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tive agency to furnish, or unnecessary delay in furnishing, pertinent information or documentation.

We have recently been refused access to an Air Force report. The facts are as follows:

On June 13, 1958, we requested the Secretary of the Air Force to make available a copy of the Air Force inspector general's report covering a “Survey of Management of the Ballistic Missiles Program.” The Defense Accounting and Auditing Division of this Office had previously begun a review of the administrative conduct and management of various Air Force activities under its research and development programs. Activities under the ballistic missiles program had been selected for initial study and, consequently, we asked to review the inspector general's report.

No response to our request was received. Therefore we sent a followup letter to the Secretary of the Air Force on July 16, 1958, requesting information as to when the inspector general's report would be available.

In reply dated July 30, 1958, copy enclosed, the Secretary of the Air Force stated that inspector general's reports are prepared solely for the use of responsible officials within the Department of the Air Force. He pointed out that the report which we had requested concerns the internal management of the Air Force and stated that release of such reports to persons outside the Department would have a serious adverse effect on the effective administration of the Department. He concluded that "the public interest would best be served by not releasing the report * * *.” The Secretary advised, however, that a summary of the findings of the facts contained in the inspector general's report would be prepared and forwarded to this Office.

On August 13, 1958, 60 days after our request, a summary of the inspector general's report was forwarded to this office. The summary report consists of a list of general conclusions in various areas of management and organization, budgeting and funding, procurement and contractual relationships. The summary does not include specific data on the operating conditions and management controls or a summary of the factual information on which the conclusions are based.

The Secretary of the Air Force characterizes inspector general reports as fulfilling a need for "stern, impartial, analysis of the effectiveness and efficiency of its [the military department's] operations.” The “Survey of Management of the Ballistic Missiles Program" was directed to determining the effectiveness and efficiency of various activities under the ballistic missiles program. It included appraisals of such activities as buying and contract administration, procedures for furnishing Government-owned facilities to contractors, administration of commercial leases, purchasing practices of Government contractors, and many other subjects of a general administrative nature as opposed to highly specialized scientific or technical matters.

The effectiveness and economy of the foregoing activities are clearly of interest and concern to the General Accounting Office in the performance of its statutory responsibilities. The legislative history of the Budget and Accounting Act of 1921 made it clear that our examination of “a” matters relating to the receipt, disbursement, and application of public funds" as provided in section 312(a) contemplated that we would consider and report on the economy, efficiency and effectiveness of agency activities. See also section 206 of the Legislative Reorganization Act of 1946 which authorizes and directs the Comptroller General to make an expenditure analysis of each agency in the executive branch of the Government which, in the opinion of the Comptroller General, will enable the Congress to determine whether public funds have been economically and effectively administered and expended. In order to carry out such work, section 313 of the 1921 act provides :

"All departments and establishments shall furnish to the Comptroller General such information regarding the powers, duties, activities, organization, financial transactions, and methods of business of their respective offices as he may from time to time require of them; and the Comptroller General, or any of his assistants or employees, when duly authorized by him, shall, for the purpose of securing such information, have access to and the right to examine any books, documents, papers, or records of any such department or establishment * * *.

The inspector general's reports of the type here involved are clearly subject to review by this Office.

The Secretary refers to the restriction of inspector general reports to the use of Air Force officials only and to the need of such restriction in order to attain the objective of self-criticism. We firmly believe in the need for internal reviews. They are the method by which management keeps itself informed on the way large and complex activities are being carried out. Effective management should take vigorous corrective action on any deficiencies disclosed. We do not accept the concept, however, that an effective program of self-evaluation and management improvement must be dependent upon restricting the information developed to the individuals or department responsible for the activity under examination. Such information is of great importance to higher administrative levels and to other responsible officials having a legitimate interest or concern in the subject.

Withholding information permits concealment of adverse conditions by those basically responsible. It also permits delay and laxity in effecting improve ments. The denial by any official or organization of information developed in its internal reviews to any higher authority or any other official properly concerned either hampers any external review or independent consideration of the effectiveness and efficiency of the activities, or necessitates a duplication of costs in making similar reviews. This is in itself an unjustifiable waste of the taxpayers' money.

