A-99615, DECEMBER 12, 1938, 18 COMP. GEN. 539

A-99615: Dec 12, 1938

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APPROPRIATIONS - AVAILABILITY - CREDIT REPORTS ON PROSPECTIVE EMPLOYEES APPROPRIATED MONEYS ARE NOT AVAILABLE FOR OBTAINING CREDIT REPORTS ON PROSPECTIVE GOVERNMENT EMPLOYEES IN THE ABSENCE OF SPECIFIC AUTHORITY OF LAW. IS AS FOLLOWS: THE RECENT EMPHASIS UPON PERSONNEL POLICIES AND PROBLEMS OF THE FEDERAL GOVERNMENT LOOKING TOWARD AN ENLARGED AND BETTER DEFINED AND ORGANIZED CAREER SERVICE FOR THE LARGE MAJORITY OF FEDERAL OFFICERS AND EMPLOYEES HAS BROUGHT TO THE FOREGROUND. THE IMPERATIVE NECESSITY OF FILLING GOVERNMENTAL POSITIONS WITH APPOINTEES WHO ARE NOT ONLY QUALIFIED FOR THE RESPECTIVE JOBS FROM A STANDPOINT OF EDUCATION AND TECHNICAL TRAINING. CHARACTER ARE ABOVE REPROACH. SUCH A SAFEGUARD IS PARTICULARLY IMPORTANT IN SO FAR AS IT RELATES TO APPLICANTS WHO ARE BEING CONSIDERED FOR APPOINTMENT TO FIDUCIARY POSITIONS OR POSITIONS INVOLVING ANY MEASURABLE DEGREE OF RESPONSIBILITY.

A-99615, DECEMBER 12, 1938, 18 COMP. GEN. 539

APPROPRIATIONS - AVAILABILITY - CREDIT REPORTS ON PROSPECTIVE EMPLOYEES APPROPRIATED MONEYS ARE NOT AVAILABLE FOR OBTAINING CREDIT REPORTS ON PROSPECTIVE GOVERNMENT EMPLOYEES IN THE ABSENCE OF SPECIFIC AUTHORITY OF LAW. DECISIONS A-87355, A-88301, AND A-90362, DATED JULY 8, AUGUST 21, AND NOVEMBER 13, 1937, RESPECTIVELY, DISTINGUISHED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, DECEMBER 12, 1938:

YOUR LETTER OF NOVEMBER 22, 1938, IS AS FOLLOWS:

