A-13310, MARCH 18, 1926, 5 COMP. GEN. 734

A-13310: Mar 18, 1926

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WHEN UPON SUBSEQUENT INVESTIGATION THE MISSING ARTICLE IS RECOVERED AND RETURNED TO THE OWNER. IS PROPERLY FOR CREDIT TO THE APPROPRIATION CHARGED WITH THE PAYMENT OF THE INDEMNITY. THIS RULE IS APPLICABLE IN CASES WHERE THROUGH ERROR AN EXCESS AMOUNT WAS CHARGED TO AN APPROPRIATION AND A SUBSEQUENT REFUND IS RECOVERED FROM THE PAYEE OF THE EXCESSIVE PAYMENT. RECOVERY OF MONEY IS FREQUENTLY MADE IN CASES WHERE PAYMENTS HAVE BEEN MADE PREVIOUSLY FROM AN APPROPRIATION FOR THE SERVICE OF THE POST OFFICE DEPARTMENT. I WOULD BE PLEASED TO HAVE YOUR OPINION WHETHER RECOVERIES UNDER THE FOLLOWING CIRCUMSTANCES SHOULD BE DEPOSITED TO THE CREDIT OF THE APPROPRIATION FROM WHICH PAYMENT WAS MADE. THROUGH ERROR WHICH WAS NOT APPARENT AT THE TIME OF PAYMENT.

A-13310, MARCH 18, 1926, 5 COMP. GEN. 734

POSTAL SERVICE - RECOVERY OF INDEMNITIES PAID FOR LOST MAIL MONEY RECOVERED AS REFUND OF INDEMNITY PAID FOR THE LOSS OF REGISTERED, INSURED, AND C.O.D. MAIL, WHEN UPON SUBSEQUENT INVESTIGATION THE MISSING ARTICLE IS RECOVERED AND RETURNED TO THE OWNER, IS PROPERLY FOR CREDIT TO THE APPROPRIATION CHARGED WITH THE PAYMENT OF THE INDEMNITY. THIS RULE IS APPLICABLE IN CASES WHERE THROUGH ERROR AN EXCESS AMOUNT WAS CHARGED TO AN APPROPRIATION AND A SUBSEQUENT REFUND IS RECOVERED FROM THE PAYEE OF THE EXCESSIVE PAYMENT.

DECISION BY COMPTROLLER GENERAL MCCARL, MARCH 18, 1926:

THE POSTMASTER GENERAL BY LETTER OF FEBRUARY 23, 1926, PRESENTED FOR DECISION A QUESTION STATED AS FOLLOWS:

IN THE INVESTIGATIONS CONDUCTED BY THE CHIEF INSPECTOR OF THIS DEPARTMENT, RECOVERY OF MONEY IS FREQUENTLY MADE IN CASES WHERE PAYMENTS HAVE BEEN MADE PREVIOUSLY FROM AN APPROPRIATION FOR THE SERVICE OF THE POST OFFICE DEPARTMENT, AND I WOULD BE PLEASED TO HAVE YOUR OPINION WHETHER RECOVERIES UNDER THE FOLLOWING CIRCUMSTANCES SHOULD BE DEPOSITED TO THE CREDIT OF THE APPROPRIATION FROM WHICH PAYMENT WAS MADE, OR WHETHER DEPOSITS SHOULD BE MADE TO "MISCELLANEOUS POSTAL RECEIPTS FOR THE SERVICE OF THE POST OFFICE DEPARTMENT.'

MONEY RECOVERED AFTER INDEMNITY IN A CASE HAS BEEN PAID BY THE DIVISION OF REGISTERED MAILS ON THE GROUND THAT A LOSS OF REGISTERED, INSURED, AND C.O.D. MAIL HAD OCCURRED, BUT IN WHICH CASE, INVESTIGATION SUBSEQUENT TO THE PAYMENT OF INDEMNITY RESULTED IN RECOVERY OF THE MISSING ARTICLE AND ITS RETURN TO THE OWNER WITH A CONSEQUENT FULL OR PARTIAL REFUND OF INDEMNITY.

