[Comments on Former Navy Member's Request for Waiver of Debt]

B-248957, November 4, 1992

MILITARY PERSONNEL Pay Retirement pay Overpayments Error detection Debt collection Waiver A military member who was indebted to the government due to an excess leave payment and an overpayment at separation cannot be granted waiver as to the excess leave payment, since a member is held accountable for knowledge of his or her leave balance and for notifying the proper authorities of any inaccuracies. Interest properly accrued on this debt because he did not pay it within 30 days of receiving notice and did not request waiver for over a year after receiving notice. However, the Claims Group properly granted waiver as to the overpayment at separation because the member had no knowledge of the overpayment.

Dear Mr.                :

This is in response to your appeal of Claims Group settlement Z-2915365, dated April 22, 1992, which granted in part and denied in part your request for a waiver of a debt you owe to the Navy. That settlement is affirmed.

The record indicates that early in 1988 you took leave in excess of your entitlement and incurred a debt in the adjusted amount of $2,157.62. Of this amount $744.45 was remitted by the Navy and you paid $581.34, leaving a balance of $831.83.

At the time of your separation you were also overpaid in the amount of $572.67. Combining this overpayment with the balance of $831.83 remaining from your excessive use of leave brought your total debt to $1,404.50 as of late 1989. The Navy contacted you shortly thereafter to inform you of this debt. The Navy's letter informed you that interest accrues on debts owed to the government.

By the time that the Internal Revenue Service turned the refund from your 1990 joint income tax return over to the Navy in March 1991, the amount of your debt had increased to $1,598.17 reflecting the accrual of interest. When your refund of $836.57 was applied to your debt, the amount you owed was reduced to charges and interest, bringing the total to $772.48 as of April 1991. However, we note that in October 1991 the Navy returned $260.00 to you, apparently the amount of your wife's portion of the income tax refund. As a result, your debt increased by that amount to $1032.48 plus accrued interest. In April 1991 you requested waiver from this Office, and on April 22, 1992, the Claims Group issued a settlement which granted waiver of the $572.67 overpayment of pay and denied waiver of the $831.83 for excess leave. In response, the Navy reduced your debt in July 1992 by $572.67 plus the accrued interest on that amount, bringing your debt to under $450. We have been informally advised by the Navy that as of August 30, 1992, the amount of your debt was $461.94. However, that amount is subject to increase as additional interest accrues.

Since it is well settled that a member is expected to know his correct leave balance, the Claims Group was correct in denying waiver of that portion of your debt which arose due to your taking excess leave. We have contacted the Navy with regard to the accrual of interest on your debt and are satisfied that the debt was handled in accordance with Department of Defense Instruction 7045.18, March 13, 1985, and applicable Navy regulations on debt collection.

We find no error of law or fact in the Claims Group's settlement, which is therefore affirmed. You remain obligated to pay your debt to the Navy of $461.94 plus interest accrued since August 1992.

Sincerely yours,

James F. Hinchman General Counsel B-248957--               --Waiver Request

Facts:

This is in response to an appeal by Mr.                 of a Claims Group settlement which granted in part and denied in part his waiver request. That settlement is affirmed.

In 1988 Mr.                 took leave in excess of his entitlement. The resulting debt was adjusted to $2,157.62, of which the Navy remitted $744.45, and he paid $581.34, leaving a balance of $831.83. When he was separated from the Navy in June 1989, he was erroneously told that he did not owe a debt on account of the excess leave payment. At separation he was also overpaid in the amount of $572.67. Late in 1989 the Navy informed him of his debt, which at that time, due to adjustment, amounted to $1,404.50. This amount thereafter began to accrue interest.

By March 1991 when the Internal Revenue Service turned Mr. and Mrs.                ' income tax refund of $836.57 over to the Navy, his debt had increased to $1,598.17 due to the accrual of interest. His debt was reduced by the amount of the refund. However, the Navy later returned to Mr.                 from his income tax refund the amount of $260.00, which apparently represented Mrs.                ' portion of the refund.

In April 1991 he requested waiver of his debt, and in April 1992 the Claims Group issued its settlement, which granted waiver of $572.67 and denied waiver of $831.83. The Navy reduced Mr.                ' debt by $572.67 plus the amount of interest that had accrued on that amount. His debt, which as of August 30, 1992, was $461.94, continues to accrue interest.

Law:

1) Under 10 U.S.C. Sec. 2774, the Comptroller General may waive a claim arising from an erroneous payment of pay and allowances made to a member of the uniformed services if collection would be against equity and good conscience and not in the best interest of the United States.

2) Department of Defense (DOD) Instruction 7045.18, March 13, 1985, sets forth procedures for the collection of debts from current and former military members and civilian employees of DOD. It provides that interest is payable on debts owed to the government if payment is not made within 30 days after notice is given. Collection is suspended if the debtor requests waiver within 30 days of receiving notice.

3) In George S. Winfield, 66 Comp.Gen. 124 (1986), we denied waiver of an excess leave payment to a former member who took excess leave in reliance on the incorrect leave balance on his leave a should have been aware of his correct leave entitlement and questioned the accuracy of the statement. We instructed the service, however, to rescind interest charges improperly assessed due to lack of notice.

Findings:

Waiver of Mr.                ' separation overpayment was proper since he had no way of knowing that the payment was incorrect. Denial of waiver of his excess leave payment was proper because he should have been aware of his leave entitlement and should have questioned any inaccuracies. See 66 Comp.Gen. 124, supra.

Interest properly accrued on Mr.                ' debt. He had notice of the debt soon after the Navy computed the total owed. Since he did not request waiver for more than a year after he had notice of the debt, the Navy was not obligated to suspend the accrual of interest after the request was made but properly deducted accrued interest on the amount waived.

Conclusions:

Mr.                ' waiver request is granted in part and denied in part. His debt has properly accrued interest. The Claims Group's settlement is affirmed.

Date:

To: Director, Claims Group (GGD)--Sharon S. Green

From: General Counsel--James F. Hinchman

Subject:                --Waiver Request--Z-2915365 (B-248957)

Attached is your file Z-2915365, along with a copy of our letter to Mr.                , of today's date, in which we affirm your settlement which granted in part and denied in part his waiver request.