B-192267, SEPTEMBER 10, 1980, 59 COMP.GEN. 713

B-192267, SEPTEMBER 10, 1980, 59 COMP.GEN. 713

FOREIGN DIFFERENTIALS AND OVERSEAS ALLOWANCES - EDUCATION FOR DEPENDENTS - MAXIMUM RATE - ADMINISTRATIVE DISCRETION - TRUST TERRITORY OF THE PACIFIC ISLANDS UNDER CHAPTER 270 AND SECTION 912.1 OF THE STANDARDIZED REGULATIONS, THE HIGH COMMISSIONER OF THE TRUST TERRITORY OF THE PACIFIC ISLANDS HAS THE DISCRETIONARY AUTHORITY TO ESTABLISH THE RATE OF THE OVERSEAS EDUCATIONAL ALLOWANCE, 5 U.S.C. 5924(4)(A), RECEIVED BY DEPARTMENT OF THE INTERIOR EMPLOYEES ASSIGNED TO THE GOVERNMENT OF THE TRUST TERRITORY OF THE PACIFIC ISLANDS BELOW THE MAXIMUM RATE ESTABLISHED BY THE DEPARTMENT OF STATE STANDARDIZED REGULATIONS, SECTION 920, FOR THE GEOGRAPHICAL AREAS OF THE TRUST TERRITORY. HIS EXERCISE OF THIS DISCRETION BASED ON BUDGETARY CONSTRAINTS IS NOT IMPROPER.

MATTER OF: CARL M. BAUER, SEPTEMBER 10, 1980:

THE ISSUE PRESENTED CONCERNS THE AUTHORITY OF THE HIGH COMMISSIONER OF THE TRUST TERRITORY OF THE PACIFIC ISLANDS TO ESTABLISH THE RATE OF THE OVERSEAS EDUCATIONAL ALLOWANCE RECEIVED BY DEPARTMENT OF THE INTERIOR, OFFICE OF TERRITORIAL AFFAIRS, EMPLOYEES ASSIGNED TO THE GOVERNMENT OF THE TRUST TERRITORY OF THE PACIFIC ISLANDS (TTPI). SPECIFICALLY, WE ARE ASKED WHETHER THE HIGH COMMISSIONER MAY ESTABLISH THE EDUCATION ALLOWANCE AT A RATE BELOW THAT INDICATED AT SECTION 920 OF THE STATE DEPARTMENT STANDARDIZED REGULATIONS FOR THE GEOGRAPHICAL AREA OF THE TTPI. FOR THE FOLLOWING REASONS THE HIGH COMMISSIONER HAS SUCH AUTHORITY.

THE QUESTION ARISES FROM A CLAIM PRESENTED TO OUR CLAIM GROUP BY MR. CARL M. BAUER, AN EMPLOYEE OF THE DEPARTMENT OF THE INTERIOR, OFFICE OF TERRITORIAL AFFAIRS, ASSIGNED TO THE GOVERNMENT OF THE TTPI AND STATIONED IN SAIPAN. SINCE THE ISSUES RAISED BY MR. BAUER'S CLAIM ARE NOVEL AND POTENTIALLY AFFECT ALL OVERSEAS FEDERAL EMPLOYEES, WE ARE RENDERING A DECISION IN THIS INSTANCE.

