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means of enforcing the Comptroller General's right of access to information in the possession of the executive branch.
Title III would amend generally section 313 of the Budget and Accounting Act of 1921, so as to provide a means of enforcing the Comptroller General's existing right of access to the documentation needed to audit adequately Federal and federally assisted programs.
The title would authorize the Comptroller General to institute an action to compel production of documents in cases where an executive department or establishment fails to comply with a request for information, books, documents, papers, or records. In addition, it authorizes the Attorney General to represent the defendant official in such actions.
Title III does not expand our statutory authority relating to access to records of Federal agencies, contractors, and recipients of Federal assistance. It merely establishes a strengthened procedure for obtaining the records to which we are entitled by law.
One of the most important duties of GAO is to make independent audits of agency operations and programs and to report to the Congress on the manner in which Federal departments and agencies carry out their responsibilities. The Congress, in establishing GAO, recognized that the Office would need to have complete access to the records of the Federal agencies.
The more important factors underlying the law, the intent of the Congress, and the GAO's policy of insisting on generally unrestricted access to pertinent records of agencies and contractors in making audits are:
1. An adequate, independent, and objective examination contemplates obtaining a comprehensive understanding of all important factors underlying the decisions and actions of the agency or contractor management relating to the subject of GAO examinations.
2. Enlightened management direction and execution of a program necessarily must consider the opinions, conclusions, and recommendations of persons directly engaged in programs that are an essential and integral part of operations. Similarly, knowledge of this type is just as important and essential to us in making a dependent review and evaluation as it is to management in making basic decisions.
3. Agency internal audits and other evaluative studies are absolutely necessary. They are important tools by which management can keep informed of how large and complex activities are being carried out. Knowledge of the effectiveness with which internal review activities are carried out and the effectiveness with which corrective action where needed is taken is absolutely necessary to GAO in the performance of its responsibilities.
4. Availability of internal audit and other evaluative documents to GAO enables us to concentrate a greater part of our efforts in determining whether action has been promptly and properly taken by agency officials to correct identified weaknesses, and help eliminate duplication and overlapping in audit efforts.
For this discussion, I believe it is self-evident that the GAO in its role as an oversight arm of the Congress, cannot be effective if it does not have full access to records, information, and documents pertaining to the subject matter of an audit or review.
The intent of the various laws assigning authority and responsibility to the GAO is clear on this point. The right of generally unrestricted access to records is based not only on laws enacted by the Congress but is a necessary adjunct to the duties and responsibilities of the Comptroller General.
I have attached appendix III 1 to my statement, a summary of some examples of the numerous and longstanding problems GA) has had in obtaining records of Federal agencies.
TITLE IV-PROFITS STUDY
Finally, title IV would afford the Comptroller General authority to make selective studies of the profits of Government contractors and subcontractors whose Government business, in their most recent fiscal year, aggregated $1 million or more. These studies would be made with a view toward comparing profits on Government business with profits on commercial business.
Subsection (b) requires that, when requested by the Comptroller General or his representatives, contractors will submit such information maintained in the normal course of business as the Comptroller General determines is necessary or appropriate to conduct his studies under subsection (a).
Subsection (c) authorizes the Comptroller General and his representatives to audit and inspect and to make copies of any books, accounts, or other records which the Comptroller General determines are necessary to permit calculation of the profits of any contractor.
This subsection specifically precludes the Comptroller General from disclosing any information obtained solely under the authority of section 401 that might reveal a contractor's profits or is of a proprietary nature, as certified by the contractor, on any individual commercial contract or on any individual contract entered into pursuant to formally advertised competitive bidding.
Subsection (d) defines for the purpose of the title the terms "contrator," "services and materials." Government contracts," and "commercial contracts."
By section 408 of the act approved November 19, 1969, Public Law No. 91-121, 83 Stat. 204, 208, the Comptroller General was authorized and directed to conduct a one-time study of the profits of representative defense contractors and subcontractors. The Comptroller General's report on this study, B-159896, was submitted to the Congress on March 17, 1971. Title IV would provide permenant authority for such studies.
There is a similar provision we are suggesting to the one-time study. We believe it would be better to have such permanent authority providing for such studies on a periodic basis, rather than to risk the added controversy that could result from the studies being proposed from time to time.
Finally, I believe that an independent study by GAO on profits is a greater value to the Congress than studies performed by the contracting agencies in the executive branch.
