B-149714, SEPTEMBER 24, 1962, 42 COMP. GEN. 172

B-149714: Sep 24, 1962

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GRATUITIES - REENLISTMENT BONUS - UNEARNED BONUS DEBT REMISSION THE ERRONEOUS DESIGNATION OF AN IMPROPER PAYMENT TO AN ENLISTED MEMBER OF THE UNIFORMED SERVICES AS A "REENLISTMENT BONUS" WHEN THE MEMBER WAS NOT ENTITLED TO ANY BONUS DOES NOT MAKE THE PAYMENT A REENLISTMENT BONUS. THE REMISSION OR CANCELLATION OF AN IMPROPER PAYMENT TO AN ENLISTED MAN WHICH PAYMENT HAD BEEN ERRONEOUSLY DESIGNATED AS A "REENLISTMENT BONUS" WHEN THE MEMBER WAS NOT ENTITLED TO ANY BONUS PAYMENT DOES NOT REQUIRE THAT THE REENLISTMENT BONUS PAYMENT BE CONSIDERED IN DETERMINING THE NUMBER OF THE REENLISTMENT FOR COMPUTATION OF THE AMOUNT PAYABLE UNDER SECTION 208 (A) OF THE CAREER COMPENSATION ACT OF 1949. IN VIEW OF THE PROVISION IN FOOTNOTE NO. 1 TO SUBSECTION 208 (A) FOR THE EXCLUSION FROM THE COMPUTATION OF ANY REENLISTMENT WHEN A BONUS WAS NOT AUTHORIZED.

B-149714, SEPTEMBER 24, 1962, 42 COMP. GEN. 172

GRATUITIES - REENLISTMENT BONUS - LIMITATION ON AMOUNT - ERRONEOUS PAYMENTS. GRATUITIES - REENLISTMENT BONUS - LIMITATION ON AMOUNT - OVERPAYMENTS. GRATUITIES - REENLISTMENT BONUS - NUMBER DETERMINATION - ERRONEOUS PAYMENT. GRATUITIES - REENLISTMENT BONUS - UNEARNED BONUS DEBT REMISSION THE ERRONEOUS DESIGNATION OF AN IMPROPER PAYMENT TO AN ENLISTED MEMBER OF THE UNIFORMED SERVICES AS A "REENLISTMENT BONUS" WHEN THE MEMBER WAS NOT ENTITLED TO ANY BONUS DOES NOT MAKE THE PAYMENT A REENLISTMENT BONUS; THEREFORE, REMISSION OR CANCELLATION OF THE ERRONEOUS PAYMENT UNDER 10 U.S.C. 4837 (D) DOES NOT AFFECT THE CUMULATIVE AMOUNT OF REENLISTMENT BONUS PAYMENTS WHICH MAY BE PAID TO THE MEMBER UNDER SECTION 308 (C) OF THE CAREER COMPENSATION ACT OF 1949, 37 U.S.C. 239/C). THE REMISSION OR CANCELLATION OF AN IMPROPER PAYMENT TO AN ENLISTED MAN WHICH PAYMENT HAD BEEN ERRONEOUSLY DESIGNATED AS A "REENLISTMENT BONUS" WHEN THE MEMBER WAS NOT ENTITLED TO ANY BONUS PAYMENT DOES NOT REQUIRE THAT THE REENLISTMENT BONUS PAYMENT BE CONSIDERED IN DETERMINING THE NUMBER OF THE REENLISTMENT FOR COMPUTATION OF THE AMOUNT PAYABLE UNDER SECTION 208 (A) OF THE CAREER COMPENSATION ACT OF 1949, 37 U.S.C. 239 (A), IN VIEW OF THE PROVISION IN FOOTNOTE NO. 1 TO SUBSECTION 208 (A) FOR THE EXCLUSION FROM THE COMPUTATION OF ANY REENLISTMENT WHEN A BONUS WAS NOT AUTHORIZED. AN OVERPAYMENT OF A REENLISTMENT BONUS TO A MEMBER OF THE UNIFORMED SERVICES WHO IS ENTITLED TO A BONUS DOES NOT REQUIRE THAT THE AMOUNT OF THE OVERPAYMENT BE CONSIDERED ANY PART OF THE REENLISTMENT BONUS AUTHORIZED BY LAW AND, THEREFORE, THE AMOUNT OF THE OVERPAYMENT IS NOT TO BE CONSIDERED IN DETERMINING THE CUMULATIVE AMOUNT OF BONUS PAYMENTS AUTHORIZED UNDER SECTION 208 (C) OF THE CAREER COMPENSATION ACT OF 1949, 37 U.S.C. 239 (C). THE REMISSION OR CANCELLATION OF AN UNEARNED REENLISTMENT BONUS DEBT UPON A SUBSEQUENT REENLISTMENT OF A MEMBER WHO HAD FAILED TO COMPLETE THE TERM OF ENLISTMENT FOR WHICH PAYMENT WAS MADE PRIOR TO DISCHARGE DOES NOT AFFECT THE INITIAL VALIDITY OF THE REENLISTMENT BONUS PAYMENT NOR BAR APPLICATION OF THE $2,000 LIMITATION IN SECTION 208 (C) OF THE CAREER COMPENSATION ACT OF 1949, 37 U.S.C. 239 (C), ON THE CUMULATIVE AMOUNT OF THE REENLISTMENT BONUS PAYABLE; THEREFORE THE AMOUNT OF ANY UNEARNED REENLISTMENT BONUS WHICH IS REMITTED OR CANCELED MUST BE INCLUDED IN DETERMINING THE CUMULATIVE AMOUNT OF THE REENLISTMENT BONUS PAYABLE UNDER SECTION 208 (C).

