BNUMBER:  B-258026
DATE:  November 29, 1995
TITLE:  Kathryn M. MacVey-Extension of Period for Residence
Transaction

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Matter of:Kathryn M. MacVey-Extension of Period for Residence 
          Transaction

File:     B-258026

Date:     November 29, 1995

DIGEST

An agency, acting within its discretion, denied an employee's request 
for a 1-year extension of the 2-year period in which an employee must  
complete a real estate transaction for purposes of relocation expense 
reimbursement.  The determination to grant an extension is for the 
agency, and the General Accounting Office will not object to such 
determination unless it is found to be arbitrary or capricious.  In 
addition, it appears that the employee's delay in exercising her 
entitlement carried beyond a subsequent transfer effected at her 
request for which relocation benefits are prohibited by 5 U.S.C.  
5724(h), and she has therefore forfeited the unused benefit which 
accrued from the previous transfer.

DECISION

This is in response to a request for an advance decision from the 
Farmer's Home Administration concerning an employee's request for 
reimbursement for real estate purchase expenses incident to a 
relocation.[1]  The issue in the matter is whether the agency properly 
exercised its discretion in denying Ms. Kathryn M. MacVey's request 
for a 1-year extension of the 2-year period in which an employee must 
complete her real estate transaction for purposes of relocation 
expense reimbursement.  We find no fault in the agency's denial in 
this case.

BACKGROUND

Ms. MacVey was transferred from Minnesota to Mercer, Pennsylvania, in 
late May 1991, in the interest of the government, and not primarily 
for her convenience or benefit or at her request.  Accordingly, she 
was authorized reimbursement of travel expenses for herself and 
transportation of her household goods to move to the new station.  At 
that time she indicated that she would not incur expenses incidental 
to the purchase of real estate since she was single and was moving 
directly into an apartment at her new duty station.  She married in 
June 1992 and moved with her husband to Chardon, Ohio, from which she 
commuted to Mercer.  In September 1992 she transferred from the Mercer 
county office to the Meadville county office in Meadville, 
Pennsylvania, somewhat closer to her apartment in Chardon.  This is 
stated to have been a voluntary transfer at Ms. MacVey's request, for 
which she waived relocation expenses and for which none were 
authorized.

On May 2, 1993, Ms. MacVey and her husband signed a sales agreement to 
purchase a house in Chardon, but the septic system of the house did 
not pass inspection, so the settlement on the house was delayed beyond 
the anticipated May 25, 1993, settlement date, which would have been 
almost exactly 2 years from the effective date of her transfer from 
Minnesota to Mercer, Pennsylvania.  Ms. MacVey apparently submitted a 
memorandum on May 10, 1993, requesting an extension under the Federal 
Travel Regulation, 41 C.F.R.  302-6.1e(2)(iii), of the 2-year period 
to complete a residence transaction.  The agency denied the request 
for extension on May 17, 1993, and Ms. MacVey did not go to settlement 
on the house until June 28, 1993, beyond the 2-year period to qualify 
for reimbursement for purchase expenses under the FTR.

The agency advised Ms. MacVey that she would not be reimbursed real 
estate expenses for purchase of the house because such expenses may 
not be reimbursed if they do not occur within the 2-year period and 
the period is not extended.  The agency also advised Ms. MacVey, that 
in view of her voluntary transfer from Mercer to Meadville in 1992, 
she had relinquished any remaining entitlement to relocation expenses 
incident to the 1991 transfer to Mercer, per our decision 27 Comp. 
Gen. 748 (1948).  In addition, the agency advised Ms. MacVey that the 
matter had been reviewed by both the agency's state office and its 
national travel unit in reaching these conclusions.

At Ms. MacVey's request, the agency certifying officer sent the matter  
here for our decision.

ANALYSIS AND CONCLUSION

Pursuant to 5 U.S.C.  5724 and 5724a, an employee transferred in the 
interest of the government is entitled to certain travel, 
transportation and relocation expense reimbursements, as set out in 
implementing regulations found in the FTR.  Included is reimbursement 
for certain expenses an employee is required to pay in connection with 
the purchase of a dwelling "at his/her new official station."  FTR  
302-6.1.  To qualify for reimbursement, the regulations require that 
the settlement date for the purchase may not be "later than 2 years 
after the date that the employee reported for duty at the new official 
station."  FTR  302-6.1(e)(1).  However, an agency may grant an 
extension of the period for not to exceed an additional year if the 
agency determines:

     ". . . that extenuating circumstances, acceptable to the agency 
     concerned, have prevented the employee from completing the . . .  
     purchase . . . in the initial time frame and that the residence 
     transactions are reasonably related to the transfer of official 
     station."   FTR  302-6.1e(2)(iii).

