IMPROVING GOVERNMENTAL BUDGETING AND ACCOUNTING METHODS AND PROCEDURES AND FOR OTHER PURPOSES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP59-00224A000100010003-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 12
• Document Creation Date: December 9, 2016
• Document Release Date: August 25, 2000
• Sequence Number: 3
• Publication Date: June 19, 1956
• Content Type: REPORT

195
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Calendar No. 2286
84TH CONGRESS 1 SENATE REPORT
&d Session f No. 2265
IMPROVING GOVERNMENTAL. BUDGETING AND AC-
COUNTING METHODS AND PROCEDURES, AND FOR
OTHER PURPOSES
Mr. KENNEDY, from the Committee on Government Operations,
submitted the following
REPORT
The Committee on Government Operations, to whom was referred
the bill (S. 3897) to improve governmental budgeting and accounting
methods and procedures, and for other purposes, having considered
the same, report favorably thereon, without amendment, recommend
that the bill do pass.
The bill amends the Budget and Accounting Act of 1921 and the
Budget and Accounting Procedures Act of 1950 so as to improve
Federal budgeting and accounting methods and procedures as recom-
mended by the Commission on Organization of the Executive Branch
of the Government, to permit: (1) the inclusion of program costs and
accomplishments in the annual budget; (2) the submission of budget-
ary requests for appropriations on an annual accrued expenditure
basis; (3) the excess of appropriations on an annual expenditure basis
over accrued expenditures to lapse, and the remaining balances to be
transferred to a single account at the end of each fiscal year; (4) the
agencies to prepare and execute their budgets on a cost basis; (5) the
head of each agency to bring about consistency between accounting
and budget classifications; (6) the synchronization of the accounting
and budget classifications with the organization structure; (7) support
of the budget justifications by information on performance and pro-
gram costs by organizational units; (8) each agency to maintain its
accounts on an accrual basis showing resources, liabilities, and operat-
ing costs; (9) the integration of property accounting records with the
financial accounting system; and (10) the simplification of agency
systems for subdividing funds.
71009
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2 IMPROVE BUDGETING AND ACCOUNTING PROCEDURES
The bill specifically excludes the application of the annual accrued
expenditure concept to requests for appropriations for the payment
of certified claims, tax refunds, private relief acts, interest on trust
funds, revolving funds, pensions, payment to former members of the
Armed Forces, their dependents, and other similar appropriations for
which the submission on an accrual basis would not serve any useful
purpose.
The objectives listed herein are intended to be implemented by the
President, although close cooperation of the executive and legislative
branches of the Government will be essential. It is expected that the
conversion of the budget and accounting system to the principles and
procedures contemplated under this bill will take place on an agency
by agency basis during the next 4 or 5 years.
Section 1 of the bill authorizes the President, to the maximum
extent deemed desirable, to include information on program costs
and accomplishments in the annual budget; to determine the amounts
of proposed appropriations on an annual accrued expenditure basis;
and to require the departments and establishments to develop their
requests for appropriations from cost-based budgets and to use such
cost-based budgets for purposes of administration and operation.
Section 2 provides for improved budget presentation by requiring
the agencies to achieve consistency in accounting and budget classi-
fications; synchronization between such classifications and organiza-
tional structure and to support their budget justifications by informa-
tion on performance and program costs by organizational units. This
section also provides that the accounts shall. be maintained on an
accrual basis and that the accounting system include adequate mone-
tary property accounting records both of which are necessary pre-
requisites to the preparation of cost-based budgets.
Section 3 requires each agency to work toward the objective of
financing each operating unit, at the highest practical level, from not
more than one administrative subdivision for each appropriation or
fund affecting such unit.
The bill makes ample provision for a modernized budget program
based upon actual or estimated costs. Thus, the Congress will have
the tools to review actual performance in the past and to exercise effec-
tive control over the expenditures to be accrued during the budget
year. It will substantially reduce the huge unexpended balances of
appropriations which presently are carried forward from prior years.
