Mr. MATCHETT. Yes, sir. Representative WOLVERTON. Beyond what you have referred to here before you could make it balance? Mr. MATCHETT. That is true. Representative WOLVERTON. Now, turn to report of the T. V. A. to Congress. Mr. BIDDLE. Before you finish with this, may I ask some questions on these particular items? with Representative WOLVERTON. I don't want to interfere, Mr. Biddle, any questioning at any time. However, I will state to you what I have in mind, and you can see whether it will fit in better now or wait until I ask this further question. Mr. BIDDLE. All right. Representative WOLVERTON. I have already shown what it was in the general auditing account with respect to the total assets, and then I have shown what T. V. A. reported it to be to Congress. Now, I wanted to show that in 1935 when the T. V. A. submitted its report to Congress and gave the figures for 1934 as a basis of comparison, it did not even use the same figures then as it had previously used in its report of 1934. QUESTION OF UNDISTRIBUTED DISBURSEMENTS Mr. BIDDLE. Before you get to that there are some items on the exhibits that have just been referred to which I would like to ask about, because I am not very clear on them. I notice in deferred charges, which is part of the total I presume, is it not? Mr. MATCHETT. Yes. Mr. BIDDLE. An item of undistributed C. W. A. disbursements. Was that item taken from balance sheet or operating accounts of the T. V. A.? Mr. MATCHETT. Taken from the records of the treasurer of the T. V. A. Mr. BIDDLE. Was it carried on their books as an item? Mr. MATCHETT. In the records of the treasurer of the Tennessee Valley Authority, yes. Mr. BIDDLE. What record? Is it taken from the balance sheet, operating statement, or what book of entry is it taken from? Mr. MATCHETT. The treasurer maintains a set of records entirely separate from that of the Tennessee Valley Authority. Mr. BIDDLE. Of the treasurer of whom? Mr. MATCHETT. The treasurer of the Tennessee Valley Authority. Mr. BIDDLE. How is it carried? Is it carried as an asset on one of his books? Mr. MATCHETT. It is carried as a cash receipt, and a record of the disbursement shown. Mr. BIDDLE. Is it carried as an asset? Mr. MATCHETT. The treasurer does not maintain, or did not maintain, her records in the manner that the other records of the Tennessee Valley Authority are shown. Mr. BIDDLE. Was it carried in any way as an asset on the books of the T. V. A.? Mr. MATCHETT. Is it now or was it then? Mr. BIDDLE. No; was it then? Mr. MATCHETT. I am unable to answer your question. Mr. Biddle. You don't know that. Mr. MATCHETT. No. Mr. BIDDLE. Now, let me ask you this. Would that also apply to undistributed disbursements by E. H. F. A. for T. V. A. item 43,828. Mr. MATCHETT. That amount was carried on the books of the corporation under another classification in a larger amount, and after determining the amount of the disbursement, they were distributed and brought down to that reduced balance. Mr. BIDDLE. That was not carried as an asset of T. V. A., was it? Mr. MATCHETT. As an advance, if I remember correctly, as an advance to E. H. F. A. Mr. BIDDLE. Not as an asset then? Mr. MATCHETT. As an asset. Mr. BIDDLE. T. V. A. carried it as an asset on its books? Mr. MATCHETT. I am reasonably sure of that. Mr. BIDDLE. Did T. V. A. have a balance sheet for that year? Mr. MATCHETT. A balance sheet in the accepted form, no. Mr. BIDDLE. I didn't say in the accepted form. Did they have what they called a balance sheet? Mr. MATCHETT. What they called a balance sheet; yes. Mr. BIDDLE. What they called a balance sheet? Mr. MATCHETT. Yes. Mr. BIDDLE. You do not indicate, do you, that the figures in the annual report-I don't know whether they are or not-are different from the figures shown on the T. V. A. balance sheet or on their operating statements? Mr. MATCHETT. Yes; there is quite a difference. Mr. BIDDLE. What are the differences? Mr. MATCHETT. In classifying a good many of the items? Mr. BIDDLE. Oh, in classification, certainly. Mr. MATCHETT. In calling them what they are. Mr. BIDDLE. I understand that, but I am talking about the figures. Mr. MATCHETT. I don't suppose there are more than about 1,000 differences, but we can give them to you. We reconciled this statement with the Tennessee Valley Authority