1 audits are effectively used in all sectors of activity insiness and Government. Also, many of these same organizamanagement audits to examine the efficiency with which the nctions are being executed. Now we need socioeconomic our governmental agencies to verify whether the resources - program are directed toward the true objectives of the

socioeconomic auditing should be put into widespread use guidelines for officials with budgetary responsibility for the of public resources and to keep the public informed. ioeconomic audit would provide a continuous assessment and ent of social performance. First, to assure that needs have perly defined. Next, that goals have been formed in response eeds. Finally, that goals are being met as projected and on

cally, in the Government sector program action response stronger to symptoms than to studied human needs. xplosive environment something is always done.

policies are provided, more money is pumped in, more beds - available, more guards are hired, more handouts are doled. best crash action produces no more than temporary solutions, "solutions" is the word at all.

ocioeconomic audit on the other hand, properly designed and o the system, deals with underlying causes, managerial frailhuman motivations. It delves to the root of problems, seeks nine for what the money is spent, why men perform as they do, at can be done to get better performance. It thus prevents crises upting and funds from being wasted.

budgetary and accounting control it is essential to determine right job is done. That the right need has been focused upon. e right goal has been met. This is the role of the socioeconomic The central focus is on the real human needs, on opportunities terrents. The technical-mechanical means of implementation econdary place.

he needs being met? That is the basic question.

youngsters being made employable? Prison inmates rehabiliWelfare recipients being made self-sufficient? Are patients the quality of health care they are requiring? Are students becated to function more effectively in society?

e are the questions that none of our budgetary procedures at

to answer.

t kind of standards are we setting and how well are we applym?

iting a structure which permits intelligent answers to these kinds stions, seem to me to be essential if Congress is to be able to select lgetary and spending goals priorities in a meaningful way. onclusion, what I have respectfully tried to say here today is he present action for budgetary reform give consideration to two s now largely absent from the budgetary process:

Require agency and program administrators to add qualitative ing and documentation in support of their budgetary requests. Provide in the budgetary process a system of socioeconomic ng.

I thank you for your attention and for inviting me to present m views.

Mr. SCHNEEBELI [presiding]. Chairman Ullman asked me to ex press his regrets. He had a 3 o'clock appointment, but he did read your whole statement and asked me to tell you that he was very im pressed with the broad knowledge you bring and the fine recommen dations you have made.

On my own part I believe this approach for qualitative reporting is similar to a program President Johnson tried to institute in 1965 I think it was known as program budgeting.

I assume President Nixon will also try to get a qualitative analysis of and reaction to the moneys being spent. This probably is the func tion of the OMB.

Certainly we want to know that the money that is being spent has an effective reaction.

Mr. LINOWES. I am intimately familiar with that program. What I am referring to is not a part of that.

The important distinction which I have been seeking to make is a qualitative one. PPBS still addresses itself to a quantitative output, and I think this is the dimension.

Mr. SHNEEBELI. I am glad I brought up that point, because otherwise there may be some thought in the minds of many people that it is the same thing.

Mr. LINOWES. It is completely different. If PPBS also applied a qualitative dimension then it would be fine. The problem is that they do not.

Mr. SCHNEEBELI. The problem is having a totally objective view. Mr. LINOWES. As I mentioned during the process of my prepared comments, Congressman Rees implied this when he indicated in California they have a legislative analyst who helps advise all parties which program should be carried on and which should be stricken.

To do that function in an effective way he must have a measurement standard that is meaningful.

The only kind that is meaningful would have to be a qualitative. Mr. SCHNEEBELI. Who would establish that?

Mr. LINOWES. This is the type of thing that should be established by an interdisciplinary committee. It could be established by Congress when they pass the legislation.

Mr. SCHNEEBELI. A nonpartisan group?

Mr. LINOWES. Or a partisan one. If, for example, a $10 million appropriation should be made and all efforts should be made to make the indigent employable and self-sufficient, and whatever steps are appropriate should be taken to carry out this objective, then if this program is later monitored by an audit, it would be up to the monitoring agency, whether it is the executive branch or the legislative branch, to determine whether the funds are being so spent.

What is happening today is that a poverty administrator does not set out trying to train those who receive the welfare checks so that he is employable and can seek employment, but rather it is doled out to him.

Therefore, the accountability at the end of a reporting period never takes into consideration whether or not even one person was made

ent for that expenditure of funds. This is a qualitative

1.

HNEEBELI. It is going to be difficult for an agency in auditing peration, it is going to be difficult for it to criticize its own.

some independent group will have to do this audit. NOWES. A socioeconomic audit or general accounting audit arried on. There is no reason why Congress should not also nto their appropriations. They report quantitatively and the is, I am saying in effect, "Will you tell us how many people le self-sufficient for the moneys spent on the poverty program, ell us how many convicts were rehabilitated last year for the spent or what level of education was achieved by a particular

CHNEEBELI. Thank you very much for your testimony. royhill.

