B-178322, JUL 5, 1973

B-178322, JUL 5, 1973

UNDER THE AUTHORITY CONFERRED BY 10 U.S.C. 2774, AND IN VIEW OF THE FACTS AND CIRCUMSTANCES INVOLVED IN THIS CASE, WE HEREBY WAIVE THE TOTAL OVERPAYMENT OF $975.12. SINCE THE INDEBTEDNESS HAS BEEN REPAID MR. JENNINGS SHOULD BE NOTIFIED OF THE WAIVER AND HIS RIGHT TO FILL CLAIM FOR THE AMOUNT WHICH HE HAS REFUNDED.

TO MR. SECRETARY:

THIS IS IN FURTHER REFERENCE TO OUR LETTER DATED APRIL 12, 1973, REQUESTING A REPORT FROM THE DEPARTMENT OF THE NAVY CONCERNING THE PROPRIETY OF WAIVING THE CLAIM OF THE UNITED STATES IN THE AMOUNT OF $876.72 AGAINST LIEUTENANT (JG) ROBERT JENNINGS, UNITED STATES NAVAL RESERVE, UNDER THE PROVISIONS OF PUBLIC LAW 92-453, OCTOBER 2, 1972, 86 STAT. 758, WHICH AMENDED TITLE 10, U.S. CODE, BY ADDING SECTION 2774. THE CLAIM AROSE AS A RESULT OF OVERPAYMENTS OF BASIC PAY.

IN REPORT DATED MAY 23, 1973, FROM THE DEPARTMENT OF THE NAVY IT IS INDICATED THAT DEPARTMENTAL RECORDS DO NOT DISCLOSE ANY REASON FOR THE OVERPAYMENT OR THAT THERE IS ANY SHOWING THE ADMINISTRATIVE ERROR RESULTING IN THE OVERPAYMENT WAS CAUSED BY MR. JENNINGS.

OUR EXAMINATION OF MR. JENNINGS' PAY RECORDS INDICATES FOR THE PAY PERIOD NOVEMBER 14, 1971 THROUGH JULY 31, 1972, HE WAS PAID AT THE BASIC MONTHLY PAY RATE OF A LIEUTENANT WITH OVER 4 YEARS' SERVICE. THIS PAY RATE WAS ERRONEOUS SINCE HE HAD NOT BEEN PROMOTED TO LIEUTENANT, BUT WAS IN FACT A LIEUTENANT, JUNIOR GRADE. NO EXPLANATION FOR PAYMENT OF THE ERRONEOUS RATE IS APPARENT FROM THE OFFICER'S PAY RECORDS OTHER THAN IT WOULD APPEAR TO HAVE BEEN CAUSED BY AN ADMINISTRATIVE ERROR. THE ERROR, WHICH OCCURRED IN HIS BASIC PAY AROUND NOVEMBER 14, 1971, WAS NOT DETECTED UNTIL AUGUST 1972. DURING THE SAME PERIOD HE WAS PAID A MONTHLY QUARTERS ALLOWANCE AT THE RATE AUTHORIZED FOR A LIEUTENANT (JG) WITHOUT DEPENDENTS. SUBSEQUENTLY, A PAY ADJUSTMENT AUTHORIZATION WAS ISSUED AUGUST 18, 1972, IN THE AMOUNT OF $876.72, REPRESENTING THE OVERPAYMENT OF BASIC PAY FROM NOVEMBER 14, 1971 THROUGH JUNE 30, 1972. THE INDEBTEDNESS WAS COLLECTED FROM AMOUNTS DUE MR. JENNINGS FOLLOWING DISCOVERY OF THE ERROR AND HE IS NOT AT THIS TIME INDEBTED TO THE UNITED STATES.

WE HAVE CAREFULLY CONSIDERED THE PROPRIETY OF WAIVING MR. JENNINGS' INDEBTEDNESS UNDER THE PROVISIONS OF 10 U.S.C. 2774 AND THE STANDARDS FOR WAIVER, 4 C.F.R. 91 ET SEQ., PROMULGATED IN IMPLEMENTATION THEREOF.

SECTION 2774(A) AS ADDED BY THE ABOVE-MENTIONED ACT PROVIDES THAT A CLAIM OF THE UNITED STATES AGAINST A PERSON ARISING OUT OF AN ERRONEOUS PAYMENT OF PAY OR ALLOWANCE, OTHER THAN TRAVEL OR TRANSPORTATION ALLOWANCES, TO OR ON BEHALF OF A MEMBER OR FORMER MEMBER OF THE UNIFORMED SERVICES, THE COLLECTION OF WHICH WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE UNITED STATES, MAY BE WAIVED IN WHOLE OR IN PART. IF THE CLAIM IS IN AN AMOUNT AGGREGATING NOT MORE THAN $500 THE SECRETARY OF THE SERVICE CONCERNED OR THE COMPTROLLER GENERAL IS VESTED WITH THE AUTHORITY TO WAIVE THE CLAIM OF THE UNITED STATES. CLAIMS AGGREGATING MORE THAN $500 MAY BE WAIVED ONLY BY THE COMPTROLLER GENERAL.

THE STANDARDS FOR WAIVER PROMULGATED PURSUANT TO THE ACT PROVIDES IN PART THAT ANY SIGNIFICANT UNEXPLAINED INCREASE IN PAY OR ALLOWANCES WHICH WOULD REQUIRE A REASONABLE PERSON TO MAKE INQUIRY CONCERNING THE CORRECTNESS OF HIS PAY OR ALLOWANCES, ORDINARILY WOULD PRECLUDE A WAIVER WHEN THE EMPLOYEE OR MEMBER FAILS TO BRING THE MATTER TO THE ATTENTION OF APPROPRIATE OFFICIALS. SEE 4 C.F.R. 91.5(C).

