expenditure vouchers in detail. At any rate, this appears to have been the construction put upon the law until World War II, when a broader concept was adopted for the auditing of certain types of war contracts.

Then, shortly before the close of the World War II, the making of "commercial-type" audits of the affairs of the Government corporations was instituted as required by the George bill and has been continued under the Government Corporation Control Act, by which the George bill soon was superseded. Specific statutory requirement that commercial-type audits be made of the departments and organizations other than corporations has not been adopted.

Pending the closing of this gap, it must be said that the Comptroller General's involvement in administrative matters that should be left entirely to the judgment of the Executive Branch of the Government, and the preoccupation of a large part of the Comptroller General's staff with detailed checking of expenditure documents, prevent full development of the potential usefulness of the General Accounting Office as the auditing and investigating agency of the Congress. These duties also prevent full development of the potential influence of Congress, acting through the Comptroller General, upon the promotion of economy, simplification, and prompt dispatch of business throughout the Government.

The principal fiscal officers of the Government are aware of the accounting shortcomings that we have stated, and an effort to correct them recently has been initiated. The Comptroller General has established in the General Accounting Office a new unit known as the Accounting Systems Division for the purpose of developing plans for putting the accounting of the numerous departments and other organizations on an appropriate basis; and he has been joined in this effort by the Secretary of the Treasury and the Director of the Bureau of the Budget. Together these three officers have assembled a group of top-grade technicians to work on the problem.

Thus, it appears that our findings as to accounting are largely confirmed by positive action initiated by the three foremost fiscal officers of the Government. However, as commendable as this action is, we are constrained to say that we do not believe that the shortcomings that we have stated can be satisfactorily overcome in this manner. Our reasons for this opinion are threefold.

First, it involves the Comptroller General still further in the acceptance and discharging of responsibilities that are clearly those of only the Executive Branch of the Government. Second, it is based upon voluntary cooperation between the organizations of the three officials named, and, being only a voluntary undertaking, it does not carry any guarantee of permanence. Correction of the present deficiencies cannot be made overnight. At best, it will be a process of

accelerated evolution. It may never be accomplished if it is left to the uncertainties of official harmony. Third, we seriously doubt that a sufficient number of persons of the qualifications required for doing a thorough job of the Government's accounting and auditing can be obtained if these activities are not set up in the manner, and put under the kind of direction, that we shall recommend.

Following is a summary of our recommendations:

1. That a central accounting office be established under the direction of a chief accounting officer of the Government and that the status of this office be made that of an independent establishment in in the Executive Office of the President.

2. That the duties of The Comptroller General of the United States be so redefined that there may be full realization of the potential usefulness of this officer as the Government's independent auditor and as the chief investigator for the committees of Congress, especially the appropriations committees; and that there also may be full realization of the potential influence of Congress, acting through the Comptroller General, upon the promotion of economy, simplification, and prompt dispatch of business throughout the Government.

3. That the proposed chief accounting officer be required and empowered to establish and maintain an accounting system appropriate to the Government's needs and to organize the accounting activity on the basis of centralized control and decentralized operation.

4. That the accounts be so kept that they will show currently, fully, and clearly the sources of the funds provided for the running of the Government and for what purposes these funds are spent; specifically, that the accounts be kept on the accrual basis.

5. That accounting terminology be adopted that is specific and free of double and multiple meaning.

6. That positive provision be made in the accounting system for separate accounting for funds that are subject to contractual obligations, restrictions, conditions, or other circumstances that make separate accounting necessary.

7. That accountable officers be relieved of financial liability for expenditures made contrary to law in all cases except those that result from gross negligence or fraud.

8. That the statutes that prescribe the present warrant system be repealed.

9. That the varieties of appropriations be reduced and that the practice of making authorizations to treat expenditures as public debt transactions, the practice of requiring expenditures to be "booked" in years other than those in which they occur, and the practice of writing substantive legislation into appropriation acts, be discontinued.

10. That the practice of attempting to restrict the amount spent for certain classes of expenses by placing limitations thereon in the appropriation acts be discontinued.

11. That the requirement that funds be requisitioned from the Treasury before they may be regarded as being available for disbursement be discontinued.

12. That a thorough study be made of disbursement policy, with particular reference to the fact that the disbursement function never has been completely taken over by the Treasury Department, and to the question whether it is necessary to permit any department to do its own disbursing.

13. That personnel policies be adopted that will assure the attraction and holding of the professional class of accountants and auditors that is necessary to proper carrying out of the Government's accounting and auditing activities.

