they might be sound, I still feel that Congress would rather maintain an independent agency with its own authority to audit the accounts of the administration.

The CHAIRMAN. We have another witness.

Mr. ANDREWs. We want you to maintain an independent agency to audit the administration. My goodness, don't get the idea that we have any notion that you should not do that.

Senator MUNDT. That is why I was probing into the background of why the Hoover Commission disagreed with you. You said somebody you didn't want to name and I do not want to hear you name him-said, "We oppose your task force recommendation because we lack confidence in the administration." So, it occurs to me somehow or other in your proposal you must be taking something away from the arm of Congress, the Comptroller General's office, and delegating it to the administration, which gave rise to that statement.

Mr. ANDREWs. No. Insofar as our recommendations pertained to the Comptroller General, they were designed to strengthen his position as the independent auditor and investigative officer of the Congress. Senator MUNDT. Did you not say a Hoover Commission member told you the reason that he gave, your version was that they lacked confidence in the administration?

Mr. ANDREWs. That's right.

Senator MUNDT. Then it is true in fact that your recommendation to the Hoover Commission was to the effect that there would be certain increases in authority and control over accounting and finance to be given to the administration which it does not now have, is that right?

Mr. ANDREWs. Our recommendation to the Hoover Commission was that the executive branch be required by specific legislation to assume the full and undivided responsibility for the Government's accounting. That is where the responsibility for accounting belongs, and that is where it should be put. The House Committee on Expenditures in the Executive Departments declared in the plainest possible terms, after its hearing on the General Accounting Office's first report on RFC, that accounting is a responsibility of management and that an independent auditor-the Comptroller General in that case -should not be either required or permitted to share that responsibility. Incidentally, one of the members of the Hoover Commission who most violently opposed our recommendations was chairman of the House Committee on Expenditures at that time.

Senator MUNDT. You have that in the loyalty issue too, but they do not come around often enough to get results.

Mr. ANDREWs. Of course, Senator, I am perfectly aware

Senator MUNDT. I think you have to face up to realities. If you are providing that the expenditure agencies audit themselves and report to the public on themselves and criticize themselves and then they do not do it, public opinion is a pretty general, ethereal sort of thing, and it is not a very good reed on which to lean when you are trying to avert national insolvency.

Mr. ANDREWS. Senator, I am not proposing that they audit themselves. I have tried to make that perfectly clear. We are proposing that you strengthen the arm

Senator MUNDT. You have not made perfectly clear to me what it was that the Hoover Commission had in mind when they said, no, we cannot follow the task force because the recommendation of the task force tends to decrease the authority of Congress in the picture and increase the authority of the spending branch, the executive branch of the Government. I asked you why they objected to it, why they resisted it, and you said because somebody told you they did not trust the administration.

Mr. ANDREWS. But that is quite a different thing from saying that the Hoover Commission made a report that would decrease the authority of Congress and increase the power of the administration. I do not think that is true at all.

Senator MUNDT. I am trying to find out what it is. You tell me. Mr. ANDREWS. They simply did not go along with our complete idea.

Senator MUNDT. Why?

Mr. ANDREWs. You will have to ask them for the complete answer to that. I only gave you what has come to me.

Senator MUNDT. I asked you why they changed your recommendation and you said it came to you that the Hoover Commission said we cannot accept your task-force recommendation because we lack confidence in the administration.

Mr. ANDREWS. I said one member of the Commission voluntarily made the statement to me that the report that we had rendered was, in his opinion, what should have been done, but that he personally, and I assume from the content of his remarks, others as well, did not believe that the administration could be depended upon to carry out the functions that we say should be imposed upon them.

Senator MUNDT. Stop right there now. What new functions in the field of accounting and spending do you propose to give to the administration that caused this individual to run up the warning light and say "We can't go along?" I am trying to find out.

