B-119510, JULY 13, 1954, 34 COMP. GEN. 17

B-119510: Jul 13, 1954

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IS PERMITTED TO REFUND THE PAYMENT IN INSTALLMENTS MAY BE REFUSED THE USE OF SUCH LEAVE UNTIL FULL REFUND HAS BEEN MADE. GEN. 592 WHICH PERMITS PARTIAL REFUNDS OF A LUMP-SUM LEAVE PAYMENT COVERING ONLY THE AMOUNT OF LEAVE THAT CAN BE RECREDITED TO AN EMPLOYEE WHO IS REEMPLOYED PRIOR TO THE EXPIRATION OF THE PERIOD COVERED BY SUCH PAYMENT IS LIMITED TO CASES IN WHICH THE RESTRICTION ON THE AMOUNT OF LEAVE RECREDITABLE WAS DUE TO THE ENACTMENT OF A STATUTE BETWEEN THE TIME OF SEPARATION AND THE DATE OF REEMPLOYMENT. THEREFORE AN EMPLOYEE WHO WAS REEMPLOYED AFTER ENACTMENT OF THE STATUTE. IS NOT ENTITLED TO A PARTIAL CREDIT OF FORFEITED LEAVE ON THE BASIS OF THE ABOVE RULE. 1954: REFERENCE IS MADE TO LETTER DATED MARCH 30.

B-119510, JULY 13, 1954, 34 COMP. GEN. 17

LEAVES OF ABSENCE - LUMP-SUM PAYMENTS - REFUND UPON REEMPLOYMENT - INSTALLMENT PAYMENTS - EXCESS LEAVE FORFEITURE AN EMPLOYEE WHO, UPON REEMPLOYMENT PRIOR TO THE EXPIRATION OF THE PERIOD COVERED BY A LUMP-SUM LEAVE PAYMENT, IS PERMITTED TO REFUND THE PAYMENT IN INSTALLMENTS MAY BE REFUSED THE USE OF SUCH LEAVE UNTIL FULL REFUND HAS BEEN MADE. THE RULE IN 25 COMP. GEN. 592 WHICH PERMITS PARTIAL REFUNDS OF A LUMP-SUM LEAVE PAYMENT COVERING ONLY THE AMOUNT OF LEAVE THAT CAN BE RECREDITED TO AN EMPLOYEE WHO IS REEMPLOYED PRIOR TO THE EXPIRATION OF THE PERIOD COVERED BY SUCH PAYMENT IS LIMITED TO CASES IN WHICH THE RESTRICTION ON THE AMOUNT OF LEAVE RECREDITABLE WAS DUE TO THE ENACTMENT OF A STATUTE BETWEEN THE TIME OF SEPARATION AND THE DATE OF REEMPLOYMENT, AND THEREFORE AN EMPLOYEE WHO WAS REEMPLOYED AFTER ENACTMENT OF THE STATUTE, AND WHO FORFEITED LEAVE AS A RESULT OF REFUND OF THE LUMP-SUM LEAVE PAYMENT IN INSTALLMENTS, IS NOT ENTITLED TO A PARTIAL CREDIT OF FORFEITED LEAVE ON THE BASIS OF THE ABOVE RULE.

ACTING COMPTROLLER GENERAL WEITZEL TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, JULY 13, 1954:

REFERENCE IS MADE TO LETTER DATED MARCH 30, 1954, FROM THE DEPUTY ADMINISTRATOR, REQUESTING A DECISION ON SEVERAL QUESTIONS PERTAINING TO THE PROPER ACTION TO BE TAKEN WITH RESPECT TO AN EMPLOYEE'S ANNUAL LEAVE ACCOUNT UPON REEMPLOYMENT PRIOR TO THE EXPIRATION OF THE PERIOD COVERED BY A LUMP-SUM LEAVE PAYMENT RECEIVED UPON SEPARATION FROM EMPLOYMENT IN ANOTHER AGENCY, WHEN THE REQUIRED REFUND IS MADE BY INSTALLMENT PAYMENTS.

