Request for Waiver of Indebtedness

A Naval Petty Officer appealed a Claims Division action which granted in part and denied in part his request for waiver of a claim against him for erroneous overpayments of pay. He appealed that part of the action which denied him waiver. The debt arose when the officer was assigned Government quarters, but his basic allowance for quarters (BAQ) was not terminated until a month later. As a result, he erroneously received BAQ for that period. Also, the officer increased his allotment to his credit union and, due to an administrative error, the allotment was not deducted from his pay for 10 months. The officer's debt further increased when a disbursing error was made in calculating his pay. The determination of whether the debts resulting from the erroneous BAQ payment and failure to deduct the credit union allotment payments turned on whether the member was at fault in those matters. GAO interprets fault as including something more than a proven overt act of omission. Fault is considered to exist if, in the light of all known facts, it is determined that the individual should have known that an error existed and taken action to have it corrected. Substantial and inexplicable changes in pay, or the lack of such changes when they would ordinarily be expected, constitute sufficient notice to alert a reasonable person that an error may have been made. GAO could understand why the member did not realize that he was overpaid BAQ. Accordingly, this erroneous payment was waived. Although the member did not receive his leave and earnings statement during the period in question, he should have expected that his net paychecks, after establishment of the increased allotment for the credit union, would not exceed those received in the month preceding this event. In those circumstances, he had a duty to retain the excess amounts paid him in order to refund the Government when his pay was finally resolved. The action taken by the Claims Division denying waiver was sustained.