B-159633, AUGUST 11, 1966, 46 COMP. GEN. 135

B-159633, AUGUST 11, 1966, 46 COMP. GEN. 135

MEETINGS - RENTAL OF CONFERENCE ROOMS - PROHIBITION. THE RENTAL OF CONFERENCE ROOMS AT SEVERAL HOTELS IN THE DISTRICT OF COLUMBIA FOR AGENCY PERSONNEL USE WITHOUT A SPECIFIC APPROPRIATION OF FUNDS VIOLATES THE PROHIBITION IN 40 U.S.C. 34, AND THE CERTIFYING OFFICERS RESPONSIBLE FOR THE RENTAL PAYMENTS MAY NOT BE RELIEVED OF LIABILITY UNDER 31 U.S.C. 82C ON THE BASIS THE PAYMENTS WERE CERTIFIED AS PROPER IN GOOD FAITH IN RELIANCE UPON THE ACTIONS OF THOSE WHOM THEY HAD REASON TO BELIEVE WERE INFORMED AS TO THE APPLICABLE LEGAL REQUIREMENTS, THE RECORD EVIDENCING THE CERTIFYING OFFICERS EITHER KNEW THE PERTINENT FACTS OR THAT REASONABLE DILIGENCE AND INQUIRY WOULD HAVE UNCOVERED THE FACTS. CERTIFYING OFFICERS - RELIEF - ERRONEOUS PAYMENTS - STATUTORY PROHIBITION. ALTHOUGH UNDER 31 U.S.C. 82C A CERTIFYING OFFICER MAY BE RELIEVED FROM LIABILITY WHEN THE FACTS INCIDENT TO AN IMPROPER PAYMENT ARE FULLY APPRECIATED BUT THE TRANSACTION INVOLVED WAS CONSUMMATED IN GOOD FAITH, CERTIFYING OFFICERS APPROVING THE RENTAL OF HOTEL ROOMS IN THE DISTRICT OF COLUMBIA FOR THE USE OF AGENCY PERSONNEL WITHOUT A SPECIFIC APPROPRIATION OF FUNDS, PROHIBITED BY 40 U.S.C. 34, MAY NOT BE RELIEVED OF LIABILITY, SECTION 81C MAKING RELIEF AVAILABLE ONLY WHEN A PAYMENT IS NOT CONTRARY TO A PROHIBITORY STATUTE, AND COLLECTION ACTIONS AGAINST THE HOTELS RECEIVING THE IMPROPER PAYMENTS ARE REQUIRED, 40 U.S.C. 34 CONSTITUTING NOTICE TO ALL CONTRACTORS OR LESSORS OF THE PROHIBITION. GENERAL ACCOUNTING OFFICE - DECISIONS - ADVANCE - DISBURSING AND CERTIFYING OFFICERS - PAYMENTS PROHIBITED BY STATUTE. SECTION 3 OF THE ACT OF DECEMBER 29, 1941 (31 U.S.C. 82D) GRANTS CERTIFYING OFFICERS THE RIGHT TO APPLY FOR AND OBTAIN A DECISION BY THE COMPTROLLER GENERAL ON ANY QUESTION OF LAW INVOLVED IN A PAYMENT PRESENTED FOR CERTIFICATION, AND IT IS NOT AN UNDUE BURDEN ON THE CERTIFYING OFFICER TO EXERCISE THE RIGHT WHEN VOUCHERS PRESENTED FOR CERTIFICATION COVER PAYMENTS THAT ARE IN CONTRAVENTION OF SPECIFIC STAUTORY PROHIBITIONS THAT ARE NOT CLEARLY RENDERED INOPERATIVE.

