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the maintenance and operation of the buildings occupied by the Treasury in the District of Columbia, and the management and utilization of the space assigned to Treasury units both in Washington and in the field. If a central administrative service is established for the whole Government, then some consideration should be given to the relocation of the present space control functions of the Treasury. Otherwise, the housekeeping services of the Treasury are fairly well grouped at the present time.

Top Management Staff.-As indicated by the foregoing discussion, the top management staff of the Treasury, which determines the general policy of the department, should consist of the following officers:

1. Secretary of the Treasury.
2. Under Secretary of the Treasury.
3. General Counsel.
4. Assistant Secretary in charge of Revenue.
5. Assistant Secretary in charge of Banking and International Finance.
6. Fiscal Assistant Secretary (career post).
7. Accountant General Assistant Secretary (career post).
8. Budget Director Assistant Secretary.

The Secretary should, of course, be the top policy officer. He should be relieved as far as possible of any detailed supervision of the operating services, so that his time would be free for the determination of high-policy matters. This is the reason for definitely assigning the assistant secretaries to the supervision of these services.

The Under Secretary should be left largely in the same position as the Secretary, since he is in every sense the Secretary's alter ego. He is commissioned to act in the Secretary's absence. He often attends Cabinet meetings, and is expected to be in a position to speak on highpolicy matters with respect to finance whenever he is called upon to do so. He should, therefore, be relieved of direct responsibility for the administration of the separate Treasury services. He should be looked upon as the general manager of the department, and all top policy officials should report to the Secretary through him. This arrangement would permit him to be in touch with all departmental affairs, and would place him in a position to advise the Secretary on all fronts and to act for him in his absence.

The General Counsel should be concerned with the legal questions involved in the determination of top-policy matters. He should devote his time mainly to these questions, and interfere as little as possible with the actual administration of the operating services of the Treasury. The head of each service and his advisory counsel should determine the rules and regulations required in administering the service.

The Assistant Secretary in charge of revenue should have under his immediate direction the Division of Tax Research and the Office of Tax Legislative Counsel (if continued as a separate entity). In addition, he should have general supervision over the proposed Revenue Service, discussed below. In this way, all the revenue policy matters of the Treasury would clear through one responsible official at the top level of the department.

The Assistant Secretary in charge of Banking and International Finance should be the liaison officer of the Treasury with the Federal Reserve System, or better still, he should be a member of the Federal Reserve Board. He should have under him the Office of International Finance. If the office of Comptroller of the Currency is to be continued in the Treasury, then it should be under the general supervision of this assistant secretary.

The Fiscal Assistant Secretary would continue in charge of the Fiscal Service of the Treasury, but this Service would be thoroughly reorganized and somewhat expanded, as indicated in the subsequent discussion.

The Accountant General Assistant Secretary would be a new officer in direct charge of the proposed Accounting Service to be established in the Treasury Department. This service would operate a central accounting and reporting system for the entire Government, as recommended by the Accounting Policy Committee of this task force.

The Budget Director Assistant Secretary would be in direct charge of the Budgeting Service which would be transferred from the Executive Office to the Treasury Department. Only those functions relating directly to budgeting in the present Bureau of the Budget would be brought over to the Treasury.

Operating Services of the Treasury. The fiscal offices, units, and agencies of the Treasury Department, plus the functions transferred to the department, should be thoroughly reorganized and integrated under four major operating services: (1) Revenue Service, (2) Fiscal Service, (3) Accounting Service, and (4) Budgeting Service. The Revenue Service should have as its administrative head a commissioner of revenue, appointed by the President with the approval of the Senate; the Fiscal Service should continue to have a permanent head, the Fiscal Assistant Secretary, assigned from the career service, as at present; the Accounting Service should also have a permanent head, the Accountant General, chosen under the career service; and the Budgeting Service should have the Budget Director at its head, appointed by the President, as at present. An outline of the structure and functions of each proposed service will be found below.

The various appointive officers whose functions come within the scope of the proposed Revenue and Fiscal Services should be abolished and their duties assigned to career personnel. These officers include collectors of internal revenue, collectors of customs, comptrollers of customs, Register of the Treasury, Assistant Register of the Treasury, Treasurer of the United States, Assistant Treasurer of the United

States, Director of the Mint, and superintendents of the mints and assay offices.