statement; we have that information. Mr. BIDDLE. You mean this balance sheet has been reconciled with what you refer to as their calling a "balance sheet" of the T. V. A.? Mr. MATCHETT. What their books showed on June 30. Mr. BIDDLE. You don't answer the question exactly. Is this balance sheet reconciled with what you term the T. V. A. balance sheet? Mr. OWEN. Yes, it is. Mr. BIDDLE. It was reconciled with it? Mr. MATCHETT. Yes. Mr. OWEN. And we have the reconciliation. Mr. BIDDLE. All right. One more question. Do you in making your reports strike balance sheets and operating statements of departments of the Government, such as the Depart ment of Agriculture, do you have operating statements and balance sheets, and so forth, and call them balance sheets? Mr. TULLOSS. No, sir. Mr. BIDDLE. You do not. Mr. TULLOSS. No, sir. Mr. BIDDLE. Any of those departments which might not be called departments, not engaged in proprietary business? Mr. TULLOSs. I think that is true. Mr. BIDDLE. And you strike a balance sheet and operating statement for T. V. A. because they do have revenues as well as disbursements-would that be correctly stated? Mr. TULLOSS. No; as I recall, someone expressed a desire to have a balance sheet in this case. Mr. BIDDLE. Someone from T. V. A.? Mr. TULLOSS. I imagine so, but I don't know. Mr. BIDDLE. But I understand-I want to be perfectly clearthat you never strike balance sheets or operating statements for those departments of the Government which do not enjoy substantial revenue, but in this case, as someone expressed a desire for it, you have done so, and intend to do so in your future reports? Mr. TULLOSS. And we have done so in other cases. Mr. BIDDLE. And have done so in other cases? Mr. TULLOSs. Yes. Mr. BIDDLE. Where revenues were enjoyed. I don't suppose there would be a balance sheet without revenues, would there? Mr. TULLOSS. I think they all have revenues of some kind. Mr. TULLOSs. Yes. Mr. BIDDLE. You do not distinguish in this balance sheet and operating statement those portions of T. V. A., such as its power program, and to a certain, though very much less, extent the fertilizer industry, you don't segregate those and strike a balance sheet or operating statement with respect to those operations, but you strike the balance sheet and operating statements for the entire system. Mr. MATCHETT. I can give you that information. Mr. BIDDLE. No, I didn't ask you that. I asked if you did it in striking your balance sheet. Mr. MATCHETT. That was necessary before we could arrive at a consolidated balance sheet. Mr. BIDDLE. Of course, but I simply asked you whether you did differentiate. I understand your answer is "No," you lump it together in one consolidated balance sheet. Mr. MATCHETT. Yes. Mr. BIDDLE. Perfectly. Mr. MATCHETT. With that explanation. Mr. BIDDLE. In other words you include disbursements for matters which have nothing to do with revenue-producing activities in your general balance sheet and operating statement? Mr. MATCHETT. Yes. Mr. BIDDLE. I just want to know the method of your doing it. DIFFERENCE IN 1934 AND 1935 REPORT Representative WOLVERTON. Now, will you look at the report of the T. V. A. to Congress for 1935, at page 63, and see what the T. V. A. reported there as having been the total assets in 1934? We have just had from the 1934 report that it was $13,714,416.29. Mr. TULLOSS. For 1934, they show $51,389,814.87. Representative WOLVERTON. That is approximately $37,000,000 more than they showed the assets to Congress to be when they submitted their 1934 statement? Mr. TULLOSS. Yes, sir. Representative WOLVERTON. Now, what makes that difference? Mr. TULLOSS. The principal item, as I understand the difference, is appropriations not advanced, $37,724,083.36. Representative WOLVERTON. So that in the 1934 report they did not carry that amount or give any notice to Congress that they had that unexpended balance, but after that deficiency bill was passed for that year it gave them a further appropriation, and then they did let Congress know in 1935 that they had that $37,000,000 the previous year when they were asking for a further appropriation. Mr. TULLOSs. Yes, sir. Representative BARDEN. I believe the witness stated that he did not know whether or not they had presented these facts at the hearing before