B-243686, Jul 2, 1991

B-243686: Jul 2, 1991

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Waiver is denied since the employee had both informal and formal notice of the erroneous payments. Geer was employed by the Department of Defense Dependents Schools in the Netherlands when. She was granted leave without-pay for the period August 28. The paychecks were deposited directly into her bank account. Geer was already employed at Hill Air Force Base. Geer was overpaid a gross amount of $1. Geer contacted the Finance Office in Heidelberg and was advised that the payments were made in error and that she would be indebted for the amount. She was later formally advised of the overpayment by letter dated April 12. Geer states that she questioned whether an error had in fact been made since she believes that it could have been payment for annual leave and a last payroll check.

B-243686, Jul 2, 1991

CIVILIAN PERSONNEL - Compensation - Overpayments - Error detection - Debt collection - Waiver DIGEST: An employee requests waiver of duplicate salary payments. Waiver is denied since the employee had both informal and formal notice of the erroneous payments. An employee who accepts payments known to be erroneous cannot reasonably expect to retain them and should make provision for eventual repayment.

Sandra L. Geer:

Ms. Sandra L. Geer, a former employee of the Department of the Air Force, Hill Air Force Base, Utah, appeals our Claims Group's denial of her claim for waiver of salary overpayment under the provisions of 5 U.S.C. Sec. 5584 (1988). /1/ For the following reasons, we sustain the denial of her claim.

Ms. Geer was employed by the Department of Defense Dependents Schools in the Netherlands when, at her request, she was granted leave without-pay for the period August 28, 1989, through November 25, 1989, to seek federal employment upon her return to the United States. On October 16, 1989, Ms. Geer accepted an appointment with the Air Force at Hill Air Force Base, Utah. Due to an administrative error, Ms. Geer received two paychecks from the overseas Finance Center for the pay periods ending January 13 and 27, 1990. The paychecks were deposited directly into her bank account. Since Ms. Geer was already employed at Hill Air Force Base, Utah, she received duplicate salary payments for those pay periods. As a result, Ms. Geer was overpaid a gross amount of $1,372.60.

Shortly after receipt of the overpayment, Ms. Geer contacted the Finance Office in Heidelberg and was advised that the payments were made in error and that she would be indebted for the amount. She was later formally advised of the overpayment by letter dated April 12, 1990. Ms. Geer states that she questioned whether an error had in fact been made since she believes that it could have been payment for annual leave and a last payroll check. She was waiting for further proof in the form of leave and earning statements, which she did not receive until 7 months later. Thus, she says that she did not receive prompt notification of overpayment and she was the one who inquired about the validity of the payment. Because of these circumstances, Ms. Geer says that waiver should be granted. She also questions the amount of the indebtedness since her W-2 Form indicates that she received $1,074.49, and she is being asked to refund $1,372.60.

We have been consistently held that, if an employee is aware of an overpayment of pay when it occurs, the employee is not entitled to relief under 5 U.S.C. Sec. 5584 if he or she accepts the overpayment knowing it to be erroneous. The employee cannot reasonably expect to retain it and should make provision for its repayment. Robert L. Rancourt, B-240556, Oct. 9, 1990. In such case, collection of an overpayment is not considered to be against equity, good conscience, or contrary to the best interests of the United States, notwithstanding the fact that the employee may have brought the situation promptly to the attention of the proper authorities and sought an explanation or correction of the error. Richard W. DeWeil, B-223597, Dec. 24, 1986; James T. Harrod, B-195889, Feb. 14, 1980; Guy Cloutier, B-231019, Jan. 26, 1989; Hawley E. Thomas, B-227322, Sept. 19, 1988.

In this case, Ms. Geer inquired about the overpayments and was informally advised by the Finance Office in Heidelberg that she was paid in error. This information notice was followed up with a formal notice of indebtedness. Therefore, she should have set the money that she received aside until she received the official confirmation in the form of the leave and earning statements that she requested.

As to the amount of the indebtedness, the total amount of the employee's debt includes both the amounts she received directly and other amounts paid on her behalf for social security taxes, retirement, and income taxes. The withholding of those amounts does not reduce the total indebtedness. However, the agency should attempt to recover erroneous payments for retirement and social security (FICA) taxes and credit Ms. Geer with any recovery. Ms. Geer should contact the Internal Revenue Service concerning the adjustment of her tax liability as the result of repaying the overpayments she received. Charles R. Ryon, Sr., B-234731, June 19, 1989.

/1/ Z-2904643-056, Feb. 20, 1991.