BNUMBER:  B-271616
DATE:  October 3, 1996
TITLE:  Joan R. Edwards -- Request for Reconsideration of Waiver of
an Erroneous Salary Payment

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Matter of:Joan R. Edwards -- Request for Reconsideration of Waiver of 
          an Erroneous Salary Payment

File:     B-271616

Date:October 3, 1996

DIGEST

GAO declines to waive collection under 5 U.S.C.  sec.  5584 of an erroneous 
payment made to a former employee of salary for time that the employee 
was on "leave-without-pay."  The direct deposit into her account of 
four payments when she was only expecting three should have placed her 
on notice of both the error, and the need to preserve and inquire of 
the agency concerning the reason and authority for the extra payment.

DECISION

Ms. Joan R. Edwards requests reconsideration of our Claims Group's 
action[1] under 5 U.S.C.  sec.  5584, denying waiver of her liability for 
an erroneous salary payment that the Department of Veterans' Affairs 
(VA) is trying to collect from her.  As explained below, we affirm the 
Claims Group's action in this matter.

The payment that VA is trying to collect from Ms. Edwards reflects 
salary paid for pay period 13 of 1993, during which Ms. Edwards was in 
a "leave-without-pay" status.  The record indicates that 
responsibility for having made this erroneous payment rests upon the 
VA and its staff.  Ms. Edwards was out of the office during that 
entire pay period.  Her time and attendance records for it were 
completed by other VA employees who mistakenly credited her with 
having worked that period.

Ms. Edwards argues that her obligation for the erroneous payment 
should be waived under section 5584 because she has already spent the 
extra amount and repayment would impose an unfair hardship upon her 
under these circumstances.  She maintains that administrative errors 
at VA and the United States Postal Service caused her mail to go 
undelivered or be misdelivered for a period of about 3 months.  In her 
view, this precluded her from realizing that she was not entitled to 
the payment before she spent it.  Ms. Edwards was on annual leave 
during most of pay period 11, and had previously requested 
leave-without-pay, for pay periods 12 through 19.[2]  Since VA 
employees usually receive their paychecks about 1-1/2 weeks after the 
close of each pay period, she expected to receive two "paychecks" 
during her hiatus.  She also expected to receive a performance 
incentive award in an unspecified amount during that same period of 
time.  Ms. Edwards maintains that the mishandling of her mail during 
that period caused her to confuse the "check" she erroneously received 
(for pay period 13) for one of the "checks" she was already expecting.  
She writes:

     "Mid-July 1993 employee finally receives mail randomly, in 
     turmoil understands VA checks received to be last two pay periods 
     plus an expected incentive check of unknown dollar amount.  
     Paychecks were always about 1-1/2 weeks after end of last pay 
     period.  This 1-1/2 week lag plus no mail delivery for over six 
     weeks produced no unexplained increase a reasonable person would 
     question under the circumstances."  (Underscoring in original.)

DISCUSSION

Pursuant to 5 U.S.C.  sec.  5584 (1994), this Office may waive claims for 
overpayment of pay and allowances if collection would be against 
equity and good conscience and not in the best interests of the United 
States.  Such authority may not be exercised if there is an indication 
of fraud, misrepresentation, fault, or lack of good faith by the 
employee or any other person having an interest in obtaining a waiver 
of the claim.  Fault exists if, in light of all the circumstances, the 
individual concerned should have known that an error existed but 
failed to take action to have it corrected.  In deciding this, we ask 
whether a reasonable person in the employee's position should have 
been aware that she was receiving payment more than she was entitled 
to received.  E.g., Paxton A. Parrish, B-252521, Jan. 21, 1994.

Ms. Edwards expected to receive three payments, including two 
paychecks and one incentive award during the early stages of her time 
away from work.  As she points out, VA salary payments are usually 
made about 1-1/2 weeks after the close of the pay periods to which 
they relate.  Thus, we presume the two paychecks to which she refers 
related to pay periods 10 and 11.  (This follows from the fact that 
she was on annual leave during pay period 11 and entered leave without 
pay at the start of pay period 12.)  She also expected to receive a 
performance incentive award in a (then) yet-to-be determined 
amount.[3]  It is undisputed that Ms. Edwards did receive these three 
payments.  It is also undisputed that she received a fourth 
payment--the erroneous payment for pay period 13--as well.

Ms. Edwards repeatedly refers to these payments as "checks" and 
implies that the alleged disruption of her mail caused her to receive 
them late and out of the normal order.  This, she suggests, led to her 
confusion over the number and purposes of payments that she received.  
However, the records submitted by the VA indicate that these payments 
were not mailed to Ms. Edwards.  Instead, they were, by prearrangement 
with Ms. Edwards, routinely deposited directly into her bank account 
as electronic fund transfers (EFT).  In informal conversations, the VA 
staff confirmed our understanding of those records, as well as 
informed us that each of these EFT payments was deposited into Ms. 
Edwards's bank account in a regular and timely fashion, unaffected by 
any disruption of her mail delivery.  Thus, while the alleged 
mishandling of her mail deliveries might have prevented Ms. Edwards 
from receiving the routine pay and earnings statements that would have 
explained the amounts and purposes of the payments made to her, it 
could not and did not prevent her from receiving in her bank account, 
knowing that she had received, or most importantly, expending any of 
those payments, including the fourth, unexpected payment.  In this 
regard, we find it significant that Ms. Edwards has not claimed, nor 
does the record show that, during the period in which these payments 
were made, she ever inquired about any late or unreceived payments, or 
attempted to verify the purposes of any of the payments that she did 
receive, including the fourth, unexpected payment.

The deposit into her bank account of the fourth unexpected payment 
should have placed Ms. Edwards on notice of the VA's error.  It 
imposed upon her the twin duties to preserve the extra amount and 
inquire about it.  As she did neither, she was clearly at fault and, 
although it may cause her some hardship to make repayment, her debt 
may not be waived under 5 U.S.C.  sec.  5584.  Dr. Joella Campbell, 
B-259660, June 8, 1995.  Accordingly, the Claims Group's disposition 
of this matter is sustained.

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

1. Z-2942408-056, Aug. 25, 1995.

2. Before the end of that hiatus, however, Ms. Edwards resigned from 
her position because she had moved away from her permanent duty 
station.

3. VA practice then (as now) with respect to the disbursement of 
incentive awards was to add the amount of such awards to the regular 
salary payment being processed for the employee at the time of the 
incentive award.