B-203868, SEP 30, 1981

B-203868: Sep 30, 1981

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SINCE EMPLOYEE WAS ALSO FURNISHED LEAVE AND EARNINGS STATEMENTS ENABLING HIM TO VERIFY CORRECTNESS OF HIS PAY. OVERPAYMENTS MAY NOT BE WAIVED SINCE HE WAS AT LEAST PARTIALLY AT FAULT IN FAILING TO PROMPTLY EXAMINE RECORDS AND REPORT ERROR. KELLEY III - WAIVER OF OVERPAYMENT OF SALARY: THIS DECISION IS IN RESPONSE TO AN APPEAL BY MR. OUR CLAIMS GROUP SETTLEMENT IS SUSTAINED FOR THE FOLLOWING REASONS. KELLEY WAS AN EMPLOYEE OF THE DEPARTMENT OF NAVY. A STANDARD FORM 50 ANNOUNCING THIS TEMPORARY PROMOTION WAS ISSUED OCTOBER 1. 1979 AND STATED THAT IT WAS NOT TO EXCEED NOVEMBER 20. WAS NOT ISSUED UNTIL MAY 12. KELLEY CONTINUED TO RECEIVE THE HIGHER SALARY FOR NINE PAY PERIODS AFTER HIS TEMPORARY PROMOTION WAS TERMINATED.

B-203868, SEP 30, 1981

DIGEST: EMPLOYEE CONTINUED TO RECEIVE SAME GROSS SALARY FOR 9 PAY PERIODS AFTER TERMINATION OF TEMPORARY PROMOTION. STANDARD FORM 50 GAVE NOTICE OF TEMPORARY PROMOTION TERMINATION DATE. SINCE EMPLOYEE WAS ALSO FURNISHED LEAVE AND EARNINGS STATEMENTS ENABLING HIM TO VERIFY CORRECTNESS OF HIS PAY, OVERPAYMENTS MAY NOT BE WAIVED SINCE HE WAS AT LEAST PARTIALLY AT FAULT IN FAILING TO PROMPTLY EXAMINE RECORDS AND REPORT ERROR. FINANCIAL HARDSHIP CANNOT FORM BASIS FOR WAIVER WHEN OTHER CIRCUMSTANCES PRECLUDE SUCH ACTION.

VERNON B. KELLEY III - WAIVER OF OVERPAYMENT OF SALARY:

THIS DECISION IS IN RESPONSE TO AN APPEAL BY MR. VERNON B. KELLEY III, OF OUR CLAIMS GROUP SETTLEMENT OF APRIL 16, 1981 (Z-2829159) DENYING HIS REQUEST FOR WAIVER UNDER 5 U.S.C. SEC. 5584 (1976) OF AN OVERPAYMENT OF COMPENSATION. OUR CLAIMS GROUP SETTLEMENT IS SUSTAINED FOR THE FOLLOWING REASONS.

MR. KELLEY WAS AN EMPLOYEE OF THE DEPARTMENT OF NAVY, GRADE GS-12, STEP 3. MR. KELLEY RECEIVED A TEMPORARY PROMOTION TO GRADE GS-13, STEP 1, EFFECTIVE SEPTEMBER 23, 1979. A STANDARD FORM 50 ANNOUNCING THIS TEMPORARY PROMOTION WAS ISSUED OCTOBER 1, 1979 AND STATED THAT IT WAS NOT TO EXCEED NOVEMBER 20, 1979. THE STANDARD FORM 50 TERMINATING THE TEMPORARY PROMOTION EFFECTIVE NOVEMBER 21, 1979, WAS NOT ISSUED UNTIL MAY 12, 1980. THROUGH AN ADMINISTRATIVE ERROR, MR. KELLEY CONTINUED TO RECEIVE THE HIGHER SALARY FOR NINE PAY PERIODS AFTER HIS TEMPORARY PROMOTION WAS TERMINATED. AFTER THAT NINTH PAY PERIOD, MR. KELLEY WAS PROPERLY RECEIVING THE SALARY OF A GRADE GS-13, STEP 1, BECAUSE OF A SUBSEQUENT PERMANENT PROMOTION. THE OVERPAYMENT ERROR WAS DISCOVERED SHORTLY AFTER THE PERMANENT PROMOTION UPON INQUIRY BY MR. KELLEY AS TO WHY HIS PAY HAD NOT INCREASED AS A RESULT OF HIS PERMANENT PROMOTION. WHEN THE TRUE NATURE OF THE ERROR WAS UNDERSTOOD, THE NAVY SOUGHT TO RECOVER THE AMOUNT OF THE OVERPAYMENT: $746.24.

