B-31726, JAN 26, 1943

B-31726: Jan 26, 1943

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INCLOSED HEREWITH IS VOUCHER IN AMOUNT OF $984.77 COVERING REIMBURSEMENT FOR PAYROLL EXPENDITURES BY HURON STEVEDORING CORPORATION UNDER COST-PLUS-FIXED-FEE CONTRACT #DA-W-1098-ENG-1728 DATED JUNE 15. IT WILL BE NOTED THAT THE SOLE EVIDENCE OF PAYMENT PRESENTED IN SUPPORT OF THE SUBJECT VOUCHER IS A CERTIFICATION BY THE CONTRACTOR THAT THE EMPLOYEES WERE PAID IN CASH. OR A CERTIFICATION THAT PAYMENT OF THE EMPLOYEES WAS WITNESSED BY A GOVERNMENT REPRESENTATIVE (20 COMP.GEN. 477). "2. ARE BEING WITHHELD BY IT PENDING A DETERMINATION AS TO THE DISPOSITION OF THE INCLOSED VOUCHER. INSTRUCTIONS ARE REQUESTED.". ARE AS FOLLOWS: "SINCE IT APPEARS THAT UNDER THE CIRCUMSTANCES IT WOULD NOT HAVE BEEN FEASIBLE TO OBTAIN SIGNED PAYROLL RECEIPTS ACKNOWLEDGING PAYMENT AND THE VOUCHER IS SUPPORTED BY AN AFFIDAVIT EXECUTED BY THE CONTRACTOR STATING THAT THE ATTACHED PAYROLL IS A TRUE AND ACCURATE REPORT OF THE WAGES PAID FOR THE INVOLVED PERIOD AND A GOVERNMENT REPRESENTATIVE HAS CERTIFIED THAT THE ORIGINAL TIME CARDS OF THE CONTRACTOR SUPPORT THE ABSTRACT OF PAYROLLS PRESENTED.

B-31726, JAN 26, 1943

PRECIS-UNAVAILABLE

COLONEL C. B. LENOW, F.D., U.S. ARMY:

THERE HAS BEEN RECEIVED, BY REFERENCE FROM HEADQUARTERS, SERVICES OF SUPPLY, FISCAL DIVISION, YOUR LETTER OF DECEMBER 1, 1942, ADDRESSED TO THE CHIEF OF FINANCE, AS FOLLOW:

"1. INCLOSED HEREWITH IS VOUCHER IN AMOUNT OF $984.77 COVERING REIMBURSEMENT FOR PAYROLL EXPENDITURES BY HURON STEVEDORING CORPORATION UNDER COST-PLUS-FIXED-FEE CONTRACT #DA-W-1098-ENG-1728 DATED JUNE 15, 1942. IT WILL BE NOTED THAT THE SOLE EVIDENCE OF PAYMENT PRESENTED IN SUPPORT OF THE SUBJECT VOUCHER IS A CERTIFICATION BY THE CONTRACTOR THAT THE EMPLOYEES WERE PAID IN CASH. A LETTER DATED NOVEMBER 19, 1942, ADDRESSED TO THE DIVISION ENGINEER, NORTH ATLANTIC DIVISION, AND ATTACHED TO THE VOUCHER EXPLAINS THE REASONS FOR FAILURE TO PRESENT ONE OF THE APPROVED FORMS OF EVIDENCE OF CASH PAYMENTS. THESE APPROVED FORMS INCLUDE SIGNED RECEIPTS OR A CERTIFICATE BY A GOVERNMENT REPRESENTATIVE THAT THE ORIGINAL SIGNED PAYROLL RECEIPTS HAD BEEN EXAMINED, AND THAT THEY SUPPORT THE FACTS RECITED ON THE PAYROLL (20 COMP.GEN. 664), OR A CERTIFICATION THAT PAYMENT OF THE EMPLOYEES WAS WITNESSED BY A GOVERNMENT REPRESENTATIVE (20 COMP.GEN. 477).

