The GAO Review, Fall 1971

1lllllllll11llllllllllllllllllllllllllll091094 ....

The United States General Accounting Ofice, established in 1921, is an independent, non- political, nonpartisan audit 0rgan:zation in the legislative branch of the Federal Government. Directed by the Comptroller General of the United States, it is responsible solely to the Congress and serves a key role in the Federal system of checks and balances. One of its major functions is to review the performance of management and recommend improvements in the operation of the various departments and agencies of the executive branch.

For sale by the Superintendent of Documents. U.S. Government Printing Office, Washington. D.C. 20402. Price 40 cents (single copy). Subscription price: $1.50 per year: 50 cents additional for foreign mailing. THE GAO REVIEW

Con tents The Challenges to Creativity z&,:J=2< ROBERT F. KELLER ...... 1 2AO Auditors Help Save a Life ROBERT TAYLOR, RONALD FEKETE, ERIC Pr"" AND ANTHONY SALVEMINI ...... 7 Effective Surveys: Key to Productive Audit; DEAN K. CROWTHER AND J. WILLIAM GADSBY .a/.5&>9 GAO's Role in the C-5A Saga ZANE GElER 18 Using Computer-Aided Techniques in Financial Audit Work CLARENCE 0. SMITH AND GERALDINE F. JASPER *7g&i 28 Reflections on a Congressional Committee Assignment d3 /---J-e THEODORE F. ZEUNGES . .( '-2. ../' ...... 38 Dictating-An Important and Underutilized Management Too I JOHN J. CRONIN, JR, ...... 42 As We Look to Others ...... 46 Approval of Department of Commerce Account- ing Systems ...... 48 More on GAO's First 50 Years ...... 51 50th Anniversary Activities ...... 52 Personalities Contributing to the Enact- ment of the Budget and Accounting Act, 1921 MARGARET F. MACFARLANE AND JUDITH HATTER 57 General Accounting Office Officials- February 15, 1922...... 72 The First Field Audits

J, PHILIP HORAN ..... 74 Comptroller General McCarl’s Farewell Message ...... 78 Capsule History of the Denver Regional Off ice W . C. EMM ...... 80 The Seattle Regional Office ...... 82 GAO Honor and Service Awards-1971 ...... 84 National Association of Accountants Conference Report ...... 100 News and Notes ...... 104 Hearings and Legislation ...... r;2/a-3/ 109 Automatic Data Processing ...... 112 Systems Ana Iysi s ...... 114 GAO Staff Changes ...... 118 Professional Activities ...... 149 New Staff Members ...... 161 Readings of Interest ...... 164

Published quarterly for the professional staffs of the US. General Accounting Office ROBERT F. KELLER DEPUTY COMPTROLLER GENERAL

The Challenges to Creativity

The following address was delivered on June 28, 1971, by Mr. Keller at the commencement exercises of Benjamin Franklin University, Washington, D.C. Mr. Keller’s address was printed in the Congressional Record for July 27, 1971.

A few days ago at one of our uni- minutes. This example of modern tech- versities here in Washington, the nology and its threat to the environ- commencement address was given by a ment is said to be the answer to the newspaper columnist whose specialty is developer who has a heavily wooded humor. I understand his remarks drew area to clear so that he can build new a good many laughs. Let me state at houses. It takes 30- 50- 70 years to the outset: I am neither a columnist grow trees, depending on the size and nor a humorist. You cannot look for- kind; yet here is a machine that can ward this evening to a searing com- make an entire tree disappear in min- mentary in the guise of humor on utes. Obviously, a machine of such those who occupy positions of respon- devastating power must be used with sibility in the present administration. extreme care. Neither am I a Bob Hope. Some of Since we, in this country, often seem you may recall the occasion a few too ready to poke fun at our leaders years ago when Hope, speaking to a and institutions, thereby chipping graduating class, said: “My advice to away at the public’s confidence in so- those of you who are anxious to go out ciety, this is another area where ex- into the world is-reconsidery and treme care is always needed. Not that don’t do it.” But Bob Hope has had a political and other leaders should be change of heart. This year in speaking immune from ribbing and criticism. at a college graduation he had this But there is a time and place for every- advice: “To you people who are grad- thing. uating-who are about to go out and I have spent most of my working make this a better world-all I can say life in the Federal service, at the Gen- is: HURRY! There is a lot of work to eral Accounting Office-where we be done.” And there is. work closely with the Congress, its Not long ago I read in the papers committees, and Members, year in and about a new and big machine that can year out-and I know how fragile and chew up a large tree into chips, from precious a thing public confidence is. trunk to branch tips, in a matter of Like the trees, it takes generations to

1 CHALLENGES TO CREATIVITY build a viable society. Just because helped to shape, the events of his life- someone does not like a particular time. In a book of reminiscences pub- administration or a particular public lished this year called “Pieces of the figure does not excuse those who-in Action,” Dr. Bush has something of that time-worn but apt phrase-seem importance to say to us here today. all too ready to throw out the baby In every civilization, at some time, there along with the bath water. has been confusion, with young men doing I came into the job market in th8 foolish things, with the great body of the 1930’s. This was at the bottom of wh,at public inert or yearning to be led some- was rightfully called the Great Depres- where, anywhere. . . . Yet always there has been a small minority, intelligent, compre- sion. The ratio of unemployed to the hending the current political system, scorn- total available work force was far ing both the flighty radical and the protest- higher than today’s 6 percent. The eco- ing reactionary groups. . . . It is this central nomics of the depression pushed my core that ruled our last generation, its busi- generation off the campus and into all ness, its churches, its government. Amid the tumult, we have today a group that under- kinds of experiences, few of our own stands and that will rule in the next gen- choosing. Perhaps it was a good thing. eration. I am not saying that this outstand- We were forced to learn to swim even ing group has always ruled us well in the if the water was frigid. past, or will rule as well in the future-I merely say there is a group that will rule. Then along came World War I1 and We do not need to worry too much about most of us were directly affected. the ones that harass us with their insanities; World War I1 was different from our as they become older they will be controlled. involvement in Vietnam. But that is But we need to think more about the solid, keen, presently undemonstrative youths who not the point; the paint is that then, as will build our system of government and in- today, forces were at play which drasti- dustry of the future, and who will build it cally altered our personal lives and not as we dictate, but as we transmit to our career aims. them, as best we may, the wisdom to do it well. But these events had their plus side. They forced us to grow and develop. We wouldn’t have planned it that way Looking Ahead to the but, given those circumstances, most of Year 2000 us managed and emerged the better for it all. And rhat is why I do encourage What kind of a world are you going you today to go out into the world out into? Today’s generation knows a with conviction, courage, and with one lot more about the world than mine other quality that is indispensable-as did when we were where you are now, much common sense as you can bring so I hesitate to answer that question. to bear upon your experiences and ad- Instead I suggest a sort of quantum ventures. jump to some 29 years ahead. Why I am seconded in these thoughts by 29 years? Because we are that close to one of our great scientists, now a sen- a new century, the year 2000 A.D. ior citizen, Dr. Vannevar Bush, who This gets me to some extent into the for 60 years participated in, and business of making predictions on se-

2 CHALLENGES TO CREATIVITY

rious matters. Perhaps you have heard from Svta Barbara to Los hgeles to the nuclear physicist’s definition of an San Diego and the Mexican Border. optimist-“someone who still believes The area from Chicago to Pittsburgh the future is uncertain”? and north to include Detroit, Toledo, Toward the close of Thomas Jeffer- Cleveland, Akron, Buffalo, and Roches- son’s life4 am going back many gen- ter will likely contain more than one erations now to 1825-about 10 per- eighth of the US. population. cent of our people lived in cities and These three areas will contain nearly towns. By 1960-some 135 years later one half of the total US. population, --some 70 percent of the population including the overwhelming majority lived on 1 percent of the land-in cities of the most technologically and scien- and towns. The remaining 30 percent tifically advanced, and the most pros- lived on 99 percent of the land. By perous and creative elements. 2000 A.D. 90 percent of the American people will live in urban areas on less Increased Productivity and than 2 percent of the land (excluding Some of Its Effects the new State of Alaska). Fortunately, much of the Nation will still be rela- Accompanying and contributing to tively open area. The chief effect of the expansion in population and urban- these changes will continue to be, as it ization have been spectacular increases is now, the necessity to adjust to mass in productivity-on the farm and in living in large urban areas. the factory, in transportation and com- In 1935 the population of the United munication, and in health and recrea- States was approximately 127 million. tion. We have contrived to produce the Now we are a nation of some 200 mil- products required to meet the needs of lion. In the year 2000-if present our society through the skillful appli- trends continue-we may have a popu- cation of resources and inventions and lation of more than 340 million. The through the liberal use of the raw ma- economic and social consequences of terials of the world. Today 5 percent our population growth will multiply of our people grow more than enough our responsibilities for providing food food for all the rest. and shelter by geometric progression. Much of the society that we know is There will be heavy concentrations a product of the scientific revolution of people on the Atlantic and Pacific which is in full tide over much of the coasts within 50 to 100 miles of the world: in communications, nuclear oceans. The population of the Atlantic power, medical care, increased produc- seaboard today from Boston through tion of food, and a seemingly limitless Washington is upwards of 27 million. number of additional achievements. Bureau of Census projections show an In the United States the number of increase to over 60 million along this professional manpower made up of sci- 400-mile strip by 1990. An equally entists, engineers, and teohnicians is massive metropolitan area is foreseen larger than ever before. In the 1960’s for the 200-mile Pacific coast zone they numbered nearly 2 million; in the

3 CHALLENGES TO CREATIVITY

1970’s their number will climb to 4 population accelerates the depletion of million or more. our natural resources and increases the But these figures do not tell the pollution of our environment. Re- whole story. It is, and will be, the role source depletion and pollution, in turn, of the scientists and engineers to dis- have been important factors in increas- cover and develop; it is, and will be, ing business costs. the role of others-no doubt most of The most careful planning; the you in this room-to understand the highest degree of cooperation between implications of these developments for business, government, and labor; and both public and private benefit. the greatest ingenuity of our scientists That is the challenge, as Dr. Jerome and engineers will be necessary to re- B. Weisner of the Massachusetts Insti- solve these and the many related tute of Technology has said and I social, environmental, and economic quote : problems. Although most of us appreciate the individual creations of science for what they per- Defining National Purposes mit us to do, we do not fully comprehend the fundamental change that the scientific and Goals revolution has brought about. . . . Our only hope lies in understanding the forces at Our future will turn on reassessing work, and then trying to guide the evolu- and redefining our national priorities. tionary process more to our liking. You will live increasingly in an econ- In commenting on today’s high omy of priorities and of agonizing standard of life in the United States choices between public purposes and and in words sin’plarly appropriate to private preferences. Unless some magic this occasion, Dr. Weisner has also step is taken to achieve a national con- said : sensus as to our paramount purposes and goals the challenge of priorities I’m not sure we’re all that much happy for having this degree of affluence. It may very will be one of the greater historical well be that the young will teach us some- tests of our political machinery. thing about this; it is one of their sermons We must close the gap between the to us. There are other things in life. two cultures, the scientific and the hu- If I were asked-what is the central manistic. We can no more leave aspect of concern today and tomorrow science entirely to the scientists than -1 would say it is the change in the we can leave government entirely to scale of movements and the sweep of the politicians. We must comprehend events. This change of scale goes right the scientific environment. We must across the board: from the pace of find ways to make science and public population growth to the increase of policy compatible, not merely as to na- new inventions and new products to tional purpose, but particu1,arly as to a communications to weaponry. working compatibility. Unfortunately, the relentless drive to How else shall we make a contribu- improve our material standard of liv- tion in the fields of weapons control ing at a time of rapid growth in our and disarmament? In eliminating envi-

4 CHALLENGES TO CREATIVITY ronmental pollution? In harnessing our neutral role in American society of energy sources for both human and earlier years. It began to grow. Its pol- industrial needs? In understanding the icies now began to affect economic, requirements of education and voca- social, scientific, and other forces for tional motivation? In meeting the re- improvement. quirements of an exploding population With World War 11, the discovery at home and abroad? In providing the of nuclear fission, and the cold war, rising nations of the world with gifts the Federal Government grew even of technology? more rapidly. The policies of the Fed- These are the questions that face eral agencies as they beoame more in- you now as well as in the next 29 volved with the private sector gave im- years and probably beyond. But I be- petus to the accounting profession for lieve that no problem is more directly developing higher standards of related to the future of our democratic accounting, auditing, and reporting, society than the necessity of attracting and the development of expertise in the’best talent available for the public related fields. Someone said recently : service. That is where you come in. “The accountant should bow to Wash- While a democratic society’s govern- ington three times each morning be- ment is not expected to have a monop cause its laws and regulations have oly of the most able people produced made the profession what it is.” I by that society, it can ill afford to pro- don’t buy that completely but it has vide for the public service an iota less had its effect. than its full share of talent. And this Having become the biggest business applies to all our governments: Fed- in the world, the Federal Government eral, State, and local. looks at accounting as a great deal more than just recordkeeping. Today Challenges for Accountants the needs of the Congress, agency heads, and the public require that High on the list of the requirement accounting be used not only as a tool for unusual talent is the accountant. As for recordkeeping and for the evalua- some of you may know, my organization of recordkeeping, but also as a tion in government-the General tool for management and for the evalu- Accounting Office-is observing its ation of management. Top manage- 50th anniversary this month. The law ment in the Government, including the creating GAO came into being June Congress, had previously emphasized 10, 1921, and GAO opened for busi- how well the agencies controlled and ness the following July 1. Between the spent their appropriations. It is now time that GAO started and World War equally, or even more, interested in 11, many circumstances profoundly af- knowing how efficiently the managers fected the environment in which the perform. Are programs achieving their accounting profession developed. The objecltives? Are better alternatives depression of the 1930’s had forced the available? Because of this emphasis on Federal Government out of its more more efficient management and pro-

5 CHALLENGES TO CREATIVITY gram evaluation, staff members of the of its physical work; in organizations GAO have increasingly developed their that now use teams of specialists to capability in these fields. measure and evaluate performance in I believe that there will be even rapidly shifting circumstances, it greater challenges to creativity in the seems clear that you will be called future than there have been in the past upon to be far more innovative and and that these challenges will include a far more creative than those who have need by the accountant for a greatly come before. It seems clear, in short, expanded body of knowledge. This will that the challenges to your creativity be true for all accountants-those in will be almost endless. the Federal Government, in State and We are standing on the outer edge local governments, in private industry, of that new world of auditing. YOU in public accounting, and in the teach- will soon be deep within it. Do you ing profession. need any further encouragement from The accountant is no longer a book- me? I don’t think so. I think most of keeper, a writeup man, or a tax pre- you are prepared to cope with the un- parer; he is a professional evaluator of foreseen and the unforeseeable. and an adviser to management. As a I was concerned in preparing for professional, he must first obtain, this occasion. I wondered if I could usually from a formal educational communicate a message to you. In case process, a common body of knowledge. I have not let me try once more. Ap- You have reached this point. But, propriate to all I have said-and much throughout his life, he must-like doc- more concise-are these words by the tors, engineers, scientists, and lawyers writer Elting Morison: --continually learn and apply new knowledge as it is discovered. How to give individual men the evidence they need to make sensible judgments about In a society that is moving more and the kind of world they want to live in, and more toward placing human values How to give them the power to make their above the physical and material; in a judgments stick, profession that increasingly uses auto- That is the unfinished business of the next mation and electronics in a great deal third of a century.

6 ROBERT TAYLOR, RONALD FEKETE, ERIC KREBS, AND ANTHONY SALVEMINI

GAO Auditors Help Save a Life

Sometimes in the course of our work people ask us to help them in ways which may be called above and beyond the line of duty. The following is such a story about four New York Region auditors who helped a 6-year old Cuban refugee get the medical attention needed to save her life. This is a true story. However, names and places have been changed to protect the privacy of a minor.

In April 1971, we were reviewing building new lives for themselves and the Cuban Refugee Program (CRP)’ their families in exile. Thus on the in a small New Jersey city located on night of April 27, 1971, with the aid the crest of the fortress-like rocks of of interpreters, we were interviewing the Palisades. Over the past decade the several Cuban refugees at the local town has become a stronghold of free- community action center. At about 9 dom for the Cubans i,n exile. o’clock that night, Mrs. Jose Gomez One of the review segments involved (as we will refer to her), the young interviewing Cuban refugees to learn mother of a 6-year old girl, said that the problems they faced in being reset- she came to talk to “the men who work tled and the assistance they needed in for Congress.” She said that she had a

‘The CRP prwides needy refugees with serv~es serious problem and was desperate for which include cash assistance and welfare services a solution. to those in need; education and health services; and assistance in planning and urdertakmg resettlement Clutching her young daughter in her opportunities. The program 1s administered by the arms, she sobbingly told us that 6 Social and Rehabilitation Service of the Department of Health, Education. and Welfare. months earlier she came to Miami on

Robert Taylor joined the GAO in 1968. He received his Bachelor of Arts degree from Transylvania College, and his Master of Business Administration degree from the University of Kentucky, both with majors in economics. Ronald Fekete joined the GAO in August 1970. He received his Bachelor of Arts degree from Long Island University where he majored in business administration. Eric Krebs joined the GAO in October 1970. He received his Bachelor of Science degree from Union College where he majored in accounting. Anthony Saliemini joined GAO in May 1970. He received his Bachelor of Science- Business Administration (B.S.B.A. ) degree from Manhattan College where he majored in economics.

7 GAO AUDITORS HELP SAVE A LIFE the Cuban airlift without her husband. to us for help. We assured her that we He had been detained in Cuba. At that would try to help her daughter. time she and her daughter registered The next morning, two of us set out with the Cuban Refugee Program for city hall, where we asked the may- which immediately relocated them to a or’s bilingual secretary to help us large city on the west coast of the find out why the girl could not get the United States near rellatives. She was proper medical attention. The mayor’s advised to take her daughter to see a secretary called city, school, and health physician for treatment of a heart con- officials and confirmed the fact that the dition. West coast physicians told Mrs. girl had been referred to the medical Gomez that her daughter’s condition center. Next, she called the csounty wel- was serious and required immediate fare office and found out that under treatment. However, because the ex- the Cuban Refugee Program both ’ citement caused by any recurrence of mother and child were entitled to the the recent earthquake could overtax medical assistance which they had the girl’s weak heart, the doctors also been refused. As a bewildered and advised her to take her daughter out of frightened refugee who had in a short the area. Consequently, Mrs. Gomez time entered and traversed a strange borrowed money from her relatives so land, Mrs. Gomez had nolt presented that she and her daughter could fly to the medical center with the medical the east coast. card which would have entitled the After they arrived there, Mrs. hospital to reimbursement for the med- Gomez tried to enroll her daughter in ical services provided to the child. a local public school. As a prerequi- That same morning we went back to site, the little girl was sent to the local the community action center and ar- health clinic for inoculations and a ranged to have a bilingual social health examination. The physicians re- worker accompany Mrs. Gomez, her fused to inoculate her since this might daughter, and medical card to the endanger her heart. They recom- medical center. We felt that Mrs. mended that she go to a large, well- Gomez, who did not speak or under- known medical center, located in the stand English, should have an inter- area, for treatment of the heart condi- preter accompany her to make sure the tion. hospital officials fully understood her Mrs. Gomez told us that the medical simtuation. Later that afternoon the center refused to admit her daughter three of them went to the medical because she had no money. Instead, center which agreed to ad,mit the child they sent her to another hospital in the after she was examined by a group of area with the same result. She was ad- hospital specialists. vised to return to the city health clinic On May 24, 1971, the girl under- which again sent her to the medical went a successful open heart operation center which still refused to admit the and is now on the mend. child. Finally, in desperation, she came We consider our review a success.

8 DEAN K. CROWTHER AND J. WILLIAM GADSBY

Effective Surveys: Key to Productive Audits

Preliminary survey work is a vital phase of all GAO audit work. This article presents a step by step description of the survey phase of a review of a complex scientific research program of the Atomic Energy Commission.

A large pavt of the work of the Gen- committee, the Joint Committee on eral Accounting Office oansists of mak- Atomic Energy. The pressures of con- ing reviews of the programs of Federal gressional requests with tight dead- agencies. Whether initiated by GAO or lines, together with dealing with a the Congress, such reviews often in- highly technical and scientific subject clude evaluations of the effectiveness matter managed by competent manag- of management in administering rather ers in both fin.ancial and scientific complex programs that are difficult to fields, creates, in part, an illustration assess or measure in terms of end re- of the challenge of such an assignment. sults. AEC program manzgement has re- The GAO staff assigned to the audit sponsibility for administering and con- of activities of the Atomic Energy trolling about $2.5 billion of public Commission (AEC) , Germantown, funds each year. The programs are di- Md., enjoy a somewhat unusual chal- verse and involve both the military lenge in an area with diversified and and civilian sides of the Government. complex work assigniments. They also The programs also involve research enjoy a rather close working relation- and production activities carried out ship with the congressional oversight in-house and under contract. Such a

Mr. Crowther is an associate director of the Civil Division responsible for the coordination of health reviews performed by GAO. He joined GAO in 1955 and holds B.C.S. and M.C.S. degrees from Benjamin Franklin University. He is a CPA (District of Columbia). Mr. Gadsby is a supervisory auditor in the Civil Division and is currently assigned to the House Committee on Interstate and Foreign Commerce. He joined GAO in July 1963 after graduation from the University of Rhode Island. Both Messrs. Gadsby and Gowther were assigned to the review of AEC operations prior to their current assignments.

9 EFFECTIVE SURVEYS: KEY TO PRODUCTIVE AUDITS

challenge requires the development of The Biology and creative new ideas and audit tech- Medicine Review at AEC lliCpS. On April 16, 1969, the Comptroller This case history was prepared in General issued a report to the Joint full recogni,tion of the value of a sur- Committee on Atomic Energy entitled vey and the inherent requirements for “Administration and Management of per,forming it well so that the results the Biology and Medicine Research will provide a basis for sound judg- Program” by the Atomic Energy Com- ments of areas to be reviewed. While mission. The review was carried out at this survey has certain unique features six AEC contractor-operated laboratories and included an examination of regarding subject matter, timing, and several broad activities related to the organizational relationships with AEC conduct of the program. An extensive and the Joint Committee, it probably amount of ooordination was required has all the salient features needed to to insure that similar information was demonstrate a successful survey. developed at all locations.

AEC Photo Staff members of AEC‘s ultrastructural anatomy laboratory, operated by Oak Ridge Associated Universities, Inc., study an electron microscope autoradiograph for human body tumors.

10 EFFECTIVE SURVEYS: KEY TO PRODUCTIVE AUDITS

A discussion follows of the team ef- would enable them to make a judg- fort of the GAO staff at the AEC audit ment regarding the adequacy of the site and members of the GAO regional program's management and provide a office staffs from Chicago, Cincinnati, basis for determining to what extent Los Angeles, New York, and San Fran- the program should be examined dur- cisco. ing the authorization hearings. Obviously the time available for per- Initiating the Survey forming the review and preparing the report was limited in comparison to The AEC has broad and diversified the amount of work involved. There- responsibility which places a heavy fore, we immediately established some burden upon the Joint Committee in milestone dates to give us an indica- its congressional oversight role. Conse- tion of how much time could be made quently, with limited time each year available for the different phases of the for program reviews during authoriza- work. During the first month and a tion hearings, the Joint Committee half, from June 15 to August 1, 1968, holds hearings only on selected pro- the Washington staff was to (1) per- grams of importance during a given form survey work at AEC Headquar- year. ters to establish its role in managing During a meeting with the staff of the program and (2) determine at one the Joint Committee on Atomic Energy contractor-operated laboratory how the on May 28, 1968, John T. Conway, the program was being managed at that staff director, asked GAO to review the level. Also, survey work was to be overall management of AEjC's biology performed at the National Institutes of and medicine research program, in- Health and the National Science Foun- cluding the coordination with other dation to establish how their biology Government agencies supporting simi- and medicine programs related to lar research. Mr. Conway indicated AEC's program. that he would like a report for use The next 31/2 months, from August during the hearings planned in connec- 1 to November 15, would be devoted tion with the authorization of AEC's to conducting the necessary field work fiscal year 1970 budget to be held to complete both the survey and the early in calendar year 1969. detailed review phases of our work. The Joint Committee had been con- The decision was made that the survey cerned about the biology and medicine should be comprehensive, but that it program since its budget had been in- had to be completed in September. Im- creasing for the past several years and mediately fol1,owing completion of the the fiscal year 1969 level was about survey, a meeting would be held dur- $90 million. Also, the Joint Committee ing the first week of Octaber between had been concerned about certain as- the Washington staff and the field su- pects of the program's management. pervisors from the participating re- Our job was to provide the Joint gional offices to discuss and evaluate Committee with the information which the survey and determine the areas to

11 EFFECTIVE SURVEYS: KEY TO PRODUCTIVE AUDITS be included in the detailed review. On mation to enable us to prepare mean- June 13 a letter was sent to the manag- ingful survey guidelines. ers of the participating regional offices We learned that the AEC biology informing them of our plans. and medicine program is very compre- From June 15 through July 20 the hensive and includes both basic and biology and medicine program yas applied research, primarily in the surveyed at AEC Headquarters. The areas of the effects of radiation on Washington staff met with officials re- man and his environment. Generally, sponsible for the various aspects of the each laboratory has one or more radia- program and discussed the organization sources, considerable equipment, tion as well as the specific policies and and many animals raised under con- procedures used to manage the pro- trolled conditions for use in perform- gram. We also met with representa- ing experiments. tives of the National Institutes of Early in the survey, we recognized Health and the National Science Foun- the challenge and the complexity of dation to discuss the nature of their reviewing the organization and man- programs and the coordination which agement of suah a scientific program, existed between them and the AEC. and therefore, it was necessary to es- Also, we viewed a number of AEC tablish survey objectives and parame- films which showed highlights of the ters before initiating the field survey. biology and medicine program at sev- On August 1, Dean Crowther, the eral laboratories. This provided famil- assistant director, advised the partici- iarity with the types of facilities used pating regional offices that we had in the program and the terminology completed the survey at Headquarters used by the scientists. and preliminary guidelines would be At the end of this 5-week period, we sent out shortly to assist the regional had a good understanding of the man- office staffs in initiating their part of ner in which the program was admin- the survey. Also, he discussed the istered from the AEC Headquarters problems which might be encountered level and how it was coordinated with as a result of the limited time available similar programs of other Government and indicated that the final survey agencies. guidelines would be sent out as soon as Argonne National Laboratory, lo- they were completed. cated near Chicago, Ill., was selected One of the problems encountered in as the site for the laboratory phase of the early stages of the survey was that our survey. From July 22-26, the each laboratory was organized and Washington staff together with the managed differently. Some laboratories Chicago Regional Office staff discussed had structured organizations while oth- the management of the biology and ers were quite unstructured. Although medicine program with various labora- the stated lines of responsibility in tory officials. At the conclusion of the structured organizations were clear, we laboratory phase, we had gathered a soon found that scientists tend to oper- sufficient amount of background infor- ate independently of the formal organ-

12 EFFECTIVE SURVEYS: KEY TO PRODUCTIVE AUDITS ization to a large extent, particularly guidelines were sent to the participat- in those cases where there was an emi- ing region'al offices. The accompanying nent scientist at a laboratory. transmittal letter indicated when the The absence of actual authority Washington staff would make its first within the organization and manage- site visit and stressed that as much ment structure seemed to exist to the work as possible should be done in greatest extent in the areas where there each survey area prior to that date. It was a predominance of basic research. also indicated that a meeting would be Recognition of these kinds of prob- held in Washington during the first lems was helpful in understanding the week of October for the staffs of the need for close communication with re- participating regional offices to discuss gional offices performing the work in the progress of the survey and to de- order to obtain uniformity in a review termine which survey areas should be of such diverse organizations and man- examined during the detailed review. agement. Separate guidelines were also pre- On August 22, the final survey pared for use in performing further

AEC Photo In Brookhaven National Laboratory's plant radiobiology laboratory the egects of varying doses of radiation on plant materials are studied both on the macroscopic and microscopic scales. Such studies can lead to an increase of our knowledge of plant genetics and the mechanisms of mutation production.

13 EFFECTIVE SURVEYS: KEY TO PRODUCTIVE AUDITS survey work at AEC Headquarters, the munications and high motivation are National Institutes of Health, and the always a challenge to be mastered in National Science Foundation. order to get the most out of a job. With the preparation of the survey guidelines, we believed that we had laid the groundwork for a successful Terminating the Survey survey. The Washington staff contacted the regional office staffs during September Conducting the Survey 2&26 and made a deter'mination as to how much progress had been made in From September 4-25, representa- covering each of the survey areas. tives of the Washington staff visited Considering the time restrictions, it each audit site to discuss the survey was decided that sufficient work had guidelines, review the progress of the been performed to permit an adequate work, and reaoh agreement on the evaluation of each survey area re- objectives and approach for the work quested by the Joint Committee. to be performed before the October On September 27, we discussed the meeting. progress of the survey and our planned Throughout the conducting phase of approach to the detailed review with the survey, detailed progress reports the staff of the Joint Committee. The were received and frequent telephone committee staff made several sugges- conversations were held with repre- tions concerning the areas to be inves- sentatives of each field staff to resolve tigated which we incorporated into our minor problems and provide the neces- guidelines. Agreements with congres- sary coordination to insure that the sional committees aTe often compro- various staffs were approaching each mises in terms of both scope of work survey area on a consistent basis. and the time to be devoted to the job Site visits together with the detailed since it is impossible to review a broad progress reports and telephone con- area in detail in a short period of time tacts provided excellent mechanisms as is quite often requested. for controlling and coordinating the We informed the committee staff of survey so that all the objectives could the planned meeting with our regional be accomplished. Of all the factors which influenced office staffs and invited them to speak the survey the one which greatly en- to the group. We indicated that this hanced its conduct was the close per- would give our staff better insight into sonal working relationship with the the committee's specific interests and various audit groups working at each the personal contact would provide ad- location which resulted in motivation ditional motivation in performing the and interest on the part of all partici- review. The staff members accepted pants. We were fortunate in having our invitation. good staff, but in any complex review After our discussions with the re- carried out in several locations, com- gional office staffs and the staff of the

14 EFFECTIVE SURVEYS: KEY TO PRODUCTIVE AUDITS

Joint Committee, we were ready to "he regional office staff heard pres- evaluate our survey work. entations from and had discussions with Dr. Spofford G.*English, AEC's assistant general manager for research Evaluating the Survey and development, and representatives from the Division of Biology and Med- From October 14we met with rep- icine. AEC's controllm, John Abba- resentatives of each participating re- P. gional office. Because of the time limi- dessa, also presented information re- tations confronting us, we did not ask garding budgeting $or various programs and activities. the regional office staffs to prepare a survey report or summary to serve as As indicated earlier, the regional office staffs had discussions with a basis for discussion. In situations Wil- where time permits, however, such a liam T. England, staff counsel, and document could serve as an effective John B. Radcliffe, technical consultant, basis for discussion. to the Joint Committee regarding their During the meeting we discussed opinions on prolblms in the biology and evaluated each survey area by and medicine program and the role of having the responsible regional office the committee in overseeing the pro- staff member present the results of his gram. work and give his evaluation of its The discussions with both the AEC potential for detailed review. The ques- and Joint Committee representatives tions raised and the observations made provided positive motivation for all by each regional office staff member, staff members attending the meeting based on his own experiences, gener- since it enabled them to obtain a first- ated considerable discussion and con- hand impression of the manner in tributed significantly to a better under- which the program was managed from standing of each survey area. The dis- AEC Headquarters and evaluated by cussions also provided insight into the Joint Committee. many of the problems that might be By October 4, decisions had been encountered during the detailed review made regarding the areas to be cov- and enabled us to discard inappro- ered during the detailed review, the priate audit approaches. objectives of the work in each area After the discussion of each survey and the approach to be taken to area, we jointly established our objec- amomplish these Objectives. At the tives for the detailed review and devel- conclusion of the meeting the regional oped a detailed audit program to offices were provided with copies of accomplish these objectives. Also, we the detailed audit guidelines developed sh,owed several AEC films pertaining during the meeting with the under- to the conduct of its biology and medi- standing that the finalized guidelines cine program at several laboratories so would fallow soon after. that the regional office staffs could The desirability of such a confer- become familiar with the programs at ence under the cirmmstances cannot different locations. be emphasized too strongly. If prop-

15 EFFECTIVE SURVEYS: KEY TO PRODUCTIVE AUDITS erly planned and executed such a meet- Congressman Chet Holifield of Califor- ing will assist in molding the group nia, discussed several of the matters into a team with uniform objectives. It presented in the report with AEC serves to motivate each staff member officials. Also, he stated that because of to think creatively and use his own the importance he attached to the re- initiative to a greater degree. Also, it port, he had written to the Chairman provides for a mutual understanding of the AEC and asked him to give of the nature of the job, a personal personal attention to the matters dis- acquaintance and identification with cussed in the report. the staff of the cognizant congressional Since the report was published, AEC committee, and exposure to the agency has implemented our recommendations program managers. which were directed toward areas such as irnpmving the system for establish- Subsequent Events ing priorities for the seleotion of specific research projects. In a letter to Subsequently, all areas agreed upon the Joint Committee dated March 2, during the October meeting were ex- 1971, AEC indicated that the GAO rec- amined during a very detailed and ommendations had served to focus in- elaborate review which resulted in a creased emphasis on areas impontant report to the Joint 'Committee on to the management of the program, Atomic Energy on April 16, 1969. Be- and the cooperative efforts of AEC and cause we believed that the report laboratory management in implement- would be of general interest, we re- ing these recommendations should requested and obtained permission of the sult in improved management. committee to distribute the report to Whether our work and the agency's the Congress as a whole and the gen- actions that follow to improve the eral public. management of a program can be Many ,of the areas discussed in the properly considered a success is a mat- report were used by the Joint Commit- ter of judgment. However, the basic tee as a basis for questioning officials issue here is that any success in terms of AEC's Division of Biology and of reporting or achieving corrective Medicine during bhe hearings on action in a complicated research area AEC's budget request for fiscal year is attributable in a large part to the 1970, which were held in April 1969. effective management and timely com- The chairman of the committee, pletion of a survey.

16 Often cited, by auditors anyway, is the identity of two of the worlds biggest liars. One is the auditor who upon arrival informs a management oficial that he is there to help him. The other is the same management oficial who responds that he is glad to see the auditor. In this drawing, staff members Marvin Doyal and Mark AbJes of the Dallas Regional Ofice depict their version of a Federal agency oficial’s vim of the GAO auditor who has just arrived and advised that he is there to help him.

