B-172117, MAY 12, 1971

B-172117: May 12, 1971

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BY VIRTUE OF AN ADMINISTRATIVE ERROR EMPLOYEES PAYROLL DEDUCTION FOR HEALTH INSURANCE PREMIUMS WAS NOT MADE AND HEALTH INSURANCE DEDUCTIONS WERE NOT SHOWN ON HIS EARNINGS AND LEAVE STATEMENT. EMPLOYEE'S CLAIM THAT HE WAS FREE OF FAULT IN NOT BEING AWARE OF THE ERROR BECAUSE THE SMALL OVERPAYMENT WAS COINCIDENT WITH A SALARY INCREASE WILL NOT STAND BECAUSE THE ERROR WAS ALSO INDICATED BY OMISSION OF ANY DEDUCTION FOR HEALTH INSURANCE BENEFITS ON HIS EARNING STATEMENT. AFTER EMPLOYEE NOTIFIED THE AGENCY ACCOUNTING OFFICE OF THE OMISSION (MET BY THEIR REPLY THAT SUCH OMISSION WAS OF A TEMPORARY NATURE AND A COMMON OCCURRENCE IN INTERAGENCY TRANSFERS). GILBERTO: THIS IS IN REPLY TO YOUR LETTER OF NOVEMBER 23.

B-172117, MAY 12, 1971

CIVILIAN EMPLOYEE - ERRONEOUS PAYMENT OF PAY - WAIVER OF REFUND SUSTAINING PRIOR DECISION DENYING REQUEST OF AN EMPLOYEE OF THE U.S. ARMY COMBAT DEVELOPMENTS COMMAND, FT. BELVOIR, VA., FOR A WAIVER UNDER 5 U.S.C. 5584 OF AN ERRONEOUS PAYMENT OF PAY FOR THE PERIOD FROM JULY 28, 1968, THROUGH FEBRUARY 28, 1970. BY VIRTUE OF AN ADMINISTRATIVE ERROR EMPLOYEES PAYROLL DEDUCTION FOR HEALTH INSURANCE PREMIUMS WAS NOT MADE AND HEALTH INSURANCE DEDUCTIONS WERE NOT SHOWN ON HIS EARNINGS AND LEAVE STATEMENT. EMPLOYEE'S CLAIM THAT HE WAS FREE OF FAULT IN NOT BEING AWARE OF THE ERROR BECAUSE THE SMALL OVERPAYMENT WAS COINCIDENT WITH A SALARY INCREASE WILL NOT STAND BECAUSE THE ERROR WAS ALSO INDICATED BY OMISSION OF ANY DEDUCTION FOR HEALTH INSURANCE BENEFITS ON HIS EARNING STATEMENT. FURTHERMORE, AFTER EMPLOYEE NOTIFIED THE AGENCY ACCOUNTING OFFICE OF THE OMISSION (MET BY THEIR REPLY THAT SUCH OMISSION WAS OF A TEMPORARY NATURE AND A COMMON OCCURRENCE IN INTERAGENCY TRANSFERS), HIS FAILURE AFTER A REASONABLE LENGTH OF TIME TO ACTIVELY PURSUE THE MATTER OF POSSIBLE ERROR WHEN THE OMISSION CONTINUED MAKES HIM PARTIALLY AT FAULT AND INELIGIBLE FOR WAIVER.

TO MR. JOHN A. GILBERTO:

THIS IS IN REPLY TO YOUR LETTER OF NOVEMBER 23, 1970, REQUESTING RECONSIDERATION OF THE DENIAL OF YOUR REQUEST FOR WAIVER UNDER 5 U.S.C. 5584, AS ADDED BY PUBLIC LAW 90-616, OF AN ERRONEOUS PAYMENT OF PAY FOR THE PERIOD FROM JULY 28, 1968, THROUGH FEBRUARY 28, 1970, AS AN EMPLOYEE OF THE U.S. ARMY COMBAT DEVELOPMENTS COMMAND, FORT BELVOIR, VIRGINIA.

THE FACTS SURROUNDING THE OVERPAYMENT AS SET FORTH IN OUR CLAIMS DIVISION LETTER OF NOVEMBER 2, 1970, TO THE U.S. ARMY FINANCE CENTER, ARE AS FOLLOWS:

