In the Matter of the Petition By                               )
                                                                               )
                                                                               )
KAREN M. ENNIS                                                    )
5165 Valk Street                                                    )
P. O. Box 741                                                         )
                                                                               )
            at                                                                )
                                                                               )
Kalamazoo, MI 49005-0741                                    )  P. S. Docket No. DCA-33

APPEARANCE FOR PETITIONER:                           James A. Collins
                                                                               NAPS Representative
                                                                               Court Station Post Office
                                                                               410 W. Michigan Avenue
                                                                               Kalamazoo, MI 49087-9995

APPEARANCE FOR RESPONDENT:                        Charles McAtee
                                                                               Labor Relations Representative
                                                                               1121 Miller Road
                                                                               Kalamazoo, MI 49001-9994

FINAL DECISION UNDER DEBT COLLECTION ACT OF 1982

By timely filed petition dated June 26, 1989, Petitioner Ennis requested an oral hearing on a Notice of Involuntary Administrative Salary Offsets Under the Debt Collection Act, dated June 21,1989. The notice advised Petitioner that she is indebted to the Postal Service in the amount of $1,602.09 for overpayment of salary during portions of 1985 and 1986.

A hearing was held in Kalamazoo, Michigan on August 10, 1989. Witnesses called by the Postal Service were Cynthia M. Carlson, a personnel assistant, and Arlene Plamondon, manager, accounting and budget, Management Sectional Center, Kalamazoo, MI. Witnesses called for petitioner were Nora Peck, administrative clerk, finance, Charles Tandy, former supervisor of personnel at the Kalamazoo Post Office, now retired, and petitioner Karen Ennis. The parties filed numerous documents prior to the hearing and several more at the hearing. This decision is based on the relevant documentation filed as well as the testimony of the witnesses.

FINDINGS OF FACT

1. Petitioner Karen M. Ennis is a supervisor at the Court Station Post Office in Kalamazoo, Michigan.

2. On September 1, 1984, petitioner was promoted from PS-5 to EAS Level 15, Step 3, Supervisor, Delivery and Collections. Following her promotion, she was paid at step 3 of EAS-15 from pay period 19-84 through pay period 18-85 and at step 4 from pay period 19-85 through pay period 8-86.

3. The first PS-50 (Notification of Personnel Action) furnished to Ms. Ennis reflecting her 9/1/84 promotion showed that she was promoted from P-05/0 to E-15/03 with base salary of $26,123. Pay stubs placed in evidence show that Ms. Ennis did not receive pay at that rate, however. Instead, from pay period 19/84 through 8/85 she was paid at the rate of $24,431.

4. When she discovered that her pay checks following promotion were less than they should have been according to the PS-50, Ms. Ennis promptly complained to the Kalamazoo Post Office personnel office that she was being underpaid, but was assured that her pay was correct. As her pay checks continued to be less than they should have been according to the first PS-50 and later ones reflecting COLA's and management increases, she made several other inquiries of the personnel office concerning her apparent underpayment but always received assurance that she was being paid correctly.

5. Beginning on 10/4/85 a series of PS-50's were issued showing downward corrections of Ms. Ennis' salary due to her having, through administrative error, been placed in E-15/03 instead of 15/02 at the time of her promotion on 9/1/84 and in 15/04 instead of 15/03 for a step increase on 8/31/85.

6. The repeated changes at various levels of the Postal Service, from local post offices to the PDC, in the fixing of Ms. Ennis' promotion pay corroborate Charles Tandy's testimony that misunderstanding concerning the then recent change in the formula for fixing promotion pay was creating chaos throughout the region with respect to PS-50's involving such pay.

7. Finally, on 12/25/86, the Minneapolis Postal Data Center issued a PS Form 1903-DZ notifying the MSC Manager that Ms. Ennis owed the Postal Service $1,602.09 by reason of overpayment of salary resulting from erroneous pay adjustments during paying periods 19-84 through 18-85 and 19-85 through 08-86.

