B-150069, MARCH 12, 1963, 42 COMP. GEN. 486

B-150069: Mar 12, 1963

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REMAINS IN THE PAY APPROPRIATION UNTIL THE INDEBTEDNESS IS LIQUIDATED. AS THE MEMBER'S STATUTORY PAY IS REDUCED BY THE AMOUNT OF THE FORFEITURE IT IS UNAVAILABLE TO LIQUIDATE HIS INDEBTEDNESS. WHICH IS NEITHER INCREASED NOR DECREASED BY THE RETENTION OF THE FORFEITURE IN THE APPROPRIATION UNTIL THE INDEBTEDNESS IS LIQUIDATED. NOR BY THE RELEASING TO THE FUND ONLY THOSE AMOUNTS OF THE FORFEITURE WHICH ARE "OVER AND ABOVE" THE AMOUNT OF THE INDEBTEDNESS. HAS NO APPLICATION TO ANY INDEBTEDNESS WHICH ACCRUES OR IS INCURRED AFTER THE COURTS-MARTIAL FORFEITURE HAS BEEN EXECUTED. THE DEDUCTIONS OF AMOUNTS DUE FOR THE REIMBURSEMENT OF GOVERNMENT WHICH ARE REQUIRED TO BE MADE FROM FORFEITURES OR FINES APPLIES AS WELL TO AN INDEBTEDNESS DUE A GOVERNMENT INSTRUMENTALITY.

B-150069, MARCH 12, 1963, 42 COMP. GEN. 486

PAY - COURTS-MARTIAL SENTENCES - FORFEITURES - UNLIQUIDATED PORTION. PAY - COURTS-MARTIAL SENTENCES - FORFEITURES - EXECUTION - STATUS OF INDEBTEDNESS. PAY - COURTS-MARTIAL SENTENCES - FORFEITURES - CANCELLATION OF INDEBTEDNESS THE UNLIQUIDATED PORTION OF A FORFEITURE OF PAY AND ALLOWANCES IMPOSED BY A COURTS-MARTIAL SENTENCE, THE MEMBER'S TOTAL STATUTORY PAY AND ALLOWANCES BEFORE FORFEITURE HAVING BEEN APPLIED TO THE CHARGES AGAINST HIM AND THE EXCESS OVER THE CHARGES TRANSFERRED TO THE SOLDIERS' HOME PERMANENT FUND, PURSUANT TO 24 U.S.C. 44, REMAINS IN THE PAY APPROPRIATION UNTIL THE INDEBTEDNESS IS LIQUIDATED, AND AS THE MEMBER'S STATUTORY PAY IS REDUCED BY THE AMOUNT OF THE FORFEITURE IT IS UNAVAILABLE TO LIQUIDATE HIS INDEBTEDNESS, WHICH IS NEITHER INCREASED NOR DECREASED BY THE RETENTION OF THE FORFEITURE IN THE APPROPRIATION UNTIL THE INDEBTEDNESS IS LIQUIDATED, NOR BY THE RELEASING TO THE FUND ONLY THOSE AMOUNTS OF THE FORFEITURE WHICH ARE "OVER AND ABOVE" THE AMOUNT OF THE INDEBTEDNESS, AND, THEREFORE, THE BALANCE OF THE FORFEITURE DUE SHOULD BE COLLECTED FROM THE MEMBER, AND THE AMOUNT CREDITED TO THE SOLDIERS' HOME PERMANENT FUND. THE REQUIREMENT THAT ITEMS OF INDEBTEDNESS DUE THE GOVERNMENT BY MEMBERS OF THE ARMED FORCES SHOULD BE REIMBURSED TO THE GOVERNMENT BY MAKING DEDUCTIONS OF THE AMOUNT OF THE INDEBTEDNESS FROM FORFEITURES OF PAY AND ALLOWANCES OR FINES IMPOSED BY COURTS-MARTIAL SENTENCES BEFORE TRANSFER OF THE FORFEITURES OR FINES TO THE SOLDIERS' HOME PERMANENT FUND, PURSUANT TO 24 U.S.C. 44, FOR THE SUPPORT OF THE HOME, HAS NO APPLICATION TO ANY INDEBTEDNESS WHICH ACCRUES OR IS INCURRED AFTER THE COURTS-MARTIAL FORFEITURE HAS BEEN EXECUTED, THEREBY AVOIDING DELAY IN TRANSFERRING THE AMOUNTS OF FORFEITURES OR FINES TO THE FUND, WHICH IN SOME INSTANCES MIGHT DEFEAT THE PURPOSE OF THE STATUTE, AND THE DEDUCTIONS OF AMOUNTS DUE FOR THE REIMBURSEMENT OF GOVERNMENT WHICH ARE REQUIRED TO BE MADE FROM FORFEITURES OR FINES APPLIES AS WELL TO AN INDEBTEDNESS DUE A GOVERNMENT INSTRUMENTALITY, AND TO ADVANCES OF PAY OR TRAVEL EXPENSES OR ALLOWANCES, BUT DOES NOT APPLY TO AN INCOME LIABILITY, PAYMENT OF WHICH DOES NOT CONSTITUTE A "REIMBURSEMENT OF GOVERNMENT.' THE COURT-MARTIAL FORFEITURES OF PAY AND ALLOWANCES IMPOSED ON ARMED FORCES MEMBERS WHICH WERE REDUCED BY AMOUNTS DUE THE GOVERNMENT BEFORE TRANSFER TO THE SOLDIERS' HOME PERMANENT FUND, PURSUANT TO 24 U.S.C. 44, NEED NOT BE ADJUSTED WHEN A DEBT IS UNCOLLECTIBLE, CANCELED, OR COLLECTION WAIVED, ABSENT A STATUTORY REQUIREMENT THAT ANY ADVANTAGE ACCRUE TO THE FUND; HOWEVER, THE SAME PRINCIPLE DOES NOT APPLY TO ERRONEOUS PAYMENTS AND, THEREFORE, ERRONEOUS PAYMENTS OF CLASS Q ALLOTMENTS UNDER THE DEPENDENTS ASSISTANCE ACT OF 1950, ALTHOUGH SUBSEQUENTLY WAIVED, ARE FOR ADJUSTMENT.

