B-164094, MAY 22, 1968, 47 COMP. GEN. 674

B-164094: May 22, 1968

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CHECKS - DISHONORED - PENALTY CHARGES - DISPOSITION ALTHOUGH GENERALLY THE PENALTY CHARGES COLLECTED BY THE GOVERNMENT OF THE DISTRICT OF COLUMBIA UNDER PUBLIC LAW 89-208 TO COVER THE COST OF HANDLING DISHONORED CHECKS ARE. THE CHARGES COLLECTED BY THE DISTRICT UNEMPLOYMENT COMPENSATION BOARD ARE NOT. THE PENALTY CHARGES COLLECTED BY THE BOARD ARE FOR DEPOSIT IN THE TREASURY AS MISCELLANEOUS RECEIPTS OF THE UNITED STATES. UNLESS STATUTORY AUTHORITY IS OBTAINED TO OTHERWISE DISPOSE OF COLLECTIONS. 1968: REFERENCE IS MADE TO YOUR LETTER OF APRIL 18. PUBLIC LAW 89-208 AUTHORIZES AND DIRECTS THE COMMISSIONERS OF THE DISTRICT OF COLUMBIA TO PRESCRIBE A PENALTY TO BE PAID BY ANY PERSON WHO GIVES A CHECK IN PAYMENT FOR ANY OBLIGATION DUE THE GOVERNMENT OF THE DISTRICT OF COLUMBIA AND SUCH CHECK IS SUBSEQUENTLY DISHONORED OR NOT DULY PAID.

B-164094, MAY 22, 1968, 47 COMP. GEN. 674

CHECKS - DISHONORED - PENALTY CHARGES - DISPOSITION ALTHOUGH GENERALLY THE PENALTY CHARGES COLLECTED BY THE GOVERNMENT OF THE DISTRICT OF COLUMBIA UNDER PUBLIC LAW 89-208 TO COVER THE COST OF HANDLING DISHONORED CHECKS ARE, ABSENT PROVISION IN THE LAW FOR DISPOSITION OF THE FUNDS, FOR DEPOSIT TO THE CREDIT OF THE DISTRICT, THE CHARGES COLLECTED BY THE DISTRICT UNEMPLOYMENT COMPENSATION BOARD ARE NOT. THE BOARD RECEIVES ITS ADMINISTRATIVE FUNDS FROM THE BUREAU OF EMPLOYMENT SECURITY, UNITED STATES DEPARTMENT OF LABOR, PURSUANT TO 42 U.S.C. 502, AND RETURNS UNUSED GRANTS TO THE BUREAU AND, THEREFORE, THE COST OF HANDLING DISHONORED CHECKS BORNE FROM FEDERAL GRANT FUNDS, THE PENALTY CHARGES COLLECTED BY THE BOARD ARE FOR DEPOSIT IN THE TREASURY AS MISCELLANEOUS RECEIPTS OF THE UNITED STATES, UNLESS STATUTORY AUTHORITY IS OBTAINED TO OTHERWISE DISPOSE OF COLLECTIONS.

TO THE DIRECTOR, DISTRICT UNEMPLOYMENT COMPENSATION BOARD, MAY 22, 1968:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 18, 1968, REQUESTING OUR DECISION REGARDING THE DISPOSITION TO BE MADE OF FUNDS CONSISTING OF DISHONORED CHECK CHARGES LEVIED PURSUANT TO PUBLIC LAW 89-208, APPROVED SEPTEMBER 28, 1965, 79 STAT. 844.

PUBLIC LAW 89-208 AUTHORIZES AND DIRECTS THE COMMISSIONERS OF THE DISTRICT OF COLUMBIA TO PRESCRIBE A PENALTY TO BE PAID BY ANY PERSON WHO GIVES A CHECK IN PAYMENT FOR ANY OBLIGATION DUE THE GOVERNMENT OF THE DISTRICT OF COLUMBIA AND SUCH CHECK IS SUBSEQUENTLY DISHONORED OR NOT DULY PAID. THIS ACT FURTHER PROVIDES THAT THE AMOUNT OF THE PENALTY PRESCRIBED SHALL BE BASED ON THE APPROXIMATE COST BORNE BY THE GOVERNMENT OF THE DISTRICT OF COLUMBIA IN HANDLING AND COLLECTING SUCH DISHONORED CHECKS.

PURSUANT TO THAT LAW THE DISTRICT UNEMPLOYMENT COMPENSATION BOARD (HEREINAFTER REFERRED TO AS THE BOARD) BEGAN COLLECTING A $5 CHARGE ON CHECKS WHICH ARE SUBMITTED IN PAYMENT OF EMPLOYER CONTRIBUTIONS AND WHICH SUBSEQUENTLY ARE DISHONORED. THE AMOUNTS THUS COLLECTED HAVE BEEN DEPOSITED IN THE TREASURY OF THE UNITED STATES TO THE CREDIT OF THE BOARD'S SUSPENSE ACCOUNT AND AS OF DECEMBER 31, 1967, THE COLLECTIONS TOTALED $1,300.

