B-148004, AUG. 12, 1970

B-148004: Aug 12, 1970

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TO CNA INSURANCE: REFERENCE IS MADE TO YOUR LETTER OF APRIL 29. YOU WERE FORWARDED A COPY OF THE APPLICABLE BOND WITH THE AMERICAN CASUALTY COMPANY. TEN LISTED DOCUMENTS RELATIVE TO THE INDEBTEDNESS WERE SENT TO YOUR REPRESENTATIVE. THERE IS ENCLOSED A COPY OF A LETTER DATED JANUARY 8. WHICH DOES NOT SEEM TO HAVE BEEN PREVIOUSLY FURNISHED TO YOU OR TO MR. THIS LETTER EVALUATED INFORMATION RECEIVED IN CORRESPONDENCE FROM MEMBERS OF CONGRESS WHICH DOUBTLESS IS THE SAME CORRESPONDENCE TO WHICH YOU REFERRED IN YOUR LETTER OF APRIL 29. IT WAS CONCLUDED THAT WE COULD NOT RECOGNIZE THE INFORMATION RECEIVED AS ADEQUATE JUSTIFICATION FOR EXECUTING THE LETTER CONTRACT OF JANUARY 17. SINCE THERE WAS NO AUTHORITY FOR THE EXECUTION OF THE CONTRACT.

B-148004, AUG. 12, 1970

ACCOUNTABLE OFFICERS -- SURETY LIABILITY REQUEST TO BONDING FIRM OF ACCOUNTABLE OFFICER OF COMMISSION ON FINE ARTS REQUESTING PAYMENT OF INDEBTEDNESS OF CERTIFYING OFFICER ARISING OUT OF ILLEGAL PAYMENT.

TO CNA INSURANCE:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 29, 1970, TO MR. ALLEN R. VOSS, ASSOCIATE DIRECTOR, UNITED STATES GENERAL ACCOUNTING OFFICE IN WHICH YOU DECLINED PAYMENT OF $1,000 IN SETTLEMENT OF THE ACCOUNTS OF CHARLES H. ATHERTON, AUTHORIZED CERTIFYING OFFICER, COMMISSION OF FINE ARTS IN ACCORDANCE WITH THE DEMAND ON SURETY MADE UNDER CERTIFICATE OF SETTLEMENT NO. CD 104, OCTOBER 15, 1969, YOUR CLAIM NO. 96-102894.

IN ACCORDANCE WITH YOUR REQUEST OF NOVEMBER 6, 1969, YOU WERE FORWARDED A COPY OF THE APPLICABLE BOND WITH THE AMERICAN CASUALTY COMPANY, READING, PENNSYLVANIA, AND ACCOMPANYING PAPERS ON NOVEMBER 21, 1969. ALSO, ON JANUARY 29, 1970, TEN LISTED DOCUMENTS RELATIVE TO THE INDEBTEDNESS WERE SENT TO YOUR REPRESENTATIVE, MR. EDWARD A. HUTYA, 8728 COLESVILLE ROAD, SILVER SPRING, MARYLAND. ACCORDINGLY, WE DO NOT THINK IT NECESSARY TO REPEAT THE DETAILS OF THE INDEBTEDNESS AT THIS TIME.

THERE IS ENCLOSED A COPY OF A LETTER DATED JANUARY 8, 1968, B-148004, TO THE HONORABLE WILLIAM WALTON, CHAIRMAN, COMMISSION OF FINE ARTS, WHICH DOES NOT SEEM TO HAVE BEEN PREVIOUSLY FURNISHED TO YOU OR TO MR. HUTYA. THIS LETTER EVALUATED INFORMATION RECEIVED IN CORRESPONDENCE FROM MEMBERS OF CONGRESS WHICH DOUBTLESS IS THE SAME CORRESPONDENCE TO WHICH YOU REFERRED IN YOUR LETTER OF APRIL 29, 1970. IT WAS CONCLUDED THAT WE COULD NOT RECOGNIZE THE INFORMATION RECEIVED AS ADEQUATE JUSTIFICATION FOR EXECUTING THE LETTER CONTRACT OF JANUARY 17, 1966.

SINCE THERE WAS NO AUTHORITY FOR THE EXECUTION OF THE CONTRACT, THERE WAS NO AUTHORITY FOR CERTIFYING THE VOUCHER COVERING PAYMENT OF THE AMOUNT OF $1,000 AS PROVIDED IN THE CONTRACT. APPARENTLY, WITH REFERENCE TO THAT CERTIFICATION, YOUR LETTER STATES:

"WHETHER OR NOT THIS ACTION WAS A BREACH OF THE FAITHFUL PERFORMANCE OF DUTIES OF THE PRINCIPAL IS A MOOT QUESTION, FOR THE U.S. DEPARTMENT OF THE INTERIOR AND/OR THE COMMISSION OF FINE ARTS HAS NOT SUFFERED A LOSS. OBVIOUSLY, ALL PARTIES AT INTEREST RECEIVED THE FULL BENEFIT OF THAT DISBURSEMENT."

UNDER THE TERMS OF THE BOND AND THE APPLICABLE STATUTE, THE QUESTION OF WHETHER ALL PARTIES HAVE RECEIVED THE FULL BENEFIT OF THE DISBURSEMENT IS NOT FOR CONSIDERATION.

SECTION 2 OF THE BOND PROVIDES:

"SECTION 2. FAITHFUL PERFORMANCE OF THE DUTIES.--THE TERM 'FAITHFUL PERFORMANCE OF THE DUTIES' SHALL INCLUDE THE PROPER ACCOUNTING FOR ALL FUNDS OR PROPERTY RECEIVED BY REASON OF THE POSITION OR EMPLOYMENT OF THE INDIVIDUAL OR INDIVIDUALS BONDED HEREBY AND ALL DUTIES AND RESPONSIBILITIES NOW OR HEREAFTER IMPOSED UPON SUCH INDIVIDUAL OR INDIVIDUALS BY LAW OR BY REGULATION ISSUED PURSUANT TO LAW. THE TERM 'REGULATION' SHALL INCLUDE ANY WRITTEN RULE, ORDER OR INSTRUCTION ISSUED PURSUANT TO LAW."

IN ACCORDANCE WITH THE PROVISIONS OF 31 U.S.C. 82C A CERTIFYING OFFICER IS " *** HELD ACCOUNTABLE FOR AND REQUIRED TO MAKE GOOD TO THE UNITED STATES THE AMOUNT OF ANY ILLEGAL, IMPROPER, OR INCORRECT PAYMENT RESULTING FROM ANY FALSE, INACCURATE, OR MISLEADING CERTIFICATE MADE BY HIM, AS WELL AS FOR ANY PAYMENT PROHIBITED BY LAW OR WHICH DID NOT REPRESENT A LEGAL OBLIGATION UNDER THE APPROPRIATION OR FUND INVOLVED *** ."

SINCE THE PAYMENT IN THIS CASE DID NOT REPRESENT A LEGAL OBLIGATION UNDER THE APPROPRIATION OR FUND INVOLVED, IT IS CLEAR THAT THE COLLECTION UNDER THE TERMS OF THE BOND OF THE $1,000 CERTIFIED FOR PAYMENT IS PROPER.

IT IS THEREFORE REQUESTED THAT THE AMOUNT OF $1,000 BE FORWARDED WITHOUT DELAY IN ORDER THAT REFERRAL OF THE MATTER TO THE DEPARTMENT OF JUSTICE FOR COLLECTION ACTION WILL BE UNNECESSARY.