(b) Previously unreported benefits.-The committee previously reported recoveries and savings of approximately $3 million resulting from the subcommittee's recent investigations. With full PHS implementation of the committee's recommendations for changes in the method of computing general research support grants, additional savings of at least $5 million annually are being realized. The Department of HEW has agreed to follow the committee's recommendations aimed at achieving a more equitable and prudent use of GRS funds. Of greater significance than monetary savings, the correction of administrative deficiencies brought to light by the subcommittee should bring better control of grant funds, improved coordination of Federal health research programs, and the more equitable distribution of grant funds among qualified institutions.

4. FDA Procedures for the Selection of Laboratory Sites.

(a) Summary.-The committee reported in 1967 (House Report No. 801, 90th Congress) that the Food and Drug Administration had demonstrated a serious lack of concern for economy and efficiency in selecting sites for laboratory facilities and that the Department of Health, Education, and Welfare did not have adequate administrative procedures to insure that its constituent agencies were complying with the Department's site selection regulations.

The report described FDA's selection of an alternative site for its proposed headquarters laboratory No. 2, which was originally planned for Beltsville, Md. The alternative site was selected without complying with the Department's site selection regulations and without adequate study of other possible locations. The comparative cost of constructing and operating the facility at various potential locations apparently was given little if any consideration.

(b) Previously unreported benefits.-The Department of HEW has agreed to follow the committee's recommendation that a new and objective study be conducted, in full compliance with the Department's regulations, before selecting the most desirable site for headquarters laboratory No. 2. However, the delay in initiating construction of this facility has led to a reexamination by HEW of the actual need for building additional laboratory space in view of the opportunities for better utilizing existing facilities. The FDA project is being held in abeyance pending HEW's determination of this question. If no new construction is required, the estimated saving would approximate $25 million. In the event headquarters laboratory No. 2 is required and is built in compliance with HEW's site selection regulations and Government-wide policies, the initial saving will exceed $5 million if the facility is located on Governmentowned land at Beltsville or, alternatively, in a low-cost area.

FOREIGN OPERATIONS AND GOVERNMENT INFORMATION SUBCOMMITTEE

FOREIGN OPERATIONS

1. More Efficient Use of U.S.-Owned Foreign Currencies.

(a) Summary.-Following a recommendation made by the committee 5 years ago, the subcommittee worked with officials of the Social Security Administration, the Treasury Department, and the State Department for the implementation of recommendations which resulted in the payment of U.S. annuitants who are residents of Poland and Yugoslavia with U.S.-owned local currency instead of dollars. As a result, payments to Polish annuitants were made in U.S.-owned zlotys in 1968, 1969, and 1970 and payments to Yugoslavian annuitants were made in U.S.-owned dinars in 1966 through 1970.

(b) Previously unreported benefits.-Dollar and balance-of-payments savings totaling about $15.4 million were saved in 1969 and 1970 as a result of the committee's recommendation to pay annuitants in U.S.-owned zlotys and dinars.

2. More Efficient and Effective Audit of U.S. Economic Aid Programs.

(a) Summary.-Since October 1966, when the committee issued its first major report on U.S. assistance to Vietnam, the committee has been highly critical of the limitations and lack of independence in the conduct of foreign aid audits and has made 16 formal recommendations and numerous in formal recommendations to expand the scope and improve the independence and effectiveness of worldwide audits of U.S. aid programs. As a result of its recommendations, a new audit concept and the creation of an Auditor General evolved within AID.

On June 16, 1969, AID's Administrator announced the establishment of a single integrated organization for all auditing, inspection, and security offices under an Auditor General reporting directly to AID's Administrator in Washington.

On October 30, 1969, AID's Administrator approved the integration of all mission-based audit activities into a single unified audit operation. This new arrangement is being implemented in accordance with such concepts as

(1) The establishment of a series of area audit offices at overseas locations;

(2) The transfer of the overseas audit function and personnel from the mission's control to the direct control of the Auditor General;

(3) The transfer of auditors from the missions to the area offices wherever practical;

(4) The conduct of audits on a professional basis pursuant to generally accepted standards for internal auditing; and

(5) Assigning personnel ceilings and funding allocations for overseas audit function directly to the Auditor General.

