B-173977, SEP 14, 1971

B-173977, SEP 14, 1971

CIVILIAN EMPLOYEE - CLAIM BY THE U.S. - PAYROLL DEDUCTIONS AFFIRMING CLAIMS DIVISION SETTLEMENT WHICH DENIED REQUEST FOR WAIVER OF A CLAIM BY THE U.S. FOR $553.66 DUE TO THE NONDEDUCTION OF HEALTH INSURANCE PREMIUMS FROM CLAIMANT'S PAYCHECK. WHERE CLAIMANT CHANGED OFFICIAL DUTY STATIONS AND STANDARD FORM 2810 CONCERNING TRANSFERS OF INSURANCE WAS INADVERTENTLY NOT FORWARDED TO THE PROPER ACCOUNTING AUTHORITIES, CLAIMANT SHOULD HAVE REASONABLY KNOWN THAT PREMIUMS FOR HEALTH INSURANCE WERE NO LONGER BEING DEDUCTED. THUS IT CANNOT BE SAID THAT CLAIMANT WAS WITHOUT FAULT IN NOT PROPERLY NOTIFYING HIS SUPERIORS OF SUCH FACT. THERE IS NO PROPER BASIS FOR WAIVER UNDER 5 U.S.C. 5584 IN THE CIRCUMSTANCES.

TO MR. JAMES A. JOHNSON:

WE REFER TO YOUR LETTER OF AUGUST 14, 1971, TO SENATOR WARREN G. MAGNUSON WHICH WILL BE VIEWED AS CONSTITUTING AN APPEAL FROM THE ACTION OF OUR CLAIMS DIVISION IN DENYING YOUR REQUEST FOR WAIVER UNDER THE AUTHORITY OF 5 U.S.C. 5584, AS ADDED BY PUBLIC LAW 90-616, APPROVED OCTOBER 21, 1968, OF ERRONEOUS PAYMENT OF PAY WHILE EMPLOYED BY THE NAVAL AMMUNITION DEPOT BANGOR, BREMERTON, WASHINGTON.

THE RECORD INDICATES THAT YOU WERE TRANSFERRED TO THE NAVAL AMMUNITION DEPOT BANGOR, BREMERTON, WASHINGTON, ON JANUARY 28, 1968. PRIOR TO AND CONCURRENT WITH THE TIME OF YOUR TRANSFER YOU WERE ENROLLED IN A HEALTH INSURANCE PLAN. BY VIRTUE OF SUCH ENROLLMENT DEDUCTIONS FOR PREMIUMS WERE BEING MADE FROM YOUR PAYCHECKS. WHEN YOUR TRANSFER WAS EFFECTED, HOWEVER, STANDARD FORM 2810 CONCERNING TRANSFERS OF INSURANCE WAS INADVERTENTLY NOT PREPARED AND FORWARDED TO THE PROPER ACCOUNTING AUTHORITIES. AS A RESULT PREMIUMS FOR HEALTH INSURANCE BENEFITS WERE NOT DEDUCTED FROM YOUR SALARY DURING THE PERIOD JANUARY 28, 1968, TO JANUARY 10, 1970, IN THE TOTAL AMOUNT OF $553.66. THE RECORD FURTHER SHOWS THAT YOU USED AND RECEIVED BENEFITS FROM THE MEDICAL PLAN DURING THE PERIOD OF THE GOVERNMENT'S CLAIM. DISCOVERY OF THE ERROR WAS MADE IN DECEMBER 1969 AT THE TIME YOU ELECTED TO CHANGE YOUR INSURANCE PLAN. YOU STATE THAT IT WAS YOUR OPINION THAT THE DEDUCTIONS WERE BEING TAKEN OUT OF THE PAYCHECKS DURING THE PERIOD IN QUESTION. HOWEVER, BIWEEKLY EARNINGS STATEMENTS WERE FURNISHED YOU DURING THE PERIOD IN QUESTION WHICH REFLECTED THAT NO DEDUCTIONS WERE BEING MADE FOR HEALTH INSURANCE. THE DEDUCTIONS, IF MADE, WOULD HAVE APPEARED, AND DID SO APPEAR PREVIOUS TO FEBRUARY 10, 1968, AS "FIXED DEDUCTIONS." THE ONLY ENTRIES UNDER THE "FIXED DEDUCTIONS" CATEGORY OF THE STATEMENTS WERE $18.75 EACH PAY PERIOD, THE AMOUNT YOU HAD AUTHORIZED TO BE DEDUCTED FOR GOVERNMENT BONDS.

