B-174692, FEB 14, 1972

B-174692, FEB 14, 1972

CIVILIAN EMPLOYEES - RELOCATION - OVERPAYMENT CONCERNING OVERPAYMENT OF RELOCATION EXPENSES TO JANE MOODY AND SAMUEL E. MILLER, FORMER EMPLOYEES OF THE OFFICE OF ECONOMIC OPPORTUNITY. REIMBURSEMENT OF EXTRAORDINARY ADVERTISING EXPENSES TO MISS MOODY WAS IMPROPER UNDER SECTION 4.2B OF BUREAU OF THE BUDGET CIRCULAR NO. A-56, SINCE CLAIMANT HAD PREVIOUSLY BEEN ALLOWED REIMBURSEMENT OF A BROKER'S COMMISSION. 46 COMP. GEN. 812 (1967). REIMBURSEMENT TO MR. MILLER FOR INTEREST ON A LOAN, REAL PROPERTY TAX PAYABLE DURING THE ESCROW PERIOD, MORTGAGE PAYMENTS, AND TRAVEL EXPENSES INCURRED BY HIS 21-YEAR-OLD DAUGHTER IS EXPRESSLY PROHIBITED UNDER APPLICABLE PROVISIONS OF CIRCULAR NO. A-56. CLAIMANT MAY BE ALLOWED REIMBURSEMENT FOR TITLE INSURANCE PROTECTION AND AUTHORIZED HOUSE-HUNTING EXPENSES, AND THE AMOUNT OF HIS INDEBTEDNESS SHOULD BE ADJUSTED ACCORDINGLY. THE INDEBTEDNESS OF BOTH EMPLOYEES IS NOT SUBJECT TO WAIVER UNDER 5 U.S.C. 5584 OR COMPROMISE UNDER 31 U.S.C. 951-953, AND SHOULD BE COLLECTED IN AN APPROPRIATE MANNER.

TO MR. JAMES L. NELLIGAN:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 6, 1971, WITH ENCLOSURES, CONCERNING INFORMAL INQUIRIES ISSUED BY OUR OFFICE WITH RESPECT TO OVERPAYMENTS OF REAL ESTATE AND OTHER RELOCATION EXPENSES IN THE CASES OF TWO FORMER EMPLOYEES OF THE OFFICE OF ECONOMIC OPPORTUNITY - MISS JANE MOODY AND MR. SAMUEL E. MILLER. YOU HAVE STATED THAT THE EMPLOYEES HAVE REQUESTED OUR REVIEW OF THE MATTER, AND YOU WISH TO BE INFORMED ON WHAT BASIS, IF ANY, THE EMPLOYEES CAN BE RELIEVED OF THE OBLIGATION TO REFUND THE AMOUNTS IN QUESTION.

THE ERRONEOUS PAYMENT IN MISS MOODY'S CASE AMOUNTED TO $724.13 FOR EXTRAORDINARY EXPENSES OF ADVERTISING. SHE WAS ALLOWED REIMBURSEMENT OF A BROKER'S COMMISSION FOR THE SALE OF HER RESIDENCE AT THE OLD DUTY STATION BUT CLAIMED THE ADDITIONAL AMOUNT FOR ADDITIONAL ADVERTISING. SECTION 4.2B OF BUREAU OF THE BUDGET CIRCULAR NO. A-56, REVISED OCTOBER 12, 1966, PROVIDES GENERALLY THAT ADVERTISING EXPENSES ARE REIMBURSABLE IF THE EMPLOYEE HAS NOT PAID FOR SAME IN THE FORM OF A BROKER'S FEE OR COMMISSION. UNDER THAT SECTION NO REIMBURSEMENT IS PERMITTED FOR SEPARATE ADVERTISING WHEN THE EMPLOYEE IS REIMBURSED FOR ADVERTISING COSTS AS PART OF THE REALTOR'S FEE OR COMMISSION. 46 COMP. GEN. 812 (1967). THE RECORD INDICATES THAT IN THIS CASE THE REALTOR'S COMMISSION INCLUDED THE NORMAL COST FOR ADVERTISING AND RELATED SELLING EXPENSES. THE GOVERNMENTAL AGENCY REGULATING REALTORS IN THE VICINITY OF MISS MOODY'S OLD RESIDENCE ALSO REPORTED THAT THE USUAL COMMISSION WOULD CUSTOMARILY INCLUDE THE COST OF ADVERTISING.

