B-167671, SEP 17, 1969

B-167671: Sep 17, 1969

Additional Materials:

Contact:

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

 

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

AN EMPLOYEE IN A SPECIAL RATE MANPOWER SHORTAGE CATEGORY WHO WAS DEMOTED AND IN RECEIPT OF A SALARY RETENTION RATE SHOULD NOT HAVE HIS SALARY RATE INCREASED UNDER SECTION 102 (B) OF THE FEDERAL EMPLOYEES SALARY ACT OF 1966. SHOULD HAVE HAD HIS SALARY RATE DETERMINED IN ACCORDANCE WITH THE ADJUSTMENT RULE IN 102 (B). RODRIGUEZ GARCIA WAS A MECHANICAL ENGINEER (UTILITIES). HE WAS IN A SPECIAL -RATE MANPOWER-SHORTAGE CATEGORY ESTABLISHED BY THE CIVIL SERVICE COMMISSION UNDER AUTHORITY OF SECTION 504 OF THE SALARY REFORM ACT OF 1962. HE WAS DEMOTED TO CONSTRUCTION INSPECTOR (GENERAL). HE WAS ENTITLED TO RECEIVE HIS BASIC PAY OF $8. SUBSEQUENTLY HIS RETAINED SALARY RATE WAS INCREASED FROM $8.

B-167671, SEP 17, 1969

CIVIL PAY - ERRONEOUS COMPENSATION PAYMENTS DECISION TO SECRETARY OF THE AIR FORCE CONCERNING SALARY OVERPAYMENT REVEALED IN OFFSITE AUDIT OF CIVILIAN PAYROLLS AT RAMEY AIR FORCE BASE. AN EMPLOYEE IN A SPECIAL RATE MANPOWER SHORTAGE CATEGORY WHO WAS DEMOTED AND IN RECEIPT OF A SALARY RETENTION RATE SHOULD NOT HAVE HIS SALARY RATE INCREASED UNDER SECTION 102 (B) OF THE FEDERAL EMPLOYEES SALARY ACT OF 1966, AND FEDERAL PERSONNEL MANUAL LETTER NO. 530-32, APPLICABLE TO EXCEPTIONS TO THE CONVERSION RULE, BUT SHOULD HAVE HAD HIS SALARY RATE DETERMINED IN ACCORDANCE WITH THE ADJUSTMENT RULE IN 102 (B). INASMUCH AS OVERPAYMENTS RESULTED FROM ADMINISTRATIVE ERROR, WAIVER ACTION UNDER PUBLIC LAW 90-616 MAY BE TAKEN.

MR. SECRETARY:

DURING OUR OFFSITE AUDIT OF CIVILIAN PAYROLLS RECEIVED FROM THE ACCOUNTING AND FINANCE OFFICE, RAMEY AIR FORCE BASE, DEPARTMENT OF THE AIR FORCE, APO NEW YORK 09845, WE QUESTIONED THE PROPRIETY OF THE SALARY RATE GIVEN TO MR. JOSE A. RODRIGUEZ GARCIA, AN EMPLOYEE OF THE BASE.

IN MARCH 1966 MR. RODRIGUEZ GARCIA WAS A MECHANICAL ENGINEER (UTILITIES), GS-830-09, STEP 4, WITH A SALARY OF $8,749 PER ANNUM. HE WAS IN A SPECIAL -RATE MANPOWER-SHORTAGE CATEGORY ESTABLISHED BY THE CIVIL SERVICE COMMISSION UNDER AUTHORITY OF SECTION 504 OF THE SALARY REFORM ACT OF 1962, 5 U.S.C. 1173 (1964 ED.). ON MARCH 21, 1966, HE WAS DEMOTED TO CONSTRUCTION INSPECTOR (GENERAL), GS-809-07, STEP 10, $8,132 PER ANNUM. UNDER THE SALARY RETENTION PROVISIONS OF 5 U.S.C. 1107 (1964 ED.) HE WAS ENTITLED TO RECEIVE HIS BASIC PAY OF $8,749 PER ANNUM (INCLUDING EACH INCREASE PROVIDED BY LAW IN SCH RATE OF COMPENSATION) FOR A PERIOD OF 2 YEARS FROM THE EFFECTIVE DATE OF THE REDUCTION IN GRADE.

