## JUDGMENT No. 2016-5

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### Case overview
- Tribunal: Administrative Tribunal of the International Monetary Fund, composed pursuant to Article VII, Section 4 of the Tribunal’s Statute of Judge Catherine M. O’Regan, President, and Judges Andrés Rigo Sureda and Edith Brown Weiss.
- Case title and number: Mr. E. Verreydt, Applicant v. International Monetary Fund, Respondent.
- Hearing dates before Tribunal: November 3-4, 2016.
- Parties’ representation:
  - Applicant: Mr. Eric Verreydt, a retiree of the Fund, represented himself.
  - Respondent: Ms. Diana Benoit, Senior Counsel, and Ms. Melissa Su Thomas, Counsel, IMF Legal Department.
- Relief sought by Applicant:
  - Rescission of the decision to deduct from his separation payment the amount of his 2011 home leave benefit and return of the monies collected.
  - Monetary compensation for moral damage.
- Respondent’s position:
  - Authorized to recover the 2011 and 2013 home leave benefits.
  - Home leave policy explicitly disallows use of all types of points or rewards earned through awards programs, including BFSFCU points.
  - Post-travel certification process made governing law clear; Applicant either overlooked or ignored it.
  - Denies compensable harm in administrative review and Grievance Committee processes.

### Procedural history
- Application filed with the Tribunal: December 9, 2015; transmitted to Respondent on December 16, 2015.
- Registrar circulated notice within the Fund: December 28, 2015.
- Pleadings timeline:
  - Respondent’s Answer: February 1, 2016.
  - Applicant’s Reply: February 25, 2016.
  - Fund’s Rejoinder: March 24, 2016.
- Oral proceedings before the Tribunal:
  - Neither party requested oral proceedings; Tribunal decided oral proceedings would not be useful and relied on record and Grievance Committee transcript.

### Factual background and contested actions
- Applicant’s Fund service: began in 1991; retired in 2014.
- Contested benefits: home leave benefits paid in 2011 and 2013.
- Fund’s recovery action:
  - Deducted from Applicant’s separation payment the amount of the 2011 home leave benefit on the ground Applicant used BFSFCU Member Rewards Program points to acquire airline tickets for his home leave travel.
  - Made a similar deduction for the 2013 home leave benefit; subsequently repaid the 2013 sum following Grievance Committee recommendation and Fund Management decision.
- Grievance Committee outcomes:
  - 2011 benefit: disallowed; recommendation that Fund retain amount deducted.
  - 2013 benefit: recommendation to repay amount deducted on ground Fund failed to give timely notice of 2011 non-compliance.
- Fund Management action: accepted recommendation in part — repaid $17,652 for 2013; retained 2011 amount pending Tribunal review.

### Home leave policy: legislative history and key provisions
- Policy redesign (1993): replaced Fund-issued tickets with cash allowance every two years based on cost of business class travel; proposed certification requiring staff to confirm trips were “not financed by sources other than the cash provided by the Fund (e.g., trips made by the staff member in conjunction with official travel, or by ‘frequent flyer’ programs, would not qualify).”
- Executive Board decision (effective May 1, 1993) adopted cash transportation allowance equivalent to one class below first class; certification requirement adopted but Board text did not mention proof of payment or frequent flyer use.
- GAO No. 17 (Home Leave), Rev. 9 (May 6, 1999) — key excerpts:
  - Section 1.01: Purpose — maintain cultural and personal ties to home countries.
  - Section 7.04: “Staff members may arrange home leave travel by any mode of transportation, in any class, and via any route . . . .”; “Travel to the home leave destination using a ticket provided under a frequent flyer program, or an airline employee or similar discount program, will not qualify as home leave travel.”; “However, frequent flyer awards may be used to upgrade the class of travel on tickets purchased by the staff member.”
  - Section 8.02.1(i): post-travel documentation — original airline ticket stubs fulfill documentation requirements provided they do not reflect travel taken under a frequent flyer award program.
  - Sections 8.02, 8.03, 12.02, 12.05, 12.06: certification, reimbursement, Treasurer’s Department review, and disciplinary consequences for misrepresentation.
- Staff Bulletin No. 99/19 (August 18, 1999):
  - Defines “reward programs” to include coupons, vouchers, points (including frequent flyer miles awarded by hotels, credit cards, or airlines).
  - States: “Awards earned through reward programs cannot be used as proof of payment for any portion of business or benefit travel for which the Fund provides either a lump sum allowance or a standard cost entitlement payment.”

### Applicant’s use of BFSFCU Member Rewards Program points and administrative chronology
- 2011 home leave:
  - Applicant applied October 2011; paid $17,774 for himself and spouse.
  - Travel occurred August 2012; online certification completed August 27, 2012; Applicant answered “No” to certification question about use of Frequent Flyer mileage or other award programs.
  - Documentation attached showed acquisition of airline tickets by redeeming 210,704 BFSFCU points plus payment of $60.
  - FIN audit concluded certification had “failed” on January 31, 2013; Applicant not notified of audit result until July 2014.
- 2013 home leave:
  - Applicant applied October 2013; paid $17,652 for himself and spouse.
  - Travel took place December 2013 – January 2014; certification completed February 2, 2014.
  - Documentation showed use of 201,718 BFSFCU points plus $60 to acquire tickets.
- FIN actions and remediation options (July 2014):
  - July 8, 2014 exit interview: FIN advised 2013 benefit had failed audit and Applicant acknowledged similar use in 2011.
  - July 15, 2014 FIN notification: unable to accept BFSFCU rewards program as proof of payment; provided three remediation options: (i) deduct 2011 and 2013 payments from separation payment; (ii) submit documentation from another fully paid trip; (iii) repeat travel and submit certification prior to separation.
  - Recovery effected: October 8, 2014 — total $35,426 deducted from separation payment.

### Grievance Committee findings and Fund Management response
- Grievance filed October 7, 2014; evidentiary hearing April 28, 2015.
- Grievance Committee conclusions:
  - GAO No. 17 and Staff Bulletin No. 99/19 disallow use of credit card reward points for home leave travel.
  - Recommended retention of 2011 deduction and repayment of 2013 deduction on ground Fund failed to give timely notice of 2011 audit failure.
- Fund Management decision (November 5, 2015): accepted recommendation in part and repaid $17,652 for 2013.

### Tribunal’s interpretive analysis and standards
- Issues framed for Tribunal:
  - Whether Fund erred in interpreting GAO No. 17 to prohibit use of BFSFCU points.
  - Whether policy itself is arbitrary.
  - Whether recovery of 2011 benefit was vitiated by failure to afford timely opportunity to remedy non-compliance.
  - Whether Fund’s administrative or Grievance Committee conduct caused compensable injury.
- Tribunal conclusions on interpretation and rationality:
  - GAO No. 17, Rev. 9 and Staff Bulletin No. 99/19 can reasonably be read together; the Fund did not err in interpreting the home leave policy to prohibit use of BFSFCU Member Rewards Program points to acquire home leave airline tickets.
  - The policy is rationally related to its objectives: encouraging home leave to maintain ties, administrative simplicity, targeting the cash benefit, and avoiding disproportionate advantages (e.g., double-dipping by staff accumulating rewards from Fund travel).
  - Use of frequent flyer awards to upgrade class remains permitted and does not undermine policy rationality.

