B-160819-O.M. February 10, 1967

B-160819-O.M. February 10, 1967

Director, Claims Division

Returned. While section 4 of the Federal Claims Collection Act of 1966, approved July 19, 1966, Pub. L. 89-508, 80 Stat. 309 provides that nothing in that act shall diminish the existing authority of a head of an agency to compromise claims, the acceptance of the compromise offer here involved would not--within the meaning intended by section 4--dimish the Veterans Administration authority to compromise claims under 38 U.S.C. 1820.

Prior to the enactment of Public Law 89-508, certain agencies such as the Small Business Administration had unrestricted compromise authority and the Secretary of the Navy had authority to compromise certain types of claims up to $1 million. See Hearings before Subcomittee No. 2 of the House Committee on the Judiciary on H.R. 13651, 89th Congress, 2d session 23 and S. Rept. No. 1331, 89th congress, 2d session 4, respectively. It is our view that the reason for the inclusion of section 4 in Public Law 89-508 was to assure that previously existing authority for agencies to compromise in excess of $20,000 would not be affected by the enactment of Public Law 89-508 which gave all agencies authority to compromise up to $20,000. Any other construction would have the effect of precluding the Comptroller General's new compromise authority refused to compromise a claim and them submitted the debt to the Comptroller General as uncollectible. We do not believe such was intended in view of the design and purpose of Public Law 89-508 to permit more effective collection efforts by the Government and to reduce the volume or private relief legislation before Congress each year. See 112 Congressional Record, July 27, 1966, 13737.

Accordingly, the clain here involved may be handled pursuant to B-117604-O.M., February 1, 1967.

FRANK H. WEITZEL Assitant Comptroller General of the United States

Attachments

The Comptroller General

Herewith is the file pertaining to a compromise offer of $236.00 proposed by Mr. Willie E. Aclin, in full settlement of his indebtedness of $689.37, plus interest, arising from default on loan SH 321 TEX L.

Willie E. Aclin and his wife, Helen L. Aclin, executed a note, payable to the order of the Administrator of Veterans Affairs, incident to their purchase of property from the Veterans Administration. Subsequently, they conveyed the property to A. L. Bickle and his wife, Mollie Lee Bickle, by assumption deed. Default occurred in the payment of the monthly installments due on the note and on April 6, 1965, the property, which was the subject of the Deed of Trust, was foreclosed. As a result, the Veterans Administration incurred a loss in the principal amount of $689.37. Interest accrues at the rate of 4% per annum.

Upon failure to effect collection, the Veterans Administration Regional Office, Waco, Texas, reported the indebtedness to us for collection, holding the four to be jointly and severally liable.

Correspondence with the Post Office Department, where Mr. Aclin is a career substitute city carrier, brought an offer from him to compromise the debt.

Prior to the enactment of the Federal Claims Collection Act of 1966, Public 89-508, effective January 15, 1967, the Administrator of Veterans Affairs, in accordance with 38 U.S.C. 1820(a)(4) had complete jurisdiction over the acceptance of offers in compromise in an indebtedness of this nature. We were precluded from reviewing the determination made by that administration in view of 38 U.S.C. 1820(c).

Therefore, when we received the offer from Mr. Aclin to compromise his indebtedness of $689.37, plus interest, for $236.00, we referred it to the Veterans Administration Regional Office on September 6, 1966. The Committee on Waivers and Compromise of that office rejected the offer for the reason it would not be to the interest of the Government since Mr. Aclin could pay the entire indebtedness through reasonable installments.

We informed Mr. Aclin of the rejection of his offer and made further demand on him. On January 18, 1967, he again offered $236.00 in full settlement, stating that if the offer is not accepted, perhaps monthly payments could be arranged.

Section 3(b) of the Federal Claims Collection Act of 1966, supra, grants the General Accounting Office authority to compromise claims referred by another agency for further collection action and we believe that acceptance of the compromise offer under this authority would be in the best inerest of the United States. However, Section (4) of said act provides that nothing therein shall increase or diminish the existing authority of the head of an agency to litigate claims, or diminish his existing authority to settle, compromise, or close claims.

In view thereof, question arises as to whether consideration by this Office of a compromise offer in the identical amount previously rejected by the Veterans Administration Committee on Compromises would have the effect of diminishing the existing authority of the Administrator of Veterans Affairs under 38 U.S.C. 1820, supra.

The matter is submitted for your consideration and instructions.

The Honorable John G. Tower and the Honorable Ralph Yarborough, United States Senate, are interested in this claim.

A. J. SCHOFER Acting Chief, Debt Branch Claims Division

Enclosure