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UNAT held that UNRWA DT committed an error of fact in stating that the OPT Allowance was paid in local currency, which led UNRWA DT to commit an error of law in stating that Area Staff Circular No. A/04/2014 was applicable. UNAT held that Area Staff Circular No. A/04/2014 was only applicable to the Jerusalem Allowance and not the OPT Allowance, which was paid in US Dollars. UNAT held that such an error of law would be inconsequential if its second line of reasoning, that no rule or policy requires the CAF be applied to the OPT Allowance, was correct. UNAT held that there was no rule requiring the application of the CAF to the OPT Allowance. However, UNAT held that the UNRWA Commissioner-General was not prevented from applying the CAF and it lay in his discretion as to whether to apply the CAF to allowances. Noting that the Commissioner-General applied the CAF to several other allowances, UNAT held that without knowing an articulated reason for the Commissioner-General’s decision it was unable to assess whether such a decision was arbitrary, capricious, or unlawful. UNAT remanded the case to UNRWA DT to review the Commissioner-General’s reasons for the decision not to apply the CAF to the OPT Allowance and determine whether his decision constituted a lawful exercise of his discretion.