BNUMBER:  B-271133
DATE:  April 30, 1996
TITLE:  David W. Snearly

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Matter of:David W. Snearly

File:     B-271133

Date:April 30, 1996

DIGEST

Former Navy enlisted member may be granted waiver of his debt for 
erroneous payment of pay and allowances made to him after the 
effective date of his discharge where he had been placed on terminal 
leave prior to discharge, and at the time of the erroneous payment, he 
had not received discharge papers or final statement of pay because 
his ship had sailed with his personnel records on board and the ship's 
personnel had overlooked preparing the discharge papers.  In the 
circumstances, it is not unreasonable for him to have thought he had 
not been separated from the Navy and was therefore entitled to the 
additional payment of pay and allowances.

DECISION

This responds to an appeal of a Claims Group settlement[1] that 
partially waived the collection of erroneous payments of pay and 
allowances made to David W. Snearly after his separation from the 
Navy.  We conclude that Mr. Snearly's request for a waiver of the 
remainder of his debt may be granted.

BACKGROUND

Mr. Snearly, an electronics technician (E-5), was scheduled to be 
discharged from the Navy in June 1994, after 5 years and 8 months of 
active duty.  Because the ship to which Mr. Snearly was then assigned 
was scheduled to sail from Charleston for the Mediterranean on or 
about June 5, 1994, Mr. Snearly was authorized to take terminal leave 
beginning May 30 pending his discharge rather than sail with his ship 
and shortly thereafter be flown back to the United States for 
discharge.  However, Mr. Snearly's personnel and pay records were 
retained on board the ship when it sailed.  Mr. Snearly states that he 
had been told that his DD form 214 (Certificate of Discharge or 
Release from Active Duty) would be forwarded to him by the date he was 
due to be discharged, June 17, but he did not receive it by that date 
nor did he receive the out-processing (including a statement of final 
pay and allowances) usually provided a member being discharged, since 
he was not assigned to a shore station and his records were still on 
shipboard.  After he made inquiry, and after his father inquired 
subsequently on his behalf, Naval officers at Charleston contacted the 
ship and were advised that the matter had been overlooked, but the 
discharge papers would be prepared and sent to him.  Apparently this 
was in early July, but because the papers were sent by surface mail, 
Mr. Snearly did not receive them until July 25. 

In the meantime, although he was scheduled to be discharged on June 
17, the Navy 
made payments of pay and allowances to his bank account on July 1 and 
15, apparently because the papers had not been prepared and forwarded 
from his ship in time to prevent the payments.  The Navy later 
determined that as of the effective date of Mr. Snearly's discharge on 
June 17, he was entitled to receive a final separation payment of 
$634.23 which represented pay and allowances for 2 days, 5 days of 
lump-sum leave, and a clothing maintenance allowance.  The payment the 
Navy made to his account on July 1 was in the amount of $858.49.  As a 
result of this payment, Mr. Snearly was overpaid $224.26 (i.e., 
$858.49 minus the $634.23 he was due on separation).  The payment made 
to his account on July 15, in the amount of $654.15, was the usual 
mid-month payment of pay and allowances he had been receiving on 
active duty.  The Navy determined that the entire July 15 payment was 
erroneous because it was for a period after the effective date of Mr. 
Snearly's discharge, June 17.  Thus, the total amount of the 
overpayments to Mr. Snearly was $878.41. 

Several months later, the Navy discovered the overpayments and sought 
refund from Mr. Snearly.  He initially responded that he did not think 
he had been overpaid, and he asked for documentation explaining the 
payments he had received, including leave and earnings statements for 
the last 3 months of his active duty, which he indicated he had not 
received.  The Navy furnished him the documentation, and he 
subsequently sought waiver of the debt.

Based upon a report from the Navy, our Claims Group waived the 
overpayment of $224.26, on the basis that Mr. Snearly received the 
July 1 payment in good faith and could not be expected to know that it 
exceeded the amount he was entitled to receive as his final payment on 
discharge.  However, the Claims Group denied waiver of the $654.15 
erroneously paid to his account on July 15, stating that after 
receiving the July 1 payment, he should have known he was not entitled 
to any further payments after the date of his discharge.

In support of Mr. Snearly's appeal, the Navy has now provided 
information indicating that Mr. Snearly believed he had not been 
discharged from the Navy until he received his discharge papers, which 
he had been actively pursuing because he could not obtain civilian 
employment without them.  Mr. Snearly thus asserts that he saw no 
reason to question the validity of the July 15 payment to his account. 

ANALYSIS

Under 10 U.S.C.  sec.  2774, we may waive collection of erroneous payments 
of pay and allowances made to members or former members of the 
uniformed services if collection would be against equity and good 
conscience and not in the best interest of the United States.  
Furthermore, waiver can only be granted if it is shown that the claim 
arose because of an administrative error, with no indication of fraud, 
fault, misrepresentation, or lack of good faith by the member or any 
other person in accepting the overpayment.

The standard we employ in determining whether a member is at fault in 
accepting an overpayment is whether, under the particular 
circumstances involved, a reasonable person would have been aware that 
he was receiving more than his proper entitlement.  MS1 Johnny 
Singletary, USN (Retired), B-254328, Nov. 17, 1993.  In such a case, 
the member is expected to retain the questionable payment available 
for refund and bring the matter to the attention of appropriate 
service officials.  4 C.F.R.  sec.  91.5(b). 

Generally, where a member has gone through the usual out-processing 
procedures, received his discharge papers and an itemized statement of 
his final pay at time of  discharge, he would be expected to realize 
an error had occurred if he received a subsequent additional payment, 
and waiver would not be granted.  See e.g., Elizabeth G. Thompson, 
B-255988, May 31, 1994; and MS1 Johnny Singletary, supra.

As noted above, Mr. Snearly did not go through the usual 
out-processing and he did not receive his discharge papers until over 
a month after the date the discharge was made effective.  In addition, 
upon inquiry about the discharge papers, he finally was told in early 
July (3 weeks after his anticipated discharge date) that personnel on 
the ship had overlooked the matter and the papers had not been 
prepared, but they would be prepared and sent to him.  Also, it 
appears he received no statement of final pay nor had he received 
leave and earnings statements for the period he was on terminal leave, 
and apparently for sometime prior thereto.

In light of the circumstances of this case, we believe it was not 
unreasonable for Mr. Snearly to have thought that he was not 
discharged on June 17, the anticipated date, since he was told in July 
that the documents effectuating his discharge had not been prepared.  
When they were actually prepared is not clear from the record, but 
apparently it was sometime well past June 17.  Since Mr. Snearly did 
not receive the discharge documents until July 25, we do not find it 
unreasonable for him to have assumed he had not been separated from 
the Navy until late July, and he was entitled to the July 15 payment 
credited to his account.[2]  We also note that there is no indication 
in the record that Mr. Snearly had any special knowledge of personnel 
or payroll processes.  Therefore, we believe that a combination of the 
totality of circumstances in this case supports a finding that Mr. 
Snearly's failure to make inquiries into the validity of the July 15 
payment does not constitute fault under the waiver statute.  See Donna 
J. Chambers, B-229109, June 8, 1988.

Accordingly, we grant waiver of the remainder of Mr. Snearly's debt, 
totaling $654.15.

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

1. Z-2942346, May 12, 1995.

2. In this regard, we note that ordinarily a member of an armed force 
is not to be discharged or released from active duty until his 
discharge certificate or certificate of release from active duty and 
his final pay, or a substantial part thereof, are ready for delivery 
to him.  See 10 U.S.C.  sec.  1168(a); 63 Comp. Gen. 251 (1984), and cases 
cited therein.