Assistance on House and Senate financial and The information in the succeeding sections is furnished both in accordance with past practice and pursuant to the direction of section 205 (b) of the Legislative Reorganization Act. Reports to the Congress The responsibility of the General Accounting Office for reporting to the Congress information obtained as the result of its reviews is clearly indicated in the Budget and Accounting Act, 1921, and is emphasized in the related legislative history. For this reason, a major thrust of the Office is to meet this fundamental obligation by furnishing to the Congress reports on GAO findings, conclusions, and recommendations covering a wide variety of Government defense and civil activities in Washington, the field, and overseas. Special emphasis is placed on reporting the results of assessments of programs in which there has been a strong congressional interest in determining whether they have achieved the purposes intended by the Congress. Examples of such findings in reports issued to the Congress during the year are: An analysis of the Teacher Corps program at selected universities and participating schools showed that significant educational advances were achieved in elementary schools having concentrations of low-income families, that innovative teaching methods were developed and applied with success, and that there had been some limited impact on the teacher preparation curricula of the universities; however, suggestions were made for further extending and giving permanence to the benefits already realized from the program. (See Appendix, Section I, Items 14, 15, and 16.) The Neighborhood Health Services Program, as administered by St. Luke's Hospital Center in New York City under grant-in-aid funding from the Office of Economic Opportunity, had not yet provided a significantly better health care delivery system for the 20,000 poor intended to be served; several factors were identified which had inhibited the program from alleviating the cycle of mutual perpetuation which exists between poverty and sickness. (See Appendix, Section I, Item 11.) The Department of Housing and Urban Development's program to provide rehabilitated housing for low-income families in Philadelphia resulted in some benefits, but some important goals of the program have not been fully achieved and compliance with prescribed construction requirements has not been effectively enforced. (See Appendix, Section I, Item 50.) The Labor Department's JOBS (Job Opportunities in the Business Sector) program has been effective in focusing the attention of businessmen on the employment problems of disadvantaged persons and in eliciting broad commitments by many private employers to hire, train, and retain the disadvantaged; however, because of problems in the design and administration of the program, including an insufficiency of accurate and meaningful data on program operations, reported accomplishments have been generally overstated. (See Appendix, Section I, Item 53.) In areas of increasing urbanization the congressionally established objectives of the Department of Agriculture's feed grain program, namely, controlling feed grain production, conserving land for future agricultural or related uses, and maintaining farm income, were not being substantially achieved, due to payments made to recipients engaged in businesses or occupations other than agriculture and because payments were made for diversion of land being used or intended for use for nonagricultural purposes. (See Appendix, Section I, Item 1.) The Army's administration of its depot-level maintenance program for helicopters resulted in a substantial backlog of helicopters, engines, and components awaiting repair at a time when the Army was processing purchases of large quantities of new helicopters and engines. (See Appendix, Section I, Item 213.) A study of 14 waterways in five States showed that generally some progress had been made in abating industrial water pollution, but the emphasis and achievements have varied from State to State and, in some States, tangible results have been minimal. (See Appendix, Section I, Item 73.) Action was needed to improve the Department of Defense program for the development and retention of career procurement personnel in view of evidence that the program had accomplished much less than was anticipated at its inception in 1965. (See Appendix, Section I, Item 131.) In addition to reporting to the Congress on the results of Government programs, GAO considers the efficiency and economy of Government operations to ascertain whether appropriated funds are being spent prudently and for the intended purposes. Reports are frequently issued to the Congress on GAO findings of areas where management can be improved and savings achieved, particularly in respect to the operations of the Department of Defense. Illustrations of such findings follow. Management deficiencies in the Army's tactical vehicle development program have continued despite organizational and procedural changes. (See Appendix, Section I, Item 143.) Significant savings and substantial balance-ofpayments advantages could be realized at some overseas locations if the armed services would make arrangements which would increase the use of American trucks and trailers in place of foreign vehicles being used by commercial carriers under contract with the military. (See Appendix, Section I, Item 92.) An examination of the progress and problems in implementing the Federal Claims Collection Act of 1966 highlighted the following matters: (1) the significant backlog of claims involving hundreds of millions of dollars, (2) the administrative deficiencies in implementing the act, (3) the assistance rendered by GAO to improve agency debt collection operations, and (4) the effectiveness of the act in reducing the debt collection litigation