The Hoover Commission recommendations on budget and account-
ing represent a constructive program to carry forward evolutionary
improvements of the character urged by this committee since 1917.
The first Hoover Commission made a significant contribution and
many of its recommendations were included in the Budget and
Accounting Procedures Act of 1950 sponsored by this committee.
Others had already been achieved in whole or in part prior to the enact-
ment of that legislation.
Enactment of S. 3897, would accomplish or pave the way for the
accomplishment of the recommendations contained in the Budget
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and Accounting Report of the second Hoover Commission dealing
with-
1. Program costs and accomplishments in the executive budget;
2. Annual accrued expenditure appropriations;
3. A single account for each appropriation;
4. Cost based budgets;
5. Information on performance and program costs by organi-
zational units and synchronization of organization structures,
budget classifications and accounting systems;
6. Accrual accounting, including adequate monetary property
accounting; and
7. Simplification of allotment systems.
The Subcommittee. on Reorganization held hearings on March 20,
21, 26, 27, and 28, 1956, on a related bill, S. 3199, which was introduced
in the Senate for the purpose of implementing the recommendations
of the Hoover Commission. At these hearings the sponsor of S. 3199
(Senator Payne) and representatives of the principal departments and
agencies of the Government testified in favor of its objectives. Some
of the witnesses, however, expressed certain reservations regarding
those provisions which would require the assignment of budget experts
to the large agencies, establishment of a comptroller in each agency,
establishment of a staff office of accounting in the Bureau of the
Budget, and other objectives which it is believed could be attained
administratively under existing law.
At the direction of the chairman, representatives of the General
Accounting Office, the Department of the Treasury, the Bureau of the
Budget, and the staff of the committee redrafted the bill, which was
introduced as S. 3897 on May 21, 1956, by Senator Kennedy, chairman
of the Subcommittee on Reorganization, with Senator Payne and 30
other Senators as cosponsors.
The subcommittee held hearings on S. 3897 on June 4, 5, and 6, 1956,
during which time all of the witnesses endorsed the objectives con-
tained in the bill, and recommended favorable action thereon. How-
ever, representatives of several agencies, in communications to the
committee, express some concern over the application of the bill to
no-year appropriations and other funds which are made available for
procurement of long-lead-time items or other similar types of pro-
grams and activities. In this connection, the Department of Defense
expressed considerable concern regarding the application of the lan-
guage in section i (a) of the bill with respect to the authority of
Congress to grant obligation authority in advance of appropriations.
The Department recommended that, if the accrued expenditure
basis of appropriations is adopted, as contained in the bill, section 1
(a) be amended so as to provide a means for continuing obligational
authority. The Department expressed the opinion that such action
is necessary in order to provide a complete bill, and to make it clear
that the existing authority to include requests for contract authoriza-
tions in the budget will not be abrogated. For this reason the Depart-
ment recommended that a proviso be inserted in subsection 1 (b)
stating that-
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nothing in this subsection shall be construed to affect the
authority of the President to submit requests for authoriza-
tions to create obligations in advance of appropriations.
Counsel for the Comptroller of the Department of Defense reported
that there was some doubt as to whether the section, when made
applicable to the President, would have the effect of canceling the
definition of appropriations, particularly the authority to create obli-
gations in advance of appropriations.
The amendment recommended by the Department of Defense was
considered by the subcommittee, with a view of determining its impli-
cation on the overall objectives of the National Military Establish-
ment, and after consultation with attorneys of the General Accounting
Office and representatives of the Bureau of the Budget, the chairman
requested a formal interpretation of the section from the Comptroller
General of the United States.
By letter dated June 6, 1956, the Comptroller General ruled that
it is his considered opinion that there is no conflict whatsoever between
the new subsection 201 (b) contained in the bill and the present section
201 of the Budget and Accounting Act of 1921, as amended; that the
new language could not be construed as restricting the authority to
request contract authorizations in the bill pending before the com-
mittee.