CASES IN WHICH, THROUGH ERROR WHICH WAS NOT APPARENT AT THE TIME OF PAYMENT, AN EXCESSIVE AMOUNT WAS PAID FROM THE APPROPRIATION, AND THE EXCESS RECOVERED SUBSEQUENTLY.

WHILE IT IS UNDERSTOOD THAT THE GENERAL RULE UNDER SECTIONS 3617 AND 3618 OF THE REVISED STATUTES IS THAT RECEIPTS FROM ALL SOURCES MUST BE DEPOSITED IN THE TREASURY AS "MISCELLANEOUS RECEIPTS," I AM WONDERING WHETHER THIS REQUIREMENT MUST BE APPLIED TO THOSE INSTANCES IN WHICH PAYMENT FROM AN APPROPRIATION WAS SUBSEQUENTLY FOUND TO BE NOT JUSTIFIED IN WHOLE OR IN PART, WITH THE RESULT THAT RECOVERY WAS MADE, AS WELL AS IN CASES COVERED BY THE FIRST EXAMPLE MENTIONED, WHERE DISCOVERY OF THE MISSING ARTICLE AFTER THE PAYMENT OF INDEMNITY LEADS TO RETURN OF ALL OR PART OF THE AMOUNT PREVIOUSLY PAID.

THE REGISTERING SYSTEM OF MAILS WAS ESTABLISHED BY SECTION 3926, REVISED STATUTES, AS AMENDED BY THE ACT OF FEBRUARY 27, 1897, 29 STAT. 599, AUTHORIZING THE POSTMASTER GENERAL TO PROVIDE RULES UNDER WHICH THE SENDERS OF FIRST-CLASS MATTER WOULD BE INDEMNIFIED FOR LOSSES IN AMOUNTS NOT TO EXCEED $10 FOR ANY ONE REGISTERED PIECE. THE ACT OF APRIL 21, 1902, 32 STAT. 117, INCREASED THE MAXIMUM AMOUNT OF INDEMNITY TO $100 AND THE ACT OF MARCH 4, 1911, 36 STAT. 1337, EXTENDED THE INDEMNITY TO THIRD AND FOURTH CLASS MATTER NOT TO EXCEED AN AMOUNT OF $25.

THE APPROPRIATIONS MADE FOR THE PURPOSE OF PAYING SUCH INDEMNITY PROVIDE A CERTAIN SUM FOR ,PAYMENT OF LIMITED INDEMNITY FOR THE INJURY OR LOSS OF PIECES OF DOMESTIC REGISTERED MATTER, INSURED AND COLLECT ON-DELIVERY MAIL.' SEE ACT OF JANUARY 22, 1925, 43 STAT. 786, AND ANNUAL APPROPRIATION ACTS FOR PREVIOUS YEARS.

IT IS ASSUMED THAT BEFORE INDEMNITIES ARE PAID FROM THESE APPROPRIATIONS THE NECESSARY AND PROPER FACTS TO ESTABLISH A CLAIM FOR INDEMNIFICATION ARE ASCERTAINED AND THAT IT IS UPON SUCH ESTABLISHED PROOF OF LOSS OF OR DAMAGE TO MAIL MATTER THAT THE APPROPRIATIONS ARE CHARGED WITH THE AMOUNTS OF INDEMNITIES.

IT WAS HELD BY A FORMER COMPTROLLER OF THE TREASURY IN 14 COMP. DEC. 158, THAT THE POSTMASTER GENERAL WAS NOT AUTHORIZED TO DEPOSIT MONEY RECOVERED IN CONNECTION WITH THE LOSS OF FIRST-CLASS REGISTERED MATTER TO THE CREDIT OF THE APPROPRIATION FOR PAYMENT OF LIMITED INDEMNITY FOR LOSS OF PIECES OF FIRST-CLASS DOMESTIC REGISTERED MATTER, SUCH MONEY BEING REQUIRED BY SECTION 4050, REVISED STATUTES, TO BE DEPOSITED IN THE TREASURY AS PART OF THE POSTAL REVENUE AND WAS NOT AVAILABLE FOR USE EXCEPT THROUGH AN APPROPRIATION MADE BY THE CONGRESS IN SPECIFIC TERMS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 4054, REVISED STATUTES, PROVIDING THAT THE MONEY REQUIRED FOR THE POSTAL SERVICE IN EACH YEAR SHALL BE APPROPRIATED BY LAW OUT OF REVENUES OF THE SERVICE.

