaN% 87-653—without ade-             Inadequate administration, by contractors and th e
      quate assuranc- that sales had in fact been made i n        military services, of Govern ment-oswtied materials in
      substantial quantities to the general public at the         plants of overseas contractors resulted in unnecessar y
      catalog prices. (See Item 96. )                             investment 'n inventories, in increased transportatio n
          Advertised contracts were awarded for ship over -       costs, and in possibly unnecessary procurement or short -
       Hauls despite limited competition ; substantial addi-      age of materials . As a result of GAO tests and subse-
       tional work added to the contracts after the ships be -    quent reviews be the contractors, about $3 .8 million
       came immobilized in the shipyards placed the               %worth of such material was made available for redis-
       Government in a disadvantageous position in negoti-        tribution and contractors' open orders for about $1 . 4
       ating prices for the additional work . (See Item 94 . )    rrrillic - worth of material were canceled . (See Appen -
           Fixed-price-type contracts, rather than more flexi-    dix, Section I, Item 91 . )
       ble types of contracts, were used in procurement o f          Value engineering is defined as a systematic an d
       hundreds of millions of dollars' worth of bomb bodie s     creative effort to simplify the design and manufactur e
       under circumstances where time limitations and th e        of products in order to obtain the lowest overall cost .
       absence of realistic cost data precluded adequat e         Two ciauses are used in contracts to achieve this ob-
       documentation of the contractors' price proposals ,        jective---an incentive clause or a program requiremen t
       adequate audit of the proposals, and the negotiatio n      clause . The former merely encourages the contracto r
       of reasonable fixed prices . (See Item 95 . )               in this effort ; the latter requires an agreed upon level
           Prices negotiated for production of ammunitio n        of effort for which the contractor is fully reimbursed .
       fuzes under several contracts could have been re-          Both offer the contractor a share of the cost reductions .
       duced sigtrificantly if the contracting officer had re-        GAO found that the incentive clauses in many of th e
       quired the contractor to submit detailed cost o r          contracts have not stimulated contractors to develop
       pricin_1 data in support of material and labor esti-        proposals to reduce costs even though they would shar e


       in the cost .,,trims . ,A number of,prol)osals were made,                                                                                                      Research and - Developmen t
       with which the Uepartnlent of Defense generall y
       asvrccd, to stien,thrn-the value engineering program                                                                                                              GAO issued five reports to the Congress on review s
       and to cm ourm~c contractors to greater effort . (Sec                                                                                                          of research and development operations one report
       Appendix, Section 1, Item 99 .)                                                                                                                                on contractors' independent research and developmen t
          The \ayy Aviation Suppl } Office maintains an au-                                                                                                           costs borne by the Government ; three reports oil the
       tomatetl s}stenrfor processing its small purchase trans-                                                                                                       development of specific %%eapon systems, and one re -
       actions— purchases under $2,500 . However, the Supply                                                                                                          port on funding of the construction of certain re -
       Office was not exploiting the full potential of the sys-                                                                                                       search facilities .
       tem . Only about 70 percent of the transactions were                                                                                                              Independent research and development (IR&D) i s
       being processed by automation and certain procedures                                                                                                           that part of a contractor's total research and develop-
       continued to be handled !manually . For example, the                                                                                                           !rent program which is not conducted under a direc t
       autnmated equ :pn!ent had not been programmed to                                                                                                               contract or grant but is undertaken at the discretio n
       provide data for such functions as price analysis, solic-                                                                                                      of the contractor . 1h!ring 1968 major Government con -
       itatioil of quotations from known supply sources, and                                                                                                          tractors spent about $1 .39 billion for IR&D and re-
       consolidation of requirements. GAO suggested im_                                                                                                               lated effort . The Government bore more than hal f
       lirovemcnts and the \arc and the Deparniuent of De-                                                                                                            of this cost .
       fens, took actions which were generally responsive .                                                                                                              One report pointed out that the Government doe s
        (See A ppendix, Section 1 . horn 110 .)                                                                                                                       not have a consistent policy for determining the shar e

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       Alba '.,                           ; uneept nl the first of the deep_sabnnergence                      re .sette vehicle, tDSRV) plarn!ed by the N\asy. The DSRV is                                                                  rhmun mating                   _
                                                                                 to the reitraininggnide uires and the piKgy back berth on Nye rnother submarine .                                                                                                             -

                                                                                         DEFENSE OPERATION S

 cl 1 R-CI) costs it will accept under Government co n      ments for spare aircraft engines included two factors —
tractti . 1'nder policies of the Department of Defense      the depot stock factor and the safety factor—which
and ~,I dw National Aeronautics and Space Adminis-          provided for similar or identical contingencies and
u :ctic,n, the-IR&D need not be related to current o r      were thus duplicative . Elimination of the depot stoc k
prospwli%,- Government _procurement . Under the             factor could have reduced the planned requirement
polio of rice Atomic Lnerg y Commission, the IR& D          for fiscal year 1969 by about 200 engines at an esti-
cost is allowed only to the extent that it benefits the     mated cost of about $35 million . Future projections of
contract work .                                             requirements could be correspondingly reduced . ' Fil e
    Certain suggestions made for the consideration of       Department of Defense stated that, in its opinion, th e
the Congress in determining a Government-wide policy        factors were not duplicative . However. GAO's
on IR&D and related costs were considered in hear-          analysis of the Department's rationale did not suppor t
ings held ill February -arid March 1970 before th e         this conclusion, and CIAO recommended that the Sec-
Senate and House Committees oil Armed Services.             retary of Defense reconsider the position taken. (Se e
 (See Appendix Section I, Item 119 .                        Appendix, Section I, Item 202 . `
    Reports on the development of specific weapon sys-          Another report presented finding=s on a follo%%up re -
tems covered the NIKP-N antiballistic missile (whic h       view of manamement of military supplies in the Fa r
evolved into the SENTINEL, now called SAFE-                  East. Although the military services had continue d
GCARD ,the Sheridan and NI60 tanks, and the dee p           to provide adequate support to units in the Far East,
submergence rescue vehicle .                                the supply systems in the Par East, as well as the sup -
    In these reports GAO questioned the adequacy o f        porting systems in the continental United States, con-
the Government ' s control over the prime contractor' s     tinued to be costly and inefficient in providing th e
technical and administrative management of develop-         support.
tnent of the NIKE-1 antiballistic missile : the rca-            'File problems stemmed principally from the inac-
sonableness of atlthOri7ing production of appreciabl e      curacy of stock records ; the inaccuracy of projection s
quantities of Sheridan and M60 tanks despite know n         of quantities of stock required ; the inadequate control
deficiencies in essential components : and the need ,       over unserviceable equipment and components to in -
under the existing circumstances, for the procuremen t      sure their return, repa'r, and reissue ; and the exces-
of additional cleep subiner Bence rescue vehicles . Pro -   sive yolumc of high priority rc, iisitions. The Assistan t
posals_ for corrective action were generally accepte d      Secretary of Defense (Installations and Logistics )
by the Department of Defense and the military de-           a,rcecl with GAO's findings and recommendation s
parunents involved . (See Appendix . Section L Item s       and stated that actions had been taken or wer e
 116, 117, and 118. )                                       planted to iniproye the conditions noted in the report .
    Another report concerned the funding of the con-         {See :Appendix. Section I . Item 200 . 1
struction of two research and development facilities b y        Digests of three other reports are presented in th e
the Air Force. The :fir Force had used fluids in th e       Appendix_ Section I . These reports are further identi-
amount of $861,700 which had been appropriated fo r          fied in the following summaries .
research, development, test, and evaluation . In GAO' s          At the three Defense Supply Centers, inadequate
opinion, the Air Force was without statutory author-          controls o ver the projections of future requirement s
ity -touse. such funds for the construction . In response     for stock were the principal factors in the accumu-
to a GAO recommendation, the Air Force took steps             lation of about 5250 million worth of stock whic h
to review, at headquarters level, the funding of al l         was excess to all known needs . (See Item 203. )
proposed research and developtttent projects expecte d           Supplies and equipment received at major suppl y
to cost. more than 525,000. (See Appendix, Section I ,
                                                              depots of the Department of Defense could not b e
 ftem 120 . )
                                                              readily identified, located, and issued because of de -
                                                              lays and inaccuracies in processing, storing, and re-
Supply Managemen t                                            cording the material received . (See Item 20} . )
  Five reports tyere issued to the Congress on re-               Excess and surplus Government property was
views of various aspects of supple management .               transferred to the Military Affiliate Radio System ( a
   In one report GAO pointed out that the method use d        system established by the Department of Defense to
by the Air Force and the Navy to con quite require -          prmido auxiliary cortuuunicationsl without ade -



      givate assurance that the property was needed by th e         Bureau of the Budget (now the Office of Manage -
      System or adequate surveillance of the disposition of         ment and Budget) policy that Government furnish-
      the transferred property by the System . (See Ite m           ings are not, with certain exceptions, to be provide d
      211 . )                                                       in housekeeping quarters within the United States .
                                                                    (See Item 210. )
                                                                       "Packages" of industrial plant equipment, re-
    Facilities and Constructio n
                                                                    served by the Army for contingencies of war to pro -
       GAO issued seven reports to the Congress : four deal t       duce specific items, did not meet the Department o f
    with construction of facilities, two with manageme A            Defense criteria for retention in some instances ,
    of household furnishings, and one with retention of re -        in other instances the packages did not includ e
    serve industrial facilities . Digests of these reports ar e     enough equipment to meet the production objec-
    presented in the Appendix, Section I . The followin g           tives . (See Item 201 . )
    summaries further identify the reports .
         Contractors operating Goverment-awned plant s            Maintenance and Modification s
      were authorized by the Department of Defense to             of Military Aircraft
      provide the financing for construction of new facili-
      ties and to recover the costs through overhead                 Two reports were issued to the Congress on thi s
      charges against Government supply and researc h             topic .
      and development contract,, thus bypassing the con-             The '_Navy and the Air Force followed differen t
      gressional review and approval procedures . (Se e           procedures and practices in aircraft maintenance . GAO
      Item 106 . )                                                evaluated and compared the way the two service s
         Construction of mess halls was authorized withou t       scheduled maintenance operations . For purposes of
      adequate consideration of (1) the unused capacit y          the review, the F-4 aircraft, which is common to the
      of existing mess halls and (2) the fact that the de -       Navy and the Air Force, was selected .
      sign capacities of the proposed mess halls exceeded            The Navy could realize savings and reduce down -
      the rates of -'ilization actually experienced . (See        time of aircraft by following Air Force practices i n
      Item 109 . )                                                scheduling and performingou;ganizational maintenance
         Much of the unused engineering and design effor t        (that performed by operating units in support o f
      expended inconnection with proposed constructio n           their own operations) . Had the Navy followed Air
      of facilities could have been avoided through bette r       force practices, the equivalent of 40 additional F-4
      planning by the installations which needed the facil-       aircraft could have been available during fiscal yea r
      ities and through closet- coordination between those         1968 and costs might have been reduced in fiscal year s
      installations and the design a- encies before an d          1967 and 1968 . The Navy's costs for that perio d
      during the Zlesign phase. (See Item 108 . )                 were abort $4.3 million higher than the costs incurree..
         The Navy acquired various facilities in Naples .         by the Air Force for an equivalent number of aircraft . ,
      Italy, exclusively by leasing without considering th e         Also, neither the Navy nor the Air Force had give n
      relative merits of acquisition under the military con-      sufficient recognition to the results of studies, an d
      struction program . (See Item 107 . )                       their own experience, which indicated that less fre-
         There was no centralized management of house -           quent scheduling of depot maintenance—that which
      hold furnishings overseas and each of the military          is major and is performed at industrial-type mainte-
      departments used differing methods and criteria fo r        nance depots appeared to be warranted in som e
      determining requirements and for repairing, main-           instances .
       taining, and disposing of unserviceable furnishings,          GAO suggested that the Navy consider applyin g
      and provided different styles and Finishes of fur-          air Force practices to its own organizational-level
       nishiugs ; thus hindering consolidation of purchase s      maintenance operations, and that the Navy and th e
      and interservice transfer of excess furnishings . (Se c     Air Force continually review their criteria for fre-
       Item 209 . )                                               quency of scheduling depot-level maintenance . The
          The Department of Defense instructions govern-          Department of Defense agreed in substance with these        ~
      ing the providing; of household furnishings did not         recommendations . (See Appendix, Section I ; Ite m
       contain adequate guidance to insure adherence to the       206 .)

    so                                                                                                                        r

                                                                                       DEFENSE OPERATION S

            le"M                                        ~l
                                                        tl                                                    Y

                         Anny                                                    Marine Corps

   In a review of modifications of aircraft by the Army ,    of the recommendations and deferred judgment o n
GAO found that the modifications--including thos e           three others pending completion of its own study
classified as being urgent-were not made promptly            and of a joint study then being performed by th e
because of the volume of modification work orders            three military departments . (See Appendix, Section
and the resultant workloads beyond the capacity o f          1 . Item 207 . )
maintenance activities . l,fore effective management re -
view of proposed modifications was needed to insur e         Administration of Military an d
that the work could be performed within the specifie d       Civilian Pay and Allowances
   GAO noted also that modifications were delaye d             The number, variety, and complexity of entitle-
because modification kits were not received on tim e         ments provided by legislation covering military pa y
and additional costs were incurred because the modi-         and allowances create difficult administrative prob-
fications could not be performed concu rrently tivit h       lems . Although the military departments have take n
overhaul of the aircraft.                                    prompt action with respect to erroneous or illega l
   GAO made certain recommendations to improv e              payments identified by GAO and have accepted sug-
modification operations . The Army implemented one           gestions for corrective measures to preclude recur -


                         DF.1'ENSt. OPPRd7IQM S

                   rence . erroneous payments in significant amount s           advance payments are deducted from pay in subse-
                   cauinuc to be made .                                         quent fit.-.Toll periods. (See Appendix, Section I ,
                       It is the opinion of the General Accounting Offic e      Item 187 . )
                    that the administration of military pay and allow-             Three reports covering reviews of per diem pay-
                    ances will not be improved significantly unfi t the         ments to military personnel on extended temporar y
                    present complex laws are simplified. The Departmen t        duty assignments, the administration and operation o f
                   of Defense has made a number of studies in recen t           the Overseas Dependents School System, and th e
                   years with the vieNv of simplifying the pay and              Army's administration of its employees ' suggestion
                    allowance structure and has considered preparin g           award program were also issue :l . Digests of these re-
                   legislative proposals for submission to the Congress .       ports, which are summarized below, are presented in
                    However, no legislative proposals for simplifying th e      the Appendix, Section L
                   military pay and allowance structure have yet been                Savings of about $800,000 a year could be realized
                   submitted by the Department .                                  if the per diem payments to student officers at th e
                      GAO's review of civilian pay and allowances in -            Army's Fort Rucker were reduced from the maxi-
                   eluded an evaluation of the effectiveness of th e              mmm allowable rate to a rate appi_ ; i.rating cost to
                   internal audit work, a statistical sampling of the pro-        the student officers during their 16-week temporar y
                   priety of salary rates, an evaluation of the effective-        clutr assignments . (See Item 188 : )
                   ness of time and attendance procedures and controic ,             There were deficiencies in the adminstration an d
                   and an evaluation of the effectiveness of the conver-          operation of the Overseas Dependents School Sys-
                   sion of National Guard technicians to Federal em-              tem in the European area involving such things a s
                   ployee status as provided by Public Law 90-486.                student enrollment forecasts, adequacy of classroom s
                      During the year five reports were issued to th e            and other facilities, procedures f r r setting schoo l
                   Congress on military and civilian pay and allowance            construction priorities, and policy on use of sub-
                   matters .                                                      stitute teachers . (See Item 189 . 1
                      One of the reports covered a review of the pro-                There were deficiencies in the suggestion award
                   priety of certain incentive payments made to enliste d         portion of the Army Incentive Awards Program in-
                   men . The incentive payments (proficiency pay and              volving the processing of suggestions, the dissemina-
                   variable reenlistment bonuses) are authorized by la w          tion of those having p otential for wider application, ,
                   to be paid !o . enlisted men possessing critical skills to     and the procedures for computing and documenting
                   induce them to remain in the military services . The           savings attributed to the suggestions . (See Ite m
                   Navy and the Air Force were making such payment s
                                                                                  190. )
                   to enlisted men enrolled in officer candidate trainin g
                   programs . This was improper and inconsistent with
                   the intent of the law . No evidence was found that im-       Manpower Utilizatio n
                   proper payments of this hype had been made by th e              GAO issued five reports to the Congress on review s
                   Army to enlisted men in its officer candidate program .      of various aspects of manpower utilization .
                   The Department of Defense advised that instruction s            One of the reports covered a review of the reason s
                   had been revised to preclude future improper pay-            for, and the effectiveness of, the Army ' s extensiv e
                   merits . (See Appendix, Section I, Item 186 . )              formal training organization in Europe—the U .S .
                      :mother report concerned the Army's accountin g           Army School, Europe—in view of the fact that th e
                   for payments to military personnel made in advanc e
                                                                                Army operates a large service school system in the con-
                   of regular paydays . GAO estimated that overpayment s
                                                                                tinental United States . "File school in Europe conducted
                   of about $3 :5 million hadbeen made during tit e
                                                                                88 (-nurses in fiscal year 1968 which were attended b y
                   6-month period reviewed because certain advance pay -
                   merits had not been deducted from the pay of th e            about 32,000 military personnel at a cost of about $1 0
                   recipients in subsequent payroll periods . This resulte d    million .
 I, fromdeficiencies -in the handling of, and accountin g                          Practices followed by the Arm%, in assigning, mili-
                   for, the individual financial documents relating t o         tary personnel to Europe contributed to the need i n
                   the advance payments .                                       Europe for an extensive formal training effort . How -
                      The Army agreed with these observations and re -          ever, maximum benefits were not realized from the
                   established itscentralized program for verifying that        formal t raining effort because imam- of the students

                                                                                           DEFENSE OPERATION S

  I were being trained in skills not related to thei r        Strategic Air Command of the Air Force . The force s
assigned duties, (2', had attended similar courses pre-       were maintaining a high state of readiness at each o f
viously . or (31 were returned to the United States be-       the bases and apparently were capable of fulfilling
fore they had had an opportunity to a r il lN, their train-   their assigned missions. GAO was impressed with the
ing. The U .S . Army, Europe, took action to implemen t       management emphasis and techniques used to stres s
coiwctive measures . (See Appendix, Section I, Ite m          the importance of combat readiness and expressed the
166 . )                                                       oelief that the other military services could profitably
   Digests of four other reports are presented in th e        adopt some of the procedures . Several suggestions were
:appendix, Section I. These reports are summarize d           made, which the Air Force adopted, for improvemen t
below .                                                       of the readiness reports prepared by the Strategic Ai r
     The Navv's military personnel data system, o n           Command, and the Secretary of Defense requested th e
                                                              other military services to evaluate the applicability t o
  which it relied for information in making decision s
                                                              their operations of the techniques used by the Ai r
  on such matters as personnel assignments, promo-
                                                              Force . (See Appendix, Section I, Item 171 . )
  tions, ;and school selection for its 1 .2 million active
                                                                The other unclassified report dealt with the Army
  and reserve militate personnel, contain-d numerou s
                                                              Reserve Components (Army National Guard an d
  errors ; the error rates for many data items were
                                                              Arms Reserve) . A review of the readiness of 10 units,
  considerably higher than those acceptable unde r
                                                              selected from those included in contingency plans fo r
  the ..Navy's standards . (See Item 155 . )
                                                              early deployment, showed that they were not ready for
     Lack of flexibility in the management of civilia n
                                                              mobilization and deployment as rapidly as planne d
  personnel ceilings and certain recruiting problem s
                                                              because of deficiencies in organization, training, equip -
  resulted in :
                                                              ment, and management .
         The uneconomical and otherwise undesirabl e
                                                                 Records showed that about half of the personne l
     practice of contracting for needed services b y
                                                              were not qualified to perform assigned duties, wer e
     militate installations. (See Item 167 . )
           Overtime ranging from 3 to 29 percent of regu-     receiving training incompatible with needs of thei r
                                                              units, or might not be immediately available if thei r
      lar pay, at the military installations reviewed, a s
                                                              units were mobilized . Also, material programmed fo r
     compared with the Department of Defense limita-
                                                              the Army Reserve Components had been sent to South-
      tio. representing 2 percent of regular pay . (Se e
                                                              east Asia, leaving only limited material available fo r
      Item 168. )
                                                              training. The Army generally agreed with GAO's find-
      Use of invalid performance standards for civilia n
                                                              ings and proposals and stated that (1) consideratio n
  production personnel at the Yorktown Naval Weap-
  ons Station resulted in significant amounts of idle         would be given to affiliating Army Reserve Com-
                                                              ponents with similar active Army units and to develop -
   time in operating a bomb production line . (See Ite m
   169 : )                                                    ing a means of projecting training requirements fo r
                                                              the Army Reserve Components and (2) greater em -
                                                              phasis had been placed on this area by the Arm y
Combat Readiness of {Military Unit s
                                                               Audit Agency . (See Appendix, Section I, Item 172 . )
and Related Supply Suppor t
   Four of the six reports issued to the Congress i n         Administration of Communication s
this area are classified "Secret" and relate to th e
                                                                In a report to the Congress, GAO presented th e
Seventh Army units in Europe, war reserv e materie l
in Europe, HAWK missiles in Vietnam, and Atiand c             current status of the unified National Communication s
and Sixth Fleets . A summary of the unclassified find-        System . Establishment of the System was directed b y
ings con`-wined in the "Secret" report on the Atlanti c       the President on August'-) 1, 1963, in order to strengthen
and Sixth Fleets—which relate to the supply, personnel ,      the communications support of all major functions o f
and equipment problems in efforts to achieve a desired        the Government and provide necessary communica-
state of readiness of the Fleets—is presented in th e         tions under all possible conditions, including nuclea r
,Appendix, Section I, Item 72a .                              attack . In the intervening years, hundreds of million s
   One of the unclassified reports dealt with th e            of dollars have been expended annually by the De-
manned-bornber and ballistic missile forces of the            partment of Defense and other Federal agencies in th e

    proculr-nu,nt . construction, operation, and mainte-         routes, more capacity was scheduled than needed ; on
     nartce of (umponent eotnmunication networks wit h           others, less was scheduled than needed . Also noted
    little effective- r_entralized direction and control . Ex-   were areas where operating costs could be reduced b y
    cept for the =President of the United States, there wa s     promptly revising routes as requirements change, b y
     no individual- or organization in the Government wit h      reducing the number of flights to some stations, b y
    the authority, stature; and resources to provide th e        eliminating flights where truck service could be use d
     essential polio-, direction, and control required t o       more economically, and by achieving fuller utilization
     establish a unified system .                                of cargo capacity through better scheduling of carg o
        GAO recommended that the President consider a            to be shipped .
    major realignment of theexisting structure and or-              The Air Force generally concurred and stated tha t
    ganizational arrangements for communications whic h            I i procedures for projecting cargo capacity require-
     would establish an organization with sufficient stature ,   inents were being improved, (2) the frequency o f
    authority, and resources to provide a strong centra l        LOGAIR flights to one station had been reduced, (3 )
    authority as a focal point in telecommunications mat-        five stations previously served by LOGAIR were bein g
     ters . Tlte - Special Assistant to the President fo r       served by truck from nearby stations, and (4) correc-
    `I'elecomutunications assured GAO that its recom-            tive action had been taken to achieve fuller utilizatio n
    mendation would be given thorough consideration .            of cargo space on LOGAIR flights . (See :appendix ,
    Subsequently, on February 9, 1970, a new Office o f          Section I, Item 218 . )
    Teleconun inications Policy was established in the
    Executive Office of the President . (See Appendix,           Adn: :aistration of Certai n
     Section 1, Item 227 . )
                                                                 Other Programs
        A report was issued to the Congress on the Defens e
     Communications Agency's inability to evaluate th e             Four report, on reviews of certain other program s
    propriety of charges for termination of services fur -       were issued to the Congress. These programs include d
    niched by communications carriers when the use o f            Project One Hundred "Fliousand (training of enlisted
    specialiv constructed communications facilities is in-       personnel to qualify them for military service) . Projec t
    volved .- GAO concluded that, if the Department o f          T12A?ISITION (training of enlisted personnel to pre -
    Defense obtained cost data from the carriers, termina-       pare them for civilian life after military service), foo d
     tion charges would be lower . Several suggestions wer e     inspection by the Department of Defense and othe r
    tirade to the Secretary of Defense along these lines .       Federal organizations, and coordination in the per-
     (See Appendix, Section 1, Item 228 . )                      formance of internal management review and evalua-
                                                                 tion functions . Digest of these reports are presente d
    Administration o f                                           in the Appendix, Section I, and are further identified
    Transportation Matter s                                      in the following summaries .

       The discussion of GAO's work in the Departmen t                Project One Hundred Thousand had a marked
    of Defense oil transportation matters is included i n          degree of success in relation to its objectives, al -
    Ghapter Seven, Transportation, beginning on page 99 .          though there were some problem areas. (See Ite m
    Iii additio- . GAO reviewed and reported to the Con -          11 . )
    greys on the administration and operations of the Ai r             Project '1'RA\SITIO! «as relatively new at th e
    Force logistics airlift system known as LOGAIR .               time of review and a conclusiVC evaluation of it s
    LOGAIR provides airlift, under contracts with com-             effectiveness could not be made ; certain improve-
    niercial carriers, for high priority cargo within th e         utents were needed to insure achievement of th e
    continental United States. It provides daily suppor t          stated objectives . (See Item 12 . )
    for all hrstline weapon systems of the Air Force an d             In the absence of a clear expression of Federa l
    also serves Air Force bases in remote areas which lac k        pciicy on food inspection, the. function is performed
    adequate commercial transportation . The annual cos t          by the Department of Defense and by other Federa l
    of the system is about $35 million .                           a,encics—in addition to State and local agencie s
       GAO pointed out that the - projections of cargo             with the result that similar inspections are made by
    capacity requirements were not accurate . On som e             more than one organization, at the same commercial


t                                                                                                                             n
                                                                               DEFENSE OPERATION S

cstablishmem, and tinder differing criteria. (See     that were performing management reviews an d
Mein 24, i                                            ev .4uations within the Department of Defense-
   There was a heed for an overall coordination and   more-or-less independently of each other . (See Ite m
for guidance of the total effort of the many groups    146 . )


                                                                                            INTERNATIONAL             OPERATION S

                                                                   f,,, . Pea c e programs, are foremost in GAO's interna-
                                                                   ronal .,tick . Otber major international operations sub -
                                                                   ;ect to resiew include Inrci?;t trade programs :
                                                                   partici ;eation in intri iatiwi .1i organisations ; manav -
                                                                   T,wnt amd utilisati,,ii of C .S .-ot,ned forcien cum°envies :
                                                                   ol-zr .uus 311" . ( till '-' the C .,_ halance-of-pa,°aunts posi-
                                                                   h,m : and inanacement and opr-rations of 1- S . vmbas-
                                                                   sies, consulate< . and w!wi installations in `oreig n
                                                                     ount ries .
                                                                        Durim(isc,a crier 191- (), tlmGeneralAccountingOf-
                                                                   hre c ontinued to pLIc, -pedal emntias~s on reviews O f
                                                                   U .S pro«rani, and : ti% ; fi- heilw, rondut=-d in Viet-
     CHAPTER SIX                                                   nam and Southeast :Asia .A substantial purtit_n of it s
                                                                   audit effort „as c!ccoted to count~,,ide and othe r
                                                                    broad scope re,it« of L' .S . foicign assistance an d
                                                                    related prngrums . Ftur-tional-type reviews of the sno w
                                                                   ciguificaM prpL'rafirs in India and in other parts of th e
                                                                    world were performed .
     AUDIT OF INTERNATIONAL                                              As a result of its reviews of international program s
     OPERATIONS AND PROGRAM S                                       and activities . G,AO submitted -12 reports to the C)om-
                                                                   gress. Tw-w,\--three of these reports (,( ' re subs :ittcd t o
                                                                    the Co p ses,; as it whole and 1 1) t+ere submitted to it s
     Nature of Work Performed                                      committees, officers, or -Members on special reviews .
                                                                    audits . or investigations made in response to their rc-
        Most international programs continue to be per -
                                                                    yuests . T~renty-ri, reports were submitted to agenc s
     formed by the Department of State and the Depai t-
                                                                    officials in relatit n to management and operatin g
     ntetit of Defense . However . an inccasir, number o f
                                                                    procedures .
     other L .S . Gmertuncnt de p artments and -agencies are
                                                                        Defense international activities arc discussed in this
     also engaged in administering international progrun s
                                                                    chapter. Other audit „ork performed oveiseas pertain -
     or elements of them in foreign countries . 'These include :
                                                                    in”, 10 te
                                                                             h Department of Defense and the three military
          Depatmnu of the 1' rcasur~ Imermational 11-               departments is im of porated in Chapter Five, Audit o f
             namcc I'm,r_tiot;s.                                    Defense Opetatrons and Programs .
          Post Office DeparmtrntLtterrational S :~r~ ices .              Dw-ing the year . G :AO conducted audits outside th e
           Department of CommerceLtterna . ;icanaf Pra -            United States as srunmtaized below . mcluding those
             ,iams and :Affair . .                                  performed at U .S . military inslauations abroad .
          llepartnent of ~g1ic ulture—Foreign -Asr ricultm i d                                                                Cnti m rie .a
                                                                                                   :1 rra-+
             Functions .                                           European Branch Are a
                                                                       !Europe, _Africa, .'ear East, and South Asia)	         -       22
           United States Information Agency.                       Frr East Brit nch .-\rc a
          Peace Corps .                  .                             ;Southeast :Asia and Pacific :	                                10
                                                                   Latin America and other foreign areas	                             1 t
           Eepoi t-Import Bank of the United States .
                                                                           Yotai                                                        43
          VV arious indt-perldcnt agencies .
        As nianc international programs involve interrelated         To if limited extent 0;AO provided advisory assist-
     perfor,a ; aces in %Jlich several depaitnumts and agen-       ance in improving financial management to govern-
     cies or coordivatin-, bodies participate . GAO's ap-          mrnt officials, heads of foreign audit institutions, an d
     proach has lien broadened to piovide more inform-             students of foreign wenties . many° of whom are spon-
     ative reporting .                                             sored under U .S . foreign assistance programs . Thi s
        L .S . foreign ts•i,tanrc programs . including man y       ,ear t ; ;A0 provider ; btiefulgs to and cnl_aged in dis-
     facets of economic i1nd militaiv assist mcc amd Food          cussioms scitft individuals and groups front 18 countrie s



     and the International \tonne EnergAgency . GAO
                                                                                Reviews of U .S . Activitie s
     efforts in this area uu'eie limited to a few hours of                      Relating to Vietna m
     orientation and briefing and did not invoke long term                      and Southeast Asi a
     training .
        The visiting foreign nationals included ambassadors :                       Because the Congress has continued to express con-
     heads of audit oiganiz_ations and their staff utembers :                   tern Over the enormous expenditures and management
                                                                                problems associated Nrith the nwltiple U,S . programs
     finance, budget, and treasur} officials : members of
                                                                                and activities being performed in Vietnam and South -
     parliaments : national bank officials : and others hold-
                                                                                east .Asia, the General Accounting Office ha s con -
     ing top level financial management positions in goN'-                       tinued to devote a considerable portion of its audi t
     ernment . 'fhe r were interested in the functions and                      effort to recies%s of the more significant prog=rams i n
     operations of the General Accounting Office and its                         these geographic areas .
     tole in ralation to executive branch activities . Specific                     I'liis vear GAO issued 35 report relating to pro -
     interests varied through such subjects as audits inde-                     erauns and activities heing conducted in Vietnam an d
     pendent from the exccut ve branch : relationships kith
                                  i                                             Southeast Asia . Seventeen of these reports acre mad e
     and reporting to the Congress : accounting systems re-                     in response to requests Isom congressional committee s
     viescs and approvals : staff development : auditing by                     or individual Members of the Congress . Tthc reports
     automatic data pioeessin'T equipment : and GAO's                           included such matters as :
     work in the field of programming, planning, and                                    Qucstiouable support of a private venture i n
     budgeting systems .                                                          -   I'hailand under the investment guaranty program .



                                            t                           . . .

                                                         ..       ; r                                                         i   Y
                                      .                                                       ~I    l          ,


                             â iflerertt lrpec of P .t• goods on ;ale at a stall in the C,holan .ertion   of Saigon .

