A-36301, A-49152, MAY 3, 1934, 13 COMP. GEN. 311

A-36301,A-49152: May 3, 1934

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IN SUCH CIRCUMSTANCES THE AMOUNT FOR WHICH CREDIT IS DISALLOWED SHOULD BE DEPOSITED BY THE DISBURSING OFFICER TO THE CREDIT OF HIS OFFICIAL ACCOUNT. THE RESPONSIBILITY BEING UPON THE DISBURSING OFFICER TO ESTABLISH THE LAWFULNESS OF THE PAYMENT AS MADE AND NOT UPON THE ACCOUNTING OFFICERS TO ESTABLISH THAT SUCH PAYMENT WAS IMPROPER. THE ELEMENTS NECESSARY TO SUPPORT THE PAYMENTS AS MADE MUST BE ASSUMED TO HAVE BEEN CAREFULLY WORKED OUT IN THE ADMINISTRATIVE EXAMINATION OF SUCH BILLS. WERE FOUND. STATED: * * * IT IS BELIEVED THAT THIS METHOD WILL ACCOMPLISH THE PURPOSE SOUGHT IN COMMUNICATION OF APRIL 10. ACCORDINGLY INSTRUCTIONS HAVE BEEN ISSUED THAT PAYMENTS OF TRANSPORTATION ACCOUNTS WILL BE SUPPORTED WITH ALL THE MATTER ASSEMBLED THROUGH ADMINISTRATIVE CORRESPONDENCE AS SHOWING THE CORRECTNESS OF THE AMOUNTS PAID IN CONNECTION WITH EACH PARTICULAR ACCOUNT.

A-36301, A-49152, MAY 3, 1934, 13 COMP. GEN. 311

ACCOUNTS - SUPPORTING DATA - DISBURSING OFFICER'S RESPONSIBILITY WHERE A DISBURSING OFFICER, RELYING APPARENTLY UPON DATA NOT SUBMITTED WITH HIS PAID VOUCHERS, MAKES A DISBURSEMENT FOR TRANSPORTATION TO A CARRIER IN EXCESS OF THE AMOUNT PROPERLY ALLOWABLE AS DETERMINED IN THE AUDIT ON THE BASIS OF AVAILABLE EVIDENCE, AND DECLINES TO FURNISH SUCH DATA IN RESPONSE TO A SUSPENSION OF CREDIT FOR THE PAYMENT AS MADE, CREDIT FOR THE OVERPAYMENT MUST BE DISALLOWED. IN SUCH CIRCUMSTANCES THE AMOUNT FOR WHICH CREDIT IS DISALLOWED SHOULD BE DEPOSITED BY THE DISBURSING OFFICER TO THE CREDIT OF HIS OFFICIAL ACCOUNT, THE RESPONSIBILITY BEING UPON THE DISBURSING OFFICER TO ESTABLISH THE LAWFULNESS OF THE PAYMENT AS MADE AND NOT UPON THE ACCOUNTING OFFICERS TO ESTABLISH THAT SUCH PAYMENT WAS IMPROPER.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF WAR, MAY 3, 1934:

IN RESPONSE TO A LETTER DATED APRIL 10, 1931, FROM THE SECRETARY OF WAR REQUESTING THAT, IN THE AUDIT AND SETTLEMENT OF THE ACCOUNTS OF THE FINANCE OFFICER, UNITED STATES ARMY, WASHINGTON, D.C., THE AUDIT STATEMENTS OF EXCEPTIONS TO DISBURSEMENTS FOR TRANSPORTATION SHOW MORE IN DETAIL THE REASONS THEREFOR, IN VIEW OF THE FACT THAT THE WAR DEPARTMENT HAD DECLINED TO SUBMIT TRANSPORTATION ITEMS TO THIS OFFICE FOR AUDIT BEFORE PAYMENT BUT INSISTED UPON PAYING SUCH ITEMS BY ITS DISBURSING OFFICERS AND MAINTAINING AT CONSIDERABLE PUBLIC EXPENSE A FORCE OF TECHNICAL EMPLOYEES TO ADMINISTRATIVELY EXAMINE ALL SUCH ITEMS WITH A VIEW TO AVOIDING IMPROPER PAYMENTS, THIS OFFICE BY LETTER OF JULY 31, 1931, INDICATED THE NECESSITY FOR REQUIRING DISBURSING OFFICERS TO JUSTIFY THEIR USES OF PUBLIC MONEYS INTRUSTED TO THEM AND, EXPRESSING THE ASSUMPTION THAT, SINCE THE WAR DEPARTMENT REQUIRES PAYMENT OF TRANSPORTATION BILLS BY ITS DISBURSING OFFICERS, AND MAINTAINS SUCH FORCE OF TECHNICAL EMPLOYEES, LIBRARY, ETC., IN CONNECTION THEREWITH, THE ELEMENTS NECESSARY TO SUPPORT THE PAYMENTS AS MADE MUST BE ASSUMED TO HAVE BEEN CAREFULLY WORKED OUT IN THE ADMINISTRATIVE EXAMINATION OF SUCH BILLS, BUT STATED THAT IF THE PAYING OFFICER WOULD, IN ALL INSTANCES, TRANSMIT TO THIS OFFICE IN SUPPORT OF THE VOUCHERS PAID THE MATERIAL SO ASSEMBLED BY THE ADMINISTRATIVE OFFICE AS SHOWING THE CORRECTNESS OF THE AMOUNT RECOMMENDED TO BE PAID, THIS OFFICE WOULD POINT OUT IN DETAIL IN THE STATEMENTS OF EXCEPTIONS THE INSTANCES IN WHICH ERRORS IN RATES, CLASSIFICATION, ETC., WERE FOUND. REPLY TO THIS SUGGESTION THE SECRETARY OF WAR BY LETTER DATED NOVEMBER 4, 1931, STATED:

* * * IT IS BELIEVED THAT THIS METHOD WILL ACCOMPLISH THE PURPOSE SOUGHT IN COMMUNICATION OF APRIL 10, 1931, AND ACCORDINGLY INSTRUCTIONS HAVE BEEN ISSUED THAT PAYMENTS OF TRANSPORTATION ACCOUNTS WILL BE SUPPORTED WITH ALL THE MATTER ASSEMBLED THROUGH ADMINISTRATIVE CORRESPONDENCE AS SHOWING THE CORRECTNESS OF THE AMOUNTS PAID IN CONNECTION WITH EACH PARTICULAR ACCOUNT. THESE INSTRUCTIONS CONTEMPLATE THAT ALL ESSENTIAL INFORMATION DEEMED USEFUL TO THE GENERAL ACCOUNTING OFFICE IN THE SETTLEMENT OF ACCOUNTS WILL BE FILED WITH SUCH ACCOUNTS WHEN TRANSMITTED TO THE GENERAL ACCOUNTING OFFICE. THIS INFORMATION WILL INCLUDE A COPY OF THE FORMULA IN THOSE CASES WHERE THE FINANCE OFFICER CONSIDERS THAT IT MAY BE OF ASSISTANCE IN THE AUDIT OF AN ACCOUNT.

