or determining either "Gross Project Cost" or "Net Project Cost," any amount as so-called "interest" on the amount so advanced by the local public body.

You point out that the funds made available by the local public body for its project expenditures may not be identifiable either as proceeds of borrowings by it directly for the project, or as borrowings which bear carrying charges; and that the source thereof may be its general municipal revenues or general municipal bond issues. It is pointed out further that, while the so-called interest would not represent an actual expenditure by the local public body in payment of a cost allowable as a gross project cost of its project, it would represent the carrying charges which would have been borne by the project if the local public body had borrowed the money to pay project costs rather than advance the money from its own funds.

This method of financing, you say, denies to the local public body the use of its funds for other purposes, and consequently it is denied the interest earnings that it could derive if the funds were used for such other purposes. Thus, you suggest that the inclusion of so-called interest on such funds as a gross project cost would, to some extent, compensate the local public body for the interest which would actually have been earned if the funds had been used for purposes other than the project undertaking.

The doubt in the matter is said to arise from a difference of opinion in your Agency as to the interpretation of item 1 of the term "gross project cost" contained in section 110 (e) of the Housing Act of 1949, 63 Stat. 421, as amended, 42 U. S. C., Supp. IV, 1460 (e). Said section 110 (e) defines the term in pertinent part:

"Gross project cost" shall comprise (1) the amount of the expendtures by the local public agency with respect to any and all undertakings necessary to carry out the project (including the payment of carrying charges, but not beyond the point where the project is completed)

and section 110 (f), 42 U. S. C. 1460 (f), defines the term "net project cost" as follows:

"Net project cost" shall mean the difference between the gross project cost and the aggregate of (1) the total sales price of all land or other property sold, and (2) the total capital values (i) imputed on a basis approved by the Administrator, to all land or other property leased, and (ii) used as a basis for determining the amounts to be transferred to the project from other funds of the local public agency to compensate for any land retained by it for use in accordance with the redevelopment plan.

Under Title I of the Housing Act of 1949, as amended, the Housing and Home Finance Agency is authorized to provide Federal aid, in the form of loans and capital grants, to local public agencies authorized by State and local law to carry out slum clearance and urban renewal activities. The Federal capital grants may not exceed twothirds of the aggregate of the net cost (deficit) of projects; the remaining one-third thereof is required to be supplied by the local public agencies as local grants-in-aid by way of cash or noncash.

This matching grant formula is to be applied and given effect through use of the definitions of the terms quoted above.

The quoted section 110 (e) (1), 42 U. S. C. 1460 (e) (1)—by its plain terms-makes expenditures by the local public agency that are necessary to the accomplishment of the project an eligible gross project cost for purposes of determining the extent or limit of Federal assistance in the furtherance of urban renewal activities. The parenthetical statement "including the payment of carrying charges, but not beyond the point where the project is completed" emphasizes the congressional intent that such project expenditures properly may include the payment of interest on account of borrowings that are necessary to carry out the project.

The words "expenditure" and "payment" in their ordinary sense connote the discharge in money of a sum due in the course of business and imply the existence of a debt. See 23 Comp. Gen. 953. As used in said section 110 (e) (1) these words clearly contemplate that only the actual expenditures by the local public agency that are directly connected with and necessary to the carrying out of an approved project properly may be considered a cost allowable within the scope of the term "gross project cost."

There is nothing in Title I of the Housing Act of 1949, as amended, specificially requiring that, in determining approvable gross project costs under the urban renewal program participated in by the Federal Government, there is to be included so-called or imputed interest costs on capital advanced by a local public agency from tax receipts and other nonborrowing sources even though interest is not actually paid; nor is such a construction required by necessary implication. To introduce this element as an allowable gross project cost would lead to confusion and uncertainties in determining the amount of the Government's capital grants authorized under the law, and serve to increase the amount of such grants.

