B-182188, JAN 22, 1975

B-182188: Jan 22, 1975

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EMPLOYEE WAS PAID AT RATE OF GS-14. UPON RECONSIDERATION IT IS HELD THAT OVERPAYMENT IS WAIVED SINCE ERRONEOUS INCREASE WAS NOT SO SIGNIFICANT AS TO PUT EMPLOYEE ON NOTICE OF ERROR. THERE IS NO EVIDENCE THAT LEAVE AND EARNINGS STATEMENTS SHOWED GRADE AND STEP AND. THAT HE IS NOT ENTITLED TO A WAIVER OF HIS INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $994.40 UNDER THE PROVISIONS OF 5 U.S.C. AS WAS STATED IN THE SETTLEMENT OF MARCH 7. STEEL'S BIWEEKLY GROSS SALARY WAS RAISED TO $934.60. AS A RESULT OF IMPLEMENTING THE GOVERNMENT PAY INCREASE THAT WAS EFFECTIVE ON JANUARY 9. STEEL WAS OVERPAID DURING THE PERIOD JANUARY 9. SEC. 5584 (1970) PROVIDE GENERALLY FOR THE WAIVER OF INDEBTEDNESS OF FEDERAL EMPLOYEES TO THE UNITED STATES ARISING OUT OF OVERPAYMENTS OF PAY AND CERTAIN ALLOWANCES WHEN IT IS FOUND THAT THE ERRONEOUS PAYMENTS AROSE THROUGH ADMINISTRATIVE ERROR.

B-182188, JAN 22, 1975

AS A RESULT OF ADMINISTRATIVE ERROR IN IMPLEMENTING FEDERAL EMPLOYEES' PAY RAISE OF 1972, EMPLOYEE WAS PAID AT RATE OF GS-14, STEP 7, RATHER THAN GS-14, STEP 6, WITH OVERPAYMENT TOTALING $994.40. UPON RECONSIDERATION IT IS HELD THAT OVERPAYMENT IS WAIVED SINCE ERRONEOUS INCREASE WAS NOT SO SIGNIFICANT AS TO PUT EMPLOYEE ON NOTICE OF ERROR; ALSO, THERE IS NO EVIDENCE THAT LEAVE AND EARNINGS STATEMENTS SHOWED GRADE AND STEP AND, THEREFORE, IT CANNOT BE SAID THAT RECEIPT OF THOSE DOCUMENTS CONSTITUTED CONSTRUCTIVE NOTICE OF ERROR.

JULIUS C. STEEL - REQUEST FOR WAIVER OF INDEBTEDNESS:

THIS DECISION INVOLVES A REQUEST BY MR. JULIUS C. STEEL FOR RECONSIDERATION OF A DETERMINATION BY OUR TRANSPORTATION AND CLAIMS DIVISION DATED MARCH 7, 1974, THAT HE IS NOT ENTITLED TO A WAIVER OF HIS INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $994.40 UNDER THE PROVISIONS OF 5 U.S.C. SEC. 5584 (1970).

AS WAS STATED IN THE SETTLEMENT OF MARCH 7, 1974, THE RECORD INDICATES THAT MR. STEEL, DIRECTOR OF THE FINANCIAL MANAGEMENT DIVISION, OF THE BUREAU OF CUSTOMS, DEPARTMENT OF THE TREASURY, AT NEW ORLEANS, LOUISIANA, RECEIVED A QUALITY STEP INCREASE FROM STEP 5 TO STEP 6 OF GRADE GS-14, EFFECTIVE WITH THE PAY PERIOD BEGINNING DECEMBER 26, 1971. AS A RESULT OF THIS PAY INCREASE, MR. STEEL'S BIWEEKLY GROSS SALARY WAS RAISED TO $934.60; HIS NEW ANNUAL GROSS SALARY BECOMING $24,285. SOON THEREAFTER, AS A RESULT OF IMPLEMENTING THE GOVERNMENT PAY INCREASE THAT WAS EFFECTIVE ON JANUARY 9, 1972, MR. STEEL'S PAYROLL OFFICE ERRONEOUSLY PAID HIM AT THE NEW RATE FOR A GS-14, STEP 7, ANNUAL GROSS SALARY OF $26,352 - $1,013.60 BIWEEKLY, RATHER THAN AT THE NEW BIWEEKLY RATE FOR HIS PROPER GRADE AND STEP (GS-14, STEP 6) - $985.60, A DIFFERENCE OF $28 IN GROSS PAY PER PAY PERIOD. CONSEQUENTLY, MR. STEEL WAS OVERPAID DURING THE PERIOD JANUARY 9, 1972 THROUGH MAY 12, 1973; THE TOTAL OVERPAYMENT BEING $994.40.