It is expected that several of the large lending agencies of the Government will soon go into liquidation, a process that will extend over a good many years. It is suggested, therefore, instead of continuing parts of the agencies themselves, that a unit (or if large enough, perhaps a service) be set up in the Treasury Department to carry out this liquidation. This procedure was followed to some extent after World War I and is being proposed since World War II. It would appear to be a more economical approach to the problem than to continue elements of the lending agencies or to set up an independent office for their liquidation. Besides, the administrative and legal facilities of the Treasury Department would be available to a departmental unit, and would not have to be duplicated as in the case of an independent office.

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Suggested Revenue Service

A complete reorganization of the major revenue-producing agencies of the Government—the Bureau of Internal Revenue and the Bureau of Customs—into a single service of the Treasury Department would seem to be highly desirable. Such a merger has been recommended for several years as being advisable from the standpoints of economical and effective administration and the proper handling of the detailed tax functions. The integration of the work of the Bureau of Internal Revenue and of the Bureau of Customs would permit most of the administrative services of the two bureaus to be combined and would allow the field services in many instances to operate from the same offices. At the same time the overhead administration of the taxgathering functions should be greatly improved by central direction through one set of officials. Further integration of some phases of the work of the Bureau of Immigration with that of the Customs Bureau is desirable.

Recent surveys of both the Bureau of Internal Revenue and the Bureau of Customs indicate that the management of each bureau is: greatly in need of new directives, new approaches, and new methods. The usual drift of all long-established bureaus toward becoming more legalistic rather than practical is apparent in the management of these two bureaus. The "Investigation of the Bureau of Internal Revenue" for the Joint Committee on Internal Revenue Taxation, transmitted and printed in January 1948, dwells at length on the necessity of sweeping improvements in the management of the Bureau. It says. (p. 31), "Unnecessarily cumbersome, outmoded, and wasteful practices have continued unchanged in the Bureau for decades. Some improvements in administrative methods have been discussed at length without result, other changes have been put into effect, but only after overlong discussion.” Further on the report states (p. 37): "The present processing of tax returns and remittances in the collectors' offices follows procedures which can properly be characterized as outmoded. Most of the operations are performed by hand and with the aid of such simple devices as pins and hand stamps. The machinery utilized is for the most part worn out or obsolete in design. Up to the present time the Bureau has taken little advantage of changes in the technique of mass accounting and recording. Thus, although the volume of its routine work multiplied manyfold in a period when photography and machine accounting were revolutionizing business

treatment of mass recording, computing, and filing problems, the Bureau retained with little change long-standing manual methods." The recommendations of this report have been considered by the Bureau, and action on them has been delayed pending the findings of a recently initiated survey of the Bureau and all of its operations.

The "Management Survey of the Bureau of Customs” by McKinsey and Co., completed in January 1948, says (p. II–3) that the Customs Service appears to have been preoccupied with the legal and technical aspects, rather than with the management aspects of the job. We believe that the latter can be strengthened considerably by increased emphasis on cost and prompt service, application of modern management techniques and equipment, and provision of certain technical ‘know-how' for field operations.” Continuing, it asserts, "Customs, probably spurred by criticism where taking a 'calculated risk' has resulted in occasional failure to carry out the letter of the law, has further complicated its own problem by drawing up elaborate regulations and procedures to take care of every conceivable contingency. These precautions have led to a considerable amount of duplication of effort in 'checks and double checks. The use of judgment has not been encouraged and the Customs regulations allow very little discretion.” The report found great need of modern accounting methods, cost-finding procedures, and up-to-date auditing methods. It asserted (p. II–19) that the comptrollers of customs would be no longer needed if modern auditing techniques were applied. These recommendations have been studied by the Bureau, and it is understood that an effort will be made to carry some of them out.

It is suggested that the proposed Revenue Service should have assigned to it a, legal counsel which would aid the Commissioner in working out all administrative determinations and regulations where interpretations of the tax law are involved. But questions concerning revenue matters which involve the top policy of the Treasury Department should be reviewed by the General Counsel on behalf of the Secretary of the Treasury. The Revenue Service should be provided with a general staff, reporting to the Commissioner, to conduct a continuous study and analysis of its operations, practices, and problems. Outside advice should be sought at frequent intervals, in order to capitalize upon business methods and approaches. In the integration of the tax units under the proposed service, it will be necessary to reorganize and reassign some of them, particularly those dealing with minor and miscellaneous sources of internal revenue. The existing accounting and statistical methods of the tax services need to be thoroughly overhauled and modernized.

Throughout the years two important features in the control of tax receipts appear to have been overlooked in the Treasury's organization and fiscal procedure. One of these is the immediate check on

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