Post Office Department Financial Control Act of 1950. Hearings...on H.R. 8923

POST OFFICE DEPARTMENT FINANCIAL CONTROL ACT

OF 1950

MONDAY, JUNE 26, 1950

HOUSE OF REPRESENTATIVES,

COMMITTEE ON POST OFFICE AND CIVIL SERVICE,

Washington, D. C.

The committee met at 10 a. m., Hon. Tom Murray (chairman) presiding.

The CHAIRMAN. The committee will be in order.

This morning the committee will consider H. R. 8923, a bill which has as its objective carrying out the recommendations of the Commission on Organization of the Executive Branch of the Government with respect to accounting and auditing for the Post Office Depart

ment:

(The bill, H. R. 8923, is as follows:)

[H. R. 8923, 81st Cong., 2d sess.]

A BILL To provide improved procedures with respect to the financial control of the Post Office Department, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Post Office Department Financial Control Act of 1950”.

SEC. 2. (a) There are hereby transferred to the Postmaster General functions performed by the General Accounting Office for the Post Office Department and the postal field service (hereinafter referred to as the "Department") with respect to the maintenance of administrative appropriation and fund accounts, accounts receivable and payable, and allotment controls; the preparation of financial and statistical reports; the preaudit of expenses; and related administrative, accounting, and reporting functions. The Postmaster General shall provide for such pre-audit of expenses as he deems necessary.

(b) The Postmaster General shall establish and maintain adequate and efficient systems of accounting and of internal control which shall provide for

(1) adequate accounting and internal control over and accountability for all funds, property, and other assets for which the Department is responsible, including appropriate provisions for internal audit;

(2) assembling of financial information needed for management purposes; (3) full disclosure of the financial results of the operations of the Department.

Such accounting system shall conform to accounting principles and standards prescribed by the Comptroller General of the United States.

(c) The Comptroller General shall cooperate with the Postmaster General in the establishment of the accounting system provided for under subsection (b) and shall approve such system when he deems it to be in conformity with the accounting principles and standards prescribed by him under such subsection. (d) The Postmaster General shall collect debts due the Department and collect and remit fines, penalties, and forfeitures arising out of matters affecting the Department. Any such debt which is uncollectible through administrative action may be referred to the General Accounting Office for collection. This subsection shall not apply where judicial proceedings have been instituted; and shall not affect the operation of section 409 of the Revised Statutes, as amended (5 U. S. C., sec. 383), with respect to disabilities and liabilities under any law relating to officers, employees, operations, or business of the postal service.

SEC. 3. (a) There is hereby established with the Treasurer of the United States a revolving fund to be known as the Post Office Department Fund. There shall be deposited in such fund, subject to withdrawal by check by the Postmaster General

(1) amounts requisitioned by the Postmaster General against appropriations available to the Department out of the general fund of the Treasury; and

(2) such amounts as the Postmaster General may, in his discretion, pay into the fund from receipts of the Department.

(b) The Postmaster General may, within limits of appropriations and subject to provisions of appropriation or other laws limiting expenditures or authorizing appropriations, use the funds of the Department, from whatever source derived, in the exercise of any power or function vested in him.

SEC. 4. The Postmaster General is authorized to designate the place or places, at the seat of government or elsewhere, at which the administrative examination of accounts will be performed. With the concurrence of the Comptroller General, the Postmaster General may waive the administrative examination, in whole or in part, when it is determined that the accounting and audit procedures of the Department otherwise adequately protect the interests of the United States. SEC. 5. The financial transactions of the Department shall be audited by the General Accounting Office in accordance with such principles and procedures and under such rules and regulations as may be prescribed by the Comptroller General. To the fullest extent practicable, as determined by the Comptroller General, all accounts of accountable officers, contracts, vouchers, or other documents which are required under existing law to be submitted to the General Accounting Office shall be retained in the Department and the audit shall be conducted at the place or places where the accounts of the Department are normally kept in accordance with the determinations of the Postmaster General. The representatives of the General Accounting Office shall have access to all books, accounts, financial records, reports, files, and all other papers, things, or property belonging to or in use by the Department and necessary to facilitate the audit, and shall have full facilities for verifying transactions with the balances or securities held by depositaries, fiscal agents, and custodians. In the determination of the auditing procedures to be followed and the extent of the examination of vouchers and other documents, the Comptroller General shall give due regard to the adequacy of the system of accounts and internal control maintained by the Department and to generally accepted principles of auditing.