MR. BAUER, AND HIS FAMILY RESIDE IN SAIPAN. DURING THE SCHOOL YEAR 1977- 78, MR. BAUER'S YOUNGEST DAUGHTER ATTENDED HIGH SCHOOL AT THE CANADIAN ACADEMY, KOBE, JAPAN. MR. BAUER'S DAUGHTER ATTENDED THIS SCHOOL UNDER THE PROVISIONS OF SECTION 272.3 OF THE DEPARTMENT OF STATE'S STANDARDIZED REGULATIONS (GOVERNMENT CIVILIANS, FOREIGN AREA) (GC, FA). WHEN SEEKING REIMBURSEMENT FOR HIS DAUGHTER'S AWAY-FROM-POST EDUCATIONAL EXPENSES MR. BAUER WAS INFORMED THAT BASED ON BUDGETARY CONSTRAINTS THE HIGH COMMISSIONER HAD ESTABLISHED THE MAXIMUM AWAY-FROM POST DEPENDENT EDUCATIONAL ALLOWANCE TO BE $5,300, FOR ALL FEDERAL EMPLOYEES ASSIGNED TO THE GOVERNMENT OF THE TTPI AND STATIONED WITHIN THE GEOGRAPHICAL AREA OF THE TTPI. THE RATE ESTABLISHED BY THE HIGH COMMISSIONER WAS LESS THAN THE AMOUNT MR. BAUER HAD SPENT FOR HIS DAUGHTER'S EDUCATION AND LESS THAN THE RATE ESTABLISHED BY THE DEPARTMENT OF STATE IN SECTION 920 OF THE STANDARDIZED REGULATIONS FOR THE GEOGRAPHIC AREA OF THE TTPI.

MR. BAUER QUESTIONS WHETHER THE HIGH COMMISSIONER OF THE TTPI HAS THE AUTHORITY TO ESTABLISH THE RATE FOR AN AWAY-FROM-POST DEPENDENT EDUCATIONAL ALLOWANCE BELOW THE MAXIMUM RATE PRESCRIBED BY THE DEPARTMENT OF STATE. IN QUESTIONING THE HIGH COMMISSIONER'S AUTHORITY MR. BAUER POINTS OUT THAT OTHER DEPARTMENT OF THE INTERIOR EMPLOYEES NOT ASSIGNED TO THE GOVERNMENT OF THE TTPI BUT WORKING FOR THE OFFICE OF THE COMPTROLLER FOR GUAM AND ASSIGNED TO SAIPAN ARE RECEIVING THE MAXIMUM RATE FOR THE OVERSEAS EDUCATIONAL ALLOWANCE.

AT THE OUTSET A BRIEF DISCUSSION CONCERNING THE TRUST TERRITORY OF THE PACIFIC ISLANDS IS NECESSARY. THE UNITED STATES BECAME THE ADMINISTERING AUTHORITY OF THE TTPI WHEN THE PRESIDENT OF THE UNITED STATES, ON JULY 18, 1947, APPROVED THE TRUSTEESHIP AGREEMENT BETWEEN THE UNITED STATES AND THE SECURITY COUNCIL OF THE UNITED NATIONS. AT FIRST, THE SECRETARY OF THE NAVY HAD ADMINISTRATIVE AUTHORITY FOR THE ISLANDS. HOWEVER, IN 1951 ADMINISTRATION OF THE ISLANDS WAS TRANSFERRED TO THE DEPARTMENT OF THE INTERIOR. EXECUTIVE ORDER NO. 10265, 16 FED.REG. 6419(1951). IN LEGISLATING TO IMPLEMENT THE TRUSTEESHIP AGREEMENT CONGRESS AUTHORIZED THE PRESIDENT TO VEST THE ADMINISTRATIVE POWER CONFERRED ON THE UNITED STATES BY THE TRUSTEESHIP AGREEMENT "IN SUCH PERSON OR PERSONS" TO BE EXERCISED "IN SUCH MANNER AND THROUGH SUCH AGENCY OR AGENCIES AS THE PRESIDENT MAY DIRECT OR AUTHORIZE." ACT OF JUNE 30, 1954, 68 STAT. 330, AS AMENDED, 48 U.S.C. 1681(A)(1976). BY EXECUTIVE ORDER NO. 11021 (1962), THE PRESIDENT REDELEGATED HIS AUTHORITY FOR CIVIL ADMINISTRATION OF THE ENTIRE TRUST TERRITORY TO THE SECRETARY OF THE INTERIOR. THE SECRETARY OF THE INTERIOR, IN TURN, DELEGATED EXECUTIVE AUTHORITY FOR THE TRUST TERRITORY TO THE HIGH COMMISSIONER. SEE SECRETARIAL ORDER NO. 2918, PART II, SECTION 1, 34 FED.REG. 157(1969). THE HIGH COMMISSIONER IS APPOINTED BY THE PRESIDENT AND CONFIRMED BY THE SENATE ACT OF MAY 10, 1967, 81 STAT. 15, CODIFIED, 48 U.S.C. 1681A(1976).

