A-81857, AUGUST 3, 1939, 19 COMP. GEN. 144

A-81857, AUGUST 3, 1939, 19 COMP. GEN. 144

EXCHANGE - LOSS BY - OFFICERS AND EMPLOYEES IN FOREIGN COUNTRIES - PAYMENT IN FOREIGN CURRENCY AND AT DATES SUBSEQUENT TO DATE OF PAY AND ALLOWANCE ACCRUALS OFFICERS AND EMPLOYEES OF THE UNITED STATES BEING ENTITLED TO PAYMENT IN UNITED STATES DOLLARS ONLY, IF PAID IN FOREIGN CURRENCY BY A GOVERNMENT DISBURSING OFFICER THEY ARE ENTITLED ONLY TO THE AMOUNT OF SUCH FOREIGN CURRENCY ACTUALLY PROCURABLE FOR THE DOLLARS AT THE TIME AND PLACE OF PAYMENT, AND AS EXCHANGE LOSSES OF SUCH OFFICERS AND EMPLOYEES IN FOREIGN COUNTRIES ARE FOR DETERMINATION IN UNITED STATES CURRENCY CONSIDERING ONLY THE BASIC RATE AS FIXED BY EXECUTIVE ORDER AND THE RATE PREVAILING WHEN THE RIGHT TO THE PAYMENT ACCRUED, SUCH EMPLOYEES MAY NOT BE PAID ON THE BASIS OF FOREIGN CURRENCY OBTAINED BY THE GOVERNMENT IN ADVANCE OF THE DATE OF ACCRUAL AT A MORE UNFAVORABLE RATE TO THE GOVERNMENT THAN THAT EXISTING WHEN THE RIGHT TO THE PAYMENT ACCRUED. THE HOLDING IN 16 COMP. GEN. 664 THAT " EXCHANGE LOSSES INCURRED "BY OFFICERS, ENLISTED MEN AND EMPLOYEES OF THE UNITED STATES WHILE IN SERVICE IN FOREIGN COUNTRIES DUE TO THE APPRECIATION OF FOREIGN CURRENCIES IN THEIR RELATION TO THE AMERICAN DOLLAR" ARE FOR DETERMINATION IN UNITED STATES CURRENCY CONSIDERING ONLY THE BASIC RATE AS FIXED BY EXECUTIVE ORDER AND THE RATE PREVAILING WHEN THE RIGHT TO THE PAYMENT ACCRUED, AND WHEN THE AMOUNT IN AMERICAN DOLLARS HAS BEEN SO ASCERTAINED, NO FURTHER COMPUTATION TO CONVERT THESE DOLLARS BACK INTO FOREIGN CURRENCY IS REQUIRED," DOES NOT AUTHORIZE RECOMPUTATION FOR EXCHANGE LOSS PURPOSES AT THE RATE PREVAILING ON THE DATE OF PAYMENT WHEN PAYMENT IS DELAYED AND MADE ON A SUBSEQUENT DATE, WHETHER THE PAYMENT BE BY GOVERNMENT CHECK OR IN FOREIGN CURRENCY.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF STATE AUGUST 3, 1939:

I HAVE YOUR LETTER OF JUNE 23, 1939, AS FOLLOWS:

REFERENCE IS MADE TO NOTICES OF EXCEPTION ON THE FOLLOWING VOUCHERS.

CHART

VOUCHER NO. DISBURSING OFFER PERIOD OF ACCOUNT AMOUNT 11417------------ C. M. P. CROSS-------- DECEMBER 1937-------- $10.17 15577----------------- -DO--------------- FEBRUARY 1938-------- 2.69 15614------------------DO--- ----------------DO----------------- 10.16 19464------------------DO------- -------- APRIL 1938----------- 3.73 19467------------------DO------------- ------DO----------------- 11.80 19474------------------DO----------------- --DO----------------- 1.30 19476------------------DO-------------------DO- ---------------- 2.23 19514------------------DO-------------------DO------ ----------- 2.38 19527------------------DO-------------------DO----------- ------ 1.06 19530------------------DO-------------------DO---------------- - 1.35

