CONCLUSIONS AND RECOMMENDATIONS ON WHICH ACTION HAS BEEN COMPLETED OR WHICH ARE IN PROCESS OF BEING ACTED UPON

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP62-01094R000500010008-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: November 17, 2016
• Document Release Date: March 24, 2000
• Sequence Number: 8
• Content Type: REGULATION

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TAB A
CONCLUSIONS AND RECOMMENDATIONS ON WHICH ACTION
(iAS BEEN COPMRYLETED OR WHICH ARE IN PROCESS OF
BEING ACTED UPON
The Office of the Comptroller has been commended for the continuing
progress made in carrying out its responsibilities so efficiently.
25 gI1LUSION AND RECOMMENDATION NO. IF
In addition to revising regulations pertaining to advances, the
Office of the Comptroller has been actively engaged in reducing delin-
25X1A quencies. After due notice, payroll deductions are being effected in=those
25X1
25X1A
For the March DCI Staff Meeting the Comptroller presented to the
Deputy Director (Support) an item relating to delinquent advances for
inclusion on the DCI agenda. The Deputy Director Central Intelligence
concluded that the subject of delinquent advances was not a proper sub-
ject to be placed on the agenda for the Director's Staff Meeting. The
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action taken by the Comptroller complied with the recommendation of
the Inspector General that the Director place on the agenda of his
Staff Meeting periodically the subject of delinquent advances.
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CONCLUSION AND RRCOIYIMENDATION NO. 5
The recommendation that the Director of Central Intelligence should
not exempt procurement contracts between the Agency and private firms from
administrative audit meets with the full approval of the Deputy Director
(Support) and the Office of the Comptroller. It is further recommended
that most, if not all, research and development contracts be placed in
the same category. It is not believed necessary to write a specific regu-
CONCLUSION AND RECOMMENDATION NO. 9
The subject of integration of planning and programming with the
budget is a long-term problem on which work has been progressing for
over two years and one which will require continuous work in the future.
The PPC-DD/P has been reworking the program planning papers. The
Office of the Comptroller has been actively discussing these papers as
they are developed with the view of obtaining the maximum of coordina-
tion between planning and budgeting. The objectives of this coordination
effort has been to assure the use of uniform categories and classifications
in planning, programming, and budgeting with the objective that informa-
tion furnished to the Director through planning papers will be in the same
terms as will later be reflected in the budget presented to the Bureau of
the Budget and the Congress. In addition, a series of meetings have been
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CONCLUSION AND RECOMMENDATION NO. 11
The preparation and release of a Budget Manual is now in process.
One section of a Budget Manual has been released to the Regulations
Control Staff and two additional sections are now in the process of
preparation and it is estimated the manual will be completed by 15
November 1955.
CONCLUSION AND RECOMMENDATION NO. 12
The operating budget procedure has been completely reworked and the
revised procedure is being used in connection with the operating budget
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25 1'Athe fiscal year 1956. The Comptroller's Office developed. instructions 11. ' --- ---~ .I_i.. +h---- P sac ^i~+.
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It is the view of the Comptroller's Office that present regulatory
issuances adequately provide that funds will be obligated and expended
f
in conformity' with operating budgets, as amended during the course o
the year.
CONCLUSION AND RRCOM MINDATION NO. 16
a. and b. A comprehensive analysis of the financial practices of
all field stations is being prepared every four months. This analysis
C. c. Such procedures have been developed and distributed to field
tons. Improvement and refinement of such procedures is a continuing
ss.
e. This recommendation was carried out last year, Specific attention
has been given to the incorporation of fiscal subjects in operations courses
and there have been assigned three individuals to the Office of Training
who are working on a full-time basis on the development of such material
and the conduct of the Office of Training courses involving financial and
other administrative subjects.
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CONCLUSION AND RRCOR NDATION NO. 24
The Finance Division of the Comptroller's Office has established a
division operating procedure which formalized its "on the job" training
program for division administrative personnel. This procedure establishes
specific responsibility for the various phases of "on the job" training
to be given by the Finance Division and requires the completion of a
Trainee Check list at the completion of training to assure that training
appropriate to the assignment has been given and to provide an evaluation
of the aptitude and interest of the trainee.
