A-16182, NOVEMBER 18, 1926, 6 COMP. GEN. 348

A-16182: Nov 18, 1926

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AT GOVERNMENT RESERVATIONS BY THE BIOLOGICAL SURVEY INCURRED PRIOR TO THE SALES ARE NOT SUCH EXPENSES OF THE SALES AS ARE CONTEMPLATED BY THE ACT OF JUNE 8. THE FACT THAT NO APPROPRIATED FUNDS ARE AVAILABLE FOR THIS PURPOSE DURING THE PRESENT FISCAL YEAR. THE PRACTICE WILL BE PERMITTED TO CONTINUE UNTIL JUNE 30. IS EXPLAINED BY THE WIDE VARIETY OF PROCESSES INVOLVED IN THE DISPOSAL. THERE IS NEED OF LABORERS TO HANDLE AND PREPARE THE CARCASSES FOR SHIPMENT AND TO BUILD CRATES. ARE BONA FIDE EXPENSES OF SALE. THE BUREAU OF BIOLOGICAL SURVEY HAS AT ALL TIMES EXERCISED CARE IN SEEING THAT NONE OF THE SPECIAL FUNDS WAS USED FOR PURPOSES NOT DIRECTLY CONNECTED WITH DISPOSAL. WHAT ITEMS CONSTITUTE EXPENSES OF THE SALES UNDER THIS ACT IS A QUESTION WHICH HAS BEEN THE SUBJECT OF NUMEROUS DECISIONS BY THIS OFFICE AND THE FORMER COMPTROLLERS OF THE TREASURY.

A-16182, NOVEMBER 18, 1926, 6 COMP. GEN. 348

SALES - PROCEEDS OF SALES OF WILD ANIMALS ON GOVERNMENT RESERVATIONS EXPENSES INCIDENT TO THE HERDING, CORRALLING, FEEDING, SLAUGHTERING, REFRIGERATION, ETC., IN CONNECTION WITH THE SALE OF WILD ANIMALS, MEATS, CARCASSES, ETC., AT GOVERNMENT RESERVATIONS BY THE BIOLOGICAL SURVEY INCURRED PRIOR TO THE SALES ARE NOT SUCH EXPENSES OF THE SALES AS ARE CONTEMPLATED BY THE ACT OF JUNE 8, 1896, 29 STAT. 268, TO BE PAID FROM THE PROCEEDS OF SUCH SALES. IN VIEW OF THE CONTINUED PAST PRACTICE TO SO CHARGE THE PROCEEDS OF SUCH SALES, HOWEVER, AND THE FACT THAT NO APPROPRIATED FUNDS ARE AVAILABLE FOR THIS PURPOSE DURING THE PRESENT FISCAL YEAR, THE PRACTICE WILL BE PERMITTED TO CONTINUE UNTIL JUNE 30, 1927, BUT NOT THEREAFTER IN THE ABSENCE OF SPECIFIC LEGISLATIVE AUTHORITY THEREFOR.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF AGRICULTURE, NOVEMBER 18, 1926:

THERE HAS BEEN RECEIVED YOUR LETTER OF OCTOBER 9, 1926, REFERRING TO MY COMMUNICATION OF AUGUST 16, 1926, RELATIVE TO ACCOUNTING FOR PROCEEDS OF SALES OF WILD ANIMALS, ETC., BY THE BUREAU OF BIOLOGICAL SURVEY IN CONNECTION WITH THE MAINTENANCE, ETC., OF MAMMAL AND BIRD RESERVATIONS.

IT APPEARS THAT THE PROCEDURE ADOPTED AND FOLLOWED BY YOUR DEPARTMENT IN CONNECTION WITH THE SALES IN QUESTION HAS BEEN TO DEPOSIT THE PROCEEDS THEREOF IN A SPECIAL DEPOSIT SUSPENSE ACCOUNT AND TO USE THE SAME TO PAY FOR FIELD LABOR AND OTHER EXPENSES OF SUBSEQUENT SALES OF THE SAME CHARACTER, INCLUDING EXPENSES OF CARE AND PREPARATION OF THE ANIMALS, CARCASSES, ETC., PRIOR TO SALE.

