Skip to main content

B-117604, MAR 6, 1972

B-117604 Mar 06, 1972
Jump To:
Skip to Highlights

Highlights

MILITARY PERSONNEL - OUT-OF-SERVICE CLAIMS - DIMINISHING RETURNS CONCERNING WHETHER COLLECTION ACTION MAY BE WAIVED IN OUT-OF-SERVICE CLAIMS WHERE THE INDEBTEDNESS INVOLVED IS $25 OR LESS. IT IS RECOMMENDED THAT CONSIDERATION BE GIVEN TO WITHHOLDING PAYMENT WHEN THE COSTS OF PROCESSING. EQUAL OR EXCEED THE AMOUNT OF THE UNDERPAYMENT UNLESS A CLAIM IS SUBMITTED BY THE MEMBER. SECRETARY: FURTHER REFERENCE IS MADE TO LETTER DATED NOVEMBER 18. REQUESTING A DECISION AS TO WHETHER COLLECTION ACTION MAY BE WAIVED IN OUT-OF-SERVICE CLAIMS WHERE THE INDEBTEDNESS INVOLVED IS $25 OR LESS AND IF NOT. MAY COLLECTION ACTION BE WAIVED WHERE THE AMOUNT IS (1) $15 OR LESS OR (2) $20 OR LESS. THERE WAS ENCLOSED A COPY OF DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE ACTION NO. 455 WHICH PROPOSED THAT COLLECTION ACTION SHOULD NOT BE TAKEN IN OUT-OF-SERVICE INDEBTEDNESS CASES FOR AMOUNTS OF $25 OR LESS AND DISCUSSED THE QUESTION.

View Decision

B-117604, MAR 6, 1972

MILITARY PERSONNEL - OUT-OF-SERVICE CLAIMS - DIMINISHING RETURNS CONCERNING WHETHER COLLECTION ACTION MAY BE WAIVED IN OUT-OF-SERVICE CLAIMS WHERE THE INDEBTEDNESS INVOLVED IS $25 OR LESS. DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE ACTION NO. 455, WHICH PROPOSED THAT COLLECTION ACTION SHOULD NOT BE TAKEN IN OUT OF- SERVICE INDEBTEDNESS CASES FOR AMOUNTS OF $25 OR LESS, APPEARS TO BE A REASONABLE EFFORT TO CONFORM WITH THE POINT OF DIMINISHING RETURNS CONSISTENT WITH THE FEDERAL CLAIMS COLLECTION ACT OF 1966, 31 U.S.C. 951- 953, AND THE STANDARDS OF 4 CFR 104.3. ACCORDINGLY, COLLECTION ON SUCH CLAIMS NEED NOT BE TAKEN WHEN A NOTICE OF EXCEPTION HAS NOT BEEN ISSUED. WITH REGARD TO THE $10 LIMITATION FIXED BY COMMITTEE ACTION NO. 266, IT IS RECOMMENDED THAT CONSIDERATION BE GIVEN TO WITHHOLDING PAYMENT WHEN THE COSTS OF PROCESSING, ON THE AVERAGE, EQUAL OR EXCEED THE AMOUNT OF THE UNDERPAYMENT UNLESS A CLAIM IS SUBMITTED BY THE MEMBER.

TO MR. SECRETARY:

FURTHER REFERENCE IS MADE TO LETTER DATED NOVEMBER 18, 1971, FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER), REQUESTING A DECISION AS TO WHETHER COLLECTION ACTION MAY BE WAIVED IN OUT-OF-SERVICE CLAIMS WHERE THE INDEBTEDNESS INVOLVED IS $25 OR LESS AND IF NOT, MAY COLLECTION ACTION BE WAIVED WHERE THE AMOUNT IS (1) $15 OR LESS OR (2) $20 OR LESS.

