B-240761, Nov 7, 1990

B-240761: Nov 7, 1990

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The member could not reasonably have been aware he was receiving more than he was entitled to. Early was indebted to the government in the amount of $368.83 because of a series of overpayments of pay and allowances in 1987. Early should have received a final payment of $114.30 at discharge. Which is the difference between the debt and his separation entitlement of $483.13. Early was paid $941.46. (The record is not clear about the nature of this error.). Early's bi-monthly payments were between $371 and $427. Early therefore should have questioned his entitlement to receive a final separation payment of $941.46 for 6 days pay and allowance. The Navy presumably would have adjusted his separation pay to account for the earlier overpayments.

B-240761, Nov 7, 1990

MILITARY PERSONNEL - Pay - Overpayments - Error detection - Debt collection - Waiver DIGEST: Claim for overpayment to member upon separation from Navy may be waived where, under the circumstances, the member could not reasonably have been aware he was receiving more than he was entitled to.

Louis K. Early, Jr. - Waiver of Claim for Overpayment:

Louis K. Early, Jr., appeals our Claims Group's decision to deny his request for waiver of his $941.46 debt to the United States caused by an erroneous payment to him upon his separation from the Navy. We reverse the Claims Group's decision.

The record shows that by the time of his separation in February 1988, Mr. Early was indebted to the government in the amount of $368.83 because of a series of overpayments of pay and allowances in 1987. The record also shows that Mr. Early had no reason to be aware of those overpayments or his indebtedness. Because of the size of his debt, Mr. Early should have received a final payment of $114.30 at discharge, which is the difference between the debt and his separation entitlement of $483.13. Through an unrelated administrative error, however, Mr. Early was paid $941.46. (The record is not clear about the nature of this error.)

The Claims Group noted that for the 2 months preceding his separation Mr. Early's bi-monthly payments were between $371 and $427. In denying waiver, the Claims Group agreed with the Navy that Mr. Early therefore should have questioned his entitlement to receive a final separation payment of $941.46 for 6 days pay and allowance, irrespective of whether he knew he had been overpaid before then and thus owed the government money. Had Mr. Early questioned his final payment, the Navy presumably would have adjusted his separation pay to account for the earlier overpayments.

In requesting reconsideration, Mr. Early says that he was not told how his separation payment was being computed, and was told only that the payment was for final pay and travel. He notes in this regard that his home of record was 2,700 miles from his separation point.

The Comptroller General has the authority under 10 U.S.C. Sec. 2774 to waive certain debts to the government when collection would be against equity and good conscience and not in the best interest of the United States. Waiver is not permitted, however, if the debtor was at fault, that is, if in light of all the facts the member should have known that an error existed and taken action to have it corrected. 10 U.S.C. Sec. 2774(b); Thomas M. Welsch, B-196461, Feb. 13, 1980.

We think the amount in issue should be waived. /1/ Had Mr. Early known exactly how his separation pay was computed, he would have expected $483.53 in pay and allowances. (As stated above, he did not know of the earlier overpayments.) The Navy does not dispute that he was told he also was entitled to travel money, and we think a total payment of $941.46 was not out of line based on that expectation. (There is nothing in the record showing how much Mr. Early otherwise received for travel home, or that he in fact separately received any amount at all.)

The Navy also does not contend that Mr. Early was shown an itemized separation worksheet at discharge, or a leave and earnings statement that somehow would have alerted Mr. Early to the fact that he was being paid too much so that he in turn would have alerted the Navy to its own error. Moreover, there is nothing in the record to charge Mr. Early with knowledge of the Navy's mistake in the 1-year period after his separation until the Navy itself discovered the error. In Donna J. Chambers - Waiver of Erroneous Payments, B-229109, June 8, 1988, we granted waiver where the member was not advised of the erroneous overpayment until 14 months after separation. We concluded that the member had not been furnished sufficient information to determine that she was being overpaid in large part because she had not received adequate advice at discharge to appreciate the overpayment, or an itemized statement of final pay during the 14-month delay.

The standard we employ in determining whether a member was at fault in accepting an overpayment is whether, under the particular circumstances involved, a reasonable person would have been aware that he was receiving more than his proper entitlement. See Thomas M. Welsch, B-196461, supra. In our view, that standard is not met here, and Mr. Early's debt therefore should be waived. The Claims Group's decision is reversed.

/1/ The amount is the full $941.46, since Mr. Early received the $114.30 to which he actually was entitled through a credit to an additional overpayment (of an allotment) that has been waived separately.