TO THE SECRETARY OF DEFENSE, MARCH 12, 1963:

REFERENCE IS MADE TO LETTER OF OCTOBER 4, 1962, FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER), REQUESTING A DECISION ON CERTAIN QUESTIONS ARISING IN CONNECTION WITH THE IMPLEMENTATION OF OUR DECISION OF MAY 28, 1959, 38 COMP. GEN. 796, RELATING TO THE TRANSFER OF AMOUNTS REPRESENTING FORFEITURES OF PAY AND ALLOWANCES OR FINES IMPOSED BY COURTS- MARTIAL SENTENCES AGAINST MEMBERS OF THE ARMED FORCES TO THE SOLDIERS' HOME PERMANENT FUND PURSUANT TO 24 U.S.C. 44.

THE QUESTIONS FOR DECISION ARE SET FORTH AND DISCUSSED IN COMMITTEE ACTION NO. 272 OF THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

QUESTION 1.

COMPTROLLER GENERAL DECISION B-127765/B-130036, 28 MAY 1959 (38 CG 796) GIVES AN EXAMPLE OF THE AMOUNT TO BE TRANSFERRED TO THE SOLDIERS' HOME PERMANENT FUND WHEN A COURT-MARTIAL FINE AND INDEBTEDNESS TO THE GOVERNMENT IS INVOLVED. THE DECISION DOES NOT INDICATE WHAT ACTION IS TO BE TAKEN IN CONNECTION WITH THE REMAINING $400.00 INDEBTEDNESS.

A. IS THE AMOUNT OF $400.00, WHICH IS NOT TO BE TRANSFERRED TO THE SOLDIERS' HOME PERMANENT FUND, TO BE USED TO LIQUIDATE KNOWN INDEBTEDNESS?

B. IF SO, IS THE AMOUNT OF $400.00 INDEBTEDNESS STATED IN THE EXAMPLE TO BE COLLECTED FROM AN ENLISTED MEMBER OF THE ARMY OR AIR FORCE?

