(B-25692)

STATUTORY CERTIFYING OFFICER BOND REQUIREMENTS-REGULATION ISSUANCE AUTHORITY; APPLICABILITY TO HEADS OF DEPARTMENTS

The requirement in section 2 of the act of December 29, 1941, that bonds be furnished by officers and employees who certify vouchers for payment in the executive branch of the Government is not a matter to be governed by regulations but by the provisions of the statute itself, and the authority vested by the act in the Secretary of the Treasury to prescribe the condition of such bonds, etc., does not include authority to issue regulations as to who shall or shall not be required to furnish bonds.

The words "officer or employee" as used in section 2 of the act of December 29, 1941, providing that a bond be furnished by the "officer or employee" who certifies a voucher for payment in the executive branch of the Government, refer to the persons who are authorized to certify vouchers by section 1 of the act which specifically includes the head of the department, etc., involved, so that when the heads of departments, etc., or Under Secretaries and Assistant Secretaries duly acting in their place or stead, function as certifying officers, they are required to furnish bonds.

Comptroller General Warren to the Secretary of State, May 2, 1942:

I have your letter of April 25, 1942, as follows:

Reference is made to the act of December 29, 1942 [1941] entitled "An act to fix the responsibility of disbursing and certifying officers, and for other purposes"; Treasury Department Circular No. 680 prescribing standards and conditions and administrative procedure as authorized by the act; and General Regulations No. 93, Revised, prescribing accounting procedures thereunder.

Paragraph c under section 2 of Treasury Department Circular No. 680 exempts heads of departments from filing bonds for certifying duties, and it is understood that this exemption has been interpreted to include Under Secretaries and Assistant Secretaries who act for the Secretary. General Regulations No. 93. Revised, does not specifically make any provision for the procedure to be followed in preparing vouchers for certification by officers who are exempted from filing bonds.

Please advise whether the Secretary and Under Secretary or the Assistant Secretaries of this Department are exempted from filing bonds, and if they are should vouchers be prepared for their signature over the title "Authorized Certifying Officer" as has been prescribed in General Regulations No. 93, Revised, for those officers and employees who are bonded,

The act of December 29, 1941, Public Law No. 389, 55 Stat. 875, 876, provides as follows:

That hereafter, notwithstanding the provisions of the act of August 23, 1912 (37 Stat. 375; 31 U. S. C. 82), and section 4 of Executive Order numbered 6166, dated June 10, 1933, disbursing officers under the executive branch of the Government shall (1) disburse moneys only upon, and in strict accordance with, vouchers duly certified by the head of the department, establishment, or agency concerned, or by an officer or employee thereof duly authorized in writing by such head to certify such vouchers; (2) make such examination of vouchers as may be necessary to ascertain whether they are in proper form, duly certified and approved, and correctly computed on the basis of the facts certified; and (3) be held accountable accordingly.

Sec. 2. The officer or employee certifying a voucher shall (1) be held responsible for the existence and correctness of the facts recited in the certificate or otherwise stated on the voucher or its supporting papers and for the legality of the proposed payment under the appropriation or fund involved; (2) be required to give bond to the United States, with good and sufficient surety approved by the Secretary of the Treasury, in such amount as may be determined by the head of the department, agency, or establishment concerned, pursuant to standards prescribed by the Secretary of the Treasury, and under such

conditions as may be prescribed by the Secretary of the Treasury; and (3) be held accountable for and required to make good to the United States the amount of any illegal, improper, or incorrect payment resulting from any false, inaccurate, or misleading certificate made by him, as well as for any payment prohibited by law or which did not represent a legal obligation under the appropriation or fund involved: Provided, That the Comptroller General may, in his discretion, relieve such certifying officer or employee of liability for any payment otherwise proper whenever he finds (1) that the certification was based on official records and that such certifying officer or employee did not know, and by reasonable diligence and inquiry could not have ascertained, the actual facts, or (2) that the obligation was incurred in good faith, that the payment was not contrary to any statutory provision specifically prohibiting payments of the character involved, and that the United States has received value for such payment: Provided further, That the Comptroller General shall relieve such certifying officer or employee of liability for an overpayment for transportation services made to any common carrier covered by title III, part II, section 322, of the Transportation Act of 1940, approved September 18, 1940, whenever he finds that the overpayment occurred solely because the administrative examination made prior to payment of the transportation bill did not include a verification of transportation rates, freight classifications, or landgrant deductions.

