Skip to main content

B-45103, AUGUST 30, 1949, 29 COMP. GEN. 99

B-45103 Aug 30, 1949
Jump To:
Skip to Highlights

Highlights

THE PROHIBITION AGAINST SET-OFF ACTION IS NOT TO BE REGARDED AS APPLYING TO FINAL SALARY PAYMENTS UPON SEPARATION FROM THE SERVICE OR TO LUMP-SUM PAYMENTS FOR ACCRUED ANNUAL LEAVE DUE SEPARATED EMPLOYEES FOR ACCRUED ANNUAL LEAVE. 1949: REFERENCE IS MADE TO YOUR LETTER OF JULY 28. THE LAST PARAGRAPH OF THE SAID LETTER IS AS FOLLOWS: I AM AWARE THAT DECISIONS OF YOUR OFFICE HAVE FREQUENTLY STATED THAT THERE IS NO AUTHORITY TO EXERCISE THE GOVERNMENT'S RIGHT OF SET-OFF AGAINST THE CURRENT SALARY PAYMENTS OF FEDERAL EMPLOYEES WITHOUT FIRST OBTAINING THE CONSENT OF THE EMPLOYEE CONCERNED. I HAVE ATTACHED A MEMORANDUM HERETO AS ENCLOSURE (C) WHICH OUTLINES THE REASONS AND AUTHORITIES THAT POINT TO THIS DISTINCTION.

View Decision

B-45103, AUGUST 30, 1949, 29 COMP. GEN. 99

SET-OFF - COMPENSATION - GENERAL INDEBTEDNESS TO UNITED STATES IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY, NO JUSTIFICATION EXISTS TO SET OFF GENERAL DEBTS DUE THE UNITED STATES BY ITS EMPLOYEES WITHOUT THEIR CONSENT AGAINST CURRENT SALARY PAYMENTS DUE THE EMPLOYEES FOR THEIR SERVICES, EVEN THOUGH SUCH DEBTS BE LIQUIDATED AND UNDISPUTED; HOWEVER, THE PROHIBITION AGAINST SET-OFF ACTION IS NOT TO BE REGARDED AS APPLYING TO FINAL SALARY PAYMENTS UPON SEPARATION FROM THE SERVICE OR TO LUMP-SUM PAYMENTS FOR ACCRUED ANNUAL LEAVE DUE SEPARATED EMPLOYEES FOR ACCRUED ANNUAL LEAVE.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE NAVY, AUGUST 30, 1949:

REFERENCE IS MADE TO YOUR LETTER OF JULY 28, 1949, RELATIVE TO DELINQUENCIES IN THE COLLECTION OF RENTS FROM OCCUPANTS OF THE CARVER HEIGHTS AND LEXINGTON PARK HOUSING PROJECTS OPERATED IN CONNECTION WITH THE NAVAL AIR STATION, PATUXENT RIVER, MD. THE LAST PARAGRAPH OF THE SAID LETTER IS AS FOLLOWS:

I AM AWARE THAT DECISIONS OF YOUR OFFICE HAVE FREQUENTLY STATED THAT THERE IS NO AUTHORITY TO EXERCISE THE GOVERNMENT'S RIGHT OF SET-OFF AGAINST THE CURRENT SALARY PAYMENTS OF FEDERAL EMPLOYEES WITHOUT FIRST OBTAINING THE CONSENT OF THE EMPLOYEE CONCERNED. HOWEVER, A CLOSE EXAMINATION OF THE PERTINENT AUTHORITIES WOULD SEEM TO RAISE SOME DOUBT AS TO WHETHER THIS RULE SHOULD APPLY IN THE CASE OF AN UNDISPUTED AND LIQUIDATED CLAIM. I HAVE ATTACHED A MEMORANDUM HERETO AS ENCLOSURE (C) WHICH OUTLINES THE REASONS AND AUTHORITIES THAT POINT TO THIS DISTINCTION. ACCORDINGLY, I SHOULD LIKE TO REQUEST YOUR DECISION AS TO WHETHER A LIQUIDATED AND UNDISPUTED CLAIM OF THE UNITED STATES AGAINST A FEDERAL EMPLOYEE MAY NOT PROPERLY BE REFERRED TO YOU FOR SET OFF AGAINST THE CURRENT SALARY PAYMENTS OF SUCH EMPLOYEE, NOTWITHSTANDING THE FACT THAT HIS CONSENT HAD NOT BEEN OBTAINED IN THE FIRST PLACE.

AFTER CAREFUL CONSIDERATION OF THE ARGUMENTS ADVANCED IN THE MEMORANDUM REFERRED TO IN THE LIGHT OF THE DECISIONS CITED THEREIN AND THE ACQUIESCENCE BY THE CONGRESS IN CERTAIN OF THE LEGAL PROPOSITIONS DEDUCIBLE FROM THOSE DECISIONS, I DO NOT FEEL THAT, IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY, THIS OFFICE WOULD BE JUSTIFIED IN UNDERTAKING TO SET OFF DEBTS DUE THE UNITED STATES BY ITS EMPLOYEES WITHOUT THEIR CONSENT AGAINST CURRENT COMPENSATION DUE THE EMPLOYEES FOR THEIR SERVICES, EVEN THOUGH SUCH DEBTS BE LIQUIDATED AND UNDISPUTED.

