A-62483, SEPTEMBER 12, 1935, 15 COMP. GEN. 198

A-62483: Sep 12, 1935

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NO OBJECTION WILL BE MADE TO EFFECTING THE CASH GRANT. WHEN THE AMOUNT THEREOF IS FINALLY ASCERTAINABLE. MATURED COUPONS WHICH HAVE BEEN PREVIOUSLY COLLECTED AND DEPOSITED AS MISCELLANEOUS RECEIPTS ARE NOT AVAILABLE FOR APPLICATION UPON THE CASH GRANT. YOU WILL FIND GRANT VOUCHER FORM P.W.C.A. 21 COVERING CANCELLATION OF $41. YOU WILL NOTE THAT $41. 000 OF BONDS ARE CANCELLED WHICH WERE PURCHASED UNDER THE ORIGINAL APPROPRIATION 03/5646 AND $820 OF COUPONS ARE CANCELLED WHICH MATURED ON NOVEMBER 1. THE PROCEEDS OF WHICH WOULD HAVE BEEN CREDITED TO THE MISCELLANEOUS RECEIPTS ACCOUNT OF THE TREASURY IF THIS CANCELLATION HAD NOT BEEN EFFECTED. THIS VOUCHER IS SUBMITTED TO YOU FOR PRE-AUDIT TO DETERMINE PARTICULARLY WHETHER COUPONS MAY BE CANCELLED FOR THE PURPOSE OF EFFECTING GRANT PAYMENTS WHERE OTHERWISE THE PROCEEDS WOULD HAVE BEEN CREDITED TO MISCELLANEOUS RECEIPTS ACCOUNT OF THE TREASURY.

A-62483, SEPTEMBER 12, 1935, 15 COMP. GEN. 198

PUBLIC WORKS PROJECTS - CASH GRANTS BY CANCELLATION OF MUNICIPAL BONDS AND COUPONS WHERE UNDER THE PROVISIONS OF SECTION 203 (A) OF THE ACT OF JUNE 16, 1933, 48 STAT. 202, THE UNITED STATES HAS LOANED FUNDS TO A MUNICIPALITY FOR A PUBLIC-WORK PROJECT, TAKING AS SECURITY BONDS TO THE FULL AMOUNT OF THE LOAN, AND HAS AGREED TO MAKE A CASH GRANT FOR NOT EXCEEDING 30 PERCENT OF THE COST OF LABOR AND MATERIALS FOR THAT PROJECT, NO OBJECTION WILL BE MADE TO EFFECTING THE CASH GRANT, WHEN THE AMOUNT THEREOF IS FINALLY ASCERTAINABLE, BY CANCELLING BONDS AND MATURED INTEREST COUPONS IN AN AMOUNT EQUAL TO THE CASH GRANT, THERE BEING NO REQUIREMENT UNDER SUCH CIRCUMSTANCES THAT THE FACE VALUE OF BONDS AND/OR INTEREST COUPONS BE DEPOSITED AS MISCELLANEOUS RECEIPTS. MATURED COUPONS WHICH HAVE BEEN PREVIOUSLY COLLECTED AND DEPOSITED AS MISCELLANEOUS RECEIPTS ARE NOT AVAILABLE FOR APPLICATION UPON THE CASH GRANT.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR, FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS, SEPTEMBER 12, 1935:

THERE HAS BEEN RECEIVED YOUR LETTER OF MAY 27, 1935, AS FOLLOWS:

SUBMITTED HEREWITH FOR PRE-AUDIT, YOU WILL FIND GRANT VOUCHER FORM P.W.C.A. 21 COVERING CANCELLATION OF $41,000 OF BONDS AND $820 OF COUPONS FOR THE CITY OF MIAMI, FLA., AS AUTHORIZED BY CONTRACT P.W. 82.6.

YOU WILL NOTE THAT $41,000 OF BONDS ARE CANCELLED WHICH WERE PURCHASED UNDER THE ORIGINAL APPROPRIATION 03/5646 AND $820 OF COUPONS ARE CANCELLED WHICH MATURED ON NOVEMBER 1, 1934, THE PROCEEDS OF WHICH WOULD HAVE BEEN CREDITED TO THE MISCELLANEOUS RECEIPTS ACCOUNT OF THE TREASURY IF THIS CANCELLATION HAD NOT BEEN EFFECTED.

THIS VOUCHER IS SUBMITTED TO YOU FOR PRE-AUDIT TO DETERMINE PARTICULARLY WHETHER COUPONS MAY BE CANCELLED FOR THE PURPOSE OF EFFECTING GRANT PAYMENTS WHERE OTHERWISE THE PROCEEDS WOULD HAVE BEEN CREDITED TO MISCELLANEOUS RECEIPTS ACCOUNT OF THE TREASURY.

YOUR IMMEDIATE ATTENTION TO THIS QUESTION WOULD BE GREATLY APPRECIATED.

