A-99278, DECEMBER 20, 1938, 18 COMP. GEN. 560

A-99278: Dec 20, 1938

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SO FAR AS OBLIGATING THE FUNDS IS CONCERNED. - SUCH AS MIGHT HAVE BEEN INCURRED UNDER PRIVATE CONTRACT- - ARE CHARGEABLE TO THE FUNDS TRANSFERRED BETWEEN THE DEPARTMENTS UNDER AUTHORITY OF SECTION 601 OF THE ACT OF JUNE 30. SUCH EXPENSES AS UNDER PRIVATE CONTRACT WOULD HAVE BEEN CHARGEABLE TO THE NAVY DEPARTMENT'S ADMINISTRATIVE EXPENSE APPROPRIATION RATHER THAN THE APPROPRIATION FOR THE PARTICULAR WORK. 1938: REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 9. THERE IS MADE AVAILABLE ANNUALLY SUCH FUNDS AS MAY BE REQUIRED TO COVER TELEPHONE AND TELEGRAPH EXPENSES OF THE WAR DEPARTMENT. NUMEROUS DECISIONS OF YOUR OFFICE HAVE HELD THAT WHERE A SPECIFIC APPROPRIATION IS MADE AVAILABLE. IT IS BELIEVED TO HAVE BEEN THE INTENT OF THE CONGRESS THAT THE APPROPRIATION SIGNAL SERVICE OF THE ARMY SHOULD COVER ONLY SUCH EXPENSES AS MAY BE NECESSARY INCIDENT TO ACTIVITIES OF THE WAR DEPARTMENT AND THE ARMY.

A-99278, DECEMBER 20, 1938, 18 COMP. GEN. 560

APPROPRIATIONS - TRANSFERS - INTERDEPARTMENTAL WORK AND SERVICES - AVAILABILITY FOR TELEPHONE, TELEGRAM, PRINTING AND BINDING EXPENSES THE NAVY DEPARTMENT BEING AUTHORIZED BY LAW TO PLACE ORDERS WITH THE WAR DEPARTMENT UNDER CERTAIN CIRCUMSTANCES FOR WORK TO BE DONE UNDER NAVY APPROPRIATIONS, AND ORDERS SO PLACED BEING FOR CONSIDERATION SUBSTANTIALLY THE SAME, SO FAR AS OBLIGATING THE FUNDS IS CONCERNED, AS CONTRACTS MADE BY THE NAVY DEPARTMENT WITH A PRIVATE CONTRACTOR FOR THE ACCOMPLISHMENT OF THE WORK, ANY EXPENSES FOR TELEPHONE AND TELEGRAPH SERVICE, OR PRINTING AND BINDING, DIRECTLY INCIDENT TO THE PERFORMANCE OF THE WORK--- SUCH AS MIGHT HAVE BEEN INCURRED UNDER PRIVATE CONTRACT- - ARE CHARGEABLE TO THE FUNDS TRANSFERRED BETWEEN THE DEPARTMENTS UNDER AUTHORITY OF SECTION 601 OF THE ACT OF JUNE 30, 1932, 47 STAT. 417, FOR PERFORMANCE OF THE WORK, BUT SUCH EXPENSES AS UNDER PRIVATE CONTRACT WOULD HAVE BEEN CHARGEABLE TO THE NAVY DEPARTMENT'S ADMINISTRATIVE EXPENSE APPROPRIATION RATHER THAN THE APPROPRIATION FOR THE PARTICULAR WORK, MUST BE BORNE BY THE WAR DEPARTMENT'S ADMINISTRATIVE APPROPRIATIONS FOR SUCH EXPENSES.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF WAR, DECEMBER 20, 1938:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 9, 1938, AS FOLLOWS:

UNDER THE AUTHORITY OF THE ACT OF JULY 21, 1894 (28 STAT. 208), I REQUEST YOUR ADVANCE DECISION UPON A QUESTION NOW BEFORE ME FOR ACTION.

UNDER THE APPROPRIATION SIGNAL SERVICE OF THE ARMY, THERE IS MADE AVAILABLE ANNUALLY SUCH FUNDS AS MAY BE REQUIRED TO COVER TELEPHONE AND TELEGRAPH EXPENSES OF THE WAR DEPARTMENT. NUMEROUS DECISIONS OF YOUR OFFICE HAVE HELD THAT WHERE A SPECIFIC APPROPRIATION IS MADE AVAILABLE, NO GENERAL APPROPRIATION MAY BE USED. IT IS BELIEVED TO HAVE BEEN THE INTENT OF THE CONGRESS THAT THE APPROPRIATION SIGNAL SERVICE OF THE ARMY SHOULD COVER ONLY SUCH EXPENSES AS MAY BE NECESSARY INCIDENT TO ACTIVITIES OF THE WAR DEPARTMENT AND THE ARMY.

