EXCHANGE RATE LOSSES Mr. SLACK. On page 3 of the supplemental justifications, Mr. Secretary, you show a listing of six countries and indicate the amount of exchange losses for each. Would you please supply for the record the amount included in the 1979 budget for each of these countries, the amount that you now anticipate will be required, and the percentage change of the foreign currency in relation to the dollar? That is for the record. Mr. READ. We will be glad to do so, sir. [The information follows:] EXCHANGE RATE GAINS Mr. SLACK. Are there any gains in other countries to offset some of these losses? Mr. READ. It is pretty much of a wash in the other countries, as near as we can determine. This estimate of $6 million was made last December. Actually there has been a slight improvement of the dollar's fortune since then, but to the very best of our knowledge, the other countries turn out to be a wash. It is a highly volatile situation, as you well know. CURRENCY LOSS IN VIETNAM Mr. SLACK. On page 4 of the justifications, you have given some detail with respect to the $7,892,000 requested for restoration of U.S. and Vietnamese currency losses. Would you please insert at this point in the record a copy of the Comptroller General's decision? Mr. READ. We will do so, Mr. Chairman. [The information follows:] DIGEST: 1. Sufficient evidence exists to support Treasury Department conclusion that United States currency in account of United States disbursing officer (USDO) was not destroyed prior to evacuation from Vietnam. Loss should be treated as physical loss. Adjustment for loss will be from current appropriation for disbursing function. 31 U.S.C. § 82a-1 (970). Loss may be distributed among agencies using USDO services on reimbursable basis. 2. Loss of Vietnam piasters, held by United States disbursing officer (USDC) and State Department officials, abandoned during evacuation should be treated as physical loss at official exchange rate at time of loss. Adjustment for loss will be from current appropriation for disbursing function. 31 U.S.C. § 82a-1 (1970). Los8 may be distributed among agencies using USDO services on reimbursable basis. 3. Deposits of Vietnam plasters by United States disbursing officer with Treasury of Vietnam and National Benk of Vietnam, should be treated as loss by exchange and charged to Guins and Deficiencies account in Treasury, pursuant to 31 U.S. C. § 492b and Treasury Circular No. 330, since deposits were for purposes of exchange operations. 4. 31 U.S.C. $ 4922-492c (970) and Treasury regula- This decision is in response to two related requests. Initially, the Fiscal Assistant Secretary, Department of the Treasury, asked our opinion regarding the proper procedures to be followed in accounting for (1) dollar currency purportedly destroyed; (2) Vietnam piaster currency left in Vietnam; and (3) piasters remaining in accounts with the Treasury of FUBURHUID DECISION .56 Corp. G..... B-186348 Vietnam and the National Bank of Vietnam, when the United States Embassy in Saigon, Vietnam, was closed and all personnel were evacuated in April 1975. : Specifically, during the evacuation of Americans and many Vietnamese from Vietnam, over $2.5 million in United States currency which was in the account of the United States Disbursing Officer (USDO), an employee of the Department of State, was purportedly destroyed by burning. Some of the bills which had been reported destroyed have since been received at a Federal Reserve Bank. Treasury believes the total amount left behind should be treated as a physical loss of funds, that the USDO's account should be adjusted for the loss, and that the adjustment should be charged to the appropriation available at the time of adjustment for the expense of the disbursing function, as provided in 31 U.S. C. § 82a-1 (1970). In this case, the current salary and expense appropriation of the Department of State would be charged, the disbursing officer having been an employee of that department. A substantial amount of piaster currency was also abandoned during the evacuation. The greater part of the piasters was held by the USDO. Lesser amounts were in the possession of officials of the Agency for International Development (AID) and the United States Information Agency (USIA). Treasury is of the opinion that the loss of these piasters should also be considered as a physical loss of funds, and that, as with the dollar currency, the United States dollar equivalent should be charged to the current salaries and expenses appropriation of State, in the case of the piasters left by the USDO, and to the applicable appropriations of AID and USIA for the amounts left behind by their employees, in order to adjust the accounts in which the losses occurred. Treasury believes that the exchange rate to be used to value the loss should be 755 piasters to the dollar, which was the official rate for all exchange transactions until the final day of American departure from Vietnam. In addition to the United States currency and the piaster bank notes left behind, there were substantial amounts of piasters on deposit in bank accounts in Vietnam in the name of the USDO. Accounts were maintained with the Treasury of Vietnam, the National Bank of Vietnam, and the Saigon Branch of the Bank of America. Prior to the closure of its Saigon Branch, the Bank of America turned over to the Central Bank all of its assets in Vietnam.1/ Treasury has taken the position 1/ Treasury states that it has not yet determined the propriety of this turnover by the Bank of America. In discussing this issue, therefore, we assume that any accountability for Bank of America piaster accounts will be subject to subsequent adjustment should there be a basis for recovery from the Bank of America. |