Information regarding trash collection services of the Planned purchase of the Regency House by the National Eligibility requirements for low-rent housing (The Honorable In the report on the examination of the financial statements, fiscal years 1964 and 1963, issued to the Congress on February 5, 1965, we expressed a favorable opinion on the financial statements of the Authority. This report did not comment upon any operational matters. The previous reports to the Congress on the audits of the Authority did contain comments on operational matters. These concerned (1) maintenance of projects, (2) controls over inventories of equipment, materials, and supplies, (3) increases in project development and construction costs, (4) losses of potential rental revenues, (5) procurement policies and practices, and (6) investment of excess monies. While we found no signif icant weaknesses in many of the activities examined at the Authority, the audit did disclose deficiencies and weaknesses deserving of prompt and vigorous corrective action. On those matters the reports contained recommendations to the Authority. Reviews of the activities of the National Capital Housing Authority included in conjunction with reviews of housing assistance activities of Department of Housing and Urban Development were not reported upon separately. They were reported upon in the overall report on the review directed toward obtaining corrective action by the Department on any observed weaknesses or deficiencies at the authorities included in the examination. GOVERNMENTWIDE REQUIREMENT FOR ACCRUAL ACCOUNTING SYSTEMS Mr. ANDREWS. The matter of the Government-wide requirement for accrual accounting systems was the subject of considerable discussion 2 years ago and at the request of this subcommittee the chairman of the full committee directed that a study be made. The committee's investigators recently filed a report and the members of the subcommittee have received copies of it. While I do not intend to go into the study at this time, I would like to ask approval of the subcommittee to have certain pertinent sections of the report inserted in the record and, Mr. Comptroller General, we may ask for your comment at a later date. Mr. STAATS. Yes. We have not yet seen that report. (See page 751 for excerpts of the report referred to above.) EFFECT OF RECENT LEGISLATION Mr. ANDREWS. You referr to the impact of the Legislative Reorganization Act of 1970 and other legislation on the work of the General Accounting Office. Specifically how is it reflected in your 1972 budget request? Mr. STAATS. We have covered it in the area of providing additional assistance to the committees and to the Members of the Congress. We cannot break out a separate identifiable amount which is related to that legislation. As we see the legislation, it does not add anything to our legal authority that we did not have before, but it does make more explicit the types of help the committees of Congress may wish to call on us for. I am referring here particularly to cost-benefit type studies in the public works field and in the military weapons field and so on. FISCAL 1971 APPROPRIATIONS Mr. ANDREWS. Including your supplemental request which is now pending before the committee or will be shortly, you had in 1971, this fiscal year, a total of $79,991,000. Mr. STAATS. That is correct. Mr. ANDREWS. How much of that was for salary increases? Supply it for the record if you don't have it now. Mr. SIMMONS. Page 1 of the statement details the pay act increases. Mr. ANDREWS. Your pay increase totals $5,678,000. In addition to that $5,678,000 needed for mandatory pay increases, you also have a supplemental request of $173,000 which is mandatory and resulted from the general increase in the Government's share of contributions for Federal employee health benefits. Mr. SIMMONS. The $173,000 is for the Government's share of a health benefits increase. It is now increased to 40 percent of the total cost which we have to pay. Mr. ANDREWS. $120,000 of that extra supplemental cost is resulting from payment of air tax. Mr. SIMMONS. That is right. Mr. ANDREWS. So most all of your supplemental request of $5,971,000 is due to increased salary costs? Mr. SIMMONS. Yes, sir. Mr. ANDREWs. Plus inflated travel costs? Mr. SIMMONS. Right; increased health benefits and travel costs. COSTS OF FISCAL YEAR 1971 SALARY INCREASES Mr. ANDREWS. Can you tell me the total cost of the two pay increases and how much of those increased costs were absorbed both in terms of dollars and percentage? Mr. SIMMONS. The one in December 1969, Public Law 91-231, we had to put in for a full-year basis this year, $3,892,000. The other one on January 10, 1971, amounted to another $1,786,000, for a total of $5,678,000. COSTS OF INCREASED CONTRIBUTION FOR HEALTH BENEFITS Mr. ANDREWs. What was the total cost of increased contributions for Federal employee health benefits? You are requesting $173,000. Mr. SIMMONS. The $173,000 relates to supplemental funds needed for 1971. The increase is $225,800 for 1972. Mr. ANDREWS. So you absorbed the difference between that and $173,000? Mr. SIMMONS. No, sir; the $225,800 is the difference between our revised 1971 and what we estimate for 1972. We need in this year, fiscal year 1971, because of the 40 percent, the additional $173,000. Mr. ANDREWS. You haven't been able to absorb any of it? Mr. SIMMONS. No, sir; we