Mr. BELL. Yes, sir.

Senator O'MAHONEY. And this total number of 713,402 represents no more than 5 percent of all of the auditing work of the General Accounting Office?

Mr. BELL. That is correct.

Senator O'MAHONEY. Do you know, or can you give us any idea, of the total sum that was involved in the vouchers with which you found fault?

Mr. BELL. I have no record of those figures.

Senator O'MAHONEY. Were they small figures or large figures in individual cases, or could you state?

Mr. BELL. They would run from 50 cents to $1,400, those which have been called to my attention.

Senator O'MAHONEY Would you say that there was involved in this number of 713,402 any case of deliberate evasion of law by any department?

Mr. BELL. I do not know whether it would be a deliberate evasion; generally not. There were probably a few cases in which there was deliberate evasion.

Senator O'MAHONEY. Were any criminal cases developed in this less than 10 percent?

Mr. BELL. None that I can recall at the moment.

Senator O'MAHONEY. As a matter of fact, the fiscal officers of the Government are a pretty honest group, are they not?

Mr. BELL. They generally are.

Senator BYRD. It is not always a question of actual dishonesty, is it, but it is a question of carrying out the purposes of the appropriation? Senator O'MA HONEY. Let us find out. In the cases running from 50 cents up to $1,400, how many cases were there in which there was a deliberate evasion of law or a limitation of expenditure placed by Congress?

Mr. BELL. I would say relatively few.

The CHAIRMAN. How long, on the average, does it take you to make a preaudit, when it is asked by a department?

Mr. BELL. It takes an average of 3 days to preaudit a voucher. Of the 713,000, the average time was running about 3 days.

The CHAIRMAN. Does that include transportation vouchers?

Mr. BELL. No, that does not include transportation vouchers. They are handled in the Claims Division. That excludes transportation.

The CHAIRMAN. Three days until you examine them or until they are returned?

Mr. BELL. From the time we receive them until the time they are dispatched.

The CHAIRMAN. You do not seek that right to preaudit, you say? Mr. BELL. No, sir.

The CHAIRMAN. When the Department of Agriculture, or any other department, seeks it at your hands, it is, in effect, an effort on their part, to shift the responsibility over to you, is it not?

Mr. BELL. I do not know what their purpose is, but we try to cooperate with the departments and give them what they ask for, if they want it.

Senator BYRD. You think that the General Accounting Office should have that right of preaudit?

Mr. BELL. I think there is no objection to it.

The CHAIRMAN. Does it not make you become a party to an executive act rather than an auditing act in that predetermination? Mr. BELL. I have not so considered it.

The CHAIRMAN. Do you want to ask any further questions, gentlemen? That is all, then.

STATEMENT OF S. B. TULLOSS, CHIEF OF THE INVESTIGATIONS DIVISION, OFFICE OF COMPTROLLER GENERAL

The CHAIRMAN. Mr. Tulloss, your name has been suggested. If you care to make any statement with reference to the pending measure, we would be glad to hear you.

Mr. TULLOSS. You mean with reference to the bill?

The CHAIRMAN. S. 2700.

Mr. TULLOSs. Comment on the bill?

The CHAIRMAN. Yes, sir.

Mr. TULLOSS. My understanding of the bill, so far as it relates to my work, is that it contemplates the transfer of almost the entire function of investigations, as now set up in the Comptroller General's office.

The designation of the Investigations Division might be said to be somewhat of a misnomer. We do very little real investigating. Our work relates primarily to audit functions. Indeed, basically, they are audit functions, in that initially our work contemplates the development of audit procedures, the setting up of the accounts or the books of account, to which an audit may be made.

Finally, that same action is pursued to give effect to the function of auditing.

To explain, I think it is fundamental that an auditor must have books of account to which he can audit. He may not audit item by item, and pass them along, but must have some way of bringing the items into control to see that the sum total of that audit is in accord with the program necessary to the function as a whole.

If you separate the books from the audit, then you have nothing to control that which you have already done.

So that our work is, first, to inquire as to the accounting needs, in order that the books may be set up as the basis for ultimate audit action.

