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Representative WOLVERTON. Are those exceptions largely based upon lack of appropriate information that would enable you to pass upon the question, or is it largely on the basis of exceptions to the right of the T. V. A. to have made the expenditures complained of?
Mr. Tulloss. I rather think that the larger part of the remaining exceptions remained because of the differences of view between the two offices, rather than a lack of information at this stage. I am not sure about that.
Representative WOLVERTON. In other words, you think the $6,000,000 that still remain unexplained satisfactorily to the General Accounting Office is due not because of lack of information now in the hands of the General Accounting Office, but because there is a radical difference of opinion between your office and the T. V. A. as to the right to have made such expenditure?
Mr. Tulloss. I would not like to be positive about that, but that would be my impression.
Representative WOLVERTON. Well, it would seem to me that that would naturally follow in view of what has transpired with reference to the $12,000,000 that I already cleared up.
Mr. Tulloss. The time that we have spent on this audit since the first exceptions, and the fact that so few remain after this length of time would indicate to me that we have found the facts as to the larger part of the items that should be removed.
Representative WOLVERTON. Now, in what way is this committee to be apprised of the cases that are now pending which amount in total to $6,000,000? In other words, as we inquire into this difficulty or this situation that has created difficulties between the General Accounting Office and the T. V. A., how are we going to get the information to determine or to decide, if we deem it necessary to do so, who is right or who is wrong with respect to these items totaling $6,000,000.
Mr. Tulloss. We are preparing that information now, and I hope to be able to furnish it to the committee before long. We keep no data of that kind as a rule, and we are having to start, you might say, at scratch on that. Senator SCHWARTZ. May I ask the witness a question there? Representative WOLVERTON. Certainly.
Senator SCHWARTZ. When you make that showing, will there be attached to it the views of the T. V. A. as to the particular exceptions still remaining?
Mr. Tulloss. We haven't the views of the T. V. A. as to many of those. The information will be up to date, and T. V. A. has not been advised in many cases, and in others only informally advised. So there will be no record in many cases as to the views of the T. V. A. on the particular transactions.
Senator SCHWARTZ. I understood that would be the situation. Representative WOLVERTON. Now, what I am seeking to ascertain, from my standpoint as a member of the committee, is whether there is a gross violation of the law on the part of the T. V. A. in the conduct of its business, or whether it is merely a difference of opinion as to what the right of the T. V. A. may be, or whether it consists of failure to merely comply with some technical rules that would properly support an expenditure, or just what the situation is that has created a case like there now exists, where after 5 years of operation the T. V. A. is confronted with exceptions on the part of the General Accounting Office that total over $6,000,000 in amount. That situation does not exist in any other department, does it?
Mr. Tulloss. I would say that it does in some of the other departments. We have quite large exceptions in other accounts.
Representative WOLVERTON. It is more than ordinarily necessary, it would seem to me, for the committee to give some thought to it because if this condition is existing where two departments of the Government-one is often spoken of as the “watchdog of the Treasury,” and the other a spending agency-are in conflict to the amount of over $6,000,000 in a period of 5 years, if the underlying differences that bring about that situation are not corrected, it just goes on and on and on indefinitely.
Whether that handicaps the T. V. A. I don't know, but if we could have the character of these exceptions before us so that we could form some judgment as to the reasons, good or otherwise, that caused this situation, it would, it seems to me, be very helpful in this important matter of bringing about more friendly relations between the General Accounting Office and the T. V. A.
Senator SCHWARTZ. Could I ask the witness a question?
Senator SCHWARTZ. Could you give me an estimate of the total amount of expenditures of the T. V. A. during the past 5 years, out of which there remain $6,000,000 in controversy between you and the T. V. A.? I should say the total expenditures.
Mr. Tulloss. I understand the total expenditures up to June 30, 1938, aggregate approximately $214,000,000.
Representative WOLVERTON. Has the General Accounting Office ever made any recommendations with respect to whether there should be a preaudit of Government agencies or departments?
