B-171457, FEB 25, 1971, 50 COMP GEN 589

B-171457: Feb 25, 1971

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IS SUBMITTED. MAY NOT BE REVISED TO MAKE PAYMENT FROM THE APPROPRIATION CURRENT AT THE TIME THE VOUCHER IS APPROVED IN ORDER TO ELIMINATE HOLDING THE OBLIGATED APPROPRIATION ACCOUNT OPEN BEYOND THE CLOSE OF A NORMAL FISCAL YEAR. THE CONTRACTUAL OBLIGATION FOR PAYMENT OF AN ATTORNEY OCCURS AT THE TIME HE IS APPOINTED. THE FEE PAYABLE IS CHARGEABLE TO THE APPROPRIATION FOR THE FISCAL YEAR IN WHICH THE OBLIGATION WAS INCURRED. 1971: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 2. IT IS STATED THAT AT PRESENT PAYMENTS TO AN ATTORNEY ENTITLED TO COMPENSATION UNDER THE ACT ARE MADE FROM THE APPROPRIATION CURRENT AT THE TIME THE ATTORNEY IS APPOINTED BY THE COURT. REGARDLESS OF THE DATE ON WHICH A VOUCHER IS SUBMITTED.

B-171457, FEB 25, 1971, 50 COMP GEN 589

COURTS - CRIMINAL JUSTICE ACT OF 1964 - ATTORNEY FEES - APPROPRIATION CHARGEABLE THE ACCOUNTING PROCEDURE EMPLOYED BY THE ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTS WITH RESPECT TO PAYING COURT-APPOINTED ATTORNEYS UNDER THE PROVISIONS OF THE CRIMINAL JUSTICE ACT OF 1964 FROM THE APPROPRIATION CURRENT AT THE TIME OF THE APPOINTMENT REGARDLESS OF THE DATE THE VOUCHER, SUBJECT TO COURT REVIEW, IS SUBMITTED, MAY NOT BE REVISED TO MAKE PAYMENT FROM THE APPROPRIATION CURRENT AT THE TIME THE VOUCHER IS APPROVED IN ORDER TO ELIMINATE HOLDING THE OBLIGATED APPROPRIATION ACCOUNT OPEN BEYOND THE CLOSE OF A NORMAL FISCAL YEAR. THE CONTRACTUAL OBLIGATION FOR PAYMENT OF AN ATTORNEY OCCURS AT THE TIME HE IS APPOINTED, EVEN THOUGH THE EXACT AMOUNT OF THE OBLIGATION REMAINS TO BE DETERMINED; AND PURSUANT TO SECTIONS 3732 AND 3679, REVISED STATUTES, AND 41 U.S.C. 11; 31 ID. 665(A); ID. 712A, THE FEE PAYABLE IS CHARGEABLE TO THE APPROPRIATION FOR THE FISCAL YEAR IN WHICH THE OBLIGATION WAS INCURRED.

TO THE DIRECTOR, ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTS, FEBRUARY 25, 1971:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 2, 1970, REQUESTING OUR CONCURRENCE WITH A REVISED ACCOUNTING PROCEDURE PROPOSED BY YOUR OFFICE WITH RESPECT TO PAYMENTS TO COURT-APPOINTED ATTORNEYS UNDER THE PROVISIONS OF THE CRIMINAL JUSTICE ACT, 18 U.S.C. 3006A, AS AMENDED.

IT IS STATED THAT AT PRESENT PAYMENTS TO AN ATTORNEY ENTITLED TO COMPENSATION UNDER THE ACT ARE MADE FROM THE APPROPRIATION CURRENT AT THE TIME THE ATTORNEY IS APPOINTED BY THE COURT, REGARDLESS OF THE DATE ON WHICH A VOUCHER IS SUBMITTED. ACCORDING TO YOUR LETTER, THE CASES OFTEN INVOLVE PROTRACTED LITIGATION, AND IT IS FREQUENTLY NECESSARY TO HOLD AN APPROPRIATION ACCOUNT OPEN FOR SUBSTANTIAL PERIODS OF TIME BEYOND THE CLOSE OF A NORMAL FISCAL YEAR DUE TO RESULTANT DELAYS IN THE SUBMISSION OF VOUCHERS. YOUR PROPOSAL INVOLVES PAYING THE ATTORNEYS FROM THE APPROPRIATION CURRENT AS OF THE DATE ON WHICH THE COURT, PURSUANT TO ITS STATUTORY DUTY TO REVIEW THE PROPRIETY OF THE VOUCHER, APPROVES PAYMENT.

