A-51628, MAY 25, 1936, 15 COMP. GEN. 1026

A-51628: May 25, 1936

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IT WAS SUGGESTED THAT WE REQUEST YOUR OPINION AND ASSISTANCE WITH REFERENCE TO A PROBLEM WITH WHICH WE HAVE HAD MUCH DIFFICULTY. EACH OF THE PROJECTS OF THE RESETTLEMENT ADMINISTRATION IS FINANCED BY AN ALLOTMENT MADE OUT OF A SPECIFIC SUM ALLOCATED BY THE PRESIDENT FOR SUCH PROJECT. THE MAJORITY OF THE EXPENDITURES WITH REFERENCE TO A SPECIFIC PROJECT ARE DIRECTLY CHARGEABLE TO IT. DIFFICULTIES HAVE ARISEN. WITH REFERENCE TO EXPENDITURES WHICH ARE NOT THUS READILY CHARGEABLE. IN NUMEROUS INSTANCES SERVICES FOR SEVERAL PROJECTS ARE RENDERED BY THE SAME EMPLOYEES DURING A SINGLE PAYROLL PERIOD. WHILE CHARGES FOR THESE SERVICES ARE ALLOCATED TO THE VARIOUS SPECIFIC PROJECTS. IS BY A SINGLE DISBURSEMENT.

A-51628, MAY 25, 1936, 15 COMP. GEN. 1026

RESETTLEMENT ADMINISTRATION - EMPLOYEES ENGAGED ON SEVERAL PROJECTS - FUNDS CHARGEABLE EMPLOYEES' SERVICES SO GENERAL OR DIVIDED BETWEEN VARIOUS RESETTLEMENT ADMINISTRATION PROJECTS AS TO MAKE THE CHARGING OF THE COST THEREOF TO A PARTICULAR PROJECT DIFFICULT OF ASCERTAINMENT SHOULD BE CHARGED TO FUNDS ALLOCATED FOR ADMINISTRATIVE EXPENSES, THE ESTABLISHMENT OF A REVOLVING FUND FOR CHARGING IN SUCH CASES BEING UNAUTHORIZED, BUT IF LATER FOUND MORE PROPERLY CHARGEABLE TO ONE OR MORE PROJECTS AN ADJUSTMENT MAY BE AUTHORIZED BY THE GENERAL ACCOUNTING OFFICE UPON A PROPER SHOWING OF FACTS.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR, RESETTLEMENT ADMINISTRATION, MAY 25, 1936:

CONSIDERATION HAS BEEN GIVEN YOUR LETTER OF MARCH 4, 1936, AS FOLLOWS:

AT A CONFERENCE RECENTLY HAD WITH REPRESENTATIVES OF YOUR OFFICE OF INVESTIGATION, IT WAS SUGGESTED THAT WE REQUEST YOUR OPINION AND ASSISTANCE WITH REFERENCE TO A PROBLEM WITH WHICH WE HAVE HAD MUCH DIFFICULTY.

EACH OF THE PROJECTS OF THE RESETTLEMENT ADMINISTRATION IS FINANCED BY AN ALLOTMENT MADE OUT OF A SPECIFIC SUM ALLOCATED BY THE PRESIDENT FOR SUCH PROJECT. THE MAJORITY OF THE EXPENDITURES WITH REFERENCE TO A SPECIFIC PROJECT ARE DIRECTLY CHARGEABLE TO IT, AND CAN READILY BE PAID DIRECTLY OUT OF THE SPECIFIC ALLOCATION CREATED FOR SUCH PROJECT. DIFFICULTIES HAVE ARISEN, HOWEVER, WITH REFERENCE TO EXPENDITURES WHICH ARE NOT THUS READILY CHARGEABLE.

IN NUMEROUS INSTANCES SERVICES FOR SEVERAL PROJECTS ARE RENDERED BY THE SAME EMPLOYEES DURING A SINGLE PAYROLL PERIOD. WHILE CHARGES FOR THESE SERVICES ARE ALLOCATED TO THE VARIOUS SPECIFIC PROJECTS, EITHER ON THE BASIS OF ACTUAL TIME RECORDS OR REASONABLY ACCURATE ESTIMATES, THE MOST PRACTICABLE AND EFFICIENT METHOD OF PAYING FOR SUCH SERVICES, ALTHOUGH RENDERED ON SEVERAL PROJECTS, IS BY A SINGLE DISBURSEMENT. OTHERWISE, IF WE WERE TO PAY FOR SUCH DISBURSEMENTS BY CHECKS MADE OUT ACCORDING TO THE ACTUAL TIME SPENT ON EACH PROJECT, THUS NECESSITATING THE PLACING OF AN EMPLOYEE ON SEVERAL PAYROLLS DURING ONE PAYROLL PERIOD, THE ACCOUNTING AND OTHER MECHANICAL DIFFICULTIES RESULTING THEREFROM WOULD CREATE SERIOUS OBSTACLES TO THE EFFICIENT OPERATION OF THIS ADMINISTRATION.

