.. '\. T h e seal coniprises a shmield segmented by a right angle containing 13 stars. representing the organization o t the Accounting Oflice when there were but 1.3 united Stntes. Beloic the. stars F i set out in relief the dome of the Capitol rind the figure o i freedom thereon representing the independence o i jiidgnient to be exercised bj the General Accounting Ofiice, sublect to the control of the lrgidatii~e branch. Aboz,e the right angle o f stars tliere appears the balance beam and scales sjmbolizing the justiciable principles on which the activities of the Ofice are based, and to the right thereoi is shown an account book and quill on which is crossed the kej oj the Treasury symbolizing the keeping of books on the accvunting and uuditing of public monejs. T h e ciinilinatiori represents an agencj o i the Congress independent of other authority auditing and check- ing the expenditures of the Government as required by law and su blecting any question arising in that connection to quasi-judicial determination. Annual Report of the General Accounting Office. 1924 For sale by the Superintendent of Documents, U S . Gorernment Printing Office, Washington, D.C. 20102. Price 40 cents lsingle c o p y ) . Subscription price: 81.50 per )ear: 50 c m t s additional for foreign mailing. THE GAO 50TH ANNIVERSARY EDITION REVIEW SUMMER 1971 Contents The General Accounting Office and Its Func- tions-A Brief Historical Outline. . . . . . . . . . 1 Recollections of June 1921. 16 The Application of Public Fu ELLSWORTH H. MORSE, JR . . . . . 20 Some Early GAO History.. . . . . 26 J. R. McCarl-Some Comptroller General ........ 46 The General Accounti and Its Opportunities LINDSAY C. WARREN. y9/3=-/7 . . . . . . . . >. . . . . . . . . . . . . ... . . 54 Comptroller General Warren Reviews Efforts To Transfer Functions Frpm ,t B General Accounting Office.. . .y& .’ . . 2 60 The Professional Accounting and Auditing Staff of the General A.ccoAnt$ns Office JOSEPH CAMPBELL .. .%?do ./d. .: . . . . . . . . . . . 64 The Role of the General Accounting Office in Reviewing the Results of .qdeyl Programs ELMER 5.STAATS. . . . . . .*. (3 .;zF !. . . . . . e?. 74 1940 Picture Story of GAO. . . . . . . . ...... 83 The Corporation Audits Division to the Seventies JOHNC. FENTON. ... 88 The Accounting Syst 111 The GAO Building.. . 115 GAO’s General Counsels . . . . . . . . . . . . . . . 123 History of the Field, p C. E. M E R R I L L . . ... P 2 128 The Overseas Offices of the General &count- ing Office CHARLES E. HUGHES .. y&<'Cs.5. . . . . . . . . . . c 136 The Transportation Division-A Forward Look Over the Past 50 Years T2-i5 . 2 q DAVID LODWICKAND DONALD H. FRIEDMAN. . . . . . . . . . 144 The Claims Division. .......................... 149 GAO Officials and Employees Who Have Served Under Five Comptrollers General. . . . 153 The Watchdog Reports.. ...................... 156 Officials of the General Accounting Office. . . . 193 About This Issue An adequate history of the General Ac- This issue of The GAO Review is dedicated counting Office has never been written. It to commemorating the 50th anniversary of is unlikely that such a history will ever be the General Accounting Office. It is not a written. The reasons are many. Key pes- systematic history. It does provide glimpses sonalities who were a part of and knew most into some of the important personalities and about important events and changes have some of the occurrences that have had an passed from the scene. Memories fade. Many impact on the Office and its functions over occurrences were never adequately docu- the years. Thus, it provides an opportunity mented. Available records are incomplete and for members of GAO's professional staB to seldom provide the insights into causes, rea- become more familiar with the sweep of im- sons, and effects that are needed to properly portant events that preceded their coming explain the GAO and its evolution. to the GAO. E. H.Morse, Jr., Director, 0 6 c e of Policy and Special Studies AN A C T To provido a national budget system and an independent audit of Government aeCounts, and lor other p u p c s . .- Be 11 e m l e d by lhe S e m l r urd llousa If Represenlalives of lhe Unifed S l u m o j America in C m p w o s s c d h d , TITLEI --DEntiITlOXS SELTTON1. This Act may LL cited as the "Budgft and Auminting Act, 1921." TITLE III.-GEsIx~L Accovsrrsa OFFICE SCC.301. There is created an e~tnblisluiicntof the Government to be known as the General Accountin,. Ofire, which shall bo independent of the executive dcpartmcnts and under the control and direction of the Comptrollcr General of the United States. The affircs of Comptroller of the Treuury and lssistant Comptroller of the Troasury are abolished, to take eKcct July 1, 1921. All othor o5eers and ernplo~-cesof the offico of tho Comptroller of the Trensury shnll became officers and employees in the General Accounting Office at their gndcs and d a r i e s on July 1, 1921, and all books, records. documenta, ,,apers. furniture, office equipment and other property of the office of the Comptroller of the Treaslirg shall become the p q e r t y of the General Accounting Office The Comptroller General i s authorized to adopt B seal for the General Aooounting Otlice. SEC. 302. There shall be in the General Accounting Ofice a Comptroller G e n c r ~ lof the Unitcd States and ~n Assistant Comptroller Gonoral of the Coitcd States, who shall be appointed by the President with the adriee and consent of the Sonnte, and shnll reeeiie salaries of S10,OM) and $7,500 a year, rcspcctircly The AssisBnt Cmptroller Genaral shnll porfarm such dutics as m y Le assigned to him by the Comptroller General, and dunng the nbscnee or in.qncity of tho Comptroller Gencnl, or during a vneanoy in that offioe, shall act u Comptroller General. SEC. 303. Except c9 hereinafter provided in this motion, the Comptroller Gencrnl and thc Assistant Comptrollcr General shnll hold OEMfor lifteon years. The Comptroller Genenl shall not be eligible for reappointment. The SeC. 318. This Act shall take eKwt upon its approval by the President: Prouided, That sections 301 to 317, inclusive, rclatmg to the General A-unting Office and the Bwesu of Acoounts, shall take effect July 1, 1921. MA Spealer of the Home of Repreenmioea. COMPTROUER GENERAL OF THE UNITED STATE5 WASHINGTON. D.C. 20548 As the General Accounting Office completes its first 50 years of op- eration, it is most timely for those of us now a part of it to reflect on what the future holds. Today, we have a dedicated staff of 4,750 employees. Over 3,000 of these a r e professionals. In large part, what the next 50 years holds for the General Accounting Office and its functions will be found in how this staff performs in our governmental system that shows many signs of continuing to increase in size and complexity. The General Accounting Office has moved f a r i n i t s first 50 years, par- ticularly in the years since World War 11. It has adapted itself to the needs and challenges of our changing times. Even more important, it is continuing to adapt and mold its methods and products to the needs of the Congress whom it was established to serve. Objective information about our national programs and their effects is almost the lifeblood of our national legislature if it is to remain an effec- tive force in our national government and responsive to the needs of the people. The General Accounting Office, a s an agent of the Congress and ac- countable only to it, i s one of these sources of information. I think that the General Accounting Office has ably demonstrated that it can be an increasingly effective force in assisting the Congress to carry out its legislative and surveillance responsibilities. It is becoming increas- ingly effective in promoting financial management improvement in the Fed- eral agencies. It has led the way in expanding the scope of auditing to embrace evaluations of governmental management performance, including efficiency and economy in the use of public funds and other resources, compliance with the intent of laws enacted by the Congress, and results achieved through governmental programs and operations. As its capacity to provide such evaluations improves with experience, the General Accounting Office should assume a role of increasing importance a s an independent source of information on the accountability of public ad- ministrators for their operations. And, in our democratic society, the pub- lic, whose good is supposed to be served by such operations, must have the means to hold public officials accountable for their performance. The General Accounting Office through its operations provides one such means. z aA* b Comptroller General of the United States 50TH ANNIVERSARY 1921 1971 - COMPTROLLER GENERAL O F T H E UNITED STATES WASHINGTON. D.C. 20548 Having been fortunate enough to have served withthe United States General Accounting Office for 36 of its 50 years of existence, I have s e e n many changes in its operations and outlook. As we look back, we often wonder why we had such unenlightened policies and such archaic procedures, say 25, 30, or 50 years ago--or even 10 years ago. But, i n retrospect, we a r e prone to overlook the fact that a n organization must gear its operation in considerable measure to influences of the times. The General Accounting Office is no exception and I know that the former officials of the Office adopted policies and procedures based on what they thought the Congress and the public wanted and expected. In the short term, change seems almost non-existent but in the long t e r m it is substantial. We have seen the General Accounting Office move from centralized voucher audits to field audits; t o c ommercial-type audits of Government corporations; to improving f i - nancial management of Government agencies under the Joint Financial Management Improvement Program; to broader audits of agencies; and now to management and program audits. Many changes have taken place in our other operations, particularly in the professional approach t o our job. I believe that today we a r e making every effort t o meet today's challenges a s we see them and that former officials of the Office met the challenges of their times. In a Proclamation issued by President Nixon on "Law Day, U.S.A., 1971", he said: "Change is the immutable first law of nature, and governments reveal themselves most in the manner by which they provide for change. History is littered with the remains of governments that failed t o meet this chal- lenge: of those that gave too great a scope t o unbridled impulse, and of those that gave too little scope to the human spirit." The President's statement, while speaking of governments, is equally applicable t o the General Accounting Office. The challenges of today will be different next year, and the year after, and we must con- tinue to be alert to changing priorities, for ways to improve what we a2 $. a r e presently doing, and for ways to meet new conditions. kr&&# Assistant Comptroller General of the United States 50TH ANNIVERSARY 1921 - 1971 Robert F . Keller accepts his commission as Assistant Comptroller General of the United States from Elmer B. Staats, the ComptroUer General, October 3, 1969. The General Accounting Office and Its Functions-A Brief Historical Outline Key Events Before 1921 1817 Settlement of Public Accounts 1789-1 921 On March 3, on the last day of his 1789 Establishment of the term of office, President James Madi- Treasury Department son signed an act to provide for the prompt settlement of public accounts. President George Washington signed This act contained the language that is the bill on September 2 that established still in effect today under section 305 the Treasury Department and provided of the Budget and Accounting Act, 1921. for a Secretary, a Comptroller, an Audi- This law grew out of a report pre- tor, a Treasurer, and other lesser offi- pared by the Secretary of State, James cers. One of the duties of the Comptrol- Monroe; the Secretary of the Treasury, ler was to superintend the adjustment William H. Crawford; the Acting Sec- and preservation of public accounts. All retary of War, George Graham; and the public accounts were to be verified and Secretary of the Navy, B. W. Crown- transmitted to the Comptroller for his shield. One of their recommendations decision. Persons dissatisfied with such included in the 1817 act called for an settlements were accorded the privilege additional Comptroller. The responsi- of appeal to the Comptroller. bilities of the two Comptrollers were di- The first Comptroller to be appointed vided between the military and civil under Alexander Hamilton, who was activities of the Government. The First Secretary of the Treasury, was Nicholas Comptroller was authorized “to super- Eveleigh of South Carolina. Mr. intend the recovery of all debts; to di- Eveleigh had served as captain in the rect suits and legal proceedings and to Revolutionary War and was a member take all such measures as may be au- of the Continental Congress of 1781 thorized by the laws, to enforce prompt and 1782. Mr. Eveleigh served as payment of all debts to the United Comptroller until his death in 1791. States.” Oliver Wolcott, Jr., of Connecticut, who Joseph Anderson of Tennessee who was appointed Auditor when the Treas- had been the Comptroller since 1815 ury Department was organized, suc- was designated as First Comptroller. He ceeded Mr. Eveleigh. held this office until 1836. Richard Cutts 1 GAO AND ITS FUNCTIONS served as Second Comptroller until under the present statutory authority President Jackson’s wholesale removal of the Office. of Federal officials who had opposed his election in 1828. 1894 The Dockery Act President Grover Cleveland ap- 1823 Finality of Settlements proved on July 31 an appropriation act which included provisions to im- On October 20 the Attorney General, prove the methods of accounting in the William Wirt, in an opinion to Presi- Treasury. This section of the law is re- dent James Monroe, advised that the ferred to as the Dockery Act, after Rep- President did not have any power to resentative Alexander M. Dockery of interfere with settlements approved by Missouri. Representative Dockery and the Comptroller. He concluded that Senator Francis M. Cockrell, also of “when the Comptroller makes his de- Missouri, were the ranking members cision on an account, it is final and it is of a joint congressional commission es- manifest that the law contemplates no tablished in 1893 to examine the status further examination by an officer after of laws and efficiency of the executive such decision.’, Accordingly, he advised departments and establishments. The the President that there was no author- Dockery-Cockrell Commission recom- ity to interfere in the case of settlement mended a comprehensive revision of the of accounts, and “that the settlement audit and accounting methods of the made of the accounts of individuals by Government. the accounting officers appointed by law These recommendations were em- is final and conclusive so far as the bodied in various legislative proposals executive department of the Government which ultimately became the Dockery is concerned.” (1 Op. Atty. Gen. 624) Act. Under this act, a single Comptrol- To resolve the longstanding con- ler of the Treasury replaced the sev- troversy as to whether heads of depart- eral kinds of comptrollers which had ments had authority to revise actions mushroomed under previous laws and of the Comptroller of the Treasury, a which were abolished. Centralized con- bill was enacted by Congress and a p trol was vested in the Comptroller of proved by President Andrew Johnson, the Treasury. Six Auditors were desig- March 30, 1868, that clarified the mat- nated for the audit of particular de- ter. This act, which was initiated by partmental accounts; contracts were required to be deposited with the Audi- Senator William Pitt Fessenden, a for- tors; provision was made for the rendi- mer Secretary of the Treasury, provided tion by the Comptroller of decisions at that the decision of the Comptroller on the request of heads of departments the settlement of accounts shall be final and disbursing officers; and the finality and conclusive on the executive branch and conclusiveness of such decisions on of the Government, subject to revision the executive branch were continued. only by Congress or the courts. This The former officials who had held the finality provision was carried into the positions of First Comptroller and Sec- Dockery Act of 1894 and continues ond Comptroller, Robert B. Bowler of 2 GAO AND 1TS FUNCTlONS Ohio and Charles H. Mansur of Mis- rent resolution, thereby giving the Pres- souri, were reappointed by the Presi- ident a veto right over the resolution. dent to the positions of Comptroller of The principal functions vested in the the Treasury and Assistant Comptroller, GAO included (1) investigating all respectively. matters relating to the receipt, disburse- ment, and application of public funds, The General Accounting Office (2) making recommendations for leg- islation deemed necessary and those 1921-1971 looking to greater economy and effi- ciency in public expenditures, ( 3 ) mak- 1921 The Budget and ing investigations and reports ordered Accounting Act by either House of Congress or desig- The signing by President Warren G. nated congressional committees, (4) Harding on June 10 of the Budget and rendering advance decisions on legality Accounting Act marked the culmination of proposed expenditures, (5) settling of efforts of more than a decade to mod- and adjusting of all claims and demands ernize the budget and financial man- by or against the Government, and ( 6 ) agement system of the Federal Gov- prescribing accounting forms, systems, ernment. This act created the Bureau and procedures. of the Budget and established the Gen- eral Accounting Office under the con- 1921 McCarl Becomes First Comptroller General trol and direction of the Comptroller General of the United States. The GAO On June 28, three days before the was designated as an establishment in- effective date of the establishment of the dependent of the executive branch re- General Accounting Office, President porting to the Congress. The statutory Harding nominated J. Raymond Mc- duties formerly vested in the Comptrol- Carl of McCook, Nebr., age 41, as the ler of the Treasury and the six Audi- first Comptroller General of the United tors were transferred to the Comptrol- States. Mr. McCarl had served as Sec- ler General. retary to the Republican campaign com- Only a year earlier, on June 4, 1920, mittee during the 1920 presidential President Woodrow Wilson had vetoed election. Mr. McCarl who had gradu- similar legislation not because he was ated from the University of Nebraska not in sympathy with its objectives, but Law School came to Washington and because he believed the provision for served 14 years as private secretary to removal of the Comptroller General Congressman, and later Senator, and the Assistant Comptroller General George W. Norris. Mr. McCarl’s nomi- by concurrent resolution of the Con- nation was confirmed by the Senate on gress was an unconstitutional encroach- June 29. ment upon the President’s power of ap- pointment. The bill President Harding 1921 Ginn Named Assistant Comptroller General signed met the former President’s ob- jection by providing for removal by a On June 30, the President nominated joint resolution, rather than by concur- Lurtin R. Ginn of Indiana to be the 3 GAO A N D ITS FUNCTIONS Assistant Comptroller General and his single month to make a gain in each section nomination was confirmed by the Sen- and division of the establishment. It is coming thick and fast and will until we get rid of ate on the same day. Mr. Ginn was a all those thousands of war-time contracts and career employee of the Department of the demands of the soldiers, and the demands the Treasury and had been appointed of the widows and orphans, and the holders Assistant Comptroller of the Treasury of the registered bonds.’ to be in charge of a branch office established in Paris in 1918 to 1922 Audit Authority Over US. audit the overseas military establish- Shipping Board Emergency Fleet Corporation ment expenditures. One of the first questions confront- 1921 GAO Starts Operations ing the Office was whether it had au- thority to continue the audit of this The GAO began to function on corporation, a predecessor agency of July 1, when both Mr. McCarl and Mr. the Maritime Administration. The ex- Ginn were sworn in. According to an penditures of the Corporation had been article from the Washington, D.C., Eve- the subject of widespread concern by ning Star “There was not a hitch in the the Congress. Since the original law establishment of the Office of the Comp- had required an audit by the Secretary troller General of the United States and of the Treasury, there was doubt as to the two officials were at their desks on whether the GAO should continue the July 1, going over the appropriation work. By the act of March 20, 1922, measures and preparing the papers nec- the Congress clarified the matter and essary for a smooth running of the GAO was directed to audit the financial Government’s financial machinery.” transactions of the Corporation from Comptroller General McCarl de- July 1, 1921. This task culminated in scribed the beginning of the GAO to special reports made to the Congress the Subcommittee on hdependent Of- on September 30,1929, and January 8, fices of the House Committee on 1932. The thrust of these reports which Appropriations when he testified on resulted in congressional hearings was December 19, 1921, on funds for the the applicability of Federal financial new Office. statutes to the transactions of Govern- Mr. GRIFFIN. Does it appear when you ment corporations. organized your office and began work under the act of June 10, 1921? Mr. GINN. We commenced July 1, the date 1923 Adoption of a Seal the general accounting office came into exis- tence. We organized the night before. An official seal for use by the General Mr. MCCARL.There was no interruption. Accounting Office as authorized by the I was made comptroller late in the afternoon, 1921 Budget and Accounting Act was and Judge Ginn’s nomination was sent to the adopted. (See the inside front cover for Senate that day, and that night we wrote orders which converted the old accounting a facsimile of the current seal of the offices into divisions of the general accounting Office.) office and they were delivered the next morn- Hearing before a subcommittee of the House Com- ing, and we commenced functioning at 9 mittee on Appropriations on the Independent Offices o’clock sharp, and we have not failed in a Appropriation Bill, 1923, 67th Cong., p. 262. 4 GAO AND ITS FUNCTlONS 1931 Elliott Becomes Assistant than 65 years (1922-24). After only Comptroller General 14 months as Comptroller General, he Following the retirement of Lurtin had a stroke which necessitated his R. Ginn, President Hoover nominated retirement. Richard Nash Elliott, a former Member During the 1 9 3 0 ’ ~several ~ proposals of Congress, to be Assistant Comp- were made to abolish the General Ac- troller General. He assumed his duties counting Office or curtail its functions. on March 9. Mr. Elliott had served in (See p. 60 for the comments of Comp- the State Legislature of Indiana and troller General Warren on these for 14 years in the House of proposals.) Representatives. Upon the retirement of Mr. McCarl 1940 Warren Becomes Comptroller General in 1936, and again after illness neces- sitated the retirement of the next Comp- On August 1 President Roosevelt troller General, Fred H. Brown, Mr. nominated and the Senate confirmed Elliott served as Acting Comptroller the same day the nomination of Lindsay General. Mr. Elliott retired on April 30, Carter Warren to be Comptroller Gen- 1943, when he reached the mandatory eral. Mr. Warren had been Representa- retirement age. tive from the first district of North Carolina since 1925. He had been an 1936 McCarl Completes His Term influential Member of the House and had served as chairman of the House On June 30, at the expiration of his Committee on Accounts and also as 15-year term, Mr. McCarl retired. In ranking member of the Select Commit- the first 50 years of GAO, he has been tee on Government Reorganization. the only Comptroller General to serve Mr. Warren resigned from the House the full 15-year term provided in the of Representatives on October 31 and Budget and Accounting Act, 1921. assumed his duties as Comptroller Gen- eral on November 1. 1939 Brown Named Second Comptroller General 1943 Yates Designated Assistant On April 7, President Franklin D. Comptroller General Roosevelt signed the commission of Fred Herbert Brown as Comptroller Frank L. Yates received his commis- General, after the Senate confirmed the sion and took over the duties as As- nomination on April 3. Mr. Brown had sistant Comptroller General on May 1. been a strong Roosevelt supporter when Mr. Yates was a career employee of the he served as Senator from New Hamp- GAO, having begun his Government shire from 1933 to 1938. Prior to that service on October 1, 1919, in the Office time, he was successively Mayor of of the Auditor for War which was Somersworth, N.H. ; US. attorney dur- merged with the newly created GAO ing President Wilson’s administration ; in 1921. Mr. Yates had served succes- and the first Democratic Governor of sively as attorney conferee under Comp- the State of New Hampshire in more trollers General McCarl, Brown, and 5 GAO AND ITS FUNCTlONS Warren. Mr. Warren stated at the time Act, 1921, indicated a congressional in- “that the GAO was fortunate in being tent that the General Accounting Office able to command at this critical time, was independent of the executive branch in a position of such high responsibility, and the agent of the Congress, it was the services of one whose loyalty, not until the enactment of the Reorgani- ability, and experience give him un- zation Act of 1945, approved on Decem- surpassed qualifications for the office ber 20, that it was made clear that the of Assistant Comptroller General.” General Accounting Office was a part of Mr. Yates served as Assistant Comp- the legislative branch of the troller General until his death on Government. June 29,1953. 1946 The Anti-Kickback Act 1945 Government Corporation Under this act, approved March 8, Control Act GAO was given power to inspect plants A significant development in the Fed- and audit books and records of contrac- eral Government’s financial system was tors engaged in performing cost-plus-a- marked when the Government Corpora- fixed-fee or cost reimbursable contracts tion Control Act was signed by Presi- for the purpose of ascertaining whether dent Harry S. Truman on December 6. fees, kickbacks, gifts, or gratuities were This act which provided that the finan- paid by subcontractors to secure the cial transactions of all Government cor- award of subcontracts or orders. porations should be audited by the General Accounting Office in accord- 1946 Peak GAO Employment ance with principles and procedures Early in 1946, GAO reached the applicable to commercial corporate highest level of employment in its his- transactions succeeded a more limited tory-l4,904 employees. act approved February 24,1945, known as the “George Act” after Senator 1946 Legislative Reorganization George, one of the sponsors of the legis- Act of 1946 lation. The need for annual scrutiny and control by the Congress of the financial The Legislative Reorganization Act transactions and operations of Govern- of 1946, approved on August 2, was ment corporations was first outlined in described by President Truman as one the Comptroller General’s annual report of the most significant advances in the for the fiscal year 1928. Pursuant to organization and operation of the legis- this statutory mandate, the Corporation lative branch. Comptroller General Audits Division under the supervision Warren had testified before the Joint of a certified public accountant was es- Committee on the Organization of Con- gress on the need to strengthen con- tablished in GAO. (See p. 88.) gressional control over Federal ex- penditures and to equip the Congress 1945 Reorganization Act of 1945 with modern machinery to enable it to Notwithstanding that the legislative perform properly its appropriating and history of the Budget and Accounting legislative functions. 6 GAO AND ITS FUNCTIONS Insofar as GAO was affected, this act the Federal Government would be provided for studies by GAO of the re- undertaken as a joint venture by the strictions on appropriations and the three central agencies. To provide GAO cost to departments and agencies in leadership in this program, the Ac- complying with such restrictions. Fur- counting Systems Division was formed ther, the act authorized the Comptrol- in January 1948, headed by Walter F. ler General to make expenditure analy- Frese. ses of each agency of the Government to On October 20, 1948, the Comptrol- enable Congress to determine whether ler General addressed a letter to the public funds have been economically heads of all Federal agencies enlisting and efficiently administered. Although their cooperation in the program. This funds were never appropriated to spe- cooperative program led to many ad- cifically implement the expenditure vances in the Government’s financial analysis mandate, the GAO has fol- practices through legislation as well as lowed the practice of including in its through modernization of agency pro- audit reports instances found where cedures. Annual progress reports have public funds have not been economically been made describing the accomplish- and efficiently administered or ments of the program. expended. 1949 Federal Property and 1949 Joint Program for Improving Administrative Services Act Accounting in the Federal Government This act, signed into law on June 30, On January 6 Secretary of the Treas- included authority for the Comptroller ury, John W. Snyder; Director of the General to prescribe accounting prin- Bureau of the Budget, James E. Webb; ciples and standards for Government and Comptroller General, Lindsay C. property, approve property accounting Warren, signed the document which systems, and examine and report on established officially the cooperative ef- such systems in operation. fort then designated as the Joint Pro- 1949 Published Description of GAO gram for Improving Accounting in the Functions and Activities Federal Government. Since 1959 the program has been generally referred On October 14, the first detailed de- to as the Joint Financial Management scription of the functions and activities Improvement Program. of the General Accounting Office was This program grew out of discussions published by the House Committee on late in 1947 between representatives of Expenditures in Executive Departments. the General Accounting Office, the This publication, entitled “The GAO-A Treasury Department, the Bureau of the Study of Its Functions and Operations,” Budget, and the Senate Government Op- was issued as the fifth intermediate re- erations Committee. It was agreed that port of the committee during the 81st improving accounting and reporting in Congress (H. Rept. 14dJ). The late 7 GAO AND ITS FUNCTIONS Following enactment of the Federal Property and Administrative Services Act in 1949, Lindsay C . Warren, Comptroller General, and Jess Larson, Administrator of General Services, meet in February 1950 to work out cooperative working arrangements for improving property accounting and management in Federal agencies. William Dawson, chairman of the com- and decisions applicable to financial mittee that had legislative oversight transactions of Federal agencies. over GAO, stated that the “publication would promote more effective use of 1950 Post Office Department the services made available to the Con- Financial Control Act gress by the General Accounting Office.” This act, approved August 17, trans- ferred to the Post Office Department the 1949 Institution of Comprehensive accounting for postal operations pre- Audit Program viously performed by GAO. It directed This program was instituted by the the Department to develop an up-to-date Comptroller General on October 19. system of accounting under principles The program was defined as including and standards prescribed by the Comp- the audit of receipts, expenditures, and troller General, with his cooperation application of public funds; the verifi- and subject to his approval. Provision cation of assets, liabilities, proprietary was also made for GAO audit at the sites accounts, and operating results of Fed- of postal operations in accordance with eral agencies; and the determination of generally accepted principles of compliance with all laws, regulations, auditing. 8 GAO AND ITS FUNCTIONS J 1950 The Budget and Accounting It was on New Year’s Day 1951 when Procedures Act of 1950 the present Assistant Comptroller Gen- At a special signing ceremony at the eral, Robert F . Keller, then Assistant White House on September 12, Presi- to the Comptroller General, assisted dent Truman signed into law the Budget Congressman Porter Hardy in the draft- and Accounting Procedures Act of ing of an amendment to give the 1950. He described the act as “provid- Comptroller General authority to ex- ing a firm foundation for modernizing amine contractors’ records under con- the Government’s accounting along effi- tracts entered into or amended during cient lines to serve management pur- the period when the Government ex- poses, safeguard the public funds, and ercised its war and emergency author- inform the Congress and the taxpayers ity. Subsequently, permanent access to clearly of what happens to the funds records legislation was enacted by provided for Government activities.” Public Law 82-%5, approved Octo- Comptroller General Warren, who ber 31, 1951. Under this law, GAO has attended the ceremony along with con- the authority to examine records in- gressional leaders and others, stated cident to negotiated contracts. This that “the act was the result of extended right of the GAO to access to con- study and discussion and grew out of tractors’ records was judicially affirmed recommendations from many view- in a landmark opinion in the Hewlett- points for the improvement of budget- Paclcard case (9th Circuit Court of ing, accounting, financial reporting, Appeals, Nov. 15,1967). and auditing for the Government.” The act directed the Comptroller 1951 Dedication of GAO Building General to prescribe accounting prin- On September 11 President Truman ciples and standards for Federal agen- dedicated the GAO Building. The ac- cies, cooperate in the development of quisition of such a building had been their accounting systems, and approve sought since the formation of the Office such systems when they are deemed in 1921. (Seep. 115.) adequate. Provision was made for com- prehensive and selective site audits of 1953 Weitzel Becomes Assistant agency operations, and for considera- Comptroller General tion of the effectiveness of agency ac- To succeed Frank L. Yates, President counting systems, internal controls, Dwight D. Eisenhower nominated and related administrative practices. Frank H . Weitzel to be Assistant Comp- troller General under a recess ap- 1951 Authority for Access to Contractors’ Records pointment. The Senate confirmed his nomination on January 18, 1954. At The first general statutory clause on the time of his appointment Mr. GAO access to contractors’ records was Weitzel had served 25 years with the enacted on January 12 by Public Law GAO. For the preceding 11 years Mr. 81-921, an amendment and extension Weitzel had served in Comptroller of the First War Powers Act of 1941. General Warren’s office as assistant in 9 0 rl GAO AND irs FUNCTIONS To amend section 304 of the Federal P r o p r t s and Admini-trafiie Seivice> , k t of 1849 and section 4 of the Armed S e r v i m Prncurenient . k t of 1947. Re it enacted by the Senate and Eouse o Reprew-ntatiurr of thr United Staten of Alnerica in Congress es*rem&ed. That sectioii 301 of the Federal Pro rty and Administrative Services Act of 1948 and section 4 of the g m e d Services Procurement Act of 184i are hereby amended by inserting at the eiid of the above-named sections the following new subsection : “(e). All contracts negotiated without advertising ~)iirsuant to authority contained in this Act shall include a clause to the effect that theComptrollerGeneralof theunitedstatesor any of hisdulpauthor- ized representatives shall until the expiration of three years after final ayment have access to and the right toexamine any directly pert iiient &IO& documents, papers, and records of the contractor or any of his subcontractors engaged in the performance of and involving traiibat- tions related to such contracts or subcontracts.” APPROVED President of the Senate. I- - 1 charge of the legislative program. Mr. nancial Management Improvement Weitzel had played an important role Program, in the drafting of the Government Cor- Following Mr. Warren’s retirement poration Control Act, the Federal Prop- for reasons of health on April 30,1954, erty and Administrative Services Act of Mr. Weitzel served as Acting Comp- 1949, the National Security Act troller General until the appointment Amendments of 1949, and the Budget of Joseph Campbell, and following Mr. and Accounting Procedures Act of Campbell’s retirement on July 31,1965, 1950. Mr. Weitzel had also taken a Mr. Weitzel again served as Acting leading part in instituting the Joint Fi- Comptroller General for 7 months. 423-774 0 - 7 1 -2 11 GAO AND ITS FUNCTIONS Frank H . Weitzel takes oath o f ofice as Assistant comptroller General, January 21, 1954. Judge James R . Kirkland, U.S. District Court o j D.C., administers the oath as Comptroller General Lindsay c. Warren looks on. Mr. Weitzel retired from Government Comptroller General on December 14, service at the end of his 15-year term 1954, under a recess appointment. His on January 17,1969. nomination was confirmed by the Sen- ate March 4, 1955. Mr. Campbell served 1954 Joseph Campbell Becomes until July 31,1965, when for reasons of Comptroller General health, he was forced to retire. President Eisenhower nominated 1955-56 House Government Joseph Campbell to be Comptroller Operations Study of GAO General on November 9. At that time he was serving as one of the three com- A special subcommittee on the GAO missioners of the Atomic Energy Com- consisting of Congressmen William L. mission. Mr. Campbell had extensive Dawson of Illinois and Glenard P. Lips- professional experience as a certified comb of California made a study of the public accountant in New York City, organization and operations of the Of- and he had served as vice president and fice. The report, known as the “Lips- treasurer of Columbia University and comb report” (H. Rept. 2264, 84th in other capacities from 1941 to 1953. Cong., 2d sess.) , contained numerous Mr. Campbell assumed his duties as recommendations which were the sub- 12 GAO AND ITS FUNCTIONS ject of detailed evaluation in the Comp- relating to the pricing of negotiated troller General’s report to the commit- Government contracts. tee on November 1, 1956 (B-122882). 196546 House Government 1962 The “Truth in Negotiations” Operations Study of Act GAO Audits of Defense Contracts On September 10 President John F. Kennedy signed into law the act which The Military Operations Subcommit- during its progress through the legisla- tee, chaired by Congressman Chet Holi- tive machinery became known as the field of California, conducted hearings “Truth in Negotiations” Act (Public concerning criticisms that had arisen in Law 87-653). industry and from within the Govern- This act was designed to enable the ment about GAO practices in contract departments to conduct more meaning- auditing and reporting. The committee’s ful negotiations with better cost data so report on “Defense Contract Audits,” that the Government would be able to dated March 23, 1966 (H. Rept. 1344, obtain more advantageous contract 89th Cong., 2d sess.) contained com- prices. In large part, this law was one ments and recommendations on a num- result of numerous GAO audit reports ber of issues pertaining to such audits. Swearing in of Elmer B. Staats as Comptroller General of the United S t a e s b y Judge E. Barrett Prettyman of the U.S. Court of Appeals, March 8, 1966. Mrs. Staats is holding the bible and President Lyndon B . Johnson is at the right. 13 GAO AND ITS FUNCTIONS It also included a letter from Acting son. Before beginning his Government Comptroller General Weitzel describing career Mr. Staats served with the Kansas changes being made in GAO audit and Legislation Council in Topeka and with reporting practices relating to the issues the Public Administration Service in raised by the committee. Chicago. 1966 Staats Named 1969 Keller Designated Assistant Comptroller General Comptroller General President Lyndon B. Johnson an- Robert F. KelZer, General Counsel, nounced the nomination of Elmer B. was nominated by President Richard M. Staats to be Comptroller General on Nixon to be Assistant Comptroller Gen- February 11. The Senate confirmed the eral succeeding Frank H . Weitzel on appointment on March 4, and he was August 26. The Senate confirmed Mr. sworn into office at a ceremony in the Keller’s nomination on September 26, East Room of the White House attended and he was sworn in on October 3. Mr. by the President, members of the Cabi- Keller began his career in GAO in 1935 net, and heads of agencies on March 8. and served in the former Reconciliation Mr. Staats, a native of Kansas, served and Clearance Division, the Claims as Deputy Director of the Bureau of the Division, and as a legislative attorney Budget (now Office of Management and in the Office of the Comptroller General. Budget) under four Presidents: Tru- In 1953 he was appointed as principal man, Eisenhower, Kennedy, and John- Assistant to the Comptroller General in Frank H . Weitzel, Assistant Comptroller General ( l e f t ), greets incoming Comptroller General ELmer B. Staats, March 1966. 14 GAO AND ITS FUNCTIONS Comptroller General Elmer B. Staats and Robert F . Keller meet with President Richard Nixon at the Y h i t e House at the time of Mr. Keller’s appointment as Assistant Comptroller General, October 1969. charge of congressional liaison activi- need for congressional reform and on ties. In 1958 Comptroller General the capabilities of GAO to develop in- Campbell appointed him General formation for the Congress. Counsel. The act requires GAO to cooperate with the Treasury and the Office of 1970 Legislative Reorganization Management and Budget in developing Act of 1970 a standardized information and data processing system for budgetary and President Nixon signed on October 26 fiscal data; to review and analyze the the first legislative reorganization bill results of Government programs and in more than 25 years. It was designed to provide the Congress with better and activities, including the making of cost more comprehensive information on benefit studies; and to furnish periodic which to base its decisionmaking proc- lists of GAO reports to all committees esses. The legislation was the result of and Members of Congress. Department several years of careful study and con- and agency heads are required by the siderable debate. On August 5, 1965, act to advise the Senate and House Com- Assistant Comptroller General Weitzel mittees on Government Operations and testified before the Joint Committee on Appropriations of the actions taken on the Organization of Congress on the recommendations made in GAO reports. 15 Recollections of June 1921 The following article, written by Eugene C. Miller, a GAO employee, was published in The Watchdog for July 1946 when GAO was noting its 25th anniversary. The month of June 1921 is a month From time to time the Comptroller to be remembered by those employed of the Treasury would call for accounts in any one of the six Auditing Offices. which had been settled by the various The act of June 10,1921, brought about Auditors and examine them to see that the greatest change ever made in Gov- the accounts were being properly ernment Accounting. audited. Questions involving legal mat- At the time the writer was Chief of ters in the disbursement of Federal the Accounting Unit of the Auditor for funds were submitted by the Auditors the War Department which was known to the Comptroller of the Treasury for as the Second Auditor’s Office because decisions. it was the second auditing office created. The office of the Comptroller of the We were busily engaged in settling ac- Treasury consisted of 88 employees counts for expenditures made during and officials. the First World War and had thousands Auditor for the Treasury Department of temporary employees doing auditing had 205 regular officials and employees work. and about 50 temporary employees. The six auditing offices operated as Auditor for the War Department had a part of the Treasury under the super- 364 regular officials and employees and vision of the Comptroller of the Treas- about 10,000 temporary employees. ury. T h e head of each auditing office Auditor for the Navy Department had was designated “Auditor” for the re- 240 regular officials and employees and spective department, such as: about 1,800 temporary employees. 1. Auditor for the Treasury Auditor for the Interior Department Department. had 101 regular officials and employees. 2. Auditor for the War Department. Auditor for the State and other de- 3. Auditor for the Navy Department. partments had 123 regular officials and 4. Auditor for the Interior employees. Department. Auditor for the Post Office Depart- 5. Auditor for the State and other ment had 350 regular officials and em- departments. ployees and about 340 temporary 6. Auditor for the Post Office employees. Department. In all there were about 13,661 em- 16 RECOLLECTIONS OF JUNE 1921 ployees and officials in the six Auditing There were so many different forms that Offices under the Treasury Department, the Public Printer had to take down the in June 1921. parts used in setting up the plates after The official hours for work were from each order was printed. This delayed 9:OO a.m. to 4:30 p.m. with half an the filling of new orders and forced the hour for lunch, Monday through Satur- heads of bureaus to order larger quan- day, except on holidays. The employees tities than were actually needed for use. were paid in cash on the 15th and last The large orders and poor storage often day of each month. resulted in many forms becoming torn, Auditors were very much opposed to wrinkled, soiled or faded. This proce- employees joining any union and severe dure was exceptionally costly. The penalties were inflicted upon those who Comptroller of the Treasury or the dared join any union. A Mr. Emmit various bureau chiefs did not seem to Hamilton was then Chief Clerk of the realize that a few standard forms could Quartermaster’s Office and he persuaded be used by all and that the Public one Mr. McLarren to accept the presi. Printer would keep the forms once set dency of the first union formed by up in his files and whenever he found about a dozen employees from the In- any spare time, a supply would be terior Department, War Department printed and kept on hand so that bu- and the Auditor for the Post Office reau chiefs could then have orders filled Department. the same day without the cost of setting Salaries paid officials and employees up new plates and at practically the cost in the auditing offices were very low. of the paper used. Chiefs of Divisions received $2,000, Appropriation symbols were consid- $2,250 or $2,500 per annum. Clerks re- ered just so much extra work and few ceived $900, $1,000, $1,200, $1,400, if any of the officials or employees gave $1,600 and $1,800 per annum. Most of any consideration to the practice which the employees were in the four lower has proven to be very useful in appro- grades. Whenever the Congress made priation accounting. appropriations in one sum for the sal- There was no Standard Allotment Ac- aries to be fixed by the head of the counting System. Every chief of bureau respective departments there was a set up what he thought was a system clause limiting the maximum salary to of Allotment Accounting but the results $1,600 or $1,800 per annum. were so meager and fragmentary as to The Comptroller of the Treasury consume much valuable time without was very lax in examining forms sub- setting forth essential information for mitted for his approval. There was no administrative purposes. The present evidence of any kind which would in- Standard Allotment System produces dicate that any consideration was all essential information with the least given to the standardization of forms. amount of work. There were 31 different forms used for All postings to appropriation and accounts current; 26 different forms of personal ledgers were made by pen. Schedule of Disbursements and 21 dif- This was a slow procedure and con- ferent forms of Schedule of Collections. sumed much unnecessary time. Pre- 17 RECOLLECTIONS OF JUNE 1921 determined totals could not be used for copies so that the disbursing officer, ad- checks on the accuracy of the posting ministrative officer and the payee can and as a result many errors crept into have a copy besides having enough for the accounts. Before a fiscal officer’s ac- the files of the General Accounting count could be settled it was necessary Office. to request an abstract of the items not + + * + * used in previous settlements and if the Treasury Regulations as well as Reg- abstract did not agree with the amounts ulations of other departments were is- as settled, it was necessary to reconcile sued in bound volumes and the head of the difference. This frequently took as every office would oppose any change much time as it did to settle the account. in the Regulations with all his power. This waste of time has been largely No official wanted his Regulations eliminated by the use of predetermined pasted full of fly leaves or changed by controls and machine postings which pencil or pen and as a result all progress are added as posted. would be delayed for the establishment Exceptions (suspensions or disallow- of better procedure. Standardization of ances) used to be typed on legal sized accounting procedure forced the use of paper and often i t required a hundred loose leaf Regulations and the discon- sheets to type the exceptions for one tinuance of the delaying of necessary fiscal officer. This hundred-page pam- improvements by officials who dislike to phlet would be fastened by a metal fast- read Regulations changed a dozen times ener. Each time the fiscal officer’s ac- on the same sheet. counts were settled, all of the exceptions In May and June, 1921, rumors re- not cleared by collection or by furnish- garding official positions in the new ing necessary evidence were retyped office, the General Accounting Office, and incorporated into the new pamphlet were numerous. All seemed to indicate (called a difference sheet). In this man- that Mr. W. W. Warwick the then ner thousands and thousands of excep- Comptroller of the Treasury would be tions were written over and over again. the first Comptroller General of the This enormous amount of recopying re- United States. It was generally under- quired the full time of many typists. stood that he was at the bottom of the Practically all officials and employees change to have the six Auditors and were of the opinion that exceptions couldn’t be written up separately and the Comptroller of the Treasury set up filed in a loose file cabinet. Only the as an independent agency. Naturally original copy of the Difference Sheet the Auditors were not in favor of hav- was mailed to the Disbursing Officer. ing their jobs abolished and strained He had to retype the exception and send relations soon were evident to even the it to the administrative officer involved messengers. To add to the strained re- where it was retyped into a letter to be lations the Paris Branch of the Auditor mailed to the overpaid employee or for the War Department had returned payee. The payee’s reply would come some months previously with tons of back over the same procedure. Today vouchers to be audited. This, added to each exception is written in enough the tons on hand to be audited, created 18 RECOLLECTIONS OF JUNE I921 a herculean task. Mr. Madding who of J. Raymond McCarl as the First was the Assistant Auditor for the War Comptroller General of the United Department returned to his former PO- States. sition and Mr. Howard, his assistant in Mr. Warwick was so sure of being Paris, who was an accountant of many appointed Comptroller General of the years of auditing and accounting ex- United States that he had a provision perience, returned to the Accounting incorporated into the Act to limit the Unit. Mr. Warwick selected Mr. Maher, term to 15 years and retirement at 70 Chief of the Pay Division, to take years. Mr. Warwick was 55 years of age charge of the auditing in the six Audit- at the time. ing Offices and naturally the strained Judging from the many recommenda- relations between the Auditors and tions made by Mr. Howard to Mr. War- Comptrollers grew worse. Mr. Maher wick and the latter’s approval of same, was not very careful in selecting his key it appears that many of the provisions men and as a result the auditing was incorporated into the Act creating the being so poorly done that it reached the General Accounting Office originated in ears of Congressmen. They made an the mind of Mr. Howard, who was an investigation and about June 28 the efficient accountant with years of ex- newspapers announced the appointment perience in Government Accounting. 19 ELLSWORTH H. MORSE, JR. DIRECTOR, OFFICE OF POLICY AND SPECIAL STUDIES y#g:-/& The Application of Public Funds GAO accountants and auditors are indoctrinated early in their careers with the significance of this term to the broad grant of authority given by law in I921 to the Comptroller General to examine into the operations and affairs of Federal agencies. This article examines this authority and responsibility of the Comptroller General as intended by the concerned Members of the Congress when the Budget and Accounting Act was being debated. Section 312 of the Budget and Ac- plication of public funds” in this law counting Act, 1921, is one of the most and the breadth of its intended meaning. important sections of the act. It leads off with the following direction: Legislative History The Comptroller General shall investigate, at the seat of government or elsewhere, all The bill which was ultimately enacted matters relating to the receipt, disbursement, into the Budget and Accounting Act, and application of public funds * + *. 1921, was originally introduced in the The reason for its importance is that House of Representatives in October it provides very broad authority to the 1919 (66th Cong.) . It had been pre- Comptroller General, as head of the pared by the Select Committee on the General Accounting Office, to inquire Budget, a House committee which had into, review, and evaluate the manner been appointed to study the budget sys- in which departments and agencies of tem. The committee held hearings in the Federal Government carry out their September and October 1919 and took responsibilities. The section goes on to testimony from numerous authorities in provide for the reporting to the Con- the field of government finance, legisla- gress of findings by the Comptroller tors, and others. General based on the work of the Gen- The bill (H.R. 9783), after some eral Accounting Office including the amendment, was first passed by the making of “recommendations looking House on October 21, 1919, and then to greater economy or efficiency in pub- sent to the Senate. The Senate first lic expenditures.” passed its version on May 1, 1920. The Because of the broad authority conference report was approved late in granted by this section, it is of interest May 1920, and the act was sent to Pres- to examine the origin of the term “ap- ident Wilson for signature. On June 4, 20 APPLICATION OF PUBLIC FUNDS 1920, he vetoed the act as passed be- sachusetts during the floor debate in cause of the provision preventing the the House on October 21, 1919. His removal of the Comptroller General and amendment was discussed briefly but the Assistant Comptroller General for was rejected at that time. No similar any cause except by impeachment or change was proposed for the Senate concurrent resolution of the Congress. version so that the bill as first passed, It was the President’s view that this re- and vetoed by President Wilson, did not striction was unconstitutional on the contain the term. basis that the power to appoint officers When this legislation was being re- of the Government carried with it the considered by the next Congress in May power to remove them. 1921, Mr. Luce again introduced his New bills to provide a national amendment and this time it was budget system and an independent audit adopted. of Government accounts were intro- duced in the House and Senate in April Intended Meaning 1921 after the 67th Congress convened. The Senate bill (S. 10%) received When Mr. Luce first proposed the in- speedy action. It was introduced in the sertion of the term “application” in the Senate, referred for committee action, bill, he made the observation that he reported, considered, amended, and had been unable to find anywhere in passed-all within 2 days’ time. The the bill as proposed a statement of what House bill (H.R. 30) was considered he understood its purpose to be. He then went on: and passed by the House early in May * * * They (the committee) told us that 1921. Differences between the two in here creating two new agencies, one a Houses were worked out through the bureau of the budget and the other a comp- conference process and the conference troller general, they desired to secure study report was agreed to by May 27, 1921. and criticism of the operations of government The legislation was approved by Presi- which would accrue to the common advantage. Let me cite for example the words of their dent Harding June 10, 1921. chairman in his own report: As originally introduced, the bill to “The comptroller could and would be ex- provide a national budget system and pected to criticise extravagance, duplica- tion, and inefficiency in executive depart- an independent audit of Government ments.” accounts did not contain the term “ap- We want the comptroller to do that. We are plication” in relation to “public funds.” passing this law in order that he shall do As introduced, this section read, in part, that, but there is not one word in the bill which tells him to do that. There is not one as follows: word in the bill which tells the budget bu- That the Comptroller General shall inves- reau to do that. It may be that I am tread- tigate, at the seat of government or else- ing on dangerous ground, that there is some where, all matters relating to the receipt and practical reason why this bill was written disbursement of public funds * * *. without anywhere giving a concrete and spe- cific definition of the duties of these offi- The insertion of the term “applica- tion” in this section was first proposed ‘Mr. Luce served as a Republican Member of Con- gress from Mar. 4, 1919. to Jan. 3, 1935, and from by Congressman Robert Luce of Mas- Jan. 3, 1937, to Jan. 3, 1941. 