### Procedural finding and remedy for 2011 benefit
- Tribunal factual findings:
  - FIN audit concluded Applicant’s 2011 certification failed on January 31, 2013, but Applicant was not notified until July 15, 2014.
  - FIN practice: audits are attempted within a year and, when a submission fails, FIN will advise the staff member and suggest remedial measures.
  - Delay deprived Applicant of a realistic opportunity to remedy non-compliance (e.g., replay the benefit or provide alternate documentation) prior to his separation date of July 31, 2014.
  - Applicant’s certification was made in good faith and Applicant had disclosed use of BFSFCU points in an exit interview.
- Tribunal decision on recovery:
  - The decision to recover the 2011 home leave benefit was vitiated by the Fund’s failure to afford timely notice and an effective opportunity to remedy non-compliance.
  - Remedy ordered: rescission of the decision to deduct the 2011 benefit and payment to Applicant of $17,774 to correct the effects of that decision.

### Claims of moral harm and procedural injury
- Applicant alleged concealment of audit information and adversarial conduct causing “significant inconvenience and psychological stress.”
- Tribunal findings:
  - No evidence established willful withholding during administrative review; claim of purposeful concealment not sustained.
  - No compensable injury shown from the conduct of administrative review and Grievance Committee proceedings.
  - Claim for moral harm denied.

### Formal operative conclusions (unanimous)
- Tribunal decisions:
  1. Applicant’s contention that the Fund erred in interpreting the home leave policy to prohibit his use of BFSFCU Member Rewards Program points is not sustained.
  2. Applicant’s contention that the home leave policy was arbitrary is not sustained.
  3. Applicant’s contention that the Fund caused compensable injury in administrative or Grievance Committee processes is not sustained.
  4. Applicant is entitled to relief on the ground the Fund failed to afford timely notice of rejection of his 2011 home leave certification and an effective opportunity to remedy non-compliance.
  5. Accordingly:
     - (a) the decision to deduct from Applicant’s separation payment the amount of his 2011 home leave benefit is rescinded; and
     - (b) the Fund shall pay Applicant the sum of $17,774.

### Key numeric facts and citations
- Dates: Committee meeting April 13, 1993; Executive Board decision effective May 1, 1993; GAO No. 17, Rev. 9 date May 6, 1999; Staff Bulletin No. 99/19 date August 18, 1999; Applicant applied for 2011 benefit October 2011; 2011 travel August 2012; FIN audit of 2011 certification January 31, 2013; Applicant applied for 2013 benefit October 2013; 2013 travel December 2013 – January 2014; exit interview July 8, 2014; FIN notification July 15, 2014; deduction from separation payment October 8, 2014; Tribunal hearing November 3-4, 2016; Decision issued November 4, 2016.
- Monetary amounts and points:
  - 2011 home leave benefit paid: $17,774.
  - 2013 home leave benefit paid: $17,652.
  - Total deducted from separation payment: $35,426.
  - 2011 ticket acquisition: 210,704 points + $60.
  - 2013 ticket acquisition: 201,718 points + $60.
  - BFSFCU points accrual rate: one point per one dollar spent; points valid for five years.
- GAO sections cited precisely: Sections 1.01; 2.01.10; 3.01; 3.03; 7.04; 8.01; 8.02; 8.02.1(i); 8.02.1(ii); 8.02.2; 8.03; 12.02; 12.05; 12.06.
- Record citations tracked: (Tr. 80); (Tr. 34); (Tr. 35-36, 72-73, 83); (Tr. 39, 82); (Tr. 28, 34, 62).

*Administrative Tribunal of the International Monetary Fund — Decision issued in Washington, D.C., November 4, 2016.*

### INTRODUCTION ...........................................................................................................

### INTRODUCTION

### Case overview
- Tribunal: Administrative Tribunal of the International Monetary Fund, composed pursuant to Article VII, Section 4 of the Tribunal’s Statute of Judge Catherine M. O’Regan, President, and Judges Andrés Rigo Sureda and Edith Brown Weiss.
- Case title and number: JUDGMENT No. 2016-5, Mr. E. Verreydt, Applicant v. International Monetary Fund, Respondent.
- Hearing dates before Tribunal: November 3-4, 2016.
- Parties’ representation:
  - Applicant: Mr. Eric Verreydt, a retiree of the Fund, represented himself.
  - Respondent: Ms. Diana Benoit, Senior Counsel, and Ms. Melissa Su Thomas, Counsel, IMF Legal Department.
- Relief sought by Applicant:
  - Rescission of the decision to deduct from his separation payment the amount of his 2011 home leave benefit and return of the monies collected.
  - Monetary compensation for moral damage.
- Respondent’s position:
  - Authorized to recover the 2011 and 2013 home leave benefits.
  - Home leave policy explicitly disallows use of all types of points or rewards earned through awards programs, including BFSFCU points.
  - Post-travel certification process made governing law clear; Applicant either overlooked or ignored it.
  - Denies compensable harm in administrative review and Grievance Committee processes.

### Procedural history
- Application filed with the Tribunal: December 9, 2015; transmitted to Respondent on December 16, 2015.
- Registrar circulated notice within the Fund: December 28, 2015 (pursuant to Rule IV, para. (f)).
- Pleadings timeline:
  - Respondent’s Answer: February 1, 2016.
  - Applicant’s Reply: February 25, 2016.
  - Fund’s Rejoinder: March 24, 2016.
- Oral proceedings before the Tribunal:
  - Article XII of the Tribunal’s Statute and Rule XIII, para. 1 of the Rules of Procedure considered.
  - Neither party requested oral proceedings; Tribunal decided oral proceedings would not be useful.
  - Tribunal relied on the transcript of Grievance Committee oral hearings and is authorized to weigh that record as evidence (citing Mr. M. D’Aoust v. IMF, IMFAT Judgment No. 1996-1, para. 17).

### Factual background — core facts
- Applicant’s Fund service: began in 1991; retired in 2014.
- Contested benefits: home leave benefits paid to Applicant in 2011 and 2013.
- Fund’s action:
  - Deducted from Applicant’s separation payment the amount of the home leave benefit paid for 2011 on the ground Applicant used BFSFCU Member Rewards Program points to acquire airline tickets for his home leave travel.
  - Made a similar deduction for the 2013 home leave benefit.
- Grievance Committee outcomes:
  - 2011 benefit: upheld Respondent’s position that Applicant failed to follow governing rules and disqualified the benefit.
  - 2013 benefit: recommended repayment of the amount deducted because the Fund failed to give Applicant timely notice regarding non-compliance in 2011, thereby denying an opportunity to avert repeating the practice in 2013.
- Fund Management’s action on Grievance Committee recommendation:
  - Accepted the recommendation in part: repaid Applicant the sum deducted for the 2013 benefit; retained the amount for the 2011 benefit.
- Respondent’s clarification: in accepting the Grievance Committee’s recommendation it did not concede points of law at issue in the case (citing Ms. “BB”, IMFAT Judgment No. 2007-4, paras. 60-66).

