B-43881, SEPTEMBER 4, 1944, 24 COMP. GEN. 181

B-43881: Sep 4, 1944

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COMPENSATION - TRANSFERS - INITIAL SALARY RATES - INCLUSION OF DIFFERENTIAL FOR SERVICE OUTSIDE UNITED STATES WHILE A COMPENSATION DIFFERENTIAL PAID IN A POSITION LOCATED OUTSIDE THE UNITED STATES IS REGARDED AS A PART OF THE BASIC COMPENSATION AT THAT LOCATION. GEN. 201) IS NOT FOR APPLICATION TO SAVE THE DIFFERENTIAL UPON TRANSFER TO A POSITION WITHIN THE UNITED STATES. WHERE THE DIFFERENTIAL IS NOT PAYABLE. 1944: I HAVE YOUR LETTER OF AUGUST 14. AS FOLLOWS: THERE IS TRANSMITTED HEREWITH A FILE OF CORRESPONDENCE CONCERNING THE PROPERTY (PROPRIETY) OF SALARY REDUCTION AND REQUIRED REFUND OF SALARY OVERPAYMENTS IN THE CASE OF EDWARD J. THAT THE NAVY DEPARTMENT SUBSEQUENTLY DETERMINED THAT THE RATES OF PAY OF THE POSITIONS TO WHICH THESE EMPLOYEES HAD BEEN TRANSFERRED WERE IN ERROR.

B-43881, SEPTEMBER 4, 1944, 24 COMP. GEN. 181

COMPENSATION - TRANSFERS - INITIAL SALARY RATES - INCLUSION OF DIFFERENTIAL FOR SERVICE OUTSIDE UNITED STATES WHILE A COMPENSATION DIFFERENTIAL PAID IN A POSITION LOCATED OUTSIDE THE UNITED STATES IS REGARDED AS A PART OF THE BASIC COMPENSATION AT THAT LOCATION, THE GENERAL RULE AUTHORIZING TRANSFERS BETWEEN CLASSIFIED POSITIONS WITHOUT LOSS OF BASIC COMPENSATION (23 COMP. GEN. 201) IS NOT FOR APPLICATION TO SAVE THE DIFFERENTIAL UPON TRANSFER TO A POSITION WITHIN THE UNITED STATES, WHERE THE DIFFERENTIAL IS NOT PAYABLE.

ACTING COMPTROLLER GENERAL YATES TO THE SECRETARY OF THE NAVY SEPTEMBER 4, 1944:

I HAVE YOUR LETTER OF AUGUST 14, 1944, REF. JAG:II:WJG:Z, P16-3/LL, AS FOLLOWS:

THERE IS TRANSMITTED HEREWITH A FILE OF CORRESPONDENCE CONCERNING THE PROPERTY (PROPRIETY) OF SALARY REDUCTION AND REQUIRED REFUND OF SALARY OVERPAYMENTS IN THE CASE OF EDWARD J. MOLLOY AND JOHN B. FLANAGAN.

IT APPEARS FROM THE ENCLOSURE THAT BY LETTERS, COPIES ENCLOSED, DATED FEBRUARY 23, 1943, AND MARCH 16, 1943, THE NAVY DEPARTMENT DIRECTED THE TRANSFER OF EDWARD J. MOLLOY AND JOHN B. FLANAGAN FROM PROPERTY AND SUPPLY CLERK, CAF-5, AND FISCAL ACCOUNTING CLERK, CAF-5, RESPECTIVELY, AT $2625.00 PER ANNUM, IN THE NAVAL AIR STATION, COCO SOLO, C.Z., TO THE POSITIONS OF PROPERTY AND SUPPLY CLERK, CAF-7, AND FISCAL ACCOUNTING CLERK, CAF-6, RESPECTIVELY, AT $2700.00 PER ANNUM, IN THE NAVAL AIR STATION, PATUXENT RIVER, MARYLAND; THAT THE NAVY DEPARTMENT SUBSEQUENTLY DETERMINED THAT THE RATES OF PAY OF THE POSITIONS TO WHICH THESE EMPLOYEES HAD BEEN TRANSFERRED WERE IN ERROR; THAT SUCH RATES OF PAY WERE THEREAFTER MODIFIED BY AMENDATORY ORDERS OF THE NAVY DEPARTMENT, COPIES ATTACHED, AND THAT THE NAVY DEPARTMENT, ACCORDINGLY ADVISED THE COMMANDING OFFICER, NAVAL AIR STATION, PATUXENT RIVER, MARYLAND, ON MAY 9, 1944, TO THE EFFECT THAT COLLECTION SHOULD BE MADE FROM THESE TWO EMPLOYEES OF THE AMOUNT OF THE OVERPAYMENT FOR SERVICES PERFORMED SINCE THE DATES OF ENTRANCE ON DUTY TO THE PRESENT TIME.

