A-33694, NOVEMBER 1, 1930, 10 COMP. GEN. 193

A-33694: Nov 1, 1930

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THE APPROPRIATION FOR THE DEPARTMENT OR ESTABLISHMENT UNDER WHICH THE EMPLOYEES WERE APPOINTED. OR THEIR SERVICES WERE OTHERWISE ENGAGED. IS THE APPROPRIATION PRIMARILY IN THE FIRST INSTANCE CHARGEABLE WITH THEIR SALARIES OR COMPENSATION. REIMBURSEMENT TO SUCH APPROPRIATION IS AUTHORIZED ONLY UPON A SHOWING THAT THE LOANING OF SERVICES TO. WHERE SUCH MATERIAL MUST BE REPLACED IN KIND IN ORDER TO CARRY ON THE WORK FOR WHICH THE RIVER AND HARBOR APPROPRIATION INVOLVED WAS MADE. AS FOLLOWS: THERE ARE ENCLOSED HEREWITH FOR CONSIDERATION PAPERS INVOLVING THE QUESTION OF REIMBURSING THE WAR DEPARTMENT FOR COST INCURRED IN FURNISHING LABOR AND MATERIAL AND CONSTRUCTING A BOARD WALK AT THE U.S.

A-33694, NOVEMBER 1, 1930, 10 COMP. GEN. 193

DEPARTMENTS AND ESTABLISHMENTS - SERVICES BETWEEN - REIMBURSEMENT OF APPROPRIATIONS WHERE ONE DEPARTMENT OR ESTABLISHMENT OF THE GOVERNMENT FURNISHES LABOR AND MATERIAL NECESSARY IN THE PERFORMANCE OF CERTAIN WORK FOR ANOTHER DEPARTMENT OR ESTABLISHMENT, THE APPROPRIATION FOR THE DEPARTMENT OR ESTABLISHMENT UNDER WHICH THE EMPLOYEES WERE APPOINTED, OR THEIR SERVICES WERE OTHERWISE ENGAGED, IS THE APPROPRIATION PRIMARILY IN THE FIRST INSTANCE CHARGEABLE WITH THEIR SALARIES OR COMPENSATION, AND REIMBURSEMENT TO SUCH APPROPRIATION IS AUTHORIZED ONLY UPON A SHOWING THAT THE LOANING OF SERVICES TO, OR THE DOING OF WORK FOR, OR THE OTHER DEPARTMENT OR ESTABLISHMENT INCREASED THE BURDEN OF, OR CAUSED ADDITIONAL EXPENDITURES UNDER, THE APPROPRIATION FIRST CHARGEABLE. THE APPROPRIATIONS FOR RIVER AND HARBOR WORK UNDER THE WAR DEPARTMENT BEING OF SUCH A CONTINUING NATURE THAT THE DIVERTING OF LABOR AND MATERIAL, WHICH OTHERWISE WOULD BE USED ON SAID WORK, TO A NAVY PROJECT NECESSARILY IMPOSES AN ADDITIONAL BURDEN ON THE RIVER AND HARBOR APPROPRIATIONS BY CREATING A NEED FOR SUBSEQUENT APPROPRIATIONS SOONER, OR IN GREATER AMOUNT THAN IF THE WORK FOR THE NAVY HAD NOT BEEN DONE, THERE WOULD APPEAR TO BE NO LEGAL OBJECTION, UNDER SUCH CIRCUMSTANCES, TO REIMBURSING SUCH APPROPRIATIONS FOR THE INCREASED BURDEN IMPOSED UPON THEM ON THE BASIS OF THE ACTUAL COST OF THE LABOR AS WELL AS THE COST OF THE MATERIAL USED ON THE JOB, WHERE SUCH MATERIAL MUST BE REPLACED IN KIND IN ORDER TO CARRY ON THE WORK FOR WHICH THE RIVER AND HARBOR APPROPRIATION INVOLVED WAS MADE.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF WAR, NOVEMBER 1, 1930:

THERE HAS BEEN RECEIVED YOUR LETTER OF OCTOBER 7, 1930, AS FOLLOWS:

THERE ARE ENCLOSED HEREWITH FOR CONSIDERATION PAPERS INVOLVING THE QUESTION OF REIMBURSING THE WAR DEPARTMENT FOR COST INCURRED IN FURNISHING LABOR AND MATERIAL AND CONSTRUCTING A BOARD WALK AT THE U.S. NAVAL RADIO COMPASS STATION, PORT EADS, LA., FOR AND AT THE REQUEST OF THE NAVY DEPARTMENT.