burden of the Department of Justice and the courts. (See Appendix, Section I, Item 230.) From time to time the Congress directs the Comptroller General to make special studies on matters of particular current interest and concern. The results of one such study, required by section 408 of the Armed Forces appropriation authorization for fiscal year 1970 (Public Law 91-121), were reported to the Congress as the "Defense Industry Profit Study" on March 17, 1971. The law prescribed that GAO make a "study and review on a selective representative basis. of the profits made by contractors and subcontractors on contracts on which there was no formal competitive bidding." In a statement by the Comptroller General concerning the report, the study was described as "the most detailed and comprehensive effort made to date comparing profits on defense and non-defense work of private industry." The GAO recommended as a result of the study that the Office of Management and Budget should lead an interagency effort to develop uniform Government-wide guidelines for negotiating profit objectives which will give due emphasis to the total amount of contractor capital to be devoted to the performance of the contract; the guidelines would be applicable where effective price competition was lacking. (See p. 89 for details.) Reports to Committees The Budget and Accounting Act, 1921, requires the Comptroller General to make such reviews as are ordered by either House of Congress or by committees having jurisdiction over revenues, appropriations, or expenditures. Requests by all committees for special audits and surveys are, as a matter of policy, accepted and given priority attention. In the past year GAO issued 133 special reports on audits and reviews pursuant to requests of committee and subcommittee chairmen. These reports involved varied subjects in the areas of complex defense procurements and activities, sensitive international Government operations, and a multitude of program activities in the civil departments and agencies. A close working relationship was maintained with the committees and their staffs through briefing sessions on GAO reviews and by exchanging information on matters of mutual interest. GAO frequently adjusted work schedules to expedite completion of reports for use of the committee upon learning that the subject matter of audits and reviews which it had initiated was also on a committee's current oversight or legislative agenda. Briefing sessions with the staff of the House Appropriations Committee were, again this year, a most effective method of providing the results of GAO work for use by the committee in its important budget review responsibilities. The House Appropriations Committee also received GAO's 17th annual report on significant audit findings resulting from the Office's audits and other examinations in the defense and civilian agencies of the Government. The report consists of a comprehensive summary of information which the committee may find useful in connection with budget hearings, when officials of the respective departments and agencies are present to respond to questions concerning the management of programs within their areas of responsibility. As in the past, the Appropriations Committee hearings this year reflected the extensive reliance by committee members on this report as an instrument in aid of the discharge of their legislative duties. Illustrations of special reports made at the request of committee and subcommittee chairmen include a report to the Special Subcommittee on Alcoholism and Narcoucs, Senate Committee on Labor and Public Welfare, on the substantial cost savings available from the establishment of an alcoholism prevention and treatment program for Federal civilian employees. GAO estimated that net annual cost savings to the Government would range from $135 million to $280 million annually, while at the same time contributing to the reduction of a major national health problem. In announcing the issuance of the GAO report, the chairman described it as a "breakthrough revelation of the tremendous savings in human and economic resources that can be achieved" by the institution of an appropriate alcoholism program. In December 1970, legislation was enacted providing for the establishment of a Government-wide alcoholism program for Federal civilian employees. At the end of the year a similar report was being prepared for the committee concerning alcoholism among employees in the military services. The chairman of the Subcommittee on Labor, Senate Committee on Labor and Public Welfare, requested GAO to examine the implementation of the provisions of the Federal Coal Mine Health and Safety Act of 1969 which require the Department of the Interior to inspect coal mines for identification and correction of unsafe and unhealthy conditions. On the basis of its findings, GAO concluded in its report to the chairman that the Department's policies for enforcing health and safety standards have been, at times, extremely lenient, confusing, uncertain, and inequitable. GAO made a number of suggestions for improvement, and the Department reported that actions responsive to GAO's proposals had been initiated or were planned. GAO was requested by the chairman, Senate Select Committee on Equal Educational Opportunity, to review the policies and procedures of the Department of Health, Education, and Welfare (HEW) for approving grants of Federal funds to school districts to defray the costs of meeting special problems arising from school desegregation. The report to the committee described the conditions noted by GAO and contained GAO's conclusion that in many cases school districts did not submit with their applications, nor did HEW regional officials obtain by other means, sufficient in formation to permit a proper determination that the grants were made in