TO THE SECRETARY OF DEFENSE, SEPTEMBER 24, 1962:

REFERENCE IS MADE TO LETTER OF AUGUST 11, 1962, FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) SUBMITTING FOR DECISION THE QUESTION WHETHER ERRONEOUS PAYMENTS, INCLUDING OVERPAYMENTS, OF REENLISTMENT BONUSES WHICH ARE REMITTED UNDER THE AUTHORITY OF 10 U.S.C. 4837 (D), 6161, OR 9837 (D), MUST BE CONSIDERED IN DETERMINING THE CUMULATIVE AMOUNT OF BONUS PAYMENTS AUTHORIZED BY LAW AND THE NUMBER OF THE REENLISTMENT INVOLVED IN COMPUTING THE AMOUNT PAYABLE FOR SUBSEQUENT REENLISTMENTS. THE MATTER IS SUBMITTED WITH A FULL DISCUSSION IN MILITARY PAY AND ALLOWANCE COMMITTEE ACTION NO. 306.

REENLISTMENT "BONUSES" WERE AUTHORIZED IN SECTION 207 OF THE CAREER COMPENSATION ACT OF 1949, CH. 681, 63 STAT. 811, 37 U.S.C. 238, AND IN SECTION 208 OF THAT ACT, 37 U.S.C. 239, WHICH WAS ADDED BY SECTION 2 OF THE ACT APPROVED JULY 16, 1951, CH. 535, 68 STAT. 488. SUCH BONUSES ARE BASED ON THE LENGTH OF THE PERIOD FOR WHICH REENLISTING AND HENCE CONTEMPLATE THE PERFORMANCE OF FUTURE SERVICE. ALTHOUGH THE AMOUNT OF A REENLISTMENT BONUS PAYABLE UNDER SECTION 207 OR 208 IS PROJECTED ON FUTURE SERVICE, THE RIGHT TO RECEIVE SUCH A PAYMENT VESTS IN THE INDIVIDUAL CONCERNED UPON REENLISTMENT IF THE CONDITIONS SPECIFIED IN THE APPLICABLE STATUTORY PROVISIONS ARE MET.

SUBSECTION 208 (C), 68 STAT. 489, 37 U.S.C. 239 (C), PROVIDES:

THE CUMULATIVE AMOUNT WHICH MAY BE PAID TO A MEMBER UNDER THIS SECTION, OR UNDER THIS SECTION AND ANY OTHER PROVISION OF LAW AUTHORIZING REENLISTMENT BONUSES, MAY NOT EXCEED $2,000.

UNDER SUBSECTION 208 (A), 68 STAT. 488, 37 U.S.C. 239 (A), THE AMOUNT OF REENLISTMENT BONUS PAYABLE IS DETERMINED ON THE BASIS OF THE PARTICULAR REENLISTMENT INVOLVED VARYING FROM THE GREATEST AMOUNT UPON THE FIRST REENLISTMENT AND DIMINISHING PROGRESSIVELY THROUGH THE SECOND AND THIRD REENLISTMENTS TO THE SMALLEST AMOUNT FOR THE FOURTH AND ANY SUBSEQUENT REENLISTMENT.

