of accounting and internal controls maintained by the Department itself. And, as Mr. Hagen has indicated, if the Department has a proper system and exerts every effort to carry it out and to abide by yours laws, the General Accounting Office is not going to have to come in then and spend $10 to find out whether $1 has been wrongly spent.

Does that answer your question, Mr. Hagen?

Mr. HAGEN. Very well.

I might say, while there are more employees today than when the Office was established, that is not necessarily any criticism at all, because the Government has grown tremendously in the past 9 years, and that figure of 8,000 as compared to 6.000 is very encouraging. I want to say to you very frankly that under your administration you have set up a high standard of efficiency in administration, for which I want to commend you and your staff. I have no criticism of your Department. What I was trying to ferret out is the need and interest you are showing in the problem you have just mentionedtrying to save some money in the handling of small items which run into many millions of dollars and need a better system of handling. Mr. WARREN. I understood your question and appreciated it. I appreciate your kind remarks, too. I am in accord with you 100 percent on this very thing.

Mr. HAGEN. One further question of Mr. Strom. I was wondering if the Department has taken the advice or given consideration to suggestions of the various postmasters themselves.

In talking to some postmasters around my district, I hear many of them say they are overburdened with reports, paper work, and details. It would appear to me that many of them are right when they say there must be more cutting off of records, reports, and handling details in the offices they have rather than having them all go to Washington or some district office and further burdening and adding to the work and taking up the time of personnel in the district offices or the main offices here. In other words, they feel that some of that stuff can be done locally and cut off locally and more responsibility can be given to the local offices. Have you given any consideration to that point, Mr. Strom?

Mr. STROM. We do have a suggestion program in operation, and as suggestions come in from the field we do give consideration to them. Some have been adopted but many cannot be put into effect, because the suggester does not know all of the problems confronting the Department. We are doing all we possibly can in eliminating unnecessary reports. I can assure the committee of that.

Mr. HAGEN. Will this new bill help you along that line? Will it eliminate some laws which now restrict you unnecessarily?

Mr. STROM. Section 10 does eliminate some reports which are now required; yes, sir.

The CHAIRMAN. I am sure that I speak for every member of this committee, as well as Congress, in saying that we are proud of the wonderful job that our former colleague, Mr. Warren, has done as Comptroller General.

I believe that you served in the House of Representatives for 14 years, did you not, General?

Mr. WARREN. Sixteen years, Mr. Chairman.

The CHAIRMAN. And you voluntarily left the House in order to accept the appointment as Comptroller General, by President Roosevelt.

I wish to say that Comptroller General Warren has done a magnificent job as Comptroller General. He is the agent of Congress. He has always cooperated with Congress, and I want to commend you, General Warren, for your record.

Mr. WARREN. I very much appreciate that, Mr. Chairman.

Mr. REES. Mr. Chairman, I would like to add a word at this point. During the 14 years I have been in the Congress I have had a chance to observe as a colleague of General Warren, his performance in Congress, and also his performance as Comptroller General.

I just want to say that in the first place General Warren is a great American and he has rendered, in my judgment, an outstanding service second to none in the administration of the affairs of our Government.

I also appreciate very much, General Warren, your forthright statement this morning. In fact, each and every time General Warren comes before this committee he delivers a forthright statement, without any hesitation at all and without respect to party, creed, or whatever may be involved in regard to the legislation we are considering.

Mr. WARREN. Thank you very much, sir.

The CHAIRMAN. General, are you absolutely convinced that this is a fine, meritorious bill, and will be helpful?

Mr. WARREN. I am, Mr. Chairman. I am very strongly in favor of this bill. The main provision is something that I have been so anxious since I have been in office to see enacted into law.

The CHAIRMAN. How long has the Comptroller General been doing the auditing for the Post Office Department?

Mr. WARREN. Since the Budget and Accounting Act was passed in 1921, which was before any of us here in this room were connected with Congress in any way. At that time no one knew just what to do with it, and they dumped it, literally, on the General Accounting Office. We are fully alive to the problems of the Post Office Department. Of course, it is a tremendous organization and they have thousands of problems. We want to help and cooperate with them in every way possible. It has been a pleasure to work with the Postmaster General and his staff in trying to perfect this bill.

