GENERAL The General Accounting Office is responsible for determining the correctness of charges paid for freight and passenger services furnished for the account of the United States, for the recovery of overcharges, and for the settlement of transportation claims both by and against the Gov ernment. As a further part of our basic audit and investigative functions we review, evaluate, and report on the transportation and traffic management activities of Government agencies and assist the agencies in the performance of their transportation and traffic functions. As part of our duties relating to the settlement of transportation claims, we furnish technical support and other assistance to the Department of Justice in the prosecution or defense of transportation suits to which the United States is a party. The scope of our responsibilities for auditing and reviewing transportation in the Federal Government is indicated by the magnitude of the Government expenditures for transportation services. Direct procurement of commercial transportation amounts to about $4 billion annually. Approximately $2.1 billion of this amount is for services procured on standard forms and is audited centrally by our Office on the basis of paid bills submitted by Government agencies. Other expenditures for direct procurement of commercial transportation consist primarily of contract services including the transportation of mail and payments by Government corporations that are audited on site. The Government also spends several billion dollars annually for operation of military transportation fleets, for movement of civilian employees' household goods on a commuted basis, for reimbursement of transportation charges incurred by cost-type contractors, and for other indirect transportation services. These expenditures are covered in our reviews of selected activities and programs of the various agencies. AUDIT OF TRANSPORTATION PAYMENTS AND Transportation Payments The Transportation Act of 1940 requires the administrative agencies to pay the bills of carriers subject to the Interstate Commerce Act and the Federal Aviation Act upon presentation prior to audit by the General Accounting Office. Although payments to carriers not subject to these acts may be audited prior to payment, for administrative efficiency all transportation bills for services procured on standard Government forms are normally paid before audit. Because certifying and disbursing officers are exempted by law from liability for any overcharges by carriers arising from the application of improper rates or charges on services procured by standard Government transportation forms, paid transportation bills are submitted to our Office for central postaudit, the determination of overcharges, and the recovery of overcharges directly from the carriers. The principal transportation payments that are not sent to our Office for postaudit are those made by Government corporations and those procured under contract, such as Post Office mail contracts and Military Sea Transportation Service shipping contracts. Our audit of transportation charges is normally completed in 6 to 7 months after payment. We audited 4.9 million bills of lading for freight shipments, for which the Government had paid about $1.2 billion, and 2.9 million transportation requests for passenger travel, for which the Government had paid about $850 million. From our audit of transportation payments, we issued 112,306 overcharge notices to commercial carriers requesting refunds totaling $15.5 million. Collections from carriers during the year amounted to $14.7 million, which were credited to basic appropriations of the procuring agencies or, where this was not possible, deposited in the Treasury as miscellaneous receipts. The amount of payments audited was about 10 percent greater than the prior year, and the amount of overcharges detected and reported to carriers was about 10 percent greater. This increased activity was accom plished with 6 percent more audit hours than were utilized on our transportation audit in fiscal year 1967. As part of our review of transportation payments, we also identified hundreds of shipments where the transportation services were procured at the legal rates but resulted in excess costs to the Government which were not recoverable from the carriers. These traffic management errors resulted from the selection of uneconomical routes, modes of carriage, or types of service and were brought to the attention of responsible transportation officials of the agencies involved for necessary corrective action. Paid vouchers after audit are subject to disposal variously under 4year and 10-year retention programs approved by Congress. During this year we disposed of 2,582 cubic feet of record material consisting principally of paid transportation vouchers for the years 1963 and 1964 under the 4-year retention program. Vouchers identified here as subject to the 10-year retention period are stored at General Services Administration Record Centers and are disposed of by GSA upon our notification that the retention period has expired. Claims Section 305 of the Budget and Accounting Act, 1921, provides that all claims and demands whatever by the Government of the United States or against it shall be settled and adjusted in the General Accounting Office. Pursuant to this law transportation claims against the United States, with certain minor exceptions, are submitted to the Office for adjudication. The exceptions relate to claims for loss and damage, accessorial or supplementary transportation services, and amounts due because of errors in extension or footing on prior bills. These latter claims after payment are subject to review here in our audit of paid vouchers. In fiscal year 1968, we received about 18,000 claims and settled or otherwise disposed of 23,000 claims for approximately $11.3 million. The greatest amount claimed was on assigned bills of certain Military Airlift Command contractors, which we audit before payment to protect fully the Government's interest. On these assigned bills and other original unpaid bills for over $7 million, we disallowed about $258,000 as being in excess of the proper contract and/or tariff rates. The balance of the claims