                                                                                           INTERNATIONAL OPERATION S

     U .S . assistance to the Philippine Government i n             Broader Based Reviews o f
  supportof the Philippine Ciyit :Action Group .                    Program Result s
     Policies covering the collection of dollar claim s
  from the Government of Vietna m
     Questionable payment of taxes to other umerr: -                Countrywide Reviews of U .S ,
  ments on U .S . defense activities overseas .                     Foreign Assistanc e
     Prices negotiated tot rock-crushing plants for us e
  in Vietnam .                                                         As previoush stated, GAO continued to place em-
     Illicit practices affecting the U .S . economic as-            phasis on countywide reviews of the various U .S .
  sistance program in V i etnam .                                   foreign assistance programs and activities Ge eing per-
     Review of special cost-of-living allowance pai d               formed by the several U .S . Goveinnumt agencies withi n
  to civilian entplovees assigned to Viet72am .                     selected recipient countries . 1•his approach provide s
                                                                    a broader perspective as a mear> for reporting on th e
   Some of these reports arc discusses] else here i n
                                                                    effectiveness with which the total IoUltm , encv activi-
this chapter. At June 30. 1970, reports here in process
relating to the need for f 1 increased control over loca l          ties, tcithin a given country . were programmed, man -
currency made available to the Republic of Vietnam                  aged, and meeting U .S . objectives .
for support of its militan and civil budgets and 2 ;                   Six reports on countrywide review's were issued . f ivc
improvements in the management of military con-                     of these• Submitted to the Congrc°es, related to count s
struction contracts in Vietnam .                                    reviews of Tunisia, Laos . Guatemala . Ethiopia, and

                                             c{ •

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Le Kef Nord- Rrhef Ptop,t . 11 'orb-,-re .rith thri; ;ch"t pat m ;nr in rr=mornir rid bags_ Thr Aiabir ir ;,,oPfinn on the bags read s
                                                  " .-1 Gift of the A , ;,,lrrn. Pc=Fir . `


Thailand . 'File sixth report, a review relating to Ni-        Interagency and Trade Program s
geria, was submitted to agency officials .
                                                                  L7 accordance with various legislative provisions, in-
   At the close of the fiscal year work was nearing com-
                                                               cluding the Foreign Assistance Act of 1961, a s
pletion on country reviews of Honduras and Liberia ,
                                                               amended, and the Agricultural Trade Developmen t
and projects relating to Morocco and Afghanista n
                                                               and Assistance Act of 1954, as amended f commonl y
were underway.
                                                               known as Public Law 480 or Food for Peace), certai n
   A report to the Congress on the Foreign Exchang e
                                                               international programs conducted abroad are admin-
Operations Fluid (currently the largest of the eco-
                                                               istered by, and interrelated between, several U .S . Gov-
nomic stabilization programs in Laos! stated that thi s
                                                               ernment departments and agencies .
activity did not provide for controls and restriction s
                                                                  Seven reports on the results of GAO reviews of in-
on foreign exchange contributed to the Fund . It „a s
                                                               teragency and trade programs were issued during th e
practically impossib :° to detect the extent to which for-
                                                               rear . T\% c, reports were submitted to the Congress, on e
eign exchange was used in gold trade, capital flight, o r
                                                               of xrhich related to U .S . balance-of-payments ach, an-
for other purposes which may not be in the best in-
                                                               tages and the other to commodity trade assistance . A
terest of the United States . In response to GAO ' s pro-
                                                               report pertaining to Food for Peace activities was is -
posals, AID stated that it will continue to study th e
                                                               sued to a Member of Congress at his request . Fou r
problems related to the Fund and advised GA0 tha t
                                                               reports were submitted to agency officials and referre d
it was negotiating a s)stem for reporting the genera l
                                                               to such matters as the utilization of U .S .-owned for-
purposes for which foreign exchange is used . (See
                                                               eign currencies and to needed inrpt-m ements in man-
Appendix, Section I . Item 73 . )
                                                               agement procedures .
   In the report on Tunisia, GAO expressed the opinio n
                                                                  In order to identify the magnitude of foreign as-
that progress has been made in achieving the mail )
                                                               sistance being, provided to certain less developed coun-
purposes of U .S . economic aid but that additiona l
                                                               tries through the operations of the United State s
progress could be attained if AID Nrerc more selective
                                                               Sugar Act and the International Coffee :Agreement,
in choosing projects to be supported with counterpar t
                                                               GAO made a review of the subject . The report esti-
funds and watched more closely the receipt and us e
                                                               mated that about $600 million a year was being so
of AID-financed commodities . Action has been take n
                                                                ,royided and pointed out that there are seyeral~sig-
by AID on a number of matters which shoul d
                                                               nihcant distinctions between commodity trade as-
strengthen the programs, particularly in the area s
                                                               sistance and the more traditional forms of U .S . aid . A
relative to selection, receipt, and use of commodities .
                                                               major reason for some of these distinctions is that
 (See Appendix, Section I, Item 7-1 . )
                                                               commodity trade assistance is inherently linked to pat -
   In a report on Guatemala . GAO stated that at -
                                                               terns of production and trade . :Another is that, fo r
though total assistance to that country from all donor s
                                                               the most part, commodity trade assistance is trans-
amounted to $ 175 .6 million between 1961 and 1968 ,
                                                               trutted through commercial channels, while traditiona l
no unified effort amon g. assistance donor, to impress         foreign aid is transmitted through the donor govern-
upon the Guatemalan Gotiernnrent the need for irri-            ment .
tiating meaningful self-help measures or to use th e              The Agency for International Development and the
leverage inherent in their combined assistance to -            Department of Agri ; ulurre agreed that foreign aid is
Nyard this end was found . AID endorsed the GA O               transmitted through the operations of the Sugar Ac t
recommendation regarding the benefits that could ac-           and the Coffee Agreement . Howe%-er, they did no t
crue from irnproyed coordination of assistance t o             agree %%ith some of GAO's recommendations for int-
Guatemala . Progress has been made in,, coordinatinL,          t>tnyin ; the commodity trade assistance programs .
the operations of ide p tified donors with the operation s        C; .\O believes that I Ithe cognizant a gencies have
of AID . i See Appendix, Section 1, Item 75 .                  not taken advantage of the flexibility permissible unde r
   Other reports to the Congress on reviews of Ethiopi a       ,he present Sugar act to review and negotiate wit h
and Thailand remain classified and ma : not be sum-            recipient less developed countries development -
marized ; however, the}- related _,,encially to the overal l   oriented applications of sugar assistance and that 2
U .S . objectives in the countries and to the manne r          the Agcncy for International Deyelopn.ent's recom-
in %ihich the programs were achninistered t=, carry ali t      mendations on coffee assistance are consonant 16th a
U .S . strategy to rneet those objectives .                    gradual approach to more effecti%c programming .
                                                                                      INTERNATIONAL OPERATION S

Congress may wish to consider whether the foreig n                the cost data used in their studies . Appropriate provi-
aid element should be all explicit objective of the un-           sions will be made for future procurements of :Ameri-
derlying legislation and treaty for commodity trade as-           can-made buses when^yer such studies shots economi c
sistance . (See Appendix, Section I . Item 76 . i                 advantages to the United States . (See Appendix, Sec-
   Work in various stages of process at June 30, 1970 ,           tion I, Item 82 . )
included re%iews of the (1) methods to constructivel y                 \nother report expressed the view that improve-
utilize U .S .-owned excess currency in India, (2) eco-           ment, were needed in the management of Governmen t
nomic advantages of using American-made trucks t o                owned and leased real property overseas . Fourtee n
transport military- cargo abroad, and ( 3 ) opportunitie s        recommendations were made to the Department o f
to replace offshore procurement of food by utilizin g             State to strengthen the administration of the foreig n
surplus American food .                                           buildings program . _Also, the report presented, for con -
                                                                  sideration of the Congress, opportunities that exist a t
Other Broad Scope Review s                                        several locations for sayings in leasing and buildin g
                                                                  operations costs by disposing of uneconomical prop-
    Considerable audit efforts were expended on other             erties and constnrcting new buildings . In addition, i t
 revietys of a broad scope nature . These were comprise d         pointed out that certain real properties had been ac-
of functional-type audits relatim, to the administ ratio n        quired tyhich were not, and were not required to be .
of selected U .S. Government prograrns being- per -               presented to the congressional authorization commit-
formed within several foreitni countries or in countie s          tees for consideration, or %%hick had cost substantial )
throughout the world . The followin5 reports ar e                 more than the cost estimates initialh considered 1- V
 illustrative .                                                   the crnt'_~ressional committee in the authorization proc -
    One repo, ; concerned the questionable payment o f            ess . This matter was presented to the Congress so tha t
 taxes to forei g n goyerntnet) ts on U .S . defense activities   it could consider the practice in deciding whether i t
overseas . Although the U .S . Government and variou s            wished to strengthen its control over the foreign build-
other gmenunents have agreements for exemptio n                   ings program . Officials of the Department of Stat e
 from taxes and duties on items for their common de-              expressed the view that the findings and reconunenda-
 fense or mutual national security, C ; :AO found that sub -      tions resulting from GAO's review had made a con-
stantial tax costs had been incurred by the United                structive and useful contribution toward long term
States in counties throw-diout the world including-               itnpr , entent of the program . The specific corrective
 --Vietnam, $28 million ; Thailand . ,$-'. million : and Ger-     actions proposed by the Department of State were no t
many, S2 .2 million . Joint comments furnished by th e            knoiyn at the end of the year . ? See :Appendix, Sectio n
Departments of State and Defense recognized that ta x             1 . Item 211 . E
exemption problems exist and reflected genera( con-                   In Jule 1961 . GAO issued a report to the Depart-
currence x6th the objectives of surngthening U .S . man-          incrit of State and the :Aeency for International De-
agement in dealing v%ith foreign tax exemption prob-              yelopment concerning the benefits and sayings tha t
lems . In line \tith GAO recommendations, a numbe r               could be had through merger of their separate auto-
 of corrective actions have been initiated . = Sec Appen-         matic data processing systems_ .\ joint working crou p
 dix, Section 1 . Item 81 . )                                     of representatives from the Foreign :Affairs Community
    :A report on the cost and balance-of-payment ad -             agencies ,'State, :AII), USIA . Peace Corps, an d
 vanta g es of replacing foreign-made buses vyith Ameri-          ACDA) was formed and has continued in existenc e
 can-made buses abroad revealed a need for the militar y          since 1968, but there has been little progress . GAO ha s
 to develop better operating and maintenance cost dat a           continued to participate in discussions and meeting s
and to prepare mom timely and accurate cost studies .             with the agencies concerning the development of a sin-
 GAO cost analyses showed that substantial sayings                gle Data Processing Center to service the needs of th e
 could be realized by using American-made buses at cer-            Foreign Affairs Community . On February 2, 1970 ,
 tain overseas locations in lieu of leased foreign-mad e          GAO addressed a letter to the Secretary of State an d
vehicles . 'T'he Department of Defense stated that th e           the :Administrator, :AID, reemphasizing the need for a
 military departments were in general agreement wit h             shift of emphasis away from their continuing indefinit e
GAO findings and conclusions and advised that seep s              study and proposing that they develop an action plan .
are being taken by the military departments to improve                On April 10, 1970, GAO transmitted to the Depart -



      meat of State some overall observations on the nee d           on which the assessments N%ere being made . (Se e
      for more effective control mechanisms and approache s          Appendix, Section I . Item 77 . )
      for program management and the related need fo r                  GAO reported that United -Nations Developmen t
      modernization of its budgeting, management report-             Progr in assistance :was granted to countries whic h
      ing, and accounting systents in order to relate them t o       cwere either relativehdeveloped or seemingly in a posi-
      the management needs in coordinating the Depart-               tion to pay for such assistance . Also, projects ere often
      ment's operating programs . 'I ltese programs include :        reported to be of low priority and %%ideh scattered
                                                                     cwliich dissipated the impact that could be Gained from
            The Foreign Service Institute .
                                                                     an intensification of efforts in more concentrated areas .
            Real estate management .
            Vehicle and fleet management .                            ,See Appendix, Section I ,. Item 78 . ?
                                                                         In GAO's opinion, the Departments of State an d
            Passports .
                                                                     Agriculture had not met their responsibilities fo r
            Educational and cultural affairs pro,mams .
                                                                     developing long range U .S . policy objectives and the
            Foreign assistance developmental programs .
                                                                     program priorities needed to guide the United State s
         In Mav 1970, the Department advised that thes e             in its present and future participation in the Food an d
      areas are under consideration as part of it s                    agriculture Organization of the United -Nations . (Se e
      current study to strengthen operating managemen t              Appendix, Section I, Item 79 .
      effectiveness .                                                    These reports, together with similar reports issue d
                                                                     in fiscal %car 1969 and a revietw of U .S . Financial par -
                                                                     tit ipation in the International Labor Organization ,
      U.S. Participation in                                           ,which was in its final stages at the completion of fisca l
      International Organization s                                   wear 1970 . -sei%ed as the basis for testimony before two
                                                                     congressional cote uittees- On March 5 . 1970, GA O
         U .S . participation in international organizations ha s
      become increasingly important in relation to the tota l
                                                                       SOURCE AND APPLICATION OF FUNDS TO BE ADMINISTERED BY FA O
      U .S . foreign assistance effort . Consequentlw, the Gen-
      eral Accounting Office has been inereasingh concerne d                          DURING THE PERIOD 1968 196 9            .
       with encouraging strong internal audit and inspectio n
      procedures in those organizations which the Unite d
      States supports, and twith seeking Nways of promoti m      ,                              SOURCE OF FUND S

      and encouraging irtrproved financial management ,
      budgetin , and reporting by the internationa l                                                              REGULAR
                                                                                                                  FaOGRA3 f'            SS6 . 0
      or anizations.                                                                                               SSFS<< MTS

         Reports .were issued to the Coa,ress on the need fo r
      more effective management bw the United States o f                                     ExTRA-j%                                        Total   5200 .1
                                                                                             auocErna r
      its participation in the United -Nations Children' s                     S14'I .T   ~ CORTRIfiU110h'S ~

      Fund, the Food and Agriculture Organization of th e
      United Nations . and the United Nations Developmen t
      Program . These reports pointed to the need for th e
      Department of State to obtain sufFr_ient informatio n
      from the international organizations to adequatel y                                     APPLICATION Of FUND S
      assess the programs and projects proposed fnr imple-                                    f–                                  538 . 8
      mentation, as cell as a basic need for estalilishinrt                                                   I~j, 4EG4'i
                                                                                                              i    z.-
      better monitoring and evaluation procedures as a
      means for assuring that U .S . contributions to the ori;a-
      nizations xyere bein_ efficiently and effectiveh utilized .                                                                            Total S200. 2
                                                                                              SUTRA -
         GAO stated that the Department of State had t o                                  \   fi1l9GE TAR N
      abandon procedures that y%ere bei n,q used to assess th e                 5161 .9 \
      projects proposed by the United Nations Children' ;
      Fund because that organization had discontinued th e
      practice of providing the United States the information                                                               E%c L- tNE WOREO         1 .0
                                                                                                                                                        . FROGRAY

                                                                                   INTERNATIONAL OPERATION S

representatives appeared before a subcommittee of th e        cncus _, ained in the establishment and operation of tha t
House Committee on Foreign Affairs and on \fa g 1 ,           group, GAO is currently developing further recent-
1970, before a subcommittee of the House Committee            rnendations for the establishment of independent, ex-
on Government Operations .                                    ternal review and evaluation groups for other majo r
   GAO representatives testified that the Department          international organizations . GAO envisions that suc h
of State was not, and had not been, in a position t o         review and evaluation groups Will have broad authorit }
give the Congress basic assurance that funds con-             and responsibility and report to the organizations
tributed by the United States to United Nations orga-         governing bodies .
nizations had been used in an effective and efficien t           In order to insur e that American financial and man-
manner and to accomplish intended objectives . GAO            agerial expertise and tzlent are made available t o
stated that vigorous efforts were required by the execu-      assist in the economic and social progress of developin g
tive branch to improve its participation in Unite d           countries, GAO believes that the executive branc h
Nations developmental agencies ; in lane measure . inh-       should intensify its efforts to secure an increased num-
provements in U .S . participation i~_vohr the initiatio n    ber of high caliber U .S, nationals as candidates fo r
or support of needed improvements in the Unite d              positions in the international developmental agencies .
Nations system itself . Suggestions %+ere subsequentl y          At the close of the al year_, a study of the overal l
furnished to the subcommittee of the House Committe e         managmnent of U .S . interests in international financia l
on Foreign affairs for a more effective executive branc h     institutions had begun . Primary U .S . Government re-
organization for management of U .S . participation i n       sponsibility relative to these institutions rests with th e
the developmental assistance activities of intrrnationa l     Secretary of the Treasure and the National Advisory
organizations (excluding the international financia l         Council on International Monetary and Financia l
institutions) .                                               Policies . Among the principal issues to be explored in
   Reviews of U .S . participation in international orga-     this review is the effectiveness of the present executiv e
nizations have been directed to the developmental             branch organization and structure for management o f
assistance activities : to determining how the Depart-        L .S . interests in the institutions .
ment of State and other executive agencies dischar-, e
their responsibilities relative to the level, content, an d
formulation of programs and budgets supported b y             Agency fo r
U .S . contributions : and to the mana<,ement of ~' .S .      International Development
interests in these activities .
   U .S. efforts toward improved management of activi-           the Agenct for international Development admin-
ties of international organizations of which the Unite d      isters U .S . economic assistance programs under th e
States is a member must be undertaken and assessed            provisions of the Foreign Assistance Act of 1961, as
within the framework of the international character o f       amended, and other related legislation.
the organization . Constraints on actions that can b e           During. fiscal Near 1970, GAO conducted audit s
taken unilaterally are an inherent part of such mem-          anct special reviews pertaining to various program s
bership no matter hots constructive the propose d             and activities administered by the Agency . The fou r
actions ntight be . Notwithstanding these constrt .ints .     reports issued to the Congress related to the lendin g
GAO believes that there are opportunities for majo r          activitie, of the Agency, the policies covering the col-
improvement in the management of U .S . participatio n        lection of claims from the Government of Vietnam ,
                                                              and the administration of the excess property pro-
in the family of United Nations organizations so as t o
                                                              grams in Itema and Pakistan . Eleven reports were
improve the effectiveness of those organizations in con-
                                                              issued in response to requests from committees an d
tributing to the objectives of t e .. United Nations.
                                                              Members of Congress on various matters of their re-
   A 1967 amendment to the Inter-American Develop-            spective interests . and a numter of additional reports
utent Bank Act directed the Secretary of the Treasur     e    were sent to agency officials . The reports to agenc y
to propose the establishment of an independent ex-            officials generally related to improvements needed i n
ternal audit group for the Inter-American Develop-            the administration and ntanmgenhent of fnrei<?n assist-
ment Hank . Building upon a statement of audit guides         ance programs and to internal operating procedures.
and standards prepared b}` the Comptroller General ,          Sonar of these reports are discussed more full\ , through -
such a group was established in 19618 . From the csperi-      out this chapter .


   One report pointed out that AID had increase d              A report was issued on the questionable financin g
its outstanding economic assistance loans to foreig n       by AID of a private venture, under the investmen t
countries from $7 .4 billion at June 30, 1964, to $12 .6    guaranty program, on a project for the raising an d
billion at June 30, 1968, an increase of $5 .2 billion .    marketing of corn in Thailand . Throughout the lif e
 Although most of the increase was in dollar loans ,        of the project, AID bore almost all of the risk o f
$1 .3 billion of the increase was in foreign Currenc y      loss in the privately owned venture . GAO sug-
loans subject to possible changes due to variations i n
                                                            gested that, in all such cases, AID should require th e
exchange rates. There was a concentration of out -
                                                            owner who controls a project of this nature to assum e
standing loans at June 30, 1968—both dollar an d
                                                            a meaningful portion of the total risk involved sinc e
local currency loans—in the countries where signifi-
                                                            to do otherwise would not be conducive to good finan-
cant devaluations had taken place . During the 4 years      cial management . f .`See Appendix, Section f, Ite m
 prior to June 30 . 1968, devaluations caused AID to
                                                            84 . )
incur a reduction of $1 .1 billion in the equivalent dol-
                                                               A report on the followup review of activities unde r
lar value of local currencies disbursed or available to
                                                            contracts with the American Institute for Free Labor
be disbursed for loans . Seventy percent of all the out-
                                                            Development and the Agency for International De-
standing loan balances were owed by borrowers i n
                                                            velopment was also issued . Through contracts with
 14 countries whose reduced currency values had re-
                                                            AID, the American Institute for Free Labor has be -
sulted in 97 percent of the exchange rate reduction s
                                                            conic the principal instrument of the L .S . Govern-
in the dollar value of local currency loans during th e
                                                            ment for supplying technical assistance to Lati n
-1-year period . (See Appendix . Section I, Item 83 . )     American trade unions . In response to GAO recom-
   Another report stated that AID had not fully dis-        mendations, AID agreed that there %vas need fo r
charged its responsibility to file claims against th e      improvements in the Institute's financial managemen t
Government of Vietnam for all refunds clue the Unite d      procedures and planned to undertake a comprehensiv e
States in connector, with (1) irreffular transaction s      evahration of the Institute's performance . The Institut e
in the AID-financed commodity import program for            disa,,reed in general with GAO's conclusions an d
Vietnam and (2 ; misuse of project assistance. :\If)        recommendations ; however, it recognized the nee d
officials did not completely agree with GAO's rec-          for continued improvement and stated that these sug-
ommendations for improvement in processing thes e           gestions were useful in improving its management an d
claims, particularly . the establishment of an escro ,. y   effectiveness . {See Appendix, Section I, Item 85 . )
accohnt by the Government of Vietnam from whic h               One report to the Congr ess stated that about $8 .6
claims will be automatically collected . However . AI D     million of AID's economic development funds pro-
and the Government of Vietnam have taken certai n           vided to the Cmvernment of India had been used to
actions which should result in more effective utiliza-      fill orders from the Indian Ministry of Defense fo r
tion of AID-financed commodity assistance and in im-        components and parts i_e. . knockdown kits—for I-ton
proved policies and procedures for filing refund claims .   four-wheel-drive tracks, known as power wagons, arnl
GAO also suggested that the Congress might wis h            for other types of military trucks. AID's general policy ,
to consider whether further guidance should be give n       although not explicitly set down, was that economi c
to AID concerning the establishment of all escro w          assistance funds are not authorized to finance materia l
account, in view of the significant period of time tha t    directly for the account of or on behalf of the De-
has elapsed during which no effective action has bee n      fense Fstablishment . As a result of GAO recommen-
taken by AID . ;See Appendix, Section 1, Item 158 . 1       dations, AID made a thorough review of its guide -
   From a review of the administration and manage-          lines and their application and issued a policy deter-
ment of the excess property programs being conducte d       tnination fonna :izing guidelines an economic and mili-
in Kenya and Pakis'an GAO pointed up various im-            tary assistance . (See Appendix, Section I, I'em 86 . 1
proventecus needed . AID initiated instructions an d           Audit work underway at June 30, 1970, include d
guidelines designed to correct the problem areas . I n      surv eys and reviews of programs covering agriculture ,
GAO's opinion, the actions taken by AID represente d        education, civi'ian health, population and famil y
steps toward major improvements in the operation s          plannin ;, refugees and war casualties, capital assist-
of the programs . (See Appendix, Section I, Item 199 .1     ance projects, and technical service contracts .

t< 4
                                                                                   INTERNATIONAL OPERATIONL:

Defense International Activitie s
   Defense international activities involve the coopera-
tive efforts of the Department of Defense with foreig n
governments or activities of an international character.
Defense international activities include the militan -
assistance program, defense participa on in interna-
tional organizations, and other international activities
of the Department of Defense and the military
departments .
   During the year, four reports were submitted to th e
Congress on reviews of these activities . In addition ,
three reports Nyere issued in response to requests fro m
chairmen of congressional committees and incividua l
  Members of the Congress and three reports were isst,e d
to agency officials .                                        Briefing of foreign student, prier to start of do -i's fligh t
                                                                                     training .
   A report on a major weapon s%,tem provided to Fa r
East countries under the military assistance progra m
disclosed that the combat readiness condition of th e
system was being seriously impaired by inadequat e           vised its instructions on policy and criteria for pricing
supply and maintenance support . The Department o f          sales of training . Hosyever, the Department disagree d
Defense agreed that these findings were valid for th e       with the recommendation that retroactive charge s
period covered but that corrective action had bee n          should be attempted for costs omitted in the past, ex-
taken and the situation had improved . A followup re -       cept for hotuing" costs . (See Appendix, Section I, Ite m
view was performed and disclosed that, although som e        14I .
improvement had been made, a low level of readines s             A report on obtaining NATO cost sharing on mili-
continued primarily because of inadequate supply an d        tat,; construction projects in Europe revealed, that
maintenance support . in commenting on this report ,         although unprocements in the administration of U .S .
DOD stated that the supply and maintenance deficien-         participation in the program had been made sinc e
cies were being gradually corrected and that responsibi e    GAO's last report was issued to the Congress on thi s
officials were atyare that substantial improvements wer e    matter junr 1965 ;, there was a need for further im-
needed before full combat ready status could b e             provements . especially in the area of recouping cost s
achieved . (See Appendix, Section I, Item 159 . )            of projects initially financed by the United States . Th e
   Another report dealt with the omission of significan t    report stated that the U .S . Army in Europe, putpert-
costs from the sales price for military training service s   edh to maintain operational control, had followed a
sold to a foreign country. Prices established by th e        polio} of nut pursuing NATO cost sharing for certai n
United States to recover the cost of the pilot trainin g     facilities eligible under the program . The report also
provided to the Federal Republic of Getmany fo r             revealed delays in submission of :\.it, Force projects for
P–104G aircraft through December 1966 did not in-            cost sharing and delays in recouping costs of initiall y
clude all direct and indirect costs incurred in providin g   financed projects after inclusion in the NATO pro-
the trailing. These additional costs amounted to abou t      -ram . The Deparnment of Defense accepted thes e
$6 million . Also, the U .S . Air Force did not change       proposals and corrective action was initiated . (' See Ap-
Germany for rental of U .S .-owned aircraft and equip-       pendix, Section I, Item 80 . )
ment used in the trailing, nor (lid the Air Force collec t      In addition to reports to the Congress and the re -
for the Government housing furnished to the foreig n         ports to the committees or individual -Members o f
students . In line with GAO recommendations, th e            Congress mentioned above, a considerable number o f
Department of Defense conducted a study of pricing           congressional inquiries \%-ere received and handled . For
of foreign military sales in volving training and has re -   the most part the inquiries concerned U .S . activitie s


in Southeast Asia related to the Vietnam conflict an d          lations of the Universal Postal Convention an d
the payment of taxes to foreign governments .                   collecting aniounts due in foreign currency should b e
   At the close of the year, a report on the military as-       considered in collecting outstanding accounts . The De-
                                                                partments started action to inproye their collectio n
sirt training program for foreign nationals \va s
                                                                p rocedures but did not agree with the recommenda-
being completed . This proposed report which was re -
                                                                tions to assess interest on past due accotutts . Sall l
quested by the Senate Foreign Relations Committe e
                                                                progress had been ntacle by the end of the year . ,_See
will expand the scope of GAO's interim report on th e
                                                                Appendix, Section I . Item 87 . 4
same subject issued in December 1969, in response to a
                                                                     Reports vvCIC issued to the Congress on ill(' qudstiort-
congressional request . The proposed re port encorrr-
                                                                able justification and loose administration of the spe-
passes an intense review of the training of foreig n
                                                                cial cost-of-living allm%ance paid to certain civilia n
nationals in It) countries in various parts of the vvorkl .
                                                                cmployccs in the Republic of Vietnam and on U .S -
   Other reports on Defense international activities i n
                                                                support of the Philippine Civic. :A(tion Group in Viet-
process included :                                              nam . See Appendix, Section I . Items 185 and 88 .

    U .S . investment and participation in certai n                  :Another report to the Congress on proposals for inn -
  -North Atlantic Treaty Organizaticn programs .                 proving internal audit in the Department of Stat e
    U .S . civil administration of the Rvukvu Islands .          indicated it need for the Department to f I ) redirec t
                                                                 and expand the internal audit efrort, :;2't improve th e
    U .S . commitment to support international weap -
                                                                 stature and independence of the internal audit func-
  ons production prograin .
                                                                 tion . and t_3 ~ improve the planning and programmin g
                                                                 of audits . ' ] ' lie Department did not agree with the find-
Department of State an d                                         ings concerning the fundamental need to improve th e
                                                                 independence and stature of the internal audit runc-
Related Activitie s                                              tion nor the need for redirection of its effort . The basi c
                                                                 weaknesses arc continuing . and at the end of the yea r
   The Department of State is responsibie for establish-
                                                                 the Department had not indicated any intent to dea l
ing and implementing, the foreign police goals of th e
                                                                 with them . ; Scc appendix. Section 1 . Item 1 .53 .
United States includin, representation in relations an d
                                                                      :Audit work iu process included surreys of the roan-
negotiations with other countries and with the Unite d
                                                                 agement of .'_5     l . research efforts having a bearin, o n
-Nations and other international organizations .
                                                                 foreign affairs and foreign la l,'uage training activitie s
   GAO examined activities of the Department s
                                                                 of U .S_ agencies in 1Cashin ,gton and overseas .
Washington Office and its program management,
                                                                      A report to the Director of the Peace Corps pointe d
well as U.S. embassies and Special \fissions abroad ,
                                                                 out a number of specific accounting system and ntan-
and issued I I reports to the Congress . Seven of thes e
                                                                  :ugemeot Control inadequacies and problem areas whic h
were submitted to the Congress as a whole and fou r
                                                                  had been identifies] as needing attention in connectio n
were submitted to committees of the Congress rn re -
                                                                  mth the present system development efforts . (See _Ap-
views made at their request.
                                                                  pendix . Section I . Items 142 and 15-f . '
   One report pointed up the continuing delinqueuC}'
                                                                       Reports %,Cie submitted to the Director, Unite d
of international mail accounts owed the United State s
                                                                 States Infonnation agency, on reviews conducted a t
1w several forei-m countr ies ant] stated that no forma l
                                                                  C nited States Information Service t ; UMS? posts i n
interdepartmental understanding had Ocen reached be-
                                                                  India and Brazil . GM ) also continued to provide Con-
tween the Post Office Department and the Depart-
ment of State to provide an orderly and systemati c               sultative assistance to the Agency in its effo rts to
method for pursuing the collection of delinquent in-              turther improve its financial management system .
ternational mail accounts . 'I'he report recommended                   In tilt report on selected USIS activities in India ,
 that the State Department, under ntutualll af;recd                the need to improve certain practices followed in nego-
upon conditions, make every reasonable effort to col-             tiatil)9 ove vas contracts and the desirabifity of
 lect past clue Post Office accounts since it is in a bette r     devising en for Cvaluatint, the distribution o f
 position to take positive collection action against othe r       aLCnC}-sponsored hooks to USIS tar f,.et audiences were
 governments . The report also stated that assessing in-          pointd out . Also, GAO cluestioned the need for tlt c
 terest on past due accounts in accordance with letJl -           continued o~~rration of a lca~ed i~oice of ;America relay

 95                                                                                                                              1r
                                                                                  INTERNATIONAL OPERATION S

station in Ceylon clue to the marginal quality of th e        Bank of the ~ :nited States for fiscal year 1969 wa s
broadcast signal to India and the construction o' addi-       made and a report furnished to the Congress on th e
tional long range transtuittim -, facilities in Greece an d   results of the audit . A report was also issued to th e
                                                              Bank on GAO's examination of its statement of asset s
the Philippines . The Atgencs advised that action woul d
                                                              and liabilities .
be taken to correct the matters noted in the report :
                                                                   The financial statements, except for the Bank's treat-
hosawer, a final decision as to the future of the Ceylon
                                                              ment of sales of certificates of beneficial interest, pre-
relay station would be delayed until certain technica l       sented fairly the financial position of the Bank a t
and progranunio uncertainties could be resolved . (Se e       June 30, 1969 . However, the certificates of beneficia l
Appendix, Section I, Item 160 .                               interest sold -subject to contingent repurchase commit-
   During the year GAO continued its review o f               ments should be considered as borrowings or financin g
touchers and supporting documentation for the settle-         rather than sales of assets . The Bank is exploring ne w
ment of accountable officers of the Department o f            tra}'s of handling its loan assets which it hopes wil l
 State, as well as foil — ving through on both formal an d    satisfy GAO's opinion of ghat constitutes a sale rathe r
 informal exceptions taken in prior years in connectio n       than a borroscing .
 wit}r reviews of fiscal transactions at the Departmen t           GAO recomumnded that the Bank e%aluate the pro -
 of State, USIA, and the Peace Corps .                        66ons of its at reeme_rt tcith the Foreign Credit In-
    Audit work in process included a broad survey of          surance Asso :iation to provide for an equitabl e
 the management of U .S . research effort . having a bear-    distribution of earnings to the Bank from its insurance
 ing on foreign affairs .                                      program . The Bank is currently studying its agreemen t
                                                               frith the goal of obtaining a more meaningful distribu-
                                                               tion of income and expenses . (See Appendix, Sectio n
Export-Import Bon k                                            I . Item 113 . )
                                                                   At dune 30, 1970, an examination of the financia l
  Pursuant to the provisions of the Government Cor-            statements of _he Bank for fiscal scar 1970 was i n
poration Control Act, an audit of the Export-Import            process.


                                                                                                     TRANSPORTATIO N

                                                                 ti ( a I ransporrnti,)n "ercire for conmu e r, ial ocea n
                                                                 semccs . and pacloents tic ( ;w,ennnrrt olpmation s
                                                                 that arc audited on site .
                                                                       File Gocernntent also spend, seci•raf bihi( n dolla r
                                                                 annualh v for operation of miiitan transpoitat, in fleets ,
                                                                 for tnoccn—nt of ci%ilian vmplunee,' }tottscltotd s*odd s
                                                                 on a onnm trd basis- for teimbnrscment of transpor-
                                                                 tation ; charc'es ncurred be ct " t-t"pe contractors, anci
                                                                 f p m other indir ct transportation sec, ices. These ex-
                                                                 pendit urs are cotered in GM) react," of "ejecte d
                                                                 activities and prot~ranti of tine various a ;eneies .

