[PAGE 1]
OFFICE OF THE DIRECTOR

MEMORANDUM FOR: DEPUTY DIRECTOR (ADMINISTRATION) Project MKULTRA-Extremely Sensitive
SUBJECT Research and Development Program

1. On 6 June 1952, the Project Review Committee approved to the the DD/P/TSS ResearchProgram and allotted Program for Fiscal Year 1953. This sum provided for research and for operating costs.

2. The PRC approval authorized the Director of Researcb, at his discretion and with the approval of the Research Chairman, to obligate the research funds an apportion them among individual pro. jects, such projects to be subject to the usual Agency procedures and administrative controls.

3.. A small part of the Research Program contemplated by TSS and discussed with me consists of ültra-sensitive work.The nature of the research and the security considerations involved preclude handling the projects by means of the usual contractual agreements.

4. I have, therefore, approved the obligation and expenditure by TSS of \$300, 000 of the total of already approved by the PRC for research for FY '53 without the signing of the usual'contracts or other written agreements.

5. This sum of will be handled as Project MKULTRA. Would you please make the necessary arrangements so that invoices forwarded by TSS applying to MKULTRA. will be paid, provided that:

a)in the aggregate, they do not exccedor FY '53 without further authorization from me;

b): each'invoice is to bear a certification by the Chief,

[PAGE 2]
DD/P/TSS. as the Research Director, that the invoice applies to Project MKULTRA and that the conditions outlined in the DD/P memorandum fer DCI dated 3 April have been complied with,: The certification will also request that payment be made;

c) the invoice shall bear the certification of the Executive Secretary of the Research Board that the scope of the program has been approved;

d) the invoice shall bear the certification of the cognizant TSS Division Chief that the work has been satisfactorily performed from a technical point of view and has been carried out in accordance with the understandings reached between TSS and the individual or concern doing the work,

6.: No further documents will be required to justify payment of the invoices. Exacting control will be maintained over the Project by TSS, Although no formal contract will be signed, it will occasionally be possible for TSS to sign an informal agreenient with the individual or concern performing the work. In such cases, TSS will retain in its files all documents. TSS\_will endeavor wherever possible to obtain documentary support of invoices, such as cancelled checks, receipted bills, etci, and these. will remain in TSS files.Such documents at best will only cover a portion of the total expenditures,: and the regular audit procedure will not be followed.

7.: Other provisions and control over the Research Program spccified in the original PRC approval remain unaltered. The monthly budget and financial record being submitted by TSS to DD/A. wiU include financial information on thework.being conducted under Project MKULTRA, showing how much of the has been committed, how much has been speut, and how much remains, A

Distribution;
Addressee - Orig. & 1 DD/P -1 TSS/OC - 1 Exec. Registry - 1

[PAGE 3]
OFFICE OF THE DIRECTOR

MEMORANDUM FOR: DEPUTY DIRECTOR (ADMINISTRATION)

1.[n accordance with previous arrangements, TSS has been. authorized to spendof its annual Research and Development budgct in accordancewith procedures and controls approved by.me for Project MKULTRA.

2. Subproject 35 of MKULTRA in the amount of has been discussed with, and approved by, me. Since this subproject was not contemplated when the MKULTRA budget was prepared,-it is possible that present FY 1955 MKULTRA funds may prove insufficient to cover both subproject 35 and other contemplated subprojects.

3. In the cvent that this proves to be the case TSS is authorizęd to transfer, when necessary, an additional Oto MKULTRA from the balance of the FY 1955 R&D budget."No new funds are involved, and this authorization, in itself, does not constitute an increase in the TSS Research budget.

Shis was approved ky the D el ou 15 Jan 1955

ALLEN W. DULLES .Director

T. S. 101077B

[PAGE 4]
1. Late in 195l, at the request of the Azency,  sae és Washington to hclp establiah a'research programu dntigned te assate (or the covert Officce of the Agency) the weapons, deviceo, eqaipsus abd methods needed to acconplish the respective mlssioas,

2.. The first task confronting me was to evoive a plan to make it possible to carry out research effectivelywithin theAgency atructure and to secure the high quality oi personnel requtred to ptoduce the quality of results dictated by foreign competition.

3. In June 1952 you and Gen. Smith approved my ,aaisraara the Technical Services Staff operating-under a Research Dttres ncor junction with e Rescarch Chairman and an advisory board cosopesy« oí distinguished scientists and ergineers.

4. During the formative period of organlgasion, it has been necessary for me to toke part in a good deal of adpinistrative and organizational work in order to carry ont the original concept of the Ts5 organization and to ascurne wider respoesibilities than are normally, assumad by the chaizuan of an advisory body.

5: I have felt from the beginaing that my work atould nat only àe directed to producing technica! coropetency but toward the devsioproent of an orgaination and procedurca which continue to be effective long efter I cease to be part nf the show.

