Representative WARREN. Are you not obliged to increase costs, though, when you establish regional Treasury account offices and regional independent auditing officers all over the country? Mr. Buck. Yes; but, of course, you are going to reduce the work of the General Accounting Office. I would imagine with three or four hundred first-rate auditors he could then do that work in the regional offices rather than require 4,000 or more people, as at present. Of course, many of his functions would be transferred to the Treasury, and the staff would go along with it. For example, claims and the legal division would be mostly transferred to the Treasury. Then there are in the regional accounts offices-we discussed those the other day. There would be perhaps from 12 to 20 of those, and they would consolidate the 48 offices you now have in the States that handle these emergency expenditures. So I suspect you could get sufficient personnel out of the 48 offices to operate 12, 15, or 20 regional offices that you would need under the permanent system. Representative WARREN. Well, of course, the emergency offices are supposed to be temporary. Mr. BUCK. Yes; I understand that. Senator BYRNES. Mr. Buck, may I ask a question there? It has been bothering me. I am referring to the question that the Congressman asked, as to whether this is supposed to be temporary. As a matter of fact, these emergency offices are handling funds not only for such organizations as P. W. A. and W. P. A., but they are handling funds for the regularly established departments, the Agricultural Department, for instance, in the highway fund, are they not? And various other departments to which emergency funds have been allotted? Mr. Buck. Oh, yes; they handle all those, or practically all of them. Senator BYRNES. Do you think we are going to be successful now in getting rid of the offices that have been established, knowing the history of establishing offices and getting rid of them? Mr. BUCK. You can answer that question better than I can. Senator BYRNES. I do not think so. That is why I am interested in the proposal you made to establish regional offices, because I am very pessimistic about this thing of abolishing offices once they are created. Senator TOWNSEND. Mr. Buck, last week you submitted this small plat [indicating]. Mr. BUCK. Yes. Senator TOWNSEND. Are we to discard that for the new one that you submitted this morning? Mr. BUCK. You do not need to discard it. The new one exhibits the same procedure, but in a different way. Senator TOWNSEND. It is on a larger scale, is that all? Mr. Buck. No; it is done according to the general arrangement of the chart, of the proposed procedure. You can follow that tube around, instead of being confused perhaps by those various arrows that go east, west, north, and south on the little chart. Senator TOWNSEND. Then the large chart is principally a reproduction of the small one? Mr. Buck. That is right. It is the same thing. Representative TABER. Mr. Buck, the big thing that would be accomplished by the operation that you propose would be to saddle onto the permanent pay roll of the Government all those so-called emergency employees who are now employed by the disbursing office of the Treasury, would it not? Mr. Buck. No; I would not say that. Representative TABER. Well, that would be the principal thing? Mr. BUCK. Perhaps. Representative TABER. To put them on the permanent pay roll? Mr. BUCK. Perhaps, if you could not abolish the offices, as the Senator remarked, that might happen. Representative TABER. This would provide a place where they could be put permanently, would it not? Mr. BUCK. Well, the better qualified ones might be taken into this service, provided they could attain a permanent status under civil service. Senator BYRNES. I understand your proposal is to reduce the number of offices and to establish regional offices instead of the 48 offices you have in the States? Mr. BUCK. Yes. Senator BYRNES. I think they are destined to be permanent unless you can have such a proposal as you suggest here adopted and make them regional offices instead of State offices. Mr. BUCK. I think it is the only sensible approach to the situation, because the volume of expenditures of the National Government is so large at the present time that it cannot be handled through any one office and also do all the accounting operations that are necessary to make sure that the appropriations are not misapplied. You must decentralize the fiscal operations from the standpoint of control and also from the standpoint of accounting, so that detailed accounts will be kept in these local offices and may, therefore, be kept abreast with the expenditures. From day to day, the central office would get reports from the field offices and the information from these reports would be compiled immediately. It is the only sensible way, as I view it, of carrying on the accounting work of the Government at the present stage of things. You probably could get along with 12 regional accounting offices, 1 for each reserve district, likewise 12 of the disbursing offices, and have them in the same building. Then you could have 12 branch offices of the Auditor General and his auditors could be right there to audit the documents and accounts. Representative TABER. Now, I want to ask you two or three questions as to the current procedure. With reference to this so-called preaudit, there are comparatively few cases where the Comptroller General has exercised that function, are there not, with the exception of expense accounts and those instances where the disbursing officer of a department has carried over to the Comptroller a request for a ruling, where he thought that the administrative offices of his department were apt to get him in bad and he, for his own protection, has carried the matter over to the Comptroller for a preaudit, that is the way such matters have generally gotten there? Mr. BUCK. Yes. I think there were more of those so-called advance decisions and preaudits about 5 years ago than there are at the present time. That is, some of the administrative agencies have withdrawn. But even so the preaudits amount to only, as I said the other day, about 10 percent. Representative TABER. But they establish principles that are followed in a great many cases afterward? Mr. Buck. I do not know that they establish rules any more than do the postaudits. I think the Comptroller General's rules are issued on any kind of audit, pre or post. Representative TABER. Well, if the disbursing officer finds out that a certain thing cannot be done he will not do it thereafter without going to the Comptroller General, is that not true? Mr. Buck. I think there is opportunity probably for consultation and for agreement, perhaps, between the General Accounting Office and the certifying officer of the Department. Representative TABER. Isn't that a desirable situation? Mr. BUCK. Well, you might have a possibility of collusion. Representative TABER. No more than you could between the Auditor General and the certifying officer. Mr. BUCK. I do know that various compromises are reached in discussions between representatives of departments and the Comptroller General's office. The Comptroller General will make demands that are finally compromised or reduced very materially from his first demands. Representative TABER. That would be the way with any kind of an auditor, would it not, in the natural course of events? Mr. Buck. Well, as to the auditor we are proposing, there would be no necessity whatever for his changing. Representative VINSON. There would be no opportunity to discuss control under this proposal? Mr. Buck. He would simply make his findings and report to the committee of Congress. Representative TABER. Oh, well, now, the auditor, you say, would have no such chance. Under your new set-up you provide just that kind of chance, do you not? Mr. BUCK. Well, I should think the give-and-take method under the administration, where the control is exercised by the Treasury Department, would be less harmful than if it were exercised by an officer like the Comptroller General who is completely outside of the administration, and with no check on him. That is a very, very weak spot in this present procedure. Senator BYRD. Less harmful to what? To the finances of the Government? Mr. BUCK. Yes. Senator BYRD. In other words, you think the Comptroller General will save less for the Government than the Secretary of the Treasury will? Mr. BUCK. I am not saying that, I am simply saying that, with an outside officer like the Comptroller General making decisions which might not be in line with the wishes of Congress, the possi bilities of such a thing are a great deal more likely in his case than they would be in the case of the Secretary of the Treasury. Senator BYRD. Why should the Comptroller General, who is directly responsible to the Congress, endeavor to thwart the desires of Congress more than the Secretary of the Treasury? Mr. Buck. We discussed that the other day, Senator. As the agent of Congress he has not reported to that body in 15 years. Senator BYRD. That is not the point. I asked you why. Mr. Buck. How are you going to hold an officer responsible, if he does not make reports on what he is doing? Senator BYRD. The reports are available. There will be an explanation of that. Mr. Buck. He makes an annual report. Senator BYRD. Do you think he is more inclined deliberately to thwart the will of Congress than the Secretary of the Treasury would be? Mr. BUCK. We will agree that he would not be more inclined to do so. But there would be a check on the Secretary of the Treasury, the check that we are proposing, while there is no check on the Comptroller General at the present time. Senator BYRD. I can see readily that considerable improvement can be made in the accounting system, but what I am disturbed about is that you take one of the chief agencies of the department of the Government and place in that department the control, and the only recourse after that is that the Auditor General can report to Congress after the money has been spent. Mr. Gulick testified it was the desire of your committee to make the Treasury Department simply a fiscal agency and to reduce the spending activities of that Department. Do you agree with that? Mr. BUCK. Yes; I do, in general. Senator BYRD. I want to call your attention to the fact that the President's committee, if their recommendations are carried out, is going to greatly increase the activities of the Treasury Department, not reduce it. Mr. Gulick was wrong when he testified the other day that it was the purpose of the President's committee to reduce the spending of the Treasury Department and make it merely a fiscal agency. Mr. Buck. Did he suggest to you that the proposal was to take the Health Service away from the Treasury? Senator BYRD. He did. I would like to put into the record these figures, and I would like the President's committee to answer me if I am wrong. Under the present appropriation bill for the year 1937 the Treasury Department will spend $1,920,524,033. To that must be added the purchases under the Procurement Division, which last year were $306,000,000. To that must be added eight new agencies, which Mr. Gulick admitted would be transferred to the Treasury Department in the event that the recommendations of the Presi dent's committee were adopted. These new agencies are the Farm Credit Administration, F. D. I. C., Federal Home Loan Bank Board, H. O. L. C., F. H. A., Government Printing Office, R. F. C., and Mortgage Corporation. Now, the total appropriations for those new departments is $70,283,391. Then four agencies would be removed from the Treasury Department. The appropriations of those four agencies are $22,120,075. Therefore, the total expenditures of the Treasury Department, under the new plan, with the Budget that we now have, would be $2,296,807,424, from which should be deducted the debt retirement and the interests, including deficiencies, amounting to $1,431,383,725, leaving a net disbursement of the Treasury Department for admin istrative expenses of $865,413,699, which is very considerably in excess of the present expenditures. In addition to that, you have transferred the claims to the Treasury Department, and I have no information as to the amount of money involved in the transfer or the settlement of the claims from the Comptroller General to the Treasury Department. Perhaps you can furnish that. Instead of reducing the Treasury Department as a spending agency, as Mr. Gulick said was the purpose of the President's committee, you are greatly increasing it, and the Treasury Department will themselves preaudit their own accounts; there can be no appeal to the Attorney General, because no interested person within the Treasury Department could appeal, and the only protection that the Government has is after the money has been spent and a postaudit by the Auditor General and reporting to Congress. It does seem to me that if you want to take this control away from the Comptroller General on the theory he is interfering with the functions of the Government, you ought to put it in some department that is not one of the largest spending agencies of the Government, which is in accordance with the testimony of Mr. Gulick. Mr. Buck. I do not know that I agree all the way through with the transfers made there, but that is beside the point. I hardly think, under the present scale of national expenditures, you would be able to find any point in the administration at which you could lodge control and a general accounting system that would not carry with it a considerable expenditure of funds. Even the General Accounting Office itself has grown enormously. Senator BYRD. I would like to ask, Mr. Chairman, that the President's committee, which recommended the transfer of the claims from the Comptroller General to the Secretary of the Treasury, give to this committee an estimate of the amount of money involved, because that amount of money should be added to the figures I have just given. Representative GIFFORD. Mr. Chairman, I have a suggestion that I want to make. I think it is proper at this time, due to our anxiety over the control. I would like to have the committee consider this illustration. Under the W. P. A. appropriation that you made, I understand there was a limitation placed on how this money might be expended. Certain people importuned the President for a trip to Europe to study cooperatives. They were in the W. P. A. set-up, and they wanted to go to Europe with relief money. They found they could not use that money, so the Federal Surplus Commodity Credit Corporation was ordered to furnish the money. Some resigned from the W. P. A., and, under a larger salary, went to Europe. They went over a large section of Europe. Legations were put to a good deal of expense and trouble in entertaining them. They had several |