B-203460, FEB 23, 1982

B-203460: Feb 23, 1982

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ERROR WAS CORRECTED 10 WEEKS LATER. EMPLOYEE WAS AWARE OF ERRONEOUS OVERPAYMENTS AND SHOULD HAVE EXPECTED GOVERNMENT TO SEEK RECOVERY OF AMOUNT OF OVERPAYMENTS WHEN ERROR WAS CORRECTED. SEC. 5584 (1976) IS DENIED. AN EMPLOYEE OF THE DEPARTMENT OF THE ARMY SEEKS FURTHER CONSIDERATION OF HER REQUEST FOR WAIVER OF HER INDEBTEDNESS TO THE UNITED STATES RESULTING FROM OVERPAYMENTS OF PAY WHICH WAS PARTIALLY DENIED BY OUR CLAIMS GROUP. HILL RECEIVED ERRONEOUS PAY WHICH WAS THE RESULT OF BOTH AN UNAUTHORIZED PAY ADJUSTMENT FOR A SPECIAL SALARY RATE EFFECTIVE OCTOBER 21. THE BASIS FOR DENIAL OF WAIVER OF THE $72 AMOUNT BY OUR CLAIMS GROUP WAS THAT WHEN AN EMPLOYEE RECEIVES PAYMENTS TO WHICH SHE KNOWS SHE IS NOT ENTITLED.

B-203460, FEB 23, 1982

DIGEST: EMPLOYEE RECEIVED ERRONEOUS WITHIN-GRADE INCREASE IN PAY AND NOTIFIED PERSONNEL OFFICE. ERROR WAS CORRECTED 10 WEEKS LATER. EMPLOYEE WAS AWARE OF ERRONEOUS OVERPAYMENTS AND SHOULD HAVE EXPECTED GOVERNMENT TO SEEK RECOVERY OF AMOUNT OF OVERPAYMENTS WHEN ERROR WAS CORRECTED. HER REQUEST FOR WAIVER UNDER 5 U.S.C. SEC. 5584 (1976) IS DENIED.

JANET M. HILL - REQUEST FOR WAIVER:

MS. JANET M. HILL, AN EMPLOYEE OF THE DEPARTMENT OF THE ARMY SEEKS FURTHER CONSIDERATION OF HER REQUEST FOR WAIVER OF HER INDEBTEDNESS TO THE UNITED STATES RESULTING FROM OVERPAYMENTS OF PAY WHICH WAS PARTIALLY DENIED BY OUR CLAIMS GROUP. FOR THE REASONS STATED BELOW, WE SUSTAIN THE ACTION OF OUR CLAIMS GROUP.

THE RECORD SHOWS THAT DURING THE PAY PERIODS BEGINNING OCTOBER 22, 1979, THROUGH MAY 17, 1980, MS. HILL RECEIVED ERRONEOUS PAY WHICH WAS THE RESULT OF BOTH AN UNAUTHORIZED PAY ADJUSTMENT FOR A SPECIAL SALARY RATE EFFECTIVE OCTOBER 21, 1979, AND A PREMATURE WITHIN-GRADE STEP INCREASE EFFECTIVE MARCH 9, 1980. MS. HILL DISCOVERED THE ERRONEOUS STEP INCREASE AND ON MARCH 17, 1980, SO ADVISED HER AGENCY PERSONNEL OFFICE. BY LETTER DATED MARCH 11, 1981, Z-2826836, OUR CLAIMS GROUP SUSTAINED MS. HILL'S REQUEST FOR WAIVER OF HER INDEBTEDNESS OF THE ERRONEOUS PAY ADJUSTMENT IN THE TOTAL AMOUNT OF $460.80, BUT DENIED HER REQUEST AS TO THE ERRONEOUS PAYMENTS ATTRIBUTABLE TO THE PREMATURE STEP INCREASE TOTALING $72.

THE BASIS FOR DENIAL OF WAIVER OF THE $72 AMOUNT BY OUR CLAIMS GROUP WAS THAT WHEN AN EMPLOYEE RECEIVES PAYMENTS TO WHICH SHE KNOWS SHE IS NOT ENTITLED, THE EMPLOYEE HAS A DUTY TO RETAIN THOSE AMOUNTS FOR REFUND TO THE GOVERNMENT ON DEMAND.

