B-183059, APR 1, 1975

B-183059, APR 1, 1975

REEMPLOYED ANNUITANT REQUESTED WAIVER OF OVERPAYMENTS OF PAY FROM MAY 21, 1968, THROUGH MARCH 30, 1974, RESULTING FROM IMPROPER DEDUCTIONS OF HIS ANNUITY PAYMENTS FROM HIS PAY. THE AMOUNT OF $1,395.73, OVERPAYMENTS FOR THE PERIOD JANUARY 7, 1973, TO MARCH 30, 1974, MAY NOT BE WAIVED SINCE, WHILE IT WAS INEQUITABLE TO REQUIRE COLLECTION OF OVERPAYMENTS BEFORE JANUARY 7, 1973, EMPLOYEE WAS ON NOTICE AFTER THAT DATE THAT HE MIGHT BE RECEIVING OVERPAYMENTS. HOWEVER, IN VIEW OF THE EMPLOYEE'S SMALL SALARY IN RELATION TO THE DEBT AND HIS AGE AND FAILING HEALTH, HIS DEBT MAY BE CONSIDERED FOR COMPROMISE, ETC., UNDER 5 U.S.C. SEC. 952(B).

WALTER E. DANIELS - WAIVER OF OVERPAYMENT OF PAY:

THIS ACTION IS TAKEN PURSUANT TO A LETTER OF JULY 31, 1974, FORWARDED TO OUR OFFICE BY THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (HEW) ON SEPTEMBER 24, 1974, WHEREIN MR. WALTER E. DANIELS, AN EMPLOYEE OF HEW ASKS FOR RECONSIDERATION OF THE ACTION OF OUR TRANSPORTATION AND CLAIMS DIVISION (TCD) WHICH, BY LETTER OF JUNE 13, 1974, TO THE OFFICE OF GENERAL COUNSEL, HEW, DENIED IN PART MR. DANIELS' REQUEST FOR WAIVER OF ERRONEOUS PAYMENT OF PAY.

THE RECORD INDICATES THAT MR. DANIELS HAD BEEN RECEIVING CIVIL SERVICE ANNUITY PAYMENTS SINCE JANUARY 12, 1968, AND THAT HE HAD BEEN EMPLOYED AS A GUARD AT THE NATIONAL INSTITUTES OF HEALTH (NIH) SINCE MAY 12, 1968, SUBJECT TO YEARLY TEMPORARY REAPPOINTMENTS. AN AUDIT OF HIS PAY RECORDS FOR THE ENTIRE PERIOD OF HIS EMPLOYMENT AS A REEMPLOYED ANNUITANT AT NIH, FROM MAY 12, 1968, THROUGH MARCH 30, 1974, REVEALED AN OVERPAYMENT IN THE AMOUNT OF $9,310.15, COMPRISING AN OVERPAYMENT OF BASE PAY IN THE GROSS AMOUNT OF $9,579.52 AND OVERTIME PAY IN THE AMOUNT OF $25.04, AND A NET UNDERPAYMENT OF NIGHT, SUNDAY AND HOLIDAY PREMIUM PAY IN THE TOTAL AMOUNT OF $294.41. MOST OF THE OVERPAYMENT RESULTED FROM FAILURE TO DEDUCT THE PROPER AMOUNT OF ANNUITY FROM MR. DANIELS' PAYCHECKS - UNDERDEDUCTIONS AND NONDEDUCTIONS OCCURRED FREQUENTLY THROUGH HIS EMPLOYMENT AT NIH. IN THIS CONNECTION MR. DANIELS ALLEGES IN HIS LETTER OF JULY 31, 1974, THAT: "MY PAY HAS STILL NOT BEEN STRAIGHTENED OUT AND IS PRESENTLY SOME FORTY DOLLARS ($40.00) SHORT EACH PAYDAY."

