B-141025, SEPTEMBER 19, 1968, 48 COMP. GEN. 138

B-141025, SEPTEMBER 19, 1968, 48 COMP. GEN. 138

PAY - ALLOTMENTS - BANKING FACILITIES FOR DEPOSIT, ETC THE AUTHORTY IN PUBLIC LAW 90-365, APPROVED JUNE 29, 1968, TO ISSUE A SINGLE GOVERNMENT SALARY CHECK TO A BANK FOR DEPOSIT TO THE INDIVIDUAL ACCOUNTS OF EMPLOYEES MAY NOT BE CONSTRUED TO INCLUDE MEMBERS OF THE UNIFORMED SERVICES, THE WORDS "SALARY" AND "WAGES" IN THE ACT DENOTING THE COMPENSATION OF FEDERAL EMPLOYEES, WHEREAS WHEN REFERRING TO THE COMPENSATION OF MILITARY PERSONNEL, THE TERMS "PAY" OR "PAY AND ALLOWANCE" ARE USED. HOWEVER, UNDER THE ALLOTMENT AUTHORITY OF CHAPTER 13 OF TITLE 37, U.S. CODE, AT THE REQUEST OF MEMBERS, A SINGLE GOVERNMENT CHECK MAY BE ISSUED TO A FINANCIAL INSTITUTION TO COVER THEIR "NET PAY"--- TOTAL PAY AND ALLOWANCES LESS AUTHORIZED DEDUCTIONS--- PROVIDED THE PURPOSE OF THE ALLOTMENTS IS CONSIDERED TO BE PROPER BY THE SECRETARY CONCERNED.

TO THE SECRETARY OF DEFENSE, SEPTEMBER 19, 1968:

REFERENCE IS MADE TO LETTER OF AUGUST 24, 1968, AND ENCLOSURES, FROM ASSISTANT SECRETARY OF DEFENSE, ROBERT C. MOOT, ASKING WHETHER THE PROVISIONS OF PUBLIC LAW 90-365, APPROVED JUNE 29, 1968, 31 U.S.C. 492 (B) AND (C) ARE APPLICABLE TO MEMBERS OF THE ARMED FORCES.

IN ORDER TO GIVE FULL CONSIDERATION TO THE MATTER WE BELIEVE IT DESIRABLE TO EXAMINE THE EARLIER PROVISIONS OF PUBLIC LAW 89-145 APPROVED AUGUST 28, 1965, WHICH FIRST ADDED PARAGRAPHS (B) AND (C) TO SECTION 3620, REVISED STATUTES, 31 U.S.C. 492, AND THE EVENTS LEADING UP TO THE ENACTMENT OF SUCH PUBLIC LAW.

IN OUR DECISION OF NOVEMBER 12, 1959, 39 COMP. GEN. 372, WE ADVISED THE SECRETARY OF THE AIR FORCE THAT THE ISSUANCE OF A SINGLE GOVERNMENT SALARY CHECK TO A BANK FOR DEPOSIT TO INDIVIDUAL ACCOUNTS OF CIVILIAN EMPLOYEES UPON THEIR REQUEST RATHER THAN THE ISSUANCE OF INDIVIDUAL CHECKS TO EACH EMPLOYEE, WAS CONTRARY TO SECTION 3477, REVISED STATUTES, 31 U.S.C. 203, CONCERNING ASSIGNMENTS OF CLAIMS AND TO SECTION 3620, REVISED STATUTES, 31 U.S.C. 492, WHICH REQUIRES DISBURSING OFFICERS TO DRAW CHECKS ONLY IN FAVOR OF THE PERSON TO WHOM PAYMENT IS MADE.

IN A LATER DECISION TO THE SECRETARY OF THE ARMY DATED DECEMBER 2, 1963, 43 COMP. GEN. 459, WE CONSIDERED THE SUBSEQUENTLY ENACTED PROVISIONS OF SECTION 5 OF PUBLIC LAW 87-304, APPROVED SEPTEMBER 26, 1961, 5 U.S.C. 3075 (NOW 5 U.S.C. 5525), WHICH PROVIDE THAT---

THE HEAD OF EACH DEPARTMENT IS AUTHORIZED TO ESTABLISH PROCEDURES UNDER WHICH EACH EMPLOYEE OF SUCH DEPARTMENT IS PERMITTED TO MAKE ALLOTMENTS AND ASSIGNMENTS OF AMOUNTS OUT OF HIS COMPENSATION FOR SUCH PURPOSE AS SUCH DEPARTMENT HEAD DEEMS APPROPRIATE.

