AGENCY ANNUAL REPORT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84-00780R004900020006-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 26
• Document Creation Date: December 14, 2016
• Document Release Date: November 18, 2002
• Sequence Number: 6
• Publication Date: July 24, 1972
• Content Type: MF

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TCIA-RDP84-0078OR04980OW
24 JUL 1972
MEMORANDUM FOR: Deputy Director for Support
SUBJECT : Agency Annual Report
REFERENCE : Memo to Office Heads dtd 6 Jul 72,
same subject (DD/S 72-2676)
There is attached the Office of Finance contribution to the
Agency Annual Report for FY 1972 as requested by reference.
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WARNING NOTICE
SENSITIVE INTELLIGENCE SOURCES
AND METHODS INVOLVED
NATIONAL SECURITY INFORMATION
Unauthorizci Di:ciosure Subject to ec assiTie upon remova
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 Office of Finance
Annual Report
(In Format Prescribed by DD/S 72-2676)
I. Major Developments
D. CIA in the Intelligence Community
1. Office of Finance
(a) Among the more significant events of the year were changes
in the leadership of the Office of Finance. Mr. W. Edward
Brooks was appointed as Director of Finance effective 25
November 1971, replacing Mr. Lester E. Bush who retired
30 November 1971. Mr. Brooks then suffered a fatal heart
attack on 2 February 1972. He was succeeded in office by
the Deputy Director, Mr. Thomas B. Yale.
(b) Economic decrees by the President on 15 August 1971 to
protect the dollar resulted in severe currency fluctuations
in all major currency centers. The situation remained
unstable until the 19 December 1971 Washington agreement
WARNING NOTICE
SENSITIVE INTELLIGENCE SOURCES
AND METHODS INVOLVED
NATIOI'!AL SLI,'J III' ;~~rL'~~t' A1iON
Unaut:ic riz. l Ui c`o 3t ijcct io
C ,: n. 13 is.Approve
FOL
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E. Budget Trends
1. Office of Finance
(a) The Office of Finance budget for FY 1972 was
Actual expenditures were
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of which 96 percent
represented personnel costs. The remainder was for other
normal operating costs (travel, routine procurement of non-
stock supplies and equipment, etc.). Total FY 1972 expendi-
tures were up by some two percent over FY 1971 expenditures
It should be noted that the January 1972
Federal salary increase more than offset the budgetary savings
resulting from the reduced staffing level in FY 1972 (average
on duty strength of for FY 1972 in comparison with an
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for FY 1971).
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Major Accomplishments and Failings
D. Support
4. Other
a. Office of Finance
(1) Management
(a) Effected a reorganization of the Office of Finance
designed to streamline the chain of command,
improve overall financial support activities, and
provide for more effective utilization of senior
personnel resources. The changes involved are
summarized as follows:
(1) Modification of the former multiple Deputy
Director concept by eliminating the three
directorates as separate organizational entities.
(2) Separation of the financial analysis function from
the intra -Governmental liaison function.
(3) Establishment of two new senior positions--an
Assistant to the Director (of Finance) for Liaison
concerned with intra-Governmental liaison and
funding, and a Chief, Plans and Systems concerned
with policy, planning, financial analysis and ADP
liaison.
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(b) Effected organizational changes within several of
the staffs and divisions of the Office of Finance to
streamline operations and to make more effective
use of manpower.
(1) In the Compensation and Tax Division, two
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lished with the objective of optimizing support to
Agency components on the basis of the geographic
location of the employees rather than by type of
employees.
(2) The merger in May 1971 of the Proprietary
Systems and Accounts Division and Industrial
Contract Audit Division to form the Commercial
Systems and Audit Division was accompanied by
a change in management philosophy under which
increased responsibility for audit reporting in a
final product format was assumed by the auditors.
This has resulted in an increase in production
and in an improved quality of reporting.
(3) Two functional branches within the Certification
and Liaison Division were combined into a single
branch designated as the Certification Branch.
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This merger was made practicable in part by
the completion of a secure area on the fifth floor
of the Key Building.
