COMPTROLLER GENERAL of the UNITED STATES Annual Repovf of Fke
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COMPTROLLER GENERAL OF THE UNITED STATES Annual Repovf of fke For the Fiscal Yeur Ended June 30, 1967 WASHINGTON : 1967 U.S. GOVERNMENT PRINTING OFFICE WASHINGTON : 1967 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 - Price $1.25 (paper cover) COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON, D.C. 20548 JANUARY 8, 1968. DEAR SIRS: In accordance with section 312(a) of the Budget and Accounting Act of 1921, I respectfully submit the annual report on the activities of the United States General Accounting Office during the fiscal year ended June 30, 1967. Comptroller General of the United States. The President of the Senate The Speaker of the House of Representatives COMPTROLLERS GENERAL OF THE UNITED STATES and ASSISTANT COMPTROLLERS GENERAL OF THE: UNITED STATES The General Accounting Office is under the control and direction of the Comptroller General of the United States. There is also an As- sistant Comptroller General of the United States who performs such duties as may be assigned to him by the Comptroller General and who acts as Comptroller General during the absence or incapacity of the Comptroller General,,or during a vacancy in that office. The Comptroller General and the Assistant Comptroller General are appointed by the President with the advice and consent of the Senate. Comptrollers General of the United States John R. McCarl July 1,1921-June 30,1936 Fred H. Brown April 11,1939-June 19,1940 Lindsay C. Warren November 1,1940-April30,1954 Joseph Campbell December 14,1954-July 31,1965 Elmer B. Staats March 8,1966- Assistant Comptrollers General of the United States Lurtin R. Ginn July 1,1921-November 11,1930 Richard N. Elliott March 9,1931-April30,1943 Frank L. Yates May 1,1943-June 29,1953 Frank H. Weitzel October 12,1953- iv Contents Pdge Chapter One-HIGHLIGHTS OF ACTIVITIES FOR THE YEAR . 1 Scope of GAO’s audit work . 1 Financial savings . 1 Expenses and staffing . .. 2 Audit reports issued . I.. .. 2 Assistance to Congress . .. 3 Legal services . 3 Transportation . 3 Claims settlement and debt collection . 4 Financial management improvement : . 5 Training and career development : . 6 Chapter TWO-ASSISTANCETO THE CONGRESS : . 7 Audit reports to Congress . : . 9 Special reports requested by committees . 11 Special reports requested by individual Members . 13 Reports on legislation . 14 Testimony at hearings . 16 Advisory assistance in legal and legislative matters . 20 Staff assistance to committees . : . 21 Recommendations for legislation in audit reports . : 21 Recommendations considered in fiscal year 1967 . : 22 Recommendations to the Congress during fiscal year 1967 . 25 Restatement of prior year recommendations . 34 Legislative proposals to heads of departments or agencies . 36 Chapter c[hTee-ASSISTANCE ON IMPROVEMENT OF AGENCY MANAGEMENT PRACTICES . L 39 Congressional interest in financial management . ; : 39 Assistance in the improvement of financial management . 40 Joint Financial Management Improvement Pro- gram. 41 Cooperative work with the agencies on the develop- ment of accounting systems . 42 Review and approval of agency accounting systems . 43 The prescribing of accounting principles and stand- ards . 44 Other factors affecting accounting systems develop- ment. : 45 Automatic data processing in the Federal Government ; 46 Review of agency internal auditing : . 48 V CONTENTS Page Chapter FOUI-AUDITOF CIVIL OPERATIONS AND PROGRAMS . 51 Department of Agriculture ............. 52 Department of the Army-Corps of Engineers (Civil Functions) ................... 54 Department of Commerce ............. 55 Department of Health. Education. and Welfare .... 56 Department of Housing and Urban Development ... 59 Department of the Interior and Water Resources Devel- opment Programs ................ 61 Department of Justice ............... 63 Department of Labor ............... 63 Post Office Department .............. 66 Department of Transportation ........... 67 Treasury Department ............... 69 Atomic Energy Commission ............ 70 District of Columbia Government .......... 72 General Services Administration .......... 73 National Aeronautics and Space Administration ... 75 National Science Foundation ............ 77 Office of Economic Opportunity .......... 77 Selective Service System .............. 78 Veterans Administration .............. 78 Other audit assignments .............. 79 Legislative branch ............... 79 Judicial branch ................ 80 Chapter FiUe-AUDIT OF DEFENSE OPERATIONS AND PRO- GRAMS ...................... 83 Nature of audit work performed .......... 83 Approach to audit ................ 83 Audit reports issued ................ 85 Significant findings and recommendations ...... 