WEDNESDAY, JANUARY 18, 1956. BUREAU OF ACCOUNTS WITNESSES ROBERT W. MAXWELL, COMMISSIONER OF ACCOUNTS SIDNEY SOKOL, HEAD, ACCOUNTING SYSTEMS DIVISION SAMUEL J. ELSON, HEAD, DIVISION OF CENTRAL REPORTS EDMUND C. NUSSEAR, HEAD, DIVISION OF DEPOSITS AND INVESTMENTS ROGER E. SMITH, BUDGET AND FISCAL OFFICER WALLACE E. BARKER, JR., ASSISTANT COMMISSIONER FOR ADMINISTRATION HAROLD R. GEARHART, HEAD, DIVISION OF CENTRAL ACCOUNTS Mr. GARY. The committee will come to order. We will take up this morning the request of the Bureau of Accounts, "Salaries and expenses," for which the appropriation in 1956 was $2,785,000. The appropriation for 1956 including a proposed pay supplemental is $2,913,000. The estimate for 1957 is $2,950,000, an increase over the apropriation plus supplemental for 1956 of $37,000. We have with us Mr. Maxwell, the Commissioner of Accounts. We would be glad to hear from you at this time, Mr. Maxwell. GENERAL STATEMENT Mr. MAXWELL. Thank you, Mr. Gary. The Bureau of Accounts has had no change in the general characte of its work. As you know, the Bureau's expenses of carrying on these function are paid from two administrative expense appropriations, namely "Salaries and expenses, Bureau of Accounts, Treasury" and "Salarie and expenses, Bureau of Accounts, Division of Disbursement." Mr Cannon, the Chief Disbursing Officer, is here to justify the appropria tion for the Division of Disbursement, under which we are requesting $16,240,000 for the fiscal year 1957. As you know, this appropriation covers the cost of paying Government creditors for obligations in curred by all the civilian activities of the Government except th Post Office Department, United States Marshals, certain corporations and a few agencies to which the disbursing functions have been dele gated. It also includes the expenses of issuing savings bonds to Gov ernment employees who participate in the payroll allotment plan t buy bonds. The other appropriation, under which we are requesting $2,950,000 for the fiscal year 1957, covers other fiscal and accounting operations of the Bureau of Accounts, most of which are listed unde the general statement of our budget submission. Before discussin this appropriation I would like to mention briefly our Bureau's man agement program. MANAGEMENT IMPROVEMENT PROGRAM The conduct of the management improvement program of the Bureau of Accounts, although coordinated through the Office of the Commissioner, is an integral part of the responsibilities of the head of each division and other supervisory personnel. In line with the bjective of the Treasury Department management improvement rogram, the primary objective of the Bureau's program is to process he workload in the best way under the least expensive methods and rocedures. The entire management staff is on the alert for ways of erforming their operations at the lowest cost. Suggestions with ny possibility of effecting economies are investigated. Where the olume of work is large enough so that it can be divided into repetitive perations, such as those of the Division of Disbursement or the Division of Central Accounts, labor-saving devices, including elecronic equipment, can more readily be adopted. In other divisions hich are smaller and have different types of work to process, appliation of automatic machines is limited and the opportunity for makng savings or effecting economies is smaller. This is illustrated by he management improvements made in the Bureau of Accounts in the iscal year 1955. Savings realized in the fiscal year 1955 from mangement improvements commenced in that year and prior years was pproximately $571,000. Of these savings, 88 percent is applicable o the Division of Disbursement and 12 percent to the remaining acivities. Action on management improvements affecting the fiscal ear 1956 will amount to approximately $291,000, of which 93 percent 3 applicable to the Division of Disbursement while 7 percent applies o other offices. The major dollar savings in the Division of Central Accounts was made in prior years from mechanization and realineaent of its operations. Among the principal actions which produced he savings for 1956 are the closing of four regional disbursing and ccounting offices and the realinement of the Washington regional lisbursing office, simplification of documentation supporting check ayments, and the greater mechanization and the improvement of lesigns in equipment. These savings are projected into the budget stimates for the fiscal year 1957. At the present time there is under study the use of electronic quipment for the issuance of checks covering regular recurring paynents. This work is the only area in the Bureau in which foreseeable avings of a substantial nature may be realized. These potential avings, possible through the use of electronic equipment, are deendent upon the continuation of a sufficient volume at certain egional locations. We have been considering certain steps which might be taken with espect to the Government losses-in-shipment fund. No appropriaon has been requested for the Government losses-in-shipment fund ince 1951 when $100,000 was appropriated. You will recall that this and was established in 1937 for the purpose of providing a fund or payment of losses under the self-insurance plan authorized by ne act of July 8, 1937. There has been a total of $893,803 approprited to this fund from its inception, the present balance being 178,000. In addition to the losses in shipment, the fund has been authorized be used to replace losses incurred by the Post Office Department while acting as agent for the Treasury in the sale of securities internal-revenue stamps and similar items and to replace losses by banking institutions resulting from erroneous redemptions of savings bonds. The large portion of the losses currently being charged to the fund are the result of those made under the last authorization. Based on the amount of claims now on hand it is