A-4758, A-5136, NOVEMBER 3, 1924, 4 COMP. GEN. 422

A-4758,A-5136: Nov 3, 1924

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ACCOUNTING - SET-OFFS - WORLD WAR ADJUSTED COMPENSATION ACT THE RELATION OF PRINCIPAL AND AGENT EXISTING BETWEEN THE UNITED STATES AND ITS ACCOUNTABLE OFFICERS AND AGENTS IS SUCH AS TO AUTHORIZE. IF THE AMOUNT OF THE INDEBTEDNESS WAS ORIGINALLY CHARGEABLE TO THE PUBLIC ACCOUNT OF THE RECIPIENT OF THE ERRONEOUS PAYMENT. THE MATTER IS ONE OF COOPERATION BETWEEN PRINCIPAL AND AGENT AND CARRIES WITH IT NO LEGAL LIABILITY OF THE PRINCIPAL TO THE AGENT. ARE SUBJECT TO SET-OFF OF AMOUNTS OWING TO THE UNITED STATES BY THE VETERANS. IF SUCH BALANCE IS FOR $50 OR LESS. PAYMENT THEREOF MAY BE ACCOMPLISHED AS THOUGH THE TOTAL CREDIT WAS FOR ONLY $50 OR LESS. SIMILAR ACTION SHOULD BE TAKEN IN CASES WHERE THE VETERAN IS ENTITLED TO ADJUSTED SERVICE PAY IN THE SUM OF $50.

A-4758, A-5136, NOVEMBER 3, 1924, 4 COMP. GEN. 422

ACCOUNTING - SET-OFFS - WORLD WAR ADJUSTED COMPENSATION ACT THE RELATION OF PRINCIPAL AND AGENT EXISTING BETWEEN THE UNITED STATES AND ITS ACCOUNTABLE OFFICERS AND AGENTS IS SUCH AS TO AUTHORIZE, WHENEVER PRACTICABLE, THE PRINCIPLES OF SUBROGATION AS AGAINST RECIPIENTS OF ERRONEOUS PAYMENTS BY SUCH OFFICERS OR AGENTS, IF THE AMOUNT OF THE INDEBTEDNESS WAS ORIGINALLY CHARGEABLE TO THE PUBLIC ACCOUNT OF THE RECIPIENT OF THE ERRONEOUS PAYMENT. THE MATTER IS ONE OF COOPERATION BETWEEN PRINCIPAL AND AGENT AND CARRIES WITH IT NO LEGAL LIABILITY OF THE PRINCIPAL TO THE AGENT. ADJUSTED SERVICE CREDITS DUE VETERANS OR AMOUNTS PAYABLE TO THEIR DEPENDENTS OR BENEFICIARIES UNDER THE WORLD WAR ADJUSTED COMPENSATION ACT OF MAY 19, 1924, 43 STAT. 121, ARE SUBJECT TO SET-OFF OF AMOUNTS OWING TO THE UNITED STATES BY THE VETERANS, THEIR DEPENDENTS, OR BENEFICIARIES, EXCEPT WHERE BARRED BY STATUTE OR PREFERRED LIEN OF THIRD PARTIES. WHERE A VETERAN WOULD, EXCEPT FOR HIS INDEBTEDNESS, BE ENTITLED TO ADJUSTED SERVICE CREDIT IN EXCESS OF $50, THE AMOUNT OF HIS INDEBTEDNESS SHOULD BE DEDUCTED THEREFROM AND AN ADJUSTED SERVICE CERTIFICATE ISSUED ON ACCOUNT OF THE BALANCE TO HIS CREDIT IF IN EXCESS OF $50; BUT IF SUCH BALANCE IS FOR $50 OR LESS, PAYMENT THEREOF MAY BE ACCOMPLISHED AS THOUGH THE TOTAL CREDIT WAS FOR ONLY $50 OR LESS, SAME HAVING BEEN REDUCED BECAUSE OF ADVANCES TO THE VETERAN. SIMILAR ACTION SHOULD BE TAKEN IN CASES WHERE THE VETERAN IS ENTITLED TO ADJUSTED SERVICE PAY IN THE SUM OF $50, OR LESS. WHERE OVERPAYMENTS WERE MADE TO "VETERAN" OFFICERS AND ENLISTED MEN OF THE REGULAR ARMY AND OF THE NATIONAL GUARD FROM FEDERAL FUNDS, BECAUSE OF NONDEDUCTION OF ALLOTMENTS AND AMOUNTS DUE POST EXCHANGES, COMPANY FUNDS, AND OTHER GOVERNMENTAL AGENCIES, CHARGEABLE TO THE PAY AND ALLOWANCES OF THE OFFICERS AND ENLISTED MEN, WHICH CAN NOT BE COLLECTED BY REASON OF THEIR SEPARATION FROM THE SERVICE, OR REFUSAL OR INABILITY TO MAKE REFUND, DEDUCTION THEREOF SHOULD BE MADE FROM THE VETERAN'S ADJUSTED COMPENSATION REGARDLESS OF WHETHER THE RESPONSIBLE OFFICER HAS BEEN CHARGED WITH THE OVERPAYMENTS FOR FAILURE TO MAKE PROPER DEDUCTIONS THEREOF FROM CURRENT PAY AND ALLOWANCES. THE SAME ACTION SHOULD BE TAKEN EVEN THOUGH THE RESPONSIBLE OFFICER HAS REPAID INTO THE TREASURY AN AMOUNT SO OVERPAID, PROVIDED IT BE SHOWN THAT THE AMOUNT OF THE REPAYMENT WAS NOT OTHERWISE COLLECTED FROM THE VETERAN, BUT NO LIABILITY ARISES AGAINST THE UNITED STATES FOR FAILURE OF ITS OFFICERS AND EMPLOYEES TO SO PROTECT AN ACCOUNTABLE OFFICER CHARGED WITH AN OVERPAYMENT.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, NOVEMBER 3, 1924:

I HAVE YOUR LETTERS OF AUGUST 14 AND SEPTEMBER 8, 1924, REQUESTING DECISION OF SEVERAL QUESTIONS AS TO WHETHER THE ADJUSTED SERVICE CREDITS DUE VETERANS UNDER THE WORLD WAR ADJUSTED COMPENSATION ACT OF MAY 19,1924, 43 STAT. 121, MAY BE USED TO OFFSET INDEBTEDNESSES OF VETERANS OR THEIR DEPENDENTS DUE THE UNITED STATES OR ITS AGENCIES, OR FACILITIES, UNDER THE CIRCUMSTANCES STATED, REFERENCE BEING HAD TO DECISION OF JUNE 27, 1924, 3 COMP. GEN. 1006, WHEREIN IT WAS HELD THAT AMOUNTS PAYABLE TO VETERANS ARE SUBJECT TO SET-OFF ON ACCOUNT OF INDEBTEDNESSES OF VETERANS TO THE UNITED STATES.

THE GENERAL RULE AS BETWEEN DEBTOR AND CREDITOR IS THAT WHERE THE DEBTOR HAS OVERPAID AN EARLIER ACCOUNT OF THE CREDITOR, OR A CREDIT OTHERWISE EXISTS IN FAVOR OF THE INSTANT DEBTOR, SUCH OVERPAYMENT OR CREDIT IS DEEMED IN LAW TO BE AN ADVANCE ON ANY FUTURE ACCOUNT, AND THE DEBTOR MAY INSIST UPON CREDIT THEREFOR WHEN ADJUSTING SUBSEQUENT DEMANDS OF HIS CREDITOR. IN CONSIDERING THE MATTERS HERE IN QUESTION THE UNITED STATES MAY BE DENOMINATED THE DEBTOR AND THE BENEFICIARY OF THE ADJUSTED COMPENSATION THE CREDITOR. IN THEORY IMMEDIATELY UPON THE ENACTMENT OF THE ACT OF MAY 19, 1924, SUPRA, CERTAIN CREDITS ACCRUED TO THE VETERANS ENTITLED THEREUNDER, LESS THE AMOUNTS ADVANCED ON ACCOUNT THEREOF BY THE DEBTOR BY REASON OF PRIOR OVERPAYMENTS, ETC. THE RESULT IS THAT THE WORLD WAR ADJUSTED COMPENSATION ACT AUTHORIZED THE CREDITING TO THE VETERANS ONLY THOSE AMOUNTS DUE OVER AND ABOVE ADVANCES MADE.

THE FOREGOING IS FUNDAMENTAL, NOTWITHSTANDING WHAT APPEAR TO BE CONFLICTING DETAILS FOUND IN THE ACT OF MAY 19, 1924, PREPONDERANCE OF AUTHORITY BEING IN SUPPORT THEREOF ASIDE FROM THE RULES OF CONSTRUCTION REQUIRING THE DOING OF THAT WHICH IS POSSIBLE AND PRACTICABLE.

