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materials available to them in the stockpile and would enable them to use this excess material.

In July 1961 we reported to the Administrator on the costs incurred by the Government in the storage of stockpiled extralong staple cotton. Afterward, legislation was enacted which required the transfer of this cotton to the Department of Agriculture to facilitate its sale and disposal.

As part of our review of disposals by the GSA and the use of excess strategic and critical materials by Government agencies, we noted that the Bureau of the Mint had purchased from commercial sources metal which was on the list of excess materials. At our suggestion, the Bureau of the Mint later purchased $248,000 worth of excess stockpile copper and nickel from the GSA instead of from commercial sources. The copper and nickel were used for making coins for a foreign government.

We provided information on several occasions to congressional committees, their staffs, and to individual Members of the Congress regarding specific stockpiled materials and the strategic and critical stockpile in general. Our representatives also assisted the Senate Committee on Armed Services, Subcommittee on National Stockpile and Naval Petroleum Reserves, to develop data for the hearings on its inquiry into the strategic and critical material stockpile.

At the close of the fiscal year, we had in process a report on our review of certain aspects of the program for the storage of stockpiled manganese ore.

In November 1961 and March 1962, respectively, we submitted our final audit reports to the Congress on the abaca fiber program and the Federal Facilities Corporation. We expressed our opinion that the financial statements of the abaca fiber program presented fairly its financial position at June 30, 1961. This program was ordered by the Office of Civil and Defense Mobilization to be discontinued in July 1958 and all major assets had been disposed of by June 30, 1960. The fiscal year 1961 activities consisted only of relatively minor liquidation actions. The report on the Federal Facilities Corporation included the 3-month period ended September 30, 1961, at which time the Corporation was dissolved and its remaining activities, records, assets, and liabilities transferred to the GSA as provided in

Public Law 87-190, approved August 30, 1961. We expressed the opinion that the financial statements presented fairly the financial position of the Corporation at June 30, 1961, and at September 30, 1961, and the results of its operations for the fiscal year 1961 and for the 3-month period ended September 30, 1961.

FEDERAL SUPPLY SERVICE

During the year we completed in the Federal Supply Service a review of the award and administration of Federal Supply Schedule contracts for the rental of electronic data processing equipment, and a review of the planning for and use of electronic equipment at selected GSA regional offices. We made an examination of the financial statements and accounts of the General Supply Fund for the fiscal year 1961 and undertook reviews of GSA's activities relating to (1) direct deliveries of store stock items from suppliers to using agencies and related use of lower transportation rates under section 22 of the Interstate Commerce Act, and (2) the development and use of Federal specifications and standards for stock items. Our work was done at the GSA central office and at eight GSA regional offices. In our review of the development and use of Federal specifications and standards, we also visited installations of other Federal agencies.

At the requests of Members of the Congress, we furnished information about the reporting of identical bids on Government procurements, the procurement of sponges and lumber, and the disposal of surplus personal property. Also, at GSA's request, we commented on certain proposed changes in Federal Procurement Regulations and GSA's regulations dealing with supplies and contracts.

In June 1962 we submitted a report to the Congress on our review of selected aspects of awards of Federal Supply Schedule contracts for the rental of electronic data processing equipment and the administration of these contracts by selected Federal agencies using the rented equipment. Our review brought out several points requiring GSA's and the user agencies'

attention.

1. The GSA did not tell the user agencies of changes in the annual contracts and the nature of rental adjustments which needed to be made because of the changes. After we found that rental adjustments had not been made at a number of civil and defense installations visited by us, the responsible agencies recovered, or instituted action to recover, rental fees totaling $122,000. Also, the GSA informed us of certain specific actions which would be taken to tell user agencies of any significant contract changes made from year to year.

2. The Federal Supply Service frequently awarded the rental contracts several months after the expiration of the previous year's contracts and made the terms of the new contracts retroactive to cover the expired period. These time lapses caused certain administrative problems, particularly in maintaining machine usage records, and gave rise to unnecessary expense for the GSA and the user agencies. We proposed to the GSA that consideration be given to awarding the contracts at an earlier date or extending the terms of the former contracts until the new contracts could be awarded. The GSA stated that every effort would be made to carry out our proposal.

