B-158170, JAN. 11, 1966

B-158170: Jan 11, 1966

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FROM THE INFORMATION SUBMITTED IT APPEARS THAT OVERPAYMENTS RANGING FROM $65 TO $80 WERE MADE TO EACH OF EIGHT EMPLOYEES AS THE RESULT OF A MISINTERPRETATION OF THE RETROACTIVE PROVISION OF SECTION 102 OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964. IN THE MEMORANDUM OF THE GENERAL COUNSEL ACCOMPANYING YOUR LETTER IT IS POINTED OUT THAT RECOVERY OF THE OVERPAYMENTS IS REQUIRED BY LAW AND THAT THE DEPARTMENT HAS NO AUTHORITY TO WAIVE REFUND. IT ALSO IS STATED THAT THE PAYMENTS WERE MADE IN GOOD FAITH. THAT COLLECTION THEREOF WILL CAUSE HARDSHIP TO THE EMPLOYEES AND IN VIEW THEREOF WAIVER OF THE REQUIREMENT OF REFUND OF THE OVERPAYMENTS IS REQUESTED. WHILE ON OCCASIONS WE HAVE HELD THAT REFUNDS OF OVERPAYMENTS WERE NOT REQUIRED SUCH ACTION USUALLY PERTAINED TO MATTERS ARISING FROM CONFUSION AS TO THE ISSUANCE.

B-158170, JAN. 11, 1966

TO THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE:

THIS REFERS TO YOUR LETTER OF DECEMBER 10, 1965, AND ENCLOSURE, REQUESTING THAT WE WAIVE RECOVERY OF SALARY OVERPAYMENTS MADE BY THE PHILADELPHIA PAYMENT CENTER TO CERTAIN EMPLOYEES OF THE SOCIAL SECURITY ADMINISTRATION.

FROM THE INFORMATION SUBMITTED IT APPEARS THAT OVERPAYMENTS RANGING FROM $65 TO $80 WERE MADE TO EACH OF EIGHT EMPLOYEES AS THE RESULT OF A MISINTERPRETATION OF THE RETROACTIVE PROVISION OF SECTION 102 OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964, PUB.L. 88-426, APPROVED AUGUST 14, 1964. IT ALSO APPEARS THAT THE PAYMENT CENTER, AFTER HAVING PROPERLY INTERPRETED AND APPLIED THE ACT, INQUIRED BY TELEPHONE FROM ITS HEADQUARTERS CONCERNING THE MATTER AND RECEIVED ORAL ADVICE INTENDED FOR APPLICATION WITH RESPECT TO EMPLOYEES WHO HAD BEEN PROMOTED BETWEEN THE EFFECTIVE DATE AND THE DATE OF ENACTMENT OF THE ACT. THEREAFTER, ON SEPTEMBER 17, THE PAYMENT CENTER ISSUED A "CORRECTION ORDER" BY WHICH IT INCORRECTLY APPLIED THE ORAL ADVICE TO THE EIGHT EMPLOYEES HERE CONCERNED WHO ACTUALLY HAD BEEN DEMOTED RATHER THAN PROMOTED DURING THE PERIOD INVOLVED. SUCH ACTION RESULTED IN THE SUBJECT OVERPAYMENTS.

IN THE MEMORANDUM OF THE GENERAL COUNSEL ACCOMPANYING YOUR LETTER IT IS POINTED OUT THAT RECOVERY OF THE OVERPAYMENTS IS REQUIRED BY LAW AND THAT THE DEPARTMENT HAS NO AUTHORITY TO WAIVE REFUND. IT ALSO IS STATED THAT THE PAYMENTS WERE MADE IN GOOD FAITH, THAT COLLECTION THEREOF WILL CAUSE HARDSHIP TO THE EMPLOYEES AND IN VIEW THEREOF WAIVER OF THE REQUIREMENT OF REFUND OF THE OVERPAYMENTS IS REQUESTED.

WHILE ON OCCASIONS WE HAVE HELD THAT REFUNDS OF OVERPAYMENTS WERE NOT REQUIRED SUCH ACTION USUALLY PERTAINED TO MATTERS ARISING FROM CONFUSION AS TO THE ISSUANCE, RECEIPT AND INTERPRETATION OF AMBIGUOUS REGULATIONS ISSUED PURSUANT TO LAW OR IN OTHER CASES WHEREIN THE COSTS OF RECOVERY WERE NOT COMMENSURATE WITH THE AMOUNTS TO BE RECOVERED. THE RULE APPLIED IN OUR DECISION OF SEPTEMBER 24, 1964, B-155068, 44 COMP. GEN. 171, REFERRED TO BY YOUR GENERAL COUNSEL, HAD BEEN IN EFFECT FOR MANY YEARS. SEE 31 COMP. GEN. 166. SINCE WE ARE ALSO WITHOUT WAIVER AUTHORITY WHICH WOULD BE APPLICABLE HERE WE ARE UNABLE TO COMPLY WITH YOUR REQUEST. COURSE, THE OVERPAYMENTS MAY BE COLLECTED BY INSTALLMENTS. SEE 5 U.S.C. 46 (D).