were not filed nor were the required taxes paid. (See p. 20) Salary advances made from a cash imprest fund False authorizations for travel to Annapolis, Maryland, were used to obtain cash advances of about $18,000 for 69 individuals. GAO was told by a member of the transition staff that the subterfuge of travel advances was used because the GSA payroll system was not fast enough to accommodate the needs of some transition staff members for salary payments.. GAO found that GSA expedited the first payroll and some subsequent ones for the transition staff. The principal hold up in salary payments was the transition staff's delay in providing GSA with necessary payroll data. The advances for the purported trips to Annapolis were made by a GSA cashier from a cash imprest fund maintained at one of the transition offices. GAO obtained contradictory stories as to who suggested the use of the icrast fund to obtain the salary advances. A transition str member maintains that the GSA transition liaison suggested it; he denies that he did. Most of the advances were made to transition staff members after they had worked for a period of time but before they received their first paychecks. A few advances were made after employees started receiving regular paychecks. All. advances have been repaid. Most repayments were made about 1 month after the employees received their. first paychecks; a few were not repaid until 3 or 4 months afterwards. Six advances, subsequently repaid, were paid to individuals who never were put on the transition payroll. (See p. 21) PROBLEMS OF THE OUTGOING ADMINISTRATION Period of availability of funds The Transition Act provides that services will be provided to a former President for a period of 6 morths after he leaves office. However, the appropriation act providing the additional $2.1 million authorized by the 1976 amendments to the authorizing act stated that the funds would be available through September 30, 1977. On the basis of a 1969 GAO decision, GSA advised the former President's staff that the language in the appropriation act would prevail. The longer period of availability provided former President Ford, as it had former President Johnson, with several advantages not available under the Former Presidents Act such as the authority to retain a larger staff, use office space in more than one location, and the authority to pay for the travel of more staff members. (See p. 25) USE OF MILITARY AIRCRAFT BY BOTH INCOMING AND OUTGOING ADMINISTRATIONS Military aircraft under the control of the White House Office were provided to both administrations. Part of the cost of the flights provided the former President were <:harged to the Secret Service but the bulk of the costs were absorbed by the Air Force. There is no authority in the Presidential Transition Act Recommendations to the Congress GAO believes that some of the problems encountered during the ForJ-Carter transition could be minimized in the future by changes in the authorizing legislation. To this end, GAO is making several new recommendations and repeating recommendations in its December 1975 report on presidential transitions which were not included in the 1976 amendments to the Transition Act. (See p. 31) If the recommendations are adopted --the Presidential Transition Act woulu apnl! --expenditure of transition funds would have to Tear Sheet --the use of military aircraft on a reimburs- would be available for use in the transition. Ali services available to the outgoing administration would be provided under the Former Presidents Act. --Funds would be available to the former --The President would be required by law to 三 --Expenditures would have to be approved in AGENCY COMMENTS The Carter/Mondale transicion director (see app. III) agreed with most of GAO's recommendat 'GET. Be disagreed, however, with GAO's recommendation that the Transition Act be amended to require that all obligations and expenditures be approved by the Administrator of General Services, except for minor Cash expenses. He suggested instead that the law be amended to make the President-elect's designee solely responsible for the use of transition funds by the incoming administration. He also suggested that the act be amended to provide funds for a small staff to wind up transition matters after the Presidential inaugural. A Ford transition staff official agreed with all of GAO's Recommendations. (See app. IV) He suggested one additional amendment whereby obligations could be incurred prior to the time a President leaves office so that certain necessary facilities would be available on the day he leaves office. As requested in your letter dated January 12, 1981, we have audited the expenditure of transition funds by the incoming Reagan administration. You asked us to report the purposes for which the funds were used, the manner in which they were administered, any problems encountered, and our comments on the adequacy of the legislation under which transition operations are carried out. You also requested that we report, to the extent feasible, on the source and use of other funds, including contributions, and on services provided by personnel whose salaries were paid from funds other than those appropriated pursuant to the Presidential Transition Act of 1963, as amended. To provide services and facilities to the President-elect and Vice President-elect during the transition period, a total of $2 million in appropriated funds were made available pursuant to the Presidential Transition Act [3 U.S.C. 102 (note)]. These funds were made available to the incoming Reagan administration by Public Law 96-369 and Public Law 96-536. Our audit showed that through January 31, 1981, obligations and expenditures of Transition Act funds were made in accordance with the act. Further, we did not observe any management problems in the use of the appropriated funds. We did not, however, audit all transition-related expenses. In addition to the $2 million provided the incoming administration under the Transition Act, funds were solicited during the transition period from the public by the Presidential Transition Foundation, Inc., a private corporation, to facilitate the orderly transfer of executive branch power to the administration of then President-elect Reagan. The corporation's counsel denied us access to the books, records, and accounts for these private funds. Consequently, we are not able to report on the total amount of funds raised or the purposes for which the funds were used. We were advised, however, that the corporation would be audited by a public accounting firm. We do know that funds appropriated pursuant to the Transition Act were kept separate and apart from funds provided the corporation by private donors. There was no evidence of commingling. (018540) B-201677 We are not making any recommendations for changes in the Transition Act in this report. However, we are reviewing transition team activities in selected agencies at the request of the House Committee on Interstate and Foreign Commerce. That review may result in recommendations to amend the current legislation. We also understand that the administration intends to recommend changes to the legislation. Our audit of Transition Act expenditures included: discussions with officials of the incoming Reagan administration and the General Services Administration (GSA); an examination of the pertinent records and documents supporting the expenditure of funds; and an examination of the agreements between GSA and the incoming administration. We reviewed all payroll transactions for three of the six pay periods of the transition period, including the applicable standard Government personnel action forms where appropriate. For expenses other than salaries and benefits, we examined all the documentation supporting the obligations and, on a test basis, examined the documents supporting the payment of the expenses incurred. PRESIDENTIAL TRANSITION ACT The purpose of the Presidential Transition Act is to promote the orderly transfer of executive power in connection with the expiration of the term of office of a President and the inauguration of a new President Transition Act funds were made available for the first time in 1964 when $72,000 was provided to the newly elected Vice President. The first use of Transition Act funds for both an incoming and an outgoing administration was in 1968-9 when $450,000 was made available to each administration. Public Law 94-499, 90 Stat. 2380, approved October 14, 1976, amended the Transition Act by: --Increasing the maximum amount authorized to be appro- --Deleting the authority to detail Government employees to either the incoming or outgoing administrations on a nonreimbursable basis. --Deleting the $100 per diem limitation for experts and consultants. |