The Comptroller General concluded by stating:
It thus seems very clear to us that the existing authority
to include requests for contract authorizations in the budget
would not be abrogated by this bill, and that the clarifying
language suggested by the Department of Defense is un-
necessary.
The complete text of the Comptroller General's decision is contained
herein and made a part of this report.
COMPTROLLER GENERAL OF THE IJNITED STATES,
Hon. JOHN F. KENNEDY,
tiI ashington, June 6, 1956.
Chairman, Subcommittee on Reorganization,
Oommittee on Government Operations,
United States Senate.
DEAR MR. CHAIRMAN: During the hearings this morning on S. 3897,
representatives of the Department of Defense suggested that the
language of the proposed section 201 (b) of the Budget and Accounting
Act, 1921, might be clarified by the insertion of the following proviso
at the end of the paragraph in lines 6 through 9 of page 2 of S. 3897:
"Provided, That nothing in this subsection shall be construed to affect
the authority of the President to submit requests for authorizations
to create obligations in advance of appropriations."
The Defense representatives apparently felt that the present lan-
gauge of lines 6 through 9 might possibly be construed as repealing
by implication the authority for requesting contract authorizations
contained in the present section 201 of the Budget and Accounting
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IMPROVE BUDGETING AND ACCOUNTING PROCEDURES 5
Act, 1921. It is our considered opinion that there is no conflict
whatsoever between the language of the new subsection 201 (b)
proposed to be added by this bill and the present section 201 of that
act, and that the proposed section 201 (b) could not be construed as
restricting the authority to request contract authorizations in the
present section 201.
Section 2 of the Budget and Accounting Act, 1921, as amended,
defines the term "appropriation" as used in that act as follows:
"The term `appropriations' includes, in appropriate context, funds
and authorizations to create obligations by contract in advance of
appropriations, or any other authority making funds available for
obligation or expenditure." [Italic supplied.]
The use of the words "in appropriate context" contained in that defi-
nition makes it clear that the term "appropriation" may mean (1)
the appropriation of funds; (2) authorizations to create obligations by
contract in advance of appropriations (commonly referred to as
"contract authority"); or both (1) and (2). As the term "appropria-
tion" is used in the present section 201(d), which under this bill would
be section 201 (a) (5), and section 203, it clearly means both appropria-
tion of funds and contract authority. As that term is used in line 6,
page 2, of the bill, however, it is used in relation to the determining of
amounts of proposed appropriations on an accrued expenditure basis.
As the term "appropriation" is used in that context, it can mean only
the appropriation of funds. Since the language in lines 6 through 9,
page 2 of the bill relates only to the appropriation of funds, it cannot
be viewed as conflicting with the authority in the present section 201
to include in the budget proper requests for authorizations to create
obligations in advance of appropriations. The appropriation com-
mittees of the Congress will thus have the tools to review both the
complete programs for which contractual authorizations are requested
or have been granted as well as the amount of funds required to meet
the expenditures which will accrue in. the budget year.
Moreover, it should be noted that the legislative history of this bill
already has made it clear that contractual authorizations for long
lead-time programs will be required when the appropriations therefor
are stated on an annual accrued expenditure basis. This was pointed
out in the Hoover Commission Report on Budget and Accounting.
It thus seems very clear to us that the existing authority to include
requests for contract authorizations in the budget would not be
abrogated by this bill and that the clarifying language suggested by
the Department of Defense is unnecessary.
Sincerely yours,
JOSEPH CAMPBELL,
Comptroller General of the United States.
During the hearings on S. 3897, the Comptroller of the Department
of Defense testified that the Department wholeheartedly supports
the provisions of the bill with respect to the use of: (1) cost-based
budgets, (2) the accrual basis of accounting, (3) basis of synchronizing
budgeting and accounting classifications, and (4) the basis of ad-
ministrative subdivision of funds and other provisions of the bill.
The Comptroller, however, expressed some reservations as to the
savings which would result from the adoption of the accrued expendi-
ture basis for appropriations. The Comptroller also expressed the
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view that there would be some problems with regard to the imple-
mentation of the legislation by the Department of Defense.
