B-4913, AUGUST 1, 1939, 19 COMP. GEN. 135

B-4913: Aug 1, 1939

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EXCHANGE - LOSS BY - OFFICERS AND EMPLOYEES IN FOREIGN COUNTRIES - DECISION RETROACTIVE APPLICATION CONTENTION ( WHERE THE DISALLOWANCE OF CREDIT IN A DISBURSING OFFICER'S ACCOUNTS FOR EXCESS EXCHANGE LOSSES PAID WAS IN ACCORDANCE WITH THE PROVISIONS OF THE APPLICABLE EXECUTIVE ORDER IN FORCE AT THE TIME THE LOSSES WERE INCURRED. CREDIT MAY NOT BE ALLOWED FOR THE AMOUNT INVOLVED ON THE BASIS THAT RETROACTIVE APPLICATION IS BEING GIVEN A DECISION OF THE ACCOUNTING OFFICE. AS FOLLOWS: REFERENCE IS MADE TO AN OUTSTANDING NOTICE OF EXCEPTION AGAINST D.O. THE CLAIM FOR CURRENCY EXCHANGE LOSSES REPRESENTED BY THIS VOUCHER WAS COMPUTED IN STRICT ACCORDANCE WITH THE APPROVED METHOD FOR COMPUTATION OF CURRENCY EXCHANGE LOSSES ACCEPTED IN PRACTICE AS THE PROPER METHOD AT THE TIME THE VOUCHER WAS PREPARED AND PAID.

B-4913, AUGUST 1, 1939, 19 COMP. GEN. 135

EXCHANGE - LOSS BY - OFFICERS AND EMPLOYEES IN FOREIGN COUNTRIES - DECISION RETROACTIVE APPLICATION CONTENTION ( WHERE THE DISALLOWANCE OF CREDIT IN A DISBURSING OFFICER'S ACCOUNTS FOR EXCESS EXCHANGE LOSSES PAID WAS IN ACCORDANCE WITH THE PROVISIONS OF THE APPLICABLE EXECUTIVE ORDER IN FORCE AT THE TIME THE LOSSES WERE INCURRED, CREDIT MAY NOT BE ALLOWED FOR THE AMOUNT INVOLVED ON THE BASIS THAT RETROACTIVE APPLICATION IS BEING GIVEN A DECISION OF THE ACCOUNTING OFFICE, THE DECISION HAVING PROMULGATED NO NEW RULE OR REGULATION BUT HAVING MERELY APPLIED THE REGULATIONS PRESCRIBED BY THE PRESIDENT.

COMPTROLLER GENERAL BROWN TO THE SECRETARY OF THE TREASURY, AUGUST 1, 1939;

THERE HAS BEEN CONSIDERED YOUR LETTER OF JUNE 13, 1939, AS FOLLOWS:

REFERENCE IS MADE TO AN OUTSTANDING NOTICE OF EXCEPTION AGAINST D.O. VOUCHER NO. 2, JULY 1936, IN THE ACCOUNTS OF MR. C. M. P. CROSS, DISTRICT ACCOUNTING AND DISBURSING OFFICER, PARIS, FRANCE.

THE CLAIM FOR CURRENCY EXCHANGE LOSSES REPRESENTED BY THIS VOUCHER WAS COMPUTED IN STRICT ACCORDANCE WITH THE APPROVED METHOD FOR COMPUTATION OF CURRENCY EXCHANGE LOSSES ACCEPTED IN PRACTICE AS THE PROPER METHOD AT THE TIME THE VOUCHER WAS PREPARED AND PAID. IT APPEARS THAT THE SUSPENSION AGAINST THIS VOUCHER RESULTS FROM A RETROACTIVE APPLICATION OF DECISIONS A -59705 (16 COMP. GEN. 509; ID. 1016).

