BNUMBER:  B-279095.2 
DATE:  June 16, 1998
TITLE: [Letter], B-279095.2, June 16, 1998
**********************************************************************

B-279095.2

June 16, 1998

The Honorable Charles H. Taylor
Chairman, Subcommittee on 
     District of Columbia
Committee on Appropriations
House of Representatives

Dear Mr. Chairman:

This responds to your letter dated April 7, 1998, asking whether the 
District of Columbia Financial Responsibility and Management 
Assistance Authority (the Authority) has complied with the limitation 
provided in section 102 of the District of Columbia Financial 
Responsibility and Management Assistance Act of 1995 (the Act), Pub. 
L. No. 104-8, 109 Stat. 97 (1995), in paying the Authority's staff.  
You asked that we consider all Authority staff who received pay for 
any period from the Authority's inception through March 31, 1998.   

We requested information from the Authority concerning its staff 
compensation, held several meetings with Authority staff, and reviewed 
personnel and pay records of a number of Authority employees.  As 
explained in detail in the attachments to this letter, we conclude 
that for some or all of the period in question, the Authority has paid 
four of its staff members at rates exceeding the pay limitation 
established by section 102. 

Section 101(a) of the Act establishes the Authority as an entity 
within the government of the District of Columbia, and not as a 
department, agency, establishment, or instrumentality of the United 
States government.  The Authority consists of five members appointed 
by the President who serve without pay, one of whom the President 
designates to serve as Chair.  Sections 102(b) and (d) of the Act.  
The Act provides that the Authority shall adopt by-laws, rules, and 
procedures governing its activities, including procedures for hiring 
experts and consultants.  Section 102(e).  

The Act provides that the Chair with the consent of the Authority 
shall appoint an Executive Director, who "shall be paid at a rate 
determined by the Authority, except that such rate may not exceed the 
rate of basic pay payable for level IV of the Executive Schedule."  
Section 102(a) (emphasis added).  The Act also provides that, with the 
approval of the Chair, the Executive Director may appoint and fix the 
pay of additional personnel, "except that no individual appointed by 
the Executive Director may be paid at a rate greater than the rate of 
pay for the Executive Director."  Section 102(b)(emphasis added).

Section 102 in subsection (c) provides wide latitude to the Authority 
in appointing and fixing the pay of the Executive Director and staff.  
However, section 102 in subsections (a) and (b) also clearly 
establishes the maximum rate at which the Executive Director and the 
staff may be paid, i.e., the rate of basic pay for level IV of the 
Executive Schedule. 

The Executive Schedule pay rates to which section 102 of the Act 
refers are established pursuant to 5 U.S.C. chapter 53, subchapter II, 
for certain senior federal officers and employees.  Under this 
authority, the annual rates of basic pay payable for level IV during 
the period in question were $115,700 from January 1995 to January 3, 
1998 and $118,400 from January 4, 1998 to the present.

In February 1997, the Authority increased the salaries of the 
Executive Director and the General Counsel to $122,700 and $121,900, 
respectively.  As a result of the increases, the Executive Director 
and the General Counsel received (and continued to receive through the 
period covered by your request) a rate of pay exceeding the rate of 
basic pay for Executive Level IV.  The Authority characterized the 
increases as "locality pay" adjustments.  In addition, in February 
1997, the Authority made lump-sum payments to the Executive Director 
and the General Counsel in the amounts of $12,500 and $12,000, 
respectively.  The Authority characterized these payments as 
retroactive locality pay for the prior 18 months, that is, from the 
inception of their employment with the Authority in July 1995 through 
January 1997.  Also, in March 1998, the Authority employed an Interim 
Deputy Management Officer under a temporary appointment for a period 
of approximately 6 months at a rate that equates on an annual basis to 
$120,000, which exceeds the level IV rate of $118,400.