WE SHOULD POINT OUT THAT THE SECRETARY OF THE INTERIOR'S DELEGATION OF HIS AUTHORITY TO THE HIGH COMMISSIONER IS PROPER. SEE 5 U.S.C. 302(1976) GIVING THE SECRETARY OF THE INTERIOR BROAD POWER TO DELEGATE HIS AUTHORITY IN MATTERS OF PERSONNEL ADMINISTRATION. IN ADDITION, EXECUTIVE ORDER 11021 SPECIFICALLY PROVIDES THAT THE SECRETARY'S ADMINISTRATIVE AUTHORITY FOR THE TTPI MAY BE EXERCISED BY HIS DESIGNEE. ONE OF THE RESPONSIBILITIES DELEGATED TO THE HIGH COMMISSIONER IS TO EXERCISE THE PERSONNEL MANAGEMENT AUTHORITY OF THE SECRETARY OF THE INTERIOR OVER ALL DEPARTMENT OF THE INTERIOR EMPLOYEES ASSIGNED TO THE GOVERNMENT OF THE TTPI. PART 205, DEPARTMENT OF THE INTERIOR'S DEPARTMENT MANUAL, CHAPTER 8. THIS DELEGATION ENCOMPASSES THE SECRETARY OF THE INTERIOR'S AUTHORITY CONCERNING THE PAYMENT OF OVERSEAS ALLOWANCES UNDER 5 U.S.C. 5924(1976) AND THE STANDARDIZED REGULATIONS.

VARIOUS OVERSEAS ALLOWANCES ARE AUTHORIZED TO BE PAID TO CIVILIAN EMPLOYEES OF THE UNITED STATES LOCATED IN FOREIGN AREAS BY THE OVERSEAS DIFFERENTIALS AND ALLOWANCES ACT OF SEPTEMBER 6, 1960 (ACT), NOW CODIFIED IN 5 U.S.C. 5921 ET SEQ.(1976). ONE OF THESE ALLOWANCES IS AN EDUCATION ALLOWANCE WHICH IS A PART OF THE COST-OF-LIVING ALLOWANCES AUTHORIZED BY 5 U.S.C. 5924(1976). THE PERTINENT PART OF SECTION 5924 PROVIDES THAT:

THE FOLLOWING COST-OF-LIVING ALLOWANCES MAY BE GRANTED, WHEN APPLICABLE, TO AN EMPLOYEE IN A FOREIGN AREA:

(4) AN EDUCATION ALLOWANCE OR PAYMENT OF TRAVEL COSTS TO ASSIST AN EMPLOYEE WITH THE EXTRAORDINARY AND NECESSARY EXPENSES, NOT OTHERWISE COMPENSATED FOR, INCURRED BECAUSE OF HIS SERVICE IN A FOREIGN AREA OR FOREIGN AREAS IN PROVIDING ADEQUATE EDUCATION FOR HIS DEPENDENTS, AS FOLLOWS:

(A) AN ALLOWANCE NOT TO EXCEED THE COST OF OBTAINING SUCH KINDERGARTEN, ELEMENTARY AND SECONDARY EDUCATIONAL SERVICES AS ARE ORDINARILY PROVIDED WITHOUT CHARGE BY THE PUBLIC SCHOOLS IN THE UNITED STATES, PLUS, IN THOSE CASES WHEN ADEQUATE SCHOOLS ARE NOT AVAILABLE AT THE POST OF THE EMPLOYEE, BOARD AND ROOM, AND PERIODIC TRANSPORTATION BETWEEN THAT POST AND THE NEAREST LOCALITY WHERE ADEQUATE SCHOOLS ARE AVAILABLE, WITHOUT REGARD TO SECTION 529 OF TITLE 31 (31 USCS 529). THE AMOUNT OF THE ALLOWANCE GRANTED SHALL BE DETERMINED ON THE BASIS OF THE EDUCATIONAL FACILITY USED.

