Page images

Representative TABER. But not on questions where the invalidity of the expenditure has been discovered.

Mr. Buck. There is no way of knowing that until the Comptroller General, under the present system, has before him the expenditure.

Senator BYRD. The Comptroller General countersigns all checks now, does he not?

Mr. Buck. Checks are issued only with one signature, and that is the disbursing officer, as I understand it.

Representative GIFFORD. I want to bring up simply the question of the early C. W. A. That is where there were so many checks given out for labor that was never performed because of the difficulty of showing that the men were on the work. Of course, there were a tremendous number of those. There could not have been possible any recovery from those poor persons who received that money, could there?

Mr. Buck. Well, I should say it would be rather difficult.

Representative GIFFORD. Do you recall or do you not that they tried to hold the paymasters in those offices responsible for those checks?

Mr. BUCK. So I understand.

Representative GIFFORD. They asked Congress if we would forgive them for those mistakes.

Mr. BUCK. That is right; they sought relief at your hands.

Representative GIFFORD. Congress, I do not think, did that. I wonder how it ever came out.

Mr. Buck. I suppose those exceptions are still undischarged.

Representative GIFFORD. In that instance, then, they would ask for forgiveness of Congress, would they not?

Mr. Buck. Pardon me. I did not understand your question.

Representative GIFFORD. In all such claims, under a postaudit, if there was an attempt to recover after the act had been performed, it would be very difficult to hold an employee in the Government responsible, after the Treasury had handed it on? I cannot imagine how you would recover after you

audited it. Mr. Buck. Of course, you would have very much the same situation as at the present moment.

Senator BYRNES. What percentage is postaudited now?

Mr. Buck. I understand the Comptroller General now audits mainly travel vouchers and perhaps a few other claims that he is asked by the departments to audit, and those amount to perhaps 10 percent.

Senator BYRNES. I understood you to say that 90 percent of the amount of money is now postaudited.

Mr. Buck. Yes; under the present system, that is true. The checks have gone out and transactions are completed except that the vouchers or claims do not carry the stamp of the auditing officer of the General Accounting Office. For all practical purposes the transactions are fully completed.

Senator BARKLEY. If you exchange places with (13) and (14) all checks, all payments, regardless of whether there is any dispute about them or not, would have to be held up until they had gone through (14) ?

Mr. Buck. That is what we would like to avoid. We believe too, that that is not within the province of a correct postaudit.


Senator BARKLEY. But if you require that all checks, all payments, be audited in advance of payment, would not that result in an indefinite postponement of payment of practically 90 percent of the obligations of the Government about which there is no dispute?

Mr. BUCK. Of course, I have no way of judging how the Comptroller General could speed up his procedure. But according to the present rate at which he is working, it would be from 3 months to 3 years before he would be able to perform that audit so the bills could be paid.

Representative GIFFORD. Mr. Chairman, I will address this question to Mr. Gulick. He said he organized my State. He has talked so much about Massachusetts. Did they put (14) before (13) or after (13) there?

Mr. GULICK. They put the postaudit after the payment. The auditor of the State is an elected officer who makes exclusively a postaudit. There is, in addition, a control officer who is in the department of finance and is responsible to the chief executive who makes an audit before the payment. In other words, the plan suggested here is the same as the plan, essentially, that you have in Massachusetts, except that in Massachusetts there is no regional disbursing officer, there is no regional accounts office, because those are all centered in the State capitol at Boston.

Representative GIFFORD. But there is a preaudit before the bills are paid?

Mr. GULICK. There is a preaudit by the comptroller.
Representative GIFFORD. Under the control of the Governor?

Mr. GULICK. Under the control of the Governor, and the postaudit by an auditor who is independently elected.

Senator BYRD. Mr. Buck, I asked you a few moments ago as to whether the Comptroller General countersigns checks.

Mr. Buck. Yes.

Senator BYRD. He now countersigns warrants. You propose to take that authority away from him now and give it to the Director of the Budget ?

Mr. Buck. That is right.

Senator BYRD. Countersigning the warrants gives him the control, as an independent officer, over the expenditures. That, of course, would be taken away from him under this plan?

