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)

             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

                                                              Annual Report of the General
                                                                  Accounting Office. 1924

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   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. . . . . . . . . . .
                       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,
             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.

                                    Spealer of the Home of Repreenmioea.
                                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.

                                   aA* b    Comptroller General

                                            of the United States

                         50TH ANNIVERSARY 1921 1971      -
                              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.

                             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

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


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

                                                            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
                                           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


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.

                                                             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.)
   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


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.

                                                             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.
                                             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


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.

                                                            GAO AND ITS FUNCTIONS
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

                                                                                               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.”

                                                                         President of the Senate.
                                                                                                         I-    -

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

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-

                                                               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
   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.


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.

                                                                     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.

           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-

                                                        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-


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

                                                       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.


             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,

                                                              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.


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,

                                                                    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.

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
                                                   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.


           John Raymond McCarl, Comptroller General of the United States
                          July 1,1921-June 30,1936

                 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

     423-774 0 - 7 1   -   3

                  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
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.”

                                                                  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.


 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

                                                             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


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-






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

                                                             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


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

                                                                         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:
                                                          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


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

                                                              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

 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.

                                                                  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 * * *.

                                                             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>  +>
                                                          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,

   423-174 0   - 71   -   4

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

                                                          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
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.

             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-

                                                    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

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-


  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

                                                     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


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.


            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-
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,

                                                               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


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-
                                                         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

                                                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


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.

                                               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
   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
               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. * * *

                                        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-


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

                                                   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.


             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      *      *

                                           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.


members of the staff to sit for exami-      young man has to follow a proposal in-
nations.                                    volving fiscal matters (and there are
     .      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
   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,

                                     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


   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.

                                      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


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
                                           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
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
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

                                      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
                                              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


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
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

                                      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
  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.

                                            ,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-
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

                                                 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.

       423-774 0 - 71 - 6

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.

                                                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.


     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-


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.

                                                   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

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
                                              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.

                 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.


                                                                   Washington Post Photo
GAO working space in the Pension Building at the time The Washington Post story    was

                                                                           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
i                                                                                              85

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
   In addition to a “good head for fig-
                                            995,075 were audited by GAO during
                                            1939. Domestic and international
                                            money orders for amounts totaling
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
“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.

                                                                      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.”
-     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.

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.

                                                              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

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

$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-

                                                         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


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.


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

                                                              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-


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.

                                                        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


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-
                                                  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.)

                                                          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.


  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
                                                       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.


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-

                                                    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-


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-
                                               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
 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,

                                                       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

     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-

    423-774 0 - 7 1   -8

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.

                                                      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
  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-
                                            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


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

                                    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.

               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.


                                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
                                                     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.

                                                               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


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.

            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


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

                                                                             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
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


                 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.
  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

                                                                            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-
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
                                                  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.


   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.


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.

                                                                       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

                          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
         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

               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

   423-774 0 - 7 1   -9

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
                                                            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-
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


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.

                                                           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.


                      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.

                                                                    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

                            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.


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

                                                         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;
    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
    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;
    William L. Ellis, Chief, Ofice of Inivstigations; 1.      A . Newmun. Jr., Sidncy Jerois, Frederic H. Smith, Curties A. Hurley, Roy S.Lindgren, Ben H.
    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 .
E    Stovall, Robert L. Rasor, Charles A. lovino, John C. Fenton, and Henry H. Sasscer of the Division of Audits Wushington staff.

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

                                      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-
     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
     Chicago; Forrest R. Browne, Deputy Director, Field Operations Division ; C. H . ,Woore, Regional ,21annger, Detroit; D. P. Sorando, Regional
     Manager, Cincinnati.
     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
     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
                                                                   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
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
     ( 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.
     (r) Mcrgrd with and madr a suboffice of Dallas Rrgion in July 1970.
     (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.
     (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
                                  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.

                                                                  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,

                         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.


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

                             01 - I L   - 0 PLL-EZP

OVD 30 S331ddO   SV3S2i3AO

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
                                              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

                                                            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


   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

                                                              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.

           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.

                                                                      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-


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

                        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.

                                                                                           TRANSPORTATION DlVlSlON

                        Bills of Lading and Transportation Requests Examined

                                                            1922-70                   1948-70             Reaudit program

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
    Harrell 0. Hoagland. . . . . . . . . . . . . . . . . . . . . . . . .          April 194SJanuary 1959.
  Deputy Director:
    CharlesBrodman. . . . . . . . . . . . . . . . . . . . . . . . . .             April 1957-February 1958.
    John P. Abbadessa.. . . . . . . . . . . . . . . . . . . . . . . .             January 1959-December 1959.
  Associate Director:
    RobeitFloyd . . . . . . . . . . . . . . . . . . . . . . . . . . . .           January 1959-May 1960.
    Oye V . Stovall. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    December 1959-May 1962.
  Associate Director:
    Thomas E. Sullivan. . . . . . . . . . . . . . . . . . .                       July 1960-May 1962.
    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.


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


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.

                                                                  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.
                                          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.


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.

            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
  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

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

      Richard J. Madison                  Regional Manager
      Frank D. Blackistone
      Vincent I. Peters
      Edwin Y. Simmons

      Philip C. Carroll


      Myer R. Wolfson                                  Regional Manager
       J. Philip Horan                                 Assistant Regional Manager
       Lauden C. Maness
       Merrill M. Manion
       E. Kenneth Heitkamp
       George I. Murphy
       Harry 0. C. Ball
       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
      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
           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.

                                                             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.


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

                                                               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.


   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

                                                           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
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
    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


                                 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-

                                                                   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


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

                                                             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


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-

                                                            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.


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


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
   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.

                                                                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

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-
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-

                                                                 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

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


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-

                                                              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.

   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.

                                                          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.


  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.
Morse, Jr., Director, Accounting and
Auditing Policy Staff, and John E .
                                            John P. Abbadessa
Thornton, Director, Field Operations
                                                           January 1959
   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

                                                               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
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


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
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.”

                                                               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.


 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

                                                            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-


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.

                                                            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-


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
                                         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

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

                                                          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


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

                                                            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


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.

             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

  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
                        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

                                     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

                                               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

Field Operations Division
  Washington                   Director             John E. Thornton
  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
                                                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

Office of Administrative Services

  Director                                         Herschel J. Simmons
  Branch Chiefs                                    Sanford H. Cornett
                                                   Larry A. Herrmann
                                                   Anthony P. Kostrzewsky

                                             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

  Unless otherwise indicated, the photographs i n this issue are courtesy of The Watchdog or
the Library of Congress.
                                                                          .   .

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