B-160799, MAY 20, 1968

B-160799, MAY 20, 1968

TO MRS. MARGUERITE U. LYLES:

WE REFER TO YOUR LETTER OF APRIL 5, 1968, YOUR REFERENCE A:F:AF, BY WHICH YOU REQUEST OUR ADVANCE DECISION WHETHER YOU MAY PROPERLY CERTIFY FOR PAYMENT THE VOUCHER OF MR. DONALD J. BAYNES, AN EMPLOYEE OF THE INTERNAL REVENUE SERVICE, TREASURY DEPARTMENT, TO REIMBURSE HIM CERTAIN EXPENSES HE INCURRED IN PURCHASING A RESIDENCE AT HIS NEW OFFICIAL STATION INCIDENT TO HIS TRANSFER FROM YOUNGSTOWN, OHIO, TO WASHINGTON, D.C., WHICH WAS EFFECTIVE IN SEPTEMBER 1966.

MR. BAYNES CONTRACTED ON APRIL 29 AND MAY 1, 1967, TO PURCHASE A RESIDENCE NOT YET CONSTRUCTED. CONSTRUCTION OF THE RESIDENCE WAS COMPLETED IN DECEMBER OF THAT YEAR AND "SETTLEMENT" WAS HELD ON JANUARY 4, 1968.

YOU REQUEST OUR DECISION AS TO WHETHER PAYMENT OF THE AMOUNTS OTHERWISE ALLOWABLE INCIDENT TO THAT TRANSACTION MAY PROPERLY BE CERTIFIED FOR PAYMENT IN VIEW OF SECTION 4.1D OF BUREAU OF THE BUDGET CIRCULAR NO. A-56 WHICH AUTHORIZES REIMBURSEMENT OF CERTAIN EXPENSES INVOLVED IN THE SALE OR PURCHASE OF A RESIDENCE PROVIDED:

"THE SETTLEMENT DATES FOR THE SALE AND PURCHASE OR LEASE TERMINATION TRANSACTIONS FOR WHICH REIMBURSEMENT IS REQUESTED ARE NOT LATER THAN ONE YEAR AFTER THE DATE ON WHICH THE EMPLOYEE REPORTED FOR DUTY AT THE NEW OFFICIAL STATION, EXCEPT THAT AN APPROPRIATE EXTENSION OF TIME MAY BE AUTHORIZED BY THE HEAD OF THE DEPARTMENT OR HIS DESIGNEE WHEN SETTLEMENT IS NECESSARILY DELAYED BECAUSE OF LITIGATION.'

YOU REFER TO OUR DECISION 46 COMP. GEN. 677 IN WHICH WE STATED IN PART:

"APPARENTLY THE PURCHASER BY VIRTUE OF THE CONTRACT OF DECEMBER 16 TOOK POSSESSION OF AND EQUITABLE TITLE TO THE PROPERTY IN QUESTION. UNDERSTAND THAT THE TRANSACTION INVOLVED IS KNOWN AS A -CONTRACT FOR DEED- AND THAT IN SUCH A TRANSACTION THE SALE IS CONSUMMATED AT THE TIME THE CONTRACT IS EXECUTED EVEN THOUGH THE TRANSFER OF LEGAL TITLE TO THE PROPERTY IS DEFERRED UNTIL THE CONTRACT IS FULFILLED. WE NOTE IN THAT CONNECTION THAT THE REAL ESTATE AGENT'S COMMISSION WAS CHARGED TO MR. ANDERSON ON THE BASIS OF THE FACT THAT THE CONTRACT HAD BEEN EXECUTED.

"WE DO NOT FIND THAT THE TERM -SETTLEMENT DATE- AS USED IN SECTION 4.1D OF CIRCULAR NO. A-56 HAS A DEFINITE OR FIXED MEANING. IN THE TRANSACTION HERE INVOLVED IT APPEARS THAT SALE OF THE PROPERTY WAS ACCOMPLISHED BY THE EXECUTION OF THE CONTRACT. NO CONDITION OTHER THAN THE PAYMENT OF THE SECOND LIEN NOTE WAS IMPOSED UPON LEGAL TRANSFER OF TITLE. IN THE CIRCUMSTANCES WE CONCLUDE THAT THE SETTLEMENT DATE INVOLVED IN THIS TRANSACTION WAS THE DATE THE CONTRACT WAS EXECUTED.'

IN THAT CASE NO SEPARATE "SETTLEMENT DATE" WAS INVOLVED IN THE PURCHASE BECAUSE THE TRANSACTION WAS CONSUMMATED AT THE TIME THE "CONTRACT FOR DEED" WAS SIGNED. IN THIS CASE THE SALES CONTRACT REFERS REPEATEDLY TO THE "TIME OF SETTLEMENT" AND THE "DATE OF SETTLEMENT.' AS USED THEREIN, SETTLEMENT DID OCCUR ON JANUARY 4, 1968. FOR PURPOSES OF THE TRANSACTION INVOLVED IN THIS CASE THERE IS NO BASIS TO TREAT A DATE OTHER THAN JANUARY 4 AS THE "SETTLEMENT DATE.' SEE B 163700, MAY 6, 1968, COPY HEREWITH.

SINCE REGULATIONS CONTAINED IN THE BUREAU OF THE BUDGET CIRCULAR ARE CONTROLLING, REIMBURSEMENT OF THE COSTS INCURRED BY MR. BAYNES IN THE PURCHASE OF A RESIDENCE AT HIS NEW OFFICIAL STATION, SETTLEMENT FOR WHICH WAS MORE THAN ONE YEAR AFTER HE REPORTED FOR DUTY, WOULD NOT BE PROPER.

THEREFORE, THE VOUCHER WHICH IS RETURNED TOGETHER WITH SUPPORTING PAPERS MAY NOT BE CERTIFIED FOR PAYMENT.