B-217241, APR 9, 1985

B-217241, APR 9, 1985

DEBT COLLECTIONS - WAIVER - MILITARY PERSONNEL - DUAL COMPENSATION DIGEST: 1. A RETIRED COAST GUARD OFFICER, EMPLOYED BY THE NATIONAL TRANSPORTATION SAFETY BOARD, RECEIVED FULL CIVILIAN PAY AND FULL RETIRED PAY CONTRARY TO THE DUAL COMPENSATION PROHIBITIONS IN 5 U.S.C/ SEC. 5532. ALTHOUGH HE HAD MADE HIS EMPLOYING AGENCY AND THE COAST GUARD AWARE OF HIS CIVILIAN EMPLOYMENT, HE KNEW OF THE DUAL COMPENSATION RESTRICTIONS AND HAD BEEN TOLD APPROXIMATELY HOW MUCH TO EXPECT FOR FULL RETIRED PAY. WHEN NO DEDUCTIONS WERE MADE AND HE RECEIVED APPROXIMATELY $900 PER MONTH IN EXCESS OF HIS ENTITLEMENT, HE SHOULD HAVE KNOWN HE WAS RECEIVING ERRONEOUS PAYMENTS. SINCE HE IS NOT WITHOUT "FAULT" IN THE MATTER, THE DEBT MAY NOT BE WAIVED. DEBT COLLECTIONS - WAIVER - MILITARY PERSONNEL - PAY, ETC. - FLIGHT PAY OVERPAYMENTS 2. A COAST GUARD OFFICER PARTICIPATED IN A FLIGHT PROGRAM AS A NON CREW MEMBER DURING WHICH HE WAS ELIGIBLE FOR FLIGHT PAY FOR MONTHS HE FLEW AT LEAST 4 HOURS. DURING THE FIRST YEAR IN THE PROGRAM HE FLEW SUFFICIENT HOURS TO QUALIFY FOR MONTHLY FLIGHT PAY. HOWEVER, DURING THE SUBSEQUENT 18 MONTHS HE CONTINUED TO RECEIVE FLIGHT PAY ALTHOUGH HE ONLY FLEW ENOUGH HOURS TO QUALIFY 1 MONTH, AND FLEW ONLY 1 HOUR DURING THE ENTIRE REMAINDER OF THE PERIOD. CLEARLY HE DID NOT QUALIFY FOR FLIGHT PAY DURING THESE MONTHS, AND HE SHOULD HAVE KNOWN HE WAS RECEIVING ERRONEOUS PAYMENTS. THEREFORE, WAIVER OF THE DEBT IS DENIED.

COMMANDER GEORGE W. CONRAD, USCG (RETIRED):

COMMANDER GEORGE W. CONRAD, USCG (RETIRED), REQUESTS RECONSIDERATION OF OUR CLAIMS GROUP'S APRIL 11, 1984 DENIAL OF HIS REQUEST FOR WAIVER OF HIS DEBT TO THE UNITED STATES IN THE TOTAL AMOUNT OF $19,058.85. THE DEBT RESULTED FROM ERRONEOUS PAYMENTS OF FLIGHT PAY HE RECEIVED WHILE ON ACTIVE DUTY AND THE COAST GUARD'S FAILURE TO REDUCE HIS RETIRED PAY, AS REQUIRED BY THE DUAL COMPENSATION STATUTE, WHEN HE TOOK CIVILIAN FEDERAL EMPLOYMENT AFTER RETIREMENT FROM THE COAST GUARD. WAIVER OF THE DEBT IS DENIED.

