B-183220, MAY 14, 1975

B-183220, MAY 14, 1975

CONDITIONS FOR WAIVER OF A CLAIM BY THE GOVERNMENT FOR OVERPAYMENT OF SALARY ARE NOT MET WITHIN THE INTENT OF SUBSECTION 91.5(C) OF TITLE 4, CODE OF FEDERAL REGULATIONS, IF AN EMPLOYEE IS AT FAULT. THEREFORE, WHERE EMPLOYEE RECEIVED BIWEEKLY EARNINGS STATEMENTS INDICATING THAT HIS GROSS SALARY HAS BEEN INCREASED BY $148.80 WITHOUT ANY JUSTIFICATION, WAIVER IS PRECLUDED BECAUSE HE IS CONSIDERED PARTLY AT FAULT FOR FAILURE TO REPORT DISCREPANCY TO APPROPRIATE OFFICIALS.

JAMES C. ROSS - WAIVER OF SALARY OVERPAYMENT:

THIS ACTION IS AN APPEAL FROM A SETTLEMENT OF OUR TRANSPORTATION AND CLAIMS DIVISION DATED MARCH 14, 1974, WHICH DENIED WAIVER UNDER AUTHORITY OF SECTION 5584 OF TITLE 5, U.S.C. (SUPP. III, 1973), OF A CLAIM OF THE UNITED STATES AGAINST MR. JAMES C. ROSS FOR OVERPAYMENT OF SALARY.

THE RECORD SHOWS THAT AS AN EMPLOYEE OF THE U.S. ARMY TANK AUTOMATIVE COMMAND (USATACOM) MR. ROSS WAS OVERPAID IN A GROSS AMOUNT OF $1,785.60 DURING THE PERIOD AUGUST 5, 1972, THROUGH JANUARY 6, 1973. THE OVERPAYMENT WAS THE RESULT OF AN ADMINISTRATIVE ERROR IN PLACING AN INCORRECT HOURLY RATE FOR MR. ROSS IN THE MASTER PERSONNEL RECORD DURING A CHANGE IN PROGRAM IN THE AUTOMATED PAYROLL. THE EMPLOYEE'S BIWEEKLY BASE PAY FOR THE PAY PERIOD ENDING JULY 22, 1972, WAS CORRECTLY SHOWN ON HIS PAY PERIOD EARNING STATEMENT AS $692.00 GROSS AND $474.10 NET. THE EMPLOYEE'S BASE PAY FOR THE NEXT PAY PERIOD ENDING AUGUST 5, 1972, AND FOR EACH PAY PERIOD THEREAFTER THROUGH JANUARY 6, 1973, WAS ERRONEOUSLY SHOWN ON THE EARNINGS STATEMENT AS $840.80 GROSS AND $495.63 NET. THUS, MR. ROSS WAS OVERPAID A GROSS OF $148.80 PER PERIOD FOR 12 PAY PERIODS FOR A TOTAL OVERPAYMENT OF $1,785.60.

MR. ROSS DID NOT QUESTION HIS PAY DISCREPANCIES REVEALED BY HIS EARNINGS STATEMENTS UNTIL HE RECEIVED HIS 1972 WAGE AND TAX STATEMENT (FORM W-2) ON FEBRUARY 2, 1973, WHICH MR. ROSS REPORTS REFLECTED GROSS EARNINGS FOR 1972 OF $19,464, AND ALTHOUGH HE COULD NOT DETERMINE THE EXACT AMOUNT OF HIS EARNINGS, HE WAS CERTAIN THE FIGURE SHOULD HAVE BEEN LESS THAN $19,000 FOR TAX PURPOSES. AS A RESULT OF THE INQUIRY THE OVERPAYMENTS WERE DISCOVERED. SUBSEQUENTLY MR. ROSS' REQUEST FOR WAIVER WAS DENIED ON THE GROUND THAT, WHILE THERE WAS NO INDICATION OF FRAUD, MISREPRESENTATION, OR LACK OF GOOD FAITH ON HIS PART, HE WAS PARTLY AT FAULT SINCE HE DID NOT VERIFY THE CORRECTNESS OF THE PAY AND DEDUCTION ITEMS ON HIS EARNINGS STATEMENTS AND BRING ANY UNEXPLAINED CHANGE ON HIS STATEMENTS TO THE ATTENTION OF THE PROPER AUTHORITIES.