### The Fund’s home leave policy — legislative history and key elements
- Purpose of expatriate benefits:
  - Designed to compensate staff for additional costs of maintaining associations with their home countries during employment and to facilitate repatriation thereafter (citing Ms. “G”, Applicant and Mr. “H”, Intervenor v. IMF, IMFAT Judgment No. 2002-3, para. 41).
- 1993 major revision (substitution of cash allowance for centrally issued tickets):
  - Pre-1993: Fund purchased and issued home leave airline tickets directly to staff.
  - Post-1993: cash allowance paid every two years, based on the cost of business class travel to and from the home leave destination; staff member responsible for selecting travel options.
- 1992 staff paper (Committee Secretary to Members of the Committee on Administrative Policies, EB/CAP/92/9 (August 19, 1992)):
  - Identified home leave as one of five employment benefits with “potential for major simplification.”
  - Considered and rejected a “generalized expatriate allowance” because it would permit expatriate staff to apply extra income to purposes unrelated to expatriate status.
  - Recommended a single cash payment every two years based on business class travel and on family composition on eligibility date.
  - Proposed certification requirement: staff must certify that home leave trips were “. . . not financed by sources other than the cash provided by the Fund (e.g., trips made by the staff member in conjunction with official travel, or by ‘frequent flyer’ programs, would not qualify).”
  - Recognized potential for differential financial benefit where staff find cheaper fares or downgrade class; justified as acceptable in context of administrative simplicity and other expatriate travel needs.
- 1993 staff paper (Committee Secretary to Members of the Committee on Administrative Policies, “Home Leave,” EB/CAP/93/1 (March 30, 1993)):
  - Recommended replacing Fund-approved specific travel plans and tickets with “a system of cash payments for home leave transportation costs on a two-year cycle.” (Id., p. 2.) (Emphasis in original.)
  - Paper developed in consultation with the Staff Association Committee, the Personnel Committee of senior staff, and the World Bank. (Id., p. 1.)
  - Anticipated variations in benefits: some staff will travel business class; others will downgrade class to take more trips; some will obtain a surplus cash benefit by traveling at less than business class.
  - Emphasized administrative simplicity from providing cash and leaving travel choices to staff.
  - Proposed certification requirement (text quoted exactly):
    - Certification. Staff members who have received payments under the home leave policy will be required to submit a certification of the home leave travel they have taken, together with appropriate proof of travel, for all family members for whom the payments were made. The certification will need to confirm that the staff member has paid for the tickets and not received them as part of a “frequent flyer” program. The documentation will be subject to review for compliance with the home leave policy. Any material misrepresentation regarding the certified information or compliance with the applicable policies will be subject to appropriate disciplinary action, including dismissal, in accordance with General Administrative Order No. 33.
    (Id., p. 6.) (Emphasis added.)

- Post-1993 implementing regulations and subsequent documents relevant to the dispute (identified in the record):
  - Executive Board’s April 19, 1993 Decision implementing revisions.
  - GAO No. 17 (Home Leave), Rev. 9 (May 6, 1999).
  - Staff Bulletin No. 99/19 (Usage of Points Earned from Airline, Credit Card, Hotel, and Other Similar Reward Programs) (August 18, 1999).
- Tribunal note on later revision:
  - The Tribunal records that beginning in 2006, per Staff Bulletin No. 06/13 (Changes to Home Leave Policy) (July 25, 2006), the home leave travel allowance has been calculated based on full-fare economy class travel rather than business class, and staff have the option to take home leave at 18-month (rather than 24-month) intervals, with a reduced home country expense allowance. The Tribunal amended the Judgment to incorporate this information and observed that the additional information did not affect the outcome or considerations in the Judgment.

### Parties’ principal contentions before the Tribunal
- Applicant’s principal contentions:
  - The decision to recover the 2011 home leave benefit was:
    - (i) inconsistent with the Fund’s home leave policy; or
    - (ii) the policy itself represents an abuse of discretion; or
    - (iii) in Applicant’s circumstances, the decision was vitiated by the Fund’s failure to afford him a timely opportunity to remedy alleged non-compliance with the home leave policy.
  - Additional contentions:
    - The Fund caused compensable harm in the administrative review and Grievance Committee processes by concealing a material fact during administrative review and adopting an “excessively adversary undertone” in Grievance Committee proceedings.
- Respondent’s principal contentions:
  - Fund authorized to recover both 2011 and 2013 home leave benefits.
  - Home leave policy explicitly disallows use of points or rewards earned through awards programs, including BFSFCU points.
  - Policy is rationally related to the underlying purpose of home leave benefits.
  - Post-travel certification process made governing law clear; Applicant either overlooked or ignored it.
  - Travel undertaken by Applicant in 2011 and 2013 did not qualify as home leave travel; he should not retain benefit payments.
  - Denies compensable harm in administrative review and Grievance Committee processes.

### Issues posed to the Tribunal (as framed in the Introduction)
- Whether the Fund erred in interpreting the home leave policy to prohibit Applicant’s use of BFSFCU Member Rewards Program points to acquire home leave airline tickets.
- Whether, if the Fund did not err in interpretation, the policy itself is arbitrary in disallowing use of BFSFCU points to acquire home leave airline tickets.
- Whether the decision to recover the amount of Applicant’s 2011 home leave benefit was vitiated by the Fund’s failure to afford him a timely opportunity to remedy non-compliance.
- Whether the Fund’s conduct of the administrative review or Grievance Committee processes caused Applicant compensable injury.

*Administrative Tribunal of the International Monetary Fund, JUDGMENT No. 2016-5.*

### 23.  The proposal was considered by the Executive Board’s Committee on Administrative

### j2016-5 - 23.  The proposal was considered by the Executive Board’s Committee on Administrative

### Committee on Administrative Policies deliberations (April 13, 1993)
- The Committee discussed the use of frequent flyer miles in acquisition of home leave airline tickets. A Board member “. . . wondered what the rationale was for the staff member’s having to certify that he had paid for the ticket and had not used frequent flyer miles instead” and was concerned that “. . . staff who had travelled but who were not allowed to use those miles might thus be penalized.” (Minutes, p. 2.)
- Consultations with the Staff Association and the Committee of Senior Personnel Managers identified concern that the proposed change “would be somewhat divisive between expatriates and U.S. staff,” noting that staff accumulating frequent flyer miles through Fund travel could gain a distinct advantage via increased net cash payments. (Minutes, p. 3.)
- Given that “a considerable number of senior staff felt the issue was important,” it was recommended to require staff to demonstrate they had not used frequent flyer miles for the basic ticket to take them to their home country and back, with examination of tickets to accomplish that. (Minutes, p. 3.)
- A Board member advocated containing the expatriate/nonexpatriate contention “as much as possible.” (Minutes, p. 4.)
- The Fund’s Deputy General Counsel explained benefits are decided by the Executive Board, implementation covered by the GAOs and directives of the Managing Director, and carried out by the Administration Department. He agreed with simplifying the text of proposals. The Assistant Director of the Administration Department indicated it would be reasonable in implementing rules to require ticket stubs “owing to the need to ensure that the benefit was being used for the purpose for which it was given.” (Minutes, p. 8.)

