B-140023, SEP. 2, 1959

B-140023: Sep 2, 1959

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CHAPTER I-4 "INCENTIVE AWARDS" WHICH WILL PROVIDE THAT AN AGENCY MAY. PAY THE ENTIRE COST OF A CASH AWARD TO ONE OF ITS EMPLOYEES EVEN THOUGH THE EMPLOYEE CONTRIBUTION FOR WHICH THE AWARD IS GIVEN BENEFITED ANOTHER AGENCY OR AGENCIES AS WELL AS THE AGENCY EMPLOYING THE AWARD RECIPIENT. YOU ALSO SAY THAT YOU FEEL NO MONETARY LIMITATION ON THE PROCEDURE IS NECESSARY BECAUSE THE NATURE OF THE PROPOSED INSTRUCTION CONTAINS A BUILT- IN LIMITATION. THAT IS IF THE AMOUNT OF THE AWARD IS LARGE NO AGENCY WOULD ELECT TO PAY THE ENTIRE COST THEREOF. THE BASIC QUESTION PRESENTED BY YOUR SUBMISSION IS WHETHER THE GOVERNMENT EMPLOYEES' INCENTIVE AWARDS ACT AUTHORIZES THE APPROPRIATIONS OF A PRIMARILY BENEFITING AGENCY TO BE USED FOR AWARDS BASED.

B-140023, SEP. 2, 1959

TO THE HONORABLE ROGER W. JONES, CHAIRMAN, UNITED STATES CIVIL SERVICE COMMISSION:

ON JUNE 25, 1959, YOU REQUESTED OUR COMMENTS ON AN INSTRUCTION WHICH THE CIVIL SERVICE COMMISSION BELIEVES SHOULD BE ISSUED IN CONNECTION WITH THE DEPARTMENTAL AWARDS PROGRAM AUTHORIZED BY THE GOVERNMENT EMPLOYEES' INCENTIVE AWARDS ACT, 68 STAT. 1112.

IT APPEARS THAT THE COMMISSION PROPOSES TO ISSUE AN INSTRUCTION IN THE FEDERAL PERSONNEL MANUAL, CHAPTER I-4 "INCENTIVE AWARDS" WHICH WILL PROVIDE THAT AN AGENCY MAY, IF IT SO ELECTS, PAY THE ENTIRE COST OF A CASH AWARD TO ONE OF ITS EMPLOYEES EVEN THOUGH THE EMPLOYEE CONTRIBUTION FOR WHICH THE AWARD IS GIVEN BENEFITED ANOTHER AGENCY OR AGENCIES AS WELL AS THE AGENCY EMPLOYING THE AWARD RECIPIENT. YOU SAY THAT THE PURPOSE OF THIS INSTRUCTION WOULD BE TO AVOID THE EXPENSES OF TRANSFERRING SMALL SUMS BETWEEN AGENCIES.

YOU ALSO SAY THAT YOU FEEL NO MONETARY LIMITATION ON THE PROCEDURE IS NECESSARY BECAUSE THE NATURE OF THE PROPOSED INSTRUCTION CONTAINS A BUILT- IN LIMITATION. THAT IS IF THE AMOUNT OF THE AWARD IS LARGE NO AGENCY WOULD ELECT TO PAY THE ENTIRE COST THEREOF.

THE BASIC QUESTION PRESENTED BY YOUR SUBMISSION IS WHETHER THE GOVERNMENT EMPLOYEES' INCENTIVE AWARDS ACT AUTHORIZES THE APPROPRIATIONS OF A PRIMARILY BENEFITING AGENCY TO BE USED FOR AWARDS BASED, IN PART, ON BENEFITS TO OTHER AGENCIES.

THE GOVERNMENT EMPLOYEES' INCENTIVE AWARDS ACT, 68 STAT. 1112, PROVIDES IN PERTINENT PART AS FOLLOWS:

"SEC. 302. THE DEPARTMENTAL AWARDS PROGRAM SET FORTH IN THIS TITLE SHALL BE CARRIED OUT UNDER SUCH REGULATIONS AND INSTRUCTIONS AS MAY BE ISSUED BY THE UNITED STATES CIVIL SERVICE COMMISSION * * *.

