Erroneous Payment of Pay

An educator employed by the Department of Defense Dependents Schools requested reconsideration of his claim for loss of salary due to the retroactive correction of an error in his rate of pay and for the reversal of the corrective action. Both his employing agency and the Claims Division disallowed the claim. When the GS-11 employee's $16,627 per annum position was abolished, he was offered a lateral transfer to another GS-11 position and a position for which he was told he would be paid at the step 15 of Class II rate of $15,890 per school year, under the highest previous rate rule. The employee accepted the Class II position, and was paid at that rate for 6 months. An audit disclosed that the personnel office had failed to reduce the amount used as the highest previous rate for the school year position to 10/12ths of the highest previous rate earned in a postion paid on a per annum basis as required. The issues of primary concern were those the employee raised in a grievance filed with his employing agency in which he sought reversal of the corrective action changing his pay step from 15 to 9 and the continuance of his pay at the step 15 rate. The employee argued that the doctrine of equitable estoppel applied to his case. That is, the Government is estopped from unilaterally adjusting his salary where his service and receipt of payments during the period in question evidence an acceptance of the position as offered by the Government and thus the formation of a contract. He contended that in adjusting his salary, the Government would be breaching the contract. GAO has held that the relationship between the Government and an employee is not contractual, but appointive, in strict accordance with statutes and regulations. Therefore, the Government was not estopped from repudiating erroneous advice or authorizations of its agents. Accordingly, the disallowance of the claim was sustained.