21 APPLEATION OF PUBLIC FUNDS cers. Fools rush in where angels fear to tread, since the Congressional Record records and possibly I am approaching something applause. However, convincing as these that the committee has considered and per- remarks may have sounded, Mr. Luce’s haps not thought wise to put into the bill. If its members will show me anywhere in it a proposed amendment was rejected a clear statement of what these officers a r e to short time after it was made. do in the way of criticism I will gladly with- When the legislation was being re- draw my suggestions of amendment, sugges- considered in the House in May 1921, tions offered not in hostility but for the pur- pose of illuminating what seem to me should Mr. Luce offered his amendment again be the very heart and center of this with the following comment: measure. * 0 * Mr. Chairman, my amendment is very brief, Later in the course of the same de- and yet it is vital. It may b e that the amend- ment will receive the approval of the com- bate, Mr. Luce again stated his pur- mittee, but in any case it will be worth while pose. to take time to set down in the RECORD My desire is that we shall get into this bill the meaning of this section. I speak with a declaration to those men “to go to it,” to earnestness in the matter, because I come exercise Criticism. * * * nowhere does the from a State that has been wrestling with this bill itself say they are to be fearless in their problem for years and has a t last reached a examinations, or, indeed, that they are to solution which 1 hope in point of success make any examinations a t all for critical may be followed in the law before us. purposes. * * * The problem of efficiency in the adminis- tration of government is one of the most s e n - During this part of the debate, Mr. ous problems confronting the American peo- Luce offered the following indication ple. To solve it in my own State we provided of his interpretation of the Comptroller first for a commission that should serve in a General’s function if the term “applica- censoring capacity. After a few years it proved tion” or some similar term were not wise to replace the commission by a single commissioner, and we now have one man in added in clarification of the intent of Massachusetts whose sole occupation i t is the Congress. to study the efficiency of government All I am asking is, if you mean to authorize administration. this man to criticize, to study, and investigate I n this bill, if I understand aright the pur- for the purpose of securing economy, that the poses of the committee, it is contemplated that committee shall, if they do not approve my the comptroller general shall perform the way of directing it, suggest some way of their same functions; and if I seem to you to have own, so that no man when he goes into that given a superfluous explanation in the matter, office can rely upon the statute and say “This it is solely in order that we may get clearly law imposed on me but a purely ministerial in the RECORD our expectation that this function, made me a human adding machine, man shall make it his duty, his constant, un- and my only duty is to total up the figures remitting duty-from which he can not es- that are laid before me and to transmit them cape by any recourse to the language of the to the Congress.” bill-his constant, unremitting duty to search for methods of economy i n saving for the At another point in Mr. Luce’s dis- Government. ccssion on the floor, he stated that the I t is in this particular section that we can purpose of his proposed amendment make this clear. The section was worded, I was to make it clear to the Comptroller fear, in a way that might have led some oc- cupant of this office to imagine that his func- General that “he is to examine how these tions were purely clerical; that is, the func- funds are used.” At this point, Mr. Luce tions implied by the word “accountant.” The must have been reasonably convincing words used have the savor of the bookkeeper, 22 APPLICATION OF PUBLlC FUNDS of the cashier, of the treasurer, not of the Except for some discussion of punc- investigator of the way money is spent, not of tuation, only one other Congressman the man who goes out and looks for trouble, entered into the discussion of the term. not of the man who attempts of his o w n ini- tiative to find places to save money. Therefore This was Henry A. Cooper of Wiscon- I make the suggestion that we add to the sin. The recorded exchange involving words of the cashier and the treasurer and him was as follows. the accountant, namely, “receipt and disburse- Mr. COOPER of Wisconsin. Mr. Chairman, I ment,” the word “application.” If there ever would like to ask the gentleman from Massa- was presented on this floor a single word of chusetts (Mr. Luce) just what the word amendment which might have a wider extent “application” means, as distinguished from of usefulness to the people, it has not come “disbursement” ? to my knowledge. Mr. GOOD.The application of the disburse- I hope, sir, that if this is satisfactory to the ment, how the money was used, the uses to committee, the chairman may supplement what I say, in order that there never may be which i t was put, I suppose that is the inten- tion of the gentleman from Massachusetts any question that we did not mean this man to be simply a bookkeeper, simply a cashier, (Mr. Luce). simply an accountant, but that we meant him Mr. COOPER of Wisconsin. It does not mean to be our will, our eyes, and our ears, to study that he himself can direct the application? and determine and enforce economy. He reports how it was applied? (Applause.) Mr. GOOD.No; it does not mean that he can direct the applioation. He reports whether Congressman James W. Good of it was applied efficiently, whether it was Iowa, the chairman of the committee wisely spent. He has no power to direct referred to, acknowledged Mr. Luce’s expenditures. remarks and responded in the following Mr. COOPERof Wisconsin. He does not suggest anything outside of the law? words. Mr. LUCE.The purpose, Mr. Chairman, is When we prepared this bill we thought we to make it sure that the comptroller general had included the idea whioh the gentleman shall concern himself not simply with taking has incorporated in his amendment. We pro- in and paying out money from an accountant’s vide in the latter part of that section * * * point of view, but that he shall also concern that in the regular reports or in special reports himself with the question as to whether i t is made to Congress from time to time he shall economically and efficiently applied. make recommendations for greater economy The comments made in connection and efficiency. I have no objection to the with the proposal to insert the word words which the gentleman’s amendment in- “application” in the bill are very clear serts in this section. It was the intention of the committee that the comptroller general should that the term was intended to leave no be something more than a bookkeeper or ac- doubt that the Comptroller General countant; that he should be a real critic, and should include in his examination work at all times should come to Congress, no mat- an evaluation of the use made of public ter what the political complexion of Congress funds. or the Executive might be, and point out in- While the insertion of the term in the efficiency, if he found that money was being misapplied-which is another term for in- bill and the related discussion served to efficiency-that he would bring such facts to clarify the intent of the Congress in the the notice of the committees having jurisdic- matter, a review of the Select Commit- tion of appropriations. Therefore I have no tee’s report’ on the 1919 bill leaves no objeotion a t all to the gentleman’s amendment. I think it will subserve a useful purpose. ’H. Rept. 362, 66th Cong., 1st sess. 23 APPLlCATlON OF PUBLIC FUNDS doubt that such was the intention of the that there was no substantial disagree- framers of the bill all along. ment with the general idea that the For example, the report states in one Comptroller General’s function would place that: include a critical review of how public Under the present plan the Congress has no funds were spent. Some of the comments power or control over appropriations after made during the debates which bear on they have once been made. It has no knowl- this observation are of interest. edge as to how expenditures are made under these appropriations, and inasmuch as the Joseph W . Byrns of Tennessee: Comptroller of the Treasury and the six Now, it was the thought, and I am sure auditors owe their appointment to the Presi- the gentleman will agree, that Congress, which dent they could not hope to hold their posi- makes the appropriations, should have the tions if they criticized wastefulness or ex- ultimate control of the expenditures; and the travagance or inefficiency in any of the only way to do that was to provide that departments. Congress should have independent o5cers to This was elaborated further in the make report as to how the money was following paragraph. expended. The only way by which Congress can hold William W. Hustings of Oklahoma: a uheck on expenditures is to continue a con- trol a n d audit of the accounts by an independ- I favor it (the bill under discussion) be- ent establishment. The tenure in office of the cause it will cause a closer scrutiny of every comptroller general and the assistant item that goes into an appropriation bill, and comptroller general is made during good be- after the funds are made available the ex- havior in order to secure competent men to penditures will be more closely examined and occupy the positions and to make them ab- criticized. solutely independent of the Executive in their + i c y r * * * decisions. The position is a semijudicial one, The Comptroller General is charged with and the tenure in office is made secure so long the responsibility of auditing every expendi- as the comptroller general performs his work ture made by the various departments and in a satisfautory manner. The creation of this bureaus and is required to make a report in department will enable it to furnish informa- writing annually, making such suggestions as tion to Congress and to its committees regard- to changes in legislation thought desirable ing the expenditures of the Government. He and giving such information as may be help- could and would be expected to criticize ful to Congress. In this way the advocates of extravagance, duplications, and inefficiency in the system hope to focus public attention upon executive departments. He could do this with- every item of extravagance and eliminate the out fear of removal. Under the present plan same and consolidate bureaus that are doing neither the Comptroller of the Treasury or the the same general character of work, thereby six auditors make such criticism. The reasons avoiding duplication. why they do not are apparent, yet opportuni- ties for wholesome criticism abound in every James W.Good of Iowa: department. The creation of this department will, it is seen, serve as a check not only on That department (the comptroller general) useless expenditures, but will keep the bureau ought to be independent and fearless to criti- more keenly alive to a rigid performance of its cize wrong expenditures of money wherever it duties and obligations. It has been urged by finds them. It ought to criticize inefficiency in some as the most important forward step in the every executive department where inefficiency process of wise budgetary reform. exists, and one of the troubles with our pres- ent system is that the auditors dare not criti- A review of the debates on the bills, cize. If they criticize, their political heads will particularly in the House, also reveals come off. APPLlCATlON OF PUBLIC FUNDS Clay S. Briggs of Texas: istrative branch of the Government under this law, with such information as will enable it And through the audit, investigation, super- to intelligently criticize the acts of the vision, and recommendations of the comp- administration. troller general, it ought to be possible to clearly present to Congress just in what * + * * * branches of the Government duplication of The responsibility placed on the comptroller work and effort, as well as waste and extrava- general under this law will enable him to gance, exist, and the best methods of eliminat- ascertain the wisdom as well as the legality ing same. of the expenditures, and permit him from time to time to report to Congress as to what economies ought to be effected by the execu- Martin B. Madden of Illinois: tive branch of the Government and in that On the other hand, it will be the function way attention will be called to the laxness, of the comptroller and auditor to supply the if laxness there be, on the part of the Presi- Congress, that is to be the critic of the admin- dent to enforce economy. Value of Audit * * * the real value of the audit is not entirely in the audit of the account in itself, but as much or more a knowledge of the fact by the administrative agencies that their financial transactions will be carefully and thoroughly checked under the law applicable thereto. Lurtin R . Ginn, Assistant Comptroller General. In a speech before the annual convention of the National Association of State Auditors, Comptrollers and Treasurers, New Orleans, La., November 1928. 25 SOME EARLY GAO HISTORY John Raymond McCarl, Comptroller General of the United States July 1,1921-June 30,1936 26 Some Early GAO History From an unpublished history prepared in 1942-43 by Mrs. May H. Wilbur, then Historian of the General Accounting Ofice, and formerly Assistant Chief of the Division. of Personnel. Appointment of the First for the new office of Comptroller Gen- Comptroller General eral of the United States, created under the Budget and Accounting Act of 1921. Because of his interest in the estab- Choice fell, however, upon John Ray- lishment of independence for the ac- mond McCurl, a native of Iowa and counting offices of the Government, as educated in Nebraska, with which State well as his participation in legislation his name is associated in the public to that end, the name of Comptroller mind. He received the degree of LL.B. of the Treasury Warwick1 was promi- from the University of Nebraska, and nently mentioned as a possible selection for some years was a member of a law Walter W. Warwick, last Comptroller of t h e Treasury. firm in McCook, where he made his incumbent of that office from 1915 until t h e creation o f the General Accounting Office i n 1921. Judge Warwick. a home. Mr. McCarl came to Washington native of Ohio, was a veteran employee of t h e office over in 1914 as private secraary to Senator which h e presided, having served there as law clerk from 1893 to 1898. His early education wa9 obtained i n Cin- George W. Norris, and in 1918 became cinnati, where upon completion of a course in the executive secretary of the National Re- Cincinnati College Law School, h e began t h e practice of law. *** While practicing law i n t h e Ohio city, publican Congressional Committee. He young Warwick served for some time as secretary to assumed his duties as Comptroller Gen- Hon. William Howard Taft. then judge of t h e U.S. Circuit Court, who became greatly interested i n his d e - eral of the United States July 1, 1921, velopment and progress, and t h e friendship thus formed and from that hour endeavored with the continued for many years, i n fact, during t h e lifetime of both men. Returning to Washington Judge Warwick utmost seriousness to uphold the re- entered the service of t h e Panama Canal as auditor, sponsibilities devolving upon him, as he subsequently journeying t o t h e Isthmus in the capacity of Associate ludge, Supreme Court of t h e Canal Zone. interpreted them. It may be said with In 1911 h e was called back t o Washington t o become a truth of Mr. McCarl that he proposed member of President Taft's Commission on Economy and Efficiency, a group whose investigations and recom- to live up to the expectations of those mendations in regard t o audit and accounting matters i n who framed the Budget and Accounting t h e Federal Government played no small part In t h e development of t h e system prevailing today. In 1913 Act, as expressed during debate by Judge Warwick became Assistant Comptroller of the Treasury, and i n 1915 was appointed Comptroller. *** Chairman Good of the House commit- Following a period of service as assistant to t h e director tee, that the Comptroller General should of t h e Bureau of t h e Budget, Judge Warwick spent about 2 years a s fiscal agent of t h e Republic of Panama, be : then accepted the position of chief counsel t o t h e U.S. Employees' Compensation Commission in Washington, Something more than a bookkeeper or ac- where h e remained until his death i n April 1932. countant, that he should be a real critic, and 27 423-774 0 - 7 1 - 3 SOME EARLY GAO HISTORY Lurtin R. Ginn, Assistant Comptroller General of the United States July 1,1921-November 11,1930 at all times should come to Congress, no mat- the Comptroller of the Treasury: In ter what the political complexion of Congress October 1917 Mr. Ginn was appointed or the executive might be, and point out in- Assistant Comptroller of the Treasury efficiency * * * and that he should bring 3 EDITOR’S Nnm: such facts to the notice of the committees hav- T h e Washington Evening Star for June 29, 1921, re- ing jurisdiction of appropriations? ported o n MI. Ginn’s nomination a s Assistant Comp- * * * * * troller General as follows : “Lurtin R. Ginn of Indiana h a s been nominated b y President Harding to h e assistant controller general of t h e United States under t h e provisions of t h e new The First Assistant budget law. “Mr. Ginn’s appointment marks another promotion for Comptroller General a man who has spent practically all of his mature life in t h e service of the government. H e left his home a t Appointed to the position of Assistant Middletown, Ind., in 1884, to enter t h e Treasury Depart- ment as a clerk in connection with t h e Treasury a c - Comptroller General of the United counting system. S t e p after s t e p h e advanced until h e States was Lurtin R. Ginn, a native of was made a kw clerk i n t h e office of the controller of the Treasury. Indiana, long employed in the Treas- “With t h e coming of t h e world war and t h e need for Treasury representation overseas. Mr. C i n n waB selected ury Department, office of the Auditor as assistant controller of t h e Treasury t o serve with for the War Department and office of the expeditionary forces. That work led to appointment as one of t h e official representatives of t h e Treasury in dealings with t h e foreign powers. When this work was Representative Good, Congressional Record. 67th completed last July h e was appointed a n attorney for Cong., 2d sess.. vol. 61, pi. 2. p. 1090. t h e controller.” 28 SOME EARLY GAO HISTORY under authority of section 12 of the act as secretary to former Senator James of September 24, 1917 (40 Stat. 293), A. Reed of that State before entering the and shortly thereafter was designated departmental service. He was twice con- to have charge of the work of that of- tinued in service after reaching the age fice abroad. With a group of especially for automatic retirement but finally re- chosen assistants he maintained an of- tired October 31,1943. fice in Paris until the latter part of 1919, The machinery of public business in and he remained abroad in the capacity the General Accounting Office began of Special Representative of the Treas- to function without delay or interrup- ury Department until July 1920. tion aside from a certain amount of ap- Upon reaching the statutory age for prehension, perhaps not unnatural, retirement, Assistant Comptroller prevalent on the part of some of the General Ginn received an extension of personnel of the former auditing offices, service in the position of Counsel in the regarding the continuance of their em- General Accounting Office, which con- ployment, which in many cases had be- tinued until June 30, 1932. Endowed gun only during the World War period. with great natural diplomacy and In the interest of efficient administra- charm of manner, Mr. Ginn’s contacts tion, some curtailment and adjustments with the public as with the personnel among employees were necessary, inas- of the Office were invariably in the in- much as at that time there was avail- terest of harmony. He died in December able no one building in which could be 1935. housed the entire working force of over 1,700 persons, together with essential office records. Activities of the several Executive and Budget Officer organization divisions, however, for a A widely known personality in the time continued along lines similar to auditing offices of the Treasury Depart- those previously established in the ment and subsequently in the General Treasury Department under the respec- Accounting Office was James L. Baity, tive auditors. Auditor for the War Department and later Assistant to the Comptroller Gen- Office of the General Counsel eral of the United States (Executive and Budget Officer). As the War Audi- The group of employees engaged on tor during the trying years of World legal and related duties in the office of ’ War I, Mr. Baity had jurisdiction over the Comptroller of the Treasury formed a greatly augmented force of clerks en- a nucleus in the General Accounting gaged in the audit of all accounts and Office for what was later known as the claims arising by reason of military ac- Division of Law, under immediate su- tivity, also those relating in any way to pervision of the Comptroller General. the military establishment. Many of the About 1926 such work was centralized personnel thus employed were trans- in charge of a Solicitor, whose official ferred directly to the General Account- title was changed to that of General ing Office upon its creation. Born in Counsel in 19228. This position was held Missouri, Mr. Baity served for a time for a number of years by Rudolph L. 29 SOME EARLY GAO HISTORY Golze, who retired in 1939 and was SUC- ment service. A compilation of 12 ceeded by John C. McFarland. The wide monthly pamphlets bound as one vol- diversity of legal problems presented to ume is distributed annually in like the corps of attorneys comprising the manner. staff of the General Counsel for consid- In this connection it is of interest to eration and solution precludes descrip- note the publication in 1931 of a refer- tion, or even enumeration, in the lim- ence book entitled “Index to the Pub- ited space here available. lished Decisions of the Accounting Of- The compilation and publication of ficers of the United States, 1894 to decisions of the accounting officers of 1929,” a compilation of indexes pre- the Treasury Department which had viously issued. This volume was pre- been in progress for many years was pared under the direction of Stuart B. carried on after the creation of the Gen- Tulloss and was followed by another, eral Accounting Office by a group of the “Index-Digest to the Published De- employees within the Office of the Gen- cisions of the Comptroller General of eral Counsel, and therefrom has de- the United States,” which covers the veloped into a service of high efficiency period 1929 to 1940, and which was and immeasurable usefulness to Gov- prepared under the personal supervi- ernment offices in general. In 1926 there sion of the Digest Attorney, Russel C. was inaugurated a card index-digestkey Young. system whereby decisions of the Comp troller General, both published and un- Changes in Organization- published, are daily recorded on cards Postal Audit in accordance with key headings and cross references, together with citations The years 1922 and 1923 brought to of statutes, judicial opinions, and de- the General Accounting Office a num- cisions of prior accounting officers; the ber of organization changes which whole forming a current index-digest, came about as a result of better under- from which such information on dupli- standing of its basic purpose and func- cate cards is supplied to various parts tions, and greater familiarity with its of the General Accounting Office and work, as it increased rapidly in scope other departments and establishments and volume. as requested. Another helpful service of Reapportionment of duties in the the Index-Digest Section is found in the Bureau of Accounts of the Post Office issuance of daily synopses of important Department made possible the return decisions in mimeograph form for use to the General Accounting Office of within the Office and for limited outside several hundred employees formerly distribution. engaged in the audit of postal accounts Selected decisions of particular and under the jurisdiction of the Auditor general interest, with accompanying for the Post Office Department. This index-digests, tables of statutes, and change, effective April 16, 1922, by in- cited prior decisions are published in cluding the postal audit among the pamphlet form and issued monthly for powers and duties already transferred distribution throughout the Govern- by the Budget and Accounting Act of 30 SOME EARLY GAO HlSTORY 1921 to the General Accounting Office tions concerning appropriation and restored that organization to the form fund accounting in the several depart- existent at the time of its creation * * *. ments and establishments, with reports and recommendations as to simplifica- tion of methods, etc.; and to conduct Office of Investigations inspections of departmental disbursing Pursuant to the action of Congress offices and such other matters of similar approved March 20, 1922, arrange- character as may be designated. The ments were made for a complete audit Office of Investigations was organized of the financial transactions of the U.S. by Homer A . A . Smith who held the Shipping Board Emergency Fleet Cor- position of Chief of Investigations until poration under rules and regulations 1931 when he was succeeded by Stuart prescribed by the Comptroller General. B. Tulloss. This work was inaugurated by a small In accordance with requirements of force of employees who were later section 309 of the Budget and Account- absorbed into a general inspection and ing Act, forms, systems, and procedures investigation section organized in for the functions above named and autumn of the same year. The purpose others of like character as carried on of this section, composed of carefully in the various departments and offices selected personnel of special qualifica- are to be prescribed by the Comptroller tion and training, was to conduct such General. Preparation of appropriate investigations as might be directed by forms is an important duty of the Office the Comptroller General or Assistant of Investigations, whence General Reg- Comptroller General under the author- ulations prescribing symbols and other ity conferred by section 312 of the details for observance in their use are Budget and Accounting Act. Such in- issued at frequent intervals. All account- vestigations might take place at the seat ing forms are now in process of of Government or elsewhere and con- standardization. cern matters relating to the receipt, dis- bursement, or application of public Transportation Division funds, financial transactions, or matters of business in the various departments Another step of far-reaching impor- and establishments, and were conducted tance to the General Accounting Office with the view of effecting economies of was the organization July 1,1922, of the administration wherever possible. Transportation Division for the pur- The group organized for the specific pose of auditing and settling charges duty above referred to continued its for freight and passenger service ren- work along lines indicated by legisla- dered to all departments of the Govern- tion covering such activities in the ment. This activity had its origin in an General Accounting Office and is now organization unit known as the Trans- known as the Office of Investigations. portation Rate Board, for many years Employees assigned thereto are re- a notable phase of audit work in the quired to study accounting problems of Treasury Department. Records show the Government; to make investiga- that the first Transportation Rate 31 SOME EARLY GAO HISTORY Board existed in the office of the Audi- administration of any specific depart- tor for the War Department as far back ment. At that time the Civil Division oc- as 1906, having been formed for the cupied a building at 1800 E Street NW., purpose of concentrating the audit of the present site of the new Interior De- transportation accounts in the hands of partment Building. a group of specially trained employees. At that time it was also planned to es- Check Accounting Division tablish a complete file of transportation tariffs, an undertaking whose results On the same date there was estab- have fully justified the labor involved. lished a Check Accounting Division for In fact, it,is believed that the compila- the purpose of handling matters pertain- tion of tariffs, both freight and pas- ing to paid and canceled checks and senger, division sheets, land grant, and warrants, other than those relating to other transportation information now the Post Office Department * * *. available in the General Accounting Office, much of which data cannot be Military Division duplicated, is unequaled anywhere. T h e matter of consolidating the War and Navy Department Divisions also Civil Division received serious consideration, but due As of April 1, 1923, there was cre- to lack of available office room action ated a Civil Division in which were was deferred until May 16, 1923, when incorporated the functions and person- they were finally combined under the nel of three others, namely, the Treas- title of Military Division, and assigned ury Department Division, the Interior quarters at the Walker Johnson Build- Department Division, and the State and ing, 1734 New York Avenue NW., Other Departments Division. The Civil Washington, D.C. While the move Division, as implied by its title, was proved advantageous in some respects, charged with the examination and set- it failed to relieve to any considerable tlement of accounts other than military, extent the ever-increasing need for addi- that is, those arising in the Treasury, tional space in which to house the vast Interior, State, Justice, Commerce, quantity of records and files-priceless Labor, and Agriculture Departments, because irreplacable-of the fiscal sys- and the following independent estab- tem of the US. Government from its lishments: the White House, both beginning. Houses of Congress, Supreme Court, * * * * f+ Government Printing Office, Interstate Commerce Commission, Smithsonian Claims Division and National Museums, District of Co- lumbia, Federal Trade Commission, Early in the 19th century the Con- Civil Service Commission, the General gress made provision for an official Accounting Office itself, and all other called the Commissioner of Claims independent establishments of the Gov- whose duty was to examine and settle ernment not provided for under the claims against the United States on ac- 32 SOME EARLY GAO HISTORY i u E L -n u E a 2 33 SOME EARLY GAO HISTORY count of property lost or destroyed in Bookkeeping Division under the super- military service. Successive officials and vision of Frank H. Bogardus. groups of employees in larger numbers The act of September 2,1789 (1Stat. have carried on the work then begun 65), establishing the Treasury Depart- which later was broadened to include ment, wherein were created the offices cases of both military and civilian char- of Comptroller and Auditor, directed acter. Special sections in both Military the Comptroller “to provide for the and Civil Divisions of the General Ac- regular and punctual payment of all counting Office performed such duties monies which may be collected”; also until combined, effective December 1, “to direct prosecutions of all delinquen- 1923, to form a Claims Division which cies of officers of the revenue and for still functions as one of the leading ac- debts that will or shall le due the tivities of the General Accounting Ofbce United States.” Under the Budget and and appears destined for even greater Accounting Act of 1921, however, con- development and importance under the trol over collections of amounts due the able leadership of David Neumann, who United States, as exercised by the ac- as Chief of Division has administered counting officers in early days, was not its affairs since April 6, 1931. restored in its entirety; that is to say, To provide for greatly expanded war- while the Comptroller General is em- time needs the Claims Division presently powered by section 4 of the act of July 1, (November 1943) occupies a tempo- 1894 (28 Stat. 206), as amended by rary building, recently created in con- section 304 of the Budget and Account- nection with a war housing develop- ing Act, to superintend recovery of all ment, at Friendship, the old McLean debts certified by the General Account- estate at Wisconsin Avenue and Newark ing Office to be due the United States, Street NW. his responsibility does not extend, as formerly, to the direction and prosecu- tion of suits to recover erroneous, il- Bookkeeping Division legal, or other payments due the United Bookkeeping as performed in the States. Treasury Department and in the Gen- By the establishment in 1923 of a eral Accounting Office prior to 1923 was Collections Unit, the General Account- pen-written by hand, a method by no ing Office took what has been proved means adequate for the purposes of the to be a decided advance step in Federal collection methods. Heads of depart- latter organization, in view of its re- ments and establishments were re- sponsibility for maintaining complete quested to report to the Collections Unit accounts of appropriated funds, ex- any debts appearing on record in their penditures, withdrawals, etc., in addi- respective organizations. Records of in- tion to the personal accounts of disburs- debtednesses, thus gathered from vari- ing officers. The installation of book- ous sources, together with those found keeping machines greatly facilitated all due by the General Accounting Office phases of such work, which in July 1925 through its audit and settlement of dis- were designated to be functions of a bursing accounts, have been assembled 34 SOME EARLY GAO HISTORY in the form of a debtor’s card index was taken over by Earl Taggart, there- which provides a means of check against tofore Chief of the Civil Division, who any allowances or adjustments which served as Chief of Personnel for about 8 might be made by the Government in years and was succeeded by W . W . favor of the debtor. The Collections Richardson, who had been Assistant Unit which maintains the debt record Chief of Audit Division since 1939. index is a part of the Claims Division. Reassignment of certain duties Much of the controversy regarding brought about a partial reorganization the authority and jurisdiction of the of the Division of Personnel which be- Comptroller General has arisen in con- came effective July l, 1939. All per- nection with cases where liability in the sonnel matters were placed under the matter of collection is disputed by the jurisdiction of a Director of Personnel, debtor. In such cases, if collection can- which position was first held by Thomas not be made by offset against amounts A . McNamara. The present (November which may be due the debtor from the 1943) Director, E . R . Ballinger, took Government, or otherwise, the matter charge in April 1942, and under his usually is reported to the Attorney Gen- administration the General Accounting eral for institution of suit, or such other Office entered upon a period of great action as may be deemed proper by the personnel expansion. To meet the re- Department of Justice. quirements of war-created activity hun- dreds of new employees were secured for service in Washington and in the Division of Personnel several field offices opened in various Effective April 1, 1926, there was sections of the country, notably in or established a Division of Personnel in near war production centers. Records which was absorbed the previously ex- disclose that the total number of em- isting Division of Appointments, which ployees, which as of June 30,1939, was was in reality a survival of a similar slightly less than 5,000, in 1943 had organization in the former office of the risen beyond the 10,000 mark * * *. Auditor for the War Department * * *. At the time this division was created Removal to Pension Building the personnel of the entire Office num- bered slightly less than 2,000 persons, Early in the year 1926 plans were a group small indeed when compared laid for removal of the administrative with the numerical strength manifested offices and as many of the General Ac- in later years, particularly after 1935. counting Office working force as could With David Neumann as its first be accommodated from the Treasury Department Building and other quarters chief, the Division of Personnel began then occupied to the old Pension Build- its work in restricted quarters in the ing at Fifth and G Streets NW., in TreasuryBuilding ++* *. Judiciary Square. +$ * b i( * This historic edifice adjacent to the Organization of the Division of Per- Court House was designed by General sonnel fully under way, its management Montgomery C. Meigs of the Corps of 35 SOME EARLY GAO HISTORY Pension Building at 5th and G Streets NW., Washington, D.C. Occupied by the General Accounting Ofice from 1926 to 1951. Engineers, U.S. Army, well known as writers and the busy hum of clerical the builder of the aqueduct conveying workers, thousands have danced to the the city water supply from Great Falls music of the Marine Band at inaugural of the Potomac River, over the famous balls ushering in the administrations of Cabin John Bridge, to Washington. Presidents Cleveland, Harrison, McKin- Construction of the Pension Building ley, Theodore Roosevelt, and Taft. Days was begun in the autumn of 1882 and of inaugural festivities are long past and was finished to such an extent as to well-nigh forgotten, but the old Pension permit its use on the evening of Building remains a landmark, its great March 4, 1885, for the ball in honor windows overlooking what is left of a of the inauguration of President Cleve- once lovely park, while on the weather- land and Vice President Hendricks. beaten frieze above, shadowy forms of Then known as the largest brick build- soldiers still seem to march beside their ing in the world, the Pension Building ancient cannon, silent suggestions of a has been referred to, somewhat dis- memorable past. respectfully, as “Meigs’ Old Brick Far-reaching organization changes Barn.” Nevertheless, the structure has a . dignity all its own, and until the re- marked the actual removal of the Gen- moval of its first occupant, the Bureau era1 Accounting Office to the Pension of Pensions, to the Interior Department Building in the late summer of 1926. Building in 1926, it had the responsibil- Some hope had been entertained that ity of housing the pension claims of the move might be the forerunner of an millions of men who fought for their early union of scattered divisions and country from the Revolution to the First units of the Office in one building, pos- World War. In its great court, which sibly a new one, built for that ex- now echoes to the clickety-clack of type- press purpose. However, deeelopments 36 SOME EARLY GAO HISTORY through subsequent years have failed Formation of Audit Division to bring about that long-desired con- Functions and personnel of the Civil summation, which at this time appears and Military Divisions* * * together more than ever remote. A site for such with the group of employees handling a building was secured, comprising the matters concerning veterans, were com- greater part of the block bounded by bined effective September 1, 1926, to Fourth, Fifth, G, and H Streets NW., form the Audit Division. To these were across from the Pension Building. added in November of the same year all Houses and other buildings in the area activities pertaining to the reconcilia- were razed, with the exception of St. tion of depository accounts, which prior Mary’s Church and its parish buildings. to that time had been handled by a unit The church, one of the oldest in the of the Check Accounting Division. Fol- District of Columbia, has been located lowing his brief assignment as Chief on Fifth Street for many years. Excava- of Personnel, David Neumann’s abil- tion for the General Accounting Office ity as an organizer was again requisi- building was begun but was abandoned, tioned to formulate and carry out plans as the advent of war conditions with for the Audit Division, of which he was accompanying scarcity and restriction appointed chief, with E. W . Bell as of building materials speedily put an assistant. The Audit Division was origi- end to all plans for construction. A new nally located in the Pension Building, home for the Office, therefore, once but subsequently, due to rapidly in- more became an object of speculation, creasing work and personnel expansion, a vision of the future. Again, as prior to was forced to occupy space in various its creation in 1921, Office activities other buildings. were placed in buildings located in widely separated sections of the city, to occupy whatever quarters were ob- Formation of Records Division tainable, irrespective of associations The great accumulation of General and coordination of the functions Accounting Office records, files, and involved? miscellaneous papers, most of which must be readily accessible for research Consolidation of Claims and purposes, ever presented a problem in Transportation Divisions the matter of handling and storage. Therefore, in the interest of greater effi- The consolidation of Claims and ciency there was established a Records Transportation Divisions, effective Division, effective September 1, 1926, July 1, 1926, received * +’* the title wherein were assembled under one su- of Claims Division. Stuart B. Tulloss pervision all such documents, including was named chief of that division, which settled accounts of disbursing officers position he held until 1931. of the various departments and estab- E D ~ O RNOTE: ’S lishments (other than those of the Post For later chapters on the housing of GAO activities in Office Department), contracts, settled Washington, see the story on the General Accounting Odce Building, p. 115. claims, and paid checks. Reed F. Martin 37 SOME EARLY GAO HlSTORY was made chief of that division. The onciliation and Clearance Division, Records Division was also responsible and continued in charge of Vernon R. for the furnishing of information and Durst. transcripts, including photostatic copies * b Se b b of documents on file, to other agencies of the Government for use as specified by regulations governing such work- Postal Accounts Division For many years there was maintained The ancient gray stone building on in the Interior Department a Returns Pennsylvania Avenue, between 11th and Office wherein, in conformity with 12th Streets, surmounted by the clock existing law, were filed contracts made whose gleaming face long has been by the Secretaries of War, Navy, and familiar to the wayfarer in downtown Interior for the stated purpose of ren- Washington, was occupied for many dering such contracts available to the years by the Post Office Department, public generally. Pursuant to the act of now located in its handsome new build- February 4, 1929 (45 Stat. 1147), the ing immediately west of 12th Street. For Returns Office was transferred to the purposes of convenience the old build- General Accounting Office and made a ing also housed the office of the Auditor part of the Records Division, where its for the Post Office Department and its functions were continued until abol- successor, the Post Office Department ished by Office Order No. 31 of Septem- Division of the General Accounting ber 18, 1942, pursuant to the act of Office, in which o5ces was performed October 21, 1941 (55 Stat. 743). the audit work of the postal branch of In 1928 Mr. Martin was appointed the Government as distinguished from Chief Clerk of the General Accounting claims and accounts originating in other Office, his duties as Chief, Records Di- branches which were audited and set- vision, being assumed by W . W . Rich- tled in the Audit and Claims Divisions. ardson who was succeeded by Russell H . The Post Office Department Division Herrell who in turn was succeeded by whose designation was changed July 1, Vernon R . Durst * * I C . 1939, to that of Postal Accounts Division (18 Comp. Gen. 1026) Reconciliation and Clearance was responsible for the audit and settle- Division ment of all accounts of the great Post Office Department and its widespread Functions and personnel of the Check activities, including money order and Section and that part of the Receiving postal savings services, as well as mat- and Computing Section, also of the ters having to do with national and in- Audit Division, which had to do with ternational transportation of the mails the receiving, recording, searching, and by land, sea, and air. The audit of checking of accounts, vouchers, and col- money order accounts was carried on lateral papers for audit were made com- with the aid of electrically operated ponent parts of the increased and office appliances of the most modern enlarged Records Division, which on character, a system which was inaugu- August 1, 1940, was renamed the Rec- rated as early as July 1, 1912. By this 38 SOME EARLY GAO HlSTORY means data appearing on postal money ments to be made by them, such deci- orders is reproduced by punching on sions to be binding in the settlement of specially prepared cards, which are then the accounts concerned. Under the act run through sorting and tabulating ma- of December 29, 1941 (55 Stat. 875), chines and the totals shown compared certain certifying officers, also, are au- with those claimed by the paying post- thorized to request and receive decisions masters for verification. It is interesting of the Comptroller General on any ques- here to note that the General Accounting tions of law involved in payment of Office installation is claimed to be the vouchers presented for his certification. largest in the world using such equip- The right as above indicated was not ment for purely auditing purposes. exercised by disbursing officers at all The normal flow of postal business times, however, and amounts illegally into the General Accounting Office was paid, when later disclosed in the audit, seriously affected by disturbed world were for collection, insofar as possible, conditions of the war years, evidencing and return to the Treasury. With the general disruption and curtailment of view of eliminating need for and con- the mail service, particularly to and sequent expense of collecting such from foreign countries. Because of amounts, there was inaugurated in 1927 changes in administration brought the procedure known as preaudit, or about by such conditions, it was deemed audit before payment. This plan pro- expedient to effect the transfer of the vided for approval of expenditures by entire Postal Accounts Division to the Comptroller General after the obli- Asheville, N.C., a move undertaken at gations are incurred, but before actual the suggestion and with the assistance payment should be made, and was not of the Bureau of the Budget and the an entirely new idea, as its value had Public Buildings Administration, in co- been demonstrated through application operation with the Post Office Depart- to certain postal expenditures by the ment. The change was effected about the Post Office Department Division of the close of the calendar year 1942 * ++ *. General Accounting Office and its prede- Under the direction of John C. Nevitt, cessors, the Auditor for the Post Office Chief of Division, work was expedited Department and the Sixth Auditor, over and conditions in general manifested an extended period of years. improvement. General use of preaudit in the Gen- eral Accounting Office began through Inauguration of Preaudit the audit of disbursement vouchers of Procedures the U.S. Veterans Bureau covering pay- ments under the World War Adjusted Under authority originally conferred Compensation Act of May 19,1924 (43 by the Dockery Act of 1894, the Comp- Stat. 1211, and amendments. Soon troller General is required, upon request thereafter requests were received for its of a disbursing officer or the head of an extension to vouchers-other than executive department or other Govern- those for personal services-of certain ment establishment to render advance bureaus of the Department of Agricul- decisions upon questions involving pay- ture. By successful operation the plan SOME EARLY GAO HISTORY gained favor with administrative offi- school in that vicinity. He studied law, cials, particularly those directly con- was admitted to the bar, and engaged cerned with disbursement matters, in practice in Connersville, where he bringing about its adoption, wholly or was made city attorney in 1905. Follow- in part, in the audit of vouchers of ing service as county attorney of Fay- many departments and establishments. ette County, and as a member of the Preaudit service reached its highest State Legislature for several years, he level about the middle 1930's, when cot- was elected to the 65th Congress at a ton pool payments under the Agricul- special election held to fill the vacancy tural Adjustment Act were successfully caused by the death of Representative preaudited in regional field offices, Daniel W. Comstock. He was reelected physically adjacent to sources of all to the 66th, 67th, 68th, 69th, 70th and necessary information. Because of the 71st Congresses, which service of more absolute accuracy and extreme speed re- than 13 years beginning July 3, 1917, quired, only carefully selected person- covered the stormy period of the First nel of high qualification and experi- World War and the bitter contests over ence were assigned to preauditing woman suffrage and prohibition. duties. Therefore, in view of the in- Deeply interested in the modern de- creasing need for such employees on velopment of the Nation's Capital, various activities associated with prepa- Judge Elliott while ,in Congress served ration for and prosecution of the war as chairman of the Committee on Pub- effort, it was found necessary to curtail lic Buildings and Grounds, which di- and ultimately to discontinue the prac- rected the Federal Triangle building tice of preauditing vouchers with the program. He was also one of those exception of the limited number re- chiefly responsible for the erection of ceived under certain farm programs. the magnificent Supreme Court Build- Such action was directed by the Comp- ing, which in the opinion of many is troller General in Office Order No. 32 unsurpassed for classic beauty and dig- dated September 18, 1942. nity by any other edifice in Washington. * * * * * It so happened that Judge Elliott acted as Comptroller General for much of his term in the General Accounting Richard N. Elliott Office. Upon the statutory retirement Upon the retirement at the statutory of Comptroller General McCarl after age of Assistant Comptroller General 15 years of official service, no suc- Lurtin R. Ginn, President Hoover cessor was appointed for approximately named as his successor Richard Nash 3 years; and in the interim Judge Elliott, former Member of Congress Elliott, as Acting Comptroller General, from Indiana, who assumed his duties passed judgment on expenditures con- March 9, 1931 * * *. templated and made, in amounts run- Judge Elliott was born near Conners- ning far into the millions, as well as on vilb, Ind., April 25, 1873, attended many other important and frequently local schools, and subsequently taught controversial matters. 40 SOME EARLY GAO HlSTORY Richard N . Elliott, Assistant Comptroller General of the United States March 9,1931-April 30,1943 Necessity again required him to take of the rod and reel found in him a over the helm of the General Account- kindred spirit and followed with in- ing Office when the tenure of office of terest his periodic excursions to nearby Comptroller General Fred H . Brown, or distant sections of some fisherman’s appointed in April 1939 to succeed Mr. paradise. Judge Elliott’s love of poetry, McCarl, was shortened by illness in De- particularly that of Burns, was well cember 1939, and his resultant resigna- known; moreover, he frequently ex- tion, and he continued as Acting Comp- pressed his own thoughts in bits of troller General until the accession to verse, more often than not in praise of office of Lindsay C. Warren, appointed his favorite sport or of some particular Comptroller General effective Novem- spot by the waterside which held for ber 1, 1940. him delightful memories. An exceedingly human individual, The term of office of the Assistant the place of Assistant Comptroller Gen- Comptroller General-15 years-was eral Elliott in the hearts of General Ac- counting Office people has ever been se- curtailed in Judge Elliott’s case by rea- cure. The warm friendliness which en- son of the intervention of the statutory deared him to the “folks back home in retirement age, and his services in the Indiana” met with ready response from General Accounting Office terminated officials and employees alike. Devotees April 30, 1943 * * *. 41 SOME EARLY GAO HISTORY and F Streets NW., which took place Formation of Accounting and during the summer of 1935. Bookkeeping Division Effects of the great increase in work During this same period, another new were apparent in every part of the Of- division was added to the General Ac- fice but particularly in the Audit Di- vision, where the receipt of accounts counting Office organization. This was the Accounting and Bookkeeping Divi- prepared and submitted by recently or- sion, created September 1, 1935, under ganized or expanded agencies manned General Regulations No. 82, dated Au- by inexperienced personnel presented gust 20, 1935, by consolidation of difficulties and inaccuracies theretofore the Bookkeeping Division and certain not encountered. Such conditions, due parts of the Audit Division; namely, the in large measure to the vast ex- Accounting Section, which had to do penditures resulting from emergency with the settlement of the accounts of legislation caused by the business de- accountable officers and the adjustment pression, demanded exhaustive study of appropriations and funds; and that with mutual cooperation, in order to part of the Audit Review Section insure prompt settlement, as well as wherein were considered replies to post- adequate protection for the interests of audit exceptions received after com- the Government. pletion of initial audit exceptions, the The audit of adjusted service certifi- Difference Sheet Unit, and the Supple- cates issued to veterans under the World mental Settlement Unit. The Accounting War Adjusted Compensation Act of and Bookkeeping Division also kept May 19, 1924 (43 Stat. 121), and de- control accounts of appropriations and clared immediately payable under the limitations thereof; kept accounts of Adjusted Compensation Payment Act, advances, disbursements, and collec- 1936, approved January 27, 1936 (49 tions of accountable officers; reviewed Stat. 1099) began in August 1936 and and countersigned (or disapproved) was well on the way to completion by for the Comptroller General certain the close of the fiscal year 1937. classes of warrants; prepared transfer Expansion in every phase of Federal settlements to settle interdepartmental activity was of necessity reflected in claims and adjust erroneous deposits; Government claims work. With the es- and settled the accounts of accountable tablishment of many new governmental officers. agencies, innumerable new contracts f> +> f> Since its creation the affairs were required for purchase of supplies of the Accounting and Bookkeeping Di- and equipment, as well as for construc- vision were administered by J . Darling- tion work of all sorts to meet the needs ton Denit, with a large corps of of the vast relief organizations. In brief, assistants. such a personnel expansion as that pre- Pursuant to the requirements of sec- viously referred to was equally neces- tion 309 of the Budget and Accounting sary to provide for the increase in the Act some steps were taken looking to- claims work of the General Accounting ward the establishment of a uniform Oflice. system of administrative accounting, 43 423-174 0 - 71 - 4 SOME EARLY GAO HISTORY though the variety of operations and General of the United States, J . R . Mc- methods in use rendered such uniform- Carl, who remained in Washington, en- ity a difficult task. However, as a result gaged in private law practice. He died of investigation and study of the ac- very suddenly August 2, 1940. counting needs of various offices and As stated earlier in this chronicle, at establishments, administrative account- the expiration of the term of Mr. Mc- ing systems were established in several Carl administration of the General Ac- bureaus. Thus was formed a nucleus to counting Office was taken over by which the departments and establish- Assistant Comptroller General Richard ments might make additions and adap- N . Elliott as Acting Comptroller Gen- tations best suited to their particular eral of the United States. No changes of needs. To the Accounting and Book- note took place, although the findings keeping Division was delegated the duty of the President’s Committee on Ad- of coordinating the departmental sys- ministrative Management (popularly tems and maintaining the control known as the Brownlow Committee) as accounts. set forth in the report of the commit- tee, submitted January 8, 1937, gave McCarl’s Term of Office Ends rise to rather general discussion of possible-or probable-reorganization On June 30, 1936, there terminated of departments and agencies of the ex- the incumbency of the first Comptroller ecutive branch of the Government. Fred H . Brown, Comptroller General of the United States April 11,1939-June 19,1940 44 SOME EARLY GAO HISTORY Appointment of Fred H. Brown ter year. He returned to his home in As Comptroller General New Hampshire and upon restoration to health served for a brief period as On March 30,1939, President Roose- a member of the US. Tariff Commis- velt nominated to fill the vacant o5ce sion, eventually resuming the practice of Comptroller General of the United of law. States Fred H . Brown, former senator from New Hampshire, which nomina- Designation of Lindsay C. tion was confirmed April 3, 1939. Warren As Comptroller General Comptroller General Brown, who took office April 11, 1939, was born at August 1,1940, the President named Ossippee, N.H., April 12, 1879. He as successor to Comptroller General became an attorney at law and prac- Brown Lindsay C. Warren, Member of ticed in Somersworth, N.H., where Congress from North Carolina, whose he served as mayor from 1914 to 1922, First Congressional District he had rep- at the same time holding the office of resented for 16 years, the nomination US. Attorney for the District of New being confirmed the same day. Hampshire. From 1923 to 1925 he served as Governor of the State and EDITOR’S NOTE: subsequently as a member of the n’ew Mrs. Wilbur’s history of the General Ac- Hampshire Public Service Commission counting Office ends abruptly with the above until his election to the US. Senate in entry about the appointment of Lindsay C. 1932. Mr. Brown’s illness during the Warren as Comptroller General. According to an Office file, in December 1943 she turned winter of 193940 compelled him to her manuscript over to the General Counsel, relinquish his duties as Comptroller J. C. McFararland, to whose office she was at- General in the early summer of the lat- tached as Historian, and retired soon after. 45 J. R. McCarl-Some Glimpses of the First Comptroller General Brief biographical data on the first Comptroller GeneraE appears on pages 3 and 27. In the absence of a more complete history, the following excerpts from published materials offer some insights into the career and reputation of M r . McCarE as Comptroller General from 1921 to 1936. From The Sunday Star, these have been presidential appointments, held by democrats, and so there is scant like- Washington, D.C., lihood of any of them being retained. June 26, 1921 In their stead is created the office of con- troller general at $10,000 and an assistant Speculation on the appointment of controller at $7.500. The controller general the first Comptroller General appeared is head of the general accounting office and in an article by Will P. Kennedy: on him are imposed all of the duties hereto- fore performed by the six auditors, the con- With the fiscal year starting Friday, the troller and deputy controller of the Treasury. office of controller general, provided for in 8 (c 8 ?+ 8 the national budget act, has not been filled. This is the best patronage job that has ever The controller general is also responsible been at the disposal of any President-with for the final audit and settlement of all ac- the single exception of appointments to the counts. During the incoming fiscal year, start- Supreme Court of the United States. The ing Friday, these will amount to $4,500 Supreme Court bench pays $14,500 for life, million, according to the estimate of expendi- while the office of controller general is to pay tures sent to the ways and means committee $10,000 a year for fifteen years. The next best by Secretary Mellon on April 30. job is on the board of general appraisers for The controller general is also supreme au- the customs service, which pays $9.000 a year thority in interpretation of the appropriation during good behavior. laws. He says what is and what is not avail- The particular concern over the failure of able for certain purposes. President Harding to name a controller gen- He prescribes the form for keeping and eral is because the national budget act au- rendering accounts of moneys paid into and tomatically abolishes all the existing account- paid out of the Treasury. He also prescribes ing and auditing offices to concentrate all re- the manner of making administrative exami- sponsibility in the new office of controller nation of accounts in the various departments general. and independent establishments. It abolishes the six auditors for federal de- The law also says that he shall investigate partments, five of whom have been receiving all matters relating to the application of $4,000 each and one $5,000; the controller of public funds. This is very broad authority, and the Treasury, who has been receiving $6,000, makes him in effect a critic of all government and the deputy controller at $4,000. All of expenditures. He is to make a report annu- 46 J. R. McCARL-FIRST COMPTROLLER GENERAL ally to Congress and special reports from time From “Watchdogs of the to time when he believes economies can be Budget” by Drew Pearson effected in expenditure of public funds. ’* * t * * Writing in Scribner’s Magazine for If Judge Walter W. Warwick, the present February 1933, the late Drew Pearson controller of the Treasury, is retained in provided a comparative sketch of what office on account of his efficiency, the existing he called Washington’s two Czars of accounting and audit system can continue un- Economy-Director of the Budget J. interrupted, but aside from taking the best Clawson Roop and ComptrollerGeneral patronage job to be disposed of, it is not likely that the present administration would McCarl. Following is an excerpt from be willing to stand before the people of the his characterization of Mr. McCarl and country as admitting that to get an efficient his work : controller general they had to take a democrat. So the chances are slight that any democrat or * * * beneath his friendly, pleasant-faced exterior is a tendency to be a s hard-headed as half-and-half republican will get the job. a Missouri mule. According to Justice McCoy * Q t ++ tc of the District of Columbia Supreme Court, only ice water runs in his veins-which a lot of people are inclined to believe, especially From The Evening Star, after looking over the long list of his economy Washington, D.C., decisions. Probably no one will shed many June 27, 1921 tears of sympathy over the fact that the Navy Department, under McCarl’s ruling, now is no The next day, readers had their longer able to pay for wreaths for deceased naval officers; that State Department diplo- answer. The Star reported on the ap- mats cannot tip steamer stewards more than pointment of J . Raymond McCarl as five dollars; or even that admirals cannot Comptroller General as follows: spend government money to transport their J. Raymond McCarl of McCook, Neb., sec- wives from Asiatic waters to the United States. retary of the republican congressional cam- It may be a little easier to arouse sympathy for the Department of Agriculture, which was paign committee, was nominated today by President Harding to be controller general found relieving Florida hurricane sufferers out of a $250,000 appropriation earmarked for of the United States, a position created by the fighting the hoof-and-mouth disease; or for new budget law. Mr. McCarl is about forty the War Department which was enjoined from years old, and has been secretary of the con- extending relief to Mississippi flood sufferers gressional committee for about three years. because it had no specific funds for this pur- He is a graduate of the University of Nebraska pose. But certainly the universal bittemess Law School and was secretary to Senator with which McCarl is regarded can be under- Norris, republican, Nebraska, for a number of stood when we discover that he prevented years. General Douglas MacArtbur, be-medalled As comptroller general, Mr. McCarl will Chief of Staff, from purchasing new Purple have charge of government finances, expendi- Heart decorations out of surplus clothing tures of appropriations, auditing of all ex- funds, or that in disallowing an Agricultural penditures, settlement and adjustment of Department item of $1.50 for a luncheon hill claims of and against the government, and in Alexandria, Virginia, he wrote: “Nowhere management of all fiscal affairs with the ex- in that part of Virginia can you get a lunch ception only of postal accounts, which are to worth so much.” be under a special comptroller of the Post Probably no man in McCarl’s position could Office Department, also created by the new have friends, even if he wanted them. And law. outside his own office, which is with him one J. R. McCARL-FIRST COMPTROLLER GENERAL hundred per cent, the Comptroller General made in accordance with law. This has leads a life of splendid isolation. No dinner, brought him into frequent conflict with the dance or reception of Washington’s famous Roosevelt Administration, and his authority social whirl ever has seen him. He lives alone to overrule expenditures of executive depart- in a hotel. His only loves are golf, work which ments has been ohallenged by the Attorney absorbs him almost every evening, and rare General. It is possible that during the next beef-steak. year a test case may arise which will direct McCarl is credited with being the one real spectacular national attention to McCarl. His achievement of the Harding Administration. work is well-known in Washington, where he Formerly a lawyer in McCook, Nebraska, he has won a high reputation for ability, integrity, came to Washington as secretary to Repub- and watchfulness, a record which would be an lican insurgent, Senator George W. Norris. asset in a campaign where federal extrava- From Noms’s office McCarl jumped to the gance is a prominent issue. Probably no man more politically dexterous job of running the in Washington is more familiar with the inti- Republican Congressional Committee during mate details of the government machinery and the 1920 campaign, and after it was over the way the money is spent. Norris told Harding the one thing he wanted Short, stocky, fond of Windsor ties and golf was McCarl’s appointment as Comptroller at a modest family club in Maryland, spon- General. There McCarl has been for twelve sored in his earlier career by the veteran years, and there he will remain for three more; progressive, Norris, but in good standing with for Congress, in order to put the watchdog of all fadions of the party, McCarl would be an the Treasury above the influence of political excellent symbol of thrift as against spending pressure, decreed that he should hold office should that issue crystallize. for fifteen years and never be reappointed. All His fifteen-year term as Comptroller Gen- of which may be one reason why this “penny- eral expires next year. He is ineligible for pinching,” “tin-pot’’ tyrant personally has reappointment under the law. His position saved the United States Treasury no less than now is somewhat like that of a judge on the half a billion dollars. bench, in that he must refrain from political activity. Party leaders looking for a suitable candidate, however, could-as Uncle Joe Can- From Review of Reviews, non once said-go farther and do worse. But May 1935 the build-up would have to come largely from others, since he must stick closely to his In a rundown of possible Republi- knitting. can presidential candidates in 1936, the May 1935 issue of this magazine had From The Literary Digest, the following to say about Comptroller July 11, 1936 General McCarl : Of the remaining miscellaneous names, the Under the heading “Tight Fist Re- chief one is that of J. Raymond McCarl of laxed,” this popular periodical reported Nebraska, 55, Comptroller General of the on Mr. McCarl’s retirement at the end United States. He started as a lawyer, became of his 15-year term as follows: secretary to Senator George Norris, then ex- ecutive secretary of the National Republican The tough “no-man’’ of New Deal spending Congressional Committee from 1918 to 1921, cleaned out his desk last week and departed. whereupon he was selected as the first Comp- But before he did so, he called in reporters troller General under the Budget Act. for the first press conference in his fifteen- In this watchdog job McCarl has been en- year term of office. J. Raymond McCarl, tirely disassociated from political activity for Comptroller General of the United States, had almost fifteen years. Yet he has had the most to have his final say: intimate contact with the Government. His “I am in hopes that the next Congress may chief function is to see that expenditures are be so constituted that there may be assured not J. R. McCARL-FIRST COMPTROLLER GENERAL only a systematic and thorough reorganization for some of them he had run errands. After of the regular agencies . . . but that many, regular hours, the telephone of the executive if not all, of the existing special or ‘emer- offices was plugged directly to McCarl’s desk. gency’ agencies, which, due to their natures, Stenographers called up the person they s u p were loosely and extravagantly set up and are posed to be the night watchman asking him tax-consuming in the extreme, may be prop- to secrete a forgotten umbrella, or water a erly eliminated. . . .” vase of flowers. McCarl carried out the orders. Observers wonder whether Senator Pat Har- Press Comment-There was much editorial rison of Mississippi, Richard N. Elliott, AS- praise of McCarl when he left his post. sistant Comptroller, or a dark horse will get “Among the welter of Washington’s yes-men, the appointment as McCarl’s successor. he was a forthright, solitary and heartening McCarl has clashed with every Secretary of no-man,” said the St. Louis Post-Dispatch. the Navy from Edwin Denby in Harding’s The Hartford Courant agreed and added: Cabinet to Claude A. Swanson in the Cabinet “McCarl was neither negligent, careless nor of Roosevelt over his refusal to give mileage open to ‘suggestion.’ He made his rulings to an officer returning home to await further without fear or favor.” orders. As for the Comptroller General’s jab at the Fiscal Vetoes-More keenly than any other New Deal spending, the New York Daily government official, however, President Roose- News counseled: “The Administration can velt has felt this tight-lipped Scot’s pruning- not lightly ignore . . . criticism of the waste- shears. H e would not permit the President to fulness of emergency New Deal agencies; allocate $15,000,000 of the $525,000,000 nor can it shrug aside his statements of the drought-relief fund to the gigantic forest shel- need of a sensible reorganization to elimi- ter-belt scheme in 1934. When the President nate needless duplications. . . .” tried to use $33,000 of the 1935 relief appro- Conceding that McCarl has “done a great priation for the erection of a factory at Reeds- deal to establish Federal accounting on a ville, West Virginia, a Resettlement Adminis- sound basis,” the Baltimore Sun neverthe. tration project, the Comptroller said “No.” less thought he had “erred too often on the Washington first saw J. Raymond McCarl side of literalism.” The Philadelphia Record in 1914, when he arrived in the Capital as went even further, declaring that his “re- secretary to Senator George W. Norris. His peated efforts to obstruct the New Deal in- flowing Windsor ties, and his quiet and sohol- dicated long since that his sympathies lay arly manner attracted attention. So did his with the budget-balancing Liberty Leaguers.” golf. When he appeared on the Burning Tree and Congressional Country Club courses, he played in the seventies. From The Saturday Evening In 1918, when he was made Secretary of the Post Republican Congressional Committee, he gained a reputation for dogged efficiency. In an editorial entitled “No-Man,” When Congress created the General Account- the June 15, 1935, issue of the Post ing Office in 1921 to check on the way its expressed its admiration for Mr. Mc- appropriations were being spent, McCarl Carl’s operations as follows: was the man President Harding picked to head the agency as Comptroller General. His There are so many yes-men in Washington term of office was fifteen years: he could be and elsewhere, especially in the matter of removed only by impeachment or by a resolu- spending other people’s money, that it is a tion of Congress. He could not be reappointed. pleasure to find one man who can and does Having held four Presidential administra- say “NO” and makes it stick. His name is tions to strict accountability, McCarl wound John Raymond McCarl, and his job, as every- up with characteristic thoroughness. To each one should know, is that of Comptroller Gen- of his 2,693 regular employees went a per- eral. His duty is to act as the agent of Con- sonally signed letter. gress and to see to it that all moneys which Most of them had never seen his face. Yet it appropriates are laid out strictly in accord- 49 J. R. McCARL-FIRST COMPTROLLER GENERAL ance with its expressed will, and in no other to serve for fifteen years; and nothing short manner and for no other purpose. of successful impeachment proceedings could His strict and highly expert interpretations oust him from his office. have, naturally, made him anything but pop- Many a time powerful political influences ular with those who would divert appro- were brought to bear upon him to reverse priations into channels not contemplated by or modify his decisions, but those who went Congress, for when he says “NO” there is no up against him found his rulings as un- way of getting around it without going back changeable as ihe law of the Medes and to Congress for some modification of the Persians. Had he been removable by political measure a s originally passed. influence, he probably would not have lasted The Comptroller General has had many five years, but the terms of his appointment clashes with occupants of the White House, made him as independent as the proverbial for Presidents have no more patience with no- hog on ice. Making enemies day in and day men when they interfere with their pet plans, out no doubt had its depressing effects upon than the rest of us have. If Mr. Roosevelt has him, but these were more than neutralized by been oftener in conflict with Mr. McCarl than the conviction that every time he refused to was the case with his predecessors, it is be- okay a payment that he felt was not war- cause he has had a greater personal say as ranted by law he made a thousand unseen to the details of expenditure of large appro- friends among the taxpayers of the nation priations. Mr. Ickes, Public Works Admin- whom he had sworn he would well and truly istrator, Mr. Tugwell, Under Secretary of Ag- serve. Incidental to his office duties, Mr. M e riculture, and Mr. Hopkins, our Emergency Carl has, for many years, made a searching Relief Administrator, have all run into the study of the waste in government and of the stone wall of Mr. McCarl’s adamantine “No”. countless leaks through which dribble away One of the most notable of these differences many a million of taxpayers’ dollars. of opinion was when the Comptroller General, These “no” men are usually hard to deal last summer. issued a ruling declining to per- with, but by the same token they are the mit the use of $15,000,000 from the half bil- only breed of men who can cope with the lion appropriated for drought relief to finance dragons of waste and extravagance. They the shelter-belt project in the Great Plains are the kind who get results. They work for to forestall future droughts. big, broad effects and never stop to count We have no reason to suppose that Mr. the toes they tread on. McCarl’s judgment is infallible. He may have made occasional mistakes and said “NO”when More From The Saturday another equally conscientious public servant might have said “Yes”, but in this era of reck- Evening Post less expenditure of public moneys, many a taxpayer will feel that if he has erred, he has In a long two-part article published erred on the right side and can easily be in the October 3 and 17,1936, issues of forgiven. the Post, Mr. McCarl stated his views +$ i l * * * on Government spending, particularly A little over a year later after of the level and kind inaugurated as a Mr. McCarl retired, the Post (Aug. 8, part of the New Deal. A few excerpts 1936) editorialized again about the from “Government-Run-Everything”: Nation’s “No-Man.” As Comptroller General of the United States, I was in a position to help the Presi- During his entire official career Mr. McCarl dent make good his promises. Probably of all was a professional “no” man. His business men I was in the most advantageous posi- was to hew to the line; and if his chips flew tion to assist effectively. More than ten years into the eyes of those about him, that was of intimate contact with Government opera- their misfortune, not his. By the terms of the tions had convinced me that a program of act under which he was appointed, he was economy and retrenchment was the only way 50 3. R. McCARL-FIRST COMPTROLLER GENERAL out. I was for such a program 100 per cent. approved with such unanimity that it was a My coat was off. There was a new interest landslide for “economy in Government.” in life, something fine to work for, a real President Roosevelt and an overwhelming service to be rendered. Following the Novem- Democratic majority in both Houses of the ber election, I worked with volunteers who Congress were commissioned by the people to were helping the President-elect shape the stop Government spending, to rid us of use- economy program, trying to devise means of less agencies and to cut the costs of accomplishing the greatest savings with the Government. least hurt. And when I learned that Lewis In view of these things, had anyone the W. Douglas, a member of the House of Rep- slightest notion on March 9, 1933, when the resentatives from Arizona, who had been economy Congress was convened in special schooled by membership on the Appropria- session to carry out this program, that within tions Committee of that body, was to be Di- three short months it was not only to ignore rector of the Bureau of the Budget-that its promise but was to begin a series of legis- agency of tremendous opportunities for lative contortions new in the history of rep- good-there was new incentive for hard work, resentative government? That it was to ap- telling work for economy-savings, that the propriate not only all the income the heavy needy might be adequately assisted without taxes would raise, but additional billions of retarding the fight for stability. With Douglas dollars raised by borrowing, and through sur- watching for waste in estimates and with my rendering its right and ignoring its duty to opportunities to help the Congress accomplish direct and safeguard the uses of such fabulous economies and to see to it that all economies sums, to subject the country to the tender provided for were actually accomplished, it mercies of the great experimenters, the New seemed almost too good to be true. What a Dealers, and their wild spending and their chance for real service. fantastic schemes? However, this economy plan, brought for- The members of that Congress knew what ward by the Democratic Party and over- they were doing. They were not fooled. They whelmingly approved by the voters, was not knew that under our Constitution the people more than fairly set in motion in March, 1933, had reserved to themselves the right, acting when Washington fell under the control of a through their representatives constituting the group to be known as, self-styled, the New Congress, to say exactly what governmental Dealers. It is this group that is responsible activities there should be, and just how such for our present predicament. Unfortunately, activities should function. This through con- economy was to be short-lived. trol of the purse strings. Such control is essen- The New Dealers were against it. Econ- tial to self-government, but it contemplates omy had no place in their plans. They were that the representatives of the people will for a program of Government expansion, be faithful ta their promises. “Government-run-everything,” regardless of Such popular control is normally carried costs. Of course, it would cost hundreds of out by the Congress stipulating, in connection millions of dollars, but they had the “cures” with appropriations, the exact purpose for for our ills, and then, too, it would be a thrill- which each appropriation may be used. It ing experience, “running everything.” Could is a function of the accounting system, under not the Government tax, and could it not bor- the Comptroller General and independent of row? Why worry about the costs? the spending agencies. to see to it that these Franklin D. Roosevelt, as its nominee for stipulations are strictly observed by all. By the presidency, led the fight-and with such this method the people, acting through their vigor a s to show utter sincerity and equally representatives, are in complete control of sincere alarm. Such spending and debt build- governmental activities. Through the search- ing would wreck us. It must be stopped. He ing follow-up by the accounting officers of all could and would stop it. He would immedi- uses of all appropriations, watching each ex- ately reduce Government costs by at least penditure for correctness of purpose, observ- 25 percent, and would fire any Cabinet offi- ance of all controlling laws, and so on, and cer who failed to save as much. The voters with disallowance of credit for all payments 51 J. R. McCARL-FIRST COMPTROLLER GENERAL not shown to be within the law, the Congress realizing the imperative need for a strong is in a position to be as fully effective over Congress if our form of government is to en- all uses of public moneys as was contem- dure. Each scheme brought forward was an plated in our Constitution. effort to secure some further surrender by the The Congress can be effective not only as Congress to the Executive, another step to- to purpose but to exact economy and efficiency, ward Executive domination, another blast at avoid waste and to encourage justified con- the cornerstone of representative government. fidence in the fidelity of public transactions. Of all damaging and dangerous lobbies, With the accounting system available and these Executive Branch lobbies are the worst. ever ready to give full effect to its laws, the They work at public expense, and from the Congress has both the power and the means inside, and though their proposals are for the to exercise complete control over all uses of most part an affront to the dignity as well as public moneys, and it is a duty and respon- to the constitutional duty and responsibility sibility resting upon the Congress faithfully of the Congress, they are usually so honey- to exercise this control. It is the essence of coated with seeming advantages, political or representative government. I t is well that we personal, for those approached, as frequently remember this in selecting senators and r e p to be seriously considered, and far too fre- resentatives to speak and vote for us in the quently adopted and put into some bill for Congress. passage. * * * * 4: The nonelected want a n all-powerful Execu- T o speak in disparagement of the Con- tive Branch and a weak Congress. They re- gress of the United States is not a pleasant sent having to go to the Congress for appro- task for one who for fifteen years has worked priations, because a strong Congress will intimately with what was intended to be and usually discover an unsound scheme and turn should be the greatest deliberative body in it down. the world-the lawmaking representatives of * * * * * this free and self-governing people. It was an Our problem was, of course, to overcome the interesting task, that of serving as Comp- effects of the depression, to get on our feet troller General of the United States, because and to get going again. But government 05- it was so worth while. It was an opportunity cials can get away with almost anything in to serve effectively by upholding the authority an emergency. It provides an excuse for haste, vested in the Congress in our Constitution excitement, reckless spending. So an emer- and by requiring observance of its laws re- gency was created by law, and little did we specting the uses of the public moneys. But dream that the longer it was kept alive the to witness, from this seat of vantage, first the more real it was to become, until today our gradual and then the all-too-sudden breaking real emergency involves the task of extracting of promises made to the people to secure elec- ourselves from the clutches of the New Deal- tion, and the surrender of constitutional re- ers and the effects of the emergency they sponsibilities to the Executive Branch, was a created. harrowing experience, one that seemed such The surrender by the Congress had been a blow at the very foundation of representa- so complete that there was nothing the ac- tive government as seriously to endanger our counting officers could do to avoid the waste system, as tending dangerously toward dic- and extravagance that was sure to result. And tatorship, or a t least, government by a group here again, the Congress knew just what it of nonelects, who surrounded a purposeful was doing, the safeguards it was surrendering, Executive satisfied with the rightness of his and why. All sorts of things could now be purposes and believing confidently in his put over, as the hands of the Comptroller wisdom. General were virtually tied. No one can serve long as Comptroller Gen- Emergency spending started with a bang, eral of the United States and observe at and kept gaining in momentum. Those effec- firsthand the adroit efforts that are constantly tive and wholesome restraints surrounding being made to weaken the Congress, without the care and use of public money that had becoming fearful for our future and without been worked out through years of observation J. R. McCARL-FIRST COMPTROLLER GENERAL and study-and costly experiences-were happen to have the pull it takes to get it- swept aside. It was now a government by money that, in the getting, shatters the patrio- men, not by law. Armies of employees were tism of those obtaining it. It opens the way thrown together, hired whether there was to those innumerable abuses that each of us useful work for them to do or not, and often are daily observing, of people being assisted without regard for Civil Service or salary- who are not in need, but who would rather limiting laws. Buildings were bought or be on relief than work. The breaking down rented at fancy prices, here, there and every- and wanton waste of the self-respect and self- where-05ce buildings, apartment houses reliance of a substantial portion of our citi- and even palatial residences-without bene- zenship, the enforced injecting of parasitism fit of competition or other safeguards against into the body politic, is a waste and damage waste. These armies were to be housed. Emer- we can never measure but will require years gency purchases-thousands of them, and for to repair. every conceivable thing-were rushed through The whole thing has been tragic. Tragic, without open competitive bidding, as though first, because representative government sim- an enemy army were at our gates. Public ply cannot succeed if officials persist in secur- money was literally flowing in the Washington ing election on the promise of a definite streets. program and then in abandoning the program * * * * * for one going in the opposite direction; and, second, because we have so neglected the But waste of money-millions and millions duties and responsibilities of self-government of borrowed dollars-was not all that was in- as to elect and thereby entrust the affairs of volved in this plan. The substituting of Fed- government to a Congress that holds its re- eral for local management meant, too, waste sponsibilities so lightly as to permit such a of good citizenship. Such a plan breaks down thing to happen. local leadership, destroys local responsibility, A President might slip or accept bad advice, turns all eyes on Washington and kills initia- and there is just one of him to go wrong, tive-self-help incentive. It loses the advan- tage of firsthand knowledge of conditions and but the Congress, a group of 531 men and women, never should be persuaded to break those safeguards against waste and mistakes that are present under local responsibility. faith with the people. Thus the Constitution When these safeguards are gone and the Gov- reposed in the President the duty only to ernment is footing the bills, communities are administer the laws, while to the Congress tempted to seek and obtain, through political it entrusted the grave responsibility of making influence, large grants of money, because they the laws. 53 LINDSAY C. WARREN COMPTROLLER GENERAL OF THE UNITED STATES, 1940-54 The General Accounting Office- Its Mission and Its Opportunities The following excerpts from M i . Warren’s address, delivered February 4, 1952, before the Woman’s National Democratic Club, describe some of the changes in GAO functions which he initiated and several examples of the audit disclosures which he considered significant and illustrative of GAO’s expanding scope in auditing Federal operations. The full address was printed in the Congressional Record, March 21,1952 ( p . A2041) The General Accounting Office today important in its field since 1921. It is is far different from the Office I first a great step toward full disclosure for saw in 1940. Just about that time the the benefit of the President, for the Government’s expenditures began in- benefit of the Congress, and for the creasing astronomically due to the de- benefit of the American taxpayer of fense and war effort. I soon concluded what happens to the public funds. that the old methods could not keep pace with these accelerating operations. Joint Accounting Improvement After V-J Day we made accounting im- Program provement the No. 1 project of the Office. Congress supplied the necessary The act embodies the principles and legislation dealing with such subjects objectives of the Joint Accounting Im- as commercial-type audits by the Comp- provement Program begun in 1947 by troller General of Government corpora- the Secretary of the Treasury, John W. tions, improved Government property Snyder; the Director of the Bureau of accounting and auditing, and modern- the Budget, then James E. Webb; and ization of Post Office Department ac- myself, in collaboration with all other counting and auditing. agencies of the Government. It includes This legislative activity was climaxed provisions recognizing the broader and by the Budget and Accounting Proce- more flexible methods of auditing Gov- dures Act of 1950. President Truman ernment expenditures which we in the in signing the act cited it as the most General Accounting Office had initiated, 54 GAO-ITS MISSION AND OPPORTUNITIES including provision for us to make selec- biggest procedural conversion ever un- tive audits at the site of agency dertaken. It involves the issuance, pay- operations. ment, accounting, and auditing of 400 Recently, I had the pleasure of attend- million money orders a year, originat- ing an annual joint meeting with Mr. ing at 42,000 points. These orders if Snyder and Mr. Frederick J. Lawton, stacked on top of each other would the present Director of the Budget, to reach a height of 43 miles. The new review accomplishments of our Joint mechanized procedures made it possible Accounting Program. Some of the to eliminate separate preparation of 3 things reported would amaze anyone million cards a year for accounting and who had not closely followed the pro- audit purposes. The new system in- gram. Although the new accounting stalled by the Post Office Department legislation has been in effect only a eliminated 900,000 checks and 700 little over a year, an entire division positions in the Department. of the General Accounting Office has This is just one example of the im- been abolished, cutting out nearly 300 provements being made by many agen- jobs in our Office alone at an annual cies on their own initiative with the salary saving of $1 mi1lion.l Thousands inspiration and assistance of our small of warrants previously required in con- accounting systems staff under the Joint nection with Government fiscal trans- Program. actions have been eliminated, saving as much as 30 or more days in making Extension of Comprehensive Audit funds available for disbursement, under methods equally or more safe than the We have not let the grass grow under old ones. Reclassification of accounts our feet in making improvements and and increased tempo of cooperative in modernization of our own Office. We work in identifying business-type op- have abolished some divisions and erations enabled almost twice as many created others. We have extended our business-type presentations in the 1953 comprehensive audit of Government Budget at those for 1952. agencies to some 31 agencies or major parts of agencies, including some of the Revamping of the Postal Money large field installations in the Depart- Order System ment of Defense. It covers not only the We discussed the tremendous achieve- receipt and disbursement, but the ap- ment of the Post Office Department with plication of public funds. The audits are assistance of the Joint Program staff, made in the offices of the agencies. The the Federal Reserve banks, and the better the quality of the agency’s ac- banking system of the country, in com- counts, internal control, and observance pletely revamping the money order of governing statutes, the less detailed system as of July 1, 1951. This was the auditing by the General Accounting Office is required. We expect to have all EDITOR’SNOTE. significant operating programs in the The reference here IS to the Accounting and Book. keeping Division. civilian agencies under comprehensive 55 GAO-ITS MISSION AND OPPORTUNITIES or other site audit by June 30, 1953. Accounting Office. The amount of our Our audits of 65 Government corpora- collections is more than twice what it tions are up to date. has cost to operate the Office during the same period. But I feel of greater im- portance is the work the Office is Formation of Division of Audits doing in the prevention of illegal or On January 18, 1952, I consolidated improvident use of funds without wait- four of our auditing divisions,? employ- ing to collect back what has been paid ing over 3,400 people, into a new Di- out illegally and in improving account- vision of Audits. The consolidation will ing throughout the Government, both of achieve real economies by cutting out which have saved a great deal of money duplication of administration and will for the taxpayer. enable a far better and more productive The need for the Office as the agency utilization of our audit personnel. The of the Congress has never been greater. Division is headed by our 32-year-old Our country is engaged in domestic Director of Audits, Ted B. Westfall, programs of national significance, in just last week awarded a citation by foreign aid programs reaching into all our Junior Chamber of Commerce as parts of the world, and in a defense pro- one of the outstanding young men in gram almost unparalleled in history. Government. The expenditures being made by the By constant surveys of our work and American people to carry out these improvement of our procedures, it has operations and programs are tremen- been possible since April 1946to reduce dous. The existence of the Office with the number of our employees from proper and necessary powers to main- 14,904 to 6,773. Our budget estimates tain a control and watch over these ex- for the next fiscal year are based on an penditures is an essential part of our average of 6,560 employees. We are one democratic form of government. of the few Government agencies asking With the terrific increase in Govern- for less money for salaries for the next ment expenditures, and correspond- fiscal year than for 1952. ingly in our tax burdens, I am con- * * * * Q stantly asked by serious-minded men and women in and out of public life, Collections and Other Benefits “What can be done to save us from this maelstrom?” Another question is, As one result of our activities from “HOWcan we identify and stamp out 1941 through December 31,1951, $760 waste and extravagance in Govern- million has been collected. This money ment?” The General Accounting Office had been illegally or otherwise improp- has no power to stop waste and extrava- erly paid out, and it is a fair statement gance, although it can and does report to say that little of it would have ever such instances found in our audits and been recovered except for the General investigations to the agencies and in sig- EDITOR’SNOTE nificant cases to the Congress or its com- These were : Audit Division, Corporation Audits Divi. mittees. Everybody has a strong feeling sion. Postal Audit Dirision. and Reconciliation and Clearance Division. that there is a great deal of waste in the 56 GAO-ITS MJSSJON AND OPPORTUNITIES Government, except when it comes to not being protected because of the low his own pet projects. Then there is al- charges for water and the failure to ways a sincere conviction that the collect amounts assessed. When this expanding need for the program and the case was called to the attention of the rising level of costs make necessary a Secretary of the Interior, he took larger appropriation. This is one of the prompt action to increase rates to a most interesting and widespread types more realistic level. In another field, we of self-hypnotism practiced by even had to question the departments about some of our best legislators and nearly 1,000 out of 5,000 accounts of administrators. single officers in the Armed Services claiming dependent parents. Where re- coveries have been made, they average Examples of Waste $1,700 per case. In still another case, It may help to list some of the forms our auditors several years ago discov- of waste we have found and reported, ered over $2 million worth of property and, I am glad to say, succeeded, in the former Maritime Commission didn’t some cases, in having corrected. These know it owned. In fact, it didn’t even pipelines for siphoning off our tax know it owned the warehouse in which money included overstafiing and poor the property was stored. utilization of personnel, excessive pro- curement, exorbitant prices for supplies Maritime Commission and equipment, generally poor manage- We made several reports on the Mari- ment, and activities unjustifiable to any time Commission, and while supported objective person not on a Government by the Congress, we were not able to get payroll. Sometimes the money goes out much done by the agency. Then in 1949 through overpayments to contractors. we made a special report on subsidies, Sometimes it fails to come in because for which we were very roundly de- of undercollections by Government nounced by interests favorable to the agencies for services rendered. Some- Commission. There was a hearing under times it is frittered away through fail- the leadership of Representative Hardy ure to take care of Government prop- of Virginia which exposed the situation erty. I would like to give you just a bare very thoroughly. The report was sus- idea of what can be done to contribute tained 100 percent by the Congress. We to more efficient and economical have been told that the report and the Government. hearing that followed were the cause of We are calling attention to instances the abolition of the old Commission. such as the “Palm Beach of the Gulf,” Just 2 weeks ago, the Federal Mari- an Army recreation center for military time Board made known the recalcula- personnel, involving an expense of tion of the construction differential sub- $350,000, which was closed by the Sec- sidy in connection with the sale of the retary of Defense after receipt of our Independence and the Constitittion to report. Then there was an Indian irriga- the American Export Lines. The subsidy tion project out West where the Govern- was reduced from 45 to 27 percent. This ment’s investment of $6.5 million was means the governmental subsidy of 57 GAO-ITS MISSION AND OPPORTUNlTlES these two ships will be some $12 million stored in private warehouses by the less than that which would have resulted Commodity Credit Corporation. The had the construction differential been General Accounting Office has been in- based upon the findings of the old 5- vestigating for several months, and an man Maritime Commission. The joint interim report was made to Congress on action of the General Accounting Office January 11, 1952, indicating an esti- and the Congress will result in a saving mated shortage in just one geographical of $12 million to the taxpayers. area of $3,800,000. That was in the Dallas area. The shortages are the result The RFC’s Butylene Plant of conversion of grain placed in the warehouses and spoilage of grain We recently reported to Congress a through improper care. The ultimate case where the RFC [Reconstruction losses will depend on what the Depart- Finance Corporation] agreed to lease ment of Agriculture can recover from and rehabilitate a privately owned warehousemen and others, but based on butylene plant at Corpus Christi, Tex., what we found there, we are expanding to be operated by a private contractor. our investigation into other locations. This plant was originally constructed by RFC in 1944 at a cost of approxi- Veterans’ Education Benefits mately $S million. In 1948 it was de- clared surplus and turned over to The General Accounting Office con- General Services Administration for ducted an extensive survey of the Vet- disposal. GSA, on January 6, 1950, ac- erans’ Education Program under the cepted a bid of $756,000, and on May 1, 1944 “GI bill of rights,” and a report 1950, formally transferred the property was submitted to Congress last July. It to the purchaser. RFC. in October 1950, was published by the Committee on agreed to lease the plant at an annual Veterans Affairs as House Committee rental of $200,000 until June 30, 1952, Print No. 160. The things we found with the privilege of a 2-year renewal; were shocking. The survey disclosed to rehabilitate the facilities; and to that questionable practices existed at construct a new gas-recovery unit. The approximately 65 percent of the insti- estimate of cost to put this plant back in tutions and establishments examined, operation was $1 million, but the cost resulting in excessive subsistence allow- incurred to June 30, 1951, was ances to veterans and overpayments for $2,400,000. In other words, the Govern- tuition, tools, books. and supplies to ment owned an $S million plant, sold it institutions, totaling millions of dollars. for $756,000, leased it back for In some cases, fraud was uncovered, $200,000 per year, and rehabilitated it resulting in indictment and subsequent to the extent of $2,500,000-all in the conviction of those responsible. In all matter of a few months. $50 million of questionable payments were disclosed, entirely aside from $40 Grain Shortages million paid out as a result of an ad- ministrative policy on leave for veteran Recently you have heard about the trainees. Approximately $10 million has grain shortage cases involving grain been recovered so far. 58 GAO-ITS MISSION AND OPPORTUNITIES Surplus Property agencies so that more effective action might be taken to recapture this valua- A little over a year ago GAO inves- ble material. The Army recently ad- tigators learned that a great deal of ma- vised us of the reactivation of nearly $1 terial declared surplus by our military million worth of this material. forces in foreign countries was being reimported into the United States. Most of it was automotive equipment, Whose Money? including such items as tractors, mo- This startling item recently appeared tors, and heavy trucks. Surplus dealers in the local press: “Jet Pilot Braves in foreign countries were purchasing Danger to Save Taxpayers’ Money.” this material and shipping it to the The story told of an Air Force pilot in United States where it was being resold Germany who had saved the Govern- to dealers and sometimes even back to ment nearly half a million dollars in 4 the Government. months by bringing in three jet fighter After hearings, the Bonner Subcom- planes whose engines had gone bad, in- mittee of the House Committee on Ex- stead of bailing out. Thank Heaven, one penditures pointed out the facts to the human life is still worth more in our Secretary of the Army, who ordered kind of country than any amount of (6 freezes” of certain surplus material, property. I am citing this example only looking toward recapture of usable in contrast to the attitude so many of items. Substantial quantities of mate- us have toward property that is just rials have been recaptured. GAO rep- Government property or money that is resentatives, on a quick trip to Europe just Government money. We forget that with the Bonner subcommittee late last in the final analysis the Government’s year, found that notwithstanding the money and property are our own. This “freezes” a great deal of valuable ma- all-too-common attitude has led me to terial was in the hands of disposal suggest many times that as a part of agents. For example, two warehouses the necessary education for Govern- bulged with vast stores of electronic ment service at West Point, Annapolis, equipment, new copper cable, and a or anywhere else where the Government multitude of other items generally pays the freight. there should be a com- known to be in short supply. Th‘IS was pulsory 6-days-a-week, full-time course brought to the attention of the military on “The American Taxpayer.” 423-774 0 - 7 1 - 5 59 Comptroller General Warren Reviews Efforts To Transfer Functions From the General Accounting Office From time to time, proposals have been made to shift some of the functions assigned to the Comptroller General by the Budget and Accounting Act, 1921, to the executive branch. These proposals have been concerned mainly with such functions as prescribing accounting systems and settling claims and all have been strongly opposed by the General Accounting Ofice.’ When the Senate Committee on Expenditures in the Execxtive Departments held hearings in 1950 on the Hoover Commission proposals on budgeting and accounting, including the creation of an Accountant General in the Treasury Department, Comptroller General Warren testified vigorously against weakening the GAO and in favor of keeping the Ofice and its functions accountable only to the Congress.? Significant excerpts from his testimony follow. This is the age-old fight to shift from counting Office to an office in the execu- Congress to the executive the control tive branch strikes at the very vitals over expenditures of public funds. It of the independence of the Office. * * * is no different from other assaults made The General Accounting Office is an on the independent integrity of your agency of the Congress to check on the agency (GAO) , except that this time it financial transactions of the Govern- comes solely from without the Govern- ment. It is an important part of our sys- merit. <- * f* My objection is, of tem of checks and balances. It was set course, twofold. One is because, as I up by the Budget and Accounting Act stated at the outset, the proposal to of 1921 as an ann of the Congress and transfer functions of the General Ac- has always been a part of the legislative branch of the Government. Its broad ‘Summaries of these propo-als will be found in function is to audit and settle public S. Doc. 11, 87th Cong., 1st sess., on “Financial Man- agement i n the Federal Government.” prepared by the claims and accounts, investigate the staff of the Senate Commmee on Government Opera. Government’s financial transactions, tions (1961). and to advise and assist the Congress “To Improve Budgeting, Arcountmg, and Auditing Methods of the Federal Cavrmrnent.” Hearings on in matters relating to public S. 20.51,February-March 1950. moneys. * * * 60 EFFORTS TO TRANSFER FUNCTIONS FROM GAO As a result of the Budget and Ac- Act of 1949. I was the first witness be- counting Act, congressional control fore this committee last year in its con- over financial matters was greatly sideration of that act, and I want to strengthened. For the first time the Con- quote the following statements from my gress had its own completely nonpar- testimony at that time: tisan and nonpolitical agent to assure M y own agency, the General Accounting the furnishing of necessary information Office, is exempted by the terms of the pend- concerning the financial transactions of ing bill, not because it is sacrosanct or any more angelic than the rest but in recognition the Government and to enforce the con- that it is the creature and agent of Congress, gressional intent as to expenditures. by law a part of the legislative branch. I I believe that the General Accounting would invite-not oppose-any studies and Office as it stands today is rendering to legislation undertaken by the Congress look- the Congress, to the taxpayers, and to ing toward improvement of the General Ac- counting Office. Anytime it cannot justify its the executive branch a greater service worth by its accomplishments in the opinion than ever before in the history of our of the Congress. it ought to be abolished or Government.* * * drastically changed. I am an old hand at this thing called On this point, I would like to point Government reorganization, going back out in passing that the act setting up to 1932. Following the recommittal of the Hoover Commission expressly states President Roosevelt’s reorganization that the Commission shall study and in- bill in the House in 1938, I personally vestigate agencies of the executive polled every Member and found the branch. The Commission’s authority reasons for the opposition. Based on did not extend to the study or making what I found-and I say this with all of recommendations concerning any due modesty-I was the author of the agency of the Congress itself. * * * 1939 Reorganization Act, passed after Without impugning in the least the the elimination of the objectionable fea- integrity of any official of the executive tures, the main one of which was the branch, and entirely on principle, I say provision for abolition of the General that the surest guaranty that the Con- Accounting Office. As finally passed, the gress will always have such full dis- 1939 act specifically exempted the Gen- closure of accounting information eral Accounting Office from the reor- which it wants and needs is to leave the ganizing authority granted to the Presi- ultimate prescribing function where it dent. The 1945 Reorganization Act stands, in Congress’ own agency the went even further and declared that the General Accounting Office. * * * term “agency” as used in the act “does Mr. Hoover, in advocating the ac- not include the Comptroller General of counting provisions of S. 2054, is the United States or the General Ac- counting Office, which are a part of the merely renewing and continuing his as- legislative branch of the Government.’’ saults on the General Accounting Of- The same provision was included in the fice, but in doing so he fails to take draft of reorganization legislation sent into account all that has happened in down by the President last year and was the last 18 years and especially in the enacted as part of the Reorganization last 9 years. In 1932 he made and Con- 61 EFFORTS TO TRANSFER FUNCTIONS FROM GAO gress rejected his proposal to destroy that it is the same old thing without a the General Accounting Office. single new idea. * ” * I am informed I hold in my hand Executive Order that a good part of his statement No. 5959, signed by Mr. Hoover on (Robert L. L. McCormick, Citizens December 9, 1932, which would have Committee, who testified in favor of the practically done away with the General Hoover Commission’s recommenda- Accounting Office, and note, if you will, tion) contained a quotation from the what the House committee said in re- report of the President’s Committee on jecting this and other reorganization Administrative Management back in plans. I did not write this report. I was 1937 when President Roosevelt tried to not a member of the committee. But the destroy the Office. committee found the order “to interfere At that time there was an overwheIm- with work specifically given by law to ing Democratic majority in the two an agency specifically created to func- Houses. When the votes were counted tion independent of the executive every single Republican, without ex- branch and on behalf of Congress ” * *. ception, voted to uphold the integrity Even if it were possible within the au- and the independence of the General thority given-and it clearly is not- Accounting Office and a majority of the what is proposed in this regard would Democrats likewise voted the same way. defeat the very purpose of existing law, At that time President Roosevelt was as it would break down the means of joined by the entire Government in his obtaining a uniform accounting system assault on the General Accounting throughout the Government by dividing Office. The Office then was headless and the work between two agencies, the Gen- without leadership, because for 2 years eral Accounting Office, where matters the President had refused to appoint a relating to accounting belong-” Comptroller General. Mr. Roosevelt It might be noted in passing, Mr. gave up his fight when I accepted this Chairman, that Mr. Hoover’s own Di- appointment, and so far as I know, he rector of the Budget advised at that time never again renewed the fight. to reject his reorganization proposals. Mr. Chairman, it is hard to conceive * * c I * c x that I would give up a seat in Congress Then along came President Roose- and accept this position in order to velt, and he, too, was hostile and bitterly preside over the liquidation of the Gen- antagonistic to the General Account- eral Accounting Office. President ing Office. He tried to destroy it by the Roosevelt told me, and he told it to legislative route, and was repulsed. For many others, that the very fact that I 4 years, Mr. Chairman, I sat as a mem- had accepted this appointment was suffi- ber of the Joint Committee on Govern- cient notice to the Congress and to ment Reorganization, headed by a great everyone else that he had dropped his American, the late Senator Joe Robin- fight. son, of Arkansas, and I lived with this Then Congress was beginning to get subject during that period. I have heard tired of aII these assaults on its own all the stock arguments advanced dur- agency. The war came along, and the ing this hearing, and I can assure you President asked for wartime powers of 62 EFFORTS T O TRANSFER FUNCTIONS FROM GAO reorganization. When the bill reached Then last year, before this committee, the Senate, Senator Taft offered the Reorganization Act again giving the an amendment which unanimously President the power to put certain re- adopted: “This act shall not apply to organizations into effect, contained ver- the General Accounting Office.” There batim the language that I have just was a colloquy between Senator Taft read to you, showing, gentlemen, that and Senator Barkley, and both agreed Congress has always been alert to these that the General Accounting Office was assaults. an arm of the Congress and should not But this time for the first time the be subject to reorganization powers of General Accounting Office comes in the President. While the amendment here with the backing of the Govern- offered may not have been necessary, ment itself. I have told you that the both Senators thought it should be Joint Program has received in writing adopted out of an abundance of the enthusiastic support of the agencies precaution. of the Government. * * ’’ I didn’t ask Senator Taft to offer that I said last week, and I repeat it now, amendment. I knew nothing about it this bill strikes at the very vitals of the until I read it in the Congressional Rec- integrity and independence of the Gen- ord the next day. But it is just another eral Accounting Office. s s‘ s example that Congress looks with jeal- I wish to emphasize, Mr. Chairman, ousy upon this agency that it created, that if any legislation is necessary, and and it does not wish it to be interfered we are seriously considering that, it with by the executive branch. should be as a result of the experience Six years ago President Truman’s gained through the cooperative effort first reorganization act became a law. but I will tell you now I will not come That was handled in the Senate by the here proposing any legislation that will Judiciary Committee, and that com- take from Congress one whit or one iota mittee wrote into the act the following: of the control that it now has. SEC.7. When used in this act, the term The General Accounting Office in the “agency” means any executive department, last 9 years since I have been in office commission, independent establishment, cor- has paid back to the Treasury in the poration wholly or partly owned by the United neighborhood of $650,000,000 that had States which is an instrumentality of the been either illegally or erroneously paid United States, board, bureau, division, serv- out. I can assure this committee, and I ice, office, officer, authority, administration, say it knowing whereof I speak, that or other establishment, in the executive the General Accounting Office stands branch of the Government. Such term does not include the Comptroller General of the today as the last great bulwark for the United States or the General Accounting Of- protection of the American taxpayer fice, which are a part of the legislative branch against the illegal and erroneous ex- of the Government. penditure of the public substance. 63 JOSEPH CAMPBELL COMPTROLLER OF THE UNITED STATES, 1954-65 The Professional Accounting and Auditing Staff of the General Accounting Office During the 10-yearperiod when Mr. Campbell was Comptroller General, GAO’s professional accounting and auditing sta# increased in number, quality, and competence. The size of the staff nearly doubled-from 1,217 at June 30,1955, to 2,221 at June 30,1965. The following excerpts from public speeches and testimony during congressional hearings are illustrative of M r . Campbell’s interest in the expansion and continuing development of GAO’s professional staff. Government’s Challenge to age academic standing as well as to be the Profession endowed with that peculiar and some- From address before annual conference times hard to find virtue which would of the New York State Society of prompt them to work in part for the Certified Public Accountants, Pocono contribution they can make to society Manor, Pa., June 7,1955. rather than for any large remuneration they would immediately receive. You Let me note here a portion of my and I both know that our chances of opening remarks when I appeared be- obtaining this type of young men would fore the House of Representatives in be considerably improved if these February of this year in connection graduates knew that in joining with us, with the 1956 appropriation request of they would also be furthering their own the General Accounting Office. I said at careers as accountants. This can be that time: achieved through recognition of our From my relatively short experience with work by the professional societies. The the General Accounting Office I am convinced most tangible recognition that you can that our most serious problem is the recruit- give us is to permit our audit or systems ment of qualified auditors. i * I * * work to qualify candidates to sit for the CPA examination in our State, assum- For us to build a nucleus of a truly ing of course that all other requisites outstanding staff, we need to obtain a are met. You have it in your power to solid corps of young accountants at the aid us in this objective. college level. It is necessary for these young men to have a better-than-aver- 4€ * )c * * 64 PROFESSIONAL ACCOUNTING AND AUDITING STAFF Joseph Campbell is sworn in as the Jourth Comptroller General 01 the 1,‘nited States by Judge James R . Kirkland of the 1i.S. District Court of D.C., !\larch 1955. From lejt: Mr. and Mrs. Joseph Campbell, Judge Kirkland. and Assistant Comptroller General and Mrs. Frank H . Weittel. The Congress of the United States, in gal compliance and simple bookkeeping establishing the General Accounting operations. As a result, thousands of Office, intended it to be a source of in- employees checked millions of vouchers formation in the consideration of funds shipped to a central location in Wash- necessary to carry out the functions of ington. the Government and, in so doing, the Where are we today? We have a Office was to be used as an effective topflight audit section of close to 3,000 weapon in combating waste and ineffici- in number-about 275 of whom are ency. In simple terms, the Office would certified public accountants, too few be fully and adequately performing its from our own State. We should have function if, through its review of agency many more qualified individuals and I operations which go beyond the ac- personally intend to do all possible to counts, it could establish at all levels obtain them both by outside recruit- that the Government was receiving a ment and by making it possible for proper return for each dollar spent. You know too well that during its first ‘ Eo~run’sNOTE. 25 years, this so-called “ a c c ~ u n t i n gof- ~~ This figure included not only the professional account. ing and auditing staff but also cost auditors and fiscal fice directed itself primarily toward le- auditors. 65 PROFESSIONAL ACCOUNTING AND AUDlTING STAFF members of the staff to sit for exami- young man has to follow a proposal in- nations. volving fiscal matters (and there are 2 . I . I -3 E hundreds of them) through to defeat We are stepping up our efforts in the or enactment. In so doing he will ap- schools, colleges, and universities-we pear at a congressional hearing in sup- are finding some unappreciated souls in port of a witness or he may testify. I industry and now and then an intelli- need not emphasize that this experience, gent farsighted young man sees what sometimes unforgettable for various the profession apparently does not reasons, is one which cannot be ob- comprehend. tained in normal public or private He wants diversity, the feel of large practice. transactions, perhaps travel, but taken For example, our recent widely pub- together he sees an opportunity to ob- licized opinion with respect to the tain an overall first hand view of a President's Highway Program was the Government operation unparalleled in result, in large part, of an intensive the financial history of the world. joint effort of our audit and legal staffs He follows legislation frequently drawing from their experience with from the planning stage through to en- many such problems. As a result it was actment and then on to operation, thorough and, we think, extremely help- whether it relates to the Canal Zone, ful to all concerned. +$ e A% y. b the military, foreign aid or any of the thousand or more areas in which the Recognition of Role of General Accounting Office must func- Accountants in Federal Government tion. I say without qualification, that any You will agree with me when I say man or woman, sitting for degree exam- that we have indeed come a long way inations today, should be required to since what might be considered the be- possess a general knowledge of Gov- ginning of recognition of accountants ernment fiscal affairs. I know this in the Federal Government, the year sounds like treason to many of us here, 1945, when the Government Corpora- but you may as well face up to it and tion Control Act was passed. Without as soon as it can gracefully be done. a single dissenting vote, the Congress The recognition of Government train- passed this act to audit and control the ing, under proper supervision, as ful- expenditures of the hundred-odd Gov- filling State degree requirements is long ernment corporations. It wanted the overdue. I would go beyond by strongly accounts and records of these corpora- urging a requirement that some reason- tions audited in accordance with gener- able period of Government service be ally accepted auditing principles and made mandatory. standards. As you may know, there was ?2 b * * ii practicaly no talent in the Federal Gov- Perhaps the most significant contri- ernment at that time from which a corps bution we can make toward a well- of professional accountants could be rounded degree candidate is in the legis- drawn to do the tasks demanded. The lative process. Here, sooner or later, a American Institute of Accountants, 66 PROFESSIONAL ACCOUNTING AND AUDITING STAFF working with the State societies, re- 1955, the total income of these depart- sponded admirably to the request of ments and agencies is estimated to be my predecessor for aid to do the job. over $TO billion; expenditures will to- The group enlisted at that time formed tal over $75 billion. The value of prop- the nucleus of a new strain of account- erty, real and personal, is unknown. The ants in the Federal Government. last Hoover Commission report esti- In 1947, the Joint Accounting Pro- mated w-ell over $100 billion of ready- gram was commenced to make the ex- for-issue supplies and capital personal ecutive departments and agencies more property assets. In addition to deter- accounting conscious and to elevate the mining the extent of accounting control level of accounting generally above the over the vast resources of our Govern- bookkeeping stage. The program has ment, we also have to see that all trans- made great strides in improving ac- actions have been consummated in ac- counting, budgeting, financial report- cordance with laws and regulations as ing, and auditing throughout the well as ascertain that adequate internal Government. financial control over operations is ex- In 1950, the Congress endorsed the ercised. That is a large order. entire program wholeheartedly when it We cannot and must not rest on our enacted the Budget and Accounting laurels. The arm of accounting must Procedures Act and the Post Office De- continue to be strong in the service of partment Financial Control Act. The the Government. And because of our purpose of these acts in brief was to unique position and tremendous re- apply to the Government departments sponsibilities, the General Accounting the business-type principles laid down Office is the principal source that the first in the Corporation Control Act of profession ought to rely upon to keep 1945. The Congress stated as its policy that arm strong. that the accounting of the Government * '. * let me add that the problem should provide full disclosure of the re- which we face cannot be solved com- sults of financial operations, adequate pletely by increasing our complement financial information needed in the of good accountants. Our function is es- management of operations, and the sentially so singular in nature that it formulation and execution of the budget requires the combined and closely co- and effective control over income, ordinated efforts of our accountants, expenditures, funds, property, and auditors, investigators, and attorneys. other assets. I have already taken steps which I hope Our Office is charged by law with will add to our staff a group of top- determining the extent to which this flight law school graduates. You can get provision is carried out. In effect, we a clearer picture of what faces us in the are asked to assume the responsibility that the results of financial operations next few years when I tell you that of approximately 60 departments and nearly 25 percent of our personnel independent agencies-including the strength of over 5,500 have 20 years or military-are reported fully, accurately, more of Government service. t t t t t and without partisan consideration. In 67 PROFESSIONAL ACCOUNTlNG AND AUDITING STAFF The General Accounting Office is tion in Paris. Thus, we are in a position worldwide in scope. Our 19 regional to provide accounting leadership on a offices in major cities throughout the broad international scale. country operate somewhat similarly to branch offices of public accounting Recognition of Accountants firms. We have a Paris Office with field in Government locations in Frankfurt, London, Rome, and Madrid. Our activities in the past From remarks at the annual dinner of year included the site audit of the the American Institute of Accountants Government-owned Alaska Railroad, in honor of its members in public serv- review of all business and municipal ac- ice, Washington, D.C., March 16,1956. tivities of the Canal Zone, site audit of I would like to deal more specifically the Trust Territory of the Pacific, air with our own situation in the General base construction in North Africa and Acounting Office. Perhaps we have been Madrid, military construction in Ger- more fortunate than many agencies in many, and procurement practices and the matter of quality of our professional procedures in France and England. In staff. This is to the credit of others Europe, the head of our office is the U.S. rather than myself. We have a profes- representative on the Board of Audi- sional staff of accountants and auditors tors, North Atlantic Treaty Organiza- of about 1,200. Of this number, 70 A n a n w l affair in Washington for a number of years was a dinner honoring new GAO CPAs, sponsored hy the directorate of the accounting and auditing divisions. Pictured above are guests at the 1955 dinner. Seated left to right are: T. Coleman Andrews, Commissioner of Internal Revenue, and former Directvr, Corporation Audits Division ; Joseph Campbell, Comptroller General; Robert L. Long. Director of Audits; Maurice H . Stans, President, American Institute of Accountants; Frank H . Yeitzel, Assistant Comptroller General. Standing: Charles E. Murphy, Staff Director, Division of Audits; Robert M . Gartner, Division of Audits, highest average score on CPA examination in D.C.; Stanley S. Warren, Division of Audits, highest average score on C P A examination in Virginia; James L. Thompson, Jr., Accounting Systems Diuision, honorable mention. among the highest 10 in the country; Ted B. Westfall, former Director of Audits; and Howard W. Bordner, former D q m t y Director, Corporation Audits Division. 