« ПредишнаНапред »
States as a shipper as effectively as to the ordinary shipper. See Mr. Wolverton's remarks at page 138 of the Congressional Record for January 13, 1948, preceding the favorable vote of the House upon the bill. In this connection, Mr. Wolverton cited the case of the United States v. Director General, as Agent, Baltimore of Ohio Railroad Company et al. (80 I. C. C. 143), that beng the case that had prompted the above-quoted recommendation from this Office. There was quoted, also, in the discussion of the pending bill in the House of Representatives one paragraph of a letter written by the Interstate Commerce Commission which indicates that the Commission presently favors the view that the United States should be bound by the limitation to the same extent as ordinary shippers.
It is the view of this Office, gained from years of experience in the audit of accounts involving transportation procured for the Government, and in the light of the fundamental difference between the required methods of doing business as respects shipments by private persons and those by the United States, that a limitation of 2 years, dating from the delivery or tender of delivery of the shipment involved, upon the right of the United States to recover excessive transportation charges by suit would result in an unfair advantage to the carriers and a considerable financial detriment to the Government. The reasons which lead to this conclusion may be cataloged in part, with some discussion, as follows:
1. The time consumed in the billing, administrative examination, payment, transmission of paid accounts to the General Accounting Office, recording, filing, and audit, would render recovery of overpayments by suit within 2 years from delivery or tender of delivery of the shipment involved, impracticable, if not impossible, in many instances.
The normal functions of the Government, in relation to the payment and handling of accounts for transportation, is such that ordinarily a period of approximately 12 months, sometimes longer, elapses between the delivery or tender of delivery of a shipment on a given bill of lading and the time the disbursing officer's voucher making payment thereon is reached for audit in the General Accounting Office. While as a usual thing carriers may not be said to be dilatory in presenting their bills for payment, experience has shown that in the past an average of 3 months has elapsed, with respect to transportation accounts generally, between the date of completion of the transportation service and the date of presentation of the bill therefor by the carrier to the administrative office for which the service was performed. To this must be added approximately 4 months' time which is allowed disbursing officers for the rendition of their accounts to the General Accounting Office. After receipt of such accounts in the General Accounting Office another 4 to 6 months will elapse incident to the necessary checking, filing, recording, and handling of the accounts before the vouchers are available to the transportation audit force.
The audit of the transportation accounts, when they are finally reached for audit, is confronted with difficulties and peculiarities palpably not experienced in commercial audits. In the first place, the Government's bills for transportation are paid without preliminary audit or rate examination. Pursuant to section 322 of the Transportation Act of 1940 (54 Stat. 898, 955), prescribing that payment for the transportation of property for the United States by common carriers subject to the Interstate Commerce Act "shall be made upon presentation of bills therefor, prior to audit or settlement by the General Accounting Office,” and the act of June 1, 1942 (56 Stat. 306), providing that no disbursing or certifying officer of the Unitel States shall be held liable for overpayments made for transportation furnished on Government bills of lading or transportation requests “when said overpayments are due to the use of improper transportation rates, classification, or the failure to deduct the proper amount under land-grant laws or equalization and other agreements,” the practice generally has been for the administrative departments or agencies to make payment of such bills without attempting in any manner to check or to verify the correctness of the rates or transportation classifications used by the carriers in claiming charges. The situation in this respect results usually in relatively prompt payment of carriers' bills but deprives the Government of the benefit of such checking as to rates and classifications as formerly had been made by the administrative offices prior to payment. In other words, the Government's internal audit of these bills is by statute (and properly so) a postaudit necessarily taking place many months after the deliveries.
