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(Witness: Zappone.)

fiscal year. The accounts vary greatly, so far as their importance and technical character are concerned. In other words, salary accounts, naming a specific amount for salary, are rather easy to audit, provided there are no broken periods of service involved. There are salary tables to follow, and the auditors assigned to that work are principally clerks in the $1,400 grade. In the $1,600 and $1,800 grades the auditing becomes very much more difficult, the vouchers relating principally to freight accounts, which involve both land-grant and bond-aided amounts, and travel accounts, which are surrounded by many technicalities. The line of demarcation between these grades is very distinct, and promotions are progressive promotions, based upon efficiency and the quality and character of the work turned out by the employee; not on length of service. Length of service is only considered as a factor when other conditions are equal.

I would like to add here that during the past five years there has been no incre se in the force of the Division of Accounts, while the approprictions of the Department have increi. sed practic: lly 100 per cent. In consequence, during the present year the Secretary his had to det. il four clerks to my office to issist in the work. The Committee on Agriculture for next year his permanently provided for those clerks on my st tutory roll, and his ilso given me a few extra clerks to handle the addition: I work resulting from the increased appropriations. In the appropriation bill for next year the increase, as the bill came from the Committee on Agriculture, is something like a million dollars. You can readily underst. nd th t with these increased appropri tions we must have additional help to disburse them.

The CHAIRMAN. Thut simply increases the volume of work?

Mr. ZAPPONE. It increases the volume of work. We have the machinery for doing th_t work; it merely means that it takes a few more people to do it. For inst nce, a few years ago we had but one draft clerk. Now, during the first ten days of each month it tukes six people to handle th t work. This shows the present volume of the work and incident.lly the way the business of the Department

The CHAIRMAN. Is there a substantil distinction between the duties discharged by these various grades of clerks?

Mr. ZAPPONE. Undoubtedly, as I have already explained.

The CHAIRMAN. Tht is, do you me n by tht that the clerks of different grades do different things, or that the work differs in qu. lity?

Mr. ZAPPONE. They do different things, in this way: The quulity or character of the work is different, as I have just explained in regard to the accounts. We have simple or er sy accounts to audit; we have moderately difficult_accounts to audit; and we have very difficult accounts to audit. I have known an auditor to spend an entire day on one exception lly difficult account.

The CHAIRMAN. I hat requires one of the experts?

Mr. ZAPPONE. That requires an expert. I will say, Mr. Littlefield, that we go over all accounts very closely indeed. If you recall, thé accounting officer of the Treasury said that our accounts were in very nice shape; the best that came to his office.

has grown.

(Witness: Zappone.) It might be proper to add right here that when I assumed charge of the Division of Accounts the Secretary of Agriculture issued the following order: General Order, UNITED STATES DEPARTMENT OF AGRICULTURE,

OFFICE OF THE SECRETARY, No. 95.

Washington, D. C., February 15, 1906. Hereafter, with a view of securing uniformity, the Chief of the Division of Accounts and disbursing clerk, as chief financial officer of this Department, will inquire into the receipt and disbursement of all moneys, the auditing of all accounts, the keeping of all liabilities, and the methods of doing business in connection therewith, in the various bureaus and independent divisions of the Department of Agriculture, making inspections from time to time, and reporting to me any change or modification necessary toward facilitating the public business and safeguarding the moneys of the United States.

JAMES Wilson,

Secretary of Agriculture. In accordance with that order, I have already made an inspection of all bureaus and divisions, with the exception of one or two of the larger bureaus. I found that they were transacting and keeping a record of their financial affairs and the auditing of accounts in a very excellent way, but that they were using too many books, and that there was a slight lack of uniformity. I called together in my office all the accounting clerks of the various bureaus and divisions, discussed the matter with them very thoroughly, and recommended the adoption of two books which I had planned, one of which I called a liability book and the other a ledger. They fully agreed with me that the adoption of these books would be very advantageous, as it would bring about uniformity. That system has since been put into effect.

The CHAIRMAN. That also simplified the work?

Mr. ZAPPONE. It simplified the work very much. If the committee is sufficiently interested in the subject, we can have these books here, with one of the accounting clerks to explain them. I do not know that you wish to go into it to that extent, but in that way you could see the method of handling accounts in the different bureaus before they are sent to me for payment.

The CHAIRMAN. Was the expense of going over the accounts reduced as a result of this simplification?

