[Federal Register Volume 62, Number 164 (Monday, August 25, 1997)]
[Proposed Rules]
[Pages 45060-45064]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-22389]



[[Page 45059]]

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Part III





Office of Personnel Management





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5 CFR Parts 178 and 551



Settling Claims Procedures and Fair Labor Standards Act Pay 
Administration; Proposed Rules

  Federal Register / Vol. 62, No. 164 / Monday, August 25, 1997 / 
Proposed Rules  

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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 178

RIN 3206-H89


Procedures for Settling Claims

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The Office of Personnel Management is proposing rules of 
procedure for the settlement of claims submitted to OPM for Federal 
civilian employees' compensation and leave, for proceeds of canceled 
checks for veterans' benefits payable to deceased beneficiaries, and 
for the settlement of deceased employees' compensation. Before June 30, 
1996, these claims were settled by the United States General Accounting 
Office (GAO). However, on that date, pursuant to the Legislative Branch 
Appropriations Act of 1996, the authority to settle these claims 
transferred to the Director, Office of Management and Budget, who 
delegated this function to the Office of Personnel Management.

DATES: Comments must be submitted on or before October 24, 1997.

ADDRESSES: Comments may be mailed to the Claims Adjudication Unit, 
Office of the General Counsel, Room 7537, Office of Personnel 
Management, 1900 E Street NW., Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT:
Paul Britner, Senior Attorney, 202-606-2233.

SUPPLEMENTARY INFORMATION:

I. Background

    Pursuant to the Legislative Branch Appropriations Act of 1996, most 
of the claims settlement functions performed by the General Accounting 
Office (GAO) were transferred to the Director, Office of Management and 
Budget. See Sec. 211, Pub. L. 104-53, 109 Stat. 535. Subsequently, the 
Acting Director delegated these functions to various components within 
the Executive branch in a determination order dated June 28, 1996. In 
summary, this order delegated to the Office of Personnel Management the 
authority to settle claims against the United States involving Federal 
employees' compensation and leave, deceased employees' compensation, 
and proceeds of canceled checks for veterans' benefits payable to 
deceased beneficiaries. Subsequently, Congress codified these changes 
through additional legislation. See Pub. L. 104-316, 110 Stat. 3826. 
The procedures in this proposed rule are substantially similar to the 
procedures formerly used by the GAO, which are found at 4 CFR parts 31, 
32 and 33. Changes to these regulations are discussed below.

II. Analysis of the Regulations

Subpart A--Administrative Claims--Compensation and Leave, Deceased 
employees' Accounts and Proceeds of Canceled Checks for Veterans' 
Benefits Payable to Deceased Beneficiaries

Section 178.101, Scope of Subpart

    This section describes the types of claims that may be submitted 
for settlement to OPM, which are claims for federal civilian 
compensation and leave and proceeds of canceled checks for veterans' 
benefits payable to deceased beneficiaries. Claims subject to a 
negotiated grievance procedure are excluded from this part.

Section 178.102, Procedures for Submitting Claims

    This section requires claimants to submit their claims directly to 
OPM, except that at an agency's discretion, the agency may forward the 
claim on behalf of a claimant. The information that must be included in 
a claim and an agency report, when requested by OPM, is described. This 
section also advises claimants where their claims should be sent, 
depending on the nature of the claim. As a general rule, claims arising 
from the Fair Labor Standards Act (FLSA) are to be sent to the 
designated OPM Oversight Division that has jurisdiction for the 
location of the claim. All other claims are to be sent to OPM in 
Washington, DC. to the address set forth in the regulations.

Sections 178.103-178.106

    These sections do not make any substantive changes to the 
comparable GAO procedures.