Mr. ANDREWS. We did not propose giving them any new functions. We merely recommended that the administration be required by law to do, insofar as accounting is concerned, what is inherent in its position as the managers of the Government's fiscal affairs. Our report went on further to deal with the General Accounting Office, and our purpose there and I do want to make this clear to youwas to strengthen the arm of the General Accounting Office and make it the powerful instrument it should be as the independent auditor of Congress, not to give the admnistration power to audit itself. Our proposal was to put the independent auditor of the Congress-the Comptroller General, the Auditor General, or whatever you choose to call him in position to make thoroughly independent audits on such a timely basis and report to the Congress in such a way, that the Congress and the people could see whether and how the administration discharges its responsibility. Beyond that point, there is a question whether you can get compliance, and when there is noncompliance it is a question of what penalties you have in the law for noncompliance. It is a question I think of how much you can organize public opinion so that that opinion will be expressed in the elections from time to time.

Perhaps it might clarify the situation to refer again to Acting Secretary of the Treasury Foley's letter of October 4, 1949, to the chairman of this committee. In that letter Mr. Foley pointed out:

Such (administrative) examinations of accounts and vouchers * * * should be made prior to payment, and the audits, verifications, and examinations by the General Accounting Office should be made after payment.

The emphasis was Mr. Foley's. In this statement of a universally accepted principle, Mr. Foley clearly implied that administrative examinations should be made by the administration. He clearly stated that independent audits should be made by the General Accounting Office. We fully concur with Mr. Foley, and that is precisely what we recommended. Administrative examination of accounts and vouchers is part of the accounting function. The carrying out of that function is, or should be, the responsibility of the administration alone. It is no part, or should not be any part, of the Comptroller General's responsibility. Independent auditing is his responsibility.

Mr. Foley subscribed fully to these views by explaining the statement quoted above as follows:

In other words, the executive branch of the Government should be responsible for pre-audit of disbursement vouchers and pay rolls, and the General Accounting Office, as the independent agency of the Congress, should be responsible for postaudit of accounts and vouchers. These are sound principles of financial management and are also in keeping with the principle of independent audit. [Italics ours.]

Senator MUNDT. I would very much like to see your suggestions in legislative form because I heartily agree with a large part of the objectives you describe. I am disturbed somewhat by the fact that it appeared to at least some members of the Hoover Commission that your suggestion would decrease the authority of the independent agency representing Congress in this field, or else expand the authority of the executive agencies to check their own spending and to audit themselves. I do not think that would be sound accounting practice. I do not think you believe it is. There must be something in the picture indicating that, or I see no reason why a man could say, "Your suggestion is sound from the standpoint of accounting. makes good sense. We would be in favor of it, except we cannot

trust this administration to exercise those new functions.'

Mr. ANDREWS. Not new functions.

Senator MUNDT. I cannot get that.

It

Mr. ANDREWs. Not new functions. I have tried to tell you there is no new function involved. We simply must depend upon the administration to discharge the ordinary normal functions of accounting that any administration, any management, ought to discharge, and get our check on the administration through timely independent auditing by the Comptroller General.

The CHAIRMAN. Would not that part of the authority and responsibility that you would transfer from the present General Accounting Office, the Comptroller General, be a new function for that agency? You say there would be no new function transferred, and yet you would transfer from the General Accounting Office certain responsibilities that the Congress has imposed upon it by law. Is that not correct?

Mr. ANDREWS. Unless I misunderstand you, sir, that does not seem to me to follow. Are you speaking now of the function of designing the systems? Is that what you have in mind?

The CHAIRMAN. Yes, sir. Would not that be a new function or a new responsibility and a transfer of existing responsibility to this new office that you created?

Mr. ANDREWS. No, sir. I don't think you can find any authority in the law for the Comptroller General to design an over-all comprehensive system for the Government as a whole and force anybody to keep it. The giving of that responsibility to the Accountant General would be new in the sense that it has never been done before. But, gentlemen, it is something that should have been done long ago; and we are only asking you to implement the authority of administration by requiring that it be done.

Senator MUNDT. Would not there be two possible ways of achieving that objective, the one which the task force recommended which, as I understand it, as the chairman has just explained, would fix by law the responsibility upon each department to establish an accounting system and to carry out certain functions which you say are not new but which are normally part of any good administrative management set-up? You could do it that way.

