B-8121 January 30, 1940
B-8121: Jan 30, 1940
Sir: There was received January 18. An undated letter as follows: "This office is confronted with the problem of the disposition of monies received as refunds on returnable containers. For which payment has been made to a contractor under an agreement entered into at the time the material shipped on such reels was purchased. "This office is familiar with the requirements of 3618 Revised Statutes. The amount paid for these reels was more in the nature of a deposit than a payment therefor. It the reels were not Government property. Were the property of the contractor. Loaned to the Government under an agreement whereby a cash guarantee was posted for their return. "There is already involved in this connection an amount in excess of $25.
B-8121 January 30, 1940
The Honorable, The Secretary of the Interior.
There was received January 18, 1940, from the Administrator, The Bonneville Project, an undated letter as follows:
"This office is confronted with the problem of the disposition of monies received as refunds on returnable containers, particularly reels, for which payment has been made to a contractor under an agreement entered into at the time the material shipped on such reels was purchased.
"This office is familiar with the requirements of 3618 Revised Statutes, making mandatory the deposit to miscellaneous receipts of the proceeds from the sale of all Government property except as otherwise provided for in the statute. Inasmuch as the statute makes no specific exceptions in the case of refunds for returned containers, it would at first appear that such containers fall in the class of Government property, the proceeds from the sale of which must be deposited as miscellaneous receipts.
"The Bonneville Administration has, in the past, purchased large quantities of transmission line cable, all of which has been shipped on reels supplied by the contractor. The value of such reels has at no time been included in the unit price of the material purchased, but has been stated as a separate item and has been paid for as such. Actually, the amount paid for these reels was more in the nature of a deposit than a payment therefor, it the reels were not Government property, but were the property of the contractor, loaned to the Government under an agreement whereby a cash guarantee was posted for their return.
"When so considered, it would appear that 3618 Revised Statutes would not govern the disposition of the refunds received from the return of three reels.
"There is already involved in this connection an amount in excess of $25,000.00. It would appear to be contrary to good accounting principles to deprive the appropriation of such an amount, particularly when it is anticipated that similar temporary acquisition of other reels involving amounts even in excess of that stated above will probably be necessary. Such procedure would have the effect of increasing the apparent construction costs of all transmission lines being built by this Administration to the serious disadvantage of the Project when its costs are compared with these of private organizations. Such comparisons are inevitable and will receive wide attention as illustrating the relative efficiency of governmental projects as compared to private enterprise.
"Inasmuch as the deposit of the above mentioned receipts to the credit of the appropriation does to actually augment the existing appropriation, it is felt that such procedure would not be in contravention of the statutes.
"Your attention is invited to the fact that the reels must be returned to the shipping point at the Government's expense, in accordance with the provisions of existing contracts.
"Receipts from the return of empty reels are at the present time being held in special deposits until determination is made for their proper disposition. It is therefore respectfully requested that your office render an advance opinion as to the proper manner in which the above discussed refunds should be handled."
It has been the rule of the accounting officers of the Government for a number of years that when specific provision is made in purchase contracts or agreements for the return of containers to the contractor at a stipulated price, the amount paid originally for such containers is only a tentative charge against the appropriation involved, and the receipts from the return of said containers are for depositing to the credit of the appropriation from which tentative payment was made.
In line with the foregoing if, as stated in the letter, supra, the contracts or agreements under which the containers or reels came into the possession of the Government specifically provided for the refund of stipulated amounts upon their return, there will be no objection by this office to the amounts to refunded being deposited to the credit of the appropriation under which payment for the containers or reels was made.
Acting Comptroller General of the Untied States