Request for Waiver of Indebtedness

B-198269: Sep 16, 1980

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A Naval officer requested reconsideration of the denial of his application for waiver of a debt that arose from erroneous payments of basic allowance for quarters (BAQ) received while he was living in Government quarters. During the period of overpayment, the officer had his pay and allowances sent to his bank by allotment. His net pay after allotment was paid directly to him. Due to administrative error, his net pay was increased. He believed that the first leave and earnings statement (LES) on which he noticed overpayment was due to the delay in processing his bank account, and stated that he did not have his LES's in his personal files during some of the pay periods. In his appeal, he contended that the overpayment was through no fault of his, and that he had no reliable method of determining his actual pay and entitlements during the periods of overpayment. Legislation provides GAO with authority to waive certan debts when collection would be against equity and good conscience and not in the best interests of the United States. However, waiver is precluded if there is an indication of fraud, misrepresentation, fault, or lack of good faith on the part of the service member. Fault exists if it is determined that the member should have known that an error existed and taken action to have it corrected. In this case, the member should have questioned the correctness of his pay when he received unexplained increases in his usual net pay. Also, he should have known that if overpayments continued, he would eventually be required to repay the erroneous amounts. It is fundamental that persons receiving money erroneously paid by a Government agency acquire no right to the money; such persons are bound to make restitution. GAO was unable to conclude that the member was free from fault, since he should have been aware of the strong possibility that he was being overpaid. Accordingly, the action denying the waiver was sustained.