B-142920, JULY 19, 1960, 40 COMP. GEN. 18

B-142920, JULY 19, 1960, 40 COMP. GEN. 18

MILITARY PERSONNEL - REENLISTMENT BONUS RECOUPMENT - TRANSFER TO FLEET RESERVE - CONSTRUCTIVE SERVICE CREDIT AN ENLISTED MEMBER OF THE NAVY WHO DOES NOT COMPLETE THE TERM OF ENLISTMENT FOR WHICH HE WAS PAID A REENLISTMENT BONUS UNDER SECTION 208 OF THE CAREER COMPENSATION ACT OF 1949, DUE TO TRANSFER TO THE FLEET RESERVE AND RELEASE FROM ACTIVE DUTY, MAY NOT BE RELIEVED OF LIABILITY FOR REFUND OF THE UNEARNED PORTION OF THE REENLISTMENT BONUS ON THE BASIS THAT THE UNEXPIRED PART OF HIS ENLISTMENT WAS CREDITABLE AS CONSTRUCTIVE SERVICE UNDER 10 U.S.C. 6330 (D) FOR TRANSFER TO THE FLEET RESERVE, SINCE THE CONSTRUCTIVE SERVICE AUTHORIZED UNDER 10 U.S.C. 6330 (D) IS SPECIFICALLY LIMITED TO CREDIT FOR ELIGIBILITY FOR TRANSFER TO THE FLEET RESERVE OR FLEET MARINE CORPS RESERVE AND, THEREFORE, MAY NOT BE COUNTED IN DETERMINING WHETHER THE MEMBER COMPLETES THE PERIOD OF SERVICE FOR WHICH HE WAS PAID A REENLISTMENT BONUS.

TO THE SECRETARY OF THE NAVY, JULY 19, 1960:

REFERENCE IS MADE TO LETTER OF MAY 16, 1960, FROM THE ASSISTANT SECRETARY OF THE NAVY ( PERSONNEL AND RESERVE FORCES), REQUESTING A DECISION (ASSIGNED SS-N-503 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE) WHETHER RECOUPMENT OF REENLISTMENT BONUS IS REQUIRED IN THE PARTICULAR CIRCUMSTANCES DESCRIBED IN THE LETTER.

THE LETTER OF THE ASSISTANT SECRETARY PRESUMABLY RELATES TO THE CASE OF ERVIN A. HORST, 3165071, EMC, USN. IT APPEARS THAT HE REENLISTED ON MARCH 30, 1956, WITH 17 YEARS 11 MONTHS AND 17 DAYS' SERVICE. HE WAS PAID A REENLISTMENT BONUS IN THE AMOUNT OF $391.75 ($192.40 X 2 13/360) COMPUTED UNDER SECTION 208 OF THE CAREER COMPENSATION ACT OF 1949, AS ADDED BY SECTION 2 OF THE ACT OF JULY 16, 1954, 37 U.S.C. 239. ON FEBRUARY 3, 1958, AT HIS REQUEST, HE WAS TRANSFERRED TO THE FLEET RESERVE AND RELEASED FROM ACTIVE DUTY AFTER ACTUALLY SERVING ONLY 1 YEAR 10 MONTHS AND 4 DAYS OF HIS LAST ENLISTMENT. OUR NAVY AUDIT BRANCH TOOK AN EXCEPTION TO THE BONUS PAYMENT IN THE AMOUNT OF $36.87. SUCH EXCEPTION WAS TAKEN FOR FAILURE TO RECOUP THE UNEARNED PORTION OF THE BONUS COMPUTED ON THE BASIS OF 2 MONTHS AND 9 DAYS REQUIRED TO COMPLETE 20 YEARS OF ACTIVE SERVICE.

THE LETTER OF THE ASSISTANT SECRETARY EXPRESSES THE ADMINISTRATIVE VIEW THAT, SINCE THE MEMBER AT THE TIME OF HIS TRANSFER TO THE FLEET RESERVE AND RELEASE FROM ACTIVE DUTY HAD COMPLETED 20 YEARS' ACTIVE SERVICE AS REQUIRED BY 10 U.S.C. 6330, FOR THE PURPOSE OF TRANSFER TO THE FLEET RESERVE, AND SINCE HE WAS ENTITLED TO RETAINER PAY COMPUTED ON THE BASIS OF OVER 20 YEARS' SERVICE, RECOUPMENT OF THE REENLISTMENT BONUS IS NOT REQUIRED. THE LETTER ALSO STATES THAT THE POLICY OF NOT RECOUPING REENLISTMENT BONUS PAYMENTS IN THE CIRCUMSTANCES HERE INVOLVED HAS BEEN IN EFFECT IN THE NAVY AND MARINE CORPS SINCE THE ENACTMENT OF SECTION 208 OF THE CAREER COMPENSATION ACT OF JULY 16, 1954.

