B-19333, AUGUST 25, 1941, 21 COMP. GEN. 180

B-19333: Aug 25, 1941

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CONTRACTS - COST-PLUS - EVIDENCE IN SUPPORT OF PAYMENTS - PETTY CASH EXPENDITURES IF PETTY CASH EXPENDITURES OF $10 OR LESS OF WAR DEPARTMENT COST PLUS-A- FIXED-FEE CONTRACTS ARE SUPPORTED BY PROPERLY ITEMIZED STATEMENTS AND CERTIFIED BY THE PROPER OFFICIALS. ARE SUBMITTED FOR ADVANCE DECISION AS TO THE PROPER ITEMS TO BE ALLOWED AND PROPRIETY OF REIMBURSING THE CONTRACTOR FOR PETTY CASH DISBURSEMENTS NOT SUPPORTED BY RECEIPTS EVIDENCING EXPENDITURE. WITH RESPECT TO THE MATTER ARE STATED IN HIS LETTER OF JUNE 3. WILL BE ACCEPTABLE TO SUPPORT VOUCHERS FOR REIMBURSEMENT OF PETTY CASH EXPENDITURES. 2. THE LOCAL FINANCE OFFICER INTERPRETS HIS REGULATIONS AS REQUIRING HIM TO HAVE A RECEIPT FROM THE VENDOR FOR EVERY ARTICLE PURCHASED FOR REIMBURSEMENT.

B-19333, AUGUST 25, 1941, 21 COMP. GEN. 180

CONTRACTS - COST-PLUS - EVIDENCE IN SUPPORT OF PAYMENTS - PETTY CASH EXPENDITURES IF PETTY CASH EXPENDITURES OF $10 OR LESS OF WAR DEPARTMENT COST PLUS-A- FIXED-FEE CONTRACTS ARE SUPPORTED BY PROPERLY ITEMIZED STATEMENTS AND CERTIFIED BY THE PROPER OFFICIALS, SUCH EXPENDITURES MAY BE REIMBURSED WITHOUT THE FURNISHING OF RECEIPTS UNLESS IN ANY PARTICULAR CASE THE INTERESTS OF THE UNITED STATES WOULD BE ADVERSELY AFFECTED THEREBY.

COMPTROLLER GENERAL WARREN TO MAJ. W. GRITZ, UNITED STATES ARMY, AUGUST 25, 1941:

THERE HAS BEEN RECEIVED, BY INDORSEMENT OF JULY 30, 1941, FROM THE CHIEF OF FINANCE, YOUR LETTER OF JULY 23, 1941, AS FOLLOWS:

THE ENCLOSED BUREAU VOUCHER NOS. 138 AND 139, IN THE AMOUNTS OF $55.30 AND $38.19, RESPECTIVELY, HAVING BEEN PRESENTED TO THE UNDERSIGNED DISBURSING OFFICE BY THE WESTERN CARTRIDGE COMPANY, THROUGH THE OFFICE OF THE COMMANDING OFFICER, ST. LOUIS ORDNANCE DEPARTMENT, ST. LOUIS, MISSOURI, REQUESTING REIMBURSEMENT UNDER COST PLUS-A-FIXED-FEECONTRACT W- ORD-481, DATED DECEMBER 5, 1940, ARE SUBMITTED FOR ADVANCE DECISION AS TO THE PROPER ITEMS TO BE ALLOWED AND PROPRIETY OF REIMBURSING THE CONTRACTOR FOR PETTY CASH DISBURSEMENTS NOT SUPPORTED BY RECEIPTS EVIDENCING EXPENDITURE.

THE VIEWS OF THE COMMANDING OFFICER, ST. LOUIS ORDNANCE PLANT, WITH RESPECT TO THE MATTER ARE STATED IN HIS LETTER OF JUNE 3, 1941, AS FOLLOWS:

1. PARAGRAPH 26-C OF THE MANUAL OF INSTRUCTIONS FOR THE ADMINISTRATION OF COST-1PLUS-A-1FIXED-1FEE CONTRACTS, REVISED DRAFT MARCH 1941, STATES THAT AN ITEMIZED STATEMENT OF ARTICLES PURCHASED, IF NOT IN EXCESS OF $10 PER ITEM, WILL BE ACCEPTABLE TO SUPPORT VOUCHERS FOR REIMBURSEMENT OF PETTY CASH EXPENDITURES.

2. THE LOCAL FINANCE OFFICER INTERPRETS HIS REGULATIONS AS REQUIRING HIM TO HAVE A RECEIPT FROM THE VENDOR FOR EVERY ARTICLE PURCHASED FOR REIMBURSEMENT, AND DECLINES TO RECOGNIZE THE CONTRACTOR'S CERTIFICATE ON ITEMIZED STATEMENTS OF PETTY CASH EXPENDITURES.

3. THIS DEFEATS THE WHOLE PURPOSE OF THE PETTY CASH AND INTRODUCES DELAY IN PROCUREMENT AND AN AUDITING EXPENDITURE OF TIME AND EFFORT NOT WARRANTED BY THE SUMS INVOLVED. IT FURTHER OPERATES TO RELIEVE THE CONTRACTOR OF MUCH CONCERN OVER THE VALIDITY OF HIS EXPENDITURES, WHICH IS NOT BELIEVED TO BE IN ACCORDANCE WITH THE INTENT OF THE COST 1PLUS-A- 1FIXED-1FEE CONTRACTS.

