B-13576, JANUARY 6, 1941, 20 COMP. GEN. 347

B-13576, JANUARY 6, 1941, 20 COMP. GEN. 347

TRANSPORTATION - BILLS - AUDIT AND OVERPAYMENT COLLECTION PROCEDURE SECTION 322 OF THE TRANSPORTATION ACT OF 1940, PROVIDING THAT PAYMENT FOR TRANSPORTATION FOR THE GOVERNMENT BY COMMON CARRIERS SUBJECT TO THE INTERSTATE COMMERCE ACT, OR THE CIVIL AERONAUTICS ACT OF 1938, SHALL BE MADE UPON PRESENTATION OF BILLS THEREFOR, PRIOR TO AUDIT OR SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE, LEAVES THE QUESTION AS TO THE NATURE AND EXTENT OF ANY ADMINISTRATIVE EXAMINATION OF SUCH BILLS PRIOR TO PAYMENT ONE FOR DETERMINATION ADMINISTRATIVELY IN THE LIGHT OF THE ACCOUNTABILITY OF THE ADMINISTRATIVE OFFICERS CERTIFYING THE BILLS AND THE DISBURSING OFFICERS MAKING THE PAYMENTS. OVERPAYMENTS REPORTED TO ADMINISTRATIVE OFFICES AND DISBURSING OFFICERS IN CONNECTION WITH THE POST AUDIT OF TRANSPORTATION PAYMENTS GENERALLY SHOULD BE RECOVERED ADMINISTRATIVELY FROM AMOUNTS OTHERWISE PAYABLE ON SUBSEQUENT VOUCHERS, AND ONLY IN CASES WHERE THE DISBURSING OFFICER OR ADMINISTRATIVE OFFICE CONCERNED DOES NOT HAVE, AND IS NOT LIKELY TO HAVE, A SUBSEQUENT VOUCHER ON WHICH COLLECTION MAY BE EFFECTED SHOULD THE OVERPAYMENT BE REPORTED TO THE GENERAL ACCOUNTING OFFICE FOR COLLECTION AS A CLAIM BY THE UNITED STATES AGAINST THE PAYEE. UPON SUBMISSION FROM, AND REQUEST BY, A DEPARTMENT FOR GENERAL ACCOUNTING OFFICE PREAUDIT EXAMINATION OF TRANSPORTATION BILLS OF CARRIERS WHICH ARE NOT COVERED BY THE PROVISIONS OF SECTION 322 OF THE TRANSPORTATION ACT OF 1940, SUCH BILLS MAY BE PREAUDITED BY THIS OFFICE IN ACCORDANCE WITH THE PROCEDURE EXISTING PRIOR TO THE ENACTMENT OF THE SAID ACT.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF AGRICULTURE, JANUARY 6, 1941:

THERE HAS BEEN CONSIDERED THE MATTER PRESENTED IN LETTER DATED NOVEMBER 19, 1940, FROM THE ACTING SECRETARY OF AGRICULTURE, AS FOLLOWS:

THIS DEPARTMENT HAS UNDER CONSIDERATION THE ADMINISTRATIVE AND PROCEDURAL PROBLEMS INVOLVED IN CARRYING OUT THE PROVISIONS OF SECTION 322 OF THE TRANSPORTATION ACT OF 1940, WHICH DIRECTS THE PAYMENT OF TRANSPORTATION ACCOUNTS PRIOR TO AUDIT OR SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE, AND SPECIFICALLY REITERATES THE RIGHT OF THE UNITED STATES GOVERNMENT TO DEDUCT OVERPAYMENTS TO A CARRIER FROM ANY AMOUNT SUBSEQUENTLY FOUND DUE THE CARRIER. THE COUPLING OF THESE TWO LEGISLATIVE EXPRESSIONS SEEMS CLEARLY TO INDICATE THE INTENTION OF CONGRESS TO PROVIDE FOR A MORE RAPID SETTLEMENT OF THE CLAIMS OF CARRIERS. CONSEQUENTLY, THE INTRODUCTION OF A DEPARTMENTAL PREAUDIT DESIGNED TO PROVIDE FOR THE VERIFICATION OF RATES, FREIGHT CLASSIFICATIONS, OR LAND-GRANT DEDUCTIONS WOULD, TO A LARGE MEASURE, APPEAR TO DEFEAT THE PURPOSES OF THIS LEGISLATION. IN THE DEPARTMENT OF AGRICULTURE IT HAS BEEN THE PRACTICE TO GIVE AN ADMINISTRATIVE EXAMINATION TO THE ACCOUNTS SUBMITTED BY THE CARRIERS FOR THE PURPOSE OF DETERMINING THE CORRECTNESS OF THE ACCOUNTS FROM THE STANDPOINT OF RENDITION OF SERVICE, CLAIMS FOR DAMAGES, ETC. IT IS THE INTENTION OF THE DEPARTMENT TO CONTINUE SUCH ADMINISTRATIVE EXAMINATIONS AND TO BASE THEREON THE ADMINISTRATIVE CERTIFICATIONS FOR PAYMENT WITHOUT ANY MODIFICATION OF THE PRESCRIBED CERTIFICATES APPEARING ON THE VOUCHER FORMS. AN EXPRESSION OF YOUR REACTION TO THIS PROPOSAL WOULD BE APPRECIATED.