THE CHIEF OF FINANCE, IN A LETTER DATED MAY 4, 1933, TO THE AUDIT DIVISION OF THIS OFFICE, MADE REFERENCE TO THE LETTER OF JULY 31, 1931, SUPRA, AND STATED THAT INVESTIGATION INDICATED THAT "IN SOME CASES, AT LEAST, THE INFORMATION BEING FURNISHED ON NOTICES OF EXCEPTIONS IS NOT WHAT THIS OFFICE WAS JUSTIFIED IN EXPECTING FROM THE LETTER OF JULY 31, 1931.' IN THAT CONNECTION THE CHIEF OF FINANCE INVITED ATTENTION TO 22 VOUCHERS AS ILLUSTRATIVE OF THE SITUATION COMPLAINED OF. THE CITED VOUCHERS WERE EXAMINED AND WHILE IT WAS FOUND THAT THE SUSPENSIONS WERE NOT IN ALL INSTANCES WHOLLY JUSTIFIED IT APPEARED THAT THE GENERAL SITUATION OF WHICH THE CHIEF OF FINANCE COMPLAINED WAS THE SUBJECT OF INSTRUCTIONS ISSUED MAY 29, 1933, IN CONNECTION WITH ANOTHER TRANSPORTATION MATTER, FOR FURNISHING TO ACCOUNTABLE OFFICERS ON NOTICES OF EXCEPTIONS IN THE FIRST INSTANCE AND WITHOUT FIRST CALLING FOR FURTHER SHOWING AS TO ADMINISTRATIVE RATE MATERIAL, INFORMATION AS TO THE PARTICULAR ERROR RESULTING IN THE OVERPAYMENT WHERE THE CARRIER'S BILL OR THE RECORD IN CONNECTION THEREWITH DISCLOSES FULLY THE CARRIER'S RATING DETAIL, THUS ENABLING A SPECIFIC DETERMINATION AS TO THE REASON FOR THE ERROR CAUSING THE OVERPAYMENT, AND THE DISBURSING OFFICER MAKING PAYMENT THEREON SUBMITTED NO RATE MATERIAL OF HIS OWN. WHILE THIS WAS A RELAXING FROM WHAT COULD REASONABLY BE REQUIRED FOR AUDIT PURPOSES WHERE SO MUCH RESPONSIBILITY FOR CORRECTNESS IN THESE INVOLVED MATTERS WAS ADMINISTRATIVELY ASSUMED-- INSISTED UPON IN FACT AND THERE WAS MAINTAINED AT PUBLIC EXPENSE FACILITIES FOR AFFORDING PAYING OFFICERS PROTECTION--- IT WAS CONSIDERED JUSTIFIED IN CASES WHERE THE CARRIER HAD SUPPLIED ALL DETAIL ESSENTIAL TO ACTION HERE, AND, IT SEEMED, WOULD OPERATE TO RELIEVE THE CONDITION COMPLAINED OF BY THE CHIEF OF FINANCE.

THERE IS NOW BEFORE THIS OFFICE FOR CONSIDERATION IN CONNECTION WITH THE AUDIT OF THE ACCOUNTS OF MAJ. W. O. RAWLS, FINANCE DEPARTMENT, VOUCHER 12299, OF HIS ACCOUNT FOR JUNE 1933, PAYING BILL NO. WQ-95424 OF THE ILLINOIS CENTRAL RAILROAD CO. FOR TRANSPORTATION PER BILL OF LADING WQ- 532661, MAY 1, 1933, FROM BROOKLYN, N.Y., TO ST. LOUIS, MO., OF VARIOUS ARTICLES WITH A TOTAL WEIGHT OF 303,502 POUNDS. THE PAYMENT IS IN THE SUM OF $2,866.52 AS CLAIMED BY THE CARRIER, LESS $14.84, DEDUCTED FOR LOSS AND DAMAGE TO CERTAIN ARTICLES INCLUDED IN THE SHIPMENT. THE DESCRIPTIONS OF THE ARTICLES, AS NOTED ON THE BILL OF LADING AND 10 EXTRA SHEETS ATTACHED THERETO, COMPRISE MORE THAN 175 SEPARATE ENTRIES, OR ITEMS, WITH A SEPARATE WEIGHT FOR EACH ITEM. THE BILL AS PREPARED, PRESUMABLY BY THE CARRIER, SHOWED COMPUTATION OF CHARGES AS FOLLOWS:

TABLE BILL OF LADING FROM BROOKLYN, N.Y., TO CLASS WEIGHT OR RATE NUMBER ST. LOUIS, MO. MEASUREMENT GROSS DATE, 1933 NO. WQ: 4/21-532661 ---------- --------------------- 1 1/2 10,958 2.33

1 1/4 230 1.94

1 76,340 1.55

2 ( 8,480 1.32

( 11,000 1.32

3 25,325 1.09

4 91,214 .78

5 79,955 .54

303,502 --------

TO SAVH--- 8 CENTS 20 PERCENT

NET --------------------------- (

TO BHAM--- 8 CENTS

32 PERCENT---06.977 PERCENT IR ---) 283,487 .02

TO BYD 8 CENTS 48 PERCENT

PLUS 8 CENTS--- 14.776 PERCENT- (

FOLLOWING THE ABOVE, THE TOTAL CHARGES ARE SHOWN AS $2,866.52.

THERE IS NOTHING ON THE BILL TO INDICATE WHICH OF THE ARTICLES DESCRIBED IN THE BILL OF LADING WERE CONSIDERED AS COMPRISING A TOTAL WEIGHT OF 10,958 POUNDS FOR WHICH CHARGES WERE CLAIMED AND PAID AS ON THE BASIS OF A RATING OF ONE AND ONE-HALF TIMES FIRST-CLASS, NOR IS SUCH INFORMATION SHOWN WITH RESPECT TO ANY OF THE OTHER WEIGHTS NOTED ON THE BILL FOR WHICH THE RESPECTIVE RATINGS INDICATED WERE USED. LIKEWISE, THERE IS NOTHING WITH THE VOUCHER TO SHOW HOW THE DIFFERENT ARTICLES DESCRIBED ON THE BILLS OF LADING WERE CLASSIFIED FOR PURPOSE OF DETERMINING THE CHARGES AS PAID. AS THIS INFORMATION WAS ESSENTIAL TO A CORRECT DETERMINATION OF THE APPLICABLE CHARGES BY THE DISBURSING OFFICER, IT WAS ASSUMED THAT IN THE ADMINISTRATIVE EXAMINATION OF THE BILL THE DETAILS OF THE CLASSIFICATION RATINGS HAD BEEN CAREFULLY WORKED OUT, AND ACCORDINGLY THE DISBURSING OFFICER WAS INFORMED PER NOTICE OF EXCEPTION OF NOVEMBER 9, 1933, THAT CREDIT WITH RESPECT TO THIS VOUCHER WAS SUSPENDED FOR THE REASON "LIST OF ARTICLES MAKING UP THE VARIOUS WEIGHTS ON WHICH PAYMENT WAS MADE, REQUIRED.'

TO THIS NOTICE OF EXCEPTION, THE FINANCE OFFICER, REPLIED DECEMBER 27, 1933:

1. IN CONNECTION WITH YOUR SUSPENSION OF THE ENTIRE CHARGES PAID UNDER VOUCHER REFERRED TO ABOVE, YOU ARE ADVISED THAT AS THE WORK SHEET SHOWING THE INFORMATION SOUGHT BY YOU IS NOT IN THE FILES OF THIS OFFICE, IT MUST BE ASSUMED THAT IT WAS FORWARDED WITH THE VOUCHER TO YOUR OFFICE IN ACCORDANCE WITH THE PREVAILING PRACTICE. AN EFFORT HAS BEEN MADE TO OBTAIN FROM THE CARRIER THE WORK SHEET USED BY IT BUT IT DEVELOPS THAT THAT DOCUMENT HAS ALSO BEEN MISLAID AND CANNOT BE LOCATED.