In such audit, it not infrequently happens that the description of the particular article shipped, as appearing on the Government bill of lading, is not sufficiently definite to permit a determination of whether one or another of two or more ratings prescribed for different types of the article, so described generally, is applicable. The absence of a current administrative determination of the question leaves it for development or determination in connection with the audit in the General Accounting Office at a time long after the transportation has been performed, with resulting probable delay in developing the true fact through correspondence, research, etc. Comparable difficulties seem not likely to be encountered commercially due to the relatively limited scope of the shipments for any one commercial shipper as compared with the limitless operations of the United States as shipper and to the widely diversified nature of its shipments and the transportation facilities it employs. As merely illustrative of this situation it may be mentioned that in connection with a payment made in January 1947 for the transportation of a shipment delivered in October 1945 on a bill of lading which described the shipment as consisting simply of certain crates, boxes, and cartons of “L-ship material” it has been found necessary, in order properly to classify and rate the shipment, to request a report from the Government department concerned as to what the shipment actually comprised. The report was requested January 2, 1948, but reply has not been received to date. The carrier claimed and received payment in the amount of $1,222 on the shipment. Approximately 15 months elapsed between date of delivery and date of payment. In another instance a shipment delivered in December 1944 was described on the bill of lading as "Clothing, NOIBN,” actual weight 37,800 pounds, for which the carrier was paid in November 1946 charges in the amount of $1,995.84, on the basis of a rate of $5.28 per 100 pounds. At the time of the shipment there appeared to have been published a rate of $2.89 per 100 pounds, stated as being applicable on clothing “including knit clothing cotton and/or woolen” and “clothing waterproof.” Report was requested January 21, 1948, for information from the Government department concerned as to the exact character of the clothing shipped in order that it may be determined whether the lower rate may be applied. More than 3 years have elapsed since delivery of the shipment. In another instance payment made in February 1947 for two shipments made in August 1944, indicates that the carrier was paid twice for transportation furnished in one car. Investigation is being conducted to determine whether the record is in error. Again in June 1945 a payment was made for a shipment delivered at Newark, N. J.,, in March 1943. The shipment originated at a point in Louisiana and was consigned to Norfolk, Va. There was nothing to show why delivery was made at Newark, N. J., and a proper audit of the charges required correspondence to develop the facts. The carrier was called upon in January 1947 to furnish authority for the delivery. So far such information has not been furnished.
It has been observed that a considerable number of the transportation vouchers in a disbursing officer's account contain bills of lading that require investigative or research actions on the part of the examiner before the case may be disposed of. Such investigation or research must be conducted before the rates and other transportation data may be verified or determined correct or overpaid. Vouchers requiring such investigation come before the General Accounting Office month after month. Due to the complexity of the matters involved the margin of error in descriptive statements, weights, special services, privileges, etc., is rather large and it seems difficult or impracticable for those making the shipments to avoid the frequent occurrence of such inadequacies. Questions arise concerning the circumstance and performance of pick-up service at origin and delivery service at destination, both or either of which may affect directly the total cost to the Government for the transportation service that has been performed. In some instances carriers challenge matters or statements contained in refund demand notices and it is frequently necessary to refer the matter to administrative offices, shippers, consignees, or other authorized representatives for confirmation or denial of the carriers' statements. Some instances require the matter to be referred to other sources of information ; in other words, factual matters obtained from one source may require confirmation or amplification from other sources.
All of the investigative matters mentioned above are time-consuming and well may result, in particular instances, in a lapse of time exceeding that that would be permitted under a statutory period of limitation such as here proposed.
2. A literal application of the limitation here proposed, if enacted, could result in affording practically no time, in some instances, for recovery of audited over. payments.
The bill provides that the limitation shall begin to run from-or, that is, that the cause of action shall be deemed to accrue upon-delivery or tender of delivery of the shipment by the carrier, and not after. In some instances it might be that (lifficulty in establishing an adequate record for payment purposes, independently of any rating or classification factors, would delay payment to the carrier for
services for a considerable portion of the period of limitation prescribed and would thereby curtail the period remaining for recovery of any overpayment. Instances have been found in the past, as illustrated in two of the examples mentioned above, in which payment has been made at a date more than 2 years after delivery of the shipment involved, and there has been called to attention in connection with the probable effect of this bill that not less than 14 instances have been noted in the accounts of three separate disbursing officers for the months of December 1946 and January 1947-involving payments made to common carriers by motor vehicle or to freight forwarders-in which the lapsed time between the date of delivery and the date of payment ranged from approximately 12 months to approximately 20 months. Obviously, the 2-year limitation, if literally applied to such situations, would leave little time for a proper audit and recovery of overpayments. That the similar provision, currently effective with respect to rail carriers, is literally so applied as dating the limitation from the time of delivery or tender of delivery rather than from some later date is demonstrated by the cases of Pennsylvania Railroad Company v. Carolina Portland Cement Company (16 F. (20) 760), and Wisconsin Bridge and Iron Company v. Illinois Terminal Company (88 F. (20) 459).
It is proper, however, to note in this connection a material distinction, made elsewhere in the Interstate Commerce Act, as amended, between the United States and commercial shippers with respect to the requirements of the act as to the time prescribed for the payment of transportation charges. Thus, in section 3, paragraph (2) of said act (49 U. S. C. 3 (2)), it is provided that no carrier by railroad subject to the act shall deliver or relinquish possession at destination of any freight transported by it until all tariff rates and charges thereon have been paid, except under such rules and regulations as the Interstate Commerce Commission may prescribe to assure prompt payment and prevent unjust discrimination. Under the regulations prescribed pursuant to said provision only a very limited period of credit, extending usually for only a few days, is permitted to commercial shippers. The act, therefore, in fixing the date of delivery as the date of accrual of the cause of action, fixes for most practical purposes, with respect to commercial shippers, the date of payment of the transportation charges.