UNDER CURRENT PROCEDURES, UPON THE APPOINTMENT OF AN ATTORNEY BY THE COURT, A COPY OF THE ORDER OF APPOINTMENT IS SENT TO YOUR OFFICE FOR THE PURPOSE OF ESTIMATING THE OBLIGATION TO BE CHARGED AGAINST THE CURRENT APPROPRIATION. THIS ESTIMATE MADE BY YOUR OFFICE IS BASED ON PAST AVERAGE COSTS PER CASE AND THE FACT THAT THE ACT SETS DOLLAR LIMITS ON THE AMOUNT OF COMPENSATION A COURT-APPOINTED ATTORNEY MAY RECEIVE.

IT IS YOUR POSITION THAT IT IS NOT NECESSARY TO CONSIDER THE ORDER OF APPOINTMENT AS CONSTITUTING A CONTRACTUAL OBLIGATION OF THE GOVERNMENT WHICH MUST BE CHARGED TO THE CURRENT FISCAL YEAR APPROPRIATION. YOU STATE:

*** WHILE THE APPOINTMENT OF SUCH AN ATTORNEY MAY BE CONSIDERED AS CONSTITUTING A CONTRACT TO PAY FOR SUCH SERVICES, PAYMENT IS NOT AUTOMATIC. THE JUDGE MUST REVIEW THE VOUCHER FOR PROPRIETY AND MAY APPROVE OR DENY IT AS GIVEN OR MAY APPROVE IT IN A LESSER AMOUNT. ***

UNDER THE PROPOSED ACCOUNTING PROCEDURE, THE DATE OF THE COURT'S APPROVAL OF THE VOUCHER FOR PAYMENT WOULD CONSTITUTE THE MOMENT OF CONTRACTUAL LIABILITY, AND THE APPROPRIATION THEN CURRENT WOULD BE CHARGED WITH SUCH LIABILITY. YOU CITE 46 COMP. GEN. 895 (1967), AS A CASE IN WHICH WE APPROVED INSTITUTION OF A SIMILAR REVISED PROCEDURE.

CONSIDERATION OF THE PROPERTY OF THE PROPOSED REVISED PROCEDURE IN QUESTION NECESSARILY INVOLVES THE PROVISIONS OF SECTIONS 3732 AND 3679. REVISED STATUTES, AS AMENDED, AND SECTION 1 OF THE ACT OF JULY 6, 1949, 63 STAT. 407, DERIVED FROM SECTION 3690, REVISED STATUTES, CODIFIED AS 41 U.S.C. 11, 31 ID. 665(A), ID. 712A, RESPECTIVELY, IN PERTINENT PART AS FOLLOWS:

NO CONTRACT OR PURCHASE ON BEHALF OF THE UNITED STATES SHALL BE MADE, UNLESS THE SAME IS AUTHORIZED BY LAW OR IS UNDER AN APPROPRIATION ADEQUATE TO ITS FULFILLMENT *** .

NO OFFICER OR EMPLOYEE OF THE UNITED STATES SHALL MAKE OR AUTHORIZE AN EXPENDITURE FROM OR CREATE OR AUTHORIZE AS OBLIGATION UNDER ANY APPROPRIATION OR FUND IN EXCESS OF THE AMOUNT AVAILABLE THEREIN; NOR SHALL ANY SUCH OFFICER OR EMPLOYEE INVOLVE THE GOVERNMENT IN ANY CONTRACT OR OTHER OBLIGATION, FOR THE PAYMENT OF MONEY FOR ANY PURPOSE, IN ADVANCE OF APPROPRIATIONS MADE FOR SUCH PURPOSE, UNLESS SUCH CONTRACT OR OBLIGATION IS AUTHORIZED BY LAW.