8. After receiving from the MSC a copy of the Form 1903-DZ and notification that she should pay the PDC the sum of $1,602.09, Ms. Ennis, on 2/20/87, initiated a request for waiver of the PDC claim for erroneous payment of pay. In the request she stated that she had had numerous personal consultations with the Kalamazoo MSC Personnel Office regarding inaccurate pay. She failed to state the fact that these consultations involved inquiries by her why she was being underpaid, not overpaid. As noted in paragraphs 3 and 4, above, comparison of her pay stubs with the pertinent PS 50's showed she was being underpaid.

9. Waiver was recommended by the MSC Manager/Postmaster, Kalamazoo and by the Division, on a finding that Ms. Ennis met the criteria for waiver stated in Employee and Labor Relations Manual at Section 437.6. The request for waiver was denied by the Director, Minneapolis PDC on November 10, 1987, who determined, erroneously, that Ms. Ennis was aware that she was being overpaid, that her consultations with the MSC Personnel Office concerned overpayment, and that, therefore, she could not in good conscience have spent the overpayment.

10. Ms. Ennis promptly appealed the refusal of her request waiver pointing out that she had not been aware of overpayment that her consultations with MSC personnel had involved her belief that she was being underpaid. The Regional Manager, Accounting and Systems Compliance, denied the appeal on November 27, 1987.

11. On August 12, 1988, Ms. Ennis renewed her request for waiver pointing out that she had acted all along in good faith, having complained to the MSC that she was being underpaid and having been told that she was being correctly paid. The MSC denied the new request, citing the earlier disallowance of a waiver request by the Region.

12. Ms. Ennis filed on November 30, 1988, a premature petition for a hearing under the Debt Collection Act. The matter was placed in suspense pending her receipt of a Notice of Involuntary Salary Offsets under that act. On June 21, 1989, such a notice was issued and on July 6, 1989, Ms. Ennis filed a renewed petition for a hearing.

13. The evidence filed both before and at the hearing in Kalamazoo shows that due to administrative error Ms. Ennis was overpaid the sum of $1,602.09 during the pay periods above mentioned. Petitioner did not contest the method of computation of that amount.

CONCLUSIONS AND DECISION

Petitioner does not seriously contest the amount of the indebtedness demanded by the Postal Service although, through her representative, she has expressed concern over the numerous and inconsistent PS-50 corrections issued concerning her pay during the pay periods involved. Based on all the evidence I conclude that Petitioner is indebted to the Postal Service in the amount of $1,602.09.

Petitioner requests that she be founded entitled to a waiver of the indebtedness because she has met all the conditions for waiver set forth in E&LR §437.6. The E&LR Manual establishes a procedure entirely separate from that under the Debt Collection Act for waiver of claims for erroneous payment of pay and places final decision authority on the waiver requests of Regional employees in the Regional Director of Finance. It is noted that the final decision on Ms. Ennis' request was issued by a subordinate of the Regional Director of Finance. Neither the E&LR Manual nor the Debt Collection Act and implementing Postal Service regulations vests any authority with respect to waiver in hearing officers acting under the Debt Collection Act. Therefore, I conclude that I have no authority to act on Petitioner's request for waiver of the indebtedness. However, I think it appropriate to note that the premise of the denial of waiver by the PDC, affirmed by the Regional Manager, was erroneous, i.e., that Ms. Ennis was aware that she was being overpaid, that she reported the overpayment and that, therefore, she could not in good conscience have spent the overpayment. The uncontroverted evidence in this proceeding is that Ms. Ennis thought she was being underpaid and that underpayment, rather than overpayment, was the subject of her discussions with MSC personnel who advised her that she was being paid correctly. Ms. Ennis' appeal from the PDC denial of waiver made this point very clearly but no mention of it is made in the Regional Manager's affirmance of the PDC denial. I agree with Petitioner's assertion that her claim met all the conditions for the granting of a waiver under §437.6.

Petitioner, in her letter of July 27, 1989, has claimed and established severe financial hardship. Under all the circumstances, I find Petitioner's proposal for a change in the terms of the debt repayment schedule reasonable and justified. Accordingly, deductions of approximately $31.00 from each paycheck should be made until the debt is collected. This should take approximately 52 pay periods.

Quentin E. Grant
Chief Administrative Law Judge