B-161180, JANUARY 12, 1968, 47 COMP. GEN. 362

B-161180, JANUARY 12, 1968, 47 COMP. GEN. 362

STATION ALLOWANCES - MILITARY PERSONNEL - EXCESS LIVING COST OUTSIDE UNITED STATES, ETC. - REIMBURSEMENT BASIS THE PAYMENT OF A HIGHER HOUSING PER DIEM RATE TO MEMBERS OF THE UNIFORMED SERVICES FOR THE FIRST 2 MONTHS OF ENTITLEMENT AFTER ENTERING ON AN OVERSEAS TOUR OF DUTY AND A LOWER RATE FOR THE REMAINDER OF THE TOUR FOR THE PURPOSE OF ACCELERATING THE REIMBURSEMENT OF MOVING-IN EXPENSES WOULD CONSTITUTE AN ADVANCE PAYMENT OF THAT PORTION OF THE PER DIEM ALLOCABLE TO THE ACCELERATED REIMBURSEMENT, AND SUCH A PAYMENT IS NOT WITHIN THE CONTEMPLATION OF 37 U.S.C. 405 AUTHORIZING A PER DIEM THAT CONSIDERS ALL ELEMENTS OF THE COST OF LIVING TO MEMBERS STATIONED OUTSIDE THE UNITED STATES, REGARDLESS OF WHEN COSTS MAY HAVE TO BE PAID. THEREFORE, THE PROPOSAL TO ESTABLISH TWO HOUSING ALLOWANCE INDEXES, ONE APPLYING FOR THE PREPONDERANCE OF A MEMBER'S TOUR WHICH WOULD REFLECT RECURRING COSTS AND ONE APPLYING DURING THE FIRST 2 MONTHS OF THE TOUR WHICH WOULD REFLECT THE INCLUSION OF THE NONRECURRING EXPENSES MAY NOT BE LEGALLY ADOPTED.

TO THE SECRETARY OF THE NAVY, JANUARY 12, 1968:

FURTHER REFERENCE IS MADE TO LETTER OF JUNE 5, 1967, FROM THE UNDER SECRETARY OF THE NAVY, REQUESTING DECISION WHETHER THE PROPOSED PROCEDURES EXPLAINED THEREIN FOR DETERMINING RATES OF HOUSING ALLOWANCES FOR MEMBERS OF THE UNIFORMED SERVICES STATIONED OUTSIDE THE UNITED STATES ARE LEGALLY PERMISSIBLE. THE REQUEST WAS ASSIGNED PDTATAC CONTROL NO. 67-18 BY THE PER DIEM, TRAVEL AND TRANSPORTATION ALLOWANCE COMMITTEE.

THE UNDER SECRETARY SAYS THAT IN CONSTRUCTING A HOUSING ALLOWANCE RATE, AN AVERAGE COST IS DERIVED BY COMPUTING THE ACTUAL EXPENSE DATA CONTAINED IN REQUIRED PERIODIC REPORTS SUBMITTED BY THE INDIVIDUAL MEMBERS AT THE OVERSEAS DUTY STATIONS. THE EXPENSE DATA INCLUDE THE COST OF RENT, UTILITIES, HEAT, WATER, AND MOVING-IN EXPENSES.

UNDER THE PRESENT METHOD OF COMPUTING THE HOUSING INDEX THE AVERAGE INITIAL OCCUPANCY (MOVING-IN) AND DEPARTURE (MOVING-OUT) COSTS, IF ANY, ARE PRORATED OVER THE AVERAGE TOUR OF DUTY AND THE PRORATED COST, IF ANY, IS ADDED TO THE AVERAGE RECURRING MONTHLY EXPENSES AND THE TOTAL IS DIVIDED BY THE AVERAGE BASIC ALLOWANCE FOR QUARTERS TO OBTAIN THE INDEXES.

