B-80059, DEC 22, 1948

B-80059: Dec 22, 1948

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WITH THE REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT THEREON IS AUTHORIZED. THE RECORDS SHOW THAT THE AMOUNTS OF THE VOUCHERS REPRESENT A PART OF THE SUMS PAID TO THE CONTRACTOR AS REIMBURSEMENT OF FISCAL YEAR 1943 OVERHEAD EXPENSES WHICH WERE ALLOCATED TO THE COST-PLUS-A-FIXED-FEE CONTRACTS. IT APPEARS THAT EXCEPTIONS WERE TAKEN TO THE PAYMENT OF SUCH AMOUNTS FOR THE REASON THAT APPROXIMATELY 17 PERCENT OF THE CONTRACTOR'S INDICATED OVERHEAD EXPENSE FOR TRAVEL OF ITS EMPLOYEES BY AUTOMOBILE WAS NOT SUBSTANTIATED BY CONCLUSIVE EVIDENCE OF THE MILEAGE INVOLVED IN SUCH TRAVEL. A COPY OF WHICH IS ATTACHED TO RECLAIM AUDIT VOUCHER NO. STATES THAT THE QUESTIONED ITEMS OF TRAVEL CONCERNED EMPLOYEES WHO WERE PERMANENTLY STATIONED WITHIN VARIOUS CITIES AND PERFORMING DAILY ROUTINE PRODUCTION FOLLOW-UP AND COORDINATING PRODUCTION CHANGES WITH VENDORS AND SUBCONTRACTORS.

B-80059, DEC 22, 1948

PRECIS-UNAVAILABLE

COLONEL J. HARRIS, F.D., U.S. ARMY:

THERE HAS BEEN RECEIVED BY REFERENCE FROM THE CHIEF OF FINANCE YOUR LETTER OF JUNE 23, 1948, TRANSMITTING, WITH THE REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT THEREON IS AUTHORIZED, 24 RECLAIM AUDIT VOUCHERS, STATED IN FAVOR OF DOUGLAS AIRCRAFT COMPANY, INC., IN AMOUNTS TOTALING $7,299.95 REPRESENTING SUMS COLLECTED FROM THE SAID COMPANY AS THE RESULT OF EXCEPTIONS TAKEN BY THE AUDIT DIVISION OF THE GENERAL ACCOUNTING OFFICE TO THE PREVIOUS PAYMENT THEREOF UNDER VARIOUS COST-PLUS-A-FIXED-FEE CONTRACTS WITH THE GOVERNMENT.

THE RECORDS SHOW THAT THE AMOUNTS OF THE VOUCHERS REPRESENT A PART OF THE SUMS PAID TO THE CONTRACTOR AS REIMBURSEMENT OF FISCAL YEAR 1943 OVERHEAD EXPENSES WHICH WERE ALLOCATED TO THE COST-PLUS-A-FIXED-FEE CONTRACTS. ALSO, IT APPEARS THAT EXCEPTIONS WERE TAKEN TO THE PAYMENT OF SUCH AMOUNTS FOR THE REASON THAT APPROXIMATELY 17 PERCENT OF THE CONTRACTOR'S INDICATED OVERHEAD EXPENSE FOR TRAVEL OF ITS EMPLOYEES BY AUTOMOBILE WAS NOT SUBSTANTIATED BY CONCLUSIVE EVIDENCE OF THE MILEAGE INVOLVED IN SUCH TRAVEL.

WITH REFERENCE TO THE MATTER, THE CONTRACTOR, IN A LETTER DATED DECEMBER 15, 1947, A COPY OF WHICH IS ATTACHED TO RECLAIM AUDIT VOUCHER NO. R-131- A, STATES THAT THE QUESTIONED ITEMS OF TRAVEL CONCERNED EMPLOYEES WHO WERE PERMANENTLY STATIONED WITHIN VARIOUS CITIES AND PERFORMING DAILY ROUTINE PRODUCTION FOLLOW-UP AND COORDINATING PRODUCTION CHANGES WITH VENDORS AND SUBCONTRACTORS, AND THAT THE SAID EMPLOYEES MADE INNUMERABLE TRIPS BACK AND FORTH THROUGHOUT THE CITIES TO VARIOUS VENDORS. ALSO, THE CONTRACTOR STATES THAT IT WAS, THEREFORE, NOT FEASIBLE NOR PRACTICAL TO ATTEMPT TO SET UP DETAILED REQUIREMENTS RELATING TO THEIR TRAVEL AND ONLY REPORTS OF TOTAL DAILY MILEAGE BY THESE EMPLOYEES WERE REQUIRED.

THE STATEMENTS OF THE CONTRACTOR ARE VERIFIED IN A LETTER DATED JUNE 16, 1948, FROM THE RESIDENT AUDITOR, AND IT IS STATED THEREIN THAT, WHILE THE POINTS OF TRAVEL WERE NOT IDENTIFIED BY ADDRESSES, THE EMPLOYEES HAD SUBMITTED EVIDENCE, SUCH AS INSPECTION REPORTS, CORRESPONDENCE, ETC., IN SUBSTANTIATION OF THE TOTAL MILEAGES CLAIMED BY THEM FOR THEIR DAILY TRAVEL. IT IS FURTHER INDICATED IN THE SAID LETTER THAT THE RECORDS OF THE CONTRACTOR WERE REVIEWED BY THE CONTRACTING OFFICER AND THE RESIDENT AUDITOR AND THAT, ON THE BASIS OF SUCH REVIEWS, IT HAS ADMINISTRATIVELY BEEN DETERMINED THAT ALL OF THE TRAVEL IN QUESTION WAS ACTUALLY PERFORMED, THAT NO WILLFUL ATTEMPT WAS MADE TO OVERSTATE ACTUAL MILEAGE AND THAT, WITH RESPECT TO THE EMPLOYEES INVOLVED, THE CONTRACTOR WAS JUSTIFIED IN REQUIRING THEM TO SHOW ONLY THE TOTAL MILEAGE TRAVEL EACH DAY.

ALL OF THE RECLAIM VOUCHERS HAVE BEEN APPROVED BY THE CONTRACTING OFFICER AND, SINCE IT NOW APPEARS THAT THE TOTAL MILEAGE STATEMENTS OF THE CONTRACTOR'S EMPLOYEES ARE SUBSTANTIALLY CORRECT, THIS OFFICE WILL NOT BE REQUIRED FURTHER TO OBJECT TO THE ALLOCATION OF A PROPER PROPORTION OF THE EXPENDITURES AS SHOWN IN THE PARTICULAR OVERHEAD EXPENSE ACCOUNT TO THE COST-PLUS-A-FIXED-FEE CONTRACTS. SEE 21 COMP.GEN. 588, 590. ACCORDINGLY, THE VOUCHERS, TOGETHER WITH THEIR ACCOMPANYING PAPERS, ARE RETURNED HEREWITH, AND YOU ARE ADVISED THAT PAYMENT THEREON IS AUTHORIZED, IF OTHERWISE CORRECT.