B-160139, DECEMBER 22, 1966, 46 COMP. GEN. 586

B-160139: Dec 22, 1966

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ARE AVAILABLE FOR THE PAYMENT OF A CLAIM ASSERTED AGAINST THE SAMOAN DEPARTMENT OF EDUCATION FOR STORAGE LOSSES OF DONATED AGRICULTURAL COMMODITIES. THE RULE THAT ONE FEDERAL AGENCY MAY NOT PAY DAMAGES TO ANOTHER PREMISED ON THE CONCEPT THAT THE OWNERSHIP OF GOVERNMENT PROPERTY IS LODGED IN A SINGLE ENTITY. THE ASSISTANT SECRETARY REQUESTED OUR OPINION AS TO WHETHER THE DEPARTMENT OF EDUCATION OF THE GOVERNMENT OF AMERICAN SAMOA IS AN AGENCY OF THE FEDERAL GOVERNMENT WITHIN THE MEANING OF THE GENERAL RULE THAT WHERE A FEDERAL AGENCY DAMAGES PROPERTY OF ANOTHER FEDERAL AGENCY. NO DISTINCTION IS MADE BETWEEN THE VARIOUS CLASSES OF ELIGIBLE RECIPIENTS IN CONNECTION WITH ASSERTING CLAIMS ON ACCOUNT OF IMPROPER DISCHARGE BY THEM OF THEIR RESPONSIBILITIES.

B-160139, DECEMBER 22, 1966, 46 COMP. GEN. 586

DEPARTMENTS AND AGENCIES - DAMAGE CLAIMS - REIMBURSEMENT PROHIBITION THE GOVERNMENT OF AMERICAN SAMOA CONSIDERED A TERRITORY AND NOT AN INSTRUMENTALITY OF THE UNITED STATES, THE REVENUES OF SAMOA, ALTHOUGH MINGLED WITH APPROPRIATED FUNDS AND GRANTS-IN-AID RECEIVED FROM THE UNITED STATES, ARE AVAILABLE FOR THE PAYMENT OF A CLAIM ASSERTED AGAINST THE SAMOAN DEPARTMENT OF EDUCATION FOR STORAGE LOSSES OF DONATED AGRICULTURAL COMMODITIES, THE RULE THAT ONE FEDERAL AGENCY MAY NOT PAY DAMAGES TO ANOTHER PREMISED ON THE CONCEPT THAT THE OWNERSHIP OF GOVERNMENT PROPERTY IS LODGED IN A SINGLE ENTITY, THE FEDERAL GOVERNMENT RATHER THAN THE VARIOUS DEPARTMENTS AND AGENCIES AND, THEREFORE, THE GOVERNMENT CANNOT SEEK REIMBURSEMENT FROM ITSELF, HAVING NO APPLICATION.

TO THE SECRETARY OF AGRICULTURE, DECEMBER 22, 1966:

BY LETTER OF SEPTEMBER 23, 1966, THE ASSISTANT SECRETARY REQUESTED OUR OPINION AS TO WHETHER THE DEPARTMENT OF EDUCATION OF THE GOVERNMENT OF AMERICAN SAMOA IS AN AGENCY OF THE FEDERAL GOVERNMENT WITHIN THE MEANING OF THE GENERAL RULE THAT WHERE A FEDERAL AGENCY DAMAGES PROPERTY OF ANOTHER FEDERAL AGENCY, FUNDS AVAILABLE TO THE FIRST MAY NOT BE USED TO PAY CLAIMS FOR DAMAGES BY THE SECOND.

