B-200117.OM, OCT 30, 1980

B-200117.OM: Oct 30, 1980

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FGMSD - CLAIMS GROUP (ROOM 5858): RETURNED HEREWITH IS CLAIMS FILE NO. GRIMES WAS NOTIFIED THAT HE WOULD BE INVOLUNTARILY SEPARATED ON JUNE 28. THE DATE OF HIS SEPARATION WAS CHANGED THREE TIMES AND HE WAS FINALLY RELEASED FROM ACTIVE DUTY ON DECEMBER 31. 426.44 WHICH EXCEEDED THE AMOUNT TO WHICH HE WAS ENTITLED BY $3. SINCE HE STATES HE WAS DUE HIS PAY AND ALLOWANCES FOR UNUSED LEAVE. HE SUSPECTED HE WAS OVERPAID. HE BELIEVED THAT BECAUSE HIS SEPARATION DATE WAS CHANGED SEVERAL TIMES THE AFC DID THE CHECK AFTER LEARNING HIS SEPARATION DATE BUT BEFORE RECEIVING WORD THAT IT HAD BEEN POSTPONED. UPON LEARNING HE WAS STILL ON ACTIVE DUTY THEY ADDED THIS AMOUNT TO HIS REGULAR PAYCHECK. GRIMES WENT TO HIS FINANCE OFFICE TO VERIFY THAT HE WAS ENTITLED TO THE MONEY.

B-200117.OM, OCT 30, 1980

SUBJECT: REQUEST FOR WAIVER - JACK R. GRIMES - B-200117-O.M.

ASSOCIATE DIRECTOR, FGMSD - CLAIMS GROUP (ROOM 5858):

RETURNED HEREWITH IS CLAIMS FILE NO. Z-2717908, CONCERNING FORMER AIR FORCE MEMBER JACK R. GRIMES' REQUEST FOR WAIVER OF THE GOVERNMENT'S CLAIM AGAINST HIM IN THE AMOUNT OF $5,940.53. THE DEBT AROSE FROM ERRONEOUS PAYMENTS RECEIVED JUST PRIOR TO HIS SEPARATION FROM THE AIR FORCE.

MR. GRIMES ENTERED THE AIR FORCE IN 1962. PURSUANT TO A REDUCTION IN FORCE, MR. GRIMES WAS NOTIFIED THAT HE WOULD BE INVOLUNTARILY SEPARATED ON JUNE 28, 1974. HOWEVER, DUE TO MEDICAL PROBLEMS, THE DATE OF HIS SEPARATION WAS CHANGED THREE TIMES AND HE WAS FINALLY RELEASED FROM ACTIVE DUTY ON DECEMBER 31, 1974.

IN NOVEMBER 1974 MR. GRIMES RECEIVED AN END-OF-MONTH PAYMENT OF $4,426.44 WHICH EXCEEDED THE AMOUNT TO WHICH HE WAS ENTITLED BY $3,902.80. DECEMBER 1974 HE RECEIVED HIS REGULAR MID-MONTH CHECK OF $581.00, AN END- OF-MONTH PAYMENT OF $2,595.62 AND A FINAL PAY OF $14,642.64, A TOTAL OF $17,819.26 WHICH EXCEEDED HIS ENTITLEMENT BY $2,037.73. THUS, PRIOR TO SEPARATION, MR. GRIMES RECEIVED ERRONEOUS PAYMENTS TOTALLING $5,940.53.

