B-241226, May 14, 1991

B-241226, May 14, 1991

MILITARY PERSONNEL - Pay - Retirement pay - Overpayments - Debt collection - Waiver DIGEST: Retired member of the Air Force began receiving retired pay and accepted a civilian position. When the expected deductions to his retired pay did not occur, he contacted the appropriate officials, however, deductions were never made. Since the member knew he was being overpaid, and did not take appropriate action, he is not without fault and the overpayments should not be waived. Admiral James D. Watkins, USN, (Retired), B-234401, June 24, 1989 is not applicable in this case and provides no basis for waiver.

Colonel Samuel L. Anzalone, USAF (Retired):

This action is in response to a request for reconsideration from Colonel Samuel L. Anzalone, USAF, Retired, of our Claims Group's July 13, 1990, denial of his request for waiver of erroneous payments of retired pay. is our view that waiver is not appropriate for the reasons set forth below.

Colonel Anzalone, a retired regular officer of the Air Force, retired on December 1, 1987 and began receiving retired pay. He accepted civilian employment on January 31, 1988, with the National Aeronautics and Space Administration. As a result he became subject to the dual compensation restrictions (5 U.S.C. Sec. 5532). Those restrictions require a reduction in retired pay in accordance with a formula set forth in the statute. Additionally, the law requires a further reduction when the combined compensation of the civilian position and the reduced retired pay exceeds Level V of the Executive Schedule in a pay period. Due to administrative error, Colonel Anzalone's pay was not reduced and he was overpaid a total of $45,466.79.

The record before us shows that Colonel Anzalone knew that his retired pay was subject to dual compensation restrictions and that he knew his retired pay was to be significantly reduced upon his acceptance of a civilian position. In his application for waiver he acknowledges that he was aware of receiving erroneous payments. He states that he did make a phone call to the finance center and was told that the matter would be taken care of and his retired pay adjusted, but is unclear as to when the call was made and to whom he spoke. Apparently, no other effort was made to have the matter corrected.

Colonel Anzalone also states that he only received one earnings statement and that since his retired pay was deposited into his wife's checking account, he did not closely monitor the amount he was being paid.

Under the provisions of 10 U.S.C. Sec. 2774, the Comptroller General may waive collection of certain debts where collection would be against equity and good conscience and not in the best interest of the United States, if there is no indication of fraud, misrepresentation, fault or lack of good faith on the part of the claimant. This Office has long interpreted "fault" as used in the statute as including something more than a proven overt act or omission by the member. Thus we consider "fault" to exist if in the light of all the facts it is determined that the debtor should have known or suspected an error existed and taken action to have it corrected. The standard we employ is to determine whether a reasonable person should have been aware that he was receiving a payment in excess of his proper entitlement. In that regard we note that the standard used in determining whether a member is free from "fault" is whether the member reasonably could have expected to have been aware that an error had been made.

It is our view that a reasonable man under these circumstances would have continued to monitor his retired pay since he was aware of the overpayment. It was incumbent upon Colonel Anzalone to obtain earnings statements and to monitor the amount he was receiving and verify that the proper amount was being paid, even if he arranged to have that amount deposited directly to his wife.

Since Colonel Anzalone did not take the appropriate action to ensure that the deductions he had been warned to expect did not come about, it is our view that he is not without "fault" in the matter, and thus waiver may not be granted.

Colonel Anzalone argues he should be granted a waiver for the same reason waiver was granted in Admiral James D. Watkins, USN (Retired), B-234401, June 23, 1989. We do not agree. In that case the record established that Admiral Watkins reasonably assumed he was not being overpaid. In the case currently before us, Colonel Anzalone knew that his retired pay should be reduced. Since he knew that he was being overpaid he should have taken further action to have the matter corrected. The Claims Group's denial of the waiver is sustained.