OFFICE MEMORANDUM, UNITED STATES GOVERNMENT

Date: OCTOBER 14, 1946.

To: Charles B. Chapman, Director, Aircraft, Component Sales Division. (Attention of Mr. Donovan.)

From: Grace W. Royall, Organization Personnel Branch.

Subject: Kenneth Kleinman.

We have just received a memorandum from Mr. Peebles as follows:

"Due to the recent classification survey made in the Aircraft Division the position occupied by Kenneth Kleinman was reallocated to a CAF-7.

"You have informed this office that there are no vacancies in the Aircraft Division for which Mr. Kleinman would qualify at his present grade level. Under the circumstances, it will be necessary to process Mr. Kleinman's reclassification to the CAF-7 position.

"However, in accordance with Daily Bulletin No. 75, dated September 16, which states that if salary rate in former position is above maximum of new grade and the position remains the same the employee retains his present salary, he will be able to retain his present salary of $4,902 per annum.”

Please advise Mr. Kleinman accordingly.

MAY 17 (legislative day, MAY 13), 1954.—Ordered to be printed

Mr. LANGER, from the Committee on the Judiciary, submitted the

following

REPORT

[To accompany H. R. 2022]

The Committee on the Judiciary, to which was referred the bill (H. R. 2022) for the relief of Don B. Whelan, having considered the same, reports favorably thereon without amendment and recommends that the bill do pass.

PURPOSE

The purpose of the proposed legislation is to relieve Mr. Don B. Whelan, of Lincoln, Nebr., of all liability to refund the United States any part of moneys erroneously paid to him by the United States as salary from the period October 31, 1946, to October 27, 1947, inclusive, at the highest pay rate for grade P-5, while he was holding the position of insect- and rodent-control officer, with the United States forces in Korea, when such salary during such period should have been based on the lowest pay rate for such grade.

STATEMENT

On October 7, 1946, Don B. Whelan, filed with the War Department a formal application in writing for the position of insect- and rodentcontrol officer in Korea, at grade P-5. He was subsequently appointed to that position under the Classification Act of 1923, as amended, at the maximum base salary rate of grade P-5, $6,862.80, per annum, which rate plus foreign service differential totals $8,578.50. He was paid at that rate for the period beginning October 31, 1946, and ending September 20, 1947. The appointment of Mr. Whelan at the maximum salary of the grade in which his position was classified, was found by the Comptroller General to have been in contravention

of rule 6 of section 6 of the Classification Act of 1923 (42 Stat. 1490) which provides that

All new appointments shall be made at the minimum rate of the appropriate grade or class thereof.

The reports of the Comptroller General and the Department of the Army on this legislation indicate that the salary designation was made by the Government, that Mr. Whelan accepted this position in good faith, and that the payment of the maximum salary for the grade in which he served was erroneously paid him through no fault of his own. The Department of the Army concludes that, in view of the circumstances in this case, it would appear to be a rather severe hardship to compel him to repay the United States the salary overpayments, which total $1,064.64.

In 1951, the Acting Comptroller General of the United States, in a letter to the late Senator Wherry, recognized that the evidence showed that the tender of the position to Mr. Whelan at the higher salary induced him to accept employment which he otherwise might have refused, and it was recognized that the overpayment occurred as the result of the erroneous action of an administrative official of the Department of the Army. In another letter addressed to the late Senator Wherry, the Comptroller General of the United States stated that it is believed that, since the circumstances of Mr. Whelan's case are so unusual, an exception would be warranted and that any report that the Department might be requested to make in regard thereto would not be unfavorable.

In view of the fact that the error in the salary designation of this claimant was attributable to an administrative officer of the United States Government, and since it appears that it would now work a hardship on the claimant to require the repayment of the sum necessary to correct this overpayment, the committee recommends favorable consideration of this legislation.

Attached to this report and made a part thereof is the report of the Department of the Army referred to earlier and other pertinent material.

Hon. CHAUNCEY W. REED,

Chairman, Committee on the Judiciary,

DEPARTMENT OF THE ARMY, Washington 25, D. C., July 9, 1953.

House of Representatives.

DEAR MR. REED: Reference is made to your letter enclosing a copy of H. R. 2022, 83d Congress, a bill for the relief of Don B. Whelan, and requesting a report on the merits of the bill.

This bill provides as follows

"That Don B. Whelan, Lincoln, Nebraska, is hereby relieved of all liability to refund to the United States the sum of $966.84. Such sum represents the amount of certain alleged salary overpayments made to him during the period beginning October 31, 1946, and ending November 25, 1947, while employed as an insect-and rodent-control officer with the Armed Forces in Korea. During the period of such employment the said Don B. Whelan received the salary which had been agreed upon at the time of his appointment, but after the termination of such period the Secretary of the Army ruled that such appointment had been made at an incorrect salary rate. In the audit and settlement of the accounts of any certifying or disbursing officer of the United States, full credit shall be given for the amount for which liability is relieved by this Act.