DUAL COMPENSATION

BACKGROUND

COMMANDER CONRAD RETIRED FROM THE UNITED STATES COAST GUARD ON FEBRUARY 28, 1980, WITH OVER 20 YEARS OF SERVICE. HE TOOK TERMINAL LEAVE AT THE END OF HIS PERIOD OF ACTIVE DUTY AND, WHILE ON SUCH LEAVE, BEGAN WORK IN A CIVILIAN POSITION AT THE NATIONAL TRANSPORTATION SAFETY BOARD ON JANUARY 7, 1980. /1/ HE WAS EMPLOYED AS A MARINE SAFETY SPECIALIST, GS-2101, GRADE 14, STEP 7, UNTIL AUGUST 1981. DUE TO ADMINISTRATIVE ERROR, DURING THE PERIOD FROM HIS RETIREMENT ON FEBRUARY 28, 1980, THROUGH AUGUST 1981, COMMANDER CONRAD RECEIVED FULL PAY FOR HIS CIVILIAN POSITION IN ADDITION TO HIS FULL RETIRED PAY IN CONTRAVENTION OF THE DUAL COMPENSATION STATUTE, 5 U.S.C. SEC. 5532.

SECTION 5532 OF TITLE 5 OF THE U.S.C. PROHIBITS A RETIRED MEMBER SUCH AS COMMANDER CONRAD FROM RECEIVING FULL RETIRED PAY IN ADDITION TO FULL CIVILIAN PAY FROM THE GOVERNMENT. /2/ WHEN THE COAST GUARD DISCOVERED THE ERROR, IT CALCULATED THE AMOUNT THAT SHOULD HAVE BEEN PAID TO COMMANDER CONRAD HAD THE CORRECT DEDUCTIONS BEEN MADE AND FOUND THAT HE HAD BEEN ERRONEOUSLY OVERPAID $17,188.85. /3/ AFTER INFORMING COMMANDER CONRAD OF THE OVERPAYMENT IN DECEMBER 1981, THE COAST GUARD BEGAN COLLECTION OF THE DEBT IN MARCH 1982 BY MONTHLY DEDUCTIONS FROM HIS RETIRED PAY.

COMMANDER CONRAD REQUESTED THAT THE COAST GUARD WAIVE THE DEBT, BUT THE WAIVER WAS DENIED. A REQUEST WAS THEN FORWARDED TO OUR CLAIMS GROUP WHICH ALSO DENIED WAIVER. COMMANDER CONRAD THEN REQUESTED RECONSIDERATION OF THE DENIAL.

THE RECORD SHOWS THAT COMMANDER CONRAD WAS GIVEN RETIREMENT INFORMATION WHEN HE RETIRED FROM THE COAST GUARD WHICH INCLUDED WARNINGS ABOUT DUAL COMPENSATION LAWS AND RESTRICTIONS. HE ADMITS THAT HE REMEMBERS SPECIFIC WARNINGS REGARDING DUAL COMPENSATION AND REMEMBERS FILLING OUT A FORM WHICH INDICATED HE INTENDED TO ACCEPT CIVILIAN FEDERAL EMPLOYMENT.

COMMANDER CONRAD EMPHASIZES THAT SINCE HE WAS AWARE OF THE DUAL COMPENSATION RESTRICTIONS, HE WANTED TO BE SURE TO MAKE THE APPROPRIATE NOTIFICATIONS AND DID NOTIFY BOTH THE COAST GUARD AND THE NATIONAL TRANSPORTATION SAFETY BOARD OF HIS STATUS. HE NOW ASSERTS THAT SINCE HE DID NOTIFY BOTH HIS CIVILIAN EMPLOYER AND THE COAST GUARD, AND THE FAILURE TO DEDUCT THE REQUIRED AMOUNTS FROM HIS RETIRED PAY WAS AN ADMINISTRATIVE ERROR BY THE COAST GUARD, HIS DEBT SHOULD BE WAIVED.

WAIVER - DUAL COMPENSATION

OUR AUTHORITY TO WAIVE COLLECTION OF CERTAIN DEBTS ARISING OUT OF ERRONEOUS PAYMENTS OF PAY OR ALLOWANCES MADE TO MEMBERS OF THE UNIFORMED SERVICES IS FOUND IN 10 U.S.C. SEC. 2774. UNDER THIS STATUTE WE MAY EXERCISE OUR WAIVER AUTHORITY WHEN COLLECTION WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTEREST OF THE UNITED STATES EXCEPT WHERE, IN OUR OPINION, THERE EXISTS IN CONNECTION WITH THE CLAIM AN INDICATION OF FRAUD, MISREPRESENTATION, FAULT OR LACK OF GOOD FAITH ON THE PART OF THE MEMBER.