Section 178.107, Finality of Claims Settlements

    Under GAO's regulations, a dissatisfied claimant could appeal an 
adverse settlement to the Comptroller General and, if sustained, the 
claimant could request reconsideration of that decision. Unlike the 
settlement process at GAO, there will be no further review within OPM. 
At GAO, the initial claims settlement letter was prepared by an 
adjudicator and was reviewed by an attorney only if the claimant 
requested an appeal. At OPM, all settlement letters, except those 
involving FLSA claims, are reviewed by an attorney before they are 
issued. Therefore, non-FLSA claims settled by OPM will get 
substantially the same level of review as claims settled by GAO. 
Claimants also are advised of their right to bring an action in an 
appropriate United States court.

Subpart B--Settlement of Accounts for Deceased Civilian Officers and 
Employees

Section 178.201, Scope of Subpart

    This subpart applies to claims for money due to the accounts of 
deceased civilian officers and employees of the Federal Government and 
of the government of the District of Columbia, including wholly owned 
and mixed-ownership Government corporations.

Section 178.202, Definitions

    Definitions used in subpart B are provided in this section.

Section 178.203, Designation of Beneficiary

    This section combines Secs. 33.4 and 33.5 of 4 CFR into one that 
describes an employee's right to designate a beneficiary for money due, 
an agency's responsibility for employee notification, and the specific 
form and procedures for doing so. The procedures have been shortened 
and streamlined but contain no substantive changes from the GAO 
procedures.

Section 178.204, Order of Payment Precedence

    This section was taken from paragraph (d) of 4 CFR 33.6 and made 
into a separate section outlining the order of payment precedence.

Section 178.205, Procedures Upon Death of Employee

    This section outlines procedures that should be followed upon the 
death of an employee by the employee's designated beneficiaries or 
survivors for the settlement of accounts of any money due to the 
decedent. This section combines 4 CFR 33.7 and 33.8 of the GAO 
procedures and reorganizes the information provided. The substance of 
the section remains the same as in the GAO sections.

Section 178.206, Return of Unnegotiated Government Checks

    This section contains no substantive change to the GAO procedures.

Section 178.207, Claims Settlement Jurisdiction

    This section has been streamlined to include only information about 
claims settlements. The information regarding order of payment 
precedence has been placed in a separate section. This section refers 
claimants to the procedures in subpart A and the

[[Page 45061]]

jurisdiction of the Claims Adjudication Unit, Office of General 
Counsel, Office of Personnel Management, for settlement of any claims 
arising under this subpart.

Section 178.208, Applicability of General Procedures

    This section refers readers to subpart A of this part for 
application of general claims procedures. This function was previously 
covered under 4 CFR part 31.

Regulatory Flexibility Act

    I certify that these regulations would not have a significant 
economic impact on a substantial number of small entities because they 
would only apply to Federal agencies and employees.

Executive Order 12866, Regulatory Review

    This rule has been reviewed by the Office of Management and Budget 
in accordance with Executive Order 12866.

Paperwork Reduction Act of 1995

    Section 178.102, 178.103 and 178.205(b) contain information 
collection requirements related to procedures for submitting claims. 
These regulations assist OPM in settling claims by requiring that 
information be gathered in an organized and efficient manner. Section 
178.102 sets out the required contents of any claim submitted; 
Sec. 178.103 is an additional requirement of proof if the claim is 
filed by a representative of the claimant; and Sec. 178.205(b) lists 
the information necessary, should the claim involve a minor or 
incompetent.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), OPM has submitted a copy of these sections to the Office of 
Management and Budget (OMB) for review. Collection of Information: 
Procedures for Submitting Claims for Compensation and Leave, Deceased 
Employees' Accounts, and Proceeds of Canceled Checks for Veterans' 
Benefits Payable to Deceased Beneficiaries.
    The total estimated annual reporting burden resulting from these 
collection of information requirements is 130.5 hours.

                                          (130 respondents  x  1 hour {average time to prepare claim})                                                =   130.00   +  ..........................
                                          (1 representative  x  .25 {time for additional requirements})                                               =      .25   +  ..........................
                                          (1 minor or incompetent  x  .25 {additional requirements})                                                  =      .25      ..........................
                                         ----------------------------------------------------------------------------------------------------------------------------                           
                                             annual reporting burden                                                                                      130.50      ..........................

