B-2253, SEPTEMBER 16, 1939, 19 COMP. GEN. 369

B-2253, SEPTEMBER 16, 1939, 19 COMP. GEN. 369

TRANSPORTATION - PUBLIC FUNDS IN CUSTODY OF GOVERNMENT EMPLOYEES - APPLICABILITY OF GOVERNMENT LOSSES IN SHIPMENT ACT THE TRANSFER OF FARM SECURITY ADMINISTRATION RESETTLEMENT PROJECT RENT COLLECTIONS TO BANKS OR GOVERNMENT DEPOSITARIES IN THE CUSTODY OF GOVERNMENT EMPLOYEES, BY ARMORED CAR, EXCEPT PURSUANT TO THE PROVISIONS OF THE GOVERNMENT LOSSES IN SHIPMENT ACT OF JULY 8, 1937, 50 STAT. 479, AND STATUTORY REGULATIONS PROMULGATED THEREUNDER, SHOULD NOT BE REGARDED AS AUTHORIZED BY DECISION OF APRIL 11, 1939, 18 COMP. GEN. 782, THE TERM "SHIPMENT" AS BROADLY DEFINED IN THE SAID ACT BEING INCLUSIVE OF THE TRANSFER OF VALUABLES IN THE CUSTODY OF GOVERNMENT EMPLOYEES.

COMPTROLLER GENERAL BROWN TO THE SECRETARY OF AGRICULTURE, SEPTEMBER 16, 1939:

A LETTER HAS BEEN RECEIVED FROM THE SECRETARY OF THE TREASURY AS FOLLOWS:

THE ATTENTION OF THIS OFFICE HAS BEEN DIRECTED TO THE LAST PARAGRAPH OF THE ACTING COMPTROLLER GENERAL'S DECISION, B-2253, TRANSMITTED TO THE HONORABLE SECRETARY OF AGRICULTURE UNDER DATE OF APRIL 11, 1939, WHICH PARAGRAPH READS AS FOLLOWS:

"THERE HAVE NOT BEEN OVERLOOKED IN CONNECTION WITH THE FOREGOING THE PROVISIONS OF THE GOVERNMENT LOSSES IN SHIPMENT ACT, APPROVED JULY 8, 1937, 50 STAT. 479, BUT IT IS NOT BELIEVED THAT THAT ACT IS FOR APPLICATION TO THE LOCAL TRANSMISSION OF PUBLIC FUNDS IN CUSTODY OF GOVERNMENT EMPLOYEES. CF. 17 COMP. GEN. 139; ID. 419.'

THE DECISION, B-2253 REFERRED TO IN THE FOREGOING PARAGRAPH STATED IN EFFECT THAT YOUR OFFICE IS NOT REQUIRED TO OBJECT TO THE USE OF FUNDS OF THE FARM SECURITY ADMINISTRATION FOR THE TRANSPORTATION OF RENTAL COLLECTIONS FROM PROJECTS TO DEPOSITARIES BY MEANS OF ARMORED CAR SERVICE, BASED UPON THE UNDERSTANDING THAT DURING THE MOVEMENT, THE COLLECTED FUNDS WILL BE IN THE CUSTODY OF GOVERNMENT EMPLOYEES.

THIS OFFICE IS OF THE VIEW THAT THE GOVERNMENT LOSSES IN SHIPMENT ACT IS FOR APPLICATION TO THE TRANSMISSION OF "VALUABLES," AS THAT TERM IS DEFINED IN SECTION 7 (A) OF THE SAID ACT, TO LOCAL DEPOSITARIES IN THE CUSTODY OF GOVERNMENT EMPLOYEES. THE GOVERNMENT LOSSES IN SHIPMENT ACT, AS STATED IN THE SENATE REPORT NO. 738, 75TH CONGRESS,ST SESSION, WAS ENACTED FOR THE PURPOSE OF DISCONTINUING THE INSURANCE SYSTEM COMPLETELY IN THE CASE OF SHIPMENT OF GOVERNMENT VALUABLES AND TO SUBSTITUTE THEREFOR TWO METHODS OF PROMPT DUPLICATION FOR REIMBURSEMENT FOR SUCH LOSS.

REFERENCE TO THE FORMER INSURANCE SYSTEM AS SET FORTH IN THE INSURANCE CONTRACT ENTERED INTO BY THE TREASURY WITH VARIOUS INSURANCE COMPANIES FOR THE FISCAL YEAR ENDING JUNE 30, 1938, THE ORIGINALS OF WHICH WERE FORWARDED TO YOUR OFFICE UNDER DATE OF AUGUST 3, 1937, DISCLOSES THAT SUCH CONTRACT COVERED THE SHIPMENT OF VALUABLES BY MESSENGER FROM, AMONG OTHER OFFICES, PROJECT MANAGEMENT OFFICES OF THE HOUSING DIVISION OF THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS TO FEDERAL RESERVE BANKS, BRANCHES, AGENCIES OR DEPOSITARY BANKS LOCATED IN THE SAME CITIES AS SUCH PROJECT MANAGEMENT OFFICES. ALSO PROVISION WAS MADE IN THE CONTRACT TO INCLUDE SHIPMENT BY MESSENGER BETWEEN OFFICES OF COLLECTORS AND DEPUTY COLLECTORS OF INTERNAL REVENUE OR CUSTOMS.