SECTION 5584 OF TITLE 5, U.S.C. (1976), AUTHORIZES THE COMPTROLLER GENERAL TO WAIVE CERTAIN CLAIMS -

"***THE COLLECTION OF WHICH WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE UNITED STATES ***."

THE LAW ALSO PROVIDES THAT THE COMPTROLLER GENERAL MAY NOT EXERCISE THAT WAIVER AUTHORITY:

"IF, IN HIS OPINION, THERE EXISTS, IN CONNECTION WITH THE CLAIM, AN INDICATION OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON THE PART OF THE EMPLOYEE ***."

IN HER REQUEST FOR FURTHER CONSIDERATION DATED APRIL 7, 1981, MS. HILL CONTENDS THAT SINCE THERE WAS NO FRAUD, MISREPRESENTATION, FAULT OR LACK OF GOOD FAITH ON HER PART, AND, IN VIEW OF THE WAIVER OF HER INDEBTEDNESS AS TO THE $460.80 REPRESENTING THE CONCURRENT OVERPAYMENTS REFERRED TO ABOVE, CONSISTENCY, LOGIC, AND REASONABLENESS WOULD DICTATE A WAIVER AS TO THE $72 INDEBTEDNESS.

WE DISAGREE WITH MS. HILL'S CONTENTIONS BECAUSE THERE IS A SIGNIFICANT DIFFERENCE BETWEEN THE TWO TYPES OF OVERPAYMENTS SHE RECEIVED. SHE WAS NOT AWARE OF THE ERROR IN THE UNAUTHORIZED ADJUSTMENT FOR THE SPECIAL SALARY RATE AND, THEREFORE, WAS ABSOLVED OF RESPONSIBILITY FOR THE $460.80 IN OVERPAYMENTS. HOWEVER, THE RECORD CLEARLY SHOWS THAT MS. HILL WAS AWARE OF THE OVERPAYMENTS RESULTING FROM THE PREMATURE WITHIN-GRADE STEP INCREASE WHEN THEY BEGAN TO OCCUR IN MARCH 1980, AND SHE NOTIFIED HER PERSONNEL OFFICE OF THE ERROR. ALTHOUGH THERE IS NO INDICATION OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON MS. HILL'S PART, WE HAVE CONSISTENTLY HELD THAT WHEN AN EMPLOYEE IS AWARE OF AN OVERPAYMENT OF PAY WHEN IT OCCURS, THE EMPLOYEE IS NOT ENTITLED TO RELIEF UNDER 5 U.S.C. SEC. 5584. IF HE ACCEPTS SUCH AN OVERPAYMENT, KNOWING IT TO BE ERRONEOUS, HE CANNOT REASONABLY EXPECT TO RETAIN IT AND SHOULD MAKE PROVISION FOR ITS REPAYMENT. SEE JAMES T. HARROD, B-195889, FEBRUARY 14, 1980, ANN 4. PELICK, B-189083, SEPTEMBER 13, 1978. ROBERT N. O'MAHONEY, B-188250, SEPTEMBER 19, 1977; AND THOMAS K. NAHULU, B-189657, AUGUST 18, 1977.

SINCE MS. HILL WAS AWARE OF THE OVERPAYMENTS RESULTING FROM THE ERRONEOUS STEP INCREASE, WHEN THEY OCCURRED, SHE COULD NOT REASONABLY EXPECT TO RETAIN THE EXCESS AMOUNTS WITHOUT BEING OBLIGATED TO MAKE REFUND WHEN THE ERROR WAS CORRECTED. B-171944, MARCH 23, 1971. THEREFORE, IT WOULD NOT BE AGAINST EQUITY AND GOOD CONSCIENCE TO REQUIRE REPAYMENT. ANN H. PELICK, SUPRA. ACCORDINGLY, THE CLAIMS GROUP'S DENIAL OF WAIVER OF THE $72 AMOUNT IS SUSTAINED.