May 9, 1997
                                                  


                       GSBCA 14087-TRAV, 14088-TRAV


           In the Matters of JAMES R. REED and DERINDA C. RHODES


     James R. Reed, Grand Prairie, TX, Claimant in GSBCA
14087-TRAV.

     Derinda C. Rhodes, Bessemer, AL, Claimant in GSBCA 14088-TRAV.

     Debra McKee, Chief, Accounting & Payment, Department of
Veterans Affairs, Dallas, TX, appearing for Department of Veterans
Affairs.

DANIELS, Board Judge (Chairman).

     James R. Reed and Derinda C. Rhodes, who are employees of the
Department of Veterans Affairs (VA), traveled to Sturgis and Hot
Springs, South Dakota, during late June and early July of 1996 to
assist in the consolidation of the databases at two VA medical
centers.  Each of the employees went there under orders which
authorized reimbursement in the amounts of $84 per day for lodging
and $30 per day for meals and incidental expenses.  After the trips
were over, Mr. Reed and Ms. Rhodes submitted vouchers to the
agency, requesting reimbursement in amounts which were within the
authorized limits.  The VA auditor who reviewed the vouchers
refused to allow full payment.  The employees claim the difference
between what the auditor allowed and the amounts sought through the
vouchers.

     Ms. Rhodes s claim includes another issue as well.  Ms. Rhodes
purchased a first-class airline ticket for a portion of her trip
home.  The auditor denied payment of the portion of the ticket
price which was in excess of the coach-class rate for that leg of
the trip.  She seeks reimbursement of the amount which the agency
has not paid.

Subsistence expenses

     Statute provides that a Government employee, when traveling on
official business away from his designated post of duty, is
entitled to a per diem allowance, reimbursement of expenses
actually and necessarily incurred, or a combination of the two.  5
U.S.C.  5702(a)(1) (1994).  The rates and conditions regarding the
allowance and reimbursement are established in the Federal Travel
Regulation by the Administrator of General Services.  Id.
 5702(a)(1), 5707(a)(1); 41 CFR ch. 301 (1996).

     According to the FTR, payment of per diem allowances is the
standard means of covering employees' costs of traveling on
official business.  41 CFR 301-7.1(a).  Per diem rates are
established on a "lodgings-plus" basis; they include, for each
specified locality, a maximum amount for lodging expenses and a
fixed allowance for meals and incidental expenses.  Id. 301-7.3(a),
Appendix A.  As to lodging, the employee is to be reimbursed for
actual costs incurred, up to the maximum amount.  Id.
301-7.6(b)(1), -7.9(c).

     During the time that Mr. Reed and Ms. Rhodes were on temporary
duty in South Dakota, the Administrator of General Services had
established per diem rates for Hot Springs -- $61 for lodging and
$26 for meals and incidental expenses.  41 CFR ch. 301 Appendix A.
The Administrator had not established per diem rates specifically
for Sturgis; thus, the rates for that city were the standard,
continental United States rates of $40 for lodging and $26 for
meals and incidental expenses. Id.

     The reimbursement limits shown on the travel orders, $84 per
day for lodging and $30 per day for meals and incidental expenses,
were the rates in effect at that time for Rapid City, South Dakota. 
Although Rapid City may have been the closest airport to the cities
the employees visited, these rates were not appropriately invoked,
since the trips were not to Rapid City itself.  41 CFR 301-7.9(a)
(lodging to be obtained at temporary duty location unless
unavailable there).  Reimbursement in amounts higher than the
established per diem rates applicable to Hot Springs and Sturgis 
would consequently not have been appropriate unless it had been
permissibly authorized or approved in accordance with the
regulations governing the alternate form of reimbursement for
subsistence expenses incurred by Government travelers, actual and
necessary expenses.

     The FTR explains, "The maximum per diem rate, although
generally adequate, may be insufficient for a particular travel
assignment because the actual and necessary subsistence expenses
are unusually high due to special duties or because subsistence
costs have escalated due to special or unforeseen events." 41 CFR
301-8.2(a).  Agencies are consequently empowered to authorize or
approve reimbursement for actual and necessary expenses "when the
applicable maximum per diem rate . . . is inadequate due to special
or unusual circumstances."  Id.; see also id. 301-8.1(a).  For the
rates to have been permissibly authorized, this test must be met.

     Mr. Reed and Ms. Rhodes both state:

     Due to tourism in the Hot Springs/Mt. Rushmore areas per
     diem rates were unavailable for government lodging. 
     Reasonable commuting distance not obtainable (45 miles
     one-way -- Rapid City, and the per diem rate for this
     area during this time frame is $84 for lodging).  Per the
     regulation actual lodging expenses under these
     circumstances are authorized.

