Request for Waiver of Indebtedness

A Federal employee requested reconsideration of an action denying her claim for a waiver of indebtedness. Upon her promotion from one grade to the next higher grade, the employee was erroneously given the pay rate of a step 7 within the higher grade instead of a step 5. The record showed that the employee, upon receiving her notice of promotion, notified the appropriate officials of the error and was assured that her pay rate was correct. It was concluded in the prior action, however, that the employee knew or should have known that she was receiving erroneous payments and should have set those payments aside for an eventual refund to the Government. The employee contended that, because of overtime pay, her paychecks varied considerably and, as a result, she did not know what the actual amount of the erroneous payment was for refund purposes. GAO has consistently held that, when an employee is aware of an overpayment of salary when it occurs, he is not entitled to relief under the statute authorizing the waiver of claims. GAO believed that, since the employee knew that an error had been made, requiring the repayment of the debt was not against equity and good conscience. Accordingly, the previous action denying the employee's claim for a waiver of indebtedness was sustained.