B-158847, MAY 26, 1966

B-158847: May 26, 1966

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CONCERNING THE OVERPAYMENTS OF COMPENSATION WHICH WERE MADE TO YOU AS AN EMPLOYEE OF THE DEPARTMENT OF THE ARMY. THOSE ACTIONS WERE NECESSARY BECAUSE ON THE EFFECTIVE DATE OF THE CLASSIFICATION ACT AMENDMENTS OF 1962. - YOUR RATE OF COMPENSATION WAS ERRONEOUSLY ADJUSTED FROM THAT PAYABLE FOR GRADE GS-12. SECTION 602 (B) (4) OF THE 1962 ACT PROVIDED FOR CONVERSION TO THE RATES OF COMPENSATION PRESCRIBED UNDER SECTION 602 (A) "SCHEDULE I" AS FOLLOWS: "IF THE OFFICER OR EMPLOYEE IS RECEIVING BASIC COMPENSATION IMMEDIATELY PRIOR TO THE FIRST DAY OF THE FIRST PAY PERIOD WHICH BEGINS ON OR AFTER THE DATE OF ENACTMENT OF THIS ACT AT THE FIRST. IS MISLEADING IN THAT IT DOES NOT CLEARLY SHOW THE APPROPRIATE CONVERSIONS FOR THOSE GRADES (GS-11 THROUGH GS-15) FOR WHICH LESS THAN 10 STEP RATES WERE PROVIDED.

B-158847, MAY 26, 1966

TO JOSEPH A. BOAT RIGHT:

WE REFER TO YOUR LETTER OF MARCH 7, 1966, CONCERNING THE OVERPAYMENTS OF COMPENSATION WHICH WERE MADE TO YOU AS AN EMPLOYEE OF THE DEPARTMENT OF THE ARMY.

AS THE RESULT OF AN INFORMAL INQUIRY ISSUED BY OUR OFFICE ON SEPTEMBER 17, 1965, THE DEPARTMENT OF THE ARMY REDUCED YOUR RATE OF COMPENSATION FROM THAT PROVIDED FOR GRADE GS-12, STEP 10, TO THAT PROVIDED FOR GRADE GS -12, STEP 9, AND PLACED YOU IN DEBT TO THE GOVERNMENT FOR PRIOR ERRONEOUS PAYMENTS OF COMPENSATION IN THE TOTAL AMOUNT OF $709.60. THOSE ACTIONS WERE NECESSARY BECAUSE ON THE EFFECTIVE DATE OF THE CLASSIFICATION ACT AMENDMENTS OF 1962, APPROVED OCTOBER 11, 1962, PUB.L. 87-793 (PART II, TITLE II), 76 STAT. 843--- OCTOBER 21, 1962, IN YOUR CASE--- YOUR RATE OF COMPENSATION WAS ERRONEOUSLY ADJUSTED FROM THAT PAYABLE FOR GRADE GS-12, LONGEVITY STEP Y, $10,775, TO THAT PAYABLE FOR GRADE GS-12, STEP 9, $11,995, AN INCREASE OF $1,220 PER ANNUM. SECTION 602 (B) (4) OF THE 1962 ACT PROVIDED FOR CONVERSION TO THE RATES OF COMPENSATION PRESCRIBED UNDER SECTION 602 (A) "SCHEDULE I" AS FOLLOWS:

"IF THE OFFICER OR EMPLOYEE IS RECEIVING BASIC COMPENSATION IMMEDIATELY PRIOR TO THE FIRST DAY OF THE FIRST PAY PERIOD WHICH BEGINS ON OR AFTER THE DATE OF ENACTMENT OF THIS ACT AT THE FIRST, SECOND, THIRD, FOURTH, FIFTH OR SIXTH SCHEDULED RATE, OR AT THE FIRST, SECOND, OR THIRD LONGEVITY RATE OF GRADE 11, 12, 13, OR 14 OF THE GENERAL SCHEDULE OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, HE SHALL RECEIVE A RATE OF BASIC COMPENSATION AT THE CORRESPONDING FIRST, SECOND, THIRD, FOURTH, FIFTH, SIXTH, SEVENTH, EIGHTH, OR NINTH RATE OF THE APPROPRIATE GRADE IN EFFECT ON AND AFTER SUCH DAY.'

