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tion of financial responsibility of all contractors with GSA; (7) the expenditure and collection of funds administered by GSA; (8) the conduct of internal audit and audit of GSA contractors' operations; (9) maintenance of a worldwide inventory of real property owned by and leased to the Federal Government; and (10) providing assistance to executive agencies in the development of property accounting systems in cooperation with the General Accounting Office. The policies, responsibilities, and authorities of each organizational component of the Office of the Comptroller are set forth in GSA's Policy Manual and Administrative Manual.

Considerable progress has been made in developing an effective financial management system in the past 10 years. The cooperation and assistance of the Bureau of the Budget, General Accounting Office and Treasury Department under the joint financial management improvement program facilitated the achievement of these improvements.

Declaration of policy

PROVISIONS OF THE ACT

The act (section 2) established the following basic policy to guide GSA and other Federal agencies in acquisition, management, and disposal of Government property and records:

It is the intent of the Congress in enacting this legislation to provide for the Government an economical and efficient system for (a) the procurement and supply of personal property and nonpersonal services, including related functions such as contracting, inspection, storage, issue, specifications, property identification and classification, transportation and traffic management, establishment of pools or systems for transportation of Government personnel and property by motor vehicle within specific areas, management of public utility services, repairing and converting, establishment of inventory levels, establishment of forms and procedures, and representation before Federal and State regulatory bodies; (b) the utilization of available property; (c) the disposal of surplus property; and (d) records management.

Transfer of functions, personnel, records, property, and funds Summary of sections 103 through 107.-The act also transferred to GSA the functions, personnel, and records of three independent agencies the National Archives, Federal Works Agency, and War Assets Administration and the Bureau of Federal Supply in the Treasury Department. Included in the transfer of the Bureau of Federal Supply were the functions of the Director of Contract Settlement and functions performed by the Bureau under delegation of authority from the Secretary of the Treasury in connection with stockpiling under the Strategic and Critical Materials Stock Piling Act (58 Stat. 811, as amended).

General supply fund authorized

Provisions of section 109.-The existing general supply fund was reconstituted for use by or under the direction of the Administrator. The general purposes for which the fund could be used were continued

except for those elements of cost which are determined to be indirect or overhead costs.

In eliminating the indirect and overhead costs, Public Law 152, as amended by Public Law 754, 81st Congress, took cognizance of the recommendations of the Commission on Organization of the executive branch of the Government that the surcharge on the price of commodities purchased centrally be eliminated and that such costs be paid through direct appropriations.

Reimbursement procedures were simplified by giving increased scope to the advance payment method of financing purchases from the fund, and by substantially reducing certain cumbersome and costly alternative procedures. The revised reimbursement procedures gave effect, to the fullest extent practicable, to sound accrual accounting principles so that the books of the purchasing agencies would more accurately reflect the value of supplies and services actually received, and thus further the program to improve accounting throughout the Government.

Losses incurred in prior years, as well as all assets and liabilities, are permitted to be considered in ascertaining the amount of surplus which must be covered into the Treasury as miscellaneous receipts. There is also a requirement for annual audit by the Comptroller General and a report to Congress on the results thereof. Such reports and his recommendations as to the status and operations of the fund should be helpful to the Congress in its consideration of supply activities.

Public Law 82-522 increased the ceiling on the authorized capital of the General Supply Fund from $75 to $150 million.

Results of operation.-Adequate financing of these activities through the revolving fund has promoted consolidated procurement of common use items by a staff of professional procurement officers in a central agency. This has minimized the procurement of these items by individual agencies where the volume of purchases did not warrant employment of procurement specialists.

Public Law 152, as amended, has led to a more effective Federal supply system through greater utilization of existing Government supply inventories and expansion of the consolidated procurement operations carried on by the General Services Administration through the general supply fund.

