Mr. Harold F. Brown, an employee of this Administration, was placed on Military Furlough, November 6, 1943, at which time he entered the military service. He had previously been granted advance sick leave, some of which remained unpaid at the time he was placed on military furlough. Under date of February 9, 1944, he advised us by letter that he was honorably discharged from miltary service on January 21, 1944, and that he desired to return to active duty with this Administration. The matter was handled by correspondence and he returned to active duty with this Administration February 29, 1944. Question 1. Upon return to active duty, should he stand charged with the advance sick leave that remained unpaid at the time he was placed on military furlough, and he be required to repay it through accruals; or should it be considered as forgiven as at the time he entered military service? At the time Mr. Brown entered the military service, there was in force section 11 of the Sick Leave Regulations, Executive Order No. 8385, dated March 29, 1940, with respect to which it was stated in decision of April 24, 1943, 22 Comp. Gen. 990, 992, on the claim of T. Barden Sexton, as follows: However, the situation as to collection on account of overdrawn sick leave under section 11 of the Sick Leave Regulations above quoted, is different in your case for the reason that said section of the regulation in respect of the requirement for refund on account of excess sick leave is specifically limited to "the case of voluntary separation or removal for cause." Your entry into the active military service, whether by enlistment or by induction, is not for regarding as a "voluntary separation or removal for cause" within the meaning section 11 of the Sick Leave Regulations, so as to require collection from you for overdrawn sick leave. While the earlier laws and decisions made a distinction between employees who were “ordered" into the active military or naval service and those who voluntarily enlisted, with respect to leave benefits and reemployment rights (see 21 Comp. Gen. 210, 403, and the statutes therein considered), later statutes now in force and the decision thereunder show a definite intention to treat all employees alike with regard to such benefits, regardless of the circumstances under which they enter the active military or naval service (i. e., whether by induction or by enlistment). See section 7 of the act of August 18, 1941, 55 Stat. 627, act of April 7, 1942, Public Law 517, 56 Stat. 200, amending the act of August 1, 1941, and 22 Comp. Gen. 47. It is concluded, therefore, that under the terms of section 11 of the Sick Leave Regulations, overdrawn sick leave is not required to be charged to an employee whose "separation" is due to his entering into the active military or naval service without a break in service. A similar conclusion was reached in the application of the new leave regulations in force on and after January 1, 1944 (Executive Order 9494, dated January 13, 1944). See question and answer 15, decision of March 16, 1944, B-40518, 23 C. G. 677, to the President, United States Civil Service Commission. The specific question presented in the above-quoted letter-whether a sick leave charge must be restored to an employee upon return of the employee to his civilian position after discharge from the active military service-was not considered or decided in either of those decisions. In decision of August 12, 1943, 23 Comp. Gen. 96, 98, it was stated: While it is true that if and when a discharged soldier is restored to his civilian position he is not to be regarded as having been separated from civilian service, nevertheless, it would seem to be the intent of section 8 of the Selective Training and Service Act of 1940 (and other statutes in pari materia) when considered in the light of the act of August 1, 1941, as amended by the act of April 7, 1942, 56 Stat. 200, authorizing employees "to elect to have such leave remain to their credit until their return from active military or naval service," to restore to an employee so much of his annual leave credit as had not been liquidated by pay ment, as well as all his sick leave credit which he had when he entered the active military service As a corollary to said holding there is required the conclusion that a sick leave charge, also, must be restored to an employee when he is restored to his civilian position under the terms and conditions of the Selective Training and Service Act, 54 Stat. 885, after discharge from the active military service. That is to say, when an employee is restored to his civilian position, or to a position of like seniority, status and pay under the terms and conditions of the Selective Training and Service Act, he is to "be considered as having been on furlough or leave of absence during his period of active military service" (21 Comp. Gen. 403, 408), and is to be restored with the same leave status (as to both credits and debits) as he had when he left his civilian position to enter the active military service. Accordingly, the first of alternative questions is answered in the affirmative and the second in the negative. (B-41681) LEAVES OF ABSENCE-TRANSFERS EMPLOYEES REINSTATED AFTER WAR SERVICE TRANSFERS Section 9 of the Sick Leave Regulations (Executive Order No. 8385), which precluded the transfer of an employee's accrued sick leave from one agency to another unless his transfer was without "break in service"-a separation of one or more work days-does not operate to prevent the transfer of accrued sick leave of an employee who transferred with reemployment rights and benefits provided by the war service regulations and who, after the involuntary termination of his service in the position to which transferred, made timely application for reemployment in his former position and was restored after a lapse of more than one day but within the 40-day period prescribed by the war service regulations. Comptroller General Warren to the Federal Security Administrator, May 10, 1944: I have your letter of April 26, 1944, as follows: A permanent employee of this agency transferred on April 8, 