B-56284, APRIL 2, 1946, 25 COMP. GEN. 687

B-56284: Apr 2, 1946

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GENERAL SUPPLY FUND - CHARGING CURRENTLY ACCRUED UNUSED ANNUAL LEAVE AS ANNUAL OPERATING EXPENSE IN THE CASE OF EMPLOYEES WHO ARE COMPENSATED IN WHOLE WITH MONEYS FROM THE GENERAL SUPPLY FUND. IS MADE PERMANENTLY AVAILABLE. 1946: REFERENCE IS MADE TO A LETTER OF FEBRUARY 27. AS FOLLOWS: YOUR DECISION IS REQUESTED AS TO WHETHER IT IS PERMISSIBLE TO CHARGE UNUSED ANNUAL LEAVE ACCRUED DURING THE CURRENT FISCAL PERIOD BY EMPLOYEES PAID FROM THE GENERAL SUPPLY FUND TO OPERATING COST APPLICABLE TO THAT FISCAL YEAR. THIS CONTINGENT LIABILITY IS COMPUTED ON THE BASIS OF THE EMPLOYEES SALARY RATES AT THE CLOSE OF THE ACCOUNTING PERIOD. LUMP SUM PAYMENTS MADE ARE CHARGED TO THE CONTINGENT LIABILITY AND NOT TO CURRENT OPERATING COST.

B-56284, APRIL 2, 1946, 25 COMP. GEN. 687

GENERAL SUPPLY FUND - CHARGING CURRENTLY ACCRUED UNUSED ANNUAL LEAVE AS ANNUAL OPERATING EXPENSE IN THE CASE OF EMPLOYEES WHO ARE COMPENSATED IN WHOLE WITH MONEYS FROM THE GENERAL SUPPLY FUND, WHICH, UNDER THE PROVISIONS OF THE ACT OF FEBRUARY 27, 1929, AS AMENDED, IS MADE PERMANENTLY AVAILABLE--- AS DISTINGUISHED FROM ANNUAL APPROPRIATIONS SUBJECT TO FISCAL YEAR LIMITATIONS--- AN AMOUNT EQUIVALENT TO THE COMPENSATION FOR UNUSED ANNUAL LEAVE ACCRUED DURING ANY FISCAL YEAR, COMPUTED ON THE BASIS OF THE EMPLOYEES' SALARY RATES AT THE CLOSE OF THE FISCAL YEAR, MAY BE CHARGED AS A CONTINGENT LIABILITY TO THE ANNUAL OPERATING EXPENSE OF THE FUND APPLICABLE TO THAT FISCAL YEAR. 24 COMP. GEN. 578, DISTINGUISHED.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE TREASURY, APRIL 2, 1946:

REFERENCE IS MADE TO A LETTER OF FEBRUARY 27, 1946, FROM THE GENERAL COUNSEL OF THE TREASURY, REQUESTING A DECISION UPON THE MATTER THEREIN PRESENTED, AS FOLLOWS:

YOUR DECISION IS REQUESTED AS TO WHETHER IT IS PERMISSIBLE TO CHARGE UNUSED ANNUAL LEAVE ACCRUED DURING THE CURRENT FISCAL PERIOD BY EMPLOYEES PAID FROM THE GENERAL SUPPLY FUND TO OPERATING COST APPLICABLE TO THAT FISCAL YEAR.

THE PRESENT ADMINISTRATIVE PROCEDURE PROVIDES FOR RECORDING UNUSED ANNUAL LEAVE AT THE CLOSE OF THE FISCAL YEAR AS A CHARGE TO OPERATING COST AND ESTABLISHING A RESERVE THEREFOR. THIS CONTINGENT LIABILITY IS COMPUTED ON THE BASIS OF THE EMPLOYEES SALARY RATES AT THE CLOSE OF THE ACCOUNTING PERIOD. LUMP SUM PAYMENTS MADE ARE CHARGED TO THE CONTINGENT LIABILITY AND NOT TO CURRENT OPERATING COST. THIS OFFICE IS COGNIZANT OF YOUR DECISION, B-47256 DATED JANUARY 30, 1945, WHEREIN THE QUESTION OF CHARGING THE CURRENT APPROPRIATION IS DECIDED. HOWEVER, IT IS BELIEVED THAT THERE WAS NO INTENT TO DISTURB THE INTEGRITY OF THE GENERAL SUPPLY FUND AS CREATED UNDER THE ACT OF FEBRUARY 27, 1929, 45 STAT. 1342. FURTHER, THE ACT PROVIDES FOR AN ANNUAL AUDIT OF THE ACCOUNTS OF THIS FUND AND, THE DEPOSIT OF ANY SURPLUS FOUND TO MISCELLANEOUS RECEIPTS.

