B-123992, MARCH 5, 1956, 35 COMP. GEN. 501

B-123992, MARCH 5, 1956, 35 COMP. GEN. 501

APPOINTMENTS - MILITARY PERSONNEL - RECOVERY OF ERRONEOUS PAYMENTS FOR CREDITING SERVICE UNDER TERMINATED APPOINTMENTS ALTHOUGH RECOVERY OF OVERPAYMENTS OF ACTIVE-DUTY PAY OR RETIRED PAY RESULTING FROM THE ERRONEOUS CREDIT OF COMMISSIONED SERVICE IN THE ARMY OR AIR FORCE, WITHOUT COMPONENT, SUBSEQUENT TO JUNE 30, 1948, AND PRIOR TO JANUARY 1, 1956, NEED NOT BE MADE IN VIEW OF THE DISPROPORTIONATE ADMINISTRATIVE COSTS WHICH WOULD BE INCURRED, AN ADJUSTMENT IN THE RETIRED PAY ACCOUNTS OF MEMBERS WHO WERE ERRONEOUSLY CREDITED WITH SERVICE, AND THE DISCONTINUANCE OF RETIRED PAY TO MEMBERS NOT ENTITLED THERETO, SHOULD BE MADE TO PREVENT POTENTIAL OVERPAYMENTS IN THE FUTURE. 35 COMP. GEN. 191, AMPLIFIED.

TO THE SECRETARY OF DEFENSE, MARCH 5, 1956:

REFERENCE IS MADE TO LETTER OF DECEMBER 22, 1955, FROM THE ASSISTANT SECRETARY OF DEFENSE ( COMPTROLLER), REQUESTING A DECISION ON CERTAIN QUESTIONS WHICH HAVE ARISEN AS A RESULT OF OUR DECISION OF OCTOBER 7, 1955, B-123992, 35 COMP. GEN. 191, IN WHICH IT WAS HELD THAT ALL APPOINTMENTS IN THE ARMY OF THE UNITED STATES WITHOUT COMPONENT MADE UNDER THE ACT OF SEPTEMBER 22, 1941, 55 STAT. 728, 10 U.S.C. 484, WHICH WERE NOT EXTENDED BY OTHER PROVISIONS OF LAW, TERMINATED ON JUNE 30, 1948.

THE QUESTIONS ON WHICH A DECISION IS REQUESTED, AS SET FORTH AND DISCUSSED IN COMMITTEE ACTION NO. 133 OF THE MILITARY PAY AND ALLOWANCE COMMITTEE, DEPARTMENT OF DEFENSE, ARE AS FOLLOWS:

QUESTION 1.

DOES DECISION B-123992 DATED 7 OCTOBER 1955 BY THE ASSISTANT COMPTROLLER GENERAL TO THE SECRETARY OF DEFENSE REQUIRE THAT THE ARMED FORCES ADJUST THE ACCOUNTS OF PERSONNEL RETIRED UNDER TITLE III OF THE ARMY AND AIR FORCE VITALIZATION AND RETIREMENT EQUALIZATION ACT OF 1948 (62 STAT. 1085) WHO WERE ERRONEOUSLY CREDITED WITH SERVICE IN THE COMPUTATION OF RETIRED PAY FOR COMMISSION SERVICE IN THE ARMY OR AIR FORCE OF THE UNITED STATES, WITHOUT COMPONENT, SUBSEQUENT TO 30 JUNE 1948?

QUESTION 2:

IF THE ANSWER TO QUESTION 1 IS IN THE AFFIRMATIVE, DOES DECISION B 123992, SUPRA, REQUIRE:

A. COLLECTION OF OVERPAYMENTS MADE TO SUCH RETIRED PERSONNEL?

B. REMOVAL FROM THE RETIRED ROLLS, WHERE APPLICABLE, AND DISCONTINUANCE OF RETIRED PAY TO MEMBERS WHO ARE NOT ENTITLED TO BENEFITS UNDER THE ACT OF 29 JUNE 1948, SUPRA, BY REASON OF FAILURE TO COMPLETE 20 YEARS OF SATISFACTORY FEDERAL SERVICE DUE TO THE DENIAL OF CREDIT FOR COMMISSIONED SERVICE IN THE ARMY AND AIR FORCE OF THE UNITED STATES, WITHOUT COMPONENT?

QUESTION 3:

DOES DECISION B-123992, SUPRA, REQUIRE THAT THE ARMED FORCES INITIATE COLLECTION ACTION FOR OVERPAYMENTS TO SEPARATED PERSONNEL RESULTING FROM THE ERRONEOUS CREDIT FOR PAY PURPOSES OF COMMISSIONED SERVICE IN THE ARMY OR AIR FORCE OF THE UNITED STATES, WITHOUT COMPONENT, SUBSEQUENT TO 30 JUNE 1948?