YOU ASSERT THAT A WAIVER OF THE CLAIM IS AUTHORIZED BY 5 U.S.C. 5584, AS ADDED BY PUBLIC LAW 90-616, APPROVED OCTOBER 21, 1968, ON THE THEORY THAT THE ERROR IN QUESTION WAS ONE OF ADMINISTRATIVE ORIGIN AND HAD YOU NOTICED THE ERROR YOU WOULD HAVE BROUGHT IT TO THE ATTENTION OF THE APPROPRIATE INDIVIDUALS.

WE CONCUR THAT UNDER CERTAIN CIRCUMSTANCES OVERPAYMENT RESULTING FROM FAILURE TO WITHHOLD APPROPRIATE DEDUCTIONS MAY BE WAIVED UNDER THE AUTHORITY OF THE ABOVE STATUTE IF THERE IS AN ABSENCE OF ANY INDICATION OF "FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH *** ."

WHETHER AN EMPLOYEE WHO RECEIVES AN ERRONEOUS PAYMENT IS FREE FROM FAULT IN THE MATTER CAN ONLY BE DETERMINED BY A CAREFUL ANALYSIS OF ALL PERTINENT FACTS, NOT ONLY THOSE GIVING RISE TO OVERPAYMENT BUT THOSE INDICATING WHETHER THE EMPLOYEE REASONABLY COULD HAVE BEEN EXPECTED TO HAVE BEEN AWARE THAT AN ERROR HAD BEEN MADE. IF UNDER THE CIRCUMSTANCES INVOLVED A REASONABLE MAN WOULD HAVE MADE INQUIRY AS TO THE CORRECTNESS OF THE PAYMENT AND THE EMPLOYEE INVOLVED DID NOT, THEN IN OUR OPINION THE EMPLOYEE COULD NOT BE SAID TO BE FREE FROM FAULT IN THE MATTER AND THE CLAIM AGAINST HIM SHOULD NOT BE WAIVED.

PRIOR TO YOUR TRANSFER DEDUCTIONS WERE BEING MADE FOR GOVERNMENT BONDS AS WELL AS HEALTH INSURANCE PREMIUMS. THIS IS IN SHARP CONTRAST WITH THE DEDUCTIONS NOTED ON THE PAYROLL STATEMENTS FURNISHED TO YOU AFTER THE TRANSFER WHICH NOTED A DEDUCTION ONLY IN THE AMOUNT OF $18.75, THE AUTHORIZED DEDUCTION FOR GOVERNMENT BONDS. THEREFORE, YOU SHOULD HAVE REASONABLY KNOWN THAT PREMIUMS FOR HEALTH INSURANCE WERE NOT BEING DEDUCTED SUBSEQUENT TO YOUR CHANGE OF EMPLOYMENT LOCATIONS. THUS, IT CANNOT BE SAID THAT YOU WERE WITHOUT FAULT IN NOT PROMPTLY NOTIFYING YOUR OFFICE OF SUCH FACT. SEE B-165663, JANUARY 30, 1969, COPY ENCLOSED.

IN LIGHT OF THE FACTS, WE MUST CONCLUDE THAT THERE IS NO PROPER BASIS UNDER 5 U.S.C. 5584 FOR WAIVING THE ERRONEOUS PAYMENT OF PAY RECEIVED BY YOU. ACCORDINGLY, DENIAL OF YOUR REQUEST FOR WAIVER UNDER THE STATUTE CITED IS AFFIRMED.