B-169918, JUN. 22, 1970

B-169918: Jun 22, 1970

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BERNTSEN FOR REIMBURSEMENT OF ONE-HALF OF THE LOAN FEE HE WAS REQUIRED TO DEPOSIT ON APRIL 24. TO BE MADE ON THE COMPLETION OF CONSTRUCTION AND REQUIRED HIM TO DEPOSIT ONE-HALF OF THE 1.5 PERCENT LOAN FEE IN THE AMOUNT OF $172 WHICH WAS TO BE FORFEITED IF THE LOAN WAS NOT TAKEN. SETTLEMENT WAS MADE ON THE HOUSE ON AUGUST 8. THE AMOUNT OF $344.25 WAS DEDUCTED FROM HIS CLAIM FOR REIMBURSEMENT OF HOUSE PRUCHASE EXPENSES AND RECLAIM HAS BEEN MADE OF THE AMOUNT OF $172 WHICH WAS PAID PRIOR TO JULY 1. SINCE PART OF THE LOAN FEE WAS PAID ON APRIL 24. YOU ASK WHETHER THE FACT THAT THE FEE WAS SUBJECT TO FORFEITURE IF THE LOAN WAS NOT TAKEN WOULD HAVE A BEARING ON REIMBURSEMENT. WE HAVE HELD THAT THE DATE EXPENSES ARE INCURRED IS CONTROLLING IN MOST INSTANCES IN FIXING THE RIGHT OF EMPLOYEES TO BENEFITS PROVIDED BY 5 U.S.C. 5724A.

B-169918, JUN. 22, 1970

TO MR. WILLIAM H. MCCRUM:

YOUR LETTER DATED MAY 14, 1970, REFERENCE 6540, REQUESTS OUR DECISION AS TO THE PROPRIETY OF CERTIFYING FOR PAYMENT A RECLAIM VOUCHER IN FAVOR OF CARL M. BERNTSEN FOR REIMBURSEMENT OF ONE-HALF OF THE LOAN FEE HE WAS REQUIRED TO DEPOSIT ON APRIL 24, 1969, INCIDENT TO HIS PURCHASE OF A RESIDENCE AT HIS NEW OFFICIAL STATION, FORT COLLINS, COLORADO, UNDER TRAVEL AUTHORIZATION 16-W-85, DATED JULY 1, 1969.

THE PAPERS FORWARDED WITH THE VOUCHER SHOW THAT THE FORT COLLINS FEDERAL SAVINGS AND LOAN ASSOCIATION APPROVED A LOAN TO MR. BERNTSEN IN THE AMOUNT OF $22,950 ON APRIL 11, 1969, TO BE MADE ON THE COMPLETION OF CONSTRUCTION AND REQUIRED HIM TO DEPOSIT ONE-HALF OF THE 1.5 PERCENT LOAN FEE IN THE AMOUNT OF $172 WHICH WAS TO BE FORFEITED IF THE LOAN WAS NOT TAKEN. SETTLEMENT WAS MADE ON THE HOUSE ON AUGUST 8, 1969, AND THE CHARGES PAID BY THE BORROWER INCLUDED $172.25, THE REMAINING ONE HALF OF THE LOAN FEE. THE AMOUNT OF $344.25 WAS DEDUCTED FROM HIS CLAIM FOR REIMBURSEMENT OF HOUSE PRUCHASE EXPENSES AND RECLAIM HAS BEEN MADE OF THE AMOUNT OF $172 WHICH WAS PAID PRIOR TO JULY 1, 1969, THE EFFECTIVE DATE OF THE DELETION OF LOAN ORIGINATION FEES FROM THOSE OTHERWISE REIMBURSABLE UNDER SUBSECTION 4.2D OF BUREAU OF THE BUDGET CIRCULAR NO. A-56 BY THE AMENDMENTS CONTAINED IN ATTACHMENT A TO TRANSMITTAL MEMORANDUM NO. 5, DATED JUNE 26, 1969.

SINCE PART OF THE LOAN FEE WAS PAID ON APRIL 24, 1969, AND HAS BEEN DESCRIBED AS ONE-HALF OF THE LOAN ORIGINATION FEE, YOU ASK WHETHER THE FACT THAT THE FEE WAS SUBJECT TO FORFEITURE IF THE LOAN WAS NOT TAKEN WOULD HAVE A BEARING ON REIMBURSEMENT.

WE HAVE HELD THAT THE DATE EXPENSES ARE INCURRED IS CONTROLLING IN MOST INSTANCES IN FIXING THE RIGHT OF EMPLOYEES TO BENEFITS PROVIDED BY 5 U.S.C. 5724A. HERE, THE AMOUNT DEPOSITED WAS SUBJECT TO FORFEITURE IF THE LOAN WAS NOT MADE, PRESUMABLY AS CONSIDERATION FOR SERVICES RENDERED IN OBTAINING APPROVAL OF THE PROPOSED LOAN. IN THE CASE REFERRED TO BY YOU, B-168407, DECEMBER 22, 1969, THE FEE WAS NOT ACTUALLY PAID BY THE PURCHASER BUT BY HIS BUILDER PRIOR TO JULY 1, 1969.

OUR VIEW IS THAT SINCE MR. BERNTSEN ACTUALLY PAID THE $172 PRIOR TO JULY 1, 1969, THE PRIOR REGULATION IS CONTROLLING AND HE IS ENTITLED TO REIMBURSEMENT OF SUCH AMOUNT. ACCORDINGLY, THE VOUCHER, WHICH IS RETURNED, MAY BE CERTIFIED FOR PAYMENT.