86 Chapter S~X-AUDITOF INTERNATIONAL OPERATIONS AND PROGRAMS ..................... 91 General ................. ... 91 Foreign locations at which work was performed . 91 Reports issued ................ 92 Recent recommendations to the Congress ..... 92 Reviews relating to United States activities in Vietnam .................. 93 Emphasis on financial management reviews .... 93 vi CONTENTS Page Chapter Six-AUDIT OF INTERNATIONAL OPERATIONS AND PROGRAMS-Continued Agency for International Development . 94 Survey and follow-up review of internal audits in Vietnam . , . .......... 94 Commercial import program for Vietnam . 94 Accounting and financial management systems . 95 Defense international activities . 95 Military assistance program . 96 Other Defense international activities . 96 United States construction activities in Vietnam 1965-1966. 97 Interagency programs ... 97 Food for Peace . .. ... 97 Management and utdization of United States-owned foreign currencies . 98 Department of State . 99 Payment of certain severance benefits to former Foreign Service officers . 99 Accounting and financial management systems . 99 Reviews of administrative activities at United States embassies and consulates . 100 Department of Transportation . 101 Peace Corps . ... 101 United States Information Agency .. 101 Export-Import Bank of Washington . .. 102 Chapter Seven-AUDIT OF CONTRACTS . 103 General . 103 Truth in Kegotiations Act . .... 106 Administration of contract terms and conditions . 108 Chapter Eight-TRANSPORTATION . 111 Audit of transportation payments and settienlent of claims . 111 Transportation payments . , . 111 Claims . , . 113 Transportation management reviews . 113 Assistance in the legal field . 114 Assistance in the traffic and transportation field . 116 Chafiter Nine-cLAIMs . .. 117 Claims against the Uniteci States . 117 Claims by the United States . 118 vi i CONTENTS Page Chapter Ten-LEGAL SERVICES ..... : ........ 121 Appropriations and miscellaneous : : ........ 124 Civil pay ..........: ......... 126 Government contracts ............... 128 Military pay and allowances ............ 132 Transportation .................. 133 Legislation .................... 135 Research services ................. 135 Chapter Ehen.RECRUITING. STAFF DEVELOPMENT. AND PER- SONNEL MANAGEMENT PROGRAM : : .....; .... 137 Recruiting. training. and staff development ...... 137 Recruiting-Professional staff .... ; ..... 138 Recruiting-Technical staff . : ..: : ..... 139 Training-Professional staff ........... 139 Training-Technical staff ........... 145 Career development .............. 145 Professional development and recognition ..... 145 Personnel management program ........... 146 Incentive awards ........ : ...... 147 Recruitment and staffing ............ 147 Equal employment opportunity ......... 148 Employee health benefits program ........ 149 Security clearance program . ; ......... 149 Appendixes Detailed Table of Contents .............. 153 Appendix A-Functions and Organization .......: : 155 Appendix &-Legislation Affecting the Work of the General Accounting Office Enacted During the 89th and 90th Congresses. Fiscal Year 1967 ............ : 161 Appendix C-Audit and Legal Activities ........: 171 Appendix &-Transportation Audit and Claims Adjudication : 29 1 Appendix E-General Claims Settled During the Fiscal Year 1967 : . : ............... : ; ; : : 295 Appendix F-Collections By or Through the Efforts of the General Accounting Office. 1958-67 .......... 295 Appendix &Summary of Financial Savings Attributable to the Work of the General Accounting Office Identified During the Fiscal Year 1967 ............. 299 viii CONTENTS Page Appendix €3-Personnel Statistics : ..: ...... 317 APfmu’ix I-Financial Statements of the General Accounting Office ...................... 327 AppendixJ-Directory of theU.S. General Accounting Office : 333 INDEX . : ......... : ........ ; . ; : 339 ix CHAPTER ONE Highlights of Activities for the Yem Scope of GAO's Audit Work The General Accounting Office conducted approximately 2,200 audits and reviews of US. Government activities and programs in the United States and in 33 other countries during fiscal year 1967. Number of Area of audits Field of activity audits and reviews U.S.A. Overseas Civil. ............................... 1,226 1,901 6 Defense. ............................ 772 941 85 International ........................ 205 99 135 Total. ......................... Zl2O3 2,941 226 Most of these audits and reviews were undertaken at US.Government locations but work was done also at 520 other locations such as State and local governments, universities and similar recipients of Federal grants or loans, and approximately 240 pIants and offices of private contractors holding Government contracts. The primary purpose of these