B-173854, SEP 17, 1971

B-173854, SEP 17, 1971

CIVILIAN EMPLOYEE - OVERPAYMENTS - REQUEST FOR WAIVER AFFIRMING CLAIMS DIVISION ACTION WHICH DENIED REQUEST FOR WAIVER UNDER 5 U.S.C. 5584 OF AN ERRONEOUS PAYMENT OF PAY AMOUNTING TO $274.74, INCIDENT TO THE NONDEDUCTION OF INSURANCE PREMIUMS. WHILE THERE IS NO INDICATION OF FRAUD OR MISREPRESENTATION, THE COMP. GEN. FEELS THAT THE CLAIMANT MUST BE REGARDED AS PARTIALLY AT FAULT IN FAILING TO NOTICE THAT THE PROPER DEDUCTIONS WERE NOT BEING MADE AND CALLING IT TO THE ATTENTION OF THE EMPLOYING AGENCY.

TO MR. JOHN MACCIOLI:

THIS IS IN REPLY TO YOUR LETTER OF JULY 27, 1971, WHICH HAS BEEN REGARDED AS AN APPEAL FROM THE DENIAL BY OUR CLAIMS DIVISION OF YOUR REQUEST FOR WAIVER UNDER 5 U.S.C. 5584 OF AN ERRONEOUS PAYMENT OF PAY. THE ERRONEOUS PAYMENT OF PAY OCCURRED DURING THE PERIOD BETWEEN JANUARY 2, 1966, THROUGH MAY 6, 1967, WHILE YOU WERE EMPLOYED AS A CIVILIAN AT THE U.S. NAVAL SCIENTIFIC AND TECHNICAL INTELLIGENCE CENTER (STIC), NAVAL OBSERVATORY, WASHINGTON, D.C.

THE FACTS SURROUNDING THE OVERPAYMENT WERE THOROUGHLY DISCUSSED IN OUR CLAIMS DIVISION LETTER OF JULY 15, 1971, ADDRESSED TO YOU. IN SUMMARY THE RECORD INDICATES THAT AT THE TIME OF YOUR TRANSFER TO STIC, EFFECTIVE JANUARY 2, 1966, AN ADMINISTRATIVE ERROR WAS MADE IN THE PROCESSING OF DOCUMENTS REQUIRED TO EFFECT PAYROLL DEDUCTION FOR YOUR SHARE OF HEALTH INSURANCE PREMIUMS. AS A RESULT PREMIUM DEDUCTIONS WERE NOT WITHHELD FROM YOUR PAY, AND AN OVERPAYMENT OF $274.74 OCCURRED. THE ERROR WAS NOT ADMINISTRATIVELY DETECTED UNTIL MAY OF 1967 WHEN STIC PERSONNEL FUNCTIONS WERE TRANSFERRED TO "NAVSTA WASH." CORRECTIVE ACTION WAS TAKEN AT THAT TIME, AND THEREAFTER, PROPER DEDUCTIONS WERE MADE BASED ON YOUR ORIGINAL AND CONTINUING ENROLLMENT AS OF THE DATE YOU REGISTERED YOUR ELECTION FOR COVERAGE AND AUTHORIZED A PAYROLL DEDUCTION IN 1960.

IT IS REPORTED THAT DURING THE PERIOD IN QUESTION YOU WERE FURNISHED A STATEMENT OF EARNINGS AND DEDUCTIONS (NAVCOMPT FORM 906, NOW 906-1) WITH EACH PAYROLL CHECK. FORM 906 INCLUDED AN INFORMATION BLOCK DESIGNATED "FIXED DEDUCTIONS." AS EXPLAINED ELSEWHERE ON THAT FORM, SUCH BLOCK PROVIDED FOR ONE AGGREGATE AMOUNT TO BE SHOWN AS REPRESENTING ONLY THOSE DEDUCTIONS IN THE CATEGORIES OF HEALTH INSURANCE, BONDS, AND OTHER (UNION DUES, CHARITIES, ALLOTMENTS). OTHER PAYROLL DEDUCTIONS FOR STATE AND FEDERAL INCOME TAX WITHHOLDING, RETIREMENT, AND LIFE INSURANCE WERE SHOWN IN SEPARATE INDIVIDUAL BLOCKS. OUR CLAIMS DIVISION DENIED YOUR REQUEST FOR WAIVER SINCE YOU REASONABLY SHOULD HAVE BEEN AWARE OF THE FACT THAT NO DEDUCTIONS WERE BEING MADE FROM YOUR PAY FOR HEALTH INSURANCE PREMIUMS DURING THE PERIOD INVOLVED.

YOUR LETTER OF JULY 27, 1971, SEEMS TO FOCUS ON THE ERROR IN FAILING TO CORRECTLY PROCESS THE DOCUMENTS NECESSARY TO EFFECT CONTINUED WITHHOLDING OF YOUR OBLIGATION FOR HEALTH INSURANCE PREMIUMS. THE ACTUAL EMPHASIS UNDER REGULATIONS IMPLEMENTING THE WAIVER LAW (5 U.S.C. 5584) IS ON THE DUTY OF A REASONABLY PRUDENT EMPLOYEE TO DISCOVER AND MAKE INQUIRY CONCERNING AN UNEXPLAINED INCREASE IN PAY. 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."

EARNINGS AND DEDUCTIONS STATEMENTS ARE FURNISHED FOR THE EXPRESS PURPOSE OF PERMITTING AN EMPLOYEE TO VERIFY THE DEDUCTIONS BEING MADE FROM HIS SALARY. AS YOU INDICATE REGARDING YOUR DISCOVERY OF AN IMPROPER BOND DEDUCTION, THEY DID SERVE THAT PURPOSE. SINCE THE FIXED DEDUCTIONS BLOCK OF YOUR EARNINGS AND DEDUCTIONS STATEMENT ONLY COVERED DEDUCTIONS FOR BONDS, HEALTH INSURANCE, AND/OR "OTHER" (A CATEGORY WHICH IS NOT INVOLVED HERE), IT IS NOT UNREASONABLE TO EXPECT THAT YOUR ATTENTION TO THE IMPROPER BOND DEDUCTION SHOULD HAVE REVEALED THE ERRONEOUS OMISSION OF DEDUCTIONS FOR HEALTH INSURANCE PREMIUMS. MOREOVER, THE RECORD INDICATES THAT IN THE FIRST THREE PAY PERIODS OF 1966 YOUR EARNINGS AND DEDUCTIONS STATEMENT (FORM 906) DID NOT SHOW ANY AMOUNT WHATSOEVER IN THE FIXED DEDUCTIONS BLOCK. AS AN ENROLLEE IN THE HEALTH BENEFITS PROGRAM SINCE 1960 YOU WOULD HAVE EXPERIENCED AND KNOWN THAT SUCH DEDUCTION WAS REQUIRED TO BE MADE EACH PAY PERIOD.

DESPITE CONTRARY INFORMATION YOU INITIALLY RECEIVED FROM THE INSURANCE CARRIER, IT IS CLEAR THAT HAD YOU CLAIMED BENEFITS DURING THE PERIOD IN QUESTION YOUR COVERAGE WOULD HAVE BEEN ULTIMATELY CONFIRMED. THIS IS ESTABLISHED BY A LETTER IN THE RECORD FROM A REPRESENTATIVE OF SAID CARRIER AS WELL AS BY APPLICABLE REGULATIONS IN 5 CFR 890.303(A) WHICH PROVIDES, IN PART, AS FOLLOWS:

"ON TRANSFER. *** THE REGISTRATION OF AN EMPLOYEE OR ANNUITANT ELIGIBLE TO CONTINUE ENROLLMENT CONTINUES WITHOUT CHANGE WHEN HE (1) MOVES FROM ONE EMPLOYING OFFICE TO ANOTHER, WITHOUT A BREAK IN SERVICE OF MORE THAN 3 DAYS, WHETHER THE PERSONNEL ACTION IS DESIGNATED AS A TRANSFER OR NOT ***

IN VIEW OF THE ABOVE, WHILE THERE IS NO INDICATION OF FRAUD OR MISREPRESENTATION ON YOUR PART, WE FEEL THAT YOU MUST BE REGARDED AS PARTIALLY AT FAULT IN THE MATTER IN FAILING TO NOTICE THAT THE PROPER DEDUCTIONS WERE NOT BEING MADE AND CALLING IT TO THE ATTENTION OF YOUR AGENCY. THEREFORE, THE DENIAL OF YOUR REQUEST FOR WAIVER MUST BE SUSTAINED.