B-138706, AUGUST 15, 1960, 40 COMP. GEN. 98

B-138706, AUGUST 15, 1960, 40 COMP. GEN. 98

DEBT COLLECTIONS - UNCOLLECTIBLE DEBTS REPORTED TO GENERAL ACCOUNTING OFFICE - MISCELLANEOUS RECEIPTS V. SPECIAL ACCOUNTS THE PROCEDURE FOR THE DEPOSIT TO MISCELLANEOUS RECEIPTS OF COLLECTIONS WHICH ARE MADE BY THE GENERAL ACCOUNTING OFFICE ON ACCOUNT OF UNCOLLECTIBLE DEBTS REPORTED BY OTHER GOVERNMENT AGENCIES WILL BE CHANGED, EFFECTIVE OCTOBER 1, 1960, TO PERMIT THE DEPOSIT OF COLLECTIONS, WHICH ARE AUTHORIZED BY LAW TO BE CREDITED TO AN APPROPRIATION STILL AVAILABLE FOR OBLIGATION OR EXPENDITURE, REVOLVING FUND, SPECIAL OR TRUST FUND, TO THE CREDIT OF SUCH APPROPRIATION OR FUND. 38 COMP. GEN. 95; B-138706, JUNE 2, 1959, MODIFIED; 40 COMP. GEN. 98, MODIFIED BY 40 COMP. GEN. 100.

TO THE SECRETARY OF THE INTERIOR, AUGUST 15, 1960:

REFERENCE IS MADE TO LETTER OF APRIL 11, 1960, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY OF THE INTERIOR, WHICH REQUESTS FURTHER CONSIDERATION OF OUR DECISION DATED JUNE 2, 1959, B-138706, CONCERNING THE DISPOSITION OF CERTAIN COLLECTIONS MADE BY THE GENERAL ACCOUNTING OFFICE ON DEBTS REPORTED BY THE BUREAU OF RECLAMATION AS UNCOLLECTIBLE.

IN THE DECISION OF JUNE 2, IT WAS HELD THAT AMOUNTS COLLECTED BY OUR CLAIMS DIVISION ON DELINQUENT ACCOUNTS REPORTED BY THE BUREAU OF RECLAMATION, FOR CONSTRUCTION REPAYMENT CHARGES AND FOR OPERATION AND MAINTENANCE CHARGES, WERE PROPERLY DEPOSITED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS; HENCE THERE WAS NOT APPROVED THE BUREAU'S PROPOSAL TO CREDIT SUCH COLLECTIONS TO THE RECLAMATION FUND AND TO THE CURRENT OPERATION AND MAINTENANCE APPROPRIATION, RESPECTIVELY, AS REQUESTED.

THE CONCLUSION REACHED IN THE DECISION WAS IN CONFORMITY WITH THE TERMS OF SECTION 1 (C) OF THE ACT OF JULY 25, 1956, 70 STAT. 648, 31 U.S.C. 701 (C), AS IMPLEMENTED BY 4 GAO 5060.10 (1), WHICH PROVIDES THAT ANY COLLECTION MADE BY THE GENERAL ACCOUNTING OFFICE FOR OTHER GOVERNMENT AGENCIES, EXCEPT COLLECTIONS PERTAINING TO TRUST OR DEPOSIT FUND ACCOUNTS, MAY BE DEPOSITED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS. THE ADMINISTRATIVE ASSISTANT SECRETARY OF THE INTERIOR, IN HIS LETTER OF APRIL 11, STATES IN JUSTIFICATION OF THE DEPOSIT OF THE COLLECTIONS IN QUESTION TO THE CREDIT OF THE RECLAMATION FUND AND THE CURRENT OPERATION AND MAINTENANCE APPROPRIATION RATHER THAN AS MISCELLANEOUS RECEIPTS AS FOLLOWS:

IT IS RESPECTFULLY REQUESTED THAT YOUR DECISION BE RECONSIDERED. SUPPORT OF THIS REQUEST, THERE FOLLOWS A SUMMARY OF FACTS TO EXPLAIN (1) THE APPLICABLE PROVISION OF LAW WHICH CONTROLS THE COVERAGE OF RECEIPTS INTO THE RECLAMATION FUND, AND (2) THE ASPECT OF THE TRUST FUND RELATIONSHIP TO COLLECTIONS OF DELINQUENT OPERATION AND MAINTENANCE CHARGES.