    Organizations and individuals desiring to submit comments on these 
information collection requirements should direct them to the Office of 
Information and Regulatory Affairs, OMB, Room 10235, New Executive 
Office Building, Washington, DC 20503; Attention: Desk Officer for OPM.
    OMB considers comments by the public on this proposed collection of 
information in:
     Evaluating whether the proposed collection of information 
is necessary for the proper performance of the functions of the 
Department, including whether the information will have a practical 
use;
     Evaluating the accuracy of the Department's estimate of 
the burden of the proposed collection of information, including the 
validity of the methodology and assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected: and
     Minimizing the burden of collection of information on 
those who are to respond, including through the use of appropriate 
automated electronic, mechanical or other technological collection 
techniques or other forms of information technology; e.g., permitting 
electronic submission of responses.
    OMB is required to make a decision concerning the collection of 
information contained in these proposed regulations between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment to OMB is best assured of having its effect if OMB 
receives it within 30 days of publication. This does not affect the 
deadline for the public to comment to OPM on the proposed regulations.

List of Subjects in 5 CFR Part 178

    Administrative practice and procedure, Claims, Compensation, 
Government employees.

U.S. Office of Personnel Management.
James B. King,
Director.

    Accordingly, OPM is proposing to amend 5 CFR by adding part 178 as 
follows:

PART 178--PROCEDURES FOR SETTLING CLAIMS

Subpart A--Administrative Claims--Compensation and Leave, Deceased 
Employees' Accounts and Proceeds of Canceled Checks for Veterans' 
Benefits Payable to Deceased Beneficiaries

Sec.
178.101  Scope of subpart.
178.102  Procedures for submitting claims.
178.103  Claim filed by a claimant's representative.
178.104  Statutory limitations on claims.
178.105  Basis of claim settlements.
178.106  Form of claim settlements.
178.107  Finality of claims settlements.

Subpart B--Settlement of Accounts for Deceased Civilian Officers and 
Employees

Sec.
178.201  Scope of subpart.
178.202  Definitions.
178.203  Designation of beneficiary.
178.204  Order of payment precedence.
178.205  Procedures upon death of employee.
178.206  Return of unnegotiated Government checks.
178.207  Claims settlement jurisdiction.
178.208  Applicability of general procedures.

Subpart A--Administrative Claims--Compensation and Leave, Deceased 
Employees' Accounts and Proceeds of Canceled Checks for Veterans' 
Benefits Payable to Deceased Beneficiaries

    Authority: 31 U.S.C. 3702; 5 U.S.C. 5583; 38 U.S.C. 5122; Pub. 
L. 104-53, sec. 211, Nov. 19, 1995; E.O. 12107.


Sec. 178.101  Scope of subpart.

    (a) Claims covered. This subpart prescribes general procedures 
applicable to claims against the United States that may be settled by 
the Director of the Office of Personnel Management pursuant to 31 
U.S.C. 3702, 5 U.S.C. 5583 and 38 U.S.C. 5122. In general, these claims 
involve Federal employees' compensation and leave and claims for 
proceeds of canceled checks for veterans' benefits payable to deceased 
beneficiaries.
    (b) Claims not covered. This subpart does not apply to claims that 
are under the exclusive jurisdiction of administrative agencies 
pursuant to specific statutory authority or claims concerning matters 
that are subject to negotiated grievance procedures under collective 
bargaining agreements entered into pursuant to 5 U.S.C. 7121(a). Also, 
these procedures do not apply to claims under the Fair Labor Standards 
Act (FLSA). Procedures for FLSA claims are set out in part 551 of this 
chapter.

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Sec. 178.102  Procedures for submitting claims.