As we explain in detail in Attachment I, there is no basis for the 
Authority to pay regular salary payments to any of its staff at rates 
exceeding Executive Level IV.  Characterizing the excess payments as 
locality pay does not provide a legal basis for exceeding the level IV 
limitation established by section 102 of the Act.  Also, there was no 
basis for the Authority to provide the Executive Director and General 
Counsel with the retroactive payments.  

In addition to the three employees discussed above, in January 1998, 
the Chair of the Authority appointed an individual to the position of 
Chief Management Officer to assist in carrying out additional duties 
placed on the Authority by the District of Columbia Management Reform 
Act of 1997.  The Authority's agreement with the Chief Management 
Officer provides for an annual salary of $155,000, plus other 
payments.  The Authority asserts that the section 102 pay limitation 
does not apply to the Chief Management Officer because the Executive 
Director did not appoint the Chief Management Officer.  The Authority 
told us that it inferred from the Management Reform Act of 1997, and 
the circumstances surrounding its enactment and implementation, the 
authority to pay the Chief Management Office at a rate greater than 
level IV.  As we explain in detail in Attachment II, we do not find 
these arguments persuasive and conclude that there is no statutory 
basis for the Authority to pay the Chief Management Officer in excess 
of the pay limitation provided in section 102 of the Act.

We trust that this responds to your request.

Sincerely yours,

Robert P. Murphy
General Counsel

Attachments - 2 

                                                   Attachment I
                                                                      
PAY OF THE EXECUTIVE DIRECTOR, THE GENERAL COUNSEL, AND THE INTERIM 
DEPUTY MANAGEMENT OFFICER

The Authority provided us listings of their employees and their annual 
"salary" rates for fiscal years 1995-1998.[1]  The listings show that 
in fiscal year 1995, when Congress established the Authority, the 
Authority set the Executive Director's salary at $115,700, the basic 
rate of pay then applicable to Executive Level IV,[2] with the next 
highest salary being that of the General Counsel, $115,000.  Effective 
in February 1997, the Authority raised the Executive Director's salary 
to $122,700 and the General Counsel's salary to $121,900.  As a 
result, the rates for these two individuals exceeded the Executive 
Level IV rate then in effect of $115,700.  The Authority continued to 
pay the Executive Director and the General Counsel at the rates of 
$122,700 and $121,900, respectively, through March 31, 1998.  These 
rates also exceed the $118,400 Executive Level IV rate that became 
effective in January 1998.[3]  In addition, the Authority made 
lump-sum payments in February 1997 to the Executive Director and the 
General Counsel in the gross amounts of $12,500 and $12,000, 
respectively.  

The Authority asserts that the salary increases were based on granting 
these individuals so-called locality pay.  Similarly, the Authority 
characterized the lump sum payments as retroactive locality pay for 
the prior 18 months, i.e., retroactive to the inception of the two 
individuals' employment with the Authority in July 1995.  

In addition, in March 1998, the Authority employed an Interim Deputy 
Management Officer under a temporary employment agreement for a term 
of approximately 6 months at a salary of $58,500.  The Authority 
indicates that the $58,500 salary equates on an annual basis to a rate 
of $120,000.  Thus, the Interim Deputy Management Officer also is 
being paid at a rate that exceeds the current Executive Level IV rate 
of $118,400.  The Authority has told us that its justification for 
this rate is that it also includes some amount for locality pay.  The 
Authority's pay and personnel records, however, do not refer to 
locality pay for this employee.

