BNUMBER:  B-261294
DATE:  October 31, 1995
TITLE:  Eric A. Werner

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Matter of:Eric A. Werner

File:     B-261294

Date:     October 31, 1995

DIGEST

An employee was transferred to an overseas location and began to 
receive a post differential allowance, but at an incorrect rate, 
resulting in an overpayment of the allowance.  Partial waiver was 
granted for the period prior to the date that a fellow employee wrote 
to the agency on behalf of both of them inquiring about the propriety 
of the allowance being paid.  The employee appeals the partial waiver 
disallowance, arguing that he did not know of the overpayment until so 
notified by the agency.  The appeal is denied.  The employee knew or 
should have known at the time the letter was sent that the allowance 
being received was at the incorrect rate.  Therefore, collection of 
the debt for the period after the date of the letter is not against 
equity and good conscience and is in the best interest of the United 
States.

DECISION

Mr. Eric A. Werner, an employee of the Defense Mapping Agency, appeals 
Settlement Z-2927892, Dec. 13, 1994, which disallowed waiver of part 
of his debt to the United States for salary overpayments.  The partial 
waiver disallowance is sustained, for the following reasons.

The reported facts are that Mr. Werner was transferred to a duty 
station on Kwajalein Atoll, Marshall Islands (Atoll), in March 1992 
and became entitled to a post differential allowance.  Because of 
administrative oversight by the Directorate of Human Resources, 
Defense Mapping Agency, the allowance paid him beginning March 27, 
1992, was at the outdated rate of 15 percent of base salary instead of 
the correct rate of 10 percent of base salary, which rate became 
effective on March 22, 1992.

The agency states that it was unaware of the change in the post 
differential allowance at the time Mr. Werner was transferred, and its 
Directorate of Human Resources did not learn of the change until 
September 22, 1993, when it received a reply from the Department of 
State incident to its inquiry in late August 1993.  On November 2, 
1993, the agency forwarded revised copies of the Standard Form 1190, 
"Foreign Allowance Application, Grant, and Report," to Mr. Werner and 
others stationed on the Atoll for their review and signature.  On 
November 13, 1993, Mr. Werner returned his signed copy of the form to 
the agency and it became effective on December 3, 1993.

An agency investigating officer determined that Mr. Werner was 
overpaid a total of $3,480.02 for the period March 22, 1992, through 
December 2, 1993.  In his report dated July 27, 1994, the 
investigating officer recommended that the amount overpaid him for the 
period ending October 2, 1993 ($3,136.88), be waived, asserting that 
because Mr. Werner had been notified of the overpayment during the pay 
period ending October 2, 1993, the overpayment from October 3, 1993, 
through December 2, 1993 ($343.14), should be processed for 
collection.

By letter dated November 21, 1994, addressed to this Office, the 
Acting Comptroller of the Defense Mapping Agency generally concurred 
in the recommendation that partial waiver be granted, but identified 
the time that Mr. Werner became aware of possible error as being not 
later than August 16, 1993.  This recommendation was based on the fact 
that another employee (Bruce Hanson), stationed on the Atoll, wrote a 
letter to the agency at that time requesting verification of the 
correct post differential rate.  Based on the latter recommendation, 
this Office waived that part of the debt ($2,841.62) which arose prior 
to August 16, 1993, and disallowed waiver of the debt ($638.40), for 
the period thereafter.

Mr. Werner has appealed that action, arguing that, although he was 
aware of the letter sent to the Directorate of Human Resources, he was 
not aware that the post differential had been decreased.  He states 
that he had heard rumors that the allowance had been increased and it 
was for that reason that the letter was sent.  He contends that he did 
not know that the post differential rate was reduced until the agency 
letter of November 2, 1993, was received and he signed and returned 
the revised Standard Form 1190 on November 13, 1993.

Waiver of a debt under 5 U.S.C.  5584 (1994) is an equitable remedy 
to be granted as a dispensation from the requirement of having to 
repay money received by an employee as a result of administrative 
error.  Because of its equitable nature, the grant of waiver depends 
on the facts in each case since by statute, "an indication of . . . 
fault . . . on the part of an employee" precludes waiver.[1]

Fault, as used in 5 U.S.C.  5584, is considered to exist if it is 
determined that an employee knew or in the exercise of reasonable 
diligence should have known that an error was made and failed to take 
corrective action.  The standard employed is whether a reasonable 
person should have been aware that he/she was receiving payment in 
excess of his/her proper entitlement.[2]  While notification of 
possible payment error to the employee by his agency is always an 
operative event after which erroneous payments received by the 
employee are to be repaid,[3] we have held that where the record 
suggests that the employee was or should have been aware of possible 
error at a date earlier than the notice by the agency, that earlier 
date becomes the date after which erroneous payments received are to 
be repaid and it is not against equity and good conscience to collect 
those overpayments.[4]

In the present case, Mr. Werner admits that he knew about the August 
16, 1993, letter sent to the agency by Mr. Bruce Hanson[5] on their 
behalf.  Although Mr. Werner contends that he thought that the post 
differential allowance had been increased, it is evident that he, Mr. 
Hanson and others discussed the matter prior to that letter being 
sent.  In view of the tone of that letter wherein it is stated that 
"in recent months many concerns and questions have been expressed 
concerning the Post Differential authorized for Kwajalein, Marshall 
Islands," and "please verify the Percentage rate . . . so this matter 
can be resolved," we believe that Mr. Werner's assertion is 
insufficient to establish that he did not know or have reason to 
believe that he was being overpaid.  In the circumstance, collection 
of the overpayment for the period after August 16, 1993, is not 
against equity and good conscience and is in the best interests of the 
United States.

Accordingly, the settlement action previously taken in Mr. Werner's 
case to deny waiver of his debt for the period beginning on August 16, 
1993, is sustained.

/s/Seymour Efros
for Robert P. Murphy
General Counsel

1. 4 C.F.R.  91.5 (1994).

2. George R. Beecherl, B-192485, Nov. 17, 1978.

3. Ronald L. Porcella, B-255591, Aug. 10, 1994, citing to Martha C. 
Barrios, B-245449, Nov. 26, 1991.

4. Dr. Joella Campbell, B-259660, June 8, 1995, citing to Hawley E. 
Thomas, B-227322, Sept. 19, 1988.  See also Hubert G. Calloway, 
B-257971, Mar. 3, 1995, and decisions cited.

5. By decision B-260849, Sept. 19, 1995, Mr. Hanson's request for 
waiver of the overpayment of the post differential allowance for the 
same period was allowed, in part, for the period prior to August 16, 
1993, and disallowed for the period after that date.