accordance with program regulations or that the grants were in line with the purpose of the program. GAO continued to enjoy a close working relationship with the Joint Committee on Atomic Energy. In particular, GAO issued, pursuant to committee requests, seven reports on the activities of the Atoinic Energy Commission (AEC) covering, for example: Proposed revisions to the criteria for uranium enrichment services and to the related price of such services. Progress and problems in programs for managing high-level radioactive wastes. Use and operating costs of the AEC's high energy accelerators. The Joint Committee utilized GAO reports in its consideration of actions proposed by AEC to revise operating policies and practices and in the committee's oversight review of AEC programs. Reports to Individual Members of Congress GAO believes that if an individual Member of Congress is concerned about a Government activity or program, the Office should try to provide assistance. GAO encourages Members to first obtain the desired information or action directly from the agency, but if this approach does not obtain satisfactory results, GAO will proceed to review the matter and furnish the Member a report. Frequently consultation with the Member concerning the nature of his interest helps to bring the issue into sharp focus, thereby conserving staff resources while still satisfying the Member's needs. During the year the Office furnished 143 audit reports to individual Members covering the activities of nearly all of the departments and agencies. The following selected examples provide an indication of the range of subjects examined by GAO as a result of special requests by Members. At the request of Senators Joseph M. Montoya and William Proxmire, GAO investigated the handling and control of petroleum products in Southeast Asia. GAO concluded that while some improvements in fuel transportation and distribution methods had been made, a number of significant weaknesses still existed with the result that the products were not managed in the most effective and economical manner. In the words of the report, issued on July 28, 1970, "major problems have been experienced in managing the fuel function and substantial losses of product have occurred." Senator Gordon Allott asked the GAO to review the use by the Post Office Department of air taxis to transport mail, with particular attention to the growth of air taxi service during the tenure of a former Assistant Postmaster General. On October 22, 1970, GAO reported to Senator Allott on the relationship of the former Assistant Postmaster General to a particular air taxi contractor; on the rapid increase in air taxi service, especially that provided by certain contractors; on the weak administrative practices attending air taxi service; and on the questionable statutory basis for the expansion of such service. GAO reported to Senator Margaret Chase Smith on November 6, 1970, concerning the operation and administration of the executive lunchroom at the headquarters of the National Aeronautics and Space Administration. GAO found that the cost of operating the lunchroom considerably exceeded the revenue produced by the fee charged to users, that a number of food purchases had been made from the Army commissary at Fort McNair in violation of military regulations, that food purchase receipts had been altered to remove indications that purchases were made at Fort McNair, and that improper food purchases were continuing even after instructions had been issued to halt this practice. Congressman H. R. Gross asked GAO to investigate contract actions relating to a purchase by the Department of the Army of certain radio sets from Bristol Electronics, Inc. GAO's February 12, 1971, report discussed several questions, including the issuance by the Small Business Administration of a certificate of competency to Bristol after the Army had rejected Bristol as incapable of performing the contract, the performance record of the contractor under the contract, the settlement of the contractor's claim for extra compensation, and the basis for a subsequent Army contract award to Bristol. At the request of Senator William Proxmire, GAO considered whether it would be feasible to convert contractors' independent research and development (IR&D) as a budget line item. In the report to Senator Proxmire on March 8, 1971, GAO concluded that line-item control of IR&D payments to major defense contractors could be effected. However, in view of the recently enacted provisions in section 203 of Public Law 91-441, which imposed certain restrictions on IR&D payments, GAO recommended that sufficient time be allowed for an assessment of the impact of such limitations before consideration should be given to any further legislative controls. Congressman Henry Reuss asked the General Accounting Office to examine certain aspects of selected Department of Defense public affairs programs. On June 29, 1971, GAO reported to Congressman Reuss on the Joint Civilian Orientation Conference. The report described such matters as the selection of participants and their itinerary and activities during the conference. GAO computed the costs of the conference and determined that $80,000 in costs were borne by the Government, while $22,000 in costs were recovered in fees charged to the participants. Assistance to individual Members also includes the reports GAO furnishes upon request concerning claims by and against the United States such as those involving Government contracts, compensation of civilian personnel, and pay and allowances of military personnel. During the year 606 written reports of this type were made. Reports on Pending Legislation The GAO professional staff is well acquainted with the programs and activities of most Government agencies through on-site review and observation of agency