TO THE ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION, AUGUST 11, 1966:

BY LETTER OF JULY 5, 1966, REFERRING TO THE EXCEPTIONS TAKEN BY THIS OFFICE TO PAYMENTS MADE BY THE SMALL BUSINESS ADMINISTRATION TO SEVERAL HOTELS FOR CONFERENCE MEETING ROOMS UTILIZED BY SBA PERSONNEL, YOU REQUEST THAT THE ACCOUNTABLE CERTIFYING OFFICERS INVOLVED BE RELIEVED OF RESPONSIBILITY FOR THE ERRONEOUS PAYMENTS MADE.

ESSENTIALLY, THE EXCEPTIONS---NOS. 60005,2, AND 3 ALL DATED APRIL 12, 1966, IN THE AMOUNTS OF $557.92, $131.04 AND $30, RESPECTIVELY-- WERE TAKEN ON THE BASIS THAT, IN THE ABSENCE OF SPECIFIC AUTHORITY, PAYMENTS FOR THE HIRE BY GOVERNMENT AGENCIES OF ROOMS IN HOTELS TO SERVE AS CONFERENCE MEETING ROOMS VIOLATES THE PROHIBITION CONTAINED IN THE ACT OF MARCH 3, 1877, 19 STAT. 370, 40 U.S.C. 34, WHICH PROVIDES THAT:

NO CONTRACT SHALL BE MADE FOR THE RENT OF ANY BUILDING, OR PART OF ANY BUILDING, TO BE USED FOR THE PURPOSES OF THE GOVERNMENT IN THE DISTRICT OF COLUMBIA, UNTIL AN APPROPRIATION THEREFOR SHALL HAVE BEEN MADE IN TERMS BY CONGRESS, AND THIS CLAUSE SHALL BE REGARDED AS NOTICE TO ALL CONTRACTORS OR LESSORS OF ANY SUCH BUILDING OR ANY PART OF BUILDING.

YOU POINT OUT THAT IT WAS THE BELIEF OF OFFICIALS IN YOUR AGENCY THAT THE PROVISIONS OF SECTION 19/B) OF THE GOVERNMENT EMPLOYEES TRAINING ACT, PUBLIC LAW 8-507, APPROVED JULY 7, 1958, 5 U.S.C. 2318 (B), MAKING AGENCY TRAVEL APPROPRIATIONS AVAILABLE FOR ATTENDANCE AT CERTAIN MEETINGS, CONSTITUTED SUFFICIENT AUTHORITY TO OVERCOME THE SPECIFIC PROHIBITION OF THE 1877 ACT.

THE LEGISLATIVE HISTORY OF THE TRAINING ACT PROVISION SHOWS IT WAS INTENDED TO DISPENSE WITH THE SPECIFIC APPROPRIATION AUTHORIZATIONS REQUIRED BY 5 U.S.C. 83 FOR THE PAYMENT OF EXPENSES OF FEDERAL OFFICERS AND EMPLOYEES IN ATTENDING MEETINGS "OF MEMBERS OF ANY SOCIETY OR ASSOCIATION;, THE PROVISION HAS LITTLE OR NO BEARING UPON A PURELY INTERNAL CONFERENCE OR MEETING SPONSORED BY THE GOVERNMENT AND CANNOT BE VIEWED AS SPECIFICALLY OR EVEN IMPLIEDLY RELAXING THE PROHIBITION AGAINST THE RENTING BUILDING SPACE IN THE DISTRICT OF COLUMBIA FOR GOVERNMENTAL PURPOSES.

UPON THE BASIS OF THE FOLLOWING FINDINGS OF FACT, YOU REQUEST THAT THE CERTIFYING OFFICERS BE RELIEVED OF RESPONSIBILITY AND THAT THEIR ACCOUNTS BE ADJUSTED ACCORDINGLY:

1. THE RENTAL OF CONFERENCE ROOMS IN THE WASHINGTON HOTELS WAS FOR MEETINGS OF THE AD HOC ADVISORY COMMITTEE ON THE SBIC PROGRAM, A MEETING OF THE SBA NATIONAL ADVISORY COUNCIL, A MEETING OF TOP WASHINGTON STAFF WITH BRANCH MANAGERS, TRAINING SEMINARS FOR SELECTED SMALL BUSINESS PERSONNEL, AND A CONFERENCE WITH MEMBERS OF THE AMERICAN BANKERS ASSOCIATION. ALL OF THESE ACTIVITIES WERE UNDER PROGRAMS AUTHORIZED BY THE SMALL BUSINESS ACT AND THE SMALL BUSINESS INVESTMENT ACT TO CARRY OUT THE FUNCTIONS OF THIS ADMINISTRATION.