6, Consequzutly, I have, from tire to tirie, reliagsished certain adndinlitrative fesctiona and rusaoncibilities - placing chera wbere they belocz in a vel baiaaced and conpeteot recearch groap acd devetng move and moruof my tine to the tacbric l probieis aná de proper funetiopo oí a chniruanova casacrch advisory bonrd.

1. t is ry balei tha: this bowrd ahould be priaorlly ar adviadry Sody to eéas its o lcian en sescal ani researck maitera to adviad

[PAGE 5]
aed asstsi the Director of Researck in the tormratanan of a yearly tesvácea rograñá avd à projoéed budget; ond to mcet troia tire to tiine te révžs the work cone and moke such recoanendations as Rt may see ft talsv ita Chairman. Also it islztended that tais Board shall be prepared te give assistance and advice to the Drectár and bis staff whenever requasted,

8. The Chairman should keep in contact with the work of TSs and keep tho Board acquainted with its importaat techaical probtams and matters involving technical poliey and spend s maajor part of hs time acarching for hew sources of pertinent technical knowledge.

9. It now appears to be unnecessary, and I believt organizationally undesirable, for the Reaearch Chairnian to certify each individual project in the already approved program. The present organization under Dr. fhas demonstrated ita ability to carry out the approved program and to havdle its budget properly and give the DD/A a clear monthly statement of its financial position with respect to its allocated funds. às a practical matter, the signdng off on individual rrojects is a fuection which should be vested in the Research Director with existing accounting controls and after the initial techctcal approval of the Board and its periodic reviewof the programThe-Research Director!a approval ef a project should be considered as an indicatlon that the project falls within the progran considered by the Board and-to couutersignature hy à rnendber oi the Board should be required. Actually no additional qirectiva is needed to effeat thia saift in respoasibility as Ghe.project direetiveis broad crough to cover the change which is of minor erder exeept thát it will be icicertant sirce it wili facilitate securing the servicea Gt a future Chairnvan for the Reuearch Bgsrd.

[PAGE 6]
tv CENTRAL INTELLIGENCE AGENCY WASHINGTON 25, D. C.

OFFICE OF THE DIRECTOR

19 June 1953

DOZOPANDUH, FOR: DEPUTY DIRECTOR (ADHINISTRATION) STEJECT TSS Research Program

1. On 6 June 1952. the DCI approved PRC recommendation TS No. Sor Fiscal Year 1953 for the initial phase 63/h which allocated of tho Pesearch Progrem, of which sun to meet operating costs.This same was to aurport research and document established the framework under which the progran has been carried out.

2. It is desired that-the TSS Research Frogram continue to be carried out uncer the procedures, authorities and controls outlined in the PC approval although, of course, the sum of money available under the budget nay change from one Fiscal Year to another.

3. A memorandum from the undersigned to.the DD/A, dated 13 April.
1953, subject: IuLTRA, outlined certain procedures and controls under which TSS was authorized during Fiscal Year 1953 to handle certein extremely sensitive research and development programs. The authority granted in that memorandum is hereby extended tocover-Fiscal Year 1954. During the first six months of Fiscal Year 195h, TSS-is-authorized to obligate of the annual research-budget (exclusive of thé amount budgeted for operating costs) in the manner. outlined in that memorandum. All procedyres and controls covering MULTRA remain unchanged. A

19AuDulbe

ALLEN W. DULLES Director, Central Intelligence

TSS/CC:(16 Junc 1953)

Dlstribution: Addressee - Orig. & 1 TSS/0C - 1 T:S/ADEIN/BUTGET - 1 LCl riles - 1

COPY

ER-4-2147

[PAGE 7]
MEMORANDUM FOR: COMPTROLLER

: DD/P/TSS Project MKULTRA - Extremely Sensitive Research and Development Programs

1. On 6 June 1952, the Project Review Committee approved the DD/P/TSS Research Program and allotted to the Program for Fiscal Year 1953. This surn provided for rescarch and for.operating costs.

2. The PRC approval authorized the Director of Research, at his discretion and with the approval of the Research Chairman,- to obligate the research funds and apportion them among individual projects, such projects to be subject to the usual Agency procedures and adrninistrative controls.

3. A small part of the research program contemplated by TSS consists of ultra-sensitivc work.The nature of the research and security considerations involved preclude handling the projects by means of the usual contractual agreements. By memorandum, the DCI has informed imne that he has approved the obligation and expenditure by TSS of of the total of already approved by the PRC for research for FY '53 without the signing of the usual contracts or other written agreements.

