B-44619, OCTOBER 31, 1944, 24 COMP. GEN. 334

B-44619: Oct 31, 1944

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

AN ACCOUNTING ADJUSTMENT IS REQUIRED TO CREDIT THE SALARY APPROPRIATION AND CHARGE INTERNAL REVENUE COLLECTIONS. THE QUESTION WHETHER SUCH DEDUCTIONS ARE AVAILABLE FOR SET OFF AGAINST THE EMPLOYEE'S INDEBTEDNESS TO THE UNITED STATES IS GOVERNED BY THE GENERAL RULES RESPECTING SET OFF OF COMPENSATION. THAT IS. CURRENT SALARY PAYMENTS ARE NOT. WHILE THE AMOUNT OTHERWISE DUE AN EMPLOYEE UPON SEPARATION FROM SERVICE IS AVAILABLE. WHERE AN EMPLOYEE'S NET CURRENT SALARY (THAT REMAINING AFTER DEDUCTIONS HAVE BEEN MADE FOR THE PURCHASE OF WAR SAVINGS BONDS) HAS BEEN PAID TO HIM. INCLUDING THE AMOUNT THEREOF THAT OTHERWISE WOULD HAVE BEEN APPLIED TOWARD THE PURCHASE OF A BOND. DEDUCTIONS FOR THE PURCHASE OF WAR SAVINGS BONDS MADE FROM THE FINAL SALARY PAYMENT OF AN EMPLOYEE WHO IS INDEBTED TO THE UNITED STATES SHOULD NOT BE USED FOR THE PURCHASE OF A BOND BUT SHOULD BE APPLIED TOWARD LIQUIDATION OF HIS INDEBTEDNESS.