Considerable testimony was developed by the committee during the
course of its hearings on the bill with respect to the substantial prog-
ress being made in the Department of Defense toward sound financial
management of its huge resources under title IV of the 1949 amend-
ments to the National Security Act which was the result of the first
Hoover Commission recommendations. Enactment of this bill will
encourage the Department of Defense to continue to accelerate its
plans for full implementation of title IV. These improvements, in-
cluding continued progress in adoption of the cost-based budgets,
wide utilization of accrual accounting, more realistic administrative
control of funds and the synchronization of budget accounting classi-
fications and organizational structure as well as in the other areas of
Department of Defense financial management can go forward without
the necessity for awaiting any change in the basis of making appro-
priations. As a matter of fact, these improvements must necessarily
precede such a change.
It is the firm conviction of this committee that S. 3897 would pro-
vide the necessary legislative authority for major improvements in
the fields of budgeting and accounting in the Federal Government,
and that it conforms to those objectives and conclusions of the Hoover
Commission Report on Budget and Accounting which require or would
be expedited by legislative action.
Certain recommendations of the Hoover Commission which can
best be accomplished administratively have been omitted from the
bill. Also, those recommendations pertaining to the settlement of
claims were incorporated in another bill, S. 3362, which was reported
by this committee on June 7, 1956, and the recommended legislative
action to provide relief of accountable officers was included in legis-
lation enacted during the first session of the 84th Congress--Public
Laws 334 and 365 approved on August 9, and 11, 1.955, respectively.
This committee has been active for a number of years in promoting
improved financial administration in the Federal Government and, in
accord with the statutory authority, will continue to give considera-
tion to the problems and progress in budget and. accounting pro-
cedures throughout the Government. Inasmuch as the implem.en.ta-
tion of the practices and procedures provided for in S. 3897 will,
according to evidence submitted at the hearings, require a period of
years before full implementation of the program, it is particularly
important that the committee keep in close contact with develop-
ments thereunder, should the bill be enacted into law.
In addition, the close cooperation of the Appropriations Convnit-
tees of the Congress, the Bureau of the Budget, the Department of the
Treasury, the General Accounting Office, and all of the agencies will
be required to bring about the implementation and the advancement
of the ultimate objectives of this legislation.
Section 3. (a) : This section is designed to implement recommenda-
tions Nos. 4, 7, and 17 of the Hoover Commission Budget and Account-
ing Report which provide:
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(4) That the executive budget continue to be based upon
functions, activities, and projects adequately supported by
information on program costs and accomplishment, and by a
review of performance by organizational units where these
do not coincide with performance budget classifications.
(7) That the executive budget and congressional appro-
priations be in terms of estimated annual accrued expendi-
tures, namely, charges for the cost of goods and services esti-
mated to be received.
(17) That each department and agency be authorized to
maintain a single account under each appropriation title or
fund for controlling the amount available for the liquidation
of valid obligations.
Section 201 (a) of the Budget and Accounting Act, 1921, would
require the President to set forth in the budget, at such times as may
be practicable, information on program costs and accomplishments.
Such information should permit the Congress to give consideration to
both relative size of programs and the question of economy and
efficiency, as proposed in the first part of Hoover Commission Recom-
mendation No. 4. The latter part of this recommendation is imple-
mented by the addition of section 106 to the Budget and Accounting
Procedures Act of 1950, as contained in section 2 (a) of the bill.
Section 201 (b) would require the President, to the maximum extent
deemed desirable and practicable, to determine the amounts of regular,
supplemental, or deficiency appropriation requests on an annual ac-
crued expenditure basis, that is, the amounts of appropriated funds
needed to pay for goods and services to be received in the fiscal year
and other payments authorized by law to be made in such fiscal year
from the particular appropriation. Certain appropriations, for which
the annual controls contemplated by the accrued expenditure basis
would obviously serve no purpose, are specifically excluded. The
stating of appropriation on an annual accrued expenditure basis would
vest in the Congress the determination of the level of activity during
the budget year and would assure annual review by the agencies and
the Congress of past and proposed performance under programs in-
volving long lead-time contracts. This would accomplish Hoover
Commission Recommendation No. 7.
