GENERAL HEADQUARTERS
SUPREME COMMANDER FOR THE ALLIED POWERS

APO 500
26 June 1950

AG 400.12 (26 Jun 50) COM-B
(SCAPIN-2104)

MEMORANDUM FOR	JAPANESE GOVERNMENT.
Subject	Control of Obligations and Expenditures of Funds Appropriated for Requirements of the Occupation Forces

1. Rescissions:
a. Supreme Commander for the Allied Powers Memorandum for the Japanese Government, AG 400.12 (31 Mar 48) CE - GD, SCAPIN 1872, Subject: Expenditures from Funds Appropriated for Occupation Force Requirements, 31 March 1948 and changes 1872/1 thru 1872/11 thereto.
b. Supreme Commander for the Allied Powers Memorandum for the Japanese Government, AG 560 (4 Jun 49) GD, SCAPIN 6616-A, Subject: Funds for Operation of Ocean Weather Station “Tare” 4 June 1949.
c. Supreme Commander for the Allied Powers Memorandum for the Japanese Government, AG 230.14 (26 Jul 48) GD, SCAPIN 1932, Subject: Deviation Report on Employment of Japanese Civilian Guards and Firemen, 11 September 1948.
d. Supreme Commander for the Allied Powers Memorandum for the Japanese Government, A. G 400.12 (2 May 50) COM - B, SCAPIN 2093, Subject: Adoption of a Procurement Account Code to Control Funds Appropriated for Occupation Force Requirements, 2 May 1950.
2. References:
a. Manual of Budget and Fiscal Administration for Japanese Appropriated Funds, April 1950.
b. Supreme Commander for the Allied Powers Memorandum for the Japanese Government, AG 400.12 (29 Oct 46) CCS, SCAPIN 1299/8, Subject: Provision and Procurement of Japanese Communications Services, Facilities, Equipment, Material and Personnel, 11 April 1950.
c. Supreme Commander for the Allied Powers Memorandum for the Japanese Government, AG 701 (23 Aug 48) PH, SCAPIN 1949, Subject: Responsibilities of Japanese Government Relative to Physical Examination, Immunization, Medical Care, Hospitalization, and other Benefits for Japanese Nationals Employed for the Occupation Forces, 13 December 1948.
3. Purpose. This memorandum defines and limits the instruments which will be used by the Occupation Forces to authorize the obligation of Termination of War (Works) funds appropriated by the Japanese Government for the support of such forces and the instruments which authorize disbursement of those funds by the Japanese Government. Applicable instruments previously used have been retained and others have been added to implement the procedures established by reference 2a above.
4. Definition, of Terms:
a. The Termination of War appropriation. The Japanese TOW appropriation is that portion of the general account of the Japanese Budget appropriated by the Japanese Diet for the support of Occupation Forces activities. The annual budgetary requirements for support of the Occupation Forces in Japan during the next succeeding Japanese Fiscal Year, as approved by the Supreme Commander for the Allied Powers, will be submitted in connection with the regular budget for the Japanese Government for action by the Diet at its regular session during the month of December, preceding the Japanese Fiscal Year. The TOW appropriation for such requirements will be established and maintained separately and distinctly from all other appropriations contained in the Japanese General Budget.
b. Obligation - The Yen amount of an order placed, a contract awarded, a service received, or any other transaction which legally reserves an appropriation or fund for expenditure.
c. Expenditure - The Yen amount of vouchers or other documents which have been entered in fiscal accounts in liquidation of and as final charges against appropriation or funds obligations.
d. Fiscal Officer (Occupation Forces) - The individual at a command (operation agency) or field installation responsible for the performance of fiscal functions thereat. This individual is sometimes referred to as “Budget and Fiscal Officer.”
e. Obligating Officer (Occupation Forces) - A fiscal officer or any other officer empowerer by a fiscal officer to obligate funds within specified limitations. Obligating officers will normally function at small posts or camps which do not have a fiscal station.
