B-256568 March 18, 1994

B-256568: Mar 18, 1994

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APPROPRIATIONS/FINANCIAL MANAGEMENT Budget Process Funds transfer Miscellaneous revenues Treasury deposit Wage rates APPROPRIATIONS/FINANCIAL MANAGEMENT Appropriation Availability Purpose availability Maintenance/operation accounts The General Accounting Office may transfer Davis-Bacon Act funds held by the GAO to the Treasury as miscellaneous receipts after three years has elapsed with no activity on the case as long as all appropriate steps have been taken to locate and pay the employees. In the event that a claimant is subsequently located or a valid claim is later presented. You either do not know to whom the money is owed or. You have been unable to locate the individuals in order to pay them.

B-256568 March 18, 1994

APPROPRIATIONS/FINANCIAL MANAGEMENT Budget Process Funds transfer Miscellaneous revenues Treasury deposit Wage rates APPROPRIATIONS/FINANCIAL MANAGEMENT Appropriation Availability Purpose availability Maintenance/operation accounts The General Accounting Office may transfer Davis-Bacon Act funds held by the GAO to the Treasury as miscellaneous receipts after three years has elapsed with no activity on the case as long as all appropriate steps have been taken to locate and pay the employees. In the event that a claimant is subsequently located or a valid claim is later presented, GAO's annual appropriation would be available to pay claimants.

Date: March 18, 1994 To: Assistant Comptroller General - Johnny Finch From: Acting General Counsel - Robert P. Murphy Subject: Davis-Bacon Fund - (B-256568)

You asked for our advice on the disposition of Davis-Bacon Act funds held by GAO. You explain that, for some part of the moneys now held by us, you either do not know to whom the money is owed or, if you do know, you have been unable to locate the individuals in order to pay them.

GAO may transfer these moneys to the Treasury as miscellaneous receipts. See 31 U.S.C. Sec. 3302 (1988); 62 Comp.Gen. 678, 679 (1983). We find that 3 years with no activity on a case is a suitable period of time to wait as long as all appropriate steps have been taken to locate and pay the employees. In the event that the claimant is subsequently located or a valid claim is later presented, GAO's annual appropriation would be available to pay claimants. B-146842.5, Dec. 6, 1989. A more detailed explanation follows.

The Davis-Bacon Act establishes that workers on certain government contracts are entitled to be paid the prevailing local wage. The Act directs the Comptroller General to pay directly to workers, from payments withheld by the contracting agency, any amounts by which workers have been found to be underpaid under the Act. 40 U.S.C. Sec. 276a-2 (1988). For this purpose, funds withheld under the terms of the contract are transferred to GAO by the contracting agency. These appropriated funds are kept by us in a "deposit fund account"[1] established for the purpose, called "Wages of Employees of Contractors, 05X6022" (the Davis- Bacon account).

Sometimes GAO does not receive sufficient information to be able to locate and pay all workers. You must rely largely on information supplied by the Department of Labor (DOL), which, with the contracting agency, has responsibility for enforcing the Act. DOL tries to give you the names, addresses, and social security numbers of the workers, and the contract number and location. However, not all this information is available in all cases. Occasionally, an agency withholds funds from the contractor, but has no employee names because the contractor has been uncooperative. In some instances, the length of time between performance of the contract and receipt of funds for distribution is so long that addresses have changed and mail is not being forwarded. Davis-Bacon Act files have also been retired over the years, and the Claims Group no longer has records for all unclaimed moneys.

GAO performs a custodial function with regard to the Davis-Bacon funds. See B-146842.5, Dec. 6, 1989. The funds are held in the Davis-Bacon account until they can be paid to workers in accordance with the Act. The Act places no time limit on paying these funds to employees, and the general six-year limitation on presenting claims to the government (31 U.S.C. Sec. 3702 (1988)) is inapplicable to this type of custodial account in which money is being held for the benefit of another. See B-201669, Nov. 26, 1985.

The Davis-Bacon account was established administratively by us: the Act does not require money to be deposited in a particular type of account, nor does it provide for how to dispose of money that cannot be disbursed. Accordingly, GAO can determine administratively how long to hold funds in the Davis-Bacon account before depositing them in miscellaneous receipts. Generally, money not required to be deposited in a particular account must be deposited into the Treasury as miscellaneous receipts.[2] See 31 U.S.C. Sec. 3302 (1988); 62 Comp.Gen. 678, 679 (1983). Before the GAO may transfer funds from the Davis-Bacon account to miscellaneous receipts, the GAO must be satisfied that the identity or the whereabouts of the person entitled to moneys in the Davis-Bacon account cannot be determined, and thus that the money cannot be paid to the employee as the law contemplates.

We find 3 years after the last activity on the case to be an appropriate amount of time to wait before transferring funds from the Davis-Bacon account to miscellaneous receipts. This time period is consistent with DOL policy. The Fair Labor Standards Act establishes 3 years as the waiting period for DOL to transfer to miscellaneous receipts funds that it has been unable to pay an employee. 29 U.S.C. Sec. 216(c) (1988). DOL, in administering other statutes[3] that involve paying back wages to employees, uses the same period of 3 years from the last activity on the case, after which it deposits money into miscellaneous receipts. Thus, after GAO has taken all appropriate steps to locate and pay the employees and there has been no activity on a case for 3 years, the Claims Group may deposit the funds in miscellaneous receipts in the Treasury.

Funds currently in the Davis-Bacon account for which records are no longer available can be deposited in miscellaneous receipts also. Our inability to locate the workers, the passage of time, and the unlikelihood of future claims have obviated the need to continue to carry these amounts in the account.

In the event that GAO receives a verifiable claim from a worker for funds that we have deposited in miscellaneous receipts, GAO's annual appropriation can be used to pay claimants. See B-146842.5, Dec. 6, 1989, in which we held that GAO's annual appropriation was available to pay a contractor money that had been withheld under the Davis-Bacon Act and mistakenly paid to workers by the Claims Group. Obviously, reliance on our own appropriation entails some risk for us, but we believe that the risk is negligible if we have taken all appropriate steps to locate the workers and have waited for three years after the last activity on the case before putting the money into miscellaneous receipts. The amount typically owed is rarely as much as a thousand dollars per person and it is unlikely that a large group of workers will turn up unexpectedly after the 3-year waiting period.

1. Deposit fund accounts are non-budgetary accounts established to account for collections that are either (a) held temporarily and later refunded or paid upon administrative or legal determination of their proper disposition or (b) held by the government as banker or agent for others and paid out at the direction of the depositor. Glossary of Terms Used in the Federal Budget Process, Exposure Draft, GAO/AFMD-2.1.1, January 1993.

2. The Treasury account "Unclaimed Moneys of Individuals Whose Whereabouts are Unknown" (31 U.S.C. 1322(a) (1988)) is not appropriate for deposit of these Davis-Bacon funds. This account is expressly for money held for more than a year in certain trust accounts enumerated in 31 U.S.C. Sec. 1321 (1988 & Supp. IV 1992) or in "analogous" trust funds. The Davis-Bacon account is not listed in section 1321 and has never been treated as one of those analogous trust funds.

3. The DOL disburses back wages under more than 40 Davis-Bacon related acts, the Service Contract Act, the Contract Work Hours and Safety Standards Act, the H-2A program under the provisions of the Immigration Reform and Control Act, the contracted wage provisions of the Migrant and Seasonal Agricultural Worker Protection Act, and the prescribed wage under the provisions of the Immigration and Nationality Act (INA) as amended by the Immigration Nursing Relief Act.