Following completion of "on the job" training by an employee, a
memorandum is directed to the Area Division concerned indicating the
scope of the training given and the evaluation of the employee's
apparent ability to discharge finance responsibility of the type con-
templated. To date,.in no instance has an Area Division indicated
dissatisfaction with the "on the job" training given its employees by
Finance Division. On the contrary, the Chief of Administration and
Personnel Officer of the Division which has furnished over half the
trainees, have indicated that they are pleased with the program.
It is agreed that DD/P should budget the training and processing
time of administrative personnel to insure proper training by the
Finance Division and every effort will be made to assume that this
25Aaccomplished.
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The Comptroller's Office is proceeding on such selections in
accordance with Agency Regulations. In the meanwhile, the Comptroller
is developing general long-range plans which will be consistent with
the Agency Career Service Program, and he does have realistic plans for
the replacement and rotation of individual employees between headquarters
and overseas stations and the development and utilization of the talents
and skills of all of his employees through job rotation and training.
CONCLUSION AND RECOMMENDATION NO. 28
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CONCLUSION AND RECOM2ENDATION NO. 30
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CONCLUSION AND RECOMMENDATION NO. 31
The items contained in the "Discussion" section of the Inspector
General's report concerning fiscal management procedures and administra-
tion of the Office of the Comptroller on which action has been completed
or is in process are included below by paragraph number as they appear
in the report.
a. Paragraph IV. D. (2)
A regulation has been prepared by the Office of the Comptroller and
is now in process of coordination which will require that financial
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statements submitted by projects to the Agency be supported by a
certificate signed by the responsible operations officer and approved
by the division approving officer attesting that the latter has (a)
reviewed the financial reports submitted by the case officer; (b)
approved all expenditures as having been made in the interest of the
Agency; (c) reviewed the current reports of accomplishment; and (d)
indicated that the continuance of the project is warranted. In
developing this regulation the recommendation of the Inspector General
that the certificate also include an attestation that the Comptroller
has been notified of changes in the basic administrative plan has been
disregarded inasmuch as the Office of the Comptroller has knowledge
when they are made by participating in concurrences and by receiving
copies of all such changes directly from the Project Administrative
Planning Staff.
b. Paragraph IV. D. (3)
As stated under "Conclusion and Recommendation No. 4" appropriate
amendments to the regulation pertaining to advances have been completed.
by the Office of the Comptroller and have been published by the Regula-
tions Control Staff or will be published very soon.
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e. Paragraph V. A. (1)
.
The Comptroller has approved the revision of the responsible-and
additional personnel requirements of the Budget Division including the
establishment of branches and a formal internal organizational pattern
for the Division. These proposed revisions are being reviewed by the
Office of Personnel and will be implemented by the Comptroller within
the very near future.
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f. Paragraph V. A. (4)
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The Budget Division, Office of the Comptroller is in the process
of completing evaluation reports for all of its employees and it is
contemplated when the branch-type of organization is formalized the
supervisor of each branch will thereafter prepare personnel evaluation
reports.
25XTAragraph V. A. (6)
h. Paragraph V. B. (1)
A memorandum was forwarded from the Office of the Comptroller to
the Office of Personnel on 30 November 195+ requesting an audit of all
positions in the Fiscal Division. This audit has been completed and
has resulted in llllllllllllllupgraded.
i25'graph V. B. (-)
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A memorandum was sent from the Office of the Comptroller to the
Office of Personnel on 30 November 1954 requesting an audit of all posi-
tions in the Payroll and Travel Branch, Finance Division. The Personnel
Office has delayed making the requested audit until the Management Staff
25X1A completes a survey now in process. It is estimated that the Office of
Personnel will commence their survey approximately 8 August 1955.
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Paragraph V. C. (4)
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CONCLUSION AND RECOMMENDATION No. 6
The Deputy Director (Support) and the Office of the Comptroller have
felt for some time that the full potential of program analysis was not
being utilized, and this point was emphasized at the time the Program
Analysis Staff was established in the Comptroller's Office. We believe
that a comprehensive system of program analysis requires the integration
and combination of quantitative data which can be compiled by the
Comptroller's Office with the qualitative data which should be compiled
by the operating offices.
The establishment of a program for the analysis of activities -
financial and substantive - on an Agency-wide basis has the unqualified
support of this Office. We are more than willing to assist in any
program for the integration of the financial and statistical analyses
with the operational analyses of Agency substantive operations so that
an effective Program Analysis may be instituted on an over-all Agency
basis. The Program Analysis Staff, Office of the Comptroller has been
attempting to make constructive analyses of projects and other activities
but has found that security and operational objections are raised to
examining projects and activities in current operation and that, therefore,
analysis has been confined principally to liquidated projects and such
analyses are obviously of limited value.
