B-3691, JUNE 5, 1939, 18 COMP. GEN. 907

B-3691, JUNE 5, 1939, 18 COMP. GEN. 907

APPOINTMENTS - EFFECTIVE DATE - "BOARD APPROVAL" REQUIREMENT WAIVER THE FEDERAL HOME LOAN BANK BOARD REGULATION REQUIRING THAT THERE BE "BOARD APPROVAL" FOR EMPLOYMENTS OF THE TYPE THEREIN SPECIFIED, AND THAT THERE BE NO "ENTRANCE ON DUTY PRIOR TO BOARD APPROVAL," BEING STATUTORY IN ORIGIN, AS DISTINGUISHED FROM AN ADMINISTRATIVE REGULATION, IT CANNOT BE CHANGED BY A WAIVER OR EXCEPTION SO AS TO MAKE RETROACTIVELY EFFECTIVE THE APPROVAL OF AN APPOINTMENT MADE BY AN INDIVIDUAL BOARD MEMBER, AND, AS APPOINTMENTS ARE EFFECTIVE FROM DATE OF ACCEPTANCE AND ENTRANCE ON DUTY AFTER THE APPOINTING POWER ACTUALLY TAKES ACTION, UNLESS A LATER DATE IS STATED IN THE APPOINTMENT, PAY FOR ANY PERIOD PRIOR TO THE DATE ON WHICH THE BOARD'S APPROVAL ACTION WAS TAKEN IS NOT AUTHORIZED.

COMPTROLLER GENERAL BROWN TO THE CHAIRMAN, FEDERAL HOME LOAN BANK BOARD, JUNE 5, 1939:

CONSIDERATION HAS BEEN GIVEN LETTER DATED MAY 10, 1939, FROM THE VICE CHAIRMAN, AS FOLLOWS:

ON JANUARY 5, 1939, MR. FRANK W. HANCOCK, JR., TOOK OFFICE AS A MEMBER OF THE FEDERAL HOME LOAN BANK BOARD. MR. HANCOCK APPOINTED AS HIS DEPUTY MR. JOHN W. MEDFORD, WHO BEGAN HIS DUTIES ON FEBRUARY 27, 1939. BY REASON OF THE FACT THAT MR. HANCOCK WAS SOMEWHAT UNFAMILIAR WITH THE REGULATIONS OF THE BOARD, THE FORMAL APPROVAL BY THE BOARD OF THE APPOINTMENT OF MR. MEDFORD, PURSUANT TO THE PROVISIONS OF SECTION 1117 OF THE CONSOLIDATED MANUAL OF THE RULES AND REGULATIONS OF THE CORPORATION, WHICH PROVIDES AS FOLLOWS:

"BOARD APPROVAL SHALL BE REQUIRED FOR THE EMPLOYMENT OF "EXECUTIVES" OR FOR CHANGE OF STATUS OF AN EMPLOYEE FROM "NONEXECUTIVE" TO "EXECUTIVE.' SUCH ACTION SHALL BE SUPPORTED BY THE APPROVAL OF THE ASSISTANT GENERAL MANAGER, NATIONAL DEPARTMENT HEAD, AND DIRECTOR OF PERSONNEL. ENTRANCE ON DUTY PRIOR TO BOARD APPROVAL IS NOT AUTHORIZED.' WAS NOT OBTAINED UNTIL MARCH 1, 1939. ON MARCH 1, 1939, THIS OVERSIGHT HAVING BEEN DISCOVERED, THE APPOINTMENT OF MR. MEDFORD WAS APPROVED BY THE BOARD AS OF FEBRUARY 27, 1939, THE FOLLOWING ENTRY BEING MADE IN THE MINUTES OF THAT MEETING:

MINUTES OF THE 1364TH MEETING, BOARD OF DIRECTORS

HOME OWNERS' LOAN CORPORATION AND

FEDERAL HOME LOAN BANK BOARD MARCH 1,

1939. PAGE 9332

THE BOARD OF DIRECTORS APPROVED THE FOLLOWING PERSONNEL RECOMMENDATION:

WASHINGTON, D.C.

