Appendix A to Part 5 - Treasury Directive 34-01 - Waiving Claims Against Treasury Employees for Erroneous Payments
31:1.1.1.1.6.3.1.3.24 : Appendix A
Appendix A to Part 5 - Treasury Directive 34-01 - Waiving Claims
Against Treasury Employees for Erroneous Payments Treasury
Directive 34-01
Date: July 12, 2000.
Sunset Review: July 12, 2004.
Subject: Waiving Claims Against Treasury Employees for
Erroneous Payments.
1. Purpose
This Directive establishes the Department of the Treasury's
policies and procedures for waiving claims by the Government
against an employee for erroneous payments of: (1) Pay and
allowances (e.g., health and life insurance) and (2) travel,
transportation, and relocation expenses and allowances.
2. Background
a. 5 U.S.C. § 5584 authorizes the waiver of claims by the United
States in whole or in part against an employee arising out of
erroneous payments of pay and allowances, travel, transportation,
and relocation expenses and allowances. A waiver may be considered
when collection of the claim would be against equity and good
conscience and not in the best interest of the United States
provided that there does not exist, in connection with the claim,
an indication of fraud, misrepresentation, fault, or lack of good
faith on the part of the employee or any other person having an
interest in obtaining a waiver of the claim.
b. The General Accounting Office Act of 1996 (Pub. L. 104-316),
Title I, § 103(d), enacted October 19, 1996, amended 5 U.S.C. §
5584 by transferring the authority to waive claims for erroneous
payments exceeding $1,500 from the Comptroller General of the
United States to the Office of Management and Budget (OMB). OMB
subsequently redelegated this waiver authority to the executive
agency that made the erroneous payment. The authority to waive
claims not exceeding $1,500, which was vested in the head of each
agency prior to the enactment of Pub. L. 104-316, was unaffected by
the Act.
c. 5 U.S.C. § 5514 authorizes the head of each agency, upon a
determination that an employee is indebted to the United States for
debts to which the United States is entitled to be repaid at the
time of the determination, to deduct up to 15%, or a greater amount
if agreed to by the employee, from the employee's pay at officially
established pay intervals in order to repay the debt.
3. Delegation
a. The Deputy Assistant Secretary (Administration), the heads of
bureaus, the Inspector General, and the Inspector General for Tax
Administration are delegated the authority to waive, in whole or in
part, a claim of the United States against an employee for an
erroneous payment of pay and allowances, travel, transportation,
and relocation expenses and allowances, aggregating less than
$5,000 per claim, in accordance with the limitations and standards
in 5 U.S.C. § 5584.
b. Treasury's Deputy Chief Financial Officer is delegated the
authority to waive, in whole or in part, a claim of the United
States against an employee for an erroneous payment of pay and
allowances, travel, transportation, and relocation expenses and
allowances, aggregating $5,000 or more per claim, in accordance
with the limitations and standards in 5 U.S.C. § 5584.
4. Appeals
a. Requests for waiver of claims aggregating less than $5,000
per claim which are denied in whole or in part may be appealed to
the Deputy Chief Financial Officer for the Department of the
Treasury.
b. Requests for waiver of claims aggregating $5,000 or more per
claim which are denied in whole or in part may be appealed to the
Assistant Secretary (Management)/Chief Financial Officer.
5. Redelegation
The Deputy Assistant Secretary (Administration), the heads of
bureaus, the Inspector General, and the Inspector General for Tax
Administration may redelegate their respective authority and
responsibility in writing no lower than the bureau deputy chief
financial officer unless authorized by Treasury's Deputy Chief
Financial Officer. Copies of each redelegation shall be submitted
to the Department's Deputy Chief Financial Officer.
6. Responsibilities
a. The Deputy Assistant Secretary (Administration), the heads of
bureaus, the Inspector General, and the Inspector General for Tax
Administration shall:
(1) Promptly notify an employee upon discovery of an erroneous
payment to that employee;
(2) Promptly act to collect the erroneous overpayment, following
established debt collection policies and procedures;
(3) Establish time frames for employees to request a waiver in
writing and for the bureau to review the waiver request. These time
frames must take into consideration the responsibilities of the
United States to take prompt action to pursue enforced collection
on overdue debts, which may arise from erroneous payments.