68 PROFESSIONAL ACCOUNTING AND AUDITING STAFF percent are college graduates. Over 300 year but it has been difficult to gain are certified public accountants-about recognition, within the Government, of one-fourth of the staff. About 65 per- our need for a flexible action program. cent of our 200 top supervisors are We do not yet know how we will make CPAs. Over 160 are members of the out. We plan to follow through with American Institute of Accountants and intensive training efforts but it is ob- over 140 are members of State societies vious that we have a long road ahead and of many other professional groups. to meet our ultimate needs. We feel Need I offer any apologies for them? I reasonably optimistic about this side think not. of our picture but we also need your What I have indicated, of course, rep- understanding and assistance in devel- resents only one side of the coin. First, oping those facets of our career pro- there is the magnitude of the total job gram which will make continued em- to be done. Second, with what re- ployment with the Federal Government sources, have we to do it? a recognized segment of the accounting I n our accounting systems work we profession. have never contemplated building up a Q <$ * * staff to do more than advise and assist I would be begging the question if I the agencies-it is and should be the did not frankly state that this need for primary responsibility of the agencies greater professional recognition also to devise accounting systems suited to includes greater consideration of ap- their management needs within the propriate Government experience in de- broad framework of the principles and termining qualifications to sit for CPA standards which we are by law re- examinations. Otherwise, a consider- sponsible for providing. We are and able number of those we recruit and should be largely a catalytic agent and train will leave us to seek the profes- advisor. Our staffing problem in this sional recognition represented by the area has been difficult but not un- certificate. At the same time, members manageable. of our staff who have no greater ability In the audit area our problem is a but who have been more fortunate in quite different one. If we are to expand receiving such recognition are fre- our modernized audit program to all quently in demand outside of Govern- areas of Government-and particularly ment. If the professional character of Defense-we are confronted with a ma- our work is appropriately recognized, jor recruiting problem at all levels. Our we believe the challenge it presents will concept of audit permits no compromise permit us to effectively compete even in the quality of our staff. We recognize though financial incentives at the top that we have many handicaps to over- levels in Government will always be come in today’s competitive market. less than in private employment. However, we believe we can offer a To round out my discussion of our challenge, equaled by a few. in the staff picture in the General Accounting scope of diversity of our work. Office, I wish to pay tribute to the fine We are undertaking an aggressive re- groups we have in other professional cruiting campaign in the colleges this endeavors. I refer to our legal staff, our 69 PROFESSIONAL ACCOUNTING AND AUDITING STAFF transportation experts, our legislative The operating divisions of the Gen- liaison, and others. Along with our ac- eral Accounting Office are responsible countants and auditors, they make a for carrying out the accounting, audit- great team. ing, and investigative functions in the civilian and military departments and Recruiting, Training, and agencies of the Government. Professional Development Staff Management is responsible for of Accountants recruiting, training, and developing the professional accounting staff and From remarks delivered before the an- other staff management functions. The nual meeting of the Pennsylvania In- Staff Management function permits an stitute of Certified Public Accountants, increase in the recruiting and training Pocono Manor, Pa., June 17, 1957. effort through which the size and qual- ity of our staff can be raised to a point Organization for Professional Accounting closer to meeting the requirements of an expanding audit and accounting pro- To facilitate the accounting, audit- gram with an increasing emphasis on ing, and investigative functions of the professional development. General Accounting Office, we have The Accounting and Auditing Policy brought about a realignment of our Staff is responsible for the development professional staff. The change in orga- of accounting and auditing policy and nization consisted of merging the ac- overall principles and standards, and counting and auditing functions of our for the coordination of the other four Accounting Systems Division and the divisions. The policy staff also reviews Division of Audits and the investigative the work programs of the operating di- function of our Office of Investigations visions for the purpose of evaluating into two accounting, auditing, and in- effort with results, and reviews all vestigative divisions-one responsible reports to assure conformity with for the assignments in the civilian policy, objectives, and reporting agencies, the other for the work in the standards. defense agencies-and bringing about The Field Operations Division is re- a sharper distinction between staff sponsible for assignments performed in functions and operations. the 19 regional offices in the United Today the organization for account- States in accordance with plans de- . corn- ing, auditing, and investigatin, IS veloped by the Civil and Defense prised of five major groups: two oper- groups. Incidentally, we also have ating groups-the Civil Accounting offices in Europe and Japan. and Auditing Division and the Defense ++ t x n Accounting and Auditing Division ;two staff groups-the Accounting and Recruiting Auditing Policy Staff and the Office of Staff Management; and the Field Oper- At present we have approximately ations Division. 1,400 professional accountants in the 70 PROFESSIONAL ACCOUNTING AND AUDITING STAFF General Accounting Office. Of this faculty members in all of our major number, more than 325 are certified colleges and universities. public accountants. About 100 of these * K t f t obtained their CPA certificates after joining our staff. Most of the direc- Training tors of our accounting and auditing organizations are CPAs, and on a na- To make sure that each individual tional basis, 75 percent of all directors, with the General Accounting Office is managers, and supervisors are CPAs. indoctrinated to our way of doing However, our present professional things, we conduct several training pro- staff is not large enough to carry the grams to orient and develop our pro- workload we have, and the recruitment fessional staff. Each individual who of qualified professional personnel comes with us attends an indoctrination continues to be a serious problem. training course soon after reporting for We are placing a great deal of em- work to acquaint him with the organi- phasis on recruitment and development zation and functions of the Office, and of personnel at all levels and during the the specialized knowledge required by present year have made considerable our work. The course also includes in- progress in our total recruitment struction on the professional attitudes program. and performance we expect from our I n the past year our people visited employees. Advice and encouragement 290 accredited colleges and universities is given to employees to further their which offer a degree in accounting. Dur- professional development. This class- ing the present school year, we are em- room instruction is followed by an or- ploying more than 250 junior account- ganized, closely supervised program of ants from 131 colleges and universities. on-the-job training, particularly for the new men out of college. We feel that the students coming with Y a us are of exceptionally high quality. We are stressing quality in recruiting be- We plan to follow the original train- cause of the professional nature of our ing program in about 1 year, with a 2- week classroom program aimed at work. bringing intermediate training to jun- In order to maintain and increase ior auditors to advance them more r a p our staff of qualified accountants, it will idly to the senior level. Our intermedi- be necessary for us to recruit several ate training program includes such hundred new accountants each year. subjects as professional development, To accomplish this, w e have been in- report writing, and technical problems. forming the people in the colleges and In all subjects, we will use actual cases universities, in industry, and in public arising in the performance of our work. accounting of the professional account- Y n ++ t d- ing program in the General Accounting Specific areas of development are of- Office. We have developed several bro- ten needed by professional people. In chures on job opportunities and careers order to prepare our professional ac- within the Office and have sent them to countants for the electronic age, we 71 PROFESSIONAL ACCOUNTlNG AND AUDITING STAFF have started a series of training pro- nally decided that we would set up an grams in electronic data processing to ofice for the one purpose of recruiting prepare our staff for audit work in in- accounting personnel. stallations using electronic equipment. Now, as to lawyers, we have not had x- . .A b 9 c too much trouble. Mr. Fisher has been watching for young lawyers, for the real Professional Development topflight young men, and I think he has been very successful without too much As a part of our overall professional trouble. development program, we are watching In investigators, there is no problem, closely the progress of each individual but with accounting personnel, it is a in order to make sure that the em- tremendous problem and we have ployee’s potential is developed to the brought in Mr. Leo Herbert, who is a fullest extent. In order to do this, we are very well known teacher of accounting observing the work of each individual employee to see that he is rotated on and also a practitioner. He has a small his assignments, is promoted when staff devoted entirely to keeping in ready and, if necessary, receives addi- touch with universities and colleges and tional professional training. schools of accounting and also account- It is impossible for an individual to ing firms, recruiting at all levels. obtain all his professional development within the organization or during work- For1962 (Mar. 15, 1961) ing hours. We are constantly stressing to our people that professional devel- Mr. THOMAS. ++ ’+* I note that out of your 5,100 employees you are taking opment must come through their own efforts as well as ours. We believe that a reduction for fiscal 1962 in the neigh- the professional individual never fully borhood of 44, and you are increasing completes his professional training and your staff by some 158 young profes- he needs constantly to keep up to date. sionals. I believe those are the figures We feel that we have a responsibility you used. for seeing that our employees continue I believe you further said that out of their professional development. your entire personnel load you have around 2,100 professionals. Building GAO’s Professional Staff What do you mean by professionals? Mr. CAMPBELL.We mean lawyers From hearings before Independent Of- and those accountants who already have fices Subcommittee of House Appro- qualified as certified public account- priations Committee. ants, and accountants, auditors, and 5- vestigators who have the educational For1958 (Feb. 26, 1957) background and experience to ulti- Mr. YATES.Mr. Campbell, do you mately qualify. have any trouble getting personnel? Mr. THOMAS. It has been the obser- Mr. CAMPBELL.Mr. Yates, we have vation of the committee that year by had a great deal of trouble and we fi- year you have constantly upgraded the 72 PROFESSIONAL ACCOUNTING AND AUDITING STAFF personnel of the GAO in that particular General Accounting Office during line, is that correct? World War I1 were for the most part Mr. CAMPBELL.Yes, sir. people at desks. They had a desk and chair to do the kind of job Mr. Evins For 1963 (Feb.9, 1962) spoke of, seeing that things were done legally. Mr. CAMPBELL.* * * our staff has This is no longer our problem. Our declined over the past 7 years, for ex- problem now is to move out into the ample, from 5,800-plus people down to field and see whether the job is being close to 4,700 today. Actually we have done properly. increased enormously the field force of our Office in that period of 7 years from For 1966 (Feb. 18, 1965) about 1,200 to about 2,000. This in- crease from 1,200 to 2,000 is really a Mr. CAMPBELL.We have increased very great increase in our potential our professional staff by almost 100 working force because these are people percent in the last 10 years, from 1,110- trained in field accounting and audit- to 2,200-odd. This we are doing as fast ing. Not that our staff in the transporta- as we can. I would have come in for tion work are not able citizens but more money for our professional ac- rather that we now require very well countants and lawyers if we felt that we trained individuals able to work in the needed them on the legal end and if we field on complicated accounting and could find them on the accounting end. auditing assignments and to absorb in- We lose each year about 80 of our tensive further training. I refer now to young accountants to other Govern- this group of 2,000. These are our ment agencies, which is the normal “travelers.” These are the men who can thing. pack up a bag and move out into any Mr. JONAS. How about to private area with very good education and industry? training behind them. Mr. CAMPBELL. Private industry and The 14,000-plus people we had in the public accounting take some. 73 ELMER B. STAATS COMPTROLLER GENERAL OF THE UNITED STATES ,5- -2['., The Role of the General Accounting Office in Reviewing the Results of Federal Programs Testifying in September 1969 before the Subcommittee on Executive Reorganization of the Senate Government Operations Committee, Comptroller General Staats reviewed the evolution of GAO audit operations and the prospects for continued evolution with greater emphasis on evaluations of the results and accomplishments of Government programs. This article is adapted from the Comptroller General's formal statement to the subcommittee. Principal Functions of the be summarized under five principal General Accounting Office headings : The General Accounting Office was 1. Audit and Review-The primary created by the Budget and Accounting purpose of General Accounting Office Act, 1921, as an independent office in audits and reviews is to make independ- the legislative branch of the Govern- ent examinations of the implementa- tion of legislation by the executive ment. The Congress gave the GAO ex- branch, including inquiring into such tensive authority to render legal opin- questions as: ions, to adjudicate certain types of claims and contract disputes, and to Whether the funds and other re- make independent audits and reviews of sources are utilized only for the executive branch. It intended clearly authorized programs and activities and are properly accounted for and that the GAO be a nonpolitical, inde- reported. pendent arm of the Congress to assure Whether agency resources are that funds were spent in accordance managed efficiently and economi- with law and that programs were car- cally. ried out as intended by the Congress. Whether programs are achieving The Comptroller General, while ap- the objectives intended by the pointed by the President, cannot be Congress in enacting the legisla- removed by him. He serves a 15-year tion. term and cannot be reappointed. In addition, GAO audits negotiated The GAO charter is broad and may contracts and centrally audits bills and 74 REVIEWING RESULTS OF FEDERAL PROGRAMS claims for transportation services pur- Congress, or arise in connection with chased from commercial sources. claims originating outside of the Gov- 2. Assistance to Congress-The GAO ernment. The heads of departments and provides direct assistance to the Con- agencies and disbursing and certifying gress through special reports made at officers frequently request a Comptroller the request of congressional committees General's decision before initiating new and individual Members, through in- programs, executing contracts, promul- formal staff assistance to committees, gating regulations, and certifying or and by assigning staff to the commit- disbursing public moneys. Similarly, tees. We are often called upon to testify Government contracting and procure- before congressional committees and ment officers as well as individuals furnish reports on several hundred bills doing business with the Government during each session at the request of refer to the General Accounting Office committees. Three legislative attorneys legal questions arising in connection are in continuous contact with staff with the award of Government con- members of the various committees to tracts. The Comptroller General's de- keep them up to date on GAO work and cisions are final and conclusive on the ' to provide or arrange for this assistance. executive branch subject only to con- 3. Accounting Principles and Stand- trary action by Congress or the courts. ards-The GAO is required to prescribe 5. Claims Settlement-The law places principles and standards for accounting final responsibility for settling most in the executive agencies, to cooperate claims for and against the Government with those agencies in the development and improvement of their accounting in the General Accounting Office. and financial management systems, to Claims which involve no doubtful ques- determine the adequacy of their ac- tion of law or fact are paid or collected counting systems, and to approve them by the agency involved subject to post- when they meet our requirements. An audit by us. Certain claims are within important means of improving financial the exclusive jurisdiction of particular management practices is the Govern- agencies or the courts. Claims against ment-wide cooperative Joint Financial the United States may be made by indi- Man agemen t Improvement Program viduals; business entities; or foreign, under the leadership of the Secretary of State, or local governments. Settlements the Treasury; the Director, Bureau of by the General Accounting Office gen- the Budget [now the Office of Manage- erally are final although a claimant has ment and Budget] ;the Chairman, Civil further recourse to the courts and the Service Commission; and the Comp- Congress. Claims by the United States troller General of the United States. which cannot be collected or compro- 4. Legal Opinions - Many legal mised are reported to us as uncollect- questions arise as to the authority for ible. We attempt collection, and, if un- expenditures of funds. These questions SuccessfuI, we decide whether they arise in the course of our audit work, should be referred to the Department originate in the agencies or in the of Justice for litigation. 75 423-774 0 - 71 - 6 REVIEWING RESULTS OF FEDERAL PROGRAMS Development of GAO Audit and agencies for adequate financial Approach management. Important from the GAO’s standpoint, it authorized the Initially, under the Budget and Ac- Comptroller General to require agen- counting Act, 1921, the audit work of cies to retain at the site of operations the General Accounting Office was done documentation that was previously almost entirely here in Washington. transmitted to the GAO for desk-type Departments and agencies sent in to audits. It also gave the Comptroller the Office the original copies of their General discretion as to the extent of financial documents. GAO audit re- audit to be performed by the GAO. The sponsibilities were then discharged pri- general premise adopted for audit pur- marily by a centralized desk audit of poses by the General Accounting Of- these documents. The major emphasis fice is that achieving efficient, economic, was on detecting errors or illegal ex- and effective operation is basically a re- penditures. Limited work was done at sponsibility of agency management. agency locations until the World War One factor in this connection is the I1 period when most cost-plus-fixed-fee ability to rely upon management con- contracts were audited at contractors’ trols and agency internal audits, when plants and document centers. adequate, as a way of reducing the The Government Corporation Con- amount of detailed work we have to do. trol Act of 1945 required the General The GAO was thus able to gradually Accounting Office to make an annual develop its “comprehensive” audit ap- commercial-type audit of Government proach, that is, the GAO began to go corporations. Instead of having the ac- beyond questions on the legality and counts and vouchers sent to the GAO propriety of expenditures into other for central audit, staff members were aspects of management. sent to where the records were kept. And instead of limiting our concern to vouchers and contracts, our staff also Selecting Areas for Review began studies to report on needed man- agement improvements and to examine In selecting areas for review we give into how programs were carried out. primary attention to those areas known The effect of the 1945 act was to create or considered to be of direct in- a requirement for increased profes- terest to the Congress or which, in our sional staff. judgment, should be reviewed by the The Legislative Reorganization Act GAO as an independent arm of the of 1946, the Federal Property and Ad- Congress. ministrative Services Act of 1949, and In addition to congressional requests, the Post Office Department Financial the important factors considered in Control Act of 1950 also prescribed re- reaching decisions on the allocation of sponsibihties which could be carried our effort are: out only at the site of operations. 9 Specific statutory requirements. The Budget and Accounting Proce- Expressions of congressional inter- dures Act of 1950 placed heavy empha- est; e.g., views contained in com- sis on the responsibility of departments mittee reports. 76 REVIEWING RESULTS OF FEDERAL PROGRAMS Importance of programs or activi- broaden the scope of our emphasis from ties judged by such measures as individual examples of waste and in- size of exenditures, public impact, efficiency to more extensive inquiries investment in assets, and amount of into basic causes of adverse conditions. revenue. In line with this objective, in June Criticisms indicating potential 1966, I approved the reorganization of needs for corrective action. our Defense Division along functional The weight to be given these factors lines to enable us to make better use of varies from agency to agency and from our manpower resources, afford the program to program. An overall review most favorable basis for broadening the of our work program is made each 6 scope of our reviews, and provide maxi- months. mum response to the needs of the Con- The reports issued to the Congress gress. Under this organization, we have constitute one of our most important been able to enlarge and intensify our means of assisting the Congress. The reviews in the Defense Department in information contained in the reports is the following areas: research and de- . intended to give the Congress, as well velopment, procurement, supply man- as the agency heads, an objective ap- agement, manpower, facilities and praisal of the operations of the agency construction, support services, and man- o r activity covered which we believe agement control systems. In view of the need congressional or executive branch increasing significance and magnitude attention. Our objective is to aid the of weapon systems acquisitions, we later legislative committees and staffs in established a separate group under a carrying out their oversight responsi- senior operating official with the respon- bilities and to assist the Appropriations sibility for reviews in this area within Committees in considering agency bud- the Defense Division. get requests. We believe the record shows that Our reports cover subjects ranging over the years our reviews of defense from the uses made of foreign currency, activities have resulted in hundreds of military and economic assistance, urban millions of dollars in savings and im- renewal programs, public housing, provements in the management of De- space exploration, atomic energy pro- fense Department operations. grams, antipoverty programs, man- power development and training pro- Assistance to the Congress grams, to the procurement, production, and operation of major weapon systems About one-fifth of our professional in the Department of Defense. staff effort is devoted to meeting For many years the General Account- congressional requests, principally ing Office has continuously directed a through: significant portion of its audit efforts Reports and testimony. to the review of defense procurement, Special reports requested by the supply, and other activities. Shortly Congress, its committees, and in- after assuming the office of Comptroller dividual Members. General, it became my objective to Assignment of staff to committees. 77 REVIEWING RESULTS O F FEDERAL PROGRAMS Reports on bills. words, the GAO does not have the Informal technical advice in legal authority nor should it seek to become and legislative matters. a congressional Bureau of the Budget Recommendations for legislation in with responsibility for the review of the financial and administrative departmental appropriation requests; areas. i.e., to assess the need for particular Audit of House and Senate finan- funding levels based upon program cial and administrative operations; needs or the priorities among different e.g., the House and Senate record- programs. ing studios, etc. On the other hand, the GAO has * And, quite recently, assistance to played and we believe can play an in- the House Committee on Adminis- creasingly important role in assisting tration which is reviewing the both the legislative and Appropriations feasibility and need for computer- Committees in the consideration of based information systems. new programs. Looking to the future, I believe our The work which we initiate on our assistance to the Congress can be made own is, to an increasing extent, directed more effective by (1) further increases toward analyzing or evaluating estab- in our staff assistance to legislative com- lished programs. We do not, as I have mittees during their consideration of said, direct our efforts to initiating new proposals for new or revised Federal program proposals. Nevertheless, we programs and (2) further emphasis produce much information in the course upon evaluating program results in of our self-initiated work that should relation to established objectives. be useful in connection with congres- sional consideration of new programs. Assistance in Considering What I have in mind here is that aware- New Legislation ness of the degree of success in meeting objectives of and problems encountered In the past the General Accounting in ongoing programs can be of assist- Office has made recommendations for ance in consideration of new legislative new legislation, but these have been authorizations. primarily in the areas of administration, How can GAO be most effective as a organization, and financial management staff arm of the Congress and the com- rather than with the need for new pro- mittees as they consider new legisla- grams or with respect to program fund- tive proposals? An important need of ing levels or budget priorities. the Congress in its decisionmaking role We do not believe that it is the desire is to know specifically what alternatives ,- of the Congress that GAO initiate new exist and whether adequate analyses I' program proposals to deal with social, were made of these alternatives. Con- economic, national security, or other gress needs to have available to it in- problems or needs. Nor do we have formation with respect to the projected responsibility for initiating recommen- long-term costs and benefits, as well as dations with respect to program funding the relationship of growth of one pro- levels or budget priorities. In other gram to that of other programs. REVIEWING RESULTS OF FEDERAL PROGRAMS Many of these analyses, although cannot make highly useful analyses of made by the executive agencies, are not alternatives and otherwise assist the available to the Congress or to the Congress in attaining all pertinent in- GAO. The executive agencies frequently formation bearing upon legislative consider such information to be of an proposals. internal nature, the release of which The degree and the rate at which this would tend to inhibit candor among increased assistance can be provided subordinates in providing superiors also depends importantly on two other with their opinions, conclusions, and factors : recommendations. Furnishing projec- 0 To be productive from the stand- tions of future costs likewise offers point of the committees and feas- problems. ible from the standpoint of the However, in a few instances where GAO, all practicable steps should the underlying studies of alternatives be taken to avoid time schedules were made available to the GAO, we which involve “crisis” evaluations believe we were able to make use- of executive branch proposals, usu- ful summaries ; highlight significant ally many months in the making. points; and develop questions, alterna- Obviously GAO’s assistance to the tives, and issues for the committees’ committees can be useful only if use. adequate time is permitted. Additionally, the GAO can assist the The extent to which GAO has avail- committees in formulating requests for able, or can obtain, special skills executive branch agencies to evaluate required to perform the highly alternatives which they could require in technical work required to evalu- connection with reauthorization or ate alternative program possibili- modification of programs. We believe ties. there is a considerable potential for in- creased utilization of executive branch Reviews of Program Results evaluations. We now turn to the related question Briefly stated, we believe that the of the work of the General Accounting GAO’s assistance role in the considera- Office in the assessment of the manner tion of new legislation can be expanded in which the executive agencies are but we believe it should be done only in carrying or have carried out previously response to specific requests from com- authorized programs. In brief, the mittees or from the Congress as a whole. question is: “What is GAO doing by Also, we believe that, as a general prop- way of evaluating in its reviews and re- osition, the GAO should refrain from ports to Congress whether programs are - making recommendations for the adop- achieving the objectives intended by tion of a particular program or policy the Congress and whether alternative under legislative consideration in view approaches have been examined which of its responsibility for subsequent in- might accomplish these objectives more dependent reviews of the implementa- effectively or more economically?” tion of programs which may be author- Section 312 of the Budget and Ac- ized. This does not mean that the GAO counting Act, 1921, directs the Comp- 79 REWEWING RESULTS OF FEDERAL PROGRAMS troller General to “investigate * * * operating programs needing more all matters relating to the * * ’’ appli- detailed review and of possible in- cation of public funds * * *.” Simi- terest to the Congress. larly, section 206 of the Legislative Re- Agency internal management con- organization Act of 1946 directs the trols and systems have been Comptroller General to make “an ex- strengthened over the years with penditure analysis” to determine the result that we have been able “whether public funds have been eco- to place greater reliance on in- nomically and efficiently administered and expended.” These provisions clearly ternal audits and management re- views. This in turn has lessened the I indicate, in our opinion, that the Con- need for GAO to conduct such gress intends the GAO to be concerned audits and reviews. with whether funds expended are 0 GAO staff has developed increased i achieving the intended objectives and at competence and detailed knowl- ~ a reasonable cost. It certainly is clear edge of Federal programs through I that the GAO is expected to go beyond long experience. Increased capa- 1 consideration of legality of expendi- bility has also come from major in- tures and agency administrative vestments in training, and more . activities. recently through recruitment of The need to place greater emphasis staff members and consultants with on program results has received a great expertise in a variety of disciplines. deal of attention not only in the GAO Requests from committees of Con- and the Congress, but also in the execu- gress for assistance, either by de- tive branch agencies, State and local tailing of staff or by requests for governments, and private industry. GAO-conducted studies, have in- creasingly emphasized studies of Evolution of Broadened program effectiveness. Audit Work The interest of the Congress in hav- ing the GAO emphasize reviews of pro- As previously indicated, the in- gram results has also been reflected in creased emphasis given in our reviews several recent expressions. to program results as contrasted with The Economic O p p o r t u n i t y the more limited type of financial audit Amendments of 1967 directed the goes back many years. It may be help- Comptroller General to make a ful to summarize at this point the prin- study of the efficiency of the ad- cipal factors which have affected the ministration of programs and ac- extent and rate with which this change tivities of the Office of Economic , in emphasis has taken place. Opportunity and local public and Performance of audit work at private agencies carrying out OEO- agency sites in contrast with the sponsored programs and, impor- centralized fiscal audit has pro- tantly, the extent to which these vided our staff with greater fa- programs were achieving the ob- miliarity with program operations jectives set forth in the Economic and has enabled them to identify Opportunity Act. 80 REVIEWING RESULTS OF FEDERAL PROGRAMS The Intergovernmental Coopera- and Economic Development Act of 1965 tion Act of 1968 provided, in con- is quite general in its statement of pur- nection with grant-in-aid programs, pose and avoids specific earmarking of for studies by the Comptroller funds. On the other hand, much of our General to determine the extent of housing legislation is quite detailed in duplication between programs and specifying the type of assistance author- the extent to which economies and ized and in the earmarking of funds greater uniformity of administra- for each purpose. I tion might be achieved under Another useful approach in evaluat- alternative procedures. ing program results can be applied The Senate Labor and Public Wel- where similar programs are adminis- fare Committee recommended in tered by different agencies, sometimes 1968 in its report on the Manpower authorized by different legislative Development and Training Act enactments. that the GAO broaden its activity Evaluation of program results is also in the area of manpower program made easier for both the GAO and the evaluation in order to provide Con- agencies where operating guidelines gress with objective data needed to and program objectives are adequately compare programs of the several developed. This means that program different agencies involved. objectives must be established and per- The proposed Legislative Reor- formance measured against these ganization Act provides that upon objectives. the request of any committee of the Congress the GAO undertake or as- Personnel Needs sist the committee in undertaking cost-effectiveness studies. The Federal budget increased from We have increased our efforts to about $100 billion in 1961 to almost evaluate program results and the ef- $200 billion in 1970-an increase of fectiveness of the departments and 100 percent. During the same period, agencies in accomplishing established the budget for the General Accounting goals or objectives. In addition, we in- Office increased from about $41 million creased the number of reviews of func- to $63 million-an increase of 54 tions or activities having multiagency percent. or Government-wide implications. I t is evident that we cannot expect, with our present staff, to review all im- Factors in Evaluating Performance portant aspects of program adminis- Eflectiveness tration throughout the Government. At June 30, 1969, of the 4,544 employees Our ability to relate the effectiveness of operating programs to legislative ob- on the GAO rolls, 2,369 were profes- jectives depends in part upon how spe- sional accountants and 296 were pro- cific the legislation sets forth these fessional staff in other disciplines. This objectives, either in the legislation itself makes a total of 2,665 professional staff or in the accompanying legislative his- involved in our accounting, auditing, tory. For example, the Public Works and review activities. How large this REVIEWING RESULTS OF FEDERAL PROGRAMS segment of our staff should and can be increase our efforts to obtain highly is dependent on many factors ranging qualified and experienced professional from the increased assistance the Con- staff, (2) increase the application of gress will expect to our ability to re- specialized disciplines to management cruit the required number and types and program reviews, such as systems of skills. analysis, computer technology, actu- It has been my objective since assum- arial science, etc., and ( 3 ) use expert ing the office of Comptroller General consultants to a greater degree in areas to increase the capability of our pro- where we lack the necessary expertise. fessional staff. We believe, too, that, as our accounting ,I ‘ Our experience over the past 10 years and auditing staffs capability of per- has been that we are able to recruit an- forming program reviews is further de- nually an average of about 350 top veloped through intensive training and , quality graduates of the universities experience, a greater portion of our and colleges. We could lower our stand- staff can be diverted to the more com- 1 ards for recruitment and obtain a plex problems involved in evaluating , greater number of graduates but with program results in comparison with less potential to develop rapidly to po- objectives. I sitions of competence and responsibil- -- ity. It takes several years to develop EDITOR’S NOTE: The full statement of the Comptroller junior staff members to their full po- General hefore the Senate subcommittee tential even with our intensive training (chaired by Senator Abraham Ribicoff of programs. Connecticut) will be found in the following Not only are we concentrating on in- Senate publication: “Capability of GAO to creasing our staff of professional ac- Analyze and Audit Defense Expenditures,” Hearings before the Subcommittee on Execu- countants and auditors, but we recog- tive Reorganization of the Senate Committee nize the need to add professional staff on Government Operations, 9lst Cong., 1st educated and experienced in other dis- sess., September 1969. ciplines-economics. business adminis- Following the hearings, Senator Ribicoff tration, mathematics, engineering, and introduced the Budget and Accounting Im- systems analysis-to achieve the ca- provement Act of 1970 which was designed to further strengthen and broaden the opera- pability to more effectively review and tions of the GAO in order to provide more evaluate Government programs. effective service to the Congress. The bill (S. The GAO has a highly capable staff 4432) passed the Senate during the 91st of professionals on which to continue Congress but was not acted upon in the House. to build the manpower resources As GAO completes its first 50 years, the 92d Congress has before it for consideration a needed for the future. In expanding our ’ similar bill (S. 1022) introduced by Senator program review activities, we will ( I ) Ribicoff on March 1, 1971. 82 1940 Picture Story of GAO In its special series entitled “Our Town In Pictures,” The Washington Post for Sunday, August 11,1940, presented an eight-page picture story of the GAO of that day. Accompanied by brief descriptions of the work of the Ofice, the story included 71 pictures of individuals and groups of employees hard at work in the Pension Building during the heat of the summer of 1940 ( n oair conditioning, of course). The pictures of employees in large r o o m at long rows of desks piled high with papers sharply illustrate the difference in the nature and principal operations of the GAO of that day and today. Virtually all auditing was then done centrally. Following are excerpts from the text of the Post’s story by Christine Sadler. How Uncle Sam Keeps Track and Minerva carved in the spandreIs- of Every Cent He Spends all were in the plans. The %foot high frieze * * * runs Work of the General Accounting completely around the building, chang- Office is scattered in eight buildings ing its motif over each door. On the in different parts of the city-but head- north is the Gate of the Invalids. The quarters are in the unique old Pension south side, above, is the Gate of the Office Building on Judiciary Square. Infantry. Gate of the Quartermaster and From 1885 to 1909 the central hall the Naval Gate are on the west and east of this remarkable structure was the sides, respectively. scene of inaugural balls given for Inaugural balls held there in the great Presidents Cleveland, Harrison, Mc- central hall grew “progressively more Kinley, Theodore Roosevelt and Taft * *. + splendid.” Newspaper accounts of some + * + * f > of the last declared that “never in the \ history of the New World” had there Architecturally speaking, nothing been other social events to match them. was too good for the Pension Office * + * + t i Building when it was constructed in 1883 as a memorial to Union veterans The General Accounting Office was of the Civil War. Ionic, Doric and created in 1921 by an act which abol- Corinthian columns, terra-cotta frieze, ished the posts of Comptroller of the a superimposed arcaded gallery, Mars Treasury and six Treasury auditors. 83 1940 PICTURE STORY Washington Post Photo GAO working space in the Pension Building at the time The Washington Post story was written. 84 1940 PICTURE STORY Importance of the office scarcely can charged with the duty and responsibility be over estimated, especially during of making investigations into economy days of increasing Government expend- and efficiency of laws concerning ex- itures such as these. Rapidity of the penditures of the Government, and increase can be seen in the figures which making reports to Congress suggesting show that GAO in 1936 had a personnel improvements. of nearly 2,500. Today, the figure runs + * * * * above 5,OOQand still is mounting. Generally speaking, the Comptroller Government Vouchers Total General-executive officer of the 18,836,208 Annually GAO-has to countersign all warrants signed by the Secretary of the Treasury Imagine a bookkeeper with 307,072 before they are legal. ledger accounts to keep straightened In addition to checking and auditing out. Uncle Sam is such a person. Last and bookkeeping, the office is also year he received for auditing a total Tashington Post Photo A s described in The Washington Post story: “in the old Pension goldfish pond, Arthur M d q u e e n and Mervin Martin carry on research and record stacking jor General Accounting Ofice.” i i 85 1940 PICTURE STORY of 18,836,208 vouchers covering Gov- and rules governing Government money ernment expenditures, was able to get run into the thousands. GAO keeps up through approximately 16,000,000 of with them by putting thousands of them. And every year his financial op- workers onto the job, and keeping them erations get bigger. at it. In scores of rooms ’+’’ ?(- workers ?(- spend their days chasing his pennies, reconciling what is spent with what was GAO Audits Stamp and Money Order Sales appropriated to be spent, checking up on his income from all sources, keeping The Post Office Department is one track of the amount of gold at Fort of GAO’s biggest “customers.” Its Knox. stamp transactions, money orders, The sale of every 2-cent stamp is a postal savings certificates and savings concern of the General Accounting Of- bond sales are checked by GAO fice and gets on its books eventually. workers. Also, approximately $2,000,- Every check written by the Government 000 worth of stamps issued to migra- comes back to its files for checking and tory bird hunters annually are kept on storing. Every typewriter ribbon used GAO books. in the writing of Government reports, Postal revenues amounting to $745,- every light bulb must “balance” on the books. In addition to a “good head for fig- 995,075 were audited by GAO during 1939. Domestic and international money orders for amounts totaling , I ures,” the Comptroller General also $2,09O,OOO,OOO also went through the must have school teacher and watchdog GAO hopper. qualities. He’s responsible for interpre- Accounts from approximately 7,000 tation of appropriation acts, must re- postal savings depositories throughout member just what a certain department the country are GAO audited. Postal can buy and where. savings certificates for sums varying For instance, he must not permit any between $1 and $500 are now held by Government official to purchase glue approximately 2,700,000 depositors. and ink except from the Public Printer Sum total of certificates’ worth is $1,- nor to buy envelopes except under con- 292,000,000. They draw 2 percent in- terest annually. tracts made by the Postmaster General. He must watch to see that Government employees traveling on business use i “the most direct usually traveled route GAO Lawyers Are Consulted if There’s a Question About Government Payments and that the facilities be not in excess of standard first-class accomodations.” A primary function of the General Various grants to States are made Accounting Office is the interpretation under cooperative agreements and GAO of laws dealing with appropriations. wants to know that conditions of agree- Not the department head himself, but ments were fulfilled before checks are the Comptroller General, gives the rul- drawn against the grant account. Laws, ing on legality of payments to and by red tape requirements, voucher forms the Government. 86 1940 PICTURE STORY Washington Post Photo The Washington Post captioned this picture as: “Genera[ view of a lawyer’s room at GAO headquarters shows attornejs plunging ahead, despite Washington heat.” 1 - If there is a question concerning ernment structure and had to act Government payments, GAO often is quickly without familiarity always with consulted before payment is made. This Government procedure. saves “headaches” afterward-for Two hundred and fifty attorneys are GAO’s word takes precedence. assigned to GAO-50 engaged in The normal volume of statutes to be straight legal work and the others in construed and of legal decisions and claims and examining divisions ’‘ ’‘ *. correspondence work relating thereto All Government divisions making ex- approximately doubled during the depression years. This increased legal penditures have the right to ask GAO work of GAO enormously. Another fac- for a ruling before giving checks tor which added to legal increase dur. * * *. The number of questions arising ing depression years was the number of on requests for review during fiscal civilians who were absorbed into Gov- year of 1939 was in excess of 4,000. 87 JOHN C. FENTON ”// 3--A/ The Corporation Audits Division- Its Legacy to the Seventies The author, an early member of the Corporation Audits Division, has compiled one of the most complete records of the establishment of this proud organization and of its trials, tribulations, and accomplishments over its 61/3-year life as a separate entity within the GAO before it became the backbone of a larger organization. The Division developed a fine reputation and accumulated a store of experience which redounded to the benefit of all those who joined the GAO at a later date and which continues to benefit the present staf. Hence, in a real sense, it created a legacy for the seventies. Undoubtedly there are many staff lished specifically for the purpose of members of recent vintage who know making the audits required by the I little about the Corporation Audits Di- vision and some who may not have even George Act, approved February 24, 1945, which called for the General Ac- - heard the name. Yet, while not apparent counting Office to audit the financial to these people, the achievements of transactions of all Government corpo- this Division are felt today. It has left rations in accordance with the princi- a legacy from which all of us in the ples and procedures applicable to GAO have benefited and will continue commercial corporate transactions. It to benefit. was the intent of the act to bring these The Corporation Audits Division corporations under annual scrutiny by existed as a division of the General Ac- the Congress through the medium of counting Office for approximately 6yz GAO audit reports. years from July 10,1945,to January 18, Later, the Congress enacted the 1952, when, along with the Audit, Postal Government Corporation Control Act, Audit, and Reconciliation and Clear- approved December 6, 1945, which ance Divisions, it was merged into a made some necessary additions and re- newly created Division of Audits. The finements in the audit provisions of the Corporation Audits Division was estab- George Act and provided for further ~~ Mr. Fenton, an assistant director of the Civil Division, joined the Corporation Audits Division on October 1, 1946, after having served 4 years in the Navy Cost Inspection Service. Previously, he had 15 years’ experience in public accounting. He is a graduate of Washington University in St. Louis and received his CPA certificate in Missouri. 88 CORPORATION AUDITS DlVfSlON control by the Congress by requiring the principal corporations in this group submission of annual budgets by the and the year they were established are wholly owned Government corporations listed below. made subject to the act. Sixteen of the 101 corporations were established between 1940 and 1943, all One Hundred and One as World War I1 emergency agencies. Government Corporations The most important of these were sub- sidiaries of the Reconstruction Finance One hundred and one Government Corporation : Defense Plant Corpora- corporations-63 wholly Government- tion, Defense Supplies Corporation, owned and 38 of mixed o w n e r s h i p Metals Reserve Company, Petroleum were named in the Government Corpo- Reserves Corporation, Rubber Develop- ration Control Act as being subject to ment Corporation, Rubber Reserve audit. These corporations can be di- Company, US. Commercial Company, vided into three groups: those estab- and War Damage Corporation. lished prior to 1932, those established Although these corporations, with a between 1932 and 1938, and those few exceptions, were created by or pur- established between 194.0 and 1943. The suant to authority contained in acts of principal corporations in the first group Congress, normal congressional control were the Panama Railroad Company, through the appropriation process was established as a private company in absent in most cases because in only 1849 and acquired by the Federal Gov- rare instances were the corporations ernment in 1902; the 12 Federal land financed through annual appropria- banks established in 1916; and the 12 tions. Federal intermediate credit banks estab- lished in 1923. Need for Congressional The depression years of the thirties Control saw the creation of 56 more corpora- tions which were designed, for the most Widespread concern over the lack of part, to assist in recovery efforts. The congressional control had arisen be- Reconstruction Finance Corporation . . . . . . . . . . . . . . . . . . . . . 1932 Federal homeloan banks (12) . . . . . . . . . . . . . . . . . 1932 Tennessee Valley Authority . . . . . .... . . .. 1933 Banks for cooperatives (1central and 12 regional) . . . . . . . . .. 1933 Production credit corporations (12 1 . . . . . . . . . . . . . 1933 FederalDepositInsuranceCorporation . . . . . . . . . . . . . 1933 Commodity Credit Corporation . . . . . . . . . . . . . . . . . .... 1933 Export-Import Bank of Washington . . . . . . . . . . . . . . . . . . . . . . . . . . 1934 Federal Savings and Loan Insurance Corporation . . . . 1934 US. Housing Authority (predecessor of the Public Housing Adminis- tration) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1937 Federal National Mortgage Association . . . . . . . . . ... 1938 Federal Crop Insurance Corporation . . . . . . . . . . . . . . . . . . . . . . . . 1938 89 CORPORATION AUDITS DIVISION I cause of the size and power of these cor- preceding enactment of the Government porations, which had assets of over $29 Corporation Control Act. His “Refer- billion at June 30,1945, and engaged in ence Manual of Government Corpora- innumerable kinds of businesses. Their tions” (S.Doc. 86, 79th Cong.) served powers were described as immense and for years as a central source of infor- their funds practically unlimited. They mation on the legal status, activities, were referred to by Senator Harry F. and financing of Government corpora- Byrd as a “fourth branch of the tions. And his hand can be seen in Government.” much of the language incorporated in As a step toward retrieving a measure the audit and reporting provisions of of congressional control, the Joint Com- the act. mittee on Reduction of Nonessential Federal Expenditures, chaired by Sen- Professional Accountants ator Byrd, conducted a 2-year study Join the GAO beginning in 1943, holding numerous hearings to determine what Govern- The George Act and the Government ment programs were being carried out Corporation Control Act placed a heavy through use of the corporate form. One burden on the General Accounting Of- of the bills leading to the enactment of fice. Few of the corporations had been the Government Corporation Control audited by the General Accounting Of- Act-the Byrd-Butler bill-was an out- fice prior to 1945. Since the first audits growth of the study made by the Joint were to cover fiscal year 1945, a back- Committee. Much of the background log had already been created before a material in the committee’s report was qualified staff could be assembled, and prepared jointly by the General Ac- the job to be done was the biggest com- counting Office and the Bureau of the mercial auditing job in the world. Mr. Budget. Warren was determined not only to do a For several years Comptroller Gen- creditable job in this new field but to do eral Lindsay C. Warren had pressed for an outstanding job and to do it the way greater congressional control over Congress wanted and had a right to Government corporations. He vigor- have it done. He determined very early ously supported the objectives of the that it would be necessary to set up an bill-to bring Government corporations entirely new organization to handle this under annual scrutiny by the Congress work and to obtain an outstanding and to provide current financial control leader and a highly qualified support- over their operations-and described ing staff. the resulting act as the most forward- Because of the wartime shortage of looking measure in its field since the qualified accountants, authority was Budget and Accounting Act, 1921. granted to employ not more than 10 Frank H . Weitzel, later to become persons without regard to the Classifi- Assistant Comptroller General, pre- cation Act. In requesting this authority, pared much of the background infor- Mr. Warren informed the Congress that mation and statistical data considered “the staff I must obtain and on which by the Congress in its deliberations I must rely to carry out this audit must CORPORATION AUDITS DlVlSlON be of the highest caliber obtainable. selected him that year for its annual They must be unusually well qualified award for outstanding service for his by practical experience, ability and work in organizing and directing the character if the work is to be performed Division. effectively and produce the benefits Stephen B. Ives, who had joined the which the Congress intended.” Division late in 1946, succeeded Mr. Perhaps the most important legacy Andrews. Mr. Warren then persuaded of the Corporation Audits Division was Irwin S. Decker to come with the Divi- a staff of highly qualified professional sion as Deputy Director, succeeding accountants which did its job well and Howard W . Bordner, the first Deputy provided many of the leaders and the Director. Mr. Bordner had accepted the foundation for the audit activities of position of Assistant Comptroller for the Office today. Accounting Policy in the newly created Office of the Assistant Secretary of Defense (Comptroller). Each of these The Early Leaders men, like many of the top members of The public accounting profession the staff, had years of experience in was consulted as a start toward build- public accounting, and each made use ing the staff. The American Institute of this experience in World War 11. of Accountants, cooperated by recom- Howard Bordner had 17 years of mending personnel and by appointing public accounting experience, including a committee to advise in the organiza- 9 years as a supervising manager of tional and procedural aspects of the Arthur Andersen & Co., Chicago, be- work. The Institute also was called upon fore serving with the Navy Price Ad- to recommend an outstanding mem- justment Board during World War 11. ber of the profession to head the new Steve Ives, who came with the Divi- division. sion as an assistant director, had 17 T . Coleman Andrews, senior partner years public accounting experience since 1922 of the Richmond, Va., firm with Lybrand, Ross Bros. & Mont- of certified public accountants bearing gomery, serving as resident manager of his name, was recommended and was their Atlanta office. He then spent al- persuaded to take the position as a most 4 years with the War Department personal challenge and as a challenge Price Adjustment Board of which he to the accounting profession as a was a member. whole. Mr. Andrews, later to become Irwin Decker had 26 years experi- Commissioner of Internal Revenue and ence in public accounting and was an a candidate for President of the United officer and director of several indus- States. directed the Division for a little trial organizations. He spent 5 years in more than 2 years, leaving in Septem- the Navy Cost Inspection Service in ber 1947, as previously agreed upon, World War I1 and was Supervisory after the Division had been successfully Cost Inspector of the First Naval Dis- organized and the initial audits of each trict before coming to the GAO. corporation had been completed or were Coleman Andrews was installed in of- well underway. The American Institute fice on July 19, 1945, at a salary of CORPORATION AUDITS DIVISION $10,000. This was the highest salary he J. William Fulbright, stated in a com- could receive because only one of the memorative article in the Congressional 10 persons authorized to be employed Record that Mr. Herz was one of the without regard to the Classification Act most imaginative and able men he had could be paid that much. The signifi- ever met. cance of that amount is indicated by the Harold Morse was one of the first of fact that the salary of the Comptroller the top officials to report for duty. As General at that time was only $12,000. a result, he immediately took on the Howard Bordner was appointed on task of interviewing applicants for po- September 30, 1945. Of the early ar- sitions. The Division was indeed for- rivals on the scene, only f o u r of those tunate to be able to benefit from the hired to direct audit assignments were wisdom and experience of this digni- initially appointed as assistant directors fied, stately gentleman, now 84 years although others were soon promoted to old, who came out of retirement to serve that position. These men were Theodore the Office. Mr. Morse had 40 years of Herz, Moore C. McIntosh, Harold S. public accounting experience. Thirty of Morse, and Clyde Weldin. Melville T . these were with Scovell, Wellington and Werner, the Division’s first staff man- Co., where he was a general partner. ager, was appointed as an assistant Over a span of 7 years, Mr. Morse re- director, and 0. Gordon Delk, Jr., who tired and rejoined the Division twice, transferred to the Division to act in an each time to take on a specific administrative capacity, was also given assignment. that title. The salaries of the deputy Me1 Werner, who had been staff man- ’ director and the top assistant directors ager of Arthur Andersen & Co., Chi- were among the highest in the GAO. cago, left the Division in September Ted Herz directed the initial com- 1947 to again engage in personnel work mercial-type audit of the Reconstruc- in the public accounting field. Mr. Mc- tion Finance Corporation and its 10 Intosh also left in 1947, and Mr. Weldin affiliated or subsidiary companies. The served less than a year. Gordon Delk audit report, consisting of 10 volumes, left the Division at the end of 1951 but was a landmark in reporting to the returned to Government as Deputy Congress on the comprehensive audit Commissioner of Internal Revenue of a major Federal corporation. Upon when T. Coleman Andrews became completion of this assignment, Mr. Herz Commissioner in 1953. Mr. Delk had joined Price, Waterhouse & Co., becom- succeeded Mr. Werner as staff man- ing its Washington partner. He also ager and was, in turn, succeeded by served as staff director for task forces Harry J . Trainor so that he could take of the first and second Hoover Commis- on operating assignments. sions and for a subcommittee of the Two other men, Marshall E. Dimock Senate Committee on Banking and Cur- and Azel F. Hatch, who were on the rency which inquired into the lending rolls as temporary consultants for a policies and procedures of the RFC. year or two, also had the title of as- Following Mr. Herz’ death in 1966, the sistant director. Mr. Dimock was the chairman of the subcommittee, Senator author of several articles on Govern- 92 CORPORATION AUDITS DlVlSlON ment corporations and a book entitled ing duty with the Navy Cost Inspection “Government-Operated Enterprises in Service, left after 4 years to become con- the Panama Canal Zone.” troller of the RFC. Shortly afterward Eight men who were promoted to he joined the West Penn Electric Com- the position of assistant director either pany, now a part of Allegheny Power died o r transferred to other employ- System, Inc., of which he is controller. ment prior to the merger of the Divi- Clark L. Simpson left the Division sion. All of these men had joined the after 2% years, ultimately becoming Division in 1945 or 1946. Lucian J . controller of the Export-Import Bank Moret and Glenn P. Smith died while of Washington. Melvin K . Zuch-er, who with the Division. James R. Blakemore also spent about 2Vz years with the Di- resigned to go with the Ford Motor vision, left to join the Office of the Company. Robert S. Brumagim trans- Assistant S e c r e t a r y of Defense ferred to GAO’s Accounting Systems (Comptroller). Division and then to private industry Eleven other men, most of whom where he became controller of Mohasco joined the Division in 1946, were pro- Industries, Inc. moted to the position of assistant direc- E. Allen Kenyon, one of many top tor in the intervening years before the people who came to the Division follow- merger of January 18,1952. All of these CORPORATION AUDITS DIVISION DIRECTORATE, SEPTEMBER 1949 L e f t to right: 0. Gordon Delk. Jr., James R . Blakemore, F’illiam A . Newman. Jr., and Ted B. Westfall, Assistant Directors; Irwin S. Decker, Deputy Director; Stephen B. lues, Director; E. Allen Kenyon, Robert S . Brumagim, Frederic H . Smith, and Azel F . Hatch, Assistant Directors. Curties A. Hurlej, Assistant Director, was not present when picture was taken. 