Washington cover-up

by Clark R. Mollenhoff

“The Comptroller General has stated that in making his audits he will give full consideration to the effectiveness of the existing systems of internal accounts, procedures, and controls and of external examinations by an administrative supervisory agency. The bill includes a specific provision requiring the Comptroller General in making his audits to utilize, to the fullest extent deemed by him to be practicable, reports of examinations of Government corporations by a supervising administrative agency pursuant to law.”

The Budget and Accounting Procedures Act of 1950 requires each executive agency to maintain systems of accounting and internal control and provides, in section 117 (a) (31 U.S.C. 67 [a]), that the Comptroller General in determining auditing procedures and the extent of examination to be given accounts and vouchers give consideration to “the effectiveness of accounting organizations and systems, internal audit and control, and related administrative practices of the respective agencies.”

The Comptroller General is required to audit the activities of the executive departments and agencies; to make expenditure analyses to determine whether funds have economically been expended; and to give consideration to the departments’ internal audit and control and related administrative practices. To perform these duties he is given the clear statutory authority to require information of the departments and agencies regarding their organization, activities, and methods of business, coupled with the right to access to any books, documents, papers, or records of any such establishment (except as to the confidential State Department funds).

There have been no court cases construing the statutes giving the Comptroller General access to records. However, in 1925, the Attorney General in an opinion to the Secretary of War (34 Op. Atty. Gen. 446), concerning a request by the Comptroller General for information relative to an award of a contract showing that the lowest bid was accepted, or if otherwise, a statement for the reasons for accepting other than the lowest bid, advised, in part, as follows:

“It will be observed that the Comptroller General states that this requirement is made necessary in order that a satisfactory audit may be made. What papers or data he should have to make such an audit would seem to be a matter solely for his determination. Moreover, section 313 of the Budget and Accounting Act provides (p. 26):

“All departments and establishments shall furnish to the Comptroller General such information regarding the powers, duties, activities, organization, financial transactions, and methods of business of their respective offices as he may from time to time require of them; and the Comptroller General, or any of his assistants or employees, when duly authorized by him, shall, for the purpose of securing such information, have access to and the right to examine any books, documents, papers, or records of any such department or establishment....”

Questions as to whether the General Accounting Office has a right to access to records claimed to be confidential for security or other reasons have arisen from time to time and the General Accounting Office has always taken the position that it has the right to the information, even though certain provisions of law relating to disclosure might be applicable to it.

The General Accounting Office recognizes that certain of the functions of the inspectors general, such as criminal and personnel investigations, are of a confidential nature and it will normally accept summaries of facts contained in such reports to the extent they are needed in connection with its work. However, the inspectors general also have as a part of their respective missions and duties responsibility for conducting inspections, surveys, and examinations of the effectiveness of operations and overall efficiency of a command, installation, or activity. These functions may be performed on a periodic or special basis as directed by competent authority. The performance of these functions constitutes an important part of the process of management evaluations and internal reviews as distinguished from criminal or personnel investigations. They provide officials and appropriate personnel of authority with an independent appraisal of the effectiveness of operations and overall efficiency. Moreover, a very considerable part of the inspections and reviews made by the inspectors general involve reviews of procedures and policies and as such are an important segment of the internal reviews and control which the General Accounting Office, under section 117 (a) of the Budget and Accounting Procedures Act of 1950 is required to consider and recognize in determining the audit procedures to be followed in its reviews.

The scope of inspection and survey programs of the inspectors general is similar in character to much of the work the General Accounting Office has scheduled in requirements, procurement, supply management, and research and development areas. The programs of the Deputy Inspector General for Inspection of the Air Force covering the period July 1, to December 31, 1958, include (1) a survey of Air Force procurement methods (advertising versus negotiation); (2) a survey of procurement quantitative and qualitative program changes; (3) a survey of procurement of commercial communications and utility services; (4) a survey of contract cost overruns; (5) a survey of maintenance programs; (6) a survey of modification programs; (7) a survey of the application of electronic data processing systems and other like subjects. All of these subjects represent internal and management evaluations which would clearly be a part of “internal audit and control” within the meaning of section 117 (a) of the Accounting and Auditing Act of 1950. It is essential that such reports be made available to the General Accounting Office in order that it can evaluate the effectiveness of the department’s system of internal control and to preclude unwarranted and unnecessary duplication of effort in the internal audit and the independent review made by this Office. The Air Force Inspector General’s report on the ballistic missiles program clearly falls within the term “internal audit and control.”

The Secretary of the Air Force in refusing the Comptroller General access to the Inspector General’s report on the ballistic missiles program stated that the Inspector General’s reports are prepared solely for the use of responsible officials within the Air Force, and that the objective of self-criticism can be obtained only if the Inspector General’s organization has the assurance that its reports will, without exception, be kept within the Department. The Secretary also stated that the report in question concerned the internal management of the Department, and was prepared solely for the benefit and use of those officers and employees of the Department who are responsible for its administration, and that the release of such reports to persons outside the Department would have a serious effect on the effective administration of the Department. The Secretary concluded that these considerations compelled him to conclude that the public interest would best be served by not releasing the report.