recommendation for refund of the unexpended balance shall be submitted to the Chief of Engineers accompanied by

(1) A written demand from a proper representative of the local interests for the return of the unexpended balance.

(2) A certificate of the District Engineer, in duplicate, prepared in the following form:

I hereby certify that, under authority of section 4 of the River and Harbor Act approved March 4, 1915 (or sec. 11 of the River and Harbor Act approved March 3, 1925), the Secretary of War authorized the receipt from of the sum of $‒‒‒‒‒‒‒‒‒‒, to be used for the purpose of that the work for which the contribution (or advance) was made has been completed; that all liabilities on account thereof have been paid, and there are no unsettled claims; that the total cost properly chargeable to the contributed (or advanced) fund mentioned was $. --; and I recommend that the unexpended balance of said fund, amounting to $------- be repaid to the proper interest, the payment to be made to (give exact name or title of party to whom check should be drawn).

(c) If a contribution of funds by local interests is required by the law that adopted the project then the above certificate shall be modified to show the date of the act requiring the contribution. Approval of the Secretary of War for the acceptance of contribution of funds required by law is not necessary, and reference thereto shall not be made in the certificate.

(d) When the claim is forwarded an estimate of funds, E. D. Form no. 16, should be submitted for any part of the unexpended balance to be returned that may be in the Treasury cash account. The amount returned by will, for accounting purposes, be revoked.

864.8. Special deposits.—(a) All money received by disbursing or collecting officers of the War Department of the character enumerated below and moneys held in trust by an officer as agent of the Government, not otherwise provided for by law or Treasury regulation, which is subsequently returned in whole or in part to the depositor, shall upon receipt be deposited with the Treasurer of the United States to the official credit of the officer making the deposit and to an account to be designated as "Special deposits":

1. Money received in connection with sales where funds for payment are received in advance.

2. Money advanced by officers of the Army to cover the cost of transporting excess baggage.

3. Money advanced to cover the cost of any special work that may be requested of the War Department which is authorized by law or regulations except interdepartmental work under authority of law 31 U. S. C. 686. See par. 872.

4. Telegraph tolls collected for other lines where the Government receives the message from the sender and transmits it over Government and connecting lines.

(b) Disbursing or collecting officers should not attempt, by correspondence with the bank on which a check is drawn or otherwise, to cash same, but should at once deliver the check to the Treasurer of the United States or to a designated depository for collection and deposit with the Treasurer to the officer's official credit on account of "Special deposits."

(c) In case of the resignation, or transfer of a disbursing or collecting officer, his special deposit funds will be duly transferred to his successor with his regular funds.

864.9. Accounting for special deposits.-(a) Supplement No. 1, General Regulations No. 40, General Accounting Office, dated September 20, 1927, covers the

methods of receiving, scheduling, and summarizing remittances involving special deposit accounts, of transferring and refunding such deposits, and the use of various forms therein prescribed for the purpose. This regulation is applicable to river and harbor transactions.

(b) Special deposit accounts will be stated on accounts current rendered for regular accounts; the special deposits to be shown in a separate group thereon. Such consolidated accounts current will be designated "Regular and special deposit account current." Consolidated regular and special deposit accounts current shall be supported by schedules of disbursements and collections in the form and manner prescribed by General Regulation No. 43, dated May 22, 1925, and General Regulation No. 40, supplement No. 1, dated September 20, 1927.

(c) Any collections under special deposits shall be deposited with the Treasurer of the United States to the credit of the disbursing officer's applicable checking account and be so carried until funds are disposed of. When the work for which any deposit was made has been completed, the exact cost determined, and all adjustments made with the appropriations entitled to reimbursement, any unexpended balance to be refunded to the depositor will be charged direct to the special deposit, thus closing the account of such deposit.

864.10. Special deposits for plans loaned.-Standard Form No. 20 provides that where copies of plans are requested, a deposit shall be required to insure their return. Where the cost of plans does not justify the administrative work of handling the deposits and related correspondence, the provision referred to may be so changed that no deposit will be required to insure the return of the plans. There is no authority for requiring bidders to purchase plans of the proposed work.

DEBTS DUE THE UNITED STATES

865. Officers in arrears.—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. In all cases where the pay or salary of any person is withheld in pursuance of this section, the General Accounting Office, if required to do so by the party, his agent or attorney, shall report forthwith to the General Counsel for the Department of the Treasury the balance due, and the General Counsel shall, within 60 days thereafter, order suit to be commenced against such delinquent and his sureties (act, May 10, 1934; 5, U. S. C. 82).

