- prev |
- next
31 CFR 5, Appendix A to Part 5 - Treasury Directive 34-01-Waiving Claims Against Treasury Employees for Erroneous Payments
prev | next
Pt. 5, App. 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.
Title 31 published on 2012-07-01
no entries appear in the Federal Register after this date.
This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.
This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].
It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.
