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Thus, toward the end of 1945 we were confronted with this situation: With the limited force available, it would have required 10 or 12 years under the procedures in effect to accomplish the audit of payments made only through 1945, and so there would still remain for audit in 1955 or 1957 the backlog of payments made subsequent to 1945. This represented an intolerable situation. What is more, by the time the audit had been completed of payments from 1942 through 1945, many carriers would have been out of business or would have become financially unable to refund overpayments at the prospective date of demand. This is especially true when it is considered that where demands for recovery of overpayments are too long delayed the right of the carriers to correct their tax returns long since filed would be jeopardized; also, there was reason to apprehend that if the audit were too long delayed legislation might be enacted limiting the time within which the United States could recover overpayments, as has been done on occasion.

All of the foregoing gave me manifest concern, and I directed that immediate consideration be given to the institution of such steps as would afford the most practical safeguard of the interests of the United States.

The situation was canvassed and several conclusions, which then appeared and now appear justified under the circumstances, were reached. It was determined, first, that the audit must be accelerated; second, that this accelerated audit must be promptly placed in effect; third, that the work must be accomplished as effectively and economically as possible; and, finally, that the interests of the United States must be safeguarded even though expedited audit procedures were adopted. These matters were reported to me and the general outline of a plan was laid before the Committee on Appropriations, House of Representatives.' With my approval, the agreed plan was placed in operation. The administrative and supervisory personnel responsible for the audit of transportation vouchers were acquainted with the plan and were authorized to exercise their judgment in getting the job done. Under it each voucher was to be given an examination by the best qualified rating personnel available. Depending upon the size and complexity of the problems presented, the adult was to be graduated from what amounted to a visual inspection by trained personnel (to see whether there were overpayments possibly involved, and to enable the immediate closing of the simpler cases) to a detailed, intensive audit of the difficult ones. It was concluded as a basic element of the plan to try to recover the maximum amount of money within the shortest period of time. Contributing to that end, demands for repayments of less than $50 were not to be issued. As a corollary, vouchersnot bills of lading—on which charges totaled $100 or less were not to be examined unless the bills of lading attached thereto involved unusual transit situations, repetitive movements, or a controversial question, since, as a practical matter, overpayments of $50 per individual bill of lading would not there be found.

All of the foregoing constituted a part of the over-all plan for accelerating and increasing the effectiveness of the audit of transportation payments as well as expediting the recovery of over-payments. As a direct result of the adoption of this plan we have collected and put into the Treasury since July 1, 1945, because of the transportation audit, a total of nearly a quarter of a billion dollars, about one-half the sum collected for the Government by the General Accounting Office from the fiscal year 1942 to date. Also, we have demanded but not yet recovered from common carriers the additional sum of approximately $80,000,000.

During the month of June 1947 the General Accounting Office completed the accelerated audit of transportation payments made through July 1946 and at that time the transportation-audit situation was again reconsidered. The volume of payments for transportation charges for the account of the Government had decreased sharply after the cessation of hostilities; on the basis of past production records there was a surplus of transportation-rate-audit personnel; and it was decided that, effective July 1, 1947, we would revert to our prior audit practices, except that demands for repayment would be made only for amounts of $10 or


On the basis of the currency of the audit, assurances to me that the procedures agreed upon had been observed, and representation that there existed an excess of transportation-rate-audit personnel, I directed that expenditures for the General Accounting Office be adjusted accordingly. Last year we instituted a reduction-in-force and a reduction-in-grade program which affected many of the people then assigned to transportation-rate-audit work. As a result many em

1 Hearings (dated December 10, 1945), independent offices appropriation bill for 1947, House Appropriations Committee, pp. 450-452.

ployees formerly engaged on transportation-rate-audit work secured similar positions in other agencies or with common carriers, although about 125 war-service appointees accepted lower-graded clerical positions with us.

In accordance with my stated purpose to have appraised and determined the effectiveness of the accelerated audit, during November 1947 a reaudit was undertaken of a representative segment of about 25 percent of the transportation payments made during April 1944 for the account of the United States. I have only this week been advised of the results of this reaudit, which may be summarized as follows:

Freight vouchers

1. Audit personnel, due principally to overzealousness on the part of both supervisors and auditors who were making every effort to bring the work to a current status, did not uniformly comply with established audit procedures and policies left in effect by the accelerated audit program. As a further factor contributing to this result, large numbers of relatively inexperienced employees made many errors without realizing that they were doing so.

2. As a result of the above, many vouchers initially were sent to the files without being properly audited or without the proper completion of audit action, subject to recall and correction at the time of the contemplated reexamination.

3. After reauditing of about 370,000 bills of lading on which nearly 60 million dollars were paid and 2 million dollars were charged back in the original audit, we now find additional overpayments of about 1 million dollars, which, due to errors, oversights, or other reasons above outlined, were not caught in the original audit. This reaudit covered 1 percent of the bills of lading audited during the period the accelerated audit was in effect, namely, October 1, 1945, to June 30, 1947.