4. This sum o will be handled as Project MKULTRA. Please consider this your authority to pay invoices forwarded by TSS applying to MKULTRA, provided that:

(a) in the aggregate, they do not exceed for FY 153 without further authorization from me;

(b) each invoicc is to bear a certification by the Chief, DD/P/TSS, as the Research Director, that the invoice

[PAGE 8]
applies to Project MKULTRA and that the conditions outlined in the DD/P memorandum for DCI dated 3 April havc been complied with. The certification will also request that payment be made;

(c) the invoice shall bear the certification of the Executive Secretary of the Research Board that the scope of the program has been approved;

(d) the invoice shall bear the certification of the cognizant TSS Division Chief that the work has been satisfactorily performed from a technical point of view and has been carried out in accordance with the understandings reached between TSS and the individual or concern doing the work.

5. No further. documents will be required to justify payment of the invoices. :Fxacting control will be maintained over the Project by TSS. Although no formal contract will be·signed, it will occasionally be possible for TSS tōsign an informal agreemcnt with the individual or concern performing the work.In such cases, TSS will retain in its files all docuinents. TSS will endéavor wherever possible to obtain documentary support of invoices,such as cancelled checks, receipted bills, ctc., and these will remcin in-TSS files, Such documents at best will only cover a portion of thc total-expenditures,apd the regular\_audit procedure wiļl not be followed.

6. Checks in payment of invoices for Project MKULTRA will be sent to TSS, who will be responsible for their safe delivery to the individual or concern submitting the invoice.. The monthly budget and financial record being submitted by TSS to DD/A will include financial information on the work being conductcd under this Project showing how much of the has been committed, how much, has been spent, and how much remains. Unvouchered funds should be vsed, and charges should be made against Allotment No. 2502-10s

Diatribution:
Addressee - Orig. and 1 TSS/OC -1 TSS/Admin - 1 DD/A Files - 1

[PAGE 9]
MKULTRA

Attached information has been prepared to assist 0 & L auditors ant TSD personnel in processing lULTRA vouchers.

Vouchers received from TSD are original. and two. Entries should be placed on all three and they are to be forwarded as follows: Original- use as official voucher. a afficial voucher.

lst copy- file copy for O & L section.
2nd copy to be forwarded with original for Accouts Branch to stamp with voucher number and then be returned to TSD for their files.

2. MXULTRA has the-following three project funding mechanisms:

3. The division and projoct numbers for General Ledger Account No. lh2.9 pertaining to the MKULIRA funding mechanisas are as follows:

25 090022
090020
25 090021

h. Research Branch activities are identified by a numbered desig-Research Branch are. identination whereas the Refied by an alphabetical designation. As the soarch Branch&s grants are always in the forn of reimbursenent, the attached information docs not apply to that phase of MKULTRA.

[PAGE 10]
PROJECTL. MXULTD Research and.Devclopmentciect A Fiscal Annex governsiProject financial procedares Flow Chart: Funding Granlees, Accountinqs and G.L. Accts.

AttachmentA Direct to. Grantee Reguest for Payment Dr. 60101

Attachnient B... Thru. Funding Mech. Reguest For Advance Dr.142.9-180.0|

AttachmentC Thru Cotouts Inoiv. Roquesć for Advance pr. 144.2-142.9 ed Pik

Attachment:D Reimburse Grantee tReimbursement Vaic. Dr.601.0 CrCash

chorge a 4% handling fee Lwhich is costed

Writeoff- Evidease fands. passed to Granteel

AcKnowledgement that funds have teen bassed to Grantees by quarterlyacetqs sopported with photo stats of canceled cks and banKstatements [AcKnowledgement.of] Receipts-of Funds by

Reimbursement Voul isisupported. by the same accountings landcertifications.

Grantees will submitaccountings. through channels toTSp.
Due to the sensitivity of. the research the accounitings are
retamned by. 7sD who forwards certifications to finance Divr
sionattesting ascountings,services vendered,end/ormatmals
ixte been recewed and. accountmnqs moy be reviewed at TsD Dr.799.0 752.0

is a proprietary, G.l. 18s.0, acts as fuuding mechanism. for MKULrRt will inolude a quarterly Schedule sf Grants Status as part of therr acenuntinp-this sohedule wnl clear of: bayments ec ifs Almis Plan made te Grautoas.

[PAGE 12]
Direct Payment to Grantee

1. Seo a copy of the MKULTRA Fiscal Annex "Attachment A" which is attached. Refer to this Attachment to make certain voucher falls under this category or naeets the accounting requiromentsbefore processing.

2. Entries: (See attached sample ror detailed coding requirements.)

a, Processing "Request for Payment" bouchers Dr. 601.0(Costed) Cr. Cash Dr; Z00?50.0 (Establishes Memo Account) Cr. 799.0

3. Refunds  see separate teb.

#Due dates will \_be\_established\_to.allow\_eighteen (18) months fron date of request.

ATTACHMENT A

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ACCOULTIIO FOR NULERA FUEDS TLMITTSD TO CRANÉERS

I. CRAL

yhere tho relationshiy betveon tho Agoncy and tho Erantco 1s svch as to perrit direct possase or tho firris to tho saantes, it is prasmed the fwnis sre vithin tre efrective.control of the Aseney patil utillsed. Fovevar, sioco these fupds pro in fact granto, momoraniua accountability. only vill to nntatred anl vill bo éropped ugoa recalyt Reom the project of evidence that ths funis havs been usel ler the purpose iutenied.

