B-25446, JULY 25, 1942, 22 COMP. GEN. 57

B-25446: Jul 25, 1942

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OF THEIR EMPLOYEES FOR WHICH IT IS NOT THE USUAL PRACTICE. OR IT IS IMPOSSIBLE OR IMPRACTICABLE. TO OBTAIN RECEIPTS ARE NOT REQUIRED TO BE SUPPORTED BY RECEIPTS. THE NATURE OF WHICH IS SUCH THAT RECEIPTS ARE READILY. OBTAINED CONCURRENTLY WITH PAYMENT THEREOF ARE REQUIRED TO BE SO SUPPORTED. IN LIEU OF RECEIPTS IN SUPPORT OF REIMBURSEMENTS TO A COST-PLUS-A-FIXED-FEE CONTRACTOR FOR THOSE ITEMS OF TRAVELING EXPENSE OF ITS EMPLOYEES FOR WHICH RECEIPTS ARE USUALLY OBTAINED OR WHICH MAY NOT BE INDEPENDENTLY VERIFIED FROM RECORDS ON FILE IN THIS OFFICE. TO SUBMIT ALTERNATIVE SUGGESTIONS ON THE PRESENTATION OF EVIDENCE WHERE IT IS IMPRACTICAL TO FURNISH CERTAIN DOCUMENTARY EVIDENCE GENERALLY REQUIRED IN SUPPORT OF VOUCHERS COVERING REIMBURSEMENTS TO COST-PLUS-A-FIXED-FEE CONTRACTORS.

B-25446, JULY 25, 1942, 22 COMP. GEN. 57

CONTRACTS - COST-PLUS - TRAVELING EXPENSES OF CONTRACTORS' EMPLOYEES - SUPPORTING EVIDENCE REQUIREMENTS CLAIMS BY COST-PLUS-A-FIXED-FEE CONTRACTORS FOR REIMBURSEMENT OF INCIDENTAL TRAVELING EXPENSE ITEMS, SUCH AS CAB FARES, TIPS, ETC., OF THEIR EMPLOYEES FOR WHICH IT IS NOT THE USUAL PRACTICE, OR IT IS IMPOSSIBLE OR IMPRACTICABLE, TO OBTAIN RECEIPTS ARE NOT REQUIRED TO BE SUPPORTED BY RECEIPTS, BUT THOSE ITEMS, SUCH AS HOTEL EXPENSE, THE NATURE OF WHICH IS SUCH THAT RECEIPTS ARE READILY, AND USUALLY, OBTAINED CONCURRENTLY WITH PAYMENT THEREOF ARE REQUIRED TO BE SO SUPPORTED. THERE MAY NOT BE SUBSTITUTED, IN LIEU OF RECEIPTS IN SUPPORT OF REIMBURSEMENTS TO A COST-PLUS-A-FIXED-FEE CONTRACTOR FOR THOSE ITEMS OF TRAVELING EXPENSE OF ITS EMPLOYEES FOR WHICH RECEIPTS ARE USUALLY OBTAINED OR WHICH MAY NOT BE INDEPENDENTLY VERIFIED FROM RECORDS ON FILE IN THIS OFFICE, CERTIFICATIONS BY THE TRAVELER AND CONTRACTING OFFICER AS TO THE INCURRENCE, CORRECTNESS, ETC., OF THE EXPENDITURE.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF WAR, JULY 25, 1942:

THERE HAS BEEN CONSIDERED YOUR LETTER OF APRIL 3, 1942, AS FOLLOWS:

PURSUANT TO THE INVITATION CONTAINED IN THE LAST PARAGRAPH OF YOUR DECISION B-14020, DATED JANUARY 2, 1941, TO SUBMIT ALTERNATIVE SUGGESTIONS ON THE PRESENTATION OF EVIDENCE WHERE IT IS IMPRACTICAL TO FURNISH CERTAIN DOCUMENTARY EVIDENCE GENERALLY REQUIRED IN SUPPORT OF VOUCHERS COVERING REIMBURSEMENTS TO COST-PLUS-A-FIXED-FEE CONTRACTORS, THE FOLLOWING MATTER IS PRESENTED FOR YOUR CONSIDERATION IN CONNECTION WITH PRIME CONTRACTS AND SUBCONTRACTS ENTERED INTO UNDER THE PROVISIONS OF PUBLIC LAW 703, 76TH CONGRESS, APPROVED JULY 2, 1940, AND SIMILAR ACTS.

