B-103077, MAY 16, 1951, 30 COMP. GEN. 453

B-103077: May 16, 1951

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IS AVAILABLE FOR FINANCING THE COSTS OF BUILDING CONSTRUCTION AND ALTERATIONS ONLY WHEN THE APPROPRIATION SOUGHT TO BE CHARGED WITH THE AMOUNT OF REIMBURSEMENT IS SPECIFICALLY OR IMPLIEDLY AVAILABLE FOR DEFRAYING SUCH COSTS. 1951: REFERENCE IS MADE TO YOUR LETTER DATED APRIL 23. AUTHORIZES THE CONSTRUCTION AND ALTERATION OF BUILDINGS DIRECTLY RELATED TO THE WORK FOR WHICH REIMBURSEMENT IS MADE WHEN THE WORK IS PERFORMED UNDER AN ADVANCE OF FUNDS FROM AN APPROPRIATION WHICH DOES NOT CONTAIN SPECIFIC AUTHORITY FOR BUILDING CONSTRUCTION AND ALTERATIONS. (2) AS TO WHETHER THE ANSWER TO QUESTION (1) WOULD BE AFFECTED WHEN THE EXPENDITURES FOR SUCH PURPOSES ARE MADE ON A DIRECT REIMBURSABLE BASIS RATHER THAN FROM AN ADVANCE OF FUNDS.

B-103077, MAY 16, 1951, 30 COMP. GEN. 453

WORKING CAPITAL FUNDS - AVAILABILITY FOR EXPENDITURE AND REIMBURSEMENT THE WORKING CAPITAL FUND ESTABLISHED BY THE ACT OF JUNE 29, 1950, AUTHORIZING EXPENDITURES ON A REIMBURSABLE BASIS FOR THE CONSTRUCTION AND ALTERATION OF BUILDINGS DIRECTLY RELATED TO THE ACTIVITIES OF THE NATIONAL BUREAU OF STANDARDS, IS AVAILABLE FOR FINANCING THE COSTS OF BUILDING CONSTRUCTION AND ALTERATIONS ONLY WHEN THE APPROPRIATION SOUGHT TO BE CHARGED WITH THE AMOUNT OF REIMBURSEMENT IS SPECIFICALLY OR IMPLIEDLY AVAILABLE FOR DEFRAYING SUCH COSTS.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF COMMERCE, MAY 16, 1951:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 23, 1951, REQUESTING DECISION (1) AS TO WHETHER THE ACT OF JUNE 29, 1950, PUBLIC LAW 583, ESTABLISHING A WORKING CAPITAL FUND FOR FINANCING THE ACTIVITIES OF THE NATIONAL BUREAU OF STANDARDS ON A REIMBURSABLE BASIS, AUTHORIZES THE CONSTRUCTION AND ALTERATION OF BUILDINGS DIRECTLY RELATED TO THE WORK FOR WHICH REIMBURSEMENT IS MADE WHEN THE WORK IS PERFORMED UNDER AN ADVANCE OF FUNDS FROM AN APPROPRIATION WHICH DOES NOT CONTAIN SPECIFIC AUTHORITY FOR BUILDING CONSTRUCTION AND ALTERATIONS, AND (2) AS TO WHETHER THE ANSWER TO QUESTION (1) WOULD BE AFFECTED WHEN THE EXPENDITURES FOR SUCH PURPOSES ARE MADE ON A DIRECT REIMBURSABLE BASIS RATHER THAN FROM AN ADVANCE OF FUNDS.

