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December 9, 2016
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July 24, 2000
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May 5, 1960
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PDF icon CIA-RDP80-01240A000100140076-4.pdf334.97 KB
Approved For Release 2001/09/04: CIA-RDP80-01240A000100140076-4 May 5, 1960 MEMORANDUM FOR THE FILE On April 13, 1960, Messrs. Abbadessa, Pahl and I met with Col. L. K. White, Deputy Director for Support, Central Intelligence Agency, and his associates to discuss the progress of our preliminary review at Central Intelligence Agency, which to date indicates that we might not have sufficient access to records to make a reasonably satisfactory comprehensive audit. Mr. Pahl has prepared a more complete memorandum on this meeting, which memorandum is on file in his office at Central Intelligence Agency. The discussions of CIA representatives may be summarized as follows. 1. That access to any matters having to do with covert operations would be denied under their interpretation of the Director's letter to the Comptroller General dated October 16, 1959, and the reply by the Comptroller General dated October 21, 1959. 2. Under this interpretation we would have no access to the organization responsible for the covert activities, nearly complete access to the interpretive and similar activities, and access only in part in the Support area. 3. Col. White suggested we concentrate our review on the interpretive and similar activities, at least at the outset (not acceptable to me since our prime objective is to determine whether we can make a comprehensive-type audit). Limit our staff to about three or four members. Bureau of the Budget representatives, in review of budgets, have more extensive access than we will have ,.because they are a part of the Executive Branch and therefore denial to us is essentially "executive privilege". ;.',In conclusion, we will continue our preliminary reviews to determine whether we can make a comprehensive-type audit at Central Intelligence A964 ; $y. For this purpose one additional staff member will be assigned to vrk with W. Pahl. At such time as we make a determination more definitive objectives will be reached. :,Eamevt ?o. T. Sa,muelsoz A'iJ!J Vf VfW3 d c. esit by CIA has A. T. Samuelson Director Civil, Accounting and Auditing Division 5 14L`'s 3 ., i ~~~ pptiro segJ-p- glease 2001/09/04: CIA-RDP80-01240A000100140076-4 Ahk Approved For Release 2001/09/04: CIA-RDP80-0124OA000100140076-4 UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON 25, D. C. CIVIL ACCOUNTING AND AUDITING DIVISION April 20, 1960 MEMORANDUM TO THE F Q Messrs. Samuelson, Abbadessa and Pahl, CAAD, met with CIA repre- sentatives at 4:00 PM, April 13, 1960 to discuss the status of and problems encountered in the GAO audit of CIA activities. Colonel White, Deputy Director for Support, H. Gates L11yd, Deputy to the Deputy Director for Suport, E. H. Saunders, Comptroller, CIA, and Colonel White advised that Mr. Abbadessa's clearance had been granted giving him access to matters'developed in the GAO audit of CIA activities to the extent necessary fro Mr. Abbadessa to dis- charge his responsibilities as Deputy Director, CAAD. Mr. Samuelson stated that he understood that there appeared to be substantial differences in opinion as to the extent of the limitations placed on the audit by the Director of Central Intelli- gence. He stated it was his understanding that GAO would have acess to the organizational structure of the entire Agency, and to the policies, procedures, and practices of the entire Agency, but that any verification work would have to be restricted to the so- called "-ouohered" side of the house. represented CIA in the discussion, are paid out of "vouehered " funds. Colonel White advised that it has always been the CIA intent that GAO would not have any access to the clandestine services or the activities of the support units that are in support of the clandestine services. GAO access to the organizational structure of the Agency and to the Agency policies, procedures and practices would be limited essentially to those activities that are paid out of "vouchered" funds, or to aetiti$ies that support activities that general discussion of the GAO audit approach followed. that CIA has placed on the audit has created many problems. A and use aspects of the procurement actions. Mr. Samuelson described in general .terms the usual audit approach that is made by GAO, and stated that the limitations but would be precluded from checking the requirements, de.livery.,_ Mr. Saunders, stated that the CIA was constantly striving to place as much of the expenditures on the "vouchered" side of the house as possible and that there were many contracts such as for certain radio equipment that are charged against "unvouchered" allotments, but are paid on the "rouchered" side of the house. G, Q_; would have access to theses payments and the related contracts, Approved For Release 2001/09/04: CIA-RDP80-0124OA000100140076-4 r -4 ,. s* Approved For Release 2001/09/04: CIA-RDP80-01240A000100140076-4 Colonel White stated that his concept of an expansion of the GAO audit would be to make a comprehensive audit of the activities under the direction of the Deputy Director for Intelli4ence (DDI). He stated that basically the GAO voucher audit had been limited to DDI expenditures. At the time of the agreement to attempt to ex- pand the GAO audit, Colonel