93 CORPORATION AUDITS DlVlSlON men, along with Stephen B. Zves, the a statement of income and expense, a Director, Irwin S. Decker, the Deputy good part of the manual was devoted Director, and Harold S. Morse, trans- to explaining the procedures to be used ferred on that date to the new Division in making a financial-type audit rather of Audits. Six are with the General Ac- than an audit restricted to “seeing that counting Office today. the public funds are faithfully ap- plied to the purposes for which Division’s Members in Demand appropriated.” by Other Government Agencies It was also necessary to test the cor- porations’ compliance with all laws, The members of the Corporation either expressed or implied, to which Audits Division staff, with their pro- they were subject. To the auditor with- fessional bearing, made quite an im- out previous Government experience, pression on the other agencies of the this was a matter of some concern be- Government. As a result, their services cause there was no official compilation, were in great demand. The Division no body of knowledge, and no uniform- counts among its alumni many men ity of opinion as to the applicable laws. now in high positions in the financial An attempt was made through the man- management organizations of other ual to narrow this gap. Subsequent acts agencies. Among these are John P. Ab- of Congress went far toward clarifying badessa, Controller, Atomic Energy the situation and, in fact, removed the Commission; Donald W . Bacon, As- freedom of corporations to such an sistant Commissioner, Internal Revenue extent that few corporations have been Service; and Arthur L. Litke, Chief Ac- created in the past 25 years. countant, Federal Power Commission. The law also required the Comptrol- ler General to keep the Congress Audit Guidelines informed of the operations of the cor- porations and to make such recom- One of the initial tasks confronting mendations regarding the operations as Mr. Andrews and Mr. Bordner in or- he deemed advisable. The manual set ganizing the Division was that of devel- forth the Division’s policy in this re- oping guidelines for carrying out the spect by stating that recommendations audit work. Using his exceptional tech- would Le made for improvements in nical ability and broad experience, Mr. accounting or business procedures, Bordner quickly wrote a manual set- particularly those having to do with ting forth Division policies and proce- internal control over the accounting for dural guidelines. This manual was corporate transactions, and that the re- issued on October 31, 1945. Because views would be directed toward an the law required the audits to be made examination of accomplishments. in accordance with the principles and As will be developed later, this pro- procedures applicable to commercial vision of law and the policy adopted by corporate transactions and required the the Division clearly opened the door for reports to include, among other things, audits going far beyond the examina- a statement of assets and liabilities and tion of financial statements and set the 94 CORPORATION AUDITS DIVISION stage for management evaluations and Training examinations of the effectiveness with Initial training afforded the members which the corporations, and later other of the staff of the Corporation Audits Government agencies, were carrying Division was in the form of weekly lec- out the purposes for which they were tures based on the contents of the Staff established-objectives receiving much Manual. Attendance at these lectures, attention today. The following quote given after working hours by Messrs. from the manual is apropos: Bordner, Herz, Simpson, and Bruma- It is necessary in all corporations to meas- gim, was compulsory for most staff ure the costs of the activities in relation to the accomplishments, from the standpoint members not in a travel status. The lec- of justifying the activities, as well as for the tures served to acquaint the staff with purpose of showing the effectiveness with the duties, responsibilities, and audit which the activity’s responsibilities have been philosophy of the Division and the discharged. laws applicable to Government corpora- The manual served its purpose well. tions. They also served as refresher The perception of the needs of the courses in the conduct of audits in ac- Congress, as disclosed by the stated cordance with the principles and pro- audit objectives, is extremely note- cedures applicable to commercial cor- worthy, particularly in view of the porate transactions. short time available for preparing the Not all of the staff had the benefit of manual. But with the enactment of new attending these lectures or of a prelimi- laws, the establishment of the Account- nary study of the manual. Frederic H . ing Systems Division in the General Smith, for example, was sent out a few Accounting Office in 1948, and the days after reporting for duty to assume adoption of the Joint Financial Man- direction of the audit of the Defense agement Improvement Program, the Supplies Corporation. A . T . Samuelson manual was supplemented in 1950 by had not unpacked his bags before he the issuance to all supervisors of a was sent to Knoxville, Tenn., to take group of documents on these subjects. over a major segment of the Tennessee Shortly thereafter a need for a complete Valley Authority audit. That these men revision and expansion of the manual could handle such complex audits with- was felt. out any type of indoctrination was a The development of the Comprehen- high tribute to their broad experience sive Audit Manual, released on Septem- and ability. ber 1, 1952, was started in 1950 by The lectures were discontinued after members of the staff of the Corporation about 6 months and on-the-job train- Audits Division. Although other people, ing took over. On-the-job training was both within and outside the Division particularly effective because of the cal- participated, Ellsworth H . Morse, Jr., iber of the supervisors and the large was primarily responsible for its prep- size of the staffs assigned to some of the aration. Likewise, he was primarily re- audits. These factors made for close sponsible for subsequent revisions of supervision and effective communica- the manual and adoption of the format tion. Many men received their initial in use today. training on the first audit of the Recon- 95 CORPORATION AUDITS DlVISlON struction Finance Corporation which come, William Jafe, Hyrnan L. Krieger, required a very large staff. That assign- Leonard Selkowitz, Willard L. Russ, ment not only was a training ground, Mathew Gradet, L. Carrel Daugherty, it was a testing ground as well. Edward R. Weber, and Charles S. Col- Ted Hert, who was an exceptional lins. Other successful candidates, now judge of talent, and the other assistant elsewhere in Government, were Elmer directors found that many men were W . Muhonen, Francis I . Geibel, Theo- unsuited to the Division’s exacting re- dore A . Hoffmann, Harry W . Rice, quirements. Not everyone was ready to Arvid C. Anteroinen, Arthur L. Litke, accept the principles and objectives of Donald W . Bacon, Lawrence M . Eich- auditing embodied in the 1945 act. horn, W . Fletcher Lutz, and Ivan W. Thus, a weeding out process set in. A Jennings. later assignment that also was some- In 1948 the Division’s staff consisted what of a training ground, particularly of 167 men, 54 of whom were certified. for the many new grade GS-5’s who At June 30,1950, there were 210 on the were then coming in, was the audit of staff, 88 of whom were certified. Al- the Maritime Commission conducted in though many of these men received 1949-50. their certificates before joining the Di- Classroom training for GS-5’s was vision. many others received them after rather limited prior to 1952, although preparing for the examination in the it was expanded and made a permanent Division’s training course. part of the career development program in 1952 by CharEes E. Murphy, the last College Recruiting staff manager of the Corporation Audits Division. However, the CPA training Most of the men employed by the course was started in the early days of Corporation Audits Division in its the Division. The curriculum and ma- early years had had public accounting terial for the course was developed un- or equivalent experience. But recruiting der Assistant Director Brumagim’s su- at the college level began immediately pervision by Theodore G. Freedlund, upon formation of the Division. In re- then a GS-12, who directed the course porting to the House Committee on Ex- for 4 years, starting in 1948. Mr. Freed- penditures in the Executive Depart- lund was succeeded by John P . Abba- ments on the Division’s progress during dessa in 1952. Mr. Abbadessa had as- the first year of its existence, T. Cole- sisted Mr. Freedlund when he was a student in the course and attributed his man Andrews attributed much of the passing the CPA examination on his success in recruiting recent graduates to first attempt to the training he received the placement officers in the schools of both as a student and as an assistant. accounting and business administration Among those still with the GAO who at the Universities of Illinois, Indiana, passed the examination between 1948 Michigan, Minnesota, Notre Dame, and and 1951 are James H. Hammond, Leo Wisconsin, Columbia University, Har- Schimel, Hart7ey C . Fright, Francis W . vard, and the University of Pennsyl- Lyle, R. Scott Tyree, William D. Linci- vania’s Wharton School of Commerce. 96 CORPORATION AUDITS DIVISION Visits to colleges and universities for Authority, the Home Owners’ Loan Cor- recruiting purposes were made prin- poration, the Federal Deposit Insurance cipally by the staff manager. The num- Corporation, and the Export-Import ber of graduates hired in the early years Bank of Washington. was comparatively small because the Because of the backlog, the Division staff as a whole was small. College re- was authorized to employ independent cruiting was stepped up in the Divi- public accountants to make some of the sion’s later years, however, as indicated audits. Six national firms of certified by the appointment of 68 GS-5’s in the public accountants participated in this year ended June 30,1951. u-ork by making the audits of the Fed- eral Deposit Insurance Corporation and Progress Made the Inland Waterways Corporation and its subsidiary, the Warrior River Ter- The Division was able to start on its minal Company, for fiscal year 1945, audit backlog about October 1, 1945. and audits of the 51 corporations super- Progress was slow, however, because of vised by the Farm Credit Administra- the difficulty in obtaining a sufficient tion, the 12 Federal home loan banks, number of qualified persons and be- the Federal Public Housing Authority, cause of the poor records and unsatis- and the Home Owners’ Loan Corpora- factory condition of the accounts of tion for 1945 and 19’26. The Director some of the corporations. A report on paid high tribute to these firms- the accounting deficiencies in the Re- George Rossetter & Co.; Peat, Marwick, construction Finance Corporation and Mitchell & Co. ; Arthur Andersen & Co.; its subsidiaries was submitted to the Hurdman and Cranstoun; Price, Wa- Congress on June 19, 1946. Also, a terhouse & Co.; and Allen R. Smart & report on the Federal Public Housing Co.-because of their willingness to un- Authority stated that the accounting dertake these assignments at a time was so inadequate that no satisfactory when there was an unprecedented de- audit could be made for fiscal year mand for their services from their reg- 1945. ular clients. The Comptroller General reported Public accounting firms were not that these unsatisfactory conditions called upon to make any of the audits arose because the accounting require- for fiscal year 1947 because the Divi- ments either were not fully compre- sion had reached a point where it felt hended by the corporation managers or that assistance was no longer required. were ignored, neglected, or regarded as By June 30, 1950, the backlog of au- having a relatively unimportant claim dits had been eliminated, and the Divi- to attention. On the other hand, the sion was ready to start on the audits Comptroller General reported that the for the fiscal year that ended on that accounting systems of some corpora- date. tions were well conceived and operated The General Accounting Office had and compared favorably with the best submitted only one audit report to the to be found in private enterprise. Ex- Congress during fiscal year 1945. Dur- amples were the Tennessee Valley ing fiscal year 1951, 30 audit reports 97 CORPORATION AUDITS DIVISION were submitted to the Congress; 26 of the Comptroller General's judg- these were prepared by the Corpora- ment, should be made. tion Audits Division. -Information with respect to every program, expenditure, or other fi- nancial transaction or undertaking Nature of the Corporation which, in the opinion of the Comp- Audits troller General, had been carried Because the law required the reports on or made withoui authority of of audits under the Government Cor- law. poration Control Act, and the George --Such other recommendations as Act, to include statements of assets and the Comptroller General deemed liabilities and statements of income and advisable to make to the Congress. expense, and because the audits were All of these matters were dealt with to be made in accordance with the prin- in the Division's reports. ciples and procedures applicable to One of the first reports was sub- commercial corporate transactions- mitted to the board of directors of the which meant that the statements were Reconstruction Finance Corporation to be verified and opinions were to on June 17, 1946. Deficiencies in ac- be expressed thereon-a goodly portion counting of such magnitude were found of the auditors' time was spent in ana- that the Division could not make a sat- lyzing accounts and verifying account isfactory audit for fiscal year 1945 and balances. This, of course, required a re- doubted that it would be able to do so view of the plan of organization and for fiscal year 191.6. It was reported, system of internal control and, even if among other things, that the Corpo- the law had required no more than a ration did not control its $7 billion financial audit for the purpose of ex- investment in properties or its $800 mil- pressing an opinion on the financial lion investment in inventories. Because statements, many worthwhile recom- of the seriousness of the situation, a mendations would have resulted and copy of the report was sent immediately did result from that part of the to the Congress. examination. The report was particularly signifi- The law, however, required much cant for two reasons. First, it gave rise more. It specifically provided that the to the first hearings by a congressional reports contain : committee on a report of the Corpora- --Such comments and information tion Audits Division and, more import- as might be deemed necessary to antly, established confidence on the part keep Congress informed of the op- of the Congress in the ability and objec- erations and financial condition of tivity of the Division's auditors. Fur- the corporations. ther, it demonstrated the wisdom of the -A report of any impairment of Congress in bringing the corporations capital. under annual scrutiny and control. The -Recommendations for the return report of the House Committee on Ex- of such Government capital or the penditures in the Executive Depart- payment of such dividends as, in ments (H. Rept. 2713, 79th Cong.) 98 CORPORATION AUDITS DIVISION upheld the GAO completely and sug- Frederic H . Smith. Ted B. WestfaU, gested that RFC adopt the auditors’ Ellsworth Morse, and 0. D. lClcDowell recommendations and accept their as- were assigned to this audit upon join- sistance in putting them into effect. ing the Division in 1946 and partici- The backing of the committee was of pated a t the next level of responsibility. tremendous importance, serving to en- The initial report on the audit of the hance the standing of the Division with Federal Crop Insurance Corporation, other corporations then being subjected prepared under Clark Simpson’s super- for the first time t o a critical, and not vision, also demonstrates the fact that always welcome, review. the Corporation Audits Division con- Another significant feature of the sistently considered the effectiveness report was the disclosure that important with which Government programs were aspects of the activities of RFC and its being carried out; i.e,, whether the pro- subsidiaries were not being carried out grams were achieving the results in- effectively. Ways and means were tended by the Congress. At the same pointed out whereby it would be pos- time, due regard was given to whether sible for the Corporation to accomplish the programs were being carried out immense savings and to make immeas- economically and efficiently. Because of urable improvements in the effective- heavy losses being incurred, the report ness of its management. suggested that the Congress consider the The report stated that RFC had not feasibility of continuing the crop in- developed an adequate general concept surance program and that every pos- of either the requirements or the useful- sible step be taken to make the program ness of a system of accounting control financially successful if it were to be and of well-devised financial reporting. continued. The Division recommended No one top official of the Corporation that: was responsible for directing the ac- -The board of directors be enlarged, counting activities. Creation of the that it include men of experience in position of controller was deemed by insurance matters, and that it not the auditors to be an absolute necessity be dominated by the Secretary of and, as a result of the Division’s recom- Agriculture. mendation, the position was established. -Active management be placed in Impetus was thereby given to the estab- executive officers selected by the lishment of similar positions in other board, including an individual Government corporations and agencies with a broad insurance back- and to a recognition of the contribu- ground, an expert in insurance- tion the accountant could make in the sales promotion, and a controller field of financial management. serving as chief accounting officer. Top supervisors assisting Ted Her: -Every effort be devoted toward the in producing this report and in com- development of sound underwrit- pleting the audit of the RFC and its 10 ing policies and practices, insur- subsidiaries for fiscal year 1945 were ance-sales promotion, and im- Lucian Moret, Glenn Smith, Archie B. proved financial and accounting Jones, Me1 Zucker, Harry Trainor, and practices. 99 CORPORATION AUDITS DIVISION The Senate Committee on Expendi- programs. Added to this were major tures in the Executive Departments, weaknesses in management and in ac- after examining the Division’s 1945 counting procedures and controls. Be- report, was instrumental in drafting cause of the problems encountered, the remedial legislation. The committee report for fiscal year 1945 was not sub- stated that the legislation not only led mitted to the Congress until March to operation on a much more nearly 1949. The report pointed out that devia- self-sustaining basis but succeeded in tions from sound accounting practices saving the entire concept of Federal were so pronounced, errors and arrear- crop insurance. ages in recordkeeping so substantial, In reports on audits of the Inland and internal auditing activities and Waterways Corporation, the Division internal controls so deficient that ex- gave particular emphasis to the pre- pansion of auditing procedures to per- carious financial position of the Corpo- mit a satisfactory audit was neither ration and the critical necessity for the practical nor economically justifiable. Congress to reexamine its status and to The 1945 audit was made under the provide financing sufficient for it to direction of Assistant Directors Simp- carry out its approved programs. son and Blakemore. Robert L. Long, Many other examples of the Di- later to become the second Director of vision’s consideration of the effective- Audits, was the top supervisor on this ness with which the corporations were assignment. The second report, covering carrying out the purposes for which fiscal years 1946 and 1947, was pre- they were established are given in Sen- pared under the supervision of Ells- ate Report No. 861, 83d Congress, worth Morse who had succeeded Jim “Audit Reports of Government Corpo- Blakemore as the assistant director in rations and Agencies.” charge. Although this report, which was issued shortly after the first report, also Some Extremely Difficult commented on the serious deficiencies Assignments in accounting and control, it noted that increased recognition had been given Some of the initial audits were taken to the importance of the accounting in stride; the Federal Crop Insurance function, that a controller had been ap- Corporation audit for fiscal year 1945, pointed in 1947, and that substantial for example, being in this category. progress, a trend that continued in suc- For various reasons, however, others ceeding years, had been made. were extremely difficult. Like the RFC The audit of the Federal Public audit, the audit of the Commodity Housing Authority, which became the Credit Corporation for fiscal year 1945 Public Housing Administration in fell in the latter category. Contributing 1947, also proved to be a stubborn one to the problems of the auditors was the because of previously mentioned ac- complexity of the activities in which counting deficiencies. Stephen 3. Ives CCC was engaged, including World took over this assignment after joining War I1 food supply operations and mas- the Division in December 1946. JVilZiam sive farm commodity price-support A . Newman, Jr., succeeded Mr. Ives as 100 CORPORATION AUDlTS DlVlSION assistant director in charge when Mr. amounts of capital funds and recom- Ives became Director of the Division on mended that interest be paid on the October 1, 1947. Under relentless prod- full amount. Although this recom- ding the agency gradually improved its mendation was not specifically adopted, accounting to the point where the Divi- the RFC Act was amended to reduce sion was able to express a favorable RFC’s capital stock from $325 million opinion on the financial statements per- to $100 million and to require the pay- taining to the agency’s major ment of an annual dividend, the first operations. of which amounted to $307 million. Other recommendations for the re- turn of capital or the payment of divi- Return of Government Capital dends or interest were made and and Payment of Dividends adopted with respect to the Federal The requirement in section 203 of home loan banks, the Federal Savings the Government Corporation Control and Loan Insurance Corporation, and Act that the Comptroller General make the Federal Housing Administration. recommendations for the return of such The payment of dividends or interest in Government capital or the payment to these cases was of particular impor- the U.S. Treasury of such dividends as, tance because the amounts, in effect, in his judgment, should be accom- represented savings to the Federal plished was inserted because of the ab- Government. sence of provisions in the corporations’ charters on these matters. Such recom- Dissolution of Corporations mendations were contained in a number of reports, and the amounts involved An early report recommended that were sizeable. dissolution of the U.S. Spruce Produc- After a recommendation in GAO’s tion Corporation be expedited by trans- 1945 report on the Federal Deposit In- ferring to another agency its sole surance corporation, the act of Au- remaining function, that of collecting gust 5, 1947, directed the Corporation annual payments on a mortgage. This to retire the Government’s investment in corporation, which had been in liquida- its capital stock, amounting to $289 mil- tion since 1922, was providing a plush lion. In a later report GAO pointed out office for its president, a secretary, and that FDIC had not been required to pay a clerk. In addition, it provided a lim- any interest or dividends on the Gov- ousine, with chauffeur, ostensibly for ernment’s investment in its capital use in inspecting the collateral. but used stock. By an act of September 21,1950, to a large extent for transporting the the Corporation was required to pay president, a retired Army colonel, be- $80 million, an amount equal to 2 per- tween his home and the office. In Sen- cent simple interest a year on the ate Report No. 588, 80th Congress, amounts invested in capital stock from Senator Aiken said, “After repeated the date advanced to the date repaid. proddings by the Comptroller General, In its 1945 report, GAO noted that the Corporation, which was dead but RFC had interest-free use of large not buried, reluctantly agreed to burial. 101 CORPORATION AUDITS DIVlSlON It was formally liquidated on Decem- of Government corporations. As a re- ber 12, 1946, and all assets turned over sult, there emerged a body of prin- to the War Department.” ciples which the Division believed Dissolution of the Institute of Inter- should be applied to the “model” American Affairs as a Governmeht cor- corporation. poration was recommended after the These principles were applied, in Institute and all of its functions were varying degrees, to the new charters transferred to the Foreign Operations granted the Panama Railroad Com- Administration and its continuance as pany, the Commodity Credit Corpora- a corporation became clearly inconsist- tion, the Institute of Inter-American ent with the objectives for which the Affairs, the Virgin Islands Company, latter agency was created. and the Export-Import Bank of Wash- Knowledge acquired by the Division ington. A preponderance of the Divi- regarding the affairs of Government sion’s proposals were incorporated in corporations enabled it to assist the the new charter for the Panama Rail- Congress in connection with proposed road Company, and a proposed reorganizations involving Government charter for the Virgin Islands Com- corporations. Meriting particular men- pany, prepared by the Division, was tion was the 1950 report on the audit of adopted almost verbatim by the House, the Panama Railroad Company which although some changes were made be- contained numerous recommendations fore the bill was enacted. in anticipation of the transfer of the A particularly important GAO canal and related business-type activi- proposal in connection with the Virgin ties from the Panama Canal agency (re- Islands charter was that permanent named Canal Zone Government) to the financing be provided for the Com- railroad company (renamed Panama pany’s revenue-producing activities Canal Company). (then mostly sugar and rum) and that annual appropriations be authorized for its non-revenue-producing activities Reincorporation Under such as the promotion of tourism. Such Federal Law appropriations aided materially in en- Section 304(b) of the Government abling the corporation to fulfill the pur- Corporation Control Act provided that poses for which it was created-to no wholly owned Government corpora- promote the economic development of tion not chartered by the Federal Gov- the islands. Tourism is now the back- ernment could continue after June 30, bone of the islands’ economy. 1948, as an agency of the United States. Consequently, a number of corpora- Audit of the tions which had been created under U.S. Maritime Commission State or other law had to seek Federal charters. The Corporation Audits Divi- The Comptroller General’s order es- sion had made numerous recommenda- tablishing the Corporation Audits Divi- tions in its audit reports concerning the sion provided that, in addition to management, financing, and activities conducting the required audits of Gov- 102 CORPORATION AUDlTS DIVISION ernment corporations, the Division was 1950. In this report the General Ac- to be responsible for the audits of other counting Office was sharply critical of Government agencies whose accounts the determinations reached by the were to be audited by the General Ac- Maritime Commission in connection counting Office in accordance with the with construction-differential subsidies principles applicab!e to commercial cor- for reconstruction, operating-differen- porate transactions. One such audit was tial subsidies, sales and exchange of the audit of the U S . Maritime vessels, adjustments under the ship sales Commission. act, trade-in allowances, repair and The Division’s audit for fiscal years reconversion allowances, charter-hire 194849 was a landmark in that it con- determinations, and related matters. vinced the Comptroller General of the Led by Congressman Porter Hardy, feasibility of auditing other regular de- Jr., the Government Operations Sub- partments and agencies at the site. The committee of the House committee on demonstrated ability of the staff of the Expenditures in the Executive Depart- Corporation Audits Division in making ments conducted extensive hearings on this audit, along with the ability they the Comptroller General’s special re- displayed in auditing Government cor- port of July 11, 1949. The committee porations, was the prime factor in con- stated in its report IH. Rept. 1423,81st vincing the Comptroller General that Cong. that the Comptroller General the General Accounting Office had performed a valuable service to the acquired the necessary capability. Congress by submitting the special re- Another feature of the audit was that port which opened unexplored areas of it further enhanced the reputation of statutory deficiencies and abuses of ad- the Office with the Congress. Because of ministrative discretion. The committee the significance of the matters disclosed recommended to the Commission, in the review of construction-differen- among other things, that the awards of tial subsidies and related allowances construction-differential subsidies and for national defense features, a special national defense allowances be re- report was submitted to the Congress on viewed and all possible action be taken July 11, 1949, prior to completion of to prevent excessive expenditures of other phases of the audit then in process Government funds. for fiscal years 1948 and 1949. The The Government Operations Sub- Comptroller General, in transmitting committee held further hearings on the that report, stated that not less than $23 additional matters brought out in the million of the amount contributed by full report of the General Accounting the Government toward the cost of new Office for fiscal years 1948-49. On vessels under construction must be con- May 18, 1950, the committee filed a re- sidered as excessive due to various port (H. Rept. 2104, 81st Cong.) in irregular procedures, inaccurate cal- which it confirmed its previous findings culations, and unjustifiably liberal in- and recommended additional action to terpretations of statutory language. prevent or recoup excessive expendi- The complete report on the 1948-49 tures in connection with betterment audit was submitted on February 6, subsidies, operating-diff erential sub- 103 CORPORATION AUDITS DIVISION sidies, desirable features added to ves- counting systems development work sels, charter hire, and trade-in with GAO’s Accounting Systems Divi- allowances. sion personnel at h e site. That the A report of the Senate Committee on agency needed a great deal of assistance Government Operations stated that the in this field is evidenced by the fact that GAO audit report for fiscal years 1948 Mr. Neuwirth conducted a training and 1949 and the findings of the con- course in accounts receivable and ac- gressional committees in connection counts payable bookkeeping for agency therewith were in no small measure con- personnel. tributory to the abolishment of the Like the RFC audit, the Maritime Maritime Commission under Reorgani- audit, with a staff that at times con- zation Plan No. 21 of 1950. sisted of as many as 65 men, provided The extent of the audit coverage, as an opportunity for training many indicated by the foregoing statement younger members of the staff. Arthur of activities criticized by GAO, bears Schoenhaut, recently appointed Execu- special comment. Like the audits of Gov- tive Secretary of the Cost Accounting ernment corporations, this audit, and Standards Board, was one of those who subsequent audits of nonincorporated started their careers with the General Government departments and agencies, Accounting Office as GS-5 accountants covered all the activities in which the on the Maritime audit. agency engaged, thus providing a com- prehensive view of the agency’s steward- ship. Role of the Corporation A strong staff is a prerequisite for Audits Division in the Comprehensive Audit Program any assignment of the magnitude of the Maritime audit, and a strong staff was On October 19, 1949, Comptroller provided. Ted B . WestfaEZ, who became General Warren announced the institu- an assistant director during the audit, tion of a new audit program in the was in charge of the assignment and GAO-the comprehensive audit pro- A . T . Samuelson was second in com- gram. It was announced as the policy s. mand. L. K . Gerhardt and Frank Tur- of the GAO to utilize audit processes bett, Jr., now a District Director of In- based upon an evaluation of accounting ternal Revenue, were top supervisors. John C. Fenton, who had not par- systems and the effectiveness of related ticipated in the audit work, was mainly checks and controls in the agencies at responsible for writing the 1948-49 au- the site of operations, to the maximum dit report. This freed Mr. Westfall for extent possible, as a basis for the fuller other important work, as he was then and more effective discharge of its re- taking a leading role in preparing the sponsibilities to the Congress. Thus the proposals that led to the comprehen- comprehensive audit program was, in sive audit program and related changes effect, an extension of the principles in the Office. M a x A . Neuwirth, who had followed in the audits of Government recently been promoted to a GS-11 corporations and in certain other audits grade, coordinated the cooperative ac- required by law to be made at the site, 104 CORPORATION AUDITS DlVISlON such as the audit of the Maritime Com- Assignments of agencies for compre- mission. hensive audit were originally made to There were some differences. First, two groups: the Corporation Audits unlike the corporation audits, there was Division and a newly created subdivi- no requirement that the audits be made sion in the still-existing Audit Division. on an annual basis. Second, there was Those agencies having predominantly no requirement for the submission of business-type activities were to be statements of assets and liabilities and assigned to the Corporation Audits income and expense, with an implied Division and those in which business- requirement for an expression of opin- type activities were not predominant ion regarding the financial statements, were to be assigned to the Audit although it became the policy to present Division. This arrangement was soon financial statements and to express opin- abandoned and on July 3,1950, respon- ions on them where appropriate. Third, sibility for all comprehensive audit the comprehensive audit ( a convenient assignments was placed in the Corpor- term which has outlived its usefulness) ation Audits Division. The first agency did not necessarily require a review of to be placed under comprehensive all the activities of an agency, although audit was the U.S. Coast Guard. Other initially it was the policy to do so. early assignments were the Bureau of Fourth, the agency presumably had to Engraving and Printing, the Bureau of consent to the retention of documents Reclamation, the Farmers Home Ad- for audit at the site instead of sending ministration, the Housing and Home them to the GAO for audit. Although Finance Agency, the Rural Electrifica- most agencies objected, at first, to re- tion Administration, the Veterans Ad- taining the documents-and some mis- ministration insurance operations, and sionary work had to be done-the bene- the Government of the Virgin Islands. fits of retaining the documents became Accomplishments under the compre- apparent and agencies’ requests that hensive audit program will not, for the comprehensive audits be made soon out- most part, be discussed in this article stripped the readiness of the GAO to because the Corporation Audits Divi- undertake them. Any doubt as to the au- sion became a part of the new Division thority of the agencies to retain the of Audits while most of the initial audits documents was soon cleared up in the were still under way. However, the Budget and Accounting Procedures Act initial audits were started and subse- of 1950 which authorized the Comp- quent audits over the next several years troller General to determine when an were carried out by or under the super- audit of an executive agency was to be vision of men who had been associated made at the site and to require the re- with the Corporation Audits Division. tention of documents for audit. Al- That a gradual approach to the devel- though the growth of the program was opment of the comprehensive audit gradual, no agency now transmits any program had to be taken is evident from documents (other than those relating the fact that when the program was first to payments for transportation) to the announced the Corporation Audits GAO for audit. Division had 161 men on its staff. As to 901 .- . NOISIAIa SIIUOV N O f L V ~ O d b l O 3 CORPORATlON AUDlTS DlVlSlON can present the largest and finest con- including those in procurement and centration of accounting talent to be contracting. As a first step the Corpo- found anywhere in the Government.” ration Audits Division began surveys in The start of the comprehensive audit the audit agencies of the three military program in the Department of Defense departments. It was felt that every audit deserves special mention. The O5ce engagement undertaken in the military Order assigning responsibility for this departments would be of concern to phase of the program stated that the these agencies and, conversely, that audit work should be closely coordi- their work would be of concern to the nated with the work of the Accounting GAO. Systems Division and should be planned Next, a study of the Navy’s procure- to implement as rapidly as possible the ment policies and practices was begun joint accounting program. and work was started in the Army Ord- The Accounting Systems Division nance Corps. Out of the contacts with had done considerable work in cooper- the latter organization grew a GAO ation with the Department of Defense review of procurement practices which in planning the accounting systems to the Deputy Secretary of Defense, Reu- be used in industrial fund activities ben B. Robertson, Jr., characterized as authorized by title IV of the National one of the most comprehensive pro- Security Act Amendments of 1949. curement studies ever seen by that When the Corporation Audits Division office. The staffs of both the Corporation began its work in the Department of Audits Division and the Field Audit Defense, the pattern had been set in the Section of the Audit Division partici- minds of all those concerned that pated in this review. emphasis would be placed on the com- prehensive audit of industrial fund op- Assistance From Field erations. Commitments had been made Organizations that had to be honored; consequently, the first comprehensive audit work un- Practically all of the work under the dertaken in the Department was the Government Corporation Control Act audit of a number of installations was performed without any assistance operating under industrial funds, such from the Audit Division’s Field Audit as the Picatinny Arsenal, Dover, N.J., Section or the field offices of the Office and the Naval Ordnance Plant, York, of Investigations even though many of Pa. the audits required work in the field. On January 12, 1951, however, Mr. The Field Audit Section’s zone and Warren issued a memorandum calling area offices were called upon, to a lim- attention to the increased expenditures ited extent, however, to participate in for national defense and stated that the some of the first audits made under the GAO must give priority to those opera- comprehensive audit program. And tions of most importance in the defense when the Audit Division became part effort and that concentration should be of the new Division of Audits on Janu- placed on seeking out excesses, waste, ary 18, 1952, the new regional offices and extravagances in defense spending, established shortly thereafter were in- 107 423-774 0 - 7 1 -8 CORPORATION AUDITS DIVISION tegrated into the comprehensive audit Audits, Postal Audit, and Reconcilia- program as rapidly as possible. tion and Clearance Divisions. On Janu- The Corporation Audits Division ary 18, 1952, these divisions were abol- had planned to establish field offices to ished and their duties and functions reduce travel time and cost and to aid were transferred to a newly established in recruiting professional auditors in Division of Audits headed by the Di- the field. Four such offices were estab- rector of Audits. lished in 1951 in San Francisco, Dallas, The Reconciliation and Clearance New York, and Chicago under A . T . Division was concerned with the exam- Samuelson, Harold P . Batchelder, ination of disbursing officers’ accounts Harold Morse, and Carl L. Burndahl, re- and the issuance of certificates of set- spectively. Mr. Samuelson pioneered in tlement. The principal function of the this work, opening the Division’s first Audit Division was to make a central- field office in San Francisco, contacting ized audit of the vouchers and other the professional societies for assistance documents submitted in support of the in obtaining qualified personnel, and disbursing officers’ accounts. These directing the first audit of the Bureau functions were gradually absorbed in of Reclamation, among other audit the comprehensive audit program and work performed in the field. Like the performed at the site as agencies were zone and area offices, these field instal- assigned for comprehensive audit. Top lations were replaced by the newly cre- officials and members of the staff of the ated regional offices. Mr. Samuelson former Corporation Audits Division returned to Washington where he con- predominated in carrying out the com- tinued to direct the audits of the Bu- prehensive audit program until the reau of Reclamation and other activities Division of Audits was split up in an- of the Department of the Interior. Mr. other organizational realignment in Batchelder stayed on as the first re- 1956. gional manager of the Dallas office, Mr. Stephen B. Zwes, Director, and Irwin Morse finally wound up his career with S. Decker, Deputy Director of the Cor- the General Accounting Office, and Mr. poration Audits Division, were named Burndahl continued on in the Chicago Associate Directors of the Division of regional office. Audits, the first time the title of asso- ciate director was used. Ellsworth The Merger Morse and Harry J. Trainor became As- sistants to the Director, and John. C. On May 14, 1951, Ted R . Westfall, Fenton, Curties A . Hurley, Roy S. Lind- then an assistant director in the Corpo- gren, Robert L. Long, Harold S. Morse, ration Audits Division and now an exec- utive vice president of the International William A . Newman, Jr., Ben H . PUC- Telephone and Telegraph Corporation, kett, A . T . Samuelson, and Frederic H . was named Director of Audits, a staff Smith became Assistant Directors of position established in the Office of the Audits. All of the latter group had been Comptroller General to coordinate the assistant directors in the Corporation activities of the Audit, Corporation Audits Division. 108 CORPORATION AUDITS DIVISION Robert L. Long succeeded Ted West- Morse, Jr., Director, and Frederic H. falZ as Director of Audits after the lat- Smith, Deputy Director, Office of Policy ter resigned on April 26, 1952, to en- and Special Studies; William A . New- ter private industry. Ellsworth Morse man, Jr., Special Assistant to the Comp- succeeded Mr. Long after Mr. Long re- troller General; A. T. Samuelson, Di- signed on December 30, 1955. rector, L. K. Gerhardt, Max A. Neu- uirth, and George H . Staples, Associate The Division’s Legacy Directors. and John C. Fenton, Roy S. Lindgren, and 0. D. McDowell, Assist- The Corporation Audits Division did ant Directors, Civil Division; Hassell its job well. It overcame the backlog B. Bell and James H . Hammond, Asso- confronting it when it was created and ciate Directors, Defense Division; Oye brought the audits of Government V . Stovall, Director, and Louis W. Hun- corporations to a current basis. And i t ter, Manager. New Delhi Office, Inter- fulfilled the prime purpose of the Gov- national Division; James H. Rogers, ernment Corporation Control Act-to Jr., Regional Manager, Philadelphia; bring the corporations under congres- Thomas E. Sullivan, Director, Trans- sional control. I n addition, it left for portation Division; and Robert H . others to benefit from: Drakert, Member, NATO Board of Auditors. 1. The establishment of professional Among the other former members- auditing on a broad scale in the many of whom joined the Division as General Accounting Office. GS-5 trainees-are: irvine M . Craw- 2. A staff of experienced accountants, ford and Victor L. Lowe, Associate Di- many of whom are in leadership rectors, and Arland N . Berry, Morton positions in the GAO today. E . Henig, Vernon L. Hill, Walter B. A reputation with the Congress, Hunter, Charles P . McAuley, Eugene L. its committees, and Members for Pahl, Raymond J. Poskaitis, Willard L. capability, objectivity, and reli- Russ, Bernard Sacks,Stanley S. Sargol, ability. and Richard J . Woods, Assistant Di- Harmonious relations with the ex- rectors, Civil Division; James L. Di- ecutive departments and agencies. Guiseppi, Associate Director, and A body of knowledge acquired at Charles S. Collins, Chester S. Daniels, the cost of much mental pain and Howard L. Dehnbostel, Mathew Gradet, William D. Lincicome, and Max Stett- anguish, but made available free ner, Assistant Directors, Defense Divi- to those who later joined the sion; Charles D. Hylander, Deputy Di- Office. rector, James A . Duff, Associate Direc- More than 90 members of the Cor- tor, and Joseph DiGiorgio, Assistant poration Audits Division are with the Director, International Division; General Accounting Office today. These Charles H. Roman, Director, Far East include the following men who were Branch; Alfred M . Cluvelli, William N . members of the directorate or top su- Conrardy, and Hyman L. Krieger, Re- pervisors in the Division: Ellsworth H . gional Managers; Kyle E. Hamm and 109 CORPORATION AUDITS DlVlSlON Charles L. Perry, Assistant Regional A true professional must subject him- Managers; Francis W . Lyle, Assistant self to a continuing process of education Director, Office of Policy and Special and development. These men were of Studies; and Harry C. Kensky, Direc- professional stature in the days of the tor, Program Planning Staff, Office of Corporation Audits Division. They re- the Comptroller General. main so today. Economy and Efficiency * * * the requirement for reports on any matter affecting economy and efficiency relating to public expenditures, are matters among many of importance that require initiative of a high order and persistent and arduous labor if these duties are to be performed with credit to the office. Walter W . Warwick, Comptroller of the Treasury. In an internal planning memorandum dated June 1, 1920, related to the version of the Budget and Accounting Act vetoed by President Wilson. 110 The Accounting Systems Division The Accounting Systems Division of 1. Current accounting and financial report- ing are proper functions of the executive GAO was formed in January 1948 to branch. Accounting systems prescribed by the apply revised concepts of leadership Comptroller General should be in recogni- and responsibility for bringing about tion of this as a fundamental principle. improvements in the accounting opera- 2. Audit, independent of the executive tions of the Federal Government. Up branch, is an essential and proper function of the General Accounting Office. Properly to this time, the responsibility for GAO designed accounting systems are a vital factor accounting systems work had been to the effectiveness of such independent vested in the C%ce of Investigations. audit. Comptroller General Warren de- 3. Accounting systems should be developed scribed the beginnings of the changed as a cooperative undertaking as an essential approach in testimony before a Senate to meeting the needs and responsibilities of committee in 1950: both the executive and legislative branches of the Government. * * * On the day after the surrender of We submitted our program to every agency Japan, I called a meeting of my staff and of the Government. As I recall, without ex- told them the No. 1 problem in the General ception they enthusiastically endorsed it. Accounting Office from that date was im- They have all appointed representatives to provement of accounting in the Government. Because of the legal responsibilities and in- work with the three top fiscal agencies to terests of the Treasury Department and the bring about needed accounting reforms. The Bureau of the Budget, from the standpoint program has been strongly endorsed by both of fiscal administration in the Government, the President and congressional committees, I felt it was imperative to have their full and we have kept the committees advised participation in any such program. Because of progress. I want to mention here especially the day-to-day maintenance of accounting that great credit is due to this very committee systems is the responsibility of the various for the suggestions given prior to setting administrative agencies their cooperation was up the program, for the support of the pro- just as important. Conversations were ini- gram, and for the participation in some of tiated by me with the Secretary of the Treas- our work by staff members of the committee. ury, John W. Snyder, and the Director of To spearhead the program, I set up in the the Bureau of the Budget, then James E. Webb; and, as a result, we inaugurated in General Accounting Office, in January 1948, December 1947 what is known as the Joint an Accounting Systems Division to provide Accounting Improvement Program. a small staff of leaders and technical advisers In so doing, we recognized and later for- who could guide the agencies in the develop- malized in documents signed by all of us ment of their accounting systems. To head up our complete agreement that: our work, we were fortunate in obtaining the services of Mr. Walter Frese, a certified pub- “To Improve Budgeting, Accounting. and Auditing lic accountant, with experience in both the Methods of the Federal Government,” Hearings before the Senate Committee on Expenditures in the Executive Budget and the Treasury as well a s outside Departments on S. 2054 (February-March 1950). the Government. 111 ACCOUNTING SYSTEMS DIVISION THE SIGNING OF THE CHARTER OF THE JOINT PROGRAM FOR IMPROVING ACCOUNTING I N THE FEDERAL GOVERNMENT Left to right are: Secretary of the Treasury, John W . Snyder; Comptroller General of the United States, Lindsay C. Warren; and Director, Bureau of the Budget, James E. Webb- January 6,1949. This appointment and the new pro- will be prosecuted for the first time with the gram were reported in The Watchdog full cooperation and active assistance of the Secretary of the Treasury and the Director for February 1948 as follows: of the Bureau of the Budget. Mr. Warren The appointment of Walter F. Frese as spoke highly of the assurance he has received head of the new division, has also been an- from Secretary of the Treasury Snyder and nounced. Mr. Frese, known favorably through- Director of the Budget Webb, and said that out the Government, is an accountant of he regards this cooperative undertaking as long experience both in the public account- an outstanding step toward achieving im- ing field and in Government. He is a grad- proved accounting and reporting in the Fed- uate of the University of Iowa and the eral Government. University of Illinois and taught accounting The basic philosophy of the revised a? the latter institution for several years. A Certified Public Accountant, Mr. Frese has approach to accounting i m p r o v e m e n t for some time headed the Fiscal Service work in the Government was expressed Operations and Methods Staff of the Treas- by Mr. Frese, in the following words: * ury Department. His new work will be di- rected in the field of better accounting and It was in this period of rapid change in reporting in the Government and will be in Government operations that accounting proc- collaboration with the departments and esses in the Federal Government failed to keep agencies. From address o n “Recent Pevelopments in Federal Comptroller General Warren stated that Government Accounting.” before the 48th annual meet- this work will be under the leadership of the inC oi the Ohio Society of Certified Public Accountants, General Accounting Office, as heretofore, but Columbus. Ohio, Sept. 26, 1952. 112 ACCOUNTING SYSTEMS DlVISlON in step. I refer to the entire gamut of ac- coordination of the widespread activity gen- counting to meet central fiscal agency re- erated under the program. Its s t d works quirements rather than being modified to meet directly with the agencies in lending assist- changing management needs. It remained ance in connection with the many specific primarily a vehicle to evidence fiscal ac- aspects of their internal accounting develop- countability, compliance with legal limita- ment programs. In turn, it maintains close tions and other similar objectives. Central day-to-day working liaison with the staffs of accounting continued to be geared to out- the Bureau of the Budget and Treasury De- moded warrant procedures which, again, were partment in connection with both the coopera- designed primarily to accomplish account- tive work in the agencies and the reshaping ability. The centralized post-audit of vouchers of Government-wide accounting, budgeting continued. . and financial reporting processes. This fully There were exceptions, of course, but the cooperative approach to the many specific more general situation was one of continuing problems involved has provided a greatly accounting practices and procedures that were broadened and improved basis for the Comp- not responsive to a changing world. * * * troller General to exercise his responsibility * * * We now come to the present pro- to the Congress in the prescribing of account- gram and the accomplishments under it. ing requirements. It has also provided an The current effort had its beginnings in effective means for eliminating duplication January 1948 following extended discussions and overlapping between the accounting a t between the Comptroller General of the the points of operation in the agencies and United States, the Secretary of the Treasury central accounting and control processes. and the Director of the Bureau of the Budget. Under this approach the Comptroller Gen- One of the significant conclusions reached eral’s responsibility in the prescribing of was acceptance of the concept that adequate accounting requirements is being exercised development of accounting in the Federal largely in terms of principles, standards and Government required recognition of the vari- related basic requirements. In this way a ous areas of responsibility in both the ex- framework has been established for develop- ecutive and legislative branches of the ment and approval of agency accounting Government which accounting must serve if it systems consistent with principles fitted to is to be the dynamically useful mechanism individual agency needs and integrated with it should be. the central accounting and reporting facil- Of even greater importance was the new ities of the Treasury Department. Emphasis concept of the role of the many individual has been placed on assumption of initiative agencies of the Government directly respon- by the agencies who are being encouraged sible for operations. Development of account- and urged to develop accounting in the light ing to meet the needs of management was an of their particular needs from the standpoint underlying objective of the entire program. of the great diversity of operating factors in- * * * Initiative on the part of each operat- volved so that their systems will be a respon- ing agency combined with proper organiza- sive and dynamic aid to management. * * * tion and staffing is required if the Federal * * * The most significant development Government is to have effective accounting under the joint program has been the com- from a management viewpoint. Each agency plete change in the basic approach to agency was, therefore, recognized as an essential accounting in the Federal Government. The working partner in the joint effort with the previous approach emphasized uniform charts General Accounting Office, Bureau of the of accounts and uniform methods of recording Budget and Treasury Department. * * * transactions which minimized the opportunity A new division, the Accounting Systems to adapt accounting to the needs of the par- Division, was established in the Office of the ticular agency. Similarly, the emphasis which Comptroller General. This Division, com- is now being placed upon internal control, posed of a relatively small, but, we believe, including internal audit, is almost a complete highly qualified staff of accountants has reversal of previous trends. Previous prac- served from the outset as the focal point for tices tended to lean on controls established 113 ACCOUNTING SYSTEMS DIVISION through the central fiscal agencies (i.e., Gen- were realigned. The audit and coopera- eral Accounting Office and Treasury Depart- tive accounting systems responsibilities ment) largely through duplicate record- for civil agencies were assigned to the keeping, a s opposed to the present program which recognizes that the primary respon- newly formed Civil Accounting and sibility for control must necessarily rest' at Auditing Division. These responsibil- the point of operations which, in turn, is to ities for the Department of Defense be supplemented by modern concepts of man- were assigned to the Defense Account- agement control under which internal audit- ing and Auditing Division. Accounting ing assumes its proper place. This is, of course complemented by an audit by the policy responsibilities were assigned to General Accounting Office. ' ' '' the Accounting and Auditing Policy A brief sketch such as this does not Staff. permit a recitation of the accomplish- Key members of the top staff of the ments of the Accounting Systems Divi- Accounting Systems Division included, sion. Annual reports of the Comptroller besides Walter F. Frese, its head: General and of the Joint Financial Man- Karney A . Brasfield, Steve M . Brown, agement Improvement Program bear Lowell B. Collins, Raymond Einhorn, witness to the constructive work done T . Jack Gary, E. Reece Harrill, Edward by that division. T . Johnson, Edward J . Mahoney, Lloyd The Accounting Systems Division A . Nelson, Edward T . Nolan, Lawrence operated as a separate organizational J . Powers, Alvin R. Rosin, Simmons unit in GAO until March 1956. At that B. Savage, Jr., Howard F. Shumbarger, time, under changes directed by Comp- Joseph M. Sullivan, Philip C. V a r d , troller General Campbell, the account- William J. Wilson, and Irving ing and auditing functions in GAO Zuckerman. 114 The GAO Building The GAO Building, 4J1 G Street ,%‘lV., IP/ashington, D.C. Completed in 1951 at a cost of about $25 million. A landmark event in the history of more or less duplication of work and effort, and (4)a necessarily reduced output of work. the General Accounting Office was the The necessity for a fireproof building that erection of a building to house its will fully meet the requirements of this office Washington activities which had been is immediate and it is hoped that the Congress scattered in numerous locations around may soon find the way to meet the necessities the city. and relieve this unfortunate and unbusiness- like situation. The first annual report of the Comp- troller General covering the fiscal year It was not until 1935 that the Con- 1922 called attention to the great need gress acted on this need. In the Second for a building in the following words: Deficiency Appropriation Act, 1935, it The supreme need of the General Account- provided $4,700,000 to extend and ing Office at the present time is a building remodel the old Pension Office Build- which will house its entire personnel of more ing. The GAO had moved many, but than 2,000 persons and records. At present not all, of its activities into this build- the personnel and records are in 20 buildings * * *. The separation of the force works (1) ing in 1926. Plans to remodel the Pen- for unsatisfactory administration, (2) for sion Building had to be abandoned, largely increased expenses of overhead, (3) a however, with the “unexpected growth 115 THE GAO BUILDING President Truman signs bill authorizing construction o f GAO Building, May 1948. From l e f t : Comptroller General Lindsay C . Warren, President Truman, Assistant Comptroller General Frank L. Yates, mtd Carl C . Berger, Editor, The Watchdog. of the Government, and its expendi- Congress renewed its authorization and tures” which increased GAO’s require- provided funds to construct the new ments for space and thereby made the GAO building. plan “entirely inadequate.” In the light of the modernization of In 1940 and 1941, the Congress GAO audit procedures and the decen- authorized funds to acquire the site of tralization of the audit work to the sites the present building across G Street of agency operations beginning in the from the Pension Building. Work was late 1940’s, it is of interest to note that started to clear and prepare this site for the case made for the GAO building construction but had to be suspended was based largely on centralized audit for the duration of World War 11. operations in Washington. The Com- After the war, efforts were resumed mittees on Public Works of the House by GAO officials to obtain a suitable and Senate were informed in July 1947 building. In describing previous actions, that: the Comptroller General informed con- Its work and records are now scattered in gressional committees that “despite the 20 buildings throughout Washington and its unanimity of opinion regarding the vicinity. This is a serious and costly handi- need for this building, all we have to cap to its successful functioning. To be so date is a cleared site and hole in the scattered would handicap the administration ground.” The postwar efforts were of any office. But the difficulties of operating successful, however, and in 1948, the under such conditions are multiplied in the 116 THE GAO BUILDING case of the General Accounting Office because about the adequacy of the proposed all of its actions require consideration of a building to meet GAO needs. Mr. Yates single basic accounting record-a voucher, a related: check, a contract, a schedule, a claim, a report of investigation, etc.-and frequently some of We are confident, Mr. Chairman, that it these basic records are required simultan- will be sufficient by the time the building can eously in several buildings for different pur- be made ready. It would not be sufficient now poses-for the completion of the audit and but we have already reduced our force from the settlement of a disbursing officer’s periodic nearly 15,000, the peak of 1946, to 11,013 account, for the settlement of a claim, for the employees now. I t is Mr. Warren’s firm reso- preparation of a decision, in connection with lution to reduce as much further as is humanly an investigation, or for the preparation of a possible. We think we will be able to reduce report to Congress or a committee of Congress. enough by 1950 to get the entire office in the Thus all of the Government’s basic accounting building as generally planned, with the excep- records must be carted considerable dis- tion of the few that have to be left in the tances-some of them many times-from field. building to building, with attendant delays in all branches of the work, until they are finally The “few to be left in the field” was old enough to become semi-active records. later clarified by Mr. Yates as being At the time, the plans of the Office between 1,000 to 2,000 employees, were to bring almost all of the GAO’s leaving about 8,000 to occupy the new activities together under the one roof building in Washington. in Washington. In testifying before the Mr. Yates provided the committee House Committee on Public Works in with the following breakdown of the April 1947, Frank L. Yates, the Assist- location of GAO employees at March ant Comptroller General, was asked 31, 1947: Washington, D.C .. . . 6,961 - Field locations : Postal Accounts Division, Asheville, N.C 991 Army Audit Branch, St. Louis, Mo .. 925 Navy Audit Branch, Cleveland, Ohio 463 Check Accounting Section, New York, N.Y . 187 Reconciliation and Clearance Subdivision, Aurora, I11 184 In various cities: War Contract Project Audit and War Assets Administration 995 Soil Conservation Audit .. 56 Agency Audit. . .. .. .. 76 Investigations .. 175 Subtotal ... . .. . 