B-198769, AUG 15, 1980

B-198769, AUG 15, 1980

DIGEST: CLAIMS DIVISION DENIAL OF WAIVER UNDER 5 U.S.C. SEC. 5584 IS SUSTAINED WHERE EMPLOYEE WHO LEFT POSITION WITH ONE AGENCY TO ACCEPT POSITION WITH ANOTHER AGENCY RECEIVED ADDITIONAL ERRONEOUS OVERPAYMENT FROM FORMER AGENCY. WAIVER IS INAPPROPRIATE SINCE EMPLOYEE WAS NOT FREE FROM FAULT IN ACCEPTING ERRONEOUS OVERPAYMENT AND NOT INQUIRING AS TO ITS CORRECTNESS. SUCH A FINDING OF FAULT PRECLUDES THE DETERMINATION THAT COLLECTION OF THE ERRONEOUS OVERPAYMENT WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE UNITED STATES.

F. KEITH PORTER - WAIVER OF ERRONEOUS OVERPAYMENT OF PAY:

MR. F. KEITH PORTER HAS APPEALED THE ADJUDICATION OF OUR CLAIMS DIVISION DATED NOVEMBER 26, 1979, DENYING HIS REQUEST FOR WAIVER OF AN ERRONEOUS OVERPAYMENT OF PAY UNDER 5 U.S.C. SEC. 5584. FOR THE REASONS WHICH FOLLOW WE ARE SUSTAINING THE ACTION OF OUR CLAIMS DIVISION IN MR. PORTER'S CASE.

BRIEFLY, MR. PORTER WAS ERRONEOUSLY PAID $795.20 FOR THE PERIOD FROM JULY 18, 1976, THROUGH JULY 31, 1976, DUE TO THE SUBMISSION OF AN ERRONEOUSLY PREPARED TIME AND ATTENDANCE CARD. MR. PORTER TRANSFERRED FROM A POSITION AS A CIVILIAN EMPLOYEE OF THE DEPARTMENT OF THE ARMY TO THE FEDERAL AVIATION ADMINISTRATION ON JULY 18, 1976, AND SUBSEQUENTLY RECEIVED PAY THROUGH JULY 31, 1976, FROM BOTH GOVERNMENT AGENCIES. IN BOTH INSTANCES THESE PAYMENTS WERE FORWARDED TO MR. PORTER'S BANK FOR CREDIT TO HIS ACCOUNT AND WERE RECORDED BY HIS WIFE WHO CONSIDERED THE DEPOSITS NORMAL.

THE ARMY FINANCE AND ACCOUNTING CENTER RECOMMENDED DENIAL OF MR. PORTER'S REQUEST FOR WAIVER OF THE OVERPAYMENT UNDER 5 U.S.C. SEC. 5584 BECAUSE A LEAVE AND EARNINGS STATEMENT FOR THE PAY PERIOD COVERED WAS SENT TO HIM, AND IN ADDITION HE RECEIVED A BANK STATEMENT. THUS, HIS FAILURE TO NOTICE AND REPORT ANY ERROR PLACED HIM PARTIALLY AT FAULT IN THE MATTER. INDICATED, OUR CLAIMS DIVISION CONCURRED IN THIS RECOMMENDATION AND DENIED MR. PORTER'S WAIVER REQUEST ON NOVEMBER 26, 1979.

MR. PORTER'S APPEAL EMPHASIZES THAT THE OVERPAYMENT OF PAY RESULTED FROM ADMINISTRATIVE ERROR ON THE PART OF RESPONSIBLE ARMY OFFICIALS. MR. PORTER FURTHER STATES IN PART AS FOLLOWS:

"SINCE I HAD RECEIVED PAYROLL CHECKS FOR 20 YEARS AND SEPARATED FROM SIX DIFFERENT COMPANIES WITHOUT A PAYROLL ERROR, I DID NOT EXPECT AN ERRONEOUS PAYMENT. I HAD TURNED IN THE CORRECT TIME AND LEFT THE PAY RESPONSIBILITY TO THE PAYROLL STAFF; HOWEVER, WHEN I PREPARED MY INCOME TAX STATEMENT AND REVIEWED MY PAY STATEMENTS, I FOUND CHECK STUBS FROM THE ARMY AND FAA FOR THE SAME PAY PERIOD AND CALLED YOUR OFFICE FOR AN EXPLANATION. ***"

IN VIEW OF THE REASONING STATED IN HIS APPEAL, MR. PORTER CONTINUES TO FEEL THAT THE OVERPAYMENT IN THE AMOUNT OF $795.20 SHOULD BE WAIVED UNDER 5 U.S.C. SEC. 5584.

THE AUTHORITY FOR THE WAIVER OF CLAIMS ARISING OUT OF ERRONEOUS PAYMENTS OF PAY OR ALLOWANCES IS CONTAINED IN SECTION 5584 OF TITLE 5, U.S.C. AND THAT SECTION PROVIDES THAT WHERE COLLECTION OF SUCH A CLAIM WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTEREST OF THE UNITED STATES, IT MAY BE WAIVED BY THE COMPTROLLER GENERAL OF THE UNITED STATES UNLESS:

"*** IN HIS OPINION, THERE EXISTS, IN CONNECTION WITH THE CLAIM, AN INDICATION OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON THE PART OF THE EMPLOYEE OR ANY OTHER PERSON HAVING AN INTEREST IN OBTAINING A WAIVER OF THE CLAIM ***."