SECTION 5922(C), TITLE 5, U.S.C. BESTOWS BROAD POWERS TO REGULATE OVERSEAS ALLOWANCES AND DIFFERENTIALS FOR CIVILIAN EMPLOYEES OF THE GOVERNMENT ON THE PRESIDENT. HE IN TURN HAS DELEGATED THIS AUTHORITY TO THE SECRETARY OF STATE BY EXECUTIVE ORDER NO. 10903, JANUARY 9, 1961, AS AMENDED, 5 U.S.C. 5921 NOTE (1976). THE SECRETARY OF STATE, ACTING UNDER THIS AUTHORITY, ISSUED THE DEPARTMENT OF STATE STANDARDIZED REGULATIONS.

WE HAVE CONSISTENTLY HELD THAT THE GRANTING OF ALLOWANCES UNDER THE OVERSEAS DIFFERENTIALS AND ALLOWANCE ACT IS A DISCRETIONARY MATTER. IN 35 COMP.GEN. 289(1955) WE SPECIFICALLY HELD THAT THE GRANTING OF AN EDUCATION ALLOWANCE IS PERMISSIVE. SEE MATTER OF BROOKSHIRE, B-196809, MAY 9, 1980, AND CASES CITED THEREIN FOR EXAMPLES OF OTHER ALLOWANCES WHICH ARE DISCRETIONARY.

WITH REGARD TO OVERSEAS ALLOWANCES THE DEPARTMENT OF THE INTERIOR HAS RECOGNIZED THAT THE DEPARTMENT OF STATE IS RESPONSIBLE FOR ESTABLISHING ALLOWANCES AND DIFFERENTIALS FOR EMPLOYMENT IN DESIGNATED FOREIGN AREAS AND FOR PRESCRIBING THE RATES FOR ALL FOREIGN AREA DIFFERENTIALS AND ALLOWANCES. PART 370, DEPARTMENT OF THE INTERIOR DEPARTMENT MANUAL, CHAPTER 591, SUBCHAPTER 2.1B AND 2.2B. MOREOVER, THE DEPARTMENT MANUAL STATES THAT PERSONS IN MR. BAUER'S POSITION MUST BE PAID FOREIGN DIFFERENTIALS AND ALLOWANCES. PART 370, DEPARTMENT OF THE INTERIOR DEPARTMENT MANUAL, CHAPTER 591, SUBCHAPTER 3.1.

SINCE MR. BAUER HAS BEEN GRANTED AN EDUCATION ALLOWANCE, THE ISSUE WHICH REMAINS TO BE ADDRESSED IS WHETHER HE IS ENTITLED TO EDUCATIONAL EXPENSES BASED ON THE MAXIMUM RATE PRESCRIBED IN THE STANDARDIZED REGULATIONS, OR WHETHER THE HIGH COMMISSIONER ACTED WITHIN THE SCOPE OF HIS AUTHORITY IN PRESCRIBING A REDUCED MAXIMUM OF $5,300.

THE STATE DEPARTMENT'S REGULATIONS GOVERNING PAYMENT OF THE EDUCATION ALLOWANCE ARE SET FORTH AT CHAPTER 270 OF THE STANDARDIZED REGULATIONS. SECTION 274.11, IN DISCUSSING THE AMOUNT OF THAT ALLOWANCE, PROVIDES:

AN EMPLOYEE NORMALLY MAY BE GRANTED FOR EACH SCHOOL YEAR, OR FRACTION THEREOF, ON BEHALF OF HIS/HER CHILD IN GRADES 1-12, THE RATE INDICATED IN SECTION 920 FOR HIS/HER POST, GRADE AND EDUCATIONAL FACILITY SELECTED * * * . HOWEVER, THE OFFICER DESIGNATED TO AUTHORIZE ALLOWANCES IS REQUIRED TO AUTHORIZE SMALLER AMOUNTS WHEN HE/SHE DETERMINES THAT THE EMPLOYEE'S EXPENSES FOR EDUCATION JUSTIFY SUCH LESSER AMOUNTS.