There has been a steady upward trend in sales, inventories, and workload. Fiscal year 1959 produced sales of regular stores items amounting to $145.5 million and direct delivery sales of $124.3 million as compared with $26.0 million and $51.1 million, respectively for these items in 1950. The cost of inventories for sale at June 30, 1959, totaled $52.9 million as compared with $7.2 million in 1950.

The accounting system for the fund which also includes motor pool activities, as provided for in section 211, is maintained on the accrual basis. Reports and financial statements covering operations under the fund are submitted to the Congress annually.

An integrated electronic data processing system is being designed for the Federal Supply Service Stores Depot operations. This new system will replace the present manual and electromechanical methods and, when completed, will combine all customer order filling, inventory management, and related accounting operations into one automatic system through the use of an electronic computer.

Reimbursements by requisitioning agencies for credit to the fund have been expedited through adoption by the agencies of the payment procedures prescribed by the Comptroller General which provide for payment based on "constructive evidence of receipt." Thus, agencies may pay these bills promptly without evidence of actual receipt but where there is evidence of shipment to the agency.

Property utilization

Provisions of section 202.-The act imposes upon each executive agency the responsibility, in the first instance, (1) to maintain adequate inventory controls and accountability systems for its property; (2) to survey its property continuously to determine which is excess to its needs and promptly report excess property to the Administrator; (3) to care for such excess property; and (4) to transfer or dispose of such property in accordance with authority delegated and regulations prescribed by the Administrator.

Results of operations.-Provision for, or a determination of, the adequacy and reliability of the property records of executive agencies for property utilization purposes has been encompassed by the developmental and survey programs carried out jointly by GSA and GAO under the provisions of sections 205 and 206 of Public Law 152.

The need for improved inventory controls and accountability systems in the executive agencies has received continuous attention since the joint accounting improvement program was initiated. These efforts were intensified and accelerated through the joint GSA-GAO survey and on-site assistance program conducted within the framework of the joint program. Significant developments in property accounting are reported each year in the annual progress reports under the joint program.

Policies, regulations, and delegations

Provisions of section 205.—The act provides that the Comptroller General, after considering the needs and requirements of the executive agencies, shall prescribe principles and standards of accounting for property, cooperate with the Administrator of General Services and with the executive agencies in the development of property accounting systems, and approve such systems when deemed to be adequate and in conformity with prescribed principles and standards. The act requires (1) examination by the General Accounting Office of established property accounting systems to determine the extent of compliance with prescribed principles and standards and approved systems, and (2) reports by the Comptroller General to the Congress of failure to comply with such principles and standards or to adequately account for property.

Results of operations.-The working relationship agreed upon by the Comptroller General and the Administrator, GSA, under the Federal Property and Administrative Services Act of 1949 was set forth in memorandum to heads of departments and independent establishments on January 17, 1950. This agreement provides a pattern of cooperation under the joint accounting improvement program for a more effective and harmonious discharge of the interrelated responsibilities of the two agencies under Public Law 152. Within the framework of this working arrangement GSA and GAO have cooperated in (1) development of property accounting policies.

principles, and standards for guidance of executive agencies, (2) development, modification, and installation of integrated property accounting systems, and (3) development of procedures, regulations and other issuances (a) for simplifying the financial aspects of procurement, and (b) providing for more effective control and utilization of available property and the disposition of surplus property.

Government-wide issuances published as a result of these joint efforts include, for example: (1) Section 1270 and chapter 7000 of the GAO Policy and Procedures Manual on property accounting; (2) Federal procurement regulation, section 1-3.604, Treasury Department Circular Nos. 1030 and 969, and GAO Manual 7, GAO 2700 and 5120 which prescribe policies and procedures relating to the use of imprest funds; and (3) GSA circulars to heads of Federal agencies covering simplified methods for making small purchases and the budgeting for and control of office furniture and fixtures by tenant agencies.

