SUMMARY TABLES AND ANALYSES IN THE BUDGET DOCUMENT There has been a continuous improvement in the quality and informativeness of the summary tables in the budget document. Current budget documents include additional summary data designed to more fully disclose the scope of budget programs and the amount and use of the financial resources available. Among these are data on obligations incurred; carryover balances, obligated and unobligated; gross expenditures and receipts of public enterprise funds; and a split of the estimated expenditures in the budget year between those coming from new obligational authority and those coming from carryover balances. More special analyses of the budget are now provided, with the same objective in mind. These analyses supplement and rearrange material appearing elsewhere in the budget document so as to pull together information on subjects of current interest; for example, the amount of Federal expenditures for research and development. FEDERAL BUDGET IN BRIEF In order to promote a better understanding of the Federal budget, the Bureau of the Budget in 1950 introduced a new publication called the "Budget-in-Brief." It summarizes highlights of the President's annual budget in concise, nontechnical terms. Set forth in brief textual statements, illustrated by charts, are the basic facts on where the Government's money comes from and where it goes. That this pamphlet has achieved its purpose is attested by its popularity with Members of Congress as well as others. ADMINISTRATIVE AGENCIES Many improvements have been made by the administrative agencies since 1948 in modernizing their budget and accounting systems and procedures. These improvements, which are outlined in the reports published annually under the joint program to improve accounting in the Federal Government (now known as the joint financial management improvement program), range from simplification of methods and procedures for processing documents and transactions to complete revision of the financial management system in individual agencies. In broad perspective, the improvements in the administrative agencies contemplate the modernization and streamlining of agency accounting and budgeting in order to fully disclose the assets and liabilities of the Government and to provide meaningful financial data in terms of costs for use by management in the administration and operations of the agencies. The basis for developing these improvements is provided by several statutes, particularly the Budget and Accounting Procedures Act of 1950 and by Public Law 84-863, approved August 1, 1956. The latter act requires agency use of accrual accounting and cost-based budgeting for these purposes. Since these techniques were not used in many areas of Federal activities (particularly those financed by appropriations) prior to 1950, the budget and accounting improvements of the agencies during the past decade may be measured broadly in relation to the degree to which the agencies have adopted and are using accrual accounting and cost-based budgeting. The Annual Report of the Joint Financial Management Improvement Program for Fiscal Year 1960 shows each agency's own evaluation of the extent to which it has completed programs for modernization of its financial management systems. These reports indicate that, as viewed by the agencies, considerable progress has been made in the installation of accrual accounting and use of cost-based budgeting practices. The systems employed, however, presently range all the way from those in which costs are accrued only at yearend to those in which the use of cost and resources data are an intrinsic part of day-to-day financial operations of the agencies. A qualitative appraisal of the adequacy of the systems of the operating agencies has not been completed by the central agencies. For example, while the agencies reported that the development of over 100 separate accrual accounting systems was completed, only 39 of these systems have been approved thus far as adequate and in conformity with the accounting principles, standards, and related requirements prescribed by the Comptroller General, and some of these systems may have to be reexamined for conformity with legislation enacted by the Congress subsequent to the date they were approved. The Comptroller General issued instructions to all agencies early in 1959 regarding the approval of agency accounting systems which should accelerate the qualitative appraisal of these systems. Many agencies are actively engaged in developing the material necessary for the submission of requests for such approval. Review and appraisal of all elements of the agencies' total financial management systems are matters receiving continuous attention by the central agencies under the joint financial management improvement program. Emphasis is placed on stimulating effective management use of cost information in all aspects of agency operations, and particularly in connection with the total budget processes of the agencies. Some idea of the scope of the improvements may be obtained from the following selected examples. AGENCY FINANCIAL MANAGEMENT ORGANIZATIONS Pursuant to sections 401 and 402 of title IV of the National Security Act Amendments of 1949 (Public Law 216, 81st Cong.), the Department of Defense and each military department, at departmental, command, and installation levels, established comptroller organizations responsible for budget, accounting, and related activities. Comptroller organizations were also established in the Atomic Energy Commission, General Services Administration, Maritime Administration, Post Office Department, Veterans' Administration, Treasury's Bureau of Engraving and Printing, U.S. Coast Guard, and many other agencies. In some other instances, although comptrollers were not officially designated by the agencies, improvements were made in the existing administrative organization structure to bring accounting, budgeting, financial reporting, and related functions closer together. A result of the better organizations and improved methods and procedures of the agencies is shown by the findings of the House Subcommittee on Manpower Utilization of the Committee on Post Office and Civil Service as contained in its report of August 7, 1958, entitled "Study of Manpower Utilization in Financial Management Functions in the Federal Government" (H. Rept. 2512, 85th Cong.). This report disclosed that during the period 1950-57, or since enactment of the Budget and Accounting Procedures Act of 1950, departments and agencies, exclusive of the Department of Defense, were able to achieve a reduction of 15.4 percent in personnel performing financial management functions. PROPERTY ACCOUNTING Most of the agencies have made substantial improvements in their systems and procedures of accounting for both real and personal property. The military departments of the Department of Defense developed or expanded financial property accounting systems for their worldwide inventories under which supply transactions are expressed in terms of dollars as well as items. The General Services Administration and the General Accounting Office have cooperated with many of the civilian agencies in making surveys of their property activities and operations and installing systems designed to provide better accounting and control for property and supply management. An indication of developments in this area is the fact that in 1953 it was possible to report financial property accounting in 11 agencies covering approximately $8.5 billion of net fixed assets and $3.25 billion of inventories, and by June 30, 1955, to report that agencies had established financial property accounting as an integral part of their general accounting systems covering gross fixed assets of $66.4 billion and inventories