THE MATERIAL WAS FURNISHED BY THE U.S. ENGINEER OFFICE AT NEW ORLEANS, LA., AND THE LABOR PERFORMED BY REGULAR EMPLOYEES OF THAT OFFICE AT A TOTAL COST OF $804.45 AS SHOWN ON THE ACCOMPANYING VOUCHER. THIS DEPARTMENT IS OF THE OPINION THAT REIMBURSEMENT SHOULD BE MADE BY THE NAVY DEPARTMENT FOR THE TOTAL COST INCURRED IN THE CONSTRUCTION OF SAID WALK.

SECTION 3678, REVISED STATUTES, PROVIDES IN PART THAT "ALL SUMS APPROPRIATED FOR THE VARIOUS BRANCHES OF EXPENDITURE IN THE PUBLIC SERVICE SHALL BE APPLIED SOLELY TO THE OBJECTS FOR WHICH THEY ARE RESPECTIVELY MADE, AND FOR NO OTHERS.' IT IS THE VIEW OF THIS DEPARTMENT THAT THE INTENT OF THIS STATUTE IS THAT FUNDS APPROPRIATED BY CONGRESS FOR A PARTICULAR OBJECT SHOULD BE APPLIED TO THAT OBJECT, AND THAT AN APPROPRIATION IS PROPERLY CHARGEABLE WITH ALL EXPENSES NECESSARY TO ACCOMPLISH THE OBJECT OF THE APPROPRIATION. (DECISION, COMPTROLLER OF THE TREASURY (4-24) ). IF IT BE HELD PROPER TO DIVERT ANY PART OF AN APPROPRIATION BY PERFORMING WORK FOR ANOTHER SERVICE, WITHOUT REIMBURSEMENT FOR ACTUAL COST, IT LIKEWISE WOULD APPEAR PERMISSIBLE TO SO DIVERT THE ENTIRE APPROPRIATION, AND THUS NULLIFY THE INTENT OF CONGRESS IN MAKING THE APPROPRIATION.

IN THIS CONNECTION ATTENTION IS ALSO INVITED TO THE DECISION OF THE COMPTROLLER OF THE TREASURY DATED JUNE 22, 1916 (DEC 22-685), WHICH INCLUDES THE STATEMENT THAT "WHERE ONE BRANCH RENDERS A SERVICE FOR ANOTHER, THE ACTUAL COST OF SUCH SERVICE IS A PROPER CHARGE OF THE ONE RECEIVING THE BENEFIT.' IT APPEARS TO BE A REASONABLE CONCLUSION THAT THE EMPLOYEES' SALARIES IN THIS CASE ARE AS MUCH A PART OF THE ACTUAL COST OF THE SERVICE RENDERED AS EXPENSES FOR MATERIALS, INASMUCH AS THE DEPARTMENT FOR WHICH THE SERVICE WAS RENDERED RECEIVED FULL BENEFIT, AND THE SERVICES OF THE EMPLOYEES FOR THE PERIOD REQUIRED FOR THE CONSTRUCTION OF THE WALK ARE LOST TO THE ENGINEER DEPARTMENT WHERE THE EMPLOYEES ARE REGULARLY EMPLOYED.

IT IS UNDERSTOOD THAT ONE OF THE OBJECTS OF THE CHIEF COORDINATOR'S OFFICE IS TO PROMOTE COOPERATION BETWEEN DIFFERENT SERVICES OF THE GOVERNMENT WHICH WOULD RESULT IN ECONOMIES. IF IT SHOULD BE HELD THAT ONE SERVICE WHICH PERFORMS WORK FOR ANOTHER CAN NOT BE REIMBURSED FOR ACTUAL COST OF THE WORK, IT WILL DOUBTLESS DISCOURAGE COOPERATION BETWEEN DIFFERENT SERVICES WITH THE RESULT THAT COSTS IN GENERAL WILL BE INCREASED. IF THE PRINCIPLE STATED IN THE DECISION, 6 COMPTROLLER GENERAL 81, BE ADHERED TO, IT IS BELIEVED THAT A DISTINCTION SHOULD BE MADE BETWEEN THE APPROPRIATIONS MADE SPECIFICALLY FOR SALARIES AND THOSE FOR CONSTRUCTION AND MAINTENANCE UNDER WHICH COSTS ARE AN ESSENTIAL FEATURE.

