REASONS FOR CONSOLIDATING APPROPRIATIONS Mr. GARY. What is the reason for transferring and consolidating those items into one item under "Operating expenses"? Admiral O'NEILL. I would like Captain Richmond to answer that question, Mr. Chairman. Captain RICHMOND. First, sir, the four appropriations have been consolidated for general administrative advantages, both from the accounting standpoint and also in accordance with the attempt to show a performance budget, so that Congress will get a better evaluation of the cost of the activities. That is set forth in the justification. Now, as far as the increases themselves are concerned, the $15,000,000, in the first place. I would like to point out that a sizable proportion of that amount is for the pay increases brought about through three acts, the Career Compensation Act, Public Law 351; another act which permitted the former employees of the Bureau of Inspection and Navigation to count their time for longevity, their civilian time for longevity, and the civilian pay increase, whch was Puble Law 429. Mr. GARY. How much of it? What is the figure? Captain RICHMOND. The total of that is $11,236,000, for 1951, of which $145,000 is for Public Law 308, $10,841,000 for the Military Career Compensation Act, and $250,000 for civilian increases. The balance of the increase, $5,541,813, represents additional personnel mainly for accounting and supply purposes, already referred to, for the aviation program that was brought about through the requests for additional planes, and funds for deferred maintenance of the facilities of the Coast Guard, which we have, in accordance with Ebasco recommendation, been attempting to bring up to a proper standard of maintenance. Mr. GARY. Does this appropriation include your military personnel? Captain RICHMOND. Yes, sir. Mr. GARY. Now, what increase are you asking for in military personnel? INCREASE IN MILITARY PERSONNEL Captain RICHMOND. 250 enlisted men. Mr. GARY. And what is the purpose of that increase? Captain RICHMOND. For the aviation program. In other words, for the additional planes referred to, we are going to need additional personnel to operate and maintain those planes. Mr. GARY. Now, you have a table on page 261 of the justifications which has been inserted in the record. Apparently that is the dollar figure for the table on page 260. Is that correct? Captain RICHMOND. The dollar figure for what, did you say, sir? Mr. GARY. The table preceding it giving the number of items. Commander ARRINGTON. Yes, sir; that is correct. Mr. GARY. That is the dollar figure? Commander ARRINGTON. Yes, sir. Mr. GARY. Now, you have the table on page 260 in the committee print? Commander ARRINGTON. Yes, sir. Mr. GARY. But the table on page 261, is not? Commander ARRINGTON. No, sir; it is not in the committee print. Mr. GARY. The same is true on pages 265 and 266? Commander ARRINGTON. Mr. Chairman, could I call your attention to the fact that those tables, which are the costs of respective functions do not include the cost of pay increases, which are shown over on page 280 of the justifications. Page 280 will have to be added to give a complete picture. Mr. GARY. I had that marked, here. It was the next table. Then we will insert at this point the table appearing on page 280 of the justifications. (The table referred to follows:) Budget estimate for 1951_ Authorized pay increases The cost in 1951 of pay increases authorized by legislation enacted during 1950 totals $11,236,000, and is analyzed as follows: Public Law 308, approved Sept. 27, 1949, which permitted personnel of the former Bureau of Marine Inspection and Navigation to include civilian service in computing longevity pay as military personnel. Public Law 351, approved Oct. 12, 1949, entitled "Career Com- Public Law 429, approved Oct. 28, 1949, entitled "Classification Total cost of pay increases- $11, 236, 000 145, 000 10, 841, 000 250,000 11, 236, 000 Mr. JOHNSON. Page 281, Mr. Chairman, analyzes it between military and civilian. Mr. GARY. Yes; I think we ought to put in 281 also. (The material referred to follows:) The following is an objective classification analysis of the 1951 costs of the pay increases: Personal services: Military : Public Law 308. Public Law 351. Civilian: Public Law 429_ Subtotal Travel: Public Law 351_ Pensions, annuities, and insurance losses: (death gratuities) Public Law 351. Total cost of pay increases_ $145,000 8, 606, 762 250,000 9, 001, 762 2,220, 238 14,000 11, 236, 000 TOTAL NUMBER OF PERSONNEL Mr. GARY. Last year we had in the record a complete table as to military personnel. We would like a similar table this year. Captain RICHMOND. I think that is the table you mean [handing]. Mr. JOHNSON. Pages 313 and 314 give it a little differently in summary. You might like to look at that. It is summarized there, and I thought you might be interested in that one, too. Mr. GARY. At this point, then, we will insert the tables appearing on pages 313 and 314 of the justifications and also the table "Comparative schedule of active military personnel, United States Coast Guard." (The material referred to follows:) Comparative schedule of active military personnel, U. S. Coast Guard 1 Commissioned officer regular numbers are as authorized by sec. 1, act of July 23, 1947, Public Law 219. 