ALSO, CONSIDERED IN THAT DECISION WERE THE PROVISIONS OF SECTION 701 (D) OF THE ACT OF SEPTEMBER 7, 1962, 37 U.S.C. 701 (D), WHICH PROVIDE IN PART AS FOLLOWS:

(D) THE SECRETARY OF THE ARMY * * * MAY ALLOW A---

(1) MEMBER OF THE ARMY * * * TO MAKE ALLOTMENTS FROM HIS PAY FOR THE SUPPORT OF HIS RELATIVES, OR FOR ANY OTHER PURPOSE THAT THE SECRETARY CONSIDERS PROPER * * *.

SINCE WE PREVIOUSLY HAD HELD IN A DECISION TO THE SECRETARY OF THE AIR FORCE, DECEMBER 20, 1960, B-141025, THAT "WHERE THERE IS STATUTORY AUTHORITY FOR ALLOTMENTS * * * WE HAVE NO OBJECTION TO THE ISSUANCE TO A BANK OF A SINGLE GOVERNMENT SALARY CHECK COVERING NUMEROUS EMPLOYEES," WE STATED THAT THE PROVISIONS OF 5 U.S.C. 3075 RELATING TO CIVILIAN EMPLOYEES AND 37 U.S.C. 701 (D), RELATING TO MEMBERS OF THE ARMY, PROVIDED AUTHORITY FOR THE ISSUANCE OF A SINGLE GOVERNMENT CHECK COVERING THE COMPENSATION OF CIVILIAN EMPLOYEES AND ARMY PERSONNEL TO A BANK FOR DEPOSIT TO THE INDIVIDUAL ACCOUNTS OF SUCH CIVILIAN EMPLOYEES AND ARMY PERSONNEL.

WE NOTED, HOWEVER, THAT INSOFAR AS CIVILIAN EMPLOYEES WERE CONCERNED, THE CIVIL SERVICE COMMISSION HAD, BY REGULATION, PROVIDED THAT THE DEPARTMENT HEADS COULD AUTHORIZE SUCH ALLOTMENTS FOR CIVILIAN PERSONNEL ONLY WHEN SUCH EMPLOYEES FELL WITHIN THE 3 CATEGORIES LISTED THEREIN.

APPARENTLY AS A RESULT OF OUR ABOVE-MENTIONED DECISIONS AND THE RESTRICTIVE SCOPE OF THE REGULATIONS ISSUED BY THE CIVIL SERVICE COMMISSION PURSUANT TO PUBLIC LAW 87-304, THE DEPARTMENT OF DEFENSE SPONSORED LEGISLATION WHICH RESULTED IN THE ENACTMENT OF PUBLIC LAW 89 145 APPROVED AUGUST 28, 1965, SUPRA. THIS PUBLIC LAW AUTHORIZED THE SECRETARY OF THE TREASURY TO PRESCRIBE REGULATIONS UNDER WHICH THE HEAD OF AN AGENCY COULD, IN HIS DISCRETION, PERMIT THE DISBURSING OFFICER UPON THE WRITTEN REQUEST OF THE PERSON TO WHOM PAYMENT IS TO BE MADE TO ISSUE A CHECK DRAWN IN FAVOR OF THE FINANCIAL ORGANIZATION DESIGNATED BY THE PERSON FOR CREDIT TO HIS ACCOUNT, AND IF MORE THAN ONE PERSON DESIGNATES THE SAME ORGANIZATION, A SINGLE COMPOSITE CHECK MAY BE ISSUED. THE TERM "PERSON TO WHOM PAYMENT IS TO BE MADE" IS BROAD ENOUGH TO COVER BOTH MILITARY PERSONNEL AND CIVILIAN EMPLOYEES AND THE LEGISLATIVE HISTORY CLEARLY DISCLOSES THAT SUCH WAS THE INTENT OF THE CONGRESS.

