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B-72105, NOV. 7, 1963

B-72105 Nov 07, 1963
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REPAIR AND FEES HAVE BEEN MADE THROUGH NORMAL VOUCHERING PROCEDURES AFTER REMISSION OF GROSS RENTAL COLLECTIONS TO THE VETERANS ADMINISTRATION AND THE DEPOSIT OF SUCH SUMS TO A LOAN GUARANTY REVOLVING FUND. THIS FUND WAS ESTABLISHED BY SECTION 7 OF THE ACT OF JULY 14. BROKERS HAVE NOT BEEN AUTHORIZED TO USE RENTAL INCOME FROM VETERANS ADMINISTRATION OWNED PROPERTIES TO PAY MAINTENANCE COSTS. SOME MANAGEMENT BROKERS ARE FINANCIALLY UNABLE TO ADVANCE THEIR OWN FUNDS TO PAY SUCH COSTS. IN ORDER TO RELIEVE THIS SITUATION IT IS PROPOSED THAT BROKERS BE ALLOWED TO PAY SUCH COSTS FROM RENTS RECEIVED WITH THE ATTENDANT REMISSION OF NET RATHER THAN GROSS RECEIPTS TO THE VETERANS ADMINISTRATION. IN A MEMORANDUM SUBMITTED BY YOUR GENERAL COUNSEL THE POINT IS MADE THAT THE CITED DECISION.

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B-72105, NOV. 7, 1963

TO ADMINISTRATOR, VETERANS ADMINISTRATION:

BY LETTER DATED SEPTEMBER 27, 1963, YOU REQUESTED OUR DECISION AS TO THE LEGALITY OF PERMITTING MANAGEMENT BROKERS TO PAY BILLS INCURRED BY THEM OUT OF RENTAL COLLECTIONS MADE BY SUCH BROKERS ON BEHALF OF THE VETERANS ADMINISTRATION.

IN THE CURRENT MANAGEMENT OF ACQUIRED PROPERTIES, REIMBURSEMENT TO BROKERS FOR ADVANCES PROPERLY MADE FOR MAINTENANCE, REPAIR AND FEES HAVE BEEN MADE THROUGH NORMAL VOUCHERING PROCEDURES AFTER REMISSION OF GROSS RENTAL COLLECTIONS TO THE VETERANS ADMINISTRATION AND THE DEPOSIT OF SUCH SUMS TO A LOAN GUARANTY REVOLVING FUND. THIS FUND WAS ESTABLISHED BY SECTION 7 OF THE ACT OF JULY 14, 1960, PUB.L. 86-665, 74 STAT. 533, 38 U.S.C. 1824 (SUPP. IV). BROKERS HAVE NOT BEEN AUTHORIZED TO USE RENTAL INCOME FROM VETERANS ADMINISTRATION OWNED PROPERTIES TO PAY MAINTENANCE COSTS. DUE TO THE SUBSTANTIAL INCREASE IN THE NUMBER OF PROPERTIES ACQUIRED BY THE VETERANS ADMINISTRATION, SOME MANAGEMENT BROKERS ARE FINANCIALLY UNABLE TO ADVANCE THEIR OWN FUNDS TO PAY SUCH COSTS. IN ORDER TO RELIEVE THIS SITUATION IT IS PROPOSED THAT BROKERS BE ALLOWED TO PAY SUCH COSTS FROM RENTS RECEIVED WITH THE ATTENDANT REMISSION OF NET RATHER THAN GROSS RECEIPTS TO THE VETERANS ADMINISTRATION. THIS PROCEDURE HAS NOT BEEN FOLLOWED HERETOFORE BECAUSE OF SECTION 3617, R.S. 31 U.S.C. 484, AND OUR DECISION TO ONE OF YOUR PREDECESSORS IN OFFICE B-72105, FEBRUARY 3, 1948, 27 COMP. GEN. 422.

IN A MEMORANDUM SUBMITTED BY YOUR GENERAL COUNSEL THE POINT IS MADE THAT THE CITED DECISION, WHICH HELD THAT RENTAL COLLECTIONS MUST BE PAID INTO MISCELLANEOUS RECEIPTS OF THE TREASURY WITHOUT ABATEMENT, IS NOT FOR APPLICATION IN THE PRESENT CONSIDERATION. HIS CONTENTION IS THAT SINCE THE CURRENT PROGRAM IS FINANCED FROM A REVOLVING FUND, THE REQUIREMENT OF 27 COMP. GEN. 422 THAT GROSS RECEIPTS SHALL BE DEPOSITED TO MISCELLANEOUS RECEIPTS DOES NOT APPLY.

THE LAW CODIFIED AT 31 U.S.C. 484 PROVIDES IN PERTINENT PART AS FOLLOWS:

"THE GROSS AMOUNT OF ALL MONEYS RECEIVED FROM WHATEVER SOURCE FOR THE USE OF THE UNITED STATES * * * SHALL BE PAID BY THE OFFICE OR AGENT RECEIVING THE SAME INTO THE TREASURY * * * WITHOUT ANY ABATEMENT OF DEDUCTION ON ACCOUNT OF SALARY, FEES, COSTS, CHARGES, EXPENSES, OR CLAIM OF ANY DESCRIPTION WHATEVER.'

IT IS TRUE THAT THE DECISION REPORTED AT 27 COMP. GEN. 422 DIRECTED DEPOSIT TO MISCELLANEOUS RECEIPTS AND IN THE CURRENT SITUATION THE RENTS RECEIVED ARE PROPERLY FOR DEPOSIT TO A REVOLVING FUND RATHER THAN TO MISCELLANEOUS RECEIPTS. THE DIRECTION TO MAKE THE DEPOSIT INVOLVED IN THAT CASE TO MISCELLANEOUS RECEIPTS WAS OCCASIONED BY THE FACT THAT SUCH A DEPOSIT WAS CORRECT ON THE FACTS THERE INVOLVED. HOWEVER, THE RULE THERE STATED--- AND FOLLOWED HERE--- IS ONE OF LONG STANDING AND IS NOT LIMITED TO CASES INVOLVING MISCELLANEOUS RECEIPTS DEPOSITS. FOR EXAMPLE, SEE OUR DECISION A-22805, FEBRUARY 21, 1931, 10 COMP. GEN. 382 AT 383 WHERE, IN REFERRING TO THE LANGUAGE FOUND AT 31 U.S.C. 484, IT WAS HELD: "THE WORDING OF THIS SECTION OF THE STATUTE IS INCLUSIVE AND ADMITS OF BUT ONE MEANING, NAMELY, THAT THE MONEY SHALL BE DEPOSITED TO THE CREDIT OF THE TREASURER OF THE UNITED STATES FOR COVERING INTO THE TREASURY TO THE CREDIT OF AN APPROPRIATION, TRUST OR SPECIAL (REVOLVING) FUND (BY REPAY COVERING WARRANT) OR TO THE CREDIT OF THE GENERAL FUND OF THE TREASURY, AS MISCELLANEOUS RECEIPTS.' IN OTHER WORDS, THE PROVISIONS OF 31 U.S.C. 484 HAVE BEEN CONSTRUED TO APPLY TO ALL DEPOSITS TO THE TREASURY INCLUDING THOSE FOR CREDIT TO REVOLVING FUNDS.

ACCORDINGLY, WHILE NOT QUESTIONING THE DESIRABILITY OF YOUR PROPOSAL, WE BELIEVE THAT IT SHOULD BE PRESENTED TO THE CONGRESS.

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