B-201816, JUL 8, 1981

B-201816: Jul 8, 1981

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DIGEST: A SERVICE MEMBER WHO HAD A NEGATIVE LEAVE BALANCE OF 32 DAYS IN JULY 1975 WITHOUT A CORRESPONDING ENTRY ON HIS PAY ACCOUNT FOR COLLECTION OF THE VALUE OF THE LEAVE AFTER RECEIVING LEAVE AND EARNINGS STATEMENTS SHOULD HAVE KNOWN THAT SUBSEQUENT PAYMENTS WERE ERRONEOUS AND HE MAY NOT HAVE HIS UNCOLLECTED DEBT DUE TO EXCESS LEAVE WAIVED. WHEN THERE WAS A FAILURE TO MAKE DEDUCTIONS IN HIS PAY AFTER BEING REDUCED IN GRADE. HE WAS PARTIALLY AT FAULT FOR NOT QUESTIONING THE OVERPAYMENTS UPON RECEIPT OF HIS LEAVE AND EARNINGS STATEMENTS AND THESE OVERPAYMENTS ALSO MAY NOT BE WAIVED. THIS AMOUNT WAS SUBSEQUENTLY REDUCED TO $724.79 BY SETOFF OF AMOUNTS DUE HIM. THE DENIAL IS SUSTAINED. LIPPMANN WAS RELEASED FROM ACTIVE DUTY ON JANUARY 6.

B-201816, JUL 8, 1981

DIGEST: A SERVICE MEMBER WHO HAD A NEGATIVE LEAVE BALANCE OF 32 DAYS IN JULY 1975 WITHOUT A CORRESPONDING ENTRY ON HIS PAY ACCOUNT FOR COLLECTION OF THE VALUE OF THE LEAVE AFTER RECEIVING LEAVE AND EARNINGS STATEMENTS SHOULD HAVE KNOWN THAT SUBSEQUENT PAYMENTS WERE ERRONEOUS AND HE MAY NOT HAVE HIS UNCOLLECTED DEBT DUE TO EXCESS LEAVE WAIVED. FURTHER, WHEN THERE WAS A FAILURE TO MAKE DEDUCTIONS IN HIS PAY AFTER BEING REDUCED IN GRADE, RECEIVING A COURT-MARTIAL FORFEITURE, AND HAVING AN UNAUTHORIZED ABSENCE, HE WAS PARTIALLY AT FAULT FOR NOT QUESTIONING THE OVERPAYMENTS UPON RECEIPT OF HIS LEAVE AND EARNINGS STATEMENTS AND THESE OVERPAYMENTS ALSO MAY NOT BE WAIVED.

BRYAN E. LIPPMANN:

MR. BRYAN E. LIPPMANN, A FORMER MEMBER OF THE UNITED STATES MARINE CORPS, REQUESTS RECONSIDERATION OF OUR CLAIMS GROUP'S DENIAL OF HIS APPLICATION FOR WAIVER OF HIS DEBT TO THE UNITED STATES IN THE TOTAL AMOUNT OF $779.51. THIS AMOUNT WAS SUBSEQUENTLY REDUCED TO $724.79 BY SETOFF OF AMOUNTS DUE HIM. THE DEBT AROSE THROUGH OVERPAYMENTS OF PAY AND ALLOWANCES DUE TO EXCESS LEAVE, REDUCTION IN PAY GRADE, AN UNAUTHORIZED ABSENCE, AND FORFEITURE OF PAY. THE DENIAL IS SUSTAINED.

