B-84755, APRIL 19, 1949, 28 COMP. GEN. 594

B-84755, APRIL 19, 1949, 28 COMP. GEN. 594

SALES - PUBLIC PROPERTY - PROCEEDS - USE TO PAY COSTS OF TRANSPORTING TO SITE OF SALE UNDER THE ACT OF JUNE 8, 1896, AS AMENDED, AUTHORIZING PAYMENT OF THE EXPENSES OF SALES OF PUBLIC PROPERTY FROM THE PROCEEDS THEREOF BEFORE DEPOSIT INTO THE TREASURY, THE COSTS OF TRANSPORTING GOVERNMENT OWNED HORSES OF THE LIQUIDATING REMOUNT SERVICE TO A PLACE OF AUCTION SALE WHICH CANNOT BE PAID FROM THE CURRENT OPERATING APPROPRIATION BECAUSE OF THE INSUFFICIENCY OF FUNDS MAY BE CONSIDERED AS SIMILAR TO THE COSTS OF CARTAGE TO PLACE OF SALE AND DIRECTLY ATTRIBUTABLE THERETO AND, AS SUCH, PROPERLY ARE PAYABLE FROM THE PROCEEDS OF SALE.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF AGRICULTURE, APRIL 19, 1949:

THERE HAS BEEN CONSIDERED YOUR LETTER DATED MARCH 18, 1949, REQUESTING DECISION AS TO WHETHER THE COST OF TRANSPORTING GOVERNMENT OWNED HORSES FROM VARIOUS PARTS OF THE COUNTRY TO A CENTRAL SALE SITE MAY BE PAID FROM THE PROCEEDS OF THE SALE.

IT IS EXPLAINED IN YOUR LETTER THAT IT IS THE INTENTION OF YOUR DEPARTMENT TO DISCONTINUE THE REMOUNT SERVICE WHICH WAS TRANSFERRED TO YOUR DEPARTMENT FROM THE DEPARTMENT OF THE ARMY PURSUANT TO PUBLIC LAW 494, APPROVED APRIL 21, 1948, 62 STAT. 197, AND TO LIQUIDATE THE PROPERTY. IT IS STATED THAT IT WILL BE NECESSARY TO SELL APPROXIMATELY 450 HORSES WHICH HAVE BEEN TRANSPORTED ON A LOAN BASIS FROM REMOUNT STATIONS TO PRIVATE INDIVIDUALS AND THAT THE COST OF RETURNING THESE HORSES TO THE REMOUNT STATIONS WOULD BE MORE, IN SOME CASES, THAN WOULD BE REALIZED FROM THEIR SALE. CONSEQUENTLY, IT IS PROPOSED TO TRANSPORT ONLY THE MOST VALUABLE ANIMALS TO ONE REMOUNT STATION FOR THE PURPOSE OF SELLING THEM AT AUCTION AND TO SELL THE LESS VALUABLE HORSES ON A "WHERE IS" AND "AS IS" BASIS.

IT IS FURTHER STATED THAT INASMUCH AS NO PROVISION HAS BEEN MADE IN THE PRESIDENT'S BUDGET TO CONTINUE THE REMOUNT SERVICE BEYOND JUNE 30, 1949, THE DEPARTMENT MUST LIQUIDATE THE REMOUNT SERVICE WITHIN THE OPERATING APPROPRIATION FOR THE CURRENT FISCAL YEAR, WHICH YOU STATE IS INSUFFICIENT TO FINANCE THE COST OF RETURNING THE MOST VALUABLE ANIMALS TO THE REMOUNT STATIONS WHERE THEY ARE SPREAD OUT SINGLY THROUGHOUT THE COUNTRY, AND THAT YOUR DEPARTMENT IS CONSIDERING--- IN ORDER TO OBTAIN THE GREATEST RETURN TO THE GOVERNMENT--- WHETHER THE PROCEEDS OF THE SALE MAY BE USED TO DEFRAY THE COSTS OF RETURNING THE ANIMALS TO THE PLACE OF SALE.

