B-107370, APRIL 15, 1952, 31 COMP. GEN. 512

B-107370: Apr 15, 1952

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WOULD BE PROHIBITED ONLY WHEN THE RESTRICTIVE PROVISION OF SECTION 703 IS OPERATIVE WITH RESPECT TO THE FEDERAL SECURITY AGENCY AS A WHOLE OR WOULD BECOME OPERATIVE BECAUSE SERVICES PERFORMED INCIDENT TO A REIMBURSABLE TRANSACTION WOULD REQUIRE THE FILLING OF VACANCIES IN CONTRAVENTION OF SAID RESTRICTION. ATTACHES TO THE APPROPRIATIONS OF THE FEDERAL SECURITY AGENCY NOT OTHERWISE EXCEPTED BY THE SECTION AND THE FACT THAT APPROPRIATIONS USED IN CONTRAVENTION OF SECTION 703 SUBSEQUENTLY MAY BE REIMBURSED IS NOT CONTROLLING. - IN REIMBURSABLE TRANSACTIONS IT IS THE PRESENCE OR ABSENCE OF THE RESTRICTION UPON THE APPROPRIATION IMMEDIATELY USED TO PAY THE COMPENSATION ATTACHED TO A POSITION THAT PRIMARILY DETERMINES ITS AVAILABILITY.

B-107370, APRIL 15, 1952, 31 COMP. GEN. 512

COMPENSATION - RESTRICTION ON APPOINTMENTS TO VACANT POSITIONS DURING FISCAL YEAR 1952 - REIMBURSABLE TRANSPORTATIONS - LABOR-FEDERAL SECURITY APPROPRIATION ACT, 1952 THE 90 PERCENT CEILING ON EMPLOYEES UNDER SECTION 703 OF THE LABOR FEDERAL SECURITY APPROPRIATION ACT, 1952, WHICH WHEN REACHED AND NOT EXCEEDED, PERMITS THE UNRESTRICTED FILLING OF VACANCIES UPON THE BASIS OF THE EMPLOYMENT LEVEL IN THE AGENCY AS A WHOLE SO THAT THE USE OF AN APPROPRIATION FOR PAYMENT OF COMPENSATION IN THE CONDUCT OF REIMBURSABLE TRANSACTIONS CARRIED ON UNDER AUTHORITY OF SECTION 601 OF THE ECONOMY ACT OF 1932, AS AMENDED, WOULD BE PROHIBITED ONLY WHEN THE RESTRICTIVE PROVISION OF SECTION 703 IS OPERATIVE WITH RESPECT TO THE FEDERAL SECURITY AGENCY AS A WHOLE OR WOULD BECOME OPERATIVE BECAUSE SERVICES PERFORMED INCIDENT TO A REIMBURSABLE TRANSACTION WOULD REQUIRE THE FILLING OF VACANCIES IN CONTRAVENTION OF SAID RESTRICTION. THE PROVISIONS OF SECTION 703 OF THE LABOR-FEDERAL SECURITY APPROPRIATION ACT, 1952, PROHIBITING EXPENDITURE OF FUNDS FOR PAYMENT OF COMPENSATION OF EMPLOYEES APPOINTED TO POSITIONS BECOMING VACANT DURING THE FISCAL YEAR 1952, ATTACHES TO THE APPROPRIATIONS OF THE FEDERAL SECURITY AGENCY NOT OTHERWISE EXCEPTED BY THE SECTION AND THE FACT THAT APPROPRIATIONS USED IN CONTRAVENTION OF SECTION 703 SUBSEQUENTLY MAY BE REIMBURSED IS NOT CONTROLLING--- IN REIMBURSABLE TRANSACTIONS IT IS THE PRESENCE OR ABSENCE OF THE RESTRICTION UPON THE APPROPRIATION IMMEDIATELY USED TO PAY THE COMPENSATION ATTACHED TO A POSITION THAT PRIMARILY DETERMINES ITS AVAILABILITY. FUNDS ADVANCED OR REIMBURSED FROM APPROPRIATIONS FALLING WITHIN THE EXCEPTIONS TO THE PROVISIONS OF SECTION 703 OF THE LABOR-FEDERAL SECURITY APPROPRIATION ACT, 1952, PROHIBITING EXPENDITURE OF FUNDS FOR PAYMENT OF COMPENSATION OF EMPLOYEES APPOINTED TO POSITIONS BECOMING VACANT DURING THE FISCAL YEAR 1952, MAY BE EXPENDED WITHOUT REGARD TO THE LIMITATIONS OF SECTION 703 EXCEPT WITH RESPECT TO REIMBURSABLE TRANSACTIONS RELATED TO APPROPRIATIONS SUBJECT TO THE RESTRICTION. IN APPLYING THE PROVISIONS OF SECTION 703 OF THE LABOR-FEDERAL SECURITY APPROPRIATION ACT, 1952, RESTRICTING THE EXPENDITURE OF FUNDS FOR PAYMENT OF COMPENSATION OF EMPLOYEES APPOINTED TO POSITIONS BECOMING VACANT DURING THE FISCAL YEAR 1952, TO FUNDS MADE AVAILABLE BY TRANSFER IN CONNECTION WITH REIMBURSABLE INDIVIDUAL CEILINGS CALCULATED BY AN ANALYSIS OF EACH SOURCE OF FUNDS; ALSO THE COMPOSITE CEILING SHOULD INCLUDE IN ADDITION TO THAT PROVIDED BY DIRECT APPROPRIATIONS, PERSONNEL TO BE COMPENSATED FROM ANTICIPATED OR UNANTICIPATED ADVANCES OR REIMBURSEMENTS FROM APPROPRIATIONS SUBJECT TO RESTRICTIONS CONTAINED IN SECTION 703 OF THE ACT.

