B-141025, DEC. 20, 1960

B-141025, DEC. 20, 1960

TO THE SECRETARY OF THE AIR FORCE:

IN A LETTER DATED SEPTEMBER 29, 1960, THE ASSISTANT SECRETARY OF THE AIR FORCE REFERS TO OUR DECISIONS OF NOVEMBER 12, 1959, B-141025, 39 COMP. GEN. 372, AND AUGUST 3, 1960, B-141025, IN WHICH WE HELD THAT ISSUANCE OF A SINGLE GOVERNMENT SALARY CHECK TO A BANK FOR DEPOSIT TO THE INDIVIDUAL ACCOUNTS OF EMPLOYEES UPON THEIR REQUEST, RATHER THAN ISSUANCE OF INDIVIDUAL CHECKS DIRECTLY TO EACH EMPLOYEE, IS IN CONTRAVENTION OF SECTION 3477; REVISED STATUTES (31 U.S.C. 203) AND SECTION 3620, REVISED STATUTES (31 U.S.C. 492). SECTION 3477 PRECLUDES THE ASSIGNMENT OF CLAIMS UNLESS A PROPER POWER OF ATTORNEY, OR OTHER AUTHORITY IN THE PRESCRIBED FORM IS EXECUTED AND SECTION 3620 REQUIRES DISBURSING OFFICERS TO DRAW CHECKS ONLY IN FAVOR OF THE PERSON TO WHOM PAYMENT IS MADE.

THE ASSISTANT SECRETARY ADVISED THAT THE STATUTORY BASES WHICH WE RELY UPON IN OBJECTING TO THE SINGLE CHECK PROCEDURE, WHEN CONSIDERED IN THE LIGHT OF CERTAIN OF OUR PRIOR DECISIONS, AND PRACTICES CURRENTLY IN EFFECT WITHIN THE DEPARTMENT OF DEFENSE, HAVE RESULTED IN CONSIDERABLE CONFUSION WITH RESPECT TO THE EFFECT AND APPLICABILITY OF THE ABOVE-CITED DECISIONS. HE STATES THAT ONE POSSIBILITY, FOR EXAMPLE, IS THAT THESE DECISIONS IMPLICITLY OVERRULE CERTAIN OF OUR PRIOR DECISIONS. THE ASSISTANT SECRETARY SUGGESTS THAT ANOTHER POSSIBILITY IS THAT THEY PROHIBIT NOT ONLY THE CONSOLIDATED CHECK PROCEDURE SPECIFICALLY UNDER EXAMINATION, BUT LIKEWISE PROHIBIT THE ISSUANCE OF INDIVIDUAL SALARY CHECKS FOR INDIVIDUAL EMPLOYEES DIRECTLY PAYABLE TO BANKS, AND EVEN THE MAILING TO BANKS OF INDIVIDUAL CHECKS PAYABLE TO EMPLOYEES, AND THAT THEY APPLY NOT ONLY TO CIVILIAN EMPLOYEES WITHIN THE UNITED STATES BUT ALSO TO MEMBERS OF THE ARMED SERVICES AND CIVILIAN EMPLOYEES ASSIGNED OUTSIDE THE UNITED STATES AS WELL. IN VIEW OF THESE PROBLEMS, YOUR DEPARTMENT FEELS OBLIGED TO REQUEST FURTHER CONSIDERATION AND CLARIFICATION OF OUR RECENT DECISIONS.

THE ASSISTANT SECRETARY REFERS TO A STATEMENT IN OUR DECISION OF AUGUST 3 TO THE EFFECT THAT REGARDLESS OF POSSIBLE SUBSTANTIAL SAVINGS RESULTING THEREFROM, SPECIFIC AUTHORITY OF LAW MUST BE OBTAINED FOR THE CONDEMNED PROCEDURE. HE STATES THAT THIS APPEARS IN MARKED CONTRAST TO OUR HOLDING IN 21 COMP. GEN. 942 APPROVING THE ISSUANCE OF UNITED STATES SAVINGS BONDS, PAID FOR BY PAYROLL DEDUCTIONS, TO PERSONS OTHER THAN THE EMPLOYEE INVOLVED. THE ASSISTANT SECRETARY ALSO MAKES REFERENCE TO 31 COMP. GEN. 5, WHERE HE STATES, WE APPROVED A BLANKET FORM OF RECEIPT AND RELEASE TO BE OBTAINED PRIOR TO ISSUANCE OF THE BONDS WAS AUTHORIZED, BASED AGAIN ON SAVINGS TO THE GOVERNMENT. HE REPORTS THAT AS INDICATED IN PRIOR CORRESPONDENCE, USE OF THE SINGLE CHECK PROCEDURE FOR SALARY PAYMENTS RESULTS IN SUBSTANTIAL SAVINGS TO THE GOVERNMENT.