AS POINTED OUT IN A MEMORANDUM PREPARED BY THE MILITARY PAY AND ALLOWANCE COMMITTEE (COMMITTEE ACTION NO. 421), ENCLOSED WITH THE ASSISTANT SECRETARY'S LETTER, TREASURY DEPARTMENT CIRCULAR NO. 1076, DECEMBER 22, 1965, IMPLEMENTED THE STATUTORY AUTHORITY CONTAINED IN PUBLIC LAW 89-145 AND TREASURY DEPARTMENT CIRCULAR 1076, PROCEDURES MEMORANDUM NO. 1 OF THE SAME DATE, PROVIDED AGENCY GUIDELINES. THE PROCEDURES MEMORANDUM SPECIFICALLY PROVIDED IN 3 (A) (4) THAT THE AMOUNT THAT MAY BE PAID UNDER THE PROCEDURE WAS THAT AMOUNT THAT OTHERWISE WOULD HAVE BEEN PAID BY CHECK DRAWN TO THE PERSON, AND THAT THE LAW WAS NOT THE BASIS FOR ALLOTMENTS OF PAY FOR WHICH THERE WERE OTHER PROVISIONS OF LAW. IT WAS CLEAR, THEREFORE, THAT THE PROCEDURE WAS NOT AN ALLOTMENT PROCEDURE BUT RATHER A NEW PROCEDURE FOR PAYMENT OF BOTH CIVILIAN AND MILITARY PERSONNEL WITHOUT RELIANCE UPON THE VARIOUS ALLOTMENT LAWS SINCE THE PAYMENT TO THE FINANCIAL INSTITUTION WOULD ONLY BE IN LIEU OF THE CHECK THAT WOULD, IN THE ABSENCE OF THE PROCEDURE, HAVE BEEN MADE PAYABLE TO THE EMPLOYEE OR MEMBER.

AS PREVIOUSLY INDICATED, PUBLIC LAW 90-365 APPROVED JUNE 29, 1968, SUPERSEDED PUBLIC LAW 89-145, AND AMENDED SUBSECTIONS (B) AND (C) OF SECTION 3620, REVISED STATUTES, 32 U.S.C. 492 (B) AND (C). SUCH AMENDED SUBSECTIONS NOW READ IN PERTINENT PART AS FOLLOWS:

(B) (1) NOTWITHSTANDING SUBSECTION (A) OF THIS SECTION OR ANY OTHER PROVISION OF LAW, AND UNDER REGULATIONS TO BE PRESCRIBED BY THE SECRETARY OF THE TREASURY, THE HEAD OF AN AGENCY SHALL, UPON THE WRITTEN REQUEST OF AN EMPLOYEE OF THE AGENCY TO WHOM A PAYMENT FOR WAGES OR SALARY IS TO BE MADE, AUTHORIZE A DISBURSING OFFICER TO MAKE THE PAYMENT IN THE FORM OF ONE, TWO, OR THREE CHECKS, (THE NUMBER OF CHECKS AND THE AMOUNT OF EACH, IF MORE THAN ONE, TO BE DESIGNATED BY SUCH EMPLOYEE) BY SENDING TO EACH FINANCIAL ORGANIZATION DESIGNATED BY SUCH EMPLOYEE A CHECK THAT IS DRAWN IN FAVOR OF THE ORGANIZATION AND IS FOR CREDIT TO THE CHECKING ACCOUNT OF SUCH EMPLOYEE OR IS FOR THE DEPOSIT OF SAVINGS OR PURCHASE OF SHARES FOR SUCH EMPLOYEE: PROVIDED, THAT THE AGENCY SHALL NOT BE REIMBURSED FOR THE COST OF SENDING ONE CHECK REQUESTED BY SUCH EMPLOYEE BUT SHALL BE REIMBURSED FOR THE ADDITIONAL COST OF SENDING ANY ADDITIONAL CHECK REQUESTED BY SUCH EMPLOYEE BY THE FINANCIAL ORGANIZATION TO WHICH SUCH CHECK IS SENT. FOR THE PURPOSES OF THE FOREGOING PROVISO, THE CHECK FOR WHICH THE AGENCY SHALL NOT BE REIMBURSED SHALL BE THE CHECK IN THE LARGEST AMOUNT.

(2) IF MORE THAN ONE EMPLOYEE TO WHOM A PAYMENT IS TO BE MADE DESIGNATES THE SAME FINANCIAL ORGANIZATION, THE HEAD OF AN AGENCY MAY, UPON THE WRITTEN REQUEST OF SUCH EMPLOYEE AND UNDER REGULATIONS TO BE PRESCRIBED BY THE SECRETARY OF THE TREASURY, AUTHORIZE A DISBURSING OFFICER TO MAKE THE PAYMENT BY SENDING TO THE ORGANIZATION A CHECK THAT IS DRAWN IN FAVOR OF THE ORGANIZATION FOR THE TOTAL AMOUNT DESIGNATED BY THOSE EMPLOYEES AND BY SPECIFYING THE AMOUNT TO BE CREDITED TO THE ACCOUNT OF EACH OF THOSE EMPLOYEES.