THE CITED DECISION HAS BEEN CONSISTENTLY FOLLOWED BY OUR OFFICE EXCEPT WHERE A LISTING AGREEMENT SPECIFICALLY PROVIDED THAT THE SELLER WAS OBLIGATED TO PAY COSTS OF ADVERTISING WHICH WERE EXPRESSLY EXCLUDED FROM THE BROKER'S COMMISSION. SEE B-160799, OCTOBER 15, 1970, COPY ENCLOSED. THE LISTING AGREEMENT IN MISS MOODY'S CASE APPARENTLY DID NOT INCLUDE SUCH A PROVISION, AND BY HER OWN STATEMENT THE EXTENSIVE ADVERTISING OCCURRED TO EXPEDITE THE SALE OF THE RESIDENCE AND THEREBY ALLEVIATE HER "SERIOUS FINANCIAL STRAITS" IN MAKING PAYMENTS ON MORTGAGES AT BOTH THE NEW AND OLD RESIDENCES. WHILE WE APPRECIATE THE ALLEGED HARDSHIP, WE FIND NO LEGAL BASIS TO ALLOW THE EXPENSES IN QUESTION AND MUST CONCLUDE THAT REFUND OF THE FULL AMOUNT ($724.13) IS REQUIRED.

THE INFORMAL INQUIRY IN MR. SAMUEL E. MILLER'S CASE QUESTIONED SEVEN SPECIFIC ITEMS OF REIMBURSEMENT AGGREGATING $1,229.79 AND CONNECTED WITH HIS PERMANENT CHANGE OF STATION FROM LOS ANGELES, CALIFORNIA, TO SAN FRANCISCO, CALIFORNIA. THE PERSONNEL ACTION EFFECTING THE OFFICIAL CHANGE OF STATION WAS DATED APRIL 17, 1968, TO BE EFFECTIVE ON MAY 19, 1968. PROVIDED THAT "PAYMENT OF TRAVEL EXPENSES OF THE EMPLOYEE AND HIS DEPENDENTS AND MOVEMENT OF HOUSEHOLD GOODS IS AUTHORIZED AS ADVANTAGEOUS TO THE GOVERNMENT." RELOCATION EXPENSES WERE AUTHORIZED BY TRAVEL AUTHORIZATION NO. P9G2293 DATED MAY 23, 1969. THE TRAVEL VOUCHER PRESENTING A CLAIM BASED ON THE ABOVE AUTHORIZATION WAS PAID ON SEPTEMBER 11, 1969, IN THE AMOUNT OF $2,651.48.

BELOW IS A DISCUSSION OF EACH OF THE QUESTIONED ITEMS. THE FIRST FIVE ITEMS CONCERN REIMBURSEMENT OF EXPENSES INCIDENT TO THE SALE OF MR. MILLER'S RESIDENCE AT HIS OLD STATION.

ITEM 1 - $119.45:

OUR REVIEW OF THIS ITEM SUPPORTS THE EXPLANATION CONTAINED IN THE INFORMAL INQUIRY THAT IT IS A DUPLICATE PAYMENT FOR EXPENSES THAT WERE PRESENTED TWICE ON THE CLAIM VOUCHER. ITEM 1 IS TO BE RECOVERED FROM THE EMPLOYEE.

ITEM 2 - $77.55:

THIS ITEM IS REPRESENTED ON THE ABOVE-CITED SETTLEMENT STATEMENT PREPARED BY INVESTORS ESCROW CO. AS INTEREST CHARGES ON THE "TRUST DEED NOTE" DURING THE ESCROW PERIOD BEFORE THE FINAL SETTLEMENT AND CLOSING ON THE EMPLOYEE'S RESIDENCE. SECTION 4.2D OF CIRCULAR NO. A-56 EXPRESSLY PROHIBITS REIMBURSEMENT OF INTEREST ON LOANS AT EITHER THE OLD OR NEW DUTY STATION. MOREOVER, SUCH EXPENSE MAY NOT BE REIMBURSED UNDER ANY OTHER PROVISION OF CIRCULAR NO. A-56. SEE B-161959, AUGUST 10, 1967, COPY ENCLOSED. ITEM 2 WAS PAID CONTRARY TO APPLICABLE PROVISIONS OF GOVERNING REGULATIONS AND IS TO BE RECOVERED FROM THE EMPLOYEE.