### Executive Board decision (April 19, 1993; effective May 1, 1993)
- The Executive Board approved recommendations on “policies and administrative procedures for home leave,” effective May 1, 1993.
- Travel expenses — Board-adopted recommendation on Payment of transportation allowance:
  - The transportation allowance will be paid in cash for the amount equivalent to the cost of travel to and from the home leave destination in one class below first class.
  - It is understood that:
    - (a) this class of travel will normally be business class, but on some routes or parts of routes where there is no business class service, it will be full-fare economy class;
    - (b) actual travel may be undertaken in any class; and
    - (c) the allowance will include a specified amount to cover the cost of ground transportation to a home leave destination that is located outside the metropolitan area of the nearest airport.
- The Board decision does not mention the use of frequent flyer miles or proof of payment.
- Certification — Board-adopted recommendation:
  - Before making application for home leave benefits under a subsequent qualifying period, staff members will be required to submit a certification of travel for all family members for whom payments were received in respect of the preceding period.
- The Board’s certification requirement does not refer to proof of payment or to the use of frequent flyer miles.

### GAO No. 17 (Home Leave), Rev. 9 (May 6, 1999) — key provisions
- GAO No. 17, Rev. 9 provides home leave benefits at two-year intervals to staff members whose regular duty station is outside of the staff member’s home country. (Sections 2.01.10 and 3.01.)
- Home leave benefit components: “an allowance for the costs of transportation and travel of the staff member and qualifying family members to the authorized home leave destination [and] an allowance toward the expenses incurred at the home leave destination,” plus insurance coverage and travel time for certain cases. (Section 1.01.)
- Purpose of home leave: “. . . enable those employees to spend periods of authorized leave with their families in their home countries as a means of maintaining their cultural and personal ties to those countries.” (Section 1.01.)
- Staff responsibilities: ensure home leave travel is undertaken in accordance with Section 7; submit documents required by Section 8 in a timely manner; promptly reimburse any overpayment. (Section 3.03 (iii), (iv), and (v).)
- Section 7.04:
  - “Staff members may arrange home leave travel by any mode of transportation, in any class, and via any route . . . .”
  - “Travel to the home leave destination using a ticket provided under a frequent flyer program, or an airline employee or similar discount program, will not qualify as home leave travel.”
  - “However, frequent flyer awards may be used to upgrade the class of travel on tickets purchased by the staff member.” (Emphasis added.)
- Section 8.02 (post-travel certification and documentation):
  - Upon completion of home leave travel, the staff member must “certif[y] that any payments he or she received from the Fund were used in accordance with this Order” and provide supporting documentation. (Section 8.02.1.)
  - “If the travel between the duty station and the home country involved air transportation only, original airline ticket stubs for each traveler will fulfill these documentation requirements, provided that they do not reflect travel taken under a frequent flyer award program.” (Section 8.02.1(i).) (Emphasis added.)
  - Examples of substitute documentation: travel agency invoices and credit card statements that itemize tickets purchased. (Section 8.02.1(ii).)
- Failure to submit Certification and documentation within required time limits triggers reimbursement obligation under Section 8.03 and potential recovery by payroll deduction or withholding by the Treasurer’s Department.
- Treasurer’s Department responsibilities:
  - Review Certifications of Home Leave Travel and travel documentation to verify accuracy and compliance, audit as appropriate, and seek resolution of discrepancies with staff member. (Section 12.05.)
  - Disbursement and control of home leave funds; may delegate authority for payments, documentation review, and recovery of overpayments. (Section 12.02.)
- Section 12.06: misrepresentation, failure to disclose material facts, failure to report changes in eligibility, or other violations resulting in benefits in excess of entitlement may result in disciplinary action, including dismissal in accordance with GAO No. 33.

### Staff Bulletin No. 99/19 (August 18, 1999) — reward program usage
- Purpose: clarify the Fund’s policy on use of benefits earned through reward programs to pay for Fund business and benefit travel.
- Defines “reward programs” to include coupons, vouchers, points (including frequent flyer miles awarded by hotels, credit cards, or airlines), or other similar reward programs, earned through personal or business-related transactions.
- Policy statement: 
  - “Awards earned through reward programs cannot be used as proof of payment for any portion of business or benefit travel for which the Fund provides either a lump sum allowance or a standard cost entitlement payment.”
  - “While travelers may use such points at their discretion in connection with Fund business or benefits travel, the Fund will not, under any circumstances, accept tickets, coupons, or receipts that are obtained through reward programs as proof of payment or for purposes of reimbursement.”

### Applicant’s home leave benefits and use of BFSFCU Member Rewards Program points
- 2011 home leave:
  - Applicant applied in October 2011 and was paid the home leave benefit for himself and his spouse in the sum of $17,774. (Section B, para 39.)
  - Travel occurred in August 2012; Applicant completed online certification on August 27, 2012.
  - Certification question: “Did you use Frequent Flyer mileage or other award, reward or discount program, which is disallowed by the Home Leave policy, for travel in lieu of payment for this ticket?” Applicant answered “No.” (Tr. 80.)
  - Applicant attached documentation showing acquisition of airline tickets by redeeming 210,704 points under the BFSFCU Member Rewards Program and making a payment of $60. (Para 40.)
  - BFSFCU Member Rewards Program details in record: points at rate of one point per one dollar spent using a BFSFCU-issued credit card; points valid for five years; redeemable for gift cards, merchandise, charities and travel, as well as dining and entertainment; “Points are not transferable [and] are not redeemable for cash . . . .” (Appendix III to Applicant’s submission.)
  - FIN audit concluded Applicant’s 2011 certification had “failed” on January 31, 2013. Applicant was not notified of that audit and its results until the Grievance Committee proceedings; the Fund did not seek recovery until Applicant disclosed his use of BFSFCU points in an exit interview in July 2014. (Para 42.)
- 2013 home leave:
  - Applicant applied in October 2013 and was paid $17,652 for himself and his spouse. Travel took place December 2013 – January 2014; Applicant completed online certification on February 2, 2014. (Para 43.)
  - Applicant attached documentation showing use of 201,718 BFSFCU Member Rewards Program points plus $60 to acquire the airline tickets. (Para 43.)

