B-198559, NOV 28, 1980

B-198559: Nov 28, 1980

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SUSPECTED THAT HE WAS RECEIVING ERRONEOUS PAYMENTS AND NOTIFIED DISBURSING OFFICIALS. HE FAILED TO REQUEST A COMPLETE EXPLANATION OF HIS PAY WHEN HIS DOUBTS CONCERNING THE CORRECTNESS OF THE PAYMENTS CONTINUED AND FAILED TO SET ASIDE SUCH PAYMENTS FOR EVENTUAL RETURN AT THE TIME THE ERROR WAS CORRECTED. ON THAT BASIS HE IS NOT WITHOUT FAULT IN THE MATTER SO AS TO PERMIT WAIVER OF THE ERRONEOUS PAYMENT. RESULTING FROM COLLECTION IS NOT SUFFICIENT REASON TO RETAIN PAYMENTS THAT HE SHOULD HAVE KNOWN DID NOT BELONG TO HIM. DENIAL OF THE WAIVER IS SUSTAINED. HE COMPLETED THE NECESSARY DOCUMENTS INDICATING THAT HIS SPOUSE WAS IN SERVICE AND THAT HE WAS NOT CLAIMING HER AS A DEPENDENT FOR BAQ PURPOSES.

B-198559, NOV 28, 1980

DIGEST: SERVICE MEMBER MARRIED TO ANOTHER SERVICE MEMBER WHO RECEIVED A PAYMENT OF $435 IN THE MIDDLE OF MONTH FOR RETROACTIVE PAYMENT OF BAQ AT THE WITH DEPENDENT RATE WHILE LIVING IN GOVERNMENT QUARTERS AND SUBSEQUENT INCREASES IN HIS REGULAR PAY ATTRIBUTABLE TO BAQ, SUSPECTED THAT HE WAS RECEIVING ERRONEOUS PAYMENTS AND NOTIFIED DISBURSING OFFICIALS. HOWEVER, HE FAILED TO REQUEST A COMPLETE EXPLANATION OF HIS PAY WHEN HIS DOUBTS CONCERNING THE CORRECTNESS OF THE PAYMENTS CONTINUED AND FAILED TO SET ASIDE SUCH PAYMENTS FOR EVENTUAL RETURN AT THE TIME THE ERROR WAS CORRECTED. ON THAT BASIS HE IS NOT WITHOUT FAULT IN THE MATTER SO AS TO PERMIT WAIVER OF THE ERRONEOUS PAYMENT. FURTHER, FINANCIAL HARDSHIP, ALONE, RESULTING FROM COLLECTION IS NOT SUFFICIENT REASON TO RETAIN PAYMENTS THAT HE SHOULD HAVE KNOWN DID NOT BELONG TO HIM.

PETTY OFFICER MICHAEL D. VERACINI, USN:

PETTY OFFICER MICHAEL D. VERACINI, USN, REQUESTS RECONSIDERATION OF OUR CLAIMS DIVISION'S AUGUST 1, 1979 DENIAL OF HIS APPLICATION FOR WAIVER OF HIS DEBT TO THE UNITED STATES IN THE TOTAL AMOUNT OF $1,223.61. THE DEBT AROSE FROM ERRONEOUS PAYMENTS OF BASIC ALLOWANCE FOR QUARTERS (BAQ) AT THE WITH DEPENDENT RATE. DENIAL OF THE WAIVER IS SUSTAINED.

THE RECORD SHOWS THAT PETTY OFFICER VERACINI MARRIED ANOTHER ACTIVE DUTY SERVICE MEMBER ON OCTOBER 14, 1977. HE COMPLETED THE NECESSARY DOCUMENTS INDICATING THAT HIS SPOUSE WAS IN SERVICE AND THAT HE WAS NOT CLAIMING HER AS A DEPENDENT FOR BAQ PURPOSES. HE REPORTED TO A NEW COMMAND ON NOVEMBER 18, 1977, WAS PAID $100 SPECIAL PAY ON NOVEMBER 21, 1977, AND AT THE END OF NOVEMBER 1977, HIS PAY ACCOUNT WAS RECONCILED AND HE WAS CORRECTLY PAID. APPARENTLY, HE WAS ASSIGNED TO GOVERNMENT QUARTERS ON ARRIVING AT HIS NEW STATION.

