McClellan, was drafted by the General Services Administration at the request of the committee, to repeal laws which had become obsolete or inoperative, or were in conflict with legislation relating to the acquisition and disposition of public property. Public Law 82-247 ́repealed, modified, amended, or changed sections or parts of laws, some of which had been on the statute books since 1882. The Committee on Government Operations also reported S. 1967 in the 82d Congress (S. Rept. 786) to repeal or amend laws which were superseded by the Federal Property and Administrative Services Act of 1949, as amended by Public Law 81-754. S. 1967 passed the Senate and House of Representatives and was approved by the President, on October 25, 1951, as Public Law 82-209. This act, and Public Law 82-247, outlined above, resulted in the repeal or amendment of 234 specific provisions of law. AMENDMENTS TO THE ACT In addition to Public Law 81-754, discussed above, during the intervening 11 years, upon recommendations of this committee, numerous amendments have been made to the Federal Property and Administrative Services Act of 1949. In 1958, the General Services Administration prepared a revised compilation of the Federal Property and Administrative Services Act of 1949, as amended to December 1, 1958, together with analytical notes. The last previous compilation had been made in 1956, since which time 12 additional amendments had been made to the act. Because the act affects the operation of practically every Government department and agency, the compilation, along with the analytical comments, was published by the Senate Committee on Government Operations as a committee print in the second session of the 85th Congress, entitled "Federal Property and Administrative Services Act of 1949, as Amended, With Analysis and Index." IMPROVEMENTS UNDER THE ACT A detailed analysis of the provisions of the act relating to budgeting and accounting and a summary of results accomplished under each provision, as submitted by General Services Administration, in response to a request of the committee on October 6, 1959, are found on pages 157-167 of this report. In addition, the General Services Administration reported on progress made in improving financial operations during the first 10 years of its operations and its future plans for improvements in this field. The General Services Administration further reported that substantial financial management improvements have been made under Public Law 81-152 and other acts throughout the agency and, as a result of constant improvements and simplification of procedures, financial sonnel has decreased from a high of 1,440 in 1952 to 1,273 as of June 30, 1959. per TITLE IV-NATIONAL SECURITY ACT AMENDMENTS OF 1949 HOOVER COMMISSION RECOMMENDATIONS Title IV of the National Security Act Amendments of 1949 was the outgrowth of recommendations of the Commission on Organization of the Executive Branch of the Government submitted to the Congress on February 28, 1949, and the report of its task force which focused attention upon the need for the improvement in the fiscal structure and the fiscal management of the National Military Establishment. The Hoover Commission's report (No. 8) on the national security organization contained six basic recommendations, designed to bring about unification and strengthen civilian control of the National Military Establishment. The recommendations covered organization, policy, budgeting, accounting, personnel (both military and civilian), and integration of national defense. The report stated that there was a serious lack of close working relationship within the National Military Establishment, and as a result of this condition, disharmony, lack of uniform planning, waste, and extravagance were prevalent throughout the organization. On the matter of budgeting and accounting the Commission recommended that complete fiscal authority be vested in the Secretary of Defense, that the entire military budget system be overhauled, that a performance budget be adopted, and that complete, accurate, and current inventories be maintained. In urging enactment of budgetary reforms before the Senate Armed Services Committee at hearings on S. 1269, on April 11, 1949, former President Herbert Hoover quoted the following section of the Commission's report: The Committee (Commission) feels that it is justified in saying that our military budget system has broken down. The budgetary and appropriation structures of the Army and Navy are antiquated. They represent an accumulation of categories arrived at on an empirical and historical basis. They do not permit ready comparisons, they impede administration, and interfere with the efficiency of the Military Establishment. Congress allocates billions without accurate knowledge as to why they are necessary and what they are being used for. LEGISLATIVE HISTORY A bill, S. 1269, was introduced in the Senate on March 16, 1949, with the objective of implementing recommendations of the President, that the National Security Act of 1947 be amended to develop further unification of the Armed Forces. After extended hearings and discussion before the Senate Armed Services Committee, it developed that some of the most important recommendations of the Hoover Commission, i.e., to vest complete fiscal authority in the Secretary of Defense, overhaul the entire military budget system, and adopt a performance budget, were not included in the bill. As a result, S. 1269 2 See app. D, p. 331, for text of the act, as amended. was redrafted and introduced as a committee bill (S. 1843), in which title IV was inserted to establish uniform budgetary and fiscal procedures and performance budgeting as recommended by the Commission. S. 1843 was favorably reported by the committee on May 12, 1949 (S. Rept. 366, 81st Cong.), and passed the Senate with minor amendments on May 26, 1949, following which it was referred to the House Committee on Armed Services. A companion bill (H.R. 5632), introduced in the House containing only title IV relating to fiscal management, was reported favorably by the House Committee on Armed Services on July 14, 1949 (H. Rept. 1064, 81st Cong.), and approved by the House of Representatives on July 18, 1949. This bill, as approved by the House, made no provision for converting the National Military Establishment into a Department of Defense, or for centralizing responsibility and authority in the Secretary. The Senate, in considering the House bill, included the provisions of S. 1843 as it originally passed the Senate. Conferees appointed by the House and Senate agreed on the Senate version, and the bill was signed by the President on August 10, 1949, as Public Law 81-216. In an effort to expedite action on Defense reorganization legislation then pending in the House, President Truman submitted Reorganization Plan No. 8 of 1949, dealing with the National Defense