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Mr. YATES. Yes.
The CHAIRMAN. All right.

Mr. YATES. I would like to supplement an answer I made with respect to settlements of claims.

The CHAIRMAN. All right.

Mr. YATES. No Comptroller General has ever held that the General Accounting Office has the authority to settle claims of the Tennessee Valley Authority, and another point I would like to stress is that as to any items which because of a determination by the Tennessee Valley Authority Board upon review of them, the General Accounting Office may not disallow in the accounts of the Treasurer, or its disbursing officer, it may report as forcefully as the facts will justify.

Mr. HARNESS. This amendment that is submitted here, is that merely a compromise between the Comptroller General and the T. V. A., of this controversy, or is it submitted for the purpose of affording protection to the Government ?

Mr. YATES. It is a compromise. We held several meetings and discussed what we might work out that would be mutually satisfactory, but we believe, and by “we” I mean we of the General Accounting Office believe that the situation will be much better from the standpoint of the Government's interests if this should be enacted, than if the present unsatisfactory situation should be permitted to continue, or than that the Congress should enact a provision later supporting the present view of the T. V. A.

Mr. HARNESS. Is it your view that this amendment would entirely protect the Government's interest?

Mr. Yates. When you mention, protect the Government's interests, that is a relative thing. It depends on what our various viewpoints would be about that.

Mr. HARNESS. Well, as counsel for the General Accounting Office, do you prefer the bill as originally introduced or as it is proposed to amend it?

Mr. Yates. The bill as originally introduced would retain in Congress a more active and effective control. I must answer that in

that way.

Mr. HARNESS. Should it not be there?

Mr. YATES. But I believe the provision as now proposed will retain an effective control with the additional authority in the Comptroller General's report to Congress, and it will be wholly workable. If it is not, or it is not found sufficiently workable, I think the Comptroller General will be here calling it to your attention.

Mr. Clason. I would like to ask a question.
The CHAIRMAN. Mr. Clason.

Mr. Clason. If I understand it, if H. R. 4961, introduced without amendment, and is enacted by Congress, then no payment could be made by the T. V. A. without first securing the approval of the General Accounting Office, then the Government would get the money back if the General Accounting Office should decide the money had not been properly expended?

Mr. YATES. No, sir, the May bill does not contemplate audit in advance of payment at all. It contemplates audit after the payments have been made.

Mr. Clason. Suppose the audit shows something has been expended improperly, what would be the recourse of the Government?

Mr. YATES. The first would be disallowance of the account of the disbursing officer, or collection from him or his surety, and collection from the individual who received the alleged erroneous or illegal payment.

Mr. CLASON. But if we adopt this amendment and the Tennessee Valley Authority decides that payments were made properly, the General Accounting Office is overruled. Congress has nothing to do with it and the money then is to be considered as properly expended because of this amendment that we are asked to adopt.

Mr. Yates. Not quite that, not considered as properly expended, but not disallowed in the disbursing officer's account. There would still be the report after the Board had taken this action.

Mr. Clason. There is no sanctions; there is no way of getting the money back. As a matter of lawful procedure, there would be no way of getting the money back?

Mr. ŤATES. There would certainly be no way other than through balances in the accounts.

Mr. SHORT. Because we are writing in this specific amendment that the findings of the board were legalized, properly or improperly.

Mr. YATES. Which the Congress has done on many occasions.

Mr. Clason. You talk about many cases, but in a large majority of cases, the General Accounting Office has a law similar to H.‘R. 4961.

Mr. YATES. With respect to adjustment and settling of accounts, but not with respect to overriding the administrative or agency head as to the conclusiveness. They are permanent agencies

Mr. CLASON. None of the big departments.

Mr. YATES. With respect to certain parts of the work. For instance, the Congress has written conclusive authority with respect to some expenditures of the Department of Agriculture.

Mr. CLASON. How about the War Department ?

Mr. YATES. Not the War Department, nor would the General Accounting Office advocate this kind of treatment for the regular establishments of the Government. It is because Congress has indicated its intention to give organizations such as the T. V. A. broad authority.

Mr. ELSTON. I would like to ask Mr. Yates one question.
The CHAIRMAN. Mr. Elston.

Mr. Elston. Would it be any more difficult to treat the T. V. A. any differently than you do the Post Office Department or any other regular establishment of the Government?

Mr. YATES. Mr. Elston, it would be no more difficult in the audit of accounts. It would not be any more difficult from the point of view of routine.

