UNITED STATES OF AMERICA FEB 2 '40 A Foreword IN MAKING to the second regular session of the Seventy-sixth Congress the following report of the work of the General Accounting Office for the fiscal year 1939, as required by section 312 (a) of the Budget and Accounting Act, approved June 10, 1921, 42 Stat. 25, it should be stated that my responsibility for the work of the General Accounting Office began April 11, 1939, at which time the work during more than three-quarters of the fiscal year had already been performed under the direction of the Assistant Comptroller General of the United States, as the Acting Comptroller General. A part of the report of the Acting Comptroller General for the fiscal year 1938 was devoted to a description of the procedure followed by the Office in performing the work of audit and settlement of accounts and claims, including a showing in some detail of the many questions and problems which arise in connection therewith. Since the 1938 report was not printed for distribution, that feature, with modifications, is being repeated in chapter I of this report in the thought that it may be of interest to members of the Congress and useful to others in the service of the Government. Chapter II contains a report of the volume and detail of the work accomplished by the Office during the fiscal year. In chapter III there are submitted for the consideration of the Congress recommendations for legislation believed to be desirable for reasons set forth therein. I am studying the organization of the Office and if experience and mature consideration indicate that changes therein will promote efficiency and economy they will be made. I am convinced, however, that the desired efficiency and effectiveness in the performance of its duties will be impossible of attainment until its personnel and records, now widely separated in fifteen scattered buildings, can be consolidated and adequately housed. In chapter III there is included a statement respecting this need. Chapter IV is devoted to available financial data of the Government and its departments and establishments with accompanying comments deemed to be necessary and appropriate. FRED H. BROWN, Comptroller General of the United States. Detail Statement Covering the Audit of Accounts and the Settlement of Claims THE AUDIT OF PUBLIC ACCOUNTS THE TERM "AUDIT" as defined by Webster means, "a formal or official examination and verification of accounts, vouchers, and other records." Broadly speaking, it may be said, that generally the purposes for which accounts and records are audited are as follows: (a) General verification of accounts to determine propriety of expenditures and fiduciary integrity of those in charge; (b) to determine whether a proper accounting has been made of all funds; (c) to determine costs, inventories, and other specific matters for various special purposes; (d) to detect errors in the accounts; (e) to detect fraud; (f) to determine extent of fraud already detected; (g) to deter fraud by the moral effect of audit upon accountable employees. Based on the responsibility vested in the General Accounting Office to prescribe the forms of vouchers, collateral papers, accounts and systems of keeping and reporting, to countersign warrants, and to settle and adjust claims and accounts, the system of audit of public accounts assumes even a broader scope. DUTIES OF GENERAL ACCOUNTING OFFICE Among the duties imposed upon the General Accounting Office by the Budget and Accounting Act of 1921, are: 1 |