B-114319, JUNE 23, 1953, 32 COMP. GEN. 563

B-114319, JUNE 23, 1953, 32 COMP. GEN. 563

IMPREST OR PETTY CASH FUNDS - AVAILABILITY FOR PAYMENT OF C.O.D. PURCHASES INASMUCH AS SUPPLIES PURCHASED ON A C.O.D. MAIL BASIS ARE RECEIVED SIMULTANEOUSLY WITH PAYMENT, THE USE OF IMPREST OR PETTY CASH FUNDS FOR PAYMENT OF C.O.D. MAIL CHARGES--- $25 OR LESS--- AT THE TIME OF THE RECEIPT OF THE PARCELS AND PRIOR TO AN EXAMINATION OF THE CONTENTS NEED NOT BE REGARDED AS A VIOLATION OF THE ADVANCE PAYMENT PROHIBITION IN SECTION 3648, REVISED STATUTES, NOTWITHSTANDING LIABILITIES AND RESTRICTIONS PLACED ON THE ADDRESSEE OF C.O.D. MAIL BY POSTAL REGULATIONS, PROVIDED THE PURCHASES ARE MADE PURSUANT TO THE JOINT REGULATIONS FOR SMALL PURCHASES UTILIZING IMPREST FUNDS WHICH PERMIT USE OF THE C.O.D. PROCUREMENTS.

COMPTROLLER GENERAL WARREN TO THE ADMINISTRATOR OF VETERANS AFFAIRS, JUNE 23, 1953:

REFERENCE IS MADE TO LETTER, DATED MARCH 18, 1953, FROM THE DEPUTY ADMINISTRATOR RAISING CERTAIN QUESTIONS WITH RESPECT TO THE USE OF C.O.D. MAIL FOR THE PURCHASE OF SUPPLIES, MATERIALS AND EQUIPMENT AND THE RELATIONSHIP OF THIS PROCUREMENT METHOD TO THE USE OF IMPREST OR PETTY CASH FUNDS IN MAKING PAYMENTS THEREFOR.

IT IS STATED THAT THE VETERANS ADMINISTRATION PROPOSES TO UTILIZE THE C.O.D. METHOD OF PROCUREMENT IN CERTAIN OF THE FIELD INSTALLATIONS- - WHERE THE AMOUNT INVOLVED IN A SINGLE TRANSACTION DOES NOT EXCEED $25 -- AS AUTHORIZED UNDER THE JOINT REGULATIONS FOR SMALL PURCHASES UTILIZING IMPREST FUNDS, DATED MARCH 10, 1952, ISSUED BY THE GENERAL SERVICES ADMINISTRATION, TREASURY DEPARTMENT, AND THE GENERAL ACCOUNTING OFFICE. HOWEVER, SOME DOUBT IS EXPRESSED AS TO THE USE OF C.O.D. MAIL IN MAKING SMALL PURCHASES IN VIEW OF THE FOLLOWING EXCERPTS FROM THE INSTRUCTIONS CONTAINED IN THE UNITED STATES OFFICIAL POSTAL GUIDE, JULY 1951, CHAPTER XIV, PARAGRAPHS 12 (D), 14 (B) AND 20:

(1) MERCHANDISE RELEASED TO THE ADDRESSEE OF A C.O.D. PACKAGE, UPON PAYMENT OF THE CHARGES THEREON, MAY NOT SUBSEQUENTLY BE REMAILED C.O.D. TO THE ORIGINAL SENDER WITHOUT HIS PERMISSION THEREFOR, EVEN THOUGH HE IS NOT SATISFIED WITH SAID MERCHANDISE.

(2) THE POST OFFICE DEPARTMENT ASSUMES NO RESPONSIBILITY IN CONNECTION WITH THE C.O.D. CHARGES STATED OR FOR ANY MISUNDERSTANDINGS BETWEEN THE SENDER AND THE ADDRESSEE REGARDING PRICE, CHARACTER, OR CONTENTS OF C.O.D. PARCELS.

(3) WHILE THERE EXISTS A RESTRICTION AGAINST SENDING INVOICES OR BILLS OF LADING ONLY BY C.O.D. MAIL, THE C.O.D. CHARGES ON A PARCEL WHICH ACTUALLY CONTAINS MERCHANDISE MAY INCLUDE THE BALANCE DUE ON A PAST OR ANTICIPATED TRANSACTION WHEN AUTHORIZED BY THE ADDRESSEE.

(4) THE EXAMINATION OF THE CONTENTS OF A C.O.D. PARCEL IS PROHIBITED UNTIL AFTER IT HAS BEEN RECEIPTED FOR AND THE CHARGES PAID.

THE LETTER POINTS OUT THAT, IN VIEW OF THE FOREGOING PROVISIONS, THE VETERANS ADMINISTRATION AS ADDRESSEE OF A C.O.D. PARCEL WOULD HAVE NO OPPORTUNITY PRIOR TO PAYMENT OF THE CHARGES TO STABLISH:

(1) THAT THE MERCHANDISE CONTAINED IN SUCH PARCEL IS OF THE QUALITY, QUANTITY, AND PRICE AGREED UPON.

