B-196226, NOV 20, 1979

DIGEST: A SERVICE MEMBER ERRONEOUSLY PAID BAQ DURING A PERIOD HE OCCUPIED GOVERNMENT LEASED HOUSING, MAY HAVE THE DEBT WAIVED FOR THE FIRST 3 MONTHS DURING WHICH HE BEGAN A NEW DUTY ASSIGNMENT, MOVED INTO LEASED QUARTERS, HIS PAY ACCOUNT WAS CONVERTED TO JUMPS AND HIS LEAVE AND EARNINGS STATEMENTS (LES'S) WERE INCOMPLETE. HOWEVER, WHEN HE FAILED TO REQUEST A COMPLETE EXPLANATION OF HIS PAY AFTER DOUBTING THE ACCURACY OF HIS LES'S, HE IS NOT WITHOUT FAULT IN THE MATTER SO AS TO PERMIT WAIVER OF SUBSEQUENT ERRONEOUS PAYMENTS. FURTHER, FINANCIAL HARDSHIP, ALONE, RESULTING FROM COLLECTION IS NOT A SUFFICIENT REASON TO RETAIN THE PAYMENTS THAT HE SHOULD HAVE KNOWN DID NOT BELONG TO HIM.

PETTY OFFICER ROBERT R. MCGHEE, JR., USN:

PETTY OFFICER ROBERT R. MCGHEE, JR., USN, REQUESTS RECONSIDERATION OF OUR CLAIMS DIVISION'S JULY 20, 1979 DENIAL OF HIS APPLICATION FOR WAIVER OF HIS DEBT TO THE UNITED STATES IN THE TOTAL AMOUNT OF $2,841. THE DEBT AROSE FROM ERRONEOUS PAYMENTS OF BASIC ALLOWANCE FOR QUARTERS (BAQ) MADE TO HIM WHILE OCCUPYING GOVERNMENT LEASED HOUSING. WAIVER IS GRANTED FOR ERRONEOUS PAYMENTS MADE FOR 3 MONTHS WHEN THE ERROR WAS NOT APPARENT, AND DENIAL OF WAIVER FOR THE SUCCEEDING PERIOD IS SUSTAINED.

THE RECORD SHOWS THAT MR. MCGHEE OCCUPIED GOVERNMENT LEASED HOUSING ON DECEMBER 1, 1976. DUE TO ADMINISTRATIVE ERROR, THE DISBURSING OFFICER FAILED TO STOP PAYMENT OF BAQ TO WHICH MR. MCGHEE WAS NOT ENTITLED WHILE OCCUPYING GOVERNMENT FURNISHED QUARTERS. 37 U.S.C. 403(B) (1976). AS A RESULT HE WAS ERRONEOUSLY PAID BAQ FOR THE PERIOD DECEMBER 1, 1976, THROUGH FEBRUARY 28, 1978, IN AMOUNTS RANGING FROM $183 TO $202.20 PER MONTH.

MR. MCGHEE, IN HIS ORIGINAL REQUEST FOR WAIVER, INDICATED THAT HIS PAY ACCOUNT WAS CONVERTED TO THE COMPUTERIZED JOINT UNIFORM MILITARY PAY SYSTEM (JUMPS) IN DECEMBER 1976, AT ABOUT THE SAME TIME HE BEGAN NEW DUTIES AS A NAVY RECRUITER IN DANVILLE, KENTUCKY. HE SAYS THAT AT THAT TIME ALSO, THE LANDLORD OF THE GOVERNMENT LEASED HOUSING HE WAS ASSIGNED TO WAS COMPLAINING TO HIM OF NOT BEING PAID AND HE HAD TO CHECK ON THE ARRANGEMENTS FOR THOSE PAYMENTS. HE ALSO CONTENDED THAT HE QUESTIONED THE ACCURACY OF HIS LEAVE AND EARNINGS STATEMENTS (LES'S) FOR DECEMBER 1976 AND JANUARY 1977 AND WAS ADVISED BY HIS SUPERVISOR THAT THE LES'S WERE NOT "COMPETENT OR COMPLETE" AND THEY COULD NOT BE RELIED UPON. HIS SUPERVISOR, CHIEF FLOREA, ESSENTIALLY CONFIRMS THIS. MR. MCGHEE ALSO SAYS HE WAS TOLD HIS PAY WAS IN ORDER IN EVERY ASPECT, AND THAT SINCE HIS PAY INCREASED DURING 1977, HE DID NOT SUSPECT THAT HE WAS BEING OVERPAID.

ON ABOUT MARCH 2, 1978, AFTER CALCULATING HIS PAY AND DETERMINING THE POSSIBILITY OF ERROR, HE NOTIFIED THE PAYROLL CLERK IN DISBURSING WHO DETERMINED THAT BAQ WAS NOT DEDUCTED. IN HIS APPEAL, HE ALSO CONTENDS IN ESSENCE THAT IN 1976 HE HAD NO TROUBLE WITH HIS PAY UNTIL JUMPS WENT INTO EFFECT, AND THAT HE CANNOT AFFORD TO PAY THE DEBT.