1942, without break in service to a permanent position in the War Relocation Authority with reemployment benefits as provided in Section 2, Subsection (a) of War Service Regulation IX. At the time of transfer he had accumulated 70 days of sick leave with this agency, which was transferred to the War Relocation Authority. On August 23, 1943, this employee was separated by the War Relocation Authority involuntarily and without cause. He applied immediately for employment in this agency and was reemployed in a permanent position on August 28, 1943. The employee in question had a balance of slightly under 90 days of accumulated sick leave at the time he was separated by the War Relocation Authority. Section 9 of Executive Order 8385 of March 29, 1940, containing the sick leave regulations in effect at the time of the individual's separation and reemployment, provided that an employee transferred or reappointed without break in service from one permanent position to another permanent position within the same, or a different governmental agency, should have his accumulated sick leave transferred. The Order defined "break in service" to mean separation for a period of one or more work days, and it was construed to prohibit the transfer of such leave where there was a break in service. If the reemployment of the individual in this agency had been without regard to the War Service Regulations 598796-44-vol. 23-57 there would be no question but that his accumulated sick leave was forfeited upon his separation from the War Relocation Authority. However, Section 5, Subsection (a), of War Service Regulation IX provides in pertinent part as follows: * * "Any person, except one holding a temporary position, transferred under this regulation under such conditions as to entitle him to reemployment benefits, whose services are subsequently terminated involuntarily and without cause, such as would reflect on his suitability for employment in the Federal Service, shall be entitled to the rights specified below, provided that he makes application for reinstatement within forty days after the termination of his services * * * he shall be reinstated within thirty days of his application * * * in his former position or in a position of like seniority, status and pay, in such manner, to the extent consistent with law, that he does not lose any of the rights or benefits to which he would have been entitled had he not been transferred or released, provided that such a position then exists." It may be noted that a break in service is expressly contemplated by the provisions of the regulation permitting application and reemployment within a specified period subsequent to the employee's termination. Insofar as the above provision expressly precludes denial of any rights or benefits to which the individual would have been entitled had he not been transferred, it appears to add benefits to those stipulated by the applicable section of the War Service Regulations in effect prior to September 14, 1942, on which date the language quoted above was promulgated. The earlier regulation, to the extent here material, required only reinstatement "in his former position or in a position of like seniority, status, or pay * May the rule of Section 9 of Executive Order 8385 that an employee who had a break in service would forfeit accumulated leave, be regarded as inapplicable in the case of reemployment under section 5, Subsection (a), of War Service Regulation IX? And is this agency authorized to credit the employee in question with the sick leave which was to his credit at the time he was separated from the War Relocation Authority? In decision of October 8, 1943, 23 Comp. Gen. 265, 266, to you it was stated: The evident purpose and intent of that portion of the war service regulation quoted in your letter-particularly the underscored portion-is to restore an employee to a position in the agency from which transferred-in this case the Federal Security Agency-with the same seniority status and pay and without the loss of any rights or benefits to which he would have been entitled had he continued to serve in such agency while he served in the other agency. Said regulation thus renders inapplicable the general rule stated in 21 Comp. Gen. 285, et alia. In other words, the purpose and intent appears to have been to provide substantially the same benefits in that respect as is authorized by law and regulation for employees who enter the active military or naval forces Compare 22 Comp. Gen. 969. * In decision of August 12, 1943, 23 Comp. Gen. 96, 98, it was stated: While it is true that if and when a discharged soldier is restored to his civilian position he is not to be regarded as having been separated from civilian service, nevertheless, it would seem to be the intent of section 8 of the Selective Training and Service Act of 1940 (and other statutes in pari materia) when considered in the light of the act of August 1, 1941, as amended by the act of April 7, 1942, 56 Stat. 200, authorizing employees "to elect to have such leave remain to their credit until their return from active military or naval service," to restore to an employee so much of his annual leave credit as had not been liquidated by payment, as well as all his sick leave credit which he had when he entered the active military service In view of said decisions it may be held that since sick leave credit is a right or benefit to which the employee mentioned in your letter would have been entitled had he continued to serve in the Federal Security Agency during the period he served in the War Relocation Authority; and as the employee applied for reemployment within the time prescribed by the War Service Regulations and was restored to his position in the Federal Security Agency, he is entitled to have restored to him the sick leave to his credit when he left the employment of the War Relocation Authority-there having been no break in service within the meaning of the War Service Regulations. Hence, both questions posed in the concluding paragraph of your letter are answered in the affirmative. (B-41611) CONTRACTS-COST-PLUS-COMMISSIONS