B-143906, NOV. 17, 1960

B-143906: Nov 17, 1960

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ALL THE CLAIMANTS ARE PRODUCERS UNDER THE GREAT PLAINS CONSERVATION PROGRAM (PUBLIC LAW 1021. IT WAS INTERPRETED BY THIS OFFICE THAT COST SHARES COVERING A CONTRACT ITEM COMPOSED OF TWO OR MORE COMPONENT PARTS. FOUR KINDS OF GRASS SEED ARE SHOWN AS A CONTRACT ITEM. NO MODIFICATION WOULD BE REQUIRED UNLESS THE TOTAL COST FOR THE CONTRACT ITEM AS SHOWN IN THE CONTRACT WAS INCREASED AS A RESULT OF THE HIGHER AVERAGE COSTS. AN INSTRUCTION TO ALL FIELD OFFICES UNDER THE PROGRAM IN NEBRASKA WAS ISSUED ON MAY 20. A COPY OF WHICH IS FURNISHED.'. THE DEPARTMENT OF AGRICULTURE INTERNAL AUDIT TEAM DURING A SCHEDULED INSPECTION OF YOUR OFFICE ADVISED THAT THE ABOVE PROCEDURE APPEARED TO BE IMPROPER AND IT WAS DETERMINED THAT THE PROCEDURE MUST BE TERMINATED AND A REVIEW MADE OF ALL PAYMENTS RENDERED FOR THE PURPOSE OF COLLECTING THE AMOUNTS OF OVERPAYMENT RESULTING FROM USE OF THE IMPROPER PROCEDURE.

B-143906, NOV. 17, 1960

TO MR. H. L. WALL, AUTHORIZED CERTIFYING OFFICER, UNITED STATES DEPARTMENT OF AGRICULTURE:

YOUR LETTER OF AUGUST 30, 1960, REQUESTS A DECISION WHETHER YOU MAY CERTIFY FOR PAYMENT FOUR ATTACHED RECLAIM VOUCHERS PRESENTED BY ELDON HULINSKY, COMSTOCK, NEBRASKA ($7.92), DONALD MURRAY, ARCADIA, NEBRASKA ($15.81), W. O. HARRIS, CALL AWAY, NEBRASKA ($46.36), AND DOWNING ROUNDS, ARCADIA, NEBRASKA ($343.44). ALL THE CLAIMANTS ARE PRODUCERS UNDER THE GREAT PLAINS CONSERVATION PROGRAM (PUBLIC LAW 1021, 84TH CONGRESS, 70 STAT. 1115) AND THE CLAIMS REPRESENT AMOUNTS DEDUCTED FROM APPLICATIONS FOR PAYMENT OF FEDERAL COST SHARES.

YOU STATE THAT:

"IN MAY, 1959, IT WAS INTERPRETED BY THIS OFFICE THAT COST SHARES COVERING A CONTRACT ITEM COMPOSED OF TWO OR MORE COMPONENT PARTS, SUCH AS SEED OF DIFFERENT SPECIES OF GRASS, DID NOT REQUIRE MODIFICATION OF THE CONTRACT TO COVER VARIANCE IN AVERAGE COSTS UP OR DOWN SO LONG AS THE TOTAL AMOUNT CLAIMED DID NOT EXCEED THE AMOUNT SHOWN FOR THE ENTIRE CONTRACT ITEM IN THE GREAT PLAINS CONTRACT. FOR INSTANCE, FOUR KINDS OF GRASS SEED ARE SHOWN AS A CONTRACT ITEM; SUBSEQUENTLY, PRIOR TO APPLICATION OF THE PRACTICE, THE AVERAGE COST DECREASED ON TWO SPECIES AND INCREASED ON THE OTHER TWO. NO MODIFICATION WOULD BE REQUIRED UNLESS THE TOTAL COST FOR THE CONTRACT ITEM AS SHOWN IN THE CONTRACT WAS INCREASED AS A RESULT OF THE HIGHER AVERAGE COSTS. AN INSTRUCTION TO ALL FIELD OFFICES UNDER THE PROGRAM IN NEBRASKA WAS ISSUED ON MAY 20, 1959, COVERING THIS PROCEDURE, A COPY OF WHICH IS FURNISHED.'