                                                                 Audit of Transportatio n
                                                                 Payments and Settlemen t
                                                                 of Maim s

                                                                 l ransportation Payment s
                                                                     i'he' i ansportation .Art of I'l M i rquires th e admin-
                                                                 isu :aive alrencies to pat the hills of c>rriers subject t o
         Ihe± Conceal .Accounting Oflice is responsible fo r     the Inteistatc Conmw!i,r Art and the Federal Avia-
    determining the corrr_-dress of Aamn paid for hTigis         tion A" +tpon presentation prior to audit t the Gen-
    and passem er sett/ i( ° furnished for the account o f       er,t} -1<<nuntin ; Ofike . _llthott_=h pavinents to car-
    the United Mates . bit the mcmel of mci(harecs .             iiers not :obje•ct to thec acts nnav he audited prior v i
    and for the settlement of a anspo-tation Iaims bot h         pavmcnt . h administrative efliciencv all tiatnsporta-
    by and against tlho Gm ernnter,t .                           tion bill ; fnr services nrccured on standard Govern -
        As a further part of its basic audit and imestigativ ~   men , forms are noinna}hpaid hefore audit .
    fnni tions- GAO reviews, ew ahamm and reports m" b               Becmi– ceitikire-, and dishrmsin±, officers are ex -
    transportation and traffic nianagennent acticitie, o f       (nutted by lax, from liability for arc ovcrcharues b e
    Governnnent agencies and assists the agencies in per-        (Lucien, oisin fl hill the application of improper rate s
    formin- their transpertatitm and traffic functions .              rh :~      nn svi%iccs procuredl by standard Govern -
        In settling transportation claims, GM) furnishe s         MellL t .-ai :apmtation foirn , paid transportation bill s
    technical support and othm assistance to the Depar n         m rl-nAwd to G_lO by central pstaudA, deter-
    anent of Ju,ticv in the prcimmiorn m defense of trrtn .-
                                                                 ntircuinrt of mcrcllalgcs, „nd rcco ;-cr%- of merclialgc ,
    portation suits to Nchich tits United States i> a part ._
                                                                 dircc ti% iiom the carriers . 1 he principal aansporta -
        The scope of GAO's responsibilities for auditing anc i
                                                                  MM paMncnts that arc not wnt to f ; .-AO for postaudi t
     revictvb transportation in the Federal Gnwmmnen t
                                                                  me those u=ade by Gn-ernnwnt corponitions and thos e
     is indicated h~ the tua"hude of the Gmernn nt c"
     penditums fnr u-.nnspottaimm senices. Direct pmmm -         procured ;under contract- su,h as Post Office mai l
     "mul of clolrirnerrlal transportation amounts to abou t      rontrr is .anci \tilium sc•t Transportation srnic e
       E5 billrnn annually Approximately S 2A hillton of thin-       ipliinu r"nt mic p o<uardit of naaportatio n
     amount n Inc wi vims procured on ,tandard form, w d         char~te ; nminall, tontpleted 6 tt, ; nttrnths afte r
     is audited centialh be GAO on the basis a paid hiil n        P .tcm( lit .
     submitted be Goaelnnlent agencies . 0thor exp ndt-               GAO audited -0 1 olilhon hills of Lul : let for freigh t
     uurs for direct procurement of co ;ntncreia} transporta-     ,}ri}rrncrts . for wFic}, the Govcrnnn•nt Lad paid abou t
     tion i'oncva ptimatil', of t'ontlaet illcillch! _            ~'L) hi1lion, and 'i t- t,lllion 11,11),portatiolt requests
     the u_ue,poluitioli of mail pacnlcnt" o, tile Nwitmt         b I mi           i - alel . for %discii the Gacernmertt ha d


                                             BILLS OF LADING AND TRANSPORTATION REQUESTS EKALUNE D
                                                           DURING THE FISCAL YEAR 197 0
                                                                                  V'umbrr             amount       paid                                                  Amoun t

      Audit :
          Bills of Lading .                                                    5, 924, 530 51 . 441 . 132, 48 2                                  94 , 599              $16,382,91 7
          Transportation Requests	                                             3, 357, 532      933 .780, 966                                    13, 900                 1,325,407

                   Total . . . .                                              9, 282 . 062         2, 374, 913, 4-18                           108,499                 17, 708, 32 4

      paid about $ .9 billion . From the audit of transportatio n                     1921, provides that all claims and demands whateve r
      payments, GAO issued 108,499 overcharge notices t o                            by the Government of the United States or against i t
      commercial carriers requesting refunds totaling $17 . 7                        shalt be settled and adjusted in the General Account-
      million . Collections from carriers amounted to 516 . 3                        ing Office . Pursuant to this law transportation claim s
      million, which were credited to basic appropriation s                          against the United States, with certain minor excep-
      of the procuring agencies or, where this was not pos-                           tions, are submitted to the Office for adjudication . The
      sible, deposited in the Treasury as miscellaneous re-                          exceptions relate to claims for loss and damage, acces-
      ceipts . A sunuuary of this activity is sliotcn above .                        sorial or supplementary transportation services, and
          The amount of payments audited was about 7 per -
                                                                                     amounts due because of errors in extension or footin g
      cent less than the prior year, and the amount of over-
                                                                                     on prior bills. These latter claims after payment are
      char ;es detected and reported to carriers \vas about 9
                                                                                     subject to review in GAO's audit of paid vouchers .
      percent greater . This activity was accomplished with
      2 .4 percent less audit hours than \+ere utilized       th e      Oil
                                                                                         GAO received about 16,000 claims and settled o r
      transportation audit in fiscal year 1969 . A schedule                           othervrise disposed of 13,725 claims for approximatel y
      showing transportation audits and collections for fisca l                      514 .8 million . The greatest amount claimed was on as-
      years 1961— 70 is included as Exhibit 3 on page 135 .                          siuned bills of certain Military Airlift Command con -
         As part of the review of transportation payments ,                          tractors, xhich are audited before 1_ayment to protect
      GAO also identified hundreds of shipments \%here tir e
                                                                                     fully the Government ' s interest . On these assigned bill s
      transportation services were procured at the lega l
                                                                                     and other original unpaid bills for $10 .5 million, abou t
      rates but resulted in excess costs to the Governmen t
      which were not recoverable from the carriers . Thes e                          $13 .000 was disallowed as bein . in excess of the prope rQ~

      traffic management errors re q uited from the selectio n                       contract and or tariff rates . The balance of the claim s
      of uneconomical routes, modes of carriage, or types o f                        were supplemental bills of carrier for changes in thei r
      service_ and were brought to the attention of the re-                          original char'('s or demands for repayment of over -
      sponsible transportation officials of the agencies in-                         charges collected by GAO . In disposing of thes e
      volved for necessari, corrective action .                                      claims, amourxinc' to about S 1 ._I million . $2 .6 million
                                                                                     teas certified for payment and S1 .7 million seas disal-
      Claims                                                                         hor,ed   or terrtinxtetL A .umiiarc of this activity i s
         Section 305 of the Budget and Accouutin_, Act,                              shn' n helot . :

                                               TRANSP3iTAYIO CLAI'M 1tfCEIVED AND Sit "PLED DURING
                                                                 THE FISCAL YEAR 1970

                                                                                                                           ~uiE d
                             Ch—o(ciann .'                  on   h ::         Rr .ored       --           - -              ----           -	             -----               on hoa r
                                                                                                              rl            l n-W                   :11111th!           Ju ne SU, .'ti?J
                                                                                                   itn iin~               t'[r,im&t                  '11-ed
      Freight	               -       -           - -        r,, 859           1-, 277             1 2,501           =1 . .-',77, 46t             "? . 951, 823                 8, 63 5
      Passen£rer         _       -                 -.            G3')               Li              1 ."24          10. 1 M" Wit,                I o INS . -422                   H oO

             Total                              .. .        ti, 508           16, 262             1 3, 72 :}         1     76       352        1 1 :;,   053 . 24 1;           ). 04

                                                                                                TRANSPORTATIO N

  A schedule shoving transportation claims settle d          merits if direct air carriers are used, where less costly ,
during fiscal }'ears 1961–1970 is included as Exhibit 4      rather than air freight forwarders. In response to thes e
on page 135 .                                                proposals, Department of Defense officials agreed tha t
                                                             improvements could be made in the selection of ai r
                                                             catriers and that the transpnrtation expertise of the
`transportation Management Revievis                          single manager for transportation, should be used mor e
                                                             frequently and extensively . 'See Appendix, Section I ,
    The General Accounting Office continued to expan d       Item 217- 1
its audit efforts into domestic programs and to evaluate          Other repots, %which were substantially complete d
the Government's involvement in net% concepts i n            be the end of the fiscal year, concerned : J) action s
transportation . Where possible, GAO reviewed concur-        taken or planned to improve use of cargo space on air -
rently departmental activities that scere a part o f         craft operated tinder contract with the Department o f
broader activities invol ving more than one departmen t      Defense, f2i potential savings by centralized control
or agency .                                                  of overseas air passenger transportation, and (13 .) op-
    GAO increased its efforts in areas of expressed con-     portunity for savings by reducing paperwork in volve d
gressional interest Transportation is one of the mos t       ; it Department of Defense bus travel .
dynamic areas in the industrial field today and thi s             GAO anstcered specific requests front individua l
fact is reflected in the mane and varied requests fo r       ambers of the Congress concerning s'ariOnS transpor -
information and review ~cork received from Congress-         tation and traffic management activities . Primary in-
men . There is also a high degree of public interes t         terest was in the Department of Defense test invol v in g
in the field of transportation today as many of these        the feasibility of using Great Lakes ports for shippin g
congressional requests originat- , d with constituents .     military sponsored cargo to Europe . Several- Congress-
    By the end of the fiscal ~ear GAO had issued, o r        men representing East Coast and Midwest shippin g
had substantially completed, six reports to the Con-         areas requested that GAO evaluate the test progra m
gress on transportation and traffic management prob-         and its results .
lems. One report pointed out that the Department o f              Other matters of congressional interest reported o n
 Defense could realize economies of about 5700 .00 0          were :
annually by making optin tun use of the dry-cargo ca-
                                                                   Use of all taxi operators by the Arned Force s
 pacity of the Panama Canal Company ship SS Cmto-
                                                                Cour ier Service .
bal for transporting Gmernment cargo to the Canal
                                                                   Rental charges or: passenger rail cats.
Zone . The Department of Defense agreed and re -
                                                                   U so of 1Cas3rington area airports by Governmen t
quested military representatives in New Orleans to in -
                                                                travelers .
crease use of the SS Cristobal. However, the tnifitar
                                                                   Use of farm rooperatiyes by the Department o f
 continued to make only limited use of the ship. It teas
                                                                Defens, for hauling munitions .
several months later, and only after GAO had calle d
 a meeting to formulate a working agreement betwee n            GAO also issued reports to the heads of department s
 all parties concerned, that the military began to mak e     and a<_encies of the Pederai Govemment . The mor e
 optimum use of the cargo capacity of the SS Cristobal.      significant involyd :
 (See Appendix, Section I, Item 215 . 1                            Cse of Government-ot,rned refrigerated vessels i n
    In another report GAO showed that economies o f             tlu• North Atlantic .
 about $600,000 could be achieved by using unuse d                 Eliutination of dumping charges For coat shippe d
 space on direct military Lights for military mail shi p -
                                                                on military chartered vessels .
 ments from Okinawa to Southeast Asia . In response t o
                                                                   Savings by improving rail service at an Army am-
 GAO proposals, Department of Defense officials in -
                                                                ruunition plant .
 formed GAO that substantial amounts of mail were
 being carried on militate= aircraft from Okinawa t o           Significant transportation matters now being studied
 Vietnam and Thailand and that the circuitous routing        include : I ' worldwide movement of ammunition an d
 of mail via japan had been disconti n .Vd . _Sec _1p-       components, (21 shipping activities of civil agencies.
 pendix, Section 1, Item 216 . )                               31 traffic management in the Post Office Department,
     GAO also reported to the Congresa that savin 1-s of          containerized freight service, and ' ' 5' self-insur-
 almost 1 mill i on could be achieved on !uture air ship -   ance on %ovenuu°nt shipments .

   GAO continued to expand its transportation an d               interpretation and conclusions . Technical assistance
traffic management review staff to provide the capa-             in connection with the exceptions to the Commission-
bility to research new areas in transportation and t o           er's report and the decision of the court was furnishe d
formulate future work programs in meeting the de-                by GAO.
mands on its resources from the increased interest o f              Another activity of increasing importance in GAO ' s
the Congress in the field of transportation .                    audit and legal assistance work relates to the collec-
                                                                 tion of motor carrier overpayments . Overpa}anents
                                                                 arise as a result of the application by carriers of unjus t
Assistance in the Legal 'Fiel d                                  and unreasonable rates as defined by the Interstate
                                                                 Commerce Act . Reparations for such overpayments t o
   The General Accounting Office continued to provid e           motor carriers may be recovered only through suits
technical assistance to the Department of justice i n            filed in the U .S . District Courts. During the year GAO
the prosecution and defense of transportation suits by           identified and prepared reports on 37 motor over-
or against the united States and in proceedings before           payments invoh ing 114 shipments and claimed repara-
the Interstate Commerce Commission . As part of this             tions of $67 .549 . All of these cases were referred to
assistance, transportation specialists participated i n          the Department of Justice and GAO understands tha t
three pretrial conferences in the Court of Claims an d           as of June 30, 1970, the Department had filed suits o n
one trial before a Commissioner of the Court of Claims .          most of them . In addition, when advised of unjust an d
   Debts against carriers imolving 128 items in th e              out easonable rate situations, certain motor carriers vol-
total amount of $136,275 were reported _o the Depart-             untarily refunded overpayments on 99 shipments
ment of justice for collection . Similarly reported debt s        amountinrt to $104 985 .
covering 311 items in the total amount of $127,51 3
were settled by the collection of $26,722 through judg-
ments, compromises, or otherwise .                               Assistance in the `traffic an d
    GAO received from the Department of justice no-
                                                                 Transportation Fiel d
 tice of the filing of 131 suits by carriers coverings 167 . -
328 shipments. One hundred and thirteen of the suit s              GAO assisted various Government agencies in thei r
filed and about 165,794 of the shipments were on over-           traffic management and transportation activities . Thi s
se ,is movements of household goods by the Departmen t           assistance included :
of Defense . The amount sued for is not stated in th e
petitions filed in those suits but the liability of th e               Working with the Military Traffic Management
 United States on the 420 suits filed in this and prio r            and Terminal Service (MTMTS) to develop a re-
 years is estimated to be about $100 million, if the car-           vised Tender of Service as an appendix to thei r
 riers prevail on all of the issues not already decided . It;       Personal Property Management Regulation cover-
 the same period GAO furnished technical advice an d                in g the transportation of employees' movements o f
 other assistance to the Department of justice in 33 suit s         household goods in Government bill of ladin g
 for $704,000 involving 1,817 shipments . Twenty-on e               service .
 suits, the subject of reports in this o : prior years, in-             - irnishing recommendations to the Militat e
 volving 691 shipments and $607,134 were settled b y                Traffic Management and Terminal Service regard-
 payment of judgtu:' for $274,637 and by dismissa l                 it,g the terms of a proposed tender for shipment s
 or withdrawal of th, jalance .                                     of unaccompanied baggage in through Governmen t
     One of the five representative cases selected for tria l       bill of lading service .
 of the issues in the 420 household goods suits . Tran s                Furnishing the Department of the Navy certai n
 Ocean Fan Service v . Cnited States, Ct . C1 . No . 137 -
                                                                    recommend at ions for modification of the Naval Sop-
 66, was decided May 15, 1970 . At that time the cour t
                                                                    py S}stenls Command regulations to reflect the cor-
 dismissed eight of the issues posed by the car rier . Pre-
                                                                    rect tariff provisions to insure the future applicatio n
 viously the carrier had withdrawn certain issues as th e
                                                                    of lower a%ailable export rates on shipments when -
 result of pretrial conference . Decisions for the carrier
 were entered in connection with six issues . GAO ha s              ever actually exported .
 p'oposed that the Department of justice request a re -                 Supplying the Internal Revenue Service with a
 hearing on two of these issues regarding the cout s                statement vyith reference to fact situations presente d

                                                                                              TRANSPORTATIO N

by test claims of the Penn Central in its tax refun d        GAO continued to meet with representatives of in-
claim .                                                   dividual carriers or members of their nade associa-
   Meeting with the Atomic Energy Commissio n             tions to discuss and resolve mutual problems relatin g
(AEC) and MTMTS to discuss charges applicable             to the audit of car riers bills . During the `ear. GA O
to shipments of radioactive material removed from         participated in five meetings with various domesti c
atomic powered ships and transported in lead cask s       and international carrier associations and had numer-
or in special Government-owned cars whose con-            ous discussions in Washington with carrier and carrie r
struction incorporates shielding equipment equiva-        association representatives .
lent to that of the casks.                                   Under the Joint Financial Management Lnpi-me-
   Joining with the Military Traffic Managemen t          ment Program .. GAO continued to participate in a
and Terminal Serv ice in obtaining a Section 2 2          joint agency stud, of freight and passenger transpor-
Quotation, offering all-rail rates effective Apri l       tation in the civil agencies . The stud\ is under th e
 1970, on movements of combat ready vehicles withi n      chairmanship of the General Services Administratio n
CONUS, based on agreed minimtun weights whic h            with full-time staff members assigned from the Genera l
include added equipment and ammunition .                  Accounting Office, the General Services Administra-
   Furnishing passenger fares and other transporta-       tion, the Bureau of the Budget . the Treasury De-
tion data to the Department of Labor for prepara-         partment, and the Departments of Commerce, Agri -
tion of the monthly consumer price index .                culture, and Health . Education, and Welfare . Th e
   Providing guest lecturers at the U .S . Arm), Trans-   studv group has now completed a review of the cur -
portation School, Port Eustis, Va ., and a speake r
                                                          rent ststems of the civil agencies for pacing*, auditing .
and panel member at the Passenger Traffic Man-
                                                          and settling with the carriers for transportation se rvice s
agement Conference conducted by the Genera l
                                                          and has suggested impro~ ements or needed changes fo r
Serv ices Administration in Washington, D .C .
   Considering and acting upon various request s           the mutual benefit of the carriers and the Go%errunent .
 from the administrative agencies for permission t o      The report outlinin g, the conclusions and recommenda -
 deviate from established procedures to provide mor e     tious of the stud) group g ill be released to the publi c
 economical and efficient traffic management .            early in fiscal year 1971 .



      F   ~              j       ,,    ~                 ~ '

                                               ~~~       ~       i

              . ~   '~       _

                                                         ,       ,

                                                             i   !
                                      _,   _         -
                                                                                                                     CLAIM S
                                                                 payment by GAO (31 U .S .C . 132) ; claims for under -
                                                                 payment of wages under the Davis-Bacon act (4 0
                                                                 U .S .C . 276a-2) and the Contract Work Hours Stand-
                                                                 ards Act (40 U .S .C . 330) are for certification by GAO ;
                                                                 and, with few exceptions, judgments against the United
                                                                 States are paid pursuant to settlements of GAO . Also,
                                                                 payments in excess of $2,500 under the Federal Tor t
                                                                 Claims act (28 U .S .C . 2672) are made pursuant t o
                                                                 settlements of GAO . All of these functions are per -
                                                                 formed in the Claims Division .

                                                                 Claims Against the United States
                                                                    As a general rule the Government departments an d
                                                                 agencies pay most of their obligations in the norma l
                                                                 course of business . Claims against the United State s
                                                                 that are referred to the General Accounting Office for
                                                                 settlement are usually limited to those required b y
                                                                 statute to be paid on settlement of this Office and thos e
                                                                 involving doubtful questions of lase or fact as to the
                                                                 validity of the claim . the amount of the claim, or the
Genera l                                                         entitlement of the persons claiming .
                                                                     Claims coming before the Division may arise fro m
   The Claims Division is responsible for the adjudica-          virtually any transaction of the Government and ar e
tion and settlement of all claims by and against th e             received from individuals, business entities, and foreign ,
United States that are cognizable by the General Ac -             State, or municipal governments . For convenience, th e
counting Office with the exception of claims by an d             claimants are classified as live civilian employees, de -
against common carriers for transportation items- whic h          ceased civilian employees, live military personnel, de -
are processed by the Transportation Division . Legal au -         ceased military personnel, and other public creditors —
thority for this function is contained in section 305 o f         live and deceased . The subject matter of the : ariou s
the Budget and accounting act, 1921, which provide s              categories of claims is classified as compensation, pa y
that all claims and demands whatever by the Govern-               and alloscances, travel,. per client, transportation, judg-
ment of the United States or against it shall be settle d         ments, acts of Congress, contracts, trust funds, refunds ,
and adjusted in the General Accounting Office . Sectio n          and miscellaneous . The processing of such claims in-
304 (31 U .S .C . 93) of that act provides also that th e         clucles an examination and analysis, development whe n
General Accounting Office shall superintend the re-               necessary, adjudication, and certification for payment ,
covery of all debts finally certified by it to be due th e        or disallowance .
United States . This function too has been delegate d                The full,__tion performed by the Claims Division in
 to the Claims Division .                                         settlings claims against the United States clearly is on e
    While these provisions appear to be all inclusive .           that not onh• is beneficial to the individual claimant s
 Congress has enacted various laws authorizing_- desig-           involved, but also is in the best interest of the Unite d
 nated Government agencies to settle specific classes o f          States . : t is beneficial to individual claimants in that i t
 claims arising under programs administered exclusivel} '          affords them the opportunity to receive a full, fair, an d
 by such agencies . On the other hand, specific statute s          impartial re%iesw of administrative action in disallowin g
 have been enacted which provide that payment ma y                 their claim_ at little or no expense to them . It is, in th e
 be made only upon settlement of the General ~icrount -            interest of the Government in that it reduces sinhifi-
 ing Office . For example, claims for the proceeds o f             canth the number of claims that otherwise would be
 depositary checks which have not been paid prior t o              the subject of formal legal p:oeeediri!s ins'_ituted b y
 the close of the fiscal year next foltoswin3 the fiscal yea r     claimants scith the attendant expense, delays, and over -
 in which the checks were issued must be certifed for              crowding of court dockets . Sinnilarl, GAO's claim set-

dement action is beneficial to the United States in tha t        partment of justice for suit, whenever warranted b}
it reduces significantly the number of requests that oth-        the debtor's financial circumstances . In such cases, a
erwise ~could be made upon the Congress or individua l           certification of the amount due the United States i s
 Members thereof for the enactment of privat e                   transmitted to the Department of justice together wit h
legislation .                                                    all information and documCSts as may be necessar y
   On July 1, 1969, GAO had on hand 1,737 claim s                to support court proceedings .
against the United States . During the fiscal near, 14,606           On Jul 1, 1969, GAO had on hand 19 .141 claim s
claims were received and 14,943 settled, leaving a case -        by the United States . During the fiscal year 21 .97 9
 load on hand of 1,400 on June 30, 1910 . Incident to th e       claims were received and 13,201 settled, leaving a
settlement of the 14,943 claims, GAO certified th e              balance of 27 .919 on hand June 30, 1970 . Of the 27 .91 9
 amount of $55,909,237 for payment .                             claims on hand, 8,182 were under collection represent-
                                                                 ing accounts receivable in the amount of $4,782,933 .
                                                                 As a result of GAO's debt adjudication and collectio n
Claims by the United State s                                     activities during the fiscal year $2 ;626,961 was col-
                                                                 lected . During that period GAO reported 1,274 claim s
   Claims by the United States are referred to the Gen-           to the Department of justice for suit and as of June 30 ,
era : Accounting Office for adjudication when they in-            1970, 5,266 of the claims pending with that Depart-
-olve administrative doubt as to the amount or p ro-             ment there under collection, representing accounts re-
prety of the debt or the liability of the parties to th e         ceivable in the total amount of $1,612 3 546 .
transaction . The subject matter of these debt claims is             Incident to the Claims Division's collection activi-
as varied as that of claims against the United States .           ties 11,614 offers in compromise were solicited t o
Moreover_ the regulations promulgated jointly by th e             which 2,+70 replies were received . Included in such
_Attorney General and the Comptroller General pur-                rcplics were 883 offers in compromise totaling $385, -
suant to :he Federal Claims Collection Act of 1966 . 3 1          708 . Of the total number of offers in compromise re-
U .S .C:. 952, require that a~bts clue the United State s         ceived, 235 in the aggregate amount of $116,503 wer e
on which administrative agencies have taken appro-                accepted in liquidation of debts totaling $275,475 .
priate collection action, but which cannot be compro-                 p ublic Taw 90-616, approved October 21, 1968 .
mised or on which collection action cannot be sus-                   U .S .C . 5584, provides that the Comptroller Genera l
pended or terminated in accordance with such join t               and the ) ,.-ad of each executive agency may waiv e
regulations, be reported to the Claims Division as ad-            the claim of the United States arising out of an erro-
minist ratively uncollectible debts .                             neous payment of pav, covering a period occurring
    Following the referral of a debt for collection .             on or after Jul ; 1 . 1960, made to an entplo%cc of an
GAO's actions include efforts to locate debtors whe n             executive ,gene% when collection would be agains t
their whereabouts are unknown, the issuance of de-                equity and eood conscience and not in the best in-
mands for payment, development to ascertain the fi-                terest of the United States . That law, however, vests
 nancial status of the debtors, and the issuance of proofs        eACIiPS,iN e jurisdiction in the Comptroller General t o
of claim in bankrupt%% and deceased debtor cases . I f            waive m erpayrncnts of pav aggreeatm more tha n
 development of a claim discloses that a debtor is pres-          5500, and the statutory regulations issued pursuant
ently receiving payments Dorn the Government . GA O                thereto require waiver detenninations to be made onl y
 takes steps to haze amorlots withheld, if otherwise              by the Camptroller General then there exists doub t
 proper, for application to his debt . In the v\ put a debto r     as to the propriety of waiver. The responsibility of th e
 is financially unable to retuit the full amount crl hi s          Comptrolle r General to waive erroneous payments has
 debt in one pa~nent . lie is permitted to make install-           been delegated to the Clams Division .
 ment payments commensurate with the amount of th e                   Before qm anting a wait r under this authority i t
 debt and his ability to pay . A debtor who meets th e             must be determined, follo%ying an appropriate aslmin-
 standards established pursuant to the Federal Claim s             istrativr' investigation, that the erroneous payment oc-
 Collection Act of 1966 ma% be permittcci to liyuidat c            cuned throue?h administrative error and there is n o
 his indebtedness by compromise . If collection action b y         indication if fraud . misrepresentation . fault, or lack o f
 the Claims Division is unsuccessful and the indehtcd-             good faith on the pat : of the employee or rice r
 ness appears to he provable, it is reported to the Dr-            pecan hayut~~ an iutere"t in obtainine a waiver =.,i the
                                                                                                            CLAIM S

claim . A complete record of the action taken on an          to terminate or suspend collection action when i t
application for waiver is required to be maintaine d         appears that no person liable on the claim has th e
by the agency involved .                                     financial ability, present or prospective, to pay any
   During the fiscal year, 428 requests for waiver o f       significant amount on the claim, or when the cost o f
erroneous payments of pay totaling $353,937 were con-        collection is likely to exceed the amount of recovery .
sidered . Of these, 267 in the amount of $213,447 wer e          Recognizing the need to monitor agency activitie s
waived in full . Partial waiver of $15,310 was grante d      and operations in the areas of ( I ) payment and debt
in 29 requests and $6,877 was denied . The remaining         claims adjudication, 21 debt collection, includin g
132 requests for waiver in the amount of $118,30 3           compromises and termination of collection actions, an d
were denied .                                                   3 waiver of pay ; and for the purpose of renderin g
                                                             assistance to agencies in the establishment of mor e
                                                             effective and efficient operations in such areas, ther e
Agency Review and Assistanc e                                is being established a new branch in the Claims Divi-
                                                             sion which is to be known as the Agency Review an d
  While each agency has primary responsibility fo r          Assistance Branch . The primary functions of thi s
the payment of obligations incurred during the cours e       branch will be to ( I ) review agency regulations, pro-
of its operations, the payment authority is limited by       cedures, staffing, and actual operations relating to
applicable statutes, statutory regulations, and avail -      payment and debt claims adjudication, debt collection ,
ability of appropriations .                                  and waiver of pay, to insure the compliance with all
   Also, under the Federal Claims Collection Act o f         controlling statutes and statutory regulations, (2 )
1966 the head of an a g ency has primary responsibility      snake recommendations and render other assistance
for the collection of debts due the united States arisin g   in establishing or improving the efficiency and effec-
during the course of operations of his agency . Unde r       tiveness of agency procedu res and operations, and
certain conditions an agency head is authorized t o           . 31 make reports to agency heads and the Congres s
compromise debts for less than the full amount due and       as appropriate .


                                                                                                          `~   'a
                                                                                                                             - S_                             GA Suggest s
          A.L   I3 I'1?'~T A POWER                                                                                                                   Convenience Terrina' i
              AUTHORIZATION Ol' SIT]W                                    A                                                 J               N
                                                                                                                                                 tnstec d Of Ou t right Contr t
                      POWI; R                                              Milt'UEnu;rl V  Cr i17 1                   ( ~~
                601 . To
                      to assist in_~ IIT.\, l                      Offtt °    011t             =               f?e/~ t O s               f~il 's ~ fleaf i
                                                                ~               6141 . l zq                                     '~ billy
            ~ is 11111 et iolls, the Comptroller General maA La w g i                                                         un I .t I'o`
                                                                      p xblic           13 R_ 47                                                      i It
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                                                                                                                            to,t=r /j c~ ~• f I11/i/ i .
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                                                                glst G°n~' er 6> 1969
            ~~                  subpe las                    ii        Npvernb                                           f,                                                                  n_

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                                             1190                                                                                    VIA  Municipal                     IN
                                                                                                                                                                         0 %i/eral Goveri
                                                4$                               t                   Prior to Resolution
                                                                                                                                                                                   ervices t
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          ,n1racts®Specifications- r ~j,~•~ Q '~ 7 ~j4                                                                                                     '
          iulti-}=ear Procurements                            ~u      0    >\ ~~                                                                                           and GH~ONMAnG k
          Drocedtiral lleviations                                    4 Cr,                     1                                                           eti,         BpGII               C
                                                                           U~,'x., ~Cf+-             cn                                                    ~                 k E1~;    pj ai t
          ice fact that an invitation for bids oa the f r t,tar nud malti6 T             _~ % ~                                                                              U           C~kTt~ N
          a• multiplre equipment used rr t it, mnpin•at d , - mt r         n, ~i•             ~+~+ }    ,:                                            ~~            C                             GP
          n' umfomm unit prie,•c fm, each ,cat of (-h, multi„tt r-                ~("                                                           'N                      ST VZ,   p   k              ~n `

          attarn criteria for c•om orison of htu-year a rsus mu t tr : e~~~     ~'                                                              ~'                                                 ~
          rt ,rol .rte Paragraph 7 ^22 of th_~ Arnnd terra . 'JIs,           s Fa y       '                                         ^~     '~                                                     t 5 ~k
          TITLE V11- .                                                `tsG,~                                                                                                         ~0
                    AND SETTLE ATIENT~~_,-
                           ENr0RCEINfI,N 'I
          'sCA,'Si7EI,i. I~AP,OIi.ATOI{i ;3'S, ENC .,
                           Appellant,                          \              \\t       r                                                 ~~                   ~r
            to Ti. ~H~FI I'TA, Administrator (Act clrr ts Qttc
                                                                    , 1                                                         k 14
            ng) of The Federal Aviation Admin .        t'tri/tol, t1 IcV.terc               y .r3tom,
                            Istration, et al .            t   cc1       to -O                                          > i  ~                    Tri o
                                                        ct etj                            t,t
                               No . 22863 .                       gtttres . ( tttl,t cat ttt                   (``~
                                                                                                                              1          `al ;~i
                t                                 art~trrJtPfil, CPOtu1t to
                United States Court of ' ppeaals,     I fir, ( let                IttrtO/JE,t, G'erirretlotr                       ~1`                 <
                                                                            1irr,        e tjIe tic,.
                  District of Colur"      cuit .                        ettt Ok                        j tit .      I
                      Argue,' Ca                            FKt j trt1'OS S Of the t.                 e if tlj rc                          vs
                     Iv                    ri     `                                        ` tt 77n t' 01 ., e                                    o
                                                  CO3IPTROLLER GENERAL OF THE UNITED STATE S
                           '.        P                                                                  .r :'t         W   B-16790   3
                                                     cr                    Elmer R. Stoats                     es '                    _
                                                                                                                      rPersonnel—Dislocation iAl o ram
                                        r`N         AI SISTnrtr-160AHITROLLER GENERAL of Tna: anrreo STATES More Than On(- Move in Fiscal ~ i

                                      r                                                       Robert F. Feller              ii r     (1     1t t''t
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                   ~J                                  ~rJ                                         l;7   r •-t -Or t, r .(', r
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                                         g9                                                                                       1,~~ nr 'rl t, 1i r                         trt 'lel'tttc't
                                                                                                                                                                                          t F; Ott',tl C
                            °          -q 3~                  _- 'DEPUTY GENERAL CaUNSF_`L (-)t. ~tltto t r,~.                                                                                       the
                                                                                                                                ts ;r~,.. r r rh t'rrjj ttrttrr . <
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           AALL BUSINESS :                        cEV                                                            ro                                                                   t.
                              .~-~'           ~'8       ~It9t             q Man T . I3u a 1'rrrt ttltt, .) a cs r t t                4(hc                         tr` rc_r 7- ~
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                                                                                                               Ijc, tl 1 l,r,lr p L, t c 1 , r
            R ;`VIEW D% El~MI-         F
                                                     rt 1~~
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           NACIT'Y AND PERSv                                      <                                                    '°      Ot
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       E RANCE                                                               rtr ,1 IJt y t i.I,~ e, rr . tt .r t t,lr, j ,-.~t                                               7t•j       P l° t          F
       ~.~                                 `'x 7=,_ ~!it                    nt; ~            rtrt.=~ .               .                      i4 ems._ , ;__                         t   • t.'     he              rf
                                                                                                       LEGAL SERVICE S

                                                               Helier to Paul G . Dernblinu. Upon the succession of
                                                               Mr . Keller to Assistant Comptroller General of th e
                                                               L l[ited States . the Corn pt roller General selecte d
                                                               Paul ( ; . 1 iemljhn,, a career ( ;overnment attorncv the n
                                                               yen-in, as Deputy Associate Administatm of the Na-
                                                               tional ;Aeronautics uid Space Administation, to b e
                                                               ( ieneial Couns i . Mr. Demblinc took the oath as Gen-
                                                               eral Counsel on November 17 . 1 06'j . bet ominC-, the fift h
                                                               head of the OPicr since its estahiishment in 1921 . A s
                                                               General Counsel, Mr . Dembling took chai;ge of a staff'
                                                               of some I04 attoi nets and 93 support service personnel .
                                                                  :about the same tiros , the retirements of Ralph L .
                                                               Ramses, Associate Gene,ai Counsel in charge of th e
                                                               iniscellan : ous and civilian personnel areas, and o f
                                                               john 11 . Coffey . Assistant General Counsel, left thes e
                                                               important posts vacant . vIr . Dembling chose experi-
                                                               enced career memhers of the staff to fill these positions .
                                                               He desimlated P . Henry Barclay, as Associate Genera l
                                                               Counsel in char-'e of the [miscellaneous and civilia n
LEGAL SERVICE S                                                personnel areas : Milton Socolar, who had been Specia l
                                                               Assistant to the ( ;eneral Counsel, as Assistant Genera l
   A res iv%% of [he tvoi k v[Torts of the Office of th e      Counsel in charge of the civilian personnel area : an d
General Counsel dtrring the fiscal year 1970 is a              John W, Moore, ,Nho had been a Deputl Assistan t
kaleidoscopic view of the concerns of the tithes . Lega l      General Counsel, as Assistant General Counsel i n
subje(t ; ranged from air pollution control to e!irn e         chaiee of the miscellaneous area .
cont rol, front entitlements of civilian employees dur-           As other actiyiries of the General Accounting Offic e
int; riot duty v,itli -National Guard outfits if) the pro-     vet ieiced the past decades, assessed their curren t
priety of Gmermuent equipment loans for the movi e             nii,sion, and projected their responsibilities it) the con -
"Tora! 'Fora! 'fort" , and Iron the legalil, of the            test of the 1970's, so, too, did the Office of the Genera l
Pniladelphia affirmative action plan to the auihoiit }         Counsel .'I'his report tyill reflect some of the legal area s
to par a steamship line for the return of destitut e           of cony ern incident to GAO's statutory responsibilities.
seamen . This brief recitation of a feNN subjects b y              The lc«al work of die Office of the General Counse l
no means reflects the c-xtensiveness of the legal assist-      is handled in fis e subject areas . namely :
ance furnished in the form of formal decisions, com-                Civilian Personnel .
tlents on proposed legislation, office metrnorandu m                Cornract ~
opinions to the operating dk isions, audit report I'-               Military Pay and AllmNances .
views, and informal assi tance furnished daik hr th e               Appropriations and '\-fist ellaneous .
staff.                                                              - Transportation .
   The measurable productive efforts in fiscal yea r
1970 increased to some extent over that of the pre -           Within these broad eate_ories the lyork includes de-
ceding year. The statistical details of the legal work          isions in%ok in,, all fields of lacy and requirin _S4 expertise
have been arranged in two different formats : one re-          ill statutory construction, contact interpretation, pro-
flectinl ; the ty[;e of output on a case basis (see pag e      ccdure, and evidence . All areas prepared reports o n
 116, and on( , wllectirg the output on a functiona l          legislat i on and on liti,ation, represented the Office a t
basis i see pale 11 5                                          hcarin,, and assisted in the preparation of cases in
                                                               the courts and before regulatory commissions .
                                                                   While it is not possible to resiete all the major lega l
Adminis t ratio n                                                if'orts of cat I, group, a few significant decisions ple-
  During Ii :cal year 1 0 70, the administration of th e       pared it', each area ,rill serve to show the e*_tent o f
Office of the C ;ener .d C :oursel chap ca iron : Robert F .   assistance rendered !;\' the Office in if usual year.