YOUR DECISION IN THE MATTER IS RESPECTFULLY REQUESTED.

ATTACHED TO THE VOUCHER SUBMITTED FOR CONSIDERATION IS A STATEMENT IN THE NATURE OF AN INVOICE DATED DECEMBER 23, 1929, FROM THE WAR DEPARTMENT TO THE NAVY DEPARTMENT, IN WHICH THE ITEMS FOR WHICH REIMBURSEMENT IS CLAIMED ARE STATED AS FOLLOWS:

* * * * * * * * * * * * * * (TABLE OMITTED) * * * * * * * * * * * * * *

IT APPEARS THAT THE VOUCHER IN QUESTION WAS PRESENTED BY THE WAR DEPARTMENT TO THE PAYMASTER GENERAL OF THE NAVY FOR PAYMENT, BUT WAS RETURNED BY THE LATTER WITH THE STATEMENT THAT IN VIEW OF THE DECISION OF THIS OFFICE DATED FEBRUARY 26, 1930, A-30663, PAYMENT FOR THE LABOR CHARGES--- THE WORK HAVING BEEN PERFORMED BY REGULAR EMPLOYEES OF THE WAR DEPARTMENT--- WOULD NOT BE APPROVED BY THIS OFFICE. IT WAS SUGGESTED, ALSO, BY THE PAYMASTER GENERAL, THAT THERE BE PREPARED TWO SEPARATE INVOICES, ONE TO COVER MATERIAL AND THE OTHER THE LABOR CHARGES, SO THAT PAYMENT COULD BE MADE FOR THE MATERIAL DURING THE FISCAL YEAR 1930, LEAVING THE LABOR CHARGES TO BE SETTLED SEPARATELY. IT DOES NOT APPEAR THAT THE ACTION SUGGESTED WAS TAKEN, AS THE VOUCHER COVERING THE ENTIRE CLAIM AS ORIGINALLY PREPARED IS NOW SUBMITTED FOR CONSIDERATION OF THIS OFFICE.

THERE APPEARS TO BE NO QUESTION RAISED AS TO THE LEGALITY OF THE PROPOSED PAYMENT FOR THE MATERIAL, INCLUDING THE 10 PER CENT OVERHEAD CHARGES, THE ONLY QUESTION PRESENTED BEING AS TO PAYMENT FOR THE COST OF LABOR PERFORMED BY REGULAR EMPLOYEES OF THE WAR DEPARTMENT APPARENTLY ENGAGED IN RIVER AND HARBOR WORK.

BY A LONG LINE OF DECISIONS THE ACCOUNTING OFFICERS HAVE ADHERED TO THE RULE, THAT WHERE REGULAR EMPLOYEES OF ONE ESTABLISHMENT OF THE GOVERNMENT PERFORM WORK FOR ANOTHER, OR, STATED IN OTHER TERMS, WHERE ONE ESTABLISHMENT OF THE GOVERNMENT LENDS THE SERVICES OF AN EMPLOYEE TO ANOTHER, PAYMENT BY THE ESTABLISHMENT RECEIVING THE BENEFIT OF THE SERVICES IS AUTHORIZED ONLY TO THE EXTENT OF THE EXPENSE INCURRED BY THE EMPLOYEE DURING THE PERIOD OF TIME HE IS ENGAGED IN THE WORK OF THE BORROWING ESTABLISHMENT, THE SALARY OF SUCH EMPLOYEE REMAINING A CHARGE AGAINST THE APPROPRIATION OR FUND OF THE ESTABLISHMENT LENDING THE SERVICES. 5 COMP. GEN. 1036; 6 ID. 217; 7 ID. 709; 8 ID. 600; 9 ID. 52; 10 ID. 131. IN THE DECISION 6 COMP. GEN. 81, CITED IN YOUR LETTER, THE RULE, BASED ON THE SAME PRINCIPLE, WAS STATED IN SOMEWHAT DIFFERENT TERMS TO THE EFFECT THAT WHERE THE PERFORMANCE OF SERVICES BY ONE ESTABLISHMENT OF THE GOVERNMENT FOR ANOTHER DOES NOT INVOLVE THE INCURRING OF ANY EXTRA EXPENSE OR THE INCREASING OF THE REGULAR FORCE AND EQUIPMENT, THERE IS NO BASIS FOR CHARGING THE APPROPRIATION OF THE ESTABLISHMENT RECEIVING THE BENEFIT OF SUCH SERVICES.