A REENLISTMENT IS DEFINED IN SUBSECTION 207 (B), 63 STAT. 811, 37 U.S.C. 238 (B), FOR THE PURPOSE OF DETERMINING WHETHER A REENLISTMENT BONUS IS PAYABLE UNDER SUBSECTION 207 (A), 37 U.S.C. 238 (A), AS "ENLISTMENT IN ONE OF THE REGULAR SERVICES FOLLOWING (1) COMPULSORY OR VOLUNTARY ACTIVE DUTY IN SUCH SERVICE, OR (2) EXTENDED ACTIVE DUTY OF ONE YEAR OR MORE IN A RESERVE COMPONENT OF SUCH SERVICE.' SUBSECTION 208 (E), 3M U.S.C. 239 (E), DEFINES REENLISTMENT FOR THE PURPOSES OF SUBSECTION 208 (A) AS "/1) AN ENLISTMENT IN A REGULAR COMPONENT OF A UNIFORMED SERVICE AFTER COMPULSORY OR VOLUNTARY ACTIVE DUTY IN THAT SERVICE; OR (2) A VOLUNTARY EXTENSION OF AN ENLISTMENT FOR TWO OR MORE YEARS.' FOOTNOTE NO. 1 IN SUBSECTION 208 (A) EXPRESSLY PROVIDES THAT "ANY REENLISTMENT WHEN A BONUS WAS NOT AUTHORIZED IS NOT COUNTED.'

SECTION 4837 (D), TITLE 10 U.S. CODE, APPLICABLE TO THE ARMY, PROVIDES THAT:

IF HE CONSIDERS IT IN THE BEST INTEREST OF THE UNITED STATES, THE SECRETARY MAY HAVE REMITTED OR CANCELLED ANY PART OF AN ENLISTED MEMBER'S INDEBTEDNESS TO THE UNITED STATES OR ANY OF ITS INSTRUMENTALITIES REMAINING UNPAID BEFORE, OR AT THE TIME OF, THAT MEMBER'S HONORABLE DISCHARGE.

THE PROVISIONS OF 10 U.S.C. 6161 (ADDED BY PUBLIC LAW 86-511, APPROVED JUNE 11, 1960, 74 STAT. 207), WHICH ARE APPLICABLE TO THE NAVY, AND 10 U.S.C. 9837 (D), APPLICABLE TO THE AIR FORCE, ARE IDENTICAL TO 10 U.S.C. 4837 (D).

IT IS POINTED OUT IN MILITARY PAY AND ALLOWANCE COMMITTEE ACTION NO. 306 THAT THE LEGISLATIVE HISTORY OF THE ACT OF MAY 22, 1926, CH. 676, 45 STAT. 698--- THE BASIC SOURCE STATUTE OF 10 U.S.C. 4837 (D/--- CONTAINS A STATEMENT THAT UNDER SUCH AUTHORITY AN ENLISTED MEMBER'SINDEBTEDNESS TO THE UNITED STATES "COULD BE CANCELED SO THAT HE COULD REENLIST WITH A CLEAN SLATE.' ALSO, REFERENCE IS MADE TO WEBSTER'S NEW INTERNATIONAL DICTIONARY, SECOND EDITION, UNABRIDGED, WITH RESPECT TO THE DEFINITION THEREIN OF THE TERMS "REMIT" AND "CANCEL.' THE COMMITTEE ACTION STATES THAT:

IT THEREFORE APPEARS REASONABLE TO CONCLUDE THAT REMISSION OF AN INDEBTEDNESS RESULTING FROM AN ERRONEOUS OR OVERPAYMENT OF REENLISTMENT BONUS OR FAILURE TO RECOUP UNEARNED REENLISTMENT BONUS NOT ONLY ELIMINATES THE NECESSITY TO REPAY THE INDEBTEDNESS BUT BLOTS OUT SUCH PAYMENT AND RESTORES THE MEMBER TO HIS FORMER STATUS WITH A CLEAN SLATE.

THE FIRST QUESTION PRESENTED IS AS FOLLOWS:

1. AN ENLISTED MEMBER IS ERRONEOUSLY PAID A REENLISTMENT BONUS (NO ENTITLEMENT TO BONUS EXISTED). ALL, OR A PORTION, OF THE ERRONEOUS PAYMENT IS REMITTED AS BEING IN THE BEST INTEREST OF THE UNITED STATES UNDER THE AUTHORITY CONTAINED IN TITLE 10, U.S.C., SECTION 4837 (D), 6161, OR 9837 (D).

A. MUST THE AMOUNT REMITTED BE CONSIDERED A PAYMENT OF REENLISTMENT BONUS FOR THE PURPOSE OF DETERMINING THE CUMULATIVE AMOUNT OF BONUS PAYMENTS AUTHORIZED UNDER THE PROVISIONS OF SECTION 208 (C) OF THE CAREER COMPENSATION ACT OF 1949, AS AMENDED BY THE ACT OF 16 JULY 1954 (68 STAT. 488/?

