B-151919, AUG. 16, 1963, 43 COMP. GEN. 163

B-151919: Aug 16, 1963

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IS A RENTAL PAYMENT FOR THE LEASE OF THE LINES RATHER THAN A PAYMENT FOR LONG DISTANCE TOLLS WITHIN THE MEANING OF 31 U.S.C. 680C WHICH REQUIRES CERTIFICATIONS TO SUPPORT THE PAYMENTS. SIMILARLY THE PAYMENT OF THE INTRAGOVERNMENTAL DISTRIBUTION CHARGE WHICH IS BASED ON THE NUMBER OF CALLS BETWEEN POINTS AND THE LENGTH OF TIME CONSUMED IS NOT A PAYMENT FOR LONG DISTANCE TELEPHONE CALLS AND. CERTIFICATION IS NOT REQUIRED FOR SUCH PAYMENTS. 1963: REFERENCE IS MADE TO YOUR LETTER DATED JUNE 26. TO THE EFFECT THAT THE USE OF THE TELEPHONE IN SUCH INSTANCES WAS NECESSARY IN THE INTEREST OF THE GOVERNMENT. YOU PRESENT FOR OUR CONSIDERATION THE FOLLOWING QUESTION: ARE FTS CALLS "LONG-DISTANCE TELEPHONE TOLLS" AS THAT PHRASE IS USED IN 31 U.S.C. 680A AND THE IMPLEMENTING GAO REGULATIONS?

B-151919, AUG. 16, 1963, 43 COMP. GEN. 163

TELEPHONES - BILLING PROCEDURE - LONG DISTANCE CALLS - CERTIFICATION REQUIREMENT THE FLAT RATE CHARGE AGAINST DEPARTMENTS AND AGENCIES FOR THE USE OF TELEPHONE LINES UNDER THE FEDERAL TELECOMMUNICATIONS SYSTEM, WITHOUT REGARD TO THE NUMBER OR LENGTH OF THE CALLS MADE, IS A RENTAL PAYMENT FOR THE LEASE OF THE LINES RATHER THAN A PAYMENT FOR LONG DISTANCE TOLLS WITHIN THE MEANING OF 31 U.S.C. 680C WHICH REQUIRES CERTIFICATIONS TO SUPPORT THE PAYMENTS, AND SIMILARLY THE PAYMENT OF THE INTRAGOVERNMENTAL DISTRIBUTION CHARGE WHICH IS BASED ON THE NUMBER OF CALLS BETWEEN POINTS AND THE LENGTH OF TIME CONSUMED IS NOT A PAYMENT FOR LONG DISTANCE TELEPHONE CALLS AND, THEREFORE, CERTIFICATION IS NOT REQUIRED FOR SUCH PAYMENTS.

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, AUGUST 16, 1963:

REFERENCE IS MADE TO YOUR LETTER DATED JUNE 26, 1963, REQUESTING OUR OPINION AS TO THE APPLICABILITY OF THE TELEPHONE TOLL CERTIFICATION REQUIREMENTS OF SECTION 4 OF THE INTERIOR DEPARTMENT APPROPRIATION ACT, 1940, 53 STAT. 738, 31 U.S.C. 680A, AND THE IMPLEMENTING REGULATIONS SET FORTH IN 7 GAO 5530, TO THE NEWLY ESTABLISHED FEDERAL TELECOMMUNICATIONS SYSTEM (FTS).

THE STATUTE PROVIDES AS FOLLOWS:

HEREAFTER NO PART OF ANY APPROPRIATION FOR ANY EXECUTIVE DEPARTMENT,ESTABLISHMENT, OR AGENCY SHALL BE USED FOR THE PAYMENT OF LONG- DISTANCE TELEPHONE TOLLS EXCEPT FOR THE TRANSACTION OF PUBLIC BUSINESS WHICH THE INTERESTS OF THE GOVERNMENT REQUIRE TO BE SO TRANSACTED; AND ALL SUCH PAYMENTS SHALL BE SUPPORTED BY A CERTIFICATE BY THE HEAD OF THE DEPARTMENT, ESTABLISHMENT, OR AGENCY CONCERNED, OR SUCH SUBORDINATES AS HE MAY SPECIALLY DESIGNATE, TO THE EFFECT THAT THE USE OF THE TELEPHONE IN SUCH INSTANCES WAS NECESSARY IN THE INTEREST OF THE GOVERNMENT.

YOU PRESENT FOR OUR CONSIDERATION THE FOLLOWING QUESTION:

ARE FTS CALLS "LONG-DISTANCE TELEPHONE TOLLS" AS THAT PHRASE IS USED IN 31 U.S.C. 680A AND THE IMPLEMENTING GAO REGULATIONS?

THE STATUTE PROVIDES THAT ALL PAYMENTS FOR LONG DISTANCE TELEPHONE TOLLS SHALL BE SUPPORTED BY A CERTIFICATE TO THE EFFECT THAT THE USE OF THE TELEPHONE IN SUCH INSTANCES WAS NECESSARY IN THE INTEREST OF THE GOVERNMENT. THE APPLICABILITY OF THE STATUTE IS DEFINED IN 7 GAO 5530.20 AND SPECIFICALLY EXCLUDES TELEPHONE CALLS WITHIN A METROPOLITAN EXCHANGE AREA BILLED AS MESSAGE UNITS. THE PROVISIONS OF THIS SUBSECTION DO NOT, HOWEVER, EITHER INCLUDE OR EXCLUDE, IN SPECIFIC TERMS, TELEPHONE CALLS MADE OVER LEASED LINES. THE CERTIFICATION REQUIRED BY THE STATUTE IS IS PRESCRIBED IN 7 GAO 5530.30 AND CONTAINS THE PROVISION THAT IT SHALL BE APPLICABLE TO "EACH PUBLIC VOUCHER AND EACH TRAVEL OR STATION-EXPENSE REIMBURSEMENT VOUCHER THAT INCLUDES TOLL CHARGES FOR OFFICIAL LONG DISTANCE CALLS.' THE PROVISIONS OF 7 GAO 5530.50 RELATING TO THE ADMINISTRATIVE CONTROLS OVER LONG DISTANCE TELEPHONE CALLS ARE RELATED DIRECTLY TO THE CERTIFICATION REQUIREMENTS OF 7 GAO 5530.30.