OUR REGULATIONS IMPLEMENTING THAT STATUTORY PROVISION, CONTAINED IN PART 91, TITLE 4, CODE OF FEDERAL REGULATIONS (1978), PROVIDE, IN PART, FOR WAIVER OF AN ERRONEOUS PAYMENT WHENEVER:

"(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. WAIVER OF OVERPAYMENTS OF PAY AND ALLOWANCES UNDER THIS STANDARD NECESSARILY MUST DEPEND UPON THE FACTS EXISTING IN THE PARTICULAR CASE ***." 4 C.F.R. SEC. 91.5 (1978).

THE CONDITIONS SET FORTH IN 4 C.F.R. 91.5 IMPOSE ON THE EMPLOYEE AN "AFFIRMATIVE OBLIGATION" TO BRING TO THE ATTENTION OF THE PROPER OFFICIALS ANY SIGNIFICANT UNEXPLAINED INCREASE IN PAY. B-171891, MARCH 23, 1971. WHERE AN EMPLOYEE WAS AWARE OR SHOULD HAVE BEEN AWARE OF AN ERROR IN PAY RESULTING IN AN OVERPAYMENT, HE CANNOT REASONABLY EXPECT TO RETAIN SUCH A PAYMENT, BUT SHOULD EXPECT THE GOVERNMENT TO SEEK RECOVERY. B-165908, MARCH 14, 1969. IN REGARD TO CIRCUMSTANCES IN WHICH AN EMPLOYEE SHOULD HAVE BEEN AWARE OF AN ERROR, WE HAVE STATED THAT WHERE AN EMPLOYEE HAS NECESSARY RECORDS WHICH, IF REVIEWED, WOULD INDICATE OVERPAYMENT, AND THE EMPLOYEE FAILS TO REVIEW SUCH DOCUMENTS FOR ACCURACY OR OTHERWISE FAILS TO TAKE CORRECTIVE ACTION, HE IS NOT WITHOUT FAULT AND WAIVER WILL BE DENIED. ARTHUR WEINER, B-184480, MAY 20, 1976. FURTHERMORE, THIS "AFFIRMATIVE OBLIGATION" IS NOT DISCHARGED BY MERE INQUIRY AT A SUBSEQUENT DATE. WE HAVE STATED THAT, GENERALLY, WHEN AN EMPLOYEE IS COGNIZANT OF AN ERROR WHICH RESULTS IN AN OVERPAYMENT TO HIM, EVEN THOUGH HE MAY INFORM HIS EMPLOYING AGENCY OF THE ERROR, IN THE ABSENCE OF OFFICIAL NOTICE THAT THE PAYMENTS WERE NOT IN ERROR, HE CANNOT REASONABLY EXPECT TO RETAIN EXCESS PAYMENTS WITHOUT BEING OBLIGATED TO MAKE A REFUND THEREOF WHEN THE ERROR IS CORRECTED. SEE B-171944, MARCH 23, 1971; AND B-172117, MAY 12, 1971.

UPON A THOROUGH REVIEW OF THE RECORD IN MR. PORTER'S CASE WE CONCUR WITH THE FINDINGS OF BOTH THE ARMY FINANCE CENTER AND OUR CLAIMS DIVISION THAT MR. PORTER - AS A REASONABLE AND PRUDENT EMPLOYEE WHO HAD BEEN RECEIVING PAYROLL CHECKS AND STATEMENTS FOR 20 YEARS - SHOULD HAVE BEEN AWARE OF AND QUESTIONED THE CORRECTNESS OF HIS RECEIVING SALARY PAYMENTS FOR THE SAME PERIOD FROM TWO DIFFERENT AGENCIES. WHEN MR. PORTER RECEIVED AN UNUSUALLY LARGE COMBINED DEPOSIT IN HIS BANK ACCOUNT, AND WHEN HE RECEIVED HIS LEAVE AND EARNINGS STATEMENT COVERING THE PERIOD IN QUESTION, HE SHOULD HAVE QUESTIONED THE APPARENT OVERPAYMENT BY NOTIFYING APPROPRIATE OFFICIALS. HIS FAILURE TO DO SO, WHILE NOT FRAUDULENT OR CULPABLE, DOES HOWEVER PLACE HIM AT LEAST PARTIALLY AT FAULT IN THE MATTER; AND, SUCH A FINDING OF FAULT PRECLUDES THE DETERMINATION THAT COLLECTION OF THE ERRONEOUS OVERPAYMENT WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE UNITED STATES. CHARLES B. SHORTER, B-186092, SEPTEMBER 27, 1976.

ACCORDINGLY, THE ACTION OF OUR CLAIMS DIVISION IN DENYING WAIVER OF THE OVERPAYMENT IS SUSTAINED.