II. PINANCTAL AZEIETRATION

A. Mporonien control recorás vill ta datntsirea in Tso to retleet the status of oll funls edvaneel to each grentee. Each pecord vill rerlcct tre cryptcoys or cther identifteation assigped tothe project and vill have colnana enditled Pecorling Dito, Trarssittal letter Date, Aávances, Accowntings, and Salarce. Te roaord vill be poeted fn tha Advarces colusa vith enounts passed to the grartes, and in the eocountings colun wite apounto dtobureed as slova on spproved ccoountings.fros the granteglecountingo vill to re visvod eni, it deeved satisreotosz, approved by the chiar of ths reapoasiblol bronen prlor to rszording in the coatrol record.If tta aezoaatiaz intoration is inelaázù in yregoso or operating reports, a certificatien fres the ahtof. or the responsible tranch reflestiui the:azpunt-expandoa ray bo usod in lteu of an otaoumttog. Io those instances vhore a crantoo fnilo to subáit ana atlige efrores havo baon mde to ootsia an coeouting, the respoviiblo Praneh Chier zoy pronle a nnroraalua to whe Chtet, Tectrical Services Division roqaestinz bis cporovol for veite-or or.the enount invslvea. - Gns pesoréndus vill rerleci the follos-up. eqtlcn yreviouslytahca ona tho reoscn(a) why the Praroh Chier feols further sstica ia consicozed ncelecs. Wen spproved the ceporenua: vill bo unod ia liea os an ecoouabing rrsa tho grentoe.

3. No reapoastble bresch of Tso vill prepore anl forvard to the Finance Diviston a cerarato "ctatesont" for cach cceouning received, iäentiried to tho sppropristo gevntso. Te staterent zy bo in tho fora ot a rozoronáaa to tha Antlorisad Gartityias Ocflcor relleetiag the uca and status or Punás boll by tho ccont, ael ill coatain tta certilicate ot tho chiat a tho revonsiola branol trzt "t cortiey that to the best af ry knovleóge ant dolter tha ¿rount rhova obovo vas lirlroed to or ucea for égeney euthorized setivities and ozvieea ar rs.tertal hava beea recoivel, snd Datber návauços. es my te diritod dy tho vaoy ay vercantel. Te deaumouts upon vhich tbis statetms ts Neto are rsiotalnod in tho filos of To Tor veeuity reazons oní vill ho rvia svauilavlo fur reviss by tha Cersiiyirg Ofrieer at his request."

c. . Do Flazsca Uvistos Curtirzde: Orricer io espoored to accept tho staterane in parsgath I D atove toe tho rsounko shon thoreia to tho baata for cntvles to tre rncoranice aocaoatt suojocs to bis later exttaation of tho gróntea accouneiog mointairod ia th filoa er Teo.

Attaehaent A

[PAGE 14]
DRRODRDEEE

[PAGE 16]
Pavuents to MKULTRA Project Funding Mechanisms for Passing to Grantees

1. See a copy of the MKULTRA Fiscal Annex "Attachnent B" which is attached. Refer to this Attachnont to make certain voucher falls under this category or neets the accounting requirements before.processing.

Entries: (See attached samples for detailed coding requirements.)

a. Processing "Request for Advance" vouchers Dr: 112.9(Advances in Transit) Cr. Cash

B. When evidence received that Grantee has received funds fron Project Funding Mechanisn-

c. Processing accounting

Dr. 799.0
Cr. 750.0 760.0 aof 0l 1964

3. Rofunds - see separate-tab.

#1 and charge a fee of l% for grants they handle. Tho cost of those fees should be imediately costed to G.L. Account No. 601.0

#2 pue dates will be established to allow eighteen (18) months from dato of request.

3. Wten thiere in a le and an anpount to a Grantee, it re guire (2) Clrechs.

ATTACHENT B

[PAGE 17]
ACOCACLNO FCR KOULTRA FURDS TRAPETITED TERCUGE PROTZCES UOER AGESOY COZ7EAOL

A.: Accountability Por. fudo possod-throuà projects uoler. the control of Tod er other Aganoy corponoats vill follou tho tronsrerd seeh fuds, and vill be dropped only vhon the funás bave been cocouated For or passed to sn entity cvar vhich the Agosey exercises no control. Aseney cosponeuta control ling such projects vill bo direeted to furnish Tso ani Finonce Division vith doeuntary evidence of eoch such transter aado on beball of Ml.

B.  Coutrol of.thə sovecent of such funio rests vith TD and opproprtate control and revoranda recorãs vill te. raintained withia To to inlieate tho atotus of thoco fonda st all timos for raiasomat and eulit puposes.

