A-26426, JUNE 3, 1929, 8 COMP. GEN. 628

A-26426: Jun 3, 1929

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

THERE IS NO LONGER ANY NECESSITY OR JUSTIFICATION FOR LEASES OF GOVERNMENT PROPERTY TO. MCGINNIS THERE HAVE ARISEN QUESTIONS AS TO THE LEGALITY OF THE EXISTING PROCEDURE FOR ACCOUNTING FOR RENTALS COLLECTED FROM TENANTS OCCUPYING GOVERNMENT-OWNED PROPERTY AT THE NAVAL ORDNANCE PLANT. THERE IS INVOLVED. IT APPEARS THAT SOME OF THE HOUSES RENTED WERE TAKEN OVER FROM THE UNITED STATES HOUSING CORPORATION BY THE NAVY DEPARTMENT PURSUANT TO EXECUTIVE ORDER DATED JUNE 29. WHICH ARE KNOWN AS THE HOUSING CORPORATION PROJECT. THAT OTHER RENTED HOUSES WERE BUILT ORIGINALLY BY THE NAVY AND ARE REFERRED TO AS THE NAVY PROJECT. IT APPEARS THAT THE GREATER NUMBER OF THESE HOUSES UNDER BOTH PROJECTS ARE LEASED UNDER WRITTEN AGREEMENTS AND RENTS COLLECTED.

A-26426, JUNE 3, 1929, 8 COMP. GEN. 628

COMPENSATION - ALLOWANCES IN KIND - EMPLOYEES OCCUPYING GOVERNMENT-OWNED PROPERTY PURSUANT TO THE PROVISIONS OF THE ACT OF MARCH 5, 1928, 45 STAT. 193, THERE IS NO LONGER ANY NECESSITY OR JUSTIFICATION FOR LEASES OF GOVERNMENT PROPERTY TO, AND COLLECTION OF RENT FROM, CIVILIAN EMPLOYEES OF THE GOVERNMENT ENTITLED BY LAW OR REGULATION TO ALLOWANCES IN KIND. IN LIEU THEREOF, THERE SHOULD BE ISSUED ADMINISTRATIVE ORDERS DESIGNATING PARTICULAR QUARTERS AND OTHER ALLOWANCES FOR INDIVIDUAL EMPLOYEES, COPIES OF WHICH SHOULD BE FILED IN THE GENERAL ACCOUNTING OFFICE. THE TOTAL SALARY RATE FIXED FOR ALL EMPLOYEES ENTITLED BY LAW OR REGULATION TO ALLOWANCES IN KIND MUST INCLUDE THE AMOUNT OF CASH TO BE PAID AND THE FULL AMOUNT OF THE DETERMINED VALUE OF ALLOWANCES FURNISHED IN KIND, THE CASH ONLY TO BE CHARGED TO THE SALARY APPROPRIATION, AND ANY ITEM OF COST CONNECTED WITH THE PROPERTY TO BE CHARGED TO APPROPRIATIONS SPECIFICALLY PROVIDED FOR THAT PURPOSE, NO ADJUSTMENTS BETWEEN THE APPROPRIATIONS BEING AUTHORIZED OR REQUIRED. RETIREMENT DEDUCTS MUST BE COMPUTED ON THE TOTAL SALARY RATE, INCLUDING BOTH THE CASH PAID AND THE DETERMINED VALUE OF ALLOWANCES FURNISHED IN KIND, AND THE TOTAL AMOUNT OF SUCH DEDUCTIONS MUST BE PAID TO THE BUREAU OF PENSIONS OUT OF THE SALARY APPROPRIATION. IN THE ABSENCE OF SPECIFIC PROVISIONS OF LAW TO THE CONTRARY, ALL PROCEEDS FROM RENTALS OF GOVERNMENT PROPERTY AUTHORIZED BY LAW SHOULD BE DEPOSITED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS, AND ANY ITEM OF UPKEEP, MAINTENANCE, OR OTHER ITEM CONNECTED WITH THE PROPERTY SHOULD BE CHARGED TO THE APPROPRIATION SPECIFICALLY PROVIDED FOR THAT PURPOSE.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE NAVY, JUNE 3, 1929:

IN THE AUDIT OF THE ACCOUNTS OF NAVY DISBURSING OFFICERS LIEUT. COMMANDER HOWARD H. ALKIRE AND LIEUT. H. C. MCGINNIS THERE HAVE ARISEN QUESTIONS AS TO THE LEGALITY OF THE EXISTING PROCEDURE FOR ACCOUNTING FOR RENTALS COLLECTED FROM TENANTS OCCUPYING GOVERNMENT-OWNED PROPERTY AT THE NAVAL ORDNANCE PLANT, SOUTH CHARLESTOWN, W.VA., THE NAVAL POWDER FACTOR, INDIANHEAD, MD., AND THE NAVAL PROVING GROUND, DAHLGREN, VA. THERE IS INVOLVED, ALSO, THE LEGALITY OF THE EXISTING PROCEDURE OF COLLECTING RENTS FROM THE CIVILIAN EMPLOYEES AND/OR DEDUCTING THE VALUE THEREOF FROM THE SALARIES OF THE EMPLOYEES, AND FROM OTHER CLASSES OF LESSEES, AND THE DISPOSITION OF THE AMOUNTS SO COLLECTED OR DEDUCTED.

IT APPEARS THAT SOME OF THE HOUSES RENTED WERE TAKEN OVER FROM THE UNITED STATES HOUSING CORPORATION BY THE NAVY DEPARTMENT PURSUANT TO EXECUTIVE ORDER DATED JUNE 29, 1920, WHICH ARE KNOWN AS THE HOUSING CORPORATION PROJECT, AND THAT OTHER RENTED HOUSES WERE BUILT ORIGINALLY BY THE NAVY AND ARE REFERRED TO AS THE NAVY PROJECT. WITHOUT CONSIDERING SEPARATELY THE CONDITIONS AT THE SEVERAL PLACES MENTIONED, OR OTHER PLACES NOT MENTIONED WHICH MAY BE AFFECTED, IT APPEARS THAT THE GREATER NUMBER OF THESE HOUSES UNDER BOTH PROJECTS ARE LEASED UNDER WRITTEN AGREEMENTS AND RENTS COLLECTED. THE LESSEES APPEAR TO BE OF THREE GENERAL CLASSES--- VIZ, CIVILIAN EMPLOYEES, COMMISSIONED AND ENLISTED PERSONNEL, AND PERSONS NOT IN THE EMPLOY OF THE GOVERNMENT.

IF THE HOUSES RENTED OR LEASED ARE A PART OF THE HOUSING CORPORATION PROJECT, THE RENTALS ARE DEPOSITED TO THE CREDIT OF A SPECIAL DEPOSIT ACCOUNT, WHICH IS CHARGED WITH THE COST OF UPKEEP AND MAINTENANCE OF THE PREMISES, AND THE BALANCE, IF ANY, DEPOSITED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS. IF THE HOUSES RENTED ARE A PART OF THE NAVY PROJECT THE RENTALS ARE DEPOSITED TO THE CREDIT OF THE NAVY WORKING FUND CREATED BY THE ACT OF MAY 28, 1924, 43 STAT. 195, WHICH FUND IS CHARGED WITH THE COST OF UPKEEP AND MAINTENANCE, AND THE BALANCE, IF ANY, DEPOSITED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS.

THERE IS FOR CONSIDERATION PARTICULARLY THE PROCEDURE OF COLLECTING RENTS FROM CIVILIAN EMPLOYEES. SECTION 3 OF THE ACT OF MARCH 5, 1928, 45 STAT. 193, PROVIDES AS FOLLOWS:

THE HEAD OF AN EXECUTIVE DEPARTMENT OR INDEPENDENT ESTABLISHMENT, WHERE, IN HIS JUDGMENT, CONDITIONS OF EMPLOYMENT REQUIRE IT, MAY CONTINUE TO FURNISH CIVILIANS EMPLOYED IN THE FIELD SERVICE WITH QUARTERS, HEAT, LIGHT, HOUSEHOLD EQUIPMENT, SUBSISTENCE, AND LAUNDRY SERVICE; AND APPROPRIATIONS FOR THE FISCAL YEAR 1929 AND THEREAFTER OF THE CHARACTER HERETOFORE USED TOR SUCH PURPOSES ARE HEREBY MADE AVAILABLE THEREFOR: PROVIDED, THAT THE REASONABLE VALUE OF SUCH ALLOWANCES SHALL BE DETERMINED AND CONSIDERED AS PART OF THE COMPENSATION IN FIXING THE SALARY RATE OF SUCH CIVILIANS.

