B-142339, DEC. 19, 1961

B-142339, DEC. 19, 1961

TO POSTMASTER GENERAL:

WE REFER TO OUR LETTER OF SEPTEMBER 12, 1961, TO MR. LEROY P. AFDEN, AUTHORIZED CERTIFYING OFFICER, BUREAU OF FINANCE, CONCERNING HIS REQUEST OF AUGUST 10, 1961, FOR A DECISION AS TO WHETHER HE COULD CERTIFY FOR PAYMENT A PAYROLL VOUCHER COVERING THE VALUE OF ANNUAL LEAVE THAT WAS APPLIED AGAINST THE INDEBTEDNESS OF MR. VICTOR W. JOHNSON, IN ACCORDANCE WITH OUR DECISION OF MARCH 30, 1960, B-142339.

AS INDICATED IN THE LAST PARAGRAPH OF OUR LETTER OF SEPTEMBER 12, THERE WAS AN APPARENT OVERPAYMENT TO THE PAYEE UNDER A COURT OF CLAIMS JUDGMENT OF FEBRUARY 24, 1961, AS EXPLAINED IN OUR LETTER OF THE SAME DATE TO THE ATTORNEY GENERAL, A COPY OF WHICH WE ENCLOSED WITH OUT LETTER OF MR. AFDEM, AND WE ADVISED THAT WE WOULD WITHHOLD OUR DECISION CONCERNING CERTIFICATION OF THE VOUCHER PENDING THE OUTCOME OF EFFORTS TO RECOVER THE OVERPAYMENT.

THE OVERPAYMENT UNDER THE JUDGMENT CONSISTED OF $1,442.21 REPRESENTING RETIREMENT CREDIT (WHICH WAS PAID DIRECTLY TO THE JUDGMENT CREDITOR FOR CERTAIN REASONS), AND $1,470.87 REPRESENTING INCOME TAX WITHHOLDING CREDIT. THOSE CREDITS DUPLICATED IN SUBSTANCE SIMILAR CREDITS OF $1,441.39 AND $1,470.80, RESPECTIVELY, WHICH HAD BEEN ALLOWED IN THE ADMINISTRATIVE SETTLEMENT OF JUNE 21, 1960, ON POD FORM 827. THE $1,470.80 INCOME TAX WITHHOLDING CREDIT WAS COVERED BY A FORM W-2, WITHHOLDING TAX STATEMENT, ISSUED FOR THE YEAR 1960 IN MR. JOHNSON'S FAVOR BY YOUR REGIONAL CONTROLLER, PORTLAND, OREGON, IN THE AMOUNT OF $1,562.10.

IN RESPONSE TO THE REQUEST OF THE DEPARTMENT OF JUSTICE OF NOVEMBER 8, 1961, FOR HIS CONSENT TO ADMINISTRATIVE ACTION TO ELIMINATE THE DUPLICATE TAX CREDIT, MR. JOHNSON STATED IN HIS UNDATED LETTER RECEIVED IN THE DEPARTMENT OF JUSTICE ON NOVEMBER 27, 1961, THAT HE CONSENTED TO ADMINISTRATIVE CORRECTION "WHEREBY I WILL BE CREDITED WITH THE TAX CREDIT OF $1,470.87 ONLY IN THE YEAR 1916.' OF COURSE THE 1961 CREDIT IS THE ONLY ONE NOW AVAILABLE FOR RECOVERY TO ELIMINATE THE DUPLICATION. THE DEPARTMENT OF JUSTICE EXPRESSED THE BELIEF IN ITS LETTER OF NOVEMBER 30, 1961, TO US, THAT THE ADJUSTMENT CAN BE ADMINISTRATIVELY ACCOMPLISHED AND THAT NO ISSUE BE FURTHER CREATED WITH MR. JOHNSON. (WE UNDERSTAND THAT THE DIRECTOR OF YOUR DIVISION OF ACCOUNTS, BUREAU OF FINANCE, HAS BEEN FURNISHED COPIES OF THE CORRESPONDENCE MENTIONED.) THEREFORE, IN LIGHT OF THE FOREGOING COMMENTS ACTION SHOULD BE TAKEN TO CANCEL THE W-2 FORM WHICH WE UNDERSTAND HAS BEEN ISSUED FOR THE AMOUNT ($1,470.87) PROVIDED IN THE JUDGMENT OF FEBRUARY 24, 1961, FOR WITHHOLDING TAX AND TO RESTORE SUCH AMOUNT TO THE APPROPRIATION CHARGED (18X0003).

