ability to pay. If our collection actions are unsuccessful, we may report the debts to the Department of Justice for suit, if warranted, together with our certification of the amount due the United States and such information and documents as may be necessary to support court proceedings.

On July 1, 1962, we had on hand in our Claims Division 43,773 claims by the United States. During the period July 1, 1962, through June 30, 1963, we received 41,164 claims and settled 47,703, leaving a balance of 37,234 claims on hand June 30, 1963. Of the 37,234 claims on hand, 16,937 were under collection representing accounts receivable in the amount of $7,161,929. Incident to our adjudication and collection activities during the fiscal year, we collected $4,528,372. During that period we reported 3,631 claims to the Department of Justice for suit, and as of June 30, 1963, 9,084 of the claims pending with that Department were under collection, representing accounts receivable in the amount of $5,150,596.

AUDIT OF TRANSPORTATION PAYMENTS

The General Accounting Office is responsible for determining the correctness of charges paid for freight and passenger transportation services furnished for the account of the United States, for the recovery of overcharges, and for the settlement of transportation claims both by and against the Government. Further, as a part of its basic audit and investigative functions, the Office is responsible for the review and evaluation of traffic management activities of Government agencies.

The Transportation Act of 1940 requires the administrative agencies to pay carriers' transportation bills upon presentation prior to audit by the General Accounting Office. Certifying and disbursing officers are exempted from liability for any overcharges by carriers arising from improper rates or classifications. Under these provisions, our Office receives the paid bills on a Government-wide basis, makes a central postaudit, determines overcharges, and recovers the overcharges from the carriers.

During the year, we issued 77,833 notices of overcharge to commercial carriers requesting refunds totaling $13.1 million.

Collections from carriers during the year amounted to $16 million.

Current transportation payments are now being audited and initial notices of overcharge stated generally within 6 months following the date of payment. After the initial notices of overcharge are transmitted, consideration of carriers' protests and the actual collection of amounts found due may require several additional months.

In fiscal year 1963, we received 23,827 transportation claims for settlement. In the same period we settled 35,237 claims from carriers totaling $13,013,942, for $6,774,930. For the most part, such claims represent supplemental billings for amounts carriers consider properly due or reclaim of certain amounts collected in our audit. In addition to these direct settlements, we furnished technical advice and assistance to the Department of Justice in 44 legal actions involving claims against the Government for $5 million which were settled for $2.4 million, or $2.6 million less than claimed.

We continued to assist the various departments and agencies of the Government in traffic management and transportation matters. This assistance is discussed under the applicable chapter headings.

As in previous years, considerable effort was devoted to resolving mutual problems with carriers. In addition to frequent discussions in Washington with carrier and industry association representatives, we participated in eight air, rail, and motor carrier association meetings away from Washington. During the year we surveyed and authorized for disposal 5.9 million transportation vouchers of an estimated 10.3 million available for disposal up to June 30, 1963. The survey of vouchers to permit their disposal at the end of the legal retention period is a continuing program. In order to accelerate our voucher disposal program, we requested and received congressional approval of a 10-year program for disposal of accounts previously subject to a 12-year program and authority to initiate a 4-year program for accounts paid after August 1958 which are subject to the 3-year statute of limitations in Public Law 85-762.

LEGAL WORK

Making decisions on the legality of expenditures of public funds is the primary legal work of the General Accounting Office. The Comptroller General is required by law to make decisions in advance of the expenditure of public funds upon the request of disbursing officers, certifying officers, or the head of any department or independent establishment. Necessity for legal decisions may also arise from the audit of the activities and financial transactions of Government departments and agencies and from other work of the Office. Decisions are also made to contracting officers and to contractors doing business with the Government, and to individuals and firms requesting review of claims and debt actions. Under the law, these decisions are final and binding upon the executive branch of the Government.

Decisions may be made on questions presented by any branch of the Government or any department or agency and cover nearly every field of law. The questions may include the construction of Government contracts and agreements of every kind, the interpretation of statutes as well as the administrative regulations governing agency activities, and the examination and construction of organic acts, prohibitory statutes, appropriation acts, treaties, and State and foreign law.

Comments on this work are contained in Chapter Twelve of this report.

RECRUITING AND STAFF DEVELOPMENT

We continued to devote considerable effort during the year to recruiting and developing our professional staff of attorneys, accountants, auditors, and investigators. Details on some of these programs and on other activities in the personnel field are given in Chapter Thirteen of this report.

CHAPTER TWO

Assistance to the Congress

A principal purpose of the General Accounting Office is to serve the Congress and its committees.

The Office was established in the legislative branch of the Government to provide an independent, nonpolitical source of assistance to the Congress. This assistance is furnished through reports to the Congress of our reviews and audits of agency operations; through special surveys and investigations conducted at the request of committees; through direct staff assistance to committees and Members; and through the submission of reports on legislative bills under consideration by the Congress. Arrangements for rendering appropriate assistance, for the coordination of our work programs with the needs of the committees, and for cooperation with committees and their staffs and individual Members are carried out by our Office of Legislative Liaison whose small staff devotes full time to this responsibility.

One hundred and ninety-six accounting, auditing, and investigative reports concerning the operations of the executive departments and agencies were submitted to the Congress during the fiscal year 1963. Copies of these reports were furnished to all committees having a responsibility over the subject matter and to individual Members of the Congress when the report dealt with matters within their districts or we were otherwise aware of their interest in the subject. In addition, we furnished 141 reports of our findings resulting from audits or investigations made at the request of committees or Members, and 644 reports to committees on legislative proposals being considered by them. We also furnished 424 advisory opinions on legal questions submitted by committees and individual Members.

Our reports are on numerous occasions the subject of discussion in the Congress. In connection with one such report, a Member of the House of Representatives stated on the floor of the House:

*** I would like to compliment the Comptroller General and the General Accounting Office for the quality of their audit report on the financial statements of the Bonneville Power Administration for fiscal year 1962. I have been reading these GAO audit reports for several years now and I think that in general they are outstanding. *** The suggestions from the Comptroller General and his staff for improving Government and very often for saving money are usually well founded and excellent. * *

Similarly the chairman of the House Committee on Veterans' Affairs commented on a special review, conducted at the request of that committee, of the feasibility and desirability of merging insurance offices of the Veterans Administration. Our report to the committee was printed as House Committee Print No. 257, November 9, 1962. In that document the chairman pointed up the committee's interest in the study and said:

*** It was made quite clear to the General Accounting Office that the committee was interested in receiving a full and complete report with all of the facts available presented for the consideration of the committee. In other words, the instructions were to give us the facts and let the "chips fall" where they will. It seems to me that the General Accounting Office has admirably fulfilled the request of the committee and we are again indebted to that arm of the legislative branch for this study.

As a result of this study and the committee's interest, the Veterans Administration effected a consolidation of the insurance offices which it is anticipated will result in savings of almost $1 million annually.

Supplementing our regular legal, audit, accounting, and investigative work, our technical representatives are on continual call to further assist the committees of the Congress. The nature of the work of the General Accounting Office requires that our staff be thoroughly familiar with the fiscal and management problems of all Government departments and agencies. Thus, we can contribute meaningful assistance in the consideration of legislation pending with the committees and affecting the operations of the departments and agencies. Over and above the day-to-day contacts by staff members of congressional committees with our staff, our representatives appeared and testified before congressional committees on 26 occasions during the fiscal year ending June 30, 1963. Also, to assist in the work necessary to appropriately follow up on the information