C. IF THE ANSWER TO QUESTION "B" IS IN THE AFFIRMATIVE AND THE $400.00 IS COLLECTED, WHAT APPROPRIATION SHOULD IT BE COLLECTED INTO?

IN OUR DECISION OF MAY 28, 1959, 38 COMP. GEN. 796, WE STATED THAT:

WHILE THE 1951 MANUAL (FOR COURTS-MARTIAL, UNITED STATES) CHANGED THE EFFECT OF COURT-MARTIAL FORFEITURES ON A MEMBER'S PAY AND ALLOWANCE ACCOUNT AS BETWEEN THE MEMBER AND THE GOVERNMENT, THERE WAS NO CORRESPONDING CHANGE WITH REGARD TO THE AMOUNT OF FORFEITURES TO BE TRANSFERRED TO THE SOLDIERS' HOME PERMANENT FUND.

* * * THE AMOUNT TO BE TRANSFERRED TO THE SOLDIERS' HOME PERMANENT FUND IS TO BE DETERMINED IN THE SAME MANNER IN WHICH IT WAS DETERMINED PRIOR TO THE PROMULGATION OF THE 1951 MANUAL AND OUR DECISION OF AUGUST 3, 1956, 36 COMP. GEN. 79, NOTWITHSTANDING THE FACT THAT THE AMOUNT SO TRANSFERRED MAY NOT BE THE SAME AS THE AMOUNT OF THE FORFEITURE. FOR EXAMPLE, IF THE TOTAL STATUTORY PAY AND ALLOWANCES BEFORE FORFEITURES AMOUNTS TO $1,300, CHARGES (WHICH WOULD NOT INCLUDE FORFEITURES) TOTAL $1,200 AND FORFEITURES ARE IN THE AMOUNT OF $500, AS BETWEEN THE GOVERNMENT AND THE SERVICE MEMBER, THE MEMBER WOULD BE INDEBTED IN THE AMOUNT OF $400 ($1,300 LESS $500 IN FORFEITURES LESS $1,200 INDEBTEDNESS TO THE GOVERNMENT), BUT ONLY $100 SHOULD BE TRANSFERRED TO THE SOLDIERS' HOME PERMANENT FUND ($1,300 STATUTORY PAY AND ALLOWANCES LESS CHARGES TOTALING $1,200).

THE ANSWER TO QUESTION A IS IN THE NEGATIVE. THE BALANCE OF $400 IN FORFEITURES REMAINS IN THE PAY APPROPRIATION UNTIL SUCH TIME AS THE INDEBTEDNESS IS LIQUIDATED. THE MEMBER'S STATUTORY PAY IS REDUCED BY THE AMOUNT OF THE FORFEITURE AND THIS AMOUNT IS NOT AVAILABLE FOR LIQUIDATION OF HIS INDEBTEDNESS. IT FOLLOWS THAT THE MEMBER'S INDEBTEDNESS SHOULD BE COLLECTED FROM HIM, AND THE ANSWER TO PART B OF QUESTION 1 IS IN THE AFFIRMATIVE. THE AMOUNT COLLECTED AGAINST THE INDEBTEDNESS SHOULD BE CREDITED TO THE SOLDIERS' HOME PERMANENT FUND, SINCE THAT AMOUNT WOULD HAVE BEEN CREDITED TO SUCH FUND ORIGINALLY IF THE MEMBER HAD NOT BEEN INDEBTED TO THE GOVERNMENT. QUESTION 1, PART C, IS ANSWERED ACCORDINGLY.

QUESTION 2 IS AS FOLLOWS:

2. AN ENLISTED MEMBER IS SENTENCED TO FORFEIT $50.00 PER MONTH FOR TWO MONTHS COMMENCING ON 16 MARCH. THE FINAL FORFEITURE IS COLLECTED ON 15 MAY AND THE MEMBER IS DISCHARGED 30 MAY. ON DATE OF DISCHARGE, HE LOST OR DESTROYED GOVERNMENT PROPERTY AND IT IS ADMINISTRATIVELY ASCERTAINED THAT HE IS INDEBTED IN THE AMOUNT OF $50.00. THE $50.00 REMAINS AN UNSATISFIED INDEBTEDNESS ON THE DATE OF DISCHARGE.