(4) Notify employees whose requests for waiver of claims
aggregating less than $5,000 per claim are denied in whole or in
part of the basis for the denial and the right to appeal the denial
to the Deputy Chief Financial Officer of the Department of the
Treasury. All such appeals shall:
(a) Be made in writing;
(b) Specify the basis for the appeal;
(c) Include a chronology of the events surrounding the erroneous
payments;
(d) Include a statement regarding any mitigating factors;
and
(e) Be submitted to the official who denied the waiver request
no later than 60 days from receipt by the employee of written
notice of the denial of the waiver; and
(f) Attach at least the following documents: the employee's
original request for a waiver; the bureau's denial of the request;
any personnel actions, e.g., promotions, demotions, step increases,
etc. that relate to the overpayment.
(5) Forward to Treasury's Deputy Chief Financial Officer the
appeal and supporting documentation, the bureau's recommendation as
to why the appeal should be approved or denied; and a statement as
to the action taken by the bureau to avoid a recurrence of the
error.
(6) Pay a refund when appropriate if a waiver is granted;
(7) Fulfill all labor relations responsibilities when
implementing this directive; and
(8) Fulfill any other responsibility of the agency imposed by 5
U.S.C. § 5584, or other applicable laws and regulations.
b. Treasury's Deputy Chief Financial Officer shall advise
employees whose requests for waiver of claims aggregating $5,000 or
more per claim are denied in whole or in part of the basis for the
denial and the right to appeal the denial to the Assistant
Secretary (Management)/Chief Financial Officer. All such appeals
shall be in the format and contain the information and
documentation described in subsection 6.a.(4), above. The Deputy
Chief Financial Officer shall forward to Assistant Secretary
(Management)/Chief Financial Officer the appeal and supporting
documentation, his/her recommendation as to why the appeal should
be approved or denied, and a statement obtained from the bureau
from which the claim arose as to the action taken by the bureau to
avoid a recurrence of the error.
7. Reporting Requirements
a. Each bureau, the Deputy Assistant Secretary (Administration)
for Departmental Offices, the Inspector General, and the Inspector
General for Tax Administration shall maintain a register of waiver
actions subject to Departmental review. The register shall cover
each fiscal year and be prepared by December 31 of each year for
the preceding fiscal year. The register shall contain the following
information:
(1) The total amount waived by the bureau;
(2) The number and dollar amount of waiver applications granted
in full;
(3) The number and dollar amount of waiver applications granted
in part and denied in part, and the dollar amount of each;
(4) The number and dollar amount of waiver applications denied
in their entirety;
(5) The number of waiver applications referred to the Deputy
Chief Financial Officer for initial action or for appeal;
(6) The dollar amount refunded as a result of waiver action by
the bureau; and
(7) The dollar amount refunded as a result of waiver action by
the Deputy Chief Financial Officer or the Assistant Secretary
(Management)/Chief Financial Officer.
b. Each bureau, the Deputy Assistant Secretary (Administration)
for Departmental Offices, the Inspector General, and the Inspector
General for Tax Administration shall retain a written record of
each waiver action for 6 years and 3 months. At a minimum, the
written record shall contain:
(1) The bureau's summary of the events surrounding the erroneous
payment;
(2) Any written comments submitted by the employee from whom
collection is sought;
(3) An account of the waiver action taken and the reasons for
such action; and
(4) Other pertinent information such as any action taken to
refund amounts repaid.
8. Effect of Request for Waiver
A request for a waiver of a claim shall not affect an employee's
opportunity under 5 U.S.C. § 5514(a)(2)(D) for a hearing on the
determination of the agency concerning the existence or the amount
of the debt, or the terms of the repayment schedule. A request by
an employee for a hearing under 5 U.S.C. § 5514(a)(2)(D) shall not
affect an employee's right to request a waiver of the claim. The
determination whether to waive a claim may be made at the
discretion of the deciding official either before or after a final
decision is rendered pursuant to 5 U.S.C. § 5514(a)(2)(D)
concerning the existence or the amount of the debt, or the terms of
the repayment schedule.
