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

Act, I think, in 1894. That set a rather complicated accounting system in the Treasury Department, and that continued almost as it was. passed up until the passage of the Budget and Accounting Act.

Senator O'MAHONEY. Well, a good part of that act is still in effect,

is it not?

Mr. ELLIOTT. Yes; a good part of it is still in effect. Where the trouble came in, as I understand it, was the question of having at the hands of Congress an independent audit by which they can see to it that the different executive departments of the Government spend the money in accordance with the appropriation acts that are passed from time to time by Congress. That is where the trouble came in.

In 1920, back in there, I happened to be a member of Congress at that time and went through that fight to take the General Accounting Office out of the Treasury Department and make it an independent institution. I did not take any particularly active part in it, but I knew what it was all about. At that time Congress had become so thoroughly dissatisfied with the way that the matter had been handled in the Treasury Department that they took it away from the Treasury Department almost by unanimous consent and passed a Budget and Accounting Act, under which we have been functioning ever since. Senator O'MAHONEY. Do you think that system has been an improvement?

Mr. ELLIOTT. I do; I think it has been an improvement. If the Congress wants to have an independent audit and have some independent control over the money that they appropriate from time to time they are either going to have to continue this or have something similar. I do not mean by that that this is probably all that it should be, nor that the General Accounting Office has been able to function in all the years in such a manner that it suited everybody.

In the first place, this institution was not established for the purpose of conducting petting parties, it was built up for a stern purpose, and, so far as I have been able to see, it has functioned just about the way it was intended to function, and, so far as I am concerned, I want to be put down squarely behind the General Accounting Office, continuing it under the existing law as it is.

Senator O'MAHONEY. Now, it was expected at the time that the latest act was passed, that the new regime would be of greater assistance to Congress in controlling the expenditure of funds than the old system. What has the General Accounting Office done to carry out that expectation?

Mr. ELLIOTT. Well, it has done a lot of things.

Senator O'MAHONEY. The reason I ask the question is, as a member of the Appropriations Committee I find that the committee is constantly in touch with the Bureau of the Budget, that we have before us all the time very full reports of estimates of expenditures; but we seldom hear from the General Accounting Office, except when we make a special request, Is there not a provision in the law that requires the General Accounting Office to make reports to Congress?

Mr. ELLIOTT. Well, I think it is safe to say that I send up a report to some committee of the Congress almost every day about something that they are inquiring about.

Senator O'MAHONEY. But there is no general report submitted. Mr. ELLIOTT. Well, we submit a general report once a year.

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Senator O'MAHONEY. Yes; but that is a very general sort of report, is it not?

Mr. ELLIOTT. Yes.

Senator O'MAHONEY. It does not go into very much detail.

Mr. ELLIOTT. Of course, I have only made one. You must understand my position here in this case. I was the Assistant Comptroller General.

Senator O'MAHONEY. Yes; that is clearly understood. Mr. ELLIOTT. This matter has been put up to me. I have been 14 months trying to do 2 men's work down there simply because the President did not see fit to appoint a Comptroller General. Now, 15 years of the time the General Accounting Office has existed it was under the guidance of Mr. McCarl, and I had nothing to do with the question of making policies, or anything of that kind.

Senator O'MAHONEY. There is nothing personal involved in the question, Mr. Elliott. I would not want you to think that for a moment.

Mr. ELLIOTT. There are millions of claims coming to the General Accounting Office every year, and there are countless legal propositions, and everything of that kind, coming through, so that no one man can keep it all in his head.

Senator O'MAHONEY. Now, the chief controversy which has been raging over the General Accounting Office ever since this President's committee report has, it seems to me, centered around what is known as a preaudit. How did the preaudit system grow up?

Mr. ELLIOTT. Now, if you want to go into that preaudit matter I would like to put on the stand Mr. Edwin Bell, the chief of the Audit Division. He can explain that to you better than I can.

Senator O'MAHONEY. I was not inquiring at the moment about the detail of the preaudit, but is it not a matter of fact that the law itself does not, as it stands now, require a preaudit?

Mr. ELLIOTT. It does not require it, but it authorizes it whenever they ask for it. All of this preaudit that is done is done at the request of somebody who is interested, in order that he may safely pay a bill.

Senator BYRD. Does it not go further than that, though, Mr. Elliott, because you are required to sign the warrants before the appropriation is made available?

Mr. ELLIOTT. Well, signing these bookkeeping warrants loosens up the money for general purposes.

Senator BYRD. I understand that, but are not you supposed to satisfy yourself as Comptroller General that the money is being spent in accordance with law before the warrants are signed?

Mr. ELLIOTT. No; you could hardly say that, because we do not know how they are going to spend it. This warrant just sets up the appropriation on the books.

Senator BYRD. Well, if you have any suspicion that it is not being spent properly, you have a right to refuse to sign a warrant?

Mr. ELLIOTT. Yes; and sometimes we do do that.

Senator BYRD. By reason of that, then, the Department is compelled to comply with the law before you sign the warrant and make available the money?

Mr. ELLIOTT. Yes; that is true in certain instances, but I thought you meant the preaudit. That is just as to the accounts that come

in.