(Sanitized) RESERVE FUND
Document Type:
Collection:
Document Number (FOIA) /ESDN (CREST):
CIA-RDP80-01240A000400100015-2
Release Decision:
RIPPUB
Original Classification:
S
Document Page Count:
4
Document Creation Date:
December 9, 2016
Document Release Date:
September 18, 2000
Sequence Number:
15
Case Number:
Publication Date:
December 3, 1954
Content Type:
MEMO
File:
Attachment | Size |
---|---|
CIA-RDP80-01240A000400100015-2.pdf | 439.54 KB |
Body:
25X1A
Approved For Release 2001/09/06 : CIA-RDP
oGs- HAS REVIEWED.
Chief, Techn
1 Accounting Staff
Member, Technical Accounting Staff
Fun&
000400100015-2
3 Doceber 1954
1, The subject regulation dated 19 July 1950 authorised the Chief,
Special Support Staff, to establish a reserve fund for the purpose
ding against:
a. Curtailment or elimination of sources of foreign currencies.
b. Losses or depreciation of foreign currencies on hand.
c. Urgent operational used for sterile U* S. dollars.
d. Urgent operational need for gold or jewele.
2. The Comptroller has suggested preparation of a current regulation
outlining policy, procedure and responsibility with respect to the
Reserve Fund.
3. A review of data compiledRegulations Control Staff in con-
25X1A nection with promulgation of although far from complete,
revealed the following information.
4. An unsolved prOblem was the budgetary disposition of funds invested
in foreign currencies, whether or not the amount so invested should be
considered unexpended appropriations to be returned to the Department of
the Treasury at the close of each fiscal year and charged against the
succeeding year's appropriation and allocation to *overt offices. A
memorandum to the Xlecutive from the Assistant General Counsel for
Obvert Affairs dated 15 Merch 1950, reads in 1i-it-I1follows:
of your memoranda t you refer to the still
sition to be made of foreign
es rema-iniratoi hand at the end of each
problem has been the subject of several
with the General Accounting Office.
085 raised the problem in 1944 with lir. Lindsey Marren,
the Comptroller General. In the file of this office entitled,
'Foreign Currency llabangel (No. 230 A), there is a copy of a
i/semorandusa, dated 3 June 1944, from the General Counsel to the
Acting Director. That 'memorandum reports the results of a conference
held on 1 June 1944 between the General Counsel and the Comptroller
General. The problem of disposition of foreign currency balances
at the end of fiscal years was discussed in considerable detail.
It was agreed by all concerned that OSS funds used to purchase
foreign currencies for the purposes of conducting clandestine opera-
tions in foreign countries should be considered as having been
Approved For Release 2001/09/06 : CIA-RDP80-01240A000400100015-2
ifigNErma
25X1A
25X1A
Approved For Release 2001/09/06 : CIA-RD
000400100015-2
'expended' at the time of such purchases,re would be no
need for any readjustment with respect to such funds between the
appropriations for different fiscal years. It was pointed out,
however, that an accurate profit and loss account should be
maintained at the end of the fiscal year, enemy loss could be
viewed as an operating expense of that fiscal year. Any net
profit resulting should be covered into the Treasury as a mis-
oellansous receipt. That could be done once a year at the close
of the fiscal year. It was felt by Mr. Warren that the principal
thing to be avoided was the use by OBS of the net profits.
b. In the above-mentioned fil, of this office, there is also
7$ copy of a memorandum, dated 19_40reember 2:6A eoncerning the same
problem. That memorandum is addressed to Director, CIG, fros
the General Counsel. The results of a conference with W. Fisher,
General Counsel of the General Accounting Office are reported.
Mat conference was arranged in order to reaffir: the principle
set forth in the previous discussion with Kr. Warren. W. Fisher
generally concurred in the principle that vten dollars mere used
to premise fOreign currencies they could be considered as expended
at the ties of purchase. The matter of good faith was brought out.
It was pointed out that any large purchases toward the close of a
fiscal year would give rise to the inference of intent to supple-
ment succeeding fiscal year appropriations.
4. The'purpose of the conferences mentioned above was not to
official ruling of the General Accounting Office but to
advice and guidance of individuals who were eminently
to advise on such lettere. In view of the agreements
softie. is of the opinion that the principle of not
year-end appropriation adjustments for foreign currencies
on hand is veil establiehed and needs= further examination at
this time from a legal standpoint.*
A memorandum dated 17 J 0 signed by George E. Miloon, Chief,
ial Support Staff, ?Id a meeting for discission of the proposed
attoI3., then in the formative stage, and referred to certain individuals
tend. The then Chief of 822 and another of those mentioned
um are unable to furnish any information at the present
with respect to the fund contemplated by the Regulation.