Establishment, to the Congress on July 18, 1949 (H. Doc. 262, 81st Cong). Since many of the provisions of this plan were already incorporated in S. 1843, the conferees inserted the following provision in the pending bill. Reorganization Plan No. 8 of 1949, which was transmitted This action was designed to relieve the Congress of the necessity of passing a resolution of disapproval of Reorganization Plan No. 8, since its objective had been effectuated by affirmative legislative action. PROVISIONS OF TITLE IV Title IV was added as a new title to the National Security Act of 1947 by Public Law 81-216. This title provided for a reorganization of fiscal management in the Department of Defense to promote efficiency and economy. It made possible an overall fiscal structure which encourages the common use of facilities by the three military services-Army, Navy, and Air Force and the application of a sound management approach in all program areas. More specifically, title IV 1. Provided for the establishment of a Comptroller for the Office of the Secretary of Defense and a Comptroller in each of the three military Departments, in order that there may be an organized effort to carry out these objectives. 3 This act required disapproval of a plan by either House of Congress within 60 days, after submission. 2. Directed that a performance-type budget be adopted by the Department of Defense with a segregation of operating and capital programs. 3. Provided for the establishment of uniform terminologies, classifications, reporting systems, accounting and internal audit projects, and common use of disbursing facilities. 4. Authorized the establishment of working-capital funds for the organization of inventories for the three military departments into stock funds, and for the operation of industrial- and commercial-type activities and integral working units. 5. Authorized the establishment of departmental management funds to facilitate the carrying out of joint and special operations. 6. Provided for reports of property on a quantitative and monetary basis. Following passage of Public Law 81-216, the then Secretary of Defense, Louis A. Johnson, stated that it not only reflects the recommendations of the [Hoover] Com- REVIEW OF TITLE IV OPERATIONS A number of reviews and analyses of implementation of title IV have been made in the past by congressional committees and others. During the 83d Congress, the Senate Preparedness Investigation Subcommittee of the Committee on Armed Services held hearings on November 2, 3, and 4, 1953, with the objective of determining how well title IV was being implemented. Following the hearings, the committee issued a report in the form of a committee print containing an analysis and findings relatives to each provision of title IV. The chairman of the Preparedness Subcommittee, in a letter dated January 15, 1954, transmitting the report to the chairman of the Armed Services Committee, indicated that, although progress had been made in the matter of fiscal, budgetary, and accounting practices in the Department of Defense since the enactment of title IV, this section of the act had not been completely implemented. Again, in 1957, the subcommittee made a second review of implementation of title IV, by having the Department of Defense and the three military departments submit individual answers to some 116 questions covering all aspects of title IV. No public report was issued by the subcommittee on this review. The investigation staff of the House Committee on Appropriations made a review of the use of stock funds in the Department of the Navy in 1958. Similar reviews of the use of stock funds in the Department of the Army and the Department of the Air Force were made in 1959. No public reports were issued by the committee on these reviews. The Senate Preparedness Investigation Subcommittee of the Committee on Armed Services also issued a report in the form of a committee print in the 86th Congress, dated May 2, 1960, covering operations of stock funds in the military departments under title IV. In addition, the subcommittee is currently conducting a review of the comptroller's organization in the Department of Defense and in the three military departments. CURRENT IMPROVEMENTS UNDER TITLE IV To determine the present status of improvements under title IV, for inclusion in this report, the Committee on Government Operations requested the Department of Defense, on October 5, 1959, to furnish a summary of the results accomplished to date under each provision of the title. The information submitted by the Department is found on pages 167-178 of this report. POST OFFICE DEPARTMENT FINANCIAL CONTROL ACT OF 1950 (PUBLIC LAW 81-712; 64 STAT. 460)* The enactment of the Post Office Department Financial Control Act of 1950 was the result of several months of study and discussion between the Senate and House Committees on Post Office and Civil Service, staff members of these committees, representatives of the Post Office Department, the Bureau of the Budget, the Treasury Department, and the General Accounting Office. The act provided a solid foundation for modernization and improvement of the financial activities of the Post Office Department without adversely affecting any of the essential controls of the Congress. It provided the framework for a constructive and cooperative development within the Post Office Department of a system of accounting, financial reporting, and auditing. At the same time it gave full recognition to the Department's special status as a revenue-producing public-service organization. The enactment of this legislation carried out, in general, the objectives of the first Hoover Commission report relative to accounting and auditing for the Post Office Department. While the recommendation of the Commission that the Post Office be incorporated under the Government Corporation Control Act of 1945 was not carried out, it did supply the needed legislation to bring about accounting reforms and to provide flexibility in management, simplification of budgeting, accounting, and auditing. TRANSFER OF ACCOUNTING FUNCTIONS TO THE POST OFFICE DEPARTMENT Prior to the passage of the Post Office Department Financial Control Act of 1950, the General Accounting Office performed the administrative accounting for the Post Office Department. The records showed the assets, liabilities, revenues, appropriations, and expenditures of the Post Office Department and the postal service. Statements of the financial condition of the Department were prepared quarterly from these records and published in the annual report of the Postmaster General. The handling of the administrative accounting and reporting of the Post Office Department by the General Accounting Office was the result of laws enacted many years ago. Public Law 81-712 was codified and enacted as part of title 39, U.S.C., by Public Law 86-682, approved Sept. 2, 1960. (See app. E.) |