B-44619, OCTOBER 31, 1944, 24 COMP. GEN. 334

SET-OFF - COMPENSATION - INCOME TAX WITHHOLDINGS; BOND DEDUCTIONS AN EMPLOYEE'S TAX OBLIGATION IN THE AMOUNT OF THE TAX REQUIRED BY THE CURRENT TAX PAYMENT ACT OF 1943 TO BE WITHHELD FROM COMPENSATION HAS PRIORITY OVER OTHER CLASSES OF INDEBTEDNESS OR OBLIGATION OF THE EMPLOYEE TO THE UNITED STATES AND THE AMOUNT OF TAX WITHHELD MAY NOT BE APPLIED FOR ANY PURPOSE OTHER THAN FOR PAYMENT OF THE TAX, SO THAT AN EMPLOYEE'S FINAL SALARY PAYMENT MAY NOT BE SET OFF AGAINST HIS INDEBTEDNESS RESULTS FROM OVERDRAWN LEAVE OR OTHER OVERPAYMENT OF COMPENSATION, AN ACCOUNTING ADJUSTMENT IS REQUIRED TO CREDIT THE SALARY APPROPRIATION AND CHARGE INTERNAL REVENUE COLLECTIONS. THE AMOUNT TEMPORARILY WITHHELD FROM THE SALARY OF AN EMPLOYEE AS VOLUNTARY DEDUCTIONS FOR THE PURCHASE OF WAR SAVINGS BONDS DOES NOT LOSE ITS IDENTITY AS CURRENT SALARY IF CURRENTLY WITHHELD, OR AS FINAL SALARY IF WITHHELD FROM THE FINAL SALARY PAYMENT, AND THE QUESTION WHETHER SUCH DEDUCTIONS ARE AVAILABLE FOR SET OFF AGAINST THE EMPLOYEE'S INDEBTEDNESS TO THE UNITED STATES IS GOVERNED BY THE GENERAL RULES RESPECTING SET OFF OF COMPENSATION; THAT IS, CURRENT SALARY PAYMENTS ARE NOT, WITHOUT CONSENT, AVAILABLE FOR SET OFF, WHILE THE AMOUNT OTHERWISE DUE AN EMPLOYEE UPON SEPARATION FROM SERVICE IS AVAILABLE. WHERE AN EMPLOYEE'S NET CURRENT SALARY (THAT REMAINING AFTER DEDUCTIONS HAVE BEEN MADE FOR THE PURCHASE OF WAR SAVINGS BONDS) HAS BEEN PAID TO HIM, THE BOND PURCHASE DEDUCTIONS MAY NOT, WITHOUT CONSENT, BE SET OFF AGAINST HIS INDEBTEDNESS TO THE UNITED STATES, REGARDLESS OF WHETHER HE HAS BEEN SEPARATED FROM THE SERVICE; HOWEVER, THE ENTIRE AMOUNT OF FINAL SALARY PAYMENT, INCLUDING THE AMOUNT THEREOF THAT OTHERWISE WOULD HAVE BEEN APPLIED TOWARD THE PURCHASE OF A BOND, MAY BE SET OFF WITH OR WITHOUT CONSENT. AN UNDELIVERED WAR SAVINGS BOND PURCHASED WITH DEDUCTIONS MADE FROM OTHER THAN THE FINAL SALARY PAYMENT OF AN EMPLOYEE WHO HAS BEEN SEPARATED FROM THE SERVICE MAY NOT, WITHOUT CONSENT, BE CANCELLED AND APPLIED TOWARD LIQUIDATION OF HIS INDEBTEDNESS TO THE UNITED STATES, BUT SHOULD BE DELIVERED TO HIM. DEDUCTIONS FOR THE PURCHASE OF WAR SAVINGS BONDS MADE FROM THE FINAL SALARY PAYMENT OF AN EMPLOYEE WHO IS INDEBTED TO THE UNITED STATES SHOULD NOT BE USED FOR THE PURCHASE OF A BOND BUT SHOULD BE APPLIED TOWARD LIQUIDATION OF HIS INDEBTEDNESS; HOWEVER, IF THROUGH INADVERTENCE OR OTHERWISE A BOND IS PURCHASED, THE BOND MAY BE RETURNED TO THE TREASURY DEPARTMENT FOR CANCELLATION--- THE AMOUNT THEREOF REPRESENTING DEDUCTIONS FROM FINAL SALARY PAYMENT TO BE APPLIED TOWARDS THE INDEBTEDNESS AND ANY AMOUNT REPRESENTING DEDUCTIONS FROM EARLIER CURRENT SALARY PAYMENTS TO BE RETURNED TO THE EMPLOYEE IN THE ABSENCE OF HIS CONSENT TO SET-OFF. UNDER THE PROVISIONS OF THE CIVIL SERVICE RETIREMENT ACT, AS AMENDED, IT IS MANDATORY TO DEDUCT AND DEPOSIT INTO THE RETIREMENT FUND 5 PERCENT OF A SEPARATED EMPLOYEE'S FINAL BASIC SALARY PAYMENT, WITHOUT REGARD TO HIS INDEBTEDNESS OR TAX OBLIGATION TO THE GOVERNMENT. AN EMPLOYEE'S FINAL SALARY PAYMENT UPON SEPARATION FROM THE SERVICE SHOULD BE APPLIED IN THE FOLLOWING ORDER: (1) RETIREMENT DEDUCTIONS FROM BASIC COMPENSATION; (2) WITHHOLDING TAX; (3) OTHER INDEBTEDNESS TO THE UNITED STATES; AND (4) AUTHORIZED DEDUCTIONS FOR THE PURCHASE OF WAR SAVINGS BONDS, IN THE ABSENCE OF CANCELLATION OF THE ALLOTMENT.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF AGRICULTURE, OCTOBER 31, 1944:

THERE HAS BEEN CONSIDERED YOUR LETTER OF SEPTEMBER 19, 1944, AS FOLLOWS:

THE DEPARTMENT HAS RECEIVED A NUMBER OF QUESTIONS REGARDING PAY ROLL ADJUSTMENTS FOR OVERPAYMENT OF SALARY INVOLVING OVERDRAWN LEAVE AND THE DEDUCTIONS APPLICABLE TO SUCH OVERPAYMENTS, AND REGARDING THE SET OFF OF FINAL SALARY PAYMENTS AGAINST AN EMPLOYEE'S INDEBTEDNESS DUE TO OVERDRAWN LEAVE, LOSS OF GOVERNMENT PROPERTY ADMINISTRATIVELY CHARGED TO EMPLOYEE, GENERAL ACCOUNTING OFFICE DISALLOWANCES, IRREGULAR TRAVEL CLAIMS PREVIOUSLY PAID, ETC. THE QUESTIONS INVOLVED ARE AS FOLLOWS:

1. SET-OFF OF FINAL SALARY PAYMENTS AGAINST AN EMPLOYEE'S INDEBTEDNESS WITHOUT DEDUCTION THEREFROM OF ANY AMOUNT FOR WITHHOLDING TAX

THE APPLICABLE PROVISION OF THE CURRENT TAX PAYMENT ACT OF 1943 ( PUBLIC LAW 58, 78TH CONGRESS) REQUIRES EVERY EMPLOYER MAKING PAYMENT OF WAGES, OR, IN THE CASE OF THE GOVERNMENT, ANY OFFICER OR EMPLOYEE APPROPRIATELY DESIGNATED FOR THAT PURPOSE, TO DEDUCT AND WITHHOLD UPON SUCH WAGES A TAX. ON DECEMBER 8, 1943, IN DECISION A-97205, RELATING TO FEDERAL WITHHOLDING TAX, IT WAS SUGGESTED THAT THE FOLLOWING PROCEDURES BE ADOPTED (ITEM 1 (B) ):

"THERE SHALL BE DEDUCTED AND WITHHELD FROM THE GROSS SALARY, PAY OR COMPENSATION (FOR THE PERIOD FOR WHICH PAYMENT IS TO BE MADE) OF EACH FORMER EMPLOYEE TO WHOM THE FEDERAL INCOME TAX LAWS APPLIED THE WITHHOLDING TAX SPECIFIED BY THE STATUTES AND SHOWN IN THE SALARY TABLES PRESCRIBED BY THE COMPTROLLER GENERAL OF THE UNITED STATES.'

IN 22 COMP. GEN. 1046, IT WAS STATED (QUOTING FROM THE SYLLABUS):

"THE AMOUNT OF THE INDEBTEDNESS OF A FORMER EMPLOYEE FOR OVERDRAWN LEAVE UPON SEPARATION FROM SERVICE MAY BE RECREDITED TO THE APPLICABLE SALARY APPROPRIATION BY SET-OFF AGAINST HIS RETIREMENT FUND CREDIT--- OTHERWISE AVAILABLE FOR SET-OFF--- ONLY TO THE EXTENT OF THE NET AMOUNT OF HIS SALARY (INCLUDING 5 PERCENT CREDIT FOR RETIREMENT) AFTER DEDUCTION OF THE AMOUNT WITHHELD FOR VICTORY TAX, DURING THE PERIOD OF THE OVERDRAWN LEAVE; BUT IN ORDER THAT THE AMOUNT PAID FROM THE SALARY APPROPRIATION FOR THE OVERDRAWN LEAVE MAY BE FULLY RESTORED BY RECREDITING, ALSO, THE AMOUNT WITHHELD FOR VICTORY TAX, THE MATTER SHOULD BE REFERRED TO THE CLAIMS DIVISION OF THIS OFFICE FOR APPROPRIATE ACTION.'

SUBSEQUENTLY IN DECISION B-34335, DATED JULY 10, 1943, APPROVAL WAS GIVEN TO THIS PROCEDURE WITH REGARD TO ADJUSTMENTS FOR DEDUCTIONS TO COVER THE WITHHOLDING TAX ON AND AFTER JULY 1, 1943.

