BNUMBER:  B-270151.3
DATE:  January 16, 1996
TITLE:  George W. Schlossnagle-Post-1956 Military Service
Deposit

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Matter of:George W. Schlossnagle-Post-1956 Military Service Deposit

File:     B-270151.3

Date:   January 16, 1996

DIGEST

The Department of Energy (DOE) erroneously calculated a Post-1956 
military service deposit of an employee in 1991 and erroneously 
informed him then that his deposit had been paid in full for the 
periods of time involved.  The error was not discovered until 1995 and 
the DOE requests our decision on whether its appropriated funds are 
available to remedy any portion of its error which will cause the 
employee to have to pay several thousand more dollars in principal and 
interest to obtain credit for the military service.  We hold that the 
appropriated funds of DOE are not available for this purpose.

DECISION

The Department of Energy (DOE) requests a decision whether its 
appropriated funds are available to remedy an error it made in 1991 
when it calculated the amount of a Post-1956 military service deposit 
of its employee, Mr. George W. Schlossnagle.[1]  For the following 
reasons, we hold that the appropriated funds of DOE are not available 
for this purpose.

BACKGROUND

On June 2, 1991, Mr. Schlossnagle, a civilian employee,  transferred 
from the Department of the Air Force to DOE.  On June 25 and August 
16, 1991, he applied to DOE under the Post-1956 military service 
program to make a deposit to his retirement account for several prior 
periods of military service in order to receive credit for that 
service toward his civilian retirement annuity.[2]

The DOE calculated Mr. Schlossnagle's deposit amount to be $7,116.32, 
based on his military wages for the specified periods at the 3 percent 
contribution rate for employees covered by the Federal Employees 
Retirement System (FERS).  The FERS rate was used because his payroll 
records reflected retirement coverage under FERS.  Also, under FERS no 
interest was due at that time.  The DOE notified Mr. Schlossnagle of 
the deposit required, and he paid it on October 18, 1991.  On October 
22, 1991, the DOE issued Mr. Schlossnagle a letter stating that his 
deposit for Post-1956 military service had been paid in full.

On May 5, 1995, Mr. Schlossnagle applied to DOE for additional credit 
toward his civilian retirement annuity for several other brief periods 
of military service.  At that time the DOE discovered that Mr. 
Schlossnagle had actually been covered by the Civil Service Retirement 
System (CSRS) rather than the FERS for the military service periods 
involved prior to 1991.  While still employed by the Air Force, Mr. 
Schlossnagle had elected to change his retirement plan from the CSRS 
to FERS on December 30, 1990.  According to DOE, this information was 
not made available to its payroll office at the time of the 1991 
calculation.

Based on the new information, DOE realized that it had erroneously 
calculated Mr. Schlossnagle's deposit in 1991.  The DOE then 
recomputed Mr. Schlossnagle's service deposit at the higher 7 percent 
contribution rate applicable to employees covered under the CSRS plus 
interest.  On July 13, 1995, the DOE notified Mr. Schlossnagle that an 
additional deposit of $13,912.48 (consisting of additional principal, 
interest from 1985 to 1991, and additional interest from 1991 to 1995) 
was required in order to receive full credit for all periods of 
military service requested.[3]

Mr. Schlossnagle appealed DOE's decision to the Office of Personnel 
Management (OPM).  By a letter, dated August 14, 1995, OPM informed 
Mr. Schlossnagle that, since he is still an employee of DOE, that 
Department is responsible for calculating the amount of the deposit 
required and that he should seek any further explanation from DOE.[4]

On October 13, 1995, the DOE sought a decision of our Office on 
whether any of its appropriated funds are available to remedy the 
error it made when it calculated the amount of the deposit in 1991.  
Mr. Schlossnagle contends that he justifiably relied on the DOE's 
statement in 1991 that his Post-1956 military service deposit for the 
periods of time involved had been "paid in full".  Because of this, he 
questions whether he owes any additional amount.  In the alternative, 
he argues that he should not have to pay any additional interest 
caused by DOE's error.  However, the DOE report notes that OPM 
requires payment of interest to the date of deposit and DOE says it 
has no authority to waive interest on the deposit.

OPINION

The Post-1956 military service deposit is a voluntary contribution 
made by an employee to OPM, through the employee's department or 
agency, in order to receive retirement credit for periods of military 
service after December 31, 1956.  The deposit must be made before the 
employee retires; otherwise OPM will not grant credit for the military 
service towards the employee's civilian retirement annuity.  The 
principal statutes involved have been cited in footnote 2, supra.  
Insofar as relevant to the instant case, 5 C.F.R.  831.2106(c) (1995) 
provides:

     "(c)  If interest is applicable, it shall be computed in 
     accordance with instructions published by OPM in the Federal 
     Personnel Manual."

