B-164043, MAY 28, 1968

B-164043, MAY 28, 1968

TO MR. R. P. HOGAN:

YOUR LETTER OF APRIL 12, 1968, REFERENCE AD571X12, ENCLOSING RECLAIM VOUCHERS FOR $1,080, $1,081.13 AND $49.15, IN FAVOR OF ROBERT W. MCCASLIN, AN EMPLOYEE OF YOUR AGENCY, REQUESTS OUR DECISION WHETHER THE VOUCHERS MAY BE CERTIFIED FOR PAYMENT.

THE VOUCHERS COVER EXPENSES INCURRED BY THE EMPLOYEE IN SELLING HIS RESIDENCE IN MIAMI, FLORIDA, INCIDENT TO HIS TRANSFER TO SILVER SPRING, MARYLAND, UNDER ORDERS OF AUGUST 3, 1967. AT THE TIME HE WAS TRANSFERRED THE EMPLOYEE WAS LOCATED AT TALLAHASSEE, FLORIDA, ATTENDING A FULL-TIME UNIVERSITY ASSIGNMENT UNDER ORDERS OF AUGUST 26, 1966, DIRECTING HIS RETURN TO MIAMI UPON COMPLETION OF HIS TRAINING. HE AND HIS IMMEDIATE FAMILY TRAVELED FROM TALLAHASSEE TO MARYLAND; ALSO, THE EMPLOYEE'S HOUSEHOLD GOODS WERE TRANSPORTED BETWEEN THOSE LOCALITIES. SINCE THE DWELLING SOLD WAS NOT ACTUALLY OCCUPIED BY THE EMPLOYEE AT THE TIME HE WAS TRANSFERRED, YOU DOUBT WHETHER CERTIFICATION IS PROPER.

SECTION 23 (4) OF THE ADMINISTRATIVE EXPENSES ACT OF 1946, AS ADDED BY SECTION 2 OF PUBLIC LAW 89-516, 80 STAT. 323, PROVIDES FOR THE REIMBURSEMENT OF THE EXPENSES OF THE SALE OF THE RESIDENCE OF A TRANSFERRED EMPLOYEE AT THE OLD STATION. SUBSECTION 4.1C OF BUREAU OF THE BUDGET CIRCULAR NO. A-56, REVISED OCTOBER 12, 1966, PROVIDES AS FOLLOWS:

"4.1 CONDITIONS AND REQUIREMENTS UNDER WHICH ALLOWANCES MAY BE PAID. THE EXTENT ALLOWABLE UNDER THIS PROVISION, THE GOVERNMENT WILL REIMBURSE AN EMPLOYEE FOR EXPENSES REQUIRED TO BE PAID BY HIM IN CONNECTION WITH THE SALE OF ONE RESIDENCE AT HIS OLD OFFICIAL STATION; PURCHASE OF ONE DWELLING AT HIS NEW OFFICIAL STATION; OR THE SETTLEMENT OF AN UNEXPIRED LEASE AT HIS PLACE OF RESIDENCE AT THE OLD OFFICIAL STATION; PROVIDED THAT:

"C. THE DWELLING AT THE OLD OFFICIAL STATION WAS THE EMPLOYEE'S ACTUAL RESIDENCE AT THE TIME HE WAS FIRST DEFINITELY INFORMED THAT HE IS TO BE TRANSFERRED TO THE NEW OFFICIAL STATION.'

THE EMPLOYEE'S TRAINING ASSIGNMENT, ALTHOUGH ALMOST A YEAR IN LENGTH, DID NOT EFFECT A CHANGE OF STATION. SEE B-162756, FEBRUARY 5, 1968. BELIEVE IT REASONABLE TO ASSUME THAT THE EMPLOYEE WOULD HAVE BEEN LIVING AT HIS MIAMI RESIDENCE AT THE TIME OF TRANSFER IF HIS TRAINING SITE HAD NOT BEEN 468 MILES FROM MIAMI. IN OTHER WORDS IN THE INTEREST OF THE GOVERNMENT THE EMPLOYEE AND HIS FAMILY WERE TEMPORARILY LOCATED AWAY FROM HIS ACTUAL RESIDENCE. UNDER THESE CIRCUMSTANCES WE BELIEVE IT IS REASONABLE TO HOLD THAT THE EMPLOYEE'S ACTUAL RESIDENCE REMAINED AT MIAMI. IT FOLLOWS THAT THE EXPENSES INCURRED IN THE SALE OF THE EMPLOYEE'S RESIDENCE MAY BE ALLOWED IF OTHERWISE PROPER.

THE VOUCHER FOR $1,080 COVERING A REALTOR'S COMMISSION MAY BE CERTIFIED FOR PAYMENT IN ACCORDANCE WITH THE PROVISIONS OF SUBSECTION 4.2A OF CIRCULAR NO. A-56, IF THE RATE DOES NOT EXCEED THAT USUALLY CHARGED BY BROKERS AT MIAMI.

THE VOUCHER FOR $1,081.13 MAY NOT BE CERTIFIED FOR PAYMENT. IN THAT CONNECTION, SUBSECTION 4.2D OF CIRCULAR NO. A-56 PROVIDES THAT FEES FOR LOAN APPLICATIONS AND LENDER'S LOAN ORIGINATION ARE REIMBURSABLE BUT EXCLUDES MORTGAGE DISCOUNTS ("POINTS"). THE ITEM OF $1,081.13 IS SHOWN ON THE CLOSING STATEMENT AS A MORTGAGE DISCOUNT. SUCH A DISCOUNT IS A PART OF THE PRICE FOR THE HIRE OF MONEY, AS DISTINGUISHED FROM CHARGES MADE BY THE MORTGAGEE TO COMPENSATE FOR EXPENSES INCURRED IN ORIGINATING AND CLOSING A LOAN. 47 COMP. GEN. 213; B-162494, OCTOBER 26, 1967.

REFERRING TO THE VOUCHER FOR $49.15, WE NOTE THAT UNDER SUBSECTION 4.2D OF CIRCULAR NO. A-56 A CHARGE MADE FOR PREPAYMENT OF A MORTGAGE IN CONNECTION WITH THE SALE OF A RESIDENCE AT THE OLD OFFICIAL STATION IS REIMBURSABLE IF THE TERMS IN THE ORIGINAL CONTRACT OR MORTGAGE INSTRUMENT PROVIDE FOR SUCH A COST. THE ITEM OF $49.15, REPRESENTED BY THE EMPLOYEE AS A PENALTY FOR MORTGAGE PREPAYMENT, IS SHOWN ON THE LOAN CLOSING STATEMENT OPPOSITE THE CAPTION "IF NOTICE OF INTENTION TO PREPAY NOT FILED, ADD 30 DAYS' INTEREST.' IN THE ABSENCE OF INFORMATION AS TO THE CONTENT OF THE MORTGAGE IN RESPECT OF THE PREPAYMENT OF THE MORTGAGE AS WELL AS AN EXPLANATION AS TO WHY THE NOTICE TO PREPAY WAS NOT TIMELY GIVEN THIS ITEM MAY NOT BE CERTIFIED FOR PAYMENT.