THE PROVISIONS OF 5 U.S.C. SEC. 5584 (1970) PROVIDE GENERALLY FOR THE WAIVER OF INDEBTEDNESS OF FEDERAL EMPLOYEES TO THE UNITED STATES ARISING OUT OF OVERPAYMENTS OF PAY AND CERTAIN ALLOWANCES WHEN IT IS FOUND THAT THE ERRONEOUS PAYMENTS AROSE THROUGH ADMINISTRATIVE ERROR, AND THAT THERE WAS NO INDICATION OF FRAUD, FAULT, MISREPRESENTATION, OR LACK OF GOOD FAITH ON THE PART OF THE EMPLOYEE OR ANY OTHER PERSON HAVING AN INTEREST IN OBTAINING WAIVER OF THE INDEBTEDNESS.

UPON FURTHER REVIEW OF THE FACTS SURROUNDING MR. STEEL'S OVERPAYMENT WE THINK THAT THE ERRONEOUS PAY INCREASE WAS NOT SO SIGNIFICANT AS TO NECESSARILY PUT MR. STEEL ON NOTICE THAT AN ERROR HAD BEEN MADE. IN THIS REGARD WE NOTE THAT THE ERROR RESULTED FROM MR. STEEL'S ADMINISTRATIVE AGENCY'S IMPLEMENTATION OF THE 1972 FEDERAL PAY INCREASE AND THAT THE RECORD HAS NOT CLEARLY ESTABLISHED THAT MR. STEEL KNEW, OR SHOULD HAVE KNOWN EXACTLY HOW MUCH ADDITIONAL PAY WAS DUE TO HIM BY THE OPERATION OF THAT GENERAL PAY INCREASE. FURTHERMORE, WE NOTE THAT BASED UPON MR. STEEL'S ACTUAL NET AND GROSS PAY BEFORE AND AFTER THE 1972 PAY INCREASE, HIS BIWEEKLY NET PAY WAS APPROXIMATELY 68 PERCENT OF HIS BIWEEKLY GROSS INCOME ($641.93 NET PAY OUT OF $934.40 GROSS PAY, AND $686.18 NET PAY OUT OF $1,013.60 GROSS PAY). THEREFORE, BASED ON THIS PERCENTAGE, HAD MR. STEEL RECEIVED THE PROPER GROSS PAY AFTER THE GENERAL PAY RAISE, $985.60, HIS PROPER NET TAKE HOME PAY WOULD HAVE BEEN APPROXIMATELY $670 - A DIFFERENCE AMOUNTING TO ONLY $16 PER PAY PERIOD FROM THAT NET PAY WHICH HE ACTUALLY RECEIVED.

IN ADDITION, WE CONSIDER IT SIGNIFICANT THAT WHILE MR. STEEL WAS FURNISHED LEAVE AND EARNINGS STATEMENTS DURING THE PERIOD OF OVERPAYMENTS, THERE IS NO EVIDENCE INDICATING THAT HIS GRADE AND STEP WERE STATED UPON THE FACE OF SUCH STATEMENTS. THUS, IT CANNOT BE SAID THAT RECEIPT OF THOSE DOCUMENTS CONSTITUTED CONSTRUCTIVE NOTICE TO HIM THAT HE HAD BEEN PLACED IN THE WRONG PAY CATEGORY AND, THEREFORE, WAS BEING PAID AT AN IMPROPER RATE.

ACCORDINGLY, WE HEREBY WAIVE MR. STEEL'S INDEBTEDNESS TO THE UNITED STATES. IF ANY SUMS WERE COLLECTED FROM HIM PURSUANT TO THE DETERMINATION OF MARCH 7, 1974, THE BUREAU OF CUSTOMS IS AUTHORIZED, UPON SUBMISSION OF A CLAIM FROM MR. STEEL, TO REFUND SUCH AMOUNTS.