Reimbursement of Employees' Real Estate Expenses

The principal issue addressed is whether an employee who was transferred by an agency from an overseas duty station to a duty station in the United States, other than the one from which he was transferred abroad, may be reimbursed for expenses incurred in selling his old residence or buying a new residence or both. Some 50 employees of the Corp of Engineers were tansferred from Italy to Virginia and were assured by high-level officials that expenses would be reimbursed. Reimbursement of real estate expenses was not allowed and many employees suffered considerable financial losses. The requirement that the old and the new duty stations be located in the United States and other areas listed is controlling even when the travel order shows the employee is to be assigned to a second station within the United States upon completion of the overseas tour of duty. The sole basis for the payment of expenses incurred incident to the sale and purchase of a residence is that provided by statute. That the Army was in possession of funds received from a foreign government under an international agreement from which the claimed real estate expenses may be paid is not a valid reason for such payment. Payment may not be authorized; but, in view of the unduly harsh and severe adverse financial impact of the statutory provision on the employees, GAO recommended to Congress that the law be amended to allow reimbursement of real estate expenses to Federal employees who, upon completion of an overseas tour of duty, are reassigned to duty stations in the United States other than the ones from which they were transferred to the overseas posts of duty.