EXCEPT AS OTHERWISE PROVIDED BY LAW, ALL BALANCES OF APPROPRIATIONS CONTAINED IN THE ANNUAL APPROPRIATION BILLS AND MADE SPECIFICALLY FOR THE SERVICE OF ANY FISCAL YEAR SHALL ONLY BE APPLIED TO THE PAYMENT OF EXPENSES PROPERLY INCURRED DURING THAT YEAR, OR TO THE FULFILLMENT OF CONTRACTS PROPERLY MADE WITHIN THAT YEAR.

THESE STATUTES EVIDENCE A PLAIN INTENT ON THE PART OF THE CONGRESS TO PROHIBIT FEDERAL OFFICERS OR EMPLOYEES, UNLESS OTHERWISE AUTHORIZED BY LAW, FROM MAKING CONTRACTS INVOLVING THE GOVERNMENT IN OBLIGATIONS FOR EXPENDITURES OR LIABILITIES BEYOND THOSE CONTEMPLATED AND AUTHORIZED FOR THE PERIOD OF AVAILABILITY OF AND WITHIN THE AMOUNT OF THE APPROPRIATION UNDER WHICH THEY ARE MADE; TO KEEP ALL THE DEPARTMENTS OF THE GOVERNMENT, IN THE MATTER OF INCURRING OBLIGATIONS FOR EXPENDITURES, WITHIN THE LIMITS AND PURPOSES OF APPROPRIATIONS ANNUALLY PROVIDED FOR CONDUCTING THEIR LAWFUL FUNCTIONS, AND TO PROHIBIT ANY OFFICER OR EMPLOYEE OF THE GOVERNMENT FROM INVOLVING THE GOVERNMENT IN ANY CONTRACT OR OTHER OBLIGATION FOR THE PAYMENT OF MONEY FOR ANY PURPOSE, IN ADVANCE OF APPROPRIATIONS MADE FOR SUCH PURPOSE; AND TO RESTRICT THE USE OF ANNUAL APPROPRIATIONS TO EXPENDITURES REQUIRED FOR THE SERVICE OF THE PARTICULAR FISCAL YEAR FOR WHICH THEY ARE MADE. 42 COMP. GEN. 272 (1962.)

THE FOLLOWING PROVISION IS CONTAINED IN THE VARIOUS ORDER OF APPOINTMENT FORMS USED BY THE COURTS UNDER THE CRIMINAL JUSTICE ACT (CJA FORMS 1, 2, 3, AND 11):

THE SAID ATTORNEY OR BAR ASSOCIATION OR LEGAL AID AGENCY WHICH MADE THE ATTORNEY AVAILABLE IS AUTHORIZED, PURSUANT TO THE PROVISIONS OF THE CRIMINAL JUSTICE ACT OF 1964, TO PRESENT TO THE COURT A CLAIM FOR COMPENSATION AND REIMBURSEMENT FOR EXPENSES OF REPRESENTATION REASONABLY INCURRED.

UNDER THIS PROVISION, IT IS CLEAR THAT FROM THE TIME OF THE ATTORNEY'S APPOINTMENT A CONTRACTUAL OBLIGATION EXISTS ON THE PART OF THE GOVERNMENT TO PAY THE REASONABLE COSTS OF THE REPRESENTATION, AND THAT THE SUBSEQUENT COURT REVIEW OF THE VOUCHER IS ONLY FOR THE PURPOSE OF DETERMINING THAT THE ACTUAL COSTS CLAIMED TO HAVE BEEN INCURRED WERE NECESSARILY INCURRED AND ARE IN FACT REASONABLE. SEE UNITED STATES V POPE, 251 F. SUPP. 234, 238 (1966). UNDER THE PROVISIONS OF THE ACT, 18 U.S.C. 3006AD) (INCORPORATED BY REFERENCE INTO THE APPOINTMENT ORDER), MAXIMUM AMOUNTS AND HOURLY RATES ARE ESTABLISHED, WITH A STANDARD OF REASONABLE COSTS FOR SIMILAR SERVICES IN THE COURT'S DISTRICT DESIGNATED AS THE MEASURE FOR EXACT CALCULATION OF THE COMPENSATION EARNED. SUCH "OPEN PRICE" OR "OPEN COMPENSATION" AGREEMENTS CONSTITUTE VALID AND ENFORCEABLE CONTRACTS, AS MADE. WHEN AN AGREEMENT DESCRIBES THE MODE OF DETERMINING THE PRICE OR COMPENSATION, AND SUCH IS DETERMINED ACCORDING TO THAT MODE, THE CONTRACT BECOMES PERFECT AND COMPLETE IN THAT RESPECT AS IF IT HAD BEEN ORIGINALLY FIXED IN THE WRITING. SEE 17 AM. JUR. 2D SECS CONTRACTS 82, 422; C.J.S. CONTRACTS 36(2) C., AND CASES CITED THEREIN.

