Furnishing data to GSA to assist in establishing effective transportation management techniques for civil agencies.

Furnishing information on freight rates, household goods rates, and passenger fares and charges to the Department of Defense.

Furnishing passenger fares and other transportation data to the Department of Labor for preparing the monthly consumer price index.

Providing guest lecturers at the Army Transportation School, Fort Eustis, Va.

Considering and acting upon various requests from the administrative agencies for permission to deviate from established procedures to provide more economical and efficient traffic management.

We continued meeting with representatives of individual carriers or members of their trade associations o discuss and resolve mutual problems relating to our udit of carriers' bills. During the year we participated n five meetings with various domestic and internaional trade associations and had numerous discussions

in Washington, D.C., with carrier and carrier association representatives.

Technical Assistance

We continued to provide technical assistance to the Department of Justice in its prosecution and defense of transportation suits by or against the United States and in proceedings before the Interstate Commerce Commission. As part of this assistance, transportation specialists participated in numerous conferences with members of the Department. As noted before, our assistance to the Department regarding general claims is limited to referring debts and advising on compromise offers.

We reported debts against carriers involving 88 items totaling $12,930 to the Department for collection. During the fiscal year, similarly reported debts covering 536 items totaling $100,072 were settled by collecting $56,005 through judgments, compromises, or other means.

The Department of Justice notified us that carriers had filed 85 suits covering 22,327 shipments. Fifty-five of the suits filed and about 19,648 of the shipments were on overseas movements of household goods by the Department of Defense. The amount sued for is not stated in the petitions filed in those suits, but we estimate the liability of the United States on the 850 suits filed in this and prior years to be about $10 million if the final rulings of the court are adverse to the Government. In the same period, we furnished technical advice and other assistance to the Department of Justice in 29 suits involving 3,983 shipments for $1,270,952. Nineteen suits, the subject of reports in this or prior years, involving 1,523 shipments and $856,173, were settled by payment of judgments for $95,400 and by dismissal or withdrawal of the balance.

A meeting of the parties to the litigation in the movement of household goods was held in October 1971 before a Court of Claims Commissioner to discuss the ruling of the court in one of the five representative cases selected for trial of the issues in the 850 households goods suits, Trans Ocean Van Service v. United States (Ct. Cl. No. 137-66, decided May 15, 1970). At that time it was agreed that the parties would select one of the 850 suits containing a sufficient number of shipments to represent the problems involved and the forwarders would submit claims consistent with the ruling in the representative case. On November 17, 1971, the Commissioner ordered the plaintiff in Wheaton Van Lines v. United States (Ct. Cl. No. 226-27), to comply on or before January 3, 1972, with part I of the Procedure in Common Carrier Cases as supplemented by the agreement reached in October 1971. Similiar orders having a performance date of March 31, 1972, were issued in nine other Wheaton

cases.

In connection with another of the five representative cases, Global Van Lines, Inc., v. United States (Ct. Cl. Nos. 259-65 and 355-65), on which a report of the Commissioner was filed February 1, 1971, motions for reconsideration of the court's findings were filed by both the plaintiff and the Department of Justice on May 2, 1972.

All actions in the above cases were pending before the court at the end of the fiscal year.

The collection of motor carrier overpayments is another activity of continuing importance in our audit and technical assistance work. Overpayments arise when carriers apply unjust and unreasonable rates as defined by the Interstate Commerce Act. Reparations

for such overpayments to motor carriers may be recov ered only through suits filed in the U.S. district courts. During the year we prepared reports on 25 motor carrier overpayments involving 152 shipments and claimed reparations of $86,375. Sixteen of the cases were referred to the Department of Justice and as of June 30, 1972, the Department had filed suits on most of them. When advised of unjust and unreasonable rate situations, certain motor carriers voluntarily refunded overpayments on 193 shipments amounting to $76,612.

Transportation Documentation and Procedures

Under the Joint Financial Management Improvement Program, GAO participated in a joint agency study of freight and passenger transportation in the civil agencies. The study was under the chairmanship of an official of the General Services Administration with full-time staff members assigned from GAO; GSA; the Office of Management and Budget; the Treasury Department; and the Departments of Commerce, Agriculture, and Health, Education, and Welfare.

The report issued in September 1970 outlined the conclusions and recommendations of the study group. The study resulted in 58 recommendations which offer the means not only to simplify and expedite payment of the 9 million yearly transportation transactions but also, in many instances, to integrate the audit of payments as a natural outgrowth of the payment process and to produce savings estimated at $8.6 million annually.

Of the 58 recommendations, 30 are being implemented by GAO as part of its responsibility to promulgate accounting principles, standards, and uniform procedures, for use of Federal agencies and individuals and private concerns doing business with the Government. Of the 28 remaining recommendations, four are being implemented by GAO in concert with carriers and various other agencies, 16 are being acted upon by various other agencies, one will be handled under the Joint Financial Management Improvement Program, and seven require no further action.