9. Guidelines for Determining Requests
a. A request for a waiver shall not be granted if the
deciding official determines there exists, in connection with the
claim, an indication of fraud, misrepresentation, fault, or lack of
good faith on the part of the employee or any other person having
an interest in obtaining a waiver of the claim. There are no
exceptions to this rule for financial hardship or otherwise.
(1) “Fault” exists if, in light of all the circumstances, it is
determined that the employee knew or should have known that an
error existed, but failed to take action to have it corrected.
Fault can derive from an act or a failure to act. Unlike fraud,
fault does not require a deliberate intent to deceive. Whether an
employee should have known about an error in pay is determined from
the perspective of a reasonable person. Pertinent considerations in
finding fault include whether:
(a) The payment resulted from the employee's incorrect, but not
fraudulent, statement that the employee should have known was
incorrect;
(b) The payment resulted from the employee's failure to disclose
material facts in the employee's possession which the employee
should have known to be material; or
(c) The employee accepted a payment, which the employee knew or
should have known to be erroneous.
(2) Every case must be examined in light of its particular
facts. For example, where an employee is promoted to a higher grade
but the step level for the employee's new grade is miscalculated,
it may be appropriate to conclude that there is no fault on the
employee's part because employees are not typically expected to be
aware of and understand the rules regarding determination of step
level upon promotion. On the other hand, a different conclusion as
to fault potentially may be reached if the employee in question is
a personnel specialist or an attorney who concentrates on personnel
law.
b. If the deciding official finds an indication of fraud,
misrepresentation, fault, or lack of good faith on the part of the
employee or any other person having an interest in obtaining a
waiver of the claim, then the request for a waiver must be
denied.
c. If the deciding official finds no indication of fraud,
misrepresentation, fault, or lack of good faith on the part of the
employee or any other person having an interest in obtaining a
waiver of the claim, the employee is not automatically
entitled to a waiver. Before a waiver can be granted, the deciding
official must also determine that collection of the claim against
an employee would be against equity and good conscience and not in
the best interests of the United States. Factors to consider when
determining if collection of a claim against an employee would be
against equity and good conscience and not in the best interests of
the United States include, but are not limited to:
(1) Whether collection of the claim would cause serious
financial hardship to the employee from whom collection is
sought.
(2) Whether, because of the erroneous payment, the employee
either has relinquished a valuable right or changed positions for
the worse, regardless of the employee's financial
circumstances.
(a) To establish that a valuable right has been relinquished, it
must be shown that the right was, in fact, valuable; that it cannot
be regained; and that the action was based chiefly or solely on
reliance on the overpayment.
(b) To establish that the employee's position has changed for
the worse, it must be shown that the decision would not have been
made but for the overpayment, and that the decision resulted in a
loss.
(c) An example of a “detrimental reliance” would be a decision
to sign a lease for a more expensive apartment based chiefly or
solely upon reliance on an erroneous calculation of salary, and the
funds spent for rent cannot be recovered.
(3) The cost of collecting the claim equals or exceeds the
amount of the claim;
(4) The time elapsed between the erroneous payment and discovery
of the error and notification of the employee;
(5) Whether failure to make restitution would result in unfair
gain to the employee;
(6) Whether recovery of the claim would be unconscionable under
the circumstances.
d. The burden is on the employee to demonstrate that collection
of the claim would be against equity and good conscience and not in
the best interest of the United States.
10. Authorities
a. 5 U.S.C. § 5584, “Claims for Overpayment of Pay and
Allowances, and of Travel, Transportation and Relocation Expenses
and Allowances.”
b. 31 U.S.C. § 3711, “Collection and Compromise.”
c. 31 U.S.C. § 3716, “Administrative Offset.”
d. 31 U.S.C. § 3717, “Interest and Penalty on Claims.”
e. 5 CFR Part 550, subpart K, “Collection by Offset from
Indebted Government Employees.”
f. 31 CFR Part 5, subpart B, “Salary Offset.”
g. Determination with Respect to Transfer of Functions Pursuant
to Public Law 104-316, OMB, December 17, 1996.
11. Cancellation
TD 34-01, “Waiver of Claims for Erroneous Payments,” dated
October 25, 1995, is superseded.
12. Office of Primary Interest
Office of Accounting and Internal Control.