A proviso, however, in connection with the above provision, expressly stipulates that the said provision shall not be construed to prohibit any carrier from extending credit in connection with rates and charges on freight transported for the United States, and under the prevailing practice, as noted above, the time between delivery and payment with respect to Government shipments is, in some instances, considerable. Thus, to require that the period of limitations run from the date of delivery rather than from the date of payment would require a much more prompt audit following payment in the case of shipments for the Government-at least, with respect to a sizable number of shipments-than would be the case with respect to commercial shippers. See, in this connection, Southern Pacific Company v. United States (62 C. Cls. 391, 399), as quoted hereinabove, to the effect that the innumerable transactions involved in connection with the audit of charges for the transportation of Government property make it indispensable to establish a system of accounting and settlement therefor in some respects sui generis and inapplicable to the ordinary commercial transactions between carriers and private shippers. It would seem to be a manifestly unfair burden upon the Government, therefore, to require that it shall be limited to a period of 2 years from delivery, or tender of delivery, of shipments in the recovery of overpayments by suit.
3. To give the provisions of this bill the effect of prescribing a limitation upon actions of law by the United States to recover overcharges paid to common carriers by motor vehicle, common carriers by water, and freight forwarders would give rise either to (1) a disparity between the limitations prescribed for such carriers and the limitations applied to the rail carriers un the comparable provisions of section 16 (3) of the Interstate Commerce Act, as amended, or (2) to necessity for a change in the effect given said section 16 (3) from and after the effective date of the pending bill, if enacted, as compared with the effect given said section judicially heretofore.
Section 16 (3) was added to the Interstate Commerce Act by the Transportation Act of 1920, and following the decision of the Court of Claims in the case of Southern Pacific Company v. United States, supra, which was rendered in 1926, there have been numerous suits against the United States and counterclaims by the United States in the Court of Claims on which the court has awarded judgment, involving transportation transactions with railroads, as to which the period of time involved would have barred recovery if the limitation prescribed by section 16 (3) had been considered applicable. Also, at the present time, there are pending in the General Accounting Office at least 23 requests from the Department of Justice for reports concerning suits by railroads filed in the Court of Claims and aggregating approximately $3,000,000, a good portion of which apparently involves transportation services performed more than 2 years prior to the filing of petitions in said suits.
In view of the practice that thus has prevailed, and apparently is continuing, it would seem essential-if it is the purpose of the Congress at this time to require that the limitations imposed in this bill and in section 16 (3) shall be applicable to actions at law by and against the United States—to provide therefor in clear and specific terms and not leave the matter for determination in the surrounding conditions of doubt and uncertainty that otherwise would prevail. As indicated hereinbefore, however, it is the view of this Office that such a limitation, if applied to suits by and against the United States, will impose a considerable financial burden upon the Government that will be inescapable because of the exceptional audit conditions with which it is confronted.
While this Office, in the settlement and adjustment of claims and accounts, is making every effort to dispose of them promptly and within the time limitations of pertinent statutes where applicable, it is believed that if a limitation of 2 years, as proposed in this bill, is fixed for the recovery by the United States of overcharges by actions at law against the carriers, it will be impossible as a practical matter, due largely to circumstances and conditions beyond the control of this Office, to take, in the time so prescribed, with respect to a considerable volume of traffic, the preliminary action necessary to such suit. If any limitation upon such recovery by the United States is now to be fixed by statute it would seem proper to suggest for consideration in that connection the fact that a decidedly more lenient policy has been adopted by the Congress with respect to claims generally against the United States, insofar as action by the Office is concerned, it being noted in this connection that by the act of October 9, 1940 (54 Stat. 1061), there was barred, with respect to claims and demands cognizable by the General Accounting Office under section 305 of the Budget and Accounting Act, only such of said claims as should not "be received in said Office within ten full years after the date such claim first accrued.” It would seem that a comparable period might well be justified, if any is to be prescribed, for the Government's recovery of carriers' overcharges by actions at law. However, if any shorter period is to be fixed, there would appear ample justification for the view thatby reason of the intricacies peculiar to the adjustment of carriers' charges for transportation furnished the Government, as compared with the adjustments involved commercially, and the facility with which payment is permitted under section 322 of the Transportation Act of 1940—the limitations prescribed for the recovery by commercial shippers ought not to be applied to recoveries by the Government, and that in this respect the Government should be afforded at least 6 years for recovery by suit, that being the period that currently is afforded the rail carriers for collection in the Court of Claims.