YOUR LETTER STATES THAT THE WORKING CAPITAL FUND WAS AUTHORIZED BY THE CONGRESS AFTER CONSIDERABLE STUDY AND INVESTIGATION BY THE DEPARTMENT OF COMMERCE, THE BUREAU OF THE BUDGET, AND THIS OFFICE WITH THE VIEW TO DEVELOPING AND INSTALLING A PROJECT COST ACCOUNTING SYSTEM FOR THE NATIONAL BUREAU OF STANDARDS, AND THAT THE LANGUAGE OF THE ACT PROVIDES NEW AUTHORITY FOR RESERVES FOR DEPRECIATION OF EQUIPMENT AND ACCRUED LEAVE AS WELL AS FOR BUILDING CONSTRUCTION AND ALTERATIONS. IT IS URGED, IN EFFECT, THAT THE LEGISLATIVE HISTORY OF THE PROVISION DISCLOSES THAT THE ADDITIONAL AUTHORITY WAS INTENDED TO OVERCOME THE EXISTING REQUIREMENT THAT SUCH ITEMS MUST BE SPECIFICALLY AUTHORIZED IN THE APPROPRIATION FROM WHICH REIMBURSEMENT IS MADE, OTHERWISE THE AUTHORIZING LANGUAGE WOULD HAVE BEEN UNNECESSARY AND WOULD NOT HAVE BEEN INCLUDED IN THE ACT.

THE ACT IN QUESTION, 64 STAT. 279, READS AS FOLLOWS:

FOR THE ESTABLISHMENT OF A WORKING CAPITAL FUND, TO BE AVAILABLE WITHOUT FISCAL YEAR LIMITATION, FOR EXPENSES NECESSARY FOR THE MAINTENANCE AND OPERATION OF THE NATIONAL BUREAU OF STANDARDS, INCLUDING THE FURNISHING OF FACILITIES AND SERVICES TO OTHER GOVERNMENT AGENCIES, NOT TO EXCEED $3,000,000. SAID FUNDS SHALL BE ESTABLISHED AS A SPECIAL DEPOSIT ACCOUNT AND SHALL BE REIMBURSED FROM APPLICABLE APPROPRIATIONS OF SAID BUREAU FOR THE WORK OF SAID BUREAU, AND FROM FUNDS OF OTHER GOVERNMENT AGENCIES FOR FACILITIES AND SERVICES FURNISHED TO SUCH AGENCIES PURSUANT TO LAW. REIMBURSEMENTS SO MADE SHALL INCLUDE HANDLING AND RELATED CHARGES; RESERVES FOR DEPRECIATION OF EQUIPMENT AND ACCRUED LEAVE; AND BUILDING CONSTRUCTION AND ALTERATIONS DIRECTLY RELATED TO THE WORK FOR WHICH REIMBURSEMENT IS MADE.

BY ITS TERMS AND IN THE LIGHT OF THE LEGISLATIVE HISTORY THEREOF, THIS PROVISION WAS DESIGNED GENERALLY TO SIMPLIFY AND IMPROVE ACCOUNTING OPERATIONS OF THE NATIONAL BUREAU OF STANDARDS AND SPECIFICALLY TO ENABLE THIS INSTALLATION AND OPERATION OF A PROJECT COST ACCOUNTING SYSTEM UNDER WHICH THERE WOULD BE CHARGED TO PROJECTS NOT ONLY THE DIRECT ITEMS OF COST BUT, IN ADDITION, THE INDIRECT CHARGES SPECIFICALLY NAMED IN THE LAST SENTENCE OF THE PROVISION. THE ACT AUTHORIZES THE INITIAL FINANCING UNDER THE WORKING CAPITAL FUND OF ALL ACTIVITIES OF THE BUREAU INCLUDING WORK PERFORMED FOR OTHER GOVERNMENT AGENCIES AND REQUIRE REIMBURSEMENT OF SUCH FUND FROM APPLICABLE APPROPRIATIONS OF THE BUREAU OR FROM FUNDS OF OTHER GOVERNMENT AGENCIES FOR FACILITIES OR SERVICES FURNISHED SUCH AGENCIES.

YOUR LETTER PLACES GREAT EMPHASIS ON THE SO-CALLED NEW AUTHORITY PROVIDING FOR RESERVES FOR DEPRECIATION OF EQUIPMENT AND ACCRUED LEAVE AND POINTS OUT THAT SUCH AUTHORITY IS NOT CONTAINED IN THE PARENT APPROPRIATIONS FROM WHICH REIMBURSEMENTS TO THE WORKING CAPITAL FUND ARE MADE. PROCEEDING FURTHER, IT IS CONTENDED THAT THE SO-CALLED NEW AUTHORITY TO HAVE THE FUND REIMBURSED FOR BUILDING CONSTRUCTION AND ALTERATIONS DIRECTLY RELATED TO THE WORK FOR WHICH REIMBURSEMENT IS MADE AUTHORIZES THE CHARGING OF APPROPRIATIONS NOT CONTAINING THE AUTHORITY REQUIRED BY 41 U.S.C. 12. SUCH SECTION 12 PROVIDES THAT NO CONTRACT SHALL BE ENTERED INTO FOR THE ERECTION OF A PUBLIC BUILDING OR ANY PUBLIC IMPROVEMENT WHICH SHALL BIND THE GOVERNMENT TO PAY A LARGER SUM OF MONEY THAN THE AMOUNT IN THE TREASURY APPROPRIATED FOR THAT SPECIFIC PURPOSE.