THIS IS PERMANENT LEGISLATION. FOR PRIOR PERIODS SEE ACTS OF MARCH 2, 1926, 44 STAT. 161, AND JANUARY 26, 1927, 44 STAT. 1052. THE ABOVE QUOTED STATUTE IS APPLICABLE TO ALL CLASSES OF CIVILIAN EMPLOYEES ENTITLED BY LAW OR REGULATION TO ALLOWANCES IN KIND FROM THE GOVERNMENT, IRRESPECTIVE OF THE ACT UNDER WHICH THEIR SALARIES ARE FIXED OR THE BRANCH OF THE SERVICE IN WHICH EMPLOYED. THE REQUIREMENTS OF THE PROVISO OF THE STATUTE, THAT THE REASONABLE VALUE OF THE ALLOWANCES FURNISHED IN KIND SHALL BE DETERMINED AND CONSIDERED AS A PART OF THE COMPENSATION, ARE MANDATORY WHENEVER AND WHEREVER ALLOWANCES IN KIND, INCLUDING QUARTERS, HEAT, LIGHT, ETC., ARE FURNISHED TO CIVILIAN EMPLOYEES. SEE 6 COMP. GEN. 333; ID. 359; ID. 484; ID. 588. IN THE LAST-CITED DECISION CIVILIAN EMPLOYEES UNDER THE NAVAL ESTABLISHMENT SPECIFICALLY WERE HELD TO BE INCLUDED WITHIN THE TERMS OF THE STATUTE. UNDER THE CONTROLLING STATUTE THERE SHOULD NO LONGER BY ANY NECESSITY OR JUSTIFICATION FOR LEASES OF GOVERNMENT PROPERTY TO, AND COLLECTION OF RENT FROM, CIVILIAN EMPLOYEES UNDER THE NAVAL ESTABLISHMENT SPECIFICALLY WERE HELD TO BE INCLUDED WITHIN THE TERMS OF THE STATUTE. UNDER THE CONTROLLING STATUTE THERE SHOULD NO LONGER BE ANY NECESSITY OR JUSTIFICATION FOR LEASES OF GOVERNMENT PROPERTY TO, AND COLLECTION OF RENT FROM, CIVILIAN EMPLOYEES ENTITLED BY LAW OR REGULATION TO ALLOWANCES IN KIND. IN LIEU THEREOF THERE SHOULD BE ISSUED ADMINISTRATIVE ORDERS DESIGNATING PARTICULAR QUARTERS AND OTHER ALLOWANCES FOR INDIVIDUAL EMPLOYEES. THERE HAS NOT BEEN OVERLOOKED IN THIS CONNECTION THE STATEMENT MADE IN DECISION OF OCTOBER 6, 1925, 5 COMP. GEN. 236, 238, THAT "NO OBJECTION NEED BE MADE AT THIS TIME TO THE PROCEDURE FOR COLLECTING MONTHLY RENTAL BY DEDUCTION FROM PAY-ROLL EARNINGS.' IN VIEW OF THE LEGISLATION, SUPRA, THIS STATEMENT IS NO LONGER FOR APPLICATION. THE TOTAL SALARY RATE, UNDER WHATEVER STATUTE OR REGULATION THE SAME IS AUTHORIZED TO BE FIXED, AND REGARDLESS OF THE METHOD BY WHICH THE APPOINTMENTS ARE MADE, MUST INCLUDE BOTH THE AMOUNT OF THE CASH PAID AND THE DETERMINED VALUE OF THE ALLOWANCES FURNISHED IN KIND. 5 COMP. GEN. 957, 958. THE DETERMINED VALUE OF ALLOWANCES IS AS MUCH A PART OF THE COMPENSATION AS THE CASH PAID, IRRESPECTIVE OF THE FACT THAT THE ONE IS CHARGED TO THE SALARY APPROPRIATION AND THE OTHER IS, OR HAS BEEN, CHARGED TO OTHER APPROPRIATIONS OF A NONPERSONNEL CHARACTER. NO COLLECTIONS FROM EMPLOYEES OF THE VALUE OF ALLOWANCES FURNISHED IN KIND, AND NO ADJUSTMENTS OF APPROPRIATIONS, AND NO DEPOSITS TO MISCELLANEOUS RECEIPTS ARE AUTHORIZED OR REQUIRED. THE PORTION OF THE COMPENSATION PAID IN CASH IS CHARGED TO THE SALARY APPROPRIATION, AND THE DETERMINED VALUE OF THE ALLOWANCES, INCLUDING ANY ITEMS OF UPKEEP, MAINTENANCE, ETC., IS CHARGEABLE TO APPROPRIATIONS EXPRESSLY PROVIDED FOR THAT PURPOSE. FOR INSTANCE, IN DECISION OF SEPTEMBER 15, 1927, A 19824, ADDRESSED TO THE DIRECTOR OF THE VETERANS' BUREAU, IT WAS STATED:

WITH RESPECT TO EMPLOYEES WHO ARE PAID COMPENSATION PARTLY BY RECEIVING ALLOWANCES IN KIND, ONLY THE CASH PART OF THE COMPENSATION IS CHARGEABLE TO THE SALARY APPROPRIATION, THE NET VALUE OF THE ALLOWANCES FURNISHED IN KIND HAVING ALREADY BEEN CHARGED TO THE PROPER APPROPRIATION AVAILABLE FOR PRODUCING SAME IN THIS CASE "MEDICAL AND HOSPITAL SERVICE.' THIS IS THE CORRECT PROCEDURE REGARDLESS OF WHETHER THE APPOINTMENT OR CONTRACT OF EMPLOYMENT DOES OR DOES NOT SPECIFICALLY PROVIDE THAT THE ALLOWANCES ARE TO BE FURNISHED IN KIND. IF THIS PROCEDURE HAD BEEN UNDERSTOOD AND FOLLOWED IN THIS INSTANCE THERE WOULD NOW BE NO NECESSITY FOR AN ADJUSTMENT OF APPROPRIATIONS.

IT IS UNDERSTOOD THAT IN MOST OF THE FIELD SERVICES, WITH THE EXCEPTION AT LEAST OF PORTIONS OF THE WAR AND NAVY DEPARTMENT FIELD SERVICES, THE ADMINISTRATIVE OFFICES HAVE ADOPTED A PROPER PROCEDURE IN THIS REGARD. THERE APPEARS NO REASON OR JUSTIFICATION FOR EXCEPTION OF ANY PARTICULAR CLASS OF CIVILIAN EMPLOYEES IN THE ABSENCE OF A PROVISION OF STATUTE SO PROVIDING.

FURTHERMORE, THE DISPOSITION NOW BEING MADE OF COLLECTIONS OF RENT UNDER BOTH THE HOUSING CORPORATION PROJECT AND THE NAVY PROJECT, WHETHER FROM CIVILIAN EMPLOYEES OR OTHERS, IS CONTRARY TO LAW AND SHOULD BE DISCONTINUED. IN DECISION OF DECEMBER 19, 1927, 7 COMP. GEN. 391, 395, IT WAS STATED:

IN A DECISION BY A FORMER COMPTROLLER OF THE TREASURY, 17 COMP. DEC. 712, IT WAS HELD IN SUBSTANCE THAT MONEY RECEIVED FROM RENTAL OF GOVERNMENT PROPERTY IS FOR THE USE OF THE UNITED STATES WITHIN THE MEANING OF SECTIONS 3617 AND 3618, REVISED STATUTES, AND AS SUCH SHOULD BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS UNLESS ITS USE IS OTHERWISE PROVIDED BY LAW. THIS IS A WELL-ESTABLISHED RULE AND IS BASED UPON THE THEORY THAT BY CREDITING THE AMOUNT OF SUCH DEDUCTIONS TO AN APPROPRIATION FOR EXPENDITURE WOULD AMOUNT TO AUGMENTING THE APPROPRIATION IN EXCESS OF THE AMOUNT APPROPRIATED BY LAW FOR A PARTICULAR PURPOSE.

IN THE DECISION OF THE COMPTROLLER OF THE TREASURY CITED IN THE ABOVE QUOTATIONS IT WAS HELD (QUOTING FROM THE SECOND PARAGRAPH OF THE SYLLABUS) AS FOLLOWS:

THERE IS NO LAW AUTHORIZING THE USE OF RECEIPTS FROM THE RENTAL OF GOVERNMENT PROPERTY TO REPAIR AND MAINTAIN SAID PROPERTY, NOR CAN SUCH RECEIPTS BE USED AS PART PAYMENT FOR WORK DONE UNDER AN INDEPENDENT APPROPRIATION.

