Mr. BENJAMIN. Have you been challenged on this before in court? Mr. STAATS. No. Mr. BENJAMIN. Are you being challenged now in court? Mr. STAATS. No. Mr. BENJAMIN. Is there any threat of suit regarding any of your cost standards? Mr. STAATS. It has been pure talk as far as I know. Mr. BENJAMIN. What is the pure talk, what pure talk? Mr. STAATS. It has been made by one or two university professors and I think maybe one of the trade association people. Mr. BENJAMIN. Recently? Mr. STAATS. No. Mr. KELLER. There has been nothing recent. Shortly after the Supreme Court case in Buckely vs. Valeo about 2 years ago, there was talk about CASB. I have heard nothing about it for a couple of years. Mr. STAATS. You see, Mr. Chairman, it comes back essentially to the point that you talked about a while ago. Theoretically Congress could write these standards in legislation if it could find a way to do it itself, you see, and there would be no argument then about constitutionality at all. I don't really think there is much to this, to be frank about it. FUTURE COST ACCOUNTING STANDARDS Mr. BENJAMIN. Please provide us with the list of any further cost accounting standards that should be developed to achieve the mission given the board by Congress and explain how said standards would satisfy that mission. Also indicate the projected costs for these proposed standards, and the time limit or the time that would be required to complete these standards. Mr. STAATS. We will do that. [The information follows:] A listing of additional Cost Accounting Standards that are in various stages of development is included as Appendix B (pages 10-13) of Mr. Staats' prepared statement. These are the projects that have been identified as of the beginning of March 1979 to further achieve the mission of the Board. The items included in this listing should bring about increased uniformity among contractors for each subject where little uniformity exists today. Other items listed would upgrade and update previous Standards and regulations issued by the Board. The projected costs of the projects in process that are listed in Appendix B cannot be estimated with any precise degree of accuracy. It is anticipated that these projects could be completed over the next 2 or 3 years. OTHER AGENCY INVOLVEMENT Mr. BENJAMIN. For the record, please advise us of all other governmental agencies dealing with negotiated defense contracts and explain why they could not adequately promulgate whatever standards remain. [The information follows:] No known problems have resulted from the location of the Cost Accounting Standards Board in the legislative branch. Congress' decision to locate the Board in the legislative branch is quite consistent with its decision in the Budget and Ac counting Act to place the responsibility in the General Accounting Office-also in the legislative branch-for promulgating accounting principles and standards applicable to the agencies of the executive branch. I am not aware, therefore, of any persuasive argument for reversing the Congress' decision, even though I recommended initially that the function be placed in the executive branch; however, not in any existing operating agency. In my opinion, it would be unwise to revert to the pattern which existed prior to 1970 where each agency was allowed to promulgate standards separately. Therefore, should the Congress decide to locate this responsibility in the executive branch, I believe it would be essential that it create a new statutory unit for this purpose, perhaps simply shifting the present Board to the executive branch and providing for a different chairmanship. It is not clear what advantage would accrue from this arrangement except that the Chairman would presumably be appointed specifically for this purpose by the President. Under the present arrangement, the Chairman is appointed by the President as Comptroller General who serves ex officio as Chairman of the CASB. The alternative which I suggested at the hearing of placing the responsibility in the General Accounting Office would retain the function in the legislative branch and would have the advantage of placing the responsibility in an agency having long expertise in accounting matters. It would also be consistent with the responsibility presently in the GAO for promulgation of accounting principles and standards applicable to executive branch operations. CASB PROFESSIONAL STAFF Mr. BENJAMIN. Please provide a list of each person employed by the CASB by grade level, salary and assignment. Provide this information for vacant and new positions. For fiscal year 1979 you requested 37 permanent positions. For fiscal year 1980 you request 35. Explain. [The information follows:] Listed below are the professional staff members employed by the CASB by title, grade level, salary and assignment. The same number of professional staff members are estimated for both fiscal years 1979 and 1980. Level V 47,500 Level V 47,500 These two vacancies have never been Allocation of Material-Related Expenses Allocation of Material-Related Expenses Independent Research and Development and Allocation of Selling and Marketing Costs Accounting for Intracompany Transfers Revision of Disclosure Statement Allocation of Manufacturing, Engineering Allocation of Selling and Marketing Revision of Disclosure Statement Cost of Money as an Element of the Cost of Assets Under Construction Capacity-Related Costs Capitalized Assets --Review of Accounting for the Impact of Inflation Review of Part 331 of Board Regulations Rosen, L. Associate Director GS-16 44,756 Accounting for Costs of Service Centers Standards in Operation Accounting for Costs of Service Centers Capitalized Assets--Leases Between Parties |