As used in this part, the term

(a) "Agency" means each department and independent establishment in the executive branch of the Federal Government, but does not include government corporations;

(b) "Act" means the act entitled "An Act to provide for the purchase of bonds to cover civilian officers and employees and military personnel of the Federal Government," approved August 9, 1955 (Pub. Law 323, 84th Cong.; 69 Stat. 618; 6 U.S.C. 14);

(c) "Employee" means a civilian offcer or employee, or an individual within the category of military personnel, of an agency;

(d) "Head of the agency" and "head of each agency" includes a designee authorized pursuant to law by such head of the agency to act under this part for such head of the agency;

(e) "Bond" or "surety bond" includes individual, name schedule, blanket, position schedule and other types of surety bonds covering an employee or employees;

(f) An "individual bond" covers a single employee in a specified amount;

(g) A "name schedule bond" covers, in a specified amount, each employee whose name is listed in a schedule attached to such bond;

(h) A "position schedule bond" covers, in a specified amount, each employee who holds an office or position the title of which is listed in a schedule attached to such bond; and

(1) A "blanket bond" (1) covers a group of employees without the necessity of having attached to such bond any schedule or list of the names of the employees in such group or the titles of the offices or positions held by them, and (2) is either (i) a multiple penalty bond, which permits recovery in an amount equal to as many times the penalty for

The head of each agency shall obtain in accordance with the authority contained in the act and in conformity with this part, surety bonds covering those employees of such agency who are required by law or administrative ruling to be bonded.

§ 226.3 Corporate sureties required; underwriting limitation.

(a) Each bond shall be obtained only from a corporate surety company holding a certificate of authority from the Secretary of the Treasury under the Act of July 30, 1947 (6 U.S.C. 1-15), as an acceptable surety on Federal bonds.1

(b) The penal amount applicable to any employee covered by a bond executed by any such corporate surety company shall not exceed the underwriting limitation established for such company unless the excess is protected as provided by Treasury Department regulations contained in § 223.12 of this title. § 226.4 Selection and review of surety bond coverage.

(a) The head of each agency shall obtain appropriate surety bond coverage by selecting and obtaining the type or types of bonds which most economically will meet the bonding needs of such agency in the light of the number and type of employees to be bonded. To the maximum extent practicable, blanket and schedule bonds should be obtained in order to reduce both the cost of procurement of bonds under the act and under this part and the administrative expenses incident to the processing and filing thereof. The preceding sentence, however, does not preclude the procurement of individual bonds where individual bonds are clearly more economical or advantageous.

(b) If, in a particular location, region, or district, the number of employees to be bonded is, in the opinion of the head of the agency concerned, sufficient from

1 A list of these companies is published annually (Treasury Department, Fiscal Service, Form 356, Revised).

an operating standpoint to warrant the procurement of a blanket or schedule bond to cover such employees, such head of the agency shall obtain a separate blanket or schedule bond to cover such employees, unless he determines that, by reason of considerations of emonomy or administrative efficiency or both, it is in the best interests of the Federal Government to include such employees in a bond or bonds covering all employees of such agency or covering employees in more than one particular location, region, or district.

(c) Before the initial procurement of a bond or bonds under the Act and under this part and from time to time after such initial procurement (but not less frequently than every second year thereafter), the head of each agency shall review the number of employees of such agency, who are bonded, in order to decrease or increase the amounts of bond coverage if he deems such action appropriate and in order to eliminate the bonding of employees in those cases where he deems that no need therefor exists. In each review conducted after such initial procurement, the head of the agency also shall review the particular type or types of bonds procured for employees of such agency in order to determine whether the future procurement of such particular type or types of bonds best serves the needs of such agency and is in the best interests of the Federal Government or whether the procurement of another type or types of bonds would best accomplish such result. Nothing in this paragraph, however, shall be construed to authorize the elimination of the bonding of an employee who is required by statute to be bonded or to authorize a decrease to be made in the amount of any penalty which is fixed by statute. § 226.5 Congressional intent with respect to bonds of the "most economical type".

The act provides that each bond obtained under authority thereof shall be of the most economical type available for the number and type of employees to be bonded. As an aid to the head of each agency in the procurement of bonds under the act and under this part, the attention of each such head of the agency is directed to the following portion of the legislative history of the bonding bill (H.R. 4778, 84th Cong.) contained in the conference report on the bill

((1955) H. Rept. 1568, 84th Cong.) which sets forth the intent of the Congress with respect to this provision:

*** It is not the intent of this provision that a bond or bonds obtainable at the lowest premium rate per annum shall constitute in all cases a bond of the "most economcal type." Such would seem to be the case as a general rule, all other factors and considerations being equal. However, in many cases, variations in such factors and considerations as differences in the relative financial standing and reliability of the surety, the terms of the respective surety bond contracts available, and the number and types of personnel to be bonded may require, in the interests of the Federal Government other than in the strictly financial sense, the purchase of such bonds at premium rates per annum which are higher than the lowest premium rates per annum actually obtainable, *

§ 226.6 Bonds of which the penal sums are fixed by statute; bonds of certifying officers.

