B-122344, MAY 5, 1955, 34 COMP. GEN. 573

B-122344, MAY 5, 1955, 34 COMP. GEN. 573

CONVENTIONS, CONFERENCES, ETC. - TRAVELING EXPENSES - NATIONAL BUREAU OF STANDARDS PERSONNEL ENGAGED ON DEFENSE DEPARTMENT PROJECTS EXPENDITURES BY NATIONAL BUREAU OF STANDARDS FOR RESEARCH AND DEVELOPMENT PROJECTS WHICH ARE PERFORMED FOR THE DEPARTMENT OF DEFENSE AND FINANCED BY DEFENSE APPROPRIATIONS TRANSFERRED TO WORKING CAPITAL FUNDS OF THE BUREAU ARE SUBJECT TO THE SAME LIMITATIONS, CONDITIONS AND RESTRICTIONS AS PROVIDED IN THE APPROPRIATION ACT UNLESS SPECIFICALLY EXEMPT FROM THE PROVISIONS OF SECTION 1210 OF THE GENERAL APPROPRIATION ACT, 1951, WHICH SUBJECTS FUNDS WITHDRAWN FROM ONE APPROPRIATION FOR CREDIT TO A WORKING FUND TO THE SAME EXPENDITURE LIMITATIONS. THE ADMINISTRATIVE APPROVAL REQUIREMENT IN SECTION 605 OF THE DEPARTMENT OF DEFENSE APPROPRIATION ACT, 1954, FOR TRAVEL EXPENSES FOR ATTENDANCE AT MEETINGS IS A PREREQUISITE TO THE AVAILABILITY OF APPROPRIATIONS, AND, THEREFORE, EXPENSES OF ATTENDANCE AT SCIENTIFIC MEETINGS OF NATIONAL BUREAU OF STANDARDS PERSONNEL, WHO ARE ENGAGED IN RESEARCH AND DEVELOPMENT PROJECTS SPONSORED BY DEPARTMENT OF DEFENSE FUNDS, ARE SUBJECT TO THE REQUIREMENTS OF SECTION 605. THE ADMINISTRATIVE APPROVAL REQUIREMENT IN SECTION 605 OF THE DEPARTMENT OF DEFENSE APPROPRIATION ACT, 1954, FOR TRAVEL EXPENSES FOR ATTENDANCE AT SCIENTIFIC MEETINGS OF NATIONAL BUREAU OF STANDARDS PERSONNEL WHO ARE ENGAGED ON RESEARCH AND DEVELOPMENT PROJECTS SUPPORTED BY DEPARTMENT OF DEFENSE FUNDS, MAY BE ACCOMPLISHED THROUGH THE CONTRACTING ORDER PROVIDED THE APPROVING OFFICERS ARE DESIGNATED AND IT IS MUTUALLY AGREED THAT THE PROJECTS WILL INVOLVE ATTENDANCE AT SUCH MEETINGS.

COMPTROLLER GENERAL CAMPBELL TO THE SECRETARY OF COMMERCE, MAY 5, 1955:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 13, 1954, TRANSMITTING A MEMORANDUM OF THE NATIONAL BUREAU OF STANDARDS IN WHICH THERE ARE PRESENTED FOR DECISION QUESTIONS CONCERNING THE APPLICABILITY OF SECTION 605 OF THE DEPARTMENT OF DEFENSE APPROPRIATION ACT, 1954, 67 STAT. 349, TO FUNDS MADE AVAILABLE TO THE BUREAU'S WORKING CAPITAL FUND FROM DEPARTMENT OF DEFENSE APPROPRIATIONS. SECTION 605 PROVIDES THAT "APPROPRIATIONS FOR THE DEPARTMENT OF DEFENSE AVAILABLE FOR TRAVEL SHALL NOT BE AVAILABLE FOR EXPENSES INCIDENT TO ATTENDANCE AT MEETINGS OF TECHNICAL, SCIENTIFIC, PROFESSIONAL, OR OTHER SIMILAR ORGANIZATIONS WITHOUT THE APPROVAL OF THE SECRETARY OF THE DEPARTMENT CONCERNED, OR HIS DESIGNEES FOR THE PURPOSE.'

THE NATIONAL BUREAU OF STANDARDS CONFORMANCE TO THE REQUIREMENTS OF SECTION 605 WAS QUESTIONED BY OUR DIVISION OF AUDITS IN LETTER DATED AUGUST 20, 1954, IN VIEW OF SECTION 1210 OF THE GENERAL APPROPRIATION ACT, 1951, 64 STAT. 765, WHICH PROVIDES, IN PART, THAT FUNDS WITHDRAWN FROM ONE APPROPRIATION FOR CREDIT TO ANOTHER, OR TO A WORKING FUND, SHALL BE AVAILABLE FOR THE SAME PURPOSES, AND SUBJECT TO THE SAME LIMITATIONS, CONDITIONS, AND RESTRICTIONS, AS PROVIDED BY THE ACT APPROPRIATING SUCH FUNDS. IT WAS POINTED OUT THAT SEVERAL PROJECTS, SPONSORED BY DEPARTMENT OF DEFENSE FUNDS, REGULARLY REIMBURSE TRAVELERS FOR EXPENSES INCURRED IN CONNECTION WITH ATTENDANCE AT SCIENTIFIC MEETINGS WITHOUT THE REQUIRED APPROVAL.

