agency cost-based budget presentations will provide addi- The use of annual accrued expenditure appropriations We also believe that appropriation requests on the accrued expenditure basis would provide a more direct relation to budget balance. Under this method the relationship between appropriations and checks issued-the basis for calculating the surplus or deficit-would be much closer than is the relationship under existing practice. In making appropriation determinations that involved consideration of the adequacy of agency plans for receipt and application of goods and services, the Congress would play a more positive role in the Government's financial planning. Arriving at the level of appropriations on this basis, it would be in a position to give more consideration to the effect of agency proposals on the annual surplus or deficit result for the Government as a whole. ACCRUED EXPENDITURE LIMITATIONS IN 1960 AND 1961 BUDGET ELIMINATED BY THE HOUSE COMMITTEE ON APPROPRIATIONS In accordance with provisions of Public Law 85-759, the President. submitted to Congress six appropriations with accrued expenditure limitations in his 1960 budget. The House Committee on Appropriations, in reporting the 1960 appropriation bills did not include any of the six limitations recommended by the President. The committee gave the following explanation in its report (H. Rept. 227, 86th Cong.) on the Treasury and Post Office appropriations for 1960: The budget for 1960 proposes the inclusion of so-called annual accrued expenditure limitations on six appropriations. Two of those are Coast Guard appropriations carried in the accompanying bill. The committee has not, however, included the proposed accrued expenditure limitations. There are several reasons why. The budget proposals for the six limitations stem from the requirement in Public Law 85-759 of the last session that whenever the President determines that a satisfactory system of accrual accounting for an appropriation has been established, he shall then propose in the budget an accompanying accrued expenditure limitation. That law was based on the bill H.R. 8002. And, in turn, at its inception, H.R. 8002 was based on a recommendation of the Hoover Commission. But the law that was finally enacted was as different from the original concept as day is from night. The original concept and bill would have made a fundamental change in the method of stating budget estimates and making appropriations. The enacted version does not; it provides merely for the superimposition of an accrued expenditure limitation on an appropriation made on the traditional basis. The original concept was advanced as a method of enabling Congress to exercise closer control over spending. Yet the enacted version not only does not provide for changing present methods of making appropriations but actually provides for granting the department head authority, in the words of the law itself, "to make transfers, within his department or establishment, between such limitation on annual accrued expenditures." Where is the closer control of spending by the Congress when such transfer authority is granted? The budget proposed such transfer authority with respect to the Coast Guard. The original concept and bill contemplated tremendous reductions in unexpended carryover balances of appropriations. The enacted version does not. Of course, it should be noted that even under the original version, there would have been offsetting increases in unexpended carryover balances because of the substitution of contract authority with no resultant change in overall unexpended carryover bal ances. The original concept and bill mandatorily would have required use of the accrued expenditure technique in appropriation bills. The enacted version and the floor debate make it abundantly clear that its use in appropriation bills is discretionary. In the case of the Coast Guard, the testimony is conclusive that 1. Changes would have to be made in accounting, reporting, and related procedures; 2. There would be added personnel and redtape with resulting increased costs and no returns in operating efficiency or economy. Therefore, no useful purpose whatever was given the committee to justify inclusion of the limitations in the bill. * * * In the case of the six appropriations to which the budget proposes to append an accrued expenditure limitation for 1960, that same budget proposes that total appropriations in the six instances be increased in the net amount of $5 million plus and that expenditures be increased in the net amount of $16 million plus over the current year. In the opinion of the committee, the facts are conclusive that this proposition is an absurdity and would not save any money, and the committee has acted accordingly. The Senate Committee on Appropriations restored one of the limitations for the U.S. Coast Guard appropriation (S. Rept. 305, 86th Cong.), which passed the Senate. However, the provision was eliminated in conference at the insistence of the House Members (H. Rept. 425, 86th Cong.). The President, in his 1961 budget to the Congress, recommended that accrued expenditure limitations be placed on 12 appropriations, in accordance with Public Law 85-759. None of the 12 limitations recommended in the budget were approved by the House Committee on Appropriations. The committee, in its reports, gave no reasons. for not including the recommended limitations in the respective appropriation bills. As a result of this action (Public Law 85-759 expires on April 1, 1962), Congress or the executive branch of the Government have not had an opportunity to evaluate the results of the accrued expenditure limitation in operation. OTHER BUDGET AND ACCOUNTING LEGISLATION In addition to the above outlined enactments, there were a number of amendments to existing laws, and other enactments which were designed to improve the financial management program of the Federal Government approved in the 80th through the 86th Congresses. Some of the more important of these are briefly outlined as follows: BUSINESS-TYPE BUDGET AND REVOLVING FUND FOR THE BUREAU OF ENGRAVING AND PRINTING (PUBLIC LAW 81-656) Following enactment of the Budget and Accounting Procedures Act of 1950, the chairman of the Committee on Government Operations directed the staff, in cooperation with the Department of the Treasury, the General Accounting Office, and the Bureau of the Budget, to develop legislation which would provide for a new method of budgeting, financing, accounting, and auditing for the Bureau of Engraving and Printing. Pursuant to this directive, a bill, S. 3653, was introduced by the chairman and reported favorably (S. Rept. 1932, 81st Cong.) and was approved as Public Law 81-656 on August 4, 1950. The act provided for a business-type budget, a revolving fund, and conformed to overall budget and accounting policies contained in the Budget and Accounting Procedures Act of 1950, and was in line with the policies and objectives of the joint program for improving accounting in the Federal Government. The revolving fund was established on July 1, 1951, with capitalization on the basis