1 See p. 54.
I would like to also add here another point, that a great deal of the interest in the Congress on profits is not only the question of whether profits for Government-negotiated contracts are high or lower than commercial business—the contractors have continually argued that their profits are lower—but also the question of what trends are, whether those trends are down or up in relation to commercial profits.
We don't know of any way that you can get at this except periodically from time to time make these kinds of studies and then look at the trend. We have no authority now to do this because we cannot get access to their commercial profits.
We have to look at the overall averages that come out of the SEC and Federal Trade Commission. We cannot break out their contracts.
In addition, I would like to point out that the general provision of S. 2268 provides that in actions brought under this Act the Comptroller General shall be represented by attorneys of the General ACcounting Office or by additional counsel of his choosing who may be employed without regard to the provisions of title V, United States Code, governing appointments in the competitive service, and the provisions of chapter 51 and subchapter III and VI of chapter 53 of such title relating to classification and general schedule pay rates.
This is similar to the authority provided in the Congressional Budget and Impoundment Control Act of 1974. In addition, this provision states that any action brought under this act shall be expedited in every way.
We believe that GAO serves as a vital resource of the Congress by obtaining, analyzing and presenting through its audit, review and reporting activities information necessary to enable the Congress to legislate more effectively.
In addition, GAO is required, except where otherwise specifically provided by law, to settle and adjust claims by and against the Government including the settlement of accounts of accountable officers, and to determine the legality of expenditures or proposed expenditures of appropriated funds.
In our opinion, S. 2268, if enacted, will provide our Office with needed authority to strengthen and update its powers and functions so as to enable us to more effectively carry out our general responsibilities. We look forward to providing our fullest cooperation in connection with consideration of this legislation.
Senator METCALF. The various material in the indices will be incorporated in the record.
[The appendixes to General Staats' statement follow:]
COMPARISON OF TITLES I, II AND THE GENERAL PROVISIONS OF S.2268 WITH
Comparison of Title I ENFORCEMENT OF DECISIONS AND SETTLEMENTS
S.4432 provides for declaratory and injunctive relief whereas
S.2268 provides for declaratory relief only.
S.4432 requires the Attorney General to certify that he is in
disagreement with the Comptroller General in order for the Attorney
General to represent the defendant.
S. 2268 does not impose this require
S.4432 provides that an action shall be heard by a three-judge
S. 2268 does not contain this provision.
9.4432 provides that no action may be instituted, nor any court
appearance made by the Comptroller General until the expiration of 60
calendar days from the date on which the Comptroller General gives notice
to the House and Senate Committees on Government Operations of his intention
to file such a suit or make such
During this period Congress
may prevent such action by the passage of a concurrent resolution disapprov
In computing the 60-day period, days on which either House is
not in session because of adjournment of more than three days to a day
certain, or an adjournment sine die,' are excluded.
S.2268 does not
contain this provision,
Comparison of Title II ENFORCEMENT OF ACCESS TO RECORDS OF
These two titles are substantially identical.
SUMMARIES OF DISPUTES BETWEEN
2 Comp. Gen. 6 (1922)
Nature of Dispute
The Comptroller General and the Employees Compensation Commission differed in their interpretation of the statutory prerequisites for recovery of personal injury compensation awards. The Acting Attorney General ruled that the Employees Compensation Commission had the sole power to construe the terms of the Compensation Act and that "any construction so rendered is final and beyond interference by other Government officials". 33 Op. Atty Gen. 476 (1923).
The Comptroller General wrote the President stating that the Attorney General's opinion was merely advisory and was not controlling on the Comptroller General, and also, that it afforded no sanction to the Compensation Commission to disregard the Comptroller General's decisions. 2 Comp. Gen. 784 (1923).
2 Comp. Gen. 832 (1922)
Nature of Dispute
The Secretary of War sought the Attorney General's opinion on whether the War Department had to abide by General Accounting Office General Regulations No. 13, which required that claims and demands of common carriers against the United States be settled by the GAO. The Attorney General issued an opinion that the GAO order to Executive departments was a question of law for determination of the Attorney General. The Attorney General held that the War Department could disregard the GAO regulation. 33 Op. Atty Gen. 383 (1924).
The Secretary of War accepted the Attorney General's opinion. The Comptroller General, in a letter to the President, stated that such disregard of the regulation resulted in overpayments and unnecessary work. 2 Comp. Gen. 784 (1922).