4. That test reaudit now completed in accordance with my plan indicates that on vouchers audited during the period stated in item 3, covering payments made from January 1, 1943, to September 30, 1946, there remain for recovery overpayments approximating $100,000,000.

Passenger vouchers

1. Established audit procedures were substantially complied with. While the reaudit indicated some errors of the types shown above, the total additional overpayments due to such errors discovered in the reaudit amounted to only one-tenth of 1 percent of the amounts paid. (See attached statistical exhibit.)

Complete summaries of the results of the reaudits of freight and passenger vouchers are attached as an appendix.

In the light of these facts I have directed a complete reaudit of all freight transportation vouchers submitted to the General Accounting Office with accounts covering the period January 1, 1943, to September 30, 1946.

Needless to say, had I known in the early part of 1947 what the test reaudit now discloses, I never would have permitted the separation at that time from the General Accounting Office of as many, if any, qualified transportation rate personnel or submitted a correspondingly reduced appropriation estimate. On the other hand, considering the data before me at the time, I could not have made a different decision.

As to the accelerated audit program, I am still convinced of its timeliness and efficacy. The fact that unexpected, and perhaps inexcusable, errors were made does not alter the benefits which the Government has enjoyed as a result thereof; that is, the collection of nearly a quarter of a billion dollars representing overpayments which for the most part would not have been reached in the audit even to the present date under the procedures existing prior to October 1945, and in great part might never have been collected in the absence of a drastic revision in such procedures. Some of it, we know, in cases of defunct carriers, could not now be collected.

The precise requirements as to manpower, the probable duration of this reaudit, and its effect upon current operations have not as yet been finally determined, but it is highly probable that I shall be forced to request a supplemental appropriation for the fiscal year 1949 to accomplish this purpose.

LINDSAY C. WARREN, Comptroller General of the United States.

2 This does not contemplate abandonment for the purposes of the reaudit of the $50 minimum rule adopted in connection with the accelerated audit procedure and explained above.



Analysis of test reaudit of about one-half of the freight transportation vouchers paid in the April 1944 account of Lt. Col. M. B. Hale:

Total vouchers reaudited__

Total bills of lading reaudited.

Total amount disbursed___

Overpayments stated and issued in original audit:


Amount disbursed

Amount of overpayments stated--.

Errors disclosed in test reaudit as to additional notices of overpayment which should have been, but were not, issued in orig

inal audit:


Amount disbursed

Amount overpaid

Overpayments disclosed by information received subsequent to original audit as to which notices of overpayment would have issued in due course:


Amount disbursed_.

Amount overpaid.......

Overpayments not stated in original audit and disclosed in test reaudit where amounts overpaid represent sums from $10 to $50 per bill of lading:


Amount disbursed

Amount overpaid

Vouchers reaudited which were paid for total sums of $100 or



Amount disbursed

63, 200 371, 304 $59, 130, 758. 66

3, 669

$14, 716, 970. 86 $2, 671, 796. 31


$8, 166, 295. 28 $1,057, 592. 19


$334, 488. 64 $96,059, 43

1, 051

$1, 229, 084. 65 $61, 881. 57

24, 970

$686, 392. 72

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The foregoing represents on-the-job salary costs for the work actually accomplished by the auditing organization during the test reaudit. It does not take into account any cost for annual or sick leave of employees assigned either wholly or part time to the reaudit. Nor does it include the cost of developing information required to permit final determination of the correctness of the charges involved on bills of lading under transit arrangements, which usually requires 'extensive development and correspondence over a long period of time. Neither do the stated costs include the cost of transporting and preparing vouchers for audit, effecting collections, or final assembly and disposition of accounts. These added costs will be very substantial. It must be borne in mind also that in our desire to insure the maximum of speed and accuracy a preponderance of the group of auditors assigned to the task were selected from the best qualified available personnel. In the case of a complete reaudit it is doubtful that the same degree of individual efficiency and level of individual production can be maintained.

It must be expected, too, that the reaudit may give rise to increased resistance of the railroads to collections and increased activity on their part in presenting claims, which will again add to the cost of the whole operation.


Analysis of test reaudit of about one-half of the passenger transportation vouchers paid in the April 1944 account of Lt. Col. M. B. Hale :

Total vouchers reaudited__

Total transportation requests reaudited.
Total amount disbursed___.

Overpayments stated and issued in original audit:


Amount disbursed

Amount of overpayments stated.

Errors disclosed in test reaudit as to notices of overpayment which should have been, but were not, issued in original audit : Vouchers

Amount disbursed_

Amount overpaid__

Possible errors disclosed in test reaudit as to which further investigation is required:


Amount disbursed_.

