Page images

office here at Washington, and then they are transmitted from (14A) over to the General Accounting Office. It is on the basis of those documents that a settlement is made with the disbursing officer by the General Accounting Office, and in course of auditing those vouchers—by a postaudit in most instances, as we discussed the other daycertain exceptions may be taken. In that event those exceptions flow back to (16A), which is the regional treasury disbursing office, or perhaps to the central disbursing office here in Washington, and then is sent by Mr. Allen to the regional office concerned, the idea being, of course, that responsibility lodges in the officer who disbursed the money, and, therefore, he is held accountable for clearing up any exceptions which may be taken by the General Accounting Office.

We discussed at some length the other day just how those exceptions might be cleared up by the Congress giving relief after they had gone on for a great while. We also mentioned the fact that exceptions were very much larger in the beginning than the items that were finally disallowed by the General Accounting Office, because usually the whole voucher is held up when only a few dollars in the voucher may have been excepted.

Representative COCHRAN. Well, is it not true that before the General Accounting Office discovers that a mistake was made the money has already been paid?

Mr. Buck. Yes; we said the other day that in 90 percent of the cases that was true.

Representative COCHRAN. Under your new set-up would that be prevented ?

Mr. Buck. Well, under the new_set-up we would have a very thorough audit by the Bureau of Fiscal Control, in the Treasury Department, before the payment had been made.

Representative COCHRAN. At the request of the executive branch of the Government in the last Congress I introduced a bill to relieve disbursing officers of $750,000 in overpayments on C. W. A. That bill came to me through the Speaker of the House, being referred to me as the chairman of the Committee on Expenditures. It developed that we inaugurated the C. W. A. program overnight to take people off of the direct dole, to give them something to do so they would be able to hold up their heads, so that they would feel they earned money rather than that it was handed to them. They were put on every kind of conceivable project, raking leaves and everything else. Now, those men did not have anything to eat, their families did not have anything to eat unless they received some money. They had to have their pay on Saturday, and if they did not have their pay on Saturday you would have a riot in every big city in the country. So they had to prepare the checks starting with Wednesday or Thursday. That was the explanation. If a man was on the pay roll on Wednesday or Thursday he got paid for the full week, he got his check and cashed it, and it was weeks and weeks and maybe months before it ever reached the General Accounting Office, and then they discovered that the man had not worked the full week. He did not work Friday or Saturday so he was overpaid $1.50 or $3. There were so many cases like that that the total amount is $750,000.

Suppose that situation would develop again under your new system; do you mean to tell me you would hesitate and wait until the accounts were audited before you would give the man a check?

Mr. Buck. No. Under the new system we would be able to handle it more rapidly than you would be able to do under this system.

Representative CocHRAN. Assume the country got into that condition again where we would have to do the same thing, would not we have to duplicate that action?

Mr. BUCK. No. Under the proposed system all of the necessary administrative audits could be performed immediately, or within a very short time, and the checks could be sent out. You could be reasonably assured, under that system, that you would not have pay. ments made which were not proper or legal.

Representative COCHRAN. Do you think you could check against the pay roll which you would not get until the week was over, going over possibly two or three million employees' records?

Mr. Buck. The only audit you get at the present time is that now performed by the temporary branch of the Treasury that handles the emergency appropriations for 1935 and 1936. You certainly have no check from the General Accounting Office on anything of that kind. If you do not audit it before you pay it, you do not catch it at all. All that you catch at the present moment, you get in this emergency set-up under the Treasury Department.

Representative COCHRAN. I understood you to say if you do not catch it before, you do not catch it at all.

Mr. BUCK. Under this system, because what could you collect

Representative COCHRAN (interrupting). Wait a minute. I will show

you where you are wrong, because it was the General Accounting Office that notified the executive branch of the Government that they overpaid these men. They were the ones that caught it.

Mr. BUCK. Then the disbursing officers came to you for relief because they could not collect it from a fellow who hasn't got anything. What I say is that if you do not do it by a preaudit, you do not do it at all.

