B-103486, JAN. 23, 1964

B-103486, JAN. 23, 1964

TO MR. JAMES E. ABNEY:

ON OCTOBER 23, 1963, YOU REQUESTED A REVIEW OF OUR SETTLEMENT OF OCTOBER 7, 1963, WHICH DISALLOWED YOUR CLAIM FOR $2,556.19, AS ADDITIONAL LIVING QUARTERS ALLOWANCE DURING THE PERIOD APRIL 25, 1961, THROUGH APRIL 13, 1963, INCIDENT TO YOUR EMPLOYMENT WITH THE DEPARTMENT OF THE ARMY.

IT APPEARS FROM YOUR LETTERS AND OTHER INFORMATION OF RECORD THAT YOU WERE MARRIED ON APRIL 25, 1961, WHILE SERVING IN JAPAN, AND LEASED LIVING QUARTERS ON THAT DATE WHICH YOU OCCUPIED UNTIL DECEMBER 8, 1961. FOR THAT PERIOD YOU WERE PAID LIVING QUARTERS ALLOWANCE OF $28.42 PER PAY PERIOD BASED UPON ESTIMATED RENTAL COSTS PLUS UTILITIES, WHICH AMOUNT WAS SLIGHTLY IN EXCESS OF THE COSTS ACTUALLY INCURRED THEREFOR AS SHOWN BY THE RECEIPTS ON FILE WITH THE AGENCY.

IN DECEMBER 1961 YOU MOVED TO OTHER LEASED QUARTERS WHICH YOU OCCUPIED UNTIL ABOUT AUGUST 21, 1962. DURING THIS PERIOD YOU WERE ALLOWED LIVING QUARTERS ALLOWANCE OF $103.46 PER PAY PERIOD WHICH ALSO EXCEEDED THE ACTUAL COSTS INCURRED BY YOU AS SHOWN BY THE RECEIPTS FILED WITH THE AGENCY.

FROM AUGUST 21, 1962 THROUGH APRIL 13, 1963 (END OF THE PERIOD FOR WHICH CLAIM IS ASSERTED), YOU OCCUPIED A HOUSE WHICH YOU PURCHASED. FOR THIS YOU WERE ALLOWED $21.28 PER PAY PERIOD, BASED UPON ESTIMATED COSTS OF UTILITIES PLUS 10 PERCENT PER ANNUM OF THE PURCHASE PRICE.

YOU CONTEND THAT FROM APRIL 25, 1961 THROUGH FEBRUARY 10, 1963, YOU WERE ENTITLED TO LIVING QUARTERS ALLOWANCE AT THE FLAT RATE OF $2,700 PER ANNUM, AND FROM THAT DATE UNTIL APRIL 13, 1963, AT A FLAT RATE OF $2,200 PER ANNUM, OR A TOTAL OF $5,248.67. HAVING BEEN PAID $2,692.48 AS INDICATED ABOVE, YOU CLAIM THE DIFFERENCE OF $2,556.19.

YOUR CLAIM PRIMARILY IS BASED UPON SECTION 134 OF THE STANDARDIZED REGULATIONS (GOVERNMENT CIVILIAN, FOREIGN AREAS) ISSUED BY THE DEPARTMENT OF STATE (TL:SR-105, APRIL 10, 1961), AND IMPLEMENTING REGULATIONS OF THE DEPARTMENT BY WHICH YOU WERE EMPLOYED. SECTION 134 READS IN PERTINENT PART AS FOLLOWS:

"134 DETERMINATION OF RATE PAID TO EMPLOYEES NOT UNDER "FREEZE"

"EXCEPT AS OTHERWISE PRESCRIBED IN SECTION 134.1, ANY EMPLOYEE WHOSE LQA RATE IS NOT "FROZEN" UNDER SECTION 133 SHALL RECEIVE THE FLAT RATE ALLOWANCE FOR HIS POST (SEC. 040H), QUARTERS GROUP AND FAMILY STATUS (SEC. 040M) SHOWN IN SECTION 920 AND 932, UNLESS THE RATE IS REDUCED BY ADMINISTRATIVE ACTION TAKEN ACCORDING TO SECTION 134.2.

"134.2 RESPONSIBILITY OF HEAD OF AGENCY

"A. REGARDLESS OF ANY OTHER PROVISION OF THESE REGULATIONS, THE HEAD OF AGENCY IS REQUIRED TO AUTHORIZE PAYMENTS OF LESS THAN THE FULL AMOUNT OF AN LQA OR TO WITHHOLD PAYMENT ALTOGETHER

"/1) WHEN THE EMPLOYEE'S ACTUAL HOUSING EXPENSES ARE UNUSUALLY SMALL OR NON-EXISTENT OR WHEN AN EMPLOYEE IS OCCUPYING SUBSTANDARD HOUSING IN ORDER TO RETAIN FOR OTHER PURPOSES A LARGE PORTION OF HIS LQA, OR

THE HEAD OF AGENCY SHALL TAKE SUCH STEPS AS HE MAY DETERMINE NECESSARY, INCLUDING INSPECTION OF QUARTERS, IN THE IMPLEMENTATION OF THIS PROVISION.'