THE CONVERSIONS REQUIRED BY THAT SECTION MAY BE SET OUT AS FOLLOWS:

FROM THE 1ST SCHEDULED STEP OR STEP (A) TO THE NEW STEP (1)

DO. DO. 2ND DO.DO. DO. DO. (B) DO. DO. DO. DO. (2)

DO. DO. 3RD DO. DO. DO. DO. (C) DO. DO. DO. DO. (3)

DO. DO. 4TH DO. DO. DO. DO. (D) DO. DO. DO. DO. (4)

DO. DO. 5TH DO. DO. DO. DO. (E) DO. DO. DO. DO. (5)

DO. DO. 6TH DO. DO. DO. DO. (F) DO. DO. DO. DO. (6)

DO. DO. 1ST LONGEVITY STEP OR STEP (X) DO. DO. DO. DO. (7)

DO. DO. 2ND DO. DO. DO. DO. (Y) DO. DO. DO. DO. (8)

DO. DO. 3RD DO. DO. DO. DO. (Z) DO. DO. DO. DO. (9)

THUS, THE LAW PROVIDED THAT YOUR SALARY RATE IN GRADE GS-12, LONGEVITY STEP (Y) SHOULD BECOME STEP (8) OF GRADE GS-12 UNDER THE NEW SCHEDULE. THE SCHEDULE OF CONVERSIONS, A COPY OF WHICH YOU FURNISHED US, IS MISLEADING IN THAT IT DOES NOT CLEARLY SHOW THE APPROPRIATE CONVERSIONS FOR THOSE GRADES (GS-11 THROUGH GS-15) FOR WHICH LESS THAN 10 STEP RATES WERE PROVIDED. THE INADEQUACY OF THAT SCHEDULE, HOWEVER, HAS NO EFFECT UPON THE ENTITLEMENT OF EMPLOYEES TO COMPENSATION AS PRESCRIBED BY THE PROVISION OF LAW WHICH IS QUOTED ABOVE AND THE FACT THAT THE MISTAKE WHICH WAS MADE IN FIXING YOUR COMPENSATION MAY HAVE RESULTED FROM THE DEFICIENCIES IN THAT SCHEDULE GIVES YOU NO RIGHT TO RETAIN THE COMPENSATION WHICH WAS ERRONEOUSLY PAID.

AS INDICATED ABOVE YOUR SALARY WAS FIXED AT A RATE IN EXCESS OF THAT TO WHICH YOU WERE ENTITLED ON OCTOBER 21, 1962. SINCE YOU HAD RECEIVED A LONGEVITY STEP INCREASE TO GRADE GS-12 (Y) ON SEPTEMBER 25, 1960, YOU DID NOT COMPLETE THE 156 CALENDAR WEEK PERIOD OF SERVICE IN THAT STEP AS PRESCRIBED BY SECTION 701 OF THE CLASSIFICATION ACT OF 1949, AS AMENDED (5 U.S.C. 1121), FOR ADVANCEMENT FROM STEP 8 TO STEP 9 UNTIL SEPTEMBER 21, 1963. BETWEEN THAT DATE AND JULY 5, 1964, YOU WERE LEGALLY ENTITLED TO COMPENSATION AT STEP 9 OF GRADE GS-12, AND YOU WERE PAID AT THAT RATE. EFFECTIVE JULY 5, 1964, HOWEVER, AN ADMINISTRATIVE ERROR WAS MADE IN INCREASING YOUR RATE OF COMPENSATION TO THAT FOR STEP 10 OF GRADE GS-12, WHICH STEP HAD BEEN ADDED TO THE SCHEDULED STEPS IN GRADE GS-12 BY THE FEDERAL EMPLOYEES SALARY ACT OF 1964, PUB.L. 88-426, 78 STAT. 400. VIEW OF THE FACT THAT YOU WERE NOT ENTITLED TO ADVANCEMENT TO STEP 9 BEFORE SEPTEMBER 21, 1963, YOU DO NOT BECOME ELIGIBLE FOR ADVANCEMENT TO STEP 10 UNTIL SEPTEMBER 17, 1966, AND YOU WERE PAID COMPENSATION IN EXCESS OF THE RATE TO WHICH YOU WERE LEGALLY ENTITLED BETWEEN JULY 5, 1964, AND SEPTEMBER 11, 1965, THE DATE YOUR COMPENSATION WAS REDUCED IN ACCORDANCE WITH THE INFORMAL INQUIRY OF OUR OFFICE.