were supplemental bills of carriers for changes in their original charges or demands for repayment of overcharges collected by our Office. In disposing of these claims, amounting to about $3.9 million, we certified for payment $2.2 million and disallowed or terminated $1.7 million. TRANSPORTATION MANAGEMENT REVIEWS Our audit efforts relating to improvements in traffic and transportation management practices and the reduction of uneconomical expenditures for the movement of passengers and cargo were carried out at numerous civil and defense agencies and installations throughout the United States and in overseas areas. We submitted two reports to the Congress, five reports to congressional committees or individual Mem bers of the Congress, and 25 reports to the heads of agencies or other agency officials in both the military and civil agencies of the Government. Digests of the reports to the Congress appear immediately following this section. The other reports are included in the list of audit reports issued during the year, in Appendix C-2. We placed increased emphasis on traffic and transportation matters involving support of our forces in Southeast Asia. For instance, we reported to the Congress on: Opportunities for reducing costs in the use of commercial air service for the transportation of cargo between the continental United States and overseas areas. • The need for improvement in the management of high-cost airlifts of military cargo to Southeast Asia. The more significant reports to congressional committees or individual Members of the Congress covered: (1) demurrage charges for ships delayed at Southeast Asia ports, (2) comparative costs of available methods for shipping household goods, and (3) evaluation of a complaint by the Civil Aeronautics Board against an air freight forwarder. Our reports to agencies and agency officials covered such traffic management matters as: (1) possible savings by a review of comparative costs for volume movements of household goods for civilian employees of the Department of Defense, (2) lower transportation costs available for military shipments between Germany and the United States by more effective use of space on Government-owned or controlled vessels for the transportation of privately owned vehicles, (3) reduction in costs of small express shipments by better consolidation, (4) savings by consolidating the management of baggage shipments in Okinawa and Oahu, Hawaii, (5) the potential for increased costs if guaranteed load factors in Military Airlift Command contracts for passengers and cargo services are not met, (6) the consolidation of small shipments from GSA depots to achieve lower transportation and administrative costs, and (7) better control by DOD over packing charges on domestic household goods shipments to preclude payments for packing services not actually performed. Military expenditures for transportation of service members' household goods and personal effects are between $400 million and $500 million annually. Consequently, in the past several years we devoted a large part of our management review effort to household goods traffic. The management improvements made by DOD as a result of our reviews and reports generally have been satisfactory and we are reducing our efforts in this area to devote additional effort to the audit of activities concerning the movement of personnel and supplies to Southeast Asia. In the overseas household goods shipping area, however, there continue to be problems that will require our attention in the coming fiscal year. Reviews in progress on military household goods traffic which we expect to complete early in fiscal year 1969 are concerned with: (1) potential savings through improved management and preshipment costing of overseas shipments of household goods and (2) significant savings in transportation costs on overseas shipments of unaccompanied baggage through better utilization of space on MAC aircraft. Other reviews in progress, programmed for completion during fiscal year 1969 or early in fiscal year 1970 concern potential savings or improved management by DOD through: (1) direct use of air carriers instead of contracting with domestic air forwarders, (2) elimination of duplicate airlift between Japan and Korea, (3) better utilization of available cabinload by the Military Airlift Command in connection with international planeload services furnished by commercial carriers, (4) shipping printed matter by surface rather than air from Japan and Okinawa to Vietnam, (5) elimination of the high cost of air shipments of military newspapers by establishing a printing plant in Vietnam, (6) elimination of the backhaul of mail from Okinawa, (7) routing Air Force cargo through the military controlled port at Subic Bay in the Philippines, instead of through Manila, (8) better utilization of the cargo capacity of the Government-owned vessels operating between the United States and the Panama Canal Zone, (9) establishing a centralized organization for the coordination of traffic management and transportation facilities in Europe, and (10) more effective use of transportation resources and improved forecasting of transportation requirements in the Far East and Southeast Asia. We also have in process surveys and reviews concerned with: (1) the potential for savings of transportation costs by consolidating small freight shipments on a Government-wide basis, (2) Military Sea Transportation Service payments for the transportation of DOD cargo under shipping contracts and charters, (3) trucking contracts for the transportation of military cargo in Vietnam, and (4) the worldwide movement of ammunition and components by the Department of Defense. We have continued the expansion of our Transportation Management Review staff to provide the capability for increasing our survey and review activities in other areas of traffic and transportation management such as the movement of passengers and freight by civil agencies, transportation of petroleum products and chilled and frozen foods to overseas points, and those areas having potential for application of Governmentwide or multiagency review concepts. The following are digests of the two reports issued to the Congress during fiscal year 1967. |