Board of Contract Appeals General Services Administration Washington, D.C. 20405 _____________________ September 17, 1999 _____________________ GSBCA 14957-RELO In the Matter of DONALD MIXON Donald Mixon, Atlanta, GA, Claimant. Cynthia S. Whitt, Chief, Accounting Branch., Financial Management Office, Centers for Disease Control and Prevention, Public Health Service, Department of Health and Human Services, Atlanta, GA, appearing for Department of Health and Human Services. HYATT, Board Judge. Claimant, Donald Mixon, an employee of the Centers for Disease Control and Prevention (CDC), was transferred from Washington, D.C. to Atlanta, Georgia. He occupied temporary quarters from June 29, 1998 to August 27, 1998. He was joined by his spouse and two children on July 9. Mr. Mixon claimed $3500 per month in temporary lodging expenses for a total of $7000, and itemized subsistence expenses of $2096 for the first thirty days and $2064 for the second thirty days that he and his family occupied temporary quarters.[foot #] 1 These expenses included meals, which he itemized on a form provided by the agency, and laundry, for which receipts were provided.[foot #] 2 ----------- FOOTNOTE BEGINS --------- [foot #] 1 The maximum lodging reimbursement for which he was eligible was $3500 the first month and $3225 the second month. The maximum subsistence allowance was $2100 for the first month and $1935 for the second month. [foot #] 2 The laundry receipts provided were for cleaning which apparently was done at a cleaners located in the outskirts of Birmingham, Alabama, more than 160 miles from the location of Mr. Mixon's sister's home. The receipts are blank forms with the name and address of the cleaner added in handwriting at the bottom of the form. ----------- FOOTNOTE ENDS ----------- After reviewing claimant's voucher, CDC's program office questioned the temporary quarters lodging expenses and the log of itemized meal expenses submitted by Mr. Mixon in support of his claim for reimbursement. The program office was specifically concerned about the nature of the non-commercial property rented by claimant for temporary quarters. The office asked claimant to provide particulars with respect to the location of the property, the name and address of the landlord, a copy of the lease agreement, how the property was advertised, whether the property was customarily available for rent, and an explanation of why the rent was paid in cash. In addition, the program office requested an explanation of why claimant reported identical amounts for meals each day. In response to these questions, Mr. Mixon stated that he had rented a house belonging to his sister and provided a copy of the lease form he entered into with her. He explained that the house was not ordinarily rented,[foot #] 3 but had happened to be available for a short-term rental at the time he transferred to Atlanta. He stated that he chose to pay rent in cash because he was required to use his personal funds and it was the most convenient method available to him. He did not have the use of a Government credit card at the time and his request for a cash advance was not authorized. With respect to the subsistence expense log, Mr. Mixon disclosed that he did not keep a log of exact meal expenses for his family, but instead gave his family a daily dollar limit of what they could spend and assumed they spent it. He did state that the log was fairly accurate for his own meals because "I eat almost the same thing every day and, as a creature of habit, I am clear about what it costs me for meals, especially breakfast and lunch." The record does not reflect whether meals were consumed in restaurants or the extent to which kitchen facilities in the house were used. In light of the additional information provided by Mr. Mixon, the CDC Financial Management Office concluded that the claim for temporary quarters subsistence expenses (TQSE) was improperly supported and denied it in its entirety. The lodging rental was deemed improper because it failed to meet the test of reasonableness set forth in the applicable provision of the Federal Travel Regulation (FTR), 41 CFR 301-11.12 (1998). This provision states that an employee traveling on Government business who obtains nonconventional lodgings with a friend or relative will be reimbursed only for the substantiated, reasonable extra costs incurred by the friend or relative. The agency also determined that the failure to maintain records of actual expenses for meals disqualified this claim for payment. In addressing the agency's reasons for denying his claim, Mr. Mixon maintains that he has provided proper receipts for the ----------- FOOTNOTE BEGINS --------- [foot #] 3 It appears from the sister's income tax documents that this same house is her permanent residence. ----------- FOOTNOTE ENDS ----------- rental payments, as well as a copy of the lease. To support his contention that the transaction was arm's length in nature, he has provided a copy of his sister's tax return, declaring the rental paid as income. Finally, he notes that the only travel related documents provided by CDC other than his travel authorization was a notebook entitled "NCHSTP [National Center for HIV, STD & TB Prevention] Relocation Information." This notebook did not set forth any rules or guidance concerning rental of temporary quarters from relatives. A cover memorandum encouraged Mr. Mixon to direct any questions he might have concerning his benefits to a travel specialist, but it does not appear that Mr. Mixon made any inquiries concerning the issues that have arisen with respect to his TQSE claims. Discussion Under FTR provisions addressing TQSE for relocating employees, so long as the amounts claimed do not exceed the allowable maximum, an agency will reimburse the actual, reasonable expenses incurred for lodging obtained for the purpose of temporary occupancy from a private or commercial source. 