SECTION 4050, REVISED STATUTES, PROVIDES THAT UNCLAIMED MONEY IN DEAD LETTERS, MONEY TAKEN FROM THE MAILS BY ROBBERY, THEFT, ETC., COMING INTO THE HANDS OF AGENTS OF THE UNITED STATES OR OTHER PERSONS, FINES AND PENALTIES, AND PROCEEDS FROM THE SALE OF WASTE PAPER OR OTHER PUBLIC PROPERTY OF THE POST OFFICE DEPARTMENT, SHALL BE TURNED INTO THE TREASURY AS PART OF THE POSTAL REVENUES.

REFUNDS OF THE AMOUNT OF INDEMNITIES, WHEN INVESTIGATION SUBSEQUENT TO THE PAYMENT THEREOF RESULTS IN THE RECOVERY OF THE MISSING ARTICLE AND RETURN THEREOF TO THE OWNER, DO NOT CONSTITUTE REVENUES OF THE POSTAL SERVICE IN A STRICT SENSE OF THE WORDS AND THE DISPOSITION THEREOF IS NOT PRESCRIBED BY SUCH SECTION, SUCH MONEYS NOT FALLING WITHIN ANY OF THE CLASSES DEALT WITH THEREIN. THE DECISION MENTIONED ABOVE DID NOT RELATE TO AND IS NOT APPLICABLE TO INDEMNITIES REFUNDED BY THE PERSON TO WHOM PAID.

IN THE POST OFFICE DEPARTMENT APPROPRIATION ACT FOR THE FISCAL YEAR 1909, APPROVED MAY 27, 1908, 35 STAT. 415, IT WAS PROVIDED:

* * * THAT HEREAFTER ALL MONEYS RECOVERED OR COLLECTED ON ACCOUNT OF LOSS OF FIRST-CLASS DOMESTIC REGISTERED MATTER WHICH IN THE COURSE OF ADJUSTMENT ARE NOT RESTORED TO THE ORIGINAL OWNERS, SHALL BE COVERED INTO THE TREASURY OF THE UNITED STATES.

THIS PROVISION OF LAW APPLIES SPECIFICALLY TO MONEYS RECOVERED OR COLLECTED FROM PARTIES RESPONSIBLE FOR THE LOSS AND WHEN FIRST-CLASS DOMESTIC REGISTERED MATTER HAS ACTUALLY BEEN LOST. IN SUCH CASES THE MONEYS COLLECTED OR RECOVERED SHOULD BE DISPOSED OF IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT. THE PROVISION, HOWEVER, HAS NO APPLICATION WHERE THE MAIL MATTER INVOLVED IS NOT "FIRST-CLASS REGISTERED DOMESTIC MATTER," OR TO THE MONEY COLLECTED OR RECOVERED AS A REFUND OF THE INDEMNITY PAID UPON THE ASSUMPTION THAT THE ARTICLE WAS LOST, WHEN SUBSEQUENTLY THE ARTICLE IS FOUND AND RESTORED TO ITS OWNER.

SECTIONS 3617 AND 3618, REVISED STATUTES, PROVIDE THAT ANY MONEY RECEIVED FOR THE USE OF THE UNITED STATES SHALL BE TURNED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS AND THAT THE MONEY THUS COVERED CAN NOT BE WITHDRAWN THEREFROM EXCEPT IN CONSEQUENCE OF A SUBSEQUENT APPROPRIATION MADE BY LAW. SECTION 3717, HOWEVER, SPECIFICALLY EXEMPTS FROM ITS OPERATION POSTAL REVENUES.

