Request for Waiver of Overpayment of Compensation

A special Government employee appealed a Claims Division denial of his request for waiver of an overpayment of compensation. The claimant had been offered an intermittent appointment by the Government, and was informed by letter of his grade and pay rate. Subsequently, however, a Notification of Personnel Action (SF-50) was issued showing a higher grade and pay rate. The claimant's pay was based on the erroneous SF-50 until the error was discovered over a year later. The claimant submitted a request for waiver of the overpayment to the Claims Division, claiming that he was not aware of the overpayment until it was brought to his attention by the agency. He believed that his lack of knowledge of the overpayment was reasonable in view of his intermittent employment, resulting in pay checks for irregular amounts, and the fact that his leave and earnings statements did not show his grade, step, or annually salary. The Claims Division denied the request for waiver, stating that since the claimant had received a letter informing him of his expected salary, he should have noticed the discrepancy of over $6000 and brought it to the attention of agency officials. Waiver of overpayments of pay or allowances is authorized where there exists no indication of fraud, misrepresentation, fault, or lack of good faith on the part of the employee. In applying the statutory requirement that the employee be free from fault, GAO has held that if it is determined that a reasonable man under the circumstances would have made inquiry as to the correctness of the payment, but the employee involved did not, then the employee was not free from fault. Where an employee has the necessary records, which, if reviewed, would indicate overpayment, and the employee fails to review the accuracy of those records or fails to take corrective action, he is not without fault. GAO believed that the discrepancy in annual salary of over $6000 between that listed in the offer of employment and that contained in the SF-50, should have raised questions concerning the correct rate. Therefore, GAO believed that the claimant had at least constructive notice if not actual notice of the overpayment. Thus, the fact that the leave and earnings statement did not provide constructive notice was not relevant since GAO found that the claimant had already received at least constructive notice upon receipt of the erroneous SF-50. Accordingly, the Claims Division's denial of the request for waiver was affirmed.