B-126459, FEB. 20, 1956

B-126459: Feb 20, 1956

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TO HONORABLE SECRETARY OF THE TREASURY: REFERENCE IS MADE TO LETTER DATED DECEMBER 27. OUR OPINION IS REQUESTED AS TO (1) WHETHER THE NEW PROCEDURE MEETS THE REQUIREMENTS OF LAW AND JOINT REGULATION NO. 4. IT IS STATED THAT FOR MANY YEARS PRIOR TO JULY 1. THE PROCEDURE EMPLOYED BY THE TREASURY DEPARTMENT IN COMPUTING THE AMOUNT OF THIS INTEREST WAS BASED. UNDER THE ACCOUNTING PROCEDURES USED AT THAT TIME INDIAN TRUST FUND COLLECTIONS WERE CREDITED TO VARIOUS "UNAPPROPRIATED" RECEIPT ACCOUNTS AND PERIODICALLY. AMOUNTS NEEDED FOR CURRENT DISBURSEMENTS WERE TRANSFERRED FROM THE APPROPRIATION ACCOUNT TO THE CHECKING ACCOUNT OF THE DISBURSING OFFICERS. INTEREST COMPUTATIONS WERE MADE ON THE DAILY BALANCES IN THE .

B-126459, FEB. 20, 1956

TO HONORABLE SECRETARY OF THE TREASURY:

REFERENCE IS MADE TO LETTER DATED DECEMBER 27, 1955, FROM THE ACTING SECRETARY OF THE TREASURY, CONCERNING THE COMPUTATION OF INTEREST ON FUNDS HELD IN TRUST FOR INDIAN TRIBES UNDER A PROCEDURE ADOPTED JULY 1, 1955, THE EFFECTIVE DATE OF THE ELIMINATION OF DISBURSING OFFICERS' CHECKING ACCOUNT BALANCES PURSUANT TO TREASURY DEPARTMENT-GENERAL ACCOUNTING OFFICE JOINT REGULATION NO. 4, REVISED, 34 COMP. GEN. 815. OUR OPINION IS REQUESTED AS TO (1) WHETHER THE NEW PROCEDURE MEETS THE REQUIREMENTS OF LAW AND JOINT REGULATION NO. 4, REVISED, AND (2) WHETHER THE TREASURY MAY DISREGARD AMOUNTS IN THE "EXPENDITURE" ACCOUNTS IN THE TREASURY IN CALCULATING INTEREST PAYABLE ON INDIAN TRUST FUNDS.

IT IS STATED THAT FOR MANY YEARS PRIOR TO JULY 1, 1955, THE PROCEDURE EMPLOYED BY THE TREASURY DEPARTMENT IN COMPUTING THE AMOUNT OF THIS INTEREST WAS BASED, IN PART, ON THE THEN EXISTING PRACTICE OF TRANSFERRING FUNDS NEEDED FOR CURRENT PAYMENTS FROM TRUST APPROPRIATION ACCOUNTS TO THE CREDIT OF DISBURSING OFFICERS' CHECKING ACCOUNTS, NO INTEREST BEING COMPUTED ON THE BALANCES IN THE CHECKING ACCOUNTS. UNDER THE ACCOUNTING PROCEDURES USED AT THAT TIME INDIAN TRUST FUND COLLECTIONS WERE CREDITED TO VARIOUS "UNAPPROPRIATED" RECEIPT ACCOUNTS AND PERIODICALLY, BY APPROPRIATION WARRANT, TRANSFERRED TO "UNREQUISITIONED" APPROPRIATION ACCOUNTS. ON THE BASIS OF REQUISITIONS FROM THE BUREAU OF INDIAN AFFAIRS AND THE RELATED ACCOUNTABLE WARRANTS USED UNTIL JULY 1, 1953, AND SUBSEQUENTLY ON THE BASIS OF ADMINISTRATIVE REQUESTS, AMOUNTS NEEDED FOR CURRENT DISBURSEMENTS WERE TRANSFERRED FROM THE APPROPRIATION ACCOUNT TO THE CHECKING ACCOUNT OF THE DISBURSING OFFICERS. INTEREST COMPUTATIONS WERE MADE ON THE DAILY BALANCES IN THE ,UNAPPROPRIATED" RECEIPT ACCOUNTS AND THE "UNREQUISITIONED" APPROPRIATION ACCOUNTS.