2. AS THE WORK SHEET CANNOT BE CONSIDERED AS ESSENTIAL TO AN INDEPENDENT AUDIT IN YOUR OFFICE, IT IS REQUESTED THAT IF IT IS HELD THAT AN OVERPAYMENT HAS BEEN MADE THE SUSPENSION BE AMENDED TO SHOW THE AMOUNT OF THE OVERPAYMENT, TOGETHER WITH FULL DETAILS SHOWING HOW THE AMOUNT WAS COMPUTED; OTHERWISE, THE SUSPENSION SHOULD BE REMOVED AND THIS OFFICE ADVISED ACCORDINGLY.

THE IMPRESSION THUS APPEARS TO BE THAT A DISBURSING OFFICER HAVING MADE PAYMENT, THE BURDEN IS UPON THE ACCOUNTING OFFICERS TO SHOW THAT THE PAYMENT SO MADE WAS IMPROPER. IN THE LETTER OF JULY 31, 1931, FROM THIS OFFICE TO THE SECRETARY OF WAR, REPLYING TO HIS REQUEST THAT NOTICES OF EXCEPTIONS SHOW IN DETAIL THE REASONS FOR SUSPENSIONS, IT WAS SAID:

WHILE IT WAS PROBABLY NOT SO INTENDED, THE REQUEST SEEMS TO ASSUME THAT THE BURDEN IS ON THIS OFFICE OF SHOWING THAT THE PAYMENT IS IMPROPER RATHER THAN ON THE ACCOUNTABLE OFFICER TO SHOW THAT THE DISBURSEMENT IS IN ACCORD WITH THE LAW. IT IS FUNDAMENTAL, OF COURSE, THAT AN ACCOUNTABLE OFFICER IN SUBMITTING HIS ACCOUNTS TO THIS OFFICE MUST FULLY JUSTIFY HIS USES OF THE PUBLIC MONEYS INTRUSTED TO HIM; THAT IS, IT IS FOR HIM TO FULLY ESTABLISH THE CORRECTNESS AND LAWFULNESS OF EACH PAYMENT MADE BY HIM. IT IS NOT A PROPER COURSE FOR A DISBURSING OFFICER TO PAY PUBLIC MONEYS UNLESS HE HAS BEFORE HIM FACTS DISCLOSING, BEYOND ROOM FOR DOUBT, THAT THE PAYMENT ADMINISTRATIVELY RECOMMENDED IS CORRECT IN ALL RESPECTS AND AUTHORIZED BY LAW TO BE MADE FROM PUBLIC FUNDS.

THE STATEMENT OF THE FINANCE OFFICER TO THE EFFECT THAT THE ADMINISTRATIVE WORK SHEET IS NOT ESSENTIAL TO AN INDEPENDENT AUDIT IN THIS OFFICE IS CORRECT. HOWEVER, WITH RESPECT TO HIS REQUEST THAT "IF IT IS HELD THAT AN OVERPAYMENT HAS BEEN MADE THE SUSPENSION BE AMENDED TO SHOW THE AMOUNT OF THE OVERPAYMENT, TOGETHER WITH FULL DETAILS SHOWING HOW THE AMOUNT WAS COMPUTED," IT IS DESIRED TO INVITE ATTENTION TO THE FACT THAT, WHILE AS STATED IN THE LETTER OF JULY 31, 1931, SUPRA, THIS OFFICE WILL GLADLY POINT OUT TO A DISBURSING OFFICER ON STATEMENT OF EXCEPTIONS AS A MATTER OF COOPERATION THE INSTANCES IN WHICH IT IS FOUND THERE IS ERROR IN DETERMINING THE PROPER RATE, CLASSIFICATION, ETC., AND WHY CREDIT MAY NOT BE ALLOWED AS CLAIMED, THE OFFER TO INCLUDE SUCH INFORMATION WAS EXPRESSLY CONDITIONED ON THE VOUCHERS, AS SUBMITTED TO THIS OFFICE, BEING SUPPORTED BY THE MATERIAL ASSEMBLED IN THE ADMINISTRATIVE EXAMINATION OF THE BILLS SHOWING IN DETAIL THE NECESSARY ELEMENTS RELIED UPON AS SUBSTANTIATING THE PAYMENTS MADE. THAT INFORMATION IS NOT DISCLOSED IN CONNECTION WITH THE PRESENT VOUCHER.