17 ZANE GEIER

GAO’s Role in ttie C-5A Saga

The following paper discusses the origin of GAO’s present reviews of major weapons acquisitions and summarizes the results uf several major reviews of the controversial C-5A aircraft program.

The acquisition of weapons for mili- congressional hearings by the Subcom- tary forces is one of the most complex mittee on Economy in Government of technical-eoonomic-political processes the Joint Economic Committee, under ever evolved. The sheer size and com- the chairmanship of Senator William plexity of the system boggles the mind. Proxmire of Wisconsin, focused atten- Changes and refinements have been tion on a large cost overrun in the going on since the Continental Con- C-5A aircraft program and on cost gress first provided money to buy ri- overruns in all weapon systems. These fles for Washington’s troo,ps. But hearings and others like them received recent economic and political pressures a great deal of public attention and have increased national interest in the quickened the interest of the Congress defense acquisitlon process. in dealing more effectively with rising At the behest of the Congress, GAO expenditures for weapon systems pro- has embarked on a program to better curement because they represent such identify and report problems in the a large chunk of the national budget. acquisition process and to recommend The problems of the new C-5A improvements. In so doing, reviews cargo plane and its cost history were are being made of a host of major well publicized in the news media. The weapons acquisitions, including the giant transport became a cause celebre controversial C-5A aircraft. for congressional and public critics. The cost of the program was expected The Year of the Cost Overrun to overrun the original estimate by more than $1 billion; prominent De- In the first half of 1969 a series of fense Department officials were

Mr. Geier is an audit manager in the Atlanta Regional Officet. He has been with GAO 20 years and has served in Europe and South America as well as in Atlanta. Mr. Geier was educated at the University of Alabama, Georgia State University, and Harvard University. He is a member of the Federal Government Accountants Associa- tion, the American Society for Public Administration, and the National Contract Management Association. GAO’S ROLE IN THE CSA SAGA accused of suppressing information port to be made periodically to the about the C-5A cost overrun; and the Congress. The report would include in- main contract was found to have a re- formation such as estimated and actual pricing clause providing a “reverse in- costs, underruns and overruns, deliv- centive” for cost reduction in certain ery data, progress payments, perfom- circumstances. ance standards, and impact of contract This case had considerable impact changes. The committee went even fur- on the rising demand for more and ther and recommended that GAO ex- better information on defense procure- plore the feasifbility of making its own ment for all Members of the Congress independent estimates of what contrac- as well as the public. Congressional tors’ costs should be. committees and individual Members The Comptroller General’s response asked GAO to do more checking and was to advise the chairmen of the reporting on costs and performance of Committees on Armed Services and the defense weapon systems, particularly Joint Economic Committee that GAO the C-5A. would increase its review of defense In June 1969 GAO reported to cer- procurement by adding more employ- tain key congressional committees on ees in this area. A major new operat- the causes of cost increases in the ing group within the GAO was cre- C-5A. GAO found that a major rede- ated to review major weapon systems sign effort to control weight, reduce acquisitions. It is headed by a senior drag, and beef up the wing had im- associa,te director within the Defense pacted heavily on all elements of cost; Division and is staffed by some of the initial cost estimates were overly GAO’s best, most experienced men. optimistic; and inflation in the aero- The Comptroller General established space industry, due largely to the back- three objectives for the new group: log of orders created by the war in Southeast Asia, increased costs across -Furnish data on individual the board. GAO noted that Air Force w-eapon systems to the Congress studies as early as May 1968 showed that will be useful in its authori- that C-5A contract costs at completion zation and appropriation proc- would be in excess of ceiling prices. esses. Later, in May 1969, Air Force stud- -Provide an annual report on the ies showed that Lockheed would incur status of major acquisitions. a loss of about $285 million on the -Evaluate the fundamental manage- program but Lockheed estimated its ment concepts and processes used loss to be only $13 million. by DOD in determining the need for and in acquiring major weapon systems. New Role for the GAO GAO’s first report, a summary and The Joint Economic Committee rec- 10 supplements with classified infor- ommended that GAO develop a mation on specific systems, was issued weapon systems acquisition status re- in February 1970. Essentially, it was a

19 GAO'S ROLE IN THE C-5A SAGA status report as of June 30, 1969, on formance. We also reviewed some of over 50 weapon systems and was based the key decisions made by the system mainly on the selected acquisition re- managers and tested the quality of the porting system of the Department of data on which these decisions were Defense. It showed that cost growth based. had occurred on most systems-aver- The production phase of the C-5A aging about 50 percent higher than acquisition cycle started in December original planning estimates; perform- 1969. General Electric Company builds ance objectives were not being attained the engines and Lockheed builds the on a large number of the systems; airframe and produces the integrated and, schedule slippages of from 6 system, including support and spare months to 3 years were being experi- parts. enced on many systems. This work Generally, we found that the C-5A paved the way for a more penetrating has experienced shortfalls in all three review of the underlying causes of principal indicators-cost, schedule, these conditions and a look at the and performance-mostly on Lock- acquisition process employed at all lev- heed's part of the program. els of the Department of Defense. Cost-wise, the original Air Force estimate in 1964 for 120 planes and The C-5A Acquisition Process spare parts, the one used to sell the program to the Congress during the In 1970 we examined into how well concept formulation phase, was $3.4 the system managers on the C-SA had billion. At June 30, 1970, 6 years later, complied with the Department's cri- the Air Force estimated the C-5A sys- teria in advancing the system from one tem to cost $4.6 billion, but for only phase to another. The Department has 81 planes. Thirty-nine planes were cut prescribed criteria that should be met from the program as an eoonomy before a system is allowed to proceed measure. More significant is the differ- from concept formulation to valida- ence between the 1965 estimate of tion, or from development into produc- $31.8 million a plane and the Fe'bru- tion and so on. The five phases are: ary 1971 estimate of $61 million a --Concept formulation. plane. -Validation and ratification. Schedule-wise, the C-SA has not met -Development . certain key milestones. For example, -Production. the first operational aircraft was to -Deplo pent. have been delivered in June 1969; it We identified some of the major was actually delivered in December problems that had occurred at various 1969. The last production aircraft, No. phases of the C-5A life cycle and ex- 120, was to have been delivered in amined into their causes. These prob- April 1972; now the last production lems were also analyzed in terms of aircraft, No. 81, is expected to be de- their effect on cost, schedule, and per- livered in February 1973. The testing

20 GAO’S ROLE IN THE C-5A SAGA program is far behind schedule. Two cost-type with extraordinary finan- aircraft have been lost due to fire. cia1 relief. Performance-wise, the C5A has The big decision during the contract fared somewhat better. Speed, engine formulation phase was to use the total thrust, and takeoff and landing dis- package procurement concept; that is, tances are within initial target esti- separate fixed-price-incentive contracts mates, but the plane is somewhat over- with Lockheed and General Electric weight and this has reduced its range for the entire program covering over 8 slightly. Cracks have occurred in the years of work and including all devel- wings. While these are being fixed and opment, testing, production, and sub- the wing design is being completely stantial system support, such as spare tested, certain limitations have been parts and equipment. This was the placed on operational use of the air- largest aircraft “package” ever craft. Problems have also been encoun- awarded by the Air Force. tered in certain important subsystems, particularly in the avionics area. For The theme for contract administration under the total package concept example, serious problems have been was disengagement; that is, the cus- encountered in the multimode radar tomary Air Force approvals were re- and in certain navigation equipment duced and greater reliance was placed that have caused development work to on arm’s-length surveillance over con- be extended although the plane itself is tractor activities. now in full-scale production and some have been delivered for operational The concept, embodied in the con- use. tract, provided for Lockheed to design, develop, and ‘build the plane in accordance with certain firm performance Some Big Decisions commitments; that is, it would weigh so much, fly so far, at a certain speed, We looked at a few of the key man- with a specified payload, and so on. agement decisions that have had such Although the plane was very large and a profound effect on the C-5A pro- included many sophisticated features gram. Some of the key decisions were: and subsystems, the plane was sup- -Use of the total package procure- posed to be within the “state of the ment concept. art” but the design was not firm. The -Exercising of a contract option in contractor was expected to manage the January 1969 to buy the second program as he saw fit, with minimum production lot, referred to as run involvement by the Air Force, as long B. as the contractor met the performance -Reduction in the contract buy in requirements and delivered on time. November 1969 from 120 to 81 Subsequent events have shown that planes. the main weakness in the total package -Recent restructuring of the con- procurement concept used on the C-5A tract from fixed-price-incentive to was its application on too big a finan-

21 GAO’S ROLE IN THE C-5A SAGA cia1 package, over too long a period of cost of the increment then on contract time, with insufficient provision for -five development and test airplanes trade-offs of cost, schedule, and per- and 53 production airplanes referred formance when problems arose. Lock- to as run A-was estimated to cost heed lays much of the blame for its $2.4 billion, or almost $1 billion over near financial disaster on the C-5A the contract target cost. program to the total package procure- But the Air Force exercised the con- ment concept. tract option for run B anyway, because Another big decision was made in --It needed the planes. January 1969 when the Air Force ex- -Time was about to expire under ercised the option under the contract the option. to buy the second production lot, -If it did not exercise the option, known as run B. At that point in time Lockheed faced the prospect of fi- both the Air Force and Lockheed knew nancial disaster. that the C-5A program was in big troubIe, cost-wise. In fact, in hearings Congressional and public interest in before the House Armed Services the C-5A cost overruns continued to Committee in June 1969 concerning mount in mid-1969. Attempts to cut the C-5A program, the Comptroller the C-5A program back were debated General testified that an Air Force in the House and the Senate and were study in October 1968 showed that the unsuccessful. The majority apparently

Lockheed-Georgm Company Photo With a length of 248 feet, a wingspan of 223 feet, and a height of 65 feet over the tail, the C-5A is the world‘s largest airplane.

22 GAO'S ROLE IN THE C-5A SAGA viewed the C-5A as essential to na- would otherwise have been decided in tional defense. favor of the Air Force. Nevertheless, cuts in the defense What caused these problems and budget for fiscal year 1970 forced the shortfalls in the C-5A system? Were Air Force to reduce the program. Con- they the fault of the acquisition sequently, in November 1969, the con- process? We believe they were, in tract was amended and the total buy large measure. This is so because we was limited to 81 airplanes. have found that similar problems have The effect of the reduction on Lock- occurred on other programs of compa- heed was most severe. Lockheed was rable size and complexity-as, for ex- already in trouble on some of its other ample, the F-111 aircraft. Government programs and large A GAO staff study on the C5A amounts of funds were tied up in acquisition process, issued in March pending claims. Also, several large 1971, stated that the system shortfalls items were in dispute on the C-5A occurred because of failure of the De- program. These disputed items in- partment of Defense and the Air Force volved repricing provisions of the con- to observe and satisfy certain funda- tract concerning the exercising of the mental criteria before proceeding from option for run B, the decision to pur- one acquisition phase to another. Some chase only 23 of run B planes, the of the major areas of weakness noted effect of economic escalation, and and discussed in the report were: correction of deficiencies. -Underestimation of costs and de- Lockheed's board chairman, D. J. velopment risks accompanied by Haughton, placed the value of the dis- the application of a new and un- puted items on the G5A program tested procurement system which alone at over $400 million. In Maroh restricted trade-offs in cost, sched- 1970 he appealed to the Department ule, or performance. for special financial relief. He said -A compressed schedule which was that, since prompt negotiated settle- further tightened causing concur- ment of the disputed claims was not rency in development and produc- likely, there was a critical need for tion. interim financing if Lockheed was to -Lack of cost-effectiveness studies continue performing. Negotiations led at critical decision points. to agreement in January 1971 to -Procurement of a larger aircraft convert the C-5-4 contract to cost-type than required. with the Air Force providing all the -Insufficient testing of aircraft design prior to award of contract. funds necessary to complete the program. We estimated that this action The staff study also showed that the added about $496 million to program Air Force was accepting G5A aircraft costs based on the assumption that all with major deficiencies in the wings, disputes and disagreements existing landing gear, and avionics. We found between the Air Force and Lockheed that numerous deficiencies in the first

23 GAO’S ROLE IN THE C-5A SAGA

15 operational aircraft restricted their 1972 in order to complete the pro- performance to Basic cargo operations gram. only; the C-5A cannot perform its tac- Public Law 9141 stated that no tical mission until certain deficiencies part of the contingency fund could be are corrected. We also observed that used for: the contract required Lockheed to -Direct costs of other contracts. correct the deficiencies at no cost to --Interdivisional profits. the Government. But to delay accept- -Bid and proposal, independent re- ance of the planes to correct the defi- search and development, and simi- ciencies would have had an unfavora- lar costs. bIe financial impact on Lockheed, at a -Depreciation and amortization time when Lockheed’s financial ability costs. to complete the program was in jeop- ardy. It required that a special bank account be established from which the contractor may withdraw funds subject to ap- More Money proval by the contracting officer. It but Tighter Controls also empowered Defense to make such other restrictions as it saw fit. In its fiscal year 1971 budget request, Defense was faced with the em- But more significantly, from GAO’s barrassing prospect of having to ask standpoint, the public law required au- the Congress for additional funds to dits of payments from the special bank cover the massive cost overrun. The account by both the Defense Contract Air Force was faced with the prospect Audit Agency (DCAA) and the GAO. that the ceiling price of the contract The Comptroller General was required would be reached in early 1971, yet to submit quarterly audit reports to only 30-plus planes would have been the Congress. GAO has been working delivered. Additional funds were re- closely with DCAA in structuring an quested to permit uninterrupted per- audit program that minimizes dupli- formance while contract disputes were cate effort, yet is mutually satisfactory. being settled and the contract was being restructured. GAO Looks at Lockheed’s After considerable debate over the Financial Capability merits of the request, on October 7, 1970, the Congress authorized, in In September 1970 Senator Prox- Public Law 9141, a special $200 mire and Senator Richard S. Schwei- million contingency fund to augment ker of Pennsylvania asked GAO to ex- procurement in fiscal year 1971, but amine into Lockheed’s financial capa- imposed certain restrictions and con- bility to complete the C-5A aircraft trols on its use. An additional incre- program. Congressman William S. ment, variously estimated at between Moorhead of Pennsylvania also asked $500 million and $600 million is ex- GAO for information regarding the le- pected to be required in fiscal year gality of the use of Public Law 85-804

24 GAO’S ROLE IN THE CSA SAGA which authorized extraordinary finan- not guarantee that bankruptcy of cial relief in the settlement of defense Lockheed would be precluded. We contracts. In December 1970, the Dep- stated that, because the full effect of uty Secretary of Defense requested Lockheed’s financial problems asso- GAO to participate in a review of the ciated with the GlOll could not be financial data submitted to Defense by determined, action should be taken to Lockheed in support of its request for insure that additional funds made financial assistance. available for the C-5A will continue to GAO responded on April 12, 1971, be used on that program even in the with a special report entitled “Finan- event of bankruptcy. cial Capability of Lockheed Aircraft We recommended that Defense es- Corporation to Produce C-5A Air- tablish close surveillance over Lock- craft” (B-169300). Special constraints heed’s activities to insure that condi- were placed on our review of Lock- tions which resulted in previous cost heed’s financial data because it em. growth and financial difficulties have, braced all activities, including com- to the extent possible, been corrected mercial, and not just C-5A. and are not likely to recur. We recom- We found that, based upon review mended also that the Department and evaluation of the financial infor- conduct a review of the “should cost,’ mation submitted by Lockheed to the type of Lockheed’s operations concern- Office of the Secretary of Defense, ing the production of C-5A aircraft. Lockheed did not have the financial The purpose of these recommendations capability to complete performance was to give the Government greater under its C-SA contract without finan- assurance that Lockheed’s future oper- cial assistance from the Government. ations are conducted in an efficient and Large financial commitments to other economical manner and that only nec- programs, notably the GlOll com- essary costs are incurred in completing mercial aircraft, had impaired Lock- the C-5A aircraft. heed’s ability to add additional funds to cover the loss on the C-5A contract. A New Ball Game- GAO also reviewed the legislative Cost-Minus-Fixed-Loss Contract history of Public Law 85-804 and found nothing to preclude its use as Under the plan of assistance adopted the basic authority for Defense to mod- by Defense, the existing C-5A contract ify the C-5A contract. The authority was converted on May 31, 1971, to is quite broad and permits contract cost-minus-fixed-loss-type - something modification without regard to other relatively new on the defense pro- provisions of the law relating to con- curement scene. The converted contracts whenever such action is deemed tract provides that the Government will to facilitate the national defense. furnish all funds necessary to complete GAO agreed with the Department of the contract and that Lockheed will ab- Defense conclusion that conversion of sorb a fixed loss in excess of $200 the C-5A contract to cost-type would million. Lockheed will forfeit $100 GAO’S ROLE IN THE C-5A SAGA million already invested in C-SA costs nent place in defense procurement his- which would otherwise have been al- tory. Most will agree that while the lowed; Lockheed is required to repay end product itself-the C-5A aircraft to the Government $100 million, with -has been generally satisfactory thus interest, starting in 1974; Lockheed is far (except for some deficiencies, also required to absorb disallowed which probably can be corrected with costs associated with the contingency enough time and money), the cost has fund authorized by Public Law 9141 been monumental. Public disclosure of -estimated to be an additional $4.8 the C-5A cost overrun, the advent of million. cost-minus-fixed-loss contracting, and The new cost-minus-fixed-loss con- the financial plight of Lockheed-our tract gave the Government a much Nation’s largest defense contractor- greater role in management and con- have been landmark events. From trol of C-5A contract activities. The these experiences it seems appropriate concept of disengagement originally that we sum up the more important employed in administering the C-5A lessons learned. contract has been abandoned. The Air -The concept of disengagement in Force staff at the plant has been in- contract administration has no creased; new, more sophisticated finan- place in extremely long, complex, cial management control systems have and costly system procurements. been adopted. Lockheed has taken ex- In such circumstances the Govern- traordinary management actions to ment has no choice but to become make its operations more economical involved with the contractor in and to otherwise conserve cash. key decisions that significantly impact cost, schedule, and per- Summary formance of the system. -The procurement package must Because of increased public interest not exceed the contractor’s finan- and a congressional mandate, precipi- cial capability. Smaller contrac- tated in large measure by the problems tual increments, such as separate of the C-5A, GAO has undertaken a development and production large-scale review of how the Depart- phases, require less financial risk ment . of Defense acquires major to both the Government and con- weapon systems. The scope of the work tractor. is broad as well as deep. It deals with -The contract should be structured the status reporting system and short- to facilitate trade-offs of cost, falls that have occurred in cost, sched- schedule, and performance when ule, and performance. It deals with the the need arises. broad concepts and principles of the Several useful reports have come out acquisition process at the Defense and of this work, dealing with families of military department levels. systems, specimfic systems such as the The C-5A saga occupies a promi- C-5A, and functional areas within sys-

26 GAO'S ROLE IN THE C-SA SAGA tems, that have 'been well received by tal improvements in the acquisition the Congress, key committees, and process and will provide Congress with Members. Hopefully, as this work con- greater visibility and surveillance over tinues it will produce some fundamen- defense spending.

GAO's Reputation for Objectivity

Since the Congress does not always speak with one voice, the GAO has to serve many masters. There is always the danger of being hurt in the crossfires of political conflict. The GAO practice has been to stick to the facts and stay neutral in politics. Despite occasional carping and criticism, wh'ch every public agency is exposed to, and Congressmen are used to, the GAO has built a reputation for objectivity. This reputation should be jealously guarded.

Representative Chet Holifield of California Speaking at 1971 Annual GAO Awards Ceremony, June 11, 1971.

27 CLARENCE 0. SMITH AND GERALDINE F. JASPER

Using Computer-Aided Techniques in Financial Audit Work

This article identifies and describes the computer-aided techniques used during a recent audit. It also illustrates how the techniques were combined with regular audit procedures to obtain greater confidence and other benefits during the financial audit work.

Today computers are being used for procedures for the analysis of auto- an ever-increasing variety of business mated data processing systems. applications. As each generation of Management is currently confronted computers becomes larger and faster with a staggering increase in the

than the preceding one, very complex amount of paper records and reports I and technical programs are needed to produced by computer systems. Simul- operate the huge devices. These com- taneously, it is being told that those plicated programs represent a substan- records and reports may not accurately tial change in the nature of the normal reflect the financial condition of the paper trail and present a formidable company producing them. As one challenge to the auditor with limited burly programmer stated in the Wull experience in data processing opera- Street Journal, by using the company’s tions. However, recent disclosures in computer, he could steal the company the press of the misuse of the computer blind and leave its books balanced. In by employees of private concerns re- other instances, systems and program- veal a dramatic but practical case for ming personnel, versed in company op- the serious involvement of auditors in erations and the data processing sys- the development of new techniques and tem, have juggled stock purchase

Mr. Smith is an audit manager in the Washington Regional Office. He holds a B.S. degree in accounting from Fresno State College and has been a previous contributor to The GAO Review (“Useful Techniques for Examining Automated Data Processing Systems”-Fall 1969). Miss Jasper is a supervisory auditor in the Washington Regional Office and holds a B.S. degree in accounting from The Pennsylvania State University. Both Mr. Smith and Miss Jasper are working on master’s degrees in ADP at The American University and both are active members of the Federal Government Ac- countants Association.

28 COMPUTER-AIDED TECHNIQUES IN FINANCIAL AUDITS

accounts, extracted corporate cash, and gram by providing a method for audit- shorted inventory accounts without the ing through the computer. For these knowledge of either management or reasons, it was our desire, as the re- the auditor. gional ADP specialists, to assist the For these as well as other reasons, audit staff in using the computer’s ca- the auditor must develop new tech- pabilities to their advantage and to niques and procedures that will help minimize the amount of clerical check- him determine whether the computer- ing and verification work that had been oriented internal controls are effective performed previously. We also wanted and efficient. These new methods the new techniques to have broad ap- should help to assure both manage- plication so they could be used on ment and the auditor that financial other audits. records and reports are accurate. For example, during the 1970 GAO audit Audit Objectives and of the Government Services, Inc. Responsibilities (GSI), we wanted to use new and re- vised procedures to achieve greater The basic objective of the audit was confidence in the audit. In this in- the examination of the corporation’s fi- stance, we desired to develop an audit nancial statements and the expression method that could be used to establish of an opinion on the fairness with the reliability of the financial records, which they presented the financial posi- reduce the number of financial trans- tion and results of operations at the actions to be audited, and improve the end of the calendar year. audit program. These objectives were To perform this work we assumed, not easily accomplished. among other things, that the auditor’s knowledge of the transactions reflected The Problem in the accounts and in the financial statements would be limited to that During past years, the annual audit acquired through the audit examina- had primarily relied on the effective- tion. Therefore, the problem was to de- ness of manual procedures and con- vise an audit plan or program that trols, whereas the GSI accounts were would allow the auditor to establish processed and summarized by com- the reliability of the financial records puter equipment. A recent considera- while at the same time substantially tion of the audit program indicated limit the number of transactions to be that it had become out of date and examined. required the staff to make a large number of onsite revisions to make it usa- The Audit Plan ble. Specifically, much of the prior audit program required the staff to We first divided the work into three audit around the computer rather than phases: a review of the internal con- through it. To resolve this problem, we trols, an audit of transactions, and the wanted to improve the prior audit pro- verification of the existence of assets

29 COMPUTER-AIDED TECHNIQUES IN FINANCIAL AUDITS and liabilities. The division into three computer by employees and the capa- phases was considered to be important bility of the computer to quickly pro- because it assisted in the planning and duce numerous errors amply illustrate direction of the work, allowed each ineffective and inefficient systems of in- staff member to readily understand ternal control. how his assigned work was related to Recognizing the need for good inter- the entire audit, and allowed the staff nal control, we classified GSI’s to take maximum advantage of the accounting operations into five func- computer’s capabilities. tions: management control, data In practice, the review of internal collection and recording, data conver- control differed from regular audit pro- sion, operation monitoring, and infor- cedure because we had to consider not mation and/or check distribution. This only the usual manual internal controls technique helped to serve as a basis but also those built into the data proc- for organizing the work so that no im- essing system by the manufacturer and portant aspect of it would be over- those included in the computer pro- looked. During the audit each function grams. was analyzed to the extent necessary to However, the real difference in our ascertain whether the internal controls program came in the phase involving were effective for their intended pur- the audit of transactions. Here we de- pose. parted from the traditional audit-by- account method. Instead, we decided to The Management Control Function have the staff audit a random selection This function includes all the man- of all the transactions processed dur- ual and computer control procedures the year, a procedure which we ing necessary to assure management that called the audit-by-transaction method. the system performs in the desired In the final phase of our audit we manner and achieves the desired and used traditional verification procedures necessary level of reliability. It is the and only used the computer to save the most important single function in any audit staff time in clerical and verifica- system. tion functions like preparing lists of To effectively evaluate this function assets or liabilities or checking inven- we first identified the flow of financial tory extensions. data through the automated accounting system. This was accomplished by re- Evaluation of the System of viewing the updating system flow- Internal Control charts. The updated charts identified all the sources of financial data origi- Where automated data processing nation and recording; the procedures systems are involved, the need for used to transmit the data to the GSI strong and effective internal controls is main office; the manual procedures just as great, if not greater, than where used to prepare the data for computer the work is performed manually. processing ; the procedures used to Recent disclosures of the misuse of the convert the data into machine-readable

30 COMPUTER-AIDED TECHNIQUES IN FINANCIAL AUDITS

form; the methods used to process the Generally, source data represents the data using the computer; and the na- weakest link in the chain of computer ture and disposition of all computer- processing events. The reliability of produced documents, records, or re- computer equipment is very high and ports. Thus, the updated charts gave us a computer program can usually be an overview of the entire accounting successfully debugged over a short in- system and its operations and served terval of time, but the problem of the as a basis for our evaluation of GSI’s source data is a continuing one. system of internal control. Source data may be in error for one of four general reasons: The Data Collection and -It may be incorrectly recorded at Recording Function the point of origination. This function includes the initial -It may be incorrectly converted to collection of financial data, the record- machine-readable form. ing of the data on a source document, -It may be lost in handling. the procedures and devices used to -It may be incorrectly read when transmit the data from its point of entered into the computer. origination to the Accounting Division, and the procedures used to convert the Therefore, to ascertain the reliability data into machine-readable form. of this function at GSI we tested the

GSI employees and the authors review source program listing. From the left: William Melera, Assistant to the Comptroller, GSI; Tamara Orebaugh, Assistant Data Processing Manager, GSI; and Clarence Smith and Geraldine Jasper of GAO.

31 COMPUTER-AIDED TECHNIQUES IN FINANCIAL AUDITS effectiveness of internal controls at alert operating and managerial officials three different points in the system: to any data processing problems or er- -The point where the data was rors occurring in the system so they originated. can initiate the appropriate corrective action. --The points where the data was manually handled within the or- Our tests of selected reports showed ganization and converted i&o ma- they were quite reliable for their in- chine-readable form. tended purpose and that operating level officials generally initiated quick -The point where the data entered and appropriate corrective action when the computer. these reports brought processing errors to their attention. The Data Conversion Function

This function includes the receipt of The Information and/or data to be processed from the Account- Check Distribution Function ing Division and the computer process- The information distribution func- ing of the data, including the preparation represents the purpose for which a tion of various reports to be distrib- system is designed and operated and uted to management. consists of all reports, documents, and During the conversion function a records, including checks, resulting record could be lost or errors could be from the conversion function. Such made (1) in reading the data by the information may be in the form of input device, (2) in transmitting the printed reports or listings, or may be electronic signal from one computer in machine-readable form such as mag- device to another, (3) because data netic tapes or discs. was not processed, or (4) in wholesale To ascertain the degree of reliability quantities by using the wrong com- that could be placed on the distribu- puter programs or the wrong master tion function, we thoroughly tested the file. We tested the GSI accounting sys- management controls over the data tem to determine whether these types recording, data conversion, and opera- of errors occurred in their system. tion monitoring functions. It was our view that if these other functions were The Operation Monitoring Function reliable, the records, reports, and documents produced by the system had to This function includes a wide vari- be equally reliable. ety of reports directed to various operating and managerial levels of responsibility within the corporation. These Auditing Financial reports are designed to tell them the Transactions accuracy of the data recording and data conversion functions. Thus, the Following our evaluation of GSI’s monitoring function represents a sur- system of internal control we began veillance-type function intended to the preparation of a plan for the selec-

32 COMPUTER-AIDED TECHNIQUES IN FINANCIAL AUDITS

tion of the financial transactions to be processed during the year. Further- audited in detail. more, the reliability of the estimate The prior year’s financial statements can be measured in numerical terms. served as our starting p0int.l If the Another advantage of statistical transactions processed subsequent to sampling is the possibility of obtaining the prior year’s audited balances were better results from examining fewer fi- processed accurately, it seemed reason- nancial transactions. When judgment able that the ending balances the fol- sampling was used the number of lowing year would also be accurate. transactions examined varied depend- This audit-by-transaction method ing upon the auditor rather than upon permitted more efficient use of statisti- the characteristics of the data. How- cal sampling than would have been ever, statistical sampling enables the possible under the traditional audit- auditor to calculate the number of by-account concept. In prior years, the transactions that must be examined in auditors selected from certain accounts order to obtain the precision required judgment samples of transactions to be to meet the audit objective. In the case audited. The samples were based on of GSI, the auditor now examines such factors as the dollar balance in fewer transactions but audits each the account and the account activity. transaction thoroughly. Hence, the proportion of transactions The audit staff wanted to be 95..per- audited varied from account to cent confident that the true error rate account. Although this was an accepta- did not exceed 5 percent of the trans- ble audit procedure, the audit staff be- actions and that the average error did lieved it could be improved upon be- not exceed $25. If the audit of the cause such samples are usually less re- sample transactions disclosed condi- liable for estimation and prediction tions greatly exceeding these toler- purposes than a statistical sample. ances, the audit work must be ex- Under the audit-by-transaction tech- tended and possibly it would be neces- nique, the probability (or likelihood) sary to qualify the opinion on the fi- that a transaction will be audited does nancial statements. not depend upon the dollar balance in With the assistance of statisticians the account(s) or the account activity. in the GAO Office of Policy and Spe- The use of statistical sampling in- cial Studies, a plan for selecting the stead of judgment sampling provides sample transactions was developed. the auditor with a more independent This plan required us to develop esti- and objective basis for his opinion. He mates of the following information: is able to estimate the percentage of 1. The number of financial transac- transactions in error and the dollar tions processed by GSI during a amount of errors for all transactions 1-year period. 2. The range (difference) between ‘An unqualified opinion had been given in thc report “Audits of Government Services, Inc., it8 Em. the dollar amounts of the largest ployee Retirement and Benefit Trust Fund and its and the smallest transactions. Sopplemental Pension Plan, year ended Dec. 31. 1969” (8--114820, Apt. 1. 1970). 3. The distribution of transactions

33 COMFUTER-AIDED TECHNIQUES IN FINANCIAL AUDITS

between these two extremes of approximately similar dollar (e.g., proportion of transactions amounts would be grouped into the that could be classified as small, same stratum. Independent random medium, and large). samples of transactions were selected from the entire group of transactions After analysis of the prior year’s in each stratum. Shown below are the data, we decided to group the transac- strata used, the number of transactions tions into seven nonoverlapping in each stratum, and the number of groups, or “strata.” Thus, transactions transactions audited.