    Civilian Personnel                                               questions for resolution concerning leave and pay en-
                                                                     titlements when civilian employees are called to activ e
      A Government official testifying recently before a             duty as military reservists or as members of federalized
    congressional committee stated that the rulings of th e          National Guard units in connection with control o f
    Comptroller General together with Executive order s              civil disorders . This decision was issued on October 14 ,
    and regulations "add measurably to the body of ground            1969 .''
    rules that govern the employment conditions of Federa l
    employees" Hearim- before the Subcommittee o n
    Postal Operatiors of the House Committee on Pos t                Contract s
    Office and Civil Service . p . 102i . Decisions in th e
                                                                        Several significan- events in fiscal year 1970 wil l
    civilian personnel area rendered in 1970 tchich lai d
    clown such _round rules included a determination a s             undoubtedly be refi—Led in the Government procure-
    to the time payroll allotments for union dues mar b e            ment process for some time to come. These event s
                                                                     include the enactment of the law establishing a Gov-
    discontinued,' the proper computation of pay an d
    hours of duty for ellrployces required to cross the inter -      ernment Procurement Commission with the Comptrol-
                                                                     ler General as the statutory member," the opinion o f
    national dateline on official travel in performance o f
                                                                     the D .C . Court of Appeals in Scan,ccll Laboratories ,
    tenporary duty, s the overtime entitlements of a teare r
    of wage board employees Mic, were required to travel             Inc r . Thomas," and the District Court action in
    over a weekend to pe'foral emergency repairs to gu n             A . G . Sthoonmakei Co ., Inc . r .        REsoi, el    al . "

    port shields on a vessel,' and tyhether substitute postal
    employees may he granted court leave for             chrtv . '
                                                     jrlS'           Government Procurement Commissio n
       One of the significant civil pay decisions issue d
                                                                        Even before the Procurement Commission had bee n
    determined the right of an employee to retain transfe r
                                                                     completcly selected, the Comptroller General desig-
    travel and transportation advances upon resignatio n
                                                                     nated the General Counsel to handle legal matters
    prior to completion of a 12-month scryice agreemen t
                                                                     1,ith the Commission . The Office staff has had fre-
    when the agency failed to advise the employee at th e
                                                                     quent n3ectings aith Commission staff and assisted i n
    time of transfer of a pending investigation of his allege d
                                                                     the preparation of necessan backup material for th e
    misconduct .'
                                                                     suggested areas forsatdy -
       A civil pay decision that resolved a sharp differenc e
    of opinion between two Government agencies was on e
    concerning the use of trage data obtained outside a              Scanv:el l
    locality for which a survev is made in fixing wage
                                                                        In the Scrnct'rll decision the Court of Appeals fo r
    schedules for prevailing rate employees in the locality . '
                                                                     the District of Columbia Circuit ruled that an unsuc-
    The propriety of shifting the cost of services performe d
                                                                     cecsful bidder had a standing to stw in the courts . I-Iere -
    by meat and poultry inspectors on an administrativel y
                                                                     tofore unsuccessful bidder on Federal procuremen t
    declared holiday from the Department of Agricultur e
                                                                     had no such standing to sue .
    to the firrus that received the benefit of the service s
                                                                        The Sc anu cll case involved an invitation for bid
    was dete rmined in a decision to the Secretary of Agri -
                                                                     issued by the Federal Aviation Administration for navi-
    culture .- The meth— of conrputiing the pay and retire-          gational aid equipment for installation at airports .

    ment annuity deductions for reemployed annuitant s               Scanwell, the second lour bidder, protested that Air -
    tvho are hired as experts or consultants on a hen-       vN
                                                                     borne Instiurnents Labort:tory, a division of Cutler-
    actually-employed basis without a regular fixed wor k            H .unmei, the low bidder, did rot meet the certificatio n
    schedule was the subjec t of another eiril pal decision . '      requirements . Sincc there teas urgent need for the
       The Civil Service Commmission presented a series o f          equipment, a contract was awaided on Febivary 19 ,
                                                                     1969 . On March 3, 1969, Scanwell filed complaint i n
      ' 49 comp . Gen . 97 ,
      = 49 Coma . Gen . 29 .                                         the District Court to enjoin the contractor and FA A
        49 Comp . Cara . 209 .
      ` 49 Camp . Gen . '-'17 ,                                         ° .19 Comp . Gin . 23 :1.
        11-16h676,  Star . 20, 19,11 .                                  1" Pnhire Lace 01-1"!i al .praerd Nov 26 . 1969, F:3 Ntst 269 .
        33-tfi4315, ,iune 2 .,, , :i7u ,                                ' : Su_ _!. 503- D .0 Ck' . . Fete. 1    1970 .
        49 Cot     Gen .     Gov .                                                                                                    Distric t
                                                                          ' Cicl3 Ae!l,,,. No 17110-711 . 1 ` .F_ D11t1wt C'uurt Cot- 0 .,-
      ~ n-I67E}70, tiept . e-}1!iti!) .                              of Colunrlda .


                                                                                                                                  LEGAL SERVICE S

     from proceeding. Meantime, on March 17, 1969, th e                                   ness associations, a statistical suinnimy of the numbe r
     Fairfax County Wirginial Chamber of Commerce, an                                     of bid protest decisions rendered in fiscal year 197 0
     interested party, protested the procurement to GAO .                                 by department and agency follows .
     On March 24, 1969, the District Court dismissed th e                                 NUMBER OF DECISIONS RENDERED DURING FISCA L
     suit on grounds of lack of standing and Scannel l                                             YEAR 1970 ON BID PROTESTS
     appealed .                                                                                                       r< ttr,~Er,r               T.ta/
        On July 3, 1969, GAO upheld the validity of th e                                  A.Gene% for     International Development . .            10
     award on the basis that, although the certification re-                              Agriculture . .                                          13

     quirement was unclear as to whether it went to th e                                  Air Force .                                              96
                                                                                          Armv . -                                               -12 7
     responsiveness of the bid or bidder responsibility, it                               Civil Service C :on :mission	                              I
     contract had been awarded and no bidders had bee n                                   Commerce .                                                 7
     prejudiced by lack of clarity . Hence, the administra-                               ]Defense . . . .                          -                2
     tive determination was riot overturned . 1 " Eleve n                                 Defense Supply A     gency                               ti t
     months after the complaint had been filed, the Appel -                               District of Cohimbia Go—riuncnt . . . .                   -1
                                                                                          General Services Administration	                         62
     late Court decided that the bidder had a right to site                               Government Printing Office . . . .              --        I
     and remanded the case to the District Court for con -                                 Health- Education . and Welfare_                          q

     sideration on the merits . By the end of the fiscal nea r                            Housing and Urban Development .                            5
     the outcome of the case had not been determined . The                                 Interior	                                               10
                                                                                          justice . . .                                             2
     General Counsel and staff ,vere actively assisting th e
                                                                                           Labor	                                            -       1
     Department of justice in the preparation of defenses t o                              Marine Corns . . .                         -              :i
     the case . Such considerations as time, nature of relief .                            National Aeronautics and Space Administration .         1 5

     and agency discretion are all matters for resolutio n                                 National Capital Housing \uthority .                      I
                                                                                           Navy	                                                  12 7
     incident to this case .
                                                                                           Office of Economic Opportunity	                          2
                                                                                           Post Office Department .              ..                 6
     Sehoonmake r                                                                          Snail Business Administration . .                         1
                                                                                           Tennessee Valley Authorit v
        Another court action that affects the Governmen t                                  Transportation	                              -           i2
     procurement process and the jurisdiction of this Offic e                              Treasury . . -
                                                                                           United States Information Agency .                        2
     involved the issuance of a temporary injunction on                                    Veterans _ldtninistralion . . .                           b
     June 26, 1970, by the L: .S. District Court for th e
     District of Columbia in the case of A . G. Schoonma ;r r                                                                                     58 3
     Co ., Inc . v . Reso> ct al .'' The iujunetion restraine d
     the Department of the Army from resoliciting bid s                                   Protests denied . . .                                   548
                                                                                          Protestz sustained 	                                     35
     pursuant to a decision of this Office holding that a n
     award under in ambiguous solicitation where only on e                                        Total	                                          58 3
     bidder was given a clarifying interpretation could h e
                                                                                             Many of the contract decisions rendered daring a
     prejudicial to other bidders ." , Assistance was furnishe d
                                                                                          fiscal %ear establish guidelines for the procuring agen-
     to the U .S . attorneys in the presentation of the Govern-
                                                                                          cies and for persons and firms desiring to do business
     ment's case before the Court . The outcome of the ap-
                                                                                          with the Government .
     pellate action had not been determined at the end o f
                                                                                             The matter of providing realistic delivery informa-
     fiscal year 1970 .
        The impact of these court actions has had no notice -                             two in invitations and solicitations has been the subjec t
     able effect on the number of protest submissions being_                              of a long line of decisions . _A recent decision in whic h
     received in the Office .                                                             rely delicery guidelines were suggested was one to th e
        Inasmuch as the bid protest fo1-tun is presently bein g                           Secretar% of the Navy recommending that, in the pro-
     considered in the courts, 1 ,y the Coulnlission on Gov -                             curement of supplies that air to be shipped to overseas
                                                                                          destinations and are to he loaded aboard a vessel fro m
     ernment Procurenient, and by professional and busi -
                                                                                          trucks, port handling charges be ascertained in ad -
        rs 49 Conip . 000 .'J .                                                             ante and dctaiivcl in thr im itation ." '
        "Civil .\, riot, No, I -, Ilo 7o, 1",~_   District   Coact   for [hr rristria t
     of Cal u .Arlo ,
        c 13-1(19205,   Stan -_ . 167? . It 1G92o,`, . .tun-            19Tt1_               1   1141, 21 .   J :111.   19711.

                                                                                                                                                 11 1

        One of the controversial issues in negotiated pro-              test by air unsuccessful bidder for a concession opera-
    curements concerns the extent that disctusions shoul d              tiou contract, tilt- Office conducted an independen t
    be conducted with offerors . A bid protest tcvietved a t            investi'nuion and comprehe'nsiyc rctictc of all factors
    the request of the Department of the Navy involve d                 relating to the current and prior contracts . This stud y
    the question of whether negotiations in a sole-sourc e              resulted in a determination that the contract had bee n
    procurement should be opened to a nets source whe n                 executed without compliance with the statute requirin g
    an additional evaluation factor tray included alon g                proposed concession contracts . ,uch as involved in tha t
    kith (paused specifications. It was concluded that de-              ca,e . to be transmitted to appropriate committees o f
    nial of further cliscucsion ttith the nety source or an y           Gon re_ss before award."'
    other responding source vcould be prejudicial to th e                     The remedial action recotumended in the case of al :
    nett sowre 's contpetitiye positi0r7 . The guidelin e                auarcl by the General Services Administration to a
     tlheiebv established vvas that discussions should h e              small hnsiriess limn, %%ho ? loos after award merge d
    conducted critic all responsible ofherols, even thos e               with it large business concern . teas termination of tik e
     whose proposals may be technical1v nonrespousite i f                contract for the Gmemment ' s convenience . The bid-
    such discussions might be "nicaninpr ful " dependin g                der t%as determined to have been ineligible for awar d
     upon tchctlter it particular offeror is considered to b e           on due basis that tilt' merr_r er agreement antedated th e
     x6thin a "competitive rang " - '                                    contract . The termination of the award teas the appro-
         ti\ p ile the jurisdiction of the Armed Settues Boar d          priate rentedv to cftecnlate the purposes of the Smal l
     of Conuact Appeals '1 ASI3C'A and the ;uirdiction o f               BLI,Hwss Act .
     this (Office arc only infrequentic invoked in the sam e                   Another _it_nifii ant decision with respect to the shal l
     case, such it confrontation %vas brought into focus i n             business program t%as one rendered at the request o f
     it decision invoking the application of a Marylan d                 tilt- A-iin,inisUation . .liter an exhaustive studv of th e
     sales and use tax . Follohcing an ASBC:A decision cen-              basic statute ; it :las colit lulled that the small busines s
     chtdir g that it contractor tyho had not included th e                 p rocurement activities could properly be extended t o
     alarh'land sales and use tit-, in his bid price, nothIith-           include construction contracts- - 7
     standing that both tilt- IFB :Invitation for Bid an d                     , I' he impact of the }postal strike on hid opening proce-
     the contract required the inclusion of the tax . shoui o            duic, ryas wilected ill n decision in tchich it ryas note d
     not be required to refund the amount of tax to th e                  drr the Del"Iltment of Defense had inutructed it s
     ( ioverntrient . the disbursing officer -submitted the mat -         1)oK Uri1P_, I rti\ it iCS t I I dC1:1% bid U!]e]I11Ig5 pending reso-
     ter to the Office for determination . Upon vcolt=~, . i t
                                                                          lution of the mail dt litre piol)Wms unless the require -
      teas held that to permit the bidder to avoid re,ectio n
                                                                                        If the proCUreuheut Mould not permit suc h
     of his bid and obtain an -maid b : biddiiil on a ta x
                                                                          delay . Further, DOD instructed its personnel that i f
     iuc lusive basis and then, alter atrard of the contract .
      to contend he excluded the tax from his price tcoui d               opcnim, cnu!d not be pnstpcuhcd . at-ai1ablV bids Moul d
      hate resultt'd it pertuittinu him to enioy a competitiv e            ill opened 111d :htt,od nnulc onlc if it ryas determine d
      advantage over other bidders and hcould ha ,Ic bee n                 that there- t .a, adequate I ompoutiou . Aotyithstandinit
      tantamount to allminI> hint to avoid his responsiltili-              that till' plotcstartt tsho ,uh :rlitted the late bid con -
      ties to refund the tax to the Government Therefore .                 wudl-d slim the strike ttas ill the >anry Icahn is a n
      it was concluded that the ASPCA decision ryas er-                    "a,t of ( ;oil the tyeitrht of le,,al .mthmities preclude d
      roneous and paynent as directed bt tie Board's dc t                  11 1 ,1111011 0I ihi, "ict r

      sion should not the made to the contractor I -                             4uhcnlllcnte_ the sa1111,M aspect of ON' Departmen t
           Throut,h the hid protest forunh . cases of yctid Moll           r,f I)etc'n .se diue( tive concerniu'-, steps to be taken i n
      voidablca~nu pct= that ]have been exec rued ha Silt- ( ;f --         portal strike situations ;cctt ,u_~_ested to the Federa l
      ernlnent cRercics are_ questioned . In such ,ittuuion : ,              I'rocu :elnent 1~eguhtions stalf for itt : fusion in th e
      the kind of n niedial acnot . :,resunt . ddh(uh deter nii-           civilian counterpart of the Arnied Services Piocure-
      nations depend'utg on file adyanccrncut of the contrac t              tuent Re'e'ulatiort . "
       perfornianre and the liability of the (;m"I luen t
           `Fo illu,tratr . a, a route of the            of I ;>t-o -

                                                                                                              LEGAL SERVICE S

Military Pay and Allowance s                                    cwYlcd the propriety of the acceptance of rct,ar d
                                                                ntnnc% lrnm a foreigq ~~o%crnnu nt, tlirile an :Air Fon t ,
    Like decisions on civilian personnel natters . tht          officer „a, temporarily assw-net to a U .S . Trainin u
decisions drafted by the attorneys in the militar %             Team in Colombia he assisted in the rapture of con-
;roues involved many different fields of law, interpre-         traband material bcin~ snnrggled into that comhtn fron t
tation of old as well as recently enacted statutes, and a       Panama . Under ColomNan la„ the informant is en .
 tnvriad of administrati%c regulations and directives .         titled to :t part of the proceeds freut the sale of till '
    Significant among the military decisions ,%as a deci-       ptoperty . In act ordance ,%ith applicable la,% and prio r
sion to the Secretary of Defense concerning hostil e            decisions it ,cas held that the a,yard ':rtnlhies were prop-
fire pay rights of members of the uniformed service s           erly for deposit to the I reasur% of the United States .
who are hospitalized for wounds caused by "hostil e             since the officer would be precluded front acceptin.
 fire ." It was concluded that the basis for secretaria l       the rewind under the constitutional prohibition agains t
 determinations should be based on the militate- casualt y      acceptance of foreign eutolumetits_ .”
 regulations. ='                                                    Leval question, ill connection v%ith the phase out of
     Each year interpretations are requested concernin g,        Rc-l%c Officeli Tlainin,, Corps progranhs at I ollclles
 whether retired military personnel enhploved by pri-            ,md m1i%erities arc Hiustlatrd in a decision to the Sec-
 vate business firms are performing services that consti-        retary of Ucdcnst . conccrnin« propriet% of payment t o
 tute "selling " which is proscribed by statute . Th e           uhembeu of senior RtI-aCr ye traittine i-11oups who partic -
 employment of a retired Air Force officer as a smal l           ipate in a, ( c1crated pl<)''ranli during the third aca-
 business representative for several manufacturers o f           demic %ear because of termination of the programs i n
 industrial and aerospace products was held to consti-           their senior rear. "
 tute selling within the prohibition and, therefore, re -
 tired pay benefits must be withheld during suc h
 employ ment .' 1                                                Appropriations and Miscellaneou s
     Conflicting divorce judgments were interpreted in a
                                                                      I)ecisions prepared in this assignment are as varie d
 decision to the Air Force concerning the right of a de -
                                                                 and complex as the attkities of the (imernntent it -
 ceased officer's Nyidow to a 6-months` death gratuit y
                                                                 ,elf . :%Ian% dccisio .hs 11lyolye the relationship of th e
 payment on the basis of a clecrce in%alidatimt a pre%i-
                                                                  Federal ( ;oc,,mment , itlh State and local i -,o%ernments .
 ous .divorce granted the officer in a foreign state .- "
     In the area of military t ravel and transportation ,         For vN'Imple . a dec ision ,.as issued to the Coast C:uard
 decisions were rendered interpreting the limitatio n            concl.uclim-, that under thy' Federal Co%ernnlent ,s cnn-
 on dislocation allowance payment, in cases o f                  stitutinnal inut :ullity from taxation h% the States, th e
 amended orders necessitatin .0 the establishment of h , (,       t .`~ . Coast Gu_ud :Academy -It Nvu London . Con n
  residences within a fiscal tear,-` the liability of members     —I, <=:r : :, ;x from liability for a se+ .per service tax as -

 of the uniformed services for costs of shipping exce l               -sed h% the cite oil l lopert% m,llels. =-
  weight of household Bonds by a circuitous route ,the n               Sinularlc . €hc ' 11,plica6on of the Feder"' .) imnnlnity
 change of station orders are amended .'" and the pro-            nde wa, invoked in a claim of a State drainage dis-
 priet of a proposed ;unendnrent to the Joint Trak e l            t .ict for an t asst _e1-[ iwainst prolwit% occupied b %
  I:egulations to authorize tcmjmrat- loch-6rig allowance ;       ,Ili .-Arm a I mmlllitim) plant . The matte :- was resol ve d

  ,.hen dependents of nlcmhers of the unif " xnted serv-          hr auth,=ri ; ing p,o,nenr for the fair and reas mahl e
  ices are required to mho%e from an overseas residenc e          %altle of the ser%iccs at°tualh v furnished to the Unite d
  when the member is listed in a Inissing status .                State, .
     A unique question presented for consideration con -               Iilustiatini-, a decision rcsol,in« a contcom-s\ bc-
                                                                  tw:,n tu,u ( :o,erulnent a~,rucies was a decision to th e
   -19 Comp . Gen . 5 .
   11 40 Comp . Glen . 111; .                                      'l ;-I rdnti{a .   June   I .   hP'; n _
      .19 Comp. Gen . 2:i :1 _
      -14 Comp . Gen . '-                                          rqy   c~nup . Gen . . t .

   -t -19 eoinl, Gen . =99


    Department of the Interior concluclinG that the Corn s          employee parkinG in pri%ateh- owned intildings . Th e
    of Engineers, seeking reimbursement for dal .Kit, t o           proposal known as a "parking equalization plan" fo r
    Elmer Citv Park caused during construction by- th e             leasing space for Department of Transportation em-
    Bureau of IZeclaniation of ( ;rand Coulee Third Powe r          plo,ees was herd to be proper Provided that the Gen-
    Plant, could not be paid . The premise for this conclu-         eral Services administration stakes a determination
    sion was the longstandirw rule that one executi%C de-           of need under the criteria in its orders . :"'
    partment tnav not reimburse another for use of rea l                Guidelines for accOUntahle officers were establishe d
    property damaged by another agency ."                            in a decision to the Air Force . It was held that a dis-
       The Secretary of Health, Education, and Welfare re -          bursing officer who had ample reason to and did ques-
    quested an advance decision as to whether the Na-                tion the legality of payments of Per diem under ret-
    tional :Air Pollution Control Administration coul d              roactive or ders, but who then elected to rely on advic e
    Purchase specially designed automobiles for testing ai r         hon departmental headquarters rather than to avai l
    pollution Prevention devices N% ithout violating th e            himself of an advance decision befo r e making pay-
    maximum statutory price limitation on the purchase o f           ments, 1ti°ould not be entitled to be relieved from ac-
    Passenger automobiles .' '                                       countability " '
       Frequently decisions of the Conlptrtiller General re -           In addition to the preparation of decisions, man o f
    veal a need for remedial legislative action . For ir1 -          the reports commenting on proposed leutislation ar e
    stance, at the request of the Small Business .Adminis-           hanc'.ted b% the staff of the miscellaneous group .
    tration, its authority for extendinv a minority an d
    economically disadvantaged citizens pro«ram so tha t
    small business investment companies could Participat e          `transportatio n
    with SBA under the tiarinteed loan program was re-
                                                                         The decisions and liti ration reports prepared by th e
    vieyved and found to preclude such extension ." Bill s
                                                                     transpor tation stafl' in%o!ye many technical matters re-
    to provide SBA with the necessary authority have bee n           lating to the interpretation of tariffs and rate tenders :
     introduced in Corwvess but have not been enacted int n
                                                                     i ontputation of charges for air, motor, rail, anti ocea n
     law .
                                                                     carrier eyic. s : and proceedings befue rep ulatory
        The :Administrator of A - eterans Affairs submitted fo r     -_curies and the courts.
     decision several questions arising under an interaenc y
                                                                         Tht, tm nu pot Cation staff furnished assistance in th e
     hospital administration training, contract with a pro-
                                                                     draftin 'If a nt°tv subpart to the Federal Procuremen t
     fessor of hospital administration; at " ['be Gcor_e t\ nsh-     Re,-~aiations in rero,uition of situation peculiar to th e
     ington University . The scat-- .tor% authorities and pro-
                                                                     prncurcuu'nt Of freiyint transportation services .' ` Sinni -
     hibitory statutes Were re%ietred to determine the k e gal-
                                                                     Lul%, legal aid%ice was furni=led incident to reconn-
     itv of the contract and the particular appropriations
                                                                     mondau,ms of the joint agexy Transportation Stud y
     available for obligation of contract costs . '
                                                                     ( ;roalp r-',ar.iin till , prncuretnrnt of nassen er trans -
        Similarly. the Department of Justice Wquested a n
                                                                     pm tatiw, seer ice, for odliciai (Imermnent tras-el .' 2
      advance decision as to whether . under the onnnibus
                                                                          To aoiq Ihi . Sunk Group in its investigation o f
      Crime Control and Safe Streets Act . the Law Etlforcc-
                                                                      the feasibility 1)f a recommendation that a certificatio n
      nnent administration had authority to make direc t
                                                                     of good o dci deliver% by a hiking earn ier be substi -
      grants for la .% irmpto%ement pro rams to units of iocxd        Wted for the current consiGnee's certificate of deliver y
      Govern men t .=,
                                                                      on the standarct Govenunent bill of lading, a Positio n
         Pursuant to a recommendation by the House (- :om-
                                                                      paper N .as Prepared . In this matter it seas stated tha t
      tnittee on :Appropriations rH - Rept . - o .'ll-642, pp . 8
                                                                      It -;p .(if( pro%ison of Ltw a, an expressed exception t o
      and 9`l, the General Services Administration submitte d
                                                                      the advance payment Prohibition in 31 U .S .C . 52 9
      for decision the question of authoritx io lease space fo r
                                                                      would be required to rennoyc doubt as to the legalit y
       O, B-1133 ^2- :. Apr . I4 . 19 -, 0
       's 19 Comp . G,•n .'_'02 .
       :0 49 Care . Gen . 32 .
        'r 49 C011111 . tier . 30                                        1;_ifcl~t . Apr . 17 . 0 7, 11 ,
           49coin,_     G,qr . -111                                       It         SI1 .1 22, I!kWl


                                                                                                                 LEGAL   SERVICE S

    of the proposed certification . The staff paper sug-           autholm . court ease precedents, adimnistrative re .,n-
    gested the kind of legislative vehicle for accomplishin g      lations, and digests of decisions wets prepared and dis-
    the objective .'' Also in connection with carrier billin g     tributed durin the year .
    procedure, the Military Traffic -ManaUement and Ter-
    minal Service was given approval of a waiver of th e
    monetary limitation ielatin, to the use of the short           DECISIONS AND OTHER LEGAL MATTERS HANDLE D
    form bill of lading for shipments moving into consol-                  DURING THE FISCAL YEAR 197 0
    idation points ."
       At the request of the Office of the Judge Adaocate          Assignment areas :
    General, Military Traffic Management and Termina l                 . . Appropriation and Miscellaneous                       x !4 4
    Service . Department of the An n\-, an informal opinio n             Ci6lian Personnel .                                     88o

    was furnished concerning procedures for movement s                   Contracts .                                          1,502
                                                                          Military Pav and Allf,—t ices                          605
    of house trailers for service members under Gover n-
                                                                         Transportation . . .                                    88 6
    nient bills of lading ."''
       A proposal to permit Army and Air Force Exchang e                     Suhtotal .                                       .t . 91 3

    Service employees to use Government transportatio n            Prit   ate Inquiries .                                         30. 9

    requests for air transportation to avoid payment o f
                                                                              I   'tal
    the 5-percent tax was reviewed . Since the travel o f
    Exchange Service personnel could not be considere d            Legislative and Icgal n•portt turnkilyd to conuniuecs and AIeut-
    within the ambit of travel on official 1Hdblic busutcss ,        hers of Congress and the Bureau of the Budget tin(locl M
    disapproval as being in contravention Of applicabl e             in the ahole statistics on decisions and other legal matter, )
    laws . regulations, and precedents ryas required . `           To     the couturittees of the Congress : .
       A considerable portion of the assistance rendered by                 Legislative reports	                                 13ii
    the transportation groups is incident to litigation b y                 Legal matters	                                         48

    and against the carriers . Instuutionc were furnishe d         To     Members of tile ComgO-s :
                                                                            Legislative report s
    to the Transportation Division on the action to he
                                                                            legal :natters .                                     21 5
    taken in motor and rail carrier misroute cases . °
       A significant decision in the transportation field                Subtotal .                                              ~G3
    rendered in fiscal year 1970 concerned a proposal o f          To the Bureau of the Budget . . .                               63

    the Military Sea Transportation Service to use for-
                                                                              total	                                             76 6
    eign-flag feeder ships to transport rrrilitar-. cargo int o
    ports for transfer to U .S . lines furnishing container-
    ship service where U .S . flab ocean carriers %,ere a v ail-   Legval Reference Service s
    able to transport the car,_o the entire distance . Thi s
    decision required a reyiely of the 190-6 Cargo Preferenc e        Depaitinents and agarcies arc kept info( nccl o f
    Act .`                                                         significant . decisions as the\- are issued by the genera l
       The propriety of the payment of transportatio n             distribution of advance copies, digests, and the pub-
    services by rail carriers r mtlitaiN shipments accorde d       lication of r. onthl}' pamphlets . An annual volume o f
    transit privileges seas highlighted in two decisions . On e    published d( isions is compiled each year.
    of the decisions involved the transit billing for ship-           Information on unpublished decisions is made avail -
    ments of explosive : .- and another involved the ship-         able to Government agencies and libraries by distri-
    ment of a coumrunication outfit : both shipments were          bution Of quniterly digest pamphlets on the followin g
    for the Department of the Army. '                              subjects : 1 'i Appropriations and -.Miscellaneous, (2 )
       A "Transportation Manual , containing statutor y            Gkilian Personnel, (3) Contracts, (4 ; Pay an(! Allow-
                                                                   ances of the Uniformed Services, and 5) Transpor-
         A–2422 o .M ., Sept . N, 11669 .
      „ A–29224 . Mar, 11 . 1970 .                                 tation . Copies of decisions are available from the Publi c
      ,s n–166860,     Selrt- .,
                              1969 .                               Information Desk maintained in Room 7510 .
         19Conrl . . lien- -,71; .
         Ii–161007 .   et
                      xerl_, Jul) 15 . 19(14 .                        A cumulative citation and subject card index i s
      ,a ii–115955, JfnJ ,, 147 0
                                                                   maintained on all decisions . Research services ar e
        19 comp .    Gen_ 466 .
      `49 Conti) .   Gen, :e.2                                     furnished upon request . During fiscal year 1970, th e



                                                                                           QV   D ARA   I VE G IART

                                                                                                 FI SCAL YEAR S
                                                                                                 -7 11 0

     I     I    .   I   I    I   I   I   I

     JECISIONS 10 :

               HEADS OF DEPTS ,                                  47
               AND AGENCIE S                                     414
               CERTIFYIN G                               15'j
               OFFICERS                                  187
               DISBURSINr, FINANCE                WTI 155
               ETC, OFFICERS                            140
               CLAIMANT S

               OTHERS                            ~
                                                 = =Q   122
     LITIGATION REPORTS                                                5J2
                                             h .= 7777L                Li72
     O FFICE tMORANDLPIS                                                              0

          ItPORT DRAFTS                                         42tJ

                                                 F 0 T A L S
                                                                                 3,563          (3)

                                                                                  1959                   1970

     Index-Digest Section staff handled 3300 research                  dispatched 22,249 decisions, reports, and letters . The
     inquiries .                                                       Index and Files Section prepares a daily incomin g
       JUl decisions are Furnished to the LITE (Legal In-              correspondence wport to keep the offices and division s
     formation Through Electronics! activity, operated by              advised of incomitiv, natters .
     the Staff Judge Advocate at Be AN Force Accounting                   The Library which serves all offices, divisions, an d
     and Finance Center at Denver, Colo .                              branches of GAO m well as other agencies located i n
        The Index and Files Section recorded and ann                   the GAO building, handled 5§77 requests for rehr -
     lyzed 12,595 pieces of incoming correspondence and                once services . The annual inventory indicated a tota l

     116                                                                                                                          — .,11
                                                                                                LEGAL SEPVlCES

of 61,105 bound volumes, looseleaf publications, an d        congressional committees . Members of Congress, an d
pamphlets and magazines .                                    from the Bureau of the Budget .
   The Legislative Digest Section prepared 5 .860 leg-         rA special compilation of the legislative history o f
islative history files on all public and private bills in-   the law establislrinQ the Connnission on Governmen t
troduced in the Second Session of the 91st Congress ,        Procurement was prepared for the use of GAO person-
and processed requests for reports on 504 bills from         nel and the Commission staff .

