ject matter is one which should have been of interest to the Committee on Foreign Affairs when it was considering extension of the foreign aid program. It may be that the thing just escaped their notice. We do get so much data up here that sometimes that happens.

I want to try to see to it that it doesn't escape the notice of the Congress now, that is why we are meeting.

Mr. CAMPBELL. Mr. Chairman, I am not sure whether we made this clear: Our reports go to the Speaker, and to the President of the Senate. They also go directly to Appropriations on both sides, to Foreign Affairs, to Foreign Relations, and to the Senate and House Government Operations.

Mr. HARDY. Do they go simultaneously to the Speaker of the House, the President of the Senate and the committees you listed?

Mr. STAPLES. It is our general practice with all of our reports we send to the Congress, addressed to the Speaker of the House, and the President of the Senate, to simultaneously send copies of those reports to the 2 Government Operations committees, the 2 Appropriations Committees, and usually the 2 legislative committees having jurisdiction.

Mr. HARDY. That being the case, if this matter escaped the attention of the Committee on Foreign Affairs, it must have been due to the fact that the staff didn't get around to studying it fully before they held the hearing on the bill.

I presume that must have been the case.

Did a copy of that report go to the ICA?

Mr. STAPLES. Yes, sir, Mr. Chairman; that also is our practice. Mr. HARDY. Did they make any response to it?

Mr. STAPLES. They made no direct response after he report was released, no.

Mr. HARDY. Did they make any indirect response to it?

Mr. STAPLES. Nothing that I can remember.

Mr. HARDY. In other words, they took no formal notice of it at all; is that right?

Mr. STAPLES. No formal notice; no, sir.

Mr. HARDY. Did they take any informal notice of it?

Mr. STAPLES. It took various forms; they did request a large number of additional copies from us of this report, which I presume they intended to distribute among their organization, to study it. Thereafter, we have had in the course of our day-to-day relations with them many different discussions, some of which involved matters contained in this report, but it wasn't anything like a formal reply to this report in which they recounted their observations, 1, 2, 3.

Mr. HARDY. In other words, they have never replied formally or taken exception to anything you have said in there.

Mr. STAPLES. Not formally; no, sir.

Mr. HARDY. Are there any further questions on this point?

Mr. STAPLES. I might say, Mr. Chairman, informally, if my recollection is correct, they haven't agreed with us on the possibility of minimizing or curtailing the transfer authority and broad-use authorities contained in the act.

Mr. HARDY. They haven't indicated any inclination to follow such a recommendation?

Mr. STAPLES. I think it is a little stronger than that. In my conversations with them, they indicated they didn't quite agree with us on that.

Mr. HARDY. That is not surprising, either. None of us likes to have someone operate on our purse strings. If we are operating loosely, those things continue.

There is one other question, Mr. Campbell, that occurs to me in connection with your statement in the next to the last paragraph. You make a distinction between allotting funds and obligating funds. How long have we been using that dual procedure?

Mr. STAPLES. Well, that is an internal procedure, Mr. Chairman, whereby they merely program a certain amount as representing the intention of the agency at that time to use the funds for a certain given purpose.

Mr. HARDY. They haven't got any more idea, usually, of what they are going to eventually do with them than they did when they made the presentation to the Congress; is that it?

Mr. STAPLES. With respect to the amounts they so allot-maybe "allot" is not the best word to use; "programing," or "setting aside" might be a better term-as to that money, they generally have a specific purpose in mind or a specific program in mind for which they set that aside.

They set it aside pending the completion of negotiations in order to finalize whatever the program is.

Mr. HARDY. I understand that that is what they do. The term "allot," though, it seems to me, is relatively new in our method of handling appropriated funds. I had heretofore understood what they meant when they obligated funds and had set them aside for a specific project, but I am having a little trouble with this new nomenclature. I am not sure there is a basis for that having any significance, unless it is purely for operational purposes within the agency.

Mr. STAPLES. That is correct.

Mr. CAMPBELL. Mr. Chairman, the system of allotments throughout the Government today internally is quite common. It is a very broad kind of a procedure, but they do, in general, make allotments for various kinds of activities.