IN ONE CASE BEFORE THE DEPARTMENT, THE EMPLOYEE IS INDEBTED TO THE UNITED STATES FOR THE FULL AMOUNT OF THE GROSS SALARY, LESS RETIREMENT. WITHHOLDING THE APPLICABLE TAX, THE EMPLOYEE'S INDEBTEDNESS TO THE UNITED STATES WILL NOT BE LIQUIDATED IN THE FULL AMOUNT. IT DOES NOT APPEAR REASONABLE FOR AN AGENCY TO MAKE A DEDUCTION FOR THE TAX WHICH MAY LATER BE FOR REFUND TO THE EMPLOYEE, THEREBY CONTINUING AN INDEBTEDNESS TO THE UNITED STATES IN ORDER TO GUARANTEE COLLECTION BY THE BUREAU OF INTERNAL REVENUE OF TAXES FOR WHICH THE INDIVIDUAL IS PRIMARILY LIABLE. IN VIEW OF THE EMPLOYEE'S LIABILITY FOR TAXES, THE EFFECT OF REQUIRING THE PAYING OFFICE TO MAKE A DEDUCTION IS TO GIVE TO THE EMPLOYEE AN ADVANTAGE WITH A CORRESPONDING DISADVANTAGE TO THE UNITED STATES.

YOUR DECISION IS, THEREFORE, RESPECTFULLY REQUESTED AS TO WHETHER SET-OFF COVERING FINAL SALARY DUE CAN BE EFFECTED WITHOUT PRIOR DEDUCTION THEREFROM OF ANY AMOUNT FOR WITHHOLDING TAX.

2. ADJUSTMENT IN A SUBSEQUENT CALENDAR YEAR OF AN OVERPAYMENT OF FEDERAL TAX WITHHELD FROM A CONTINUING EMPLOYEE

GENERAL REGULATIONS NO. 96, DATED DECEMBER 15, 1942, IN ITEM 9 (B) STATES THE PROCEDURE TO BE FOLLOWED IN ADJUSTING THE CURRENT PAY ROLL FOR OVERPAYMENTS TO THE VICTORY TAX SPECIAL DEPOSIT ACCOUNT, THE SAVINGS BOND SPECIAL DEPOSIT ACCOUNT, AND THE RETIREMENT FUND, OCCASIONED BY THE CANCELLATION OF TRANSACTIONS PERTAINING TO PAY ROLLS. GENERAL REGULATIONS NO. 96, SUPPLEMENT NO. 2, IN ITEM 4 APPLIES THE ABOVE PROCEDURES TO THE FEDERAL WITHHOLDING TAX PRESCRIBED UNDER THE CURRENT TAX PAYMENT ACT OF 1943 ( PUBLIC LAW 68, 78TH CONGRESS).

YOUR DECISION IS REQUESTED AS TO WHETHER THIS PROCEDURE CAN BE APPLIED IN THOSE CASES WHERE THE OVERPAYMENT OF SALARY DUE TO OVERDRAWN LEAVE OCCURS LATE IN THE CALENDAR YEAR AND ADJUSTMENT THEREOF INCLUDING THE WITHHOLDING TAX OVERPAYMENT CANNOT BE EFFECTED UNTIL THE SUBSEQUENT CALENDAR YEAR BUT PREVIOUS TO THE ISSUANCE OF FORM W-2 TO THE EMPLOYEE; PROVIDED COMPLETE EXPLANATION OF SUCH ADJUSTMENT IS MADE ON THE FINAL FORM W-1 SUBMITTED TO THE TREASURY DEPARTMENT. IF THE ABOVE QUESTION IS ANSWERED IN THE AFFIRMATIVE, YOUR DECISION IS ALSO REQUESTED AS TO WHETHER THE SAME PROCEDURE CAN BE APPLIED IN THOSE CASES WHERE SUCH ADJUSTMENT OF THE WITHHOLDING TAX OVERPAYMENT IS UNAVOIDABLY DELAYED UNTIL AFTER FINAL INCOME TAX RETURNS HAVE BEEN SUBMITTED; PROVIDED COMPLETE EXPLANATION OF THE ADJUSTMENT IS MADE ON A SUBSEQUENT FORM W-1 SUBMITTED TO THE TREASURY DEPARTMENT.