A. Aavences saãe to\_projaote. or other entitlos uncer Acency coatrol for purposes of fonding AlaaA gantoes met te clesrly idontified as, cach, in oréer to sepárato then fros súvanccs proviced for tho oporation or-tha projoct. Tus laala funds eávancad to foraing antities vill bo treuted ds Panãs in transit oná aecountability for theso Tunds vill be. maiatained until recaipt or\_ovlácnos that the fuls have deon pasçed to the Crentco.

B. Projocta or other Agency. entities vill-de direeted to faraiah TsD and Pinanea pivisicn vith docamentary-evidorce of cach disbursarent rade to Erantees on botalt of MOLTRA.

C. Centrol recorãs vill to saintaiged-in Tsd to refléot tho etatuo of all funós edvancod to Agesey entities.for- funiing lsulA Erenteos. Eech recorá vill nurleot tho eryptonym assiaaed to the entity bolaing tho Fumde and sill hava colisns antitled Rocoréing Dato, Grantee. Identifieatlon, Tranosittal fattor Date, Aàvences, Accsantiago, end Bilance,Ths record vill do posted in the edvances-Coluca vith sconnts passed. to the project, and in tho ¿coomtinge colue vith asountedisbursed to HanrRa crentoes.as shova oa approved cceouatiaas froa the project. sccountings vill bo reviavà and, if eatistactorys approvod dy tro chter af tho responsiblo branch prior to Whoie being rseoriad in the control record.

D. Tho pasponsible braoch vill propire a seporato stateoezt for attechseat. to each sueh sccouting. -ae stateront sy be in the fora or a rowvanla to tho Aotrorlsed Cartirying Cerlcer and vill coatain the cęrtifieat ef tha chior of the paspoasible bronoh that "z cortity that to the bast oć ay. knoslaty sni deller, tho emowt(o) attributed to Malras ca the attachea aczomtiny wero sicbursel st Acaney direotioa to anshosiced ectivities, cervleas aná/or saterial havs been neeotved, enái turther cavonoes es asay ba èlrertod dy the Agaay me warrartel."

Attochrent B

[PAGE 18]
E. Tho Sutborized Certifying Cfficer io enpowored to accept the statorent in pora Il D ebove for tho ezounts thorein as the basis for ontrios crsditias tho account of the pojsot vhich trononitted tho funde end for ueking acpsopriatu cost ontrioe, Concurrently the Cortitying Officer will rocord tho oaouats in tho ronorendon eccownt of the (rentes vhero thoy will bs buadlod as advoncos to grantess as described in attaohmont A..

[PAGE 20]
L 1RS5

[PAGE 22]
Payment to Individuals,, Cutouts, and other Projects for Passing to Grantees

1. See a copy of the MKULTRA Fiscal Annex "Attachment C" which is attached. Refer to this Attachnent to make certain voucher falls under this category or. meets the accounting requirenents beforo processing.

Entriest (See attached samples for detailed coding requirements.)

a.Processing "Request for Advance" vouchers

b. When evidence regeived that Grantee has received funds: fron individual, cutout,or project

c. Processing-accounting

3. Refunis - seo separate tab.

Due dates will be established to allow\_eighteen (18) months fron date of request.

ATTACHMENTC

[PAGE 23]
1. CEERAL

A. Fwnds advanced to and. held by cut-outs for the purpose of fanding KaRA grantoes are considered to be within the control of the Agency and will bo so treated within Ageney records. Accountability for such funds will follov the transfer or the funds and will bo dropped only when fueds. have boen eccownted for or passed to a grantce.

B. Agreenents nade with cut-outa will. be reduced to writingi vill contain the basic elenents of a controct, including the fee to te paid by the Agenoy; will provide for finsncial reports es prescribed by the Agencyi and will provide that any unused granto aro the proporty or\_the Ageney.

C. Ageney funds advanced to cut-outs will be deposited to bank accounta esteblichod for tho.sole-puryeie or-receiving and disburoing Agencyfunds. The cut-out vill execute a Declarntion of Trust that tho funds therein are the property of\_the United States-Covernennt.

D. Aoproprinte control records for manogenent and audit purposes vill be minèined at all tires within TSD to indicate the otatus. of funda edvanced to cut-outs.

A. Funds edvanced to cut-outs will be treated as funds in transit endaccountability for these funds wlll-be maintained until receipt of evidence that the funde have been pasced to the grantee.. Requests for cdvences will indtcato the nmount ot the advance vhich will.be passed to the érantee and the around which will te retained-by the cut-out as feea.

B. Cut-outs vill be directed to subntt a report at least quartorly reflectiag ths status of all fundo edvanced by the Agonoy.  The report will reflcct tha cisbursamonts identified to épeeific granteos and/or projeots, and the balance cn lunà at th end of the pericdtThe cut-out accounting will. rerin in tho filos of TSD.-A photostatie copy or the bank ataterent topothur vith cooies of the cancolleù checks vill bo subedtted as soon as possiblo nfter their receipt by the cut-out.