THE UNDER SECRETARY STATES THAT IN MANY OF THE FOREIGN COUNTRIES, THE HOUSES AVAILABLE FOR RENTAL BY THE MEMBERS OF THE UNIFORMED SERVICES ARE LACKING IN THE FACILITIES CUSTOMARILY FOUND IN RENTED HOUSES IN THE UNITED STATES, AND THAT IN ORDER TO MAKE THE HOUSE LIVABLE, THE MEMBER IS REQUIRED TO EXPEND A CONSIDERABLE AMOUNT OF HIS PERSONAL FUNDS FOR SUCH THINGS AS INSTALLATION OF GAS OR ELECTRICITY, SUPPLEMENTAL HEATING EQUIPMENT, PAINTING, PAPERING, PLASTERING, SCREENING, SHELVING, KITCHEN CABINETS AND COUNTERS, TRANSFORMERS, WATER CANS, FILTERS, PURIFIERS, HOT WATER HEATERS, REAL ESTATE OR LEGAL FEES, ETC.

THE UNDER SECRETARY FURTHER SAYS IT IS PROPOSED THAT IN CASES WHERE THE INITIAL OCCUPANCY COSTS ARE SIGNIFICANT THAT TWO INDEXES BE DERIVED -- ONE APPLYING FOR THE PREPONDERANCE OF THE TOUR WHICH WOULD REFLECT RECURRING COSTS ONLY, AND ONE APPLYING DURING THE FIRST 2 MONTHS WHICH WOULD REFLECT THE INCLUSION OF THE NONRECURRING EXPENSE. IN SUCH CASES AN AMOUNT EQUAL TO ONE-HALF THE AVERAGE NONRECURRING EXPENSES WOULD BE ADDED TO THE RECURRING EXPENSES AND THE INDEX DERIVED FROM THIS TOTAL WOULD APPLY DURING THE FIRST 2 MONTHS.

ALSO, HE SAYS IT IS PROPOSED THAT IN CASES WHERE DEPARTURE EXPENSES ARE FAIRLY SIGNIFICANT, AN AMOUNT EQUAL TO THE AVERAGE OF SUCH EXPENSES WOULD BE ADDED TO THE RECURRING EXPENSES AND THE INDEX DERIVED FROM THIS TOTAL WOULD APPLY DURING THE LAST MONTH. IT IS EXPLAINED, HOWEVER, THAT THERE ARE PRESENTLY NO CASES WHERE THIS PROCEDURE WOULD BE APPROPRIATE.

IN JUSTIFICATION OF THE PROPOSED CHANGE, THE UNDER SECRETARY SAYS THAT THE SUGGESTED METHOD HAS ADVANTAGES IN THAT IT WOULD PROVIDE A GREATER ALLOWANCE DURING THE MONTH IN WHICH THE GREATER COSTS (NONRECURRING EXPENSES) ARE INCURRED. ALSO, HE SAYS THAT SHOULD A MEMBER NOT COMPLETE THE AVERAGE TOUR HE WILL BE ASSURED OF COMPENSATION FOR THE AVERAGE NONRECURRING EXPENSES. FURTHER, HE SAYS THAT IF THE EXCHANGE RATE CHANGES SUBSTANTIALLY, A MEMBER GENERALLY WILL BE COMPENSATED FOR THE NONRECURRING EXPENSES AT THE RATE AT WHICH THE EXPENSES WERE INCURRED.

THE UNDER SECRETARY ATTACHED AN EXAMPLE OF THE PROPOSED CHANGE SHOWING THE HOUSING ALLOWANCE INDEX UNDER THE CIRCUMSTANCES DESCRIBED AND REQUESTS OUR DECISION WHETHER THIS PROCEDURE IS WITHIN THE INTENT AND SCOPE OF THE STATUTORY AUTHORITY OF 37 U.S.C. 405.