"THE RECORD SHOWS THAT MR. GILBERTO WAS TRANSFERRED TO FORT BELVOIR IN JULY 1968 AND EXECUTED THE APPROPRIATE FORM FOR CONTINUING COVERAGE IN A PREVIOUSLY SELECTED HEALTH INSURANCE PLAN. HOWEVER, DUE TO AN ADMINISTRATIVE ERROR, THE NECESSARY DOCUMENTATION TO EFFECT PAYROLL DEDUCTION FOR HEALTH INSURANCE PREMIUMS WAS NOT MADE. THE EMPLOYEE'S COVERAGE REMAINED IN EFFECT. THE EARNING AND LEAVE STATEMENTS FURNISHED TO THE EMPLOYEE FOR EACH PAY PERIOD DID NOT SHOW A DEDUCTION FOR HEALTH INSURANCE PREMIUMS AND HIS FIRST PAY CHECK (ONE-HALF PAY PERIOD) REFLECTED AN INCREASE OF ONE-HALF OF HIS SHARE OF THE PREMIUM OR $6.72. HIS SUBSEQUENT BIWEEKLY PAY CHECKS REFLECTED INCREASES WHICH REPRESENTED HIS FULL SHARE OF THE BIWEEKLY PREMIUMS. ON MARCH 3, 1970, MR. GILBERTO CALLED THE CIVILIAN PAY SECTION AND INQUIRED AS TO THE REASON WHY HEALTH INSURANCE DEDUCTIONS WERE NOT SHOWN ON HIS EARNINGS AND LEAVE STATEMENT. THE ERROR WAS CORRECTED AND HEALTH INSURANCE DEDUCTIONS WERE RESUMED IN PAY PERIOD BEGINNING FEBRUARY 29, 1970. HE WAS OVERPAID IN THE AMOUNT OF $574.52 FROM JULY 28, 1968 THROUGH PAY PERIOD ENDING FEBRUARY 28, 1970." THAT LETTER DENIED YOUR REQUEST FOR WAIVER UPON A FINDING THAT YOU WERE AT LEAST PARTIALLY AT FAULT WITH REGARD TO THE ERROR IN THAT THE EARNINGS AND LEAVE STATEMENTS WHICH YOU RECEIVED INDICATING THAT NO DEDUCTION HAD BEEN MADE FOR HEALTH INSURANCE WOULD HAVE CAUSED A REASONABLE MAN TO INQUIRE AS TO WHETHER APPROPRIATE DEDUCTIONS WERE IN FACT BEING MADE, WHICH YOU DID NOT.

YOU NOW SAY THAT UPON RECEIPT OF ONE OF YOUR FIRST FEW PAY CHECKS, YOU NOTIFIED THE ACCOUNTING OFFICE OF THE FACT OF CERTAIN DATA OMISSIONS FROM YOUR EARNING STATEMENT AND WERE INFORMED THAT IN CASES OF INTERAGENCY TRANSFERS SUCH OMISSIONS WERE NOT UNCOMMON; ALSO THAT YOU WERE TOLD THAT THE OMISSIONS WOULD BE SUPPLIED IN A FEW PAY PERIODS.

YOU FURTHER INDICATE THAT THE CLAIMS DIVISION'S CONCLUSION THAT YOU SHOULD HAVE BEEN AWARE OF AN INCREASE BY THE AMOUNT OF THE INSURANCE PREMIUM IN YOUR PAY CHECK IS NOT REALISTIC. YOU STATE:

"POINT 2 - AGAIN KEEPING IN MIND THAT MY TRANSFER WAS A PROMOTIONAL TRANSFER, THE OBSERVATION THAT THE INCREASES IN EARNING STATEMENTS SHOULD HAVE REVEALED THAT HEALTH INSURANCE PAYMENTS WERE NOT DEDUCTED IS NOT CONSISTENT WITH THE FACTS. MY TRANSFER OCCURRED IN THE MIDDLE OF A PAY- PERIOD. THE 1ST EARNING STATEMENT REPRESENTED ONE WEEK'S EARNING, THE 2ND, 3RD, ETC., REPRESENTED A FULL PAY-PERIOD'S EARNING. IN THESE INSTANCES DIFFERENT SALARY FIGURES WERE INVOLVED BECAUSE OF PROMOTION SALARY INCREASE AND THE ENACTMENT OF FEDERAL PAY INCREASES."

THE REGULATIONS IMPLEMENTING PUBLIC LAW 90-616 AUTHORIZING THE WAIVER OF OVERPAYMENTS OF PAY UNDER CERTAIN CIRCUMSTANCES ARE FOUND AT 4 CFR 91-93. SUBSECTION 91.5(5) OF THOSE REGULATIONS PROVIDES FOR WAIVER WHENEVER:

"(B) COLLECTION ACTION UNDER THE CLAIM WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE UNITED STATES. GENERALLY THESE CRITERIA WILL BE MET BY A FINDING THAT THE ERRONEOUS PAYMENT OF PAY OCCURRED THROUGH ADMINISTRATIVE ERROR AND THAT THERE IS NO INDICATION OF FRAUD, MISREPRESENTATION, FAULT OR LACK OF GOOD FAITH ON THE PART OF THE EMPLOYEE OR ANY OTHER PERSON HAVING AN INTEREST IN OBTAINING A WAIVER OF THE CLAIM. ANY SIGNIFICANT UNEXPLAINED INCREASE IN AN EMPLOYEE'S PAY WHICH WOULD REQUIRE A REASONABLE MAN TO MAKE INQUIRY CONCERNING THE CORRECTNESS OF HIS PAY ORDINARILY WOULD PRECLUDE A WAIVER WHEN THE EMPLOYEE FAILS TO BRING THE MATTER TO THE ATTENTION OF APPROPRIATE OFFICIALS. WAIVER OF OVERPAYMENTS OF PAY UNDER THIS STANDARD NECESSARILY MUST DEPEND UPON THE FACTS EXISTING IN THE PARTICULAR CASE. *** "