THE ASSISTANT SECRETARY ADVISES THAT OUR RECENT OPINIONS CONCERNING THE AIR FORCE PRACTICE HAVE RAISED DOUBTS NOT ONLY WITH RESPECT TO THE SAVINGS BOND DECISION BUT ALSO WITH RESPECT TO THE PRESENT APPLICABILITY OF EARLIER DECISIONS RELATING TO ALLOTMENTS. HE NOTES THAT IN OUR DECISION DATED AUGUST 3, 1960, WE REFER TO 10 U.S.C. 3689 AND 8689 AND 31 U.S.C. 492 (D) AS "EXCEPTIONS" TO THE STATUTORY PROVISIONS CITED IN SUPPORT OF OUR POSITION. HE ADVISES THAT THE STATED ,EXCEPTIONS" TOGETHER WITH 5 U.S.C. 75 (C), PROVIDE GENERAL AUTHORITY UNDER WHICH MEMBERS OF THE ARMY AND AIR FORCE AND CIVILIAN EMPLOYEES ASSIGNED TO DUTY OUTSIDE THE UNITED STATES MAY MAKE ALLOTMENTS FROM THEIR PAY FOR SUCH PURPOSES AS MAY BE CONSIDERED PROPER BY THE SECRETARY CONCERNED.

THE ASSISTANT SECRETARY STATES THAT A NUMBER OF OUR PRIOR DECISIONS HAVE INDICATED THAT GENERALLY SPEAKING ALLOTMENTS ARE NOT CONSIDERED TO BE ASSIGNMENTS OF PAY, IN THAT THEY GIVE NO VESTED RIGHTS TO THE ALLOTTEE. HE REFERS SPECIFICALLY TO 2 COMP. DEC. 652 AND 26 ID. 855, AS WELL AS 23 COMP. GEN. 181.

THE ASSISTANT SECRETARY'S LETTER CONTINUES:

"IF ALLOTMENTS ARE NOT ASSIGNMENTS, AS YOU STATE IN YOUR FORMER OPINIONS, IT IS DIFFICULT TO UNDERSTAND WHY THE ALLOTMENT AUTHORIZATIONS WERE DESCRIBED IN YOUR DECISION OF AUGUST 3, 1960 AS EXCEPTIONS TO STATUTES DEALING WITH ASSIGNMENTS. BY THE SAME TOKEN, IF AN ALLOTMENT MADE TO A BANK IS EQUIVALENT NOT TO AN ASSIGNMENT BUT TO PAYMENT TO THE INDIVIDUAL MAKING THE ALLOTMENT, AS YOU STATE IN YOUR FORMER OPINIONS, IT IS DIFFICULT TO UNDERSTAND WHY THE DESIGNATION OF A BANK AS RECIPIENT OF A SALARY CHECK IS NOT SIMILARLY EQUIVALENT NOT TO AN ASSIGNMENT BUT TO PAYMENT TO THE INDIVIDUAL HIMSELF AND, THEREFORE, ALSO NOT PROHIBITED BY SECTIONS 3477 AND 3620, REVISED STATUTES.

"IN VIEW OF THE FOREGOING, I WOULD APPRECIATE:

"A. RECONSIDERATION OF THE OPINIONS DATED NOVEMBER 12, 1959 AND AUGUST 3, 1960 IN THE LIGHT OF THE PRIOR DECISIONS OF YOUR OFFICE, CITED ABOVE;

"B. IN THE EVENT THE NOVEMBER 12, 1959 AND AUGUST 3, 1960 DECISIONS ARE CONFIRMED, ADVICE AS TO WHETHER THE STATUTES RELIED ON IN YOUR RECENT DECISIONS RENDER ILLEGAL NOT ONLY ISSUANCE OF A SINGLE GOVERNMENT SALARY CHECK COVERING NUMEROUS EMPLOYEES BUT ISSUANCE OF INDIVIDUAL SALARY CHECKS FOR EACH EMPLOYEE PAYABLE DIRECTLY TO A BANK;