C. Lnlvidnol control recorls vill bo maintoinod in TeD to reflect the statuo t? ell fumãs advanced to cut-outo for MOlaRA activitieo. Fach rocord will rorleet tho naao or eryptonya assigod to the cut-out and vill have coluuna Susitled Recording Dato, Crantee Teonttrication, Tranomittel Letter

Attechmant C

MULTRA FUNOS PASSED TEROUGH CUT-OUTS

[PAGE 24]
Date, Alvacces,Accountings, ant Bolanca. Tvo recorandus cohoms vill be. nainteinad by colendar yoor to rerleet the unount of feo for csch grunt and a cwzzlutivo arouat or all fees. Ths peeorà or esed eut-out vill be posted in tro aavaroos colun vith enouats yosoea to the cut-out, and in tho Aocountiaz coluat vith cnvúnta aisdurzod to cantees as shovn ón eporoved ecequntingo fron tio cut-out. Paes to the cut-out will do posted to the pecord et tha tire tlo cávance to tho out-out is recoreel.écpounttngs vill be ravieved and, if desced catteractory, aporoved by tho Chiel,of tho responsiblo. branch prior ta balng recoried in tho Control record.

D. Te responsible brench or T3o vill prepare end forvard to the Finanoo Divisioa a coponute "ototemsnt for each cccounting received freo a cut-ont. Tso statosent zay bo in the fora of a sesoraalue eddreassd to tho Anthorined Cortirving Grricer cnd vill rorlest ite uce end atatus ol fvnls hel4 by thor eut-oab oni tho amomts disburoed to eseh granteo.  Tte statamt vill slso incluia tho certitioate or the chier of. the rosponsible bronch thae "I certity that to ths best of só knovledgo and leliof the mounts listed as crants on ths sbove statenont vere disbursed st Apnay direction to authorlzed aetivitios, foos bsve boan csrnod ani ¿urther aivunces\_an nay be dircoted by tha Aceney are -Warrancod."

E. The Authorised Certirying Orficer 1s eegovered to occept ths.staterent io para I D aoovo ao tho basis\_for entries\_creáiting the sccount of to cut-out mri for calins aypropriate cost entrios for erovato pesoed to grantees subjeot to his later exnsinstion or the cut-cut aceounting mintaiasd in the filea es To. Connerrently the Cortirying Ctcicer vill record tho aaounto. passed to tha crontuo in tho menoranáua cecounto vhero they vill to hanulod as acvcrcos to frostees ao desoribed in sttocnsnt A. Tho Financo Diviston aocourt :batsnceo vill to reconoiled to balarces shown on Tsd reconds at least quertorly by the Cortifytng Crslcer,

[PAGE 28]
ATTACHENT D

Reimbursonent to Grantee (may be through project, cutout, individual, or funding mechanisus)

See an excerpt of the MKUL'RA Piscal Annex which is attached. Rofer to this excerpt to make certain voucher falls under this catogory before processing.

2. Only entry: (No Follow-Up Required)

3. Refunds - see separate tab. (Generally there should be no refunds affecting entries under this.category.)

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à. Braget propoaals froa prospeetive graeteos vill be puvieved by the. roaponoiela Sravch Cier eanl forvaréoa dy romoradun to the Chtaf, Tectmieal Servicos Division. Thio wevormnaan vill inclode a staternat regardipg the: type crd depth of eccounting expaotel frou tho crantce and the frequenoy or pieh aocountingo. ffter ayproval by the Chtol, ToD, the arount of tho budget. proposal vill be obligateà on tho allotoent rocorás naintaiosd by To.

3. The Tezheesl Corvices Pivisien io authorizod to advaneo funds diroctly to Éxantees, to cut-outo, or to. funiing rechantcao (yrojocts) updar tho control cr Tu or other égeney components, -in exounts coasistent vith requirerents stated in the budgot proposals. At the diserotion of tho Chier, ToD, or his deoignes,-funds my be advorced:io tho. total:anxmuto or budget proposals but shoula bo linlted to partial amouts in. tboso instenceu.vharo the pelatiouebio vith the crantee poraits.

IV. ACCOUFTINO.TTEATMENT

ioce tho Agency relationship vith each project in the MOULTRA dotivity larsely deterrinea tho-ehoioa or ñuodins petbods to de used, this relationshiy viil covorn the accousing-treatrent to bo given návencos and accountings To aocounting troatpent vill bo bosod on the folloving general procepts:

A. Mesorantua cecountability Tor funds paosed direetly or. indireotly to granteos. vill be dropped upon receipt- of evidence that tho futs have bean nsod lor the puarposes intooded.