Mr. HARDY. I had gotten the impression that perhaps ICA was using such a procedure for the purpose of keeping some appropriations back. Maybe some other agencies do that, too; I don't know. Can they avoid lapsation of an appropriation?

STATEMENT OF GEORGE STAPLES, ASSOCIATE DIRECTOR, CIVIL ACCOUNTING AND AUDITING DIVISION, GENERAL ACCOUNTING OFFICE

Mr. STAPLES. Not by that means; no. That is merely for their own internal purposes, so they will know how much of the total funds they have not yet programed or decided what they were going specifically, what programs they were going to undertake. It is to avoid the possibility of overobligating.

Mr. HARDY. Any further questions from the subcommittee?

Mr. MEADER. I was going to ask Mr. Staples if they had any discussions with the International Cooperation Administration prior to the release of this study of obligating bases?

Mr. STAPLES. Yes; we did.

Mr. MEADER. Did they have any fault to find with your recommendations in that discussion prior to your release of that document?

Mr. STAPLES. Well, as I remember, they went along with us on pretty much everything, except the matter having to do with their transfer of funds and broad-use authority. I don't believe they raised any serious objection to the rest of our report.

Mr. HARDY. Are you through?

Mr. MEADER. Yes.

Mr. HARDY. Go ahead.

Mr. BROWNSON. Mr. Chairman, I would like to ask Mr. Campbell one question. On the bottom of page 5 of his prepared statement the observation is made, quote:

It was not our thought that the recommended realinement would necessarily bring reductions in the amounts authorized and appropriated, since the presentation as it has been made may be said to represent, in its entirety, plannable activities.

If that is true, wouldn't it seem logical that in the future this might actually increase the amount of funds asked for, since they probably would ask for the entire amount for the plannable activities which they had in the past, then put in an additional amount representing the unforeseeable activities?

Mr. CAMPBELL. I don't think it would necessarily follow, but there may be some merit to it.

Mr. BROWNSON. If both were included in one category in the past, and if you were to include both categories in the future, it would seem that ICA would almost have to ask for an additional amount over their plannable activities to protect themselves.

Mr. CAMPBELL. This would not mean a third category. There are now two categories.

Mr. BROWNSON. As you say, to the extent funds were needed for unforeseeable activities, plannable activities in equivalent amount should not be undertaken. What I am trying to figure out is how you are going to work this out so one is subtracted from the other, and not added to the other.

Mr. STAPLES. It wasn't our intention that we would try to prescribe the amounts which the Congress would appropriate for each one, each category. It is conceivable that it could have resulted in an increase in the agency's request. Now, from that standpoint, it would be up to the Congress, and the Congress would decide how much they would appropriate or authorize for the plannable activities, and it was our thought that they would take into consideration how much they had previously used out of the total request or amount authorized for plannable activities, and how much of that had been used for special purposes. Now, the contingency fund that we recommended would not necessarily be an authorization to obligate, but, if there were no special purposes that arose, or no emergencies, presumably, none of it would be obligated.

Mr. BROWNSON. But you do state it is entirely foreseeable that the adoption of these recommendations would result in a higher overall budget request. Of course, Congress will work its will on that budget request, as they do on any budget request.

Mr. STAPLES. In that connection, I might say, following that report the Congress did authorize a special Presidential fund. Whether or not Congress in doing that reduced the request for plannable activities, I don't know. But they did establish this Presidential fund, which carried out the thought we had in mind.

Mr. HARDY. I am a little intrigued by this. We talked about ICA's contention that all of their presentation represents plannable activities. If we use this so-called project basis and say, "Here is a project to build roads in Afghanistan," I suppose under this terminology you might say that is plannable.

Mr. STAPLES. We would have to acknowledge it is a plannable activity.

Mr. HARDY. But, if we required that it be put on a project basis, there would have to be justification for the individual project as planned, would there not?

Mr. STAPLES. That is correct.

Mr. HARDY. Now, do you have any ideas as to the percentage of the presentations that have been made in this category that ICA could actually present in a project form and actually show a plan of action that was based on some realistic presentation and not just some figures somebody picked out of a hat?