IN THOSE CASES WHERE A VETERAN WOULD, EXCEPT FOR HIS INDEBTEDNESS, BE ENTITLED TO ADJUSTED SERVICE CREDIT IN EXCESS OF $50, THE AMOUNT OF HIS INDEBTEDNESS SHOULD BE DEDUCTED THEREFROM AND AN ADJUSTED SERVICE CERTIFICATE ISSUED ON ACCOUNT OF THE BALANCE TO HIS CREDIT IF IN EXCESS OF $50; BUT IF SUCH BALANCE IS FOR $50 OR LESS, PAYMENT THEREOF MAY BE ACCOMPLISHED AS THOUGH THE TOTAL CREDIT WAS FOR ONLY $50 OR LESS, SAME HAVING BEEN REDUCED BECAUSE OF ADVANCES TO THE VETERAN. SIMILAR ACTION SHOULD BE TAKEN IN CASES WHERE THE VETERAN IS ENTITLED TO ADJUSTED SERVICE PAY IN THE SUM OF $50 OR LESS AS TO WHICH NO QUESTION IS RAISED.

AS TO THOSE CASES IN WHICH OVERPAYMENTS WERE MADE TO "VETERAN" OFFICERS AND ENLISTED MEN OF THE REGULAR ARMY AND OF THE NATIONAL GUARD FROM FEDERAL FUNDS BECAUSE OF NONDEDUCTION OF ALLOTMENTS AND AMOUNTS DUE POST EXCHANGES, COMPANY FUNDS, AND OTHER GOVERNMENTAL AGENCIES, CHARGEABLE TO THE PAY AND ALLOWANCES OF THE OFFICERS AND ENLISTED MEN, WHICH CAN NOT BE COLLECTED BY REASON OF THEIR SEPARATION FROM THE SERVICE, REFUSAL OR INABILITY TO MAKE REFUND, DEDUCTION THEREOF SHOULD BE MADE FROM THE VETERANS' ADJUSTED COMPENSATION REGARDLESS OF WHETHER THE RESPONSIBLE OFFICER HAS BEEN CHARGED WITH THE OVERPAYMENTS FOR FAILURE TO MAKE PROPER DEDUCTIONS THEREOF FROM CURRENT PAY AND ALLOWANCES. THE SAME ACTION SHOULD BE TAKEN EVEN THOUGH THE RESPONSIBLE OFFICER HAS REPAID INTO THE TREASURY AN AMOUNT SO OVERPAID, PROVIDED IT BE SHOWN THAT THE AMOUNT OF THE REPAYMENT WAS NOT OTHERWISE COLLECTED FROM THE VETERAN, BUT NO LIABILITY ARISES AGAINST THE UNITED STATES FOR FAILURE OF ITS OFFICERS AND EMPLOYEES TO SO PROTECT AN ACCOUNTABLE OFFICER CHARGED WITH AN OVERPAYMENT.

THE RELATION OF PRINCIPAL AND AGENT EXISTING BETWEEN THE UNITED STATES AND ITS ACCOUNTABLE OFFICERS AND AGENTS IS SUCH AS TO AUTHORIZE, WHENEVER PRACTICABLE, THE PRINCIPLES OF SUBROGATION AS AGAINST RECIPIENTS OF ERRONEOUS PAYMENTS BY SUCH OFFICERS OR AGENTS, IF THE AMOUNT OF THE INDEBTEDNESS WAS ORIGINALLY CHARGEABLE TO THE PUBLIC ACCOUNT OF THE RECIPIENT OF THE ERRONEOUS PAYMENT. THE MATTER IS ONE OF COOPERATION BETWEEN PRINCIPAL AND AGENT AND CARRIES WITH IT NO LEGAL LIABILITY OF THE PRINCIPAL TO THE AGENT.

YOU ASK ALSO WHETHER YOU MAY DEDUCT FROM AMOUNTS PAYABLE TO DEPENDENTS THE AMOUNTS OWING TO THE UNITED STATES BY THE VETERAN UPON WHOSE MILITARY OR NAVAL SERVICE SUCH DEPENDENTS BASE THEIR CLAIMS. THE SAME QUESTION MIGHT ARISE AS TO BENEFICIARIES AND WILL BE CONSIDERED ACCORDINGLY, BOTH AS TO AMOUNTS DUE THE UNITED STATES FROM VETERANS AS WELL AS FROM DEPENDENTS AND BENEFICIARIES, PARTICULARLY AS TO OVERPAYMENTS OF ALLOTMENTS, ETC., TO THE LATTER AS ALLOTTEES, ETC., EXCEPT WHERE BARRED BY STATUTE OR THE PREFERRED LIEN OF THIRD PERSONS.