ALTHOUGH SECTION 274.11 SPECIFIES THE CIRCUMSTANCES IN WHICH AN AMOUNT SMALLER THAN THE RATE INDICATED AT SECTION 920 MUST BE PAID, CHAPTER 270 DOES NOT DEFINE THE CIRCUMSTANCES UNDER WHICH A REDUCED ALLOWANCE MAY BE PAID. HOWEVER, THE FOLLOWING PORTION OF SECTION 912.1 MAKES IT CLEAR THAT AUTHORIZATION OF AN AMOUNT LOWER THAN THE SECTION 920 RATE IS A MATTER WITHIN THE ADMINISTRATIVE DISCRETION OF THE AUTHORIZED OFFICIAL:

* * * FOR THE EDUCATION AND THE SUPPLEMENTARY POST ALLOWANCE THE EMPLOYEE RECEIVES EITHER THE RATE INDICATED IN SECTION 920 OR 941.3 OR A LOWER AMOUNT AT THE OPTION OF THE OFFICER DESIGNATED TO AUTHORIZE ALLOWANCES.

THUS, IN ADDITION TO BEING REQUIRED TO AUTHORIZE A LOWER AMOUNT WHEN JUSTIFIED BY THE EMPLOYEE'S EXPENSES, THE DESIGNATED OFFICIAL ALSO HAS THE DISCRETION TO AUTHORIZE A REDUCED AMOUNT IN OTHER CIRCUMSTANCES.

THE DEPARTMENT OF THE INTERIOR HAS SUGGESTED THAT SECTION 013 OF THE STANDARDIZED REGULATIONS CONFIRMS ITS AUTHORITY TO PRESCRIBE A REDUCED EDUCATION ALLOWANCE WHEN JUSTIFIED BY BUDGETARY CONSTRAINTS. THAT SECTION STATES THAT "(WHEN AUTHORIZED BY LAW, THE HEAD OF AN AGENCY MAY * * * GRANT * * * COST OF LIVING ALLOWANCES * * * TO EMPLOYEES OF HIS/HER AGENCY AND REQUIRE AN ACCOUNTING THEREOF, SUBJECT TO THE PROVISIONS OF THESE REGULATIONS AND THE AVAILABILITY OF FUNDS." THIS REGULATION IS ADDRESSED SPECIFICALLY TO THE INITIAL DETERMINATION TO GRANT AN ALLOWANCE. IT DOES, HOWEVER, POINT OUT THE APPROPRIATENESS OF CONSIDERING FUNDING AVAILABILITY IN ESTABLISHING AN EMPLOYEE'S ENTITLEMENT TO COST OF LIVING AND OTHER SPECIFIED ALLOWANCES. WHILE THE REGULATIONS APPLICABLE TO CERTAIN OTHER OVERSEAS DIFFERENTIALS AND ALLOWANCES LIMIT THE CIRCUMSTANCES IN WHICH THE RATE OR MAXIMUM SET FORTH IN THE STANDARDIZED REGULATIONS MAY BE REDUCED, IN VIEW OF THE DISCRETION AFFORDED BY SECTION 912.1 IN ESTABLISHING THE EDUCATION ALLOWANCE, WE FIND NO IMPROPRIETY IN THE HIGH COMMISSIONER'S DETERMINATION, BASED ON FUNDING CONSIDERATIONS, TO ESTABLISH A MAXIMUM RATE OF $5,300 FOR THE EDUCATION ALLOWANCE.