B. Accountability for funda passed. to projects uades tha control of TD or other Acoucy ccsponents for the porpoze of fonling crantoss vill follov ths tranafer of sneh funãs, ond vill bo ároppoa upon rocoiyt of evidenoe the funds hove boen passed to a grantee or othervisa sccounted for.

C. Aecouztobility by cut-outo for furdo psssed to then sill. be droppea upon raeoipt or evidence that the cut-out has pussed the fundo to tho project.

D. Claies for retebarsenent or. cisbursetents sade frea funts belonging to s'rrojoat, another entity, or an iniividul, vill do- oharged to costs when riid ani no tollou-up vill ta roquirod other then evidence that the payee sgtually recetved poyieat.

V. FIXUCIAL AUNHISTPATICN

Finauctal dlainistration of MULaRa furnds vuler esoh of the.ciraonstoncss eftea 1n Para. I7, A tharough G atove are further delioeated to attachmento A e turoo h C.

v1.10n Fireaoo bivision

III. APPROVALS

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1.BACKGROUND AND AUTHORTTY

A.  On 6 Juno 1952, tho Projeet Rovtev Camaitteo epproved the DD/p/Tss Researah Progrea. The PaO approval authorised the Pireotor of Research, at his digcretion and vith the approval of the Ioseorch Chairpan, to obligate recearoh-funãs and to apoortion then arong inaivilual reacareh projects, such projects to be subject to the usual Agency procędures and adainistrative controls.

B. Hovover, in a menorendua to the DD/A, dated 13 Ayr11 1953, tho LOX recogized that the ultra-sensitive natue or certaia research projects in the Rosearoh Progran precludes the hondling of those projocts by reans of usual cCireot coatractual reletiónshiy. In order to cocceal UG Covernment interest in or cpovsorship or such projects tbe per meroreadua authortzed the Technical Sorvicea Division to consumate sgreements vith others to act as octensiblo principals or cutscuts in déveloping end paintaining the depired relationships with organizations engaged in roscarch in those ultra-sensitive areas of iutprest to TSo. Do ultre-sensitive portion of tho Research Progrea vos identified in the POI renorandun by the cryptonyn MULTRA.

C. The purposo of this paper is to establish procedures for the coatrol and financial adinietration of funds advanced or disbursed on bohalf-ef MOLTAA eetivitics.

D. For tho purposes of this paper, the folloving definitions will apply:

PRoJECTGperational activity-subject £o.fornal Agency approval procedures to vhich fwids ena othor resouroes ere allotted for uss-in perforaence, established by TSD or other elements for the support inoluding funding. of MUUTRA activity.

CUr-ourt  Eatity or inatvidual used by TsD for cole purposo or providing covert funding.channel for MUlmA aetivity.

GRámnze Utinato recivieat of funds for research provided under IULORA cesivity

1I. AGERCY CONROL OF FUDS

A. The degre? of control to bo exorcised by the Agency over funds advoneei urler progas IlRa, and the point at whieh aceountability for thece fund, is rollnquiched shall be detormined by tho Agency relationshiy with elomnts holding vueh fuis. Fuds eávaneed to and held by cut-outs, an. entity war the, ccntrel of any Agoney coagonent, and other Covernrent Agoneles ure ensilorol to ba witbin tho contzol ct the Acency end vill be so treatod in uay, recorls. Fwds auvaneed or pnosed to ron-Agoney persomnel eugesei in reso:zoi arè considered to be grento and vill bo eborgod to costs upon evidanca tha ¿-pia hav baen pansed to tho granteo. Contaol over fwnds held by erantoea vill bo oxdrcisod throucà the uue of renoranâum eccounts.

PISCAL AOEX MULTRA

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1. See the attached copy of a memorandun which states the require ments when refunds are diverted to othor Grantees.

Refunds in cash will require tracing the funds fron the : original requost-then backing the amount of refund out of the originally affected accounts.

Bookkeèping Whon the Grantee roturns funds to funding mechanisn, cutout,"etc.and they are to be directed to another Grantee,MXULTRA officials will furnish Finance Division with the required certifioation. This type of refund will also requiro tracing the funds from the original request of the grantee returning the funds\_and making adjustments to all the affected

