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This is the fourth in the series of volumes of the Decisions of the First Comptroller in the Department of the Treasury. The absolute necessity for decisions in the printed form now presented was stated with great ability, force, and clearness by the Hon. James Guthrie, Secretary of the Treasury, in his annual report of December 3, 1855, in which he says:

“The decisions in the # # # Comptrollers' offices are not preserved in printed reports as a guide and in restraint of themselves and their successors, in analogous cases, but exist in tradition, or a sort of Treasury common law in the inemory of experts in the several offices. It is true that some of the Comptrollers have kept a record of their decisions in cases of difficulty, and these have served as precedents in like cases, and cases in volving like principles. The decisions of * * * the Comptrollers, if they existed in printer reports, would give more uniformity to the action of the Treasury. The Auditors and their accountants, and the Comptrollers and their accountants, are left to these unreported decisions, the traditious of the Treasury law, and their own sense of what is right in the particular case. It is, therefore, not sur. prising that uniform action has not been had in the accounting offices of the Treasury, and that the departures from uniformity have been greater than those which usually take place in the decisions of courts of law and equity. Moreover, in the extension of the business of accounting, the examination of the accounts stated in the first instance by the Auditor, and then by the Comptroller, on appeal, has, in many cases, been omitted, the Auditor and Comptroller signing their names on the faith of the account stated by their respective accountants; thus opening the door, and increasing the chances of departure froin correct principles in the action of the Departments. * * * It would certainly be desirable to have such stated account accompanied by a succinct written report, referring to the law and the evidence, under which the debits and credits have been allowed and disallowed, and each stated account and report examined and adjudged, first by the Auditor, and then by the Comptroller, and the principles of accounting at the Treasury, as established by law, fully and fairly carried out. * * *

. . * "To constitute a good Auditor and a good Comptroller, re. quires legal ability of a high order, a special knowledge of our fiscal and disbursement laws and regulations, coupled with unabating industry, unbending integrity, and promptitude of decision; and scarcely less can be required of the accountants in their offices. The Auditors and Comp. trollers, and the accountants under them, constitute the safeguard of the National Treasury, and have to withstand the whole army of claimants and their interested clamor. It is submitted, with their increased business and the change in the value of money, that the Auditors and Comptrollers do not receive an adequate compensation for the high qual.


ifications they ought to possess, and the onerous duties they have to dis. charge. * *

66 The system of accounting at the Treasury is easy of comprehension, and as well calculated to prevent frauds, correct errors, and secure a proper execution of the laws, as any that could be devised, and might be extended to all the operations of the Government, without incon. venience, and to the greater security of the National Treasury and National domain. There would seem to be no just reason why the fised salaries of all the officers of Government should be passed upon by an Auditor and then by a Comptroller, before a warrant can be issued for payment; and that the Commissioner of Pensions and the Commissioner of Public Lands should have the right to pass upon the evidence, and grant pensions out of the Treasury, and bounty land warrants for so much of the public domain, without subjecting their action upon the evidence and the law to the examination and revision of a Comptroller. It may be that this want of revision has been the cause of many of the frauds practiced in obtaining pensions and bounty lands. It is believed that the action of two Departments should be required, as in the Treas. ury, in all cases where the National Treasury or public domain is to be reached or to be affected, and that no accounts, however created, should escape the usual and customary examination and re-examination."

In a report made to the United States Senate in 1834 the Hon. Levi Woodbury, Secretary of the Treasury, said:

“ It is manifest that no effectual check can ever exist in any case where the same officer authorizes the expenditure and audits or controls the audit of accounts.” (Senate Documents No. 6, page 5—2d session, 23d Cong. ; 1 Lawrence, Compt. Dec., 2d ed., App., Ch. XII, 525.)

The revision by a Comptroller of all accounts examined and adjusted by Auditors is certainly a great safeguard in the system of accounting. The accounts examined and settled by the (Sixtb] Auditor of the Treas. ury for the Post-Office Department are not subject to such revision, ex. cept on appeal (Rer. Stat., 270); in which respect the accounting system of the Treasury Department for the Post-Office Department is anomalous (McKnight's case, 13 Ct. Cl., 303). If these accounts had been subject to such revision, in the usual mode,* it may well be doubted whether payments of large amounts of money which were made for a time under the so-called "star-route contracts," upon the construction given, however honestly, to the statute regulating “ increased” and s expeditedmail service, could ever have been made. Even subsequently to the act of April 7, 1880 (21 Stat., 71), the authority to allow vast sums of money for expedited service was maintained by the PostOffice Department, but was denied by the present Sixth Auditor, whose decision was affirmed when the question finally came before the First Comptroller ou appeal. (Star-route case, 2 Lawrence, Compt. Dec., 446.)

