B-238653, Aug 2, 1990

B-238653, Aug 2, 1990

CIVILIAN PERSONNEL - Compensation - Overpayments - Error detection - Debt collection - Waiver DIGEST: Waiver of overpayment of salary is granted to an employee who accepted a position at a lower rate of pay and continued to receive the higher pay of her prior position. There is no indication that the employee was at fault where she questioned her pay and was led to believe that she was entitled to retained pay.

Carol A. Keogh - Waiver of Overpayment of Salary:

This decision is in response to an appeal by Ms. Carol A. Keogh, filed by her attorney, from our Claims Group Settlement which granted a partial waiver of overpayments of compensation and denied waiver of overpayments totalling $1,313.60 under the provisions of 5 U.S.C. Sec. 5584 (1988). /1/ For the following reasons, we overrule the denied portion of the settlement action by our Claims Group and grant waiver of the remaining debt of $1,313.60.

BACKGROUND

Ms. Keogh, an employee of the Department of the Navy, Bangor, Washington, was employed as a warehouse worker, wage grade (WG) 4, step 1, at an hourly rate of $9.84. Effective February 28, 1988, Ms. Keogh was erroneously authorized a within grade increase to WG-4, step 2, at an hourly rate of $10.26. Ms. Keogh notified her supervisor and was advised by her payroll office that her pay was correct. The Navy discovered the error in August 1988 when it received a Standard Form (SF) 50 correctly authorizing a within grade increase to WG-4, step 2. Ms. Keogh was notified of the prior error and the resulting overpayments and a corrected SF-50 was issued on August 30, 1988. Her proper within grade increase was effective August 14, 1988.

Effective September 25, 1988, Ms. Keogh voluntarily accepted a trainee position at a lower rate of pay as an Electronics Mechanic Apprentice, wage technician (WT) grade 11, step 1, with an hourly rate of $8.78. She received several SF-50's which were annotated with the $8.78 rate; however, she continued to be paid at $10.26 per hour. The error was discovered in March 1989 when Ms. Keogh received a comparability pay increase from $8.78 to $9.06. Her actual pay was reduced from $10.26 to $9.06 at that time. Ms. Keogh was notified by the Navy in June 1989 of her indebtedness of $1,708.76 for salary overpayments and was advised that she could request a waiver of repayment.

Our Claims Group allowed Ms. Keogh's request for waiver for the within grade error, but denied her request for the period September 25, 1988, to February 25, 1989, on the basis that she had received an SF-50 on August 30, 1988, which corrected her salary and put her on notice of future overpayments.

Ms. Keogh requests a waiver of the balance of the overpayment of $1,313.60, on the basis that she was advised that her pay was correct and that she believed she was entitled to receive retained pay. Since we concur with our Claims Group's partial waiver, we need only be concerned with the period September 25, 1988, to February 25, 1989.

OPINION

The Comptroller General may waive claims for overpayments of pay and allowances if collection would be against equity and good conscience and not in the best interests of the United States. 5 U.S.C. Sec. 5584 (1988). This authority may not be exercised if there is an indication of fraud, misrepresentation, fault, or lack of good faith on the part of the employee or any other person having an interest in obtaining a waiver of the claim. 4 C.F.R. Part 91 (1989). Since there is no indication of fraud, misrepresentation, or lack of good faith on the part of Ms. Keogh in this case, our decision on the issue of waiver depends on whether she was at fault.

We consider fault to exist if, in light of all the circumstances, it is determined that the individual knew or should have known that an error existed, but failed to take action to have it corrected. Frederick D. Crawford, 62 Comp.Gen. 608 (1983).

Ms. Keogh was placed on notice of an error in her pay on August 30, 1988, and she did receive several SF-50's which indicated a lower rate of pay. However, on September 25, 1988, Ms. Keogh accepted an appointment conversion from a position as a warehouse worker to a position as an Electronics Mechanic Apprentice at a lower rate of pay. Under certain circumstances, employees who take a voluntary downgrading may receive pay retention under the provisions of 5 U.S.C. Sec. 5363 (1988). See, e.g., 5 C.F.R. Sec. 536.104(a) and (b) (1988). Thus, when Ms. Keogh continued to receive the same pay after her voluntary downgrading, she reasonably could have believed, as she contends, that it was due to her receiving retained pay. Further, the record indicates that Ms. Keogh spoke to her supervisor in late September or October 1988, about discrepancies in her pay, and was assured by Payroll that necessary corrections would be made.

The record also supports Ms. Keogh's contention that she thought she was entitled to retained pay. There are several memoranda in the file to this effect prepared by Ms. Keogh's supervisor. For example, her supervisor prepared a Payroll Discrepancy Report on March 11, 1989, when the error was discovered, which questions Ms. Keogh's reduction in pay and in which he was told by payroll that "this was probably due the fact (sic) that she was not entitled to save pay. We were previously told she was entitled to save pay." The report goes on to request a written ruling as to whether or not Ms. Keogh was entitled to retained pay. /2/

Under the circumstances involved in this case, we do not believe that fault may be imputed to Ms. Keogh so as to preclude waiver of the overpayment of pay. This Office has granted waiver in similar circumstances where an employee believed he was entitled to retained pay. Michael A. Uhorchak, B-223381, Apr. 28, 1987. Cf. Gary W. Easton, B-232178, Aug. 3, 1989.

Accordingly, we conclude that Ms. Keogh's indebtedness may be waived under 5 U.S.C. Sec. 5584.

/1/ Z-2902097, September 25, 1989.

/2/ We have been advised by the Navy that she was not entitled to retained pay because her appointment was temporary as opposed to other trainees who had permanent appointments.