Number of Number of Stratum fronsaetrons in Sfraturn transactions audited $50,000.00 or more ...... 537 ...... 537 10,000.00 to 49,999.99 ...... 1,538 ...... 149 1,000.00 to 9,999.99 ...... 24,755 ...... 241 100.00to 999.99 ...... 89,806 ...... 88 10.00to 99.99 ...... 175,697 ...... 20 1.ooto 9.99 ...... 94,937 ...... 2 Less than $1.00 ...... 34,770 ...... 0 Totals ...... 422,040 ...... 1,037 Since the transactions were recorded the assembly language used on the on magnetic tape, a sampling interval computer at GSI. with a random start was the most We discussed this problem with GSI efficient method of selecting the sample personnel who agreed to write the pro- transactions. Each year new sampling grams for us. However, it was neces- intervals must be calculated and new sary for us to take special precautions random starting points determined so that their preparation of the com- since the number of transactions will puter programs would not violate the vary from year to year. To insure con- principles of good internal control. We trol over the selection process, the sam- wanted to be certain that any improper pling intervals and the starting points or unauthorized financial transactions should not be given to GSI personnel had an equal opportunity to be se- until just prior to processing of the lected in the sample and that the GSI computer programs to select the sam- personnel could not write the special ple. programs in such a way as to prevent After the sampling plan was pre- us from detecting such transactions if . pared there was one additional prob- they existed. Accordingly, we included lem that had to be solved. How do we the following procedures in the pro- prepare the computer programs neces- grams so that the audit staff would sary to implement it? Although we always retain control over the process- could prepare programs in several dif- ing of the programs and the files of ferent computer languages (Le., financial transactions. BASIC, COBOL, FORTRAN, MAD, First, we examined the program ALGOL, and APL/360), we did not documentation to ascertain its compli- have the capability to write them in ance with the sampling plan and also

34 COMPUTER-AIDED TECHNIQUES IN FINANCIAL AUDITS to be certain that no computer instruc- it placed the sample transactions tions had been added or deleted which in the same sequence as they would tend to minimize the statistical were filed. reliability of the results. Following the selection of the sam- Next, we obtained a source program ple it was necessary to develop only listing showing the actual computer in- four sets of audit procedures, one set structions stored in the computer’s of procedures for each book of origi- memory and the sequence in which nal entry, instead of separate proce- these instructions are executed by the dures for each major financial state- computer. The regional ADP special- ment account classification. This was ists compared this listing with the possible because the four books of system documentation to make certain original entry (cash, inventory, vouch- that there were no differences between ers payable, and general journal) the two. The audit staff was of the served as the primary connecting link opinion that such comparisons should between last year’s financial statements be made by a specialist becaufe of the and the current year’s statements. complex nature of the computer in- Thus, all transactions affecting GSI’s structions and the system documenta- account balances were recorded in one tion. of these four books. The processing of these special computer programs provided the audit When performing the work for the period ending December 31, 1970, the staff three different printouts : staff audited 1,037 transactions with a 1. A statistical summary which in- monetary value of $104,332,738 cluded the total number of trans- ($56,003,259 in debits and actions that were processed by $48,329,479 in credits 1. The number GSI during the calendar year of transactions audited represented and dollar amounts for each only 0.25 percent of those processed stratum. This summary also in- during the calendar year. However, cluded comparable data for the their monetary value represented 46 sample and was used to make percent of the value of all the transac- certain that all transactions proc- tions. essed during the year were sub- When the audit work was completed, ject to selection in the sample. the statistical evaluation of the results 2. A detailed listing of sample was quite encouraging. As would be transactions by stratum. This expected the audit staff did detect some listing also included appropriate errors in the recording of transactions control totals by stratum. on the financial records. The statistical 3. A detailed listing of sample evaluation of these errors disclosed transactions sorted first by their effect on the financial statements accounting period, then by book as follows: of original entry, and finally.. by voucher number. This listing fa- 1. The staff could be 95 percent cilitated the audit work because confident that the net error could

35 COMPUTER-AIDED TECHNIQUES IN FINANCIAL AUDITS

range from a $30,792 overstate- servation, inquiries, and confirmations ment of net worth to a $24,476 to afford a reasonable basis for render- understatement of net worth. ing an opinion as to the existence of 2. The staff could be 95 percent the recorded assets and liabilities. It confident that the corporation’s was their view that where these inspec- net worth at December 31, 1970, tions, observations, inquiries, and con- lay between 84,682,893 and firmations could not be performed this $4,738,161 (net worth per bal- fact would have to be disclosed in the ance sheet at Decemher 31, 1970, audit report and, if the amounts in- was reported by the corporation volved were material, the audit report to be $4.,713,685). Thus, there would be appropriately quali,fied. For was only a 1-in-20 chance that these reasons the staff performed the the results of a complete audit of work normally required for each of all transactions would be outside the major asset and liability accounts the interval shown. listed in GSI’s general ledger. When 3. The probability was 97.5 percent this work was completed, it was their that the rate of occurrence of all view that the existence of the assets types of errors affecting net and liabilities recorded in the general worth did not exceed 0.8 per- ledger was reasonably assured. cent. 4. The probability was 97.5 percent Summary that the average dollar value of all types of errors did not exceed Following the completion of this 2 cents. work a new audit program was pre- Thus, the results of the audit were pared which provided the audit staff well within the tolerances specified by an improved basis to obtain substan- the audit staff. tially greater confidence in the financial audit work. The new audit pro- Although our audit of the financial gram was based on dividing the work transactions disclosed that we could into three segments: an evaluation of place a high level of reliance on them, we still had to assure ourselves of the GSI’s system of internal control, the existence of the indicated assets and detailed audit of financial transactions, liabilities as recorded in the accounts. and the verification of the existence of corporate assets and liabilities. Recog- nizing the need for good internal con- Ascertaining the Existence trol, we further divided the GSI auto- of Assets and Liabilities mated accounting system into five distinct functions. Each function was then In addition to ascertaining the relia- analyzed to the extent considered nec- bility of the financial transactions essary. Thus, each staff member per- processed by GSI, the audit staff de- formed a more thorough analysis in a sired to obtain sufficient competent evi- smaller and more clearly defined audit dential matter through inspection, ob- area than was previously possible. COMPUTER-AIDED TECHNIQUES IN FINANCIAL AUDITS

During the detailed audit we quickly ceivables, physical observation of in- learned that the computer could per- ventories, and the confirmation of lia- form checking and verification rou- bilities. As a matter of necessity, this tines much quicker and more reliably work must be performed primarily than they could be performed man- without the aid of the computer. ually, and we used it to the maximum Overall, the work resulted in in- extent possible. creased confidence in the reliability of In regard to the procedures used to the statements, while at the same time verify the existence of the corporate substantially reducing the number of assets and liabilities, we were not able transactions audited. Finally, this work to make significant improvements in eliminated the need for the audit staff them by the use of the computer. Gen- to judge intuitively the reliability of erally, these procedures include the their work by providing a much more reconciliation of bank accounts, sur- independent and objective basis for prise cash counts, confirmation of re- such evaluation.

37 THEODORE F. ZEUNGES 79 :3:37 Reflections on a Congressional Committee Assignment

One of the ways in which the GAO carries out its responsibilities to the Congress is by assigning some of its staff members from time to time to work temporarily on congressional committee staffs. Each congressional committee has its own modus operandi. In this article, the author relutes his recent experiences with the House Appropriations Committee staff.

Management and Organization of The staff is composed of Govern- the Committee Staff ment personnel, most of whom have extensive experience in auditing, law, The Surveys and Investigations Staff or investigative work. Government em- operates at the direction of, but physi- ployees who are experts in other fields cally apart from, the House Appropria- are also used to assist the committee in tions Committee. The staff is managed complex or technical aspects of its by a director and an assistant director studies. GAO staff members are loaned located at the Health, Education, and to the committee on a temporary basis. Welfare building and a second assist- Consequently there are periodic turn- ant director for work in the Depart- overs and fluctuations in the total num- ment of Defense located at the Penta- bel- assigned throughuut the year. The gon. A group leader is in charge of a size of the staff ranges from about 25 part of the staff that works on civil to 35. agency assignments. This group is Committee staff personnel represent housed in the Department of Agricul- a variety of Government agencies from ture building. Staff directors are both the Washington, D.C., area and usually appointed for 3 years. Each cities outside the Washington area. year they move to the next higher posi- The committee desires to keep the tion, serving as staff director during identity of its staff members’ agencies their final year. confidential because, while assigned to

~ Mr. Zeunges is a supervisory auditor in the Research and Development Group, Defense Division. He is a graduate of St. Francis College, Loretto, Pa., and has been with GAO since 1965. He was assigned to the Surveys and Investigations Staff of the House Appropriations Comm’ttee from July 1969 to March 1971.

38 A CONGRESSIONAL COMMITTEE ASSIGNMENT

the staff, these staff members represent time. New teams are usually formed the House Appropriations Committee for new assignments. and not their respective agencies. Work assignments usually begin by researching recent congressional hearings and any other available material How the Committee Staff for background information on the Functions subject matter and for some indication The House Appropriations Commit- of the committee’s interest in the topic tee designates its areas of interest to its of the directive. An investigative out- staff through brief letters called direc- line which lists the areas that the staff tives. A directive states, in general intends to pursue is then prepared. terms, the various aspects of programs The investigative outline serves as a that the committee wants investigated broadly defined audit program for the and reported on. These programs may assignment. Notification letters are have received considerable attention in. then sent to appropriate agency officials recent congressional hearings or they when the new job is started. After ini- may be scheduled for discussion in fu- tial briefings have been held the staff ture hearings. The reasons surround- begins its detailed work. ing the issuance of the directives are not always apparent to the committee Experiences with the staff. In some instances, the director Committee Staff will meet with a member of the permanent committee staff for clarification of During my tenure with the commit- the directives. tee staff, I participated in four assign- The staff is usually divided into ments which individually and collec- teams in order to efficiently perform tively provided me with valuable in- the work called for in the directives. sight into current programs in the De- The size of the teams varies according partment of Defense of interest to the to the complexity of the job, the de- committee. My first assignment in- gree of urgency required to complete volved a review of the policies, prac- the work, and the availability of staff tices, and procedures of the Depart- members. The ideal team has four ment of Defense with respect to small purchases (items costing less than members, one of which is designated $2,500,. As a result of this assignment team leader. The team leader is re- I obtained a better picture of the inter- sponsible for the conduct of his study relationships of the functions of pro- and the resulting report. curement and supply in the Depart- The length of job assignments may ment of Defense. vary from 3 weeks for such programs A subsequent study of the Depart- as reviews of military construction to ment’s air-to-ground weapons systems over a year for jobs of greater com- was interrupted so that a review of the plexity. As many as a dozen or more proposed Defense office building at studies may be in process at any given Bolling Air Force Base, Washington,

39 A CONGRESSIONAL COMMITTEE ASSIGNMENT

D.C., could be performed and reported ment of findings made in the course of on in time for the fiscal year 1971 the study. The urgency of the report hearings. The Congress subsequently deadline often necessitates deferring canceled this project, the second time the referencing of the facts in the re- it has done so. However, the project port to supporting documentation until was included in the budget submitted after the report has been issued. for the following year. One of the principal differences be- My ha1 assignment with the com- tween GAO and committee reports is mittee involved a review of the overall that agency officials do not have an Army truck program. Like the weap- opportunity to review or comment on ons systems study, the truck program the committee’s reports. A limited study required crossing several func- number of copies of the reports are tional areas such as research and de- printed for the committee’s use. Copies velopment, procurement, supply, inven- of the reports are made available to tory control, and requirements deter- interested parties only by authority of minations. Individual weapons and ve- the committee. hicles have received considerable attention in recent congressional hearings. The truck study and the weapons sys- Advantages and Disadvantages tems study provided an insight into of Congressional Committee how individual systems are considered Assignments in light of overall defense goals. Any listing of the pros and cons of a congressional committee assignment The Reporting Process must be an arbitrary one based on an individual’s particular experiences. I The results of the staff‘s studies are feel that a significant advantage of set forth in reports to the House Ap- such an assignment is furthering one’s propriations Committee, There is no career development. A congressional standard reporting format prescribed committee staff is a step closer to for the reports which vary in length, working more directly with the Con- some exceeding 100 pages. The staff reports are largely informative in na- gress, a step -not everyone is able to ture and worded very informally. No take. There is also the attendant better conclusions or recommendations are treatment from agency personnel than made. is normally experienced as a GAO aud- The preparation of the report itor. usually begins after a reporting dead- Staff members can achieve job satis- line has been set by the director. The faction quickly because of the tight staff is given about 4 to 6 weeks in time schedule of the assignment and advance OI the deadline date to begin the fact that there are only three re- preparation of the report draft. The port review officials. In addition, some establishment of a reporting deadline staff members consider the opportunity many times prevents the full develop for travel an important advantage of

40 A CONGRESSIONAL COMMITTEE ASSIGNMENT

committee staff work. Almost every as- members. Many of these same people signment requires a certain amount of were frequently selected for congres- travel since the committee has no re- sional assignments on a recurring gional offices to perform its field work. basis. As a result, some of the younger Some assignments require overseas staff members were suspicious of travel. congressional committee assignments The major disadvantage of congres- and considered them undesirable. sional assignments is that a staff mem- There has been a noticeable trend in ber is frequently away from his agency recent years toward assigning more of for a period longer than anticipated. As an example my “6-monthy’ assign- the younger staff members to congres- ment lasted almost 20 months. The sional Committee work. As more staff Legislative Reorganization Act of 1970 members become exposed to such as- now limits the assignment of GAO per- signments, a change in attitude regard- sonnel to congressional committees to ing such assignments is gradually 1 year. evolving. By participating in congressional assignments at an early stage in his GAO career, a staff member can Conclusion develop a better appreciation of the In the past many congressional com- role that GAO plays in furnishing staff mittee assignments were given to the members for congressional committee older and more experienced GAO staff work.

41 JOHN J. CRONIN, JR.

Dictating-An Important and Underutilized Management Tool

Dictating skill is an important aid to efficient managers, including accountants and auditors, in conserving time and energy. This article provides some encouragement for developing such a skill.

The conference with the agency lem to us in GAO but also to other officials is over, much information has Government agencies and private com- been obtained, and a number of im- panies as well. The saddest part of all portant agreements have been reached. is that in many cases the junior staff On the return to the office an awkward member does not have the complete silence comes over the participants. picture because the meeting covered The silence is finally broken by those areas outside the scope of his assigned familiar words, “OK, who will write tasks, and, therefore, it is likely that the memorandum?” At this point the any documentation prepared by him junior man, unable to make himself will be deficient. While this practice invisible, heads for his office and his creates a problem for the junior staff pencil and paper, receiving suggestions member, it creates a bigger problem until out of earshot, such as: for the organization. that we have defined the prob- Don’t forget what Mr. Smith said. Now Don’t forget to include my comments on lem, let’s discuss its solution. On the Mr. Carver’s suggestion. return to the office after the meeting, Be sure to see that Jones and Davis get one of the senior men should spend 10 copies. to 15 minutes dictating his comments Sound familiar? You bet. It in- to either a stenographer or a dicta- volves the age-old problem of delegat- phone rather than spending that time ing seemingly unpleasant tasks to the or longer reviewing what took the jun- junior staff member and is a scene ior staff member several hours to pre- often repeated. It is not only a prob- pare.

Mr. Cronin is a supervisory auditor in the Civil Division. He holds a B.B.A. degree in accounting from Manhattan College and has attended the Center for Advanced Orga- nizational Sciende at the University of Wisconsin. He is a certified public accountant in Maryland and a member of the American Institute of CPAs and the National Asso- ciation of Accountants.

42 DICTATING-A MANAGEMENT TOOL

My own experience with dictating ing 120 words per minute, it would not has been somewhat different than the take mu& time to have a typed draft above example. Because of extremely of the memorandum as well as drafts poor penmanship (due in part to a of any related memoranda going to childhood mishap) I was forced to use our regional offices. In cases where we dictation long before I reached the are working under time pressures, for level of a manager. After acquiring example, preparing memoranda relat- some basic skills and confidence ing to agreements reached at meetings through trial and error with a dictat- with Members of Congress, the value ing machine, it was easy for me to of dictating cannot be overemphasized. recognize the fear of dictating that is With a good stenographer the data can present in so many of us. even be dictated over the phone and I could have a supervisor stuttering the draft of the memorandum will be excuses for 5 minutes if after a meet- waiting on your desk when you return. ing I would say, “Want to borrow my With experience and training it is even dictaphone? I’d be glad to have your possible to have a good stenographer memorandum transcribed for YOU.” Or edit your material and have the final later, as a manager I could make a memorandum ready for your signature newly assigned supervisor very nerv- on your return. ous by saying, “You did a good job at Now, if I have whetted the appetite the meeting and covered a lot of terri- of the reader, let’s explore how we go tory. Dictate the memorandum to my about developing the management skill secretary so we can get it out in a of dictating. hurry.” The sink-or-swim philosophy which When and How To Start I admit to having used is not always the best. It can have a lasting negative In my opinion, our professional staff effect on an individual. I prefer the members should start dictating at the soft-sell approach to dictating by start- GS-11 and GS-12 levels by using a ing an individual off using a machine machine. Of course, it should be re- and gradually building up his dictat- membered that we cannot forget the ing skills to a point where he can be at secretary in all this since she too is an ease dictating to a stenographer. I essential part. If the secretary can take cannot overemphasize the value of de- dictation, then the chances are she can veloping these skills because of the use a transcriber (the playback ma- countless hours of pushing the pencil chine from the dictaphone that allows that are saved. Those who have the secretary to slow down the record- worked with me, I am sure, remember ing to an acceptable speed for typing). my usual statement to my secretary If she is not a stenographer and has after returning to our office from a never used a machine it might take a meeting, “Vickie, come in and bring bit of selling, but if your penmanship your book.” is as bad as mine it does not take With a stenographer capable of tak- much.

43 DICTATING-A MANAGEMENT TOOL

The next step is pure logistics-get distortion is noted at normal playback the machines. speed, try speaking a little slower and enunciating more clearly. Using the Machine Always remember to enunciate clearly since the secretary will tran- It is considerably easier to familiar- scribe what she hears. This is particu- ize the secretary with the transcriber larly true for the last syllable of words. than it is to make a good recording. When a little of my New York accent The most difficult adjustment is for the slips in every now and then, words like dictator. For some reason the first at- “in depth” are typed “in debt” and so tempt at pushing a button and speak- on. Bad habits in enunciation will be ing into a live microphone that is re- quite clear when a typed draft is recording seems to be a traumatic experi- turned. Remember, if it is the wrong ence. A few simple hints may help. word, it’s your fault and not the secre- 1. Become familiar with the ma- tary’s. chine, including the location and use of its controls. The Move to a Stenographer 2. Make a test record by reading a memo you wrote by hand. Re- A good stenographer can be an in- member to speak slowly and valuable asset to a manager. Frankly, clearly. Record a few sentences even in the accounting profession, I at a time and play them back to can’t understand how some managers determine the proper control set- can get along without them. I shudder tings. every time I think of having to write a 3. Try the real thing but remember memorandum by hand; yet we all to speak slowly and clearly. Al- know many managers who still do, ways prepare a brief outline of the memo so you can keep your probably because they fear that “bap- thoughts organized in a logical tism of fire” that makes a soldier a flow. This will pay off when you veteran. edit the draft. I can say from experience that it is not that difficult when a new dictator and stenographer first work together. Avoid Bad Habits It is probably a tossup as to who is When you play back your first re- more nervous. The most difficult part cording you probably won’t recognize of live dictation, in my view, is for the yourself. Most people don’t. You might dictator to speak at a speed within the also think you sound like Donald limitations of the stenographer. Once Duck. Most people do. The machine this is accomplished the speed of both records in such a manner that the sec- can be increased. retary can slow the record down with- Again, as with the machine, when out distortion. However, if extreme working with a stenographer for the

44 DICTATING-A MANAGEMENT TOOL first time, start out with a short memo- have become an expert-recognizing randum. Don’t forget to encourage the of course that some individuals adapt stenographer to interrupt if she does more quickly than others. Then the not understand. If you are not sure of next time you attend a meeting, if one the correctness of something just dic- of your associates or superiors says, tated, ask her to read it back. Don’t be 6

Good Advice

If an ordinary word fits, use it. Write short sentences. Don’t look for original ways to repeat yourself. Don’t use words that send people running to the dictionary or out on a coffee break. Don’t assume every. one knows exactly what you’re talking about. The purpose is to inform, not impress.

Robert A. Podesta Assistant Secretary of Commerce for Economic Development. Quoted in The Sunday Star, Washington, D.C., April 26, 1970.

45 As We Look to Others

The GAO review of the Federal Government’s Indian education program led to the assignment of three GAO auditors from the Los Angeles Regional Ofice to do work at the Sherman Indian High Sch.001 at Riverside, Calif. Their appearance there aroused some curiosity among the students. Ultimately, the school paper Sherman Highlights (January- February 1971) printed the story which follows. The piece was written by Roselyn Duwyenie, a Hopi Indian girl from Hotevilla, Ariz. Miss Duwyenie, an outstanding student, had such creditable achievements on her record as vabdictorian, 1971 graduating class; recipient of DAR Citizenship Award to Outstanding Senior Girl and Most Successful in Business Award; editor of school paper; and participant in numerous other school activities.

General Accounting Auditors These auditors, Mr. Dave Zyks, Mr. Larry Bridges, and Mr. George Gaza- We kept seeing these strangers visit- way, work out of the Los Angeles Gen- ing on campus. They seemed to be eral Accounting Office which is di- everywhere, in and out of classrooms, rectly under the GAO in Washington, dining hall, other offices, etc. Then we D.C. found they were located in an office Actually, they work for Congress, next to our Highlights room. arid they said they are sometimes re- We decided if we could find out who they were and what they were doing at ferred to as the “Watch Dogs” for Sherman, it would be a good article Congress. There are many teams of for our newspaper, so we went next these auditors who go all over the door and asked for an interview, and country, and sometimes into far cor- to “investigate.” We the “interviewer- ners of the world to check on many investigators” found out quickly that different kinds of problems; or make a they were “investigators,” or, auditors study and survey of how the money from the General Accounting Ofice. appropriated by our Government is When we left their office, we felt that being spent, or being used to the best we had been “interviewed” instead of advantage. The reports of their find- being the “interviewers,” but we did ings, good or bad, are taken to the find out many interesting things. Washington Head Officer who reports

46 AS WE LOOK TO OTHERS to Congress. If any problems are en- at all Indian boarding and reservation countered, they set about to improve schools. the situation. They described their jobs to us, and These auditors are now looking into told us about the tYPe of studying we Indian Education to see if they can might take if we were interested in find any problems, and then try to being GAO auditors. These jobs pay very good salaries, the promotions help solve any problems they might and are fast and good. Besides a good sal- find. They will also write up any good ary which they make, they also get all points they find because these might be their traveling expenses paid. The used by other agencies of the govern- starting salary is good, and at the end merit. They make recornmen- of each year they get a raise for the to Congress of the needs of the first four years. After that, one gets a school. raise every two years, so you see, one When these auditors left here: one could get to the top in no time. To me was going with another team to Phoe- it would be interesting to travel all nix, and one to Washington. They will over our country. It sounds to me like travel all over the US. to take a look a good position to train for.

We Agree

If the General Accounting Office did not exist, it would have to be invented. The necessity for an independent agency to examine how the Government spends public funds in the discharge of its responsibilities was obvious from the very beginning of constitutional government in this country.

Management Accounting, April 1970.

47 Approval of Department of Commerce mnting Systems

President Nixon commended the De- the Secretary and his associates for partment of Commerce in May 1971 this “significant accomplishment.” for becoming the first Cabinet agency Immediately after his appointment whose complete accounting system de- to the Cabinet in January 1969, Secre- signs have been approved by the tary of Commerce Maurice Stans es- Comptroller General, as required by tablished as a priority task the mod- law. His letter of commendation ap- ernization of the Department’s account- pears on the next page. ing systems and their approval by the The Comptroller General, Elmer B. Comptroller General. Staats, also wrote to the Secretary of Commerce noting that “the design of In addition to Mr. Stans’ personal all seven of the accounting systems of interest. top Department leadership for the Department of Commerce, includ- this work was provided by Larry A. ing appropriate ADP documentations, Jobe, Assistant Secretary of Commerce have been approved” and commending for Administration.

Larry A. lobe, Assistunt Secretary of Commerce for Administration, accepts congratulations for his leadership role in improving and obtaining GAO approval of the desgns 01 the Department of Commerce accounting systems. An inlormal celebration of this accomplishment was held at the Department of Commerce on June 18, 1971. From the left: Comptroller General Elmer B. Stuats: Secretary oj Commerce Marurice H. Stuns. Mr. Jobe; and E. H. Morse, Jr., Director, Ofice of Policy and Special Studies.

48 DEPARTMENT OF COMMERCE ACCOUNTING SYSTEMS

THE WHITE HOUSE

WASHINGTON

May 7, 1971

Dear Maury:

It was interesting to learn that the Department of Commerce has passed a significant milestone in becoming the first Cabinet Department whose complete accounting system design has been approved by the Comptroller General as required by law.

You and Assistant Secretary Jobe deserve a special word of appreciation for the leadership responsible for this accomplishment. I know that both of you are keenly aware of the significant contribution that accurate, intelligible and timely financial data can make to the efficiency and the economy of execution of our programs. This is what I tried to convey in my August 12, 1969 memorandum. We must indeed have "financial systems that illuminate every level and stage of decision-making: from the first-line supervisor to the President and the Congress, from the long-range forecast to the critical post-audit. ''

I am confident that you will move ahead with the same quick responsiveness in putting these accounting systems into operation. Your accomplishments should serve to demonstrate to all Federal agencies how progress can be made in strengthening administrative practices.

With warmest regards,

Sincerely,

Honorable Maurice H. Stans Secretary of Commerce Washington, D. C. 20230 49 DEPARTMENT OF COMMERCE ACCOUNTING SYSTEMS

Mr. Jobe’s leadership was recog- erative accounting systems develop- nized not only by President Nixon and ment program. Under the leadership of Secretary of Commerce Stans, but by Daniel Borth, deputy director, and the Federal Government Accountants Richard Maycock, assistant director, of Association. This organization pre- the Office of Policy and Special Stud- sented Mr. Jobe with one of its Distin- ies, the following GAO staff members guished Leadership Awards for this assisted the Department’s agencies in work during its 20th Annual National their systems work since 1969: Symposium in Washington, D.C., June Ernest R. Porter 30, 1971. Jack Ell The Department of Commerce Arthur Martin accomplishment was not without a Earl Wysong strong assist from GAO under its coop- Frankie Schlender

Department of Commerce financial systems staff with top departmental officials and the Comptroller General at informal celebration on June 18. From the left: Elmer B. Stuats, Comptroller General; Maurice H. Stans, Secretary of Commerce; Eleanor Clark; Meir S. Gabbay, Chief, Financial Systems Staff; C. L. Harvill; Ben L. Brown; John J. Zych; Harry Kirst; W. R. Kuttner; June Williams; Joyce Cicala; and Larry A. Jobe, Assistant Secre- tary for Administration.

50 More on GAO’s First 50 Years

The Summer 1971 issue of the Review was devoted completely to commemorating GAO’s 50th anniversary. It contains numerous items relating to the history and evolution of the Office. In this issue, a number of additional items in this vein are included in further recognition ,of 1971 as the year when GAO completed its first 50 years.

GAO Tatchdog Photo

51 50th Anniversary Activities

In recognition of the 50th anniversary of the Budget and Accounting Act, 1921, which created the General Accounting Ofice, a variety of activities and events took place during the month of June 1971.'

June 11 Activities George P. Shultz, Director, Of- fice of Management and On this date the principal observ- Budget ance of the anniversary was held in Russell E. Train, Chairman, Washington with the following events: Council on Environmental -Presentation of three of the 50th Quality anniversary year series of lectures Dr. Robert C. Weaver, Profes- on improving management for more effective government. These sor of Economics, City Uni- lectures were delivered during versity of New York the morning in the West Audi- -The annual honor awards cere- torium of the New State Depart- monies of the General Accounting ment Building to an audience of Office with the Honorable Chet about 800 people, consisting of Holifield, Representative from GAO officials, employees, and California, as the guest speaker guests. The lecturers were: (see p. 84).

GAO Watchdog Photo Comptroller General Elmer B. Staats opens the morning sessr'on on June I1 at the West Auditorium, New State Department Building, by greeting GAO oficials, employees and guests.

52 50TH ANNIVERSARY ACTlVITlES

GAO Watchdog Photo Leadoff speaker un June 11 in the State Department Auditorium was George P. Shultz, Director, Ofice of Management and Budget.

-An evening reception sponsored 11 were video-taped and are being by the GAO Employees Associa- made available in this form to all GAO tion in the Ben Franklin Room regional offices for presentation to of the New State Department their staffs. These lectures are part of a Building. About 600 guests at- year-long series of 15 lectures which tended. will be compiled into book form for All of the lectures delivered on June distribution early next year.

GAO Watchdog Photo A portion of the audience listening to Mr. Shultz. Seated on the platfonn are the Comp- troller General, Elmer B. Staats; the Assistant Comptroller General, Robert F. Keller; and GAO division and ofice heads and their deputies.

53 50TH ANNIVERSARY ACTIVITIES

GAO Watchdog Photo Speakers. Robert C. Weaver, Professor of Economics, City University of New York, and Russell E. Train, Chairman, Council on Environmental Quality, participated in the morning lecture program, a segment of the GAO’s 50th Anniversary Ceremonies on Jane 11. From the left: Mr. leaver; Elmer B. Staats, Comptroller General; Mr. Train; and Robert F. Keller, Assistant Comptroller General.

Congratulatory Speeches by that Office; and be it further Members of Congress Resolved, That as it is fitting and proper to commemorate the fifty-year history of the General Accounting Office, the month of Numerous speeches by Members of June 1971 is designated for ceremonies ap- Congress congratulating and com- propriate to such commemoration. mending GAO on its 50th anniversary were printed in the Congressional Published Articles on GAO Record during June 1971. A number of articles relating to Congressional Resolution GAO appeared in the publications of professional associations. Those pub- The House of Representatives ap- lished during January-August 1971 proved the following concurrent reso- were: lution on August 3, 1971. (The Senate had not acted on it up to the time of The Journal of Accountancy the August 1971 recess.) (June 1971) Resolved by the House of Representatives Profile on Comptroller General (the Senate concurring), That the Congress Elmer B. Staats written by James of the United States extends its congratula- Nolan, managing editor, plus an edi- tions to the farmer and present officers and employees of the General Accounting O5ce torial entitled “GAO Is Fifty Years on the occasion of the fiftieth anniversary of Old.”

54 50TH ANNIVERSARY ACTIVITIES

Management Accounting The Federal Accountant (May 1971) (June 1971) An NAA salute to GAO on its 50th “Outline of History of the US. Gen- anniversary which also refers to the eral Accounting Office 1789-1971” April 1970 issue of the same journal accompanying message from FGAA containing an article describing GAO national president (E. H. Morse, jr.), activities and problems. entitled “What About the Next Fifty Years?” The Accounting Review Army Finance Journal (July 1971) (May-June 1971) “A Perspective of Accounting” by “The United States General Leo Herbert, director, Office of Person- Accounting Office-A Half-Century of nel Management. Service to the Public.”

The Ofice tVashington/The Sunday Star (January 1971) (August 22, 1971) “Accountants Evaluate Federal Man- “Sniff, Sniff, the GAO” by Miriam agement,, by E. H. Morse, Jr. Ot tenberg.

GAO Watchdog Photo Attentive listeners in the State Department Auditon’um, June 11.

55 50TH ANNIVERSARY ACTIVITIES

Special GAO Publications ments relating to GAO’s predecessor organizations, 1789-1921. The following publications were de- South Lobby, main floor- voted to GAO history and development : Pictures and facsimiles of docu- The GAO Review, Summer 1971 ments pertaining to GAO’s first GAO Newsletter, June 11, 1971 50 years. Seventh floor- Special Displays in Pictures of Comptrollers of the GAG Building in Washington Treasury, 1789-1921; and Comp- trollers General, Assistant Comp- North Lobby, main floor- trollers General, and General Pictures and facsimiles of docu- Counds, 1921-1971.

The General Accounting Office is a great office and you can be ,proud to be a part of it, and of the contributions the Office has made to hetter government. If I may say so modestly, together we have revolutionized the Office, raised its stature and made its influence felt for good throughout the Federal Government. This has only been accomplished by constant recognition that an organization is only as strong as its members. The General Accounting Office is no one group or individual, but a team with every one of you playing a vital part. I know you will give the next Comptroller General the same teamwork and loyalty you have given to me.

Lindsay C. Warren In letter to GAO employees at time of his retirement in 1954.

56 MARGARET L. MACFARLANE AND JUDITH HATTER

Personalities Contributing to the Enactment of the Budget and Accounting Act, 1921

The question “What is he really like?” is posed frequently about people in the public eye. At this special time in the history of the General Accounting Ofice, it is of more than passing interest to learn something about those idividuals who were instrumental in the enactment of the Budget and Accounting Act, 1921. The biographical abstracts that follow help to humanize this part of GAO’s history and make more meaningful the words and actions of the individuals who were so important in the conception and birth of the General Accounting Ofice.

The Cleveland Commission required to furnish the Senate with the names, qualifications, and salaries of In 1911 President William Howard the members of the Commission. As a Taft appointed a Commission on Econ- result of this senatorial request for in- omy and Efficiency to look into ways formation, we have the following bio- and means to improve the Federal graphical sketches of the members of Government. The Commission was the Commission. chaired by Frederick A. Cleveland who Frederick A. Cleveland, chairman: Age had been instrumental in updating the 46; salary as chairman of the President’s accounting procedures in New York Commission on Economy and Efficiency, State. $10,000 per annum; appointed March 8, The Congress was interested in the 1911. Official positions previously held: In- makeup of this Commission and pur- structor of finance, University of Pennsyl- vania, 1900 to 1902; professor of finance, suant to a Senate resolution approved School of Commerce, Accounts, and Finance, January 25, 1912, President Taft was New York University, 1903 to 1905: member

Mrs. Macfarlane was chief of the Legal Reference Services, Office of the General Counsel, until her retirement June 24, 1971. She holds an A.B. degree from National University and an LL.B. degree from National University Law School. She is a member of the Bar of the District of Columbia. Miss Hatter is assistant chief of the Legislative Digest Section, Office of the General Counsel. She has been with the General Accounting Office since 1957.

57 ENACTMENT OF THE BUDGET AND ACCOUNTING ACT, 1921

From Library of Congress collections Frederick A. Cleveland, Chairman of the President’s Commission on Economy and Efficiency, appointed by President Taft in 1911. of commission on finance and taxation ap- city of New York; director, bureau of munic- pointed by Mayor McClellan, of the city of ipal research, Philadelphia ; director, bureau New York, 1905 to 1906; member of com- of municipal research, New York City. mittee appointed by Comptroller Metz for William F. Willoughby: Age 44; salary the revision of accounts and administrative as member of the President’s Commission methods of New York, 1907 to 1908; member on Economy and Efficiency, $6,000 per an- of committee on office methods and prac- num; appointed March 8, 1911. Official posi- tices, appointed by Controller Prendergast, tions previously held: Expert, Department of

58 ENACTMENT OF THE BUDGET AND ACCOUNTING ACT, 1921

Labor, 1890 to 1901; treasurer of Porto Rico, of Massachusetts, 1910 to 1911; president of 1901 to 1907; secretary of Porto Rico and Massachusetts Society of Public Accountants; president of the Executive Council of Porto trustee and member of executive committee Rico, 1907 to 1909; Assistant Director of of American Association of Public Account- the Census, 1909 to 1911. ants. Walter W. Warwick: Age 43; salary as Merritt 0. Chance, secretary: Age 42; member of the President’s Commission on salary as secretary of the President’s Com- Economy and Efficiency, $6,000 per annum; mission on Economy and Efficiency, $6,000 appointed April 20, 1911. Official positions per annum; appointed March 8, 1911. Offi- previously held: Clerk to United States cir- cial positions previously held: Assistant cuit judge, 1892 to 1893; confidential clerk, messenger, Post Office Department, 1888; law clerk, and chief law clerk, Treasury De- clerk, War Department, 1890; clerk, Post partment, 1893 to 1898, and 1905 to 1908; Office Department, 1891 to 1894; clerk and deputy auditor Isthmian Canal Commission private secretary to Fourth Assistant Post- (Washington office), 1904 to 1905; examiner master General, 1895 to 1899; chief clerk, of accounts of the Isthmian Canal Commis- Fourth Assistant Postmaster General, 1899 to sion and auditor of the government of the 1901: private secretary to the Secretary of Canal Zone (on duty on the Isthmus), 1908 War, 1901 to 1904; superintendent of post- to 1911; appointed associate justice of the office supplies, Post Office Department, 1904; supreme court of the Canal Zone, 1911. (Did chief clerk, Post Office Department, 1905 to not enter on duties of office last named be- 1908; auditor for the Post Office Depart- cause of appointment as member of the comment, 1908 to 1911.1 mission.) Of the 26 reports issued by the Frank J. Goodnow: Age 53; salary as member of the President’s Commission on Commission, two dealt with the Na- Economy and Efficiency, $6,000 per annum; tional Budget System and contained appointed April 20, 1911. Official positions recommendations that were ultimately previously held: Professor of law, Columbia incorporated in legislation that became University, New York, since 1883; member of commission appointed by Gov. Roosevelt the Budget and Accounting Act, 1921. in 1900 to revise the charter of the city of These reports were “The Need for a New York; member of commission on finance National Budget System” (issued June and taxation appointed by Mayor McClellan 27,1912,62d Cong., H. Doc. 851) and of the city of New York, 1905; member of “A Budget for the Fiscal Year 1914” commission appointed by Mayor Gaynor to inquire into the causes of congestion of (submitted as an example of the type population in New York, 1910; delegate of of budget that would be proper, 62d the United States Government to the first Cong., S. Doc. 113). Congress of Administrative Science at Brus- sels, 1910. Harvey S. Chase: Age 50; salary as mem- Walter W. Warwick ber of the President’s Commission on Econ- omy and Efficiency. $40 per day while on One of the members of the Commis- duty at Washington, without cost to the Gov- sion, Walter W. Warwick of Ohio, was ernment for traveling and personal expenses, appointed by President Wilson on Sep- the total cost per annum not to exceed $6,000; tember 1, 1915, to be Comptroller of appointed June 30, 1911. Official positions previously held: Consulting expert in the the Treasury. Comptroller Warwick installation of uniform systems of accounting served in this capacity until June 30, for the State of Ohio, 1902; expert“ for 1921, when the GAO and the Office of finance commission of the city of Boston, 1908 to 1910; expert for governor of State Congressional Record, Vol. 48 (1912). p. 1834.

