B-187240, NOV 11, 1976

B-187240, NOV 11, 1976

EMPLOYEE REQUESTED OPTIONAL LIFE INSURANCE COVERAGE BUT AGENCY ERRONEOUSLY STOPPED DEDUCTING PREMIUMS AFTER GENERAL SALARY INCREASE. EMPLOYEE'S REQUEST FOR WAIVER OF OVERPAYMENTS OF PAY UNDER 5 U.S.C. 5584 IS DENIED SINCE EMPLOYEE IS NOT FREE FROM FAULT BY FAILING TO EXAMINE HIS LEAVE AND EARNINGS STATEMENTS AND PAYROLL SLIPS TO DETERMINE CORRECTNESS OF HIS SALARY PAYMENTS.

FRED P. MCCLESKEY-- WAIVER OF OVERPAYMENTS OF PAY:

THIS ACTION IS IN RESPONSE TO THE APPEAL DATED JULY 22, 1976, OF MR. FRED P. MCCLESKEY OF THE DETERMINATION OF OUR CLAIMS DIVISION, DATED JUNE 2, 1976, DENYING WAIVER OF ERRONEOUS OVERPAYMENTS OF PAY UNDER THE PROVISIONS OF 5 U.S.C. 5584 (1970).

THE RECORD INDICATES THAT MR. MCCLESKEY, AN EMPLOYEE OF THE IMMIGRATION AND NATURALIZATION SERVICE, DEPARTMENT OF JUSTICE, ELECTED BOTH REGULAR AND OPTIONAL FEDERAL EMPLOYEES GROUP LIFE INSURANCE (FEGLI) COVERAGE ON FEBRUARY 12, 1968, AND DEDUCTIONS FROM HIS SALARY FOR BOTH REGULAR AND OPTIONAL PREMIUMS BEGAN ON MARCH 9, 1968. HOWEVER, ON JULY 14, 1968, DURING THE IMPLEMENTATION OF A GENERAL SALARY INCREASE, THE PREMIUM FOR OPTIONAL INSURANCE COVERAGE WAS NOT DEDUCTED DUE TO AN ADMINISTRATIVE ERROR, AND THIS NONDEDUCTION CONTINUED THROUGH AUGUST 31, 1974, RESULTING IN ERRONEOUS OVERPAYMENTS OF PAY IN THE AMOUNT OF $2,030.

OUR CLAIMS DIVISION SETTLEMENT DENYING WAIVER OF THE OVERPAYMENTS NOTED THAT EMPLOYEES HAVE A DUTY TO PERIODICALLY EXAMINE LEAVE AND EARNINGS STATEMENTS AND PAYROLL CHANGE FORMS, AND THAT, UNDER THE CIRCUMSTANCES, MR. MCCLESKEY SHOULD HAVE BEEN AWARE OF THE FAILURE TO DEDUCT THE OPTIONAL INSURANCE PREMIUMS FROM HIS PAY. ON APPEAL MR. MCCLESKEY DISAGREES WITH THE STATEMENT THAT EMPLOYEES HAVE A DUTY TO EXAMINE LEAVE AND EARNINGS STATEMENTS, AND HE STATES:

"I HAVE NEVER IN THE PAST REVIEWED PAYROLL INFORMATION AS I FELT NO NECESSITY TO DO SO AND I ACCEPTED MY PAY IN THE LIGHT OF MY CONSIDERATION THAT IT WAS CONSISTENT WITH THE RECORDS OF THOSE WHOSE DUTIES IT WAS TO KEEP THEM ACCURATELY."

MR. MCCLESKEY ARGUES THAT OUR OFFICE SHOULD LEND GREATER WEIGHT TO THE RECOMMENDATION OF HIS EMPLOYING AGENCY THAT THE OVERPAYMENTS BE WAIVED, AND HE STATES THAT HE WAS NEVER AWARE THAT DEDUCTIONS FOR INSURANCE WERE NOT BEING MADE UNTIL IT WAS CALLED TO HIS ATTENTION, PRESUMABLY IN 1974. FINALLY, MR. MCCLESKEY TAKES EXCEPTION TO THE STATEMENT IN THE CLAIMS DIVISION SETTLEMENT THAT HE HAS IN THE PAST BEEN EXTREMELY AWARE OF EXACT AMOUNT OF PAY DUE HIM SINCE THERE APPEARED IN OUR RECORDS SEVERAL CLAIMS BY HIM FOR PAY. WHILE MR. MCCLESKEY STATES THAT HE HAS NEVER FILED A CLAIM WITH OUR OFFICE, WE NOTE THAT MR. MCCLESKEY DID CORRESPOND WITH OUR OFFICE SOME 27 YEARS AGO REGARDING SEVERAL CLAIMS FOR OVERTIME PAY AND PAYMENT FOR ANNUAL LEAVE ACCRUALS WHILE EMPLOYED BY THE IMMIGRATION AND NATURALIZATION SERVICE. HOWEVER, THE FACT THAT MR. MCCLESKEY HAS PREVIOUSLY PRESENTED CALIMS TO OUR OFFICE HAS NO EFFECT ON OUR DETERMINATION IN THE PRESENT CASE.

THE AUTHORITY FOR THE WAIVER OF OVERPAYMENTS OF PAY AND ALLOWANCES IS CONTAINED IN 5 U.S.C. 5584 (1970), AND THAT SECTION PROVIDES THAT WHERE COLLECTION OF SUCH A CLAIM WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE UNITED STATES, IT MAY BE WAIVED BY THE COMPTROLLER GENERAL OF THE UNITED STATES UNLESS:

" * * * IN HIS OPINION, THERE EXISTS, IN CONNECTION WITH THE CLAIM, AN 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 * * * ."