41 CFR 302-5.1; 302-5.100. To assess whether the expenses claimed are reasonable, CDC has looked to a provision in parallel regulations governing reimbursement of employees for expenses of travel on official business travel. Under FTR 301-11.12, an agency will routinely reimburse an employee's expenses for conventional lodging, such as a hotel, motel or boarding house, within the specified per diem amount. When an employee obtains nonconventional temporary lodging from relatives or friends, reimbursement is limited to additional costs incurred by the host in accommodating the employee and family, if the employee can substantiate the costs and the agency determines them to be reasonable. The employee will generally not be reimbursed the cost of comparable lodging or a flat "token" amount. The General Accounting Office (GAO), which considered claims for relocation expenses until mid-1996, also adopted a similar standard of reasonableness, based on the increased costs incurred by the host, in assessing how to reimburse for lodging provided by friends or relatives. Jerry W. Blevins, B-231512 (Sept. 21, 1989); Jerome R. Serie, 65 Comp. Gen. 287 (1986); 52 Comp. Gen. 78 (1972). This Board has endorsed and followed this approach, as well. John Wesley Summers, GSBCA 14600-RELO, 98-2 BCA 29,975. This Board has offered the following observations concerning the situation in which an employee obtains temporary lodging from a private source: When an employee secures temporary lodgings in a private residence, questions may arise as to whether the expenses claimed were actually spent for the lodgings, or were merely transfers of money arranged for the purpose of supporting a claim against the Government and thereby enriching both the employee and the host. If the employee can show that payment was for the use of quarters which were furnished as a business proposition, however, . . . reimbursement is appropriate (assuming the reasonableness test is also met). The best evidence that a business arrangement is involved . . . is the demonstration of a continuing practice of the homeowner renting the room for an established price. Guy E. Mercier, GSBCA 13795-RELO, 97-1 BCA 28,925. Unlike the situation in Mercier, in which the Board was able to find that the landlady in fact routinely rented rooms in her home, claimant's sister did not generally rent out her private residence. In a similar case, in which an employee rented a mobile home owned by his spouse's parents, GAO noted: When the cost of temporary quarters obtained from close relatives is apparently fixed in an attempt to recover the maximum reimbursable amount, the expense may be viewed as unreasonable. . . . [Claimant] contends that his situation is different from that in [other cases] in that he and his family did not stay with relatives. Instead they rented a mobile home belonging to relatives who lived elsewhere. However, the [agency] indicates that there is no evidence that [claimant's] in-laws otherwise rented their mobile home. When noncommercial accommodations are secured from friends or relatives, it is not usually considered reasonable for the employee to pay the same amount that he would pay at a motel or other commercial establishment. While payment of the established rate for services provided commercially ordinarily creates an inference that the amount of payment was reasonable, no such presumption arises if the attendant circumstances suggest that the character of the transaction is other than at arm's length. Moreover, a receipt signed by a relative does not necessarily establish (1) that the employee incurred a legal obligation to make the payment for which the receipt was given or (2) that a reasonably prudent person or private business would have done so under like circumstances. Jeffrey G. Ellegard, B-212921 (May 30, 1984). The record does not establish whether or not Mr. Mixon's sister remained in her house for the rental period. Regardless, the information available to the Government does not support payment of the amounts claimed for temporary quarters. Claimant's sister did not regularly rent out her home. There is no evidence of what the reasonable rental rate for a three bedroom family house in East Point, Georgia would be. There is also no explanation of how an appropriate rental amount was established. Nor is there any evidence of what additional costs, attributable to the upkeep and operation of the home, were incurred by claimant's sister as a consequence of the occupancy of her brother and his family. Even accepting the contention that Mr. Mixon was legally obligated to pay his sister under the lease, the second prong of the Ellegard test is not met -- we have no evidence that this rental sum would have been agreed to by a reasonably prudent person or private business. It is claimant's responsibility to justify the expenses claimed. In the absence of any evidence demonstrating what would have been a reasonable amount to pay for lodgings, the agency properly denied payment of the claim. With respect to meals and laundry expenses, the information the employee is required by regulation to supply is similarly lacking. Although Mr. Mixon was not required to submit receipts for meals, he was required to itemize actual expenses incurred to permit a review by the agency to confirm that the expenses were actually and reasonably incurred. FTR 302-5.12. This cannot be done here -- Mr. Mixon concedes that he had no idea what amounts were actually spent by his spouse and children -- he simply assumed they spent the maximum, although they were staying in a house, presumably with kitchen facilities available. He also asserts that he in fact ate the same meals every day in support of his claim for virtually the same amount every day, but has supplied no backup information to support this. Although we recognize that clearly some amount was spent for meals, there is no credible basis upon which the agency can here determine what those amounts actually were. Absent evidence of this nature, the agency is not required to approve any payment at all. Luther R. Dixon, GSBCA 13694-RELO, 97-1 BCA 28,947; accord Michael D. Fox, GSBCA 13712-RELO, 97-2 BCA 29,217; Michael L. Morgan, GSBCA 13646-RELO, 97-2 BCA 29,021. If an agency is inclined to provide some reimbursement under these circumstances, it may, but is not required to, do so on the basis of statistical data that it deems appropriate for the area. See Lyle Van Dyke, GSBCA 13695-RELO, 97-2 BCA 29,097. To the extent the agency is satisfied that the laundry receipts are valid and reasonable, it should reimburse those amounts. ____________________________ CATHERINE B. HYATT Board Judge