possible that the fund will be exhausted sometime in the fiscal year 1957. However instead of requesting an appropriation for this purpose, the Treasury Department has under consideration a proposal to request Congress to authorize the transfer of $500,000 from the balance in the deposit fund account "Unclaimed partial payments on United States savings bonds." The amounts in this account generally represent unclaimed deductions for the purchase of savings bonds from wages of employees of firms working on Government contracts. Most of these represent very small amounts, a large proportion of which are less than $1. APPROPRIATION "SALARIES AND EXPENSES, BUREAU OF ACCOUNTS, TREASURY" FISCAL YEAR 1956 As you know your committee allowed an increase in the number of employees for 1956. This has enabled us to make further progress in our accounting improvement program by incorporating in our central control accounts procedure whereby a link is established between the Government's cash, most of which is carried in the account of the Treasurer of the United States, and the published statements of the Government's receipts and expenditures and budget results (based largely on reports submitted by the various agencies). You will recall that under an agreement of October 5, 1953, between the Secretary of the Treasury, the Director of the Bureau of the Budget and the Comptroller General, a revised basis was established for determining the Government's surplus or deficit; that is, it was changed to a complete checks-issued and collections-deposited basis as reported by the various Government collecting and disbursing officers. To assure an adequate verification of such reports, a pro cedure is now being established to permit these reports to be recon ciled with the Treasurer's accounts. We expect to have this system well underway by the close of the current fiscal year. The cost of doing this in the Treasury is but a small part of the total saving realized throughout the Government by reason of the simplification of procedures made possible under the new system. As a result of the 2 additional people, the Division of Centra Reports in 1956 will be able to improve the timeliness of 2 of it reports, i. e., the Secretary's annual report and the Treasury Bulletin and to bring about greater consistency and coverage of 2 other of it reports, the Monthly Treasury Statement and the Combined State ment of Receipts, Expenditures, and Balances. Additional data ar being provided in the latter report, which should make it more usefu and will bring it into agreement with the budget document. The additional position for an internal auditor to cover the opera tions of the Bureau of Accounts was filled at the beginning of thi fiscal year. Since then the audit program of the Bureau has bee nlarged and there are indications from the results of their work hat this will prove to be a sound investment. The 3 additional employees authorized for the Deposits Branch have been able to increase the review of reports received from deposiary banks from 500 to over 1,000 cases annually. Also, we have been able to remove the backlogs in pending correpondence in the Deposits Branch and the correspondence on the Philippine war damage claims mentioned last year. FISCAL YEAR 1957 For the fiscal year 1957 we are requesting an appropriation of $2,950,000. After making allowance for the salary increases ($128,00) authorized by the Federal Employees Pay Act of 1955 (Public Law 94, approved June 28, 1955), and an adjustment of $6,429 for a lifference in the number of working days in 1957 the increase over 1956 provides $35,825 for 8 additional employees to be distributed between the Division of Deposits and Investments, the Division of Central Reports, and the Division of Internal Audit, and $7,604 for replacement of equipment. Three additional employees are requested to broaden the review of reports from Government depositaries. With these additional employees, it is believed the Deposits Branch will be able to review about 1,000 additional cases annually, which should give satisfactory overage to this work. The Division of Internal Audit, in addition to being responsible for the internal audit of the fiscal operations of the Bureau of Accounts, s also responsible for the overall coordination of the internal audit program for the entire Treasury Department. One additional employee is requested for the fiscal year 1957 to assist in staff work in he general administration of the fiscal internal audit policies to be observed in the several bureaus of the Treasury Department. This work consists of giving technical advice and assistance to bureaus in the development of their programs, appraising bureaus' audit systems and operations in action, giving attention to audit reports of the General Accounting Office as they affect Treasury bureaus and preparing reports of the results of audit for the information of the Secretary of the Treasury. The current appropriation provides one employee to perform this work, which is inadequate from the standpoint of coverage and timeliness. Four additional employees are requested for the Division of Cenral Reports to cover the increased load in accounting and reporting of foreign currencies, to permit more complete reporting on assets and liabilities, and other transactions of Government corporations and public enterprises and the reporting of obligations in certain summary financial reports. With respect to the first item, statutory requirements governing the acquisition and disposition of foreign currency are covered by many acts of Congress and agreements entered into by the Department of State and foreign governments. These are constantly being expanded and as a result, it has ncreased materially the work of controlling, accounting, and reportng for these currencies. As to the second item, regulations which provide for reporting of assets, liabilities, income and expense, and 72073-56-5 |