A-92943, MARCH 11, 1938, 17 COMP. GEN. 730

A-92943: Mar 11, 1938

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

AN EMPLOYEE WHOSE DUTY IS TO COLLECT MONEYS FOR THE UNITED STATES AND WHO COLLECTS SUCH FUNDS FOR WHICH HE FAILS TO ACCOUNT. IS A PERSON "ACCOUNTABLE FOR PUBLIC MONEYS" WITHIN THE PURVIEW OF SECTION 3624. INTEREST UPON ANY AMOUNT FOR WHICH SUCH OFFICER HAS FAILED TO ACCOUNT IS FOR COMPUTATION UNDER. IS AS FOLLOWS: YOUR ADVICE IS RESPECTFULLY REQUESTED CONCERNING THE FOLLOWING PROBLEM THAT HAS ARISEN IN CONNECTION WITH THE RURAL REHABILITATION PROGRAM OF THE FARM SECURITY ADMINISTRATION OF THIS DEPARTMENT. RURAL REHABILITATION LOANS ARE COLLECTED BY COUNTY RURAL REHABILITATION SUPERVISORS OF THE FARM SECURITY ADMINISTRATION OF THIS DEPARTMENT AND TRANSMITTED BY SUCH COUNTY RURAL REHABILITATION SUPERVISORS TO CERTAIN STATE TREASURY DISBURSING CLERKS TO BE CREDITED TO THE ACCOUNTS OF THE DEBTORS AND TO BE SCHEDULED INTO MISCELLANEOUS RECEIPTS OF THE TREASURY.

A-92943, MARCH 11, 1938, 17 COMP. GEN. 730

FUNDS - PUBLIC - COLLECTIONS - COLLECTING EMPLOYEE'S ACCOUNTABILITY AND INTEREST COMPUTATION ON SHORTAGES, ETC. AN EMPLOYEE WHOSE DUTY IS TO COLLECT MONEYS FOR THE UNITED STATES AND WHO COLLECTS SUCH FUNDS FOR WHICH HE FAILS TO ACCOUNT, IS A PERSON "ACCOUNTABLE FOR PUBLIC MONEYS" WITHIN THE PURVIEW OF SECTION 3624, REVISED STATUTES, AND INTEREST UPON ANY AMOUNT FOR WHICH SUCH OFFICER HAS FAILED TO ACCOUNT IS FOR COMPUTATION UNDER, AND AT THE RATE SPECIFIED IN, SAID SECTION.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, MARCH 11, 1938:

YOUR LETTER OF FEBRUARY 25, 1938, IS AS FOLLOWS:

YOUR ADVICE IS RESPECTFULLY REQUESTED CONCERNING THE FOLLOWING PROBLEM THAT HAS ARISEN IN CONNECTION WITH THE RURAL REHABILITATION PROGRAM OF THE FARM SECURITY ADMINISTRATION OF THIS DEPARTMENT. RURAL REHABILITATION LOANS ARE COLLECTED BY COUNTY RURAL REHABILITATION SUPERVISORS OF THE FARM SECURITY ADMINISTRATION OF THIS DEPARTMENT AND TRANSMITTED BY SUCH COUNTY RURAL REHABILITATION SUPERVISORS TO CERTAIN STATE TREASURY DISBURSING CLERKS TO BE CREDITED TO THE ACCOUNTS OF THE DEBTORS AND TO BE SCHEDULED INTO MISCELLANEOUS RECEIPTS OF THE TREASURY.

OCCASIONS HAVE ARISEN ON WHICH COUNTY RURAL REHABILITATION SUPERVISORS HAVE LOST OR DIVERTED COLLECTIONS MADE BY THEM AND HAVE FAILED PROPERLY TO REMIT SUCH COLLECTIONS TO THE TREASURY DISBURSING CLERKS. IN SUCH INSTANCES, OF COURSE, THIS DEPARTMENT MAKES DEMAND UPON SUCH COUNTY RURAL REHABILITATION SUPERVISORS FOR THE TRANSMITTAL OF THE COLLECTIONS RECEIVED BY THEM AND IN PROPER CASES ADVISES YOUR OFFICE OF SUCH DIVERSIONS AND REPORTS THE MATTER TO THE ATTORNEY GENERAL WITH THE REQUEST THAT APPROPRIATE CIVIL OR CRIMINAL PROCEEDINGS BE INSTITUTED.

