B-111086, AUGUST 29, 1952, 32 COMP. GEN. 124

B-111086: Aug 29, 1952

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VENDING MACHINES - DISPOSITION OF RECEIPTS FUNDS DERIVED FROM THE INSTALLATION AND OPERATION OF VENDING MACHINES ON GOVERNMENT-OWNED OR CONTROLLED PROPERTY ARE REQUIRED TO BE DEPOSITED INTO THE TREASURY OF THE UNITED STATES AS MISCELLANEOUS RECEIPTS UNDER THE PROVISIONS OF SECTION 3617. 1952: REFERENCE IS MADE TO YOUR LETTER OF JULY 28. CANDY HAVE BEEN INSTALLED IN CERTAIN OFFICES OF THE FEDERAL BUREAU OF INVESTIGATION OCCUPYING GOVERNMENT OWNED SPACE AND PRIVATE PROPERTY LEASED TO THE GOVERNMENT. THAT THE REMUNERATION RECEIVED FROM THE OPERATION THEREOF IS DEPOSITED BY THE PARTICULAR OFFICE IN ITS RECREATION FUND FOR THE PURPOSE OF SPONSORING EMPLOYEE ACTIVITIES IN ATHLETICS. AT PAGE 5 OF THE SAID REPORT IT WAS STATED: THE FIRST QUESTION WHICH HAS ENGAGED THE ATTENTION OF THE GENERAL ACCOUNTING OFFICE CONCERNS THE AUTHORITY TO WITHHOLD FROM THE TREASURY REVENUES.

B-111086, AUGUST 29, 1952, 32 COMP. GEN. 124

VENDING MACHINES - DISPOSITION OF RECEIPTS FUNDS DERIVED FROM THE INSTALLATION AND OPERATION OF VENDING MACHINES ON GOVERNMENT-OWNED OR CONTROLLED PROPERTY ARE REQUIRED TO BE DEPOSITED INTO THE TREASURY OF THE UNITED STATES AS MISCELLANEOUS RECEIPTS UNDER THE PROVISIONS OF SECTION 3617, REVISED STATUTES, AND MAY NOT BE USED TO FINANCE EMPLOYEE RECREATION AND WELFARE ACTIVITIES.

COMPTROLLER GENERAL WARREN TO THE ATTORNEY GENERAL, AUGUST 29, 1952:

REFERENCE IS MADE TO YOUR LETTER OF JULY 28, 1952, RELATIVE TO THE DISPOSITION OF FUNDS RECEIVED BY THE FEDERAL BUREAU OF INVESTIGATION IN CONNECTION WITH THE INSTALLATION OF VENDING MACHINES IN CERTAIN OF ITS DIVISIONAL OFFICES LOCATED THROUGHOUT THE UNITED STATES AND ITS POSSESSIONS.

YOUR LETTER STATES THAT VENDING MACHINES DISPENSING SUCH ITEMS AS CIGARETTES, COCA COLAS, AND CANDY HAVE BEEN INSTALLED IN CERTAIN OFFICES OF THE FEDERAL BUREAU OF INVESTIGATION OCCUPYING GOVERNMENT OWNED SPACE AND PRIVATE PROPERTY LEASED TO THE GOVERNMENT, AND THAT THE REMUNERATION RECEIVED FROM THE OPERATION THEREOF IS DEPOSITED BY THE PARTICULAR OFFICE IN ITS RECREATION FUND FOR THE PURPOSE OF SPONSORING EMPLOYEE ACTIVITIES IN ATHLETICS, AND IN PROVIDING FLOWERS, FRUITS, AND GIFTS FOR EMPLOYEES ON EXTENDED SICK LEAVE. HOWEVER, IN THE LIGHT OF THE REPORT OF THIS OFFICE TO THE CONGRESS OF AUGUST 10, 1949, B-45101, YOU REQUEST TO BE ADVISED WHETHER THE FUNDS DERIVED FROM THE INSTALLATION AND OPERATION OF THE VENDING MACHINES MAY CONTINUE TO BE SO UTILIZED BY THE SAID OFFICES, OR WHETHER SUCH FUNDS SHOULD BE DEPOSITED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS.

THE CITED REPORT OF AUGUST 10, 1949, REQUESTED THE ATTENTION OF THE CONGRESS TO THE IMPROPER DIVERSION OF A WIDE VARIETY OF SUBSTANTIAL SUMS OF MONEY, INCLUDING RECEIPTS DERIVED FROM THE INSTALLATION AND OPERATION OF AUTOMATIC COIN-OPERATED VENDING MACHINES, COMING INTO THE HANDS OF OFFICERS AND EMPLOYEES OF THE UNITED STATES BY REASON OF THE OPERATION OF VARIOUS OFFICIAL AND QUASI-OFFICIAL INCOME-PRODUCING ACTIVITIES IN THE SEVERAL DEPARTMENTS AND ESTABLISHMENTS OF THE GOVERNMENT. AT PAGE 5 OF THE SAID REPORT IT WAS STATED:

THE FIRST QUESTION WHICH HAS ENGAGED THE ATTENTION OF THE GENERAL ACCOUNTING OFFICE CONCERNS THE AUTHORITY TO WITHHOLD FROM THE TREASURY REVENUES, DONATIONS AND CONTRIBUTIONS, ACCRUING FROM ACTIVITIES CARRIED ON IN CONNECTION WITH THE TRANSACTION OF THE REGULAR BUSINESS OF THE GOVERNMENT. IT SEEMS TO ME TO BE SELF-EVIDENT THAT THESE FUNDS--- ARISING AS THEY DO FROM THE TRANSACTION OF THE BUSINESS OF THE GOVERNMENT AND USED, ACCORDING TO ADMINISTRATIVE OFFICERS, AS ADJUNCTS THERETO--- NECESSARILY ARE IMPRESSED WITH THE CHARACTER OF FUNDS RECEIVED FOR THE USE OF THE UNITED STATES. UNDER EXISTING LAW FUNDS RECEIVED FOR USE OF THE UNITED STATES GENERALLY ARE REQUIRED TO BE DEPOSITED IN THE TREASURY, TO BE DISBURSED THEREFROM ONLY IN ACCORDANCE WITH AUTHORITY GRANTED BY THE CONGRESS. I FIND NO EXPRESS OR CLEARLY IMPLIED EXCEPTION BY THE CONGRESS IN RESPECT OF THE QUESTIONABLE MATTERS BROUGHT TO LIGHT IN THIS REPORT. ACCORDINGLY, THE PRACTICE OF DIVERTING THE FUNDS FROM THE TREASURY TO VARIOUS "WELFARE" AND OTHER PURPOSES NOT AFFIRMATIVELY PRESCRIBED BY THE CONGRESS WOULD APPEAR TO BE OF DOUBTFUL LEGAL PROPRIETY AT BEST.

ELSEWHERE IN THE SAID REPORT THERE WAS POINTED OUT AND DISCUSSED THE PRACTICAL AND LEGAL ISSUES INVOLVED IN THE APPLICATION OF STATUTES REQUIRING THE DEPOSIT OF SUCH FUNDS INTO THE TREASURY OF THE UNITED STATES, AND THE USE OF PUBLIC PROPERTY AND FUNDS IN CONNECTION THEREWITH, AND, IN THAT REGARD, THERE WAS RECOGNIZED THE PLACE AND DESIRABILITY OF EMPLOYEE WELFARE AND RELATED ACTIVITIES IN THE GOVERNMENT SERVICE. THE CONGRESS, ACCORDINGLY, WAS URGED TO ENACT CLARIFYING LEGISLATION WHICH WOULD RESOLVE SUCH ISSUES, AND RECTIFY EXISTING UNSATISFACTORY CONDITIONS WITH RESPECT TO THE ACCOUNTING FOR, DISPOSITION, AND USE OF THE FUNDS INVOLVED. IN THAT CONNECTION, H.R. 6325, 81ST CONGRESS, ST SESSION, ENTITLED "A BILL TO PROVIDE FOR THE ESTABLISHMENT, OPERATION, AND FINANCIAL CONTROL OF INCOME-PRODUCING ACTIVITIES IN THE GOVERNMENT, NOT OTHERWISE SPECIFICALLY PROVIDED FOR BY LAW, AND FOR OTHER PURPOSES," WAS INTRODUCED AND REFERRED TO THE COMMITTEE ON EXPENDITURES IN THE EXECUTIVE DEPARTMENTS. THE BILL WAS NOT REPORTED OUT BY THE COMMITTEE.

ONE OF THE STATUTES CITED IN THE REPORT OF AUGUST 10, 1949, IS SECTION 3617, REVISED STATUTES, 31 U.S.C. 484, WHICH PROVIDES AS FOLLOWS:

THE GROSS AMOUNT OF ALL MONEYS RECEIVED FROM WHATEVER SOURCE FOR THE USE OF THE UNITED STATES, EXCEPT AS OTHERWISE PROVIDED IN SECTION 487 OF THIS TITLE, SHALL BE PAID BY THE OFFICER OR AGENT RECEIVING THE SAME INTO THE TREASURY, AT AS EARLY A DAY AS PRACTICABLE, WITHOUT ANY ABATEMENT OR DEDUCTION ON ACCOUNT OF SALARY, FEES, COSTS, CHARGES, EXPENSES, OR CLAIM OF ANY DESCRIPTION WHATEVER. BUT NOTHING HEREIN SHALL AFFECT ANY PROVISION RELATING TO THE *REVENUES OF THE POST OFFICE DEPARTMENT.

IT HAS BEEN THE CONSISTENT VIEW OF THE GENERAL ACCOUNTING OFFICE THAT FUNDS DERIVED FROM THE INSTALLATION AND OPERATION OF VENDING MACHINES, ON GOVERNMENT-OWNED OR CONTROLLED PROPERTY, ARE FUNDS RECEIVED "FOR THE USE OF THE UNITED STATES" WITHIN THE MEANING OF THAT PHRASE AS USED IN THE PROVISION OF LAW QUOTED ABOVE AND, AS SUCH, ARE REQUIRED TO BE DEPOSITED INTO THE TREASURY OF THE UNITED STATES AS MISCELLANEOUS RECEIPTS, IN THE ABSENCE OF EXPRESS STATUTORY AUTHORITY TO THE CONTRARY. NO EXPRESS PROVISION OF LAW TO THE CONTRARY WITH RESPECT TO THE RECEIPTS HERE INVOLVED HAS BEEN FOUND.

ACCORDINGLY, I HAVE NO ALTERNATIVE BUT TO ADVISE THAT THE FUNDS SO RECEIVED BY THE FEDERAL BUREAU OF INVESTIGATION FROM THE INSTALLATION OF VENDING MACHINES ARE REQUIRED TO BE DEPOSITED INTO THE TREASURY OF THE UNITED STATES AS MISCELLANEOUS RECEIPTS UNDER THE PROVISIONS OF SECTION 3617, REVISED STATUTES, SUPRA. ..END :