intracacies of cost-accounting standards, the extent to which the GAO might handle administrative matters for the Board, and the appointment of an The next Board meeting will be held tomorrow. Executive Secretary. On March 5, 1971, the Board announced the selection of Mr. Arthur Schoenhaut, as Executive Secretary. Mr. Schoenhaut, a Certified Public Accountant in the State of Virginia, will bring to the Board outstanding experience in the accounting field. He has been with the Federal Government since 1950. From that time until 1967 he was with the General Account ing Office and served as Deputy Director of the Civil Division of that Office from 1964 to 1967. Since 1967 he has been Deputy Comptroller of the Atomic Energy Commission. Although the Board will have to approve the form and structure of its organization, define its administrative and technical functions, and approve its methods of operations and the scope of work to be performed in the development of cost-accounting standards, it appears that the Board's staff will have to be concerned heavily in researching existing cost-accounting principles and practices, reviewing and analyzing such information from a technical standpoint, and testing possible cost-accounting standards in operation. Mr. Chairman, the estimate of $1,650,000 for the first full year of operation of the Board--fiscal year 1972--as shown in the budget does not take into account the pay raises granted to Federal employees in January of this We are not requesting the additional $45,000 cost of the pay increase as we expect to absorb this increase. year. Cwo-hundred-surg m) of the Feders! engaged in the g ing legislation Chairman) and one the compensation As indicated earli same annual rate 25 professions! e required to in lieve that at leas research and tech ganization. uld visit to obtain informat. for the purpose of developing Afic elements of cost. The task forces migh tives of Government, accounting profession and industr our f indications of voluntary assistance coming from those source Production Act ost Accounting pating that those serving on the task force teams would not be re. Board. date and d have Ն. Our estimate also took into account that the Board would have to contract for services of people highly qualified in the technical aspects of cost accounting from industry or the accounting profession whose services the Board would not otherwise be able to obtain by permanent employment with the We think that the Board staff should be held to a minimum and that qualified services should be obtained through contract on an as needed basis. In addition to these contractual services, the Board has entered into a Memorandum of Understanding and Agreement with the GAO whereby the latter would provide administrative services such as printing, payroll, financial reporting, budget, personnel, legal, security investigations and office services to the Board on a reimburseable basis. This generally summarizes our views with respect to the initial operation of the Cost-Accounting Standards Board. any questions. I will be glad to answer On the basis of our revised estimates, the $1,650,000 will be used as follows: $750,000 for salaries and related benefits of the Board, $520,000 $310,000 for travel of Board, its staff and task force for contract services, reimbursements for computer $ 70,000 Other--rent, communications, utilities, printing and The enabling legislation provides that each Board member appointed from private life will receive compensation at a rate of one two-hundred-sixtieth of the rate prescribed for level IV ($38,000 per annum) of the Federal Executive Salary Schedule for each day in which he is engaged in the actual performance of duties vested in the Board. The enabling legislation also provides that the Comptroller General (who serves as Chairman) and one member to be named from Government would continue to receive the compensation of his regular position from the agency employing him. As indicated earlier, the Executive Secretary would receive compensation at the same annual rate as the Board members. Our estimate was prepared on the basis that about 25 professional positions and 12 supportive clerical positions would be required to initially provide staff needed for the Board's functions. We believe that at least 25 professional staff will be required to perform the research and technical effort required for the early operations of this new organization. Our estimate took into account the need for coordination and coopera tion with other Government agencies, the accounting profession, and industry. For example, it is possible that the Board will wish to establish task force teams. The size of these teams presumably would vary (3 to 5 members or possibly more) with usually one member being from the Board's professional staff. These teams would visit plants of various types of defense and nondefense industries to obtain information on basic cost-accounting practices in use today for the purpose of developing cost-accounting standards for specific elements of cost. The task forces might be comprised of representatives of Government, accounting profession and industry. In view of the indications of voluntary assistance coming from those sources, we are anticipating that those serving on the task force teams would not be reimbursed for their services, but that the Board would finance the necessary travel costs involved. Our estimate also took into account that the Board would have to contract for services of people highly qualified in the technical aspects of cost accounting from industry or the accounting profession whose services the Board would not otherwise be able to obtain by permanent employment with the Board. We think that the Board staff should be held to a minimum and that qualified services should be obtained through contract on an as needed basis. In addition to these contractual services, the Board has entered into a Memorandum of Understanding and Agreement with the GAO whereby the latter would provide administrative services such as printing, payroll, financial reporting, budget, personnel, legal, security investigations and office services to the Board on a reimburseable basis. This generally summarizes our views with respect to the initial operation of the Cost-Accounting Standards Board. I will be glad to answer any questions. |