A-16112, NOVEMBER 2, 1926, 6 COMP. GEN. 315

A-16112: Nov 2, 1926

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

DEPOSIT OF PUBLIC FUNDS IN BANKS IN FOREIGN COUNTRIES THERE IS NO AUTHORITY OF LAW FOR THE DESIGNATION OF A BANK IN A FOREIGN COUNTRY AS A DEPOSITORY FOR PUBLIC FUNDS. WHEREIN CREDIT WAS DISALLOWED FOR THE SUM OF $1.17 PAID BY HIM TO THE BANK OF NEW SOUTH WALES ON VOUCHER 12 FOR THE QUARTER ENDING DECEMBER 31. OR WHAT IS USUALLY DESIGNATED BY BANKS AS "A SERVICE CHARGE.'. IN REQUESTING REVIEW OF THE DISALLOWANCE THE CONSUL STATES THAT THE AMOUNT PAID IS THAT CUSTOMARILY CHARGED BY AUSTRALIAN BANKS FOR KEEPING CHECKING ACCOUNTS. THAT SUCH AN ACCOUNT IS USUALLY NECESSARY TO TAKE CARE OF THE COMPARATIVELY LARGE SUMS REALIZED PERIODICALLY FROM THE SALE OF OFFICIAL DRAFTS. IT WAS HELD BY A FORMER COMPTROLLER OF THE TREASURY.

A-16112, NOVEMBER 2, 1926, 6 COMP. GEN. 315

DEPOSIT OF PUBLIC FUNDS IN BANKS IN FOREIGN COUNTRIES THERE IS NO AUTHORITY OF LAW FOR THE DESIGNATION OF A BANK IN A FOREIGN COUNTRY AS A DEPOSITORY FOR PUBLIC FUNDS, BUT THE SECRETARY OF THE TREASURY MAY PERMIT DISBURSING OFFICERS, WHEN SPECIALLY AUTHORIZED BY THE HEADS OF THEIR RESPECTIVE DEPARTMENTS, TO KEEP FUNDS ADVANCED FOR DISBURSEMENT IN FOREIGN BANKS AT THEIR OWN RISK. ANY EXPENSE INCURRED, HOWEVER, AS A RESULT OF SUCH DEPOSIT MUST BE BORNE BY THE DISBURSING OFFICER.

DECISION BY COMPTROLLER GENERAL MCCARL, NOVEMBER 2, 1926:

R. L. RANKIN, UNITED STATES CONSUL AT NEWCASTLE, NEW SOUTH WALES, AUSTRALIA, HAS REQUESTED REVIEW OF SETTLEMENT NO. C-29086-S, DATED JULY 31, 1925, WHEREIN CREDIT WAS DISALLOWED FOR THE SUM OF $1.17 PAID BY HIM TO THE BANK OF NEW SOUTH WALES ON VOUCHER 12 FOR THE QUARTER ENDING DECEMBER 31, 1924, BEING THE SUM EXACTED BY SAID BANK FOR KEEPING A CHECKING ACCOUNT FOR THE CONSUL, OR WHAT IS USUALLY DESIGNATED BY BANKS AS "A SERVICE CHARGE.'

IN REQUESTING REVIEW OF THE DISALLOWANCE THE CONSUL STATES THAT THE AMOUNT PAID IS THAT CUSTOMARILY CHARGED BY AUSTRALIAN BANKS FOR KEEPING CHECKING ACCOUNTS, AND THAT SUCH AN ACCOUNT IS USUALLY NECESSARY TO TAKE CARE OF THE COMPARATIVELY LARGE SUMS REALIZED PERIODICALLY FROM THE SALE OF OFFICIAL DRAFTS. THIS RAISES THE QUESTION AS TO THE AUTHORITY OF THE CONSUL TO DEPOSIT THE PROCEEDS FROM THE SALE OF OFFICIAL DRAFTS IN THE AUSTRALIAN BANK.

PUBLIC FUNDS MAY BE DEPOSITED IN THOSE BANKS DESIGNATED AS GOVERNMENT DEPOSITORIES BY THE SECRETARY OF THE TREASURY UNDER THE PROVISIONS OF SECTION 3620, REVISED STATUTES. HOWEVER, IT WAS HELD BY A FORMER COMPTROLLER OF THE TREASURY, BY DECISION OF JANUARY 22, 1914, 20 COMP. DEC. 520, THAT THE SECRETARY OF THE TREASURY WAS WITHOUT AUTHORITY TO DESIGNATE A BANK IN A FOREIGN COUNTRY AS A DEPOSITORY FOR GOVERNMENT FUNDS, BUT THAT HE MIGHT PERMIT DISBURSING OFFICERS, WHEN SPECIALLY AUTHORIZED BY THE HEADS OF THEIR RESPECTIVE DEPARTMENTS, TO KEEP FUNDS ADVANCED FOR DISBURSEMENT IN FOREIGN BANKS AT THEIR OWN RISK.

THERE IS NO EVIDENCE IN THE INSTANT CASE THAT PERMISSION WAS GIVEN BY THE SECRETARY OF THE TREASURY TO DEPOSIT FUNDS IN THE BANK OF NEW SOUTH WALES OR THAT THE SECRETARY OF STATE SPECIALLY AUTHORIZED SUCH DEPOSIT. IN THE ABSENCE OF SUCH AUTHORITY AND PERMISSION THE KEEPING OF FUNDS OF THE UNITED STATES IN SAID BANK WAS UNAUTHORIZED. EVEN IF SUCH AUTHORITY AND PERMISSION HAD BEEN OBTAINED BY THE CONSUL, THE DEPOSITING OF THE FUNDS WAS AT HIS OWN RISK, AND SINCE THE GOVERNMENT WAS PROTECTED BY HIS OFFICIAL BOND, IT MUST ALSO BE CONCLUDED THAT THE DEPOSIT WAS FOR THE CONSUL'S OWN CONVENIENCE, HENCE THE EXPENSE SHOULD BE BORNE BY HIM.