59 ENACTMENT OF THE BUDGET AND ACCOUNTING ACT, 1921

the Comptroller General went into op- He considered his memorandum “as a eration. call to aid the new office to make it a Several days before President Wilson model of efficiency among Government vetoed the Budget and Accounting Act establishments.” bill on June 4, 1920, Comptroller War- wick wrote a memorandum to the prin- Medill McCormick cipal members of his staff inviting comments on steps to implement what Senator Medill McCormick of Illi- he termed “the most important and far nois, chairman of the Senate Commit- reaching law with reference to the fi- tee on Expenditures in the Executive nancial and accounting work of the Departments, introduced the bill which Government that has been enacted ultimately became the Budget and since the original Treasury Act of Accounting Act, 1921. 1789.” Medill McCormick was born on May make the transition as smooth To 16, 1877, in Chicago, Ill., the son of and effective as possible he stated, “I Robert S. and Katherine Medill conceive it to be a duty of the present McCormick. He was educated in the office of the Comptroller of the Treas- ury to do all of the preliminary work public schools of Chicago, a prepara- on organization lines that it is possible tory school at Groton, Mass., and to accomplish before July 1, in order graduated from Yale University in that the Comptroller General when ap- 1900. During his career as a journal- pointed may have the benefit of the ist, Mr. McCormick covered the war in knowledge and suggestions of those the Philippine Islands in 1901. He was persons who have been responsible for the publisher and owner of the many years for the operations of the Chicago Daily Tribune and later pur- accounting offices of the Treasury.” He chased an interest in the ChveEand further elaborated that “the assign- Leader and Cleveland News. ment to organization units of definite Mr. McCormick was a delegate to duties and the fixing of responsibility the Republican National Convention at for planning and executing those du- Chicago in 1916 which nominated ties are vital. Organization in this Charles Evans Hughes and Charles W. sense is a separate and distinct subject Fairbanks. from that of personnel. Organization His political career began with serv- should not be built around qualifica- ice in the Illinois General Assembly to tions or peculiarities of individuals which he was twice elected. Mr. whether the head of the office or oth- McCormick was subsequently elected ers.” He added, “Believing that the to the 65th Congress as Representative question of organization is distinct at Large from Illinois and to the U.S. from that of personnel I am anxious Senate where he served from Novem- that the best plan of organization for ber 5, 1918, until his death on Febru- immediate operation be worked out.” ary 25, 1925.

ENACTMENT OF THE BUDGET AND ACCOUNTING ACT, 1921 officials, and, in my opinion, more real econ- was admitted to the bar in 1890. He omy and efficiency will result through the served his State as judge of Uvalde creation of this office than any other single County and as a member of the Texas step we could possibly take. The creation of an independent auditing House of Representatives. He was dele- department will produce a wonderful change. gate to three Democratic National The officers and employees of this depart- Conventions, 1900, 1904, and 1916. ment will at all times be going into the Mr. Garner died at Uvalde, Tex., in separate departments in the examination of their accounts. They will discover the very 1967, at age 98. facts that Congress ought to be in possession of and can fearlessly and without fear of removal present these facts to Congress and James W. Wadsworth, Jr. its committees.*** Another Member of Congress who Representative Good served as chair- deserves a significant place in the ros- man of the House Select Committee on ter of those instrumental in the estab- the Budget which considered the legis- lishment of the Office of the Comptrol- lation. ler General as an independent agency Mr. Good was born September 24, responsible to the Congress was James 1866, in Lenn County, Iowa. He was a Wolcott Wadsworth, Jr. graduate of Coe College (Cedar Rap- Mr. Wadsworth was born in Gene- ids). A lawyer, Mr. Good received a seo, N.Y., August 12, 1877; received bachelor of laws degree from the Uni- his preparatory education at St. versity of Michigan in 1893. Mr. Good Mark's School, Southboro, Mass.; and served in the House of Representatives was graduated from Yale University in from March 4, 1909, until June 15, 1898. After the Spanish American War 1921. President Hoover appointed he engaged in livestock and agricul- Good as Secretary of War. He served tural pursuits near Geneseo. He was from March 5, 1929, until his death, elected to the New York State Assem- November 18, 1929. bly 1905-1910 and to the US. Senate in 1914 where he served until 1927. John Nance Garner He was an unsuccessful candidate for reelection in 1926. In 1933 he was Former Vice President of the United elected to the 73d and seven succeed- States John Nance Garner was a mem- ing Congresses and he died in 1952. ber of the House Select Committee on While Mr. Wadsworth served in the the Budget. During his tenure in the Senate during the time that the Budget House of Representatives he served as and Accounting Act was going through minority floor leader and in the 72d the legislative process, it was his exten- Congress as Speaker of the House. sive speech on the floor of the House Mr. Garner was born November 22, of Representatives on February 1, 1868, in Red River County, Tex. He 1937, that saved the GAO from aboli- had a limited elementary education, tion. In this speech Congressman studied law in Clarksville, Tex., and Wadsworth provides us with a per-

2 Congressional Record, Vol. 58 (1919), p. 7085. sonal r6sumC of the legislative history

62 ENACTMENT OF THE BUDGET AND ACCOUNTING ACT, 1921 of the Budget and Accounting Act, fashion. Accountability for expenditures au- 1921. Excerpts from the speech and thorized in the first instance by Congress, the related discussion on the House was scattered in pretty nearly all of the departments. Confusion existed; lack of sys. floor tem, and the inevitable waste which comes with an ill-ordered governmental structure. Mr. WADSWORTH. Mr. Chairman, we In 1920 the movement for reform achieved have before us in Committee of the Whole House the annual appropriation bill for the great force, and Members of both Houses, support of the so-called independent offices. looking back over the years, made up their One of the items in the bill is the appropria- minds that if the Government was to be conducted in orderly fashion from that point on tion for the support of the office known as and be put in a position where it could stand the General Accounting Office and the Cow- the strains which the future might put upon troller General and his assistant. If my it-of course, the strains are of a financial recollection serves me right, that appropria- character principally-it was absolutely nec- tion calls for the expenditure of approximately $5,300,000. The fact that this item of essary to establish a budget system. Several appropriation for the support of the Comp- States of the Union had established budget troller General and the General Accounting systems prior to that time, but there had Office is contained in this bill perhaps been nothing approaching it in the Federal furnishes me an excuse, if not a good reason, Government. think it fair to say that the best minds in to discuss the origin of the Office itself and, I having traced that as briefly as I may, dis- both Houses and on each side of the aisle in cuss its functions, especially in view of the both Houses, gave their attention to the great task that confronts the Congress, look- establishment of a budget system. In 1920 ing toward the reorganization of the execu- the first effort was made, and a bill was tive departments of the Government. passed establishing the office of Director of During the World War the Government of the Budget, with duties assigned to him such the United States of necessity grew in its as you are all familiar with, duties which he dimensions by leaps and bounds. Nearly all still bears. Needless to say, the establish- of that growth was for the purpose of meet- ment of that office made it possible for the ing the emergency incident to the Great War. Congress and the country as a whole to get The demobilization period consumed the a better view of the financial condition of years 1919 and 1920, speaking generally. the Government; a better view and under- Demobilization was accomplished in due standing of the requests for money coming time, but it became apparent to the Mem- from the Executive, the revenues which bers of the House and Senate of that day might accrue from tax measures, and finally that in coming back to normal condition in the appropriations made by the Congress government, those who were to manage it, itself. including the members of the legislative As an integral and essential part of the branch, were bound to find additional com- Budget system, attempted first in 1920, there plications and ramifications incident not only was established the General Accounting Of- to some of the lessons learned in the war fice and the office of the Comptroller Gen- eral and Assistant Comptroller General. itself, but incident, perhaps more especially, Around the establishment of the General Ac- to the natural growth of the country. countine; Office, and particularly around the Prior to 1920, dating clear back to the in- establishment of the office of Comptroller ception of our Government, there had never General. a considerable controversy took been made any especially determined effort Dke. The House of Representatives at that to see to it that as the Government. in its time. in passing the Budget bill, proGded executive departments. grew from year tn for the office of Comptroller General, and year, it grew in systematic and orderly inserted in the act provisions to the effect

~ Congressional Record, Vol. 81 (1937). pp. 652-56. that the Comptroller General should be ap-

63 ENACTMENT OF THE BUDGET AND ACCOUNTING ACT, 1921

From Library of Congress collections James w. Wadsworth, Jr., U.S. Senator, 1914-27, and Representative from New York, 1933-52. pointed by the President, by and with the The Senate accepted the House provision advice and consent of the Senate, and should in very large measure, and the bill was serve until he was 70 years of age, or during passed. Woodrow Wilson was President of good behavior. The bill provided that he the United States at that time. If my recol- might be removed by concurrent resolution lection is correct, each House of Congress of the Congress for malfeasance in office, was controlled by a majority of the Republi- incompetency, or neglect of duty, or he can Party, although the majorities were not might be removed through impeachment heavy. proceedings. Mr. Wilson vetoed the bill. In his veto

64 ENACTMENT OF THE BUDGET AND ACCOUNTING ACT, 1921 message he expressed his regret that he felt President Wilson’s message gave rise to a impelled to veto the Budget Accounting ht, very interesting debate. It was submitted, of acknowledging as he did that it would bring course, first to the House of Representatives about great reforms and emphasizing the as the body in which the bill had originated. fact that his only reason for vetoing it was The gentleman from Iowa, Mr. Good, was on account of the provision in the bill which chairman of the Committee on Appropria- failed to give him, the Chief Executive, the tions in those days and had charge of the right to remove the Comptroller General. I bill during its passage through this body. It think it might be of interest to the Members will be remembered that he was a most dic of the Committee who do me the honor to tinguished man and served in this House for listen to me if I read a portion of President many years, later becoming Secretary of War Wilson’s veto message of House bill 9783, and, unhappily, dying in office. Mr. Good sent to the Congress on June 4, 1920. I read was one of the persons who took part in the an excerpt from the veto message: discussion of the President’s veto. He said “I do this with the greatest regret. I am on that day immediately after the message was read: in entire sympathy with the object of this bill and would gladly approve it but for the “I regret more than I can express that the fact that I regard one of the provisions con- President has thought it necessary to veto tained in section 303 as unconstitutional.” the Budget bill. I cannot amve at any conclusion other than that the legal advice he I may interject the observation that Presi- has received as to the constitutional powers dent Wilson was referring to the power of of Congress in this respect is, indeed, faulty. removal of the Comptroller General when he In creating the General Accounting Office used that sentence. He goes on to say: and providing for the Comptroller General “The effect of this-” and Assistant Comptroller General the com- That is, the removal provisions which mittee was guided by a single thought; that lodged the power in the Congress- was, that these two officers should be placed Mr. RANKIN. Mr. Chairman, will the upon a plane somewhat comparable to the gentleman yield? position occupied by a Federal judge.” Mr. WADSWORTH. I yield. That is, the Comptroller General and Mr. RANKIN. Did the original bill pro- the Assistant Comptroller General- vide that the President might remove the Comptroller General? “The positions are somewhat judicial, Mr. WADSWORTH. No; the original bill and it was the opinion of the committee that provided that the Comptroller General should we should remove them as far as possible be appointed by the President, but might from political considerations. It was con- be removed only by concurrent resolution sidered that as to the President’s appoint- of the Congress for malfeasance, incompe- ment, if it was made a political office, the tency, neglect of duty, or by impeachment President would, in all likelihood, appoint proceedings. President Wilson went on to someone of his political faith. It is the desire say: of the committee that that situation should The effect of this provision is to prevent be avoided if possible. There is no decision the removal of these officers for any cause of the Supreme Court construing a statute except either by impeachment or by concur- such as we have attempted to enact. I think rent resolution of Congress. It has, I think, it may be stated-” always been the accepted construction of the Constitution that the power to appoint offi- Said Mr. Good- cers of this kind carries with it as an incident “. . . as a general rule that the power given the power to remove. I am convinced that to the President to appoint an officer carries the Congress is without constitutional power with it the inherent power of removal unless to limit the appointing power and its inci- that inherent right or incidental right is dent, the power of removal.” taken away by the statute itself; and that

65 ENACTMENT OF THE BUDGET AND ACCOUNTING ACT, 1921

is what this Congress intended to do, to take time on the vote to override the President’s from the President the incidental right of veto of the Budget Act. removal and to provide the circumstances We find, for example, voting to override, and the method of removal.” the gentleman from Alabama, Mr. Bankhead, The course of the debates on that day in- the present distinguished Speaker of the dicate very clearly that when the Congress House; the gentleman from Texas, Mr. Bu- sought to create the office of Comptroller chanan, the present chairman of the Com- General it did not seek or intend to create mittee on Appropriations of this House; the an executive office. It sought and intended gentleman from Tennessee, Mr. Byms, the to create an agency of the Congress itself late Speaker and former majority leader of subject to the Congress, responsible to the the House. I may mention also the gentle Congress; and that in case of need the in- man from Georgia, Mr. Crisp; the gentleman . cumbent could be removed by the Congress. from Alabama, Mr. Huddleston; the gentle- The purpose of the act, as I recollect it man from Texas, Mr. Jones; the present -and I had the honor of serving in the chairman of the Committee on Agriculture; Senate at that time and can remember a the gentleman from Texas, Mr. Rayburn, the great deal of the discussion-was to give present majority leader of the House; the to Congress better control over the appro- gentleman from Colorado, Mr. Taylor, who priations which it makes from time to in the last session of Congress was the act- time in the matter of seeing to it that they ing majority leader. I could name many are made in accordance with the views and others who, joining with representative Re- intent of the Congress; in other words, that publicans, believed not only in the consti- the expenditures themselves are legally made. tutionality of the bill but in the necessity for After considerable debate upon the veto its enactment. message the question was laid before the Mr. Chairman, this ended the matter in House as to whether the veto message that Congress. In 1921 the agitation was re- should be sustained or be overridden. The sumed and carried on in much the same vote upon that occasion was 178 to over- spirit as in 1920. In the meantime Mr. Wil- ride the veto and 103 to sustain the veto. son had retired from the Presidency and had A two-thirds vote was lacking and the veto been succeeded by Mr. Harding. Again there was sustained. It is interesting to note the was a Republican majority in the Senate roll call on that veto message. All party and in the House, although of not over- lines were forgotten. Democrats and Re- whelming dimensions by any means. publicans joined in the debate on the The bill was introduced all over again, original passage of the bill through the and, as I recollect it, Mr. Good, of Iowa, House urging its passage, and joined in the had charge of it in the House. It came from debate incident to the reception of the veto the so-called Budget Committee, composed message itself. Remember, of course, that of both Republicans and Democrats. If my the Republicans had a slight majority in the recollection is correct it came with a unani- House at that time, as I recollect; but the mous report. Democratic Party was a powerful minority As this bill passed the House, the Comp- group, many of whose members were ex- troller General was to be appointed by the ceedingly prominent in this and other de- President, by and with the advice and con- bates and who contributed much to this dis- sent of the Senate, removable by the Con- cussion and its final solution which occurred gress by a concurrent resolution in prac- a year later. tically the same language as contained in the It is not for the purpose of drawing any bill of 1920. The House still clung to the comparisons or to bring before this commit- life tenure or to the proposition that the tee at this time any partisan consideration Comptroller General should serve until he that I call attention to the support given to was 70 years of age or during good behavior. this proposal by the prominent members of The Senate committee, headed by the late the Democratic side of the House at that Senator Medill McCormick, of Illinois, be ENACTMENT OF THE BUDGET AND ACCOUNTING ACT, 1921 lieved that the Comptroller General should and Accounting Act of 1921 represented the serve for 7 years. In other respects through- greatest fiscal reform in the conduct of the out the bill there were very, very few dif- Government of the United States since its ferences. The Senate passed the bill with an foundation in 1789. I think for the first time amendment changing the tenure of office of it struck at a huge and admitted evil; that the Comptroller General. is, the wasteful expenditure of the people’s The bill went to conference, and the con- money. For the first time it set up a system ferees of the two Houses compromised and by which it would he possible for the Con- provided that the term of the Comptroller gress, as well as the public, to get a clear General should be 15 years, but that he understanding, if they are willing to study should be ineligible for reappointment. The the Budget figures, of the structure of the conference report submitted to the two Government of the United States and the Houses emphasizes the fact that by this de- manner in which it spends its money. vice the Comptroller General would still be Mr. Chairman, the Budget system has con- kept completely independent of executive tinued to the present day. The Comptroller control or influence. Being ineligible for re- General has performed his function. The appointment, he cares not what any execu- first 15-year term has come to an end and tive officer thinks of him; he cannot be the incumbent has left office, not being eli- moved by ambition to succeed himself, and, gible for reappointment. At the moment an not being removable by an Executive order Assistant or Acting Comptroller General is but only by the Congress, his responsibility performing the functions of that Office. It to the Congress and his independence from has fallen under criticism, and especially executive control persists. criticism from a committee of gentlemen ap- This bill came before the House in 1921 pointed by the President of the United and the House had a very enlightening de- States, who, examining into the structure of bate upon it; more so, perhaps, than upon our Government and looking toward a better the veto message of Mr. Wilson. Those who management of the executive departments, spoke included the Honorable John Nance have recommended the abolition of the office Garner, of Texas, who insisted that the of Comptroller General and of the General Comptroller General should be completely Accounting Office. The President himself independent; Mr. Byrns, of Tennessee, who made that recommendation, his very own, in did the same; Mr. Bankhead, of Alabama, his message to the Congress relating to the who did the same; Mr. Good, of Iowa. and reorganization of the executive departments. many others. I am not sure that every Member of the So in 1921 there was no partisan division. House will agree with me about this, and The leaders on both sides saw the great as I express my views I beg of you to believe necessity for establishing a Budget system I am not expressing them as a partisan, but, in the Federal Government, and the further rather, as one endeavoring to view the future. great necessity of establishing as an integral Presidents come and go. Congresses come and part of the Budget system an independent go. But the bureaucracy goes on forever. We auditor responsible only to the Congress. The may feel perfectly safe with respect to the act was passed and was signed by President legal and proper expenditure of the funds Harding. The roll call on final passage which we appropriate under the guidance of showed-yeas 335, nays 3. You can thus see the present occupant of the White House. the practical unanimity of the action of the We may feel perfectly safe with respect to Congress at that time. the proper expenditure of the funds under Of course, I do not know how the present the guidance of the next occupant of the Members of the Congress feel about the White House. But who can tell in the muta- passage of that act. I happened to be here at tions of politics, the swinging back and forth the time, as many of you were. I got the of public opinion in times of stress, confu- impression at that time-and I have had it sion, and hysteria, what the future holds ever since-that the passage of the Budget with respect to this great problem? And in

67 ENACTMENT OF THE BUDGET AND ACCOUNTING ACT, 1921 the future what shall be the function, the yield 10 additional minutes to the gentleman standing, and the power of the legislative from New York. branch, and especially of the House of Rep Mr. WADSWORTH. Contrary to the con- resentatives, in which, according to custom, ception entertained by a good many people, all appropriation bills of major importance the Comptroller General and the Accounting originate and in which, in accordance with Office today do not possess, as the result of the Constitution, all revenue measures must the Budget Act of 1921, the absolute power originate? of preaudit. Many people seem to think that In 1921 the Congress, glancing toward the before a disbursing cfficer of one of the future, made up its mind that in the interest executive departments can disburse money, of economy and orderly progress it should he must get the audit or permission of the have an agent of its own to audit the ex- Comptroller General. That is not true. When penditures as made in this vast bureaucracy. the Congress makes an appropriation for a To secure the assistance of such an auditor certain purpose, and the appropriation or they created this office. They took care to the bill has been signed by the President, make him absolutely independent of the offi- the department chief involved begins to cials whose expenditures he was to audit. study, or perhaps he has already studied, the To my mind, there is a very, very deep method and program for spending the money and fundamental issue involved in this situa- for the purpose intended. Let us say he is tion. It is involved not only to those who are the Secretary of Agriculture. When the concerned about the immediate present but Secretary of Agriculture has his plans made, to those who look along the vista of the he notifies the Treasury Department that the future. It is proposed now that the office be Department of Agriculture is ready to pro- abolished. It is proposed also that the Gen- ceed under this appropriation. The Treasury eral Accounting Office be abolished and that looks up the appropriation and sets out on there be substituted, if it may be called a the books of the Treasury the item of ap- substitution, a general auditor, how inde- propriation to the credit of the disbursing of- pendent of the several executive departments ficer of the Department of Agriculture; at it is difficult to state, but completely de- the same time the General Accounting Office pendent upon the Chief Executive; that he is notified of the readiness of the Secretary of shall conduct what might be called a post- Agriculture to proceed under the appro- audit of expenditures made by the disbursing priation and that office also sets up upon its officers of this huge bureaucracy and make books this credit to the disbursing officer a later report to the Congress. He shall not of the Department of Agriculture. be the agent of the Congress or its repre- The disbursing officer of the Department sentative and shall not be responsible to it of Agriculture, unless I am very much mis- in any fashion whatsoever. taken, is under bond, and he operates under Criticisms have been cast at the Office of what is known as a system of accountable the Comptroller General, ssparially hy this warrants. If he disburses money illegally, committee of three, who have charged that under this accountable warrant system, he the interposition of his functions in what can be held responsible. His bondsmen may they are pleased to call the executive de- be called upon to reimburse the Government partment of the Government has caused for the illegal expenditure and, of course, delay and confusion. the system extends out into the field where Perhaps you will bear with me if I at- local disbursing officers are established and tempt to give in a somewhat sketchy manner, they, too, may be held accountable. and subject always to correction and elabo- With the Comptroller's Office in existence ration by those who know more about it as it has been during the last 15 years, an than I do, some description of just how this overwhelming majority of the disbursing offi- thing has been working. cers of the executive departments, and espe- [Here the gavel fell.] cially the good disbursing officers, have taken Mr. WIGGLESWORTH. Mr. Chairman, I every possible means to ascertain in ad- ENACTMENT OF THE BUDGET AND ACCOUNTING ACT, 1921

v-nce whether the disbursement they are Mr. WADSWORTH. Yes. Now, I must about to make is legal under the act of the conclude in a few moments. Members of the Congress which made the appropriation. So Committee, it is now apparent, whether we what do they do? They ask the Comptroller like it or not, that the expenditures of the General to give them an opinion, and the Government of the United States for many Comptroller General examines the statutes, years to come will not fall below $7,000,- estimates the intent of the Congress, and 000,000 a year. When this Budget and Ac- then informs the disbursing officer that he counting Act was passed in 1921, the annual may or may not disburse the money in the expenses of the Government of the United method suggested by the officer. States were three and one-half billion dol- Of course, this has occasionally given rise lars, on an average. to delay, but I want to impress upon you the Already we have doubled that sum, and it fact that it has always been the result of the is apparent that, in accordance with the voluntary requests of the disbursing officers views of those now in power, there is to be addressed to the General Accounting Office no cessation, no substantial reduction in ex- to find out whether they can disburse money penditures for years to come. Moreover, it ' in a certain fashion or not. is now apparent that the functions of the ***** Federal Government, already multiplied most substantially through this depression, are Mr. COLDEN. Mr. Chairman, will the not to be reduced in number. Many erner- gentleman yield? gency departments or bureaus are to become Mr. WADSWORTH. I yield. permanent, if the recommendations of this Mr. COLDEN. May I ask the gentleman reorganization committee prevail. The prob- from New York whether it is his belief that lem becomes more and more immense. A the Comptroller General has functioned as a larger percentage of the people's money is representative of the Congress rather than being taken out of their pockets and brought an independent agency? I understood the to Washington in the form of taxes and then gentleman to say that the spirit and purpose spent. Bureaucracy is growing by leaps and of the original act was to have a represen- bounds, and when it grows by leaps and tative of the Congress to pass on these bills. bounds and escapes auditing control, man- Has he actually functioned in that respect? aged and governed by the legislative branch, Mr. WADSWORTH. I believe so; yes. then the legislative branch, just as sure as The Comptroller General in making these we are sitting here, becomes a rubber stamp. rulings upon the request of the disbursing There is no other end to it. ofFsers has done so as an agent of Con- If the Congress is to surrender its right to gress in protecting the funds. He certainly audit, through its representative, the expendi- has not been an agent of the executive de- tures of the money which it appropriates partment. with certain purposes in view, then the Con- The strength of his position is increased gress has lost once and for all its control of the purse strings. Gentlemen know as well by the fact that he is completely inde- as I do that Anglo-Saxon liberty has been pendent of the executive department. He is built from the beginning upon the theory not independent of Congress; he is our that unless the representatives of the people servant, our agent. We can remove him any control the purse strings, liberty will not sur- time by concurrent resolution or impeach vive. I am not talking about 1936 or 1938 or him. 1940, if you please. We might get along for I am not now saying that his performance a while, but inevitably, in the long run, the has heen 100-percent perfect. It has been a legislative branch and especially this House tremendous task, and he has had to move of Representatives must lose caste, lose slowly because it was all new. In performing power, and become subservient, not I ven- his functions he has protected the funds. ture to say, to a single Chief Executive, but ****e to a vast ever-growing bureaucracy, with its ENACTMENT OF THE BUDGET AND ACCOUNTING ACT, 1921

From Library of Congress collections Joseph (W.Byrns, Representative from Tennessee, 1909-36.

tentacles stretching out into every township become abject subjects of a bureaucracy in the land, clothed with power from time lies in maintaining in our system of govern- to time-at its own demand generally-to ment an auditor named by the Congress and control the daily life of the citizen and to responsible to the Congress. [Applause.] be free in the exercise of that power. The hope of control lies right here on this floor. The hope of the future in keeping our GOV- Joseph Wetlington Byrns ernment orderly, in conserving the wealth of the Nation, in seeing to it that we do not Worthy of rereading today is the

70 ENACTMENT OF THE BUDGET AND ACCOUNTING ACT. 1921 following summation by Mr. Byrns of career in national politics began in the importance of the budget system. 1909 with his election as a Democratic * * * it will not be contended by any Member of the House in the 61st Con- member of the Special Budget Committee gress. Defeating a Socialist, James L. that the bill proposed is perfect in all of Hardway, by receiving 18,240 votes to its details. Perfection can come only by the 506 for Hardway, he served for 13 process of evolution. It is expected that it succeeding terms until his death. He will be improved by amendment in the future in such manner as experience may was majority leader during the 73d demonstrate to be wise and proper. It is, Congress and the Speaker of the House however, confidently offered as a great im- in the 74th Congress. He was Chair- provement over the present system and in man of the Democratic National Con- the earnest belief that, if enacted, it will gressional Campaign Committee from bring about greater economy and better efficiency in the Government service. As has 1928 to 1930. been well said, its adoption will not re- When Mr. Byrns died in 1936 his quire the surrender of power by either funeral service was conducted in the branch of the Government, but it will en- Hall of the House of Representatives. able both the executive and legislative branches to understand each other and the public to understand both. New Federal ac- William Brockman Bankhead tivities, the constant drmand for the creation of others, and the enormous expenses made William B. Bankhead was a member necessary by the war make the importance of of a budget far greater to-day than ever be- the illustrious Bankhead family of fore. Our expenses to-day are far greater Alabama which included the actress, than our revenues, and the people demand Tallulah. He was the son of John Hol- that the most rigid economy shall be prac- lis Bankhead, a Representative and ticed. A budget system makes it possible Senator; the brother of Senator John to closely consider and study both the rev- Hollis Bankhead 11; and the uncle of enues and expenditures of the Government at one and the same time, and in this way Representative Walter Will Bankhead. only can we hope to bring about that econ- Mr. Bankhead was born in Moscow, omy which the people demand and have the Lamar County, Ala., on April 12, right to expect of their public servants? 1874. He graduated from the Univer- Joseph Wellington Byrns was born sity of Alabama and later from July 20, 1869, near Cedar Hill, Robert- Georgetown University Law School in son County, Tenn. He graduated from 1895. He was active in State politics Vanderbilt University law department and was elected to the 65th and 11 in 1890 and was admitted to the bar succeeding Congresses, serving from that same year. March 4, 1917, until his death in 1940, at which time he was serving as He served as a member of the State Speaker of the House. house of representatives and during Mr. Bankhead like Mr. Byrns was his third term in 1899 as the speaker. honored at his death with funeral serv- He also served in the State senate. His ices in the Hall of the House of Repre- ' Congressional Record. Vol. 58 (1919). p. 7088. sentatives.

71 General Accounting Off ice Officials

February 15. 1922

The following list is from .the OficiaE Register of the United States. 1921 Directory.

Annual Name ond office Tztle salary Office of Comptroller General J . Raymond McCarl Comptroller General of the United $10,000.00 States. Lurtin R . Ginn Assistant Comptroller General of 7,500.00 the United States. J . L . Baity ...... Assistant to Comptroller General . . 6,000.00 John M . Lewis ...... Assistant to Comptroller General . . 6,000.00 Rudolph L . Golze ...... Solicitor ...... 6,000.00 F. B . Kitterman ...... Chief clerk ...... 2,500.00 Carl Collier ...... Disbursing clerk ...... 3,000.00 E . F. Inbody ...... Chief. appointment division ..... 2,500.00 Mary G. Gilbert ...... Private secretary to Comptroller 1,800.00 General . Samuel T. Browne ...... Attorney ...... 4,000.00 Charles M . Foree ...... Attorney ...... 4,000.00 John C. McFarland ..... Attorney ...... 4,000.00 Noble Moore ...... Attorney ...... 4,000.00 Harvey A . Harding ..... Attorney ...... 3,100.00 Z . Lewis Dalby ...... Attorney ...... 3,000.00 Miss Clara Greacen ...... Attorney ...... 3,000.00 R . H . Hartshorn ...... Attorney ...... 3,000.00 Frank H . Bogardus ...... Special investigator ...... 3,000.00

Treasury Department Division W . M . Geddes ...... Chief of division ...... 3,000.00 C. C. Van Leer ...... Assistant to chief of division .... 2,250.00 Owen P . Kellar ...... Law clerk ...... 2,000.00 W . D . Fales ...... Chief of section ...... 2,000.00 C . C . Tyler ...... Chief of section ...... 2,000.00 L. T . Zbinden ...... Chief of section ...... 2,000.00 W . W . Matthews ...... Chief of section ...... 2,000.00

72 GAO OFFICIALSFEBRUARY 15. 1922

War Department Division W . H . Barksdale ...... Chief of division ...... $2,500.00 Byron Richards ...... Assistant to chief of division .... 2,250.00 S. B. Tulloss ...... Chief. law board ...... 2,500.00 E. V . Crittenden ...... Chief of section ...... 2,500.00 J . L . Anderson ...... Chief of section ...... 2,500.00 F. A . Seaman ...... Chief of section ...... 2,500.00 E . W . Moore ...... Chief of section ...... 2,500.00 W. E . Gordon ...... Chief of section ...... 2,500.00 C. K . Leffel ...... Chief of section ...... 2,250.00 H . D. Kizer ...... Chief of section ...... 2,250.00

Navy Department Division George McInturff ...... Chief of division ...... 2,500.00 Frank F. Conway ...... Assistant to chief of division .... 2,250.00 F. W . Alexander ...... Chief of section ...... 2,000.00 Roy F. Heck ...... Chief of section ...... 2,000.00 Ashley T. Hill ...... Chief of section ...... 2,000.00 S. S . Pletcher ...... Chief of section ...... 2,000.00 W . S. Shaull ...... Law clerk ...... 2,000.00

State and Other Departments Division W . S. Dewhirst ...... Chief of division ...... 2,500.00 w . w . Scott ...... Assistant to chief of division .... 2,250.00 L. 0. Robbins ...... Chief of section ...... 2,000.00 Melvin A . Wertz ...... Chief of section ...... 2,000.00 T. W . Gilmer ...... Chief of section ...... 2,000.00

Interior Department Division John K . WilIis ...... Chief of division ...... 2,500.00 C . L. Brockway ...... Chief of section ...... 2,250.00 P. E. Northrup ...... Chief of section ...... 2,000.00

Post Office Department Division Charles T. M. Cutcheon ... Chief of division ...... 2,500.00 Charles H . Cooper ...... Chief of section ...... 2,250.00 W. T. Murphy ...... Chief of section ...... 2,000.00 W. M . Murray ...... Chief of section ...... 2,000.00

73 J. PHILIP HORAN

The First Field Audits by GAO

This article describes the circumstances under which the original field audits of the General Accounhng Ofice were instituted and recounts some of the history connected with the very early field audit ofices. Most of the information is based on persod recollections. The information concerning the establishment of the first field audit ofice and the names of the GAO staff were furnished by John T. Burns, associate general counsel.