IT WILL BE OBSERVED FROM THE ENCLOSURE THAT THE RESPECTIVE SALARIES PAID MOLLOY AND FLANAGAN AS CIVIL EMPLOYEES AT THE NAVAL AIR STATION, COCO SOLO, C.Z., INCLUDED A 25 PERCENT SALARY DIFFERENTIAL FOR SERVICES OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES, AND THAT THE BASIS OF THE NAVY DEPARTMENT'S DETERMINATION THAT THE RATE OF SALARY WAS IN ERROR WAS THE COMPTROLLER GENERAL'S DECISION TO THE SECRETARY OF WAR (22 COMP. GEN. 79, JULY 22, 1942), WHEREIN IT WAS HELD WITH RESPECT TO THE 25 PERCENT SALARY DIFFERENTIAL THAT---

"WHILE THE DIFFERENTIAL WHEN FIXED PURSUANT TO PROPER AUTHORITY BECOMES A PART OF THE REGULAR SALARY OR COMPENSATION OF THE POSITION (10 COMP. GEN. 519), IT IS AUTHORIZED SOLELY BECAUSE OF THE LOCATION OF THE PLACE WHERE THE DUTIES OF THE POSITION ARE TO BE PERFORMED; AND THE EMPLOYEE IS ENTITLED TO THE ENTIRE SALARY ATTACHED TO SUCH POSITION (INCLUDING THE DIFFERENTIAL) ONLY SO LONG AS HE IS IN A DUTY STATUS IN THE PARTICULAR POSITION AS TO WHICH PAYMENT OF THE DIFFERENTIAL IS AUTHORIZED * * *.'

THE NAVY DEPARTMENT, AS PREVIOUSLY INDICATED, SUBSEQUENTLY AMENDED ITS LETTERS OF FEBRUARY 23, 1943, AND MARCH 16, 1943, TO PROVIDE FOR REDUCED SALARY RATES FOR THESE TWO EMPLOYEES IN THE POSITIONS TO WHICH THEY HAD BEEN TRANSFERRED IN LETTER ATTACHED OF JULY 14, 1944, FLANAGAN REQUESTS THAT THIS MATTER, INVOLVING A SALARY REDUCTION AND REFUND OF SALARY OVERPAYMENT APPROXIMATING THE SUM OF $550.00, BE SUBMITTED TO THE COMPTROLLER GENERAL FOR DECISION, FOR THE STATED REASONS THAT HE BELIEVES THE SALARY RATE IN HIS CASE OF $2700.00 PER ANNUM AS ORIGINALLY FIXED BY THE NAVY DEPARTMENT IS LEGALLY CORRECT AND THAT NO DECISION OF THE COMPTROLLER GENERAL TO THE CONTRARY CAN BE FOUND.

IN VIEW OF THE FOREGOING AND OF THE NAVY DEPARTMENT'S DOUBT AS TO THE CORRECTNESS OF ITS ACTION IN THE CASES OF MOLLOY AND FLANAGAN, THE FILE OF CORRESPONDENCE INVOLVED IS FORWARDED FOR YOUR CONSIDERATION WITH REQUEST FOR AN EXPRESSION OF YOUR VIEWS AS TO THE PROPRIETY OF THE NAVY DEPARTMENT'S ACTION IN REDUCING THE SALARY RATE AND REQUIRING A REFUND OF THE ALLEGED SALARY OVERPAYMENTS IN THE CASES OF MOLLOY AND FLANAGAN, BASED ON THE CITED DECISION OF THE COMPTROLLER GENERAL OF JULY 22, 1942 (22 COMP. GEN. 79).

THERE IS INVOLVED IN THE CASES PRESENTED, THE QUESTION WHETHER IT IS WITHIN ADMINISTRATIVE DISCRETION TO TRANSFER AN EMPLOYEE FROM A POSITION LOCATED OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES, WHERE A 25 PERCENT DIFFERENTIAL IN COMPENSATION IS PAID, TO ANOTHER SEPARATE AND DISTINCT POSITION WITHIN THE CONTINENTAL LIMITS OF THE UNITED STATES, WHERE THE DIFFERENTIAL IS NOT PAYABLE, AT A RATE OF COMPENSATION WHICH DOES NOT CAUSE THE EMPLOYEE TO LOSE THE AMOUNT OF THE DIFFERENTIAL. APPARENTLY THAT QUESTION HAS NOT BEEN CONSIDERED OR DECIDED HERETOFORE BY THIS OFFICE.