SECTION 203 (A) OF THE ACT OF JUNE 16, 1933, 48 STAT. 202 PROVIDES:

WITH A VIEW TO INCREASING EMPLOYMENT QUICKLY (WHILE REASONABLY SECURING ANY LOANS MADE BY THE UNITED STATES) THE PRESIDENT IS AUTHORIZED AND EMPOWERED, THROUGH THE ADMINISTRATOR OR THROUGH SUCH OTHER AGENCIES AS HE MAY DESIGNATE OR CREATE, (1) TO CONSTRUCT, FINANCE, OR AID IN THE CONSTRUCTION OR FINANCING OF ANY PUBLIC-WORKS PROJECT INCLUDED IN THE PROGRAM PREPARED PURSUANT TO SECTION 202; (2) UPON SUCH TERMS AS THE PRESIDENT SHALL PRESCRIBE, TO MAKE GRANTS TO STATES, MUNICIPALITIES, OR OTHER PUBLIC BODIES FOR THE CONSTRUCTION, REPAIR, OR IMPROVEMENT OF ANY SUCH PROJECT, BUT NO SUCH GRANT SHALL BE IN EXCESS OF 30 PERCENTUM OF THE COST OF THE LABOR AND MATERIALS EMPLOYED UPON SUCH PROJECT; (3) TO ACQUIRE BY PURCHASE, OR BY EXERCISE OF THE POWER OF EMINENT DOMAIN, ANY REAL OR PERSONAL PROPERTY IN CONNECTION WITH THE CONSTRUCTION OF ANY SUCH PROJECT, AND TO SELL ANY SECURITY ACQUIRED OR ANY PROPERTY SO CONSTRUCTED OR ACQUIRED OR TO LEASE ANY SUCH PROPERTY WITH OR WITHOUT THE PRIVILEGE OF PURCHASE: PROVIDED, THAT ALL MONEYS RECEIVED FROM ANY SUCH SALE OR LEASE OR THE REPAYMENT OF ANY LOAN SHALL BE USED TO RETIRE OBLIGATIONS ISSUED PURSUANT TO SECTION 209 (210) OF THIS ACT, IN ADDITION TO ANY OTHER MONEYS REQUIRED TO BE USED FOR SUCH PURPOSE; * * *

AS THE CASH GRANTS MADE UNDER THE FOREGOING STATUTE MAY NOT EXCEED 30 PERCENT OF THE COST OF LABOR AND MATERIAL IT FOLLOWS THAT THE MAXIMUM AMOUNT OF THE GRANT CANNOT BE DETERMINED WITH EXACTITUDE IN ADVANCE AND IT APPEARS FOR THIS REASON THAT THE AGREEMENTS PROVIDED FOR AN INITIAL INVESTMENT BY THE GOVERNMENT IN BONDS OF THE BORROWER AND FOR THE REDUCTION OF THE INDEBTEDNESS BY CANCELLATION OF THE BONDS AND ACCRUED INTEREST THEREON IN THE AMOUNT OF THE CASH GRANT WHEN FINALLY ASCERTAINED.

THIS REDUCTION, ACCOMPLISHED BY CANCELLATION OF THE BONDS AND INTEREST COUPONS, IS NOT CONSIDERED AS A REPAYMENT OF THE BONDS OR A COLLECTION OF THE INTEREST WITHIN THE PURVIEW OF SECTIONS 203 AND 210 OF THE NATIONAL INDUSTRIAL RECOVERY ACT, BUT AS FIXING FINALLY THE NET INDEBTEDNESS OF THE BORROWER TO THE FEDERAL GOVERNMENT OR TO THE HOLDERS OF THE OUTSTANDING UNCANCELLED BONDS.

THE AMOUNT OF THE INTEREST COUPONS APPENDED TO THE CANCELLED BONDS AND MATURED PRIOR TO THE CANCELLATION MAY UPON CANCELLATION BE APPLIED IN PART PAYMENT OF THE CASH GRANT THE SAME AS THE CANCELLED BONDS. WHERE COUPONS UPON BONDS TO BE CANCELLED HAVE MATURED AND WERE CASHED AND CREDITED TO MISCELLANEOUS RECEIPTS, THE PROCEEDS MAY NOT NOW BE WITHDRAWN AND CONSEQUENTLY THE AMOUNT OF SUCH COUPONS MAY NOT BE APPLIED TO THE CASH GRANT.

THE FOREGOING IS CONFINED TO THE QUESTION PRESENTED IN YOUR SUBMISSION AND IS NOT TO BE UNDERSTOOD AS PASSING UPON THE SUFFICIENCY OF THE EVIDENCE SUBMITTED, WHICH CONSISTS ONLY OF A CERTIFICATE BY THE CITY ENGINEER, WITHOUT ANY DETAIL, OF THE COST OF LABOR AND MATERIALS EXPENDED BY THE CITY UP TO THAT TIME. THE SUFFICIENCY OF THE EVIDENCE WILL BE FOR CONSIDERATION WHEN THE TRANSACTION IS AUDITED BY THIS OFFICE IN THE REGULAR COURSE OF BUSINESS.