A-18917, JULY 16, 1927, 7 COMP. GEN. 43

A-18917: Jul 16, 1927

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YOU CALL ATTENTION TO THE GREAT AMOUNT OF WORK AND EXPENSE ENTAILED IN EXAMINING THE LARGE NUMBER OF BONDS NECESSARY TO BE OBTAINED FROM POST OFFICE DEPARTMENT EMPLOYEES AND SUGGEST THAT "NOTHING WOULD SEEM TO BE ACCOMPLISHED IN THE WAY OF PROTECTING THE GOVERNMENT'S FINANCIAL INTEREST BY REQUIRING POSTAL EMPLOYEES TO HAVE A NEW DOCUMENT EXECUTED EVERY FOUR YEARS BY THEMSELVES AND THE COMPANIES WHICH MAY BE THEIR SURETIES.'. IS IN PART AS FOLLOWS: HEREAFTER EVERY OFFICER REQUIRED BY LAW TO TAKE AND APPROVE OFFICIAL BONDS SHALL CAUSE THE SAME TO BE EXAMINED AT LEAST ONCE EVERY TWO YEARS FOR THE PURPOSE OF ASCERTAINING THE SUFFICIENCY OF THE SURETIES THEREON. HEREAFTER EVERY OFFICER WHOSE DUTY IT IS TO TAKE AND APPROVE OFFICIAL BONDS SHALL CAUSE ALL SUCH BONDS TO BE RENEWED EVERY FOUR YEARS AFTER THEIR DATES.

A-18917, JULY 16, 1927, 7 COMP. GEN. 43

BONDS, SURETY - RENEWAL SECTION 5 OF THE ACT OF MARCH 2, 1895, 28 STAT. 807, REQUIRES THAT OFFICIAL BONDS SHALL BE RENEWED EVERY FOUR YEARS, AND THE PAYMENT OF ANNUAL PREMIUMS ON BONDS OF POST-OFFICE INSPECTORS AND OTHER EMPLOYEES OF THE POSTAL SERVICE CAN NOT BE CONSIDERED A RENEWAL WITHIN THE MEANING OF THAT ACT.

COMPTROLLER GENERAL MCCARL TO THE POSTMASTER GENERAL, JULY 16, 1927:

THERE HAS BEEN RECEIVED YOUR LETTER OF JUNE 16, 1927, REQUESTING DECISION AS TO WHETHER THE ANNUAL PAYMENT OF PREMIUMS ON CORPORATE SURETY BONDS FURNISHED BY GOVERNMENT OFFICERS AND EMPLOYEES COULD BE CONSTRUED AS A COMPLIANCE WITH THE PROVISION OF THE ACT OF MARCH 2, 1895, 28 STAT. 808, REQUIRING THAT SUCH BONDS BE RENEWED EVERY FOUR YEARS. YOU CALL ATTENTION TO THE GREAT AMOUNT OF WORK AND EXPENSE ENTAILED IN EXAMINING THE LARGE NUMBER OF BONDS NECESSARY TO BE OBTAINED FROM POST OFFICE DEPARTMENT EMPLOYEES AND SUGGEST THAT "NOTHING WOULD SEEM TO BE ACCOMPLISHED IN THE WAY OF PROTECTING THE GOVERNMENT'S FINANCIAL INTEREST BY REQUIRING POSTAL EMPLOYEES TO HAVE A NEW DOCUMENT EXECUTED EVERY FOUR YEARS BY THEMSELVES AND THE COMPANIES WHICH MAY BE THEIR SURETIES.'

SECTION 5 OF THE ACT OF MARCH 2, 1895, 28 STAT. 807-808, IS IN PART AS FOLLOWS:

HEREAFTER EVERY OFFICER REQUIRED BY LAW TO TAKE AND APPROVE OFFICIAL BONDS SHALL CAUSE THE SAME TO BE EXAMINED AT LEAST ONCE EVERY TWO YEARS FOR THE PURPOSE OF ASCERTAINING THE SUFFICIENCY OF THE SURETIES THEREON; AND EVERY OFFICER HAVING POWER TO FIX THE AMOUNT OF AN OFFICIAL BOND SHALL EXAMINE IT TO ASCERTAIN THE SUFFICIENCY OF THE AMOUNT THEREOF AND APPROVE OR FIX SAID AMOUNT AT LEAST ONCE IN TWO YEARS AND AS MUCH OFTENER AS HE MAY DEEM IT NECESSARY.