REFUNDS

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53 JUM

Treaatat of Gelonde nadar Accovntios à

1. Durlzg a resest audit of Paoleel MRULTRA a membar ol te Audit Stail brouzat to the atlestica of T5s tho scbject of vefunda made of movies cisbureed uadar Fvojaet MKUkTRA. TS3 ezievstan4s. tbat at khs precert Uima teads advanced voades MkULTRá avo wriitea oi to capessa at ths tiane ths aavacca ls mis la cccordaace wita tho D0/P mnemotandum to txe uG1 Catad 3 Apel 1993. aad excastess thozscl io subaequcet maarao5raia. Teo sitealcas ariee vogazdiad such zalunlo ao lo.lsvss

a) lt somallases Rappoas that lerds vhiah ese pavacd Crevah a ccrcat to a 4mnzacter for-tbe-comsplslon o4 a p stcalar paave 64 a subproject sr ust cowpletaly exaerded, ani s rshaad is therctore to ve made. For cacurie veasoes, shuncesa sucà reíade can be mada to tha cutout, Cla fanás caz.vl ce returaad by the cstoa to ice Agency. Vhen eçcoualegs aze Fsceired by tho cutout at the end of acea a subprojeel, the ascseniinga -shew the anonat of unesyanded snds vemsiniog undor ihe pubprojact:The caloet then iesuaediaialy ragaasts the cearacior to roiund the amoiat in qussuon to ke cutect. llt co sappens thet Ao particular asprepeet haa bsen tarminaced or complated Tos weuld then dka ts apply the balaeca et the faada to clhes cubpr sis. ba rcalee that the alotmsat aiatua of thera funds r aquires sn sacoonung enry as Ageecy Booke of Fecord. a oráer to apsiat the Finaace Diviaica to record breperly tas acesvzging snlry veqvired, it io proposed thas tha tollowiv, ceraiñcatisn be iasucd ragarding caeapended lecás to vetvrped to the cataut.

fs 3 tas 57O8ram csde7 siactorily cvrn»
gubprojert pleted. teat 2 11
oa lzvaico sospeojact Thls credit

24 Apri1 1958

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repvesente tha retara ci scaaed lands oi cabpsojact 57 e71giasily ckavgad to Aletaoot 5Y-2502.10e 001,

b) In eassa where there aro fuais-rernaising in a pubproject which were vat voed daring a prior fiscal year and where additional faads for the current facal year have bren approved, an accountlug entry will be moide reflectins properly the unased portion of tha funds so edvarced and crediting properly ths fscst year concerned. In the casa of rafunds of this type, it is proposed that the folloving certificatlon be eusmitedt.

"k is berchy certiled that ander subproject
the closs cã 8Y & balspce of \$ TEDTOSERNAS Additlenat epproved ior costlaias
furdo 9-raquastad, theretare,that
sodprej reñited ssbprojact oica Q90

Thesa cavußaatona will ta fosaarded to yonr cllee for prccesolug sttes they hava bata prepsrly.cbilgated by ths Tss Buóger Oüicer sad progsrly epyrsves.

3. :chosid yes ceasas la tao éavegaing. Ht ie ragaaated that you co inliczta ca tha orisinsl oé ths mcmoraudesa whieh is tò ba rotursed to T5s. Two coples are attachsd for your fiies.

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I have received an accounting from Sub-Project 02, for Invoice 2, in the amount of.\$00,000.00. The accounting is being retained in the-office of TSL where it may be reviewed by the Certifying.Officer upon request. I: further certify that satisfactory service ropresented hv the accounting have-been received and that to the best

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Accountings from the below listed Sub-Projects have been received, have been retained in this Division, and are available for review by-the Certifying Officer upon request:

00 O11 \$0,000.00
i.e 11 1,000.00
22 2,000.00

The accountings are being、 retained in the office of TSD where they may be reviewed-by the Certifying Officer upon request:

I certify that satisfactory services represented by tho accountings have been receivod and that to the best of my knowledge the fúnds advanced for such services were expendod for the purpose for which advanced

Dratted specrally fot use deriag recapitulation erererte of past too years.

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G. L. ACCOUNT 142.9 (Project Advances in Transit) This account vill be used to record passage of funds to the MULTRA grantee yia a funding mechanism or a "cutout".. At the time funds are disbursed from Readquarters, the charge will be made to G.-L. l42.9; at the time an accounting is received from the funding mechanism showing disbursement of the funds to the grantee, Account 142.9 will be credited and a simultaneous charge to Expense and debit to a Nemo Account will be made. The coding of debits to Account 142.9 wil1 be-as-follows: COIS. Explanation (See Financial coding handbook)

13-31 Description -\_use the MKULTRA sub-project number-and the invoice number as in the-Request for Advance (1.e., MU 42 Inv. 18) 32-33 Division -25

47-52 Cbligation Reference Number - Cited on the Request for Advance by the Division-B-&F officer
54-57 General Ledger Account number - 1h2.9
71-80 Amount

0. L. ACCOUf 750.0 (Uaoxpended Subsidies and Grants) This account wil1 be used to control the accountability of-MULTRA grantees (sub-projects) for amounts passed to them directly by TSD (Fiscal Annex, Att. A), or funds passed to them through a funding mechansin (Fiscal Annex, Atts B & C) such as AND Memorandum accountability will be'maintafr

CODING.MULTRA TRANSACTIONS

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until reccipt of an accounting from the grantee or a stateent of performance from TSD. Coding of entries to account 750/HKULTRA will be as follows: COLS. Explanation (See Financial Coding Handbook)