B-195469.OM, OCT 21, 1980

B-195469.OM: Oct 21, 1980

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PRECIS-UNAVAILABLE COMPTROLLER GENERAL: HEREWITH ARE THE FILES RELATIVE TO THE CLAIMS OF THE UNITED STATES AGAINST HT1 JAMES L. THE MEMBERS HAVE REQUESTED WAIVER CONSIDERATION UNDER THE PROVISIONS OF 10 U.S.C. 2774 (SUPP. IT WAS HELD THAT "THE DETERMINATION THAT AN ERRONEOUS LUMP-SUM PAYMENT FOR LEAVE WAS MADE AUTOMATICALLY REQUIRES THE RECREDIT OF THE LEAVE INVOLVED AS WELL AS PLACING THE MEMBER IN DEBT FOR THE ERRONEOUS PAYMENT AND SINCE WE FIND NO AUTHORITY UNDER WHICH SUCH LEAVE CREDITS COULD BE WITHDRAWN BY VIRTUE OF THE WAIVER ACTION. NO SUCH ACTION IS AUTHORIZED WITH RESPECT TO LEAVE CREDITS.". BE WAIVED WITHOUT REGARD TO THE FACT THAT THE MEMBER RETAINS CREDIT FOR THE LEAVE ON WHICH THE LUMP-SUM PAYMENT WAS PREDICATED.

B-195469.OM, OCT 21, 1980

PRECIS-UNAVAILABLE

COMPTROLLER GENERAL:

HEREWITH ARE THE FILES RELATIVE TO THE CLAIMS OF THE UNITED STATES AGAINST HT1 JAMES L. BROWN, CHIEF PETTY OFFICER THOMAS W. GAWRYCH, AND SERGEANT GEORGE H. LADISON. THE MEMBERS HAVE REQUESTED WAIVER CONSIDERATION UNDER THE PROVISIONS OF 10 U.S.C. 2774 (SUPP. II).

IN B-190076-O.M., DATED DECEMBER 15, 1978, CASE OF JAMES L. HARRIS, IT WAS HELD THAT "THE DETERMINATION THAT AN ERRONEOUS LUMP-SUM PAYMENT FOR LEAVE WAS MADE AUTOMATICALLY REQUIRES THE RECREDIT OF THE LEAVE INVOLVED AS WELL AS PLACING THE MEMBER IN DEBT FOR THE ERRONEOUS PAYMENT AND SINCE WE FIND NO AUTHORITY UNDER WHICH SUCH LEAVE CREDITS COULD BE WITHDRAWN BY VIRTUE OF THE WAIVER ACTION, NO SUCH ACTION IS AUTHORIZED WITH RESPECT TO LEAVE CREDITS." THE CASE WENT ON FURTHER TO PROVIDE THAT ERRONEOUS PAYMENTS OF LUMP-SUM LEAVE MADE TO MILITARY MEMBERS MUST, IN EFFECT, BE WAIVED WITHOUT REGARD TO THE FACT THAT THE MEMBER RETAINS CREDIT FOR THE LEAVE ON WHICH THE LUMP-SUM PAYMENT WAS PREDICATED. WE BELIEVE THAT THIS DETERMINATION IS NOT ONLY AN ARTIFICIALLY COMPLEX SOLUTION TO A RELATIVELY SIMPLE PROBLEM, BUT IS IN DEROGATION OF THE COMPTROLLER GENERAL'S AUTHORITY AND THIS DIVISION'S DELEGATED AUTHORITY TO ACT UNDER THE WAIVER STATUTE. CF. 56 C.G. 587, 57 C.G. 554.

WITH RESPECT TO THE PAYMENT OF LSL DISCUSSED IN THAT CASE WE VIEW THE ACTION AS BASICALLY ONE OF ERRONEOUS PAYMENT RATHER THAN A PERSONNEL ACTION. THE MAN'S STATUS IS NOT AFFECTED, IT IS PRIMARILY A PAYMENT MATTER.

INITIALLY IN LSL CASES THERE ARE THREE ELEMENTS INVOLVED - LEAVE, PAY, AND DUTY. THE SERVICE AGREES TO PAY THE MEMBER TO RELINQUISH A CERTAIN NUMBER OF DAYS LEAVE, THUS ENSURING HIS PRESENCE DURING THE PERIOD IN A DUTY STATUS, AND THE MEMBER IS TO BE PAID A LUMP-SUM PAYMENT FOR THE TIME IN QUESTION - A QUID PRO QUO SINCE THE MEMBER IS ACTUALLY RECEIVING DOUBLE PAY FOR THE PERIOD INVOLVED.

UPON BUY BACK OF THE LEAVE THE POSITIONS OF THE TWO PARTIES, THE MEMBER AND THE SERVICE, HAVE CHANGED. THE SERVICE HAS PAID THE MEMBER FOR HIS LEAVE, WHICH THE MEMBER HAS RELINQUISHED, AND THE MEMBER HAS ACCEPTED THE MONETARY VALUE OF THE LEAVE AND PRESUMABLY SPENT IT, WHILE MAKING HIMSELF AVAILABLE FOR DUTY DURING THE PERIOD REPRESENTED BY THE LEAVE.

THE COMPARISON IN B-190076-O.M. BETWEEN THE ERRONEOUS SELLING OF LEAVE AND AN OVERPAYMENT RESULTING FROM AN EXCESSIVE CREDITING OF YEARS OF SERVICE, OR THE ERRONEOUS PAYMENT OF BAQ, IS NOT APT. IN EACH OF THE LATTER TWO CIRCUMSTANCES, THERE ARE CONTINUING ELIGIBILITY REQUIREMENTS THAT MUST BE PRESENT TO DETERMINE ENTITLEMENT, I.E., YEARS OF SERVICE OR DEPENDENTS. IF THEY ARE NOT PRESENT, THE ENTITLEMENT DOES NOT EXIST, AND THE PAYMENTS MUST BE DISCONTINUED. IN THE LSL SITUATION, YOU HAVE A ONE- TIME TRANSACTION - WITH NO CONTINUING REQUIREMENTS TO BE SATISFIED - WHICH IS COMPLETED UPON THE RELINQUISHMENT OF THE LEAVE, AND THE PAYMENT FOR THE DAYS INVOLVED.

TO TAKE THE POSITION ADVANCED IN B-190076-O.M. THAT UPON A DETERMINATION OF AN ERRONEOUS LSL PAYMENT THERE MUST BE AN AUTOMATIC RECREDITING OF THE LEAVE INVOLVED AND ALL PARTIES RETURNED TO SQUARE ONE IS AN EXCESSIVELY LEGALISTIC, IMPRACTICAL INTERPRETATION THAT DEFEATS THE EQUITABLE PURPOSE OF THE WAIVER STATUTE. UPON THE BUY BACK THE LEAVE WAS CONVERTED INTO MONEY, AND PAID TO THE MEMBER, WHO, WITHOUT ANY FAULT ON HIS PART HAS SPENT IT. THUS, THE TRANSACTION HAS BECOME ESSENTIALLY AN ERRONEOUS, ONE TIME PAYMENT OF MONEY AND THEREFORE SUBJECT TO WAIVER CONSIDERATION. HAS OFTEN BEEN HELD THAT ERRONEOUS PAYMENTS CAN BE WAIVED WITHOUT VALIDATING THE ENTIRE TRANSACTION OUT OF WHICH THEY AROSE. THERE IS NO PERMANENT OR RESIDUAL STATUS IN ERRONEOUS LSL CASES THAT MUST BE FOUND, AS IN THE EXAMPLES NOTED ABOVE, IN ORDER TO CONTINUE ENTITLEMENT TO SOME TYPE OF PAY OR ALLOWANCES.

THIS OFFICE HAS OFTEN RECOGNIZED THAT WAIVER ACTION IS NOT A MATTER OF RIGHT THAT ARISES SOLELY BY VIRTUE OF AN ERRONEOUS PAYMENT BEING MADE BY THE GOVERNMENT. RATHER, WAIVER OF A CLAIM MAY BE APPROVED UNDER 10 U.S.C. 2774(1976) IF "THE COLLECTION *** WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE UNITED STATES." IN THE THREE SUBMITTED CASES, THE MEMBERS DO NOT EXPECT THE LEAVE TO BE RESTORED IF WAIVER ACTION IS APPROVED. THEY RECEIVED WHAT THEY WANTED, THE LSL PAYMENTS. TO REQUIRE THE LEAVE TO BE RESTORED, AND AT THE SAME TIME REQUIRE THE DISREGARDING OF ITS RESTORATION AS A FACTOR BEARING ON WHETHER THE PAYMENT SHOULD BE WAIVED IN EQUITY AND GOOD CONSCIENCE, RESULTS IN UNDESERVED WINDFALLS TO THE INDIVIDUALS, AND AN UNNECESSARY AND UNDESERVED LOSS OF MONEY AND THE MEMBERS' DUTY TIME TO THE GOVERNMENT. THEN BEING UNABLE TO TAKE THAT FACTOR INTO CONSIDERATION IN MAKING A WAIVER DETERMINATION IS PARTICULARLY APPARENT IN THE CASE OF HT1 JAMES L. BROWN (Z-2729067). THE MEMBER CLEARLY STATES THAT HIS APPLICATION FOR WAIVER IS PREDICATED ON A PREFERENCE FOR THE MONEY RATHER THAN THE LEAVE. IT IS NOTED, HOWEVER, THAT THE MEMBER SUBSEQUENTLY RECEIVED A LUMP-SUM LEAVE SETTLEMENT BASED ON THE RECREDITED LEAVE. IF WE ARE TO FOLLOW THE GUIDELINES SET OUT IN B-190076-O.M., IT APPEARS THAT WE WOULD BE REQUIRED TO DISREGARD THAT FACTOR IN MAKING OUR WAIVER DETERMINATION.

IN B-166683, MAY 21, 1969, WE HELD THAT WAIVER ACTION UNDER 5 U.S.C. 5584 ON AN OVERPAYMENT OF SEVERANCE PAY SHOULD BE LIMITED TO THE DIFFERENCE BETWEEN SEVERANCE PAY AND RETROACTIVE ANNUITY RECEIVED DURING THE SAME PERIOD "SINCE THE STATUTORY PROVISIONS GOVERNING SEVERANCE PAY CLEARLY EVIDENCE AN INTENT ON THE PART OF THE CONGRESS TO PRECLUDE THE RECEIPT OF BOTH SEVERANCE PAY AND RETIREMENT ANNUITY FOR THE SAME PERIOD ***." BELIEVE A SIMILAR PRINCIPLE SHOULD BE FOLLOWED IN CASES INVOLVING LUMP-SUM LEAVE SETTLEMENTS SO AS TO AVOID THE DUAL RECEIPT OF RECREDITED LEAVE AND THE MONETARY VALUE OF THAT LEAVE.

ACCORDINGLY, WE REQUEST THAT B-190076-O.M., DECEMBER 15, 1978, BE REEXAMINED IN LIGHT OF THE FOREGOING.

IT SHOULD BE NOTED THAT THE ARMY, AS WELL AS THE NAVY AND AIR FORCE ARE OPPOSED TO THE SOLUTION PRESENTLY PROVIDED IN THE ABOVE MEMORANDUM OPINION. ONLY THE MARINE CORPS IN THE HARRIS CASE (B-190076-O.M.) WHICH PROMPTED THAT SOLUTION, SUPPORTS THIS POSITION.

INDORSEMENT

ASSOCIATE DIRECTOR, FGMSD - CLAIMS GROUP (ROOM 5858)

RETURNED. WE DO NOT AGREE WITH THE INTERPRETATION OF B-190076-O.M., DECEMBER 15, 1978, WHICH IS STATED IN THE SECOND PARAGRAPH OF YOUR SUBMISSION. WHILE IT IS TRUE THAT B-190076-O.M. STATES THAT PAYMENTS OF LUMP-SUM LEAVE WHICH ARE ERRONEOUS SHOULD BE CONSIDERED FOR WAIVER, IF REQUESTED B-190076-O.M. DOES NOT MANDATE THAT WAIVER, EITHER IN TOTO OR IN PART, BE GRANTED IN ALL CASES. IN THE LAST PARAGRAPH OF THE MEMORANDUM WE STATE THAT "WAIVER MAY BE AUTHORIZED IF APPROPRIATE." CLEARLY, YOUR DELEGATED AUTHORITY FOR THE PRIMARY CONSIDERATION OF WAIVER CASES IS NOT USURPED.

YOU SEEM TO CONTEND THAT A FACTOR TO BE CONSIDERED IN DETERMINING THE APPROPRIATENESS OF WAIVER IS THAT THE LEAVE HAS BEEN RECREDITED. WE DO NOT BELIEVE THAT THAT FACTOR IS RELEVANT TO WAIVER CONSIDERATION. WHETHER OR NOT WAIVER SHOULD BE GRANTED IN A PARTICULAR CASE DEPENDS UPON THE FACTS EXISTING AT THE TIME OF AND THE FACTS SURROUNDING THE PAYMENT THAT HAS BEEN FOUND TO BE ERRONEOUS. THE CIRCUMSTANCES SURROUNDING THE PAYMENT AT THE TIME IT IS MADE ARE THE ONES TO BE EXAMINED TO DETERMINE WHETHER WAIVER SHOULD BE GRANTED, NOT THE FACTS EXISTING AT A LATER TIME WHEN THE PAYMENT HAS BEEN FOUND TO BE ERRONEOUS AND THE LEAVE RECREDITED.

IN ALL WAIVER CASES, PAYMENT OR A BENEFIT OF SOME TYPE TO WHICH A MEMBER OR EMPLOYEE IS NOT LEGALLY ENTITLED IS VALIDATED. IF A MEMBER'S ACCRUED LEAVE IS NOT RECREDITED, BUT REPAYMENT IS "WAIVED," NOTHING HAS REALLY HAPPENED, THE MEMBER IS IN PRECISELY THE SAME POSITION AS HE OR SHE WAS PRIOR TO THE "WAIVER." IN ESSENCE WE WOULD VALIDATE A TRANSACTION SPECIFICALLY PRECLUDED BY LAW, I.E., THE LUMP-SUM LEAVE PAYMENT. IN THE SAME MANNER, IF THE LEAVE IS RECREDITED, BUT THE PAYMENT IS COLLECTED, THEN THE MEMBER IS STILL NO BETTER OFF THAN HE WAS BEFORE; HE HAS RECEIVED NO BENEFIT. ONLY WHEN WAIVER OF REPAYMENT IS GRANTED AND LEAVE RECREDITED HAS THE EMPLOYEE BEEN GIVEN THE ADDITIONAL, EQUITABLE BENEFIT INTENDED BY THE WAIVER STATUTES. THE VALIDATED PAYMENT IN EVERY WAIVER CASE IS A "WINDFALL" TO THE EMPLOYEE. WITHOUT THAT "WINDFALL" THERE HAS BEEN NO BENEFIT.

WE NOTE THAT THE CIVILIAN WAIVER CASES ARE NOW IN ACCORD WITH THE MILITARY CASES. SEE MATTER OF VINCENT T. OLIVER, B-196063, APRIL 18, 1980, 59 COMP.GEN. (1980). WE BELIEVE THAT OUR VIEW HERE IS IN ACCORD WITH 56 COMP.GEN. 587 (1977) AND 57 COMP.GEN. 554 (1978), IN THAT THE NET MONETARY INDEBTEDNESS IS THE

THE INEQUITY INVOLVED IN AUTOMATICALLY RECREDITING LEAVE AND ONLY AMOUNT SUBJECT TO WAIVER. IN THE CASES PRESENTED HERE THERE ARE NO PAYMENTS DUE THE MEMBERS TO SET OFF AGAINST THE AMOUNT PAID FOR THE LUMP-SUM LEAVE; THEREFORE, THAT ENTIRE AMOUNT IS THE NET INDEBTEDNESS.

ACCORDINGLY, WE DO NOT BELIEVE THAT OUR POSITION SET OUT IN B-190076 O.M. SHOULD BE MODIFIED. THE CASES SUBMITTED ARE RETURNED FOR INDIVIDUAL CONSIDERATION BY YOU, APPLYING THE USUAL STANDARDS FOR WAIVER.