ACTING COMPTROLLER GENERAL FISHER TO THE ADMINISTRATOR, FEDERAL SECURITY AGENCY, APRIL 15, 1952:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 7, 1952, WHICH PRESENTS FOR DECISION CERTAIN QUESTIONS ARISING IN CONNECTION WITH SECTION 703 (THE SO- CALLED JENSEN AMENDMENT) OF THE LABOR-FEDERAL SECURITY APPROPRIATION ACT, 1952, 65 STAT. 223, PUBLIC LAW 134, APPROVED AUGUST 31, 1951, AS IT AFFECTS TRANSACTIONS CARRIED ON UNDER AUTHORITY OF SECTION 601 OF THE ECONOMY ACT OF 1932, 47 STAT. 382, AS AMENDED BY SECTION 1210 OF THE GENERAL APPROPRIATION ACT, 1951, 64 STAT. 595.

SECTION 703 OF PUBLIC LAW 134, SUPRA, PROVIDES AS FOLLOWS:

NO PART OF ANY APPROPRIATION OR AUTHORIZATION CONTAINED IN THIS ACT SHALL BE USED TO PAY THE COMPENSATION OF ANY INCUMBENT APPOINTED TO ANY CIVIL OFFICE OR POSITION WHICH MAY BECOME VACANT DURING THE FISCAL YEAR BEGINNING ON JULY 1, 1951: PROVIDED, THAT THIS INHIBITION SHALL NOT APPLY-

(A) TO NOT TO EXCEED 25 PERCENTUM OF ALL VACANCIES;

(B) TO POSITIONS FILLED FROM WITHIN AND BY TRANSFER TO THE DEPARTMENT OR AGENCY;

(C) TO OFFICES OR POSITIONS REQUIRED BY LAW TO BE FILLED BY APPOINTMENT OF THE PRESIDENT BY AND WITH THE ADVICE AND CONSENT OF THE SENATE;

(D) TO SAINT ELIZABETHS HOSPITAL AND FREEDMEN'S HOSPITAL;

(E) TO THE PUBLIC HEALTH SERVICE;

(F) TO EDUCATIONAL INSTITUTIONS; AND

(G) TO PERSONNEL ENGAGED IN LAW ENFORCEMENT; PROVIDED FURTHER, THAT WHEN THE TOTAL NUMBER OF PERSONNEL SUBJECT TO THIS SECTION HAS BEEN REDUCED TO 90 PERCENTUM OF THE TOTAL PROVIDED FOR IN THE BUDGET ESTIMATES FOR 1952, THIS SECTION MAY CEASE TO APPLY.