the Appropriations Committee? Mr. TULLOSS. Yes. Representative BARDEN. So that in answering that question you have to qualify it to the extent of saying that so far as you know. Mr. TULLOSS. I understood the question to be addressed to this report, that it was here disclosed, and I may have misunderstood the question. I meant to indicate that the amount was shown in the report for this year as distinguished from last year's report. I didn't mean to say that this report itself came to the attention of the Appropriations Committee. Representative WOLVERTON. Now, if we use that unexpended, or that appropriation of $37,000,000 plus, if you use the figures of the 1934 report as against the figures of 1935, even that doesn't make the account balance. Do you know in what particulars there could have been any adjustments made, submitted to Congress in 1935 as assets in 1934 that were not given to Congress in the 1934 report? Mr. MATCHETT. There is always a certain amount of adjustments being made on the books of the Tennessee Valley Authority. Representative WOLVERTON. I can see that. Mr. MATCHETT. And that accounts for the differences. Representative WOLVERTON. What I am trying to find out is if they ever do have a true balance. Mr. MATCHETT. Considering the magnitude, it is going to be difficult to ever arrive at a definite figure and stick to it. AMOUNT OF DEPRECIATION CHARGED Representative WOLVERTON. I am afraid so. Now, in the statement that you have in your General Accounting report there, at page 39, did the Tennessee Valley charge depreciation in any amount? Mr. MATCHETT. It did. Representative WOLVERTON. How much? Mr. MATCHETT. Approximately $317,000 to be exact $317,628.13. Representative WOLVERTON. Do you know how much, or how that depreciation was allocated? Mr. MATCHETT. I do. Representative WOLVERTON. Would you give us that, please? Mr. MATCHETT. $62,618.74 was allocated to power operations, $35,393.01 to operations of other activities (commissaries, grocery stores, and dormitories and so forth) and $199,616.38 was assigned to various construction activities. Now, this figure here may include one or two adjustments by our office, but if so they are small in amount. QUESTION OF FIXED ASSETS Representative WOLVERTON. Now, let us turn to fixed assets, here on page 39 of the General Accounting Office report for 1934. What is the total of the fixed assets as appears on that report. Mr. MATCHETT. $60,311,589.90. Representative WOLVERTON. Will you look at the T. V. A. report to Congress for 1934, at page 56, and tell me what they reported to Congress as the total of fixed assets. Mr. MATCHETT. $11,293,698.07. Representative WOLVERTON. Will you look at the T. V. A. report to Congress for 1935, at page 63, and tell me what figures were given to Congress for fixed assets of 1934? Mr. MATCHETT. I don't see a total here for total fixed assets, although such is implied here. Representative WOLVERTON. The figure I had figured out last night was $11,987,533.12, is that right? Mr. MATCHETT. That is the figure that is shown here as the total of net investment in programs. Representative WOLVERTON. Is what? Mr. MATCHETT. The figure you called, $11,987,533.13 for the fiscal year 1934. Representative WOLVERTON. Do you know of any explanation that can be made that would explain why on your account, or your report under fixed assets, you report $60,000,000 plus, and the T. V. A. to Congress only reports $11,283,000 plus, in 1934, but in 1935 reported that in 1934 it should have been $11,987,000, a difference of nearly $700,000 from their own figures the year before, as given to Congresst Mr. TULLOSS. The principal difference between our report and tha? of the T. V. A. for 1934, is the item of almost $51,000,000 on acquired plant and other property. Representative WOLVERTON. Even if you use that $51,000,000, it still doesn't balance. Mr. TULLOSS. No, sir. I am unable to explain why that difference occurs. TOTAL AMOUNT OF INVENTORIES Representative WOLVERTON. Now, will you look to the heading of "inventories," in your general accounting report of 1934, at page 39, and what did you find to be the total amount of the inventories? Mr. TULLOSs. $1,300,763.23. Representative WOLVERTON. Did you make that up from the books of the T. V. A.? Mr. TULLOSS. Yes, sir. |