B-125759, JAN. 4, 1956

B-125759: Jan 4, 1956

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TO THE SECRETARY OF DEFENSE: REFERENCE IS MADE TO LETTER OF OCTOBER 10. WHEN A MILITARY RECORD IS CORRECTED UNDER THE PROVISIONS OF SECTION 207 OF THE LEGISLATIVE REORGANIZATION ACT OF 1946. IT IS FOUND THAT AN INDEBTEDNESS TO THE GOVERNMENT EXISTS AGAINST AN INDIVIDUAL. IF IT IS DETERMINED THAT THE APPROPRIATION MUST BE CHARGED WITH THE GROSS AMOUNT. IN THE DISCUSSION BY THE PAY AND ALLOWANCE COMMITTEE IT IS STATED THAT IN CONNECTION WITH CORRECTION OF RECORDS. INSTANCES ARE DISCOVERED OF INDEBTEDNESSES INCURRED WHILE ON ACTIVE DUTY. IT IS STATED THAT THERE ARE INSTANCES OF THE RECEIPT OF MUSTERING- OUT PAY WITH SUBSEQUENT RETROACTIVE AWARD OF RETIREMENT PAY FROM DATE OF RELEASE FROM ACTIVE DUTY.

B-125759, JAN. 4, 1956

TO THE SECRETARY OF DEFENSE:

REFERENCE IS MADE TO LETTER OF OCTOBER 10, 1955, FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) REQUESTING DECISION ON TWO QUESTIONS, PRESENTED IN AN ENCLOSED COPY OF COMMITTEE ACTION NO. 127, MILITARY PAY AND ALLOWANCE COMMITTEE, AS FOLLOWS:

"1. WHEN A MILITARY RECORD IS CORRECTED UNDER THE PROVISIONS OF SECTION 207 OF THE LEGISLATIVE REORGANIZATION ACT OF 1946, 60 STAT. 812, AS AMENDED BY THE ACT OF 25 OCTOBER 1951, 65 STAT. 655, IN A MANNER WHICH ESTABLISHES ENTITLEMENT TO MILITARY PAY HERETOFORE UNAUTHORIZED, AND IT IS FOUND THAT AN INDEBTEDNESS TO THE GOVERNMENT EXISTS AGAINST AN INDIVIDUAL, MAY ONLY THE NET AMOUNT DUE THE CLAIMANT BE CHARGED TO THE APPROPRIATION AVAILABLE FOR PAYMENT OF THE CLAIM, OR MUST THE GROSS AMOUNT FOUND TO BE DUE AS THE RESULT OF THE CORRECTION BE CHARGED TO THE APPROPRIATION CONCERNED?

"2. IF IT IS DETERMINED THAT THE APPROPRIATION MUST BE CHARGED WITH THE GROSS AMOUNT, MAY RECEIPT OF A PENSION OR COMPENSATION FROM THE VETERANS ADMINISTRATION BY A MEMBER OF A REGULAR COMPONENT ON OR AFTER 27 MAY 1944, OR BY A MEMBER OF A RESERVE COMPONENT OF THE UNIFORMED SERVICES RETIRED FOR PHYSICAL DISABILITY ON OR AFTER 1 OCTOBER 1949, BE TREATED AS AN IMPLIED WAIVER?

IN THE DISCUSSION BY THE PAY AND ALLOWANCE COMMITTEE IT IS STATED THAT IN CONNECTION WITH CORRECTION OF RECORDS, INSTANCES ARE DISCOVERED OF INDEBTEDNESSES INCURRED WHILE ON ACTIVE DUTY, BUT NOT LIQUIDATED THEN OR SUBSEQUENTLY, SUCH AS LIABILITY FOR GOVERNMENT PROPERTY LOST OR DAMAGED. ALSO, IT IS STATED THAT THERE ARE INSTANCES OF THE RECEIPT OF MUSTERING- OUT PAY WITH SUBSEQUENT RETROACTIVE AWARD OF RETIREMENT PAY FROM DATE OF RELEASE FROM ACTIVE DUTY. MUSTERING OUT PAY WOULD NOT HAVE BEEN PAYABLE HAD THE INDIVIDUAL BEEN RETIRED AT THE TIME OF HIS RELEASE FROM ACTIVE DUTY. REFERENCE ALSO IS MADE TO INSTANCES WHERE A RECORD IS CORRECTED TO SHOW A RETROACTIVE RIGHT TO RETIREMENT PAY AND THE INDIVIDUAL HAS RECEIVED A PENSION OR COMPENSATION FROM THE VETERANS ADMINISTRATION DURING THE RETROACTIVE PERIOD. PENSION OR COMPENSATION FROM THE VETERANS ADMINISTRATION IS NOT PAYABLE CONCURRENTLY WITH RETIREMENT PAY. THUS, IN EACH OF THE EXAMPLES GIVEN, THE INDIVIDUAL CONCERNED IS ENTITLED TO RECEIVE ONLY THE AMOUNT ACCRUING TO HIM BY REASON OF THE CORRECTION OF HIS RECORDS, LESS THE AMOUNT OR AMOUNTS OF THE PRIOR INDEBTEDNESS OR THE PRIOR PAYMENT OR PAYMENTS OF MUSTERING-OUT PAY, PENSION, OR COMPENSATION AS THE CASE MAY BE.