865.1. Collection by set-off against amounts due.-(a) When any final judgment recovered against the United States duly allowed by legal authority, shall be presented to the Comptroller General for payment, and the plaintiff therein shall be indebted to the United States in any manner, whether as principal or surety, payment shall be withheld of an amount of such judgment or claim equal to the debt thus due to the United States. If the plaintiff denies his indebtedness to the United States, or refuses to consent to the set-off, payment shall be withheld of such further amount of such judgment, as will be sufficient to cover all legal charges and costs in prosecuting the debt of the United States to final judgment. If such debt is not already in suit, legal proceedings will be immediately commenced to enforce the same, and same shall be prosecuted to final judgment with all reasonable dispatch. If in such action judgment shall be rendered against the United States, or the amount recovered for debt and costs shall be less than the amount so withheld as before provided, the balance shall then be paid over to such plain

tiff with 6 percent interest thereon for the time it had been withheld from the plaintiff (acts, March 3, 1875, and March 3, 1933; 31 U. S. C. 227).

(b) The act of 1875 is not mandatory in its provisions to the extent that it precludes the right to make set-offs under the common law. (See 23 Comp. Dec. 68.) Every creditor has the right to apply the moneys of his debtor in his hands in the extinguishment of claims due him from the debtor. This is a common-law right and may be exercised on general principles without the aid of a statute. (See Barry v. United States, 229 U. S., 47; 15 Pet., 370; 98 U. S. 186; 4 Lawrence, First Comp. Dec. 504.) The exercising of the common-law right of the Government to apply moneys due a debtor from the Government in liquidation of a Government indebtedness is not dependent upon the debtor filing a claim for moneys otherwise due, and, should the debtor's final salary as a former Government employee not be sufficient for complete liquidation, request should be made upon the Civil Service Commission for application of the amount to his credit in the retirement fund, in whole or in part as the case might be, in further liquidation of the indebtedness.

(c) The authority and responsibility of the accounting officers of the Government to consider both debits and credits in the settlement of claims for and against the United States, that is, to apply an amount otherwise found due a claimant on one account in liquidation or reduction of an amount due on another account is not dependent on the act of March 3, 1875, 18 Stat. 481, as amended by the act of March 3, 1933, 47 Stat. 1516, except in the case of a judgment against the United States, but exists by virtue of section 305 of the Budget and Accounting Act of June 10, 1921, 42 Stat. 24. Where a contractor is indebted to the Government under one contract, the Government may offset without separate action an amount owing by that contractor under another contract (Barry v. United States, Supreme Court of the United States, 229 U. S. 47).

(d) There shall be no withholding or confiscation of the earned pay, salary, or emolument of any civil employee of the United States removed for cause except that if at the time of such removal such employee is indebted to the United States, any salary, pay or emolument accruing to such employee coming within the provisions of this section shall be applied in whole or in part to the satisfaction of any claim or indebtedness due to the United States (act, February 24, 1931; 5 U. S. C. 46a). This act is applicable where there is involved a removal for a cause of an employee who had been legally employed or appointed.

(e) (1) Whenever upon the statement of the account of any disbursing officer of the United States in the General Accounting Office credit shall have been disallowed for any payment to any person in the executive branch of the Government, otherwise entitled to compensation from the United States, or from any agency or instrumentality thereof, such compensation of the payee may be withheld until full reimbursement has been accomplished under such regulations as may be prescribed by the head of the department, branch, or independent establishment (including corporations) under which such payee is entitled to receive compensation. Nothing contained in this section shall be construed to repeal or in any way modify laws existing on May 26, 1936, relating to the collection of the indebtedness of accountable, or disbursing officers (May 26, 1936, c 452, 49 Stat. 1374; 5 U. S. C. 46b).

(2) Upon receipt of notice of disallowance in a disbursing officers' account for a payment to any officer or employee upon which an application for review is not pending, the District Engineer shall call upon such officer or employee for refund which may be accomplished by either cash payment or deduction on the pay roll, without reference to the Chief of Engineers, except where a protest

is made against such collection under circumstances which in the opinion of the District Engineer justifies submission of the matter to the Chief of Engineers for consideration. Refunds involving amounts which, due to the financial capacity, reasonably cannot be required in one payment or deduction, may be made by installments. In all cases a minimum of installments and full reimbursement shall be required as expeditiously as the circumstances justify. Deductions on pay rolls representing reimbursement in whole or in part should be effected as set forth in paragraphs 5, 9, and 10 of General Accounting Office General Regulation No. 87. It is important that references identifying the deduction should be complete.

(3) Before final payments to employees are made, disbursing officers shall determine that the employee is not indebted to the United States, that all transportation requests and Government property for which the employee is responsible have been returned or properly accounted for, and that there are no outstanding disallowances or exceptions against the employee. Final payment should not be made until complete adjustment has been effected of all indebtedness to the United States as shown by the record.