Mr. Tulloss. You mean, generally?
Representative WOLVERTON. How far has that recommendation progressed?
Senator SCHWARTZ. I wonder if the witness would elaborate a little bit on what he means by "preaudit” in that sense, whether he means that every purchase would have to come to the Accounting Office before it could be made.
Representative WOLVERTON. Will you give us the benefit of your thought as to what the department has in mind when it recommends a preaudit?
Mr. Tulloss. The preaudit, as you know, is an examination of the transaction before payment in which, if submitted to the General Accounting Office, the Office will indicate its views as to the correctness of the proposed payment, and will certify it for payment in a definite amount if approved.
That procedure, however, is not applicable to all classes of payments. It would be impracticable for the General Accounting Office or anyone, in my opinion, to preaudit all of them. However, the recommendation, I think, had in mind the submission for preaudit of those
transactions that could be readily preaudited without delaying the transactions of the Government.
Of course our regulations now contemplate that any doubtful item will be submitted to the General Accounting Office anyway, without payment.
Senator SCHWARTZ. Would the amount in dollars of the transaction have anything to do with whether or not you want a preaudit of it, or would it be its character?
Mr. Tulloss. No, sir; we have never drawn a distinction as to the amount. It is generally on the law and the principle involved. We would be just as much interested in a small item as a larger one.
Senator SCHWARTZ. If it fell within the principle that you have in mind, and the dollars had nothing to do with it, that would mean a transaction that only involved $50 would have to come to the Accounting Office and be authorized before they would pay the $50?
Mr. TULLOSS. That is the general rule as to the transactions coming to the General Accounting Office. If they are doubtful they should come in. No amount has been fixed as to that.
Senator SCHWARTZ. I was just sort of canvassing in my mind the difficulties that might be encountered, or the inconvenience.
Mr. BIDDLE. Could I ask another question? I am not very clear on the preaudit-if I may interrupt for a moment. You would still say that there is a preaudit in this sense, that where for instance a low bidder whose bid has not been accepted by you complains to the General Accounting Office, as frequently might occur, you would then, I presume, immediately look into the transaction and take it up with T V. A., suggesting that if the higher bid had, in your opinion, been improperly accepted rather than the lower bid, that you would not honor the voucher?
Mr. Tulloss. Yes.
Mr. BIDDLE. So that there is in a certain sense a continual preaudit running, in that sense?
Mr. Tulloss. We do that now.
Mr. BIDDLE. That would have the effect of a preaudit, would it not?
Mr. Tulloss. It has the effect.
Mr. BIDDLE. It has the effect. Then would it be fair to say that one reason why the preaudit cannot now be done very satisfactorily is because the auditing of the T. V. A.'s books, with the exception of power, the money is paid by your office, and you don't have the wherewithal to have a running preaudit, or would that not be true?
Mr. Tulloss. That is not true now.
Representative WOLVERTON. In those cases where you make an exception either as to the improper expenditure of moneys based on either legal reasons or otherwise improperly made. What procedure is followed, if any, for holding the person who has committed such act, responsible?
Mr. Tulloss. Under the President's,
Representative WOLVERTON. In other words, if I may state it a little bit differently, if it seems to the General Accounting Office that there has been an expenditure of money improperly made, who assumes the responsibility for that collection or return or whatever other steps may be necessary?
Mr. TULLOSS. The responsibility is really that of the head of the department or establishment, and to give effect to that, we set up accounts against the individual and ultimately report the case for suit, if it is necessary. In other words, we raise charges against the responsible individual, and report the matter to the Attorney General for suit.
Representative WOLVERTON. Have there been any instances where there has been recommendation for collection made, and what has been the result of such?
Mr. Tulloss. To the Tennessee Valley Authority?
Mr. Tulloss. We have in our exceptions, I think, urged that recovery be effected in items. We haven't indicated, possibly, from whom the recovery should be effected. Generally speaking, a recovery is to be effected from the recipient of the money but if that fails, why then we have the bonded accountable officer and the certifying officer against whom proceedings may be had.