SECTION 208 (A) OF THE CAREER COMPENSATION ACT OF 1949, AS ADDED BY THE 1954 ACT, 37 U.S.C. 239 (A), AUTHORIZES THE PAYMENT OF A REENLISTMENT BONUS TO MEMBERS OF THE UNIFORMED SERVICES, UNDER SPECIFIED CONDITIONS AND RESTRICTIONS, TO BE COMPUTED ON THE BASIS THERE PRESCRIBED. SUBSECTION (B) PROVIDES THAT NO BONUS MAY BE PAID TO A MEMBER WHO REENLISTS AFTER COMPLETING A TOTAL OF 20 YEARS OF ACTIVE FEDERAL SERVICE. IT FURTHER PROVIDES THAT THE BONUS PAYABLE TO A MEMBER WHO REENLISTS BEFORE COMPLETING A TOTAL OF 20 YEARS OF ACTIVE FEDERAL SERVICE, BUT WHO WILL UNDER THAT REENLISTMENT COMPLETE MORE THAN 20 YEARS OF SUCH SERVICE, IS COMPUTED BY USING AS A MULTIPLIER ONLY THAT NUMBER OF YEARS WHICH, WHEN ADDED TO HIS PREVIOUS SERVICE, TOTALS 20 YEARS. SUBSECTION (F) PROVIDES THAT, UNDER SUCH REGULATIONS AS MAY BE APPROVED BY THE SECRETARY OF DEFENSE, ANY MEMBER WHO VOLUNTARILY, OR AS THE RESULT OF HIS OWN MISCONDUCT, DOES NOT COMPLETE THE TERM OF ENLISTMENT FOR WHICH HE WAS PAID A REENLISTMENT BONUS UNDER THAT SECTION SHALL REFUND THAT PERCENTAGE OF THE BONUS THAT THE UNEXPIRED PART OF HIS ENLISTMENT IS OF THE TOTAL ENLISTMENT PERIOD FOR WHICH THE BONUS WAS PAID. SUBSECTION (G) PROVIDES THAT THE SECRETARY CONCERNED MAY PRESCRIBE REGULATIONS FOR THE ADMINISTRATION OF THIS SECTION IN HIS DEPARTMENT.

REGULATIONS OF THE SECRETARY OF DEFENSE IN EFFECT AT THE TIME INVOLVED ARE SET FORTH IN DEPARTMENT OF DEFENSE DIRECTIVE 1304.4 DATED DECEMBER 6, 1954, WHICH FURNISHED POLICY GUIDANCE TO THE SERVICES. CATEGORIES OF DISCHARGES WHERE RECOUPMENT OF THE BONUS IS TO BE EFFECTED ARE THERE ENUMERATED. SECTION III PROVIDES IN PERTINENT PART FOR RECOUPMENT OF BONUS AS FOLLOWS:

* * * (B) IN APPLYING THE TERM "WHO VOLUNTARILY OR AS A RESULT OF HIS OWN MISCONDUCT" A PRO RATA PORTION OF THE REENLISTMENT BONUS SHALL BE, UPON A DETERMINATION OF THE SECRETARY CONCERNED, RECOVERED FOR.

(1) SEPARATION BY REASON OF TRANSFER TO THE FLEET RESERVE, FLEET MARINE CORPS RESERVE, OR ARMY OR AIR FORCE RESERVE.