THUS, IN THE INSTANT CASES, THE MOMENT OF CONTRACTUAL OBLIGATION OCCURS AT THE TIME OF THE COURT'S APPOINTMENT OF THE ATTORNEY, THOUGH THE EXACT AMOUNT OF SUCH OBLIGATION REMAINS TO BE DETERMINED. WE HAVE LONG HELD, CONSISTENT WITH THE ABOVE-QUOTED STATUTES, THAT A CLAIM AGAINST AN ANNUAL APPROPRIATION WHEN OTHERWISE PROPER IS CHARGEABLE TO THE APPROPRIATION FOR THE FISCAL YEAR IN WHICH THE OBLIGATION WAS INCURRED. THE RULE IS APPLICABLE IN ALL CASES IN WHICH THERE IS A DEFINITE DETERMINATION AS TO THE TIME THE PUBLIC FUNDS BECAME OBLIGATED FOR THE PAYMENT OF A GIVEN LIABILITY WHETHER THE AMOUNT IS, OR IS NOT, CERTAIN AT THE TIME. 18 COMP. GEN. 363 (1938); 23 ID. 370 (1943).

IN 46 COMP. GEN. 895 (1967), WE APPROVED A PROPOSED REVISED PROCEDURE FOR PROVIDING FEE-BASIS OUT-PATIENT TREATMENT AND OTHER MEDICAL SERVICES TO VETERANS WITH SERVICE CONNECTED DISABILITIES, WHICH PROCEDURE RESULTED IN CHARGING THE FISCAL YEAR VETERANS ADMINISTRATION APPROPRIATION CURRENT AT THE TIME A PHYSICIAN'S CLAIMS FOR REIMBURSEMENT WERE APPROVED BY THE AGENCY. UNDER THE CIRCUMSTANCES OF THAT CASE, HOWEVER, THERE WAS NO CONTRACTUAL OBLIGATION OR LIABILITY ON THE PART OF THE GOVERNMENT UNTIL THE VOUCHERS WERE APPROVED: UNDER THAT PROCEDURE PARTICIPATING PHYSICIAN'S BILLS UNDERWENT AN AGENCY QUASI-ADJUCATIVE REVIEW PROCESS TO DETERMINE WHETHER LIABILITY SHOULD BE ACCEPTED BY THE GOVERNMENT FOR THE COST OF THE SERVICE RENDERED, INCLUDING FUNDAMENTAL DETERMINATIONS AS TO WHETHER THE VETERAN WAS ELIGIBLE FOR THE TREATMENT RENDERED AND WHETHER SUCH TREATMENT WAS NECESSARY AND PROPER IN LIGHT OF THE DISABILITY RECORD. AGENCY APPROVAL, IN THAT CASE, CONSTITUTED THE INITIAL ACCEPTANCE OF THE LIABILITY AND CONTRACTUAL OBLIGATION, WHEREAS IN THE INSTANT CASE, CONTRACTUAL OBLIGATION IS IMPOSED ON THE GOVERNMENT BY THE ORDER OF APPOINTMENT, WITH SUBSEQUENT COURT REVIEW OF THE VOUCHER INTENDED ONLY TO INSURE THE REASONABLENESS OF THE EXPENSES INCURRED. UNITED STATES V POPE, SUPRA.

IN LIGHT OF THE FOREGOING, IT IS OUR VIEW THAT THE PROPOSED REVISED PROCEDURE, IF INSTITUTED, WOULD CONTRAVENE THE STATUTES QUOTED ABOVE RELATIVE TO OBLIGATING FISCAL YEAR APPROPRIATIONS BY CONTRACTS. YOU ARE, ACCORDINGLY, ADVISED THAT UNDER THE EXISTING LAW WE CANNOT CONCUR WITH YOUR PROPOSED ACCOUNTING PROCEDURE REVISION.