B-113784, MAY 8, 1953, 32 COMP. GEN. 499

B-113784, MAY 8, 1953, 32 COMP. GEN. 499

COMPENSATION - WITHHOLDING - EMPLOYEE DEBTORS UNDER THE COMPENSATION WITHHOLDING PROVISIONS OF THE ACT OF AUGUST 3, 1950, COMPENSATION OVERPAYMENTS DUE TO ERRORS IN THE PROCESSING OF SALARIES MAY NOT BE RECOVERED BY DEDUCTIONS FROM THE EMPLOYEE DEBTORS' CURRENT PAY WITHOUT THEIR CONSENT UNTIL A CHARGE HAS BEEN RAISED OR CREDIT DISALLOWED IN THE ACCOUNT OF THE ACCOUNTABLE OFFICER BY THE GENERAL ACCOUNTING OFFICE, HOWEVER ADMINISTRATIVE EFFORTS SHOULD BE MADE TO SECURE REFUNDS OF THE COMPENSATION OVERPAYMENTS FROM SUCH EMPLOYEES OR TO SECURE THEIR AGREEMENT TO HAVE THE AMOUNT OF THE OVERPAYMENTS DEDUCTED FROM THEIR CURRENT PAY.

COMPTROLLER GENERAL WARREN TO THE ADMINISTRATOR OF VETERANS AFFAIRS, MAY 8, 1953:

REFERENCE IS MADE TO LETTER DATED FEBRUARY 11, 1953, FROM THE DEPUTY ADMINISTRATOR, RELATIVE TO 32 COMP. GEN. 101 IN WHICH IT WAS HELD THAT THE ACT OF AUGUST 3, 1950, PUBLIC LAW 633, 64 STAT. 393--- AUTHORIZING THE WITHHOLDING OF CURRENT COMPENSATION FROM GOVERNMENT PERSONNEL FOR PURPOSES OF EFFECTING REIMBURSEMENT OF INDEBTEDNESS TO THE UNITED STATES--- APPLIES ONLY WHERE CREDIT HAS BEEN DISALLOWED OR A CHARGE RAISED IN THE ACCOUNT OF THE DISBURSING OR CERTIFYING OFFICER INVOLVED FOR THE AMOUNT OVERPAID AND DOES NOT PERMIT SUCH WITHHOLDING, WITHOUT CONSENT OF THE EMPLOYEE, UPON AUDITORS OF THE GENERAL ACCOUNTING OFFICE MAKING INFORMAL INQUIRY RELATIVE THERETO, EVEN THOUGH THE INDEBTEDNESS IS CONCEDED BY THE ADMINISTRATIVE OFFICE.

THE LETTER REQUESTS DECISION WHETHER WITHHOLDING UNDER THAT STATUTE MUST BE DELAYED, IF THE EMPLOYEE DOES NOT CONSENT THERETO, PENDING RECEIPT OF A FORMAL EXCEPTION FROM THE GENERAL ACCOUNTING OFFICE IN CIRCUMSTANCES ENUMERATED THEREIN AS FOLLOWS:

A. A TYPOGRAPHICAL ERROR IS MADE IN TYPING THE PAY ROLL OR RELATED RECORDS SO THAT THE SALARY CHECK IS DRAWN FOR A LARGER NET AMOUNT THAN DUE, WHICH CHECK THE EMPLOYEE NEGOTIATES. EXAMPLE: THE NET AMOUNT DUE IS STATED AS $300 INSTEAD OF $200 OR $250 INSTEAD OF $230.

B. AN ERROR IS MADE IN READING THE SALARY TABLE WHILE PROCESSING THE PAY ROLL AND RELATED RECORDS AND USING A HIGHER SALARY RATE THAN AUTHORIZED BY THE NOTIFICATION OF PERSONNEL ACTION, SF 50. EXAMPLE: USING THE SALARY RATE LISTED BELOW THE AUTHORIZED RATE AS $5060 INSTEAD OF $5025.

