B-242677, Jul 3, 1991, 91-2 CPD ***, Office of General Counsel

B-242677: Jul 3, 1991

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800 monthly rent charged by the employee's son and paid by the employee was not reasonable when compared with the three times lesser amount paid for other apartments in the building. The claimed expenses were incurred incident to his permanent change of station from Kodiak to Anchorage. The receipts were signed by his wife as property manager of the apartment building. Broyles' son is the owner of the apartment building. The normal rent for adjacent apartments owned by his son is $600 per month. Reimbursement of temporary quarters subsistence expenses (TQSE) is governed by the provisions of 5 U.S.C. Provided they are incident to the occupancy of temporary quarters and are reasonable in amount.

B-242677, Jul 3, 1991, 91-2 CPD ***, Office of General Counsel

CIVILIAN PERSONNEL - Relocation - Temporary quarters - Actual subsistence expenses - Reimbursement - Eligibility DIGEST: Transferred employee claims reimbursement of lodging expenses incurred while occupying temporary quarters for 60 days. The employee paid rent of $1,800 per month for an apartment owned by his son. Other apartments in the building rented for $600 monthly, plus utilities. The $1,800 monthly rent charged by the employee's son and paid by the employee was not reasonable when compared with the three times lesser amount paid for other apartments in the building.

James R. Broyles:

The authorized certifying officer /1/ requests an advance decision as to whether two travel vouchers for temporary quarters lodging expenses submitted by Mr. James R. Broyles, an employee of the Federal Aviation Administration (FAA), may be certified for payment. The claimed expenses were incurred incident to his permanent change of station from Kodiak to Anchorage, Alaska, in September 1990.

Mr. Broyles submitted rental receipts for lodging for an apartment covering two 30-day periods at the rate of $1,800 per month. The receipts were signed by his wife as property manager of the apartment building. Mr. Broyles' son is the owner of the apartment building. The normal rent for adjacent apartments owned by his son is $600 per month, plus utilities, under long-term leases. Mr. Broyles had no lease and has offered no explanation for the difference in rent between the normal rent of $600, plus utilities, and the $1,800 per month for the apartment he rented.

Reimbursement of temporary quarters subsistence expenses (TQSE) is governed by the provisions of 5 U.S.C. Sec. 5724a(a)(3) (1988). The implementing Federal Travel Regulation, 41 C.F.R. Sec. 302-5.4(a) (1990), provides that reimbursement shall be made only for actual expenses incurred by an employee, provided they are incident to the occupancy of temporary quarters and are reasonable in amount.

Ordinarily, when an employee uses commercial quarters, a receipt is given which reflects the established rate for the services provided. The inferences created by the existence of the receipt are that payment was made of a legal obligation and that the charges were reasonable. However, no such inferences arise where the circumstances suggest that the transaction is other than at arms length. One such circumstance is when an employee temporarily uses lodging facilities owned by a relative. /2/

Here, it appears that the apartment building owned by Mr. Broyles' son is operated as a business establishment. However, the rent charged Mr. Broyles by his son was three times the rent charged for other apartments in the building. Temporary quarters may be either commercial or non- commercial in nature, but in both cases, payment is limited to actual subsistence expenses incurred which are reasonable in amount. /3/ We have held that an employee must show not only that the lodging expenses claimed were paid, but also that the payments were reasonable under the circumstances. What is reasonable depends upon the circumstances of each case. /4/

We do not regard the $1,800 monthly rent charged by Mr. Broyles' son and paid by Mr. Broyles for the apartment as being reasonable when compared with the $600 monthly rent, plus utilities, charged for other apartments in the building.

Since payment of the claimed temporary lodging expenses was not reasonable, the two travel vouchers submitted by Mr. Broyles may not be certified for payment.

/1/ Ms. Cissie Bryant, FAA, U.S. Department of Transportation.

/2/ William J. Toth, B-215450, Dec. 27, 1984; Barry A. Smith, B-184946, Mar. 10, 1976.

/3/ 41 C.F.R. Sec. 302-5.4(a) (1990); John T. Bailey, III, B-230472, Mar. 16, 1989; Peter Lalic, B-227430, Mar. 14, 1989.

/4/ Toth, supra; Smith, supra.