AT THE TIME THE DISBURSING OFFICE RECEIVED PETTY OFFICER VERACINI'S PERSONNEL DOCUMENTS ON DECEMBER 8, 1977, THE DISBURSING CLERK OVERLOOKED THE FACT THAT HIS SPOUSE WAS A SERVICE MEMBER AND HE ERRONEOUSLY CREDITED THE MEMBER'S PAY ACCOUNT WITH BAQ AT THE WITH DEPENDENT RATE EFFECTIVE OCTOBER 14, 1977. THE PAY ACCOUNT WAS ADJUSTED TO REFLECT THE INCREASE IN BAQ FROM OCTOBER 14, 1977, THROUGH DECEMBER 15, 1977, AND PETTY OFFICER VERACINI WAS PAID $435 ON DECEMBER 15, 1977, AN AMOUNT CONSIDERABLY IN EXCESS OF HIS NORMAL PAY.

THE DISBURSING CLERK STATES THAT WHEN THE MEMBER RECEIVED HIS DECEMBER LEAVE AND EARNINGS STATEMENT (LES) IN LATE JANUARY 1978, HE HAD INQUIRED ABOUT THE POSSIBILITY OF AN OVERPAYMENT. THE DISBURSING CLERK THEN ADVISED PETTY OFFICER VERACINI THAT THE OVERPAYMENT WAS DUE TO AN ERROR IN NOT INDICATING THE ENTITLEMENT TO BAQ ON THE LES. HE INDICATED THAT THIS WOULD EVENTUALLY BE CORRECTED BY SHOWING A CREDIT TO HIS PAY ACCOUNT FOR THE BAQ THUS RECONCILING THE LES WITH PAY RECEIVED. THE DISBURSING CLERK WAS UNAWARE THAT HE WAS MARRIED TO A SERVICE MEMBER.

A NEW DISBURSING CLERK PAID PETTY OFFICER VERACINI BAQ AT THE WITH DEPENDENT RATE FROM APRIL 1978 THROUGH JUNE 15, 1978. THEREAFTER, THE PERSONNEL FORM SHOWING HE WAS MARRIED TO A SERVICE MEMBER WAS LOCATED AND SUCH PAYMENT WAS DISCONTINUED. HOWEVER, HE WAS PAID BAQ AT THE SINGLE RATE FOR THE BALANCE OF JUNE, ALTHOUGH HE WAS RESIDING IN GOVERNMENT QUARTERS AND NOT ENTITLED TO SUCH PAYMENT. AFTER A REVIEW OF HIS ACCOUNT DISCLOSED THE ERRORS, HE WAS IMMEDIATELY NOTIFIED OF THE OVERPAYMENT.

PETTY OFFICER VERACINI, IN HIS ORIGINAL REQUEST FOR WAIVER, INDICATED THAT UPON ARRIVAL AT HIS NEW COMMAND HE QUESTIONED THE ACCURACY OF HIS FIRST CHECK AS IT UNQUESTIONABLY INCLUDED BAQ AND HE HAD BEEN ASSIGNED TO GOVERNMENT QUARTERS, BUT WAS INFORMED BY THE DISBURSING CLERK THAT THE EXCESS AMOUNTS LIKELY INCLUDED TRANSFER ENTITLEMENTS. HE ALSO NOTED THAT HE CONTINUED TO SUSPECT THAT HE WAS BEING OVERPAID AND WAS TOLD ON SUBSEQUENT INQUIRIES THAT THE OVERPAYMENT WAS DUE TO HIS MARRIAGE STATUS AND THAT THE ERRORS IN THE ACCOUNT WOULD BE CORRECTED. HE FURTHER STATED THAT PAYMENT WOULD CAUSE HIM FINANCIAL HARDSHIP.

