we get direct reimbursement from the other agency, but the large part of it is where they give us money in advance of performing the work.

Senator PAYNE. Now, normally, from what experience I have had in the handling of similar work-I admit I have not had it at the Federal level and I am not aware of the volume you are carrying onbut under normal circumstances the procedure that you are relating here to me normally adds additional steps in accounting practice, in order to be able to handle it on an advance basis, instead of a direct billing and direct reimbursement. But if you say that it does not involve extra work over and above the basic benefits that come to the Department as a result of that method of handling, why, of course, I have no objection to it.

Mr. CHRISTELLER. It might add steps in terms of comparison if we were on a completely reimbursable basis with the other agencies where they would pay us after we perform the work, but our working capital fund is not large enough for us to do that. We could not carry all of the costs pending the receipt of the money from the military. It takes quite a while to collect these bills from the military, if you bill them after the fact. So we are in no position, with a $5 million working capital fund, to carry all of the work and perform the work and bill them after the money has been expended from the fund. So this is the reason that we get the money in in advance under our present setup, and the proposal would merely simplify our handling of these advances.

Senator PAYNE. I may want to talk with the Comptroller General's office a little on that, too, to get their view on that phase of it.

As I understand, then, as far as the Secretary's waiving any charges is concerned, you do not feel that this in any way is going to open up a wide-open proposition of waiver of reimbursements?

Dr. ASTIN. No, sir. As a matter of fact, our appropriation level provides an automatic limit on that, but at the present time we are required to perform services free of charge for State governments. This policy, it is anticipated, will continue except in some special cases where our funds are not adequate to do work which a particular State or local government might wish to have us carry out, and might be willing to pay for it.

For example, fairly recently we have been working with the Los Angeles County area on the smog problem, contributing measurement techniques on the analysis of the constituents of smog.

The county of Los Angeles wishes us to do more work than we were able to carry out under available appropriations and would have been willing to pay for it had we been authorized to accept their money. This would permit that sort of thing.

In general, we will continue the present policy of charging for all services rendered to the public. They would be waived only in special cases where the amount might be trivial, where it would be more expensive to collect something than it would be worth.

Senator PAYNE. Under the present act you have had a set policy which determined that recipients of services must pay the cost of the service, and this gives to the Secretary a discretion as to which one should and which one should not pay; is that correct?

Dr. ASTIN. That is correct; yes, sir.

Senator PAYNE. And you feel it is in the best interests that that sort of discretionary policy be carried out?

Dr. ASTIN. That is correct. This has the support of the Department of Commerce and it is my understanding that the policy which would continue would be substantially the same as at present, except in some special instances where it might be in the Government interest or the public interest to waive a charge.

Senator PAYNE. I do not believe I have any further questions. Do you have any, Mr. Geissinger?

Mr. GEISSINGER. What percentage of your volume is attributable to work for the States?

Dr. ASTIN. I do not recall that figure exactly, but in my recollec tion it is substantially below $100,000 a year.

Senator PAYNE. That would be a very small proportion of your total workload, then?

Dr. ASTIN. Yes, sir.

Senator PAYNE. Isn't that basically because more and more of the States are establishing so-called interviewer standards in their own setup or going to the private agencies, sometimes?

Dr. ASTIN. Well, yes. Most of this stems from our traditional practice in this country of leaving to the States and local governments responsibilities for enforcing weights and measures regulations. The National Bureau of Standards has no enforcement responsibilities or authorities in this connection.

It is, however, our responsibility, as contained in our organic act, to cooperate with these State governments in making replicas of the national standards available to them, and in providing them with information on the best available testing and measuring techniques

These latter two functions we have always done free of charge to the State governments and it is not a heavy load, even though it is a very important load to the-I mean important activity-to the effertive operation of our weights and measures procedures.

Mr. GEISSINGER. Under your present procedure, then, you may charge for services to Federal agencies. Is it the practice to charge in every case, now?

