B-180377, AUG 8, 1974

B-180377: Aug 8, 1974

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EMPLOYEE WHO WAS IN PROCESS OF PURCHASING RESIDENCE AT OLD DUTY STATION AT TIME OF TRANSFER AND WHO FORFEITED PART OF DEPOSIT AS LIQUIDATED DAMAGES FOR DEFAULTING ON CONTRACT OF SALE MAY BE REIMBURSED FORFEITED DEPOSTI AS MISCELLANEOUS EXPENSE TO EXTENT AUTHORIZED BY SECTION 3.3 OF BOB CIRCULAR NO. NOTWITHSTANDING THAT HOUSE WAS NOT EMPLOYEE'S DWELLING AT THE TIME HE WAS NOTIFIED OF TRANSFER. 000 DEPOSIT WAS REFUNDED TO MR. THE $600 AMOUNT REPRESENTS ADDITIONAL COSTS OF RESELLING THE PROPERTY AND WAS PAID TO SECURE THE EMPLOYEE'S RELEASE FROM THE TERMS OF THE CONTRACT OF SALE. NOTWITHSTANDING THE $600 AMOUNT APPEARS TO HAVE BEEN FORFEITED AS THE RESULT OF A VALID LEGAL OBLIGATION. THE DWELLING FOR WHICH REIMBURSEMNT OF SELLING EXPENSES IS CLAIMED WAS THE EMPLOYEE'S RESIDENCE AT THE TIME HE WAS FIRST DEFINITELY INFORMED BY COMPETENT AUTHORITY THAT HE IS TO BE TRANSFERRED TO THE NEW OFFICIAL STATION.".

B-180377, AUG 8, 1974

EMPLOYEE WHO WAS IN PROCESS OF PURCHASING RESIDENCE AT OLD DUTY STATION AT TIME OF TRANSFER AND WHO FORFEITED PART OF DEPOSIT AS LIQUIDATED DAMAGES FOR DEFAULTING ON CONTRACT OF SALE MAY BE REIMBURSED FORFEITED DEPOSTI AS MISCELLANEOUS EXPENSE TO EXTENT AUTHORIZED BY SECTION 3.3 OF BOB CIRCULAR NO. A-56, NOTWITHSTANDING THAT HOUSE WAS NOT EMPLOYEE'S DWELLING AT THE TIME HE WAS NOTIFIED OF TRANSFER. OCCUPANCY REQUIREMENT OF SUBSECTION 4.1D OF THE CIRCULAR DOES NOT PRECLUDE PAYMENT WHERE ACTION OF GOVERNMENT IN TRANSFERRING EMPLOYEE IN ITS OWN INTEREST PRECLUDES HIS OCCUPANCY.

MARK S. SIEGLER - FORFEITED DEPOSIT AS RESIDENCE SALE EXPENSE: BY HIS LETTER OF JANUARY 3, 1974, AN AUTHORIZED CERTIFYING OFFICER FOR THE ENVIRONMENTAL PROTECTION AGENCY (EPA) HAS REQUESTED AN OPINION AS TO WHETHER THE VOUCHER IN THE AMOUNT OF $600 FOR A FORFEITED DEPOSIT SUBMITTED BY MARK S. SIEGLER MAY BE CERTIFIED FOR PAYMENT.

ON APRIL 17, 1972, MR. SIEGLER SIGNED AN AGREEMENT OF SALE AND MADE A $2,000 DEPOSIT ON A NEW HOUSE IN MT. LAUREL, NEW JERSEY, IN THE VICINITY OF HIS OLD DUTY STATION. ON MAY 23, 1972, BEFORE THE SALE COULD BE CONSUMMATED, HE RECEIVED NOTICE OF A TRANSFER TO NEW YORK CITY AND SHORTLY THEREAFTER, ON JUNE 19, 1972, EFFECTED A PERMANENT CHANGE OF STATION TO THE NEW YORK CITY OFFICE. WHEN THE BUILDER OF THE HOUSE ON WHICH HE HAD MADE A DEPOSIT IN NEW JERSY RESOLD THE HOUSE, $1,400 OF THE $2,000 DEPOSIT WAS REFUNDED TO MR. SIEGLER. HE THUS FORFEITED $600 OF HIS ORIGINAL DEPOSIT AS A RESULT OF THE CANCELLED TRANSACTION. ACCORDING TO DOCUMENTS IN THE FILE, THE $600 AMOUNT REPRESENTS ADDITIONAL COSTS OF RESELLING THE PROPERTY AND WAS PAID TO SECURE THE EMPLOYEE'S RELEASE FROM THE TERMS OF THE CONTRACT OF SALE. THE CONTRACT, WHICH CONTAINED NO PROVISION EXCUSING BUYER'S PERFORMANCE IN THE EVENT OF TRANSFER, PROVIDED FOR FORFEITURE OF THE AMOUNT OF DEPOSIT AS LIQUIDATED DAMAGES IN THE EVENT OF THE BUYER'S DEFAULT.