Mr. Buck. That control, Senator, is greatly exaggerated. You know there are various warrants that issue from the Secretary of the Treasury such as the warrants releasing the appropriations and authorizing the expenditures to be made by the disbursing officers. There are quite a number of them. The signing of these warrants by the Comptroller General is largely a formality.

Senator BYRD. You said a while ago the Comptroller General would take 2 or 3 years to audit these claims.

Mr. Buck. I said that he does now, with his present forces.

Senator BYRD. If he used the same forces, if he had the same clerical system as the Secretary of the Treasury, it could be done by the Comptroller General just as well; it is a question of giving him the necessary auditors to do it, is it not?

Mr. Buck. I do not think the present procedure could ever be speeded up to the point where claims would be paid promptly with the existing organization of the General Accounting Office.

Senator BYRD. Are you speeding it up to the point now whereby the postaudit (14) would be effected after the check had been delivered to those that will receive them and the money spent ?

Mr. BUCK. I say it is possible to do that if it is done immediately, but in most cases it would probably be afterwards, and would simply be a postaudit.

Senator BYRD. Under your plan of expediting the payment of the postaudit would be effected after the money has been paid to the recipient ?

Mr. Buck. I think I can clear that up when we get back to the top of the chart, at (21).

Representative GIFFORD. Mr. Buck, I am interested in the topic we are on now. Supposing the Post Office Department, because of the growth of a small community, found that the quarters for a post office were inadequate, and the Post Office Department saw fit to cancel a lease which had been signed, and the Government actually owned and had the right for 10 years or so, if the Post Office Department, granting that it was perfectly moral to cancel a lease and get a new one, in that matter heretofore the Comptroller General would not allow them to do it, would he?

Mr. BUCK. So I understand.

Representative GIFFORD. Under this new plan they could do it, could they not?

Mr. BUCK. Yes.

Representative GIFFORD. If they could do that without any legitimate excuse, then favoritism might possibly be exercised?

Mr. Buck. Yes; but there is a check here. Let me finish this and I will show you what the check is.

Representative GIFFORD. I am greatly interested in that.

Mr. BUCK. A check that you do not have at the present time. We have a very imperfect auditing system; in fact, one that I would say does not rank with the approved auditing systems of other countries at all.

I think we reached (16). We were talking about the exceptions. A series of conferences can then be held between the fiscal control officer of the Treasury and the Auditor General or his representative, at which an attempt will be made to clear up those disputed items; and, I dare say, that a great many of them would be so cleared up. That is the present practice. As you know, the number of items finally disallowed is rather infinitesimal compared to the aggregate amounts to which exceptions have been taken.

Now, we are at (18). We have had the conferences involving (16), (17), and (18), and we have cleared up a lot of these exceptions; but there are some of them that cannot be cleared up. Therefore, going from (18) to (19), the Auditor General will make a report on the basis of the findings of his audit, plus the explanations made by the Secretary of the Treasury or by the chief fiscal officer. The Auditor General will submit that report frequently to the Joint Committee on Public Accounts, going up to (20) and (21). The Joint Committee on Public Accounts of the Congress, as I visualize it, will sit around a table much as we are here today; and there would be present the Auditor General or his representative and the Secretary of the Treasury or the head of the fiscal control bureau of the Treasury. The Auditor General will bring in his complaints, and the Treasury officer will answer those and will satisfy, if possible, the committee. In the event that is not done the committee is then at liberty to make a report to Congress and to recommend any changes that it may deem necessary.

Senator BYRD. “Recommend any changes”; what do you mean by that?

Mr. Buck. Well, any procedural changes or changes in the law to correct the loopholes that enable administrative officers to abuse their privileges as spending officials.

Senator BYRD. And finally, after going through all these different methods and conferences, one thing and another, you find one Cabinet officer has illegally spent $1,000,000, how would you go about recovering that ?

Mr. Buck. Then you bring the Cabinet officer before the Committee on Public Accounts.

Senator BYRD. How would you recover the million dollars that has been illegally spent?

Mr. BUCK. You would still have open the same procedure, the process


you now use. Senator BYRD. Under your plan you haven't got the independent preaudit which you have now.

