B-153637, MAY 28, 1964

B-153637: May 28, 1964

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE SECRETARY OF DEFENSE: REFERENCE IS MADE TO LETTER DATED FEBRUARY 26. WERE ACCUMULATED FROM OR THE UNDELIVERED BONDS WERE PURCHASED FROM: "/1) HIS CURRENT PAY? "/2) HIS FINAL PAY? "B. THE INDEBTEDNESS OF A COMMISSIONED OR ENLISTED MEMBER OF ANY OF THE MILITARY SERVICES WAS INCURRED BECAUSE OF AN ERRONEOUS PAYMENT AND THE BOND DEDUCTIONS WERE ACCUMULATED FROM OR THE UNDELIVERED BONDS WERE PURCHASED FROM: "/1) HIS CURRENT PAY? "/2) HIS FINAL PAY? "C. THE INDEBTEDNESS OF A COMMISSIONED OFFICER OF ANY OF THE MILITARY SERVICES OR AN ENLISTED MEMBER OF THE NAVY OR MARINE CORPS WAS INCURRED BECAUSE OF EMBEZZLEMENT OF FUNDS FOR WHICH HE IS NOT ACCOUNTABLE OR BECAUSE HE WILFULLY OR NEGLIGENTLY DAMAGED GOVERNMENT PROPERTY AND THE BOND DEDUCTIONS WERE ACCUMULATED FROM OR THE UNDELIVERED BONDS WERE PURCHASED FROM: "/1) HIS CURRENT PAY? "/2) HIS FINAL PAY?

B-153637, MAY 28, 1964

TO THE SECRETARY OF DEFENSE:

REFERENCE IS MADE TO LETTER DATED FEBRUARY 26, 1964, FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER), REQUESTING A DECISION WHETHER DEDUCTIONS MADE FROM THE PAY OF MILITARY PERSONNEL FOR THE PURCHASE OF UNITED STATES SAVINGS BONDS, AS WELL AS UNDELIVERED SAVINGS BONDS, MAY BE APPLIED, WITHOUT THE MEMBER'S CONSENT, TO LIQUIDATE AN INDEBTEDNESS TO THE GOVERNMENT UPON SEPARATION FROM THE SERVICE, UNDER THE CIRCUMSTANCES OUTLINED IN COMMITTEE ACTION NO. 340 OF THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE, AS FOLLOWS:

"A. THE INDEBTEDNESS OF AN ENLISTED MEMBER OF THE ARMY OR AIR FORCE HAS BEEN ADMINISTRATIVELY DETERMINED UNDER SECTION 1007 (C) OF TITLE 37, U.S.C. AND THE BOND DEDUCTIONS, WERE ACCUMULATED FROM OR THE UNDELIVERED BONDS WERE PURCHASED FROM:

"/1) HIS CURRENT PAY?

"/2) HIS FINAL PAY?

"B. THE INDEBTEDNESS OF A COMMISSIONED OR ENLISTED MEMBER OF ANY OF THE MILITARY SERVICES WAS INCURRED BECAUSE OF AN ERRONEOUS PAYMENT AND THE BOND DEDUCTIONS WERE ACCUMULATED FROM OR THE UNDELIVERED BONDS WERE PURCHASED FROM:

"/1) HIS CURRENT PAY?

"/2) HIS FINAL PAY?

"C. THE INDEBTEDNESS OF A COMMISSIONED OFFICER OF ANY OF THE MILITARY SERVICES OR AN ENLISTED MEMBER OF THE NAVY OR MARINE CORPS WAS INCURRED BECAUSE OF EMBEZZLEMENT OF FUNDS FOR WHICH HE IS NOT ACCOUNTABLE OR BECAUSE HE WILFULLY OR NEGLIGENTLY DAMAGED GOVERNMENT PROPERTY AND THE BOND DEDUCTIONS WERE ACCUMULATED FROM OR THE UNDELIVERED BONDS WERE PURCHASED FROM:

"/1) HIS CURRENT PAY?

"/2) HIS FINAL PAY?

AMOUNTS DEDUCTED FROM PAY FOR THE PURCHASE OF UNITED STATES SAVINGS BONDS, INCLUDING UNDELIVERED BONDS, MAY BE APPLIED TO SATISFY DEBTS DUE THE UNITED STATES UNDER THE GOVERNMENT'S GENERAL RIGHT OF SETOFF, SUBJECT TO THE SAME RULES AND LIMITATIONS APPLICABLE TO PAY GENERALLY. SEE 23 COMP. GEN. 850, 24 COMP. GEN. 334, AND 33 COMP. GEN. 443.