2. USE OF HOTEL FACILITIES AS OPPOSED TO THE SUITABILITY OF THE FREE SPACE AVAILABLE AT THE TIME THE NEED AROSE WAS CONSIDERED. IT WAS ADMINISTRATIVELY DETERMINED THAT DUE TO TRANSPORTATION COSTS, LOSS OF TIME AND OTHER INCONVENIENCES, IT WOULD BE ADVANTAGEOUS TO THE GOVERNMENT TO USE HOTEL FACILITIES FOR THE PURPOSES REQUIRED.

3. ALL CHARGES IN EACH INSTANCE WERE MADE UNDER ONE INVOICE AND DID NOT DISTINGUISH ROOM RENTALS FROM OTHER CHARGES TO WHICH QUESTIONS WERE RAISED. THE CERTIFYING OFFICER ACCEPTED THE EXPENSES AS APPROVED AND CERTIFIED SAME IN GOOD FAITH TO YOUR OFFICE FOR PAYMENT FROM APPROPRIATED FUNDS.

4. SBA UTILIZED THE FACILITIES ON THE DATES STATED AND RECEIVED FULL VALUE FOR THE EXPENSES INCURRED.

5. THE PAYMENTS IN QUESTION WERE CERTIFID IN GOOD FAITH BASD UPON THE MISPLACED RELIANCE ON AN INAPPLICABLE LAW. ALL PERSONNEL AFFECTED HAVE BEEN INFORMED OF THE ERROR AND ADEQUATE ADMINISTRATIVE PROCEDURES HAVE BEEN ESTABLISHED TO PREVENT REPETITION OF SUCH ACTION IN THE FUTURE.

6. COLLECTION OF THE ERRONEOUS PAYMENTS HAS BEEN AND WILL CONTINUE TO BE DILIGENTLY PURSUED FROM BOTH THE PAYEES AND THE RECIPIENTS OF THE SERVICES. AN AMOUNT IN EXCESS OF $515.00 HAS BEEN COLLECTED AND DEPOSITED AGAINST ALL OTHER QUESTIONABLE CHARGES SO THAT ONLY THE AMOUNT OF THE ROOM RENTALS REMAINS AS QUESTIONABLE ITEMS.

YOU URGE THAT THE FACTS SHOW THAT THE CERTIFYING OFFICERS IN GOOD FAITH RELIED UPON THE ACTIONS OF THOSE WHOM THEY HAD REASON TO BELIEVE WERE INFORMED AS TO APPLICABLE LEGAL REQUIREMENTS, POINTING OUT ONE INSTANCE WHERE THE INVOICES WERE SIGNED BY THE FORMER ADMINISTRATOR AND APPROVED FOR PAYMENT BY THE ACTING CHIEF OF THE GENERAL SERVICES DIVISION AND ANOTHER INSTANCE WHERE THE CHIEF OF THAT DIVISION APPROVED THE PURCHASE.