Mr. STAPLES. In the last year, in 1956, I think, in preparation for their 1957 program, they had developed quite a lot of underlying information regarding their individual projects. Now, whether or not anyone would consider that to constitute complete, adequate evidence of a planned program, I think, would be a matter of opinion. We did not examine those in detail to make that kind of a determination. Mr. HARDY. So, you don't know actually whether the presentations could have been supported on a project-by-project basis to indicate reasonable planning?

Mr. STAPLES. I do not know directly, but I do know they had quite a wealth of information behind their individual projects. Now, just how much, I don't know. Whether or not it would have satisfied an adequate determination that they did have a well-thought-out plan for each project, I can't say.

Mr. HARDY. It seems to me that you are still dealing in such generalities that the Congress can't possibly get any notion as to the desirability or the wisdom of providing funds for a specific type of project. We just set up an agricultural program. We have a sweet time getting away with that in our domestic appropriations.

Mr. STAPLES. I think that is the point of our memorandum, the point of our thinking on that particular subject, in that what they present to the Congress does not represent all the information that they have. That is what I have just been trying to get over to you. What they present to the Congress, we do not believe constitutes an adequate basis upon which an evaluation can be made.

Mr. HARDY. Yes.

Mr. BROWNSON. Mr. Chairman, the thing that bothers me is the possibility that this is just going to create another cubbyhole into which these expenditures and appropriations requests can be funneled if this is carried through to its ultimate conclusion.

Mr. HARDY. That doesn't bother me, for this reason: When we embark on this type of an approach, I think we would have to insist that there be a detailed presentation, and I haven't any notion that a majority of these projects can be supported in a fashion that the Congress would approve on an individual basis. That is the type of presentation which, it seems to me, we must look toward.

Mr. BROWNSON. I certainly agree with the chairman on that point. What I am afraid of is those projects which cannot be defended on an individual basis will then be thrown over into the blanket "unforeseeable activities" category.

Mr. HARDY. I can be pretty sure the gentleman will try to whittle those down.

Mr. BROWNSON. We have been working on that project for some time now, ourselves. Nothing, however, may I say, is as unforeseen as an unforeseeable activity.

Mr. HARDY. Anything further, Mr. Meader?

Mr. MEADER. On another subject, I would like to ask a question. Mr. HARDY. All right.

Mr. MEADER. I would like to ask Mr. Staples whether the General Accounting Office, in its review of the expenditures of the ICA, has any knowledge of the amount of funds that have been expended by ICA or the State Department on two activities.

Mr. HARDY. Mr. Meader, if I might interrupt you just a minute, I don't want us to get too far afield here now, because Mr. Staples has a presentation, I believe, haven't you, Mr. Staples?

Mr. STAPLES. No; I do not. I have no prepared presentation.
Mr. HARDY. Go ahead.

Mr. MEADER. That is, publicity and propaganda activities promoting the foreign aid program, and also any funds expended on publicopinion surveys.

Mr. STAPLES. Mr. Meader, my understanding is that this is no longer carried on within the mutual-security appropriation at all. That is carried on primarily through the United States Information Agency, which is a separate agency, and for which a separate appropriation is made.

Mr. MEADER. Well, do you have access to such figures at the General Accounting Office, if there are any expenditures made by ICA or State Department, either on publicity and propaganda, or on public-opinion surveys?

Mr. STAPLES. I don't know whether or not USIA maintains any segregation in its accounts for propaganda and publicity in respect of specifically the mutual security program as distinguished from other types of purposes for which there is publicity. But if there is, I think that we would be able to ascertain it.

Mr. MEADER. I might say

Mr. STAPLES. We have made audits of the USIA, but we have not attempted in our audit work to distinguish between the types of publicity in respect of the mutual security program. But I think if that information is available within the agency, we could ascertain it.

Mr. MEADER. I might say that this matter was brought to my attention just this morning by a colleague, Congressman Lipscomb from California, a member of this full Committee on Government Operations but not of this subcommittee, who has, over a period of time, gone to some trouble to find out how much the State Department, or the ICA,