B-177205, NOV 7, 1972
Highlights
THE DISBURSING OFFICER WILL BE REQUIRED TO PAY CONTRACTOR'S INVOICES BASED SOLELY ON THE SUBSTANTIATING DOCUMENTATION SUBMITTED BY THE CONTRACTOR. AN INDIVIDUAL DOCUMENT EVIDENCING EACH PURCHASE AND RECEIPT WHICH IS SIGNED BY AN AUTHORIZING CREW MEMBER. SECRETARY: REFERENCE IS MADE TO LETTER OF OCTOBER 3. THE PROPOSED SYSTEM AS SET OUT IN THE COMPTROLLER'S LETTER AND ITS ENCLOSURE IS ACCEPTABLE AND SHOULD PROTECT THE GOVERNMENT'S INTEREST IF IMPLEMENTED IN THE PLANNED MANNER. IT BEING STATED THEREIN THAT THE CONTRACTORS ARE RECURRING CONTRACTORS AND ARE GENERALLY VERY STABLE WITH HEAVY INVESTMENT IN FIXED ASSETS. THE SALIENT POINT IN THIS PROPOSED SYSTEM IS THE FACT THAT THE DISBURSING OFFICER WILL BE REQUIRED TO PAY CONTRACTORS' INVOICES BASED SOLELY ON THE SUBSTANTIATING DOCUMENTATION SUBMITTED BY THE CONTRACTOR.
B-177205, NOV 7, 1972
PAYMENT OF INVOICES - AUTHORIZATION BY CREW MEMBER CONCERNING A PROPOSED SYSTEM TO BE USED BY DEFENSE FUEL SUPPLY CENTER FOR PAYMENT OF INVOICES FOR PURCHASE OF INTO-PLANE FUEL. THE DISBURSING OFFICER WILL BE REQUIRED TO PAY CONTRACTOR'S INVOICES BASED SOLELY ON THE SUBSTANTIATING DOCUMENTATION SUBMITTED BY THE CONTRACTOR, I.E., AN INDIVIDUAL DOCUMENT EVIDENCING EACH PURCHASE AND RECEIPT WHICH IS SIGNED BY AN AUTHORIZING CREW MEMBER. GAO APPROVES THE PROPOSED SYSTEM, PROVIDED THAT WRITTEN PROCEDURES BE ISSUED CLEARLY ESTABLISHING THE RESPONSIBILITY OF CUSTOMER ACTIVITIES TO ASSURE THE VALIDITY OF CHARGES.
TO MR. SECRETARY:
REFERENCE IS MADE TO LETTER OF OCTOBER 3, 1972 (REFERENCE DSAH-CFF), WITH ENCLOSURE, FROM THE COMPTROLLER, DEFENSE SUPPLY AGENCY, REQUESTING OUR APPROVAL OF A PROPOSED SYSTEM FOR USE BY THE DEFENSE FUEL SUPPLY CENTER (DFSC), TO DETERMINE ENTITLEMENT AND PAY OF INVOICES FOR PURCHASES OF INTO -PLANE FUEL BY THE DEPARTMENT OF DEFENSE (DOD) ACTIVITIES.
THE PROPOSED SYSTEM AS SET OUT IN THE COMPTROLLER'S LETTER AND ITS ENCLOSURE IS ACCEPTABLE AND SHOULD PROTECT THE GOVERNMENT'S INTEREST IF IMPLEMENTED IN THE PLANNED MANNER, IT BEING STATED THEREIN THAT THE CONTRACTORS ARE RECURRING CONTRACTORS AND ARE GENERALLY VERY STABLE WITH HEAVY INVESTMENT IN FIXED ASSETS, BUT NOT IN INVENTORY. HOWEVER, THE SALIENT POINT IN THIS PROPOSED SYSTEM IS THE FACT THAT THE DISBURSING OFFICER WILL BE REQUIRED TO PAY CONTRACTORS' INVOICES BASED SOLELY ON THE SUBSTANTIATING DOCUMENTATION SUBMITTED BY THE CONTRACTOR, I.E., AN INDIVIDUAL DOCUMENT EVIDENCING EACH PURCHASE AND RECEIPT WHICH IS SIGNED BY AN AUTHORIZED CREW MEMBER. THE VALIDITY OF THE DOCUMENTATION SUBMITTED CANNOT BE DETERMINED AT THE DISBURSING OFFICER'S LOCATION, BUT CAN BE SO DETERMINED AT THE CUSTOMER ACTIVITY. THE SYSTEM RELIES ON THE CUSTOMER ACTIVITY FOR THE INTERNAL CONTROL TO CONFIRM THAT EACH CHARGE BILLED AND PAID IS PROPER AND IS BASED ON A PROPER BILLING ACTION.
WE PERCEIVE NO LEGAL OBJECTION TO THE PROPOSED SYSTEM. HENCE, THE SYSTEM AS PROPOSED IS HEREBY APPROVED, PROVIDED THAT WRITTEN PROCEDURES BE ISSUED CLEARLY ESTABLISHING THE RESPONSIBILITY OF CUSTOMER ACTIVITIES TO ASSURE THE VALIDITY OF THE CHARGES.