MR. KELLEY SOUGHT WAIVER OF THE CLAIM AGAINST HIM FOR OVERPAYMENT OF COMPENSATION. HE ASSERTED THAT THE OVERPAYMENT OCCURRED DUE TO THE NAVY'S ADMINISTRATIVE ERROR AND THROUGH NO FAULT OF HIS OWN. HE ALSO STATED THAT HE DID NOT NOTICE THAT HE WAS RECEIVING THE SAME HIGH LEVEL OF PAY DURING THE PERIOD OF OVERPAYMENT, BECAUSE MANY CHANGES TO HIS PAY TOOK PLACE SUCH AS A STEP INCREASE, CONGRESSIONAL PAY RAISE, AND ALTERED TAX WITHHOLDINGS. HIS UNIT (NAVAL SEA SYSTEMS COMMAND) FOUND NO INDICATION OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON THE PART OF MR. KELLEY AND RECOMMENDED APPROVAL OF THE WAIVER. HOWEVER, THE NAVY ACCOUNTING AND FINANCE CENTER DENIED THE WAIVER REQUEST BECAUSE IT FOUND THAT MR. KELLEY RECEIVED A STANDARD FORM 50 WHICH PUT HIM ON NOTICE AS TO WHEN HIS TEMPORARY PROMOTION WOULD BE TERMINATED. FURTHER, MR. KELLEY REASONABLY SHOULD HAVE EXPECTED A DECREASE IN GROSS PAY DUE TO HIS TEMPORARY PROMOTION TERMINATION, YET HE FAILED TO NOTICE ON HIS LEAVE AND EARNINGS STATEMENTS THAT HE WAS CONTINUALLY RECEIVING GROSS PAY AT THE GRADE GS-13, STEP 1 LEVEL.

ON APPEAL, OUR CLAIMS GROUP AFFIRMED THE DENIAL OF MR. KELLEY'S REQUEST FOR WAIVER. IT NOTED THAT AS A REASONABLE PERSON, MR. KELLEY SHOULD HAVE EXPECTED SOME CHANGE IN HIS NET PAY TO REFLECT THE CHANGE TO A LOWER GRADE. WHEN THAT PAY DID NOT CHANGE, IT WAS NOTED THAT MR. KELLEY SHOULD HAVE QUESTIONED THE ACCURACY OF HIS PAY. IT FOUND THAT SINCE MR. KELLEY WAS AT LEAST PARTIALLY AT FAULT IN THIS MATTER, HE WAS PRECLUDED FROM BEING GRANTED A WAIVER.

MR. KELLEY APPEALS AND STATES THAT THE NAVY AND THIS OFFICE BASED THEIR DECISIONS ON THE FACT THAT HE SHOULD HAVE CAUGHT THE ERROR AND BROUGHT IT TO THE ATTENTION OF PROPER OFFICIALS. HOWEVER, MR. KELLEY DECLARES THAT HE DID NOTICE A PAY DIFFERENCE AND WENT TO OFFICIALS FIVE TIMES IN ORDER TO STRAIGHTEN OUT THE SITUATION.

THE PROVISION OF LAW AUTHORIZING THE WAIVER OF CLAIMS OF THE UNITED STATES AGAINST EMPLOYEES ARISING OUT OF ERRONEOUS PAYMENTS OF PAY, 5 U.S.C. SEC. 5584, PERMITS SUCH WAIVERS ONLY WHEN THE COLLECTION OF THE ERRONEOUS PAYMENTS WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE UNITED STATES AND ONLY WHEN THERE IS NO INDICATION OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON THE PART OF THE EMPLOYEE, OR ANY OTHER PERSONS HAVING AN INTEREST IN OBTAINING THE WAIVER. SEE 4 C.F.R. SEC. 91.5(C) (1981).