     The FTR lists five examples of situations in which
reimbursement of actual and necessary subsistence expenses is
appropriate.  These include: attendance at a meeting where lodging
and meals must be procured at a prearranged place at high cost; 
subsistence costs at the destination have escalated for short
periods of time during special functions; and special duties of the
assignment dictate incurring unusually high expenses in the conduct
of official business.  The circumstances cited by the claimants
do not fall within any of these examples.  Nor do we believe that
these circumstances constitute any other form of "special or
unforeseen events" which might support authorization of
reimbursement of actual expenses.  The impact of tourism on costs
of lodging and meals is taken into account in establishing per diem
rates; the rates vary by season.  For example, the rate for lodging
in Hot Springs, South Dakota, in 1996 was $61 only from May 1 to
October 1; after October 1, it fell to $40.  41 CFR ch. 301
Appendix A.  The tourism factor therefore cannot be considered
special or unforeseen.

     We conclude that in authorizing the claimants to receive
reimbursement for subsistence expenses in actual amounts higher
than the established per diem amounts, the supervisors were acting
outside the authority vested in them by regulation and agency
delegation.  We appreciate that Mr. Reed and Ms. Rhodes are upset
that they were not reimbursed for expenses they incurred while on
Government business, within the amounts provided on their travel
orders.  Nevertheless, the law is clear that agency officials may
not spend money in violation of statute or regulation.  Kevin S.
Foster, GSBCA 13639-RELO, 97-1 BCA  28,688 (1996), at 143,294
(citing Office of Personnel Management v. Richmond, 496 U.S. 414
(1990); Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380
(1947)).  The auditor s refusal to allow reimbursement of any
expenses in excess of the per diem amounts for Sturgis and Hot
Springs on the days Mr. Reed and Ms. Rhodes traveled to those
cities was correct.

Airfare

     Due to demands of her work, Ms. Rhodes had to postpone her
departure from Hot Springs on July 3 three separate times.  She was
eventually able to get home that day by taking one airline flight
from Rapid City to Chicago and another from Chicago to Birmingham,
Alabama.  The flight on which she secured passage from Chicago to
Birmingham was the last one of the day, and the only seat available
on that flight was in the first-class section of the aircraft.  Ms.
Rhodes paid $43 more than the coach-class fare for that seat.

     The VA auditor denied reimbursement of the $43 because she
believed that the Government never authorizes its employees to
travel first-class.  Ms. Rhodes maintains that she should be
reimbursed because her spending this amount actually saved the
Government money -- the alternative to flying first-class was
spending another night in Hot Springs (per diem, $87) or staying
along the route in Rapid City (per diem, $114) or Chicago (per
diem, $157).  Neither position is in keeping with the governing
regulation.

     The FTR establishes as the "policy of the Government that
employees who use commercial air carriers for domestic and
international travel on official business shall use coach-class
airline accommodations."  41 CFR 301-3.3(d)(1).  The regulation
permits the use of "first-class airline accommodations" and
"premium-class other than first-class airline accommodations" (for
example, business-class), but only in specified circumstances.  Id.

     First-class tickets may be used at Government expense in just
three situations: no other accommodations are reasonably available;
an employee has a disability; and security reasons are present.  41
CFR 301-3.3(d)(4).  The only one of these situations which might
even appear to pertain to Ms. Rhodes  predicament is the first. 
The term "reasonably available" is defined, however, in a limiting
way; it means "a class of accommodations, other than first-class
airline accommodations, that is available on an airline and that is
scheduled to leave within 24 hours of the employee's proposed
departure time, or scheduled to arrive within 24 hours of the
employee's proposed arrival time."  41 CFR 301-3.3(d)(4)(i).  Ms.
Rhodes does not contend that no flights with seating less costly
than first-class were scheduled to leave Chicago for Birmingham
within twenty-four hours of the flight she took.  Thus, other
accommodations were "reasonably available" to her.  None of the
conditions for Government payment for the first-class ticket was
met.  Consequently, we conclude that albeit for the wrong reason,
the auditor s determination not to allow reimbursement was correct.

     We note that "overall cost savings to the Government" is a
valid justification for purchasing, at Government expense,
"premium-class other than first-class" tickets.  41 CFR
301-3.3(d)(5)(vi).  Thus, if Ms. Rhodes had found available and
bought a business-class, rather than first-class, ticket, her
reason for asking the VA to pay the extra cost of her airfare would
have been good cause for reimbursing her.  Whether it makes sense
to encourage Government employees and agencies to save money by
making one form of investment, but not by making another, is not
the sort of question we are established to answer.  We take the
regulations as they are, and leave to others the making of policy.






                                   _________________________
                                   STEPHEN M. DANIELS
                                   Board Judge