3. We noted varying interpretations by agency officials and manufacturers' representatives as to the meaning and application of certain contract terms. We believed that clarification of these terms would bring about a better and more uniform understanding of the terms, with possible resulting savings to the Government. The GSA later stated that action had been taken to clarify the terms and that instructions would be issued (a) to using agencies to contact Government rather than contractor sources when clarification of a contract term was needed and (b) to contractors to obtain GSA approval of clarifications issued to contractors' field employees.

We submitted reports to the Congress on our audit of the General Supply Fund for the fiscal years 1960 and 1961. These reports covered our review of selected operations and our examination of the financial statements of the Fund and summarized the more significant items previously reported to the GSA officials. We commented on certain practices which unnecessarily increased the cost of procurement, the need to improve certain bid solicitation and evaluation practices used by the GSA, and

noncompliance by some regional offices with prescribed procedures for administering procurement contracts. We made several recommendations intended to increase the effectiveness of and to provide more economy in supply operations.

In a report to the Congress in February 1962 on the procurement and storage of general-use hand tools for the Air Force, we commented on the substantial overstock of hand tools in the GSA stores depots and the need to adjust procurement to realistic requirements so that overstocking would be avoided under future procurement programs.

UTILIZATION AND DISPOSAL SERVICE

During the year, we reviewed policies and procedures in the Utilization and Disposal Service relating to the use of excess and the disposal of surplus personal property, and the usage and disposal activities of other Federal agencies. Our work was done at the GSA central office, 5 GSA regional offices, and 37 selected offices and installations of other Government agencies. We issued nine reports to officials of other Government installations commenting on their failure to follow GSA regulations for the reporting and use of excess and the disposal of surplus personal property. Information about surplus real property to be disposed of through legislative action for such use as educational, recreational, or historical purposes was furnished to several Members of the Congress.

NATIONAL ARCHIVES AND RECORDS SERVICE

At the close of the fiscal year, reports were in process on our reviews of certain records management activities of the National Archives and Records Service and of selected operating activities of Federal Records Centers.

GOVERNMENT PRINTING OFFICE

In April 1962 we submitted a report to the Congress on our audit of the Government Printing Office for the fiscal year 1961. This audit pertained primarily to accounting and financial aspects.

During our audit we noted that the setting up of an optimum break-even point, that is, the maximum volume of work that can be effectively processed through the Government Printing Office plants at the lowest possible cost would be a valuable aid in controlling costs, volume, and rates. Accordingly, we suggested in our report that an optimum break-even point for printing and binding operations be established and used as an aid in setting rates at a level consistent with providing service as economically as possible. The Public Printer expressed agreement with our suggestion and told us that a break-even point would be used to the extent that it may be helpful to the overall objectives of the Government Printing Office.

In our audit we found that the Government Printing Office had set up adequate financial controls over its bookstore operations. We recommended this improvement in a previous report. Also, we were told by the Public Printer that a study was being made, as we had recommended, to determine the desirability of integrating the three accounting systems of the Government Printing Office.

Our report contained comments on a situation occurring during the fiscal year 1961 which was not expressly covered by existing law. Because of this situation the Government Printing Office was operated for a brief period of time without a Public Printer or an acting Public Printer. We suggested that the Congress may wish to consider amending the present law to provide for additional designated persons to act as Public

Printer.

HOUSING AND HOME FINANCE AGENCY

During the fiscal year 1962, we did audit work at the central offices and at selected field offices of the Housing and Home Finance Agency (HHFA) and its constituent agencies— the Office of the Administrator, which includes the Urban Renewal Administration and the Community Facilities Administration; the Federal Housing Administration; the Public Housing Administration; and the Federal National Mortgage Association. We submitted 9 reports to the Congress, 4 of which

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