    (a) Content of claims. Except as provided in paragraph (b) of this 
section, a claim shall be submitted by the claimant in writing and must 
be signed by the claimant or by the claimant's representative. While no 
specific form is required, the request should describe the basis for 
the claim and state the amount sought. The claim should also include:
    (1) The name, address, telephone number and facsimile machine 
number, if available, of the claimant;
    (2) The name, address, telephone number and facsimile machine 
number, if available, of the agency employee who denied the claim;
    (3) A copy of the denial of the claim; and,
    (4) Any other information which the claimant believes OPM should 
consider.
    (b) Agency submissions of claims. At the discretion of the agency, 
the agency may forward the claim to OPM on the claimant's behalf. The 
claimant is responsible for ensuring that OPM receives all the 
information requested in paragraph (a) of this section.
    (c) Administrative report. At OPM's discretion, OPM may request the 
agency to provide an administrative report. This report should include:
    (1) The agency's factual findings;
    (2) The agency's conclusions of law with relevant citations;
    (3) The agency's recommendation for disposition of the claim;
    (4) A complete copy of any regulation, instruction, memorandum, or 
policy relied upon by the agency in making its determination;
    (5) A statement that the claimant is or is not a member of a 
collective bargaining unit, and if so, a statement that the claim is or 
is not covered by a negotiated grievance procedure that specifically 
excludes the claim from coverage; and
    (6) Any other information that the agency believes OPM should 
consider.
    (d) Canceled checks for veterans' benefits.. Claims for the 
proceeds of canceled checks for veterans' benefits payable to deceased 
beneficiaries must be accompanied by evidence that the claimant is the 
duly appointed representative of the decedent's estate and that the 
estate will not escheat.
    (e) Where to submit claims. (1) All claims under this section 
should be sent to the Claims Adjudication Unit, Room 7535, Office of 
the General Counsel, Office of Personnel Management, 1900 E Street NW., 
Washington, DC 20415. Telephone inquiries regarding these claims may be 
made to (202) 606-2233.
    (2) FLSA claims should be sent to the appropriate OPM Oversight 
Division as provided in part 551 of this chapter.


Sec. 178.103  Claim filed by a claimant's representative.

    A claim filed by a claimant's representative must be supported by a 
duly executed power of attorney or other documentary evidence of the 
representative's right to act for the claimant.


Sec. 178.104  Statutory limitations on claims.

    (a) Statutory limitations relating to claims generally. Except as 
provided in paragraphs (b) and (c) of this section or as otherwise 
provided by law, all claims against the United States Government are 
subject to the 6-year statute of limitations contained in 31 U.S.C. 
3702(b). To satisfy the statutory limitation, a claim must be received 
by the Office of Personnel Management, or by the department or agency 
out of whose activities the claim arose, within 6 years from the date 
the claim accrued. The claimant is responsible for proving that the 
claim was filed within the applicable statute of limitations.
    (b) Claims under the Fair Labor Standards Act (FLSA). Claims 
arising under the FLSA, 29 U.S.C. 207, et seq., must be received by the 
Office of Personnel Management, or by the department or agency out of 
whose activity the claim arose, within the time limitations specified 
in the FLSA.
    (c) Other statutory limitations. Statutes of limitation other than 
that identified in paragraph (a) of this section may apply to certain 
claims. Claimants are responsible for informing themselves regarding 
other possible statutory limitations.


Sec. 178.105  Basis of claim settlements.

    The burden is upon the claimant to establish the timeliness of the 
claim, the liability of the United States, and the claimant's right to 
payment. The settlement of claims is based upon the written record 
only, which will include the submissions by the claimant and the 
agency. OPM will accept the facts asserted by the agency, absent clear 
and convincing evidence to the contrary.


Sec. 178.106  Form of claim settlements.

    OPM will send a settlement to the claimant advising whether the 
claim may be allowed in whole or in part. If OPM requested an agency 
report or if the agency forwarded the claim on behalf of the claimant, 
OPM also will send the agency a copy of the settlement.


Sec. 178.107  Finality of claim settlements.

    (a) The OPM settlement is final; no further administrative review 
is available within OPM.
    (b) Nothing is this subpart limits the right of a claimant to bring 
an action in an appropriate United States court.

