During the war little developmental work was done in the field of financial reporting, as this activity was one that could be deferred during an all-out war effort. We are requesting an increase of 11 employees to begin again in 1947 the job of improving the financial statements and reports of the Federal Government, at which much justified criticism has been leveled. The Budget document, for example, is an unintelligible maze of figures to the average citizen. With the passage of the Corporation Control Act and the necessity for developing budget programs for Government-owned corporations, we will need to develop statements and reports of their current financial status. These are all a part of the task of presenting an accurate, concise, and clear picture of the Government's financial programs. This is discussed later under corporation budgets. I believe that thẻ Government can and should present the financial records of its operations with greater simplicity and clarity. These long delayed improvements should begin as soon as possible.

STATISTICAL PROGRAMS

The war necessitated changes and distortions in regular statistical activities throughout the Government. Many statistical series, widely used in peacetime, were dropped to permit use of the staffs and facilities of the agencies for purposes directly relating to war programs. Other data collections were transferred to war agencies and greatly expanded to serve particular wartime needs. Many new kinds of data were collected for war purposes, and some of these have proved so useful that the industry supplying the information desires the collection continued.

The end of the war thus leaves us with a statistical program which is badly out of balance. The Bureau must appraise and relate the needs of all Government agencies and private groups for information collected by the Government, and formulate a coherent and adequate Federal statistical program. It must promptly discontinue or readapt the great quantities of special-purpose questionnaires collected during the war. It must plan for prompt compilation and release of information collected during the war which is of immediate value to business groups and Government agencies, and for preservation of that which is of potential value. It must supervise the reestablishment of reporting programs for which business and Government groups can demonstrate a legitimate need. It must take an active part in the collection and coordination of statistics needed by the new international organizations. And it must further develop uniform standards and techniques to improve the usefulness and reduce the costs of statistical materials and processes used throughout the Government. All these activities are an essential part of the Bureau's general responsibility for coordination of Federal statistics.

Report forms

The review of statistical forms required by the Federal Reports Act increased, of course, during the war period. It was evident that the small staff of the Bureau could not effectively control the issuance of statistical inquiries and questionnaires unless some means were found within the agencies themselves to make an effective screening. At the insistence of the Bureau, internal clearance units familiar with the operations and needs of their own agencies achieved a high degree of success in confining requests for information to those definitely proved necessary to the agency's operations. This enabled the Bureau to review these programs from an over-all Government viewpoint and to determine whether the information required might be made available through other agencies of Government.

Another important aspect of the Bureau's function was to simplify the forms, to reduce the coverage where that could be done without seriously interfering with the procurement of the desired data, and to fix the time limits within which the information could be collected. In these activities we were greatly aided by the advisory committee on Government questionnaires, composed of representatives from seven of the largest business organizations. This committee, whose services have been rendered without cost to the Government, has rendered invaluable cooperation. It has, during the current year, 50 subcommittees composed of specialists in business problems or representatives of the affected industries.

At the present time the most pressing problem in relation to forms control is seeing to it that data collections which are no longer necessary are stopped

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promptly. More than 700 Government questionnaires, representing approximately 3,000,000 returns made by business establishments each year, have been discontinued since VJ-day. The discontinued forms include annual, quarterly, monthly, weekly, and even daily reports formerly required under wartime control orders, and constituted a great part of the burden of Government questionnaires which fell on business and industry during the war. In addition, discontinuance of 20 forms and applications connected with rationing programs means the end of nearly 66,000,000 returns made each year by the public.