4,052 Total 11,013 117 T H E GAO BUILDING Construction in Progress. G A O Building, November 1949. Some Facts About the Covers a ground area of 209,200 Completed Building square feet. Total gross area of building is 1,935,500 square feet; Occupies the block bounded by G, net usable area is 1,294,000 square H, 4th and 5th Streets NW. feet. Chief feature of building is its block General contractor was John Mc- form, that is, no wings or internal Shain, Inc. courts. The block form provides Designed and construction supervised maximum usable floor area upon a by Public Buildings Service, Gen- given site. eral Services Administration. Exterior of building is of buff lime- Approximate cost $25 million. stone, with a polished granite en- Dedicated September 11,1951. trance motif and base. Occupancy began January 1951. Contains over 1,000 windows. Dedication Has seven stories with basement and subbasement. Is 638 feet long on Dedication ceremonies were held on G Street and 388 feet on 4th Street. September 11, 1951. Speakers were 118 THE GAO BUILDING President Harry S. Truman, Comptrol- fice certainly deserve these new and better ler General Lindsay C. Warren, and quarters. Under Lindsay Warren, the General Ac- Commissioner of Public Buildings W. counting Office has handled the biggest au- E. Reynolds. diting job in the history of mankind and President Truman devoted most of has done it well. It has continuously im- his address to a defense of his current proved its operations so it could serve the budget but opened with the following people of this country better and more effi- ciently. remarks : We are meeting here today to lay the cor- Mr. Warren expressed some of his nerstone of a fine new building for the Gen- philosophy about GAO operations that eral Accounting Office. This building is of is noteworthy: special significance, because it emphasizes the fact that our Government is constantly striv- But we in the General Accounting Office must always bear foremost in our minds that ing for better management of its financial af- the support and backing of the Congress and fairs. of the citizens of our country must be earned Many people in the Government have and deserved. Our job, as in the case of any wrongly considered the General Accounting organization, whether in private business or Office a sort of bugaboo that keeps them from the Government, is a continuing one. Let us doing what they want to do. Many people out- never forget that no organization exists for side the Government, when they think of the long at a standstill or as a matter of right. General Accounting Office at all, consider it a The General Accounting Office was estab- dry and boring subject. But the General Ac- lished to meet particular needs of our demo- counting Office is neither a hugaboo nor a cratic form of government and we must serve bore. It is a vital part of our Government. those needs with constant vigor and with con- Its work is of great benefit to all of us. The tinual awareness of ever-changing conditions. people who run the General Accounting Of- * * * * * Construction Progresses Further. GAO Building,September 1950. 119 THE GAO BUILDING I would like to tell you my conception of continue to cooperate wholeheartedly with the mission of the General Accounting Office both the Congress and the executive branch and the way in which that mission should be toward improved and informed governmental performed. I believe the Office must see to it administration. I believe we must remain that the will of Congress is given effect in the young in our outlook, adaptable in our meth- Government’s financial transactions. I believe ods, and firm in our objectives. If we faith- it must make full use of the resources at its fully adhere to this pattern, I have no doubt command, growing out of its audit, account- as to our place in the great structure of our ing, and investigative activities, to fearlessly Government. expose the facts, not as a carping critic, but in a constructive spirit. I believe it must con- stantly strive to bring to light waste and ex- Occupancy travagance in the Government’s operations and insist that those who spend the Govern- In January 1951, the first contingent ment’s money be guided by the principle that of GAO employees who were housed in it is not their money, but money taken in- voluntarily for public purposes and impressed 21 scattered buildings in the Washing- with a public trust. I believe the Office must ton area moved into the new building. LAYING OF THE CORNERSTONE OF THE GAO BUILDING I N SEPTEMBER 1951 From left: Frank L. Yates, Assistant Comptroller General; John McShain, builder; W. E. Reynolds, Commissioner of Pu hlic Buildings, G S A ; Lindsay C. Warren, Comptroller General of the United States; and Harry S. Truman, President of the United States. 120 THE GAO BUILDING As reported by The Watchdog in ret- Washington, D.C. : In GAO Building . . 1,976 rospect in January 1961 : At 41 Federal agency sites . 747 Pioneers they were-the group that made Regional Offices: the first move. Only half of the building had Washington Regional Office (Falls Church, Va.) .... 169 been completed at the time, and blustery win- 14 other regional offices . . 1,708 try winds enjoyed blowing through the cor- Overseas offices . .. . 142 ridors, and so made the work-old work. But GAOers were always ingenious-and Total .. 4,742 many will recall seeing figures hunched over their work with gloves on their hands and Other Federal agencies occupying feet planted in cardboard boxes in order to space in the building in June 1971, as strain the bitter cold. arranged by the Public Buildings Serv- ice of the General Services Administra- tion which operates the building, are : The General Accounting Office never has occupied all of the building which Department of Labor, bears its name. With the changes in Bureau of Labor Statistics methods of doing business that began in Federal Power Commission the late 1940’s, particularly the adop- Department of the Treasury, Office of the Treasurer of the tion of comprehensive auditing at the United States sites of agency operations, the need for Department of Commerce, such a large central headquarters was Maritime Administration not as great. General Services Administration Indicative of the changes in operat- Post Office Department, ing concepts since the efforts to obtain Money Order Division a building to house all of its operations International Boundary and Water bore fruit are the following statistics on Commission location of GAO employees (December Federal Mediation and Conciliation 1970) : Service 121 All You Lose Is Money In the course of a debate on defense last month, Senate Majority Leader Lyndon Johnson made the comment that if we stepped up our military defenses and they were not needed, all we would lose would be our money. But if they were nnt stepped lip and we should lose a war, we would lose our country. This is strictly true. But it fails adequately to cover the ground. For by loose financial management we may SO weaken our economy that military conquest becomes inevitable. Con- gress, of which Senator Johnson is an important part, might well pay more heed to the fact that we are already losing a lot of money by mismanagement in the very departments he was talking about. The General Accounting Office, of which Comptroller General Joseph Campbell is the head, is primarily an agency of Congress. Its reports, which go to that brench of government, have over the past year told of ways through which hundreds of millions of taxpayers’ dollars could be saved. It is a most interesting office, because not only is it one which pays for itself many times over, hut it fails to spend on its own oper- ations all that Congress has appropriated f,or it. This is a governmental miracle. Since nobody enjoys critirism, esperially bureaucrats, the military services are smarting over the probings of the Comptroller General, and there is not a little tendency to withhold information from this powerful agency of Congress. But enough has been disclosed to provide some uncomfortable news for taxpayers. For example : The Navy shipyards have consistently overestimated their needs for material for ship overhaul and conversion work. Ex- perience shows that such unneeded material is ultimately disposed of at a fraction of its cost. Navy inventories classed as in excess of needs have included $850 million in electronic and shipboard material, plus another $40 million loosely accounted for. During the fiscal years 1956 and 1957, the Comptroller General dis- covered that military paymasters had dispensed $46 million in un- authorized payments, mostly in enlistment bonuses, accrued leave, mustering-out pay, and travel allowances. Since the purchasing of military materials is almost all by negotiated contracts and the amounts total about 30 per cent of the national budget, the above examples indicate what a tremendous amount of waste may be involved because of loose business practices. But the demands for more and more billions never cease. And if the taxpayer hesitates, he is roughly reminded that unless he shells out, we shall all likewise perish at the hands of t h e Russians. If he cites such examples a s I have noted above, he is accused of “lint-picking.” Raymond Moley, Newsweek, April 4, 1960 122 GAO’s General Counsels The Office of the General Counsel is lishment in 1921 until his retirement on the organizational unit within the GAO February 28,1939. Mr. Golze was born responsible for legal and legislative in Philadelphia, Pa. He graduated from work. The legal decision authority of the University of Pennsylvania Law the Comptroller General is derived from School and entered the private practice the Treasury Act of 1789 which vested of law in Philadelphia. Before the estab- in the officer designated “Comptroller” lishment of the GAO in 1921, Mr. Golze the responsibility for deciding the law- had Government service in Panama and fulness and justice of public accounts. with the predecessor Office of the While decisions of the Comptroller Comptroller of the Treasury. General are binding and conclusive Comptroller General McCarl estab- upon the executive branch of the Gov- lished a legal department on July 26. ernment, private concerns and individ- 1921, by General Office Order No. 3 and uaIs have further recourse to the courts. designated Mr. Golze as Chief Attorney. Since 1921 the important position of In 1922 he was designated as Solicitor General Counsel has been filled by the following individuals: and the legal department was named the Division of Law. In 1928 Mr. Golze was Rudolph L. Golze, 1921-39 designated as General Counsel and the John C. McFarland, 1939-47 name of his office was changed to its Edwin L. Fisher, 1947-58 Robert F. Keller, 1958-69 present title of Office of the General P a d G. Dembling, 1969- Counsel. Mr. Golze died in December 1951. I n 1958 the position of Deputy Gen- eral Counsel was created by Comptroller General Campbell. Occupants of this John C. McFarland, position have been : General Counsel, 193947 J . Edward Welch, 1958-71 John C. McFarland was the second Milton J . Socolar, 1971- General Counsel of the General Ac- The following sketches about these counting Office and served for more officials are drawn largely from The than 8 years in that office. Watchdog. Mr. McFarland came to Washington, D.C., in 1904 and began his Govern- Rudolph L. Golze, ment career as a clerk with the Treasury General Counsel, 1921-39 Department. He served in positions of Rudolph L. Golze served as the chief increasing responsibility and during legal officer of the GAO from its estab- World War I was in the Comptroller of 123 423-774 0 - 7 1 -9 GAO’S GENERAL COUNSELS the Treasury’s office in charge of legal that time he was employed with the work in the Paris office. When GAO was American Battle Monuments Commis- established in 1921, Mr. McFarland sion as a stenographer during 1928 and transferred as Senior Attorney to the 1929. Later he was with the Bureau of new Office. In 1939 he was promoted to Lighthouses, Department of Commerce, the position of General Counsel. during 1929 and 1930, and, finally, with Mr. McFarland received his law de- the Bureau of Prisons, Department of gree from the National University Law Justice. School, now a part of The George Wash- After joining the General Accounting ington University. He was a member of Office, his progress within the Claims the D.C. Bar. Division was marked with an unusual degree of rapidity. In fact, his work was He died November 16, 1968, in Ne- outstanding both in accuracy and vada where he lived following his re- speed-particularly the latter-and just tirement in August 1947. recently one of his former supervisors Robert F. Keller, then General Coun- remarked that “it was difficult to keep sel, in announcing the death of Mr. work on his desk.” From the Miscel- McFarland stated that there could be no laneous Section he was promoted to the doubt that the direction that Mr. McFar- Contracts Section, followed very quick- land gave the legal work of the Office ly by another promotion to the Review during its formative years accounts for Examining Section, after which he was its present position as an impartial fo- detailed as an Attorney in the Office of rum for the determination of the legality the General Counsel on December 9, of Federal expenditures. Mr. McFar- 1938. But he did not remain long in this land deserves a prominent place in the position, because on April 1, 1939, he history of the Office. became Senior Attorney. On February 1, 1941, he received the promotion to Principal Attorney, and on May 1, Edwin Lyle Fisher, General Counsel, 1947-58 1942, he was made Assistant General Counsel, which position he occupied un- When John C. McFarland retired til April 6,1947, when he was appointed from the General Accounting Office on Associate General Counsel. August 31, 1947, the Cmomptroller Gen- Mr. Fisher was born on February 28, eral had no further to look than within 1907, in Ottumwa, Iowa. He and Asso- ’ his own organization for a man who, be- ciate General Counsel Ralph E . Ramsey, cause of experience and training, was also of Ottumwa, took a Civil Service well 6tted to step into the exacting posi- examination at the same time before tion of General Counsel. That man was coming to Washington in 1928. In 1929 Edwin Lyle Fisher. and 1930 he attended The George Wash- Mr. Fisher came to the General Ac- ington University in Washington, D.C., counting Office on April 1, 1936, as a where he majored in English and his- Claims Examiner in the Miscellaneous tory. Subsequently, he received his Section of the Claims Division. Prior to LL.B. degree at the National University 124 GAO’S GENERAL COUNSELS of Law in 1933. Again he took graduate and he maintained personal supervi- work at The George Washington Uni- sion over it until his retirement. versity during 1934 and 1935, and in In 1951, Mr. Fisher presented two 1936 and 1937 he studied accounting at papers, entitled “The Government Point the Benjamin Franklin University in of View” and “Government Tax Claims Washington. Under Contract Bonds and Government Mr. Fisher won the loyalty and ad- Lien Rights,” before the International miration of the employees in the Gen- Association of Insurance Counsels eral Accounting Office by his ability, which were termed excellent treatises in powers of arbitration, and a capacity the field. The Wunderlich amendment for hard work-plus a sense of humor was one of his legislative accomplish- and a sociable personality-and cer- ments. tainly his rise in the Office may be attributed to his perseverance in many Robert F. Keller, difficult tasks and his fidelity to the General Counsel, 1958-69 trusts imposed in him. Mr. Fisher retired as General Coun- Robert F. Keller was designated as sel on August 31, 1958. In announcing General Counsel by Comptroller Gen- the retirement, Comptroller General eral Joseph Campbell in October 1958. Joseph Campbell said: He served in that office until 1969 when he became the Assistant Comptroller Mr. Fisher has performed outstanding serv- ice in one of the most difficult legal posi- General. tions in the Federal Government. His superior Except when he entered the Navy in legal ability and his conscientious devotion 1942 as ensign and until released from to duty as a public official can well stand as active duty in 1945 as lieutenant, Mr. an inspiration for others. Keller has worked continuously in the Mr. Fisher died on July 11, 1962, GAO in positions of increasing respon- after a heart attack. At the time of his sibility. death, he was Assistant General Coun- He started in the Office in 1935 as a sel of the Martin Co. Clerk and rose to the position of a Prin- Although Mr. Fisher was frequently cipal Claims Reviewer before he en- referred to as “Judge Fisher” when he tered active duty with the Navy. In testified on the Hill, he was not an 1946 he received a commendation from austere administrator. He will be re- the Secretary of the Navy for outstand- membered by the attorneys for his fre- ing performance of duties as an officer quent visits to all the sections and of- of the Navy during World War 11. fices under his jurisdiction. Even after Upon returning from military serv- he became General Counsel he con- ice he was selected to work in the Office tinued as an active member of the Gen- of the Comptroller General as a Legis- eral Counsel bowling team. lative Attorney. His duties included The attorney-trainee recruitment pro- analyzing and reviewing legislation, gram which Mr. Fisher established in preparing and presenting comments on 1954 was one of his favorite projects legislation, conferring with Members 125 GAO‘S GENERAL COUNSELS of Congress and officials of various Gov- Court of the United States for the Dis- ernment agencies, and testifying before trict of Columbia and the U.S. Court of congressional committees. Appeals for the District of Columbia. In 1950 he was appointed an Assist- ant to the Comptroller General and in this position participated in the formul- Paul G. Dembling, lation, development, and execution of General Counsel, 1969- the legislative programs of the GAO PUUEG. Dembling, formerly Deputy including directing the legislative liai- Associate Administrator of the National son activities of the Office. In 1953 he Aeronautics and Space Administration was promoted to Principal Assistant to (NASA) ,was appointed General Coun- the Comptroller General in which posi- sel of GAO in September 1969 by tion he acted as personal adviser to the Comptroller General Elmer B. S a a b . Comptroller General on policy matters Mr. Dembling has served with the in all fields of operation of the General Federal Government since 1942, princi- Accounting Office, with particular refer- pally with the National Advisory Corn ence to matters affecting the relation- mittee for Aeronautics and its successor ship of the Office with Congress, other agency, NASA. He was Deputy Gen- Government agencies, and the public. eral Counsel of NASA from 1963 to Mr. Keller is a member of the h e r b 1967 and General Counsel from 1967 can Bar Association and the Council of until he was appointed to his present the Section of Public Contract Law. He position. also belongs to the Federal Bar Associa- From 1964, Mr. Dembling also served tion and served during 1964-65 as Vice as a member of the U.S. delegation to Chairman, General Counsels’ Commit- the u.N. Legal Subcommittee in the tee, of that association. He is a member drafting of the Outer Space and A s ~ o - of the Board of Advisors of the Na- naut Treaties. He is the recipient of the tional Contract Management Associa- Civilian Meritorious Award and tion. NASA’s highest award, the Distin- After attending The George Washing- @shed Service Medal. ton University he received an U.B. de- M ~ Dembling . was born in R&way, gree in 1937 from the Washington COl- N.J., January 11,1920. He received his lege of Law (American University) 9 A.B. cum hude and with special honors and a B.C.S. degree (accounting) in in economics in 1940 and his M.A. de- 1952 from Benjamin Franklin Univer- gree in 1942 from Rutgers University. sity. In 1961 he completed the Manage- He received his J.D. degree from The ment Course of the American Manage- George Washington University Law ment Association. In 1965 Mr. Keller School, where he served as an editor of received the Rockefeller Public Serv- he L~~ ~ ~ ~ i ~ ~ , ice Award in the field of law, legislation, Mr. Dembling is a member of the and regulation. District of Columbia Bar and of the Mr. Keller was admitted to the Bar of American Bar Association, the Federal the District of Columbia in 1936, and Bar Association, and the International admitted to practice before the District Institute of Space Law. 126 GAO’S GENERAL COUNSELS J. Edward Welch, Mr. Welch has continued to be an active Deputy General Counsel, 1958-71 participant on the procurement commit- tees revising and updating Government- “Few men have had as great an im- wide contract guidelines. pact in the field of Government con- Mr. Welch has appeared frequently tracts as Jed Welch” is the way that before congressional committees on be- Paul G. Dembling, General Counsel, ex- half of the Office testifying on the legis- pressed it when he announced the re- lation establishing the new Commis- tirement of Mr. Velch as Deputy Gen- sion on Government Procurement, on eral C;ounsel. Mr. Welch retired on the bill which became the Truth in January 9, after more than 35 years Negotiations Act, small business pro- of dedicated service in the General Ac- curement matters, and labor matters. counting Office. I n 1969, the Comptroller General, Mr. Welch came to GAO in 1935 and Elmer B. Stauts, presented Mr. Welch served in the Audit Division. In 1940 with a Distinguished Service Award. he was transferred to the Claims Divi- sion in the capacity of examiner where he served until 1942 when he received Milton J. Socolar, his appointment as attorney in the Office Deputy General Counsel, 1971- of the General Counsel. In 1949 he was Milton J . Socolar was designated as designated as Assistant General Coun- Deputy General Counsel in April 1971. sel and in 1956 as Associate General Counsel. In 1958 he was selected to Mr. Socolar served in the U S . Navy from 1943 to 1946. He joined the Gen- serve in the newly created position of eral Accounting Office in 1952 as an Deputy General Counsel, the position auditor and transferred to the Office of that he held at his retirement. the General Counsel in 1956. He served Mr. Welch attended Drexel Institute in the Paris Office of GAO’s European and received his A.B. degree in business Branch from 1954 to 1959 and again in administration from the University of Maryland. He received his law degree 1963 to 1964. During 1962 he served from Georgetown University in 1939. as Assistant General Counsel, Bureau of While still in law school he took the Public Roads, Department of Com- District of Columbia Bar examination merce. In 1968 he was designated as a and was admitted to practice before Special Assistant to the General Coun- the U S . District Court for the District sel, and in 1970 he was appointed As- of Columbia in 1938. sistant General Counsel, Civilian I n the Office of the General Coun- Personnel. sel, Mr. Welch was assigned to contract Mr. Socolar received an LL.B. de- work where his expertise was soon rec- gree from The George Washington Uni- ognized. He was appointed to repre- versity in 1954 and is a member of the sent the GAO on the inter-Government Bar of the District of Columbia. His committees that drafted the Armed undergraduate degree work was at the Services Procurement Regulation and University of Maryland and he is a the Federal Procurement Regulations. certified public accountant. 127 C. E. MERRILL History of the Field Operations Division GAO field operations as we know a large backlog of unaudited disburs- them today came into existence in 1952 ing o5cers’ accounts. Moreover, an when Comptroller General Warren es- adequate audit of overhead and in- tablished in the Division of Audits a direct costs in mixed plant operations Regional Audit O5ce at 22 major cities could only be performed at the site. in the United States and at Juneau, It was at this point in time that a Alaska. The regions superseded the then decision was made to explore the pos- existing zone and area o5ces of the sibility of alleviating this condition by Field Audit Section of the former Audit sending an experimental audit team to Division. Detroit, Mich., to conduct onsite post- Before proceeding to discuss some audits of payments to contractors per- of the highlights and changes since forming work under cost-plus-a-fixed- 1952, let’s look back to earlier field fee contracts and other cost-type audit activities. contracts. The annual report of the Comptroller General for fiscal year Background 1942 pointed out that while the experi- mental Detroit project had been in o p The World War I1 years of 1941 and eration only a short time, the military early 1942 found the United States departments concerned had requested heavily engaged in the production of an extension to other industrial centers war materials and the training of armed and that steps were being taken to ef- forces. Expenditures of funds at scores fect such extension. of construction and plant sites for such On August 18, 1942, the Comptroller efforts had created a large volume of General established, through O5ce documents, all headed for postaudit by Order No. 29, in the Audit Division the centrally located General Account- for the duration of the war and 1 year ing O5ce through military disbursing thereafter a War Contract Project Audit channels. Even though audit staffs at Section. The order further established the Washington, D.C., main office of the Western, North Central, South Cen- GAO had been substantially increased, tral, Southeast and Northeast Zones. the volume of payments began to create Some of the early key field stations were Mr. Merrill is the special assistant to the Director, Field Operations Division. Prior to his assignment to the Washington Office, he served as manager of the Richmond and Norfolk regions. 128 FIELD OPERATIONS DIVISION located at San Francisco and Santa The field is divided into six zones with the Monica, Seattle, CBicago, Detroit, Phil- following men in charge: adelphia, Baltimore, Atlanta, Dallas, Lloyd W . Wineberg, Northeast Zone. and New York. As audit teams became Kurt W . Krause, Great Lakes Zone. Francis J. Pelland, North Central Zone. available, 23 additional field stations Edwin E. Lefler, South Central Zone. were added and on February 19,1944, Charles M . Bailey, Western Zone. an additional zone, the Great Lakes Ellis S. Stone, Southeast Zone. Zone, was established. At the peak of the project audit activ- The Patchdog for April 1944 car- ities, there were 276 onsite audit Ioca- ried the following statement by E. W. tions, mostly at contractors' plants. BelE, Chief of the Audit Division, about Audits performed in this manner were the field audit of war contracts. highly successful as they permitted The field audit of cost-plus-a-fixed-feeand early resolution of questionable pay- similar contracts was commenced on an ex- ments and provided a means of han- perimental basis during the fiscal year 1%2 in the Detroit, Mich., area. Since that time dling the large volume of documents the departments concerned have requested through retention of audited contract extension of the arrangement to other indus- records in the field until completion trial centers until at the present date stations of the contracts. Further evidence of the and substations have been established at 229 locations in 36 States, Canada, and Honolulu, success of these audits was the colIec- T.H.; 854 contracts are now under audit with tion of over $110 million of improper a total amount $26,816,750,920 involved. payments, many of which would have FIELD AUDIT ZONE CHIEFS CONFER WITH AUDIT DIVISION CHIEF IN WASHINGTON-NOVEMBER 1950 Standing, l e f t to right: H. B . Gehrke, South Central Zone; C . M . Bailey, Western Zone; R . J . Madison, Southeast Zone; F . J . Pelland, North Central Zone. Seated, l e f t to right: L. F. Weinberg, Northeast Zone; W . A . Willingham, Assistant Chief, Audit Division; E. W . Bell, Chief, Audit Division; and K . W . Krause, Great Lakes Zone. 129 FIELD OPERATIONS DIVISION been difficult if not impossible to detect Lloyd W . Wineberg as Chief of the in a centralized audit. Northeast Zone, Richard .I. Madison As World War I1 activities came to as Chief of the Southeast Zone, Kurt an end, the War Contract Project Audit W. Krause as Chief of the Great Lakes Section was terminated and on Novem- Zone, Francis .I. Pelland as Chief of ber 19, 1947, all of its functions and the North Central Zone, Herbert B. audit responsibilities, including those Gehrke as Chief of the South Central of the six zones, were transferred to Zone, and John E. Thornton as Chief a newly created Field Audit Section of of the Western Zone. the Audit Division. The work of this section was further enlarged when on Establishment of January 25, 1950, substantially all the Field Operations Division civilian payroll audit functions were transferred to the Field Audit Section. Within a few months of this change, These audits were being performed by the field operations staffs and functions staffs located at a number of cities were further enlarged when on throughout the United States. Addi- March 30, 1952, the Comptroller Gen- tional mergers took place on Febru- eral announced the creation of regional ary 9, 1951, when the remaining audit offices at 22 stateside locations payroll audits and the entire operations and at Juneau, Alaska. The announce- and staff of the Soil Conservation Sec- ment provided for a transition period tion were transferred to the Field Audit in which the staffs and audit workload Section which was headed by W . A . of the six zones would be transferred Willingham. These mergers brought to the regional office locations. The together a substantial portion of the transfers were completed and regional Audit Division’s field forces under managers installed by July 1,1952. See single management and supervision. page 135 for listing of the original man- The next major change that had a far- agers and dates they were installed at reaching impact in shaping the future the regional locations. of the Field Operations Division took The Comptroller General’s Order place on January 18, 1952. On that establishing the regional audit offices date, Comptroller General Warren ter- substantially enlarged the area of field minated the separate divisions of Audit, officeaudit functions. The regions were Corporation Audits, Postal Audits, and assigned the responsibility for auditing Reconciliation and Clearance and con- agency operations to determine the solidated the duties and responsibilities effectiveness of their organizational of these offices into a Division of Audits structures and whether their systems of under the direction and supervision internal control, policies, and proce- of Ted B. WestfalZ as Director of dures were consistent with the standards Audits. and principles approved by the Comp- Top officials named to head up the troller General. Further, comprehensive new Division’s field operations were audit and reporting responsibilities Charles M. Bailey as Assistant Direc- were extended to substantially all phases tor of Audits for Field Operations, of the accounts of accountable officers 130 FIRST REGIONAL MANAGERS MEETING The first regional managers meeting was held in Washington, D.C., Occober 13-17, 1952. T h e 22 rc@onut manugers were welcomed b y Frank L. Yates, Assistant Comptroller Generul. Comptrotter Generul Lindsay C. Warren m a d e the closing address. Presiding at the sessions which took place in the senior staff room of the Division of Audits was Robert I,. Long, Director of Audits. Pictured ubove are, from left to right (seuted): Harry J . Trainor, Assistant to the Director o f Audits; Irwin S. Decker and Edward W . Bell, Associate Directors of Audits: Rohert L. Long. Director of Audits; Frank L. Y a t e s , Assistant Comptroller General; Charles M.Bailey, Assistant Director for Field Operations; Stiyhen B. Ives and Gary Camphetl, Associate Directors of Audits; (standing):Lawrrnce V . Dennzy, Assistant General Counsel; E. H. Morse, Jr., Assistant to the Director uf Audits: J . Stanley Sheridan, Philadelphia: Richurd J . Mudison. Atlanta; Homer D. Eaton. New Orleans: Hurry L. Bushong, Denver; l a m e s H . Hummond, Kansas City: Charles F . W e l l s , I’ortland: Jacob P. Gticli. Richmond: Colin II. Btick, St. Louis; 2 Donald R . Moysey, Chicago; Harotd P. Botchelder, Dallus; Hassetl B. Belt, New Yorli: G . K a y Bandy, Srattle; Harold L . Rjder. Los Angeles; Red- 7 mond R. Everard, Billings; Philip Cliorani, Dayton: J o h n E. Thornton, S u n Fruncisco: J . Philip Horun, Alhuquerqtce; Harold If. Rubin, St. Paul; 0 Ctsde E. illerrill, Division of Audits staff: Adam J . Mouton, Salt Lake C i t y ; Omer E. I’aquin, Boston: Francis J . Peltnnd. former Chicago manager; m m Kirrt W . Krause, Detroit; and hfurion K. Beeninn. Cleveland. Other G.40 oficitrls who participated in the meeting, uccording to The Watchdog f o r a October 1952, not pictured, included: John R. Cummins, Chief, Air Forrc Audit Iiranch; William A. Fillingham, Chief, A r m y Audit Branch; Arthur P . W y c o f f ,Chief,Navy Audit Branch; J . D e F i t t Johnson, Chief, Cit.il .Audit Branch: J . Ness, Chief, Exuminntion u n d Settlement Brunch; 5 William L. Ellis, Chief, Ofice of Inivstigations; 1. A . Newmun. Jr., Sidncy Jerois, Frederic H. Smith, Curties A. Hurley, Roy S.Lindgren, Ben H. 3 * l’uckelt, L. K . Gerhardt, Burke G. Piprlr, and A. T . Samuelson, Assistant Directors o f Audits; Frank N. W e i t d nnd Robert F. Keller, Assistants to the Comptroller Generul; Falter F. Frese, Chief, Acrounting Systems Division; John F . Feeney, Erecutive Officer; and M a x A. Neuwirth, Oye V . 2Y2 E Stovall, Robert L. Rasor, Charles A. lovino, John C. Fenton, and Henry H. Sasscer of the Division of Audits Wushington staff. 0 2 FIELD OPERATfONS DlVfSION and to the books and financial transac- cies in developing accounting systems, tions of Government corporations. evaluating the effectiveness of these On November 30, 1955, Comptroller systems, and participating in property General Joseph Campbell announced accounting surveys. As shown on page far-reaching changes in the organiza- 135, four regional offices and staffs- tion and operations of GAO. Those pri- Albuquerque, Billings, Juneau, and Salt marily affecting field operations were Lake City-were merged with other re- the establishment of the Civil and De- gions to provide the needed reassign- fense Accounting and Auditing Divi- ment of staff to meet the expanded audit sions as the primary operating vehicles coverage. to carry out the responsibilities of the One further step taken during this Office for accounting and auditing activ- period in streamlining the overall func- ities on an integrated basis in each of tions, duties, and responsibilities of the executive agencies. field audits was the merging of the Of- In implementing the November 30th fice of Investigations with the Civil and plan as it affected field operations, the Defense Accounting and Auditing Divi- Comptroller General established on sions. The Office of Investigations was March 22,1956, a Field Operations Di- the first GAO group to establish an ac- vision under supervision and direction tive base of operations in the field. Dur- of a director, responsible to the Comp- ing the war years, it investigated num- troller General for administration and erous disbursing activities, both civil operation of the Division. John E . and military, with a sizeable work force Thornton was named as director of the located in major cities throughout the Division. Mr. Thornton had been serv- United States. The valuable audit and ing as assistant director for field opera- investigative experience gained by tions of the Division of Audits, having members of these field parties was com- succeeded Charles M. Bailey in this bined with that of the regional audit position in 1954. At a later date G.Ray offices when the merger took place on Bandy was named as deputy director of June 6,1956. At that time, the combined the Division, serving in that capacity field audit offices were designated as from October 1958 to Decemher 1964. U S . General Accounting Office Re- Other deputy directors and their pe- gional Offices. riods of service were H . L. Krieger Other regional realignments that from April 1962 to June 1966 and For- have taken place during the past few rest R. Browne from December 1966 to years included four regional mergers in April 1971. 1960, the transfer of staff and audit re- The new Division through its 19 sponsibilities of the Army, Navy, and regional offices was charged with the Air Force Audit Branches to FOD in responsibility of performing account- October 1962, the establishment of the ing and auditing work assigned by the Washington Regional Office in Septem- Directors of the Civil and Defense Ac- ber 1964, and the merger of the New counting and Auditing Divisions, in- Orleans Region with the Dallas Region cluding cooperating with Federal agen- in July 1970. The regional office 132 REGIONAL MANAGERS’ CONFERENCE, OCTOBER 28-30, 1970, SAN FRANCISCO, CALIF. Seated l e f t to right: A . T . Samuelson, Director, Civil Division; Thomas D. Morris, Sprcial Assistant to the Comptroller General; Paul G . Dembling, General Counsel; A . M . Clavelli, Regional Manager, Sun Francisco; Elmer B. Stuuts, Comptrollrr General; E. H . Morse, Jr., Director, O f i c e of Policy and Special Studies; C. M . Bailey, Director, Defense Division; Lawrence J . Powrrc, Assistant to the Comptroller General. Standing 1 s t row lrft to right: Smith Blair, Jr., Offre of Legislative, Liaison; Joseph Eder, Kegional 12lnnnger, Boston; 12. F . Cutmann, Deputy Direc- 2 tor, Defense Diiision; F.H . Henson, Kegional Mnnager, Norfolk; J. H. Rogers, R e g i o n d AlanclpQr. Philndelphiu; A. J . Struzzullo, Regional Man- nger. N e w Y o r k ; Leo Herbert, Director. O f i c e oj Personnel Management; W . N . Conrurdy, Regional Munager. Seattle; S. D. McElyea, Regional Man- agrr, Denver; r). I,. Srantlebury, Regional Manager, Rushington; Roland J . Sawyer, Inlormation O f i c e r ; M . R. Wolfson, Regional Manager, 0 rn m Chicago; Forrest R. Browne, Deputy Director, Field Operations Division ; C. H . ,Woore, Regional ,21annger, Detroit; D. P. Sorando, Regional Manager, Cincinnati. p2 0 2 Standing 2nd row left to right: R. J . Madison, Regional Manager, A t l a n t a ; Grcgory J . Ahart, Deputy Director, Cltil Division; Thomus E . Sullivan, v, Director, Transportation Division; H . L. Krieger, Regional Manager, Los Angeles; H. J . Simmons, Director, O f i c e of Administrative Services; 0 CI W . H. Sheley, Regional Munuger, Dallas; John E . Thornton, Director, Fic[d Operutions Division; O y e V . Stovall, Director, lnternutional Division; 5 2 K . L. Weary. Regional Manager, Kansas C i t y ; Hurry C. Kensky, Director, Program Planning Staff; C. H . Roman, Director, Far East Branch. 2 U . S. G E N E R A L ACCOUNTING OFFICE REGIONS GAO Regional Offices and Managers Original managers and Regional audit ofires dates insrallcd Sucreeding managers and dates insfallcd Alhuqurrque, N.M . P. J. Hornn, 5-52(a). Atlanta, C.a R. J. Madison, 5-52. Billings, Mont K. R. Evrrard, 5-52(n). Boston, Mnm. 0.E. Paquin, 5-52 , C. F. Carr, 2-57 . J. Eder, 1-63. Chicago, 111, F. J. I’rlland, 5-52. . D. R. Moysry, 9-52 J. S . Shcridan, 11-53 , , H. l’rrrill, 11-54 . H. L. Krieger, 8-56 . M. R. Wolfson, 6-59. Clevrlnnd, Ohio . M. I<. Brrman, 5-52(b). Cincinnati, Ohio K. L. Weary, 1-58 D. 1’. Sorando, 1-67. Dall‘is, Tcx. , €1. 1’. Batchrldrr, 5-52 , S. Blair, Jr., 8-59 . _ . W. H. Shclcy, Jr.. 12-64. Dayton, Ohio , P. Chamm, 5-52 H. 11. Robin, 12-52 S. D. McElyea, 10-55(c). Denver, Colo El. L. Buahong, 7-52 . . A. R. Ilnrton, 10-54 S. D. McElyra, 1-63. Detroit, Mieh K. W. Krausr, 5-52 . . . C. 11. Moore, 6-57. Juneau, Alaska R. N. Earll, 6-52(d). Kansas City, M o . J. 11. IIammond, 5-52. .F. R. Brown?, 8-54 K. L. Weary, 12-66. Loa Angrles, Calif. . 11. L. Rydrr, 5-52 H. L. Krirger, 6-66. Nrw Orleans, La €1. D. Eaton, 5-52. H. C. Barton, 11-56. , W. H. Sheley, Jr., 6-63 W. 11. Ilenson, 12-64(e). Nrw York, N.Y. , . 11. B. Bell, 5-52. R. Drakert, 7-54 11. L. Krirger, 6-59. , , R. Drakert, 9 4 1 . , A. I. Strazzullo, 7-70. Philadelphin, Pa . I. S. Shcridan, 4-52., K. S. Tyrrc, 11-53 , , , . . J. 11. Rogers, Jr., 12-56. Portland, Oreg C. F. Wells, 6-52(f). Richmond, Va. . . J. P. Gliek, 5-52 C. E. Mcrrill, 1- 53 , A. J. Strazzullo, 7-65 W. 11. Ilenson, 7-70(g). Salt Lakr City, Utah . A. J. Mouton, 7-52 W. N. Conr.irdy, 7-53(;1). San Francisro, Calif ,. J. E. Thornton, 5-52. . , A. M. Clavelli, 3-5.1,. Seattlr, Wash. . G. R. Bandy, 6-52., , , W. N. Conrardy, 10-58. St. Louis, M o . , C. H. Blick, 5-52(h). St. Paul, Minn. , EI. 11. Robin, 5-52. a , 2-51. . W. F. l ~ ~ t Jr., 0. B. H y l l ~ 11-56(i). , Washington, D.C . D. L. Scantlrhury, 10-64. 2 rn r FOOTNOTES: 0 ( a ) Albuquerque, Billings, arid Salt Lake City Rrgions trrminiitrd May 1954 with atoff and rrgional arpas rrassignrd. 0 (b) Mergrd with a n d mad? .I euliollicr of Detroit Hrgion in April 1960. -0 h ( c ) Tcrminnted January 1958 arid rrlional workload except Air Forcr activitira in Dayton transfrrred to tit-wly created Cincinnati Kegion. I n April 1963 the rrmnining Day- 2 ton Office work brcame ii p a r t of Cincinnati Rrcion. (d) T r r m i n a t d and Rtaff rrlorutrd in Decemhrr 1952. Lntrr Alaska .irrli hccanw n part of Srattlc Rrgwn. z 0 (r) Mcrgrd with and madr a suboffice of Dallas Rrgion in July 1970. 2 v) (f) Mrrgrd with and made a nuboffice of Seattlc Rrgion in May 1960. ( g ) Richmond officr and ataff relocatd to N o d d k , Va., Srptemhrr 1957, and rrgion rrnnmrd Norfolk Regional Oflicc. tr 5 (h) Merged with and made a suboffice of Kansas City Rrgion in May 1960. 2 (i) Merged with a n d mad? a suboffice of Chicago Rrgion in May 1960. 0 2 CHARLES E. HUGHES 722/ 3-:A 3 The Overseas Offices of the General Accounting Office The European Branch expenditure of funds and the surveil- lance of projects for which the funds At 12:30 p.m. on January 17, 1952, were being spent. Other Senators in- the Honorable Winston Churchill, jected questions and soon there was the Prime Minister of Great Britain, com- question : menced an address of a joint meeting of the two Houses of the Congress. It Does not the Senator * * * think that as a part of the operation it might be advisable was the third time in his career that he to have the General Accounting Office, which had addressed a joint meeting of the is an arm of the Congress, by the way, estab- two Houses and on this occasion he re- lish an office abroad? counted many of the changes that had The Senator who raised that question taken place in the world-particularly went on to state that it was his belief in Europe--since the end of World War that if a small branch of the General 11. Accounting Office was established in Upon conclusion of the address, the Europe it might act as a deterrent to Senate returned to its Chamber and a misspending and careless handling of portent of historical change for the Gen- money. eral Accounting Office followed almost About the same time, Members of the immediately. House of Representatives, on the basis Senator Allen J. Ellender of Louisi- of site inquiries they had made in Eu- ana rose to describe observations made rope during the latter part of 1951, had during his tour of Europe in November become concerned with controls over 1951 concerning the magnitude of ex- the large expenditures being made in penditures for U.S. economic assistance European countries under the Mutual for Western European nations, as well Security Program (presently known as as expenditures being made by U S . military and economic assistance pro- armed forces located in Europe. During grams) as well as expenditures being his presentation, he expressed concern made there for U.S. military and civil- for the weaknesses in controls over the ian activities. ~ ~ ~~ Mr. Hughes is an assistant director of the International Division. He served as assistant director of the European Branch from January 1963 until July 1965 and was the manager of the Saigon Office, Far East Branch, from April 1967 to August 1969. He is a graduate of Denver University and is a CPA (Colorado). Mr. Hughes joined GAO in 1956. 136 OVERSEAS OFFICES OF GAD On January 23, 1952, Comptroller subcommittee chairman, Representa- General Lindsay C. Warren appeared tive Albert Thomas, that preliminary before the Subcommittee on Independ- plans had been worked out for the es- ent Offices, House Committee on Appro- tablishment of offices in Europe and priations, in connection with hearings Japan. on appropriations for 1953 for the Gen- As a consequence of the parallel in- eral Accounting Office. The Comptroller terest of Members of Congress and the General advised the subcommittee that Comptroller General, a six-member sur- during the weeks preceding the hear- vey team from the General Accounting ings he had held conversations with the Office went to Paris in March 1952 to chairman of the subcommittee concern- conduct a 3-month survey to determine ing the establishment of branch offices the best locations at which a European of the General Accounting Office abroad Branch and field offices of the General to audit and investigate expenditures Accounting Office should be established. The team consisted of a representative by the United States in foreign coun- from the Office of the General Counsel, tries. He stated that the magnitude of William L. Morrow; two representatives the expenditures being made by the from the Office of Investigations, Lee G. Government in and for the assistance Seymour and Richard G . Sinclair; and of foreign countries had been of great three accountants from the Division of concern to him and that for some time Audits, Edwin H . Morse, George he had been giving serious considera- S t a p l e s , and H e n r y R. Domers. This tion to having personnel of the General survey team conducted interviews and Accounting Office stationed abroad for visited various U S . military and civil- the purpose of checking on the expendi- ian agencies in France, Germany, Italy, tures being made. He informed the then Belgium, Great Britain, Greece, Turkey, GAO SURVEY TEAM LEAVES FOR 3-MONTH STUDY IN CONNECTION WITH ESTABLISHING A BRANCH OFFICE I N EUROPE Left to right: Lee G . Seymour and Richard G . Sinclair, O f i c e of Investigations; Pilliam L. Morrow, Associate General Counsel; and Henry R . Domers, Edwin H . Morse, and George H . Staples of the Division of Audits. 137 OVERSEAS OFFICES OF GAO Morocco, Norway, Austria, the Nether- functions of the General Accounting lands, and Trieste. Office in the European area, including In a letter of April 3, 1952, Comp- the Near East and North Africa. Sub- troller General Warren made the fol- sequently, its area of audit responsi- lowing statement to the chairman, In- bility was extended to include all of dependent Offices Subcommittee, *Sen- Africa, India, and Pakistan. ate Committee on Appropriations: From the time of its establishment in After submission of the budget estimates August 1952 until August 1955, the for 1953 to the Bureau of the Budget, I had European Branch reported directly to several conversations with the chairman of the Comptroller General. From August the Independent Offices Subcommittee of the 1955 until August 1963, it reported to House Committee on Appropriations concern- ing the establishment of branch offices of the the Assistant Comptroller General, General Accounting Office abroad to audit and Frank H . Weitzel. On August 19, 1963, investigate expenditures by the United States Comptroller General Joseph CampbeZZ in foreign countries. The magnitude of the established the International Qpera- expenditures being made by the Government tions Division-later redesignated In- in and for the assistance of foreign countries had been of great concern to me and for ternational Division-to administer some time I had been giving serious considera- and perform all work conducted by tion to having personnel of the General Ac- the General Accounting Office in for- counting Office stationed abroad for the pur- eign countries. Since that time the pose of checking on the expenditures being European Branch has been a part of made. The preliminary plans necessary for the establishment of offices abroad are being the International Division, reporting to worked out * * * the House committee re- the Director, Oye V . Stovall. port which accompanied the independent of- At about the same time that the Eu- fices appropriation bill stated that the estab- ropean Branch was established, the lishment of foreign offices by the General Ac- General Accounting Office shifted its counting Office is of utmost importance at the present time to enable the General Account- audit emphasis from centralized audits ing Office to keep check on programs abroad of expenditures to a comprehensive where so many American dollars are being ex- audit approach involving broader ex- pended. aminations of the manner in which On August 4, 1952, as a result of the agencies discharge their financial and survey, the European Branch of the US. management responsibilities. This General Accounting Office was estab- change led the European Branch into lished in Paris, France. At the same reviews of offshore procurement activi- time, a field station was opened in Lon- ties of US. agencies in Europe; mili- don, England. Subsequently, three addi- tary construction programs in Spain, tional field stations were established in France, Great Britain, West Germany, Rome, Italy, in December 1952; in and Morocco; military supply activi- Frankfurt, Germany, in January 1953; ties throughout Europe; and military and in Madrid, Spain, in May 1954. and economic assistance programs con- By Comptroller General’s Order No. ducted throughout its geographical area 2.28, dated July 22, 1952, the branch of responsibility. The wide range of was established to perform all of the congressional interest has taken audit audit, investigative, legal, and other and review teams into almost every 138 01 - I L - 0 PLL-EZP OVD 30 S331ddO SV3S2i3AO OVERSEAS OFFICES OF GAO closed in Paris and opened on July 1, had become concerned with the con- 1964, in Frankfurt where it continues trols over the large expenditures being its operation. A suboffice was estab- made for foreign assistance and for the lished in New Delhi, India, May 7, maintenance of the US. military and 1967, with the principal responsibility civilian activities overseas. of auditing U.S. economic assistance On May 28, 1952, Comptroller Gen- programs in India. eral Warren dispatched a survey team Directors of the European Branch to the Far East to inquire into U.S. ac- since its establishment in 1952 have tivities in the Far East with a view to been as follows : establishing an overseas branch in that Henry R. Domers area. The survey team was comprised of August 1952 to July 1954 J. Edward Welch, assistant general Charles M . Bailey counsel; Donald W . Bacon and Edward July 1954 to July 1956 Schuffer, Division of Audits; and Irv- Smith Blair, Jr. ing Zuckerman, Accounting Systems July 1956 to August 1959 Division. The survey team spent 10 Robert F. Brandt weeks visiting most of the major US. August 1959 to October 1961 Government installations located in Lloyd G. Smith Japan, Korea, Okinawa, Taiwan, the October 1961 to August 1963 Philippine% Guam7 Hang Kon& Illdo- Edward T . Johnson china, Indonesia, Thailand, Burma, In- August 1963 to August 1965 dia, and Pakistan. They inquired into Joseph DiGiorgio the extent of offshore procurement, in- August 1965 to July 1967 ventories of military supplies and Richard W . Gutmann equipment, employment of foreign na- July 1967 to August 1968 tionals, use of foreign currencies, ac- Frank M . Mikus (Acting) quisition and utilization of foreign August 1968 to October 1968 buildings and military bases, and ex- Joseph P . Normile penditures for housing, education, and October 1968 to present transportation of military and civilian dependents. At the time of the survey in 1952, the The Far East Branch Korean War was still in progress and The Far East Branch of the General this. together with several other factors, Accounting Office was established in led to the interim decision to defer Tokyo, Japan, on July 1, 1956, by establishment of a branch office in the Comptroller General’s Order No. 2.35, Far East. Housing for permanently dated June 14, 1956. The establishment based staff was not only scarce, but at of a Far East Branch was first consid- a premium, in the Tokyo area, the seem- ered in the spring of 1952 as a conse- ingly most logical location. Travel to quence of essentially parallel interests the Pacific areas to be serviced-Indo- of Comptroller General Warren and china, the Philippines, Korea, Okinawa, Members of the Congress who, during and others-involved greater distances the latter part of 1951 and early 1952, than were being experienced by the 140 OVERSEAS OFFICES OF GAO European Branch and was unduly time situated in and around Japan, the consuming since jet travel was not yet Ryukyu Islands, Korea, Taiwan, the an ordinary mode. Since there was a Philippines, the Marianas, Cambodia, preponderant workload outside of Laos, Vietnam, Thailand, and west as Japan, the recurring, long-term family far as and including Pakistan. In March separations were considered a deterrent 1961, the Far East Branch was given to the recruitment of staff for minimum responsibility for carrying out re- 2-year assignments. Consequently, audit views-then programmed by the Civil and investigative work in the Far East Division-of economic assistance being was initially accomplished by the use of provided to Asian countries. Up to that two- and three-man teams sent from the time, such reviews had been carried out United States on short-term, temporary by temporary duty, stateside audit duty assignments. teams of the Civil Division. Congressional interest in expendi- The Far East Branch functioned un- tures in the Far East continued. In Feb- der the Defense Division until the Inter- ruary 1956, Representative Albert national Operations Division (now the Thomas, chairman of the Subcommittee International Division) was established on Independent Offices, House Commit- on August 19, 1963, at which time it tee on Appropriations, during hearings was transferred to that Division. At relating to the 1957 appropriations for about that time, audit responsibility the General Accounting Office, discussed relating to U.S. activities in India and at some length with Comptroller Gen- Pakistan was transferred to the Euro- eral Campbell the matter of establish- pean Branch. ment of a Far East Branch. After exten- Effective August 1, 1965, the head- sive restudy of the matter following the quarters of the Far East Branch was appropriations hearings, Comptroller moved to Honolulu, Hawaii. The Tokyo General Campbell, on April 24, 1956, Office location was closed on August 25, announced that a Far East Branch 1965. At that time, the area of responsi- would be established in Tokyo on bility for the Far East Branch was ex- July 1. tended to include Hawaii (which up to At the time it was established, the that time was a part of the jurisdictional Branch was made a part of the Defense area of the San Francisco Regional Accounting and Auditing Division Office, Field Operations Division), Aus- (later redesignated the Defense Divi- tralia, and New Zealand. sion) and was given responsibility for Commencing in January 1966, con- carrying out the accounting, auditing, siderable interest was evidenced by the investigative, and legal functions of the Congress, particularly Representative Comptroller General and the General John E. Moss, chairman of the Subcom- Accounting Office in all Department of mittee on Foreign Operations and Gov- Defense activities in the Far East, ernment hformation, House Committee Southeast Asia, and the Asia subconti- on Government Operations, in the ex- nent. Its geographic area of responsi- penditures being made in Vietnam and bility embraced all military activities Southeast Asia by the United States in 141 OVERSEAS OFFICES OF GAO carrying out its economic assistance gust 1966, the General Accounting and military commitments to Vietnam. Office engaged in audit activities in a Representative Moss and others were combat area for the first time in its particularly concerned with the lack of history. (As a matter of historical in- audit effort in Vietnam at the time, in- terest, the predecessor agency of the cluding internal audits by the Depart- General Accounting Office placed audi- ment of Defense, the Department of tors in France in 1917 during World State, the Agency for International De- War I. These auditors were staff mem- velopment, and the military depart- bers of the offices of the Auditor for ments. As the result of this interest, a the War Department and the Comptrol- team from the International Division ler of the Treasury-elements at the conducted an in-country survey of time of the Treasury Department-and agency audit activities during the both became a part of the General Ac- month of March 1966. At the same time, counting Office when it was created on the International Division and the De- June 10, 1921. Not to be overlooked is fense Division surveyed audit activities the fact that the World War I overseas relating to Vietnam at the Washington audit effort was specifically requested level of the Department of Defense, the by Secretary of War, Newton D. Department of State, and the Agency Baker, in June 1917.) for International Development. The congressional interest that led to Although the Far East Branch, while the establishment of the Saigon Office located in Tokyo, had conducted re- also resulted in the opening of an office views in Vietnam of economic and in Manila in March 1967. It also was military assistance activities from 1958 made a part of the Far East Branch. until 1964 by the use of temporary duty Whereas the Saigon Office limited its teams, work was discontinued in Viet- area of operations to only Vietnam, the nam in 1964 because of (1) the ter- Manila Office has carried out field work rorist activities prevailing there at the in the Philippines, Laos, Thailand, time and (2) the extent to which work Burma, Malaysia, and Indonesia. could be performed in Vietnam that Since its establishment in July 1956, would offer prospects of practical re- the Far East Branch has conducted sults at least equal in value to other reviews of such matters as: U.S. eco- areas where the General Accounting nomic and military assistance furnished Office needed to apply its manpower. to countries in Asia and the South As a result of these surveys, the In- Pacific area, military base construction ternational Division established an of- in Vietnam and Thailand, offshore fice in Saigon in August 1966, responsi- procurement, military supply respon- ble to the Director, Far East Branch. siveness, refugee relief operations in Initially, the office was staffed by tem- Vietnam and Laos, international trade porary duty personnel but by April activities, illicit practices in Vietnam 1967 permanent duty staffing had be- concerning currency manipulations and come well established. With the estab. black-marketing of military and eco- lishment of the office in Saigon in Au- nomic assistance supplies, military 142 OVERSEAS OFFICES OF GAO equipment readiness, and the phase Robert F. Brandt down of U.S. military activities in July 1956 to July 1959 Vietnam. Joseph Lippman Directors of the Far East Branch July 1959 to July 1963 since its establishment in 1956 have Charles H . Roman been : July 1963 to present Need To Broaden the Audit Another and not less important aspect of the problem is the ascer- tainment of the economy and efficiency with which the moneys appno- priated are expended. Under existing law the only audit is for the purpose of ascertaining whether expenditures have been lawfully made within the appropriations. No one is authorized or equipped to ascertain whether the money has been spent wisely, economically and effectively. T h e auditors should be highly trained officials with permanent tenure in the Treasury Department, free of obligations to or motives of con- sideration for this or any subsequent administration, and authorized and empowered to examine into and make reports upon the methods em- ployed and the results obtained by the executive departments of the Government. Their reports should be made to the Congress and to the Secretary of the Treasury. President Woodrow Wilson. Message to Congress, December 2, 1919. 143 DAVID LODWICK AND DONALD H. FRIEDMAN 7J/ s q The Transportation Division- A Forward Look Over the Past 50 Years The Transportation Division of 1971 (Automated Transportation is a many-faceted, dynamic organiza- Audit Systems) tion whose responsibilities are as di- Assistant Director-John M . Lox- verse as was its evolutionary progres- ton sion in the role GAO has played since These groups have a professional, tech- 1921 as the taxpayers’ watchdog. Those nical, and clerical work force of over responsibilities continue to be diverse, 700 which concentrates its talents in particularly in light of the changing the areas of auditing, reviewing, verify- atmosphere of GAO’s position in Gov- ing, negotiating, adjudicating, account- ernment and its increasingly broad- ing, and advising on, with, and about scoped operation. the transportation and traffic manage- Transportation Division operations ment of things and people for the U.S. under the direction of Thomas E . Sul- Government. livan are carried out by four basic op- This all-encompassing function of the erating units: Division was not the case in 1922 when Office of the Associate Director the Transportation Division was estab- (Transportation and Traffic lished for the sole purpose of auditing and settling claims and transportation Management Reviews) accounts of the United States, only Associate Director-Henry W. where these claims were involved with Connor, Jr. the accounts of Government disbursing Office of the Assistant Director officers. The original staff was activated (Audits) with an overall force of 86 employees Assistant Director-Ralph E. who were mostly former members of West the Transportation Rate B0ard.l Office of the Assistant Director _____ ‘ T h i s was a group of expert transportation auditors (Staff and Support Services) originally assembled bv various Government agencies Assistant Director-Paul T . Smith to audit disbursements for Government transportation. They came to GAO in 1921 when the Office was es- Office of the Assistant Director tablished and were assigned to several divisions. Mr. Lodwick is assistant to the director and Mr. Friedman is a management auditor in the Transportation Division. 