B-215965, DEC 14, 1984, 64 COMP.GEN. 152

B-215965, DEC 14, 1984, 64 COMP.GEN. 152

FUNDS - FOREIGN - EXCHANGE RATE - REPAYMENT OF FUNDS ADVANCED DEFICIENCIES IN THE LIBRARY OF CONGRESS IMPREST FUNDS USED FOR FOREIGN CURRENCY EXCHANGE TRANSACTIONS AUTHORIZED BY 31 U.S.C. 3342(A) AND (B) AND WHICH ARE ATTRIBUTABLE SOLELY TO CURRENCY DEVALUATIONS MAY BE RESTORED BY THE DEPARTMENT OF THE TREASURY AS AUTHORIZED BY 31 U.S.C. 3342(C) AND IMPLEMENTING REGULATIONS. IT IS NOT NECESSARY OR APPROPRIATE FOR GOVERNMENT AGENCIES TO SEEK RELIEF FOR A PHYSICAL LOSS PURSUANT TO 31 U.S.C. 3527. 61 COMP.GEN. 132 (1981). DISBURSING OFFICERS - RELIEF - FOREIGN CURRENCY DEVALUATION GAO SPECIFICALLY FINDS THAT THE TERM "AGENCY" AS USED IN 31 U.S.C. 3342 INCLUDES LEGISLATIVE AS WELL AS EXECUTIVE BRANCH AGENCIES OF THE FEDERAL GOVERNMENT. THEREFORE, DISBURSING OFFICERS OF THE LIBRARY OF CONGRESS WHOSE ACCOUNTS ARE DIMINISHED SOLELY BY FOREIGN CURRENCY DEVALUATIONS IN THE COURSE OF AUTHORIZED CURRENCY EXCHANGES MAY SEEK RESTORATION OF THE ACCOUNTS FROM THE DEPARTMENT OF THE TREASURY PURSUANT TO 31 U.S.C. 3342. TO THE EXTENT THAT THEY ARE INCONSISTENT WITH THIS DECISION, B-174244, DEC. 8, 1971, AND B-174244, DEC. 17, 1974, WILL NO LONGER BE FOLLOWED.

TO: THE LIBRARIAN OF CONGRESS, DECEMBER 14, 1984:

THIS IS IN REPLY TO YOUR LETTER OF JULY 30, 1984, REQUESTING RELIEF PURSUANT TO 31 U.S.C. SEC. 82A-1 (NOW RECODIFIED AS 31 U.S.C. SEC. 3527 (1982)) FOR YOUR DISBURSING OFFICER, EDWIN F. KRINTZ, FOR A LOSS IN THE VALUE OF LOCAL CURRENCIES HELD IN AGENT CASHIER ACCOUNTS IN SEVEN COUNTRIES. THE "LOSS" WAS DISCOVERED WHEN THE LIBRARY OF CONGRESS REEVALUATED THE FUNDS IN THESE ACCOUNTS, MEASURED BY CURRENT CONVERSION RATES, PRIOR TO EFFECTING A TRANSFER OF RESPONSIBILITY FOR THE FUNDS FROM THE DISBURSING OFFICER TO THE ACCOUNTING OFFICER, AS REQUESTED BY THE DEPARTMENT OF THE TREASURY.

IT IS DIFFICULT TO ANSWER YOUR REQUEST PRECISELY BECAUSE YOU STATE THAT A TOTAL LOSS OF $21,833.35 (NOT INCLUDING CURRENCIES WORTH $2,450 WHEN ADVANCED, BUT WHICH HAVE NOT BEEN EVALUATED AT CURRENT RATES) IS ATTRIBUTABLE "ONLY TO THE CONTINUING DEVALUATION OF LOCAL CURRENCIES IN THESE COUNTRIES." HOWEVER, IN YOUR NEXT SENTENCE YOU STATE, "THE LOSSES REFLECTED IN THE ENCLOSURE DO NOT TAKE INTO ACCOUNT THE POSSIBILITY OF LOSS BY LOCAL THEFT OR NEGLIGENCE." TO THE EXTENT THAT SOME PORTION OF THE LOSS CAN BE ATTRIBUTED TO LOCAL THEFT OR NEGLIGENCE OF THE ACCOUNTABLE OFFICER OR HIS SUBORDINATES, YOUR REQUEST FOR RELIEF IS APPROPRIATE UNDER 31 U.S.C. SEC. 3527, PROVIDED THAT YOU MAKE THE NECESSARY DETERMINATIONS REQUIRED BY THE STATUTE AND SEND US SUFFICIENT INFORMATION TO MAKE AN INDEPENDENT DETERMINATION THAT RELIEF IS WARRANTED.

