B-7997, FEBRUARY 14, 1940, 19 COMP. GEN. 722

B-7997: Feb 14, 1940

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ARE STOLEN OR OTHERWISE LOST. THERE IS NO AUTHORITY UNDER THE ACT TO CLEAR THE SAID CHARGE BY CREDITING THE GENERAL ACCOUNT OF ADVANCES AND CHARGING THE APPROPRIATION TO WHICH THE MAJOR PORTION OF THE DISBURSING OFFICER'S DISBURSEMENTS WERE CHARGED. 1940: REFERENCE IS MADE TO LETTER DATED DECEMBER 21. IT IS DESIRED TO INVITE ATTENTION BRIEFLY TO THE HISTORY OF GENERAL ACCOUNT OF ADVANCES AND THE DESIRABILITY FROM THE NAVY DEPARTMENT'S VIEWPOINT THAT THIS SETTLEMENT BE REVERSED. THE LEGISLATION ESTABLISHING GENERAL ACCOUNT OF ADVANCES WAS ENACTED BY THE CONGRESS JUNE 19. ADVANCES FROM THIS ACCOUNT ARE "NOT TO EXCEED THE TOTAL APPROPRIATION FOR THE NAVY.'. GENERAL ACCOUNT OF ADVANCES WAS IN OPERATION AND IT WAS THE PRACTICE OF THE AUDITOR FOR THE NAVY DEPARTMENT TO LEAVE IN GENERAL ACCOUNT OF ADVANCES ALL DISALLOWANCES MADE BY HIS OFFICE AND LOSSES OF FUNDS FROM THEFT.

B-7997, FEBRUARY 14, 1940, 19 COMP. GEN. 722

LOSS OF FUNDS ADVANCED FROM NAVY GENERAL ACCOUNT OF ADVANCES - LACK OF AUTHORITY FOR TRANSFERRING CHARGE TO AN APPROPRIATION WHERE FUNDS ADVANCED TO A DISBURSING OFFICER OF THE NAVY AND CHARGED TO THE GENERAL ACCOUNT OF ADVANCES FOR NAVAL APPROPRIATIONS ESTABLISHED UNDER THE ACT OF JUNE 19, 1878, 20 STAT. 167, ARE STOLEN OR OTHERWISE LOST, THERE IS NO AUTHORITY UNDER THE ACT TO CLEAR THE SAID CHARGE BY CREDITING THE GENERAL ACCOUNT OF ADVANCES AND CHARGING THE APPROPRIATION TO WHICH THE MAJOR PORTION OF THE DISBURSING OFFICER'S DISBURSEMENTS WERE CHARGED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE NAVY, FEBRUARY 14, 1940:

REFERENCE IS MADE TO LETTER DATED DECEMBER 21, 1939 (GF/L1-1-/10), ( AA) (, FROM THE PAYMASTER GENERAL OF THE NAVY, AS FOLLOWS: SUBJECT: CHARGE APPEARING ON TRANSFER AND COUNTER WARRANT NO. 1868 (FIRST QUARTER 1940) TO GENERAL ACCOUNT OF ADVANCES--- AMOUNT $369.80.

THE EXPLANATION ON THIS TRANSFER AND COUNTER WARRANT READS AS FOLLOWS:

"TO REVERSE ADJUSTMENT EFFECTED BY TRANSFER AND COUNTER WARRANT 3218, 3RD QUARTER 1939, AS A RESULT OF NAVY SCHEDULE NO. 370, OF AN AMOUNT REPORTED AS A SHORTAGE IN THE SECOND QUARTER 1939 ACCOUNT OF R. E. DE LA BARRE, LT. ( JR. GR.), WHICH AMOUNT SHOULD REMAIN CHARGED TO "17X000" PENDING RECEIPT OF EVIDENCE OF PROPER ACCOUNTING.'

IN CONNECTION WITH THIS ADJUSTMENT, IT IS DESIRED TO INVITE ATTENTION BRIEFLY TO THE HISTORY OF GENERAL ACCOUNT OF ADVANCES AND THE DESIRABILITY FROM THE NAVY DEPARTMENT'S VIEWPOINT THAT THIS SETTLEMENT BE REVERSED.