AS WE UNDERSTAND IT, THE NONRECURRING EXPENSES ARE THE MOVING-IN COSTS OR INITIAL OCCUPANCY EXPENSES SUCH AS INITIAL REPAIRS, ALTERATIONS, AND IMPROVEMENTS AND THE RECURRING EXPENSES ARE PRIMARILY RENT AND UTILITY TYPE COSTS. THE RECORD BEFORE US SHOWS THAT IT HAS LONG BEEN THE ADMINISTRATIVE VIEW THAT SINCE ALL THE EXPENSES (NONRECURRING AND RECURRING EXPENSES) WERE HOUSING EXPENSES, WHICH IN THE UNITED STATES WOULD BE PAID BY THE LANDLORD AND PASSED ON TO THE TENANT IN THE MONTHLY RENTAL, THEY COULD BE CONSIDERED AS A FORM OF RENTAL AVERAGED AMONG ALL MEMBERS ENTITLED TO THE ALLOWANCE AND DISTRIBUTED OVER THE ENTIRE TOUR OF DUTY FOR THE AREA INVOLVED. FURTHER, IT APPEARS FROM A MEMORANDUM DATED OCTOBER 5, 1967, AND ENCLOSURES, TO US FROM THE PER DIEM, TRAVEL AND TRANSPORTATION ALLOWANCE COMMITTEE RELATIVE TO THIS MATTER THAT IT HAS LONG BEEN THE ADMINISTRATIVE PRACTICE TO INCLUDE THE NONRECURRING EXPENSES AS WELL AS THE RECURRING EXPENSES AS ELEMENTS OF RENTAL COST IN THE COMPUTATION OF THE OVERSEAS HOUSING ALLOWANCE.

SECTION 405 OF TITLE 37, U.S. CODE, PROVIDES THAT WITHOUT REGARD TO THE MONETARY LIMITATIONS OF THAT TITLE, THE SECRETARIES CONCERNED MAY AUTHORIZE THE PAYMENT OF A PER DIEM, CONSIDERING ALL ELEMENTS OF THE COST- OF-LIVING TO MEMBERS OF THE UNIFORMED SERVICES UNDER THEIR JURISDICTION AND THEIR DEPENDENTS, INCLUDING THE COST OF QUARTERS,SUBSISTENCE, AND OTHER NECESSARY INCIDENTAL EXPENSES, TO SUCH A MEMBER WHO IS ON DUTY OUTSIDE THE UNITED STATES OR IN HAWAII OR ALASKA, WHETHER OR NOT HE IS IN A TRAVEL STATUS, EXCEPT THAT DEPENDENTS MAY NOT BE CONSIDERED IN DETERMINING THE PER DIEM ALLOWANCE FOR A MEMBER IN A TRAVEL STATUS. THE STATUTE AUTHORIZES THE PAYMENT OF A PER DIEM AND NOT SEPARATE HOUSING AND COST-OF-LIVING ALLOWANCES.

THE PURPOSE OF THE STATUTE IS TO PROVIDE SOME MEASURE OF REIMBURSEMENT FOR THE EXCESS LIVING COSTS EXPERIENCED BY MEMBERS ON DUTY AT PLACES OUTSIDE THE UNITED STATES. THIS PURPOSE IS EXPRESSLY RECOGNIZED BY THE JOINT TRAVEL REGULATIONS. PARAGRAPH M4301-1 OF THOSE REGULATIONS DECLARES THAT COST-OF-LIVING ALLOWANCES ARE AUTHORIZED FOR THE PURPOSE OF DEFRAYING THE AVERAGE EXCESS COSTS EXPERIENCED BY MEMBERS ON PERMANENT DUTY AT PLACES OUTSIDE THE UNITED STATES, THE EXCESS COSTS TO BE DERIVED BY COMPARISON OF THE COSTS IN EACH AREA OUTSIDE THE UNITED STATES WITH THE AVERAGE COST-OF-LIVING AND HOUSING OF SIMILAR MEMBERS IN THE UNITED STATES.