"SEC. 2. The Secretary of the Treasury is authorized and directed to pay, out at any money in the Treasury not otherwise appropriated, to the said Don B.

Whelan, an amount equal to the aggregate of any amounts which may have been paid by him, or withheld from sums otherwise due him, in complete or partial satisfaction of the claim of the United States for such refund."

The records of the Department of the Army show that on July 31, 1944, the War Department gave Don B. Whelan, a war service indefinite appointment as an entomologist, grade P-4, at a salary of $3,800 per annum, with duty with the Corps of Engineers, Maintenance and Repair Section, Seventh Service Command, Omaha, Nebr., and that he entered upon duty under such appointment on that date. He subsequently received in-grade increases in salary. He' resigned his position with the Corps of Engineers effective February 8, 1946, which position was then paying him a salary of $4,520 per annum, in order to enter private business.

On October 7, 1946, Mr. Whelan filed with the War Department a formal application in writing for the position of insect and rodent control officer, in Korea, at grade P-5. Thereafter on October 31, 1946, Mr. Whelan received an appointment from the War Department as insect and rodent control officer, United States forces, Korea, grade P-5, at a salary of $8,578.50 per annum ($6,862.80 base pay; plus $1,715.70, a 25-percent differential for overseas service), and he duly entered upon duty under said appointment on that date. On September 3, 1947, Mr. Whelan submitted his resignation of this position because he had been unable to get his family overseas. His resignation was accepted effective October 27, 1947. The salary paid to Mr. Whelan was the same during his entire serivce under the last-mentioned appointment; namely, $8,578.50.

It appears that some time after Mr. Whelan relinquished his position on October 27, 1947, an audit by the General Accounting Office of civilian payroll records resulted in the discovery that he had been erroneously appointed and paid in the highest pay rate for grade P-5, instead of the lowest pay rate for that grade, and an exception, therefore, was taken to a portion of the payments thus made to him. The Comptroller General determined that the appointment in question should have been made in the lowest pay rate for grade P-5. He further held that Mr. Whelan is legally obligated to refund to the United States all sums received by him as salary payments during the period from October 31, 1946, to October 27, 1947, inclusive, while serving in grade P-5, in excess of the lowest pay rate for that grade. On November 3, 1950, the Army Finance Center, St. Louis, Mo., wrote a letter to Mr. Whelan advising him that he had been overpaid salary payments while he held the position of insect and rodent control officer, grade P-5, in the aggregate amount of $966.84, and demanded that he refund that amount to the United States. The Army Finance Center has advised that it subsequently developed that there was one voucher, covering an excess payment in salary in the amount of $97.62 to Mr. Whelan while he held the aforementioned grade P-5 position, which had not been covered in the audit of his accounts by the General Accounting Office. Consequently, the overpayments made to Mr. Whelan while he held said grade P-5 position were in the total amount of $1,064.46, rather than the sum of $966.84. Mr. Whelan has not refunded to the United States any part of said indebtedness.

On July 31, 1952, the Acting Director of Civilian Personnel, Office of the Secretary of the Army, submitted the following statement concerning this case: "1. A review of the records of this office reveals that Mr. Don B. Whelan was given an excepted appointment in Korea as insect and rodent control officer, P-5, at a salary of $6,862.80 per annum, effective October 31, 1946. Mr. Whelan accepted this position in good faith and was erroneously paid the maximum salary for the grade through no fault of his own.

"2. In this connection, it is noted that until July 1, 1946, overseas employees in occupied areas served in ungraded positions at Classification Act pay rates, and within-grade pay rates could be used freely to meet the salary requirements of the labor market. The error made in this case appears to have arisen from the failure of the recruiter to take into account the strict limitations on the use of withingrade rates which became applicable to positions in occupied areas effective July 1, 1946."

The evidence in this case shows that Mr. Whelan accepted the appointment: of insect and rodent control officer, grade P-5, at a total salary of $8,578.50 per annum ($6,862.80 base pay; plus an overseas differential in the amount of $1,715.70), in good faith, and that the overpayment of compensation to him in the aggregate amount of $1,064.46 resulted solely from the erroneus action of the War Department in appointing the claimant at the highest pay rate for grade P-5, rather than at the lowest pay rate for that grade. It appears that the claimant collected the salary which both he and the appointing authorities thought he was