(2) WHETHER THE C.O.D. CHARGES PAID INCLUDE A CLAIM FOR BACK ORDERED QUANTITIES WHICH THE VENDOR MAY OR MAY NOT SUBSEQUENTLY FURNISH.

(3) WHETHER THE VENDOR OR CONTRACTOR HAS INCLUDED IN THE C.O.D. CHARGES AN AMOUNT, EVEN THOUGH SMALL, ALLEGED TO BE DUE HIM IN CONNECTION WITH A PRIOR TRANSACTION WHICH HE MAY HAVE ALLEGED TO THE POST OFFICE HAD BEEN AUTHORIZED FOR COLLECTION IN THAT MANNER.

A DECISION IS REQUESTED AS TO WHETHER THE PAYMENT OF C.O.D. CHARGES AT THE TIME OF RECEIPT OF PARCELS AND PRIOR TO THE EXAMINATION OF THE CONTENTS THEREOF CONSTITUTES A VIOLATION OF SECTION 3648, REVISED STATUTES.

THE JOINT REGULATION FOR SMALL PURCHASES UTILIZING IMPREST FUNDS APPROVED MARCH 10, 1952, WAS ISSUED TO CARRY OUT THE RECOMMENDATIONS CONTAINED IN HOUSE REPORT NO. 1224 " SURVEY OF PROCUREMENT PROCESS, PART II" APPROVED OCTOBER 20, 1951, WHICH WAS CONCERNED WITH EFFECTING ECONOMY AND EFFICIENCY IN THE FEDERAL PROCUREMENT PROCESS. THE FUNDAMENTAL PURPOSE OF THE JOINT REGULATION IS TO AUTHORIZE ALL GOVERNMENT AGENCIES TO ADOPT SIMPLIFIED PROCUREMENT AND PAYMENT PROCEDURES WITH RESPECT TO SMALL PURCHASES OF ARTICLES AND SERVICES THROUGH THE USE OF IMPREST FUNDS. INDICATED IN THE LETTER OF MARCH 18, 1953, ONE OF THE MEANS OF PROCUREMENT AND PAYMENT COVERED BY THE JOINT REGULATIONS WAS THE PERMITTED USE OF C.O.D. SHIPMENTS WHERE REQUIRED.

SECTION 3648, REVISED STATUTES, 31 U.S.C. 529, IN PERTINENT PART, IS AS FOLLOWS:

NO ADVANCE OF PUBLIC MONEY SHALL BE MADE IN ANY CASE UNLESS AUTHORIZED BY THE APPROPRIATION CONCERNED OR OTHER LAW. AND IN ALL CASES OF CONTRACTS FOR THE PERFORMANCE OF ANY SERVICE, OR THE DELIVERY OF ARTICLES OF ANY DESCRIPTION, FOR THE USE OF THE UNITED STATES, PAYMENT SHALL NOT EXCEED THE VALUE OF THE SERVICES RENDERED, OR OF THE ARTICLES DELIVERED PREVIOUSLY TO SUCH PAYMENT. * * *

THE INTENT OF THE FOREGOING PROVISION OF LAW IS THAT THE UNITED STATES SHOULD NOT PAY FOR ANY WORK OR MATERIALS IN ADVANCE OF THE ACTUAL OR CONSTRUCTIVE RECEIPT THEREOF OR IN AN AMOUNT IN EXCESS OF THE VALUE THEREOF. HOWEVER, SUPPLIES PURCHASED ON A C.O.D. BASIS ARE RECEIVED SIMULTANEOUSLY WITH PAYMENT, IF NOT ACTUALLY PRIOR THERETO, AND, ORDINARILY, THERE WOULD BE NO BASIS TO PRESUME THAT THE SUPPLIES RECEIVED ARE NOT THE SUPPLIES ORDERED. FURTHERMORE, IN THE EVENT OF ANY QUESTION AS TO THE CONTENTS OF THE PACKAGE OR THE PRICE PAID UPON THE RECEIPT THEREOF, THERE IS PERCEIVED NO REASON WHY PROPER ADJUSTMENT MAY NOT BE EFFECTED WITH THE VENDOR AS IN THE CASE OF ANY OVER THE COUNTER TRANSACTION WHEN A QUESTION SUBSEQUENTLY ARISES IN CONNECTION THEREWITH. ACCORDINGLY, THE PAYMENT OF C.O.D. CHARGES IN CASH AT THE TIME OF RECEIPT OF SUPPLIES ORDERED BY A VETERANS ADMINISTRATION INSTALLATION PRIOR TO AN EXAMINATION OF THE CONTENTS THEREOF NEED NOT BE REGARDED AS A VIOLATION OF SECTION 3648, REVISED STATUTES, WHERE THE PURCHASES ARE MADE PURSUANT TO THE CITED JOINT REGULATIONS.