(a) Positions for which the penalty of the bond is fixed by statute may be included in a blanket, position schedule, name schedule, or other type of bond, provided the penalty applicable to such positions is equal to the statutory requirement.

(b) The head of each agency may provide bond coverage under this part for those employees who are the certifying officers of such agency (1) by obtaining a name schedule or position schedule bond limited to such certifying officers alone, (2) by including such certifying officers in a blanket or other type bond also covering other bonded employees, or (3) by obtaining individual bonds for such certifying officers where circumstances warrant.

§ 226.7

Bond obligee and condition.

(a) Each bond shall run solely in favor of the United States as obligee, except where a specific statutory provision requires that the bond shall run in favor of the United States and an additional obligee or in favor of an obligee other than the United States.

(b) Each bond shall be conditioned upon the faithful performance of the duties of the individual or individuals so bonded. Each bond also shall expressly provide that the term "faithful performance of the duties" shall include the proper accounting for all funds or property received by reason of the position or employment of the individual or individuals so bonded and the discharge

(a) The head of each agency shall fix the bond penalty applicable to employees and positions of such agency included in a bond procured under this part, except where the penalty is prescribed by statute or by other authority.

(b) The penalty in a blanket bond shall be in the minimum amount estimated by the head of the agency as sufficient to protect the interests of the United States. The penalty for each position designated in a schedule bond, in cases not specified by law or other authority, shall be fixed in the minimum amount consistent with the duties and degree of responsibility of the position. In fixing the penalties of bonds, due regard should be given to past loss experience and the effectiveness of related internal control.

(c) The bond penalties applicable to disbursing officers, assistant disbursing officers, agent officers, agent cashiers, and imprest fund cashiers operating under delegation by the Secretary of the Treasury or the Division of Disbursement. Treasury Department, shall be fixed only with the concurrence of the Chief Disbursing Officer, Treasury Department.

§ 226.9 Bond premium period.

The bond premium may cover a period not exceeding two years. In view of the economies to be derived, premiums should be paid for a period of two years to the extent funds are available, except where a shorter period is more advantageous to the Federal Government. § 226.10

Procurement of new bond

coverage.

The head of each agency shall procure under the act and under this part new bond coverage at least every two years. Timely steps should be taken for such procurement in advance of the expiration of the prior premium period.

§ 226.11 Advertising for proposals for furnishing of bonds.

(a) If, in the opinion of the head of the agency concerned, the premium cost

for any bond procured under the act and under this part will exceed the rate of $150 per annum, such head of the agency shall procure such bond only after advertising for proposals for the furnishing of such bond.

(b) The following recognized methods of advertising are examples of appropriate methods of advertising under this part: Publication in the FEDERAL REGISTER, publication in newspapers, posting of notices in public places, and the sending of invitations to bid to parties engaged in the business of furnishing surety bonds. In connection with the last method above specified, a notice sent to the head office of each company appearing on the Treasury Department list 2 of approved surety companies (other than those shown thereon having authority to do a reinsurance business only) will be regarded as a satisfactory method of advertising under this part.

as

(c) If, in the opinion of the head of the agency concerned, the premium cost for any bond will not exceed the rate of $150 per annum, procurement of the bond may be made without advertising, but informal bids should be solicited by the agency from at least three competitive sources.

(d) Specifications of alternate types of bond coverage may be included in invitations of the agency to bid in order to enable the head of the agency concerned to procure the most economical type of bond.

(e) Advertising for proposals for the furnishing of any bond will not be required under this part in any case in which the head of the agency concerned determines that the public exigencies require the immediate procurement of such bond.

§ 226.12 Place of execution of bonds by surety company.

Bonds procured under this part shall be executed by the surety company in a state or other jurisdiction wherein it has obtained a license to transact a fidelity and surety business and the place of such execution shall be set forth in the bond. This requirement shall not, however, preclude an agency from accepting bonds covering an employee or employees located where the surety is not licensed if

2 See footnote 1 to § 226.3 (a).

the bond is executed by the surety at its home office or within a state or other jurisdiction where it has obtained a license.

§ 226.13

Cancellation of bonds; limitations on recoveries thereunder.

(a) No bond procured under the act and under this part shall contain (1) any provision for cancellation of such bond at the option of the surety company prior to the expiration of the term of such bond, (2) any limitation upon the time within which a loss must be discovered to be recoverable under such bond, or (3) any limitation upon the time within which recovery may be made on account of any loss arising under such bond.

