Prohibitions No officer or employee of the United States shall 1. Make or authorize an expenditure from or create or authorize an obligation under any appropriation or fund in excess of the amount available therein. 2. Involve the Government in any contract or obligation, for the payment of money for any purpose, in advance of appropriations made for such purpose, unless such contract or obligation is authorized by law. 3. Accept voluntary service for the United States or employ personal service in excess of that authorized by law, except in cases of emergency involving the safety of human life or the protection of property. 4. Authorize or create any obligation or make any expenditure in excess of an apportionment or reapportionment or in excess of the amount permitted by agency regulations prescribed and approved pursuant to the act. Penalties and reports of violations 1. In addition to any penalty or liability under other law, any officer or employee of the United States who shall violate any of the prohibitive provisions of the act set out above shall be subjected to appropriate administrative discipline, including, when circumstances warrant, suspension from duty without pay or removal from office and if the violation was knowingly and willfully committed such officer or employee, upon conviction, shall be fined not more than $5,000 or imprisoned for not more than 2 years or both. 2. In the case of a violation of any of the prohibitive provisions of the act by an officer or employee of an agency or of the District of Columbia, the head of the agency concerned or the Commissioners of the District of Columbia, shall immediately report to the President, through the Director of the Bureau of the Budget, and to the Congress all pertinent facts together with a statement of the action taken thereon. ADMINISTRATION Instructions relating to apportionments, reapportionments, establishment of reserves, administrative control of funds and reporting of violations of the Antideficiency Act are provided by Bureau of the Budget Circular No. A-34. As part of its total budget and management responsibility, the Bureau of the Budget employs the apportionment system to control the use of funds throughout the executive branch in accordance with the provisions of the Antideficiency Act. Over the years, this system has been firmly established as an integral part of the budget process. In administering the budget approved by the Congress through the appropriation process, the apportionment system is used to establish the manner in which enacted appropriations are to be applied by the executive agencies in the conduct of operations during the course of the fiscal year. Subsequent agency activity in the use of appropriations is reviewed at least quarterly during the year through a system of financial reports designed to determine the status of funds in rela tion to the established apportionment limits. Through these procedures the Bureau of the Budget, acting for the President, exercises broad administrative fund control for the executive branch. In carrying out their assigned functions, executive agencies delegate authority for the obligation and expenditure of funds to agency officials with management responsibility. To insure against overobligation or overexpenditure of funds, the agencies establish administrative control of funds systems, with the approval of the Director of the Bureau of the Budget, which provide for the administrative subdivision of apportionments. Such administrative subdivisions, recorded in the official accounts, in turn establish limits on the amounts that may be used by individual agency operating officials. As part of the financial management process, agency financial reports have been established to furnish-generally on a monthly basis-information on the status of such allotments. These data provide the basis for management review and necessary adjustment action. This combined apportionment and allotment structure thus provides the framework within which the executive branch exercises appropriation and fund control. Agency reports of violations of the Antideficiency Act are reviewed by the Bureau of the Budget before transmittal to the President. Evidence of any weakness or deficiency in the agency administrative control of fund system disclosed by the violation report is brought to the attention of the agency for corrective action. AMENDMENTS TO LEGISLATIVE REORGANIZATION ACT, 80TH-83D CONGRESSES The Subcommittee on Reorganization of the Committee on Government Operations compiled a summary, by title, of the amendments to the Legislative Reorganization Act adopted since its approval on August 2, 1946 (S. Doc. 11, 82d Cong.). In the 83d Congress, the subcommittee compiled a report covering the original act and all amendments thereto since its approval in 1946. That report also set forth specific citations indicating how and when such amendments were effected. (S. Doc. 71, 83d Cong.) OTHER FISCAL STUDIES AND REPORTS OF THE COMMITTEE ON The Committee on Government Operations issued a number of other reports relating to fiscal and other functions of the legislative branch. In the 82d Congress, Senate Document No. 51, dated July 10, 1951, entitled "Some Problems of Committee Jurisdiction," was issued by the committee. This report contains a collection of statements on the jurisdiction of the standing committees of Congress in selected subject-matter fields, one of which is fiscal affairs. In a statement on congressional fiscal machinery, Dr. George B. Galloway, senior specialist, American Government, Library of Congress, pointed out that one of the more troublesome problems relating to committee jurisdiction was inadequate congressional machinery to handle its fiscal affairs. Dr. Galloway stated that the fiscal machinery of Congress suffers from lack of integration and that— In short, the fiscal machinery of Congress is fragmented and dispersive. The tax committees tend to be tax minded; the spending committees are tempted to be expenditure minded. The Joint Committee on the Budget provided for by section 138 of the Legislative Reorganization Act of 1946 might have been budget minded, but for various reasons it has failed to function as planned and is no longer active. Under these circumstances, it is evident that the existing fiscal machinery of Congress is not now