A PROCEDURE FOR MAKING ADJUSTMENTS OF ERRORS IN THE WITHHOLDING TAX ACCOUNT REGARDLESS OF CALENDAR YEAR INVOLVED WOULD BE OF MATERIAL ASSISTANCE TO THE DEPARTMENT.

A PROCEDURE FOR MAKING ADJUSTMENTS OF ERRORS IN THE WITHHOLDING TAX ACCOUNT REGARDLESS OF CALENDAR YEAR INVOLVED WOULD BE OF MATERIAL ASSISTANCE TO THE DEPARTMENT IN THE PROPER ACCOUNTING FOR ITS APPROPRIATIONS.

3. ADJUSTMENT OF BOND ACCOUNT

THE QUESTIONS INVOLVED ARE WHETHER, WITH OR WITHOUT CONSENT OF THE EMPLOYEE, (1) AN INDEBTEDNESS DUE BY AN EMPLOYEE TO THE GOVERNMENT FOR OVERDRAWN LEAVE, LOSS OF GOVERNMENT PROPERTY ADMINISTRATIVELY CHARGED TO EMPLOYEE, GENERAL ACCOUNTING OFFICE DISALLOWANCES, IRREGULAR TRAVEL CLAIMS PREVIOUSLY PAID, ETC., MAY BE ADJUSTED BY SET-OFF AGAINST THE EMPLOYEE'S ACCUMULATED BOND ACCOUNT TO THE EXTENT OF FUNDS IN SUCH BOND ACCOUNT, AND (2) IN CONNECTION THEREWITH, IT IS PERMISSIBLE TO CANCEL A BOND ISSUED BUT UNDELIVERED.

IN VIEW OF THE ABOVE QUESTIONS, YOUR DECISION IS FURTHER REQUESTED AS TO THE ORDER IN WHICH THE FINAL SALARY DUE AN EMPLOYEE SHOULD BE APPLIED:

(A) INDEBTEDNESS TO AGENCY WHICH MAY INVOLVE SALARY OVERPAYMENT TO EMPLOYEE; EXCESS DEDUCTIONS FOR RETIREMENT, WITHHOLDING TAX, AND BONDS; LOSS OF GOVERNMENT PROPERTY ADMINISTRATIVELY CHARGED TO EMPLOYEE; GENERAL ACCOUNTING OFFICE DISALLOWANCES; AND OTHER ESTABLISHED INDEBTEDNESS.

(B) WITHHOLDING TAX WHICH NORMALLY APPLIES TO THE FINAL SALARY DUE THE EMPLOYEE.

(C) AMOUNT OF AUTHORIZED BOND DEDUCTION FOR THE PAY PERIOD.

(D) RETIREMENT APPLICABLE TO THE FINAL SALARY DUE.

IT IS UNDERSTOOD FROM THE FIRST PARAGRAPH OF YOUR LETTER THAT THE QUESTIONS (PARTICULARLY NOS. 1 AND 3) RELATE TO SET-OFF OF FINAL SALARY PAYMENTS DUE AN EMPLOYEE OF THE UNITED STATES IN LIQUIDATION OF AN INDEBTEDNESS OF THE EMPLOYEE TO THE UNITED STATES.

