B-173386, DEC 9, 1971

B-173386, DEC 9, 1971

CIVILIAN EMPLOYEE - ERRONEOUS OVERPAYMENT OF PAY - REQUEST FOR WAIVER SUSTAINING THE DENIAL BY THE CLAIMS DIVISION OF A REQUEST FOR WAIVER OF OVERPAYMENTS OF PAY TOTALING $336 TO THEODORE M. DAVID, AN EMPLOYEE OF THE INTERNAL REVENUE SERVICE. WHERE CLAIMANT WAS RATED BY THE CIVIL SERVICE COMMISSION FOR A GS-5 POSITION WHICH HE ACCEPTED, BUT IRS ERRONEOUSLY COMMENCED SALARY PAYMENTS AT A GS-7 LEVEL, EMPLOYEE'S NOTIFICATION TO IRS OF THE ERROR SHOWS GOOD FAITH. HOWEVER, CLAIMANT WAS AWARE OF THE ADMINISTRATIVE ERROR AND COULD REASONABLY BE EXPECTED TO KNOW THAT HE WAS NOT ENTITLED TO RETAIN THE ERRONEOUS OVERPAYMENTS. THUS, THE CASE FALLS WITHIN THE SCOPE OF THE AGENCY REGULATIONS, AND GAO WILL NOT REVERSE AN AGENCY DETERMINATION UNLESS CONTRARY TO STATUTE OR THE IMPLEMENTING STANDARDS FOR WAIVER, OR UNLESS THE ACTION IS ARBITRARY OR CAPRICIOUS.

TO MR. THEODORE M. DAVID:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 18, 1971, REQUESTING RECONSIDERATION OF OUR DECISION OF OCTOBER 8, 1971, B 173386, SUSTAINING THE DENIAL BY OUR CLAIMS DIVISION OF YOUR REQUEST FOR WAIVER OF OVERPAYMENTS OF PAY TOTALING $336 AS AN EMPLOYEE OF THE INTERNAL REVENUE SERVICE (IRS).

THE FACTS AND REASONS FOR SUSTAINING THE REFUSAL BY IRS TO GRANT YOU A WAIVER OF THE OVERPAYMENTS WERE STATED IN OUR DECISION AND WILL NOT BE REPEATED HERE. YOU REQUEST RECONSIDERATION ON THE BASIS THAT THE FACTS SET FORTH WERE INCORRECT. YOU STATE THAT THE ORIGINAL AMOUNT FOR WHICH YOU WERE BILLED WAS DIFFERENT THAN THE AMOUNT NOW BILLED. YOU ALSO POINT OUT THAT YOU NOTIFIED IRS OF THE ERROR IN GRADE ON YOUR FORM 50 AND THAT YOU BELIEVE YOU WERE ENTITLED TO COMPENSATION AS A GS-7 EMPLOYEE AT ALL TIMES.

REGARDING YOUR FIRST POINT, A LETTER FROM IRS DATED AUGUST 13, 1970, ADVISED YOU THAT YOU WERE OVERPAID $56 FOR SIX PAY PERIODS AND REQUESTED YOU TO LIQUIDATE THE INDEBTEDNESS BY REMITTING THE AMOUNT OF $334.60. SINCE YOU WERE OVERPAID FOR SIX PAY PERIODS THE TOTAL AMOUNT SHOULD BE $336, NOT $334.60.

SECTION 5584 OF TITLE 5, U.S.C. PROVIDES FOR WAIVER OF OVERPAYMENTS OF PAY DUE TO ADMINISTRATIVE ERROR WHEN COLLECTION OF SUCH OVERPAYMENTS WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE UNITED STATES. THE HEAD OF AN EXECUTIVE AGENCY MAY WAIVE A CLAIM OF THE UNITED STATES WHEN THE CLAIM TOTALS LESS THAN $500, THE CLAIM IS NOT THE SUBJECT OF AN EXCEPTION BY THE COMPTROLLER GENERAL, AND WAIVER IS MADE IN ACCORDANCE WITH STANDARDS PRESCRIBED BY THE COMPTROLLER GENERAL. THE PRESCRIBED STANDARDS FOR WAIVER PROVIDE IN PERTINENT PART (4 CFR 91.5(B)) THAT WAIVER MAY BE PERMITTED WHEN THERE IS 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. WHILE OUR OFFICE WILL CONSIDER APPEALS FROM AN EMPLOYEE OF AN AGENCY'S ACTION ON HIS REQUEST FOR WAIVER UNDER 5 U.S.C. 5584, IT HAS ADOPTED THE POLICY OF NOT REVERSING AN AGENCY'S DETERMINATION UNDER SUCH STATUTE EXCEPT TO THE EXTENT THAT THE AGENCY ACTION IS CONTRARY TO THE STATUTE OR THE IMPLEMENTING STANDARDS FOR WAIVER, AS INTERPRETED BY OUR OFFICE, OR UNLESS THE AGENCY'S ACTION IS FOUND TO BE ARBITRARY OR CAPRICIOUS.