Section 201 (c) vests discretion in the President as to the manner and
time that requests for appropriations shall be determined on an accrual
expenditure basis. The conversion could be effected over a period of
time as and when systems of programing, budgeting, and accounting
were deemed adequate. This conversion cannot be successfully
effected until such systems are adequate.
Section 201 (d) would lapse the excess of any appropriation or fund
made on an annual accrued expenditure basis over the accrued
expenditures under such appropriation or fund as of the end of each
fiscal year and merge the remaining balances of each such appropria-
tion or fund with any appropriation or fund made for the same general
purpose for the ensuing fiscal year as a single account. The merging
of the remaining balances with the related appropriation for the
ensuing fiscal year permits the use of only one account in accordance
with Hoover Commission Recommendation No. 17, but only to the
extent that appropriations are stated on an accured expenditure basis.
Section 1 (b): This section is designed to implement recommenda-
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8 IMPROVE BUDGETING AND ACCOUNTING PROCEDURES
tions Nos. 3 and 6 of the Hoover Commission Budget and Accounting
Report which provide:
(3) That for management purposes, cost-based operating
budgets be used to determine fund allocations within the
agencies, such budgets to be supplemented by periodic
reports on performance.
(6) That executive agency budgets be formulated and.
administered on a cost basis.
Section 2113 (b) of the Budget and Accounting Act, 1921, would
authorize the President to require the departments and agencies to
develop their requests for appropriations from cost-based. budgets.
Section 216 (c) would require such cost-based budgets to be used by
all departments and establishments and their subordinate units for
purposes of administration and operation including the administrative
subdivisions of appropriations or funds. Recommendations Nos. 3
and 6 eventually could be completely adopted.
Section 2 (a): This section is designed to carry out the latter part
of Hoover Commission Recommendation No. 4, referred to above
under section 1 (a), and recommendation No. 5, which provides:
(5) That the agencies take further steps to synchronize
their organization structures, budget classifications, and
accounting systems.
Section 106 of the Budget and Accounting Procedures Act of 1950 is
intended to achieve, insofar as possible, three objectives: (1) Con-
sistency in accounting and budget classifications; (2) synchronization
between such accounting and budget classifications and organizational
structure; and (3) support of the executive budget by information on
performance and program costs by organizational units. Information
would thus be available to the Congress for review of performance
and program costs of each organizational unit including those which
do not coincide with performance budget classifications. Objectives
(1) and (2) are included in Hoover Commission Recommendation
No. 5 and objective (3) in the latter part of recommendation No. 4.
Section 2 (b): This section is designed to implement recommenda-
tions Nos. 14 and 16 which provide:
(14) That Government accounts be kept on the accrual
basis to show currently, completely and clearly all resources
and liabilities, and the costs of operations. Furthermore,
agency budgeting and financial reporting should be developed
from such accrual accounting.
(16) That the executive agencies accelerate the installa-
tion of adequate monetary property accounting records as an.
integral :part of their accounting systems.
Section 113 (c) of the Budget and Accounting Procedures Act of
1950 would require the head of each executive agency, as soon as
practicable, to cause the accounts of such agency to be maintained on
an accrual basis and to maintain adequate monetary property ac-
counting records as an integral part of the accounting system. Only
when this done would it be possible for management or the Congress
to determine at any given time the fiscal status of such agency, as
contemplated. by recommendations Nos. 14 and 16.
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Section 2 (c) : This section amends the definition of the term
"executive agency" in section 118 of the Budget and Accounting
Procedures Act of 1950 to include the Post Office Department within
the meaning of that term as used in section 113 (c) of that act.
Section 3: This section merely states legislatively recommendation
No. 13 which provides :
(13) That the allotment system be greatly simplified. As
an objective each operating unit should be financed from a
single allotment for each appropriation involved in its opera-
tions.