(b) Previously unreported benefits.-No tangible benefits can be reported at this time because of the newness of the action. Complete integration of the audit, inspection, and security activities into a single

unified audit operation at the Washington and field levels when fully implemented, however, will result in millions of dollars of savings in future AID programs. Full integration and consolidation of audit and related functions under the Auditor General will insure audit independence, expand the scope of worldwide audits and management reviews, and result in greater efficiency and economy in AID operations and personnel reductions worldwide.

GOVERNMENT INFORMATION

1. Administration of Stars and Stripes.

(a) Summary.-Pursuant to a continuing study of the operations of Stars and Stripes-a U.S. military-owned daily newspaper published in the Far East and Europe for servicemen-the subcommittee staff, responding to a congressional request, inquired into the economic impact of selling the European edition to private interests.

Investigation revealed that the European edition in fiscal year 1968 operated at a net loss of $1,622,600. The operation deficit is offset by revenues from job printing and sales of other publications on franchised newsstands. Appropriated funds are not used to publish the newspaper. There is no advertising revenue.

Staff inquiry indicates numerous offers have been made by individuals and publishers to purchase the European edition of Stars and Stripes. The U.S. Army European Command has rejected the offers on the grounds that a privately owned publication would not meet military requirements as a troop newspaper which is considered a "morale builder" and a "tool of command" designed to keep servicemen informed of worldwide news as well as official military matters. (b) Previously unreported benefits.—None.

2. Freedom of Information Act Regulations.

(a) Summary. The staff continues its review and analysis of regulations issued by Departments and agencies to implement the Freedom of Information Act.

LEGAL AND MONETARY AFFAIRS SUBCOMMITTEE

1. Federal Effort Against Organized Crime.

(a) Summary.-In the 90th Congress, the subcommittee initiated an investigation designed to evaluate and improve the efficiency and economy of the operations of the Federal agencies engaged in the Federal effort against organized crime. After an indepth study that included 8 days of hearings, the committee issued House Report No. 1574 on June 20, 1968, titled "Federal Effort Against Organized Crime: Report of Agency Operations."

This began the first phase of the study into the role of Federal agency operational efforts against organized crime, past, present, and prospective.

In considerable detail the report defines organized crime, its scope and extent, its huge income from criminal enterprises, and the menace that it presents through the use of its illegal gains to infiltrate legitimate business, labor unions, and other elements of the private

sector.

The committee herein discusses what it considers the proper Federal role should be in fighting organized crime. It comments on the status of the Federal effort and makes suggestions for improvement.

During the 91st Congress the subcommittee assessed the sufficiency and quality of Federal agency training components designed to upgrade internal and interagency capabilities in the overall Federal effort against organized crime.

(b) Previously unreported benefits.-The Justice Department has expanded organized crime strike force operations. Elements of the Justice Department, specifically the FBI and the Law Enforcement Assistance Administration; have upgraded training programs in the organized crime field. A number of Federal agencies, notably the Securities and Exchange Commission, have established organized crime control units.

2. U.S. Coast Guard Ship Safety Standards.

(a) Summary.-Following the 1965 SS Yarmouth Castle tragedy in which 90 persons lost their lives while on a cruise from Miami to Nassau the subcommittee held public hearings to study Coast Guard operations with respect to the examination of foreign passenger vessels. Resulting from that study House Report No. 1663, 89th Congress, second session, entitled "Coast Guard Examination of Foreign Passenger Vessels" was issued. This report contained numerous recommendations for improving the Coast Guard's control over the safety of foreign vessels that carry U.S. passengers. Subsequently the Congress imposed additional safety requirements on such vessels.

(b) Previously unreported benefits. The Coast Guard has taken many steps to improve its operations with respect to the examination of vessels and to enforce rigidly the law and procedures pursuant to committee recommendations.