A-68415, FEBRUARY 1, 1936, 15 COMP. GEN. 679

A-68415: Feb 1, 1936

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SHOULD NOT BE CANCELED BY THE DISBURSING OFFICER BUT ARE FOR TRANSMITTAL TO THE GENERAL ACCOUNTING OFFICE. THE TIME FOR THE COVERING INTO AN ACCOUNT DESIGNATED AS "OUTSTANDING LIABILITIES" OF ALL OUTSTANDING CHECKS PROPERLY DUE AND PAYABLE HAS BEEN MODIFIED SO THAT SUCH CHECKS ARE NOW COVERED INTO SUCH ACCOUNT AT THE END OF THE FISCAL YEAR FOLLOWING THAT IN WHICH ISSUED INSTEAD OF AFTER THE CHECKS HAVE BEEN OUTSTANDING MORE THAN THREE FISCAL YEARS AS WAS FORMERLY THE PRACTICE. AS A RESULT OF THE ABOVE CHANGE IN STATUTORY REQUIREMENTS THE APPROPRIATIONS AGAINST WHICH CHECKS ARE DRAWN NOW REMAIN AVAILABLE FOR DISBURSEMENT. FOR A PERIOD BEYOND THE TIME WHEN THE CHECKS CEASE TO BE PAYABLE AND THE AMOUNTS THEREOF ARE REQUIRED TO BE COVERED INTO "OUTSTANDING LIABILITIES.'.

A-68415, FEBRUARY 1, 1936, 15 COMP. GEN. 679

CHECKS - NONPRESENTATION FOR PAYMENT WITHIN PERMANENT APPROPRIATION REPEAL ACT LIMITATION - ACCOUNTING PROCEDURE GOVERNMENT CHECKS DRAWN DURING ONE FISCAL YEAR AND RETURNED TO THE DISBURSING OFFICER AFTER THE CLOSE OF THE FISCAL YEAR FOLLOWING THE YEAR OF ISSUANCE, WHETHER BECAUSE OF NOT REPRESENTING A VALID CLAIM AGAINST THE GOVERNMENT OR BECAUSE OF INDEBTEDNESS OF THE PAYEE, SHOULD NOT BE CANCELED BY THE DISBURSING OFFICER BUT ARE FOR TRANSMITTAL TO THE GENERAL ACCOUNTING OFFICE, THE ACCOUNTING PROCEDURE IN THIS REGARD NOT HAVING BEEN MODIFIED BY SECTION 21 OF THE PERMANENT APPROPRIATION REPEAL ACT OF JUNE 26, 1934, 48 STAT. 1235, REDUCING THE PERIOD OF NEGOTIABILITY OF SUCH CHECKS FROM THREE TO ONE FISCAL YEAR FOLLOWING THAT OF ISSUANCE.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF WAR, FEBRUARY 1, 1936:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF NOVEMBER 27, 1935, AS FOLLOWS:

PURSUANT TO SEC. 21 OF THE ACT OF JUNE 26, 1934 (48 STAT. 1235; U.S.C. 31: 725T; SEC. 1745, M.L. 1929), THE TIME FOR THE COVERING INTO AN ACCOUNT DESIGNATED AS "OUTSTANDING LIABILITIES" OF ALL OUTSTANDING CHECKS PROPERLY DUE AND PAYABLE HAS BEEN MODIFIED SO THAT SUCH CHECKS ARE NOW COVERED INTO SUCH ACCOUNT AT THE END OF THE FISCAL YEAR FOLLOWING THAT IN WHICH ISSUED INSTEAD OF AFTER THE CHECKS HAVE BEEN OUTSTANDING MORE THAN THREE FISCAL YEARS AS WAS FORMERLY THE PRACTICE.

AS A RESULT OF THE ABOVE CHANGE IN STATUTORY REQUIREMENTS THE APPROPRIATIONS AGAINST WHICH CHECKS ARE DRAWN NOW REMAIN AVAILABLE FOR DISBURSEMENT, SPEAKING GENERALLY, FOR A PERIOD BEYOND THE TIME WHEN THE CHECKS CEASE TO BE PAYABLE AND THE AMOUNTS THEREOF ARE REQUIRED TO BE COVERED INTO "OUTSTANDING LIABILITIES.' CERTAIN NEW ACCOUNTING PROBLEMS HAVE, ACCORDINGLY, ARISEN.

