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Mr. KENNAMER. Mr. Busbey, of course this report, or the au it, was made January 28, 1953, 25 days after I was in office, and I am sure that the shortage never occurred during the 25 days I was in office.

The last audit that was made was made in January-not Januarythe last examination made by the General Accounting Office was March 7, 1949. There was not any other audit made of the folding room with reference to the yearbooks, since January--rather, March 1949, until January 28, 1953.

I do not know what happened to those books.
Mr. BUSBEY. When did you receive this audit?
Mr. KENNAMER. I received this audit 2 weeks ago.

Mr. BUSBEY. I might say for the benefit of the committee that I contacted Mr. Norman Simpson, who was in charge of this audit in the General Accounting Office some 5 weeks ago, trying to get it over here, and I was not particularly impressed with the excuse he made. I think an audit of this kind should have been in the Speaker's Office and the Doorkeeper's Office long before it arrived.

When you received this audit, did you have any opportunity, or have you had any opportunity as yet to make any determination about this shortage; have you contacted anybody regarding it?

Mr. KENNAMER. No; I did not.

Mr. Busbey. Did you have one of your men along with the General Accounting Office representative in taking the inventory?

Mr. KENNAMER. Yes; Mr. Stranahan, who was foreman of the folding room at the time, was the auditor in the folding room.

Mr. Busbey. The thing that concerns me, frankly, after this tremendous shortage of yearbooks in prior years is to have an auditor come in and find an additional shortage as of January 28, 1953. The total number of yearbooks that were missing on the former audit was 68,500. Now we have approximately 8,000 additional yearbooks short.

I do not know what the committee might want to do about it, but I think something should be done regarding a situation of this kind. I think it is very deplorable.

Mr. Horan. What is the pleasure of the committee? We could have Mr. Miller here to answer any questions,

Mr. BUSBEY. I personally think that Mr. Miller might be able to give the answer; I do not know.

(Off-record discussion.)

Mr. Horan. I would personally like to have the suggestion of the Doorkeeper concerning the installation of a sufficient card-index system so that we can at least keep current on the status of the number of yearbooks available to Members.

Nr. KENNAMER. This would have to do with keeping a current inventory of the folding room.

Mr. Horan. That is what I mean.
Mr. KENNAMER. I had reference to the Kardex system.
(Off-the-record discussion.)

REFUND ON PAPER SALES

Mr. BUSBEY. Mr. Kennamer, I understand they had to make a refund to one of the paper companies in the amount of some $12,000. Would you give the committee the benefit of your knowledge on that situation?

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Mr. KenaAMER. The refund was made to the Kline Paper Stock Co., which had the paper contract from February to August 14, 1951, whereby they had entered a bid over the ceiling price of $1.18 per hundred pounds. And, of course, they entered a claim against the Government for overpayment and for refund of $12,055.52, December 14, 1951.

Mr. Busbey. They had to refund that money because the contract was over the ceiling price, as determined by the OPS?

Mr. KENNAMER. The contract called for $4.38 per ton. That is what the contract called for, and the ceiling prive was $1.18 per 100.

WASTEPAPER AND YEARBOOK SHORTAGES

Mr. BusBEY. Mr. Chairman, I respectfully ask that the committee call Mr. Miller, the former Doorkeeper, and ask him to explain the two weeks' shortage of wastepaper, and also what happened to the records he was keeping in regard to the sale of wastepaper,

Mr. Horan. I see no reason why he should not supply that information. What does the contractor say?

Mr. Busber. The contractor claims that they received no paper during the 2-week period, and there are no receipts from the driver, to show that paper was taken out. The fact still remains that paper was taken out every day during those 2 weeks. Mr. Horan. Was the House in session at that time? Mr. KENNAMER. In August 1951. Mr. Horan. For the first 2 weeks of August? Mr. Busber. Yes; the House was in session in 1951 until October. Mr. Gary. Mr. Chairman, with reference to the shortage of books, it

appears that there is no question of fraud in the handling of these books, but that the shortage is due to the loose system used in accounting for them.

What steps do you propose to take to correct the situation for the future?

Mr. Horan. The suggestion is that we install a Kardex system, such as the Doorkeeper has suggested.

Mr. Busbey. I certainly do not want the record to show that I made any suggestion that there was fraud.

Mr. Gary. Certainly not, and I did not intend to indicate that there was any such charge.

