B-115338, JULY 22, 1955, 35 COMP. GEN. 38

B-115338, JULY 22, 1955, 35 COMP. GEN. 38

RETIREMENT - CIVILIAN - CIVIL SERVICE RETIREMENT AND DISABILITY FUND - DISPOSITION OF AMOUNTS SET OFF AMOUNTS COLLECTED BY SET-OFF FROM THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND TO LIQUIDATE EMPLOYEES' DEBTS DUE THE UNITED STATES AND HERETOFORE RETAINED IN THE FUND ARE NOW AUTHORIZED TO BE PAID BY THE CIVIL SERVICE COMMISSION BY CHECKS DRAWN AGAINST THE FUND TO THE AGENCIES REQUESTING THE SET-OFF ACTION.

TO THE CHAIRMAN, UNITED STATES CIVIL SERVICE COMMISSION, JULY 22, 1955:

REFERENCE IS MADE TO YOUR LETTER, DATED JUNE 9, 1955, PROPOSING REVISION OF THE PROCEDURE COVERING THE PROCESSING OF AMOUNTS COLLECTED BY SET-OFF AGAINST EMPLOYEE'S CIVIL SERVICE RETIREMENT ACCOUNTS TO LIQUIDATE THEIR INDEBTEDNESS TO THE UNITED STATES.

THE PRESENT PROCEDURE, APPROVED BY THE COMPTROLLER GENERAL ON JULY 22, 1946, A-44004, AUTHORIZED THE COMMISSION TO RETAIN IN THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND THE AMOUNTS COLLECTED BY SET OFF, PROVIDED THE COMMISSION DEDUCTED THE TOTAL THUS COLLECTED FROM THE ANNUAL APPROPRIATIONS REPRESENTING THE GOVERNMENT'S CONTRIBUTION TO THE RETIREMENT FUND WHEN PREPARING ITS REQUESTS FOR SUCH APPROPRIATIONS. APPROVAL OF THIS PROCEDURE WAS PROMPTED BY THE LARGE BACKLOG OF REQUESTS FOR SET-OFF REPORTED THEN PENDING BEFORE THE COMMISSION. HOWEVER, ITS ADOPTION WAS ALSO CONSIDERED DESIRABLE AS AN ECONOMY MEASURE TO ELIMINATE COLLECTION COSTS WHICH IN MANY INSTANCES EXCEEDED THE AMOUNTS COLLECTED. THE RECORDS OF THE GENERAL ACCOUNTING OFFICE DISCLOSE THAT EXCEPTIONS TO THE PROCEDURE HAVE BEEN REQUESTED BY AND GRANTED TO ADMINISTRATIVE AGENCIES FROM TIME TO TIME TO MAINTAIN THE FINANCIAL INTEGRITY OF AN APPROPRIATION OR FUND, SO THAT IT NOW APPEARS THE PROCEDURE TO ALL INTENTS AND PURPOSES IS RESTRICTED TO ANNUAL APPROPRIATIONS ONLY.

IT IS REPORTED THAT REQUESTS FOR COLLECTION OF EMPLOYEES' DEBTS TO THE UNITED STATES BY SET-OFF AGAINST THEIR CREDITS IN THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND HAVE DROPPED TO AN AVERAGE OF 3,000 PER ANNUM, OF WHICH APPROXIMATELY 1,000 TO 1,500 RESULT IN A TRANSFER OF FUNDS. IT IS UNDERSTOOD COMMISSION PERSONNEL HAS REVIEWED THE EXISTING SET-OFF PROCEDURE IN THE LIGHT OF THE MARKED DECREASE IN VOLUME AND IS OF THE OPINION THE PRESENT METHOD OF EFFECTING TRANSFERS OF AMOUNTS COLLECTED BY SET-OFF FROM THE RETIREMENT FUND TO AGENCIES' ACCOUNTS WHERE REQUIRED, AND WHERE TRANSFERS ARE NOT REQUIRED, THE PRACTICE OF HOLDING THE AMOUNTS SO COLLECTED IN THE RETIREMENT FUND UNTIL THE TOTALS THEREOF MAY BE DEDUCTED FROM THE ANNUAL APPROPRIATIONS FOR THE GOVERNMENT'S CONTRIBUTION TO THE FUND, IS MORE EXPENSIVE THAN WOULD BE THE PROCEDURE PROPOSED. ACCORDINGLY, THE COMMISSION PROPOSES THAT THE DECISION OF THIS OFFICE DATED JULY 22, 1946, REFERRED TO ABOVE, BE RESCINDED, AND SUBMITS FOR CONSIDERATION AND APPROVAL A PROCEDURE PROVIDING FOR DIRECT PAYMENT TO AGENCIES OF AMOUNTS COLLECTED FOR THEIR ACCOUNT BY SET-OFF AGAINST THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND.