We cannot fully discharge our statutory responsibilities without access to the reports resulting from internal reviews of administrative practices and activities made by inspector general, auditor general, and other management survey teams. The congressional policy set forth in section 111(d) of the Accounting and Auditing Act of 1950 which provides that our audit will be directed, among other things, to determining the adequacy of the agencies' internal financial control over operations. Also, the subjects covered in the report which has been denied us represent internal management evaluations which are clearly a part of “internal audit and control” within section 117 (a) of the Accounting and Auditing Act of 1950 and so specifically required to be considered by the Comptroller General in the conduct of his audits. Such information and factual data should not be withheld or subject to procedures designed to screen official documents, papers, or records before being made available to the General Accounting Office.

This matter is also being reported to the chairman of the Committee on Armed Services, U.S. Senate, and to the chairman of the Committee on Armed Services, Committee on Government Operations, the Special Subcommittee No. 6, Committee on Armed Services, and the Special Government Information Subcommittee, Committee on Government Operations, House of Representatives. We are advising the Secretary of Defense and the Secretary of the Air Force that we are unable to properly discharge our statutory responsibilities if these reports are denied to our representatives in the performance of our audits. Sincerely yours,

JOSEPH CAMPBELL, Comptroller General of the United States.

EXHIBIT No. 12

[PUBLIC LAW 784-81st CONGRESS)
(CHAPTER 946—2D SESSION)

(H. R. 9038)

AN ACT To authorize the President to determine the form of the national budget and of

departmental estimates, to modernize and simplify governmental accounting and auditing methods and procedures, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the “Budget and Accounting Procedures Act of 1950”.

TITLE I-BUDGETING AND ACCOUNTING

Part I-BUDGETING Sec. 101. Section 2 of the Budget and Accounting Act, 1921 (42 Stat. 20), is amended by adding at the end thereof the following:

"The term “appropriations includes, in appropriate context, funds and authorizations to create obligations by contract in advance of appropriations, or any other authority making funds available for obligation or expenditure.”

Sec. 102. (a) Section 201 of such Act is amended to read as follows: "Sec. 201. The President shall transmit to Congress during the first fifteen days of each regular session, the Budget, which shall set forth his Budget message, summary data and text, and supporting detail. The Budget shall set forth in such form and detail as the President may determine

“(a) functions and activities of the Government;
"b) any other desirable classifications of data;

"(c) a reconciliation of the summary data on expenditures with proposed appropriations;

(d) estimated expenditures and proposed appropriations necessary in his judgment for the support of the Government for the ensuing fiscal year, except that estimated expenditures and proposed appropriations for such year for the legislative branch of the Government and the Supreme Court of the United States shall be transmitted to the President on or before October 15 of each year, and shall be included by him in the Budget without revision;

"(e) estimated receipts of the Government during the ensuing fiscal year, under (1) laws existing at the time the Budget is transmitted and also (2) under the revenue proposals, if any, contained in the Budget;

“(f) actual appropriations, expenditures, and receipts of the Government during the last completed fiscal year;

“(g) estimated expenditures and receipts, and actual or proposed appropriations of the Government during the fiscal year in progress;

"(h) balanced statements of (1) the condition of the Treasury at the end of the last completed fiscal year, (2) the estimated condition of the Treasury at the end of the fiscal year in progress, and (3) the estimated condition of the Treasury at the end of the ensuing fiscal year if the financial proposals contained in the Budget are adopted;

“(i) all essential facts regarding the bonded and other indebtedness of the Government, and

“(j) such other financial statements and data as in his opinion are necessary or desirable in order to make known in all prac

ticable detail the financial condition of the Government." (b) Section 203 of such Act is amended to read as follows:

"Sec. 203. (a) The President from time to time may transmit to Congress such proposed supplemental or deficiency appropriations as in his judgment (1) are necessary on account of laws enacted after the transmission of the Budget, or (2) are otherwise in the public interest. He shall accompany such proposals with a statement of the reasons therefor, including the reasons for their omission from the Budget.