APPOINTMENT EXCEPTED:

J. W. MEDFORD, DEPUTY TO BOARD MEMBER, GR. 17, $6,200, OFFICE OF BOARD MEMBERS, MR. HANCOCK'S OFFICE, WASHINGTON, D.C. HOME OFFICE 2/27/39.

PURSUANT TO THIS ACTION BY THE BOARD, VOUCHER NO. 60988, SCHEDULE NO. 8051, WAS SUBMITTED BY MR. MEDFORD IN THE AMOUNT OF $68.88, AND RETURNED BY YOUR OFFICE WITHOUT CERTIFICATION ON MARCH 21, 1939, ACCOMPANIED BY A PREAUDIT DIFFERENCE STATEMENT STATING AS FOLLOWS:

"VOUCHER RETURNED WITHOUT CERTIFICATION.

"UNDER SECTION 1117 OF THE CONSOLIDATED MANUAL, ENTRANCE ON DUTY OF AN EMPLOYEE PRIOR TO BOARD APPROVAL IS NOT AUTHORIZED.

"IT APPEARS THAT THE APPOINTMENT IN THE INSTANT CASE WAS NOT ACTUALLY MADE UNTIL MARCH 1, 1939, THEREFORE, THE EMPLOYEE IS NOT ENTITLED TO COMPENSATION FOR SERVICES RENDERED PRIOR TO THAT DATE.'

IN VIEW OF THE CIRCUMSTANCES CONCERNING THIS CASE, IT IS THE OPINION OF THE BOARD THAT AN INJUSTICE HAS BEEN DONE MR. MEDFORD, AND THAT HE SHOULD RECEIVE COMPENSATION AT LEAST FOR THE SERVICES WHICH HE PERFORMED ON FEBRUARY 27 AND 28, 1939, AND IT IS FURTHER THE DESIRE OF THE BOARD, AS ITS ACTION OF MARCH 1 INDICATES, THAT ITS OWN REGULATIONS IN THIS CASE BE WAIVED IN THE INTEREST OF FAIR DEALING.

YOUR COMMENT AND SUGGESTIONS, IN THE LIGHT OF THESE FACTS, AS TO WHAT EQUITABLE SOLUTION CAN BE REACHED IN THIS MATTER, WOULD BE GREATLY APPRECIATED.

SECTION 1439, TITLE 12 OF THE U.S.C. PROVIDES, IN PART, AS FOLLOWS:

THE BOARD SHALL HAVE POWER TO SELECT, EMPLOY, AND FIX THE COMPENSATION OF SUCH OFFICERS, EMPLOYEES, ATTORNEYS, AND AGENTS AS SHALL BE NECESSARY FOR THE PERFORMANCE OF ITS DUTIES UNDER THIS CHAPTER WITHOUT REGARD TO THE PROVISIONS OF OTHER LAWS APPLICABLE TO THE EMPLOYMENT OR COMPENSATION OF OFFICERS, EMPLOYEES, ATTORNEYS, AND AGENTS OF THE UNITED STATES. * * * THE SALARIES OF ITS MEMBERS AND EMPLOYEES, WHOSE EMPLOYMENT COMPENSATION, LEAVE, AND EXPENSES SHALL BE GOVERNED SOLELY BY THE PROVISIONS OF THIS CHAPTER, SPECIFIC AMENDMENTS THEREOF, AND RULES AND REGULATIONS OF THE BOARD NOT INCONSISTENT THEREWITH (JULY 22, 1932, C. 522, SEC. 19, 47 STAT. 737; MAY 28, 1935, C. 150, SEC. 9, 40 STAT. 295).

