B-122784, APR 14, 1955

B-122784: Apr 14, 1955

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SECRETARY OF STATE: REFERENCE IS MADE TO LETTER DATED JANUARY 28. THE PRINCIPAL IS REQUIRED TO INSERT THE EFFECTIVE DATE OF THE BOND AND THAT THE DATE OF EXECUTION (WHICH MAY BE EITHER PRIOR TO OR SUBSEQUENT TO THE EFFECTIVE DATE) IS INSERTED BY THE SURETY. THE NECESSITY FOR MAINTAINING ADEQUATE AND CURRENT RECORDS IS REPORTED TO RESULT IN CONTINUOUS CORRESPONDENCE BETWEEN YOUR DEPARTMENT AND THE FOREIGN SERVICE POSTS IN CONNECTION WITH THE DATE OF EXECUTION AND THE EFFECTIVE DATE. THE ASSISTANT SECRETARY PROPOSES THAT THE REQUIREMENT BE MODIFIED TO THE EXTENT THAT ONLY THE EFFECTIVE DATE OF THE SURETY BOND NEED BE SHOWN WHEN REFERENCE IS MADE THERETO ON THE ACCOUNTS CURRENT OF THE INVOLVED DISBURSING OFFICERS.

B-122784, APR 14, 1955

PRECIS-UNAVAILABLE

MR. SECRETARY OF STATE:

REFERENCE IS MADE TO LETTER DATED JANUARY 28, 1955, FROM THE ASSISTANT SECRETARY OF STATE, RELATIVE TO A DECISION (7 COMP. GEN. 461) WHICH REQUIRES THAT THE DATE OF EXECUTION OF A SURETY BOND, AS WELL AS THE EFFECTIVE DATE, BE USED ON ACCOUNTS CURRENT, REQUISITIONS FOR ADVANCE OF FUNDS, ETC., OF UNITED STATES DISBURSING OFFICERS.

THE LETTER STATES THAT, IN EXECUTING STATE DEPARTMENT BOND FORM FS 352, THE PRINCIPAL IS REQUIRED TO INSERT THE EFFECTIVE DATE OF THE BOND AND THAT THE DATE OF EXECUTION (WHICH MAY BE EITHER PRIOR TO OR SUBSEQUENT TO THE EFFECTIVE DATE) IS INSERTED BY THE SURETY. IT FURTHER STATES THAT THE PRINCIPAL HAS NO KNOWLEDGE OF THE DATE USED BY THE SURETY IN THE EXECUTION OF THE BOND. CONSEQUENTLY, HE MUST BE INFORMED OF SUCH DATE BY YOUR DEPARTMENT IN EACH INSTANCE SO THAT HE CAN COMPLY WITH THE ABOVE DECISION. THE NECESSITY FOR MAINTAINING ADEQUATE AND CURRENT RECORDS IS REPORTED TO RESULT IN CONTINUOUS CORRESPONDENCE BETWEEN YOUR DEPARTMENT AND THE FOREIGN SERVICE POSTS IN CONNECTION WITH THE DATE OF EXECUTION AND THE EFFECTIVE DATE, WHICH CREATES A SUBSTANTIAL ADMINISTRATIVE WORKLOAD FOR THE EMPLOYEES CONCERNED.

IN VIEW OF THE FOREGOING, THE ASSISTANT SECRETARY PROPOSES THAT THE REQUIREMENT BE MODIFIED TO THE EXTENT THAT ONLY THE EFFECTIVE DATE OF THE SURETY BOND NEED BE SHOWN WHEN REFERENCE IS MADE THERETO ON THE ACCOUNTS CURRENT OF THE INVOLVED DISBURSING OFFICERS.

AT THE TIME THE REFERRED-TO DECISION WAS RENDERED, THERE APPEARS TO HAVE BEEN CONSIDERABLE CONFUSION AS TO WHAT DATE SHOULD BE USED IN REFERRING TO BONDS FOR THE PURPOSE OF IDENTIFICATION. THERE WAS USED (1) THE DATE OF EXECUTION BY THE PRINCIPAL, (2) THE DATE OF APPROVAL BY THE SURETY, (3) THE DATE THE BOND WAS APPROVED BY THE PARTICULAR DEPARTMENT INVOLVED, (4) THE DATE OF APPROVAL BY THE TREASURY DEPARTMENT OR (5) THE EFFECTIVE DATE OF THE BOND. THE RULE LAID DOWN WAS INTENDED TO ESTABLISH A UNIFORM SYSTEM FOR REFERRING TO THE BONDS AND THE DATE OF EXECUTION BY THE SURETY WAS STATED TO HAVE THE ADVANTAGE OF BEING KNOWN TO ALL CONCERNED.

AS INDICATED IN THE LETTER OF JANUARY 28, THE EFFECTIVE DATE STIPULATED BY THE PRINCIPAL - ONCE A BOND IS ACCEPTED AND EXECUTED BY THE SURETY - BECOMES THE CONTROLLING DATE FOR PURPOSES OF ADMINISTERING THE BOND. THEREFORE, THE DATE OF EXECUTION IS RELATIVELY UNIMPORTANT. ACCORDINGLY, IN VIEW OF THE ADMINISTRATIVE ADVANTAGES OUTLINED IN THE ASSISTANT SECRETARY'S LETTER AND SINCE, UNDER CURRENT AUDIT PROCEDURES, NO ACCOUNTING DIFFICULTIES ARE ANTICIPATED IN THE USE OF THE EFFECTIVE DATE ONLY ON THE INVOLVED ACCOUNTS CURRENT, THE PROPOSAL IS APPROVED.