UNDER THE PROVISION OF THE INTERIOR DEPARTMENT APPROPRIATION ACT, 1939, APPROVED MAY 9, 1938 (52 STAT. 291, 322/--- BUREAU OF RECLAMATION * * *

"* * * ALL MONEYS RECEIVED BY THE UNITED STATES IN CONNECTION WITH ANY IRRIGATION PROJECTS, INCLUDING THE INCIDENTAL POWER FEATURES THEREOF, CONSTRUCTED BY THE SECRETARY OF THE INTERIOR THROUGH THE BUREAU OF RECLAMATION, AND FINANCED IN WHOLE OR IN PART WITH MONEYS HERETOBEFORE OR HEREAFTER APPROPRIATED OR ALLOCATED THEREFOR BY THE FEDERAL GOVERNMENT, SHALL BE COVERED INTO THE RECLAMATION FUND, EXCEPT IN CASES WHERE PROVISION HAS BEEN MADE BY LAW OR CONTRACT FOR THE USE OF SUCH REVENUES FOR THE BENEFIT OF USERS OF WATER FROM SUCH PROJECT * * *.' (ITALICS SUPPLIED.)

THE ABOVE CITATION IS A PORTION OF THE PARAGRAPH "1INCREASE IN THE RECLAMATION FUND" AND IS POPULARLY REFERRED TO AS THE " HAYDEN-10 MAHONEY AMENDMENT.' THE AUTHORITY UNDER WHICH THE REGULATION 4 GAO 5060.10 (1) WAS ISSUED WOULD NOT APPEAR TO SUPERSEDE THE THE INTENT OF THE " HAYDEN-10 -MAHONEY AMENDMENT.'

IT IS RECOGNIZED THAT TO REINSTATE IN THE BUREAU'S ACCOUNTS UNCOLLECTIBLE ITEMS THAT ARE COLLECTED BY THE GENERAL ACCOUNTING OFFICE MAY INVOLVE SOME SMALL ADMINISTRATIVE EXPENSES TO BOTH OF OUR AGENCIES. HOWEVER, IT IS FORESEEABLE THAT SITUATIONS MAY ARISE IN WHICH SUBSTANTIAL COLLECTIONS WOULD BE DEPOSITED TO MISCELLANEOUS RECEIPTS TO THE DETRIMENT OF THE RECLAMATION FUND. THE PURPOSE OF THE ABOVE CITED PROVISION IS TO PROTECT THE INTEGRITY OF THE RECLAMATION FUND AND TO INSURE THAT ALL APPLICABLE RECEIPTS ARE COVERED INTO THE FUND.

PRIOR TO FISCAL YEAR 1951, ADVANCES BY WATER USERS WERE RECORDED AS TRUST FUNDS AND DEPOSITED UNDER A TRUST FUND SYMBOL. THE USE OF TRUST FUND ACCOUNTS FOR OPERATION AND MAINTENANCE PURPOSES WAS DISCONTINUED WITH THE INSERTION OF THE FOLLOWING LANGUAGE IN THE GENERAL APPROPRIATION ACT, 1951 ( PUBLIC LAW 759, APPROVED SEPTEMBER 6, 1950), UNDER THE HEADING " OPERATION AND MAINTENANCE APPROPRIATION: "

"THAT FUNDS ADVANCED FOR OPERATION AND MAINTENANCE OR RECLAMATION PROJECTS OR PARTS THEREOF SHALL BE DEPOSITED TO THE CREDIT OF THIS APPROPRIATION AND MAY BE EXPENDED FOR THE SAME OBJECTS AND IN THE SAME MANNER AS SUMS APPROPRIATED HEREIN MAY BE EXPENDED, AND THE UNEXPENDED BALANCES OF SUCH ADVANCES SHALL BE CREDITED TO THE APPROPRIATION FOR THE NEXT SUCCEEDING FISCAL YEAR.'

