B-197290 O/M, Nov 14, 1990

B-197290 O/M, Nov 14, 1990

APPROPRIATIONS/FINANCIAL MANAGEMENT - Claims By Government - Illegal/improper payments - Waiver - Statutory regulations - Amendments DIGEST: 1. The Waiver Acts (5 U.S.C. Sec. 5584, 10 U.S.C. Sec. 2774, and 32 U.S.C. Sec. 716) were amended by Public Law 99-224, December 28, 1985, 99 Stat. 1741-1742, to permit waiver of collection of erroneous payments of travel, transportation, and relocation expenses and allowances made to or on behalf of civilian employees or members of the uniformed services. The GAO's waiver regulations in 4 C.F.R. Parts 91 93 are amended to reflect the statutory changes and to bring the regulations into conformance with current administrative practices. The amendment is in the form of a proposed rule to be published in the Federal Register with a 60-day period for comments. APPROPRIATIONS/FINANCIAL MANAGEMENT - Claims By Government - Debt collection - Agency officials - Authority - Waiver 2. The Civilian Personnel Waiver Act, 5 U.S.C. Sec. 5584 (1988), was amended by Public Law 100-702, Nov. 19, 1988, 102 Stat. 4667, to extend waiver authority to employees of the judicial branch. The Director, Administrative Office of the United States Courts, is the agency head for this purpose and is authorized to grant waiver up to $10,000. The GAO's waiver regulations in 4 C.F.R. Parts 91-93 are amended to reflect the statutory amendment.

Attorneys

Amendments to the Waiver Regulations -

Attached are our revised proposed regulations for publication in the Federal Register. The Claims Group concurs with the proposed regulations. There are five issues for particular consideration.

1. Judicial branch employees, pages 3 and 5-6, pages 15-16 at 91.2(a)(6) and 91.2(c), and pages 19-20 at 91.4(b) and (c)(1).

In addition to the 1985 statutory amendment that added travel, transportation, and relocation expenses, the Congress in 1988 amended 5 U.S.C. Sec. 5584 to include judicial branch employees for the first time. The Director, Administrative Office of the U.S. Courts, is considered the agency head for this purpose and is authorized to grant waiver up to $10,000.

2. Waiver of travel advances, pages 6-7 at paragraph 8 and page 21 at 91.4(d).

This provision incorporates the holdings in Rajindar N. Khanna, B-225263, June 28, 1988, 67 Comp.Gen. 493, and Major Kenneth M. Dieter, B-226842, June 28, 1988, 67 Comp.Gen. 496, regarding the circumstances under which the repayment of travel advances will be considered for waiver.

3. Cost of processing waiver applications, page 9 at paragraph 2 and page 25 at 92.2.

This provision permits agencies to suspend processing an application for waiver and terminate collection action on the underlying claim when the cost of processing the application is likely to exceed the amount recoverable on the claim and when there are no countervailing government policies. This follows the approach taken in 65 Comp.Gen. 893 (1986), which holds that debt collection efforts may be terminated when the cost of collection is likely to exceed the amount recoverable and there are no countervailing government policies.

4. Appeal of Claims Group determinations, pages 10-11 at paragraph 5 and page 30 at 92.6(b).

This provision allows agencies as well as individuals to appeal waiver actions by the Claims Group. The language allowing agency appeals was in prior drafts of these regulations and there was no disagreement about this provision. However, in Cynthia Baxter, B-222679, Aug. 20, 1987, Mr. Socolar raised objections to allowing an agency to appeal. In a note to file B-222679 dated April 29, 1987, he raised the following issues:

"Waiver of a debt is a matter between the waiving authority and the debtor. Is it appropriate to hear an appeal from the paying agency? Once the CG has waived a debt, what is the basis (apart from fraud) for considering the matter again? Doesn't the Claims action constitute a good waiver?"

We believe agencies should be permitted to appeal because it permits a review of possible error. We note that under 4 C.F.R. Sec. 32.1 agencies may appeal a claims settlement to the Comptroller General, and occasionally they do. We believe agencies should have the same rights with respect to waiver settlements.

We discussed with the Claims Group the proposal to place a time limit on appeals. The point was made that agencies very seldom do actually appeal and that they do so promptly. Appeals from employees are also normally filed promptly because they otherwise face collection action. Also, there are no time limits on claims appeals generally. Since the absence of time limits has not been a problem, we deleted any time limit on waiver appeals.

5. Application for refund, page 11 at paragraph 6 and pages 30-31 at 92.7.

Each of the three waiver statutes provides for a refund of amounts repaid on a claim which has been waived and each contains language comparable to 5 U.S.C. Sec. 5584, as follows:

"(c) A person who has repaid to the United States all or part of the amount of a claim, with respect to which a waiver is granted under this section, is entitled, to the extent of the waiver, to refund, by the employing agency at the time of the erroneous payment, of the amount repaid to the United States, if he applies to that employing agency for that refund within two years following the effective date of the waiver. The employing agency shall pay that refund in accordance with this section." (Emphasis added.)

The proposed 92.7(a) provides that any repayment or partial repayment shall be construed as an application for refund. The assumption is that anyone advised of their rights to get money back will ask for the money back so why require the agency to ask the obvious. The 2-year limit is retained, however, and no refund may be paid if the employee or member cannot reasonably be located within 2 years of the date of waiver.

Under this approach, there would never be a case where an eligible person is denied a refund because he or she did not make a separate application for a refund. Moreover, this "automatic" refund provision is proposed as a sensible way to reduce paperwork and administrative effort.