                                                                                  PERSONNEL ADMINISTRATIO N

                                                             Ica education and his audit and manaeement revie w
                                                             assignments . In addition, the stafl- member, as lie pro-
                                                                resses kith the Office, will participate in various pro-
                                                             fessional training programs .' Chest• coinsrs are desi L.lie d
                                                             in increase the profeisicnal talent, of the individua l
                                                             , ,,all member so that he may more effectnel carr y
                                                             out Iris assie- nrnents and to improve the professiona l
                                                             skills of the stall as a %ehole . These courses are far-
                                                             ther desit,, ned to specifical h. tit the needs of staff ntcui-
                                                             hers at supervisory levels by keeping them informed o f
                                                             professional and technological advancements ill til e
                                                             fields of managentent, accounting, auditing, and ntan-
                                                             agenteut auditing. As an adjunct to this training, GA O
CHAPTER TE N                                                 encourages staff members to further develop their skill s
                                                             through participation in professional orcauiizations .
                                                                  Leaditn, educators from our foremost universitie s
                                                             continued to assist the General :Accountin_+, Office i n
                                                             formulatinIg and adjusting its program to obtain, de-
                                                             volnp. and retain an outstandiugc staff of ptofessiona l
PERSONNEL ADMINISTRATIO N                                    accountants and auditors . As a result of their advic e
                                                             and ccaurscl during the year, Gr\O is indebted to th e
                                                             f ollcm Ing, cclucator-consultants :
Genera l                                                           Floyd ;\ . Bond, Dean . Graduate School of Busi-
                                                                ness :Adntinistation, University of Michigan.
  :A personnel management system comprises man y
programs and functions . Ili the General :Accounting               john NV . Buckley, Chairman, Accounting -
Office, the Office of Personnel Management is responsi -        Infonnation Syste is . Graduate School of Busines s
ble for developing, iuiplenrenting, reviexving, and eval-       Administration, University of California, Lo s
uating personnel management policies, practices, an d           :Artgeles .
procedures and for assisting and advising the director -           John E, Champion, Professor of Accountin„
ate, managers, and supet-Visol's in carrying out thei r         School of Business_. The Florida State University,
personnel management responsibilities .                            W . W . Cooper, Dean, School of Urban and Pub-
                                                                lic Affairs. Carnegie-Mellon University .
                                                                   Robert W . French, Professor of Economics an d
Recruiting, Training, and                                       Nfanagement. Univetsity of Illinois, Chicago
Staff Development                                               Circle .
                                                                   Pau; V . Grambsch, Dean, School of Business Ad -
    To effective!} discharge the responsibilities place d
                                                                ministration, University of Nlinnesota .
upon the General Accountin' ; Office by the Con-gress ,
                                                                   C . Jackson Graf=son, Dean, School of Business Ad -
it is essential that G.\O maintains the high quality of
its professional accounting,, auditing, and investigativ e      ministration, Southern Nfethodist University .
sta`i . With this objective in mind, GAO continued it s             Frank S . Kaulback, Jr ., Dean, \IcIntim School o f
intensive rucruitnent progrtar at colleges and univer-          Commerce, University of Virginia .
sities tivaughout the county . Recruiters visited 31 :5            I larry M . Kelly, :\ssociate Dean, School of Com-
Campuses ro an effort to interest quality students in a         merce, New York University .
career wit't the General -Accounting Office,                       Ossian MacKenzie, Dean, College of Busines s
    After reporting for duty, the newlyhired college            :Adminisu.ation, The Pennsyl vania State University .
graduate is assigned to a specially designed trainin g             james R . McCoy . Dean, College of Administrative
program to orient him to the activities of the Federa l         Science, Ohio State Universit : .
Government- and, particularly, to the e+ork of the                 Herbert E . Miller, Professor, Department of :Ac-
Office . This approach bridges the gap between his col -        cowuing and Financial _ldministration, Graduat e


  School of Business Administration, Michigan Stat e           cers from colleges and universities throughout the
  University.                                                  country .
    Alfred M . Pelham, Assistant Vice President fo r              GAO also continued a program for joint meeting s
  Finance and Associate Professor, Wayne State Uni-            tyith selected students to acquaint them with its ac -
  versity (Retired) .                                          counting and auditing operations. 'I'luee such meet-
    Prank P. Sherwood, Director, Federal Lxecutiv e            ings were held in various regional offices and one i n
  Institute, U .S . Civil Service Commission .                 R'ashington . in which it total of 48 students fro m
                                                               various universities and colleges participated .
                                                                  The two charts on page 121 graphically portray th e
Recruiting-Professional Staff
                                                               general success of recruiting efforts and reflect the con-
   At the close of the fiscal year, the professional staf f    tinued steady growth of the professional staff over th e
comprised approximately 60 percent of the total Gen-            past 10 years .
eral Accounting Office work force . It is expected tha t
this ratio tivill continue to increase in fiscal year 1971 .   Recruiting—Technical Staf
   Separations for the accounting and auditing staff
totaled 374, including 70 transfers . Also included i n          'I'he fiscal year 1970 saw a slight reduction in th e
this total are 114 military separations and furloughs .        adjudicator staff. In an effort to compensate for th e
Most of these are expected to return to the Office upo n       loss of experienced adjudicators . GAO continued its
completion of their obligation .                               program to recruit trainee adjudicators at the grade s
   Four hundred and seventy-two employees wer e                GS—5 and G5—7 levels. Ten additions to the adjudi-
                                                               cator staff' were made under this program during th e
added to the accounting and auditing staff' . Of thi s
                                                               year . GAO also continued to recruit freight rate spe-
number . there were 358 new appointees, 17 transfer, .
                                                               cialists from an unassembled freight rate specialist ex-
84 military returnees, and 13 others. The net ,fain wa s
                                                               amination for positions in grades GS—7 and GS--9 .
98 staff members, bringing the total accounting an d           Additions to the freight rate specialist staff from this
auditing staff` to 2,782 employees .                           source totaled 22 .
    In its continuing effort to broaden the base of it s
 accounting and auditing staff and to supply an ex-
                                                               Recruiting--Support Staf
 pertise in other disciplines, GAO has extended recruit-
ment efforts to include graduates with academic                   GAO is confronted with the ever increasing nee d
 imck,rounds in nonaccounting areas . Of the 213 non -         for competent secretarial and clerical personnel to
 accounting positions filled during this recruitment year ,    staf f- new and expanded programs and as replacement s
 74 of the appointees majored in business administra-          for the turnover tyhich can normally he expected i n
 tion ; -18 in management : 42 in economics,- 14 in mar-       work of this nature . With the growing competition
 keting ; 13 in finance ; five in international business ;     for qualified employees in these fields . GAO is _,ive n
 five in engineering ; two each in mathematics, trans-         constant impetus to revise and expand its efforts aime d
 portation, and history ; and one each in systems analysis ,   at attractin g and retaining the hi,itic qualified suppor t
 operations research, industrial relations, cybernetics ,      stair so essential for the efficient and effective opera-
 government, and personnel management .                        tion of the (thee . A revised approach to this prob-
    Twelve new attorneys and ]aw clerks were employed          lem was dcvr -ped . It includes f I a standing conunit-

 dorntg the year . GAO will continue to recruit a lim-         we of expec* ~icecl senior secretarial staff utembers t o
 ited number of attorneys to replace those lost as a           provide pea :-.0 it advice on ways and means of en-
 result of transfers, retirements . and other separations.     hanuu_ recruiting efforts and of rechrcing turnove r
    To acquaint fai}dt) members ; and administrative           through increased and higher quality training both on
 officers of various colleges and universities with th e        the jolt, and in the classroom, and through im t-me-
  professional °quality ' f its work and to obtain their as-   ments in the working environment and 12 t a positive
 sistance in the me;uitrnent of promising students, GA O        program for on-site recruiting at local secretarial an d
 continued its seties of joint faculty meetings . This yea r    business schools to be conducted by GAO's placemen t
 nine sessions wete held, which were attended by 9 3           staff in coniunction with representatives of its secre-
 selected faculty members and college placement ofli -          tarial committee . In addition, a special recruiting bro-

 120 ,

                                                                                                                                         PERSONNEL ADMINISTRAi IO N

       (IFul-€ `, l .~,' .1 .. .1 t t~!1 1"s'EI~ ANU AUDITING S TAFI '
       iN I; F!<<+ :tC~t: Tla i 1 4d i:f"C'1,OYklkGd i

       `_7,50? _L
                                                                              TOTAE AVERAGE MAN YEAR ;

       5,00 0




                                                                            ACCOUNTANTS AND AUDITOR S
       2,500                                                                   „vEraAGE MAN YEAR S

       2,000                                                                                          ®f

       1,soo                                                                                                                                                        _

                                 1961            1962         1963                1964         1965 1966             1967          19681          1969     1970
                                                                                              Fiscal Fears

              It OF SERVICE                                  GAU PERSONNE L
       AS OF 0141 ;_ 2tq; 1970


                                                                                                                                                       PROFESSIONA L

        L                                                                                                                    _             l~J O'r E it .

                                                                                                                                                       TECHNICA L

             .' .~
                                                                           34 1

        f                                   ~.                                                                                                   225                    -
        {                                        i                                                                                                                          _
        f                                                                                             -783               -       173         k



                ;N()       R                                                  1          19                                        25                           ,T
                     1CI                                                                       ui ,     YSC                                               AND OVE R
             A,. of ., u,                                                     !,632 04() a,.ple±                    Cxcfusiva      ofC   c        ' .Cr pr :_onzld h
             Ill t:i U(3!II+,~- .~ :    .! r,            Il ll li,         1pf S, a!"C :T1 .1,s ^i lU . .. I
             ,at[11 mum!!              of        ':1 .               x 10 IOr       'u)     J ., ..r'k :rw ni Ill ' ?t :; r i(•


chure, denoted entirely to the secretarial field, %,a s      assistance ; life in the inner city ; and a sur ev of ho,.-
prepared to acquaint a broad audience of qualifie d          city dv%ellers vie„ the Government . Participants ar e
candidates, not only in the Washington metropolita n         representatives of Federal, State, and local _gom-n-
area, but also throughout the Nation, with the oppor-        mentu and Senior staff members of GAO ,
tunities available in the General Accounting, Office .          e . S Y terns AlialSsis . The objective of this 2-wee k
                                                             surrey course is to introduce students to anah'tic tech-
Staff Development                                            niques ,thich caul be used in auditing . The course i s
                                                             designed to help auditors recognize %There analyti c
   The Office has encouraged each eutployee to con-          techniques ran be applied and %%-here the technique s
tinue his professional development . Staff members par-      have clot been correctlF applied .
ticipated in a balanced mixture of training and ca-
                                                             2. Other Program s
reer development programs, including on-the-job an d
internal classroom training and training availabl e              a. GAO Orierrtatiuti . Throu1111 this 3-hour program ,
through private industry, colle en -s, universities, an d    all new employees are oriented to the organization ,
other Federal agencies .                                      functions, policies, and procedures of GAO involvin g
                                                             personnel matters . It also includes a review of em-
TRAINING GWI N THROUGH GEV'ERA L                              ployee right;, benefits, acid responsibilities .
                                                                 b. Basic Supertiskm . This 10-day course is an intro-
1 . Programs forPmfcssional S t aff                          duction to basic concepts of e f-cctive supervision . L po n
    a. GS-i—9 Training Prngranr .'hhis progrram is de -      assuniing supervisory responsibilities, each staff mem-
                                                             ber participates in this course which covers a variet y
 signed to orient new professional staff members to th e
organization, functions, policies . and procedures o f       of supervisory techniques, reviews models of super-
 GAO and to the fiscal, legal, accounting, and man-          visory systems developed in the past, and introduces
 agement processes of the Federal Government. Thi s          recent developments in supervisory methods .
 If-day program bridges the gap between education ob-           c. Report I)rrelopment Wort shop . This i-da y
 tained in college and the more specific professiona l       workshop is designed i I ; to sharpen the report de-
knowledge required on actual audit assignments .             velopment skills of GAO staff members and Q'I t o
   b. Cnte•nucdiate Career Dc :rrfopntent Program . This     facilitate the development of better reports within a
 IQ-day course is given to staff members with fro m          shorter time frame . Concepts discussed in the worksho p
 I to 2 years of experience in the Of fice. The subjec t     include job and product pl, nnina, evidence, psy-
matter includes more ads anced approaches to the tech-       chology of conuntill ication, . organization of reports ;
niques of auditing—obtaining evidence, interviewing ,        st c . editing . and the logic, syntax, and grammar o f
,writing, and analyzing finclings . The pro g ram is de -
                                                             the English language .
signed to reinforce the staff members understanding o f
                                                                d. !rifting .Skills Wwkshop . This 2-day semina r
GAO's audit practices and basic auditing techniques .
   c. Advanced Accounting and Auditing Study Pro -           suppleutents the Report Deyelopmc-nt Workshop an d
gr am . The objective of this program is to improve staff    has sonic of the saiue objectives . The seminar is de-
performance on daily assignments and to help thos e          sk-mcd to improve -ordination and conununciatio n
preparing to take the :11A examination . It includes a       bet,cen the ,triter, Icyie,wer, and reader, and to hel p
comprehensive review of accounting theory and prac-          auclit and aclutiiiistrative teams to improve their abilit y
tice, auditing, and commercial law.                          to write clear, logical, and accurate letter, and reports.
   d, Federal Action and the People of Our Cities . Th e        e. Ertgii~h Rcb,'hel Corers, . This is a 3-week . 18 -
National Institute of Public Af fairs has cooperated il l    hoor t-nuiSc cl-Signed for clerical, administrative, an d
sponsoring this I-week seminar . It stresses the need fo r   secietaiiai employees. In addition to a concentrate d
coordination of Federal programs in cities . Subject;        Em, ish grammar rewics,- the course includes a dis-
discussed by a panel of experts include the urban con-       cussion of techniques in proofreading and intr oduces
dition : government in a metropolis ; model cities ; put -   the basic principles of business writing .
poses and problems in conunurtity action, manpowe r             f. Bcttrr Offi( e Skills and Set vic,s (BOSS) . BOS S
programs, public education, transportation, healt h             a sviiiin,ii-workshop de.simicd for clerical employees
programs, public assistance, and law enforcement             GS- --GS- 1 .'Hir prof=rant consists of E half-day ses -


                                                                                                    PERSONNEL ADMINISTRATIO N

    sions in which the employee works out programme d                                 Shruthrntd Rthesht P . This course consists of 2 .1
                                                                                     t* .
    assignments and problem situations that would nor-                          hours of concentrated review of Greg,-, shorthand prin-
    mal], be encountered during an 8-hour workday . Tlt i                       ciples and correct transcription procedures . It is supple-
    course was developed by the Civil Sercive Commissio n                       mented in dictation practice to improve speed and a
    and has now been adapted for use in GAO .                                   review of punctuation and spelling rules .

     unLrr                                                                                                                              'root .uuut!;= i
    u(tim~-.                                     Rama oRrniuing proer-ur                                    Lrngth    of E~ :uFram   rtnr~tdin_e Etto~rn~i :
     4:I V . tt

                                           Programs for Professional Staf

          10      GS–7--9 training program	                                                            16    days         ..                            328
           3      Intermediate training program                                                        10    days .                                      91
                  Advanced accounting and auditing study program :
             I         Washington                                                                     4     months . . .                                 81
                       Regional Offces :
            I              Boston_	                                                                    _ . .do .                                         22
            1              Cincinnati,	                                                                     do .                                         20
            2     Federal action and the people of our cities . . . .      ..                         5 days . . .                                       26
            3     Systems analysis	                                                         ..        10 days . . .                                      68

                                                   Other Program s

                  GAO orientation	                                                                     3 hours	                                         320
            .1    Basic superyision                                                                    to das~-       .   ..                             93
           I5     Report development workshop . _                                                       days . . .                                      238
                  Writing skills v.orkshop .                                                            'Los                                             54
            4     Programs for secretarial, clerical, and administr ative stab . .                     Various . . . .                                   86

                         Total .                                                                                                                     1 . 427

    TRAINING GIVER' THROUGH AGENCY O R                                           1()70 in ei .    Washington, D .C ., or Palo Alto, Calif.
    A'0 '-GOVERNAIEN7' FACILITIE S                                                 GAO -         niumbeis took part in either advance d
                                                                                utanagen       or executive development programs con -
      The need for keeping pace with and adapting t o
                                                                                ducted 1 Harvard University Graduate School of
    the rapid changes in the professional disciplines re-
    quired in GAO's wort: presents a continuinn challenge .                     Bwiness .Adnunisuation, Stanford University Giaduat e
    Because it is not feasihle to conduct in-house training ,                   School of Business, Cornell University Graduate Schoo l
    especially for the highly technical and specialized area s                  of Business and Public Administr ation, and the Uni-
    of GAO work, to nieet this challenge, staff members                         versity of Pittsburgh Graduate School of Business .
    are assigned to formal training programs conducted b y                         In addition, three stall - members were sent to a mid -
    colleges, universities, carious professional orgattizatious ,               career educational program for systematic analysis .
    and other Government agencies, includin g, the Civi l                       This full vicar program tyill enable GAO to increase it s
    Service Commission .                                                        professional capability in the area of planning, pro-
       The special training of stall nrenthets in the audi t                    grasnming, and hudEctin,_,, systems . The staff member s
    responsibilities and techniques in an ADP systems en-                       tyhn have attended assist the Office in training others .
    vironment is provided through a course conducted by                         assist the audit staff on specific problems, and cooperat e
    the Civil Service Commission . The Office assigned two                      tith the agencies in the area of systematic analysis .
    professional staff- members on a full-time basis to assis t                    A numher of eniployees attended programs, such as
    in the presentation of this course . Seventy-three staff                    the Federal Executive Institute in Charlottesville, Ya . ,
    members attended this program during the fiscal year                        the Industr ial College of the Armed Forces, the Execu -

                                                                                                                                                       12 3


     tive Seminar Centers at Kings Point, N .Y ., an d                            processing ; planning, programming, and budgeting ;

     Berkeley, Calif., the Brookings Institution Conferenc e                      management and supervision ; and miscellaneou s
     for Federal Executives, and an Intergovernmenta l                            cOUrses .
     Affairs Fellm ship program sponsored by the Civi l                              A total of 1,068 staff members attended variou s
     Service Commission in cooperation with the Brooking s                        trainin g programs in other Government a±+envies an d

     Institution .                                                                at colleges . universities, and service institutions . O f

       To provide for specific operational needs, staff mem-                      this number -114 attended college evening classes, dur-
     bers were assigned to carious programs given by th e                         ing nonworkin hours. in order to update their knowl-

     Civil Service Commission . A total of 214 staff member s                     edge in such subject matter areas as mathematics ,
     were assigned to Civil Service Commission trainin g                          statistics, management, economics, late, and electroni c

     courses in the following subject areas : automatic data                      data processin g


     Number                                      S :uur of   training Program                                    Lengtl     uA   Progrvn         'I t .1 nun;brs
     u[ times
                                                                                                                                               atteu ding ptogru n

                                             Civil Service Commissio n

                Intergovernmental affairs fellowship program (with Brookings Institution) . .              :3 months . . .
         II     Principles and practices of auditing in the ADP ss'steuls environutent                      15 days .                                          73
          d     Federal Executive Institute 	                                                              Various	                                             6
         37     Seminars : Executive development. m :viageniem, and ADP                                         do .
          1     PPB systcros, statistical sampling, and systems analysis                                       .do . . .                                       28
          7     Personnel management, such as EEO, staffing, etc                                           3—5 dacs . .                                         8
         32     Miscellaneous courses including supervisor}' training . communications,              and   Various
                  secretarial .
                                              Department of Defens e

                Industrial College of the Armed Forces . . .                                               I vear . .                                           1
                Miscellaneous courses including operations research, contracts, research develop-          Various                                             34
                  ment, management, etc .

                                             Other Government Agencies/Manufacturing Companie s

          2     Foreign Serv ice Institute .                                                               i—t weeks .                                          2
         42     Data processing courses	                                                                   Various	                                           13 3
                                                                                                                do . . .                                       44
         24     Miscellaneous subject areas, 	

                                                 institutions, Service and Professional Organization s

          I     Conference for Federal executives on business operations 	                                 40 hours . . .                  -                      I
                19th Annual Symposium . FGAA .                                                                                                                 10
          I     51st Annual Conference, NAA_                                                                                                                     4
                Miscellaneous subject areas, such as CPA review, mathematic ;, n~.a Ras;e n?ent, ADP,      Various	                                           20 1
                  etc .

                                                                    Colleges and Universities

           I    Summer IrlSnm[C for Federal t'XeCURVCS 	                                        -          ._   tr c(k' .

                                                                                                              n—uhs .                                            i
          I     Educational program in syste .natic analysis . . .
         76     Various management developutent and rel ..ted pro'_ran',j                                  `arm ut .                                           160
                                                                                                           Semester .             _.                           136
        102     Accounting and related discipline:
                Automatic data processing	                         -                                            .do . .                                         30
         11     Law and contracts,	                                                                         - . .do .                                           17
                                                                                                           Various                                              77
         22     Miscellaneous	

                       Total	                                                                                                                               1 .068

                                                                                PERSONNEL ADMINISTVATIO N

Professional Developmen t                                   dated October 9, 1969, and the directives of the U .S .
and Recognitio n                                            Civil Sm ice Commission . preliminaty work seas begun
                                                            on the design of an. internal system for personnel man-
  During the past year, 60 staff rnembers passed th e       at;ement evaluation to be implemented on an annua l
CPA examination . Darin; the same period 33 em-             basis . This ccaluation systcm should result in a com-
ployees received CPA certificates and taco CPAs joine d     preirensive retiey of personnel management programs .
GAO's staff. Four hundred and cightc-six staff mem-         A "Smnmar of Objec :ive c_ - Nlanagenwnt Technique s
bers are nox• certified public accountants, and 8 3         and Potential NIcasurement Tools" sshich will serv e
others have passed the examination and g ill receiv e       as a framework for the system has been submitted to
Certificates syhen they complete their experienc e          the Civil Service Commission for its review, and addi-
requirements .                                              tional work is heir, undertaken to develop an operat-
   Most States now recognize the professional natur e       ine format for the actual on-site revie%vs.
of the stork of the General Accounting Office an d             Other program acti% ;ties of special interest includ e
accept GAO experience as meeting their eligibility re-      GAO's Action Plan to implement Executive Orde r
quirement for a CPA certificate . Two hundred an d           11478 ; Equal Employment Opportunity i . As a ssork-
eighty-four members of GAO's staff have obtained            in ; 10Cwnent, this Action Plan examines EE O
their CPA certificates on the basis of GAO experienc e      achievements and further goais in the context of per-
or education, or both . The Office is constantly workin g   sonnel management, recruitment, and personnel de-
with State boards of accountancy and committees o f         velopntent . As an adjunct to the issuance of the Action
professional organizations to keep them informed o n         Plan, the Director of Equal Employment Opportunit y
the professional quality of GAO's stork . Hopefully ,       for the General .Accountina' Office appointed addi-
soon all States will recognize CIAO experience . The        tional EEO officers and counselors under the program .
trends in that direction have been encouraging .                An Action Plan seas also prepared in response to th e
                                                            p resident's rnernorandum on "Youth and the Federa l
Personnel Operation s                                       Service ." This Action Plan examines GAO program s
                                                             relating to such matters as manpower forecasting ,
   An overall review and evaluation of policies, ob-        career development, student employment, and assist-
jectives, and operating practices and procedures ha s       ance to schools . As a part of this plan, action items fo r
been made in such functional areas as position, classi-      further program emphasis scene pinpointed .
fication and pay administration, performance evalua-            Under long-range programs for the computeriza-
tion, equal employment opportunity, the disposition o f      tion of day-to-day records control and processing fUnc-
administrative appeals and ,:grievances, incentiv e         tions. the Assistant to the Director for Data 'Iliaae-
awards, employee health benefits, personnel sectu ity .      ment, in conjunction %rill) various GAO staffs, ha s
and other related administrative functions and services .   conducted further pilot work with the newly installe d
   In concurrence with a Presidential memorandum            computer facility .

X 10 1TS
                                                                                                                         EXHIBIT 1


                             AUDIT S                                   House Beauty Sho p

                                                                         The Legislative Branch :Appropriation             Act, 1910 ,
                                                                       Public Law 9 -145, approved December 12, 1969, 8 3
                                                                       Stat . 338, established a revoh•ing fund for the Hous e
Airport Development Progra m
                                                                       Beauty Shop and provided for an audit by GAO a s
                                                                       follows :
  Airport and Airway Development Act of                1970, Pub-
lic Law91-258, approved May               21 . 1970, 81 Star . 219 ,
                                                                          Effective the first of the month following approval of thi s
contains the following access to records and audi t                    Act, there is established in the Treasury of the United State s
report provisions :                                                    a revolving fund for the House Beauty Shop . The revolvin g
                                                                       fund shall be self-sustaining . The net assets of the Shop o n
  Sec. 26 . Access to Records .
                                                                       the effeethe date of this section shall constitute the capital o f
   (a)  Recordkeeping Requirements.—Each recipient of a                the fund and the existing liabilities shall be paid from th e
grant under this part shall keep such records as the Secre-
                                                                       fund . All moneys thereafter received by the Howe Beaut y
tary may prescribe, including records which fully disclos e            Shop from fees ft,r services or from any other source shall be
the amount and the disposition by the recipient of the pro-
                                                                       deposited in such fund : and mmteys in such fund shall b e
ceeds of the grant, the total cost of the plan or program i n          mailable without fiscal Bear limitation for disbursement b y
connection with which the grant is given or used, and th e              the Clerk of the House of Representatives for all expenses o f
amount and nature of that portion of the cost of the pla n              the Shop, including but not limited to the care, maintenance ,
or program supplied by other scurcLs, and such other record s          and operatien of the Shop, procurement of supplies an d
as will facilitate an effective audit .                                equipment .. and com ;:ensation of personnel .
                                                                          An adequate system of accounts for the revolving fun d
   (b) Audit and Examination .—The Secretary and the
Comptroller General of the United States, or any of thei r             shall be maintained and financial reports prepared on th e
                                                                       basis of such accounts . The activities of the Shop shall he
duly authorized representatives, shall have access for the pur-
                                                                       subject to audit by the General Accounting Office at suc h
pose of audit and examination to any books, documents ,
                                                                       times as the select committee may direct, and reports of suc h
papers, and records of the recipient that are pertinent t o
                                                                       audits shall be furnished to the Speaker of the House, to th e
grants received under this part .                                      select committee, and to the Clerk of the House . The Comp-
   (e) Audit Reports .—In any case in which an independen t            troller General, or any of his duly authorized representatives ,
audit is made of the accounts of a recipient of a grant under          shall have access for the purposes of audit and examination t o
this part relating to the disposition of the proceeds of suc h          such books, documents, papers, records, personnel, and facili-
grant or relating to the plan or program in connection wit h            ties of the Shop as he may deem necessary .
which the grant was given or used, the recipient shall file a              The net profit established by the General Accounting Offic e
certified copy of such audit ~.%ith the Comptroller General o f         audit, after restoring any impairment of capital and pro-
                                                                        viding for replacement of equipment, shall be transferred t o
the United States not later than six months following th e
                                                                        the general fund of the Treasury . (83 Stat . 347 )
close of the fiscal year for which the audit was made . On o r
before January 3 of each year the Comptroller General shal l
make a report to the Congress describing the results of eac h           Federal Credit Union AdministratLi n
audit conducted or reviewed by him under this section dur-
ing the preceding fiscal year . The Comptroller General shal l            The Act of March 10, 1970, Public Law             91-206, 8 1
prescribe such regulations as he may deem necessary to carr y           Stat . 49, amending the Federal Credit Union Act t o
out the provisions of this subsection .                                 provide for an independent Federal Agcuc- for th e
   (d) Withholding Information .--Nothing in this section               supervision of federally chartered credit unions, con-
shall authorize the withholding of information by the Secre-            tained the following audit provision :
tary or the Comptroller General of the United State,, or an y             .` Sec. 3 .
officer or employee under the control of either of them, fro m
the duly authorized committees of the Congress . (84 Star .               °(f) The financial transactions of the Administration shal l
233)                                                                    be audited he the General Accounting Office in accordanc e


    EXHlBlY 1

    uvith the principles and procedures applicable to commercia l          "(6) The Comptroller General of the United States shall ,
    corporate transactions and under such rules and regulation s        as a result of his periodic revie :cs of the activities financed by
    as may be prescribed by the Comptroller General of th e             the fund, report and make such recommendations as he deem s
    United States . The audit shall be conducted at the place o r       appropriate to the Committees on Post Office and Civil Servic e
    places where the accounts of the Administration are kept . "        of the Senate and House of Representatives at least onc e
    (84 Stat . 50,12 U .S .C . 1752a )                                  every three years." (5 U.S.C . 1304(e) )

    Education Assistance Program s
                                                                        Pacific Island Trust Territor y
       The Act of April        13, 1970,   Public Law   91-230, 84
    Stat .   121,     extending programs of assistance for ele-            Departme .tt of the Interior and Related Agencie s
    mentary and secondary education, contains the follow-               A ppropriations .let,    1970,   Public Lac .-   91-98,   approved
    ing provisions relating to audit and access to records :            Cctoher    29, 1969,   contains the usual provision for au-
                           "Technical Assistanc e                       dit of the Trust Territory of the Pacific islands :
       "Sec . 414 .
                                a     ~     n                                 # * Provided, That all financial transactions of th e

       "(b) The Commissioner shall permit local educationa l            Trust Territory, including such transactions of all agencie s
    agencies to use organized and systematic approaches in de-          or instrumentalities established or utilized by such Trust Ter -
    termining cost allocation, collection, measurement, and re -        ritery, shall be audited by the General Accounting Office i n
    porting under any applicable program, if he determines (1 )         accordance with the provisions of the Budget and Accountin g
    that the use of such approaches will not in any manner lesse n      Act, 19_11 ( 4 , Stat . 23), as amended, and the Accounting an d
    the effectiveness and impact of such program in achievin g          Auditing Act of 1950 (64 Star . 834) (83 Stat . 151 –
    purposes for which it is intended, ( 2) that the agency will us e   1521
    such procedures as will insure adequate evaluation of eac h
    of the programs involved, and (31 that such approaches are
    consistent with criteria prescribed by the Comptroller Genera l                       ACCESS TO RECORD S
    of the United States for the purposes of audit . For the purpose
    of this subsection a cost is allocable to a particular cost ob-
    jective to the extent of relative benefits received by suc h        Economic Opportunity Progra m
    objective . " (84 Stat. 167 )
                            "Records and Audi t                            Departments of Labor, and Health . Education, and
       "Sec . 424 .
                                                                        Welfare . and Related Agencies Appropriations Act ,

      "(b) The Secretary and the Comptroller General of the             1970, Public Law 91-204, approved March 5, 1970 ,
    United States, or any of their duly authorized representatives ,    8-1 Stat . 23, contains the following provision under th e
    shall have access for the purpose of audit and examination t o      heading Economic Opportunity Program :
    any books, documents, papers, and records of the recipient s           11
                                                                               * I That all grant agreements shall provide that th e
    that are pertinent to the g r ant or contract received under an y
                                                                        General Accounting Office shall have access to the record s
    applicable program ." (84 Star . 170 )
                                                                        of the grantee which bear exclusively upon the Federal grant :
                          "Auditing and Review of                             — 184 Stat 4 6
                         Advisory Council Activitie s
       "Sec . 437 .
                                                                        Foreign Aid Progra m
       "(b) The Comptroller General of the United States, or any
    of his duly authorized representatives, shall have access, fo r        The Foreign Assistance and Related Programs Ap-
    the purpose of audit and examination, to any books, docu-
                                                                        propriations Act,   19 77/0, Public Law 91-194, approve d
    ments, papers, and records of each statutory advisory council ."
    (84 Stat . 172 )                                                    February    9, 1970, 84 Stat . 5, contains the usual GA O
                                                                        access to records provision :