THE TCD, IN ITS LETTER OF JUNE 13, 1974, WAIVED $7,914.42 OF THE GOVERNMENT'S $9,310.15 OVERPAYMENT TO MR. DANIELS. THE TCD STATED THAT DUE TO FLUCTUATIONS IN PAY MR. DANIELS COULD NOT KNOW OF THE OVERPAYMENTS AND THAT IT WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE TO REQUIRE HIM TO RETURN THE $7,914.42 WHICH HE WAS OVERPAID BEFORE HE WAS NOTIFIED ON JANUARY 20, 1973, THAT ERRORS HAD BEEN MADE IN COMPUTING HIS PAY THROUGH JANUARY 6, 1973. THE TCD DID NOT WAIVE THE OVERPAYMENTS WHICH OCCURRED FOR THE PERIOD OF JANUARY 7, 1973, THROUGH MARCH 30, 1974, IN THE TOTAL AMOUNT OF $1,395.73 SINCE MR. DANIELS WAS PLACED ON NOTICE THAT HE WAS BEING OVERPAID AND WAS AT LEAST PARTIALLY AT FAULT FOR NOT QUESTIONING THE CORRECTNESS OF HIS PAY AFTER THAT DATE. MR. DANIELS APPEALS THE DETERMINATION NOT TO WAIVE THE OVERPAYMENT FOR THE PERIOD OF JANUARY 7, 1973, THROUGH MARCH 30, 1974.

THE STANDARDS FOR WAIVER OF CLAIMS ARISING OUT OF AN ERRONEOUS PAYMENT OF PAY ARE FOUND IN 4 C.F.R. 91-93 (1974), THE IMPLEMENTING REGULATIONS TO 5 U.S.C. SEC. 5584 (SUPP. III, 1973). SECTION 91.5(C) PROVIDES FOR WAIVER WHERE:

"(C) 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 OF FRAUD, MISREPRESENTATION, FAULT OR LACK OF GOOD FAITH ON THE PART OF THE EMPLOYEE OR MEMBER OR ANY OTHER PERSON HAVING AN INTEREST IN OBTAINING A WAIVER OF THE CLAIM. 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 NECESSARILY MUST DEPEND UPON THE FACTS EXISTING IN THE PARTICULAR CASE. ***"

WE HAVE CONSISTENTLY HELD THAT WAIVER IS PRECLUDED WHERE AN EMPLOYEE KNOWS OR SHOULD KNOW THAT HE IS BEING OVERPAID, OR WHERE A REASONABLE PERSON IN THE POSITION OF THE OVERPAID EMPLOYEE WOULD AT LEAST QUESTION THE ACCURACY OF HIS PAY. B-168922, MAY 5, 1970; B-171944, MARCH 23, 1971; B-171487, JANUARY 26, 1971; B-174059, OCTOBER 8, 1971; B-172117, MAY 12, 1972; B-168823, FEBRUARY 17, 1970. AFTER MR. DANIELS WAS PLACED ON NOTICE IN JANUARY 1973, THAT HIS PAY WAS NOT BEING COMPUTED CORRECTLY HE SHOULD HAVE BEEN SENSITIVE TO POSSIBLE OVERPAYMENTS IN THE FUTURE. IN THIS CONNECTION WE NOTE THAT THE OVERPAYMENT BEGINNING ON OCTOBER 14, 1973, THE EFFECTIVE DATE OF A NEW FEDERAL PAY RAISE, RESULTED IN AN INCREASE OF ALMOST $90 MORE PER PAY PERIOD THAN HE SHOULD HAVE RECEIVED. THE PREVIOUS NOTICE AND THE SUBSEQUENT LARGE INCREASE OF PAY SHOULD HAVE ALERTED MR. DANIELS TO POSSIBLE OVERPAYMENTS AND HE SHOULD HAVE INQUIRED ABOUT THE ACCURACY OF HIS PAY. IN LIGHT OF THE RELEVANT PROVISIONS OF 5 U.S.C. SEC. 5584 AND THE IMPLEMENTING REGULATIONS WE HAVE NO ALTERNATIVE BUT TO CONCLUDE THAT HE WAS PARTIALLY AT FAULT IN NOT VERIFYING THE ACCURACY OF HIS PAYCHECKS AFTER JANUARY 20, 1973. ACCORDINGLY, HIS REQUEST FOR ADDITIONAL WAIVER MUST BE DENIED.