THE RECENT EMPHASIS UPON PERSONNEL POLICIES AND PROBLEMS OF THE FEDERAL GOVERNMENT LOOKING TOWARD AN ENLARGED AND BETTER DEFINED AND ORGANIZED CAREER SERVICE FOR THE LARGE MAJORITY OF FEDERAL OFFICERS AND EMPLOYEES HAS BROUGHT TO THE FOREGROUND, IN A MORE IMPRESSIVE MANNER THAN EVER BEFORE, THE IMPERATIVE NECESSITY OF FILLING GOVERNMENTAL POSITIONS WITH APPOINTEES WHO ARE NOT ONLY QUALIFIED FOR THE RESPECTIVE JOBS FROM A STANDPOINT OF EDUCATION AND TECHNICAL TRAINING, BUT WHOSE EMPLOYMENT HISTORY, FINANCIAL INTEGRITY, PERSONAL HABITS, AND CHARACTER ARE ABOVE REPROACH. SUCH A SAFEGUARD IS PARTICULARLY IMPORTANT IN SO FAR AS IT RELATES TO APPLICANTS WHO ARE BEING CONSIDERED FOR APPOINTMENT TO FIDUCIARY POSITIONS OR POSITIONS INVOLVING ANY MEASURABLE DEGREE OF RESPONSIBILITY, IT IS NOT OVERSTATEMENT TO ASSERT THAT THE WELFARE OF THE NATION IS TO A LARGE EXTENT IN THE HANDS OF ITS CIVIL SERVANTS AND THAT THEY, THEREFORE, SHOULD BE CHOSEN WITH THE MOST SCRUPULOUS CARE POSSIBLE. OF THE NUMBER OF APPOINTMENTS MADE IN THE DEPARTMENT OF AGRICULTURE FOR THE FISCAL YEAR ENDING JUNE 30, 1938, THE DIRECTOR OF PERSONNEL HAS ESTIMATED THAT APPROXIMATELY 5,000 APPOINTMENTS WERE MADE TO POSITIONS INVOLVING SUCH A DEGREE OF TRUST AND RESPONSIBILITY AS TO WARRANT, IF NOT DEMAND, THE MOST ACCURATE KNOWLEDGE OBTAINABLE REGARDING THOSE PERTINENT FEATURES OF AN APPLICANT'S PERSONAL HISTORY, ETC., THAT ARE NOT DISCLOSED UPON THE PAPERS IN HIS FILE. IN ORDER TO OVERCOME THE SHORTCOMINGS OF EXISTING GOVERNMENTAL FACILITIES FOR VERIFYING THE SUITABILITY FOR EMPLOYMENT OF PROSPECTIVE APPOINTEES IN THIS DEPARTMENT, THE DIRECTOR OF PERSONNEL HAS PROPOSED THAT SUCH AGENCIES AS THE RETAIL CREDIT COMPANY AND DUNN AND BRADSTREET BE EMPLOYED ON A COMPETITIVE BASIS, AND OTHERWISE IN FULL COMPLIANCE WITH THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES, TO INVESTIGATE SUCH PROSPECTIVE APPOINTEES IN ORDER TO AUTHENTICATE THEIR SUITABILITY FOR EMPLOYMENT.

ALTHOUGH THE DIRECTOR WOULD LIKE TO BE IN A POSITION TO SECURE INVESTIGATION REPORTS ON ANY AND ALL TYPES OF EMPLOYEES, IF OCCASION WARRANTED, HE CONCEDES THAT IT WOULD NOT BE INDISPENSABLY NECESSARY TO SECURE SUCH DETAILED REPORTS ON APPOINTEES TO MINOR POSITIONS, SUCH AS MESSENGERS, TYPISTS, STENOGRAPHERS, CLERKS, MECHANICS, AND LABORERS. POINTS OUT, HOWEVER, THAT WITH ONLY THE LIMITED INVESTIGATION FACILITIES OF THE DEPARTMENT AT ITS DISPOSAL, IT HAS BEEN POSSIBLE TO INVESTIGATE BUT A COMPARATIVELY SMALL NUMBER OF PERSONS RECOMMENDED FOR APPOINTMENT IN THE DEPARTMENT TO POSITIONS OF TRUST AND RESPONSIBILITY. THE SIGNIFICANT FINDING HAS BEEN MADE, IN THIS CONNECTION, THAT OF THE PERSONS INVESTIGATED, A CONSIDERABLE NUMBER HAVE BEEN FOUND, SOLELY BY VIRTUE OF SUCH INVESTIGATION, EITHER NOT TO BE QUALIFIED, AS REPRESENTED BY EXISTING DATA SUBMITTED BY THE APPLICANT HIMSELF, FOR THE POSITION IN QUESTION, OR TO BE ABSOLUTELY UNDESIRABLE. BASING HIS ESTIMATES ON LAST YEAR'S APPOINTMENT REGISTER, THE DIRECTOR STATES THAT THE DEPARTMENT AS A WHOLE WOULD PROBABLY NOT REQUIRE MORE THAN 5,000 REPORTS PER YEAR AND ARGUES THAT IT WOULD BE FAR MORE ECONOMICAL FROM THE STANDPOINT OF THE GOVERNMENT TO HAVE SUCH REPORTS FURNISHED, SUBJECT TO STRICT SPECIFICATIONS, BY CONCERNS WHO ARE EQUIPPED TO SUPPLY THEM, RATHER THAN TO ATTEMPT TO SECURE SUCH INFORMATION THROUGH ALREADY OVERWORKED AND UNDERSTAFFED DEPARTMENTAL OR OTHER GOVERNMENTAL SOURCES. ON THE BASIS OF 5,000 INVESTIGATION REPORTS PER YEAR, THE TOTAL PER ANNUM EXPENSE FOR THIS PURPOSE PROBABLY WOULD NOT EXCEED $10,000. IT IS BELIEVED THAT THIS AMOUNT IS MUCH LESS THAN THE COST THAT WOULD ARISE FROM THE FURNISHING OF THE REPORTS BY THE DEPARTMENT OF AGRICULTURE OR OTHER GOVERNMENT AGENCIES.

