B-117154, DECEMBER 31, 1953, 33 COMP. GEN. 285

B-117154, DECEMBER 31, 1953, 33 COMP. GEN. 285

FUNDS - REVOLVING - VETERANS ADMINISTRATION SUPPLY FUND - CAPITALIZATION - ADJUSTMENT THE REVOLVING SUPPLY FUND ESTABLISHED WITHIN THE VETERANS ADMINISTRATION BY THE SECOND INDEPENDENT OFFICES APPROPRIATION ACT, 1954, REQUIRES THE FUND TO BE CAPITALIZED WITH THE FAIR VALUE OF ALL SUPPLIES AND MATERIALS AND DEPOT STOCKS ON HAND OR ON ORDER AS OF JULY 1, 1953, AMONG WHICH WERE ITEMS PURCHASED WITH THE HOSPITAL AND DOMICILIARY FACILITIES NO-YEAR APPROPRIATION, THEREFORE IN ORDER TO AVOID A DUPLICATE CHARGE AGAINST SUCH APPROPRIATION, A LIABILITY MAY BE SET UP IN THE SUPPLY FUND IN AN AMOUNT EQUAL TO THE COST OF THE EQUIPMENT ON HAND OR ON ORDER PREVIOUSLY OBLIGATED UNDER THE CITED APPROPRIATION, TO BE LIQUIDATED BY DELIVERY, WITHOUT CHARGE, OF THE EQUIPMENT AS REQUIRED.

COMPTROLLER GENERAL WARREN TO THE ADMINISTRATOR OF VETERANS AFFAIRS, DECEMBER 31, 1953:

REFERENCE IS MADE TO LETTER OF SEPTEMBER 23, 1953, FROM THE DEPUTY ADMINISTRATOR, PRESENTING FOR CONSIDERATION AND APPROVAL THE INTERPRETATION PLACED ON THE SECOND INDEPENDENT OFFICES APPROPRIATION ACT, 1954, 67 STAT. 187, 193, INSOFAR AS CONCERNS THE AUTHORIZATION THEREIN FOR THE ESTABLISHMENT OF A REVOLVING SUPPLY FUND, AND THE ACTION PROPOSED IN CONNECTION THEREWITH WITH RESPECT TO CERTAIN SUPPLIES AND EQUIPMENT PURCHASED FROM THE HOSPITAL AND DOMICILIARY FACILITIES (HEREINAFTER REFERRED TO AS H AND DF) NO-YEAR APPROPRIATION.

UNDER THE TERMS OF THE CITED ACT, ALL SUPPLIES AND MATERIALS AND DEPOT STOCKS OF EQUIPMENT ON HAND OR ON ORDER AS OF JULY 1, 1953, ARE AUTHORIZED TO BE CAPITALIZED AT FAIR AND REASONABLE VALUES IN A REVOLVING SUPPLY FUND, WHICH SHALL BE AVAILABLE WITHOUT FISCAL YEAR LIMITATION FOR ALL EXPENSES NECESSARY FOR THE OPERATION AND MAINTENANCE OF A SUPPLY SYSTEM FOR THE VETERANS ADMINISTRATION. THE ACT FURTHER PROVIDES, IN PERTINENT PART, THAT THE SUPPLY FUND, SO CREATED, SHALL BE (1) REIMBURSED FOR THE COST OF ALL SERVICES, EQUIPMENT AND SUPPLIES FURNISHED THE USING APPROPRIATIONS AT RATES DETERMINED BY THE ADMINISTRATOR ON THE BASIS OF ESTIMATED OR ACTUAL DIRECT AND INDIRECT COST, AND (2) CREDIT WITH ADVANCES FROM APPROPRIATIONS TO WHICH SERVICES OR SUPPLIES ARE TO BE FURNISHED.

