B-144026, OCTOBER 6, 1960, 40 COMP. GEN. 199

B-144026, OCTOBER 6, 1960, 40 COMP. GEN. 199

IMPREST FUNDS - TRANSPORTATION CHARGES AND DELIVERY CHARGES DISTINGUISHED ALTHOUGH THE USE OF IMPREST FUNDS TO PAY DRIVERS OF COMMON CARRIERS FOR TRANSPORTATION CHARGES ON SMALL PURCHASES SHIPPED C.O.D. IS NOT AUTHORIZED IN VIEW OF THE FACT THAT THE IMPREST FUND CASHIER ACTED IN GOOD FAITH, SECURED ADEQUATE RECEIPTS, AND HAS TAKEN PROMPT ACTION TO PREVENT THE PRACTICE IN THE FUTURE, REIMBURSEMENT FOR THE TRANSPORTATION CHARGES MAY BE MADE TO THE IMPREST FUND CASHIER. THE PROHIBITION AGAINST THE USE OF IMPREST FUNDS FOR THE PAYMENT OF TRANSPORTATION CHARGES IN PARAGRAPH 16-2 C-2 OF ARMY REGULATIONS 37-103 AND THE PROVISION AUTHORIZING THE USE OF IMPREST FUNDS FOR THE PAYMENT OF DELIVERY CHARGES ON SMALL PURCHASES IN PARAGRAPH 3-604-4 OF THE ARMED SERVICES PROCUREMENT REGULATION ARE NOT IN CONFLICT SINCE THE LATTER IS MERELY THE AUTHORITY FOR REIMBURSEMENT TO VENDORS FOR PREPAID DELIVERY CHARGES ON SMALL PURCHASES IN THOSE CASES WHERE THE VENDOR IS OBLIGATED TO MAKE DELIVERY, AND DOES NOT AUTHORIZE PAYMENTS TO COMMON CARRIERS FOR LINE -HAUL TRANSPORTATION CHARGES, WHICH ARE PROHIBITED. WHEN THE TERM "DELIVERY CHARGE" IS USED TO DESCRIBE PAYMENTS FOR TRANSPORTATION SERVICES, IT MEANS LOCAL CARTAGE OR DRAYAGE CHARGES WHEREAS THE TERM "TRANSPORTATION CHARGES" HAS REFERENCE TO LINE-HAUL OR INTERCITY CHARGES FOR TRANSPORTATION SERVICE PAID DIRECTLY TO THE COMMON CARRIER.

TO CAPTAIN J. E. BOHNSACK, DEPARTMENT OF THE ARMY, OCTOBER 6, 1960:

YOUR REQUEST IN LETTER OF AUGUST 29, 1960, FILE MEDFV-CF, FOR AN ADVANCE DECISION CONCERNING THE PAYMENT PROPOSED ON A VOUCHER STATED IN FAVOR OF DAVE P. KUCHARIK, IMPREST FUND CASHIER, VALLEY FORGE GENERAL HOSPITAL, PHOENIXVILLE, PENNSYLVANIA, REPRESENTING REIMBURSEMENT OF FUNDS EXPENDED BY SAID IMPREST FUND CASHIER, WAS FORWARDED HERE BY HEADQUARTERS, DEPARTMENT OF THE ARMY, OFFICE OF THE CHIEF OF FINANCE, FIELD DIVISION, INDIANAPOLIS 49, INDIANA, WITH A LETTER DATED SEPTEMBER 19, 1960, FILE FINXE-B KUCHARIK, DAVE P. ( IMPREST FUND CASHIER).

