B-133227, JAN 3, 1972

B-133227: Jan 3, 1972

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NOR IS GAO AWARE OF ANY OTHER LEGAL BASIS FOR THE PAYMENTS. A SEC POLICY DECISION WAS MADE TO STAFF POSITIONS IN THE STUDY GROUP ON THE BASIS OF APPOINTMENTS TO "BE RECORDED AS 'EXCEPTED APPOINTMENT NTE' (NOT TO EXCEED) AND A DATE.". DILLER WAS APPOINTED AS AN ECONOMIST. AT WHICH TIME HIS OFFICIAL DUTY STATION WAS DESIGNATED AS WASHINGTON. HIS APPOINTMENT WAS EXTENDED FOR A PERIOD NOT TO EXCEED DECEMBER 31. HIS DUTY STATION WAS REDESIGNATED AS NEW YORK. ADDITIONAL AMOUNTS ARE INVOLVED WITH RESPECT TO OTHER PERSONS NAMED ABOVE. SPINDEL URGES THAT "UNDER THE CIRCUMSTANCES THE COMMISSION (SEC) SHOULD HAVE SECURED THE CONTINUED SERVICES OF THESE INDIVIDUALS FOR THE PERIOD BEGINNING SEPTEMBER 1.

B-133227, JAN 3, 1972

CIVILIAN EMPLOYEE - PER DIEM AND TRANSPORTATION EXPENSES - EXCEPTED APPOINTMENTS DECISION REGARDING PAYMENT OF PER DIEM AND TRANSPORTATION EXPENSES TO CERTAIN MEMBERS OF THE STAFF OF THE SEC INSTITUTIONAL INVESTORS STUDY, WHO HAD RECEIVED "EXCEPTED APPOINTMENTS" NOT TO EXCEED A CERTAIN DATE. IT SEEMS CLEAR THAT THE SEC HAS STATUTORY AUTHORITY UNDER PUBLIC LAW 91- 556, 5 U.S.C. 3109, TO EMPLOY EXPERTS AND CONSULTANTS ON EITHER A CONTRACTUAL OR APPOINTMENT BASIS AND TO COMPENSATE THEM ON A "WHEN ACTUALLY EMPLOYED" BASIS. NOTWITHSTANDING SUCH AUTHORITY, 5 U.S.C. 5703(B) REQUIRES THAT TO ESTABLISH ENTITLEMENT TO TRAVEL EXPENSES AND PER DIEM ALLOWANCES AT THE PLACE OF EMPLOYMENT, THE INDIVIDUAL MUST BE " ... EMPLOYED INTERMITTENTLY IN THE GOVERNMENT SERVICE AS AN EXPERT OR CONSULTANT AND PAID ON A DAILY WHEN-ACTUALLY-EMPLOYED BASIS ... " THEREFORE, THE COMP. GEN. CANNOT AGREE THAT THE EMPLOYMENT OF THE SUBJECT PERSONS COULD BE CHARACTERIZED AS INTERMITTENT, NOR IS GAO AWARE OF ANY OTHER LEGAL BASIS FOR THE PAYMENTS.

TO MR. WILLIAM J CASEY:

IN A RECENT AUDIT OF TRAVEL AND OTHER EXPENSES OF THE SECURITIES AND EXCHANGE COMMISSION (SEC) OUR CIVIL DIVISION QUESTIONED THE DESIGNATIONS OF OFFICIAL DUTY STATIONS FOR CERTAIN MEMBERS OF THE STAFF OF SEC'S INSTITUTIONAL INVESTORS STUDY WHICH GAVE RISE TO PER DIEM PAYMENTS AND TRANSPORTATION EXPENSES. INFORMAL INQUIRY NO. 1C006 DATED MARCH 16, 1971, PRESENTED THE CASE OF MR. STANLEY DILLER AS REPRESENTATIVE OF THE ISSUE RAISED UNDER SIMILAR CIRCUMSTANCES DISCLOSED BY OUR AUDIT. BY LETTER OF NOVEMBER 2, 1971, MR. FREDERIC T. SPINDEL OF YOUR OFFICE OF THE GENERAL COUNSEL FORWARDED PERTINENT DATA ON OTHER STAFF MEMBERS SIMILARLY SITUATED: NAMELY, MESSRS. DONALD E. FARRAR, WILLIAM F. HICKS, KEITH B. JOHNSON, AND SEYMOUR SMIDT.

