CHAPTER EIGHT In addition, the division has responsibility for superintending the collection of debts. This responsibility stems from (1) section 304 (31 U.S.C. 93) of the Budget and Accounting Act, 1921, which incorporated by reference the authority formerly contained in section 4 of the act of July 31, 1894, to superintend the recovery of debts due the United States, and (2) the Federal Claims Collection Act of 1966 (31 U.S.C. 951-953). Under the latter act, the General Accounting Office is required to collect, compromise, or terminate collection action as appropriate, on all claims of the United States arising out of its activities or referred to it by another agency as being administratively uncollectible. CLAIMS General Section 305 of the Budget and Accounting Act, 1921, provides that all claims and demands whatever by the Government of the United States or against it shall be settled and adjusted in the General Accounting Office. The Claims Division, under the direction of James M. Campbell, Director, and John P. Gibbons, Deputy Director, has been assigned the responsibility for the adjudication and settlement of all claims by and against the United States that are cognizable by the General Accounting Office with the exception of claims by and against common carriers for transportation items. An organization chart of the Claims Division as of the close of the fiscal year is presented on page 122. The authority and responsibility vested in the Claims Division to adjudicate claims is not all-inclusive. Congress has enacted various laws authorizing designated Government agencies to settle specific classes of claims arising under programs administered exclusively by such agencies. Other laws have been enacted, however, which provide that payment of designated classes of obligations may be made only upon settlement by the General Accounting Office. These latter classes of obligations include claims for underpayment of wages under the Davis-Bacon Act (40 U.S.C. 276a-2) and the Contract Work Hours and Safety Standards Act (40 U.S.C. 330 (a)), as well as judgments against the United States. Claims Against the United States (Payment Claims) Generally, all Government agencies have the primary responsibility for paying the obligations incurred in connection with their operations. There are, however, two classes of claims which must be adjudicated by GAO before payment is made or denied. The first includes those in which there exists such reasonable doubt as to preclude action by the administrative agency in the absence of specific statutory authority, and second, those which the administrative agencies are specifically prohibited by law from paying prior to settlement by the General Accounting Office. In addition, the Claims Division considers all reclaims. of items previously denied by administrative agencies, unless it is determined by the agency involved that the administrative disallowance was clearly in error and can properly be corrected at the agency level. On July 1, 1970, the Claims Division had on hand. 1,400 claims against the United States and received 9,681 during the fiscal year 1971. During the same. period, 8,686 claims were certified for payment, amounting to $117,782,204. As of June 30, 1971, there was on hand a closing balance of 2,395 claims. In addition, since September 1970, final action was taken on 5,234 claims which were barred because of the 10year statute of limitations on the filing of claims in the General Accounting Office (31 U.S.C. 71a). Claims against the United States arise from every kind of Government transaction, and the claimants. include private citizens; Government personnel, both civilian and military; business entities; and State and foreign governments. The categories of claims include Government contracts; compensation due civilian employees, including overtime and premium pay; quarters and cost-of-living allowances; travel; transportation of household effects; per diem; allowances on change of official station; pay and allowances due military personnel; retired pay; compensation due deceased civilian officers and employees; pay due deceased members of the Armed Forces and the National Guard; as well as miscellaneous claims by Government personnel and public creditors. Perhaps one of the least known functions of the Claims Division is the processing of the necessary certifications for payment of the salary and expense allowance of the President of the United States. Section 102 of title 3, United States Code, provides that the President shall receive compensation in the aggregate amount of $200,000 a year, to be paid monthly, and in addition an expense allowance of $50,000 to assist in defraying expenses relating to or resulting from the discharge of his official duties. Near the end of each month, a certificate of settlement, payable to the President, is processed in the Payment Claims Section, Claims Division, General Accounting Office, setting forth the monthly salary of the President and the monthly portion of his expense allowance. After the certificate is reviewed, it is forwarded to the Bureau of Accounts of the Treasury Department for recording in the administrative accounts. In compliance with the provisions of 31 U.S.C. 82b, a bonded certifying officer of the Bureau of Accounts certifies payment to the Washington Regional Disbursing Office of the Division of Disbursement. The Washington Regional Disbursing Office then draws checks on the Treasurer of the United States in the name of the Chief Disbursing Officer, and the checks are delivered to the White House. The function performed by the Claims Division in settling claims against the United States clearly is one that is not only beneficial to the individual claimants involved, but also is in the best interest of the United States. It is beneficial to individual claimants in that it affords them the opportunity to receive a full, fair, and impartial review of administrative action in disallowing their claims at little or no expense to them. It is in the interest of the Government in that it reduces significantly the number of claims that otherwise would be the subject of formal legal proceedings instituted by claimants with the attendant expense, delays, and over crowding of court dockets. Similarly, GAO's claims settlement action is beneficial to the United States in that it reduces significantly the number of requests that otherwise would be made upon the Congress or individual Members thereof for the enactment of private legislation. Claims by the United States (Debt Claims) Regulations promulgated jointly by the Attorney General and the Comptroller General (4 CFR 101105) pursuant to the Federal Claims Collection Act of 1966 (31 U.S.C. 952) require that debts due the United States on which administrative agencies have taken appropriate collection action, but which cannot be compromised or on which collection action cannot be suspended or terminated in accordance with such joint regulations, be reported to the Claims Division for further collection action. In addition, numerous claims of the United States are referred to the Claims Division for adjudication when they involve doubt as to Z- 2373902 CLAIM NO. the amount due, the legal liability of the parties, or the action to be taken. Similarly, the Claims Division independently adjudicates claims submitted by debtors requesting review of disputed claims asserted against them by Government agencies. On July 1, 1970, GAO had on hand 27,919 claims by the United States and received 25,768 claims during fiscal year 1971. GAO collection proceedings yielded approximately $2.9 million on the 20,394 claims which were settled. Claims referred to GAO for collection are written off by the administrative agencies prior to referral to GAO. Claims currently on hand, totaling 33,293, have a face value of approximately $50 million. With the exception of 7,853 claims which are under collection, representing accounts receivable of about $5.4 million, the claims have been assigned to claims examiners and adjudicators for further processing. GAO processing procedures include attempts by various methods to locate debtors whose whereabouts are unknown, issuance of demands for payment, and development of information on the financial status of debtors. GAO also instructs Government agencies to John F. Smith... DEBTOR |