TO CONVEY SOME IDEA OF THE MANY SERVICES WHICH ARE INVOLVED, AND WHICH MAY BE UTILIZED ON SEVERAL PROJECTS DURING A SINGLE PAY-ROLL PERIOD, A STATEMENT OF THE NATURE OF SOME OF THESE SERVICES MAY BE OF ASSISTANCE. MANY OF THE EXPENDITURES FOR THE SERVICES UNDER DISCUSSION ARE DIRECTLY INCURRED IN THE PLANNING, DESIGNING, SUPERVISING, ADMINISTERING, AND DEVELOPING OF PROJECTS, WHICH SERVICES COME TO REST ON A SPECIFIC PROJECT LONG ENOUGH TO BE ALLOCATED TO SUCH PROJECT. UNDER YOUR RULINGS, SUCH SERVICES ARE ALLOCABLE TO PROJECT COSTS WHETHER THEY ARE PERFORMED ON THE PROJECT ITSELF OR AWAY FROM THE SITE OF THE PROJECT. PROJECT EXPENDITURES ON THE SITE OF THE PROJECT INCLUDE PRELIMINARY WORK AND INVESTIGATIONS; SERVICES DIRECTED TOWARDS LAND PURCHASE, IMPROVEMENT, AND DEVELOPMENT; AND SERVICES INVOLVED IN THE CONSTRUCTION, MAINTENANCE, AND OPERATION, AND ADMINISTRATION AND SUPERVISION OF PROJECTS.

OFF-SITE EXPENDITURES FOR SERVICES ARE CHARGEABLE TO THE COST OF A PARTICULAR PROJECT EITHER WHERE ACCURATE KNOWLEDGE IS HAD OR WHERE A REASONABLE ESTIMATE MAY BE MADE AS TO THE LENGTH OF TIME THE SPECIFIC SERVICES WERE INCURRED ON SPECIFIC PROJECTS, OR WHERE IT IS POSSIBLE TO APPORTION TO THE INDIVIDUAL PROJECTS ON A PERCENTAGE BASIS THE TOTAL AMOUNT OF TIME DURING WHICH A GROUP OF SERVICES WAS INCURRED ON A NUMBER OF PROJECTS OVER A PAY ROLL PERIOD. SERVICES EMBRACED IN SUCH OFF-SITE EXPENDITURES ARE THE SERVICES OF ARCHITECTS, DRAFTSMEN, ENGINEERS, APPRAISERS, OPTION TAKERS, ETC., WHETHER ENGAGED IN WASHINGTON OR IN THE FIELD.

IN AN ATTEMPT TO OBSERVE YOUR RULINGS ON THIS PROBLEM AND CHARGE EXPENDITURES PROPERLY ALLOCABLE TO SPECIFIC PROJECTS TO SUCH PROJECTS, WE HAVE BEEN OBSERVING A CERTAIN PROCEDURE. THIS WAS TO BE HANDLED IN THE FOLLOWING MANNER: IT WAS PROPOSED TO DESIGNATE ONE PROJECT WITHIN THE STATE WHEREIN A REGIONAL OFFICE OF THIS ADMINISTRATION WAS LOCATED, AND CONVENIENT TO SUCH OFFICE, AND IMMEDIATELY TO ALLOT UNDER THE ALLOCATION FOR SUCH PROJECT ENOUGH FUNDS TO ENABLE US TO CHARGE IN AND CLEAR OUT OFF- SITE EXPENDITURES FOR ALL OF THE PROJECTS WITHIN SUCH REGION. FACILITATE THIS PROCEDURE WITH RESPECT TO PAY ROLLS, IT WAS CONTEMPLATED ACCOMPANYING EACH PAY ROLL WITH A DISTRIBUTION SHEET SHOWING THE PROPER ALLOCATION OF THE PAY ROLL, TOGETHER WITH THE USE OF FORM 1080S FOR EACH PROJECT, THUS ULTIMATELY CHARGING EACH PROJECT WITH THOSE EXPENDITURES PROPERLY CHARGEABLE TO IT. IN AN ENDEAVOR TO REACH THIS RESULT, IT WAS BELIEVED NECESSARY TO FOLLOW SUCH PROCEDURE, AND WE KNOW OF NO OTHER PRACTICABLE METHOD OF PROPERLY HANDLING THOSE COSTS WHICH SHOULD BE CHARGED TO A PARTICULAR PROJECT.

