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093195 1 (1974-12-31)

handle is hein.gao/gaobacugw0001 and id is 1 raw text is: 


                      UNITED STATES  GENERAL  ACCOUNTING  OFFICE
                               WASHINGTON,   D.C. 20518

IWTnAToHALlIVIStON                                December 31, 1974




       Mr.  EdWard N, Gulli, Director           (9
       Financial  Systems Oevelopment
       BF/Ft4S-Room 1801
       Departoent  of State

       Dear  Mr. Gulli;

              During our past audits of the Department's  Foreign Acounts
       we  noted that many Posts were paying cash  awards to Americitn em-
       ployees Out  were not withholding Federal  income taxes from the
       awards  as; required by law, nor could we determine that the awards
       were  included in the employees' payroll  records as taxable income.

              Your regulations covering the above  subject are found in the
        Foreign Affairs Manuals 4 FAM 553.5  and 3 FAM 643.4.  In accord-
        ance with these regulations, the awards  are vouchered on Form FS-455,
        rather than on payrolls.

              To solve this problem, we suggest  that you amend the regula-
        tions, instructing the Posts to process  all future cash award pay-
        ments as a part of their payrolls.
              We will appreciate receiving  your views on this matter,
                                                  S  cerely ype s,


                                                  Frank M, ZUpacosta
                                                  Assistant Director











                                    /vsM NZ


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