YOU ADVISE THAT IN MAY 1960, THE DEPARTMENT OF AGRICULTURE INTERNAL AUDIT TEAM DURING A SCHEDULED INSPECTION OF YOUR OFFICE ADVISED THAT THE ABOVE PROCEDURE APPEARED TO BE IMPROPER AND IT WAS DETERMINED THAT THE PROCEDURE MUST BE TERMINATED AND A REVIEW MADE OF ALL PAYMENTS RENDERED FOR THE PURPOSE OF COLLECTING THE AMOUNTS OF OVERPAYMENT RESULTING FROM USE OF THE IMPROPER PROCEDURE. YOU STATE THAT THE PROPER METHOD OF DETERMINING PAYMENT DUE SHOULD BE BASED ON THE AMOUNT DUE FOR EACH KIND OF GRASS SEED SEPARATELY AND WHERE THE AVERAGE COSTS INCREASED THERE WOULD BE A MODIFICATION COVERING SUCH INCREASE PRIOR TO COMMENCEMENT OF THE WORK. YOUR LETTER INDICATES THAT THIS REVIEW HAS BEEN IN PROCESS FOR SOME TIME AND IS NOW ABOUT TWO-THIRDS COMPLETED, AND THAT IT APPEARS THERE WILL BE UPWARDS OF A HUNDRED COLLECTIONS TO BE EFFECTED APPROXIMATING A TOTAL SOMEWHERE BETWEEN THREE AND FOUR THOUSAND DOLLARS.

YOU ADVISE THAT THE UNDERLYING REASON FOR ISSUANCE OF THE INSTRUCTION IN THE BEGINNING WAS TO REDUCE THE NUMBER OF CONTRACT MODIFICATIONS, THE VOLUME OF WHICH WAS TENDING TO BOG DOWN THE PROGRAM IN THE FIELD. YOU FURTHER ADVISE THAT THERE WAS NO INTENT TO CIRCUMVENT REGULATIONS OR INSTRUCTIONS AND NO CHANGE IN THE CONSERVATION PLAN OR HINDRANCE TO THE PROGRAM RESULTED; AND THAT WERE IT NOT FOR THE EXISTENCE OF THE INSTRUCTION, IN EACH CASE THE PRODUCER WOULD HAVE HAD OPPORTUNITY TO REQUEST A CONTRACT MODIFICATION FOR PAYMENT OF THE HIGHER AVERAGE COST TO WHICH HE WAS ENTITLED. YOUR LETTER INDICATES THAT THE FACT THAT THE MODIFICATION WAS NOT PREPARED WAS DUE TO NO FAULT OF THE PRODUCER AND THE WORK WAS PERFORMED IN GOOD FAITH ON THE PART OF BOTH PRODUCER AND THE SERVICE, AND ALSO THAT THE PROCEDURE AND INSTRUCTIONS HAVE SINCE BEEN CORRECTED.

THE LETTER CONTINUES:

"THE FOUR RECLAIM VOUCHERS SUBMITTED HEREWITH ARE THE FIRST RECEIVED TO DATE AND COVER DEDUCTIONS MADE FROM CURRENT VOUCHERS OF PRODUCERS AND NOT ON THE BASIS OF THE REVIEW OF PAYMENTS PREVIOUSLY MADE. THESE DEDUCTIONS WERE MADE ON ACCOUNT OF THE DETERMINATION THAT OUR PROCEDURE AND INSTRUCTIONS TO THE FIELD WERE IMPROPER. AS A RESULT OF THE DEDUCTIONS MADE TO DATE, THERE HAS ALREADY BEEN SOME INDICATION OF IMPAIRMENT OF THE OVERALL PROGRAM IN THE STATE AND THE EFFECTING OF NUMEROUS COLLECTIONS ON APPLICATIONS ALREADY PAID TO PRODUCERS WILL UNDOUBTEDLY CAUSE STRAINED RELATIONS BETWEEN PRODUCERS AND THE SERVICE.'

IF OUR DECISION IS FAVORABLE CONCERNING PAYMENT OF THE INSTANT VOUCHERS YOU REQUEST A DECISION WHETHER IT WOULD BE PERMISSIBLE TO ALLOW THE PAYMENTS OF IDENTICAL CASES TO STAND WHICH MAY OTHERWISE INVOLVE THE SUBMISSION OF CONSIDERABLE NUMBER OF RECLAIMS TO OUR OFFICE FOR DIRECT SETTLEMENT.