THE QUESTION ARISES IN CONNECTION WITH A $19,862.93 CLAIM BY YOUR DEPARTMENT AGAINST THE SAMOAN DEPARTMENT OF EDUCATION FOR LOSSES DUE TO IMPROPER STORAGE OF COMMODITIES DONATED UNDER PROGRAMS AUTHORIZED BY LAWS CODIFIED AT SECTION 1431, TITLE 7, U.S. CODE, AND SUBSECTION 612C OF TITLE 7. THE REGULATIONS GOVERNING THE DONATIONS INVOLVED INCLUDE FEDERAL AGENCIES AND POSSESSIONS OF THE UNITED STATES AS ELIGIBLE RECIPIENTS AS WELL AS STATE AND PRIVATE ORGANIZATIONS. NO DISTINCTION IS MADE BETWEEN THE VARIOUS CLASSES OF ELIGIBLE RECIPIENTS IN CONNECTION WITH ASSERTING CLAIMS ON ACCOUNT OF IMPROPER DISCHARGE BY THEM OF THEIR RESPONSIBILITIES. SEE 6 CFR, CHAP. V, PART 503.

THE REGULATIONS THUS APPARENTLY ESTABLISH A BASIS FOR CLAIMS BY YOUR DEPARTMENT AGAINST FEDERAL AGENCIES PARTICIPATING IN THE PROGRAMS. HOWEVER, SUCH CLAIMS MAY NOT BE ASSERTED BECAUSE OF THE LONGSTANDING RULE, WHICH HAS BEEN APPLIED TO THESE PROGRAMS, THAT FUNDS OF FEDERAL DEPARTMENTS AND AGENCIES SUBJECT TO THE CONTROL OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT ARE NOT AVAILABLE FOR THE PAYMENT OF CLAIMS FOR DAMAGES TO PROPERTY OF OTHER FEDERAL GOVERNMENT DEPARTMENTS AND AGENCIES. 136949, SEPTEMBER 8, 1958. ALSO, IT HAS BEEN HELD, WHERE A SUIT COULD NOT BE MAINTAINED BY A "CREDITOR" FEDERAL AGENCY, THAT CLAIMS BY IT AGAINST AN INSTRUMENTALITY OF THE UNITED STATES GOVERNMENT MAY BE WAIVED EVEN THOUGH THE FUNDS OF THE "DEBTOR" INSTRUMENTALITY ARE NOT SUBJECT TO CONTROL OF THE ACCOUNTING OFFICERS. 25 COMP. GEN. 49, 55.

THE RULE THAT ONE FEDERAL AGENCY MAY NOT PAY DAMAGES TO ANOTHER IS PREMISED IN PART ON THE CONCEPT THAT PROPERTY OF THE VARIOUS AGENCIES AND INSTRUMENTALITIES OF THE GOVERNMENT IS NOT THE PROPERTY OF SEPARATE ENTITIES BUT RATHER OF THE GOVERNMENT AS A SINGLE ENTITY, AND THERE CAN BE NO REIMBURSEMENT BY THE GOVERNMENT FOR DAMAGES TO OR LOSS OF ITS OWN PROPERTY. IN THOSE CASES WHERE THE RULE HAS BEEN APPLIED THERE ARE UNIFORMLY INVOLVED AGENCIES OR INSTRUMENTALITIES OF THE UNITED STATES PERFORMING GOVERNMENTAL FUNCTIONS WITH FEDERAL FUNDS, AND REPLACEMENT OF THE LOSS OR REPAIR OF THE DAMAGE INCURRED WAS REQUIRED TO BE EFFECTED WITH FEDERAL FUNDS. THE QUESTION GENERALLY INVOLVED WAS WHICH GOVERNMENT AGENCY'S FUNDS WERE AVAILABLE TO MEET THE REQUIRED COSTS. 41 COMP. GEN. 235, 237. SEE ALSO 6 COMP. DEC. 74; 22 ID. 390; 6 COMP. GEN. 171; 9 ID. 263.

IN DEALING WITH THE QUESTION CONCERNING YOUR DEPARTMENT'S AUTHORITY OR DISCRETION TO CLOSE THE CASE AGAINST THE GOVERNMENT OF AMERICAN SAMOA WITHOUT ASSERTING A CLAIM, TWO CONSIDERATIONS MUST BE EXAMINED; NAMELY, WHETHER SAMOA IS AN INSTRUMENTALITY OF THE UNITED STATES AND WHETHER THE FUNDS FROM WHICH SAMOA WOULD MAKE PAYMENT OF A CLAIM ARE FEDERAL FUNDS. BOTH CONSIDERATIONS CONTAIN ANOMALOUS ASPECTS STEMMING FROM THE COMPLETE CONTROL WHICH THE UNITED STATES IS EMPOWERED TO EXERCISE OVER THE GOVERNMENT OF SAMOA.