GENERALLY RECEIPTS ARE REQUIRED IN ALL CASES WHERE NECESSARY TO ESTABLISH THE ACTUALITY AND CORRECTNESS OF ANY EXPENDITURE FOR WHICH THE CONTRACTOR CLAIMS REIMBURSEMENT. HOWEVER, IN THOSE INSTANCES WHERE THE CONTRACTOR'S EMPLOYEES ARE IN A TRAVEL STATUS IT FREQUENTLY IS IMPRACTICABLE TO SECURE RECEIPTS FOR EACH AND EVERY INCIDENTAL EXPENDITURE MADE. NO DOUBT YOU APPRECIATE THE FACT THAT TO REQUIRE RECEIPTS FOR RELATIVELY INSIGNIFICANT EXPENSES INCURRED (CAB FARES, TIPS, ETC.) RESULTS IN CONSIDERABLE ANNOYANCE TO THE EMPLOYEE AND CONTRACTOR, ASIDE FROM BEING TIME CONSUMING AND DELAYING THE TRAVELER IN HIS OFFICIAL BUSINESS, WHICH IN TURN SLOWS DOWN PRODUCTION WHICH IS SO ESSENTIAL TO THE WAR EFFORT. ALSO, IN MANY INSTANCES TRAVELERS FORGET TO SECURE RECEIPTS FOR INCIDENTAL EXPENDITURES MADE, TO TRY TO SECURE RECEIPTS AT SOME LATER DATE INVOLVES A GREAT LOSS OF TIME AND IN SOME INSTANCES IS IMPOSSIBLE.

IT IS THE DESIRE OF THE ORDNANCE DEPARTMENT TO FORMULATE SOME PLAN WHEREBY COST-PLUS-A-FIXED-FEE CONTRACTORS MAY BE RELIEVED OF THE BURDENSOME REQUIREMENT OF SUPPORTING THEIR REIMBURSEMENT VOUCHERS WITH RECEIPTS FOR EACH EXPENDITURE INCURRED BY THEIR EMPLOYEES WHILE IN A TRAVEL STATUS. TO THIS END, THE INCLOSED FORM HAS BEEN DESIGNED. THE FORM APPEARS TO COVER ALL EXPENDITURES NORMALLY MADE BY A PERSON WHILE IN A TRAVEL STATUS.

IT IS PROPOSED, WITH YOUR APPROVAL, TO SUGGEST TO PRIME CONTRACTORS THAT THEY USE A FORM SIMILAR TO THE FORM FORWARDED HEREWITH, SUCH FORM TO BEAR CERTIFICATE BY THE TRAVELER STATING THAT THE EXPENDITURES LISTED THEREON WERE INCURRED AND PAID BY HIM AND ARE APPLICABLE TO THE CONTRACT AND THAT HE HAS BEEN REIMBURSED BY THE CONTRACTOR IN THE AMOUNT STATED THEREON. FURTHER, THAT THE FORM BEAR A STATEMENT BY THE CONTRACTING OFFICER OR HIS REPRESENTATIVE, THAT HE HAS EXAMINED THE ITEMS FOR WHICH REIMBURSEMENT IS CLAIMED AND FOUND THEM TO BE REASONABLE AND INCURRED BY THE EMPLOYEE WHILE DOING WORK APPLICABLE TO THE CONTRACT. THIS FORM, PROPERLY ITEMIZED AND CERTIFIED, WILL CONSTITUTE THE ONLY DATA REQUIRED TO SUPPORT VOUCHERS COVERING PAYMENT TO PRIME CONTRACTORS FOR REIMBURSEMENT TO THEIR EMPLOYEES FOR EXPENDITURES MADE WHILE IN A TRAVEL STATUS.

IF THE INCLOSED FORM AND PROCEDURE OUTLINED ABOVE DO NOT MEET WITH YOUR APPROVAL, IT IS RESPECTFULLY REQUESTED THAT SUGGESTIONS BE OFFERED WHEREIN REQUIREMENT OF FURNISHING INDIVIDUAL RECEIPTS FOR EACH ITEM OF EXPENSE FOR WHICH THE EMPLOYEE INCURS, MAY BE ELIMINATED.