IT IS STATED IN THE BUREAU'S MEMORANDUM THAT MANY OF THE TECHNICAL PROJECTS UNDERTAKEN BY THE BUREAU ARE SUPPORTED BY FUNDS APPROPRIATED TO THE DEPARTMENT OF DEFENSE, AND MADE AVAILABLE TO THE BUREAU IN ACCORDANCE WITH THE PROVISIONS OF 31 U.S.C. 686, OR 41 U.S.C. 23. UNDER THE COST ACCOUNTING SYSTEM EACH COST ACCRUAL IN THE WORKING CAPITAL FUND, ESTABLISHED BY THE DEFICIENCY APPROPRIATION ACT, 1950, 64 STAT. 275, 279, IS IDENTIFIED WITH A SPECIFIC PROJECT. COSTS WHICH CANNOT BE DIRECTLY IDENTIFIED WITH INDIVIDUAL TECHNICAL PROJECTS ARE CHARGED FIRST TO OVERHEAD PROJECTS AND ARE IN TURN ALLOCATED AS OVERHEAD TO THE TECHNICAL PROJECTS. IT IS STATED FURTHER THAT COSTS IDENTIFIED WITH TECHNICAL PROJECTS (INCLUDING ASSIGNMENTS OF INDIRECT, OR OVERHEAD, COSTS) ARE PERIODICALLY SUMMARIZED AND THE WORKING CAPITAL FUND IS REIMBURSED FROM THE APPLICABLE APPROPRIATION OR FUNDS. CONCERNING THE PROBLEM OF THE APPLICABILITY OF THE LIMITATION TO COSTS DIRECTLY CHARGED TO PROJECTS CONDUCTED BY THE DEPARTMENT OF DEFENSE, IT IS STATED THAT, ALTHOUGH ALL COSTS ARE INITIALLY INCURRED IN THE WORKING CAPITAL FUND, THE BUREAU HAS MADE IT AN ADMINISTRATIVE PRACTICE TO IDENTIFY ALL COSTS SUBJECT TO LIMITATIONS OR RESTRICTIONS WITH THE APPROPRIATIONS WHICH ULTIMATELY REIMBURSE THE WORKING CAPITAL FUND. THE EXAMPLE IS CITED THAT A PROJECT MAY NOT BEAR THE COST OF PROCUREMENT OF PASSENGER MOTOR VEHICLES UNLESS THE FUNDS WHICH WILL REIMBURSE THE WORKING CAPITAL FUND FOR THE COSTS OF THAT PROJECT ARE SPECIFICALLY AVAILABLE FOR PURCHASE OF SUCH VEHICLES. THE TIME THAT THE RESTRICTION ON TRAVEL TO MEETINGS WAS FIRST INCLUDED IN THE DEPARTMENT OF DEFENSE APPROPRIATION ACT, IT IS STATED THAT THE BUREAU MADE AN ADMINISTRATIVE DETERMINATION THAT, IN THE ABSENCE OF A SPECIFIC STATEMENT OTHERWISE, A MILITARY AGENCY WHICH PLACES AN ORDER WITH THE BUREAU FOR RESEARCH AND DEVELOPMENT WORK AUTHORIZES THE NORMAL COSTS INCIDENT THERETO WHICH MAY INCLUDE TRAVEL TO MEETINGS OF PERTINENCE TO THE WORK INVOLVED. THIS DETERMINATION WAS STATED TO HAVE BEEN BASED ON THE FOLLOWING CONSIDERATIONS: (A) THE LIMITATION WAS NOT A BLANKET PROHIBITION OF CERTAIN EXPENDITURES, BUT MERELY A REQUIREMENT OF ADMINISTRATIVE AUTHORIZATION, (B) IT WOULD BE IMPRACTICABLE TO SUBJECT THE ACTIVITIES OF INDIVIDUAL BUREAU EMPLOYEES TO THE ADMINISTRATIVE APPROVAL OF THE SECRETARIES OF THE MILITARY DEPARTMENTS, AND (C) ADMINISTRATIVE APPROVAL COULD BE INFERRED FROM THE ISSUANCE OF THE ORDER TO THE BUREAU FOR THE WORK.

SINCE THE ABOVE PRACTICE HAS BEEN QUESTIONED BY OUR AUDITORS, THE NATIONAL BUREAU OF STANDARDS NOW REQUESTS A CLARIFICATION OF THE APPLICATION OF THE LIMITATION, AND HAS PRESENTED THE FOLLOWING QUESTIONS FOR CONSIDERATION:

1. ARE EXPENDITURES OF THE NATIONAL BUREAU OF STANDARDS' WORKING CAPITAL FUND SUBJECT TO THE LIMITATIONS CONTAINED IN SECTION 605 OF THE DEPARTMENT OF DEFENSE APPROPRIATION ACT, 1954, WHEN THE BUREAU IS ACTING AS A CONTRACTOR FOR THE PERFORMANCE OF RESEARCH AND DEVELOPMENT AND RELATED WORK FOR THE DEPARTMENT OF DEFENSE?