operations. Consequently, the Office can provide the committee with independent advice and information on proposed legislation; often there may be no other available source for such well-informed comment. Dur ing the past year GAO responded to 632 committee requests for comments on bills. The significant increase from 438 such reports in fiscal year 1970 is a measure of the increasing congressional reliance on GAO's legislative analysis expertise. It may be expected that the provisions of the Legislative Reorganization Act may reinforce this trend. GAO also furnished 77 reports to the Office of Management and Budget at its request on numerous proposed bills and enrolled enactments. The clear advantage of furnishing views on bills to the committees and OMB is that many problems relating to fiscal and administrative provisions in proposed legislation can be settled prior to being acted upon by the Congress. Several items of legislation enacted during the fiscal year directly pertain to the functions of the General Accounting Office. A complete list of such legislation is found in Exhibit 2, which begins on page 156. The most notable of these laws affecting the operations of GAO is the Legislative Reorganization Act of 1970, whose provisions were summarized earlier in this chapter. One of the most important current legislative proposals concerning the operations of GAO is S. 1022, which was S. 4432 in the 91st Congress. The bill grew out of hearings in September 1969, by the Subcommittee on Executive Reorganization, Senate Committee on Government Operations. In turn, the hearings resulted from discussions which occurred during the Senate debate on Public Law 91-121, the Armed Forces appropriation authorization for 1970. The hearings centered on the capability of GAO to analyze and audit defense expenditures. The chairman's opening remarks indicated the full breadth of the subject; the chairman stated that "although these hearings focus on defense spending, the basic questions relating to GAO are common all across the Federal Government, for basically, we are asking whether the GAO can provide the Congress with the kind of information the executive branch is able to provide for itself." S. 4432 was passed by the Senate on October 9, 1970, as the "Budget and Accounting Improvement Act of 1970." Time did not permit House consideration of S. 4432 before the expiration of the 91st Congress. However, in a report to the chairman of the House Committee on Government Operations on December 20, 1970, GAO emphasized the importance of the legislative proposal both to the Congress and to the Comptroller General, and expressed the hope that upon the introduction of a new bill in the 92d Congress, the proposal would be the subject of early hearings and favorable consideration. S. 4432 was reintroduced as S. 1022 and, on May 17, 1971, GAO commented on the new bill to the chairman of the Subcommittee on Executive Reorganization and Government Research, Senate Committee on Government Operations, urging favorable consideration. The present bill would change the name of the Office to the "Office of the Comptroller General of the United States," in order to reflect the wide range of GAO's activities beyond the field of accounting. In addition, the Comptroller General would be required upon spec ified congressional request to make analyses and reviews of legislative proposals and alternatives. The bill would also delete the requirement for annual GAO audits of Government corporations and certain revolving funds, would give the Comptroller General the authority to issue subpenas in support of his existing access to records authority, and would permit the Comptroller General to institute in the District Court for the District of Columbia a civil action for declaratory or injunctive relief whenever he had reasonable cause to believe that an officer or employee of the executive branch was about to expend, obligate, or authorize the expenditure or obligation of public funds in an illegal or erroneous manner, and in such civil action to be represented by attorneys employed by the General Accounting Office. Certain provisions of S. 1022 have been the subject of other legislative action. For example, section 204 of S. 1022 would have redesignated the Assistant Comptroller General of the United States as the "Deputy Comptroller General of the United States." However, the Legislative Branch Appropriation Act, 1972, Public Law 92-51, approved July 9, 1971, provided for this change in title. Furthermore, section 202 of S. 1022 would have authorized the placement of two positions in the Office of the Comptroller General of the United States at level IV of the Executive Schedule. On August 2, 1971, the House of Representatives passed H.R. 9442, a bill to authorize compensation for five GAO positions at level IV of the Executive Schedule. Another legislative proposal, currently exemplified by H.R. 545 and represented in the 91st Congress by H.R. 17622, would require the Comptroller General to report annually to the Congress concerning price increases in Government contracts and failures to meet contract completion dates. In reporting to the House Committee on Government Operations on both of these bills, GAO concurred with the central idea of keeping the Congress informed concerning contract performance. However, the practicality and meaningfulness of the proposed method of achieving the objective were questioned, especially considering the great volume of Government contracting activity compared to the manpower available in GAO to conduct such reviews and assemble the required reports. GAO concluded that selective analysis of contract cost increases, schedule slippages, and performance shortcomings would largely satisfy the bills' objectives while permitting limited staff resources to be utilized most economically and productively. |