THIS PROVISION HAS BEEN CARRIED IN ALL SUBSEQUENT BUREAU APPROPRIATION

ACTS. ADVANCES FROM WATER USERS FOR O AND M PURPOSES ARE ACCOUNTED FOR AS REIMBURSEMENTS TO THE O AND M APPROPRIATION INSTEAD OF BEING ACCOUNTED FOR AS TRUST FUNDS. THEY ARE ADMINISTERED AND ACCOUNTED FOR AS IF THEY WERE APPROPRIATED FUNDS. HOWEVER, A SEPARATE LIMITATION ACCOUNT, 14- 0664.300, WAS ESTABLISHED AND PROJECTS REQUIRED TO MAINTAIN SEPARATE ALLOTMENT AND INCOME AND EXPENSE ACCOUNTS FOR THESE FUNDS.

THESE ADVANCES ARE CHARGED WITH ACTUAL O AND M EXPENDITURES. UNUSED BALANCES ARE ACCOUNTED FOR AS AMOUNTS DUE THE WATER USERS. THE BALANCES ARE THEN TAKEN INTO CONSIDERATION WHEN THE FOLLOWING YEAR'S ADVANCE IS BILLED. IT, THEREFORE, BECOMES EVIDENT THAT AN UNPAID O AND M CHARGE IS ABSORBED BY PAYING WATER USERS. IT WOULD SEEM ONLY RIGHT AND PROPER, THEREFORE, THAT ANY COLLECTION RECEIVED FROM THE DELINQUENT DEBTOR SHOULD BE RETURNED TO THE O AND M FUND AS A CREDIT TO THE WATER USERS TO RELIEVE THEM OF THE PRIOR CHARGES. ALTHOUGH THE CLASSIFICATION OF O AND M FUNDS ADVANCES BY WATER USERS AS " TRUST FUNDS" WAS DISCONTINUED BEGINNING WITH FISCAL YEAR 1951, WE BELIEVE THAT ALL COLLECTIONS RELATED TO THESE WATER USER ADVANCES MUST BE FULLY ACCOUNTED FOR IN A SIMILAR MANNER AS TRUST FUNDS EVEN THOUGH SUCH COLLECTIONS ARE REFLECTED AS REIMBURSEMENTS TO THE CURRENT O AND M APPROPRIATION.

THE PROCEDURE FOLLOWED BY THE GENERAL ACCOUNTING OFFICE OF DEPOSITING COLLECTIONS, ON ACCOUNT OF UNCOLLECTIBLE DEBTS MADE BY OUR CLAIMS DIVISION FOR OTHER GOVERNMENT AGENCIES, TO THE CREDIT OF MISCELLANEOUS RECEIPTS, NOTWITHSTANDING AUTHORITY OF THE DEPARTMENTS AND AGENCIES CONCERNED TO OTHERWISE MAKE USE OF THE COLLECTIONS, WAS ADOPTED AS A MATTER OF ACCOUNTING CONVENIENCE AND ECONOMY IN ACCORDANCE WITH THE DISCRETIONARY AUTHORITY CONFERRED ON THIS OFFICE IN THE CITED ACT OF JULY 25, 1956. SEE 38 COMP. GEN. 95. A REVIEW OF THE FISCAL EFFECTS OF THIS PROCEDURE HAS BEEN IN THE COURSE OF INVESTIGATION AND STUDY. AS A RESULT THEREOF, WE HAVE CONCLUDED THAT THE PRESENT POLICY WITH REFERENCE TO THE DEPOSIT OF SUCH COLLECTIONS MADE BY US SHOULD BE CHANGED.

