BOARD DATE: 6 June 2017 DOCKET NUMBER: AR20160001335 BOARD VOTE: _________ _______ ________ GRANT FULL RELIEF ________ ________ ________ GRANT PARTIAL RELIEF ________ ________ ________ GRANT FORMAL HEARING ____x____ ___x_____ ___x____ DENY APPLICATION 2 Enclosures 1. Board Determination/Recommendation 2. Evidence and Consideration BOARD DATE: 6 June 2017 DOCKET NUMBER: AR20160001335 BOARD DETERMINATION/RECOMMENDATION: The evidence presented does not demonstrate the existence of a probable error or injustice. Therefore, the Board determined the overall merits of this case are insufficient as a basis for correction of the records of the individual concerned. ______________x___________ CHAIRPERSON I certify that herein is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in this case. BOARD DATE: 6 June 2017 DOCKET NUMBER: AR20160001335 THE BOARD CONSIDERED THE FOLLOWING EVIDENCE: 1. Application for correction of military records (with supporting documents provided, if any). 2. Military Personnel Records and advisory opinions (if any). THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE: 1. The applicant requests: a. remission of the debt for overpayment of basic pay and basic housing allowance (BAH) in the amount of $12,987.08 and b. reimbursement of all monies collected toward this debt to date. 2. The applicant states: a. He submitted a request for remission of indebtedness to the U.S. Army Human Resources Command (HRC) in the amount of $25,974.15, which was approved for $12,987.08 based on an injustice. He requests cancellation of the remaining debt and return of the funds since he already paid them. b. While he held the grade of first lieutenant/O-2 as an Army Medical Department (AMEDD) student recruiter, he was actually entitled to captain/O-3 pay in accordance with the National Defense Authorization Act for Fiscal Year 2008, Title IV, Subtitle C, section 524(c). He was paid at the O-3 rate for 2 of the 3 years he was on orders as an AMEDD student recruiter, at which point his chain of command informed him he was being overpaid and that a debt would be imposed. Despite going through both of the Defense Finance and Accounting Service (DFAS) and HRC remission processes, only half of the debt has been remitted to date. 3. The applicant provides: * memorandum from HRC, dated 30 October 2015 * memorandum from the Maryland Army National Guard (ARNG), dated 4 October 2015 * DA Form 2823 (Sworn Statement), dated 23 February 2014 * letter from DFAS, dated 28 June 2012 * letter from him to the Texas ARNG, dated 2 January 2012 * email CONSIDERATION OF EVIDENCE: 1. Having prior commissioned service in the Regular Army from 1 June 2002 to 30 June 2009, the applicant was appointed as a captain in the ARNG on 1 July 2009. He was reappointed from captain to first lieutenant in the ARNG on 20 August 2009. He entered active duty in an Active Guard Reserve status on 1 October 2009. 2. He provided a letter from DFAS, dated 26 June 2012, stating: a. He applied for waiver consideration of indebtedness in the amount of $25,974.15 resulting from the overpayment of BAH during the period 1 October 2009 to 15 September 2011 in conjunction with a reduction in pay grade from captain to first lieutenant when he transferred from the Active Component of the Army to the Texas ARNG in order to access as a medical student. He erroneously continued to receive basic pay and BAH at the captain rate of pay. The error was discovered in November 2009; however, it was not processed until September 2011, at which point a collection of the overpayments took place, resulting in a debt in his pay account in the amount of $25,974.15. DFAS verified the amounts of the debt computation equal the amount being requested for waiver. b. Administrative error or mistake on the part of the Government in making an erroneous payment is a factor for consideration in determining whether waiver is appropriate. However, the fact that an erroneous payment is solely the result of administrative error or mistake on the part of the Government is not, in and of itself, sufficient basis for granting a waiver. c. The applicant stated he became aware he was being overpaid when he noticed his pay seemed high and he checked his November 2009 leave and earnings statement and discovered he was still being paid as a captain. He immediately contacted his supervisor, but the overpayments of basic pay and BAH did not stop. He further stated he contacted his supervisor again in February 2010 because the issue remained unresolved. His supervisor asked him if he wanted him to try to resolve the overpayments and he told the supervisor it was "the right thing to do." Although the applicant's actions are commendable, DFAS has consistently held