Mr. ANDREWS. You haven't quite stated it as we have in mind. You would place the responsibility upon your central accounting officer, call him what you may, Accountant General or whatever be

it may

Senator MUNDT. This is the new job; the new man.

Mr. ANDREWS. And that responsibility would carry with it the authority to see that the departments maintain proper accounts from which an over-all statement of the affairs of the Government could be developed.

Senator MUNDT. Would that new officer, the Accountant General, be higher in rank than the Comptroller General?

Mr. ANDREWs. The question of relative rank isn't involved. The Comptroller General is Congress's arm. He can audit anything he wants. If there is any doubt about that, it should be cleared up. All we ask concerning the rank of the Accountant General is that it be equal to the responsibilities he would have to carry as the chief accounting officer of the biggest and most complex business on earth. Senator MUNDT. Suppose you gave the Comptroller General every power and authority that you now propose to give the Accountant General and that you made the Comptroller General administrative officer of those functions, and under him let him have an Accountant General to handle that particular division of the job, and somebody else handle the auditing, would you not then get exactly the objectives you want and keep all of this under the control of an arm of Congress? Mr. ANDREWS. I would say then that the Comptroller General then would be taking over the administration of a most important part of the management of the Government's affairs. It would combine the legislative and the executive branches as far as accounting is concerned. This would be courting trouble and confusion in my opinion.

Senator MUNDT. Would you expand that a little further? I do not see why.

Mr. ANDREWS. To go back to the question asked me a while ago by Senator McClellan about the Comptroller General, the Auditor General, the independent auditor, whatever you choose to call him, prescribing the accounting systems for the various departments of

the Government and a central accounting system for the Government as a whole. He asked me if that wasn't the same thing as the public accountants now do in auditing the books and putting in systems for their clients. I explained it wasn't and why it wasn't. If you adopt a set-up such as you are talking about-if we were to adopt one in which the accounting officer were put under the independent auditorit would be like making the independent public accountant superior in authority to the accounting officer of every client that he has. That, of course, would be absurd.

Senator MUNDT. In other words, it would be your position that if the Comptroller General, with that new authority, were to recommend an unworkable and inefficient accounting system for some department and had the power to compel them to use it, he could disrupt the whole department.

Mr. ANDREWS. Right. You would be doing then just exactly what you have been objecting to. You would then be making the administrative branch of the Government audit itself. That is precisely what you would be doing.

Senator MUNDT. No.

MR. ANDREWS. If you put the accounting of the Government under the Comptroller General, the independent auditor, then he would be a 100 percent complete auditor of himself.

Senator MUNDT. He would be auditing Government departments. I would give him no additional authority other than he now has, except that when his auditors recommend to the Department of Agriculture certain changes in accounting procedures, certain rearrangements, I would give him some authority to compel a recalcitrant department to comply. They would still keep their accounts and keep their own records and he could send the auditors in to check as he does now.

MR. ANDREWS. But you asked me, Senator, what would be the result of putting this chief accounting officer under the chief independent auditor.

Senator MUNDT. That is correct.

Mr. ANDREWS. That is what you asked me.

Senator MUNDT. That is what I asked you.

Mr. ANDREWS. If you put the chief accounting officer, the man responsible for the account keeping, under the independent auditor, you would make the independent auditor the auditor of himself. I think that follows. It is just plain logic.

Let me give you an illustration from our experience in the Corporation Audits Division. We found an abominable situation in RFC, which, I daresay, most of you remember. The Comptroller General did not attempt to tell the RFC what books it should keep. We simply came over here to Congress and we said, gentlemen, you have an organization here that is spending a terrific amount of money. At one time its total assets were nearly $30,000,000,000. They have the poorest accounting system that we have seen in a long time. After hearing both sides, the House Committee on Expenditures issued a report, and they agreed with us, and the power of the report of that committee, plus the persuasion of the Comptroller General, forced RFC to improve its situation, to get its house in order. We didn't have any authority to say what kind of books they should keep.