THE ACT OF MARCH 26, 1934 (48 STAT. 466), AUTHORIZES THE ANNUAL APPROPRIATION OF SUCH SUMS AS MAY BE NECESSARY TO ENABLE THE PRESIDENT, IN HIS DISCRETION AND UNDER SUCH REGULATIONS AS HE MAY PRESCRIBE, TO PROVIDE FOR PAYMENTS "TO MEET LOSSES SUSTAINED * * * BY OFFICERS, ENLISTED MEN, AND EMPLOYEES OF THE UNITED STATES WHILE IN SERVICE IN FOREIGN COUNTRIES DUE TO THE APPRECIATION OF FOREIGN CURRENCIES IN THEIR RELATION TO THE AMERICAN DOLLAR.'

PURSUANT TO THIS AUTHORITY OF LAW, THE PRESIDENT, BY EXECUTIVE ORDER, HAD PROMULGATED AND PRESCRIBED REGULATIONS FOR THE PAYMENT OF LOSSES SUSTAINED BY OFFICERS AND EMPLOYEES OF THE UNITED STATES IN FOREIGN COUNTRIES ON ACCOUNT OF THE APPRECIATION OF FOREIGN CURRENCIES IN THEIR RELATION TO THE AMERICAN DOLLAR ( EXECUTIVE ORDER NO. 6928 OF DECEMBER 24, 1934, AS AMENDED BY EXECUTIVE ORDER NO. 7312 OF MARCH 9, 1936; E.O. NO. 7403 OF JUNE 26, 1936; E.O. NO. 7547 OF FEBRUARY 1, 1937; AND E.O. NO. 7766 OF DECEMBER 10, 1937). THESE REGULATIONS ( EXECUTIVE ORDERS) AS A WHOLE, WHEN READ IN THE LIGHT OF THE PURPOSE OF THE ACT OF MARCH 26, 1934, SUPRA, MUST BE VIEWED AS ESTABLISHING THE PROPER METHOD OF COMPUTATION TO DETERMINE ADDITIONAL AMOUNTS TO BE PAID AS CURRENCY EXCHANGE LOSSES (16 COMP. GEN. 666). THE POWER TO MAKE REGULATIONS NECESSARILY IMPLIES THE POWER TO ALTER, AMEND, MODIFY, OR REVOKE (21 COMP. DEC. 484), AND IT THEREFORE NECESSARILY FOLLOWS THAT BOTH THE POWER TO PRESCRIBE AND THE POWER TO ALTER, AMEND, MODIFY, AND REVOKE CURRENCY EXCHANGE LOSS REGULATIONS REPOSES IN THE PRESIDENT OF THE UNITED STATES.

THIS DEPARTMENT HAS FOLLOWED THE SUPPLEMENTAL RULES AND REGULATIONS PROMULGATED BY YOUR OFFICE FOR THE COMPUTATION OF CURRENCY EXCHANGE LOSSES IN THE BELIEF THAT SUCH ACTION WOULD ASSIST YOUR OFFICE IN THE PROPER PERFORMANCE OF ITS NECESSARY AUDIT FUNCTIONS. IT IS WELL ESTABLISHED THAT REGULATIONS CAN HAVE NO RETROACTIVE EFFECT (20 COMP. DEC. 482, 4 COMP. GEN. 480) AND SINCE THE SUPPLEMENTAL RULES AND REGULATIONS FOR THE COMPUTATION OF CURRENCY EXCHANGE LOSSES PROMULGATED BY YOUR OFFICE IN DECISIONS A-59705 (16 COMP. GEN. 509; ID. 1016) APPARENTLY ARE BEING GIVEN RETROACTIVE EFFECT IN ORDER TO ARRIVE AT A SUSPENSION IN THE VOUCHER REFERRED TO ABOVE, IT IS REQUESTED THAT THE SUSPENSION AGAINST THE VOUCHER BE RECONSIDERED AND REMOVED IN ITS ENTIRETY.

THIS OFFICE HAS NOT, AS MIGHT BE INFERRED FROM THE CONCLUDING PARAGRAPH OF YOUR LETTER, SUPRA, PROMULGATED ANY REGULATIONS GOVERNING THE CURRENCY APPRECIATION LOSS PAYMENTS UNDER THE SAID ACT OF MARCH 26, 1934. IT HAS MERELY APPLIED THE REGULATIONS PRESCRIBED BY THE PRESIDENT.