The making of numerous allotments which are further divided and
suballotted to lower levels leads to much confusion and inflexibility
in the financial control of appropriations or funds as well as numerous
minor violations of section 3679, Revised Statutes, as amended (the
Anti-Deficiency Act).
In compliance with subsection (4) of rule XXIX of the Standing
Rules of the Senate, which is in existing law made by the bill S. 3897,
as reported, are shown as follows (existing law proposed to be omitted
is enclosed in black brackets, new material is printed in italics, existing
law in which no change is proposed is shown in roman):
BUDGET AND ACCOUNTING ACT, 1921, As AMENDED BY THE BUDGET
AND ACCOUNTING PROCEDURES ACT OF 1950
SEC. 201. (a) The President shall transmit to Congress, during the
first fifteen days of each regular session, the Budget, which shall set
forth his Budget message, summary data, and text, and supporting
detail. The Budget shall set forth in such form and detail as the
President may determine --
[a] (1) functions and activities of the Government;
(2) at such times as may be practicable, information on program
costs and accomplishments;
[b] (3) any other desirable classifications of data;
[c (4) a reconciliation of the summary data on expenditures
with proposed appropriations;
[d] (5) estimated expenditures and proposed appropriations
necessary in his judgment for the support of the Government for
the ensuing fiscal year, except that estimated expenditures and
proposed appropriations for such year for the legislative branch
of the Government and the Supreme Court of the United States
shall be transmitted to the President on or before October 15 of
each year, and shall be included by him in the Budget without
revision;
[e] (6) estimated receipts of the Government during the
ensuing fiscal year, under (1) laws existing at the time the Budget
is transmitted and also (2) under the revenue proposals, if any,
contained in the Budget;
[f] (7) actual appropriations, expenditures, and receipts of
the Government during the last completed fiscal year;
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[g] (8) estimated expenditures and receipts, and actual or
proposed appropriations of the Government during the fiscal year
in progress;
[h] (9) balanced statements of (1) the condition of the Treasury
at the end of the last completed fiscal year, (2) the estimated
condition of the Treasury at the end of the fiscal year in progress,
and (3) the estimated condition of the Treasury at the end of the
ensuing fiscal year if the financial proposals contained in the
Budget are adopted;
[i] (10) all essential facts regarding the bonded and other
indebtedness of the Government; and
[j] (11) such other financial statements and data as in his
opinion are necessary or desirable in order to make known in all
practicable detail the financial condition of the Government.
(b) The amounts of proposed appropriations referred to in sections
201' (a) and 203 of this Act shall, to the maximum extent deemed desirable
and practicable by the President, be determined on an annual accrued
expenditure basis.
"Annual accrued expenditures" shall relate to goods and services to be
received in a fiscal year, advance payments, progress payments, and such
other payments as are authorized by law to be made in such fiscal year.
'This subsection shall not apply to appropriations made specifically
for the payment of claims certified by the Comptroller General and of
judgments; appropriations for the refund of Federal taxes and of other
moneys erroneously received and covered into the Treasury of the United
States; appropriations made by private relief Acts of Congress; appro-
priations for the payment of interest on trust funds; revolving funds
or appropriations thereto; appropriations for the payment to former
members of the armed forces, their dependents and beneficiaries, of any
benefits to which they are entitled by reason of military service; appro-
priations for the payment of pensions and annuities; appropriations for
the payment of any obligation of the United States for which liability is
fixed by treaty; and other appropriations or funds analogous to the fore-
going.
(c) The conversion to the use of annual accrued expenditures for stating
proposed appropriations in accordance with section 201 (b) of this Act
shall be accomplished in such manner and at such times as may be deter-
mined by the President.
(d) As of the end of each fiscal year, the excess of any appropriation
or , fund made on an annual accrued expenditure basis over the accrued
expenditures under such appropriation or fund shall lapse, unless there-
after provided otherwise in an appropriation act or other law. Any
remaining balances of each such appropriation or fund shall be merged
with any appropriation or fund made for the same general purpose for
the ensuing fiscal year and shall constitute a single account.