ALTHOUGH MR. GRIMES EXPECTED TO RECEIVE A LARGE SUM OF MONEY, SINCE HE STATES HE WAS DUE HIS PAY AND ALLOWANCES FOR UNUSED LEAVE, READJUSTMENT PAY AND ANY BACK PAY DUE HIM AS A RESULT OF A RECORDS CHECK OF THE ACCOUNTING AND FINANCE CENTER (AFC) IN DENVER, HE SUSPECTED HE WAS OVERPAID. HE STATES THAT ALTHOUGH HE KNOWS THE AFC ORDINARILY DOES NOT DO A RECORDS CHECK UNTIL AFTER A MEMBER SEPARATES, HE BELIEVED THAT BECAUSE HIS SEPARATION DATE WAS CHANGED SEVERAL TIMES THE AFC DID THE CHECK AFTER LEARNING HIS SEPARATION DATE BUT BEFORE RECEIVING WORD THAT IT HAD BEEN POSTPONED. HE ASSUMED THAT THE AFC AUDITED HIS PAY, FOUND AN ADDITIONAL AMOUNT DUE HIM, AND THEREFORE, UPON LEARNING HE WAS STILL ON ACTIVE DUTY THEY ADDED THIS AMOUNT TO HIS REGULAR PAYCHECK.

MR. GRIMES WENT TO HIS FINANCE OFFICE TO VERIFY THAT HE WAS ENTITLED TO THE MONEY. THE FINANCE OFFICE SAID HE WAS BUT MR. GRIMES ASKED THE FINANCE OFFICE TO CHECK WITH THE AFC AND REQUEST THAT THE AFC REVIEW HIS FINANCE RECORD. MR. GRIMES STATES THAT PERSONNEL AT THE FINANCE OFFICE RECEIVED NOTIFICATION, BY TELEPHONE, FROM THE AFC THAT HE WAS ENTITLED TO THE MONEY. THROUGHOUT THIS PERIOD MR. GRIMES KEPT THE MONEY IN THE BANK TO INSURE HE COULD RETURN IT IF IT WAS DETERMINED TO HAVE BEEN AN ERRONEOUS PAYMENT. HOWEVER, ONCE HE HEARD FROM THE AFC, THROUGH HIS FINANCE OFFICE, THAT THE MONEY WAS HIS, HE USED IT TO PAY OFF HIS DEBTS.

TEN MONTHS AFTER HIS SEPARATION, THE AFC INFORMED MR. GRIMES THAT THE PAYMENTS WERE ERRONEOUS AND WOULD HAVE TO BE REPAID. IN APRIL 1976 MR. GRIMES APPLIED TO THE AFC FOR WAIVER OF THIS DEBT. THE REQUEST FOR WAIVER WAS FORWARDED TO CLAIMS DIVISION WITH A RECOMMENDATION THAT WAIVER BE DENIED BECAUSE MR. GRIMES ACKNOWLEDGED RECEIPT OF HIS LEAVE AND EARNINGS STATEMENTS AND THEREFORE WOULD HAVE BEEN AWARE OF AN OVERPAYMENT IN NOVEMBER 1974. HE SHOULD HAVE THEN EXPECTED HIS DECEMBER 1974 PAY TO BE ADJUSTED ACCORDINGLY. ALTHOUGH MR. GRIMES CONTENDS HE WAS ADVISED HE WAS ENTITLED TO THE PAYMENTS HE RECEIVED, THE AFC CONCLUDED THAT HE SHOULD HAVE REALIZED SUCH ADVICE WAS ERRONEOUS. MR. GRIMES WAS AN OFFICER WITH OVER 12 YEARS OF SERVICE AND HE SHOULD HAVE BEEN KNOWLEDGEABLE REGARDING HIS PAY.

ON NOVEMBER 27, 1978, CLAIMS DIVISION DENIED THE REQUEST FOR WAIVER. ESSENCE, IT WAS CONCLUDED THAT MR. GRIMES KNEW OR REASONABLY SHOULD HAVE KNOWN HE WAS NOT ENTITLED TO SUCH SUBSTANTIAL PAYMENTS FOR NOVEMBER AND DECEMBER 1974.