THE ACT OF JULY 29, 1968, PUBLIC LAW 90-438, 82 STAT. 453, 15 U.S.C. 78S, GRANTED SEC THE AUTHORITY TO STAFF THE STUDY BY APPOINTMENT

"WITHOUT REGARD TO THE PROVISIONS OF TITLE 5, U.S.C. GOVERNING APPOINTMENTS IN THE COMPETITIVE SERVICE, AND TO PAY, WITHOUT REGARD TO THE PROVISION OF CHAPTER 51 AND SUBCHAPTER III OF CHAPTER 53 OF SUCH TITLE RELATING TO CLASSIFICATION AND GENERAL SCHEDULE PAY RATES, SUCH PERSONNEL AS THE COMMISSION DEEMS ADVISABLE TO CARRY OUT THE STUDY AND INVESTIGATION AUTHORIZED BY THIS SUBSECTION, BUT NO SUCH RATE SHALL EXCEED THE PER ANNUM RATE IN EFFECT FOR A GS-18."

ON OCTOBER 29, 1968, A SEC POLICY DECISION WAS MADE TO STAFF POSITIONS IN THE STUDY GROUP ON THE BASIS OF APPOINTMENTS TO "BE RECORDED AS 'EXCEPTED APPOINTMENT NTE' (NOT TO EXCEED) AND A DATE." PURSUANT TO THE CITED STATUTORY AUTHORITY AND SEC STUDY STAFFING POLICY, MR. DILLER WAS APPOINTED AS AN ECONOMIST, EFFECTIVE MARCH 17, 1969, FOR A PERIOD NOT TO EXCEED SEPTEMBER 1, 1970.

THE RECORD INDICATES THAT BECAUSE OF PRIOR EMPLOYMENT COMMITMENTS MR. DILLER DID NOT ASSUME "FULL-TIME" WORK WITH THE STUDY GROUP UNTIL APRIL 18, 1969, AT WHICH TIME HIS OFFICIAL DUTY STATION WAS DESIGNATED AS WASHINGTON, D.C. ON AUGUST 30, 1970, HIS APPOINTMENT WAS EXTENDED FOR A PERIOD NOT TO EXCEED DECEMBER 31, 1970, AND HIS DUTY STATION WAS REDESIGNATED AS NEW YORK, NEW YORK. HOWEVER, HE CONTINUED TO PERFORM HIS DUTIES IN WASHINGTON. INFORMAL INQUIRY NO. 1C006 QUESTIONED TRAVEL EXPENSES CLAIMED AND PAID TO MR. DILLER DURING THE PERIOD SEPTEMBER 1 TO DECEMBER 31 IN THE AMOUNT OF $3,241.18. AS STATED, ADDITIONAL AMOUNTS ARE INVOLVED WITH RESPECT TO OTHER PERSONS NAMED ABOVE.

