novel and complex legislation, not only the unique requirements of particular positions on its staff calling for expert technical capacity, but also the special qualifications of persons to be appointed to such positions. I have also given consideration to the provisions of subsection (c) of section 2 of the bill, authorizing the President by Executive order to transfer to an executive department any of the routine administrative and executive functions of any independent establishment which are common to other agencies of the Government. This Commission can have nothing but sympathy toward any effort to increase the economical and efficient operation of the Government, and there are without doubt many routine administrative functions of the Commission which could with advantage be combined with similar functions of other establishments under the supervision of some central agency. I note, however, that the type of functions contemplated by subsection (c) is stated to include such matters as the preparation of estimates of appropriations, and the appointment of personnel. Consolidation of these functions to the extent of standardizing personnel policies and practices, or the form and manner of preparing estimates of appropriations, may doubtless be of great benefit to all concerned. The language of the section, however, implies the possibility of the transfer of functions of a more extensive character. It can, of course, be assumed that wisdom would lead neither the Executive nor Congress to place the appointment of personnel responsible to one executive officer in the hands of another. Especially would this be true with reference to independent establishments, the control of which is traditionally deemed to stem from the Executive and Congress and not from some executive department. Inasmuch as the policy against the consolidation of such functions seems clear, that policy should not be beclouded by a loose statutory expression. Hence, in the interest of clarity, those personnel and budgetary functions which are of a character that cannot be efficiently consolidated should be excluded from the operation of the section. Apart from the foregoing, I have no comment to make upon the provisions of S. 2700 which affect the Securities and Exchange Commission. As requested, I enclose herewith 10 copies of this letter. Sincerely yours, JAMES M. LANDIS, Chairman. REORGANIZATION OF THE GOVERNMENT AGENCIES WEDNESDAY, AUGUST 11, 1937 SENATE SELECT COMMITTEE ON The committee met. Senator BYRD. Senator Byrnes is detained on official business for a short time. I imagine the first witness will be the Acting Comptroller General, Mr. Elliott. STATEMENT OF R. N. ELLIOTT, ACTING COMPTROLLER GENERAL OF THE UNITED STATES Mr. ELLIOTT. Mr. Chairman, as I understand you have before you this morning for hearing S. 2700. This bill covers a multitude of things, but I presume the part that you want to hear most about is that part that refers to the General Accounting Office. Senator BYRD. I think the committee would be glad to hear from you on any part of the bill on which you desire to express an opinion. Mr. ELLIOTT. I have not had time to go into all of it, but I wish to say in this behalf that on June 30, 1937, in response to a communication from Hon. Joseph T. Robinson, chairman of this committee, I sent in a written report giving my views on that part of the bill that referred to the General Accounting Office, and, if it meets with the approval of the committee, I would like to have a copy of this report inserted in the hearings at this point. Senator BYRD. Mr. Elliott, would you care to read your statement, or do you want to explain it? Mr. ELLIOTT. I can do that. Senator O'MAHONEY. Is that the statement that was presented to Senator Robinson? Mr. ELLIOTT. Yes, that was sent up here in response to his request. Senator O'MAHONEY. All right. (The letter referred to was read by Mr. Elliott, as follows:) Hon. JOE T. ROBINSON, GENERAL ACCOUNTING OFFICE, Chairman, Senate Select Committee on Government Reorganization, MY DEAR MR. CHAIRMAN: I have your letter of June 24, 1937, transmitting a copy of S. 2700, to provide for reorganizing agencies of the Government, etc., and stating that your committee will be glad to have my views on such provisions of the bill as affect the General Accounting Office. The provisions of the bill which will directly affect the General Accounting Office are contained in title III, sections 301 to 306, inclusive. Section 301 would abolish the General Accounting Office and the offices of Comptroller General and Assistant Comptroller General, and would transfer to the Bureau of the Budget and the Director of such Bureau all of the functions now vested in the General Accounting Office and the Comptroller General, except the functions now vested in the Comptroller General under section 312 (b) of the Budget and Accounting Act of June 10, 1921 (42 Stat. 26) which reads: "(b) He shall make such investigations and reports as shall be ordered by either House of Congress or by any committee of either House having jurisdiction over revenue, appropriations, or expenditures. The Comptroller General shall also, at the request of any such committee, direct assistants from his office to furnish the committee such aid and information as it may request." These functions alone of all of those now vested by law in the General Accounting Office and the Comptroller General would be vested in the Auditor General by section 303 (f) of the bill, which reads: "(f) The Auditor General shall make such investigations and reports as shall be requested by either House of Congress, or by the Joint Committee on Public Accounts, or by any other committee of either House having jurisdiction over expenditures, appropriations, or revenue; and the Auditor General shall furnish any such committee such aid and information as it may request." The General Accounting Office was created by section 301 of the Budget and Accounting Act of June 10, 1921 (42 Stat. 23) as an establishment "independent of the executive departments and under the control and direction of the Comptroller General of the United States," primarily for the purpose of adjusting and settling all "claims and demands whatever by the Government of the United States or against it, and all accounts whatever in which the Government of the United States is concerned, either as debtor or creditor." Section 302 of said act provides for the appointment