B. MUST THE ERRONEOUS PAYMENT REMITTED BE CONSIDERED A PAYMENT OF REENLISTMENT BONUS FOR THE PURPOSE OF DETERMINING THE NUMBER OF THE REENLISTMENT INVOLVED WHEN COMPUTING THE AMOUNT PAYABLE UNDER SECTION 208 (A), SUPRA, FOR SUBSEQUENT REENLISTMENTS?

IN THE SITUATION ABOVE SET FORTH THE IMPORTANT STATEMENT TO NOTE IS THAT "NO ENTITLEMENT TO BONUS EXISTED.' UNDER SUBSECTION 208 (C) THE CUMULATIVE AMOUNT WHICH MAY BE PAID TO A MEMBER UNDER SECTION 208, OR UNDER SECTION 208 AND ANY OTHER PROVISION OF LAW "AUTHORIZING REENLISTMENT BONUSES" MAY NOT EXCEED $2,000. THE SPECIFIC LIMITATION OF $2,000 EXPRESSLY APPLIES TO THE PAYMENT OF REENLISTMENT BONUSES AUTHORIZED BY LAW. CONSEQUENTLY, WHERE NO ENTITLEMENT TO REENLISTMENT BONUS EXISTS THE ERRONEOUS DESIGNATION OF AN IMPROPER PAYMENT AS A "REENLISTMENT BONUS" DOES NOT CHANGE THE CHARACTER OF THE IMPROPER DISBURSEMENT. HENCE, SUCH AN IMPROPER PAYMENT DOES NOT CONSTITUTE ANY PART OF THE CUMULATIVE AMOUNT OF REENLISTMENT BONUS PRESCRIBED IN SUBSECTION 208 (C). IN SUCH A SITUATION THE INDIVIDUAL CONCERNED IS INDEBTED TO THE UNITED STATES TO THE EXTENT OF THE FUNDS IMPROPERLY RECEIVED AND THE REMISSION OR CANCELLATION OF SUCH AN ERRONEOUS PAYMENT, OR ANY PART THEREOF, DOES NOT AFFECT THE CUMULATIVE AMOUNT SPECIFIED IN SUBSECTION 208 (C). QUESTION 1A IS ANSWERED IN THE NEGATIVE.

QUESTION 1B ALSO IS ANSWERED IN THE NEGATIVE, SINCE, UNDER THE PROVISIONS OF FOOTNOTE NO. 1 TO SUBSECTION 208 (A), QUOTED ABOVE, ANY REENLISTMENT WHEN A BONUS WAS NOT AUTHORIZED "IS NOT NTED.'

QUESTION 2 IS AS FOLLOWS:

2. WOULD THE ANSWER TO QUESTION 1A BE THE SAME IN THE CASE OF AN OVERPAYMENT OF REENLISTMENT BONUS (ENTITLEMENT TO BONUS EXISTED BUT PAYMENT MADE IN AN AMOUNT GREATER THAN THAT AUTHORIZED AND SUCH OVERPAYMENT IS REMITTED/?

IN THIS QUESTION IT IS STATED THAT "ENTITLEMENT TO BONUS EXISTED," BUT THAT AN OVERPAYMENT RESULTED WHEN THE AMOUNT PAID EXCEEDED THE AMOUNT AUTHORIZED BY LAW IN THE CIRCUMSTANCES OF THE PARTICULAR CASE. WHERE AN OVERPAYMENT OCCURS IN THE MANNER OUTLINED ABOVE, THE AMOUNT OF THE OVERPAYMENT DOES NOT CONSTITUTE ANY PART OF THE REENLISTMENT BONUS "AUTHORIZED BY LAW" AND HENCE THE AMOUNT OF SUCH OVERPAYMENT PROPERLY MAY NOT BE CONSIDERED IN DETERMINING THE CUMULATIVE AMOUNT OF $2,000 PRESCRIBED IN SUBSECTION 208 (C). QUESTION 2 IS ANSWERED IN THE AFFIRMATIVE.

