B-82805, MARCH 14, 1949, 28 COMP. GEN. 514

B-82805, MARCH 14, 1949, 28 COMP. GEN. 514

OFFICERS AND EMPLOYEES - DE FACTO - RETENTION OF COMPENSATION ALREADY PAID WHERE ADMINISTRATIVE PERSONNEL ACTIONS, SUCH AS APPOINTMENTS, PROMOTIONS, OR REINSTATEMENTS, ARE FOUND AFTER A SUBSTANTIAL PERIOD OF TIME TO BE ERRONEOUS UPON POST AUDIT BY THE CIVIL SERVICE COMMISSION BUT NOT DUE TO BAD FAITH OR FRAUD EITHER ON THE PART OF THE EMPLOYEE OR THE ADMINISTRATIVE OFFICIALS, THE EMPLOYEE PROPERLY MAY BE CONSIDERED AS SERVING IN A DE FACTO STATUS UNDER THE UNAUTHORIZED PERSONNEL ACTION AND MAY BE PERMITTED TO RETAIN COMPENSATION RECEIVED BY HIM PRIOR TO THE TIME SUCH ERROR IS BROUGHT TO THE ATTENTION OF THE ADMINISTRATIVE OFFICIALS. 28 COMP. GEN. 69, MODIFIED.

COMPTROLLER GENERAL WARREN TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, MARCH 14, 1949:

THERE HAS BEEN CONSIDERED YOUR LETTER OF JANUARY 7, 1949, REQUESTING DECISION RESPECTING THE MATTER OF THE LIABILITY OF EMPLOYEES FOR REFUND OF COMPENSATION RECEIVED BY THEM AS A RESULT OF PERSONNEL ACTIONS TAKEN ADMINISTRATIVELY WHICH, UPON POST AUDIT BY THE CIVIL SERVICE COMMISSION, ARE FOUND TO BE ERRONEOUS BUT NOT DUE TO MISREPRESENTATION OR FRAUD ON THE PART OF THE ADMINISTRATIVE AGENCY OR OF THE EMPLOYEES.

IT IS STATED IN YOUR LETTER THAT CLARIFICATION OF THE ABOVE MENTIONED MATTER IS DESIRED BECAUSE OF THE HOLDING IN OFFICE DECISION OF JULY 30, 1948, B-75633, 28 COMP. GEN. 69, SAID HOLDING BEING TO THE EFFECT THAT WHERE IT IS FOUND BY THE CIVIL SERVICE COMMISSION UPON POST AUDIT OF PERSONNEL ACTIONS--- THE PROCEDURE ADOPTED UNDER THE RECENTLY INAUGURATED PROGRAM FOR THE DELEGATION TO THE VARIOUS AGENCIES OF THE AUTHORITY TO ACT FOR THE COMMISSION IN PERSONNEL MATTERS--- THAT AN EMPLOYEE DOES NOT HAVE THE QUALIFICATIONS NECESSARY FOR THE POSITION TO WHICH APPOINTED, PROMOTED, OR REINSTATED, AS THE CASE MAY BE, REFUND OF ALL COMPENSATION RECEIVED BECAUSE OF SUCH ERRONEOUS ACTION IS REQUIRED, WITHOUT REGARD TO THE BONA FIDES OF THE ADMINISTRATIVE OFFICIALS OR OF THE EMPLOYEE INVOLVED.

IT IS UNDERSTOOD THAT, AS A RULE, A SUBSTANTIAL PERIOD OF TIME ELAPSES BETWEEN THE DATE WHEN ADMINISTRATIVE ACTION IS TAKEN IN CASES OF THE NATURE HERE CONSIDERED AND THE DATE OF POST AUDIT BY THE COMMISSION REPRESENTATIVES. FURTHER, IT HAS BEEN POINTED OUT THAT ADMINISTRATIVE OFFICIALS ARE UNWILLING TO PROCESS PERSONNEL ACTIONS WHICH, IF LATER DETERMINED TO BE ERRONEOUS, WILL SUBJECT THE EMPLOYEE TO LIABILITY FOR REFUND FOR THE COMPENSATION RECEIVED THEREUNDER.

MANIFESTLY, A RULE WHICH WOULD SANCTION INDISCRIMINATE ADMINISTRATIVE PERSONNEL ACTIONS OR PERMIT EMPLOYEES TO OBTAIN FINANCIAL ADVANTAGE BY KNOWINGLY MISREPRESENTING THEIR QUALIFICATIONS IS NOT SOUND. ON THE OTHER HAND, RECOGNIZING THAT HONEST ERRORS ARE BOUND TO OCCUR IN THE ADMINISTRATION OF SUCH A BROAD PROGRAM OF DECENTRALIZED AUTHORITY SUCH AS IS DESCRIBED IN YOUR LETTER, IT APPEARS THAT A RULE WHICH PENALIZES EVERY ERROR, BE IT HONEST OR OTHERWISE, IS TOO HARSH. CONSEQUENTLY, HAVING IN MIND THE NECESSARY PERIOD OF DELAY BETWEEN THE DATE OF ADMINISTRATIVE ACTION AND THE DATE OF POST AUDIT BY THE COMMISSION, IT REASONABLY APPEARS THAT WHERE PERSONNEL ACTIONS ARE FOUND TO BE ERRONEOUS UPON POST AUDIT BUT THERE IS FOUND NO EVIDENCE OF BAD FAITH OR FRAUD EITHER ON THE PART OF THE EMPLOYEE OR THE ADMINISTRATIVE OFFICIALS INVOLVED, THE EMPLOYEE PROPERLY MAY BE CONSIDERED AS SERVING IN A DE FACTO STATUS UNDER THE UNAUTHORIZED PERSONNEL ACTION AND MAY BE PERMITTED TO RETAIN COMPENSATION RECEIVED BY HIM PRIOR TO THE TIME SUCH ERROR IS BROUGHT TO THE ATTENTION OF THE ADMINISTRATIVE OFFICIALS. TO THE EXTENT INDICATED, THE SAID DECISION OF JULY 30, 1948, IS MODIFIED.