OUR REGULATIONS IMPLEMENTING THAT STATUTORY PROVISION, CONTAINED IN 4 C.F.R. PART 91 (1976), PROVIDE, IN PART IN SECTION 91.5 FOR WAIVER OF AN ERRONEOUS PAYMENT WHENEVER:

"(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 OF ANY OTHER PERSON HAVING AN INTEREST IN OBTAINING 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 * * * ."

WITH REGARD TO THE QUESTION OF AN EMPLOYEE REVIEWING HIS LEAVE AND EARNINGS STATEMENTS, WE STATED IN B-184480, MAY 20, 1976:

" * * * WE CANNOT STRESS TOO HIGHLY THE IMPORTANCE OF A CAREFUL REVIEW BY EACH EMPLOYEE OF THE PAY DATA PROVIDED BY THE EMPLOYING AGENCY. THIS IS AN ESSENTIAL FUNCTION IN THE GOVERNMENT'S ATTEMPTS TO REDUCE PAYROLL ERRORS. EACH EMPLOYEE SHOULD CAREFULLY ANALYZE THE PERTINENT PAYROLL DOCUMENTS PROVIDED BY HIS AGENCY TO VERIFY THE ACCURACY OF SUCH DATA. ANY DISCREPANCIES SHOULD BE IMMEDIATELY REPORTED TO THE APPROPRIATE OFFICE FOR PROPER REMEDIAL ACTION."

IN THE PRESENT CASE, UPON ELECTING OPTIONAL INSURANCE COVERAGE, MR. MCCLESKEY RECEIVED A COPY OF HIS INDIVIDUAL PAY RECORD WHICH REFLECTED DEDUCTIONS OF $5.23 FOR REGULAR INSURANCE COVERAGE AND $6.00 FOR OPTIONAL COVERAGE, A TOTAL OF $11.23 PER PAY PERIOD. HOWEVER, MR. MCCLESKEY'S PAYROLL CHANGE CLIP FOR THE PAY PERIOD BEGINNING JULY 14, 1968, WHICH SHOWED A SUBSTANTIAL STATUTORY PAY INCREASE, REFLECTED A DEDUCTION OF ONLY $5.50 FOR INSURANCE (WITH AN APPARENT INCREASE OF 27 CENTS FOR REGULAR COVERAGE) AND NO BREAKDOWN BETWEEN REGULAR AND OPTIONAL INSURANCE PREMIUMS. THIS ERROR WENT UNDETECTED UNTIL 1974. WE HAVE BEEN ADVISED THAT THE DEPARTMENT OF JUSTICE NOW UTILIZES A REVISED LEAVE AND EARNINGS STATEMENT WHICH REFLECTS SEPARATELY THE DEDUCTIONS FOR REGULAR AND OPTIONAL PREMIUMS. THE ADMINISTRATIVE ERROR IN 1968 RESULTED IN REDUCTION OF MORE THAN 50 PERCENT IN THE EMPLOYEE'S INSURANCE DEDUCTIONS PER PAY PERIOD, AND WE HAVE ALSO BEEN ADVISED BY THE DEPARTMENT OF JUSTICE THAT THE EMPLOYEE RECEIVED COPIES OF INSURANCE BROCHURES ISSUED IN 1970 REGARDING INCREASES IN THE PREMIUM FOR OPTIONAL INSURANCE FROM $6 TO $17 PER PAY PERIOD (LATER REDUCED IN 1973 TO $10.50).

OUR OFFICE HAS LONG HELD THAT A WAIVER OF INDEBTEDNESS WOULD NOT BE GRANTED WHERE IT APPEARS THAT THE EMPLOYEE DID NOT VERIFY THE INFORMATION PROVIDED ON HIS PAYROLL CHANGE SLIPS OR HIS LEAVE AND EARNINGS STATEMENTS. SEE B-184574, JULY 1, 1976, AND CASES CITED THEREIN. MR. MCCLESKEY BELIEVES IT IS UNREASONABLE TO "TRANSFER" THE NEGLIGENCE OF THE EMPLOYING AGENCY TO HIM, AN "INNOCENT PARTY." WE ARE NOT SUGGESTING THAT THE ADMINISTRATIVE ERROR IS TRANSFERRED TO THE EMPLOYEE BUT RATHER WE FIND THAT THE EMPLOYEE, WHO HAS BEEN GIVEN THE MEANS TO VERIFY THE CORRECTNESS OF HIS PAY CHECKS AND HAS FAILED TO DO SO, IS NOT WITHOUT FAULT IN THE MATTER. THE EMPLOYEE'S AGENCY HAS A RESPONSIBILITY TO PREPARE PROPER PAYROLLS AND THE DUTY TO TAKE STEPS TO INSURE THAT THIS RESPONSIBILITY IS PROPERLY CARRIED OUT. THE EMPLOYEE, ON THE OTHER HAND, HAS THE RESPONSIBILITY OF VERIFYING THE CORRECTNESS OF THE PAYMENTS HE RECEIVES, AND WHERE A REASONABLE MAN WOULD HAVE MADE INQUIRY AS TO THE CORRECTNESS OF THE PAYMENT AND THE EMPLOYEE DID NOT, THEN HE IS NOT FREE FROM FAULT AND THE CLAIM MAY NOT BE WAIVED.

ACCORDINGLY, WE MUST SUSTAIN THE ACTION OF OUR CLAIMS DIVISION IN DENYING WAIVER OF THE OVERPAYMENTS.