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State has the unrestricted control over the custody and expenditure of the funds for such purposes, but has no absolute, unrestricted right, title, or interest in the moneys. When it has paid the money over to the States, the Federal Government has parted with its right to control the custody and disbursement of the funds, except in so far as proper accounting therefor may make necessary, and retains its right to supervise the disbursements and to hold the State responsible for lawful expenditure of the money.

2. Section 13 of the act provides that the State treasurer, as custodian of these moneys, “shall receive and provide for the proper custody and disbursements of all money paid to the State from said appropriation.” The Federal Government retains no control over the manner in which these funds shall be held in custody by the State treasurer. The State treasurer acts primarily as a State official and not as a United States official. He is presumably bonded as such, and must act according to State requirements, unless they conflict with accounting requirements of the United States. Conflict not appearing in the present matter, this question (2) is one which the Comptroller General of the United States is not required to decide.

3. I understand the question to relate merely to the holding of the moneys separate and apart from the general fund of the State that is subject to legislative appropriation, and not to the right of the State to appropriate these particular moneys to purposes other than those provided for by the Federal statute. For reasons given in answer to question 2, this office can not undertake to answer this question, I may say, however, that section 14 of the Federal statute provides that the moneys shall be paid out upon requisition of the State board, as reimbursement for expenditures already incurred, to such schools as are entitled to receive the money under the provisions of the act. The States are required to accept the provisions of the act.

4. This question, also, is one not now for decision by this office. The State is responsible to the Federal Government for the lawful expenditure of these moneys, but not for the manner in which they are held in custody by the State treasurer. The treasurer's responsibinty is to the State government, by which he is appointed custodian of these funds. See 2.

5. I think he is, but his responsibility is to the State, which in turn is responsible to the Federal Government for lawful expenditure of the funds under penalty of being refused further allotment if expenditures are in violation of the Federal statute.

6. No; except that proper accounting be provided for.

7. A withholding would be authorized on the next allotment as provided by section 16 of the Federal statute, in case the Federal

board should determine that the payments were not such as are contemplated by the statute.

8. No; only in case the moneys have not been expended, or are not being expended for the purposes and under the conditions of the act does the statute authorize the withholding of further payment to the State. Generally the Federal Government is not concerned with the manner in which the funds are held in custody by the treasurer, who is the State custodian and answerable to the State for his custodianship. See 2.

ACCOUNTING JURISDICTION OF THE COMPTROLLER GENERAL.

The power and duty conferred and imposed by law upon the General Account

ing Office in the settlement of accounts of disbursing officers of the Navy Department are in no way affected by any orders or instructions which may be issued by the Secretary of the Navy, nor are settlements made by the General Accounting Office subject to approval or review by the Secretary of the Navy, the balances certified by the Comptroller General of the United States being final and conclusive upon all executive branches of the

Government. After a disbursing officer has been advised by the General Accounting Office

of the indebtedness of an individual to the Government and instructed to withhold any payments to that individual until the indebtedness has been satisfied, the disbursing officer will be disallowed credit for all payments made to such debtor after receipt of such instructions from this office unless and until the amount of such indebtedness has been set off or adjusted, irrespective of any orders or instructions to such disbursing officer

from the head of his department. Comptroller General McCarl to the Secretary of the Navy, April 23, 1923:

By letter dated March 2, 1923, you request a full and complete statement relative to the overpayments to Joseph Tall, C. B. M., United States Navy (retired), on account of which the General Accounting Office by letter dated January 24, 1923, requested the supply officer, Naval Home, Philadelphia, to check the amount of $427.60 against the account of the said Joseph Tall.

It appears that Tall, after serving seven previous enlistments in the Navy, reenlisted August 7, 1916, and was transferred November 14, 1916, to class 1-D F. N. R.; that he was relieved from active duty March 19, 1919; that he was given a special order discharge with honorable conditions May 5, 1919, to reenlist in the United States Navy; that he reenlisted for four years May 6, 1919, in the regular Navy; and that he was placed on the retired list July 5, 1922.

After the reenlistment of May 6, 1919, following the special order discharge from the Fleet Naval Reserve, Tall continued to receive continuous-service pay at the rate of $9.68 per month and increase of pay under General Order No. 34 (citizenship) at the rate of $12.10

per month.

In a decision rendered to the Secretary of the Navy by the Comptroller of the Treasury May 19, 1919, 25 Comp. Dec., 884, it was held

that no credit could be allowed for continuous-service pay or pay under G. O. 34 in a case such as this; that is to say, under an enlistment in the Regular Navy after a special order discharge from the Fleet Naval Reserve to which transferred after more than 20 years' service in the Regular Navy and before the expiration of the enlistment in which serving at the time of transfer. This office ruled to the same effect in a decision to you dated February 27, 1922. Therefore Tall was not entitled to any increase of pay on account of continuous service or under G. O. 34 for any period subsequent to his reenlistment of May 6, 1919. He was paid on account of such items at the rate of ($9.68 plus $12.10) $21.78 per month as follows:

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Total amount of erroneous payments to December 31, 1920. Pay for August 2, 1920, not paid or credited

431. 24

4. 37

Net overpayment.----

--- 426. 87 It thus appears that the amount for which the supply officer should have been requested to make checkage covering the period from May 6, 1919, to December 21, 1920, is $426.87 instead of $427.60.