Mr. ZAPPONE. Yes, sir; it was. In one bureau, by consolidating the work under the new system, a single clerk is now doing the work that was formerly done by two.

The CHAIRMAN. The fact is, then, that it minimized the expense to quite a degree?

Mr. ZAPPONE. Noticeably, in that one case at least. In the other cases only one clerk was doing the work formerly, and the reduction in expense would mean that he would have more time to apply to other purposes.

The CHAIRMAN. That is the same thing. He is able to render more service in other directions than he was able to render before?

Mr. ZAPPONE. Yes, sir; I think he is now able to render more service in other directions.

The CHAIRMAN. How are the accounts of the Department audited ?

Mr. ZAPPONE. The method of auditing and paying accounts may be summed up briefly as follows: All accounts against the Department go direct to the bureaus and divisions having supervision of the (Witness: Zappone.) disbursement of the several funds, where they are given a preliminary audit and are checked up with their records, to see that the expense has been properly authorized. For example, if it is an account for expenses incurred by one of their men, such as an account for travel, or personal services, the bureau checks it to see in the first case whether the journey has been authorized, or in the second case that the man has actually performed service during the period named. The account is then approved by the chief of bureau and sent to my office for payment. My clerks then give these accounts a close examination, which is at one and the same time an audit for my protectionI am bonded to the United States in the sum of $50,000--and an administrative scrutiny for the Secretary's office. I am financially responsible for all disallowances which may be made by the accounting officers of the Treasury; therefore a very careful audit in my office is necessary. After this examination the accounts are paid; but before they go to the Treasury they are abstracted and given a final review by three men, my best experts, who pass upon their form and style, for the purpose of eliminating any little technical irregularities which may have escaped notice in the first audit.

The subsequent course which these accounts take is briefly but
clearly set forth in the Secretary's order of October 9, 1906, which
reads as follows:
General Order,
UNITED STATES DEPARTMENT OF AGRICULTURE,

OFFICE OF THE SECRETARY,
No. 102.

Washington, D. C., October 9, 1906. In compliance with Treasury Department Circular No. 51, from the Comptroller's Office, under date of June 22, 1906, in regard to certification of administrative examination of accounts, the disbursing clerk of the Department of Agriculture will hereafter submit his consolidated account current and abstracts of disbursements to the Secretary of Agriculture (chief clerk's office) promptly after the end of each quarter. The chief clerk will refer the abstracts of disbursements to the chiefs of bureaus and divisions having charge of the appropriations to which the abstracts pertain, who will have them carefully examined and compared with the records of their bureau or division. In order to prevent possible collusion, the examination should be by persons other than those who prepared and checked the vouchers before payment. Such examinations will be evidenced on the abstracts, with the prompt return thereof, in the following manner:

Bureau !
Division)

Date:
Respectfully returned to the Secretary of Agriculture. I certify that this abstract

Bureau has been carefully examined and compared with the records of this

Division) Credit for expenditures in the amount of $......, which is hereby approved, is recommended.

190.

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This indorsement should be accompanied by a statement of differences, when such differences are found in the account.

Should reference to the vouchers be necessary in special cases, they will be found on file in the disbursing clerk's office and may be examined at any time.

Upon return to the chief clerk of all the abstracts, he will reassemble the account, have the same approved by the Secretary of Agriculture, and transmit it direct to the Auditor for the State and other Departments, Treasury Department, Washington D.C.

JAMES WILSON, Secretary of Agriculture.

(Witness: Zappone.)

Please note that after I have sent these accounts to the Secretary's office I do not see them again. All subsequent action in connection therewith is independent of my office.

In regard to the system of bookkeeping employed in the Division of Accounts and Disbursements, I took the liberty the other day of asking the committee to permit me to bring the books up here for examination, or, better still, to have the committee visit the Department and examine them there. As you are very busy, I can bring them up to you this afternoon, and in a very short time, with the aid of my bookkeeper and assistant bookkeeper, show you the kind of books we actually keep and give you a clear insight into our work.

The CHAIRMAN. If you think it will be of advantage, we shall be very glad to look them over at that time.

Mr. ZAPPONE. I do, sir. They are all up-to-date, modern books which I introduced into the Department. I shall also bring my combined account current, which, as Mr. Jacobs, the accounting officer of the Treasury has explained to you, shows the financial transactions of my office for an entire quarter. The form which I shall exhibit briefly summarizes the expenditures of the quarter ended December 31, 1906.

