A-57845, NOVEMBER 5, 1934, 14 COMP. GEN. 358

A-57845: Nov 5, 1934

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WAS WITHOUT SUBSISTENCE ALLOWANCE. THE FOLLOWING ADMINISTRATIVE REPLY WAS MADE TO THE EXCEPTION NOTED BY THIS OFFICE: 1. IS SHOWN BELOW. PROVING THAT HER LAST PAY STATUS WAS A REDUCTION IN PAY. THE ACTUAL COST OF SUBSISTENCE TO THE GOVERNMENT IS APPROXIMATELY $10.20 PER MONTH FOR THE FISCAL YEAR 1934. THE ACTUAL SAVINGS TO THE GOVERNMENT FROM THE OLD RATE OF PAY TO THE NEW RATE IS ACTUALLY $12.67 PER MONTH INSTEAD OF A LOSS AS IT APPEARS ON PAPER TRANSACTION OF PAY ROLLS. THE REASONABLE VALUE TO THE EMPLOYEE OF ALLOWANCES FURNISHED IN KIND TO FEDERAL PERSONNEL IS REQUIRED TO BE DETERMINED AND CONSIDERED AS A PART OF COMPENSATION IN FIXING SALARY RATES. THERE HAVE BEEN MANY DECISIONS OF THE OFFICE HOLDING THAT THE VALUE OF ALLOWANCES DETERMINED PURSUANT TO THIS STATUTE IS TO BE REGARDED EXACTLY AS THOUGH THE EMPLOYEE RECEIVED THE SAME AMOUNT IN CASH IN CONNECTION WITH ANY QUESTION INVOLVING THE TOTAL SALARY RATE OF AN EMPLOYEE.

A-57845, NOVEMBER 5, 1934, 14 COMP. GEN. 358

COMPENSATION - ADMINISTRATIVE PROMOTION - ALLOWANCES IN KIND IN DETERMINING WHETHER AN ADMINISTRATIVE PROMOTION HAS BEEN MADE IN CONTRAVENTION OF LAW, THE TOTAL SALARY RATE FIXED FOR THE EMPLOYEE, INCLUDING BOTH THE CASH PAID AND THE DETERMINED VALUE OF ALLOWANCES FURNISHED IN KIND, MUST CONTROL, AND NOT THE AMOUNT OF CASH PAID ONLY.

COMPTROLLER GENERAL MCCARL TO MAJ. E. T. COMEGYS, UNITED STATES ARMY, NOVEMBER 5, 1934:

THERE HAS BEEN RECEIVED, THROUGH THE CHIEF OF FINANCE, WAR DEPARTMENT, YOUR REQUEST OF SEPTEMBER 14, 1934, FOR REVIEW OF THE DISALLOWANCE IN YOUR ACCOUNTS FOR JULY 1933, OF THE DIFFERENCE BETWEEN THE COMPENSATION PAID TO ORA L. MANDELL, SEAMSTRESS, STATION HOSPITAL, FORT SAM HOUSTON, TEX., AT THE RATE OF $780 PER ANNUM AND COMPENSATION AT THE RATE OF $750 PER ANNUM, THE DISALLOWANCE BEING FOR THE REASON IT APPEARED THE INCREASE IN SALARY RATE FROM $750 TO $780 PER ANNUM INVOLVED AN ADMINISTRATIVE PROMOTION IN CONTRAVENTION OF SECTION 202 OF THE ECONOMY ACT AND SECTION 7 OF THE ACT OF MARCH 3, 1933, 47 STAT. 1515.

THE SALARY RATE OF $750 PER ANNUM PAID PRIOR TO JULY 1, 1933, WAS WITHOUT SUBSISTENCE ALLOWANCE. THE SALARY RATE OF $780 FIXED AS EFFECTIVE ON JULY 1, 1933, REPRESENTED $480 CASH AND $300 AS THE FIXED VALUE OF SUBSISTENCE FURNISHED, MAKING AN ACTUAL REDUCTION IN THE AMOUNT OF CASH PAID BUT AN INCREASE OF $30 PER ANNUM IN THE TOTAL SALARY RATE.