(C) PAYMENT BY THE UNITED STATES IN THE FORM OF MORE THAN ONE CHECK, DRAWN IN ACCORDANCE WITH SUBSECTION (B) AND PROPERLY ENDORSED, SHALL CONSTITUTE A FULL ACQUITTANCE FOR THE AMOUNT DUE TO THE EMPLOYEE REQUESTING PAYMENT.

IT WILL BE NOTED THAT THE REVISIONS OF SUBSECTIONS (B) AND (C) OF 31 U.S.C. 492 BY PUBLIC LAW 90-365 MADE THE PROCEDURES PRESCRIBED THEREIN MANDATORY ON THE HEADS OF THE DEPARTMENTS AND, WHEREAS THE EARLIER SUBSECTIONS AUTHORIZED "A PERSON TO WHOM A PAYMENT IS TO BE MADE" TO REQUEST PAYMENT TO A FINANCIAL INSTITUTION, THOSE SUBSECTIONS NOW PERMIT PAYMENTS TO BE MADE UP TO THREE FINANCIAL INSTITUTIONS BUT THE AUTHORIZATION EXTENDS ONLY TO AN "EMPLOYEE" TO MAKE SUCH REQUEST. SHOULD ALSO BE NOTED THAT THE PAYMENT TO BE MADE TO THE EMPLOYEE IS THAT "FOR WAGES OR SALARY.'

AN EXAMINATION OF THE LEGISLATIVE HISTORY OF PUBLIC LAW 90-365 FURNISHES NO CONCLUSIVE ASSISTANCE IN DETERMINING WHETHER THE CONGRESS IN USING THE TERM "EMPLOYEE" INTENDED THEREBY TO INCLUDE PERSONS IN THE MILITARY SERVICE WITHIN THE SCOPE OF THAT LAW.

ORDINARILY THE WORDS "SALARY" AND "WAGES" ARE USED WHEN REFERENCE IS MADE TO COMPENSATION OF FEDERAL EMPLOYEES, WHEREAS THE TERMS "PAY" OR "PAY AND ALLOWANCES" USUALLY ARE USED WITH REFERENCE TO THE COMPENSATION OF MILITARY PERSONNEL. FURTHERMORE, LEGISLATION REGARDING COMPENSATION OF MILITARY PERSONNEL AND FEDERAL EMPLOYEES USUALLY IS CONSIDERED AND ACTED UPON BY THE CONGRESS AS SEPARATE BILLS. SEE FOR EXAMPLE PUBLIC LAW 90-206 APPROVED DECEMBER 16, 1967, TITLE II, 5 U.S.C. 5332 NOTE, WHICH IS ENTITLED THE "FEDERAL SALARY ACT OF 1967" WHICH DEALS EXCLUSIVELY WITH SALARIES OF FEDERAL EMPLOYEES, AND PUBLIC LAW 90-207, ALSO APPROVED DECEMBER 16, 1967, 37 U.S.C. 203, WHICH STATES THAT ITS PURPOSE IS TO "INCREASE THE BASIC PAY FOR MEMBERS OF THE UNIFORMED SERVICES.'

SEE ALSO THE CASE OF UNITED STATES OF AMERICA V GEORGE B. ROBBINS, 354 F.2D 741, WHEREIN THE COURT INDICATED THAT THE PAYMENTS RECEIVED FOR THE PERFORMANCE OF MILITARY RESERVE SERVICE ARE NOT "WAGES OF ANY KIND.'

IN VIEW OF THE FOREGOING AND IN THE ABSENCE OF ANYTHING IN THE LEGISLATIVE HISTORY OF PUBLIC LAW 90-365 INDICATING OTHERWISE, IT IS OUR VIEW THAT THE TERM "EMPLOYEE" AS USED THEREIN PROPERLY MAY NOT BE CONSTRUED SO AS TO INCLUDE A MEMBER OF THE ARMED FORCES.