WE HAVE INTERPRETED "FAULT" AS USED IN 10 U.S.C. SEC. 2774 AS INCLUDING SOMETHING MORE THAN A PROVEN OVERT ACT OR OMISSION BY THE MEMBER. THUS WE CONSIDER "FAULT" TO EXIST IF, IN LIGHT OF ALL THE FACTS, IT IS DETERMINED THAT THE MEMBER SHOULD HAVE KNOWN THAT AN ERROR EXISTED AND SHOULD HAVE TAKEN ACTION TO CORRECT IT. THE STANDARD WE APPLY IN MAKING THIS DETERMINATION IS WHETHER A REASONABLE PERSON SHOULD HAVE BEEN AWARE THAT HE WAS RECEIVING PAYMENT IN EXCESS OF HIS PROPER ENTITLEMENT. 4 C.F.R. SEC. 91.5(C) (1984).

WE FIND THAT A REASONABLE PERSON IN COMMANDER CONRAD'S SITUATION SHOULD HAVE KNOWN HE WAS BEING OVERPAID RETIRED PAY. AN OFFICER OF HIS RANK WITH OVER 20 YEARS OF SERVICE SHOULD HAVE BEEN WELL AWARE OF HIS APPROXIMATE RETIRED PAY ENTITLEMENT AND SHOULD HAVE EXPECTED A SUBSTANTIAL REDUCTION IN THAT PAY WHEN HE BEGAN CIVILIAN FEDERAL EMPLOYMENT. IN ADDITION, THE COAST GUARD ADVISED THIS OFFICE THAT AT RETIREMENT COMMANDER CONRAD WAS GIVEN AN ESTIMATE OF THE AMOUNT HE SHOULD EXPECT TO RECEIVE FOR FULL RETIRED PAY. COMMANDER CONRAD ADMITS THAT IN FACT HE RECEIVED EXACTLY THE AMOUNT ESTIMATED BY THE COAST GUARD. HE ALSO ADMITS KNOWLEDGE OF THE DUAL COMPENSATION RESTRICTIONS. THEREFORE, WHEN HE CONTINUED TO RECEIVE BOTH CIVILIAN PAY AND FULL RETIRED PAY, AVERAGING APPROXIMATELY $900 PER MONTH IN EXCESS OF HIS ENTITLEMENT, HE SHOULD HAVE KNOWN THERE WAS AN ERROR AND TAKEN ACTION TO CORRECT IT.

COMMANDER CONRAD ARGUES IN HIS REQUEST FOR RECONSIDERATION THAT THE COAST GUARD NEVER SENT HIM A NOTIFICATION THAT HE SHOULD HAVE BEEN RECEIVING A LESSER AMOUNT AND, THEREFORE, HE COULD NOT HAVE BEEN EXPECTED TO KNOW THAT HE WAS RECEIVING IN EXCESS OF HIS ENTITLEMENT. AS POINTED OUT ABOVE, HE WAS NOTIFIED AT RETIREMENT OF THE FULL AMOUNT HE COULD EXPECT TO RECEIVE IN RETIRED PAY EACH MONTH. WHEN HE CONTINUED TO RECEIVE THE ENTIRE AMOUNT, HE SHOULD HAVE KNOWN THE APPROPRIATE DEDUCTIONS WERE NOT BEING MADE. THE FACT THAT THE COAST GUARD ERRED IN NOT MAKING THE REQUIRED DEDUCTIONS AND DID NOT NOTIFY HIM EARLIER DOES NOT PROVIDE A BASIS ON WHICH HE MAY ALLOW WAIVER OF THE OVERPAYMENT.

SINCE COMMANDER CONRAD IS NOT WITHOUT "FAULT" IN THE MATTER OF THE OVERPAYMENT, THIS DEBT MAY NOT BE WAIVED. ACCORDINGLY, OUR CLAIMS GROUP'S ACTION IN DENYING WAIVER FOR THIS PORTION OF THE DEBT IS SUSTAINED.