Mr. Elston. Do you see any problems that might arise if the regular practice were followed with respect to the T. V. A.? Take for instance the matter of settlement of claims. The Post Office Department settles claims. If a truck runs over somebody there is a personal injury which they can settle.

Mr. YATES. Under special act of Congress.

Mr. ELSTON. They have a working arrangement with the General Accounting Office. Could not the T. V. A. do the same thing?

Mr. YATES. There would be no difficulty as far as our handling them in the General Accounting Office.

Mr. ELSTON. If there is no difficulty I do not exactly see why H. R. 4961 would not be a good bill.

Mr. SHORT. Do you not think it is wiser and to the best interests of the Government to keep the final authority in the Government?

Mr. YATES. Gentlemen, we are not appearing here in opposition to the chairman's bill. We do believe the amendment which the Comptroller General has offered to that bill will be workable.

The CHAIRMAN. Any questions on this side?

Mr. BROOKS. Were the various provisions referred to for the other agencies made a part of the record? The CHAIRMAN. Yes; they were read in.

Mr. YATES. Yes; and before I leave may I offer for the record a statement the chairman requested be put in the record on the occasion of the first hearing?

The CHAIRMAN. Yes; it will be inserted at this point. (The statement referred to is as follows:) Under the provisions of section 9 (b) of the Tennessee Valley Authority Act, exceptions are required to be presented to the Authority for reply before the final audit report is released.

There has just recently been received what the Authority states to be its replies to exceptions for the fiscal years 1934 to 1939, inclusive.

It will be some time before such replies can be individually considered and final action thereon taken. However, the Authority has been advised that further replies were not necessary in connection with a number of exceptions to which replies had previously been received and it is very probable that numerous other exceptions will be removed and when all replies are considered and certificates of settlement issued.

There is submitted for the record a summary statement of the exceptions, by fiscal years, included in audit reports referred to the Authority, and the balances upon which final action has not been taken. In support of this statement there are submitted summaries showing briefly, by classes, the nature or type of all exceptions:

Exceptions included in audit reports

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1934 1935 1936. 1937 1938 1939

Apr. 3, 1935
Jan. 24, 1939
Feb. 25, 1939
Mar. 22, 1939
May 12, 1939
Apr. 11, 1940

2, 259 1, 678 1, 964 2, 024

849 1, 621

$2,013, 326. 51

971, 433. 62 3, 911, 553.83

941, 079. 59

424, 813. 88 3,040, 118.03

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$31, 596.95

968, 146. 99 1,880, 480.46

512, 434. 80

304, 869. 30 3,040, 118.03



11, 302, 325. 46

4, 564, 678.93

6,737, 646. 53

1 Reply received June 5, 1941.

Summary of exceptions to transactions of the Tennessee Valley Authority



1. Travel and subsistence:
Group No.:
1. No previous authorization to use personally

owned automobile.
2. Mileage within corporate limits of head-

3. Advantage and economy
4. Long distance telephone calls (not supported

by statements-travel regulations, par. 69)--
5. Sole owner of car.
6. Special conveyances..
7. Interviews-Applicants.
8. Daily transportation home to place of duty-
9. Time of departure and arrival
10. State tax on gasoline...
11. No travel order or travel order not properly

12. Round-trip ticket.
13. Per diem unauthorized
14. Pullman receipts..
15. Storage, etc., rented cars.
16. Telegrams.
17. Places of travel
18. Administrative officer's certificate.
19. Jurat.
20. Transfers
21. Meter readings
22. Cash fares.
23. Overpayment of per diem.
24. Payments for benefit of another
25. Advances for bridge tollbooks.
26. Miscellaneous...

2. Purchase of utility property.

3. Contracts, formal, less formal, and miscellaneous:
Group No.:

1. Advertising and competition.
2. Discount
3. Invoices
4. Personal services.
5. Purchases contrary to statutes
6. Pay rolls.
8. Miscellaneous
9. Land acquisitions..

4. Books, periodiclas, newspapers:
Group No.:

1. Books and periodicals..
2. Newspapers

5. Disbursements for other Government departments --
6. Repairs and reconditioning of steam plant......

Total-Fiscal year 1934.

50, 159.96 2,013,326.51

10,078.00 71, 045. 39

50, 159.96 1,981, 729.56

31, 596.95


Summary of exceptions to transactions of the Tennessee Valley Authority-Con.

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