(c) Increasing emphasis was placed on internal and
external training in the ADP, computer, and infor-
mation science areas in preparation for effectively
staffing the planned Data Management Center and to
improve our capability for carrying out our increasingly
more complex and sophisticated financial analysis and
related responsibilities.
(d) Several affirmative actions were taken during the
year to enhance communications between management
and the Career Service membership.
(1) There was formally established a Financial
Advisory Group of SF Careerists to serve in
an advisory capacity to the Director of Finance
(as Head of the SF Career Service) and to other
senior SF management officers by identifying
and making recommendations about issues,
problems and procedures pertinent to the SF
Career Service and to the functions with which
its members are concerned.
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(2) The Director of Finance also initiated a series
of informal discussions with small groups (6) of
SF Careerists selected at random to represent
a cross section of the Career Service without
reference to grade, position or sex. These
discussions also are for the purpose of identifying
topics of mutual interest and concern within the
general area of activities for which the Director
of Finance is responsible.
(3) As a result of ideas generated in part from the
above forums, the Office of Finance for the first
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(a) In April 1972 circulated to all SF Careerists
in Headquarters a list of
field SF positions to be filled in 1973.
(b) In May 1972 published a "Newsletter" for SF
Careerists in the Headquarters area containing
information considered to be useful and infor-
mative. Principal topics for future issues of
the "Newsletter" will be recent and pending
personnel assignments, procedural develop-
ments and other topics of general interest.
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(2) Operations
(a) Attempted in conjunction with SIPS to implement a
revised computer payroll system to become opera-
tional on the first pay period in 1972. In preparation
for this action, printed payroll forms, prepared and
distributed instructional material, processed a com-
plete conversion of required master file data for the
new payroll system and processed all payroll data for
the last four biweekly pay periods in 1971 in parallel
to satisfy the requirements of the ongoing system as
well as to satisfy requirements for the new payroll
system. Unforeseen programming difficulties resulted
in a decision to delay implementation of the revised
payroll system.
(b) Promulgated a book dispatch (No. 8368, dated 4 May
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1972) outlining for the first time in "layman" terms
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The dispatch provides compre-
hensive coverage and explanation of these programs
in a format which will serve as a continuing reference
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document for field personnel. A principal purpose
of the dispatch was to enhance the understanding of
field personnel of the scope of the programs as they
relate to local support requirements and the manner
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A reduction of correspondence concerning local
application of these programs has already been noted.
(c) Adopted a single world-wide factored man-year cost
for distributing administrative costs billed by the
These factored costs are now
distributed (1) based on the total number of man years
overseas and (2) only to the Office of Communications
and to the DDP divisions. Other components with
I n their rolls budget only for
salaries and related benefits. This procedure has
greatly simplified the financial process for all
components concerned.
(d) In coordination with the Central Cover Staff concluded
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arrangements wit or the use of
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(e) Initiated a pilot microfilming project in March
1971, which has continued through FY 1972, to ascer-
tain the feasibility of microfilming records normally
retired to the Records Center in hard copy for twelve
(or more) years. The microfilming effort has been
determined to be both feasible and practical and the
program will be continued on a limited basis until
sufficient personnel resources are available to keep
pace with current receipts of record material. We
expect to be operating on a current basis with the use
of contract personnel in early FY 1974.
During FY 1972, 998 microfilm reels were
produced, replacing approximately 500 cubic feet
of paper records. Through the end of FY 1972, 505
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reels had been deposited in the Records Center,
occupying some 7-8 cubic feet of storage space.
When our microfilming program is fully implemented,
yearly deposits in the Records Center of Finance records
included in this program will be reduced from about 800
cubic feet per year to approximately 25 cubic feet, a
reduction of 97%. Since these records are kept for 12
years (with certain payroll records kept for 56 years),
this will ultimately result in a net savings of over
9, 000 cubic feet of storage space. This is in addition
to the one-time reduction in storage space noted in
the paragraph immediately following.