IN THE PRACTICAL APPLICATION OF THESE PROVISIONS OF LAW IT HAS BEEN THE ACCEPTED AND UNIFORM RULE OF THE ACCOUNTING OFFICERS IN THE PAST TO HOLD THAT ANY MONEY COLLECTED FOR THE USE OF THE UNITED STATES IS PROPERLY FOR CREDIT AS MISCELLANEOUS RECEIPTS IF IT IS COLLECTED UNDER SOME GENERAL LAW OR STATUTE AS A PENALTY; 23 COMP. DEC. 352; A SET OFF, 20 COMP. DEC. 349; INDEMNITIES FOR PUBLIC GOODS LOST BY CARRIERS, 22 COMP. DEC. 279; ID. 703; 2 COMP. GEN. 599. ON THE OTHER HAND, IF THE COLLECTION INVOLVES A REFUND OR REPAYMENT OF MONEYS PAID FROM AN APPROPRIATION IN EXCESS OF WHAT WAS ACTUALLY DUE SUCH REFUND HAS BEEN HELD TO BE PROPERLY FOR CREDIT TO THE APPROPRIATION ORIGINALLY CHARGED; 18 COMP. DEC. 980; 2 COMP. GEN. 599; PROVIDED THE CREDITING OF SUCH MONEYS WILL NOT OPERATE TO AUGMENT THE ORIGINAL AMOUNT APPROPRIATED BY THE CONGRESS FOR THE PURPOSES FOR WHICH THE APPROPRIATION WAS MADE. 22 COMP. DEC. 314. SEE ALSO 18 COMP. DEC. 430 AND 22 ID. 297.

THE MONEYS APPROPRIATED BY THE CONGRESS FOR THE PAYMENT OF INDEMNITIES FOR LOSS OF OR DAMAGE TO REGISTERED, INSURED, OR C.O.D. MAILS MUST BE CONSTRUED AS APPROPRIATIONS CHARGEABLE WITH SUCH INDEMNITIES ONLY WHEN THE DAMAGE OR LOSS ACTUALLY EXISTS, AND IF UPON AN ERRONEOUS ASSUMPTION, BASED UPON FACTS JUSTIFYING THE SAME, MONEY IS PAID AS INDEMNITY FOR ARTICLES WHICH ARE SUBSEQUENTLY FOUND AND RESTORED TO THE OWNER, THE ORIGINAL CHARGING OF THE APPROPRIATION UPON SUCH ERRONEOUS ASSUMPTION IS FOR CORRECTION, AND THE MONEY RECOVERED AS REFUND IS PROPERLY FOR CREDIT TO THE APPROPRIATION ORIGINALLY DEBITED WITH THE INDEMNITY PAYMENT. SUCH CREDITING WILL NOT OPERATE TO AUGMENT THE AMOUNT APPROPRIATED, SINCE UPON THE FACTS AS SUBSEQUENTLY DEVELOPED NO LOSS OR DAMAGE ACTUALLY EXISTED, AND HENCE THE APPROPRIATION SHOULD NOT BE CHARGED WITH ANY INDEMNITY ON ACCOUNT THEREOF.

IN THIS CONNECTION YOUR ATTENTION IS INVITED TO LETTER OF MARCH 24, 1925, TO THE SECRETARY OF THE INTERIOR (A-8399), IN WHICH IT WAS HELD THAT THE AMOUNT IN THE RETIREMENT FUND TO THE CREDIT OF A FORMER EMPLOYEE OF THE POST OFFICE DEPARTMENT MAY BE USED TO LIQUIDATE THE GOVERNMENT'S CLAIM AGAINST THE EMPLOYEE BY REASON OF THEFTS OF C.O.D. MAIL MATTER TO THE EXTENT OF THE INDEMNITY PAID THEREON BY THE GOVERNMENT, SUCH COLLECTION TO BE DEPOSITED TO THE CREDIT OF THE APPROPRIATION "INDEMNITY, DOMESTIC, MAILS.'

WITH RESPECT TO THE SECOND ITEM OF YOUR SUBMISSION, WHAT HAS BEEN SAID ABOVE IN CONNECTION WITH THE OTHER ITEM IS EQUALLY APPLICABLE, AND IN CASES WHERE THROUGH ERROR AN APPROPRIATION IS CHARGED WITH AN AMOUNT IN EXCESS OF WHAT WAS ACTUALLY DUE, THE REFUND OF THE DIFFERENCE BY THE PAYEE IS PROPERLY FOR CREDIT TO THE APPROPRIATION ORIGINALLY DEBITED WITHIN THE LIMITATIONS AND CONDITIONS HEREINBEFORE STATED.

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