THE PURPOSE OF THE ACT OF OCTOBER 25, 1951, 65 STAT. 655, IS TO CONFER MONETARY BENEFITS BASED UPON CORRECTED RECORDS, PAYMENT OF SUCH BENEFITS BEING MADE "OUT OF APPLICABLE CURRENT APPROPRIATIONS.' HENCE, THE AMOUNT OF A PAYMENT ACCRUING TO AN INDIVIDUAL BY REASON OF A CORRECTION OF HIS RECORDS IS PROPERLY CHARGEABLE TO SUCH APPROPRIATIONS.

WHEN AN INDIVIDUAL WHO IS INDEBTED TO THE UNITED STATES FOR GOVERNMENT PROPERTY LOST OR DAMAGED BECOMES ENTITLED TO A MONETARY PAYMENT ON ACCOUNT OF THE CORRECTION OF HIS RECORDS, THE APPROPRIATION AVAILABLE FOR PAYMENTS UNDER SECTION 207, AS AMENDED, SHOULD BE CHARGED WITH THE TOTAL AMOUNT ACCRUING BECAUSE OF THE CORRECTION, THE PROPER APPROPRIATION SHOULD BE CREDITED WITH THE AMOUNT OF INDEBTEDNESS, AND THE INDIVIDUAL SHOULD BE PAID THE DIFFERENCE.

A DIFFERENT SITUATION IS PRESENTED WHEN, BY REASON OF A CORRECTION OF HIS RECORDS, AN INDIVIDUAL BECOMES ENTITLED TO A DIFFERENT AND GREATER MONETARY BENEFIT THAN ONE ALREADY, LEGALLY AND PROPERLY, PAID TO HIM. COMPARE 31 COMP. GEN. 619, AND CASES THEREIN CITED. IT FOLLOWS THAT THE BENEFICIARY RETAINS THE PRIOR PAYMENT AND BECOMES ENTITLED, BY REASON OF THE CORRECTION, TO ONLY THE DIFFERENCE BETWEEN THE ACCOMPLISHED PAYMENT AND THE MONEY BENEFIT CREATED BY VIRTUE OF THE CORRECTION OF RECORDS. COMPARE 26 COMP. GEN. 711.

WHILE THE VIEW MIGHT BE ENTERTAINED THAT PAYMENT FROM THE APPROPRIATION AVAILABLE FOR PAYMENT OF ONLY THE NET AMOUNT OF THE MONEY BENEFITS FLOWING FROM CORRECTIONS UNDER SECTION 207, AS AMENDED, WOULD TEND TO AUGMENT SUCH APPROPRIATION AT THE EXPENSE OF THE APPLICABLE VETERANS ADMINISTRATION APPROPRIATIONS AND APPROPRIATIONS COVERING MUSTERING-OUT PAYMENTS, ALREADY CHARGED, WE BELIEVE IT TO BE THE BETTER VIEW AND HENCE CONCLUDE THAT THE CONGRESS DID NOT INTEND OR CONTEMPLATE REIMBURSEMENT OF APPROPRIATIONS PROPERLY CHARGED WITH PAYMENTS MADE IN SATISFACTION OF OBLIGATIONS SUCH AS MUSTERING-OUT PAY AND THE VETERANS ADMINISTRATION BENEFITS ALLUDED TO BY THE PAY AND ALLOWANCE COMMITTEE.

ACCORDINGLY, IN CASES INVOLVING PAYMENTS OF MUSTERING-OUT PAY AND PENSION OR COMPENSATION BY THE VETERANS ADMINISTRATION, THE APPROPRIATIONS FOR PAYING AMOUNTS DUE INCIDENT TO CORRECTION OF RECORDS ARE CHARGEABLE ONLY WITH THE NET AMOUNT PAID TO THE INDIVIDUAL CONCERNED.