2. IF THE ANSWER TO QUESTION 1 IS IN THE AFFIRMATIVE, IS THE REQUIREMENT OF ADMINISTRATIVE APPROVAL MET BY INFERRING SUCH APPROVAL FROM THE CONTRACTING ORDER RECEIVED BY NBS FROM THE DEPARTMENT OF DEFENSE?

3. IF THE ANSWER TO QUESTION 2 IS IN THE NEGATIVE, WILL IT BE NECESSARY TO OBTAIN SPECIFIC APPROVAL OF EACH INDIVIDUAL TRAVEL ORDER FROM THE SECRETARIES OR THEIR DESIGNEES?

4. IF THE COST OF ATTENDANCE AT MEETINGS IS NOT CHARGED DIRECTLY TO DEFENSE PROJECTS BUT IS CHARGED INDIRECTLY AS AN ELEMENT OF OVERHEAD COST, IS DEPARTMENT OF DEFENSE ADMINISTRATIVE APPROVAL OF THE TRAVEL REQUIRED?

SECTION 8 OF THE ACT OF JUNE 26, 1912, 37 STAT. 184 (5 U.S.C. 83), PROHIBITS THE USE OF APPROPRIATED FUNDS FOR PAYMENT OF EXPENSES OF ATTENDANCE AT MEETINGS OR CONVENTIONS OF SOCIETIES OR ASSOCIATIONS UNLESS SUCH EXPENSES ARE AUTHORIZED TO BE PAID BY SPECIFIC APPROPRIATIONS FOR SUCH PURPOSES OR ARE PROVIDED FOR IN EXPRESS TERMS IN SOME GENERAL APPROPRIATION. THE DEPARTMENT OF DEFENSE APPROPRIATIONS ARE REMOVED FROM THE ABOVE PROHIBITION ONLY TO THE EXTENT THAT APPROVAL IS GRANTED UNDER THE PROVISIONS OF SECTION 605 OF THE DEPARTMENT OF DEFENSE APPROPRIATION ACT, 1954. IT IS THUS IMMEDIATELY APPARENT THAT THE APPROVAL IS NOT, AS INDICATED IN THE BUREAU'S MEMORANDUM, MERELY A REQUIREMENT OF ADMINISTRATIVE AUTHORIZATION TO ATTEND MEETINGS, BUT THAT IT IS A PREREQUISITE TO THE AVAILABILITY OF THE APPROPRIATIONS TO BE ULTIMATELY CHARGED FOR SUCH EXPENSES. ACCORDINGLY, AND SINCE THE TRANSACTIONS HERE INVOLVED ARE NOT SPECIFICALLY EXCEPTED BY LAW FROM THE PROVISIONS OF SECTION 1210 OF THE GENERAL APPROPRIATION ACT, 1951, QUESTION 1 IS ANSWERED IN THE AFFIRMATIVE.

CONCERNING QUESTION 2, SECTION 605 REQUIRES THE APPROVAL BY THE SECRETARY OF THE DEPARTMENT CONCERNED, OR HIS DESIGNEES. SINCE THE APPROVING OFFICER ON THE CONTRACT MAY BE SOMEONE OTHER THAN THE SECRETARY'S DESIGNEE FOR APPROVING EXPENSES OF ATTENDANCE AT MEETINGS, NO INFERENCE COULD BE DRAWN OF APPROVAL OF SUCH EXPENSES.

IT OBVIOUSLY WOULD BE IMPRACTICABLE, AS STATED IN THE BUREAU'S MEMORANDUM, TO SUBJECT THE ACTIVITIES OF INDIVIDUAL BUREAU OF STANDARD'S EMPLOYEES TO THE ADMINISTRATIVE APPROVAL OF OFFICIALS OF THE MILITARY DEPARTMENTS. FURTHERMORE, SINCE OFFICIALS OF THE MILITARY DEPARTMENTS WOULD NOT SEEM TO BE IN A POSITION TO PASS UPON THE NECESSITY OF SUCH INDIVIDUAL TRAVEL, NO USEFUL PURPOSE WOULD APPEAR TO BE SERVED BY REQUIRING APPROVAL OF EACH TRAVEL ORDER. ACCORDINGLY, NO OBJECTION WOULD BE INTERPOSED BY OUR OFFICE TO ACCOMPLISHING THE APPROVAL THROUGH THE CONTRACTING ORDER IF THE APPROVING OFFICERS ARE APPROPRIATELY DESIGNATED AND IT IS MUTUALLY AGREED THAT THE UNDERTAKINGS CONTRACTED FOR WILL INVOLVE ATTENDANCE AT MEETINGS. SUCH APPROVAL WOULD BE SUFFICIENT TO INCLUDE BOTH DIRECT AND INDIRECT CHARGES. QUESTIONS 3 AND 4 ARE ANSWERED ACCORDINGLY.