BNUMBER:  B-255792.2
DATE:  November 9, 1995
TITLE:  Admiral Jonathan T. Howe, USN
(Retired)-Reconsideration

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Matter of:Admiral Jonathan T. Howe, USN (Retired)-Reconsideration

File:     B-255792.2

Date:     November 9, 1995

DIGEST

Prior decision which held that change in retirement date of officer by 
Naval Board for the Correction of Military Records permitted officer's 
accrued leave to be liquidated at 0-10 rather than 0-8 rate is 
modified because officer was retained on active duty for one month 
following corrected retirement date and regulation implementing 37 
U.S.C.  501(b)(1) states that leave is to be liquidated at rate of 
basic pay at time of discharge.

DECISION

The Defense Finance and Accounting Service has requested 
reconsideration of our decision in the matter of Admiral Jonathan T. 
Howe, USN (Retired), 73 Comp. Gen. ____ (1994) (B-255792, May 9, 
1994), in which we found that Admiral Howe was entitled to have his 
accrued leave liquidated at the grade of Admiral (0-10) rather than 
the grade of Rear Admiral (0-8).  For the reasons which follow, we 
modify our prior holding.

Admiral Howe was serving in a position under 10 U.S.C.  601 for which 
he was entitled to the grade of 0-10, Admiral.  However, Admiral Howe 
was to revert to his permanent grade of 0-8, Rear Admiral, prior to 
his projected retirement sometime before June 4, 1992.  As a result, 
legislation was enacted to continue him in the grade of Admiral 
through June 4, 1992.  See Pub. L. No. 102-297, June 2, 1992, 106 
Stat. 216.  Admiral  Howe, however, was not transferred to the retired 
list until July 1, 1992, by which time the extension of his 0-10 grade 
had expired, so that the 60 days of excess leave he had accumulated 
were liquidated at the 0-8 rate to which he had reverted.

Section 1370 of title 10, United States Code, provides that an officer 
may be retired in the grade in which he was serving under 10 U.S.C.  
601, in the discretion of the President with the advice and consent of 
the Senate.  Although the President had nominated Admiral Howe in late 
1991 for retirement at grade 0-10, due to a delay in forwarding the 
request for confirmation, and delay in the Senate, his retirement at 
that grade was not confirmed by the Senate until July 2, 1992.

On June 9, 1993, the Board for the Correction of Naval Records 
corrected Admiral Howe's military records to show that he was 
transferred to the retired list on June 1, 1992, and was retained on 
active duty until June 30, 1992.  The Board found that there was never 
an intent to delay the confirmation of his retirement in grade 0-10 
pursuant to the President's nomination.  DFAS requested our decision 
because 37 U.S.C.  501(b)(1) provides that a member who has accrued 
leave to his credit at the time of his discharge is entitled to be 
paid for such leave based on the rate of basic pay to which he was 
entitled on the date of his discharge and Admiral Howe actually 
retired on July 1, 1992, at which time he was an 0-8.

We found that the Correction Board's action required that Admiral 
Howe's leave be liquidated at the 0-10 rate since, under 10 U.S.C  
1552(a)(4), such records corrections are "final and conclusive on all 
officers of the United States," except when procured by fraud.  The 
statutory requirements that he be retired in the grade of Admiral in 
the discretion of the President with the advice and consent of the 
Senate had been met and the record correction merely reflected an 
earlier retirement date to rectify the problem caused by the delay in 
the Senatorial retirement process.

DFAS has requested reconsideration of our decision.  DFAS states that 
the administrative regulations in this area, which were not cited in 
its submission to our Office, preclude the payment of the accrued 
leave at the higher rate, notwithstanding the action of the Correction 
Board, because Admiral Howe was continued on active duty through June 
30, 1992.  Specifically, paragraph 40401a of the Department of Defense 
Financial Management Regulation DoD 7000.14-R, Volume 7A, states that 
a member is entitled to payment of unused accrued leave "unless the 
member continues on active duty under conditions which require accrued 
leave to be carried forward."  Rule 1 of table 4-4-2 of the regulation 
states that if an officer is retired and then immediately reenters on 
active duty, accrued leave is not payable.  Thus, DFAS states, since 
the Correction Board only changed the date of retirement of Admiral 
Howe from July 1, 1992, to June 1, 1992, but showed him being retained 
on active duty until June 30, 1992, he would have still reverted to 
the 0-8 grade when he was finally discharged on June 30, 1992.

In view of the DOD regulation, we agree with DFAS that Admiral Howe 
reverted to the 0-8 rate at the time of his final discharge from duty, 
when his accrued leave was liquidated.  As DFAS notes in its letter, a 
change in a member's record only gives the member what entitlement the 
member is due under pertinent statutes and regulations.

Accordingly, we modify our prior decision in accordance with the 
above.  While Admiral Howe has been paid his accrued leave at the 0-10 
rate, we agree with DFAS that the Admiral qualifies for waiver of the 
overpayment under 10 U.S.C.  2774, since the payment was based on a 
decision of our Office, and therefore Admiral Howe is without fault in 
the matter.

Robert P. Murphy
General Counsel