In its response to our inquiry, the Authority relied on an August 1996 
opinion of the Authority's General Counsel to the Executive Director 
to justify paying salaries in excess of Executive Level IV.[4]  The 
General Counsel's opinion does not focus on locality pay, but rather 
on the scope of the limitation provided by section 102 of the Act.  
The General Counsel states that section 102 adopts terminology from 
provisions of Title 5 of the U.S. Code applicable to federal civil 
service employees, such as "rate of basic pay, which are terms of art 
and refer to base rates, not total compensation."  He indicates that 
the federal pay statutes authorize the head of a federal agency to pay 
a cash award to an employee based on certain criteria, and that such 
an award is considered to be in addition to the regular pay of the 
recipient (5 U.S.C.  sec.  4502, 4503, 4505).  With respect to locality 
pay, he states only that there are specific provisions applicable to 
the federal civil service for payment of locality-based comparability 
pay under 5 U.S.C.  sec.  5304, and other types of hardship allowances, 
which are not limited by the rate of basic pay, but rather are 
adjustments to it.  While he recognizes that these provisions do not 
apply to the Authority, he indicates that they are indicative of the 
fact that there are several ways to compensate employees over and 
above their rate of basic pay.  Thus, in his view, since Congress used 
concepts drawn from title 5, U.S. Code, it did not intend to exclude 
these alternative methods of compensation for Authority employees.[5]  

Authority staff advised us that in 1995 and 1996, the Authority had 
included locality pay in setting Authority staff salaries, but not 
necessarily in the same percentages
applicable to federal employees.  They also advised us that in later 
years the Authority has not granted locality pay increases to its 
employees due to cuts in the Authority's budget.  They noted that the 
Authority has the discretion under the Act to set employees' pay rates 
without regard to federal civil service laws and rules, and that, 
therefore, the Authority had the discretion to determine whether and 
in what amounts to give employee pay increases.  They also advised us 
that they do not consider the Authority subject to the limitation in 5 
U.S.C.  sec.  5304(g) that generally limits basic pay plus locality pay for 
federal employees to no more than the rate for Executive Level IV.  To 
support this position, they furnished us a January 1998 opinion from 
outside counsel.   

We agree with the Authority's contention that it has broad discretion 
to set the pay rates of its employees.  Section 102(c) of the Act 
provides that the Executive Director and staff of the Authority may be 
appointed without regard to the provisions of title 5, U.S. Code, 
governing appointments in the competitive service, and paid without 
regard to the provisions of Chapter 51 and Subchapter III of Chapter 
53 of title 5 relating to classification and General Schedule pay 
rates, and appointed and paid without regard to the provisions of the 
District of Columbia Code governing appointments and salaries.  We 
believe, however, that the Authority's pay-setting discretion is 
limited by subsections (a) and (b) of section 102 of the Act, 
prescribing the maximum rate payable to Authority staff.  For those 
employees earning less than Executive Schedule Level IV, the 
Authority's characterization of an employee's salary as including 
locality pay has no legal or practical consequences.  We find no basis 
for the Authority to use the concept of locality pay to exceed the 
section 102 limitation.

The plain language of the section 102 limitation does not support the 
General Counsel's view that the limitation applies only to basic pay.  
Section 102 states that the Executive Director "shall be paid at a 
rate determined by the Authority, except that such rate may not exceed 
the rate of basic pay payable for level IV," and no individual 
appointed by the Executive Director "may be paid at a rate greater 
than the rate of pay for the Executive Director."  (Emphasis added.)  
The provision does not limit only the Executive Director's and staff's 
rates of "basic pay," as the General Counsel reads the statute.  
Rather, the limitation is on the Executive Director's "rate of pay."  
Section 102 uses the term "basic pay" only to describe the level IV 
limit it sets.[6]  Since the level IV basic pay rate in effect during 
the period in question here was initially $115,700, raised to $118,400 
effective January 1998, the Authority has paid these three employees 
"at a rate greater than" the rate of basic pay for level IV. 

