2. Reduction of paperwork.-A large amount of paperwork represented by listings of periodic payments has gradually been eliminated through special arrangements worked out with administrative agencies. An allied development was the adoption in 1952 of a schedule form of voucher, which replaced the use of detailed vouchers for disbursing purposes. 3. Direct deposits of collections.-After study in 1954, allied to the modification of the warrant system, procedures were instituted under which administrative agencies make deposits of collections directly with authorized depositaries for the account of the Treasurer of the United States, instead of through disbursing officers, thus eliminating intermediate handling. 4. Technological improvements.-The use of punchcard checks on a limited scale was begun in 1933 and was expanded in large proportions early in World War II, when it became necessary because of the then unprecedented volume of checks drawn on the Treasurer, United States, to decentralize check payments to Federal Reserve banks. In recent years, the program to convert to punchcard checks has been accelerated to take advantage of the savings which have been proved possible in issue, payment, and reconciliation operations. At the present time all checks drawn on the Treasurer of the United States are in punchcard form. U.S. TREASURER'S OPERATIONS 1. Check payment and reconciliation.-A joint study by the Treasury Department, the General Accounting Office, and the Bureau of the Budget, of the check payment operations of the Office of the Treasurer of the United States and reconciliation operations formerly performed by the General Accounting Office, resulted in the installation of highspeed electronic data processing machines for verifying checks cleared for payment as compared with check issues and reported by Government disbursing officers. Operations with the new equipment began in August 1956 and at the present time the Treasurer of the United States is performing on an integrated basis both functions of paying checks and the reconciliation or proof of such checks, at a substantial savings to the Government. 2. Reduction of checking accounts.-In 1953, the practice of maintaining disbursing officers' checking accounts in the names of individual disbursing officers was discontinued. Such accounts are maintained by disbursing station instead. Thus, when there is a change in disbursing officers, it is not necessary to establish a new checking account, as had been the case before, which had resulted in a multiplicity of checking accounts for each disbursing station. Up to 1954, numerous checking accounts had been maintained primarily for the purpose of obtaining classifications of transactions reported in the daily Treasury statement. With changes then made in financial reporting it was possible to eliminate checking accounts maintained only for classification purposes. The elimination in 1954 of procedures under which advances by warrant were made to disbursing officers, resulted in a substantial simplification of accounting both in disbursing offices and the Office of the Treasurer of the United States as it is no longer neces sary for them to maintain accounts reflecting balances of advances. Disbursing officers now draw checks on the basis of duly certified vouchers directly against the general account of the Treasurer of the United States as authorized by joint regulations issued under the Budget and Accounting Procedures Act of 1950. 3. Substitute and uncurrent checks.-Another joint study relating to substitute and uncurrent checks was followed by the enactment of Public Law 183, approved August 28, 1957, which has enabled substantial simplification of procedures followed in processing claims and accounting for the amounts of substitute and uncurrent checks. 4. Consolidation of bank transcripts.—It had been the practice for the approximately 600 general depositaries to submit directly to the Treasurer of the United States their daily transcripts of transactions in the Treasurer's account, together with related documentation. This procedure was changed in 1954 by having the general depositaries report directly to the Federal Reserve banks and branches of which they are members. In addition to the regular daily transcripts of the Federal Reserve banks and branches, only 36 daily transcripts are now received, consolidating the transactions of the 600 general depositaries. OTHER IMPROVEMENTS IN FISCAL OPERATIONS 1. Self-insurance fund.-Under the Government Losses in Shipment Act of 1937, a fund was established, administered by the Treasury Department, which is available for payment of claims of Government agencies on account of loss in shipment of valuables for which they are responsible. Experience under the act has been highly beneficial, and the Government has saved many millions of dollars in premiums that would have been paid out in the past 22 years to insure valuables in shipment. 2. Imprest funds.-To facilitate procedures for making small purchases, the Secretary of the Treasury, the Comptroller General, and the Administrator of General Services joined in regulations issued in 1952, under which imprest cash funds were made available for paying for such procurements. 3. Fidelity bonding.-In 1955, legislation was enacted under which provision was made for simplification of administration of the fidelity bonding system, through provision of authority to procure blanket and position schedule type bonds, and payment of fidelity bond premiums from agency appropriations. Experience indicates that savings in administrative expenses have been more than sufficient to compensate for relieving employees of the expense of payment of bond premiums. 4. Depositary receipt procedures.-Employers who make deposits of Federal taxes in designated bank depositaries as required by Treasury regulations issued under authority contained in the Current Tax Payment Act, 1943, are given a receipt which is filed with the tax return as evidence of payment. In 1950, a punchcard form of depositary receipt was adopted which facilitates accounting and audit operations. The depositary receipt system was used originally for withheld income taxes, and has been extended to social security (1950), railroad retirement (1951), and certain excise taxes (1953). 5. Public debt accounting.-Since 1957, detail public debt accounts are maintained only in the Bureau of the Public Debt, which reports monthly summary totals of issues and redemptions for central accounting purposes. Basic information regarding savings bond transactions, series E, now in punchcard form, is obtained through the electronic data processing system installed in 1958 for the issuance, servicing, and retirement of such bonds. 6. Relief of fiscal officers.-In order to eliminate the necessity for separate private relief bills, Congress has enacted general legislation under which the Comptroller General, in the absence of fraud or negligence, may grant relief to accountable officers in the case of physical loss of funds and erroneous payments. This legislation includes Public Law 333, enacted in 1947, relating to erroneous check payments by the Office of the Treasurer of the United States, Public Law 334, enacted in 1955, relating to physical losses of funds and Public Law 365, enacted in 1955, relating to erroneous payments by disbursing officers. 7. Accounting for payment of prior-year obligations.