We have consistently held that we will not disturb a determination by 
an agency whether to grant an extension in accordance with this 
provision unless the determination is arbitrary or capricious.  Robert 
H. Meyer, 68 Comp. Gen. 419 (1989).  Thus, although the certifying 
officer refers to the defective septic system which caused the 
settlement to be delayed as a possible "extenuating circumstance" 
allowing an extension, the ultimate question we are concerned with is 
whether the agency's denial of an extension was arbitrary or 
capricious.

The agency's May denial letter stated that Ms. MacVey had not shown 
that extenuating circumstances had prevented her from completing the 
purchase of her home within 2 years.  The agency noted that Ms. MacVey 
did not request expenses incidental to the purchase of real estate in 
her transfer to Mercer and she indicated that the transfer from Mercer 
to Meadville was for personal reasons, specifically waiving any 
relocation expenses for that transfer.  In a subsequent letter to the 
agency, Ms. MacVey concedes that at the time of her transfer to Mercer 
she "was single and did not foresee that within a short time I would 
become engaged, married and purchase a home; therefore, I did not 
request expenses incidental to the purchase of real estate."  Besides 
the change in marital status, Ms. MacVey states that after her 
transfer to Mercer in May 1991, a proposed reorganization in the 
Mercer county office made her cautious about  buying a house and that 
she did not seriously begin househunting until after her reassignment 
to the Meadville county office provided her with sufficient 
geographical and occupational security.  She also states that because 
of the nature of her husband's employment, it was important that the 
house be located in Chardon.  Thus, it was not until after she was 
married and transferred to Meadville, nearly 2 years after her 
transfer from Minnesota, that she and her husband signed a contract to 
purchase a house (with a contemplated settlement date less than a 
month later and at the very expiration point of the 2-year period).

In these circumstances we believe the agency was justified in its 
determination that extenuating circumstances have not been shown to 
have prevented the employee from purchasing a residence within the 
initial timeframe and that the purchase was not reasonably related to 
the transfer from Minnesota to Mercer.  See Ronald F. Houska, 
B-191087, Feb. 28, 1979, a somewhat similar situation in which we 
upheld an agency's extension denial.  Accordingly, regardless of 
whether the defective septic system delayed the house purchase, we do 
not believe the agency's determination to deny an extension is 
arbitrary or capricious.

This then brings us to the second point raised by the agency, which is 
that upon Ms. MacVey's subsequent transfer at her own request from 
Mercer to Meadville, she relinquished any remaining unused relocation 
benefits that accrued incident to her prior transfer from Minnesota to 
Mercer.  As the agency notes, we have held in several cases that 
employees who attempted to exercise moving expense reimbursement 
entitlements accruing from a prior transfer after requesting and 
accepting a subsequent transfer primarily for their own benefit, had 
relinquished their entitlement to such benefits upon taking the 
subsequent transfer.  See 27 Comp. Gen. 784 (1948); B-154389, July 10, 
1964; Lester J. Reschley, 71 Comp. Gen. 111 (1993); and Joseph Smith, 
B-256233, May 12, 1994.  Those decisions are grounded on the 
provisions of 5 U.S.C.  5724(h) (and its predecessor statutes), which 
specifically preclude payment for such expenses where a transfer is 
made primarily for the convenience or benefit of an employee, or at  
his request.[2]

In those decisions it was clear that the relocation entitlements 
sought by the employee were in fact in connection with the second 
voluntary transfer for which the entitlements are specifically 
precluded rather than the initial transfer that was in the interest of 
the government.  The facts in Ms. MacVey's case show that the decision 
to incur real estate purchase expenses was not made in connection with 
the transfer from Minnesota to Mercer but after and in connection with 
the voluntary transfer from Mercer to Meadville for which such 
expenses are not reimbursable.

Ms. MacVey argues that this prohibition should not apply in her case 
since she was not aware of it when she transferred from Mercer to 
Meadville, which she states are only 30 miles apart and either is 
within commuting distance of her new residence in Chardon.[3]  These 
facts, however, would not overcome the statutory proscription. 
Therefore, the agency's view in that regard also appears correct; that 
is, at the time she purchased the residence she no longer qualified 
for real estate expense reimbursement by virtue of her previous 
transfer.

/s/Seymour Efros
for Robert P. Murphy
General Counsel

1. The matter was submitted by an authorized certifying officer 
(reference FSD-1 RJP), National Finance Center, New Orleans, 
Louisiana.

2. While this statutory prohibition applies specifically to the travel 
and transportation entitlements authorized by 5 U.S.C.  5724(a), it 
has the same effect of prohibiting reimbursement of real estate 
purchase expenses authorized by 5 U.S.C.  5724a, since such expenses 
are reimbursable "for an employee for whom the Government pays 
expenses of travel and transportation under section 5724(a)."  5 
U.S.C.  5724a(a).

3. Chardon, Ohio, is about 71 miles from Mercer, Pennsylvania, and 
about 67 miles from Meadville, Pennsylvania.