ANOTHER POINT IN QUESTION IS HOW ADJUSTMENTS WILL BE MADE IN CASES WHERE THE POST AUDIT OF BILLS BY YOUR OFFICE DISCLOSES OVERPAYMENTS. ORDINARILY SUCH ADJUSTMENTS COULD BE MADE IN EITHER OF TWO WAYS: (1) DEDUCTIONS BY BUREAUS ON SUBSEQUENT BILLS RENDERED BY THE CARRIERS, OR (2) COLLECTIONS BY YOUR OFFICE DIRECTLY FROM THE CARRIERS, WITH DEPOSITS TO THE CREDIT OF THE APPROPRIATIONS INVOLVED AND NOTICES OF THE ACTION TAKEN TO THE BUREAUS CONCERNED. THE ADOPTION OF PLAN (1) WOULD REQUIRE MORE BOOKKEEPING ENTRIES THAN WOULD BE NECESSARY IF PLAN (2) WERE FOLLOWED. ALSO, A BUREAU WOULD BE UNABLE TO MAKE DEDUCTIONS IN THOSE CASES WHERE NO SERVICES WERE PERFORMED OR VOUCHERS SUBMITTED TO THAT BUREAU BY A PARTICULAR CARRIER AFTER OVERPAYMENTS WERE DISCLOSED. THE ADOPTION OF PLAN (2) WOULD REDUCE THE NUMBER OF NECESSARY BOOKKEEPING ENTRIES AND ONE AGENCY ( GENERAL ACCOUNTING OFFICE) WOULD NEGOTIATE WITH THE CARRIERS IN EFFECTING REFUNDS OCCASIONED BY OVERPAYMENTS.

IT IS, THEREFORE, RESPECTFULLY REQUESTED THAT THE DEPARTMENT BE ADVISED WHETHER ADJUSTMENTS ON ACCOUNT OF OVERPAYMENTS ON TRANSPORTATION VOUCHERS THROUGH COLLECTIONS BY YOUR OFFICE ARE PRECLUDED BY THE TERMS OF SECTION 322 RESERVING THE RIGHT "TO DEDUCT THE AMOUNT OF ANY OVERPAYMENT TO ANY SUCH CARRIER FROM ANY AMOUNT SUBSEQUENTLY FOUND TO BE DUE SUCH CARRIER.' IF PERMITTED BY THIS LEGISLATIVE PROVISION, IT IS STRONGLY URGED THAT THE PROCEDURE OF COLLECTION THROUGH YOUR OFFICE BE ADOPTED.

A QUESTION HAS ALSO ARISEN AS TO WHETHER THE TRANSPORTATION SECTION, CLAIMS DIVISION, OF YOUR OFFICE, WILL, ON SUBMISSION BY THIS DEPARTMENT, CONTINUE TO PREAUDIT ACCOUNTS FOR THE TRANSPORTATION "OF PERSONS OR PROPERTY FOR OR ON BEHALF OF THE UNITED STATES" BY ANY COMMON CARRIER NOT "SUBJECT TO THE INTERSTATE COMMERCE ACT, AS AMENDED; " THAT IS TO SAY, BY ANY COMMON CARRIER ENGAGED ONLY IN INTRASTATE TRANSPORTATION. EXPRESSION FROM YOU ON THIS POINT WILL ALSO BE APPRECIATED.

