(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-01240A000100140076-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 9, 2016
• Document Release Date: July 24, 2000
• Sequence Number: 76
• Publication Date: May 5, 1960
• Content Type: MF

Approved For Release 2001/09/04: CIA-RDP80-01240A000100140076-4
May 5, 1960
MEMORANDUM FOR THE FILE
On April 13, 1960, Messrs. Abbadessa, Pahl and I met with
Col. L. K. White, Deputy Director for Support, Central Intelligence
Agency, and his associates to discuss the progress of our preliminary
review at Central Intelligence Agency, which to date indicates that
we might not have sufficient access to records to make a reasonably
satisfactory comprehensive audit. Mr. Pahl has prepared a more complete
memorandum on this meeting, which memorandum is on file in his office
at Central Intelligence Agency.
The discussions of CIA representatives may be summarized as
follows.
1. That access to any matters having to do with covert
operations would be denied under their interpretation
of the Director's letter to the Comptroller General
dated October 16, 1959, and the reply by the Comptroller
General dated October 21, 1959.
2. Under this interpretation we would have no access to
the organization responsible for the covert activities,
nearly complete access to the interpretive and similar
activities, and access only in part in the Support area.
3. Col. White suggested we concentrate our review on the
interpretive and similar activities, at least at the
outset (not acceptable to me since our prime objective
is to determine whether we can make a comprehensive-type
audit).
Limit our staff to about three or four members.
Bureau of the Budget representatives, in review of
budgets, have more extensive access than we will have
,.because they are a part of the Executive Branch and
therefore denial to us is essentially "executive
privilege".
;.',In conclusion, we will continue our preliminary reviews to determine
whether we can make a comprehensive-type audit at Central Intelligence
A964 ; $y. For this purpose one additional staff member will be assigned
to vrk with W. Pahl. At such time as we make a determination more
definitive objectives will be reached.
:,Eamevt ?o. T. Sa,muelsoz
A'iJ!J Vf VfW3 d c. esit by CIA has A. T. Samuelson
Director Civil, Accounting
and Auditing Division
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 Approved For Release 2001/09/04: CIA-RDP80-0124OA000100140076-4
UNITED STATES GENERAL ACCOUNTING OFFICE
WASHINGTON 25, D. C.
CIVIL ACCOUNTING AND
AUDITING DIVISION
April 20, 1960
MEMORANDUM TO THE F Q
Messrs. Samuelson, Abbadessa and Pahl, CAAD, met with CIA repre-
sentatives at 4:00 PM, April 13, 1960 to discuss the status of and
problems encountered in the GAO audit of CIA activities. Colonel
White, Deputy Director for Support, H. Gates L11yd, Deputy to the
Deputy Director for Suport, E. H. Saunders, Comptroller, CIA, and
Colonel White advised that Mr. Abbadessa's clearance had been
granted giving him access to matters'developed in the GAO audit of
CIA activities to the extent necessary fro Mr. Abbadessa to dis-
charge his responsibilities as Deputy Director, CAAD.
Mr. Samuelson stated that he understood that there appeared to
be substantial differences in opinion as to the extent of the
limitations placed on the audit by the Director of Central Intelli-
gence. He stated it was his understanding that GAO would have
acess to the organizational structure of the entire Agency, and to
the policies, procedures, and practices of the entire Agency, but
that any verification work would have to be restricted to the so-
called "-ouohered" side of the house.
represented CIA in the discussion,
are paid out of "vouehered " funds.
Colonel White advised that it has always been the CIA intent
that GAO would not have any access to the clandestine services or
the activities of the support units that are in support of the
clandestine services. GAO access to the organizational structure of
the Agency and to the Agency policies, procedures and practices
would be limited essentially to those activities that are paid out
of "vouchered" funds, or to aetiti$ies that support activities that
general discussion of the GAO audit approach followed.
that CIA has placed on the audit has created many problems. A
and use aspects of the procurement actions.
Mr. Samuelson described in general .terms the usual audit
approach that is made by GAO, and stated that the limitations
but would be precluded from checking the requirements, de.livery.,_
Mr. Saunders, stated that the CIA was constantly striving to
place as much of the expenditures on the "vouchered" side of the
house as possible and that there were many contracts such as for
certain radio equipment that are charged against "unvouchered"
allotments, but are paid on the "rouchered" side of the house. G, Q_;
would have access to theses payments and the related contracts,
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Colonel White stated that his concept of an expansion of the
GAO audit would be to make a comprehensive audit of the activities
under the direction of the Deputy Director for Intelli4ence (DDI).