IN VIEW OF THE POSITIVE PROVISIONS OF SECTION 1622, INTERNAL REVENUE CODE, AS AMENDED BY THE " CURRENT TAX PAYMENT ACT OF 1943" APPROVED JUNE 9, 1943, 57 STAT. 128, DIRECTING AN EMPLOYER TO WITHHOLD INCOME TAX FROM PAYMENTS OF WAGES, AND SECTION 1623 OF THE SAME CODE, 57 STAT. 137, IMPOSING A LIABILITY UPON THE EMPLOYER, OR UPON THE DESIGNATED AGENCY OF THE UNITED STATES (SEE SECTION 1624 OF THE CODE) FOR PAYMENT OF THE TAX THUS WITHHELD, IT IS NECESSARY TO CONCLUDE THE CONGRESS INTENDED THAT THE TAX OBLIGATION OF THE EMPLOYEE IN THE AMOUNT OF THE TAX WITHHELD SHALL HAVE PRIORITY OVER OTHER CLASSES OF INDEBTEDNESS OR OBLIGATION OF THE EMPLOYEE TO THE UNITED STATES, AND IT FOLLOWS, THEREFORE, THAT THERE IS NO AUTHORITY IN AN AGENT OF THE GOVERNMENT TO APPLY THE AMOUNT OF TAX WITHHELD FOR ANY PURPOSE OTHER THAN FOR PAYMENT OF THE TAX. ACCORDINGLY, QUESTION 1 IS ANSWERED IN THE NEGATIVE. OF COURSE, WHERE THE INDEBTEDNESS OF AN EMPLOYEE RESULTS FROM OVERDRAWN LEAVE OR OTHER OVERPAYMENT OF COMPENSATION, AN APPROPRIATE ACCOUNTING ADJUSTMENT IS REQUIRED IN ORDER THAT THE SALARY APPROPRIATION PROPERLY MAY BE CREDITED AND INTERNAL REVENUE COLLECTIONS PROPERLY CHARGED. 22 COMP. GEN. 1046; 23 ID. 16.

REFERRING TO QUESTION 2, THE PROCEDURE TO BE FOLLOWED IN MAKING THE ADJUSTMENTS NOTED (AS WELL AS OTHERS) NOW IS UNDER CONSIDERATION BY THIS OFFICE. ACCORDINGLY, NO ANSWER TO THIS QUESTION WILL BE STATED AT THIS TIME.

READING QUESTION 3 IN THE LIGHT OF THE FIRST PARAGRAPH OF YOUR LETTER, AS WELL AS THE CONCLUDING PORTION OF YOUR LETTER, SAID QUESTION IS TO RELATE TO BOND DEDUCTIONS WHETHER MADE FROM THE FINAL OR PRIOR CURRENT SALARY PAYMENTS, OR TO AN UNDELIVERED BOND WHERE THE SALARY DEDUCTIONS IN PAYMENT THEREOF WERE MADE FROM THE FINAL SALARY PAYMENT OR FROM PREVIOUS CURRENT SALARY PAYMENTS REMAINING TO THE CREDIT OF AN EMPLOYEE UPON FINAL SEPARATION FROM THE SERVICE.

IN AN ATTEMPT TO STIMULATE THE SALE OF UNITED STATES WAR SAVINGS BONDS, AND TO PROVIDE A METHOD OF SYSTEMATIC SAVINGS FOR THE EMPLOYEES OF THE GOVERNMENT, THE SECRETARY OF THE TREASURY, WITH THE APPROVAL OF THE PRESIDENT CONTAINED IN EXECUTIVE ORDER NO. 9135, DATED APRIL 16, 1942, PROMULGATED TREASURY DEPARTMENT CIRCULAR NO. 677 ( REVISED) MAY 13, 1942, ESTABLISHING THE " VOLUNTARY PAY-ROLL SAVINGS PLAN" WHICH SPECIFIED THE TERMS AND CONDITIONS UPON WHICH UNITED STATES WAR SAVINGS BONDS COULD BE PURCHASED UNDER SUCH A PLAN. THIS OFFICE HAS GIVEN CONSIDERATION THERETO AND STATED THAT IT WAS NOT REQUIRED TO OBJECT TO SUCH A PLAN. DECISION OF APRIL 20, 1942, B-25264, 21 COMP. GEN. 942. THE AFORESAID TREASURY DEPARTMENT CIRCULAR EMBODIES A NUMBER OF PROVISIONS DEFINING THE MECHANICS OF THE " VOLUNTARY PAY-ROLL SAVINGS PLAN," THE GIST OF THE PLAN BEING THAT THE EMPLOYEE AGREES TO PURCHASE A SAVINGS BOND BY AN ALLOTMENT WITHHELD FROM HIS COMPENSATION UPON THE GOVERNMENT'S PROMISE TO ISSUE AND DELIVER A SAVINGS BOND TO THE EMPLOYEE WHEN THE AMOUNT IN THE BOND ACCOUNT IS EQUIVALENT TO THE PURCHASE PRICE OF A BOND OF THE DENOMINATION REQUESTED IN HIS ALLOTMENT AUTHORIZATION.