AS ILLUSTRATIVE OF THE SITUATION INVOLVED THERE IS PRESENTED THE CASE OF AN EMPLOYEE WHO WAS SEPARATED FROM A GOVERNMENT DEPARTMENT ON JANUARY 31, 1950, RECEIVING A LUMP-SUM PAYMENT FOR ANNUAL LEAVE COVERING 570 HOURS, EXTENDING THROUGH TWO HOURS ON MAY 12, 1950. ON MARCH 6, 1950, HE WAS REEMPLOYED IN ANOTHER INSTALLATION OF THE SAME DEPARTMENT WITHOUT MAKING REFUND FOR THE UNEXPIRED PORTION OF THE PERIOD COVERED BY THE LUMP-SUM PAYMENT. EFFECTIVE MAY 29, 1950, THE EMPLOYEE TRANSFERRED TO YOUR ADMINISTRATION, AND SEVERAL MONTHS LATER NOTIFICATION WAS RECEIVED FROM THE AGENCY IN WHICH HE FORMERLY WAS EMPLOYED THAT HE HAD FAILED TO MAKE THE REQUIRED REFUND TO SECURE PAYMENT OF THE REFUND AND COLLECTION ACTION WAS ACCOMPLISHED BY INSTALLMENT PAYMENTS EXTENDING THROUGH JUNE 1953. LATER, ON OR ABOUT AUGUST 15, 1953, INFORMATION WAS RECEIVED FROM THE FORMER EMPLOYING AGENCY TRANSFERRING A TOTAL OF 414 HOURS' ANNUAL LEAVE, REPRESENTING 394 HOURS UNUSED AT THE DATE OF REEMPLOYMENT ON MARCH 6, 1950, PLUS 20 HOURS ACCRUED DURING SUCH REEMPLOYMENT. AT THAT TIME, HE HAD TO CREDIT 244 HOURS' ANNUAL LEAVE ACCUMULATED AND ACCRUED DURING HIS EMPLOYMENT WITH YOUR ADMINISTRATION. THE EMPLOYEE'S LEAVE ACCOUNT WAS RECONSTRUCTED FOR THE YEARS 1950, 1951, AND 1952, ON THE SAME BASIS AS IF THE 414 HOURS OF ANNUAL LEAVE HAD BEEN TRANSFERRED ON THE DATE OF HIS EMPLOYMENT WITH YOUR ADMINISTRATION. THAT COMPUTATION RESULTED IN ANNUAL LEAVE FORFEITURES FOR THE LAST TWO YEARS AMOUNTING TO 156 HOURS.

IN QUESTION 1 YOU ASK WHETHER, IN A SITUATION SUCH AS OUTLINED ABOVE -- AND ASSUMING INSTALLMENT REPAYMENTS ARE NOT OBJECTIONABLE--- THE ANNUAL LEAVE REPRESENTED BY THE REFUND SHOULD BE RECREDITED TO THE EMPLOYEE'S ACCOUNT AND MADE AVAILABLE FOR USE BY HIM (A) AS OF THE DATE OF REEMPLOYMENT, OR (B) AS OF THE DATE ON WHICH REFUND IS FINALLY LIQUIDATED, OR (C) IN REPRESENTATIVE AMOUNTS AS INSTALLMENT PAYMENTS ARE MADE.