(b) In connection with the matter immediately foregoing, the attention of the head of each agency is directed to the provisions of 6 U.S.C. 5, as follows:

If, upon the statement of the account of any official of the United States, or of any officer disbursing or chargeable with public money, by the accounting officers, it shall thereby appear that he is indebted to the United States, and suit therefor shall not be instituted within five years after such statement of said account, the sureties on his bond shall not be liable for such indebtedness.

§ 226.15

Bonds procured before Jan

uary 1, 1956. (a) The head of each agency may permit the continuance in effect, until the expiration of its premium period, of any bond procured prior to January 1, 1956, with funds of such agency.

(b) In this connection, the attention of the head of each agency is directed to the fact that a provision of 6 U.S.C. 14, as amended by the act, operates to terminate the liability of a surety on a bond existing prior to the procurement of bond coverage under the act, for any default occurring subsequent to the date of the new coverage, regardless of whether an existing bond was paid for from agency funds or from the personal funds of the employee concerned. The above-mentioned provision is as follows:

Whenever any civilian officers or employees or military personnel are covered by a bond under authority of this section, the surety or sureties on any existing bond of any such civilian officers or employees or military personnel shall not be liable for any defaults occurring subsequent to the date of the new coverage.

(a) In order for the Secretary of the Treasury to transmit to the Congress on or before June 30, 1956, a comprehensive report of the operations of each agency as required by the act, the head of each agency procuring a bond or bonds under the act and under this part shall transmit to the Treasury Department, not later than June 1, 1956, an initial report with respect to the operations of such agency prior to April 30, 1956, under the act and under this part.

(b) Thereafter, in order for the Secretary of the Treasury to transmit to the Congress, on or before October 1 of each year, beginning with the year 1957, a comprehensive report of the operations of each agency as required by the act, the head of each agency procuring a bond or bonds under the act and under this part shall transmit to the Treasury Department, not later than August 15 of each year, beginning with the year 1957, a report with respect to the operations of such agency, during the preceding fiscal year, under the act and under this part.

(c) The initial report and each subsequent report of each agency shall contain the following information with respect to bonds obtained and related operations under the act and under this part:

(1) The number of employees of such agency covered by such bonds.

(2) The number and types of bonds procured by such agency and the individual penal sums thereof.

(3) The amounts of the premiums paid for bonds procured by such agency.

(4) The number of employees so bonded, by types of bonds and penal sums, classified by the duties for which bonded (such as disbursing, certifying, collecting).

(5) The amounts of losses covered by bonds procured by such agency and the number of employees involved, classified by type of duties. There should be shown in this connection the amounts of claims filed with surety companies, the amounts recovered, and the amounts of pending claims subject to adjustments by the surety companies.

(6) The direct costs of administration of the bond procurement and related operations of such agency.

(7) Such other information relating to the subject matter of the regulations

AUTHORITY: The provisions of this Part 250 issued under sec. 7, 64 Stat. 16, sec. 310, 69 Stat. 573, sec. 413, 72 Stat. 530, sec. 213, 76 Stat. 1111; 22 U.S.C. 1626, 16411, 16421, 50 U.S.C. App. 20171.

SOURCE: The provisions of this Part 250 contained in Department Circular 881, Revised, 31 F.R. 9418, July 9, 1966, unless otherwise noted.

§ 250.1 Scope of regulations.

The regulations in this part govern payment by the Department of the Treasury on awards made and certified to the Secretary of the Treasury by the Foreign Claims Settlement Commission under the International Claims Settle

The forms referred to in §§ 250.3 and 250.4 shall be used in connection with the payment of awards hereunder. Voucher applications for all payments will be mailed to awardees by the Investments Branch, Bureau of Accounts, Treasury Department, Washington, D.C. 20226, without request therefor by awardees.

§ 250.3 Voucher applications.

(a) Execution of voucher by person named. No payment of any part of the amount due on account of an award will be made unless a voucher application therefor properly executed (preferably in ink or indelible pencil) is received by the Treasury Department. A voucher application for each payment on account of an award must be signed by each person whose name appears on such voucher application as payee exactly as his name appears thereon, with the following two exceptions: (1) If only the name of the payee, and not his identity, has changed, the payee shall sign the voucher application with his changed name and return it to the Investments Branch, Bureau of Accounts, Treasury Department, Washington, D.C. 20226; the voucher application shall be accompanied by an explanatory affidavit and appropriate supporting documents, e.g., a copy of a marriage certificate or court order of change of name. (2) If the identity of the payee has changed, paragraph (b) hereof shall apply. A signature by mark (X) must be witnessed by two persons; the signature and address of each must appear on the voucher application. In the case of a corporation the voucher application must be signed by an appropriate officer thereof having authority to do so, whose authority to sign on behalf of the corporation must be duly certified to thereon over the seal of the corporation.

(b) Execution of voucher by other person. If the person named in the voucher application as payee is no longer the proper person to receive the payment by reason of assignment, incompetency or death, or of termination of a partnership or corporation named, the voucher