4. IT IS REQUESTED THAT AN ATTEMPT BE MADE THROUGH THE FINANCE OFFICER, U.S. ARMY, TO COORDINATE THE INSTRUCTIONS ISSUED FINANCE OFFICERS IN THE FIELD, WITH THE ADMINISTRATIVE INSTRUCTIONS QUOTED ABOVE.

ARTICLE IV-A-1, TITLE IV, OF THE SUBJECT CONTRACT PROVIDES WITH RESPECT TO REIMBURSEMENT OF EXPENDITURES THEREUNDER AS FOLLOWS:

THE GOVERNMENT SHALL BEAR ALL COSTS AND EXPENSES OF EVERY CHARACTER AND DESCRIPTION INCURRED BY THE CONTRACTOR UNDER TITLE III, WHEN APPROVED IN ADVANCE OR SUBSEQUENTLY RATIFIED BY THE CONTRACTING OFFICER, * * * AS TO THE EVIDENCE NECESSARY TO SUPPORT SUCH REIMBURSEMENT, ARTICLE IV-B-1-/B) OF SAID TITLE PROVIDES THAT:

THE GOVERNMENT SHALL CURRENTLY REIMBURSE THE CONTRACTOR FOR EXPENDITURES MADE IN ACCORDANCE WITH ARTICLE IV-A OF THIS TITLE IV UPON CERTIFICATION TO AND VERIFICATION BY THE CONTRACTING OFFICER OF THE ORIGINAL CERTIFIED PAY ROLLS FOR LABOR, OR THE ORIGINAL PAID INVOICES FOR MATERIALS, OR OTHER ORIGINAL PAPERS, OR OTHER EVIDENCE SATISFACTORY TO THE CONTRACTING OFFICER. * * *

PARAGRAPH 26C OF THE MARCH 1941 REVISED DRAFT OF THE " MANUAL OF INSTRUCTIONS FOR THE ADMINISTRATION OF COST-1PLUS-A-1FIXED-1FEE CONTRACTS" IS AS FOLLOWS:

C. DATA NECESSARY TO SUPPORT VOUCHERS FOR PETTY CASH EXPENDITURES

(1) AN ITEMIZED STATEMENT OF ARTICLES PURCHASED, IF NOT IN EXCESS OF $10.00 PER ITEM, WILL BE ACCEPTABLE.

(2) THE STATEMENT SHOULD CONTAIN A CERTIFICATE BY THE OFFICER OF THE CONTRACTOR AUTHORIZED TO PROCURE SUCH PETTY CASH ARTICLES TO THE EFFECT THAT THE ARTICLES WERE NECESSARY, WERE USED IN CONNECTION WITH THE PERFORMANCE OF THE CONTRACT, AND THAT REIMBURSEMENT THEREFOR HAS NOT BEEN PREVIOUSLY CLAIMED.

WHILE, GENERALLY, VOUCHERS COVERING REIMBURSEMENT FOR EXPENDITURES INCURRED IN CONNECTION WITH THE PERFORMANCE OF CONTRACTS SUCH AS HERE INVOLVED ARE REQUIRED TO BE SUPPORTED BY PROPER RECEIPTS EVIDENCING THE EXPENDITURE, IT WOULD APPEAR THAT WHERE THE SUMS INVOLVED ARE NEGLIGIBLE EXPEDIENCY REQUIRES THAT A LIMITATION BE PLACED ON THE AMOUNT TO BE SUPPORTED BY SUCH RECEIPTS. CONSEQUENTLY, WHERE CLAIMS FOR REIMBURSEMENT FOR CASH EXPENDITURES IN AMOUNTS OF $10 OR LESS ARE SUPPORTED BY PROPERLY ITEMIZED STATEMENTS AND CERTIFIED BY THE PROPER OFFICIALS, THIS OFFICE WILL NOT BE REQUIRED TO OBJECT TO SUCH REIMBURSEMENTS SOLELY BY REASON OF THE ABSENCE OF SUCH RECEIPTS UNLESS IT SHOULD APPEAR IN ANY PARTICULAR CASE THAT THE INTERESTS OF THE UNITED STATES ARE ADVERSELY AFFECTED THEREBY.

WHILE THE TWO VOUCHERS SUBMITTED BY YOU HAVE NOT BEEN CERTIFIED EXACTLY IN ACCORDANCE WITH PARAGRAPH 26C OF THE MANUAL OF INSTRUCTIONS, SAID VOUCHERS ARE ACCOMPANIED BY PROPERLY ITEMIZED INVOICES AND HAVE BEEN CERTIFIED BY DULY AUTHORIZED GOVERNMENT OFFICIALS.

ACCORDINGLY, THE VOUCHERS ARE RETURNED HEREWITH AND PAYMENT THEREON IS AUTHORIZED, IF OTHERWISE CORRECT.