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theory only to examine the accounts at the seat of the Corporation in Knoxville, and, find, if possible, adequate supporting data to constitute the support for the disbursing Officer's or Treasurer's transactions.
The CHAIRMAN. That is, the disbursing officer of the T. V. A., you mean?
Mr. YATES. That is right.
Under the procedure under the Budget and Accounting Act a disbursing officer must come in monthly or quarterly and render his accounting, an accounting of his stewardship. He must show how much money has been advanced to him from the Treasury of the United States, what he has done with that money, how much money he has' collected—if he is a collecting officer in addition to being a disbursing officer-what he has done with that money.
He must accompany his accounts with supporting documents, vouchers, and receipts, and other supporting data, to show that he has properly made disposition of such money as does not still remain to his credit. When his complete accounting is received it is carefully examined, audited, and settled by the General Accounting Office.
The settlement consists of a certificate which will show how much that officer still owes the Government, or how much, if any, the Government still owes him—that is, still owes his account. But that permits an itemization of his account and the finding of an official balance. It requires him to come forth and make an accounting. It does not leave the situation so that the accounting officers of the Government must go to him and find, if possible, what he has to show for what disposition he has made of the Government's money.
Now, it is that kind of examination and settlement which the Tennessee Valley Authority has contended is not applicable to it under existing law.
Under the proposed amendment to the pending May bill, the accounts of the treasurer or such other disbursing or collecting officer, as it may now or hereafter have, would come into the General Accounting Office for that kind of examination, audit and settlement, just as do the accounts of all other departments and establishments of the Government, with few exceptions.
Now, in return for that concession on the part of the Tennessee Valley Authority, they have asked and insisted they should have a wider latitude of authority so as to eliminate what they feel the regular settlement of their accounts by the General Accounting Office would amount to in interference with administrative practice or administrative policies. There is written into this proposed amendment final authority in the Tennessee Valley Authority Board to decide in the event of questions being raised by the General Accounting Office in the examination of its accounts, whether those items are necessary in the conduct of the business of the Tennessee Valley Authority in this wording:
And, notwithstanding the provisions of any other law governing the expenditure of public funds, the General Accounting Office, in the settlement of the accounts of the Treasurer or other accountable officer or employee of the Corporation, shall not disallow credit for, nor withhold funds because of, any expenditure which the Board shall determine to have been necessary to carry out the provisions of said Act.
Mr. RUTHERFORD. May I ask a question, Mr. Chairman?
Mr. RUTHERFORD. If I understand, under this amendment, if the T. V. A. decided to settle a claim paid by their disbursing officer
The CHAIRMAN (interposing). And approved by the Board
Mr. RUTHERFORD (continuing). And approved by the Board, then, that is final.
Mr. YATES. That is correct, that you cannot disallow in the account of the disbursing officer, if the Board decides by its official action that the expenditure was necessary because of the operation of the Tennessee Valley Authority under its act.
Mr. RUTHERFORD. But if the General Accounting Office feels that it was not a proper expenditure, they can report such fact to Congress.
Mr. YATES. Right. It could not disallow credit in the disbursing officer's account, but could still report to Congress under the present provisions of section 9 (b) of the Tennessee Valley Authority Act.
The CHAIRMAN. What would it report to Congress ?
Mr. Yates. Take the illustration the Congressman has just made. The Comptroller General reports to Congress a certain expenditure having been made, describing that expenditure, that the General Accounting Office had taken exception to it, but under the terms of the amendment the Board had considered it, and determined the expenditure to be a necessary one on account of which there was no disallowance in the disbursing officer's account, but the Comptroller General would say, in effect, to Congress, "I still believe the expenditure was improper."
The CHAIRMAN. Under this amendment, in other words, as you propose, they could disburse the money, and then if the Board met and said it was essential and necessary to carry out the functions and provisions of the original act in any of the endeavors authorized under that act, you would be precluded, insofar as disallowing it.
Mr. YATES. That is right.
Mr. SHORT. If they had made expenditures the General Accounting Office did not approve of, what recourse would the Government have?