that where there is an unexplained increase in net pay, or an expected decrease does not materialize, a member so situated has a duty to notice and report any errors in pay. It is what is expected of a reasonably prudent person. In March 2010, his financial personnel sent him an Internet link to Title IV, Military Personnel Authorizations, Subtitle C, section 524, which appeared to justify continuing to receive pay at the O-3 rate. After reading this section, he stopped saving the overpayments and interpreted it to mean that he was receiving the correct pay after all. d. There are two problems with the applicant's interpretation of this section to mean that he was receiving the correct pay. The first is that this section only describes basic pay, not BAH, which should have indicated to him he was receiving the incorrect BAH rate. More importantly, however, is the line that reads "if the member remained in the former grade." His pay grade had changed from captain to first lieutenant; therefore, he did not remain in the former grade. This should have indicated to him that he did not fit the criteria described in this paragraph and therefore was being overpaid as he had suspected initially. Waiver is generally not appropriate in cases where a recipient questions a payment (which ultimately is determined to be erroneous) and is mistakenly advised by an appropriate official that the payment is proper, if, under the circumstances, the recipient knew or reasonably should have known that the advice was erroneous. e. DFAS denied the applicant's request for waiver of the indebtedness in the amount of $25,974.15. f. He was advised he could request a reconsideration of the decision in writing within 30 days of the date of the letter. 3. He was released from active duty on 30 September 2012 in the rank of first lieutenant. 4. He was honorably separated from the ARNG on 25 May 2013. He was reappointed as a captain in the ARNG on 26 May 2013. 5. He provided a rebuttal, via a sworn statement, to the denial decision by DFAS, dated 23 February 2014, wherein he stated: a. It was his intention to request reconsideration of the DFAS decision, but the decision letter arrived in the mail while he was on a month-long, out-of-state clinical rotation for medical school. He received the letter after the 30-day deadline imposed by DFAS. Despite submitting documentation to DFAS proving his whereabouts, DFAS did not grant him an extension or acknowledge his email. b. The main issue with the DFAS denial of his waiver of debt request is that it is based on a gross misinterpretation of the pertinent legislation. c. The DFAS letter focused on the following phrase: "if the officer remained in the former grade" and labeled it the most important reason for denial of his waiver. This phrase was extracted from section 524c and interpreted out of context. The way DFAS interpreted section 524c not only changes the intended meaning of the act, but inherently makes the entire act self-contradictory. d. According to the DFAS interpretation of the act, a prior-service medical student can be paid at his former grade and years of service if he remains at his former grade. In other words, he could have been paid as a captain if he remained as a captain. This is obviously not the intended meaning of section 524c. Firstly, there would be no point of passing legislation stating that captains are to be paid as captains and majors are to be paid as majors. Secondly, the section clearly states a medical student is to be appointed as a lieutenant. An officer will therefore never remain at their former rank, so it would not make sense to have a provision for those who remain at their former rank. e. The correct interpretation of section 524c can be paraphrased as follows: Since medical students are appointed to the grade of O-1, in order to prevent a reduction in pay for those with prior service, medical students can be paid basic pay based on their former grade if it is greater than the pay grade for O-1. For example, as in his case, a medical student appointed as a lieutenant, who is a former captain, will be entitled to the basic pay of a captain because basic pay for a captain is more than basic pay for a lieutenant. However, a medical student appointed as a lieutenant, who is a former private, will be paid as a lieutenant because basic pay for his former pay grade is less than basic pay for a lieutenant. f. The lesser point that DFAS made is that he should have noticed section 524c specifically mentions basic pay but does not mention BAH. He therefore should have realized the excess pay he was receiving was erroneous because it included BAH at his former rank. He did not notice this detail until he read the denial of his