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CIVILIAN PERSONNEL - Travel - Actual subsistence expenses - Reimbursement - Amount determination CIVILIAN PERSONNEL - Travel - Actual subsistence expenses - Eligiblity DIGEST Actual expense reimbursement may be approved when an agency is unable to place an employee in a hotel whose costs are within the per diem rates and the employee would incur substantial costs if limited to per diem. employee received travel orders authorizing reimbursement on an actual expense basis. His hotel expense per day was less than agency guidelines for use of that basis. Over his 6-week assignment the total extra expense was a substantial amount. Be a retroactive change which is improper. Which were less than the agency's guideline to obtain reimbursement on an actual expense basis.

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B-242089, Feb 15, 1991

CIVILIAN PERSONNEL - Travel - Actual subsistence expenses - Reimbursement - Amount determination CIVILIAN PERSONNEL - Travel - Actual subsistence expenses - Eligiblity


David Keys:

An authorized certifying officer for the Internal Revenue Service (IRS) requests our decision whether the agency may reimburse Mr. David Keys for hotel costs that exceeded the maximum daily per diem rate, but which were less than the agency's guideline to obtain reimbursement on an actual expense basis. For the reasons discussed below, we conclude that the agency may do so.

In 1988, the IRS directed Mr. Keys to attend an approximately 6-week training course in Boston, Massachusetts, where the maximum per diem rate was $108 ($75 for lodging and $33 for meals and incidentals). According to the IRS, its district office was notified at a late date that Mr. Keys would be attending the course. Consequently, most of the hotels were full. However, through its contract travel agency, the IRS booked Mr. Keys into a hotel whose rate was $75, plus taxes. Accordingly, Mr. Keys's travel orders authorized actual expenses of "$75 plus tax" /1/ for lodging and $33 for meals and incidental expenses per calendar day.

The IRS's travel guidelines provide for authorizing the use of the actual expense reimbursement method instead of per diem upon a determination that per diem is inadequate to reimburse an employee due to unusual circumstances at a temporary duty location. The guidelines provide that the existence of unusual circumstances may be determined "on any reasonable basis." They also provide that, among other reasons, such a determination may be based on a finding that the actual and necessary expenses exceed the maximum per diem allowance by at least 10 percent. Internal Revenue Manual (IRM) 1763-71, Chapter 332(2) and (3).

In this case, the state and local taxes amounted to $7.28 per day, which was less than 10 percent of the maximum per diem rate of $108. /2/ Therefore, the IRS's fiscal management branch determined that Mr. Keys did not qualify for reimbursement on the actual expense basis and limited his claim for lodgings cost to the $75 maximum allowed under the per diem rate basis. That is, they disallowed the extra $7.28 charged for taxes, which, when applied to the entire 6-week period, amounted to $283.92.

Mr. Keys contends that he should not be held accountable for the extra costs since the agency made the lodging arrangements and authorized in advance the actual hotel expenses of $75 plus taxes daily.

The statutory authority to pay travel expenses is contained in 5 U.S.C. Sec. 5702 (1988). At the time of Mr. Keys's travel, implementing regulations promulgated by the General Services Administration were at Chapter 1, Part 8 of the Federal Travel Regulations (FTR) (1988). /3/ Reimbursement on an actual expense basis may be authorized on an individual basis when an employee's travel expenses are unusually high due to special or unusual circumstances. FTR, para. 1-8.1(a). For example, actual expenses may be authorized when lodgings within the per diem rate are unavailable due to a special event. FTR, para 1-8.2(2),(3). However, the regulations also provide that actual expenses may not be authorized when the expenses "exceed the applicable maximum per diem allowance by only a small amount" FTR 1-8.2(a). Agencies are directed to prescribe administrative policies and procedures under which actual and necessary expenses may be approved to ensure compliance "with the intent of these regulations." FTR, para.1-8.1(c). The IRS's guidelines discussed above appear to be for this purpose.

As a general rule, legal rights and liabilities with regard to travel expenses vest under the statute and regulations when the travel is performed and may not be modified retroactively unless there are errors apparent on the face of the original orders. Wilson Barber, Jr., B-241928, Feb. 7, 1991.

Although not consistent with its 10-percent policy, the IRS had the discretion to determine that the extra hotel costs of $7.28 per day over a 6-week period amounted to more than the small amount referred to in the regulations. Thus, Mr. Keys's travel orders on their face were not clearly inconsistent with the Federal Travel Regulations, and the actual expense method shown on them appeared to be properly authorized. Given the additional facts that the agency selected the hotel and that, due to the late notice of the training by the agency, less expensive hotels were unavailable, it would be improper for the agency now to, in effect, retroactively amend Mr. Keys's travel order to his detriment.

Therefore, Mr. Keys may be reimbursed on the actual expense basis, as originally authorized.

/1/ Although the federal government itself may not be taxed, it may reimburse its employees for taxes they must pay as part of their actual expenses. 55 Comp.Gen. 1278 (1976); B-217805, Apr. 11, 1986.

/2/ The agency erroneously applied the 10 percent figure to only the daily lodging rate. By that measurement, Mr. Keys's actual expenses were only 22 cents below the 10 percent mark. However, the IRS's guidelines require the figure to be applied to the maximum per diem.

/3/ The travel regulations were amended in 1989 without substantive change to the provisions relevant here; the amended regulations may be found at 41 C.F.R 301-8 (1990).

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