INCENTIVE (FLIGHT) PAY

BACKGROUND

DURING HIS SERVICE IN THE COAST GUARD, WHILE ASSIGNED TO DUTY AS COMMANDING OFFICER, MARINE SAFETY OFFICE, NASHVILLE, TENNESSEE, COMMANDER CONRAD WAS ISSUED ORDERS PLACING HIM IN A FLIGHT PROGRAM AS A DESIGNATED TECHNICAL OBSERVER BEGINNING IN SEPTEMBER 1977. THE COAST GUARD CONTRACTED WITH A PRIVATE COMPANY TO SUPPLY A HELICOPTER TO FLY COAST GUARD PERSONNEL CONDUCTING AERIAL SURVEILLANCE FOR MARINE SAFETY AND POLLUTION CONTROL PURPOSES. WHILE TRAVELING IN THE HELICOPTER COMMANDER CONRAD, WHO WAS NOT A PILOT OR CREW MEMBER, PARTICIPATED AS A TECHNICAL OBSERVER. HE RECEIVED INCENTIVE ("FLIGHT") PAY OF $110 PER MONTH FROM SEPTEMBER 1977 THROUGH FEBRUARY 1980, WHEN HE RETIRED, FOR THIS DUTY. APPEARS THAT AN EXAMINATION OF HIS PAY RECORDS BY THE COAST GUARD IN FEBRUARY 1981 INDICATED THAT COMMANDER CONRAD HAD BEEN OVERPAID FLIGHT PAY. IN MARCH 1983, THE COAST GUARD INFORMED HIM THAT HE HAD RECEIVED FLIGHT PAY FOR 20 MONTHS OF THIS PERIOD DURING WHICH HE HAD BEEN INELIGIBLE TO RECEIVE IT. THE TOTAL FOR THE ERRONEOUS PAYMENTS FOR FLIGHT PAY WAS $2,200. IN JANUARY 1984 THE COAST GUARD NOTIFIED COMMANDER CONRAD THAT IT HAD AUDITED ITS AIRCRAFT USE REPORTS AND FOUND THAT HE HAD BEEN ELIGIBLE FOR 3 OF THE 20 MONTHS AND THE DEBT WAS REDUCED TO $1,870. THE REMAINING DEBT WAS FOR ERRONEOUS PAYMENTS THAT HAD BEEN MADE FROM SEPTEMBER 1978 THROUGH FEBRUARY 1980, EXCEPT FOR THE MONTH OF DECEMBER 1978 DURING WHICH HE WAS ELIGIBLE. IN MAY 1984, THE COAST GUARD BEGAN ADDITIONAL MONTHLY DEDUCTIONS FROM COMMANDER CONRAD'S RETIRED PAY TO COLLECT THIS DEBT.

THE AUTHORITY FOR FLIGHT PAY IS FOUND AT 37 U.S.C. SEC. 301(A) AND (C), AND PART I OF EXECUTIVE ORDER 11157, AS AMENDED, 37 U.S.C. SEC. 301, NOTE. THIS INCLUDES AUTHORIZATION OF INCENTIVE PAY FOR "FREQUENT AND REGULAR PARTICIPATION IN AERIAL FLIGHT, NOT AS A CREW MEMBER." 37 U.S.C. SEC. 301(A)(2). IMPLEMENTING REGULATIONS APPLICABLE TO COAST GUARD MEMBERS ARE FOUND IN THE COAST GUARD COMPTROLLER MANUAL, VOLUME II, CHAPTER 6, SECTION B.

UNDER THE LAW AND REGULATIONS, THERE ARE TWO BASIC REQUIREMENTS A NON- CREW MEMBER MUST MEET TO BE ENTITLED TO FLIGHT PAY. HE MUST HAVE COMPETENT ORDERS REQUIRING HIM TO PARTICIPATE IN AERIAL FLIGHTS AND HE MUST FLY THE REQUIRED NUMBER OF HOURS. THERE IS NO QUESTION IN THIS CASE THAT COMMANDER CONRAD HAD THE COMPETENT ORDERS. HIS PROBLEM IS WITH THE HOURS OF FLYING REQUIREMENT.