2 Extra numbers (former Bureau of Marine Inspection and Navigation and former Lighthouse Service personnel) are as authorized by sec. 8, act of July 23, 1947, Public Law 219, and by 14 U. S. C. 10g. Mr. GARY. Under this title of "Operating expenses," you have the personnel for your Air Force, but the acquisitions are in a separate appropriation? Captain RICHMOND. That is correct, sir. Mr. GARY. And the additional military personnel that you are requesting consists entirely of the additions which you contemplate for your Air Force? Captain RICHMOND. That is right. Mr. FERNANDEZ. Under this item of operating expenses, you are asking for $137,850,000; and I understood a while ago that the comparable figure for last year was $122,000,000-plus. I must have misunderstood that, because the table shown at page 97 of the committee print shows $130,051,500. Captain RICHMOND. The $130,000,000 will include the pay increases for the current year, sir. Mr. GARY. Without the pay increases it was how much? Captain RICHMOND. Without the pay increases the amount was the $122,000,000 referred to before. But the required pay increases for this year bring it up. Mr. FERNANDEZ. Yes. My attention has been called to page 254 of the justifications, which explains the situation. Thank you very much. That is all. LANGUAGE CHANGES Mr. GARY. Admiral, I notice you have some language changes in connection with the operation of the department. Would you mind explaining those at the present time? Admiral O'NEILL. Captain Richmond will discuss that. Captain RICHMOND. Sir, the language, of course, is entirely new for the new appropriation for operating expenses. The new language is designed for simplification because of doing away with the four separate appropriations. We have been able to eliminate some provisions that were formerly to specify what particular types of expenditures were included within those individual appropriations. Other deletions have been brought about through the fact that the matter is covered in the basic law. We no longer have to have specific authority set out in language in the appropriating act. Reference to the particular statutory section is sufficient. Finally, there is one major change, which you probably might say is really the only new major provision. It will put the previous appropriations into one account. With respect to this and the advantages of such a change, I think that Mr. Gary will be able to explain it better than I can. to it this morning in his statement on the accounting. He referred So I would now like to turn it over to Mr. Gary to explain the advantages to be obtained through this change. Mr. T. JACK GARY, JR. This change has to do with the latter part of the section, starting with Provided further, That (a) the unobligated balance of appropriations of the Coast Guard for the fiscal year 1949 and 1950 for "Salaries, Office of the Commandant", "Pay and allowances", "General expenses", and "Civilian employees" shall be transferred on July 1, 1950, to the account established by the Surplus Fund-Certified Claims Act of 1949 for payment of certain claims; (b) amounts equal to the unliquidated obligations against such prior year appropriations on July 1, 1950, shall be transferred to and merged with this appropriation, and such merged appropriation shall be available as one fund, except for accounting purposes of the Coast Guard for the payment of obligations properly incurred against such prior year appropriation and against this appropriation, but on July 1, 1951, there shall be transferred from such merged appropriation to the appropriation for payment of certified claims (1) any remaining unexpended balance of the 1949 appropriation so transferred, and (2) any remaining unexpended balance of the 1950 appropriation so transferred which is in excess of the obligations then remaining unliquidated against such appropriation. The reason for this change is that in our cost accounting and accounting for the operations of the various activities of the Coast Guard and facilities we would use the accrual basis of accounting. For appropriation purposes it is necessary to use the obligation basis of accounting, which means that each time you issue a purchase order or have legally committed yourself for an expenditure you charge it against the proper appropriation, so that you make sure that you will only commit additional funds for the amount that is left. What happens under the present language is that when you have an appropriation for a fiscal year at the end of the fiscal year there are always unliquidated obligations—that is, those purchase orders which have been placed, but for which the goods have not been delivered. Although they would be obligations of the year in which the appropriation was made, they would actually become cost on an accrual basis in the following fiscal year. That would mean that if we are dealing with three fiscal-year appropriation accounts and trying to tie them into our costs, we would have to keep our costs on the basis of not only showing total costs for the |