THEREFORE, UNDER THE HOUSING CORPORATION PROJECT, THERE IS NO AUTHORITY TO MAINTAIN A SPECIAL DEPOSIT ACCOUNT, TO THE CREDIT OF WHICH RENTALS ARE DEPOSITED, AND TO CHARGE AGAINST THE SAME THE COST OF MAINTENANCE AND UPKEEP OF THE PREMISES RENTED, THE BALANCE TO BE DEPOSITED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS; NOR UNDER THE NAVY PROJECT TO DEPOSIT SUCH RENTALS TO THE CREDIT OF THE NAVY WORKING FUND, THE SAME TO BE CHARGED WITH THE COST OF MAINTENANCE AND UPKEEP, AND THE BALANCE TO BE DEPOSITED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS. THE FULL AMOUNT OF ALL RENTALS OF ALL GOVERNMENT PROPERTY IN THE ABSENCE OF A SPECIFIC EXCEPTION BY STATUTE, SHOULD BE DEPOSITED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS, AND APPROPRIATIONS PROVIDING FOR THE MAINTENANCE, UPKEEP, AND ANY OTHER ITEM OF COST CONNECTED WITH THE PROPERTY SHOULD BE CHARGED WITH SUCH ITEMS.

IT MAY BE THAT NO ADEQUATE APPROPRIATIONS HAVE BEEN PROVIDED FOR MAINTENANCE AND UPKEEP AND OTHER ITEMS OF COST CONNECTED WITH GOVERNMENT PROPERTY IN CERTAIN FIELD SERVICES, INCLUDING FIELD SERVICES OF THE WAR AND NAVY DEPARTMENTS. BUT AS RAPIDLY AS POSSIBLE, WHENEVER AND WHEREVER CURRENT APPROPRIATIONS WILL PERMIT, AND NOT LATER THAN JUNE 30, 1930, IN ALL CASES, UNLESS EXPRESS EXCEPTION IS AUTHORIZED BY LAW, PREVIOUS TO WHICH THE BUDGETS FOR THE VARIOUS SERVICES AFFECTED SHOULD BE ADJUSTED ACCORDINGLY, THE FOLLOWING RULES WILL BE REQUIRED TO BE FOLLOWED:

1. GOVERNMENT PROPERTY WILL NOT BE LEASED OR RENTED TO CIVILIAN EMPLOYEES ENTITLED BY LAW OR REGULATION TO QUARTERS AND OTHER ALLOWANCES IN KIND.

2. QUARTERS AND OTHER ALLOWANCES AUTHORIZED BY LAW AND REGULATION WILL BE FURNISHED UNDER ADMINISTRATIVE ORDERS ISSUED TO THE INDIVIDUAL EMPLOYEES, COPIES OF WHICH ARE TO BE FILED IN THIS OFFICE.

3. THE TOTAL SALARY RATE FIXED FOR ALL EMPLOYEES ENTITLED BY LAW OR REGULATION TO ALLOWANCES IN KIND MUST INCLUDE THE AMOUNT OF CASH TO BE PAID AND THE FULL AMOUNT OF THE DETERMINED VALUE OF ALLOWANCES FURNISHED IN KIND, THE CASH ONLY TO BE CHARGED TO THE SALARY APPROPRIATION, AND ANY ITEM OF COST CONNECTED WITH THE PROPERTY TO BE CHARGED TO APPROPRIATIONS SPECIFICALLY PROVIDED FOR THAT PURPOSE, NO ADJUSTMENTS BETWEEN THE APPROPRIATIONS BEING AUTHORIZED OR REQUIRED.

4. RETIREMENT DEDUCTIONS MUST BE COMPUTED ON THE TOTAL SALARY RATE, INCLUDING BOTH THE CASH PAID AND THE DETERMINED VALUE OF ALLOWANCES FURNISHED IN KIND, AND THE TOTAL AMOUNT OF SUCH DEDUCTIONS MUST BE PAID TO THE BUREAU OF PENSIONS OUT OF THE SALARY APPROPRIATION.

5. IN THE ABSENCE OF SPECIFIC PROVISIONS OF LAW TO THE CONTRARY, ALL PROCEEDS FROM RENTALS OF GOVERNMENT PROPERTY AUTHORIZED BY LAW SHOULD BE DEPOSITED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS, AND ANY ITEM OF UPKEEP, MAINTENANCE, OR OTHER ITEM CONNECTED WITH THE PROPERTY SHOULD BE CHARGED TO THE APPROPRIATION SPECIFICALLY PROVIDED FOR THAT PURPOSE.