ACCORDINGLY, EFFECTIVE OCTOBER 1, 1960, COLLECTIONS MADE BY THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE FOR OTHER DEPARTMENTS AND AGENCIES, WHICH COLLECTIONS ARE AUTHORIZED BY LAW TO BE CREDITED TO AN APPROPRIATION STILL AVAILABLE FOR OBLIGATION, OR TO AN APPROPRIATION WHICH HAS NOT BEEN TRANSFERRED TO AN "M" ACCOUNT, REVOLVING FUND, SPECIAL OR TRUST FUND, WILL BE DEPOSITED TO THE CREDIT OF SUCH APPROPRIATION OR FUND. INFORMATION RELATIVE TO SUCH COLLECTIONS WILL BE FURNISHED TO THE DEPARTMENTS AND AGENCIES CONCERNED. THE INFORMATION WILL RELATE ONLY TO THE APPLICABLE APPROPRIATION OR FUND SYMBOL AND THE AMOUNT OF THE DEPOSIT, IT BEING IMPRACTICABLE FOR THE GENERAL ACCOUNTING OFFICE TO ASCERTAIN AND FURNISH ADDITIONAL FISCAL ACCOUNTING INFORMATION BELOW THE APPROPRIATION LEVEL. APPROPRIATE INSTRUCTIONS ARE BEING ISSUED TODAY TO EFFECT THE ACCOMPLISHMENT THEREOF.

THE DECISION OF JUNE 2, 1959, B-138706, IS HEREBY MODIFIED, AND THE DECISION TO YOUR DEPARTMENT REPORTED AT 38 COMP. GEN. 95, IS ALSO HEREBY MODIFIED. B-138706, SEPTEMBER 12, 1960, 40 COMP. GEN. 100

REFERENCE IS MADE TO OUR DECISION OF AUGUST 15, 1960, 40 COMP. GEN. 98 TO YOU, IN RESPONSE TO A LETTER OF APRIL 11, 1960, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY OF THE INTERIOR RELATIVE TO THE DISPOSITION OF CERTAIN COLLECTIONS MADE BY THE GENERAL ACCOUNTING OFFICE ON DEBTS REPORTED BY THE BUREAU OF RECLAMATION AS UNCOLLECTIBLE.

IN IMPLEMENTING THE PROCEDURE SET OUT IN THE DECISION FOR HANDLING SUCH COLLECTIONS, WE HAVE FOUND IT DESIRABLE TO EXTEND ITS APPLICATION SO AS TO AUTHORIZE THE DEPOSIT OF COLLECTIONS TO FISCAL YEAR APPROPRIATIONS STILL AVAILABLE FOR OBLIGATION OR EXPENDITURE REGARDLESS OF WHETHER THE APPROPRIATIONS HAVE REACHED AN "M" ACCOUNT STATUS. THEREFORE, THE LAST PARAGRAPH, PAGE 3, OF THE DECISION, IS HEREBY AMENDED TO READ AS FOLLOWS:

ACCORDINGLY, EFFECTIVE OCTOBER 1, 1960, COLLECTIONS MADE BY THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE FOR OTHER DEPARTMENTS AND AGENCIES, WHICH COLLECTIONS ARE AUTHORIZED BY LAW TO BE CREDITED TO AN APPROPRIATION STILL AVAILABLE FOR OBLIGATION OR EXPENDITURE, REVOLVING FUND, SPECIAL OR TRUST FUND, WILL BE FOR DEPOSIT TO THE CREDIT OF SUCH APPROPRIATION OR FUND. INFORMATION RELATIVE TO SUCH COLLECTIONS WILL BE FURNISHED TO THE DEPARTMENTS AND AGENCIES CONCERNED. THE INFORMATION WILL RELATE ONLY TO THE APPLICABLE APPROPRIATION OR FUND SYMBOL AND THE AMOUNT OF THE DEPOSIT, IT BEING IMPRACTICABLE FOR THE GENERAL ACCOUNTING OFFICE TO ASCERTAIN AND FURNISH ADDITIONAL FISCAL ACCOUNTING INFORMATION BELOW THE APPROPRIATION LEVEL. APPROPRIATE INSTRUCTIONS ARE BEING ISSUED TODAY TO EFFECT THE ACCOMPLISHMENT THEREOF.