Reimbursement of Funds to School

The Department of State requested an advance decision concerning whether it can pay part of the proceeds from the sale of three school vehicles to an overseas school. The record showed that as a result of political tensions, the school arranged that the U.S. embassy sell three of the school's motor vehicles. Although State indicated that occasionally the proceeds from these sales are given directly to the seller, the monies were placed in the embassy cashier's safe because the school had closed. However, as a result of an embassy seizure, the safe was lost and never recovered and the disbursing office was not notified to make the payment to the school. GAO concluded that State could not pay the school since the embassy as the agent did not breach any duty owed to the school. The proceeds from the sale were lost as a result of an uncontrollable event. However, the claim can be reported to Congress under the Meritorious Claims Act, since seizure and occupation of the embassy and resulting loss of proceeds from the embassy's sale of the school's vehicles was an extraordinary circumstance calling for equitable consideration.