INASMUCH AS YOU INDICATED THAT A DEPARTMENTAL DETERMINATION HAD BEEN MADE TO COLLECT THE AMOUNTS OF OVERPAYMENTS RESULTING FROM THE USE OF THE IMPROPER PROCEDURE, WE REQUESTED THE VIEWS OF THE SECRETARY OF AGRICULTURE IN THE MATTER. BY LETTER DATED NOVEMBER 7, 1960, FROM THE ASSISTANT SECRETARY WE WERE ADVISED, IN PERTINENT PART, AS FOLLOWS:

"THE INTERPRETATION GIVEN TO THE GREAT PLAINS CONSERVATION PROGRAM REGULATIONS BY THE NEBRASKA STATE OFFICE OF THE SOIL CONSERVATION SERVICE HAS BEEN ADMINISTRATIVELY DETERMINED TO BE IMPROPER. HOWEVER, THE PAYMENTS MADE TO THE PRODUCERS DID NOT EXCEED THE AMOUNT THAT WOULD HAVE BEEN PAID HAD THERE BEEN A STRICTER AND MORE LITERAL COMPLIANCE WITH THOSE PROVISIONS OF THE REGULATIONS WHICH REQUIRE A REDUCTION FOR ANY ITEM FOR WHICH THE AVERAGE COST HAS DECREASED AND AUTHORIZE A MODIFICATION IN THE CONTRACT COVERING ANY ITEM FOR WHICH THE AVERAGE COST HAS ADVANCED. COMPUTING THE PAYMENTS HERE INVOLVED, THE STATE OFFICE MADE THE REQUIRED REDUCTIONS. IT ALSO ADJUSTED THE PAYMENTS ON ITEMS FOR WHICH THE AVERAGE COSTS HAD INCREASED, BUT IT FAILED TO MODIFY THE CONTRACTS IN THE BELIEF THAT THIS WAS UNNECESSARY SINCE THE TOTAL PAYMENTS WERE STILL WITHIN THE AMOUNTS ORIGINALLY ESTABLISHED FOR THE INSTALLATION OF THE PRACTICES INVOLVED. HAD THE CONTRACTS BEEN MODIFIED, WHICH COULD AND WOULD HAVE BEEN DONE BUT FOR THE MISTAKEN BELIEF THAT IT WAS UNNECESSARY, THERE WOULD BE NO QUESTION ABOUT THE RIGHT OF THE PRODUCERS TO THE AMOUNTS HERE INVOLVED. IT THEREFORE APPEARS THAT THE VARIANCE FROM THE REGULATIONS WAS ESSENTIALLY ONLY A TECHNICAL ONE AND SHOULD NOT PREVENT PAYMENT OF THE CLAIMS.

"IF THE PAYMENTS MAY BE ALLOWED TO STAND AS MADE, THERE WOULD BE ELIMINATED THE PROBABILITY OF SERIOUS DETRIMENT TO THE GREAT PLAINS CONSERVATION PROGRAM, RESULTING FROM STRAINED RELATIONS BETWEEN THE PRODUCERS AND THE SOIL CONSERVATION SERVICE. ACCORDINGLY, IF PAYMENT OF THE CLAIMS SUBMITTED TO YOU BY THE CERTIFYING OFFICER MAY LEGALLY BE MADE, IT IS REQUESTED THAT YOUR APPROVAL FOR HIM TO CERTIFY THEM BE GIVEN.'

INASMUCH AS THE PRODUCERS WERE WITHOUT FAULT; THE WORK WAS PERFORMED IN GOOD FAITH; THE TOTAL PAYMENTS UNDER THE CONTRACTS WERE STILL WITHIN THE AMOUNTS ORIGINALLY ESTABLISHED FOR THE INSTALLATION OF THE PRACTICES INVOLVED; AND SINCE THE CONTRACTS COULD HAVE AND PRESUMABLY WOULD HAVE BEEN MODIFIED BUT FOR THE MISTAKEN BELIEF THAT IT WAS UNNECESSARY TO DO SO, THE INSTANT VOUCHERS MAY BE CERTIFIED FOR PAYMENT, IF OTHERWISE PROPER.

AS TO YOUR QUESTION WHETHER IT WOULD BE PERMISSIBLE TO ALLOW THE PAYMENTS IN IDENTICAL CASES TO STAND, YOU ARE NOT ENTITLED TO A DECISION THEREON, SINCE THIS QUESTION DOES NOT INVOLVE VOUCHERS PRESENTED TO YOU FOR CERTIFICATION IN CONNECTION WITH CURRENT PAYMENTS. SEE 26 COMP. GEN. 797. HOWEVER, THE ASSISTANT SECRETARY IN HIS LETTER OF NOVEMBER 7, REQUESTED THAT WE ANSWER THIS QUESTION. THEREFORE, YOU ARE ADVISED THAT FOR THE SAME REASONS WE AUTHORIZED PAYMENT OF THE INSTANT VOUCHERS, WE WOULD HAVE NO OBJECTION TO ALLOWING PAYMENTS IN IDENTICAL CASES TO STAND, IF SUCH PAYMENTS ARE OTHERWISE PROPER.