Request for Waiver of Debt

A member of the Navy requested reconsideration of the denial of his application for waiver of his debt to the United States. The member had a $60 allotment payable to his mother, which he reduced to $40 per month. Through administrative error, allotment payments were made for $400 per month for 7 months, while deductions from his pay were made at a rate of $40 per month. In this appeal, the member contended that he has made payments on the debt for 5 years and the remaining amount should be waived to relieve further hardship. Legislation provides GAO with authority to waive certain debts when collection would be against equity and good conscience and not in the best interests of the United States. However, waiver is precluded if, in the opinion of the Comptroller General, there exists an indication of fraud, misrepresentation, fault, or lack of good faith on the part of the member. Fault has been interpreted to include something more than a proven overt act or omission by the member, and is considered to exist if it is determined that the member should have known that an error existed and should have taken action to have it corrected. In this case, the record showed that the member's leave and earnings statements reflected payment of the $400 allotment. The member's mother did not notify officials of the large increase in her allotment, and failed to answer correspondence regarding it when the error was discovered. Therefore, the member and his mother were or should have been aware of the erroneous overpayments. He should have known that he would eventually be required to repay the erroneous amounts, and should have inquired about the payments and set aside the excessive amounts until a definite determination and statement had been made to him fully explaining his entitlement. The fact that the payments arose from administrative error does not relieve an individual of the responsibility to determine the truth of the matter. It is fundamental that persons receiving money erroneously paid by a Government agency acquire no right to the money and are bound in equity and good conscience to make restitution. Accordingly, the action denying the waiver was sustained.