IN DECISION OF AUGUST 30, 1949, 29 COMP. GEN. 99, IT WAS HELD THAT IN VIEW OF THE LONG STANDING AND CONSISTENT INTERPRETATION OF THE APPLICABLE COURT DECISIONS, THERE APPEARS TO BE NO PROPER BASIS TO SET OFF GENERAL DEBTS DUE THE UNITED STATES BY ITS CIVILIAN EMPLOYEES AGAINST THEIR ,CURRENT COMPENSATION," WITHOUT THEIR CONSENT, IN THE ABSENCE OF STATUTORY AUTHORITY FOR SUCH ACTION. HOWEVER, IT WAS POINTED OUT IN THAT DECISION THAT "THE PROHIBITION AGAINST SUCH SET OFF ACTION CONSISTENTLY HAS BEEN HELD NOT TO APPLY TO FINAL SALARY PAYMENTS IN THE EVENT THE EMPLOYEES ARE SEPARATED FROM THE FEDERAL SERVICE.' ALSO SEE 26 COMP. GEN. 907.

THE ACT OF JULY 15, 1954, CH. 509, 68 STAT. 482, 5 U.S.C. 46D, PROVIDES IN PERTINENT PART THAT WHEN IT IS DETERMINED BY THE SECRETARY OF THE DEPARTMENT CONCERNED, OR ONE OF HIS DESIGNEES, THAT AN EMPLOYEE OF THE UNITED STATES OR ANY MEMBER OF THE ARMY, NAVY, AIR FORCE OR MARINE CORPS, OR A RESERVE COMPONENT THEREOF, IS INDEBTED TO THE UNITED STATES AS A RESULT OF ANY ERRONEOUS PAYMENT MADE BY THE DEPARTMENT CONCERNED TO OR ON BEHALF OF SUCH PERSON, THE AMOUNT OF SUCH INDEBTEDNESS MAY BE COLLECTED IN REASONABLE AMOUNTS FROM THE CURRENT PAY ACCOUNT OF SUCH PERSON. IT IS ASSUMED THAT THE INDEBTEDNESS MENTIONED IN QUESTION B COMES WITHIN THE PURVIEW OF THAT ACT AND, INSOFAR AS CURRENT PAY IS CONCERNED, THAT THE APPROPRIATE SECRETARY, OR HIS DESIGNEE HAS DETERMINED THAT THE MEMBER INVOLVED IS INDEBTED. UNDER THE PROVISIONS OF 37 U.S.C. 1007 (C) AND (D), THE AMOUNT THAT AN ENLISTED MAN OF THE ARMY OR THE AIR FORCE IS ADMINISTRATIVELY DETERMINED TO OWE THE UNITED STATES GOVERNMENT OR ANY OF ITS INSTRUMENTALITIES (THE SITUATION DESCRIBED IN QUESTION A) MAY BE DEDUCTED FROM EITHER HIS CURRENT OR FINAL PAY. IN VIEW OF THOSE STATUTORY PROVISIONS AND THE DECISIONS MENTIONED ABOVE, QUESTIONSA (1) AND (2) AND B (1) AND (2) ARE ANSWERED IN THE AFFIRMATIVE, SUBJECT, OF COURSE, TO THE LIMITATIONS STATED IN THE STATUTE INVOLVED.

THERE WOULD APPEAR TO BE NO SUBSTANTIAL LEGAL BASIS FOR DISTINCTION WITH RESPECT TO THE GOVERNMENT'S RIGHT OF SETOFF BETWEEN CASES WHERE THE TOTAL AMOUNT OF DEDUCTIONS FOR THE PURCHASE OF A BOND IS LESS THAN THE PURCHASE PRICE OF A BOND AND CASES WHERE SUCH DEDUCTIONS ARE EQUAL TO THE COST OF A BOND.

CONCERNING QUESTION C, WHEN A COMMISSIONED OFFICER OF ANY OF THE ARMED FORCES OR AN ENLISTED MEMBER OF THE NAVY OR MARINE CORPS HAS BEEN ADMINISTRATIVELY DETERMINED TO BE INDEBTED TO THE UNITED STATES BECAUSE OF EMBEZZLEMENT OR DAMAGE TO PROPERTY AS INDICATED IN THAT QUESTION, THE PAYMENT TO SUCH MEMBER OF FINAL PAY ACCUMULATED AS OF THE DATE OF HIS SEPARATION FROM THE SERVICE, INCLUDING AN AMOUNT THEREOF APPLIED TOWARD THE PURCHASE OF A BOND, NOTWITHSTANDING HIS DEBT, WOULD NOT APPEAR TO BE REQUIRED AND SUCH AN AMOUNT WOULD BE AVAILABLE FOR SETOFF. HOWEVER, NEITHER BOND DEDUCTIONS MADE FROM CURRENT PAY NOR AN UNDELIVERED BOND PURCHASED WITH SUCH DEDUCTIONS WOULD BE AVAILABLE FOR APPLICATION TOWARD LIQUIDATION OF THE MEMBER'S INDEBTEDNESS, WITHOUT HIS CONSENT, IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY FOR WITHHOLDING THE CURRENT PAY OF THE DEBTOR. SEE 33 COMP. GEN. 443 AND 37 COMP. GEN. 353.