of initial appropriation by Congress and all assets in custody of the Bureau, exclusive of buildings occupied, lands, and balances of unexpended appropriations. As a result, the operations of the Bureau were no longer required to be financed on the basis of annual appropriations except for possible working capital additions, thus simplifying the appropriation pattern. The operations of the Bureau of Engraving and Printing are essentially of an industrial and service nature, involving the production of currency, securities, stamps, and other classes of engraved work for the benefit of such agencies as the Office of the Treasurer of the United States, Bureau of Internal Revenue, Bureau of the Public Debt, the Post Office Department, the Department of Defense, Government cor porations, and the Board of Governors of the Federal Reserve System. Prior to passage of the act, about two-thirds of the work done for these agencies was financed by annual direct appropriations and the remainder by reimbursements. Public Law 81-656 provided benefits in several important respects in that it (1) facilitated management of the Bureau of Engraving and Printing, (2) provided the Congress with the clearest and most complete picture of the cost of operating the Bureau, and (3) resulted in more effective audit from the standpoint of the Congress and of management. The management of the Bureau was facilitated by making it possible to finance the procurement of material and the replacement of equipment at such times and under such conditions as would be most advantageous to the Government, and aided by having a financial program on a less complicated and understandable basis for the more intelligent planning and execution of the Bureau's program. REIMBURSEMENTS TO THE DEPARTMENT OF THE TREASURY FOR SERVICES PERFORMED FOR OTHER AGENCIES (PUBLIC LAW 81-688) The chairman of the Senate Committee on Government Operations in the 81st Congress introduced S. 2018 at the request of the Department of the Treasury. The bill provided basic statutory authority for performing certain services which had been authorized from year to year in appropriation acts for the Department of the Treasury. It was reported favorably by the Senate (S. Rept. 897) and House (H. Rept. 2541) Committees on Government Operations and enacted as Public Law 61-688 on August 14, 1950. The act authorized Government agencies and corporations to pay the Division of Disbursement and Office of the Treasurer of the United States, for the performance of work authorized by law in those instances where funds have not been appropriated directly to Department of the Treasury to provide the services. It also authorized the Department of the Treasury to credit the funds received for performing the work to the appropriations which were current at the time the services were performed. REIMBURSEMENT OF DISBURSING OR ACCOUNTABLE OFFICERS (PUBLIC LAW 84–334) Under the provisions of the act of August 1, 1947 (61 Stat. 720), the General Accounting Office, if it concurred with the determination of the department or agency head concerned, was authorized to relieve disbursing or other accountable officers charged with responsibility on account of physical loss or deficiency in funds, records, etc., if such loss or deficiency occurred while the officer was acting in the discharge of his official duties or by reason of an act or omission of a subordinate, and without fault or negligence on the part of such officer (31 U.S.C. 82a-1). The only other recourse for relief was to have a private bill approved by the Congress. Many instances occurred where accountable officers, in whose accounts deficiencies appeared, made restitution out of their own pockets to cover deficiencies resulting from counterfeit banknotes, bad checks, petty thefts by subordinates, and other physical losses, although they were not personally or officially at fault and were otherwise entitled to relief from responsibility under the provisions of the 1947 act. However, an accountable officer who had personally covered a shortage in his official accounts could apply to the General Accounting Office, through his own agency head, for relief under the provisions of the act. In a decision rendered on January 27, 1948 (B-71073), the Comptroller General held that although the act authorized relief of responsibility on account of a deficiency in Government funds in a proper case, once restitution was made by or on behalf of the accountable officer no deficiency existed in the account for which relief under the act could be granted, nor was there any appropriation available from which reimbursement could be made (27 Comp. Gen. 404). S. 1806 was introduced by the chairman of the Senate Committee on Government Operations on April 26, 1955, to remove this existing inequity and eliminate the need for submission to the Congress of large numbers of private bills for the relief of disbursing officers. The Comptroller General and the Department of the Treasury proposed several amendments designed to clarify the application of the provisions of S. 1806 and to provide legal authority for the clearance of accounts of officers to whom relief is granted. Upon completion of preliminary action on S. 1806, and consideration of the proposed amendments, a copy of the bill, together with the amendments, was made available to the House Committee on Government Operations, which proceeded to report favorably a revised bill, H.R. 7035, on June 29, 1955 (H. Rept. 997). This bill which embodied the major amendments agreed to by the Senate Committee on Government Operations passed the House of Representatives on July 18, 1955, was reported on July 28 (S. Rept. 1186) and became Public Law 84-334 on August 9, 1955. The act authorized the Comptroller General to reimburse any disbursing or accountable officer of the Federal Government for payments made by him or in his behalf in restitution of a physical loss or deficiency in his account, if such loss or deficiency occurred without fault. or negligence on his part, and such reimbursement is recommended by the department or agency head concerned. PERMANENT AUTHORITY FOR THE RELIEF OF DISBURSING OFFICERS (PUBLIC LAW 84-365) Prior to the enactment of Public Law 84-365, approved August 11, 1955, the General Accounting Office was authorized to relieve a disbursing officer, in a proper case, only for a physical loss or deficiency in his account, if such loss or deficiency occurred while the officer was acting in the discharge of his official duties, or by reason of an act or omission of a subordinate, without fault or negligence on his part. The Comptroller General was provided with similar authority with respect to Army disbursing officers by the act of December 13, 1941 (31 U.S.C. 95a), and with respect to Navy disbursing officers by the act of July 11, 1919 (31 U.S.C. 105). Each of these statutes, however, vested in the respective service Secretary authority to determine whether such loss occurred in the line of duty and without fault or negligence on the part of such officer, and made such determination conclusive upon the General Accounting Office. |