IN ORDER THAT THIS DEPARTMENT MAY HAVE A CLEAR UNDERSTANDING OF THE PROCEDURE BEING FOLLOWED BY YOUR OFFICE UNDER THE ABOVE CITED ACT, TO THE END THAT APPROPRIATE INSTRUCTIONS MAY BE ISSUED TO ARMY DISBURSING OFFICERS AND OTHERS CONCERNED, YOUR DECISION IS REQUESTED, PURSUANT TO THE ACT OF JULY 31, 1894, 28 STAT. 208, OF THE FOLLOWING QUESTIONS:

A. IF A CHECK WHICH WAS DRAWN DURING THE FISCAL YEAR 1934 AND WHICH DOES NOT REPRESENT A VALID CLAIM AGAINST THE GOVERNMENT COMES AFTER JUNE 30, 1935, INTO THE POSSESSION OF THE DISBURSING OFFICER WHO DREW IT, MAY THE DISBURSING OFFICER CANCEL THE CHECK AND TAKE UP THE AMOUNT THEREOF IN HIS ACCOUNT TO THE CREDIT OF THE APPROPRIATION AGAINST WHICH THE CHECK WAS DRAWN? B. IF A CHECK OF THE TYPE MENTIONED IN A IS ONE DRAWN IN PAYMENT OF THE ARMORY DRILL PAY OF A NATIONAL GUARD MEMBER, AND ITS RETURN TO THE DISBURSING OFFICER IS FOR THE REASON THAT THE PAYEE OF THE CHECK IS INDEBTED TO THE UNITED STATES ON ACCOUNT OF THE LOSS, DAMAGE, OR DESTRUCTION OF GOVERNMENT PROPERTY, EITHER IN THE WHOLE AMOUNT OF THE CHECK OR A PART THEREOF, MAY THE DISBURSING OFFICER WHO DREW THE CHECK CANCEL IT, TAKE UP THE AMOUNT IN HIS ACCOUNT TO THE CREDIT OF THE APPROPRIATION AGAINST WHICH THE CHECK WAS DRAWN, MAKE PAYMENT TO THE NATIONAL GUARD MEMBER ON A SUPPLEMENTAL PAY ROLL ON WHICH HIS ACCOUNT IS RESTATED, AND COLLECT THEREFROM THE AMOUNT OF THE INDEBTEDNESS?

C. IF AN ARMORY DRILL PAY CHECK IS RETURNED TO A DISBURSING OFFICER UNDER THE CONDITIONS STATED IN B, EXCEPT THAT THERE HAS BEEN A CHANGE OF DISBURSING OFFICERS AT THE STATION, SO THAT THE CHECK IS RETURNED, NOT TO THE DISBURSING OFFICER WHO DREW IT, BUT TO HIS SUCCESSOR, AND THE SUCCESSOR DISBURSING OFFICER, BEING WITHOUT AUTHORITY TO CANCEL HIS PREDECESSOR'S CHECK, SENDS IT TO THE GENERAL ACCOUNTING OFFICE WITH REQUEST THAT IT BE CANCELED AND THE AMOUNT THEREOF BE RESTORED TO THE APPROPRIATION AGAINST WHICH DRAWN, MAY THE DISBURSING OFFICER, AFTER HAVING MADE SUCH REQUEST, MAKE PAYMENT TO THE NATIONAL GUARD MEMBER CONCERNED ON A SUPPLEMENTAL PAY ROLL ON WHICH HIS ACCOUNT IS RESTATED AND COLLECT THEREFROM THE AMOUNT OF THE INDEBTEDNESS?