We survey the activities of a department or an establishment to ascertain what its needs are, in order to carry out the details as prescribed by law.

We carefully examine the law and the details of the functions step by step, and then we set up the administrative books to enable the administrative office to function within the appropriation.

At that point we prescribe the administrative accounting system. This action is pursuant to section 309 of the Budget and Accounting Act, which requires the Comptroller General to prescribe the forms, system, and procedure for administrative appropriation accounting. Senator O'MAHONEY. This work is done under you?

Mr. TULLOSS. Yes, sir.

Senator O'MAHONEY. I was interested in your reference to your function of keeping the departments within their appropriations. Can you give an instance of how that works?

Mr. TULLOSS. Of course the first thing after the appropriation is made is to have a warrant setting up the appropriation upon the books of the Government.

Senator O'MAHONEY. The full appropriation?

Mr. TULLOSS. The full appropriation. That appropriation appears on three sets of books at present, the Treasury, the General Accounting Office, and in the administrative office.

Senator O'MAHONEY. By the "administrative office" you mean the executive department for which the appropriation was made?

Mr. TULLOSS. Yes, sir; we build around that account the necessary controls to enable the department to keep detailed account of its transactions.

Senator O'MAHONEY. What do you mean when you speak of controls?

Mr. TULLOSS. You might term it ordinary bookkeeping in a sense. The books are so set up as to show the status of the funds at each step from the time that the appropriation by Congress is made until it is spent.

Senator O'MAHONEY: In other words, the General Accounting Office prescribes for the executive departments the manner in which the books are to be kept? .

Mr. TULLOSS. Yes, sir; and, as I said, that work, as performed in my office, is basically audit work, because it is necessary to enable the department to keep within the appropriation and to submit its accounts, as required by law, and in order that we in auditing those accounts can have the necessary books to reflect the transactions, not in the same detail as is carried by the department, but in somewhat of a summary detail, so that when we finish auditing an account, we will know whether the particular office has kept within its allotment or apportionment of funds.

Senator O'MAHONEY. Do they keep within their allotment?
Mr. TULLOSS. Not all of them.

Senator O'MAHONEY. Do any of them?

Mr. TULLOSS. Yes, sir; they do.

Senator O'MAHONEY. How about the deficiency appropriations? Mr. TULLOSS. The deficiency appropriation is generally for the purpose of expanding the original appropriation, but I think you have reference to the deficiency appropriations made necessary by violations of the Antideficiency Act. That is another thing.

Senator O'MAHONEY. What controls do you maintain with respect to the incurring of expenses for which Congress has to make provision in a deficiency bill?

Mr. TULLOSS. If it is contrary to the Antideficiency Act, that money could not be expended.

Senator O'MAHONEY. The Antideficiency Act is pretty broad, is it not?

Mr. TULLOSS. I do not know what you mean by "broad." It prohibits the incurrence of an obligation in excess of the appropriation. We set up just the appropriation, and if they go beyond that, the difference, the excessive obligation, will be reflected as a red balance in the account.

Senator O'MAHONEY. Is it true that ordinarily the departments come to Congress, asking for a deficiency appropriation, before the present appropriation has been expended?

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Mr. TULLOSS. I would say that is a general rule; yes, sir.

Senator O'MAHONEY. In how many instances have you found the departments exceeding the appropriations while you have been in charge of this work?

Mr. TULLOSS. I would not be able to say. There have been some instances, differences of opinion between the department and the office, as to whether there really has been an exceeding of the appropriation. Senator O'MAHONEY. Have there been very many instances in which there was even a difference of opinion?

Mr. TULLOSS. I do not know of many where there was a difference of opinion. Generally, the action of the General Accounting Office is accepted as determining that, the money is not available.

The CHAIRMAN. That is the actual expenditure. You do not mean that in some cases the departments do not go ahead and incur obligations and then come down with an estimate for funds in a deficiency bill to care for an obligation which has been incurred?

Mr. TULLOSS. They do that as a general rule, and that is generally done before we ascertain the facts.

The CHAIRMAN. Of course you have no knowledge of that?

