B-218990.2, SEP 8, 1986, 65 COMP.GEN. 835

B-218990.2: Sep 8, 1986

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TELEPHONES - PRIVATE RESIDENCES - PROHIBITION - EXCEPTIONS USE OF APPROPRIATED FUNDS TO INSTALL TELEPHONE EQUIPMENT IN THE RESIDENCES OF INTERNAL REVENUE SERVICE EMPLOYEES TO BE USED FOR PORTABLE COMPUTER DATA TRANSMISSION IS PROHIBITED BY 31 U.S.C. THERE ARE CIRCUMSTANCES. INVOLVING TELEPHONE SERVICE OF LIMITED USE OR WHEN THERE ARE NUMEROUS SAFEGUARDS AND THE SERVICE IS ESSENTIAL. AN EXCEPTION TO THE PROHIBITION IS WARRANTED. 1986: THIS DECISION IS IN RESPONSE TO A REQUEST FOR GUIDANCE FROM MR. THE CIRCUMSTANCES POSED BY ASSISTANT COMMISSIONER WASSENAAR INVOLVE A GROUP OF EIGHT IRS CRIMINAL INVESTIGATORS IN NEW YORK CITY WHO HAVE BEEN AUTHORIZED TO WORK FROM THEIR RESIDENCES WHENEVER POSSIBLE.

B-218990.2, SEP 8, 1986, 65 COMP.GEN. 835

TELEPHONES - PRIVATE RESIDENCES - PROHIBITION - EXCEPTIONS USE OF APPROPRIATED FUNDS TO INSTALL TELEPHONE EQUIPMENT IN THE RESIDENCES OF INTERNAL REVENUE SERVICE EMPLOYEES TO BE USED FOR PORTABLE COMPUTER DATA TRANSMISSION IS PROHIBITED BY 31 U.S.C. SEC. 1348(A)(1) (1982). HOWEVER, THERE ARE CIRCUMSTANCES, INVOLVING TELEPHONE SERVICE OF LIMITED USE OR WHEN THERE ARE NUMEROUS SAFEGUARDS AND THE SERVICE IS ESSENTIAL, WHEN THE PROHIBITION HAS BEEN HELD INAPPLICABLE. HERE, IRS HAS DEMONSTRATED THE ESSENTIAL NATURE OF THE SERVICE, AND AN EXCEPTION TO THE PROHIBITION IS WARRANTED. PRIOR TO INSTALLING THE EQUIPMENT, IRS SHOULD ESTABLISH SAFEGUARDS TO PREVENT MISUSE.

MATTER OF: INTERNAL REVENUE SERVICE, INSTALLATION OF TELEPHONE EQUIPMENT IN EMPLOYEE RESIDENCES, SEPTEMBER 8, 1986:

THIS DECISION IS IN RESPONSE TO A REQUEST FOR GUIDANCE FROM MR. RICHARD C. WASSENAAR, ASSISTANT COMMISSIONER (CRIMINAL INVESTIGATION) OF THE INTERNAL REVENUE SERVICE (IRS). ASSISTANT COMMISSIONER WASSENAAR REQUESTS A DECISION REGARDING THE PROPRIETY OF INSTALLING TELEPHONES IN THE RESIDENCES OF CERTAIN IRS CRIMINAL INVESTIGATORS IN NEW YORK CITY TO BE USED FOR PORTABLE COMPUTER DATA TRANSMISSION. FOR THE REASONS SET FORTH BELOW, WE CONCLUDE THAT THE INSTALLATION OF THE TELEPHONE EQUIPMENT IN QUESTION IN THE CIRCUMSTANCES PRESENTED TO US FOR REVIEW WOULD BE PROPER, PROVIDED THAT IRS ESTABLISHES SUFFICIENT SAFEGUARDS TO PREVENT MISUSE.