AS WAS STATED IN THE BEGINNING, MR. BAUER CONTENDS THAT HE SHOULD RECEIVE THE MAXIMUM RATE SINCE OTHER DEPARTMENT OF THE INTERIOR, OFFICE OF TERRITORIAL AFFAIRS, EMPLOYEES STATIONED IN SAIPAN ARE RECEIVING THE MAXIMUM. WE SHOULD POINT OUT THAT THE EMPLOYEES TO WHOM MR. BAUER IS REFERRING ARE ASSIGNED TO THE OFFICE OF THE COMPTROLLER OF GUAM.

THE POSITION OF THE GOVERNMENT COMPTROLLER FOR GUAM WAS ESTABLISHED BY SECTION 5 OF THE ACT OF SEPTEMBER 11, 1968, PUB. L. 90-497, NOW CODIFIED AT 48 U.S.C. 1422D(1976). UNDER THIS ACT THE OFFICE OF THE COMPTROLLER FOR GUAM IS UNDER THE CONTROL OF THE SECRETARY OF THE INTERIOR. DEPARTMENT OF THE INTERIOR, OFFICE OF TERRITORIAL AFFAIRS, EMPLOYEES ARE ASSIGNED TO THE COMPTROLLER'S OFFICE.

MR. BAUER'S SITUATION, HOWEVER, IS DISTINGUISHABLE FROM THAT OF THE EMPLOYEES ASSIGNED TO THE COMPTROLLER'S OFFICE. FIRST, SEPARATE APPROPRIATIONS ARE MADE FOR THE TRUST TERRITORY OF THE PACIFIC ISLANDS AND FOR THE OFFICE OF THE COMPTROLLER FOR GUAM. THUS, MR. BAUER'S COMPENSATION AND ALLOWANCES ARE PAID FROM DIFFERENT FUNDS. SECONDLY, THE SECRETARY OF THE INTERIOR HAS DELEGATED HIS AUTHORITY OVER THE COMPTROLLER'S OFFICE TO THE ASSISTANT SECRETARY POLICY, BUDGET AND ADMINISTRATION, DEPARTMENT OF THE INTERIOR, RATHER THAN TO THE HIGH COMMISSIONER OF THE TRUST TERRITORY OF THE PACIFIC ISLANDS. THUS, WITHIN THE OFFICE OF TERRITORIAL AFFAIRS THE TRUST TERRITORY OF THE PACIFIC ISLANDS AND THE COMPTROLLER'S OFFICE ARE TREATED AS SEPARATE ENTITIES.

AS DISCUSSED ABOVE, THE STATUTE AND THE REGULATIONS ONLY PAVE THE WAY FOR EMPLOYEES IN THE SAME GEOGRAPHICAL AREA TO RECEIVE EDUCATION ALLOWANCES AT THE SAME RATES. SINCE THE REGULATIONS GIVE THE DESIGNATED OFFICIAL DISCRETION TO SET A LOWER RATE, AND SINCE THE HIGH COMMISSIONER AND THE ASSISTANT SECRETARY-- POLICY, BUDGET AND ADMINISTRATION-- HAVE BEEN DELEGATED AUTHORITY OVER DISTINCT FUNCTIONS WITHIN THE OFFICE OF TERRITORIAL AFFAIRS, WE FIND NO ILLEGALITY IN THE FACT THAT THESE TWO OFFICIALS HAVE EXERCISED THEIR DISCRETION DIFFERENTLY.

ACCORDINGLY, THE HIGH COMMISSIONER OF THE TRUST TERRITORY OF THE PACIFIC ISLANDS HAS AUTHORITY TO ESTABLISH RATES FOR THE OVERSEAS EDUCATIONAL ALLOWANCE BELOW THE RATE PRESCRIBED BY THE DEPARTMENT OF STATE IN THE STANDARDIZED REGULATIONS. MR. BAUER IS ONLY ENTITLED TO RECEIVE THE RATE ESTABLISHED BY THE HIGH COMMISSIONER.