YOU CITE THE CASE B-158370, FEBRUARY 7, 1966, 45 COMP. GEN. -------, COPY ENCLOSED, WITH REGARD TO THE REQUIREMENT THAT YOU REFUND THE OVERPAYMENTS OF COMPENSATION YOU HAVE RECEIVED. THE RULE DISCUSSED IN THAT CASE TO THE EFFECT THAT AN EMPLOYEE WHO SERVES IN A DE FACTO STATUS NEED NOT REFUND ERRONEOUS PAYMENTS OF COMPENSATION WAS ALSO DISCUSSED IN B-127494, FEBRUARY 10, 1961, AS FOLLOWS:

"ALTHOUGH OUR OFFICE HAS HELD THAT WHEN APPOINTMENTS WERE MADE IN GOOD FAITH BOTH ON THE PART OF THE EMPLOYEE AND THE ADMINISTRATIVE OFFICE THE EMPLOYEE INVOLVED MAY BE CONSIDERED AS HAVING SERVED IN A DE FACTO STATUS AND AS SUCH IS ENTITLED TO RETAIN COMPENSATION RECEIVED PRIOR TO THE TIME THE ERROR WAS DIRECTED TO THE ATTENTION OF THE ADMINISTRATIVE OFFICIALS (28 COMP. GEN. 514). SUCH CASES ARE, HOWEVER, CLEARLY DISTINGUISHABLE FROM THOSE WHEN THE SALARY OF A HIGHER GRADE IS PAID TO AN EMPLOYEE CONTRARY TO A SPECIFIC STATUTORY PROVISION PRESCRIBING A MINIMUM PERIOD OF SERVICE IN GRADE AS A REQUISITE FOR ADVANCEMENT TO A HIGHER GRADE SUCH AS THE INSTANT SITUATION. SEE 36 COMP. GEN. 230. THE DE FACTO RULE MAY NOT BE INVOKED TO NULLIFY THE EFFECT OF A STATUTORY REQUIREMENT. SEE 18 COMP. GEN. 815; 29 ID. 75.'

SINCE THE LENGTH OF TIME AN EMPLOYEE MUST REMAIN IN A GIVEN STEP OF HIS GRADE BEFORE HE IS ADVANCED TO THE NEXT STEP IS FIXED BY STATUTE THE DE FACTO RULE MAY NOT BE APPLIED TO RELIEVE YOU OF LIABILITY TO REFUND THE ERRONEOUS PAYMENTS YOU RECEIVED.

FOR THE REASONS STATED THE ADJUSTMENT OF YOUR COMPENSATION TO THAT FOR GRADE GS-12, STEP 9, IN SEPTEMBER 1965 WAS CORRECT AND THE ADDITIONAL COMPENSATION YOU RECEIVED AS THE RESULT OF YOUR PREMATURE ADVANCEMENTS TO WITHIN GRADE STEPS 9 AND 10 MUST BE REFUNDED.

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