A-62051, JULY 1, 1935, 15 COMP. GEN. 1

A-62051: Jul 1, 1935

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IT HAVING BEEN DETERMINED IN THE MEANTIME THAT THE CORRECT HOG BASE WAS LESS THAN THAT AGAINST WHICH THE ORIGINAL CHECK WAS ISSUED. THE ISSUANCE OF A CHECK IN A GREATER AMOUNT THAN IS KNOWN TO BE DUE WOULD CLEARLY CONSTITUTE AN UNLAWFUL PAYMENT AND WOULD CONTRAVENE SOUND GOVERNMENT ACCOUNTING PRINCIPLES. IN RETURN FOR WHICH HE WAS TO RECEIVE CERTAIN PAYMENTS FROM THE SECRETARY OF AGRICULTURE. WAS EXECUTED WHEREIN IT WAS ESTIMATED. WHO HAVE BEEN APPOINTED TO REPRESENT THE HEIRS OF THE ESTATE. HAVE EXECUTED AN AGREEMENT CONTINUING THE CORN-HOG REDUCTION CONTRACT AND HAVE MADE APPLICATION FOR THE PROCEEDS OF THE ABOVE CHECK. ESTABLISHING THE CORRECT HOG BASE AT 28 HOGS WAS APPROVED. UNDER THE ESTABLISHED PROCEDURE IT APPEARS WHEN A HOG BASE ESTABLISHED BY THE RED RIDER IS FOUND BY THE COUNTY ALLOTMENT COMMITTEE TO BE EXCESSIVE A CORRECTION IS MADE THROUGH THE ISSUANCE OF THE GREEN RIDER ESTABLISHING THE CORRECT BASE (NUMBER).

A-62051, JULY 1, 1935, 15 COMP. GEN. 1

CORN-HOG CONTRACTS - INSTALLMENT PAYMENTS - REISSUANCE OF CANCELED CHECK TO ESTATE IN CORRECT AMOUNT A CHECK ISSUED FOR PAYMENT OF FIRST INSTALLMENT UNDER A CORN-HOG CONTRACT IN AMOUNT SHOWN BY THE RECORD AT THAT TIME TO BE CORRECT BUT SUBSEQUENTLY CANCELED BECAUSE OF THE DEATH OF THE PAYEE BEFORE ITS NEGOTIATION MAY REISSUE TO REPRESENTATIVES OF DECEASED PAYEE ONLY IN THE CORRECT AMOUNT, IT HAVING BEEN DETERMINED IN THE MEANTIME THAT THE CORRECT HOG BASE WAS LESS THAN THAT AGAINST WHICH THE ORIGINAL CHECK WAS ISSUED. THE ISSUANCE OF A CHECK IN A GREATER AMOUNT THAN IS KNOWN TO BE DUE WOULD CLEARLY CONSTITUTE AN UNLAWFUL PAYMENT AND WOULD CONTRAVENE SOUND GOVERNMENT ACCOUNTING PRINCIPLES.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF AGRICULTURE, JULY 1, 1935:

THERE HAS BEEN REFERRED HERE FOR CONSIDERATION A PROPOSED STATEMENT OF SETTLEMENT OF CLAIM IN FAVOR OF OLE TOLLEFSON AND OLAF TOLLEFSON, REPRESENTATIVES FOR THE HEIRS OF THE ESTATE OF KNUD TOLLEFSON, IN THE AMOUNT OF $111.65, REPRESENTING THE PROCEEDS OF CHECK NO. 4,498,234, NOW CANCELED, DRAWN TO THE ORDER OF KNUD TOLLEFSON, DECEASED.