It is our responsibility to see that a form does not duplicate data collected by another agency, that it is collected from the fewest possible number of respondents, and that the data is collected no more frequently than necessary. Modification of forms which have been approved is often as significant as the actual disapproval of forms. For example, in one report form required from 100,000 users of a rationed commodity, we eliminated reports on those geographical areas where no administrative action was contemplated and simplified the report by requiring only approximate dollar volume of deals instead of precise quantitative figures. In another case we eliminated 30 percent of the data requested from certain textile manufactures because the burden of reporting would outweigh the usefulness of the information sought. In other cases we decreased the burden on business by reducing the frequency of reports. To handle this work on report forms, the Bureau of the Budget is requesting no increase in staff at this time. Coordination of statistical programs

In reformulating a peacetime statistical program, a determination must be made as to what statistics should be collected and for what purposes. Both business and Government make a wider use of statistics than is commonly recognized. For every collection of data we must make a determination, first as to whether similar data collected by another agency could be modified and utilized, and second, the most efficient and economic basis for collection. At the present time, we are examining requests for the continuation or retransfer of statistical series which were taken over by war agencies. We are also reviewing the statistical series which were discontinued during the war to determine whether they are to be resumed, and if resumed, what revisions should be made. Whenever possible we are trying to promote the use of single collecting agencies for statistics, such as the Interstate Commerce Commission for transportation, the Federal Power Commission for electric utilities, the Bureau of Labor Statistics for price data, and the Census Bureau for manufacturing production. This has the advantage of preventing confusion and of eliminating duplication. To aid in the problem of statistical coordination, we have established advisory committees on statistics in the fields of labor and agriculture. We expect to receive the same outstanding assistance from these groups as we have from business and industry during the war period. The recently formed statistical committees of the Chamber of Commerce and the National Association of Manufacturers have expressed their desire to cooperate with us on statistical programs.

Business in this reconversion period has a greater need for data on production, shipments, inventories, and new orders than existed during the war. The reestablishment of statistical programs in this field is needed, but a determination must be made as to the relative roles of Government and business in the collection of this information. In addition to statistics on production, the major areas in which we will be working during the current and succeeding fiscal years are statistics on business operations, wages, State and area estimates of employment, construction, and the national income and its distribution. The wider participation of this country in international organizations and activities will bring out problems relating to the development of a wider range of statistical information. At the present time much information is being developed on food supply and requirements in Europe and the Far East. Other developing problems in the field of international statistics relate to international trade and financial transactions.

For the staff work on coordination of statistical programs we are requesting an increase of four positions.

Development of standards

With the decentralized statistical system which exists in the Government, it is essential that all possible measures be taken to promote uniformity or -comparability between data collected by various agencies. Only through the general application of standard methods, definitions, and classifications can these data be made comparable. In our work in the development of standards

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we are devoting particular attention to the use of sampling methods, the development of standard industrial and commodity classifications, the use of standard definitions and the related problems of availability, analysis and use. Information for statistical purposes can frequently be obtained more quickly and at reduced cost by covering a carefully selected sample rather than all members of a group. If this sample is to yield reliable results, however, it must be scientifically selected. We are assisting agencies in applying developments in sampling practices to their work, and aiding them in designing samples so selected as to secure greatest accuracy at the lowest possible cost. We are currently revising the standard industrial classification to take into account industrial changes occuring during the war. The standardization of this classification makes it unnecessary for each agency to spend money to develop its own classification system. The revision of the standard commodity classification, the use of which is required by regulations of the Surplus Property Administration, is nearly completed and funds are being requested in this budget for its printing.

We have been making progress in the development of standard terms and definitions which not only increase the value of data but render it easier to collect. For example, a single pay period has been established for reporting employment and payrolls and definitions have been worked out for various categories of employees in manufacturing industries. These standards have been widely adopted. Once developed, the use of these standard definitions will be promoted in our day-to-day operations under the Federal Reports Act. To further the much needed development of standards, the Bureau is requesting an additional five people on the staff.

Use and availability of statistics

The task of statistical coordination includes not only the collection of data t but also the tabulation, analysis, and publication. It is important that we devote increasing attention to the uses which are made of data by the collecting agencies in such important statistical series as estimates of national income, employment, the labor force, construction activities, cost of living, and production indexes. Only through the analysis of use can we gain a more exact understanding of the accuracy and utility of information currently being collected. This sort of evaluation will prevent presentation of inconsistent statistics, particularly in areas where two or more agencies necessarily have substantial responsibility. Likewise, in statistics compiled primarily at the request of business, such as detailed production statistics, it is desirable that we study the specific uses made of the data by the interested business concerns.