The CHAIRMAN. Are there any other questions of General Warren? Mr. CARLYLE. Mr. Chairman, I would like to say that I appreciate the splendid statement Mr. Warren has made. It certainly has been helpful to this committee. The people of my State are extremely proud of his distinguished record. I consider him one of the most efficient men connected with our Government.

The CHAIRMAN. Are there any other questions?

Mr. WHITAKER. General, if all your appearances before committees were as pleasant as this one, you would not mind attending every day, would you?

Mr. WARREN. When my morale gets low I now know where to come. This committee has always been extremely cooperative with the General Accounting Office. I am not here just throwing bouquets. I tell you now, you have one of the finest staffs that any committee of Congress has ever had.

The CHAIRMAN. We appreciate that compliment because we prize the services of our staff very highly, both Mr. Moore and Mr. Belen. Mr. WARREN. They are two of the most objective men I have come in contact with.

Mr. WILLIAMS. Mr. Chairman, I might say that if all the witnesses that appeared before this committee were of the caliber of Mr. Warren, I do not think we would mind staying in session continuously.

The CHAIRMAN. I want to compliment not only General Warren, but the Postmaster General for his attitude in this matter. On matters of this sort an impasse may be reached, but when two outstanding men get together and talk around the table about their differences, they can usually reach a fair and satisfactory solution and compromise. That is what both General Warren and the Postmaster General did in this matter. They are both outstanding officials of our Government, and this legislation is largely the result of the attitude taken by General Warren and the Postmaster General. I think they have certainly reached a happy solution of the differences between them.

Mr. REES. Mr. Chairman, for the record, I also want to express my appreciation to the office of the Postmaster General in going along and helping to work out the legislation we have before us.

The CHAIRMAN. Mr. Yates, do you have any observations to make? Mr. Yates is the Assistant Comptroller General.

Mr. YATES. Mr. Chairman, everything that should be said has been said, from the standpoint of the General Accounting Office. The note is so pleasant that I would not like to disturb it by prolonging the statement.

The CHAIRMAN. Thank you very much.

Are there any further questions by any member of the committee? If not, thank you very much.

Mr. WARREN. Thank you, Mr. Chairman and gentlemen of the committee and Mrs. St. George.

The CHAIRMAN. We will next hear from Mr. Charles B. Stauffacher, Executive Assistant Director of the Bureau of the Budget.

STATEMENT OF CHARLES B. STAUFFACHER, EXECUTIVE ASSISTANT DIRECTOR, BUREAU OF THE BUDGET

Mr. STAUFFACHER. Mr. Chairman, I feel a little at a disadvantage, following the Comptroller General here, but I will try to do it, any

way.

The CHAIRMAN. I might say that the committee appreciates very much the valuable assistance and cooperation of Mr. Stauffacher, representing the Bureau of the Budget, in working out this legislation. Mr. Stauffacher attended many conferences, representing the Bureau of the Budget, with the Office of the Postmaster General and the General Acounting Office, and the Treasury Department, and you have rendered very valuable assistance in working out the situation. I want to thank you publicly, Mr. Stauffacher, for the part that you played.

Mr. STAUFFACHER. Thank you very much, Mr. Chairman. I have a very short statement that I should like to read at this point, and then I shall be available for any questions that the committee may desire to propound.

I appreciate the opportunity of appearing before your committee to discuss H. R. 8923, which provides for improved procedures with respect to the financial control of the Post Office Department.

While, in our opinion, this bill does not go as far as contemplated by the Hoover Commission recommendations, it represents a definite step toward improving the Post Office Department's fiscal operations. The bill transfers administrative accounting, pre-audit of expenses, and reporting functions now performed by the Comptroller General for the Post Office Department to the Postmaster General. This is an extremely desirable provision.

It is a high tribute to the Post Office Department that it has been able to operate as effectively as it has throughout the years, without the benefit of its own accounting system. This and other provisions of the bill will enable the Postmaster General to develop an accounting system within the framework of the principles and standards prescribed by the Comptroller General, geared to the needs of the Department which would produce information necessary for more effective management and control of operations.