YOU STATE THAT MANY OTHER STATE EMPLOYMENT SECURITY AGENCIES COLLECT SIMILAR PENALTIES AND THAT SUCH COLLECTIONS, IN MOST INSTANCES ARE USED AT THE DISCRETION OF THE AGENCY HEAD FOR MISCELLANEOUS ADMINISTRATIVE EXPENDITURES. YOU STATE ALSO THAT IT HAS BEEN THE INTENTION OF THE BOARD TO ACCUMULATE THE COLLECTIONS FROM THE DISHONORED CHECK CHARGE AND TO REQUEST AUTHORITY FROM CONGRESS, WHEN IT COULD BE HANDLED EXPEDITIOUSLY, TO USE THE FUNDS FOR PAYMENT OF CERTAIN ADMINISTRATIVE OR OPERATING COSTS.

IN VIEW OF THE FOREGOING OUR DECISION IS ASKED ON THE FOLLOWING QUESTIONS:

(1) MAY THE DISTRICT UNEMPLOYMENT COMPENSATION BOARD DEPOSIT FUNDS COLLECTED PURSUANT TO THE PROVISIONS OF SECTION 1-264, D.C. CODE INTO THE UNITED STATES TREASURY TO THE CREDIT OF ACCOUNT 80 OX 6672 SUSPENSE, DISTRICT OF COLUMBIA, D.O. 4857 AND ACCUMULATE THESE FUNDS UNTIL AUTHORIZED BY THE CONGRESS TO USE THEM?

(2) IF THE ANSWER TO QUESTION ONE IS "NO" SHOULD THESE FUNDS BE DEPOSITED TO AN ACCOUNT WHICH WILL ACCRUE TO THE CREDIT OF THE GOVERNMENT OF THE DISTRICT OF COLUMBIA OR TO THE CREDIT OF THE UNITED STATES GOVERNMENT?

PUBLIC LAW 89-208 DOES NOT SPECIFICALLY PROVIDE FOR THE DISPOSITION OF THE PENALTY CHARGES BUT SINCE SUCH CHARGES ARE BASED ON COSTS INCURRED BY THE GOVERNMENT OF THE DISTRICT OF COLUMBIA IN HANDLING THE DISHONORED CHECKS IT SEEMS EVIDENT THAT IN THE ORDINARY CASE SUCH CHARGES WOULD BE FOR DEPOSITING INTO THE TREASURY TO THE CREDIT OF THE GOVERNMENT OF THE DISTRICT OF COLUMBIA.

IN THE CASE OF THE BOARD, HOWEVER, IT IS NOTED THAT THE BOARD RECEIVES ALL OF ITS ADMINISTRATIVE FUNDS THROUGH GRANTS FROM THE BUREAU OF EMPLOYMENT SECURITY, UNITED STATES DEPARTMENT OF LABOR, PURSUANT TO SECTION 302 OF THE SOCIAL SECURITY ACT, 42 U.S.C. 502. ALL UNUSED GRANTS ARE REQUIRED TO BE RETURNED TO THE BUREAU OF EMPLOYMENT SECURITY AT THE END OF EACH QUARTER. UNDER THESE CIRCUMSTANCES THE BOARD'S COST IN HANDLING DISHONORED CHECKS IS BORNE FROM FEDERAL GRANT FUNDS RATHER THAN FROM FUNDS APPROPRIATED FOR THE GOVERNMENT OF THE DISTRICT OF COLUMBIA. CONSEQUENTLY, IT IS OUR VIEW THAT THE DISHONORED CHECK CHARGES COLLECTED BY THE BOARD PROPERLY SHOULD BE DEPOSITED IN THE TREASURY AS MISCELLANEOUS RECEIPTS TO THE CREDIT OF THE UNITED STATES GOVERNMENT. THE FACT THAT CERTAIN STATES MAY AUTHORIZE SIMILAR FUNDS COLLECTED UNDER STATE LAW TO BE USED TO AUGMENT THE FEDERAL GRANT FUNDS ALLOCATED TO THEM APPEARS TO BE A MATTER FOR THE STATE TO DETERMINE AND SEEMS TO US TO BE IMMATERIAL INSOFAR AS THE DISPOSITION OF THE PENALTY CHARGES COLLECTED BY THE BOARD ARE CONCERNED.

WHILE WE WOULD NOT FEEL COMPELLED TO OBJECT TO RETENTION OF THE CHARGES IN THE SUSPENSE ACCOUNT FOR A REASONABLE TIME SO THAT THE MATTER MIGHT BE PRESENTED TO AND CONSIDERED BY THE CONGRESS, IN VIEW OF THE MANNER IN WHICH PAYMENT OF THE BOARD'S ADMINISTRATIVE EXPENSES NOW IS PROVIDED FOR WE SEE NO CONVINCING ARGUMENT THAT COULD BE PRESENTED TO THE CONGRESS IN SUPPORT OF THE BOARD'S WISHES IN THIS MATTER.

ACCORDINGLY, IT IS OUR VIEW THAT THE DISHONORED CHECK CHARGES ACCUMULATED BY THE BOARD SHOULD NOW BE DEPOSITED IN THE TREASURY AS MISCELLANEOUS RECEIPTS OF THE UNITED STATES AND THAT FUTURE COLLECTIONS SHOULD LIKEWISE BE SO DEPOSITED UNLESS AND UNTIL STATUTORY AUTHORITY IS OBTAINED TO OTHERWISE DISPOSE OF SUCH COLLECTIONS.