B-148742, JUN. 12, 1962

B-148742, JUN. 12, 1962

TO MR. LLOYD G. SMITH:

YOUR LETTER OF APRIL 19, 1962, RAISES CERTAIN QUESTIONS REGARDING THE LIVING QUARTERS ALLOWANCE OF CERTAIN STAFF MEMBERS OF OUR PARIS OFFICE. YOU SAY THAT WITH THE INCREASE IN THE FLAT RATE LIVING QUARTERS ALLOWANCE FOR PARIS, SEVERAL QUESTIONS HAVE ARISEN REGARDING THE ALLOWANCE TO BE GIVEN TO STAFF MEMBERS WHO PREVIOUSLY WERE "FROZEN" AT RATES IN EFFECT ON APRIL 1, 1961, WHEN THE FLAT RATE ALLOWANCE FIRST WENT INTO EFFECT.

THE CASES WILL BE CONSIDERED IN THE ORDER PRESENTED.

CASE 1

"MR. JOSEPH EDER WAS PREVIOUSLY "FROZEN" AT THE QUARTERS ALLOWANCE RATE OF $3,062 PER YEAR, THE AMOUNT OF HIS ESTIMATED ANNUAL EXPENSES AT APRIL 1, 1961. EFFECTIVE MARCH 15, 1962 HIS RENT WAS INCREASED, BRINGING THE TOTAL ESTIMATED EXPENSES FOR HIS QUARTERS TO $3,314 PER ANNUM. ACCORDANCE WITH PARAGRAPHS 133.22 AND 133.36 B OF THE REGULATIONS, HIS GRANT WAS INCREASED TO THE FLAT RATE OF $3,300 PER ANNUM. SHOULD HE NOW BE CONSIDERED AS "UNFROZEN" AND GIVEN A GRANT AT THE NEW FLAT RATE OF $3,700 EFFECTIVE APRIL 15, 1962; OR SHOULD HE STILL BE CONSIDERED AS UNDER THE ,FREEZE" AND LIMITED TO A GRANT OF $3,314?

SECTION 133.22 OF THE STANDARDIZED REGULATIONS (GOVERNMENT CIVILIANS, FOREIGN AREAS) COVERING EMPLOYEES WITH ALLOWANCE "FROZEN" BELOW THE ALLOWANCE RATE SPECIFIED IN SECTION 920 PROVIDES THAT IF THE EMPLOYEE'S EXPENSES FOR RENT OR UTILITIES INCREASE, HIS ALLOWANCE MAY BE INCREASED TO EQUAL HIS ALLOWABLE EXPENSES, BUT IN NO CASE TO EXCEED THE MAXIMUM FLAT RATE FOR WHICH HE IS ELIGIBLE. THE DEPARTMENT OF STATE, WHICH ISSUED THE STANDARDIZED REGULATIONS, HAS INFORMED US THAT IT INTERPRETS THAT SECTION TO MEAN THAT IN THOSE CASES WHEN AN EMPLOYEE'S RENT OR UTILITIES HAS INCREASED TO OR ABOVE THE EXISTING FLAT RATE ALLOWANCE THE EMPLOYEE'S LIVING QUARTERS ALLOWANCE NO LONGER IS FROZEN AT THE CURRENT RATE. WE DO NOT CONSIDER THAT INTERPRETATION UNREASONABLE. THEREFORE, MR. EDER IS ELIGIBLE FOR THE NEW FLAT RATE OF $3,7000, EFFECTIVE APRIL 15, 1962, IF OTHERWISE PROPER.

CASE 2

"MR. HUBERT FIVEASH WAS PREVIOUSLY "FROZEN" AT THE ANNUAL RATE OF $2,700, THE MAXIMUM GRANT IN EFFECT ON APRIL 1, 1961. HIS ACTUAL ANNUAL EXPENSES ARE ESTIMATED $2,731. CAN HIS GRANT NOW BE INCREASED TO THE NEW FLAT RATE OF $2,800 EFFECTIVE APRIL 15, OR MUST IT BE LIMITED TO HIS ESTIMATED EXPENSES OF $2,731?

CASE 3

"MR. SHERMAN HENIG WAS PREVIOUSLY "FROZEN" AT THE RATE OF $2,700 PER YEAR, WHICH WAS THE MAXIMUM RATE IN EFFECT ON APRIL 1, 1961. AT THAT TIME HIS ESTIMATED ANNUAL EXPENSES TOTALED $3,455. EFFECTIVE JANUARY 29, 1962, HE NEGOTIATED A REDUCTION IN HIS RENT WHICH REDUCED HIS TOTAL ESTIMATED ANNUAL EXPENSES TO $2,702. EFFECTIVE APRIL 15, THE FLAT RATE WILL BE INCREASED FROM $2,600 TO $2,800. PARAGRAPH 133.21 OF THE REGULATION STATES SPECIFICALLY THAT IF AN EMPLOYEE'S COSTS DECREASE TO OR BELOW THE FLAT RATE, THE EMPLOYEE SHALL NO LONGER BE CONSIDERED ,FROZEN.' SINCE MR. HENIG'S COSTS HAVE DECREASED TO A POINT BELOW THE NEW FLAT RATE, IT IS OUR VIEW THAT UNDER THIS PARAGRAPH HE SHOULD NO LONGER BE CONSIDERED "FROZEN" AND THAT HE WILL BE ENTITLED TO THE NEW FLAT RATE OF $2,800.'