The Federal Personnel Manual (FPM) instructions referred to in this 
regulation have now been superseded by Chapters 22 and 23 of the OPM's 
CSRS and FERS Handbook for Personnel and Payroll Offices 
(Handbook).[5]  Section K of Chapter 23 of the Handbook provides:

     "K.  Agency Payment of Interest

     "1.  Interest Charges Must Be Paid

     "There is no provision in law or regulation for the waiver of 
     interest charged on military deposit accounts.  It is OPM policy 
     that if a remittance is not timely, interest must be charged on 
     the deposit (see 5 CFR 831.105).  Agencies should advise 
     employees of this policy so they can take the necessary steps to 
     make timely payments if they want to avoid the additional 
     interest charges.

     "2.  Agency Payment for the Employee

     "If the agency determines that its errors caused the employee to 
     be liable for additional interest, and the agency has 
     authorization to spend monies for this purpose, it may pay, on 
     behalf of the employee, the interest charges caused by its 
     errors."

As OPM's instructions correctly note, there is no provision in law or 
regulation for the waiver of interest charged on military deposit 
accounts.[6]  In regard to Mr. Schlossnagle's contention of 
justifiable detrimental reliance, we note that payments of money from 
the Federal Treasury are limited to those authorized by statute, and 
erroneous advice given by a government employee to a benefits claimant 
cannot estop the government from denying benefits not otherwise 
permitted by law.  Office of Personnel Management v. Richmond, 496 
U.S. 414 (1990).  Thus, it is clear that, in order to receive military 
service credit, Mr. Schlossnagle must pay the additional principal and 
the interest accrued from 1985 to 1991.

Insofar as the interest from 1991 to 1995 is concerned, section K(2) 
quoted above, provides that, if an agency determines that its errors 
caused the employee to be liable for additional interest, and if the 
agency has authorization to spend monies for this purpose, then it may 
pay, on behalf of the employee, the additional interest charges caused 
by its errors.  Since the DOE has determined that its error caused Mr. 
Schlossnagle to be liable for the additional interest from 1991 to 
1995, the issue for our resolution is whether the DOE has 
authorization to spend monies for "this purpose" i.e., payment to OPM 
of the "additional interest" caused by its error.

The Department of Energy has not pointed to any specific authorization 
for it to pay the interest and we are not aware of any.  The absence 
of any general authorization was discussed in Clair L. Snydergaard, 
B-232231, Feb. 23, 1989.  In that case an Army employee claimed 
reimbursement for interest he was charged for making a late deposit 
into CSRS to obtain credit for post-1956 military service, allegedly 
caused by agency error.  We held that there was no statutory authority 
that would allow the agency to expend its appropriated funds on behalf 
of the employee by paying the interest due on his retirement deposit.  
We noted that there is no agency obligation under 5 U.S.C.  8334(j) 
regarding post-1956 military service and that, once the employee 
decides to participate, the employee must make the required deposit 
plus any applicable interest in order to receive credit for the 
military service.[7]

Accordingly, the appropriated funds of DOE are not available to remedy 
the consequences of its erroneous calculation and statement to Mr. 
Schlossnagle in 1991 that his military service deposit had been paid 
in full.[8]

/s/Seymour Efros
for Robert P. Murphy
General Counsel
f:\projects\ptld\270151-d.wp5

1. This request was submitted by Mr. Richard H. Nieman, Acting 
Director, Office of Departmental Accounting and Financial Systems 
Development, Department of Energy, Germantown, Maryland.  Our Office 
has also received requests for a report on this matter from the 
Honorable Barbara A. Mikulski, United States Senator, and the 
Honorable Paul Sarbanes, United States Senator.

2. For the principal statutes involved, see 5 U.S.C.  8332(c), 
8334(j), 8411(c), and 8422(e) (1994).  The implementing regulations of 
the Office of Personnel Management are found in 5 C.F.R.  831.2101 
to 831.2107 (1995) (for those positions covered by the Civil Service 
Retirement System), and 5 C.F.R.  842.306 to 842.309 (1995) (for 
those positions covered by the Federal Employees Retirement System).  
Further OPM instructions are now found in Chapters 22 and 23 of OPM's 
CSRS and FERS Handbook for Personnel and Payroll Offices.

3. The DOE's report contains the details of this recomputation.  For 
the regulations involved, see 5 C.F.R. 831.2106(c) (1995), and 
Chapters 22 and 23 of FPM Supplement 830-1 (Inst. 21 October 30, 
1991), now republished as Chapters 22 and 23 of OPM's CSRS and FERS 
Handbook for Personnel and Payroll Offices.

4. For the statutes governing employees' appeal rights from 
administrative actions or orders of OPM concerning CSRS or FERS 
retirement matters, see, respectively, 5 U.S.C.  8347(d) and  
8461(e) (1994).

5. See former FPM Supplement 830-1, Chapters 22 and 23 (Inst. 21, 
October 30, 1991).

6. Since the principal and interest of these accounts are voluntary 
contributions, they may not be considered as "erroneous payments" 
subject to waiver under 5 U.S.C.  5584 (1994).

7. See also David A. Faurot, B-230854, Sept. 1, 1988.

8. We note that we have not independently verified the amounts 
required for Mr. Schlossnagle's deposit, as detailed in DOE's report, 
but we suggest that DOE re-examine its calculations in view of the 
employee's objections.