THERE WAS ENCLOSED A COPY OF DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE ACTION NO. 455 WHICH PROPOSED THAT COLLECTION ACTION SHOULD NOT BE TAKEN IN OUT-OF-SERVICE INDEBTEDNESS CASES FOR AMOUNTS OF $25 OR LESS AND DISCUSSED THE QUESTION. IT WAS STATED STUDIES CONDUCTED BY THE VARIOUS SERVICES DISCLOSED THAT THE PER CLAIM COST OF OUT-OF- SERVICE INDEBTEDNESS RANGES FROM $11.82 TO $26.47 AND THE COLLECTION RATE RANGES FROM 54 PERCENT TO 75 PERCENT.

PRESENTLY, COLLECTION ACTION IN CASES OF MEMBERS NO LONGER ON ACTIVE DUTY IS NOT UNDERTAKEN FOR OVERPAYMENTS IN AMOUNTS OF $10 OR LESS EXCEPT WHEN A NOTICE OF EXCEPTION HAS BEEN ISSUED IN ACCORDANCE WITH PROPOSAL CONTAINED IN COMMITTEE ACTION NO. 266. IT WAS ALSO PROPOSED IN THAT COMMITTEE ACTION THAT PAYMENT BE WITHHELD IN SUCH CASES WHEN AN UNDERPAYMENT OF $10 OR LESS EXISTS UNLESS CLAIM IS SUBMITTED BY THE MEMBER. ON MAY 9, 1960, WE CONCURRED IN THE ACTION PROPOSED BY COMMITTEE ACTION NO. 266.

THE PROPOSAL IN COMMITTEE ACTION NO. 455, SUPPORTED BY COST AND COLLECTION DATA, APPEARS TO BE A REASONABLE EFFORT TO CONFORM WITH THE POINT OF DIMINISHING RETURNS CONSISTENT WITH THE FEDERAL CLAIMS COLLECTION ACT OF 1966, 31 U.S.C. 951-953, AND THE STANDARDS PROMULGATED THEREUNDER (4 CFR 104.3). SEE, ALSO, 4 GAO 55.3. ACCORDINGLY, COLLECTION ACTION ON OUT-OF-SERVICE CLAIMS IN THE AMOUNT OF $25 OR LESS NEED NOT BE TAKEN WHEN A NOTICE OF EXCEPTION HAS NOT BEEN ISSUED. COLLECTION ACTION SHOULD CONTINUE TO BE TAKEN WHEN A NOTICE OF EXCEPTION HAS BEEN ISSUED.

COMMITTEE ACTION NO. 455 MAKES NO NEW PROPOSAL WITH REGARD TO UNDERPAYMENTS IN OUT-OF-SERVICE CASES AND CONSEQUENTLY, THE $10 LIMITATION FIXED BY COMMITTEE ACTION NO. 266 IN SUCH CASES WILL STILL APPLY. IN THIS REGARD, THE PRESENT COSTS OF PROCESSING SUCH PAYMENTS IN CASES WHERE PAYMENT CAN NO LONGER BE MADE BY DISBURSING OFFICERS MAY WARRANT SOME INCREASE IN THE LIMITATION ON PAYMENT OF UNDERPAYMENTS IN OUT-OF-SERVICE CASES WHERE NO CLAIM IS MADE. IT IS SUGGESTED, THEREFORE, THAT STUDIES BE MADE AS TO THE PER PAYMENT COST OF PAYMENTS IN OUT-OF-SERVICE CASES AND IF SUCH STUDIES DISCLOSE AN INCREASE IN PROCESSING COSTS, THAT CONSIDERATION BE GIVEN TO WITHHOLDING PAYMENT WHEN SUCH COSTS, ON THE AVERAGE, EQUAL OR EXCEED THE AMOUNT OF THE UNDERPAYMENT UNLESS A CLAIM IS SUBMITTED BY THE MEMBER.

PLEASE ADVISE US OF YOUR FINDINGS AND ACTION IN THIS MATTER.

GAO Contacts

Office of Public Affairs