C. AN ERROR IN POSTING THE SALARY RATE AND VALUE OF ALLOWANCES FURNISHED IN KIND FROM THE REPORTING DOCUMENTS TO THE PAY ROLL AND RELATED RECORDS. EXAMPLES: POSTING THE SALARY RATE AS $5060, NO ALLOWANCE IN KIND, WHEN IN FACT SUBSISTENCE IS PARTAKEN AT THE RATE OF $653.64 PER ANNUM; AN ERROR IN THE DOCUMENT REPORTING THE VALUE OF ALLOWANCES AS SHOWING THE ALLOWANCE AS PARTIAL SUBSISTENCE (2 MEALS PER DAY, 5 DAYS PER WEEK) AT A COST OF $328.12 PER ANNUM WHEN IN FACT FULL SUBSISTENCE AT THE RATE OF $653.64 PER ANNUM IS PARTAKEN AND DEDUCTION FROM THE SALARY SHOULD HAVE BEEN MADE ON THAT BASIS.

D. ERRORS IN THE PREPARATION OF THE TIME AND ATTENDANCE REPORT, SF 1130, INDICATING AN EMPLOYEE TO BE ENTITLED TO PAY FOR A HOLIDAY WHICH SF 1130 IS SUPPLEMENTED BY AN AMENDED SF 1130 INDICATING THAT THE EMPLOYEE IS NOT ENTITLED TO PAY FOR THE HOLIDAY. EXAMPLE: HOLIDAYS OCCURRING WITHIN A PERIOD OF LEAVE WITHOUT PAY OR IN COMBINATION WITH LEAVE WITHOUT PAY OR IN COMBINATION WITH UNAUTHORIZED ABSENCES.

THE VIEW IS EXPRESSED IN THE SAID LETTER THAT THE DEBTS UNDER THE CIRCUMSTANCES OUTLINED, ARISING FROM OVERPAYMENTS IN SALARY PROCESSING OPERATIONS, MAY BE DISTINGUISHABLE FROM OTHER TYPES OF GENERAL DEBTS DUE THE UNITED STATES.

THE RIGHT OF SET OFF HAS BEEN HELD TO BE INHERENT IN THE UNITED STATES AND TO BE GROUNDED IN THE COMMON-LAW RIGHT OF EVERY CREDITOR TO APPLY THE MONEYS OF HIS DEBTOR IN HIS HANDS TO THE EXTINGUISHMENT OF AMOUNTS DUE HIM FROM THE DEBTOR. GRATIOT V. UNITED STATES, 40 U.S. 336; MCKNIGHT V. UNITED STATES, 98 U.S. 178; BARRY V. UNITED STATES, 229 U.S. 47. HOWEVER, IT NOW APPEARS EQUALLY WELL ESTABLISHED THAT, IN THE ABSENCE OF EXPRESS STATUTORY AUTHORITY, THE CURRENT SALARY OF AN EMPLOYEE STILL IN THE SERVICE MAY NOT BE WITHHELD WITHOUT HIS CONSENT TO LIQUIDATE HIS INDEBTEDNESS TO THE UNITED STATES. SEE SMITH V. JACKSON, 246 U.S. 388; MCCARL V. COX, 8 F.2D 669; MCCARL V. PENCE, 18 F.2D 809; BAKER V. MCCARL, 24 F.2D 897, 39 OP. ATTY. GEN. 7. IN THIS CONNECTION, THE FOLLOWING EXTRACT FROM THE OPINION OF THE COURT IN THE THE CASE OF MCCARL V. COX, 8 F.2D 669, 671, SEEMS PARTICULARLY APPOSITE:

* * * IT WOULD REQUIRE VERY SPECIFIC PROVISION TO CONVINCE US THAT CONGRESS INTENDED TO CLOTHE AN ACCOUNTING OFFICER WITH POWER TO WITHHOLD IN WHOLE OR IN PART THE SALARY OF AN OFFICER OF THE NAVY, APPROPRIATED FOR BY IT, AS A SET-OFF AGAINST A SUM FOUND BY THAT ACCOUNTING OFFICER TO BE DUE THE GOVERNMENT BECAUSE OF ALLEGED OVERPAYMENTS IN ALLOWANCES REGULARLY MADE TO AND RECEIVED BY THAT OFFICER IN GOOD FAITH. THE EXERCISE OF SUCH ARBITRARY POWER WELL MIGHT AFFECT AND SERIOUSLY IMPAIR THE EFFICIENCY OF THIS BRANCH OF THE NATIONAL DEFENSE. * * * NAVAL OFFICERS ARE REQUIRED TO GO TO THE FAR ENDS OF THE EARTH, AND MANY DEPEND UPON THE SALARY ATTACHED TO THEIR OFFICE FOR SUPPORT OF FAMILIES LEFT BEHIND.