UNDER THE ACCOUNTING PROCEDURES FOLLOWED SINCE ELIMINATION OF FUNDED CHECKING ACCOUNTS FOR DISBURSING OFFICERS MAKING PAYMENTS FROM INDIAN TRUST FUND ACCOUNTS, COLLECTIONS ARE CREDITED TO ,UNAPPROPRIATED RECEIPT" ACCOUNTS AS HERETOFORE, AND TRANSFERS MADE BY AN APPROPRIATION WARRANT TO A SEPARATE "NON-EXPENDITURE" ACCOUNT WHICH SERVES THE SAME PURPOSE AS THE FORMER ,UNREQUISITIONED" APPROPRIATION ACCOUNT. BASED UPON ADMINISTRATIVE ADVISES AS TO AMOUNTS TO BE DISBURSED FOR A GIVEN PERIOD, SUCH AMOUNTS ARE TRANSFERRED FROM THE "NON-EXPENDITURE" ACCOUNTS TO "EXPENDITURE" ACCOUNTS. INTEREST IS COMPUTED ON THE DAILY BALANCES IN THE "NON- EXPENDITURE" AND ,UNAPPROPRIATED" RECEIPT ACCOUNTS IN A MANNER SIMILAR TO THE PROCEDURE USED PRIOR TO JULY 1, 1955. INTEREST IS NOT COMPUTED ON AMOUNTS TRANSFERRED TO THE "EXPENDITURE" ACCOUNTS IN THE TREASURY.

THE PROVISIONS OF LAW CODIFIED IN U.S. CODE, TITLE 25, SECTIONS 161, 161A, AND 161B, ARE CITED IN YOUR DEPARTMENT'S SUBMISSION AS TYPICAL OF THE LAWS INVOLVED REQUIRING THE PAYMENT OF INTEREST ON FUNDS HELD IN TRUST FOR INDIAN TRIBES. SECTION 161 REQUIRES THE PAYMENT OF INTEREST BY THE UNITED STATES "SEMIANNUALLY, FROM THE DATE OF DEPOSIT OF ANY AND ALL SUCH SUMS IN THE UNITED STATES TREASURY * * *.' SECTION 161A PROVIDES FOR THE PAYMENT OF 4 PERCENTUM INTEREST ON "ALL FUNDS WITH ACCOUNT BALANCES EXCEEDING $500 HELD IN TRUST BY THE UNITED STATES AND CARRIED IN PRINCIPAL ACCOUNTS ON THE BOOKS OF THE TREASURY DEPARTMENT TO THE CREDIT OF INDIAN TRIBES, UPON WHICH INTEREST IS NOT OTHERWISE AUTHORIZED BY LAW * * *.' SECTION 161B REQUIRES THAT CERTAIN TRIBAL FUNDS SHALL BE "CARRIED ON THE BOOKS OF THE TREASURY DEPARTMENT IN SEPARATE ACCOUNTS FOR THE RESPECTIVE TRIBES, AND ALL SUCH FUNDS WITH ACCOUNT BALANCES EXCEEDING $500 SHALL BEAR SIMPLE INTEREST AT THE RATE OF 4 PERCENTUM PER ANNUM * * *.'

LEGISLATION AUTHORIZING THE PAYMENT OF INTEREST ON INDIAN TRUST FUNDS WAS APPARENTLY MADE WITH THE VIEW TO PROVIDING COMPENSATION FOR THE USE OF THE MONEY BY THE GOVERNMENT. SEE FOR EXAMPLE THE COMMENTS OF THE COMMITTEE ON INDIAN AFFAIRS IN HOUSE REPORT NO. 2320, 70TH CONGRESS, 2D SESSION, IN REPORTING ON S. 5180 WHICH WAS ENACTED AS PUBLIC LAW 724, 45 STAT. 1164, 25 U.S.C. 161A. THIS PRINCIPLE HAS BEEN CARRIED OUT FOR MANY YEARS, AS INDICATED IN YOUR DEPARTMENT'S SUBMISSION, BY COMPUTING INTEREST ONLY ON FUNDS WHICH HAVE NOT BEEN WITHDRAWN AS ADMINISTRATIVELY REQUESTED FOR THE CURRENT NEEDS OF THE INDIAN TRIBES CONCERNED. THE FUNDS CARRIED IN THE ,EXPENDITURE" ACCOUNTS OF THE TREASURY ARE LIKEWISE FUNDS REQUESTED FOR THE CURRENT NEEDS OF INDIAN TRIBES AND THEREFORE THE PROCEDURE OUTLINED IN YOUR LETTER APPEARS PROPER. ACCORDINGLY, THE QUESTIONS SUBMITTED ARE ANSWERED IN THE AFFIRMATIVE.