Dr. ASTIN. It is our present policy now to charge other Governmen: agencies for work rendered except in those cases where the job is trivial and it would cost more to make the billing than the job itself was worth, or in cases where it is a cooperative program, where they may be expecting us to make a direct contribution to a project in which we are both interested, and in some of those cases we probably would not charge them.

Mr. GEISSINGER. Well, would it be fair to say, then, that the change in section 7 to make the charging discretionary with the Secretary would not make any practical difference in your operation

Dr. ASTIN. No. It would be a change which would be exercised only rarely and would not make any substantial difference in o present method of operation. We would continue in most cases substantially as at present.

Senator PAYNE. I wonder if you have any comment on whet objection there would be to amending this so that it would s! retain that provision that you would not charge for services render to the State governments as it was in the previous act.

Dr. ASTIN. The only difficulty it would render would be in these occasional instances where a State government might wish us to undertake additional services and we couldn't because of budget limitations, and this would be a case where they would be willing to pay for it.

I would say in general that the policy would not change except in such cases.

Mr. GEISSINGER. Would it be possible to write a provision setting an amount which, if exceeded, would result in a charge to a State agency, but if less would not be charged to the requesting State? Dr. ASTIN. That would be possible. It would complicate the legislation.

Senator PAYNE. I will be interested in the testimony of the Comptroller General, but it would seem to me if that is the general opinion of the Secretary, in the very brief report to be filed with the bill when it is reported out, that it might specifically set forth the fact. that it was learned that it was not the intention of the Secretary to make any change in the present status, relative to work done for State governments, excepting in exceptional cases where the States. had requested special activities to be undertaken and in those particular cases it would be by mutual agreement between the State government and the Secretary as to the charge that would be made. Dr. ASTIN. That would be quite agreeable to us.

Senator PAYNE. If it was in the record we could spell it out very clearly in the report so there would be no question in anybody's mind about it.

Dr. ASTIN. That would be a good way to handle it. It certainly incorporates our intention on the matter.

Senator PAYNE. Do you have anything else?

Mr. GEISSINGER. No, sir.

Senator PAYNE. If you have nothing else, I believe that is it, sir. Dr. ASTIN. Thank you very much.

Senator PAYNE. Do you have anyone else here, either from your Bureau, or from Mr. Moore, Chief of the Accounting Systems Division? Mr. MOORE. I don't believe there is anything I could add.

Senator PAYNE. Then the next witness will be Karney A. Brasfield, assistant to the Comptroller General.

STATEMENT OF KARNEY A. BRASFIELD, ASSISTANT TO COMPTROLLER GENERAL, ACCOMPANIED BY ROY LINDGREN, ASSISTANT DIRECTOR, AUDIT DIVISION

Mr. BRASFIELD. I have no prepared statement. I would be glad to discuss our views or proceed as you wish.

Senator PAYNE. You may proceed in your own way.

Mr. BRASFIELD. The Comptroller General submitted a report to the committee on June 9, setting forth the views of the General Accounting Office on S. 2060. It would be my purpose today to point out the pertinent points in that report.

I will endeavor not to duplicate Dr. Astin's testimony on the points that I do not think would be particularly helpful to you.

One of the points on section 7 in the Comptroller General's report was that it raised the question, which I understand the Bureau has

answered the Department, that in paying the cost from the Bureau appropriations for services where fees are waived, the result would be not to pass on to other customers, or to impair the fund for the work performed without charge of fees.

In other words, it would be understood that that work would be supported by the Bureau's appropriations.

Section 7 also does give greater flexibility on billing, permitting the Bureau to bill on a basis of fixed price or estimated cost, and this we considered desirable

As has been pointed out, section 8 provides for a broader definition, including facilities as well as equipment.

I do not believe I need to touch on section 12 (c), which Dr. Astin explained as making the laws of the Department of Commerce applicable to their work with respect to the hire of consultants and so forth.

