12. Report department.-This department prepares for the accounting and auditing divisions typed copies of (1) final audit reports, (2) manuals, including the GAO Policy and Procedures Manual for Guidance of Federal Agencies, and audit manuals for internal use, (3) congressional statements, audit programs, and other documents, and (4) draft audit reports. It also conducts the related proofreading, editing, and duplication of all reports, statements, and other documents in accordance with prescribed standards and requirements.

U.S. GENERAL ACCOUNTING OFFICE PROGRAM AND PERFORMANCE Our budget estimates for 1969 total $57,742,000, an increase of $3,383,000 above our revised 1968 estimate of $54,359,000. The revised 1968 estimate includes a requirement for a minimum supplemental appropriation of $1,559,000 for the pay act increases and related benefits provided by P.L. 90-206, effective October 1967. The following summary table compares major items of expense for 1968 and 1969:

Over 96% of our estimates are required to pay our employees, to provide their benefits, and for travel of the professional staff between their offices and other Government and contractor activities where they perform a substantial part of their work. The following summary compares our staffing requirements for 1968 and 1969 and identifies our need for an average of 131 additional positions in 1969:

Our staffing requirements for 1969 provide for a further gradual increase in our professional accounting and auditing positions. The increase of 100 in the average number of our professional staff and 16 supporting positions will provide additional audit coverage of the expanded domestic programs, defense activities including operations in Vietnam and the foreign assistance programs. Also, the increase in the number and dollar value of transportation vouchers, primarily for special support of Vietnam operations, will require an increase of 10 in the staff performing the audit and settlement in our Transportation Division. This work must be performed within 3 years of the date of payment.

The basic objective of GAO audit work is to promote constructive improvements and economy in Government operations. The results of our work, an important part of which is immeasurable, have generally resulted in several hundred million dollars of collections and measurable financial savings each year. Perhaps even more importantly, our work serves to inform Congress as to the actual conditions surrounding the expenditure of public funds. Our findings and recommendations are forwarded to the Congress, the Appropriations Committees, the Legislative Committees, as well as responsible agency officials, for consideration and action. We, of course, are pleased that each year the Congress makes more extensive use of our assistance in the discharge of its fiscal and legislative oversight and appropriation responsibilities.

We must continue to place special emphasis on the further gradual increase in our professional staff. We find the activities subject to our audit continue to expand. We find that to meet the expressed needs of the Congress and to improve the effectiveness of our work we must go to greater depths in some of our work. We find that we must continue to place increased emphasis on improving financial management in the Federal service. We also find that to meet our most pressing obligations we must continue to delay work which needs our attention.

Aside from the unprecedented number of new social, economic, and health programs which the Federal Government has undertaken in the past few years, we are confronted with an increasing workload in practically all major civil agencies. To assist the Congress in maintaining effective legislative oversight of the complex of governmental programs and operations, we have increased our capability in appraising the adequacy of program management as well as the effectiveness or results of those programs of major dollar impact and congressional interest. For example, we have scheduled twenty-seven (27) reviews involving approximately 75 staff members of programs and activities in space research and technology. Every one of these reviews is in an area of immediate concern or interest to congressional committees concerned with the financial requirements or legislative surveillance of the programs.

During fiscal year 1969 we contemplate that nearly 400 staff members will be involved in providing direct assistance to the Congress and its committees. This work is important and is, of course, directly related to our primary effort to assist the Congress.

The hard facts are that with our growing economy and Federal outlays of approximately $175.6 billion (F.Y. 1968) we do not have sufficient staff to cover our governmentwide audit responsibility. We have had to direct our audit resources and talents to those areas in which they can be most effectively used to fulfill the greatest apparent need, and continue with vigorous efforts to increase our staff capability on a logical and prudent basis. The policy we have followed through the years has been that of a conservative but yet effective implementation through recruitment of top quality graduates of the universities and colleges. Our experience over the past ten years has been that we are able to recruit annually approximately 350 students of very high quality. We could have lowered our standards for recruitment and obtained a greater number of graduates but with less potential to develop rapidly to positions of competence and responsibility. Also, in spite of losses to other Government agencies, public accounting and private industry, we have been able to gradually increase the professional staff on a net basis of approximately 100 positions each year.

This year through better retention of our staff, we have conserved some of our previous investment in training and experience. For example, we had 166 separations for the first 7 months of this fiscal year compared to 221 separations for the same period last year-we lost 55 fewer well qualified accountants and auditors. Due to a special and unusual effort this fiscal year, we have been able to attract and employ more well qualified applicants than last year. We appointed 237 accountants and auditors for the first 7-month period of the current fiscal year compared to 132 for the same period a year ago, or 105 more. On January 31, 1968, our professional accounting and auditing staff totaled 2,397, an increase of 197 above the prior year total of 2,200.

The single most important asset we have in providing assistance to the Congress is a well-qualified staff, and probably the single most important factor in the long-term effectiveness of the Office is the quality of our personnel. It takes several years to develop junior staff members to their full potential. It is extremely important that we continue a further gradual increase of our professional accounting and auditing positions to provide additional and more adequate audit coverage consistent with our statutory responsibilities.

During the current fiscal year, we are making every reasonable effort to economize without disrupting our work by delaying the filling of vacancies, rigorously reviewing all proposed travel, and eliminating or deferring purchases. While we generally have been able to absorb a part of previous general pay increases, this year we have necessarily had to apply what saving would otherwise have been available to our additional work, particularly the effort currently being directed to the review of the Poverty Program and the increased work program in South and Southeast Asia.

In response to congressional interest and requests we have progressively increased our efforts in civil and defense programs, international activities, and more recently new social, economic, and health programs which present a formidable task. For example, the Congress in enacting the Economic Oppor tunity Amendments Act of 1967, P.L. 90-222, approved December 23, 1967, directed that the Comptroller General undertake a comprehensive review and evaluation of the efficiency of the administration and the much more difficult evaluation of the effectiveness of the OEO poverty programs and to report on the results of our review by December 1, 1968. This has required a major acceleration and expansion of our work relating to the OEO programs. To meet the congressional objectives about 200 of our staff have been scheduled to participate in this review on an accelerated basis. This represented a redirection of effort of nearly 125 staff members who had been previously assigned to other important and high-priority work. This effort has also required an additional $575,000 in 1968 funds for contract services and increased travel which was not reflected in our budget estimate.

Also, we have had to increase our international work, particularly in South and Southeast Asia, and to provide an additional $375,000 for this work in our revision of the 1968 estimate.