Mr. YATES. It would have the same recourse which the Tennessee Valley Authority contends that there exists now, that is, a report to the Congress, and of course to the President by the Comptroller General.
Mr. Short. It would not get the money back.
Mr. YATES. That does not get the money back, because the procedure for recovery of a final balance certified in disbursing officer's accounts would not apply.
Mr. HARNESS. Are the directors of the T. V. A. under bond?
Mr. HARNESS. If a report were made by the Comptroller General to Congress that the expenditures were thought improper, and Con
gress thought they were also improper, there would be no way to recover that because it was authorized by the Board ?
Mr. YATES. That is correct.
Mr. Elston. Do you think it safe to have that kind of a provision here, irrespective of the amount ! In other words, do you think it perfectly safe for the Board to settle claims of any size, even involving a million dollars?
Mr. Yates. The Board has the authority to sue and be sued, and therefore the same authority as in the case of the municipal corporation, the District of Columbia, to settle its own claims. All Comptrollers have consistently held that the General Accounting Office does not have authority to settle claims of the District of Columbia and the same is true with respect to the T. V. A.
Mr. ELSTON. Suppose they settle something illegally or improperly, involving millions of dollars, do you think the amendment that has been suggested is a sufficient safeguard ?
Mr. YATES. Mr. Chairman, may I answer that in this way?
Mr. YATES. The General Accounting Office has agreed to the part of this proposed amendment which we are now discussing because primarily on the definite knowledge that the Congress over a period of the last 10 or 15 years has more and more come around to granting to organizations of the Government engaged in business of the character such as the T. V. A. is engaged in, and other types of business, a very broad authority.
Mr. SHORT. We grant too much.
Mr. YATES. That may be. And the feeling also that it was the intention of Congress to give the Tennessee Valley Authority a broad authority, and also the intention as evidenced somewhat at least by bills introduced heretofore, to give very broad authority to other establishments, such as the Tennessee Valley Authority.
Let me give you two or three examples, Mr. Chairman.
Mr. YATES. In 1933, the Congress enacted this authority for the Home Owners' Loan Corporation:
* The Corporation shall be entitled to the free use of the United States mails for its official business in the same manner as the executive departments of the Government, and shall determine its necessary expenditures under this Act and the manner in which they shall be incurred, allowed, and paid, without regard to the provisions of any other law governing the expenditure of public funds.
For the United States Maritime Commission, the following:
Sec. 207. The Commission may enter into such contracts, upon behalf of the United States, and may make such disbursements as may, in its discretion, be necessary to carry on the activities authorized by this Act, or to protect, preserve, or improve the collateral held by the Commission to secure indebtedness, in the same manner that a private corporation may contract within the scope of the authority conferred by its charter.
Provided, That it shall be recognized that, because of the business activities authorized by this Act, the accounting officers shall allow credit for all expenditures shown to be necessary because of the nature of such authorized activities, notwithstanding any existing statutory provision to the contrary.
The Employees' Compensation Commission, act of June 5, 1924.
In the absence of fraud or mistake in mathematical calculation, the finding of facts in, and the decision of the Commission upon, the merits of any claim presented under or authorized by this Act if supported by competent evidence shall not be subject to review by any other administrative or accounting officer, employee, or agent of the United States. The Federal Housing Administration, act of June 27, 1934.
The Administrator may delegate any of the functions and powers conferred upon him under this title and titles II and III to such officers, agents, and employees as he may designate or appoint, and may make such expenditures (including expenditures for personal services and rent at the seat of government and elsewhere, for lawbooks and books of reference, and for paper, printing, and binding) as are necessary to carry out the provisions of this title and titles II and III, without regard to any other provisions of law governing the expenditure of public funds. Act of September 1, 1937, United States Housing Authority:
Such financial transactions of the Authority as the making of loans, annual contributions, and capital grants, and the acquisition, sale, exchange, lease, or other disposition of real and personal property, and vouchers approved by the Administrator in connection with such financial transactions, shall be final and conclusive upon all officers of the Government; except that all such financial transactions of the Authority shall be audited by the General Accounting Office at such times and in such manner as the Comptroller General of the United States may by regulation prescribe.