Sec. 3. The liability of certifying officers or employees shall be enforced in the same manner and to the same extent as now provided by law with respect to enforcement of the liability of disbursing and other accountable officers, and they shall have the right to apply for and obtain a decision by the Comptroller General on any question of law involved in a payment on any vouchers presented to them for certification.

Sec. 4. Nothing contained herein shall apply to the disbursing functions under the jurisdiction of the War Department, the Navy Department (including the Marine Corps), and the Panama Canal, except those pertaining to departmental salaries and expenses in the District of Columbia.

Sec. 5. This act shall become effective on the first day of the fourth month following the date of its enactment.

It is to be noted that the only provision in this act which vests any authority in the Secretary of the Treasury is that contained in section 2 (2) thereof and that the authority so vested is limited to the prescribing of the conditions of certifying officers' bonds and the standards with respect to the amounts thereof, and to the approving of the sureties thereon. By virtue of such authority the Acting Secretary of the Treasury issued certain regulations under date of February 16, 1942, Treasury Department Circular No. 680. Part I, section 2 (c) of the said regulations provides that the regulations "shall not be deemed to require the giving of a bond by the head of any department, establishment, or agency." If the intent or purpose of this provision was to relieve the heads of departments, establishments, or agencies of the necessity of furnishing bonds for the protection of the United States when they in fact act as certifying officers—that is, certify vouchers for payment by a disbursing officer under the executive branch of the Government-it is of no force or effect.

The act of December 29, 1941, does not authorize the Secretary of the Treasury or any other official of the Government to issue regulations with respect to who shall or who shall not be required to give bonds pursuant to the act; that is to say, the requirement that a bond be furnished is not a matter to be governed by regulations but is specifically provided for in the act itself. As indicated above, the

authority of the Secretary of the Treasury under the said act is limited to certain specified things; and, to be effective, any regulation prescribed pursuant to that authority must be within the limitations applicable thereto and not contrary to or in conflict with the provisions of the statute. Consequently, whether the heads of departments and Under Secretaries or Assistant Secretaries who act in their place and stead, who certify vouchers to disbursing officers in the executive branch of the Government for payment, are required to give bond pursuant to the act of December 29, 1941, is to be governed, not by regulations, but by the provisions of the statute itself.

The general purposes of the act of December 29, 1941, are to fix definitely the responsibilities of disbursing officers and certifying officers and to afford the Government complete bonded responsibility with respect to payments made by disbursing officers in the executive branch of the Government. The statute is to be construed or applied-consistent with its terms-in the light of those purposes.

Section 1 of the act relates, generally, to the duties and responsibilities of disbursing officers and sections 2 and 3 relate to the duties and responsibilities of certifying officers. Under section 1 it is provided that disbursing officers under the executive branch of the Government shall disburse only upon vouchers duly certified by the head of the department, establishment, or agency concerned, or by an officer or employee thereof duly authorized in writing by such head to certify such vouchers. The responsibility and accountability of such disbursing officers is specifically delimited.

Section 2 of the said act specifically provides that "The officer or employee certifying a voucher shall ** be required to give

bond to the United States." It should be noted here that the words "officer or employee" as used in section 2 refer to the person whe certifies a voucher whereas the words "officer or employee" as used in section 1 refer to persons designated by the head of the department, etc., involved, and, therefore, the words are not necessarily coextensive in their uses. The words "officer or employee" as used in section 2 refer to and are coextensive with the words "certifying officer and employee" as used, also, in the same section and in section 3. While the terms "officer and employee certifying a voucher" and "certifying officer or employee" are synonymous, they are not expressly and specifically defined in the statute. However, when section 2 of the statute is read in the light of section 1 it is at once apparent that a "certifying officer or employee" is a person upon whose certification of a voucher a disbursing officer of the Government is authorized to disburse public funds, subject, of course, to such responsibility and accountability as the statute places upon a disbursing officer. Such a person is specifically stated in section 1 of

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the act to be "the head of the department, establishment, or agency concerned, or an officer or employee thereof duly authorized in writing by such head to certify such vouchers." Thus, the act authorizes the head of a department, establishment, or agency to certify vouchers to disbursing officers in the executive branch of the Government and I assume it would not seriously be contended that the head of a department, etc., is not an "officer" of the Government. It would appear clear, therefore, that the head of an executive department who certifies a voucher to a disbursing officer for payment is an "officer certifying a voucher," within the meaning of section 2 of the act, and, as such, is required to give bond as provided therein. The provisions of the statute are all-inclusive with respect to certifying officers and I find nothing therein which by reasonable implication could be construed as excepting the heads of departments, who function as certifying officers, from its provisions.

