B-181909, APR 2, 1975

B-181909: Apr 2, 1975

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EMPLOYEE MAY NOT BE REIMBURSED FOR "POINTS" AS SUCH REIMBURSEMENT IS EXPRESSLY EXCLUDED BY OMB CIRCULAR NO. AS "POINTS" ARE PART OF THE PRICE FOR THE HIRE OF MONEY. HUTCHINSON - REAL ESTATE EXPENSES - "POINTS": THIS MATTER IS BEFORE US BASED UPON A REQUEST FOR RECONSIDERATION OF SETTLEMENT CERTIFICATE Z-2535599. WAS TRANSFERRED FROM KANSAS CITY. THE SETTLEMENT FOR THE SALE OF HIS HOME AT HIS OLD DUTY STATION WAS HELD ON MARCH 5. ON THE SETTLEMENT STATEMENT IS A CHARGE AGAINST MR. HUTCHINSON IN THE AMOUNT OF $960 WHICH IS LABELED "DISCOUNTS 4%.". REIMBURSEMENT OF THIS CHARGE WAS DISALLOWED BY THE AGENCY. WHICH IS SET OUT BELOW: "I WAS ONLY GIVEN 5 WEEKS NOTICE TO RELOCATE IN BIRMINGHAM. IT WAS FROM A PERSON WANTING TO USE HIS VA ELIGIBILITY.

B-181909, APR 2, 1975

INCIDENT TO SALE OF HOME AT TIME OF TRANSFER, EMPLOYEE PAID "POINTS" TO ENABLE BUYER TO OBTAIN VA MORTGAGE. EMPLOYEE MAY NOT BE REIMBURSED FOR "POINTS" AS SUCH REIMBURSEMENT IS EXPRESSLY EXCLUDED BY OMB CIRCULAR NO. A -56, SECTION 4.2D. THIS OFFICE DOES NOT DISAGREE WITH EXCLUSION, AS "POINTS" ARE PART OF THE PRICE FOR THE HIRE OF MONEY.

DONALD W. HUTCHINSON - REAL ESTATE EXPENSES - "POINTS":

THIS MATTER IS BEFORE US BASED UPON A REQUEST FOR RECONSIDERATION OF SETTLEMENT CERTIFICATE Z-2535599, ISSUED APRIL 24, 1974, BY OUR TRANSPORTATION AND CLAIMS DIVISION DISALLOWING MR. DONALD W. HUTCHINSON'S CLAIM FOR REIMBURSEMENT OF $960 HE PAID AS "POINTS" AT THE TIME HE SOLD HIS RESIDENCE INCIDENT TO HIS TRANSFER.

UNDER THE AUTHORITY OF TRAVEL ORDER NO. RSI-41-104, DATED DECEMBER 14, 1972, MR. HUTCHINSON, AN EMPLOYEE OF THE SOCIAL SECURITY ADMINISTRATION, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, WAS TRANSFERRED FROM KANSAS CITY, MISSOURI, TO BIRMINGHAM, ALABAMA. THE SETTLEMENT FOR THE SALE OF HIS HOME AT HIS OLD DUTY STATION WAS HELD ON MARCH 5, 1973. ON THE SETTLEMENT STATEMENT IS A CHARGE AGAINST MR. HUTCHINSON IN THE AMOUNT OF $960 WHICH IS LABELED "DISCOUNTS 4%." REIMBURSEMENT OF THIS CHARGE WAS DISALLOWED BY THE AGENCY. IN HIS RECLAIM VOUCHER, MR. HUTCHINSON STATED HIS POSITION, WHICH IS SET OUT BELOW:

"I WAS ONLY GIVEN 5 WEEKS NOTICE TO RELOCATE IN BIRMINGHAM. IMMEDIATELY PUT MY HOUSE UP FOR SALE WHEN NOTIFIED OF THE MOVE. AFTER 4 WEEKS, I RECEIVED A CONTRACT TO BUY MY HOUSE. IT WAS FROM A PERSON WANTING TO USE HIS VA ELIGIBILITY. WITH A WEEK TO GO TO MOVING DATE, I WAS EITHER FORCED INTO ACCEPTING A VA CONTRACT OR CANCELING MY CONTRACT WITH THE REAL ESTATE COMPANY. IN OTHER WORDS, THEY DID THEIR JOB. THEY FOUND ME A BUYER. ON SUCH SHORT NOTICE THEY SAID THEY COULD ONLY MOVE A HOUSE FAST ON A VA CONTRACT. WHAT OTHER CHOICE DID I HAVE THAN TO ACCEPT THE CONTRACT.

"IF YOU STILL DISALLOW THIS ITEM, WOULD YOU PLEASE GIVE ME A CLEAR EXPLANATION WHY? I WANT TO REFER IT TO MY CONGRESSMAN TO SHOW HIM HOW THIS DEFEATS THE INTENT THAT AN EMPLOYEE WILL BE REIMBURSED FOR EXPENSES IN RELOCATING AT GOVERNMENT REQUEST."

AT THE TIME OF MR. HUTCHINSON'S TRANSFER, REIMBURSEMENT OF REAL ESTATE EXPENSES WAS GOVERNED BY THE PROVISIONS OF OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56 (1971), SPECIFICALLY, SECTION 4.2D WHICH PROVIDES, IN PERTINENT PART, THAT "INTEREST ON LOANS, POINTS, AND MORTGAGE DISCOUNTS ARE NOT REIMBURSABLE." CLEARLY, MR. HUTCHINSON'S CLAIM FOR $960 WAS PROPERLY DISALLOWED BY THE AGENCY AND BY OUR TRANSPORTATION AND CLAIMS DIVISION. SEE B-162494, OCTOBER 26, 1967, AND B-174065, NOVEMBER 19, 1971.

THE ABOVE-QUOTED PASSAGE HAS BEEN REPEATED IN SUBSTANCE IN ALL OF MR. HUTCHINSON'S SUBSEQUENT COMMUNICATIONS, IN THAT HE HAS REPEATED HIS REQUEST FOR AN EXPLANATION OF THE RATIONALE BEHIND THE PROHIBITION AGAINST REIMBURSEMENT OF "POINTS." ALTHOUGH THE AUTHORITY TO PRESCRIBE REGULATIONS HAS NOW BEEN DELEGATED TO THE ADMINISTRATOR OF THE GENERAL SERVICES ADMINISTRATION INSTEAD OF THE HEAD OF OMB, THE REGULATIONS WITH REGARD TO "POINTS" HAVE REMAINED THE SAME. WHILE THIS OFFICE DOES NOT POSSESS THE AUTHORITY TO REVISE THESE REGULATIONS, WE ARE REQUIRED TO RENDER DECISIONS IN CONFORMITY WITH THEM. FROM OUR EXPERIENCE IN APPLYING THESE REGULATIONS, WE CANNOT DISAGREE WITH THE EXCLUSION OF "POINTS" FROM THE LIST OF REIMBURSABLE EXPENSES, AS "POINTS" ARE PART OF THE PRICE FOR THE HIRE OF MONEY RATHER THAN REIMBURSEMENT OF ADMINISTRATIVE COSTS OF A SETTLEMENT.

ACCORDINGLY, THE DISALLOWANCE OF MR. HUTCHINSON'S CLAIM IS SUSTAINED.