of $31.4 billion. The 1955 amounts do not include inventories and other properties in the Army and Air Force for which monetary property accounting systems were, at that date, in process of development and integration with the financial accounting systems of those services. In its report on Federal real and personal property as of June 30, 1959, which valued real property at $71.7 billion and personal property (inventories, equipment, cash, and other items) at $192.8 billion, the House Committee on Government Operations stated: One needs only to compare the previous inventory reports to visualize the tremendous progress which has been made in the improved accounting methods and recordkeeping of the gigantic amounts of real and personal property owned or controlled by the Federal Government. Up-to-date accounting systems have furthered the efforts of Government departments and agencies to bring inventories under accounting control. * * * Not all of the property figures included in the June 30, 1959, inventory report are supported in the agency financial property accounting systems-some areas of estimates still remain as noted in the report and further improvements or refinements can still be made in existing systems to make them more comprehensive and effective. Agencies are continuing to improve and broaden the scope and coverage of financial property accounting as indicated by the concentrated efforts presently being made by the Post Office Department and the Department of State in this area. INVENTORY OF U.S. GOVERNMENT PROPERTY In March 1955 the General Services Administration submitted to the Senate Committee on Appropriations, pursuant to its request, the first inventory of real property owned by the Federal Government in the United States, a summary of which was issued as Senate Document 32, 84th Congress. The data, as of December 31, 1953, covered all land, buildings, and other structures and facilities within the continental limits of the United States, title to which is vested in the United States or in wholly owned Government corporations. Following this report, the General Services Administration prepared a second inventory report, as of June 30, 1955, issued February 14, 1956, as Senate Document No. 100. At the request of the Senate Committee on Appropriations, the first inventory of real property owned by the Federal Government outside continental United States was prepared by General Services Administration and issued as Senate Document No. 109, dated March 27, 1956. Subsequent annual reports for 1956, 1957, 1958, and 1959 have also been issued. The report of June 30, 1959, shows that the Federal Government owns 771.7 million acres of real property throughout the world with an acquisition cost of $49.2 billion, which is an increase of $3.6 billion over the preceding year. This is exclusive of the cost or value of public domain acreage, including mineral resources, and construction in progress, which were included in the House committee report referred to above. The first inventory of real property leased by the U.S. Government throughout the world was also prepared by the General Services Administration, pursuant to a request of the Senate Committee on Appropriations, and a summary report was published as Senate Document 41, dated May 20, 1957. The latest report, as of June 30, 1959, released by the General Services Administration on April 25, 1960, shows that the U.S. Government leases real property throughout the world and pays $160 million a year for 1.6 million acres of land and 105 million square feet of building space, an increase of $9.8 million over last year's rental. The detailed real property inventory listings, arranged geographically and by holding agency, are used by many agencies as a screening device to locate potential sites or buildings for future needs. This serves to reduce the number of new acquisitions which might occur if such information was not readily available. In addition, the inventory is helpful in the disposition of surplus realty, thus increasing revenues to the Government, as well as decreasng maintenance and other expense. Added advantages accrue to States and local governments by returning such property to their tax rolls. The inventories also assist in the justification of realty budgets by individual agencies, and are valuable in the evaluation of such budgetary requests by the Bureau of the Budget and the Congress. Copies of the detailed inventory tabulations (by agency and by geographical location) are submitted annually by General Services Administration to the Senate, and House Committees on Appropriations and Government Operations. During fiscal year 1959 accounting and accountability of furniture and furnishings were transferred from the General Services Administration and the Post Office Department, to the using agencies. General Services Administration will continue to exercise other management controls over the property for which it has responsibility as provided by law. In accordance with this arrangement, each agency budgeted for its own furniture requirements at all locations for the fiscal year 1960 and will continue to do so in future fiscal years. The General Services Administration has also issued on November 10, 1959, the first comprehensive inventory on jurisdictional status of Federal areas within the States. This report covers property in which the Government has Federal jurisdiction and directly complements the inventory report on real property owned by the United States throughout the world mentioned above. The report shows, by State and by Federal agency, the type of jurisdiction the Federal Government has over 408.5 million acres of Federal land in the 48 States as of June 30, 1957. ACCOUNTING FOR ASSETS AND LIABILITIES The progress being made by the agencies in their accounting for assets and liabilities is shown in the increase in the number of agency balance sheets available. The Treasury Department requires such reports from the agencies. Agency organizational units which furnished complete balance sheets to the Treasury Department numbered 72 as of June 30, 1956; 86 as of June 30, 1957; 115 as of June 30, 1958; and 136 as of June 30, 1959. Statistics are not available as to what percent of the total Government assets and liabilities is covered in these balance sheets, and it may well be relatively small because some of the larger agencies are not yet included, but the continuing increase each year in the number of organizational units which are able to produce this data from accounting records maintained on an accrual basis is encouraging. ACCOUNTING FOR COSTS Greater use is being made of cost information by the agencies, particularly in activities of an industrial type and in those activities involving reimbursements for services rendered. A few examples cited by the agencies in the annual reports of the joint program have been selected to illustrate the use of cost data. The Department of the Army developed an industrial-type system of general accounting and cost accounting, with its related fund control techniques, and reported a reduction in operating costs of $1,015,700 at one arsenal in 1955 and, through management techniques applied by the Army Depot Maintenance Division, budget requirements were reduced twice in fiscal year 1956 and, through analysis of cost data, a further reduction was recommended for fiscal year 1957. The Department of the Air Force developed a system for depot maintenance (repair and overhaul of Air Force equipment) with provision for production control, work measurement, and standard cost accounting, and operating results under this system at one air material area, to 1955, disclosed a 10-percent increase in production per man-hour for maintenance since its installation. The Department of the Navy developed |