UNDER DATE OF JUNE 20, 1934, THE FOLLOWING ADMINISTRATIVE REPLY WAS MADE TO THE EXCEPTION NOTED BY THIS OFFICE:

1. REFERENCE VOUCHER NO. 286, AUGUST 1933, PAY ROLL FOR JULY 1-31, 1933, ACCOUNTS MAJOR E. T. COMEGYS, F.D., PAGE 1, LINE 6, MANDELL, ORA L. (SEAMSTRESS), UNDER REMARKS AND AFTER "$25.00 DED. FOR SUBS. ALLOW.' THERE SHOULD APPEAR "DEMOTED FROM $750 CASH SALARY AND NO ALLOWANCES TO $480.00 AND $300.00 SUBSISTENCE ALLOWANCE PER ANNUM.

2. MRS. MANDELL'S PAY STATUS, OLD AND NEW, IS SHOWN BELOW, PROVING THAT HER LAST PAY STATUS WAS A REDUCTION IN PAY, RATHER THAN A PROMOTION EVEN THOUGH ON PAPER IT APPEARS OTHERWISE.

TABLE

GROSS SUBSISTENCE RETIREMENT 15 PERCENT NET AMOUNT

AMOUNT ALLOWANCE DEDUCTION DEDUCTION PAID OLD PAY --------- $62.50

NONE $2.20 $9.38 $50.92 NEW PAY --------- 65.00 $25.00 2.28 9.75 27.97

3. THE ACTUAL COST OF SUBSISTENCE TO THE GOVERNMENT IS APPROXIMATELY $10.20 PER MONTH FOR THE FISCAL YEAR 1934. UNDER THE OLD SALARY SHE RECEIVED $50.92, PLUS $2.20 RETIREMENT DEDUCTION, EQUALS $53.12. UNDER THE NEW SALARY SHE RECEIVES $27.97, PLUS $2.28 RETIREMENT DEDUCTION, PLUS ($10.20 COST OF SUBSISTENCE TO THE GOVERNMENT) EQUALS $40.45. THE ACTUAL SAVINGS TO THE GOVERNMENT FROM THE OLD RATE OF PAY TO THE NEW RATE IS ACTUALLY $12.67 PER MONTH INSTEAD OF A LOSS AS IT APPEARS ON PAPER TRANSACTION OF PAY ROLLS.

UNDER THE PROVISIONS OF SECTION 3 OF THE ACT OF MARCH 5, 1928, 45 STAT. 193, THE REASONABLE VALUE TO THE EMPLOYEE OF ALLOWANCES FURNISHED IN KIND TO FEDERAL PERSONNEL IS REQUIRED TO BE DETERMINED AND CONSIDERED AS A PART OF COMPENSATION IN FIXING SALARY RATES. THERE HAVE BEEN MANY DECISIONS OF THE OFFICE HOLDING THAT THE VALUE OF ALLOWANCES DETERMINED PURSUANT TO THIS STATUTE IS TO BE REGARDED EXACTLY AS THOUGH THE EMPLOYEE RECEIVED THE SAME AMOUNT IN CASH IN CONNECTION WITH ANY QUESTION INVOLVING THE TOTAL SALARY RATE OF AN EMPLOYEE, THE FURNISHING BY THE GOVERNMENT OF SUCH ALLOWANCES TO THE EMPLOYEE BEING REGARDED AS HAVING RELIEVED THE EMPLOYEE FROM EXPENDING THE SAID VALUE FOR SUCH ALLOWANCES.

THEREFORE, IN DETERMINING WHETHER AN ADMINISTRATIVE PROMOTION HAS BEEN GIVEN IN CONTRAVENTION OF LAW, THE TOTAL SALARY RATE FIXED FOR THE EMPLOYEE, INCLUDING BOTH THE CASH PAID AND THE DETERMINED VALUE OF ALLOWANCES FURNISHED IN KIND, MUST CONTROL, AND NOT THE AMOUNT OF CASH PAID ONLY. ON THIS BASIS, IT IS APPARENT THAT AN ADMINISTRATIVE PROMOTION WAS GRANTED IN THIS CASE AND THE AUDIT ACTION DISALLOWING CREDIT FOR THE AMOUNT IN QUESTION IN YOUR ACCOUNTS MUST BE AND IS SUSTAINED.