A-85406, MAY 25, 1937, 16 COMP. GEN. 1032

A-85406: May 25, 1937

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1937: THERE IS FOR CONSIDERATION YOUR REQUEST DATED JANUARY 29. 21.10 IT APPEARS THAT PAYMENT IN EACH CASE WAS DISALLOWED. FOR THE REASON THAT THE SUPPLIES SHOWN ON THE INVOICES SUPPORTING THE VOUCHERS WERE NOT ACTUALLY DELIVERED BUT WERE SUBSTITUTED FOR BY OTHER SUPPLIES. THE FACTS ARE SET FORTH IN LETTER TO THE SECRETARY OF WAR OCTOBER 7. WITH YOUR REQUEST FOR REVIEW YOU HAVE SUBMITTED CORRESPONDENCE WITH THE SALES OFFICER. IN WHICH IT IS ADMITTED THAT THE VOUCHERS DID NOT LIST CORRECTLY THE ITEMS RECEIVED FROM DEALERS. THERE WAS NO INTENT TO FRAUDULENTLY CONCEAL ANY PURCHASE MADE BY ME. AS ALL ITEMS WERE AUTHORIZED SALES ARTICLES AND WOULD HAVE BEEN APPROVED. NO EFFORT WAS MADE TO CONCEAL THE FACT THAT ITEMS.

A-85406, MAY 25, 1937, 16 COMP. GEN. 1032

RESPONSIBILITY FOR ERRONEOUS PAYMENTS - RELIEF ACT OF AUGUST 23, 1912 - ARMY DISBURSING OFFICERS THE ACT OF AUGUST 23, 1912, 37 STAT. 375, RELIEVES ONLY DISBURSING CLERKS IN THE EXECUTIVE DEPARTMENTS AT WASHINGTON, D.C., OF THE RESPONSIBILITY FOR ERRONEOUS PAYMENTS MADE ON STATEMENTS OF FACT CERTIFIED TO BY THE PROPER ADMINISTRATIVE OFFICER, AND NOT DISBURSING OFFICERS OF THE ARMY.

ACTING COMPTROLLER GENERAL ELLIOTT TO MAJ. CHARLES LEWIS, UNITED STATES ARMY, MAY 25, 1937:

THERE IS FOR CONSIDERATION YOUR REQUEST DATED JANUARY 29, 1937, TRANSMITTED TO THIS OFFICE BY FOURTH INDORSEMENT OF THE CHIEF OF FINANCE DATED MARCH 6, 1937, FOR REVIEW OF DISALLOWANCES INVOLVING VOUCHERS IN YOUR JUNE 1936 ACCOUNT AT FORT BENJAMIN HARRISON, IND., AS FOLLOWS:

CHART

VOUCHER PAYEE AMOUNT

62 M. O-CONNOR AND CO ------------------------------- $104.85

63 BESSIRE AND CO., INC ---------------------------- 10.72

139 JOE RAY ------------------------------------------ 887.17

226 WONDER BISCUIT BAKERY ---------------------------- 21.10

IT APPEARS THAT PAYMENT IN EACH CASE WAS DISALLOWED, ON THE BASIS OF A REPORT OF INVESTIGATORS OF THIS OFFICE, FOR THE REASON THAT THE SUPPLIES SHOWN ON THE INVOICES SUPPORTING THE VOUCHERS WERE NOT ACTUALLY DELIVERED BUT WERE SUBSTITUTED FOR BY OTHER SUPPLIES. THE FACTS ARE SET FORTH IN LETTER TO THE SECRETARY OF WAR OCTOBER 7, 1936, A-51624, AND LIST ATTACHED THERETO.

WITH YOUR REQUEST FOR REVIEW YOU HAVE SUBMITTED CORRESPONDENCE WITH THE SALES OFFICER, FORT BENJAMIN HARRISON, IND., IN WHICH IT IS ADMITTED THAT THE VOUCHERS DID NOT LIST CORRECTLY THE ITEMS RECEIVED FROM DEALERS. SECOND INDORSEMENT OF JANUARY 18, 1937, THEREOF, CONCLUDES AS OLLOWS:

4. IN ALL OF THE ABOVE MENTIONED CASES, THERE WAS NO INTENT TO FRAUDULENTLY CONCEAL ANY PURCHASE MADE BY ME, AS ALL ITEMS WERE AUTHORIZED SALES ARTICLES AND WOULD HAVE BEEN APPROVED, IF THEY HAD BEEN ENTERED ON THE RECEIVING REPORT AND PURCHASE ORDER. NO EFFORT WAS MADE TO CONCEAL THE FACT THAT ITEMS, NOT APPEARING ON THE ORIGINAL RECEIVING REPORT AND PURCHASE ORDER, HAD ACTUALLY BEEN RECEIVED BY ME AS EVIDENCED BY THE FACT THAT THE ORIGINAL DELIVERY SLIPS FROM THE DEALERS ARE ON FILE AT THE POST COMMISSARY, AVAILABLE FOR INSPECTION AT ANY TIME, SHOWING THE ACTUAL SUPPLIES DELIVERED AND FURTHER THE RECORDS SHOW THAT THE ACTUAL ARTICLE DELIVERED WAS CHARGED OUT TO THE ORGANIZATIONS ON CHARGE SALES SLIPS, (QMC FORM 385), UNDER THEIR PROPER NOMENCLATURE. NO EFFORT WAS MADE TO INFLUENCE THE DEALER ON THE MANNER OF SUBMITTING HIS INVOICES OTHER THAN TO FURNISH HIM WITH A CONFIRMATION COPY OF THE PURCHASE ORDER, FROM WHICH THE INVOICES WERE APPARENTLY MADE. IN NO INSTANCE DID THE GOVERNMENT SUFFER ANY MONETARY LOSS NOR DID I OR ANY MEMBER OF THE COMMISSARY FORCE OR THE PURCHASING BRANCH OF THE QUARTERMASTER CORPS RECEIVE ANY BENEFITS THEREFROM. THE COMBINING OF SEVERAL ITEMS, OF EQUAL MONEY VALUE UNDER ONE HEADING, WAS DONE TO FACILITATE THE BOOKKEEPING AND TO MINIMIZE AS MUCH AS POSSIBLE THE CLERICAL WORK INVOLVED IN OPERATING THE POST COMMISSARY, WHICH NECESSARILY HAD TO FUNCTION WITH VERY LIMITED EXPERIENCED PERSONNEL, IN CONDUCTING A BUSINESS OF BETWEEN THIRTY-FIVE AND FIFTY THOUSAND DOLLARS MONTHLY, AND FOR NO OTHER REASON. THE IRREGULAR PRACTICE, OUTLINED ABOVE, HAS BEEN THOROUGHLY INVESTIGATED BY THE POST COMMANDER AND ORDERS ISSUED THAT SAME WILL BE DISCONTINUED AT ONCE AND ARMY REGULATIONS STRICTLY COMPLIED WITH. AS A RESULT OF THE ABOVE INVESTIGATION AND ORDERS I IMMEDIATELY TOOK STEPS TO CORRECT ALL IRREGULAR PRACTICES IN THE POST COMMISSARY.

FOURTH INDORSEMENT OF THE CHIEF OF FINANCE, DATED MARCH 6, 1937, IS, IN PART, AS FOLLOWS:

2. IN THIS CONNECTION IT IS NOTED THAT THE DISALLOWANCES IN QUESTION WERE BASED UPON INFORMATION THAT THE VOUCHERS WERE IMPROPERLY CERTIFIED AND APPROVED, IN THAT THE SUPPLIES SHOWN WERE NOT ACTUALLY DELIVERED, BUT OTHER SUPPLIES WERE SUBSTITUTED THEREFOR. HOWEVER, THE DISBURSING OFFICER STATES, IN INCLOSED LETTER DATED JANUARY 2, 1937, THAT, AS THE INVOICES AND RECEIVING REPORTS WERE IN AGREEMENT WITH THE PURCHASE ORDERS AS TO THE SUPPLIES ORDERED, THE ALLEGED SUBSTITUTION WAS UNKNOWN TO THE DISBURSING OFFICER AND THE ACCOUNTS WERE VOUCHERED UNDER SUBPARAGRAPH 1C, AR 35-1040, AND PAYMENTS MADE IN THE USUAL MANNER. IT ACCORDINGLY APPEARS THAT THE DISBURSING OFFICER IS ENTITLED TO CREDIT FOR THE DISALLOWED PAYMENTS UNDER THE PRINCIPLE SET FORTH IN DECISION, A-82990, DATED FEBRUARY 10, 1937, WHICH QUOTED THE SYLLABUS OF DECISION DATED MAY 25, 1925, 4 COMP. GEN. 991, TO THE FOLLOWING EFFECT:

"UNDER THE ACT OF AUGUST 23, 1912, 37 STAT. 375, DISBURSING OFFICERS ARE REQUIRED TO MAKE ONLY SUCH EXAMINATION OF VOUCHERS AS MAY BE NECESSARY TO ASCERTAIN WHETHER THEY REPRESENT LEGAL CLAIMS AGAINST THE UNITED STATES. CREDIT WILL ACCORDINGLY BE ALLOWED IN THE ACCOUNTS OF DISBURSING OFFICERS FOR ILLEGAL PAYMENTS MADE ON VOUCHERS PROPERLY CERTIFIED AND APPROVED BY ADMINISTRATIVE OFFICERS AND CONTAINING NOTHING ON THE FACE THEREOF THAT WOULD PUT THE DISBURSING OFFICER ON NOTICE THAT PAYMENTS THEREON WOULD BE ILLEGAL.'

THE ACT OF AUGUST 23, 1912, 37 STAT. 375, CONSIDERED IN 4 COMP. GEN. 991, CITED ABOVE, WAS INVOLVED IN DECISION OF JULY 27, 1935, A-62469, IN WHICH IT WAS HELD, QUOTING THE SYLLABUS:

THE ACT OF AUGUST 23, 1912, 37 STAT. 375, IS NOT APPLICABLE TO DISBURSING OFFICERS OF THE ARMY.