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This Office has prepared a memorandum (attached) for your signature
to the Special Assistant to the Director for Planning and Coordination
establishing a committee consisting of representatives of the DD/S,
DD/I, and DD/P and requesting the Special Assistant to the Director
for Planning and Coordination to organize the committee, act as chair-
man, and submit recommendations to the Director for maximum profitable
utilization of Program Analysis throughout the Agency.
CONCLUSION AND RECOtVIENDATION NO. 14
The necessity for and advantages of handling of FI projects on a
fiscal year basis is recognized by the FI Staff and that Staff has in
conjunction with the Comptroller's Office issued procedures which require
that projects will be broken down and approved by fiscal year. Such
'
s Office as a
fiscal year approvals to be furnished the Comptroller
guide and limitation in the allotment of funds on a fiscal year basis.
However, no progress has been made with respect to the problem of
further grouping of small FI projects so that single allotments can
be made to each field station to cover all of these small operations.
Mtp,~> SION AND RECO1. NDATION NO. 19
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25LUSI0N AND RECOMMENDATION NO. 25
1C1USION AND RECOI NDATION NO. 29
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CONCLUSIONS AND RECOMMENDATIONS ON WHICH THE
DEPUTY DIRECTOR (SUPPORT) AND THE
COMPTROLLER DO NOT CONCUR
CONCLUSION AND RECOMMENDATION NO. 8
The proposal to establish a Director's Budget Advisory Committee
involves a question concerning the character of review of all phases of
budget from the first brief examination of preliminary estimates to the
final review and approval of specific operations with an attached autho-
raization for a specific amount of money. Thus, it will be necessary to
evaluate the approach made in the Agency to the budget review process.
Basically, the policy has been to review the budget more critically in
each succeeding step in the budget process. This process begins with
the cursory review of preliminary estimates prior to the DCI policy
meeting with the Director of the Bureau of the Budget (See comments
on Recommendation No. 15) and culiminates in the extensive review,
including a considerable amount of staff work preparatory to considera-
tion and recommendation by the Project Review Committee and final
approval by the Director on the proposed projects and programs. It is
believed that this progressively critical review is appropriate and.
effective for the type of operations being administered by CIA. It
should be noted that one of the criticisms of budgeting in Government
has been the emphasis on the formulation stage and the lack of emphasis
on the execution phase of the budget. CIA has put emphasis on the
execution phase. It is believed that maximum attention should be given
to this last phase by the top administrative and program officers in
the Agency.
The membership of the recommended Director's Budget Advisory Com-
mittee is substantially the same as that of the Project Review Committee.
In view of the administrative and operating responsibilities to the
individuals involved, the assignment of additional responsibilities
to these individuals could only result in the lessening attention given
to other areas of their responsibilities. The most important budget
review process is the final decision as to whether an operation should
or should not be initiated or be continued at the same or a higher or
lower level. This decision is made on a project by project, program by
program basis by the Project Review Committee. If any additional time
is available to the members of the Project Review Committee, it is
believed that a more searching review of operations by the Project
Review Committee would be most beneficial to the Agency. The Budget
process involves the formulation of the budget, which constitutes a
compilation of very tentative plans. Before funds are made available
by allotment for execution of the budget, however, a detailed review
is made of individual proposed operations prior to authorizations of_
their initiation or continuance. It is the belief that, from a control
point of view, it is much more important to have careful, complete, and
thorough top-side review of operations at that time than to place emphasis
on review of the tentative budget plans.
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It may be of interest to note that the Department of State has
discontinued the use of the Budget Committee approach. This Office
was informed that the Committee, when in operation, only reviewed the
budget from a policy point of view. The Department of State's present
budget process is about the same as that of CIA with some slight devia-
tions.