FOR YOUR INFORMATION, IT MIGHT BE STATED THAT THE PROPOSAL OUTLINED ABOVE HAS BEEN PRESENTED TO THE CIVIL SERVICE COMMISSION, WHICH ADVISED THE DEPARTMENT, ON AUGUST 18, THAT THE COMMISSION SEES NO OBJECTION TO THE DEPARTMENT'S PURSUING THE COURSE SUGGESTED. THERE ARE, HOWEVER, CERTAIN ANGLES OF THE QUESTION WHICH WE BELIEVE WARRANT, IF NOT DEMAND, OUR SEEKING ADVICE FROM YOUR OFFICE BEFORE PUTTING THE PLAN INTO OPERATION. IN THE FIRST PLACE, THERE IS THE QUESTION OF PERSONAL SERVICES. WE WONDER WHETHER, IN VIEW OF YOUR DECISIONS COVERING THE GENERAL PROPOSITION OF SECURING PERSONAL SERVICES BY CONTRACT, YOU WOULD FEEL THAT THE TYPE OF SERVICES OUTLINED ABOVE CONSTITUTES A FURTHER EXCEPTION TO THE GENERAL RULE. IT IS SUGGESTED THAT THE MATTER CAN BE VIEWED AS THE PURCHASE OF A SUPPLY OR MATERIAL, I.E., THE INVESTIGATION REPORTS, AND NOT THE SECURING OF PERSONAL SERVICES. THIS IS APPARENTLY THE STAND WHICH YOU HAVE TAKEN HERETOFORE ON SIMILAR MATTERS.

IN THIS CONNECTION, YOUR ATTENTION IS INVITED TO THREE DECISIONS WHICH YOU HAVE ALREADY RENDERED UPON CERTAIN ASPECTS OF THE SAME QUESTION AS IS INVOLVED IN THIS SUBMISSION. IN JUNE, 1937, THIS DEPARTMENT SOUGHT ADVICE AS TO WHETHER THE NATURE OF APPOINTMENTS TO BE MADE UNDER THE COMMODITY EXCHANGE ACT, INVOLVING, AS THEY DO, A HIGH DEGREE OF TRUST AND RESPONSIBILITY IN THE PERFORMANCE OF FUNCTIONS WHERE TEMPTATION IS RIFE, PLUS THE FACT THAT RELATIVELY FEW PERSONS NOT HITHERTO CONNECTED WITH PRIVATE EXCHANGES, ETC., WERE ACQUAINTED WITH THIS TYPE OF BUSINESS, PLUS THE FACT THAT ONLY AN OUTLAY OF APPROXIMATELY $100 WOULD BE MADE FOR MAKING SUCH INVESTIGATIONS IN THIS PARTICULAR AGENCY, PLUS THE FACT THAT THE APPROPRIATION FOR CARRYING THE ACT INTO EFFECT WAS BROADLY WORDED, WOULD JUSTIFY THE USE OF THAT PARTICULAR APPROPRIATION FOR THE PURPOSE OF MAKING INVESTIGATIONS OF THE PROSPECTIVE APPOINTEES ON A CONTRACT BASIS. IN YOUR REPLY OF JULY 8, 1937 (A-87355), YOU STATED THAT:

"IN VIEW OF THE PROVISIONS OF THE APPROPRIATION AND THE REPRESENTATIONS MADE IN YOUR LETTER, THIS OFFICE IS NOT REQUIRED TO OBJECT TO THE PROPOSED EXPENDITURE OF APPROXIMATELY $100 UNDER THE APPROPRIATION, SUPRA, FOR THE PROCUREMENT OF PERSONAL HISTORY REPORTS ON THE APPLICANTS REFERRED TO IN YOUR LETTER FOR THE PURPOSES THEREIN STATED.'