HERE, MR. KELLEY STATES THAT HE WAS AWARE THAT HIS TEMPORARY PROMOTION TO GRADE GS-13, STEP 1 WAS TO TERMINATE ON NOVEMBER 20, 1979, AS INDICATED ON HIS STANDARD FORM 50 ISSUED ON OCTOBER 1, 1979. AN EXAMINATION OF MR. KELLEY'S EARNINGS AND LEAVE STATEMENTS WOULD HAVE SHOWN THAT HE CONTINUED TO RECEIVE COMPENSATION PAYMENTS AT THE GRADE GS-13, STEP 1 LEVEL FOR NINE PAY PERIODS AFTER THE TERMINATION OF HIS TEMPORARY PROMOTION ON NOVEMBER 20, 1979, BEGINNING WITH THE PAY PERIOD ENDING DECEMBER 1, 1979, AND ENDING MARCH 22, 1980. THE OVERPAYMENT WOULD HAVE BEEN ASSESSED BEYOND MARCH 22, 1980, EXCEPT THAT MR. KELLEY RECEIVED A PERMANENT PROMOTION TO GRADE GS-13, STEP 1 EFFECTIVE MARCH 23, 1980. THUS, ALL SUBSEQUENT PAYMENTS AT THAT LEVEL WERE PROPER, EVEN THOUGH THE PAPERWORK (STANDARD FORM 50) WAS NOT ISSUED UNTIL MAY 12, 1980. MR. KELLEY ONLY WENT TO APPROPRIATE OFFICIALS TO QUESTION THE CORRECTNESS OF HIS PAY FOLLOWING THE PAY PERIOD ENDING APRIL 5, 1980, AFTER THE OVERPAYMENT PERIOD HERE IN QUESTION WAS OVER. HIS INQUIRY WAS PROMPTED BY HIS BELIEF THAT HIS PAY SHOULD HAVE INCREASED AS A RESULT OF HIS PERMANENT PROMOTION TO GRADE GS- 13, STEP 1.

WHERE AN EMPLOYEE HAS RECORDS WHICH, IF REVIEWED, WOULD INDICATE AN OVERPAYMENT, AND THE EMPLOYEE FAILS TO REVIEW SUCH DOCUMENTS FOR ACCURACY OR OTHERWISE FAILS TO TAKE CORRECTIVE ACTION, HE IS NOT WITHOUT FAULT AND WAIVER WILL BE DENIED. SEE MARK F. JONES, B-202136, JULY 20, 1981. EMPLOYEE HAS THE RESPONSIBILITY TO VERIFY THE INFORMATION PROVIDED ON HIS PAYROLL CHANGE SLIPS OR LEAVE AND EARNINGS STATEMENTS, AND WHERE A REASONABLE MAN WOULD HAVE MADE INQUIRY BUT THE EMPLOYEE DID NOT, THEN HE IS NOT FREE FROM FAULT AND THE CLAIM MAY NOT BE WAIVED. NATIONAL TREASURY EMPLOYEES UNION AND U. S. CUSTOMS SERVICE, 58 COMP.GEN. 721, 723 (1979). AS STATED ABOVE, MR. KELLEY HAD ALL THE AVAILABLE RECORDS; HOWEVER, HE FAILED TO REVIEW THEM. IN FACT, HE SAYS THAT HE DID NOT REVIEW HIS STATEMENT OF EARNINGS PORTIONS OF HIS CHECKS UNTIL AFTER HE WAS ADVISED OF THE OVERPAYMENTS. THEREFORE, IT CANNOT BE SAID THAT MR. KELLEY WAS FREE FROM FAULT IN THIS MATTER. WE SUSTAIN THE ACTION OF THE CLAIMS GROUP IN DENYING THE WAIVER.

MR. KELLEY FURTHER CLAIMS THAT REPAYMENT CREATES A FINANCIAL BURDEN FOR HIM. HE EXPLAINS THAT HE PURCHASED FURNITURE AND MADE HOME IMPROVEMENTS ON THE EXPECTATION OF A PAY INCREASE RESULTING FROM HIS PROMOTION. HOWEVER, FINANCIAL HARDSHIP CANNOT FORM THE BASIS FOR A WAIVER WHEN OTHER CIRCUMSTANCES PRECLUDE SUCH ACTION. HARRY A. PHILLIPS, B-200296, NOVEMBER 28, 1980.

FINALLY, MR. KELLEY INFORMS US THAT THE NAVY HAS ERRONEOUSLY ALTERED THE AMOUNT OF THE OVERPAYMENT FROM $746.24 TO 764.24. IT DOES APPEAR FROM THE RECORD THAT THE NAVY HAS ERRONEOUSLY TRANSPOSED THIS NUMBER. IF THE NAVY HAS ERRONEOUSLY COLLECTED THE WRONG AMOUNT, MR. KELLEY CAN FILE A CLAIM FOR A REFUND. 4 C.F.R. SEC. 92.5 (1981).