B-144839, DEC. 13, 1966

B-144839, DEC. 13, 1966

TO THE SECRETARY OF THE ARMY:

FURTHER REFERENCE IS MADE TO LETTER DATED NOVEMBER 9, 1966, FROM THE ASSISTANT SECRETARY OF THE ARMY (FINANCIAL MANAGEMENT) REQUESTING A DECISION WHETHER THE AUTHORITY GRANTED BY PUBLIC LAW 89-26 TO WAIVE THE RIGHT OF RECOVERY OF AN ADVANCE OF PAY MAY BE EXERCISED SUBSEQUENT TO THE DATE THE MEMBER HAS COMPLETED REPAYMENT THEREOF, AND THUS ENTITLE THE MEMBER TO REIMBURSEMENT OF THE AMOUNT SO WAIVED. THE REQUEST WAS ASSIGNED CONTROL NO. SS-A-935 BY THE MILITARY PAY AND ALLOWANCE COMMITTEE.

THE CIRCUMSTANCES PROMPTING THE REQUEST FOR DECISION ARE SET OUT IN THE LETTER FROM THE ASSISTANT SECRETARY. IT IS STATED THAT THE ACT OF MAY 22, 1965, PUBLIC LAW 89-26, 79 STAT. 116, WHICH AMENDED TITLE 37, U.S. CODE, BY ADDING A NEW SECTION 405A FOLLOWING SECTION 405, TO AUTHORIZE PAYMENT OF SPECIAL ALLOWANCES TO DEPENDENTS OF MEMBERS OF THE UNIFORMED SERVICES TO OFFSET EXPENSES INCIDENT TO THEIR EVACUATION, ALSO AMENDED SECTION 1006 (C) OF TITLE 37, TO AUTHORIZE WAIVER OF RECOVERY OF NOT MORE THAN ONE MONTH'S BASIC PAY PREVIOUSLY ADVANCED UNDER THAT SECTION INCIDENT TO THE ORDERED EVACUATION OF THE MEMBER'S DEPENDENTS.

THE ASSISTANT SECRETARY SAYS THAT THREE MEMBERS OF THE UNITED STATES ARMY HAVE SUBMITTED APPLICATIONS FOR WAIVER OF RECOVERY OF ADVANCE OF PAY AS AUTHORIZED BY PUBLIC LAW 89-26. A TYPICAL CASE, HE SAYS, INVOLVES A MEMBER WHO WAS ASSIGNED TO HEADQUARTERS, MILITARY ASSISTANCE COMMAND, VIETNAM, SAIGON, VIETNAM, DURING THE PERIOD OCTOBER 31, 1964 THROUGH OCTOBER 29, 1965. CONCURRENT TRAVEL OF HIS WIFE AND DEPENDENT DAUGHTER TO THE OVERSEAS COMMAND WAS AUTHORIZED. IN FEBRUARY 1965, IT WAS NECESSARY TO EVACUATE HIS DEPENDENTS FROM THE OVERSEAS COMMAND TO THE UNITED STATES. IN ORDER TO DEFRAY THE EXPENSES CONCOMITANT TO THE RELOCATION OF HIS DEPENDENTS, THE MEMBER REQUESTED AND RECEIVED ONE MONTH'S ADVANCE PAY. THIS PAYMENT OF $579, THE MONTHLY RATE OF PAY THEN IN EFFECT FOR A MEMBER SERVING IN THE GRADE OF CAPTAIN WITH OVER 8 YEARS' SERVICE, WAS RECEIVED ON FEBRUARY 18, 1965. IN ACCORDANCE WITH THE APPLICABLE REGULATIONS (PARAGRAPH 11206, ARMY REGULATIONS 37-104) THE MEMBER COMMENCED LIQUIDATION OF THE ADVANCE OF PAY IN MARCH 1965 AND COMPLETED REPAYMENT IN JULY 1965.

