A-46280, JANUARY 19, 1933, 12 COMP. GEN. 501

A-46280: Jan 19, 1933

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FROM THE ACTING AUDITOR OF THE PANAMA CANAL: THERE IS ENCLOSED A COPY OF A COMMUNICATION DATED NOVEMBER 15. WHICH RAISES CERTAIN QUESTIONS IN CONNECTION WITH THE AUTHORITY OF THE PANAMA CANAL TO MAKE SALARY IMPOUNDMENTS UNDER THE ECONOMY ACT FROM THE EMPLOYEES OF THE FORTIFICATIONS DIVISION OF THE PANAMA CANAL WHOSE SERVICES ARE BILLED AT COST AGAINST A SEPARATE APPROPRIATION UNDER THE WAR DEPARTMENT. THE FORTIFICATIONS DIVISION IS UNDER THE IMMEDIATE SUPERVISION OF MAJOR WILLIAMS. THE CONSTRUCTION EMPLOYEES OF THE FORTIFICATIONS DIVISION ARE CARRIED ON PANAMA CANAL ROLLS. ARE EMPLOYED EXCLUSIVELY ON FORTIFICATIONS WORK UNDER DIRECT CONTROL OF MAJOR WILLIAMS. IN THE APPLICATION OF THE ECONOMY ACT THE PRESCRIBED DEDUCTIONS OF8 1/3 PERCENT HAVE BEEN MADE FROM FORTIFICATIONS DIVISION EMPLOYEES.

A-46280, JANUARY 19, 1933, 12 COMP. GEN. 501

ECONOMY ACT - PERMANENT EMPLOYMENT WHILE ON ADMINISTRATIVE FURLOUGH - SERVICES BETWEEN DEPARTMENTS THE APPOINTMENT TO A PERMANENT POSITION IN OR UNDER THE UNITED STATES GOVERNMENT OF AN EMPLOYEE ON AN ADMINISTRATIVE FURLOUGH TERMINATES THE FURLOUGH, LEAVING THE POSITION VACANT AND REQUIRING THE IMPOUNDING OF THE SALARY OF THE VACANT POSITION FOR THE REMAINDER OF THE FISCAL YEAR OR UNTIL FILLED BY AUTHORITY OF THE PRESIDENT. AN EMPLOYEE PLACED ON AN ADMINISTRATIVE FURLOUGH WITHOUT PAY FOR THE PURPOSE OF CONSERVING THE APPROPRIATIONS OF THE PANAMA CANAL RENDERS NO SERVICE AND RESULTS IN NO EXPENSE TO THE PANAMA CANAL APPROPRIATION THAT MAY BE CHARGED AS AN ITEM OF COST TO ANOTHER GOVERNMENT ESTABLISHMENT.

COMPTROLLER GENERAL MCCARL TO THE GOVERNOR OF THE PANAMA CANAL, JANUARY 19, 1933:

THERE HAS BEEN RECEIVED, PRESUMABLY BY YOUR DIRECTION, THE FOLLOWING REQUEST DATED DECEMBER 8, 1932, FROM THE ACTING AUDITOR OF THE PANAMA CANAL:

THERE IS ENCLOSED A COPY OF A COMMUNICATION DATED NOVEMBER 15, 1932, FROM MAJOR C. F. WILLIAMS, DEPARTMENT ENGINEER, PANAMA CANAL DEPARTMENT, U.S. ARMY, ADDRESSED TO THE GOVERNOR OF THE PANAMA CANAL, WHICH RAISES CERTAIN QUESTIONS IN CONNECTION WITH THE AUTHORITY OF THE PANAMA CANAL TO MAKE SALARY IMPOUNDMENTS UNDER THE ECONOMY ACT FROM THE EMPLOYEES OF THE FORTIFICATIONS DIVISION OF THE PANAMA CANAL WHOSE SERVICES ARE BILLED AT COST AGAINST A SEPARATE APPROPRIATION UNDER THE WAR DEPARTMENT.

THE FORTIFICATIONS DIVISION IS UNDER THE IMMEDIATE SUPERVISION OF MAJOR WILLIAMS, BUT FOR ADMINISTRATIVE PURPOSES, PRINCIPALLY TO SECURE SIMILAR CONDITIONS OF EMPLOYMENT WITH PANAMA CANAL FORCES, THE CONSTRUCTION EMPLOYEES OF THE FORTIFICATIONS DIVISION ARE CARRIED ON PANAMA CANAL ROLLS, AND ARE EMPLOYED EXCLUSIVELY ON FORTIFICATIONS WORK UNDER DIRECT CONTROL OF MAJOR WILLIAMS; THUS THE PANAMA CANAL ACTS MERELY AS AGENT FOR THE PAYMENT OF THESE SALARIES, SUCH PAYMENTS BEING RECOVERED BY BILLS AGAINST THE ARMY APPROPRIATION FOR CANAL FORTIFICATIONS.

