B-124582, OCT. 19, 1955

B-124582: Oct 19, 1955

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TO THE HONORABLE SECRETARY OF STATE: REFERENCE IS MADE TO LETTER OF JULY 1. APPROPRIATIONS TO THE DEPARTMENT OF STATE FOR CARRYING INTO EFFECT THE FOREIGN SERVICE BUILDING ACT OF 1926 HAVE SPECIFIED THAT CERTAIN AMOUNTS APPROPRIATED SHALL BE USED TO PURCHASE FOREIGN CURRENCIES OR CREDITS OWED TO OR OWNED BY THE UNITED STATES. HAS BEEN PERFORMED ON A CENTRALIZED BASIS BY THE OFFICE OF FOREIGN BUILDINGS OPERATIONS IN WASHINGTON AND FOREIGN CURRENTLY LIMITATIONS HAVE BEEN PLACED ON ALLOTMENT ADVICES. IT IS PROPOSED TO DISPENSE WITH THE PRESENT SYSTEM OF PLACING FOREIGN CURRENCY LIMITATIONS ON ALLOTMENT ADVICES AND IN LIEU THEREOF TO ESTABLISH A CONTROL BASED ON FOREIGN BUILDING OPERATIONS EXPENDITURES REPORTED BY THE DISBURSING OFFICERS AT FOREIGN SERVICE POSTS ON THEIR SUMMARY OF TRANSACTIONS.

B-124582, OCT. 19, 1955

TO THE HONORABLE SECRETARY OF STATE:

REFERENCE IS MADE TO LETTER OF JULY 1, 1955, FROM THE DEPUTY UNDER SECRETARY FOR ADMINISTRATION, SUBMITTING FOR OUR CONSIDERATION PROPOSED CHANGES IN THE PROCEDURE FOR ACCOUNTING FOR AMOUNTS SPECIFIED FOR THE PURCHASE OF FOREIGN CURRENCIES OR CREDITS INTO EFFECT THE FOREIGN SERVICE BUILDING ACT OF 1926, AS AMENDED, 22 U.S.C. 292-300.

APPROPRIATIONS TO THE DEPARTMENT OF STATE FOR CARRYING INTO EFFECT THE FOREIGN SERVICE BUILDING ACT OF 1926 HAVE SPECIFIED THAT CERTAIN AMOUNTS APPROPRIATED SHALL BE USED TO PURCHASE FOREIGN CURRENCIES OR CREDITS OWED TO OR OWNED BY THE UNITED STATES. THE DEPARTMENT OF STATE APPROPRIATION ACT, 1956, PUBLIC LAW 133, APPROVED JULY 7, 1955, 69 STAT. 265, AS ILLUSTRATIVE OF THIS, APPROPRIATES UNDER THE HEADING "ACQUISITION OF BUILDINGS ABROAD" THE AMOUNT OF "$8,500,000, OF WHICH NOT LESS THAT $7,500,000 SHALL BE USED TO PURCHASE FOREIGN CURRENCIES OR CREDITS OWED TO OR OWNED BY THE TREASURY OF THE UNITED STATES, TO REMAIN AVAILABLE UNTIL EXPENDED.'

THE DEPUTY UNDER SECRETARY STATES THAT THE DEPARTMENT HAS SEGREGATED THE AMOUNTS APPROPRIATED FOR THE PURCHASE OF FOREIGN CURRENCIES OR CREDITS IN A SEPARATE LIMITATION (19XO535.002) OF THE APPROPRIATION FOR ACQUISITION OF BUILDINGS ABROAD, AND EACH YEAR UNDER THIS NO YEAR ACCOUNT, HAD MADE ALLOTMENTS, INCURRED OBLIGATIONS AND MADE PAYMENTS AGAINST THIS SEPARATE LIMITATION IN ORDER TO GIVE EFFECT TO THE RESTRICTION ON THE SOURCE OF EXCHANGE SET FORTH IN THE LAW. THE ALLOTMENT ACCOUNTING OF THE BUILDING PROGRAM WITH MINOR EXCEPTIONS, HAS BEEN PERFORMED ON A CENTRALIZED BASIS BY THE OFFICE OF FOREIGN BUILDINGS OPERATIONS IN WASHINGTON AND FOREIGN CURRENTLY LIMITATIONS HAVE BEEN PLACED ON ALLOTMENT ADVICES. IT IS PROPOSED TO DISPENSE WITH THE PRESENT SYSTEM OF PLACING FOREIGN CURRENCY LIMITATIONS ON ALLOTMENT ADVICES AND IN LIEU THEREOF TO ESTABLISH A CONTROL BASED ON FOREIGN BUILDING OPERATIONS EXPENDITURES REPORTED BY THE DISBURSING OFFICERS AT FOREIGN SERVICE POSTS ON THEIR SUMMARY OF TRANSACTIONS, FORM FS-466, WHICH WILL BE POSTED TO A CONSOLIDATED OR MASTER MEMORANDUM FOREIGN CURRENCY ACCOUNT MAINTAINED AT WASHINGTON IN THE OFFICE OF FINANCE.

