B-8201, B-59149, DECEMBER 6, 1955, 35 COMP. GEN. 333

B-8201, B-59149, DECEMBER 6, 1955, 35 COMP. GEN. 333

BONDS - PROCEDURE UNDER THE BONDING ACT OF AUGUST 9, 1955, 6 U.S.C. 14 CERTIFICATIONS BY DEPARTMENT AND AGENCY HEADS THAT BONDS HAVE BEEN PROCURED FOR EMPLOYEES PURSUANT TO THE BONDING ACT OF AUGUST 9, 1955, 6 U.S.C. 14, NEED NOT BE QUESTIONED BY DISBURSING OFFICERS. ACCOUNTABLE OFFICERS ARE NOT REQUIRED TO CLOSE DISBURSING ACCOUNTS AT THE TIME OF THE CONVERSION OF BONDS TO THE NEW BONDING SYSTEM AUTHORIZED BY THE ACT OF AUGUST 9, 1955, 6 U.S.C. 14. WHEN AN ACCOUNTABLE OFFICER IS REPLACED DURING THE TERM OF HIS BOND ALL CASH ON HAND SHOULD BE TRANSFERRED TO HIS SUCCESSOR AND A RECEIPT THEREFOR SHOULD BE SUBMITTED WITH THE CLOSING ACCOUNT; HOWEVER, CASH IN THE CUSTODY OF AGENTS OF THE DISBURSING OFFICER SHOULD NOT BE TRANSFERRED, BUT THE SUCCEEDING DISBURSING OFFICER SHOULD OBTAIN FROM SUCH AGENTS REPORTS SHOWING THE AMOUNT OF FUNDS FOR WHICH THEY ARE ACCOUNTABLE ON THE DATE OF REPLACEMENT, AND THOSE REPORTS SHOULD BE INCLUDED IN THE SUCCEEDING OFFICER'S OPENING ACCOUNT. THE TERM "FAITHFUL PERFORMANCE" IS DEFINED IN THE BONDING ACT OF AUGUST 9, 1955, 6 U.S.C. 14, AS INCLUDING "THE PROPER ACCOUNTING FOR ALL FUNDS OR PROPERTY RECEIVED BY REASON OF THE POSITION OR EMPLOYMENT OF THE INDIVIDUAL OR INDIVIDUALS SO BONDED AND ALL DUTIES AND RESPONSIBILITIES IMPOSED UPON SUCH INDIVIDUAL OR INDIVIDUALS BY LAW OR REGULATION ISSUED PURSUANT TO LAW" SO THAT ANY PROPERTY OR FUNDS FOR WHICH AN OFFICER IS ACCOUNTABLE AND WHICH IS ON HAND OR UNDER HIS CUSTODY AT THE BEGINNING OF A PERIOD COVERED BY A NEW BOND WOULD BE COVERED BY THE NEW BOND. BONDS WHICH ARE ADMINISTRATIVELY REQUIRED BY EXECUTIVE AGENCIES TO COVER ADVANCES UNDER THE TRAVEL EXPENSE ACT OF 1949 SHOULD, AFTER JANUARY 1, 1956--- THE EFFECTIVE DATE OF THE BONDING ACT OF AUGUST 9, 1955, 6 U.S.C. 14--- BE PURCHASED BY THE GOVERNMENT PURSUANT TO THAT ACT, AND ANY LEGISLATIVE AND JUDICIAL AGENCIES MAY ALSO PROCURE SUCH BONDS UNDER 6 U.S.C. 14.

TO THE SECRETARY OF THE TREASURY, DECEMBER 6, 1955:

REFERENCE IS MADE TO LETTER OF OCTOBER 18, 1955, FROM THE FISCAL ASSISTANT SECRETARY OF THE TREASURY, REQUESTING DECISION ON SEVERAL QUESTIONS ARISING IN CONNECTION WITH BONDS WHICH WILL BE PROVIDED FOR CERTAIN OFFICERS AND EMPLOYEES PURSUANT TO THE PROVISIONS OF THE ACT OF AUGUST 9, 1955, 69 STAT. 618, 6 U.S.C. 14.