IN THE APPLICATION OF THE ECONOMY ACT THE PRESCRIBED DEDUCTIONS OF8 1/3 PERCENT HAVE BEEN MADE FROM FORTIFICATIONS DIVISION EMPLOYEES, THESE FUNDS FORMING A PART OF THE GENERAL IMPOUNDINGS FROM PANAMA CANAL EMPLOYEES REPORTED IN DUE FORM AND SUBJECT TO ULTIMATE COVERAGE INTO THE UNITED STATES TREASURY, BUT IN STATING BILLS AGAINST THE ARMY APPROPRIATION THE FULL BASE PAY OF THESE EMPLOYEES HAS BEEN INCLUDED, TO THE END THAT THE SOURCE OF THESE IMPOUNDINGS LIES IN THE ARMY APPROPRIATION, WHICH SEEMS PROPER, THE PANAMA CANAL IN THIS INSTANCE AGAIN ACTING MERELY AS AGENT FOR COLLECTION OF THE DEDUCTIONS.

THE ABOVE PROCEDURE WITH REGARD TO THE BASIC 8 1/3 PERCENT FURLOUGH DEDUCTIONS HAS BEEN ACCEPTABLE TO THE ARMY OFFICIALS, BUT IN THE MATTER OF ADDITIONAL IMPOUNDINGS TO COVER VACANT POSITIONS, QUESTION HAS ARISEN IN CERTAIN INSTANCES AS TO THE CORRECT APPLICATION OF THE ECONOMY ACT. IT IS ASSUMED BY THE PANAMA CANAL, HOWEVER, THAT SUCH OF THESE IMPOUNDINGS AS ARE FINALLY DETERMINED TO BE PROPER ARE NECESSARILY CHARGEABLE TO THE ARMY APPROPRIATION IN THE SAME MANNER AS THE FURLOUGH DEDUCTIONS.

DUE TO INSUFFICIENT FUNDS IN THE ARMY APPROPRIATIONS, THE DEPARTMENT ENGINEER PLACED A FORTIFICATION DIVISION EMPLOYEE (H. R. PICKENS) ON LEAVE WITH PAY OF 110 DAYS EFFECTIVE JUNE 14, 1932, AND ON A PREVIOUS DATE HAD NOTIFIED THE EMPLOYEE THAT HIS SERVICES WOULD NO LONGER BE REQUIRED BUT THAT IN ACCORDANCE WITH THE GOVERNOR'S POLICY HE WOULD BE CARRIED ON LEAVE WITHOUT PAY AT THE EXPIRATION OF ALL LEAVE WITH PAY THEN DUE HIM. ON JULY 1, 1932, THEREFORE, DUE TO THE PROVISIONS OF THE ECONOMY ACT HE BECAME IN A STATUS OF "ON ADMINISTRATIVE FURLOUGH.'

ON SEPTEMBER 21, 1932, THIS EMPLOYEE WAS TRANSFERRED TO A PERMANENT POSITION WITH THE PANAMA RAILROAD COMPANY, A SELF-SUPPORTING CORPORATION WHOSE CAPITAL STOCK IS OWNED BY THE UNITED STATES GOVERNMENT. THE PANAMA CANAL IMPOUNDED THIS SALARY FROM SEPTEMBER 21, TO THE END OF THE YEAR, THIS ITEM BEING INCLUDED IN THE REGULAR REPORT OF IMPOUNDINGS FOR SEPTEMBER.

AT THE TIME THIS ACTION WAS TAKEN YOUR DECISION A-45027, DATED OCTOBER 19, WAS NOT AVAILABLE, FROM WHICH IT NOW APPEARS IT WOULD HAVE BEEN PROPER TO HAVE CONTINUED TO CARRY THIS MAN ON ADMINISTRATIVE FURLOUGH FOR THE BALANCE OF THE YEAR, EVEN THOUGH HE WAS TRANSFERRED TO A PERMANENT POSITION WITH THE PANAMA RAILROAD COMPANY, AS IT WOULD SEEM UNFAIR TO DECLINE TO APPOINT THIS MAN MERELY BECAUSE HE WAS ON ADMINISTRATIVE FURLOUGH, AND IT ALSO SEEMS UNFAIR TO IMPOUND HIS SALARY BECAUSE HE TERMINATED HIS SERVICE WITH THE FORTIFICATIONS DIVISION WHEN IT WAS INTENDED TO CARRY HIM ON ADMINISTRATIVE FURLOUGH TO THE END OF THE YEAR.