THE ACT OF JUNE 8, 1896, AS AMENDED (31 U.S.C. 489), PROVIDES AS FOLLOWS:

FROM THE PROCEEDS OF SALES OF OLD MATERIAL, CONDEMNED STORES, SUPPLIES, OR OTHER PUBLIC PROPERTY OF ANY KIND, BEFORE BEING DEPOSITED INTO THE TREASURY EITHER AS MISCELLANEOUS RECEIPTS ON ACCOUNT OF "PROCEEDS OF GOVERNMENT PROPERTY" OR TO THE CREDIT OF THE APPROPRIATIONS TO WHICH SUCH PROCEEDS ARE BY LAW AUTHORIZED TO BE MADE, THERE MAY BE PAID THE EXPENSES OF SUCH SALES, AS APPROVED BY THE GENERAL ACCOUNTING OFFICE, SO AS TO REQUIRE ONLY THE NET PROCEEDS OF SUCH SALES TO BE DEPOSITED INTO THE TREASURY, EITHER AS MISCELLANEOUS RECEIPTS OR TO THE CREDIT OF SUCH APPROPRIATIONS, AS THE CASE MAY BE.

THE ABOVE CITED ACT HAS BEEN THE SUBJECT OF NUMEROUS DECISIONS BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT AND A COMPREHENSIVE SUMMARY OF SUCH DECISIONS AND THE ITEMS OF EXPENSE WHICH PROPERLY ARE CHARGEABLE TO THE PROCEEDS OF SALES AS EXPENSES CONNECTED THEREWITH MAY BE FOUND IN 5 5 COMP. GEN. 680 AND B-30633, DECEMBER 31, 1942. SUCH ALLOWABLE EXPENSES HAVE BEEN LIMITED GENERALLY TO DIRECT EXPENSES OF SALES, SUCH AS ADVERTISING, AUCTIONEER'S FEES, CARTAGE TO THE PLACE OF SALE, C., WHILE EXPENSES WHICH ARE ONLY INCIDENTAL THERETO ADMINISTRATIVE IN NATURE GENERALLY HAVE BEEN DENIED. SUCH DIRECT EXPENSES OF SALES, HOWEVER, HAVE BEEN ALLOWED UNDER THE ABOVE DECISIONS ONLY WHERE NO SPECIFIC APPROPRIATION HAS BEEN MADE THEREFOR. 26 COMP. GEN. 857.

SECTION 2 OF PUBLIC LAW 494, 62 STAT. 197, SUPRA, SPECIFICALLY AUTHORIZES THE SECRETARY OF AGRICULTURE TO LOAN OR SELL SUCH ANIMALS, AND FUNDS TO CARRY OUT SUCH AUTHORITY WERE PROVIDED IN THE SECOND DEFICIENCY APPROPRIATION ACT, 1948, APPROVED JUNE 25, 1948, 62 STAT. 1027, 1037. HOWEVER, IT DOES NOT APPEAR THAT THE CONGRESS HAD IN MIND THE TOTAL LIQUIDATION OF SUCH PROGRAM BUT RATHER ONLY NORMAL SALES OF HORSES SURPLUS TO THE PROGRAM.

WHILE THE LEGISLATIVE HISTORY OF PUBLIC LAW 494 INDICATES THAT THE TRANSFER OF THE REMOUNT SERVICE FROM THE DEPARTMENT OF THE ARMY TO THE DEPARTMENT OF AGRICULTURE WAS FOR THE PURPOSES OF CONTINUING A PROGRAM FOR THE IMPROVEMENT OF THE GENERAL BREED OF LIGHT HORSES IN THE UNITED STATES, SINCE IT HAS BEEN DETERMINED BY YOUR DEPARTMENT THAT THE PROGRAM NOW SHOULD BE LIQUIDATED--- A MATTER NOT FOR CONSIDERATION BY THIS OFFICE--- AND SINCE IT HAS BEEN DETERMINED BY YOU THAT THE AUCTION SALE HEREIN CONSIDERED WILL OBTAIN THE GREATEST RETURN TO THE GOVERNMENT AND THAT THE CURRENT APPROPRIATION IS INSUFFICIENT TO BEAR THE COSTS OF TRANSPORTING THE HORSES TO THE PLACE OF SALE, SUCH EXPENSES PROPERLY MAY BE CONSIDERED AS BEING SIMILAR TO COSTS OF "CARTAGE TO PLACE OF SALE" AND DIRECTLY ATTRIBUTABLE THERETO SO THAT THE COST THEREOF PROPERLY MAY BE PAID FROM THE PROCEEDS OF THE SALE.