UNDER THIS STATUTE THE POWER OF APPOINTMENT OF EMPLOYEES OF THE BOARD IS VESTED IN THE BOARD, NOT IN AN INDIVIDUAL MEMBER THEREOF. CF. 14 COMP. GEN. 698; ALSO, DECISION A-47928, DATED MARCH 20, 1933, TO YOU. THE STATUTE ALSO SPECIFICALLY PROVIDES THAT THE EMPLOYMENT AND COMPENSATION OF EMPLOYEES SHALL BE GOVERNED BY THE RULES AND REGULATIONS OF THE BOARD NOT INCONSISTENT WITH THE STATUTE AND ITS AMENDMENTS. THE RULES AND REGULATIONS OF THE BOARD SPECIFICALLY PROVIDE THAT ENTRANCE ON DUTY OF AN EXECUTIVE EMPLOYEE--- WHICH IS UNDERSTOOD TO BE THE STATUS EMPLOYMENT. MR. MEDFORD WAS EMPLOYED AND ENTERED ON DUTY PRIOR TO APPROVAL OF HIS EMPLOYMENT BY THE BOARD IN DIRECT CONTRAVENTION OF THE REGULATIONS WHICH HAD BEEN ISSUED PURSUANT TO THE STATUTE AND HAVE THE FORCE AND EFFECT OF LAW. IN OTHER WORDS, THE REGULATION OF THE BOARD IN QUESTION, QUOTED IN YOUR LETTER, IS A STATUTORY, AS DISTINGUISHED FROM AN ADMINISTRATIVE REGULATION, AND MAY NOT, AS SUCH, BE WAIVED IN ANY PARTICULAR CASE. SEE DECISION A-86591, DATED JUNE 23, 1937, TO YOU.

IN DECISION OF NOVEMBER 27, 1922, 2 COMP. GEN. 342, IT WAS STATED AT PAGE 343, AS FOLLOWS:

REGULATIONS MADE IN PURSUANCE OF LAW AND NOT INCONSISTENT THEREWITH HAVE THE FORCE AND EFFECT OF LAW UNTIL REVOKED, MODIFIED, OR SUSPENDED. SUCH REGULATIONS MUST BE UNIFORM AND GENERAL IN THEIR APPLICATION AND WITHOUT RETROACTIVE EFFECT, AND ANY MODIFICATION OR SUSPENSION THEREOF MUST LIKEWISE BE OF GENERAL AND PROSPECTIVE APPLICATION. 26 COMP. DEC. 99. ALSO, A REGULATION MADE PURSUANT TO, OR IN EXECUTION OF, A STATUTE CANNOT BE CHANGED BY A WAIVER OR EXCEPTION THERETO, BUT ONLY BY AN EFFECTIVE MODIFICATION IN THE OLD REGULATIONS, WHICH MAKES A NEW REGULATION THEREAFTER. 21 COMP. DEC. 482.

SEE, ALSO, 4 COMP. GEN. 363; ID. 480; ID. 888; ID. 986; 5 ID. 864; 17 ID. 566.

ACCORDINGLY, THE ACTION OF THE BOARD IN ATTEMPTING TO WAIVE RETROACTIVELY EFFECTIVE THE STATUTORY REGULATION GOVERNING THE EMPLOYMENT OF MR. MEDFORD WAS WITHOUT FORCE AND EFFECT.

IT HAS BEEN HELD THAT APPOINTMENTS ARE EFFECTIVE FROM DATE OF ACCEPTANCE AND ENTRANCE ON DUTY AFTER THE APPOINTING POWER ACTUALLY TAKES ACTION, UNLESS A LATER DATE IS STATED IN THE APPOINTMENT, AND MAY NOT BE RETROACTIVE. 8 COMP. GEN. 582; 17 ID. 323.

UNDER THE FACTS AND APPLICABLE LAW I HAVE NO ALTERNATIVE BUT TO SUSTAIN THE AUDIT ACTION.