A-97774, OCTOBER 21, 1938, 18 COMP. GEN. 363

A-97774: Oct 21, 1938

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APPROPRIATIONS - OBLIGATION - CONTRACTS INVOLVING SUBSEQUENT FISCAL YEARS - UNCERTAIN AMOUNTS THE RULE THAT A CLAIM IS CHARGEABLE TO THE APPROPRIATION FOR THE FISCAL YEAR IN WHICH THE LIABILITY WAS INCURRED. IS APPLICABLE IN ALL CASES IN WHICH THERE IS A DEFINITE DETERMINATION AS TO THE TIME THE PUBLIC FUNDS BECAME OBLIGATED FOR THE PAYMENT OF A GIVEN LIABILITY WHETHER THE AMOUNT IS. OR IS NOT. THERE IS AN OBLIGATION AGAINST THE APPROPRIATION FOR THE FISCAL YEAR WHEN THE AGREEMENT IS EXECUTED. SUCH APPROPRIATION IS CHARGEABLE NOTWITHSTANDING THE CATTLE WERE NOT SLAUGHTERED UNTIL THE FOLLOWING FISCAL YEAR. 5 COMP. IS AS FOLLOWS: THE BUREAU OF ANIMAL INDUSTRY OF THIS DEPARTMENT HAS JUST ADVISED ME THAT CERTAIN CLAIMS FOR PAYMENT FOR CATTLE REACTING TO THE AGGLUTINATION TEST FOR BANG'S DISEASE.

A-97774, OCTOBER 21, 1938, 18 COMP. GEN. 363

APPROPRIATIONS - OBLIGATION - CONTRACTS INVOLVING SUBSEQUENT FISCAL YEARS - UNCERTAIN AMOUNTS THE RULE THAT A CLAIM IS CHARGEABLE TO THE APPROPRIATION FOR THE FISCAL YEAR IN WHICH THE LIABILITY WAS INCURRED, IS APPLICABLE IN ALL CASES IN WHICH THERE IS A DEFINITE DETERMINATION AS TO THE TIME THE PUBLIC FUNDS BECAME OBLIGATED FOR THE PAYMENT OF A GIVEN LIABILITY WHETHER THE AMOUNT IS, OR IS NOT, CERTAIN AT THE TIME. WHERE BILATERAL AGREEMENTS EXECUTED BY AND BETWEEN THE SECRETARY OF AGRICULTURE AND CATTLE OWNERS PROVIDED FOR TESTING OF CATTLE AND FOR PAYMENT OF INDEMNITY, NOT TO EXCEED A CERTAIN SUM, FOR CATTLE REACTING TO TEST FOR BANG'S DISEASE AND MARKETED IN ACCORDANCE WITH THE AGREEMENTS, THERE IS AN OBLIGATION AGAINST THE APPROPRIATION FOR THE FISCAL YEAR WHEN THE AGREEMENT IS EXECUTED, AND SUCH APPROPRIATION IS CHARGEABLE NOTWITHSTANDING THE CATTLE WERE NOT SLAUGHTERED UNTIL THE FOLLOWING FISCAL YEAR. 5 COMP. GEN. 118, RELATING TO UNILATERAL AGREEMENTS WITHOUT PROVISION FOR PAYMENTS BY THE GOVERNMENT FOR CATTLE DESTROYED, DISTINGUISHED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, OCTOBER 21, 1938:

LETTER DATED SEPTEMBER 7, 1938, FROM THE ACTING SECRETARY, IS AS FOLLOWS:

THE BUREAU OF ANIMAL INDUSTRY OF THIS DEPARTMENT HAS JUST ADVISED ME THAT CERTAIN CLAIMS FOR PAYMENT FOR CATTLE REACTING TO THE AGGLUTINATION TEST FOR BANG'S DISEASE, WHICH WERE TESTED BEFORE JULY 1, 1938, AND SLAUGHTERED AFTER THAT DATE, HAVE BEEN RETURNED BY YOUR OFFICE WITHOUT CERTIFICATION, ACCOMPANIED BY THE FOLLOWING STATEMENT:

"AS THE ANIMALS WERE NOT SLAUGHTERED UNTIL AFTER JULY 1, 1938, THE APPROPRIATION FOR 1938 DOES NOT APPEAR AVAILABLE FOR PAYMENT. 5 COMP. GEN. 118.'

