B-156010-O.M. March 16, 1965

B-156010-O.M. March 16, 1965

Indorsement Direcror, Civil Accounting and Auditing Division:

Returned. Although, as you point out, the Administrator of Veterans' Affairs and the Federal Housing Commissioner both, by statute, have broad discretionary authority in the management and diposition of property acquired incident to the guaranteeing or making of loans, the power and responsibility of each is with respect to the property acquired under their legislatively separate and distinct loan programs and not Government-wide in scope.

Of significance here is the fact that section 1820 of title 38, U.S. Code, prescribing the powers of the Administrator with respect to the Veterans Administration loan program, provides that the Administrator's transactions in "the acquisition, management, and disposition of property, real, personal, or mixed, incident to such activities and pursuant to this section, shall be final and conclusive upon all officers of the Government." That provision dispels any inference of administrative authority to transfer the management and disposal function, and responsibility for its excercise, with respect to property acquired under the Veterans Administration loan program.

We cannot read the providions of the National Housing and Veterans' Benefits acts referred to in your submission, those conferring broad authority on the Adminstrator and the Commissioner in the management and disposal of acquired properties, as also conferring the power on the Administrator to divest himself of the assigned function and enabling the Commissioner to assume responsibility for its performance in connection with the Veterans Administration program; and we are not aware of a legal basis for the administrative transfer of the function.

It may also be mentioned that there were considered herein the provisions of section 601 of the Economy Act of 1932 (31 U.S.C. 686), authorizing interdepartmental funishing of services and supplies under certain conditions, but as we stated in a decision of June 7, 1938, 17 Comp. Gen. 1054, "Neither do said provisions of law authorize a department or agency to transfer adminisstrative functions imposed upon it be law to another department or agency."

We are of the opinion that legislative authorization is necessary to implement the contemplated tranfer to the Federal Housing Administration of the function of managing and disposing of properties acquired by the Veterans Administration in the administration of its loan program.

Joseph Campbell

Comptroller General of the United States

Attachment

The Comptroller General

We are currently reviewing the feasibility of consolidation of property management activities of the Federal Housing Administration (FHA) and the Veterans Administration (VA) and are considering a recommendation to the effect that the Administrator, VA, transfer the management and custody of the VA-owned properties, acquired through its loan guaranty and direct loan programs, to the Commissioner, FHA, for management and disposal on a reimbursable basis. Question arises as to whether, under existing law, the VA could transfer, and the FHA could assume the properties for management and disposition.

The status references which appear to be involved are 12 U.S.C.A 1710(g), which sets forth the powers of the Commissioner, FHA, and 38 U.S.C. 1820, which defines the powers of the Administrator, VA, as follows:

12 U.S.C.A. Subchapter II - Mortgage Insurance

1710. Payment of insurance-Conveyance and assignment by mortgagee; debentures and certificates of claim; cost of foreclosure; direct conveyances.

"(g) *** the Commissioner shall have power to deal with complete, rent, renovate, modernize, insure, or sell for cash or credit, in his discretion, any properties conveyed to him in exchange for debentures and certificates of claim as provided in this section, ***."

38 U.S.C. Subchapter III - Administrative Provisions

1820. Powers of the Administrator

"(a) Notwithstanding the provision of any other law, with respect to matters arising by reason of this chapter, the Administrator may-

"(5) purchase at any sale, public or private, upon such terms and for such prices as he determines to be reasonable, and take title to, property, real, personal, or mixed; and similarly sell, at public or private sale, exchange, assign, convey, or otherwise dispose of any such property; and

"(6) complete, administer, operate, obtain and pay for insurance on, and maintain, renovate, repair, modernize, lease, or otherwise deal with any property acquired or held pursuant to this chapter. ***"

We believe that FHA could manage and dispose of properties for the account of VA, within the scope of the above-cited authorities. We contemplate that VA would transfer to FHA custody and management of its acquired properties only after the Administrator, VA, acquired absolute title to the properties. Upon sale of a VA-owned property by FHA, the Administrator, VA, would convey title directly to FHA's purchaser, and would reimburse FHA for its management and disposition expenses. We believe that a consolidated operation would result in substantial annual savings to the Government.

We note that H.R. 83, 89th Congress, 1st Session, proposes that the Director of the Bureau of the Budget survey VA functions to determine which VA functions duplicate mortgage insurance functions of the FHA which could be carried out by FHA. H.R. 83 also proposes an amendment to title V of the National Housing Act to provide for the performance by FHA of such additional functions, on a reimbursable basis.

The question raised by our audit staff is whether a transfer to FHA of the responsibility for management, and the authority for disposition, of VA- owned acquired properties, would require legislative action by the Congress or whether the function can be transferred under authority presently in existance.

A.T. Samuelson For Arthur Schoenhaut Deputy Director