* At the first session of the Forty-seventh Congress the Hon. Stanton J. Peelle introduced a bill on this subject (see 13 Cong. Record, part 6, page 6376—July 22, 1882); and at the first session of the Forty-eighth Congress the Hon. N. P. Hill, on April 18, 1881, introduced a bill “to provide for the deposit in the Treasury of the receipts of the money-order system, and for the payment of its expenses ont of appropriations."

In a "report on foreign and domestic postal accounting," made January 22, 1884, to the [Sixth] Auditor of the Treasury for the PostOffice Department, by James T. Smith, chief of a division in that office, there is much valuable information. The report states that:

"In the German service the district account is rendered directly to the court of account at Potsdam, near the Emperor. This body, I was informed, finally adjusts all Government accounts, and is independent of all other executive departments. In the Swiss service the account is audited by the Post-Office Department and reviewed by an independ. eut finance officer. In the French administration the district account is also audited, in the first instance, by the department, and fiually reviewed by a court account. This body is composed of a first president, tour presidents, à procurer-general, aud eighteen first councilors, with a clerical staff and corps of clerks. In the English service all accounts are rendered to and adjusted by the receiver and accountant-general, an officer of the Post-Office Department. They are afterwards scanned by the auditor and comptroller-general, sometimes styled in official papers the parliamentary critic, who may review and criticise an account, but cannot reverse a departmental decision. Failing to adjust difference, be submits the correspondence to Parliament with the aunual exbibit of revenues and expenditures.

" It will be observed that in each system of accounting it is a settled principle that no department should finally review its own accounts. Necessarily, the office accounts of the body making the final review must be audited by itself. The second officer of the English audit and comptrol office, who is not, therefore, responsible for the disbursements, is charged with this duty, but this exception to the rule is not overlooked, as a special and rigid scrutiny is given to these accounts by the parliamentary committee on accounts.

" The somewhat novel position in which your office stands to two great Executive Departments may be here referred to.

“The Auditor of the Treasury for the Post-Office Department sin the United States) exercises the functions of both Auditor and Comptroller, his decisions being final, unless an appeal is taken therefrom to the First Comptroller by the Postmaster General or a person dissatisfied with the settlement of au account, within twelve months. The Auditor is to receive all accounts arising in the Post Office Department, or relating thereto, with the vouchers necessary to the correct adjustment thereof, and audit and settle the same, and certify the balances to the Postmaster-General, keeping and preserving all accounts after settlement. He shall collect all debts due the Department, and may com promise, remit, &c., fines, penalties, &c., with the written consent of the Postmaster-General. He shall make a quarterly report of the receipts and expenditures of the Post Office Department to the Secretary of the Treasury, and shall make to him or the Postmaster-General such addi. tional reports as either may require. He shall report to the PostmasterGeneral, when reqnired, the inanner and form of keeping and stating the accounts of the Department, and perform such other duties in relation to the financial concerns of the Post-Office Department as may be assigned to him by the Secretary.' Says Attorney-General Cushing in the Colinespil case (Opinions, vol. vii, page 444): 'Isle (the Auditor not the officer in many respects both of the Postmaster-General and of the Secretary of the Treasury? Surels, as it seems to me by the general tenor and by provision after provision of the act to change organization of the Post Office Department;' and, on page 445, the Auditor is, there

fore, the officer of both the Treasury and the Post-Office Department, having privity of official relation with both.'

“As an officer of the Post-Office Department, in the performance of the duties devolved upon him by law and by the Postmaster-General, the Auditor takes equal rank in the Post Office Department with the heads of other Bureaus thereof, subordinate to none. The duty of audit. ing accounts cannot be shared with other officers of the Department. It must remain with the Auditor as a whole until it is transferred as a

ances, and notify the Postmaster-General of delinquencies as early as the interests of the service require, all accounts and vouchers should reach his office by the most direct channel, and all correspondence thereon up to the date of his final action should be under his direction. The condition of the accounts of the Department and the reasons for the creation of this office are fully set forth by Postmaster-General Kendall, in his annual report for 1835."