Subpart B--Settlement of Accounts for Deceased Civilian Officers and 
Employees

    Authority: 5 U.S.C. 5581, 5582, 5583


Sec. 178.201  Scope of subpart.

    (a) Accounts covered. This subpart prescribes forms and procedures 
for the prompt settlement of accounts of deceased civilian officers and 
employees of the Federal Government and of the government of the 
District of Columbia (including wholly owned and mixed-ownership 
Government corporations), as stated in 5 U.S.C. 5581, 5582, 5583.
    (b) Accounts not covered. This subpart does not apply to accounts 
of deceased officers and employees of the Federal land banks, Federal 
intermediate credit banks, or regional banks for cooperatives (see 5 
U.S.C. 5581(1)). Also, these procedures do not apply to payment of 
unpaid balance of salary or other sums due deceased Senators or Members 
of the House of Representatives or their officers or employees (see 2 
U.S.C. 36a, 38a).


Sec. 178.202  Definitions.

    (a) The term deceased employees as used in this part includes 
former civilian officers and employees who die subsequent to separation 
from the employing agency.
    (b) The term money due means the pay, salary, or allowances due on 
account of the services of the decedent for the Federal Government or 
the government of the District of Columbia. It includes, but is not 
limited to:
    (1) All per diem instead of subsistence, mileage, and amounts due 
in reimbursement of travel expenses, including incidental and 
miscellaneous expenses which are incurred in connection with the travel 
and for which reimbursement is due;
    (2) All allowances upon change of official station;
    (3) All quarters and cost-of-living allowances and overtime or 
premium pay;
    (4) Amounts due for payment of cash awards for employees' 
suggestions;
    (5) Amounts due as refund of salary deductions for United States 
Savings bonds;
    (6) Payment for all accumulated and current accrued annual or 
vacation leave equal to the pay the decedent would have received had he 
or she lived

[[Page 45063]]

and remained in the service until the expiration of the period of such 
annual or vacation leave;
    (7) The amounts of all checks drawn in payment of such compensation 
which were not delivered by the Government to the officer or employee 
during his or her lifetime or of any unnegotiated checks returned to 
the Government because of the death of the officer or employee; and
    (8) Retroactive pay under 5 U.S.C. 5344(b)(2).


Sec. 178.203  Designation of beneficiary.

    (a) Agency notification. The employing agency shall notify each 
employee of his or her right to designate a beneficiary or 
beneficiaries to receive money due, and of the disposition of money due 
if a beneficiary is not designated. An employee may change or revoke a 
designation at any time under regulations promulgated by the Director 
of the Office of Personnel Management or his or her designee.
    (b) Designation Form. Standard Form 1152, Designation of 
Beneficiary, Unpaid Compensation of Deceased Civilian Employee, is 
prescribed for use by employees in designating a beneficiary and in 
changing or revoking a previous designation; each agency will furnish 
the employee a Standard Form 1152 upon request. In the absence of the 
prescribed form, however, any designation, change, or cancellation of 
beneficiary witnessed and filed in accordance with the general 
requirements of this part will be acceptable.
    (c) Who may be designated. An employee may designate any person or 
person as beneficiary. The term persons or persons as used in this part 
includes a legal entity or the estate of the deceased employee.
    (d) Executing and filing a designation of beneficiary form. The 
Standard Form 1152 must be executed in duplicate by the employee and 
filed with the employing agency where the proper officer will sign it 
and insert the date of receipt in the space provided on each part, file 
the original, and return the duplicate to the employee. When a 
designation of beneficiary is changed or revoked, the employing agency 
should return the earlier designation to the employee, keeping a copy 
of only the current designation on file.
    (e) Effective period of a designation. A properly executed and 
filed designation of beneficiary will be effective as long as 
employment by the same agency continues. If an employee resigns and is 
reemployed, or is transferred to another agency, the employee must 
execute another designation of beneficiary form in accordance with 
paragraph (d) of this section. A new designation of beneficiary is not 
required, however, when an employee's agency or site, function, 
records, equipment, and personnel are absorbed by another agency.


