B-159335 L/M, DEC 13, 1967

B-159335 L/M, DEC 13, 1967

SUBJECT: COMPLAINTS AND REQUESTS FOR ASSISTANCE FROM CARRIERS OF GOVERNMENT FREIGHT AND PASSENGERS

TO THE HEADS OF DEPARTMENTS, INDEPENDENT ESTABLISHMENTS AND OTHERS CONCERNED:

IN OUR CIRCULAR LETTER OF JUNE 3, 1966 (B-159335), COVERING CARRIER BILLING PROBLEMS, WE POINTED OUT DIFFICULTIES ENCOUNTERED BY SOME OF THE MAJOR CARRIERS IN SECURING PAYMENT OF THEIR BILLS FOR TRANSPORTATION SERVICES. WE ALSO CITED CERTAIN DISCREPANCIES IN THE PROCESSING OF CARRIERS' BILLS BY THE VARIOUS DEPARTMENTS AND AGENCIES OF THE GOVERNMENT. WE RECOMMENDED THAT ALL GOVERNMENT OFFICES RESPONSIBLE FOR PROCESSING AND CERTIFYING TRANSPORTATION BILLS FOR PAYMENT BE PROVIDED WITH A COPY OF TITLE 5 OF THE GENERAL ACCOUNTING OFFICE POLICY AND PROCEDURES MANUAL FOR GUIDANCE OF FEDERAL AGENCIES, AND THAT THE STAFFS OF THESE OFFICES BE REQUESTED TO STUDY AND ADHERE TO THE PROVISIONS THEREIN.

SINCE THE ISSUANCE OF OUR LAST CIRCULAR LETTER ON THE SUBJECT, THE GENERAL ACCOUNTING OFFICE HAS CONTINUED TO RECEIVE A LARGE VOLUME OF COMPLAINTS AND REQUESTS FOR ASSISTANCE FROM CARRIERS OF GOVERNMENT FREIGHT AND PASSENGERS. THEIR PRINCIPAL DIFFICULTIES OCCUR VARIOUSLY IN:

1. OBTAINING THE RETURN OF ORIGINAL GOVERNMENT BILLS OF LADING PROPERLY ACCOMPLISHED BY THE CONSIGNEES.

2. OBTAINING CERTIFICATES IN LIEU THEREOF WHEN THE ORIGINALS CANNOT BE LOCATED.

3. BEING MISDIRECTED AS TO THE APPROPRIATE BILLING OFFICE.

4. ENCOUNTERING LONG DELAYS IN RECEIVING PAYMENT AFTER PROPERLY SUPPORTED BILLS ARE PRESENTED.

OUR INVESTIGATIONS SHOW THAT CARRIERS FREQUENTLY CONTRIBUTE TO THESE PROBLEMS, BY LOSING THE ACCOMPLISHED ORIGINALS OF BILLS OF LADING, NOT FOLLOWING APPROPRIATE BILLING INSTRUCTIONS, OR OTHERWISE FAILING TO PROPERLY SUPPORT THEIR BILLS. BUT IN THE MAJORITY OF FREIGHT AND PASSENGER CASES REFERRED TO US FOR ASSISTANCE, GOVERNMENT ADMINISTRATIVE OFFICES HAVE NOT PROVIDED CARRIERS WITH THE NECESSARY DOCUMENTATION, INSTRUCTIONS, AND/OR ADMINISTRATIVE ACTION TO ENABLE THEM TO BILL AND BE PAID PROMPTLY FOR SERVICES RENDERED TO THE GOVERNMENT. WE BELIEVE, THEREFORE, THAT YOU SHOULD GIVE CONSIDERATION TO THE FOLLOWING PROBLEMS, AND DIRECT IMPROVEMENTS IN YOUR OPERATIONS AS REQUIRED.

1. ALL TYPES OF FREIGHT CARRIERS, INDIVIDUALLY AND THROUGH THEIR ASSOCIATIONS, HAVE REPORTED TO US AN INCREASING PROBLEM IN OBTAINING THE CONSIGNEE'S CERTIFICATE OR OTHER PROOF OF DELIVERY FOR GOVERNMENT SHIPMENTS. THIS PROBLEM BECAME SO SERIOUS FOR SOME CARRIERS THAT WE HAD TO ACCEPT BILLS FOR HUNDREDS OF SHIPMENTS AND CERTIFY THEM DIRECTLY TO THE APPROPRIATE ADMINISTRATIVE OFFICES FOR PAYMENT ON THE BASIS OF SECONDARY EVIDENCE OF GOOD ORDER DELIVERY. OTHER CARRIERS REPORT INABILITY TO BILL THOUSANDS OF DOLLARS IN SHIPPING CHARGES, BECAUSE THEY CANNOT OBTAIN ACCOMPLISHED ORIGINAL BILLS OF LADING OR CERTIFICATES-IN-LIEU FROM GOVERNMENT OFFICES.

