A-87110, AUGUST 9, 1937, 17 COMP. GEN. 118

A-87110, AUGUST 9, 1937, 17 COMP. GEN. 118

DRAFTS - ORIGINALS AND DUPLICATES - PAYMENT PROCEDURE DUPLICATE DRAFTS DRAWN UNDER CURRENT AS DISTINGUISHED FROM LAPSED APPROPRIATIONS MAY BE HONORED IN THE SAME MANNER AS ORIGINAL DRAFTS PROVIDED THERE IS A PROPER SAFEGUARDING OF THE INTERESTS OF THE UNITED STATES THROUGH THE FURNISHING OF AN AFFIDAVIT OF LOSS, BOND OF INDEMNITY ADMINISTRATIVELY APPROVED, AND EVIDENCE THAT PAYMENT OF ORIGINAL HAS BEEN STOPPED, BUT CLAIMS OF PAYEES OR OTHER OWNERS OF DRAFTS, ORIGINAL OR DUPLICATE, DRAWN UNDER LAPSED APPROPRIATIONS ARE FOR SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF STATE, AUGUST 9, 1937:

THERE HAS BEEN CONSIDERED YOUR LETTER DATED JUNE 18, 1937, AS FOLLOWS:

OCCASIONALLY DRAFTS DRAWN BY OFFICERS IN THE FOREIGN SERVICE ARE LOST IN TRANSIT TO THE UNITED STATES. WHEN THE LOSS OF A DRAFT IS VERIFIED, THE OFFICER IS INSTRUCTED TO FURNISH THE REQUIRED BOND, DRAW A DUPLICATE DRAFT, AND HAVE IT PLACED IN THE SAME CHANNELS AS WAS THE ORIGINAL FOR DELIVERY TO THE DEPARTMENT. UNDER PRESENT PROCEDURE, WHEN THE DRAFT IS RECEIVED IT IS TRANSMITTED TO THE GENERAL ACCOUNTING OFFICE, TOGETHER WITH THE BOND, FOR DIRECT SETTLEMENT.

FOR THE PURPOSE OF HAVING PAYMENT OF SUCH A DUPLICATE DRAFT EXPEDITED, IT IS SUGGESTED THAT IMMEDIATELY UPON RECEIPT OF THE REQUIRED INDEMNITY BOND, IT BE FORWARDED TO YOUR OFFICE FOR APPROVAL, AFTER WHICH IT SHOULD BE RETURNED TO THE DEPARTMENT IN ORDER THAT IT MAY ACCOMPANY THE DUPLICATE DRAFT WHICH, UPON RECEIPT, WILL BE TRANSMITTED TO THE CHIEF DISBURSING OFFICER FOR PAYMENT IN THE USUAL MANNER. THIS PROCEDURE IS DESIRED IN ORDER TO EFFECT PAYMENT WITHIN THE FIVE DAY SIGHT PERIOD. WHEN PAYMENT IS DELAYED BEYOND THAT PERIOD, INSTANCES OF WHICH ARE KNOWN, THE NECESSITY THEREFOR IS NOT UNDERSTOOD BY FOREIGN BANKING INSTITUTIONS AND MUST BE EXPLAINED.

YOU ARE DOUBTLESS AWARE THAT ANY DIFFICULTY EXPERIENCED BY A BANK IN CONNECTION WITH THE HANDLING OF DRAFTS CANNOT BUT RESULT INJURIOUSLY TO THE CREDIT STANDING OF THE UNITED STATES ABROAD, AND IN ORDER THAT THE TRANSACTION OF PUBLIC BUSINESS BY THE FOREIGN SERVICE MAY NOT BE HAMPERED THROUGH AVOIDABLE DELAYS IN PAYMENT, IT IS HOPED THAT THE PROCEDURE SUGGESTED WILL RECEIVE YOUR FAVORABLE CONSIDERATION AND APPROVAL.

THIS OFFICE IS IN SYMPATHY WITH ANY PROPER EFFORTS OF YOUR DEPARTMENT TO EXPEDITE THE PAYMENT OF DUPLICATE DRAFTS DRAWN ON THE SECRETARY OF STATE BY FOREIGN SERVICE OFFICERS IN LIEU OF ORIGINAL DRAFTS LOST IN TRANSIT. HOWEVER, IT IS BELIEVED THE DESIRED OBJECT MAY BE ATTAINED WITHOUT RESORTING TO THE PROCEDURE SUGGESTED IN YOUR LETTER.

