B-155483, JAN. 19, 1965

B-155483, JAN. 19, 1965

TO MR. HAROLD O. SWANK, DIRECTOR, STATE OF ILLINOIS DEPARTMENT OF PUBLIC AID:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 15, 1964, REGARDING THE CLAIM OF THE UNITED STATES AGAINST THE ILLINOIS DEPARTMENT OF PUBLIC AID IN THE AMOUNT OF $3,576.08 REPRESENTING THE VALUE OF COMMODITIES DONATED BY THE DEPARTMENT OF AGRICULTURE, AGRICULTURAL MARKETING SERVICE, FOOD DISTRIBUTION DIVISION, UNDER THE DIRECT DISTRIBUTION PROGRAM WHICH WERE LOST WHILE IN THE POSSESSION OF THE ILLINOIS DEPARTMENT OF PUBLIC AID, AN AGENCY OF THE STATE OF ILLINOIS, FORMERLY KNOWN AS THE ILLINOIS PUBLIC AID COMMISSION.

BY LETTER OF DECEMBER 2, 1964, WE ADVISED YOU THAT, ON THE BASIS OF THE RECORD BEFORE US, THE CLAIM OF THE DEPARTMENT APPEARED TO BE FULLY SUPPORTED BY THE ADMINISTRATIVE REPORT. HOWEVER, TO ENABLE YOU TO SUBMIT ANY ADDITIONAL INFORMATION YOU MIGHT HAVE ON THE MATTER, WE INFORMED YOU THAT WE WOULD WITHHOLD FINAL COLLECTION ACTION FOR THIRTY DAYS.

IN YOUR LETTER OF DECEMBER 15, 1964, YOU DIRECT OUR ATTENTION TO SEVERAL STATEMENTS SET FORTH IN THE REPORT OF AUDIT BY THE DEPARTMENT OF AGRICULTURE DATED DECEMBER 10, 1962, WHICH COVERS AN AUDIT OF THE ST. CLAIR COUNTY COMMODITY DEPOT, EAST ST. LOUIS, ILLINOIS, FOR THE PERIOD JUNE 26, 1961, TO SEPTEMBER 20, 1962. THE FIRST STATEMENT, WHICH APPEARS ON PAGE 2 OF THE AUDIT UNDER ,SUMMARY OF FINDINGS" PROVIDES AS FOLLOWS:

"THE DEPOT WAREHOUSE, IN WHICH DRY COMMODITIES WERE STORED, DID PROVIDE ADEQUATE PROTECTION AGAINST PILFERAGE.'

IN A LETTER OF JANUARY 30, 1964, REFERRING THE INDEBTEDNESS TO OUR CLAIMS DIVISION FOR COLLECTION, THE DEPARTMENT ADVISED THAT THE WORD "NOT" WAS INADVERTENTLY OMITTED FROM THE ABOVE-QUOTED SENTENCE, AS EVIDENCED IN THE "FINDINGS"SECTION OF THE AUDIT UNDER THE AUDITOR'S APPRAISAL OF THE STORAGE FACILITIES ON PAGE 12 OF THE REPORT. THAT STATEMENT PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"* * * THE DEPOT WAREHOUSE IN WHICH THE COMMODITIES REQUIRING DRY STORAGE WERE KEPT WAS CONSIDERED SATISFACTORY INSOFAR AS PRESERVATION OF COMMODITIES WAS CONCERNED, HOWEVER, THE BUILDING WAS SO OLD AND ITS DOORS AND WINDOWS WERE SUCH, THAT PROTECTION AGAINST PILFERAGE WAS NOT ADEQUATE. * * *"

ALSO, ON THE COPY OF THE REPORT OF AUDIT FORWARDED TO OUR OFFICE BY THE DEPARTMENT AS AN ATTACHMENT TO ITS LETTER OF JANUARY 30, 1964, THE WORD "NOT" HAD BEEN INSERTED IN THE SENTENCE APPEARING ON PAGE 2 OF THE AUDIT SO THAT IT READS AS FOLLOWS:

"THE DEPOT WAREHOUSE, IN WHICH DRY COMMODITIES WERE STORED, DID NOT PROVIDE ADEQUATE PROTECTION AGAINST PILFERAGE.'

IN YOUR LETTER OF DECEMBER 15, 1964, YOU ALSO DIRECT OUR ATTENTION TO A STATEMENT ON PAGE 8 OF THE REPORT WHICH PROVIDES AS FOLLOWS:

"WE DID NOT FIND THAT IPAC EMPLOYEES BENEFITED IN ANY WAY FROM THE INVENTORY SHORTAGES AND OVERAGES INVOLVED IN THE ALTERED AND FICTITIOUS COMMODITY CARDS. WE ATTRIBUTE THESE SHORTAGES TO PILFERAGE.'

