Request for Reconsideration of Debt Waiver Denial

A former medical officer of the Public Health Service (PHS) requested reconsideration of the denial of his application for waiver of his debt to the United States. The debt was a result of his obligation to refund variable incentive pay because of his early resignation from PHS. The record showed that in 1976 the medical officer received a commissioned officer's appointment in PHS. At that time, he executed a written active duty agreement under which he would receive variable incentive pay for 2 consecutive years in return for committing himself to 2 years of continuous active duty. However, approximately 15 months later, the medical officer submitted his resignation from PHS. The medical officer was then informed that he was obligated to refund a portion of the variable incentive pay previously paid to him since he had resigned prior to completing his 2-year active duty commitment. Subsequently, the medical officer applied for waiver of the claim against him; however, the Claims Division concluded that the claim was not subject to waiver and denied the officer's application. In his request for reconsideration, the officer questioned the correctness of the conclusion reached by the Claims Division. Additionally, he contended that he had no choice professionally but to resign from PHS since PHS failed to fulfill the promises made to him relating to the facilities and services he would be given during his assignment. GAO held that, under the statute authorizing variable incentive pay, the early resignation of the PHS medical officer must be regarded as voluntary despite the officer's assertion that he felt he had no choice professionally but to resign. Thus the officer was legally obligated to refund a portion of the variable incentive pay. Additionally, GAO ruled that an amount correctly and legally paid to a service member in the form of a bonus or special pay was not an erroneous payment. Thus the claim could not be waived under the statute authorizing waiver of erroneous payments. Accordingly, the claim was not waived.