                                                                           Sec 502 . No part of any appropriation contained in thi s
    Civil Service Commissio n                                           Act shall he used for expenses of the Inspector General, For-
    Revolving Fun d                                                     eign Assistance, after the expiration of the thirty-five da y
                                                                        period which begins on the date the General Accounting Of-
      The Act of December 30, 1969, Public Late 91-189 ,                fice or any committee of the Congress, or any duly authorize d
    83 Stat . 951, amended 5 U .S .C . 1304 relating to the             subcommittee thereof, charged with considering foreign as-
                                                                        sistance legislation, appropriations, or expenditures, has d o
    Civil Service Commission revolving fiord for m%estiga-
                                                                        livered to the Office of the Inspector General, Foreign As-
    tions and training and provided for periodic review s               sistance, a ucritteu request that it be furnished any document ,
    and reports by the Comptroller General as follows :                 paper, communication, audit, review, finding, recommenda -

                                                                                                                   EXHIBIT I

tion, report, or other material in the custody or _ontrol o f    Services Committees may issue subpenas requiring th e
the Inspector General, Foreign Assistance, relating to an y      production of any such records material to the Conip-
review, inspection, or audit arranged for, directed, or con -    trollsrGeneral'sstudy .
ducted by him, unless and until there has been furnishe d
                                                                   The results of the study shall be subtnitted to Con-
to the General Accounting Office or to such committee o r
subcommittee, as the case may be, (A) the document, paper ,      gress not later than December 31,      19 -10 .
communication, audit, review, finding, recommendation, re -        The provisions of section 408 of the act are a s
port, or other material so requested or (B) a certificatio n     fellows :
by the President, personally, that he has forbidden the fur-
                                                                    Sec . 408. (a) The Comptroller General of the Unite d
nishing thereof pursuant to such request and his reason fo r
so doing . (84 Stat . 13, 14 )                                   States (hereinafter in this section referred to as the `Comp -
                                                                 troller General') is authorized and directed, as soon as prac-
                                                                 ticable after the date of enactment of this section, to conduc t
                                                                 a study and review on a s,dective, representative basis o f
            COMMISSION ON GOVERNMENT                             the profits made by contractors and subcontractors on con -
                  PROCUREMEN T                                   tracts on which there is no formally advertised competitiv e
                                                                 bidding entered into by the Department of the Army, the De-
                                                                 partment of the Navy, the Department of the Air Force, th e
     The Act of November 26,       1969,   Public Law    91 -
                                                                 Coast Guard, and the National Aetonautics and Space Ad -
129 . 83    Stat . 269, provided for the establishment o f       ministration under the authority of chapter 137 of title 10 ,
a Commission on Government Procurement composed                  united States Code, and on contracts entered into by th e
of 12 members including the Comptroller Gen,°ral o f             Atomic Energy Commission to meet requirements of the
the United .Stabs as a statutory member . The provision          Department of Defense . The results of such study and re -
                                                                 view shall be submitted to the Congress as soon as practicable ,
respecting the Membership of the Commission             is a s
                                                                 but in no event later than December 31, 1970 .
follows :                                                           (b) Any contractor or subcontractor referred to in sub -
   Sec . 3 . (a) The Commission shall be composed of twelv e     section ia) of this section shall, upon the request of th e
members, consisting of (1) three members appointed by th e       Comptroller General, prepare and submit to the Genera l
President of the Senate, two from the Senate (who shall no t     Accounting Office such information maintained in the normal
be members of the same political party), and one from out -      course of business by such contractor as the Comptrolle r
side the Federal Government, (2) three members appointed         General determines necessary or appropriate in conductin g
by the Speaker of the House of Representatives, two fro m        any study and review authorized by subsection (a) of thi s
the House of Representatives (who shall not be members o f       section . Information required under this subsection shall be
the same political party), and one from outside the Federa l     submitted by a contractor or subcontractor in response to a
Government, (3) five members appointed by the Presiden t         written request made by the Comptroller General and shal l
of the United States, two from the executive branch of th e      be submitted in such form and detail as the Comptroller Gen-
Government and three from outside the Federal Govern-            eral may prescribe and shall be submitted within a reason -
ment, and (4) the Comptroller General of the United States .     able period of time .
 (83 Stat . 270 )                                                    (c) In order to determine the costs, including all type s
                                                                  of direct and indirect costs, of performing any contract o r
                                                                 subcontract referred to in subsection (a) of this section, an d
                                                                  to determine the profit, if any, realized under any such con -
             CONTRACTOR PROFIT STUDY                              tract or subcontract, either on a percentage of the cost basis ,
                                                                  percentage of sales basis, or a return on private capital em-
  Public Law 91-121, November 19, 1969, 83 Stat.                 ployed basis, the Comptroller General and authorized repre-
                                                                  sentatives of the General Accounting Once are authorized to
204, the military procurement authorization for 1970 ,
                                                                  audit and inspect and to snake copies of any books, accounts ,
requires the Comptroller General to conduct a stud y
                                                                  or other records of any such contractor or subcontractor .
and review of the profits made by contractors and sub -              (d) Upon the request of the Comptroller General, or an y
contractors on contracts on which there is no formall y           officer or employee designated by him, the Committee o n
advertised competitive bidding entered into by th e               Armed Services of the House of Representatives or the Com-
                                                                  mittee on Armed Services of the Senate may sign and issu e
Departments of Army . Navy, Air Force, the Coast
                                                                  subpenas requiring the production of such books, accounts, o r
Guard, NASA and on certain contracts entered int o                other records as may be material to the study and revie w
by the Atomic Energ} Commission to meet Defense                   carried out by the Comptroller General under this section .
                                                                     (e) Any disobedience to a subpena issued by the Com-
Department requirements
                                                                  mittee on Armed Services of the House of Representative s
     The Comptroller General is authorized to audit an d
                                                                  or the Committee on Armed Services of the Senate to carr y
 inspect any books, accounts, or other records of an y            out the provisions of this section shall be punishable as pro-
 contractor or subcontractor and upon request of th e            vided in section 102 of the Revised Statutes .
 Comptroller Gen, ral the House and Senate Armed                    (f) No book, account, or other record, or copy of any book ,

EXI- IMT     1

account, or record, of any contractor or subcontractor ob-         administrative operations fru the respective pr<igram activitie s
tained by or for the Comptroller General under authority o f       shall be ac-counted for in accordance with systems approve d
this section which is not necessary for determining the profit -   by the General Accounting Office :      * *
                                                                                                                 (83 Stat, 228 )
ability on any contract, as defined in subsection (a) of this
section, bcoveen such contractor or subcontractor and the De -
partment of Defense shall be available for examination, with -                     APPROPRIATIONS FOR GENERA L
out the consent of such contractor or subcontractor, by an y                            ACCOUNTING OFFIC E
individual other than a duly authorized officer or employee o f
the General Accounting Ogee ; and no officer or employee o f          The      Second Supplemental Appropriations Act ,
the General Accounting Office shall disclose, to any person
not authorized by the Comptroller General to receive such in -     1969,      Public Law 91-47, approved July 22, 1969, 8 3

formation, any information obtained under authority of thi s       Stat .    49,   provided an appropriation of      tiS2,114,000   fo r
section relating to cost, expense, or profitability on any non -   increased pay costs for GAO .         83 Stat . 65 '
defense business transaction of any contractor o r
subcontractor.                                                       The Le,islati%e Branch Appropriation Act, 1970 ,
   (g) The Comptroller General shall not disclose in an y          Public Law 91-1 .15, approved December 12, 1969, 8 3
report made by him to the Congress or to either Committe e         Stat . 338, appropriated the following amounts fo r
on Armed Services under authority of this section any confi-
                                                                   GAO :
dential information relating to tfre cost, expense, or profi t
of any contractor or subcontractor on any nondefense busi-                              G"I, at Acconrntin.g Offic e
ness transaction of such contractor or subcontractor . ( 8 3                              Salaries and Expense s
Stat_ 208, 209 )
                                                                       For necessary expenses of the General Accounting Ofce ,
                                                                   including not to exceed $2,0011 to be expended on the cer-
                                                                   tific tom of the Comptroller Genera( of the United States i n
             ACCOUNTING PROCEDURE S                                connection with special studies of Governmental financia l
                                                                   practices and pro(edures : services as authorized by 5 C .S .C .
                                                                   3109 but at rates for individuals not t:) exceed the per die m
Civil Service Retirement Fun d                                     rate equivalent to the rate for grade GS–18 : advance pay-
                                                                   ments in fnreien countries notwithstanding section 3648 . Re-
  `The Civil Service Retirement Amendments of 1969 .               vised Statutes, as amended i3l U .S .C- 529) ; henefits com-
Public Law 91-93, approved October 20, 1969, 83 Stat .             parAble w those payable under sections 91 l t 9 911`11" an d
136, concerning the refinancing of the Retiremen t                 912 a` of the Forei ,en Service Act of 1916, as amended '12 2
                                                                    US .C_ 1]36(9 ; . 1136111 : and 11571a ;, respectively) : an d
Fund, continued the requirement for the Comptrolle r
                                                                   under regulations prescribed by the C-npiroller General of
General to prescribe procedures as follows :
                                                                    the United Stater, rental of livh.G quarters in foreign coun-
                                                                    tries and travel benefits comparable with those which are no w
  "(2) The amounts so deducted and withheld, togethe r             or hereafter may be granted sirglc employees of the Agenc y
with the amounts so contributed, shall be deposited in th e         for International Development, including single Foreign Serv-
Treasury of the United States to the credit of the Fund unde r      ice personnel assigned to A-I_D - pn,iccts . by the Administ ra-
such procedures as the Comptroller General of the Unite d          tor of the Agency for International Development--or hi s
States stay prescribe. Deposits made by an employee or Mein -      designee— under the authority of Section 636ib ; r,f the For-
her also shall be credited to the Fund ." a * ° (83 Stat. 136 i     eign Assistance Act of 1961 ;Public Law 87-195 . 22 C .S_C .
                                                                   '39( 1b _,So3,000 .00,1, 8'iStat . 358

General Services Administratio n
Operation Fun d                                                                       SUPERGRADE POSITION S

   Independent Offices and Department of Housin g                      Oct  of December 30, 1969 . Public Laser 91-187, 8 3
and -7rban Development Appropriation Act,               1970 ,     Still . 850, mocrided the super,grade provisions of 5
Public Law   91-126, approved Eovernber          26, 1969, 8 3     U .S .C . 5108, to increase the uumber of pomumis in the
Stat .221 . contains the usual provision for approva l             G,,m, tal Accounting Office in grades GS-16 . GS-17 ,
by the Com j t roller General of the General Services A d-         and GS–18 by 26 from 6-1 to 9( . 183 Stat . 8_50 )
nunistration Operations Fund accounting system :

                                                                               DEBARRED BIDDER INFORMATIO N
   Funds available to General Services Administratiml fo r
administrative operations, in support of program activities ,
                                                                       Public Litt• fl1--5I, approved August 9, 1964 83 Stat .
shall be expended and accounted for, as a whole, through a
single fund : Provided, That costs and obligations for such        1+6 . amended the Contract Work I lours Standards Ac t


                                                                                                                           EXHIBIT     1

    to establish health and safey standaids for the con-                shall inform all aeennes of      the Goy-errunont thereof_" - 8 3
                                                                        Stat 9 ;   40l" .S .C_ ,33 d '
    struction industn and to provide for distribution of th e
    names of violators by the GAO as follows :

      "Sec .107 _                                                                                  CLAIM S

        "-;dr (1) If the Sec retary [of Labor determines on the rec-
    ord after an opportunity fur an agency hearing that, by re-         Waiver of Erroneous Payments----
    peated willful or grossly negligent yiulations of this Act .        Peace Corps Volunteer s
    it contractor or subcontractor has demonstrated that the pro -
    visions of subsections {bj and (c) are IOC effective to protec t       The Ast of October 211 .               Public Lay, '11–90
    the safety and health of his employees, the Secretary shal l        193 Stitt . 166, amending the Peace Coups :Act, extende d
     make a finding to that effect and shall, not sooner than thirt y   the :pct of October 21, 1968, 5 C .S .C . 558-1, concernin e
    days after giving notice of the findings to all interested per -
                                                                        ,vaivvt of erroteouS payments to readjustment an d
    sons, transutit the name of such contactor or subcontracto r
    to the Comptroller General .                                        subsistence alla,vatce pa%ments trade to yolunteere .
        " 1 2) The Contpholler General shall distribute each nam e      The :Act authorizeS the Comttt„ller General and th e
    so transmitted to hint to all agencies of the Government t'n-       Peace   Collis   in accordan e %,ith Standards picscribe d
     less the Secretary otherwise recommends, no contact subjec t
                                                                        b, the Comf ;ttolle, Gec<ral, to ;raise claims arisim;
     to this section shall he awarded to such contractor or sub -
                                                                        out of er; carcc>uS pannentS of readjustment and subsist-
     contractor or to any person in %hich such contactor o r
     subcontractor has a substantial interest until three years hav e   ence allowances to volunteers . 83 Stat . 16 6
     elapsed from the date the name is transmitted to the Comp -
     troller General . If, before the end of such three-year period ,   Preservation of Claim s
     the Secretary, after affording interested persons due notic e
     and opportunity for hearing, is satisfied that a contractor o r       ' Fite Act of June 23 . 1 070, Publ i c Lays `.11--287, 8 1
    subcontractor whose name hr has transnnittea to the Comp -          Stat . 3211 . to facilitate• the disposal of (ioycrnmcnt rec-
    troller General will thereafter comply responsibly ,rith the
                                                                        ord ; and abolish the joint 0mmateu oil the I)kposi-
     requirements of this section, he- shall terminate the applica-
                                                                        riot: of IEAc( utive Papers, included a terltnical amend-
     tion of the preceding sentence to such contractor or subcon-
                                                                        ment to -14 i' _S .C- 3309 n•latim, to ptesenation o f
     tractor (anti to any person in yfiich the contractor n r
    subcontractor has a substantial interest . ; and when the           claims of Government uutil settled in the G, netal Ac-
     Comptroller General is infor med of the Secretar's action he       cotntiu ;   Ofac.    {8-1 Stat . 321`


     EXPIRIT 2

             NUMBER OF AUDIT REPORTS ISSUED DURING                                                         THE FISCAL YEAR 1970                       1

                       	                                                                                                       t'l:mniiurr ;          agenc y
                                                                                         Total               t 'Ingress -      er Nirul6er+          Officials   I
                                                                                                                               t)t ( ellgte<_ i

     Civil departments and agencies :
          Civil departments                                                                  341                    88                  88                  16 5
          Independent agencies	                                                              181                    2 ,1                63                       94
          Multi-civil agencies	                                                                10                     2                  7                           1
          Legislative branch	                                                                  18                     2                  15                          1
          Judicial branch .-          .	                                                          S    -                                                             3

                                                                                             553                    116                173                  26 4

     Military' departments : s
          Department of Defense . . .                                                        113                     30                 45                       38
          Department of the Army . . . .                                                     157                     13                 36                   10 8
          Department of the Navy . . . .               . .. .                                 77                          7             24                       46
          Department of the Air Forc e                                                       l88                          3             20                   165

                                                                                             535                    ~ 3 - --~--         125                  35 7

     International activities °               -                                               64                                         19                      22
     Government-wide and oulltiageneg activities_- . . - - -                                     IL'                      ti               4
     Organizations outside the Federal Government -

             Total ,                                                                      1 . 168      - - - --~-   'ti                321                   644

                                                                             NOTE S

         'A detailed Iisti,19 of these rrpurts Is rout :+iued in ih :             the agencie, reprrt od on : :tut nthrrs 111— 11, afterted ,
      Appendis, Seefton III . suli>tantinllc identical --tons nh : nc ~ I            ' III,dudes rrpurts addre' —d to olllerc if if.,. Cili .li""' .
      More tilnn once iu the listing hate Beet counteil its one repor t              `Comprise•,, ngeirt~ addri—el hi Le+ds of departnlent5 o r
      A eompliatlon of finding_, and reeum;urndatio,— in these rt-por t             gencles, to oth :-r ollw i ald ;it di•pnrtmeut o agenre he.ulquarters.
      is contaltted in the Appendix . Section 1 .                                 I•i departni—t or .ige113- ollii hit ' at -ginnni            : oth :. r loca l
         -'Reports submitted to the Congn— are aildri—od ill ill ,                oifirrs, or la i onnnamlrig o!lierrs III mllltan- i—tallations -
      Pmsident of the senate and the tipeaker of the House of Repr o                 =Llcl udis    ;ll reports   ,it r• ii,%v of Eeunonlic  npporhomy       fre -
                                                                                               - ., nt 1, : r-gml rm ~a :l> of E—' o oir Ilpportuuitr .Anlrnd-
      srntatR es, bides tu'e sent ill the 1,l ctor, llure :m ,f ill e                n
      Iludget ; the Senate and House Comunittees ml apprnpriatior .s              Inenl—f I :Wi -
                                                                                     a limn±ilr       of iutaruntlnu ;ii . , .n-enunrn t -isidr . and nmit l
      the _Cennte :und the House Committee,' on Gacernmeut Oper a
      Ilens ; the appropriate h•giAntice conmlittee, iu the Senate an tI          q gar 3 tlI-If,ilies teitich ale 11,1-i —Jilrat,ly .
      the House ; Jl enl hers of the C 'ongr— from the dirt rie is iu :vhic l1        'tucl silos th— reports relating In C_s_ Iinamlal partiripntio u
      the aetIvittes reported are located : others in the Congress i t            in lutrrnilOouai organ izutio nx .
      requested : the Prosident of tit united States its aul,ropriatc


                                                                                                                                                                                EXHIBIT 3

                    TRANSPORTATION AIF DIT AND COLLECTIONS, FISCAL YEARS                                                                                                   1961-7 0

                                                                           Ili Iiz of lading vo
                                                                                                l       of ,,' rir,trpr is w+i
                          Fiscal Seat                                        umisportatiwi                 amountpu d
                                                                            1rqurs6; aoditrd                                            Au!ni,,-r            Anmun l

     1961	                                                          ---            6,984,1318             1, 289, 993, 041              03, 630           521, 11 `r, 735        $24, 070, 443
     1962	                                                                         6, 740 . 370           1, 185, 694. 946              78, 003            29. 39_' . 962         213. 139, 888
     196 :3	                                                                       7, 114,879             1, 320, 208,498               77 . 833 :3        13, 146 . :393         15. 959, 91 3
     1964	                                        _    -                           7,309,834              1 .332,550,920                73,231             11,362 .179            10 ,
     1965 . . . .                    .	                         .   . .            6,811,821              1 . 184,661,622               70,199             I0~102,405               x,657,360
     1966	                                                      .. ..              7,555, 366             1, 474, 220, 901              86 .970            10, 694, 257             8,494.45 3
     1967	                                                      ..                 8, 574, 043            1, 898, 670, 184             1 l3 . 010          14,043, 159            12 . 963, 74 4
     1968	                                                                         7,892, 789             2 .07J . 358, 128            112, 306            15, 474, 645           14 . f,81, 47 6
     1969	                                                                         9,562,242              2,543 .376,957               100,968             16,160 .947            14,167,12 6
     1970	                                                  .                      9,282,062              2, 374 . 9114 t8             108 . 499           17 . 708, :324         16, 314, 62 2

               Total	                                                              77, 828, 224 16, 679, 650, 645                      884, 669           159, 196, 006          154, 968, 48 9

        Li clads amounts collected i . GAO's adlnd feat ion of claims reported by other Government npcue -s -

                                                                                                                                                                                EXHIBIT 4

                     TRANSPORTATION CLAIMS SETTLED WRING                                                                              FISCAL `rE A RM                      1961-7 0

                                                                Ffseal yu                                                             N'u           .•(        Ani :                  An        u
                                                                                                                                            Lill-               ,-<,tn,I                   „c

     1961,	                                                                                                                             "9 .859           j10,10 -" 15()    5 ;,349,093
     1962	                                                                                                                              2(1,635             II, 149, 021      6 695,86 3
     1963	                                                                                                                              35 . 237            13, 013 . 9-12    6, 774, 930

     1964	                                                                                                                              22, 67 :1           19, 133, 508    61 . 985, 27 7
     1965	                --                                                                                                            28,959             26. 974, 9662'3, 493, 48 1
                                                                                                                                        91-1 . 41 :3       37 . 1'30. 274     3 , .140, 430
     1967 . . . .                                                                                                                          6, 133          86, 982, 712     83, 893, 43 S
     1968	                                                                                                                              22, 929             11 . :135 . 870   9,317, 11 8
     1969 . .                                                                                                                            1 :; .'1(12        18 . 879 . 201  16, 336, 71 3
     1970	                                                                                                                               13,725             14,764,351      13,053,245

                "Dotal	                                                                              -	                                2 .19 . 36_t       2.11), .169, 995       213 . 3,11, 58 7

         t   11,1 .11`8 allnrt anc        of +'j'658   I S2 till' N11111 :11)   airlift Caalvuu!d mot, mraL+ an ht, d bcftx i r - in,.iet



                             LIABILITIES, AND INVESTMENT, JUN 30, 1970


    Funds in U .S . "rreasurv :
        Appropriated funds	                                                            	       $4, 170, 51 4
        Deposit funds	                                                                             579,778
                                                                                                                 *4, 750. 2 1.12
    Cash on hand and in transit . . . .                                                                                1, 78 2
    Employees' travel advances	                                                                                      339, 71 7
    Accounts receivabl e                                                                                              51 . 360
    loventories of supplies . . . .                                                                                   64.01 0
    Furniture, fixtures, and equipment_                                                         2 , 649 . 58 7
         Less : Accumulated depreciation 	                                             . ...    1,481 .667

    Prepaid expense s

             Tutal assets	

                                                   LIABILITIES AND INVESTMEN T
    Accounts payable	                                                                                            T i . vg 6 . .11 :3
    Accrued liabilities	                                                                                               870, 81 6
    Funds held for others, principally employees ' tax and other payroll ded,.tcumv	                                   --       " -, s
    Liability for accrued annual leave of employees . . . .        . .                          5, 337 "O i l
         Less : Amount to be financed by future appropriations                                  ;, 357, l00

           Total liabilities	                                                                                     4, 747 .03 7
    Invesuncnt of U .S . Government !Exhibit 6i . -                                                               I, 639, 561 1

             Total liabilities and investment 	                                                                   6 . .386 . 60 6


                                                                                                                               EXIIII31T G

                                  I INVESTMENT OF U .S . GOVERNMENT,
                                    FISCAL YEAR ENDED JUNE 30, 1970

     Balance, Juh• 1, 1469 . .                                                                                                   $2 . 310, 7911
     Add :
           Adjustment for annual leave of employees at July I, 190, to be financed by future appro -
             priations                                                                                                            3 . £137 . 42 9

     Adjusted balance, July 1, 1969 . .                                                                                           1,472,63 1
     Add :
           Appropriation for salaries and expenses, 1970	                                               570, 273, -12 3
           Reimbursements	                                                                                    95,57 7
           Restoration of funds by the Treasury to pay for increses in prior }car's orders .                   17, 527
                                                                                                                                 70 .386,52 7

                 Total	                                                                                                          71 .859, 15 8
     Deduct :
         Operating expenses, 1970 (Exhibit 7j . . .                                                      71 . 740.0-59
         Less : Amount of annual leave earned by employees and included in opera Ling expenses, Muc h
           will be financed by future appropiations	                                                      1 . 520 .470
                                                                                                                                 70, 219, 58 9

               Balance, June 30, 1970 . .                                                                                          1, 639,56 9

     Composition of balances :
        Invesnnent in :                                                                                     jz "   ;, ! ;k'r      j—, 50, !B." u
             Inventories of supplies	                                                        	               j87 . 864                X64, 01 0
             Furniture, fixtures, and equipment	                                         	                   833, 303              1, 161,92 0
        Funds reserved for payment of un611ed orders . .                                                     546, 464                410, 63 9

                 Totals	                                                                                  1,472, 631               1 . 639, 569

                                                                                                                                           13 7


                        FOR THE FISCAL YEAR ENDED JUNE 30, 197 0

                                                                                    Total            3Ia i-          t: :ll{!Ill v,          Tavel               1)Ihe r
                                                                                                                       hr .irlit s

    Office of the Comptroller General	                               	            5675, 241        5547, 652        $40- 803              ti13, 817           $72, 116 9
    Office of the General Counsel . . . ._                                      3 . 201, 414     2 . 796,479        210,889                  6, Ill 1         187,03 3
    Office of Administrative Services	                                          2, 362,865       L 721,843          209, 513                 8,941            422,56 8
    Office of Personnel Management 	                       -                        819,401          665, 940        4-1,396                27, 359             81, 70 6
    Office of Policy and Special Studies	                        .       .      2,049 . 394      1, 691, 354        132 . tit               33, 513           191, 88 5
    Civil Division . .                                                         10, 578 . 843     9 . 197,000        710. 535              258, 351            -112,957
    Defense Division	                                            	              5, 752, 334      4 . 951, 978       384, 977              165 . 553           249, 82 6
    International Division :
         Washington, D .C	                                                     2,680, 647       2,212,082             168,755             192 .003             107,807
         European Branch	                                                      1, 727 . 407     I, 0 .;2, 099         124, 102            231 . 859           316,347
         Far Fast Branch . . .                                                 2,062, 187       1,150 .643            220, 773            362, 023             328, 748
    Field Operations Division .                                               29, 456, 637     23, 653, 575       1 . 831 . 787        2, 846 . 628         1, i24,647
    Clainis Division	                                                          1, 655,321       1, 448, 728           110, 761               1 . 459            14,37 0
    Transportation Division	                                                   8,471 .483       7, 561, 459           575,638              lit, 622           .317, 76 4
    Data Processing Center	                                                       246, 985         116 .773             9, 090                   601           120,52 1

            Total	                                                            71, 740. 059     :58, 767 . 605    4, 774, 863           4 . 168 . 6, 13     4, 029, 148

    Reconciliation of accrued expenditures for year with total expenses :
        Accrued expenditures	                                                                                                                            x70, .522 ,
        Add :
             Increase in accrued annual leave liability -
                  For the leave year ending January 10,1970 	                                                                              5391 .43 3
                  Front end of leave year to June 30, 1970 	              -                                                           ' 1 1 129, 03 5
                                                                                                                                         	                  1, 520, 47 0
              Depreciation of furniture, fixtures, and equipment . . . .                                                                                       112,960
              Decrease in inventory of supplies 	                                                                                                               23,854
          Deduct :
              Purchases of furniture, fixtures, and equipment . . . .                                                                                       -469 . 57 8

                     Operating expenses	                                                                                                                    1 .740,05 9

          This adi-0ii-i -, medv heeause of tr change in the den fur computing till tfahflip' tot arcturd aunu :d len :e fwn'l Ow end of thr 1,o' 1-r to the rn d
    of the flseal yen ,


                                                                                                                           EXHIBIT 8


    Sources of funds :
        Appropriation for salaries and expenses, 1970, 	                                                                   *7(!,'_'73, 42 3
        Reimbursements	                                                                                                            95, 57 7
        Funds carried over from preceding year to pay for orders placed in that ycu but filled in th e
           current year	                                                                                   X546,46- 1
        Restoration of funds preciously returned to Treasury to finance increases in cost of prio r
           year's orders	                                                                                        17,52 7
                                                                                                                   ---          563, 99 1
         Receipts for audit services .- . .                                                                                     539 .088
         Other receipts	                                                                                                         13,33 4

                Total	                                                                                                      71 . 485, 41 3

    Application of funds :
         Accrued expenditures :
             Expenses	                                                                                   70,052.77 5
              Purchase of furniture , fixtures,and equipment	                                               569,578
                                                                                                                            70, 522, 35 3
         Funds reserved at the yearend for payment of unfilled orders . . . .                                                   410,63 9
         Receipts deposited in U .S . Treasure . .                                                                              552, 42 1

                Total	               -                          .. ..                      . .    . .      . .              71,485,41 3

                                                                                                                                     13 9

   1'he General Acrotn ting' Otinv was, wated by the liudit' t             Chumc wttlement .- -Smiling claim . h % and against th e
and Accounting Act, 1921 . and is located in tiie legi ;la t-et-       Federal Government_
branch of the Federal Government . Sint'e its estahlisllilwnt .            Dent c:diecG~,rr . - Suprrinwinlim-, tlsc rernrery of debt s
Ow n-sponsibil i ties and authorities 4 tile Office has, hren          na•ityg to the (i„renunent and collecting amounts clue th e
broadened by various acts of Congress including th e                    G --rionent oil adjudit-ate•d rlainiiand amounti reported ltd•
ernmrnt Corpotatiun Control Act of 1945, and tilt Account-              G .nerimwn! departments and aaencies as uncollertihl e
ir._~• and Auditing Act ~4 1950 .                                       through uo :m ., available to them .
                                                                           Le=gal :i-, . .   Rendering decisions at the request of head s
Functions                                                              al depa totrnn and agcnn,•s and disbursing and rertityin g
                                                                        "films on the lecalin' of proposed payments or transactions .
   Under the direction of the Cou.ptroller General of ti n              \V hill decisions are binding ,It the executive ht:tuch : provid-
United States, the. General Accounting Office assists th e             ing legal analysis and service on pending legislation before th e
Con't!ress in tair%ing out its constitutional icsponsihilitie s        Congress and interpreting existing legislation on matters in-
with respect to the expenditure and application of publi c              eokin doubt cone crning tilt- authoriti- of the heads 1-4 Gor-
fmids by performing the foLimeing functions .                           crmnent ag, inies t,, underiakv certain proposed actions .
   Aiteliting .--Auditing the artivities, financial transactions ,         Spe, iee ; assistance to file Crnegrc,i .- Makin,- special audits ,
and accounts of the Federal Covvi-nnient, except as othrrtvis •        surerand incc-sti,ations at th,• rryuc•st ,d rongrrssiona L
exempt by lane, and reporting to the Congress and the agen-             rommitt,_cs and M,--bers of Orngns : turni,hin i informatio n
cies file results of audit %voik .                                     in reply to inquiries : assigning peronnet to assist 00Igi1(-
   Accollnti/I g .- .--Prescribing principle;, standards, and r t- -   sion ;l committees : and tes(ifving before congressiona l
laa•d requirements 1~-,i aecountirn-, : c_ooprraiing in tile_ der;-    c-ouunittees .
—merit and improcenlent of agency accounting and financia l
lo                                                                         Record ; managrment and ter: ices .--Prescii ing and servic-
management systems ; and rr6mving and approving agenc y                 ing disbursin", . 'fficrrs' ac—unis, vouchers . certificates, an d
accounting s~stenls.                                                    related papets until disposed of as provided by law .


                                             ~ ;v ~ ED    7A7—S                   u :t=a:61      —._ O :5'N' ', .':G           'tS, F a. c_

                                                                 COMPTROLLER GENERA L
                                                                        OF TH E
                                                                    UNITED STATES                                          ~
                                                               ASSISTANT COMPTROLLER GENERA L
                                                                           OF THE                                      I
                                                                        UNITED STATES

                                                                                                                     SPECIAL ASSISTANT                    I
                                               PROGRAM            I                                                       TO THE                                  INFORMATIO N
          COMPTIROLLER GGE ERAL          I PLANNING STAF F                                                                                                    i     OFFICE R
          OF THE UNITED STATES                                                                                     COMPTROLLER GENERAL
                                                                                                                   CF THE UNITED STATES                       f
                                    —~   I

                                                                          "         —         vFFECE S

                      OFFICE O F                      OFFICE OF                                                     OFFICE 0   'I                     OFFICE O F
                    ADMINISTRATIV E                   PERSONNEL !                                                  THE GENERAL i                      POLICY AN D
                  I    5ERVICE S                     MANAGEMEN_                                                      COUNSEL                        SPECIAL STUDI E

                                                                      -       :T3             Ok i; i`a4CN ~

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                 JI-I IOti                     cr,                        10' 1                       1, S     o                                                         IS
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            OVERSEAS OFFICE S                                                                                                                     FIELD OFFICE S

          FRANKFURT, GERMAN Y                                                                                                      ATLANTA, GA .       LOS ANGELES, CALIF .
            NEW DELHI, INDI A                                                                                                      BOSTON, MASS .      NEW YORK, N .Y .
                                                                                                                                   CHICAGO, ILL .      NORFOLK, VA .
      i HONOLULU, HAWAI I                                                                                                          CINCINNATI,OHIO PHILADELPHIA, PA.
          SAIGON, VIETNA M                                                                                                         DALLAS, TE%..       SAN FRANCISCO, CALIF .
          MANILA, PHILIPPINES                                                                                                      DENVER, COLO .      SEATTLE, WASH .
                                                                                                                                   DETROIT, MICH .     WASHINGTON, D, C .
                                                                                                                                   KANSAS CITY .MO .

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     SAN i•RA                                                             ILL .                                          H`L AQES'~H1A
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                       DENVER                                                                            OHtO
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                                               KANSAS CITY                            apolts                                             ~'      .. R
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                         COLO .       !                                                 C9                      w•
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                                                                                                                              F :. A.

