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                              March 20, 1997
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                             GSBCA 13888-RELO


                       In the Matter of S. K. DATTA


     S. K. Datta, Woodridge, IL, Claimant.

     Al LaBombard, Chief, Employee Accounts Division, Austin
Finance Center, Department of Veterans Affairs, Austin, TX,
appearing for Department of Veterans Affairs.

DeGRAFF, Board Judge.

     S. K. Datta is an employee of the Department of Veterans
Affairs (DVA).  In February 1996, Mr. Datta accepted a transfer
from Washington, DC to Chicago, Illinois.  In June 1996, Mr. Datta
purchased a house in Illinois and asked the DVA to reimburse him
for several expenses related to the purchase.  Although the DVA
reimbursed Mr. Datta for some of his expenses, the DVA did not
reimburse Mr. Datta for the following items:

     Document preparation fee      $150
     Tax service fee                 58
     Funding fee                     40
     Underwriter's fee              200
     Processing fee to mortgage 
          company                   100
     Title insurance                150

     All of these items, except the title insurance, are listed on
Mr. Datta's settlement statement under the heading "Items Payable
In Connection With Loan."  Mr. Datta's mortgage broker explained
that, except for the title insurance, the amounts paid by Mr. Datta
were "used in calculating [Mr. Datta's] APR (Annual Percentage
Rate)."  

     Concerning the title insurance, the DVA asked Mr. Datta for
information concerning the purpose of the $150 payment.  As far as
we can tell, Mr. Datta never provided the agency with any
information.

     Mr. Datta asked us to review the DVA's decision denying his
request for reimbursement for the expenses listed above.  

                                Discussion

     When a federal agency transfers an employee from one official
duty station to another, the agency may reimburse the employee for
expenses the employee is required to pay in connection with the
purchase of a residence at the new official duty station.  5 U.S.C.
 5724a(a)(4) (1994).  This statutory provision is implemented in
the Federal Travel Regulation (FTR).  

     The FTR provides that an agency cannot reimburse an employee
for any "fee, cost, charge, or expense determined to be part of the
finance charge under . . . Regulation Z issued by the Board of
Governors of the Federal Reserve Board."  41 CFR 302-6.2(d)(2)(v)
(1996).  Regulation Z explains that a finance charge is one that is
imposed by a creditor "as an incident to or a condition of the
extension of credit."  12 CFR 226.4(a) (1996).  Regulation Z
provides that a finance charge does not include fees for preparing
deeds, mortgages, and settlement documents, if the fees are bona
fide and reasonable in amount.  12 CFR 226.4(c)(7)(ii).

     Mr. Datta's mortgage broker says that it used all of the items
for which Mr. Datta seeks reimbursement to calculate Mr. Datta's
mortgage interest rate.  It is safe to assume that Mr. Datta would
not have received a loan if his mortgage broker had been unable to
calculate the appropriate interest rate.  Neither Mr. Datta nor his
mortgage broker suggested that the document preparation fee was a
charge for preparing a deed, a mortgage, or a settlement document. 
Thus, the items for which Mr. Datta seeks reimbursement were
incident to an extension of credit and are, therefore, finance
charges according to Regulation Z.  Because the FTR provides that
an agency cannot reimburse an employee for a finance charge, the
DVA correctly determined not to reimburse Mr. Datta for these
items. 

     As the DVA recognizes, Mr. Datta may be entitled to
reimbursement for all or part of the $150 that he paid for title
insurance.  To date, however, he has not provided the DVA with any
information that the DVA can use to determine whether reimbursement
is proper.  If Mr. Datta provides the DVA with the information that
it requested concerning the purpose of the $150 payment, and if
that information establishes that Mr. Datta is entitled to be
reimbursed in accordance with the FTR, the DVA may reimburse him
for the title insurance.  41 CFR 302-6.2(d)(1)(viii), (ix).




                                   ______________________________
                                   MARTHA H. DeGRAFF
                                   Board Judge