A. SHOULD THE $100.00 COURT-MARTIAL FORFEITURE HELD FOR TRANSFER TO THE SOLDIERS' HOME PERMANENT FUND BE REDUCED BY THE UNSATISFIED INDEBTEDNESS OF $50.00?

B. IF THE ANSWER TO QUESTION A IS IN THE NEGATIVE, WOULD THE ANSWER BE THE SAME IF ACTUAL LOSS OR DESTRUCTION OF GOVERNMENT PROPERTY OCCURRED PRIOR TO APPROVAL OF THE COURT-MARTIAL ON 16 MARCH AND THE INDEBTEDNESS IS NOT ADMINISTRATIVELY ASCERTAINED UNTIL 30 MAY?

C. IF ACTUAL LOSS OR DESTRUCTION OF GOVERNMENT PROPERTY OCCURRED ON 30 MAY AND THE $50.00 INDEBTEDNESS IS DISCOVERED AFTER DISCHARGE, SHOULD ADJUSTMENT IN THE SOLDIERS' HOME PERMANENT FUND BE MADE? THAT IS, SHOULD THE $100.00 FORFEITURES PREVIOUSLY TRANSFERRED BE ADJUSTED BY REDUCING THE AMOUNT $50.00 IF THE INDEBTEDNESS IS DECLARED UNCOLLECTIBLE?

D. IF THE ANSWER TO QUESTION C IS IN THE NEGATIVE, WOULD THE ANSWER BE THE SAME IF ACTUAL LOSS OR DESTRUCTION OF GOVERNMENT PROPERTY OCCURRED PRIOR TO APPROVAL OF THE COURT-MARTIAL ON 16 MARCH AND THE LOSS IS ACTUALLY DISCOVERED AFTER DISCHARGE.

THE ANSWER TO QUESTION 2A IS IN THE NEGATIVE. SECTION 44 OF TITLE 24, U.S. CODE, PROVIDES IN PERTINENT PART, AS FOLLOWS:

FOR THE SUPPORT OF THE SOLDIERS' HOME THE FOLLOWING FUNDS ARE SET APART AND APPROPRIATED: ALL STOPPAGES OR FINES ADJUDGED AGAINST SOLDIERS BY SENTENCE OF COURTS-MARTIAL, OVER AND ABOVE ANY AMOUNT THAT MAY BE DUE FOR THE REIMBURSEMENT OF GOVERNMENT, OR OF INDIVIDUALS; * * *

WE DO NOT VIEW THIS STATUTE AS CONTEMPLATING INDEBTEDNESSES WHICH ACCRUE OR ARE INCURRED AFTER THE COURT-MARTIAL FINES OR FORFEITURES HAVE BEEN EXECUTED. TO HOLD OTHERWISE WOULD UNDULY DELAY THE TRANSFER OF THE AMOUNTS OF FINES OR FORFEITURES, AND IN SOME INSTANCES MIGHT OPERATE TO DEFEAT THE PURPOSE OF THE STATUTE.

QUESTION 2B IS ANSWERED IN THE NEGATIVE. ALTHOUGH 10 U.S.C. 4835 AND 9835 PROVIDE THAT ACTION TAKEN ON REPORTS OF SURVEY PERTAINING TO THE LOSS OR DESTRUCTION OF GOVERNMENT PROPERTY SHALL NOT BE FINAL UNTIL APPROVED BY THE SECRETARY CONCERNED, IT IS BELIEVED PROPER TO VIEW SUCH APPROVAL AS RELATING BACK TO THE TIME OF LOSS OR DESTRUCTION AS FAR AS THE MATTER HERE INVOLVED IS CONCERNED, AND THE DEBT IS REGARDED AS COMING INTO EXISTENCE AT THAT TIME.

ON THE BASIS OF THE ANSWER TO QUESTION 2A, QUESTION 2C IS ANSWERED IN THE NEGATIVE.

QUESTION 2D IS ANSWERED IN THE NEGATIVE. SEE THE ANSWER TO QUESTION 2B.

QUESTION 3.