AMES BROYHILL. You have some excellent thoughts here. Of his is really getting into something I mentioned the other day. d conceivably come up with a plan that would set some sort of g ceiling and relate that to revenues and some mechanism or re to set priorities as we allocate funds to various programs a major change in the way we have been appropriating money. st agree with that, but I think we are going to have to face the at there are other varied major changes that would have to be o really get the best from such a system, and that is what I all evaluation of programs.

eally do a poor job of evaluating programs at the present time either the appropriations or authorization committees. I am the few members on this committee that is a member of one of islative committees; the rest are members of the Ways and and Appropriations Committees.

eed to do a better job of oversight and establish a means to orities and assign dollar values to specific programs. We are to be called upon to vote on amendments to provide funding es, and there are always going to be more needs than present

es can meet.

vill have to have more information on which to base a vote other st political judgment.

agree with you, we have to do a lot of thinking along this is going to cause a lot more change than just setting a spendling.

LINOWES. Yes, this is precisely it. As a matter of fact, I find it impossible, if I were to try to evaluate one program as comto another program, as Congressmen constantly do, based on Dorting that comes out from the administration and the prothemselves, how to select one over the other. Because you really ave anything that is meaningful in terms of accomplishment. ist seems to me to fall into the realm of, as I indicated, a podecision. What has been happening increasingly with these e sums of money and social sectors taking an increasingly imt part of our gross national product, is that funds are being There is not real accountability because there is no determina

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tion as to how effective the dollars are being spent and as a result tremendous sums are being wasted and when there is an attempt at fiscal responsibility such as the present administration where arbitrarily programs are cut off, still without evaluation, granted there is quite a bit of waste.

Until we do build in a mechanism and we have to start somewhere, until we build in a mechanism to give us that kind of feedback, I don't see how any one can conceivably reach an intelligent judgment as to why we prefer one kind of poverty program over another.

Mr. JAMES BROYHILL. I think we are going to have to change the way we authorize programs.

For example, last week we passed the vocational rehabilitation program and the program to assist older Americans and both of them, as you know, were vetoed by the President.

Tremendous additional sums of money were authorized for both of these programs.

There is really no basis within the debate or within the committee report to say that we should be spending additional funds for this particular program as opposed to some other program.

That is why I say we are going to have to establish a better procedure of authorizing programs as well as appropriating funds. Mr. SCHNEEBELI. Thank you very much.

The committee stands adjourned until 10 a.m. tomorrow morning. [Whereupon, 3: 10 p.m., the committee was recessed, to be reconvened at 10 a.m., Thursday, March 15, 1973.]

OVING CONGRESSIONAL BUDGET CONTROL

THURSDAY, MARCH 15, 1973

U.S. CONGRESS,

JOINT STUDY COMMITTEE ON BUDGET CONTROL,

Washington, D.C.

int Committee met, pursuant to notice, at 10:30 a.m., in 9, the Rayburn Building, Hon. Jamie L. Whitten, presiding. t: Representative Whitten, Davis, James Broyhill, and Burke. han WHITTEN. The committee will come to order.

ve with us, first, Profs. David J. and Attiat Ott, Clark UniWe are glad to have you with us.

ENT OF PROFS. DAVID J. AND ATTIAT F. OTT, CLARK UNIVERSITY

DAVID OTT. It is a pleasure to have the opportunity to appear ou today to discuss measures to improve congressional conthe budget. Whatever one's position may be with regard to all fiscal posture and priorities reflected in the President's for 1974, we can all agree that the creation of this comas been one positive result of the "battle of the budget." For time in almost 25 years, a serious effort is underway to - congressional budgetmaking. Let us hope the result will at tch the strides made in the executive branch in preparation mission of the budget.

have undoubtedly received many proposals for detailed strucform of congressional budget decisionmaking. Senator Proxà a "town hall" meeting last week at the American Enterprise e, ticked off several specific proposals, including: (1) an congressional ceiling on outlays; (2) a ceiling on outlays by nal category; and (3) inclusion of so-called "tax expenditures budget.

he same session your cochairman, Congressman Ullman, disthe possibility of separate Committees on the Budget in each -with a joint staff-which would initiate action early in each on a congressional resolution on total outlays and total budget ity as well as outlays and authority by major programs. The ion would then serve as the benchmark for Appropriations nmittee actions and as the basis for floor debate in each House. otless you will receive many more suggestions for structural of budget decisionmaking in the Congress. We shall not atto add further to your list of possible new committees and subttees and the rules by which they might play the "budget game."

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