THE RECORD SHOWS THAT MR. LIPPMANN WAS RELEASED FROM ACTIVE DUTY ON JANUARY 6, 1976. PRIOR TO DISCHARGE, ALTHOUGH HE HAD ACCRUED ONLY 87 DAYS' LEAVE, HE USED 110 DAYS' LEAVE, RESULTING IN PERIODS OF EXCESS LEAVE TOTALING 23 DAYS. SINCE HE WAS PAID HIS PAY TIMELY WHILE IN EXCESS LEAVE STATUS, HE WAS OVERPAID PAY AND ALLOWANCES TOTALING $382.09. A COURT- MARTIAL SENTENCE ON NOVEMBER 5, 1975, REDUCED HIS PAY GRADE TO E-1 AND REQUIRED A FORFEITURE OF $150 PER MONTH FROM HIS PAY FOR A 2-MONTH PERIOD. DUE TO A DELAY IN ENTERING THIS INFORMATION IN HIS PAY ACCOUNT, HE WAS OVERPAID $85.56 SINCE ADJUSTMENTS WERE NOT MADE TO BASE HIS PAY ON THE REDUCED PAY GRADE AND AN ADDITIONAL $300 ATTRIBUTABLE TO THE FORFEITURE WAS NOT COLLECTED. ALSO, CONTRIBUTING TO THE OVERPAYMENT WAS THE FACT THAT ALLOTMENTS FROM HIS PAY WERE MADE DURING THE FORFEITURE PERIOD. ALSO, HIS PAY ACCOUNT WAS NOT REDUCED BY $11.86 FOR AN UNAUTHORIZED ABSENCE STATUS ON SEPTEMBER 1, 1973. THUS, THE OVERPAYMENTS CAUSED A TOTAL INDEBTEDNESS OF $779.51, AS REDUCED TO $724.79.

MR. LIPPMANN, IN HIS ORIGINAL REQUEST FOR WAIVER, CONTENDED IN ESSENCE THAT HE DID NOT KNOW OR SUSPECT THAT HE WAS BEING OVERPAID, THAT HE WAS IN CORRECTIONAL CUSTODY IN NOVEMBER FROM WHICH HE WAS NOT RELEASED UNTIL DECEMBER 8, 1975, AND THAT HE WAS NOT NOTIFIED BEFORE BEING DISCHARGED THAT HE WAS INDEBTED TO THE GOVERNMENT. WAIVER WAS DENIED SINCE HE HAD A DUTY TO BE AWARE OF HIS APPROXIMATE LEAVE BALANCE AND SHOULD HAVE EXPECTED HE WOULD BE REQUIRED TO REIMBURSE THE GOVERNMENT FOR THE EXCESS LEAVE. FURTHER, SINCE HE RECEIVED LEAVE AND EARNINGS STATEMENTS (LES'S) WHICH SHOWED THAT HE HAD BEEN OVERPAID IN SEPTEMBER 1973, AND THAT THE REQUIRED FORFEITURE AND REDUCTION IN PAY GRADE HAD NOT BEEN INITIATED, WAIVER IS PRECLUDED FOR THAT PORTION OF THE CLAIM.

IN HIS APPEAL, MR. LIPPMANN CONTENDS THAT HE WAS NOT AT FAULT IN REGARD TO THE INDEBTEDNESS, SINCE IT OCCURRED THROUGH ADMINISTRATIVE ERROR AND HE WAS NOT INFORMED OF THIS DEBT WHEN HE WAS DISCHARGED. IN ADDITION HE SUGGESTS THAT SINCE HE HAD BEEN REDUCED IN GRADE AND FINED, HE SHOULD HAVE BEEN GIVEN AN OPPORTUNITY TO STAY IN SERVICE UNTIL HE HAD SUFFICIENT ENTITLEMENTS TO CLEAR HIS RECORD OF THE DEBT.

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 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-193363, AUGUST 8, 1979.

AS A GENERAL RULE MEMBERS OF THE UNIFORMED SERVICES ARE NOT ENTITLED TO PAY AND ALLOWANCES WHILE IN AN EXCESS LEAVE STATUS, WITH CERTAIN EXCEPTIONS NOT APPLICABLE HERE. SEE 37 U.S.C. 502(B), AND DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCES ENTITLEMENTS MANUAL, PART 1, CHAPTER 3.