It is believed that the four preceding paragraphs have set forth all material facts relative to the matter involved. This information is furnished upon the assumption that it will be of assistance to you in administering the affairs of your department and in accordance with the policy of this office as indicated in the last paragraph of my letter of April 2, 1923, to you relative to the matter of checkages.

In the second paragraph of your letter requesting the information bereinbefore furnished you state that “the department has directed that the supply officer suspend action as to checkage against the pay of Tall pending further instruction from this department." This statement has reference to a letter dated March 2, 1923, from the Secretary of the Navy to the Governor, Naval Home, Philadelphia, as follows:

1. Pending further instructions from this department, no checkage will be made against the account of Joseph Tall, C. B. M., U. S. N., retired, as ordered by the Comptroller General in letter of 24 January 1923 (N-7679-WTL).

2 You will instruct the supply officer accordingly.

Irrespective of this action by the Secretary of the Navy in the matter, I have to advise that in the settlement of the accounts of the supply officer credit will be disallowed for any payments made by him to Tall after being advised by this office of Tall's indebtedness to the United States, unless and until the amount of such indebtedness shall have been set-off or adjusted..

Section 236, Revised Statutes, as amended by section 305 of the act of June 10, 1921, 42 Stat., 24, provides:

All claims and demands whatever by the Government of the United States or against it, and all accounts whatever in which the Government of the United States is concerned, either as debtor or creditor, shall be settled and adjusted in the General Accounting Office.

The power and duty conferred and imposed by law upon this office in the matter of the settlement of accounts of disbursing officers are in no way affected by any orders or instructions which may be issued by the Secretary of the Navy. Orders issued by commanding officers as contemplated under the provisions of section 285, Revised Statutes, are for consideration only for the purpose of determining which officer shall be held accountable—that is to say, whether the disbursing officer or the commanding officer—and settlements made by the General Accounting Office are not subject to approval or roview by the Secretary of the Navy. In this connection, attention is invited to section 304 of the act of June 10, 1921, 42 Stat., 24, in which it is specifically provided that the powers and duties vested in and imposed upon the General Accounting Office shall“ be exercised without direction from any other officer,” and that “the balances certified by the Comptroller General shall be final and conclusive upon the executive branch of the Government."

The right to withhold or apply undrawn pay of an officer or employee of the United States to reduce or offset the amount of an illegal payment or overpayment previously made was recognized and exercised long before the General Accounting Office was estab lished. See section 560, Digest of Decisions of the Second Comptroller, volume 3; also 21 Comp. Dec., 617. Such practice has been recognized by the courts, Gratiot v. United States, 15 Pet., 336, 370; McKright v. United States, 98 U. S., 179; Barry v. United States, 229 U. S., 47.

With reference particularly to balances found due in the settle ment of disbursing officers' accounts, attention is invited to the provision in section 1766, Revised Statutes, which reads:

No money shall be paid to any person for his compensation who is in arrears to the United States until he has accounted for and paid into the Treasury all sums for which he may be liable.

It has been the practice of this office not to unnecessarily embarrass officers by demands against their pay, but to afford them reasonablo

opportunity to obtain relief of Congress or by otherwise satisfactory arrangements make eventual satisfaction of disallowances in their accounts. It is believed there should be a continuance of this practice.

NAVAL RESERVE FORCE-ACTIVE DUTY PAY IN EXCESS OF

ORDERS.

Members of the Naval Reserve Force ordered to active duty for training for

a definite period fixed in the orders and who by reason of sickness are permitted to remain on board the vessel on which training beyond the authorized training period are not entitled to active duty pay beyond the date their period of training was to have terminated.

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Comptroller General McCarl to the Secretary of the Navy, April 23, 1923:

I have, by your direction, the letter of the Judge Advocate General of the Navy, dated April 12, 1923, requesting decision whether a member of the Naval Reserve Force who was directed to report and who reported for 15 days' active duty for training at sea from October 17, 1922, to November 1, 1922, and who was retained on board the vessel to which assigned until November 4, 1922, by reason of being on the sick list, is entitled to active duty pay to the date of detachment, viz, November 4, 1922.

The act of August 29, 1916, 39 Stat., 588, provides : All members of the Naval Reserve Force shall, when actively employed as set forth in this Act, be entitled to the same pay, allowances, gratuities, and other emoluments as officers and enlisted men of the naval service on active duty of corresponding rank or rating and of the same length of service.

The act of July 1, 1918, 40 Stat., 710, provides :

That the minimum active service required for maintaining the efficiency of a member of the Naval Reserve shall be two months during each term of enrollment and an attendance at not less than thirty-six drills during each year, or other equivalent duty. The active service may be in one period or in periods of not less than fifteen days each,

The same act, on page 712, provides:

Members of the Naval Reserve Force when employed in active service, ashore or afloat, under the Navy Department shall receive the same pay and allowances as received by the officers and enlisted men of the Regular Nary of the same rank, grades, or ratings and of the same length of service.

When an order is issued by competent authority to a member of the Naval Reserve Force directing him to report for a fixed period of active duty for training, the beginning and ending dates thereof being definitely determinable, the holding generally must be that the inclusive dates only can be construed as the period during which the member is on active duty under orders. Members ordered to perform duty for a fixed period at a fixed place can not be held to be on duty under those orders by reason of continuing to serve beyond

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