"C. IN SUCH EVENT, ADVICE AS TO WHETHER THE PROHIBITION ALSO COVERS MAILING DIRECTLY TO BANKS OF INDIVIDUAL SALARY CHECKS MADE PAYABLE TO EMPLOYEES; AND

"D. IN THE EVENT THE NOVEMBER 12, 1959 AND AUGUST 3, 1960 DECISIONS ARE CONFIRMED, ADVICE AS TO WHETHER THE ALLOTMENT AUTHORITY NOW IN EXISTENCE IS SUFFICIENT TO AUTHORIZE THE CONDEMNED PROCEDURE INSOFAR AS MILITARY MEMBERS AND CIVILIANS ON DUTY OUTSIDE THE UNITED STATES ARE CONCERNED.'

CONCERNING PAYROLL DEDUCTIONS IN CONNECTION WITH UNITED STATES SAVINGS BONDS, WE STATED IN 21 COMP. GEN. 942 THAT:

"IN VIEW OF THE PROVISIONS OF SECTIONS 3477 AND 3620 REVISED STATUTES, THERE MAY BE SOME DOUBT AS TO THE AUTHORITY OF LAW FOR THE PAYMENT OF THE ACCRUED SALARY OF AN EMPLOYEE PARTLY IN THE FORM OF A CHECK IN FAVOR OF THE EMPLOYEE AND PARTLY IN THE FORM OF A BOND REGISTERED IN THE NAME OF SOME OTHER PERSON. HOWEVER, SINCE IT WOULD APPEAR TO BE DEFINITELY IN THE INTERESTS OF THE GOVERNMENT TO AUTHORIZE PURCHASE OF THE BONDS IN THE MANNER CONTEMPLATED, THERE WOULD APPEAR TO BE SUFFICIENT JUSTIFICATION TO RESOLVE SUCH DOUBT IN THE INTEREST OF THE GOVERNMENT, PROVIDED THE GOVERNMENT CAN GET AN ADEQUATE ACQUITTANCE FOR THE PAYMENT OF THE SALARY OF THE EMPLOYEE.'

THE HOLDING IN THIS DECISION WAS NOT BASED ON ANY SAVINGS TO THE GOVERNMENT AS IMPLIED IN THE ASSISTANT SECRETARY'S LETTER. IN FACT, IN THE DECISION WE QUOTED LANGUAGE FROM 21 COMP. GEN. 268 TO THE EFFECT THAT THE PURCHASE OF BONDS THROUGH A PAYROLL DEDUCTION PLAN "MIGHT ENTAIL A CONSIDERABLE AMOUNT OF OTHERWISE UNNECESSARY CLERICAL AND ACCOUNTING WORK.' AS INDICATED IN THE ABOVE-QUOTED LANGUAGE, BECAUSE OF SECTIONS 3477 AND 3620, REVISED STATUTES, WE HAD SOME DOUBT AS TO THE AUTHORITY OF LAW TO PAY AN EMPLOYEE PARTLY IN THE FORM OF A CHECK AND PARTLY IN THE FORM OF A BOND REGISTERED IN THE NAME OF SOME OTHER PERSON. CONSIDERING ALL THE CIRCUMSTANCES, HOWEVER, WE FELT THAT THERE WAS A COMPELLING REASON (PROMOTING THE SALE OF WAR BONDS) FOR RESOLVING THAT DOUBT IN THE INTEREST OF THE GOVERNMENT. THE SAME COMPELLING REASON THAT EXISTED IN THAT CASE FOR RESOLVING ANY DOUBT AS TO THE LEGALITY OF THE PROPOSED PROCEDURE IN THE INTEREST OF THE GOVERNMENT IS NOT PRESENT IN THE INSTANT CASE. IN ANY EVENT, WE DO NOT REGARD THAT DECISION WHICH ADMITTEDLY WAS NOT FREE OF DOUBT AS CONTROLLING GENERALLY IN OTHER SITUATIONS.