DECISION IS REQUESTED AS TO WHETHER THE PANAMA CANAL REPORT OF IMPOUNDINGS MAY BE CORRECTED SO AS TO RECOVER THE AMOUNT IMPOUNDED IN THE ABOVE INSTANCE TO THE ULTIMATE RELIEF OF THE ARMY APPROPRIATION AGAINST WHICH THE AMOUNT OF THIS IMPOUNDMENT WILL BE INCLUDED IN PANAMA CANAL BILLS FOR COST OF SERVICE RENDERED.

ANOTHER CASE IS THAT OF A JUNIOR ENGINEER EMPLOYED BY THE FORTIFICATIONS DIVISION UP TO AUGUST 16, 1932, AT $3,375.00 PER ANNUM, AT WHICH TIME HE WAS TRANSFERRED TO A NEW POSITION AT $3,250.00 PER ANNUM AS ASSISTANT ENGINEER AT MADDEN DAM, WHICH IS BEING CONSTRUCTED UNDER APPROPRIATION FOR MAINTENANCE AND OPERATION OF THE PANAMA CANAL, THE POSITION REMAINING VACANT IN THE FORTIFICATIONS DIVISION. THE PANAMA CANAL IMPOUNDED THE SAVINGS REPRESENTED BY THE DIFFERENCE BETWEEN THESE SALARIES FROM AUGUST 16, 1932, TO JUNE 30, 1933, THIS AMOUNT TO BE INCLUDED IN BILLS AGAINST THE ARMY APPROPRIATION.

THESE MATTERS ARE BEING REFERRED TO YOU FOR DECISION AS TO THE CORRECTNESS OF GENERAL PROCEDURE OUTLINED ABOVE, AND WITH RESPECT TO THE INDIVIDUAL CASES CITED.

THE PRACTICE OF CHARGING AGAINST THE ARMY APPROPRIATIONS THE GROSS COMPENSATION INCLUDING AMOUNTS IMPOUNDED UNDER THE ECONOMY ACT BY REASON OF FURLOUGH DEDUCTIONS OF EMPLOYEES OF THE PANAMA CANAL ENGAGED UPON WORK FOR THE ARMY IS CORRECT. SEE 12 COMP. GEN. 182; ID. 345.

THE DECISION OF OCTOBER 19, 1932, A-45027, REPORTED IN 12 COMP. GEN. 403, AUTHORIZED THE APPOINTMENT TO TEMPORARY OR SEASONAL POSITIONS, ONLY OF EMPLOYEES ON ADMINISTRATIVE FURLOUGH. AN APPOINTMENT TO A PERMANENT POSITION IN OR UNDER THE UNITED STATES GOVERNMENT WOULD EFFECTIVELY TERMINATE THE ADMINISTRATIVE FURLOUGH FROM THE PRIOR POSITION, LEAVING THE PRIOR POSITION VACANT AND REQUIRING THE IMPOUNDING OF THE SALARY OF THE VACANT POSITION FOR THE REMAINDER OF THE FISCAL YEAR OR UNTIL FILLED BY AUTHORITY OF THE PRESIDENT. THE AMOUNTS WHICH MAY BE CHARGED BY ONE GOVERNMENT ESTABLISHMENT TO ANOTHER REPRESENT THE COST OF SERVICES RENDERED. OBVIOUSLY, AN EMPLOYEE PLACED ON ADMINISTRATIVE FURLOUGH FOR THE PURPOSE OF CONSERVING PANAMA CANAL APPROPRIATIONS RENDERS NO SERVICE AND RESULTS IN NO EXPENSE TO A PANAMA CANAL APPROPRIATION WHICH MAY BE CHARGED AS AN ITEM OF COST TO ANOTHER GOVERNMENT ESTABLISHMENT. LIKEWISE, A VACANT POSITION, THE COMPENSATION OF WHICH ORDINARILY IS PAID FROM A PANAMA CANAL APPROPRIATION, REPRESENTS NO SERVICE PERFORMED FOR THE ARMY AND CONSEQUENTLY CAN NOT BE COUNTED AS AN ITEM OF COST. THE AMOUNT OF THE SALARY OF THE VACANT POSITION REQUIRED TO BE IMPOUNDED BY THE ECONOMY ACT MUST REMAIN AS A CHARGE AGAINST THE PANAMA CANAL APPROPRIATION.