FROM THE RECORD IT APPEARS THAT KNUD TOLLEFSON ENTERED INTO CORN-HOG REDUCTION CONTRACT NO. 41-061-338 WHEREBY HE AGREED TO REDUCE THE ACREAGE PLANTED TO FIELD CORN, REDUCE THE NUMBER OF HOGS FARROWED, AND REDUCE THE NUMBER OF HOGS PRODUCED FOR MARKET DURING 1934, ON THE FARM DESCRIBED IN THE CONTRACT, IN RETURN FOR WHICH HE WAS TO RECEIVE CERTAIN PAYMENTS FROM THE SECRETARY OF AGRICULTURE. IN ORDER TO SECURE AN EARLY PARTIAL PAYMENT UNDER THE CONTRACT A SO-CALLED "RED RIDER," FORM NO. C.H. 8C, WAS EXECUTED WHEREIN IT WAS ESTIMATED, AMONG OTHER THINGS, THAT 31 HOGS WOULD BE THE MAXIMUM NUMBER THAT MIGHT BE PRODUCED FOR MARKET UNDER THE CONTRACT, THE FIRST INSTALLMENT PAYMENT OF $2 A HEAD BEING MADE ON THAT BASIS, THERE BEING INCLUDED IN THE CHECK ABOVE MENTIONED $49.65 AS PAYMENT OF THE EARLY CORN INSTALLMENT AND $62 AS PAYMENT OF THE EARLY HOG INSTALLMENT. SUBSEQUENT TO THE ISSUANCE OF THE CHECK AND PRIOR TO ITS NEGOTIATION THE PAYEE DIED, THE CHECK BEING RETURNED TO THE AGRICULTURAL ADJUSTMENT ADMINISTRATION AND CANCELED.

IT NOW APPEARS THAT OLE AND OLAF TOLLEFSON, SONS OF THE DECEASED, WHO HAVE BEEN APPOINTED TO REPRESENT THE HEIRS OF THE ESTATE, HAVE EXECUTED AN AGREEMENT CONTINUING THE CORN-HOG REDUCTION CONTRACT AND HAVE MADE APPLICATION FOR THE PROCEEDS OF THE ABOVE CHECK.

AFTER THE ISSUANCE OF THE CHECK IN QUESTION AND IN ACCORDANCE WITH THE ESTABLISHED PROCEDURE GREEN RIDER, FORM NO. C.H.-8D, ESTABLISHING THE CORRECT HOG BASE AT 28 HOGS WAS APPROVED. UNDER THE ESTABLISHED PROCEDURE IT APPEARS WHEN A HOG BASE ESTABLISHED BY THE RED RIDER IS FOUND BY THE COUNTY ALLOTMENT COMMITTEE TO BE EXCESSIVE A CORRECTION IS MADE THROUGH THE ISSUANCE OF THE GREEN RIDER ESTABLISHING THE CORRECT BASE (NUMBER), AND AN ADJUSTMENT OF THE EXCESSIVE PAYMENT CONTAINED IN THE FIRST CHECK IS MADE IN THE SECOND INSTALLMENT PAYMENT. THIS PROCEDURE HAVING BEEN ESTABLISHED THE QUESTION IS PRESENTED IN CASES SUCH AS HERE, WHERE THE PAYEE OF THE ORIGINAL CHECK DIED PRIOR TO ITS NEGOTIATION, AND BEFORE REISSUANCE IT IS DETERMINED THAT THE HOG BASE IS EXCESSIVE AND THROUGH THE ISSUANCE OF THE GREEN RIDER THE CORRECT BASE HAS BEEN ESTABLISHED, WHETHER THE CHECK SHOULD BE REISSUED IN THE ORIGINAL AMOUNT TO THE REPRESENTATIVE OF THE DECEASED--- THE ESTABLISHED PROCEDURE OF MAKING ADJUSTMENT IN THE SECOND SETTLEMENT TO BE FOLLOWED--- OR WHETHER THE CHECK SHOULD BE REISSUED IN THE CORRECT AMOUNT BASED ON THE GREEN RIDER.

WITHOUT AT THIS TIME DETERMINING THE LEGALITY OF MAKING THE FIRST PAYMENT ON CORN-HOG CONTRACTS BEFORE THE CORRECT BASE HAS BEEN DETERMINED, THERE APPEARS NO AUTHORITY OR JUSTIFICATION AFTER HAVING DETERMINED THAT THE FIRST PAYMENT WAS EXCESSIVE FOR REISSUING THE CHECK IN THE EXCESSIVE AMOUNT, NOTWITHSTANDING IT MIGHT BE MORE EXPEDIENT TO FOLLOW THE ADMINISTRATIVE PROCEDURE ADOPTED FOR GENERAL APPLICATION. THE ISSUANCE OF A CHECK IN A GREATER AMOUNT THAN IS KNOWN TO BE DUE WOULD CLEARLY CONSTITUTE AN UNLAWFUL PAYMENT AND WOULD CONTRAVENE SOUND GOVERNMENT ACCOUNTING PRINCIPLES.

IN THE INSTANT CASE AS WELL AS IN OTHER SIMILAR CASES CHECK IN SETTLEMENT OF THE FIRST PAYMENT UNDER THE CONTRACT MAY REISSUE ONLY IN THE AMOUNT ACTUALLY DUE.