Decision of: Jeffrey F. Guss File: B-248887 Date: October 2, 1992

B-248887: Oct 2, 1992

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Waiver of the overpayment of pay is denied. From the settlement action issued by our Claims Group which denied his request for waiver of an overpayment of salary that was caused by underdeductions of premiums for his Federal Employees' Group Life insurance (FEGLI). [1] Mr. Guss was previously employed by the Forest Service. The proper deductions for that insurance coverage were made while he was employed by the Forest Service. His deductions were reduced and the Standard Form (SF) 50. Deductions were made only for basic life plus the standard option. Guss stated that he was not aware that incorrect deductions had been made from the date he commenced work for the Navy until he received the SF-50 correcting his FEGLI coverage.

Decision of: Jeffrey F. Guss File: B-248887 Date: October 2, 1992

Employee elected basic life insurance and an additional opt ion of three times his basic salary under the Federal Employees' Group Life Insurance Program (FEGLI). Upon transfer, his new agency only deducted for basic life plus the standard option. Since he received Standard Form 50s showing his coverage as basic life plus the standard option, and leave and earnings statements showing deductions for the reduced coverage, his failure to notice the errors in his insurance deductions and to make inquiry as to the correctness of his salary makes him at least partially at fault. Therefore, in the absence of evidence that the employee had requested a change in his FEGLI coverage, waiver of the overpayment of pay is denied.

DECISION

The Defense Finance and Accounting Service, Department of Defense, has forwarded the appeal of Mr. Jeffrey F. Guss, an employee of the Department of the Navy, from the settlement action issued by our Claims Group which denied his request for waiver of an overpayment of salary that was caused by underdeductions of premiums for his Federal Employees' Group Life insurance (FEGLI). [1]

Mr. Guss was previously employed by the Forest Service, United States Department of Agriculture. On September 12, 1983, he elected FEGLI coverage of basic life insurance with an additional option of three times his basic salary. The proper deductions for that insurance coverage were made while he was employed by the Forest Service. Upon his transfer to the Department of the Navy in 1986, his deductions were reduced and the Standard Form (SF) 50, dated August 4, 1986, erroneously showed his FEGLI coverage as basic life insurance plus the standard option. Therefore, during the period from August 3, 1986, through March 15, 1991, deductions were made only for basic life plus the standard option.

Upon discovery of the error, the Department of the Navy issued a SF-50 dated February 22, 1991, which corrected Mr. Guss's FEGLI coverage to basic life plus an additional option of three times his basic pay. Prior to correction however, the error resulted in overpayments of salary in the total amount of $786.85.

In his original letter dated May 9, 1991, Mr. Guss stated that he was not aware that incorrect deductions had been made from the date he commenced work for the Navy until he received the SF-50 correcting his FEGLI coverage. He said that he overlooked the change in his FEGLI deductions. The Claims Group based its denial of waiver upon this contention by Mr. Guss.

But, in his letter of appeal dated April 7, 1992, Mr. Guss states that there was no inconsistency in the amounts actually deducted for FEGLI coverage and the SF-50s furnished to him since the $7.53 biweekly deduction was the correct deduction for basic life plus the standard option coverage as shown on the SF-50. He states that he thought that he had changed his coverage from basic life plus the additional option of three times his basic salary, to basic life plus the standard option, as indicated on the SF-50 which was issued upon his transfer to the Navy.

However, Mr. Guss has provided no evidence that he had requested any change in his FEGLI coverage after the election he made in September 1983.

Under the provisions of 5 U.S.C. Sec. 5584 (1988), the Comptroller General may waive, in whole or in part, a claim arising out of an erroneous payment of pay to an employee when the collection thereof would be against equity and good conscience and not in the best interests of the United States. The implementing regulations are contained in 4 C.F.R. Parts 91-93 (1992).

Since there is no indication of fraud, misrepresentation, or lack of good faith on the part of Mr. Guss, our determination is based upon whether he was at fault in accepting the erroneous payments. 4 C.F.R. Sec. 91.5(c) (1992). We consider "fault" to exist if, in light of all the circumstances, it is determined that the individual concerned knew or should have known that an error existed, but failed to take action to have it corrected. [2] In making this determination, we ask whether a reasonable person in the employee15 position should have been aware that he was receiving payments in excess of his proper entitlements. [3] If an employee has records which would indicate an overpayment, and the employee fails to review such documents for accuracy or otherwise fails to take corrective action, he is not without fault, and waiver will be denied.

Therefore, in the absence of evidence substantiating Mr. Guss's claim that he requested a change in his life insurance coverage when he transferred to the Department of the Navy, we conclude that Mr. Guss was, or should have been, on notice of the error in insurance deductions and should have made inquiry as to the correctness of his salary. His failure to do so makes him at least partially at fault, thereby precluding waiver under 5 U.S.C. Sec. 5584 (1988) and 4 C.F.R. Secs. 91.4 ad 91.5 (1992).

In addition, collection of the overpayment is not against equity and good conscience since Mr. Guss's FEGLI coverage of basic life insurance plus an additional option of three times his basic pay continued during the entire period in question.

In light of the foregoing, the settlement action by our Claims Group, which denied waiver of the overpayment of pay, is sustained.

1. Settlement Certificate Z-2916213, Mar. 31, 1992.

2. See 4 C.F.R. Sec. 91.5 (1992), and Frederick D. Crawford, 62 Comp. Gen. 608 (1983).

3. Bernard J. Killeen, Jr., B-198207, Aug. 22, 1980; John J. Doyle, B-191295, July 7, 1978.