Representative COCHRAN. The disbursing officers wanted the relief. I am saying it is impossible to do it by preaudit in an emergency of that character. Mr. Buck. I am saying that under this proposed system it can be

done very 48 Representative COCHRAN. You mean to say that 3,000,000 checks can be checked carefully within 48 hours?

Mr. BUCK. I think so.

Representative COCHRAN. You mean to say you can have a preaudit of 3,000,000 checks within 48 hours! How many employees would it take

Mr. Buck. Of course, the checks are not the only things to audit.

Representative COCHRAN. You understand you have a timekeeper on the job; here is a crew that is working on C. W. A. right here in this room, and I am the timekeeper; on Wednesday I put down our names and send those into the office, and I say, “These men are working at so much a day on this day." When the week ends they make up the check, and the checks are sent back and they are paid on Saturday. Now, they do not get the complete pay roll until the week is ended.

Mr. BUCK. You are anticipating that a man may leave his job before the end of the week.

Representative COCHRAN. Certainly that is what happened. I am talking about this emergency set-up.

Mr. Buck. You are talking about James Smith, or John Jones. He will be on the job the balance of the week, the balance of the month. If he hasn't earned the money, you can make an adjustment.

Representative COCHRAN. How are you going to get the money out of him when he has left the job? He does not have a dime. It would cost 10 times the amount to try and recover and then you would never get it, because they do not have it to pay back.

Mr. BUCK. You would assume that the salaried employee would have a few dollars.

Representative COCHRAN. I am talking about the emergency fellows that leave the job every day.

Senator BYRNES. How do you check on the W. P. A. now?

Mr. Buck. It is now checked through the organization set-up in connection with Mr. Bartelt's office, the Commissioner of Accounts and Deposits.

Senator BYRNES. Are they not very much like the C. W. A. workers?

Mr. BUCK. It is all done in the field. It is a very good example of the system we were talking about the other day, the one we propose, because it is highly decentralized. There is a branch office in every State, as you know. You get back to the point where the volume of work is greatly decreased, and then you can handle the tremendous amount that now flows into and chokes the General Accounting Office. It looks like it is an impossible task, but when you get the work split up among 48 offices you can then handle it with greater ease. You can also know more about the actual services that are being rendered, and therefore be able to check them with greater accuracy out there in the field than you could ever do in Washington. Certainly if you let that kind of work go for a few months, even 3 months, as is now the case with the General Accounting Office, you are almost hopelessly lost.

Representative GIFFORD. Now, can we finish that historical narrative? They came to us for relief, that is, the disbursing officers came to us for relief. Did we give them relief; and if not, what happened?

Representative COCHRAN. We reported the bill favorably, but it never was called up in the House. The matter is still pending and will be until Congress relieves the disbursing officers.

We have a second one, which I also introduced, and we called the disbursing officers down before the committee and called the Comptroller General down before the committee. They came back again the other day.

I introduced a bill yesterday by request. I so marked it because I did not want anyone to think I am responsible. That overpay. ment, according to the War Department disbursing officer, amounted to approximately $750,000 also, but in the report that came in day before yesterday the General Accounting Office had checked up and found the overpayment was $250,000. That came up in another way. They had taken a relief appropriation and asked the General Accounting Office for permission to raise the salaries of employees in Washington, and the General Accounting Office, in my opinion, very properly ruled that the relief appropriations were not for the purpose of increasing the salaries of the employees in Washington, because we were not granting relief to them; we were granting relief to the people that were out of employment, that needed it. They would not accept the General Accounting Office ruling on that and had the President issue an Executive order. That Executive order was sent to the Attorney General of the United States, and he rendered an opinion that the President had the right to issue

the Executive order, and then they increased the salaries of the Washington employees.

Well, as the result of that you have now $250,000—it was reduced from $750,000 to $250,000—overpayments charged against the disbursing officers. They want to relieve those disbursing officers. Is that the fault of the General Accounting Office ?

Mr. Buck. No; I would not say so. It is the fault of the system.

Representative COCHRAN. I am not here to defend any Government agency if they are making mistakes, but I do not believe in having a Government agency attacked that should not be attacked in certain instances.

