B-181849, DEC 18, 1974

B-181849: Dec 18, 1974

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AN EMPLOYEE WHO IS AWARE THAT HE IS BEING OVERPAID QUARTERS ALLOWANCE IS NOT ENTITLED TO WAIVER OF HIS INDEBTEDNESS TO THE UNITED STATES FOR SUCH OVERPAYMENTS UNDER 5 U.S.C. 5584. AS WAS STATED IN THE DETERMINATION OF APRIL 9. WAS TRANSFERRED FROM PARIS. WHILE STATIONED IN PARIS SHE WAS AUTHORIZED AND RECEIVED BOTH A POST ALLOWANCE AND A QUARTERS ALLOWANCE. SHE WAS NOT ENTITLED TO RECEIVE A QUARTERS ALLOWANCE AS SHE OCCUPIED A GOVERNMENT-LEASED APARTMENT. WAS AUTHORIZED TO RECEIVE A POST ALLOWANCE. WAS BOTH UNDERPAID AND OVERPAID POST ALLOWANCE TO JUNE 22. IT WAS ADMINISTRATIVELY DETERMINED THAT MS. COLARD WAS OVERPAYED IN THE GROSS AMOUNT OF $505.21. THIS AMOUNT WAS COLLECTED BY PAYROLL DEDUCTIONS ($201.61) AND PERSONAL CHECK IN THE AMOUNT OF $303.60.

B-181849, DEC 18, 1974

AN EMPLOYEE WHO IS AWARE THAT HE IS BEING OVERPAID QUARTERS ALLOWANCE IS NOT ENTITLED TO WAIVER OF HIS INDEBTEDNESS TO THE UNITED STATES FOR SUCH OVERPAYMENTS UNDER 5 U.S.C. 5584.

ELIZABETH A. COLARD - REQUEST FOR WAIVER OF INDEBTEDNESS:

THIS DECISION CONCERNS AN APPEAL BY MS. ELIZABETH A. COLARD FROM A DETERMINATION DATED APRIL 9, 1974, BY THE TRANSPORTATION AND CLAIMS DIVISION OF OUR OFFICE DENYING HER REQUEST FOR WAIVER OF INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $505.21 UNDER THE PROVISIONS OF 5 U.S.C. 5584 (SUPP. III, 1973).

AS WAS STATED IN THE DETERMINATION OF APRIL 9, 1974, THE RECORD SHOWS THAT MS. COLARD, A CIVILIAN EMPLOYEE OF THE DEPARTMENT OF DEFENSE, U.S. MISSION TO NATO, WAS TRANSFERRED FROM PARIS, FRANCE, TO THE NEW NATO HEADQUARTERS, BRUSSELS, BELGIUM, EFFECTIVE OCTOBER 16, 1967. WHILE STATIONED IN PARIS SHE WAS AUTHORIZED AND RECEIVED BOTH A POST ALLOWANCE AND A QUARTERS ALLOWANCE. UPON TRANSFER TO BRUSSELS, SHE WAS NOT ENTITLED TO RECEIVE A QUARTERS ALLOWANCE AS SHE OCCUPIED A GOVERNMENT-LEASED APARTMENT, BUT WAS AUTHORIZED TO RECEIVE A POST ALLOWANCE. THROUGH ERROR SHE CONTINUED TO BE PAID A QUARTERS ALLOWANCE THROUGH JANUARY 20, 1968, AND WAS BOTH UNDERPAID AND OVERPAID POST ALLOWANCE TO JUNE 22, 1968. UPON RECONCILIATION OF HER PAY ACCOUNT, WHICH ALSO INCLUDED ADJUSTMENTS FOR UNDERPAYMENTS OF ALLOWANCES AND OTHER PAYMENTS, IT WAS ADMINISTRATIVELY DETERMINED THAT MS. COLARD WAS OVERPAYED IN THE GROSS AMOUNT OF $505.21. THIS AMOUNT WAS COLLECTED BY PAYROLL DEDUCTIONS ($201.61) AND PERSONAL CHECK IN THE AMOUNT OF $303.60.

THE RECORD FURTHER DISCLOSES THAT MS. COLARD, BY HER OWN ADMISSION, WAS AWARE THET SHE WAS BEING OVERPAID UPON RECEIPT OF HER FIRST PAY AFTER BEING TRANSFERRED TO BRUSSELS, AND AT NO TIME CHANGED HER VIEW THAT THAT PAYMENT OR SUBSEQUENT PAYMENTS WERE IMPROPER. IN FACT, IT WAS MS. COLARD'S EFFORTS TO EFFECT A CORRECTION OF A CONTINUING UNDERPAYMENT AND OVERPAYMENT SITUATION THAT FINALLY RESULTED IN ADMINISTRAVTIVE RECOGNITION OF THE FACT THAT SHE HAD BEEN OVERPAID. MS. COLARD BELIEVES THAT IT IS UNJUST TO PENALIZE HER FOR HER HONESTY IN BRINGING THE MATTER TO HER SUPERVISOR'S ATTENTION AND HER DILIGENCE IN SEEKING CORRECTION OF THE OVERPAYMENTS. SEH CITES A PROVISION IN THE APPLICABLE REGULATIONS PRESCRIBING CONDITIONS FOR WAIVER OF CLAIMS (NOW FOUND AT 4 C.F.R. 91.5(C) WHICH PROVIDES, IN DETERMINING WHEN "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 OR ALLOWANCES OCCURRED THROUGH ADMINISTRATIVE ERROR AND THAT THERE IS NO INDICATION TO FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON THE PART OF THE EMPLOYEE OR MEMBER."

MS. COLARD CONTENDS THAT SINCE HER SITUATION FULLY SATISFIES BOTH OF THESE CONDITIONS, THE DISALLOWANCE BY OUR TRANSPORTATION AND CLAIMS DIVISION OF HER REQUEST FOR A WAIVER VIOLATED THIS OFFICE'S OWN PUBLISHED REGULATORY STANDARDS.

WE BELIEVE MS. COLARD HAS READ THE ABOVE-QUOTED PORTION OF THE REGULATIONS OUT OF CONTEXT WHICH LED HER TO MISUNDERSTAND THEIR GENERAL IMPORT. THE SUBSECTION SHE QUOTES CONTINUES AS FOLLOWS:

"ANY SIGNIFICANT UNEXPLAINED INCREASE IN PAY OR ALLOWANCES WHICH WOULD REQUIRE A REASONABLE PERSON TO MAKE INQUIRY CONCERNING THE CORRECTNESS OF HIS PAY OR ALLOWANCES ORDINARILY WOULD PRECLUDE A WAIVER WHEN THE EMPLOYEE OR MEMBER FAILS TO BRING THE MATTER TO THE ATTENTION OF APPROPRIATE OFFICIALS. WAIVER OF OVERPAYMENTS OF PAY AND ALLOWANCES UNDER THIS STANDARD NECEESARILY MUST DEPEND UPON THE FACTS EXISTING IN THE PARTICULAR CASE."

IN OTHER WORDS, HAD SHE FAILED TO MAKE THE REQUIRED INQUIRY, EITHER WILFULLY OR UNDER CIRCUMSTANCES IN WHICH A REASONABLE PERSON WOULD HAVE MADE SUCH INQUIRY, WAIVER WOULD HAVE BEEN PRECLUDED. HOWEVER, THE CONVERSE IS NOT NECESSARILY TRUE--I.E., THE FACT THAT SHE DID MAKE THE REQUISITE INQUIRY ENTITLES HER PER SE TO A WAIVER.

IN THIS CONNECTION, NOTE THAT SECTION 92.2(B)(4) AND (5) GOES ON TO REQUEST FROM THE INVESTIGATING AGENCY "A STATEMENT BY THE EMPLOYEE OR MEMBER AS TO HIS KNOWLEDGE OF THE OVERPAYMENT", AND "ANY OTHER FACTUAL INFORMATION *** INDICATING KNOWLEDGE ON THE PART OF THE EMPLOYEE OR MEMBER CONCERNING THE POSSIBILITY OF HAVING RECEIVED AN ERRONEOUS PAYMENT OF PAY OR ALLOWANCES." THE PURPOSE OF THIS INFORMATION IS TO ASCERTAIN WHETHER THE EMPLOYEE KNEW THAT SHE WAS NOT ENTITLED TO THE OVERPAYMENTS AT THE TIME THEY WERE MADE. IF THE EMPLOYEE JUSTIFIABLY BELIEVED THAT THE PAYMENTS WERE CORRECT, WE WILL NOT GENERALLY PENALIZE HER FOR HER RELIANCE ON THE ADMINISTRATIVE ERROR AND REQUIRE A REPAYMENT OF FUNDS SHE HAD REASON TO BELIEVE SHE COULD TREAT AS HER OWN. ON THE OTHER HAND, WE ARE NOT AUTHORIZED TO PERMIT AN EMPLOYEE TO RETAIN FEDERAL FUNDS WHICH SHE KNEW WERE NOT HERS AS A REWARD FOR HER HONESTY IN DOING HER DUTY IN REPORTING THE OVERPAYMENT.

IN IMPLEMENTING THE PROVISIONS OF 5 U.S.C. 5584, IT HAS BEEN THE CONSISTENT POLICY OF THIS OFFICE TO DENY REQUESTS FOR WAIVER WHERE THE EMPLOYEE WAS AWARE OF THE OVERPAYMENTS AT THE TIME THEY OCCURRED. 175052 MARCH 10, 1972; B-171944, MARCH 23, 1971; B-168922, MAY 2, 1970. IN SUCH CASES, WE THINK THE EMPLOYEE CANNOT REASONABLY EXPECT TO RETAIN THE EXCESS PAY WITHOUT BEING OBLIGATED TO MAKE REFUND THEREOF WHEN THE ERROR IS FINALLY CORRECTED.

SINCE MS. COLARD WAS AWARE OF THE OVERPAYMENTS AT THE TIME THEY OCCURRED, WE MUST CONCLUDE THAT MS. COLARD'S REQUEST FOR WAIVER WAS PROPERLY DENIED BY THE TRANSPORTATION AND CLAIMS DIVISION ACTION OF APRIL 9, 1974.