OUR DECISION IN 31 COMP. GEN. 5, AUTHORIZING THE USE OF A BLANKET FORM OF RECEIPT AND RELEASE FROM CLAIM IN THE PURCHASE OF BONDS UNDER THE PROCEDURE AUTHORIZED IN 21 COMP. GEN. 942 CONCERNED ONLY A MATTER OF ADMINISTRATIVE PROCEDURE AND NOT THE LEGALITY OF PAYING AN EMPLOYEE PARTLY IN THE FORM OF A CHECK AND PARTLY IN THE FORM OF A BOND REGISTERED IN THE NAME OF SOME OTHER PERSON, WHICH ISSUE WAS DECIDED IN 21 COMP. GEN. 942.

AS INDICATED IN THE ASSISTANT SECRETARY'S LETTER, IT IS STATED IN 2 COMP. DEC. 652 THAT ,ALLOTMENTS OF PAY ARE NOT ASSIGNMENTS" AND THAT SUCH ALLOTMENTS "DO NOT GIVE A VESTED RIGHT TO THE MONEY ALLOTTED.' HOWEVER, IN THAT CASE THERE EXISTED A STATUTE SPECIFICALLY AUTHORIZING ALLOTMENTS OF PAY. MOREOVER, IT SEEMS TO US FROM THE LANGUAGE USED IN 2 COMP. DEC. 652 THAT THE COMPTROLLER OF THE TREASURY FELT THAT SPECIFIC STATUTORY AUTHORITY FOR ALLOTMENTS WAS REQUIRED IN ORDER TO OVERCOME THE PROVISIONS OF SECTION 3477, REVISED STATUTES (SEE ALSO 11 COMP. DEC. 790; ID. 36; AND 3 ID. 222). FOR EXAMPLE, NOTE THE FOLLOWING LANGUAGE FROM THE DECISION:

"ANSWER HAS BEEN WITHHELD PENDING A REPLY FROM YOU INDICATING THE AUTHORITY OF LAW FOR MAKING ALLOTMENTS BY OFFICERS, OR LEGISLATIVE ACTION RELIEVING SUCH ALLOTMENTS FROM THE PROVISIONS OF SECTION 3477 OF THE REVISED STATUTES, PROHIBITING ASSIGNMENTS OF CLAIMS AGAINST THE UNITED STATES, BY POWERS OF ATTORNEY OR OTHERWISE, EXCEPT WHEN ALLOWED, DUE, AND WARRANT ISSUED IN PAYMENT THEREOF.

"UNDER THE PROVISION OF THE ACT OF CONGRESS ABOVE QUOTED, ENACTED SINCE THE RECEIPT OF YOUR COMMUNICATION, THE SECRETARY OF THE NAVY IS AUTHORIZED TO PERMIT ALLOTMENTS BY OFFICERS OF THE NAVY AND THE MARINE CORPS UNDER SUCH REGULATIONS AS HE MAY PRESCRIBE.

"WHILE THIS LEGISLATION REMOVES THE APPARENT BAR HERETOFORE EXISTING AGAINST ANY ALLOTMENTS BY NAVAL AND MARINE OFFICERS, IT DOES NOT COVER THE SPECIAL OBJECTIONS TO THE CASE IN HAND AND UPON A FULL CONSIDERATION, IT IS CONCLUDED THAT FURTHER PAYMENTS CAN NOT BE MADE UNDER THE EXISTING ALLOTMENT. * * *"

IN 26 COMP. DEC. 855 THERE WAS NOT INVOLVED OR CONSIDERED EITHER SECTION 3477, REVISED STATUTES, OR SECTION 3620, REVISED STATUTES,SINCE THERE WAS SPECIFIC STATUTORY AUTHORITY FOR THE ALLOTMENTS CONSIDERED IN THAT CASE. FURTHER, WHILE PAYMENTS OF ALLOTMENTS TO A BANK FOR DEPOSIT TO THE ALLOTTOR'S ACCOUNT MAY BE FOR CERTAIN PURPOSES (SUCH AS RECOVERY BY THE GOVERNMENT), AND WHEN AUTHORIZED BY STATUTE,"EQUIVALENT OF PAYMENT TO THE SOLDIER HIMSELF," SUCH PAYMENTS ARE NOT, IN FACT, PAYMENTS TO THE SOLDIER, SO AS TO BRING THE PAYMENTS WITHIN THE REQUIREMENTS OF SECTION 3620, REVISED STATUTES, IF THE ALLOTMENTS ARE NOT AUTHORIZED BY STATUTE. THE ABOVE-QUOTED PHRASE IS USED IN 26 COMP. DEC. 855 TO SUPPORT THE PROPOSITION THAT AS BETWEEN A BANK, THE GOVERNMENT, AND A SOLDIER'S ESTATE, THE GOVERNMENT IS ENTITLED TO RECOVER FROM THE BANK AN ALLOTMENT PAYMENT MADE FOR DEPOSIT TO THE ALLOTTOR'S (SOLDIER-S) ACCOUNT, IN A CASE WHERE THE SOLDIER ALLOTTER HAD PREVIOUSLY DIED AND THE ALLOTMENT PAYMENT WAS ERRONEOUSLY MADE (BY THE GOVERNMENT) TO THE BANK. FURTHER, THE DECISION DOES NOT HOLD THAT ALLOTMENTS WOULD BE PROPER IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY THEREFOR.