PARAGRAPH 3 (C) OF EXECUTIVE ORDER NO. 6928, DATED DECEMBER 24, 1934, EFFECTIVE JANUARY 1, 1935, PROVIDES:

(C) IN CASE OF EMPLOYEES TRAVELING IN FOREIGN COUNTRIES UNDER OFFICIAL ORDERS, NOT EMPLOYED IN OR ON ASSIGNMENT OR DETAIL TO A POST OF DUTY IN A FOREIGN COUNTRY, NO PART OF THE EMPLOYEE'S SALARY NOT CONVERTED FOR EXPENDITURE ABROAD SHALL BE INCLUDED IN THE LOSS REFERRED TO FOR THE PURPOSES OF THESE REGULATIONS.

VOUCHER NO. 2, REFERRED TO IN YOUR SUBMISSION, INVOLVED PAYMENT TO MRS. HENRIETTA S. KLOTZ, ASSISTANT TO THE SECRETARY OF THE TREASURY, FOR LOSSES UPON HER SALARY FOR THE PERIOD JULY 1 TO JULY 29, 1936, WHILE SHE WAS TRAVELING, BUT NOT PERMANENTLY STATIONED, IN FOREIGN COUNTRIES. IN THE AUDIT OF SAID VOUCHER, FOR THE PURPOSE OF DETERMINING THE AMOUNT OF SALARY CONVERTED INTO FOREIGN CURRENCY AND OF ASCERTAINING THE AMOUNT UPON WHICH EXCHANGE LOSS WAS PAYABLE, THERE WAS DEDUCTED FROM THE TOTAL AMOUNT SHOWN TO HAVE BEEN CONVERTED THE AMOUNT PAID TO HER AS PER DIEM IN LIEU OF SUBSISTENCE AND EXCHANGE LOSS THEREON, AS SUCH AMOUNTS COULD NOT HAVE BEEN CORRECTLY INCLUDED AS SALARY, WITH THE RESULT THAT THE EXCHANGE LOSSES ON THE AMOUNT SO ESTABLISHED AS SALARY EXPENDITURES AMOUNTED TO $134.61 LESS THAN WAS PAID ON THE VOUCHER, AND CREDIT FOR THE EXCESS PAYMENT WAS DISALLOWED.

IN DECISION 16 COMP. GEN. 509, OF NOVEMBER 20, 1936, IT WAS HELD, QUOTING FROM THE SYLLABUS: * * *

EXCHANGE LOSSES ON SALARY PAYMENTS CONVERTED FOR EXPENDITURE ABROAD BY OFFICERS AND EMPLOYEES TRAVELING, BUT NOT STATIONED IN FOREIGN COUNTRIES, ARE FOR COMPUTATION ON THE BASIC RATE APPLICABLE TO THE COUNTRY IN WHICH THE CONVERSION IS ACTUALLY MADE, AND BY DEDUCTING FROM AMOUNTS SO CONVERTED THE TOTAL OF ANY PER DIEM IN LIEU OF SUBSISTENCE AND EXCHANGE LOSS THEREON, SALARY EXCHANGE LOSSES BEING COMPUTED ONLY UPON THE EXCESS CONVERSION.

THIS DECISION DID NOT CHANGE OR MODIFY ANY PREVIOUS RULING BY THIS OFFICE NOR WAS IT THE FIRST DECISION UPON THE POINT INVOLVED, SIMILAR DECISIONS HAVING BEEN RENDERED JUNE 3, 1936, A-70594, AND OCTOBER 1, 1936, A-74738.

THE DISALLOWANCE OF CREDIT FOR THE EXCESS EXCHANGE LOSSES PAID TO MRS. KLOTZ WAS IN ACCORDANCE WITH THE PROVISIONS OF THE EXECUTIVE ORDER IN FORCE AT THE TIME THE LOSSES WERE INCURRED AND, THEREFORE, WAS CORRECT.