During fiscal year 1972, we continued to make progress on those recommendations for which we have primary responsibility:

All work pertaining to the new Government Transportation Request form has been completed.

Instructions for its use have been circulated, and the new form should be available for use early in calendar year 1973. The revised form will simplify the procurement, payment, and audit of passenger transactions.

Authority has been granted for heads of departments and independent establishments, at their option, to direct the use of cash within the 50 States and the District of Columbia to (1) procure passenger transportation services costing up to $100, plus tax, for each trip and (2) pay excess air baggage charges in amounts up to $15 for each leg of a trip. We expect this change to reduce the paperwork and processing activities of most Government agencies.

Proposed legislation which will exempt transportation payments from the scope of the statute prohibiting advance payment (31 U.S.C. 529) has been introduced in both Houses of Congress. All the major carrier associations favor enactment of the legislation. The principal shipping and auditing agencies of the Government-Department of Defense, GSA, and GAO-have filed comments with the congressional committees favoring passage of

this legislation. The exemption proposed will enable the adoption of 16 recommendations of the study report, result in the removal of the principal impediment to timely payment, and simplify the documentation for freight shipments.

During the past year, we monitored a test of shipping Government freight by using the U.S. Government Bill of Lading with delivery certified by the carrier rather than the consignee. Reactions were most favorable and we are consolidating the test data to evaluate the benefits of this system.

Another major recommendation in which we participated with GSA was the extension of automatic payment for procuring passenger transportation by teleticketing machines. Fourteen agencies in the metropolitan Washington area have adopted the concept, which will (1) eliminate 125,000 Transportation Requests annually, (2) save $650,000 per year in reduced paperwork, and (3) result in more timely payment of air carrier billings.

Other recommendations in the study report are being considered and will be implemented by letter and in the GAO Manual.

U. S. GENERAL ACCOUNTING OFFICE REGIONS

CHAPTER FOURTEEN

FIELD OPERATIONS

Responsibilities

The Field Operations Division through its headquarters staff and regional offices located in principal ities of the United States is responsible for performng accounting and auditing work assigned by the diectors of all GAO's operating divisions. In addition, he Field Operations Division is directly responsible or performing assigned audits under the Government Corporation Control Act and similar legislation and he audit and settlement of accounts of military disursing officers.

This division is under the supervision of John E. Thornton, Director, and Stewart D. McElyea, Deputy Director. The division's organization chart appears on The following page. A directory showing the location and managers of GAO regional offices, suboffices, and nilitary audit staffs is included as Exhibit 10.

Audits of Federal Corporations and Other Activities

The Government Corporation Control Act (31 J.S.C. 841) requires GAO to make annual audits of he financial transactions of Government corporations Fin accordance with the principles and procedures applicable to commercial corporate transactions and ander such rules and regulations as may be prescribed

by the Comptroller General... . ." Other laws provide similar audit authority for unincorporated businesstype activities. The Field Operations Division is responsible for such audits of the following corporations and other activities.

Bureau of Engraving and Printing Fund
Federal Crop Insurance Corporation
Federal Deposit Insurance Corporation
Federal Home Loan Bank System

Federal Prison Industries, Incorporated

Federal Savings and Loan Insurance Corporation
Government National Mortgage Association
Government Printing Office Revolving Fund

National Credit Union Administration

Panama Canal Company and Canal Zone Gov

ernment

Saint Lawrence Seaway Development Corporation

Student Loan Insurance Fund

Tennessee Valley Authority
Veterans Canteen Service

Our audit work in this area consists primarily of examining financial statements in accordance with generally accepted auditing standards. Twelve reports were submitted to the Congress during fiscal year 1972 in which we expressed our opinion on the financial statements of the Federal agencies involved. In addition, eight reports were issued to local officials of the Federal Prison Industries, Incorporated, relating to their financial management activities. These reports are included in the list of audit reports issued during fiscal year 1972. (See Appendix, Section III.)

As in prior years, we were unable to fully discharge our responsibilities for auditing the Federal Deposit Insurance Corporation because the Corporation would not permit unrestricted access to reports, files, and other records relating to the banks it insures. Without access to such records we were unable to make an adequate audit of the Corporation's activities and therefore we could not express an overall opinion of the Corporation's financial statements. Accordingly, we recommended in our report (B-114821, May 25, 1972) that the Congress enact legislation which will clarify this access-to-records problem. (See Appendix, Section IV, Item 19.)

For various reasons explained in the report on our audit of the financial statements of the Student Loan Insurance Fund for fiscal year 1970, we expressed the belief that the statements did not present fairly the Fund's financial position and the results of its opera