THE CIRCUMSTANCES POSED BY ASSISTANT COMMISSIONER WASSENAAR INVOLVE A GROUP OF EIGHT IRS CRIMINAL INVESTIGATORS IN NEW YORK CITY WHO HAVE BEEN AUTHORIZED TO WORK FROM THEIR RESIDENCES WHENEVER POSSIBLE, USING THE TELECOMMUNICATIONS CAPABILITIES OF PORTABLE COMPUTERS TO COMMUNICATE WITH THE DISTRICT OFFICE COMPUTER SYSTEM. THIS PROGRAM IS DESIGNED TO BENEFIT BOTH THE IRS AND THE INDIVIDUAL AGENTS. THUS THE "PROJECT SUMMARY" INCLUDED WITH THE IRS SUBMISSION INDICATES THAT THE PROGRAM WILL HELP TO DECREASE "UNPRODUCTIVE STAFF HOURS SPENT TRAVELLING" AS WELL AS "AGENT STRESS AND FATIGUE BROUGHT ON BY THE TYPE OF TRAVEL ENCOUNTERED IN NEW YORK CITY."

ACCORDING TO THE SUBMISSION, IT WAS NECESSARY FOR IRS TO INSTALL TELEPHONE LINES AND TELEPHONE EQUIPMENT IN THE RESIDENCES OF THE AGENTS PARTICIPATING IN THE PROGRAM FOR THE FOLLOWING REASONS:

(1) FOR SECURITY PURPOSES, THE TELEPHONE INSTRUMENT HAS TO BE LOCATED IN THE AREA SET UP BY THE AGENTS AS THEIR WORKING SPACE. THIS WORKING SPACE IS LOCATED AS FAR AWAY AS POSSIBLE FROM THE MAIN LIVING AREA.

(2) THE INSTALLATION OF A DEDICATED LINE PREVENTS THE POSSIBILITY OF OTHER HOUSEHOLD MEMBERS INADVERTENTLY PICKING UP AN EXTENSION PHONE AND OVERHEARING A PORTION OF A DISCUSSION OF A CASE RELATED MATTER OR MACHINE RECORDED DICTATION.

(3) INASMUCH AS THIS PHONE USE IS CONSIDERED 'COMMERCIAL' BY THE TELEPHONE COMPANY, AND THEREFORE BILLED AT A HIGH RATE, IT WOULD NOT BE PRACTICAL TO USE THE AGENT'S PERSONAL PHONE.

(4) A SEPARATE LINE WAS NEEDED SO AS NOT TO TIE UP THE AGENT'S PERSONAL TELEPHONE WITH OFFICIAL BUSINESS. ALL AGENTS IN THE GROUP ARE REQUIRED TO MAINTAIN A PERSONAL TELEPHONE FOR PERSONAL CALLS. THE SEPARATE LINE IS FOR OFFICIAL CALLS ONLY."

BACKGROUND: THE USE OF APPROPRIATED FUNDS TO INSTALL TELEPHONES IN PRIVATE RESIDENCES IS PROHIBITED BY 31 U.S.C. SEC. 1348(A)(1)(1982):

"EXCEPT AS PROVIDED IN THIS SECTION, APPROPRIATIONS ARE NOT AVAILABLE TO INSTALL TELEPHONES IN PRIVATE RESIDENCES OR FOR TOLLS OR OTHER CHARGES FOR TELEPHONE SERVICE FROM PRIVATE RESIDENCES."

THIS STATUTE GENERALLY CONSTITUTES A MANDATORY PROHIBITION AGAINST THE USE OF APPROPRIATED FUNDS TO PAY ANY PART OF THE EXPENSE OF FURNISHING TELEPHONE SERVICE TO AN EMPLOYEE IN A PRIVATE RESIDENCE, WITHOUT REGARD TO THE DESIRABILITY OF SUCH SERVICE FROM AN OFFICIAL STANDPOINT. SEE, E.G., 35 COMP.GEN. 28 (1956); 15 COMP.GEN. 885 (1936). WE HAVE INVOKED THE STATUTORY PROHIBITION EVEN WHEN THE EMPLOYEES WHO WOULD USE THE TELEPHONE SERVICE HAD NO OFFICE OUT OF WHICH THEY COULD WORK AND WERE REQUIRED TO WORK OUT OF THEIR HOMES. B-130288, FEBRUARY 27, 1957. SEE ALSO 26 COMP.GEN. 668 (1947). IN A RECENT DECISION, WE HELD THAT THE STATUTORY PROHIBITION APPLIED EVEN WHEN THE VOLUME OF GOVERNMENT BUSINESS EFFECTIVELY PRECLUDED THE EMPLOYEE'S FAMILY FROM USING HIS PERSONAL TELEPHONE. 59 COMP.GEN. 723 (1980).