IN A LETTER DATED JANUARY 20, 1975, WITH ENCLOSURES, REQUESTING RECONSIDERATION OF THE ACTION OF THE TRANSPORTATION AND CLAIMS DIVISION DENYING WAIVER, MR. ROSS STATES THAT:

"A WITH-IN-GRADE PAY INCREASE DUE ME IN OCTOBER 1971 WAS DEFERRED BY EXECUTIVE ORDER. HOWEVER, I DID RECEIVE THAT INCREASE AT SOMETIME IN 1972 DURING THE VARIOUS ADJUSTMENTS IN PAYCHECKS. I AM NOT CERTAIN OF THE PAY PERIOD IN WHICH THAT INCREASE WAS INCLUDED BECAUSE, EVEN TO THE PRESENT DATE, I HAVE NOT RECEIVED A PAYROLL CHANGE SLIP FOR THAT INCREASE. I DID ASSUME THAT THE FINAL CHANGE THAT YEAR, WHICH INCREASED MY BI-WEEKLY NET PAY BY $21.53, WAS THE ADJUSTMENT THAT INCLUDED MY NEW PAY RATE."

MR. ROSS FURTHER STRESSES THAT HIS NET PAY PER BIWEEKLY PAY PERIOD WAS ONLY INCREASED BY $21.53 WHICH RESULTED IN AN ACCUMULATIVE TOTAL OF $258.36 ERRONEOUS NET PAY AGAINST THE GOVERNMENT CLAIM OF $1,785.60 ERRONEOUS GROSS PAY. HE ALSO STATES THAT PAYROLL CHANGE SLIPS WERE NOT CONSISTENTLY FURNISHED TO EACH EMPLOYEE.

IN REGARD TO THE DEFERRED PAY INCREASE WHICH MR. ROSS ALLEGES HE RECEIVED IN 1972, THE RECORD REVEALS THAT THE PAY INCREASE DID NOT COME WITHIN THE PERIOD IN QUESTION (JULY 22, 1972 - JANUARY 6, 1973) AND THEREFORE WAS RECEIVED, IF AT ALL, PRIOR TO THE TIME THE ERRONEOUS INCREASE IN PAY BEGAN TO BE PAID. ACCORDINGLY, THERE WAS NO REASON FOR MR. ROSS TO HAVE SUSPECTED THAT THE ERRONEOUS PAY INCREASE REPRESENTED HIS DEFERRED PAY INCREASE. THE RECORD SHOWS THAT MR. ROSS FAILED TO QUESTION THE ACCURACY OF HIS PAY FOR A PERIOD OF ALMOST 7 MONTHS, DURING WHICH TIME HE CONTINUED TO RECEIVE STATEMENTS OF HIS EARNINGS ON A BIWEEKLY BASIS SHOWING THAT HE WAS BEING PAID A BIWEEKLY INCOME $148.80 IN EXCESS OF THE CORRECT AMOUNT.