WE DO NOT CONSTRUE THIS DECISION AS A BLANKET APPROVAL FOR THE USE OF ANY NUMBER OR ALL APPROPRIATIONS OF THE DEPARTMENT FOR THE PURPOSE OF CONDUCTING, ON A COMMERCIAL BASIS, THE DESIRED INVESTIGATIONS, INASMUCH AS THE CONTEXT OF THE LETTER FROM THIS DEPARTMENT ELICITING YOUR DECISION WAS BASED ON A PECULIAR SITUATION. HOWEVER, IT IS BELIEVED THAT MANY OF THE SAME ARGUMENTS ADVANCED WITH RESPECT TO THE DESIRABILITY OF SECURING INVESTIGATIONS COVERING APPOINTEES UNDER THE COMMODITY EXCHANGE ACT ARE EQUALLY APPLICABLE TO APPOINTEES IN ALL OTHER BUREAUS AND AGENCIES OF THE DEPARTMENT. IN CONSIDERING OUR PRESENT SUBMISSION, WE SHALL ASK YOU TO BEAR THIS SALIENT POINT IN MIND AND TO MAKE A CROSS-REFERENCE TO THOSE ARGUMENTS.

IN A DECISION OF NOVEMBER 13, 1937, TO THE SECRETARY OF AGRICULTURE (A- 90362), WITH REFERENCE TO PURCHASING FINANCIAL OR CREDIT REPORTS FROM NATIONALLY-KNOWN CREDIT COMPANIES, AND ALSO RELATING TO THE COMMODITY EXCHANGE ACT, YOU STATED THAT:

"IF IT BE ADMINISTRATIVELY DETERMINED THAT FINANCIAL OR CREDIT REPORTS ARE NECESSARY TO THE ENFORCEMENT OF THE COMMODITY EXCHANGE ACT, THIS OFFICE WILL NOT BE REQUIRED TO OBJECT TO THE USE OF THAT APPROPRIATION FOR SUCH PURPOSES SUBJECT TO COMPLIANCE WITH THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES, AS TO COMPETITION, WHENEVER PRACTICABLE.'

IN THIS DECISION YOU APPARENTLY GO ONE STEP FARTHER THAN IN THE DECISION OF JULY 8, SUPRA, AND RECOGNIZE THE FORCE AND EFFECT OF AN ADMINISTRATIVE DETERMINATION WITH RESPECT TO THE PURCHASE OF THE REPORTS.

IN THE DECISION OF AUGUST 21, 1937, TO THIS DEPARTMENT (A-88301), INVOLVING A QUESTION AS TO WHETHER LOCAL CREDIT AGENCIES COULD BE REQUIRED TO REPORT ON THE FINANCIAL INTEGRITY OF PROSPECTIVE OCCUPANTS OF RESETTLEMENT PROJECTS, YOU HELD THAT:

"UNDER THE CIRCUMSTANCES STATED THIS OFFICE WILL NOT BE REQUIRED TO OBJECT TO CONTRACTS * * * WITH LOCAL CREDIT AGENCIES FOR FURNISHING CREDIT REPORTS UPON INDIVIDUALS WHO MAY BE SELECTED TO OCCUPY RESETTLEMENT UNITS, PROVIDED SUCH CONTRACTS ARE LET AFTER COMPETITION IN ACCORDANCE WITH SECTION 3709, REVISED STATUTES, AND PAYMENTS ARE NOT MADE IN ADVANCE OF THE RECEIPT OF THE SERVICES CONTRACTED FOR.'