WHILE WE CANNOT AUTHORIZE A COMPLETE WAIVER OF THE GOVERNMENT'S ERRONEOUS OVERPAYMENTS TO HIM, WE POINT OUT THAT SUBSECTION 3(B) OF THE FEDERAL CLAIMS COLLECTION ACT OF 1966, APPROVED JULY 19, 1966, 31 U.S.C. SEC. 952(B) (1970), AUTHORIZES THE HEAD OF AN AGENCY OR HIS DESIGNEE, PURSUANT TO REGULATIONS PRESCRIBED BY HIM AND IN CONFORMITY WITH STANDARDS AS MAY BE PROMULGATED JOINTLY BY THE ATTORNEY GENERAL AND THE COMPTROLLER GENERAL TO (1) COMPROMISE CLAIMS BY THE GOVERNMENT TOTALLING LESS THAN $20,000, OR (2) CAUSE COLLECTION ACTION ON ANY SUCH CLAIM TO BE TERMINATED OR SUSPENDED WHERE IT APPEARS THAT NO PERSON LIABLE ON THE CLAIM HAS THE PRESENT OR PROSPECTIVE FINANCIAL ABILITY TO PAY ANY SIGNIFICANT SUM THEREON OR THAT THE COST OF COLLECTING THE CLAIM IS LIKELY TO EXCEED THE AMOUNT OF RECOVERY.

THE STANDARDS REFERRED TO IN THE ACT HAVE BEEN PROMULGATED AND PUBLISHED IN TITLE 4 OF THE CODE OF FEDERAL REGULATIONS. SECTION 103.2 OF THESE REGULATIONS STATES IN PERTINENT PART:

"SEC. 103.2 INABILITY TO PAY.

"A CLAIM MAY BE COMPROMISED PURSUANT TO THIS PART IF THE GOVERNMENT CANNOT COLLECT THE FULL AMOUNT BECAUSE OF (A) THE DEBTOR'S INABILITY TO PAY THE FULL AMOUNT WITHIN A REASONABLE TIME, OR (B) THE REFUSAL OF THE DEBTOR TO PAY THE CLAIM IN FULL AND THE GOVERNMENT'S INABILITY TO ENFORCE COLLECTION IN FULL WITHIN A REASONABLE TIME BY ENFORCED COLLECTION PROCEEDINGS. IN DETERMINING THE DEBTOR'S INABILITY TO PAY THE FOLLOWING FACTORS, AMONG OTHERS, MAY BE CONSIDERED: AGE AND HEALTH OF THE DEBTOR; PRESENT AND POTENTIAL INCOME; INHERITANCE PROSPECTS; THE POSSIBILITY THAT ASSETS HAVE BEEN CONCEALED OR IMPROPERLY TRANSFERRED BY THE DEBTOR; THE AVAILABILITY OF ASSETS OR INCOME WHICH MAY BE REALIZED UPON BY ENFORCED COLLECTION PROCEEDINGS."

THE RECORD INDICATES THAT MR. DANIELS' DEBT IS LARGE, CONSIDERING HIS LOW EARNINGS AND THAT HE IS RATHER OLD AND IN FAILING HEALTH. THEREFORE, IT WOULD APPEAR PROPER FOR NIH TO CONSIDER THE PROVISIONS OF THE FEDERAL CLAIMS COLLECTION ACT OF 1966 IN ENFORCING THE COLLECTION OF OVERPAYMENTS MADE TO MR. DANIELS BETWEEN JANUARY 7, 1973, AND MARCH 30, 1974.