Accordingly, it is the view of this Office that no period of less than 6 years should be prescribed as a limitation upon the right of the Government to recover, by suit, overcharges collected from it by common carriers.
LINDSAY C. WARREN, Comptroller General of the United States.
COMPTROLLER GENERAL OF THE UNITED STATES,
March 17, 1948.
MEMORANDUM ON GENERAL ACCOUNTING OFFICE AUDIT OF TRANSPORTATION PAYMENTS
MADE BY THE UNITED STATES
During the past 3 years I have been in communication with the House Ap. propriations Committee and with a number of individual Members oi the Congress relative to, and members of my staff have discussed with the staffs of the Senate and House Expenditures Committees, the problems which confronted the General Accounting Office in connection with the audit of transportation payments made for the account of the United States during the war years and the steps taken to insure collection back of the large volume of overpayments from appropriated funds which were made to common carriers. For reasons detailed below, it was found imperative to concentrate on the large bulk of overpayments which could be recovered while the carriers had funds with which to refund them and while unpaid bills owing to the carriers were available for set-off.
I have repeatedly stressed the enormity of the task confronting the General Accounting Office as well as the urgency of the situation. Also, I indicated my intense personal interest and my purpose to continue to keep the Congress currently informed in the matter. While we were, as pointed out below, compelled to adopt an accelerated procedure if our transportation audit was not to become as much as 10 or 12 years behind, it was never intended that this audit would constitute the final action to be taken by us. Rather, it was my intention, and it was so stated at that time, that after such accelerated audit of the millions of payments made during the war period had been accomplished within a reasonable time, the completed work be surveyed with a view to determining the effectiveness of that audit. This was in conformance with our established policy of constantly examining and appraising our operating methods and procedures in the interest of better performance of our duties.
As early as 1940 the General Accounting Office was called upon to, and did, evaluate its prospective work load of transportation audit work. Prior to that time payments for transportation services, freight and passenger, for the account of the United States were ordinarily subjected to a detailed and comprehensive audit by the agency for which the services were rendered and also to a subsequent and similar audit by us. Prior to that time, too, the Office audited and certified prior to payment carriers' bills submitted to it by the various agencies for reasons of doubt in particular cases. Due to what now would be considered a comparatively small volume of Government business, only a relatively few but experienced and highly qualified rate auditors were required for this work. However, during 1940—the same year when the defense program began, with its intensified expenditures and vastly increased Government business-Congress enacted the Transportation Act of 1940, which required disbursing officers to pay carriers' bills upon presentation and prior to audit, and placed upon the General Accounting Office the sole responsibility for determining and collecting back amounts overpaid to carriers. As a result of this act, there no longer existed administrative respons lity for auditing or verifying the rating and tariff elements of carriers' bills prior to payment, and this type of administrative audit was generally discontinued.
We fully appreciated that these circumstances would increase greatly both the volume and importance of the transportation audit work to be performed here. During 1940 strenuous efforts were made to obtain the services of properly qualified transportation-rate-audit personnel. A few such employees were furnished through the registers maintained by the Civil Service Commission, but even these employees were generally experienced only as to commercial rates and had to be trained as land-grant examiners, and the registers were soon exhausted. Unsuccessful efforts were made also to recruit rate personnel employed by carriers and by other Government agencies. The need for a greatly expanded transportation-rate force became acute with the advent of actual war in December 1941, since we were solely responsible for the effective audit of the war-swollen volume of business. Although during the early part of 1942 the transportation audit work of the Office was in a satisfactorily current condition, a further survey of prospective work volume and personnel needs was undertaken. It was determined that there was an acute shortage of personnel, either in the service of the Government or with the carriers, qualified capably to do this work; that it required years of experience before employees became technically proficient even in the simpler land-grant phases of the work; and that a new and hitherto untried approach to the problem was required. Up to this time there had never been undertaken by any land-grant billing or auditing organization anywhere a full-fledged program for training land-grant transportation-rate-audit personnel. For us, there was no other recourse.
Accordingly, as early as November 1942, we undertook a transportation-rateaudit-training program under which the General Accounting Office, due to dearth of people experienced in transportation-rate work, employed, of necessity, personnel who were qualified only for clerical services and attempted to develop them into transportation-rate-audit employees. Even these employees were difficult to recruit and up to December 1945 only about 1,200 employees had been recruited for training in this work. About 400 of these employees found the difficult and technical nature of the work beyond their capacities and left the General Accounting Office; also, there were contributing factors, such as our inability to secure clerical equipment, additional copies of tariff files, or space for use by any greatly expanded force.