### Fund’s recovery actions and administrative review
- July 8, 2014 exit interview:
  - FIN advised Applicant his 2013 home leave benefit had failed an audit that day because he had used BFSFCU points. Applicant acknowledged he had likewise used BFSFCU points for 2011 travel. FIN indicated both payments would be disallowed. (Para 44.)
- July 15, 2014 FIN notification:
  - FIN stated it was “unable to accept the BFSFCU rewards program as proof of payment for the 10/4/2013 home leave entitlement.”
  - Notification: “Fund policy requires staff pay for their travel to and from the HL destination. Accordingly, the staff member needs to demonstrate that home leave travel was paid for in its entirety without the use of points from an award program . . . .”
  - FIN also noted the 2011 payment “was also done via the BFSFCU awards program.” (Email from FIN representative to Applicant, July 15, 2014.) (Para 45.)
- Remediation options provided to Applicant (July 15, 2014 communication):
  - (i) 2011 and 2013 home leave payments could be deducted from his separation payment;
  - (ii) he could submit documentation from another trip to the home leave destination for which he had “fully paid”;
  - (iii) he and his spouse could travel again to the home leave destination and submit a certification for that trip prior to his separation date of July 31, 2014. (Para 46.)
- Recovery action taken:
  - Applicant sought administrative review; on October 8, 2014 the total sum $35,426 for both the 2011 and 2013 home leave benefits was deducted from Applicant’s separation payment. (Para 47.)
- Administrative review outcomes:
  - July 17, 2014: Applicant requested review by FIN Division Chief, arguing BFSFCU rewards program is analogous to a cash reward program and not similar to programs referred to in the Home Leave Policy. (Para 48.)
  - July 30, 2014: FIN Division Chief denied review request; stated “purchase of airline tickets for home leave travel using a rewards program is not allowable” and reiterated the three remediation options. (Para 49.)
  - August 26, 2014: Applicant requested review by HRD Director.
  - October 2, 2014: HRD Director denied Applicant’s request, stating he did not agree that purchasing air tickets using BFSFCU Rewards points is authorized under the GAO, and rejected the Applicant’s distinction between frequent flyer programs and other reward programs such as BFSFCU. The HRD Director emphasized the certification requirements’ link to ensuring allowances are used for intended purpose and stated the rule “has been consistently applied.” (Para 50.)

### Key numeric facts and figures
- Dates:
  - Committee meeting: April 13, 1993.
  - Executive Board decision effective: May 1, 1993.
  - GAO No. 17, Rev. 9 date: May 6, 1999.
  - Staff Bulletin No. 99/19 date: August 18, 1999.
  - Applicant applied for 2011 benefit: October 2011; travel August 2012; certification August 27, 2012.
  - FIN audit of 2011 certification: January 31, 2013.
  - Applicant applied for 2013 benefit: October 2013; travel December 2013 – January 2014; certification February 2, 2014.
  - Exit interview and disclosure: July 8, 2014.
  - FIN notification to Applicant: July 15, 2014.
  - Applicant requested FIN review: July 17, 2014; Division Chief decision: July 30, 2014.
  - Applicant requested HRD review: August 26, 2014; HRD decision: October 2, 2014.
  - Deduction from separation payment: October 8, 2014.
- Monetary amounts and points:
  - 2011 home leave benefit paid: $17,774.
  - 2013 home leave benefit paid: $17,652.
  - Total deducted from separation payment: $35,426.
  - 2011 ticket acquisition: 210,704 points + $60.
  - 2013 ticket acquisition: 201,718 points + $60.
  - BFSFCU points accrual rate: one point per one dollar spent; points valid for five years.
- GAO sections referenced precisely: Sections 1.01; 2.01.10; 3.01; 3.03; 7.04; 8.01; 8.02; 8.02.1(i); 8.02.1(ii); 8.02.2; 8.03; 12.02; 12.05; 12.06.
- Tracked citations to record: (Tr. 80); (Tr. 34); (Tr. 35-36, 72-73, 83); (Tr. 39, 82); (Tr. 28, 34, 62).

*Source: International Monetary Fund — internal administrative record and related GAO and Staff Bulletin excerpts.*

### 51. On October 7, 2014, Applicant filed a Grievance with the Fund’s Grievance Committee.

### j2016-5 - 51. On October 7, 2014, Applicant filed a Grievance with the Fund’s Grievance Committee.

### Procedural history and hearing
- On October 7, 2014, Applicant filed a Grievance with the Fund’s Grievance Committee.
- The Fund responded on November 19, 2014 with a “Motion to Dismiss or, in the Alternative, Motion for Summary Judgment” asserting either lack of Grievance Committee jurisdiction over a challenge to the regulation itself or that there was no dispute of material fact that Applicant had used BFSFCU points for home leave travel in violation of Fund rules.
- Applicant opposed the Motion on December 3, 2014; the Fund replied on December 9, 2014.
- A prehearing conference was held November 25, 2014.
- The Grievance Committee determined that material facts were disputed and held an evidentiary hearing on April 28, 2015, at which Applicant and an official of FIN testified; parties filed post-hearing submissions.

### Grievance Committee findings and recommendations
- The Grievance Committee concluded that the “GAO and Staff Bulletin, in word and intent, state that a staff member who uses credit card reward points to purchase airline tickets (such as was done with the BFSFCU credit card reward program) cannot obtain reimbursement under GAO No. 17.” (Grievance Committee Report and Recommendation, pp. 23-24.)
- The Grievance Committee rejected the argument that explanations on the HR Web of the home leave travel requirements were inconsistent with the GAO and Staff Bulletin. (Id., p. 24.)
- For the 2011 home leave benefit:
  - The Committee sustained the Fund’s position that Applicant’s use of BFSFCU points in connection with the 2011 home leave benefit disqualified his home leave travel.
  - It recommended that the sum deducted from his separation benefit for that allowance be retained by the Fund.
- For the 2013 home leave benefit:
  - The Committee recommended that the Fund repay Applicant the amount deducted from his separation payment.
  - It found that the Fund had failed to give Applicant timely notice that he had not met the applicable requirements in respect of the 2011 benefit, thereby denying him the opportunity to avert repeating the practice in 2013.
  - The Committee stated the Fund “. . . failed to satisfy its obligation under [GAO No. 17,] Section 12.05 to discuss and attempt to correct the situation with Grievant. While it may be that the problem with the 2011 certification could not be resolved, there can be no doubt that notification to Grievant would have deterred him from using the same method of purchase for his 2013 entitlement.” (Id., p. 29.)
  - The Committee concluded that the “Fund should be held accountable when it disregards an obligation imposed on it by a GAO and when this action causes a foreseeable adverse impact on a staff member.” (Id., p. 30.)
  - It recommended that the monies deducted from Applicant’s separation payment in respect of the 2013 home leave benefit should be returned to him while the 2011 benefit should be retained by the Fund. (Id., p. 31.)

### Fund Management decision and remedy
- On November 5, 2015, Fund Management notified Applicant that it had accepted the Grievance Committee’s recommendation that the Grievance be denied in part and sustained in part.
- In accordance with that recommendation, the Fund paid Applicant the sum of $17,652 to reimburse him for the 2013 home leave benefit that had been deducted from his separation payment.
- On December 9, 2015, Applicant filed his Application with the Administrative Tribunal, contesting the Fund’s retention of the 2011 benefit.