of a Comptroller General and an Assistant Comptroller General by the President, by and with the advice and consent of the Senate, and section 303 of the act fixes the term of office of each at 15 years and provides, in effect, that neither shall be removed except by action of the Congress for enumerated causes. Section 304 of the act vested in and imposed upon the General Accounting Office all powers and duties theretofore conferred or imposed by law upon the six auditing offices and the office of Comptroller of the Treasury, the directing head of each of which was required to be appointed by the President by and with the advice and consent of the Senate. The Bureau of the Budget was created by section 207 of the Budget and Accounting Act of June 10, 1921, 42 Stat. 22, as a Bureau in the Treasury Department. Said section provides, also, that there "shall be in the Bureau a Director and an Assistant Director who shall be appointed by the President", no action by the Senate being required and no provision being made with respect to tenure. The bill S. 2700 would not relieve the Bureau of the Budget of any of the duties now imposed upon it under the law, but would add thereto all of the duties and powers now imposed or conferred upon the General Accounting Office, with the single exception hereinbefore mentioned. Section 203 of said bill would transfer from the President to the Secretary of the Treasury the power to appoint a Director and an Assistant Director of the Bureau of the Budget, unless the President should find that such offices are policy-determining in character, in which event vacancies in such offices would be for filling by the President, by and with the advice and consent of the Senate. Among the other duties now imposed by law upon the Comptroller General which the bill would transfer to the Director of the Budget, the head of a bureau in the Treasury Department, are: (1) The rendering of decisions at the request of the disbursing officers or the head of any executive department or establishment upon any question involving a payment to be made by them or under them; (2) the countersigning of warrants issued by the Secretary of the Treasury for setting up appropriations, for the payment or advancement of funds therefrom, for transferring funds from one appropriation to another, etc.; (3) the settling of all claims by or against the Government; (4) the reporting under the act of April 10, 1926 (45 Stat. 413), of equitable claims to the Congress for its consideration; (5) the superintending of the recovery of debts certified to be due the United States; and (6) the approving of requisitions for the advance of funds to and the settlement and adjustment of the accounts of disbursing officers. The bill would make no change in the requirements of law with respect to the expenditure of appropriated funds or the accountability therefor, except that the duty and responsibility now imposed by law upon the Comptroller General in connection with the enforcement of such requirements would become the duty and responsibility of the Director of the Bureau of the Budget in the Treasury Department. While section 301 (b) of the bill would authorize the Attorney General to render, upon request therefor, an opinion with respect to the jurisdiction of the Director of the Bureau of the Budget in connection with the settlement of any public account, and would make such opinion final and conclusive upon all other officers and agencies of the Government, the decisions and determinations of the Director on all matters arising in connection with the settlement of accounts, not found by the Attorney General to be without his jurisdiction, would be as final and conclusive as are the decisions and determinations of the Comptroller General under existing law. In other words, the bill would transfer to the head of a bureau in the Treasury Department, to be performed by the bureau in addition to the duties for the performance of which that bureau was created 16 years ago, all of the duties relating to the audit and control of expenditures from appropriated moneys for the performance of which an independent establishment (the General Accounting Office) was created by the Congress by the Act of June 10, 1921. Section 302 of the bill would establish a General Auditing Office as "an agency of the Congress and independent of the executive branch of the Government' under the direction and control of an Auditor General. The Auditor General and Assistant Auditor General would be appointed by the President, by and with the advice and consent of the Senate, and would be subject to the same provisions as to salary, term of office, conditions of removal, etc., as are applicable under existing law to the Comptroller General and the Assistant Comptroller General, respectively. In addition to the duty which would be imposed upon the Auditor General under the provisions of section 303 (f) hereinbefore quoted, the bill would impose upon the General Auditing Office the duty of auditing "all public accounts after payment but prior to settlement by the Director of the Bureau of the Budget” and of notifying the accountable officer and the Director of the Bureau of the Budget of any exceptions taken to items in the accountable officer's accounts. But as the bill would require that all contracts "in any manner connected with the settlement of public accounts", which contracts are now required by section 20, title 41, United States Code, to "be deposited promptly in the General Accounting Office", be kept in the Bureau of the Budget, and would preclude the General Auditing Office from retaining the accounts or vouchers showing previous payments, the only basis for such audit or exceptions would be the current accounts and papers as submitted by the accountable officers. Also, the bill would preclude the General Auditing Office from keeping any accounts or records of the appropriations made by the Congress or of advances therefrom to the accountable officers. In other words, while the bill would purport to require an audit by the General Auditing Office as an agency of the Congress, it would in fact render impossible a proper or effective audit by such agency, and since section 303 (b) would require that accountable officers "promptly transmit their accounts, together with all supporting documents, to the appropriate representatives of the General Auditing Office for audit", instead of transmitting them to the