B-195889, FEB 14, 1980

B-195889, FEB 14, 1980

DIGEST: EMPLOYEE WHO, KNOWING IT TO BE ERRONEOUS, ACCEPTS OVERPAYMENT OF PAY CANNOT REASONABLY EXPECT TO RETAIN IT AND SHOULD MAKE PROVISION FOR ITS REPAYMENT. COLLECTION IS NOT AGAINST EQUITY, GOOD CONSCIENCE, OR THE BEST INTERESTS OF THE UNITED STATES SO CLAIM MAY NOT BE WAIVED UNDER 5 U.S.C. SEC. 5584, EVEN THOUGH EMPLOYEE PROMPTLY BRINGS SITUATION TO ATTENTION OF PROPER AUTHORITIES. HARDSHIP IS NOT GROUND FOR WAIVER WHEN OTHER CIRCUMSTANCES PRECLUDE SUCH ACTION.

JAMES T. HARROD - WAIVER OF OVERPAYMENT - KNOWLEDGE OF ERROR:

MR. JAMES T. HARROD, A FORMER EMPLOYEE OF THE DEPARTMENT OF THE ARMY, NOW RETIRED, SEEKS FURTHER CONSIDERATION OF HIS REQUEST FOR WAIVER OF HIS INDEBTEDNESS TO THE UNITED STAES ARISING OUT OF AN ERRONEOUS PAYMENT OF PAY WHICH WAS DENIED BY OUR CLAIMS DIVISION.

MR. HARROD WAS REDUCED IN GRADE FROM WG-10 TO WG-8, ON SEPTEMBER 29, 1974. HE STATES THAT, INCIDENT TO HIS UNSUCCESSFUL APPEAL OF HIS DOWNGRADING, HE WAS TOLD THAT HE MIGHT BE PROMOTED TO WG-9 AND THAT HE MIGHT BE ENTITLED TO HAZARDOUS DUTY PAY. SOME MONTHS LATER ON APRIL 27, 1975, A PREVAILING RATE PAY ADJUSTMENT INCREASED MR. HARROD'S HOURLY RATE FROM $6.07 TO $6.33. HOWEVER, HIS NEW PAY RATE WAS ERRONEOUSLY ENTERED INTO THE PAYROLL COMPUTATION SYSTEM AS $6.63. AS A RESULT HE WAS OVERPAID $.30 PER HOUR FOR 26 PAY PERIODS OR 2,080 HOURS, A TOTAL OF $624.

IT IS INDICATED THAT MR. HARROD RECEIVED A PAYROLL CHANGE SLIP WHICH SHOWED HIS CORRECT RATE, $6.33, AND THAT HE ALSO RECEIVED EARNINGS AND LEAVE STATEMENTS WHICH SHOWED THE INCORRECT RATE, $6.63. MOREOVER, HE ACKNOWLEDGES THAT HE KNEW THAT HE WAS BEING PAID MORE THAN OTHERS IN HIS GRADE AND STEP. HOWEVER, HE BELIEVES THAT HE DID EVERYTHING THAT COULD BE REASONABLY EXPECTED OF HIM TO FIND AN EXPLANATION AND THAT HE IS, THEREFORE, NOT AT FAULT IN THIS MATTER. HE STATES (1) THAT HE INQUIRED AS TO WHETHER HE HAD BEEN GRANTED THE PREVIOUSLY MENTIONED PROMOTION OR HAZARDOUS DUTY PAY AND WAS INFORMED THAT THERE WAS NO RECORD OF ANY SUCH ACTION; (2) THAT HE DISCUSSED WITH HIS SUPERVISORS AND FINANCE AND PERSONNEL OFFICIALS "WHY I HAD RECEIVED MORE ON MY CHECK THAN I WAS SUPPOSED TO" WITHOUT RECEIVING A SATISFACTORY EXPLANATION; AND (3) THAT FINALLY AFTER ABOUT A YEAR HE WAS TOLD BY THE CHIEF OF FINANCE THAT THE MATTER HAD BEEN TAKEN CARE OF AND REFUND WAS NOT REQUESTED.

THE PROVISION OF LAW AUTHORIZING THE WAIVER OF CLAIMS OF THE UNITED STATES AGAINST EMPLOYEES ARISING OUT OF ERRONEOUS PAYMENTS OF PAY, 5 U.S.C. SEC. 5584, PERMITS SUCH WAIVERS ONLY WHEN THE COLLECTION OF THE ERRONEOUS PAYMENTS WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE UNITED STATES AND ONLY WHEN THERE IS NO INDICATION OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON THE PART OF THE EMPLOYEE, OR ANY OTHER PERSONS HAVING AN INTEREST IN OBTAINING WAIVER.

IT HAS BEEN CONSISTENTLY HELD THAT WHEN AN EMPLOYEE IS AWARE OF AN OVERPAYMENT OF PAY WHEN IT OCCURS, HE IS NOT ENTITLED TO RELIEF UNDER THIS PROVISION OF LAW. IF HE ACCEPTS SUCH AN OVERPAYMENT, KNOWING IT TO BE ERRONEOUS, HE CANNOT REASONABLY EXPECT TO RETAIN IT AND HE SHOULD MAKE PROVISION FOR ITS REPAYMENT. COLLECTION OF THIS OVERPAYMENT FROM HIM IS NOT AGAINST EQUITY, GOOD CONSCIENCE, OR THE BEST INTERESTS OF THE UNITED STATES. THEREFORE, THE CLAIM AGAINST HIM MAY NOT BE WAIVED UNDER 5 U.S.C. SEC. 5584, NOTWITHSTANDING THE FACT THAT HE MAY HAVE BROUGHT THE SITUATION PROMPTLY TO THE ATTENTION OF THE PROPER AUTHORITIES AND SOUGHT AN EXPLANATION OR CORRECTION OF THE ERROR. ANN J. PELICK, B-189083, SEPTEMBER 13, 1978; THOMAS K. NAHULU, B-189657, AUGUST 18, 1977.

IT IS CLEAR FROM THE RECORD THAT MR. HARROD WAS IMMEDIATELY AWARE THAT HE WAS BEING OVERPAID. THEREFORE, THE DENIAL OF HIS REQUEST FOR WAIVER OF THE OVERPAYMENT BY OUR CLAIMS DIVISION MUST BE SUSTAINED. MR. HARROD STATES THAT REPAYMENT WILL IMPOSE A HARDSHIP UPON HIM AND THIS IS REGRETTABLE. HOWEVER, HARDSHIP IS NOT A BASIS FOR WAIVER WHEN OTHER CIRCUMSTANCES PRECLUDE SUCH ACTION.