AS TO THE RETIREMENT CREDIT, A JUDGMENT IN MR. JOHNSON'S FAVOR WAS ENTERED BY THE COURT OF CLAIMS ON SEPTEMBER 8, 1961, IN A SUIT FOR RETIREMENT ANNUITY, CT.CL.NO. 102-61, WHICH JUDGMENT PROVIDES THAT $1,442.21 OF THE TOTAL AMOUNT ALLOWED SHALL BE CREDITED TO PLAINTIFF'S ACCOUNT UNDER THE CIVIL SERVICE RETIREMENT ACT. THAT AMOUNT HAD BEEN INCLUDED IN THE PAYMENT MADE DIRECTLY TO PLAINTIFF UNDER THE JUDGMENT IN CT.CL.NO. 236-60, AND, AS PREVIOUSLY INDICATED, CONSTITUTES A DUPLICATION OF THE RETIREMENT CREDIT ALLOWED IN THE ADMINISTRATIVE SETTLEMENT OF JUNE 21, 1960. WE EXPECT THAT A SETTLEMENT IS RECEIVED IN YOUR BUREAU OF FINANCE FOR THE DRAWING OF CHECKS, ACTION SHOULD BE INITIATED TO OBTAIN THE REFUND FROM THE CIVIL SERVICE RETIRMENT AND DISABILITY FUND OF THE RETIREMENT CREDIT ALLOWED IN THE ADMINISTRATIVE SETTLEMENT, FOR RETURN TO THE APPROPRIATION CHARGED. THE AMOUNT PROVIDED IN THE JUDGMENT FOR CREDIT UNDER THE CIVIL SERVICE RETIRMENT ACT WILL REPLACE THE AMOUNT THUS REFUNDED. UNDER THE CIRCUMSTANCES WE DO NOT BELIEVE IT NECESSARY TO DISTURB THE AGENCY CONTRIBUTIONS PREVIOUSLY MADE.

REGARDING CERTIFICATION OF THE VOUCHER COVERING THE VALUE OF ANNUAL LEAVE, THE PERTINENT FACTS AND THE COURSE OF ACTION BY THE DEPARTMENT OF JUSTICE IN ADMITTING LIABILITY IN CONNECTION WITH THE TWO SUITS BY MR. JOHNSON WERE REVIEWED IN OUR LETTER OF SEPTEMBER 12 TO MR. AFDEM AND NEED NOT BE REPEATED HERE. IT IS CLEAR TO US THAT THE DEPARTMENT OF JUSTICE WOULD NOT INTERPOSE ANY DEFENSE TO A SUIT FOR PAYMENT OF THE VALUE OF THE ANNUAL LEAVE IN QUESTION, AND THAT NO USEFUL PURPOSE WOULD BE SERVED BY THE CONTINUED WITHHOLDING OF PAYMENT. THEREFORE, A PROPERLY DRAWN VOUCHER COVERING SUCH PAYMENT MAY BE CERTIFIED. HOWEVER, SINCE THE VOUCHER SUBMITTED IS DRAWN IN THE GROSS AMOUNT OF $527.04 WITH $94.92 SHOWN AS A DEDUCTION FOR FEDERAL INCOME TAX, WHEREAS INFORMATION ON FILE HERE INDICATES THAT A TAX DEDUCTION WAS MADE AND COVERED BY THE W-2 FORM ISSUED IN 1960, APPROPRIATE ADJUSTMENT OF THE GROSS AMOUNT OF THE VOUCHER SHOULD BE MADE TO AVOID A DUPLICATION OF THE WITHHOLDING TAX CREDIT.

THE VOUCHER, WHICH IS HEREWITH RETURNED, MAY NOT BE CERTIFIED FOR PAYMENT IN ITS PRESENT FORM.