“(b) Whenever such proposed supplemental or deficiency appropriations reach an aggregate which, if they had been contained in the Budget, would have required the President to make a recommendation under subsection (a) of section 202, he shall thereupon make such recommendation."

(c) Section 204 of such Act is amended to read as follows:

"Sec. 204. (a) Except as otherwise provided in this Act, the contents, order, and arrangement of the proposed appropriations and the statements of expenditures and estimated expenditures contained in the Budget or transmitted under section 203, and the notes and other data submitted therewith, shall conform to requirements prescribed by the President.

"(b) The Budget, and statements furnished with any proposed supplemental or deficiency appropriations, shall be accompanied by information as to personal services and other objects of expenditure in the same manner and form as in the Budget for the fiscal year 1950: Provided, That this requirement may be waived or modified, either generally or in specific cases, by joint action of the committees of Congress having jurisdiction over appropriation: And provided further, That nothing in this Act shall be construed to limit the authority of committees of Congress to request and receive such information in such form as they may desire in consideration of and action upon budget estimates."

(d) Section 205 of such Act is amended to read as follows:

“Sec. 205. Whenever any basic change is made in the form of the Budget, the President, in addition to the Budget, shall transmit to Congress such explanatory notes and tables as may be necessary to show where the various items embraced in the Budget of the prior year are contained in the new Budget.'

(e) The last sentence of section 207 of such Act is amended to read as follows: "The Bureau, under such rules and regulations as the President may prescribe, shall prepare the Budget, and any proposed supplemental or deficiency appropriations, and to this end shall have authority to assemble, correlate, revise, reduce, or increase the requests for appropriations of the several departments or establishments."

(f) Section 214 of such Act is amended to read as follows: “Sec. 214. The head of each department and establishment shall

prepare or cause to be prepared in each year his requests for regular, supplemental, or deficiency appropriations."

(g) Section 215 of such Act is amended to read as follows:

“Sec. 215. The head of each department and establishment shall submit his requests for appropriations to the Bureau on or before a date which thë President shall determine. In case of his failure to do so, the President shall cause such requests to be prepared as are necessary to enable him to include such requests with the Budget in respect to the work of such department or establishment.”

(h) Section 216 of such Act is amended to read as follows:

Sec. 216. Requests for regular, supplemental, or deficiency appropriations which are submitted to the Bureau by the head of any department or establishment shall be prepared and submitted as the President may determine in accordance with the provisions of section 201."

GOVERNMENT STATISTICAL ACTIVITIES SEC. 103. The President, through the Director of the Bureau of the Budget, is authorized and directed to develop programs and to issue regulations and orders for the improved gathering, compiling, analyzing, publishing, and disseminating of statistical information for any purpose by the various agencies in the executive branch of the Government. Such regulations and orders shall be adhered to by such agencies.

IMPROVED ADMINISTRATION OF EXECUTIVE AGENCIES

SEC. 104. The President, through the Director of the Bureau of the Budget, is authorized and directed to evaluate and develop improved plans for the organization, coordination, and management of the executive branch of the Government with a view to efficient and economical service.

BUSINESS-TYPE BUDGETS Sec. 105. The first two sentences of section 102 of the Government Corporation Control Act of 1945 (59 Stat. 597), are amended to read as follows: "Each wholly owned Government corporation shall cause to be prepared annually a business-type budget which shall be submitted to the Bureau of the Budget, under such rules and regulations as the President may establish as to the date of submission, the form and content, the classifications of data, and the manner in which such budget program shall be prepared and presented.”

Part II-ACCOUNTING AND AUDITING

SHORT TITLE

Sec. 110. This part may be cited as the “Accounting and Auditing Act of 1950".

DECLARATION OF POLICY Sec. 111. It is the policy of the Congress in enacting this part that

(a) The accounting of the Government provide full disclosure of the results of financial operations, adequate financial information needed in the management of operations and the formulation and execution of the Budget, and effective control over income, expenditures, funds, property, and other assets.

40377 0–59-pt. 1--20

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