IN VIEW OF THE NATURE OF THE GENERAL SUPPLY FUND, IT SEEMS REASONABLE TO CHARGE ACCRUED ANNUAL LEAVE TO THE CURRENT YEAR OPERATING COST.

GENERALLY, AN ANNUAL LEAVE STATUS IS SYNONYMOUS WITH A WORK OR DUTY STATUS AND THE COMPENSATION PAYABLE THEREFOR IS REQUIRED TO BE CHARGED TO THE FISCAL YEAR APPROPRIATION CURRENT AT THE TIME SUCH LEAVE ACTUALLY IS TAKEN. SEE 17 COMP. GEN. 641. THE GENERAL RULE IS NOT MODIFIED BY THE PROVISIONS OF THE ACT OF DECEMBER 21, 1944, 58 STAT. 845, 5 U.S.C. 61B-D, DIRECTING THE PAYMENT OF COMPENSATION IN A LUMP SUM FOR ACCRUED AND ACCUMULATED ANNUAL LEAVE UNDER CERTAIN CIRCUMSTANCES. THE RIGHT OF AN EMPLOYEE TO SUCH LUMP-SUM PAYMENT ACCRUES ON THE LAST DAY OF ACTIVE SERVICE AND, AS WAS POINTED OUT IN THE DECISION OF JANUARY 30, 1945, 24 COMP. GEN. 578--- MENTIONED IN THE GENERAL COUNSEL'S LETTER--- THE FISCAL YEAR APPROPRIATION AVAILABLE FOR THE PAYMENT OF SALARY ON THAT DATE IS THE ONLY APPROPRIATION AVAILABLE FOR THE PAYMENT THEREOF.

HOWEVER, IN THE CASE OF "EMPLOYEES PAID FROM THE GENERAL SUPPLY FUND"--- QUOTING FROM THE FIRST PARAGRAPH OF THE SUBMISSION--- FISCAL YEAR APPROPRIATIONS ARE NOT INVOLVED, THE EMPLOYEES BEING COMPENSATED IN WHOLE WITH MONEYS MADE PERMANENTLY AVAILABLE FOR USE IN CONDUCTING OPERATIONS UNDER THE GENERAL SUPPLY FUND. THE EXPENDITURE OF SUCH MONEYS IS NOT RESTRICTED BY THE FISCAL YEAR LIMITATIONS WHICH GOVERN THE USE OF ANNUAL APPROPRIATIONS, SINCE ALL REIMBURSEMENTS RECEIVED BY THE GENERAL SUPPLY FUND AUTOMATICALLY ARE REAPPROPRIATED FOR THE SAME PURPOSE AS THE ORIGINAL FUND. SEE THE ACT OF FEBRUARY 27, 1929, 45 STAT. 1342, AS AMENDED, 41 U.S.C. 7, ET SEQ.

UNDER THE CIRCUMSTANCES, I HAVE TO ADVISE THAT, IN THE CASE OF EMPLOYEES PAID FROM THE GENERAL SUPPLY FUND, THERE IS PERCEIVED NO LEGAL OBJECTION TO THE CHARGING OF COMPENSATION FOR UNUSED ANNUAL LEAVE ACCRUED DURING ANY FISCAL YEAR TO THE OPERATING COST APPLICABLE TO THAT FISCAL YEAR, IF IT BE DETERMINED ADMINISTRATIVELY THAT SUCH PROCEDURE WILL RESULT IN MORE ACCURATELY REFLECTING THE ANNUAL OPERATING EXPENSE OF THE FUND AND IN INSURING THE MAINTENANCE OF ITS INTEGRITY.