SEC. 6. The amounts required to be certified annually by the Postmaster General to the Secretary of the Treasury and the Comptroller General by the Act of June 9, 1930 (39 U. S. C., sec. 793), shall be separately set out in appropriate reports of the Department.

SEC. 7. (a) There shall be transferred to the Department from the General Accounting Office such records, property, personnel, appropriations, and other funds of the General Accounting Office as the Postmaster General, the Comptroller General, and the Director of the Bureau of the Budget shall jointly determine in connection with the transfer of functions to the Postmaster General under section 2 (a) of this Act. Transfer of personnel under this subsection shall be subject to section 12 of the Veterans' Preference Act of 1944, as amended (5 U. S. C., sec. 861).

(b) All policies, procedures, and directives which are related to any function transferred to the Postmaster General by section 2 (a) of this Act, and not inconsistent with this Act, shall remain in full force and effect until rescinded, modified, or superseded by or under authority of this Act.

SEC. 8. In the performance of, and with respect to, the functions, powers, and duties vested in him, the Postmaster General may

(1) enter into such leases of real property as may be necessary in the conduct of the affairs of the Department on such terms as he may deem appropriate, without regard to the provisions of any law, except those provisions of law specifically applicable to the Department;

(2) accept gifts and donations of services, and of property (whether real, personal, or mixed, and whether tangible or intangible), in aid of any of the activities of the Department;

(3) offer and pay rewards in connection with violations of the postal laws. SEC. 9. (a) The President may, by Executive order, postpone the application of any or all of the provisions of this Act (except this section) for a period of not to exceed two years from the effective date provided in subsection (c) if he determines that such postponement is in the public interest and necessary to assure the implementation of this Act in an orderly and efficient manner.

(b) This section shall take effect on the date of enactment of this Act. (c) The other sections of this Act shall take effect on the ninetieth day following the day on which this Act is enacted.

SEC. 10. (a) There are hereby repealed—

(1) sections 405, 406, 407, and 408 of the Revised Statutes, as amended (5 U. S. C., secs. 378, 379, 380, and 381);

(2) Sections 277, 292, 293, 294, and 3674 of the Revised Statutes, as amended (31 U. S. C., secs. 73, 109, 111, 112, and 632);

(3) section 4 of the Act of March 3, 1875 (18 Stat. 343), as amended (31 U. S. C., sec. 113);

(4) section 4 of the Act of July 12, 1876 (19 Stat. 80), as amended (31 U. S. C., sec. 114);

(5) section 4055 of the Revised Statutes, as amended (39 U. S. C., sec. 787). (b) All laws or parts of laws inconsistent with this Act are repealed to the extent of such inconsistency.

The CHAIRMAN. This bill is the result of extended study and discussions at conferences which were attended by myself, Mr. Rees, the committee staff, and representatives of the Post Office Department, Department of the Treasury, Bureau of the Budget, and the General Accounting Office.

With respect to the recommendations concerning budgeting, accounting, and audit, the Hoover Commission stated:

We do not recommend that the Post Office should be incorporated under that law

referring to the Government Corporation Control Act of 1945as we consider that to be unnecessary.

We do recommend that the provisions of that law in respect to business management, budgeting, accounting, and audit be applied to the Post Office.

Such a provision will bring the Department into step with modern business methods and will not lessen executive or congressional controls. At the same time, it will provide flexibility in management, simplification of budgeting, accounting, and audit which will result in large economies.

The report further stated:

We wish to emphasize our recommendations elsewhere that the Department should keep its own accounts and make its own disbursements subject to audit by the Comptroller General and in accordance with procedures determined by the Accountant General, these procedures to be approved by the Comptroller General.

The budget procedures of the Hoover Commission recommendations for the Post Office Department have already been implemented in the 1951 Appropriation Act which has passed the House, and authorizing legislation is not required on this subject.

The proposed legislation will modernize and improve the accounting and auditing of the Post Office Department and implement the Department's new budget procedure. To effect necessary changes in functions and procedures and to give needed freedom of action to the Department, the bill

(1) Transfers the administrative accounting and reporting functions presently performed by the Comptroller General for the Post Office Department to the Postmaster General;

(2) Transfers the preaudit of expenses of the Post Office Department by the General Accounting Office to the Postmaster General; (3) Establishes the requirements of the accounting system to be set up by the Post Office Department and provides that the Comptroller General will prescribe the principles and standards for such system;

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