AS INDICATED ABOVE, A CONFERENCE WAS HAD RECENTLY WITH REPRESENTATIVES OF THE OFFICE OF INVESTIGATION OF THE GENERAL ACCOUNTING OFFICE, IN AN ENDEAVOR TO SEEK SOME ALTERNATIVE PROCEDURE WHICH WOULD NOT ONLY BE WITHIN YOUR RULINGS ON SIMILAR PROBLEMS, BUT WHICH WOULD FURTHER BE PRACTICABLE. IT WAS SUGGESTED AT THAT TIME THAT WE REQUEST YOUR FORMAL OPINION AND ADVICE AS TO WHETHER WE MIGHT ESTABLISH FUNDS AS CLEARING ACCOUNTS AND APPLY THROUGH THE BUREAU OF THE BUDGET FOR PRESIDENTIAL REALLOCATION OF FUNDS IN ORDER TO ACCOMPLISH SUCH PURPOSE. WITH SUCH ACCOUNTS CREATED BY THE REALLOCATION OF FUNDS BY THE PRESIDENT, TO BE SET UP IN WASHINGTON AND THE FIELD OFFICES OF THE RESETTLEMENT ADMINISTRATION, SALARIES, TRAVEL EXPENSES, AND PROCUREMENTS APPLICABLE TO A PARTICULAR PROJECT MAY BE CHARGED INTO SUCH AN ACCOUNT, PROVIDED THE PROJECT IS FINANCED FROM THE ALLOCATION FOR WHICH THE SPECIFIED ACCOUNT IS ESTABLISHED. IF THE ESTABLISHMENT OF SUCH FUNDS MEETS WITH YOUR APPROVAL, WE CONTEMPLATE THE USE OF FORM 1080, OR SOME SIMILAR FORM WHICH YOU MAY SUGGEST, TO AID IN PROPERLY CLEARING OUT EXPENSES FROM THE ACCOUNTS SO SET UP AND CHARGING THEM TO THE SPECIFIC PROJECTS.

IT IS OUR BELIEF THAT SUCH CLEARING ACCOUNTS WILL BE A SOLUTION OF THE PROBLEMS INDICATED IN THIS LETTER. WE KNOW OF NO ALTERNATIVE WHICH WILL PERMIT US BOTH PROPERLY AND EXPEDIENTLY TO CHARGE TO SPECIFIC PROJECTS NOT ONLY THOSE EXPENDITURES DIRECTLY AND READILY CHARGEABLE TO SUCH PROJECTS, BUT ALSO THOSE EXPENDITURES SET FORTH HEREIN WHICH ARE NOT THUS READILY CHARGEABLE. WE REALIZE THAT UNLESS SUCH EXPENDITURES ARE PROPERLY CHARGED TO SPECIFIC PROJECTS, IT WILL BE IMPOSSIBLE ACCURATELY TO ASCERTAIN THE COST OF EACH PROJECT. YOUR OPINION IS THEREFORE REQUESTED NOT ONLY UPON THE PROCEDURE PROPOSED HEREIN, BUT AS TO ANY OTHER METHOD OF HANDLING THE SITUATION WHICH YOU MAY RECOMMEND.

WE HAVE THIS DAY WRITTEN TO THE ACTING DIRECTOR OF THE BUREAU OF THE BUDGET ASKING THAT HE REQUEST THE PRESIDENT TO MAKE CERTAIN REALLOCATIONS SPECIFIED IN OUR LETTER, FOR THE PURPOSES INDICATED HEREIN. THIS PROCEDURE IS, OF COURSE, SUBJECT TO YOUR APPROVAL. A COPY OF SUCH LETTER IS ATTACHED HERETO.

IN VIEW OF THE URGENT NEED FOR OBTAINING SOME PROCEDURE WHICH WILL ENABLE US PROPERLY TO APPROACH THIS PROBLEM, AND DUE TO THE FACT THAT THE PROBLEM IS OF PRESSING AND IMMEDIATE IMPORTANCE, YOUR EARLY ADVICE WOULD BE GREATLY APPRECIATED.

THERE APPEARS NOTHING IN THE EMERGENCY RELIEF APPROPRIATION ACT OF APRIL 8, 1935 (49 STAT. 115), WHICH CAN BE CONSTRUED AS AUTHORIZING AN ALLOCATION FOR A REVOLVING FUND SUCH AS HERE PROPOSED. ALLOCATIONS TO YOUR ADMINISTRATION HAVE BEEN MADE FOR ADMINISTRATIVE EXPENSES AND FOR VARIOUS CLASSES OF PROJECTS. IT WOULD SEEM THAT SERVICES WHICH ARE SO GENERAL OR SO DIVIDED BETWEEN VARIOUS PROJECTS AS TO MAKE IT DIFFICULT TO ASCERTAIN WHETHER OR TO WHAT EXTENT THE COST THEREOF IS PROPERLY CHARGEABLE DIRECTLY TO A PARTICULAR PROJECT OR PROJECTS SHOULD BE REGARDED AS INVOLVING ADMINISTRATION EXPENSES, RATHER THAN PROJECT EXPENSES. THAT IS TO SAY, ALL EXPENDITURES WHICH CANNOT READILY BE SHOWN TO RELATE TO A PARTICULAR PROJECT SHOULD BE MADE UNDER THE ADMINISTRATIVE EXPENSE ALLOTMENT. SEE, IN THIS CONNECTION A-66999, NOVEMBER 9, 1935. SHOULD IT LATER DEVELOP THAT CERTAIN EXPENSES SO PAID ARE MORE PROPERLY FOR CHARGING TO ONE OR MORE PROJECTS, AN ADJUSTMENT BETWEEN THE PROPER FUNDS MAY BE AUTHORIZED BY THIS OFFICE UPON A PROPER SHOWING OF THE FACTS. BUT, BE THAT AS IT MAY, THERE APPEARS TO BE NO LEGAL BASIS NOR NECESSITY FOR ESTABLISHING AN OFF SITE EXPENDITURE FUND.