88685 46 FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION EXHIBIT A.-Comparative statement of sources and application of funds [Fiscal years ending June 30, 1945, 1946, and 1947] 1 Excludes expenses which do not require funds during current year. (See exhibit B.) EXHIBIT B.-Comparative statement of income and expenses [Fiscal years ending June 30, 1945, 1946, and 1947] ANALYSIS OF SURPLUS RESERVES Add: Deduct: *Deduct. Mr. SOURWINE. Do you know whether those corporations retire their bonds from accumulated surplus or from reserves as a bookkeeping matter? Mr. LAWTON. No; I do not. I think they retired in part from realization on their assets-the Home Owners' Loan Corporation I am speaking of now-and from revenues from rent of properties and interest on bonds and things of that sort. Mr. SOURWINE. Before we leave those two corporations, I would like to ask this: Do you know of anything anomalous in the existence of a corporation without a board of directors? Mr. LAWTON. No, sir; you have another one right in the same agency. The Federal Public Housing Authority, which was the old United States Housing Authority under an Administrator, and so established by Congress. You have the Inland Waterways Corporation in the Department of Commerce, and I believe that some of the agricultural corporations are under the control of the Secretary. Mr. SOURWINE. Do you mean they were established by Congress in such a way that they have one-man control? Mr. LAWTON. Yes. Mr. SOURWINE. Therefore, in your opinion that is the well recognized form of creation of a Government agency? Mr. LAWTON. Well, it is recognized. I would not say well recog nized. The CHAIRMAN. Mr. Lawton, it has always been confusing_with me, when trying to fix these various housing agencies; FPHA, FHA, and two or three others. I never know which is which and what is the function of one as distinguished from the functions of the other. Is there anything in this bill that would aid a fellow in my confused condition? Do they come together? Are they brought together under one head? Mr. LAWTON. They are under the head of the National Housing Administrator in the National Housing Agency. There will still be the three constituent units. The Federal Home Loan Bank Administration_which has supervision over the home-loan banks, Federal Savings Insurance Corporation, and the Home Owners' Loan Corporation. The Federal Housing Administration which guarantees bank loans for the building of housing; and the Federal Public Housing Authority, which is a successor to the United States Housing Authority, established primarily and originally for slum clearance. That agency during the war had the defense housing program of the Federal Works Agency. They had the defense housing program of the Public Buildings Administration, certain housing for the War and Navy Departments, the nonfarm housing from the Farm Security Administration and the Defense Homes Corporation, originally an RFC, all of which were engaged in direct building with Federal funds, in the initial stage, of homes. The CHAIRMAN. My trouble has been to try to fix the jurisdiction of each organization in an occasion where something came up when I had to know what was to be done with a certain type of housing. You have repeated the names of them. I am wondering if this bill does away with any of these subordinate agencies, or does it put them in a consolidated form or does it do anything? Mr. LAWTON. Those agencies I last mentioned were consolidated by the War Powers Act order which established the Federal Public Housing Authority. They will remain consolidated for as long as legislative authority to conduct these programs exists. There will be a distinction between public housing and private housing agencies in that agency. Mr. SOURWINE. Mr. Lawton, can you tell me whether the Bureau of the Budget or the Director of the Bureau of the Budget conducts or carries out any audit of the books of the various corporations organized under the Office of Inter-American Affairs? Mr. LAWTON. No, sir, except insofar as we perform our functions in submitting a budget for those agencies under the Corporation Control Act. The General Accounting Office has the function of auditing. Mr. SOURWINE. Do you consider then that Executive Order 8512 of August 13, 1940, does not apply to these corporations? In fairness, I think I should read from that order, section 2 of which requires that The Secretary of the Treasury shall prepare and transmit to the Director of the Bureau of the Budget for the information of the President, such financial reports as may be necessary or desirable to make known in all practicable detail, the financial condition and operations of the Government and its various agencies. That Executive order also defines "agency" as including Government corporations. Mr. LAWTON. That is a system of financial reporting and not an audit. It is now geared in and is being changed to conform to the Corporation Control Act. Under that particular order there were two or three regulations issued governing corporations. They originally were issued in response to a Senate resolution to secure information as to Government corporations. It was Senate Resolution 150, the Seventy-seventh Congress, I believe. Mr. SOURWINE. I asked that question, because as was mentioned the other day, Public Law 678, of the Seventy-seventh Congress, second session (56th Statute, 708), provides that "corporations created by the Coordinator of Inter-American Affairs where operations outside of the continental United States may incur expenses and pay obligations, and so forth, without regard to provisions of law relating to the expenditure, accounting for, and audit of Government funds" and I wondered if that language had been deemed to override the language of Executive order that I quoted. Mr. LAWTON. The language of Executive Order 8512 would not relate to the legality or manner of expenditure. It would relate to the financial statements of the corporation. Mr. SOURWINE. Public Law 678 then relates to the manner and legality of expenditure? Mr. LAWTON. It relates to the manner and legality of expenditure by the corporation. That of course, is modified I would think, by the recent Corporation Control Act. Mr. SOURWINE. You anticipated the next question I was going to ask. They were then under Public Law 678 exempted from examination with regard to the legality and manner of their expenditures, but it is your opinion that under this later enactment of the Congress they are now required to be audited and their transactions to be reviewed with regard to legality in the manner of expenditures? Mr. LAWTON. That is true; however, I would not go so far as to say in the beginning they are not subject to audit; that I am not sure of. But it would be this sort of a case, as to certain types of expendi |