SECTION 322 OF THE TRANSPORTATION ACT OF 1940, TO WHICH THE ABOVE SUBMISSION PERTAINS, IS AS FOLLOWS:

PAYMENT FOR TRANSPORTATION OF THE UNITED STATES MAIL AND OF PERSONS OR PROPERTY FOR OR ON BEHALF OF THE UNITED STATES BY ANY COMMON CARRIER SUBJECT TO THE INTERSTATE COMMERCE ACT, AS AMENDED, OR THE CIVIL AERONAUTICS ACT OF 1938, SHALL BE MADE UPON PRESENTATION OF BILLS THEREFOR, PRIOR TO AUDIT OR SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE, BUT THE RIGHT IS HEREBY RESERVED TO THE UNITED STATES GOVERNMENT TO DEDUCT THE AMOUNT OF ANY OVERPAYMENT TO SUCH CARRIER FROM ANY AMOUNT SUBSEQUENTLY FOUND TO BE DUE SUCH CARRIER.

THE PROVISION THAT PAYMENT FOR TRANSPORTATION FOR OR ON BEHALF OF THE UNITED STATES BY COMMON CARRIER SUBJECT TO THE INTERSTATE COMMERCE ACT, AS AMENDED, OR THE CIVIL AERONAUTICS ACT OF 1938, SHALL BE MADE UPON PRESENTATION OF BILLS THEREFOR, PRIOR TO AUDIT AND SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE, WOULD APPEAR TO MAKE THE QUESTION AS TO THE NATURE AND THE EXTENT OF ANY ADMINISTRATIVE EXAMINATION OF SUCH BILLS PRIOR TO PAYMENT ONE FOR DETERMINATION ADMINISTRATIVELY IN THE LIGHT OF THE ACCOUNTABILITY OF THE ADMINISTRATIVE OFFICERS CERTIFYING THE BILLS AND THE DISBURSING OFFICERS MAKING THE PAYMENTS. ACCORDINGLY, THIS OFFICE MAY NOT UNDERTAKE TO DIRECT OR CONTROL THE EXTENT TO WHICH BILLS FOR SUCH SERVICE SHALL BE EXAMINED PRIOR TO PAYMENT. HOWEVER, I AGREE WITH THE VIEW EXPRESSED IN THE QUOTED LETTER, SUPRA, THAT AN ADMINISTRATIVE AUDIT DESIGNED TO PROVIDE FOR A VERIFICATION OF RATES, FREIGHT CLASSIFICATIONS, OR LAND-GRANT DEDUCTIONS, WOULD DEFEAT THE PRIMARY PURPOSE OF THE SECTION AND WOULD RESULT IN AN INCREASED ADMINISTRATIVE COST NOT WARRANTED BY ANY USEFUL PURPOSE TO BE SERVED THEREBY. ALSO, I THINK THE NATURE AND EXTENT OF THE EXAMINATION PRIOR TO PAYMENT AS SUGGESTED IN THE SUBMISSION WOULD BE IN ACCORD WITH THE INTENT AND PURPOSE OF THE SECTION. WHILE OVERPAYMENTS RESULTING FROM THE USE OF INAPPLICABLE RATES OR CLASSIFICATIONS OR THE FAILURE TO MAKE LAND-GRANT DEDUCTIONS NECESSARILY WILL RESULT IN SUSPENSIONS OR EXCEPTIONS IN THE POST AUDIT OF THE VOUCHERS COVERING SUCH PAYMENTS, IN THE MATTER OF DETERMINING THE ULTIMATE LIABILITY OF THE CERTIFYING AND DISBURSING OFFICERS IT WOULD APPEAR THAT THE PURPOSE AND EFFECT OF THE SECTION HERE INVOLVED SHOULD NOT BE OVERLOOKED.

