B-165782, JAN. 31, 1969

B-165782: Jan 31, 1969

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WHEN HE WAS TRANSFERRED FROM THE POSITION OF FIRE CHIEF. AT WHICH TIME HE WAS SAVED THE $7. WHICH WAS IN EFFECT AT THE TIME OF MR. IS THAT THE EMPLOYEE MUST HAVE SERVED IN THE SAME OR HIGHER GRADE FOR 2 CONTINUOUS YEARS IMMEDIATELY PRECEDING HIS REDUCTION IN GRADE. WAS NOT ELIGIBLE FOR SALARY SAVING UNDER SECTION 507. WHITTEN WAS QUESTIONED IN OUR PAYROLL AUDIT AT THE U.S. HE SHOULD HAVE BEEN PLACED IN STEP 7 OF GS-8. TO GRADE GS-9 HE SHOULD HAVE BEEN PLACED IN STEP 7. 425 WAS INCREASED TO $8. WHITTEN ERRONEOUSLY WAS SAVED . ALSO WAS FIXED AT $8. THIS ACTION IS CONSIDERED TO HAVE BEEN IN ERROR SINCE IN DETERMINING THIS INDEBTEDNESS APPARENTLY THERE WAS NOT TAKEN INTO CONSIDERATION THE HIGHEST PREVIOUS RATE RULE WHICH UNDER THE ESTABLISHED NAVY DEPARTMENT POLICY WOULD HAVE BEEN APPLICABLE IN MR.

B-165782, JAN. 31, 1969

TO MR. SECRETARY:

MR. CLAUDE M. WHITTEN, AN EMPLOYEE OF YOUR DEPARTMENT, HAS REQUESTED BY LETTER OF NOVEMBER 13, 1968, WITH ENCLOSURES, COPIES HEREWITH, THAT OUR OFFICE WAIVE CLAIM OF THE GOVERNMENT AGAINST HIM, ADMINISTRATIVELY DETERMINED TO BE IN THE AMOUNT OF $1,060.80, UNDER THE AUTHORITY OF PUBLIC LAW 90-616, APPROVED OCTOBER 21, 1968.

MR. WHITTEN'S INDEBTEDNESS AROSE BY REASON OF HIS BEING GRANTED SAVED SALARY UPON HIS CHANGE TO A LOWER GRADE ON DECEMBER 24, 1961, WHEN HE WAS TRANSFERRED FROM THE POSITION OF FIRE CHIEF, GS-10, $7,490 PER ANNUM, AT THE U.S. NAVAL STATION, SANGLEY BAY, LUZON, REPUBLIC OF THE PHILIPPINES, TO THE POSITION OF FIRE CHIEF, GS-8, AT THE U.S. NAVAL AIR STATION, SANFORD, FLORIDA, AT WHICH TIME HE WAS SAVED THE $7,490 SALARY RATE.

ONE OF THE REQUIREMENTS FOR GRANTING SALARY RETENTION BENEFITS UNDER SECTION 507 OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, WHICH WAS IN EFFECT AT THE TIME OF MR. WHITTEN'S DEMOTION, IS THAT THE EMPLOYEE MUST HAVE SERVED IN THE SAME OR HIGHER GRADE FOR 2 CONTINUOUS YEARS IMMEDIATELY PRECEDING HIS REDUCTION IN GRADE. MR. WHITTEN DID NOT MEET THIS REQUIREMENT AND, THEREFORE, WAS NOT ELIGIBLE FOR SALARY SAVING UNDER SECTION 507. FOR THIS REASON THE SAVED SALARY PAID MR. WHITTEN WAS QUESTIONED IN OUR PAYROLL AUDIT AT THE U.S. NAVAL AIR STATION, JACKSONVILLE, FLORIDA, IN 1964.

IN OUR INFORMAL INQUIRY NO. 4Q-0102 DATED MARCH 16, 1964, WE COMPUTED MR. WHITTEN'S INDEBTEDNESS TO BE IN THE AMOUNT OF $171.20 COVERING THE PERIOD DECEMBER 24, 1961, THROUGH OCTOBER 13, 1962. IN COMPUTING THE AMOUNT MR. WHITTEN OWED, WE DETERMINED THAT UPON HIS DEMOTION ON DECEMBER 24, 1961, HE SHOULD HAVE BEEN PLACED IN STEP 7 OF GS-8, $6,875 PER ANNUM, AND UPON HIS PROMOTION ON MARCH 4, 1962, TO GRADE GS-9 HE SHOULD HAVE BEEN PLACED IN STEP 7, $7,425 PER ANNUM. IN DETERMINING THE AMOUNT OF MR. WHITTEN'S INDEBTEDNESS WE GAVE RECOGNITION TO THE GENERAL POLICY OF THE DEPARTMENT OF THE NAVY DURING THE PERIOD IN QUESTION TO GRANT AN EMPLOYEE MAXIMUM BENEFITS UNDER THE HIGHEST PREVIOUS RATE RULE WHEN SELECTING HIS WITHIN- GRADE RATE INCIDENT TO A CHANGE IN CLASSIFICATION ACT GRADES. ON OCTOBER 14, 1962, THE EFFECTIVE DATE OF COMPENSATION SCHEDULE I OF PUBLIC LAW 87 793, THE RATE OF $7,425 WAS INCREASED TO $8,025 PER ANNUM. THE INCREASED RATE FOR GS-10, STEP 4 -- THE RATE MR. WHITTEN ERRONEOUSLY WAS SAVED -- ALSO WAS FIXED AT $8,025 PER ANNUM BY COMPENSATION SCHEDULE I. THUS, AT THAT TIME THE OVERPAYMENTS THAT RESULTED FROM THE ERRONEOUS GRANTING OF SAVED PAY CEASED.

THE ADMINISTRATIVE OFFICE (U.S. NAVAL AIR STATION, JACKSONVILLE, FLORIDA) COMPUTED MR. WHITTEN'S INDEBTEDNESS AS BEING IN THE AMOUNT OF $1,060.80 AND AS COVERING THE PERIOD DECEMBER 24, 1961, THROUGH DECEMBER 21, 1963. THIS ACTION IS CONSIDERED TO HAVE BEEN IN ERROR SINCE IN DETERMINING THIS INDEBTEDNESS APPARENTLY THERE WAS NOT TAKEN INTO CONSIDERATION THE HIGHEST PREVIOUS RATE RULE WHICH UNDER THE ESTABLISHED NAVY DEPARTMENT POLICY WOULD HAVE BEEN APPLICABLE IN MR. WHITTEN'S CASE AT THE TIME OF HIS PROMOTION TO GS-9. THEREFORE, WE CONSIDER THAT ONLY $171.20 IS SUBJECT TO WAIVER ACTION UNDER PUBLIC LAW 90-616 AND THAT $889.60 OF THE ADMINISTRATIVELY DETERMINED INDEBTEDNESS WAS IN ERROR AND SHOULD BE CANCELED. MR. WHITTEN SHOULD BE REFUNDED THE AMOUNT ($889.60) COLLECTED FROM HIM IN LIQUIDATION OF THE ERRONEOUSLY STATED INDEBTEDNESS.

WE ALSO UNDERSTAND THAT THERE IS NO INDICATION THAT THE ERRONEOUS PAYMENTS RESULTED FROM FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON THE PART OF MR. WHITTEN OR ANY OTHER PERSON INTERESTED IN OBTAINING A WAIVER OF THE CLAIM. WHILE NORMALLY CLAIMS IN THIS AMOUNT (LESS THAN $500) ARE TO BE CONSIDERED FOR WAIVER BY THE AGENCY MAKING THE ERRONEOUS PAYMENTS, WE ALREADY HAVE INVESTIGATED THE FACTS AND CIRCUMSTANCES INVOLVED IN MR. WHITTEN'S CASE UNDER THE BELIEF THAT THE ERRONEOUS PAYMENTS EXCEEDED $500. THEREFORE, IT IS APPROPRIATE IN THE INTEREST OF ECONOMY AND EXPEDIENCY THAT WE CONSIDER THE MATTER OF THE WAIVER REQUESTED BY MR. WHITTEN. ACCORDINGLY, WE HAVE DETERMINED THAT THE WAIVER OF THE $171.20 IS APPROPRIATE AND SUCH AMOUNT HEREBY IS WAIVED. LETTER OF TODAY, A COPY OF WHICH IS ENCLOSED, MR. WHITTEN HAS BEEN ADVISED THAT HE MAY OBTAIN REFUND OF THE AMOUNTS PAID IN LIQUIDATION OF THE WAIVED INDEBTEDNESS UPON HIS FILING A CLAIM THEREFOR WITH YOUR DEPARTMENT WITHIN 2 YEARS FROM THE DATE OF THE WAIVER.