BRIEFLY, THE PROPOSED PROCEDURE WOULD AUTHORIZE THE CIVIL SERVICE COMMISSION, ON A PROSPECTIVE BASIS ONLY, TO REFUND BY CHECKS DRAWN AGAINST THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND (24X8135) THE AMOUNTS OF APPROVED SET-OFFS IN EXCESS OF $5. THE AGENCIES RECEIVING THESE CHECKS WOULD BE RESPONSIBLE FOR THE PROPER DISPOSITION OF THEIR PROCEEDS. THIS METHOD OF REFUNDING AMOUNTS COLLECTED BY SET-OFF WOULD THUS FIT INTO THE COMMISSION'S ESTABLISHED VOUCHERING OPERATION.

IT IS NOTED THAT THE PROPOSED SET-OFF PROCEDURE HAS BEEN INFORMALLY DISCUSSED WITH REPRESENTATIVES OF SEVERAL OF THE LARGER AGENCIES AND THAT THEY ARE AGREEABLE TO ITS ADOPTION. IT IS ALSO NOTED THAT THE CHIEF DISBURSING OFFICER HAS INDICATED THAT HE CAN READILY ISSUE THE CHECKS REQUIRED UNDER THE PROPOSED PLAN, AND CAN IMPRINT SUFFICIENT INFORMATION ON EACH CHECK TO ENABLE THE AGENCY REQUESTING THE SET-OFF TO MAKE PROPER DISPOSITION OF THE PROCEEDS.

IN THOSE INSTANCES WHERE SET-OFF AGAINST RETIREMENT ACCOUNTS IS MADE UPON REQUEST OF AN AGENCY WHICH IS NO LONGER IN EXISTENCE, THE PROCEDURE PROVIDES THAT THE CHECKS WITH SUFFICIENT IDENTIFYING INFORMATION ARE TO BE SENT TO THE GENERAL ACCOUNTING OFFICE FOR DISPOSITION.

IT APPEARS THAT ADOPTION OF THE REVISED PROCEDURE AS OUTLINED ABOVE WOULD RESULT IN A MORE ECONOMICAL ADMINISTRATION OF THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND.

SUBJECT TO THE FOREGOING COMMENTS THE PROCEDURE APPROVED JULY 22, 1946, A -44004, IS REVOKED, AND THE PROCEDURE OUTLINED ABOVE PROVIDING FOR REFUNDS BY CHECK OF AMOUNTS OF EMPLOYEES' INDEBTEDNESS TO THE UNITED STATES COLLECTED BY SET-OFF AGAINST THEIR RETIREMENT ACCOUNTS IS HEREBY APPROVED. THE PROPOSED LETTER TO THE RETIREMENT OFFICERS OF DEPARTMENTS AND AGENCIES RECEIVED WITH YOUR LETTER OF JUNE 9, 1955, DESCRIBING THE NEW PROCEDURE, AND IDENTIFIED AS INCLOSURE 105730, IS ALSO APPROVED AS SUBMITTED.

WITH RESPECT TO STANDARD FORM NO. 2805, REQUEST FOR RECOVERY OF DEBT DUE THE UNITED STATES, THIS OFFICE IS IN ACCORD WITH YOUR SUGGESTION THAT THE AGENCIES BE INSTRUCTED TO CHANGE THE WORD NOTICE" TO "CHECK" SO AS TO ADAPT THE FORM FOR USE UNDER THE NEW PROCEDURE AND THEREBY PERMIT UTILIZATION OF THE EXISTING SUPPLY OF THE FORM WHICH, IT IS UNDERSTOOD, IS SUFFICIENT FOR PERHAPS A YEAR'S REQUIREMENT.