IT HAS BEEN UNIFORMLY HELD THAT THE ACT OF DECEMBER 21, 1944, 58 STAT. 845, CONTEMPLATES AN IMMEDIATE REFUND OF THAT PART OF THE LUMP SUM PAYMENT WHICH IS TO BE REFUNDED AND SUCH REQUIREMENT ORDINARILY SHOULD BE A CONDITION PRECEDENT TO REEMPLOYMENT. 24 COMP. GEN. 522, 523; 26 ID. 259, 262; B-48167, MARCH 16, 1945. ALSO, WHILE IT HAS BEEN HELD THAT THE MANNER IN WHICH THE REFUND IS EFFECTED IS FOR ADMINISTRATIVE DETERMINATION, 27 COMP. GEN. 301, IT WAS STATED IN SAID DECISION THAT "THE ADMINISTRATIVE OFFICE, WITHIN ITS DISCRETION, MAY REFUSE TO GRANT LEAVE REPRESENTED BY THE REQUIRED REFUND UNTIL THE REFUND ACTUALLY HAS BEEN MADE.' FROM THE FOREGOING IT WOULD APPEAR THAT, IN INSTANCES IN WHICH INSTALLMENT PAYMENTS ARE PERMITTED, NO PROPER BASIS EXISTS FOR RECREDITING --- FOR PURPOSES OF USE IMMEDIATELY BY THE EMPLOYEE--- THE LEAVE REPRESENTED BY THE REQUIRED REFUND. WHILE A REPRESENTATIVE AMOUNT OF SUCH LEAVE WOULD APPEAR PROPER FOR RECREDIT, FOR USE, UPON RECEIPT OF EACH INSTALLMENT PAYMENT, THE INCREASE IN ADMINISTRATIVE WORK AND EXPENSE RESULTING FROM SUCH PRACTICE WOULD APPEAR TO BE UNWARRANTED. RATHER, IT WOULD APPEAR THAT THE PRACTICAL MANNER OF RECREDITING LEAVE IN SUCH CIRCUMSTANCES, AND THE ONE MORE NEARLY IN ACCORD WITH THE PROVISIONS OF THE LUMP-SUM LEAVE PAYMENT ACT OF DECEMBER 21, 1944, AS AMENDED, IS TO REFUSE THE USE OF SUCH LEAVE UNTIL FULL REFUND THEREFOR HAS BEEN MADE. COMP. GEN. 301. QUESTIONS 1 (A), (B) AND (C) ARE ANSWERED ACCORDINGLY.

IN QUESTION 2 YOU ASK WHETHER THE RULE IN 25 COMP. GEN. 592, PERMITTING PARTIAL REFUNDS COVERING ONLY SUCH AMOUNTS OF LEAVE AS CAN BE CREDITED, MAY BE APPLIED IN CASES INVOLVING INSTALLMENT PAYMENTS OF THE REFUND. THE RULE STATED IN THAT DECISION IS LIMITED TO SITUATIONS IN WHICH THE RESTRICTION ON THE AMOUNT OF LEAVE RECREDITABLE WAS DUE TO THE ENACTMENT OF A STATUTE INTERVENING BETWEEN THE TIME OF SEPARATION AND THE DATE OF REEMPLOYMENT. IT HAS NO APPLICATION TO SITUATIONS IN WHICH STATUTORY RESTRICTIONS ARE ENACTED AFTER REEMPLOYMENT BUT PRIOR TO COMPLETION OF THE REQUIRED REFUND. ACCORDINGLY, QUESTION 2 IS ANSWERED IN THE NEGATIVE, MAKING UNNECESSARY AN ANSWER TO QUESTION 3.

FROM THE INFORMATION FURNISHED IT APPEARS THAT, IN THE EXAMPLE GIVEN, THE LEAVE ACCOUNT WAS RECONSTRUCTED PROMPTLY UPON RECEIPT OF FULL REFUND. WHILE THE APPLICATION OF THE PERTINENT LAWS RESULTED IN FORFEITURES OF 82 HOURS FOR THE YEAR 1951 AND 74 HOURS IN 1952, THE ADMINISTRATIVE ACTION TAKEN WAS PROPER UNDER THE CIRCUMSTANCES--- THE RESULTING LEAVE FORFEITURES HAVING BEEN BROUGHT ABOUT LARGELY BECAUSE OF THE EMPLOYEE'S FAILURE TO MAKE IMMEDIATE REFUND AND THE EXTENSIVE PERIOD OF TIME CONSUMED IN COMPLETING THE REFUND.