APPENDIX D

CHARTER OF THE COMPTROLLER OF THE NAVY

I. Authority for Comptroller

Public Law 216, approved 10 August 1949, amended the National Security Act of 1947 and among other things established in the Department of Defense and in each Military Department, a Comptroller, and vested in the said Comptrollers authority and responsibility for certain functions, subject to the authority of their respective Secretaries. The pertinent provisions of the statute are quoted below:

"Comptroller of Department of Defense

"SEC. 401. (a) There is hereby established in the Department of Defense the Comptroller of the Department of Defense, who shall be one of the Assistant Secretaries of Defense.

"(b) The Comptroller shall advise and assist the Secretary of Defense in performing such budgetary and fiscal functions as may be required to carry out the powers conferred upon the Secretary of Defense by this Act, including but not limited to those specified in this subsection. Subject to the authority, direction, and control of the Secretary of Defense, the Comptroller shall— "(1) supervise and direct the preparation of the budget estimates of the Department of Defense; and

"(2) establish, and supervise the execution of—

"(A) principles, policies, and procedures to be followed in connection with organizational and administrative matters relating to—

"(i) the preparation and execution of the budgets,

"(ii) fiscal, cost, operating, and capital property accounting,

"(iii) progress and statistical reporting,

"(iv) internal audit, and

"(B) policies and procedures relating to the expenditure and collection of funds administered by the Department of Defense; and

"(3) establish uniform terminologies, classifications, and procedures in all such matters.

"Military Department Budget and Fiscal Organization-Departmental Comptrollers

"SEC. 402. (a) The Secretary of each military department, subject to the authority, direction, and control of the Secretary of Defense, shall cause budgeting, accounting, progress and statistical reporting, internal audit and administrative organization structure and managerial procedures relating thereto in the department of which he is the head to be organized and conducted in a manner consistent with operations of the Office of the Comptroller of the Department of Defense.

"(b) There is hereby established in each of the three military departments a Comptroller of the Army, a Comptroller of the Navy, or a Comptroller of the Air Force, as appropriate in the department concerned. There shall, in each military department, also be a Deputy Comptroller. Subject to the authority of the respective departmental Secretaries, the comptroller of the military departments shall be responsible for all budgeting, accounting, progress and statistical reporting, and internal audit in their respective departments and for the administrative organization structure and managerial procedures relating thereto. . ."

II. Duties and Responsibilities of the Comptroller of the Navy

The mission of the Comptroller, under the authority of the Secretary of the Navy, is to formulate principles and policies and to prescribe procedures in the areas of budget, fiscal, accounting, audit, progress and statistical reporting throughout the Department of the Navy to the end that their use will result in meeting the operating and planning requirements of management with efficiency and economy. In general, the Comptroller will function in a staff capacity, except in specific cases

when operations are required in the discharge of his statutory responsibilities, or by specific directive of higher authority. Examples of these exceptions are: The conduct of audits, the provision of financial assistance to defense contractors, and the performance of central accounting operations.

The Comptroller is directly responsible for budgeting, accounting, progress and statistical reporting, internal audit, providing financial assistance to defense contractors, and for the administrative organization structure and managerial procedures relating to such responsibilities within the Department of the Navy. In discharging these duties, he will be responsible for:

(a) Budget Preparation. This responsibility extends to the technique and authority essential to the translation of plans and programs of the Chief of Naval Operations into a formal budget for presentation to the Secretary of Defense, the Bureau of the Budget, and the Congress. The duties and responsibilities of the Comptroller in no way diminish the military authority of the Chief of Naval Operations through the military chain of command over operating forces and their essential support, including personnel distribution, military organization methods, and general military procedure. The Comptroller's organization shall assist the Chief of Naval Operations in the performance of such duties and the satisfaction of such responsibilities as the latter may have in connection with preparation and presentation of the budget.

(b) Budget administration, including a continuing review of the execution of approved budget plans and programs, the allocation and apportionment of appropriations.

(c) Basic fiscal policy, including the development of systems of accounting and financial reporting.

(d) Determinations with respect to, and the administration of, the guaranteed loan program, advance and progress payments, and other credits relative to procurement

contracts.

(e) Accounting principles, policies and procedures relating to the value of all property whether of an operating or a capital nature. Nothing herein shall be construed as divesting the Chief of Naval Operations and the Bureaus and Offices of the Navy Department* of their authority and responsibility with respect to inventory control, the determination of stock levels and distribution, and the physical items of property embraced therein.

(f) The development of audit principles, policies and procedures and the implementation, as required, of systems of internal audit and contract audit. Advice to procurement authorities on auditing aspects of procurement contracts and accounting aspects of pricing policies and procedures.

(g) The development of policy and general systems of statistical and progress reporting with respect to fiscal and budgetary matters. The receipt and review of requests from the Department of Defense and other Government agencies for statistical data and the monitoring of completion and consolidation of these reports, when necessary.

(h) Reports control policy and the general implementation thereof with respect to matters under the cognizance of the Comptroller.

(i) Administrative organization structure and managerial procedures relating to budgeting, accounting, progress and statistical reporting, and internal auditing within the Department of the Navy.

(j) Making available to management information collaterally generated through normal functioning of the Comptroller organization.

(k) Coordination and correlation of matters under his cognizance with the Comptrollers of the Departments of Defense, Army, and Air Force and other departments and agencies of the Government.

