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^[[SPA-1]]

25 January 1967

AIR MAIL

Dr. Edwin L. Tyson
American Embassy
APO San Francisco 96301

Dear Ed:

Your letter of 16 January indicates several financial irregularities and unwarranted assumptions by Dr. Kang. You are correct. I did tell Dr. Kang that salaries could be considered in the 5-year plan, not for the current contract except for drivers and assistants.

The only way I see to cope with the present situation is to have Dr. Kang submit a revised budget for our approval. Within the dates and specifications of the revised budget, receipts can be submitted for the auditors. All of Dr. Kang's requests seem reasonable, and we can honor them under a revised budget. This can include the purchase of a typewriter and a telephone. For the purpose of auditing, however, the records must show that expenditures according to the revised budget were made after approval of the new budget.

Once the revised budget has been approved, I will write to Dr. Kang to point out that we cannot accept irregularities, such as unauthorized purchases or expenditures, prior to a budget revision. Partly this is a matter of clear understanding of procedures, and this must be carefully documented in our 5-year plan.

With regard to Colonel Griffin's statement, I think we have no choice this year except to give a bit on the current financial situation by post dating expenditures on the revised budget.

Once this matter is settled and further along on a revised-budget basis, I will write to Dr. Kang stating how things must be done in the future. A letter from Dr. Coolidge on this matter will also help. Partly this is a matter of education to the fact that we will not tolerate financial laxity and irregularities. Under the conditions that exist in Korea, the present situation is not at all surprising. I think we can avoid this kind of difficulty on the 5-year contract by anticipating it in advance and incorporating cross-checks in a written memorandum of understanding.

^[[see letter to Dr Coolidge from Dr Kang dated 29 Dec 1966]]