B-194738, FEB 29, 1980

B-194738, FEB 29, 1980

DIGEST: CONSIDERING THE AMOUNT OF THE OVERPAYMENTS, A SERVICE MEMBER WHO RECEIVED ERRONEOUS PAYMENTS OF FLIGHT PAY AT A TIME HE WAS NOT QUALIFIED TO FLY AND DID NOT FLY SHOULD HAVE KNOWN THAT HE WAS RECEIVING EXCESS PAYMENTS, AND THAT HE WOULD BE REQUIRED TO REFUND THEM. THEREFORE, HE IS NOT WITHOUT FAULT IN THE MATTER SO AS TO PERMIT WAIVER OF HIS DEBT. FURTHER, FINANCIAL HARDSHIP, ALONE, RESULTING FROM COLLECTION IS NOT SUFFICIENT REASON FOR A MEMBER TO RETAIN THE PAYMENTS THAT HE SHOULD HAVE KNOWN DID NOT BELONG TO HIM.

LIEUTENANT COMMANDER MELVIN W. MILLS, USN, RETIRED:

LIEUTENANT COMMANDER MELVIN W. MILLS REQUESTS RECONSIDERATION OF OUR CLAIMS DIVISION'S SEPTEMBER 26, 1978 DENIAL OF HIS APPLICATION FOR WAIVER OF HIS DEBT TO THE UNITED STATES IN THE TOTAL AMOUNT OF $6,007.50. THE DEBT AROSE FROM ERRONEOUS PAYMENTS OF FLIGHT PAY MADE TO HIM INCIDENT TO HIS SERVICE IN THE UNITED STATES NAVY. THE DENIAL OF WAIVER IS SUSTAINED.

WHILE SERVING AS A LIEUTENANT COMMANDER IN THE NAVY, MR. MILLS THROUGH DISBURSING ERROR WAS PAID FLIGHT PAY DURING THE PERIOD AUGUST 15, 1973, THROUGH SEPTEMBER 15, 1975, WHEN HE DID NOT FLY AND WHILE NOT PHYSICALLY QUALIFIED FOR DUTY INVOLVING THE ACTUAL CONTROL OF AIRCRAFT.

MR. MILLS, IN HIS ORIGINAL REQUEST FOR WAIVER, CONTENDED THAT HE DID NOT KNOW OR SUSPECT THAT HE WAS BEING OVERPAID; THAT ALTHOUGH HE WAS MEDICALLY GROUNDED, HE WAS TRANSFERRED IN SEPTEMBER 1973 WITH ORDERS TO DUTY INVOLVING FLYING FOR OPERATIONS AND TRAINING; AND THAT HE WAS NEVER OFFICIALLY NOTIFIED THAT BY FAILING TO MEET FLIGHT TIME MINIMUMS, HE FORFEITED FLIGHT PAY. FURTHER, HE STATED THAT AFTER HIS TRANSFER, HE WAS INFORMED THAT CERTAIN OFFICERS WERE NOT REQUIRED TO MEET FLIGHT MINIMUMS AND HE BELIEVED THAT HE REMAINED ELIGIBLE FOR FLIGHT PAY. IN HIS APPEAL, HE ALSO CONTENDS IN ESSENCE THAT DURING THE PERIOD OF THE OVERPAYMENT HE FLEW IN A CREW STATUS AND THAT HE SHOULD HAVE BEEN NOTIFIED BY LETTER THAT HE WAS NOT ENTITLED TO THE FLIGHT PAY. FURTHER, HE STATED THAT REPAYMENT OF THE DEBT WOULD RESULT IN UNDUE HARDSHIP ON HIS FAMILY.

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 DECISIONS B-184514, SEPTEMBER 10, 1975, AND B-193450, FEBRUARY 26, 1979.

IN THE PRESENT SITUATION, MR. MILLS HAS INDICATED THAT HE KNEW THAT HE WAS MEDICALLY GROUNDED, THAT HE WAS AWARE OF FLIGHT TIME MINIMUMS, AND THAT HIS ELIGIBILITY FOR FLIGHT PAY WAS QUESTIONABLE. THERE IS NO EVIDENCE OF ANY ATTEMPT ON HIS PART TO OBTAIN A DETERMINATION OF HIS CONTINUED ENTITLEMENT TO THE FLIGHT PAY. FAILURE TO RECEIVE A LETTER OF NOTIFICATION DID NOT RELIEVE AN OFFICER OF HIS RANK AND EXPERIENCE OF THE RESPONSIBILITY TO DETERMINE HIS CORRECT STATUS AND HIS ENTITLEMENT TO RECEIPT OF FLIGHT PAY AFTER JUNE 1973.

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 DECISIONS B-188595, JUNE 3, 1977; B-124770, SEPTEMBER 16, 1955; AND CASES CITED THEREIN. ALSO, 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.

SINCE MR. MILLS 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, THE ACTION OF OUR CLAIMS DIVISION DENYING WAIVER IS SUSTAINED.