THE RECORD DISCLOSES THAT IN NINE SEPARATE INSTANCES, AS DETAILED IN PARAGRAPH 2 (C) OF YOUR LETTER OF AUGUST 29, 1960, THE IMPREST FUND CASHIER IS CLAIMING REIMBURSEMENT FOR TRANSPORTATION CHARGES WHICH WERE ADDED TO THE C.O.D. CHARGES FOR THE VALUE OF GOODS PURCHASED FROM MEDICAL SUPPLY HOUSES IN NEW YORK CITY AND NEW ROCHELLE, NEW YORK; ENGLEWOOD, NEW JERSEY; PORT KENNEDY, JENKINTOWN, AND PHILADELPHIA, PENNSYLVANIA, AND POSSIBLY OTHER POINTS OF ORIGIN, ALL OF WHICH WERE DULY PAID BY HIM TO THE DRIVERS OF THE COMMON CARRIER TRUCKS INVOLVED. IN VIEW OF THE PROHIBITION AGAINST THE USE OF IMPREST FUNDS FOR THE PAYMENT OF TRANSPORTATION CHARGES PUBLISHED IN ARMY REGULATIONS, CHAPTER 21, A.R. 37-103, PARAGRAPH 16-2 C- 2, AND IN OUR DECISION DATED JANUARY 6, 1959, 38 COMP. GEN. 462, 466, YOU ASK TO BE ADVISED WHETHER THE REIMBURSEMENT OF SUCH CHARGES RECLAIMED BY THE IMPREST FUND CASHIER ON THE VOUCHER IN QUESTION MAY BE MADE BY YOU. IN THIS CONNECTION, YOU MENTION AN APPARENT INCONSISTENCY IN THE CITED PROVISIONS OF A.R. 37 103, P. 16-2 C-2, AND THOSE OF THE ARMED SERVICES PROCUREMENT REGULATION ( ASPR), SECTION III, PROCUREMENT BY NEGOTIATIONS, PART 6, SMALL PURCHASES, SUBPARAGRAPH 3-604--- IMPREST FUNDS ( PETTY CASH) METHOD, POINTING OUT THAT IN SUBPARAGRAPH 3-604-4, IT IS PROVIDED THAT IMPREST FUNDS APPARENTLY MAY BE USED FOR THE COST OF DELIVERY OF SMALL PURCHASES, AS WELL AS FOR THE PAYMENT OF C.O.D. AND PARCEL POST COSTS.

WHILE, SUPERFICIALLY, THERE MIGHT APPEAR TO BE A CONFLICT IN THE TERMS OF THE ASPR 3-604-4, AND IN C21, AR37-103, 16-2 C-2, A CLOSER EXAMINATION OF THE PROVISIONS IN CONTEXT WITH THE LANGUAGE WHICH PRECEDES OR FOLLOWS THESE EXCERPTS, SHOWS THAT NO SUCH CONFLICT DOES, IN FACT, EXIST. FOR EXAMPLE, THE STATEMENT THAT " IMPREST FUNDS PAYMENTS FOR SUCH PURCHASES CONDITIONS FOR USE, AND THOSE OF SUBPARAGRAPH 3.604.2, ENTITLED MAY INCLUDE THE COST OF C.O.D., PARCEL POST, OR OTHER DELIVERY CHARGES" IN PARAGRAPH 3-604.4 OF THE ARMED SERVICE PROCUREMENT REGULATION MUST BE READ IN CONNECTION WITH THE TEXT OF SUBPARAGRAPH 3-604.1, ENTITLED DOCUMENTATION. THE CONDITIONS FOR USE SPECIFIED IN SUBPARAGRAPH 3.604.1, WHEN READ COLLECTIVELY, INDICATE SUCH PURCHASES OF SUPPLIES OR SERVICES ARE TO BE MADE IN THE LOCAL AREA WHERE SUCH SUPPLIES OR SERVICES ARE TO BE USED OR RENDERED. SUBPARAGRAPH 3-604.2 DEALING WITH DOCUMENTATION WITH RESPECT TO PAYMENTS FROM THE IMPREST FUND PROVIDES, AMONG OTHER THINGS, THAT THE PROCUREMENT DOCUMENT USED IN ORDERING THE SMALL PURCHASES, MAY AUTHORIZE PAYMENT UPON DELIVERY BY THE VENDOR WHEN THE VENDOR IS OBLIGATED TO MAKE DELIVERY AND IT IS ONLY UNDER SUCH CIRCUMSTANCES THAT SUBPARAGRAPH 3-604.4 PROVIDES THAT " IMPREST FUNDS PAYMENTS FOR SUCH PURCHASES MAY INCLUDE THE COST OF C.O.D., PARCEL POST, OR OTHER DELIVERY CHARGES.' OTHER WORDS, THE VENDOR MAY BE REIMBURSED FOR THE COST OF THE SUPPLIES, AND THE PARCEL POST OR OTHER DELIVERY CHARGES WHICH HE HAS ALREADY PREPAID BY A PAYMENT FROM IMPREST FUNDS, BUT WE DO NOT FIND ANYTHING IN THE REGULATIONS FOR THE USE OF IMPREST FUNDS WHICH WOULD AUTHORIZE THE PAYMENT TO A COMMON CARRIER FOR LINE-HAUL TRANSPORTATION CHARGES, SUCH AS OCCURRED IN THE NINE INSTANCES DETAILED IN PARAGRAPH 2 (C) OF YOUR LETTER REQUESTING AN ADVANCE DECISION.