f. Certifying Officer (Occupation Forces) - A person who attests to the existence of facts legally required to support a payment from an appropriation or fund. (Includes Fiscal Officer, Obligating Officer, Purchasing and Contracting Officer, Unit Labor Officer, Receiving Officer).
g. Fiscal Station (Occupation Forces) - Any installation to which a station number is assigned for use in connection with administrative functions relative to the furnishing of supplies or services to the Occupation Forces.
h. Discount - Any deduction, from the list or contract price, offered by the vendor for payment of the account within a specified period of time, usually ranging from within ten (10) days up to sixty (60) days after date of invoice.
i. Procurement Instrument - Any one of the three (3) forms specified in par 7 below, or Proc Form 136 - A and 140. A procurement instrument directs the Japanese Government (Special Procurement Agency) to enter into contractual negotiations with a qualified vendor or contractor for certain supplies, materials, real estate and/or services, within specifications outlined in the instrument.
5. Responsibilities for Control of Obligations and Expenditures.
a. Obiligations against the TOW (Works) appropriation can be made only on the basis of authorization by fiscal, or obligating officers of the Occupation Forces, through the use of procurement instruments specified in paragraph 7 below, except for those items covered in par 8d and 8e below.
b. Expenditure of funds from the TOW (Works) appropriation to liquidate any obligation incurred by the Occupation Forces can be made by properly designated disbursing officers of the Japanese Government or their agents only upon procurement receipts (par 7) or expenditure documents (par 8 below), which contain a certificate of availability of funds and accounting classification over the signature of a fiscal or obligating officer of the Occupation Forces.
6. Procedures for Obligating and Expending TOW (Works) Appropriation.
a. Requiremenst for support of the Occupation Forces will be transmitted to the responsible procurement agency of the Japanese Government by means of “Procurement Instruments,” (par 7 below). Procurement Instruments are directives to the Japanese Government to initiate action for the procurement of certain labor, supplies, real estate, materials and/or services according to specifications established by the Occupation Forces and to arrange for delivery of such labor, supplies, materials and/or services to an individual or agency at a specific time or within a given period. Procurement instruments will not be construed as obligating documents nor as expenditure documents in any sense.
b. Procurement of utilities, services and maintenance, and plant or operating facilities necessary to provide utilities or services as demanded will be accomplished as follows:
(1) Utilities and Services:
(a) Procurement instruments and receipts for utilities or services, including public carrier and communications services, will be executed for only the utility or service.
(b) The acquisition of special additional plant, equipment, real estate and supplies; the construction or rehabilitation and maintenance of structure and equipment as may be required in connection with a service or utility furnished by the Japanese Government to meet a requirement for the Occupation Forces, will be covered by separate and specific procurement instruments.
(c) Procurement instruments issued under the provisions of par 6b (1) (b) above are issued to the extent only that the existing facilities, which are available to the agent of the Japanese Government, are inadequate to provide the utilities or services required.
(2) Maintenance. All maintenance of equipment, structures, roads and other facilities accomplished by the Japanese Government in response to an occupation force requirement will be covered by a specific procurement instrument (GPA Form No. 1 or GPA Form No. 8) or by properly executed work orders issued against an appropriate procurement instrument, approved and issued for a specific facility, area or service. Acknowledgement of accomplishment of maintenance will be made on GPA Form 2 or GPA Form 5 as appropriate.
c. Disbursing officers of the Japanese Government will:
(1) Maintain a specimen signature file of the fiscal and/or obligating officers of the Occupation Forces authorized to certify to the availability of funds on obligating documents (Incl 1).
(2) Verify the signatures appearing on each instrument containing the certificate of the fiscal or obligating officer.
(3) Insure that payments from the TOW (Works) appropriation are authorized under terms of procurement instruments and/or obligating documents which contain the Certificate of Sufficiency (Availability) of funds certified to by a fiscal or obligating officer of the Occupation Forces whose signature is on record in the office of such disbursing officer.