IN THE DECISION OF FEBRUARY 26, 1930, A-30663, CITED AND RELIED UPON BY THE PAYMASTER GENERAL OF THE NAVY IN HIS REFUSAL TO PAY FOR THE LABOR INVOLVED IN THE PRESENT VOUCHER, THERE WAS INVOLVED THE QUESTION WHETHER THE NAVY DEPARTMENT COULD BE REIMBURSED FOR THE SALARY OF AN INSPECTOR WHILE ENGAGED IN INSPECTION WORK FOR THE WAR DEPARTMENT, AND THE HOLDING WAS TO THE EFFECT THAT REIMBURSEMENT WAS NOT AUTHORIZED, BASED UPON THE GENERAL RULE HEREINBEFORE STATED WITH RESPECT TO SUCH MATTERS. PRACTICALLY THE SAME QUESTION WAS INVOLVED IN THE DECISION 10 COMP. GEN. 131, HEREIN CITED, IN WHICH REIMBURSEMENT WAS SOUGHT FOR THE COMPENSATION PAID AN INSPECTOR OF THE WAR DEPARTMENT WHILE ENGAGED IN INSPECTION WORK FOR THE NAVY DEPARTMENT. EACH OF THE DECISIONS HEREINBEFORE CITED RESTS UPON THE PRINCIPLE THAT THE APPROPRIATION FOR THE DEPARTMENT OR ESTABLISHMENT UNDER WHICH THE EMPLOYEES WERE APPOINTED, OR THEIR SERVICES WERE OTHERWISE ENGAGED, IS THE APPROPRIATION PRIMARILY AND IN THE FIRST INSTANCE CHARGEABLE WITH THEIR SALARIES OR COMPENSATION, AND THAT REIMBURSEMENT TO SAID APPROPRIATION IS AUTHORIZED ONLY UPON A SHOWING THAT THE LOANING OF THE SERVICES TO OR THE DOING OF WORK FOR ANOTHER DEPARTMENT OR ESTABLISHMENT INCREASED THE BURDEN OF OR CAUSED ADDITIONAL EXPENDITURES UNDER THE APPROPRIATION FIRST CHARGEABLE. THESE PRINCIPLES ARE FUNDAMENTAL AND ARE FOR APPLICATION IN THE ABSENCE OF SPECIFIC STATUTORY PROVISION OTHERWISE. THEREFORE, THE QUESTION FOR DETERMINATION HERE IS AS TO THE SUFFICIENCY OF THE SHOWING AS TO INCREASED BURDEN OR ADDITIONAL EXPENDITURES.