"SEC. 304. (A) THE HEAD OF EACH DEPARTMENT IS AUTHORIZED TO PAY CASH AWARDS TO, AND TO INCUR NECESSARY EXPENSES FOR THE HONORARY RECOGNITION OF, CIVILIAN OFFICERS AND EMPLOYEES OF THE GOVERNMENT WHO BY THEIR SUGGESTIONS, INVENTIONS, SUPERIOR ACCOMPLISHMENTS, OR OTHER PERSONAL EFFORTS CONTRIBUTE TO THE EFFICIENCY, ECONOMY, OR OTHER IMPROVEMENT OF GOVERNMENT OPERATIONS OR WHO PERFORM SPECIAL ACTS OR SERVICES IN THE PUBLIC INTEREST IN CONNECTION WITH OR RELATED TO THEIR OFFICIAL EMPLOYMENT.

"/E) AWARDS TO EMPLOYEES AND EXPENSES FOR THE HONORARY RECOGNITION OF EMPLOYEES MAY BE PAID FROM THE FUNDS OR APPROPRIATIONS AVAILABLE TO THE ACTIVITY PRIMARILY BENEFITING OR MAY BE PAID FROM THE SEVERAL FUNDS OR APPROPRIATIONS OF THE VARIOUS ACTIVITIES BENEFITING AS MAY BE DETERMINED BY THE PRESIDENT FOR AWARDS UNDER SUBSECTION (B) OF THIS SECTION, AND BY THE HEAD OF THE DEPARTMENT CONCERNED FOR AWARDS UNDER SUBSECTION (A) OF THIS SECTION.'

THERE IS NOTHING IN THE ACT THAT RESTRICTS AN AGENCY HEAD TO PAYING A CASH AWARD FOR CONTRIBUTIONS WHICH BENEFIT ONLY HIS OWN AGENCY. SECTION 304 (A) AUTHORIZES THE AGENCY HEAD TO PAY A CASH AWARD TO AN EMPLOYEE WHOSE SUGGESTION CONTRIBUTES TO THE EFFICIENCY, ECONOMY OR OTHER IMPROVEMENT OF "GOVERNMENT OPERATIONS.' IN THIS RESPECT THE GOVERNMENT EMPLOYEES' INCENTIVE AWARDS ACT DIFFERS FROM THE PRIOR LEGISLATION WHICH IT SUPERSEDED, SECTION 14 OF THE ADMINISTRATIVE EXPENSES ACT OF 1946, 60 STAT. 809 P.L. 600, 79TH CONGRESS, WHICH AUTHORIZED A DEPARTMENT HEAD TO PAY CASH AWARDS ONLY TO EMPLOYEES WHO MADE SUGGESTIONS WHICH RESULTED IN IMPROVEMENTS OR ECONOMY "IN THE OPERATIONS OF HIS DEPARTMENT.' AS POINTED OUT ON PAGES 12 AND 13 OF SENATE REPORT 2101, 82D CONGRESS, ENTITLED "INCENTIVE AWARDS PROGRAM IN THE FEDERAL GOVERNMENT" UNDER P.L. 600 THERE WAS NO METHOD BY WHICH AN INDIVIDUAL COULD BE REWARDED IF HIS SUGGESTION APPLIED TO ANY AGENCY OTHER THAN HIS OWN. IN VIEW THEREOF THE REPORT RECOMMENDED LEGISLATION AUTHORIZING MONETARY AWARDS TO EMPLOYEES WHOSE SUGGESTIONS CONTRIBUTED TO IMPROVEMENTS OR ECONOMIES IN "GOVERNMENT OPERATIONS.' THAT SUGGESTED LANGUAGE WAS ADOPTED BY THE CONGRESS AND APPEARS IN THE PRESENT AWARDS ACT. IT IS EXPLAINED ON PAGE 5 OF SENATE REPORT NO. 1190, 83D CONGRESS, ACCOMPANYING S. 2665, A RELATED BILL, THAT SIMILAR LANGUAGE WOULD AUTHORIZE MONETARY AWARDS BASED ON "GOVERNMENT-WIDE SAVINGS.'