(4) Pay not in the excess of the amounts shown on the procurement receipt or expenditure voucher certifying to the availability of funds. If the payroll or the vendor’s invoice is in an amount less than the amounts stated in the instrument containing the certification, the lesser amount will be paid.
(5) Verify receipts furnished by the representatives of the Occupation Forces for supplies, real estate rental, construction, and/or services rendered with the vendor’s invoice and, where the receipt for such supplies, real estate rental, construction and/or services furnished is in an amount less than the invoice, will pay an amount not greater than that contained in the receipt of the Occupation Forces.
(6) Insure that vendors submit invoices for deliveries made and/or services rendered immediately upon receipt or notification from the Occupation Forces that the deliveries have been made or the services have been furnished.
(7) Make payment immediately upon receipt of the necessary procurement receipt or expenditure voucher; to ascertain that all transactions which authorize discounts for prompt payment are paid within the descount period; and to submit to the fiscal or obligating officer who certified the instrument for payment, a statement as to the reason for the loss of the discount when such discount is forfeited.
(8) Furnish to the fiscal or obligating officer whose certificate appears thereon, a copy of each of the documents (par 8 below) upon which payment was made, prepared in the manner outlined by the Occupation Forces. These documents shall be transmitted immediately after payment has been made.
(9) Furnish the Reconciliation Unit, Office of Comptroller, General Headquarters, FEC, SCAP, a Schedule of Disbursements for personal services (Object Class 01) (Incl 2) and a Schedule of Disbursements for other than personal services (Incl 3) immediately after the close of business on the day on which such disbursements occur. Entries on the schedule of disbursements (Incl 3) for communications services will be shown as follows for columns 3, 4 and 5.
Contract No. Delivery or Purchase Order No. P. D. No.
SCAPIN 1299/ - GPA Form 5 (Month & Year) -
d. The Japanese Government will furnish the Supreme Commander for the Allied Powers a list of the names and locations of the various disbursing officers making disbursements of TOW funds for the purpose of establishing a disbursing officers’ station list. Changes in locations, deletions or additions to the original submission shall be reported as they occur.
7. Procurement Instruments. The term “procurement instrument” as used herein refers to the following three instruments only:
a. Procurement Demand, GPA Form 1. The Eighth United States Army is the only authorized agency to issue these demands. The method of issue is as prescribed by the Commanding General, Eighth United States Army. Except for limited purposes as defined in paragraphs b and c below, the Procurement Demand, GPA Form 1, is the only instrument authorized for procurement of real estate, technical floor space, construction, rehabilitation, maintenance, equipment, services, supplies, or any other requirement for the support of the Occupation Forces. Technical floor space is defined as indoor or outdoor space required by the Occupation Forces for the installation, operation, maintenance, control or supervision of Occupation Force-owned or indigenous equipment, for which direct responsibility has been retained by the Occupation Forces. Indoor or outdoor space incident to the provision of a service and utilized for the installation, operation, maintenance, control or supervision of Occupation Force-owned or indigenous equipment, for which direct operational responsibility has been assigned by procurement instrument to the Japanese Government, does not require separate procurement unless its provision is of the nature referred to in par 6b (1) (b). Charges for providing the services involved will include rental of essential space unless the capital cost has been covered in separate procurement instrument and receipt. Acknowledgment of accomplishment of Procurement Demand, GPA Form 1, in whole or in part, is indicated by receipt on GPA Form 2.
b. Communication Order, GPA Form 8. This is a special form of procurement instrument served on the Japanese Government through the Japanese Bureau or Ministry of Telecommunications by the designated Signal representative of the Supreme Commander for the Allied Powers or Commanding General, Eighth United States Army, for the procurement of communications services, materials, equipment, technical personnel and construction incident to installation, maintenance or operation of communications equipment. It will not be used for construction, maintenance or acquisition of buildings, real estate (except cable of wire right of ways), water, heat power or sewage, as such. Acknowledgment of accomplishment of Communications Orders (GPA Form 8), in the whole or in part, is indicated by receipt on GPA Form 5.
