June 30, 2017

SARAH HERRIN v. U.S. DEPARTMENT OF VETERANS AFFAIRS

P.S. Docket No. VA 17-48

APPEARANCE FOR PETITIONER
Sarah Herrin

APPEARANCE FOR RESPONDENT
Kelly J. Burns, Esq.
Department of Veterans Affairs

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

The Department of Veterans Affairs (VA) seeks to collect two debts from Sarah Herrin, one for a salary overpayment and one for the prorated share of a uniform allowance.¹  The VA has proved the existence and amount of the debts, and Ms. Herrin has not proved any alleviating facts or circumstances excusing or reducing the debt.  The Petition is therefore denied.

FINDINGS OF FACT

1. Ms. Herrin worked for the VA as a dental assistant from November 29, 2015, through May 18, 2016, when she resigned (VA Exhs. 12–13).
2. As a dental assistant, Ms. Herrin was required to wear a specific uniform (VA Exh. 3 at 6–7).  Per its uniform allowance policy, the VA paid Ms. Herrin $400 shortly after she started to cover her uniform costs for her first year (VA Exh. 4).  The uniform policy also provided that employees had to repay an initial uniform allowance on a prorated basis if they resigned less than one year after receiving the allowance (VA Exh. 3 at 5).
3. In addition to the uniform allowance, Ms. Herrin also received uniforms issued by the medical facility where she worked (Pet. Exh. 1 at 20–21).
4. As part of her out-processing on May 18, 2016, Ms. Herrin took a VA Form 3248 (Employee’s Clearance from Indebtedness) to various offices at the facility where she worked.  The form was initialed by VA employees at those offices confirming that Ms. Herrin did not have any outstanding property or debts.  More specifically, the form was initialed by a linen room employee who confirmed that Ms. Herrin did not have any outstanding lab coats, uniforms, or scrubs.  (Pet. Exh. 1 at 26–27).
5. The form included a Certification block, which provided in part, “This certifies that the above employee is not indebted to the Government except as noted above.”  Immediately below the Certification block, the form was signed on May 18, 2016, by both Ms. Herrin and the VA’s approving official.  (Pet. Exh. 1 at 26).
6. Even though Ms. Herrin had resigned on May 18, the VA paid her $890.80 for 40 hours of work in June 2016 (VA Exh. 6; Pet. Exh. 1 at 8).
7. On August 12, 2016, the VA partially corrected the overpayment by recouping $374.50 from other federal agencies for taxes and benefits that it had paid on Ms. Herrin’s behalf.²  On the same date, the VA also paid Ms. Herrin for four hours of annual leave that she had earned but not used when she resigned.  The payment for the annual leave resulted in a gross payment of $89.80, and a net payment of $58.79.³ (VA Exh. 9).
8. After combining the recoupment credit and the net payment for annual leave, Ms. Herrin received a combined credit and payment of $433.29.  Of this amount, the VA applied $108.17 to the uniform allowance debt and $325.12 to the salary overpayment debt.  (VA Exh. 9).
9. On August 20, 2017, the Defense Finance and Accounting Service (DFAS), acting as the VA’s payroll agent, sent two letters to Ms. Herrin notifying her of the VA’s intention to collect two debts.  The first letter sought to collect a $199.99 debt for the uniform allowance.  After applying the $108.17 previously offset, DFAS asserted a right to collect a $91.82 balance on the debt.  (VA Exh. 7).  The second letter sought to collect a debt based on the $890.80 overpayment made in June 2016.  After applying the $325.12 previously offset, DFAS asserted a right to collect a $565.68 balance on the debt.  (VA Exh. 8).
10. On September 22, 2016, the VA notified Ms. Herrin’s health insurance provider that she had resigned as of May 18 and that the last effective date of her coverage was May 28, 2016—which was the last day of the pay period in which she resigned (Pet. Exh. 1 at 24).
11. After Ms. Herrin asked for a hearing under the Debt Collection Act (Pet. Exh. 1 at 18), the VA forwarded the matter to the Postal Service’s Judicial Officer Department for a decision.