In the establishment of the accounting system, it is provided that the Comptroller General shall cooperate with the Postmaster General and that the Comptroller General shall approve the system when he deems it to be in conformity with the principles and standards. Responsibility is placed in the Postmaster General for the collection of debts due the Department, and for the collection and remittance of fines, penalties, and forfeitures. Some of this work is now done in whole or in part by the General Accounting Office.

The present banking arrangements with the Treasurer of the United States are continued, and a revolving fund is established to embrace such activities. The Postmaster General is authorized, with the concurrence of the Comptroller General, to designate the place or places at which the administrative examination of accounts will be performed, and for the waiving of the administrative examination under certain conditions.

This will provide for the elimination of repetitive examinations of documents which are found to be unnecessary. It is provided that the Comptroller General, to the fullest extent practicable, shall conduct his post-audit at the place or places where the accounts of the Department are normally kept. This establishes the basis for a better audit and reduces the flow of documents and papers from the Department to the General Accounting Office.

The bill also recognizes that a complete post-audit of all vouchers and other documents should not be necessary if the Comptroller General is satisfied with the adequacy of the Department's system of accounts and internal control.

Provision is also made in the bill for the transfer of records, property, personnel and funds from the GAO to the Post Office Department in connection with the functions so transferred.

The section on effective date allows for an orderly transition in connection with the realinement of functions. In our opinion, this bill provides the basis for bringing about definite improvements in the fiscal operations in the Post Office Department. It would considerably strengthen the Postmaster General's hand in the management of his Department by having the accounting operations under his supervision and control.

We, therefore, recommend favorable consideration of H. R. 8923. The CHAIRMAN. Thank you. Have you any further observations, Mr. Stauffacher?

Mr. STAUFFACHER. I would like to offer just one further observation on a matter which has been discussed here primarily with Mr. Hagen.

This problem of having a number of small purchases, for each one of which there is a separate bill or voucher, is a matter which has concerned us in the Bureau of the Budget as well as in the AGO and other agencies. We have tried in this past year to put on a drive to get a consolidation of as many of those individual items as possible on the same voucher. That seems to us to be the most practicable way of eliminating extra paper work, reducing the number of checks issued and otherwise reducing costs.

The last reports that we have had on that from observations of the Federal supply offices in two regions, where they have been conducting experiments, have been encouraging in that the number of items and the quantity of purchases shown on each voucher has been increased in both cases. It is a matter on which continuing attention is needed in all the departments and agencies, so that the expenses incidental to the procurement of an item do not become out of line with the value of what you are procuring.

As to the other general point, Mr. Chairman, I think, as the Postmaster General's letter indicated, and as General Warren's comments have indicated, it is our feeling that this bill will make a very constructive beginning in terms of helping the Post Office Department to have its own accounting system.

From the standpoint of the Bureau of the Budget, we stand ready to cooperate with both the GAO and the Post Office Department in working out such difficulties as may arise in terms of implementing the legislation.

The CHAIRMAN. Are there any questions of the witness? If not, thank you very much, Mr. Stauffacher.

Mr. STAUFFACHER. Thank you, Mr. Chairman.

The CHAIRMAN. Our next witness will be Mr. Gilbert L. Cake, Associate Commissioner of Accounts for the Department of the Treasury. You have filed a report for the Department, have you not, Mr. Cake?

STATEMENT OF GILBERT L. CAKE, ASSOCIATE COMMISSIONER OF ACCOUNTS, DEPARTMENT OF THE TREASURY

Mr. CAKE. Mr. Chairman, our report on the bill, I believe, contains our full views, unless the committee desires to have us testify.

The CHAIRMAN. The Treasury Department is interested in the provision about the revolving fund set up for the Postmaster General, is it not?

Mr. CAKE. That is the only section involved in the Treasury Department; yes, sir.

The CHAIRMAN. Does that provision have the approval of the Treasury Department?

Mr. CAKE. It does.

The CHAIRMAN. Thank you very much.

Mr. CAKE. Thank you, Mr. Chairman.