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[Claim for Reimbursement of Two Loan Fees]

B-212326 Nov 29, 1983
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Highlights

GAO considered whether an employee of the Department of Agriculture was entitled to reimbursement of two loan fees incurred in connection with a land purchase. The employee was transferred to a new duty station, and he purchased a residence on 50 acres of land. The employing agency denied his claim for reimbursement of these real estate costs based on its determination that they were finance charges. However, the agency informed him that, if he obtained a breakdown of the charges included in the fees and a monetary amount for each item, it would reconsider his claim to determine if any part of either fee was reimbursable. Although the employee submitted a letter from the lender listing the items included in the two fees, the lender failed to provide a breakdown of the cost for each item. GAO determined that: (1) lump-sum loan fees, without a listing of the services covered and an allocation of the amount for each such item, are considered finance charges that are not reimbursable as real estate expenses for the purchase of a new residence; (2) the agency should have prorated the real estate purchase expenses; and (3) only the pro rata portion of otherwise reimbursable real estate expenses related to the purchase of the residence site may be paid. Accordingly, no basis was found for reimbursing the employee for any portion of either of the loan fees claimed.

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