The emergency spending programs effect of the preaudit was to relieve the of the depression period of the 1930’s disbursing officer of liability for the provided the impetus for the first field payment, if made in accordance with audits of the General Accounting the preaudit certification. Office. In the early 1930’s all the au- Keep in mind that the preaudit pro- dits were performed in Washington cedure was used prior to the passage and the investigators were the only of the act of December 29, 1941, employees who worked in the field. which provided for bonded authorized At that time there were two types of certifying officers in the civil agencies audits: one a postaudit and the other a and relieved the disbursing officers of preaudit. The postaudit was an audit responsibility for payments made in after payment of the vouchers submit- accordance with the certifying officers’ ted in the accounts of the disbursing certifications. Prior to that time the officers. The preaudit was an audit be- disbursing officer had been responsible fore payment of vouchers approved for ascertaining that the voucher rep. and submitted to the GAO by the ad- resented a legal claim against the Gov- ministrative agencies. The vouchers ernment and he was not relieved of found proper were certified for pay- liability by the certification of the ment in the name of the Comptroller voucher by the administrative agency. General and forwarded directly to the The “New Deal” programs of the disbursing officer for payment. The early 1930’s resulted in manyfold in-

Mr. Horan is an assistant regional manager in the Denver Regional Office. He has been with the General Accounting Office since 1935. He was a reviewer in the Raleigh, N.C., field audit office of the Cotton Price Adjustment Payment Section in 1936, assistant chief of the Washington field office from 1936 to 1940, and chief of field offices at Jackson, Miss., and Lansing, Mich., in 1941 and 1942.

._ THE FIRST FIELD AUDITS creases in the volume of payments William H. Dewey, and Wilbur B. made by Government disbursing Ness.1 officers. They also presented new risks Allen Thurman, Proctor Reed, War- to the disbursing officer. Payments ren J. Moore, Evamonde Armstrong, were being rushed, regulations under James Felts, Arthur P. Fenton, Albert which payments were being made were J. Hendley, Elihu H. Moore, Clem frequently not clear, and the rapidly Huntoon, Carlisle T. Spiker, and EL expanding organizations of the Gov- Ziott T. Wooten were subsequent addi- ernment were being staffed with inex- tions from the Washington Office to perienced personnel. While the likeli- the staff. Clerical employees and comp- hood of erroneous payments was thus tometer operators were recruited lo- greatly increased, the probability of re- cally. The work was completed and the covery of overpayments from the pay- office was closed at the end of January ees was very poor because of their fi- 1935. nancial condition.

Preaudit of Cotton Price Preaudit of Tobacco Payments Adjustment Payments

Probably with these thoughts in The following year the Secretary of mind the Secretary of Agriculture re- Agriculture again requested that field quested the General Accounting Office offices be set up, this time to preaudit to set up a field audit office for the payments to be made at 10 locations purpose of preauditing rental and ben- throughout the cotton farming areas of efit payments to be made to farmers the South under the Cotton Price Ad- under the Tobacco Production Adjust- justment Program. The nucleus of the ment Program of the Agricultural Ad- staff was sent to each location in the justment Administration (AAA) . Lex- fall of 1935. Probably because the field ington, Ky., was the place where the work of the GAO had normally been AAA had its office for the audit and done by the investigators from the approval of the tobacco payment Office of Investigations, many of the vouchers. chiefs and assistant chiefs of the field The General Accounting Office parties were investigators. The Audit agreed and established the first field Division was given responsibility for audit office October 1, 1934, in the the audit, however, and a new section basement of the Federal Building, Lex- known as the Cotton Price Adjustment ington, Ky. Gary Campbell was the Payment Section was created to direct chief, and John T. Burns (now asso- The Comptroller General’s order directing travel ciate general counsel) was the assistant for this assignment provided: “While absent from your official headquarters. Washington, D.C.. pursuant to chief of the field audit party. Other this order you will each he allowed incidental trans- members of the original group were portation expenses including reimbursement of actual operating expenses, not exceeding the cost by common Charles K. Leffel, John T. Connolly, carrier, if travel directed is performed by automobile Frederic B. Hobson, Harold G. Stepler, and a per diem of $5 in accordance with the Standard- ized Government Travel Regulations.”

75 THE FIRST FIELD AUDITS the field offices. Gary Campbell, who cated in the North Central, Southern, had headed the field party at Lexing- and Western Regions of the Adminis- ton, was appointed chief of the section. tration, and for payments to be made Albert W. Perry was subsequently ap- from Washington to the farmers in the pointed assistant chief of the section. Northeast and East Central Regions. Shortly after the offices were set up Again GAO was asked to participate and before operations had really by establishing field offices to preaudit begun the programs of the AAA were the program payments. The coopera- attacked in the courts. The funds for tive arrangements under which the payments to be made to the farmers field offices operated on the Cotton were to come from processing taxes to Price Adjustment Program were again be collected under the Agricultural Ad- followed and in the summer of 1936 justment Act of 1933. On January 6, the initial staffs were sent to the field 1936, the Supreme Court, in the case offices. John E. Thornton, now the of United States v. Butler, declared un- Director, Field Operations Division, constitutional the portion of the act was a chief of field party on this pro- having to do with the collection of the gram. taxes. This delayed the payments, but The Cotton Price Adjustment Pay- only briefly. The Congress quickly ment Section was redesignated the Soil passed appropriations, meeting the re- Conservation Section. Gary Campbell quirements of the Court, to make the and A. W. Perry were continued as payments and GAO sent to the offices chief and assistant chief, and John T. the additional supervisory personnel Burns, Frederic C. Burgan, William 0. required for the preaudit. The AAA Hill, and Warren J. Moore were desig- detailed the auditors and clerical per- nated as regional unit heads. Edward sonnel to the GAO and all of the ex- T. Carr was the first administrative as- penses of the'offices were paid from sistant in the section. AAA appropriations. Most of the pay- A Washington field office was estab- ments under the program had been lished to preaudit the payments to be made by early summer and the major- made in Washington, D.C., to the ity of the GAO personnel were re- farmers of the Northeast and East turned to Washington. Central Regions, and also those of Alaska, Hawaii, and Puerto Rico. It The Soil Conservation Section was the largest of the field offices, and at its peak there were approximately 30 The Soil Conservation and Domestic GAO employees and 120 AAA employ- Allotment Act of 1936, providing for ees in the office. an even more extensive program of The field offices continued in opera- farm payments than had been made tion into the 1940's. As the emphasis under the earlier legislation, was of the program shifted from crop passed in February 1936. Plans were acreage limitations to maximum pro- made by the AAA for payments to be duction to meet the war needs the made from about 26 State offices lo- basis for payment was simplified. Field

76 THE FIRST FIELD AUDITS offices were consolidated and a portion early days are still with the GAO. of the GAO personnel shifted to the In addition to John E. Thornton and field offices of the War Contract Proj- John T. Burns, Myer Wolfson, regional ect Audit Section. The remaining field manager, Chicago, was an early mem- offices of the Soil Conservation Section ber of the GAO staff, and Charles E. were transferred to the Agency Audit Williams, International Division, was Section in about 1946 and by the time an AAA employee detailed to GAO in that section was consolidated with the the Washington Field Office. Ralph T. Field Audit Section in the summer of Carpenter recently retired from the 1950 all preaudit work had ceased. Office of the General Counsel was one As is to be expected, very few who of the first GAO employees in the were in the field organizations in those Washington Field Office.

The organization of the General Accounting Office originally adopted to carry on its functions and duties did not vary greatly from the organization of the old Auditors’ Offices under the Comptroller of the Treasury. This was prohably the result of lack of time to plan the organization, as the Budget and Accounting Act became effective July 1,’ 1921, 20 days after its enactment. In any event, the primary functions were performed by divisions corresponding to the respective offices of the auditors. Each division audited the vouchers and settled the claims and accounts relating to the respective departments of the Government with which it was concerned. The organization was strictly departmental in character.

Annual Report of the Comptroller General of the United States, 1947, p. 2.

77 COMPTROLLER GENERAL MC CARL'S FAREWELL MESSAGE

COMPTROLLLR GENRIU OF THE UNITLD STATIS WUHlNmON

June 50, 1936,

To the Officials and Rnployees

of the Oeneral Accounting Officr.

As we arrive at the first milestone in what I hope will prove to be the never-ending life of the Government's centralized and

independent accounting system, now fifteen years of age, I leave you with a feeling of complete confidence in your ability, capacity, and purpose not only to fully maintain the high level of efficiency

and effectiveness you have attained by your united and tireless ef-

forts, but to move constantly forward. Your opportunitiee to render beneficial service, while many, will ever increase ne your readiness

to serve, ability, and high purposes become better known.

An effective system for accounting control over the uses of the

public money8 is utterly essential to the success of our form of government - is essential to the success of any form of popular government - and while ours is far from complete aa now prescribed

by law, yet it is outstanding among the accounting systems so far

devised. Yerit its improvement through so discharging your respon-

sibilities as to fully justify the Congrees in its completion, and thus in affording your additional oppoftunities for beneficial serv-

la,.

78 COMPTROLLER GENERAL MC CARL'S FAREWELL MESSAGE

While the blind and selfish resistance to law enforcement in connection with uses of the public moneys which was 80 widely encountered during the organization period of the independent accounting syetem has in large measure subsided, the efforts appear- ing now to be directed upon the Congress, for broader administrative discretion and wider latitude in the spending of the public moneys - and, unfortunately, to have been meeting with considerable euccees, - when the time comes, as it must, that a Congress will determine to resist such importuning8 and to resume control and direction of usee of the public moneys, it must look to and depend upon the independent accounting system as its only means of exact- ing obedience to its laws. Be ready for that day. Don't fail that

Congress. And to that end it is of first importance that you do your full part toward maintaining and safeguarding the independence of the accounting eystem - independence from both Executive branch and partisan-political domination - ae either would work its utter undoing. You must expect periods of discouragement as the forces you must constantly combat are powerful and resourceful, and it may appear at times that even the Congress has deserted you, but don't give Up - don't even be downhearted - just keep fighting on for law observance and honesty in government. Fortunately, such diamal periode usually induce beneficial reactions so always remember that a resolute and purposeful Congress will seriously need an efficiently functioning accounting Bpetem. I know no words that will convey to you the extent of my gratitude for your helpfulnrss to me during the years of our service together. It has been an experience I shall never forget and shall always cherieh.

With all good wishes,

COrdia1lY YOWE,

troller General

79 W. C. EMM

Capsule History of the Denver Regional Off ice

GAO has 15 regional offices, each with a background of evolution peculiar to its geographical urea und Federal agency structure. The following sketch about the Denver Regional ofice appeared in that o‘ffice’s local newsletter Mile Highlights in September 1970.

The editor, under the false impres- which included Colorado, Montana, sion that I predate anything else New Mexico, Utah, Wyoming, and around here, asked me to prepare a part of Idaho. history of the Denver Regional Office. On July 1, 1956, the Office of Inves- I found this difficult to do since fact tigations was abolished and the investi- and fiction have merged, records are gative function was integrated with the nonexistent, and I’m not really that old accounting and auditing functions. nor am I one of the pioneers. (Incidentally, at an earlier time After asking around and contacting accounting and auditing functions some of the original members of the were carried out by separate groups Denver staff, I have learned that the and ultimately merged.) At the time of Denver Regional Office was officially the integration of the investigative designated as such in April 1952 by function, the personnel of the abol- the Office of Field Operations, Division ished division were transferred to of Audits. There were predecessor CAAD, DAAD, and FOD, and the audit groups which operated in the Denver office gained about 13 staff Denver area in the forties. They in- members. cluded a civilian payroll audit group The Air Force Accounting and Fi- and a Denver Area Office of the War nance Center (AFAFC) was estab- Contract Project Audit Section of the lished in 1951 and shortly thereafter Audit Division. In 1954, GAO regional a unit of the General Accounting Office, field offices in Albuquerque, Salt Lake designated as the Air Force Audit Sub- City, and Billings were merged with division, was established for the pur- the Denver office to form a region pose of performing centralized audits

Mi. Emm is a supervisory auditor in the Denver Regional Office. He is a graduate of Syracuse University (B.S. in accounting) and has been with GAO since 1955. He is a CPA in the State of New York.

80 THE DENVER REGIONAL OFFICE

of the accounts of Air Force finance operation and now GAO’s largest geo- officers. This GAO unit maintained graphical region with approximately vouchers and contractual documents, 815,000 square miles within its bor- performed settlement of accounts, and ders. conducted surveys of fiscal operations It is difficult to describe the changes of the Air Force, In January 1952, the over the years in personnel and the office was placed under the jurisdic- work performed by them. From heavy tion of the Director of Audits, Wash- workloads in the fields of payroll au- ington, DK., and was called the Air dits and detailed voucher examina- Force Audit Branch. Similar organization, we have progressed through tions in Indianapolis and Cleveland phases of broad installation examina- served the Army and Navy finance tions, contractor surveys, and reviews offices. directed toward developing reports on In June 1962, the records receipt individual deficiencies to broad world- and maintenance function was trans- wide reviews under lead region con- ferred to the Air Force and the em- cepts. While the basic functions of the ployees associated with that function region remain essentially the same, the were also transferred. On October 1, methods, techniques, tools, approaches, 1962, the office was transferred from and backgrounds of the audit staff are DAAD to Field Operations Division strikingly different from earlier days. and consolidated with the Denver Re- The changes parallel those experienced gional Office. It is now called the Air in the entire GAO organization for a Force Audit Staff. At its peak the func- period in which we were front runners tions of this Air Force audit group in the expansion of the audit concept required 165 employees. Changes in -from a voucher-checking operation functions and in audit approach have to comprehensive auditing, and, cur- resulted in a steady decrease of person- rently, to broad-based management re- nel since 1955 to the point where views. This change, and its impact about 38 employees are presently as- upon the entire accounting profession, signed to AFAS. is worthy of a discussion all its own, In its 16 years of operation since and perhaps at some later date we will consolidation in 1954, the geographic attempt a writing which does justice to boundaries of the regional office have this change. It is sufficient for now to changed several times. The latest state that we have come a long way. change, effective July 1, 1970, added We can still see ahead a long way and New Mexico and 10 western counties need only this backward look to know of Texas to the Denver Region, mak- that the improbable and the impossible ing it once more a border to border are really just new challenges.

81 The Seattle Regional Office

Under the title “We’re Half a Century Old,” the SRO Newsletter for April 1971 published the following historical re‘sum6 of the Seattle Regional Ofice.

Although GAO dates back to the Seattle. The investigators had separate Budget and Accounting Act of 1921, offices and operated independently of the Seattle Regional Office is much the War Contract Project Audit Office. younger. It came into existence in Bill Davies was a member of that 1952 as the Seattle Regional Audit group. Office, but had its beginning in resi- In February 1947, still another inde- dent GAO auditors who were assigned pendent group of GAO auditors, with to Seattle as early as August 1942. At Gus Stroh as chief of party, arrived to that time Paul Goshorn, auditor-in- open a resident Civilian Pay Audit charge, opened a War Contract Project Office in Seattle. Harry Ball was a Audit Office under the supervision of a charter member of this four-man staff. Western Zone office located in Los An- In January 1950, the War Contract geles, where Charles Bailey (the pres- Project Audit Office and the Civilian ent director of our Defense Division Pay Audit Office were merged into a in Washington) was in charge. John field office of the Division of Audits Thornton, who has been director of and were placed under the manager- Field Operations Division office since ship of G. Ray Bandy. In 1956, the it was created in about 1956, was in regional audit office absorbed the charge of the project office in Los An- Office of Investigations and all the resi- geles. In April 1943, G. Ray Bandy dent GAO staff were finally located in transferred from Edmonton, Alberta, one office. Appropriately enough, re- and took over the Seattle War Contract gional audit offices were then termed Project Audit Office. Jack Elrey, who regional offices. started with GAO in Washington, D.C., Bill Conrardy was transferred from in 1940, joined this office in 1944 and, Europe to become regional manager in other than for a 5-year tour of duty in 1959, and in May 1960, the 38 staff Paris, France, has been a member of SRO ever since. Bob Robeson, who members in Seattle merged with the 26 started with GAO in Washington, D.C., staff members in Portland to form a in 1942, joined the Seattle staff in late single region covering the entire 1949. Pacific Northwest and Alaska. Of these In April 1945, the GAO Office of 64 staff members, 26 are still with us Investigations opened a field office in today, yet our average age is 33 years.

82 THE SEATTLE REGIONAL OFFICE

The bulk of our regional family joined The 26 meeers (out of the current GAO in the Pacific Northwest after regional family of 1M) still with us 1960. We have grown younger while who were here when the Portland and as an organization we have matured. Seattle regions merged are:

Bill Conrardy Bill Henderson Harry Ball Joan Johns Bob Blackstone Dick Long Howard Boock Gary McGill Doug Cameron Lyle Nelson Walt Choruby Chuck Perry Dan Cowen Bob Robeson Irwin D’Addario Neil Rutherford Bill Davies Bob Sawyer Jack Elrey Sy Simon Redmond Everard John Sisson Al Finegold Helmer Tellhed Ray Hausler Carl Weber

83 GAO Honor and Service Awards 1971

The fifth annual GAO honor awards ceremony was held in the GAO auditorium on June 11, 1971. The Comptroller General, Elmer B. Staats, the Assistant Comptroller GeneraI, Robert I;. Keller, and the Director, Office of Personnel Management, Leo Herbert, presented the following awards: GAO Award for Public Service Comptroller General’s Award Career Development Award Distinguished Service Award Meritorious Service Award GAO Award for the Best Article Published in The GAO Review Special Educational Award The presentations were preceded by an address by the Honorable Chet Holi- field, chairman, Committee on Government Operations of the House of Repre- sentatives. Mr. Holifield’s address was printed in the Congressional Record for June 14,1971.

Recipients of awards and related citations follow.

GAO Award for Public Service

To recognize a private individual who has made a distinguished contribution to furthering the mission of the General Accounting Office.

DR. JOSEPH POIS Professor of Public Administration Graduate School of Public and International Affairs University of Pittsburgh

Over the past 40 years Dr. Pois has made a unique contribution to better management, both in the public service and in private enterprise, as top executive, as expert consultant, and as eminent educator. a4 GAO AWARDS

His public service includes high posts both in the Bureau of the Budget and in the State of Illinois where he served as Director of Finance. While with the Bureau of the Budget he had the leading role in developing Executive Order 8512, a precursor of today’s Joint Financial Management Improvement Program. Since 1967 Dr. Pois has provided invaluable counsel to managers of the General Accounting Office, bringing to bear his versatile talents in law, finance, education, and management. We look forward to his continued wise guidance as we face the challenges of the future.

Comptroller General’s Award

To recognize employees whose exceptional contributions to the mission of the General Accounting Office warrant acknowledgment of the highest order.

MARGARET L. MACFARLANE Chief, Legal Reference Services Office of the General Counsel

GI0 Watchdog Photo Comptroller General‘s Award: Mrs. Margaret L. Macfarlane, Chief, Legal Reference Services, Office of the General Counsel, honored for “demonstrated excellence during many years of dedicated service.” From the left: Dr. Leo Herbert, Director, Office of Personnel Manage- ment; Representative Chet Holifield, Chairman, Committee on Government Operations; Mrs. Macfarlane; and Elmer d. Staats, Comptroller General, before the Awards Ceremonies began.

85 GAO AWARDS

For her demonstrated excellence during many years of dedicated service and her outstanding contributions to the accomplishment of the mission of the General Accounting Office through her direction of the Legal Reference Services of the Office of the General Counsel. Mrs. Macfarlane’s unstinting efforts and her innovative talent for the continual improvement of this nerve center for the management of information vital to the proper consideration of the many legal and policy matters pertinent to our Government’s activities, her resourceful handling of many congressional and other requests for specialized legislative information, and her highly successful program for the professional orientation of new attorneys in the Office have won her the esteem of the legal profession, top officials within the General Accounting Office, and throughout the Government.

A. T. SAMUELSON Director Civil Division

For his distinguished and sustained service to the General Accounting Office and his leadership as Director of its Civil Division.

GAO Watchdog Photo Comptroller General's Award: A. T. Samuetson, Director, Civil Division, is honored “for his distinguished and sustained services to GAO.” Taking part in the ceremony were, from the left: Dr. Leo Herbert, Director, Offce of Personnel Management; Representative Chet Holi- field, Chairman, Committee on Government Operations; Elmer B. Staats, Comptroller Gen- eral; and Mr. Samuelson.

86 GAO AWARDS

A. T. Samuelson has earned this recognition by his outstanding qualities of leadership, by his sustained high-level performance, and by his unswerving devotion to the General Accounting Office. He has contributed immeasurably to improving financial management and program effectiveness in the conduct of myriad functions of the civil departments and agencies of the US. Government and has earned recognition in the Congress and in the executive branch for his objectivity and creative professional approach. Most importantly, Mr. Samuelson’s determined dedication to the work before him has served as an outstanding inspiration to the staff of the Civil Division.

Career Development Award

To recognize employees who by their efforts in developing their careers have contributed so significantly to the public service as to warrant special recognition.

MARVIN I. BROWN Supervisory Auditor Defense Division

In recognition of his career marked by outstanding dedication to accomplish- ing the mission of the General Accounting Office, superior competence in performing defense manpower audits, and continued concern for personal self-development and the development of others.

HAROLD R. FINE Supervisory Accountant Office of Personnel Management

In recognition of a career marked by notable and innovative contributions to the General Accounting Office in the development of a wide range of programs to further the professional development of the staff through in-house training, and in special commendation for his outstanding personal efforts to broaden his own background to insure the attainment of his goals.

87 GAO AWARDS

GAO Watchdog Photo Carem Development Award: Seated, from the left: Charles W. Moore, Jr., Supervisory Auditor, Civil Division; Roy J. Kirk, Supervisory Auditor, Civil Division; Mitchell E. McLaughlin, Jr., Supervisory Auditor, Atlanta Regional Ofice; and Daniel F. Stanton, Assistant Director, Civil Division. Standing, from the left: Clarence L. Forbes, Supervisory Management Analyst, Defense Division; Donald J. Vande Sand, Supervisory Auditor, Civil Division; Marvin I. Brown, Supervisory Auditor, Defense Division : Robert W. Hanlon, Assistant Regional Manager, Washington Regional Ofice; Harold R. Fine, Supervisory Accountant, Ofice of Personnel Management; and William J. McCormick, Jr., supervisory Auditor, Los Angeles Regional Ofice.

CLARENCE L. FORBES Supervisory Management Analyst Defense Division

In recognition of superior dedication to a career in the General Accounting Office distinguished by notable contributions to supply management reviews conducted by oiir Defense Division and, in particular, for outstanding efforts toward the planning and execution of our continuing management reviews of the phasedown of US. military activities in Vietnam.

ROBERT W. HANLON Assistant Regional Manager-Washington Field Operations Division

In .recognition of his outstanding dedication to a career in the General Accounting Office that has been distinguished by superior competence, enthusias-

88 GAO AWARDS tic participation in recruiting and training activities, and outstanding leadership in the professional development and motivation of the staff.

ROY J. KIRK Supervisory Auditor Civil Division

In recognition of rapid career development with the General Accounting Office marked by notable contributions to the development and conduct of reviews of the Office of Economic Opportunity and by active involvement in the recruitment, training, and development of professional staff.

WILLIAM J. MC CORMICK, JR. Supervisory Auditor-Los Angeles Field Operations Division

In recognition of superior dedication to developing a career marked by exceptional competence in a variety of diverse assignments, by selfless devotion to the development of professional staff, and by an active involvement in civic action programs to provide other young men with leadership training through community development.

MITCHELL E. MC LAUGHLIN, JR. Supervisory Auditor-Atlanta Field Operations Division

In recognition of sustained personal efforts and dedication to his career in the public service that has contributed notably to GAO defense audit effort in the field and, in particular, to the supply management activities of the Department of the Air Force relating to major aircraft and weapons systems at the Warner Robbins suboffice, Atlanta Regional Office.

89 GAO AWARDS

CHARLES W. MOORE, JR. Supervisory Auditor Civil Division

In recognition of his thorough dedication to a career exemplified by creative group leadership and superior competence in a variety of diverse assignments and by energetic participation in the recruitment, training, and development of professional staff.

DANIEL F. STANTON Assistant Director Civil Division

In recognition of outstanding contributions to the General Accounting Office and the Government at large in the course of a progressive career marked by superior organizational, administrative, and supervisory ability in the develop ment and execution of numerous highly technical reviews in the field of atomic energy programs.

DONALD J. VANDE SAND Supervisory Auditor Civil Division

In recognition of superior career attainment with the General Accounting Office marked by notable dedication and achievement in the conduct of reviews of the Office of Economic Opportunity and particularly in the development of new techniques for evaluating and reporting on the effectiveness of antipoverty programs.

90 GAO AWARDS

Distinguished Service Award

To recognize employees for their long and distinguished service with the General Accounting Office marked by their sustained high-quality performance and exceptional efficiency.

JOSEPH EDER VICTOR L. LOWE Regional Manager, Boston Associate Director Field Operations Division Civil Division

STEPHEN P. HAYCOCK STEWART D. MC ELYEA Associate General Counsel Regional Manager, Denver Office of the General Counsel Field Operations Division

FRED J. SHAFER Deputy Director Transportation Division

GAO Watchdog Photo Distinguished Service Award: Seated, from the left: Joseph Eder, Regional Manager, Boston Regional Ofice; Stephen P. Haycock, Associate General Counsel, Of- fice of the General Counsel; and Stewart D. McElyea, Regional Manager, Denver Regional Ofice. Standing, from the left: Fred J. Shafer, Deputy Director, Transportation Division; and Victor L. Lowe, Associate Director, Civil Division.

91 GAO AWARDS Meritorious Service Award

To recognize individual employees or groups for their superior performance, far above that ordinarily expected.

Ofice of Policy and Special Studies Ofice of Administrative Services Josephine M. Clark Theodora L. Brandy

Civil Division International Division Bernard A. Brady Alfred G. Mueller Benedetto Quattrociocchi Lawrence J. Sabatino

Defense Division Field Operations Division Raymond Dunham Kenneth Dobbs-Los Angeles Leon F. Hartley George D. Gearino-Atlanta John M. Hoover David A. Gray-Norfolk Curtis U. MacDonald Walter Ratzlaf-Seattle Paul S. Trapani-New York Ofice of Personnel Management Frank T. Davis

GAO Watchdog Photo Meritorious Sem'ce Award: First row, from the left: Bernard A. Brady, Civil Division; Theodora L. Brandy, Ofice of Administrutive Services; Josephine M. Clark, Ofice of Policy and Special Studies; Frank T. Davis, Ofice of Personnel Manugemnt; and Kenneth Dobbs, Los Angeles Regional Ofice. Second row, from the left: Raymond Dunham, Defense Divi- sion; George D. Gearino, Atlanta Regional Ofice; David A. Gray, Norfolk Reghnd Ofice; Leon F. Hartley, Defense Division; ad Curtis U. MacDonald, Defense Division. Third TOW, from the left: Alfred G. Mueller, Intemtionul Division; Benedetto Quattrociocchi, Civil Division; Walter Ratzlaf, Seattle Regional Ofice; Lawrence J. Sabatino, lnternutional Divi- sion; and Pad S. Trapani, New York Regional Ofice. John M. Hoover, Defense Division, was not present when the photograph was taken.

92 GAO AWARDS

GROUP AWARDS

COAL MINE HEALTH AND SAFETY ACT IMPLEMENTATION REVIEW

Field Operations Division-Norfolk Regional Ofice

In recognition of their meritorious service with the General Accounting Office marked by superior performance throughout the course of a review of the Bureau of Mines’ implementation of the Federal Coal Mine Health and Safety Act of 1969. Their final report on this congressional request study was of the highest quality despite an unusually restrictive reporting-time schedule and exceptionally difficult obstacles encountered in the study.

George J. Anthony John C. Payne Ivan L. Higgerson Hugh E. Brady, Jr. Janet B. Kellett William R. Powell

EMERGENCY SCHOOL ASSISTANCE PROGRAM REVIEW

In recognition of their meritorious service with the General Accounting Office marked by notable performance throughout the conduct of a review of grant approval procedures under the Emergency School Assistance Program. Their final report reflected high technical competence and outstanding coordination of findings.

Civil Division Harold L. Stugart James E. Kelly J. Kevin Donohue Norman F. Hey1 Thomas J. Jurkiewicz

Field Operations Division Atlanta Regional Ofice Kyle E. Hamm William M. Ball Talmage E. Cox Richard G. Hebert Ramon A. Looney

93 GAO AWARDS

Billy C. Bowles Robert J. Lane James C. Primm Athena B. Bradish Claude M. McGinnis Richard H. Swift John G. Thrasher

Dallas Regional Ofice Donald G. White Herschel1 M. James, Jr. Neely W. Tipton Mark J. Ables, Jr. James R. Hargrove Harry L. Holley William E. Bradley

Kansas City Regional Ofice Donald D. Whelan Marshall S. Picow

Philadelphia Regwmml Ofice James E. Caldwell Frank Parmet Robert G. Kleigleng Charles B. Marten, Jr.

Sun Francisco Regional Ofice Richard A. Sheldon David V. Peltier Joseph D. Biesi

FISCAL MANAGEMENT BRANCH REORGANIZATION STUDY

In recognition of their meritorious service with the General Accounting Office marked by unusual analytic skills, independence, and tact in the conduct of an independent organization and management survey of the Fiscal Management Branch, Transportation Division.

Transportation Division Ronald C. Mattlin Theodore N. Rose

94 GAO AWARDS

GAO Uatehdog Photo Receiving group auards [or Meritorious Seroice: From the left, seated: Theodore N. Rose, Transportation Division (Fiscal Management Branch Reorganization Study), and James C. Waters, Washington Regional Office (Oceanographic and Survey Ships Utilization Review). Standing: Harry F. Coffmm, C uil Division (Meat Consumer Protection Review) ; Harold L. Stugart, Civil Division (Emergency School Assistance Program Review) ; and George J. Anthony, Nor:olk Regional Office (Coal Mine Health and Safety Act Implementation Review).

MEAT CONSUMER PROTECTION REVIEW

In recognition of their meritorious service with the General Accounting Office marked by excellence in the pursuit of GAO audit objectives in connection with a study of the enforcement of Federal sanitation standards of meat-packing plants under the control of the Consumer and Marketing Service of the Depart- ment of Agriculture. Their precedent-setting report exhibited outstanding independent judgment and analysis and notable achievement in the establishment and effective utilization of agency contacts.

Civil Division Harry F. Coffman

Field Operations Division-Kansas City Regional Ofice Danny L. Statler Albert T. Wolters William A. Buschling Virgil N. Schroeder

95 GAO AWARDS

OCEANOGRAPHIC AND SURVEY SHIPS UTILIZATION REVIEW

In recognition of their meritorious service with the General Accounting Office marked by outstanding contribut:ons to the development, execution, and implementation of conclusions in a review of the utilization of oceanographic research and survey ships in the Environmental Science Services Administration.

Field Operations Division-Washington Regional Ofice

James C. Waters Joseph F. Brown

Award for the Best Article Published in The GAO Review

To recognize staff members, by cash awards, for the best articles published in The GAO Review during the calendar year 1970. Best article by an author 31 years of age or under: ‘“The Versatility of a Computer in Auditing” (The GAO Review, Fall 1970)

WARREN G. NOGLE Supervisory Auditor Field Operations Division-San Francisco

Best article by an author over 31 years of age:

“The Role of Professional Activities in Career Development”

(The GAO Review, Fall 1970)

Coauthors

WILLIAM D. MARTIN, JR. Assistant Director Organization and Management Planning Staff Office of the Comptroller General

J. DEXTER PEACH Assistant Director Civil Division

96 GAO AWARDS

C.40 Watchdog Photo Award for the Best Article Published in The GAO Review: From the left: I. Dexter Peach, Assistant Director, Civil Division ; Warren G. Nogle, Supervisory Auditor. San Francisco Regional Ofice; and Villiam D. Martin, Jr., Assistant Director, Organization and Man- agement Planning Staff.

Special Educational Award

To recognize exceptionally qualified staff members who have been selected to participate in special educational programs designed to prepare them for positions of significant responsibility at policymaking levels.

CAREER EDUCATION AWARDS PROGRAM

An interdisciplinary program conducted through several leading universities intended to broaden the outlook and deepen the understanding of capable young careerists in the public service who have potential for high-level policy and management positions.

FRANK BORKOVIC Supervisory Auditor International Division

97 GAO AWARDS

EDUCATIONAL PROGRAM IN SYSTEMS ANALYSIS

A program for Federal career personnel designed to develop a systems analysis capability applicable to public program analysis.

HERBERT R. MARTINSON Supervisory Auditor Field Operations Division, Los Angeles

CHARLES W. THOMPSON Supervisory Auditor Field Operations Division, San Francisco

GAO Watchdog Photd Special Educational Award: From the left: Edwin C. Eads, Assistant Director, Defense Division ; Frank Borkouic, Supervisory Auditor, lnternational Divlsion ; and Frank Chemery, Assistant Director, Defense Division. Herbert R. Martinson, Supervisory Auditor, Los Angeles Regional Ofice, and Charles P. Thompson, Supervisory Auditor, San Francisco Regional Ofice, were not present when the photograph was taken.

98 GAO AWARDS

INDUSTRIAL COLLEGE OF THE ARMED FORCES

This program plays an essential role in preparing selected military officers and civilian Government officials for high command and management positions in the increasingly complex field of national security.

EDWIN C. EADS Assistant Director Defense Division

NATIONAL WAR COLLEGE

A top-level interservice school for highly selected senior military officers and civilian career officials.