IN THE SAID MEMORANDUM A CONTRARY CONCLUSION IS URGED ON THE GROUND THAT, IN ALL THE APPLICABLE COURT DECISIONS, STRESS IS LAID UPON THE FACT THAT THE CLAIMS INVOLVED WERE DISPUTED OR UNLIQUIDATED. WHILE THIS MAY BE TRUE, IT SEEMS EQUALLY TRUE THAT, IN THE LEADING CASE OF SMITH V. JACKSON, 241 F. 747, AFFIRMED IN 246 U.S. 388, THE DECISION ALSO COMPREHENDED THE CONCEPT THAT THE CURRENT SALARY OF AN OFFICER OR EMPLOYEE OF THE UNITED STATES, FIXED BY LAW AND SPECIFICALLY APPROPRIATED FOR BY CONGRESS, IS NOT PROPERLY TO BE CONSIDERED AS A CLAIM AGAINST THE UNITED STATES WITHIN THE SCOPE OF THE BROAD DICTUM OF GRATIOT V. UNITED STATES, 40 U.S. 336. AND THE DECISION IN MCCARL V. PENCE, 18 F.2D 809, THAT THE SET-OFF AUTHORIZED BY SECTION 1766, REVISED STATUTES, IS APPLICABLE ONLY WITH RESPECT TO COMPENSATION DUE OFFICERS OR EMPLOYEES WHO, AS CONTRACTING OR DISBURSING OFFICERS, ARE ACCOUNTABLE FOR MONEYS ENTRUSTED TO THEM, INVOLVES NECESSARILY THE INFERENCE THAT, IN THE ABSENCE OF STATUTORY AUTHORITY, SET -OFF MAY NOT BE MADE AGAINST CURRENT COMPENSATION OF EMPLOYEES WHO ARE STILL IN THE FEDERAL SERVICE.

THIS INTERPRETATION OF THE APPLICABLE COURT DECISIONS HAS BEEN CONSISTENTLY ADHERED TO BY THIS OFFICE OVER A LONG PERIOD OF TIME. ADDITION TO THE DECISION CITED IN YOUR OFFICE MEMORANDUM, SEE 16 COMP. GEN. 547; 19 COMP. GEN. 64; 23 COMP. GEN. 555; ID. 911; 24 COMP. GEN. 334; 26 COMP. GEN. 907. FURTHERMORE, CONGRESSIONAL ACQUIESCENCE IN SUCH CONSISTENT INTERPRETATION OF THE DECISIONS OF THE COURTS SEEMS CLEARLY INDICATED BY THE ENACTMENT, INTER ALIA, OF THE ACT OF MAY 26, 1936, 49 STAT. 1374, SPECIFICALLY AUTHORIZING THE WITHHOLDING OF THE COMPENSATION ANY PERSON IN THE EXECUTIVE BRANCH OF THE GOVERNMENT WHENEVER CREDIT SHALL HAVE BEEN DISALLOWED IN THE ACCOUNTS OF A DISBURSING OFFICER FOR PAYMENTS TO SUCH PERSON. SEE REPORT OF THE HOUSE COMMITTEE ON MILITARY AFFAIRS ON H.R. 8784, HOUSE REPORT NO. 2370, 74TH CONGRESS, 2D SESSION, SHOWING THAT THE ACT CITED WAS THE DIRECT OUTGROWTH OF A RECOMMENDATION OF THE WAR DEPARTMENT TO OVERCOME THE EFFECT OF THE DECISION IN MCCARL V. PENCE, SUPRA, SO FAR AS OFFICERS OF THE ARMY WERE CONCERNED. IT MAY ALSO BE NOTED THAT THERE IS NOW PENDING IN THE CONGRESS A PROPOSAL ( H.R. 5819) TO AMEND THE ABOVE ACT SO AS TO AUTHORIZE SIMILAR WITHHOLDING IN THE CASE OF PAYMENTS ON ACCOUNT OF WHICH CHARGES HAVE BEEN RAISED IN THE ACCOUNTS OF CERTIFYING OFFICERS.

CONSEQUENTLY, IT APPEARS THAT THE WITHHOLDING OF CURRENT SALARY OF EMPLOYEES STILL IN THE SERVICE IN SATISFACTION OF THEIR GENERAL DEBTS TO THE GOVERNMENT, WITHOUT THEIR CONSENT, WOULD BE AGAINST THE POLICY OF THE CONGRESS, AND THEREFORE UNAUTHORIZED.

IT MAY BE POINTED OUT, HOWEVER, THAT THE PROHIBITION AGAINST SUCH SET-OFF ACTION CONSISTENTLY HAS BEEN HELD NOT TO APPLY TO FINAL SALARY PAYMENTS IN THE EVENT THE EMPLOYEES ARE SEPARATED FROM THE FEDERAL SERVICE. SEE 26 COMP. GEN. 907, 909, AND THE CASES THERE CITED. SIMILARLY, THE SAID PROHIBITION DOES NOT APPLY TO LUMP-SUM PAYMENTS DUE SEPARATED EMPLOYEES FOR ACCRUED ANNUAL LEAVE UNDER SECTION 2 OF THE ACT OF DECEMBER 21, 1944, 58 STAT. 845. SEE 24 COMP. GEN. 522.

GAO Contacts

Office of Public Affairs