Orders and instructions issued by the Comptroller of the Navy in execution of the duties assigned to him by law, by this Charter or by other directive from higher authority shall be considered as emanating from the Secretary of the Navy, and shall have full force and effect as such.

*Bureaus and Offices, as used in this Charter, includes Headquarters, Marine Corps.

III. Deputy Comptroller

The Deputy Comptroller will assist the Comptroller in all matters and respects as directed by the Comptroller. He will act for the Comptroller in the latter's absence. Subject to the authority of the Comptroller, he will be responsible for the internal administration within the Office of the Comptroller.

IV. Policy and Planning Council

Under the direction of the Comptroller, the Policy and Planning Council composed of such organization heads as may be designated will:

(a) Coordinate and correlate action involving two or more organizational units of the office as may be required.

(b) Recommend policies and procedures to be followed by the Comptroller in his relations with the Department of Defense and other Government agencies.

(c) Recommend policies and procedures for the internal administration of the Comptroller's Office.

(d) Coordinate and correlate policy directives and procedural instructions promulgated by the Comptroller for publication in a permanent handbook or manual.

V. Assistant Comptroller, Director of Budget and Reports

The Assistant Comptroller, Director of Budget and Reports will:

(a) Be responsible for the organization and administration of matters relating to budget, reports and statistics.

(b) Coordinate with, and obtain the concurrence of, the Chief of Naval Operations in the development of budget plans and programs, and their presentation to higher authority. (c) Establish, develop and supervise the execution of general principles, policies and procedures governing the preparation and administration of the Navy budget.

(d) Supervise and direct the preparation, analysis, and coordination and review of the budget estimates of the Department of the Navy and the presentation of the budget to the Bureau of the Budget and to the Congress.

(e) With Counsel assigned to duty with the Comptroller, develop appropriation language and review legislation having budgetary significance.

(f) Establish uniform terminologies, classifications and procedures in budget matters. (g) Supervise the preparation and submission of reports to the Secretary of Defense, Bureau of the Budget and the Treasury Department, covering the apportionment and the status of appropriations.

(h) Process the allocation and apportionment of appropriated funds to Bureaus and Offices of the Navy Department.

(i) Continuously review rates of obligation and expenditure of appropriated funds and develop budget control as an effective instrument of management.

(j) Plan and prepare statistical analyses to provide budgetary and fiscal information required for management control and determination of broad administrative policy.

(k) Receive and review requests from outside agencies for statistical data. Answer requests from published data when available; or channel requests to the proper Bureau, Board or Office, monitor the completion of these assignments and consolidate reports when necessary.

(1) Maintain liaison with statistical offices of the Department of Defense and other Government agencies and represent the Navy on committees and in conferences dealing with statistical policies and methodology.

(m) Apply standards of budgetary control based upon cost accounting, fiscal accounting, work measurement, and other management reporting systems as appropriate.

(n) Determine the budget and fiscal reports and forms control policy for the Department of the Navy. Review reporting methods, procedures and requirements for budgetary and fiscal statistical reports, and insure that full coordination precedes the establishment of new reports.

(0) Coordinate the development of standards of presentation, classification, and definition of data contained in progress and statistical reports in the budgetary field.

VI. Assistant Comptroller, Accounting, Audit and Finance The Assistant Comptroller, Accounting, Audit and Finance will:

(a) Be responsible for the organization and administration of matters relating to accounting, audit and finance.

(b) Develop and supervise the execution of principles, policies and procedures to be followed in fiscal, cost, operating and capital property accounting and working capital and management fund operations throughout the Department of the Navy.

(c) Prescribe the type and content of financial records and of fiscal, cost, operating and capital property accounting records maintained by the Bureaus and Offices of the Navy Department.

(d) Develop uniform terminologies, classifications, and procedures in the areas covered in paragraphs (b) and (c) above.

(e) Develop and supervise the execution of policies and procedures relating to the obligation, expenditure and collection of funds administered by the Department of the Navy.

(f) Develop and prepare for publication recurring summary reports of a fiscal, cost, operating and capital property accounting nature and compile special reports on these matters as required.

(g) Coordinate and arrange for financing interdepartmental and intradepartmental programs; the administration of advance payments, guaranteed loans and progress pay

ments.

(h) Coordinate and correlate all of the foregoing responsibilities with the Comptroller of the Department of Defense and with other Goverment agencies.

(i) Develop audit principles, policies and procedures and exercise technical supervision of audit operations in and throughout the Department of the Navy.

Make

(j) Perform audits, as required, or current, completed, and terminated contracts of the fixed-price type, the cost-plus-fixed-fee type, time and material type, etc. reviews and audits, as required, which relate to unit costs, total costs, price determinations, renegotiations, fraud and investigations, system surveys, partial payments, and of Government-furnished property placed in the custody of private industry for Navy purposes under all types of procurement contracts or other forms of agreement. (Ordinarily audits and accounting reviews relating to fixed price contracts will be made on the request of procurement authorities, notwithstanding the Comptroller's inherent authority so to do at his election.)

(k) Perform audits and examinations, as required, of systems, procedures, records and documents pertaining to the obligation and expenditure of appropriated funds, property accounting, sales and reimbursements and of non-appropriated funds.

(1) Coordinate with the Naval Inspector General, to the fullest extent feasible, audits and examinations of field activities.

(m) Coordinate Navy audit programs, as required, with the Comptroller of the Department of Defense, the General Accounting Office and other Goverment agencies.

Approved, effective 20 August 1952.

DAN A. KIMBALL,
Secretary of the Navy.