DECISION

When an agency seeks to recover a salary overpayment, it bears the initial burden to prove that (1) it made the salary overpayment, (2) it properly calculated the amount of the overpayment, and (3) the employee was not entitled to the overpayment.  Skadsberg v. United States Postal Service, DCA Nos. 14-198, 14-200 (September 16, 2014).  If the VA meets that burden, the burden shifts to the employee to prove either an excuse sufficient to relieve the debt or that the amount of the debt is inaccurate.  Caroline Harrington, DCA No. 08-333 (May 13, 2009).
Here, the VA has met its initial burden.  As to the uniform allowance, the VA has proved, and Ms. Herrin does not dispute, that she received a $400 allowance (Finding 2).  Per the VA’s regulations, Ms. Herrin was required to repay a prorated share of the allowance because she did not work for a full year after receiving it (Finding 2).  As to the salary overpayment, the VA has also proved that it overpaid Ms. Herrin in June 2016 for hours she did not work—which again Ms. Herrin does not dispute (Finding 6).  Such an administrative error does not entitle Ms. Herrin, or any other employee, to keep a salary payment for hours she did not work.  John F. Breslin, DCA 13-357 (April 28, 2014).
Because the VA has met its initial burden, the burden shifts to Ms. Herrin to prove an excuse for the debt or an inaccuracy in the VA’s debt calculations.  As to the uniform allowance, Ms. Herrin asserts that she resigned after six months because other VA employees created a hostile work environment, and the agency did not take action to alleviate that situation.  According to Ms. Herrin, she would have worked for at least a full year—and thus been able to pay off the uniform allowance—but for the hostile work environment.  On that basis she seeks to be excused from repaying the debt.
Even if Ms. Herrin’s assertion that the VA created a hostile work environment could be used to excuse a debt under the Debt Collection Act, her argument in this case fails for a lack of proof.  In support of her argument, Ms. Herrin filed an unsworn brief describing the alleged hostile work environment.  Besides being unsworn, the brief does not provide any details of the events that created the allegedly hostile work environment or Ms. Herrin’s conversation with her supervisor about the problem.  The absence of both greater detail and other corroborating evidence undercuts the persuasive value of the unsworn brief.  Ms. Herrin also filed a sworn statement from a colleague describing a hostile work environment experienced by that colleague (Pet. Exh. 2).  That statement does not, however, have any persuasive value here because it says nothing about a hostile work environment experienced by Ms. Herrin.  As such, Ms. Herrin has not shown that she resigned because of a hostile work environment, and she is not entitled to relief from the uniform-allowance debt based on this argument.
Next, Ms. Herrin contends that she should be excused from the debt because the VA is bound by the out-processing form signed by both parties in May 2016.  While the out-processing form certainly shows that Ms. Herrin was not liable for any uniforms issued by the linen room (Findings 5, 6), that fact does not necessarily determine her liability for the uniform allowance.
The VA’s handbook describing the agency’s uniform policy sets out two ways by which the VA can provide uniforms to its employees: (1) it may either pay a uniform allowance, or (2) it may issue VA-owned uniforms (VA Exh. 3 at 4–5).  In this case, however, Ms. Herrin both received an allowance and was issued uniforms (Findings 2, 3).  As relevant to her argument, Ms. Herrin correctly asserts that she had in fact returned all the uniforms the VA issued her (Finding 4).  But in this case the VA is not seeking to collect a debt based on Ms. Herrin’s liability for VA-owned uniforms; it is seeking to collect a debt based on the initial uniform allowance.  Thus, although the linen room employee confirmed that Ms. Herrin had returned all the uniforms issued to her, that fact is not relevant to the debt at issue in this case.  Nothing on the out-processing form suggests that the linen room employee either knew anything about, or had the authority to waive, a debt related to the initial uniform allowance.  The signature of the linen room employee thus does not preclude the VA from pursuing a debt for the uniform allowance.
Of course, the out-processing form was also signed by an “approving official,” certifying that Ms. Herrin was not indebted to the VA (Finding 5).  This certification, however, cannot be read so broadly as to include all debts potentially owed by a departing employee.  The form generally lists routine items and tasks covered during employee out-processing.  For example, the out-processing procedures described on the form ensure that employees do not have any outstanding debts with the local canteen, have submitted all their outstanding travel claims, and have returned their agency issued credit card and ID badge.  The purpose of this form thus appears to be much more limited than suggested by Ms. Herrin.  Rather than relieving a departing employee from all potential liability to the VA, the form merely relieves the employee from liability for the specific items covered by the form.  The fact that the approving official signed the out-processing form does not relieve Ms. Herrin from the debt related to the uniform allowance—and it also does not relieve her from the debt created by the salary overpayment one month later.
In her initial hearing request, Ms. Herrin argued that she should not be responsible for any part of the debt related to payments the VA made on her behalf for health insurance in June 2016—presumably because she was no longer covered by a VA-issued policy (Pet. Exh. 2 at 19, 21).  Here again, Ms. Herrin is at least partially correct: she should not be responsible for erroneous payments the VA made for health insurance if she was no longer insured.  But even though this argument is essentially correct, Ms. Herrin is not entitled to relief.  Here, the VA actually recouped the payments it made on Ms. Herrin’s behalf (Finding 7).  It then properly credited her for the amounts of those payments when it adjusted her salary in August 2016 (Finding 8).  In short, the debt the VA is now seeking to recover does not include any amounts for health insurance payments, and Ms. Herrin’s argument does not provide any relief from the debt.
Finally, Ms. Herrin makes a general argument that she should not have to repay the debt because the salary overpayment was caused by the VA’s administrative timekeeping error.  Ms. Herrin is correct that the salary overpayment was not her fault and resulted from the VA’s error.  But those facts do not entitle Ms. Herrin to relief.  As noted above, employees may not keep salary overpayments they were not entitled to receive—even if they were otherwise blameless for an agency’s administrative error.  Breslin, DCA 13-357.

CONCLUSION AND ORDER

The VA paid Ms. Herrin a $400 uniform allowance.  Because Ms. Herrin only worked for six months, she must repay the $199.99 sought by the VA.  This balance has been reduced to $91.82 based on the $108.17 credit applied by the VA in August 2016.
The VA also overpaid Ms. Herrin by $890.80 in June 2016 for 40 hours she did not work.  The VA reduced the debt for that overpayment by $325.12 when it adjusted Ms. Herring’s salary in August 2016, leaving a balance of $565.68.
Accordingly, the VA may collect $91.82 for the debt related to the uniform allowance and $565.68 based on the salary overpayment.

Alan R. Caramella
Administrative Judge