6. A memorandum dated 21 July 1950 from k, Actinfigutive
to the Director of Central-InteiIignce, attaching changes in reads
in part:
3. I wish to point out for your special attention
'Reserve Fund.' We have on hand, carried over from J and not 25X1A
obligate& or expended, a total of $4,031,000 in cash, gold and
jewels which has never been reported to the Bureau of the Budget,
Genera Accounting Office, or to appropriation committees of Con-
pees. This sum is in excess of any appropriations made for CIG
or CIA, and has neither been augmented from such appropriations nor
used for augmentation of appropriated funds."
Approved For Release 2001/09/06 : CIA-RDP80-01240A000400100015-2
- 2
Approved For Release 2001/09/06 : CIA-R
A000400100015-2
25X1A 7. Under date of 24 July 1950AP perltY Chief, Finance
Division addressed a memormaife to the Budget Officer describing the
it.. of appearing an CIA books as a credit to predecessor
25X1A . organisations. This paper vas the basic memorandus in addressing a
memoranda dated 10 August 1950 from the Director of Central Intelligence
to Mr. William F. Schaub, Bureau of the Budget, requesting guidance in
the dispositioe of ti* foregoing amount.
v/Ii. A Memorandum for the Record dated 18 August 1950, signed by R. R.
Sunder*, Budget Officer, reads; 25X1A
25X1A
25X1A
2X1A
5
1A
11111111111 finance Division, and the undersigned met Mt.
and explained the circumstances under which the amount of 0,028,000
was accumulated from predecessor organisations, who stated he would
discuss the subject further with Mr. Scheib and advise when a deci-
sion had been reached. Later in the day Mr. Per-Lee advisol that the
establishment of the amount as Reserve fund bed been informally
approved and that a notation to that effect had been placed on the
Director's mosorandum which would be retained in the Bureau's files."
dated 19 July 1950 was issued on 23 August 1950.
1.951 a second was issued, rescinding 2.0.c(3)
Funds Regulation. Jo information is in the Regulations
file to explain this duplication of It does,
the opinion of Budget Division persoaahl 25X1A
Reserve Fund had been rescinded in the far distant past.
11. Author belief that the subject Regulation has been rescinded is
the fact that the Special Support Staff was succeeded by the Covert
Coordinating Committee, which in turn was succeeded by the Project
Administrative Planning Staff. The latter has no responsibility with
respect to the functions and responsibilities outlined in the subject
Regulation.
12. An ammaination of general ledger account 450 Operating Fund
Aequired fros OSU,* reveals a balance of $4,030,868.30 on 21 March 1950,
and 0,028,168.01 on 19 April 1950? which belences are referred to above
in paragraphs 6 and 7 respectively. However, the account is not a "fund,'
it is an evaluation or swans reserve revealing a credit balance,
Offsetting the amount of net assets taiga over from MU by CIO.
13. The CIC general ledger is not available for inspection having been
sent to the Senoras Center. Audit papers in possession of the Audit
Office indicate the journal entry _recording the net assets taken over
C1G from SOM on 20 October 1946, as set forth hereunder
$2 076,631.04
2.3, 65.26 42,211,996.30
Approved For Release 2001/09/06 : CIA-5 80-01240A000400100015-2
SEC
25X1A
Approved For Release 2001/09/06 : CIA-R
U. S. Do
Dollar Instruments
Advances
Special Commodity Assets
U. II, Dollar Purchases
SOU Oxpenses assumed
by CIG
Accountability for Net
Assets transferred
frms SOU
2.311A000400100015-2
z,117
Atamo,
it
219,219.
313,546.69
145,331.41
14,945.61
$
4310097.77
1,672.13
14. Inasmuch as the situation with respect to carrying stocks of foreign
and domestic currencies at overseas installations has been clarified
since the date on which -se issued,
25X1A the regulation appears to be obsolete and should be rescinded. Flartber-
UM the Agency has established a policy and practice of carrying 'nib-
stantial funds at overseas ',Installations for the purpose of ensuring
continuity of operations, with the knowledge of the Bureau of the Budget,
independent of an authorizing or covering regulation. This function is
one falling within the general responsibilities of the Comptroller, and
25X1A although not specificallly so enumerated in Regulation paragraph
25X1A 3 of Sagniatio41111111 authorises the Comptroller to establish such
speotal accounts and !Ueda, including but not United to . . cached
funds . . stockpiling and exchange Of foreign currencies as are needed
to fetal the mission of the Ammar."
15. In view of the foregoing, it is thewriter', opinion thatME25X1A
is inoperative, not applicable to current procedure, should be resc
and need not be replaced with a current regulation.
16. general Ledger Account No. 400, "Accountability for 'Undo Acquired
from SOU" is in fact donated capital and as such the account might
properly be elininated by transfer of the balance to Account No. 450,
Invested and Donated Capital.'
25X1A
TASALM:jh (2 Dec 54)
Distribution:
Orig. - Addressee
1- TAB Chrono
1 - Deputy Comptroller ?,
1 - TAS Subject
Approved For Release 2001/09/06 : CIA-RDP80-01240A000400100015-2