THE DECISION OF JULY 29, 1942, 22 COMP. GEN. 79, ON THE BASIS OF WHICH THE SECOND ADMINISTRATIVE ACTION--- REDUCING THE SALARY RATES OF THE EMPLOYEES AND PROPOSING COLLECTION OF THE AMOUNT OF THE OVERPAYMENTS--- WAS TAKEN DID NOT CONSIDER THE SPECIFIC QUESTION HERE INVOLVED. THAT DECISION RELATED ONLY TO EMPLOYEES WHO RETAINED THEIR POSITIONS IN THE CANAL ZONE AND WERE WITHIN THE CONTINENTAL LIMITS OF THE UNITED STATES EITHER (1) IN A LEAVE STATUS, (2) ON DETAIL TO PERFORM THE DUTIES OF OTHER POSITIONS, OR (3) IN A TRAVEL STATUS IN CONNECTION WITH THEIR DUTIES IN THE CANAL ZONE. THERE WAS NEITHER CONSIDERED NOR DECIDED IN THAT DECISION ANY QUESTION INVOLVING THE PERMANENT TRANSFER OF EMPLOYEES.

HOWEVER, THE DIFFERENTIAL OF NOT TO EXCEED 25 PERCENT AUTHORIZED TO BE PAID TO EMPLOYEES OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES IS BASED SOLELY ON THE LOCATION OF THE POSITION. THAT IS, FOR THE SAME DUTIES THE DIFFERENTIAL IS PAYABLE AT ONE LOCATION BUT NOT AT ANOTHER. WHILE THE DIFFERENTIAL IS REGARDED AS A PART OF THE BASIC COMPENSATION OF A POSITION LOCATED OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES (10 COMP. GEN. 519, 521; 22 ID. 769), IT IS NOT TO BE REGARDED AS A PART OF THE BASIC COMPENSATION OF THE SAME CLASS OF POSITION OR OF ANY OTHER POSITION LOCATED WITHIN THE CONTINENTAL LIMITS OF THE UNITED STATES. HENCE, THE GENERAL RULE URGED BY THESE EMPLOYEES AND UNDERSTOOD TO HAVE BEEN INVOKED AS A BASIS FOR THE FIRST ADMINISTRATIVE ACTION, AUTHORIZING TRANSFERS BETWEEN CLASSIFIED POSITIONS WITHOUT LOSS OF BASIC COMPENSATION (23 COMP. GEN. 201, 203 AND THE DECISIONS THEREIN CITED), IS NOT FOR APPLICATION TO SAVE A DIFFERENTIAL PAID FOR SERVICE OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES UPON TRANSFER TO A POSITION WITHIN THE CONTINENTAL LIMITS OF THE UNITED STATES. SAID GENERAL RULE WAS INTENDED TO SAVE BASIC COMPENSATION ATTAINED BY OPERATION OF THE CLASSIFICATION ACT, AS AMENDED BY THE ACT OF AUGUST 1, 1941, 55 STAT. 613. TO EXTEND THE RULE SO AS TO PERMIT THE SAVING OF A DIFFERENTIAL AUTHORIZED BY ANOTHER LAW UPON TRANSFERS BETWEEN THE CANAL ZONE AND THE CONTINENTAL UNITED STATES WOULD BE INCONSISTENT WITH THE PURPOSE FOR WHICH THE DIFFERENTIAL IS AUTHORIZED AND MIGHT OPERATE TO CIRCUMVENT THE LIMITATION ON WITHIN GRADE SALARY ADVANCEMENTS.

ACCORDINGLY, IT MUST BE HELD THAT THERE IS NO AUTHORITY TO SAVE TO THE EMPLOYEES HERE INVOLVED THE DIFFERENTIAL THEY WERE RECEIVING IN THE CANAL ZONE, AND THAT THE SECOND ADMINISTRATIVE ACTION REDUCING THE SALARY RATES OF THE EMPLOYEES TO THE MINIMUM RATES OF $2,300 AND $2,600 PER ANNUM OF GRADES CAF-6 AND 7, RESPECTIVELY, WAS CORRECT, IT BEING UNDERSTOOD THAT THE SALARY RATES IN BOTH CASES IN THE CANAL ZONE IN GRADE CAF-5 WITHOUT THE DIFFERENTIAL WERE $2,100 PER ANNUM--- LESS THAN THE MINIMUM RATES OF THE GRADES TO WHICH THE EMPLOYEES WERE TRANSFERRED WITHIN THE CONTINENTAL UNITED STATES.

HOWEVER, AS THE FIRST ADMINISTRATIVE ACTION FIXING THE SALARY RATES OF THE EMPLOYEES IN THE CONTINENTAL UNITED STATES AT $2,700 PER ANNUM APPARENTLY WAS THE RESULT OF A REASONABLE BELIEF THAT SUCH ACTION WAS IN ACCORDANCE WITH EXISTING DECISIONS RELATING TO TRANSFERS WITHOUT LOSS OF SALARY, THE RATES OF $2,700 PER ANNUM ACTUALLY PAID TO THE TWO EMPLOYEES PRIOR TO THE DATE OF THEIR REDUCTION NEED NOT NOW BE DISTURBED, AND THE CHARGE RAISED AGAINST THEM FOR AN AMOUNT REPRESENTING THE DIFFERENCE BETWEEN $2,700 AND $2,300 AND $2,600, RESPECTIVELY, PRIOR TO SUCH REDUCTION, MAY BE REMOVED.