144 TRANSPORTATION DIVISION In today’s Transportation Division transportation payment audit, the effi- the technical analysis and examination ciency and effectiveness of the audit of payments for transportation services staff has progressed notably over the furnished the Government utilize ad- years since its inception. Some his- vanced techniques, automated systems, torical background helps to illustrate and progressive management tools to this evolution. determine their validity and propriety From the very beginning of the audit and make the most advanced and all- in GAO, it was evident that numerous inclusive transportation audit in the overcharges on transportation were be- United States. ing paid by the disbursing officers of the This sophisticated audit is a far cry Government. As a result, in November from the situation which existed in 1948 1922, the Comptroller General directed when the Comptroller General reestab- that all transportation bills for account lished the present Transportation Divi- of the United States be submitted to sion after a 22-year period as part of GAO for examination prior to payment. the Claims Division.? The environment This requirement continued in effect, at that time was more one of a static with various exceptions for certain Gov- operation involved with checking ernment agencies, until the passage of freight and passenger tariffs, division the Transportation Act of 1940, which sheets, and land-grant rate data than provided that payment for transporta- that of the flexible machine it is today. tion for the United States by any com- For instance, the Systems Unit in the mon carrier subject to the Interstate past year installed an automated sys- Commerce Act or the Civil Aeronautics tem for the technical audit of a large Act [now the Federal Aviation Act] segment-domestic, military, house- be made upon presentation of the bills, hold goods shipments-of the review of prior to audit by the General Ac- Government freight shipments. They counting Office; but the right was re- have also done extensive research into served to the United States to deduct the feasibility of auditing payments €or the amount of any overpayment sub- sequently found. A short time later in air passenger services by computer and 1941 and 1942, further legislation was have completed the basic design for enacted which relieved certifying and such a system. disbursing officers of any responsibility In addition to the advanced mechani- for transportation overpayments related cal techniques being applied to the to transportation rates and freight clas- sifications. As a result the GAO became 2 In 1926. the Claims and Transportation Divisions were consolidated into an enlarged Claims Division. responsible for the sole audit of the 3 Land.grant rates were reductions from the published enormous volume of freight and pas- tariff rates enjoyed by the Government on account of promotional grants of land made to the railroads many senger transportation payments made decades ago. The total of all land-grant deductions. including voluntary equalization of rates by competing by the various departments and agen- railroads. from the time of land grants to June 30, 1943, cies of the Government and the recovery was estimated to he $580 million. This Government 8av- ing was several times the value of the land grants at of excess payments to carriers. the time they were made. Application of 1and.grant rates In addition to its audit, reaudit, and was discontinued on shipments after Oct. 1, 1946 (49 U.S.C. 65). claims settlement functions, the Divi- 145 TRANSPORTATION DIVISION sion actively engaged in a program de- or withdrawn by the carriers’ repre- signed to better acquaint Government sentatives during these conferences and agencies, carrier organizations, and car- many questions were answered so that riers of all types with mutual problems carriers’ claims could be placed in line pertaining to Government transporta- for settlement. tion. Conferences were held almost con- In correlation with the described ac- stantly by representatives of the Trans- tivities, participation of employees in portation Division with representatives training programs, and continuing re- of freight and passenger rail, motor, finement of the audit systems, the water, and air carriers and with rom- Division completed the reaudit of trans- mittees and representatives of their na- portation payments related to World tional and international organizations. War I1 activities, the occupation of These conferences resulted in the elim- Japan and Europe, and went on to meet ination of many inconsistencies and the audit demands brought about by disputes as to tariff applications and the the Korean emergency and the present correctness of rates and charges: a military activities in Vietnam and other decrease in the number of protests: an Southeast Asian countries. increase of refunds by carriers: arid a The following tables show the trans- resultant reduction of the cost of collect- portation audit accomplishments ing overpayments. Many carriers re- through various phases from 1922 up vised and more closely coordinated to June 30, 1970, including details of their internal accounting and billing the reaudit program which was com- procedures so that much unnecessary pleted December 31, 1961. correspondence and development effort In 1959, under the leadership of was avoided. During the 10-year period. John P. Abbadessa, the Transportation 1948-58. 67.551 claims were canceled Division was reorganized. One of the TRANSPORTATION DIVISION MANAGEMENT AND EXECUTIVE-SKILLS DEVELOPMENT SEMINAR, SEPTEMBER 1957 Seated from the l e f t : Eunice F. Hair. Division Training Ofirer: Francis Forti. Chief, Special Reports Section : Charles L. Brodman, Deputy Director; Harrell 0.Hoagland, Director: James A . McDonndI. Associate Director: Hillis K . Wilson. Chief, Freight Subdivision; and Grace E. Allen. Chief. Service Subdivision. 146 TRANSPORTATION DlVlSlON Bills of Lading and Transportation Requests Examined 1922-70 1948-70 Reaudit program 194841 Number. . . . . . . . . . . . . . . . . . . . . . 335 million. . . . . 222 million. . . . . 60 million. Amount paid.. . . . . . . . . . . . . . . . . $47 billion.. . . . . $36 billion.. . . . . $8.1 billion. Notices of overcharges issued. . . . . 4.5 million . . . 2.27 million. . . . . 786 thousand. Amount of overcharges.. . . . . . . . . $955 million. . . . $500 million. . . . $266 million. Total collections. . . . . . $923 million . . . $603 million. . . . $230 million. Transportation Claims Settled During Fiscal Years 1922-70 Number Amount claimed Amount allowed Amount disallowed 2,134,240 ’ $641 million . . . . . . . . . . . . . . $416.5 million . . . . . . . . . . $224.5 million. 1 Includes SI64 million for military air transport movements audited before payment during fiscal years 1964-70. results was an increased emphasis on tablished. This group makes traffic the Division’s responsibilities for re- management studies and prepares re- viewing, evaluating, and reporting on ports to the Congress and Government the traffic management activities of agencies on means of saving money in Government agencies. A Survey connection with the Government’s role Branch, today known as the Office of the as a shipper. Associate Director, Transportation and Many instances of traffic manage- Traffic Management Reviews, was es- ment deficiencies have been reported Transportation Division Leadership, 1948 to Present Director: Harrell 0. Hoagland. . . . . . . . . . . . . . . . . . . . . . . . . April 194SJanuary 1959. Deputy Director: CharlesBrodman. . . . . . . . . . . . . . . . . . . . . . . . . . April 1957-February 1958. Director: John P. Abbadessa.. . . . . . . . . . . . . . . . . . . . . . . . January 1959-December 1959. Associate Director: RobeitFloyd . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 1959-May 1960. Director: Oye V . Stovall. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 1959-May 1962. Associate Director: Thomas E. Sullivan. . . . . . . . . . . . . . . . . . . July 1960-May 1962. Director: Thomas E. Sullivan.. . . . . . . . . . . . . . . . . . . . . May 1962 t o present. Deputy Directors: John H. Cooper.. . . . . . . . . . . . . . . . . . . . . . . . . . July 1 9 6 2 - M ~ c h1962. Joseph P. Normile.. . . . . . . . . . . . . . . . . . . . . March 1964-September 1968. Fred J . Shojer. . . . . . . . . . . . . . . . . . . . . . . . September 1968 to present. 147 TRANSPORTATlON DlVlSfON to the Congress from 1960 through cies to the end that they will in time be 1970. Savings aggregating millions of self-sufficient to the point of handling dollars have resulted from this work. their transportation transactions from The more significant reports dealt with the initial arrangements through the opportunities for savings in the move- final audit determinations as to the ment of Department of Defense house- correctness of the charges paid for the hold goods, consolidation of small service. Eventually, the Transportation shipments of the entire Government, Division expects the refinements it rec- and improved selection of air carriers ommends to be effectively incorpor- by the Department of Defense. The Division also reports on numer- ated into the Government agencies' ous traffic management matters directly management systems so that the agen- to the Government agencies concerned. cies will perform their traffic manage- The trend is to recommend better traf- ment functions in the most efficient, ef- fic management practices in the agen- fective, and economical ways. The Claims Division “A11 claims and demands whatever by the Government of the United States or against it, and all accounts whatever in which the Government of the United States is concerned, either as debtor or creditor, shall be settled and adjusted in the Gkneral Accounting Ofice.” This provision has been a part of David Neumann, 1931-45 the statutory authority of the General A . Banks Thomas, 1945-57 Accounting Office and its predecessor Lawrence V . Denney, 1957-68 agencies since 1817. Charles M . Howard, 1968-70 Another duty, required by law since James M. Campbell, 1970- 1894, has been to superintend the re- The Review has no information at covery of debts due the United States. hand about the first Chief of the Claims These two broad requirements, mod- Division, W. S. Dewhirst. ified from time to time over the years, Stuart B. Tulloss became Chief of have formed the primary legal basis this division on July 1,1926, and served for the work of the Claims Division. until June 1928 when he was made This division has existed as a separate Chief of Investigations. organizational unit in the GAO since Information about other heads of 1923. this division, drawn from the columns On July 1, 1926, the Claims and of The Watchdog, follows. Transportation Divisions were con- solidated into an enlarged Claims Divi- David Neumann sion. Transportation audits and claims David Neumann became Chief of the work were a responsibility of the Claims Claims Division in 1931 and served Division for 22 years. Then, in 1948, there until his death in November 1945. Comptroller General Warren reestab- Mr. Newmann was a native of Wash- lished a separate Transportation ington. Born in 1883, he attended the Division. National University of Law from 1908 Chiefs or directors of the Claims to 1911, receiving the degrees of Division since its establishment in 1923 bachelor of laws and master of laws. have been : He entered the Federal service as a W . S. Dewhirst, 1923-26 clerk in the Washington Navy Yard in Stuart B. Tdloss, 1926-28 1901. From 1905 to 1919, he served W. S. Dewhirst (acting), 1928-31 in the Departments of Labor and 149 CLAIMS DIVISION the Interior, including several years Mr. Thomas was a native of North as Chief of the Division of Accounts, Carolina. His early education was ob- Geological Survey. He was appointed tained at Lexington, S.C., and at Chief Law Clerk in the Office of the Roanoke College, Salem, Va. He re- Comptroller of the Treasury in 1919 ceived the degree of LL.B. from Na- and was transferred with that Oaffice tional University Law School, to the GAO at the time of its estab- Washington, D.C., in June 1921. Mr. lishment in 1921. There he served as Thomas first entered the Federal service Attorney and later became Chief of the in the Bureau of Engraving and Print- Personnel and Audit Divisions before ing, Treasury Department, in 1917. being named as Chief of the Claims During the First World War he enlisted Division. in the Navy in 1918 and upon his honorable discharge in 1919, he re- A. Banks Thomas turned to the Treasury Department, serving brief periods in the Bureau A . Banks Thomas, Assistant to the of Engraving and Printing and the Bu- Comptroller General, was appointed Chief, Claims Division, in November reau of War Risk Insurance before his 1945 to fill the vacancy created by the transfer on March 17, 1919, to the death of David Neumann. He served Office of the Auditor for the War as head of this division until his retire- Department. ment in February 1957. Upon creation of the General Ac- CLAIMS DIVISION OFFICIALS, NOVEMBEA 1954 Left to right (seated): Edward T. Johnson, Deputy Director; A. Banks Thomas, Director; Paul 1.Eaton, Chief. Debt Branch. Standing: Arthur J . Schofer, Chief, Debt Reoiew Section; Charles M . Howard, Chief, Military Branch; Chnrlie Monroe, Chief, Liaison Procedures and Internal Review S t a f f ; Ward S . Benjamin, Chief, Payment Claims Branch. 150 CLAIMS DlVlSlON counting Office on July 1, 1921, Mr. and had just been detailed as Special Thomas was transferred to the new Of- Claims Examiner when he transferred fice. In the General Accounting Office, to the Office of the General Counsel in Mr. Thomas rendered service in the 1942. War Department Division and the His progress in the 0 5 c e of the Gen- Treasury Department Division, and eral Counsel covered the positions of when the Claims Division was organized Assistant Attorney, Associate Attorney, in 1923 he became an employee of that Attorney, Senior Attorney, Attorney- division. While in the Claims Division, Adviser, and in December 1951 he was Mr. Thomas held the positions of appointed Assistant General Counsel Claims Reviewer, Law Clerk and At- with duties as legal adviser to the Di- torney, and served as Assistant Chief rector of Audits. and Chief of the old Civil Claims Sec- With the impending retirement of tion. On February 16, 1927, he was its Director, Mr. Denney returned to appointed Assistant Chief of the Divi- Claims Division in November 1956 on sion. He continued in that capacity a special assignment preparatory to as- until his appointment on May 1, 1943, suming the responsibilities of this as Mr. Warren’s Assistant, to take the position. place of Frank L. Yates, who had Mr. Denney retired from Government been appointed Assistant Comptroller service in September 1968. General. Charles M. Howard Lawrence V. Denney Charles M . Howard succeeded Law- Comptroller General Joseph C a m p rence V . Denney in December 1968 and bell appointed Lawrence V . Denney in served as Director, Claims Division, April 1957 as Director of the Claims until February 1970 when he retired Division, to succeed A . Banks Thomas. after 36 years and 7 months of Federal Mr. Denney was born in Washington, service. D.C., on April 5, 1910, and attended Mr. Howard came to the GAO in July District of Columbia elementary and 1936 and was assigned to the Account- high schools. He received his LL.B. ing and Bookkeeping Division. He was degree in 1934, and his B.C.S. degree transferred to the Claims Division in in 1938, from Columbus University in December 1941 as a Claims Examiner Washington. and progressed from that position to Mr. Denney started his career in the head of the Division. He served with private industry in 1928. His Federal distinction in all positions to which career commenced in 1935 with his ap- assigned. pointment in the Audit Division of the He was born in Raeford, N.C., re- GAO. From Audit he transferred ceived a B.S. degree from Davidson to Claims in 1940 where he served as College, N.C., and an LL.B. degree Claims Examiner, Senior Claims Ex- from Georgetown University Law aminer, Principal Claims Examiner School. 151 CLAIMS DIVISION James M. Campbell 1947 to November 1948 when he served as a legal adviser to the Chief of the James M . Campbell, Attorney-Ad- Bureau of Supplies and Accounts, De- viser on the staff of the General Counsel, partment of the Navy. was selected in April 1970 as Director He is a graduate of George Wash- of the Claims Division by Comptroller ington University and received his law General Elmer B. Staats, succeeding degree from that institution in 1939. He Charles M . Howard. is a member of the District of Columbia Mr. Campbell joined the Office in Bar and is admitted to practice before 1941 where he has served continuously the District Court of the United States except €or military service during for the District of Columbia, the U.S. World War I1 when he was on active Court of Appeals for the District of duty with the US. Navy as a Reserve Columbia, and the Supreme Court of officer and during the period January the United States. 152 GAO Officials and Employees Who Have Served Under Five Comptrollers General June 1971 According to the records of the Ofice of Personnel Manage- ment, 82 GAO employees on the rolls in June 1971 have the distinction of having served under all five Comptrollers General-MeCarl, Brown, Warren, Campbell, and Staats. Office of the Comptroller General Robert F. Keller Assistant Comptroller General Office of t h e General Counsel John T. Burns Associate General Counsel Carl P. Friend Assistant General Counsel Matthew J. Nevins Assistant General Counsel Clarence G. Phillip Deputy Assistant General Counsel Thomas J. Gallagher Senior Attorney Paul A. Gattie Milton Jekofsky Daniel W. Martin Francis A. Meunier Abraham Robinson Lloyd H. Volkart Office of Policy and Special Studies Edward T. Johnson Associate Director Civil Division Max A. Neuivirth Associate Director Jack Balaban James R. Ceranton Robert W. Ford Helen D. Garden John A, J. Johnson Morris R. Jones Donald M. Mutzabaugh EMPLOYEES W H O SERVED UNDER FJVE COMPTROLLERS GENERAL Defense Division Charles M. Bailey Director Harold H. Rubin Associate Director Loretta L. Dewey Robert H. Kelley Curtis U. MacDonald John J. Mohler Joe Moore Linnon C. Tredway International Division Alvin J. Jarvis Transportation Division Alice C . Barnes Callie M. Callicott Marie F. Conrad Eleanor A. Darlington John A. Defino William A. Edwards Annie S. Eighmie Mattie R. Hardison Mary Jane Harrison Eunice B. Kunz Margaret A. McDonald Alfred A. Owens John A. Thuma Vincent E. Tilton Irene S. Wilson Field Operations Division Washington Headquarters John E. Thornton Director Atknta Richard J. Madison Regional Manager Frank D. Blackistone Vincent I. Peters Edwin Y. Simmons Boston Philip C. Carroll 154 EMPLOYEES WHO SERVED U N D E R FIVE COMPTROLLERS GENERAL Chicago Myer R. Wolfson Regional Manager Denver J. Philip Horan Assistant Regional Manager Lauden C. Maness Merrill M. Manion Detroit E. Kenneth Heitkamp George I. Murphy Seattle Harry 0. C. Ball Washington Charles A. Byrne Willard G. Estridge Henry A. Haardt Albert T. Meleski Eugene B. Ould Charles E. Wolfe Victor E. Young Claims Division Philip Benenson Eleanor Bowser Richard H. Clark Stephen J. Havas Grace I. Hayes Jane F. Martin Lynn C. Messick Harold S. Novinger Ted S. Potter Harold J. Shahan Louis Weiner Dorothy K. Witt , Office of Personnel Management Carl C. Berger Data Processing Center Merlin Sunde Office of Administrative Services Herschel J. Simmons Director Daniel Cox Clarence J. Taylor 155 423-774 0 - 7 1 - 11 The Watchdog Reports Started in 1942 and now in its 29th year of publication, The Watchdog is the monthly newspaper of the GAO Employees Association published by and for GAO employees. Since 1948,publication of The Watchdog has been the responsibility of Carl C. Berger, Employee Relations Oficer, Ofice of Personnel Management. Over the years, this estimable paper has faithfully recorded, as it should, much information about GAO oficials and employees. In this section, the Review reprints selected excerpts from The Watchdog about the comings and goings of some of the people who have made and Zeft their mark on the General Accounting Ofice. (Original date of publication is shown at beginning of each item.) A. Banks Thomas Washington University Law School, November 1945 and a member of the Michigan Bar. A. Banks Thomas, Assistant to the Comptroller General, has been named T. Coleman Andrews Chief of the Claims Division to fill the October 1946 vacancy created by the recent death of M r . Andrews is a certified public ac- David Neumann. countant and the senior partner of T. Coleman Andrews & Co., certified pub- William 1. Ellis lic accountants, whose principal office is November 1945 in Richmond, Va. He is a member of To fill the vacancy in Mr. Thomas’ the American Institute of Accountants position as Assistant to the Comptroller and has served on its council and execu- General, Mr. Warren appointed William tive committee. L. Ellis of the Office of the General After completing his formal educa- Counsel. Mr. Ellis has been with the tion, Mr. Andrews held positions with General Accounting Office since 1935, four business companies in Richmond, having seen service in the Claims Di- Va. From that he entered the U.S. Army vision as well as the General Counsel’s about the middle of September, 1918, O5ce. He is a graduate of Hillsdale and served until December 9, 1918, College, Michigan, and of The George when he was honorably discharged. 156 THE WATCHDOG REPORTS From December 10, 1918, to Octo- Africa until the assignment was com- ber 15, 1922, Mr. Andrews was with pleted, near the end of 1943, when he the Richmond office of the American returned to Washington and reported Audit Co., now F. W. Lafrentz & Co., to the Marine Corps for return to ac- certified public accountants. Ilpon tive duty. After the necessary training, severing his connection with that com- he was sent to the Pacific area in April pany on October 15,1922, Mr. Andrews 1944, where he served as G 2 intelli- established his own business under the gence officer, on the general staff of the name of the T. Coleman Andrews Sr Co., Fourth Marine Aircraft Wing. He left at Richmond. the Pacific area on May 6, 1945, and In January 1931, Mr. Andrews ac- upon his return to Washington he cepted an invitation to serve as auditor agreed to accept, at the request of the of public accounts of Virginia and took Comptroller General of the United temporary leave from his firm to com- States, the position of Director of Cor- plete the fiscal reorganization of the poration Audits in the General Ac- commonwealth. He completed this as- counting Office upon his release by the signment and returned to his firm on Marine Corps. He entered upon his May 1, 1933. duties as Director of Corporation In June 1938, he accepted an invita- Audits on July 19, 1935, and is now tion to serve as comptroller of the city serving in that position. of Richmond to reorganize the city’s department of finance. He completed Gary Campbell this assignment and returned to his firm October 1916 on July 1,1940. Gary Campbell, Chief of the Postal When the Second World War emer- Accounts Division, Asheville, N.C., is gency arose, at the request of the one of the younger topflight executives American Institute of Accountants for who has won his spurs and advance- volunteers to go to Washington and as- ment in the General Accounting Office. sist in accounting and related matters, Mr. Campbell was born in Washing- Mr. Andrews volunteered for this serv- ton, D.C., February 16, 1901. After at- ice and spent a large part of 1942 in the tending the public schools in Washing- Office of the Under Secretary of War and in the Office of the Under Secre- ton, he entered Washington College of tary of the Navy on a part-time basis. Law, graduating with the degree of At the end of 1942 he applied for a LL.B. After serving 3 years in the US. commission in the U.S. Marine Corps Army, upon his discharge, Mr. Camp- and was commissioned as a captain on hell entered the General Accounting Of- January 6, 1943. Shortly after being fice on August 8,1922, as a transcriber ordered to active duty in the Marine in the old War Department Division. Corps he was ordered to inactive duty From this beginning he progressed at the request of the Lend-Lease Ad- through the various grades until he was ministration to act as chief accountant appointed Chief of the Postal Accounts of the North African Economic Board, Division. in which position he served in North Recently, while in Washington, Mr. 157 THE WATCHDOG REPORTS Campbell was requested to tell his own ferred to the old Military Division as a story for The Watchdog. Searcher and Transcriber in the I have served as Chief of Special Audit Walker- Johnson Building, and in the Unit, Chief of Cotton Price Adjustment Sec- fall of that same year was detailed to the tion, Chief of Soil Conservation Section (all audit of the First World War Bonus in the Audit Division), and Assistant Chief payments. In the spring of 1925, he was of Postal Accounts Division. I was also in transferred to the newly formed Indian charge of the first field preaudit group at Lexington, Ky., started October 1, 1934. The Tribal Claims Section of the old Civil establishment of other field stations for pre- Division (later absorbed by the Audit audit of payments by the Agricultural Adjust- Division) and helped develop the pro- ment Administration was an outgrowth of the cedures and policies governing the establishment of that office. While Chief of preparation and submission of reports Cotton Price Adjustment Section, I estab- lished 10 offices for the purpose of making to the Court of Claims on that segment payments of the 1935 cotton price adjustment of work, and later became Assistant program. When the new AAA act was passed, Chief of that section. In May of 1929, providing for appropriation for “Use of agri- he was assigned as Assistant Chief of cultural land resources and domestic allot- the Veterans’ Bureau Audit Section, ment act,” I was in charge of establishing offices in 30 States in the country for the pur- then located in the Arlington Building, pose of preauditing payments under that act. and continued in that capacity until the The offices grew to include preaudit payments summer of 1930, when the work was under the Sugar Act of 1937 and to make materially curtailed, and was reassigned parity payments. After war was declared and as Assistant Chief of the Indian Tribal when it was decided to decentralize the work in Washington, I was placed in charge of es- Claims Section, which then became a tablishing Army Audit Branches, first at Chi- part of the Claims Division. Mr. Durst cago on an experimental basis, and after served in that capacity until the sum- success there, of three additional branches at mer of 1933, when he became Acting New York, Los Angeles, and Atlanta. After Chief of the Section, and on May 15, the establishment of these offices, I was trans- ferred to the position I now hold. 1934, was assigned as Chief of the old Records Division, which in 1940 was Vernon R. Durst absorbed by the Reconciliation and November 1946 Clearance Division, of which he has Vernon R . Durst, Chief of the Recon- been the continuous head. ciliation and Clearance Division, en- Mr. Durst received his degree in law tered the Army in January 1918, served from Southeastern University in June 14 months overseas in World War I, and 1928 and was admitted to the Bar of was discharged in May 1919. He served the Supreme Court of the District of one term as principal of an elementary Columbia and the Court of Appeals school after the war and entered the (now US. District Courts) the same Railway Mail Service in December year. 1920, from which service he transferred to the General Accounting Office on Frank L. Yates December 1946 July 1, 1923, as a Grade 2 Clerk in the old Transportation Division. In the At 10:30 o’clock on the morning of spring of 1924, Mr. Durst was trans- May 1,1943, in the floral decked offices 158 THE WATCHDOG REPORTS of the Comptroller General, when Frank In 1927 the position of Attorney- L. Yates was sworn in as Assistant Conferee was formally established, and Comptroller General of the United Mr. Yates was appointed to one of the States, there was a definite and gratify- two Attorney-Conferee positions in this ing demonstration that the Government office, which position he held until April does offer a career service and that top- 30 of 1943, when he became Assistant flight positions are not always filled by Comptroller General. political choices. He was sworn in by Prior to his coming to the General Judge Fred M. Vinson, then of the Accounting Office he was a high school U.S. Court of Appeals for the District teacher in his home State of West Vir- of Columbia. His predecessor, Judge ginia, after graduating from Shepherd R. N . Elliott, was also present, and College. During World I he was an many of his friends gathered in the Army lieutenant. Home from the war, room to participate in the ceremony. he returned to school, obtained a degree Mr. Yates entered the Office of the from West Virginia University, and Auditor for the War Department at the then headed for Washington. Here he close of the First World War, at the worked days as a Government clerk, time when he was but 25 years of a g e - while at nights he ambitiously studied having just previously received his hon- law at The George Washington orable discharge from the Army. His lhiversity. first position was that of a Claims Ex- He has won the loyalty and admira- aminer and shortly afterward he was tion of the employees of the General promoted to a Claims Reviewer, being Accounting Office by his ability, powers one of the three Claims Reviewers then of arbitration, and capacity for hard employed in the Claims Division of this work, plus a sense of humor and a soci- office. In 1921, when the General Ac- able personality. counting Office was established, Mr. Yates transferred to this office and was John F. Feeney soon thereafter promoted to a position December 1946 as Law Clerk, and assigned to the State John F. Feeney, Executive Officer of and Other Departments Division of the the General Accounting Office, is one of newly organized General Accounting Uncle Sam's topflight executives who Office. In 1924, after traveling to Pan- has earned his advancement and ama and Cuba for the Office, he prestige in the General Accounting arranged a transfer to the Federal Trade Office. Commission, but at that time the World To keep pace with the enormous War I provision which prohibited expenditures, the General Account- transferring from one agency to another ing Office has been expanded into the at an increase was still in effect, and the greatest accounting and auditing orga- Comptroller General disapproved the nization in the world. The duties and transfer. The Comptroller General, how- the responsibilities have multiplied ever, recognizing outstanding ability, apace. The Executive Officer is charged promoted and transferred Mr. Yates to with keeping the organization on an his office. even keel and functioning smoothly. 159 THE WATCHDOG REPORTS And so, when the Hon. Dudley W. those of Assistant Chief, Audit Divi- Bagley, Executive Officer, retired last sion; Assistant Chief of the Planning July, the Comptroller General found and Budget Section, Office of the Comp- within his own organization, a man troller General; and Chief of the Postal who by experience and training was Accounts Division. With that division well fitted to step into the exacting he went to Asheville, N.C., in Decem- position of Executive Officer, succeed- ber 1942. ing Mr. Bagley. He was recalled to Washington on Mr. Feeney’s rise in the Government November 1, 1943, to take the position service may be attributed to hard work, in the Comptroller General’s office perseverance in many difficult tasks, and which he held until his death. fidelity to the trusts imposed in him. Stephen E. lves John C. Nevitt April 1948 March 1947 Stephen B. Zwes, Director of the Cor- John C. Nevitt, Assistant to the poration Audits Division, is twice a war Comptroller General, died at Garfield veteran. He served in the First World Hospital on Friday, February 21,1947, War as a Field Artillery lieutenant and following a heart attack suffered at his in the Second as a colonel of the Gen- office on Wednesday afternoon at 4:45 eral Staff Corps. p.m. At the time of his death, Mr. Nevitt Although born in St. Louis, Mo., Mr. was in charge of the Office of Adminis- Ives grew up in Boston, Mass. He at- trative Planning of the General Ac- tended Harvard University, leaving in counting Office. He was 47 years old. 1917 following graduation to join the Entering the Government service at Army. Trained and sent overseas, he the age of 16 in 1916 with the Geologi- was wounded in action and presented cal Survey, Interior Department, Mr. with the Purple Heart. Nevitt remained there until his enlist- Soon after his discharge, the Direc- ment in the US. Cavalry in 1918. Fol- tor went to work in the auditing de- lowing his discharge from the Infantry partment of a large oil company. With Officers’ Training Sohool at Camp Mac- the oil men, he got his first taste of Arthur, Waco, Tex., in December 1918, accounting and later he joined a large he returned to the Geological Survey public accounting firm in New York. and rose to the post of Administrative Within a few years, he was selected Assistant and Chief of the Section of to open a branch of the New York Accounts. While with the Interior De- firm in Atlanta, Gas-an office he di- partment he was loaned to the Domini- rected until early in 1943 when he was can Republic to serve as Office Man- again called on for service in the Army. ager and Accountant of the Dominican Entering the Army as a major, he Topographic Survey. was in charge of all accounting for In 1927 Mr. Nevitt transferred to price adjustment activities of the Army the General Accounting Office as a Unit under the Renegotiation Act. Promoted Head in the Audit Division. He served to colonel, he later became a member that office in many capacities including of the Staff Corps and member of the 160 THE WATCHDOG REPORTS War Department Price Adjustment moted to Chief of the Records Division Board. Prior to leaving the service, he and on July 16,1928, he was promoted was presented with the Legion of Merit to Chief Clerk, the position he still award. holds. Immediately after separation from the service, Mr. Ives joined the GAO as Stuart B. Tulloss Assistant Director of the Corporation November 1949 Audits Division and was promoted to Director on October 1, 1947, upon the Comptroller General Lindsay C . War- resignation of T. Coleman Andrews. ren today announced the retirement of Mr. Ives is a CPA of Georgia and a Stuart B. Tulloss, Chief of Investiga- member of the American Institute of tions, General Accounting Office, to be Accountants, the Virginia Society of effective December 31, 1949. In an- Public Accountants and the Georgia nouncing the retirement Mr. Warren ex- Society of CPAs, of which he is a past pressed appreciation of the valuable president. service rendered by .Mr. Tulloss and his devotion to the public interest. Reed F. Martin Mr. Tulloss recently completed 40 May 1948 years of outstanding public service. He came to the GAO when that office was “Chief” Martin was born on a farm created in 1921, after 4 years’ service near Kingwood, W.Va., and taught in with the General Land Office, Depart- the country school at Preston County, ment of Interior, and 9 years with the W.Va. Soon, however, it was discovered Auditor for the War Department. that teaching was the wrong business, He was assigned to duty as an at- and he was shipped to Ohio Northern torney until 1926 when his special University, Ada, Ohio, where after 3 qualifications in Government claims years he graduated with a bachelor of work were recognized by his appoint- commercial science degree. ment as the Chief of the Claims Divi- Washington was the next stop. He sion. Two years later, in 1928, he was entered the Bureau of Census, June 7, appointed Chief of Investigations and 1910, and attended National University since then has held that position. Law School in the evenings. He left the law school with a law degree and Cen- To replace the retiring official, Mr. Warren has named William L. Ellis, sus to join the Government Printing Of- now an Assistant to the Comptroller fice. After that he transferred to the General. War Department as an Auditor and spent a year and a half in England and France during World War I for that Robert F. Keller M ~ 1 Y9.w department. In 1921 he came to the GAO when Comptroller General Lindsay C. it was created under the Budget and Warren announced the appointment of Accounting Act. His first position was Robert F. Keller, of his office, as As- Chief of Section, War Department Di- sistant to the Comptroller General to vision. September 1, 1926, he was pro- succeed W . L. Ellis, present Chief of 161 THE WATCHDOG REPORTS GAO OFFICIALS, NOVEMBER 1949 Left to right (seated): Lyle E . Fisher, General Counsel; William L. Ellis, Assistant to the Comptroller General; Frank H. Weitzel, Assistant to the Comptroller General; Lindsay C. Wurren, Comptroller General; Frank L. Yates, Assistant Comptroller General; E. R. Ballinger, Assistant to the Comptroller General; John F. Feeney, Executive Officer. Standing: Thomas A. Flynn, Director of Personnel: J . Darlington Denit, Chief, Accounting and Bookkeeping Division; E. W . Bell, Chief, Audit Division; A. Banks Thomas, Chief, Claims Division; Walter F. Frese, Chief, Accounting Systems Division; Gary Campbell, Chief, Postal Accounts Division; Harrell 0. Hoagland, Chief, Transportation Division; Vernon R. Durst, Chief, Reconciliation and Clearance Division; Reed F . Martin, Chief Clerk; Stuart B. Tulloss, Chief of Investigations. Stephen B. lues, Director, Corporation Audits Division, was not present when picture was taken. Investigations of the General Account- transactions of the Post Office Depart- ing Office. Charles E. Johnson has ment and the Postal Service. been appointed to the position of Leg- Mr. Campbell first came to the Gen- islative Attorney formerly occupied by eral Accounting Office in 1922 and suc- Mr. Keller. cessively was a clerk, auditor reviewer, chief of section, Assistant Chief of the Gary Campbell Audit Division, and Chief, Postal Ac- February 1951 counts Division. Gary Campbell, former Chief of the Postal Accounts Division which has Division of Audits been transferred to the Post Office De- January 1952 partment, is back in Washington from Comptroller General Lindsay C. Wur- Asheville, N.C., to head the new Postal ren has announced the abolishment of Audit Division. the Audit Division, the Corporation Au- The Postal Audit Division will audit dits Division, the Postal Audit Divi- the accounts and examine the financial sion, and the Reconciliation and Clear- 162 THE WATCHDOG REPORTS ance Division of the General Account- Central Zone, Francis J . Pelland; South ing Office, and the transfer of the func- Central Zone, Herbert B. Gehrke; West- tions of these divisions to a new divi- ern Zone, John E . Thornton (acting). sion designated as the Division of Audits. Vernon R. Durst In announcing the reorganization the March 1952 Comptroller General said: “This is a Comptroller General Lindsay C. transfer and realignment of the func- Warren announced the retirement, for tions performed by four major divi- reasons of health, of Vernon R. Durst, sions of the General Accounting Office Assistant Director, Division of Audits, employing over 3400 people in a single in the General Accounting Office on division. The consolidation will achieve February 29. Mr. Warren spoke in the real economies in that it will enable a highest terms of Mr. Durst’s fine record far better utilization of our auditing of public service and said we can ill personnel and will cut out duplication afford to lose such an outstanding man. of administration. It will make for a A veteran of World War I, Mr. Durst better auditing job all around.” came with the General Accounting Of- Ted B. Westfall has been appointed fice in 1923. He served in supervisory Director of Audits to head the new di- capacities from 1925 on and was ad- vision. E . W . Bell, Stephen B. Ives, mitted to the Bar of the District of Gary Campbell, and lrwin S. Decker Columbia in 1928. He was appointed have been appointed Associate Direc- Chief of Records Division in 1934 and tors. Assistants to the Director of of the successor, Reconciliation and Audits are Ellsworth H . Morse, Jr., and Clearance Division, in 1940. Upon con- Harry I . Trainor. Assistant Directors solidation last month of all audit func- of Audits are: Charles M. Bailey, Ver- tions of the General Accounting Office non R . Durst, John C. Fenton, Curties in a new Division of Audits, he was A. Hurley, Roy S. Lindgren, Robert L. appointed Assistant Director of Audits. Long, Harold S. Morse, William A. Newman, Jr., Ben H. Puckett, Adolph Ted E. Westfall T . Samuelson and Frederic H . Smith. Robert L. Long Appointed to be Chiefs of Branches May 1952 ‘ are: Army Audit Branch, W . A . Will- ingham; Navy Audit Branch, Arthur Comptroller General Lindsay C.War- R. Wycoff; Air Force Audit Branch, ren announced today the resignation of John B. Cummins; Civil Audit Branch, Ted B. Westfall, Director of Audits of J. DeWitt Johnson; Records Service the General Accounting Office, effec- Branch, P . D. Fallon; Depository AC- tive April 26. Mr. Westfall is leaving counts Branch, L. A . Jones; Examina- the Government to accept a position in tion and Settlement Branch, J . Hess. private industry. Appointed Chiefs of Zones: North- “Mr. Westfall is one of the most out- east Zone, Lloyd W . Wineberg; South- standing Government officials I have east Zone, Richard J . Madison; Great known in my 27 years in Washington,” Lakes Zone, Kurt W . Krause; North Mr. Warren said. “His leaving is a real 163 THE WATCHDOG REPORTS Assistant Comptroller General Frank L . Yutes 1 center) bids goodbye to Ted Westfall, tuho left G A O to go with Grace Lines in May 1952. Robert L. Long ( r i g h t ) replaced him as Director o f Audits. loss to the General Accounting Office His first major assignment in the and to the public service.” General Accounting Office was as a Mr. Warren cited this as another supervisor in the Corporation Audits example of the inability of the Govern- Division on the audit of the Commodity ment service to compete with private Credit Corporation, one of the largest ‘ industry for top executives. Mr. West- and most complex Government corpora- fall, who is 32 years old, was second- tions. Later Mr. Long participated in place winner in the competition recently the direction of a survey of all proce- held by the Junior Chamber of Com- dures, auditing and other, followed in merce for the 1951Arthur s. Flemming the General Accounting Office in Wash- Award as one of the outstanding young ington and throughout the United men in Government. States. The survey resulted in many Mr. Warren announced that Robert economies and improvements in the L. Long, now an Assistant Director of procedures followed in the Office. Audits in the General Accounting Office, In December 1950 he was appointed would be appointed to succeed Mr. by the Comptroller General as Assistant Westfall. Chief of the Postal Audit Division. In 164 THE WATCHDOG REPORTS this capacity he assisted in planning the sel’s office; James E . Flynn, William F. first comprehensive audit of an entire Smith, C . F. Garber, and H. G.Monroe major Government department-the from the Office of Investigations; and Post Office Department. Since Novem- Later C . Stacey, H. Nivelle Colthurst, ber 1951 Mr. Long was engaged in Joseph Lippman, Robert S. Rosen- developing a program of survey and berger, Joseph W . Baker, and Arthur audit of the procurement activities of Ramo from the Division of Audits. the military departments in the United States and overseas. Frank H. Weitzel He started to work for the General October 1953 Accounting Office in 1945 after having Frank H. Weitzel, Assistant to the served as a captain in the Air Force. Comptroller General, has been ap- Most of his previous working experi- pointed to the position of Assistant ence was in public accounting in the Comptroller General of the United State of Indiana. States, vacant since the death of Frank L. Yates. European Branch Comptroller General Lindsay C. War- August 1952 ren said : “In ability, character, and in- The Comptroller General, on July 22, tegrity Frank Weitzel is the peer of any established an office of the General Ac- man I know. His selection will be most counting Office in Europe with head- pleasing to the Congress and to the quarters in Paris, France. The new Government at large. I am grateful to office. designated as the U.S. General the President. He will never make a Accounting Office-European Branch, better appointment.” will perform all of the audit, investiga- Mr. Weitzel has been employed in the tive. legal, and other functions of the General Accounting Office for more GAO, which are to be accomplished in thaa 25 years, since 1942 in the Office the European area, including the Near of the Comptroller General. He was East and North Africa. appointed in 1945 by the Comptroller The European Branch is headed by a General as his assistant in charge of the Director who is responsible directly to legislative activities of the General AG- the Comptroller General. Henry R. counting Office and interagency rela- Domers, formerly of the Division of tionships. He has represented the Comp- Audits, has been named to this position. trnlier General in the Joint Accounting Mr. Domers has been with the GAO for Pzogram of the General Accounting 17 years and has served the Office in Ofhe, the Bureau of the Budget, and many capacities. James C . Thomson, the Treasury Department for the im- presently Investigator-in-Charge at Nor- provement of Government accounting. folk, Va., will head the Investigations He also participated in the develop- staff under Mr. Domers. ment of basic legislation affecting Gov- Other assignments to the staff of the ernment accounting and auditing, in- European Branch include Orville J . cluding the Government corporation Montgomery, Arthur G. Eaton, and Control Act of 1945, the Budget and Sylvia Kender from the General Coun- Accounting Procedures Act of 1950, the 165 THE WATCHDOG REPORTS TRAINING CLASS FOR NEW GAO ACCOUNTANTS AND AUDITORS, 1952 Front row, f r o m left: Harry J . Trainor, Division of Audits Staff Manager; Irwin S. Decker, Associate Director of Audits: Charles M. Bailey, Assistant Director for Field Operations; Robert L. Long, Director of Audits; and Edward .W.Bell and Gary Campbell, Associate Directors o f Audits. The Review stafi was unable to obtain ready identification of all members of this class. Those who have been identified beginning with second row from l e f t are: John E. Milgate, Max Hirschhorn, Hans Loejfler, P a d E. Reising, Robert Meisner, John A . Stanley, Joseph P. Rother, Harry L . Shepherd, Jr., Robert G. Rothwell, Joseph C. Mangan, Raymond Kowalski, Benjamin F. Herr, Abram H. Shank, Robert Iffert, Roger Houle, Jack L. Mertz, Joel Cohen, Willium A . Mecca, Jr., Raymond A . Beaudet, Joseph J . Kline, Arnie L . Calhoun, Jr., Nicholas Carbone, Irwin M. Golick, Chester S. Daniels, Samuel A . Pisano, Benjamin H. Friedman, Joseph J. Kobylski, Stanley S. Warren, John F . Utley, William J . Freesland, Stuart Addison, Charles D. Hylander, Norma J. Sterkx, Francis C. Chlan, Paul G. Hock, Frank M. Zappacosta, Villiam R . Todd, Jack L. Birkholtz, John S. Emery, James A. Dufl. Post Office Department Financial Con- Planning Staff trol Act of 1950, and the Federal Prop- Office of Administrative Services erty and Administrative Services Act of October 1953 1949. Comptroller General Lindsay C. War- Mr. Weitzel is a native of the District ren has announced the completion of of Columbia. He was educated in the the entire reorganization of the General District public schools and graduated Accounting OfEce started 2 years ago. from Western High School. The George He has abolished the existing Office of Washington University conferred upon Administrative Planning and the Office him the degrees of bachelor of arts with of the Executive Officer. He has set up highest distinction in 1931 and bachelor a planning staff, headed by Robert F. of laws with distinction in 1935. He is a Brandt, with a total of seven employees, member of the bar of the U.S. Court of and has created an Office of Administra- Appeals for the District of Columbia tive Services, headed by John I;. Feeney, and the Supreme Court of the United who will have charge of budget, finance, States. and administrative services. The esti- 166 THE WATCHDOG REPORTS mated savings will be $60,000 per Since Mr. Warren took office the Gen- annum. eral Accounting Office has not only paid This reorganization rounds out a pro- its way, but has made a substantial con- gram which has resulted in reducing the tribution to the Treasury each year. size of the GAO from its peak of 14,904 Collections from 1941 to date total $915 to 6,100. million, most of which had been illeg- Also appointed were Allen N . Hum- ally or otherwise improperly paid out. phrey, Chief, Records Management and This amount is twice the cost of running Services Branch; and Herschel Sim- the Office during the same period, and mons, Chief, Budget and Finance little, if any, of the amount collected Branch. would ever have been recovered except for the work of the General Accounting Lindsay C. Warren Office. Prior to 1941, collections were May 1954 negligible. Mr. Warren is proud of the April 30th has come and gone. And as collection record, but he feels that of it passed, it took from our midst our even greater importance is the work the Comptroller General. For on that day, Office is doing to prevent illegal or Lindsay C. Warren bid farewell to his improvident use of funds without wait- Washington friends and colleagues in ing to collect back what has been order to enjoy his retirement and a well- paid out illegally, and to improve earned rest. Mr. Warren served the accounting and auditing throughout the GAO for 13% years and his dynamic Government. influence will be felt for many years to During his service as Comptroller come. General, Mr. Warren has revolutionized Mr. Warren accepted the position of the procedures and the approach of the Comptroller General in 1940 the fourth General Accounting Office as the audit- time it was offered to him by President ing and investigative agency of the Roosevelt although renominated for his Congress. He completed a thorough- ninth successive term as a Representa- going reorganization of the Ofice, re- tive in Congress from the First District sulting in decentralizing its operations, of North Carolina. streamlining its practices, and reducing Under his administration, the Gen- its personnel from a peak of 14,904. in eral Accounting Office completed the April 1946 to the present figure of audit of billions of dollars of war ex- 5.880. This reduction was accomplished penditures, including those of the Man- in spite of increased work, red tape, and hattan Engineering District, which administrative headaches which, Mr. produced the first atomic bombs. Mr. Warren has testified, discourage most Warren is proud that this tremendous agency heads who want to reduce the job has been done without a breath of size of their staffs. scandal touching the work of the Gen- Mr. Warren has assumed the leader- eral Accounting Office, which has often ship in Government-wide accounting had to point out illegal expenditures and and auditing developments which have wasteful practices in Government made the past decade one of the most operations. significant in Federal financial history. 167 THE WATCHDOG REPORTS He has pulled no punches in express- Cannon and Albert Thomas, had this ing his views and has greatly raised’the to say: stature of the General Accounting Office The committee wishes to express its sin- in the eyes of the Congress, the execu- cere appreciation of the splendid service tive branch, and the public. His color- which is being performed by this agency un- ful appearance and forthright language der the able leadership of Comptroller Gen- eral Lindsay Warren and his efficient staff. have many times in the past decade Lindsay Warren is performing a di6cult attracted attention at congressional task with courage and ability, and the Amer- hearings. ican people are fortunate in having such a Mr. Warren has participated in many capable leader to keep check on Federal ex- strenuous battles during his adminis- penditures and see to it that appropriations are expended in accordance with law. The tration of the General Accounting Of- committee extends to Comptroller General fice. Perhaps the climactic one occurred Lindsay Warren its deep appreciation for the in 1950 when the Congress was consid- fine job he is doing and wishes him many, ering recommendations of the first many more useful years of service as Comp- Hoover Commission which would have troller General. greatly weakened the General Account- In 1953, under Representatives John ing Office by transferring vital func- Taber and John Phillips, the committee tions of the Office to the executive said: branch. Mr. Warren’s positive stand The committee extends its sincere apprecia- saved the General Accounting Office tion to Comptroller General Warren and his and placed it in a position to render able staff for the splendid work that it is do- even greater service as the audit, ac- ing in all phases of Federal auditing and ac- counting. This year, more than ever before, counting, and investigative arm of the the General Accounting Office has been of Congress. real assistance to the committee in its ex- Although always a strong Democrat amination of budget estimates for the fiscal in politics, Mr. Warren left an active year 1954. The GAO staff has made numerous political career behind when he stepped investigations, reports, and recommendations to the committee. A large number of trained into the General Accounting Office. He personnel have been engaged constantly on has administered the Office in a com- this work. The committee appreciates this pletely nonpartisan and nonpolitical splendid cooperation. fashion. His administration has been Mr. Warren took office just as the guided by these rules: “First, we must General Accounting Office was begin- always strive to be right; second, we ning to feel the impact of the tremen- must be fair; then, we must go down dously increased Government expendi- the middle of the road and let the chips tures due to the defense program. His fall where they will.” first step in modernizing and decen- His success in applying this doctrine tralizing the General Accounting Office is shown by the reports of two succeed- was to establish the War Contract Proj- ing Appropriations Committees, one ect Audit, which sent General Account- under Democratic and the other under ing Office auditors into plants and docu- Republican control. In 1952, the House ment centers all over the country to Appropriations Committee, under the audit cost-plus contracts for war nate- leadership of Representatives Clarence rials. T H E WATCHDOG REPORTS In 1945 he had a leading part in the gress against legislative provisions or enactment of the Government Corpora- proposals which would result in aban- tion Control Act. donment or weakening of the congres- Immediately after World War I1 sional power of the purse. His ended, Mr. Warren announced that ac- recommendations have been responsibIe counting improvement was the No. 1 for the elimination of many such pro- project of the General Accounting Of- visions which would grant plenary ad- fice. He invited the Secretary of the ministrative control over expenditures. Treasury and the Director of the Bu- In a recent letter to every Member reau of the Budget to unite with him of Congress, Mr. Warren said: in a joint program for improving ac- It has been a source of great satisfaction counting throughout the Government. to me to see that Congress, particularly in Begun in 1947, this program is carried the last eight years. has strongly supported on in cooperation with all Government the Office. Our reports showing illegal ex- penditures and wasteful practices have always agencies. been upheld after hearings by committees of Mr. Warren was a prime mover in Congress. In our work we have never pulled the Budget and Accounting Procedures a punch regardless of who might be affected. Act of 1950, which wrote the Joint Ac- * * b * * counting Program into law. President The General Accounting Office is your Truman, in signing this act, called it agency. To be worth its salt it must continue “the most important legislation enacted always to be independent, nonpartisan, and nonpolitical. To be effective, it must always by the Congress in the budget and ac- have your wholehearted support and your counting field since the Budget and vigilant safeguarding of its functions and Accounting Act of 1921.” powers. I have no doubt that it will. Mr. Warren also spearheaded the enactment of the Post Office Depart- Karney A. Brasfield ment Financial Control Act of 1950, December 1954 which transferred administrative ac- The increasing tempo of Government- counting functions from the General wide agency accounting systems devel- Accounting Office to the Post Office opment prompted a recent reorganiza- Department and opened the way to tion in the Accounting Systems Divi- modernized accounting and auditing in sion. The reorganization is designed, in that department. part, to meet the greater demands being Mr. Warren has constantly stressed made upon the Director, Walter F. the status of the General Accounting Frese, because o f external relationships Office as the audit agency of the Con- with top level agency executives and the gress in the legislative branch. He has many private organizations interested emphasized the reporting functions of in improved financial management in his office. He has conceived it as his the Federal Government. mission as Comptrol!er General to ‘see The new designation of Karney A . that the will of Congress is enforced Brasfield as Deputy Director recognizes in the spending by executive agencies the increased problems of overall direc- of funds appropriated for public pur- tion and coordination of staff efforts poses. Repeatedly he has warned Con- brought about by the rapid strides being 169 THE WATCHDOG REPORTS made in agency accounting improve- a recess appointment since Decem- ment programs. ber 14, 1954. Mr. Brasfield, a graduate of Wash- The vacancy of the office was brought ington University, St. Louis, and a cer- about by the retirement of Lindsay C. tified public accountant, is particularly Warren on April 30, 1954. Mr. Warren well qualified to fill this important post. served for over 13 years. During the period 1931-45, Mr. Bras- Mr. Campbell was born in New York field figured prominently in the leader- City and received his education there. ship under which a modern accounting He is a certified public accountant in and financial reporting system for the New York and Connecticut. His home multibillion dollar family of corpora- is in Cooperstown, N.Y. tions making up the Farm Credit Ad- The Comptroller General of the ministration was developed. He became United States is appointed for a 15-year Comptroller of FCA in 1938. In 1945, term and can be removed only by Con- he assisted in overcoming the tremen- gress. He is not eligible for reappoint- dous accounting and financial problems ment. facing the War Food Administration The first Comptroller General of the and the Commodity Credit Corporation United States was J. Raymond McCarZ resulting from wartime operations in- who served for 15 years from June 29, volving billions of dollars of transac- 1921, to June 30,1936. He was followed tions. by Richard N . Elliott (acting) July 1, From 1947 to 1952, he directed the 1936, to April 10, 1939. Senator Fred accounting and financial activities of H. Brown took office as Comptroller on the Commodity Credit Corporation and April 11, 1939, and resigned on June the Production and Marketing Admin- istration, USDA. From 1952 to date, he 19, 1940, because of ill health. Mr. El- served first as Assistant Chief, later, as liott again became Acting Comptroller Associate Director for Principles and General until October 31, 1940, when Standards, and now as Deputy Director, Lindsay C. Warren became Comptrol- Accounting Systems Division, General ler. Frank H . Weitzel, present Assistant Accounting Office. Comptroller General, served as Acting Joseph Campbell Comptroller until Mr. Campbell took March 1955 over on December 14, 1954. The appointment of Joseph Campbell Ellsworth H. Morse, Jr. as Comptroller General of the United Robert L. Long States has been confirmed by the Sen- January 19.56 ate. Mr. Campbell, a former member of Comptroller General Joseph Camp- the Atomic Energy Commission, on bell announced on December 22 the leave from his position as vice presi- appointment of Ellsworth H. Morse, Jr., dent and treasurer of Columbia Univer- to be Director of Audits of the General sity, was first nominated by President Accounting Office. Mr. Morse succeeds Eisenhower in November 1954 and has Robert L. Long, who resigned effective been serving as Comptroller General on December 30. 170 THE WATCHDOG REPORTS Mr. Long left the Government for Assistant to the Director in July 1950. personal reasons and expects to enter When the Division of Audits was private work. Mr. Campbell said “Mr. organized in January 1952, Mr. Morse Long is an outstanding Government was named as Assistant to the Director official and his leaving will be a real loss of Audits. He has served as an Associ- to both the General Accounting Office ate Director of Audits since November and the public service.” 1952. Mr. Long joined the GAO in 1945 as a member of the former Corporation Edward W. Bell Audits Division, after serving as a cap- February 1956 tain in the Air Force. Prior to his mili- The retirement on January 31 of tary service he was engaged in public Edward W . Bell, Associate Director of accounting work in Indiana. In 1950, Audits, marked the close of a most Mr. Long participated in the direction distinguished Government career. From of a survey of the GAO functions and a cataloger of mammal specimens at the procedures under the guidance of Ted U S . National Museum, E. W. rose to B. Westfall. the high position of Chief of the former In December 1950 Mr. Long was Audit Division and later became an appointed by the Comptroller General Associate Director in the Division of as Assistant Chief of the Postal Audit Audits. Division. On April 26, 1952, he re- As a young man, Mr. Bell started his placed Mr. Westfall as the Director of public service in 1907 cataloging rnam- Audits. mals. In April 1918 he went to Paris Mr. Morse, a native of Ohio, is a on an assignment by the Auditor of the graduate of Oberlin College and the War Department, one of the predeces- University of Michigan School of Busi- sor organizations of the General Ac- ness Administration. He is a certified accounting Officer. Mr. Bell is a charter public accountant of the State of Mich- member of the GAO and became an igan. Mr. Morse was associated with ccofficia17’in 1925 when, at the age of the public accounting firm of Arthur 33, he was appointed Assistant Chief of Andersen & Co. in Detroit from 1937 to the Check Accounting Division. The 1942. He served in the US. Naval Re- next year he was made Chief of that serve from 1942 to 1946 and was dis- division and, in 1926, became Assistant charged as a lieutenant commander. Chief of the newly formed Audit Divi- During his military service he was en- sion, serving in that capacity for 7 gaged primarily on audit and analysis years under two chiefs of division. work leading to the renegotiation of In 1933, at the age of 41, Mr. Bell Navy Department war contracts. was appointed Chief of the Audit Divi- Mr. Morse has been in the GAO since sion, and he directed the activities of July 1946 when he joined the staff of that division until 1952. When the the former Corporation Audits Divi- Division of Audits was organized in sion. In that organization he became January 1952, Mr. Bell was named as an Assistant Director in December an Associate Director of Audits. 