(When the committee reconvened at 2 p. m., Mr. Zappone, accompanied by his bookkeeper and his assistant bookkeeper, displayed the financial books of the Department and explained in detail the methods employed by the disbursing office in recording the expenditures of the Department.)

The CHAIRMAN. What rule obtains in your division in relation to promotions—upon what basis are they made?

Mr. ZAPPONE. The promotions are based upon the general plan of the Department; that is, upon an efficiency blank, setting forth the different elements that go to make up the basis or foundation for each promotion. The character and quality of the work of each clerk are very carefully determined and made a part of the record. Upon that record I base my recommendation to the Secretary for the promotion of a clerk when a vacancy occurs in my division. That goes to the board on promotion review, consisting of the chief clerk, the appointment clerk, and myself. When the recommendation made by me is seen to be in accordance with the efficiency reports, the board forwards the papers to the Secretary, and the promotion is made.

The CHAIRMAN. Have you had any reductions in your office by the operation of that rule?

Mr. ZAPPONE. Yes; I have been compelled to make one reduction. I say "compelled,” because I think it is something that none of us, as a rule, want to do. But I found that one of the clerks of my division was receiving more money than was earned, and I recommended a reduction from $1,400 to $900.

The CHAIRMAN. That was quite a pronounced reduction.

Mr. ZAPPONE. It was a pronounced reduction, but I felt that it was necessary in that case.

The CHAIRMAN. Was that reduction based on the efficiency report?

Mr. ZAPPONE. It was based on the efficiency report, which showed that the work of this particular employee was not up to the standard of the $1,400 grade. In auditing accounts a number of mistakes had been made, showing a waning efficiency.

1161

DIVISION OF ACCOUNTS AND DISBURSEMENTS.

(Witness: Zappone.)

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The CHAIRMAN. Have you any employees in your division who are now occupying grades higher than the efficiency reports would justify them in holling?

Mr. ZAPPONE. That is a very difficult question for me to answer, Mr. Littlefield. All of my clerks do very good work. Some are more efficient than others, but they are all doing excellent work, and I think I can safely say that my clerks will compare favorably with the clerks in any other branch of the Department.

The CHAIRMAN. The question was whether the positions they now hold are justified by their efficiency rank obtained in the manner that you have described.

Mr. ZAPPONE. They certainly are, sir.

The CHAIRMAN. Have you in your division anyone who has employment outside for private parties ?

Mr. ZAPPONE. No, sir.

The CHAIRMAN. Do you have anybody in your division who is employed in any other ?

Mr.ZAPPONE. No, sir. I have an assistant chief of division who is in charge of the branch of my division at the Weather Bureau, and works there and at my office at times.

The CHAIRMAN. But only on one salary?

Mr. ZAPPONE. Only one salary; and that, of course, is earned directly in connection with the work of my

division. The CHAIRMAN. Make any statement you like, Mr. Zappone, with reference to the general duties of your division, so that the record will show exactly what work is done by your division, what it accomplishes, and its utility and necessity.

Mr. ZAPPONE. The Division of Accounts and Disbursements audits, adjusts, and pays all accounts and claims against the Department; deci les questions involving the expenditure of public funds; prepares advertisements and schedules for annual supplies, and letters of authority; writes, for the signature of the Secretary, all letters to the Treasury Department pertaining to fiscal matters; examines and signs requisitions for the purchase of supplies, and issues requests for passenger and for freight transportation; prepares the annual estimates of appropriations, and transacts all other business relating to the financial interests of the Department.

One of the important functions of the division which I have just stated is the preparation of the annual estimates to Congress, and I would like to show you the forms used for that purpose.

(The witness showed the above-mentioned forms to the chairman and explained them.)

It is also the duty of the Division of Accounts to advise monthly the chief of each bureau and division as to how much money has been disbursed from his funds, and announce to that division the balance available at the end of each month.

The CHAIRMAN. That is under that statute which requires the head of the Department to apportion the appropriations?

Mr. ZAPPONE. Yes, sir; it has a direct bearing on that.

The CHAIRMAN. How do you find that law to work which requires the sums appropriated to be apportioned over the year?

Mr. ZAPPONE. Most satisfactorily, sir. We have not had a de

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