B-240339, Oct 12, 1990

B-240339: Oct 12, 1990

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Should have known of the payment and that it was erroneous but failed to notify appropriate officials. Valdez was separated from the United States Navy on November 24. The error was discovered in July 1988. 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. So that he should have been aware that she had received an allotment check after his separation. We have determined fault to exist if a reasonable person should have been aware that payment in excess of entitlement was made. Even though the error was an administrative one to which the member did not in any way contribute. We conclude that he was not without fault in this case.

B-240339, Oct 12, 1990

MILITARY PERSONNEL - Pay - Overpayments - Debt collection - Waiver DIGEST: A former service member's debt due to the erroneous issuance of an allotment check to his spouse subsequent to his separation may not be waived where the former member, apparently living with his spouse at that time, should have known of the payment and that it was erroneous but failed to notify appropriate officials.

Robert F. Valdez - Request for Waiver:

Robert F. Valdez appeals a settlement by our Claims Group denying his claim for waiver of collection of an overpayment. We agree with the Claims Group.

Mr. Valdez was separated from the United States Navy on November 24, 1987, but the Navy nevertheless released a $900 allotment check to his wife for December 1987. The error was discovered in July 1988.

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.

It appears that by the time of the December 1987 erroneous payment, Mr. Valdez and his wife lived in a common household with their children, so that he should have been aware that she had received an allotment check after his separation. We have determined fault to exist if a reasonable person should have been aware that payment in excess of entitlement was made, even though the error was an administrative one to which the member did not in any way contribute. See Petty Officer First Class Bruce F. Jenkins, USN, B-220792, Nov. 14, 1985. Since Mr. Valdez failed to bring the error to the attention of the proper officials, we conclude that he was not without fault in this case, and that collection action therefore is appropriate.

Mr. Valdez claims that collection would impose an undue hardship upon him. However, financial hardship resulting from the collection of debts owed to the United States does not constitute a legal basis for their waiver. Dr. Richard E. Goodwin, B-201818, Aug. 18, 1981; Chief Petty Officer John W. Hayhurst, USN, B-193363, Aug. 8, 1979.