SECTION 21 OF THE PERMANENT APPROPRIATION REPEAL ACT OF JUNE 26, 1934, 48 STAT. 1235 (TITLE 31, U.S. CODE, SECTION 725T) PROVIDES:

HEREAFTER ALL CHECKS DRAWN ON THE TREASURER OF THE UNITED STATES, EXCEPT THOSE ISSUED ON ACCOUNT OF PUBLIC-DEBT OBLIGATIONS AND TRANSACTIONS REGARDING THE ADMINISTRATION OF BANKING AND CURRENCY LAWS, SHALL BE PAYABLE ONLY UNTIL THE CLOSE OF THE FISCAL YEAR NEXT FOLLOWING THE FISCAL YEAR IN WHICH SUCH CHECKS WERE ISSUED, AND THE AMOUNTS OF ALL SUCH CHECKS PROPERLY DUE AND PAYABLE WHICH HAVE NOT BEEN PRESENTED FOR PAYMENT WITHIN SUCH PERIOD SHALL BE DEPOSITED INTO THE TREASURY TO THE CREDIT OF A TRUST FUND ACCOUNT ENTITLED "OUTSTANDING LIABILITIES (FISCAL YEAR)," DESIGNATED BY FISCAL YEARS IN WHICH THE CHECKS WERE ISSUED. THE BALANCES IN THE OUTSTANDING LIABILITIES ACCOUNT NOW CARRIED ON THE BOOKS OF THE GOVERNMENT, REPRESENTING THE AMOUNTS OF UNCLAIMED CHECKS, SHALL BE TRANSFERRED TO THE ACCOUNT "OUTSTANDING LIABILITIES, 1934," AND ANY BALANCES REMAINING THEREIN, OR IN ANY SUCCEEDING FISCAL YEAR ACCOUNT, UNCLAIMED FOR TWO FISCAL YEARS AFTER THE DEPOSIT THEREIN SHALL BE COVERED INTO THE SURPLUS FUND OF THE TREASURY:PROVIDED, THAT THE BALANCES TO THE CREDIT OF THE OUTSTANDING LIABILITIES ACCOUNT OF ANY FISCAL YEAR WHICH HAS NOT BEEN COVERED INTO THE SURPLUS FUND OF THE TREASURY SHALL BE AVAILABLE TO PAY CLAIMS ON ACCOUNT OF ANY CHECK, THE AMOUNT OF WHICH HAS BEEN INCLUDED IN ANY BALANCE SO COVERED INTO THE SURPLUS FUND.

THE EFFECT OF THE QUOTED SECTION WAS TO REDUCE THE PERIOD OF NEGOTIABILITY OF CHECKS DRAWN ON THE TREASURER OF THE UNITED STATES FROM THREE FISCAL YEARS TO ONE FISCAL YEAR FOLLOWING THAT IN WHICH SUCH CHECKS ARE DRAWN AND THE ACCOUNTING PROCEDURE HERETOFORE EXISTING WITH RESPECT TO CHARGING THE ACCOUNT OF THE ISSUING OFFICER WITH THE PROCEEDS OF CHECKS AS OF JUNE 30 OF THE YEAR FOLLOWING ISSUANCE AND DEPOSITING THE PROCEEDS INTO THE TREASURY TO THE CREDIT OF THE TRUST FUND ACCOUNT "OUTSTANDING LIABILITIES (FISCAL YEAR)" HAS NOT BEEN MODIFIED. CANCELLATION OF A CHECK BY A DISBURSING OFFICER WILL NOT OPERATE TO TRANSFER THE PROCEEDS OUT OF "OUTSTANDING LIABILITIES" TO THE CREDIT OF THE APPROPRIATION AGAINST WHICH DRAWN OR TO THE DEPOSITARY ACCOUNT OF THE DISBURSING OFFICER. CLAIMS BASED UPON CHECKS DULY COVERED INTO OUTSTANDING LIABILITIES PURSUANT TO THE PROVISIONS OF THE STATUTE REFERRED TO, WOULD BE FOR ADJUSTMENT AND SETTLEMENT BY THIS OFFICE UNDER THE PROVISIONS OF SECTIONS 308, REVISED STATUTES, AND 305 OF THE ACT OF JUNE 10, 1921, 42 STAT. 24.

FOR REASONS STATED, YOU ARE INFORMED THAT THE QUESTIONS PRESENTED ARE ANSWERED IN THE NEGATIVE. SUCH CHECKS ARE FOR TRANSMITTING IMMEDIATELY UPON THEIR RECEIPT BY A DISBURSING OFFICER TO THIS OFFICE UNDER EXISTING REGULATIONS OF THE GENERAL ACCOUNTING OFFICE WITH FULL REPORT OF THE FACTS AND, IF REQUIRED, A SUPPLEMENTAL PAY ROLL ON WHICH ADJUSTMENT IS PROPOSED TO BE MADE.