UNDER THE NEW PROCEDURE, AS UNDERSTOOD FROM THE UNDER SECRETARY'S LETTER AND FROM INFORMATION OBTAINED THROUGH INFORMAL DISCUSSIONS BETWEEN REPRESENTATIVES OF OUR OFFICE AND YOUR DEPARTMENT, ALLOTMENTS WOULD BE MADE SOLELY IN UNITED STATES DOLLARS AND DISBURSEMENT FOR EACH FOREIGN SERVICE POST FROM THE FOREIGN BUILDING APPROPRIATION WOULD BE APPLIED BY THE DEPARTMENT FIRST TO THE UNEXPENDED BALANCE REFLECTED IN THE MASTER MEMORANDUM ACCOUNT. EXPENDITURES UP TO SUCH BALANCE WOULD BE CONSIDERED AS CHARGES AGAINST THE FOREIGN CURRENCY LIMITATION OF THE APPROPRIATION, AND IF AND WHEN THE DISBURSEMENTS AT ANY POST EXCEED THE BALANCE IN THE MEMORANDUM ACCOUNT OF THAT POST, THE EXCESS WOULD BE CONSIDERED AS A DISBURSEMENT AGAINST THE UNITED STATES DOLLAR PORTION OF THE FOREIGN BUILDING APPROPRIATION. THIS PROCEDURE WOULD ELIMINATE THE NECESSITY OF THE MAINTENANCE OF MEMORANDUM ACCOUNTS OF FOREIGN CURRENCIES BY THE POSTS FOR CURRENCIES EXPENDED FOR THE FOREIGN BUILDING PROGRAM. AS TO FOREIGN CURRENCIES ACQUIRED AND USED FOR REGULAR OPERATING EXPENSES OF THE GOVERNMENT, THE POSTS WOULD BE REQUIRED TO MAINTAIN MEMORANDUM ACCOUNTS AND TO SUBMIT THESE ACCOUNTS QUARTERLY TO THE OFFICE OF FINANCE FOR POSTING TO THE CONSOLIDATED MEMORANDUM ACCOUNT.

SINCE UNDER THE SUGGESTED PLAN, EXPENDITURES WILL FIRST BE CHARGED AGAINST THE FOREIGN CURRENCY LIMITATION CONSISTENT WITH THE CONGRESSIONAL MANDATE THAT NOT LESS THAN A SPECIFIED AMOUNT BE USED FOR THE PURCHASE OF FOREIGN CURRENCIES OWED TO OR OWNED BY THE TREASURY OF THE UNITED STATE, NO OBJECTION IS PRECEIVED TO THE ELIMINATION OF THE FOREIGN CURRENCY LIMITATION FOR ALLOTMENT ADVICES. ACCORDINGLY, SINCE ALL EXPENDITURES OR THE FOREIGN CURRENCIES ARE SUBJECT TO OUR AUDIT AND WITH THE UNDERSTANDING THAT THE CONSOLIDATED MEMORANDUM ACCOUNT MAINTAINED IN WASHINGTON WILL BE AVAILABLE FOR EXAMINATION BY OUR AUDITORS, WE CONCUR IN THE PROPOSED PROCEDURE.