IN THAT DECISION THERE WAS CONSIDERED THE REQUEST OF A DISBURSING OFFICER FOR RELIEF UNDER PARAGRAPH 3, AR 35-180. IN THE COURSE OF THE DECISION THERE APPEARS THE FOLLOWING:

PARAGRAPH 3, ARMY REGULATIONS 35-180, REFERRED BY YOU, HAD ITS ORIGIN IN DECISION OF THE COMPTROLLER OF THE TREASURY, 25 COMP., DEC. 437.

THE SYLLABUS, IN PART, OF THIS DECISION IS AS FOLLOWS:

"DISBURSING OFFICERS ARE NOT RESPONSIBLE FOR THE CORRECTNESS OF STATEMENTS OF FACT APPEARING ON PAY ROLLS OF WHICH THEY CAN HAVE NO KNOWLEDGE BUT WHICH ARE CERTIFIED TO BY THE PROPER ADMINISTRATIVE OFFICERS; THEY ARE, HOWEVER, RESPONSIBLE FOR THE CORRECT APPLICATION OF LAWS AND REGULATIONS TO THE STATEMENT OF FACTS CERTIFIED, AND FOR THE SUFFICIENCY OF THE FACTS STATED.'

ON PAGE 439, OF THE DECISION QUOTATION IS MADE FROM 20 COMP. DEC. 859, WHEREIN REFERENCE IS MADE TO THE FOLLOWING PROVISION APPEARING IN THE LEGISLATIVE, EXECUTIVE, AND JUDICIAL APPROPRIATION ACT OF AUGUST 23, 1912, 37 STAT. 375:

"HEREAFTER THE ADMINISTRATIVE EXAMINATION OF ALL PUBLIC ACCOUNTS PRELIMINARY TO THEIR AUDIT BY THE ACCOUNTING OFFICERS OF THE TREASURY, SHALL BE AS CONTEMPLATED BY THE SO-CALLED DOCKERY ACT, APPROVED JULY THIRTY-FIRST, EIGHTEEN HUNDRED AND NINETY-FOUR, AND ALL VOUCHERS AND PAY ROLLS SHALL BE PREPARED AND EXAMINED BY AND THROUGH THE ADMINISTRATIVE HEADS OF DIVISIONS AND BUREAUS IN THE EXECUTIVE DEPARTMENTS AND NOT BY THE DISBURSING CLERKS OF SAID DEPARTMENTS, EXCEPT THOSE VOUCHERS HERETOFORE PREPARED OUTSIDE OF WASHINGTON MAY CONTINUE TO BE SO PREPARED AND THE DISBURSING OFFICERS SHALL MAKE ONLY SUCH EXAMINATION OF VOUCHERS AS MAY BE NECESSARY TO ASCERTAIN WHETHER THEY REPRESENT LEGAL CLAIMS AGAINST THE UNITED STATES.'

ACCORDINGLY, THE DISALLOWANCE MAY NOT BE REMOVED ON THE BASIS OF THE CITED REGULATION.

AS THE LANGUAGE OF THE ACT OF AUGUST 23, 1912, SUPRA, PLAINLY IMPORTS, IT IS ONLY THE DISBURSING CLERKS IN THE EXECUTIVE DEPARTMENTS AT WASHINGTON, D.C., WHO ARE RELIEVED OF RESPONSIBILITY FOR ERRONEOUS PAYMENTS MADE ON STATEMENTS OF FACT CERTIFIED TO BY THE PROPER ADMINISTRATIVE OFFICER.

IT IS NOTED THAT YOU WERE ALSO THE CERTIFYING OFFICER ON THE VOUCHERS HERE INVOLVED.

HOWEVER, BY LETTER OF FEBRUARY 9, 1937, IN REPLY TO LETTER OF OCTOBER 7, 1936, A-51624, THE SECRETARY OF WAR REPORTED THAT---

* * * I HAVE CAUSED AN INVESTIGATION TO BE MADE AND FIND THAT THEIRREGULARITIES MENTIONED IN YOUR LETTER ACTUALLY OCCURRED.

I FIND THAT, ALTHOUGH REGULATIONS WERE VIOLATED, NO FINANCIAL LOSS TO THE GOVERNMENT WAS OCCASIONED BY THESE IRREGULARITIES.

PROPER REMEDIAL ACTION HAS BEEN TAKEN TO INSURE FULL COMPLIANCE WITH EXISTING REGULATIONS IN THE FUTURE.

IN VIEW OF THE REPORT OF THE SECRETARY OF WAR IN THE ABOVE CITED LETTER OF FEBRUARY 9, 1937, CREDIT FOR THE PAYMENTS MADE ON THE VOUCHERS INVOLVED, IF OTHERWISE CORRECT, WILL BE ALLOWED IN THE NEXT SETTLEMENT OF YOUR DISBURSING ACCOUNTS.