IT IS EXPLAINED THAT IT PRESENTLY IS CONTEMPLATED THAT BLANKET OR OTHER FORMS OF BONDS PROVIDING GROUP COVERAGE UNDER THE ACT WILL INCLUDE CERTIFYING OFFICERS WHO CERTIFY VOUCHERS TO THE DIVISION OF DISBURSEMENT FOR PAYMENT, AND DISBURSING OFFICERS, ASSISTANT DISBURSING OFFICERS, AGENT OFFICERS, AGENT CASHIERS AND IMPREST FUND CASHIERS OPERATING UNDER DELEGATION BY THE DIVISION OF DISBURSEMENT TREASURY DEPARTMENT. SINCE UNDER PRESENT PROCEDURES INDIVIDUAL BONDS FOR SUCH OFFICERS HAVE BEEN SUBMITTED TO THE TREASURY DEPARTMENT FOR FILING, THE CHIEF DISBURSING OFFICER HAS HAD PRECISE INFORMATION REGARDING THE AMOUNTS AND EFFECTIVE DATES OF BONDS OF SUCH OFFICERS. HOWEVER, IN THE FUTURE THIS INFORMATION WILL NOT BE AVAILABLE TO THE CHIEF DISBURSING OFFICER WHERE BOND COVERAGE FOR THESE OFFICERS IS INCLUDED IN A BLANKET OR OTHER FORM OF BOND PROVIDING GROUP COVERAGE.

IN VIEW THEREOF, THE FISCAL SECRETARY RAISES THE FOLLOWING QUESTIONS:

1. IF THE HEAD OF AN ADMINISTRATIVE AGENCY, OR HIS DULY AUTHORIZED DESIGNEE, CERTIFIES TO THE DIVISION OF DISBURSEMENT THAT A PARTICULAR CERTIFYING OFFICER IS BONDED AND A DISBURSING OFFICER OF THE DIVISION OF DISBURSEMENT, RELYING ON SUCH CERTIFICATION, MAKES PAYMENT ON A VOUCHER CERTIFIED BY SUCH OFFICER AND IT LATER DEVELOPS THAT THE OFFICER WAS NOT IN FACT A BONDED CERTIFYING OFFICER ON THE DATE THE VOUCHER WAS CERTIFIED, WILL THE DISBURSING OFFICER BE HELD RESPONSIBLE BY THE GENERAL ACCOUNTING OFFICE.

2. IF THE HEAD OF AN ADMINISTRATIVE AGENCY, OR HIS DULY AUTHORIZED DESIGNEE, CERTIFIES TO THE DIVISION OF DISBURSEMENT THAT AN OFFICER TO WHOM IT IS PROPOSED TO DELEGATE A DISBURSING FUNCTION IS COVERED IN A SPECIFIED AMOUNT BY A BOND AND THE DIVISION OF DISBURSEMENT RELYING ON SUCH CERTIFICATION, DELEGATES A DISBURSING FUNCTION TO SUCH OFFICER, WILL THE TREASURY DISBURSING OFFICER CONCERNED BE HELD LIABLE BY THE GENERAL ACCOUNTING OFFICE IN THE EVENT OF A PHYSICAL LOSS OF FUNDS OR AN ERRONEOUS, ILLEGAL OR IMPROPER PAYMENT BY THE OFFICER OPERATING UNDER DELEGATION, SOLELY BECAUSE IT DEVELOPS THAT THE AGENCY CERTIFICATION WAS INCORRECT?

SECTION 14 OF TITLE 6 OF THE U.S.C. AS AMENDED BY THE ACT OF AUGUST 9, 1955, EFFECTIVE JANUARY 1, 1956, READS IN PART AS FOLLOWS:

(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION, THE HEAD OF EACH DEPARTMENT AND INDEPENDENT ESTABLISHMENT IN THE EXECUTIVE BRANCH OF THE FEDERAL GOVERNMENT SHALL OBTAIN, UNDER REGULATIONS WHICH SHALL BE PROMULGATED BY THE SECRETARY OF THE TREASURY, BLANKET, POSITION SCHEDULE, OR OTHER TYPES OF SURETY BONDS COVERING THE CIVILIAN OFFICERS AND EMPLOYEES AND MILITARY PERSONNEL OF SUCH DEPARTMENT OR INDEPENDENT ESTABLISHMENT WHO ARE REQUIRED BY LAW OR ADMINISTRATIVE RULING TO BE BONDED. THE APPROPRIATE OFFICIALS OF THE LEGISLATIVE AND JUDICIAL BRANCHES OF THE FEDERAL GOVERNMENT MAY OBTAIN ANY OR ALL OF SUCH TYPES OF SURETY BONDS COVERING SUCH OFFICERS AND EMPLOYEES UNDER THEIR RESPECTIVE JURISDICTIONS AS SUCH OFFICIALS MAY DEEM APPROPRIATE TO BE BONDED. * * *

