otherwise payable. The General Accounting Office has followed the procedure of recommending to the Department of Justice that against such suits counterclaims be interposed to recover the erroneous or illegal payments. The real contest in the court in such cases turns not on the claim set up in the petition, but turns on whether the expenditure set up in the counterclaim, if one was filed, was erroneous or illegal. Whether the issue arises on a counterclaim, or in a suit against the debtor to recover an erroneous or illegal payment, or in defense of a suit against the Government for a payment alleged to have been authorized by the Congress, the question is essentially a fiscal one, and, as the courts are not concerned with the availability of appropriated moneys to make such payments, it not infrequently occurs that the administrative action on the facts has been such as to make very difficult, if not impossible, recovery on the claim or counterclaim against the debtor or defense of the suit against the Government.

The cooperation between the Department of Justice and the General Accounting Office in the presentation of the legislative view has been, in most instances, as satisfactory as the present procedure permits, but it is believed that it would be but logical to return to the practice originally adopted of centralizing in the General Accounting Office such defense of legislative control over public moneys.

A large part of suits against the United States brought in the Court of Claims involves legislative control over public moneys, and concerns matters which may or may not have been acted upon by this office in claims presented here or in disallowances in accounts settled by this office. The information this office may have in the matter is furnished to the Department of Justice upon a request for a report, but there still seems a need which may be supplied by having those who participated in the matter here act for the United States in the court proceeding and I recommend to the consideration of the Congress that in reporting to the Department of Justice upon claims against the United States-whether the matter thereof may have been before this office or not the Comptroller General be authorized to recommend to the Attorney General the assignment of an attorney of this office to appear therein and that such assignment shall be made accordingly. This may well be made applicable also to the suits of this nature brought against the United States in other courts than in the Court of Claims. Such suits are more limited in number, but equally important and far reaching in their results, and the familiarity of the representatives of this office would be a valuable assistance to the United States attorney of the particular district.

The collection of $7,395,646.16 made by the General Accounting Office during the last fiscal year should be contrasted with the total net appropriation of $3,859,960 made by the Congress for its support during said fiscal year and the total appropriation of $5,581,497.91 made by the First Congress for the support of the entire Government establishment during the period from June 1, 1789, to March 3, 1791. Vast as has been the amount of collections there doubtless have been greater amounts not erroneously or illegally paid because of the knowledge that the legislative office existed with responsibility to scrutinize all payments and to report to the Congress when report thereto is warranted. There have also been payments aggregating considerable sums which were dismissed to the files as uncollectible

because the administrative action on the facts made recovery prohibitively difficult and vast sums have been credited under validating legislation of the Congress, such as the acts of May 26, 1926 (44 Stat. 654), concerning dependency allowances erroneously obtained by military and naval officers; July 3, 1926 (44 id. 815), concerning military and naval service overpayments; and id. 914, concerning contract overpayments by Army or Navy disbursing officers.

The contrast of the collections with the expenses of the General Accounting Office is sufficient to demonstrate the economy in its maintenance and this without reference to the erroneous payments prevented by its existence and the amounts which could not be collected because of administrative action. The contrast of such collections with the expenses of the entire Government for approximately two years when first organized should commend to the Congress the desirability, even necessity, of making such changes in our disbursing system as will operate to reduce erroneous and illegal payments to a minimum. I am convinced that such ends are not to be obtained by continuation of the present system with more than one thousand disbursing officers in continental United States alone making payment of expenses incurred by their superior administrative officers, to whom they are responsible not only for their advancement but for retention in their positions. I earnestly hope that the Congress will act upon the recommendation made in my annual report for the fiscal year 1926, and renewed herein, that there be such reformation of the present system of making payments of obligations of the United States as will effect possible economies and reduce to a minimum erroneous and illegal payments.

The following pages set out in detail the work of the General Accounting Office during the past fiscal year, and I earnestly recommend their perusal and study by the Members of the Congress, in order that they may be fully informed of that part of their responsibility to the people the accounting for public money-which is not less than their responsibility for raising and appropriating same.

There are also set out in the following pages of my annual report for the fiscal year 1927 some suggestions for additional legislation which I have concluded in the administration of the General Accounting Office to be necessary to secure a greater degree of economy or efficiency in either the expenditure or accounting for public funds. Some are renewals of suggestions contained in my prior annual reports, and it is hoped that the Congress will give consideration thereto, and, further, that consideration will be given the desirability of creating committees on accounts in both the Senate and the House of Representatives, whose function it will be to receive and consider the recommendations of the Comptroller General made in furtherance of legislative control over an accounting for expenditures of public funds, and any bills or parts of bills the enactment of which into law may affect that control.

J. R. MCCARL, Comptroller General of the United States.

Pursuant to section 312 (a) of the Budget and Accounting Act, 1921 (42 Stat. 25), there is submitted the annual report of the Comptroller General of the United States for the fiscal year 1927.

LEGISLATIVE

Section 312 (a) of the Budget and Accounting Act, 1921 (42 Stat. 25), provides that

The Comptroller General shall * * make to the * * * Congress at the beginning of each regular session, a report in writing of the work of the General Accounting Office, containing recommendations concerning the legislation he may deem necessary to facilitate the prompt and accurate rendition and settlement of accounts and concerning such other matters relating to the receipt, disbursement, and application of public funds as he may think advisable. In such regular report, or in special reports at any time when Congress is in session, he shall make recommendations looking to greater economy or efficiency in public expenditures.

LEGISLATIVE RECOMMENDATIONS

Pursuant there to the following legislative recommendations are made as deemed necessary to facilitate the prompt and accurate rendition and settlement of accounts, concerning other matters relating to the receipt, disbursement, and application of public funds, or looking to greater economy and efficiency in public expenditures.

RETIREMENT

Effective date. It would simplify accounting and computation for pay and retirement deductions if, in the future, Federal personnel could be uniformly retired as of the first day of the month in which their retirement otherwise would occur.

Legislation for the purpose is recommended as follows:

That hereafter retirement authorized by law of Federal personnel of whatever class, civil, military, naval, judicial, legislative, or otherwise, and for whatever cause retired, shall take effect on the first day of the month following the month in which said retirement would otherwise be effective, and said first day of the month for retirements hereafter made shall be for all purposes in lieu of such date for retirement as may now be authorized.

This act shall become effective July 1, 1928. All laws or parts of laws, in so far as in conflict herewith, are repealed.