c. Labor Requisition, Labor Form 1. This is a special form of procurement instrument for labor required by the Occupation Forces, but not included in requirements stated in Procurement Instruments, GPA Forms 1 and 8. The Eighth United States Army is the only authorized agency to issue these requisitions. The method of issue is as prescribed by the Commanding General, Eighth United States Army. Acknowledgment of accomplishment of Labor Requisition (Labor Form 1), in whole or in part, is indicated by certification of Unit Labor Officer.
d. “SCAPINS,” “Letter Directives,” “Work Orders,” or “Travel Orders,” are not procurement instruments within the terms of this directive.
8. Obligating Documents
a. The short form Contract (bi-lingual), presently in use, which is negotiated by the Japanese Government with a qualified vendor for supplies, materials and/or services, will be used for all purchases, processed through Special Procurement Agency. No procurement instrument will be issued for such contracts. A procurement demand number will be assigned each contracts for administrative control. The contract will be executed in sufficient number of copies to preclude issuance of other documents relating thereto. Upon execution of the contracts with a qualified vendor, Special Procurement Agency will submit same to the fiscal or obligating officer of the requesting agency for certificate of availability of funds. GPA Form 2, receipts will be certified for all payment under such contracts.
(1) If the requirement covers a one-time purchase-one-time delivery, the contract will state,“One-time purchase-one-time delivery-no subsequent work orders nor delivery orders will be honored under this contract.” Upon delivery of the supplies covered by the contract, the fiscal or obligating officer will certify GPA Form 2 receipt which will complete the authorization for payment.
(2) If the requirement covers multiple or recurring deliveries, the contract will state “multiple deliveries will be made upon the basis of work orders or delivery orders issued by the receiving officer designated herein. Payment will be made only upon GPA Form 2 receipt, certified by the fiscal or obligating officer and supported by appropriate delivery order or work order with invoices.”
b. Work orders or delivery orders issued by the designated receiving officer under supply contract, service contract, real estate procurement demand, or construction procurement demand, when duly certified as to availability of funds, become obligating documents. The contract is not an obligating document per se. GPA Form 2 or Form 5 receipt, as applicable, will be executed for payments authorized under the service contract except as provided under e(1) below.
c. Payrolls, for payment or directly employed indigenous personnel, when certified by a unit labor officer for the Occupation Forces and by a fiscal or obligating officer as to availability of funds, are both obligating documents and expenditure documents.
d. Reimbursement Vouchers for authorized travel of indigenous employees for the Occupation Forces, SCAP AGO Form 14 (Incl 4) when properly certified by a fiscal or obligating officer of the Occupation Forces will be paid in the amount specified thereon and will be reported on the Schedule of Disbursements (Incl 3). This form is both an obligating and an expenditure document.
e. A miscellaneous expenditure Voucher, SCAP AGO Form 20 (Incl 5) has been designed to:
(1) Cover one time direct purchase of materials, supplies and non-recurring services when the cost does not exceed ¥36,000 and when the purchase is not made from or through an agency of the Japanese Government.
(2) Cover the cost of interest payments under Japanese Public Law No. 256 of 1949.
(3) Control those expenditures required by Japanese Law in connection with labor for requirements not covered by procurement instrument, such as:
(a) The Japanese Government’s share of premium payments for Health Insurance, Seamen’s Insurance, Unemployment Insurance, and for Welfare Pension Insurance covering indigenous employees for the Occupation Forces. Appropriation 106, GESA, P 424 - 12 (See Ref 2 c).
(b) Injury and/or death allowances under Workmen’s Accident Compensation in excess of the 90 days regular pay by unit payrolls as authorized by Special Procurement Agency regulation. Appropriation 106, GESA, P 425 - 12.
(c) Unemployment Allowance.
(d) Seamen’s Welfare (food, culture on shipboard).
(e) Travel to job site.
(f) Coal Allowance, Cold Area, and/or remote area allowance.
(4) Provide a medium for transfer of funds between TOW (Works) appropriations when directed by the Supreme Commander for the Allied Powers.