SINCE IT THUS WILL BE THE RESPONSIBILITY OF THE HEADS OF THE DEPARTMENTS AND AGENCIES CONCERNED TO OBTAIN SUCH SURETY BONDS AS MAY BE NEEDED FOR THEIR RESPECTIVE EMPLOYEES, THERE APPEARS NO REASON WHY THE DISBURSING OFFICERS MENTIONED IN THE TWO QUESTIONS ABOVE NEED QUESTION A CERTIFICATION BY THE HEAD OF THE DEPARTMENT OR AGENCY CONCERNED TO THE EFFECT THAT SUCH BONDS HAVE BEEN PROCURED. ACCORDINGLY, QUESTIONS 1 AND 2 ARE ANSWERED IN THE NEGATIVE.

THE FISCAL ASSISTANT SECRETARY ALSO REQUESTS OUR DECISION ON THE FOLLOWING ADDITIONAL QUESTIONS:

3. WILL IT BE REQUIRED THAT ACCOUNTABLE OFFICERS HOLDING PUBLIC FUNDS IN LOCAL DEPOSITARIES, IN THE HANDS OF AGENTS, OR IN PETTY CASH FUNDS UNDER EXISTING BONDS CLOSE THEIR DISBURSING ACCOUNTS AND TRANSFER OR DEPOSIT THEIR FUNDS UNDER PROCEDURES PRESCRIBED BY BONDS PURCHASED UNDER AUTHORITY OF THE ACT OF AUGUST 9, 1955?

4. THEREAFTER, WILL IT BE REQUIRED THAT SUCH ACCOUNTABLE OFFICERS CLOSE THEIR DISBURSING ACCOUNTS AND TRANSFER OR DEPOSIT THEIR FUNDS UPON THE EXPIRATION OF PREMIUM PERIODS AND THE PURCHASE OF NEW BONDS UNDER THE ACT?

5. LIKEWISE WILL IT BE REQUIRED THAT AN INCUMBENT ACCOUNTABLE OFFICER HOLDING PUBLIC FUNDS IN LOCAL DEPOSITARIES, IN THE HANDS OF AGENTS, OR IN A PETTY CASH FUND CLOSE HIS DISBURSING ACCOUNTS AND TRANSFER OR DEPOSIT SUCH FUNDS UPON BEING REPLACED DURING THE TERM OF A BOND?

6. IF YOUR ANSWERS TO QUESTIONS 3 AND 4 ARE IN THE NEGATIVE, PLEASE ADVISE WHETHER THE TERM ,FAITHFUL PERFORMANCE OF THE DUTIES" AS USED IN THE ACT MAY BE DEEMED TO EXTEND TO FUNDS OR PROPERTY RECEIVED BY AN ACCOUNTABLE OFFICER DURING THE PERIOD OF A PRIOR BOND AND ON HAND IN THE OFFICER'S CUSTODY OR UNDER THIS CONTROL AT THE BEGINNING OF THE PERIOD COVERED BY A NEW BOND.

IN 6 COMP. GEN. 290 THERE WERE SET FORTH CERTAIN PROCEDURES RELATING TO THE CLOSING OF DISBURSING OFFICERS' ACCOUNTS ON A CHANGE OF BOND OR UPON RELINQUISHING OF OFFICE WHEREBY SUCH OFFICERS WERE REQUIRED TO DEPOSIT THE UNEXPENDED FUNDS IN THE TREASURY OF THE UNITED STATES, OR TRANSFER THEM TO THEIR SUCCESSOR TAKING A RECEIPT THEREFOR, OR UPON CHANGE OF BOND TO TRANSFER THE FUNDS TO AN ACCOUNT UNDER THE NEW BOND UPON A CERTIFICATE BY TWO DISINTERESTED PERSONS WHO HAD VERIFIED THE CASH ON HAND AND ON DEPOSIT, THE PARTICULAR METHOD TO BE FOLLOWED BEING DEPENDENT UPON THE CIRCUMSTANCES AND THE LOCATION OF THE DISBURSING OFFICER. IN THE MEANTIME, HOWEVER, THERE HAVE BEEN ISSUED GENERAL REGULATIONS NO. 80 DATED AUGUST 15, 1934, 14 COMP. GEN. 940, 122 DATED MAY 5, 1955, 34 COMP. GEN. 769, AND ACCOUNTING SYSTEMS MEMORANDUM NO. 18-REVISED, AUGUST 25, 1955, 35 COMP. GEN.--- , WHICH PROVIDE FOR EACH DISBURSING OFFICER TO RENDER A PERIODIC ACCOUNT SHOWING HIS OFFICIAL ACCOUNTABILITY TO THE UNITED STATES. PROVISION IS ALSO MADE FOR SUCH OFFICERS TO RENDER A STATEMENT OF THEIR ACCOUNTABILITY WHEN THEY CEASE DISBURSING TO REFLECT ALL OF THEIR ACCOUNTING TRANSACTIONS THROUGH THE LAST DAY OF THEIR OFFICIAL DUTY.

