B-148844, JUN. 14, 1962

B-148844, JUN. 14, 1962

TO MR. GARDNER PATTERSON:

ON APRIL 25, 1962, YOU REQUESTED OUR REVIEW OF THE GOVERNMENT'S CLAIM FOR $77.48, REPRESENTING THE BALANCE OF AN ADVANCE OF FUNDS MADE TO YOU BY THE INTERNATIONAL COOPERATION ADMINISTRATION INCIDENT TO YOUR SERVICE WITH THAT AGENCY.

IT APPEARS THAT WHILE YOU WERE EMPLOYED AT ANKARA, TURKEY, IN 1955, YOU REQUESTED AND RECEIVED AN ADVANCE AGAINST YOUR QUARTERS ALLOWANCE TO COVER THE RENTAL ON YOUR HOUSING WHICH WE UNDERSTAND WAS MORE READILY AVAILABLE UPON PAYMENT FOR SEVERAL MONTHS IN ADVANCE.

IN ORDER TO MAKE THE ADVANCE TO YOU IN LOCAL CURRENCY THE AGENCY USED ITS DOLLAR APPROPRIATION TO PURCHASE TURKISH LIRA. THE LIRA WAS BOUGHT FROM A SPECIAL FUND IN THE UNITED STATES TREASURY AND WAS NOT AVAILABLE TO THE AGENCY EXCEPT UPON PURCHASE FOR DOLLARS. THE OFFICIAL EXCHANGE RATE AT THAT TIME WAS 2.8 TURKISH LIRA PER DOLLAR--- HENCE FOR THE 1,860 TURKISH LIRA YOU REQUIRED THE AGENCY PAID FROM ITS APPROPRIATION THE SUM OF $664.29. THE AMOUNT ADVANCED WAS TO BE REPAID BY DEDUCTIONS FROM YOUR QUARTERS ALLOWANCE DURING THE SIX PAY PERIODS FROM JULY 31 THROUGH OCTOBER 22, 1955, AND YOU WERE CREDITED WITH 310 LIRA FOR EACH PAY PERIOD OR 1,860 LIRA. IF THE EXCHANGE RATE HAD REMAINED CONSTANT THE APPROPRIATION WOULD HAVE BEEN FULLY REPAID. HOWEVER, ON OCTOBER 5, 1955, THE AMERICAN EMBASSY IN TURKEY ADOPTED A FREE RATE OF EXCHANGE IN LIEU OF THE FIXED OFFICIAL RATE WHICH RESULTED IN FLUCTUATIONS IN THE EXCHANGE RATES. FOR THE PAY PERIOD ENDED OCTOBER 8 THE 2.8 PER DOLLAR RATE WAS APPLIED TO YOUR ACCOUNT, BUT FOR THE FINAL REPAYMENT PERIOD, OCTOBER 9 TO 22, THE EXCHANGE RATE WAS 9.32 LIRA PER DOLLAR; HENCE, THE VALUE OF THE 310 LIRA WAS ONLY $33.26 AS AGAINST THE $110.71 WHICH WAS THE DOLLAR VALUE WHEN THE ADVANCE OR LOAN WAS OBTAINED BY YOU. THE DIFFERENCE OF $$77.48 IS THE SUBJECT OF THE CLAIM.

YOU CONTEND THAT THE GOVERNMENT SUFFERED NO LOSS WHICH IT WOULD NOT OTHERWISE SUFFERED AND YOU MADE NO GAIN, THAT YOU RECEIVED ONLY LIRA SUFFICIENT TO MEET THE RENTAL AND THAT THE PAYMENTS WERE WELL WITHIN YOUR AUTHORIZED QUARTERS ALLOWANCE.

THE GOVERNING REGULATIONS DID NOT AUTHORIZE A SPECIFIC AMOUNT FOR QUARTERS ALLOWANCE. IT PRESCRIBED THE MAXIMUM WHICH MIGHT BE PAID TO EMPLOYEES OF EACH GRADE OR SALARY BRACKET. SINCE YOU DID NOT EXCEED THE MAXIMUM AMOUNT SO SPECIFIED YOUR AUTHORIZED ALLOWANCE WAS THE ACTUAL COST OF YOUR QUARTERS AND LIKE YOUR SALARY WAS PAYABLE ONLY AFTER IT HAD BEEN EARNED, NOT IN ADVANCE OF YOUR SERVICES OR THE PERIOD OF OCCUPANCY OF THE QUARTERS.

HOWEVER, IN RECOGNITION OF THE FACT THAT HOUSING WAS MORE READILY AVAILABLE UPON PAYMENT OF THE RENTAL FOR SEVERAL MONTHS IN ADVANCE AND FOR THE CONVENIENCE OF THOSE EMPLOYEES WHO MIGHT SUFFER HARDSHIP IN SO DOING THE AGENCY WAS AUTHORIZED TO MAKE ADVANCES IN THE NATURE OF LOANS TO THOSE EMPLOYEES WHO APPLIED THEREFOR. THIS WAS A PRIVILEGE EXTENDED TO THE EMPLOYEE--- NOT A BENEFIT TO WHICH HE HAD AN ENFORCEABLE RIGHT BY REASON OF HIS EMPLOYMENT--- AND THE RESULTING OBLIGATION TO REPAY THE FULL AMOUNT ADVANCED TO HIM WAS NOT CONTINGENT UPON A GAIN OR LOSS BY EITHER THE EMPLOYEE OR THE GOVERNMENT.

IT IS CLEAR THAT YOU RECEIVED ONLY SUFFICIENT TO PAY THE REQUIRED RENTAL, BUT IT IS ALSO CLEAR THAT YOU OBTAINED THE ADVANCE OR LOAN SOME THREE MONTHS BEFORE THIS FINAL PAYMENT WAS DUE YOU FROM THE GOVERNMENT. THE FLUCTUATION IN THE RATE OF EXCHANGE HAD THE EFFECT OF LOWERING THE DOLLAR COSTS OF YOUR QUARTERS FOR THE PERIOD IN QUESTION AND THEREFORE YOUR AUTHORIZED ALLOWANCE FOR SUCH PERIOD WAS $33.26 AND NOT $110.71 AS YOU CONTEND. THEREFORE THE BALANCE OF $77.48 IS STILL OUTSTANDING ON YOUR ADVANCE.

THE AGENCY REPORTED THAT IT HAS BEEN ITS POLICY SINCE THE ISSUANCE OF MANUAL ORDER 764.3 ON JANUARY 10, 1955, TO REQUIRE ADVANCES CHARGEABLE TO DOLLAR APPROPRIATIONS TO BE ACCOUNTED FOR IN DOLLARS TO INSURE REPAYMENT IN FULL TO THE APPROPRIATION. IT APPEARS, HOWEVER, THAT THE CITED ORDER DID NOT CONTAIN SPECIFIC LANGUAGE TO THAT EFFECT ALTHOUGH CERTAIN SECTIONS WERE INDICATIVE OF SUCH INTENT. APPARENTLY THE OMISSION OF A CLEAR STATEMENT OF THE POLICY CREATED CONFUSION AMONG THE ACCOUNTING OFFICES WHICH WAS NOT CLARIFIED UNTIL AUGUST 1957. IT ALSO APPEARS THAT IN SOME CASES, AS HERE, THE EMPLOYEES WERE NOT NOTIFIED CONCERNING THE MATTER FOR SOME THREE OR FOUR YEARS FOLLOWING THE TRANSACTIONS. IN VIEW THEREOF AND IN VIEW OF THE SMALL AMOUNT INVOLVED NO FURTHER COLLECTION ACTION WILL BE TAKEN IN THIS CASE.