The Government has been slow to adopt new developments in the field of accounting. Consequently, many of the deficiencies that our recommendations are designed to cure are of long standing. All of them go back beyond World War II and the depression period that preceded it. The manifold increases wrought in the annual budget and the national debtby these challenging misfortunes bring our accounting, auditing, and other fiscal shortcomings into bold relief and make immediate corrective measures imperative to the national welfare. Before proceeding to the discussion of our recommendations we call attention to a matter of very serious import to both the Government and private business that we were not able to examine but which we recognize as a problem of large proportions. Most businesses are objects of one kind or another of auditing inquiry by Government examiners and investigators. A great number of these businesses are required to submit-some of them regularly—to separate inquiry by agents of several different departments.

Multiple audits are unduly annoying to those who have to endure them and unnecessarily costly to everyone concerned, including the Government. We urgently suggest that this problem be exhaustively studied, with the objective of finding a way, if possible, to make one audit serve all of the Government's needs.

Comments

1. Accountant General of the United States.-The first step to be taken toward correction of the present situation is to draw a clear line of demarcation between accounting and auditing. The way to do this is to establish a central accounting office separate from the auditing office and the Treasury Department, head it by a chief accounting officer with undivided responsibility for accounting activities and with final authority in all accounting matters, and require this officer to establish and maintain a system of accounting and financial reporting appropriate to the Government's needs. We further recommend:

a. That the status of the central accounting office be made that of an independent establishment within the Executive Office of the President.

b. That the central accounting officer be designated the Accountant General of the United States.

c. That one of the qualifications of the Accountant General be that he be a professional accountant of the highest standing and attainments.

d. That the Accountant General be appointed by the President with the concurrence of the Senate for a term of 15 years without the privilege of reappointment.

e. That the salary of the Accountant General be not less than $25,000 per year.

We have recommended that a central accounting office be established, and that it be headed by a chief accounting officer with undivided responsibility for accounting activities and with final authority in all accounting matters, because we are convinced that this is what it will take to fill the void that lack of provision for an integrated accounting system makes in the Government's fiscal structure.

If there is to be any hope of developing and establishing an appropriate accounting system, whoever is charged with doing the job must be made free from all chance of being retarded or blocked by unreasoning devotion to tradition and stubborn unwillingness to adopt new ideas, concepts, and methods. He also must be put beyond the possibility of jurisdictional clashes with and between the several fiscal establishments. In short, he must be given a free and unfettered

hand.

We are aware that there are those who hold that a new independent establishment should not be created, that there already are more such establishments than the President can possibly keep in touch with.

To these we point out that, while the central accounting office would be a new establishment, it would not be engaged in a new activity. It would be engaged in an activity that is as old as the Government itself—one whose proper organization is long overdue.

Moreover, we suggest that a properly organized and directed central accounting office would be the source of information for the guidance of the President that would greatly lessen the time that he would have to devote to the other independent establishments if such information were no available.

We hold, as a matter of conviction, based upon our individual and collective observations and experience, in Government as well as outside of it, that a strong accounting department, set up at the right hand of the chief executive officer, is as necessary to the success of government as it is to the success of private enterprise.

We have recommended that the proposed chief accounting officer be called the Accountant General of the United States because this title would be clearly indicative of the duties of the person bearing it.

We have recommended that one of the qualifications of the Accountant General be that he be a professional accountant of the highest standing and attainments because this officer will have the biggest job of accounting to do that has ever been conceived. We do not subscribe to the idea that an office of this kind can be properly administered by merely a good executive. No executive, no matter how good he is, could fully discharge the duties of the Accountant General of the United States unless he were, in addition to being a good executive, a topnotch accountant.

An executive in this office who lacked the highest accounting qualifications could very easily fail to appreciate the significance of important technical problems and come to thoroughly unsound conclusions as to how these problems should be solved. No one would think of putting anyone but a lawyer at the head of the Department of Justice. It would be equally unthinkable to put anyone but an accountant at the head of the central accounting office.

We have recommended that the Accountant General be appointed for a period of 15 years without the privilege of reappointment because we deem continuity of tenure of office and maximum freedom from political influence to be of paramount importance. Accounting principles are not founded on political considerations; accounting is accounting no matter what the political complexion of the administration happens to be.

We have recommended that the Accountant General be paid not less than $25,000 per year because we regard this as little enough compensation to anyone who assumes and properly discharges the tremendous responsibilities of this office.

The central accounting office should be organized into four main