B-152040, B-158422, MAY 3, 1974

B-152040, B-158422, MAY 3, 1974

IN DEBT CASES REFERRED TO GENERAL ACCOUNTING OFFICE AS UNCOLLECTIBLE BY AGENCY OR DEPARTMENT, WHICH ARE LATER CONSIDERED FOR WAIVER UNDER PUBLIC LAW 92-453 UPON APPLICATION BY DEBTOR TO GAO, GAO WILL BE RESPONSIBLE FOR NOTIFYING ALL PARTIES OF FINAL ACTION AND NOTIFYING DEBTOR OF RIGHT TO FILE FOR REFUND WITH AGENCY OR DEPARTMENT OF AMOUNTS WAIVED WHICH HAVE BEEN REPAID. IN ALL OTHER CASES AGENCY OR DEPARTMENT SHOULD NOTIFY DEBTOR OF ACTION AND RIGHT TO REFUND WHEN APPLICABLE.

TO SECRETARY OF DEFENSE:

THIS ACTION IS IN RESPONSE TO A LETTER DATED OCTOBER 24, 1973, FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) REQUESTING A DECISION AS TO WHO WILL HAVE THE RESPONSIBILITY FOR NOTIFYING THE DEBTOR IN CASES IN WHICH THE GENERAL ACCOUNTING OFFICE CONSIDERS THE WAIVER POSSIBILITIES AND APPROVES OR REJECTS WAIVER UNDER THE PROVISIONS OF PUBLIC LAW 92-453, APPROVED OCTOBER 2, 1972, 86 STAT. 758, 10 U.S.C. 2774, 32 U.S.C. 716, AND 5 U.S.C. 5584.

SPECIFICALLY, THE ASSISTANT SECRETARY REFERS TO THE PROVISIONS OF 4 CFR 92.4 REGARDING THE WRITTEN NOTIFICATION TO BE MADE TO THE DEBTOR AS TO THE FINAL ACTION TAKEN UPON A CLAIM OF THE UNITED STATES FOR ERRONEOUS PAYMENT OF PAY AND ALLOWANCES CONSIDERED FOR WAIVER, AND THE TWO-YEAR TIME LIMITATION IN THE EVENT OF WAIVER FOR MAKING APPLICATION FOR REFUND OF ANY AMOUNTS WHICH THE DEBTOR HAS REPAID TO THE UNITED STATES ON ACCOUNT OF THAT CLAIM.

THE ASSISTANT SECRETARY POINTS OUT THAT UNDER THE PROVISIONS OF 4 GAO 56.7, ADMINISTRATIVE AGENCIES WRITE OFF UNCOLLECTIBLE DEBTS WHICH ARE REPORTED TO THE GENERAL ACCOUNTING OFFICE AND THAT NO FURTHER CONTROL OR COLLECTION EFFORT IS REQUIRED OF THE AGENCIES EXCEPT WHEN IT IS LATER FOUND THAT THE DEBTOR IS EMPLOYED OR SERVING IN THE REPORTING AGENCY.

IT IS STATED BY THE ASSISTANT SECRETARY THAT IT HAD BEEN ASSUMED THAT WHEN THE GENERAL ACCOUNTING OFFICE COMPLETED WAIVER CONSIDERATION IN CASES WHICH HAD BEEN REFERRED TO IT AS UNCOLLECTIBLE UNDER 4 GAO 56.7 THAT THE GENERAL ACCOUNTING OFFICE WOULD NOTIFY THE DEBTOR OF THE FINAL ACTION AND OF THE TIME LIMIT FOR APPLYING FOR REFUND OF AMOUNTS PAID ON DEBTS WHICH ARE WAIVED, SINCE THE MOST CURRENT INFORMATION WOULD BE IN THE GENERAL ACCOUNTING OFFICE RECORDS. THE ASSISTANT SECRETARY NOTES, HOWEVER, THAT IN SOME CASES THE GENERAL ACCOUNTING OFFICE HAS NOTIFIED THE DEBTOR OF THE FINAL ACTION AND THE TIME LIMITATION WHERE IN OTHER CASES THE MILITARY DEPARTMENT HAS BEEN REQUESTED TO DO SO.

THE ASSISTANT SECRETARY STATES THAT IT IS RECOGNIZED THAT RETURNING THE CASE TO THE MILITARY DEPARTMENT FOR SUCH ACTION WOULD BE APPROPRIATE WHEN THE ACCOUNT HAD NOT BEEN REFERRED TO THE GENERAL ACCOUNTING OFFICE AS UNCOLLECTIBLE, BUT ONLY BECAUSE THE DEBT WAS IN AN AMOUNT OVER $500, SINCE ALL OF THE PERTINENT RECORDS WOULD BE IN THE MILITARY DEPARTMENT FILES. HOWEVER, IT IS FURTHER INDICATED THAT SINCE THERE IS A HIGH VOLUME OF UNCOLLECTIBLE ACCOUNTS REFERRED TO THE GENERAL ACCOUNTING OFFICE UNDER 4 GAO 56.7, THERE ARE INDICATIONS THAT THERE WOULD BE SIZABLE IMPACT ON THE MILITARY DEPARTMENTS IF ALL SUCH CASES SUBSEQUENTLY WAIVED BY THE GENERAL ACCOUNTING OFFICE WERE TO BE RETURNED TO THE MILITARY SERVICE FOR ACTION REQUIRED UNDER 4 CFR 92.4.