THE LEGISLATION ESTABLISHING GENERAL ACCOUNT OF ADVANCES WAS ENACTED BY THE CONGRESS JUNE 19, 1878 (20 STAT. 167-168, CHAP. 312). ADVANCES FROM THIS ACCOUNT ARE "NOT TO EXCEED THE TOTAL APPROPRIATION FOR THE NAVY.'

DURING THE PERIOD FROM THE ENACTMENT OF THIS LEGISLATION UNTIL THE BUDGET AND ACCOUNTING ACT ESTABLISHED THE GENERAL ACCOUNTING OFFICE, GENERAL ACCOUNT OF ADVANCES WAS IN OPERATION AND IT WAS THE PRACTICE OF THE AUDITOR FOR THE NAVY DEPARTMENT TO LEAVE IN GENERAL ACCOUNT OF ADVANCES ALL DISALLOWANCES MADE BY HIS OFFICE AND LOSSES OF FUNDS FROM THEFT, SHIPWRECK, OR OTHERWISE UNTIL REIMBURSED BY DISBURSING OFFICERS OR ADJUSTMENTS WERE OTHERWISE MADE. IN MANY CASES IT WAS IMPOSSIBLE TO MAKE THEM. DISBURSING OFFICERS FREQUENTLY SECURED LEGISLATION FROM THE CONGRESS WHICH RELIEVED THEM OF RESPONSIBILITY FOR THE LOSSES, BUT NO APPROPRIATION WAS MADE TO RELIEVE GENERAL ACCOUNT OF ADVANCES OF THE CHARGES.

THIS WAS THE STATUS OF THE ACCOUNT AT THE TIME THE GENERAL ACCOUNTING OFFICE WAS ESTABLISHED. INSPECTORS FROM YOUR OFFICE INVESTIGATED THIS ACCOUNT, AND AFTER GOING INTO THE MATTER THOROUGHLY, REALIZED THE ADVANTAGES OF THE ACCOUNT TO THE NAVY DEPARTMENT AND WHY IT WAS ESTABLISHED, AND AT THE SAME TIME THOROUGHLY CONSIDERED THE ABUSES WHICH HAD CREPT INTO ITS ADMINISTRATION AND HAD CAUSED IT TO BE LOOKED UPON WITH SUSPICION BY YOUR OFFICE.

IT WAS, THEREFORE, MUTUALLY AGREED THAT IT WOULD BE ADVISABLE TO CLOSE OUT THE PRESENT (OLD) ACCOUNT AND ESTABLISH A NEW GENERAL ACCOUNT OF ADVANCES AT THE BEGINNING OF THE NEXT FISCAL YEAR. THEREFORE, ON 1 JULY 1922, GENERAL ACCOUNT OF ADVANCES (NEW) WAS ESTABLISHED AND THE OLD ACCOUNT WAS ALLOWED TO LAPSE.

TO PREVENT THE POSSIBILITY OF THE NEW ACCOUNT GETTING INTO THE CONDITION OF THE OLD BY CHARGING IT WITH UNADJUSTABLE AND UNREIMBURSABLE ITEMS, IT WAS AGREED THAT ALL SUSPENSIONS AND DISALLOWANCES SHOULD BE MADE UNDER THE APPROPRIATION NOTED ON THE PUBLIC VOUCHER OR PAY ROLL, AND THAT IN THE CASE OF FUNDS STOLEN OR OTHERWISE LOST, THE AMOUNT WOULD BE CHARGED TO THE APPROPRIATION TO WHICH THE MAJOR PORTION OF THE DISBURSING OFFICER'S DISBURSEMENTS WERE CHARGED. IT WILL BE OBSERVED THAT THIS HAS THE SAME EFFECT AS WHAT WOULD OCCUR IN OTHER DEPARTMENTS WHERE FUNDS ARE DRAWN DIRECTLY UNDER THE DEPARTMENT'S APPROPRIATIONS, AND LOST.

