B-237071, Dec 21, 1989

B-237071: Dec 21, 1989

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Even though the error and reason for it were reflected on the member's Leave and Earnings Statement. The reference to the error in the Statement was obscure. There was no reasonable basis for the member to have detected it through a normal review of the document. The overpayment to Captain Balzer was due to a computer error in which he was paid a VHA based on the zip code for Dallas. When his VHA allowance was discontinued for unrelated reasons. Realized that it was larger than theirs. Our Claims Group noted that Captain Balzer had received a printed Leave and Earnings Statement in September 1988 which showed that the VHA was based on a Dallas zip code. Denied the remainder on the basis that Captain Balzer should have discovered the overpayment on receiving the September Leave and Earnings Statement showing the improper zip code.

B-237071, Dec 21, 1989

MILITARY PERSONNEL - Pay - Overpayments - Error detection - Debt collection - Waiver DIGEST: Claim for repayment by service member of erroneous payments caused by an incorrect calculation of his Variable Housing Allowance that resulted from an error in the service's computer entry of his zip code may be waived, even though the error and reason for it were reflected on the member's Leave and Earnings Statement. The reference to the error in the Statement was obscure, and there was no reasonable basis for the member to have detected it through a normal review of the document.

Captain David T. Balzer:

Air Force Captain David T. Balzer appeals our Claims Group's June 6, 1989, decision on his request for waiver of the government's claim of $954.09 for erroneous payments to Captain Balzer in connection with a Variable Housing Allowance (VHA). The Claims Groups denied waiver of all but $256.69 of the claim. We reverse that denial.

The overpayment to Captain Balzer was due to a computer error in which he was paid a VHA based on the zip code for Dallas, Texas, his old duty station, rather than the one for his new station, Altus, Oklahoma. Captain Balzer discovered the error in January 1989, when his VHA allowance was discontinued for unrelated reasons. Captain Balzer says that at that time he became curious as to the VHA amount and compared it with those of fellow members, and realized that it was larger than theirs. He informed the Air Force Finance Office of this fact, and subsequently received a claim from the Air Force for an indebtedness created by erroneous payments from August 1, 1988 to January 15, 1989.

Our Claims Group noted that Captain Balzer had received a printed Leave and Earnings Statement in September 1988 which showed that the VHA was based on a Dallas zip code. The Claims Group granted a partial waiver of $256.69, the overpayment up to Captain Balzer's receipt of the Leave and Earnings Statement, and denied the remainder on the basis that Captain Balzer should have discovered the overpayment on receiving the September Leave and Earnings Statement showing the improper zip code. Captain Balzer argues that the Claims Group's decision is unfair.

Our Office has authority under 10 U.S.C. Sec. 2774 to waive a claim of indebtedness where the claim arises out of erroneous payments due to administrative errors. The statute precludes waiver if the member was aware of the error and failed to have it corrected or if the member reasonably could have expected the payment to have been in error and thus was at fault in failing to see that it was corrected. We have held that a member is at fault if he is provided information or documents which, if reviewed, would cause a reasonable person to be aware of or suspect the existence of an error. Petty Officer James K. Boatman, USN, B-197513, Sept. 24, 1980.

A review of the Leave and Earnings Statement in issue shows a printed mass of numbers, symbols, abbreviations and letters containing a variety of information, including statements prominently printed at the bottom alerting members to upcoming changes in regulations and other pertinent events. In the middle of the Statement are the words "VHA based on W/DEP, ZIP 75323". The member's Oklahoma zip code is 73521, while the zip code for Dallas is 75323.

In view of the obscure reference to the VHA and zip code, we are not persuaded that a reasonable person preusing the Leave and Earnings Statement would detect the erroneous zip code number and conclude that he was being incorrectly paid. Certainly, it is unreasonable in these circumstances to conclude that the Air Force's error was understandable but the member's failure to unravel it was not. This is particularly so in view of the fact that it was Captain Balzer who reported the error once he did become aware of it.

In sum, we think the entire claim against Captain Balzer should be waived on the basis that the Leave and Earnings Statement was insufficient to make him aware of the overpayment. The Claims Group's decision is reversed.