THE DEPARTMENT DETERMINED THAT THE LOSS OF COMMODITIES VALUED AT $1,552.40 RESULTED FROM THE STATE AGENCY'S FAILURE TO MAINTAIN ADEQUATE SUPERVISION OF THE DEPOT'S OPERATIONS. SINCE THE DEPARTMENT'S DETERMINATION WAS BASED ON FINDINGS MADE DURING THE AUDIT THAT THERE WERE INVENTORY SHORTAGES, THAT FOR THE PURPOSE OF COVERING SUCH SHORTAGES SOME COMMODITY CARDS WERE ALTERED AND SOME FICTITIOUS CARDS PREPARED, THAT THE DEPOT WAREHOUSE DID NOT PROVIDE ADEQUATE PROTECTION AGAINST PILFERAGE, AND THAT THE SHORTAGES WERE ATTRIBUTED TO PILFERAGE, IT IS IMMATERIAL WHETHER IPAC EMPLOYEES BENEFITED FROM THE INVENTORY SHORTAGES.

IN ADDITION TO THE FOREGOING, YOU STATE THAT THE WAREHOUSE WAS EQUIPPED WITH A BURGLAR ALARM WHICH AFFORDED PROTECTION AS EVIDENCED BY THE FACT THAT TWO PERSONS WERE APPREHENDED BY THE POLICE AS A RESULT OF THE ALARM SOUNDING. THEREFORE, UNDER THE CIRCUMSTANCES YOU BELIEVE THE RECORD INDICATES THAT ADEQUATE PROTECTION WAS MAINTAINED FOR THE STORAGE FACILITY. THE RECORD SHOWS THAT THERE WAS AN ALARM SYSTEM ON THREE ENTRANCE DOORS AND THREE LOADING DOORS OF THE WAREHOUSE; HOWEVER, THERE WERE MANY OTHER OPENINGS THROUGH WHICH COMMODITIES COULD BE REMOVED THAT WERE NOT PROTECTED, AND THE LOADING DOOR WHERE THE BREAK IN OCCURRED COULD BE OPENED AT LEAST EIGHTEEN INCHES WITHOUT SETTING OFF THE BURGLAR ALARM. HENCE, THE DEPARTMENT'S DETERMINATION THAT THE STATE AGENCY FAILED TO PROVIDE ADEQUATE PROTECTION AGAINST THEFT APPEARS TO BE FULLY SUPPORTED BY THE RECORD.

AS WE ADVISED YOU IN OUR LETTER OF DECEMBER 2, 1964, IT HAS LONG BEEN THE RULE OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT TO ACCEPT THE REPORT OF THE ADMINISTRATIVE OFFICERS OF THE UNITED STATES IN THE ABSENCE OF CONVINCING EVIDENCE TO THE CONTRARY. ALSO, UPON DISPUTED QUESTIONS OF FACT, THE LONG-ESTABLISHED RULE OF THE ACCOUNTING OFFICERS IS TO ACCEPT THE STATEMENTS OF FACT FURNISHED BY THE ADMINISTRATIVE OFFICERS, IN THE ABSENCE OF EVIDENCE SUFFICIENT TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS THEREOF.

YOUR LETTER OF DECEMBER 15, 1964, DOES NOT CONTAIN ANY NEW OR ADDITIONAL EVIDENCE NOT PREVIOUSLY CONSIDERED BY THE DEPARTMENT OR CONTAINED IN THE RECORD SUBMITTED TO OUR OFFICE BY THE DEPARTMENT. THEREFORE, SINCE YOU HAVE NOT SUBMITTED ANY NEW OR ADDITIONAL INFORMATION FOR THE RECORD, AND, SINCE THE CLAIM OF THE DEPARTMENT FOR $3,576.08, THE VALUE OF THE COMMODITIES THAT WERE LOST WHILE IN THE POSSESSION OF THE STATE AGENCY, IS FULLY SUPPORTED BY THE ADMINISTRATIVE REPORT, WE ARE INSTRUCTING OUR CLAIMS DIVISION TO DEPOSIT THE CHECK IN THE AMOUNT OF $3,576.08 RECEIVED FROM THE CORPS OF ENGINEERS, UNITED STATES ARMY ENGINEER DISTRICT, CHICAGO, ILLINOIS, IN THE TREASURY OF THE UNITED STATES TO LIQUIDATE THE INDEBTEDNESS OF THE ILLINOIS DEPARTMENT OF PUBLIC AID.