will best bespeak the apparent intent of the Congress in connection with a consideration of the basic purpose and policy of this Title of the act as a whole. Viewed in this light, we are persuaded to what we believe to be the logical assumption that such prohibition was designed primarily for the purpose of preventing a borrower from indulging in the practice of indiscreetly increasing his loan by a continuous issuance of mortgages to a level which ultimately would lead to default, thereby culminating in an unwarranted loss to the Government through its insurance liability to the lender. Also, we do not believe it was intended by the Congress that the Government should insure a mortgage on an existing vessel other than as contemplated by the exceptions in section 1106 and by section 1107 (46 U.S.C. 1276 and 1277), since the obvious purpose of Title XI was to encourage private financing in the construction, reconstruction or reconditioning of vessels. In other words, upon reading section 1106 together with the exceptions thereto, it becomes apparent that this provision was incorporated purely for the purpose of protecting the interests of the Government. Conversely, in our opinion, it would appear unrealistic to presume that the Congress intended to preclude the Government from pursuing a course of action to protect its interests, such as is proposed in the instant case. Otherwise, that portion of section 207 of the act which vests in the Commission broad authority to take such steps as necessary to protect, preserve or improve collateral to secure indebtedness would be meaningless.

In view thereof, we must conclude that (1) since no new mortgage is being issued for the purpose of increasing the loan, the proposal submitted would not come within the prohibition as contemplated by section 1106 of the act, 46 U.S.C. 1117, and (2) since it is reportedly anticipated that the operator will surrender the vessel in the event this cannot be accomplished, it would appear plausible for your Administration to exercise the above-mentioned authority vested by section 207 in taking appropriate steps to protect the collateral to the present indebtedness which ultimately may be assigned to the Gov

ernment.

[A-3051]

Travel Expenses-Customs Employees' Overtime Inspection DutyParty-in-Interest Liability

The long-established holding that travel expenses of customs employees incident to the unlading of vessels or vehicles at night, on a Sunday or a holiday are not chargeable to the master, owner or agent of the vessel or vehicle under section 5 of the act of February 13, 1911, as amended, 19 U.S.C. 267, which directs the charging of extra compensation to the party-in-interest but does not mention travel expenses, is reaffirmed.

Appropriations-Augmentation-Official Travel Reimbursed by

Private Parties

Travel of customs employees incident to the unlading of vessels or vehicles at night, on a Sunday or on a holiday is travel on official business for which customs

appropriations are available and requiring the party-in-interest to provide the transportation before the overtime request is granted would in effect be augmentation of the appropriation; therefore, a plan to require the owner or agent of the vessel or vehicle to furnish the transportation is not authorized. To the Secretary of the Treasury, July 31, 1963:

By letter of May 9, 1963, the Assistant Secretary requests that we reconsider 3 Comp. Gen. 960 in which it was held that there was no authority for charging a party-in-interest for the expenses of travel of customs employees which are incurred on assignments performed in unlading a vessel or vehicle at night, on Sunday, or on a holiday. In the event we again determine that no authority exists in the customs laws to charge a party-in-interest for traveling expenses, a decision is requested whether there would be any objection to a proposed procedure of requiring the party-in-interest to provide the necessary transportation before the collector grants the request which will require an employee to travel an unreasonable distance.

Section 451 of the Tariff Act of 1930, as amended, 19 U.S.C. 1451, provides that before a special license may be granted to authorize the unlading of any vessel on Sunday, a holiday, or at night, the master, owner or agent of the vessel or vehicle shall be required to deposit a sufficient amount of money to pay or give bond to cover the "compensation and expenses" of the customs officers and employees assigned to duty in connection with such unlading at night or on Sunday or a holiday, in accordance with the provisions of section 5 of the act entitled "An Act to provide for the lading or unlading of vessels at night, the preliminary entry of vessels, and for other purposes," approved February 13, 1911, as amended, 19 U.S.C. 267.

In 3 Comp. Gen. 960, we held that since section 5 of the act of February 13, 1911, as amended, directs the Secretary of the Treasury to fix a reasonable rate of extra compensation on a specified basis, without any mention of traveling expenses, there was no authority for charging the master, owner or agent of the vessel or vehicle with such expenses. Since the issuance of 3 Comp. Gen. 960, there have been several amendments to section 451 of the Tariff Act; however, none would warrant a modification of the conclusion reached in that decision.