### Parties’ principal contentions — Applicant
- Applicant’s principal contentions in Application and Reply include:
  1. GAO No. 17, Rev. 9, Section 7.04, which states that “travel to the home leave destination using a ticket provided under a frequent flyer program, or an airline employee or similar discount program, will not qualify as home leave travel,” did not preclude Applicant’s use of BFSFCU points for payment of home leave travel.
  2. The legislative history of the Fund’s home leave policy supports the conclusion that Fund policy does not prohibit use of BFSFCU points to acquire home leave airline tickets.
  3. Disallowing frequent flyer miles has an obvious rationale in the home leave context, i.e., avoiding double-dipping; by contrast, no Fund assets need to be safeguarded by a wholesale disallowance of all reward programs.
  4. The Fund’s practices, as well as information on the HRD website relating to certification of home leave travel, are not consistent with the text and logic of GAO No. 17, Rev. 9.
  5. Staff Bulletin No. 99/19 (Usage of Points Earned from Airline, Credit Card, Hotel, and Other Similar Reward Programs) (August 18, 1999) should be interpreted in the light of GAO No. 17, Rev. 9. The Administration Department is not authorized to implement a substantive policy change relative to the GAO without endorsement by a Management Directive.
  6. Applicant read and interpreted the governing rule correctly and his answer to the certification question was faithful and accurate. Applicant has met all the requirements of GAO No. 17, Rev. 9, Sections 7.04 and 8.02.
  7. Contrary to GAO No. 17, Rev. 9, Section 12.05, the Fund failed to inform Applicant that his certification for the 2011 home leave benefit had failed an audit of January 31, 2013; this failure caused Applicant a foreseeable adverse impact because, at the time of the audit, there was flexibility to “replay” the benefit for 2011.
  8. The Fund deliberately disregarded Applicant’s rights and interests by concealing from him a material fact during the administrative review and adopting an “excessively adversary undertone” in the Grievance Committee proceedings.
  9. Relief sought:
     - rescission of the decision to deduct from his separation payment the 2011 allowance paid for home leave travel;
     - return of the monies collected; and
     - monetary compensation for moral damage.

### Parties’ principal contentions — Respondent (Fund)
- Respondent’s principal contentions in Answer and Rejoinder include:
  1. The Fund was authorized to recover the 2011 and 2013 home leave benefits that it had previously paid to Applicant.
  2. The Fund’s policy is explicit in disallowing the use of all types of points or rewards earned through awards programs, including those earned through credit card reward programs such as the BFSFCU Member Rewards Program points used by Applicant, to pay for home leave travel.
  3. GAO No. 17, Rev. 9, and Staff Bulletin No. 99/19 are intended to be read together and collectively establish the Fund’s rules governing payment for home leave travel.
  4. The Fund’s rules prohibiting the use of credit card reward programs are consistent with the revised home leave policy adopted by the Executive Board and were properly promulgated.
  5. The Fund’s policy prohibiting use of credit card reward programs in the acquisition of home leave airline tickets is rationally related to the underlying purposes of the home leave benefit.
  6. The post-travel certification form that Applicant completed made the applicable rule amply clear. Applicant wrongfully certified that he did not use “frequent flyer mileage or other award, reward or discount program” in lieu of payment. Having violated the governing rules, Applicant should not be permitted to retain the home leave benefits for 2011 and 2013.
  7. Applicant’s claim for compensation for “moral damage” should be denied. The Fund did not conceal any evidence from Applicant and has been “courteous and respectful” of Applicant in the review process.

### Relevant provisions of GAO No. 17 (Home Leave), Rev. 9 (May 6, 1999) cited as governing law
- Section 1.01: Purpose — home leave benefits include an allowance for the costs of transportation and travel, an allowance toward expenses at the home leave destination, coverage under the Fund's Travel Accident and Personal Effects Insurance policy, and travel time for staff members who take home leave during periods of accrued annual leave.
- Section 2 definitions include:
  - 2.01.10 "Entitlement Period" means a period of two years of full-time, qualifying Fund service (or, in the case of part-time service, a proportionally longer period under GAO No. 32) calculated in accordance with Section 3.04.
  - 2.01.11 "Entitlement Date" means the day following a staff member's completion of a period of service with the Fund after which he or she becomes eligible for, or entitled to, home leave benefits under this Order, i.e., the day after completion of the staff member’s entitlement period.
- Section 3.01: Eligibility requirements for staff members (regular or fixed-term appointments of at least two years, duty station outside home country, not citizen or permanent resident of duty station country, etc.).
- Section 3.03: Responsibilities of the Staff Member include providing current and accurate information, notifying Staff Benefits Division of changes, ensuring compliance with Section 7 travel requirements, submitting documents required by Section 8, and reimbursing any overpayment.
- Section 5.01–5.02.1: Home leave benefits description and Transportation Allowance (Airfare) calculation based on the cost of one round-trip, adult airfare using the lowest fare available for one class below first class, by the most direct and usually traveled route, and other enumerated factors.
- Section 7.01–7.04: Home leave travel requirements include travel period rules (7.01.1 and 7.01.2), minimum stay of seven days (7.02), point of origin requirement (7.03), and mode of transportation/class/route (7.04) which expressly states that “travel to the home leave destination using a ticket provided under a frequent flyer program, or an airline employee or similar discount program, will not qualify as home leave travel,” while frequent flyer awards may be used to upgrade class on tickets purchased by the staff member.
- Section 8.01–8.02.2: Application and post-travel documentation requirements, including submission of a Certification of Home Leave Travel and supporting documentation (airline ticket stubs or other independently verifiable documentation) within the time limits; failure to submit triggers reimbursement obligations and may block subsequent Applications until documentation or reimbursement is provided.

*Source: Grievance Committee Report and Administrative Tribunal filings.*

### 8.03 Reimbursement by Staff Member. If a staff

### j2016-5 - 8.03 Reimbursement by Staff Member. If a staff

### Reimbursement obligation and procedures (Section 8.03)
- If a staff member does not submit the certification and documentation required under this Section for a traveler within the required time period, then he or she shall reimburse the Fund for any home leave benefits received for each such traveler.
- Reimbursement must be made in full, by a single payment, within four weeks of notification by the Treasurer's Department of the amount due.
- If full reimbursement is not made in a timely manner, the Treasurer's Department may recover the amount due the Fund by payroll deduction or withholding from monies payable by the Fund to the staff member.
- After consultation with the Director of Administration, the Treasurer may also impose an interest charge on the balance due.
- Full reimbursement may be waived by the Fund, or partial reimbursement only required, in cases where a traveler did not complete the round-trip journey because the traveler chose to remain in the home country.
- Reimbursement shall not be required where a traveler died after the staff member received home leave benefits to the extent that a full refund cannot be obtained for home leave expenses previously incurred.

### Treasurer’s responsibilities and control of funds (Section 12.02, 12.05)
- The Treasurer of the Fund is responsible for disbursement and control of home leave funds and may delegate within the Treasurer's Department authority for:
  - (i) making payment to staff members of the appropriate amount upon receipt of Applications for Home Leave Benefits approved by the Administration Department;
  - (ii) determining, through review of the documentation submitted by staff members after each home leave trip, whether the home leave benefits were used in accordance with the provisions of this Order; and
  - (iii) recovering any overpayment in accordance with the provisions of this Order.
- The Treasurer's Department will review Certifications of Home Leave Travel submitted by staff members together with travel documentation in order to verify their accuracy and compliance with the provisions of this Order, and will audit such Certifications and travel documentation as may be appropriate.
- If discrepancies are found between certified statements and supporting documentation, the staff member’s Application for Home Leave Benefits or the requirements of this Order, the Treasurer's Department shall seek to resolve such discrepancies with the staff member, e.g., through submission of additional travel documentation.
- If, for any reason, the staff member fails to submit on a timely basis the Certification of Home Leave Travel, together with either airline ticket stubs or other travel documentation required by subsection 8.02, he or she shall reimburse the Fund for home leave benefits as required by subsection 8.03.