IN CONNECTION WITH THE NATURE OF THE SALES AND EXPENSES PAID FROM THE PROCEEDS THEREOF, YOUR LETTER STATES:

* * * THE SALES COMPRISE LIVE ANIMALS, DRESSED QUARTERS OR EVEN SMALLER PORTIONS, AND HIDES. THE DIVERSITY OF THE EXPENSES, BOTH AS TO LABOR AND MATERIAL, IS EXPLAINED BY THE WIDE VARIETY OF PROCESSES INVOLVED IN THE DISPOSAL. ANIMALS MUST BE SEGREGATED AND FED IN CORRALS, HENCE THE NECESSITY FOR HERDERS AND HAY. THERE IS NEED OF LABORERS TO HANDLE AND PREPARE THE CARCASSES FOR SHIPMENT AND TO BUILD CRATES, ETC.; OF BUTCHERS; AND OF A LARGE NUMBER OF ARTICLES, SUCH AS CHEESECLOTH, BURLAP, ROPE, TWINE, LUMBER FOR CRATING PURPOSES; OF MANY CLASSES OF SERVICES, AS HIRE OF TRUCKS FOR HAULING, TELEPHONE, TELEGRAPH, ELECTRIC CURRENT FOR REFRIGERATION, IN CASES WHERE AFTER SLAUGHTER THE ANIMALS MUST BE PLACED IN NEAR-BY REFRIGERATION PLANTS PENDING SALE. ALL OF THESE MANY AND VARIOUS COSTS, HOWEVER, ARE BONA FIDE EXPENSES OF SALE. THE BUREAU OF BIOLOGICAL SURVEY HAS AT ALL TIMES EXERCISED CARE IN SEEING THAT NONE OF THE SPECIAL FUNDS WAS USED FOR PURPOSES NOT DIRECTLY CONNECTED WITH DISPOSAL.

THE ACT OF JUNE 8, 1896, 29 STAT. 268, PROVIDES THAT FROM THE PROCEEDS OF SALES OF OLD MATERIALS, ETC., BEFORE BEING DEPOSITED IN THE TREASURY AS MISCELLANEOUS RECEIPTS "THERE MAY BE PAID THE EXPENSES OF SUCH SALES, AS APPROVED BY THE ACCOUNTING OFFICERS OF THE TREASURY.' WHAT ITEMS CONSTITUTE EXPENSES OF THE SALES UNDER THIS ACT IS A QUESTION WHICH HAS BEEN THE SUBJECT OF NUMEROUS DECISIONS BY THIS OFFICE AND THE FORMER COMPTROLLERS OF THE TREASURY, AND IT HAS BEEN HELD THAT "THE EXPENSES OF SUCH SALES" AS CONTEMPLATED BY THE ACT OF 1896 ARE THOSE DIRECTLY INCIDENT TO THE SALE OR SALES INVOLVED. 5 COMP. GEN. 680.

THERE WOULD APPEAR NO LEGAL OBJECTION TO TREATING ALL THE SALES OF ANIMALS, CARCASSES, ETC., FROM A PARTICULAR RESERVATION AS ONE SALES PROJECT, AND TO USING THE FUNDS DERIVED THEREFROM TO PAY EXPENSES OF SUCH SALES IN THE AGGREGATE RATHER THAN ATTEMPTING A SEPARATE ACCOUNTING FOR EACH INDIVIDUAL SALE. HOWEVER, EXPENSES INCIDENT TO THE CORRALLING, FEEDING, SLAUGHTERING, REFRIGERATION, ETC., PRIOR TO THE SALE, MAY NOT PROPERLY BE REGARDED AS "EXPENSES OF SUCH SALES" WITHIN THE MEANING OF THE ACT OF JUNE 8, 1896. THEY ARE MORE IN THE NATURE OF ADMINISTRATIVE EXPENSES LOGICALLY INCIDENT TO THE UPKEEP AND MAINTENANCE OF THE RESERVATION AND AS SUCH ARE PROPERLY TO BE BORNE BY THE APPROPRIATION MADE FOR THAT PURPOSE, RATHER THAN CHARGEABLE TO THE GROSS PROCEEDS OF THE SALE. 18 COMP. DEC. 5; 20 ID. 20. THE EXPENSES OF THE SALES WITHIN THE MEANING OF THE ACT OF 1896, AS CONSTRUED BY THE ACCOUNTING OFFICERS, ARE LIMITED TO THOSE WHICH PERTAIN DIRECTLY TO THE SALE OR SALES IN QUESTION, SUCH AS AUCTIONEER FEES, ADVERTISING, CARTAGE TO PLACE OF SALE, COST OF INSPECTION AND THE LIKE, HAVING A DIRECT RELATION TO THE SALES INVOLVED. 3 COMP. DEC. 746.