ORDINARILY A BASIC PAY INCREASE FROM THE GRADE OF LIEUTENANT (JG) TO LIEUTENANT WOULD REFLECT SUCH A CHANGE IN THE NET PAY OF A MEMBER THAT HE SHOULD HAVE BEEN ALERTED THAT THE POSSIBILITY OF ADMINISTRATIVE ERROR EXISTED. HOWEVER, IN MR. JENNINGS' CASE DURING THE CRITICAL PERIOD WHEN THE ERROR WAS MADE, CERTAIN EVENTS OCCURRED WHICH WERE REFLECTED IN HIS NET PAY.

ON NOVEMBER 14, 1971, THE WAGE-PRICE FREEZE IMPOSED BY THE PRESIDENT FOR THE PERIOD AUGUST 15, 1971 TO NOVEMBER 13, 1971, TERMINATED AND THE BASIC PAY FOR THOSE MEMBERS IN THE LOWER GRADES WITH SHORT PERIODS OF SERVICE WAS INCREASED AND AN OVERALL INCREASE IN BASIC ALLOWANCES FOR QUARTERS BECAME EFFECTIVE OCTOBER 1, 1971. SEE PUBLIC LAW 92-129, SEPTEMBER 28, 1971, 85 STAT. 355. IT IS OUR VIEW THAT THESE INCREASES HAD A SIGNIFICANT EFFECT ON THE NET PAY OF MR. JENNINGS. ALSO FOR NOTING IS THE FACT THAT JUST PRIOR TO NOVEMBER 14, 1971, MR. JENNINGS WAS SCHEDULED FOR A LONGEVITY INCREASE WHICH WAS NOT GRANTED ON THE DATE DUE AS A RESULT OF THE WAGE-PRICE FREEZE. EFFECTIVE JANUARY 1, 1972, ALL MEMBERS OF THE UNIFORMED SERVICES RECEIVED AN ADDITIONAL INCREASE IN BASIC PAY AUTHORIZED BY EXECUTIVE ORDER NO. 11638 DATED DECEMBER 22, 1971.

ON REVIEWING MR. JENNINGS' PAY RECORDS WE FOUND THAT HIS NET PAY REMAINED FAIRLY STABLE THROUGHOUT THE PERIOD OF THE OVERPAYMENT, THE ONLY FLUCTUATIONS BEING READILY EXPLAINABLE THROUGH EVENTS SUCH AS THE PAY AND ALLOWANCE INCREASE IN NOVEMBER OF 1971, THE BASIC PAY INCREASE IN JANUARY OF 1972, OR THE RETROACTIVE LONGEVITY ADJUSTMENT RECEIVED IN MARCH 1972. THUS, WHILE MR. JENNINGS WAS BEING PAID AT AN ERRONEOUS RATE OF PAY TO WHICH HE WAS NOT ENTITLED, IT IS DIFFICULT TO SAY THAT ON THE BASIS OF THE NET PAY WHICH HE RECEIVED HE SHOULD HAVE BEEN AWARE OF THE ERRONEOUS PAYMENTS.

ALTHOUGH THE MATTER IS NOT FREE FROM DOUBT, THIS CONCLUSION APPEARS REASONABLE AS OUR EXAMINATION INDICATES THAT THE NAVY VERIFIED AND COMPARED MR. JENNINGS' PAY DATA WITH INFORMATION APPEARING IN HIS SERVICE RECORDS IN DECEMBER 1971 BUT DID NOT DISCOVER THE OVERPAYMENT UNTIL AUGUST 1972.

WHILE THE AMOUNT OF $876.72 SET FORTH IN THE BILL REPRESENTS THE AMOUNT OF OVERPAYMENT MADE FROM NOVEMBER 14, 1971 THROUGH JUNE 30, 1972, MR. JENNINGS WAS ACTUALLY OVERPAID AN ADDITIONAL SUM OF $98.40 FOR THE MONTH OF JULY 1972, FOR A TOTAL OVERPAYMENT OF $975.12 WHICH SUM WAS ACTUALLY DEDUCTED FROM HIS PAY BEFORE HIS RELEASE FROM ACTIVE DUTY.

THEREFORE, UNDER THE AUTHORITY CONFERRED BY 10 U.S.C. 2774, AND IN VIEW OF THE FACTS AND CIRCUMSTANCES INVOLVED IN THIS CASE, INDICATING NO FAULT ON THE PART OF MR. JENNINGS, WE HEREBY WAIVE THE TOTAL OVERPAYMENT OF $975.12.

SINCE THE INDEBTEDNESS HAS BEEN REPAID BY MR. JENNINGS, HE HAS, UNDER THE PROVISIONS OF 10 U.S.C. 2774(C), TWO YEARS FROM THE EFFECTIVE DATE OF THE WAIVER IN WHICH TO FILE CLAIM FOR REFUND OF THE AMOUNT WAIVED. THE DEPARTMENT OF THE NAVY SHOULD ADVISE MR. JENNINGS OF THE WAIVER AND OF HIS RIGHT TO FILE CLAIM FOR THE AMOUNT WAIVED WHICH HE HAS REFUNDED.