B-135168, MAY 5, 1958

B-135168, MAY 5, 1958

TO HONORABLE GEORGE V. ALLEN, DIRECTOR, UNITED STATES INFORMATION AGENCY:

ON FEBRUARY 5, 1958, THE ASSISTANT DIRECTOR (ADMINISTRATION) REQUESTED OUR DECISION AS TO WHETHER UNDER THE CIRCUMSTANCES HEREINAFTER RELATED THE AGENCY IS REQUIRED TO COLLECT FROM ONE OF ITS OVERSEAS EMPLOYEES THAT PORTION OF QUARTERS ALLOWANCE REPRESENTING AMOUNTS ACTUALLY PAID BY THE EMPLOYEE FOR REPAIRS AND MAINTENANCE OF RENTED QUARTERS.

AN EMPLOYEE OF THE U.S. INFORMATION AGENCY, MR. LESTER WOHLERS, WAS ASSIGNED TO DUTY AT NAGASAKI, JAPAN, IN APRIL 1955. WHEN HE ARRIVED AT THAT PLACE HE FOUND THAT THERE WERE NO SUITABLE QUARTERS AVAILABLE FOR RENT. HOWEVER, IN HIS SEARCH FOR QUARTERS HE FOUND A HOUSE THAT COULD BE RENTED FOR 32,000 YEN PER MONTH BUT WHICH REQUIRED IMMEDIATE REPAIRS TO RENDER IT SUITABLE FOR OCCUPANCY AND WHICH WOULD REQUIRE CONTINUING EXPENDITURES FOR MAINTENANCE. MR. WOHLERS ACCEPTED THIS OFFER, HIS MONTHLY ALLOWANCE FOR RENT COULD HAVING THE NECESSARY REPAIRS MADE AND THE PROPERTY MAINTAINED IN AN ACCEPTABLE CONDITION. THE AGENT WAS WILLING TO ASSUME THE COST OF THE REPAIRS AND MAINTENANCE FOR A TOTAL MONTHLY RENTAL OF 50,000 YEN. HAD MR. WHOLERS ACCEPTED THIS OFFER, HIS MONTHLY ALLOWANCE FOR RENT COULD HAVE BEEN PROPERLY CLAIMED AND PAID AT THE RATE OF 50,000 YEN PER MONTH. HE WAS ADVISED BY LOCAL OFFICIALS, HOWEVER, THAT ENFORCEMENT OF SUCH A REPAIR AND MAINTENANCE CONTRACT WOULD BE VERY DIFFICULT AND THAT AT BEST THE RESULTS WOULD BE VERY UNSATISFACTORY. THEREFORE, THEY CONCLUDED THAT IN VIEW OF LOCAL CONDITIONS IT WOULD BE MORE SATISFACTORY IF MR. WOHLERS ASSUMED THE COST OF REPAIRS AND MAINTENANCE PERSONALLY.

MR. WOHLERS APPLIED FOR QUARTERS ALLOWANCE AT THE RATE OF 50,000 YEN PER MONTH FOR RENT. HE BASED HIS APPLICATION ON THE PROFFERED CONTRACT AT A TOTAL COST OF 50,000 YEN PER MONTH, WHICH FEE INCLUDED THE ESTIMATED COST OF REPAIRS AND MAINTENANCE IN ADDITION TO THE MONTHLY RENTAL OF 32,000 YEN. THIS ALLOWANCE REQUEST WAS INTENDED TO COVER THE SAME ITEMS WHICH THE RENTAL AGENT HAD INCLUDED IN HIS PROFFERED CONTRACT. THE COST TO THE GOVERNMENT WOULD NOT APPEAR TO HAVE BEEN INCREASED BECAUSE OF THE PROCEDURE FOLLOWED.

THE EMPLOYEE KEPT A COMPLETE RECORD OF HIS EXPENDITURES FOR REPAIRS AND MAINTENANCE AS HE PROPERLY UNDERSTOOD THAT, UNDER THE STANDARD REGULATIONS (GOVERNMENT CIVILIAN FOREIGN AREAS), HE WAS ENTITLED TO AN ALLOWANCE EQUAL ONLY TO THE ACTUAL COST FOR QUARTERS. THE ASSISTANT DIRECTOR SAYS THAT SUCH COST NORMALLY IS KNOWN WHEN THE APPLICATION IS MADE, BUT IN THIS CASE IT COULD BE ASCERTAINED ONLY AFTER THE EXPENSES WERE DETERMINED ON A MONTH -TO-MONTH BASIS AND THAT IN ESSENCE THIS WAS A DETERMINATION OF THE QUARTERS ALLOWANCE FOR MR. WOHLERS BASED ON THE SAME ITEMS WHICH NORMALLY ARE INCLUDED BY A LANDLORD IN DETERMINING A RENTAL FEE.