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I find no reasonable basis for excluding the heads of departments, or Under Secretaries and Assistant Secretaries acting in their place and stead, from the provisions of section 2 of the act of December 29, 1941, in the event they certify vouchers to disbursing officers in the executive branch of the Government for payment-and one of those provisions is that they be required to give bond to the United States. Therefore, if the Secretary of State, the Under Secretary, or the Assistant Secretaries are to certify such vouchers for payment, it will be necessary that they give bonds to the United States as provided in the act of December 29, 1941.

(B-25583)

TRANSPORTATION—LAND-GRANT DEDUCTIONS—APPLICABILITY TO FREIGHT-FORWARDER SERVICES

Where the needs of the Government require special services which are not available at the published tariff rates of railroads but are procurable from freight forwarders, agreements may be made with the forwarders to furnish such special services at rates not subject to deduction as required otherwise by the land-grant statutes for service over land-grant railroads. 27 Comp. Dec. 1043, involving a case where the service of a freight forwarder was not requested by the Government and afforded no material or required service not available directly to the Government from railroads, distinguished.

Comptroller General Warren to the Secretary of War, May 4, 1942:

I have your letter of April 23, 1942, as follows:

In connection with the War Department production program, our experience since the outbreak of hostilities has demonstrated the mandatory and increasing need for expedited transportation of critical war materials moving in less-thancarload quantities.

Although between certain points the existing common carrier merchandise service is adequate for the needs of the War Department, in most cases serious delays are being encountered in moving less-than-carload quantities of Govern

ment war freight. This condition can be practically eliminated through the use of qualified freight forwarders who offer coordinated rail, truck and/or air transportation service for the handling of these less-than-carload shipments. The situation respecting available rail service may be further aggravated by the recently issued General Order No. 1 of the Office of Defense Transportation which prohibits, with certain exceptions, the movement of rail cars containing less than stated minimum loads. The probable result of this order will be to slow down merchandise traffic transported by rail rather than to expedite it; whereas it will have no such effect upon the operations of freight forwarders, as their traffic moves in carload lots. The general purpose of the order is to conserve the present car supply.

It has been the practice of the General Accounting Office to apply land-grant deductions to the charges assessed by the freight forwarders. It has been de termined by the forwarders that the application of the land-grant deductions reduces their revenue below their cost of operation. Studies compiled in the Office of the Chief of Transportation, Services of Supply, confirm their conclusion. This condition obviously precludes the handling of Government freight by the forwarders. The War Department proposes to enter into contracts with qualified freight forwarders, which contracts will provide for compensating the forwarders at their commercial rates, irrespective of the applicability of land-grant deductions. Such contracts in our judgment are justifiable not alone because of the type and character of the services which the forwarders perform, but also because of the very essential need of the War Department at this time for such expedited service.

There is attached hereto the draft of a clause which it is proposed to incorporate in the contracts to be entered into between the War Department and the freight forwarders. It is respectively requested that you advise this office whether, in the event of execution of contracts containing said clause, your office will approve the payment of charges on the basis described in that clause.

The proposed contract clause, copy of which was enclosed as mentioned above, is as follows:

This offer is based upon the understanding that the War Department if it shall accept the offer and utilize the services of the forwarder hereunder, will agree to and will pay, in consideration of the special services rendered by the forwarder, in respect of any shipment handled by the forwarder for the account of the War Department, the lowest rate normally charged to and paid by commercial shippers for a similar shipment between the same points, in no event to exceed the maximum rates stated in subparagraphs b and d of paragraph 7 hereof, notwithstanding that such shipment moved, in whole or in part, over a railroad or railroads which under land-grant Acts was or were aided in construction by a grant or grants of land on condition that such railroad or railroads should be and remain a public highway for the use of the United States, or over the line or lines of any carrier which has agreed to equalize its rates to the basis of those applicable under the land-grant statutes.

"General Order No. 1" to which you refer was issued March 23, 19-2. by the Director of Defense Transportation, for reasons stated, in part, to be

* in order to make available railway cars and other transportation facilities and equipment for the preferential transportation of material of war:

* and to expedite the movement of freight traffic, the attainment of which purposes is essential to the successful prosecution of the war, as contemplated by section 6 (8) of the Interstate Commerce Act, as amended:

Section 6 (8) of the Interstate Commerce Act (49 U. S. Code 6 (8)) provides that

In time of war

preference and precedence shall, upon demand of the President of the United States, be given, over all other traffic, for the transportation of material of war, and carriers shall adopt every means within their control to facilitate and expedite the military traffic.