B-136448, JUL. 31, 1958

B-136448, JUL. 31, 1958

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO A LETTER DATED JUNE 11, 1958, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY, REQUESTING THAT CLAIMS DUE THE UNITED STATES FOR DELINQUENT ROYALTIES ON ALL PRODUCTION REALIZED BY REASON OF DEFENSE MINERALS EXPLORATION ADMINISTRATION CONTRACTS BE SPECIFICALLY EXCEPTED FROM THE DEBT REPORTING REQUIREMENTS OF GENERAL REGULATIONS NO. 129, NOW 4 GAO 5000.

IT IS REPORTED THAT SUCH CLAIMS HAVE BEEN REPORTED DIRECTLY TO THE DEPARTMENT OF JUSTICE FOR APPROPRIATE COLLECTION ACTION AFTER REASONABLE ADMINISTRATIVE EFFORTS HAVE BEEN EXHAUSTED. HOWEVER, THAT DEPARTMENT HAS RECENTLY RETURNED THE LATEST DELINQUENT ROYALTY CLAIM REFERRAL WITH THE COMMENT THAT THE MATTER APPEARED TO BE ONE FOR REPORTING TO THE CLAIMS DIVISION OF OUR OFFICE. THE ADMINISTRATIVE ASSISTANT SECRETARY ADVISES THAT INFORMAL DISCUSSIONS WITH THE DEPARTMENT OF JUSTICE DISCLOSE THAT THE PRESENT REFERRAL PROCEDURE WOULD BE ACCEPTABLE TO THAT DEPARTMENT PROVIDED AN EXCEPTION TO THE REPORTING REQUIREMENT IN ACCORDANCE WITH 4 GAO 5050.30 (G) IS SPECIFICALLY AUTHORIZED BY OUR OFFICE.

WHILE NOT SPECIFICALLY STATED IN THE LETTER OF JUNE 11, 1958, REPRESENTATIVES OF YOUR DEPARTMENT INFORMALLY EXPRESSED THE VIEW THAT THE PRESENT PRACTICE SHOULD CONTINUE BECAUSE THESE PARTICULAR CASES WERE DIFFERENT FROM THE USUAL RUN OF DEBT CASES; PROMPT ACTION WAS OF PARTICULAR IMPORTANCE BECAUSE OF THE NATURE OF THE DEBT, THE TYPE OF DEBTOR INVOLVED AND THE POSSIBLE LACK OF FINANCIAL RESPONSIBILITY OF MANY OF THE DEBTORS; THE DEPARTMENT OF JUSTICE WAS GIVING EXCELLENT SERVICE AND WAS VERY SUCCESSFUL IN ITS COLLECTION EFFORTS; AND BECAUSE UNITED STATES ATTORNEYS WERE IN A POSITION TO MAKE A PERSONAL INVESTIGATION OF A DEBTOR'S FINANCIAL RESPONSIBILITY.

4 GAO 5000 PRESCRIBED THE PROCEDURES FOR REPORTING TO THE GENERAL ACCOUNTING OFFICE, PURSUANT TO 31 U.S.C. 71, DEBTS DETERMINED TO BE UNCOLLECTIBLE THROUGH ADMINISTRATIVE MEANS, EXCEPT IN THOSE INSTANCES WHERE SPECIFIC EXEMPTIONS ARE GRANTED UNDER PARAGRAPH 5050.30 (G) OF THAT TITLE OR WHERE SPECIFIC STATUTORY AUTHORITY EXISTS IN AN AGENCY FOR THE COMPROMISE, WAIVER, RELEASE, OR REDUCTION TO JUDGMENT OF SUCH DEBTS.

WE DO NOT BELIEVE THAT THE CLASS OF DEBTS HERE INVOLVED IS ESSENTIALLY DIFFERENT FROM OTHER CONTRACT DEBT MATTERS OR THAT THESE DEBTS INVOLVE SUCH UNIQUE OR DISTINCTIVE CHARACTERISTICS WHICH WOULD JUSTIFY THE GRANTING OF AN EXEMPTION UNDER 4 GAO 5050.30 (G). NEITHER ARE WE AWARE OF ANY FINAL SETTLEMENT AUTHORITY VESTED IN YOUR DEPARTMENT WITH RESPECT TO THIS CLASS OF DEBTS.

ACCORDINGLY, AND IN THE ABSENCE OF CONVINCING JUSTIFICATION TO SUPPORT THE GRANTING OF AN EXEMPTION UNDER 4 GAO 5050.30 (G), WE ARE OF THE VIEW THAT THIS CLASS OF DEBTS DETERMINED TO BE ADMINISTRATIVELY UNCOLLECTIBLE SHOULD BE REPORTED TO THIS OFFICE FOR FURTHER COLLECTION ACTION IN ACCORDANCE WITH THE PROVISIONS OF 4 GAO 5000.