Veterans' Administration, act of October 17, 1940:
SEC. 11. Notwithstanding any other provisions of law, except as provided in section 19 of the World War Veterans' Act, 1924, as amended, and in section 817 (617) of the National Service Life Insurance Act of 1940, the decisions of the Administrator of Veterans' Affairs on any question of law or fact concerning a claim for benefits or payments under this or any other act administered by the Veterans' Administration shall be final and conclusive and no other official or any court of the United States shall have power or jurisdiction to review any such decisions.
Soil Conservation, act of February 16, 1938:
SEC. 385. The facts constituting the basis for any Soil Conservation Act payment, parity payment, or loan, or the amount thereof, when officially determined in conformity with the applicable regulations prescribed by the Secretary or by the Commodity Credit Corporation, shall be final and conclusive and shall not be reviewable by any other officer or agency of the Government.
World War Adjusted Compensation Act, section 310, July 3, 1926:
SEC. 310. The decisions of the Secretary of War, the Secretary of the Navy, and the Director, on all matters within their respective jurisdictions under the provisions of this act (except the duties vested in them by title VII) shall be final and conclusive.
Mr. SHORT. Not all those expenditures are audited by the General Accounting Office.
Mr. Yates. That is true. Appropriations Committee in 1938 began to enact, or report a provision requiring the Home Owners' Loan Corporation to submit its accounts of administrative expenditures, and the Home Owners' Loan Corporation elected to submit all of its accounts, not just the accounts of administrative expenditures, but we should bear in mind this further thing; while we do audit all accounts of the Home Owners' Loan Corporation and settle them, we must take into consideration, in the raising of any questions, this broad authority which the Congress has given the Home Owners'
Loan Corporation, which practically goes as far as the provision proposed in this new amendment to the May bill in the case of the Tennessee Valley Authority.
The CHAIRMAN. Do you mean to say that the Comptroller General's Office with respect to the Tennessee Valley Authority, and any other governmental agency engaged in private business throughout the country, will be governed by the decision that there are certain provisions like the one read with respect to other corporations?
Mr. YATES. No, Mr. Chairman, but in the case of the very broad authority, such as I have read, which was enacted for the Home Owners' Loan Corporation, the General Accounting Office must fully regard that and determine under it whether it should raise any question.
The CHAIRMAN. As to the Home Owners' Loan Corporation.
The CHAIRMAN. But how will each of these corporations and agencies be governed, by the particular statute under which they are established ?
Mr. YATES. Yes, sir; and there are others that have just as broad authority.
Mr. ELSTON. The Home Owners' Loan Corporation was set up at least theoretically as a temporary agency, whereas the Tennessee Valley Authority is a permanent agency. Do you not think Congress wisely, or unwisely, may have given some authority to the temporary agency which would not be wise to give to a permanent agency!
Mr. YATES. That may have actuated the action of Congress at the time, but the Congress has with respect to other and permanent agencies granted authority just as broad.
Mr. Clason. But on the other hand, the Appropriations Committee has taken a view which shows a desire to go in the opposite direction to bring these all again under the control of the General Accounting Office ?
Mr. Yates. That is correct with respect to administrative expenses. It is contended that it has not gone that far with the T. V. A.
The CHAIRMAN. Go ahead.
Mr. YATES. Another case is the United States Maritime Commission.
Mr. Chairman, I am just trying to show why we came around to agreeing to this particular provision.
The CHAIRMAN. By way of saving time, all of those Mr. Warren enumerated awhile ago have similar provisions in their statutes ?
Mr. YATES. Yes; that is right.
The CHAIRMAN. I want to ask one question of you, and I expect to ask Mr. Lilienthal the same question.
Do you contend that amendment definitely puts the Tennessee Valley Authority under the provisions of the Budget and Accounting Act of 1921 ?
Mr. YATES. For an audit and settlement of their accounts.
The CHAIRMAN. Particularly the one you have read, and one fur. ther, it provides they may settle law suits.