ALSO, SUCH COURT DECISIONS--- AT LEAST ONE OF WHICH INVOLVED INDEBTEDNESS ARISING OUT OF OVERPAYMENT OF SALARY--- APPEAR TO BE SUCH AS TO PRECLUDE DISTINGUISHING INDEBTEDNESS ARISING OUT OF SALARY PROCESSING OPERATIONS FROM OTHER TYPES OF DEBTS DUE THE UNITED STATES. FURTHER, THE EXPRESS STATUTORY AUTHORITY CONTAINED IN THE ACT OF AUGUST 3, 1950, TO WITHHOLD CURRENT SALARY OF EMPLOYEES IN THE CIRCUMSTANCES THEREIN DEFINED, WHEN VIEWED IN THE LIGHT OF THE COURT DECISIONS PRECLUDING SUCH WITHHOLDING, APPEAR TO CONSTITUTE AN EXPRESSION OF CONGRESSIONAL INTENT TO GRANT THE UNITED STATES THE RIGHT TO SET OFF CURRENT SALARY OF EMPLOYEES STILL IN THE SERVICE ONLY UNDER CIRCUMSTANCES COVERED BY THE STATUTE.

AS TO WHEN SUCH STATUE AUTHORIZES CURRENT SALARY TO BE WITHHELD, LETTER OF THE GENERAL COUNSEL, GENERAL ACCOUNTING OFFICE DATED APRIL 14, 1950, INCLUDED IN THE SENATE CONGRESSIONAL RECORD FOR JUNE 8, 1950, 96 CONG. REC. 8282, AS BEARING ON THE MEANING OF THE TERMS OF THE ACT, IS AS FOLLOWS:

THE SAID BILL WOULD AMEND THE ACT OF MAY 26, 1936 (49 STAT. 1374), SO THAT WHENEVER UPON THE STATEMENT OF THE ACCOUNT OF ANY DISBURSING OR CERTIFYING OFFICER OF THE UNITED STATES IN THE GENERAL ACCOUNTING OFFICE CREDIT SHALL HAVE BEEN DISALLOWED OR A CHARGE RAISED FOR ANY PAYMENT TO ANY PERSON IN THE EXECUTIVE BRANCH OF THE GOVERNMENT, OTHERWISE ENTITLED TO COMPENSATION FROM THE UNITED STATES, SUCH COMPENSATION OF THE PAYEE SHALL BE WITHHELD, IN PART OR IN WHOLE, UNTIL FULL REIMBURSEMENT HAS BEEN ACCOMPLISHED UNDER SUCH REGULATIONS AS MAY BE PRESCRIBED BY THE HEAD OF THE AGENCY UNDER WHICH SUCH PAYEE IS ENTITLED TO RECEIVE COMPENSATION.

THE TERMS "SETTLEMENT OF ACCOUNT" AND "DISALLOWANCE," AS USED IN THE ACT OF MAY 26, 1936, AND AS APPLIED TO DISBURSING OFFICERS, HAVE WELL-DEFINED AND LONG-ESTABLISHED MEANINGS. THE ,SETTLEMENT OF ACCOUNT" REPRESENTS A SETTLEMENT OF AN OFFICER'S MONEY ACCOUNT FOR A SPECIFIC PERIOD, SHOWING A LIST OF ITEMS FOR WHICH CREDIT HAS NOT BEEN ALLOWED IN THE ACCOUNT, AND THE TERM "DISALLOWANCE" CONSTITUTING A FORMALIZATION OF EXCEPTIONS TAKEN TO QUESTIONABLE PAYMENTS IN SAID ACCOUNTS WHICH HAVE NOT BEEN REMOVED OR CLEARED BY PROPER EXPLANATION OR REFUND. HOWEVER, UNLIKE DISBURSING OFFICERS, A CERTIFYING OFFICER HAS NO PUBLIC FUNDS IN HIS POSSESSION AND HENCE RENDERS NO "MONEY ACCOUNT" AGAINST WHICH "DISALLOWANCES" MIGHT BE ISSUED. FOR THIS REASON, THE PHRASE CONTAINED IN THE PRESENT BILL "OR A CHARGE RAISED" WAS DEEMED REQUIRED TO PROVIDE A BASIS FOR APPLYING THE PROVISIONS OF THE BILL TO CERTIFYING OFFICERS AND WAS INTENDED FOR APPLICATION ONLY IN CONNECTION WITH CERTIFYING OFFICERS AS DISTINGUISHED FROM DISBURSING OFFICERS; ALSO, IT MAY BE STATED THAT SUCH PHRASE, AS USED IN THE BILL, CONTEMPLATES A STATEMENT OF EXCEPTIONS OUTSTANDING AGAINST A CERTIFYING OFFICER AND NOT CLEARED BY SATISFACTORY REPLY OR PAYMENT OF THE SAME DEGREE OF FORMALITY AND FINALITY REPRESENTED BY THE "STATEMENT OF ACCOUNT" OR "DISALLOWANCE" AS THOSE TERMS RELATE TO DISBURSING OFFICERS.