The General Counsel seeks to justify increasing these employees' pay 
above Executive Level IV by reference to the federal locality pay 
system and treating locality pay as a separate payment independent of 
basic pay.  In so doing, the General Counsel overlooks the close 
connection between basic pay and locality pay. 
The locality pay system applicable to federal employees covered by the 
General Schedule pay system (5 U.S.C. Chapter 53, Subchapter III) and 
certain other federal employees is established by statute as part of 
the pay comparability system.  One of the principles underlying this 
system is that "Federal pay rates [should] be comparable with 
non-Federal pay rates for the same levels of work within the same 
local pay area," and "any existing pay disparities between Federal and 
non-Federal employees should be completely eliminated."  5 U.S.C.  sec.  
5301.  To achieve these goals, 5 U.S.C.  sec.  5303 provides for annual 
nationwide adjustments to statutory pay schedules, and 5 U.S.C.  sec.  
5304 and 5304a (and implementing regulations found in  5 C.F.R. Part 
531, Subpart F) provide for locality based comparability payments.  
The specific purpose of the locality payments is to reduce disparities 
between the government's nation-wide pay rates and nonfederal pay 
identified in specific localities.  The amount of the comparability 
payment determined to be payable within any particular locality during 
a calendar year is computed based on statutory criteria, is stated as 
a single percentage uniformly applicable to covered positions within 
the locality, and is computed by applying that percentage to covered 
employees' scheduled rates of basic pay.  5 U.S.C.  sec.  5304(c)(1).  Such 
a payment is considered to be part of basic pay for purposes of 
retirement, life insurance, premium pay, overtime pay, compensatory 
time off, standby duty pay, severance pay and advances of pay; and 
such pay is to be paid in the same manner and at the same time as 
basic pay.  5 U.S.C.  sec.  5304(c)(2), and 5 C.F.R.  sec.  531.606(b).  Except 
for certain prescribed positions, such locality-based comparability 
payments may not be paid at a rate which, when added to the employee's 
rate of basic pay, "would cause the total to exceed the rate of basic 
pay payable for level IV of the Executive Schedule."  5 U.S.C.  sec.  
5304(g)(1).

Implicit in the General Counsel's opinion is that Congress intended 
the Authority to adopt a pay system under section 102 comparable to 
that provided for high level officials in the executive branch, such 
as members of the Senior Executive Service (SES).  We recognize that 
under the federal pay system, SES and certain other executives whose 
basic pay may not exceed level IV of the Executive schedule receive 
locality pay.  5 U.S.C.  sec.  5304(g).  However, this is specifically 
provided for by statute, and this statute specifically caps these 
individuals' combined basic pay and locality pay at executive schedule 
level III.  5 U.S.C.  sec.  5304(g)(2), (h).  In addition, under 5 U.S.C.  sec.  
5304(h)(1)(iii), positions under the Executive Schedule  (5 U.S.C. 
Chapter 53, Subchapter II) are not covered by this locality pay 
entitlement, although 5 U.S.C.  sec.  5304(h)(2) authorizes the President 
to make exceptions.  Not only is there no basis for the implications 
raised by the General Counsel's opinion in the text or the legislative 
history of the Act, but, as explained below, the concept of locality 
pay does not have meaning in view of the Authority's statutory pay 
scheme and, in fact, the Authority did not include a locality pay 
component in its pay system in any systemic fashion.  

Unlike the federal pay system, all of the Authority's employees are in 
a single locality, Washington, D.C.  Also unlike the federal system, 
the Authority has broad discretion to set employees' pay rates without 
regard to the structured pay schedules applicable to federal agencies.  
Since the Authority may set pay rates at a level it believes to be 
appropriate in its locality--and not at a fixed nationwide 
level--there would never be a reason to adjust pay rates to recognize 
rates in a local area.  Perhaps for this reason the Authority has not 
been consistent in its use of the concept of locality pay.  Our review 
of a number of employees' pay and personnel records indicated that in 
setting some employees' salary rates the Authority characterized some 
amounts as locality pay, but this separate amount was subsequently 
removed from employee pay records and only the total salary was shown.  
For other employees no indication appeared in the pay or personnel 
records that the Authority included locality pay in the pay rate.  
Also, the information we reviewed did not show any regular increases 
based on locality pay comparable to the regular increases that 
occurred under the federal system during the same period, nor does the 
Authority's written "Personnel Policies and Procedures" refer to 
locality pay.  We conclude that the Authority did not institute a 
locality pay system in which receipt of such pay becomes an 
entitlement once the amount payable is determined for a particular 
locality under the statutory guidelines.  Instead, the Authority 
considered locality pay a discretionary item to include or not include 
as it chose in setting an employee's salary.  