Surveys, standardization and cataloging

Provisions of section 206.—The act authorizes the Administrator, after adequate advance notice to the executive agencies affected and with due regard to the requirements of the Department of Defense as determined by the Secretary thereof, to survey Government property and property management practices, and obtain reports thereon from executive agencies. GAO audits of property accounts are also required by the act.

Results of operations.-Joint GSA-GAO surveys: Subsection 206(a) of Public Law 152 and the above-mentioned GSA-GAO Memorandandum of Working Relationships provides a basis for a program of joint surveys of executive agencies.

Joint GSA-GAO surveys of property accounting systems of executive agencies were initiated in 1951. Sixty-six agency property accounting systems have been studied, evaluated, and improvement recommendations made. Many of these recommendations have resulted in (a) better control over and management of Federal property, (b) elimination of unnecessary or excessive work in the pricing of individual stores issues for distribution to numerous allotment accounts, (c) the discontinuance of property records for many low-cost items, and (d) the elimination of many thousands of individual property records through conversion to composite, or group records for furniture and fixtures.

The basic objective of this joint effort is to assist and encourage executive agencies in the development of effective, simplified monetary property records, accounts, and procedures which will facilitate efficient agency and Government-wide management and utilization of available property and the disposition of property surplus to the needs of the Government.

A Government-wide real property inventory program was initiated at the request of the Senate Committee on Appropriations in Senate Report No. 237, dated May 12, 1953. Prior to the completion of the first inventory in April 1955, there was no central source of information on the real property holdings of the Federal Government. The inventory now includes all real property owned by and leased to the Federal Government throughout the world as of the end of each fiscal

year. Recently the program was expanded to include information on the legislative jurisdiction of Federal properties within the States, and the first such report was issued in December 1959. The historical background of the real property inventory program and a summary of the benefits accruing to the Government through ready availability of such data are contained in part V: Improvements in Budgeting and Accounting, Government-wide, 1948-60 under the section entitled "Inventory of U.S. Government Property."

Buildings management fund authorized

Provisions of subsection 210(f).—This subsection providing for the establishment of a buildings management fund to be operated on a revolving fund basis was added by subsection (1) of section 1 of Public Law 82-522 as amended by Public Law 85-886.

This fund was established for the purpose of paying expenses of building management operations and related services by GSA without fiscal year limitation. The fund is credited with related advances and reimbursements as specified, including reimbursements and recoveries resulting from its operation. Any net income of the fund after providing for prior year losses is deposited annually in the Treasury of the United States as miscellaneous receipts.

Accounting for the fund is required to be maintained on the accrual basis and financial reports prepared on such basis. The amount of funds to be appropriated for use in the fund is limited to $10 million. The amendment of September 2, 1958 (Public Law 85-886) permits the deposit of rental moneys derived from leasing the LaFayette Building, Washington, D.C., into the fund as well as the rentals received under leases executed pursuant to paragraph 13 of section 210(a) for expenses necessary for buildings management operations and related services including demolition and improvements.

Results of operations.-The availability of a revolving fund to finance building management operations without fiscal year limitation has permitted flexibility in planning and the rendering of service on a sound businesslike basis. Financing these operations through a revolving fund rather than annual appropriations has (a) simplified and improved the budgeting, accounting, and reporting processes, (b) facilitated the establishment of standard service rates for billing customer agencies, (c) resulted in better procurement and inventory management practices in connection with buildings management supplies and equipment, (d) permitted prompt payment of vendors' invoices, and (e) facilitated the review of budget estimates by the Bureau of the Budget and the Congress.

Since initiation of operations under this fund on January 1, 1953, there has been a substantial reduction in the number of allotment and ledger accounts previously maintained and more accurate cost reporting has been realized. It also made possible the decentralization of the maintenance of cost control at the level where such responsibility can best be exercised.

Interagency motor pools

Provisions of section 211.-Public Law 83-766 amended section 211 and provided for the establishment of motor pools and systems to serve Federal agencies, mixed ownership corporations, or the District of Columbia, upon its request.

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