THE EFFECT OF THE VOLUNTARY PAYROLL SAVINGS PLAN FOR PURCHASE OF BONDS, WHICH IS NOT SPECIFICALLY AUTHORIZED BY LAW, MERELY RESULTS IN A TEMPORARY WITHHOLDING OF CURRENT SALARY PAYMENTS OF CIVILIAN OFFICERS AND EMPLOYEES, AND THERE ARE FOR APPLICATION IN ANSWERING QUESTION 3 THE SAME RULES AS APPLY TO SET-OFF OF CURRENT OR FINAL SALARY PAYMENTS. THE AMOUNT TEMPORARILY WITHHELD FROM THE SALARY OF A CIVILIAN OFFICER OR EMPLOYEE FOR THE PURCHASE OF BONDS DOES NOT LOSE ITS IDENTITY AS CURRENT SALARY IF CURRENTLY WITHHELD, OR AS FINAL SALARY IF WITHHELD FROM THE FINAL SALARY PAYMENT. CF. 23 COMP. GEN. 850. IT IS WELL SETTLED THAT AMOUNTS CURRENTLY DUE AS SALARY ARE NOT AVAILABLE FOR SET-OFF AGAINST AN INDEBTEDNESS OF AN EMPLOYEE TO THE UNITED STATES WITHOUT THE EMPLOYEE'S CONSENT; BUT IT EQUALLY IS WELL SETTLED THAT AT TIME OF SEPARATION FROM THE SERVICE, THE AMOUNT OTHERWISE DUE AN EMPLOYEE IS AVAILABLE FOR SET-OFF AGAINST HIS INDEBTEDNESS TO THE UNITED STATES. 16 COMP. GEN. 161, 547, AND DECISIONS THEREIN CITED. ACCORDINGLY, IF THE NET CURRENT SALARY, THAT IS, THE SALARY REMAINING AFTER THE DEDUCTION HAS BEEN MADE FOR THE BOND PURCHASE, HAS BEEN PAID TO THE EMPLOYEE, THE AMOUNT THEREOF TEMPORARILY WITHHELD FOR PURCHASE OF BONDS MAY NOT BE APPLIED IN LIQUIDATION OF THE EMPLOYEE'S INDEBTEDNESS TO THE UNITED STATES WITHOUT HIS CONSENT, REGARDLESS OF WHETHER HE HAS BEEN SEPARATED FROM THE SERVICE. HOWEVER, THE ENTIRE AMOUNT OF A FINAL SALARY PAYMENT, INCLUDING THE AMOUNT THEREOF THAT OTHERWISE WOULD HAVE BEEN APPLIED TOWARD THE PURCHASE OF A BOND, IS AVAILABLE FOR SET-OFF IN LIQUIDATION OF THE EMPLOYEE'S INDEBTEDNESS TO THE UNITED STATES, WITH OR WITHOUT HIS CONSENT. AN UNDELIVERED BOND PURCHASED WITH DEDUCTIONS MADE FROM OTHER THAN A FINAL SALARY PAYMENT MAY NOT BE CANCELLED AND APPLIED TOWARD LIQUIDATION OF THE EMPLOYEE'S INDEBTEDNESS WITHOUT HIS CONSENT, BUT SHOULD BE DELIVERED TO THE EMPLOYEE. AS AN EMPLOYEE'S ENTIRE FINAL SALARY PAYMENT IS SUBJECT TO SET-OFF, A BOND SHOULD NOT BE PURCHASED WITH DEDUCTIONS MADE FROM THE FINAL SALARY PAYMENT OF AN EMPLOYEE WHO IS INDEBTED TO THE UNITED