Possible overpayments_

Overpayments disclosed by information received subsequent to original audit as to which notices of overpayment would have issued in due course:

13, 335 231, 100 $21, 815, 641. 85


$12, 628, 176. 69 $359, 543. 08


$2,039, 276. 45 $27, 432, 35


$620, 563.90 $27, 660. 31


Amount disbursed__.

Amount overpaid


$1,855, 652.95 $36, 597.47

Overpayments not stated in original audit and disclosed in test reaudit where amounts overpaid represent sums from $10 to $25 per voucher:

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1 See explanation under heading "Salary costs for the conduct of freight reaudit."


Washington, March 30, 1948.


Chairman, Committee on Interstate and Foreign Commerce,

United States Senate, Washington, D. C.

MY DEAR SENATOR: This is in response to your request for the views of this Department concerning the bill (H. R. 2759), to amend the Interstate Commerce Act, as amended, so as to provide limitations on the time within which actions may be brought for the recovery of undercharges and overcharges by or against common carriers by motor vehicle, common carriers by water, and freight forwarders, which was passed by the House of Representatives on January 13, 1948. This bill, H. R. 2759, would amend the Interstate Commerce Act to provide periods of limitation in actions at law on behalf of or against motor carriers and freight forwarders, and would amend the present limitations governing proceedings involving water carriers. The Interstate Commerce Act does not now provide for limitations of actions in proceedings involving motor carriers or freight forwarders. The act, however, does contain a 2-year limitation in part I governing actions involving railroads (sec. 18 (3)), and a 3-year period in part III controlling actions affecting water carriers (sec. 306 (f) (1)). The purpose of the bill is to establish uniform periods of limitation as to all complaints 82058-48

filed against or on behalf of all carriers or forwarders subject to the act and to eliminate the confusion caused by the various applicable statutes of limitation. This would be accomplished by leaving unchanged the present limitation provision in part I applicable to railroads and pipe lines, by amending part III to reduce the existing period and by adding new provisions in parts II and IV in order to cover motor carriers and freight forwarders.

This bill would achieve a desirable uniformity in the adjective law applying to all carriers and forwarders subject to the act, and its enactment is recommended by the Department of Justice.

In the debates on this bill in the House of Representatives Congressman Wolverton, chairman of the House Committee on Interstate and Foreign Commerce, took the position that the periods of limitations proposed by the bill did, and in his opinion should, apply to the United States as a shipper, although not mentioned therein. He cited, in support of his position, the 25-year-old decision of the Interstate Commerce Commission in United States v. Director General (80 I. C. C. 143 (1923)).

Despite Congressman Wolverton's statement it is not believed that the limitations in this bill would or should be construed as applying to the Government. In general, the United States is not bound by a statute of limitations in the absence of clear evidence of legislative intention to the contrary (Dupont de Nemours v. Davis, 264 U. S. 456 (1924); Southern Pacific Ry. v. United States, 62 Ct. Cl. 391 (1926); see also United States v. United Mine Workers, 330 U. S. 258, 272 (1947); Utah Power & Light Co. v. United States, 243 U. S. 389, 408 (1916)). The Dupont and Southern Pacific cases specifically involved the statutes covering suits by and against the railroads for undercharges and overcharges, and hold that the limitations provisions do not apply to the Government. The Interstate Commerce Commission decision relied upon by Congressman Wolverton (United States v. Director General, supra) was for all practical purposes overruled by the Dupont case.

Enactment of this bill H. R. 2759, without any action in the Senate to counteract the interpretation expressed by Congressman Wolverton, might give rise to uncertainty. Although Congressman Wolverton's position is at variance with what is believed to be the law, it might be seized upon by those whose interests dictate a contrary view as evidence of the legislative intent to change the law. The Government is presently engaged in an effort to obtain redress under existing law for excessive charges collected from it. As a strictly legal matter it is not believed that Congressman Wolverton's statements could be considered in connection with the pending actions. Statements on the floor of Congress, however pertinent as evidence of the meaning of the pending legislation in connection with which the statements were made, cannot be invoked to modify, qualify, or otherwise affect the meaning of statutes previously enacted by Congress (United States v. United Mine Workers, 330, U. S. 258 (1947); United States v. American Trucking Association, 310 U. S. 534 (1940); see also United States v. Hutcheson, 312 U. S. 219 (1941)).

An amendment to the statute specifically exempting the Government from the application of the limitations provision would appear to be superfluous in view of the traditional rule that a statute of limitations is not applicable to the Government unless it is clearly so indicated. It is believed, however, that appropriate statements should be made for the record in the Senate indicating a clear intent on the part of that body that the limitations contained in the bill are not intended to apply to the Government.

The Director of the Bureau of the Budget has advised this Department that there is no objection to the submission of this report.

Sincerely yours,

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Chairman, Committee on Interstate and Foreign Commerce,
United States Senate, Washington, D. C.

MY DEAR SENATOR WHITE: At the request of the committee, I wrote to you on March 30, 1948, stating the views of the Department of Justice concerning H. R.

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