In any event, the fact that employees did not receive locality pay in 
some years and some employees did not receive it in any year casts 
doubt on whether the Authority actually had a locality pay system in 
place.  Instead, the Authority used locality pay as a separate 
increment of salary as a basis for increasing the Executive Director's 
and General Counsel's pay, and then later for establishing the salary 
of the Interim Deputy Management Officer, beyond the level IV 
limits.[7]  

The General Counsel's view, and the Authority's implementation of it, 
has the logical effect of emasculating the section 102 limitation.  
The Executive Schedule is not adjusted for locality pay and the basic 
rate of pay of the Executive Levels increases only in accordance with 
specific authority in title 5, United States Code.  Yet, by making 
retroactive payments, the Authority in effect increased the Executive 
Level IV limitation of $115,700 as soon as it became effective on the 
Authority in 1995.  Because, under the Authority's argument, there is 
no constraint on the amount the Authority denominates as locality pay, 
the Authority, in effect, could exceed the section 102 limitation to 
an extent that makes the limitation meaningless.  Nothing in the law 
or its legislative history indicates that Congress intended for the 
Authority to be so unrestrained in paying salaries to its officers and 
employees.  

In conclusion, we believe the Authority violated the section 102 
limitation when it increased the salaries of the Executive Director 
and General Counsel beyond the level IV rate, made the retroactive 
payments in February 1997 to, in effect, increase their pay 
retroactively for their first 18 months on the job[8], and set the 
Interim Deputy Management Officer's salary at a rate that exceeds 
level IV. 
                                                  Attachment II

PAY OF CHIEF MANAGEMENT OFFICER
The Authority advised us that its Chair, with the approval of the 
Authority, appointed an individual to the position of Chief Management 
Officer in January 1998.  The Authority specially created the position 
to assist it in carrying out the additional responsibilities enacted 
by the District of Columbia Management Reform Act of 1997, Pub. L. No. 
105-33, Title XI, Subtitle B, 111 Stat. 251, 730.  The Authority's 
agreement with the Chief Management Officer provides for a five year 
term with an annual salary of $155,000, eligibility for a bonus after 
one year in an unspecified amount, payment of $25,000 over a mutually 
agreed period to reflect retirement benefits she forgoes by leaving 
her previous employment, and the sum of $12,000 to cover "transitional 
expenses," including moving and transitional housing in Washington, 
D.C..  In addition the Authority agreed to contract with the ICMA 
Retirement Corporation to provide her a "defined contribution of 
$25,000 per year or ten percent of  total compensation, whichever is 
less, and deferred compensation of up to $8,000 per year."  

The Authority staff advised us that they believe the Management Reform 
Act of 1997 provides authority for the establishment of this position. 
They base this opinion on the fact that the Management Reform Act 
places additional responsibilities on the Authority Chair or his 
"designee" which they state means that the Authority may create the 
position in question and appoint an individual to serve in the 
position.  They assert that Congress understood that the new statutory 
responsibilities would require the appointment of a Chief Management 
Officer and it would be necessary to pay the market rate to obtain a 
person with the requisite skills and experience to fill the position.  
They also indicate that because the Authority, not the Executive 
Director, appointed the incumbent, and because she reports to the 
Authority, not the Executive Director, she is not a staff person 
subject to the limitation on pay in section 102 of the Act since the 
limitation applies only to personnel appointed by the Executive 
Director.