                                                                       REGIONAL OFFIC E
                                                                o      SUBOFFIC E
                                                                       MILITARY AUDIT STAFF

                                                                                                                                                                  JULY 1970


                                                                                                                EXAMIT 1 2


                              MAIN OFFICE                             St . Paul Suboffic e
                                                                      Room 1407                               612-725-7844
                                                 Telephone number     U .S . Post Office and Custom Hous e
    U .S . General Accounting Office 202-386 4- ext .
                                                                      St . Paul, Minn. 55 10 1
       Building-                       (FTS Infortnatio n
    -141 G Street, NW .                Operator ext. 6095 )         Cincinnat i
    Washington, D .C . 20548                                        8112 Federal Office Building              513-68 .1-210 7
                                                                    5th and -Main Street s
                  INTERNATIONAL DIVISION                            Cincinnati, Ohio 45202

                             EUROPEAN BRANC H                         Dayton Subofjc e
                                                                      -ICLAGA, Building 11, Room              513--255-4505
    `Io U .S . Consulate General             770-731, ext. 326          238, Area B
    Platenstrasse 7                                                   Wright-Patterson Air Force Base ,
    Frankfurt/Main, German y                                            Ohio 4543 3
      New Delhi Offic e
      U.S. Embassy                                                    Army Audit Stag
      Shanti Path                                                     Fort Benjamin Harrison                  317-546--287 0
      Chanakyapuri                                                    Indianapolis, Ind . 1621 6
      New Delhi, India
                                                                    Dalla s
                             FAR EAST BRANC H                       Room 500                                  21-1-749-343 7
    Room 619                                 546-547 3              1512 Commerce Stree t
    1833 Kalakaua Avenue                                            Dallas, Tex . 7520 1
    Honolulu, Hawaii 9681 5
                                                                      New Orlean+ Subo,rftc e
      Manila Office                                                   Room T--80. 10, Federal        Olficc   50-1-527-611 5
      Sarmlento Building           -                                    Building
      6782 Ayala Avenu e                                              701 Loyola Avenu e
      Makati, Philippine s                                            Ne,, Orleans, La . 7011 -3
      Saigon Office                                                 Denve r
      124-B Truong-Minh Gian g                                      7014 Federal Building                     303-297-462 1
      Saigon, Republic of Vietnam            Tiger 422 6            1961 Stout Stree t
                                                                    Denver, Colo . 8020 2
                                                                      Air Force Audit Staf
                             REGIONAL OFFICE S
                                                                      3800 York Street                        303-825-441 1
    Atlant a
                                                                      Denver, Col. . 8020 5
    Ronin 204, 161 Peachur ce Street NE .    404-526-687 2
    Atlanta, Ga . 3030 3                                            Detroi t
                                                                    Roon : 2006, Washington Boulevard         313-226-604 4
    Bosto n
    Room 1903: John F. Kennedy Fed- 617-223--653 6
      cral Building                                                 234 State Stree t
    Government Center                                               Detroit, Mich. 4822 6
    Boston, -lass : 0220 3                                            Cleveland Subofflce
    Chicag o                                                          Room 2933                               216-522-4892
    Room 403, Custom House Building          312-353-617 4            New Federal Office Buildin g
    610 South Canal Stree t                                           1240 East Ninth Stree t
    Chicago, I11, 60607                                               Cleveland, Ohio 44199


    EXHIBIT 1 2
           Na!yAudit Staff                                     -   Philadelphia                                           -
           R om 2933                          2161-522-4892        502 U .S . Custom House         215-597-433 3
           New Federal Office Building                             Second and Chestnut Street s
           1240 Last Ninth Street                                  Philadelphia, Pa . 1910 6
           Cleveland, Ohio 44199                                   San FraRCISC O
      Kansas City                                                  143 Federal Office Building     415-556-620 0
      1800 Federal Office Building            816-374--5056        50 Fulton Street
      911 Walnut Street                                            San Francisco . Calif. 9410 2
      Kansas City,'Mo . 64106                                      Seattl e
           St . Louis Suboffice                                    3086 Federal Office Building    206-583-535 6
           Room 1740, 1520 Market    Street   314-6221121          909 First Avenue
           3t . Louis . Mo . 63103                                 Seattle, Wash . 98104
      Los Angeles                                                    Portland Suboffice
      Room 7054, Federal Building             213 -688--3813         Parker Building, 2d Floor     503-226-147 4
      300 North LosAngeles Street                                    527 Last Burnsid e
      Los Angeles, Calif . 90012                                     Portland, Oreg . 9721 4
       New York                                                    Washingto n
       26 Federal Plaza_, Room 4112           212-264-0730         Penn Park Building              703-557-892 0
       New York, N.Y . 10007                                       803 Nest Broad Stree t
                                                                   Falls Church, Va . 22046
       Room 226                               703-627-726 7
       870 Ncrth Military Highway
       Norfolk, V— 23502

     144                                                                                                           ~~ f


                                 A                                  Air Force, Department of the :
                                                                      Accounting systems design, 3, 3 8
    Access to records :                                               ADP activities, 1 2
      Denial of, 13, 6 9                                              Audit reports issued, (See Defense, Department of . )
      Legislation enacted during F .Y. 1970 affecting, 129, 130 ,     Combat readiness, 10, 83
         13 1                                                         Contractor profit study, 13 1
      Pending legislation concerning, 1 4                             Decisions involving, 1 13, 114, 11 5
    Accounting principles and standards :                             International activities, 12, 9 5
      Prescribed by the Comptroller General, 36, 37, 3 8              Military aircraft, maintenance and modifications of, 80
      Review and approval of statements of, 3, 5, 35, 37, 3 8         Military pay and allowances, 82
    Accounting systems :                                              Research and development, 7 9
      Development of, 3, 37, 3 8                                      Supply management, 7 9
      GAO's annual report to the Congress on, 3 5                     Transportation matters, administration of, 84
      Submission, review, and approval of designs, and opera-       American Institute for Free Labor Development, 12, 9 4
            tion of, 3, 5, 35, 36, 37, 38, 4 2                      Annual Report, GAO, change in format of, 5
         Air Force, Department of the, 3, 38                        Architect of the Capitol, 7 0
         Army, Department of the, 3, 38
                                                                    Army Corps of Engineers (civil functions), 23, 28, 29, 47 ,
         Civil Service Commission, 6 2
                                                                      54, 11 4
         Consumer Protection and Environmental Health Serv-
                                                                    Army, Department of the :
            ice, 4 3                                                  Accounting systems design, 3 1 3 8
         Defense, Department of the, 3, 35, 3 8
                                                                      Audit reports issued . (See Defense, Department of . )
         Food and Drug Administration, 43
                                                                      Autornatic data processing, 1 2
         General Services Administration, 4 3
                                                                      Combat readiness, 10, 83
         Health, Education, and Welfare, Department of, 5 0
                                                                      Contractor profit study, 13 1
         Mint, Bureau of the, 4 3                                     Decisions involving, 111, 113, 11 5
         National Bureau of Standards, 49
                                                                      Facilities and construction . 8 0
         Navy, Department of the, 3, 3 8
                                                                       International activities, 95
         Peace Corps, 96
                                                                      Legislative recommendations, 2 6
         Treasury, Department of the, 60
                                                                       :Manpower utilization, 8 2
         U .S . Coast Guard, 5 9                                      Military aircraft, maintenance and modifications of, 8 1
         Veterans Administration, 43, 6 8
                                                                        Military pay and allowances, 8 2
    Accounts of accountable officers, audit and settlement of ,
                                                                       Procurement, 1 5
    Accrual accounting . in the Federal Government, 35, 36, 3 7     Assistance to the agencies, 35, 102, 10 7
    Actuarial staff of GAO, 8                                       Assistance to the Congress. (See Congress, assistance to the . )
    Agencies, assistance to, 35, 102, 10 7                          Assistant Comptroller General, new, 2, 10 9
    Agency for International Development, 12, 90, 91, 9 3           Atomic Energy Commission :
    Agricultural Research Service, 1 0                                Argonne National Laboratory, 2, 61, 6 2
    Agricultural Stabilization and Conservation Service, 4 6          Audit reports issued, 13, 6 1
    Agriculture, Department of :                                       Contractor profit study, 13 1
      Agricultural Research Service . 1 0                              GAO %vo k in the agency, 6 1
      Agricultural Stabilization and Conservation Service, 4 6         Gaseous diffusion plants, 17, 20, 6 1
      Audit reports issued, 4 5                                        Janus reactor complex, 2, 61, 6 2
      Commodity Credit Corporation, 4 6                                Research and development, 26, 7 9
       Consumer and Marketing Service, 1, 10, 4 5                      Transportation field, assistance in the, 10 3
       Decisions involving, 11 0                                       Uranium enrichment enterprise, 2, 17, 20, 61, 6 2
       Economic Opportunity programs, 45, 67                        Audit reports :
       Fartners Home Administration, 28, 45, 47, 6 7                   List of, 5    _
       Federal Crop Insurance Corporation, 46                         Number issued, 1, 134
       Foreign programs of, 87, 90, 9 2                                  Civil, 4 5
       GAO work in the Department, 45                                    Defense, 73, 7 4
       Legislative recommendations, 21, 28, 4 6                           International, 8 7
       Soil Conservation Service, 47                                      Legislative, 7 0
      Transportation charges, JFMIP study of, 103                        Multi-civil-agency, 69


              INDEX      -

              Audit reports----Continue d                                     Civil Service Commission, U .S .—Continue d
                Number issued—Continued                                          Personnel management evaluation system, 12 5
                   Organizations outside the Federal Government, 7 0             Retirement Fund, 31, 132                                   -
                   Transportation management reviews, 10 1                       Revolving Fluid, 13 0
                   Vietnam, relating to programs and activities being con -   Claims :
                      ducted in, 8 8                                             Against the United States,4, 105
                To Congress, 1, 9, 13 4                                          By the United States, 4, 10 6
              Audit work :                                                       Legislation enacted during F .Y . 1970 affecting, 13 3
                Civil operations and programs, 4 5                               Settlements :
                Contracts, 7 4                                                      General, -1, 106
                Defense operations aad programs ; 7 3                               "Lan a portalion, .1, 99, 1 :3 5
                International operations and programs, 8 7                       Waiver of, 13, 106, 107, 13 3
                Legislation enacted during F.Y. 1970 affecting, 129           Coast Guard, U .S ., 58, 59, 113, 13 1
                Legislative and judicial branches, 21, 7 0                    Combat readiness of military units and related supply sup -
                Multi-civil-agency reviews, 6 9                                  port, 8 3
                Organizations outside the Federal Government, 7 0             Comnterce, Department of :
                Other civil departments and agencies, 6 8                        Accounting system, -1 9
                Transportation management reviews, 10 1                          Audit reports, -19                                             _
              Automatic data . processing equipment :                            Economic Development Administration, 2 9
                                                                                 Environmental Science Services Administration, 4 9
    :           Acquisition and use, 41 -
                                                                                 Financial management improvement program, participa-
                    Agency for International Development, 9 1
                    Air Force, Department of the, 1 2                                tion in, 39
                                                                                 GAO work in the Department, 4 9
                    Army, Department of the, 1 2
                                                                                  Hearings on contracts of, 1 9
                    Defense, Department of, 1 2
                                                                                  International activities, 8 7
                    District of Columbia Government, 6 3
                   General Services Administration, 6 4                           Legislative recommendation, 2 9
                                                                                 Maritime Administration, 4 9
                    House of Representatix?es, 1 5
                                                                                  Multi-civil-agency review, 6 9
                    Internal Revenue Service, 6 1
                                                                                  National Bu reau of Standards, 4 9
                    Rfint, Bureau of the, 6 0
                                                                                  Transportation charges, JFMIP study of, 10 3
                    National Aeronautics and Space Administration, 6 6
                                                                               Commission on Government Procurement ; 18, 13 1
                    Davy Aviation Supply Office, 7 8
                                                                               Commodity Credit Corporation, 4 2
                    State, Department of, 9 1
                                                                               Communications, administration of 8 3
                 Training programs pertaining to, 42, 123, 12 4
                                                                               Community Action Program, 6 7
                                                                               Comptroller of the Currency, Office of the, 6 1
                                            8                                  Concentrated Employment program, 56, 6 7
                                                                               Congress, assistance to the, 1, 2, 7
              Balance-of-payments position, U .S ., 10, 9 1
                                                                                  Actuarial staff of GAO . 8
        : .   Bid protests, 'I l l
                                                                                  Assignments of staff to committees, 1, 2, 1 5
              Bonneville Prover Administration, 23
                                                                                  Audits of House and Senate activities, 21, 7 0
              Budget, Bureau of the :
                                                                                  GAO liaison with Congress, 9
                Financial management in the Federal Government, :3, 37 ,          Hearings, testimony of GAO representatives, 2, 1 7
                   39, 103                                                        Legal and legislative matters, 1 6
                Recommendations to, 7 0                                           Legislation, pending :
                Reports to, 4,11 5                                                   Reports on, 2, 1 3
                Transportation charges, JFMIP study of, 39, 10 3                     Testimony on, 1 8
                Uniform cost accounting standards, 3, 11, 18, 20, 7 7             Legislation, recommendations for, 2 1
              Budget Concepts, President's Commission on, 3 6                     Reports to, 1, 2 1 7 1 9, 11, 13, 14, 15, 115, 13 4
              Bureaus . (See other part of name . )                               Systems analysis, use of in GAO, 8
                                                                               Consumer and Marketing Service, 1, 10, -1 5
                                             C                                 Consmner Protection and Environmental Health Service, 4 3
                                                                               Contract audits, 7 4
               Capitol Guide Force, 7 0                                        Cnn(ractor profit study. 13 1
               Career development, 4, 12 2                                     Corps of Engineers See Army Corps of Engineers. )
               Civilian pay and allowances, 81, 11 0                           Cost accounting standards, uniform, 3, 11, 18, 20, 7 7
               Civil Service Commission, U .S . :                              Cost reduction and management improvement program, 10, 6 9
                 Accounting systems design, 6 2                                Customs, Bureau of, 43, 60
                 ADP training programs, 42, 123, 12 4
                 Audit reports issued, 62                                                                      D
                 Decisions involving, 1 1 0
                 Pinancial management in the Federal Government, 3, 39         Debt collections, .1, 100, 102, 106, 107, 13 5
                                                                               Decisions, 4, 109, 111, 115, 116
                 GAO work in the agency, 6 2

               146                                                                                                                                  J

                                                                                                                           INDE X

     Defense Communications Agency, 8 4                                Farmers Home Administration, 28, 45,4 71, 6 7
     Defense Contract :Audit Agency, 7 .1                              Federal -Aviation Administration, 58, 59, 11 0
     Defense ; Department of. (See also Air Force, Army, and           Federal Columbia River Power System, 2 3
          Navy. )                                                      Federal Credit Union Administration, 12 9
       Accounting systems designs, 3, 35, 3 8                          Federal Crop Insurance Corporation, 4 6
       Accrual accounting, 3 7                                         Federal Deposit Insurance Corporation, 31, 68, 6 9
       ADP activities, 1 2                                             Federal Highway :Administration, 25, 58, 5 9
        Audit reports issued, 73, 7 .1, 13 4                           Federal Home Loan Bank Board, 6 9
       Combat readiness of military units and related suppl y          Federal home loan hanks, 6 9
          support, 8 3                                                 Federal Housing Administration, 47, 5 3
        Communications, administration of, 8 3                         Federal National Mortgage -Association, 53, 6 1
        Contract audits, 7-1                                           Federal Power Program, 2 2
        Contractor profit study, 13 1                                  Federal Prison Industries, Inc ., 5 6
        Cost reduction program, 1 0                                    Federal Railroad :Administration, 59
        Decisions involving, 11 2                                      Federal Savings and Loan Insurance Corporation, 6 9
        Facilities and construction, 8 0                               Federal Supply Service, 6 4
        GAO work in the Department, 7 3                                Federal Water Quality Administ r ation, 1, 24, 25, 5 3
        Hearings on, 2 0                                               Field offices, CIAO, 141, 14 2
        Internal auditing, 43                                          Financial management in the Federal Government :
        International activities, 12, 13, 87, 9t, 9 5                     Congressional interest in, 3 5
        Nlanpower utilization, 8 2                                        GAO assistance to agencies for improvement in, 3, 36, 42
        Military, aircraft, maintenance and modifications of, 8 0         Joint Financial Management Improvement Program, 3, 36 ,
        Military assistance programs, 9 5                                    39, if 1, 10 3
        Other programs, administration of, 8 4                            Reports on :
        Pay and allowances :                                                 Consumer Protection and Environmental Health Service ,
          Civilian, 8 1                                                         -1 3
           Military, 13, 81, 11 3                                            Food and Drug Administration, 4 3
        Procurement, 2, 15, 74, 75, 7 7                                      General Services Administration, 4 3
        Research and development, 14, 26, 7 8                                .Hint, Bureau of the, 4 3
        Supply management, 79, 83                                            Trust Territory of the Pacific Islands, 55
        Training courses, 12 4                                               L .S . Coast Guard, 5 9
        Transportation matters, administration of, 84, 10 1                  L .S . Information Agency, 9 6
        Transportation suits involving, 4, 10 2                              Veterans Administration, 4 3
        Uniform cost accounting standards, 3, 11, 18, 20,7 7              Reviews of, 4 3
        Weapons systems, 2, 8, 10, 20, 26, 73, 75, 79, 9 5              Financial savings attributable to the work of GAO, 5
    - Department . (See other part of name . )                          Financial statements, confidential (Senate Rule 4-1), 9
      Directory of the U .S . General Accounting Office, 143            Financial statements of GAO, 136, 137, 138, 13 9
      Disabled American Veterans National Headquarters, 7 0             Findings and recommendations, compilation of GAO, 5                -
     District of Columbia Government, 12, 18, 19, 39, 6 3               Food and Agriculture Organization of the United Nations, 2 ,
                                     E                                  Food and Drug Administration, 43, 5 0
                                                                        Food for Peace. 90
     Economic Development . Administration, 2 9                         Food inspection activities, 1, 8 4
     Economic Opportunity, Office of, 56 ; 6 7
                                                                        Foreign Affairs Community Agencies, 9 1
     Economic Opportunity, programs, 28, .45, 50, 67, 130
                                                                        Foreign assistance programs, 87, 8 9
     Edification assistance programs, 13 0
                                                                        Foreign currency, 90, 9 4
     Education, Office of, 50, 5 1
     Educator-consultants, 11 9                                         Foreign Exchange Operations Fund, 90
     Electronic data processing . (See Automatic data processing . )    Functions and organizations of GAO, 140, 14 1
     Employees . (See Personnel . )
     Engraving and Printing, Bureau of, 60                                                           G
    :Environmental Science Services Administration, 46
                                                                       Gaseous diffusion plants, 17, 20, 6 1
     European Branch, 87, 143
     Executive Office of the President, 8 4                            General Accounting Office :
     Expenses andstalling, GAO, 4, 13 2                                  Actuarial staff, 8
     Export-Import Bcnk of the United States, 87, 9 7                    Annual report, change in format of, 5
                                                                         Appropriations, legislation enacted during F .Y. 1970 ,
                                                                           affecting, 13 2
                                                                         Data Processing Center, 9
     Facilities and construction, military, 8 0                          Directory of, 14 3
     Far East Branch, 87, 14 3                                           Expenses and staffing, 4, 132                                 -
     Farnt Credit Administration, 68, 69                                 Financial statements of, 136, 137, 138, 139


    INDEX _

    General Accounting Office —Continued                            Housing and Urban Development, Department of—Con .
      Findings and recommendations for improving Governmen t         Financial management improvement program, participa-
         operations, report on, 5       -                               tion in, 39
      Functions and organization; 140 ; 141 -                        GAO work in the Department, 5 2
         Chart, 14 1                                                  Internal auditing, 43
         `fait of regional offices, 142                               Legislative recommendation, 2 2
      Legislation enacted during F .Y . 1970 relating to the
         work of GAO, 129
      Mainual for Guidance of Federal Agencies, 3 6
      Newsletter, 9                                                 Immigration and Naturalization Service, 56
    General Counsel, new, 2, 10 9                                   Indian Affairs, Bureau of, 55, 5 6
    General Services Administration :                               Indian ILealth Service, 5 0
      Accounting system, 4 3                                        Interagency and trade programs, 9 0
      Audit reports issued, 64                                      Inter-American Development Bank, 9 3
      Automatic data processing, 6 4                                Intergovernmental programs and operations, 4 0
      Decisions involving, 112, 11 4                                Interior, Deparunent of the :
      Federal Supply Service, 6 4                                     Audit reports issued, 5 3
      GAO work in the agency, 6 3                                     Bonneville Power Administration, 2 3
      General Supply Fund, 3 1                                        Cost reduction program, 1 0
      Legislative recommendation, 2 1                                 Decisions involving, 11 4
      Operating Fund, 182                                             Federal Water Quality Administration, 11, 24, 25, 5 3
      Transportation charges, JFMIP study of, 39, 10 3                Financial management improvement program, participa-
    General Supply Fund, 3 1                                             tion in, 39
    Geological Survey, 5 .5                                           GAO work in the Department, 5 3
    Got-gas Memorial Institute of Tropical and Preventive Medi-       Geological Sur v ey, 5 5
      cine, Inc ., 7 0                                                 Indian Affairs, Bureau of, :55, 5 6
    Government Printing Office, 27, 7 0                                Indian welfare, 5 0
    Government Procurement, Commission on, 110, 111, 117 ,            Land management and natural resources, 5 4
      13 1                                                             Land Management, Bureau of, 2, 24 1 3 4
    Government Services, Inc ., 7 0                                   Mapping, 55
    Grants-in-aid to State and local governments, 37, 39, 40, 4 1      Mines, Bureau of, 5 4
    Guaranteed Student Loan Program, 19, 5 1                          National Park Service, 2 3
                                                                       Reclamation, Bureau of, 23, 47, 48, 54, 11 4
                                                                      Trust Territory of the Pacific Islands, 55, 13 0
                                  H                                    Water pollution control, 2, 10, 24, 25, 5 3
    Health, Education, and Welfare, Department of :                    Water resources projects, 23, 28, 47, 48, 5 4
      Accounting system, 43, 5 0                                    Internal auditing, 4, 41, 43
      Audit reports issued, 5 0                                       Customs, Bureau of, 43, 60
      Consumer Protection and Environmental Health Service ,           Defense, Department of, 4 3
        43                                                            Housing . and Urban Development, Department of, 4 3
      Decisions involving, 11 4                                        Internal Revenue Service, 43, 6 0
      Education, Office of, 50, 5 1                                    International organizations, 9 2
    - Food and Drug Administration, 43, 5 0                            National Science Foundation, 6 6
      GAO work in the Department, 5 0                                  Railroad Retirement Board, 43
      Indian Health Service, Health Services and Mental Healt h        State, Department oL 43 1 9 6
        Administration, 50-       -     -                              Treasury, Department of the, 43, 6 0
      Medicaid, 1, 18, 5 7                                            Veterans Administration, 43, 68
      Medicare, III, 52, 6 8                                        Internal Revenue Service, 30, -13, 60, 61, 10 2
      National Instir_ttes of Health, 5 0                           Inn-rational activities, 2, 8 7
      Social Security Administration, 5 2                             Agency for International Development, 12, 90, 91, 9 3
      Transportation charges, JFMIP study of, 103                      Agriculture, Department of, foreign agricultural func-
      Work Experience and Training program, 50, 6 7                       tions of, 87, 90, 9 1
    Health' Services and Mental Health Administration ;                Audit reports issued, 87, 13 4
      Indian Health Service, 50                                        Conuneice, Department of. 19 7
    House of Representatives, U .S ., 14, 1 :5, 16, 19, 21, 70         Defense international activities . 12. 13, 87, 91 . 93
    Housing and Urban Development, Department of :                     Export-Import Bank of the United States, 8 7
      Audit; Office of, 5 3                                            Food for Peace, 9 0
      Audit reports issued, 52                                         Foreign Affairs Community Agencies, 9 1
      College housing projects, 8                                      Foreign assistance programs, 87, 89
      Federal Housing Administration, 47,5 3                           GAO work in . 2, 8 7
      Federal National Mortgage Association, 53, 61                    Interagency and trade programs, 9 0


                                                                                                                              INDE X

      International activities—Continue d                                                               M
        International organizations. U .S . participation in, 9 2           Management impr—ement and cost reduction programs ,
         Military assistance programs ; 9 5                                   10 . 69
         Peace Corps, 87, 91, 96, 97, 13 3                                  Manpower Administration . 5 7
         Post Office Department, 87, 9 6                                    :Manpower utilization, 8 2
         State, Department of, 87, 91, 92, 93, 9 6                          Manual for Guidance of Pcdetal Agencies, GAO, 3 6
         Treasury, Department of the, 87, 9 3                               Maritime Administration ; 49
         U .S . Information Agency, 87 ; 91, 96, 9 7                        Medicaid, 1, 18,5 7
      International Atomic Lnergy Agency ; 8 8                              Medicare, 18, 52, 6 8
      International Labor Organization, 9 2                                 Military Airlift Command, 100
      International organizations, U .S, participation in, 9 2              Military assistance programs, 9 5
      Interstate Highway System, 25, 5 8                                    \Lbtaay pay and allowances, 13, 81, 11 3
                                                                            Military sea "Transportation Service, -19, 99 . 11 5
                                      J                                     Military Traffic Management and Terminal Service, 102 ;
                                                                              103, 11 5
      Janus reactor complex 2, 61, 6 2                                      Mincs, Bureau of, 5 4
      Job Corps Programs, 6 7                                                Mint, Bureau ,f thc . 32, 43, 6 0
      Job Opportunities in the Business Sector, 19, 20, 56, 5 7              Multi-civil-agency reviews, 69 , 11 1
      Joint Financial Management Improvement Program, 3 . 36 ,
        39, 41, 103
      judicial branch audits, 7 0
      Justice, Department of :                                              National Advisory Council on International Monetary an d
         Assistance to, 4, 99, 102, 11 1                                      Financial Policies, 9 3
        Audit reports issued, 5 6                                           National Aeronautics and Space Administration :
         Claims reported to for collection, 102, 10 6                         Audit rcp : :its issued, 6- 1
         Federal Prisons Industries, Inc ., 5 6                               Automatic data processing, 66
         Financial management improvement program, participa-                 Contractor profit study, 13 1
            tion in, 3 9                                                      GAO work in the agency, 6 4
         GAO work in the Department, 5 6                                      Research and development, 26, 7 9
          .-rings on, 1 9                                                   National Air Pollution Control Administration . 11 4
         Immigration and Naturalization Service, 5 6
                                                                            National Bureau of Standards . 49
         Legislative recommendation, 3 3
                                                                            National Communications System, 8 3
                                                                            ?rational Institutes of Health, 5 0
                                                                            National Park Sen    . ice, 23
       Labm-, Department of :                                               National Radio Astrommi         — ivatory, 6 6
          Audit reports issued, 56, 5 7                                     National Science Foundation, 6 6
          Concentrated Employment, 56, 6 7                                  Navy Aviation Supply Office, 7 8
          Financial management improvement program, participa-
                                                                            Nary . Department of the :
             tion in, 3 9                                                      Accounting systems design, 3 . 3 8
          GAO work in the Department, 5 6
                                                                               Audit reports issued- (See Defense, Department of. )
          Job Opportunities in the Business Sector, 19, 20, 56, 5 7
          Manpower Administration, 5 7                                         Automatic data processing, 7 8
          Neighborhood Youth Carps, 56, 6 7                                    Contractor profit study . 13 1
        ` Special Import program, 5 7                                          Decisions involving, 111, 11 2
    - - Transportation field, assistance in, 10 3                              Deep submergence rescue vehicle, 1 0
           Work Incentive program . 5 7                                        Facilities and construction, 8 0
       Land Management,, Bureau of, 2, 24, 5 4                                 Manpower utilization, 8 2
       Legal services, 4,109,1 1 5                                             Mlitmy aircraft, maintenance and modifications of, 8 0
          Assistance in the field of t ransportation, 102, 11 4                Military• pay and allowances, 8 2
          Assistance to agencies, 10 9                                         Ships in reduced operational states, 4 9
           Assistance to Congress, If,                                         Supply management, 7 9
           Decisions and other legal matters handled during F .Y . 1970 ,      Transp station field, assistance in, 10 2
             -1, 109, 111, 115, 11 6                                        Neighborhood Youth Corps, 56, 6 7
           Legislation, pending, 2, 1 3                                      North Atlantic Treaty Organization, 9 5
           Reference assistance, 11 5
       Legislation enacted during P.Y. 1970 relating to the wor k
           of GAO, 129
       Legislation, pending, 2, 1 3                                          Offices- ISet other part of name- )
       Legislation, recommendations for, 2 1                                 Organizations and functions of GAO, 140 1 14 1
       Legislative branch audits, 70, 134                                    Organizatiors outside the Federal Government, 70, 134


                              P                                  State, Department of :
                                                                   Accounting system, 9 6
Pacific Islands Trust Territory, 55, 13 0
                                                                   Audit reports issued, 9 6
Panama Canal Company and Canal Zone Government, 6 9
                                                                   Automatic data processing, 9 1
Pay and allowances :
                                                                   Financial management improvement program, participa-
  Civilian, 81, 110 '
                                                                      tion in, 39
  Military, 13, 81, 11 3
                                                                   GAO work in the Department, 9 6
Payments, erroneous, waiver of, 13 3
                                                                   Internal auditing, -13, 9 6
Pay, waiver of claims for erroneous payment of, 13, 106 1 10 7
                                                                   International activities, 12, 13, 87, 91, 92, 93, 96
Peace Corps, 87, 91, 96, 97 ; 13 3
                                                                 Strategic Air Command, 10, 8 3
Personnel :
                                                                 Student Loan Insurance Fund, 5 1
  Administration, 11 9
                                                                 Supply management, 79, 8 3
  Development, 12 2
                                                                 Systems analysis, 8, 53
  Equal employment opportunity, .125
   Professional development and recognition, 125
  Recruiting, training, and staff development, 4, 11 9                                         T
                                                                 Technology Assessment, Office of, 8, 18 7 2 0
     Accounting and auditing staff in relation to total em-
                                                                 Telecommunications Policy, Office of, 20, 8 4
        ployment, 12 1
                                                                 Tennessee Valley Authority, 6 9
     Assignments to congressional committees, 1 6
                                                                 Training and career development, 4, 119, 122, 12 5
     Length of service, 12 1
                                                                   Given through agency or non-Government facilities, 123 ,
Philadelphia Plan, 16, 1 8
Planning- Prograin ming-Budgeting System, survey of, 4 0
                                                                   Given through GAO facilities, 122, 12 3
Post Office Department :
                                                                 Transportation activities, 4, 9 9
  Audit reports issued, 5 7
                                                                   Agencies, GAO assistance to, 10 2
  GAO work in the Department, 5 7
                                                                   Audits and claims, 99, 100, 13 5
  International activities of, 87, 9 6
                                                                   Collections, 100, 102, 135
Poverty programs . (See Economic Opportunity Programs, )
                                                                   Decisions, involving, 11 4
PPB, survey of, 40 ,
                                                                   Justice, Department of, GAO assistance to, 4, 99, 102, 11 1
President's Commission on Budget Concepts, 3 6
                                                                   Management reviews . 10 1
Procurement reviews, 2, 15, 74, i5, 7 9
                                                                    Reports on, 84, 10 1
                                                                   Transportation Manual, 11 5
                                                                 Transportation charges, JFMIP study of, 39, 103
Railroad Retirement Board, 4 3                                   Transportation, Deparuucnt of :
Reclamation, Bureau of, 23, 47, 48, 54, 11 4                       Access to records, 1 .1
Records, access to . (See _access to records . )                   Accounting system, 5 9
Recruiting and staff development, 4, 119, 120, 1 1- 2, 12 5        Audit reports issued, 5 8
Regional offices, GAO, 142, 143                                    Coast Guard, U .S ., 58, 59, 113, 13 1
Reports :                                                          Decisions invoh•ing, 17, 11 4
  Audit_ (See Audit reports . )                                    Federal Aviation Administration, :58, 59, 11 0
  Draft, unauthorized release of, 7                                Federal Highway Administration, "'_5, 58, 5 9
  Legislative and legal, 115, 11 6                                  Federal Railroad Administration, 5 9
  On pending legislation, 2, 1 3                                   Financial management improvement program, pa ;-ticipa-
  Statistical summaries of, 115, 11 6                                 tion in . 39
  To Congress, comittees, and individual Members, 2, 9, 11 ,       GAO cork in the Department, 5 8
     14, 15, 2 1                                                    Interstate Highway System, 1 .5, 5 8
  With classified material, 7                                      Saint La,n'snce Sca,tay Development Corporation, 5 8
Research and -development 14 . 26, "1 8                          Treasury, Department of the :
                                                                    Accounting system, 43, 6 0
                                                                   Audit reports issued, 60
Saint Lawrence Seaway Development Corporation . 58                 Automatic data processing, 6 0
Senates U .S ., 14, 16, 18,'21, 70                                 Comptroller of the Currency, Office of the, 6 1
Small Business Administration, 67, 112, 11 4                       Custotus, Bureau of, 43, 60
Social Security Administration, 5 2                                 Engraving and Printing, Bureau of, 6 0
Soil Conservation Service . 4 7                                    Financial management in the Federal Government, 4, 37,
Southeast Asia, 87, 88 .                                              39
Special Impact program, 5 7                                         GAO work in the Department, 60
Staff developt-nent, 4, 119 . 1 2 2, 12 5                           Internal audit activities, 43, 60