(5) Authorize advancement of funds to agencies of the Japanese Government for services under Procurement Demand.
f. No form of procurement instrument will be issued for the requirements under d and e above. SCAP AGO Form 20 will be prepared in accordance with instructions thereon and when supported by invoices or other supporting data may be certified for payment by a fiscal or obligating officer. Special Procurement Agency will estimate quarterly obligations for these requirements and include them in their plan of obligations.
9. a. In those cases where a procurement instrument for services specifies or requires that such services be performed directly by an agency of the Japanese Government, the designated agency may be authorized to expend TOW (Works) funds in advance of the receipt of authenticated Forms GPA 2 or 5, as applicable. The Japanese Government Agency specified in the procurement instrument as the supplier, may be authorized to expend such funds up to the following amounts:
(1) A sum equal to three (3) times the monthly cost of such services as specified in the procurement instrument, or
(2) A sum equal to one-fourth (1/4) the annual cost specified in the procurement instrument.
b. The Special Procurement Agency will prepare and submit SCAP AGO Form 20 to the Comptroller, General Headquarters, Supreme Commander for the Allied Powers for certification and authority to permit the supplying agency to expend funds in advance of procurement receipts within the limits specified above. Obligation of the funds will be controlled by the using agency stipulated in the procurement instrument. Utilization of funds by the Japanese Government Agency concerned will be limited to furnishing the services specified in the applicable procurement instrument, and total expenditures thereunder will not exceed the amount for which SCAP AGO Form 20 is approved by the Supreme Commander for the Allied Powers.
10. In all cases of deviation from the above procedures, immediate report will be rendered to the Supreme Commander for the Allied Powers. A full report, listing all pertinent details, will be rendered as soon as the facts are available. A copy of each immediate report and each full report will be rendered to the Commanding General, Eighth United States Army.
11. Directive issued by the Supreme Commander for the Allied Powers for accomplishment of work or projects which are for the benefit of the Japanese people, or to carry out the terms of surrender, or to otherwise accomplish the purposes of the occupation, will be implemented under the surveillance of Occupation Forces charged with such surveillance by the Supreme Commander for the Allied Powers. No form of procurement instrument will be issued to cover these requirements and receipts will not be given for supplies or services necessary for their accomplishment. Payments will not be made from TOW (Works) funds pursuant to directives from the Supreme Commander for the Allied Powers, unless such payments are fully justified by the provisions of the original SCAPIN, by implementing instructions issued by those Occupation Force agencies charged with surveillance or by a plan submitted by the Japanese Government and approved by the Supreme Commander for the Allied Powers.
a. The Japanese Government will be required by appropriate directives to accomplish certain geodetic and mapping projects in the Japanese home islands. The projects covered by these instructions are for the benefit of the Japanese people or otherwise to accomplish the purposes of the Occupation as defined above; and no form of procurement instruments or receipts will be issued in connection therewith. The funding of these projects will continue as a normal function of the Japanese Government, and no payments for services or materials required in connection therewith may be made from funds appropriated to meet the requirements for support of the Occupation Forces.
b. The recovery of looted property is a responsibility of the Japanese Government in carrying out the terms of the surrender. Accordingly, no procurement instrument will be issued for the services required of personnel summoned by the Civil Property Custodian in connection with the recovery of looted property. Neither will any portion of the costs incurred be authorized for payment from funds appropriated for support of the Occupation Forces.
12. The Comptroller, GHQ, SCAP and authorized representatives of the Commanding General, Eighth United States Army will make periodic examination of Japanese expenditures from funds appropriated for the support of the Occupation Forces to insure compliance with the provisions of this memorandum.

FOR THE SUPREME COMMANDER:

K.B.Bush
Brigadier General, USA,
Adjutant General.

5 Incls
1. WD Form 35
2. Schedule of Disbursements 01
3. Schedule of Disbursements 99
4. SCAP AGO Form 14
5. Misc. Expend. Voucher