Under the provisions of section 106 of the Housing Act of 1949, as amended, 42 U. S. C. Supp. IV, 1456 (3), your determinations relative to financial transactions including capital grants under the program are made final and conclusive upon all officers of the Government; and your letter recognizes that the section also limits our responsibility thereunder to that of making an annual audit of your accounts in accordance with the principles and procedures applicable to commercial transactions as provided by the Government Corporation Control Act, as amended, 31 U. S. C. 846, 851, which requires that a report of the audit findings will be presented to the Congress. Consequently, while in our opinion we do not regard the statute as authorizing the inclusion of the so-called interest charge, we are not authorized to render a binding decision to you in this matter.

However, if you determine that the inclusion of so-called interest as a gross project cost under the facts outlined above is necessary in order to obviate financial inequities on the part of certain local public agencies, it is our view that the matter properly should be resolved by obtaining legislative authority therefor and that, without such authority, we would consider making appropriate comment thereon in an audit report to the Congress.

[B-134679]

Military Personnel-Subsistence-Per Diem-Intervening Temporary Duty-Temporary Duty Near Permanent Station Navy member who, pursuant to permanent change of station orders directing duty at Miramar, California, performed temporary duty at North Island, California, prior to joining the fighter squadron at Miramar is to be regarded as having continued in a travel status until arrival at the new permanent duty station and is entitled to per diem for the period of temporary duty, irrespective of considerations of proximity of the stations and living arrangements. Under paragraph 1150-10a of the Joint Travel Regulations which defines permanent duty station, North Island, California, and Miramar, California, may be regarded as distinct localities for determination of travel status.

To G. T. Moore, Department of the Navy, April 14, 1958:

In your letter of August 19, 1957, forwarded here by the Acting. Judge Advocate General, Department of the Navy, with letter dated December 16, 1957, you request decision whether payment properly may be made on an accompanying voucher in favor of Ensign William G. Bray, USNR, for per diem incident to temporary duty performed at the Naval Air Station, North Island, San Diego, California, during the period from June 29 to July 28, 1957.

By orders of May 2, 1957, issued at the Naval Air Station, Corpus Christi, Texas, Ensign Bray was detached from duty at Beeville, Texas, and directed to proceed to the Naval Air Station, San Diego, California, for temporary duty involving operational and training flights awaiting arrival of Fighter Squadron 144 (VF 144) and for duty with that squadron upon its arrival when directed by the Commander, Air Force, U. S. Pacific Fleet. While not indicated in those orders, you state that Fighter Squadron 144 was home ported at the Naval Air Station, Miramar, California, and returned there. The officer reported at the Naval Air Station, San Diego (apparently located at North Island), on June 28, 1957, and performed temporary duty there-except for a period while performing temporary duty at El Toro, California-until he was advised by endorsement of July 29 that temporary duty was completed and that he was to carry out the remainder of the basic orders. He reported to Fighter Squadron 144 at Miramar on July 29, 1957.

You state that the officer resided in the Bachelor Officers' Quarters at North Island during the period in question and that upon the return of Fighter Squadron 144 to Miramar he moved to the Bachelor Officers' Quarters at Miramar. Your question in the matter is whether he may be considered as away from his duty station for per diem purposes prior to reporting for duty at Miramar, since he was not residing within the limits of that station.

Entitlement to per diem under the provisions of section 303 (a) of the Career Compensation Act of 1949, 63 Stat. 813, 37 U. S. C. 253 (a), is dependent upon members being in a travel status "away from their designated posts of duty." Paragraph 3050-1 of the Joint Travel Regulations provides that members are entitled to travel and transportation allowances only while actually in a travel status and that members shall be deemed to be in a travel status while performing travel away from the permanent duty station on public business pursuant to competent orders. Under paragraph 3050-3 of the regulations, a travel status for such purposes, commencing upon departure from the old station under change of station orders, continues until the arrival of the member at the new duty station. Consequently, the conclusion appears to be required that the member is entitled to otherwise authorized per diem for any directed period of temporary duty during the travel period performed on change of station orders prior to his actual arrival at his new duty station irrespective of considerations of proximity to the duty station, living arrangements, etc.