SINCE ESTABLISHING THIS PROCEDURE, ACCOUNTING FOR FUNDS DRAWN BY DISBURSING OFFICERS UNDER GENERAL ACCOUNT OF ADVANCES HAS BEEN SIMPLE AND ACCURATE, THE DEPARTMENT BEING ABLE AT THE END OF ANY GIVEN ACCOUNTING PERIOD TO ITEMIZE THE BALANCE UNDER THE FUND AND SHOW THE INDIVIDUAL RESPONSIBILITY OF DISBURSING OFFICERS AS WELL AS THE ADJUSTMENTS NECESSARY BY THE GENERAL ACCOUNTING OFFICE AND TREASURY DEPARTMENT TO BRING THE BALANCE TO ITS TRUE STATUS.

NEITHER FROM AN AUTHORITATIVE NOR AN ACCOUNTING STANDPOINT DOES THERE APPEAR TO BE A REASON FOR ALLOWING UNRECOVERABLE LOSSES TO BECOME AN INDEFINITE AND UNADJUSTABLE CHARGE TO GENERAL ACCOUNT OF ADVANCES, A REVOLVING FUND WHICH SHOULD NOT RECEIVE A PERMANENT CHARGE OR CREDIT. THE CONTRARY IT IS BELIEVED THERE IS AS MUCH IF NOT MORE AUTHORITY FOR CHARGING SUCH LOSSES TO AN APPROPRIATION, WHICH IS WHAT WOULD OCCUR IN THE CASE OF ANY OTHER GOVERNMENT ESTABLISHMENT WHERE DISBURSING AGENTS DRAW FUNDS DIRECTLY UNDER APPROPRIATIONS. IT IS THEREFORE EARNESTLY REQUESTED THAT RECONSIDERATION BE GIVEN THIS MATTER AND THAT READJUSTMENT OF SETTLEMENT TRANSFER AND COUNTER WARRANT NO. 1868 BE MADE.

CERTIFICATE OF SETTLEMENT NO. 10565052 DATED 19 OCTOBER 1939, SETTLED THE AMOUNT OF SALARY DUE AND UNPAID R. E. DE LA BARRE. THIS AMOUNT WAS APPLIED AGAINST THIS OFFICER'S INDEBTEDNESS TO THE UNITED STATES AND CREDITED TO GENERAL ACCOUNT OF ADVANCES, THUS REDUCING THE AMOUNT STANDING IN GENERAL ACCOUNT OF ADVANCES (NEW) TO THE SUM OF $342.60 WHICH AMOUNT THE DEPARTMENT IS REQUESTING BE ADJUSTED BY CHARGING PAY,SUBSISTENCE, AND TRANSPORTATION, NAVY, 1939, AND CREDITING A LIKE AMOUNT TO GENERAL ACCOUNT OF ADVANCES (NEW).

THE ACT OF JUNE 19, 1878, 20 STAT. 167, AUTHORIZING A GENERAL ACCOUNT OF ADVANCES FOR NAVAL APPROPRIATIONS, PROVIDES AS FOLLOWS:

THAT THE SECRETARY OF THE NAVY BE, AND HE IS HEREBY, AUTHORIZED TO ISSUE HIS REQUISITIONS FOR ADVANCES TO DISBURSING OFFICERS AND AGENTS OF THE NAVY UNDER A " GENERAL ACCOUNT OF ADVANCES," NOT TO EXCEED THE TOTAL APPROPRIATION FOR THE NAVY, THE AMOUNT SO ADVANCED TO BE EXCLUSIVELY USED TO PAY CURRENT OBLIGATIONS UPON PROPER VOUCHERS AND THAT " PAY OF THE NAVY" SHALL HEREAFTER BE USED ONLY FOR ITS LEGITIMATE PURPOSE, AS PROVIDED BY LAW.