Since the employees are ordered to carry out the assignments at places other than a port of entry, we would view such duty as official business for which travel expenses would be payable from the customs appropriation, it being immaterial that the travel is a direct result of the request for services by the party-in-interest. Requiring the party-in-interest to provide the necessary transportation before the collector grants an overtime request would in effect augment the appropriation made for that purpose. 15 Comp. Gen. 390, 392; 16 id. 195. Therefore, a party-in-interest may not be required to furnish transportation before an overtime request is granted..

[B-151785]

Compensation-Rates-Highest Previous Rate-Adjustments— Under 1962 Salary Act

Employees with prior service who were appointed before October 14, 1962, the effective date of the Federal Salary Reform Act of 1962, but who, because their service records had not been received, had two salary adjustments made at the same time, the first, adjusting their salaries under the highest previous rate rule retroactively to the date of appointment on the basis of the grade, step and salary rate in effect immediately prior to the 1962 act, and the second on the basis of the higher steps under the 1962 act, have in effect had the highest previous rate rule in the second adjustment applied to an action which was not a transfer or reassignment as defined in section 25.102 of the Federal Employees Pay Regulations and, therefore, the overpayment resulting from the second adjustment is for recovery.

Compensation-Rates-Highest Previous Rate-AdjustmentsUnder 1962 Salary Act

An employee who was appointed to a position in grade GS-6 step (a) prior to October 14, 1962, the effective date of the Federal Salary Reform Act of 1962, and when her previous service was verified on October 23 had her salary adjusted to step (g) retroactively to the date of appointment on the basis of the rate in effect immediately prior to the 1962 act and at the same time advanced to step 10, the highest rate in grade 6 under the 1962 act, from October 14, 1962, has had the highest previous rate rule in the case of the second advancement improperly applied when there was no transfer, reassignment, etc., as defined in section 25.102 of the Federal Employees Pay Regulations and the employee is liable for the overpayment of compensation.

Compensation-Rates-Highest Previous Rate-Adjustments— Under 1962 Salary Act

An employee who was appointed to a GS-3 position step (a) prior to October 14, 1962, the effective date of the Federal Salary Reform Act of 1962, and when her previous service in grade GS-7 was verified on October 23, 1962, had the salary rate increased to step (g) retroactively to the date of her appointment and at the same time advanced to step 10 from October 14, 1962, on the basis of the highest scheduled salary rate for grade GS-3 under the 1962 act has had the highest previous rate rule in the case of the second advancement improperly applied, and, therefore, the employee should have her salary adjusted to step 8 under section 602(b) (1) which authorized the granting of a one step advance for employees serving in grades below 4 immediately prior to the effective date of the 1962 act, and the overpayment received by the employee is required to be recovered...

Compensation-Rates-Highest Previous Rate-Adjustments— Under 1962 Salary Act

An employee who had her salary rate reduced to $4,880, the rate for GS-4(y), when her saved salary rate of $5,335 (GS-5 (g)) terminated in July 1962, and who under the Federal Salary Reform Act of 1962 had her salary adjusted to step 10 of GS-4, prior to completing the required 156 weeks in the next lower step and shortly before she was transferred and promoted to GS-7(2), has received an overpayment of compensation under the 1962 act which does not contain anything to support an adjustment without completion of the required service; therefore, the employee who should have had her salary adjusted to step 9 at $5,230 and upon promotion should have been given the equivalent of two step-increases or GS-7(1) $5,540 is liable for refund of the overpayment.

To the Secretary of Commerce, August 1, 1963:*

In a recent site audit of pay of civilian employees and examination of related records in the Office of the Secretary, Department of Commerce, our Civil Accounting and Auditing Division questioned the administrative adjustments of the rates of compensation of Nancy Anthony, Dorothy M. Jones, and Laura M. Zirkle, made concurrently with the increases provided by the Federal Salary Reform Act of 1962, Public Law 87-793, approved October 11, 1962, 76 Stat. 841, 5. U.S.C. 1171 note.