Mr. Buck. But the General Accounting Office is part of the system, and that is what we were discussing.

Representative COCHRAN. The Attorney General overruled the General Accounting Office, the President issued an Executive order, and the Attorney General of the United States gave the executive department an opinion that resulted in the payments being made.

Representative GIFFORD. Mr. Buck, is this for the wastebasket now, this chart that you gave us last week?

Mr. BUCK. Oh, no; that is what we hope to obtain.
Representative GIFFORD. You have two charts here.

Mr. BUCK. If I may explain that, the one that I gave you last week is the proposed system, and the one I gave you this morning is the present system. The two charts are drawn on the same basis, so that you may put them side by side and see the comparison.

Representative GIFFORD. I want to find out if this is a new one and whether we can throw the old one away.

Mr. BUCK. No.

Senator BYRD. Mr. Buck, can you explain the difference between the two plans? Under the new plan here the expenditures take 21 trips and under the old plan they took 18. I would like to have you explain definitely the different trips they take, and exactly why it is.

Mr. Buck. Before you came in, Senator, I did go over the trips very briefly.

Senator BYRD. I would like, if you can, to take trip no. (1) and compare trip no. (1) under the old plan with trip no. (1) under the new plan.

Mr. Buck. Those are the same, Senator, you will observe if you put the two charts together. Let me see if I can clear that up. One of the major differences between the charts, you will observe is the lack of a systematic and centralized accounting organization. There is great need for an accounting system we think in the Treasury Department, through which all this information can be filtered and from which the Executive and the Congress can get reports that really mean something.

Then you will observe on the right-hand side of this chart of present expenditures, that the procedure seems to run very fre

quently to the General Accounting Office. Finally, it is a repository for all of the records, no. (18) being the end of that trail, you might say.

Senator BYRD. Just let me ask this question: Is the present chart made up on the idea that you have a precontrol or preaudit of expenditures ?

Mr. Buck. No; it is supposed to give you just what you have.

Senator BYRD. You stated a little while ago that the main function of the General Accounting Office is the control function.

Mr. BUCK. Yes.

Senator BYRD. It was testified here that only 10 percent of the accounts are precontrolled, preaudited.

Mr. Buck. If you look at it that way, if you regard the control which the General Accounting Office exercises as being one that emanates from a preaudit, then it is only 10 percent. But I am assuming that it exercises control, as well, over those expenditures which it postaudits.

Senator BYRD. How can you exercise control over an expenditure that has already been made ?

Mr. Buck. Oh, you may review it certainly.

Senator BYRD. I mean control in the sense that you are interfering with an administrative function of the Government. That is the contention, is it not?

Mr. BUCK. Yes; that is true.

Senator BYRD. Íhe money has already been spent. That control cannot interfere with the administrative part of it, can it?

Mr. BUCK. Oh, yes; it can harass. The General Accounting Office can start harassing the Department in the matter of contracts.

Senator BYRD, You have that same power under your plan to harass them. You have a postaudit,

Mr. Buck. Yes; but the harassment under the proposed plan is one induced by the Executive who controls or should control the administrative functions, whereas under the present plan you have all the irritation coming from this agent of Congress.

Senator BYRD. You do not think there should be any irritation, assuming that a department illegally makes an expenditure?

Mr. BUCK. Oh, yes; yes. I would not condone an illegal expenditure, and I think under the proposed system all those expenditures would be ferreted out, and what is more, they would be brought to the attention of Congress through an independent postaudit. A much more effective accounting could thereby be obtained than under the present system.

Senator BYRD. But when we speak of control we mean, as a rule, the control of an appropriation before it has been disbursed, is that not true?

Mr. Buck. No; I never did so regard it, Senator.

Senator BYRD. You think that with the power of the postaudit in your plan there will be no irritation or harassment of any of the officials of the Government?

Mr. Buck. The main irritation would come from this joint committee of Congress. If the administrative officials were called up here and the committee asks them why they did this or that, they would be a little bit irritated, perhaps chagrined, and I think it would be salutary.

« PreviousContinue »