THE DECISION CITED IN QUESTION 1 APPEARS TO HAVE THE EFFECT OF DECREASING THE INDEBTEDNESS BY AN ADDITIONAL AMOUNT OF $400.00 AND TRANSFERRING ONLY $100.00 OF THE $500.00 FORFEITURE TO THE SOLDIERS' HOME PERMANENT FUND. SHOULD WITHHOLDING BE MADE FROM THE $400.00 FOR FEDERAL INCOME AND FICA TAXES?

THE AMOUNT OF THE INDEBTEDNESS IS IN NO WAY REDUCED OR AFFECTED BY THE AMOUNT OF THE COURT-MARTIAL FORFEITURE. IN OUR DECISION 38 COMP. GEN. 796 WE POINTED OUT THAT TWO SEPARATE AND DISTINCT MATTERS ARE INVOLVED--- ONE CONCERNING THE ENLISTED MAN'S LOSS OF ENTITLEMENT TO PAY PURSUANT TO A COURT-MARTIAL SENTENCE OF FORFEITURE AND ITS RELATION TO ITEMS OF INDEBTEDNESS TO THE GOVERNMENT IN HIS PAY ACCOUNT, AND THE OTHER MATTER CONCERNS THE ULTIMATE DISPOSITION OF THE COLLECTED FORFEITURES TO THE SOLDIERS' HOME PERMANENT FUND. THE AMOUNT OF THE INDEBTEDNESS IS NEITHER INCREASED NOR DECREASED BY THE RETENTION OF THE FORFEITURE IN THE APPROPRIATION UNTIL THE INDEBTEDNESS IS LIQUIDATED, NOR BY RELEASING TO THE SOLDIERS' HOME PERMANENT FUND ONLY THOSE AMOUNTS OF THE FORFEITURE WHICH ARE "OVER AND ABOVE" THE AMOUNT OF THE INDEBTEDNESS.

YOUR QUESTION CONCERNING WITHHOLDING FOR FEDERAL INCOME AND FICA TAXES IS A MATTER THAT CAN BE ANSWERED AUTHORITATIVELY ONLY BY THE COMMISSIONER OF INTERNAL REVENUE. HOWEVER, IN THIS CONNECTION, ATTENTION IS INVITED TO DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE ACTION NO. 142, IN WHICH THE FOLLOWING IS QUOTED FROM A LETTER DATED OCTOBER 31, 1955, OF A FORMER COMMISSIONER OF INTERNAL REVENUE:

ON THE OTHER HAND SINCE FORFEITURES OF PAY UNDER COURT-MARTIAL PROCEEDINGS ARE STATED TO DEPRIVE THE MEMBER OF WHATEVER AMOUNTS OF PAY ARE STIPULATED IN THE COURT-MARTIAL, AND SINCE THE MEMBER ACCORDINGLY DOES NOT BECOME ENTITLED TO PAY TO THE EXTENT OF THE FORFEITURES, THIS OFFICE AGREES WITH THE CONCLUSION EXPRESSED IN THE LETTER THAT SUCH AMOUNTS SHOULD NOT BE CONSIDERED SUBJECT TO LEVY.

QUESTION 4.

DOES THE TERM "ANY AMOUNT THAT MAY BE DUE FOR THE REIMBURSEMENT OF GOVERNMENT" IN 24 U.S.C. 44 APPLY TO:

A. INDEBTEDNESS TO A GOVERNMENT INSTRUMENTALITY?

B. LEVIES FOR DELINQUENT FEDERAL INCOME TAXES?

C. ADVANCES OF TRAVEL AND/OR PAY?

QUESTION 4A IS ANSWERED IN THE AFFIRMATIVE AS TO ITEMS OF INDEBTEDNESS OF A TYPE WHICH INVOLVE ,REIMBURSEMENT OF GOVERNMENT.' QUESTION 4B IS ANSWERED IN THE NEGATIVE, SINCE IT IS NOT BELIEVED THAT PAYMENT OF AN INCOME TAX LIABILITY CONSTITUTES "REIMBURSEMENT OF GOVERNMENT.' QUESTION 4C IS ANSWERED IN THE AFFIRMATIVE AS TO ADVANCES OF PAY OR TRAVEL EXPENSES OR ALLOWANCES WHICH RESULT IN AN INDEBTEDNESS TO THE GOVERNMENT.