IN THE POLITICAL SENSE, SOVEREIGNTY OF THE UNITED STATES OVER AMERICAN SAMOA BEING VIRTUALLY COMPLETE, IT MIGHT BE SAID THAT SAMOA IS AN INSTRUMENTALITY OF THE UNITED STATES. 48 U.S.C. 1661 ET SEQ. SEE ALSO S. DOC. NO. 38, JULY 17, 1961. USE OF THE TERM "INSTRUMENTALITY" IN THIS SENSE WOULD BE IN THE CONTEXT OF THE CONGRESS EXERCISING AS TO SAMOA THE COMBINED POWERS OF NATIONAL AND STATE GOVERNMENTS. SEE OKLAHOMA, K. AND M. I. RY. CO. V. BOWLING, 249 F. 592 (1918). BUT IN THIS CONTEXT, UNDER THE AGRICULTURAL COMMODITY DONATION PROGRAMS HERE INVOLVED, SAMOA WOULD BE MORE ANALOGOUS TO A STATE THAN A FEDERAL AGENCY OR INSTRUMENTALITY ORGANIZED TO CARRY OUR A GOVERNMENTAL FUNCTION. THE FEDERAL INSTRUMENTALITY FOR PROGRAM PURPOSES WOULD BE THE SECRETARY OF THE INTERIOR IN WHOM IS VESTED THE RESPONSIBILITY FOR ADMINISTERING AMERICAN SAMOA. EXECUTIVE ORDER NO. 10264, JUNE 29, 1951, 16 F.R. 6419. THE UNITED STATES HAS NOT LEGISLATED A GOVERNMENTAL STRUCTURE FOR SAMOA, BUT A TERRITORIAL GOVERNMENT HAS BEEN FUNCTIONING THERE FROM INCEPTION OF NAVAL ADMINISTRATION OF THE TERRITORY BEGINNING IN 1900 AND CONTINUING WITH THE TRANSFER OF ADMINISTRATIVE JURISDICTION TO THE SECRETARY OF THE INTERIOR. AND ALTHOUGH UNITED STATES SOVEREIGNTY REMAINS COMPLETE, THE CONGRESS HAS RECOGNIZED THE GOVERNMENT OF AMERICAN SAMOA AS HAVING SUFFICIENT STATUS TO ACCEPT ON BEHALF OF THE SAMOAN PEOPLE TRANSFER OF ALL REAL AND PERSONAL PROPERTY OWNED BY THE UNITED STATES WHICH WAS LOCATED IN AMERICAN SAMOA ON AUGUST 17, 1961. PUBLIC LAW 87-158, APPROVED AUGUST 17, 1961, 75 STAT. 392, 48 U.S.C. 1662 NOTE.

IT IS AT BEST DOUBTFUL, THEREFORE, THAT YOUR DEPARTMENT'S DEALINGS WITH THE DEPARTMENT OF EDUCATION OF THE GOVERNMENT OF AMERICAN SAMOA MAY BE SAID TO CONSTITUTE THE FEDERAL GOVERNMENT DEALING WITH ITSELF FOR PURPOSES BEING CONSIDERED HEREIN. RATHER, IT WOULD SEEM CLEAR THAT SUCH DEALINGS MUST BE VIEWED AS BEING WITH SAMOA IN A TERRITORIAL AS OPPOSED TO ANY FEDERAL CAPACITY. SUCH DISTINCTION HAS BEEN MADE BY US IN CONNECTION WITH MATTERS AFFECTING THE PAY OF A RETIRED COMMISSIONED OFFICER EMPLOYED IN A DEPARTMENT OF THE GOVERNMENT OF SAMOA. SEE B-112015, FEBRUARY 12, 1953, WHEREIN WE HELD SUCH AN OFFICER TO BE A TERRITORIAL AS DISTINGUISHED FROM UNITED STATES EMPLOYEE.