THE QUESTION ARISES, HOWEVER, IN DETERMINING THE AMOUNT OWED TO THE GOVERNMENT BY SUCH COUNTY RURAL REHABILITATION SUPERVISORS, OF THE PROPER METHOD OF CALCULATING INTEREST. IN THIS CONNECTION, REFERENCE IS MADE TO SECTION 505 OF TITLE 31 OF THE U.S.C. ANNOTATED, WHICH READS AS FOLLOWS:

"WHENEVER ANY PERSON ACCOUNTABLE FOR PUBLIC MONEY, NEGLECTS OR REFUSES TO PAY INTO THE TREASURY THE SUM OF BALANCE REPORTED TO BE DUE TO THE UNITED STATES, UPON THE ADJUSTMENT OF HIS ACCOUNT, THE GENERAL ACCOUNTING OFFICE SHALL INSTITUTE SUIT FOR THE RECOVERY OF THE SAME, ADDING TO THE SUM STATED TO BE DUE ON SUCH ACCOUNT, THE COMMISSIONS OF THE DELINQUENT, WHICH SHALL BE FORFEITED IN EVERY INSTANCE WHERE SUIT IS COMMENCED AND JUDGMENT OBTAINED THEREON, AND AN INTEREST OF 6 PERCENTUM PER ANNUM, FROM THE TIME OF RECEIVING THE MONEY UNTIL IT SHALL BE REPAID INTO THE TREASURY.'

THERE IS SOME DOUBT WHETHER COUNTY RURAL REHABILITATION SUPERVISORS OF THE FARM SECURITY ADMINISTRATION ARE PERSONS "ACCOUNTABLE FOR PUBLIC MONEY" WITHIN THE MEANING OF THE ABOVE-CITED STATUTE AND WHETHER, CONSEQUENTLY, THE STATUTE HAS APPLICATION TO DIVERSIONS OF PUBLIC FUNDS BY SUCH COUNTY RURAL REHABILITATION SUPERVISORS. IT IS THE OPINION OF THE SOLICITOR OF THIS DEPARTMENT, HOWEVER, THAT THE GOVERNMENT IS CLEARLY ENTITLED TO RECOVER UNDER GENERAL PRINCIPLES OF COMMON LAW THE AMOUNT DIVERTED BY SUCH PERSONS PLUS INTEREST FROM THE TIME OF SUCH DIVERSION REGARDLESS OF WHETHER OR NOT THE ABOVE-CITED STATUTE HAS APPLICATION. C.J., SEC. 255 (2); ARKANSAS CATTLE CO. V. MANN, 130 U.S. 69, 79 (1889; HARRISON V. PEREA, 168 U.S. 311, 324 (1897). IF YOU AGREE WITH THIS OPINION, IT IS, NEVERTHELESS, MATERIAL TO DETERMINE WHETHER THE RIGHT OF THE GOVERNMENT TO COLLECT INTEREST UPON THE FUNDS SO DIVERTED IS BASED UPON SECTION 505 OF TITLE 31 OF THE U.S.C. ANNOTATED OR IS BASED UPON PRINCIPALS OF COMMON LAW. THE RATE OF INTEREST, BASED UPON THE STATUTE, WOULD IN ALL CASES BE SIX PERCENTUM PER ANNUM AS PRESCRIBED BY THE STATUTE; ON THE OTHER HAND, THE RATE OF INTEREST, BASED UPON PRINCIPLES OF COMMON LAW, WOULD DEPEND UPON THE LAW OF THE STATE IN WHICH THE FUNDS WERE CONVERTED OR DIVERTED AND WOULD CONSEQUENTLY DIFFER AMONG THE SEVERAL STATES.

IT WILL BE GREATLY APPRECIATED IF YOU WILL ADVISE ME (1) WHETHER THE GOVERNMENT IS ENTITLED TO COLLECT INTEREST IN THE SITUATION SET ABOVE; (2) IF THE ANSWER TO (1) IS IN THE AFFIRMATIVE, WHETHER THIS RIGHT IS BASED UPON SECTION 505 OF TITLE 31 OF THE U.S.C. ANNOTATED, UPON PRINCIPLES OF COMMON LAW OR UPON ANY OTHER BASIS; AND (3) WHETHER THE INTEREST RATE SHALL IN ALL CASES BE SIX PERCENTUM PER ANNUM, SHALL BE GOVERNED BY THE LAW OF THE STATE WHERE THE DIVERSION TOOK PLACE OR SHALL BE FIXED IN ANY OTHER MANNER.

AN EMPLOYEE WHOSE DUTY IT IS TO COLLECT MONEYS FOR THE UNITED STATES, AND WHO COLLECTS SUCH FUNDS FOR WHICH HE FAILS TO ACCOUNT, MUST BE CONSIDERED A PERSON "ACCOUNTABLE FOR PUBLIC MONEYS" WITHIN THE PURVIEW OF SECTION 505, TITLE 31, U.S.C. WHICH IS A RESTATEMENT OF SECTION 3624, REVISED STATUTES. INTEREST UPON ANY AMOUNT FOR WHICH SUCH AN OFFICER HAS FAILED TO ACCOUNT IS FOR COMPUTATION UNDER THAT SECTION OF THE CODE OR REVISED STATUTES AND AT THE RATE THEREIN SPECIFIED. SEE SMYTHE V. UNITED STATES, 188 U.S. 156.