THE FEDERAL EMPLOYEES SALARY ACT OF 1966, PUBLIC LAW 89-504, APPROVED JULY 18, 1966, 80 STAT. 288, PROVIDED FOR GENERAL SCHEDULE SALARY INCREASES EFFECTIVE ON OR AFTER JULY 1, 1966. AS A RESULT OF THE PAY INCREASE, THE CIVIL SERVICE COMMISSION ISSUED FEDERAL PERSONNEL MANUAL LETTER NO. 530-32, DATED JULY 28, 1966, WHICH INCREASED THE STEP 4 SALARY RATE OF THE FORMER POSITION OF MR. RODRIGUEZ GARCIA TO $9,262 PER ANNUM. SUBSEQUENTLY HIS RETAINED SALARY RATE WAS INCREASED FROM $8,749 PER ANNUM TO $9,262 PER ANNUM EFFECTIVE JULY 3, 1966. IN REPLY TO OUR INFORMAL INQUIRY THE VIEW IS EXPRESSED THAT SECTION 504 ADJUSTMENTS ARE THE RESULT OF STATUTORY INCREASES.

SECTION 102 (B) OF THE FEDERAL EMPLOYEES SALARY ACT OF 1966, PROVIDES FOR THE ADJUSTMENT OF THE RATES OF BASIC COMPENSATION OF OFFICERS AND EMPLOYEES UNDER THE GENERAL SCHEDULE EXCEPT AS PROVIDED IN SECTION 504 (D) OF THE FEDERAL SALARY REFORM ACT OF 1962 (78 STAT. 412, 5 U.S.C. 1173 (D)). THE PROVISIONS OF 5 U.S.C. 1173 (D) (1964 ED.) READ AS FOLLOWS:

"(D) INITIAL ADJUSTMENT OF BASIC COMPENSATION; CONVERSION RULES AND REGULATIONS.

"THE RATE OF BASIC COMPENSATION, ESTABLISHED UNDER THIS SECTION, AND RECEIVED BY ANY OFFICER OR EMPLOYEE IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF A STATUTORY INCREASE IN THE COMPENSATION SCHEDULES OF THE SALARY SYSTEMS SPECIFIED IN SUBSECTION (A) OF THIS SECTION SHALL BE INITIALLY ADJUSTED ON THE EFFECTIVE DATE OF SUCH NEW COMPENSATION SCHEDULES IN ACCORDANCE WITH CONVERSION RULES AND REGULATIONS PRESCRIBED BY THE PRESIDENT OR BY SUCH AGENCY OR AGENCIES AS HE MAY DESIGNATE."

5 U.S.C. 1173 (B) (1964 ED.) PROVIDES AS FOLLOWS:

"(B) REVISION OF RATES.

"WITHIN THE LIMITATIONS SPECIFIED IN SUBSECTION (A) OF THIS SECTION, RATES OF BASIC COMPENSATION ESTABLISHED UNDER SUCH SUBSECTION MAY BE REVISED FROM TIME TO TIME BY THE PRESIDENT OR BY SUCH AGENCY OR AGENCIES AS HE MAY DESIGNATE. SUCH ACTIONS OR REVISIONS SHALL HAVE THE FORCE AND EFFECT OF LAWS."