ORDINARILY, WHEN THE TERM "DELIVERY CHARGES" IS USED TO DESCRIBE PAYMENTS MADE FOR TRANSPORTATION SERVICES, IT IS UNDERSTOOD TO MEAN LOCAL CARTAGE OR DRAYAGE CHARGES. ON THE OTHER HAND, WHEN ONE SPEAKS OF "TRANSPORTATION CHARGES," THE REFERENCE GENERALLY IS TO LINE-HAUL OR INTERCITY CHARGES FOR TRANSPORTATION SERVICES AS PAID DIRECTLY TO THE COMMON CARRIER PROVIDING SUCH SERVICES. IN VIEW OF THE DIFFERENCES MENTIONED, IT SEEMS CLEAR THAT THERE IS NO ACTUAL CONFLICT BETWEEN THE CITED ARMED SERVICES PROCUREMENT REGULATION AND THE ARMY REGULATIONS CONCERNING THE USE OF IMPREST FUNDS.

AS INDICATED ABOVE, IT WAS A VIOLATION OF APPLICABLE CURRENT REGULATIONS ON THE PART OF THE IMPREST FUND CASHIER TO USE SUCH FUNDS FOR SO MUCH OF THE PAYMENTS FOR WHICH REIMBURSEMENT IS NOW CLAIMED AS REPRESENTS LINE- HAUL TRANSPORTATION CHARGES AS DISCUSSED IN THE CITED PARAGRAPH 2 (C) OF YOUR SUBMISSION AND, ORDINARILY, WE COULD NOT APPROVE THE REIMBURSEMENT TO THE IMPREST FUND CASHIER OF SUCH TRANSPORTATION CHARGES, ALTHOUGH THE PAYMENTS INCLUDED IN SUCH TOTALS AS REPRESENTING THE COST OF THE GOODS PURCHASED AND THE C.O.D. FEES COULD PROPERLY BE REFUNDED TO THE PAYEE ON THE VOUCHER NAMED. IN THIS INSTANCE THE TOTAL TRANSPORTATION CHARGES INCLUDED IN THESE NINE TRANSACTIONS AGGREGATE ONLY $35.82 OUT OF THE TOTAL RECLAIMED, $360.27, OR LESS THAN TEN PERCENT OF THE TOTAL AND AVERAGING LESS THAN $4 PER SHIPMENT. THE SMALLEST TRANSPORTATION PAYMENT MENTIONED IS FOR $2.30 WHILE THE LARGEST IS $6.01. UNDER THESE CIRCUMSTANCES, WE WOULD NOT BE REQUIRED TO OBJECT TO THE REIMBURSEMENT OF THE IMPREST FUND CASHIER, SINCE HE APPARENTLY ACTED IN GOOD FAITH AND HAS SECURED ADEQUATE RECEIPTS FROM THE CARRIERS INVOLVED FOR THE PAYMENT OF THE LINE-HAUL TRANSPORTATION CHARGES IN QUESTION. HOWEVER, PROMPT ACTION SHOULD BE TAKEN TO PREVENT THE UNAUTHORIZED USE OF IMPREST FUNDS AT THIS AND OTHER DEPOTS FOR THE FUTURE.

THE VOUCHER IN QUESTION AND THE OTHER ENCLOSURES WHICH ACCOMPANIED YOUR SUBMISSION OF AUGUST 29, 1960, ARE RETURNED HEREWITH.