HAVING REACHED THE ABOVE CONCLUSION THERE IS FOR CONSIDERATION THAT PART OF THE MEMORANDUM OF THE MILITARY PAY AND ALLOWANCE COMMITTEE THAT READS AS FOLLOWS:

IN THE EVENT IT IS CONCLUDED THE WORD "EMPLOYEE" DOES NOT INCLUDE MILITARY PERSONNEL, IS THERE ANY LEGAL OBJECTION TO THE MILITARY DEPARTMENT ISSUING REGULATIONS AUTHORIZING A SINGLE CHECK TO A FINANCIAL INSTITUTION, INCLUDING CHARTERED FEDERAL OR STATE CREDIT UNIONS, OR ANY OTHER TYPE OF ORGANIZATION APPROVED BY THE RESPECTIVE SECRETARIES, FOR CREDITING TO THE ACCOUNTS OF APPROPRIATELY IDENTIFIED MEMBERS UNDER THE AUTHORITY OF CHAPTER 13, TITLE 37, U.S.C. AUTHORIZING ALLOTMENTS? YOUR DECISION B-141025, 2 DECEMBER 1963, RENDERED PRIOR TO BOTH THE 1965 AND 1968 LAWS, INDICATES THERE WOULD BE NO OBJECTION, AND THE COMMITTEE IS AWARE OF NOTHING WHICH WOULD CAUSE MODIFICATION OF THAT DECISION.

IF YOU CONCUR IN THE COMMITTEE'S OPINION, WILL YOUR DECISION BE THE SAME IF THE ALLOTMENT WERE FOR THE "NET PAY" DUE A MEMBER AFTER ALL OTHER AUTHORIZED DEDUCTIONS AND ALLOTMENTS? IN THIS REGARD, MODERNIZATION OF THE MILITARY PAY PROCEDURES RELIED ON THE AUTHORITY OF THE 1965 LAW TO PERMIT PAYMENT TO A FINANCIAL INSTITUTION UPON THE AUTHORIZATION OF A MEMBER OF THE "NET PAY" DUE HIM AFTER DEDUCTION FROM HIS TOTAL PAY AND ALLOWANCES OF ALL OTHER AUTHORIZED DEDUCTIONS AND ALLOTMENTS. THE "NET PAY" MAY VARY FROM PAY PERIOD TO PAY PERIOD AND THE ALLOTMENT OF A MEMBER'S ,NET PAY" WILL NOT BE IN A SPECIFIED DOLLAR AMOUNT BUT IN THE AMOUNT REMAINING AFTER ALL OTHER AUTHORIZED DEDUCTIONS AND ALLOTMENTS. THE COMMITTEE RECOGNIZES THAT HERETOFORE AUTHORIZED ALLOTMENTS HAVE GENERALLY BEEN IN SPECIFIED DOLLAR AMOUNTS, BUT THE COMMITTEE DISCERNS NO LEGAL REASON WHY THE ALLOTMENT SYSTEM MAY NOT BE USED MERELY BECAUSE THE AMOUNT ALLOTTED MAY VARY DEPENDING UPON THE "NET PAY" DUE.

IN OUR DECISION OF DECEMBER 2, 1963, 43 COMP. GEN. 459, REFERRED TO BY THE COMMITTEE AND EARLIER IN THIS DECISION, WE STATED WITH RESPECT TO THAT PORTION OF CHAPTER 13, TITLE 37, U.S. CODE, WHICH DEALS WITH ARMY PERSONNEL THAT---

IN VIEW OF THE ABOVE-QUOTED STATUTORY AUTHORITY FOR ALLOTMENTS, WE WOULD HAVE NO OBJECTION TO THE INITIATION OF A PROCEDURE FOR ISSUING A SINGLE GOVERNMENT CHECK COVERING THE PAY OF NUMEROUS MEMBERS OF THE ARMY TO A BANK FOR DEPOSIT TO THE INDIVIDUAL ACCOUNTS OF THE MEMBERS UPON THEIR REQUEST, PROVIDED THAT THE PURPOSE OF SUCH ALLOTMENTS IS CONSIDERED TO BE PROPER BY THE SECRETARY OF THE ARMY.

WE TOO ARE AWARE OF NOTHING WHICH WOULD NOW REQUIRE A DIFFERENT CONCLUSION THAN WAS THEREIN STATED OR A DIFFERENT CONCLUSION AS TO MILITARY PERSONNEL GENERALLY. ALSO, WE SEE NO LEGAL REASON WHY ALLOTMENTS MADE UNDER CHAPTER 13, OF TITLE 37, U.S. CODE, MAY NOT BE MADE IN THE "NET PAY" DUE, AS SUGGESTED BY THE COMMITTEE.