THIS ITEM DEALS WITH ONLY THOSE CASES WHERE AN INDIVIDUAL IS TRANSFERRED TO THE FLEET RESERVE, FLEET MARINE CORPS RESERVE, OR TO THE ARMY OR AIR FORCE RESERVE AND PLACED ON THE RETIRED LIST OF THE REGULAR ARMY OR AIR FORCE. IN THE CASE OF PERSONNEL SO RETIRED OR TRANSFERRED AND RETAINED ON CONTINUOUS ACTIVE DUTY, SUCH ACTIVE DUTY SHALL BE CONSIDERED AS A PART OF THE ENLISTMENT BEING SERVED IN AT THE TIME OF TRANSFER AND SHALL NOT BE USED IN COMPUTING THE PRO RATA SHARE OF THE REENLISTMENT BONUS TO BE RECOUPED. RETIREMENT BY REASON OF DISABILITY IS NOT INCLUDED UNDER THIS SECTION.

SIMILAR PROVISIONS ARE NOW CONTAINED IN THE DIRECTIVE OF THE SAME NUMBER DATED APRIL 14, 1960.

PARAGRAPH 1044075-4A OF THE NAVY COMPTROLLER MANUAL PROVIDES GENERALLY THAT ANY ENLISTED MEMBER WHO WAS PAID A REENLISTMENT BONUS UNDER THE PROVISIONS OF THAT PARAGRAPH FOR A REENLISTMENT OR AN EXTENSION OF AN ENLISTMENT ENTERED INTO ON OR AFTER JULY 16, 1954, AND WHO, EITHER VOLUNTARILY OR AS THE RESULT OF HIS OWN MISCONDUCT, DOES NOT COMPLETE THE ENLISTMENT OR EXTENSION OF ENLISTMENT FOR WHICH THE BONUS WAS PAID, WILL REFUND, IN ACCORDANCE WITH THE PROVISIONS OF SUBPARAGRAPHS B, C, AND D, A PRO RATA PORTION OF THE REENLISTMENT BONUS PAID. SUBPARAGRAPH B PROVIDES THAT THE PERIODS OF TIME NOT SERVED AS OUTLINED IN PARAGRAPH 1044070-4B FOR WHICH RECOUPMENT OF THE REENLISTMENT BONUS IS REQUIRED ARE EQUALLY APPLICABLE FOR RECOUPMENT OF REENLISTMENT BONUS PAID UNDER THIS SUBSECTION. PARAGRAPH 1044070-4B (2) PROVIDES THAT, EXCEPT AS OTHERWISE PROVIDED THEREIN,"THE FOLLOWING PERIOD OF TIME WILL BE CONSIDERED AS TIME NOT SERVED FOR THE PURPOSE OF DETERMINING THE AMOUNT OF REENLISTMENT BONUS TO BE REFUNDED:

2.PERIOD OF TIME COMPUTED FROM THE DATE ON WHICH A MEMBER IS SEPARATED FROM ACTIVE SERVICE THROUGH THE NORMAL DATE OF EXPIRATION OF ENLISTMENT IF SEPARATED FOR ONE OF THE FOLLOWING REASONS:

TRANSFER TO THE FLEET RESERVE OR THE FLEET MARINE CORPS RESERVE AND RELEASED TO INACTIVE DUTY PRIOR TO THE EXPIRATION OF THE NUMBER OF YEARS SERVICE FOR WHICH THE BONUS WAS PAID;

