BNUMBER:  B-261628
DATE:  June 13, 1996
TITLE:  Amadeo Martinez, Jr.-Denial of Waiver for Erroneous Payment

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Matter of:Amadeo Martinez, Jr.-Denial of Waiver for Erroneous Payment

File:     B-261628

Date:June 13, 1996

DIGEST

1.  Waiver is denied for duplicate payments for 288 hours of restored 
leave.  While there are no indications of fraud, misrepresentation, or 
lack of good faith on the part of the employee, he is not free of 
fault since he should have been aware that he had received a duplicate 
payment and been overpaid.  The erroneous payment was essentially a 
duplicate payment within a 2-week period for the same 288 hours of 
restored leave, and employee had a responsibility to set it aside, 
available for refund, while pursuing an explanation from responsible 
agency officials.

2.  Employee is indebted in the gross amount of overpayment even 
though he did not directly receive all these monies which he is 
indebted to repay, such as taxes, an allotment, health and life 
insurance, and other amounts that were deducted on his behalf.  In the 
event, however, that the agency is able to directly recoup amounts 
withheld for the employee, such as life insurance, medicare, state 
taxes, or other benefits, then the amount of indebtedness owed by the 
employee shall be diminished accordingly.  The matter of the 
employee's federal income tax liability is under the jurisdiction of 
the Internal Revenue Service, so the employee should discuss matters 
involving the withholding of federal income tax with the IRS office 
which services the area in which he resides.

DECISION

Amadeo Martinez, Jr., a former employee of the Special Accounts 
Division of the Defense Finance and Accounting Service (DFAS), 
Columbus, Ohio, appeals our Settlement Certificate[1] denying his 
claim for waiver of his debt to the United States in the amount of 
$5,581.44 arising from duplicate payments within a 2-week period for 
288 hours of restored leave.  For the reasons stated below, we deny 
waiver.

Background

Mr. Martinez retired from DFAS on January 1, 1994.  At the time of his 
retirement, he was entitled to 288 hours of restored leave, 252 hours 
of lump sum leave, and 104 hours of use or lose leave.  On or about 
January 15, 1994, he received a payment via electronic transfer of 
funds into his bank account reflecting 252 hours of lump sum leave in 
the gross amount of $4,883.76, and 288 hours of restored leave in the 
gross amount of $5,581.44.  He received a leave and earnings statement 
with this payment.  After deductions, the net combined amount for the 
540 hours leave was $6,352.56.  A few days later, a hard copy U.S. 
Treasury check No. 63065359 dated January 20, 1994, was issued to him 
for the same 288 hours of restored leave in the gross amount of 
$5,581.44, as well as an additional payment for 104 hours of use or 
lose leave in the gross amount of $2,015.52.  After deductions the net 
total was $4,713.91.

In both the electronic funds transfer and the hard copy check, the 
gross amount reflecting 288 hours of restored leave was identical, 
i.e., $5,581.44.  Agency officials informed Mr. Martinez by letter 
dated July 18, 1994, that he had incurred a debt for the erroneous 
payment in the net amount of $3,040.59 for the duplicate payment of 
288 hours of restored leave.  Mr. Martinez requested that the agency 
waive this amount on the basis that he was not aware of the 
overpayment.

DFAS denied Mr. Martinez' request for waiver of overpayment in the net 
amount of $3,040.59, and Mr. Martinez appealed to our Office which 
determined that Mr. Martinez had been overpaid in the gross amount of 
$5,581.44 and denied waiver of this amount on the basis that Mr. 
Martinez was partially at fault for failing to make prompt inquiry to 
appropriate agency officials about the duplicate payments.  Mr. 
Martinez now appeals the denial.  Essentially, he reiterates his prior 
contention that he was unaware of the duplicate payment until he was 
asked to return it.

Analysis

Under the provisions of 5 U.S.C.  sec.  5584 (1994), the Comptroller 
General may waive, in whole or in part, a claim arising out of an 
erroneous payment of pay to an employee if there is no indication of 
fraud, misrepresentation, fault, or lack of good faith on the part of 
the employee and when the collection thereof would be against equity 
and good conscience and not in the best interests of the United 
States.  Richard C. Clough, 68 Comp. Gen 326 (1989).

While there are no indications of fraud, misrepresentation, or lack of 
good faith on the part of Mr. Martinez, we do not find that he is free 
from fault.  The erroneous payment Mr. Martinez received was a 
duplicate payment within a 2-week period for the same 288 hours of 
restored leave.  When an employee receives a significant unexplained 
or duplicate payment, he has a responsibility to set it aside, 
available for refund, while pursuing an explanation from responsible 
agency officials, particularly when the employee should have been 
aware of the strong possibility that he had received a duplicate 
payment and been overpaid.  Gary A. Richardson, B-253636, Apr. 20, 
1994.  See also, Mark F. Jones, B-202136, July 20, 1981.

When Mr. Martinez received a hard copy check in the net amount of 
$4,713.91, purportedly for 104 hours of use or lose leave, he should 
have been alerted to the possibility of an error since he had just 
received an electronic funds transfer in the net amount of $6,352.56 a 
few days earlier for 288 hours of restored leave and 252 hours of 
accumulated leave.  He should have inquired why he had received such a 
large net amount for only 104 hours of leave that nearly equaled the 
amount he had received a few days before for 540 hours of combined 
restored and accumulated leave.  Instead, he took no action whatsoever 
until DFAS notified him of the error 6 months later.  While Mr. 
Martinez insists that he acted innocently, his failure to inquire 
about the duplication of payments makes him partially at fault in the 
matter, and his request for waiver is denied.

As to the amount of the indebtedness, while Mr. Martinez did not 
receive directly all the monies which he is indebted to repay, such as 
the taxes, an allotment, health and life insurance, and other amounts 
that were deducted on his behalf, the withheld amounts were for his 
benefit and do not reduce the amount of his indebtedness.  Charles R. 
Ryon, Sr., B-234731, June 19, 1989.  See also, Mark F. Jones, supra, 
and Saburo Nishikawa, B-190531, Apr. 3, 1978.  In the event, however, 
that the Defense Finance and Accounting Service is able to directly 
recoup amounts withheld for Mr. Martinez, such as life insurance, 
medicare, state taxes, or other benefits, then the amount of 
indebtedness owed by Mr. Martinez may be diminished accordingly.  The 
matter of an individual's federal income tax liability is under the 
jurisdiction of the Internal Revenue Service (IRS), so that Mr. 
Martinez should discuss matters involving his withholding of federal 
income tax liability with the IRS office which services the area in 
which he resides.  Mark F. Jones, supra.

Thus, we affirm our prior determination that Mr. Martinez is indebted 
in the gross amount of $5,581.44, less any amounts DFAS is able to 
directly recoup.

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

1. Z-2942134-025, March 13, 1995.