### Disciplinary measures (Section 12.06)
- Any misrepresentation, failure to make full disclosure of any material fact, failure to report changes in eligibility or qualification, or other violation of the provisions of this Order which results in a staff member obtaining benefits in excess of entitlement may be referred by the Treasurer of the Fund to the Director of Administration for appropriate action.
- Such violations may result in disciplinary action, including dismissal, in accordance with GAO No. 33.

### Staff Bulletin No. 99/19 — scope and effect (August 18, 1999)
- The bulletin “clarifies the Fund’s policy on the use of benefits earned through reward programs to pay for Fund business or benefit travel.”
- The term "reward programs" includes coupons, vouchers, points (including frequent flyer miles awarded by hotels, credit cards, or airlines), or other similar reward programs, and applies to awards earned through either personal or business-related transactions.
- Awards earned through reward programs cannot be used as proof of payment for any portion of business or benefit travel for which the Fund provides either a lump sum allowance or a standard cost entitlement payment.
- While travelers may use such points at their discretion in connection with Fund business or benefits travel, the Fund will not, under any circumstances, accept tickets, coupons, or receipts that are obtained through reward programs as proof of payment or for purposes of reimbursement.

### Issues raised in the Application and Tribunal's interpretive approach (paras. 61–71)
- Issues presented include whether the Fund erred in interpreting the home leave policy to prohibit use of BFSFCU Member Rewards Program points to acquire home leave airline tickets; whether the policy is arbitrary; whether recovery was vitiated by failure to afford a timely opportunity to remedy non-compliance; and whether administrative or Grievance Committee processes caused compensable injury.
- Applicant’s contentions:
  - GAO No. 17, Rev. 9, Section 7.04 (stating that “travel to the home leave destination using a ticket provided under a frequent flyer program, or an airline employee or similar discount program, will not qualify as home leave travel”) did not preclude use of BFSFCU points because BFSFCU is not a “frequent flyer program” or an “airline employee or similar discount program.”
  - The punctuation and text of Section 7.04 and Section 8.02.1(i)/(ii) support a narrower reading that permits use of rewards converted to cash or credit card balance.
  - Legislative history and Executive Board discussions focused on frequent flyer programs and did not indicate a broad prohibition of all reward programs.
  - Staff Bulletin No. 99/19 should be narrowly read in light of GAO No. 17.
  - Administration Department lacked authority to implement a substantive policy change absent a Management Directive.
- Respondent’s position:
  - GAO No. 17, Rev. 9 and Staff Bulletin No. 99/19 are intended to be read together; Staff Bulletin No. 99/19 “clarifies” and casts a wide net to cover the evolving universe of loyalty and discount programs.
- Tribunal’s interpretive conclusion:
  - GAO No. 17, Rev. 9 and Staff Bulletin No. 99/19 can reasonably be read to be consistent with one another.
  - The Fund did not err in interpreting the home leave policy to prohibit Applicant’s use of BFSFCU Member Rewards Program points to acquire home leave airline tickets.

### Applicant’s challenge to the policy’s rationality and Tribunal’s standard of review (paras. 72–80)
- Applicant’s challenge shifts from interpretation to asserting that the rule itself is arbitrary for:
  - Drawing an unsupportable distinction between credit card rewards points and cash payments for home leave airline tickets; or
  - Improperly categorizing credit card rewards together with frequent flyer miles.
- Tribunal frames this as a challenge to a “regulatory decision” within Article II, Section 2(b) of the Tribunal’s Statute.
- Respondent’s defense of policy rationality:
  - The prohibition on credit card reward programs is rationally related to home leave policy purposes and within managerial discretion to operationalize Board-adopted policies.
  - The rule sought to ensure the home leave benefit was “targeted,” that the cash payment provided by the Fund was demonstrably used for home leave travel, and to avoid aggravating “unevenness in the way the benefit applies from case to case” by permitting supplementation with points and rewards.
- Tribunal’s standard and deference:
  - Deference to the Fund’s decision-making authority is highest when reviewing regulatory decisions, especially policy decisions taken by the Executive Board.
  - Management enjoys managerial and administrative discretion subject only to limited review by the Tribunal.
  - Changes to policy must be “based on a proper consideration of relevant facts” and “reasonably related to the objective which they are intended to achieve,” and must not “discriminate in an unjustifiable manner between individuals or groups within the staff” (de Merode standard as summarized in cited precedents).

*Source: IMF Administrative Tribunal content unit j2016-5 (excerpts from GAO No. 17, Rev. 9, Staff Bulletin No. 99/19, and Tribunal deliberations).*

### 81. Applicant argues, in effect, that the home leave policy does not bear a rational

### j2016-5 - 81. Applicant argues, in effect, that the home leave policy does not bear a rational

### Objectives of the redesigned home leave policy
- Fundamental goal: “. . . enable [expatriate staff members] to spend periods of authorized leave with their families in their home countries as a means of maintaining their cultural and personal ties to those countries.” (GAO No. 17, Rev. 9, Section 1.01.)
- Administrative objective: introduce “considerable administrative simplicity” (1993 staff paper) compared with prior system where tickets were purchased by the Fund.
- Equity/relations objective: avoid fostering tensions between U.S. and expatriate staff members; ensure the home leave travel benefit is “proportionate to the disadvantages which expatriate staff encounter.” (Minutes of Executive Board Committee on Administrative Policies, summarized at para. 23.)

### Core elements of the implemented policy (GAO No. 17, Rev. 9, Section 7.04; Staff Bulletin No. 99/19)
- Frequency and basis of benefit:
  - Expatriate staff members are provided every second year with a cash benefit calculated on the basis of the cost of business class airfare to their home countries for the staff members and their qualifying family members.
- Requirement to arrange travel personally:
  - Staff members must make their own travel arrangements.
- Prohibition on reward/award programs as proof of payment:
  - “travel to the home leave destination using a ticket provided under a frequent flyer program, or an airline employee program or similar discount program, will not qualify as home leave travel.” (GAO No. 17, Rev. 9, Section 7.04.)
  - Staff Bulletin No. 99/19: “[a]wards earned through reward programs cannot be used as proof of payment for any portion of business or benefit travel for which the Fund provides either a lump sum payment or a standard cost entitlement payment.”
- Certification and documentation:
  - After home leave, staff must certify travel to their home country and produce documentation such as airline ticket stubs for each family member, and certify that payments “were used in accordance with” GAO No. 17.

### Tribunal analysis: rational relationship between rule and objectives
- Finding: The home leave policy “clearly furthers the objective of encouraging expatriate staff members to spend periods of leave in their home countries.”
- On administrative simplicity: Applicant did not contest achievement of this purpose; Tribunal did not address further.
- On proportionality/fairness:
  - Rationale for prohibition: prevent staff from receiving a cash home leave benefit while purchasing air tickets using frequent flyer miles or other reward program awards, which could create a “disproportionate benefit,” especially for staff who travel on Fund business.
  - Legislative history also reflects a broader concern for fairness: seek to ensure home leave travel is “. . . not financed by sources other than the cash provided by the Fund” (1992 staff paper).
- Exception noted:
  - Policy permits use of frequent flyer miles to upgrade class of travel; Tribunal finds this is an additional, non-disproportionate benefit and does not undermine the rational connection to Fund objectives.
- Legal standard applied:
  - A “perfect fit” is not required; the Fund’s policy-making discretion “extends to making choices among reasonable alternatives.” The policy prohibiting use of BFSFCU points for acquisition of home leave airline tickets is declared rationally related to Fund objectives.