1949, and was designated as Technical On the occasion of Mr. Bell’s retire- 423-114 0 - 7 1 - 1 2 171 THE WATCHDOG REPORTS ment the Comptroller General wrote the operative accounting systems work and following letter to him: auditing functions” of the Office. It is with deep humility that I set about Mr. Campbell announced the follow- writing this letter on the occasion of your ing personnel designations to each retirement from Government service on Jan- group: uary 31, 1956. On that day you will have completed forty- Accounting and Auditing Policy six years, five months and six days of tireless, Staff: Wdter F. Frese, Director; Steve unselfish effort in behalf of your Country. M. Brown, Raymond Einhorn, Associ- Few men have such a record. The contribu- ate Directors; Robert L. Rasor, Fred- tion you have made in the establishment and eric H. Smith, Joseph M. Sullivan, As- operation of the United States General Ac- counting Oflice, in itself, is an accomplish- sistant Directors. ment in which your family, your friends and Civil Accounting and Auditing Divi- you can take the greatest pride. sion : Ellsworth H . Morse, Jr., Director; Your associates will miss your counsel and Simmons B. Savage, Jr., Deputy Direc- guidance. I am certain that those you leave tor; Lee 0. Fencken, John C. Fenton, behind here will strive to preserve the prin- ciples of our Office which you have so ably Assistants to the Director; Lloyd A. represented. Nelson, Adolph T . Samuelson, Associ- With warmest personal regards and very ate Directors; Philip Charam, Lowell best wishes, I am B. Collins, John R. Delmore, James H. Sincerely, Flynn, L. Kermit Gerhardt, Sidney Joseph Campbell. Jervis, Roy S. Lindgren, Otis D. Mc- Mr. Bell was honored at a ceremony Dowell, Alvin R. Rosin, George H. Sta- held on January 30 in the GAO Au- ples, Philip C. Ward, Assistant Direc- ditorium. Ellsworth H. Morse, Jr., Di- tors; John E. Feissner, 1. Dew. John- rector of Audits, presided for the son, Branch Chiefs. occasion and presented several gifts Defense Accounting and Auditing from friends of Mr. Bell. Division ; Lawrence 1. Powers, Direc- At the presentation ceremony Mr. tor; William A. Newman, Jr., Deputy Morse stated, “AS the Director of Director; Hassell B. Bell, Robert F. Audits, I salute Mr. Bell’s past contribu- tions to the work of the General Ac- Brandc, Curties A. Hurley, Max A. Neu- counting Office and wish for him a wirth, Ben H. Puckett, Harold H . Ru- happy and successful period of bin, William J. Wilson, Irving Zucker- retirement.” man, Assistant Directors; John B. Cum- Reorganization of Accounting mins, W . A. Willingham, Arthur R. and Auditing Divisions Wycotf, Branch Chiefs. April 1956 Field Operations Division: J. E. Comptroller General Joseph Cnmp- Thornton, Director. bell announced recently that the func- Karney A. Brasfield tions previously performed by the Ac- August 1956 counting Systems Division and the Karney A. Brasfieid, Assistant to the Division of Audits in the GAO will be Comptroller General, leaves early in the responsibility of newly established September to accept a position with a groups which “will carry out the co- national public accounting firm ac- 172 THE WATCHDOG REPORTS AUDIT BRANCH CONFERENCE, WASHINGTON, D.C., MAY 14-18, 1956 L e f t to right (seated): John B. Cummins, Chief, Air Force Audit Branch; William A. Willingham, Chief, Army Audit Branch; William A . Newman, Jr., Deputy Director, Defense Accounting and Auditing Division ; Lawrence J. Powers, Director, Defense Accounting and Auditing Division; Max A. Neuwirth, Assistant Director, Defense Accounting and Auditing Division; Arthur R. Wycoff, Chief, Navy Audit Branch; John D e r . Johnson, Chief, Civil Audit Branch; and James C. Smith, Chief, Marine Corps Audit Branch. L e f t to right (standing) : William W . Shumaker, Accountant, Accounting Systems Division; Sidney W . Godwyn, Assistant Chief, Army Audit Branch; Robert E '. Ford, Staff, Defense Accounting and Auditing Division; and John E. Gahagan, Assistant Chief, Air Force Audit Branch. cording to an announcement by the and Auditing Policy Staff. Mr. Morse Comptroller General, Joseph Campbell. succeeds Walter F . Frese who is on a Mr. Brasfield a certified public ac- year's leave of absence as Visiting countant, is leaving the Government Professor at the Harvard Graduate after more than 25 years, having ren- School of Business Administration. dered outstanding service successively Mr. Morse is a graduate of Oberlin as Comptroller of the Farm Credit Ad- College and the University of Michigan ministration, Controller of the Com- School of Business Administration and modity Credit Corporation and Deputy is a CPA of the State of Michigan. Director of the Accounting Systems He has been associated with the GAO Division before becoming Assistant to since 1946 and leaves the position of the Comptroller General in July 1955. Director, CAAD, to take his new post. Ellsworth H. Morse, Jr. Adolph T. Samuelson August 1956 November 1956 Joseph CumpbelZ, Comptroller Gen- The Comptroller General of the eral of the United States, has announced United States announced the appoint- the appointment of Elkworth H . Morse, ment of AdoZph T . Sumuelson to be Di- Jr., to be Director of the Accounting rector, CAAD. Mr. Samuelson succeeds 173 THE WATCHDOG REPORTS Ellsworth H. Morse, Jr., who recently of Cost Accountants, Society of Louisi- was designated Director, Accounting ana Certified Public Accountants, the and Auditing Policy Staff. American Accounting Association and Mr. Samuelson is a certified public other professional organizations. accountant of Illinois and for 9 years was associated with the Chicago office Robert H. Slaughter of the public accounting firm of Price, January 1957 Waterhouse & Co. He served with the US. Navy in World War I1 attaining Robert H. Slaughter of the AAPS the rank of Commander. retired from the Office on December 31. He attended Walton School of Com- He thus closed a noteworthy career of merce, Loyola University and North- over 42 years of Federal service, almost western University. He has been on the 34 years with the GAO. staff of the GAO since 1946. Born in Lynchburg, Va., he received his schooling there and started his busi- Leo Herbert ness career there in 1909. November 1956 He began his Federal service with the Reclamation Service, Interior, at Joseph Campbell, Comptroller Gen- Yuma, Ariz. In 1923, Mr. Slaughter eral, announced the appointment of Dr. transferred to the GAO as an account- Leo Herbert of Baton Rouge, La., to ant. He also served as an investigator the newly created position of Director and Assistant Chief of Investigations. of the Office of Staff Management. As He joined the ASD in 1949 and after Director, Dr. Herbert will be respon- the establishment of the AAPS served sible for recruiting, training, assign- as a member of that organization until ing, and developing the professional his retirement. accounting staff of the Washington and Mr. Slaughter was a member of many regional offices. important committees concerned with Born in Douglas, Ariz., Dr. Herbert accounting and participated in the plan- received his bachelor’s degree in ac- ning and installation of accounting sys- counting at Brigham Young University. tems in a number of Government He received his master’s degree and offices. doctor of philosophy degree in business administration from Louisiana State John Dew. Johnson University and has been professor of February 1957 accounting at Louisiana State Univer- sity, Brigham Young University, and John D e w . Johnson, one of the best Louisiana Polytechnic Institute. known staff members of the Office, re- Prior to coming to the GAO as a tired January 31 as Chief, Civil Audit consultant on staff management, Dr. Branch, CAAD-a position he had held Herbert was Assistant State Auditor for since 1952. Retirement ceremonies, at- Louisiana. He is a certified public ac- tended by approximately 300, were held countant of Louisiana and Utah and is on his last day of service. a member of the American Institute of S. B. Savage, Jr., Deputy Director, Accountants, the National Association CAAD, presented a letter of apprecia- 174 THE WATCHDOG REPORTS tion from the Comptroller General, to- Civil Claims from the Auditor for the gether with a retirement pin. George M. War Department. He was made Chief Sullivan, Administrative Officer, Field of Civil Section in 1926 and Assistant Operations Division, a long time as- Chief, Claims Division, in 1927. In sociate of Mr. Johnson, delivered the re- 1935 he was appointed Principal Assist- tirement address. Mrs. Martha Johnson, ant Chief, Claims, and served in this wife of the retiree, was present as guest position until 1943, when he was ap- of honor. pointed as Special Assistant, and later, Mr. Johnson entered Federal service Assistant to the Comptroller General. in 1910 as a rodman with the Interior In 1945 Mr. Thomas became Chief Department, later served in the Army (now Director) , Claims, and held this overseas as a member of the famous position until his retirement. Rainbow Division, and upon discharge He attended schools in his native became an Auditor for War in the Of- State of North Carolina, South Caro- fice of the Comptroller of the Treasury, lina, and Roanoke College, Salem, Va. the predecessor of the GAO. Appointed He received a degree of LL.B. in 1922 a Clerk in the latter office upon its crea- from the National University Law tion in 1921, he rose to Principal Assist- School. ant to the Chief of the Audit Division. When the Audit Division was combined Charles L. Brodman with other divisions in 1952 to form the March 1958 Division of Audits he was appointed to On February 28, Charles L. Brod- head the Civil Audit Branch. man, Deputy Director, Transportation, Mr. Johnson was graduated from the retired from Government service after National School of Law and is a mem- a continuous tour of duty which began ber of the Bar of Virginia. He served the as a Class 1 Tariff Clerk in the Office Government far almost 42 years. of the Auditor for State and Other De- partments on April 16, 1918. A. Banks Thomas From there, Mr. Brodman trans- February 1957 ferred to the US. General Accounting Comptroller General Joseph Cump- Office when it was organized on July 1, bell announced that A . Banks Thomas, 1921, and served first in the old Trans- Director, Claims, will retire from the portation Division and then Claims un- GAO on February 28, after 39 years of til 1940 when he was assigned to the Government service. Office of General Counsel since he had Mr. Thomas started his Federal in the meantime attended law school career in 1917 with the Bureau of En- and had been admitted to practice as graving and Printing. His career was an attorney. In 1948 the Comptroller interrupted when he enlisted in Naval General reestablished a Transporta- Aviation in 1918 and went on active tion Division and Mr. Brodman was duty until January 1919. appointed Assistant Chief of Division, Shortly after the present GAO was and continued to serve in that division created in 1921, he was assigned to until he retired. THE WATCHDOG REPORTS During his almost 40 years of serv- nounced the designation of Charles M. ice, Mr. Brodman acquired the reputa- Bailey as Associate Director of the tion of being one of the most able DAAD. transportation technicians in the Gov- Mr. Bailey has had broad experience ernment; one whose counsel, and ad- in the accounting and auditing activi- vice was sought by practically all ties of the GAO since joining it in 1935. Government agencies and carriers of Prior to his employment in the Office, all types and one whose views never he was an accountant with a Montana once deviated from a self-imposed pipe line company and cashier for a standard of protecting always the best Colorado finance corporation. He at- interests of the Government while deal- tended the Park‘s School of Business ing fairly with those of different views Administration in Colorado and the and positions. University of Denver. He performed As a technician well versed in the extensive work in the area of War application to transportation rates and Contract Audits for the GAO and, in related matters of legal decisions and 1944, became Chief Auditor for GAO’s statutes his views were accorded great Western Zone with offices in Los weight not only within our Office, but Angeles. by the Court of Claims and the Depart- In 1951 he became Associate Chief ment of Justice who often were grateful of Audit Division and, in 1952, was for the assistance which he rendered by promoted to Assistant Director of reason of his technical-legal experience. Audits, Field Operations. In July of 1954, he was appointed Director of Charles M. Bailey GAO’s European Branch with head- August 1958 quarters in Paris. During his 2-year Joseph Campbell, Comptroller Gen- tour of duty in this foreign post, he eral of the United States, has an- was also U S . Representative on the In- O f i c e o f Staff Management Awards Ceremony, July 1958. From left: Norma Sterkx; Leo Herbert, Director; Harley R . Climpson; H . Edward Breen ; and Elizabeth Metzger. 176 THE WATCHDOG REPORTS ternational Board of Auditors for In- Septemher 8 while attending a meet- frastructure Accounts. In July of 1956, ing. He was 57 years old. he was assigned to DAAD as Assistant Mr. McDonnell, an authority in Director. transportation, had been associated with the GAO for more than 25 years. Edwin Lyle Fisher Before coming to the GAO, he worked September 1958 with the Treasury Department and was Joseph Campbell, Comptroller Gen- also engaged in the general practice of eral of the United States, today an- civil, criminal, and probate law in the nounced the disability retirement of District of Columbia, an associate of Edwin L. Fisher, General Counsel of the the late William J. Leahy. General Accounting Office. Mr. Fisher During World War I, he served in retired August 31, after 30 years of the U S . Navy and for many years service with the Government. was a member of American Legion Mr. Fisher is a native of Ottumwa, Post No. 11. Iowa. However, he has resided in the Washington area since 1938. He grad- Robert F. Keller uated from National University Law J. E. Welch School in 1933. He also attended October 1958 George Washington University. He is a The designation of Robert F. Keller member of the Bar of the District of as General Counsel of the GAO has been Columbia and has been admitted to announced by Joseph Campbell, Comp- practice before the U S . Court of Ap- troller General of the United States. peals for the District of Columbia, and The Comptroller General also an- the Supreme Court of the United States. nounced the designation of J. E . Welch After employment with the American as Deputy General Counsel. Battle Monuments Commission, the Mr. Keller was employed by the Department of Commerce, and the De- GAO in 1935. He served in positions partment of Justice, Mr. Fisher joined of increasing responsibility in the the staff of the GAO in 1936. He served Claims Division until 1942. From 1M2 in positions of increasing responsibil- to 1945 he was on active duty with the ity-in the Claims Division and the Navy, serving as Assistant to the Offi- cer-in-Charge of the Navy Purchasing General Counsel’s Office, and in 1942 Office, San Francisco, Calif., and later he was appointed Assistant General as General Counsel of the OfEce. Counsel. In 1947 Mr. Fisher was ap- Upon his return from Navy service, pointed General Counsel, and he has Mr. Keller was appointed as an attor- served continuously since that time. ney in the Office of the Comptroller Gen- eral and in 1950 was made an Assistant James A. McDonnell to the Comptroller General in charge September 1958 of congressional liaison activities. James A . “Mickey” McDonnell, As- Since December 1954 he has assisted sociate Director, Transportation Divi- the Comptroller General in the over- sion, died of a heart attack on all management of the GAO. 177 THE WATCHDOG REPORTS Mr. Keller attended George Wash- General Accounting Office. He com- ington University and the Washington menced Government service as a clerk College of Law (now American Uni- iI; the Office of the Auditor for the versity j , receiving an LL.B. degree Navy Department ( a predecessor in 1937; and Benjamin Franklin Uni- agency of the General Accounting Of- versity, receiving a B.C.S. degree in fice), and rose through the ranks to 1952. He was admitted to the Bar of become head of one of our most im- the District of Columbia in 1936. portant divisions. His services during Mr. Welch has also been with GAO the entire period have been outstand- since 1935. He has served in several ing.” divisions of the Office and has been in Mr. Hoagland is a native of Worth- the Office of the General Counsel since ington, Ind., but has resided in the 1942. Mr. Welch was appointed As- Washington area since 1918. He at- sistant General Counsel in 1949 and As- tended Berea College; George Wash- sociate General Counsel in 1956. ington University Law School ; South- Mr. Welch is a graduate of the Uni- eastern University, where he received versity of Maryland and Georgetown his LL.B. degree in 1924; and Ben- University Law School. He was admit- jamin Franklin University. ted to the Bar of the District of CO- Mr. Hoagland joined the staff of the lumbia in 1938. Auditor for the Navy Department in 1918. He served in positions of increas- Harrell 0. Hoagland ing responsibility, and in 1925 he was January 1959 appointed an attorney in the General An overflow crowd jammed the GAO Counsel’s Office of the General Ac- Auditorium to pay tribute to Harrell counting Office. In 1939 he was ap- 0. Hoagland, Director, Transportation pointed Assistant General Counsel, and Division, who retired on December 31 in 1948 he was appointed Director of after 41 years of Government service. the Transportation Division and has John F. Feeney, Administrative Of- served in that position since then. ficer, OAS, presided at the ceremonies As Director of the Transportation and introduced Frank H . Weitzel, As- Division, Mr. Hoagland has been re- sistant Comptroller General, who spoke sponsible for the audit of all payments for Joseph Campbell, the Comptroller for transportation made by the Federal General, who could not be present, and Government, both passenger and Robert F. Keller, General Counsel, who freight. He is well known in Govern- also lauded Mr. Hoagland. Other offi- ment circles and in the transportation cials who were present were: E. H. industry. Morse, Jr., Director, Accounting and Auditing Policy Staff, and John E . John P. Abbadessa Thornton, Director, Field Operations January 1959 Division. Mr. Campbell, in announcing Mr. Joseph Campbell, Comptroller Gen- Hoagland’s retirement, said: “Mr. eral of the United States, announced Hoagland is a true career official of the the designation of John P . Abbadessa 178 T H E WATCHDOG REPORTS as Director of the Transportation Divi- He was in public accounting prac- sion. tice in Boston for more than 25 years Mr. Abbadessa, 38, a certified public before entering Federal service, first accountant and formerly Associate Di- with Lybrand, Ross Bros. & Mont- rector of the Civil Accounting and gomery and later in his own firm. He Auditing Division, is a graduate of was an Army aviator in World War I, American University and received his and a Supervisory Cost Inspector in master’s degree from the Wharton the Navy during World War I1 with School of the University of Pennsyl- the rank of captain. vania. He served for 4 years with the He has been active in the D.C. In- U S . Marine Corps as a captain. stitute of Certified Public Accountants He joined the staff of the GAO in and the FGAA. He was a charter mem- 1947. ber of the FGAA and was vice presi- In September 1956, he was promoted dent and a director in its early years. to Assistant Director, CAAD, and in He has served more recently as treas- September 1958 was designated as As- urer of the D.C. Institute and is pres- sociate Director of that division. In this ently a member of the Board of capacity Mr. Abbadessa directed GAO’s Governors. audits of the Tennessee Valley Author- ity, the Atomic Energy Commission, Oye V. Stovall and the Post Office Department. December 1959 As Director of the Transportation Division Mr. AbEadessa will head a In a recent announcement, Oye V. 1,250-man organization and will have Stovall was designated as Director of responsibility for the final audit of all the Transportation Division by Comp- payments made by the United States troller General Joseph CampbeEE. to freight and passenger carriers. Mr. Stovall, formerly Associate Di- rector of the Civil Accounting and Irwin S. Decker Auditing Division, has been on the staff July 1959 of the General Accounting Office since Irwin S. Decker, Assistant Director, 1946 except for a period of industrial AAPS, retired from the GAO on employment in 1955-56 as Controller, June 30. Mr. Decker joined the staff Uranium Division of Mallinckroft of the GAO in September 1947 as Chemical Works in St. Louis. Deputy Director of the Corporation Before coming to the General Ac- Audits Division. Upon consolidation counting Office, Mr. Stovall was asso- of the auditing divisions in 1952, he ciated with the New Orleans and Hous- became Associate Director of Audits. ton Offices of the public accounting His broad professional experience was firm of Ernst & Ernst. In World War I1 later utilized in the OSM to which he he served in the Navy Cost Inspection was assigned in February 1957, and in Service, with the rank of lieutenant the Accounting and Auditing Policy commander. Mr. Stovall is a certified Staff in June 1958. public accountant in Louisiana and 179 THE WATCHDOG REPORTS Mississippi and is a member of the Stwe M. Brown American Institute of Certified Public December 1960 Accountants and the District of Colum- After 36 years of Government sew- bia Institute of Certified Public ice, Steve M. Brown, Associate Direc- Accountants. tor of the AAPS, retires at the end of December. Lawrence J. Powers Mr. Brown first came to the GAO in January 1960 1926 from the Bureau of Internal Reve- nue, Treasury Department. His first Lawrence J . Powers was recently assignment in the Office was in the old designated as the Assistant to the Records Division. He also served in the Comptroller by Comptroller General Accounting and Bookkeeping Division, Joseph Campbell. the Office of Planning and Budget, and Mr. Powers, a graduate of the Uni- the successor organization, the Office versity of Maryland, has been asso- of Administrative Planning. ciated with the GAO since 1952 Early in 1948, he became Assistant following his release from active duty Chief of the newly formed Accounting with the U S . Army during the Korean Systems Division where he remained Emergency. He has served as Director of DAAD since March 1956 when the until the realignment of the accounting and auditing organizations in 1956. At Division was established by the Comp- that time, he became an Associate Di- troller General. rector of the AAPS. Mr. Powers has had broad experi- In recognition of his long period of ence in accounting and auditing posi- creditable service in the GAO, a Dis- tions for over 25 years in the Federal tinguished Service Award was pre- Government. He has served as the GAO sented to him on November 22 by the representative on the Committee on Assistant Comptroller General, Frank Defense Participation in the Joint H . Weitzel. The award was made on Accounting Program. the recommendation of E. H. Morse, He was a recipient of the 1957 Career Jr., Director, AAPS. In making the rec- Service Award granted in May of that ommendation, Mr. Morse noted: year by the National Civil Service “Mr. Brown’s effective liaison work League. has assisted in bringing about many fiscal improvements in appropriation legislation dealing with such matters as William A. Newman, Jr. synchronization of programs and budg- January 1960 ets of Government agencies, improved William A . Newman, Jr., has been control of agency assets, and business- designated as Director of DAAD by type budgeting, accounting, and audit- Comptroller General Joseph Campbell ing. Just one example of the many in a recent announcement. Mr. New- which could be cited is the Anti-Defi- man succeeds L. J . Powers, who is ciency Act Amendments incorporated serving as the Assistant to the Comp- in the General Appropriation Act, troller General. 1951.” 180 THE WATCHDOG REPORTS Oye V. Stovall he served in the US. Army Air Force. Thomas E. Sullivan Mr. Sullivan is a certified public April 1962 accountant in Pennsylvania and is a Joseph CampbeZE, Comptroller Gen- member of the American Institute of eral of the United States, today an- Certified Public Accountants and the nounced that Oye V . Stovdl is being Pennsylvania Institute of Certified advanced from his post as Director of Public Accountants. Transportation Division to become Deputy Director of the C U D . Hyman L. Krieger , In addition, Mr. Campbell an- April 1962 nounced the designation of Thomas E. H y m n L. Krieger has been desig- Sullivan as Director of the Transpor- nated a Deputy Director of the tation Division. He succeeds Mr. Field Operations Division of the GAO, Stovall. according to recent announcement by Before coming to the Office in 1946, the Comptroller General. Mr. Stovall was associated with the Mr. Krieger received the degree of New Orleans and Houston Offices of the bachelor of business administration public accounting firm of Ernst & from City College of New York in 1941 Ernst. In World War I1 he served in and later attended the George Wash- the Navy Cost Inspection Service, with the rank of lieutenant commander. Mr. ington University. In 1961, he com- Stovall is a certified public accountant pleted the Advanced Management Pro- in Louisiana and Mississippi and is a gram at Harvard University Graduate member of the American Institute of School of Business Administration. Certified Public Accountants and the Mr. Krieger joined the Washington District of Columbia Institute of Certi- staff of the GAO in 1946 after a tour of fied Public Accountants. duty with the U.S. Army. In 1950, he Mr. Sullivan joined the staff of the was again called to military duty and GAO in 1951 and since August 1960 served both in a military and civilian has served as Associate Director of capacity until 1954, when he returned the Transportation Division. to the Office. Mr. Krieger previously Prior to his association with the served as Manager of the Regional Transportation Division, Mr. Sulli- Offices at Chicago, Ill., and New York, van served as Assistant Director of N.Y. the DAAD. During the period 1954-56, Mr. Krieger is a certified public ac- he served on the staff of the European countant of North Carolina and Illinois Branch and was also the U.S. Delegate and is a member of the American Insti- to The International Board of Audi- tute of Certified Public Accountants. tors for Infrastructure of NATO. His designation makes the direc- Before coming with the Office, Mr. torate of the Field Operations Division Sullivan was associated with a na- consist of John E . Thornton, Director; tional firm of public accountants in H. L. Krieger, Deputy Director; and Pittsburgh, Pa. During World War I1 G. Ray Bandy, Deputy Director. 181 THE WATCHDOG REPORTS E. Lyle Fisher versity. He is a certified public account- July 1962 ant and a member of the Bar in E . Lyle Fisher, who served as Gen- Maryland. eral Counsel of the General Account- ing Office from 1947 to 1958, died on Arthur Schoenhaut July 11 after a heart attack. At the January 1964 time of his retirement for disability in Arthur Schoenhaut has been desig- 1958, Mr. Fisher had completed more nated Deputy Director, CAAD, by than 30 years of service. Joseph CampbeZl, Comptroller General of the United States. Mr. Schoenhaut Oye V. Stovall succeeds Oye V. Stovall who was re- August 1963 cently designated Director of the GAO’s Comptroller General of the United International Operations Division. States Joseph Campbell has announced He joined the GAO in 1950. Follow- that effective August 19, the Interna- ing 3 years with the U.S. Army, he at- tional Operations Division will be es- tended and in 1949 received a bache- tablished under the supervision and lor of business administration degree direction of Oye V. Stovall, formerly from The City University of New York. Deputy Director of the Civil Account- He did graduate work in business edu- ing and Auditing Division. cation at New York University. He is a certified public accountant of Virginia Edward T. Johnson and a member of the American Insti- August 1963 tute of Certified Public Accountants. Edward T . Johnson has been desig- John H. Cooper nated as Director of the European April 1964 Branch of the GAO by Comptroller General Joseph Campbell. Mr. Johnson John H . Cooper, Deputy Director, succeeds Lloyd G. Smith who is being Transportation Division, retired March assigned to the Washington Office after 27, after more than 30 years of Gov- completing a 2-year tour as Director. ernment service. Mr. Cooper is a grad- Headquarters of the office is in Paris. uate cum laude of Southeastern Univer- Mr. Johnson, who resided in Balti- sity and was admitted to the Bar of the more, Md., has had broad and diversi- District of Columbia in 1939. fied experience in the accounting and Mr. Cooper had extensive experience in the field of transportation, both in auditing, claims settlement, and legisla- private industry and in Government tive activities of the Office since first service. He served in various responsi- joining the Office in 1936. Prior to his ble capacities with several Class “A” European assignment, Mr. Johnson railroads and a major trans-Atlantic served as an Associate Director of the steamship line prior to his Government DAAD. service, and also had wide experience He attended the University of Balti- in the commercial air transportation more, where he received an LL.B. de- field as it relates to Government traffic. gree, and attended Johns Hopkins Uni- Mr. Cooper began his Government 182 THE WATCHDOG REPORTS service with the War Department, tive work conducted by the Office in transferring to the GAO in 1941 where the Department of the Navy. he has served as a technician, staff as- In his new position, Mr. Scantlebury sistant, chief of various branch offices, will be responsible for directing as- assistant director, and deputy director. signed accounting, auditing, and in- During his years of service, Mr. vestigative work of the GAO in the Cooper became well known as an au- District of Columbia and parts of thority on transportation matters and Maryland and Virginia. The Washing- served as a representative of the Office ton Regional Office is being established at meetings of all segments of the trans- to primarily perform work at loca- portation industry, as well as with other tions other than headquarters offices of governmental departments. He has per- departments and agencies, including formed effective liaison work with con- audits at contractor activities in the gressional committees and assisted var- ahove area. ious branches of the Government in Mr. Scantlebury is a certified pub- resolving complex foreign and domestic lic accountant in Iowa and Wisconsin transportation problems. For a number and is a member of the American In- of years he served as a lecturer at the stitute of Certified Public Accountants. Transportation Institute of American University and the Advanced Traffic G. Ray Bandy Management School at Fort Eustis, Va. February 1965 G . Ray Bandy, Deputy Director, Donald L. Scantlebury Field Operations Division, retired at October 1964 the end of January. Joseph Campbell, Comptroller Gen- Mr. Bandy entered the Government eral of the United States, today an- service with the Audit Division of the nounced the designation of Donuld L. G-40 in July 1935. He served in vari- Scantlebury as Manager of the newly ous positions in Emergency Pay groups, established Washington Regional Of- the Audit Review Section and the War fice of the GAO Office. Contract Section in the Moses Building Mr. Scantlebury attended Antioch and Old Post Office Building. College, Yellow Springs, Ohio, from In 1942 he was assigned to the site which he received a B.A. degree in audit of airplane construction con- business administration in 1950. Sub- tracts at plants located in Santa Moni- sequently he was employed for several ca, Long Beach, and San Diego, years in the field of public accounting. Calif. Mr. Bandy also supervised the He became associated with the GAO in audit of costs incurred by various con- 1956 and has had diversified experi- tractors in Edmonston, Alberta, ence with the Office, assuming positions Canada. of increasing responsibility. Since 1961, Mr. Bandy was placed in charge of as an Assistant Director in the DAAD, the site audit of cost-plus-a-fixed-fee Mr. Scantlebury has assisted in the contracts in Oregon and Washington overall planning and supervision of the with headquarters in Seattle in 1944. accounting, auditing, and investiga- He assumed the position of Deputy Di- 183 THE WATCHDOG REPORTS rector, FOD, in 1958 and held that Dixon, accountants in New York City. position until his retirement. From 1924 to 1941 he held various responsible financial positions in pri- Joseph Campbell vate businesses and in the public ac- July 1965 counting profession. He formed his Joseph CampbeZZ, Comptroller Gen- own firm, Joseph Campbell and Com- eral of the United States, on June 30, pany, Certified Public Accountants, in requested of the President that he be which he remained a partner until permitted to retire for physical disa- 1941. bility as of July 31. At that time he During the time he was assistant will have served as Comptroller Gen- treasurer at Columbia university, he eral for 10 years and 7 months. served as chief of the financial and Prior to his appointment as Comp- business administration for wartime troller General by President Eisen- research and development and train- hower on December 14, 1954, Mr. ing activities there with the US. Campbell had served as a member of Government. the Atomic Energy Commission since Following the close of World War 11, July 14, 1953. He joined the Atomic he served as chairman of the commit- Energy Commission from his position tee for establishing the Brookhaven as vice president and treasurer of Co- National Laboratory, Brookhaven, lumbia University. He had been as- Long Island. sociated with the University since 1941 Tributes were paid to Mr. Campbell when he was appointed as assistant in both the House and Senate. treasurer. Frank H . Weitzel, Assistant Comp- A native of New York City. Mr. troller General, will Serve as Acting Campbell was born on March 25,1900, Comptroller General until a successor and was educated in the public schools is appointed by the President and con- of New York City. firmed by the Senate. He graduated from Columbia Uni- versity in 1924. He holds honorary Charles D. Hylander doctor of laws degrees from Colgate September 1965 and Columbia Universities. He is a The designation of Charles D. certified public accountant in the State Hylander as Deputy Director of the of New York and the State of Connec- International Operations Division of ticut and is a member of the American the General Accounting Office was re- Institute of Certified Public Account- cently announced by Frank H . Weitzel, ants and the New York and Connec- Acting Comptroller General of the ticut State Societies of Certified Public United States. Accountants. He is a veteran of World After serving in the US. Army from War I, having served in the U.S. 1944 to 1946, Mr. Hylander received Army. a bachelor of arts degree from Harvard Upon his graduation from Colum- University in 1947 and a masters de- bia, Mr. Campbell began his career gree in business administration from with the firm of Lingley, Baird and Columbia University in 1949. 184 THE WATCHDOG REPORTS Before joining the staff of the GAO others. His selflessness has no bounds in 1951, Mr. Hylander was associated and his service to human needs no with a public accounting firm in New peer.” York City. He became a certified pub- Mr. Feeney is a native of Scranton, lic accountant in the District of Coluni- Pa. He entered the Government service Lia in November 1951. in January 1915 with the Bureau of Since joining the Office, Mr. Chemistry in the Department of Agri- Hylander has had a wide variety of ex- culture, and he served in that depart- perience in auditing civil and defense ment until World War I when he ac- activities of the Federal Government, cepted an appointment with the Auditor both in the United States and as a for War, Treasury Department, in member of the staff of the European Paris, France. He returned to Wash- Branch and the Far East Branch. Since ington and joined the staff of the GAO July 1964 he has served as an Assistant in January 1924 after his service as Director in the International Opera- Clerk and Vice Consul with the US. tions Division. Consulate General in Paris. After joining the GAO, he served John F. Feeney in responsible investigative positions December 1965 for nearly ten years and was promoted John F. Feeney, Administrative Of- to Principal Investigator in April 1934. ficer, OAS, retired on November 30th Shortly after the outbreak of World after 50 years of Federal service and War 11, the then Comptroller General over 40 years with the GAO. Lindsay C. Warren detailed Mr. In announcing Mr. Feeney’s retire- Feeney to the Senate Appropriations ment, Mr. Weitzel said, “John Feeney Committee to assist the chairman with has rendered a truly outstandhg the augmentation of that committee’s service to the Government and the staff. He served with distinction on General Accounting Office for over 50 that staff for nearly 3 years. After his years. His distinguished career has return to the Office, he was appointed been marked by an exemplary per- Executive Officer and later in 1955 was formance that has won the respect and designated as Administrative Officer. confidence of his associates within as u-ell as outside the General Accounting Herschel J. Simmons Office. His conscientious devotion to Sanford H. Cornett duty stands as an inspiration to all of Allen N. Humphrey January 1966 us who recognize that public service is a public trust.” Herschel J . Simmons has been ap- “Notwithstanding many official re- pointed to the position of Administra- sponsibilities,” Mr. Weitzel added, “he tive Officer, Office of Administrative has always given generously of his time Services, succeeding John F. Feeney, to employee welfare, civic, and charity who has retired. The announcement matters over an extended period of was made by Frank H . Weitzel, Acting time. He has been a stimulating and Comptroller General. vital force in guiding and helping Sanford H . Cornett has been ap- 185 THE WATCHDOG REPORTS pointed to the position of Assistant Ad- Management and Services Branch, ministrative Officer and Budget Officer. OAS. He will head the Budget and Finance Branch, OAS. Elmer B. Staats Allen N . Humphrey has been desig- February 1966 nated as Assistant Administrative Offi- Elmer B. Stuats, Deputy Director, cer and Records Management Officer. Bureau of the Budget, has been nomi- He will continue to head the Records nated to be the Comptroller General of Management and Services Branch, the United States. The announcement OAS. was made at an informal news confer- Mr. Simmons came to GAO on July ence on Friday by President Lyndon B. 10, 1935, as a Reconciliation Clerk in Johnson. the Check Section, Audit Division, and In making the announcement, Presi- followed with assignments in the Office dent Johnson said, “I am appointing of Administrative Planning, Account- Mr. Staats, Deputy Director of the BU- ing Systems Division, and Transpor- reau of the Budget, as Comptroller tation Division, and in October 1953 General. He joined the Bureau in 1939, he was appointed Chief, Budget and and was born in Kansas in 1914. He Finance Branch and Assistant Admin- married a daughter of former Congress- istrative Officer, OAS. man Robert F. Rich of Pennsylvania.” Mr. Cornett after his graduation Mr. Staats has been Deputy Director from Baylor College, came to Wash- of the Bureau of the Budget under four ington in 1946 to pursue his studies Presidents. Prior to his appointment by and accepted a position with GAO as President Kennedy in January 1961, he a Clerk in the Accounting and Book- had held this position under President keeping Division. He was reassigned to Eisenhower from March 1959 to Jan- the Division of Personnel in 1948 and uary 1961, and under President Tru- progressed to the position of Assistant man from April 1950 until January to the Director of Personnel. He was 1953. promoted to the position of Assistant Mr. Staats first joined the Bureau of Chief, Budget and Finance Branch, the Budget in 1939 and served in var- ious capacities until 1953, including the OAS, in May 1961. positions of Assistant Director for Leg- Mr. Humphrey was appointed to the islative Reference, and Executive As- position of Assistant Auditor, Audit sistant Director. During World War I1 Division, on August 5, 1935. He trans- he was in charge of the Bureau’s budget ferred to the Planning and Budget estimates work covering the major war Staff, Office of the Comptroller General, agencies. in September 1941 and in July 1942 He left Government service early in was appointed Special Assistant to the 1953 to serve for approximately a year Chief, Postal Accounts Division. In as research director for Marshall Field October 1953, when the Office of Ad- & Company in Chicago. He returned ministrative Services was established, to Washington as Executive Officer of he was promoted to Chief, Records the newly established Operations Co- THE WATCHDOG REPORTS ordinating Board under the National March 8. President Johnson took the Security Council. He held this post occasion to praise Mr. Staats as a mtil September 1958 when he returned “builder not a doubter.” to the Bureau of the Budget as an AS- He said Mr. Staats, who has been sistant Director, becoming Deputy Di- Deputy Director of the Bureau of the rector in March 1959. Before coming Budget under four Presidents, “has to thf: Bureau in 1939, he was with the served his government faithfully and Kansas Legislative Council in Topeka, well for 26 years.” Kans., and the Public Administration Among the 2.5 million men and Service in Chicago. women working in the Federal Govern- Mr. Staats has been a member of ment, President Johnson said “There ihe National Council of the American are a few who are doubters * * * there Society for Public Administration since are always some who lack the vision to 1957 and was national president of anticipate our strength or the courage the Society in 1961-62. He was chair- to give it purpose. man of the Conference on the Public “They find fault with either our sys- Service in 1959-60. He is also a mem- tem of government or the men who ber of the Advisory Committee of the serve it * * * the doubters or the fear- University of Wisconsin’s Center for ful do not build government or create Advanced Study in Government Ad- strength. ministration, and a member of the Ad- “Whenever there is a collision with visory Council of the Brookings Insti- fate-when history stops for a mo- tution’s Conference on Public Affairs. ment of crisis-it is the doubter who He received an A.B. degree from Mc- runs from the test of courage-and it Pherson College, McPherson, Kans.; is the builder, who is firm in the face an M.A. degree from the University of of fear.” Kansas; and a Ph. D. degree from the Mr. Staats assumed the office of Ibiversity of Minnesota. He was a fel- Comptroller General on March 14. low of the Brookings Institution from 1938 to 1939. He is a member of Phi Roland J. Sawyer Beta Kappa and was a recipient of the November 1966 Rockefeller Public Service Award in The Comptroller General of the 1961. United States, Elmer B. Staats, today He was born in Richfield, Kans., on announced the appointment of Roland June 6, 1914. He is married and has 1.Sawyer as Information Officer for the three children. U S . General Accounting Office. Mr. Sawyer, well known in Washing- Elmer B. Staats ton news media circles, comes to GAO March 1966 from the Department of Commerce. Elmer B. Staats, was sworn in to be After lengthy service with the Chris- thc ComptroIIer General of the United tian Science Monitor in Boston and States during ceremonies in the East Washington, Sawyer, a native of Maine Room of the White House on Tuesday, and a graduate of the University of 423-774 0 - 7 1 - 1 3 187 THE WATCHDOG REPORTS New Hampshire, entered Government William A. Newman, Jr. service in 1955 with the Atomic Charles M. Bailey Energy Commission. He later served July 1968 with the Export-Import Bank and the Comptroller General of the United International Bank for Reconstruction States, Elmer B. Staats, has announced and Development. Comptroller General that, William A . Newman, Jr., Direc- Staats stated that Mr. Sawyer will be tor of the Defense Division of the U.S. responsible for the public information General Accounting Office has assumed program of the General Accounting the position of Special Assistant to the Office. He will advise and assist mem- Comptroller General. The change was bers of the press and news media in effective July 15. obtaining information on GAO activi- Charles M. Bailey, now Deputy Di- ties and official reports to the Congress. rector of the Defense Division, will be- Mr. Sawyer served from 1942 to come Director of the Division. 1945 as a lieutenant in the Navy and In his new position, Mr. Newman was assigned as an intelligence officer will be principally responsible for the with the Atlantic Fleet. assignment to the General Accounting Office contained in the amendments to Gregory J. Ahart the Defense Production Act of 1950, April 1967 signed by the President on July 1. The The Comptroller General of the legislation requires the Comptroller United States, Elmer B. Staats, has des- General, in cooperation with the Secre- ignated Gregory J . Ahart as Deputy tary of Defense and the Director of the Director, Civil Division, of the U S . Bureau of the Budget, to “undertake a General Accounting Office. Mr. Ahart study to determine the feasibility of succeeds Arthur Schoenhaut who re- applying uniform cost accounting cently became Deputy Controller of the standards to be used in all negotiated US.Atomic Energy Commission. prime contract and subcontract defense Mr. Ahart joined the GAO in 1957 procurements of $100,000 or more.” and has had extensive experience in Before entering his career in the managing accounting and auditing as- Federal Government in 1942, Mr. New- signments including long-range plan- man was associated with public ac- counting firms in New York City and ning and determination of program a partner of a firm in Syracuse, N.Y., priorities. He has participated with and for several years was controller congressional groups in an advisory and treasurer of a manufacturing con- capacity and testified before congres- cern. He is a certified public account- sional committees. ant. In the Federal Government he A B.S. degree graduate of Creighton served first in a civilian capacity in University, Omaha, Nebr., Mr. Ahart auditing work with the Army Air also holds a bachelor of law degree Force, transferring to military service from Georgetown University. He is a the following year. Upon his discharge certified public accountant of Nebraska in 1946, Mr. Newman joined the Gen- and a member of the Bar of Virginia. eral Accounting Office where he became 188 THE WATCHDOG REPORTS Director of its Defense Division in Mr. Flynn stated, “The termination of 1959. He is a graduate of Syracuse pleasant associations has never been University. easy for me, so let me say finis of a Mr. Bailey also began his career in pleasant and, I hope, a mutually fruit- public accounting, entering the Gov- ful career, by expressing my apprecia- ernment service with the General Ac- tion for the opportunity of working counting Office in 1935. For many with and for you and your staff.” years he served in GAO’s former Divi- In a memorandum to staff members, sion of Audits, becoming Assistant Di- Mr. Staats commented, “While there rector in 1952. In 1954 he was assigned will be other opportunities to recog- to GAO’s European Branch and was nize the contributions which Tom appointed also as US. Representative Flynn has made to the GAO, I know on the Board of Auditors for Infra- that you will join me in simply saying, structure of the North Atlantic Treaty at this time, how much we are indebted Organization. He became Deputy Di- to him for his long and fruitful career rector of the Defense Division in 1960. with this Office. Mr. Bailey was presented with GAO’s “Tom joined the Government 34 Distinguished Service Award by the years ago as a member of a group Comptroller General in June of this pioneering in personnel administration year. He is a graduate of the University in the Farm Credit Administration, and of Denver. he has served 26 years of that period with GAO. He will be missed person- Richard W. Gutmann ally and officially by his many friends Joseph P. Normile and associates.” August 1968 Mr. Flynn began his Federal govern- Comptroller General Elmer B. Staats ment service with the Department of has announced the following changes Agriculture on March 27, 1934. in the General Accounting Office, ef- He joined the GAO on August 6, fective September 16: 1942, as Assistant Director of Person- Richard W . Gutmann, present Di- nel and became Director of Personnel on April 6, 1947. He was a member of rector of the European Branch, will be the Civil Service Committee of Expert reassigned as Deputy Director, De- Examiners, and Chairman of the In- fense Division. centive Awards Committee. Joseph P. Normile, Deputy Director of the Transportation Division, will re- Lawrence V. Denney place Mr. Gutmann. November 1968 Lawrence V . Denney, Director, Thomas A. Flynn Claims Division, has retired because of October 1%8 disability. He had been absent from the Thomas A . Flynn, Director of Per- Office for several months because of sonnel, is retiring on December 27. illness. By letter to Elmer B. Staats, Comp- Mr. Denney, a native of Washington, troller General of the United States, D.C., went to school here and earned 189 THE WATCHDOG REPORTS B.C.S. and LL.B. degrees at the Colum- Ariz., in 1912. He is a graduate of hus University. He joined the General Rrigham Young University, received Accounting Office in August 1935 and his doctorate from Louisiana State served in the Audit Division, Claims University, and is a certified public ac- Division, and the Office of the General countant. Counsel. During his service in the O5ce For many years Dr. Herbert taught of the General Counsel, he was assigned accounting and statistics first at Loui- as Legal Advisor to the Director of siana State University, then at Brigham Audits. Young University, and then at Loui- He was appointed as Director, Claims siana Polytechnic Institute, where he Division, in April 1957. became professor of accounting and head of its Department of Business Ad- Leo Herbert ministration. December 1968 He was Assistant State Auditor, Appointment of Dr. Leo Herbert, State of Louisiana, from August 1952 formerly Deputy Director for Staff De- through April 1956 when he joined the velopment, OPSS, as Director of the GAO. new Office of Personnel Management of the GAO was announced by Comp- Frank H. Weitzel troller General Elmer B. Staats. January 1969 The new office consolidates the for- Assistant Comptroller General Frunk mer Office of Personnel and the Staff H . Weitzel completed his 15.year term Development unit, OPSS, and will pro- in that office on January 17. In so do- vide a better opportunity to implement ing, he has served continuously in the improved recruiting, personnel opera- United States General Accounting Of- tions, and employee development pro- fice for nearly 42 years and has been grams throughout the Office, Mr. Staats employed there over a period of 45 said. years. Mr. Weitzel became a messen- Three career GAO staff members ger in the GAO before he graduated were also appointed as Assistant Direc- from high school. His departure from tors of the Office of Personnel Man- the office of Assistant Comptroller Gen- agement by the Comptroller General eral, next to the top rung of the GAO and will be in charge of functional ladder, is the climax to one of the activities : Ernest C. Andersen, Person- longest careers in contemporary gov- nel Development; Harley C. CEirnpson, ernment and one of the most success- Recruitment and Assignment, and ful. Vincent 1.Kirby, Personnel Operations. Mr. Weitzel is a native of the Dis- The former Office of Personnel was trict of Columbia where he was raised headed by Thomas A . Flynn who was and educated. its director for many years. Mr. Flynn Mr. Weitzel assisted congressional retires effective December 27, after 26 efforts in the enactment of a great deal years service with GAO and 34 in the of basic legislation, not only strength- Government. ening the functions and operations of Dr. Herbert was born in Douglas, the General Accounting Office, but 190 THE WATCHDOG REPORTS laying the foundation for Government- finest Christian gentlemen I have ever wide improvements in accounting and known.” auditing. Such legislation included : Mr. Weitzel is a member of the Amer- the Government Corporation Control ican Bar Association and the Federal Act of 1945, the Budget and Account- Government Accountants Association. ing Procedures Act of 1950, the Post Office Department Financial Control Robert F. Keller Act of 1950, and the Federal Property September 1969 and Administrative Services Act of Robert F. Keller, General Counsel, 1949. Office of the General Counsel, has been Mr. Weitzel worked with committees nominated by President Nixon to be of both Houses of Congress, especially the Assistant Comptroller General of the Appropriations, Government Op- the United States. erations, Post Office and Civil Service, Comptroller General Elmer B. Stuats, Banking and Currency, and Agricul- in a memorandum to members of the ture Committees. staff said: He took a leading part in the devel- “I am especially pleased, as I am opment of the Joint Financial Manage- sure you are, with the President’s, an- ment Improvement Program now being nouncement today of his intention to carried on by the General Accounting nominate Robert Keller as the Assist- Office, the Bureau of the Budget, and ant Comptroller General. the Treasury Department. He testified “Mr. Keller will fill the post held so before the Joint Committee on Atomic ably by Frank Weitzel and before him, Energy in November 1954 on the Frank Yates. Both of these men were Dixon-Yates contract and on the ques- products of the fine professional career tion of uniform cost accounting stand- service for which the General Account- ards for Defense contractors during ing OfKce is so well known. the last session of Congress. ‘‘In the past 3% years as Comptrol- Mr. Weitzel led the participation of ler General, I have become increasing- GAO in work with the Budget Bureau ly impressed with the great impor- and Defense Department on the De- tance-indeed, the essentiality-of the partment’s new accounting system for role which the General Accounting Of- operations, known as Project PRIME, fice plays not only for the Congress which culminated in congressional per- but for the entire Federal Government. mission to install the system last July. “In carrying out its mission, the Of- For many years Mr. Weitzel has been fice strives to serve in a nonpartisan well known not only by the majority of way the Congress as a whole. Mr. Kel- leaders in the Congress, but throughout ler in his role as General Counsel of the Federal Government. the General Accounting Office has dem- In a letter to a congressional commit- onstrated that he can serve as Assistant tee in 1954, former Comptroller Gen- Comptroller General in a most ad- eral Warren said of Mr. Weitzel: “In mirable way.” character and integrity he is without Mr. Keller has been General Counsel peer * * * I regard him as one of the for the GAO since October 1958 191 THE WATCHDOG REPORTS and is responsible for all legal work of 1942 to 1945 as a member of the the Office including the development Navy Management Engineering Staff. and formulation of its legislative pro- gram and the legislative liaison work Lawrence J. Powers of the Office. Mr. Keller has a staff May 1971 of 201 of which 108 are attorneys. Lawrence J. Powers, Assistant to the Comptroller General, retired on May 28 Paul G. Dernbling after 36 years of Federal service. November 1969 Mr. Powers entered the Federal serv- P a d G. Dernbling, former Deputy ice as an accountant with the Office of Associate Administrator of the Na- the Commissioner of Accounts and De- tional Aeronautics and Space Admin- posits, U.S. Treasury, in 1935 and istration (NASA) was sworn in as Gen- moved over to the Farm Security Ad- eral Counsel of the General Accounting ministration in 1939 as the Budget Office by Leo Herbert, Director, Office Officer. of Personnel Management. He also served as Deputy Director, The appointment was announced by Fiscal Branch, Production and Market- Elmer B. Stactts, Comptroller General of ing Administration; and Assistant the United States. Treasurer, Commodity Credit Corpora- Mr. Dembling will bring to the GAO tion, Department of Agriculture, until an outstanding experience in legal and 1951 when he came to GAO as an As- legislative matters. sistant Director, Accounting Systems Division, and rose to Associate and Thomas D. Morris Deputy Director, later being promoted October 1970 to Director, Defense Division. Elmer B. Staats, Comptroller General Mr. Powers became the Assistant to of the United States, has appointed the Comptroller General in 1960 and Thomas D. Morris as a Special As- served in that position until his retire- sistant effective October 5. ment. He served in World War 11 and Mr. Morris joins the General Ac- the Korean Emergency and retired as a counting Office after extensive experi- Colonel, USAR. ence in Government and private indus- During his Federal service Mr. Pow- try in the managemen,t field. H'1s gov- ers was awarded the National Civil ernmental experience has been primari- Service League Career Service Award ly in the Tennessee Valley Authority, in 1957, the Army Commendation the Bureau of the Budget, and the Award-World War 11, and the General Department of Defense. During World Accounting Office Distinguished Serv- War 11, he served in the Navy from ice Award in 1970. 192 Officials of the General Accounting Office June 1971 Comptroller General of the United States Elmer B. Staata Assistant Comptroller General of the United States Robert F. Keller Special Assistant to the Comptroller General Thomas D. Morris Program Planning Staff Director Harry C. Kensky Assistant Directors Daniel L. Johnson William E. Parker Office of legislative liaison Attorney-Advisors for Legislation Lucius F. Thompson Smith Blair, Jr. Martin J. Fitzgerald Information Officer Roland J. Sawyer Organization and Management Planning Staff Director Clerio P. Pin Office of the General Counsel General Counsel Paul G. Dembling Deputy General Counsel Milton J. Socolar Associate General Counsels F. Henry Barclay, Jr. John T. Burns Stephen P. Haycock Assistant General Counsels Oscar B. Carpenter, Jr. Edwin W. Cimokowski Carl P. Friend Melvin E. Miller John W.Moore Matthew J. Nevins Robert H. Rumizen Paul Shllitzer 193 OFFlCfALS OF T H E GAO-JUNE 1971 Deputy Assistant General Counsels Wilbur R. Allen Seymour Efros Charles J. Goguen, Jr. John J. Higgins Stanley W. Johnson Herbert F. Lock Louis Palmer Clarence G. Phillip Norton H. Schwartz Senior Attorneys L. Mitchell Dick Thomas J. Gallagher Rita D. Hornyak DarreU L. Jones James E. Masterson Milton E. Wertz Office of Policy and Special Studies Director Ellsworth H. Morse, Jr. Deputy Directors Frederic H. Smith Daniel Borth, Jr. Edward J. Mahoney Associate Directors William L. Campfield Edward T. Johnson Keith E. Marvin M e n R. Voss Assistant Directors Joseph L. Boyd Joseph D. Comtois Howard R. Davia Gerald K. DeRyder Mortimer A. Dittenhofer Herbert L. Feay Herman B. Galvin Frank Gentile Donald J. Horan Kenneth W. Hunter Francis W. Lyle Harry J. Mason, Jr. Richard W. Maycock Robert G. Meisner Eugene L. Pahl Ted M. Rabun Robert J. Ryan, Sr. Irving Zuckerman 194 OFFlClALS OF THE GAO-JUNE 1971 Civil Division Director Adolph T. Samuelson Deputy Director Gregory J. Ahart Associate Directors Philip Charam Henry Eschwege Max Hirschhorn L. Kermit Gerhardt Victor L. Lowe Lloyd A. Nelson Max A. Neiiwirth Lloyd G. Smith George H. Staples Assistant Directors Philip A. Bernstein Arland N. Berry Baltas E. Birkle Wilbur D. Campbell Irvine M. Crawford Dean K. Crowther Edward A. Densmore, Jr. Willis L. Elmore John C. Fenton John D. Heller Morton E. Henig Vernon 1,. Hill Walter B. Hunter Richard W. Kelley Fred D. Layton Daniel P. Leary Roy S. Lindgren Cbarles P. McAuley Otis D. McDoweU James D. Martin William D. Martin, Jr. Frank Medico Edward C. Messinger Frank M. Mikue J. Dexter Peach George D. Peck Harold Pichney Donald C. Pullen Frederick K. Rabel Joseph P. Rother, Jr. Willard L. Russ 195 OFFICIALS OF THE GAO-JUNE 1971 Bernard Sacks Stanley S. Sargol James K. Spencer Daniel F. Stanton Harold L. Stugart Joseph A. Vignali Richard J. Woods Defense Division Director Charles M. Bailey Deputy Director Richard W. Gutmann Associate Directors Hassell B. Bell Forrest R. Browne Jerold K. Fasick James H. Hammond Robert G. Rothwell Harold H. Rubin Jerome H. Stolarow Deputy Associate Directors Marvin Colbs John F. Flynn Assistant Directors Felix E. Asby Hyman S. Baras Guy A. Best Donald G. Boegehold William A. Calafiura Frank P. Chemery Charles S. C O ~ S William F. Coogan Chester S. Daniels Howard L. Dehnbostel Johan De Leeuw Edwin C. Eads Stanley R. Eibetz DonaId L. Eirich David S. Glickman Mathew Gradet Joseph J. Kline William D. Lincicome Andrew B. McConnell Paul C. Newell Sam Pines S. Seymour Podnos 196 OFFICIALS OF THE GAO-JUNE 1971 John R. Ritchie Mas Stettner Charles Weinfeld International Division Director Oye V. Stovall Deputy Director Charles D. Hylander Associate Directors Robert H. Drakert James A. Duff Gilbert F. Stromvall Assistant Directors Dominick A. Binetti Frank C. Conahan Joseph DiGiorgio Fred Dziadek Charles E. Hughes James Y. Hurihara John E. Milgate John D. Redell Lawrence J. Sabatino Roberson E. Sullins Eugene C. Wohlhorn Frank M. Zappacosta European Branch Director Joseph P. Normile New Delhi Office Manager Louis W. Hunter Assistant Managers Melvin F. Berngartt William L. Martino Far East Branch Director Charles H. Roman Assistant Director Clifford I. Gould Manila Office Manager Fred E. Lyons Saigon Office Manager Thomas R. Brogan Transportation Division Director Thomas E. Sullivan Deputy Director Fred J. Shafer Associate Director Henry W. Connor, Jr. Assistant Directors Charles R. Comfort Joseph Goldman John M. Loxton Paul T. Smith Ralph E. West 197 OFFICIALS OF THE GAO-JUNE 1971 Field Operations Division Washington Director John E. Thornton Headquarters Atlanta Regional Manager Richard J. Madison Assistant Regional James E. Ballou Managers Kyle E. Hamm Boston Regional Manager Joseph Eder Assistant Regional Nicholas Carbone Managers Paul M. Foley Louis Lucas Chicago Regional Manager Myer R. Wolfson Assistant Regional Kenneth W. Hitzeman Managers Medford S. Mosher Cincinnati Regional Manager David P. Sorando Assistant Regional Walter C. Herrmann, Jr. Managers Elmer Taylor, Jr. Dallas Regional Manager Walton H. Sheley, Jr. Assistant Regional Harold C. Barton Managers Deon H. Dekker Paul C. DeLassus James J. Jodon Denver Regional Manager Stewart D. McElyea Assistant Regional J. Philip Horan Managers John E. Murphy Detroit Regional Manager Charles H. Moore Assistant Regional Franklin A. Curtis Managers John A. Dowell Kansas City Regional Manager Kenneth L. Weary, Jr. Assistant Regional Arnett E. Burrow Managers Kenneth F. Luecke LOSAngeles Regional Manager Hyman L. Krieger Assistant Regional Samuel Kleinbart Managers Edwin J. Kolakowski Dominic F. Ruggiero New York Regional Manager Alfonso J. S t r a z d o Assistant Regional Herbert E. Larson Managers Thomas A. McQuilian Valentine D. Tomicich Norfolk Regional Manager Walter E. Henson 198 OFFlClALS OF THE GAO-JUNE 1971 Philadelphia Regional Manager James H. Rogers, Jr. Assistant Regional Milton H. Harvey Managers Maurice Sady San Francisco Regional Manager Alfred M. Clavelli Assistant Regional Harold J. D’Ambrogia Managers Kenneth A. Pollock Charles F. Vincent Seattle Regional Manager WiUiam N. Conrardy Assistant Regional Irwin M. D’Addario Managers Charles L. Perry Washington Regional Manager Donald L. Scantlcbury (Falls Church, Va.) Assistant Regional George L. Egan, Jr. Managers Robert W. Hanlon Claims Division Director James M. Campbell Deputy Director John P. Gibbons Office of Personnel Management Director Leo Herbert Assistant Directors Harley R. Climpson Charles 0. Mapetti Albert R. Shanefelter, Jr. Data Processing Center Robert W. Benton Director Office of Administrative Services Director Herschel J. Simmons Branch Chiefs Sanford H. Cornett Larry A. Herrmann Anthony P. Kostrzewsky 199 us. GOVERNMENT PRINTING omcE:im 0-423-7-14 Comptrollers General of the United States John R. McCarl Jull- 1.1921-June 30.1936 Fred H. Brown April 11, 1939-June 19, 19-10 Lindsay C. Warren November 1,1940-April 30,1954 Joseph Campbell December 14,195&July 31,1965 Elmer B. Staats March 8, 1 9 6 6 Assistant Comptrollers General of the United States Lurtin R. Ginn July 1,1921-November 11,1930 Richard N. Elliott March 9,1931-April 30, 1943 Frank L. Yates May 1,1943-June 29,1953 Frank H. Weitzel October 12,1953-January 17,1969 Robert F. Keller October 3, 1969- Assisting in Preparation of Materials for 50th Anniversary Edition of the GAO Review Ofice of Policy and Special Studies Ofice of Personnel Management E. H. Morse, Jr. Carl C. Berger Josephine M. Clark N. B. Cheatham Ofice of the General Counsel Ofice o f Administrative Services Margaret L. Macfarlane Jane A. Benoit Alice E. Graziani Linda M. Lysne PHOTOGRAPHY CREDITS: Unless otherwise indicated, the photographs i n this issue are courtesy of The Watchdog or the Library of Congress. . . US. GENERAL ACCOUNTING 0FFl:E WASHINGTON, D C 20548 OFFICIAL BUSINESS POSTAGE A N D FEES P A I D US GENERAL A C C O U N T I N G OFFICE
The GAO Review, Summer 1971
Published by the Government Accountability Office on 1971-01-01.
Below is a raw (and likely hideous) rendition of the original report. (PDF)