ALTHOUGH BOTH OF THE DECISIONS NUMBERED A-90362 AND A-88301 INDICATE THE LIBERALITY OF YOUR VIEW WITH RESPECT TO THE MATTER, AND PARTICULARLY WITH REFERENCE TO THE MATTER OF CONTRACTING FOR PERSONAL SERVICES, WE ARE NOT WILLING TO CONSTRUE THE SOMEWHAT GUARDED LANGUAGE YOU USE SO AS TO WARRANT IMMEDIATE PROMULGATION OF THE PROPOSAL OUTLINED IN THE FOREPART OF THIS SUBMISSION. BUT, WE REPEAT, THE NECESSITOUS CIRCUMSTANCES INHERENT IN THE REQUESTS THAT GAVE RISE TO THE FOREGOING FAVORABLE DECISIONS ARE ALSO PART AND PARCEL, TO A LARGE DEGREE, OF THE APPOINTMENT SITUATION IN THE DEPARTMENT AS A WHOLE.

THE SECOND PHASE OF THE QUESTION INVOLVES THE AVAILABILITY OF DEPARTMENTAL APPROPRIATIONS FOR DEFRAYING EXPENSES INCIDENT TO THE PLAN. TO COME DIRECTLY TO THE POINT, YOUR ADVICE IS SOUGHT WITH RESPECT TO THE AVAILABILITY OF THE VARIOUS APPROPRIATIONS OF THE DEPARTMENT FOR THE EMPLOYMENT OF PERSONS AND MEANS IN THE DISTRICT OF COLUMBIA AND ELSEWHERE FOR THE PURPOSE OUTLINED. AN ENDORSEMENT OF THE USE OF SUCH APPROPRIATIONS BY YOU WOULD MAKE IT POSSIBLE FOR US TO PRORATE THE EXPENSE OF SECURING THE INVESTIGATORY REPORTS AMONG THE VARIOUS BUREAUS AND AGENCIES OF THE DEPARTMENT, BASED ON THE NUMBER OF REPORTS REQUIRED BY EACH. IT IS, THEREFORE, HOPED THAT YOU WILL AGREE WITH THIS DEPARTMENT IN ITS DESIRE TO SAFEGUARD THE INTERESTS OF GOOD GOVERNMENT AND RECOGNIZE THE VIRTUE, IF NOT THE NECESSITY, OF FOLLOWING THE PROCEDURE OUTLINED WITH RESPECT TO ALL BUREAUS AND AGENCIES OF THE DEPARTMENT, AND NOT RESTRICT OUR AUTHORITY FOR SECURING THE DESIRED REPORTS TO A LIMITED NUMBER OF THE DEPARTMENTAL ORGANIZATIONS.

ASSUMING (1) THAT THIS DEPARTMENT CAN RESOLVE ANY DIFFICULTIES ENCOUNTERED WITH THE CIVIL SERVICE COMMISSION OVER THE OPERATION OF SUCH A PLAN, AND (2) THAT IT IS POSSIBLE FOR US TO DRAFT SPECIFICATIONS FOR COMPETITIVE BIDDING IN SUCH A MANNER AS TO GIVE PROSPECTIVE BIDDERS A RELIABLE ESTIMATE OF THE AMOUNT OF SERVICE TO BE RENDERED UNDER THE PROPOSED CONTRACT, MAY WE ASK YOU TO ADVISE THIS DEPARTMENT WHETHER THE PLAN OUTLINED HEREIN MEETS WITH YOUR APPROVAL AND WHETHER THE DESIGNATED APPROPRIATIONS ARE AVAILABLE FOR MAKING PAYMENTS TO THE CONTRACTING PARTIES FOR SUPPLYING THE INVESTIGATION REPORTS.

THIS OFFICE IS FULLY IN ACCORD WITH YOUR STATEMENTS REGARDING THE DESIRABILITY OF APPOINTING TO POSITIONS IN YOUR DEPARTMENT ONLY PERSONS OF RELIABLE CHARACTER AND INTEGRITY. THAT SHOULD BE THE GOAL SOUGHT NOT ONLY IN YOUR DEPARTMENT BUT THROUGHOUT THE GOVERNMENT SERVICE. IT IS NOT BELIEVED, HOWEVER, THAT THE METHOD YOU SUGGEST IS THE SOLUTION TO THE PROBLEM.