ACCORDING TO THE AUDIT OF THE BILL AS MADE BY THIS OFFICE, IN THE LIGHT OF THE INFORMATION AND DATA DISCLOSED ON THE BILL OF LADING AND THE BILL, THERE APPEARS TO HAVE BEEN A CONSIDERABLE OVERPAYMENT ON THE VOUCHER. HOWEVER, BEFORE REDUCING THE AUDIT TO A DEFINITE DISALLOWANCE IT WAS DESIRED THAT THE DISBURSING OFFICER MAKE AVAILABLE SUCH INFORMATION IN SUPPORT OF THE VOUCHER AS MAY HAVE BEEN RELIED UPON AS JUSTIFYING THE PAYMENT. EFFORTS TO ELICIT SUCH INFORMATION, HOWEVER, HAVE PRODUCED NOTHING MORE HELPFUL THAN THE LETTER OF DECEMBER 27, 1933, QUOTED, SUPRA. INASMUCH AS THE TRANSACTION IS WITHIN THE SCOPE OF THE MATTERS CONCERNING WHICH THE SECRETARY OF WAR ADDRESSED THIS OFFICE BY LETTER OF APRIL 10, 1931, TO WHICH THE LETTER OF JULY 31, 1931, WAS A REPLY, IT IS DEEMED PROPER TO BRING THE MATTER TO YOUR ATTENTION WITH THE SUGGESTION THAT THE INFORMATION REQUESTED IN THE NOTICE OF SUSPENSION IS SUCH AS SHOULD HAVE BEEN FURNISHED BY THE PAYING OFFICER IN THE FIRST INSTANCE IN SUPPORT OF THE PAID VOUCHER. THE POSITION OF THIS OFFICE MUST BE, THEREFORE, THAT TO COMPLY WITH THE REQUEST OF THE FINANCE OFFICER FOR A SHOWING IN DETAIL OF HOW THE AMOUNT FOR WHICH CREDIT IS PROPERLY ALLOWABLE IS COMPUTED, WOULD BE NOTHING LESS THAN AN APPLICATION OF THE ERRONEOUS THEORY WHICH SEEMS TO PERSIST THAT THE BURDEN IS ON THIS OFFICE OF SHOWING THAT A PAYMENT IS IMPROPER RATHER THAN ON THE ACCOUNTABLE OFFICER TO SHOW THAT HIS DISBURSEMENT IS IN ACCORD WITH THE LAW. SUCH A PRACTICE WOULD BE SUBVERSIVE OF THE PRIME PURPOSES OF A PROPER ACCOUNTING SYSTEM. IN THE ABSENCE OF THE INFORMATION REQUESTED IN THE NOTICE OF SUSPENSION, THEREFORE, THE NECESSARY COURSE WOULD APPEAR TO BE TO DISALLOW CREDIT FOR ALL IN EXCESS OF THE AMOUNT PROPERLY PAYABLE, LEAVING IT FOR THE ACCOUNTABLE OFFICER TO DEPOSIT THE AMOUNT DISALLOWED OR TO PRODUCE THE ESSENTIAL DATA TO SUPPORT A LARGER PAYMENT. IN VIEW, HOWEVER, OF THE PRIOR CORRESPONDENCE WITH THE SECRETARY OF WAR CONCERNING THE GENERAL SITUATION HERE INVOLVED, IT IS DESIRED TO AFFORD YOU AN OPPORTUNITY FOR SUCH ACTION AS YOU MAY CONSIDER APPROPRIATE IN THE PREMISES AND TO REQUEST YOUR ADVICES TO THIS OFFICE ACCORDINGLY BEFORE THE ALTERNATIVE COURSE SUGGESTED ABOVE IS APPLIED.