Mr. Busbey. I have no knowledge of the setup, other than the fact that the audit does disclose a shortage, and I think something should be done about it. Mr. Horan. And that is what you propose, too? Mr. Kennamer. Yes. From my experience with the Kardex system, we can keep a current inventory of what is in the folding room, and by that means we can make a running weekly check, a spot check, showing whether any are taken in, or any leaving by any means, and that will just bring us right up to date as to what is actually in the inventory, and compare that with what the Congressman has drawn out against the folding room on his own account.

Mr. Horan. Can you supply us with an estinate of what it will cost? Mr. Kennamer. Yes; I can do that. As I say, Mr. Chairman, the cost is very nominal. I know it will not cost too much, and it could probably be taken out of the contingency fund.

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Mr. Gary. Have you started the installation of a system of that kind?

Mr. KENNAMER. No; I have not, Mr. Gary. I was going to take it up with the House Administration Committee.

Mr. Gary. Would that have to be authorized by the House Administration Committee?

Mr. KENNAMER. Yes; it would.

Mr. HORAN. We have with us the former Doorkeeper, Mr. William M. Miller, and I believe Mr. Busbey wants to make some inquiries of you, Mr. Miller.

WASTEPAPER SHORTAGE

Mr. BUSBEY. Mr. Miller, I am merely trying to clear up a situation that appears in the audit of the General Accounting Office of the Office of the Doorkeeper, dated January 28 of this year, in regard to the wastepaper that was removed from the baling room, between the period of August 1 and 14, 1951, for which we do not seem to have any record of payment. The audit report states that the paper company is very willing to pay for the paper if it can be shown that they ever received the paper, plus the fact that the present Doorkeeper, who is present, Mr. Kennamer, today states you did not turn over to him any records regarding the sale of this wastepaper.

Mr. MILLER. As far as I know, the paper was sold, and the man over there finds they have no record of the sales slips on that particular dav.

As far as the records that I did not turn over, I was merely following the procedure of my predecessor; he left me no records. I have the records, if you gentlemen would care to see them. I have not destroyed them.

Mr. Busbey. I certainly do care to see them, and I think it is important that the committee have the records, in order that we can ascertain just what happened during the period of August 1 to August 14. I do not see how we can ascertain what happened unless we do have the records.

Mr. MILLER. As far as I know they are down in the file cabinet and I can procure them in about 5 to 10 minutes, if I may leave.

Mr. Busbey. In the meantime, what is your explanation of the fact there are no receipts for this paper during the 2-week period?

Mr. MILLER. As far as I know there were receipts. Mr. Horan. Can you procure them? Mr. Busbey. I think in order to clear this up, we ought to have them.

Mr. MILLER. I can get the records in about 5 minutes.

Mr. Horan. We are interested in knowing whether paper was checked out of the baling room, and personally I would be interested to know whether the Kline paper people show receipt of any paper for that 2-week period. They should know something about it.

Mr. Miller. I did not say that I have the receipts.
Mr. HORAN. You can bring your records.
Mr. MILLER. Yes, I can get them in just a few minutes.

Mr. Busbey. I make the point that inasmuch as the present Doorkeeper is a Republican, that the records of the present Doorkeeper be turned over to whoever his successor might be. I think that is only a matter of good procedure.

(NOTE—The committee recessed for 10 minutes.)

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Mr. Miller. This is the paper, Mr. Chairman (indicating]. I procured the figures from the folding room.

Mr. Busbey. Vír. Miller, do the drivers, when they take paper out of the baling room, customarily give a receipt for the paper? Mr. MILLER. It has been in the past; yes. Mr. Busbey. Who keeps those receipts? Mr. Miller. Under the setup in the 82d Congress it was up to Mr. Gallaway, superiotendent, to have one of the men keep the receipts--whether it was Mr. Moore, the Chief Clerk, or Mr. Elgin, the foreman, I do not know. Mr. Busber. Were the receipts ever turned over to you? Mr. Miller. I am unable to find, from August 1 to August 14, for 1951, any correspondence whatsoever indicating that I had received Mr. Busbey. Do you have receipts for all other periods?

Mr. Miller. I have correspondence showing how much money; her they are supposed to keep the receipts over there.

Mr. Busber. The receipts for the 2-week period were never tumed
over to you at that time?
Mr. Miller. So far as I know; no.
Mr. BUSBEY. Did you contact Mr. Gallaway regarding the receipts
for this period of August 1 to August 14, 1951?