UNDER THESE CIRCUMSTANCES, WE BELIEVE IT DESIRABLE THAT EVERY AGENCY MAKE AN INTERNAL REVIEW OF THEIR FREIGHT RECEIVING OPERATIONS AND RELATED TRAFFIC OFFICES FOR TWO PURPOSES. ONE WOULD BE TO PROMPTLY SIGN AND CLEAR ALL OUTSTANDING ORIGINAL GOVERNMENT BILLS OF LADING ON WHICH DELIVERIES HAVE BEEN MADE. THE OTHER WOULD BE TO CRITICALLY EXAMINE THE OPERATING PROCEDURES RELATING TO THE RECEIPT OF FREIGHT AND THE ACCOMPLISHMENT AND DISPATCH OF BILLS OF LADING TO THE DELIVERING CARRIERS, AND, WHERE NECESSARY, TO REVISE THESE PROCEDURES TO ASSURE PROMPT RELEASE OF ACCOMPLISHED BILLS OF LADING IN THE FUTURE.

WE ALSO URGE ALL AGENCIES TO REVIEW THEIR FILES FOR UNANSWERED REQUESTS FROM CARRIERS FOR THE ISSUANCE OF CERTIFICATES-IN-LIEU OF LOST BILLS OF LADING. MANY CARRIERS ARE NOT FAMILIAR WITH THE PROCEDURES FOR OBTAINING THESE CERTIFICATES, AS PRESCRIBED IN SECTION 3045, TITLE 5 OF THE GAO MANUAL, AND REQUESTS ARE OFTEN DIRECTED TO THE WRONG OFFICE. IN SUCH CASES, WE BELIEVE IT IS IN THE BEST INTERESTS OF THE GOVERNMENT, AND THE CARRIERS, FOR OFFICES RECEIVING MISDIRECTED REQUESTS TO LOCATE THE APPROPRIATE CONSIGNEES OR ISSUING OFFICES AND FORWARD THE REQUESTS WITH NOTIFICATION TO THE CARRIERS OF THE ACTION TAKEN. GOVERNMENT TRANSPORTATION OFFICES SHOULD ALSO BE AWARE OF THE EXCEPTIONS IN SECTION 3045, WHEREBY UNDER CERTAIN CIRCUMSTANCES THE OFFICE ISSUING A GOVERNMENT BILL OF LADING IS AN APPROPRIATE ALTERNATIVE TO THE CONSIGNEE OFFICE FOR THE ISSUANCE OF A CERTIFICATE IN-LIEU.

2. WE CONTINUE TO RECEIVE A GREAT MANY REFERRALS OF UNPAID BILLS FROM CARRIERS WHO ARE UNABLE TO LOCATE THE PROPER GOVERNMENT ADMINISTRATIVE OFFICES TO WHICH THEIR BILLS SHOULD BE RENDERED. IN OUR PRIOR CIRCULAR LETTER ON THIS SUBJECT, WE STRESSED THE NECESSITY OF DESCRIBING THE EXACT BILLING OFFICE AND ADDRESS IN THE "BILL TO" SPACE OF THE GOVERNMENT BILL OF LADING AND TRANSPORTATION REQUEST FORMS. WE URGE RENEWED ATTENTION TO THIS REQUIREMENT FOR THE BENEFIT OF CARRIERS AND GOVERNMENT CERTIFYING OFFICES.

RECOGNIZING, HOWEVER, THAT SOME OF THESE MISTAKES ARE UNAVOIDABLE AMONG THE HUNDREDS OF OFFICES ISSUING GOVERNMENT TRANSPORTATION DOCUMENTS, PARTICULARLY IN SMALL OFFICES OR WHERE CROSS-SERVICING IS INVOLVED, WE INVITE YOUR CONSIDERATION OF ANOTHER REMEDY FOR INCORRECT BILLING INSTRUCTIONS. WE NOTE THAT, IN RETURNING UNPAID BILLS TO CARRIERS BECAUSE THEY WERE ADDRESSED TO THE WRONG OFFICE (EVEN THOUGH CARRIERS WERE FOLLOWING THE "BILL TO" INFORMATION ON THE BILL OF LADING OR TRANSPORTATION REQUEST), GOVERNMENT CERTIFYING OFFICES SELDOM ADVISE THE CARRIERS OF THE CORRECT BILLING OFFICE. MOST OF THE NOTICES TO CARRIERS THAT WE HAVE REVIEWED ARE FORM LETTERS OR CHECK LISTS OF REASONS FOR RETURNING BILLS UNPAID, WHICH MERELY INFORM THE CARRIERS, IN SUBSTANCE, THAT THE OFFICE BILLED DOES NOT HAVE AUTHORITY TO PAY FROM THE FUNDS CITED.