Effective September 24, 1962, Miss Anthony was appointed to the position of Secretary (Stenography), in the Area Redevelopment Administration at grade GS-6(a), $4,830 per annum, subject to adjustment upon verification of her prior Government service. Subsequently, it was ascertained that she had attained the rate of $7,186.29 per annum, while employed in the House of Representatives, and on October 23, 1962, a personnel action was processed which increased her entrance rate to GS-6(g), $5,820 per annum, retroactively to the date of the appointment. On the same day a second personnel action was processed which advanced her to GS-6(10), $6,565 per annum, effective October 14, 1962, the effective date of Public Law 87-793, above.

Effective September 19, 1962, Mrs. Jones was given a temporary position (made permanent December 9, 1962) of Clerk-Typist, grade GS-3(a), in the Area Redevelopment Administration at $3,760 per annum, subject to adjustment upon verification of her prior Government service. Upon ascertaining that Mrs. Jones previously held a position in grade GS-7 in another agency, a personnel action was processed on October 23, 1962, which increased her entrance rate to GS-3(g), $4,390, retroactively to the date of her appointment and, as in the case of Miss Anthony, a second personnel action was processed on the same day which advanced her to step 10, $4,830 per annum, effective October 14, 1962.

On October 14, 1962, Mrs. Laura Zirkle, an employee of the Bureau of the Census in grade GS-4(9), $4,880 per annum, was advanced to GS-4(10) at $5,370 and on January 19, 1963, was reassigned with promotion to the Business and Defense Services Administration at GS-7(2), $5,725 per annum.

The provisions for adjustments in the salary rates of Miss Anthony and Mrs. Jones were made in order to give them the benefits of the highest previous rate rule set forth in section 25.103 (b) of the Federal Employees Pay Regulations (Z1-315) in pertinent part as follows:

(b) Position or appointment changes. Subject to the mandatory requirements of paragraph (g) of this section and section 25.104, an employee who is reemployed, transferred, reassigned, promoted, repromoted or demoted, may be paid at any scheduled rate for his grade which does not exceed his highest previous rate.

On the date the appointments were made the highest scheduled rate for grade GS-6 was step (g) at $5,820 per annum, and for grade GS-3, step (g) at $4,390 per annum. These rates remained in effect until October 14, 1962, the effective date of Public Law 87-793, above. Consequently, the personnel actions by which the employees were granted those rates retroactively to the date of their appointments were in accord with the quoted portion of the regulations and the notations recorded on the papers (Form 50-Notification of Personnel Action) which evidenced their appointments.

The Federal Salary Reform Act of 1962, identifies the within-grade salary steps numerically rather than alphabetically. Steps "a" through "g" became steps "1" through "7." In addition it converted the last three steps (theretofore known as longevity steps x, y, and z) to scheduled salary steps. Thus, with the effective date of that act, step 10 at $6,565 became the highest scheduled salary rate in grade GS-6 while step 10 at $4,830 became the highest scheduled rate in grade GS-3.

In response to the questions raised during the audit the certifying officer contended that since the employees' service folders were not received before the effective date of the Federal Salary Reform Act of 1962, the adjustments which placed the employees in step 10 of their grades were correct.

Under the statute and applicable regulations the highest salary rates permissible at the time of such appointments were those provided for steps 7 of the grades, and upon the retroactively effective adjustments such rates became their correct and legal rates of compensation from the dates of their appointments until the new pay act became effective.

Section 602(b) (3) of the Federal Salary Reform Act of 1962, 5 U.S.C. 1113 note, above, provides:

(3) If the officer or employee is receiving basic compensation immediately prior to the first day of the first pay period which begins on or after the date of enactment of this Act at the first, second, third, fourth, fifth, sixth, or seventh scheduled rate, or at the first, second, or third longevity rate, of grade 4, 5, 6, 7, 8, 9, or 10 of the General Schedule of the Classification Act of 1949, as amended, he shall receive a rate of basic compensation at the corresponding first, second, third, fourth, fifth, sixth, seventh, eighth, ninth, or tenth rate of the appropriate grade in effect on and after such day.

Since Miss Anthony's correct grade, step, and salary rate were GS-6, step g, $5,820, immediately prior to the effective date of the act, her grade, step, and salary rate became GS-6, step 7, $6,055 per annum, with the effective date thereof.

While section 602 (b) (1) of the act, 5 U.S.C. 1113 note, also bases the increase granted therein upon the salary rate the employee was receiving immediately prior to the effective date of the act, it provides for a one-step advance for employees serving in grades below 4.