disclosed that the rentals established for Government-owned quarters occupied by employees at certain field offices of the Bureau do not appear to comply with housing rental regulations promulgated by the Bureau of the Budget and the Department of the Interior. The specific matters in question concern the (1) granting of isolation deductions for Government quarters that are located within 10 miles of an established community, and (2) application of isolation deduction percentages to shelter rentals before adjustment of the shelter rentals for comparability factors.

Paragraph 4.b(1) of Bureau of the Budget Circular A-45, revised, dated June 3, 1952, provides as follows:

"In some cases the Government supplies quarters to its employees in isolated locations where no private rental housing is available in the vicinity for purposes of comparison. In this situation, the nearest representative year-round private community should be used as a base, with a reasonable adjustment to offset the unusual transportation costs incurred by residents at the station (due to the distance from public transportation, shopping, educational, medical, and social centers, etc.). ***"

The Department of the Interior's Manual of Allowances for Quarters, Subsistence, and Services as amended by U. & D., Memorandum No. 59, dated May 21, 1954, provides in part as follows:

"4(b) The basis for fixing rental rates and charges for services will be the rate prevailing for comparable private housing services in the local area. No reduction from rates charged for comparable housing services will be allowed when the private housing with which the comparison is made is in the same local area (as defined in section 2(f)) as the Government housing. * * *. [Italic supplied.]

"2(f) For the purpose of this manual, a local area is defined as the area that can be reached by one-third hour normal one-way travel from the area in which the Government housing is located, but in no event to exceed an area with a radius of more than 10 miles ***"

Part 424, chapter 13, of the departmental manual issued June 1, 1961, which superseded prior departmental regulations, similarly does not authorize isolation deductions when the Government housing is located within 10 miles of the community used for comparison purposes except in instances where the normal oneway driving time to the community is in excess of 20 minutes.

Schedule 1, attached, shows the housing locations of the Bureau of Indian Affairs at which isolation deductions have been allowed for Government quarters which are located within 10 miles of the community used for the selection of comparative housing rentals. The housing files examined did not indicate that the isolation deductions were granted because the normal one-way driving time time to the communities used for the selection of comparative housing rentals was in excess of 20 minutes.

As shown in schedule No. 1, these isolation deductions amount to about $30,390 annually, or about $91,170 for the 3-year period during which such rates usually remain in effect. We understand that granting isolation deductions for Government quarters located within 10 miles of an established community, has been a practice at certain housing locations of the Bureau of Indian Affairs since 1954 and has apparently resulted from a misinterpretation of U. & D. Memorandum No. 59.

A review of the housing files for Government housing locations under the jurisdiction of the Phoenix area office disclosed that at these locations the rental reduction for isolation is computed by applying an isolation deduction percentage factor to the shelter rental before adjustments for comparability and other factors. In our opinion, this practice results in an excessive deduction because the isolation factor is applied to a base (unadjusted shelter rental) which is representative of the rental value of the privately owned quarters before deductions have been made to determine a comparable rental for the Government quarters.

Schedule 2, attached, shows that the excessive isolation deductions resulting from the improper computations of the isolation deductions for Governmentowned quarters at the Fort Apache, Pima, San Carlos, Nev., and Hopi Agencies amounts to $8,900 annually, or about $26,700 for the 3-year period during which such rates usually remain effective.

As an illustration, the following is a comparison of the Bureau's annual quarters rental for quarters No. 234-1 at the Fort Apache Agency, Whiteriver, Ariz., with our revised computation for the same quarters.

BIA computation

Shelter rent__.

$660

Less:

Isolation deduction (70 percent of $660)__

$462

Deduction for poor condition and arrangement (15 percent of $660)

99

561

Adjusted rental__

99

GAO computation

Shelter rent__.

660

Less: Deduction for poor condition and arrangement (15 percent of $660)

99

Your comments and views on these matters discussed in this letter will be appreciated.

Sincerely yours,

R. S. LINDGREN, Assistant Director.

DUPLICATION OF ACCOUNTING IN GEOLOGICAL SURVEY-ATLANTIC AREA TOPOGRAPHIC DIVISION

Mr. BROOKS. We will move now to duplication of accounting in Geological Survey-Atlantic Area Topographic Division.

STATEMENT OF EARLE J. FENNELL, ASSOCIATE CHIEF
TOPOGRAPHIC ENGINEER, GEOLOGICAL SURVEY

Mr. BROOKS. Last year, an ad hoc subcommittee of the Survey Committee on Accounting Practices made a report in February 1961, on production planning and control in the Atlantic Area Topographic Division of the Geological Survey, with several recommendations to eliminate duplication and unnecessary work spent in accumulating and maintaining data.

Mr. FENNELL. Sir, a brief statement regarding this has been inserted in the record and given you with the papers that you have there.

The Survey accounting is centrally done and the Topographic Division does not do any accounting as such in its area office or in the Topographic Division, but we do keep some cost record as a part of the progress reports that are submitted by our filed personnel and by our operating personnel.

The cost records are incidental to progress reports and we use them primarily for controlling operations. In the matter of making maps you have the procurement of aerial photography, field surveys, photogrammetric surveys, and cartographic processing and all of these things require close managerial control in order to obtain efficiency of operations.

We feel that the maintenance of cost records as a part of the progress reporting assists us in avoiding delays on projects where the financing comes from States as well as from the Federal Government and consequently we still do a certain amount of cost reporting along with our progress reporting system.

This has been a matter of concern to us ever since the report you spoke about was prepared.

We have undertaken-actually we have a continuous study of programing practices in the Topographic Division underway and iwe have made some changes in the system that I believe has reduced the amount of handwork our people were doing in the area offices on cost reporting and accounting.

Mr. BROOKS. In the hearings last year before the House Appropriations Committee the Geological Survey stated (hearings, 87th Cong., 1st sess., on Department of Interior and Related Agency Appropriations, for 1962, p. 461):

It has been recognized, therefore, for the last few years that some of the detailed information on mapping costs is no longer needed, and steps are being taken to simplify reporting procedures.

How much money and personnel do you feel can be saved by following out that recommendation in accordance with your own just previously stated economies?

Mr. FENNELL. A relatively modest amount, sir, because there are not too many people working on this at the present time. Actually, we have about three people in our Atlantic area office who are working