THE AUTHORITY OF THIS OFFICE TO GRANT THE RELIEF REQUESTED STEMS FROM SECTION 2 OF THE ACT OF DECEMBER 29, 1941, 55 STAT. 875, 31 U.S.C. 82C, WHICH PROVIDES IN PERTINENT PART THAT:

THE OFFICER OR EMPLOYEE CERTIFYING A VOUCHER SHALL (1) BE HELD RESPONSIBLE FOR THE EXISTENCE AND CORRECTNESS OF THE FACTS RECITED IN THE CERTIFICATE OR OTHERWISE STATED ON THE VOUCHER OR ITS SUPPORTING PAPERS AND FOR THE LEGALITY OF THE PROPOSED PAYMENT UNDER THE APPROPRIATION OR FUND INVOLVED; * * * AND (3) BE HELD ACCOUNTABLE FOR AND REQUIRED TO MAKE GOOD TO THE UNITED STATES THE AMOUNT OF ANY ILLEGAL IMPROPER, OR INCORRECT PAYMENT RESULTING FROM ANY FALSE, INACCURATE, OR MISLEADING CERTIFICATE MADE BY HIM, AS WELL AS FOR ANY PAYMENT PROHIBITED BY LAW OR WHICH DID NOT REPRESENT A LEGAL OBLIGATION UNDER THE APPROPRIATION OR FUND INVOLVED: PROVIDED, THAT THE COMPTROLLER GENERAL MAY, IN HIS DISCRETION, RELIEVE SUCH CERTIFYING OFFICER OR EMPLOYEE OF LIABILITY FOR ANY PAYMENT OTHERWISE PROPER WHENEVER HE FINDS (1) THAT THE CERTIFICATION WAS BASED ON OFFICIAL RECORDS AND THAT SUCH CERTIFYING OFFICER OR EMPLOYEE DID NOT KNOW, AND BY REASONABLE DILIGENCE AND INQUIRY COULD NOT HAVE ASCERTAINED, THE ACTUAL FACTS, OR (2) THAT THE OBLIGATION WAS INCURRED IN GOOD FAITH, THAT THE PAYMENT WAS NOT CONTRARY TO ANY STATUTORY PROVISION SPECIFICALLY PROHIBITING PAYMENTS OF THE CHARACTER INVOLVED AND THAT THE UNITED STATES HAS RECEIVED VALUE FOR SUCH PAYMENT * * *.

THE THIRD FINDING OF FACT QUOTED ABOVE INDICATES THAT THE IMPROPER CERTIFICATIONS OCCURRED WITH RESPECT TO VOUCHERS COVERING ITEMS THE SPECIFIC NATURE OF WHICH WERE NOT KNOWN BY THE CERTIFYING OFFICERS. BUT WHILE THE SPECIFIC NATURE OF THE ITEMS MAY HAVE BEEN UNKNOWN, WE CANNOT CONCLUDE THAT REASONABLE DILIGENCE AND INQUIRY WOULD HAVE FAILED TO UNCOVER THE ACTUAL FACTS. IT WAS CLEAR FROM THE VARIOUS INVOICES AND SUPPORTING PAPERS INVOLVED THAT SOME PORTION OF THE AMOUNTS CERTIFIED FOR PAYMENT WERE MOST LIKELY FOR ROOM RENTAL COSTS. INDEED ONE INVOICE DESCRIBED THE SERVICES COVERED AS "RENTAL OF CONF. ROOM" AND ANOTHER AS RM. W901/03. THE FULL RECORD BEFORE US LEADSMORE TO THE CONCLUSION THAT THE CERTIFYING OFFICERS WERE AWARE OF THE TRUE FACTS RATHER THAN THAT THEY WERE MISLED BY THE OFFICIAL RECORDS UPON WHICH THEY RELIED. AND WITH THEIR KNOWING THE ACTUAL FACTS, IT WOULD FURTHER APPEAR THAT THE CERTIFICATIONS WERE MADE UPON THE BASIS THAT PAYMENT OF THE ITEMS COVERED WAS PROPER. IN ANY EVENT, THE FIRST ALTERNATE BASIS UPON WHICH RELIEF MAY BE GRANTED BY THIS OFFICE IS UNAVAILABLE, SINCE WE WOULD CONCLUDE THAT THE CERTIFYING OFFICERS EITHER KNEW THE PERTINENT ACTUAL FACTS UNDERLYING THE AMOUNTS CERTIFIED FOR PAYMENT OR THAT REASONABLE DILIGENCE AND INQUIRY UNDER THE CIRCUMSTANCES WOULD HAVE UNCOVERED THE ACTUAL FACTS.