WE STATED IN B-165663, JUNE 11, 1969, WITH REGARD TO THE REQUIREMENT THAT THERE BE NO INDICATION OF FAULT ON THE PART OF THE EMPLOYEE, THAT:

"WHETHER AN EMPLOYEE WHO RECEIVES AN ERRONEOUS PAYMENT IS FREE FROM FAULT IN THE MATTER CAN ONLY BE DETERMINED BY A CAREFUL ANALYSIS OF ALL PERTINENT FACTS, NOT ONLY THOSE GIVING RISE TO THE OVERPAYMENT BUT THOSE INDICATING WHETHER THE EMPLOYEE REASONABLY COULD HAVE BEEN EXPECTED TO HAVE BEEN AWARE THAT AN ERROR HAD BEEN MADE. IF IT IS ADMINISTRATIVELY DETERMINED THAT A REASONABLE MAN, UNDER THE CIRCUMSTANCES INVOLVED, WOULD HAVE MADE INQUIRY AS TO THE CORRECTNESS OF THE PAYMENT AND THE EMPLOYEE INVOLVED DID NOT, THEN, IN OUR OPINION, THE EMPLOYEE COULD NOT BE SAID TO BE FREE FROM FAULT IN THE MATTER AND THE CLAIM AGAINST HIM SHOULD NOT BE WAIVED."

YOU CONTEND THAT AN EMPLOYEE SHOULD NOT BE EXPECTED TO NOTICE A RELATIVELY SMALL OVERPAYMENT INITIALLY MADE ON A PAY CHECK WHICH ALSO REFLECTS A SALARY INCREASE WHERE THE ERROR IS EVIDENCED ONLY BY THE AMOUNT OF HIS PAY CHECK. HOWEVER, WE POINT OUT THAT YOU WERE FURNISHED AN EARNING AND LEAVE STATEMENT EACH PAY PERIOD WHICH INDICATED THAT NO DEDUCTION HAD BEEN MADE FOR HEALTH INSURANCE BENEFITS, WHICH YOU NEVERTHELESS CONTINUED TO RECEIVE. THESE STATEMENTS ARE FURNISHED FOR THE EXPRESS PURPOSE OF PERMITTING AN EMPLOYEE TO VERIFY THE DEDUCTIONS BEING MADE FROM HIS SALARY. AS YOU NOW INDICATE, THEY DID SERVE THAT PURPOSE. YOUR SPECIFIC STATEMENT IN THAT REGARD IS AS FOLLOWS:

" *** UPON RECEIPT OF MY 1ST, 2ND, AND/OR 3RD EARNING STATEMENT I NOTIFIED THE APPROPRIATE FISCAL ACCOUNTING OFFICE OF THE OMISSION OF CERTAIN DATA ON MY EARNING STATEMENT. I WAS INFORMED THAT ON INTERAGENCY TRANSFERS THE DATA OMISSION WAS OF A TEMPORARY NATURE AND A COMMON OCCURRENCE. ALSO, IT WOULD BE CORRECTED WITHIN SEVERAL PAY PERIODS (I.E., MONTHS) AND WOULD NOT AFFECT ACTUAL CREDITS AND DEBITS DOLLAR-WISE OR LEAVE-WISE. FURTHER, SINCE I HAD SIGNED THE NECESSARY HEALTH SERVICE PLAN FORM UPON ARRIVAL TO MY NEW DUTY STATION I GAVE NO FURTHER THOUGHT TO THE MATTER."

CONCERNING THE ABOVE STATEMENT, OUR VIEW IS THAT YOU SHOULD HAVE MORE ACTIVELY PURSUED THE MATTER OF A POSSIBLE ERROR. AFTER A REASONABLE PERIOD OF TIME, WHICH IN THIS INSTANCE WOULD HAVE BEEN A MATTER OF A FEW PAY PERIODS, YOU SHOULD HAVE BECOME AWARE THAT THE OMISSION WAS MORE THAN JUST THE ROUTINE DISRUPTION IN PAPERWORK ATTENDING AN INTERAGENCY TRANSFER.

IN VIEW OF THE ABOVE, WHILE THERE IS NO INDICATION OF FRAUD OR MISREPRESENTATION ON YOUR PART, WE FEEL THAT YOU WERE PARTIALLY AT FAULT IN THE MATTER, AND DENIAL OF YOUR REQUEST FOR WAIVER MUST, THEREFORE, BE SUSTAINED.

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