waiver from DFAS; however, it was not due to negligence on his part or a lack of attention to detail that it was overlooked. In his case, having been overpaid for months, having repeatedly raised the issue with his chain of command, and then having been presented with a perfectly plausible explanation as to why he was being paid at a former rank and why he was entitled to that pay, the difference between pay and basic pay was very easy to overlook, especially considering that he had no experience as a finance officer. He therefore feels it would be an injustice for DFAS to recoup the additional BAH. g. Even if he is held responsible for the additional BAH he received in 2010 and 2011, he is clearly entitled to the additional basic pay according to section 524c of the Defense Authorization Act for Fiscal Year 2008. Furthermore, he is owed money from DFAS, since he was paid as a lieutenant in Fiscal Year 2012 and he should have received captain's basic pay according to section 524c. In summary, he is requesting cancellation of the debt, refund of all money collected toward this debt to date, and payment of the money he is owed for the difference between basic pay for first lieutenants and captains for Fiscal Year 2012. 6. He provided a letter from the Chief Medical Provider, Office of the State Surgeon, Maryland ARNG, dated 4 October 2015, stating: a. He has reviewed the applicant's application for remission or cancellation of indebtedness and all the evidence, and recommends remission of the debt. b. The wording of the National Defense Authorization Action for Fiscal Year 2008 indicates the applicant is entitled to the pay he received at the grade of O-3 while serving on active duty for operational support orders as an AMEDD student recruiter. It also appears he was entitled to receive pay at the grade of O-3 for the full 3 years while serving on active duty for operational support orders, not just for the first 2 years. c. The applicant made a very reasonable effort to correct what he thought to be a pay discrepancy at the time. In light of reviewing the National Defense Authorization Action for Fiscal Year 2008, it is clear there was no discrepancy and he had no responsibility to continue to pursue corrective action since there was no corrective action to be taken. The fact that the above legislation was later not considered by his chain of command is not something he should rightly be penalized for. 7. He also provided a letter from HRC, dated 30 October 2015, stating: a. His application for remission or cancellation of indebtedness in the amount of $25,974.15 has been reviewed and is partially approved for $12,987.08. The review determined that no grounds exist to remit or cancel the remaining portion based on hardship and/or injustice. b. He was advised that he could apply to the Army Board for Correction of Military Records for further review. 8. He was promoted to major/O-4 effective 10 March 2016. REFERENCES: Section 524 (Treatment of Prior Active Service of Members in Uniformed Medical Accession Programs) of the National Defense Authorization Act for Fiscal Year 2008 states that if a member of the Uniformed Services selected to be a student has prior active service in a pay grade and with years of service credited for pay that would entitle the member, if the member remained in the former grade, to a rate of basic pay in excess of the rate of basic pay for regular officers in the grade of second lieutenant or ensign, the member shall be paid basic pay based on the former grade and years of service credited for pay. DISCUSSION: 1. The applicant incurred a debt in the amount of $25,974.15 for overpayment of basic pay and BAH during the period 1 October 2009 to 15 September 2011 in conjunction with a reduction in pay grade from captain to first lieutenant when he transferred from the Active Component of the Army to the Texas ARNG in order to access as a medical student. 2. He contends he was entitled to captain pay in accordance with the National Defense Authorization Act for Fiscal Year 2008 while he held the rank of first lieutenant as an AMEDD student recruiter. 3. His request for remission or cancellation of the debt was partially approved by HRC for $12,987.08 in 2015 for the portion related to basic pay. The remaining debt in the amount of $ 12,987.07 pertains to overpayment of BAH at the captain rate. //NOTHING FOLLOWS// ABCMR Record of Proceedings AR20150000953 Enclosure 1 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS ABCMR Record of Proceedings (cont) AR20160001335 2 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS Enclosure 1 ABCMR Record of Proceedings (cont) AR20160001335 6 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS Enclosure 2