A-17771, MARCH 28, 1927, 6 COMP. GEN. 642

A-17771: Mar 28, 1927

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ARE REQUIRED TO BE FILED IN THE GENERAL ACCOUNTING OFFICE. THE REQUIREMENTS AS TO THE FILING OF CONTRACTS IN THE GENERAL ACCOUNTING OFFICE ARE NOT IN ANY WAY AFFECTED OR GOVERNED BY THE REQUIREMENTS AS TO THE FILING OF CONTRACTS IN THE RETURNS OFFICE OF THE DEPARTMENT OF THE INTERIOR. 1927: THERE WAS TRANSMITTED FEBRUARY 3. REQUEST WAS MADE IN LETTER. FOR THE SALE OF TIMBER ON INDIAN LANDS WAS NOT SUCH A CONTRACT AS IS REQUIRED BY SECTION 3744. - SUBSEQUENT TO THIS DECISION SCORES OF CONTRACTS FOR THE SALE OF TRIBAL TIMBER AND THOUSANDS OF CONTRACTS FOR THE SALE OF ALLOTTED TIMBER HAVE BEEN APPROVED BY THE DEPARTMENT OF THE INTERIOR. MANY OF THESE CONTRACTS EXTEND OVER A PERIOD OF TEN OR FIFTEEN YEARS AND THE PRICES ARE SUBJECT TO INCREASE IN THE DISCRETION OF THE COMMISSIONER OF INDIAN AFFAIRS.

A-17771, MARCH 28, 1927, 6 COMP. GEN. 642

CONTRACTS - FILING IN GENERAL ACCOUNTING OFFICE UNDER SECTION 3743, REVISED STATUTES, AS AMENDED BY SECTION 18 OF THE ACT OF JULY 31, 1894, 28 STAT. 210, AND SECTION 304 OF THE ACT OF JUNE 10, 1921, 42 STAT. 24, ALL CONTRACTS ON BEHALF OF THE GOVERNMENT, OR OF ITS WARDS, IN ANY MANNER CONNECTED WITH THE SETTLEMENT OF PUBLIC ACCOUNTS, WHETHER FOR THE SALE OF MATERIAL AND COLLECTION OF MONEY THEREFOR OR FOR THE PURCHASE OF MATERIAL AND THE PAYMENT OF MONEY THEREFOR, OR WHETHER BOTH THE COLLECTION AND PAYMENT OF MONEY BE INVOLVED, ARE REQUIRED TO BE FILED IN THE GENERAL ACCOUNTING OFFICE. THE REQUIREMENTS AS TO THE FILING OF CONTRACTS IN THE GENERAL ACCOUNTING OFFICE ARE NOT IN ANY WAY AFFECTED OR GOVERNED BY THE REQUIREMENTS AS TO THE FILING OF CONTRACTS IN THE RETURNS OFFICE OF THE DEPARTMENT OF THE INTERIOR.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, MARCH 28, 1927:

THERE WAS TRANSMITTED FEBRUARY 3, 1927, TO THIS OFFICE BY THE COMMISSIONER OF INDIAN AFFAIRS FOR DIRECT SETTLEMENT A CLAIM OF THE ALGOMA LUMBER CO. UNDER CONTRACT DATED JUNE 20, 1923, NO. 64073-23, FOR $39.62 AS REIMBURSEMENT OF ONE-HALF OF THE EXPENSE OF FIGHTING FIRE ON JUNE 6, 7, 1926, IN THE SOUTHWEST CORNER OF ANTELOPE VALLEY TIMBER UNIT.

AN EXAMINATION OF THE FILES OF THIS OFFICE FAILED TO DISCLOSE THE CONTRACT HAVING BEEN TRANSMITTED HERE AS PROVIDED IN SECTION 3743, REVISED STATUTES, AS AMENDED BY SECTION 18 OF THE ACT OF JULY 31, 1894, 28 STAT. 210, AND SECTION 304 OF THE ACT OF JUNE 10, 1921, 42 STAT. 24, AND REQUEST WAS MADE IN LETTER, DATED FEBRUARY 26, 1927, OF THIS OFFICE TO THE COMMISSIONER OF INDIAN AFFAIRS FOR THE CONTRACT. BY LETTER DATED MARCH 9, 1927, THE COMMISSIONER HAS FORWARDED A COPY OF THE CONTRACT AND HAS INCLOSED A COPY OF AN OPINION DATED APRIL 17, 1912, OF A FORMER ASSISTANT ATTORNEY GENERAL TO THE EFFECT THAT A CONTRACT UNDER AUTHORITY OF SECTION 7 OF THE ACT OF JUNE 25, 1910, 36 STAT. 855, FOR THE SALE OF TIMBER ON INDIAN LANDS WAS NOT SUCH A CONTRACT AS IS REQUIRED BY SECTION 3744, REVISED STATUTES, TO BE FILED IN THE RETURNS OFFICE OF THE INTERIOR DEPARTMENT. THE COMMISSIONER STATED THAT---

SUBSEQUENT TO THIS DECISION SCORES OF CONTRACTS FOR THE SALE OF TRIBAL TIMBER AND THOUSANDS OF CONTRACTS FOR THE SALE OF ALLOTTED TIMBER HAVE BEEN APPROVED BY THE DEPARTMENT OF THE INTERIOR. MANY OF THESE CONTRACTS EXTEND OVER A PERIOD OF TEN OR FIFTEEN YEARS AND THE PRICES ARE SUBJECT TO INCREASE IN THE DISCRETION OF THE COMMISSIONER OF INDIAN AFFAIRS. VERY FEW OF THE CONTRACTS PROVIDE FOR THE PAYMENT OF A DEFINITE SUM, THE AMOUNT TO BE PAID BEING ORDINARILY DEPENDENT UPON THE AMOUNT OF TIMBER ACTUALLY CUT. EVEN THE PRICE PER THOUSAND FEET IS NOT DEFINITELY FIXED FOR LONG PERIODS AND IN MANY INSTANCES THE PRICE WILL CHANGE AT THE END OF EACH THREE-YEAR PERIOD.