IT WILL BE GREATLY APPRECIATED IF YOU WILL GIVE FURTHER CONSIDERATION TO THIS MATTER, AT AS EARLY A DATE AS POSSIBLE, BECAUSE IT IS BELIEVED THAT THE DECISION OF AUGUST 17, 1925, CITED ABOVE, IS, BY NECESSARY INFERENCE, AUTHORITY FOR THE PAYMENT OF COMPENSATION IN THESE CASES RATHER THAN AGAINST SUCH PAYMENT.

THE DECISION CITED REVERSES A PRIOR DECISION OF THE COMPTROLLER OF THE TREASURY, WHO HELD THAT THE AGREEMENTS WITH THE OWNERS OF THE CATTLE, IN CONNECTION WITH TESTS FOR TUBERCULOSIS, MIGHT BE CONSIDERED "AS CREATING AN OBLIGATION UNDER THE APPROPRIATION FOR THE FISCAL YEAR IN WHICH THE AGREEMENTS WERE MADE.' THE STATED REASON FOR THE COMPTROLLER GENERAL'S REVERSAL OF THAT DECISION IS THAT AN EXAMINATION OF THE AGREEMENT OF COOPERATION SHOWED "NO PROVISION MADE THEREIN FOR THE PAYMENT OF INDEMNITY," RAISING, AS IT SEEMS TO THIS DEPARTMENT, THE NECESSARY INFERENCE THAT THE DECISION WOULD NOT HAVE BEEN REVERSED IF THERE HAD BEEN PROVISION FOR THE PAYMENT OF INDEMNITY IN THE AGREEMENT. IN ALL THESE CASES, RECENTLY SUBMITTED FOR CERTIFICATION, THERE WASA WRITTEN AGREEMENT, DULY SIGNED BY THE CATTLE OWNERS AND THE SECRETARY OF AGRICULTURE, IN WHICH THE SECRETARY AGREED TO MAKE THE APPLICABLE INDEMNITY PAYMENT, AS FOLLOWS:

"17. THAT THE OWNER'S HERD SHALL BE TESTED FOR BANG'S DISEASE UNDER THE DIRECTION OF THE BUREAU WITHOUT EXPENSE TO THE OWNER EXCEPT FOR NECESSARY HANDLING OF THE ANIMALS INCIDENT TO COLLECTING BLOOD SAMPLES.

"18. TO PAY TO THE OWNER, UPON SUCH PROOF OF COMPLIANCE WITH THE TERMS HEREOF AS THE CHIEF OF THE BUREAU MAY REQUIRE, AN AMOUNT FOR EACH ANIMAL, EXCEPT UNREGISTERED BULLS MARKETED IN ACCORDANCE WITH THIS AGREEMENT, EQUAL TO THE APPRAISAL LESS THE NET PROCEEDS OF MARKETING THE ANIMAL AND LESS ANY OTHER MONEYS RECEIVED BECAUSE OF THE ELIMINATION OF THE ANIMAL BUT IN NO EVENT TO EXCEED $25 FOR A GRADE ANIMAL AND $50FOR A REGISTERED PUREBRED ANIMAL. (REGISTRATION CERTIFICATES COVERING CATTLE OVER 3 YEARS OLD SHALL BE PRESENTED AT TIME OF APPRAISAL.)

"19. IT IS MUTUALLY UNDERSTOOD AND AGREED THAT THE SECRETARY MAY, IN HIS DISCRETION, DETERMINE THAT A SECOND, A THIRD, AND/OR A FOURTH TEST SHALL BE MADE OF THE OWNER'S HERD HEREUNDER, AND THAT IN THE EVENT OF SUCH SECOND, THIRD, AND/OR FOURTH TEST, REACTORS TO EACH SUCH TEST SHALL BE ELIMINATED AND PAYMENT MADE THEREFOR IN THE SAME MANNER AS FOR REACTORS TO THE FIRST TEST.'

IN VIEW OF THIS SPECIFIC AGREEMENT ON THE PART OF THE SECRETARY OF AGRICULTURE, MADE IN THE FISCAL YEAR 1938, TO PAY FOR THE ANIMALS ELIMINATED ON ACCOUNT OF BANG'S DISEASE, IT IS BELIEVED THAT 5 COMP. GEN. 118 IS PROPERLY TO BE CITED AS AUTHORITY FOR THE PROPOSITION THAT, WHEN SUCH AN AGREEMENT HAS BEEN MADE, THE APPROPRIATION FOR THE FISCAL YEAR IN WHICH IT IS MADE IS CHARGED WITH THE PAYMENT OF THE INDEMNITY PROVIDED FOR IN THE AGREEMENT, EVEN THOUGH THE CATTLE INVOLVED HAVING BEEN TESTED DURING ONE FISCAL YEAR MAY NOT HAVE BEEN SLAUGHTERED OR ELIMINATED UNTIL AFTER THE CLOSE OF THAT YEAR.