IN VIEW THEREOF AND SINCE ALL ACCOUNTING TRANSACTIONS ARE DATED AND THE LIABILITY OF THE SURETIES FOR ACCOUNTABLE OFFICERS HAVING CHECKING ACCOUNTS CAN READILY BE ESTABLISHED BY THE DATES OF THE CHECKS DRAWN AGAINST SUCH ACCOUNTS AND SINCE IT OBVIOUSLY WOULD BE IMPRACTICAL AND COSTLY TO REQUIRE THE CLOSING OF THE ACCOUNTS WHERE A CHANGE OF BOND FOR NUMEROUS ACCOUNTABLE OFFICERS IS CONTEMPLATED ON A SINGLE GIVEN DATE, YOU ARE ADVISED THAT QUESTIONS (3) AND (4) ARE ANSWERED IN THE NEGATIVE.

QUESTION NO. (5) CONCERNS THE REPLACEMENT OF AN ACCOUNTABLE OFFICER DURING THE TERM OF HIS BOND AND THE FOLLOWING PROCEDURES SHOULD BE OBSERVED IN CONNECTION THEREWITH:

(1) WHERE THERE IS A REPLACEMENT IN OFFICE DURING THE TERM OF HIS

BOND, ALL CASH ON HAND SHOULD BE TRANSFERRED TO THE SUCCEEDING

DISBURSING OFFICER AND A RECEIPT THEREFOR OBTAINED WHICH SHOULD

BE SUBMITTED WITH THE CLOSING ACCOUNT.

(2) CASH IN THE CUSTODY OF AGENTS OF THE DISBURSING OFFICER SHOULD

NOT BE TRANSFERRED UPON HIS REPLACEMENT IN OFFICE. THE

SUCCEEDING DISBURSING OFFICER SHOULD OBTAIN FROM SUCH AGENTS

REPORTS SHOWING THE AMOUNT OF FUNDS FOR WHICH THEY ARE

ACCOUNTABLE ON THE DATE OF REPLACEMENT. SUCH REPORTS SHOULD

BE INCLUDED IN THE SUCCEEDING OFFICER'S OPENING ACCOUNT.

CONCERNING QUESTION NO. (6) THE TERM "FAITHFUL PERFORMANCE OF THE DUTIES" AS USED IN THE ACT OF AUGUST 9, 1955, IS DEFINED THEREIN AS INCLUDING "THE PROPER ACCOUNTING FOR ALL FUNDS OR PROPERTY RECEIVED BY REASON OF THE POSITION OR EMPLOYMENT OF THE INDIVIDUAL OR INDIVIDUALS SO BONDED AND ALL DUTIES AND RESPONSIBILITIES IMPOSED UPON SUCH INDIVIDUAL OR INDIVIDUALS BY LAW OR BY REGULATION ISSUED PURSUANT TO LAW.' IN VIEW THEREOF IT APPEARS THAT ANY PROPERTY OR FUNDS FOR WHICH AN OFFICER IS ACCOUNTABLE AND WHICH IS ON HAND OR UNDER HIS CUSTODY AT THE BEGINNING OF A PERIOD COVERED BY A NEW BOND PROPERLY WOULD BE COVERED BY THE NEW BOND. ACCORDINGLY QUESTION NO. (6) IS ANSWERED IN THE AFFIRMATIVE.

THE FISCAL SECRETARY ALSO ASKS THE FOLLOWING QUESTION:

7. WHENEVER IT IS DEEMED ADVISABLE TO FULLY PROTECT THE INTERESTS OF THE UNITED STATES BY REQUIRING A BOND TO COVER AN ADVANCE UNDER THE TRAVEL EXPENSE ACT OF 1949 ( PUBLIC LAW 92, 81ST CONGRESS), MAY SUCH BOND BE PURCHASED UNDER AUTHORITY OF THE ACT OF AUGUST 9, 1955?