BRIEFLY, AN INDIVIDUAL WHO PARTICIPATES AS AN OBSERVER RATHER THAN A CREW MEMBER IS REQUIRED TO FLY FOR 4 HOURS PER CALENDAR MONTH TO QUALIFY FOR FLIGHT PAY FOR THAT MONTH. EXTRA HOURS EARNED MAY BE "CARRIED OVER" AND USED FOR CREDIT IN FOLLOWING MONTHS FOR UP TO 5 MONTHS AFTER THEY ARE EARNED. IN ADDITION, IF ONE DOES NOT FLY DURING THE MONTH AND DID NOT CARRY OVER HOURS TO MAKE HIM ELIGIBLE, A "GRACE PERIOD" WILL ALLOW HIM TO QUALIFY WITHIN 3 MONTHS BY FLYING ENOUGH HOURS (UP TO 12 HOURS) TO COVER THE 4-HOUR REQUIREMENT FOR EACH OF THE 3 MONTHS.

THE COAST GUARD BASED ITS DETERMINATION OF COMMANDER CONRAD'S ENTITLEMENTS AND INDEBTEDNESS ON AIRCRAFT USE REPORTS WHICH APPLIED TO COMMANDER CONRAD'S UNIT. THE REPORTS ARE DATED AND IDENTIFY MEMBERS ABOARD DURING THE FLIGHT AND THE LENGTH OF THE FLIGHT. THE COAST GUARD PROVIDED US WITH A SUMMARY SHEET CONTAINING THIS INFORMATION AND INDICATING WHETHER COMMANDER CONRAD WAS ELIGIBLE OR INELIGIBLE FOR FLIGHT PAY EACH MONTH. THE SUMMARY ALSO SHOWS HOURS CARRIED OVER AND INDICATES THE BEGINNING AND ENDING OF APPROPRIATE GRACE PERIODS.

COMMANDER CONRAD ADMITS INELIGIBILITY FOR THE PERIOD OF TIME AFTER DECEMBER 1979, SINCE HE WAS THEN ON TERMINAL LEAVE PENDING RETIREMENT, BUT HE DENIES HE WAS INELIGIBLE FOR ANY OTHER PERIOD. WHILE HE IS UNABLE TO PROVIDE EVIDENCE OF ELIGIBILITY, HE ASSERTS HIS BELIEF THAT HE WAS ELIGIBLE FOR THE INCENTIVE PAY DURING THE PERIOD WHEN HE RECEIVED IT AND GOES INTO GREAT DETAIL ABOUT THE NUMEROUS HOURS SPENT DISCUSSING THE PROGRAM AND ELIGIBILITY REQUIREMENTS AND THE GREAT CARE THAT HAD BEEN TAKEN TO ENSURE ELIGIBILITY OF THOSE FLYING AS OBSERVERS. HE STATES THAT THE TECHNICAL OBSERVER PROGRAM WAS NEW, THAT HE HAD NO EXPERIENCE WITH ELIGIBILITY FOR FLIGHT PAY AND THAT HE WAS UNABLE TO OBTAIN A COPY OF THE APPLICABLE REGULATIONS. THEREFORE HE ASSERTS THAT HE COULD NOT HAVE BEEN EXPECTED TO KNOW WHEN HE WAS NOT ELIGIBLE FOR FLIGHT PAY.