RELATIVE TO THE MATTER OF COLLECTING ANY OVERPAYMENTS RESULTING FROM THE PROCEDURE THAT MAY BE ADOPTED UNDER THE STATUTORY PROVISION HERE CONCERNED, IT IS TO BE OBSERVED THAT UNDER THE ESTABLISHED PROCEDURE IN THE POST AUDIT OF TRANSPORTATION ACCOUNTS, THE ADMINISTRATIVE OFFICE AND THE DISBURSING OFFICER ARE ADVISED WITH AS LITTLE DELAY AS POSSIBLE, IN A NOTICE OF EXCEPTION, OF ANY DIFFERENCES FOUND IN THE ACCOUNTING AUDIT, AND, ALSO, OF ANY EXCEPTION OTHERWISE TO A PAYMENT. UNDER THIS PROCEDURE IT WOULD SEEM THAT IT SHOULD BE POSSIBLE IN MOST CASES TO RECOVER FROM AMOUNTS OTHERWISE PAYABLE ON SUBSEQUENT VOUCHERS THE AMOUNT OF ANY OVERPAYMENT BEFORE THE ACCOUNT IS READY FOR SETTLEMENT IN THIS OFFICE AND THUS TO REDUCE TO A MINIMUM THE AMOUNT CHARGEABLE AGAINST THE DISBURSING OFFICER IN THE SETTLEMENT OF HIS ACCOUNT. OF COURSE, WHERE THE DISBURSING OFFICER OR ADMINISTRATIVE OFFICE CONCERNED DOES NOT HAVE AND IS NOT LIKELY TO HAVE A SUBSEQUENT VOUCHER ON WHICH THE OVERPAYMENT MAY BE COLLECTED, THE AMOUNT OF SUCH OVERPAYMENT MAY BE REPORTED TO THIS OFFICE AS A CLAIM BY THE UNITED STATES AGAINST THE PAYEE FOR COLLECTION UNDER THE ESTABLISHED PROCEDURE. BUT SINCE THIS OFFICE IS NOT LIKELY TO HAVE HEREAFTER MANY CLAIMS OF CARRIERS AGAINST WHICH SUCH INDEBTEDNESS COULD BE RECOVERED BY SET-OFF THAT PROCEDURE SHOULD NOT BE FOLLOWED WHERE THE AMOUNT OF THE OVERPAYMENT CAN BE RECOVERED BY MEANS OF AN ADMINISTRATIVE DEDUCTION ON A SUBSEQUENT VOUCHER.

THIS OFFICE WILL COOPERATE WITH THE ADMINISTRATIVE DEPARTMENTS AND AGENCIES TO THE FULLEST EXTENT POSSIBLE, CONSISTENT WITH THE REQUIREMENTS OF LAW, IN EXPECTING THE EFFECTING OF THE NECESSARY ADJUSTMENTS IN CONNECTION WITH THE SETTLEMENT OF DISBURSING OFFICERS' ACCOUNTS. HOWEVER, IN VIEW OF THE FACT THAT THE FUNCTION OF DISBURSING MONEYS NOW IS CENTRALIZED LARGELY IN THE DIVISION OF DISBURSEMENT, TREASURY DEPARTMENT ( EXECUTIVE ORDER NO. 6166) AND IN VIEW, ALSO, OF THE PROVISION OF SECTION 322 OF THE TRANSPORTATION ACT OF 1940, RESERVING THE RIGHT OF THE UNITED STATES TO DEDUCT THE AMOUNT OF ANY OVERPAYMENT FROM ANY AMOUNT SUBSEQUENTLY FOUND DUE THE CARRIER CONCERNED, IT DOES NOT APPEAR AT PRESENT THAT THERE SHOULD BE SET UP IN THIS OFFICE A PROCEDURE FOR COLLECTION WHICH DOES NOT CONTEMPLATE THAT DISBURSING OFFICERS WILL DEDUCT, ON THEIR OWN INITIATIVE, FROM AMOUNTS AVAILABLE TO THEM, SUCH AMOUNTS AS MAY BE NECESSARY TO PROTECT THEM AGAINST DISALLOWANCES OF CREDIT IN THEIR ACCOUNTS.

WITH REFERENCE TO THE CONCLUDING PARAGRAPH OF THE LETTER QUOTED ABOVE RELATIVE TO THE MATTER OF TRANSPORTATION BILLS OF CARRIERS WHICH ARE NOT COVERED BY THE PROVISIONS OF SECTION 322 OF THE TRANSPORTATION ACT OF 1940, YOU ARE INFORMED THAT UPON SUBMISSION FROM, AND REQUEST BY, THE DEPARTMENT OF AGRICULTURE FOR PREAUDIT EXAMINATION OF SUCH BILLS, THEY MAY BE PREAUDITED BY THIS OFFICE IN ACCORDANCE WITH THE PROCEDURE EXISTING PRIOR TO THE ENACTMENT OF THE ACT HERE CONCERNED.