YOU EXPLAIN THAT UNDER FTS, THE GOVERNMENT, THROUGH GSA, LEASES INTERCHANGE CHANNELS, SWITCHING EQUIPMENT, LOCAL LOOPS, AND STATION EQUIPMENT FROM COMMUNICATIONS COMMON CARRIERS. GSA PAYS THE MONTHLY BILL FOR THE SYSTEM TO THE COMMUNICATIONS COMPANY UNDER PRIVATE LINE TARIFFS AT FLAT RATE CHARGES UNAFFECTED BY THE NUMBER OF CALLS MADE, AND USING AGENCIES REIMBURSE GSA FOR THESE PAYMENTS PURSUANT TO MONTHLY BILLINGS SUBMITTED TO THE AGENCIES BY GSA. THE GSA BILLINGS ARE AN INTRAGOVERNMENTAL DEVICE DESIGNED TO EQUITABLY APPORTION AMONG USING AGENCIES THE TOTAL COMMUNICATION COMPANIES CHARGES AND ARE COMPUTED IN ACCORDANCE WITH PREDETERMINED STANDARD RATES ESTABLISHED BY GSA. THIS BILLING PROCEDURE MAY RESULT IN OVER OR UNDER APPLYING THE ACTUAL COST TO THE GOVERNMENT DURING ANY GIVEN PERIOD AND ILLUSTRATES THE LACK OF A DIRECT RELATIONSHIP BETWEEN THE GSA BILLINGS AND THE ACTUAL LIABILITY OF THE GOVERNMENT IN CONNECTION WITH THE FTS.

BECAUSE THE LIABILITY OF THE GOVERNMENT UNDER THE LEASE IS ESTABLISHED AT A FLAT RATE WITHOUT REGARD TO THE NUMBER OR LENGTH OF THE CALLS MADE, IT SEEMS CLEAR THAT PAYMENT OF SUCH FLAT RATE CHARGES WOULD NOT CONSTITUTE PAYMENTS OF "LONG-DISTANCE TELEPHONE TOLLS" WITHIN THE MEANING OF THAT TERM AS USED IN 31 U.S.C. 680A. THE FLAT RATE CHARGE IS A MERE RENTAL PAYMENT FOR THE USE OF TELEPHONE LINES UNAFFECTED BY THE NUMBER OF LONG DISTANCE TELEPHONE CALLS OR THE TIME CONSUMED AND NO SEPARATE CHARGE FOR LONG DISTANCE CALLS ARE MADE. SIMILARLY, THE PAYMENT OF AN INTRAGOVERNMENTAL DISTRIBUTION OF THE FTS CHARGE TO GSA IS NOT A PAYMENT OF "LONG-DISTANCE TELEPHONE TOLLS" EVEN THOUGH SUCH DISTRIBUTIVE SHARE IS BASED ON THE NUMBER OF CALLS BETWEEN POINTS AND THE TOTAL LENGTH OF TIME CONSUMED. IN FACT, YOUR LETTER STATES THAT OTHER REASONABLE BASES FOR DISTRIBUTING THE FTS CHARGE AMONG THE AGENCIES IS CONTEMPLATED IN THE NEAR FUTURE.

IN VIEW OF OUR DETERMINATION THAT SUCH A CERTIFICATE IS NOT REQUIRED IN CONNECTION WITH THE INTRAGOVERNMENTAL DISTRIBUTIONS OF FTS CHARGES BY GSA, THE REQUIREMENT CONTAINED IN 7 GAO 5530.50 RELATING TO ADMINISTRATIVE CONTROLS OVER LONG DISTANCE CALLS WOULD NOT BE APPLICABLE. THE FACT THAT SUCH CERTIFICATE IS NOT REQUIRED FOR FTS CALLS, HOWEVER, DOES NOT LESSEN THE RESPONSIBILITY OF THE AGENCIES TO RESTRICT THE USE OF THE LEASED TELEPHONE LINES TO ESSENTIAL CALLS ON OFFICIAL BUSINESS. OF COURSE, MANY FINANCIAL MANAGEMENT OBJECTIVES, SUCH AS PROGRAM OR FUNCTION COST DISTRIBUTIONS, REQUIRE CONTROL OVER ALL LONG DISTANCE CALLS. THE AGENCIES NEED NOT, AND SHOULD NOT, HOWEVER, ESTABLISH ELABORATE CONTROL PROCEDURES IN THE BELIEF THAT THEY ARE CONTROLLING THE OVER-ALL COST TO THE GOVERNMENT. AS STATED ABOVE, THE OVER-ALL COST TO THE GOVERNMENT IS FIXED BY THE TERMS OF THE LEASE AGREEMENTS AND THE COST OF ADMINISTERING UNNECESSARY AGENCY CONTROLS CAN ONLY ADD TO AND NOT REDUCE THAT COST. APPROPRIATE REVISIONS IN OUR MANUAL WILL BE ISSUED IN THE NEAR FUTURE.