THE APPROPRIATIONS FOR RIVER AND HARBOR WORKS UNDER WHICH PAYMENT FOR THE WORK HERE INVOLVED APPEARS TO HAVE BEEN MADE ARE MADE AVAILABLE UNTIL EXPENDED BY SECTION 7 OF THE ACT OF AUGUST 24, 1912, 37 STAT. 487, AND, IN GENERAL, PROVIDE FOR THE MAINTENANCE AND IMPROVEMENT OF EXISTING RIVER AND HARBOR WORKS. THESE APPROPRIATIONS COVER BOTH LABOR AND MATERIALS AND CONSTITUTE FUNDS FOR ALLOCATION BY THE WAR DEPARTMENT TO SUCH PROJECTS IN CONNECTION WITH THE MAINTENANCE AND IMPROVEMENT OF EXISTING RIVER AND HARBOR WORKS AS MAY BE FOUND NECESSARY AND PROPER. THERE ARISES NO SURPLUS UNDER SAID APPROPRIATIONS, NEW APPROPRIATIONS FOR THE SAME PURPOSE BEING MADE AS PREVIOUS APPROPRIATIONS THEREFOR BECOME EXHAUSTED. MANIFESTLY, THEREFORE, IF MATERIALS OR THE OPERATING, AS DISTINGUISHED FROM THE ADMINISTRATIVE, FORCE PURCHASED OR ENGAGED UNDER SUCH APPROPRIATIONS ARE USED FOR DOING WORK FOR OTHER DEPARTMENTS, THERE IS AN ADDITIONAL BURDEN IMPOSED UPON SUCH APPROPRIATIONS. IN THE PRESENT CASE, WHILE THE WAR DEPARTMENT MAY NOT ENGAGE ADDITIONAL EMPLOYEES TO PERFORM THE WORK FOR THE NAVY, AND MAY NOT THEREAFTER HAVE ENGAGED ADDITIONAL EMPLOYEES BECAUSE OF THE WORK PERFORMED FOR THE NAVY, THE WORK FOR WHICH THESE RIVER AND HARBOR APPROPRIATIONS ARE MADE IS OF SUCH A CONTINUING NATURE--- ADDITIONAL APPROPRIATIONS FOR THE SAME BEING MADE AS PREVIOUS APPROPRIATIONS THEREFOR BECOME EXHAUSTED--- THAT THE DIVERTING OF MATERIAL AND LABOR, WHICH OTHERWISE WOULD BE USED ON SAID WORK, TO A NAVY PROJECT, NECESSARILY IMPOSES AN ADDITIONAL BURDEN ON THE RIVER AND HARBOR APPROPRIATIONS BY CREATING A NEED FOR SUBSEQUENT APPROPRIATIONS SOONER OR IN GREATER AMOUNT THAN IF THE WORK FOR THE NAVY HAD NOT BEEN DONE. UNDER SUCH CIRCUMSTANCES, THERE WOULD APPEAR TO BE NO LEGAL OBJECTION TO REIMBURSING SUCH APPROPRIATIONS FOR THE INCREASED BURDEN IMPOSED UPON THEM ON THE BASIS OF THE ACTUAL COST OF THE LABOR AS WELL AS FOR THE COST OF THE MATERIAL USED ON THE JOB. IT IS TO BE UNDERSTOOD, OF COURSE, THAT NO REIMBURSEMENT IS AUTHORIZED FOR MATERIAL SO DIVERTED IF IT IS NO LONGER NEEDED FOR THE PURPOSE FOR WHICH OBTAINED; THAT IS TO SAY, IF THERE BE NO NECESSITY FOR REPLACING IT IN KIND IN ORDER TO CARRY ON THE WORK FOR WHICH THE RIVERS AND HARBORS APPROPRIATION WAS MADE.

WITH RESPECT TO THE PARTICULAR CHARGES HERE INVOLVED, IT IS NOTED THAT IN ADDITION TO THE ACTUAL COST OF THE LABOR AMOUNTING TO $383.49, THERE IS CHARGED ALSO $38.35 AS 10 PERCENT OVERHEAD. THERE APPEARS TO BE NO BASIS FOR THIS CHARGE. IT IS ASSUMED IT INCLUDES SUCH ADMINISTRATIVE COSTS AS TIME KEEPING, SUPERVISION, ETC., ON AN ESTIMATED BASIS. SUCH ITEMS, WHILE THEY PROPERLY MAY BE REGARDED AS FORMING A PART OF THE TOTAL COST OF A PROJECT, ARE NOT PROPERLY FOR CONSIDERATION IN AN ADJUSTMENT OF GOVERNMENT APPROPRIATIONS WHICH IS TO BE BASED NOT ON THE TOTAL COST OR VALUE OF THE WORK ACCOMPLISHED FOR THE RECEIVING DEPARTMENT OR ESTABLISHMENT, THAT IS TO SAY, NOT ON THE SAVING TO ITS APPROPRIATIONS BUT ON THE INCREASED COST OR BURDEN TO THE APPROPRIATIONS OF THE PERFORMING DEPARTMENT OR ESTABLISHMENT.

WITH RESPECT TO THE 10 PERCENT "OVERHEAD" CHARGED ON THE MATERIAL IT IS AUTHORIZED ONLY IN THE EVENT THE ITEMIZED STATEMENT OF THE CLAIM, SUPRA, SHOWS THE INVOICE PRICES OF THE ITEMS LISTED AND THAT THE 10 PERCENT OVERHEAD IS TO COVER TRANSPORTATION, HANDLING CHARGES, ETC. OF THE MATERIAL NECESSARY TO MAKE IT AVAILABLE FOR USE IN THE PROJECT OR JOB FOR WHICH NEEDED.

THE PUBLIC VOUCHER AND RELATED PAPERS FORWARDED WITH YOUR SUBMISSION ARE RETURNED FOR THE ELIMINATION OF THE ITEM OF $38.35 OVERHEAD CHARGE ON THE LABOR COSTS AND FOR A FURTHER SHOWING WITH RESPECT TO THE "OVERHEAD" CHARGE ON THE MATERIAL, AND AS TO WHETHER IT WAS OR WILL BE NECESSARY TO REPLACE THE MATERIAL IN KIND.