Accounting
Objectives

To provide reliable fiscal data to serve as a basis for preparation and support of budget requests.

To provide media for effecting control of obligations and expenditures.

To provide the accounting tools for measuring effectiveness and economy of performance at each level of management responsibility.

To promote control over and reduction of operating costs.

To establish accountability for assets and assurance of proper discharge of such responsibility.

RESULTS EXPECTED

Integration of account classifications, fiscal accounting, cost accounting, and property and inventory accounting into a single and uniform system.

More meaningful budgets and accounting reports for use in planning and management at every level.

Greater efficiency with reduced costs through the use of adequate accounting tools.

Creation of a greater sense of responsibility and accountability on the part of all echelons.

Preserve and strengthen congressional and executive control over expenditures.

(See chart, p. 167.)

Progress Reports And Statistics

Objectives

To provide a means of measuring and evaluating progress and to provide adequate and reliable program data to aid management in formulating executive and policy decisions by—

Developing comprehensive summary reports covering subjects of importance to management.

Improving timeliness, analysis, and Interpretation of reports so that top officials will be fully and currently informed of status, progress, and problems of major programs. Establishing uniform terminologies, classifications, and procedures. Coordinating statistical programs of the Department of Defense with those of other Government agencies.

Eliminating unnecessary reports and revising reports to meet the needs of changing programs.

RESULTS EXPECTED

Accurate, complete, timely, and significantly summarized reports and statistics with the result that:

Management is better informed.
Management is more effective.

More complete and timely information is available to the Congress and to the public. (See chart, p. 168.)

Internal Audit
Objectives

To provide independent internal audits and appraisals of the financial and business operations of activities.

To make unbiased determinations regarding adherence to appropriation provisions and legal requirements, including interpretations of the Comptroller General.

To facilitate standardization of audit organizations and methods in the three military departments without overlapping and duplication.

To provide a means whereby interpretations of contract costs can be applied uniformly by all military departments.

RESULTS EXPECTED

All echelons of mangement supplied with independent review of financial and business activities and recommendations for remedying unsatisfactory conditions.

Objective appraisal of the effectiveness of systems, procedures, and regulations promulgated In the field of fiscal management.

Contracting officers provided, when appropriate, with verified cost data for use in contact negotiations.

Private contractors assured of uniform and efficient examinations of their records.

External audit by General Accounting Office simplified by coordination of Department of Defense audit functions with General Accounting Office requirements.

INTERNAL AUDIT

Exhibit B

PRELIMINARY REPORT—IMPLEMENTATION OF TITLE IV, NATIONAL SECURITY ACT OP 1947, AS AMENDED

United States Senate, Committee on Armed Forces, Preparedness Subcommittee No. 3, July 28, 1953

Section I

Intent And Objectives Of Title IV

The purpose of title rv amendments (enacted in 1949) to the National Security Act of 1947 is to promote economy and efficiency through establishment of uniform budgetary and fiscal procedures and organizations. To accomplish this purpose, the amendments established a Comptroller of the Department of Defense to be responsible to the Secretary of Defense and a Comptroller in each of the military departments to be responsible to the respective departmental Secretaries for the budgetary and fiscal functions.

Implementation of these responsibilities was directed or authorized in various provisions of title IV. The important elements of these provisions can be summarized under the following subjects:

Comptroller organizations

Budget

Working capital funds (industrial funds and stock funds)

Management funds

Accounting (funds and property)

Progress reports and statistics

Internal audit The intent and objectives of each of these subjects are outlined and graphically presented in the following pages of this section, and the progress in attaining these objectives is covered in other sections of this report.

COMPTBOLLEB ORGANIZATIONS

OBJECTIVES

To promote economy and efficiency in Department of Defense operations, both military and civilian, through control of fiscal management by the civilian Secretaries.

To provide the Secretary of Defense with a fiscal organization to discharge this responsibility and to provide the civilian Secretaries of each military department with a fiscal organization consistent with that of the Secretary of Defense, to accomplish the same objective for each military department.

To provide the mechanism for obtaining effectiveness in fiscal control.

To implement budget and fiscal administration required by title IV uniformly between departments and within departments.

To provide the Secretaries of the military departments, the Secretary of Defense, the President, the Congress, and the public with program, budget, and fiscal data in a clear and understandable form.

RESULTS EXPECTED

Clear lines of responsibility for fiscal management

A direct means of implementation of the fiscal management policies established by higher authority.

A means of obtaining more uniform and accurate budgetary and fiscal data needed in planning and control.

Better budget estimates.

Logical channels for review and analysis of fiscal problems to obtain prompt management decisions.

Continuing critical appraisal of activities in relation to funds expended for them.