                                                                                                                                                 INDE X

     Treasury, Department of the-Continued                                                                     V
        Internal Revenue Service, 30, 43, 60, 61, 102                     Veterans Administration :
        International activities, 87, 93                                    Accounting system, 43, 68
       Mint, Bureau of the, 33, 43, 60                                      Audit reports issued, 6 7
       President 's Commission on Budget Concepts, 37                       Decisions invoking, 17, 11 4
       Transportation charges, JFMIP study of, 103                          GAO work in the agency, 6 7
     Trust Territory of the Pacific Islands, 55, 130                        Internal auditing, 43, 68
                                                                            Legislative recommendation, 2 7
                                     U                                      Veterans Canteen Service, 6 8
     Uniform cost accounting standards, 3, 11, 18, 19, 20,           77   Vietnam, "_, 12, 13, 77, 83, 87, 38, 89,              91,   93,    94, 10 1

     United Nations Children ' s Fund, 2, 9 2
     United Nations Development Program, 2, 20, 92                                                       W
     Uranium enrichment enterprise, 2, 17 ; 20, 61, 62                    Water pollution control ?, 10, 24, 25, 53
     U .S . Coast Guard, 58, 59, 113, 131 _                               Water Resources Council, 48                                                          -
     U .S . Courts, 70                                                    Water resources projects 23, 28 5 47, 48, 5 4
     U .S .   House of Representatives, 14; 15, 16,   19,   21, 70        Weapon systems, 2, 8, 10, 20, ''6, 73, 75, 79, 95
     U.S.     Information Agency, 87, 91, 96, 97                          Work Experience and Training program, 6 7
     U.S.     Senate, 14, 16, 18, 21, 70                                  Work Incentive program, 57

                                                                                                                                                        15 1

                                                                            is S. ( ;01   I .RNML\l PPIBTnc, 0FH('1 .   19,)        V -34F

    l            w1:


                                                            INDE X
                              A                                  Air Force, Department of the :
                                                                   Accounting systems design . 3, 3 8
 Access to records :
                                                                   ADP activities, 1 2
   Denial of, 13, 6 9
                                                                   Audit reports issued . (See Defense, Department of. 1
   Legislation enacted during F .Y . 1970 aflecting, 129, 130,
                                                                   Combat readiness, 10, 113
       13 1
                                                                   Contractor profit study, 13 1
   Pending legislation concerning, 1 4                             Decisions involving, 1 13, 114, 11 5
 Accounting principles and standards :
                                                                    International activities, i'?, 9 5
   Prescribed by the Comptroller General, 36, 37, 3 8              Military aircraft, maintenance and modifications of, 8 0
   Review and approval of statements of, 3, 5, 35, 37, 3 8
                                                                   Military pay and allowances, 8 2
 Accounting systems :
                                                                    Research and development, 7 9
   Development of, 3, 37, 3 8
                                                                   Supply management, 7 9
   GAO' s annual report to the Congress on, 3 5                    Transportation matters . administration of, 84
   Submission, review, and approval of designs, and opera-
                                                                 American Institute for Free Labor Development, 12, 9 4
           tion of, 3 ; 5, 35, 36, 37, 38, 42                    Annual Report, GAO, change in format of, a
      Air Force, Department of the, 3, 3 8
                                                                 Architect of the Capitol, 7 0
       Army, Department of the, 3, 3 8
                                                                 -army Corps of Engineers (civil functions), 23, 28, 29, 47 ,
      Civil Service Commission . 62
                                                                   54 . 11 4
      Consumer Protection and Environmental Health Serv-
                                                                 Army, Department of the :
           ice, 43
                                                                   Accounting systems design, 3, 3 8
      Defense, Department of the, 3, 35, 3 8
                                                                   Audit reports issued . (See Defense, Department of. )
      Food and Drug Administration ; 4 3
      General Services Administration, 43                           Automatic data processing, 1 2
                                                                    Combat readiness, 10, 8 3
      Health, Education, and Welfare, Department of, 5 0
                                                                    Contractor profit study, 13 1
       Mint, Bureau of tire, 4 3
                                                                   Decisions involving. 111, 113, 11 i
      National Bureau of Standards, 4 9
                                                                    Facilities and construction, 80
     Nagy, Department of the, 3 . 3 8
       Peace Corps, 9 6                                             International activities, 9 5
                                                                    Legislative recon uendations, ' 6
      Treasury, Department of the, 6 0
                                                                    Manpower utilization, 81 2
      '_1 .S . Coast Guard, 5 9
      Veterans Administration, 43, 6 8                              Militay aircraft, maintenance and modifications of, 8 1
                                                                    Military pay and allowances, 8 2
 Accounts of accountable officers, audit and settlement of ,
                                                                    Procur ement, 1 5
                                                                 Assistance to the agencies, 35, 102, 10 7
 Accrual accounting in the Federal Government, 35, 36, 3 7
 Actuarial staff of GAO, 8                                       Assistance to the Congress. (See Congress, assistance to the . )
 Agencies, assistance to, 35, 102, 10 7                          Assistant Comptroller General, new, 2, 10 9
 Agency for Irternational Development, 12, 90, 91, 9 3           Atomic Fnergy Commission :
 Agricultural Research Service, 1 0                                 Argo- ne National Laboratory, 2, 61, 6 2
 Agricult+ralStabilization and Conservation Service, 4 6            Audit reports issued, 13, 6 1
 Agriculture, Department of :                                       Contractor profit study, 13 1
   Agricultural Research Service, 1 0                               GAO rvo k in the agency, 6 1
   Agricultural Stabilization and Cousenvation Service, 46          Gaseous diffusion plants, 17, 20, 6 1
   Audit reports issued, 45                                         Janos reactor complex, 2, 61, 6 2
   Commodity Credit Corporation, 4 6                                Research and development, 26, 7 9
   Consumer and Marketing Service, 1, 10, 4 5                       Transportation field, assistance in the, 10 3
   Decisions involving, 11 0                                        Uranium enrichment enterprise, ', 17, 20, 61, 6 2
- Economic Opportunity programs, 45, 6 7                         Audit reports :
   Farmers Home Administration, 28, 45, 47, 6 7                     List of, 5
   Federal Crop Insurance Corporation, 4 6                          Number issued, 1, 13 4
   Foreign programs of, 117, 90, 9 2                                  Civil, 4,71
   GAO work in the Department, 4 5                                    Defense, 73, 7 4
    Legislative recommendations, 2'1, 28, 4 6                         lutenrational, 8 7
   Soil Conservation Service, 4 7                                     1 egi latke .. 7 0
   Transpprtstiun changes . J F SI7 P -stirdp of, 10 :3               'Multi-661-agency, 69

                                                                                                                            14 5

        INDE X

        Audit reports--Continued               -                             Civil Service Commission, V .S .—Continued
          Number issued Continue d                                             Personnel management evaluation systerr 12 5
             Organizations outside the Federal Government, 7 0                  Retirement Fund, 31, 13 2
             Transportation management reviews, 10 1                            Revolving Fund, 13 0
             Vietnatit, relating . to programs and. activities being con -   Claims :
                ducted my 88                                                   Against the United States, -I, 110 5
          To Congress, 1, 9, 13 4                                              Bi the United States, 4, 10 6
        Audit work :                                                           Legislation enacted during F.T . 1970 affecting, 13 3
          Civil operations and programs, 4 5                                   Settlements :
          Contracts, 7 4                                                           General. -1, 10 6
          Defense operations and programs, 7 3                                     Transportation, 4, 99, 13 5
          International operations and programs, 8 7                            Waiver of, 13, 106, 107, 13 :3
          Legislation enacted during F .Y. 1970 affecting, 12 9              Coast Guard, U .S ., 58, 59, 11 3 5 13 1
           <»islatite and judicial branches, 21, 7 0                         Combat readiness of milit ,pry units and related supply sup -
              dti-civil-agency reviews, 6 9                                     poi i t 83
             raanizatitins . outside the Federal Government, 7 0             Commerce, Department (if :
           +iher civil departments and agencies, 6 8                            Accounting system, -19
            Transportation management reviews, 10 1                             Audit reports, 4 9
             nuatic data processing equipment :                                 Economic Development Administration, 2 9
           acquisition -and use, 4 1                                            Environmental Science Scrviccs Administration, 4 9
              Agencyfor International Development, 9 1                          Financial management improvement program, participa-
              Air Force, Department of the, 1 2                                     tion in, 3 9
              Army, Department of the, 1 2                                      GAO wink in the Departntent, 4 9
              Defense, Department of, 12)                                       [ [caring: on contracts of, 1 9
              District of Columbia Government, 63                               International activities, 8 7,
           - General Services Administration,_ 6 4                              Legislative recommendation, 2 9
              Mouse of Representatives, 1 3                                     Maritimc Administration, 49
                                                                                Multi-civil-agency review, 6 9
              Internal Revenue Service, 6 1
              Mint, Bureau of the, 60                                           National Bureau of Standards, 4 9
              National Aeronautics and Space Administration, 6 6                Transportation charges, JF%I1P study of, 101 3
                                                                             Commission on Covernnirtit Procurement, 18 ; 13 1
              Navy Aviation Supply Office, 7 8
              State, Department_ of, 9 1                                     Commodity Credit Corporation, 4 2
                                                                             Communications, administravon of, 8 3
          Training programs pertaining to, -12, 12 :3, 12 4
                                                                             Community Action Program, 6 7
                                                                             Comptroller of the Currency, Office of the, 6 1
                                        B                                    Concentrated Employment program, 56, 6 7
        Balance-of-paynients position, U .S ., 10, 9 1                       Congress, assistance to the, 1, 2, 7
                                                                                Actuarial staff of GAO, 8
        Bid protests, I I I
                                                                                Assignments of star[ to committees, 1, 2, 1 5
        Bonneville_ Power Administration, 2 3
                                                                                Audits of Ilouse and Senate activities, 21, 70
        Budget, Bureau of the :
                                                                                GAO liaison with Congress . 9
          Financial management in the Federal Government, 3, 37 ,
                                                                                 Hearings, testimony of GAO representatives . 2, 1 7
             :39, 10 3
                                                                                Legal and legislative matters, 1 6
          Recommendations to, 7 0
                                                                                Legislation, pending :
          Reports to, 4, 11 5
                                                                                    Reports on, 2, 1 3
          Transportation charges, JFMIP study of, 39, 10 3
                                                                                    Testimony on, 1 8
          Uniform cost accounting standards, 3, 11, 18, 20, 7 7
                                                                                Legislation, recommendations for, 2 1
        Budget Concepts, President's Commission on, 3 6
                                                                                 Reports to, 1, 2 . 7, 9, 11, 13, 1-1, 15, 115, 13 4
        Bureaus . (See other part of name . )                                    Systems analysis, use of in GAO, 8
                                                                             Container and Marketing Service, 1, 10 . 1 5
                                         C                                   Consumer Protection and Enxironmcntal Health Scrvice, 4 3
                                                                             Contract audits . 7 4
        Capitol Guide Force, 7 0
                                                                             Contractor profit study, 13 1
        Career development, 4 ; 12 2                                         Corps of Lngirwers . iS'ec ,limy Corps of Engineers . )
        Civilian pay: and allowances, 81, 11 0                               Cost accounting standards, uniform . :3, 11, 18, 20, 7 7
        Civil Service Commission, U .S . :                                   Cost rcdm tion and management improvement program, 10, 6 9
        - Accounting systems design, 6 2                                     Cu,im—, Bureau of, 13, 60
           :ADP trainin g, prngrart,, 42, 123, 12 4
           Audit reports issued, 6 2                                                                       D
           Decisions involving, 410 -
           Financial management in the Federal Government, , 3 9             D ct -!1         1.   t 102 .1'6 . 1 0   1 .. ~
            CIAO woA in the agency, 6_'                                                                  116



                                                                                                                          INDE X

    Defense Communications Agency, 8-1                   -           Farmers Home Athuinistration, 28, 45, -17, 6 7
    Defense Contract Audit Agency, 7- 1                              Federal Aviation Administration, 58, 59, 110                 -
    Defense, Department of. (See also Air Force, Army, and           Federal Columbia River Power System, 2 3
        Navy . )                                                     Federal Credit Union .Administration, 129
      Accounting s ystems designs, 3, 35, 3 8                        Federal Crop Insurance Corporation . 4 6
      Accrual accounting, 3 7                                        Federal Deposit Insuance Corporation, 31, 68, 6 9
      ADP activities, 1 2                                            Federal highway Administration, 25, 58, 5 9
      Audit reports issued, 73 . 74, 13 4                            Federal Home Loan Bank Boatel, 6 9
      Combat readiness of military units and related suppl y         Federal home loan bauks, 6 9
         support, 8 3                                                Federal Housing Administration, 47, 5 3
      Communications, administration of, 8 3                         Federal National Mortgage Associatin, 53, 6 1
      Contract audits, 7 4                                           Federal Power Program, 2 2
       Contractor profit study, 13 1                                 Federal Prison Industries, Inc . . 5 6
      Cost reduction program, 1 0                                    Federal Railroad Administrmion, 5 9
       Decisions involving, 11 2                                     Federal Savings and Loan Insurance Corporation, 6 9
      facilities and construction ; 8 0                              Federal Supply Service, 6 4
       GAO work in the Department, 7 3                               Federal Water Quality Administration, 1, 24, 25, 5 3
       Hearings on, 20                                               Field offices, GAO, 1-1L 14 2
       Internal auditing, 4 3                                        Financial management in the Federal Governineot :
       International activities, 12, 13, 87, 91, 9 5                    Congressional interest in, 3 5
       Manpower utilization, 82                                         GAO assistance to agencies for. improvement in, 3, 36, 4 2
       Military aircraft, maintenance and modifications of, 80          )tint Pinancial Management Improvement Program, 3, 36,
       Military assistance programs, 9 5                                    39, 41, 10 3
       Other programs, administration of, 8 4                            Reports on :
       Pay and allowances :                                                 Consumer Protection and Environmental Health Service ,
        Civilian, 8 1                                                          43
          Military, 13, 81, 11 3                                            Food and Drug Administration, .1 3
       Pr—urement, 2 15, 74, 75, 7 7                                        General Set-%ices Administration, 4 3
      Research and d-clopment, 1-1, 26, 78                                  Mint, Bureau of the . 4 3
      Supply management, 79, 8 3                                            Trust Territory of the Pacific Islands, 5 5
      Training courses, 124                                                 U .S . Coast Guard, 5 9
      Transportation matters, administration of, 84, 10 1                   U .S . Information Agency, 9 6
      Transportation suits involving . 4, 102                               Veterans Administration, 4 3
       Uniform cost accounting standards, 3, 11, 18, 20, 7 7             Reviews of, 43
      ti:eapons systems, 2, 8; 10, 20, 26, 73, 75, 79, 9 5           Financial sayings attributable to the wrn-k of GAO, 5
    Department. (See other part of name )                            Financial statements, confidential (Senate Rule 44), 9
    Directory of the U .S . Generci Accounting Office, 14 3          Financial statements of GAO, 136, 137, 138 . 139
    Disabled American Veterans National Headquarters, 7 0            Findings and recommendations, compilation of GAO, 5
    District of Columbia Government, 12, 18, 19, 39, 6 3             Food and Agriculture Organization of the United Nations, 2 ,
                                                                     F,-d and Drug Administration, 43, 5 0
                                                                     Food for Peace, 9 0
    Economic Development Administration, 2 9                         Food inspection activities, 1, 8 4
    Economic Opportunity, Office of, 56, 6 7
                                                                     Foreign Affairs Community Agencies, 9 1
    Economic Opportunity programs, 28, 45, 50, 67, 13 0
                                                                     ,, oreign assistance programs, 87, 89
    Education assistance programs, 13 0
    Education, Office of, 50, 5 1                                     Foreign currency, 90, 9 4
    r•.ducator-consultants, 11 9                                     Foreign Exchange Operations Fund, 9 0
    Electronic data processing, (See Automatic data processing . )   Functions and organizations of GAO, 140, 14 1
    Employees . iSec- Personnel _
    Engraving and Printing, Bureau of, 60                                                          G
     Environmental Science Services Administration . 49
                                                                     Gaseous diffusion plants, 17, 20, 6 1
     European Branch, 87, 1 .13
    Executive Office of the President, 8 4                           General Accounting Office :
     Espetises and staffing, GAO, 4, 13 2                              Actuarial staff. 8
     Export-Import Bank of the United States, 87, 9 7                  Amoral report, change in format of, 5
                                                                       Appropriations, legislation enacted during F .Y . 1970 ,
                                                                          affecting, 13 2
                                                                       Dam Processing Center, 9
    Facilities and conitnu-ti-t, nnifitary, 8 0                        Directory of, 1-1 3
    Far Flast Bra ich, 87, 141                                                      and stalk- . 4, 1 ± ?
    Farm Credit -Ada iii- radon, 03, fig                               I in . ,m ia? t .tetnent- f . 13fi .1 li . 1 38, 139


    INDE X

    General Accounting Office—Continue d                               Housing and Urban Development, Department of—Con .
      Findings and recommendations for improving Governmen t             Financial management hulnovenicnt program, participa-
        operations, report on, 5                                           tion in, 3 9
      Functions and organization, 140,14 1                               GAO urork in the Department, 5 2
        Chart, 14 1                                                      Internal auditing, 4 3
        Nfap ofregional offices, 14 2                                    Legislative recommendation, 22
      Legislation eriacted during F .Y. 1970 relating to th e
        work of GAO . 12 9                                                                         I
      Manual for Guidance of Federal Agencies, 3 6
      Newsletter, 9                                                    Immigration and Natura lization Service, 5 6
    General Counsel, new, 2, 109                                       Indian Affairs, Bureau of, 55, 5 6
    General Services Administration :                                  Indian Health Service, 5 0
      Accounting system, 43                                            Interagency and trade programs, 9 0
      Audit reports issued, 6 4                                        Inter-American Development Bank, 9 3
      Automatic data processing, 64                                    Intergovernmental programs and operations, 4 0
      Decisions involving, 112, 11 4                                   Interior, Department of the :
      Federal Supply Service, 64                                          Audit reports issued, 5 3
      GAO ucm k in the agency, 6 3                                        Bonneville Poker Administration,, 2 3
      General Supply Fund, 3 1                                            Cost reduction program, 1 0
      Legislative recommendation, 2 1                                     Decisions involving, 1 1 4
      Operating Fund, 13 2                                                Federal Grater Quality Administration, 11, 24, 25, 5 3
      Transportation charges, JFMIPstud}-of,'19, 10 3                     Financial management improvement program, participa-
    General Supply Fund, 3 1                                                  tion in, 3 9
    Geological Surrey, 5 5                                                GAO work in the Department, T i
    Gorgas Memorial Institute of Tropical and Preventive1Medi-            Geological Survey, 5 5
      cine, Inc ., 7 0                                                    Indian Affairs, Bureau of, 55,5 6
    Government Printing Office, 27, 7 0                                   Indian welfare . 50
    Government Procurement, Commission on, 110, 111, 117 .                Land management and natural resources, 5 4
      13 1                                                                La!:3 \{anagement, Bureau of, 24, 5 4
    Government Services, Inc ., 7 0                                       M_pping, 55
    Grains-in-aid to . State and local governments, 37 . 39, 40, 4 1      Mines, Bureau of, 54
    Guaranteed Student Loan Program, 19, 5 1                              National Park Service,
                                                                          Reclamation, Bureau of, 23, 47, -18, 54, 11 4
                                                                          Trust Territory of the Pacific Islands, 55, 13 0
                                   H                                      Water pollution control, 2, 10, 24, 25, 5 3
     Health, Education, and Welfare, Department of :                      Water resources projects, 23, 28, 47, 48, 5 4
       Accounting system, 43, 50                                        Internal auditing, 4, 41, 4 3
       Audit reports issued, 50                                           Custorns, Bureau of, 43, 60
       Consumer Protection and Environmental Hearth Service ,             Defense, Department of, 4 3
           43                                                             Housing and Urban Development, Department of, 4 3
       Decisions involving, 11 4                                          Internal Revenue Senice.43, 60
       Education, Office of, 50 7 5 1                                     International organizations, 9`'
       Food and Drug Administration, 43, 50                               National Science Foundation, 6 6
       GAO Nvork in the Department, 5 0                                   Raihnad Retirement Board, 43
       Indian Health Service, Health Services and Mental Healt h          State, Department of, 43, 9 6
           Administration, 5 0                                            Treasury, Department of the, 43, 6 0
       Medicaid, 1, 18. 5 7                                               Veterans Administration, 43, fil l
        Medicare, It,, 52, 6 8                                          Internal Revenue Service, 30, 43, 60, 61, 102
       National Institutes of Health, 5 0                               International activities, 2, 8 7
        Social Security Administration, 5 2                               Aeency for InternationA Development, 12, 90, 91, 9 3
       Transportation charges, JFMIP study of . 10 3                      Agriculture, Department of, foreign agricultural func-
       Stork Experience and Training program, 50, 6 7                           tions of, 87, 90, 9 2
     Health Services and Mental Health Adminis noon :                      Audit reports issued, 87, 13 4
        I tidi.ut Health Service, 5 0                                      Commerce, Dep ;utnient if, 8 7
     House of Representatives, U S ., 14 . 15 . 16, 19, '!1 ,             Defense international activities . 1°, 13, 87, 91, 95
     flonsinu and Urban Development, Department of :                       F,xi-rt-Import Blank of the United States, 8 7
        Audi :,_ Office of. 53                                            Food fir Peace, 90
        Audit replan issued, 5 .'                                          F,ue i.gn, All ahs C-nimmnity Acme ics, 9 1
        Collee 1 ..urine prpiecu, 8                                        l etcign a t t ur pr -grant, 87, 8 9
        Feder I I I esue \dniinis r t . :., 47 .                           (;AO ,~n!a to --. ,
        Feder . I N .,tic:riA Nlortgace Ass a, i-o , 51 , ail               I H .t r ; .grn .-~ rood tia In q ,ua . 9 1)


                                                                                                                                          INDE X

        International aiticities--Contill Lied                                                                  M
          International i organizations, U .S . participation in, 9 2          Manaa'ement iutprovement and cost rvduction programs ,
          Military assistance programs, 9 5                                       10, 6 9
          Peave Corps, 87, 91, 96, 97, 13 3                                    Manpower administration, 5 7
          Post Office Department, 87, 96                                       Manp-N-l- utilization, 8 2
          State, Department, of, 87, 91, 92, 93, 96                            Manual for Guidance of Federal Accncics, GAO, 3 6
          Treasury, Department of the, 87, 9 3                                 Maritime Administraii tn, 1 9
           U " .S . Information Agency, 87, 91, 96, 9 7                        Medicaid, 1, 18 . 5 7
        Inteinational Atomic Energy ,Agency, 8 8                               Medi( :nr ; 18, 52, 68
        International Labor Organization, 9 2                                  Military Airlift Command, 100
        International organizations, U .S . Participation in, 9 2              Military assistance programs, 9 5
        Interstate Highway System, 23 7 5 8                                     'Elital ). pa} and allowances, 13 . 81 . 1 1
                                                                               Military Sra Traospoi tati,•n Service, -19, 99 . 1 1 5
                                         J                                     Military Trallic Management and Terminal Service, 102 ,
                                                                                   103, 11 5
        Janus reactor complex, 2, 61, 6 2
                                                                               \aim's, Bureau of, 5-1
        Job Corps Programs, 6 7
                                                                               Mint . Bureau of the, 32, 43, 6 0
        Job Opportunities in the Business Sector, 19, 20, 56, 5 7
                                                                               lfulti-civil-agency revie%+s, 69, 13 4
        Joint Financial Management -Improvement Program, 3, 36 2
           39, 41, 103
         Judicial branch audits, 7 0                                                                            N
         Justice, Department of :                                              Aat,onal Advisory Council on International Monetary an d
           Assistance to, 4, 99 ; 102, 11 1                                       Financial Policies, 93
           Audit reports issued . 5 6                                          National :Aeronautics and Space Administ ration :
           Claims reported to for collection, 102, 10 6                           Audit rep,n'ts issued, 6 1
           Federal Prisons Industries, Inc ., 56                                  Automatic data processing, 6 6
           Financial management improvement program, partitipa-                   Gmtractor profit study, 13 1
              tion iu, 39               -                                         GAO work in the, ageoq% 6 4
           GAO work in the Department, 5 6
                                                                                  Research and developnunt, 2 6, 7 9
           Hearines on, 1 9
                                                                               National Air Pollution Control administration, 11 4
           Initttigration and Naturalization Service, 5 6
           Legislative recommend , tion, 3 3                                   National Bureau of Standards, 49
                                                                               National Communit ations System, 8 3
                                         L                                     National Institutes of Health, 5 0
                                                                               National Park Service, 2 3
        Labor. Department of :                                                 :rational Radio Astronomy Observatun , , 6 6
          Audit reports issued, 56, 5 7                                        National Science Foundation_, 66
          Concentrated Employment, 56, 6 7
                                                                               Navy Aviation Supply Office, M
          Financial management improvement program, participa-
                                                                               Navy, Department of the :
              tion in, 3 9
                                                                                  Accoituing systems design, 3 . 3 8
          GAO .tvork in the Department, 5 6
          Job Opportunities in the Business Sector, 19, 20, 56, 5 7               _Audit repor is issued, ! See Defense, Department of- )
          Manpower Administration, 5 7                                             automatic data pr--sine ; 7 8
           Neighborhood Youth Coilm 56, 6 7                                       Contr actor profit study, 13 1
          Special Import program, 5 7                                              Decisions invoking, I 1 I, 11 2
           Transportation field, assistance in, 10 3                               Deep submergence rescue vehicle, 1 0
           Work Incentive program, 5 7                                             Facilities and construction, 8 0
    -   Land Management . Bureau of, 2, 24, 5 4                                      {aupower utilization, 82
        Le tIal services, 4, 109, 11 5                                             Military aircraft . maintenance and modifications of, 8 0
           Ass-istamce in tine field of transportation, 102, 11 4                    {ilitary pay and allowances, 8 2
          Assistance to agencies, It1 9                                            Ships in rt•duced operational status, 4 9
           Assistance to Congress, 1 6                                             Supply management, 7 9
           Decisions and other Iegal [natters handled [luring F . V . 1970 .       -I•ranp -rtati :m field, assistance in, 10 2
              4, 109 . 111, 115. 11 6                                          Neighborhwod Youth Corps, 56, 6 7
           Legislation, pending .
           Reference t sistance, 11 5
                                                                               .\(,I ti,     intcTtcaty 01ganization, 9 5

        Legidatirsn -enacted during )' .1' . 19711 relating to ill, wort_
           of GAO- j'.' tl                                                                                       0
        L+y-t 'atG,n, tf disc . .:                                             Olii,    ;Szr other part „f nann y
         <ec,tsiatonr c: n .tr,•ntl't~i•a .s f•r .!1                           tlr•rwi, :t :nixmudfun, dons-a ( ;AO,1111.!=1 1
                                                                               <”                     0 .,- Vs n rA G " ,-, n-,-nt, ' , 1'; 1



                                                  P                                  State, Department of :
                                                                                       Accounting system, 9 6
                     Pacific Islands Trust Territory, 55, 13 0
                                                                                       Audit reports issued, 9 6
                     Panama Canal Company and Canal Zone Government, 6 9
                                                                                       Automatic data processing, 9 1
                     Pay and allowance s                                               Financial management improvement program, participa-
                       Civilian, .81, 11 0
                                                                                          tion in . 3 9
                       Military, 13, 81, 11 3
                                                                                       GAO work in the Department, 9 6
                     Payments, erroneous, waiver of, 13 3                              Internai auditing, 43, 96
        -           .Pay, waiver of claims for erroneous payment of, 13, 106, 10 7
                                                                                       International activities, 12, 13, 87, 91, 92, 93, 96
                     Peace Corgis, 87, 91, 96, 97, 13 3
                                                                                     Strategic Air Command, 10, 8 3
                     Personnel :                                                     Student Loan Insurance Fund, 5 1
                       Administration, 119 -
                                                                                     Supply management, 79, 8 3
                       Development, 12 2
                                                                                     Systems analysis, 8, 53
                       Equal employment opportunity, 12 5
                        Professional development and recognition, 125
                       -Recruiting, training, and staff development, 4, 11 9                                       T
                      Statistics :                                                   Technology Assessment, Office of, it, 18, " 0
                         Accounting and auditing staff in relation to total em-
                                                                                     Telecommunications Policy, Office of, 20, 8 4
                           ployntent, 12 1
                                                                                     Tennessee Valley Authority, 69
                         Assignments to congressional committees, 1 6
                                                                                     Training and career development, 4, 119, 122, 125
                         Length of service, 12 1                                       Given through agency or non-Government facilities, 123 ,
                    Philadelphia Plan, 16, 1 8
                    Plannin¢-Programming-Budgeting System, survey of . 40              Given through GAO facilities, 122, 12 3
                    Post Office Department :
                                                                                     Transportation activities, 4, 99
                      Audit reports issued, 5 7
                                                                                       Agencies, GAO assistance to, 102
                      GAO work in the Department, 5 7
                                                                                       Audits and claims, 99, 100, 13 5
                      International activities of, 87, 96
                                                                                       Collections, 100, 109, 13 5
                    Poverty programs, (See Economic Opportunity Programs . )
                                                                                       Decisions, involving, 11 4
                    PPB, survey of, 40
                                                                                       Justice, Department of, GAO assistance to, 4, 99, 102, 11 1
                    President's Commission on Budget Concepts, 3 6
                                                                                       Management reviews, 10 1
                    Procurement reviews . 2, 15, 74, 75, 7 9
                                                                                       Reports on, 84, 10 1
                                                                                        Transportation Manual, 11,71
                                                                                     `Franspmtation charges, JFMIP study of, 39, 10 3
                    Railroad Retirement Board, 4 3                                   Transportation, Department of :
            -       Reclamation, Bureau of, 23, 47, 48, 54, 11 4                        Access to records, 1 4
                    Records, access to . (See Access to records . )                     Accounting system, 5 9
                    Recruiting and staff development, 4, 119, 120, 122, 12 5            Audit reports issued, 5 8
                    Regional offices, GAO, 142, 14 3                                    Coast Guard, U .S ., 58, 59 . 113, 13 1
                    Reports :                                                           Decisions involving, 17, 11 4
                      Audit. tSee Audit reports . )                                     Federal Aviation Administration, 58, 59, 11 0
    _                 Draft, unauthorized release of, 7                                 Federal ILgh~ray Administration, 25, 58, 5 9
                      Legislative and legal, 115, 11 6                                  Federal Railroad Administration, 5 9
                      On pending legislation, 2, 1 3                                    Financial manaecutert improvement program, participa-
                      Statistical summaries of, 115 . 11 6                                non in, 3 9
                      To Congress, comittees, and individual Mcu$iers, 2 . 9, 11 ,      GAO work in the Department, 5 8
                -        14, 15, 2 1                                                    Interstate Higlncay System, 25, 5 8
                       With classified material, 7                                      Saint Lawrence Seaway Devclopute,m Corporation, 5 8
                    Research and development, 14 . 26, 7 8                            Treasury, Department of the :
                                                                                        Accounting system, 43, 6 0
                                                   S                                    Audit rcporu issued, 60
                                                                                       Automatic. dafa nrocessittg, 60
                    - Saint Lawrence Seaway De%elnputent Corporation- 5 8
                                                                                       C-uptmllcr „f the Currency . Office of the, 6 1
                      Senate, U .S ., 14, 111 . 18, 21, 7 0
                                                                                       Cusunnvi, Brre ;m (If, 43 . 60
                      Small BusinessAdn ;ini,nation, 67, 112, 11 1
                                                                                       Cugtatin> and Printing. Liturau of, 6 0
                      Social Security Ailromitration, 52
                      Sctl C nsc~rration Se—i'e, 4 7                                   Fin ;un ial r,am iv   e t in ill,, Feder-,!  ,ernnutmt, 1 .
                      Sootl r t Asa ;°_ Pill
                      4pecra ti epai t                z                                  `S)      f r      ll t c ..      hO

                                                                                                                             INDE X

     Treasury, Department of thc—Continue d                                                         v
       Internal Revenue Service, 30, 43, 60, 61, 10 2              Veterans Administration :
       International activities, 87, 9 3
                                                                      Accounting system, 45, 6 8
       Mint, Bureau of the, 3-1, 43, 60                               Audit reports issued, 67                                            --
       President's Commission on Budget Concepts, 3 7                 Decisions involving, 17, 114                                    -
       Transportation charges, JFNHP study of, 10 3                   GAO %cork in thr agency ., 6 7
     Trust Territory of the Pacific Islands, 55 ; 13 0                Internal auditing,-13, 6 8
                                                                      Legislative reconnnendat;-n, 2 7
                                    U                                 Veterans Canteen Scrvice, 6 8
                                                                   \'icuuun,      1', 1,t , 77, 83, 87 . 88 . 89, 91, 93, 94, 10 1
    - Unifor m cost accounting standards, 3, 11, 18, 19, 20, 7 7
      United Nations Children ' s Fund, °, 9 2
      -United Nations Development Program, ', 20, 9 2                                               W
      Uranium enrichment enterprise, 2 . 17 . 20, 6L 6 2           Water pollution control 2, 10, '4, °_5, 5 3
       U.S . Coast Guard, 58, 59, 113, 13 1
                                                                   Water Resources Council, -1 8
     U .S . Courts, 7 9                                            Watct resources projet ts . 23 . 28, 47 . 48, 5 1
     U .S . House of Representatives, 14, 15, 16, 19, 21 . 7 0     Weapon systems, 2, 8, 10, 20 ; 26, 73, 75, 79, 9 5
     U .S . Information Agency, 87, 91 . 96, 9 7                   Wm k Experience and Ti : ining progratu, 6 7
     U .S. Senate, 1 .1, 16, 18,'_'1, 70                           Work Incentive program, 5 7