department or establishment concerned for administrative examination before being forwarded to the General Accounting Office for audit, as required under existing law, thereby rendering impossible the continuance of the administrative audits or examinations by the various departments and establishments as required under existing law, the entire duty and responsibility of determining whether appropriated moneys are used solely for the purposes for which the appropriations were made and in accordance with law, and that the expenditures do not exceed the amounts appropriated, would be vested in the head of a bureau in the Treasury Department. Section 303 (c) would require that the Director of the Bureau of the Budget furnish the General Auditing Office, for examination, copies of all certificates issued by him in settlement of public accounts and would require the Auditor General to report to the Director and to the Congress all public accounts deemed by him to have been improperly settled by the Director, but is is not apparent how an examination of a copy of the certificate, alone, without the papers of the account on which it is based, could disclose whether the account had been improperly settled. Hence, for such an examination to be effective it would be necessary for the General Auditing Office to examine not only the certificate of settlement but the statement of the account, the accountable officer's account current, the regulations for funds, the accountable warrants, the schedules and other official papers, but not the vouchers previously examined to which no exception had been taken. The reexamination by the General Auditing Office for the purpose of ascertaining which of the exceptions taken by said Office had been cleared by evidence or explanations submitted or recoveries made by the accountable officer, the administrative office, or the Bureau of the Budget subsequent to the original audit by the General Auditing Office, and for the purposes of determining the items which are to be reported to the Congress because of disagreements between the Auditor General and the Director of the Bureau of the Budget, would, it is believed, involve more work than is now involved in the adjustment and settlement of accounts by the General Acccounting Office under existing law. Also, the audit which the Bureau of the Budget would be required to make before it could settle the accounts would be a duplication of the audit which the General Auditing Office would be required to make before forwarding the accounts to the Bureau of the Budget for settlement. Section 303 (e) of the bill would require the Auditor General to make a complete annual report to the Congress not later than March 1 of each year "with respect to the audit made by the General Auditing Office of the receipts and expenditures of the Government during the preceding fiscal year." It will be noted that this provision refers to receipts as well as expenditures and yet the bill not only makes no provision for any audit by the General Auditing Office of receipts, but by the plain terms of section 306 would prohibit any such audit by said office. With respect to the settlement of claims against the United States, which is one of the functions the bill would transfer to the Bureau of the Budget, it is to be noted that while section 303 (b) would require accountable officers, in submitting their accounts to the General Auditing Office for audit, to transmit therewith all supporting documents, the supporting document on which an accountable officer would make payment of a claim settled by the Director of the Bureau of the Budget would be only the Director's certificate of settlement. Hence, the General Auditing Office, in the audit of the account, would have no means of ascertaining whether it concurred in the action of the Director in the allowance of the claim, and the bill makes no provision for an examination by the General Auditing Office of claims settlements made by the Director or for reporting to the Congress any allowances believed to have been made without authority of law therefor. My view is that the proposed transfer of functions from the General Accounting Office and the Comptroller General to the Bureau of the Budget and the Director of such Bureau would not provide either a more economical, more efficient, or a more expeditious procedure for the adjustment and settlement of claims, or for the adjustment and settlement of the accounts of disbursing officers, than is provided for under existing law. The question as to whether the interests of the Government in other respects can be best served by having such functions performed in an independent agency answerable to the Congress or in a Bureau of the Treasury Department, which department now has control over the collection of revenues, the submission of estimates for appropriations, the making of contracts for the construction of public buildings and for the purchase of supplies and equipment for various departments and establishments, and the making of disbursements for most of the departments and establishments of the Government, involves a matter of policy on which I express no opinion. Sincerely yours, R. N. ELLIOTT, Acting Comptroller General of the United States. Senator O'MAHONEY. Do you mean by that that last sentence that you want to avoid expressing any opinion with reference to the General Accounting Office? Mr. ELLIOTT. Well, that is what is in here. I would like to go a little further here, and I think I can make it plain to you. This controversy started in 1789 and has been going on ever since. It commences with the passage of the act that provided for the appointment of a Secretary of the Treasury. Senator O'MAHONEY. Now, when you say "this controversy" I suppose you mean the method by which accounts had to be examined? Mr. ELLIOTT. Yes. It provided for the appointment of a Secretary of the Treasury, the Treasurer of the United States, Comptroller of the Treasury, and the Registrar of the Treasury. That was the beginning of all of it. The bill was signed by George Washington, I think, on September 2, 1789. From that time on up until the 1st day of July 1921, the Comptroller's Office remained in the Treasury of the United States. During that time there had been a great many different controversies arising about various things and they had a lot of different acts passed, the most important of which, however, was the passage of the Dockery |