Sec. 178.204  Order of payment precedence.

    To facilitate the settlement of the accounts of the deceased 
employees, money due an employee at the time of the employee's death 
shall be paid to the person or persons surviving at the date of death, 
in the following order of precedence, and the payment bars recovery by 
another person of amounts so paid:
    (a) First, to the beneficiary or beneficiaries designated by the 
employee in a writing received in the employing agency prior to the 
employee's death;
    (b) Second, if there is no designated beneficiary, to the surviving 
spouse of the employee;
    (c) Third, if none of the above, to the child or children of the 
employee and descendants of deceased children by representation;
    (d) Fourth, if none of the above, to the parents of the deceased 
employee or the survivor of them;
    (e) Fifth, if none of the above, to the duly appointed legal 
representative of the estate of the deceased employee; and
    (f) Sixth, if none of the above, to the person or persons entitled 
under the laws of the domicile of the employee at the time of his or 
her death.


Sec. 178.205  Procedures upon death of employee.

    (a) Claim form. As soon as practicable after the death of an 
employee, the agency in which the employee was last employed will 
request, in the order of precedence outlined in Sec. 178.204, the 
appropriate person or persons to execute Standard Form 1153, Claim for 
Unpaid Compensation of Deceased Civilian Employee.
    (b) Claims involving minors or incompetents. If a guardian or 
committee has been appointed for a minor or incompetent appearing 
entitled to unpaid compensation, the claim should be supported by a 
certificate of the court showing the appointment and qualification of 
the claimant in such capacity. If no guardian or committee has been or 
will be appointed, the initial claim should be supported by a statement 
showing:
    (1) Claimant's relationship to the minor or incompetent, if any;
    (2) The name and address of the person having care and custody of 
the minor or incompetent;
    (3) That any moneys received will be applied to the use and benefit 
of the minor or incompetent; and
    (4) That the appointment of a guardian or committee is not 
contemplated.


Sec. 178.206  Return of unnegotiated Government checks.

    All unnegotiated United States Government checks drawn to the order 
of a decedent representing money due as defined in Sec. 178.202, and in 
the possession of the claimant, should be returned to the employing 
agency concerned. Claimants should be instructed to return any other 
United States Government checks drawn to the order of a decedent, such 
as veterans benefits, social security benefits, or Federal tax refunds, 
to the agency from which the checks were received, with a request for 
further instructions from that agency.


Sec. 178.207  Claims settlement jurisdiction.

    (a) District of Columbia and Government corporations. Claims for 
unpaid compensation due deceased employees of the government of the 
District of Columbia shall be paid by the District of Columbia, and 
those of Government corporations or mixed ownership Government 
corporations may be paid by the corporations.
    (b) Office of Personnel Management. Each agency shall pay 
undisputed claims for the compensation due a deceased employee. Except 
as provided in paragraph (a) of this section, disputed claims for money 
due deceased employees of the Federal Government will be submitted to 
the Claims Adjudication Unit, Office of General Counsel, in accordance 
with Sec. 178.102. For example:
    (1) When doubt exists as to the amount or validity of the claim;
    (2) When doubt exists as to the person(s) properly entitled to 
payment; or
    (3) When the claim involves uncurrent checks. Uncurrent checks are 
unnegotiated and/or undelivered checks for money due the decedent which 
have not been paid by the end of the fiscal year after the fiscal year 
in which the checks were issued. The checks, if available, should 
accompany the claims.
    (c) Payment of claim. Claims for money due will be paid by the 
appropriate agency only after settlement by the Claims Adjudication 
Unit occurs.

[[Page 45064]]

Sec. 178.208  Applicability of general procedures.

    When not in conflict with this subpart, the provisions of subpart A 
of this part relating to procedures applicable to claims generally are 
also applicable to the settlement of account of deceased civilian 
officers and employees.

[FR Doc. 97-22389 Filed 8-22-97; 8:45 am]
BILLING CODE 6325-01-M