FRANK P. CHEMERY Assistant Director Defense Division

99 National Association of Accountants Conference Report

The 52d annual international confer- freely from Shakespeare’s “Julius ence of the National Association of Caesar,” he illustrated five persuasive Accountants was held in Honolulu, Ha- tactics used by Mark Antony to turn a waii, from June 20 to 24, 1971. The hostile and angry Roman crowd to his following GAO staff members at- favor and have them overthrow Cas- tended : sius, Brutus, and the other conspira- A. T. Samuelson, director, Civil tors. Division The first persuasive tactic is to listen Max A. Neuwirth, associate direc- before speaking. He stated that in tor, Civil Division order to communicate with our asso- William D. Martin, Jr., assistant ciates we must develop the capability director, Office of the Comptrol- to listen without interruption. This ler General tactic enables us to understand the sub- Frank M. Zappacosta, assistant ject matter of the discussion and pre- director, International Division pare appropriate comments. The Jack L. Mertz, special assistant to second tactic is to acknowledge the the director, Civil Division truth of the other person’s statement or Donald M. Mutzabaugh, special argument. Through the use of this assistant to the director, Civil tactic, we can neutralize the individu- Division al’s emotional attitudes and appeal to Gerard J. Wilker, supervisory his sense of logic. By then employing auditor, Civil Division the third tactic of adding to the other person’s argument and agreeing with Some items of interest follow. some of his arguments, we can further disarm the individual’s emotional atti- How To Persuade tudes and create a picture of ourselves as fair and reasonable individuals. Jay L. Beecroft, Director of Educa- Mr. Beecroft stated that once we un- tion and Training, 3M Company, St. derstand the individual’s argument and Paul, Minn., gave the opening address have neutralized his emotions and cre- entitled “The Second Greatest Sales ated a favorable picture of ourselves, . Presentation of All Time.” Mr. Bee- we must then turn the individual to croft stressed the importance of per- our favor. We must first tell stories of suasion in communicating with and things that happened in the past and motivating associates. By quoting create a picture. People do not think in

100 NAA CONFERENCE REPORT terms of words, but in terms of pic- straints on exports can help preserve tures and pictures enable the individ- trade liberalism for a long time to ual to relate to our point of view. Fi- come. He said that Japan is imposing nally, Mr. Beecroft stated that we must voluntary restraint on steel exports to introduce the key evidence. By build- the United States and expects to im- ing our theme gradually and then in- pose similar restraint on textile expopts troducing the key piece of evidence we in an attempt to soften the impact tem- will turn the individual to our favor. porarily and to help reduce the burden Mr. Beecroft concluded his address of adjustment on import-competing in- by noting that we are all salesmen to dustries. While importing countries are the extent that we must sell ourselves, obliged to bring about industrial our ideas, and our services. He be- shifts, he continued, exporting coun- lieves that we can be more persuasive tries are urged to fulfill their responsi- in our dealings with our associates by bilities to use restraint in the cases employing these tactics. where flooding the market with a foreign product would cause severe fric- tion in the industrial life of the im- Tokyo Banker Urges Restraints porting country. This would enable trade liberalism to survive a long, long Speaking on “World Trade in the time. Seventies,” Sumio Hara, President of Mr. Hara cited the need for another the Bank of Tokyo, stated that the international round of large-scale tariff mainstays of trade policy are, without reductions on the order of the so-called doubt, liberalism and free competition. “Kennedy Round” achieved in the Mr. Hara believes that liberalism needs 1960’s. He said that trade restrictions to be upheld, reevaluated and acceler- went hand in hand with the depression ated more and more. He blamed the of the 1930’s and that the postwar era recent foreign exchange crisis in Eu- of freer trade has been prosperous. rope on massive international move- Consequently, Mr. Hara believes free ments of volatile short-term funds trade should be propelled forward so from country to country mainly that the nations of the world may through the Euro-dollar market and enjoy stronger competitiveness and re- called on the major industrial nations sultant higher prosperity. to regulate the Euro-dollar market in a concerted effort to restrain that movement of funds. Mr. Hara stated that Cost Accounting Standards for the United States should endeavor to Governrnent Con tracts correct its balance of payments and improve its trade balance by strength- Alan Peterson, Partner, Arthur An- ening the competitive position of ex- dersen & Co., Chicago, Ill., urged ports by containing domestic inflation- members attending the session on Cost ary pressures and restraining invest- Accounting Standards for Government ments abroad. Contracts to become involved in the Mr. Hara believes that voluntary re- activities and regulations to be devel-

101 NAA CONFERENCE REPORT oped by the Cost Accounting Stand- In conclusion, Mr. Peterson stated ards Board. that the Cost Accounting Standards Mr. Peterson stated that the man- Board has a modest staff for the job date from Congress to develop the first ahead, and the Board is relying on set of cost accounting standards for help from the various accounting or- defense contracts is an enormous task, ganizations throughout our country. and the Cost Accounting Standar,ds All professional and industrywide or- Board faces a tremendous challenge. ganizations should develop their views He stated that the cost standards must of cost accounting standards and each be for the future. The Board members organization should present its ideas and the top-level staff must develop a and its standards to the Board. judicial attitude toward their task, lay James 0. White, Jr., Director of aside past personal experiences, and Government Finance Relations, Lock- rise to the opportunity for significant heed Aircraft Corporation, adopted a improvement in cost accounting. Mr. more controversial stand on the Board Peterson believes that preoccupation and its definitions of cost standards. with the past, at the expense of the He said that industry had not been future, has been one of the main rea- consulted in the formation of the sons the Accounting Principles Board Board and consequently the cost stand- of the AICPA has had so little success ards M-ill not be representative of in- in developing principles for overall re. dustry’s point of view. porting. Mr. White stated that the Board Mr. Peterson believes cost standards should consolidate what has already must begin with broadly based princi- been written on the subject of cost ples and must not try to be uniform accounting and should use this as a cost accounting systems. Uniform sys- basis for its standards. The Armed tems cannot be developed because of Services Procurement Regulation has the wide variety of industries provid- set forth the cost standards of most ing the goods and services necessary Government contracts and industry has for the national defense. spent much time and money in the in- terpretation and understanding of Mr. Peterson also stated that the these regulations. cost accounting standards developed If the Cost Account- ing Standards Board now formulates must be fair to the contractor, the Gov- new standards, this will result ernment, creditors, and the public. in more costs to industry. There must be a mechanism for timely change of cost standards to insure that fossil-like rules are not permitted to Financial Reporting by Segments remain. In addition, he believes that to Shareholders and cost standards must be appealable to the Public courts or administrative boards in order to provide a relief valve for Under the chairmanship of Dr. standards which prove to be inequita- Alfred Rappaport, Professor of ble. Accounting and Information Systems,

102 NAA CONFERENCE REPORT

Northwestern University; Stanley Mr. Parker stated that he was in Rosch, Senior Vice President and Con- favor of financial reporting by seg- troller, Castle and Cook, Inc., Hono- ments because it presented more de- lulu, Hawaii; and C. Reed Parker, tailed financial information to the Vice President, Duff, Anderson and investor and the investment analyst. Clark, Inc., Chicago, Ill., discussed the The investor is looking for maximum merits of financial reporting by seg- performance with minimum risk, in- ments to shareholders and the public. creased dividends and interest, and Mr. Rosch stated that it is no longer capital appreciation. Detailed financial a question whether financial reporting reporting by segments will enable the should be by segments, since many investor to determine which segments companies now do so as required by of his investments are producing re- the Securities and Exchange Commis- sults and meeting his investment objec- sion. However, Mr. Rosch had some tives. reservations about segment reporting. Mr. Parker stated that the invest- He stated that there appear to be no ment analyst correlates the individual restrictions as to who would use this company results with economic devel- information after it is published. Such opment, and, like the individual inves- a situation could create problems since tor, relies on segmented financial re- projections in statements may not al- porting to inform him of the contribu- ways prove true. In addition, disclo- tion of various product lines to the sure of detailed data could mislead growth of the economy. Segmented readers because this type of data does fi- not have the same accuracy as pub- nancial reporting facilitates the correla- lished financial statements. Segmented tion of past performance with current and detailed financial reports have economic conditions, determines the been accurate enough for internal profitability of product lines, and as- usage in the past but they may be mis- sists in the evaluation of the risk in- leading to outsiders. volved.

103 in August Law 91-370) was passed by the Con- Chairman of the Board, announced establish- gress following an 18-month study by the Board had selected Arthur Scho nt of the Cost Accountine Standards the General Accountina OIfce under- hut as Executivesecretary. 1 ince 1950. Until 1

addittonal-~~~~ -. me~~ ~ accounting profession; one is to be amendments to the Defense Production Since 1967 he has been Deputy Co of industry: and one Act, approved August 15, 1970. Funds troller of the Atomic Energy Co Federal department or for the establishment of the Board were sion. aonroved recently bv the Coneress. MI. Schoenhaut received his B.B

Organizational Changes in GAO 3. The Division of Financial and General Management Studies The following organizational was created to carry on the re- changes uere made in GAO as of July maining functions of the former 1, 1971. Office of Policy and Special 1. The Office of Policy and Pro- Studies, as follows: gram Planning was formed to: Financial management improve- -Advise and assist the Comp- ment troller General and the Deputy ADP studies Comptroller General in (1) Systems analysis policy formulation, guidance, Actuarial work and review with respect to all Statistical sampling advisory GAO functions, (2) establish- services ing long-range objectives and Intergovernmental relations direction-of-effort planning, 4. The Office of Policy and Special and (3) formulating the an- Studies (originally established in nual budget. 1956 as the Accounting and Au- -Conduct internal reviews of all diting Policy Staff) and the Pro- GAO operations. gram Planning Staff (established -Coordinate the preparation of in 1966) were superseded by the GAO publications as assigned new organizations. by the Comptroller General, 5. To head up the new organiza- including the Comptroller tions, the Comptroller General General’s annual report and designated : The GAO Review. E. H. Morse, Jr., director, Office 2. The audit policy functions of the of Policy and Program Plan- former Office of Policy and Spe- ning. cial Studies and the functions of Donald L. Scantlebury, director, the former Program Planning and Staff were transferred to the Frederic H. Smith, deputy direc- Office of Policy and Program tor, Division of Financial and Planning. General Management Studies.

104 NEWS AND NOTES

Deputy Comptroller General capsuled in handouts. They are deliberately low-keyed, unaccompanied by press releases On July 9, 1971, as authorized in and full of technical details. The facts are there hut they have to be dug out. Con- the Legislative Branch Appropriation gressional investigators esteem them, noting Act, 1972 (Public Law 92-51), the that they never have to worry about errors title of the number two position in the which may boomerang. General Accounting Office was changed from Assistant Comptroller GAO Reports on General to Deputy Comptroller Gen- Foreign Assistance Programs eral of the United States. This position is currently held by The Senate Committee on Foreign Robert F. Keller. Relations has printed’ a compilation The change was proposed by the of summaries of GAO reports on re- Comptroller General during hearings views of various aspects of US. eco- on GAO’s 1972 budget before the Sub- nomic, military, and related foreign as- committee on Legislative Branch Ap- sistance programs. The compilation re- propriations of the House Appropria- lates to reports issued from 1965 tions Committee. Mr. Staats stated: through 1970 and is a useful reference What we would like to do would he to document pertaining to independent re- redesignate Mr. Keller’s title as Deputy vieus of t5is comp!ex area of Federal Comptroller General of the United States. Government operations. This title I think is in general use in Gov- ernment in different agencies and would also In a forejrord to the compilation, remove some slight confusion that exists the chairman of the committee, Sena- today where we have an assistant to the tor J. W. Fulbright of Arkansas, Comptroller General and that sometimes is stated: not differentiated from the post Mr. Keller holds, which is the deputy in our office. Taken together, these findings and recommendations tell a tale of bureaucratic woe, In approving the change, the com- mismanagement, and inefficiency-feebly at- mittee noted that “The change in title tempting to promote a sort of up-dated ver- does not create a new position nor sion of “dollar diplomacy.” More than this, the GAO’s compilation tells a tale of dis- does it abolish an existing one and it regard for congressional intent and of the involves no change in salary.” (H. use of foreign aid funds as a kind of diplo- Rept. 92-236 1 matic pork-barrel. This compilation is, in short, a catalog of our foreign aid ills-some of which have Characterization of been self-inflicted, others of which have GAO Reports been contracted with the help of some of our staunchest “allies.” He also stated: Writing about GAO and its 50th anniversary in the June 29, 1971, issue As a final word, I wish to express, on he- of the Chicago Tribune, Willard Ed- half of the Foreign Relations Committee, our wards observed: “United States Economic and Mditary Foreign Assislance Programs-Compdation of General Aceount- GAO reports irritate those members of ing Office Rcpm Findings and Recommendatrons.” the Washington press who I’ke their news Committee- Print. 92d Conk., 1st sesc., March 29, 1971.

105 NEWS AND NOTES confidence in the competent and professional While absolute denial of access to a docu- manner in which the General Accounting ment is quite rare, our reviews are ham- Office has fulfilled the committee’s many pered and delayed by the time-consuming requests. The Comptroller General, Mr. tactics employed by the various organiza- Elmer Staats, exemplifies this competence tional elements within and between these and professionalism and the committee is departments. These delays occur in the deeply indebted to him and to his staff. screening of records and in making decisions as to whether such records are re- leasable to the General Accounting Office. Executive Privilege It is not unusual for our auditors to re- and GAO Access to Records quest access to a document at an overseas location and be required to wait several S. 1125 was introduced in the 92d weeks while such documents are screened up the channels from the overseas posts and Congress to amend title 5 of the U.S. through the hierarchy of those departments. Code to provide that no employee of e*++* the executive branch summoned or requested to testify or produce docu- Although the Departments of State and ments before the Congress or its com- Defense indicate in their directives that it mittees shall refuse to do so on the is their policy to provide maximum cooperation and assistance to the General Account- grounds that he intends to assert exec- ing Office, we have found it quite diflicult utive privilege, and no such employee to obtain the information which we need to shall assert the privilege unless at the conduct our reviews relating to foreign as- time it is asserted he presents a state- sistance activities. ment signed personally by the Presi- dent requiring that executive privilege Policy of Obtaining Advance be asserted as to the testimony or doc- Comments on GAO Reports ument sought. In testifying on this bill on July 28, The GAO policy of seeking com- 1971, before the Subcommittee on Sep- ments on its report drafts from Fed- aration of Powers of the Senate Com- eral agencies or others concerned be- mittee on the Judiciary, the Deputy fore the reports are placed in final Comptroller General, Robert F. Keller, form for transmission to the Congress commented on GAO problems on became the subject of public discus- access to Federal agency records as sion and some criticism earlier this follows: year. The discussion was stimulated by For the most part, refusals by the execu- the Comptroller General’s report on tive branch to grant us access to records the GAO defense industry profit study have been premised upon departmental de- (B-159896, Mar. 17, 1971). Drafts of cisions that grant of access would not be in the public interest rather than a formal this report were made available to the claim of executive privilege. Department of Defense and other Fed- In recent years we generally have had eral agencies and to a number of in- good cooperat on in obtaining access to dustry associations. Differences be- the records of the executive departments ex- theen the final official report and the cept for the Department of State and the Department of Defense in those areas which advance drafts exposed for comment involve our relations with foreign countries. led to charges of acceding to Pentagon

106 NEWS AND NOTES

and industry.- “pressure” and a “soften- nificance, it is essential that all the relevant ing” of the final report-all of which facts be ascertained and that they be prop- were groundless. erly evaluated. In our opinion, it is prema- ture to report to the Congress our findings, The House Government Operations conclusions, and recommendations on the Committee held a hearing on the mat- basis of information gathered at various ter on March 26, 1971. The Comptrol- agency or contractor operating levels with- ler General, Elmer B. Stauts, testified out considering any additional pertinent information which may only be secured from at some length on the handling of the top agency or contractor officials. defense industry profit study report. The practice of obtaining advance com- Of particular interest was the follow- ments on drafts of our reports before is- ing lucid explanation of GAO’s general suance as final reports and giving objective policy of seeking comments on report consideration to those comments provides drafts. additional assurance that our reports are The practice of obtaining comments from fair, complete and objective. affected parties on proposed audit reports Another very important consideration, it is one of long standing within the GAO and seems to me, is the fact that obtaining com- it goes even further back in the public ac- ments and reactions in advance enables us counting profession, just how far I do not to present to the Congress in one document know. It is interesting to note that as early the whole package-the facts as we found as 1935 the Congress, in an amendment to them, our conclusions from those facts, our the Tennessee Valley Authority Act, specifi- recommendations for corrective action and cally prohibited issuance of reports on GAO the head of the agency’s position on the audits required in the Act until TVA “shall matter. If a disagreement exists between have had reasonable opportunity to examine the Comptroller General and the agency the exceptions and criticisms* * *, to point head, the report reflects it, and the Com- out errors therein, explain or answer the mittee or Member is then in position to same, and to file a statement which shall be evaluate the issues from a study of the submitted by the Comptroller General with document in hand. his report.” The practice became written From time to time we will have excep- policy of the Office when it was incorpo- tional situations in which we find it ap- rated into internal instructions to the Ac- propriate to proceed without awaiting for- counting and Auditing staff in 1954. This mal agency comment when formal com- policy became applicable to contract audit ments are unreasonably delayed. However, reports in 1955. Prior to that time it was the substance of a proposed report would fairly common practice to obtain oral and in all cases be discussed with top agency sometimes written comments from agency officials. In the unusual cases, when we officials and contractors on specific matters as the individual audit manager may have proceed without formal comment, we at- felt it was desirable. tempt to give the agency advance notice and Although I can claim no responsibility indicate in the report why comments have for instituting such a policy, I examined not been received. this policy carefully when I became Comp- troller General in 1966. I endorsed the policy At the conclusion of the hearing, the and have retained it. chairman of the committee, Chet Holi- A review of the auditors’ findings and field, stated his “complete support for conclusions by the person or organization the Comptroller General and the proce- on whose records and operations we are dures used in handling this report and reporting is desirable for a number of reasons. Since our reports deal with highly the findings and recommendations he important matters, frequently of national sig made.”

107 NEWS AND NOTES

New Newsletter does not conform with what the text- on Management Improvement book writers picture as ideal for the motivation of human effort,” he cites The Office of Management and the following as “positive and substan- Budget has inaugurated a Management tial satisfactions that hold men and Improvement Newsletter. The letter is women in the Federal service and mo- to be issued from time to time “to tivate them.” communicate informally with the man- -First, these men and women exhibit an agement staff of other Government innate desire to achieve; they were born agencies and exchange information with a desire to get ahead. that will help reduce costs and increase --Second, some substantial proportion of efficiency in the Federal Government.” the men and women who reach the The ,first issue was released in May top levels of the Federal civil service place relatively high value on security. 1971. It should be a useful way to -Third, a more positive stimulus is the exchange ideas and improve communi- opportunity for professional accomp- cations on the never-ending job of cut- lishment. ting costs and increasing the efficiency -Fourth, a large proportion of the top of Government operations. level civil servants are motivated by a commitment born of a deep faith in what they are doing. -Finally, many of these men and women Motivation get satisfaction, even thrill, out of the of Federal Employees opportunity to serve the public interest.

Writing in the May-June 1971 issue Mr. Corson concludes : of Personnel Administration, John J. If political leaders are to discharge the Corson of Fry Consultants, Inc., in- responsibility that . . . is theirs, they must quires into the apparent failure of understand the motivational forces that are at hand and supply the stimuli that will Government leaders to motivate top turn on these able, top-level, career people, level civil servants. In his article “A not turn them off. These forces are real and Neglected Element of Political Leader- substantial, but they cannot be applied as ship,” he attributes this failure to un- readily as the cash bonuses and stock op- familiarity with the environment of tions available to many in industry. The kindling of the motivational forces that ob- Government service. Noting that “The tain in the Federal government requires environment within the Federal service thought and subtlety.

168 By JUDITH HATTER Assistant Chief, Legislative Lligest Section, Ofice of the General Counsel

Rural Telephone Bank for commodities and services on the procurement list among qualified non- To provide an additional source of profit agencies for the blind or such financing for the rural telephone pro- agencies for other severely handi- gram, Public Law 92-12, May 7, 1971, capped. The Comptroller General is 85 Stat. 29, establishes the Rural Tele- provided access to the records of each phone Bank. The Bank is to be a agency so designated by the Committee wholly owned Government corporation and of the Committee itself for pur- until 51 percent of the class A stock poses of audit and examination. has been retired and thereafter a mixed-ownership Government corporation subject to audit by the General Government Procurement Accounting Office under the provisions Commission of the Government Corporation Con- trol Act. Public Law 91-129, November 26, 1969, was amended to provide for an extension to December 31, 1972, of the Committee for the Purchase of date on which the Government Pro- Products and Services of the curement Commission is to submit its Blind and Other Severely final report (Public Law 9247, July Handicapped 9, 1971, 85 Stat. 102). The Comptrol- ler General, a statutory member of the Public Law 92-28, June 23, 1971, Commission, in stating his views on 85 Stat. 77, amends the Wagner-O’Day the pending legislation said, “* * * it Act to establish the Committee for the is my opinion that the broad and Purchase of Products and Services of the Blind and Other Severely Handi- searching inquiry into nearly every capped. The Committee, among other aspect of Government procurement things, designates a central nonprofit necessary to achieve the enumerated agency or agencies to facilitate the dis- policy justifies the extension provided tribution of orders of the Government for in the bill.”

109 HEARINGS AND LEGISLATION

Defense Industry Profit Committee on Congressional Opera- Study tions since its establishment by the Legislative Reorganization Act of On March 26, 1971, Elmer B. 1970, the Comptroller General testified Staats, Comptroller General of the on June 21, 1971, regarding proposals United States, appeared before the to change the fiscal year to parallel the Subcommittee on Legislation and Mili- calendar year. Mr. Staats suggested a tary Operations of the House Govern- limitation on the period during which ment Operations Committee to discuss authorizing legislation may be consid- critical comments and allegations of ered in order to insure ample time for pressure from defense contractors and consideration of appropriation bills. the defense agencies relative to the (Other participants: Messrs. Maycock GAO report of March 17, 1971, on the and Thom,pson.) defense industry profit study. (Other participants: Messrs. Keller, Dembling, Morse, Bailey, and Flynn.) President’s Departmental Reorganization Program

Defense Procurement and Paul G. Dembling, general counsel, Government Contracting appeared before the Subcommittee on Practices Legislation and Military Operations of At the request of the Subcommittee the House Government Operations on Priorities and Economy in Govern- Committee on July 8, 1971, at hear- ment of the Joint Economic Commit- ings on the President’s Departmental tee, the Comptroller General discussed Reorganization Program to present GAO reports concerning the acquisi- views on the administrative provisions tion of major weapons systems, the of four bills introduced to carry out feasibility of making “should cost” re- the program. Milton J. Socolar, deputy views in the auditing and pricing of general counsel, appeared before the negotiated contracts, a congressionally subcommittee on July 22, 1971, to con- directed study of profits earned on de- tinue the discussion (Other partici- fense contracts, and a related GAO-hi- pants : Messrs. Ahart, Higgins, and tiated study of the return on capital of Thompson.) a selected group of individual contracts, at a hearing on April 29, 1971. Postal Service Facilities (Other participants: Messrs. KeZler, Leasing and Construction Dembling, Bailey, Bell, Gutmann, At the request of the Subcommittee Hammond, Flynn, Rothwell, Stolarow, on Investigations and Oversight of the Marvin, Gentile, Wolen, Pines, Ritchie, House Committee on Public Works, and Fitzgerald.) the Comptroller General appeared on July 14, 1971, to discuss the policies Calendar Year as Fiscal Year and practices followed by the Postal for Government Service in leasing and constructing fa- At the first hearing held by the Joint cilities, and the relationship between

110 HEARINGS AND LEGISLATION

gram in Vietnam based on initial sur- Vietnam Pacification and vey work performed by GAO staff in Development Program Vietnam. (Other participants: Messrs. On July 16, 1971, Oye V. StovaEZ, Duff and Thompson.)

Internal Audit

As mentioned in previous Reports, I am particularly interested in the proper development and efficient operation of internal audit in departments and authorities. Due cognisance is taken by my Office of the adequacy and effectiveness of internal audit when planning ap- praisals of the overall system of financial control. . . . I have expressed concern that there are some instances in which the effectiveness of internal audit is below the standard that might be reasonably expected.

From the Report of the Auditor- General of Australia, 1969-70.

111 Savings on Maintenance cif contract for computer equipment main- Computer Equipment tenance to the Comma Corporation of New York City. The Administrator re- On April 3, 1968, the Comptroller ported that the contract will result in General issued a report to the Con- an estimated savings of $97,000 during gress on “Maintenance of Automatic the period from June 1971 through Data Processing Equipment in the June 1974. Federal Government” (B-115369). The Administrator also reported that This report was based on a review con- the contract is a significant break- ducted by the ADP group of the Office through since this is the first instance of Policy and Special Studies and the where general purpose computer San Francisco Regional Office. equipment owned by the Veterans Ad- The report emphasized the monetary ministration will be maintained by a and operational advantages that are contractor other than the manufac- being realized by a few computer in- turer. stallations which have adopted a policy of in-house maintenance for their equipment. The report also discussed Views on Computer Management the major factors to be considered in making maintenance decisions and rec- Following hearings by the Govern- ommended that each Federal agency ment Activities Subcommittee of the establish procedures for arriving at the House Government Operations Com- most advantageous decisions for main- mittee in May 1971, Congressman Jack tenance of its ADP equipment. Brooks, chairman, stated: On January 7, 1970, Donald E. The United States is the world’s leader Johnson, Administrator of Veterans in computer technology and use. Broad segments of our economy and most of the Affairs, informed the Comptroller Gen- nation’s new weapons systems rely upon eral that the Veterans Administration computers. Furthermore, computer tech- (VA) was exploring all possibilities niques offer vast potential in the solution of for computer equipment maintenance. many of the extremely difficult social prob- On June 10, 1971, Mr. Johnson noti- lems presently confronting the nation. If the nation loses its leadership in com- fied the Comptroller General that the puter technology-if we become a second- VA has awarded a competitively bid rate computer power-we will become a sec-

112 AUTOMATIC DATA PROCESSING wid-rate nation, both economically and mili- Our hearings today indicate significant tarily. Yet, despite the vital importance of improvements in most areas coming within computers to Our society, there is no dkc- the coordinated management system we es. tive policymaking structure in the Federal tablished in 1965. Yet, as most of the Government to guide the nation in the witnesses agreed, there are difficult prob- optimum exploitation of these techniques. lem areas and much remains to be done if On management Of computers in the the taxpayers’ multibillion dollar investment Government, Mr* Brooks in the Federal Government’s computers is stated: to be managed efficiently.

Full and Objective Disclosure

No purpose is served in not making a full accounting of the facts to the public even though at the moment knowledge of all the facts may be distasteful to that public. This is the newer look of accounting reports. Neither the government and its representatives nor corpora- tions or other institutions should be permitted to slant internal accounting reports on the effectiveness of management. To do so is to ignite a time bomb that will explode at a later date.

Leonard Spacek Senior Partner, Arthur Andersen & Co. Speaking on “Util’zing What Is New in Accounting” in the GAO 50th Anniversary lecture series on July 15, 1971.

113 SYSTEMS ANALYSIS

The Congress objectives are being defined and chal- and Systems Analysis lenged. If we are to minimize error in this and avoid “bandwagon” tactics, This subject was discussed by Keith the rational processes for analyzing Marvin, associate director, Office of and disseminating information about Policy and Special Studies, during the the potential effects of our objectives orientation phase of the Civil Service and resource allocations must be Commission’s educational program in efficient, timely, and responsive. systems analysis on May 20, 1971. Ex- When we talk about priorities, we cerpts from Mr. Marvin’s discussion are talking about budgetary and legis- follow. lative decisions and the reasoning on Any statement about the need for which these decisions are based. For systems analysis by the Congress as a example, balancing our objectives of whole, without considering the views price stability and full employment of each of its 536 individual Members, must enter into the budget decisions. is open to many challenges. Perhaps The impact on business budgets, on the one word which best describes the the number of jobs, and on capital challenge facing the Congress is the spending plans must enter into legisla- word “change.” I am not talking just tive decisions regarding a change in about the scaling down in Vietnam, or the basic minimum wage and how far revenue sharing, or the new postal we extend coverage. service, or electoral reforms, or drugs, Consider for a moment the subject or space exploration, or pollution, or of housing, a matter of vital concern any of the specific topics of current to all Americans. Currently, we are de- interest and concern to legislators. By voting only about 2.5 percent ($25 bil- “change” I mean the whole gamut of lion) of the gross national product to “happenings” and events which appro- new housing. Some authorities believe priately characterize the two decades that, if this amount were increased to -the sixties and so far the seventies 4 percent ($40 billion), the 10-year -as a period of analytical questioning goal of 26 million new and renovated of priorities, objectives, and resource dwellings set by the Congress in 1968 allocations. could be met. A difficulty here has As a nation it appears that we been stated as, “when 90 percent of cannot continue to avoid the definition the people are comfortable and 10 per- of objectives. Implied priorities and cent uncomfortable “ ’+ ” it’s hard to

114 SYSTEMS ANALYSIS get the 90 percent to do something alternative courses of action and about the 10 percent.” Although a feasible alternative programs. more enlightened debate over the A brief review of the recent history priority that should be placed on con- of congressional interest in analysis structing new housing may help, mere may be helpful. Particularly since the knowledge of the Nation’s needs does advent of planningprogramming- not bring any inherent guarantee of budgeting (PPB) in 1945 there has action. The question of how we can been much discussion and debate of obtain needed information and more how this information could be of use enlightened public debate and concern to the Congress and whether or not it about major bugetary programs and should be made available to the Con- priorities should be a concern of Fed- gress. Even prior to that there was rec- eral agencies and particularly of the ognition in the Congress of the innova- analytical cadre within the agencies. tions in the Department of Defense More complex issues are being under Secretary McNamara; eg., brought into focus, or at least into chairman Mahon of the House Appro- congressional discussions, than ever priations Committee recognized the before, thus making more apparent the need for improved information of this need for analytical information by the nature as early as 1961. The more Congress in its deliberations. widely publicized negative attitudes in It seems to me that the pressures for the Congress toward PPB and systems change have and will increasingly de- analysis in the Department of Defense mand systems analysis for the Con- developed later, mainly in the Armed gress. Many of the elements and prob- Services Committees and to some ex- lems of systems analysis in which ana- tent in the Government Operations lysts are interested are also the ele- Committees. ments of program analysis and understanding in which the Congress has an After 1965 there were many propos- obvious interest. Some of these ele- als for joint committees, new offices, ments of analysis are: new research institutes and even a fourth branch of the Government to 1. The clear definition of goals and provide the Congress with something objectives. comparable to what PPB was intended 2. The search for criteria for judg- to provide on the executive side. There ing whether programs achieve was concrete action on legislative re- their objectives. 3. The finding of causal relation- organization in the Joint Committee on ships between program inputs Reorganization of the Congress which and outputs. resulted as early as 1967 in passage of 4. The description of processes a Legislative Reorganization Bill in the which are effective and efficient Senate. It was not until 1970 that such in the use of resources. a bill was passed in the House and 5. Consideration of benefits vs. re- quickly approved in the Senate. The source costs or disadvantages of Legislative Reorganization Act of 1970

115 SYSTEMS ANALYSIS became law last October. This act programs funded under the act including vides, under Title 11, fiscal controls for the extent to which they were achiev- assistance to the Congress by the Gen- ing their objectives. This statutory re- eral Accounting Office. It provides spe- quirement for what amounted to a cost cifically that : benefit analysis led to the involvement The Comptroller General shall review of the GAO in some of the most diffi- and analyze the results of Government pro- cult benefit measurement problems in grams and activities carried on under ex- the Government. We were aided in this isting law, including the making of cost work by a number of expert consult- benefit studies, when ordered by either ants, and we also placed a considerable House of Congress, or upon his own initiative, or when requested by any committee amount of technical work under con-

of the House of Representatives or the tract. 5 Senate, or any joint committee of the two GAO has continued to perform re- Houses, having jurisdiction over such programs and activities. views of program results in response to the indicated interests of committees It also provides that: or as a result of new legislation which The Comptroller General shall have avail- is intended to provide Congress with able in the General Accounting Office em. ployees who are expert in analyzing and better information. For example, the conducting cost benefit studies of Govern- Senate Labor and Public Welfare ment programs. Upon request of any com- Committee requested that the GAO mittee of either House or any joint com- continue reviews of manpower training mittee of the two Houses, the Comptroller General shall assist such committee or joint programs similar to those conducted committee, or the staff of such committee under the 1967 amendments. In the or joint committee-(1) in analyzing cost education area the appropriations act benefit studies furnished by any Federal has included specially earmarked agency to such committee or joint com- amounts for evaluation and it requires mittee; or (2) in conducting cost benefit studies of programs under the jurisdiction that the Office of Education submit an of such committee or joint committee. annual report to the Congress on the results of this evaluation. Specific Although this section of the new act congressional mandates such as these may have some impact on the demand receive careful consideration in allocat- for this capability in the GAO, the ing GAO resources. GAO has contended that its original The GAO was likewise injected into authorizing legislation in 1921 in effect questions about military spending at provided for this kind of work with its the time of the Senate debates in 1969 reference to responsibility for review- over such issues as the ABM and the ing the application of public funds. In C-SA aircraft. At that time a number fact, the Congress and its committees of amendments to the Defense Pro- have seen fit in recent years to obtain curement Act were proposed, some of such assistance from the GAO. In 1967 which the GAO considered to be be- the amendments to the Economic Op- yond its capability or authorization. portunity Act required that the Comp- However, some of this resulted in GAO troller General review all of the pro- work on such things as the alternatives

116 SYSTEMS ANALYSIS

for the main battle tank and a study of proved by better planning and schedul- air-to-ground missiles. These have re- ing of the placement of the plants. sulted in classified reports to the There is clearly a growing interest on Armed Services Committee. the part of various congressional com- Other examples of work undertaken mittees in national priorities and at our own initiative during this same objectives for such important pro- time are a survey of the status of PPB grams as education and health and in the executive agencies, a survey of such issues as national energy re- the use of discounting by Federal agencies, and specific reviews of pro- sources, the economy, and the environ- gram results such as water pollution. ment. We in the GAO can expect a In the case of pollution, a model was growing demand for the capability developed under contract to show that which we can provide to assist the the benefits of municipal treatment Congress in its deliberations regarding plants on a specific river could be im- such matters.

Auditors and Quality Evaluation

While unit costs are basic and invaluable in evaluating performance, they do not in any way reflect the quality of the service being produced by the agency audited. In quality evaluation, we as auditors get into unfamiliar surroundings where we must deal with intangibles by forming opinions on the basis of personal observations which we many not be able to document. Nevertheless, quality evaluation is no less important than cost data, and the auditor must train himself to substantiate his evaluation by logical and objective reasons supporting his conclusions.

J. B. Lancaster Legislative Auditor, State of Louisiana. At annual meeting of the National Associa- tion of State Auditors, Comptrollers, and Treasurers, Louisville, Ky., November 16, 1970.

117 GAO STAFF CHANGES

Lawrence J. Powers

Lawrence J. Powers, Assistant to the Comptroller General, retired on May 28, 1971, after more than 37 years of Federal service. Mr. Powers began his Federal service in the Treasury Department in 1935 and moved to the Department of Agriculture in 1939 as accountant and budget officer of the Farm Security Administration. From 1946 to 1951, he was assistant and deputy director in the Fiscal Branch of the Production and Marketing Administration and also served as assistant treasurer of the Commodity Credit Corporation in 1947. Mr. Powers came to GAO in 1952 as assistant director in the Accounting Systems Division. He held positions as associate and deputy director of that division until 1956 when he became director of the newly created Defense Accounting and Auditing Division. On January 10, 1960, Mr. Powers was appointed Assistant to the Comptroller General by Comptroller General Joseph Campbell, and he served in that capacity until his retirement. Mr. Powers received a Bachelor of Science degree from the University of Maryland in 1934 and attended Georgetown University School of Law from 1935 to 1936. He also attended the Advanced Management Program at the Harvard Business School in 1960. During World War 11, Mr. Powers served as chief of the Central Accounts Branch of the War Department (1942-46), attaining the rank of lieutenant colonel. In 1951 and 1952, during the Korean Emergency, he was chief of the Industrial Facilities Branch of the Office of the Comptroller of the Army. Mr. Powers is now a colonel, USAR (retired). Mr. Powers received the Army Commendation Award-World War I1 in 1946, the Career Service Award of the National Civil Service League in 1957, and GAO’s Distinguished Service Award in 1970.