THE ASSISTANT SECRETARY SAYS FURTHER THAT EACH OF THE MEMBERS WHO HAVE APPLIED FOR WAIVER OF RECOVERY OF ADVANCE OF PAY HAS STATED THAT THE PAYMENT RECEIVED FOR THE PURPOSE OF EVACUATING HIS DEPENDENTS FROM VIETNAM WAS REPAID IN ACCORDANCE WITH CURRENT REGULATIONS. HOWEVER, EACH HAS INDICATED THAT REPAYMENT CREATED AN UNDUE FINANCIAL HARDSHIP ON HIM AND HIS DEPENDENTS. ALSO, HE SAYS THAT PUBLIC LAW 89-26 IS CLEAR IN ITS INTENT TO GRANT AUTHORITY TO THE SECRETARIES CONCERNED TO WAIVE THE RIGHT OF RECOVERY OF NOT MORE THAN ONE MONTH'S BASIC PAY ADVANCED UNDER THESE CONDITIONS. HOWEVER, HE POINTS OUT, THE LAW IS SILENT AS TO THE AUTHORITY OF THE SECRETARIES TO REFUND AN ADVANCE OF PAY AFTER SUCH ADVANCE HAS BEEN LIQUIDATED BY THE MEMBER.

FURTHER, THE ASSISTANT SECRETARY SAYS THAT IN COMMENTING ON ONE OF THE CASES AT HAND, THE JUDGE ADVOCATE GENERAL OF THE ARMY HAS STATED:

"THIS OFFICE PERCEIVES NO LEGAL OBJECTION TO THE WAIVER OF THE RIGHT TO RECOVER ONE MONTH'S PAY ADVANCED TO ASSIST MEMBER'S DEPENDENTS IN EVACUATION FROM VIETNAM (EVEN THOUGH THE MEMBER HAS REPAID THE ADVANCE AND, CONSEQUENTLY, A REIMBURSEMENT IS INVOLVED). AS THE EXPENDITURE OF PUBLIC FUNDS IS INVOLVED, A DEFINITIVE RULING ON THIS POINT MAY BE RENDERED ONLY BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT.'

THE WAIVER PROVISION CONTAINED IN 37 U.S.C. 1006 (C), AS ADDED BY THE 1965 ACT, READS AS FOLLOWS:

"THE SECRETARY CONCERNED OR HIS DESIGNEE MAY WAIVE ANY RIGHT OF RECOVERY OF NOT MORE THAN ONE MONTH'S BASIC PAY ADVANCED UNDER THIS SUBSECTION IF HE FINDS THAT RECOVERY OF THE ADVANCE WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE OR AGAINST THE PUBLIC INTEREST.'

IT LONG HAS BEEN HELD THAT WAIVER OF RECOVERY OF AN INDEBTEDNESS DOES NOT APPLY TO ANY AMOUNT PROPERLY RECOVERED PRIOR TO THE WAIVER AND THAT SUCH AMOUNTS PREVIOUSLY RECOVERED MAY NOT BE REFUNDED. 8 COMP. GEN. 664. THE EFFECT OF A WAIVER OF INDEBTEDNESS IS TO RELIEVE THE PERSON INVOLVED OF THE OBLIGATION OF MAKING RESTITUTION OR REPAYMENT TO THE GOVERNMENT OF THE AMOUNT OF THE INDEBTEDNESS OUTSTANDING AT THE TIME OF THE WAIVER. IF THE INDEBTEDNESS HAS BEEN LIQUIDATED BEFORE THE PURPORTED WAIVER OF RECOVERY, THERE REMAINS NOTHING UPON WHICH THE WAIVER CAN OPERATE AND IT IS WITHOUT EFFECT. SEE, ALSO, OUR DECISION OF JUNE 16, 1936, A-75332, TO ADMINISTRATOR OF VETERANS' AFFAIRS, COPY HEREWITH.

SINCE IT IS STATED THAT THE MEMBERS WHO RECEIVED THE ADVANCE OF PAY UPON EVACUATION OF THEIR DEPENDENTS LIQUIDATED THEIR INDEBTEDNESS PRIOR TO CONSIDERATION OF WAIVER ACTION, ANY WAIVER ACTION NOW TAKEN WOULD BE WITHOUT EFFECT AND WOULD PROVIDE NO BASIS TO REFUND ANY AMOUNT APPLIED TO LIQUIDATE THE INDEBTEDNESS.