IT APPEARS THAT THE INVENTORY ON HAND OR ON ORDER AT JULY 1, 1953, WHICH IS TO BE CAPITALIZED AS A PART OF THE SUPPLY FUND, CONSISTS, IN PART, OF ITEMS PURCHASED WITH H AND DF FUNDS. IT IS INDICATED IN THE LETTER OF SEPTEMBER 23, THAT UNLESS AN ADJUSTMENT OR SETTLEMENT FOR SUCH ITEMS IS MADE, THE RESULT WILL BE A DUPLICATE CHARGE AGAINST THE FUNDS APPROPRIATED FOR THE HOSPITAL CONSTRUCTION PROGRAM, INCLUDING EQUIPMENT THEREFOR, IN THAT THE H AND DF FUND WILL BE CHARGED WHEN THESE ITEMS ARE DELIVERED FOR INSTALLATION IN THE HOSPITALS IN ADDITION TO THE CHARGE PREVIOUSLY MADE FOR THEIR ACQUISITION COST. ACCORDINGLY, TO AVOID THIS EFFECT, THE DEPUTY ADMINISTRATOR SUGGESTS THE FOLLOWING ALTERNATIVE PROPOSALS:

* * * REIMBURSEMENT OF THE H AND DF APPROPRIATION CAN BE ACCOMPLISHED IN TWO WAYS, (1) EITHER BY A GRADUAL LIQUIDATION OF THE AMOUNT DUE THE H AND DF APPROPRIATION BY DELIVERY OF EQUIPMENT FROM SUPPLY FUND STOCK WITHOUT TRANSFER OF FUNDS, OR (2) BY LIQUIDATING THE INDEBTEDNESS TO THE H AND DF APPROPRIATION BY OBLIGATING THE 1953 ADMINISTRATIVE APPROPRIATION AND TRANSFERRING THE REQUIRED FUNDS FROM THE LATTER TO THE FORMER APPROPRIATION.

ALSO, HE PROPOSES TO ADOPT THE SECOND METHOD REFERRED TO ABOVE AND REIMBURSE THE H AND DF APPROPRIATION FOR AL9 FUNDS ALLOTTED THEREFROM FOR THE PURCHASE OF DEPOT STOCKS BY OBLIGATING THE 1953 ADMINISTRATIVE APPROPRIATION AND TRANSFERRING THE FUNDS TO THE H AND DF APPROPRIATION.

THIS OFFICE CONCURS IN THE VIEW THAT THE CONGRESS DID NOT INTEND, BY THE ESTABLISHMENT OF THE SUPPLY FUND, TO REQUIRE THAT THE H AND DF APPROPRIATION SHOULD BE CHARGED AGAIN FOR EQUIPMENT ON HAND OR ON ORDER ON JULY 1, 1953, WHICH HAD BEEN OBLIGATED AGAINST THAT APPROPRIATION BUT HAD NOT BEEN DELIVERED TO H AND DF PROJECTS. HOWEVER, THERE APPEARS NO PROPER BASIS, AS PROPOSED, FOR REIMBURSING THE H AND DF APPROPRIATION BY TRANSFER OF FUNDS FROM THE 1953 ADMINISTRATIVE APPROPRIATION, BUT RATHER BY THE SUPPLY FUND. SUCH TRANSFER WOULD ALSO APPEAR TO BE IN CONTRAVENTION OF SECTION 1210 OF THE GENERAL APPROPRIATION ACT, 1951, PUBLIC LAW 759, 64 STAT. 595, APPROVED SEPTEMBER 6, 1950.

ACCORDINGLY, IN ACCORDANCE WITH ALTERNATE PLAN NO. (1), THERE SHOULD BE SET UP A LIABILITY IN THE SUPPLY FUND IN AN AMOUNT EQUAL TO THE COST OF EQUIPMENT ON HAND OR ON ORDER FOR STOCKS THAT WERE OBLIGATED UNDER THE H AND DF APPROPRIATION FOR USE IN THE HOSPITAL CONSTRUCTION PROGRAM. SUCH LIABILITY (ESTIMATED BY THE DEPUTY ADMINISTRATOR TO BE APPROXIMATELY $4,000,000) WOULD BE LIQUIDATED BY DELIVERY, WITHOUT CHARGE, OF EQUIPMENT AS REQUIRED FOR INSTALLATION IN THE HOSPITALS. THIS ACTION WOULD HAVE THE EFFECT OF PRECLUDING A DUPLICATION OF CHARGES AGAINST THE H AND DF APPROPRIATION AND, CONSISTENT WITH THE EVIDENT INTENT OF THE CONGRESS, WOULD LIMIT THE CAPITAL OF THE SUPPLY FUND TO THE NORMAL OPERATING REQUIREMENT OF THE VETERANS ADMINISTRATION.