WAIVER - FLIGHT PAY

THE SUMMARY SHEET THE COAST GUARD PROVIDED SHOWS THAT DURING 1977 AND 1978 COMMANDER CONRAD MADE A NUMBER OF FLIGHTS. DURING SOME MONTHS IN THIS PERIOD HE HAD IN EXCESS OF THE NUMBER OF HOURS NEEDED TO QUALIFY FOR FLIGHT PAY, AND HE RETAINED HIS ELIGIBILITY FOR FLIGHT PAY THROUGH AUGUST 1978. HOWEVER, FROM SEPTEMBER THROUGH NOVEMBER 1978 HE DID NOT FLY AT ALL, AND HE LOST HIS ELIGIBILITY UNTIL DECEMBER 1978 WHEN HE FLEW 6.2 HOURS GAINING ELIGIBILITY FOR THAT MONTH. DURING THE YEAR 1979 HE FLEW ONLY 1 HOUR, IN MAY, AND HE DID NOT FLY AT ALL IN 1980.

THUS, IN SUMMARY, DURING THE ENTIRE 18-MONTH PERIOD FROM SEPTEMBER 1978 THROUGH FEBRUARY 1980, COMMANDER CONRAD FLEW ONLY 7.2 HOURS. EXCEPT FOR DECEMBER 1978 WHEN HE FLEW 6.2 HOURS, HE WAS INELIGIBLE FOR FLIGHT PAY DURING THIS PERIOD. WHILE THERE MAY HAVE BEEN SOME CONFUSION WHEN THE PROGRAM WAS BEGUN AT COMMANDER CONRAD'S STATION, BY SEPTEMBER 1978 IT HAD BEEN IN OPERATION FOR A YEAR. IN THESE CIRCUMSTANCES WE ARE UNABLE TO UNDERSTAND HOW AN OFFICER OF HIS RANK AND EXPERIENCE, AND HOLDING A RESPONSIBLE POSITION, COULD HAVE CONSIDERED HIMSELF ENTITLED TO FLIGHT PAY. THEREFORE, WE CANNOT FIND THAT HE WAS WITHOUT FAULT IN CONTINUING TO ACCEPT THIS PAY UNDER THESE CIRCUMSTANCES.

ACCORDINGLY, THE DENIAL OF WAIVER BY OUR CLAIMS GROUP OF THE ERRONEOUS FLIGHT PAY IS SUSTAINED.

/1/ A MEMBER OF THE UNIFORMED SERVICES MAY ACCEPT A FEDERAL CIVILIAN POSITION WHILE ON TERMINAL LEAVE PENDING SEPARATION FROM ACTIVE DUTY AND MAY RECEIVE BOTH THE PAY OF THE CIVILIAN POSITION AND PAY AND ALLOWANCES FROM THE UNIFORMED SERVICE FOR THE UNEXPIRED PORTION OF THE TERMINAL LEAVE. 5 U.S.C. SEC. 5534A (1982).

/2/ UNDER 5 U.S.C. SEC. 5532(B), WHEN A RETIRED REGULAR OFFICER SUCH AS COMMANDER CONRAD IS EMPLOYED IN A CIVILIAN POSITION, HIS RETIRED PAY IS TO BE REDUCED TO AN ANNUAL RATE EQUAL TO THE FIRST $2,000 (AS INCREASED UNDER 10 U.S.C. SEC. 1401AB)) OF RETIRED PAY, PLUS ONE-HALF THE REMAINDER. ADDITION TO THIS REDUCTION, 5 U.S.C. SEC. 5532(C) PROHIBITS RECEIPT OF COMBINED CIVILIAN PAY AND RETIRED PAY IN EXCESS OF THE RATE OF BASIC PAY THEN CURRENTLY PAID FOR LEVEL V OF THE EXECUTIVE SCHEDULE.

/3/ CALCULATING COMMANDER CONRAD'S PAY UNDER THE PROVISIONS OF 5 U.S.C. SEC. 5532, THE COAST GUARD FOUND THAT UNDER SECTION 5532(B) HE WAS ERRONEOUSLY OVERPAID $8,962.22. IN ADDITION, AFTER THE DEDUCTIONS UNDER SECTION 5532(B) HAD BEEN MADE, COMMANDER CONRAD RECEIVED $8,226.63 IN EXCESS OF THE BASIC RATE OF PAY THEN CURRENTLY PAID FOR LEVEL V OF THE EXECUTIVE SCHEDULE IN VIOLATION OF SECTION 5532(C).