THE FORM PROPOSED FOR USE IN CONNECTION WITH CHARGES MADE ON VOUCHERS COVERING REIMBURSEMENT FOR TRAVELING EXPENSES INCURRED BY THE CONTRACTOR ON BEHALF OF ITS EMPLOYEES IN THE PERFORMANCE OF COST-PLUS-A FIXED-FEE CONTRACTS IS DESIGNATED AS " TRAVELING EXPENSE REPORT" AND BEARS ON THE REVERSE THEREOF, IN PURPORTED SUBSTANTIATION OF SUCH CHARGES, THE FOLLOWING CERTIFICATIONS: CERTIFICATE BY TRAVELER.

I, -------------------, CERTIFY THAT THE EXPENDITURES LISTED HEREON WERE INCURRED AND PAID BY ME AND ARE APPLICABLE TO WORK UNDER CONTRACT NO. ---- --------AND THAT I HAVE BEEN REIMBURSED BY ------------- IN THE AMOUNT STATED THEREON.

SIGNED -----------------------

( TRAVELER) CERTIFICATE BY CONTRACTING OFFICER'S REPRESENTATIVE.

I, ----------------, CERTIFY THAT THE EXPENDITURES LISTED HEREON HAVE BEEN EXAMINED BY ME; FOUND TO BE REASONABLE; AND WERE INCURRED BY AN EMPLOYEE OF THE CONTRACTOR WHILE IN A TRAVEL STATUS DOING WORK APPLICABLE TO CONTRACT NO. ------------.

SIGNED ------------------------

( CONTRACTING OFFICER'S

REPRESENTATIVE)

THE REASONS ASSIGNED IN YOUR LETTER FOR THE PROPOSED SUBSTITUTION OF THE CERTIFICATIONS, QUOTED ABOVE, FOR SIGNED RECEIPTS, OTHERWISE REQUIRED,"WHERE NECESSARY TO ESTABLISH THE ACTUALITY AND CORRECTNESS OF ANY EXPENDITURE FOR WHICH THE CONTRACTOR CLAIMS REIMBURSEMENT," SUGGEST A MISAPPREHENSION AS TO THE AUDIT REQUIREMENTS OF THIS OFFICE. WHILE IT IS DESIRABLE AND PROPER, IN CONNECTION WITH ALL CLAIMS FOR REIMBURSEMENT OF EXPENDITURES CHARGEABLE TO PUBLIC FUNDS, THAT THE RECORD SHOULD ESTABLISH THAT THE ITEMS INVOLVED REPRESENT REIMBURSABLE EXPENDITURES ACTUALLY MADE, RECEIPTS OR SIMILAR EVIDENCE IS REQUIRED TO BE FURNISHED IN SUPPORT OF THOSE EXPENSES, ONLY, FOR WHICH SUCH EVIDENCE IS USUALLY OBTAINED OR WHICH MAY NOT BE VERIFIED INDEPENDENTLY ON THE BASIS OF RECORDS ON FILE IN THIS OFFICE. THAT IS TO SAY, SO FAR AS CONCERNS THE INCIDENTAL EXPENSES SPECIFICALLY REFERRED TO BY YOU, SUCH AS CAB FARES, TIPS, ETC., IT IS RECOGNIZED THAT RECEIPTS IN SUPPORT THEREOF ARE NOT USUALLY OBTAINED; ARE, AS A RULE, IMPRACTICABLE, IF NOT IMPOSSIBLE, TO PROCURE; AND, ACCORDINGLY, ARE NOT REQUIRED. SINCE IT APPEARS THAT, WHILE THE SAID CERTIFICATIONS ARE DESIGNED TO ELIMINATE THE NECESSITY FOR RECEIPTS IN SUPPORT OF ALL TRAVELING EXPENSES, THE OBJECTIONS MADE TO THE FURNISHING OF SUCH EVIDENCE IS CONFINED PRIMARILY, IF NOT ENTIRELY, TO THE SAID INCIDENTAL EXPENSES, SUCH OBJECTIONS, FOR THE REASONS STATED, ARE WITHOUT FOUNDATION IN FACT.