THE ERRONEOUS PAYMENTS WERE MADE AS THE RESULT OF ADMINISTRATIVE ERROR. IT APPEARS THAT MR. GRIMES SUSPECTED IMMEDIATELY THAT HE WAS BEING OVERPAID AND HE TOOK ACTION TO VERIFY WHETHER THE PAYMENTS WERE CORRECT WITH OFFICIALS AT HIS FINANCE OFFICE. HE ALSO ASKED THE FINANCE OFFICE TO CONTACT THE AFC AND ASK FOR A REVIEW OF HIS FINANCE RECORD. IN THE MEANTIME HE MAINTAINED THE MONEY IN A BANK ACCOUNT. THE OFFICIALS AT HIS FINANCE OFFICE AND AT THE AFC MISTAKENLY ASSURED HIM THE PAYMENTS WERE CORRECT.

IF A SERVICE MEMBER HAS REASON TO DEFINITELY KNOW THERE IS AN ERROR IN HIS RECORDS AND THAT AS A RESULT HE WAS BEING OVERPAID, WAIVER IS INAPPROPRIATE EVEN IF HE NOTIFIES THE PROPER OFFICIALS OF THE ERROR, SINCE IN THOSE CIRCUMSTANCES HE ALSO HAS A DUTY TO SET ASIDE THE OVERPAYMENTS FOR THEIR EVENTUALAL RETURN TO THE GOVERNMENT. B-188595, JUNE 3, 1977. IN SUCH CIRCUMSTANCES, IT IS NOT AGAINST EQUITY AND GOOD CONSCIENCE TO REQUIRE THE MEMBER TO MAKE RESTITUTION EVEN THOUGH ACCOUNTING CLERKS HE NOTIFIES MISTAKENLY ASSURE HIM HE IS BEING CORRECTLY PAID BUT THE MEMBER NEVERTHELESS HAS GOOD REASON TO KNOW THAT IN FACT HE IS NOT BEING CORRECTLY PAID AND THAT THE CLERKS ARE WRONG. B-193367, JANUARY 10, 1979.

HOWEVER, IF A SERVICE MEMBER SUSPECTS HE IS BEING OVERPAID, NOTIFIES THE PROPER AUTHORITIES OF HIS SUSPICIONS, AND IN RETURN RECEIVES REASONABLY PERSUASIVE, ALBEIT MISTAKEN, ASSURANCES THAT HIS PAY IS CORRECT, WAIVER OF THE OVERPAYMENTS UPON THEIR EVENTUAL DISCOVERY MAY BE ENTIRELY PROPER. SEE B-195707-O.M., FEBRUARY 14, 1980.

IN THE INSTANT CASE, AS SOON AS MR. GRIMES RECEIVED THE OVERPAYMENTS HIS SUSPICIONS WERE AROUSED. AS HE WAS ENTITLED TO READJUSTMENT PAY, PAY AND ALLOWANCES FOR UNUSED LEAVE, ETC., HE EXPECTED TO RECEIVE LARGE PAYMENTS BUT HE STILL WENT TO HIS FINANCE OFFICE TO VERIFY THEIR CORRECTNESS. THE MEANTIME HE ACTED PRUDENTLY AND IN GOOD FAITH IN DEPOSITING THE MONEY IN A BANK ACCOUNT UNTIL HIS INQUIRIES INTO THE MATTER WERE ANSWERED. THEN WENT FURTHER AND ASKED HIS FINANCE OFFICE TO CHECK WITH THE AFC. ONLY WHEN THE AFC VERIFIED THAT THE PAYMENTS WERE CORRECT DID MR. GRIMES BECOME CONVINCED HE WAS ENTITLED TO THE MONEY. IT IS OUR VIEW THAT IT WAS REASONABLE FOR HIM TO DO SO AND HE DID NOT ACT UNREASONABLY IN THEN USING THE EXCESS FUNDS. WE THEREFORE CONCLUDE THAT MR. GRIMES WAS NOT AT FAULT IN THE MATTER AND THAT COLLECTION OF THE OVERPAYMENTS WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTEREST OF THE UNITED STATES.

ACCORDINGLY, WE WAIVE THE GOVERNMENT'S $5,940.53 CLAIM AGAINST HIM. MR. GRIMES AND THE AIR FORCE AFC SHOULD BE ADVISED OF THIS ACTION.