"2. THE CONTRACTOR HAS INFORMALLY ADVISED THIS OFFICE THAT A CONSIDERABLE NUMBER OF REIMBURSEMENT VOUCHERS COVERING PAYROLLS, SUPPORTED IN THE SAME MANNER AS THE INSTANT ONE, ARE BEING WITHHELD BY IT PENDING A DETERMINATION AS TO THE DISPOSITION OF THE INCLOSED VOUCHER. STRESSING ITS NEED FOR FUNDS, THE CONTRACTOR HAS REQUESTED THAT A DECISION BE OBTAINED AS SOON A PRACTICABLE. IN VIEW OF THE ABOVE, INSTRUCTIONS ARE REQUESTED."

THE VIEWS OF THE CHIEF OF ENGINEERS IN THE MATTER, AS SET FORTH IN THIRD INDORSEMENT OF DECEMBER 18, 1942, TO THE CHIEF OF FINANCE, ARE AS FOLLOWS:

"SINCE IT APPEARS THAT UNDER THE CIRCUMSTANCES IT WOULD NOT HAVE BEEN FEASIBLE TO OBTAIN SIGNED PAYROLL RECEIPTS ACKNOWLEDGING PAYMENT AND THE VOUCHER IS SUPPORTED BY AN AFFIDAVIT EXECUTED BY THE CONTRACTOR STATING THAT THE ATTACHED PAYROLL IS A TRUE AND ACCURATE REPORT OF THE WAGES PAID FOR THE INVOLVED PERIOD AND A GOVERNMENT REPRESENTATIVE HAS CERTIFIED THAT THE ORIGINAL TIME CARDS OF THE CONTRACTOR SUPPORT THE ABSTRACT OF PAYROLLS PRESENTED, IT IS RECOMMENDED THAT THE VOUCHER BE ADMINISTRATIVELY APPROVED FOR PAYMENT AND FORWARDED TO THE COMPTROLLER GENERAL FOR AN ADVANCE DECISION."

UNDER PARAGRAPH 5, PART II OF THE INVOLVED CONTRACT, IT WAS AGREED, IN PERTINENT PART, THAT:

"THE GOVERNMENT SHALL PAY TO THE STEVEDORE AND TERMINAL OPERATOR, AS SOON AFTER THE COMPLETION OF EACH OPERATION PERFORMED BY IT UNDER THE PROVISIONS OF THIS AGREEMENT AS IS PRACTICABLE AND UPON PROPER VOUCHERS AND CERTIFICATION, A SUM EQUAL TO THE TOTAL OF THE FOLLOWING AMOUNTS:

"FOR STEVEDORE OPERATION

"(A) THE AMOUNT EXPENDED BY THE STEVEDORE AND TERMINAL OPERATOR, IN PAYMENT OF WAGES FOR ALL DIRECT LABOR EMPLOYED IN THE LOADING AND DISCHARGING OF VESSELS, AND OTHER DIRECT LABOR ***.

"(C) THE ACTUAL COST FOR CLERKING, WATCHING SUPERVISING, INCLUDING THE COST OF DOCK CLERKS, PIER WATCHMEN, PIER SUPERINTENDENTS, PIER OFFICE SUPPLIES, AND INSURANCE AND TAXES ON PERSONNEL.

"(D) THE ACTUAL COST TO HIM FOR CHECKERS, TALLEY MEN, DOCK LABOR, COOPERS AND COOPERS' SUPPLIES, AND SPECIAL CARGO OR SHIP'S WATCHMEN, INCLUDING COMPENSATION INSURANCE AND TAXES ON SUCH LABOR."

AS STATED IN YOUR LETTER, THE ONLY EVIDENCE OF RECORD THAT THE ITEMS COVERED BY THE VOUCHER HAVE BEEN PAID IS THE CONTRACTOR'S CERTIFICATION TO THAT EFFECT APPEARING ON THE ORIGINAL ABSTRACTS OF PAY ROLLS ATTACHED TO THE VOUCHER, AND THE STATEMENT CONTAINED IN THE CONTRACTORS'S LETTER OF NOVEMBER 19, 1942, SUBMITTED WITH THE VOUCHER, TO THE EFFECT THAT, SINCE IT IS NEITHER FEASIBLE NOR THE PREVAILING CUSTOM IN NEW YORK CITY TO PAY STEVEDORING AND TERMINAL EMPLOYEES BY CHECK, THE INVOLVED EMPLOYEES WERE PAID IN CASH. WHILE THE SAID CERTIFICATION AND STATEMENTS, TOGETHER WITH THE CERTIFICATION OF APPROVAL BY THE "GOVERNMENT REPRESENTATIVE," ALSO APPEARING ON THE ABSTRACTS OF PAY ROLLS, INDICATE THAT THE TIME WORKED AND THE WAGES PAID TO THE EMPLOYEES ARE CORRECT, IT LONG HAS BEEN CONSIDERED DESIRABLE AND PROPER THAT PRIMARY OR OTHER CONCRETE EVIDENCE OF ACTUAL PAYMENT BE FURNISHED IN SUPPORT OF CLAIMS FOR REIMBURSEMENT OF EXPENDITURES CHARGEABLE TO PUBLIC FUNDS.