NOTWITHSTANDING THE $600 AMOUNT APPEARS TO HAVE BEEN FORFEITED AS THE RESULT OF A VALID LEGAL OBLIGATION, THE CERTIFYING OFFICER QUESTIONS THE PROPRIETY OF REIMBURSING MR. SIEGLER IN VIEW OF THE FACT THAT HE NEVER OCCUPIED THE RESIDENCE IN QUESTION, AND BECAUSE THE REGULATIONS DO NOT EXPRESSLY PROVIDE FOR REIMBURSEMENT OF A FORFEITED DEPOSIT. IN THIS CONNECTION THE CERTIFYING OFFICER REFERS TO THE REQUIREMENT OF SUBSECTION 4.1D OF OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR NO. A 56, REVISED, AUGUST 17, 1971, IN EFFECT AT THE DATE OF TRANSFER, THAT THE EMPLOYEE RESIDE IN THE DWELLING. THAT SUBSECTION PROVIDES:

"D. OCCUPANCY REQUIREMENTS. THE DWELLING FOR WHICH REIMBURSEMNT OF SELLING EXPENSES IS CLAIMED WAS THE EMPLOYEE'S RESIDENCE AT THE TIME HE WAS FIRST DEFINITELY INFORMED BY COMPETENT AUTHORITY THAT HE IS TO BE TRANSFERRED TO THE NEW OFFICIAL STATION."

WHILE THE LANGUAGE OF THE ABOVE-QUOTED REGULATION WOULD APPEAR TO PRECLUDE REIMBURSEMENT FOR THE EXPENSES OF SELLING A HOUSE WHICH THE EMPLOYEE NEVER OCCUPIED, WE HAVE NEVERTHELESS PERMITTED REIMBURSEMENT WHERE THE ACTION OF THE GOVERNMENT IN TRANSFERRING AN EMPLOYEE IS ITSELF RESPONSIBLE FOR THE FACT THAT THE EMPLOYEE WAS NEVER ABLE TO OCCUPY THE DWELLING. THUS, IN B-168186, NOVEMBER 24, 1969, WHERE AN EMPLOYEE WAS IN THE PROCESS OF PURCHASING A HOUSE THEN UNDER CONSTRUCTION IN THE VIRGIN ISLANDS, WHICH AT THE TIME OF HIS TRANSFER HE HAD NEVER OCCUPIED, WE HELD THAT HE COULD BE REIMBURSED FOR THE COSTS OF SELLING THAT HOUSE. ADDRESSING THE OCCUPANCY REQUIREMENT OF SUBSECTION 4.1D, ABOVE, WE THERE STATED:

"THE LITERAL LANGUAGE OF SECTION 4.1D OF CIRCULAR NO. A-56 REQUIRNG THAT THE DWELLING AT THE OLD OFFICIAL STATION BE THE EMPLOYEE'S ACTUAL RESIDENCE AT THE TIME HE WAS FIRST DEFINITELY INFORMED THAT 'E WAS TO BE TRANSFERRED TO A NEW OFFICIAL STATION WOULD APPEAR TO PRECLUDE ANY REIMBUSEMENT OF SELLING EXPENSES OF A HOUSE NOT USED AS RESIDENCE. HOWEVER, OUR VIEW IS THAT THE REGULATION WAS NOT INTENDED FOR APPLICATION IN A SITUATION SUCH AS HERE. THAT IS, WHERE THE ACTION OF THE AGENCY IN TRANSFERRING THE EMPLOYEE BACK OT THE UNITED STATES IN ITS OWN INTEREST HAS PRECLUDED THE EMPLOYEE FROM ESTABLISHING HIS RESIDENCE IN THE HOME WHEN COMPLETED. ACCORDINGLY, WE WOULD NOT OBJECT TO REIMBURSEMENT OF THE SELLING EXPENSES TO THE EXTENT THEY ARE OTHERWISE PROPER UNDER CIRCULAR NO. A-56."

WE HAVE SIMILARLY HELD IN B-162274, SEPTEMBER 11, 1967, AND IN B 168818, FEBRUARY 9, 1970.

