B-238766, Oct 18, 1990

B-238766: Oct 18, 1990

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Deductions for FEGLI premiums were taken from her salary for over 1 year and were discontinued due to administrative error. Since we do not have the employee's leave and earnings statements showing the deductions for FEGLI premiums and the subsequent discontinuance of such deductions from her salary. We cannot determine whether a reasonable and prudent person would have made inquiry as to the reason for the discontinuance of the deductions. The case is remanded to the agency to determine whether the employee was at fault for not making inquiry. The deductions for FEGLI premiums were taken from her salary from pay period 17 in 1984. Harris was a part-time employee. The adjustment was not made.

B-238766, Oct 18, 1990

CIVILIAN PERSONNEL - Compensation - Payroll deduction - Life insurance - Insurance premiums - Underdeductions DIGEST: Upon appointment, employee signed a life insurance election form for Federal Employees' Group Life Insurance (FEGLI) coverage. Deductions for FEGLI premiums were taken from her salary for over 1 year and were discontinued due to administrative error. Since we do not have the employee's leave and earnings statements showing the deductions for FEGLI premiums and the subsequent discontinuance of such deductions from her salary, we cannot determine whether a reasonable and prudent person would have made inquiry as to the reason for the discontinuance of the deductions, and therefore whether the employee's failure to do so constituted fault on her part. The case is remanded to the agency to determine whether the employee was at fault for not making inquiry.

Theresa Harris:

The Department of the Air Force requests a determination as to whether an employee may be granted waiver of erroneous payments made to her as a result of the agency's failure to deduct Federal Employees' Group Life Insurance (FEGLI) premiums from her salary.

Upon employment by the Air Force in July 1984, Ms. Harris signed a life insurance election form for FEGLI basic and standard optional coverage. The deductions for FEGLI premiums were taken from her salary from pay period 17 in 1984, through pay period 22 in 1985. Since Ms. Harris was a part-time employee, each change in her hourly rate of pay or change in duty hours required an adjustment in the FEGLI deductions. During a change in her pay, the adjustment was not made, her FEGLI information was dropped from the computer system, and no further deductions were made for life insurance coverage. As a result of the administrative errors, which were not discovered until October 1989, Ms. Harris was overpaid a net amount of $354.60.

Ms. Harris states that she was unaware that premiums for life insurance were not being taken out of her salary until October 1989, or that she was even a member of the FEGLI program because she had not signed any paperwork to that effect. Ms. Harris says that working only 24 hours a week, she simply could not afford life insurance coverage. She states that she cannot afford to repay the indebtedness and does not feel that she should be penalized for the administrative errors.

A grant of waiver must be based upon the facts involved in the particular case under consideration. Our Office has stated that if it is determined that, under the circumstances, a reasonable person would have made inquiry as to the correctness of his or her pay, but the employee did not, then the employee is not free from fault and the overpayment may not be waived. /1/ Generally, 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 or she is not without fault and waiver will be denied. /2/

In submitting Ms. Harris's claim for waiver consideration, the Air Force states that it normally would have recommended that waiver be denied since Ms. Harris signed for life insurance coverage and therefore reasonably should have expected that deductions would be made from her salary. The agency states that in reviewing her leave and earnings statements, Ms. Harris reasonably should have been able to ascertain that no deductions were being made from her pay beginning in 1985.

The Air Force expresses doubt, however, in view of the fact that we granted waiver of the overpayment of pay in Captain David T. Balzer, B-237071, Dec. 21, 1989, even though the error and the reason for it were reflected on the service member's leave and earnings statements. contrast, the Air Force points out, however, that in Donald R. Kremer, B-231924, Oct. 24, 1989, and Malcolm C. McCormack, B-233047, Feb. 22, 1989, where the employees failed to examine their leave and earnings statements, we held that a reasonable person would have made inquiry as to correctness of his or her salary and their failure to do so constituted fault on their part and precluded waiver of the overpayments of salary. The Air Force believes the decisions in those cases are inconsistent and hence has doubt as to waiver for Ms. Harris.

We view our holdings in Kremer, McCormack, and Balzer as not being inconsistent since, as stated earlier, a grant of waiver of overpayments of pay must be based upon the facts involved in the particular case under consideration. In Balzer, the facts and circumstances involved were different from those presented in Kremer and McCormack. In Balzer, we concluded that the reference to the error in the member's leave and earnings statements was obscure, that a reasonable person would not have detected the error, and there was no reasonable basis for the member to detect the error through a normal review of the statement.

With respect to Ms. Harris's claim for waiver, we do not have copies of her leave and earnings statements for the pay periods in question. Thus, we cannot determine on the record before us whether the statements were sufficient to warrant the conclusion that a reasonable and prudent person would have made inquiry as to the reason for the discontinuance of the deductions for FEGLI coverage.

Accordingly, we are remanding the case to the Air Force for a determination as to whether the leave and earnings statements were sufficiently clear as to put Ms. Harris under a duty to inquire. Since the total amount in question is under $500, the Air Force may grant waiver if it believes that the evidence in its files supports the conclusion that they were not.

/1/ Shelton H. Avenius, Jr., B-220465, Mar. 23, 1988; Roosevelt W. Royals, B-188822, June 1, 1977; B-165663, June 11, 1969.

/2/ Frederick D. Crawford, 62 Comp.Gen. 608 (1983); Arthur Weiner, B-184480, May 20, 1976.