IN HIS APPEAL, HE CONTENDS THAT WHEN REQUESTING A BREAKDOWN OF HIS PAY HE WAS TOLD THAT HIS LES'S WERE INCORRECT, BUT THAT HE WOULD BE PAID ON LOCAL COMPUTATIONS WHICH INCLUDED BAQ. ALSO, HE WAS INFORMED THAT HE SHOULD ADD ALL HIS ENTITLEMENTS AND IGNORE THE INDICATION OF ERRONEOUS PAYMENT. ALSO CONTENDS THAT HE INFORMED THE DISBURSING OFFICE THAT HIS WIFE WAS STATIONED IN WASHINGTON, AND STATES THAT HE WAS LED TO BELIEVE THAT SINCE HE HAD BEEN AUTHORIZED BAQ AT HIS LAST COMMAND AND SINCE HE WAS INVOLUNTARILY SEPARATED FROM HIS WIFE, HE WAS BEING SUBSIDIZED AS IN THE CASE OF A MEMBER AUTHORIZED A FAMILY SEPARATION ALLOWANCE. LASTLY HE CONTENDS THAT THE INDEBTEDNESS WAS DUE TO DISBURSING ERROR OCCURRING THROUGH NO FAULT OF HIS, AND THAT FURTHER REPAYMENT WOULD CAUSE EXTREME HARDSHIP.

SECTION 2774 OF TITLE 10, U.S.C. (1976), PROVIDES OUR AUTHORITY TO WAIVE CERTAIN DEBTS WHEN COLLECTION WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE UNITED STATES. HOWEVER, SUBSECTION 2774(B) PRECLUDES WAIVER IF, IN THE OPINION OF THE COMPTROLLER GENERAL -

"*** THERE EXISTS, IN CONNECTION WITH THE CLAIM, AN INDICATION OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON THE PART OF THE MEMBER ***"

WE INTERPRET THE WORD "FAULT", AS USED IN 10 U.S.C. 2774, AS INCLUDING SOMETHING MORE THAN A PROVEN OVERT ACT OR OMISSION BY THE MEMBER. THUS, WE CONSIDER FAULT TO EXIST IF IN THE LIGHT OF ALL OF THE FACTS IT IS DETERMINED THAT THE MEMBER SHOULD HAVE KNOWN THAT AN ERROR EXISTED AND TAKEN ACTION TO HAVE IT CORRECTED. THE STANDARD WE EMPLOY IS TO DETERMINE WHETHER A REASONABLE PERSON SHOULD HAVE BEEN AWARE THAT HE WAS RECEIVING PAYMENT IN EXCESS OF HIS PROPER ENTITLEMENT. SEE DECISIONS B-184514, SEPTEMBER 10, 1975, AND B-198450, FEBRUARY 26, 1979.

IN THE PRESENT SITUATION, PETTY OFFICER VERACINI HAS STATED THAT HE SUSPECTED THAT HE WAS RECEIVING AN ERRONEOUS PAYMENT OF BAQ AFTER RECEIVING HIS FIRST CHECK FOR THE PERIOD ENDING DECEMBER 15, 1977, IN THE AMOUNT OF $435. WHEN THIS OVERPAYMENT WAS CONFIRMED BY THE DISBURSING CLERK INFORMING HIM THAT HIS LES WAS INACCURATE AND DID NOT REFLECT HIS ENTITLEMENT TO BAQ, HE SHOULD HAVE QUESTIONED THE APPROPRIATE OFFICIALS AS TO WHY HE WAS RECEIVING BAQ AND THE RATE HE WAS BEING PAID. NOTWITHSTANDING THE COMMUNICATION FAILURE BETWEEN DISBURSING PERSONNEL AND PETTY OFFICER VERACINI, IT WOULD APPEAR THAT HE SHOULD HAVE BEEN AWARE THAT HIS PAY WAS INACCURATE, PARTICULARLY SINCE HE WAS LIVING IN GOVERNMENT QUARTERS.