118 GAO STAFF CHANGES

William A. Newman, Jr.

William A. Newman, Jr., Special Assistant to the Comptroller General, retired on May 28,1971, after 29 years of Federal service. Mr. Newman received a Bachelor of Science degree from Syracuse University in 1929. Before entering the Federal service, he had 12 years of public accounting experience. He was also comptroller and chief contract negotiator on Govern- ment contracts for an aircraft parts manufacturing company. Mr. Newman began his Federal civilian service in 1942 as assistant district auditor of the Eastern Audit District, Army Air Force. He served in the Army Air Force from 1943 to 1946 as district auditor for Los Angeles and as assistant chief, Contract Audit Division, at the Headquarters, Army Air Force, attaining the rank of lieutenant colonel. Mr. Newman joined the General Accounting Office as an accountant in the Corporation Audits Division in 1946. In 1956, he became deputy director of the Defense Accounting and Auditing Division and director in 1959. On July 15, 1968, he was designated as Special Assistant to the Comptroller General to head the GAO study on the feasibility of developing and applying uniform cost accounting standards for defense contracts. Mr. Newman received the Meritorious Service Award in 1959 and in June 1970 he was the head of the group that received the Meritorious Service Award for its conduct of the uniform cost accounting standards feasibility study. He is a CPA (New York) and a member of the the American Institute of CPAs, the New York State Society of CPAs, the American Accounting Association, and the Federal Government Accountants Association in which he served as national president in 1957-58.

119 GAO STAFF CHANGES

Daniel Borth

Daniel Borth, deputy director for financial management, Division of Financial and General Management Studies, retired from active service on August 27, 1971. He was associated with the GAO for 5 years, first as associate director of the Defense Division in charge of its Management Control Systems Staff, and since October 1969 in charge of all GAO financial management improvement work. Before joining GAO, Mr. Borth was with the Louisiana State University, where he served in various capacities including Dean of Administration and Executive Vice President. During his career, he also held appointments at the University of Illinois, Washington State University, Lehigh University, West Virginia Univer- sity, and the University of Chicago. In addition to GAO, Mr. Borth also served the Federal Government in the War Assets Administration, the Bureau of the Budget, and the Department of De- fense. From July l, 1962, to June 30, 1964, he served as Deputy Assistant Secretary of Defense (Accounting and Audit Policy). During World War 11, Mr. Borth served in the Office of the Quartermaster General with the rank of colonel. He is a holder of the Legion of Merit. Mr. Borth attended the University of Kansas and the University of Illinois. He holds the degrees of Bachelor of Science and Master of Science in accountancy, and Ph. D. in economics. He is a member of the American Institute of CPAs, the American Economic Association, the Society for Public Administration, the National Accounting Association, the Louisiana Society of CPAs, the American Society of Military Comptrollers, the Southwestern Social Science Association, and the Federal Gov- ernment Accountants Association. He is also a member of Beta Gamma Sigma, Beta Alpha Psi, Phi Kappa Phi, and Omicron Delta Kappa honorary fraternities.

120 GAO STAFF CHANGES

Ellsworth H. Morse, Jr.

Ellsworth H. Morse, Jr., was designated director of the newly created Office of Policy and Program Planning, effective July 1, 1971 (see p. 104). Mr. Morse has been in the GAO since July 1946 when he joined the staff of the former Corporation Audits Division. In 1956 he became director of the Division of Audits and later in that same year he became director of the newly formed Accounting and Auditing Policy Staff, which was redesignated in 1966 as the Office of Policy and Special Studies. He received the Comptroller Gener- al’s Award in 1967 and the National Civil Service League Career Service Award in 1968. Mr. Morse is a member of the American Institute of CPAs, the District of Columbia Institute of CPAs, the American Accounting Association, and the Federal Government Accountants Association of which he is the immediate past president. He is also a member of the Committee on Professional Recognition and Regulation of the American Institute of CPAs, the American Accounting Association Committee on Concepts of Accounting Applicable to the Public Sector, and the Advisory Council for the Institute of Professional Accounting of the Graduate School of Business, University of Chicago. Mr. Morse holds a B.A. degree from Oberlin College, an M.B.A. degree from the University of Michigan, and is a CPA (Michigan). He was associated with the public accounting firm of Arthur Andersen & Co. from 1937 to 1942. He served in the US. Naval Reserve from 1942 to 1946 and was discharged as a lieutenant commander.

121 GAO STAFF CHANGES

Donald L. Scantlebury

Donald L. Scantlebury was designated director of the newly created Division of Financial and General Management Studies, effective July 1,1971. Mr. Scantlebury joined the General Accounting Office on October 1, 1956, after several years in public accounting. He served with the Defense Division until October 1964 and with the Field Operations Division as manager of the Washington Regional Office from October 1964 until assuming the duties of his new position. Mr. Scantlebury attended Antioch College, Yellow Springs, Ohio, from which he received a Bachelor of Arts degree in business administration, and the Executive Development Program at the University of Michigan. He is a CPA (Iowa and Wisconsin) and a member of the American Institute of CPAs and the Federal Government Accountants Association. He is the author of several articles on auditing which have appeared in various professional publications. He has received the Career Development Award and two Meritorious Service Awards.

122 GAO STAFF CHANGES

Milton J. Socolar

Milton J. Socolar was appointed deputy general counsel, effective April 4, 1971. In this position he assists the general counsel in the supervision of all legal activities within the General Accounting Office. Mr. Socolar served in the US. Navy from 1943 to 1946. He joined the General Accounting Office in 1952 as an auditor and transferred to the Office of the General Counsel in 1956. He served in the Paris Office of the European Branch from 1954 to 1959 and 1963 to 1964. During 1962 he served as assistant general counsel for the Bureau of Public Roads, Department of Commerce. In 1968 he was designated as a special assistant to the general counsel, and in 1970 he was appointed assistant general counsel for civilian personnel. In 1950 he received a Bachelor of Science degree in business and public administration from the University of Maryland and an LL.B. degree from The George Washington University in 1954. He is a certified public accountant and is admitted to practice before the District of Columbia Bar, the District Court of Appeals of the District of Columbia, and the Bar of the Supreme Court of the United States.

123 GAO STAFF CHANGES

John G. Barmby

John G. Barmby was appointed an assistant director of the Defense Division. Dr. Barmby, who has a broad academic background and much experience in systems analysis and business management, will head a staff of systems analysts who will apply their particular expertise to projects of various operating groups in the Defense Division. Dr. Barmby holds a Ph. D. in public administration from The American University, an M.B.A. from The George Washington University, and graduated from M.I.T. with an undergraduate degree in aeronautical engineering. He comes to us after 7 years with the Washington-based Illinois Institute of Tech- nology Research Institute (IITRI). Before serving as a project engineer with the Navy for 11 years, Dr. Barmby was with NASA for 4 years at Langley Labora- tories, near Norfolk, Va.

124 GAO STAFF CHANGES

Thomas R. Brogan

Thomas R. Brogan was designated an assistant director in the International Division in September 1971 after completing 2 years as manager of the Saigon Office, Far East Branch. Mr. Brogan served in the U.S. Navy from 1951 to 1955 and received a Bachelor of Science degree from Pennsylvania State University in 1957. Upon joining the GAO in 1957, he was assigned to the Defense Accounting and Auditing Division, transferring to the Far East Branch in 1962 where he served until August 1971.

125 GAO STAFF CHANGES

Forrest R. Browne

Forrest R. Browne was designated associate director for manpower in the Defense Division, effective May 2, 1971. He replaced James L. DiGuiseppi who transferred to the staff of the Cost Accounting Standards Board. Mr. Browne joined the General Accounting Office in 1953 in the Kansas City Regional Office. He was appointed regional manager of that office in 1954 and in 1966 was appointed deputy director of the Field Operations Division. Mr. Browne received a Bachelor of Science degree from New York University in 1944. He is a certified public accountant (Oklahoma and New Mexico) and a member of the American Institute of CPAs and the Federal Government Account- ants Association. In 1962 he completed the Executive Development Program at Stanford University Graduate School of Business.

126 GAO STAFF CHANGES

Robert H. Drakert

Robert H. Drakert, upon nomination by Manlio Brosio, Secretary General of the North Atlantic Treaty Organization, was appointed Chairman of the Interna- tional Board of Auditors of that organization, for the period August l, 1971, to August 1, 1972. He has served as a member of the five-member board, chosen from 15 member states, since July 1970. Mr. Drakert joined the New York Regional O5ce in 1951 after a varied career in private industry, including public accounting and book publishing. He was appointed regional manager of the New York Office in 1954. From 1959 to 1961 he was assistant director of the GAO European Branch, returning from that post to New York to resume the duties of regional manager. Mr. Drakert served in the US. Army from 1942 to 1945. He is a certified public accountant in New York and a member of the American Institute of CPAs and the Federal Government Accountants Association.

127 GAO STAFF CHANGES

Willis L. Elmore

Willis L. Elmore was designated an assistant director in the Civil Division, effective March 22, 1971. In this position he is responsible for GAO audit work at the Health Services and Mental Health Administration, Department of Health, Education, and Welfare. Mr. Elmore served in the U.S. Army from 1958 to 1960. He graduated from Concord College in 1957 with a Bachelor of Science degree with a major in accounting and passed the CPA examination in the State of Virginia (1965). He received the Meritorious Service Award in 1965 and attended the Brookings Institution Intergovernmental Affairs Fellowship Program from December 1969 to March 1970.

128 GAO STAFF CHANGES

Carl P. Friend

Carl P. Friend was designated assistant general counsel for civilian personnel, effective April 4, 1971. Mr. Friend attended The George Washington University and received an LL.B. degree from the Washington College of Law (now merged with the law school of The American University) in 1937. He has also taken postgraduate work in accounting at The American University. Mr. Friend entered the General Accounting Office as a clerk in 1934 and worked as a claims examiner in the Claims Division from 1936 to 1946 when he transferred to the Office of the General Counsel. He served 2 years on active duty in the U.S. Navy during World War 11. He is a retired lieutenant commander in the US. Naval Reserve and a member of the District of Columbia Bar.

129 GAO STAFF CHANGES

Stephen P. Haycock

Stephen P. Haycock was designated as associate general counsel, effective April 4, 1971. In this position he is responsible for the overall supervision of activities within the O5ce of the General Counsel relating to Government contracts. Mr. Haycock attended Bowdoin College, The George Washington University, and received his LL.B. degree in 1934 from Columbus University Law School which later merged with Catholic University’s law school. He is a member of the Bar of the District of Columbia and served as an Assistant U.S. Attorney in the District of Columbia from 1938 to 1940. He joined the General Accounting Office in 1941 and in 1959 was appointed assistant general counsel for contracts.

130 GAO STAFF CHANGES

Walter C. Herrmann, Jr.

Walter C. Herrmann, Jr., was designated assistant regional manager of the Cincinnati Regional Office, effective March 22,1971. Mr. Herrmann served in the US. Air Force from 1952 to 1956. He graduated with honors from the University of Louisville in 1959, where he majored in accounting. He completed the Management Program for Executives at the Gradu- ate School of Business of the University of Pittsburgh in 1968 and is currently attending the graduate school at Xavier University. Mr. Herrmann is a CPA (California) and a member of the Cincinnati Chapter of the Ohio Society of CPAs and the Cincinnati Federal Business Association He is currently the vice president of the Cincinnati Chapter of the Federal Government Accountants Association. Since joining the General Accounting Office in 1959, Mr. Herrmann has served in the Los Angeles and Cincinnati Regional Offices. He received the Meritorious Service Award in 1961.

131 GAO STAFF CHANGES

Kenneth W. Hunter

Kenneth W. Hunter was designated assistant director for automatic data processing in the Office of Policy and Special Studies, effective March 22, 1971. Mr. Hunter joined the General Accounting Office in the Los Angeles Regional Office in 1959 upon graduation from Golden Gate College where he received a B.B.A. degree with a major in accounting. He served in the San Francisco Regional Office from 1961 to 1964 and 1966 to 1968, and in the European Branch from 1964 to 1966. Since 1968, he has been assigned to the ADP staff of the Office of Policy and Special Studies. This staff became a part of the Division of Financial and General Management Studies as of July 1, 1971. Mr. Hunter’s work is primarily concerned with the systems and data processing needs of the Congress. He is a CPA (California) and a member of the American Institute of CPAs, the California Society of CPAs, the Federal Government Accountants Associa- tion, and the American Accounting Association. He is also active in the World Future Society and is a member of the American Academy of Political and Social Sciences, the Association for Systems Management, and the Association for Computing Machinery.

132 GAO STAFF CHANGES

Stanley W. Johnson

Stanley W. Johnson, a deputy assistant general counsel in the Office of the General Counsel, retired from active service on May 28, 1971, after more than 27 years of Government service. Mr. Johnson was an attorney-adviser on the military pay and allowance legal work for a number of years before his promotion to deputy assistant general counsel in 1967. Prior to his employment in the General Accounting Office in 1944, Mr. Johnson practiced law for 13 years in Utah and taught school for several years before going into private practice. He served as city attorney in his home town of Ephraim, Utah, for 10 years and as county attorney for 2 years. Mr. Johnson attended the University of Utah and The George Washington University before studying law at the University of Chicago where he earned his Bachelor of Laws degree in 1931. He is a member of the Bars of Utah and California and received the GAO Meritorious Service Award in 1961, 1963, and 1965.

133 GAO STAFF CHANGES

Joseph W. Kegel

Joseph W. Kegel was designated an assistant director of the Civil Division, effective June 13,1971. Mr. Kegel is assigned to the audit of the Department of Transportation and is responsible for the planning of the auditing work for the Department of Trans- portation audit group. Mr. Kegel served in the U.S. Navy from 1952 to 1956. He received a Bachelor of Science degree with a major in accounting from King’s College, Wilkes-Barre, Pa., in 1960. He received the Meritorious Service Award in 1967.

134 GAO STAFF CHANGES

Charles W. Keller

Charles W. Keller was designated an assistant director of the International Division, effective June 13, 1971. In thiz position he will be responsible for directing reviews of the Department of State and related agencies. Mr. Keller received a Bachelor of Science degree in business administration with a major in accounting from Loyola University in 1943. He served as a commissioned officer in the U.S. Navy from 1943 to 1946. Prior to joining the GAO in 1950, he was a staff member with a national firm of certified public accountants for 3 year:. Mr. Keller has had extensive experience in the Civil and Defense Divisions and joined the International Division in July 1967. He is a CPA (District of Columbia) and a member of the American Institute of CPAs.

135 GAO STAFF CHANGES

John Landicho

John Landicho was designated an assistant director in the Defense Division, effective June 13, 1971. In this position he is responsible for planning, program- ming, and directing reviews of various supply management activities of the Department of Defense and military departments. Mr. Landicho joined the General Accounting Office in 1957. He served in the US. Army froa 1954 to 1956. He received a Bachelor of Arts degree, with a major in accounting from San Jose State College in 1954, and he attended the Harvard Graduate School of Business Administration Program for Management Development in 1969.

136 GAO STAFF CHANGES

Herbert F. Lock

Herbert F. Lock was designated a deputy assistant general counsel in the Office of the General Counsel, effective March 22, 1971. Mr. Lock joined the General Accounting Office in 1942 and served in the former Accounting and Bookkeeping Division as a clerk before entering the military service in 1943. Upon completion of his military service in 1946, he returned to the General Accounting Office. In 1951 he moved to the Office of the General Counsel and has served there since that date, 2 years of which were on assignment with the European Branch in Paris. Mr. Lock attended Nebraska Central College and Van Zant School of Business. He was graduated with an LL.B. degree from Columbus University Law School (which later merged with Catholic University’s law school). Mr. Lock has been admitted to practice before the District Court of the United States for the District of Columbia and is a member of the Federal Bar Association.

137 GAO STAFF CHANGES

Stewart D. McElyea

Stewart D. McElyea, manager of the Denver Regional Office since 1963, was designated deputy director of the Field Operations Division. Mr. McElyea graduated from the University of Florida with a B.S. degree in business administration and completed the Advanced Management Program of the Graduate School of Business Administration, Harvard University. Mr. Mc- Elyea served in the Army and the Air Corps during World War 11. Mr. McElyea joined the General Accounting Office in 1953 and in 1956 was appointed manager of the former Dayton, Ohio, Regional Office. In 1957 he was designated assistant director in the Defense Accounting and Auditing Division with headquarters at Dayton, Ohio, where he directed the activities of the General Accounting Office at the Air Force Logistics Command. Mr. McElyea is a certified public accountant (Florida) and a member of the American Institute of CPAs, the Colorado Society of CPAs, the American Accountants Association, the American Society for Public Administration, the Florida Institute of CPAs, and the Federal Government Accountants Association.

138 OAO STAFF CHANGES

John E. Milgate

John E. Milgate was designated an associate director in the International Division, effective August 8, 1971. In this capacity he is responsible for directing reviews relating to the Agency for International Development, trade expansion programs, Food for Peace programs, foreign currency and balance-of-payments programs, and countrywide and regional reviews of US. assistance programs in the geographic areas of Europe, Africa, the Near East, and South Asia. Mr. Milgate served in the U.S. Air Force from 1943 to 1946. He graduated from Syracuse University in 1947, receiving a B.S. degree cum Eaude with a major in accounting. He also attended the Management Program for Executives at the University of Pittsburgh in 1967. Since joining the General Accounting Office in 1952, Mr. Milgate has had responsibilities on a wide variety of assignments in the former Division of Audits and in the Civil and International Divisions. Before joining the General Accounting Office, he was a staff accountant for several years with a national public accounting firm. Mr. Milgate received the Meritorious Service Award in 1968. He is a member of the American Institute of CPAs and the Maryland State Society of CPAs.

139 GAO STAFF CHANGES

Morton A. Myers

Morton A. Myers was designated assistant director for systems analysis in the Office of Policy and Special Studies, effective March 22, 1971. He was reassigned to the Civil Division as an assistant director on April 2, 1971. In his new position he will be responsible for directing reviews of the National Institutes of Health and the Food and Drug Administration. Mr. Myers received a Bachelor of Science degree with a major in accounting from Quinnipiac College in 1961. After joining GAO in the same year, he was on active duty in the US. Army until February 1962. He attended The George Washington University Graduate School of Business and in 1969-70 he was a graduate fellow at the University of California under the Federal Government’s Educational Program in Systems Analysis. While in residence at the University of California, he served as a consultant to the RAND Corporation of Santa Monica, Calif. Mr. Myers is a member of the National Association of Accountants, the Federal Government Accountants Association, the Association for Public Pro- gram Analysis, and Phi Theta Kappa national honorary society. He is the author of several professional articles and in 1970 he received the GAO Special Educa- tional Award.

140 GAO STAFF CHANGES

Eugene L. Pahl

Eugene L. Pahl, an assistant director in the Civil Division, transferred to the audit policy staff of the Office of Policy and Special Studies, effective May 2, 1971. This staff became a part of the newly created Office of Policy and Program Planning on July 1, 1971. Mr. Pahl served in the US. Army during World War I1 and received his Bachelor of Arts degree with a major in accounting from the University of Maryland. Since joining the General Accounting Office in 1950, Mr. Pahl has had varied experience in the conduct of audits at the Atomic Energy Commission, the Department of Agriculture, the Central Intelligence Agency, the Interstate Com- merce Commission, the National Aeronautics and Space Administration, the Department of the Interior, and the Department of the Treasury. Mr. Pahl is a CPA (Maryland) and a member of the National Association of Accountants and the Federal Government Accountants Association.

141 GAO STAFF CHANGES

Robert H. Rumizen

Robert H. Rumizen was designated assistant general counsel for contracts in the Office of the General Counsel, effective February 2, 1971. In this capacity he is responsible for the legal work of the Office of the General Counsel pertaining to Government contracts. Mr. Rumizen joined GAO in the Office of the General Counsel in 1942 and, except for a short period of service with the former Office of Investigations, has served with this ofice since that date. He received his prelegal training at the University of Buffalo and his LL.B. degree from Southeastern University. He is a member of the District of Colum- bia Bar, the Bar of the District Court of Appeals for the District of Columbia, the Bar of the State of New York, and the Bar of the Supreme Court of the United States.

142 GAO STAFF CHANGES

B. William Sewell

B. William Sewell was designated an assistant director for the Special Projects Group of the Defense Division, effective June 13, 1971. From 1941 to 1946, Mr. Sewell served on active duty with the US. Army and the US.Air Force. He graduated cum Zaude with a Bachelor of Science degree in business administration in 1948 and received a Master of Business Administration degree in 1958 from Xavier University, Cincinnati, Ohio. In 1948, Mr. Sewell was elected to Alpha Sigma Nu, the national honor society of Jesuit University students. He is a CPA (Ohio) and a member of the American Institute of CPAs and the American Accounting Association. Prior to joining the General Accounting Office, Mr. Sewell was associated with a firm of public accountants. He has also had experience in industrial accounting and has taught accounting at a number of universities in Ohio and Kentucky. Mr. Sewell joined GAO at the Dayton Regional Office in 1957. He was transferred in 1958 to that section of the Air Force Group of the Defense Division which was located at Wright-Patterson Air Force Base, Ohio, and subsequently moved to Washington, D.C., in 1963. He received the Meritorious Service Award in 1962.

143 GAO STAFF CHANGES

Albert R. Shanefelter, Jr.

Albert R. Shanefelter, Jr., was designated assistant director for personnel development in the Office of Personnel Management, effective March 22, 1971. He is responsible for all GAO personnel training and development. Mr. Shanefelter served in the US. Army from 1954 to 1957. He received his Bachelor of Science degree from St. Vincent College in 1961. While in his undergraduate years, Mr. Shanefelter served as a junior accountant with a CPA firm. He has done postgraduate work in the field of data processing and public administration at The American and The George Washington Universities. Mr. Shanefelter joined the Defense Division in June 1961 and served with the Defense Contracts, Navy, and Management Control Systems Groups. He was assigned to the Office of Personnel Management in March 1969 and assumed the responsibilities of acting assistant director for personnel development in October 1969. Mr. Shanefelter is a CPA (District of Columbia) and a member of the American Institute of CPAs and the Federal Government Accountants Associa- tion. He served as vice chairman of the National Education Committee (FGAA) in 1970-71 and is working on urban problems with the National Institute of Public Affairs. He received the Meritorious Service Award in 1963 and a Letter of Commendation from the Comptroller General for his superior work in 1967.

144 GAO STAFF CHANGES

Gilbert F. Stromvall

Gilbert F. Stromvall was designated assistant director of the Far East Branch, International Division, in July 1971. Mr. Stromvall served in the US. Army from 1946 to 1949. He was graduated with high honors from the University of Idaho in 1954, where he majored in accounting. He studied international economics at the State Department’s For- eign Service Institute in 1968. Since joining the General Accounting Office in 1954, Mr. Stromvall has had a wide variety of assignments and responsibilities in the Los Angeles Regional Office, the Far East Branch in Tokyo, and in Washington, D.C. He has been associated with the International Division since it was formed in 1963. Mr. Stromvall received the Meritorious Service Award in 1967 and the Career Development Award in 1970. He is a member of the Federal Government Accountants Association, the American Economic Association, and the Royal Economic Society.

145 GAO STAFF CHANGES

. .-: , , ., Ernest W. Taylor -. .

Ernest W. Taylor was designated assistant regional manager of the Norfolk Regional Office, effective June 13,1971. From 1950 to 1953, Mr. Taylor served in the US. Air Force. He joined the Norfolk Regional Office in 1957 after graduating from East Carolina University with a Bachelor of Arts degree, majoring in accounting. He attended the Execu- tive Development Program at the University of Michigan Graduate School of Business Administration in 1971. Mr. Taylor is a CPA (Virginia) and a member of the American Institute of CPAs.

146 GAO STAFF CHANGES

Hugh J. Wessinger

Hugh J. Wessinger was designated an assistant director of the Civil Division, effective June 13, 1971. Mr. Wessinger is responsible for audit work at the Atomic Energy Commis- sion in the national defense and research and financial management activities areas. His experience with the Office includes assignments at the Department of Agriculture, the Department of the Treasury (Coast Guard), the Post Office Department, the Federal Housing Administration, the Department of Commerce (Maritime Administration), the Senate Committee on Foreign Relations, the Department of the Interior, the House Select Committee on Small Business, and the Veterans Administration. Mr. Wessinger served in the U.S. Navy from 1952 to 1956. He received a Bachelor of Science degree with a major in accounting from the University of South Carolina in 1959. Mr. Wessinger is a certified public accountant in the State of Virginia and a member of the American Institute of CPAs. He received the Meritorious Service Award in 1969 for his work at the Veterans Ailministra- tion.

147 GAO STAFF CHANGES

David P. Wilton

David P. Wilton of the Cincinnati Regional Office was designated manager of the International Division’s Saigon Office, Far East Branch, effective August 8, 1971. In this position he will be responsible to the director, Far East Branch, for the administrative and technical control of all GAO audit activities and staff assigned to the Saigon Office. Mr. Wilton received a Bachelor of Business Administration degree from Cor- ne11 University in 1952. He served as a commissioned officer in the U.S. Navy from 1952 to 1954, and then continued his academic work at the University of Pennsylvania where he received the degree of Master of Business Administration in 1956. He then served 2 years as a staff accountant of a national firm of certified public accountants. With the exception of an overseas tour with the European Branch, Interna- tional Division, from 1964 to 1968, Mr. Wilton has been with the Cincinnati Regional Office since joining GAO in 1958. He is a CPA (Ohio) and a member of the American Institute of CPAs.

148 Office of the Comptroller General The National Graduate University Conference, Washington, D.C., on The Comptroller General, Elmer B. “Changing Role of the General Staats, addressed the following groups: Accounting Office,” April 13. The Purchasing Management As- The Chamber of Commerce of the sociation of Pittsburgh on “What United States, Washington, D.C., on Does the Decade Ahead Hold for the Procurement Ccmmission, April Business-Government Relations?” 15. March 16. The Northeast Regional Group of the American Accounting Associa- The National Association of Manu- tion, University of mode Island, facturers’ Defense Committee, Wash- Kingston, R.I., on “Improving ington, D.C., on “Cost Accounting Fi- nancial Management and Auditing Standards Board,” March 25. for Governmental Programs,” April The Regional Conference of 16. Alpha Kappa Psi Business Frater- The American Society for Public nity, The George Washington Uni- Administration 1971 National Con- versity, Washington, D.C., on “Role ference on Public Administration, of Business in Dealing with Eco- Denver, Colo., on “New Problems of nomic and Social Problems,” March Accountability for Federal Pro- 27. grams,” April 21. The Industrial College of the The Symposium of the National Armed Forces, Washington, D.C., Academy of Engineering, Washing- on “Policies and Practices of GAO ton, D.C., on “Government Perform- as They Apply to DOD,” March 29. ance as Develcper, Manufacturer, The Washington Industrial Round and Customer: How Well Has It Table, Washington, D.C., on the Worked?” April 29. activities and responsibilities of the The Monday Meeting of the Comptroller General and his respon- Cosmos Club, Washington, D.C., on sibilities as Chairman of the Cost “The Cost of Government,” May 10. Accounting Standards Board, March The Governor’s Conference on 31. Manpower and Economic Education, The New Jersey Society of CPAs, Las Vegas, Nev., on “Where the Na- Newark, N.J., on “Recent Develop- tion Stands Today,” May 12. ments in Federal Financial Manage- The Interdepartmental Budget Of- ment,” April 7. ficers Conference, Washington, D.C.,

149 PROFESSIONAL ACTIVITIES

on “Changing Role of the General Mr. Staats were: E. H. Morse, Jr., Accounting Office,” May 20. director, Office of Policy and Program The 18th Annual Institute on Planning; Oye V. Stowall, director, In- Government Contracts (cosponsored ternational Division; Roland J. Saw- by The George Washington Univer- yer, information officer; and Edward sity and the Federal Bar Associa- F. Tennant, AID Auditor General. tion), Washington, D.C., on “The The Deputy Comptroller General, Role of GAO with Particular Empha- Robert F. Keller: sis on the New Bid Protest Proce- Participated in the Industry-Gov- dures,” May 25. ernment Seminar on “The Elements The commencement address at of National Security in the Coming Elizabethtown College, Elizabeth- Decade,” spcnsored by the National town, Pa., on “Individual Action for Institute of Public Affairs, March 3. Social Change,” May 30. Participated in a Joint Program The Municipal Finance Officers of the Government Contracts Com- Association Conference, New York, mittees of the District of Columbia, N.Y., on “Increasing the Capability the Federal Bar Association, and the of Auditors To Help Managers and American Bar Association on ‘‘The Legislatures,’’ June 2. Role of GAO in Bid Protest Cases: The commencement address at the Should It Be Abolished?” March School of Government and Business 24. Administration, The George Wash- Spoke on “Controlling Agency ington University, Washington, Policy and Programs,” before the D.C., on “The Private Sector and U.S. Civil Service Commission Public Responsibility,” June 6. Training Program, March 24. The 20th Annual Symposium of Addressed the National Sympos- Federal Government Accountants ium of the National Contract Man- Association, Washington, D.C., on agement Association on the GAO “Creative Thinking in Financial study of “Profits of Defense Con- Management,” June 28. tractors,” April 23. Mr. Staats wa3 a delegate to the Participated in the Industry-Gov- VIIth International Congress of Su- ernment Seminar on “National preme Audit Institutions in Montreal, Health Insurance-A Step Forward Canada, September 7-16, at which or Backward?” sponsored by the comptrollers and auditors general of National Institute of Public Affairs, more than 75 nations were repre- May 5. sented. He chaired the session on Moderated at the American Bar “Management or Operational Auditing -An Extension of the Scope of the Association, Section of Public Con- Work of the Supreme Audit Institu- tract Law, National Institute, on tions”-one of four principal subjects “The National Industrial Base for discussed by the International Con- Government Procurement-Public gress. Codelegates who accompanied Contract in Transition,” May 13.

150 PROFESSIONAL ACTIVITIES

The first plenary session of the 20th Annual National Symposium of the Federal Government Accountants Association was concerned with a 20-year perspective of Federal financial mn- agement. The leadofl speaker was the Comptroller General, Elmer B. Staats. Shown just before the address, from the left: Karney A. Brasfield, partner, Touche Ross & Co., who presided at the session; Mr. Staats; and E. H. Morse, Jr., Director, Ofice of Policy and Special Studies, and national president of the FGAA.

Gave the commencement address Branches in the Procurement Proc- at Benjamin Franklin University, ess,” Washington, D.C., May 13-14. Washington, D.C., June 24. Spoke on “Judicial and GAO Re- view of Bid Protest Cases’’ before a Office of the General Counsel Joint Meeting of the Federal Bar As- sociation, the National Contract Paul G. Dembling, general counsel: Management Association, and the Participated in the MIT Working Federal Government Accountants Group on Philosophy, Science and Association, Wright-Patterson Air Technology at the Massachusetts In- Force Base, Dayton, Ohio, May 20. stitute of Technology, Cambridge, Mass.,May 7. Spoke on “United States Govern- Participated as a panelist in the ment Contract Formation” before Annual National Institute of the Sec- Public Contract Section at the 94th tion of Public Contract Law, Ameri- Annual Meeting of the American can Bar Association, on “Roles of Bar Association, London, England, the Legislative and Executive July 14.

151 PROFESSIONAL ACTIVITIES

Milton J. Socolar, deputy general tests,” Minneapolis, Minn., April counsel : 21-22. Spoke at a briefing conference on Spoke before the Government Government contracts jointly spon- Contract Claims Course cosponsored sored by The University of Texas by Federal Publications, Inc., and School of Law and the Dallas Chap- The George Washington University, ter of the Federal Bar Association on “Presenting the Claim to the on “Cost Accounting Standards,” Comptroller General,” San Fran- Dallas, Tex., May 21. cisco, Calif., May 18-20. Melvin E. Miller, assistant general Spoke before the Boston Chapter counsel : of the National Contract Manage- Spoke before the Defense Pro- ment Association on “GAO Bid Pro- curement Management Course on test Jurisdiction Under the Scanwell “The Role of the GAO in Defense Doctrine,” Boston, Mass., June 8-9. Procurement,” Huntsville, Ala., Seymour Efros, deputy assistant April 19-20. general counsel: Spoke before the AEC Symposium Participated in the Government on Procurement Management on Contracts Today Conference on “Handling of Bid Protests by Disap- “GAO-Survey of Recent Deci- pointed Bidders,” Denver, Colo., sions,” Dallas, Tex., May 19-21. May 13-14. Martin L. Glass, attorney-adviser Spoke before the Defense Pro- (contract) : curement Management Course on Participated in a seminar spon- “The Role of the GAO in Defense sored by the Federal Bar Associa- Procurement,” Fort Lee, Va., June tion and the Chicago Bar Associa- 8. tion entitled “Government Contracts, Paul Shnitzer, assistant general Claims, Warrantees, and Funds,” St. counsel : Louis, Mo., Detroit, Mich., and Participated in a number of train- Chicago, Ill., April 49. ing sessions in contract administra- Served as moderator at a briefing tion conducted by the Bonneville conference sponsored by the Federal Power Administration of the De- Bar Association in cooperation with partment of the Interior, Portland, The University of Texas School of Oreg., March 23-26. Law on “Government Contracting,” Spoke to the North Texas Chapter Dallas, Tex., May 20-21. of the NCMA on “GAO Bid Protest Jurisdiction Under the Scanwell Office of Policy and Doctrine,” Dallas, Tex., April Program Planning 19-20. Spoke before the National Con- E. H. Morse, Jr., director, addressed tract Management Association- the following groups: SBA Seminar on “GAO Bid Pro- The American Management Asso-

152 PROFESSIONAL ACTIVITIES

ciation Seminar on operational au- April 28, on “Are Accountants Im- diting, Chicago, Ill., April 14. portant in Gdvernment Operations?” A panel session on “Accounta- The 23d Annual Meeting of the bility in International and Intergov- Southeast Regional Group of the ernmental Programs” at the 1971 American Accounting Association at National Conference of the Ameri- the University of Alabama at Tusca- can Society of Public Administra- loosa, April 30, on “The Role of tion¶ Denver, Colo., April 21. Accountants in Governmental Pro- The University of Hartford So- grams.” ciety of Accounting Students 1971 A panel session on “Accounting Awards Dinner, Hartford, Conn., Needs of the Public Sector” at the

The 20th Annual National Symposium of the Federal Government Accountants Association was held at the Sheraton-Park Hotel, Washington, D.C., June 28-30. The final feature of the symposium was the Awards Banquet at the conclusion of which national president E. H. Morse, Jr., turned the Association’s gavel over to incoming president Sidney Baurmash, Director of Audits, Department of Commerce. Shown above, from the left: Mr. Baurmash, Mr. Morse, and L. J. Andolsek, Civil Service Commissioner, who was present to bestow the $Association’s honor awards. Awards were presented to Arthur Seideman of the Defense Contract Audit Agency for distinguished service and to Larry A. Jobe, Assistant Secretary of Commerce for Admin- istration, Leslie Surgner of the Rural Electrification Administration, and Mildred Tyssowski of the Social Security Administration for distinguished leadership. The Robert 1. King Memorial Award was made to Donald IB. Bacon, Assistant Commissioner, Internal Revenue Service.