SECTION 7 (B) OF THE GOVERNMENT LOSSES IN SHIPMENT ACT READS AS FOLLOWS:

"THE TERM "SHIPMENT" MEANS THE TRANSPORTATION, OR THE EFFECTING OF TRANSPORTATION, OF VALUABLES, WITHOUT LIMITATION AS TO THE MEANS OR FACILITIES USED OR BY WHICH THE TRANSPORTATION IS EFFECTED OR THE PERSON TO WHOM IT IS MADE, AND INCLUDES, BUT IS NOT LIMITED TO, SHIPMENTS MADE TO ANY EXECUTIVE DEPARTMENT, INDEPENDENT ESTABLISHMENT, AGENCY, WHOLLY OR PARTLY OWNED CORPORATION, OFFICER, OR EMPLOYEE OF THE UNITED STATES, OR ANY PERSON ACTING ON HIS OR ITS BEHALF OR AT HIS OR ITS DIRECTION; " ( ITALICS SUPPLIED.)

FOR YOUR INFORMATION YOU ARE ADVISED THAT THE REGULATIONS CONTAINED IN TREASURY DEPARTMENT CIRCULAR NO. 576--- POST OFFICE DEPARTMENT CIRCULAR NO. REG. 1, COPY ATTACHED, WHICH WERE PRESCRIBED JOINTLY BY THE SECRETARY OF THE TREASURY AND THE POSTMASTER GENERAL AND APPROVED BY THE PRESIDENT JULY 16, 1937, PROVIDES IN SECTION 2 THAT "SHIPMENTS OF VALUABLES SHALL BE MADE (1) IN THE SAME MANNER AND AT SUCH TIME AS THOSE OF THE SAME CLASS OR KIND WERE MADE, WHEN INSURED, IMMEDIATELY PRECEDING THE EFFECTIVE DATE OF THESE REGULATIONS * * *.'

THEREFORE, IN VIEW OF THE PURPOSE OF THE GOVERNMENT LOSSES IN SHIPMENT ACT, I.E., TO SUPPLANT THE FORMER INSURANCE SYSTEM, THE METHODS OF TRANSPORTATION HERETOFORE CONSIDERED TO BE SHIPMENTS UNDER SUCH INSURANCE SYSTEM, THE BROAD DEFINITION OF THE TERM "SHIPMENT" IN THE SAID ACT, AND THE PROVISIONS OF THE JOINT CIRCULAR REFERRED TO HEREIN, THE TREASURY, AS ABOVE STATED, HAS TAKEN THE POSITION THAT THE TRANSPORTATION OF VALUABLES TO LOCAL DEPOSITARIES BY GOVERNMENT EMPLOYEES IS FOR COVERAGE UNDER THE GOVERNMENT LOSSES IN SHIPMENT ACT AND HAS SO ADVISED VARIOUS EXECUTIVE DEPARTMENTS, INDEPENDENT ESTABLISHMENTS, AGENCIES, AND WHOLLY OWNED CORPORATIONS COVERED THEREUNDER.

YOUR FURTHER CONSIDERATION AND ADVICE IN THE MATTER WILL BE APPRECIATED.

IN VIEW OF THIS INFORMATION THAT THE TREASURY INSURANCE CONTRACTS PRIOR TO THE GOVERNMENT LOSSES IN SHIPMENT ACT OF JULY 8, 1937, 50 STAT. 479, COVERED, INTER ALIA, THE TRANSFER OF VALUABLES BY MESSENGERS, THAT IS, IN THE CUSTODY OF GOVERNMENT EMPLOYEES, THE STATED POSITION OF THE TREASURY DEPARTMENT THAT SUCH METHOD WAS INTENDED TO BE INCLUDED IN THE TERM "SHIPMENT" AS BROADLY DEFINED IN THE GOVERNMENT LOSSES IN SHIPMENT ACT WOULD APPEAR CORRECT AND, ACCORDINGLY, YOU ARE ADVISED THAT THE STATEMENT IN THE LAST PARAGRAPH OF THE DECISION OF APRIL 11, 1939, SHOULD NOT BE REGARDED AS AUTHORITY FOR THE TRANSFER OF RESETTLEMENT PROJECT RENT COLLECTIONS TO BANKS OR GOVERNMENT DEPOSITARIES IN THE CUSTODY OF GOVERNMENT EMPLOYEES, BY ARMORED CAR, DISCUSSED IN THE DECISION, EXCEPT PURSUANT TO THE PROVISIONS OF THE GOVERNMENT LOSSES IN SHIPMENT ACT AND THE STATUTORY REGULATIONS PROMULGATED THEREUNDER.