REVIEW OF THE BUDGET FORMULATION AND PRESENTATION PRACTICES OF THE INTERNATIONAL COOPERATION ADMINISTRATION WEDNESDAY, APRIL 10, 1957 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON INTERNATIONAL OPERATIONS Washington, D.C. The subcommittee met, pursuant to recess, at 2:45 p. m., in room 304 Old House Office Building, Representative Porter Hardy, Jr. (chairman of the subcommittee) presiding. Members present: Porter Hardy Jr. (chairman), Henry S. Reuss, Charles B. Brownson, George Meader, and Victor A. Knox. Also present: John T. M. Reddan, chief counsel; Richard Bray, counsel; Walton Woods, staff investigator, and Phyllis M. Seymour, clerk. Witnesses present: John H. Ohly, Deputy Director for Program and Planning, John E. Murphy, Controller, International Cooperation Administration, Frederick K. Rabel, assistant to Association Director, Civil Accounting and Auditing Division, General Accounting Office. Mr. HARDY. Let the subcommittee come to order. I wish the record to show the presence of Mr. Reuss, Mr. Brownson, and myself; and you might just as well add Mr. Meader, because he will be here in just a minute. This afternoon we want to try to conclude the series of hearings we began on Thursday of last week, in an effort to determine what steps should be taken to assure that future ICA budget presentations will more adequately serve the needs of this subcommittee and the Congress. As I explained in the opening session, we, as a subcommittee are not directly concerned with the matter of appropriations. Our interest in the budget presentations of the ICA stems from the fact that, in carrying out our postaudit functions, we must use the budget document as one measure of the success or failure of the administration of nonmilitary foreign aid programs by the ICA. The ICA budget presentation should map the agency's activities with sufficient clarity for us to make an intelligent evaluation of their entire operation, past, present, and future, since a postaudit is pointless if it is concerned solely with past error and does not clearly point the way to future improvement. We had the privilege of having Comptroller General Campbell with us here at the opening of our hearings, and we also had the pleasure of having Mr. Hollister with us last week. We are glad to have back with us Mr. Ohly and Mr. Murphy of ICA. I want to ask the committee members to withhold their questions until Mr. Reddan has had an opportunity to develop the specific points he needs to develop. I believe we can expedite the hearing in that manner, and we will have a clearer record. I hope we can conclude this phase of our hearings promptly, and we will turn it over now to Mr. Reddan. I do want the record to show the presence of Mr. Knox, also. Mr. Ohly, we are glad to have you back, and glad you have Mr. Murphy with you. I am sure that between the two of you, you can come up with responses to the questions which we need answered.. Go ahead, Mr. Reddan. Mr. REDDAN. Mr. Chairman, may we have Mr. Rabel take the stand just a moment to submit to the committee two tabulations which he has prepared at the request of the committee? Mr. HARDY. Mr. Rabel, will you just come up temporarily, please, sir? Mr. REDDAN. If you will identify the lists for the record, please. STATEMENT OF FREDERICK K. RABEL, ASSISTANT TO THE ASSOCIATE DIRECTOR, CIVIL ACCOUNTING AND AUDITING DIVISION, GENERAL ACCOUNTING OFFICE Mr. RABEL. One list shows the status of selected major continuing projects for which funds were requested in 1957, as of June 30, 1956. Mr. REDDAN. Those are the current projects; is that right? Mr. RABEL. These are projects which are included in the 1957 budget presentation, which are of a continuing nature. Mr. HARDY. Of a continuing nature; that is one of the questions which was raised the other day. Mr. RABEL. Yes. Mr. HARDY. That is fine. Thank you for that, Mr. Rabel, and we will put that in the record at this point. We also will insert at this point any comments ICA wishes to make on the GAO presentation. (The documents referred to follow :) PRESENTATION OF THE GENERAL ACCOUNTING OFFICE STATUS OF SELECTED MAJOR CONTINUING PROJECTS, FOR WHICH FUNDS WERE REQUESTED IN 1957, AS AT JUNE 30, 1956 This list presents a sample of major projects for which ICA requested funds for 1957 and which had considerable balances of prior funds in the pipeline. These are illustrations of the evident need for disclosure of past accomplishments, so that the legislative committees can evaluate proposed funding plans. INTERNATIONAL COOPERATION ADMINISTRATION'S COMMENTS ON GENERAL ACCOUNTING OFFICE'S PRESENTATION OF STATUS OF SELECTED MAJOR CONTINUING PROJECTS, FOR WHICH FUNDS WERE REQUESTED IN 1957, AS AT JUNE 30, 1956 The following information is submitted by the executive branch to provide the committee with additional general background information that may be helpful concerning the nature of the projects referred to in the document submitted by the General Accounting Office. However, no attempt has been made to comment in detail on the status of most of these projects, but more detailed data can be supplied if the committee should wish. While no attempt has been made to comment project by project as to whether the information supplied by the GAO indicates or does not indicate that there was in fact overprograming or overfinancing measured solely by project criteria, the general observation can be made, based on the facts supplied below on each project, that while there were cases in which the original estimate as to fiscal year 1957, however good or bad they may have been at the time they were made, subsequently proved to have been high-in several instances, very high-in the majority of cases the soundness and desirability of making the request for fiscal year 1957 funds seems to be clear. No information is included with respect to those projects which are dealt with elsewhere in this testimony; namely, in Pakistan, Karnafuli Dam, the improvement and expansion of aviation ground facilities, and intercollege exchange, and, in India, grain storage and river valley development. 1. Pakistan (a) Punjab ground-water survey.-This project is designed to deal with one of Pakistan's most serious problems. Large acreages are becoming unproductive annually because of waterlogging and salinity and assistance is needed in checking this loss and consequent decrease in food production. United States assistance involves help in inventorying ground-water resources and in planning, and in carrying out, the necessary irrigation, drainage, and land reclamation. However, progress under this project has been comparatively slow, since the commodities which are involved have been slow in delivery, and this fact has been reflected in expenditures. The estimate as to fiscal year 1957 needs which is shown in the GAO list has proved to be an overestimate, and it is anticipated that only a small fraction of this amount will actually be needed for obligation for this specific activity in fiscal year 1957. |