### Procedural issue: audit, notice, and remediation (GAO No. 17, Rev. 9, Section 12.05)
- Section 12.05 excerpt: if discrepancies exist, “the Treasurer’s Department shall seek to resolve such discrepancies with the staff member, e.g., through the submission of additional travel documentation.” (Emphasis added.)
- Chronology and facts:
  - August 27, 2012: Applicant submitted required online certification for 2011 home leave, attaching documentation showing airline tickets were acquired by redeeming BFSFCU Member Rewards Program points.
  - January 31, 2013: FIN audit concluded Applicant’s 2011 certification had “failed.”
  - Fund did not notify Applicant of the audit result until July 15, 2014.
  - July 15, 2014 (two weeks before Applicant’s separation date of July 31, 2014): Applicant was told he had three remediation options:
    - (i) deduct the 2011 and 2013 home leave payments from his separation payment;
    - (ii) submit documentation from another trip to the home leave destination for which he had “fully paid”;
    - (iii) repeat travel to the home leave destination and submit certification prior to separation.
- FIN practice testified:
  - Every certification is audited; FIN attempts to complete audits within a year of submission.
  - When an audit fails FIN “. . . will essentially advise the staff member that we’ve audited their submission, that the submission has failed and what we found as the problem with the submission,” and will suggest remedial measures including “[f]orms of documentation that may be satisfactory, missing documentation, repeating travel or repaying the Fund.”

### Tribunal findings on notice failure and recovery of 2011 benefit
- Tribunal conclusions:
  - Fund failed to notify Applicant in a timely manner that certification for 2011 had failed (Fund had notice on January 31, 2013 but did not communicate until July 15, 2014).
  - This failure deprived Applicant of a realistic opportunity to remedy non-compliance (noting home leave travel may be taken up to four years after the entitlement date and that Applicant did not conceal his use of BFSFCU points).
  - Applicant’s certification was made in good faith; nearly two years elapsed between certification and notification.
- Outcome:
  - Tribunal sustains Applicant’s complaint that the decision to recover the amount of his 2011 home leave benefit was vitiated by the Fund’s failure to notify and afford timely opportunity to remediate.
  - The decision to recover the 2011 home leave benefit must be rescinded and the associated sum deducted from his separation payment returned to him.
  - The Fund repaid Applicant the sum recovered for his 2013 home leave benefit in accordance with the Grievance Committee recommendation.

### Claims for compensation for procedural conduct and moral harm
- Applicant’s two bases for compensation:
  - Allegation that Fund deliberately withheld audit information during administrative review, causing compensable harm.
  - Alleged improper, adversarial conduct by Fund and its legal representatives during administrative review and Grievance Committee proceedings, causing “significant inconvenience and psychological stress.”
- Tribunal analysis and conclusions:
  - No evidence beyond Applicant’s assertion to establish willful withholding during the departmental administrative review; Tribunal cannot sustain claim of purposeful concealment.
  - Tribunal emphasizes the fundamental right to seek review through established channels and the Fund’s prerogative to assert defenses; parties should act with courtesy and respect in proceedings.
  - Acknowledges adversarial proceedings can be uncomfortable and stressful, but does not find compensable injury established on the record.

*Source: j2016-5, International Monetary Fund Administrative Tribunal decision.*

### 107. The Tribunal has considered the record of the proceedings before the Grievance

### The Tribunal has considered the record of the proceedings before the Grievance

### Tribunal findings on merits and procedural claims
- The Tribunal concluded that Applicant has not demonstrated any basis for his claim for moral harm; this claim is denied.
- The Tribunal found that Applicant has not shown that the Fund erred in interpreting the home leave policy to prohibit use of BFSFCU Member Rewards Program points to acquire home leave airline tickets. The Tribunal characterized that interpretation as a reasonable reading of GAO No. 17, Rev. 9, as read together with Staff Bulletin No. 99/19.
- The Tribunal found that Applicant did not establish that the governing policy itself was arbitrary.
- The Tribunal found that Applicant did not show that the Fund caused compensable injury in its conduct of the administrative review and Grievance Committee processes.
- The Tribunal did find in Applicant’s favor on a procedural ground: the Fund failed to afford him timely notice of the rejection of his 2011 home leave certification and failed to afford an effective opportunity to remedy his non-compliance with the home leave policy. On that ground, the Tribunal sustained Applicant’s complaint.

### Remedies and remedial authority
- The Applicant sought:
  - (a) rescission of the decision to deduct from his separation payment the 2011 allowance paid for home leave travel;
  - (b) return of the monies collected; and
  - (c) monetary compensation for moral damage.
- The Tribunal invoked its remedial authority under Article XIV, Section 1, of the Statute, which provides that if the Tribunal concludes an application challenging the legality of an individual decision is well-founded, it shall prescribe the rescission of such decision and all other measures, whether involving the payment of money or otherwise, required to correct the effects of that decision.
- The Tribunal’s jurisprudence identifies three broad categories of remedial powers:
  - rescission of the contested decision with measures to correct effects through monetary compensation or specific performance;
  - compensation for procedural failure in the taking of a sustainable decision;
  - compensation to correct effects of intangible injury where there may be no decision to rescind.

### Specific remedial order
- Because the Tribunal sustained Applicant’s complaint on the procedural ground described above, the Tribunal:
  - rescinded the Fund’s decision to recover the home leave benefit paid to Applicant in 2011; and
  - ordered payment to Applicant of the amount deducted from his separation payment, i.e., $17,774, to correct the effects of that decision.

### Formal decision (summary of operative paragraphs)
- The Administrative Tribunal of the International Monetary Fund unanimously decides:
  1. Mr. Verreydt’s contention that the Fund erred in interpreting the home leave policy to prohibit his use of BFSFCU Member Rewards Program points to acquire home leave airline tickets is not sustained.
  2. Mr. Verreydt’s contention that the home leave policy was arbitrary in prohibiting the use of BFSFCU Member Rewards Program points to acquire home leave airline tickets is not sustained.
  3. Mr. Verreydt’s contention that the Fund caused him compensable injury in the conduct of the administrative review and Grievance Committee processes in his case is not sustained.
  4. Mr. Verreydt is entitled to relief on the ground that the Fund failed to afford him timely notice of the rejection of his 2011 home leave certification and an effective opportunity to remedy his non-compliance with the home leave policy.
  5. Accordingly:
     - (a) the decision to deduct from Mr. Verreydt’s separation payment the amount of his 2011 home leave benefit is rescinded; and
     - (b) the Fund shall pay Mr. Verreydt the sum of $17,774 to correct the effects of that decision.

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_Source: https://www.imf.org/-/media/files/imfat/j2016-5.pdf_