SEc. 216. (a) Requests for regular, supplemental, or deficiency ap-
propriations which are submitted to the Bureau by the head of any
department or establishment shall be prepared and submitted as the
President may determine. in accordance with the provisions of section
20 L.
(b) The requests of the departments and establishments for appropri-
ations shall, in such manner and at such times as may be determined by
the President, be developed from cost-based budgets.
(c) For purposes of administration and operation, such cost-based
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subordinate units. Administrative subdivisions of appropriations or
funds shall be made on the basis of such cost-based udgets.
BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950
SEc. 106. The head of each executive agency shall, in consultation
with the Director of the Pureau of the Budget, take whatever action may
be necessary to achieve, insofar as is possible, (1) consistency in accounting
and budget classifications, (2) synchronization between accounting and
budget classifications and organizational structure, and (3) support of
the budget 3ustiiieations by information on performance and program
costs by organizational units.
SEC. 113. (a) The head of each executive agency shall establish
and maintain systems of accounting and internal control designed to
provide-
(1) full disclosure of the financial results of the agency's activities;
(2) adequate financial information needed for the agency's manage-
ment purposes;
(3) effective control over and accountability for all funds, property,
and other assets for which the agency is responsible, including appro-
priate internal audit;
(4) reliable accounting results to serve as the basis for preparation
and support, of the agency's budget requests for controlling the
execution of its budget, and for providing financial information
required by the Bureau of the Budget under section 213 of the Budget
and Accounting Act, 1921 (42 Stat. 23);
(5) suitable integration of the accounting of the agency with the
accounting of the Treasury Department in connection with the central
accounting and reporting responsibilities imposed on the Secretary
of the Treasury by section 114 of this part.
(b) The accounting systems of executive agencies shall conform to
the principles, standards, and. related requirements prescribed by the
Comptroller General pursuant to section 112 (a) of this part.
(c) As soon as practicable after the date of enactment of this subsection,
the head of each executive agency shall irc accordance with principles and
Standards prescribed by the Comptroller General, cause the accounts of
such agency to be rrzaintained on an accrual basis to show the resources,
liabilities, and costs of operations of such agency with a view to facilitating
the preparation of cost-based budgets as required by sectic,n fd16 of the
Budget and Accounting Act, 1921, as amended. The accounting system
required by this subsection shall include adequate monetary property
accounting records as an integral part, of the system.
SEC. 118. As used in this part, the term "executive agency" means
any executive department or independent establishment in the execu-
tive branch of the Government but (a) except for the purposes of sec-
tions 114, 116, and 119 shall not include any Government corporation
or agency subject to the Government Corporation Control Act (59
Stat. 597), and (b) except for the purposes of sections 111,113 (c), 114,
and 116 shall not include the Post Office Department.
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12 IMPROVE BUDGETING AND ACCOUNTING PROCEDURES
SECTION 3679, REVISED STATUTES (ANTI-DEFICIENCY ACT)
(g) Any appropriation which is apportioned or reapportioned pur-
suant to this section may be divided and subdivided administratively
within the limits of such apportionments or reapportionments. The
officer having administrative control of any such appropriation avail-
able to the legislative branch, the judiciary, or the District of Co-
lumbia, and the head of each agency, subject to the approval of the
Director of the Bureau of the Budget, shall prescribe, by regulation,
a system of administrative control (not inconsistent with any ac-
counting procedures prescribed by or pursuant to law) which V shall
be designed to (A) restrict obligations or expenditures against each
appropriation to the amount of apportionments or reapportionments
made for each such appropriation, and (B) enable such officer or agency
head to fix responsibility for the creation of any obligation or the
making of any expenditure in excess of an apportionment or reappor-
tionment. In order to have a simplified system for the administrative
subdivision of appropriations or funds, each agency shall work toward
the objective of firy;ancing each operating unit, at the highest practical level,
from not more than one administrative subdivision for each appropriation
,or fund affecting such unit.
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