THE DECISION TO YOU OF JULY 8, 1937, A-87355, RELATED TO A VERY LIMITED CLASS OF EMPLOYEES AND WAS BASED MAINLY ON THE EXCEPTIONAL CIRCUMSTANCES REPORTED IN THAT CASE. IT DID NOT CONTEMPLATE THE ESTABLISHMENT OF A GENERAL PRACTICE OF THAT NATURE, IT BEING SPECIFICALLY STATED IN YOUR SUBMISSION---

AS IT IS NOT BELIEVED THAT THE PECULIAR CHARACTER OF THE SITUATION CONFRONTING THE COMMODITY EXCHANGE ADMINISTRATION IS COMPARABLE TO THAT OF ANY OTHER AGENCY OF THE GOVERNMENT, WITH THE EXCEPTION OF THE SECURITIES AND EXCHANGE COMMISSION, YOUR PROMPT APPROVAL OF THIS PROPOSED ACTION WILL BE HIGHLY APPRECIATED.

THE OTHER DECISIONS REFERRED TO IN YOUR SUBMISSION SANCTIONING EXPENDITURES OF PUBLIC FUNDS FOR CREDIT REPORTS DID NOT RELATE TO GOVERNMENT EMPLOYEES BUT WERE CONFINED TO REPORTS CONCERNING PERSONS WITH WHOM THE UNITED STATES ANTICIPATED FINANCIAL DEALINGS, SUCH AS MAKING LOANS, ETC.

IT IS UNDERSTOOD THAT REPORTS FURNISHED BY CREDIT COMPANIES RELATE ONLY TO MATTERS DIRECTLY AFFECTING THE CREDIT OR FINANCIAL RESPONSIBILITY OF THE PERSONS REPORTED ON. IN THE PAST, IT HAS BEEN THE PRACTICE WHEN APPOINTING PERSONS IN THE GOVERNMENT SERVICE TO POSITIONS INVOLVING ACCOUNTABILITY FOR PUBLIC FUNDS TO REQUIRE SUCH PERSONS TO FURNISH OFFICIAL BONDS AT THEIR OWN EXPENSE, WHICH BONDS HAVE FOR THEIR PURPOSE THE SAME END AS THE PROCURING OF CREDIT REPORTS, THAT IS, TO SAVE THE GOVERNMENT FROM FINANCIAL LOSS DUE TO THE FAILURE OF THE EMPLOYEE TO PROPERLY ACCOUNT FOR FUNDS ENTRUSTED TO HIM IRRESPECTIVE OF THE REASON. -58872, SEPTEMBER 4, 1936. THE NECESSITY FOR TRANSFERRING THE COST OF THE BONDS TO THE GOVERNMENT BY SUBSTITUTING THEREFOR CREDIT REPORTS OBTAINED FROM APPROPRIATED FUNDS IS NOT APPARENT. THE CONGRESS BY PROHIBITING THE PAYMENT OF PREMIUMS ON BONDS FROM APPROPRIATED FUNDS, SEE ACT AUGUST 5, 1909, 36 STAT. 125, HAS INDICATED ITS INTENTION THAT EMPLOYEES APPOINTED TO POSITIONS OF TRUST SHOULD QUALIFY THEREFOR AT THEIR OWN EXPENSE. THE CIRCUMSTANCES I HAVE TO ADVISE THAT THERE APPEARS NO AUTHORITY OF LAW FOR EXPENDING APPROPRIATED FUNDS FOR OBTAINING CREDIT REPORTS ON PROSPECTIVE EMPLOYEES FOR YOUR DEPARTMENT UNLESS AND UNTIL SUCH EXPENDITURES ARE SPECIFICALLY AUTHORIZED BY THE CONGRESS.