B-160506, APR. 10, 1970

B-160506, APR. 10, 1970

DEBT COLLECTIONS--AMOUNT UNCOLLECTIBLE--REPORTING TO GENERAL ACCOUNTING OFFICE SINCE FEDERAL CLAIMS COLLECTION ACT AND IMPLEMENTING REGULATIONS PERMIT AGENCY HEAD TO TERMINATE COLLECTION ACTION ONLY IF DEBT DOES NOT EXCEED $20,000 AND WHEN ANY ONE OF FIVE LISTED CIRCUMSTANCES ARE PRESENT, AGRICULTURE DEPT. MAY NOT TERMINATE COLLECTION ACTION ON $38,185.69 DAMAGE CLAIM AGAINST TRUST TERRITORY OF THE PACIFIC ISLANDS, ABSENT SUCH TERMINATION STANDARDS, AND TRUST TERRITORY IS NOT AGENCY WITHIN MEANING OF RULE PROHIBITING APPLICATION OF ONE GOVT. AGENCY TO SATISFY CLAIM OF ANOTHER FOR PROPERTY DAMAGE. HOWEVER, IF DEBT IS ADMINISTRATIVELY UNCOLLECTIBLE, CLAIM IS REFERABLE TO GAO UNDER TITLE 4 OF PROCEDURES' MANUAL.

TO MR. SECRETARY:

REFERENCE IS MADE TO THE LETTER OF MARCH 10, 1970, FROM THE ASSISTANT SECRETARY, REQUESTING OUR DECISION AS TO WHETHER YOU MAY TERMINATE COLLECTION ACTION ON A CLAIM IN THE AMOUNT OF $38,185.69, AGAINST THE TRUST TERRITORY OF THE PACIFIC ISLANDS, RESULTING FROM LOSS DUE TO INFESTATION OF FOODSTUFFS FURNISHED THE TRUST TERRITORY BY THE COMMODITY CREDIT CORPORATION.

THE LOSS OF THE FOODSTUFFS IS REPORTED TO HAVE BEEN DUE TO NEGLIGENCE ON THE PART OF THE TERRITORIAL AGENCIES TO WHOM THE COMMODITIES WERE GIVEN, IN THAT THEY FAILED TO PROPERLY STORE AND USE THEM. IN OUR DECISION OF AUGUST 15, 1967, B-160506, ADDRESSED TO YOU, WE HELD THAT THE TRUST TERRITORY OF THE PACIFIC ISLANDS WAS NOT AN AGENCY OF THE FEDERAL GOVERNMENT WITHIN THE MEANING OF THE GENERAL RULE THAT WHERE A FEDERAL AGENCY DAMAGES PROPERTY OF ANOTHER FEDERAL AGENCY, FUNDS AVAILABLE TO THE FIRST MAY NOT BE USED TO PAY CLAIMS FOR DAMAGES CAUSED BY THE SECOND. CONSEQUENTLY, WE CONCLUDED THAT THE TRUST TERRITORY WAS LIABLE TO YOUR DEPARTMENT FOR THE LOSS OF THE DONATED COMMODITIES.

WE NOTE FROM THE RECORD BEFORE US THAT YOU HAVE MADE SEVERAL ATTEMPTS TO COLLECT THE MONIES FROM THE TRUST TERRITORY. AS PART OF YOUR EFFORTS, YOUR DEPUTY GENERAL COUNSEL ON DECEMBER 31, 1969, REQUESTED COLLECTION ASSISTANCE FROM THE DIRECTOR, OFFICE OF TERRITORIES, DEPARTMENT OF THE INTERIOR. IN HIS REPLY TO YOU OF FEBRUARY 16, 1970, THE ASSISTANT SECRETARY OF THE INTERIOR STATED THAT HE HOPED "THAT A WAY COULD BE FOUND * * * TO OBVIATE THE NECESSITY FOR PAYMENT OF THIS ADMITTEDLY VALID DEBT." THE ASSISTANT SECRETARY POINTED TO THE EFFORTS OF THE ADMINISTRATION TO UPGRADE THE DEVELOPMENT OF THE TRUST TERRITORY GOVERNMENT AND TO ACCOMODATE THE MICRONESIANS' DESIRE FOR A CLOSER ASSOCIATION WITH THE UNITED STATES. HE FURTHER STATED THAT:

"WE CAN SEE LITTLE TO BE GAINED BY THE FEDERAL GOVERNMENT IN THE ENFORCEMENT OF THIS CLAIM, BUT MUCH TO BE LOST THROUGH DISAFFECTION ON THE PART OF THE MICRONESIAN PEOPLE IN NOT ONLY LOSING THE DONATION OF THE COMMODITIES BUT, IN EFFECT, HAVING TO PAY FOR IT, TOO."

IN VIEW OF THE DEPARTMENT OF INTERIOR'S REQUEST THAT THE TRUST TERRITORY NOT BE PRESSED FOR PAYMENT OF THIS DEBT, YOU ASK WHETHER THIS OFFICE HAS ANY OBJECTION TO THE TERMINATION OF COLLECTION ACTION.

UNDER THE PROVISIONS OF THE FEDERAL CLAIMS COLLECTION ACT OF 1966, 31 U.S.C. 952, AND THE REGULATIONS THEREUNDER (4 CFR 104), THE HEAD OF AN AGENCY MAY TERMINATE COLLECTION ACTION ON A CLAIM ONLY WHEN THE DEBT DOES NOT EXCEED $20,000 EXCLUSIVE OF INTEREST, AND WHEN (A) THERE IS AN INABILITY TO COLLECT A SUBSTANTIAL AMOUNT OF THE DEBT THROUGH ENFORCED COLLECTION PROCEDURES; (B) THE DEBTOR CANNOT BE LOCATED; (C) THE COST OF COLLECTION WILL EXCEED THE AMOUNT RECOVERABLE; (D) THE CLAIM IS LEGALLY WITHOUT MERIT; OR (E) THE CLAIM CANNOT BE SUBSTANTIATED BY EVIDENCE. SINCE THE AMOUNT OF THE DEBT HERE INVOLVED EXCEEDS $20,000 AND SINCE NONE OF THE AFOREMENTIONED TERMINATION STANDARDS WOULD SEEM TO APPLY, TERMINATION OF COLLECTION ACTION IS NOT PERMISSIBLE. HOWEVER, IF APPROPRIATE COLLECTION ACTION HAS BEEN TAKEN WITHOUT POSITIVE RESULT AND THE CLAIM IS ADMINISTRATIVELY UNCOLLECTIBLE, THE CLAIM SHOULD BE REFERRED TO OUR CLAIMS DIVISION UNDER THE PROVISIONS OF TITLE 4 OF THE GENERAL ACCOUNTING OFFICE POLICY AND PROCEDURES MANUAL FOR THE GUIDANCE OF FEDERAL AGENCIES.