-Public Law 798, approved July 25, 1956, provides for (1) the writeoff of unobligated balances of annual appropriations as of the close of the fiscal year for which they are available, (2) the transfer after 2 more years of the obligated balances of such appropriations to a successor account available indefinitely for the payment of obligations duly incurred, and (3) the payment of claims against successor accounts by agencies without preliminary review by the General Accounting Office unless doubtful questions of law or fact are involved. SUMMARY OF SAVINGS The modernization of systems and procedures relating to the Treasury's central accounting and reporting, which has been accomplished under the Budget and Accounting Procedures Act of 1950, has resulted in identifiable annual savings aggregating about $1 million, mostly in areas involving Treasury activities. To a large extent also, the conversion of the central accounting processes and corresponding relaxation of former rigid central control requirements has resulted in simplification of many operations throughout the Government. These benefits have been widely spread among the departments and agencies in varying degrees; hence, much of the economy achieved governmentwide cannot very well be expressed in dollars. Technological improvements in the large-scale central fiscal operations of the Treasury have resulted in significant savings in (1) the Office of the Treasurer of the United States, and (2) the Division of Disbursement, Bureau of Accounts. (1) The largest single factor with respect to the operations of the Treasurer of the United States over the years has been the production of the punchcard form of Government check throughout the Government's disbursing systems. It is clearly evident that without the mechanization made possible by punchcard checks, annual costs for the check payment operations of the Treasurer, in light of the progressively increasing volumes which began in the early forties, would have been at least $5 million more a.year, aside from the fact that operating conditions would prob ably have been chaotic. Also, check reconciliation work performed until recently in the General Accounting Office would have cost substantially more. Moreover, the culmination of the program for converting from paper to punchcard checks contributed materially to the advent of the electronic data processing system in the Treasurer's office in 1956-a system which now encompasses both the payment and reconciliation of all Government checks and which made possible substantial savings in the General Accounting Office and the Federal Reserve System. (2) The continuing technological improvement program has been significant in the Division of Disbursement which issues about two-thirds of all the Government's checks. In 1933, the year that the Division was organized to perform the central disbursing function, it cost about 13 cents to produce a check on the average. Through successive production improvements over the years the average cost is now 4.2 cents per check, notwithstanding the fact that salaries have more than doubled and material costs have risen substantially since 1933. An intensive equipment modernization program was initiated in the Division in 1947. Certain general comparisons of the present with the year 1947 are enlightening: An even more realistic comparison is one in which the fiscal 1947 base is adjusted to reflect the same salary rates prevailing in fiscal 1960. On this comparative basis, the workload output has been increased by 65 percent and at the same time salaries have been reduced almost 50 percent. The Division is now at a point when electronic data processing systems, with magnetic tape, are scheduled to be installed for check production and further significant savings will be achieved. BUREAU OF the Budget The budget is the proposed annual financial plan of the Federal Government which the Congress considers and approves or modifies. The budget process encompasses both formulation of the President's budget and execution of the budget as approved by the Congress. The budget process then is one of the important elements of governmental management. This is the medium through which an agency determines, requests, and obtains the financial authority needed to carry out contemplated programs, and the mechanism the agency uses for financial management and control of operations within the limits of funds made available by the Congress. In the period beginning with 1948 there have been a number of significant developments in the budgeting field. Progress has been marked by changes designed to provide a better basis for congressional consideration of the budget, i.e., improved budget presentation and support. However, these improvements have been accompanied by progress in the strengthening of financial management in the executive branch and in the simplification of budgetary and financial procedures. Especially in the latter part of this period there has been increased emphasis given to accounting improvements as a part of the program to strengthen financial management. In 1955 the second Hoover Commission urged more rapid progress in effecting accounting improvements, and in line with those recommendations there was established in the Bureau of the Budget the following year an Office of Accounting to give greater leadership to the executive branch effort. In September 1960, this Office was redesignated the Office of Financial Management to more clearly describe its functions. Meanwhile, under the existing joint program arrangement, the Bureau of the Budget, the General Accounting Office, and the Treasury Department have stressed greater collaboration between those central agencies and the various other departments and agencies in the installation of modern and more efficient accounting systems. BACKGROUND Prior to 1948 the budget process in the Federal Government was based primarily on the use of obligation and disbursement information. Requests for appropriations generally were designed to bring out the amount of authority needed to cover orders to be placed for specific objects, such as salaries, travel, rents, utilities, etc. In the execution phase, the agency financial management systems concentrated on control of obligations incurred, in order to insure against obligating and disbursing in excess of appropriated amounts. Those systems generally were adequate for compliance with legal requirements, but they did not in all cases reach their full potential as budget and management tools because of a failure to develop significant operating information of a financial nature. PERFORMANCE BUDGETING Perhaps the most significant improvement in budget presentation since 1948 was the introduction of performance budgeting. With the recommendations of the first Hoover Commission providing impetus, the budget document for the fiscal year 1951 was refashioned to introduce a program or activity classification for each appropriation, and to introduce workload and other significant performance data in narrative form. The product constantly has been improved since 1951. Activity schedules have been made more meaningful and workload data have been introduced to an ever-increasing extent. For a large number of appropriations there is printed in the budget document either summary measures of work and performance or, where no single measure may be adequate, a whole series of workload measures. Narrative statements of program and performance have been printed as a means |