ITEM 3 - $224.50:

THIS AMOUNT IS REPORTED ON THE SETTLEMENT STATEMENT AS A "TITLE POLICY CHARGE ATA" PAID BY THE SELLER OF RESIDENTIAL REAL ESTATE IN LOS ANGELES. WE HAVE HAD PRIOR OCCASION FOR INQUIRY AS TO THE CUSTOMARY PRACTICES RESPECTING ACQUISITION OF TITLE INSURANCE PROTECTION IN THE LOS ANGELES AREA. SELLERS IN LOS ANGELES ARE GENERALLY REQUIRED TO PURCHASE SUCH INSURANCE AS A METHOD OF FURNISHING MARKETABLE TITLE IN LIEU OF OTHER FORMS OF TITLE SEARCH AND LEGAL OPINION. SEE B-161459, OCTOBER 21, 1970, COPY ENCLOSED. ACCORDINGLY, WE CONCLUDE THAT THIS AMOUNT WAS PROPERLY ALLOWED AND NEED NOT BE RECOVERED FROM THE EMPLOYEE.

ITEM 4 - $196.27:

THIS ITEM WAS PRESENTED ON THE VOUCHER AS A SALES, TRANSFER, OR MORTGAGE TAX. IT IS DESCRIBED BY CLAIMANT AS "A PRO-RATED SHARE OF TAXES IN THE AMOUNT OF $477.42 PAID DURING THE PERIOD OF ESCROW," WITH REFERENCE BEING MADE TO THE SETTLEMENT STATEMENT CITED ABOVE. WHILE THE EXPLANATION IS SOMEWHAT VAGUE, IT SEEMS QUITE CLEAR THAT THE TAX AT ISSUE IS IN THE NATURE OF A REAL PROPERTY TAX, SOME PORTION OF WHICH THE EMPLOYEE WAS REQUIRED TO PAY DURING THE ESCROW PERIOD. AS SUCH IT MAY NOT BE REIMBURSED IN VIEW OF EXPRESS PROHIBITORY LANGUAGE IN SECTION 4.2D OF CIRCULAR NO. A-56. THIS AMOUNT WAS IMPROPERLY ALLOWED AND IS FOR RECOVERY FROM THE EMPLOYEE.

ITEM 5 - $468.30:

THIS AMOUNT REPRESENTS MORTGAGE PAYMENTS WHILE PROPERTY WAS IN ESCROW AND WAS CLAIMED AS AN INCIDENTAL EXPENSE OF THE REAL ESTATE TRANSACTION UNDER AUTHORITY OF SECTION 4.2G WHICH GENERALLY PROVIDES FOR THE REIMBURSEMENT OF INCIDENTAL CHARGES MADE FOR SERVICES REQUIRED IN BUYING AND SELLING DWELLINGS. A MORTGAGE PAYMENT CONSISTING OF AMOUNTS FOR PRINCIPAL AND INTEREST, EVEN THOUGH PAID DURING AN ESCROW PERIOD, IS NOT AN EXPENSE INCIDENTAL TO THE SALE OF THE PROPERTY. RATHER, IT IS BOTH A CONTRIBUTION TO THE SELLER'S EQUITY, WHICH ACCRUES TO HIS BENEFIT AT THE TIME OF SETTLEMENT, AND A PAYMENT OF INTEREST WHICH IS EXPRESSLY NONREIMBURSABLE AS DISCUSSED ABOVE. THEREFORE, THIS AMOUNT IS TO BE RECOVERED FROM THE EMPLOYEE. SEE 46 COMP. GEN. 677 (1967).

ITEM 6 - $126.36:

THIS AMOUNT WAS CLAIMED AS EXPENSES OF AN ADVANCE HOUSE-HUNTING TRIP PERFORMED BY THE EMPLOYEE AND HIS WIFE FOR 3 1/2 DAYS BETWEEN AUGUST 9 AND 12, 1968. IT IS NOTED THAT THE EMPLOYEE ASSUMED HIS DUTY AT THE NEW DUTY STATION ON MAY 20, 1968, AND THAT THE FAMILY MOVE TO SUCH LOCATION WAS ACCOMPLISHED ON DECEMBER 27 AND 28, 1968. AT THE TIME OF THE HOUSE- HUNTING TRIP THE EMPLOYEE APPARENTLY HAD BEEN LIVING AT HIS PERMANENT DUTY STATION FOR NEARLY 3 MONTHS; THEREFORE, HE IS NOT ENTITLED TO PER DIEM DURING THE PERIOD THAT HIS WIFE TRAVELED TO THE AREA FOR THE PURPOSE OF ACCOMPANYING HIM IN A SEARCH FOR SUITABLE HOUSING AND THE AMOUNT OF SUCH PER DIEM SHOULD BE RECOVERED. HOWEVER, THE COST OF A HOUSE-HUNTING TRIP MADE BY AN EMPLOYEE'S SPOUSE IS NOT PRECLUDED MERELY BECAUSE THE TRAVEL WAS PERFORMED AFTER THE EMPLOYEE HAD TRANSFERRED IF SUCH TRIP WAS AUTHORIZED AND TRAVEL WAS PERFORMED PRIOR TO THE FAMILY'S MOVE TO THE NEW OFFICIAL STATION. IN THE INSTANT CASE REIMBURSEMENT FOR THE WIFE'S TRAVEL MAY NOT BE ALLOWED ON THE PRESENT RECORD SINCE SUCH TRAVEL WAS NOT AUTHORIZED. HOWEVER, SHOULD A DETERMINATION BY AN APPROPRIATE AGENCY OFFICIAL BE MADE THAT AUTHORIZATION HAD BEEN MADE AND ERRONEOUSLY OMITTED FROM THE TRAVEL AUTHORIZATION, WE WOULD HAVE NO OBJECTION TO ALLOWANCE OF THE WIFE'S TRAVEL EXPENSES.

ITEM 7 - $17.36:

THIS AMOUNT REPRESENTS AN EXCESSIVE ALLOWANCE OF MILEAGE AND PER DIEM FOR THE RELOCATION TRAVEL OF THE EMPLOYEE'S 21-YEAR-OLD DAUGHTER WHO WAS A MEMBER OF HIS HOUSEHOLD. MILEAGE AND PER DIEM RATES ARE PAYABLE ONLY IN CONNECTION WITH TRAVEL PERFORMED BY A MEMBER OF THE "IMMEDIATE FAMILY." SEE SECTION 2.3 OF CIRCULAR NO. A-56. THIS TERM, AS DEFINED IN SECTION 1.2D OF THE CIRCULAR, INCLUDES ONLY UNMARRIED CHILDREN "UNDER TWENTY-ONE YEARS OF AGE OR PHYSICALLY OR MENTALLY INCAPABLE OF SUPPORTING THEMSELVES REGARDLESS OF AGE." SINCE THE RECORD REVEALS THAT THE DAUGHTER WAS 21, THE SUBJECT AMOUNT WAS IMPROPERLY ALLOWED UNLESS THERE IS OTHER EVIDENCE TO ESTABLISH THAT SHE WAS PHYSICALLY OR MENTALLY INCAPABLE OF SUPPORTING HERSELF. ACCORDINGLY, THIS ITEM IS TO BE RECOVERED FROM THE EMPLOYEE.

IN SUMMARY, THE ADJUSTMENTS DISCUSSED IN ITEMS 3 AND 6 WOULD RESULT IN THE REDUCTION OF MR. MILLER'S INDEBTEDNESS TO $1,005.29 ON THE PRESENT RECORD. THIS AMOUNT SHOULD BE COLLECTED FROM THE EMPLOYEE IN AN APPROPRIATE MANNER.

SINCE IT IS WELL ESTABLISHED THAT NO ADMINISTRATIVE OFFICIAL CAN ENLARGE RIGHTS GRANTED BY STATUTE AND REGULATION BY MISINFORMING PERSONS OF THEIR ENTITLEMENT THEREUNDER, WE MUST CONCLUDE THAT THE AMOUNTS QUESTIONED IN OUR AUDIT MUST BE REFUNDED WITH THE EXCEPTIONS NOTED IN THE FOREGOING DISCUSSION. IN ADDITION, THERE IS NO AUTHORITY IN LAW FOR WAIVER OF THE ERRONEOUS OVERPAYMENTS UNDER CONSIDERATION HERE SINCE THEY CANNOT BE CONSTRUED AS OVERPAYMENTS OF PAY WITHIN THE MEANING OF THE WAIVER STATUTE (5 U.S.C. 5584). NOR ARE WE AWARE OF ANY BASIS FOR COMPROMISE OF EITHER OF THESE CLAIMS OR FOR TERMINATION (OR SUSPENSION) OF COLLECTION ACTION UNDER THE FEDERAL CLAIMS COLLECTION ACT OF 1966, 31 U.S.C. 951-953. THE ENCLOSURES FORWARDED WITH YOUR LETTER ARE RETURNED HEREWITH.