(Classified) SHORTAGE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-05256A000100090019-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: November 11, 2016
• Document Release Date: September 16, 1998
• Sequence Number: 19
• Publication Date: September 19, 1949
• Content Type: DISP

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VIA: DISPATCH NO.: W
SPECIFY AIR OR SEA POUCH ?1 p
TO : Foreign Branch "M"
Attn.:
FROM : Chief of Station,
DATE: l9 September 1949.
SUBJECT: General -Administrative
Specific = Shortage
REF : 'AST-TT 0085
1. The - financial control account maintained b.v this office consists
of an account to which charges are made for all advances made to . by us and credits
are given for all accountings submitted by M after being approved and vouchered.
All - balances reported by this office are extracts from t1,is account. Theoretical-
ly it should be possible to reconcile all incoming M accountings to this account by
adding to their balances only amounts advanced subsequent to the period for which ac-
counting is made. In practice, due to factors, some of which will. be mentioned, it
has been necessary to add variable "plug" figures to effect such reconciliation, until
it was possible to correct discrepancies involved.
2. In the early -period of ? operations, due to operational necesv?.ty,
we were called upon to make M advances on short notice and in unusual manner? and
places,'which obviously complicated - accounting. In order to facilitate the lat-
ter, several times during an accounting period we would inform . "booickeeper;' of
previous amounts of advances and in some cases advances received in one period wore
not recorded in its report, but in a latter one. Repeated advice of such advances
was furnished and, in retrospect, it would appear that money was either by-pas.:ing
25X1A6a -t'bookkeeping" office or a. Shortage had developed. In all conversations on money
25X1A6a matters, however, no inkling was received of possible discrepancies in funds on ',.and
or amounts received from this office, with exception of a small. advance of
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at that time did not appear to be the most suitable method of settling the discrep-
ancy, in view of instructions received in somewhat similar circumstances to settle
matters locally.
which was repaid without appearing on the _ report. 25X1A6a 25X1A6a
3. As result of abnormal delay, the =report for the period stfim efwent
to that in which a shortage of )800.00 apparently occurred, was not received in the
finance office until about the middle of December 1948, at w?`ich time a possible
shortage would appear likely. Immediate reporting of such likelihood to headgn rters
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4. A short time, tier oAr 1 Normally apprised that e
25X1A6a shortage existed in 1111111111111111h)unds. Conclusions were that the apparent shortage wa6
pert of a general larger one resulting from loose handling of funds, the die-
25X1A6a crepency in th ncial report was probably a typographical error and balances
of funds in thrancial reports were of little significance until their true
status might be ascertained. Investigation of funds was conducted by COS Projects
Control office, which has in the past instructed bases on the -preparation of
projects accountings and reports and the keeping of base funds. Collaboration of
25X1A6a Finance Office in this investigation consisted of furnishing theM account and
25X1A6a subsidiary records to the investigator for use, devising a set of disbursing ac-
counts designed to give the M and M offices better financial control, furnish-
25X1A6a Ing balances of the account as requested and asking that Headquarters return
25X1A6a certain voucher receipts for use of the investigator.
5. Although the point was not specifically mentioned it was the
belief of the writer that before results of the investigation ,.,ere submitted in
25X1A6a final form they would be balanced against the - control account and he would.
participate in their reconciliation. This belief waL strengthened by comment from
headquarters on a preliminary summary of the shortage, which was seen and interpret-
ed as meaning that the net discrepancy found would be transferred to a suspense
account there, which would seem to involve of a voucher in the Finance Office b-sed
25X1A6a on the report of the investigation. With receipt of the - accounting for June 1949,
which was processed around the first of August, changes were found to have been made
in the opening currency balances. questioning revealed that a final report, on which
changes of currency balances had been based, was previously forwarded to headcu~.sters.
Not being listed on the distribution of such report, Finance was not aware of its
completion. After effecting adjustments indicated in this report and using currency
differences found therein as a. reconciling figure, a difference still existed in the
amount of $800.00 and headquarters was forthwith advised of it.
6. Factors contributing to the failure of the report to detect the
shortage of $800.00 appear to be: (1) As base of departure of the investigation there
25X1A6a was taken a presumed balance of the =account as of 1 July 1948 rather than tite
actual beginning of operations in March of that year; (2) Findings of completed re-
25X1A6a port were not reconciled with =control account prior to submission to head