10 U.S.C. 6330 (B) PROVIDES THAT AN ENLISTED MEMBER OF THE REGULAR NAVY OR THE NAVAL RESERVE WHO HAS COMPLETED 20 OR MORE YEARS OF ACTIVE SERVICE IN THE ARMED FORCES "MAY, AT HIS REQUEST," BE TRANSFERRED TO THE FLEET RESERVE. SIMILAR PROVISIONS ARE MADE FOR TRANSFERS OF MARINE CORPS ENLISTED MEMBERS TO THE FLEET MARINE CORPS RESERVE. SUBSECTION (C) PROVIDES THAT MEMBERS TRANSFERRED TO THE FLEET RESERVE OR FLEET MARINE CORPS RESERVE UNDER THAT SECTION ARE ENTITLED, WHEN NOT ON ACTIVE DUTY, TO RETAINER PAY AT THE RATE OF 2 1/2 PERCENT OF THE BASIC PAY THAT THEY RECEIVED AT THE TIME OF TRANSFER MULTIPLIED BY THE NUMBER OF YEARS OF ACTIVE SERVICE IN THE ARMED FORCES. SUBSECTION (D) PROVIDES THAT FOR THE PURPOSES OF SUBSECTIONS (B) AND (C), A PART OF A YEAR THAT IS SIX MONTHS OR MORE IS COUNTED AS A WHOLE YEAR AND A PART OF A YEAR THAT IS LESS THAN SIX MONTHS IS DISREGARDED. WHILE UNDER THESE PROVISIONS A MEMBER IS ELIGIBLE FOR TRANSFER TO THE FLEET RESERVE AND RELEASE FROM ACTIVE DUTY AFTER COMPLETING 19 YEARS AND SIX MONTHS OF ACTIVE SERVICE, AND HIS RETAINER PAY IS COMPUTED ON THE BASIS OF 20 YEARS' SERVICE FOR MULTIPLIER PURPOSES, IT DOES NOT FOLLOW THAT SUCH MEMBER HAS COMPLETED 20 YEARS OF ACTIVE SERVICE FOR THE PURPOSE OF REENLISTMENT BONUS WITHIN THE CONTEMPLATION OF THE APPLICABLE PROVISIONS OF 37 U.S.C. 239. THE CONSTRUCTIVE SERVICE AUTHORIZED UNDER SUBSECTION 6330 (D) IS SPECIFICALLY LIMITED BY THAT SUBSECTION TO BE USED FOR THE PURPOSES OF SUBSECTIONS (B) AND (C). IN OTHER WORDS, UNDER SUBSECTION (B) SUCH CONSTRUCTIVE SERVICE IS AUTHORIZED TO BE COUNTED IN DETERMINING WHETHER THE MEMBER HAS COMPLETED 20 YEARS OF ACTIVE SERVICE FOR TRANSFER PURPOSES, AND UNDER SUBSECTION (C) SUCH SERVICE IS AUTHORIZED TO BE INCLUDED IN HIS YEARS OF ACTIVE DUTY FOR THE PURPOSE OF DETERMINING THE MULTIPLIER FACTOR TO BE USED IN COMPUTING HIS RETAINER PAY. HOWEVER, SUCH SERVICE IS NOT AUTHORIZED TO BE COUNTED FOR BASIC PAY PURPOSES (38 COMP. GEN. 110), AND NEITHER DOES SECTION 6330 AUTHORIZE COUNTING SUCH CONSTRUCTIVE SERVICE IN DETERMINING WHETHER A MEMBER COMPLETES THE PERIOD OF SERVICE FOR WHICH HE WAS PAID A REENLISTMENT BONUS. COMPARE 10 U.S.C. 6295.

SINCE THE ENLISTED MAN HERE INVOLVED WAS VOLUNTARILY TRANSFERRED TO THE FLEET RESERVE AND RELEASED FROM ACTIVE DUTY ON FEBRUARY 3, 1958, BEFORE COMPLETING THE PERIOD OF SERVICE FOR WHICH HE WAS PAID A REENLISTMENT BONUS, AND SINCE THE TRANSFER OF A MEMBER TO THE FLEET RESERVE AND RELEASE FROM ACTIVE DUTY IN THESE CIRCUMSTANCES IS LISTED AS ONE OF THE CATEGORIES WHERE RECOUPMENT OF THE REENLISTMENT BONUS IS REQUIRED BY DEPARTMENT OF DEFENSE DIRECTIVE 1304.4 AND THE CITED PROVISIONS OF THE NAVY COMPTROLLER MANUAL, IT IS CONCLUDED THAT THE EXCEPTION TAKEN IN THE AMOUNT OF $36.87 WAS PROPER AND IT WILL BE CONTINUED.

REGARDING THE STATEMENT THAT IT HAS BEEN THE POLICY OF THE NAVY AND MARINE CORPS SINCE THE ENACTMENT OF SECTION 208 NOT TO RECOUP REENLISTMENT BONUS IN CASES SUCH AS THE ONE HERE INVOLVED, OUR DEFENSE ACCOUNTING AND AUDITING DIVISION HAS REPORTED THAT AN EXAMINATION OF THE CASE FILES OF 14 MEMBERS WHO WERE TRANSFERRED TO THE FLEET RESERVE SINCE JANUARY 1, 1960, WITH 19 YEARS AND 6 MONTHS, OR MORE, OF SERVICE FOR TRANSFER PURPOSES DISCLOSED THAT IN ALL BUT TWO OF THE CASES THE UNEARNED BONUS WAS RECOUPED.