White's thinking was that GAO would -expand from a voucher basis to a comprehensive basis in the same DDI area that bad been previously subject to audit. He suggested that we might want to consider this approach rather than the present approach through the support areas (DDS) under his direction. Colonel White stated that in the present audit approach GAO has selected the most limited area that we will have access to in CIA. In reality GAO is trying to expand its audit into am "unvouchered" area, because the activities of the support units under his direction are principally in support of the clandestine activities, or the office of Communications. Although GAO could examine the policies and procedures under which such procurement takes place, practically all of the contracts entered into for these two groups could not be examined by GAO. Colonel White gave a quick rundown of the DDI organization, including theifunctions and numbers of personnel involved, and he expressed the opinion that GAO would have almost complete access to the DDI activities -- perhaps as mrch as 99 percent of the DDI operation could be examined in the course of the GAO audit. Mr. Samuelson stated that to attempt a survey and comprehensive audit of the DDI area would require a rather substantial audit staff. He stated further that he didn't know whether it would'be adivsable to staff the audit to such an extent when there were such substantial questions as to the audit contribution that might be made under the present audit restrictions. He stated that initially he had planned to assign a somewhat larger staff than just Mr. Pahl, but that with the present interpretation on the audit access, the complexion of things had changed. Colonel White stated that it was his hope that for security reasons the .+AO audit staff would be kept relatively small - say to three or four men - and the staff would not be changed. He cited the CIA experience with the .iureau of the Budget. The Bureau has limited their ersonnel involved in the formulation and execution of the CIA budse to two or three people of relatively high calibre and these people have remained on the assignment without change. Mr. Samuelson stated that consideration would be given to the audit of DDI, but initially we would proceed in the area we are presently in in the Office of Logistics. He stated that we would certainly have to obtain more knowledge of the support activities before attempting any review of the DDI activities. Colonel White stated that CIA would be pleased to have GAO make this approach, but he r iterated that, because we would be in areas where the ac- tivitie re alma t wholly in support of clandestine activities, CIA officials would have to constantly raise the."red flag" where our audit touched on the sensitive clandestine activities. Approved For Release 2001/09/04: CIA-RDP80-01240A000100140076-4 Approved For Release 2001/09/04: CIA-RDP80-01240A00Q100140076-4 In connmaction with the elearanae of additional al personnel for assignment to the audit tat at IA, Colonel White advised that the clearance would be greatly expedited where the person already had bad a full field invpstiation and clearancesuoh as is entailed in the ,;ranting of the AEC "q" clearance. Without such prior clear.. ance, Colonel White estimated that it would take' three 'months or longer to obtain the clearance. Mr. Abbadessa stated tat in the audit of a Govennnent Agency GAO placed reliance, where possible, on'the work of the' internal audit staff of the Agency, to enquires= whether the work of the CIA internal audit staff would be' available* for review and *evaluation by GAO. Colonel White stated that just`=bout the entire effort of to CIA audit staff under :gas been in the area of clandestine activities, and ere ore their'workiig papers and repor@jwould not be available for GILO review. In the 'audit of support activities such as procurement,` the internal axiditors review, tests, and reporting would not be segregated as to sensitive and non-sensitive activities, and, therefore, could not be available for GAO review. Mr. Samuelson advised that in approaching the audit of the CIA he wanted to determine the extent to which we would be permitted to audit so that no one would misunderstand the scope and.extent of the audit. He stated further that if called upon by the Kildgy Committee he would have to advise of the severe limitations on the audit. Colonel White stated that CIA has spoken with the Committee from time to time in general terms of the GAO audit of'CIA activities, and the Committee has always understood that CIA would not permit GAO access to the clandestine activities. advised that the Agenc;, regulations setting forth the policies of the Office of tooistics nad'been reviewed, cleared and made available to Mr. Paht. Colonel stated that there were three or four instances in these regulations that dealt with oiecies and procedures of clandestine activities but that no had been with- held. He slated that he would rather that we have the whole package with the understanding that we could gd no further wits those dealing with clandestine activities. E#e stated 'further that the remainging issuances of Agency regulations would be reviewed and made available to the GAO at it staff to the extent that security' will permit, ugene 1. Pahl Supervisory Accountant . , 4-1)"t C/A etas .(r t yT- ar...1; ` - ' - I -$ CJLA~+.i JJ.pJ.,.d c C f J CA L-Lu ease 2001/09/04: CIA-RDP80-01240A000100140076-4. .r