such as to give that body an overall coordinated view of Federal fiscal policy. Several other reports dealt with audit functions performed by the Comptroller General, as follows: (1) "Audits of Government Corporations," December 20, 1950 (S. Rept. 2685, 81st Cong.); (2) "Audit Reports of Government Corporations and Agencies," January 20, 1954 (S. Rept. 861, 83d Cong.); and (3) "Review of Audit Reports of the Comptroller General," February 23, 1956 (S. Rept. 1572, 84th Cong.). These reports covered the authority of the Comptroller General to perform audits of Federal departments and agencies, including Government corporations, and an analysis, by the committee staff, of audit reports submitted to the Congress by the Comptroller General under such authority. PART III. RECOMMENDATIONS OF THE HOOVER COM MISSION ON BUDGETING AND ACCOUNTING The first Commission on Organization of the Executive Branch of the Government was created by Public Law 162, 80th Congress, approved July 7, 1947. It expired on June 12, 1949. The second Commission on Organization of the Executive Branch of the Government was created pursuant to Public Law 108, 83d Congress, approved July 10, 1953, and expired in September 1955. There were 12 members of each Commission with 4 each being appointed by the President of the United States, the President pro tempore of the Senate, and the Speaker of the House of Representatives. Former President Herbert Hoover was selected by the members to serve as Chairman of both Commissions. Senator John L. McClellan, chairman of the Senate Committee on Government Operations, was a member of both Commissions. Senator George D. Aiken, chairman of the same committee during the 80th Congress, also served on the first Hoover Commission. The first Commission concerned itself chiefly with the structural reorganization of Government departments, agencies, and bureaus, and with their relations with each other. It devoted its energies primarily to determining "how" or "where" functions could be performed more efficiently and economically within the existing governmental framework. The second Commission, however, dealt far more extensively with policy questions relating to Government operations than with matters of administrative organization. It devoted its energies to determining whether some existing Government functions should be performed at all, and made many far-reaching recommendations concerning Government activities in a number of fields. The budget and accounting recommendations of the first Commission were submitted to Congress in February 1949 (H. Doc. 84, 81st Cong.) and those of the second Commission in June 1955 (H. Doc. 192, 84th Cong.). There follows a summary, and discussion of these major recommendations including implementing legislation enacted by the Congress. SUMMARY FIRST COMMISSION The first Hoover Commission report on budgeting and accounting contained 13 recommendations on budgeting, improvements in the operation of the Bureau of the Budget, and reorganization of accounting procedures and methods. To improve the Government's budget process, the Commission recommended the use of performance budgets (which emphasize work to be done rather than objects purchased), a survey of the appropriation structure to correct diversity of appropriations, separation of current expenditures from capital outlays in agency budget estimates, and clarification of authority to the President to spend less than amounts appropriated if congressional purposes are carried out. With respect to the Bureau of the Budget, the Commission recommended closer teamwork on budget review between the Estimates, Administrative Management and Fiscal Divisions and with the Department of the Treasury and other offices. The Commission also recommended that the Bureau of the Budget emphasize development of standards for performance budgets, management research functions, and that the President, through the Bureau, supervise both publication and statistical activities. In reorganizing accounting, the Commission recommended establishment of a new Accountant General in the Treasury Department to prescribe administrative accounts subject to approval of the Comptroller General, and to prepare summaries of agency accounts and financial reports. The Commission further recommended that Congress contínue its study of fidelity insurance bonds; that instead of shipping millions of vouchers to Washington, the Comptroller General should make spot checks in the field. The Commission also gave general approval to its task force recommendations of accrual accounting, simplification or elimination of the warrant system, and changes to reduce staff and governmental red tape. Senator John L. McClellan and Representative Carter Manasco, members of the Commission, disagreed with the majority on the establishment of an Accountant General under the Secretary of the Treasury and submitted proposals of their own to strengthen rather than weaken the Comptroller General's powers to prescribe administrative accounts. This authority was given to the Comptroller General under the Budget and Accounting Act of 1921. The Commission endorsed the approach of the joint accounting improvement program conducted by the Bureau of the Budget, the Treasury Department, and the General Accounting Office, and recommended that no action should be taken to disrupt this program. The details are set forth in the preceding section of this report. Further views were submitted on the recommendations for the creation of an Accountant General by James H. Rowe, Jr., James K. Pollock, and Dean Acheson, also members of the Commission. In addition to the 13 recommendations on budget and accounting, the Commission's report contained 5 recommendations for strengthening statistical services in the Bureau of the Budget. SECOND COMMISSION The second Hoover Commission report on budgeting and accounting was submitted to Congress in June 1955. It contained 25 recommendations for budgeting, accounting and auditing practices, financial and performance reports, financial organization, and related matters. The report proposed expansion of the Bureau of the Budget and the creation of an Office of Accounting in order to enable the more effective discharge of the Bureau's managerial, budget, and accounting functions, on the premise that the strengthening of the Bureau of the |