THE QUESTIONS CONTAINED IN YOUR LETTER, WHICH TOGETHER WITH RELATED COMMENT ARE QUOTED HEREIN, ARE TREATED IN ORDER PRESENTED. INTRODUCTORY COMMENT TO QUESTION 1 IS AS FOLLOWS:

THE LAST SENTENCE OF THE ANSWER TO QUESTION (E) IN YOUR DECISION DATED SEPTEMBER 26, 1951, B-105402, READS. "ACCORDINGLY, IT MUST BE HELD THAT THE RESTRICTION OF SECTION 605 ( INDEPENDENT OFFICES APPROPRIATION ACT, 1952) FOLLOWS AN ADVANCE OF FUNDS TO A WORKING FUND AS DISTINGUISHED FROM A REIMBURSEMENT TRANSACTION.'

QUESTION 1: DOES THIS QUOTATION MEAN THAT THE METHOD OF PAYMENT IS CONTROLLING, I.E., THAT EVEN THOUGH AN APPROPRIATION SUBJECT TO SECTION 703 IS MADE WHOLE BY THE REIMBURSEMENT, SO THAT IN EFFECT IT WAS NOT USED, THE LIMITATIONS OF SECTION 703 ATTACH?

THE PURPOSE OF THE LANGUAGE QUOTED IN YOUR COMMENT PRELIMINARY TO QUESTION 1 WAS EXPLAINED IN OFFICE DECISION OF NOVEMBER 15, 1951, B 106101, TO THE SECRETARY OF COMMERCE, A COPY OF WHICH IS ENCLOSED FOR YOUR CONVENIENCE, AND IT NEED NOT BE CONSIDERED HERE IN THE ANSWER TO QUESTION 1.

IN OFFICE DECISION OF SEPTEMBER 26, 1951, B-105402, 31 COMP. GEN. 109, IT WAS HELD THAT THE RESTRICTION IN THE JENSEN AMENDMENT AGAINST THE FILLING OF VACANCIES APPLIES TO EACH INDIVIDUAL APPROPRIATION OR AUTHORIZATION CONTAINED IN THE ACT BUT THAT THE 90 PERCENT CEILING WHICH, WHEN REACHED AND NOT EXCEEDED, PERMITS THE UNRESTRICTED FILLING OF VACANCIES IS FOR DETERMINATION UPON THE BASIS OF THE EMPLOYMENT LEVEL IN AN AGENCY AS A WHOLE. THUS, THE USE OF AN APPROPRIATION FOR PAYMENT OF COMPENSATION IN THE CONDUCT OF REIMBURSABLE TRANSACTIONS WOULD BE PROHIBITED ONLY WHEN THE RESTRICTIVE PROVISION OF SECTION 703 WAS OPERATIVE WITH RESPECT TO THE FEDERAL SECURITY AGENCY AS A WHOLE OR WOULD BECOME OPERATIVE BECAUSE SERVICES PERFORMED INCIDENT TO A REIMBURSABLE TRANSACTION WOULD REQUIRE THE FILLING OF VACANCIES IN CONTRAVENTION OF THE RESTRICTION IN SECTION 703. SPECIFICALLY, AS TO WHETHER THE LIMITATION OF SECTION 703 ATTACHES TO THE APPROPRIATIONS OF THE AGENCY NOT OTHERWISE EXCEPTED BY THE SECTION, THE QUESTION IS ANSWERED IN THE AFFIRMATIVE AND THE FACT THAT APPROPRIATIONS USED IN CONTRAVENTION OF SECTION 703 SUBSEQUENTLY MAY BE REIMBURSED IS NOT CONTROLLING, THAT IS TO SAY, IN REIMBURSABLE TRANSACTIONS IT IS THE PRESENCE OR ABSENCE OF THE RESTRICTION UPON THE APPROPRIATION IMMEDIATELY USED TO PAY THE COMPENSATION ATTACHED TO A POSITION THAT PRIMARILY DETERMINES ITS AVAILABILITY.

" QUESTION 2: IF THE ANSWER TO QUESTION 1 IS IN THE NEGATIVE, IS IT CORRECT THAT IN THE CASE OF REIMBURSEMENT THE LIMITATIONS ON EXPENDITURES WILL DEPEND UPON THE APPROPRIATION FROM WHICH THE ULTIMATE PAYMENT IS MADE?