THE ASSISTANT SECRETARY STATES THAT THE REQUESTED DECISION WILL AID IN PLANNING FOR FULL RESOURCES REQUIRED TO PROCESS CASES UNDER PUBLIC LAW 92- 453.

GENERALLY, UNCOLLECTIBLE DEBTS REFERRED TO THE GENERAL ACCOUNTING OFFICE FOR COLLECTION UNDER THE PROVISIONS OF 4 GAO 56.7 ARE NOT CONSIDERED FOR WAIVER UNLESS AN APPLICATION FOR WAIVER IS RECEIVED FROM THE DEBTOR AND THE DEBT IS ONE WHICH WOULD BE PROPER FOR CONSIDERATION UNDER THE APPLICABLE WAIVER LAWS.

APPLICATIONS FOR WAIVER MUST BE SUBMITTED BY THE DEBTOR TO THE HEAD OF THE EXECUTIVE AGENCY OR THE SECRETARY OF THE DEPARTMENT WHICH MADE THE ERRONEOUS PAYMENT OF PAY AND ALLOWANCES. FURTHERMORE, THE REGULATIONS REQUIRE THAT A DETAILED INVESTIGATIVE REPORT BE SUBMITTED BY THE ACTIVITY INVOLVED TO THE HEAD OF THE AGENCY OR THE SECRETARY CONCERNED. UPON RECEIVING THE REPORT, THE HEAD OF THE AGENCY OR THE SECRETARY CONCERNED MAY WAIVE THE CLAIM OF THE UNITED STATES IN WHOLE OR PART, IF IT IS NOT IN AN AMOUNT AGGREGATING MORE THAN $500. IF THE CLAIM HAS BEEN REFERRED, TO THE COMPTROLLER GENERAL FOR COLLECTION, OR IF IT AGGREGATES MORE THAN $500, OR DOUBT EXISTS AS TO WHETHER THE CLAIM SHOULD BE WAIVED, THE HEAD OF THE EXECUTIVE AGENCY OR THE SECRETARY CONCERNED SHOULD REFER THE REPORT TOGETHER WITH HIS RECOMMENDATION TO THE COMPTROLLER GENERAL. SEE 4 CFR 92.1 AND 92.3.

UNDER THE PROVISIONS OF 10 U.S.C. 2774(C), 32 U.S.C. 716(C) AND 5 U.S.C. 5584(C) AN INDIVIDUAL WHO HAS REPAID ALL OR PART OF HIS INDEBTEDNESS WITH RESPECT TO WHICH A WAIVER HAS BEEN GRANTED HAS TWO YEARS FOLLOWING THE EFFECTIVE DATE OF WAIVER TO APPLY FOR REFUND OF THE AMOUNT WAIVED AND SUCH AMOUNT WILL BE PAID BY THE SECRETARY CONCERNED FROM CURRENT APPLICABLE APPROPRIATIONS OF THE DEPARTMENT.

IN 4 CFR 92.4, IT IS STATED THAT THE COMPTROLLER GENERAL OF THE UNITED STATES OR THE HEAD OF THE EXECUTIVE AGENCY OR THE SECRETARY CONCERNED, AS THE CASE MAY BE, SHALL SEND WRITTEN NOTIFICATION TO ALL CONCERNED AS TO THE FINAL ACTION TAKEN UPON A CLAIM OF THE UNITED STATES FOR ERRONEOUS PAYMENT OF PAY AND ALLOWANCES CONSIDERED FOR WAIVER.

IT IS OUR VIEW THAT ORDINARILY RESPONSIBILITY FOR NOTIFYING THE DEBTOR OF FINAL ACTION ON AN APPLICATION FOR WAIVER AND OF THE DEBTOR'S RIGHT TO MAKE CLAIM FOR REFUND OF AMOUNTS REPAID IF THE DEBT IS WAIVED, SHOULD BE WITH THE AGENCY OR DEPARTMENT WHICH MADE THE ERRONEOUS PAYMENT OF PAY AND ALLOWANCES. HOWEVER, IN CASES WHERE A DEBT HAS BEEN REFERRED TO THE GENERAL ACCOUNTING OFFICE AS UNCOLLECTIBLE UNDER 4 GAO 56.7 AND APPLICATION FOR WAIVER IS SUBSEQUENTLY RECEIVED IN THIS OFFICE, THE GENERAL ACCOUNTING OFFICE WILL BE RESPONSIBLE FOR INFORMING ALL CONCERNED AS TO FINAL DISPOSITION OF THE APPLICATION FOR WAIVER AND WILL ADVISE THE DEBTOR OF HIS RIGHT TO FILE CLAIM FOR REFUND OF ANY AMOUNTS REPAID BY HIM ON ACCOUNT OF THE DEBT.