The Department of Defense does use the Committee approach, e. g.,
the Air Force Budget Advisory Committee is chaired by the Director of
the Budget who is organizationally responsible to the Comptroller of
the Air Force. The Committee consists of the following officials:
Assistant for Programming, DCS/O
Director of Operations, DCS/O
Assistant for Material Program Control, DCS/M
Director of Personnel Planning, DCS/P
Assistant for Development Programming, DCS/D
Director of Budget, DCS/C
Assistant Chief of Staff for Reserve Forces
The Asst. Secretary of the Air Force (Management) without vote
The Under Secretary and the Assistant Secretary (Material) of the
Air Force or their representative -- to be invited as observers
when matters under their cognizance are to be considered by
the Budget Advisory Committee.
If a Budget Review Committee is established, it should be specifi-
cally understood that the members thereof will devote the time required
from their other duties and responsibilities to review the estimates and
justifications in more or less detail down to the Division level, which
will require hearings every day for approximately a two-week period.
Otherwise, the Committee will become a bottleneck which will result in
delayed budget preparation and presentation to the Bureau of the Budget.
A review of past budget history within this Agency will reveal that
at one time the budget was reviewed by a committee appointed by the
National Security Council and at another time by the Project Review
Committee. In fact, at one time the Agency regulations required the
submission of unvouchered estimates to the Project Review Committee.
Based on the experience cited above this Office and the Office of
the Comptroller do not agree that a Budget Review Committee would add
=to the budgeting process in the formulation and preparation stage of
the budget. We do believe, however, that the Project Review Committee
F does serve a useful and essential purpose in reviewing proposed specific
operations prior to their institution. This constitutes a policy review
and, in addition, a substantial budget review during the execution stage
of the budget.
25i9ALUSIOIT AND RECOMMENDATION NO. 13
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SUBJECT: Financial Responsibility of Individuals
1. Several instances have recently been brought to my attention by
the Auditor-in-Chief which indicates that there may be certain employees
who are not exercising the degree of financial management over projects
or activities under their control which I consider desirable and necessary
to the conduct of sound operations, and at the same time insure that
official funds are properly utilized and accounted for. I am fully
cognizant of the difficulties posed to formal accounting because of the
necessity of security and cover and the proper protection of sources and
identities. This fact, however, increases rather than diminishes the
reliance which must be placed. upon operating officials to exercise
managerial skill, discretion, and sound judgment, and to render objective,
accurate and prompt reports pertaining to financial activities under their
control.
2. It is essential that the Agency be able to rely upon the integrity,
intelligence and ability of the operating officials doing the job. Present
Organization regulations are designed to give operations officers and
station chiefs adequate discretionary authority respecting the financial
management of projects under their jurisdiction, and to permit maximum
flexibility which is desirable in conducting the type of operations in
which this Organization is engaged. It is not my desire or intention to
deprive operations officers of such discretionary authority and substitute
a set of inflexible arbitrary restrictions, because I believe that it is
largely by means of better men rather than highly refined regulations
that effective financial management is likely to be attained.
3. It is essential, however, that all employees understand and
adhere to the substantive provisions of Organization Regulations. Your
at~+gn is specifically directed to the following regulations.
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11.. I want to make it clearly understood that I regard the failure
or refusal of any employee of the Agency to pr 1, 7uti41ize or protect
Agency assets, or to report objectively, factually, an promptly on the
status and. specific disposition of Agency funds as a breach of trust.
All supervisory officers of the Agency are hereby directed to take
prompt and positive disciplinary action whenever such breaches of trust
are detected.
5. All operations officers of the Agency have received training
and have acquired experience in factual and objective reporting on
intelligence matters. If they will use the same degree of integrity
and objectivity in reporting upon financial matters, as is required in
intelligence reporting, we will have established the basis for a sound
financial accounting system which will best serve the Agency's interests.
ALLEN W. DULLES
Director
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JUL " 5 195
MEMORANDUM FOR: Deputy Director (Plans)
SUBJECT : Study of Blanket Waivers With Respect to
Projects for Purpose of Recommending to
Director the Method for Handling Existing
and Future Projects of This Type
1. The "Survey of the Office of the Comptroller" by
the Inspector General recommended "The DD/A and DD/P should
appoint a joint committee charged with the responsibility for
making a detailed study of the problems and requirements of
projects which have been given blanket waivers and recommend
to the Director a method of handling existing and future pro-
jects of this type."
2. If you concur, it is requested that you advise the
Comptroller as to those officers whom you wish to represent
you on this committee. I have asked him to chair this committee
to engage in the study outlined, and prepare appropriate recom-
mendations for the Director.
/5r
L. K. WHITE
Deputy Director
(Support)
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