IN B-177595, MARCH 2, 1973, WE ADDRESSED A SITUATION SIMILAR TO MR. SIEGLER'S WHERE AN EMPLOYEE ENGAGED IN PURCHASING A RESIDENCE AT HIS OLD DUTY STATION WAS UNABLE TO CONSUMMATE THE PURCHASE AND FORFEITED A $1,500 DEPOSIT HE HAD MADE. IN HOLDING THAT THE FORFEITED DEPOSIT COULD BE REIMBURSED AS A MISCELLANEOUS EXPENSE, WE THERE STATED:

"WE TURN NOW TO THAT PART OF THE CLAIM FOR REIMBUSEMENT OF THE $1,500 WHICH WAS FORFEITED UNDER PARAGRAPH 18 OF THE CONTRACT. IT WAS INDICATED IN B-170632, SEPTEMBER 10, 1970, THAT A FORFEITED DEPOSIT INCIDENT TO A TRANSACTION THAT DID NOT QUALIFY AS COMPENSABLE UNDER SUBSECTION 4.2F OF CIRCULAR NO. A-56 COULD BE REIMBURSED AS A MISCELLANEOUS EXPENSE UNDER THE PROVISIONS OF SECTION 3.1B OF THE CIRCULAR WHERE THE CAUSE OF SUCH FORFEITURE WAS THE TRANSFER. IT IS OUR VIEW THAT THE PRINCIPLE ENUNCIATED IN THAT DECISION IS FOR APPLICATION HERE. ACCORDINGLY, MR LAWLESS MAY RECIVE RECOMPENSE FOR THE $1,500 CLAIMED, UP TO THE PERMISSIBLE LIMITS OF REIMBURSEMENT UNDER SECTION 3.3B OF CIRCULAR NO. A-56, I.E., NOT TO EXCEED EQUIVALENT OF TWO WEEKS BASIC COMPENSATION. ***"

IN VIEW OF THE ABOVE-DISCUSSED DECISION, MR. SIEGLER MAY BE REIMBURSED THE $600 AMOUNT OF THE FORFEITED DEPOSIT AS A MISCELLANEOUS EXPENSE TO THE EXTENT AUTHORIZED BY SUBSECTION 3.3 OF OMB CIRCULAR NO. A-56, WHICH PROVIDES:

"3.3 ALLOWABLE AMOUNT. EMPLOYEES ELIGIBLE FOR A MISCELLANEOUS EXPENSE ALLOWANCE WILL BE PAID AN AMOUNT UNDER 3.3A OR REIMBURSED AN AMOUNT UNDER 3.3B, BUT NOT BOTH, AS FOLLOWS:

"A. ALLOWANCES IN THE FOLLOWING AMOUNTS WILL BE PAID WITHOUT SUPPORT OR OTHER DOCUMENTATION OF EXPENSES:

"(1) $100 OR THE EQUIVALENT OF ONE WEEK'S BASIC PAY, WHICHEVER IS THE LESSER AMOUNT, FOR AN EMPLOYEE WITHOUT IMMEDIATE FAMILY.

"(2) $200 OR THE EQUIVALENT OF TWO WEEKS' BASIC PAY, WHICHEVER IS THE LESSER AMOUNT, FOR AN EMPLOYEE WITH IMMEDIATE FAMILY.

"B. ALLOWANCES IN EXCESS OF THOSE PROVIDED IN 3.3A, ABOVE, MAY BE AUTHORIZED OR APPROVED, IF SUPPORTED BY ACCEPTABLE STATEMENTS OF FACT AND EITHER PAID BILLS OR OTHER ACCEPTABLE EVIDENCE JUSTIFYING THE AMOUNTS CLAIMED; PROVIDED THAT THE AGGREGATE AMOUNT DOES NOT EXCEED THE EMPLOYEE'S BASIC PAY AT THE TIME THE EMPLOYEE REPORTED FOR DUTY--FOR ONE WEEK IF THE EMPLOYEE IS WITHOUT IMMEDIATE FAMILY OR FOR TWO WEEKS IF THE EMPLOYEE HAS IMMEDIATE FAMILY. IN NO INSTANCE WILL THE ALLOWANCE AMOUNT EXCEED THE MAXIMUM RATE OF GRADE GS-13 PROVIDED IN 5 U.S.C. 5332 AT THE TIME THE EMPLOYEE REPORTED FOR DUTY. THE ENTIRE AMOUNT CLAIMED UNDER THIS 3.3B (INCLUDING THE AMOUNT OTHERWISE PAYABLE WITHOUT SUCH DOCUMENTATION UNDER 3.3A) MUST BE SUPPORTED AS REQUIRED ABOVE."