THE RECORD SHOWS THAT, IN ORDER TO ASSIST IT IN DETERMINING WHETHER WAIVE WAS PROPER, OUR TRANSPORTATION AND CLAIMS DIVISION SECURED COPIES OF MR. ROSS' LEAVE AND EARNINGS STATEMENTS FOR THE PAY PERIODS ENDING JULY 22 AND AUGUST 5, 1972. THUS, WHILE MR. ROSS MAY NOT HAVE RECEIVED A PAYROLL CHANGE SLIP, HE COULD HAVE VERIFIED HIS EARNINGS FROM LEAVE AND EARNINGS STATEMENTS. THE STATEMENT FOR THE PERIOD ENDING JULY 22 SHOWS BIWEEKLY GROSS PAY OF $692 (THE SAME AMOUNT AS SHOWN ON THE PAY RECORD FOR THE PRECEDING 6 PAY PERIODS) AND THAT FOR THE PERIOD ENDING AUGUST 5 SHOWED BIWEEKLY GROSS PAY OF $840.80. HOWEVER, MR. ROSS STATES THAT THE NET DIFFERENCE IN PAY AMOUNTS TO ONLY $21.53 PER PAY PERIOD. THE FACT THAT SUCH AMOUNT IS RELATIVELY SMALL IS IMMATERIAL SINCE, AS NOTED ABOVE, MR. ROSS RECEIVED NO PAY INCREASE DURING THE PERIOD IN QUESTION. MOREOVER, THERE WAS NO FACTOR, SUCH AS THE PERFORMANCE OF OVERTIME WORK, WHICH MIGHT HAVE CAUSED AN INCREASE IN MR. ROSS' PAY AT ANY TIME AFTER JULY 22. UNDER SUCH CIRCUMSTANCES, UPON RECEIPT OF HIS BIWEEKLY EARNINGS STATEMENTS IT WOULD SEEM REASONABLE FOR MR. ROSS TO HAVE INQUIRED ABOUT THE DISCREPANCY BETWEEN THE BIWEEKLY GROSS PAY OF $692 ON THE STATEMENTS THROUGH JULY 22 AND THE $840.80 BIWEEKLY GROSS PAY ON THE FOLLOWING STATEMENTS.

SUBSECTION 91.5(C) OF TITLE 4, CODE OF FEDERAL REGULATIONS (1974), PROVIDES THAT WAIVER OF CLAIMS FOR ERRONEOUS PAYMENT OF PAY AND ALLOWANCES MAY BE MADE PURSUANT TO 5 U.S.C. SEC. 5584 WHEN:

"(C) COLLECTION ACTION UNDER THE CLAIM WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE UNITED STATES. GENERALLY THESE CRITERIA WILL BE MET BY A FINDING THAT THE ERRONEOUS PAYMENT OF PAY OR ALLOWANCES OCCURRED THROUGH ADMINISTRATIVE ERROR AND THAT THERE IS NO INDICATION OF FRAUD, MISREPRESENTATION, FAULT OR LACK OF GOOD FAITH ON THE PART OF THE EMPLOYEE OR MEMBER OR ANY OTHER PERSON HAVING AN INTEREST IN OBTAINING A WAIVER OF THE CLAIM. 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. ***"

THUS, WHEN AN ERROR HAS BEEN MADE, WAIVER IS PRECLUDED WHERE THE EMPLOYEE COULD REASONABLY BE EXPECTED TO BE ON NOTICE THAT THE PAYMENT MAY HAVE BEEN MADE AND HAS NOT BROUGHT THE MATTER TO THE ATTENTION OF HIS ADMINISTRATIVE OFFICE. IN THIS CONNECTION WE STATED THE FOLLOWING IN B- 165663, JUNE 11, 1969:

"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 THE OVERPAYMENT BUT THOSE INDICATING WHETHER THE EMPLOYEE REASONABLY COULD HAVE BEEN EXPECTED TO HAVE BEEN AWARE THAT AN ERROR HAD BEEN MADE. IF IT IS ADMINISTRATIVELY DETERMINED THAT A REASONABLE MAN, UNDER THE CIRCUMSTANCES INVOLVED, 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."

THEREFORE, ALTHOUGH NOTHING IN THE RECORD SUGGESTS THE EXISTENCE OF FRAUD, MISREPRESENTATION, OR LACK OF GOOD FAITH ON THE PART OF MR. ROSS, THE RECORD BEFORE US TENDS TO SHOW THAT HE WAS NOT ENTIRELY WITHOUT FAULT IN FAILING TO CALL THE ATTENTION OF PROPER AUTHORITIES TO THE DISCREPANCIES IN THE STATEMENTS HE RECEIVED CONCERNING THE PAY TO WHICH HE WAS ENTITLED. B-180559, MARCH 11, 1974.

ACCORDINGLY, THE ACTION OF THE TRANSPORTATION AND CLAIMS DIVISION IN DENYING THE WAIVER IS SUSTAINED.