IT IS, THEREFORE, TO BE UNDERSTOOD THAT THE PROPOSED ENACTMENT CONTEMPLATES WITHHOLDING OF COMPENSATION ONLY WHERE THE CERTIFYING OR DISBURSING OFFICER INVOLVED, AFTER REASONABLE OPPORTUNITY TO EXPLAIN OR CLEAR AN EXCEPTION CHALLENGING THE PROPRIETY OF PAYMENT, HAS NOT BEEN ABLE TO DO SO, OR HAS NOT DONE SO, AND CREDIT HAS BEEN DISALLOWED OR A CHARGE RAISED FOR THE AMOUNT BY THE ISSUANCE BY THE GENERAL ACCOUNTING OFFICE OF A CERTIFICATE OF SETTLEMENT OF THE RESPONSIBILITIES OF THE ACCOUNTABLE OFFICER * * *.

ACCORDINGLY, AND IN ANSWER TO THE QUESTIONS RAISED, THE STATUTE DOES NOT AUTHORIZE WITHHOLDING CURRENT COMPENSATION OF AN EMPLOYEE OVER HIS OBJECTION IN ANY OF THE SITUATIONS OUTLINED IN THE LETTER OF THE DEPUTY ADMINISTRATOR. NOR IS SUCH WITHHOLDING AUTHORIZED WITHOUT THE EMPLOYEE'S CONSENT UNTIL A CHARGE HAS BEEN RAISED OR CREDIT DISALLOWED IN THE ACCOUNT OF THE ACCOUNTABLE OFFICER CONCERNED BY THE ISSUANCE OF A CERTIFICATE OF SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE OF THE ACCOUNTABLE OFFICER'S RESPONSIBILITIES.

HOWEVER, TO PROTECT THE INTERESTS OF THE GOVERNMENT TO THE FULL EXTENT POSSIBLE UNDER THE STATUTE, WHERE OVERPAYMENTS HAVE BEEN MADE, PROPER ADMINISTRATIVE EFFORTS SHOULD BE MADE TO EXPLAIN TO THE EMPLOYEE THE ERROR AND TO SECURE A REFUND FROM HIM OF THE AMOUNT INVOLVED OR HIS ACQUIESCENCE TO OFFSETTING THE OVERPAYMENTS FROM HIS CURRENT PAY OVER A REASONABLE PERIOD CONSIDERING THE AMOUNT INVOLVED. ALSO, APPROPRIATE NOTATIONS SHOULD BE MADE IN THE RECORDS SO THAT CONSIDERATION MAY BE GIVEN TO RECOVERY OF THE AMOUNTS FROM FINAL SALARY WHICH MAY BECOME DUE THE EMPLOYEE. WHERE THE CONSENT OF THE EMPLOYEE CANNOT BE SECURED BY ADMINISTRATIVE EFFORTS, THIS OFFICE, UPON REQUEST OF THE ADMINISTRATIVE OFFICE WILL FORMALIZE THE EXCEPTION AND PROMPTLY ISSUE A CERTIFICATE OF SETTLEMENT SO THAT SALARY THEREAFTER BECOMING PAYABLE MAY, IN ACCORDANCE WITH PUBLIC LAW 633, BE WITHHELD.