The provisions of the Management Reform Act of 1997 to which the 
Authority staff refer as authority for the Chief Management Officer's 
position are found in section 11104.  This section establishes 
management reform teams to implement management reform plans for the 
District of Columbia.  Section 11104(a) provides that these teams 
shall consist of (1) the Authority Chair "(or the Chair's designee)," 
(2) the District of Columbia Council Chair "(or the Chair's 
designee)", (3) the Mayor "(or the Mayor's designee)," and (4) with 
respect to plans involving a specific department, the head of the 
department involved.  While section 11103(a) specifically requires the 
Authority to enter into contracts with consultants to develop the 
management reform plans required by section 11104, the Management 
Reform Act contains no provision creating a new position to be filled 
by the Chair's "designee," nor waiving the pay limitations provided by 
section 102 of the 1995 Act.  
In our view, the common understanding to be afforded to the Management 
Reform Act's reference to "designee" is that the Authority Chair may 
be represented on the management reform teams by someone of his 
choosing rather than performing the related duties personally.  The 
use of a "designee" is a common device that gives a high level 
official the flexibility to perform certain duties through a 
subordinate rather than performing the duties personally to the 
detriment of other required duties and responsibilities.  In this 
regard, the Act provides the authority to have a "designee" on the 
management reform teams not just to the Authority Chair, but to other 
high ranking officials of the District - the Mayor and the Council 
Chair.  We do not agree that by providing that the explicit 
authorization of the Authority Chair to participate in the management 
reform teams through a "designee" authorizes the Authority Chair to 
establish a position for his designee that pays a salary exceeding the 
specific pay limitation applicable to the Authority under section 102.  
Finally, we found no reference in the legislative history of the 
Management Reform Act, nor has the Authority referred us to such, 
indicating that Congress created (or authorized the creation of) a new 
position free from the level IV pay limitations applicable to 
Authority staff members.  

The Authority reasons that it avoids the pay limitation by creating a 
position filled directly by, and reporting to, the Authority, rather 
than appointed by the Executive Director with the approval of the 
Chair.  The implication of this view is that the Authority may create 
positions, directly appoint the staff to fill the positions, and pay 
them without regard to any limitation, in effect rendering the section 
102 pay limitation meaningless.  Obviously, this would be contrary to 
Congress's purpose in enacting section 102.  In our view the reference 
in the 1997 statute to a designee to whom the Chair may delegate 
certain functions or duties is not sufficient to overcome the specific 
pay limitation in the original statute establishing the Authority and 
providing for the appointment and pay of an Executive Director and 
additional staff.[9]

Since the Authority's budget currently is under review, the 
appropriations process for fiscal year 1999 provides an opportunity 
for Congress to consider whether the appointment of a Chief Management 
Officer with pay and benefits in excess of the limitation provided in 
section 102 of the Act is desirable, and if so, to enact additional 
legislation to specifically so provide.  However, in the absence of 
such legislation, the pay arrangements the Authority made with the 
Chief Management Officer are contrary to section 102 of the Act.[10]  
5 U.S.C.  sec.  5304(h)(2)

B-279095.2

DIGESTS

1.  There is no legal basis for the D.C. Financial Responsibility and 
Management Assistance Authority (Authority) to have made regular 
salary payments to its staff at rates exceeding the rate of basic pay 
for Executive Level IV.  Section 102 of Public Law 104-8 establishes 
the rate of basic pay for level IV as the maximum rate of pay for the 
Authority's staff.  Neither section 102 nor its legislative history 
supports the Authority's view that it may exceed the level IV rate 
limitation by characterizing the excees pay to three of its staff as 
locality pay.  Further, while the Authority analogizes to locality pay 
in the federal system, the concept of locality pay does not have 
meaning in view of the Authority's pay scheme and the Authority did 
not include a locality pay component in its pay system in any systemic 
fashion.

2.  There is no legal basis for the D.C. Financial Responsibility and 
Management Assistance Authority (Authority) to have made regular 
salary payments to its staff at rates exceeding the rate of basic pay 
for Executive Level IV.  Section 102 of Public Law 104-8 establishes 
the rate of basic pay for level IV as the maximum rate of pay for the 
Authority's staff.  Neither the D.C. Management Reform Act of 1997, 
nor its legislative history, supports the Authority's view that it may 
infer from the Act,or the circumstances surrounding its enactment and 
implementation, the legal authority to pay a Chief Management Officer 
in excess of Executive Level IV.  Further,  the Authority's view that 
the level IV limitation does not apply to a Chief Management Officer 
appointed by the Authority Chair, rather than by the the Authority's 
Executive Director, would render the pay limitation meaningless 
contrary to the Congress' purpose in enacting section 102.

