B-115211, I-17849, NOV. 23, 1956

B-115211: Nov 23, 1956

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ASSISTANT SECRETARY OF THE NAVY (FINANCIAL MANAGEMENT): REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 10. ITS ASSETS WILL BE APPLIED IN LIQUIDATION OF THE INDEBTEDNESS. WHICH WAS BEING LIQUIDATED BY MONTHLY PAYMENTS. THIS INDEBTEDNESS WAS ESTABLISHED IN 1953 ON THE BASIS OF AN INVESTIGATION CONDUCTED BY THE GENERAL ACCOUNTING OFFICE WHICH DISCLOSED THAT THE CAFETERIA HAD UTILIZED CIVILIAN EMPLOYEES OF THE DEPOT IN ITS OPERATIONS AND HAD BEEN FURNISHED UTILITIES WITHOUT REIMBURSEMENT. IT IS UNABLE TO MAKE FURTHER PAYMENTS ON THIS INDEBTEDNESS AND STILL CONTINUE IN OPERATION. IT IS FURTHER STATED THAT THE PRESENT NET WORTH OF THE CAFETERIA. IS APPROXIMATELY $2. YOUR LETTER INDICATES THAT THE NAVY CONSIDERS IT HAS THE RESPONSIBILITY FOR PROVIDING "IN-PLANT" FEEDING FACILITIES FOR ITS EMPLOYEES AT THE DEPOT IN VIEW OF ITS LOCATION REMOTE FROM COMMERCIAL CAFES OR LUNCHROOMS AND HENCE IT IS A NECESSITY TO KEEP THE CAFETERIA IN OPERATION IF AT ALL POSSIBLE.

B-115211, I-17849, NOV. 23, 1956

TO HONORABLE W. B. FRANKE, ASSISTANT SECRETARY OF THE NAVY (FINANCIAL MANAGEMENT):

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 10, 1956, INQUIRING WHETHER OUR OFFICE WOULD FEEL COMPELLED TO OBJECT TO A WAIVER OF THE REMAINING AMOUNT OF $3,700 DUE FROM THE EMPLOYEES' COOPERATIVE ASSOCIATION CAFETERIA AT THE NAVAL AMMUNITION DEPOT, HASTINGS, NEBRASKA, WITH THE UNDERSTANDING THAT SHOULD THE CAFETERIA BE FORCED TO CLOSE, ITS ASSETS WILL BE APPLIED IN LIQUIDATION OF THE INDEBTEDNESS.

THE SUM OF $3,700 REPRESENTS THE BALANCE DUE ON AN INDEBTEDNESS OF $12,798.36, WHICH WAS BEING LIQUIDATED BY MONTHLY PAYMENTS. THIS INDEBTEDNESS WAS ESTABLISHED IN 1953 ON THE BASIS OF AN INVESTIGATION CONDUCTED BY THE GENERAL ACCOUNTING OFFICE WHICH DISCLOSED THAT THE CAFETERIA HAD UTILIZED CIVILIAN EMPLOYEES OF THE DEPOT IN ITS OPERATIONS AND HAD BEEN FURNISHED UTILITIES WITHOUT REIMBURSEMENT.

YOU ADVISE THAT THE CAFETERIA HAS BEEN UNABLE TO MAKE ITS PAYMENTS FOR SEVERAL MONTHS AND THAT THE COMPTROLLER OF THE NAVY, AFTER REVIEWING ITS FINANCIAL CONDITION HAS CONCLUDED THAT, IN VIEW OF THE REDUCTION IN PERSONNEL AT THE DEPOT AND THE CONSEQUENT FALLING OFF OF THE CAFETERIA'S BUSINESS, IT IS UNABLE TO MAKE FURTHER PAYMENTS ON THIS INDEBTEDNESS AND STILL CONTINUE IN OPERATION. IT IS FURTHER STATED THAT THE PRESENT NET WORTH OF THE CAFETERIA, EXCLUDING THE INDEBTEDNESS TO THE GOVERNMENT, IS APPROXIMATELY $2,700. YOUR LETTER INDICATES THAT THE NAVY CONSIDERS IT HAS THE RESPONSIBILITY FOR PROVIDING "IN-PLANT" FEEDING FACILITIES FOR ITS EMPLOYEES AT THE DEPOT IN VIEW OF ITS LOCATION REMOTE FROM COMMERCIAL CAFES OR LUNCHROOMS AND HENCE IT IS A NECESSITY TO KEEP THE CAFETERIA IN OPERATION IF AT ALL POSSIBLE.

WE KNOW OF NO AUTHORITY TO WAIVE RECOVERY OF SUCH AN INDEBTEDNESS TO THE UNITED STATES. HOWEVER, IN THE CIRCUMSTANCES, THE GENERAL ACCOUNTING OFFICE WILL NOT OBJECT TO A DISCONTINUANCE OF FURTHER ADMINISTRATIVE ACTION TO EFFECT ADDITIONAL RECOVERIES ON THIS INDEBTEDNESS AT THIS TIME, WITH THE UNDERSTANDING THAT, SHOULD THE CAFETERIA SUBSEQUENTLY BE FORCED TO CLOSE, THE ASSETS OF THE CAFETERIA AVAILABLE UPON ITS LIQUIDATION WILL BE APPLIED AGAINST THE REMAINING INDEBTEDNESS; AND THAT, SHOULD THE CAFETERIA'S BUSINESS INCREASE SUFFICIENTLY, ADMINISTRATIVE ACTION WILL BE TAKEN TO EFFECT REASONABLE MONTHLY PAYMENTS ON THE INDEBTEDNESS.