B-198620.OM, AUG 28, 1980

B-198620.OM: Aug 28, 1980

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SINCE THE CASB IS NOT AN EXECUTIVE AGENCY AS DEFINED IN 5 U.S.C. THE EMPLOYEES OF THE BOARD ARE NOT COVERED BY THE TERMS OF 5 U.S.C. THAT CASB EMPLOYEES ARE PRECLUDED FROM RECEIVING SEVERANCE PAY. THE CASB IS GIVEN AUTHORITY TO APPOINT AND FIX THE COMPENSATION OF ITS STAFF. THE BOARD IS FREE TO ADOPT VARIOUS COMPENSATION POLICIES INCLUDING A SEVERANCE PAY POLICY. THEN CASB EMPLOYEES ARE ENTITLED TO RECEIVE SEVERANCE PAY UNDER THOSE PROVISIONS. IF THE CASB'S FUNCTION IS TRANSFERRED TO OMB AND AN EMPLOYEE IS OFFERED BUT DECLINES TO ACCEPT AN EQUIVALENT POSITION AT OMB. HE IS NOT ENTITLED TO SEVERANCE PAY. 5 C.F.R.

B-198620.OM, AUG 28, 1980

SUBJECT: SEVERANCE PAY FOR EMPLOYEES OF THE COST ACCOUNTING STANDARDS BOARD - B-198620-O.M.

DIRECTOR OF PERSONNEL - FELIX R. BRANDON, II:

THIS REPLIES TO YOUR MEMORANDUM REQUEST FOR AN OPINION AS TO WHETHER COST ACCOUNTING STANDARDS BOARD (CASB) EMPLOYEES MAY RECEIVE SEVERANCE PAY SHOULD THE CASB CEASE TO BE FUNDED IN FISCAL YEAR 1981 OR SHOULD ITS FUNCTIONS BE TRANSFERRED TO THE OFFICE OF MANAGEMENT AND BUDGET (OMB).

SINCE THE CASB IS NOT AN EXECUTIVE AGENCY AS DEFINED IN 5 U.S.C. SEC. 105, THE EMPLOYEES OF THE BOARD ARE NOT COVERED BY THE TERMS OF 5 U.S.C. SEC. 5595 (1976). THIS DOES NOT MEAN HOWEVER, THAT CASB EMPLOYEES ARE PRECLUDED FROM RECEIVING SEVERANCE PAY.

THE CASB IS GIVEN AUTHORITY TO APPOINT AND FIX THE COMPENSATION OF ITS STAFF. SEE 50 U.S.C. APP. SEC. 2168(B) AND (C) (1976). UNDER SUCH GENERAL AUTHORITY, THE BOARD IS FREE TO ADOPT VARIOUS COMPENSATION POLICIES INCLUDING A SEVERANCE PAY POLICY. SEE B-153178, APRIL 3, 1967.

AS YOU POINT OUT, THE CASB APPROVED A POLICY TO APPLY THE PROVISIONS OF 5 U.S.C. SEC. 5595 AND THE REGULATIONS THEREUNDER TO CASB EMPLOYEES. THEREFORE, EVEN THOUGH SECTION 5595 DOES NOT COVER CASB EMPLOYEES BY ITS OWN TERMS, SINCE THE BOARD COULD PROVIDE FOR SEVERANCE PAY FOR ITS EMPLOYEES AND SINCE IT HAS DECIDED TO GOVERN ITS EMPLOYEES BY THE APPLICABLE PROVISIONS IN 5 U.S.C. SEC. 5595 AND 5 C.F.R. SEC. 550.701 ET SEQ., THEN CASB EMPLOYEES ARE ENTITLED TO RECEIVE SEVERANCE PAY UNDER THOSE PROVISIONS.

NOTE THAT SINCE THE BOARD HAS AGREED TO APPLY 5 C.F.R. SEC. 550.701 ET SEQ., TO ITS EMPLOYEES, IF THE CASB'S FUNCTION IS TRANSFERRED TO OMB AND AN EMPLOYEE IS OFFERED BUT DECLINES TO ACCEPT AN EQUIVALENT POSITION AT OMB, HE IS NOT ENTITLED TO SEVERANCE PAY. 5 C.F.R. SEC. 550.701(B)(2).

EFFECT OF FUND CUTOFF ON COST ACCOUNTING STANDARDS BOARD

DIGEST

DECISION BY CONGRESS NOT TO APPROPRIATE FUNDS FOR COST ACCOUNTING STANDARDS BOARD (CASB) WOULD CONSTITUTE IMPLIED REPEAL OF STATUTE (SECTION 719 OF DEFENSE PRODUCTION ACT) UNDER WHICH CASB OPERATES. IT WOULD ALSO NULLIFY PROSPECTIVE APPLICATION OF CASB STANDARDS AND OTHER REGULATIONS TO NEW CONTRACTS. HOWEVER, STANDARDS ALREADY INCORPORATED IN CONTRACTS WOULD REMAIN IN EFFECT. ALSO LIABILITIES FOR VIOLATIONS ARISING PRIOR TO EXPIRATION OF CASB FUNDING WOULD BE ACTIONABLE.