UNDER SECTION 601 OF THE LEGISLATIVE APPROPRIATION ACT FOR THE FISCAL YEAR 1933, APPROVED JUNE 30, 1932 (ECONOMY ACT), AUTHORITY WAS GRANTED TO ANY EXECUTIVE DEPARTMENT OR INDEPENDENT ESTABLISHMENT OF THE GOVERNMENT TO PLACE ORDERS WITH ANY OTHER DEPARTMENT OR ESTABLISHMENT FOR MATERIAL, SUPPLIES, SERVICES, ETC., THAT THE OTHER AGENCY WAS EQUIPPED TO RENDER. THE FUNDS SO ADVANCED ARE DEPOSITED TO THE CREDIT OF A "WORKING FUND" AVAILABLE TO THE AGENCY RENDERING THE SERVICE.

THE ORDNANCE DEPARTMENT RECEIVES A LARGE NUMBER OF SUCH ADVANCES AND PLACES THE ORDERS FOR MANUFACTURE OF THE DESIRED MATERIAL WITH A GOVERNMENT-OWNED ESTABLISHMENT, IN ACCORDANCE WITH THE ARMY ACT OF JUNE 5, 1920 (41 STAT. 975). THUS FAR, THIS FISCAL YEAR FUNDS TRANSFERRED FROM THE NAVY DEPARTMENT TO THE WAR DEPARTMENT FOR USE BY THE ORDNANCE DEPARTMENT ARE IN EXCESS OF $12,000,000. INCIDENT AND NECESSARY TO CARRYING OUT THE WORK OF THE NAVY DEPARTMENT, TELEPHONE AND TELEGRAPH EXPENSES ARE INCURRED. OBVIOUSLY, IT IS NOT THE INTENT OF THE CONGRESS TO HAVE A WAR DEPARTMENT OVERHEAD APPROPRIATION BEAR ANY PART OF THE ADMINISTRATIVE OVERHEAD EXPENSE OF THE NAVY DEPARTMENT. IF THE TELEPHONE AND TELEGRAPH CHARGES INCIDENT AND NECESSARY IN CARRYING OUT THE NAVY WORK IS CHARGED TO THE APPROPRIATION SIGNAL SERVICE OF THE ARMY, THE WORK PERFORMED BY THE NAVY DOES NOT BEAR ITS FULL COST AND THE NAVY APPROPRIATIONS THEN ARE AUGMENTED TO THE EXTENT THAT THE MILITARY APPROPRIATION BEARS ANY OF THESE OVERHEAD EXPENSES.

UNDER THE ACT OF JUNE 5, 1920, ALL ORDERS FOR THE MANUFACTURE OF MATERIAL PERTAINING TO APPROVED PROJECTS PLACED WITH THE GOVERNMENT OWNED ESTABLISHMENTS, ARE CONSIDERED IN THE SAME LIGHT AS CONTRACTS OR ORDERS PLACED WITH COMMERCIAL MANUFACTURERS. HAD ANY OF THESE ORDERS BEEN PLACED WITH COMMERCIAL MANUFACTURERS, THE COST TO THE NAVY DEPARTMENT WOULD HAVE INCLUDED ALL INCIDENTAL EXPENSES SUCH AS TELEPHONE AND TELEGRAPH CHARGES, PRINTING AND BINDING, ETC. THEREFORE, I BELIEVE THAT PROPER ACCOUNTING PROCEDURE WOULD REQUIRE THAT FUNDS MADE AVAILABLE FOR THE PERFORMANCE OF WORK FOR OTHER EXECUTIVE DEPARTMENTS OR AGENCIES BE REQUIRED TO BEAR ITS SHARE OF ADMINISTRATIVE EXPENSES, AS INDICATED ABOVE, WHICH CAN BE DIRECTLY TRACED TO SUCH ORDER.

WHILE THE ABOVE RELATES TO TELEPHONE AND TELEGRAPH CHARGES, THE SAME CONDITIONS PREVAIL WITH REFERENCE TO THE APPROPRIATION PRINTING AND BINDING, WAR DEPARTMENT. THEREFORE, IT IS DESIRED THAT THE FOLLOWING QUESTIONS BE ANSWERED:

(A) CAN TELEPHONE AND TELEGRAPH CHARGES INCIDENTAL TO AND NECESSARY IN CARRYING OUT WORK FOR OTHER DEPARTMENTS BE CHARGED AGAINST THE FUNDS MADE AVAILABLE FOR THE PERFORMANCE OF THE WORK?