Mr. MILLER. I called on February 6, 1953, and found out that I
was unable to get the figures from the gentleman who was there at
the time-one of the present employees of the 83d Congress.
Mr. Buskey. Who was that employee?
Mr. MILLER. I believe the name is Ballard,
Mr. Kennamer, Ballard: Mr. Ballard is chief clerk at the present
time.

Mr. Miller. I called him to see if he could locate these signed
receipts, and that is as far as I have heard from him.

Mr. Busbey. Did Mr. Gallaway, the former superintendent, turn
over these receipts to Mr. Ballard, or anyone else in the folding room?
Mr. Miller. I do not know.
Mr. Busbey. The new superintendent when he took charge?
Mr. MILLER. I do not know. One of the other companies, known
the Paper Pen Stock Co.--they were always nice enough to return
the receipts with our bills, and then, also, Mir. Gallaway, the former
superintendent, would get his, and that showed the exact amount of
pounds removed, and also the date.

Mr. Busbey. Do you know if there are any receipts for the other
period of time?

Mr. Miller. As far as I know, I do not. All of the records that I have are wastepaper sold out of the Doorkeeper's office from the period of 1949 through 1952 and are available right here on the table.

Mr. Horan. The contract with the Kline Paper Co. was terminated
immediately after this experience?

Mr. Miller. It was terminated at midnight of August 14, as all
contracts have been in the past. They run for a period of 6 months,
Mr. Chairman. They did not bid on this particular new contract,
As far as I recall at this time.
Mr. Busbey. Mr. Chairman, I respectfully suggest that Mr.
Moyer see if he can get in touch with the former superintendent of
the folding room, and see if we can locate any of the receipts for the
Paper that was taken out during this period.

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Mr. Horan. What is your opinion concerning the way to correct this in the future, Mr. Kennamer? Would you suggest that this matter be turned over to the Government Printing Office; do you think that is a sound and reasonable suggestion?

Mr. KENNAMER. Here are the bids I received-I sent out notices to all wastepaper people that this contract is terminating as of such a date, and asked them for bids. Such bids were submitted by three paper companies, the Kline Paper Co., the Thomas Co., and the District Waste Material Co. on February 14, 1953. And the Kline Paper Co. made a bid of $8.36 per ton; the Thomas Paper Co. bid $3; the District Wastepaper Co., $5.20 per ton; so naturally I had to give it to the Kline Paper Company as they were the highest bidder.

Mr. HORAN. Are you requiring the return of a receipt, so that you know the receipt is not disposed of?

Mr. KENNIMER. You mean from
Mr. Horax. The Kline paper people.

Mr. KENNAMER. No. Their driver signed the receipt for the wastepaper, Mr. Chairman, at the time it is picked up, and those receipts are kept in the folding room, and each month Mr. Minnix, Superintendent of the folding room, sends me a statement showing how much paper has been taken out that month by the Kline Paper Co., and that has to tally with the account.

Mr. HORAN. Mr. Ballard apparently must have had some figures, or else he could not have come up with these figures.

Mr. KENNAMER. They do have records, but they do not have the receipts.

Mr. HORAN. They do not have the receipts.
Mr. KENNAMER. Yes, that is right.

Mr. Horan. The question that is uppermost in my mind is how can we make sure that the situation will be corrected so we will not have this experience in the future? The auditor suggests that the Government Printing Office take over the disposal of the wastepaper here, but in the absence of any suggestion or activation on the part of the Congress, you have gone ahead and let a contract which will run to the middle of August?

Mr. KENNAMER. No; I changed the contract to run from February to December 31, that is, the contract now runs from January 1 to June 30. This was a split of the contract in the middle of the year, and I have learned through dealings with wastepaper people that that is a bad time to let a contract. The best time to let a contract, to get the most for the wastepaper, is from January to June and from July 1 to December 31.

Mr. Gary. One question regarding the way to correct this: You stated that a report is turned over to you every month; is that correct?

Mr. KENNAMER. Yes.

Mr. Gary. If it were done each day, he could tell you each day's sales, and whether he got a receipt or not, for any wastepaper?

Mr. KENNAMER. I might explain that in April we did have a discrepancy in our account with the Kline Paper people, and thereby they did not pay for the full amount they received. I called them and I called their attention to it, and they said they would be most happy to correct it.

Mr. Gary. But as I see it they should never let a lapse of 10 days occur, but what someone should call up the Doorkeeper or the Superintendent.

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