REGARDING MR. FIVEASH'S CASE THERE HAS BEEN NO CHANGE IN HIS ACTUAL EXPENSES, AND THE FACT THAT THE NEW FLAT RATE IS IN EXCESS OF ACTUAL EXPENSES INCURRED BY HIM WOULD NOT IN ITSELF TAKE HIM OUT OF THE "FREEZE" SO FAR AS HIS LIVING QUARTERS ALLOWANCE IS CONCERNED. ALSO, IN MR. HENIG'S CASE THE DECREASE IN HIS RENT AND UTILITIES DID NOT AT THE TIME BRING HIS ACTUAL EXPENSES TO OR BELOW THE RATE INDICATED IN SECTION 920 SO AS TO BRING HIS CASE WITHIN THE PURVIEW OF SECTION 1333.21 OF THE STANDARDIZED REGULATIONS. IN CASE NO. 1 ABOVE WE EXPLAINED SECTION 133.33 OF THE STANDARDIZED REGULATIONS. WE, ALSO, CONSTRUE THAT SECTION TO MEAN THAT THOSE EMPLOYEES WHOSE ACTUAL EXPENSES ARE GREATER THAN THE FLAT RATE AND WHICH FLAT RATE IS LATER INCREASED MAY HAVE THEIR ALLOWANCE INCREASED TO EQUAL THEIR ACTUAL EXPENSES BUT IN NO CASE MAY THEIR NEW ALLOWANCE RATE BE HIGHER THAN THE CURRENT RATE ALLOWANCE INDICATED IN SECTION 920. THEREFORE, MR. FIVEASH'S ALLOWANCE MAY BE INCREASED TO $2,731 PER YEAR AND MR. HENIG'S ALLOWANCE MAY BE INCREASED TO $2,702 PER YEAR.

CASE 4

"MR. SAMUEL PISANO WAS PREVIOUSLY "FROZEN" AT A RATE OF $1,809, THAT BEING THE AMOUNT OF HIS ESTIMATED ANNUAL EXPENSES AT APRIL 1, 1961. WAS MARRIED ON SEPTEMBER 30, 1961, AND IN ACCORDANCE WITH PARAGRAPH 132.3B (2) HIS GRANT WAS INCREASED TO THE FLAT RATE OF $2,600. HOWEVER, HE HAS CONTINUED TO OCCUPY THE SAME QUARTERS AND HIS ESTIMATED ANNUAL EXPENSES HAVE REMAINED AT $1,809. EFFECTIVE APRIL 15, THE FLAT RATE WILL BE INCREASED FOOM $2,600 TO $2,800. SHOULD MR. PISANO BE CONSIDERED AS NO LONGER "FROZEN" AND THEREFORE ELIGIBLE FOR THE NEW FLAT RATE?

YOU SAY THAT MR. PISANO'S LIVING QUARTERS ALLOWANCE WAS INCREASED TO THE FLAT RATE ALLOWANCE AFTER HIS MARRIAGE PURSUANT TO SECTION 132.3B (2) OF THE STANDARDIZED REGULATIONS. THAT SECTION PROVIDES THAT THE LIVING QUARTERS ALLOWANCE SHALL BE REVISED, IF REQUIRED, WHEN THERE IS A CHANGE IN THE FAMILY STATUS. MR. PISANO'S LIVING QUARTERS ALLOWANCE WAS FROZEN AT THE TIME OF HIS MARRIAGE AND HE IS OCCUPYING THE SAME QUARTERS WITH NO INCREASE IN HIS ESTIMATED ANNUAL EXPENSES. THE FACT THAT THE EMPLOYEE MARRIED SUBSEQUENT TO THE DATE OF THE FREEZE ON HIS LIVING QUARTERS ALLOWANCE IS NOT IN ITSELF A JUSTIFICATION UNDER THE REGULATIONS TO RAISE HIS LIVING QUARTERS ALLOWANCE. THEREFORE, HIS LIVING QUARTERS ALLOWANCE SHOULD NOT HAVE BEEN INCREASED TO THE FLAT RATE ALLOWANCE OF $2,600. APPROPRIATE ADJUSTMENT SHOULD BE MADE. ALSO, UPON THE INCREASE IN THE FLAT RATE TO $2,800, THE "FROZEN" RATE WILL CONTINUE TO APPLY.

WE BELIEVE THE ABOVE INFORMATION SHOULD ENABLE YOU TO MAKE AN APPROPRIATE DECISION CONCERNING THE GRANTS TO BE PAID TO THE ABOVE MENTIONED EMPLOYEES.