NONETHELESS, ALTHOUGH GENERALLY THE STATUTE HAS BEEN STRICTLY APPLIED, THERE HAVE BEEN INSTANCES IN WHICH WE HAVE DETERMINED THAT THE PROHIBITION WAS NOT APPLICABLE. EXCEPTIONS HAVE BEEN RECOGNIZED IN TWO GENERAL CIRCUMSTANCES. THE FIRST GENERAL CIRCUMSTANCE IS WHEN THE TELEPHONE IS INSTALLED IN GOVERNMENT-OWNED QUARTERS SERVING AS A RESIDENCE AND OFFICE SIMULTANEOUSLY. SEE, E.G., 4 COMP.GEN. 891 (1925) (INSTALLATION OF A TELEPHONE IN AN OFFICE IN A GOVERNMENT-OWNED HOUSE PROVIDED TO A LIGHTHOUSE SUPERINTENDENT); 53 COMP.GEN. 195 (1973) (INSTALLATION OF TELEPHONE IN AN ARMY BARRACKS). THE SECOND GENERAL CIRCUMSTANCE IN WHICH WE HAVE RECOGNIZED THE INAPPLICABILITY OF THE STATUTORY PROHIBITION IS WHEN THE TELEPHONE SERVICE IS ONE OF LIMITED USE OR IT IS A SERVICE INVOLVING NUMEROUS SAFEGUARDS AND THE SEPARATE SERVICE IS ESSENTIAL. SEE, E.G., 32 COMP.GEN. 431 (1953) (INSTALLATION OF A SPECIAL TELEPHONE IN THE RESIDENCE OF THE PEARL HARBOR FIRE MARSHALL); B-128114, JUNE 29, 1956 (INSTALLATION OF DIRECT TELEPHONE LINES FROM AIR FORCE COMMAND POST TO RESIDENCES OF HIGH OFFICIALS).

IN 61 COMP.GEN. 214 (1982), WE APPROVED THE INSTALLATION OF FEDERAL SECURE TELEPHONE SERVICE (FSTS) IN THE RESIDENCES OF CERTAIN HIGH LEVEL CIVILIAN AND MILITARY OFFICIALS TO ENSURE SECURE COMMUNICATIONS REQUIRED FOR REASONS OF NATIONAL SECURITY. THE FSTS HAD SEVERAL UNIQUE FEATURES WHICH SUPPORTED OUR HOLDING. THE TELEPHONES REQUIRED A SPECIAL KEY AND COULD BE PROGRAMMED TO RESPOND ONLY TO A USER CODE. THE AGENCY HEAD WAS TO CERTIFY THAT THE TELEPHONES WERE TO BE USED FOR OFFICIAL BUSINESS ONLY AND THE SYSTEM WAS SUBJECT TO AUDIT TO ENSURE THAT ONLY OFFICIAL BUSINESS WAS TRANSACTED. FINALLY, THE SYSTEM WAS TO BE INSTALLED IN THE RESIDENCES OF RELATIVELY FEW OFFICIALS WHOSE STATUS WOULD MINIMIZE THE LIKELIHOOD OF ABUSE. IN CONCLUDING THAT THE STATUTORY PROHIBITION WAS NOT APPLICABLE TO THE INSTALLATION OF FSTS, WE DISTINGUISHED SEVERAL PREVIOUS CASES IN WHICH THE PROHIBITION HAD BEEN STRICTLY APPLIED:

"THE CITED CASES, HOWEVER, INCLUDING 59 COMP.GEN. 723, SUPRA, ARE DISTINGUISHABLE FROM THE PROPOSAL UNDER CONSIDERATION HERE. IN THE FIRST PLACE, NO PROVISIONS WERE MADE IN THOSE CASES TO ASSURE THAT PRIVATE CALLS WOULD NOT BE MADE SINCE THE TELEPHONES TO BE INSTALLED IN PRIVATE RESIDENCES WERE NO DIFFERENT THAN THOSE NORMALLY INSTALLED FOR PRIVATE USE. IN THIS CASE, ACCESS AND USE WILL BE CONTROLLED. SECONDLY, THE TELEPHONES IN THE CITED CASES, WHILE DESIRABLE FROM AN OFFICIAL STANDPOINT, WERE; IN ESSENCE, TO SERVE AS A CONVENIENCE FOR THE GOVERNMENT OFFICIALS INVOLVED. THIS IS BECAUSE OFFICIAL CALLS TO AND FROM THE OFFICIALS' RESIDENCES COULD HAVE BEEN PLACED AND RECEIVED, IF NECESSARY, FROM THEIR PRIVATE TELEPHONE, EVEN THOUGH THIS MIGHT HAVE CAUSED SOME PERSONAL INCONVENIENCE. HERE, THE OFFICIAL CALLS TO OR FROM PRIVATE RESIDENCES COULD NOT BE MADE OVER PRIVATE TELEPHONES BECAUSE OF THE NEED FOR SECURITY."

ANALYSIS: IF THE INSTALLATION OF THE EQUIPMENT IN THE CASE AT HAND IS TO BE PERMISSIBLE, IT MUST FALL WITHIN ONE OF THE TWO RECOGNIZED EXCEPTIONS TO THE PROHIBITION OF 31 U.S.C. SEC. 1348, DISCUSSED ABOVE. THE FIRST EXCEPTION, INSTALLATION OF A TELEPHONE IN GOVERNMENT-OWNED QUARTERS, IS CLEARLY INAPPLICABLE IN THE CIRCUMSTANCES HERE UNDER REVIEW, WHICH INVOLVE THE INSTALLATION OF TELEPHONE EQUIPMENT IN PRIVATELY-OWNED RESIDENCES.

WE CONCLUDE, HOWEVER, THAT THE SECOND EXCEPTION INSTALLATION OF ESSENTIAL TELEPHONE SERVICE OF LIMITED USE OR INVOLVING NUMEROUS SAFEGUARDS, WOULD BE APPLICABLE IN THE INSTANT CASE, PROVIDED THAT IRS ESTABLISHES SUFFICIENT SAFEGUARDS TO PREVENT MISUSE OF THE EQUIPMENT. THE IRS HAS ADEQUATELY DEMONSTRATED THAT THE INSTALLATION OF A DEDICATED LINE IS ESSENTIAL TO MAINTAIN THE SECURITY OF INFORMATION REGARDING CONFIDENTIAL TAX INVESTIGATIONS. THE SUBMISSION OF IRS DOES NOT INDICATE, HOWEVER, WHAT SAFEGUARDS IRS CONTEMPLATES TO PREVENT MISUSE OF THE EQUIPMENT. THE FEDERAL SECURE TELEPHONE CASE, 61 COMP.GEN. 214 (1982), DISCUSSED ABOVE, THE EQUIPMENT IN QUESTION HAD CERTAIN MECHANICAL AND ELECTRONIC SAFEGUARDS AND WAS SUBJECT TO AUDIT. HERE, IRS MUST ESTABLISH SIMILAR SAFEGUARDS. THE INTENT OF 31 U.S.C. SEC. 1348 IS TO ENSURE THAT THE GOVERNMENT DOES NOT BEAR THE COST OF PRIVATE USE OF TELEPHONE EQUIPMENT BY GOVERNMENT EMPLOYEES. SEE 63 M.S. COMP.DEC. (1912) CITED IN 61 COMP.GEN. 214, 216 (1982). ACCORDINGLY, A SYSTEM OF SAFEGUARDS WOULD BE SUFFICIENT IF IT, AT A MINIMUM, EFFECTIVELY ENSURED THAT THE EQUIPMENT IN QUESTION COULD NOT BE PUT TO AN EMPLOYEE'S PERSONAL USE, RESULTING IN ADDED EXPENSE TO THE GOVERNMENT.

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