IN ANY EVENT ASSUMING (BUT NOT DECIDING) THAT CERTAIN TYPES OF ALLOTMENTS ARE NOT ASSIGNMENTS SO AS TO COME WITHIN THE PROHIBITION OF SECTION 3477, REVISED STATUTES, IT IS OUR VIEW THAT SUCH ALLOTMENTS WOULD COME WITHIN THE PURVIEW OF SECTION 3620, REVISED STATUTES, WHICH, IN EFFECT, PROHIBITS A DISBURSING OFFICER FROM DRAWING A CHECK IN FAVOR OF OTHER THAN THE PERSON TO WHOM PAYMENT IS MADE, UNLESS OTHERWISE PROVIDED BY LAW. MOREOVER, THERE IS NOTHING IN THE DECISIONS REFERRED TO IN THE ASSISTANT SECRETARY'S LETTER WHICH MAY BE CONSIDERED AS AUTHORIZING ALLOTMENTS IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY.

IN VIEW OF THE FOREGOING, THE MATTERS PRESENTED BY THE ASSISTANT SECRETARY ARE ANSWERED AS FOLLOWS:

A. OUR DECISIONS OF NOVEMBER 12, 1959 AND AUGUST 3, 1960, B-141025, ARE SUSTAINED.

B. EITHER ONE OR BOTH OF THE STATUTES RELIED ON IN OUR NOVEMBER 12 AND AUGUST 3 DECISIONS RENDERS ILLEGAL NOT ONLY ISSUANCE OF A SINGLE GOVERNMENT CHECK TO A BANK COVERING NUMEROUS EMPLOYEES BUT ALSO THE ISSUANCE OF INDIVIDUAL SALARY CHECKS FOR EACH EMPLOYEE PAYABLE DIRECTLY TO A BANK, IN THE ABSENCE OF A STATUTE (OR VALID STATUTORY REGULATIONS) AUTHORIZING ALLOTMENTS FOR SUCH PURPOSE IN THE CASE OF THE EMPLOYEES INVOLVED.

C. OUR DECISIONS OF NOVEMBER 12 AND AUGUST 3 DO NOT PROHIBIT THE MAILING DIRECTLY TO BANKS INDIVIDUAL SALARY CHECKS MADE PAYABLE TO EMPLOYEES, FOR THE OBVIOUS REASON THAT SUCH CHECKS ARE MADE PAYABLE TO THE PERSON ENTITLED TO THE PAYMENT INVOLVED. FORWARDING A CHECK PAYABLE TO AN EMPLOYEE TO AN ADDRESS OR PLACE DESIGNATED BY THE EMPLOYEE IS NOT CONTRARY TO EITHER SECTION 3477, REVISED STATUTES OR SECTION 3620, REVISED STATUTES. HOWEVER, SEE IN THIS CONNECTION SECTION 5, TREASURY DEPARTMENT CIRCULAR NO. 21, AS REVISED MARCH 13, 1957.

D. WHERE THERE IS STATUTORY AUTHORITY FOR ALLOTMENTS OR REGULATIONS ISSUED PURSUANT TO STATUTORY AUTHORITY AUTHORIZING ALLOTMENTS, WE HAVE NO OBJECTION TO THE ISSUANCE TO A BANK OF A SINGLE GOVERNMENT SALARY CHECK COVERING NUMEROUS EMPLOYEES, IF IT IS ADMINISTRATIVELY DETERMINED TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO DO SO. ..END :