WITH RESPECT TO THE PROPOSAL TO ESTABLISH TWO HOUSING ALLOWANCE INDEXES, ONE APPLYING FOR THE PREPONDERANCE OF THE MEMBER'S TOUR WHICH WOULD REFLECT RECURRING COSTS AND ONE APPLYING DURING THE FIRST 2 MONTHS WHICH WOULD REFLECT THE INCLUSION OF THE NONRECURRING EXPENSE, IT APPEARS THAT BASICALLY, THE PURPOSE IS TO PERMIT THE MEMBER TO BE REIMBURSED FOR THE MOVING IN EXPENSES IN THE FIRST 2 MONTHS OF HIS TOUR OF DUTY.

AS INDICATED ABOVE, 37 U.S.C. 405 DOES NOT AUTHORIZE REIMBURSEMENT OF ACTUAL EXPENSES BUT AUTHORIZES THE PAYMENT OF A PER DIEM. IN AUTHORIZING A PER DIEM, IT CLEARLY HAS REFERENCE TO THE OVERALL COST OF-LIVING OF MEMBERS SERVING IN OVERSEAS AREAS, REGARDLESS OF WHEN ANY OF THE PARTICULAR COSTS MAY HAVE TO BE PAID; AND, WHEN A PER DIEM IS PRESCRIBED IN ACCORDANCE WITH THE STATUTE IT REPRESENTS A COMMUTATION ON A DAILY BASIS OF THE AVERAGE EXCESS LIVING COSTS OF ALL MEMBERS CONCERNED AND IS PAYABLE IN PROPER CASES WITHOUT REGARD TO WHEN OR WHETHER THE ACTUAL COSTS IN ANY INDIVIDUAL CASE ARE INCURRED.

THE PAYMENT OF A HIGHER HOUSING PER DIEM RATE FOR THE FIRST 2 MONTHS OF ENTITLEMENT AFTER ENTERING ON AN OVERSEAS TOUR OF DUTY AND A LOWER RATE FOR THE REMAINDER OF THE TOUR FOR THE PURPOSE OF ACCELERATING THE REIMBURSEMENT OF ANY HOUSING COST-OF-LIVING ELEMENT WOULD CONSTITUTE AN ADVANCE PAYMENT OF THAT PORTION OF THE PER DIEM ALLOCABLE TO THE ELEMENT CONCERNED. SECTION 405 DOES NOT AUTHORIZE OR CONTEMPLATE ADVANCE PAYMENTS OF PER DIEM BASED ON SPECIAL ELEMENTS OF THE EXPENSES INVOLVED AND IT IS OUR VIEW THAT THE PROPOSED PROCEDURES MAY NOT BE LEGALLY ADOPTED UNDER THAT SECTION.

OUR DECISION OF DECEMBER 11, 1967, 47 COMP. GEN.--- IS NOT IN CONFLICT WITH THE CONCLUSION REACHED HEREIN. IN THAT DECISION WE HELD THAT 37 U.S.C. 405 AUTHORIZED THE SECRETARIES TO PRESCRIBE, ON A BASIS CONSISTENT WITH THE LANGUAGE AND INTENT OF THE STATUTE AS INDICATED IN THE DECISION AND WITH APPROPRIATE ADMINISTRATIVE CONTROLS, DIFFERENT PER DIEM RATES AT A GIVEN STATION ON THE BASIS OF DIFFERENT COSTS INCURRED BY DIFFERENT GROUPS OF MILITARY PERSONNEL AT THAT STATION. THAT APPLICATION OF THE STATUTE, HOWEVER, DOES NOT STAND FOR THE PROPOSITION THAT UNDER THE TERMS OF THE LAW, DIFFERENT PER DIEM RATES MAY BE FIXED WITHIN ANY OF THE DIFFERENT GROUPS OF INDIVIDUALS FOR THE PURPOSE OF ACCELERATING REIMBURSEMENT OF ANY PARTICULAR ELEMENT OF COST-OF-LIVING BY ADVANCING THE PAYMENT OF A PORTION OF THE PER DIEM.