B-235936, Nov 29, 1990

B-235936: Nov 29, 1990

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

MILITARY PERSONNEL - Pay - Overpayments - Direct payroll deposit - Debt collection - Waiver DIGEST: A former member of the Air Force was separated on August 20. Because the former member should have been aware of the likelihood that excess pay had been deposited to his account. Because the two deposits combined were more than double the amount of pay to which he was entitled. Kelly served 3 years on active duty and was discharged on August 20. Kelly was entitled to a separation payment of $947.33 representing pay and allowances for 5 days service and 7-1/2 days of accrued leave. The payments were automatically deposited to Mr. Kelly that both the end of- August and mid-September payments were mistaken.

B-235936, Nov 29, 1990

MILITARY PERSONNEL - Pay - Overpayments - Direct payroll deposit - Debt collection - Waiver DIGEST: A former member of the Air Force was separated on August 20, 1984. After separation he received two separate payments, each deposited directly to his bank account and each in the full amount of his regular pay, resulting in an erroneous overpayment. Waiver of the overpayment represented by the second deposit cannot be granted, because the former member should have been aware of the likelihood that excess pay had been deposited to his account, since the bank notified him of the amount of the two deposits made after separation, and because the two deposits combined were more than double the amount of pay to which he was entitled.

William K. Kelly - Request for Waiver:

William K. Kelly appeals a settlement by our Claims Group partially denying his request for waiver of collection of an overpayment of pay and allowances and leave upon separation from the United States Air Force.

Mr. Kelly served 3 years on active duty and was discharged on August 20, 1984. Mr. Kelly was entitled to a separation payment of $947.33 representing pay and allowances for 5 days service and 7-1/2 days of accrued leave. However, through an administrative error he received an initial separation payment of $1,211.48, amounting to an overpayment of $264.15, at the end of August. On or about September 15, 1984, he received a second erroneous payment of $1,211.49, resulting in a total overpayment of $1,475.64. The payments were automatically deposited to Mr. Kelly's bank account in Germany.

In December 1984, the Air Force notified Mr. Kelly that both the end of- August and mid-September payments were mistaken; however, due to the late posting of 5 days' leave, the Air Force computed the total indebtedness incorrectly. Therefore, in April 1985, the Air Force advised Mr. Kelly of the correct total of the overpayment, and, once again notified Mr. Kelly that he was indebted to the United States for the amount of the overpayment.

Our Claims Group waived the initial $264.15 overpayment, because the overpayment represented leave used by the member shortly before, but not posted until after, separation and Mr. Kelly reasonably might not have been aware of his actual leave balance at the time of discharge. The Claims Group denied waiver of the second overpayment (in the amount of $1,211.49), because Mr. Kelly should have known that the payment was erroneous since it was pay for a period subsequent to his discharge from the Air Force. Mr. Kelly has appealed the determination not to waive the second overpayment.

Mr. Kelly claims that he was not aware of the overpayment, because the Air Force did not give him a final leave and earnings statement at the time of his separation even though he twice requested one. Furthermore, Mr. Kelly argues that, even though the bank informed him of the deposits to his account, he had no way to determine that he was overpaid without a final statement of leave and earnings from the Air Force.

The Comptroller General may waive collection of certain debts under 10 U.S.C. Sec. 2774 if collection would be against equity and good conscience and not in the best interest of the United States. Subsection 2774(b)(1) precludes waiver where there is an indication of fault or lack of good faith on the part of the individual requesting the waiver which created the debt. "Fault" is considered to exist if the member should have known that an error existed but failed to take any action to have it corrected. Patrick L. Murray, B-197626, Feb. 28, 1980.

Here, Mr. Kelly acknowledges that the bank told him the amount of the two deposits that were made to his account after his separation. In view of the fact that the mid-September deposit was for the full amount of Mr. Kelly's regular pay and was the second full paycheck received after he was discharged, and because the end-of-August and mid September deposits combined were more than double the amount of pay to which he was entitled, Mr. Kelly should have been aware of the likelihood that excess pay had been deposited to his account. Id. In this regard, our regulations governing waiver state:

"Any significant unexplained increase in pay or allowances which would require a reasonable person to make inquiry concerning the correctness of his pay or allowances, ordinarily would preclude a waiver when the employee or member fails to bring the matter to the attention of appropriate officials." 4 C.F.R. Sec. 91.5(c).

Accordingly, the action taken by our Claims Group denying waiver is sustained.