IT IS EARNESTLY HOPED THAT THIS MATTER MAY BE GIVEN PROMPT CONSIDERATION, SO THAT THESE CATTLE OWNERS MAY RECEIVE INDEMNITY PAYMENTS IN ACCORDANCE WITH THE AGREEMENTS AT AS EARLY A DATE AS POSSIBLE.

THE AGREEMENT CONSIDERED IN 5 COMP. GEN. 118 WAS A UNILATERAL AGREEMENT-- - ONE IN WHICH THE OWNERS OF HERDS AGREED TO PERMIT THE TUBERCULIN TESTING AND RETESTING OF THEIR HERDS, ETC., BUT WHICH CONTAINED NO PROVISION FOR PAYMENT BY THE GOVERNMENT TO OWNERS FOR TUBERCULOSIS-INFECTED CATTLE DESTROYED, THE PRIMARY OBJECT OF THE AGREEMENT FROM THE OWNER'S STANDPOINT, AT LEAST, APPEARING TO CONSIST IN THE OBTAINING OF A SO-CALLED "TUBERCULOSIS FREE-ACCREDITED HERD CERTIFICATE.' SINCE SUCH AN AGREEMENT IN NOWISE OBLIGATED THE GOVERNMENT TO PAY--- THE MATTER OF PAYMENT BEING IN THE DISCRETION OF THE SECRETARY OF AGRICULTURE--- THERE COULD HAVE BEEN NO LIABILITY SET UP AGAINST THE APPROPRIATION AT THE TIME OF MAKING SUCH AGREEMENT.

IN THE INSTANT MATTER, HOWEVER, THE AGREEMENT APPEARS TO BE BILATERAL. AFTER SETTING FORTH THE NAMES OF THE PARTIES, ETC., THE AGREEMENT STATES:

WHEREAS, IT IS DESIRED TO ELIMINATE CATTLE REACTING TO THE AGGLUTINATION BLOOD TEST FOR BANG'S DISEASE.

NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND THE MUTUAL COVENANTS OF THE PARTIES HEREIN CONTAINED AND THE SECRETARY'S INITIAL BLOOD TEST FOR BANG'S DISEASE, IT IS HEREBY MUTUALLY AGREED AS FOLLOWS:

AND THEREAFTER SETS FORTH 16 PARAGRAPHS AS "COVENANTS OF THE OWNER," AND THREE PARAGRAPHS AS ,COVENANTS OF THE SECRETARY"--- THE LATTER BEING THOSE QUOTED IN THE LETTER, SUPRA.

IT HAS LONG BEEN THE ACCEPTED GENERAL RULE OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT A CLAIM AGAINST AN ANNUAL APPROPRIATION WHEN OTHERWISE PROPER IS CHARGEABLE TO THE APPROPRIATION FOR THE FISCAL YEAR IN WHICH THE LIABILITY WAS INCURRED. THE RULE IS APPLICABLE IN ALL CASES IN WHICH THERE IS A DEFINITE DETERMINATION AS TO THE TIME THE PUBLIC FUNDS BECAME OBLIGATED FOR THE PAYMENT OF A GIVEN LIABILITY WHETHER THE AMOUNT IS, OR IS NOT, CERTAIN AT THE TIME.

UNDER THE FORM OF AGREEMENT HERE UNDER CONSIDERATION, SINCE THERE IS A DEFINITE AGREEMENT TO PAY INDEMNITY, THE AMOUNT OF THE INDEMNITY PAYMENT NOT TO EXCEED A CERTAIN SUM, IT MUST BE HELD THAT THERE IS AN OBLIGATION AGAINST APPROPRIATED MONEYS WHEN THE AGREEMENT IS ENTERED INTO, AND THAT THE APPROPRIATION PROPERLY CHARGEABLE IS THE FISCAL YEAR APPROPRIATION CURRENT AT THE TIME THE AGREEMENT IS MADE. AUDIT ACTION BY THIS OFFICE ON PAYMENTS UNDER SUCH AGREEMENTS AS HEREIN DESCRIBED HEREAFTER WILL BE ACCORDINGLY--- THE DECISION 5 COMP. GEN. 118 HAVING NO APPLICATION IN SUCH CASES.