ON JUNE 3, 1971, MR. ARTHUR A. KICSAR, THE ASSISTANT SEC COMPTROLLER, REPLIED TO OUR INFORMAL INQUIRY BY FURNISHING A LEGAL OPINION PREPARED BY MR. SPINDEL. THE OPINION RELATES THE CIRCUMSTANCES UNDERLYING THE CONGRESSIONAL REQUESTS FOR EXTENSION OF THE STUDY SUBMISSION DATE. EXPLAINS THE EXTENSION OF THE APPOINTMENTS ON AUGUST 30, 1970, AND THE CONCOMITANT CHANGE OF OFFICIAL DUTY STATION TO NEW YORK CITY AS SUPPOSEDLY AVOIDING FOR STAFF MEMBERS THE "ECONOMICALLY UNFEASIBLE" CIRCUMSTANCE OF THEIR HAVING "TO WORK ON THE STUDY IN WASHINGTON AFTER SEPTEMBER 1, 1970, WHILE MAINTAINING RESIDENCES AND ENGAGING IN BUSINESS AT OTHER LOCATIONS." WHILE ACKNOWLEDGING THAT MR. DILLER DEVOTED SUBSTANTIALLY ALL OF HIS REGULAR WORKING HOURS BETWEEN SEPTEMBER 1 AND DECEMBER 31, 1970, TO THE SUBJECT STUDY, MR. SPINDEL URGES THAT "UNDER THE CIRCUMSTANCES THE COMMISSION (SEC) SHOULD HAVE SECURED THE CONTINUED SERVICES OF THESE INDIVIDUALS FOR THE PERIOD BEGINNING SEPTEMBER 1, 1970, AS 'EXPERTS OR CONSULTANTS' PURSUANT TO 5 U.S.C. 3109 RATHER THAN BY EXTENSION OF THEIR EXCEPTED APPOINTMENTS AND SHOULD HAVE COMPENSATED THEM ON A 'WHEN ACTUALLY EMPLOYED' (WAE) BASIS."

IT SEEMS CLEAR THAT SEC HAD STATUTORY AUTHORITY TO EMPLOY EXPERTS AND CONSULTANTS ON EITHER A CONTRACTUAL OR APPOINTMENT BASIS AND TO COMPENSATE THEM ON A WAE BASIS. (SEE PUBLIC LAW 91-556, 84 STAT. 1451; 5 U.S.C. 3109.) NOTWITHSTANDING SUCH AUTHORITY, 5 U.S.C. 5703(B) REQUIRES THAT TO ESTABLISH ENTITLEMENT TO TRAVEL EXPENSES AND PER DIEM ALLOWANCES AT THE PLACE OF EMPLOYMENT THE INDIVIDUAL MUST BE " *** EMPLOYED INTERMITTENTLY IN THE GOVERNMENT SERVICE AS AN EXPERT OR CONSULTANT AND PAID ON A DAILY WHEN-ACTUALLY-EMPLOYED BASIS. *** "

WE HAVE CAREFULLY CONSIDERED ALL INFORMATION SUBMITTED TO US, TOGETHER WITH PERTINENT LEGISLATIVE HISTORY RELATING TO CONGRESSIONAL ENACTMENTS WHICH EXTENDED THE STUDY COMPLETION DATE. SEE H. REPT. NO. 91-1418, 91ST CONG., 2D SESS. (1970), PP. 2, 7, AND HEARING ON H. J. RES. 1247 BEFORE THE SUBCOMMITTEE ON COMMERCE AND FINANCE, HOUSE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, 91ST CONG., 2D SESS. (1970), PP. 5, 8. HOWEVER, WE CANNOT AGREE THAT THE EMPLOYMENT OF MR. DILLER (AND OTHERS MENTIONED ABOVE) COULD BE CHARACTERIZED AS "INTERMITTENT" WITHIN THE PURVIEW OF 5 U.S.C. 5703(B) AND INTERPRETATIVE DECISIONS OF OUR OFFICE. SEE 35 COMP. GEN. 90 (1955); 36 ID. 351 (1956); AND B-161380, MAY 18, 1967, COPY ENCLOSED. MOREOVER, WE ARE NOT AWARE OF ANY OTHER LEGAL BASIS WHICH WOULD SUPPORT THE PROPRIETY OF THE PAYMENTS IN QUESTION.

UNDER THE CIRCUMSTANCES, PERHAPS YOUR AGENCY SHOULD SEEK RELIEF LEGISLATION ON BEHALF OF THE INDIVIDUALS INVOLVED AS HAS BEEN SUGGESTED IN INFORMAL CONTACTS WITH MEMBERS OF YOUR STAFF.

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