865.2. Priority of United States. (a) When any person indebted to the United States is insolvent, or whenever the estate of any deceased debtor, in the hands of executors or administrators, is insufficient to pay all the debts due from the deceased, the debts due the United States shall be first satisfied, and the priority established shall extend as well to cases in which a debtor, not having sufficient property to pay all his debts, makes a voluntary assignment thereof, or in which the estate and effects of an absconding, concealed, or absent debtor are attached by process of law, as to cases in which an act of bankruptcy is committed (Rev. Stat. 3466; 31 U. S. C. 191).

(b) Any executor, administrator or other person who pays other debts before satisfying debts due the United States shall become answerable in his own person and estate for such debts (31 U. S. C. 192).

(c) Any surety who pays to the United States, on behalf of his principal, debts due the United States, shall have like priority for the recovery and receipt of the moneys out of the estate and effects of the insolvent or deceased principal as is secured to the United States (31 U. S. C. 193).

865.3. Sale of estate for debt.-At every sale, on execution, at the suit of the United States of lands or tenements of a debtor, the United States may by such agent as the General Counsel for the Department of the Treasury shall appoint, become the purchaser thereof, but in no case shall the agent bid in behalf of the United States a greater amount than that of the judgment for which such estate may be exposed to sale, and the costs (31 U. S. C. 195).

865.4. Discharge of poor debtors.-The Secretary of the Treasury is empowered to effect the discharge of poor debtors to the United States under conditions prescribed by the law (Rev. Stat. 3471; 31 U. S. C. 196).

865.5. Refundments of overpayments.-(a) When a disbursing officer makes a refundment of an overpayment, the item should be taken up in an account for the proper station. If the funds pertain to a current appropriation they must be deposited in the Treasury on Treasury Form No. 1, revised. This may be done either by depositing directly into the Treasury on Form No. 1, revised, or by depositing to the officers' official credit on Treasury Form No. 6599 and then depositing on Form No. 1, revised, at the end of the month. If they do not pertain to a current appropriation, or if the officer has left the station where the overpayment was made, the funds may be deposited in his name to the credit of the Treasurer of the United States, or paid over to his successor who will make the deposit. Funds received from overpayments previously made shall be entered on the account current in the proper column. The

entries on the accompanying schedule of collections shall show by whom and to whom the overpayments were made, on what account, and refer to the voucher. This procedure is not applicable to a refundment of an overpayment made by deduction from a voucher payment to the debtor where the deduction of the overpayment automatically balances the proper fund.

(b) The responsibility of a public disbursing officer is not dependent upon the ability, or lack of ability, to recoup an improper payment made to a payee, and the accounting officers of the Government are without authority, generally, to relieve a disbursing officer from liability for an overpayment made to an officer of the Government who refuses, voluntarily, to refund the amount of such overpayment. The procedure in settling the accounts of and collecting final balances from disbursing officers who have made improper payments to brother officers, which the latter refuse to refund, must be the same as the procedure employed in settling and collecting final balances embracing other types of improper payments.

(c) The head of an executive department or establishment, and the President have ample authority to require the officers and employees in his department or establishment to satisfy their indebtedness to the United States arising from overpayments found by the accounting officers of the Government to have been made to them by disbursing officers, and this authority is in no manner vitiated by court rulings denying the right of arbitrarily stopping an officer's compensation without his consent, to satisfy such indebtedness (7 ‹Comp. Gen. 64).

DISCOUNTS

866. General. (a) Wherever practicable, a discount provision shall be made a consideration in prospective purchases or agreement, whether written or oral. The date from which the time limit is computed shall be based on the date of receipt of correct invoice, or the delivery of supplies whichever is the latest. (b) In the preparation of supply vouchers for purchases at a fixed price, not subject to discount for payment within a limited time, care should be taken by the vendors to cancel or line out any provision for such discount that may be printed on attached bills. Otherwise, it shall be necessary in each case, in order to meet the requirements of the accounting officers, to explain why advantage was not taken of the discount.

866.1. Statement of discounts.-(a) A statement of discounts obtained and lost submitted on a separate sheet should accompany the monthly money accounts showing discounts by voucher numbers. A brief but complete statement of the reasons for loss of any discounts should be furnished. Four columns shall be provided on this statement, one for voucher numbers, one for discounts taken, one for discounts lost, and one for the reasons for each loss. The form shall be prepared in district offices by available duplicating process. Whether or not there are any discounts obtained or lost during a month, the statement shall be furnished. If there is nothing to report, it shall be so stated. The purpose of the statement of discounts is to maintain in the office of the Chief of Engineers a record of discounts obtained and lost based on prompt payment. Discounts not based on prompt payment, such as trade discounts, etc., shall not be reported on the statement of discounts. The voucher or invoice shall in every case make it clear whether the discount offered is a discount for prompt payment or a trade discount. 5

(b) Bills for electricity, gas, etc., in connection with which an amount is saved the Government by payment within a fixed time, are discounts for prompt payment and should be reported on the statement whether the amount of the bill is stated in the gross, subject to deduction for prompt payment, or is