THIS BRINGS US TO THE SECOND ALTERNATE BASIS UPON WHICH RELIEF MAY BE GRANTED. WHILE THE FIRST ALTERNATE TREATS SITUATIONS INVOLVING THE DEGREE OF CARE REQUIRED OF CERTIFYING OFFICERS IN ESTABLISHING THE FACTUAL BASIS FOR AMOUNTS TO BE CERTIFIED FOR PAYMENT, THE SECOND ALTERNATE DEALS WITH SITUATIONS WHERE THOUGH THE FACTS UNDER WHICH CERTIFICATION IS IMPROPER ARE FULLY APPRECIATED, THE ENTIRE TRANSACTION INVOLVED WAS CONSUMMATED IN GOOD FAITH. HOWEVER, RESORT TO THIS SECOND ALTERNATE BASIS FOR GRANTING RELIEF IS AVAILABLE BY ITS TERMS ONLY WHERE THERE IS NO ,STATUTORY PROVISION SPECIFICALLY PROHIBITING PAYMENTS OF THE CHARACTER INVOLVED;, SINCE THE EXCEPTIONS FOR WHICH RELIEF IS REQUESTED WERE STATED ON THE VERY BASIS OF A STATUTE SPECIFICALLY PROHIBITING PAYMENTS OF THE CHARACTER INVOLVED, RELIEF THEREFROM MAY NOT BE GRANTED UNDER THE SECOND ALTERNATE BASIS.

ACCORDINGLY, THE CERTIFYING OFFICERS ON WHOSE BEHALF YOU HAVE INTERCEDED MAY NOT BE RELIEVED. COLLECTION ACTION SHOULD BE CONTINUED AGAINST THE HOTELS TO WHICH THE IMPROPER PAYMENTS WERE MADE PARTICULARLY IN LIGHT OF THE TERMS OF THE PROHIBITORY STATUTE STIPULATING THAT IT SHALL CONSTITUTE "NOTICE TO ALL CONTRACTORS OR LESSORS OF ANY * * * BUILDING OR ANY PART OF BUILDING;,

WITH RESPECT TO YOUR CONCERN OVER THE UNDUE BURDENS WHICH WOULD RESULT FROM THE NEED FOR CERTIFYING OFFICERS TO SEEK FORMAL LEGAL ADVICE BEFORE PAYING VOUCHERS IF THE CERTIFYING OFFICERS INVOLVED WHOSE CERTIFICATIONS WERE MADE IN GOOD FAITH ARE NOT GRANTED RELIEF, WE WOULD CALL YOUR ATTENTION TO THE PROVISIONS OF SECTION 3 OF THE ACT OF DECEMBER 29, 1941, 55 STAT. 876, 31 U.S.C. 82D, GRANTING CERTIFYING OFFICERS THE RIGHT TO APPLY FOR AND OBTAIN A DECISION BY THE COMPTROLLER GENERAL ON ANY QUESTION OF LAW INVOLVED IN A PAYMENT ON ANY VOUCHERS PRESENTED TO THEM FOR CERTIFICATION. IT WOULD NOT APPEAR REASONABLE TO CONSIDER IT AN UNDUE BURDEN UNDER ANY CIRCUMSTANCES INVOLVING EXERCISE OF THE RIGHT THUS GRANTED IN CASES WHERE THERE ARE PRESENTED FOR CERTIFICATION VOUCHERS COVERING PAYMENTS IN CONTRAVENTION OF SPECIFIC STATUTORY PROHIBITIONS THAT ARE NOT CLEARLY RENDERED INOPERATIVE.