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moved because of certain actions or failure to perform certain duties or certain stipulations set out in the law.
Mr. SELKO. Yes, sir.
Senator BARKLEY. The Comptroller General has made no reports to the Congress, he has not been held accountable to the Congress, he has not advised Congress what he has done or has not done since he has been appointed.
Senator BYRD. Would you say he hasn't made reports, Mr. Selko?
Mr. SELKO. He is supposed to, sir. It is in the law. The Budget and Accounting Act provides that he shall make reports to Congress.
Senator BYRD. In fact, they have been made.
Mr. SELKO. We recommend that he make a more detailed and comprehensive report than he has been making.
Senator BARKLEY. He is required by law to report to Congress.
Senator BYRD. How many independent agencies do not report to Congress?
Senator BARKLEY. Still that does not take away their executive or administrative character.
Mr. SELKO. It appears to us fairly clear that Congress, in limiting the power of the President to remove the Comptroller General, and also removing from the Comptroller General the possibility of being reappointed to office, had in mind making that officer directly responsible to Congress and acting as an agent of Congress rather than as an agent of the executive branch. Now, we just simply take the position that Congress is entirely within its right in doing that, and Congress can do whatever it wants to.
The CHAIRMAN. The character of an officer, whether he is an executive, legislative, or judicial officer, is not determined by his name, or the limitations upon the time of his service, or any attempt to restrict existing powers of removal as to executive officers; his character is determined by the functions that he is called upon to perform. If he performs a function that is essentially an executive function he is an executive officer, although you may call him by name a legislative officer. You do not change his real character in law by giving him a name, or by requiring him to report to somebody.
Now, the question is: What are the essential characteristics of the act to be performed by this officer, whether you call him the Comptroller General, the Auditor General, or something else, and the answer to that question determines his status as an officer, whether executive, legislative, or judicial.
The Chair feels that we perhaps have lost this phase of the subject for the present. I am more interested in understanding what the representatives of the Brookings Institution recommend.
I asked you a question a while ago, whether you recommend that the Comptroller General be given preaudit power, the power of preauditing accounts, and I understood you to say that you did make that recommendation.
Mr. MERIAM. Yes, sir. We would like to see the administrative officers in charge of a bureau able to get in advance of taking any action an authoritative, binding statement that the object for which they propose to spend the money has been authorized by law, and that the procedure which they propose to follow in spending that money is the legal procedure prescribed by the Congress.
The CHAIRMAN. Under your plan there would be no necessity for a post audit?
Mr. MERIAM. The postaudit would be necessary, sir, in connection with the amount of money involved. That is, after your procedure has been declared to be legal, your object is legal. If you have exceeded the appropriation limitations, that is, if you have spent more money than you have left, that is the only remaining item for a postaudit. The legality of the object and the legality of the procedure would be passed upon in advance.
The CHAIRMAN. And you would make that determinable primarily by the Auditor General?
Mr. MERIAM. Yes, sir. They are the fellows that are going to pass on it finally. The old Comptroller of the Treasury used to pass on that, just the same as the Comptroller General now passes on it. They were administrative officers in the old days under the Comptroller of the Treasury.
Now, before I go ahead and spend money I would like to know definitely that I have taken the proper action, that my object is legal, my procedure is legal, because then it means that it goes right straight through. Where we get into trouble is in not knowing the procedure. It is more likely to be a procedural difficulty than a question of what we do is something irregular. It may be that people in our department, our solicitor, for example, would not necessarily know about the detailed procedural law. As a matter of fact in the old days, in the Department of Labor, I would rather have had the opinion of our disbursing officer than I would the opinion of our solicitor, because our disbursing officer was a man who spent years in the Government and was thoroughly familiar with these rules and regulations. Our solicitor was appointed from the outside and he himself generally would consult the disbursing officer, because the disbursing officer was a man who was familiar with the statutory law, the rules and regulations and decisions made under it. The lawyer coming in from the outside is not ordinarily familiar with that great mass of law and decisions.
There are a lot of laws scattered throughout. For example, a general law prohibiting the administrative officer from paying the expenses of his subordinate for attendance of conferences, you have got, let us say, no authority to send somebody to a conference, and if you send a person to a conference the first thing you know the expenditure is disallowed.
Now, that disbursing officer, when I was in the service, was the man who had all that law at his fingertips. Of course, it was subsequently reviewed by the Comptroller of the Treasury. If the disbursing officer had slipped up then of course there was a disallow
The result would be it would come back to the bureau, to the business manager of the bureau, and the business manager of the bureau would have to come back to the employee; he would have to get the money back from the employee.
We would like to see a situation in which the administrative officer can get a definite authoritative ruling in advance regarding the legality of his object, the legality of his procedure, because that is where the rub comes in.
Representative Vinson. Assume that a pre-audit unit were independent of any department and was responsible to the Executive, how would that work out! I mean was responsible to the President.
Mr. MERIAM. I do not know that there has been any material difference, as far as the administrative officers are concerned, between the present situation of reporting to the Comptroller General and the old one of reporting to the Comptroller of the Treasury. In neither case could the Comptroller of the Treasury nor the present Comptroller General be reversed by anybody. His decision was final, it was binding, nobody could reverse him. If you got in the Government service somebody whose opinion is final, a comptroller dealing simply with administrative transactions, we favor just as far as possible letting him notify the responsible administrative officer as to what he can do under the law and the prescribed procedure at the earliest possible moment. Then if you find that something you have got to do is illegal you are given notice of it at once and you can start your machinery for getting your authorization.
On the other hand, if you go ahead and spend the money, you have got it all spent, and then it is subsequently disallowed, you have got to go through all the red tape, delay, and cost of going back and doing it over again, and doing it correctly.
Representative Vinson. I mean, Mr. Meriam, whether or not you think it would work out satisfactoriy, if this preaudit unit were independent of any department and responsible to the Chief Executive?
Mr. MERIAM. You can do it either way.
Representative CoCHRAN. Do you recommend a preaudit of everything?
Mr. MERIAM. Yes, sir; a preaudit just as far as you can get it.
Representative COCHRAN. You want to have a preaudit of all expenditures of the Government !
Mr. MERIAM. Of course, a preaudit of all of this without exception is impractical. You would go just as far as you could.
Senator BYRNES. Who would determine how far you can go ?
Mr. MERIAM. You can go, by an adequate system of decentralization, you can go a tremendously long way.
Representative COCHRAN. The law at the present time provides that the disbursing agent would call upon the Comptroller General for a preaudit, where he is in doubt.
Mr. MERIAM. Yes, sir.
Representative COCHRAN. Now, as I understand it, the preaudit is only about 12 to 15 percent.
Senator BYRNES. You are going to leave it to the administrative official in the future to determine those cases that are in doubt, as the Congressman suggests, and ask him to interpret which ones he is to have audited and say as to others that he need not have them audited ?
Mr. MERIAM. There are a whole bunch of them, of course, that do not require a preaudit in that sense.
Senator BYRNES. Who is going to determine that question as to whether it requires a preaudit?
Representative CoCHRAN. Then you recommend a preaudit of all expenditures ?
Mr. SELKO. We recommend a preaudit on the present system.
The CHAIRMAN. We will have to suspend now. We will suspend until Wednesday morning at 10 o'clock.
REORGANIZATION OF THE EXECUTIVE DEPARTMENTS
WEDNESDAY, MARCH 31, 1937
JOINT COMMITTEE ON GOVERNMENT ORGANIZATION,
Washington, D. C. The joint committee met, Senator Robinson presiding.
The CHAIRMAN. The committee will please come to order. All right, Mr. Meriam.
STATEMENT OF LEWIS MERIAM AND DANIEL T. SELK0—Resumed
Senator BYRD. I think Mr. Meriam was discussing this preaudit proposition. Mr. Cochran asked him at the last meeting the question as to whether he preaudited everything.
Representative COCHRAN. I asked, as we adjourned the last meeting, if all the expenditures—I could not conceive that you really meant a preaudit of all the expenditures.
Mr. MERIAM. Dr. Selko has a memorandum on the historical basis for the preaudit in which I think he makes that point clear. Dr. Selko will put that in the record.
Representative COCHRAN. Let him make the statement, then, if he will clarify it.
Mr. SELKO. Section 8 of the Dockery Act of 1894, continued in effect under the Budget and Accounting Act, provides that
Disbursing officers, or the head of any executive department, or other establishment not under any of the executive departments, may apply for, and the Comptroller General shall render, his decision upon any question involving a payment be made by them or under them, which decision, when rendered, shall govern the General Accounting Office in passing upon the account containing said disbursement.
I might say that came from the United States Code, title 31, section 74. As originally enacted that read, instead of "Comptroller General", "Comptroller of the Treasury."
It is from this provision of the statute that the preaudit service has sprung. Administrative officers requesting advance information relating to the legality or regularity of a proposed expenditure had at first no uniform procedure for submitting their requests. Moreover, under the old disbursing system the disbursing officers who were attached to the administrative departments made frequent requests for advance decisions to relieve them of the responsibility of deciding against their administrative superiors on a question of law or procedure. First, the Comptroller of the Treasury and later the Comptroller General were obliged to make regulation governing the submittal of matters for their decision in order that they might have all the necessary information at hand. These regulations became
formalized with use and have finally been simplified so that the advance decisions called for by the statute quoted are rendered for the most part on the basis of certified vouchers with their supporting documents submitted by administrative officers for examination prior to the disbursement of funds.
The preaudit service has thus been the outgrowth of the desire of administrative and disbursing officers for advance information in regard to the legality and regularity of a proposed payment. The preaudit service has never been imposed upon any administrative or disbursing officers of their proper and legal responsibilities.
In our proposals for extending the preaudit service we likewise do not propose its imposition on any administrative officer, nor do we propose that it shall become the means of relieving administrative officers of their proper responsibility. We do propose, however, that administrative officers be bonded in order that the disbursing officers of the Government may not be required to bear the entire burden of prote
the Government from financial loss. We expect, therefore, that as the financial responsibility of administrative officers is increased there will be increased demand for preaudit and advance decisions. Accordingly, we recommend that provision be made for providing this increased service.
Representative Cochran. Your analysis and your viewpoint in no way answers my question. You leave it as is except in bonding the administrative Officer. You feel then that the administrative officer. as well as the disbursing agent, is going to come in and ask for a preaudit?
Mr. SELKO. Yes, sir.
Representative COCHRAN. It is my understanding, that we months and months behind in the postaudit, and we have increased the number of employees in the General Accounting Office over 100 percent in the last 2 or 3 years, due to the expenditures that have been made.
No preaudit has ever been made except where the disbursing officer asked for it, and therein lies the situation complained of in reference to the Comptroller General. If the disbursing officer had not asked for it, there would have been no dispute. Do you see the point! Every decision that the Comptroller General has rendered in the
form of a preaudit he rendered it at the request of the administrative officer or the disbursing officer.
Mr. SELKO. Yes, sir.
Representative COCHRAN. In some instances, when his decision was not suitable to the officials, they secured an opinion from the Attorney General, and I know of cases where they abided by the opinion of the Attorney General rather than the opinion of the Comptroller General.
To try to make a preaudit of all governmental expenditures, why you would have to have 50,000 employees in order to get out the checks without any delay.
Mr. SELKO. As you would gather from my statement, we do not propose a preaudit of all expenditures. We do not propose, in the first place, to impose a preaudit on the administrative officers; we