QUESTION 4:

MAY THE ARMED FORCES BE PERMITTED TO ADJUST THE PAY ACCOUNTS OF MEMBERS ON ACTIVE DUTY WHO ARE AFFECTED BY DECISION B-123992, SUPRA, AS OF 1 JANUARY 1956, WITHOUT BEING REQUIRED TO TAKE COLLECTION ACTION FOR OVERPAYMENTS PRIOR TO THAT DATE RESULTING FROM THE ERRONEOUS CREDIT FOR PAY PURPOSES OF SUCH COMMISSIONED SERVICE?

THE COMMITTEE DISCUSSION INDICATES THAT FEW, IF ANY, AIR FORCE PERSONNEL ARE AFFECTED BY THE DECISION OF OCTOBER 7, 1955, SINCE IT APPEARS THAT THE DEPARTMENT OF THE AIR FORCE HAS NOT AUTHORIZED THE CREDITING OF SERVICE OF THE TYPE DENIED BY THAT DECISION. WHILE THE NUMBER OF PERSONS WHO HAVE BEEN RETIRED UNDER TITLE III OF THE ACT OF JUNE 29, 1948, 62 STAT. 1087, 34 U.S.C. 440H, AND WHO ARE AFFECTED BY THAT DECISION IS RELATIVELY SMALL (ESTIMATED IN THE COMMITTEE DISCUSSION TO BE ABOUT 350 INCLUDING A SMALL BUT UNDETERMINED NUMBER WHO MAY BE INELIGIBLE TO RECEIVE ANY RETIRED PAY BECAUSE OF THE DECISION), IT IS STATED THAT A SCREENING OF APPROXIMATELY 80,000 RETIRED PAY ACCOUNTS WOULD BE REQUIRED IN ORDER TO DISCOVER THE NAMES OF THE PERSONS INVOLVED AND THAT THE OVERPAYMENTS MADE TO SUCH PERSONS ARE RELATIVELY SMALL.

IT IS INDICATED, ALSO, THAT SCREENING OF APPROXIMATELY 2,000,000 RECORDS OF COMMISSIONED AND WARRANT OFFICERS AND 978,000 SERVICE RECORDS OF ENLISTED PERSONS ON ACTIVE DUTY WOULD BE REQUIRED TO DETERMINE THE EXACT MEMBERS WHOSE PAY ACCOUNTS OR RECORDS SHOULD BE ADJUSTED AS A RESULT OF THE DECISION OF OCTOBER 7, 1955. IT IS ESTIMATED THAT THE COST OF SUCH SCREENING ACTION WOULD EXCEED $1,200,000, AND IT IS THE ADMINISTRATIVE VIEW THAT THE OVERPAYMENTS WHICH MIGHT BE DISCOVERED WOULD NOT EQUAL OR APPROXIMATE THE COST OF FINDING THEM. IT IS CONCEDED THAT THE OVERPAYMENTS WHICH WOULD BE MADE IN THE FUTURE TO PERSONS ON ACTIVE DUTY, IF THEIR PAY ACCOUNTS ARE NOT ADJUSTED, WOULD FAR EXCEED ANY ADJUSTMENT COSTS AND, THEREFORE, IT IS INDICATED THAT ALL PAY ACCOUNTS OF ACTIVE DUTY MEMBERS WILL BE ADJUSTED AND CORRECTED AS OF JANUARY 1, 1956, IN ORDER THAT PAYMENTS FOR PERIODS AFTER THAT DATE (AS THE QUESTIONABLE CASES ARE DISCOVERED BY SCREENING NEWLY SUBMITTED STATEMENTS OF SERVICE) WILL NOT INCLUDE CREDIT FOR THE AFFECTED PERIODS. IT IS REPORTED FURTHER THAT THE SCREENING OPERATION CONTEMPLATED (AND APPARENTLY FORMING THE BASIS FOR THE ABOVE FIGURES) WOULD NOT BE EFFECTIVE IN DETERMINING OVERPAYMENTS OF ACTIVE-DUTY PAY WHICH HAVE BEEN MADE TO PERSONNEL NOW SEPARATED BASED ON PURPORTED MEMBERSHIP IN THE ARMY OF THE UNITED STATES WITHOUT COMPONENT AFTER JUNE 30, 1948.

AS INDICATED IN THE DECISION OF OCTOBER 7, 1955, THE ANSWER TO THE PRIMARY QUESTION THERE INVOLVED WAS NOT SO PLAIN AS TO REQUIRE THAT THE VIEWS OF THE DEPARTMENT OF THE ARMY RESPECTING SUCH QUESTION BE CONSIDERED WHOLLY UNTENABLE. FOR THAT REASON AND IN VIEW OF THE REPRESENTATIONS MADE RESPECTING THE DISPROPORTIONATE ADMINISTRATIVE COSTS WHICH WOULD BE INCURRED TO RECOVER ALL OVERPAYMENTS INVOLVED, WE FEEL JUSTIFIED IN SANCTIONING THE PROPOSAL TO TAKE NO ACTION TO RECOVER OVERPAYMENTS OF ACTIVE-DUTY PAY OR RETIRED PAY WHICH WERE MADE PRIOR TO JANUARY 1, 1956, ON THE BASIS OF THE DEPARTMENT OF THE ARMY'S VIEW THAT APPOINTMENTS IN THE ARMY OF THE UNITED STATES WITHOUT COMPONENT CONTINUED TO BE VALID AND EFFECTIVE UNTIL APRIL 1, 1953. ACCORDINGLY, QUESTIONS 2A AND 3 ARE ANSWERED IN THE NEGATIVE AND QUESTION 4 IS ANSWERED IN THE AFFIRMATIVE.