Section 12 (d)-and perhaps that is the part that you are most interested in, Senator-would permit the crediting of advances to the working capital fund, and in that way, in our opinion, would offer the opportunity to simplify and reduce the bookkeeping of the Bureau. It also would introduce no hazards as far as we can see, as to the augmentation of funds and that sort of thing, inasmuch as section. 1210 of the Public Law 759, 81st Congress, contains the safeguarding provisions as to maintaining the availability of funds when transferred to any working fund, which would be applicable, I believe, in this case.

I agree generally with the statement that Mr. Christeller made as to the simplification in the financial processes of the Bureau, and I might explain that rather briefly in this way: That the present method results in setting up a separate accounting entity.

In other words, a separate set of accounts for each working fund then performing the work and developing the costs within the Bureau's working fund, then setting up a receivable against the working fund, billing it, making the transfer from one to the other, which, again. section 1210, that I previously referred to, requires a transaction of that kind to be handled by check, which means it must go through the Treasury.

Now, as contrasted with that, if the advances were deposited it the working fund it would be a simple matter of recording the liability to the customer and offsetting the billing to the customer's account, against the advance which he had made, giving the customer the other agency, a copy of a report, or a copy of the billing, so that he knows the work that is being done.

Now, we do not have in this case a situation where the customer agency would have any basis, so to speak, for reviewing est voucher and checking the work done and so forth. That responsbility must necessarily, in this kind of a setup, rest upon the bures that is doing the work.

Senator PAYNE. Normally that type of a setup, I think you wo 22 agree, does not require additional bookkeeping over the ordinary straight billing and reimbursement type of activity.

Mr. BRASFIELD. If the Bureau had a sufficient working fund, ther might well be some simplicity in merely billing. However, ev there I would have some doubt that from the standpoint of t

customer agency, it actually is not simpler to make one transfer of funds and keep the accounting within the working fund of the Bureau, relying upon reports back to the customer agency, rather than actual money transactions each month, or periodically as the case might be. Senator PAYNE. How many accounts roughly have you had a chance to examine and how many advance accounts, for instance, do they have to handle?

Mr. BRASFIELD. I would rely upon the testimony of the Bureau's witness.

Senator PAYNE. I wonder, for the information of the record, roughly how many separate advance accounts are handled under this setup.

Mr. CHRISTELLER. Between 300 and 500 separate advance accounts. However, within the Treasury these are consolidated to around 40 different accounts, from 40 different appropriations.

Mr. BRASFIELD. Then, the actual costing would take into consideration projects within those advances.

We think this is an opportunity for simplification. The processes that accompany any separate funding in a working fund generates a certain amount of reporting to the Treasury, the Bureau of the Budget, that in our opinion serves no useful purpose, under circumstances such as these.

In other words, this gives the Bureau the opportunity to have an integrated accounting system and one set of books, as opposed to its own set of books, plus maintaining a multitude of accounts for its

customers.

Senator PAYNE. Of course, they still have to maintain accounts for the customers just the same.

Mr. BRASFIELD. They are now maintaining two sets of accounts, one within their own set of books in setting up the receivable to bill the customer and then liquidating it, whereas the extra work they do in the separate accounting entities for the working fund could be dispensed with, by relying upon a charge to their liability account instead of charging the receivable account.

Senator PAYNE. You are satisfied, then, that you feel it does offerdoes it offer you as good control from an auditing standpoint?

Mr. BRASFIELD. We believe that it does. I would say this offers the Bureau the opportunity to substantially simplify it. Now, the extent of simplification must necessarily in part rest upon the effective carrying out of this authority, if granted.

Senator PAYNE. If you are sold on it, I am sold on it, then.
Mr. BRASFIELD. We are.

Senator PAYNE. Is there anything further?

Mr. BRASFIELD. I have nothing further, Senator.

Senator PAYNE. Then, am I to understand that now the Comptroller General does approve of the legislation?

Mr. BRASFIELD. Yes. I must of necessity call your attention to the last paragraph in the Comptroller General's report of June 9, which points to the fact that, to the extent the Bureau has included in appropriations items on which they will, under this legislation if made effective, collect fees, there then would be, for consideration, a method or a device during the fiscal year of 1956 to insure that there is no augmentation of their funds for that year.