ON THE OTHER HAND, TO THE EXTENT THAT THE DEFICIENCY IN THE VALUE OF THE ACCOUNT IS SOLELY ATTRIBUTABLE TO CURRENCY FLUCTUATIONS IN THE SEVEN COUNTRIES INVOLVED, IT IS NOT NECESSARY TO SEEK RELIEF FOR THE DISBURSING OFFICER IN ORDER TO RESTORE THE DOLLAR VALUE OF THE ACCOUNT. SEE 61 COMP.GEN. 132, 134-135 (1981). A STATUTE, FIRST ENACTED IN 1944 AND LATER BROADENED AND AMENDED IN 1953, SPECIFICALLY AUTHORIZES DISBURSING OFFICERS STATIONED ABROAD TO ENGAGE IN VARIOUS CURRENCY EXCHANGE TRANSACTIONS FOR OFFICIAL OR ACCOMMODATION PURPOSES. IT ALSO ESTABLISHES A GAINS AND DEFICIENCIES ACCOUNT IN THE TREASURY TO RECONCILE GAINS AND LOSSES RESULTING FROM THE FLUCTUATIONS IN VALUE OF FOREIGN CURRENCIES. THIS STATUTE HAS BEEN CODIFIED AT 31 U.S.C. SEC. 3342. IT PERMITS AGENCIES TO OFFSET DEFICIENCIES CAUSED BY CURRENCY DEVALUATION AGAINST A GAIN REALIZED FROM AN INCREASE IN VALUE ON A FISCAL YEAR BASIS, RETURNING TO THE TREASURY ANY NET GAIN. IT THEN AUTHORIZES THE TREASURY TO ADJUST THE AGENCY'S ACCOUNT FOR ANY REMAINING NET LOSS, PAYABLE FROM THE GAINS AND DEFICIENCIES ACCOUNT.

THE DEPARTMENT OF THE TREASURY HAS ISSUED REGULATIONS TO IMPLEMENT SECTION 3342, AND TO PROVIDE GUIDANCE TO DISBURSING OFFICERS THROUGHOUT THE GOVERNMENT. SEE TREASURY CIRCULAR NO. 830, (REVISED JUNE 16, 1980); TREASURY FISCAL REQUIREMENTS MANUAL (T.F.R.M.), VOL. 1, CHAP. 4 9000 (TL NO. 320). YOU WILL FIND SPECIFIC PROCEDURES FOR REPORTING GAINS AND DEFICIENCIES TO THE TREASURY DEPARTMENT DISCUSSED IN 1 T.F.R.M. SECS. 4- 9070.10, 4-9080. WE SUGGEST THAT YOU AVAIL YOURSELF OF THAT AUTHORITY TO RESTORE THE VALUE OF YOUR DISBURSING OFFICER'S ACCOUNT.

WE ARE AWARE THAT ON SEVERAL PREVIOUS OCCASIONS WE HAVE GRANTED RELIEF TO THE LIBRARY OF CONGRESS DISBURSING OFFICERS FOR SIMILAR ACCOUNT DEFICIENCIES PURSUANT TO THE PHYSICAL LOSS RELIEF STATUTE, 31 U.S.C. SEC. 3527. (SEE, E.G., B-174244, DECEMBER 8, 1971; B-174244, DECEMBER 17, 1974.) AT THOSE TIMES, WE THOUGHT THAT SECTION 3342 WAS NOT APPLICABLE TO THE LIBRARY OF CONGRESS BECAUSE IT IS A LEGISLATIVE BRANCH RATHER THAN AN EXECUTIVE BRANCH AGENCY. PRIOR TO THE 1953 AMENDMENTS, THE STATUTE REFERRED TO "EXECUTIVE DEPARTMENTS." THE AMENDMENT SUBSTITUTED THE TERM "AGENCIES" (WITHOUT, HOWEVER, DEFINING THE SCOPE OF THE TERM) AND AS PRESENTLY CODIFIED, REFERS TO THE ACCOUNTS OF "A DISBURSING OFFICIAL OF THE UNITED STATES GOVERNMENT." WE NOTE FURTHER THAT SECTION 101 OF TITLE 31, AS REVISED AND RECODIFIED IN 1982, DEFINES THE TERM "AGENCY" AS "ANY DEPARTMENT, AGENCY OR INSTRUMENTALITY OF THE UNITED STATES GOVERNMENT," WITH AN ENTIRELY SEPARATE DEFINITION FOR THE TERM "EXECUTIVE AGENCIES."

WE HAVE BEEN PROMPTED BY YOUR REQUEST TO RECONSIDER OUR PREVIOUS POSITION CAREFULLY. WE NOW FIND THAT THE LIBRARY OF CONGRESS IS AN "AGENCY" OF THE UNITED STATES GOVERNMENT FOR PURPOSES OF SECTION 3342 AND IS THEREFORE ENTITLED TO REQUEST THE TREASURY TO RESTORE ITS ACCOUNTS FOR NET DEFICIENCIES CAUSED BY CURRENCY DEVALUATIONS PURSUANT TO THAT SECTION AND ITS IMPLEMENTING REGULATIONS. TO THE EXTENT THAT THEY ARE INCONSISTENT, OUR DECISIONS, B-174241, DECEMBER 17, 1974, AND B-174244, DECEMBER 8, 1971, WILL NO LONGER BE FOLLOWED.

NOTHING IN THIS DECISION SHOULD BE READ TO SANCTION PRACTICES AND PROCEDURES FOR HANDLING LOCAL CURRENCIES THAT ARE NOT CONSISTENT WITH TREASURY REQUIREMENTS AS SET FORTH IN ITS REGULATIONS, CITED ABOVE. SUGGEST THAT APPROPRIATE OFFICIALS OF YOUR AGENCY CONSULT WITH TREASURY OFFICIALS ABOUT ALTERNATIVE WAYS TO MANAGE YOUR FOREIGN CURRENCY IMPREST FUNDS SO THAT FUTURE LOSSES OF THIS NATURE CAN BE MINIMIZED.