WITH RESPECT TO RESERVES FOR DEPRECIATION OF EQUIPMENT THIS OFFICE HELD IN DECISION OF JULY 29, 1942, 22 COMP. GEN. 74--- QUOTING FROM THE SYLLABUS---

THERE MAY BE INCLUDED IN THE "ACTUAL COST" TO BE PAID BY ONE GOVERNMENT AGENCY TO ANOTHER FOR SERVICES RENDERED UNDER AUTHORITY OF SECTION 601 OF THE ACT OF JUNE 30, 1932, AN AMOUNT REPRESENTING INDIRECT, OR "OVERHEAD," EXPENSES, COMMONLY RECOGNIZED AS ELEMENTS OF COST, SUCH AS DEPRECIATION, MAINTENANCE, GENERAL OFFICE EXPENSE, ETC. * * *

AS TO RESERVES FOR ACCRUED LEAVE, THE QUESTION OF WHETHER THE VALUE OF CREDIT FOR LEAVE WITH PAY AS IT ACCRUES IS FOR INCLUSION AS AN ITEM OF COST WAS CONSIDERED IN DECISION OF JANUARY 14, 1938, 17 COMP. GEN. 571, AND IT WAS HELD---

AS LEAVE WITH PAY IS NOW A MATTER OF RIGHT BY STATUTE (ACTS OF MARCH 14, 1936, 49 STAT. 1161 AND 1162), IT IS PROPER TO EXTEND THE RULE STATED IN DECISION OF DECEMBER 11, 1934, SUPRA, TO AUTHORIZE THE VALUE OF SUCH LEAVE CREDIT AS IT ACCRUES TO BE INCLUDED AS AN ITEM OF COST WHEN ADJUSTING THE COST BETWEEN FEDERAL AGENCIES FOR SERVICES RENDERED BY THE PERSONNEL OF ONE AGENCY FOR ANOTHER AGENCY REQUIRING THE REIMBURSEMENT OF APPROPRIATIONS, PURSUANT TO THE PROCEDURE AUTHORIZED BY SECTION 601 OF THE ACT OF JUNE 30, 1932, SUPRA.

THUS, IT IS APPARENT THAT REIMBURSEMENT FOR DEPRECIATION OF EQUIPMENT AND ACCRUED LEAVE IS NOT A NOVEL PROPOSITION. LIKEWISE, REIMBURSEMENT OF CONSTRUCTION COSTS FROM APPROPRIATIONS CONTAINING CONSTRUCTION AUTHORITY IS NOT NEW. HAVING IN MIND THAT THE CONGRESS IN ENACTING THE LEGISLATION UNDER CONSIDERATION CONCERNED PRIMARILY WITH SIMPLIFYING AND IMPROVING ACCOUNTING OPERATIONS OF THE BUREAU, IT REASONABLY MAY NOT BE CONCLUDED THAT IT WAS INTENDED TO NULLIFY THE PROVISIONS OF SECTION 12, TITLE 41, U.S.C. SUPRA, WHEN WORK FOR ANOTHER AGENCY WAS PERFORMED BY THE BUREAU. THE LEGISLATIVE HISTORY OF THE STATUTE UNDER CONSIDERATION INDICATES THAT, UNDER PRIOR ACCOUNTING PRACTICES, THE BUREAU DID NOT SET UP RESERVES FOR DEPRECIATION OF EQUIPMENT AND ACCRUED LEAVE AS SUCH. NEVERTHELESS, AS HEREINBEFORE INDICATED, SUCH ITEMS WERE PROPER FOR INCLUSION IN ARRIVING AT THE ACTUAL COST OF A PROJECT. HENCE, IT IS MORE REASONABLE TO ASSUME THAT, IN ESTABLISHING THE NEW ACCOUNTING DEVICE--- WORKING CAPITAL FUND--- THE CONGRESS, IN ORDER TO ASSURE THAT THE FUND WOULD BE PROPERLY REIMBURSED, INCLUDED SUCH ITEMS IN THE LEGISLATION IN AN ABUNDANCE OF CAUTION.