There exists a great and growing demand, particularly from outside Government, for a knowledge of what statistics are available and where they may be obtained. We have been frequently asked to assemble a list of materials available on a given subject such as surplus property, individual raw materials, and employment in particular industries. If the utility of statistics is to be increased, information as to what is available should be summarized in a convenient form for use of interested Government agencies and business concerns. For these purposes the Bureau requests an increase of 4.8 positions.

FIELD SERVICE

We are planning two additional offices of the Bureau's field service to cover the southern and eastern areas. At the present time the four offices of the field service operate in the Midwest, Southwest, Rocky Mountain, and Pacific coast areas. Each at present has a staff of four examiners and two stenographers. We propose to add one examiner to each office. The major advantages of field staffs are in the servicing of other divisions of the Bureau on problems affecting the different areas, the initiation of field studies on various activities, and the presentation of problems requiring solutions.

The fiscal year 1945 was the first full year of operation for the field service. In volume of work, about 60 percent of its staff time was devoted to assignments from the Bureau in Washington and the remainder to work initiated in the field offices. Field activities generally divide themselves into three major groups: (1) Administrative studies and reports, (2) investigations into the utilization of supplies and equipment, and (3) problems of Federal, State, and local relationships.

Under the heading of administrative studies and report, I would like to give a couple of examples to indicate the extent to which field offices are effective

as a projection of the Bureau into the field. Working on the general problem of OPA district offices, the Chicago staff of the Bureau made recommendations resulting in the elimination of one-third of the OPA district offices in Chicago and in savings of approximately $1,000,000. The report on this particular study was also of value in its general application to the general problem of the field office organization of OPA.

The field office at San Francisco, in keeping the Washington office advised of the west coast housing situation, made an investigation which resulted in an audit of the eligibility of war housing occupants. This disclosed the presence of nearly 6,000 ineligibles and as a result came a reduction in the request for construction of new housing.

A variety of reports have been initiated in the field dealing with such subjects as nutrition programs, maintenance of automotive equipment, loans to small business, technical services of the Smaller War Plants Corporation, problems of contract termination, and relationship between operating and service agencies of the Government. Through the development of this information in the field, steps can be taken for improvement at the source of the trouble, as well as concurrent action by the Bureau working with the headquarters of the agencies in Washington. An important area to which current and continuing attention is given is the utilization of supplies and equipment by Federal agencies and a check on the disposal of surplus. The Field Service has pointed out wasteful practices in this field and has corrected difficulties of relationship between Federal agencies in the same fields. For instance, in Denver it has achieved cooperation between the OPA and the disposal agencies on the price of surplus items and has developed mechanism for coordination between the disposal agencies and the interested Federal, State, and county officials.

A considerable portion of the staff's time in the field service has been devoted to improvement of internal operations in Government agencies. They have aided in the development of work simplification programs in the field establishments of Federal agencies; they have directed the attention of agency representatives to the various management techniques to be applied in solving operational problems; they have taken the lead in bringing together Federal officials from various agencies in related fields, such as budget, fiscal, procurement; they have worked with Federal and State officials in coordinating programs of common interest to both the State and Federal Governments. Federal officials show a growing tendency to consult our field representatives on a wide variety of problems, particularly those affecting relationships with other agencies. I will cite an example or two of our work in this area. Our field staff aided the naval supply depot staff at Oakland to establish a program of improved personnel utilization and to put the program into effect. This program resulted in a reduction of 240 positions at an annual savings of about $360,000. In San Francisco, various branches of the Army and Navy were developing plans to hold separate schools in contract termination procedures for contractual personnel. Largely through the efforts of our field service, these agencies together with the RFC, SWPC, and WPB, and the California State Chamber of Commerce jointly agreed to staff one school instead of the many which had been contemplated. The result was not only a saving of time and money but provided a greater degree of uniformity than would have been possible under the original plans.