IN 16 COMP. GEN. 664 IT IS STATED THAT THERE HAVE BEEN TWO METHODS OF COMPUTING CURRENCY APPRECIATION LOSS USED, AS FOLLOWS:

"ONE METHOD USED IN DETERMINING THE LOSS CONSISTS IN FIRST ASCERTAINING THE DIFFERENCE BETWEEN THE AMOUNT IN FOREIGN CURRENCIES IN THEIR RELATION TO THE AMERICAN DOLLAR ON THE BASIS OF THE BASIC RATE FIXED IN EXECUTIVE ORDERS AND THE AMOUNT HE COULD RECEIVE AT THE RATE IN EFFECT ON THE DATE THE RIGHT TO PAYMENT ACCRUED, AND, AFTER ASCERTAINING THE LOSS ON SUCH BASIS, TO CONVERT BACK SUCH LOSS INTO UNITED STATES CURRENCY BY USING THE RATE IN EFFECT ON THE DATE PAYMENT IS ACTUALLY MADE BY THE UNITED STATES, WHICH IS FREQUENTLY A CONSIDERABLE TIME SUBSEQUENT TO THE ACCRUAL PERIOD.

"THE OTHER METHOD CONSISTS IN THE MAIN OF TAKING THE DIFFERENCE BETWEEN THE COST RATE AT TIME OF ACCRUAL AND THE BASIC RATE FIXED BY EXECUTIVE ORDERS, AND AFTER FIXING SUCH DIFFERENCE UPON A PERCENTAGE BASIS (FOR PURPOSE OF EXPEDIENCY ONLY), THE LOSS IS ASCERTAINED BY MULTIPLYING THE EMPLOYEE'S BASIC PAY AND PAYMENT MADE ACCORDINGLY FOR THE ENTIRE AMOUNT IN AMERICAN DOLLARS.'

IN CONCLUSION IT IS HELD IN THAT DECISION AS FOLLOWS:

"IT IS NOT BELIEVED THAT THE USE OF THE FIRST METHOD OF COMPUTING APPRECIATION LOSSES, HEREINABOVE REFERRED TO, HAS DONE ANY SUBSTANTIAL INJUSTICE--- EITHER TO THE GOVERNMENT OR TO THE EMPLOYEES--- BECAUSE UNTIL RECENTLY, THE FLUCTUATIONS IN EXCHANGE RATES BETWEEN DATES OF ACCRUAL AND DATES OF ACTUAL PAYMENT HAVE BEEN SOMEWHAT LIMITED--- THE SMALL LOSS TO THE EMPLOYEE FOR 1 MONTH BECAUSE OF THE HIGHER SELLING RATE OF THE AMERICAN DOLLAR AT DATE OF PAYMENT HAVING FREQUENTLY BEEN OFFSET BY A SMALL GAIN THE FOLLOWING MONTH BECAUSE OF A LOWER SELLING RATE FOR THE AMERICAN DOLLAR AT DATE OF PAYMENT. WHERE, HOWEVER, THE CHANGE IN RATE IS DUE TO A REVALUATION OF A FOREIGN CURRENCY, AS IN THE CASE OF THE FRENCH FRANC ON SEPTEMBER 26, 1936, AND IN CASES OF DELAY IN PAYMENT WHEN THERE HAS BEEN A WIDE FLUCTUATION IN RATES BETWEEN TIME OF RIGHT TO PAYMENT AND DATE OF ACTUAL PAYMENT, THE USE OF THAT METHOD WILL NOT IN FACT REIMBURSE THE EMPLOYEE FOR THE LOSS CONTEMPORANEOUSLY SUSTAINED BY THE EMPLOYEE DUE TO THE APPRECIATION OF THE FOREIGN CURRENCY IN RELATION TO THE AMERICAN DOLLAR AS CONTEMPLATED BY THE BASIC STATUTE AND THE EXECUTIVE ORDER.

"IN VIEW OF THE FACTS AND CIRCUMSTANCES STATED HEREIN AND IN ORDER THAT THERE MAY BE UNIFORMITY IN THE APPLICATION OF THE STATUTE AND EXECUTIVE ORDERS, IT IS HELD THAT THE METHOD OF COMPUTATION OF APPRECIATION LOSSES FIRST ABOVE DESCRIBED IS NOT THE PROPER METHOD AND THAT THE SECOND METHOD IS THE PROPER ONE FOR APPLICATION. * * *"

THIS PART OF THE DECISION ESTABLISHES A PROCEDURE FOR THE COMPUTATION AND PAYMENT OF CURRENCY APPRECIATION LOSS WHICH IS JUST AND FAIR TO THE GOVERNMENT AND ITS OFFICERS AND EMPLOYEES AND SIMPLIFIES THE ACCOUNTING FOR SUCH LOSSES.

HOWEVER, IN THIS DECISION IT IS FURTHER STATED:

"THAT IS TO SAY, THE LOSS IS TO BE DETERMINED IN UNITED STATES CURRENCY CONSIDERING ONLY THE BASIC RATE AND THE RATE PREVAILING WHEN THE RIGHT TO THE PAYMENT ACCRUED, AND WHEN THE AMOUNT IN AMERICAN DOLLARS HAS BEEN SO ASCERTAINED, NO FURTHER COMPUTATION TO CONVERT THESE DOLLARS BACK INTO FOREIGN CURRENCY IS REQUIRED.'

IN THE AUDIT OF ACCOUNTS IT HAS BEEN STATED AS FOLLOWS: ( NOTICE OF EXCEPTION ON VOUCHER NO. 19464 IN THE APRIL 1938 ACCOUNTS OF CECIL M. P. CROSS, DISTRICT ACCOUNTING AND DISBURSING OFFICER, PARIS, FRANCE.)

"WHEN ON A GIVEN ACCRUAL DATE FOR SUCH SALARIES AND ALLOWANCES IT HAS BEEN DETERMINED THAT A DEFINITE LOSS HAS OCCURRED ON THAT DAY BY REASON OF THE APPRECIATION OF FOREIGN CURRENCIES PURSUANT TO THE ACT OF MARCH 26, 1934, AND REGULATIONS THEREUNDER, SUCH LOSS IN TERMS OF UNITED STATES CURRENCY IS PAYABLE IN DOLLARS. IF FOR THE SAKE OF CONVENIENCE THE EMPLOYEE PREFERS TO BE PAID IN FOREIGN CURRENCY THEN ON HAND IN THE DISBURSING OFFICE THERE IS NO OBJECTION TO PAYMENT IN THAT MEDIUM, PROVIDED HOWEVER, THE VALUE OF UNITS OF SUCH FOREIGN CURRENCY SO DISBURSED AT THE PROPER RATE DOES NOT EXCEED THE AMOUNT DUE IN UNITED STATES CURRENCY.'

IT IS ARGUED THAT THE RULING TO THE EFFECT THAT WHEN THE AMOUNT IN AMERICAN DOLLARS HAS BEEN SO ASCERTAINED NO FURTHER COMPUTATION TO CONVERT THESE DOLLARS BACK INTO FOREIGN CURRENCY IS REQUIRED IF APPLIED AS IS BEING INTERPRETED IN THE AUDIT OF ACCOUNTS, WILL IN MANY INSTANCES CAUSE INJUSTICES EITHER TO THE GOVERNMENT OR TO THE PAYEES IF PAYMENT IS NOT ACTUALLY MADE IN THE CURRENCY OF THE UNITED STATES, AND THAT THIS SITUATION NEEDS FURTHER CORRECTION.

THE DEPARTMENT'S INTERPRETATION OF THE SENTENCE IN QUESTION, AS COMPARED TO THAT OF THE AUDIT DIVISION OF THE GENERAL ACCOUNTING OFFICE, IS THAT WHEN THE CURRENCY APPRECIATION LOSS PAYABLE HAS BEEN COMPUTED ON THE PERCENTAGE BASIS AS OUTLINED IN THE DECISION BY USE OF THE BANK'S SELLING RATE OF EXCHANGE ON THE DATE OF ACCRUAL, IT BECOMES AN OBLIGATION FIXED AND STATED IN UNITED STATES DOLLARS (EXCEPT FOR THE PAYMENT OF ANY ADDITIONAL LOSS DUE TO APPRECIATION OF FOREIGN CURRENCY AS CONTEMPLATED BY THE ACT OF MARCH 26, 1934, 48 STAT. 466) AND IS FOR PAYMENT PRIMARILY IN THE CURRENCY OF THE UNITED STATES, AND IF UNITED STATES CURRENCY IS NOT AVAILABLE PAYMENT MAY BE MADE IN FOREIGN CURRENCY, IN AN AMOUNT EQUIVALENT TO THE AMOUNT DUE IN UNITED STATES AT THE BANK'S SELLING RATE FOR SIGHT DRAFTS ON NEW YORK PREVAILING ON THE DATE OF PAYMENT, AND NOT THE RATE AT WHICH A CASH ADVANCE CHECK WAS CASHED IN A FISCAL DISTRICT OR THE RATE AT WHICH A DRAFT WAS NEGOTIATED AT AN OFFICE WHICH IS NOT LOCATED WITHIN A FISCAL DISTRICT. THE CASH ADVANCE RATE WILL IN MANY INSTANCES HAVE BEEN DETERMINED BY THE NEGOTIATION OF A DRAFT OR CHECK ONE OR MORE DAYS PREVIOUS TO THE ACTUAL DATE OF PAYMENT OF THE FIXED DOLLAR OBLIGATION.

IN 3 COMP. GEN. 571, AND OTHERS, AND IN SUBSEQUENT AUDITS MADE THEREUNDER, THE OBLIGATION OF THE UNITED STATES WITH RESPECT TO THE PAYMENT OF SALARIES AND OTHER ITEMS WHICH ARE FIXED AND PAYABLE IN UNITED STATES DOLLARS IS LIMITED TO PAYMENT IN DOLLARS, AND IF PAYMENT IS NOT SO MADE THEN IN THE SUM OF FOREIGN CURRENCY WHICH WILL ON THE DAY OF PAYMENT AT THE COMMERCIAL, AS DISTINGUISHED FROM THE PAR, RATE OF EXCHANGE EQUAL THE NUMBER OF DOLLARS DUE.

IN CASE PAYMENT OF A LOSS DUE TO THE APPRECIATION OF FOREIGN CURRENCIES, WHICH HAS BEEN PROPERLY COMPUTED AS A DOLLAR OBLIGATION, IS DEFERRED UNTIL A LATER DATE FOR THE CONVENIENCE OF EITHER THE GOVERNMENT OR THE OFFICER IT IS LOGICAL TO PRESUME THAT ON THE ACTUAL DATE OF PAYMENT THE PAYEE IS ENTITLED TO RECEIVE THE DOLLAR AMOUNT OF SUCH LOSS, AND THAT IF PAYMENT IS NOT ACTUALLY MADE IN UNITED STATES CURRENCY, THE PAYEE IS ENTITLED TO RECEIVE THE EQUIVALENT OF SUCH DOLLAR AMOUNT IN FOREIGN CURRENCY AT THE COMMERCIAL RATE OF EXCHANGE IN ORDER THAT HE MAY, IF DESIRED, CONVERT THE FOREIGN CURRENCY AND OBTAIN THE DOLLARS WHICH HE IS ENTITLED TO ON THE DATE OF PAYMENT.

IF THE PROCEDURE FOR THE PAYMENT OF CURRENCY APPRECIATION LOSSES AS OUTLINED IN THE AUDIT SHOULD BE HELD TO BE THE CORRECT ONE IT WILL CAUSE INJUSTICES EITHER TO THE OFFICERS OR TO THE GOVERNMENT SIMILAR TO THOSE INTENDED TO BE CORRECTED BY THIS DECISION. FOR INSTANCE, IF FOR JULY 1938 A CERTAIN OFFICER WAS ENTITLED TO RECEIVE CURRENCY APPRECIATION LOSS ON HIS SALARY AND ALLOWANCES AMOUNTING TO A TOTAL OF $100 IN UNITED STATES CURRENCY, HE IS ENTITLED TO BE PAID THAT SUM IN SUCH CURRENCY ON JULY 31 OR ANY LATER DATE, BUT UNDER THE AUDIT APPLICATION OF THE DECISION CITED ABOVE HE WOULD PROBABLY NOT BE PAID A SUM IN FOREIGN CURRENCY WITH WHICH HE COULD OBTAIN $100, AS HE WOULD BE PAID $100 AT THE CASH ADVANCE RATE OR THE RATE AT WHICH THE DRAFT OR CHECK WAS NEGOTIATED ON THAT OR SOME OTHER DATE, RATHER THAN THE COMMERCIAL OR BANK'S SELLING RATE PREVAILING ON THE DATE OF PAYMENT AS REQUIRED IN 3 COMP. GEN. 571.

UNDER THE PRACTICE OBJECTED TO HEREIN, IN CASE THE FOREIGN CURRENCY USED FOR MAKING A PAYMENT WAS OBTAINED PRIOR TO A REVALUATION OF SUCH FOREIGN CURRENCY IT WOULD BE POSSIBLE FOR THE OFFICER TO RECEIVE ONLY A SMALL FRACTION OF THE NUMBER OF FOREIGN UNITS NECESSARY FOR HIM TO OBTAIN THE DOLLARS TO WHICH HE IS ENTITLED; OR LIKEWISE, A CONSIDERABLY LARGER NUMBER OF FOREIGN UNITS NECESSARY FOR HIM TO OBTAIN THE DOLLARS TO WHICH HE IS ENTITLED; OR LIKEWISE, A CONSIDERABLY LARGER NUMBER OF FOREIGN UNITS MIGHT BE PAID TO HIM AT THE CASH ADVANCE RATE THAN WOULD BE NECESSARY FOR THE PURCHASE BY HIM OF THE DOLLARS DUE ON ACCOUNT OF SUCH CURRENCY APPRECIATION LOSS. THIS WOULD RESULT IN AN INJUSTICE EITHER TO THE OFFICER OR TO THE GOVERNMENT.

I THEREFORE RESPECTFULLY REQUEST A RECONSIDERATION AND CLARIFICATION OF THE STATEMENT CONTAINED IN THE DECISION TO THE EFFECT THAT "* * * WHEN THE AMOUNT IN AMERICAN DOLLARS HAS BEEN SO ASCERTAINED, NO FURTHER COMPUTATION TO CONVERT THOSE DOLLARS BACK INTO FOREIGN CURRENCY IS REQUIRED" SINCE IT SEEMS EQUITABLE TO ALL CONCERNED THAT A FURTHER COMPUTATION IS NECESSARY WHERE PAYMENT OF THE LOSS IS EFFECTED IN ITS EQUIVALENT IN FOREIGN CURRENCY AND SINCE THE DOLLAR AMOUNT OF CURRENCY APPRECIATION LOSS CHARGEABLE TO AND ALLOWABLE FROM THE APPROPRIATION REMAINS THE SAME REGARDLESS OF WHICH METHOD OF PAYMENT IS FOLLOWED. THE DIFFERENCE BETWEEN THE COST OF THE FOREIGN CURRENCY AT THE CASH ADVANCE RATE AND THE BANK'S SELLING RATE ON THE DATE OF PAYMENT OF THE DOLLAR OBLIGATION WOULD BE CHARGEABLE TO THE APPROPRIATION FOR CONTINGENT EXPENSES, FOREIGN SERVICE, AS LOSS BY EXCHANGE IF A LOSS OCCURRED, OR CREDITED IN THE ACCOUNT AS GAIN BY EXCHANGE IF A GAIN RESULTED, IN THE SAME MANNER AS OTHER SIMILAR TRANSACTIONS ARE ORDINARILY HANDLED.

THE RECORD INDICATES THAT AFTER PAYMENT OF SALARY AND ALLOWANCES, THE VOUCHERS REFERRED TO WERE ISSUED TO COVER PAYMENT OF LOSSES ACCRUING UNDER THE ACT OF MARCH 26, 1934, 48 STAT. 466, ON SUCH SALARIES AND ALLOWANCES TO OFFICERS AND EMPLOYEES OF THE UNITED STATES IN SERVICE IN FOREIGN COUNTRIES, THE AMOUNT OF THE INDIVIDUAL PAYMENT IN EACH CASE BEING DETERMINED BY THE COST OF FOREIGN CURRENCY SECURED BY THE DISBURSING OFFICER BY NEGOTIATION OF A DRAFT OR CHECK IN ADVANCE OF THE ACCRUAL DATE TO PAY THE UNITED STATES DOLLAR VALUE OF THE LOSS PROPERLY DUE AT THE BANK SELLING RATE IN EFFECT AT THE TIME AND PLACE OF PAYMENT. THE RATE IN EFFECT AT THE TIME AND PLACE OF NEGOTIATION FOR THE FOREIGN CURRENCY BEING LESS FAVORABLE TO THE GOVERNMENT THAN THE RATE PREVAILING FOR SUCH CURRENCY AT THE TIME AND PLACE OF ACTUAL PAYMENT, THE USE OF THE FUNDS SO OBTAINED RESULTED, IN THE INSTANT CASES, IN ADDITIONAL EXPENSE TO THE GOVERNMENT, IN VIEW OF WHICH CREDIT WAS DISALLOWED IN THE AUDIT FOR PAYMENTS IN FOREIGN CURRENCY EXCEEDING THE EQUIVALENT OF THE UNITED STATES DOLLAR VALUE COMPUTED ON THE BASIC RATE AND THE RATE PREVAILING ON THE ACCRUAL DATE.

IT IS NOW URGED THAT THE PAYMENT OF EXCHANGE LOSSES IN FLUCTUATING FOREIGN CURRENCIES REQUIRES FURTHER COMPUTATION TO AVOID INJUSTICE EITHER TO THE OFFICERS OR TO THE GOVERNMENT AND THAT THE DOLLAR AMOUNT CHARGED TO THE APPROPRIATION PROVIDED FOR THE PAYMENT OF CURRENCY APPRECIATION LOSSES REMAINS THE SAME REGARDLESS OF THE METHOD OF PAYMENT FOLLOWED SINCE THE DIFFERENCE BETWEEN THE COST OF THE FOREIGN CURRENCY AT THE CASH ADVANCE RATE AND THE BANK'S SELLING RATE ON THE DATE OF PAYMENT OF THE DOLLAR OBLIGATION WOULD BE CHARGEABLE TO THE APPROPRIATION FOR CONTINGENT EXPENSES, FOREIGN SERVICE, AS A LOSS BY EXCHANGE, IF A LOSS OCCURRED, OR CREDITED IN THE ACCOUNT AS GAIN BY EXCHANGE IF A GAIN RESULTED.

LOSSES ACCRUING UNDER THE PROVISIONS OF THE ACT OF MARCH 26, 1934, SUPRA, BECOME AND ARE A PART OF THE SALARY AND ALLOWANCES DUE AND PAYABLE AND WHEN THE AMOUNT OF SUCH LOSSES HAS BEEN DETERMINED, THE PAYMENT THEREOF IS REQUIRED IN ACCORDANCE WITH RULES AND PRINCIPLES GOVERNING THE PAYMENT OF SALARIES AND ALLOWANCES. LOSS BY EXCHANGE INCURRED BY A DISBURSING OFFICER IN THE NEGOTIATION OF A DRAFT OR CHECK TO SECURE FOREIGN CURRENCY NECESSARY TO MAKE DISBURSEMENTS PAYABLE IN FOREIGN CURRENCY IS CHARGEABLE TO THE APPROPRIATION PROVIDED FOR THAT PURPOSE, AND IS A MATTER SEPARATE AND APART FROM THAT COVERED BY THE PROVISIONS OF THE CITED 1934 STATUTE. IT IS SETTLED, HOWEVER, THAT OFFICERS AND EMPLOYEES ARE ENTITLED TO PAYMENT IN UNITED STATES DOLLARS ONLY, AND IF THEY BE PAID IN A FOREIGN CURRENCY BY A GOVERNMENT DISBURSING OFFICER, ONLY THE AMOUNT OF SUCH FOREIGN CURRENCY ACTUALLY PROCURABLE FOR THE DOLLARS AT THE TIME AND PLACE OF PAYMENT, I.E., AT THE SELLING RATE FOR SIGHT DRAFTS ON NEW YORK, IS AUTHORIZED TO BE PAID IN LIEU OF PAYMENT IN DOLLARS. A-31044, JUNE 19, 1930; 3 COMP. GEN. 571, 574; 22 COMP. DEC. 341, 344; HILL V. UNITED STATES, 62 CT.CLS. 412. THE DISTRICT ACCOUNTING AND DISBURSING OFFICER IN PARIS APPEARS TO HAVE BEEN PROVIDED WITH OFFICIAL CHECKS TO DRAW ON THE TREASURER OF THE UNITED STATES FOR SUCH AMOUNTS AS MAY HAVE BEEN PLACED TO HIS OFFICIAL CREDIT AND AFFORDED THE USE OF ALL FACILITIES OF THE TREASURY DEPARTMENT TO ASSURE THE PROMPT PAYMENT THEREOF. IT HAS BEEN UNIFORMLY HELD THAT WHEN AN OFFICER OR EMPLOYEE OF THE GOVERNMENT HAS BEEN PAID BY A GOVERNMENT CHECK DRAWN BY A DISBURSING OFFICER PURSUANT TO SECTION 3620, REVISED STATUTES, SUCH OFFICER OR EMPLOYEE HAS RECEIVED HIS SALARY IN THE MANNER PROVIDED BY LAW AND THE EXPENSE INCURRED BY THE PAYEE, IF ANY, IN CASHING SUCH CHECK IS NOT A PROPER CHARGE AGAINST THE GOVERNMENT. 6 COMP. GEN. 295; 11 ID. 213. THE PRACTICE FOLLOWED WITH RESPECT TO THE VOUCHERS LISTED WOULD PLACE THE BURDEN OF SUCH EXPENSE UPON THE UNITED STATES. SEE, ALSO, 4 COMP. GEN. 856; 16 OP.ATTY.GEN. 381. THE NECESSITY REQUIRING THE NEGOTIATION OF CHECKS OR DRAFTS FOR FOREIGN CURRENCY PRIOR TO THE DATE OF PAYMENT IS NOT APPARENT, NOR HAS THERE BEEN SET FORTH ANY REASON WHY PAYMENT OF SALARY AND ALLOWANCES (WITH EXCHANGE LOSSES) MAY NOT BE MADE BY THE USUAL GOVERNMENT CHECK.

ONE OF THE BENEFITS TO BE DERIVED FROM THE USE OF THE METHOD PRESCRIBED IN DECISION PUBLISHED IN 16 COMP. GEN. 664, IS THE ABILITY TO STATE AN ACCOUNT TO INCLUDE SALARIES AND/OR ALLOWANCES AND LOSSES, AND EFFECT THE SETTLEMENT THEREOF BY THE ISSUANCE OF A SINGLE CHECK. IF PREPARATION OF THE CHECKS IN PARIS IS DEFERRED TO THE DATE OF ACCRUAL OF SUCH SALARIES OR ALLOWANCES BY REASON OF THE NECESSITY FOR THE RATE PREVAILING ON THAT DATE, IT IS NOT PERCEIVED HOW THE DELAY, IF ANY, IN THE DELIVERY OF THE CHECKS TO THE INVOLVED PAYEES INCIDENT THERETO WOULD, IN ANY PARTICULAR, AFFECT THEIR RIGHTS UNDER THE RULE STATED. ACCORDINGLY, UPON THE BASIS OF THE PRESENT RECORD THE ACTION OF THE AUDIT IN DISALLOWING THE QUESTIONED ITEMS IS SUSTAINED.

IT IS NOTED, HOWEVER, THAT EXCEPTIONS WERE STATED ONLY WITH RESPECT TO PAYMENTS MADE TO FOREIGN SERVICE OFFICERS, WHEREAS ALL PAYMENTS ON EACH PAY ROLL INVOLVED WERE AFFECTED. ACCORDINGLY, THE EXCEPTIONS ON EACH VOUCHER WILL BE REVISED TO SHOW THE TOTAL OVERPAYMENT MADE AS TO EACH SUCH VOUCHER AND THE DISBURSING OFFICER WILL DETERMINE THE AMOUNT OF THE OVERPAYMENT MADE TO THE INDIVIDUAL PAYEE AND EFFECT COLLECTION OF THE OVERPAYMENT ACCORDINGLY.