(B) CAN PRINTING AND BINDING CHARGES INCIDENTAL TO AND NECESSARY IN CARRYING OUT WORK FOR OTHER DEPARTMENTS BE CHARGED AGAINST THE FUNDS MADE AVAILABLE FOR THE PERFORMANCE OF THE WORK?

(C) IF DIRECT CHARGES CANNOT BE MADE AS INDICATED IN A AND B ABOVE,CAN THE APPLICABLE APPROPRIATIONS OF THE WAR DEPARTMENT, NAMELY, SIGNAL SERVICE OF THE ARMY AND PRINTING AND BINDING, WAR DEPARTMENT, BE REIMBURSED FROM THE "WORKING FUND" WITH THE EXPENSES REFERRED TO ABOVE?

THE CITED ARMY ACT OF JUNE 5, 1920, 41 STAT. 975, PROVIDES AS FOLLOWS:

THAT ALL ORDERS OR CONTRACTS FOR THE MANUFACTURE OF MATERIAL PERTAINING TO APPROVED PROJECTS PLACED BEFORE JUNE 5, 1920, OR THEREAFTER WITH GOVERNMENT-OWNED ESTABLISHMENTS SHALL BE CONSIDERED AS OBLIGATIONS IN THE SAME MANNER AS PROVIDED FOR SIMILAR ORDERS PLACED WITH COMMERCIAL MANUFACTURERS, AND THE APPROPRIATIONS SHALL REMAIN AVAILABLE FOR THE PAYMENT OF THE OBLIGATIONS SO CREATED AS IN THE CASE OF CONTRACTS OR ORDERS WITH COMMERCIAL MANUFACTURERS.

THE NAVAL APPROPRIATION ACT OF JULY 1, 1922, 42 STAT. 812, CONTAINS THE FOLLOWING PROVISIONS TO LIKE EFFECT:

* * * THAT ALL ORDERS OR CONTRACTS FOR WORK OR MATERIAL, UNDER ESTABLISHMENTS, SHALL BE CONSIDERED AS OBLIGATIONS IN THE SAME MANNER AS PROVIDED FOR SIMILAR ORDERS OR CONTRACTS PLACED WITH PRIVATE CONTRACTORS, AND APPROPRIATIONS FOR SUCH WORK OR MATERIAL SHALL REMAIN AVAILABLE FOR PAYMENT THEREFOR AS IN THE CASE OF ORDERS OR CONTRACTS PLACED WITH PRIVATE CONTRACTORS.

SEE ALSO THE ACT OF JUNE 2, 1937, 50 STAT. 245.

THE LAW THUS AUTHORIZES THE NAVY DEPARTMENT TO PLACE ORDERS WITH THE WAR DEPARTMENT UNDER CERTAIN CIRCUMSTANCES FOR WORK TO BE DONE UNDER NAVY DEPARTMENT APPROPRIATIONS MADE THEREFOR AND ORDERS SO PLACED ARE TO BE CONSIDERED AS SUBSTANTIALLY THE SAME, SO FAR AS OBLIGATING THE FUNDS IS CONCERNED, AS CONTRACTS MADE BY THE NAVY DEPARTMENT WITH A PRIVATE CONTRACTOR FOR THE ACCOMPLISHMENT OF THE WORK.

ACCORDINGLY, ANY EXPENSES FOR TELEPHONE AND TELEGRAPH SERVICE OR PRINTING AND BINDING DIRECTLY INCIDENT TO THE PERFORMANCE OF THE WORK- - THAT IS, SUCH AS MIGHT HAVE BEEN INCURRED BY A PRIVATE CONTRACTOR IF THE NAVY DEPARTMENT HAD CONTRACTED FOR THE PERFORMANCE OF THE WORK INSTEAD OF PLACING AN ORDER THEREFOR WITH THE WAR DEPARTMENT--- ARE CHARGEABLE TO THE WORKING FUND AUTHORIZED UNDER THE PROVISIONS OF SECTION 601 OF THE ACT OF JUNE 30, 1932, 47 STAT. 417; BUT EXPENSES FOR SUCH SERVICES WHICH, IF THE WORK HAD BEEN PERFORMED BY CONTRACT, WOULD HAVE BEEN CHARGEABLE NOT TO THE APPROPRIATION FOR THE PARTICULAR WORK BUT TO THE NAVY DEPARTMENT'S ADMINISTRATIVE EXPENSE APPROPRIATIONS AVAILABLE FOR PRINTING AND BINDING AND FOR TELEPHONE AND TELEGRAPH SERVICE GENERALLY, MUST BE BORNE BY THE WAR DEPARTMENT'S ADMINISTRATIVE APPROPRIATIONS FOR SUCH SERVICES.