SECTION 304 (E) PROVIDES THAT DEPARTMENTAL AWARDS TO EMPLOYEES UNDER SUBSECTION 304 (A) MAY BE PAID FROM FUNDS OR APPROPRIATIONS AVAILABLE TO THE ACTIVITY PRIMARILY BENEFITING OR MAY BE PAID FROM THE SEVERAL FUNDS OR APPROPRIATIONS OF THE VARIOUS ACTIVITIES BENEFITING AS MAY BE DETERMINED BY THE HEAD OF THE DEPARTMENT CONCERNED. IT CLEARLY PROVIDES ALTERNATIVE METHODS OF FUNDING AWARDS FOR CONTRIBUTIONS BENEFITING MORE THAN ONE AGENCY. SINCE THERE IS NOTHING IN THE LEGISLATIVE HISTORY INDICATING ANY INTENTION OF THE CONGRESS ON THE EXTENT TO WHICH ONE AGENCY SHOULD PAY FOR "EMPLOYEE CONTRIBUTIONS" BENEFITING OTHER AGENCIES, WE MUST CONCLUDE THAT THE HEADS OF THE AGENCIES CONCERNED HAVE DISCRETIONARY AUTHORITY TO PAY AN AWARD UNDER SECTION 304 (A) EITHER ENTIRELY FROM FUNDS AVAILABLE TO THE ACTIVITY PRIMARILY BENEFITING--- EVEN THOUGH ACTIVITIES OF OTHER AGENCIES RECEIVE LESSER BENEFITS--- OR TO HAVE THE COST THEREOF SHARED BY THE VARIOUS BENEFITING AGENCIES, UNLESS RESTRICTED BY APPROPRIATE REGULATIONS OR INSTRUCTIONS.

SECTION 302 PROVIDES THAT THE DEPARTMENTAL AWARDS PROGRAM SHALL BE CARRIED ON UNDER SUCH REGULATIONS AND INSTRUCTIONS AS MAY BE ISSUED BY THE CIVIL SERVICE COMMISSION. SINCE THE PROCEDURE CONTEMPLATED IN THE PROPOSED INSTRUCTION IS AUTHORIZED BY LAW, THE QUESTION AS TO WHETHER A MONETARY LIMITATION SHOULD BE IMPOSED THEREON IS ONE OF POLICY WHICH IS PROPERLY FOR DETERMINATION BY YOU UNDER THE REGULATORY AUTHORITY PROVIDED BY SECTION 302. WE FEEL, HOWEVER, THAT THE AMOUNT OF AN EMPLOYEE AWARD WHICH IS ATTRIBUTABLE IN PART TO CONTRIBUTIONS BENEFITING OTHER AGENCIES SHOULD BE SUBJECT TO A MONETARY LIMITATION-- SUCH AS $100--- FOR CONTROL PURPOSES.

ACCORDINGLY, UPON THE DETERMINATION OF AN AGENCY HEAD THAT AN ACTIVITY OF HIS DEPARTMENT IS THE PRIMARY BENEFICIARY OF AN EMPLOYEE SUGGESTION, APPROPRIATIONS OF THAT ACTIVITY MAY PROPERLY BE USED TO MAKE AN AWARD BASED, IN PART, ON BENEFITS TO ACTIVITIES OF OTHER AGENCIES, AND INSTRUCTIONS PROVIDING FOR SUCH PROCEDURE WOULD BE AUTHORIZED BY THE AWARDS ACT.

WE FAVOR THE PROPOSED INSTRUCTION FROM AN ADMINISTRATIVE VIEWPOINT, BECAUSE IT WOULD REDUCE THE NUMBER OF TRANSFERS OF SMALL SUMS FROM ONE GOVERNMENT AGENCY TO ANOTHER. HOWEVER, WE SUGGEST THAT YOUR REGULATIONS SHOULD ALSO CONTAIN PROCEDURES WHICH WILL:

(A) PROVIDE THE HEAD OF THE AGENCY WITH INFORMATION OR DATA TO PERMIT HIM TO MAKE A VALID DETERMINATION THAT HIS AGENCY IS THE ACTIVITY PRIMARILY BENEFITING. THIS MAY BE ACCOMPLISHED BY ARRANGING FOR THE COMMISSION TO COORDINATE AGENCY COMMENTS UNDER THE SYSTEM CURRENTLY EMPLOYED FOR THE PROCESSING OF INTERDEPARTMENTAL SUGGESTIONS.

(B) PROVIDE CONTROLS TO PRECLUDE OTHER AGENCIES FROM MAKING AWARDS FOR THE SAME "EMPLOYEE CONTRIBUTION" FOR WHICH THE HEAD OF THE AGENCY EMPLOYING THE AWARD RECIPIENT AND PRIMARILY BENEFITING THEREFROM MAKES AN AWARD BASED UPON THE TOTAL BENEFITS TO THE FEDERAL GOVERNMENT.