WE ARE UNABLE TO ASCERTAIN WITH REASONABLE CERTAINTY, FROM THE STATEMENTS MADE IN COMMITTEE ACTION NO. 133, THAT THE POTENTIAL OVERPAYMENTS IN THE FUTURE TO SEVERAL HUNDRED PERSONS NOW IN RECEIPT OF RETIRED PAY UNDER TITLE III OF THE ACT OF JUNE 29, 1948, WOULD NOT BE LIKELY TO EXCEED THE COST OF SCREENING THE NECESSARY RETIRED PAY ACCOUNTS, IT BEING NOTED THAT THE 4,000 OR MORE ARMY OR FORM ARMY PERSONS NOW RECEIVING RETIRED PAY UNDER TITLE III APPEAR TO BE IDENTIFIABLE, BY RETIREMENT CODE, AMONG THE NAMES LISTED UNDER " AUS AND OTHER RETIRED LISTS" IN VOLUME II, OFFICIAL ARMY REGISTER. IN THE ABSENCE OF FACTS PLAINLY SHOWING THAT THE COST OF PREVENTING FUTURE OVERPAYMENTS OF TITLE III RETIRED PAY WOULD EXCEED IN A SUBSTANTIAL MEASURE THE ESTIMATED AMOUNTS OF SUCH OVERPAYMENTS, WE ARE CONSTRAINED TO ANSWER QUESTIONS 1 AND 2B IN THE AFFIRMATIVE.

IT IS REALIZED THAT THE DECISION OF OCTOBER 7, 1955, AS AMPLIFIED BY THIS DECISION, MAY REQUIRE THAT A SMALL NUMBER OF PERSONS WHO WERE IN RECEIPT OF TITLE III RETIRED PAY PRIOR TO OCTOBER 7, 1955, BE REMOVED FROM THE RETIRED PAYROLLS. IT IS REALIZED FURTHER THAT THERE MAY BE A SMALL NUMBER OF OTHER PERSONS WHO HAVE ADJUSTED THEIR AFFAIRS ON THE BASIS THAT WITHOUT FURTHER SERVICE THEY WILL BE ENTITLED TO SUCH RETIRED PAY UPON REACHING THE AGE OF 60 YEARS AND WHO WILL BE PRECLUDED FROM RECEIVING SUCH RETIRED PAY BY REASON OF THE DECISION. AFTER WEIGHING THE CIRCUMSTANCES AND CONSIDERING THE EQUITIES IN THE CASES OF SUCH TWO CLASSES OF PERSONS, WE CONSIDER IT APPROPRIATE TO SAY THAT, IF IT BE ADMINISTRATIVELY DETERMINED THAT A SATISFACTORY ADJUSTMENT OF THE STATUS OF SUCH PERSONS CANNOT BE ACCOMPLISHED THROUGH ACTION BY THE ARMY BOARD FOR CORRECTION OF MILITARY RECORDS, WE WOULD NOT OBJECT TO A PROPOSAL OF LEGISLATION TO PERMIT SUCH PERSONS TO COUNT FOR RETIRED PAY ELIGIBILITY PURPOSES, UNDER TITLE III, ANY "SERVICE" WHICH THEY ARE PRECLUDED FROM COUNTING UNDER THE DECISION OF OCTOBER 7, 1955, BUT WHICH OTHERWISE WOULD BE CREDITABLE FOR THAT PURPOSE. IN MOST, IF NOT ALL, OF SUCH CASES ONLY THE ONE-YEAR PERIOD FROM JULY 1, 1948, TO JUNE 30, 1949, WOULD BE INVOLVED (INSOFAR AS THE MATTER OF ELIGIBILITY FOR SOME RETIRED PAY IS CONCERNED), SINCE ANY YEAR AFTER JUNE 30, 1949, IS CREDITABLE AS A YEAR OF SATISFACTORY FEDERAL SERVICE UNDER TITLE III ONLY IF THE PERSON CONCERNED, DURING SUCH YEAR, HAS BEEN CREDITED WITH A MINIMUM OF 50 RETIREMENT POINTS AS A RESULT OF THE PERFORMANCE OF ACTIVE FEDERAL SERVICE, OR ACTIVE PARTICIPATION IN RESERVE ACTIVITIES, OR BOTH. 10 U.S.C. 1036A.