Paragraph 1150-10a of the Joint Travel Regulations defines a permanent duty station to be the post of duty or official station to which a member is assigned or attached, the limits of which will be the corporate limits of the city or town in which the member is stationed or, if not stationed in an incorporated city or town, the reservation, station, or established area, or subdivision thereof. It has been recognized, in view of those provisions, that North Island and Miramar are distinct localities for purposes of determining travel status questions. B-128830, September 5, 1956. While the language of the orders of May 2, 1957, implied that the assignment with Fighter Squadron 144 would be at the Naval Air Station at San Diego, it will be assumed, in view of your representations, that the orders were intended to and did direct a duty assignment at Miramar with intervening temporary duty at North Island and that it was so understood by Ensign Bray. Under such circumstances, it may be considered that his travel status under the orders of May 2, 1957, did not end until he reported at Miramar on July 29, 1957, and consequently that he remained in a travel status while at North Island in the performance of the temporary duty assigned there. Accordingly, payment of the voucher, returned herewith, is authorized.

[B-135115]

Civilian Personnel-Employees of Nonappropriated Fund Activities-Transfer to Civil Service Positions

Since employees of the Army and Air Force Motion Picture Service-a nonappropriated fund activity—are not subject to the Civil Service Act, the Civil Service Retirement Act, the Classification Act of 1949, or the Annual and Sick Leave Act of 1951, they are not entitled upon subsequent employment in a department or agency in the Executive branch to such Federal employee rights and privileges as the highest previous salary rate rule, service credit for annual leave accrual purposes, and transfer of sick leave.

To the Chairman, United States Civil Service Commission, April 14, 1958:

On February 3, 1958, you requested our decision whether the salary rate earned by an employee in the Army and Air Force Motion Picture Service may be used as a "highest previous rate" upon his subsequent employment in a department or agency subject to the Classification Act of 1949, 5 U. S. C. 1071 note, and the effect of such service upon the accrual and crediting of leave upon his employment in the department or agency.

The act of June 19, 1952, 66 Stat. 138, 5 U. S. C. 150k, 150k-1, provides as follows:

Civilian employees, compensated from nonappropriated funds, of the Army and Air Force Exchange Service, Army and Air Force Motion Picture Service, Navy Ship's Stores Ashore, Navy exchanges, Marine Corps exchanges, Coast Guard exchanges, and other instrumentalities of the United States under the jurisdiction of the Armed Forces conducted for the comfort, pleasure, contentment, and mental and physical improvement of personnel of the Armed Forces, shall not be held and considered as employees of the United States for the purpose of any laws administered by the Civil Service Commission or the provisions of the Federal Employees' Compensation Act, as amended: Provided, That the status of these nonappropriated fund activities as Federal instrumentalities shall not be effected. *

The nonappropriated fund instrumentalities described in section 150k of this title shall provide their civilian employees, by insurance or otherwise, with compensation for death or disability incurred in the course of employment. In the case of employees employed in the continental United States (except Alaska), compensation shall be not less than that provided by the laws of the State (or the District of Columbia) in which the employing activity of any such instrumentality is located. In the case of employees employed outside the continental limits of the United States and in Alaska, compensation shall be not less than that provided in sections 907-909 of Title 33, except that in the case of such employees who are not citizens of the United States, compensation shall be in accordance with regulations to be prescribed by the Secretary of the Army, Navy, Air Force, or Treasury, as the case may be. This section shall take effect sixty days after June 19, 1952.

The House of Representatives Report No. 1995 (82d Congress, 2d session) states on page 2 that:

This legislation was introduced at the request of the Department of Defense. It is the purpose of this legislation to clarify, with respect to laws governing the employment, removal, classification, pay, retirement, leave, and disability and death compensations of Federal officers and employees, the position of certain personnel who are not compensated from funds appropriated by Congress, but who are employed by the Department of Defense in the Army and Air Force