B-183558, APR 23, 1975

B-183558, APR 23, 1975

WHERE EMPLOYEE HAS KNOWLEDGE OF OVERPAYMENT OF PAY BUT DOES NOT SET ASIDE AMOUNT OF OVERPAYMENT IN ANTICIPATION OF REFUNDING IT TO THE UNITED STATES, EMPLOYEE IS GUILTY OF "LACK OF GOOD FAITH" AND WAIVER IS PRECLUDED BY LAW. 5 U.S.C. SEC. 5584(B)(1) (1970).

GILBERT G. QUINTERO - REQUEST OF WAIVER FOR OVERPAYMENT OF PAY:

THIS DECISION IS IN RESPONSE TO A REQUEST FOR APPEAL OF A DECISION BY OUR TRANSPORTATION AND CLAIMS DIVISION TO DENY WAIVER OF A CLAIM BY THE UNITED STATES AGAINST MR. GILBERT G. QUINTERO FOR OVERPAYMENT OF PAY.

MR. QUINTERO REQUESTED AND, EFFECTIVE APRIL 2, 1972, WAS CHANGED FROM WG- 9, STEP 3, $4.22 PER HOUR, TO WG-7, STEP 3, $3.82 PER HOUR. THE PAPERWORK EFFECTING THIS CHANGE WAS NOT RECEIVED BY THE APPROPRIATE PAYROLL PEOPLE AND MR. QUINTERO CONTINUED TO RECEIVE HIS FORMER PAY. AS NOTED THROUGHOUT THE RECORD, MR. QUINTERO IMMEDIATELY NOTICED THIS ADMINISTRATIVE ERROR AND REPORTED IT TO THE APPROPRIATE AUTHORITIES. DESPITE MR. QUINTERO'S TIMELY NOTICE, NO CHANGE WAS MADE IN HIS PAY UNTIL THE ERROR WAS NOTICED IN DECEMBER 1972, AT WHICH TIME HIS PAY WAS AMENDED TO REFLECT HIS NEW ENTITLEMENT. BY LETTER DATED FEBRUARY 16, 1973, MR. QUINTERO WAS NOTIFIED THAT HE HAD BEEN OVERPAID $643.40 AND HE WOULD HAVE TO PAY THAT AMOUNT BACK. MR. QUINTERO APPEALED THAT DECISION AND ULTIMATELY OUR OFFICE WAS ASKED BY THE DEPARTMENT OF THE AIR FORCE TO RULE ON THE REQUEST FOR WAIVER UNDER THE PROVISIONS OF SECTION 5584 OF TITLE 5, U.S.C. (1970). THE DECISION BY OUR TRANSPORTATION AND CLAIMS DIVISION, DW-Z-313735-DGD-3, OCTOBER 10, 1974, TO DENY THE REQUEST FOR WAIVER HAS BEEN APPEALED AND IS BEFORE US FOR RECONSIDERATION.

THE AUTHORITY FOR THE COMPTROLLER GENERAL OR THE HEAD OF AN AGENCY TO WAIVE CLAIMS OF THE UNITED STATES FOR OVERPAYMENT OF PAY WAS ADDED TO TITLE 5 OF THE U.S.C. BY PUBLIC LAW 90-616. U.S.C. SEC. 5584 (1970). WHILE THE AUTHORITY TO WAIVE IS BROAD, THE LAW ALSO PROVIDES THAT IT MAY NOT BE EXERCISED TO WAIVE ANY CLAIM IF THERE EXISTS AN INDICATION OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON THE PART OF THE PERSON REQUESTING WAIVER OF THE CLAIM. 5 U.S.C. SEC. 5584(B)(1) (1970).

WHEN HEARINGS WERE HELD IN THE CONGRESS CONCERNING THE BILL WHICH EVENTUALLY WAS ENACTED AS PUBLIC LAW 90-616 AND A SIMILAR BILL (S. 4120, 90TH CONG., 2D SESS. (1968); H.R. 17954, 90TH CONG., 2D SESS. (1968)), COMMENTS WERE SOLICITED FROM MANY SOURCES. ONE COMMENT IS SPECIFICALLY APPLICABLE TO THE SUBJECT OF "GOOD FAITH" AND APPEARS IN THE REPORT FROM THE COMMITTEE ON POST OFFICE AND CIVIL SERVICE. H.R. REP. NO. 1863, 90TH CONG., 2D SESS. 10 (1968).

"WE NOTE THAT THE BILL APPLIES TO OVERPAYMENTS AS A RESULT OF ADMINISTRATIVE ERROR AND WITHOUT FAULT ON THE PART OF THE EMPLOYEE. HOWEVER, IT DOES NOT EXPLICITLY REQUIRE 'GOOD FAITH' ON THE PART OF THE EMPLOYEE, A TEST WHICH WE HAVE NORMALLY APPLIED IN OVERPAYMENT CASES. ALTHOUGH THE TERM IN THE BILL 'WITHOUT FAULT' COULD BE CONSTRUED TO INCLUDE GOOD FAITH, IT COULD ALSO BE INTERPRETED TO APPLY ONLY TO THE RESPONSIBILITY FOR MAKING THE ERROR. WE THINK THAT AN EMPLOYEE WHO KNOWINGLY ACCEPTED ERRONEOUS PAYMENTS SHOULD NOT BE RELIEVED OF LIABILITY. THEREFORE, WE SUGGEST THAT THE COMMITTEE CONSIDER AMENDING THE BILL BY SPECIFICALLY REQUIRING THAT RELIEF IN OVERPAYMENTS CASES BE CONTINGENT UPON GOOD FAITH."

AS CAN BE SEEN, THIS AND OTHER SIMILAR SUGGESTIONS WERE ADOPTED. H.R. REP. NO. 1863, 90TH CONG., 2D SESS. 11 (1968).

WE HAVE CONSISTENTLY HELD THAT WHERE THE EMPLOYEE WAS AWARE OF THE OVERPAYMENT, WHEN IT OCCURRED A REQUEST FOR WAIVER WILL BE DENIED. SEE B- 175052, MARCH 10, 1972. AS A REASONABLE AND PRUDENT PERSON WHO KNOWS THAT HE IS BEING OVERPAID, MR. QUINTERO SHOULD HAVE SET ASIDE THE AMOUNT OF OVERPAYMENT FOR EVENTUAL REFUNDING. INSTEAD, HE USED THE FUNDS FOR HIS OWN PURPOSES, EVEN THOUGH HE KNEW THEY BELONGED TO THE UNITED STATES. ALTHOUGH HE DESERVES CREDIT FOR HIS REPEATED EFFORTS TO HAVE THE ERROR CORRECTED, THIS FACT ALONE DOES NOT ENTITLE HIM TO ENJOY AN UNEARNED WINDFALL AT HIS COUNTRY'S EXPENSE. THIS FAILURE TO SET ASIDE THE FUNDS WHICH HE KNEW WERE NOT HIS REPRESENTS A LACK OF GOOD FAITH AND PRECLUDES THE COMPTROLLER GENERAL FROM EXERCISING HIS AUTHORITY TO WAIVE.

THE DECISION BY THE TRANSPORTATION AND CLAIMS DIVISION MENTIONS "FAULT" AT SEVERAL PLACES. INSTEAD OF THE WORD "FAULT," THE PHRASE "LACK OF GOOD FAITH" SHOULD HAVE BEEN USED. OTHERWISE, THAT DECISION IS AFFIRMED AND THE APPEAL OF THE REQUEST FOR WAIVER IS DENIED.