B-174645, JAN 20, 1972

B-174645: Jan 20, 1972

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DOES NOT FEEL THAT CLAIMANT SHOULD BE PENALIZED MERELY BECAUSE THE COSTS OF SETTLEMENT WERE NOT SEPARATELY IDENTIFIED. D. PREETORIUS: THIS WILL REFER TO YOUR LETTER OF OCTOBER 6. THE SUM IN QUESTION ($200) WAS INCURRED UNDER THE FOLLOWING CIRCUMSTANCES: "3. THE PURCHASER WAS TO PAY $200.00 TOWARD THE TOTAL CLOSING COSTS. THE PROBLEM ARISES BECAUSE $228.50 OF THE TOTAL CLOSING COSTS PAID UNDER THIS ARRANGEMENT IS NOT ALLOWABLE UNDER THE JOINT TRAVEL REGULATIONS (BEING IN THE NATURE OF A FINANCE CHARGE). LEAVING A BALANCE OF $351.85 WHICH WOULD HAVE BEEN ALLOWABLE. SINCE THE $200.00 PAID BY THE PURCHASER CANNOT BE IDENTIFIED WITH RESPECT TO ANY SPECIFIC COSTS IT IS QUESTIONABLE WHETHER MR.

B-174645, JAN 20, 1972

CIVILIAN EMPLOYEE - REIMBURSEMENT - IDENTIFICATION OF SETTLEMENT COSTS DECISION ALLOWING REIMBURSEMENT OF NORMAN L. RUHL FOR EXPENSES INCURRED BY THE PURCHASE OF A NEW RESIDENCE INCIDENT TO A CHANGE OF OFFICIAL STATION. ALTHOUGH THE LENDER'S COMMISSION WOULD NOT ORDINARILY BE SUBJECT TO REIMBURSEMENT, THE COMP. GEN. DOES NOT FEEL THAT CLAIMANT SHOULD BE PENALIZED MERELY BECAUSE THE COSTS OF SETTLEMENT WERE NOT SEPARATELY IDENTIFIED. ACCORDINGLY, THE VOUCHER MAY BE CERTIFIED FOR PAYMENT.

TO MAJOR C. D. PREETORIUS:

THIS WILL REFER TO YOUR LETTER OF OCTOBER 6, 1971, REFERENCE DSASC-MF (FORWARDED HERE UNDER DATE OF NOVEMBER 29, 1971, BY THE PER DIEM, TRAVEL AND TRANSPORTATION ALLOWANCE COMMITTEE), IN WHICH YOU REQUEST AN ADVANCE DECISION CONCERNING REIMBURSEMENT OF MR. NORMAN L. RUHL FOR CERTAIN COSTS INCURRED IN CONNECTION WITH PURCHASE OF A NEW RESIDENCE INCIDENT TO A CHANGE OF OFFICIAL STATION IN MAY 1971.

AS STATED IN PARAGRAPH 3 OF YOUR LETTER, THE SUM IN QUESTION ($200) WAS INCURRED UNDER THE FOLLOWING CIRCUMSTANCES:

"3. UNDER THE ARRANGEMENT MADE IN THE SALES CONTRACT, THE PURCHASER WAS TO PAY $200.00 TOWARD THE TOTAL CLOSING COSTS, THE BALANCE TO BE PAID BY THE SELLER. OF THE TOTAL CLOSING COST OF $580.35, THE SELLER PAID $380.35 AND MR. RHUL PAID $200.00. THE PROBLEM ARISES BECAUSE $228.50 OF THE TOTAL CLOSING COSTS PAID UNDER THIS ARRANGEMENT IS NOT ALLOWABLE UNDER THE JOINT TRAVEL REGULATIONS (BEING IN THE NATURE OF A FINANCE CHARGE), LEAVING A BALANCE OF $351.85 WHICH WOULD HAVE BEEN ALLOWABLE. SINCE THE $200.00 PAID BY THE PURCHASER CANNOT BE IDENTIFIED WITH RESPECT TO ANY SPECIFIC COSTS IT IS QUESTIONABLE WHETHER MR. RUHL IS ENTITLED TO BE PAID ALL OR ANY PART OF THE $200.00."

THE FINANCE CHARGE OF $228.50 APPEARS ON THE SETTLEMENT STATEMENT AS A LENDER'S COMMISSION WHICH WOULD NOT BE REIMBURSABLE UNDER PROVISIONS OF SUBSECTION 4.2D OF OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56 PROHIBITING PAYMENT OF ANY FEE DETERMINED TO BE A PART OF A FINANCE CHARGE BY TITLE I, PUBLIC LAW 90-321, AND SUBSECTION 226.4 OF TITLE 12, CODE OF FEDERAL REGULATIONS. IN ADDITION TO THIS ITEM, THE SETTLEMENT STATEMENT LISTS THE FOLLOWING AS COMPONENTS OF THE CLOSING COSTS: STATE AND LOCAL TAXES AND RELATED FEES, EXAMINATION OF TITLE, A MORTGAGEE TITLE INSURANCE PREMIUM AND ASSOCIATED CHARGES.

AS YOUR LETTER STATES, THE CLOSING COSTS INCURRED OTHER THAN THE LENDER'S COMMISSION ARE REIMBURSABLE UNDER PROVISIONS OF SUBSECTIONS 4.2C AND D OF CIRCULAR NO. A-56 AND AGGREGATE AN AMOUNT IN EXCESS OF THE SUM THE EMPLOYEE PAID. ASSUMING THESE ARE COSTS WHICH WOULD OTHERWISE BE CHARGEABLE TO THE PURCHASER IN THE LOCALITY OF PURCHASE, WE DO NOT BELIEVE REIMBURSEMENT SHOULD BE DENIED BECAUSE THE ITEMS TO WHICH THE EMPLOYEE'S CONTRIBUTION WAS APPLIED CANNOT BE SEPARATELY IDENTIFIED. SEE B-163701, MARCH 25, 1968, COPY ENCLOSED.

THEREFORE, THE VOUCHER WHICH IS RETURNED HEREWITH MAY BE CERTIFIED FOR PAYMENT IF OTHERWISE CORRECT.