CHANGING CONDITIONS HAVE REQUIRED FREQUENT MODIFICATIONS OF CONTRACTS IN THE PAST AND PROBABLY WILL IN THE FUTURE. THIS NECESSITATES EXAMINATION OF THE ORIGINAL CONTRACT AND OFTEN THE FURNISHING OF CERTIFIED COPIES OF THE SAME. EACH OF THE GENERAL CONTRACTS IS SECURED BY A BOND AND THE PRACTICE OF SURETY COMPANIES OF WRITING SHORT TERM BONDS AND THE DEATH OR OTHER INCAPACITY OF INDIVIDUAL SURETIES FREQUENTLY CALLS FOR CONSULTATION OF THE CONTRACT. WHEN SUIT ON A CONTRACT OR BOND IS BEGUN CERTIFIED COPIES, IN DUPLICATE, OF THE ORIGINAL CONTRACT AND BOND MUST BE FURNISHED THE DEPARTMENT OF JUSTICE. WERE THESE ORIGINALS AT THE GENERAL ACCOUNTING OFFICE MUCH DELAY AND INCONVENIENCE TO THAT OFFICE AND THIS OFFICE WOULD RESULT IN THIS CONNECTION.

THE WITHDRAWAL FROM THE INDIAN OFFICE FILES OF ALL ORIGINAL TIMBER CONTRACTS NOW IN FORCE WOULD RESULT IN A DISASTROUS MUTILATION OF THE FILES AND THIS OFFICE HAS NO FUNDS WITH WHICH TO EMPLOY THE COPYISTS THAT WOULD BE NEEDED FOR SEVERAL MONTHS TO MAKE COPIES OF THE SAME. IT IS NOT FELT THAT THE ORIGINALS OF SUCH CONTRACTS, OR EVEN COPIES OF THEM, WOULD BE OF MATERIAL ASSISTANCE TO THE GENERAL ACCOUNTING OFFICE IN AUDITING THE ACCOUNTS OF A SPECIAL DISBURSING AGENT AT AN INDIAN AGENCY. THE CONTRACTS DO NOT CALL FOR A DEFINITE PAYMENT AND THE AMOUNT COLLECTED IN ANY QUARTER OR FISCAL YEAR IS WHOLLY DEPENDENT UPON THE AMOUNT OF TIMBER CUT DURING THAT PERIOD, AS TO WHICH THE GENERAL ACCOUNTING OFFICE CAN HAVE NO POSSIBLE CHECK. THE TOTAL AMOUNT COLLECTIBLE UNDER THE FULL TERM OF THE CONTRACT IS IMPOSSIBLE OF ASCERTAINMENT BY AN AUDITING OFFICIAL EXCEPT AS HE RELIES UPON THE STATEMENT OF ANOTHER PARTY AS TO THE AMOUNT OF TIMBER ACTUALLY CUT.

THE REQUIREMENTS OF SECTION 3744, REVISED STATUTES, WITH RESPECT TO THE FILING OF COPIES OF CONTRACTS AND BIDS IN THE RETURNS OFFICE AND THE REQUIREMENTS OF SECTION 3743, REVISED STATUTES, AS AMENDED, SUPRA, WITH RESPECT TO THE FILING OF CONTRACTS IN THIS OFFICE APPEAR TO HAVE BEEN CONFUSED BY THE COMMISSIONER. WHATEVER MAY BE THE REQUIREMENT WITH RESPECT TO THE FILING OF CONTRACTS IN THE RETURNS OFFICE, IT IS CLEAR THAT BOTH THE LAW AND GOOD ACCOUNTING PROCEDURE REQUIRE ALL CONTRACTS ON BEHALF OF THE GOVERNMENT OR ON BEHALF OF THE INDIANS WHO ARE ITS WARDS TO BE FILED IN THE GENERAL ACCOUNTING OFFICE--- WHETHER THE CONTRACT IS FOR THE SALE OF MATERIAL AND COLLECTION OF MONEY THEREFOR OR FOR THE PURCHASE OF MATERIAL AND THE PAYMENT OF MONEY THEREFOR, OR WHETHER IT MAY INVOLVE BOTH THE COLLECTION AND PAYMENT OF MONEY UNDER CERTAIN CIRCUMSTANCES, AS IN THIS INSTANCE.

IT IS REQUESTED THAT APPROPRIATE INSTRUCTIONS BE ISSUED TO SUCH OF THE OFFICERS AND EMPLOYEES OF THE INTERIOR DEPARTMENT AS MAY BE NECESSARY TO INSURE COMPLIANCE WITH THE FOREGOING AS TO ALL CONTRACTS HEREAFTER ENTERED INTO WHETHER FOR THE PURCHASE OR SALE OF MATERIAL, ETC. ..END :