On the subject of the present system of postal accounting the report says:

"Forty-eight thousand postmasters now render accounts current quarterly to this office. These accounts embrace ordinary revenues and all disbursements for office expenses proper. Each account is examined by the examining division, and reviewed and registered by the registering division. From the registers the balance is carried to a general account kept on the ledgers of the bookkeeping division, and also, more iu de. tail, on the stating division. The surplus quarterly revenue is sent long distances, at the postmasters' risk, to a postal depository, there being but ninety-six for the whole country. On the receipt of the certificate of deposit the postmaster mails it to the Third Assistant, PostmasterGeneral, in whose office it is examined and registered. When it finally reaches this office it is compared with the weekly account rendered by postal depositories, and, if found to agree therewith is posted to the gen. eral account. Quarterly accounts of disbursements to letter-carriers, postal railway clerks, mail-messengers, special carriers, and for weigh. ing the mails, and for temporary mail service are also rendered, these being audited on separate desks of the pay division. From the regis. ters made up on these desks the items are posted and stated to the general account. Miscellaneous payments, not included in the account current, may be audited on either the examining, registering, stating, pay, or collecting divisions, this last division having charge of the general correspondence for the collection of debts and the final closing of postmasters' and contractors' accounts. Miscellaneous items reach the gen. eral account through the journals of the bookkeeping division. In the adjustment of a quarterly account, correspondence may arise on each desk dealing with an item thereof, the result being confusing to a postmaster, who regards his account as a unit.

To obtain a supply of stamps, a postmaster makes requisition on the Third Assistant Postmaster-General. If approved, after comparison with the record of sales, the stamp agency at the place of manufacture is ordered to issue. When the stamps reach the postmaster, who may be thousands of miles from the agency, be returns a receipt to the Third Assistant Postmaster-General. This is checked with the record of orders and sent to this office, where it is again checked with a duplicate record made up from the voluminous records of the Third Assistant's stamp division. The examining clerk is then prepared to receive and examine the postmaster's quarterly account current."

The report then discusses “proposed changes in the method of supply and accounting," and, among other things, says:

"A collector of internal-revenue renders two accounts, each complete in itself—a revenue account, the total of which must be deposited, and a disbursing account, in which warrants received are charged and disbursements credited, each account being settled independently of the other. There are so many items to the postal appropriation, a separate account being kept with each, that with the internal-revenue system of separate accounts I estimate there would be required over 1,000,000 postal warrants annually. The total number of warrants passed by the First Comptroller last year did not exceed 80,000.

"If a Seventh Auditor, for the money-order business, and a Comptroller of the Treasury for the Post-Office Department, to finally review all postal accounts, should be created, or the control of all Government ac. counts be cut out of the Treasury Department and devolved upon an independent court of account, as in the French and German service, or a Congressional critic or auditor and comptroller-general be created, such as is found in the English administration, the method of accounting I propose would easily adjust itself to such change. This office would have its auditing and reviewing divisions for all classes of postal accounts. If the comptrolling should go elsewhere, the reviewing divi. sions could be transferred without confusion or serious delay in adjustments-an important consideration when so many current accounts are involved. In such an event the account would necessarily be consoli. dated, with all vouchers attached—the form I propose. If your jurisdiction remains as now, the proposed organization will be more efficient and economical than the present one."*

* The following letter of the able and efficient [Sixth] Auditor of the Treasury for the Post-Office Department is deemed appropriate here:


Washington, D. C., May 8, 1884. Sir: In answer to your inquiry as to “whether it is advisable to apply the Treas. ury system of adjusting accounts to the accounts of the Post-Office Department," I have the honor to inform you that I favor the policy of having all accounts reviewed by a Comptroller after passing an Auditor, whenever they shall be reduced to the lowest practicable number. At the present time four-fifths of the accounts of postmasters are such that they could be dispensed with, by causing the money-order offices to disburse such payments as become necessary and furnish such stamps as may be required at the smaller offices.

This office now follows the Treasury system, so far as its limited clerical force will allow. All postmasters' accounts are passed upon by two separate divisions, and other accounts which pass but one division, are overlooked a second time by different clerks. The aim is to review every account as a check against fraud and to correct errors.

The above statement in regard to postmasters' accounts applies with equal force to accounts for the transportation of the mails. Mail and special mail messengers could be paid by the postinasters at money-order oftices, and their receipts handled as vouchers in the quarterly returns of such postmasters, instead of as at present, being settled by statement of account and paid by warrant. Tbere is legislation to effect this change pending at this time. Whenever these changes, with a few others, are Dade, it will become more practicable and necessary that all accounts should pass the review of a Comptroller.




First Comptroller, Treasury Department.

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