Request for Waiver of Overpayment

A civilian employee of the Navy was overpaid due to an administrative error which resulted in his promotion to a higher grade than he should have been. The error was compounded when he was later promoted again. The error was not discovered for 2 years, and the Navy recommended that the overpayment paid after the date of discovery be disallowed and the balance of the overpayment be waived. The Claims Division denied the waiver because the employee, based on his grade level and experience, should have known that the step level was incorrect and should have questioned the appropriate officials. The employee believed the waiver was proper because he had little or no time to check for administrative errors since he worked in various locations away from the office which made the errors. The small amounts of the overpayments, cost of living increases, and the mailing of his checks directly to the bank made the errors difficult to detect. The agency concurred with the employee's views. GAO has held that waiver is proper if a relatively small error each pay period is difficult to detect because of pay fluctuation, and if the employee is not otherwise on notice of the error. In this case, the relatively small overpayments would have been difficult to discover. The Claims Division's denial of the waiver was reversed, and the employee's request for waiver was granted.