WITH REFERENCE TO THE ITEMS OF TRAVEL EXPENSE FOR WHICH RECEIPTS GENERALLY ARE REQUIRED BY THIS OFFICE--- THAT IS, EXPENSES THE NATURE OF WHICH IS SUCH THAT A RECEIPT IS READILY AND USUALLY CONCURRENTLY OBTAINED WITH THE PAYMENT THEREOF, AS, FOR INSTANCE, HOTEL EXPENSE, AND FOR WHICH THE PAID BILL IS THE BEST AND OFTEN THE ONLY EVIDENCE UPON WHICH THE PROPRIETY OF THE CHARGES MAY BE DETERMINED--- THE DUTY AND RESPONSIBILITY WITH WHICH THIS OFFICE IS ENTRUSTED PERFORCE REQUIRE THAT SUCH EVIDENCE BE SUBMITTED IN SUPPORT THEREOF. I AM SURE YOU WILL AGREE THAT AS TO THESE EXPENSES RECEIPTS MAY BE PROCURED WITHOUT DIFFICULTY, AND THAT, IN THE ULTIMATE ANALYSIS, THE SLIGHT ADDITIONAL BURDEN IMPOSED ON THE TRAVELER OF RETAINING THESE RECEIPTS IN ORDER THAT THEY MAY BE PRESENTED TO THIS OFFICE TO PERFECT THE RECORD FOR AUDIT PURPOSES IS NEGLIGIBLE AS COMPARED TO THE BENEFITS ACCOMPLISHED THEREBY.

FURTHER, WITH REFERENCE TO THE DATA TO BE FURNISHED UNDER THE PROPOSED PROCEDURE IN SUPPORT OF CLAIMS FOR REIMBURSEMENT OF TRAVEL EXPENSES INCURRED, IT MUST BE APPARENT THAT, ASIDE FROM THE ESTABLISHMENT OF THE "ACTUALITY AND CORRECTNESS" OF EXPENDITURES, SUCH WOULD BE OF LITTLE, IF ANY PROBATIVE VALUE INSOFAR AS CONCERNS THE DETERMINATION REQUIRED AS TO WHETHER THE SAID EXPENSES CONSTITUTE A PROPER CHARGE TO THE GOVERNMENT UNDER THE TERMS OF THE CONTRACT. THIS, FOR THE REASON THAT THE CERTIFICATION TO BE MADE BY THE CONTRACTING OFFICER OR HIS REPRESENTATIVE THAT SUCH EXPENSES "WERE INCURRED BY AN EMPLOYEE OF THE CONTRACTOR WHILE IN A TRAVEL STATUS DOING WORK APPLICABLE TO" THE CONTRACT, FAILS TO TAKE INTO CONSIDERATION THAT, TO BE REIMBURSABLE, AN EXPENDITURE ALSO MUST BE SHOWN TO BE REASONABLY RELATED TO THE PERFORMANCE OF THE CONTRACT WORK. WHILE THE CERTIFICATION OF THE TRAVELER INCLUDES A STATEMENT TO THAT EFFECT, IT MUST BE EVIDENT, IN THE ABSENCE OF A COGENT REASON FOR THE NECESSITY OF RELIANCE THEREON, THAT A PROPER SAFEGUARDING OF THE GOVERNMENT'S INTERESTS REQUIRES THAT SUCH MATTERS BE ESTABLISHED BY INDEPENDENT EVIDENCE.

FOR THE REASONS STATED, I AM CONSTRAINED TO WITHHOLD APPROVAL OF THE ADOPTION OF THE PROPOSED PROCEDURE FOR THE REIMBURSEMENT OF TRAVEL EXPENSES.

SINCE THE REQUEST FOR ALTERNATIVE SUGGESTIONS TO THE PROPOSED PROCEDURE APPEARS TO HAVE BEEN BASED ON THE ERRONEOUS ASSUMPTION THAT THE REQUIREMENTS OF THIS OFFICE CONTEMPLATE THE FURNISHING OF A RECEIPT IN SUPPORT OF EACH ITEM OF TRAVEL EXPENSE, IT IS BELIEVED THAT, ON THE BASIS OF THE INFORMATION AFFORDED HEREIN WITH RESPECT THERETO, YOU WILL AGREE THAT NO CHANGE IN THE PRESENT AUDIT PROCEDURE IS WARRANTED.