IN THE PRESENT SITUATION, MR. LIPPMANN WAS NOT ENTITLED TO PAY AND ALLOWANCES FOR THE PERIODS JUNE 11-30, 1975, AND JULY 1-3, 1975, WHEN HE WAS IN AN EXCESS LEAVE STATUS. PAYMENT RESULTED IN AN OVERPAYMENT OF $382.09. DURING THE PERIOD OF THE OVERPAYMENT HE REGULARLY RECEIVED LES'S AND HIS JULY 1975 LES REFLECTED A NEGATIVE LEAVE BALANCE OF 32 DAYS. MR. LIPPMANN SHOULD HAVE BEEN AWARE OF HIS CORRECT LEAVE ENTITLEMENT AFTER RECEIVING LES'S SHOWING EXCESS LEAVE. HE SHOULD HAVE REALIZED THAT DEDUCTIONS FROM HIS PAY AND ALLOWANCES SHOULD HAVE BEEN MADE. SINCE MR. LIPPMANN SHOULD HAVE KNOWN THAT HE HAD TAKEN LEAVE IN EXCESS OF HIS ENTITLEMENT AND SHOULD HAVE KNOWN THAT HE WOULD BE CHARGED FOR SUCH EXCESS LEAVE WE CONSIDER HIM AT LEAST PARTIALLY AT FAULT IN THE MATTER AND ARE PRECLUDED BY 10 U.S.C. 2774(B) FROM GRANTING HIS APPLICATION FOR WAIVER OF THE LEAVE OVERPAYMENTS.

AFTER BEING REDUCED IN PAY GRADE, RECEIVING A COURT-MARTIAL FORFEITURE, AND HAVING 1 DAY OF UNAUTHORIZED ABSENCE, MR. LIPPMANN WAS PROVIDED LES'S WHICH REVEALED EXACTLY THE ENTITLEMENTS AND DEDUCTIONS USED IN COMPUTING HIS NET PAY. THE LES'S INDICATED THAT APPROPRIATE CHANGES AND DEDUCTIONS IN PAY HAD NOT BEEN ENTERED AGAINST HIS PAY ACCOUNT. AN EXAMINATION OF THESE LES'S WOULD HAVE INDICATED THAT HE WAS RECEIVING MORE THAN HIS PROPER ENTITLEMENTS AND HE SHOULD HAVE PROMPTLY QUESTIONED PAY OFFICIALS REGARDING THE OVERPAYMENT. HIS FAILURE TO INVESTIGATE THE BASIS FOR OVERPAYMENT MADE HIM PARTIALLY AT FAULT, THEREBY PRECLUDING WAIVER OF THESE ADDITIONAL OVERPAYMENTS IN THE AMOUNT OF $386.42.

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 IN EQUITY AND GOOD CONSCIENCE TO MAKE RESTITUTION. SEE B-188595, JUNE 3, 1977; B-124770, SEPTEMBER 16, 1955; AND CASES CITED THEREIN.

SINCE THE ERRORS WERE DISCOVERED BY AN AUDIT OF MR. LIPPMANN'S PAY ACCOUNT AT THE MARINE CORPS FINANCE CENTER AFTER HIS DISCHARGE, THERE WAS NO BASIS TO COLLECT THE DEBT WHILE HE WAS STILL ON ACTIVE DUTY. FURTHER, WE ARE AWARE OF NO REGULATION OR OTHER LEGAL REQUIREMENT TO KEEP A MEMBER WHO DECLINED TO REENLIST OR REQUEST EXTENSION OF ENLISTMENT ON ACTIVE DUTY BEYOND THE EXPIRATION DATE OF HIS ENLISTMENT FOR THE PURPOSE OF DISCHARGING A DEBT TO THE GOVERNMENT.

ACCORDINGLY, THE ACTION TAKEN BY OUR CLAIMS GROUP IN DENYING WAIVER IN THIS CASE IS SUSTAINED.