As a result of negotiations by the Office of Finance
and the Deputy Director for Support with the Deputy
Director for Plans, concurrence was obtained to reduce
the retention period for most field and certain Head-
quarters finance records from 30 years to the legal
requirement of 12 years. As a result of this agree-
ment, 3, 202 cubic feet of Office of Finance records
dated prior to 1960 immediately became subject to
destruction. Some 1, 300 cubic feet of these pre-1960
records were destroyed during the past year and the
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(f)
remainder will be destroyed as necessary screening
can be completed.
In cooperation with other agencies dealing with world-
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(g) A joint Civil Service Commission - CIA Project was
initiated to review pertinent CSC records to identify
employer retirement contributions of employees who
transferred to the CIA Retirement and Disability
Retirement System prior to 31 December 1970. The
transfer of such contributions to the CIA Retirement
Fund was required by PL 91-626. The Project was
carried out by four Agency employees under the super-
vision and guidance of CSC personnel and required the
in a transfer to the CIARDS Fund of
review of employee retirement files and resulted
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(h) Improved the process for maintaining a master
register of Agency officials having authority to
authorize travel and/or approve financial trans-
actions. Such an up-to-date register is essential to
the proper discharge of certification responsibility
of certification officers.
(i) Completed the first full year test of computer pro-
cesses to determine the correctness of monetary
values on posting vouchers. During the year some
90,000 vouchers representing 900,000 line items
were processed through this program. Errors
identified by the computer for correction averaged
only one for each 2, 000 line items.
(j) Published the narrative and supporting statistical
tables for the CIA Retirement System evaluation as
of December 31, 1968, updated to June 30, 1970.
(k) Completed the Office of Finance contribution to
the Agency History for the period from organization
through 1966.
(1) Prepared a Procedures Manual for the
Staff covering the highlights of the procedures of
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(m) Hard copy computer financial outputs for FY 1969,
1970 and 1971 destined for long-term storage as part
of the records retirement plan were converted to
microfilm. Current outputs are now produced on
microfilm by the computer and the film is used for
both reference in current operations and eventual
long-term storage.
(n) Established procedures and implemented withholdings
from the annuities for CIARDS annuitants for UBLIC
insurance and for Credit Union share accounts.
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(q) Established in coordination with the Office of General
Counsel a proposed policy statement now in coordina-
tion for criteria to be observed in recording obligations
for procurement of services or property from other
agencies. Except for special guidelines established
for construction related activities, orders (other than
those required by law or statutory authority to be
placed with another agency) must be placed in time
to permit obligation by the other agency prior to 30
June of the current year; obligations for such orders
not so obligated by the other agency are invalid.
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(r) Provided all aspects of the financial support
required for the new and rapidly expanding Voluntary
Investment Plan for which initial investment was made
on 25 June 1971. A considerable amount of time and
effort has been involved in the support of this program
from the standpoint of accounting and reporting trans-
actions as well as from the standpoint of developing
and refining procedures and reporting formats.
(3) Financial System
Continuing attention and increased resources were
applied during the year to the improvement of the existing
financial system and related procedures and to the develop-
ment of a highly automated, Integrated Financial Management
System which will permit management to take full benefit of
current technology of computer capabilities. Principal
achievements in improving the present system and in
developing the proposed system are summarized as follows:
(a) Significant progress was made during the year on
the Integrated Logistics and Finance Contract System
(CONIF III) being developed on a working team basis
with a SIPS Task Force. The proposed system will
eliminate duplicate contract records and will provide
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a combined data base for both logistical and financial
contract information with required data captured at
document source.
(b) Progress was made during the year in developing a
concept for a simplified financial accounting process
for field stations. Under the concept a minimum
amount of accounting would be done in the field with
information recorded to be appropriately coded for
computer processing. In concept the computer would
on the basis of coded inputs perform all operations
related to the financial accounting and reporting process
except audit and certification of transactions.
(c) An Office of Finance/SIPS work group was established
to plan for the financial aspect requirements of the Data
Management Center.