THE CIVIL SERVICE COMMISSION PROMULGATED FEDERAL PERSONNEL MANUAL LETTER NO. 530-32 IN ACCORDANCE WITH AUTHORITY DELEGATED TO IT BY EXECUTIVE ORDER NO. 11073, 28 F.R. 203 (1963) , AS AMENDED. SINCE 5 U.S.C. 1173 (B) STATES THAT "RATES OF BASIC COMPENSATION ESTABLISHED UNDER SUCH SUBSECTION MAY BE REVISED FROM TIME TO TIME ***" (UNDERSCORING SUPPLIED), WE ARE OF THE OPINION THAT THE SPECIAL SALARY RATES IN FEDERAL PERSONNEL MANUAL LETTER NO. 530-32 ARE RATES PRESCRIBED BY ADMINISTRATIVE ACTION. THE LANGUAGE IN 5 U.S.C. 1173 (B) TO THE EFFECT THAT SUCH ACTIONS OR REVISIONS SHALL HAVE THE FORCE AND EFFECT OF LAW MAY NOT BE REGARDED AS REQUIRING THAT SUCH ACTIONS BE TREATED IN THE SAME MANNER AS INCREASES DIRECTLY PROVIDED BY LAW IN THE ADSENCE OF ANY SUCH INDICATION (AND WE FIND NONE) IN THE LEGISLATIVE HISTORY OF THE ENACTMENT OR ITS PREDECESSOR (SECTION 803 OF THE CLASSIFICATION ACT OF 1949, AS AMENDED BY SECTION 104 OF PUBLIC LAW 763, APPROVED SEPTEMBER 1, 1954). ACCORDINGLY, THE RETAINED RATE OF MR. RODRIGUEZ GARCIA SHOULD NOT HAVE BEEN INCREASED ON THE BASIS OF THE RATES IN THE FEDERAL PERSONNEL MANUAL LETTER.

SINCE THE SALARY RATE OF MR. RODRIGUEZ GARCIA WAS NOT FOR DETERMINATION IN ACCORDANCE WITH THE EXCEPTION TO THE CONVERSION RULES SET FORTH IN SECTION 102 (B) OF THE FEDERAL EMPLOYEES SALARY ACT OF 1966, HIS SALARY RATE SHOULD HAVE BEEN DETERMINED IN ACCORDANCE WITH THE PERTINENT ADJUSTMENT RULE SET FORTH THEREIN. THE RECORD INDICATES THAT IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF THE ACT HE WAS RECEIVING BASIC COMPENSATION AT THE RATE OF $8,749 PER ANNUM WHICH WAS IN EXCESS OF THE MAXIMUM RATE FOR GS-7. IN SUCH A SITUATION SECTION 102 (B) OF THE ACT PROVIDES AS FOLLOWS:

"(3) IF THE OFFICER OR EMPLOYEE IS RECEIVING BASIC COMPENSATION IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF THIS SECTION AT A RATE IN EXCESS OF THE MAXIMUM RATE FOR HIS GRADE, HE SHALL RECEIVE (A) THE MAXIMUM RATE FOR HIS GRADE IN THE NEW SCHEDULE, OR (B) HIS EXISTING RATE OF BASIC COMPENSATION IF SUCH EXISTING RATE IS HIGHER."

SINCE THE MAXIMUM RATE FOR GRADE GS-7 UNDER SECTION 102 (A) OF THE ACT WAS $8,368 PER ANNUM, MR. RODRIGUEZ GARCIA SHOULD HAVE CONTINUED TO [ECEIVE $8,749 PER ANNUM UNTIL THE BEGINNING OF THE FIRST PAY PERIOD WHICH BEGAN ON OR AFTER OCTOBER 1, 1967, THE EFFECTIVE DATE OF SECTION 202 OF THE FEDERAL SALARY ACT OF 1967, PUBLIC LAW 90-206, WHICH INCREASED THE GS- 7, STEP 10, RATE TO $8,759 PER ANNUM. ACCORDINGLY, ACTION SHOULD BE TAKEN TO CORRECT THE ERRONEOUS SALARY ADJUSTMENT AND DETERMINE THE AMOUNT OF OVERPAYMENTS.

INASMUCH AS THE OVERPAYMENTS OF SALARY TO MR. RODRIGUEZ GARCIA RESULTED FROM ADMINISTRATIVE ERROR, APPROPRIATE ACTION SHOULD BE TAKEN TO INITIATE WAIVER ACTION IN ACCORDANCE WITH THE PROVISIONS OF PUBLIC LAW 90-616, APPROVED OCTOBER 21, 1968, AND THE STANDARDS ISSUED THERETO BY OUR OFFICE.