SECTION 601 OF THE ACT OF MAY 19, 1924, SUPRA, PROVIDES THAT IF A VETERAN HAS DIED BEFORE MAKING APPLICATION OR HAS DIED AFTER MAKING APPLICATION BUT BEFORE HE HAS RECEIVED PAYMENT UNDER TITLE IV, THEN THE AMOUNT OF "HIS" ADJUSTED SERVICE CREDIT SHALL BE PAID TO "HIS" DEPENDENTS. SECTION 603 PROVIDES THAT NO SUCH PAYMENTS SHALL BE MADE TO THE HEIRS OR LEGAL REPRESENTATIVES OF ANY DEPENDENTS. UNDER SECTION 501 THE AMOUNT OF THE FACE VALUE OF THE ADJUSTED SERVICE CERTIFICATE SHALL BE PAYABLE TO THE "VETERAN" OR, UPON HIS DEATH, PRIOR TO THE EXPIRATION OF THE 20-YEAR PERIOD, TO THE NAMED BENEFICIARY," IN"TO PROVIDE ADJUSTED COMPENSATION FOR VETERANS," AND "TITLE III. GENERAL PROVISIONS," CARRIES THE SUBTITLE "BENEFITS GRANTED VETERANS," PROVIDING THAT "EACH VETERAN SHALL BE ENTITLED---

"* * * TO RECEIVE" SERVICE PAY OR A CERTIFICATE.

NO SUCH DECLARATIONS OR PROVISIONS APPEAR AS TO DEPENDENTS OR BENEFICIARIES. ON THE CONTRARY, IT CLEARLY APPEARS THAT ONLY LIMITED CLASSES MAY BENEFIT UPON DEATH OF THE VETERAN ON ACCOUNT OF ,HIS" SERVICE CREDIT. THE SERVICE CREDIT PASSES TO OTHERS ONLY UPON CERTAIN CONTINGENCIES AND NO ESTATE IS BENEFITED OR CREATED THEREBY EXCEPT THAT OF THE VETERAN. NONE BUT THE VETERAN CAN ASSIGN OR PASS TITLE THERETO. EVEN THOUGH INSTALLMENTS HAVE BEEN PAID TO A RECOGNIZED DEPENDENT NOTHING PASSES TO HIS OR HER ESTATE. NEITHER THE DEPENDENTS NOR BENEFICIARIES HAVE VESTED RIGHTS IN UNPAID COMPENSATION THAT DO NOT REVERT TO OTHERS THROUGH THEIR RELATIONSHIP TO THE VETERAN.

YOU ARE THEREFORE ADVISED THAT AMOUNTS PAYABLE TO DEPENDENTS ARE SUBJECT TO SET-OFF OF AMOUNTS OWING TO THE UNITED STATES BY THE VETERANS. AMOUNTS DUE THE UNITED STATES BY DEPENDENTS OR BENEFICIARIES ARE LIKEWISE SUBJECT TO SET-OFF.

UNDER THE PROCEDURE NOW IN EFFECT WITH REFERENCE TO REPORTING TO THE BUREAU THE INDEBTEDNESS OF VETERANS AND NOTICE TO EACH VETERAN OR BENEFICIARY OF THE CONTEMPLATED DEDUCTION ON ACCOUNT THEREOF, IT WOULD SEEM ADVISABLE TO GIVE SUCH VETERAN OR BENEFICIARY AN OPPORTUNITY TO PAY THE AMOUNT OF THE INDEBTEDNESS AND RECEIVE COMPENSATION OR ADJUSTED SERVICE CERTIFICATE FOR THE FULL AMOUNT ACCRUING UNDER THE ACT INSTEAD OF HAVING SAME DEDUCTED FROM THE AMOUNT OF SERVICE CREDIT. SUCH A PROCEDURE WILL ENABLE THE DEBTOR VETERANS WHO SO DESIRE TO TAKE ADVANTAGE OF THE INVESTMENT FEATURES PROVIDED IN THOSE CASES OTHERWISE REQUIRING THE ISSUANCE OF THE ADJUSTED SERVICE CERTIFICATE.