13 and supporting all costs incurred, revenues earned, fixed-fee accruals, and the receipt, use, and disposition of all Government-owned property coming into the possession of the Contractor under this Contract. The Contractor would also furnish to the Commission financial, cost, and other reports with respect to activities under the Contract, as prescribed. Due to the geographic location of the site of work, it was tiecessary that the Accounting Department be divided into two groups - Home Office and Jobsite. The Jobsite Controller, re- porting to the Resident Manager as a staff officer, administered and controlled the various accounting operations in accordance with the standard operating procedures and basic accounting policies established and issued through the office of the Home Office Controller. The field office prepared and audited all basic timekeeping records, cost accounting data, material accounts, token payments, travel advances, cashier records, inventory records, etc., for transmittal to the Home Office. Except for revisions and additional reports required by the Commission, accounting state- ments and reports were submitted and records were maintained throughout Operation RED- WING in accordance with the applicable requirements of the USAEC Controller's Manual, now incorporated into the AEC Manual. Functional accounting activities in the Home Office were segregated as indicated under the following headings: BUDGETS, FINANCIAL PLAN, MID-YEAR REVIEW. Budgeting for a fiscal year’s operation commences approximately sixteen months prior to the beginning of the actual fiscal year; at the same time, a general scope of operations and estimated costs are prepared. During the month of April 1953, pursuant to instructions and information received from the Commission, a revised Budget reflecting changes in scope of work for fiscal years 1953 and 1954 and in- cluding estimated operating costs for Operation REDWING during fiscal year 1955 was completed and submitted. Refinement of plans, based on decisions of the Commission, were for- warded to the Budget Section for recording and coordination. Experience accumulated during prior Operations led to close approximation of funds required for construction and other phases of Jobsite operations. Using the Budget, antici- pated cost schedules were established for Operation REDWINGand costs were recorded in the same pattern, permitting proper comparisons of budgets to actual costs. Approximately three months prior to the beginning of each fiscal year, a request is received from the Commission for detailed expla- CHAPTER i1i, SECTION 2 nations of the intended application of funds estimated for each operational phase. At this time, the needs and requests of H&N Divisions responsible for Contract performance are correlated and interpolated into the respective monetary requirements of the AEC budget format. After review by the Commission, the H&N budget presentation became an approved financial plan. This plan constituted the monetary framework within which operational costs had to be contained, and the Budget Section periodically reviewed costs to ascertain that budgeted amounts were not being exceeded. In the event costs approached budgeted maximums, H&N Management was notified by the Controller; if additional amounts were required, the Commission was notified. Due to the nature of contractual operations during REDWING, requirements frequently changed as work progressed, and these changes had to be recognized and reflected within the budget. Semi-annually, a thorough re- appraisal was made of forecast requirements. Necessary adjustments were reflected and the budget was resubmitted in a formalized “MidYear Review.” After review by the Commission, the H&N Mid-Year budget presentation became a revised financial plan for that fiscal year. GENERAL COST ACCOUNTING. | This Section is responsible for the maintenance of complete accounting records required by the Commission and H&N Management. Cost accounting procedures were established to cover cost distribution of contractual expenditures for preparation of AEC cost-budget reports and Management cost reports. During the month of August 1954, a new format, Schedule A, Organizational Cost-Budget Report, replaced the prior Cost-Budget Report as part of the monthly Financial Statement. The new Financial Statement format, Schedule B, Analysis of Organizational Costs, was initiated at the same time. New schedules were prepared for Fiscal Year 1954, and direct comparisons were made between actual costs and the Financial Plan by category level and/or account number. Comparisons were also prepared on Job 1 by item number between estimated labor and material and actual labor and material. These new schedules provided H&N Management with pertinent information for maintenance of continuous cost controls. For the month of March 1955, certain Cost Report Schedules were revised toward sim- plification. Schedules E-12, E-13, and E-17 were revised to facilitate comparison between actual costs and current estimates. Schedules E-2 and E-3 covering labor and material comparisons were discontinued. Format for Schedules E-4 and E-5 were revised to appear on the same format as Schedule E-17. Format for Schedule E-10 was revised to eliminate the overseas accounts not applicable to the on-continent operaPage 3-7