A-10416, SEPTEMBER 4, 1925, 5 COMP. GEN. 170

A-10416: Sep 4, 1925

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SURETY - ACCOUNTS OF DISBURSING OFFICERS A DISBURSING OFFICER OF THE UNITED STATES WHO TAKES OUT A NEW BOND SHOULD CLOSE HIS ACCOUNTS UNDER HIS OLD BOND AND DEPOSIT THE UNEXPENDED BALANCE BEFORE ANY ADVANCE OF FUNDS IS MADE TO HIM UNDER THE NEW BOND. 1925: I HAVE YOUR LETTER OF JUNE 29. IN REGARD TO THE PROCEDURE TO BE FOLLOWED BY FOREIGN SERVICE OFFICERS WHO ARE DISBURSING OFFICERS. REQUIRES THAT WHEN A NEW BOND IS GIVEN. THE DISBURSING OFFICER SHOULD CLOSE HIS ACCOUNTS UNDER THE FORMER BOND AND DEPOSIT ANY UNEXPENDED BALANCE BEFORE AN ADVANCE IS MADE UNDER THE NEW BOND IN ORDER THAT THE LIABILITY OF THE SURETIES ON THE RESPECTIVE BONDS MAY BE DEFINITELY FIXED. THE REASON FOR THE REQUIREMENT IS TO AVOID ANY QUESTION AS TO LIABILITY OF THE SURETIES IN CASE IT SHOULD BECOME NECESSARY TO BRING SUIT AGAINST THEM.

A-10416, SEPTEMBER 4, 1925, 5 COMP. GEN. 170

BONDS, SURETY - ACCOUNTS OF DISBURSING OFFICERS A DISBURSING OFFICER OF THE UNITED STATES WHO TAKES OUT A NEW BOND SHOULD CLOSE HIS ACCOUNTS UNDER HIS OLD BOND AND DEPOSIT THE UNEXPENDED BALANCE BEFORE ANY ADVANCE OF FUNDS IS MADE TO HIM UNDER THE NEW BOND. A FOREIGN SERVICE OFFICER, REMOTE FROM A UNITED STATES DEPOSITORY, MAY TURN OVER THE UNEXPENDED BALANCE OF HIS ACCOUNT TO ANOTHER BONDED OFFICER OF THE UNITED STATES AND TAKE HIS RECEIPT THEREFOR, THE FUNDS TO BE THEREAFTER RETURNED TO HIM AND TAKEN UP IN HIS ACCOUNTS UNDER THE NEW BOND.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF STATE, SEPTEMBER 4, 1925:

I HAVE YOUR LETTER OF JUNE 29, 1925, IN REGARD TO THE PROCEDURE TO BE FOLLOWED BY FOREIGN SERVICE OFFICERS WHO ARE DISBURSING OFFICERS, WHEN THEY TAKE OUT A NEW BOND.

PARAGRAPH 1 OF TREASURY DEPARTMENT CIRCULAR NO. 197, ISSUED DECEMBER 1, 1898, 5 COMP. DEC. 988, REQUIRES THAT WHEN A NEW BOND IS GIVEN, THE DISBURSING OFFICER SHOULD CLOSE HIS ACCOUNTS UNDER THE FORMER BOND AND DEPOSIT ANY UNEXPENDED BALANCE BEFORE AN ADVANCE IS MADE UNDER THE NEW BOND IN ORDER THAT THE LIABILITY OF THE SURETIES ON THE RESPECTIVE BONDS MAY BE DEFINITELY FIXED.

THE REASON FOR THE REQUIREMENT IS TO AVOID ANY QUESTION AS TO LIABILITY OF THE SURETIES IN CASE IT SHOULD BECOME NECESSARY TO BRING SUIT AGAINST THEM.

IN DECISION OF JANUARY 30, 1901, 7 COMP. DEC. 373, IT WAS SAID THAT THE BEST WAY TO ACCOMPLISH THE PURPOSE OF THE REQUIREMENT WAS FOR THE DISBURSING OFFICER TO DEPOSIT THE BALANCE IN SOME UNITED STATES DEPOSITORY, BUT IN CASE AN OFFICER WAS STATIONED REMOTE FROM A UNITED STATES DEPOSITORY AND THE BALANCE WAS DESIRED FOR USE AT HIS STATION, IT WAS THE PRACTICE TO PERMIT THE TRANSFER OF THE BALANCE TO SOME OTHER PROPER DISBURSING OFFICER OF THE GOVERNMENT TAKING THE LATTER'S RECEIPT IN DUPLICATE.

YOU ARE ADVISED THAT THE PROCEDURE LAID DOWN IN TREASURY DEPARTMENT CIRCULAR NO. 197 SHOULD BE FOLLOWED BY THE FOREIGN SERVICE OFFICERS. THE SAFEGUARDING OF THE GOVERNMENT'S RIGHTS IN CASE OF DEFAULT OF A DISBURSING OFFICER IS DEEMED OF SUFFICIENT IMPORTANCE TO JUSTIFY ANY NECESSARY EXPENSE OR INCONVENIENCE THAT MIGHT RESULT FROM THE REQUIREMENT.

IT SHOULD BE UNDERSTOOD THAT IT IS NOT NECESSARY FOR THE FUNDS ON HAND TO BE SENT TO THE UNITED STATES OR TO BE CONVERTED INTO UNITED STATES MONEY. IT WILL BE SUFFICIENT IF THE FUNDS ARE TURNED OVER TO ANOTHER BONDED OFFICER IN THE SAME OR ANOTHER FOREIGN COUNTRY AND THEREAFTER RETURNED TO THE DISBURSING OFFICER TO BE TAKEN UP IN HIS ACCOUNTS UNDER THE NEW BOND. WHAT IS NECESSARY IS THAT THERE BE ESTABLISHED A COMPETENT OFFICIAL RECORD THAT THE DISBURSING OFFICER ACTUALLY HAD THE FUNDS AT THE TIME OF CLOSING HIS ACCOUNTS UNDER THE OLD BOND.