SINCE QUESTION 1 IS ANSWERED IN THE AFFIRMATIVE, AN ANSWER TO QUESTION 2 IS RENDERED UNNECESSARY. LIKEWISE, NO ANSWERS ARE REQUIRED TO QUESTIONS 3 AND 4 POSED IN YOUR LETTER, SINCE THEY ARE PREDICATED UPON AN AFFIRMATIVE ANSWER TO QUESTION 2.

YOUR LETTER FURTHER STATES:

AS WILL APPEAR FROM THE QUOTED SECTION, CERTAIN PARTS OF THIS AGENCY ARE NOT SUBJECT TO THE LIMITATIONS CONTAINED THEREIN. MANY OF OUR SERVICES ARE PERFORMED CENTRALLY WITH FUNDS WHICH ARE PAID FROM THE APPROPRIATE APPROPRIATIONS OF THE VARIOUS CONSTITUENT ORGANIZATIONS. FOR EXAMPLE, APPROXIMATELY 50 PERCENT OF THE NECESSARY OPERATING EXPENSES OF THE DIVISION OF SERVICE OPERATIONS IN THE OFFICE OF THE ADMINISTRATOR ARE DERIVED FROM FUNDS OTHER THAN THOSE APPROPRIATED DIRECTLY TO THAT DIVISION.

QUESTION 5: ARE WE CORRECT IN ASSUMING THAT FUNDS ADVANCED OR REIMBURSED FROM APPROPRIATIONS FALLING WITHIN THE PURVIEW OF SUBSECTIONS (D), (E), (F), AND (G) MAY BE EXPENDED WITHOUT REGARD TO THE LIMITATIONS OF SECTION 703?

SUBJECT TO THE QUALIFICATIONS CONSIDERED IN ANSWER TO QUESTION 1 WITH RESPECT TO REIMBURSABLE TRANSACTIONS THE QUESTION IS ANSWERED IN THE AFFIRMATIVE.

QUESTION 6: IF THE ANSWER TO QUESTION 5 IS IN THE AFFIRMATIVE, MAY WE ESTABLISH A COMPOSITE CEILING FOR OPERATIONS OF THIS NATURE FOLLOWING THE PRINCIPLE DISCUSSED IN YOUR DECISION OF OCTOBER 23, 1951, B-105736?

THE QUESTION IS ANSWERED IN THE AFFIRMATIVE.

THE BUDGET ESTIMATES FOR OPERATIONS OF THE ABOVE TYPE WERE PREPARED IN ANTICIPATION OF ADVANCES OR REIMBURSEMENTS AND HENCE PROVIDE FOR A GREATER NUMBER OF PERSONNEL THAN COULD BE COMPENSATED FROM THE FUNDS DIRECTLY APPROPRIATED TO SUCH UNITS.

QUESTION 7: IF THE ANSWER TO QUESTION 6 IS IN THE AFFIRMATIVE, IN COMPUTING THE 90 PERCENT REQUIRED BY THE SECOND PROVISO OF THE SECTION IN THE PROCESS OF ESTABLISHING A COMPOSITE CEILING, MAY WE CONSIDER FOR THIS PURPOSE THAT THE "TOTAL (NUMBER OF PERSONNEL) PROVIDED FOR IN THE BUDGET ESTIMATES" INCLUDES ONLY THOSE WHICH COULD BE COMPENSATED FROM THAT PORTION OF THE DIRECT APPROPRIATION WHICH IS SUBJECT TO SECTION 703?

THE QUESTION IS ANSWERED IN THE NEGATIVE. THE "COMPOSITE CEILING" SHOULD INCLUDE IN ADDITION TO THAT PROVIDED BY DIRECT APPROPRIATIONS PERSONNEL TO BE COMPENSATED FROM ANTICIPATED OR UNANTICIPATED ADVANCES OR REIMBURSEMENTS, FROM APPROPRIATIONS SUBJECT TO THE RESTRICTIONS OF THE JENSEN AMENDMENT. SEE IN THIS REGARD THE LAST PARAGRAPH ON PAGE 3 IN OFFICE DECISION OF OCTOBER 23, 1951, REFERRED TO IN YOUR QUESTION 6; ALSO ANSWER TO QUESTION (E) IN DECISION OF SEPTEMBER 26, 1951, B 105402, TO THE DIRECTOR, BUREAU OF THE BUDGET.