QUESTION 3 PRESENTS THE CASE OF A MEMBER WHO HAS BEEN CORRECTLY PAID A REENLISTMENT BONUS FOR A CURRENT ENLISTMENT AND WHO THEREAFTER IS DISCHARGED PRIOR TO THE EXPIRATION OF SUCH ENLISTMENT PERIOD UNDER CIRCUMSTANCES WHICH REQUIRE RECOUPMENT OF THE UNEARNED BONUS IN ACCORDANCE WITH THE PROVISIONS OF SUBSECTION 208 (F), 68 STAT. 489, 37 U.S.C. 239 (F). QUESTION 3 FURTHER STATES THAT RECOUPMENT OF THE UNEARNED BONUS IS NOT MADE AND THAT UPON THE MEMBER'S SUBSEQUENT REENLISTMENT THE RESULTING OVERPAYMENT (INDEBTEDNESS) IS REMITTED AS PROVIDED IN 10 U.S.C. 4837 (D), 6161, OR 9837 (D). THE PRECISE ISSUE RAISED IN QUESTION 3 IS "UNDER SUCH CIRCUMSTANCES, WOULD THE ANSWER TO QUESTION 1A BE THE SAME?

IN THIS CASE THE FACTS STATED ABOVE INDICATE THAT THE MEMBER WAS ENTITLED TO A REENLISTMENT BONUS AND THAT HE WAS PAID IN THE CORRECT AMOUNT, WHICH ACCORDINGLY BECAME A PART OF CUMULATIVE AMOUNT OF $2,000 PRESCRIBED IN SUBSECTION 208 (C). RECOUPMENT OF THE UNEARNED PORTION OF A REENLISTMENT BONUS IS REQUIRED BY SUBSECTION 208 (F), IN THOSE CASES WHERE A MEMBER OF A UNIFORMED SERVICE VOLUNTARILY, OR BECAUSE OF HIS OWN MISCONDUCT, DOES NOT COMPLETE THE TERM OF ENLISTMENT FOR WHICH HE WAS PAID A BONUS UNDER SUBSECTION 208 (A). SUBSECTION 207 (A) AS AMENDED BY THE ACT OF OCTOBER 26, 1951, CH. 580, 65 STAT. 654, 37 U.S.C. 238 (A), CONTAINS A SIMILAR PROVISION FOR RECOUPMENT OF THE UNEARNED PORTION OF A REENLISTMENT BONUS PAID UNDER THESE PROVISIONS OF LAW. IT WILL BE NOTED THAT IT IS THE MEMBER'S OWN VOLUNTARY ACT OR HIS OWN MISCONDUCT WHICH BRINGS ABOUT HIS SEPARATION FROM THE SERVICE PRIOR TO COMPLETING THE TERM OF ENLISTMENT FOR WHICH HE RECEIVED THE REENLISTMENT BONUS.

WHILE A REMISSION OR CANCELLATION UNDER THE AUTHORITY INDICATED ABOVE IN THE CASE OF AN HONORABLE DISCHARGE MAY, AS INDICATED IN COMMITTEE ACTION NO. 306,"BLOT OUT," "OBLITERATE" AND ,ABOLISH" ANY OUTSTANDING INDEBTEDNESS, THEREBY PERMITTING THE INDIVIDUAL CONCERNED TO "REENLIST WITH A CLEAN SLATE," THE EFFECT OF SUCH ACTION NECESSARILY IS LIMITED TO THE FINANCIAL RELIEF CONTEMPLATED BY THE LAW, THAT IS, AFFORDING TO THE INDIVIDUAL CONCERNED A FULL RELEASE OF ALL LIABILITY TO REFUND TO THE GOVERNMENT THE AMOUNT OF UNEARNED REENLISTMENT BONUS. SUCH ACTION OF REMISSION OR CANCELLATION DOES NOT, HOWEVER, AFFECT THE INITIAL VALIDITY OF THE REENLISTMENT BONUS PAYMENT IN SUCH A CASE NOR BAR APPLICATION OF THE RESTRICTION PRESCRIBED IN SUBSECTION 208 (C) AS TO THE CUMULATIVE AMOUNT OF REENLISTMENT BONUS PAYABLE UNDER ANY PROVISION OF LAW. THEREFORE, UNLESS THE UNEARNED PORTION OF A REENLISTMENT BONUS IS RECOUPED THE MEMBER CONCERNED IN THE CIRCUMSTANCES ABOVE OUTLINES MAY RECEIVE MORE THAN THE TOTAL CUMULATIVE AMOUNT PAYABLE TO HIM AS REENLISTMENT BONUSES. ACCORDINGLY, IT IS OUR VIEW THAT THE AMOUNT OF ANY "UNEARNED" REENLISTMENT BONUS, OR ANY PART THEREOF, WHICH IS REMITTED OR CANCELED UNDER AUTHORITY OF THE STATUTORY PROVISIONS ABOVE REFERRED TO MUST BE INCLUDED IN DETERMINING THE CUMULATIVE AMOUNT OF $2,000 PRESCRIBED IN SUBSECTION 208 (C). QUESTION 3 IS ANSWERED IN THE NEGATIVE.