SEC. 2. THAT THE AMOUNT SO ADVANCED BE CHARGED TO THE PROPER APPROPRIATIONS, AND RETURNED TO " GENERAL ACCOUNT OF ADVANCES" BY PAY AND COUNTER WARRANT; THE SAID CHARGE, HOWEVER, TO PARTICULAR APPROPRIATIONS, SHALL BE LIMITED TO THE AMOUNT APPROPRIATED TO EACH.

SEC. 3. THAT THE FOURTH AUDITOR SHALL DECLARE THE SUMS DUE FROM THE SEVERAL SPECIAL APPROPRIATIONS UPON COMPLETE VOUCHERS, AS HERETOFORE, ACCORDING TO LAW; AND HE SHALL ADJUST THE SAID LIABILITIES WITH THE " GENERAL ACCOUNT OF ADVANCES.'

WHATEVER MAY HAVE BEEN THE UNDERSTANDING OF THE NAVY WITH RESPECT TO THE MATTER AS INDICATED IN THE ABOVE QUOTED LETTER IT IS EXPRESSLY PROVIDED IN THE BASIC LAW, SUPRA, THAT THE FUNDS ADVANCED TO THE DISBURSING OFFICERS OF THE NAVY ARE "TO BE EXCLUSIVELY USED TO PAY CURRENT OBLIGATIONS UPON PROPER VOUCHERS" AND THAT THE AMOUNT SO ADVANCED IS TO BE CHARGED TO THE PROPER APPROPRIATION "UPON COMPLETE VOUCHERS" WITH CREDIT TO THE GENERAL ACCOUNT OF ADVANCES. MANIFESTLY THERE IS NO AUTHORITY UNDER SUCH LAW FOR SUCH CHARGING AND CREDITING WHERE THE FUNDS ARE STOLEN OR OTHERWISE LOST, THERE BEING NO PROPER OR COMPLETE VOUCHER TO SUPPORT SUCH ADJUSTMENT. THE FUNDS UNACCOUNTED FOR ON PROPER VOUCHERS OR OTHER VALID RECEIPTS CONSTITUTE A PART OF THE DISBURSING OFFICER'S BALANCE DUE THE UNITED STATES AND THERE IS NO AUTHORITY OF LAW TO CLEAR THE GENERAL ACCOUNT OF ADVANCES BY CREDITING SAME AFTER CHARGING SUCH SHORTAGES "TO THE APPROPRIATION TO WHICH THE MAJOR PORTION OF THE DISBURSING OFFICER'S DISBURSEMENTS WERE CHARGED" AS STATED IN THE LETTER, SUPRA. ACCORDINGLY, SUCH SHORTAGES MUST REMAIN AS CHARGES AGAINST THE GENERAL ACCOUNT OF ADVANCES UNTIL CREDIT IS AUTHORIZED IN ACCORDANCE WITH LAW.

WHILE IT MAY BE, AS STATED IN THE LETTER, SUPRA, THAT HERETOFORE IN CASES OF SHORTAGES ,DISBURSING OFFICERS FREQUENTLY SECURED LEGISLATION FROM THE CONGRESS WHICH RELIEVED THEM OF RESPONSIBILITY FOR THE LOSSES, BUT NO APPROPRIATION WAS MADE TO RELIEVE GENERAL ACCOUNT OF ADVANCES OF THE CHARGES" IT WOULD APPEAR THAT THE DESIRED RESULT MAY BE ACCOMPLISHED BY HAVING EMBODIED IN THE LEGISLATION FOR RELIEF OF THE DISBURSING OFFICERS A DIRECTION THAT THE OFFICERS BE RELIEVED UNDER A PARTICULAR APPROPRIATION-- - THEREBY AUTHORIZING AN APPROPRIATE ADJUSTMENT WHICH WOULD REMOVE THE CHARGES FROM GENERAL ACCOUNT OF ADVANCES.

IN ANY EVENT THE ACTION TAKEN BY THIS OFFICE WITH RESPECT TO THE SHORTAGE IN THE SECOND QUARTER 1939 ACCOUNT OF R. E. DE LA BARRE WAS CORRECT AND WILL NOT BE DISTURBED.