FROM PAY TELEPHONES IN GOVERNMENT-OWNED PLANT LEASED TO PRIVATE CONTRACTOR Where a Government-owned naval ordnance plant was leased to a contractor at a rental of $1 per annum under a contract which gave the contractor "complete supervision and operation of the plant" but specifically provided that the plant shall be operated for the "exclusive benefit of the Government," commissions accruing from pay telephones installed at the plant for the convenience of the contractor's personnel represent income incident to the use of said Government building, and, therefore, should be deposited and covered into the Treasury as miscellaneous receipts in accordance with section 3617, Revised Statutes, rather than applied in reduction of the gross contract cost. Comptroller General Warren to the Acting Secretary of the Navy, May 11, 1944: There has been considered the matter presented in letter of April 24, 1944 (JAG: II: HJM: amp), from the Judge Advocate General of the Navy, as follows: The Navy Department is in receipt of a request from the Commandant, Ninth Naval District, Great Lakes, Illinois for information as to the disposition of commissions accruing on collections from pay telephones installed in the U. S. Naval Ordnance Plant, Canton, Ohio. The Naval Ordnance Plant, Canton, Ohio, is operated by Westinghouse Electric and Manufacturing Company under a contract with the Navy Department, which contract gives the contractor complete supervision and operation of the plant subject to certain contract provisions. Costs of telephone service are charged against the contract and arrangements for the installations of the pay telephones which are chiefly for the use of the contractor's personnel have been made by the contractor. A copy of pertinent provisions of the contract between the Navy Department and the Westinghouse Electric and Manufacturing Company is enclosed. Attention is particularly invited to Article XI (b). The question arises as to whether the commissions from the pay telephones should be deposited in the Treasury to the credit of "Miscellaneous Receipts 173230, Commissions on Telephone Pay Stations in Federal Buildings outside of Washington, D. C.," pursuant to the decisions of the Comptroller General of 11 September 1934 (14 Comp. Gen. 203) and the letter of the Comptroller General to the Secretary of the Navy of 24 April 1943, relative to collections of telephone commissions by ship service stores and other activities, or should properly be retained by the contractor. A decision in the premises is requested. Section 3617, Revised Statutes (31 U. S. C. 484), provides as follows: The gross amount of all moneys received from whatever source for the use of the United States, except as otherwise provided in the next section, shall be paid by the officer or agent receiving the same into the Treasury, at as early a day as practicable, without any abatement or deduction on account of salary, fees, costs, charges, expenses, or claim of any description whatever. Under the provisions of the above-quoted law it is clear that if the commissions in question are for payment direct to the United States they are for depositing and covering into the Treasury of the United States as miscellaneous receipts. 14 Comp. Gen. 203. And it equally is clear that since the pay telephones in the situation presented are located on Government-owned property, the United States is entitled to direct payment of such commissions from the involved telephone company unless by virtue of a contract, lease, or otherwise, the United States has divested itself of that right. Accordingly, there is for consideration here whether, under the terms of contract NOS-79128 between the Navy Department and the Westinghouse Electric and Manufacturing Company, the United States has relinquished its right to income accruing from the use of the pay telephones. Sections (a) and (c), respectively, of article I of the contract provide as follows: The Government does hereby lease to the Contractor for an annual rental of one dollar the property, plant, and facilities of the United States Naval Ordnance Plant at Canton, Ohio, hereinafter called Plant, for a term of one year from the date on which the Chief of the Bureau of Ordnance, or his authorized representative and Contractor, determine that the plant is ready to begin operations, with the right of renewal for succeeding yearly periods, upon the same terms and conditions, until terminated, as specifically provided herein. The Contractor agrees to operate the Plant for the exclusive benefit of the Government and to perform any work for which the Plant is equipped and that is ordered by the Government. The Contractor will do no work within the Plant that is not directly or indirectly required by job orders issued to the Contractor by the Government and for the proper maintenance of the property and Plant. It is true, as stated in the above-quoted letter of April 24, 1944, that the "contract gives the contractor complete supervision and operation of the plant." However, the contract specifically provides that the plant shall be operated for the "exclusive benefit of the Government." Moreover, the plant was leased to the contractor for the sole purpose of performing the work covered by the contract and, unless the installation of the telephones was incident to that work, the contractor exceeded its authority in having them installed; and if the installation was incident to the work any benefit derived therefrom must accrue to the Government. Hence, commissions accruing from the pay telephones represent income incident to the use of the Government building in question, even though the Westinghouse Electric and Manufacturing Company presently has supervision and operation of the property under the terms of the contract. Article XI (b) of the contract-referred to in the letter, supra— providing for the application of cash and trade discounts, rebates, allowances, credits, salvage, commissions, and bonifications in reduction of the gross cost of the contract-has no application to the receipts derived from the installation and use of the pay telephones. That is |