QUESTION 5.

IT HAS BEEN ASCERTAINED THAT AN ENLISTED MEMBER OF THE ARMY OR AIR FORCE IS INDEBTED TO THE GOVERNMENT. THE MEMBER HAS APPLIED FOR REMISSION AND CANCELLATION OF THE INDEBTEDNESS. SHOULD COURT-MARTIAL FORFEITURES AS REDUCED BY THE INDEBTEDNESS AND TRANSFERRED TO THE SOLDIERS' HOME PERMANENT FUND FE ADJUSTED IF THE SECRETARY OF THE ARMY OR AIR FORCE SUBSEQUENTLY APPROVES THE APPLICATION FOR REMISSION AND CANCELLATION OF THE INDEBTEDNESS?

A. WOULD THE SAME PRINCIPLE APPLY IF (1) ERRONEOUS PAYMENTS OF ALLOWANCES BASED ON PURPORTED MARRIAGES ARE SUBSEQUENTLY VALIDATED, OR (2) ERRONEOUS PAYMENTS OF CLASS Q ALLOTMENT UNDER THE DEPENDENTS ASSISTANCE ACT OF 1950 ARE SUBSEQUENTLY WAIVED WHEN SUCH RECOVERY WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE?

A COURT-MARTIAL SENTENCE OF FORFEITURE OF PAY AND ALLOWANCES RESULTS IN NO SAVINGS TO THE GOVERNMENT, SINCE THE AMOUNT INVOLVED IS TRANSFERRED TO THE SOLDIERS' HOME PERMANENT FUND. HOWEVER, IF THE MEMBER WHOSE PAY IS FORFEITED IS INDEBTED TO THE GOVERNMENT WITH RESPECT TO A MATTER INVOLVING "REIMBURSEMENT" TO THE GOVERNMENT, 24 U.S.C. 44 REQUIRES A REDUCTION IN THE AMOUNT TO BE TRANSFERRED TO THE EXTENT OF THE UNCOLLECTED INDEBTEDNESS. IF THE DEBT SHOULD TURN OUT TO BE UNCOLLECTIBLE OR IF IT IS CANCELED OR COLLECTION IS WAIVED UNDER APPLICABLE PROVISIONS OF LAW, THERE APPEARS TO BE NO STATUTORY REQUIREMENT THAT ANY ADVANTAGE SHALL ACCRUE TO THE SOLDIERS' HOME PERMANENT FUND IN EITHER OF SUCH EVENTUALITIES. ACCORDINGLY, QUESTION 5 IS ANSWERED IN THE NEGATIVE, AND QUESTION 5A (2) IN THE AFFIRMATIVE AS TO ERRONEOUS PAYMENTS OF CLASS Q ALLOTMENTS FOR WHICH THE ENLISTED MAN CONCERNED IS LIABLE.

QUESTION 5A (1) REQUIRES NO ANSWER SINCE NO ERRONEOUS PAYMENT APPEARS TO BE INVOLVED. UNDER 37 U.S.C. 303 (1958 ED.), PAYMENTS OF ALLOWANCES BASED ON A PURPORTED MARRIAGE ARE VALID IF PROPER DETERMINATION IS MADE THAT THE MARRIAGE WAS ENTERED INTO IN GOOD FAITH ON THE PART OF THE SPOUSE IN THE UNIFORMED SERVICE. SUCH DETERMINATION DOES NOT VALIDATE AN ERRONEOUS PAYMENT, IT MERELY FURNISHES PROOF THAT THE PAYMENT WAS VALID WHEN MADE.

THERE HAVE NOW BEEN RECEIVED DRAFT COPIES OF PROPOSED CHANGES TO AR 37- 104, IMPLEMENTING 38 COMP. GEN. 796. IN VIEW OF THE ABOVE CONCLUSIONS, IT IS BELIEVED THAT THE DEPARTMENTS OF THE ARMY AND AIR FORCE MAY WISH TO REVIEW AND ADJUST THE PROPOSED CHANGES IN THE LIGHT OF THIS DECISION.