Mr. TULLOSS. We may not have any knowledge at the time, although we may have caused the department to come to the Congress for relief. In other words the matter may be pending.

The CHAIRMAN. They know they have incurred the obligation, and if they send the voucher to you, you will turn it down, and they come to the Congress for an additional appropriation. Is not that about the procedure?

Mr. TULLOSs. Yes, sir.

Senator O'MAHONEY. In other words, this preaudit system about which there has been so much talk has never operated so as to prevent the incurring of the obligations in excess of the appropriations?

Mr. TULLOSS. That is not on the obligation end. That is on the expenditure end. We set up the account so as to avoid the incurring of obligations in excess of the appropriation, but now and then we find that their own books as posted reflect an excessive obligation.

Senator O'MAHONEY. The point which I am making there is that to avoid any controversy with the General Accounting Office, where an appropriation is being exceeded, all that a department has to do under the present system is not to send up the voucher for preaduit, and you do not know anything about it.

Mr. TULLOSS. Yes, sir; we would know about it.

Senator O'MAHONEY. That is what I want to get at. Describe how it works.

Mr. TULLOSS. The system of accounts provides for setting up obligations. Frankly, they do not all carry that out, and we are having some trouble about it; but if they carry out the accounting system and post their obligations to the accounts as prescribed, they will know immediately when they have exhausted their appropriations; that is, when the obligations would exceed their appropriations. They should find that out in time to stop before they exceed their appropriations.

Of course, we are behind in our work and do not always find out promptly, and if they send up nothing to audit, we would not find it quite so soon, but we always try to get around to an examination of the accounts and make a determination as to whether there has been an excessive obligation.

There again we have different views as to whether in some cases there is an overobligation.

The CHAIRMAN. The appropriation is apportioned by the Budget, is it not?

Mr. TULLOSS. It is apportioned by the Department.

The CHAIRMAN. If they incur obligations which are in excess of that monthly apportionment, then they certainly know there will be a deficiency, and they come up here for a deficiency?

Mr. TULLOSs. Yes, sir.

The CHAIRMAN. Because they have incurred obligations which make it certain that before the end of the fiscal year they are going to lack the necessary funds?

Mr. TULLOSS. Yes, sir.

The CHAIRMAN. But you could not very well know that until in some way it is called to your attention?

Mr. TULLOSS. We could, if we had the facilities for immediately analyzing all of these administrative accounts.

The CHAIRMAN. Now you would have to have somebody in every department doing it. I am in charge, let us say, of the Bureau of Animal Industry, and there is an apportionment of funds, so much per month, and I exceed that, or make an obligation which would exceed that, for the month of May. That means that if I pay that obligation, I won't have any money in June, and I promptly go up to the Director of the Budget to get it in the last deficiency bill. How could you get any information about that?

Mr. TULLOSS. Of course, we may not find it in some cases, except by investigation.

The CHAIRMAN. Unless you had a big force hunting all the time, a thing like that could not possibly come to your attention, could it? Mr. TULLOSS. We could fairly promptly examine their books, and if they posted their books correctly

The CHAIRMAN. That would mean that you would have to examine them in May or June, would it not, and would that mean for every department?

Mr. TULLOSS. Suppose we examined them promptly after the end of every month; we would know then.

The CHAIRMAN. Examine every department after every month? You certainly would, if you did that.

Mr. TULLOSS. Yes, sir.

Senator O'MAHONEY. But you would have no authority to control that?

Mr. TULLOSS. Yes, sir.

Senator O'MAHONEY. Let us see. Suppose that the department of which Senator Byrnes has just spoken was spending its appropriation at a rate greater than that which it should follow to make it last out the 12 months, and the department did not send up to the General Accounting Office the vouchers for preaudit. Then, unless you sent an investigator in, you would not know about it, would you? Mr. TULLOSS. Possibly not. That is right.

Senator O'MAHONEY. Assume that you did send in an investigator, and did find, let us say, that $150,000 had been appropriated for a particular object for the fiscal year, and it was being spent at the rate of $300,000 a year, and this investigator found out that, would you