IT WOULD APPEAR PERTINENT TO NOTE AT THIS POINT THAT, IN PROVIDING AUTHORITY FOR CERTAIN FUNCTIONS AND ACTIVITIES OF THE DEPARTMENT OF COMMERCE, THE CONGRESS, IN PUBLIC LAW 618, APPROVED JULY 21, 1950, 64 STAT. 371, AUTHORIZED CONSTRUCTION OF MINOR BUILDINGS AND OTHER FACILITIES OF THE BUREAU BUT WITH THE PROVISO:

THAT NO IMPROVEMENT SHALL BE MADE NOR SHALL ANY BUILDING BE CONSTRUCTED UNDER THIS AUTHORITY AT A COST IN EXCESS OF $25,000, UNLESS SPECIFIC PROVISION IS MADE THEREFOR IN THE APPROPRIATION CONCERNED.

WITH SUCH A RECENT EXPRESSION OF THE CONGRESS LIMITING COSTS OF BUILDINGS CONSTRUCTED FROM FUNDS APPROPRIATED TO THE BUREAU, IT SEEMS INCONCEIVABLE THAT THE CONGRESS INTENDED BY PUBLIC LAW 583 TO PERMIT APPROPRIATIONS OF OTHER AGENCIES, NOT OTHERWISE AVAILABLE FOR THE CONSTRUCTION OF BUILDINGS, TO BE CHARGED THEREWITH, WITHOUT REGARD TO LIMITATION OF COST, MERELY BY VIRTUE OF THE FACT THAT OTHER WORK WAS BEING PERFORMED BY THE BUREAU CHARGEABLE TO THE APPROPRIATIONS OF THE AGENCIES.

ACCORDINGLY, IN VIEW OF THE FOREGOING, IT MUST BE CONCLUDED THAT THE WORKING CAPITAL FUND MAY BE REIMBURSED THE COSTS OF BUILDING CONSTRUCTION AND ALTERATIONS ONLY WHEN THE APPROPRIATION SOUGHT TO BE CHARGED IS SPECIFICALLY OR IMPLIEDLY AVAILABLE FOR DEFRAYING SUCH COSTS. SEE 10 COMP. GEN. 140.

IN CONNECTION WITH THE BROAD GENERAL QUESTION RAISED IN YOUR LETTER, REFERENCE IS MADE TO A PROPOSED ADDITION TO BUILDING NO. 84, WHICH HAS BEEN ADMINISTRATIVELY DETERMINED TO BE NECESSARY TO CARRY ON A RESEARCH PROGRAM, THE ULTIMATE COST OF WHICH IS TO BE BORNE BY THE APPROPRIATIONS " ORDINANCE SERVICE AND SUPPLIES, ARMY, 1951" AND " RESEARCH AND DEVELOPMENT, AIR FORCE," NEITHER OF WHICH CARRIES SPECIFIC AUTHORITY FOR THE CONSTRUCTION OF BUILDINGS OR ADDITIONS TO EXISTING BUILDINGS. SHOWING HAS BEEN MADE THAT SAID APPROPRIATIONS WOULD BE IMPLIEDLY AVAILABLE TO THE SERVICE CONCERNED IF THE RESEARCH PROGRAM WERE CONDUCTED BY SUCH SERVICE. HENCE, IT CANNOT BE DETERMINED THAT THE APPROPRIATIONS ARE AVAILABLE FOR REIMBURSEMENT TO THE WORKING CAPITAL FUND.

THE CONCLUSIONS HEREINBEFORE REACHED WOULD NOT BE AFFECTED BY THE ACCOUNTING STATUS OF THE FUNDS AT THE TIME OF REIMBURSEMENT ACTION.