THE RECORD INDICATES YOU WERE RATED BY THE CIVIL SERVICE COMMISSION ON THE BASIS OF AN EXAMINATION AS ELIGIBLE FOR A GS-5 POSITION AND IRS APPOINTED YOU TO A GS-5 POSITION WHICH YOU ACCEPTED. HOWEVER, YOUR FORM 50 ERRONEOUSLY SHOWED GS-7. YOU PROMPTLY REPORTED THIS TO IRS AND WERE ASSURED A CORRECTION WOULD BE MADE. WHEN YOU RECEIVED YOUR FIRST PAY CHECK YOU NOTICED YOU WERE PAID AS A GS-7 AND REPORTED THIS TO IRS. YOU ALSO INQUIRED AS TO WHY YOU WERE APPOINTED AS A GS-5 WHEN OTHERS HAVING QUALIFICATIONS SIMILAR TO YOURS WERE APPOINTED AT GS-7. YOU WERE INFORMED THAT IF YOU SUBMITTED ADDITIONAL INFORMATION TO THE CIVIL SERVICE COMMISSION YOU COULD BE REGRADED. AFTER THE SUBMISSION OF THE ADDITIONAL INFORMATION THE COMMISSION CERTIFIED YOU ELIGIBLE FOR APPOINTMENT TO A GS- 7 POSITION AND IRS THEN APPOINTED YOU TO A GS-7 POSITION. UPON PROCESSING OF THIS APPOINTMENT ACTION IT WAS DETERMINED THAT NO CORRECTION HAD BEEN MADE AND YOU HAD BEEN OVERPAID FOR ALL PAY PERIODS PRIOR TO YOUR GS-7 APPOINTMENT. APPARENTLY NO COLLECTION ACTION WAS TAKEN THEN SINCE YOUR LOCAL IRS OFFICE INITIATED WAIVER ACTION. THE WAIVER ACTION WAS NOT PROMPTLY PROCESSED AND THE REQUEST FOR COLLECTION MENTIONED ABOVE WAS MADE.

SUBSEQUENTLY IRS DENIED WAIVER OF YOUR INDEBTEDNESS ON THE BASIS OF SECTION 3.08 OF THAT AGENCY'S MANUAL SUPPLEMENT 17G-182 WHICH STATES: "ERRORS POINTED OUT BY THE EMPLOYEE MAY BE ELIGIBLE FOR WAIVER IF CONDITIONS IN THIS SECTION ARE MET, BUT A CLAIM FOR ANY OVERPAYMENT RESULTING FROM THE SAME ERROR AFTER THE TIME OF RECOGNITION WILL NOT BE ELIGIBLE FOR WAIVER."

THE RECORD CLEARLY INDICATES THAT YOU AGREED TO ACCEPT A GS-5 POSITION AND THAT YOU POINTED OUT TO IRS THAT YOUR FORM 50 ERRONEOUSLY SHOWED GS-7 AND THAT THE AMOUNT OF YOUR FIRST PAY CHECK WAS ERRONEOUSLY FOR THE PAY OF THE HIGHER GRADE. WE RECOGNIZE THAT YOU ACTED IN GOOD FAITH. NEVERTHELESS YOU WERE AWARE OF THE ADMINISTRATIVE ERRORS AND COULD REASONABLY BE EXPECTED TO KNOW YOU WERE NOT ENTITLED TO RETAIN THE ERRONEOUS OVERPAYMENTS. ACCORDINGLY, WE CANNOT DISAGREE WITH THE IRS DETERMINATION THAT YOUR CASE WAS WITHIN THE SCOPE OF ITS REGULATION. WITH RESPECT TO YOUR CONTENTION THAT YOU WERE ENTITLED TO APPOINTMENT TO GS-7, THE RECORD INDICATES THAT YOU WERE INFORMED THAT THE CIVIL SERVICE COMMISSION HAD CERTIFIED YOU AS ELIGIBLE FOR GS-5 AND THAT YOU COULD ONLY BE REGRADED UPON SUBMISSION OF ADDITIONAL EVIDENCE OF YOUR QUALIFICATIONS. UNTIL YOU WERE CERTIFIED AS ELIGIBLE FOR GS-7 BY THE COMMISSION THERE WAS NO AUTHORITY FOR PAYMENT OF SALARY AT ANY OTHER RATE THAN THAT OF GS-5. UNDER THE CIRCUMSTANCES THERE IS NO PROPER BASIS FOR THE WAIVER OF YOUR INDEBTEDNESS. ACCORDINGLY, OUR DECISION SUSTAINING THE PRIOR ACTIONS DENYING WAIVER OF THE INDEBTEDNESS IS SUSTAINED.

AS TO ANY OTHER CHANNEL OF APPEAL YOU ARE ADVISED THAT UNDER THE WAIVER STATUTE, 5 U.S.C. 5584, NO PROVISION IS MADE FOR REVIEW OF OUR DETERMINATIONS THEREUNDER. WE CANNOT SAY WHETHER A UNITED STATES DISTRICT COURT OR THE UNITED STATES COURT OF CLAIMS WOULD ACCEPT JURISDICTION OF SUCH A CASE. REGARDING YOUR REQUEST THAT YOU BE FURNISHED COPIES OF ALL CORRESPONDENCE CONCERNING YOUR CASE, WE ENCLOSE COPIES OF TWO PERTINENT DOCUMENTS ON WHICH OUR CONCLUSION WAS PREDICATED. IF YOU DESIRE COPIES OF OTHER PAPERS WE WILL ATTEMPT TO FURNISH SAME UPON YOUR REQUEST.