AN EXAMINATION OF THE LEGISLATIVE HISTORY OF THE ACT OF AUGUST 9, 1955, DISCLOSES NOTHING WHICH INDICATES THAT THE PURCHASE OF BONDS RELATING TO ADVANCES MADE PURSUANT TO THE TRAVEL EXPENSE ACT OF 1949 WAS SPECIFICALLY CONSIDERED BY THE CONGRESS. HOWEVER, IT REASONABLY APPEARS THAT, IN ENACTING THE ACT OF AUGUST 9, 1955, IT WAS THE INTENT OF THE CONGRESS TO COVER ALL CASES IN WHICH EMPLOYEES OF THE GOVERNMENT HERETOFORE HAVE BEEN REQUIRED TO FURNISH BONDS AT PERSONAL EXPENSE. THE ACT WAS INTENDED TO RELIEVE EMPLOYEES OF THE BURDEN OF EXPENSE. THE ACT WAS INTENDED TO RELIEVE EMPLOYEES OF THE BURDEN OF PAYING PREMIUMS ON BONDS REQUIRED BY LAW OR ADMINISTRATIVE RULING FOR THE GOVERNMENT'S PROTECTION AND IS REMEDIAL IN NATURE. ONE OF THE MOST FAMILIAR RULES OF STATUTORY CONSTRUCTION IS THAT REMEDIAL LEGISLATION SHOULD BE LIBERALLY CONSTRUED TO ENCOMPASS SITUATIONS CLEARLY WITHIN THE SPIRIT OR REGION OF THE LAW PROVIDED SUCH INTERPRETATION IS NOT INCONSISTENT WITH THE LANGUAGE USED. THE LANGUAGE OF THE ACT OF AUGUST 9, 1955, IS SUFFICIENTLY BROAD TO ENCOMPASS TRAVEL ADVANCE BONDS. THE TRAVEL EXPENSE ACT OF 1949, 63 STAT. 166, 5 U.S.C. 838, DOES NOT REQUIRE TRAVEL ADVANCES TO BE SECURED BY BONDS. AS A MATTER OF FACT, SECTION 5 OF THAT ACT PROVIDES THAT ANY SUMS ADVANCED AND NOT USED FOR ALLOWABLE TRAVEL EXPENSE "SHALL BE RECOVERABLE BY SET-OFF OF SALARY DUE, RETIREMENT CREDIT, OR OTHERWISE, FROM THE PERSON TO WHOM ADVANCED, OR HIS ESTATE, BY DEDUCTION FROM ANY AMOUNT DUE FROM THE UNITED STATES, OR BY SUCH OTHER LEGAL METHOD OF RECOVERY AS MAY BE NECESSARY.' BY VIRTUE OF THESE PROTECTIONS, TRAVELERS, UNDER NORMAL CIRCUMSTANCES, ARE NOT REQUIRED TO FURNISH BONDS TO SECURE ADVANCES. HOWEVER, THIS DOES NOT PRECLUDE GOVERNMENT AGENCIES FROM REQUIRING BONDS OR OTHER SECURITY IN THOSE RARE CASES WHERE NECESSARY TO FULLY PROTECT THE INTERESTS OF THE UNITED STATES. SEE PARAGRAPH 96 (A), STANDARDIZED GOVERNMENT TRAVEL REGULATIONS. IN THOSE RARE CASES, WHERE SUCH BONDS ARE ADMINISTRATIVELY REQUIRED SUBSEQUENT TO THE EFFECTIVE DATE OF THE ACT OF AUGUST 9, 1955, THAT IS, JANUARY 1, 1956, BY AN AGENCY IN THE EXECUTIVE BRANCH OF THE GOVERNMENT IT IS OUR OPINION THAT SUCH BONDS MUST BE PURCHASED BY THE AGENCY CONCERNED AND WHERE REQUIRED BY LEGISLATIVE AND JUDICIAL AGENCIES THEY MAY BE SO PROCURED. QUESTION NO. (7) IS ANSWERED ACCORDINGLY. A COPY OF THIS DECISION HAS BEEN FURNISHED THE BUREAU OF THE BUDGET FOR ITS INFORMATION AND POSSIBLE USE IN REVISION OF THE LAST SENTENCE IN SECTION 96 (A) OF THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS.