B-223895, JUN 30, 1987, 66 COMP.GEN. 536

B-223895: Jun 30, 1987

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IS PERMISSIBLE AS A "NECESSARY EXPENSE" UNDER 5 U.S.C. 4503. WE CONCLUDE THAT THERE WAS NO IMPROPER PAYMENT IN THIS CASE AND HENCE NO LIABILITY FOR WHICH RELIEF IS NECESSARY. THE NEWLY-PROMOTED SECTION CHIEF OF THE OFFICE WAS RECOGNIZED AND APPOINTED AS "DIRECTOR'S REPRESENTATIVE". THE FUNCTION WAS ATTENDED BY REPRESENTATIVES OF THE ATHENS CHAMBER OF COMMERCE. REIMBURSEMENT FOR THE ABOVE EXPENDITURE WAS SUBSEQUENTLY DENIED BY REGIONAL FISCAL PERSONNEL. WHO FELT THAT THE EXPENDITURE WAS NOT PERMISSIBLE UNDER AGENCY REGULATIONS AND DECISIONS OF THE COMPTROLLER GENERAL. THE REGIONAL FISCAL OFFICE ALSO DETERMINED THAT NO REIMBURSEMENT WAS POSSIBLE SINCE. ' THE COST MAY BE BORNE BY OPERATING APPROPRIATIONS AND NEED NOT BE CHARGED TO A RECEPTION AND REPRESENTATION ACCOUNT." /1/ THE ONLY REMAINING ISSUE TO BE DETERMINED IS WHETHER THE IRS CEREMONY IN THIS CASE CAN BE REGARDED AS COMING WITHIN THE SCOPE OF THE INCENTIVE AWARDS ACT.

B-223895, JUN 30, 1987, 66 COMP.GEN. 536

APPROPRIATIONS/FINANCIAL MANAGEMENT - APPROPRIATION AVAILABILITY - PURPOSE AVAILABILITY - SPECIFIC PURPOSE RESTRICTIONS - ENTERTAINMENT/RECREATION APPROPRIATIONS/FINANCIAL MANAGEMENT - APPROPRIATION AVAILABILITY - PURPOSE AVAILABILITY - NECESSARY EXPENSES RULE EXPENDITURE FOR REFRESHMENTS AT A CEREMONY, CONDUCTED UNDER THE AUTHORITY OF THE GOVERNMENT EMPLOYEES' INCENTIVE AWARDS ACT, IN RECOGNITION OF AN INTERNAL REVENUE SERVICE EMPLOYEE'S APPOINTMENT AS DIRECTOR'S REPRESENTATIVE, IS PERMISSIBLE AS A "NECESSARY EXPENSE" UNDER 5 U.S.C. 4503. THIS EXPENDITURE MAY BE CHARGED TO THE INTERNAL REVENUE SERVICE'S OPERATING APPROPRIATION, REGARDLESS OF THAT APPROPRIATION'S LACK OF PROVISION FOR ENTERTAINMENT OR REPRESENTATION EXPENSES.

MR. G.J. PELLON, AUTHORIZED CERTIFYING OFFICER, INTERNAL REVENUE SERVICE:

THIS RESPONDS TO YOUR REQUEST UNDER 31 U.S.C. 3527 (REFERENCE RM:F:A:TV) FOR RELIEF OF MRS. THELMA MCCLURE FROM LIABILITY FOR A DISBURSEMENT OF FUNDS FROM THE INTERNAL REVENUE SERVICE (IRS) ATLANTIC SERVICE CENTER IMPREST FUND. AS EXPLAINED BELOW, WE CONCLUDE THAT THERE WAS NO IMPROPER PAYMENT IN THIS CASE AND HENCE NO LIABILITY FOR WHICH RELIEF IS NECESSARY.

ON MARCH 18, 1986, MRS. MCCLURE, AN IMPREST FUND CASHIER, SUBMITTED A REIMBURSEMENT VOUCHER TO THE REGIONAL FISCAL OFFICE, SOUTHEAST REGION, TO REIMBURSE THE IMPREST FUND FOR $79.31, SPENT ON REFRESHMENTS PROVIDED AT A CEREMONY FOR THE OPENING OF AN IRS SATELLITE OPERATION IN ATHENS, GEORGIA. AT THE CEREMONY, THE NEWLY-PROMOTED SECTION CHIEF OF THE OFFICE WAS RECOGNIZED AND APPOINTED AS "DIRECTOR'S REPRESENTATIVE", AND PRESENTED WITH A PLAQUE BY THE IRS AND A KEY TO THE CITY BY THE MAYOR OF ATHENS. THE FUNCTION WAS ATTENDED BY REPRESENTATIVES OF THE ATHENS CHAMBER OF COMMERCE, AS WELL AS OFFICIALS FROM BOTH THE ATLANTIC SERVICE CENTER AND THE SOUTHEAST REGIONAL OFFICE.

REIMBURSEMENT FOR THE ABOVE EXPENDITURE WAS SUBSEQUENTLY DENIED BY REGIONAL FISCAL PERSONNEL, WHO FELT THAT THE EXPENDITURE WAS NOT PERMISSIBLE UNDER AGENCY REGULATIONS AND DECISIONS OF THE COMPTROLLER GENERAL. THE REGIONAL FISCAL OFFICE ALSO DETERMINED THAT NO REIMBURSEMENT WAS POSSIBLE SINCE, THEY NOTED, THE IRS APPROPRIATION TO WHICH THE EXPENSE WOULD BE CHARGED HAD NO PROVISION FOR ENTERTAINMENT OR REPRESENTATION EXPENSES.

UNDER THE GOVERNMENT EMPLOYEES' INCENTIVE AWARDS ACT, 5 U.S.C. 4501 4506 (1982) (INCENTIVE AWARDS ACT), THE HEAD OF AN AGENCY MAY UNDER CERTAIN CIRCUMSTANCES "PAY A CASH AWARD TO, AND INCUR NECESSARY EXPENSE FOR THE HONORARY RECOGNITION OF "AGENCY EMPLOYEES. SEC. 4503. IN 65 COMP.GEN. 738 (1986), A DECISION ISSUED SEVERAL MONTHS AFTER THE EXPENDITURE IN THIS CASE, WE HELD THAT REFRESHMENTS COULD BE PROVIDED FROM APPROPRIATED FUNDS AT AWARDS CEREMONIES CONDUCTED UNDER THE AUTHORITY OF THE INCENTIVE AWARDS ACT. WE STATES THAT:

"SHOULD AN AGENCY DETERMINE THAT A RECEPTION WITH REFRESHMENTS, IN ACCORDANCE WITH OPM REGULATIONS, WOULD MATERIALLY ENHANCE THE EFFECTIVENESS OF ITS AWARDS CEREMONY, THE COST OF THOSE REFRESHMENTS MAY BE CONSIDERED A 'NECESSARY EXPENSE' FOR PURPOSES OF 5 U.S.C. 4503. AS A 'NECESSARY EXPENSE,' THE COST MAY BE BORNE BY OPERATING APPROPRIATIONS AND NEED NOT BE CHARGED TO A RECEPTION AND REPRESENTATION ACCOUNT." /1/

THE ONLY REMAINING ISSUE TO BE DETERMINED IS WHETHER THE IRS CEREMONY IN THIS CASE CAN BE REGARDED AS COMING WITHIN THE SCOPE OF THE INCENTIVE AWARDS ACT. WHILE IT MAY BE QUESTIONED WHETHER THIS TYPE OF CEREMONY WAS WITHIN THE ORIGINAL CONTEMPLATION OF THE STATUE, WE ARE NOT PREPARED TO FIND IT UNAUTHORIZED, ESPECIALLY IN VIEW OF THE BROAD DISCRETION AGENCIES HAVE IN CARRYING OUT THE INCENTIVE AWARDS PROGRAM. B-167835, NOV. 18, 1969.

THE AWARD AND RECOGNITION CEREMONY CONDUCTED HERE IMPLICITLY COMES WITHIN THE INCENTIVE AWARD ACT'S AUTHORIZATION OF AWARD FOR AN EMPLOYEE WHO "BY HIS ... SUPERIOR ACCOMPLISHMENT, OR OTHER PERSONAL EFFORT CONTRIBUTES TO THE EFFICIENCY, ECONOMY, OR OTHER IMPROVEMENT OF GOVERNMENT OPERATIONS". 5 U.S.C. SEC. 4503.

A KEY FACTOR IS THAT THIS AWARD HONORED AN IRS EMPLOYEE WHO WAS PROMOTED TO A HIGHER POSITION WITHIN THE AGENCY. IN PARTICULAR, THE IRS AWARDED THE EMPLOYEE A PLAQUE, COMMEMORATING HER APPOINTMENT AS THE ATHENS OFFICE DIRECTOR'S REPRESENTATIVE. THE EMBODIMENT OF THIS INDIVIDUAL'S ACHIEVEMENT AND " SUPERIOR ACCOMPLISHMENT" (AS PROVIDED FOR IN THE INCENTIVE AWARDS ACT) IN A PLAQUE IS WELL IN LINE WITH REGULATIONS PRESCRIBED BY THE OFFICE OF PERSONNEL MANAGEMENT. THESE REGULATIONS ENCOURAGE AGENCIES TO MAKE MAXIMUM USE OF THEIR AUTHORITY TO ESTABLISH AND ADMINISTER AWARDS TO MOTIVATE EMPLOYEE ACCOMPLISHMENT AND TO MEET THE RECOGNITION NEEDS OF THESE EMPLOYEES. SEE 5 C.F.R. 451.202.

THE $79.31 PROVIDED FOR REFRESHMENTS FOR THE CEREMONY AT THE IRS ATHENS OFFICE WAS A PERMISSIBLE EXPENDITURE. THERE WAS THEREFORE NO IMPROPER PAYMENT, AND HENCE NO NEED FOR RELIEF. WE ARE RETURNING THE REIMBURSEMENT VOUCHER, WHICH WAS SUBMITTED WITH THE REQUEST FOR RELIEF.

/1/ NORMALLY, OUR DECISIONS ARE PROSPECTIVE ONLY. HOWEVER, AUTHORITY FOR THE PROPOSITION CITED HAS ACTUALLY EXISTED SINCE B-167835, NOV. 18, 1969, ALLOWING FOR THE REIMBURSEMENT OF BANQUET EXPENSES AT AN AWARDS CEREMONY HONORING THE APOLLO 11 ASTRONAUTS, HELD UNDER THE PROVISIONS OF THE INCENTIVE AWARDS ACT. 65 COMP.GEN. AT 739 40.