HEREAFTER EVERY OFFICER WHOSE DUTY IT IS TO TAKE AND APPROVE OFFICIAL BONDS SHALL CAUSE ALL SUCH BONDS TO BE RENEWED EVERY FOUR YEARS AFTER THEIR DATES, BUT HE MAY REQUIRE SUCH BONDS TO BE RENEWED OR STRENGTHENED OFTENER IF HE DEEM SUCH ACTION NECESSARY. IN THE DISCRETION OF SUCH OFFICER THE REQUIREMENT OF A NEW BOND MAY BE WAIVED FOR THE PERIOD OF THE SERVICE OF A BONDED OFFICER AFTER THE EXPIRATION OF A FOUR-YEAR TERM OF SERVICE PENDING THE APPOINTMENT AND QUALIFICATION OF HIS SUCCESSOR: PROVIDED, THAT THE NONPERFORMANCE OF ANY REQUIREMENT OF THIS SECTION ON THE PART OF ANY OFFICIAL OF THE GOVERNMENT SHALL NOT BE HELD TO AFFECT IN ANY RESPECT THE LIABILITY OF PRINCIPAL OR SURETIES ON ANY BOND MADE OR TO BE MADE TO THE UNITED STATES: PROVIDED FURTHER, THAT THE LIABILITY OF THE PRINCIPAL AND SURETIES ON ALL OFFICIAL BONDS SHALL CONTINUE AND COVER THE PERIOD OF SERVICE ENSUING UNTIL THE APPOINTMENT AND QUALIFICATION OF THE SUCCESSOR OF THE PRINCIPAL: AND PROVIDED FURTHER, THAT NOTHING IN THIS SECTION SHALL BE CONSTRUED TO REPEAL OR MODIFY SECTION THIRTY EIGHT HUNDRED AND THIRTY-SIX OF THE REVISED STATUTES OF THE UNITED STATES.

AT THE TIME OF THIS ENACTMENT THE CONGRESS HAD ALREADY PROVIDED IN THE ACT OF AUGUST 13, 1894, 28 STAT. 279, FOR THE GENERAL ACCEPTANCE OF CORPORATE SURETY BONDS ISSUED BY APPROVED COMPANIES, AND IT MUST BE ASSUMED THAT SUCH BONDS WERE AS MUCH IN CONTEMPLATION IN ENACTING THE ACT OF MARCH 2, 1895, AS BONDS GIVEN BY INDIVIDUAL SURETIES.

THE PROVISION REQUIRING RENEWAL EVERY FOUR YEARS IS NOT INCONSISTENT WITH OTHER ENACTMENTS (SECS. 3836 AND 3837, REVISED STATUTES, AND THE ACT OF MARCH 3, 1905, 33 STAT. 1259) DIRECTING THE EXECUTION AND ACCEPTANCE OF NEW BONDS IN THE POSTAL SERVICE UPON THE REQUEST OF THE PRINCIPAL OR THE SURETY, OR WHEN DEEMED DESIRABLE BY THE POSTMASTER GENERAL, AND FIXING THE RESPONSIBILITY OF SURETIES ON THE FORMER BONDS IN SUCH CASES AND IN CASES OF VACANCY IN OFFICE. THESE PROVISIONS NOT BEING INCONSISTENT, THERE APPEARS NO BASIS FOR EXCLUDING THE POSTAL SERVICE FROM THE GENERAL REQUIREMENT THAT OFFICIAL BONDS BE RENEWED EVERY FOUR YEARS.

WITH REFERENCE TO THE SUGGESTION THAT NO USEFUL PURPOSE IS SERVED BY REQUIRING THE RENEWAL OF THESE BONDS EVERY FOUR YEARS, IT MAY BE STATED THAT IT IS NOT FOR THE ACCOUNTING OR ADMINISTRATIVE OFFICERS, IN DETERMINING WHETHER A PARTICULAR STATUTORY REQUIREMENT SHOULD BE COMPLIED WITH, TO QUESTION THE WISDOM OR NECESSITY OF SAID REQUIREMENT. IT IS SUFFICIENT THAT THE LEGISLATIVE POWERS HAVE SEEN FIT TO ENACT THE REQUIREMENT INTO LAW.

THERE APPEARS NOTHING IN THE PROVISION OF THE ACT OF MARCH 2, 1895, HERE IN QUESTION, TO WARRANT A CONCLUSION THAT THE ANNUAL PAYMENT OF PREMIUMS ON SUCH BONDS CONSTITUTES A RENEWAL THEREOF AS REQUIRED BY THE STATUTE. WHAT IS CONTEMPLATED UNDER THE REQUIREMENT IS SUCH A FIXING OF LIABILITY WITH RESPECT TO TIME THAT THE ACCOUNTS MAY BE FINALLY CLOSED AND THE LIABILITIES DEFINITELY DETERMINED UNDER THE OLD BOND AND NEW ACCOUNTS OPENED UP UNDER THE NEW BOND. WHILE SAID PROVISION IS ADDRESSED TO THE ADMINISTRATIVE OFFICERS WHOSE DUTY IT IS TO TAKE AND APPROVE OFFICIAL BONDS, AND IMPOSES ON THEM THE RESPONSIBILITY OF CAUSING ALL SUCH BONDS TO BE RENEWED EVERY FOUR YEARS, GOOD ACCOUNTING PROCEDURE REQUIRES THAT THE FAILURE TO RENEW BE CALLED TO THE ATTENTION OF THE ADMINISTRATIVE OFFICE CONCERNED WHEN THIS OFFICE IS CALLED UPON TO APPROVE A REQUISITION FOR FUNDS UNDER A BOND DATED MORE THAN FOUR YEARS PRIOR TO SUCH REQUISITION, AND TO TAKE SUCH FURTHER STEPS AS MAY BE DEEMED NECESSARY TO PROTECT THE FISCAL INTERESTS OF THE UNITED STATES IN ANY PARTICULAR CASE.