THE EXCEPTION WITH RESPECT TO "FROZEN" RATES MENTIONED IN SECTION 134 HAD REFERENCE TO EMPLOYEES RECEIVING LIVING QUARTERS ALLOWANCE ON APRIL 1, 1962, AND IS NOT MATERIAL HERE.

UNDER SECTION 134.2/A) THE HEAD OF THE EMPLOYING AGENCY NOT ONLY COULD BUT WAS REQUIRED TO AUTHORIZE LESSER AMOUNTS THAN THE SPECIFIED FLAT RATE UNDER THE CONDITIONS SET FORTH IN THE SECTION AND WAS DIRECTED TO TAKE SUCH STEPS AS HE DETERMINED NECESSARY IN THE IMPLEMENTATION OF THE PROVISION. AN ANALYSIS WAS MADE OF THE ACTUAL COSTS BEING PAID BY CIVILIAN EMPLOYEES TO DETERMINE WHETHER IT WAS EQUITABLE FOR EMPLOYEES WHOSE RATES WERE NOT "FROZEN" TO BE PAID THE FLAT RATE. MEANWHILE, THE "UNFROZEN" EMPLOYEES OCCUPYING PRIVATELY RENTED QUARTERS WERE PAID ALLOWANCES BASED UPON ESTIMATED EXPENSES PLUS UTILITIES NOT TO EXCEED THE MAXIMUM FLAT RATES WHILE THOSE OCCUPYING PERSONALLY-OWNED HOMES WERE REIMBURSED ON A PER ANNUM RATE OF 10 PERCENT OF THE INITIAL PURCHASE PRICE PLUS UTILITIES.

UPON THE BASIS OF THE INFORMATION DISCLOSED BY THE STUDY, WHICH SHOWED THAT THE FULL FLAT RATES GREATLY EXCEEDED THE ACTUAL EXPENSES INCURRED BY THE EMPLOYEES, THE POLICY OF COST REIMBURSEMENT NOT TO EXCEED THE PRESCRIBED FLAT RATES WAS CONTINUED.

THE MESSAGE OF APRIL 30, 1962, TO WHICH YOU REFER DID NOT PURPORT TO ESTABLISH A PERMANENT REIMBURSEMENT RATE. IT CONSTITUTED A RATIFICATION OF THE REIMBURSEMENT PRACTICES WHICH HAD BEEN FOLLOWED SINCE APRIL 2, 1961, AND AUTHORIZED A TEMPORARY CONTINUATED THEREOF. SUBSEQUENTLY, SUCH PRACTICES WERE ADOPTED AS A REGULAR POLICY. THEREFORE, ASIDE FROM ANY QUESTION OF PRIOR AUTHORIZATION AND SINCE IT APPEARS THAT THE HEAD OF THE DEPARTMENT WAS "REQUIRED" TO AUTHORIZE A QUARTERS ALLOWANCE OF LESS THAN THE FLAT RATE IN YOUR CASE, OUR VIEW IS THAT THE REIMBURSEMENT PRACTICES OF WHICH YOU COMPLAIN WERE RATIFIED BY THE PROPER AUTHORITY AND THUS BECAME VALID FROM THEIR INCEPTION. SEE MARSH V. FULTON COUNTY, 77 U.S. 676, AND DAVIES, ET AL. V. LAHANN, ET AL., 145 F.2D 656.

THE PURPOSE OF THE LIVING QUARTERS ALLOWANCE IS TO REIMBURSE THE EMPLOYEE FOR THE COSTS OF RENT AND ALLOWABLE UTILITIES. IT IS NOT TO BE CONSIDERED AS ADDITIONAL COMPENSATION FOR SERVICES PERFORMED. YOU HAVE BEEN SO REIMBURSED. THEREFORE, ON THE BASIS OF THE PRESENT RECORD THE SETTLEMENT OF OCTOBER 7, 1963, IS SUSTAINED.

CONCERNING YOUR REQUEST FOR THE RETURN OF THE FILE, THE PAPERS SUBMITTED HAVE BECOME A PART OF THE PERMANENT RECORDS OF THIS OFFICE AND MAY NOT BE RETURNED. HOWEVER, WE SHALL BE PLEASED TO FURNISH YOUR SENATOR ANY INFORMATION AVAILABLE THEREFROM UPON HIS REQUEST.