MARCH 14, 1922, 1 COMP. GEN. 510

MARCH 14, 1922, 1 COMP. GEN. 510

SURPLUS FUND - ACCOUNTING SECTION 5 OF THE ACT OF JUNE 20, 1874, 18 STAT. 110, REQUIRING ALL "UNEXPENDED BALANCES" OF APPROPRIATIONS WHICH HAVE REMAINED UPON THE BOOKS OF THE TREASURY TWO FISCAL YEARS TO BE CARRIED TO THE SURPLUS FUND, DOES NOT APPLY TO EXPENDED APPROPRIATIONS, AND WHERE, BY AN ERROR IN BOOKKEEPING, EXPENDED APPROPRIATIONS HAVE BEEN NOTED AS TRANSFERRED TO THE SURPLUS FUND, SUCH ERROR MAY BE CORRECTED BY ADJUSTING THE APPROPRIATIONS INVOLVED BY A TRANSFER SETTLEMENT.

ACTING COMPTROLLER GENERAL GINN TO SECRETARY OF WAR, MARCH 14, 1922:

I HAVE YOUR LETTER OF MARCH 8, 1922, SUPPLEMENTED BY YOUR LETTER OF MARCH 10, 1922, PRESENTING TO THIS OFFICE CERTAIN FACTS CONNECTED WITH THE SETTLEMENT OF ACCOUNTS OF CAPT. CHARLES F. EDDY, F.D., AND A TRANSFER SETTLEMENT TO ADJUST ARMY APPROPRIATIONS MADE BY THE WAR DEPARTMENT DIVISION, THIS OFFICE, ON CERTIFICATE NO. 70329, DATED FEBRUARY 18, 1922.

IT APPEARS THAT UNDER DATE OF JUNE 30, 1921, CAPT. EDDY PAID TO THE FRENCH GOVERNMENT 620,000,000 FRANCS WHICH AT THE THEN CURRENT EXCHANGE RATE OF $0.08 PER FRANC WAS EQUIVALENT TO $49,600,000. THIS PAYMENT WAS MADE UNDER INSTRUCTION FROM THE WAR DEPARTMENT AND INCLUDED AMONG OTHER ITEMS $22,218,896.91 CHARGEABLE TO "GENERAL APPROPRIATIONS, QUARTERMASTER CORPS, 1919.' PROPER RESERVATION TO MEET THIS CHARGE WAS SET UP IN YOUR DEPARTMENT, BUT YOU STATE THAT THROUGH OVERSIGHT THE RESERVATION WAS NOT NOTED IN CHECKING THE BALANCES OF 1919 APPROPRIATIONS TO BE CARRIED TO THE SURPLUS FUND AT THE CLOSE OF BUSINESS JUNE 30, 1921, AND THE BALANCE TO THE CREDIT OF "GENERAL APPROPRIATIONS, QUARTERMASTER CORPS, 1919," WAS COVERED IN WITHOUT DEDUCTION TO MEET THIS RESERVATION.

IT ALSO APPEARS THAT THROUGH ANOTHER ERROR OF YOUR DEPARTMENT DISBURSEMENTS FROM 1919 APPROPRIATIONS TOTALING $16,176,160 MADE PRIOR TO JUNE 30, 1921, WERE SCHEDULED AS $1,176,160. THIS ERROR RESULTED IN CARRYING TO THE SURPLUS FUND $15,000,000 WHICH HAD ALREADY BEEN EXPENDED UNDER "ARMY ACCOUNT OF ADVANCES" AND CHARGED BY YOUR DEPARTMENT TO THE SEVERAL APPROPRIATIONS FOR THE FISCAL YEAR 1919.

IN SETTLING ACCOUNTS THE WAR DEPARTMENT DIVISION CHARGED THE VARIOUS DISBURSEMENTS AGAINST THE SEVERAL 1919 APPROPRIATIONS TO WHICH THEY WERE PROPERLY CHARGEABLE. THIS HAS RESULTED IN A DEFICIT IN THE SUPPORTING SPECIAL APPROPRIATION TO THE EXTENT THAT THE APPROPRIATION WAS ERRONEOUSLY DEPLETED BY THE CARRYING OF AN INCORRECT BALANCE TO THE SURPLUS FUND. THE DISBURSEMENTS HAVING ACTUALLY BEEN MADE OUT OF "ARMY ACCOUNT OF ADVANCES, 1921," THE AUDITING DIVISION SETTLED A TRANSFER ACCOUNT CHARGING THE SEVERAL 1919 APPROPRIATIONS AND CREDITING "ARMY ACCOUNT OF ADVANCES, 1921," AND CERTAIN 1921 APPROPRIATIONS. THERE WAS UNDERSTOOD TO BE NO MONEY TO THE CREDIT OF THE 1919 APPROPRIATIONS AND THE TRANSFER WAS APPARENTLY SUBJECT TO REPORT TO CONGRESS OF THE CHARGES AGAINST THEM FOR DEFICIENCY APPROPRIATION--- TO RESTORE FROM THE SURPLUS FUND THE BALANCES CARRIED THERETO.

SECTION 5 OF THE ACT OF JUNE 20, 1874, 18 STAT., 110, PROVIDES THAT THE SECRETARY OF THE TREASURY SHALL CAUSE ALL "UNEXPENDED BALANCES" OF APPROPRIATIONS WHICH SHALL HAVE REMAINED UPON THE BOOKS OF THE TREASURY TWO FISCAL YEARS TO BE CARRIED TO THE SURPLUS FUND AND COVERED INTO THE TREASURY. THE SECTION RELATES TO UNEXPENDED BALANCES ONLY AND DOES NOT SUPPORT THE ATTEMPTED COVERING IN OF ANY PART OF THESE 1919 APPROPRIATIONS WHICH HAD BEEN EXPENDED PRIOR TO JUNE 30, 1921. THE COVERING OF BALANCES OF APPROPRIATIONS INTO THE TREASURY IS A BOOKKEEPING TRANSACTION WHICH DOES NOT INVOLVE THE ACTUAL PLACING OF MONEY IN THE TREASURY, OTHERWISE THE IMPOSSIBILITY OF COVERING INTO THE TREASURY MONEY WHICH HAD BEEN EXPENDED AT THE TIME WOULD HAVE BEEN APPARENT.

ONLY THE UNEXPENDED BALANCE OF THE APPROPRIATION COULD BE COVERED INTO THE TREASURY AND ANY ATTEMPT TO COVER IN ANY PART OF THE BOOK BALANCE WHICH HAD IN FACT BEEN EXPENDED WAS A BOOKKEEPING ERROR, THE CORRECTION OF WHICH DOES NOT INVOLVE THE WITHDRAWAL OF MONEY FROM THE TREASURY WITHOUT AUTHORITY OF LAW. IT APPEARS THAT REPAYS HAVE BEEN MADE AND NOW STAND TO THE CREDIT OF THE GENERAL APPROPRIATIONS, QUARTERMASTER CORPS, 1919, TO THE AMOUNT OF ABOUT $62,000,000, AND THERE CAN BE NO OBJECTION TO MAKING THE ADJUSTMENTS CALLED FOR BY THE CERTIFICATE OF SETTLEMENT.