THE FACT THAT THE MEMBER MADE SOME INQUIRIES ABOUT HIS PAY INDICATES AN INITIAL GOOD FAITH ON HIS PART. HOWEVER, AFTER RECEIVING THE LARGE ADDITIONAL PAYMENT ON DECEMBER 15, 1977, WHEN HE SUSPECTED HE WAS BEING OVERPAID AND CONTINUED TO RECEIVE PAY IN A SUBSTANTIALLY INCREASED AMOUNT THEREAFTER, HE SHOULD HAVE REQUESTED A COMPLETE EXPLANATION OF HIS PAY RATHER THAN A VERBAL ASSURANCE THAT IT WAS ACCURATE. FURTHERMORE, IT IS APPARENT FROM THE RECORD AND HIS OWN STATEMENT THAT HE CONTINUED TO DOUBT THE ACCURACY OF HIS PAY COMPUTATION. SINCE THE CORRECTNESS OF THE PAYMENTS RECEIVED AFTER DECEMBER 15, 1977, WERE SO DOUBTFUL, HE SHOULD HAVE, AT A MINIMUM, SET ASIDE THESE EXCESSIVE AMOUNTS UNTIL A DEFINITE DETERMINATION AND STATEMENT HAD BEEN MADE TO HIM EXPLAINING HIS ENTITLEMENT. FURTHER, HE SHOULD HAVE KNOWN THAT IF HE CONTINUED TO BE OVERPAID, HE WOULD EVENTUALLY BE REQUIRED TO REPAY THE ERRONEOUS AMOUNTS. SEE B-197275, MARCH 21, 1980.

THE FACT THAT THE OVERPAYMENTS WERE MADE THROUGH ADMINISTRATIVE ERROR DOES NOT RELIEVE AN INDIVIDUAL OF RESPONSIBILITY TO DETERMINE THE TRUE STATE OF AFFAIRS IN CONNECTION WITH OVERPAYMENTS. IT IS FUNDAMENTAL THAT PERSONS RECEIVING MONEY ERRONEOUSLY PAID BY A GOVERNMENT AGENCY OR OFFICIAL ACQUIRE NO RIGHT TO THE MONEY, SUCH PERSONS ARE BOUND BY EQUITY AND GOOD CONSCIENCE TO MAKE RESTITUTION. SEE DECISIONS B-188595, JUNE 3, 1977; B-124770, SEPTEMBER 16, 1955; AND CASES CITED THEREIN.

SINCE PETTY OFFICER VERACINI HAD A DUTY AND LEGAL OBLIGATION TO RETURN THE EXCESS SUMS OR SET ASIDE THIS AMOUNT FOR REFUND AT SUCH TIME AS THE ADMINISTRATIVE ERROR WAS CORRECTED, WE ARE UNABLE TO CONCLUDE THAT HE IS FREE FROM FAULT. THEREFORE, COLLECTION ACTION IS NOT AGAINST EQUITY AND GOOD CONSCIENCE NOR IS IT CONTRARY TO THE BEST INTERESTS OF THE UNITED STATES. FURTHER, FINANCIAL HARDSHIP RESULTING FROM COLLECTION IS NOT A SUFFICIENT REASON TO RETAIN THE PAYMENTS THAT HE SHOULD HAVE KNOWN DID NOT BELONG TO HIM. B-183460, MAY 28, 1975.

ACCORDINGLY, THE ACTION OF OUR CLAIMS DIVISION DENYING WAIVER IS SUSTAINED.