SECTION 2774 OF TITLE 10, U.S.C. (1976), PROVIDES OUR AUTHORITY TO WAIVE CERTAIN DEBTS WHEN COLLECTION WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE UNITED STATES. HOWEVER, SUBSECTION 2774(B) PRECLUDES WAIVER IF, IN THE OPINION OF THE COMPTROLLER GENERAL -

"*** THERE EXISTS, IN CONNECTION WITH THE CLAIM, AN INDICATION OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON THE PART OF THE MEMBER

WE INTERPRET THE WORD "FAULT", AS USED IN 10 U.S.C. 2774, AS INCLUDING SOMETHING MORE THAN A PROVEN OVERT ACT OR OMISSION BY THE MEMBER. THUS, WE CONSIDER FAULT TO EXIST IF IN LIGHT OF ALL OF THE FACTS IT IS DETERMINED THAT THE MEMBER SHOULD HAVE KNOWN THAT AN ERROR EXISTED AND TAKEN ACTION TO HAVE IT CORRECTED. THE STANDARD WE EMPLOY IS TO DETERMINE WHETHER A REASONABLE PERSON SHOULD HAVE BEEN AWARE THAT HE WAS RECEIVING PAYMENT IN EXCESS OF HIS PROPER ENTITLEMENT. SEE DECISION B-184514, SEPTEMBER 10, 1975, AND B-193450, FEBRUARY 26, 1979.

IN THE PRESENT SITUATION, MR. MCGHEE'S PAY ACCOUNT WAS CONVERTED TO JUMPS AT THE TIME HE STARTED A NEW ASSIGNMENT AS A NAVY RECRUITER IN DECEMBER 1976 AND HE THEN RECEIVED A DIFFERENT FORM OF LES. FURTHER, THE GOVERNMENT DID NOT MAKE PAYMENT FOR THE LEASED QUARTERS UNTIL THE END OF JANUARY 1977, THE LES FOR DECEMBER 1976 APPEARS TO BE INCOMPLETE, AND SUBSEQUENT LES'S WERE PROBABLY NOT RECEIVED UNTIL NEAR THE END OF THE MONTH. WHEN HE WAS FIRST AWARE OF THE POSSIBILITY OF ERROR AND QUESTIONED THE ACCURACY OF HIS PAY, HE MAY HAVE REASONABLY CONSIDERED THAT HE WAS ENTITLED TO THE NET AMOUNT OF PAY THAT HE RECEIVED FROM DECEMBER 1976 THROUGH FEBRUARY 1977. THEREFORE, WE CONCLUDE THAT THE ERRONEOUS PAYMENTS FOR THAT PERIOD MAY BE WAIVED.

THEREAFTER WHEN HIS PAY STABILIZED AND IT BECAME CLEAR THAT THE GOVERNMENT WAS PAYING DIRECTLY TO HIS LANDLORD FOR THE LEASED QUARTERS, HE SHOULD HAVE REALIZED THAT HE WAS RECEIVING MORE PAY THAN HE COULD REASONABLY EXPECT. HE SHOULD HAVE KNOWN THAT HE WAS NOT ENTITLED TO LIVE IN GOVERNMENT LEASED QUARTERS AND STILL RECEIVE BAQ, AND HE SHOULD HAVE REQUESTED A COMPLETE EXPLANATION OF HIS PAY RATHER THAN A VERBAL ASSURANCE THAT IT WAS ACCURATE. SINCE THE CORRECTNESS OF THE PAYMENTS RECEIVED AFTER FEBRUARY 1977 WERE SO DOUBTFUL, HE SHOULD HAVE, AT A MINIMUM, SET ASIDE THESE EXCESSIVE AMOUNTS UNTIL A DEFINITE DETERMINATION AND STATEMENT HAD BEEN MADE TO HIM FULLY EXPLAINING THE ENTITLEMENT.

THE FACT THAT THE OVERPAYMENTS WERE MADE THROUGH ADMINISTRATIVE ERROR DOES NOT RELIEVE AN INDIVIDUAL OF RESPONSIBILITY TO DETERMINE THE TRUE STATE OF AFFAIRS IN CONNECTION WITH OVERPAYMENTS. IT IS FUNDAMENTAL THAT PERSONS RECEIVING MONEY ERRONEOUSLY PAID BY A GOVERNMENT AGENCY OR OFFICIAL ACQUIRE NO RIGHT TO THE MONEY; SUCH PERSONS ARE BOUND IN EQUITY AND GOOD CONSCIENCE TO MAKE RESTITUTION. SEE B-188595, JUNE 3, 1977; B-124770, SEPTEMBER 16, 1955; AND CASES CITED THEREIN.

FINANCIAL HARDSHIP ALONE, RESULTING FROM COLLECTION, IS NOT A SUFFICIENT REASON TO RETAIN THE PAYMENTS HE SHOULD HAVE KNOWN DID NOT BELONG TO HIM. B-183460, MAY 28, 1975; B-192380, NOVEMBER 8, 1978. THEREFORE, SINCE MR. MCGHEE HAD A DUTY AND LEGAL OBLIGATION TO RETURN THE EXCESS SUMS OR SET ASIDE THIS AMOUNT FOR REFUND AT SUCH TIME AS THE ADMINISTRATIVE ERROR WAS CORRECTED, WE ARE UNABLE TO CONCLUDE THAT HE IS FREE FROM FAULT, AND COLLECTION ACTION IS NOT AGAINST EQUITY AND GOOD CONSCIENCE NOR CONTRARY TO THE BEST INTERESTS OF THE UNITED STATES.

ACCORDINGLY, WAIVER IS GRANTED FOR THE BAQ PAYMENTS MADE FOR THE PERIOD DECEMBER 1, 1976, THROUGH FEBRUARY 1977, BUT THE ACTION TAKEN BY OUR CLAIMS DIVISION DENYING WAIVER FOR BAQ PAYMENTS MADE FOR THE PERIOD MARCH 1977 THROUGH FEBRUARY 1978 IS SUSTAINED.