153 PROFESSIONAL ACTIVITIES

Annual Meeting of the American “Performance and Operational Association of Collegiate Schools of Auditing,” Journal of Accountancy, Business, Denver, Colo., May 6. June 1971. The Fifth Annual Symposium of “Report of the President’s Com- the Quad Cities Chapter of the Fed- mission on Budget Concepts in Ret- eral Government Accountants Asso- rospect,” Public Administration Re- ciation, Davenport, Iowa, May 7, on view, July/August 1971. “The Accountant’s Role in Public Management.” Division of Financial and The Los Angeles and San Fran- General Management Studies cisco Chapters of the Federal Gov- ernment Accountants Association, May 18-19, on “What Accountants DonaEd L. Scantlebury, director, was Can Do About More Efficient Gov- elected vice president of the Capitol ernment Operations.” Region of the Federal Government The Joint Meeting of the Harris- Accountants Association for fiscal year burg Chapter of the Federal Govern- 1972. ment Accountants Association and Frederic H. Smith, deputy director, the East Central Pennsylvania Chap- was appointed chairman of the Meet- ter of the National Contract Man- ings and Programs Committee of the agement Association, New Cumber- D.C. Institute of CPAs for 1971-72. land, Pa., May 24, on “GAO, De- Mr. Smith was also reappointed to fense Contractors, and the Depart- serve on the AICPA Committee on ment of Defense.” State Legislation for 1971-72. The Central States Conference of Daniel Borth, deputy director, as Certified Public Accountants, leader, and Richard W. Maycock and Omaha, Nebr., June 14, on “Role of Irving Zuckerman, assistant directors, the CPA in Federal Programs.” as resource counselors, conducted a workshop at the 1971 National Sym- Mr. Morse, as president of the posium of the Federal Government FGAA, moderated the President’s Accountants Association on the subject Panel on “Development of Accounting “A New Look at Accrual Accounting.” and Auditing Standards” at the 1971 Edward 1. Mahoney, deputy direc- ..National Symposium of the FGAA. tor, was elected to the Board of Direc- Other participants were: Eltore Barbi- tors of the Washington Chapter, telli, president, NAA; John H. FGAA. He will serve this year as Poelker, president, MFOA; Philip L. director of the Meetings Committee. Defliese, chairman, AICPA Accounting William L. Campfield, associate Principles Board; and Prof. Martin director, served as visiting professor of Black of Duke University, representing business administration at the Univer- the president, AhA. sity of California, Berkeley, during the Articles by Mr. Morse published re- spring quarter 1971. He also addressed cently are: the following groups:

154 PROFESSIONAL ACTIVITIES

The Berkeley-Stanford Account- tems (Man and Society) at the First ing Colloquium, April 8. General Assembly of the World Future A Joint Meeting of the Peninsula, Society held in Washington, D.C., May Sacramento, and San Francisco 12-15. He also addressed the Annual Chapters, FGAA, April 20. Conference of the Association for Com- A Beta Alpha Psi Meeting, Uni- puting Machinery, Chicago, Ill., August versity of California, Berkeley, May 3. His paper was entitled “Toward 20. Better Information and Analysis Sup- The Professional Accounting port Services for the Congress.” Workshop, University of California, Earl M. Wysong, Jr., supervisory Berkeley, May 20. systems accountant, and Ronald KO- The Faculty-Student Business zura, computer systems analyst, are School Seminar, California State listed in Who’s Who in Computers and College at Hayward, May 28. Datu Processing 1971, a joint publica- The Oakland-East Bay Chapter, tion of The New York Times and California Society of CPAs, June 15. Computers and Automation. The American Management Asso- James P. Wright, operations research ciation Operational Auditing Work- analyst, was one of the panelists in a shop, July 19. discussion on discounting at the Inter- The American Accounting Asso- national Cost-Effectiveness Conference held in Washington, April 12- ciation Panel on Measure of Effec- D.C., under the auspices of the Inter- tiveness for Social Programs, Lex- 15, national Federation of Operational ington, Ky., August 25. Re- search Societies. Mr. Campfield published the following papers: “Auditing Management Perform- Civil Division ance,,’ The Financial Executive, Jan- uary 1971. At the National Association of “Controversies and Opportunities Accountants Annual International Con- in the New Management Auditing,” ference which was held in Honolulu, The Internal Auditor, March/April Hawaii, June 20-24, A. T. Samuelson, 1971. director, Civil Division, was elected to Keith E. Marvin, associate director, the position of national vice president. and Joseph D. Comtois, assistant direc. This is the first time in the history of tor, Systems Analysis Group, partici- the NAA that a government employee pated as panelists in a seminar on has filled such a high post in the asso- “Accountants, Auditors, and Systems ciation. Analysis” at the Federal Government DonaEd C. Pulkn, assistant director, Accountants Association National Sym- participated in the Executive Manage- posium, June 29. ment Program at the Pennsylvania Kenneth W. Hunter, assistant direc- State University, June 27-July 24. tor, chaired a panel on Political Sys- George D. Peck and Richard I.

155 PROFESSIONAL ACTIVITIES

Woods, assistant directors, participated The GAO staff at the National Insti- in the Conference on the Evaluation of tutes of Health (NIH) sponsored a the Impact of Manpower Programs health coordination seminar, June 3, sponsored by the Department of Labor for GAO staff members involved in and the Center for Human Resource health-related reviews. Guest speakers Research, Ohio State University, June at the seminar were Dr. John A. D. 15-17. Mr. Woods also participated in Cooper, president of the Association of the Residential Program in Executive American Medical Colleges, and Dr. Education at the Federal Executive In- Robert Q. Marston, Director of NIH. stitute, Charlottesville, Va., August 29- October 22. Defense Division Donald M. Mutzabaugh, special assistant to the director, was elected Charles M. BaiZey, director, gave a president of the NAA Washington presentation on “should cost” concepts Chapter for 1971-72. Max A. Neu- before the American Institute of In- wirth, associate director, was elected dustrial Engineers conference in Wash- vice president. Harold L. Stugart, as- ington, D.C., on April 23. Mr. Bailey sistant director, Jack L. Mertz, special also spoke at the Defense Economic .assistant to the director, and Stephen Analysis Council Symposium, May 21, J. YarhoZy, supervisory auditor, were on the subject “The Relevance of Eco- elected as directors of manuscripts, nomic Analysis to Decisionmaking in membership, and educational activi- the Department of Defense.” On June ties, respectively. 7 he again addressed the professional Robert A. Peterson, supervisory military comptroller course, Air Uni- auditor, lectured on the topic “GAO versity, Maxwell Air Force Base, Ala. Requirements for Internal Auditing,” Hassell B. Bell, associate director, at the Department of Commerce Inter- spoke at the Defense Weapon Systems governmental Training Center, Be- Management Center at the -4ir Force thesda, Md., April 14. Institute of Technology, Wrigh’ Patter- Joseph R. Daigle, Francis X. Fee, son AFB, Ohio, April 22. His subject James E. Kelly, and Harry J. Sanger, was “GAO and the Project Office.” Mr. supervisory auditors, participated in Bell also gave a briefing at the Navy the Urban Affairs Conference for Fed- Logistics Management School’s eral Officials conducted by the Na- Weapon System Acquisition Manage- tional Institute of Public Affairs, ment Baseline Course, Naval Materiel Chicago, Ill., May 2-8. Command, May 6. His subject was the David D. CahaZen, Lester lV. Gar- role of the Director of Defense Re- ton, and Arnold G. Rifle, supervisory search and Engineering in weapon sys- auditors, participated in the Federal tems acquisition. Action and the People of Our Cities Harold H. Rubin, associate director, Program conducted by the National participated with Department of De Institute of Public Affairs, Boston, fense representatives in a Civil Service Mass., June 27-July 2. Commission session at the Executive

156 PROFESSIONAL ACTIVITIES

Institute for Management of Scientific ization and Functions of the General and Engineering Organizations held in Accounting Office and Their Relation. April. ship to Defense Logistics.” J. Kenneth Fasick, associate direc- An article by Timothy D. Desmond, tor, attended the Conference for Fed- supervisory management analyst, ap. eral Executives on Business Operations pears in the Spring 1971 issue of Na- sponsored by the Brookings Institution, tional Contract Management Journal. held in Chicago, Ill., May 16-21. The article entitled “Needed: More Forrest R. Browne, associate direc- Flexibility in Major Weapons R&D,” tor, addressed the participants of the was awarded honorable mention in the Administration of Public Policy course annual technical writing contest con- sponsored by the US. Civil Service ducted by the Journal. Commission, Executive Seminar Center, Oak Ridge, Tenn., August 2. His subject was “Congressional Over- Field Operations Division sight and the Role of the GAO.” Anthony L. Komac, audit manager, Jerome H. Stolurow, associate direc- Atlanta, was elected to the board of tor, spoke before the San Francisco directcrs of the Atlanta Chapter of Chapter of the National Contract Man- FGAA for fiscal year 1972. agement Association, July 13. His subject was “Should Cost Methods of Donley E. Johnson, audit manager, Pricing Government Contracts.” and Leonard J. Yoerger, supervisory auditor, St. Paul, were elected president William F. Coogan, assistant direc- and director, respectively, of the Min- tor, addressed the faculty colloquium neapolis-St. Paul Chapter of FGAA at the Cornel1 University Center for for fiscal year 1972. International Studies, April 29, on the aspects of weapons procurement and David P. Sorando, rkgional man- defense policy covered by GAO’s stud- ager, Cincinnati, addressed the Cleve- ies. land Chapter of FGAA on April 21. Felix E. Asby, assistant director, His topic was “GAO Trends-Past and was a guest lecturer, July 20, at the Present.” U.S. Army Logistics Management Daniel L. McCafierty, supervisory Center, Fort Lee, Va. He spoke before auditor, Cincinnati, spoke before the a group of US. Army Reserve officers Accounting Society of Murray State enrolled in the Logistics Career Pro- University, April 7, on “The Challeng- gram on the role and responsibilities ing World of GAO.” of the US. General Accounting Office. Deon H. Dekker and James J. Mathew Gradet, assistant director, Jodon, assistant regional managers, was a guest lecturer, August 3, at the and Daniel C. Vhite, supervisory audi- Logistics Executive Development tor, were elected directors, and Ronald Course at the US. Army Logistics D. Kelso, supervisory auditor, Dallas, Management Center, Fort Lee, Va. The was elected president of the Dallas subject of his lecture was “The Organ- Chapter of FGAA for fiscal year 1972.

157 PROFESSIONAL ACTIVITIES

Joe D. Quicksall, supervisory audi- Association’s February 1971 Newslet- tor, Dallas, served as moderator of a ter. panel discussion of “What Is a Profes- Dominic F. Ruggiero, assistant re- sional Accountant” at the March meet- gional manager, Los Angeles, was ap- ing of the San Antonio Chapter of pointed to the Advisory Committee of FGAA. the Accounting and Business Informa- Stewart D. McElyea, regional man- tion Systems Department, California ager, Denver, addressed the Albuquer- State College at Los Angeles. He will que Chapter of the National Contract serve for the 2-year period beginning Management Association, May 12. His January 1, 1971. subject was “GAO and the Contrac- Richard J. Gannon, audit manager, tor.” Also, Mr. McElyea has been ap- Los Angeles, spoke before the Orange pointed to the Social Responsibility County Chapter of the National Con- Committee of the Colorado Society of tract Management Association, Janu- CPAs. ary 13. He spoke on the “Should Cost” Other members of the Denver region concept. who have been appointed to commit- William J. McCormick, Jr., audit tees of the Colorado Society are: manager, Los Angeles, spcke before John E. Murphy, assistant re- the San Gabriel Chapter of the Na- gional manager-General Meet- tional Contract Management Associa- ings tion, January 12, on the profit study Burdell 0. Buerger, audit manag- work of GAO. Also, Mr. McCormick er-Cooperation with Colleges has been elected State Director of the James E. Mansheim, audit manag- East Whittier Junior Chamber of Com- er-Governmental Accounting merce for 1971. Billie J. North-Social Responsi- On March 23, John D. Zylks, super- bility visory auditor, Los Angeles, spoke to Eva S. Copland-Social Responsi- the Rotary Club, Arlington, Calif., on bility the role of GAO in reviewing the re- Kathryn E. McNurZin-Social Re- sults of Federal programs. sponsibility L. Neil Rutherford, audit manager, Donald C. Ingram, audit manager, Seattle, addressed a joint meeting of Denver, was elected director of pro- the Tri-Cities Chapters of the National grams of the Denver Chapter, FGAA, Association of Accountants and the for fiscal year 1972. National Contract Management Asso- Hyrnan L. Krieger, regional man- ciation in Richland, Wash., April 13. ager, Los Angeles, spoke before the The subject of his address was “Uni- South Bay Chapter of the National form Cost Accounting Standards and Contract Management Association, Government Procurement.” February 12, on the subject “An Douglas E. Cameron, audit man- Objective View of the Prime Contrac- ager, Portland, was elected vice presi- tor.’, His article on “Observations on dent of the FGAA Portland Chapter ‘Should Cost”, was published in the for fiscal year 1972.

158 PROFESSIONAL ACTIVITIES

Joanne M. Elmslie and Curl E. Institution and the Legislature” and Weber, supervisory auditors, Seattle, “Administrative Techniques for Chal- were elected treasurer and director, re- lenging the Award of Government spectively, of the FGAA Seattle Chap- Contracts.” ter for fiscal year 1972. On May 12 William B. Bernsdorf, Donald A. Praast, supervisory supervisory auditor, Far East Branch, auditor, Seattle, was elected president addressed the FGAA Guam Chapter of the Institute of Internal Auditors concerning the organization, functions, Puget Sound Chapter for fiscal year and operations of the GAO. 1972. Harold E. Lewis, supervisory audi- James B. Deemer, supervisory auditor, Far East Branch, and president of tor, Washington, D.C., spoke before the FGAA Hawaii Chapter for 1971, the Accounting Club of Virginia Com- served on a panel at the University of monwealth University, Richmond, Va., HauFaii Accounting Club, March 18. March 17. His subject was “The GAO The subject of Mr. Lewis’ remarks was and Management Auditing.” “Career Opportunities with the Gen- Washington supervisory staff mem- eral Accounting 05ce.” On April 7 he bers will hold the following offices in participated in the Business Night ’71 the Northern Virginia Chapter of special awards ceremony of the Uni- FGAA for fiscal year 1972: John P. versity of Hawaii, presenting Govern- Carroll, director; Richard E. Nygaard, mental Accounting Education Awards treasurer; and Gretchen C. Schwarz, on behalf of the FGAA Hawaii Chap- vice president. ter to the two outstanding University of Hawaii students in governmental accounting. International Division

Joseph P. Normile, director, Euro- Office of Personnel Management pean Branch was elected director of meetings at the March 29 charter meet- During the 25th Annual Conference ing of the Frankfurt (Germany) Inter- of Accountants, April 27-29, Tulsa, national Chapter of the International Okla., Leo Herbert, director, spoke on Association of Accountants. Mr. Nor- “Challenges to Creativity.” He also mile was the U.S. delegate to the In- participated as a panelist in a work- terregional Seminar on Government shop on Interface of Business Schools Auditing held in Baden, near Vienna, with Business and Government at the Austria, May 3-14, under the joint American Association of Collegiate sponsorship of the United Nations and Schools of Business Meeting and at the the International Organization of Su- American Association of Collegiate preme Audit Institutions. He delivered Schools of Business Assembly Meeting two papers on the subjects: “The Rela- in Denver, Colo., on May 4-7. He ad- tionship Between the Supreme Audit dressed the AACSB on “The Business-

159 PROFESSIONAL ACTIVITIES

Government-Education Interface.” Mr. Western Regional Meeting of the Herbert also spoke on “Education and American Accounting Association in Training of Accountants” before the Las Vegas, Nev., May 7-9.

I DO NOT CHOOSE TO BE A COMMON MAN

Jt id my right to be uncommon . . . ;P J can e J deek 8 opportunity . . . not decurity. J do not wid to be u kept citizen, llumLted und dutfed by Auuing tlle Stute look uher me. J wunt to tuLe tlle cuPcuPuted rid: to dreum und to Lied, to fuitund to ducceed. J refude to hurter incentive for u dote. Jprehr tlle CllaPPenged o!hb to tlle guurunteed exi3tence: tLe tLrit! o! fu@!!ment to the dtule of utopia J wittnot trude Feedom /Lr Lenejcence nor my dignity for u llundout. J wiltneuer cower before uny mudter nor bend to uny tllrecct. Jt id my llerituge to dtund erect, proud und unulruid: to tLinL und uct for myhe4 enjoy tlle bene/h olmy creutionc, und to fuce tlle world Loldly und Juy, tlli3 J lluue done. Atltllid is what it meund to be un Amer icun.

From a leaflet diltrihuted by the Colorado Shaver Center. Denver. Colo.

160 The following new professional staff members reported for work during the period March 16, 1971, through August 15, 1971

Organization and Pin, Clerio P. US. Atomic Energy Com- Management Planning mission Staff

Office of the Berger, Ronald U.S. Air Force General Counsel Buckles, Galen M. Sperry Rand Space Support Division Shrensky, Lewis F. Department of Commerce

Civil Division Antonio, Robert M. Mount St. Mary’s College Barrett, Roland G. University of Minneapolis Bowers, Frank Savannah State College Bridgett, Charles H. Benjamin Franklin University Butler, John J. Pennsylvania State Universky Cannon, Peter M. Husson College Coberly, Marian K. (Miss) Glenville State College Collard, George W. Bryant College Collis, Thomas E. Virginia Polytechnic Institute Connor, Joseph M. Mount St. Mary’s College Dee, Robert D. University of Rhode Island Doby, Jape L. (Miss) Morgan State College Guido, Frank M. Geneva College Halbe, Neal F. Pennsylvania State University Hawkes, Sidney G. The Mead Corporation Kruslicky, Mary A. (Miss) Virginia Polytecbn’c Institute Lawler, John E. St. John’s University Lightner, Kenneth E., Jr. Pennsylvania State University Malacavage, Joseph P., Jr. King’s College Manzi, Anthony G. Pennsylvania State University Matteotti, Dennis A. Thiel College Miller, Steven P. University of Utah Miller, Texyn L. West Liberty State College Murray, Edward T. Clarion State College Parsons, Robert E. Fairmont State College Peters, Edmund R. Columbia Union College Phill’ps, David H. University of Iowa Rogers, Ronald R. Moravian College

161 NEW STAFF MEMBERS

Sample, Leon D. Shippensburg State College Sgobba, Victor J. University of Scranton Shea, Ronald F. Quinnipiac College Sheard, Robert 0. Susquehanna University Shreffler, Peter B. Clarion State College Sombar, Seth T. Tusculum College Strange, James W. Savannah State College Taft, Richard H. Kansas State College Tdrman, Larry D. Tusculum College Wagner, David H. Morris Harvey College Wagoner, Joe E. Pfeiffer College

Defense Division Barmby, John G. IIT Research Institute Bowling, Steven K. Carson-Newman College Hill, William A. Carson-Newman College Holmes, Dennis R. Carson-Newman Ccllege Keema, Alexander W. III San D:ego State College Keppel, Michael R. Pennsylvania State University Lopez, John F. University of Marylagd Mead, Eric A. Adams State College Miller, Virgil K. Tennessee Technological University Truitt, Robert N. Milligan College

Division of Stewart, Jimmy D. University of Idaho Financial and General Management Studies

international Fauntleroy, Helen D. (Mrs.) Virginia State College Division-Washington

Transportation Dodson, James E. American University Division Roemer, Steven M. State Un’versity of New York

REGIONAL OFFICES

Atlanta Berry, James D., Jr. Troy State University Denney, Larry E. Troy State University Lowery, David S. Florence State University

Chicago Xodapp, Ronald J. Mankato State College Seeley, Dale W. Drake University

Cincinnati Bricking, William H. Xavier University Dam, Edward A. Indiana State University Hazard, Michael J. Thomas More College Hovey, Walter T. Department of Agriculture

162 NEW STAFF MEMBERS

Denver Lorenzen, George L. US. Air Force Pickering, Robert P. u.3. Army Trapp, Arthur D. University of Colorado

Los Angels Gauthier, Royal D., Jr. University of Arizona Luter, James T. University of Ariiona McGraw, Ambrose A. California State College at Fullerton Marcus, Charles F. California State College at Long Beach Mikami, Robert M. California State College at Long Beach

New York Cutler, Dennis E. Grumman Aerospace Corporation Hartwig, John E. University of Illinois Hefferon, Edward F. Notre Dame of Staten Island Najberg, John M. New York University

Norfolk Payne, Richard G. Catawba College Philips, Johnnie M. Old Dominion University Wecht, John E., Jr. Old Dominion University

Philadelphia Brady, Robert B. Pennsylvania State University

San Francisco Bailey, Earl A. University of Puget Sound Cotton, Ralph A. San Francisco State College Covington, Wilfred A. San Jose State College Jefferson, David W. US. Air Force Lang, William J. Stanislaus State College Staal, Donald E. Thrift Stores

Seattle Edmonson, Kenneth W. Department of Health, Edu- cation, and Welfare

163 The reviews of books, articles, and other documents in this section represent the views and opinions of the individuai reviewers, and their publication shouZd not be construed as an endorsement by GAO of either the reviewers’ comments or the books, articles, and other documents reviewed.

Bibliography on Federal cludes the items from the earlier study, Accounting, Auditing, except when the original publications Budgeting, and Reporting, were superseded by other publications, 1900-1970-Annotated plus similar kinds of material published from 1952 through 1970. Published by the Federal Government The material listed refers to books, Accountants Association, Arlington, pamphlets, and articles published in Va., 1971; $5.00. the United States, plus a few references to articles from English language This comprehensive, annotated periodicals published in other coun- guide to the literature on Federal finan- tries. cial management subjects will provide The compendium is imposing in its a helpful single source reference for size and content. Its 229 pages include interested personnel of the Federal 132 pages of main entry items ar- Government, State, and local govern- ranged under 46 broad descriptors ments; independent researchers; and covering such diversity as Account- students and teachers of public admin- ing-Federal, Accounting-General, istration and related disciplines. Budgeting, Eflective Communication, The bibliography represents the up- Fiscal Policy, Long Range Planning, dating of an earlier work put together Procurement, and Public Administra- by the Research Committee of the Fed- tion. Each item in the main entry is eral Government Accountants Associa- annotated to describe the listing be- tion (FGAA) and published by the yond the identification of content fur- FGAA in 1952. The current book in- nished by the title of the item and the

164 READINGS OF INTEREST descriptor title under which the item is for financial management in the Fed- categorized. eral Government as well as by teach- The bibliography is further subdi- ers, students, and others interested in vided into (1) a subject index (62 management in the public sector. pp.) which identifies each item with an W.L. Campfield, appropriate descriptor category and Associate Director, also indicates the location of the anno- Division of Financial and tation in the main entry section and General Management Studies. (2) an author index (35 pp.) which contains conventional identification of items by author and title and provides EDITOR’SNOTE: cross-reference by descriptor code to GAO staff members played an important the annotation in the main entry sec- part in the preparation of this bibliography. tion. In the foreword signed by E. El. Morse, Jr., The main virtue of the bibliography as president of the FGAA, and Mortimer is that it brings into one data source A. Dittenhofer, chairman of the Association’s National Research Committee, the names of the important writings about Federal 34 individuals are listed as having actively financial management that have been assisted in preparjng the bibliography. produced over the past 70 years, but Twelve of these were GAO staff members for which reference has been scattered as follows: over the many indexes prepared by Office of Policy and Special Studies accounting, budgeting, finance, public Earl M. Wysong, Jr. administration, personnel, and other Frankie L. Schlender groups and associations. The one dis- Civil D’vision Donald C. Pullen advantage of the publication, which is Frederick K. Rabel coinmon to most bound volumes, is the Frederick J. Rauscher difficulty of updating it on a more fre- Albert B. Jojokian quent and practical basis than has ex- Office of Personnel Management isted in the past. Perhaps the sponsors Herbert R. McLure will find some looseleaf binder supple- Washington Regional Office Donald L. Scantlebury mentary way to overcome this handi- Katherine L. Scheibelhoter cap to potential users. John P. Carroll The publication is the effort of a International Division large number of FGAA project re- John J. Filan searchers who are literally a blue rib- William M. Romano bon cross-section of Federal financial management expertise and insights. Federal Evaluation Policy On balance, this reviewer believes the bibliography to be a long needed By Joseph S. Wholey, John W. Scan- and highly welcome addition to finan- lon, Hugh G. Duffy, James s. Fuku- cial management literature. He moto, and Leona M. Vogt; The Urban strongly recommends its acquisition by Institute, Washington, D.C., 1970; each person who has a responsibility $2.95.

165 READINGS OF INTEREST

In the foreword to “Federal Evalua- ships and responsibilities for evaluation Policy,” William Gorman, Presi- tion, (4) evaluation resource require- dent of The Urban Institute, says that ments, and (5) a summary of major it is the Institute’s hope that the gen- recommendations. era1 approach to program evaluation Each substantive chapter contains described in this book will be useful to the authors’ recommendations-a total administrators and legislative bodies, of 72, of which 34 are classified as to State and local officials who carry “major” recommendations by the au- out Federal programs, and to analysts thors. “Major” should be interpreted both in and out of government. Now loosely because some of the major rec- that’s a big hope for almost any book ommendations are platitudes. Many, and particularly for one that can be however, are noteworthy. For exam- read in a couple of hours or less. Nev- ple: ertheless, I believe the book lives up to 1. me OB^^ of Management and the expressed hope. It clearly has rel- Budget (OMB) should require evance to anyone who has responsibil- each Federal agency to submit, ity either for making evaluations of as part of its annual budget jus- the results of programs or projects or tification, a 2-to-3-year plan for for. reviewing program evaluation re- evaluating each of its major pro- ports. grams. This 134-p~paperback is con- 2. Through OMB the President cerned principally with the loci of au- should require initiation of na- thority and responsibility for evalua- tional program impact evaluation, with evaluation approaches and tions that cross agency lines to difficulties, and with pitfalls to be compare the effectiveness of re- avoided. While the authors make no lated programs in achieving attempt to describe or to prescribe de- common objectives. tailed techniques of evaluation, chap- 3. Congress should require, every 2 ter six entitled “Methodology” does to 3 years, program impact eval- effectively explore the methodological uations of each major Federal tasks to be accomplished in carrying program. Out evaluations, draws tentative con- 4. Because budget decisions can be clusions on the methodological feasi- aided by knowing what program bility of the various types of evalua- is better, comparative studies of tion for the programs examined, and two or more programs should be recommends priorities among possible given precedence over studies of evaluation studies, field experiments, single programs. and experimental demonstration proj- 5. Because the findings of the ects. broad-based program impact Other chapters in the book concern studies can conceal the value of (1) why Federal evaluation is needed, worthwhile projects and strate- (2) administration of an evaluation gies, program impact evaluations system, (3) organizational relation- should be supplemented by proj-

166 READINGS OF INTEREST

ect rating systems and program of various causal factors when only strategy evaluations. one project is analyzed. 6. Since (except in the case of con- In addition to their usually interest- trolled experiments) evaluation ing discussions and recommendations, of the effectiveness of individual the authors have included other tidbits local projects will often be be- of interest to evaluators of programs. yond the present methodology or One table (p. 88) shows a classifica- outside reasonable cost con- tion of program evaluation research straints, single-project evalua- designs and some of the characteristics tions should be steered toward of each design. A brief discussion of periodic comparison of project the use and difficulties of control and outputs with objectives pre- experimental groups follows the table. viously stated in measurable Another tidbit is a table (p. 109) terms. which shows the authors’ estimates of the conditions for evaluation of 18 se- Throughout the book the authors lected social programs. For several make clear that evaluations of the re- programs, for example, Model Cities, sults of programs are needed, but they the authors believe that there are no make just as clear that there has been suitable output measures, inadequate very little good evaluation and that for measures of environmental variables, some programs evaluations of effec- no control groups, and no measures of tiveness cannot be made at this time appropriate input and process varia- with present methodology, definitions bles. In short, for such programs the of output, and data. The Office of Eco- authors believe it unrealistic to attempt nomic Opportunity is given recogni- massive program impact evaluations at tion for being further ahead in its this time. evaluation effort and organization than Another interesting tidbit in this any other Federal agency, but it too book is the bibliography which con- has had difficulties. tains 187 references, nearly all of Two other conclusions are in evi- which were published between 1963 dence throughout the book: (1) suc- and 1970. Covering a wide variety of cessful evaluation depends on support program evaluation related books and by the Congress, the President, the periodicals, the bibliography is worth OMB, and agency leaders and (2) the cost of the book. It was a good evaluations of alternative programs or idea to have a lengthy bibliography projects are more useful information because some of the discussions in the for decisionmakers than are single pro- book are extremely brief, perhaps too gram and single project evaluations. much so for a newcomer to the field. The authors are not enthusiastic about The reader of this book should gain local project evaluations because they an awareness of (1) some of the believe that project evaluations are too things agencies, the Congress, and expensive and that it is generally not OMB should do if they are to cause possible to determine the importance worthwhile evaluations to be made,

167 READINGS OF INTERESJ

(2) various approaches to evaluation Ted M. Rabun, and why various approaches are neces- Assistant Director, sary, and (3) pitfalls. I believe that all Division of Financial and General program evaluators and agency leaders Management Studies. would benefit from reading this book.

Getting Useful Information

Managers tend to put a premium on information that is measurable, apparently accurate, and easily available. But the overall performance of the company is likely to depend much more on “soft” data -that is, what customers think of a product or service. Snooping around can get you 100 times as much useful information as looking through official reports.

Jay Forrester Professor of Management, Alfred P. Sloan School of Management, Massachusetts Institute of Technology. Quoted in Think Magazine, March-April 1970.

168 Annual Awards for Articles Published in The GAO Review

Cash awards are available each year The awards are based on recommen- for the best articles written by GAO dations of a panel of judges designated staff members and published originally by the Comptroller General. The in The GAO Review. Each award is judges will evaluate articles from the known as the Award for the Best Arti- standpoint of the excellence of their cle Published in The GAO Review and overall contribution to the knowledge is presented during the GAO awards and professional development of the program held annually in June in GAO staff, with particular concern Washington. for: One award of $250 is available to contributing staff members 31 years of Originality of concepts. age or under at the date of publica- Quality and effectiveness of written tion. Another award of $250 is availa- expression. ble to staff members over 31 years of Evidence of individual research per- age at that date. formed. Staff members through grade GS-15 at the time of publication are eligible Relevancy to GAO operations and for these awards. performance.

Statement of Editorial Policies

1. This publication is prepared for use by the professional staff members of the General Accounting Office. 2. Except where otherwise indicated, the articles and other submissions generally express the views of the authors, and they do not necessarily reflect an official position of the General Accounting Office. 3. Articles, technical memorandums, and other information may be submitted for publication by any professional staff member. Submissions may be made directly to liaison staff members who are responsible for representing their offices in obtaining and screening contributions to this publication. 4. Articles submitted for publication should be typed (double-spaced) and range in length between five and 14 pages. The subject matter of articles appropriate for publication is not restricted but should be determined on the basis of presumed interest to GAO professional staff members. Articles may be submitted on subjects that are highly technical in nature or on subjects of a more general nature.

169

Q U.S. GOVERNMENT PRINTING OFFICE : 1971 482-430/1 THE GAO REVIEW

LIAISON STAFF

Office of Policy and Program Planning__-__--- E. H. Morse, Jr., Coordinator Office of the Comptroller General _--__-_-__---Rodney E. Espe Office of the General Counsel -______--Milton J. Socohr Division of Financial and General Management Studies _-______--Ted M. Rabun Civil Division ______-__---Jack L. Mertz Defense Division ______---Frank M. Kimmel International Division -______--_----__--- Charles E. Hughes European Branch -______-__-__--_---William L. Martino Far East Branch ______---Gilbert F. Stromvall Transportation Division.. ______-______Fred J. Shafer Field Operations Division -______-__-__Clyde E. Merrill Office of Personnel Management ______-____-_ N. B. Cheatham Atlanta _ _ - ______- ______- - ______Andrew F. McCall Boston ...... Charles F. Carr Chicago ______Clement K. Preiwisch Cincinnati ______Daniel L. McCaflerty Dallas ______Harold C. Barton Denver ______John T. Lacy Detroit ______Robert 0. Gray Kansas City ______-__--_ArmLett E. Burrow Los Angeles ______-____-Eugene T. Cooper, Jr. New York ...... William F. PalEer Norfolk ______-___-_Paul Gaskill Philadelphia ______- _ - _____---__ _ _ _ Horace Y. Rogers San Francisco ...... Kenneth A. Pollock Seattle ______- ______Richurd 0. Long Washington ______George L. Egan, Jr.

EDlfORlAL ASSISTANCE

Office of Policy and Program Planning__,-__-- Josephine M. CZark Office of Administrative Services ______Jane A. Benoit Alice E. Graziani Linda M. Lysne U.S. GENERAL ACCOUNTING OFFICE WASHINGTON, D C 20548 . .. . OFFICIAL BUSINESS

POSTAGE AND FEES P41D U S GENERAL ACCOUNTING OFFICE