(d) Methods were implemented to simplify the Financial
Property Accounting system by modifying financial
control of nonexpendable property at non-depot type
installations. This simplification eliminated (a) dupli-
cate handling and transmission of shipping documents,
(b) some 75, 000 financial entries per year and (c) the
tracing and reconciliation of detailed property reports
from some =installations per year.
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III. Ahead
A. Resource Outlook
1. Office of Finance
Based upon the present budget outlook for FY 1973, it
appears the resources available to the Office of Finance in
terms of manpower will be slightly less than were available
during FY 1972. It is contemplated that the average on-duty
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strength during FY 1973 will be
average of =for FY 1972.
C. Techniques
4. Othe r
a. Office of Finance
(1) Financial System
0
in comparison with an
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It is apparent based upon an objective review of the
overall operations of the Office of Finance, recognizing
the volume and complexity of transactions and the wide
geographical dispersion of locations at which transactions
originate, that any basic and fundamental improvements in
the efficiency with which activities are conducted must
come through the development of procedures and systems
which will take full benefit of current technology of computer
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capabilities. Much work has already been done toward
such developments. Positive efforts have been and are
continuing to be made to train and stimulate the interest
of SF Careerists in current technology and in innovative
processes. Accomplishment goals in this area for the
current year include the following:
(a) Complete and implement the revised payroll system.
(b) Continue to participate with the SIPS Task Force in
development of the Financial Resources System;
first priorities are being given the Budget Control
sub-system, the automated CONIF III system, and
a phased implementation of the Key Building Data
Management Center.
(c) Develop an improved data base and reporting format
for recording advances and reimbursements to and
from other Government agencies. Recent require-
ments for information generated in part from con-
gressional sources has entailed lengthy research and
it is believed that an improved data base must be
developed.
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(d) Develop and implement an automated system for
controlling property requisitioning authorizations.
Such a system will eliminate a manual record keeping
requirement and would improve the data base available
for budgetary purposes.
(e) Continue work on concept for simplified financial
accounting process for field stations including
participation with the Office of Communications in
an experiment utilizing current communications
technology for transmission of financial information
for direct input to the computer.
(f) Participate with the Office of Training in the develop-
ment of a custom tailored course primarily for SF
Career personnel to be offered by the recently acquired
Information Science Training facility.
(2) Other
Accomplishment goals in other areas of Office of
Finance activity include the following:
(a) Continue positive action to upgrade the quality and
professional competence of the Office and of the SF
Career Service as a whole through highly selective
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recruitment, both external and internal training
with particular emphasis on the acquisition and/or
improvement of technical (e. g. , financial analysis,
information science, etc.) and managerial skills,
and rotational assignments designed to maximize
staff development while at the same time increasing
and broadening our budget and finance experience
base. Participate with representatives of SIPS and
OTR in the development of the first of several budget
courses.
(b) Complete the development of Inbound Commuted Rate
Schedules for use in conjunction with return PCS
travel from posts abroad and for home leave travel
between tours abroad.
(c) Compile and publish a Digest of decisions by the
Director of Finance, General Counsel and other
management officials which relate to general finance
entitlements of employees. The purpose of the Digest
would be to provide the Certifying Officer with a common
source of material for guidance in dealing with questions
similar to those which may have been previously resolved
by competent authority.
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(d) Attempt in coordination with Office of Logistics to
develop ways and means of accelerating the process
for closing contracts with industrial contractors.
Under present practices final settlement of contracts
is seldom effected prior to the lapse of the appropriation
against which the contract was obligated.
(e) Institute a comprehensive review process of decen-
tralized financial facilities at Headquarters and selected
field stations. The objective is to provide a general
review on behalf of the Director of Finance of activities
for which the Director of Finance is responsible.
(f) Give more attention to the expanded audit require -
ments levied by the "Truth in Negotiations" act
which is applicable to procurement by fixed price
contracting.
(g) Increase use of Computer Originated Microfilm in
our day to day operations as well as the microfilming
of archives records for better use of space, here
and at the Records Center.
(h) Develop a mechanism for gaining secure access to
proprietaries in order to perform in-depth surveys
of their accounting systems and procedures.
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