STATES. HOWEVER, IF, THROUGH INADVERTENCE OR OTHERWISE, A BOND IS PURCHASED WITH DEDUCTIONS MADE FROM THE FINAL SALARY PAYMENT OF AN EMPLOYEE WHO IS INDEBTED TO THE UNITED STATES, THE BOND MAY BE RETURNED TO THE TREASURY DEPARTMENT FOR CANCELLATION AND THE AMOUNT DEDUCTED FOR THE BOND PURCHASED FROM THE FINAL SALARY PAYMENT MAY BE APPLIED TOWARD LIQUIDATION OF THE INDEBTEDNESS WITHOUT THE CONSENT OF THE EMPLOYEE, BUT THE DEDUCTIONS MADE FROM EARLIER CURRENT SALARY PAYMENTS SHOULD BE RETURNED TO THE EMPLOYEE IN THE ABSENCE OF HIS CONSENT TO THE APPLICATION THEREOF TOWARD LIQUIDATION OF HIS INDEBTEDNESS. OF COURSE, IF AN EMPLOYEE CONSENTS, ANY BOND DEDUCTION OR THE VALUE OF UNDELIVERED BONDS AFTER CANCELLATION MAY BE APPLIED TOWARD LIQUIDATION OF HIS INDEBTEDNESS TO THE UNITED STATES. ALL FOUR OF THE ITEMS LISTED IN YOUR UNNUMBERED QUESTION--- THE CONCLUDING PARAGRAPH OF YOUR LETTER--- HAVE BEEN SUFFICIENTLY COVERED ABOVE EXCEPT ITEM (D), THE ONE PERTAINING TO RETIREMENT DEDUCTIONS. THE PROVISIONS OF THE CIVIL SERVICE RETIREMENT ACT, AS AMENDED (5 U.S.C. 719), REQUIRE A DEDUCTION AND DEPOSIT INTO THE RETIREMENT FUND OF 5 PERCENT OF THE BASIC COMPENSATION WITHOUT REGARD TO THE INDEBTEDNESS OR TAX OBLIGATION OF THE EMPLOYEE. COMP. GEN. 1000; 23 ID. 638, QUESTION 7 AT PAGE 644. OF COURSE, AS IN THE CASE OF THE WITHHOLDING TAX, WHERE THERE HAS BEEN AN OVERPAYMENT OF BASIC COMPENSATION AND UNLAWFUL DEPOSIT OF 5 PERCENT THEREOF IN THE RETIREMENT FUND, AN APPROPRIATE ACCOUNTING ADJUSTMENT LATER WOULD BE REQUIRED. WHILE, UNDER CERTAIN CIRCUMSTANCES, THE AMOUNT TO THE CREDIT OF AN EMPLOYEE IN THE RETIREMENT FUND IS AVAILABLE FOR SET-OFF TO LIQUIDATE HIS INDEBTEDNESS (SEE THE DECISIONS ABOVE CITED), NEVERTHELESS RETIREMENT DEDUCTION FROM A BASIC SALARY PAYMENT AND DEPOSIT THEREOF INTO THE RETIREMENT FUND ARE MANDATORY. ACCORDINGLY, IT WOULD APPEAR THAT FINAL SALARY PAYMENTS PROPERLY MAY BE APPLIED IN THE FOLLOWING ORDER: (1) RETIREMENT DEDUCTIONS FOR BASIC COMPENSATION; (2) WITHHOLDING TAX; (3) OTHER INDEBTEDNESS TO THE UNITED STATES; AND (4) AUTHORIZED BOND DEDUCTIONS IN THE ABSENCE OF A CANCELLATION OF THE ALLOTMENT.