B-238764, Apr 18, 1991, 91-1 CPD 271

B-238764: Apr 18, 1991

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MILITARY PERSONNEL - Pay - Overpayments - Error detection - Debt collection - Waiver DIGEST: Debt of Navy member who erroneously was paid both a Basic Allowance for Subsistence (BAS) and Separate Rations may be waived where the record showed that the member was without fault. There is no indication of fraud. IS1 Elliott's next four paychecks were for $915. Where the pay records were maintained. IS1 Elliott says that he was told that the increases represented back pay and allowances he evidently had not received for his first 6 months of duty. IS1 Elliott says he again telephoned Stuttgart and was again told that the amount was correct. He was informed that the increase was caused by an increased Cost of Living Allowance (COLA) and a change in the foreign exchange rate.

B-238764, Apr 18, 1991, 91-1 CPD 271

MILITARY PERSONNEL - Pay - Overpayments - Error detection - Debt collection - Waiver DIGEST: Debt of Navy member who erroneously was paid both a Basic Allowance for Subsistence (BAS) and Separate Rations may be waived where the record showed that the member was without fault, and there is no indication of fraud, misrepresentation, or bad faith on his part.

Petty Officer First Class Dorlon J. Elliott, USN:

Navy Petty Officer First Class (IS1) Dorlon J. Elliott appeals our Claims Group's denial of his request for waiver of erroneous payments of $1,872 in pay and allowances. We reverse the Claims Group's decision.

IS1 Elliott began shore duty at Munich, Germany, in August 1985. IS1 Elliott's pay varied through February 1986, ranging from two initial payments of just less than $200, to a high of $333. IS1 Elliott's next four paychecks were for $915, $1,229, $551, $401, and $768 (mid-May). These amounts led the member to contact the disbursing office in Stuttgart, where the pay records were maintained. IS1 Elliott says that he was told that the increases represented back pay and allowances he evidently had not received for his first 6 months of duty, and that his normal pay should be about $415.

When his paycheck jumped to $529 at the end of June, IS1 Elliott says he again telephoned Stuttgart and was again told that the amount was correct, and that his normal pay should be $415. This time, he was informed that the increase was caused by an increased Cost of Living Allowance (COLA) and a change in the foreign exchange rate. From then through October 1986, each of IS1 Elliott's paychecks was close to $415.

In October, during a bi-annual inspection by the Senior Disbursing Clerk from Stuttgart, who brought pay records with him, IS1 Elliott again questioned the accuracy of the amounts he was receiving and he was again assured of their correctness. However, when IS1 Elliott insisted on a breakdown of his pay account it was discovered that he erroneously had been paid both a Basic Allowance for Subsistence (BAS) and Separate Rations. Both allowances basically cover the same thing, so that they should not have been paid at the same time. The disbursing office acknowledged the error and advised the member to request waiver of his resulting debt.

Our Claims Group concluded that since IS1 Elliott received leave and earnings statements indicating payment of both BAS and Separate Rations, and considering his rank and experience, IS1 Elliott should have questioned his entitlement to both allowances. In his appeal, IS1 Elliott points out that, in fact, he repeatedly questioned the correctness of his pay but on each occasion was assured it was proper.

Claims arising from erroneous payments may be waived 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. Generally, these criteria are met if the overpayment occurred through administrative error and there is no indication of fraud, misrepresentation, fault or lack of good faith on the member's part. See LTC Robert E. Fitzgerald, USA (Retired), B-238761, Mar. 1, 1991.

The record indicates that there were both underpayments and overpayments at various times during IS1 Elliott's shore duty, and that the member questioned his pay on three occasions. As indicated above, each time IS1 Elliott questioned his pay, he was advised that the amount was correct, and was given a reason for any increases from his last pay. The Navy did not discover its error until IS1 Elliott, nevertheless still concerned, insisted on a more detailed examination of his pay account.

Further, the record shows that IS1 Elliott received his leave and earnings statements about a month and a half after each payment. Also, the statements were in a format the Navy eventually concluded was confusing, and has since changed.

Finally, on several occasions the member was paid the apparently correct amount even though the leave and earnings statements showed both BAS and separate rations allowances.

The standard we employ in determining fault for purposes of waiver under 10 U.S.C. Sec. 2774 is whether a reasonable person should have been aware that he was receiving a payment in excess of his proper entitlement. See Admiral James D. Watkins, USN, (Retired), B-235501, June 23, 1989. this record, we do not agree with the Claims Group that IS1 Elliott reasonably should have been aware of the overpayments in issue.

Accordingly, we conclude that IS1 Elliott acted properly, in good faith, and without fault. The Claims Group's decision denying waiver of his debt therefore is reversed.