MR. WOHLERS VACATED THE PREMISES IN MAY 1957. AS A RESULT OF THE PROCEDURE FOLLOWED THAT PART OF THE TOTAL ALLOWANCE PAID TO MR. WOHLERS DURING HIS TENANCY WHICH HAD BEEN ESTIMATED TO COVER THE COST OF REPAIRS AND MAINTENANCE AMOUNTED TO THE YEN EQUIVALENT OF $1,219.44. ON THE OTHER HAND, HIS ACTUAL EXPENDITURES FOR THIS PURPOSE HAD AMOUNTED TO ONLY $760.48. HE PROMPTLY AND VOLUNTARILY REFUNDED THE DIFFERENCE OF $458.96 WHICH THE ASSISTANT DIRECTOR SAYS CAN BE CONSIDERED A SAVING TO THE GOVERNMENT BECAUSE OF THE PROCEDURE EMPLOYED.

BASED UPON THE FOREGOING FACTS AND CIRCUMSTANCES THE ASSISTANT DIRECTOR STATES THE PROBLEM AS FOLLOWS:

"UNDER THE PROVISIONS OF THE ALLOWANCES REGULATIONS, ONLY "RENT" AND "UTILITIES" MAY BE CONSIDERED IN DETERMINING THE AMOUNT OF QUARTERS ALLOWANCE FOR WHICH AN EMPLOYEE IS ENTITLED TO MAKE APPLICATION. HOWEVER, THIS AGENCY ACTUALLY BEARS THE COST OF REPAIRS AND MAINTENANCE OF QUARTERS OCCUPIED BY ITS EMPLOYEES ABROAD BY REASON OF ITS INSISTENCE THAT ALL OFFICERS AND EMPLOYEES OCCUPY QUARTERS SUITABLE FOR WESTERN OCCUPANCY. REPAIRS AND MAINTENANCE ARE GENERALLY INCLUDED BY LESSORS IN COMPUTING RENTAL CHARGES. IT IS THEREFORE SUBMITTED THAT THE INSTANT DEFECT IS MERELY PROCEDURAL AND MAY BE CURED BY ACTION OF YOUR OFFICE.

"IN VIEW OF THE CIRCUMSTANCES, ADVICE IS REQUESTED AS TO WHETHER OR NOT THE AGENCY IS REQUIRED TO COLLECT FROM MR. WOHLERS THE AMOUNT OF $760.48, REPRESENTING THAT PORTION OF HIS ALLOWANCES WHICH HE ACTUALLY PAID FOR REPAIRS AND MAINTENANCE IN PROVIDING ADEQUATE QUARTERS.'

UNDER SECTION 2 (D) OF REORGANIZATION PLAN NO. 8 OF 1953 AND SECTION 2 (C) (2) OF EXECUTIVE ORDER NO. 10477 OF AUGUST 1, 1953, THE PROVISIONS OF THE STANDARDIZED REGULATIONS (GOVERNMENT CIVILIANS, FOREIGN AREAS) GOVERN MR. WOHLER'S ENTITLEMENT TO A LIVING QUARTERS ALLOWANCE. THE REGULATIONS (SECTION 236) MAKE NO PROVISION FOR REIMBURSING AN EMPLOYEE FOR COSTS OF REPAIRS AND MAINTENANCE OF RENTED QUARTERS WHICH HE HIMSELF INCURRED. FURTHERMORE, IT WOULD APPEAR THAT THE BASIC AUTHORITY PROVIDED BY SECTION 901 OF THE FOREIGN SERVICE ACT OF 1946, 22 U.S.C. 1131 (1) TO GRANT "ALLOWANCES, WHENEVER GOVERNMENT OWNED OR RENTED QUARTERS ARE NOT AVAILABLE FOR LIVING QUARTERS, HEAT, LIGHT, FUEL, GAS,AND ELECTRICITY (WATER)" IS NOT SUFFICIENTLY BROAD TO PERMIT THE REGULATIONS TO AUTHORIZE THE REIMBURSEMENTS WHICH WERE MADE HERE. IN THAT CONNECTION, SEE H.R. 4943; H.R. 6853; AND H.R. 3527, PRESENTLY BEFORE THE 85TH CONGRESS.

IN VIEW OF THE CIRCUMSTANCES OUTLINED ABOVE, HOWEVER, WITH PARTICULAR REGARD FOR THE FACT THAT THE PROCEDURE UTILIZED RESULTED IN A SAVINGS TO THE GOVERNMENT, WE SHALL NOT INSIST UPON COLLECTION FROM MR. WOHLERS OF THE AMOUNT IN QUESTION, NAMELY, $760.48.