A-39669, DECEMBER 14, 1931, 11 COMP. GEN. 233

A-39669: Dec 14, 1931

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THERE HAS BEEN QUESTIONED BY THIS OFFICE THE METHOD OF COMPUTING ALLOWANCES IN KIND FURNISHED EMPLOYEES WHOSE SALARY RATES ARE FIXED ON A PER DIEM BASIS AND WHOSE ALLOWANCES IN KIND ARE EVALUATED ON A PER ANNUM BASIS. REFERENCE IS MADE TO ITEMS 14 AND 15. IT IS UNDERSTOOD THE EMPLOYEES ARE NOT SUBJECT TO THE CLASSIFICATION ACT. THE METHOD OF DETERMINATION OF TOTAL PER DIEM RATE AND VALUE OF ALLOWANCES IN KIND USED HERE IS BASED ON THE RULE LAID DOWN IN PAR. 1008. THAT WHERE THE COMPENSATION OF THE EMPLOYEE IS FIXED AT A PER DIEM RATE. HIS CLASSIFICATION FOR THE DETERMINATION OF THE VALUATION OF ALLOWANCES FURNISHED HIM WILL BE ESTABLISHED BY ASSIGNING HIM AN ANNUAL RATE OBTAINED BY MULTIPLYING HIS CASH PER DIEM RATE.

A-39669, DECEMBER 14, 1931, 11 COMP. GEN. 233

COMPENSATION - ALLOWANCES IN KIND - PER DIEM EMPLOYEES THE VALUE OF ALLOWANCES IN KIND FURNISHED PER DIEM EMPLOYEES FIXED ON A PER ANNUM BASIS, VARYING ACCORDING TO THE PER ANNUM RATE EQUIVALENT OF THE PER DIEM CASH PORTION OF COMPENSATION, SHOULD BE DEDUCTED FROM EACH SALARY PAYMENT COVERING THE MONTHLY OR SEMIMONTHLY PAY PERIOD, IN EQUAL AMOUNTS BASED ON THE ANNUAL RATE, IRRESPECTIVE OF THE NUMBER OF DAYS WORKED DURING THE PAY PERIOD.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF WAR, DECEMBER 14, 1931:

IN THE AUDIT OF THE ACCOUNTS OF LIEUT. C. K. HARDING, CHIEF OF ENGINEERS, UNITED STATES ARMY, THERE HAS BEEN QUESTIONED BY THIS OFFICE THE METHOD OF COMPUTING ALLOWANCES IN KIND FURNISHED EMPLOYEES WHOSE SALARY RATES ARE FIXED ON A PER DIEM BASIS AND WHOSE ALLOWANCES IN KIND ARE EVALUATED ON A PER ANNUM BASIS.

AS EXAMPLES, REFERENCE IS MADE TO ITEMS 14 AND 15, PAGE 1, PAY ROLL COVERING JUNE 1 TO 15, 1931, FOR THE SAN FRANCISCO ENGINEER DISTRICT, SHOWING HERBERT R. MCMILLIN AND IRVIE R. DUNBAR, BOTH DESIGNATED AS "FOREMAN, CRANE NUMBER C," WITH PER DIEM SALARY RATE FIXED AT $7.55, THE TIME WORKED BY THE FORMER BEING INDICATED AS 14 DAYS AND BY THE LATTER AS 13 DAYS DURING THE PERIOD COVERED BY THE PAY ROLL, AND THE AMOUNT OF DEDUCTIONS FOR ALLOWANCES IN KIND BEING SHOWN AS $21.46 AND $19.94, RESPECTIVELY. IT IS UNDERSTOOD THE EMPLOYEES ARE NOT SUBJECT TO THE CLASSIFICATION ACT, OTHERWISE A PER DIEM SALARY RATE WOULD NOT BE AUTHORIZED.

THE DISBURSING OFFICER HAS FURNISHED THE FOLLOWING STATEMENT IN EXPLANATION OF THE DEDUCTIONS:

1. THE METHOD OF DETERMINATION OF TOTAL PER DIEM RATE AND VALUE OF ALLOWANCES IN KIND USED HERE IS BASED ON THE RULE LAID DOWN IN PAR. 1008, O. AND R., THAT WHERE THE COMPENSATION OF THE EMPLOYEE IS FIXED AT A PER DIEM RATE, AS IN THE INSTANT CASE, HIS CLASSIFICATION FOR THE DETERMINATION OF THE VALUATION OF ALLOWANCES FURNISHED HIM WILL BE ESTABLISHED BY ASSIGNING HIM AN ANNUAL RATE OBTAINED BY MULTIPLYING HIS CASH PER DIEM RATE, OF $6.02 IN THIS CASE, BY 313, IF EMPLOYED ON A 313- DAY-YEAR BASIS AS IN THIS CASE, WHICH GIVES $1,884.26. FOR THAT ANNUAL RATE OF COMPENSATION THE TOTAL VALUE OF ALLOWANCES IS $480 PER ANNUM WHICH, ADDED TO THE $1,884.26, GIVES $2,364.26 TOTAL ANNUAL COMPENSATION. DIVIDING THAT AMOUNT BY 313 GIVES $7.55 AS THE TOTAL PER DIEM RATE. NOW IN SUCH CASE THE DEDUCTION FOR VALUE OF ALLOWANCES CAN NOT BE FIGURED ON A MONTHLY RATE EQUITABLY BECAUSE THE EMPLOYEE'S PAY IS NOT COMPUTED ON A MONTHLY BASIS BUT ON A PER DIEM BASIS. IN ONE CASE THE DAILY RATE FOR THE ALLOWANCES IS $1.33 1/3, IN THE OTHER CASE IT IS ABOUT $1.53.

2. TO COMPUTE THE DEDUCTION FOR ALLOWANCES ON A PER DIEM BASIS (FOR ITEM 14) IT IS NECESSARY TO USE THE RATIO:

313:480/14:X WHERE 313 EQUALS NUMBER OF WORKING DAYS PER YEAR.

480 EQUALS VALUE OF ANNUAL ALLOWANCES IN DOLLARS.

14 EQUALS NUMBER OF WORKING DAYS IN THE PERIOD.

X EQUALS VALUE OF ALLOWANCES FOR THE PERIOD.

THUS, $480 TIMES 14 EQUALS $6,720 DIVIDED BY 313 EQUALS $21.46.

3. FROM THE FOREGOING REASONING IT IS EVIDENT THAT IN THE CASE OF ITEMS 14 AND 15 ON SHEET 1, CITED ABOVE AS EXAMPLES, THE VALUE OF ALLOWANCES FURNISHED IS NOT $20 BECAUSE THAT AMOUNT IS COMPUTED ON A MONTHLY BASIS BUT $21.46, AND $19.94, RESPECTIVELY, THE VALUE OF ALLOWANCES COMPUTED ON A PER DIEM BASIS.

THIS BASIS OF COMPUTING DEDUCTIONS FOR ALLOWANCES FURNISHED IN KIND IS NOT AUTHORIZED. BY LETTER OF SEPTEMBER 23, 1926, A-12324, THIS OFFICE APPROVED THE PLAN PROPOSED BY THE WAR DEPARTMENT OF BASING THE VALUE OF ALLOWANCES FURNISHED IN KIND ON THE CASH PART OF COMPENSATION AND THERE APPEARS NO LEGAL OBJECTION TO THE PROVISIONS OF PARAGRAPH 1008 OF GENERAL ORDERS NO. 1, ISSUED JANUARY 15, 1930, BY THE OFFICE OF THE CHIEF OF ENGINEERS, REFERRED TO BY THE DISBURSING OFFICER, PERMITTING CONVERSION OF THE PER DIEM SALARY RATE INTO ITS PER ANNUM EQUIVALENT FOR THE PURPOSES OF DETERMINING THE REASONABLE VALUE OF THE ALLOWANCES FURNISHED IN KIND, BUT IN ALL SUCH CASES THE VALUE OF ALLOWANCES THUS FIXED ON AN ANNUAL BASIS SHOULD BE DEDUCTED ACCORDINGLY, THAT IS, ONE-TWELFTH FOR EACH MONTH IRRESPECTIVE OF THE NUMBER OF DAYS WORKED DURING THE MONTH OR PAY PERIOD. THE PROCEDURE OF FIXING SALARY ON A PER DIEM BASIS AND DEDUCTIONS FOR ALLOWANCES FURNISHED IN KIND ON AN ANNUAL BASIS HAS BEEN RECOGNIZED HERETOFORE. SEE 6 COMP. GEN. 332, 335. AS THE VALUE OF ALLOWANCES IN THIS CASE IS SHOWN AS $480 PER ANNUM, THE DEDUCTIONS IN THE ABOVE- MENTIONED ITEMS ON THE PAY ROLLS SHOULD HAVE BEEN $20 EVEN, IN EACH INSTANCE, COVERING THE HALF-MONTH PAY PERIOD.

CREDIT WILL BE ALLOWED IN THE ACCOUNTS FOR THE PAST PAYMENTS AS SHOWN, IN THE ABSENCE OF OTHER OBJECTION, BUT HEREAFTER THE DEDUCTIONS FOR ALLOWANCES FURNISHED IN KIND SHOULD BE SHOWN ON THE PAY ROLL IN ACCORDANCE HEREWITH.