He stated that basically the GAO voucher audit had been limited to
DDI expenditures. At the time of the agreement to attempt to ex-
pand the GAO audit, Colonel White's thinking was that GAO would
-expand from a voucher basis to a comprehensive basis in the same
DDI area that bad been previously subject to audit. He suggested
that we might want to consider this approach rather than the
present approach through the support areas (DDS) under his direction.
Colonel White stated that in the present audit approach GAO
has selected the most limited area that we will have access to in
CIA. In reality GAO is trying to expand its audit into am
"unvouchered" area, because the activities of the support units
under his direction are principally in support of the clandestine
activities, or the office of Communications. Although GAO could
examine the policies and procedures under which such procurement
takes place, practically all of the contracts entered into for
these two groups could not be examined by GAO.
Colonel White gave a quick rundown of the DDI organization,
including theifunctions and numbers of personnel involved, and he
expressed the opinion that GAO would have almost complete access to
the DDI activities -- perhaps as mrch as 99 percent of the DDI
operation could be examined in the course of the GAO audit.
Mr. Samuelson stated that to attempt a survey and comprehensive
audit of the DDI area would require a rather substantial audit staff.
He stated further that he didn't know whether it would'be adivsable
to staff the audit to such an extent when there were such substantial
questions as to the audit contribution that might be made under the
present audit restrictions. He stated that initially he had planned
to assign a somewhat larger staff than just Mr. Pahl, but that with
the present interpretation on the audit access, the complexion of
things had changed.
Colonel White stated that it was his hope that for security
reasons the .+AO audit staff would be kept relatively small - say to
three or four men - and the staff would not be changed. He cited
the CIA experience with the .iureau of the Budget. The Bureau has
limited their ersonnel involved in the formulation and execution of
the CIA budse to two or three people of relatively high calibre and
these people have remained on the assignment without change.
Mr. Samuelson stated that consideration would be given to the
audit of DDI, but initially we would proceed in the area we are
presently in in the Office of Logistics. He stated that we would
certainly have to obtain more knowledge of the support activities
before attempting any review of the DDI activities. Colonel White
stated that CIA would be pleased to have GAO make this approach,
but he r iterated that, because we would be in areas where the ac-
tivitie re alma t wholly in support of clandestine activities,
CIA officials would have to constantly raise the."red flag" where
our audit touched on the sensitive clandestine activities.
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In connmaction with the elearanae of additional al personnel
for assignment to the audit tat at IA, Colonel White advised that
the clearance would be greatly expedited where the person already
had bad a full field invpstiation and clearancesuoh as is entailed
in the ,;ranting of the AEC "q" clearance. Without such prior clear..
ance, Colonel White estimated that it would take' three 'months or
longer to obtain the clearance.
Mr. Abbadessa stated tat in the audit of a Govennnent Agency
GAO placed reliance, where possible, on'the work of the' internal
audit staff of the Agency, to enquires= whether the work of the CIA
internal audit staff would be' available* for review and *evaluation
by GAO. Colonel White stated that just`=bout the entire effort of
to CIA audit staff under :gas been in the area of
clandestine activities, and ere ore their'workiig papers and
repor@jwould not be available for GILO review. In the 'audit of
support activities such as procurement,` the internal axiditors review,
tests, and reporting would not be segregated as to sensitive and
non-sensitive activities, and, therefore, could not be available
for GAO review.
Mr. Samuelson advised that in approaching the audit of the CIA
he wanted to determine the extent to which we would be permitted to
audit so that no one would misunderstand the scope and.extent of
the audit. He stated further that if called upon by the Kildgy
Committee he would have to advise of the severe limitations on the
audit. Colonel White stated that CIA has spoken with the Committee
from time to time in general terms of the GAO audit of'CIA
activities, and the Committee has always understood that CIA would
not permit GAO access to the clandestine activities.
advised that the Agenc;, regulations setting forth the
policies of the Office of tooistics nad'been reviewed, cleared and
made available to Mr. Paht. Colonel stated that there were three or
four instances in these regulations that dealt with oiecies and
procedures of clandestine activities but that no had been with-
held. He slated that he would rather that we have the whole package
with the understanding that we could gd no further wits those
dealing with clandestine activities. E#e stated 'further that the
remainging issuances of Agency regulations would be reviewed and
made available to the GAO at it staff to the extent that security'
will permit,
ugene 1. Pahl
Supervisory Accountant
. , 4-1)"t C/A etas
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