THE CHARGING OF ADMINISTRATIVE EXPENSES TO THE PROCEEDS OF THE SALES AS APPEARS TO HAVE BEEN DONE BY YOUR DEPARTMENT UNDER THE PRESENT PRACTICE IS UNAUTHORIZED AND SHOULD BE DISCONTINUED.

IN VIEW OF THE FACT, HOWEVER, THAT THE ESTIMATES AND APPROPRIATIONS MADE FOR THE PRESENT FISCAL YEAR WERE BASED UPON THE EXISTING PRACTICE RELATIVE TO THE USE OF THESE PROCEEDS OF SALES, AND THEREFORE DID NOT OTHERWISE PROVIDE FOR THE EXPENSES RELATIVE TO THE PREPARATION, ETC., OF THE ANIMALS, MEATS, ETC., TO BE SOLD FROM THESE RESERVATIONS, THE PRESENT PROCEDURE IN THE MATTER MAY BE PERMITTED TO CONTINUE DURING THE REMAINDER OF THE CURRENT FISCAL YEAR. BUT IN THE ABSENCE OF SPECIFIC LEGISLATIVE AUTHORITY THEREFOR, THE USE OF SUCH PROCEEDS FOR EXPENSES INCIDENT TO SUCH OBJECTS AS HERDING, FEEDING, CORRALLING, SLAUGHTERING, ETC., MUST BE DISCONTINUED NOT LATER THAN JUNE 30, 1927.

IN THIS CONNECTION, SINCE, AS YOU STATE IN YOUR LETTER, SALES OF SURPLUS BUFFALO AND ELK ARE TO BE CONTINUED DURING WINTER SEASONS FOR SEVERAL YEARS IN THE FUTURE, IT WOULD SEEM ADVISABLE THAT THE MATTERS BE ADMINISTRATIVELY PRESENTED TO THE CONGRESS WITH A VIEW TO OBTAINING PROPER LEGISLATIVE AUTHORITY FOR TREATING THE CARE, PREPARATION, AND SALE OF THESE ANIMALS, MEATS, ETC., AS AN INDUSTRY, AND FOR USING THE PROCEEDS THEREOF AS A REVOLVING FUND TO PAY ALL EXPENSES INCIDENT TO THE INDUSTRY, THE PROFITS ONLY TO BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS.

IN THE MEANTIME A PROPER ACCOUNTING OF EXPENSES CHARGED TO THE SPECIAL DEPOSIT ACCOUNT IN WHICH THE PROCEEDS OF THESE SALES ARE CARRIED SHOULD BE MADE AND SUFFICIENT DATA AND INFORMATION RELATIVE THERETO SHOULD BE FURNISHED TO ENABLE A SATISFACTORY AUDIT BY THIS OFFICE OF THE EXPENDITURES FROM SAID FUND. VOUCHERS FOR MATERIAL, SUPPLIES, ETC., SHOULD BEAR A COMPREHENSIVE STATEMENT AS TO THE USE MADE THEREOF AND THE NECESSITY THEREFOR IN CONNECTION WITH THE SALE OR SALES, AND VOUCHERS FOR PERSONAL SERVICES OR LABOR SHOULD SHOW THE ESSENTIAL FACTS AS TO THE EMPLOYMENT, INCLUDING THE DURATION AND THE CHARACTER THEREOF, AND THE RELATION TO THE SALES INVOLVED.

THE PROCEDURE SUGGESTED BY YOU FOR FINANCING THE INDUSTRY FOR THE REMAINDER OF THIS FISCAL YEAR BY USING AVAILABLE FUNDS IN A CURRENT APPROPRIATION, TO BE THEREAFTER REIMBURSED FROM PROCEEDS OF SALES, MAY BE FOLLOWED IF THE RECEIPTS AND EXPENDITURES ARE PROPERLY ACCOUNTED FOR.