Representative WOLVERTON. Has there been any case that you can point to where the procedure of collection has followed-where there has been any admission of improper payments?
Mr. TULLOSS. I think the Tennessee Valley Authority has collected some money on our recommendations, that the item was erroneously paid. I am unable to refer to any such item at this time but I am quite sure that there have been such.
AUTHORITY EXPENDITURES FOR BOOKS AND PERIODICALS
Representative WOLVERTON. Now, will you turn to that portion of your report for 1934, in which you take exception to the large expenditure of funds for periodicals, magazines, newspapers, and so forth? It is my recollection that your criticism to those expenditures is based on the fact that it exceeds what the statutes provide should be expended. I thought that it was about page 199, but my copy seems to have been mixed up in some way.
Mr. Tulloss. I think that that begins on page 297.
Representative WOLVERTON. Well, that is where the break-down appears, but at an earlier point in your report you had taken exception in general language, and fixed the amount, but however it may be that without turning to that particular page, you could give us some idea of that criticism, what that consists of, the basis for it, and so forth.
Mr. Tulloss. I believe that comment begins on page 342, as follows:
As there is no specific amount mentioned in the Tennessee Valley Authority Act, supra, the limitation contained in section 102, title 5, United States Code, appears applicable and any amount disbursed in' excess of such limitation is unauthorized.
Representative WOLVERTON. What were the facts with reference to the expenditure of funds by T. V. A. for purchase of newspapers, magazines, books, and so forth, that caused you to make the criticism which appears in your 1934 report?
Mr. Tulloss. The Tennessee Valley Authority gives the following explanation on page 307 of its reply:
l'pon pages 297 to 342 of the report, there appears a detailed list of books and subscriptions to newspapers and periodicals amounting to $10,078, all of which is disallowed as an improper expenditure. It is contended that the limitation contained in title 5, United States Code, Annotated, section 102 is applicable. That provision is as follows:
"Expenditures for newspapers: The amount expended in any 1 year, for newspapers for any department except the Department of State, including all bureaus and offices connected therewith, shall not exceed $100 except where otherwise specifically authorized by law. No executive officer other than the heads of departments shall apply more than $30 annually out of the contingent fund under his control to pay for newspapers, pamphlets, periodicals, or other books or prints not necessary for the business of his office."
I beg your pardon. I will go back. "for the business or his office."
It is first to be noted that this statute applies only to Government departments, and is therefore not applicable to the Authority. More important, however, these expenditures in fact have been otherwise specifically authorized by law within the meaning of the statute. The Appropriation Act of 1933 in appropriating $50,000,000 to the Tennessee Valley Authority, specifically included among the purposes of such appropriation, the following: "Law books, books of reference, newspapers, periodicals." This provision was written into the act by the Director of the Budget and was accepted by the clerk of the Appropriations Committee. The attention of the Authority was directed to the fact that such language would be necessary, and the directors were informed that the statute as drafted would be adequate. The language appears to be sufficiently specific authorization for the expenditure of funds appropriated by that particular act.
Representative WOLVERTON. Then the T. V. A.'s position is again presented to the General Accounting Office, on the basis that it is not a department of Government, that would come within the provisions of the statutes applying to other departments, is that not right?
Mr. Tulloss. Yes. Representative WOLVERTON. In other words, it seems to me that at every point, even including this matter of purchase of newspapers and magazines, books, and so forth, which for some reason or other Congress has deemed advisable to make a specific limitation by the passing of statutes, that here again the Tennessee Valley takes the position that they are not amenable to that law that would apply to other departments.
Mr. Tulloss. Yes, sir.
Representative WOLVERTON. Of course they take the further position as indicated by you in what you have read, they seem to think that there is some-aside from that-basic objection, that there is some right on their part to purchase. What I am emphasizing is that on every turn the T. V. A. has consistently, from its standpoint at least, taken the position that it is not in the same category as other departments of Government.
Mr. Tulloss. Yes, sir.