UNDER THE PATTERN OF FINANCING WHICH HAS EVOLVED FOR AMERICAN SAMOA, THREE CATEGORIES OF FUNDS ARE INVOLVED: (1) DIRECT FEDERAL APPROPRIATIONS, (2) FEDERAL GRANTS-IN-AID, AND (3) LOCAL REVENUE. THE DIRECT FEDERAL APPROPRIATION FINANCES THE ENTIRE OPERATING EXPENSES OF THE OFFICE OF THE GOVERNOR, THE LEGISLATIVE BRANCH, AND THE JUDICIAL BRANCH. ALL OTHER GOVERNMENTAL ACTIVITIES ARE FINANCED PRIMARILY BY ANNUAL FEDERAL GRANTS-IN -AID SUPPLEMENTED BY LOCAL RECEIPTS WHICH THOUGH RELATIVELY SMALL BY COMPARISON ARE NEVERTHELESS SIGNIFICANT RANGING BETWEEN 14 AND 21 PERCENT OF THE FEDERAL FUNDS PROVIDED FOR THE YEARS 1962, 1963, AND 1964. HERE AGAIN THE SITUATION IS SOMEWHAT ANOMALOUS IN TERMS OF THE CONSIDERATIONS INVOLVED. BUT, CERTAINLY, IF AMERICAN SAMOA WERE FINANCED PRIMARILY FROM LOCAL REVENUES RATHER THAN FROM FEDERAL FUNDS, THERE WOULD BE LITTLE REASON TO INCLUDE IT WITHIN THE MEANING OF THE RULE IN QUESTION, PARTICULARLY IN LIGHT OF THE FACT THAT THE CONGRESS HAS RECOGNIZED A GOVERNMENT OF AMERICAN SAMOA CAPABLE OF OWNING PROPERTY ON BEHALF OF THE SAMOAN PEOPLE. WE DO NOT BELIEVE THAT THE PREPONDERANCE OF FEDERAL FUNDS OVER LOCAL REVENUES SERVES TO ALTER THE PICTURE.

IN THE FINAL ANALYSIS, THE GRANT-IN-AID FUNDS PROVIDED BY THE FEDERAL GOVERNMENT ARE MINGLED WITH LOCAL SAMOAN REVENUES WHICH TOGETHER CONSTITUTE THE SOURCE FROM WHICH PAYMENT OF THE INSTANT CLAIM FOR DAMAGES WOULD BE MADE. WHILE IT IS TRUE THAT THE UNITED STATES IS HEAVILY COMMITTED TOWARD FINANCING THE ECONOMIC AND SOCIAL DEVELOPMENT OF SAMOA THROUGH THE MEDIUM OF GRANT FUNDS, IT WOULD BE INCONSISTENT WITH THE PHILOSOPHY UNDERLYING THE TRANSFERS OF PROPERTY ALREADY MADE AND THE GRANTS OF FEDERAL FUNDS FOR THE BENEFIT OF THE SAMOAN COMMUNITY TO CONCLUDE THAT AFTER SUCH TRANSFERS AND GRANTS THE PROPERTY AND FUNDS INVOLVED NEVERTHELESS REMAIN THOSE OF THE UNITED STATES.

IN OUR DECISION TO THE SECRETARY OF THE INTERIOR, DATED OCTOBER 12, 1961, REPORTED AT 41 COMP. GEN. 235, WE HELD THAT:

ALTHOUGH THE SAN CARLOS IRRIGATION PROJECT WHICH HAS A CLAIM AGAINST THE DEPARTMENT OF THE AIR FORCE FOR REIMBURSEMENT FOR REPAIRS TO A POWER LINE DAMAGED AS THE RESULT OF A CRASH OF A CIVIL AIR PATROL PLANE IS AN INSTRUMENTALITY OF THE UNITED STATES, THE FUNDS OF THE PROJECT AVAILABLE FOR REPAIR OF THE DAMAGE ARE NOT APPROPRIATED FUNDS BUT FUNDS OF THE PROJECT BENEFICIARIES--- THE PIMA INDIANS--- HELD IN TRUST FOR THEM BY THE GOVERNMENT AND, THEREFORE, THE RULE THAT THERE CAN BE NO REIMBURSEMENT BETWEEN DEPARTMENTS AND AGENCIES FOR DAMAGES TO OR LOSS OF PROPERTY BECAUSE THE PROPERTY BELONGS TO THE GOVERNMENT AND NOT THE SEPARATE AGENCIES AND FEDERAL FUNDS ARE INVOLVED DOES NOT PRECLUDE THE PRESENTATION OF THE DAMAGE CLAIM BY THE DEPARTMENT OF THE INTERIOR ON BEHALF OF THE PROJECT BENEFICIARIES. FOLLOWING THE RATIONALE OF THIS DECISION THERE WOULD NOT APPEAR TO BE ANY QUESTION BUT THAT THE SECRETARY OF THE INTERIOR COULD PROPERLY PRESENT A CLAIM AGAINST A FEDERAL AGENCY ON BEHALF OF THE SAMOAN PEOPLE IN THE EVENT SUCH AGENCY DAMAGED PROPERTY OF THE GOVERNMENT OF AMERICAN SAMOA. WE THINK IT NECESSARILY FOLLOWS THAT THE REVERSE SITUATION OF A FEDERAL CLAIM AGAINST THE SAMOAN GOVERNMENT MUST ALSO BE CONSTRUED AS BEING APART FROM THE GENERAL RULE AT ISSUE.

AS INDICATED IN OUR LETTER OF OCTOBER 13, 1966, WE REQUESTED THE SECRETARY OF THE INTERIOR TO FURNISH US WITH HIS VIEWS ON THIS MATTER. REPLY THERETO WE WERE ADVISED THAT THE DEPARTMENT OF THE INTERIOR AGREES THAT THE GOVERNMENT OF AMERICAN SAMOA IS NOT AN AGENCY OR INSTRUMENTALITY OF THE FEDERAL GOVERNMENT. HOWEVER, IT WAS SUGGESTED THAT THE CHIEF CONSIDERATION IN THE RULE REFERRED TO ABOVE--- THAT FUNDS OF FEDERAL DEPARTMENTS AND AGENCIES ARE NOT AVAILABLE FOR THE PAYMENT OF CLAIMS, FOR DAMAGES TO PROPERTY OF OTHER FEDERAL DEPARTMENTS AND AGENCIES--- WAS NOT WHETHER "GOVERNMENT DEPARTMENTS OR AGENCIES" ARE INVOLVED, BUT WHETHER THE ENTITY INVOLVED IS ,SUBJECT TO THE CONTROL OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT.' CONSEQUENTLY THAT DEPARTMENT URGES THAT SINCE THE GOVERNMENT OF AMERICAN SAMOA IS SUBJECT TO AN ANNUAL AUDIT BY THE GENERAL ACCOUNTING OFFICE OF THE UNITED STATES, THE GOVERNMENT OF AMERICAN SAMOA SHOULD NOT BE REQUIRED TO RIMBURSE THE DEPARTMENT OF AGRICULTURE IN THIS CASE.

WE CANNOT AGREE WITH THIS CONSTRUCTION OF THE RULE. AS INDICATED ABOVE, THE RULE IS BASED PRIMARILY ON THE CONCEPT THAT OWNERSHIP OF GOVERNMENT PROPERTY IS LODGED IN A SINGLE ENTITY RATHER THAN IN THE VARIOUS DEPARTMENTS AND AGENCIES, AND THE GOVERENMENT CANNOT, THEREFORE, SEEK REIMBURSEMENT FROM ITSELF. CONSEQUENTLY, EVEN THOUGH FUNDS OF BOTH OF THE PARTIES INVOLVED IN A CLAIM MAY BE AUDITED BY THE GENERAL ACCOUNTING OFFICE, THE ABOVE RULE CAN HAVE NO APPLICATION UNLESS BOTH PARTIES ARE AGENCIES OR DEPARTMENTS OF THE UNITED STATES GOVERNMENT.

A COPY OF THIS DECISION IS BEING FURNISHED THE SECRETARY OF THE INTERIOR.