1. The Authority identified several individuals as consultants to the 
Authority under contracts with consulting firms.  The Authority has 
the authority to hire experts and consultants, and to enter into 
contracts to carry out its responsibilities. The Act,  sec.  101(e)(1) and 
103(g); and the District of Columbia Management Reform Act of 1997, 
Pub. L. No. 105-33, Title XI, Subtitle B,  sec.  11103(a), 111 Stat. 251, 
731 (1997).  As consultants, they are not subject to the limitation on 
pay of Authority staff provided by section 102.  See e.g., B-231565, 
Nov. 14, 1988, and cf. B-237117, July 12, 1991.  Thus, they fall 
outside the scope of your request.

2. See Executive Orders No. 12944, Dec. 28, 1994, 60 Fed. Reg. 309; 
No. 12984,     Dec. 28, 1995, 61 Fed. Reg. 237; and No. 13033, Dec. 
27, 1996, 61 Fed. Reg. 68987.

3. See Executive Order No. 13071, Dec. 29, 1997, 62 Fed. Reg. 68521.

4. After receiving the 1996 opinion and meeting with Authority staff, 
we invited the staff to supplement its explanation of its legal 
authority.  We have not received any additional explanation or 
analysis.

5. The Authority provided information showing that in fiscal year 
1996, in addition to their salaries, 12 employees were paid bonuses, 
ranging in amount from $500 to $4,000.  The information indicates that 
none of these employees received a salary at a rate in excess of the 
Executive Level IV rate then in effect ($115,700), with the employee 
who received the largest bonus ($4,000) also receiving the highest 
salary rate ($110,000) of the 12.  Payment of these bonuses apparently 
also was based on the General Counsel's August 1996 opinion.  Although 
the federal statutes he analogizes to do not apply to the Authority, 
an entity in the D.C. government, there is authority to make 
performance-based awards to D.C. employees in amounts not exceeding 
$5,000.  D.C. Code Title 1,  sec.  1-620.1. 

6. The Executive Level IV rate is set pursuant to 5 U.S.C. chapter 53, 
subchapter II, which establishes the Executive Schedule pay rate 
system.  Adjustments to Executive Schedule rates are authorized by 5 
U.S.C.  sec.  5318, but this provision does not incorporate the 
locality-based increases authorized under the separate provisions of 5 
U.S.C. chapter 53, subchapter I, into the Executive Schedule rates.

7. Compare 68 Comp. Gen. 363 (1989); and B-205284, Nov. 16, 1981, 
concerning  compensation of Tennessee Valley Authority executives.

8. Although the Authority designated these payments as retroactive pay 
for pay periods in fiscal years 1995, 1996 and 1997, they were made in 
a lump sum apparently entirely from funds appropriated to the 
Authority for fiscal year 1997.

9. To adopt the Authority's position in this regard would, in effect, 
require construing the provisions of the Management Reform Act to 
impliedly amend the section 102 pay limitation provision.  Amendments 
of statutory provisions by implication are not favored and will not be 
upheld in doubtful cases.  See Sutherland, Statutory Construction, 
Vol. 1A,  sec.  22.13, (5th ed. 1991).  

10. In addition to the Chief Management Officer's $155,000 salary 
exceeding the section 102 limitation, certain of the other benefits 
the Authority agreed to provide her such as the $25,000 payment to 
reflect lost retirement benefits from her prior employment, the 
contract with ICMA Retirement Corporation for a contribution of 
$25,000 or ten percent of total compensation, and deferred 
compensation of up to $8,000 per year may be viewed as pay supplements 
in violation of section 102.  See Supplemental Retirement Benefits of 
President of Radio Free Europe/Radio Liberty, Inc., 72 Comp. Gen. 321 
(1993).