IN THESE CASES, WE BELIEVE IT INCUMBENT UPON ALL CERTIFYING AND OTHER ADMINISTRATIVE OFFICES OF THE GOVERNMENT TO MAKE A REASONABLE EFFORT TO LOCATE THE APPROPRIATE OFFICE RESPONSIBLE FOR PAYING THE CHARGES CLAIMED. FREQUENTLY, THE OFFICE RESPONSIBLE FOR THE ERRONEOUS BILLING INSTRUCTIONS ON THE TRANSPORTATION DOCUMENTS IS IN THE SAME GENERAL DEPARTMENT OR AGENCY AS THE ADMINISTRATIVE OFFICE RECEIVING THE UNPAID BILLS. THEREFORE, IT SHOULD BE RELATIVELY SIMPLE FOR THESE ADMINISTRATIVE OFFICES, AND CERTAINLY EASIER THAN FOR THE CARRIERS, TO DETERMINE FROM THE TRANSPORTATION DOCUMENTS OR FROM CORRESPONDENCE AND PHONE CALLS, AS NECESSARY, WHERE THE CARRIERS SHOULD SUBMIT THE BILLS. WHEN THE ADMINISTRATIVE OFFICES ARE NOT ORGANIZATIONALLY RELATED BY DEPARTMENT OR AGENCY TO THE OFFICES GIVING ERRONEOUS BILLING INSTRUCTIONS, IT STILL SEEMS TO US TO BE A PUBLIC RESPONSIBILITY FOR THE ADMINISTRATIVE OFFICES TO ANALYZE THE UNDERLYING DOCUMENTS AND TO ADVISE THE CARRIERS, TO THE EXTENT POSSIBLE, WHERE THEIR BILLS PROBABLY SHOULD BE DIRECTED. BELIEVE THIS CONSTITUTES A GOOD, BUSINESS-LIKE PRACTICE FOR THE GOVERNMENT, AND CONFORMS WITH THE INTENT OF THE PRESIDENT'S MEMORANDUM FOR HEADS OF DEPARTMENTS AND AGENCIES DATED NOVEMBER 1, 1965, IN WHICH HE ANNOUNCED A CONCERTED GOVERNMENT DRIVE UNDER THE CHAIRMAN OF THE CIVIL SERVICE COMMISSION TO BRING BETTER SERVICE TO THE PUBLIC.

3. A FINAL POINT OF GREAT CONCERN AND COST TO THE CARRIERS OF GOVERNMENT FREIGHT AND PASSENGERS IS THE GENERAL DELAY IN THE PAYMENT OF THEIR TRANSPORTATION BILLS BY GOVERNMENT OFFICES. WE UNDERSTAND THAT THIS IS NOT A PROBLEM WITH THE CENTRAL TRANSPORTATION CERTIFYING AND DISBURSING OFFICES OF THE DEPARTMENT OF DEFENSE, BUT IS QUITE WIDESPREAD AMONG MOST OTHER MILITARY AND CIVILIAN CERTIFYING OFFICES.

FOR OTHER THAN THE CENTRAL MILITARY OFFICES, OUR REVIEW SHOWS THAT THE AVERAGE TIME TAKEN BY MANY GOVERNMENT OFFICES TO EXAMINE AND PAY TRANSPORTATION BILLS IS IN EXCESS OF 60 DAYS. WE DO NOT KNOW HOW UNIVERSAL THIS PRACTICE IS THROUGHOUT THE GOVERNMENT, SINCE THERE ARE HUNDREDS OF OFFICES IN THE GOVERNMENT PROCESSING TRANSPORTATION BILLS AND OVER 2 MILLION OF SUCH BILLS ARE PAID ANNUALLY. WE CAN CONFIRM THAT IT IS PREVALENT, HOWEVER, FROM OUR ANALYSES OF SAMPLINGS OF PAID BILLS AND OUR DISCUSSIONS WITH REPRESENTATIVES OF VARIOUS CARRIER ASSOCIATIONS. ONE OF THE LARGEST SINGLE CARRIERS, FOR EXAMPLE, REPORTS THAT IT HAS AN AVERAGE OF OVER $4 MILLION OF RECEIVABLES DUE FROM THE GOVERNMENT ON RENDERED BILLS, REPRESENTING ABOUT TWO MONTHS OF ITS ANNUAL GOVERNMENT REVENUES.

IT SEEMS TO US THAT PAYMENT DELAYS OF THIS MAGNITUDE ARE UNREASONABLE, AND COULD HAVE AN UNFAVORABLE EFFECT UPON THE EFFORTS OF GOVERNMENT TRAFFIC OFFICERS IN NEGOTIATING FAVORABLE FREIGHT AND PASSENGER RATES. ACCORDINGLY, WE RECOMMEND THAT YOU MAKE AN INTERNAL REVIEW OF YOUR ADMINISTRATIVE OPERATIONS FOR TRANSPORTATION BILLS, TO DETERMINE IF CERTIFICATION FOR PAYMENT IS BEING MADE WITHIN A REASONABLE TIME AND, IF NOT, TO BRING ABOUT NEEDED IMPROVEMENTS.