IT APPEARS FROM RECORDS AVAILABLE IN THIS OFFICE THAT CASES OF THIS CHARACTER SUBMITTED HERE FOR DIRECT SETTLEMENT HAVE INVOLVED, FOR THE MOST PART, DRAFTS ORIGINALLY DRAWN UNDER APPROPRIATIONS WHICH WERE STILL CURRENT AT THE TIME THE DUPLICATE DRAFTS WERE PRESENTED FOR PAYMENT. WHILE SETTLEMENTS HAVE BEEN MADE BY THIS OFFICE IN SUCH CASES WHETHER INVOLVING CURRENT OR LAPSED APPROPRIATIONS, THERE ARE FOR CONSIDERATION IN THIS CONNECTION DECISIONS OF THE FORMER COMPTROLLER GENERAL DATED DECEMBER 15, 1923, AND APRIL 24, 1924, 3 COMP. GEN.372, 799. THE FIRST DECISION HELD THAT SETTLEMENTS IN FAVOR OF PAYEES OF CONSULAR DRAFTS, BASED ON DUPLICATE DRAFTS DRAWN AGAINST LAPSED APPROPRIATIONS, MAY NOT BE AUTHORIZED WHILE THE ORIGINAL DRAFTS ARE OUTSTANDING, IN THE ABSENCE OF A BOND OF INDEMNITY AND AFFIDAVIT OF LOSS. HOWEVER, IT WAS STATED, IN PART, IN RECONSIDERATION OF THAT DECISION, DATED APRIL 24, 1924, 3 COMP. GEN. 799, 800, AS FOLLOWS:

YOUR ATTENTION IS INVITED TO THE FACT THAT THE DECISION OF WHICH RECONSIDERATION IS REQUESTED DEALT ONLY WITH SETTLEMENT BY THIS OFFICE IN FAVOR OF THE PAYEE OF A DUPLICATE CONSULAR DRAFT WHILE THE ORIGINAL WAS OUTSTANDING AND THE AMOUNT THEREOF WAS CHARGED TO AN APPROPRIATION WHICH HAD LAPSED TO THE SURPLUS FUND, NECESSITATING A RESTORATION BEFORE PAYMENT COULD BE EFFECTED. * *

FURTHERMORE, THE REQUIREMENT FOR FURNISHING AN AFFIDAVIT OF LOSS AND BOND OF INDEMNITY WAS NOT INTENDED TO PREVENT, AND DOES NOT PREVENT, THE DEPARTMENT OF STATE FROM HONORING DUPLICATE DRAFTS DRAWN AGAINST FUNDS UNDER ITS CONTROL WHERE NO ACTION BY THIS OFFICE IS REQUIRED. IN THE AUDIT OF ACCOUNTS INVOLVING SUCH PAYMENTS, CREDIT THEREFOR WILL BE ALLOWED ONLY UPON A PROPER SHOWING THAT APPROPRIATE ACTION HAS BEEN TAKEN IN THE DEPARTMENT OF STATE TO GUARD AGAINST PAYMENT ON THE ORIGINAL DRAFT.

WHERE THE PROPOSED PAYMENT ON THE DUPLICATE DRAFT IS UNDER A CURRENT APPROPRIATION AS DISTINGUISHED FROM AN APPROPRIATION WHICH HAS LAPSED TO THE SURPLUS FUND, THERE WOULD APPEAR NO LEGAL OBJECTION TO THE HONORING OF THE DUPLICATE DRAFT IN THE SAME MANNER AS ORIGINAL DRAFTS, PROVIDED PROPER SHOWING BE MADE IN EACH CASE IN THE AUDIT THAT THE INTERESTS OF THE UNITED STATES HAVE BEEN SAFEGUARDED AGAINST PRESENTATION OF THE ORIGINAL DRAFT. FOR SUCH PURPOSE THE AFFIDAVIT OF LOSS AND BOND OF INDEMNITY NOW UNIFORMLY REQUIRED IN SUCH CASES, ADMINISTRATIVELY APPROVED BY THE PROPER OFFICER OF YOUR DEPARTMENT, AND A STATEMENT THAT PAYMENT OF THE ORIGINAL DRAFT HAS BEEN STOPPED WOULD APPEAR THE PROPER METHOD TO BE FOLLOWED IN SUCH CASES.

CLAIMS OF PAYEES OR OTHER OWNERS OF DRAFTS, ORIGINAL OR DUPLICATE, DRAWN UNDER APPROPRIATIONS WHICH HAVE LAPSED TO THE SURPLUS FUND, WILL NECESSARILY CONTINUE TO BE FOR DIRECT SETTLEMENT BY THIS OFFICE. 3 COMP. GEN. 269, 372.

IT IS BELIEVED THE PROCEDURE HEREIN SET FORTH IS PREFERABLE TO THAT SUGGESTED IN YOUR LETTER IN THAT IT WILL AVOID ANY POSSIBLE UNNECESSARY DELAY IN THE PAYMENT OF DUPLICATE DRAFTS, WILL SAFEGUARD THE INTERESTS OF THE GOVERNMENT BY AN ADEQUATE ACCOUNTING, AND THUS WILL FULLY MEET THE OBJECTIONABLE FEATURES SET FORTH IN YOUR SUBMISSION.