IN MY DECISION OF APRIL 22, 1941, PUBLISHED IN 20 COMP.GEN. 664, IT WAS HELD THAT PAYMENTS BY "COST-PLUS" CONTRACTORS, EITHER BY CASH OR BY CHECK; SHOULD BE EVIDENCED BY RECEIPTS OF THE PAYEES, IN ORDER TO SAFEGUARD THE INTERESTS OF THE GOVERNMENT. IN MY DECISION OF FEBRUARY 25, 1941, PUBLISHED IN 20 COMP.GEN. 477, INVOLVING A SITUATION WHEREIN A "COST-PLUS" CONTRACTOR HAD MADE PAYMENTS TO ITS EMPLOYEES IN CASH WITHOUT OBTAINING RECEIPTS THEREFOR, IT WAS HELD THAT A PROPER CERTIFICATION THAT THE PAYMENTS WERE WITNESSED BY A GOVERNMENT REPRESENTATIVE WOULD BE ACCEPTABLE AS MEETING THE NECESSARY AUDIT REQUIREMENTS OF THIS OFFICE. ALSO SEE IN THIS CONNECTION 20 COMP.GEN. 341; ID. 921; 21 ID. 180; ID. 593; ID. 800; 22 ID. 57.

OBVIOUSLY, THE UNDERLYING BASIS FOR THESE DECISIONS IS THE FACT THAT THE CORRECTNESS AND ACTUALITY OF REIMBURSABLE EXPENDITURES OTHERWISE ARE NOT SUBJECT TO VERIFICATION FROM THE RECORDS OF THIS OFFICE. OBVIOUSLY, TOO, WHEN VIEWED IN THE LIGHT OF THE STATUTORY DUTY OF THIS OFFICE TO REQUIRE NECESSARY EVIDENCE IN SUPPORT OF PAYMENTS BY DISBURSING OFFICERS FROM APPROPRIATED MONEYS, THE REQUIREMENTS IMPOSED BY THE DECISIONS ARE ESSENTIAL AND MUST BE GIVEN EFFECT EVEN THOUGH THEY MAY DIFFER FROM REQUIREMENTS CUSTOMARILY IMPOSED BY THE "PAY-OFF" PROCEDURE EMPLOYED IN A PARTICULAR INDUSTRY.

IN VIEW THEREOF, AND SINCE, AS A PRACTICAL MATTER, NO VALID REASON IS PERCEIVED AS TO WHY APPROPRIATE RECEIPTS COULD NOT HAVE BEEN PROCURED BY THE CONTRACTOR WITHOUT UNDUE DIFFICULTY AT THE TIME THE PAY ROLL ITEMS COVERED BY THE VOUCHER WERE PAID, OR WHY, IN LIEU THEREOF, IT WOULD NOT HAVE BEEN FEASIBLE FOR A GOVERNMENT REPRESENTATIVE TO HAVE WITNESSED PAYMENT OF THE ITEMS, THERE IS NO ALTERNATIVE BUT TO CONCLUDE THAT THE CONTRACTOR HAS NOT ESTABLISHED ITS RIGHT TO BE REIMBURSED FOR THE SAID PAYMENTS.

ACCORDINGLY, THE VOUCHER, TOGETHER WITH SUPPORTING PAPERS, IS RETURNED HEREWITH AND YOU ARE ADVISED THAT, ON THE PRESENT RECORD PAYMENT THEREON IS NOT AUTHORIZED.