Mr. BUCK. You have one, indeed, Senator, which is more effective.

Senator BYRD. I think you overlook, Mr. Buck, fundamentally speaking, that the question we are considering now is the control of the Congress as compared to the control of the Executive. You have taken away from the control of Congress, as represented by the Comptroller General, certain authorities and duties that he now has, and you are giving those duties to the Secretary of the Treasury, appointed by the Executive and removal at pleasure by the Executive.

Mr. Buck. In the first place, Senator, I disagree with you on one thing, that the Comptroller General is a representative of Congress and an agent of Congress. He is about as independent as anyone in the National Government.

Senator BYRD. The act of 1921 so states specifically, that he is an agent of Congress.

Mr. Buck. Then why does he not report his audits to Congress? Instead of that, he buries the vouchers and claims that he approves, in his files, and, so far as I know, nothing else happens.

Senator BYRD. That matter can no doubt be explained. But the fact remains that Congress has set the Comptroller General up as an officer independent of the Executive and responsible only to the Congress. If he has failed to perform his duties at any time, another Comptroller General should be appointed.

Mr. BUCK. I think he has failed. Furthermore, I think, Senator, he could not succeed, because the system itself is wrong.

Senator BYRNES. Mr. Buck, you say that 90 percent of the money paid out is postaudited!

Mr. Buck. Yes.

Senator BYRNES. If a million dollars is illegally paid out today by a Cabinet officer, how would you recover it?

Mr. BUCK. That exception by the Comptroller General would go back to the Treasury, to the disbursing officer.

Senator BYRNES. How would we get the money today? Ninety percent of the appropriations of the Congress being postaudited, how would you get the money back today!

Mr. Buck. I am saying that the exception would go back through the Treasury to the disbursing officer, Mr. Allen. Then Mr. Allen would say, "I have got an exception here from the Comptroller General”, and he would send it out to the department concerned, asking the department for its explanation.

Senator BYRNES. What difference would there be, so far as getting the money back is concerned ?

Mr. Buck. There would be practically no difference.

Senator BYRNES. That is, as to the 90 percent. As to 10 percent, there would be, because 10 percent is preaudited, as I get it?

Mr. BUCK. Yes.

Senator BYRD. Mr. Chairman, I think the record should show that every warrant that is paid by the Government is countersigned by the Comptroller General, and to that extent there is a preaudit on everything that is spent.

Mr. Buck. If I may say, the warrant does not make the expenditure; it is the check of the disbursing officer.

Senator BYRNES. Suppose you state what the countersigning of the warrant means. Is it not simply a ministerial duty as now performed?

Mr. Buck. Yes; simply incidental to the whole scheme.

Senator BYRNES. Does it involve any investigation, as it is now performed

Mr. Buck. It may with contracts, yes; but generally speaking, it is a routine procedure.

Senator Byrd. It is not a routine procedure. If a suspicion exists that some department is making an illegal expenditure, in the sense that certain requirements of the law are not being obeyed, the Comptroller General can refuse to sign the warrant and can compel the department to obey the law.

Mr. Buck. Senator, if you will permit me to say so, the exceptions and the records of the Comptroller General are largely, if not entirely, based on the checks issued. Those exceptions are taken against the disbursing officer. There will be millions of dollars of exceptions outstanding which may be cleared up in the course of several weeks, several months, or even years. I understand that Mr. Allen, who is the Chief Disbursing Officer, has not had his accounts cleared since he came into office in 1934. There are several millions of dollars of exceptions outstanding against him, which he is gradually clearing up, and he may be able eventually to explain most of them. It has now been 3 years or more. He may have to come to Congress eventually for relief on the disallowances, in the event he cannot recover the moneys. But the moneys are gone, Senator, the checks have been issued and the expenditure has been made.

Senator BYRD. I fully understand that, Mr. Buck. That situation is exactly the same if the Comptroller General does not exercise his independent judgment as he should and permit illegal expenditures to be made; in the final analysis, if a million dollars is illegally spent, even under the present system, or under the new system, that is unrecoverable. I fully understand that, but that does not answer the

« PreviousContinue »