Heads of operating units may waive in whole or in part collection of a claim for overpayment of pay and allowances to their employees. This authority may be further delegated to appointing officers consistent with DAO 202-250 provided the individual is superior in rank or organizational status to any official who approved the erroneous payment.
"Pay" means but is not limited to basic pay, premium pay; pay for training, incentive awards, retirement pay, severance pay, lump sum leave settlements, locality-comparability pay, paid benefits, e.g., hospitalization, life insurance, and leave. When used with reference to NOAA Corps members, it also means longevity pay, special and incentive pays, and mustering out pay.
"Allowances" means but is not limited to subsistence, quarters, uniforms, and overseas allowances.
"Employee" means an individual as defined in 5 U.S.C. 2105 who is or was employed by the Department, including Foreign Service and NOAA Corps members.
"Aggregate" means the gross amount of the claim against the individual from whom collection is being sought.
Conditions for Consideration of Waiver Requests
In order for a waiver of overpayment to be considered at any level, it must be timely received, there must be no indication of technical fault on the part of the employee or anyone else with an interest in the waiver, and collection must not be against equity or good conscience.
Necessity for a Bill
Individual waiver request. An individual may not request a waiver until the government has made its claim. An employee who discovers an erroneous payment or who is told to expect a bill must be billed before asking for a waiver.
Group waiver authority. Absent a conflict of interest, the head of an operating unit may waive collection of a group overpayment when the individual amounts are not substantial, the cost of recovery would exceed the amount of collection, and the overpayments would be eligible for waiver on an individual basis. In this instance, the waiver would not require the individuals' being billed. However, waiver authorization would presume full and written justification and freedom from technical fault on the part of anyone having waiver authority.
In order for it to be considered timely, a waiver request must be received by the head of an operating unit or other delegated authority not later than 3 years following the date the error was discovered. In determining the date of discovery, any doubts should favor the employee.
In order for an erroneous payment to be waived, there must be no indication of fraud, misrepresentation, lack of good faith or technical fault on the part of the employee or other interested party.
The fact that an overpayment results from administrative error does not absolve the employee from responsibility. An employee should know his or her net salary figure and recognize an unexpected increase. Duplicate salary payments or erroneously issued savings bonds are obvious overpayments. If a reasonable person would have made an inquiry as to the correctness of payment, but the employee did not, then the employee may not be said to be without technical fault and the claim may not be waived. B-165908, March 14, 1969; B-165663, June 11, 1969.
When an employee has necessary records, e.g., earnings and leave statements which, if reviewed, would indicate overpayment, and the employee fails to review such documents for accuracy, he or she is not without fault and waiver should be denied. B-184480, May 20, 1976.
Further, an employee has responsibility for bringing to the attention of a responsible official any unexplained increase in pay. It is not enough to simply inquire what proper payment should be. B-171891, March 23, 1971.
When an employee is cognizant of an error, which results in an overpayment, and informs the agency of the error, he or she may not expect to retain the overpayment without making a refund when the error is corrected. B-171944, March 23, 1971.
The phrase "equity and good conscience" alludes to technical fault. If the employee can be shown to be at technical fault, not only may a waiver not be approved, it is fair and correct to collect the overpayment. The following cites serve as examples:
When an individual is overpaid by hundreds of dollars deposited directly to his or her account and is informed immediately by memorandum of the overpayment, collection would not be against equity and good conscience. Even if the employee had no knowledge of the overpayment when it occurred, he or she has no reason to think it proper; therefore, it would not be against equity and good conscience to require payment. B-188492, February 16, 1978.
When an employee elected optional life insurance coverage but the agency failed to make proper deductions of the premium, it is not inequitable to require payment because the employee was covered despite nonpayment; moreover, his or her beneficiaries would have collected the insurance had the employee died during the period involved. B-193831, July 20, 1979.
When an employee was overpaid in a last check by 72 hours, was advised by agency officials to retain the check, received a lump-sum for less than she expected, assumed that the overpayment had been deducted, and paid her income taxes on that basis, collection is not indicated. The employee is not at fault. Inasmuch as the agency did not respond to her phone calls and did not provide an Earnings and Leave Statement till 14 months later, the totality of circumstances is such that collection would be against equity and good conscience. B-197886, June 24, 1981.
Documentation supporting a request for waiver
A waiver of overpayment may not be considered without a report of investigation. The report of investigation must include:
- A request from the employee for waiver of the gross overpayment.
- A statement of the gross overpayment supported by the bill(s) for the overpayment. If the bill(s) is for the net amount, then computations showing the gross amount less deductions (pay period by pay period) must be included. The information must be presented in a form which will allow the deciding official to see what the employee was actually paid vs. what he or she should have been paid or actual deduction vs. correct deduction, etc., by pay period. The deciding official waives the gross overpayment, not the net.
- A statement of the circumstances under which the overpayment occurred, the duration, the date it was discovered and by whom, the action taken by the employee to get the situation corrected, and whether or not the payment is the subject of an "exception." (If a payment is the subject of an "exception," this means that the propriety of the payment was questioned in an audit of agency accounts).
- Copies of earnings and leave statements, SF-50's, and employee orientation material that would indicate the employee's knowledge of the overpayment.
- A statement as to whether or not there is any indication of fraud, misrepresentation, fault, lack of good faith on the part of the employee or any other person having an interest in obtaining a waiver.
- A statement of the action taken to ensure against the error's occurring again.
- Any other information that would assist the deciding official in determining whether collection would be against equity and good conscience. The report of investigation should not recommend for or against a waiver. It is a statement of fact only.
Heads of operating units or a delegated authority may disapprove waiver requests in any amount.
Waiver requests that are denied at the deciding official level may be appealed to the head of the operating unit. The appeal should detail the errors of fact in the original case as presented, pertinent case law, etc.
5 U.S.C., 5584
Civilian Personnel Law Manual - Title I, Compensation