Improvement of relationships between the Federal Government and the govern ment of States and localities is one of the principal objectives of the field service. Our efforts so far have been tentative and experimental. For example, in Dallas we are attempting to coordinate the various services for veterans and bring to bear on the problem the facilities and resources of the Federal, State, and local units which have direct or related interests in that subject On another front, we are joining with State budget directors to study the relationships between Federal and State budgets, particularly in those fields in which Government grant-in-aid programs play an important part. A forward step in this direction is the establishment of the Pacific Coast Board of Intergovernmental Relations upon which the Federal agencies and State, County, and local governments are represented. The State governments are represented directly by the Governors of California, Oregon, and Washington. This board serves as a clearing house of information, programs, and developments of common interest to the various levels of government. This is an effective start toward the improvement of relationships and understanding between the various groups directly interested in similar programs and problems.

During the present year we anticipate that the field service will devote much attention to problems of reconversion and liquidation of war activities. The démands which have been made on the staff exceed its ability for effective performance. The request for studies of particular problems coming from various other divisions of the Bureau, together with the assistance requested by Federal, State, and local officials in the field, have overburdened the present limited staffs of those offices. For this reason we are requesting the addition of one staff member to the four already in each field office. With this modest expansion and the establishment of two additional offices in 1947, we feel that substantial further progress can be made toward the improvement of Federal field operations.

GOVERNMENT CORPORATION BUDGETS

The Government Corporation Control Act (H. R. 3660) directs the President to submit budget programs to the Congress for all wholly owned Government corporations covering operations for the fiscal year 1947 and each fiscal year thereafter. Although there are 63 individual corporations enumerated in the act, 8 of these have been merged with other corporations or liquidated since the act was drafted, or are inactive. The remaining 55 will be required to submit budget programs.

These corporations are engaged in widely varied fields of business, insurance and finance, as well as in governmental operations such as subsidies and flood control. On September 30, 1945, their assets amounted to almost 21 billion dollars. The Government's direct investment in their capital stock, paid-in surplus, and expended appropriations amounted to slightly more than 3 billion dollars and the United States Treasury held bonds and notes issued by these corporations in the amount of 121⁄2 billion dollars. Those figures present some idea of the magnitude and the financial implications of their operations.

In the past most of these corporations have not been required to submit budgetary requests to the Bureau of the Budget or to the Congress. In those instances where they have been required to do so the budgetary requests have been limited almost entirely to administrative expenditures. The latter represent but a fractional percentage of their total expenditures during a given fiscal year. But the budget programs to be submitted in the spring cover all expenditures of the corporations, including those proposed for the fiscal year 1947, with comparative estimates for 1946 and actual figures for 1945. Similar information will be shown for the receipts of the corporations.

The preparation of complete budget programs for Government corporations imposes new and additional responsibilities on the Bureau of the Budget. Under such rules and regulations as the President may establish, the Bureau is authorized and directed to prescribe the form and content and the manner in which such programs shall be prepared and presented. It must collaborate and advise each of the corporations in developing a classification of its operations by major types of activities corresponding with its basic authorizing legislation and suitable for budget presentation and control. Consideration must be given to the particular problems and programs of each corporation and to the need for flexibility in its operations.

The budget program submitted by each of the corporations must be reviewed with the corporation and its supervisory agency. The estimates of expenditures for each program and the funds required to finance such expenditures must be analyzed to determine the amount to be authorized where specific authorization is required by existing law; also, to determine the nature and amount of specific limitations and restrictions to impose where such limitations are necessary and desired. This review will be particularly difficult because of the diversity of the operations of the corporations and the many uncertainties affecting the probable size and character of many of their activities. Consideration will need to be given to the capital requirements of each of the corporations and estimates submitted of capital funds to be returned to the Treasury or of appropriations necessary to restore capital impairments. Difficult technical problems will arise in consolidating and summarizing the operations of the various corporations and in integrating their receipts and expenditures and their borrowing and capital requirements with the expenditures of the regular agencies of the Government. The act provides that no wholly owned Government corporation created under State law shall continue after June 30, 1948, as an agency or instrumentality of the United States unless reincoporated by act of Congress. Study should be commenced at once of the several State-chartered corporations for the purpose