haven't. It follows our salaries. Almost all of our people have this coverage; and as the number of people in the appropriation increases, we have to pay our share of the health. program costs. Mr. ANDREWS. It is a question of mathematics? EMPLOYEE TURNOVER Mr. KELLER. Mr. Chairman, I have been with the General Accounting Office for quite some time, and I think this year we have one of the tightest budgets we have ever had. One of the reasons for it is that we usually calculate our hiring on the basis of our estimates of the number of separations we will have. This year separations are much lower in our professional staff. This is a result of the economic conditions. The opportunity to leave is not what it was, for example, last year. As a result we are in very close straits as far as from now to June 30 is concerned. That is why we are asking for supplementals. FISCAL 1970 APPROPRIATIONS Mr. ANDREWS. What was your total appropriation for fiscal 1970? Mr. SIMMONS. 1970? Mr. ANDREWS. Right. Mr. CORNETT. It was $70,273,423. Mr. ANDREWS. How much of that was unexpended at the end of fiscal 1970? Mr. CORNETT. Mr. Chairman, we were in a unique circumstance at the end of 1970. We applied all of our unexpended balance toward the retroactive pay increase approved April 15, 1970, and in addition. we needed about $1,646,000 in supplemental funds to finance the full cost of the pay increase. Mr. ANDREWS. So you had no unexpended balance at the end of the year? Mr. CORNETT. That is correct. NUMBER OF SALARY INCREASES IN LAST 10 YEARS Mr. ANDREWS. How many pay increases have your employees had in the last 10 years? Supply that for the record. (The information follows:) GENERAL PAY INCREASE LEGISLATION EFFECTIVE JULY 1, 1961-MAR. 30, 1971 Mr. STAATS. Mr. Chairman, just to show you what our situation is on personnel turnover, through the month of February last year we had 293 separations of our professional staff. This year we had 195. And through January last year we had 266 separations of professional staff, this year 184. Mr. ANDREWS. Does that mean they appreciate their job a little more now? Mr. STAATS. This means job opportunities are not as attractive elsewhere and we are not getting the turnover we have had in prior years. Mr. ANDREWS. I want to ask a little later about the problems of recruiting. FISCAL 1971 UNEXPENDED BALANCE You will get a total of $79,991,000 for fiscal 1971 if the supplemental request is granted? Mr. STAATS. Yes. Mr. ANDREWS. How much of that do you expect to have unexpended at the end of the year? Mr. SIMMONS. It would be extremely small because of the situation Mr. Keller and Mr. Staats just pointed out. As a matter of fact at the end of February we were only six under the average staff included in our 1971 budget. We are running extremely close, in the neighborhood of a few hundred thousand dollars. Mr. ANDREWS. You may hit it on the button as you did in 1970. FISCAL 1971 COST OF AIR TRAVEL TAX Mr. ANDREWS. You are requesting an increase of $120,000 to cover the air travel tax. Is that the total cost? Mr. SIMMONS. That is what we need this year to pay the additional tax went into effect on July 1, 1970. or this year to pick up the increased 8 percent tax on air travel. T. We need the additional amount cost. GOVERNMENT-WIDE SAVINGS ATTRIBUTABLE TO GAO Mr. ANDREWS. The General Accounting Office saves the U.S. Government money every year. Some of those savings occur because of overcharges by contractors, principally haulers. I believe that is one way you show the figures in savings to the Government. Freight overcharges. Mr. STAATS. On page B-2 of our justification there is a listing of what we call collections and other measurable savings. This is for the fiscal year 1970, the most recently completed fiscal year. Mr. ANDREWS. That is the one I asked about. Mr. STAATS. In 1970 this was $250 million. You will notice there the largest savings of this type were in the Department of Defense and in the Commerce Department. Mr. ANDREWS. When you state here that the savings to the U.S. Government, because of your activities in 1970, amounted to $250,101,000, how firm are those figures? How much of that was cash and how much of that occurred because of recommendations made by the General Accounting Office? Mr. STAATS. The amount of it which was cash is covered in the first column-$22,351,000, The rest of it is in the nature of findings and recommendations which we made which were put into effect and where we could directly calculate the amount of the savings. We do not put in this figure anything where we cannot specifically identify the savings that are made as a result of our efforts. Mr. ANDREWS. So the savings resulted in better methods of operation by the departments that you inspected and audited, plus about $22 million in cash. Mr. STAATS. That is correct. In addition, Mr. Chairman, you will find on page B-4 what we call additional financial savings not fully or readily measurable. Mr. ANDREWS. That would be in addition to the $250 million? Mr. ANDREWS. So in 1970 it cost $70,273,423 to operate the General Accounting Office, and you claim, and have figures to substantiate it, that as a result of the operation of your office in 1970 the Government saved $250,101,000? Mr. STAATS. That we can identify and support. Mr. ANDREWS. Without objection I think we ought to put this table on page B-2 in the record at this point. |