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TITLE 34--EDUCATION
Part 32-- Salary Offset to Recover Overpayments of Pay or Allowances
from Department of Education Employees
Sec. 32.1 Scope.
(a) The Secretary establishes the standards and
procedures in this
part that apply to the deductions through offset from disposable pay of
a current or former employee of the Department of Education to recover
overpayments of pay or allowances.
(b) This part does not apply to--
(1) Recovery through offset of an indebtedness to
the United States
by an employee of the Department under a program administered by the
Secretary of Education covered under 34 CFR part 31;
(2) The offset of an indebtedness to the United
States by a Federal
employee to satisfy a judgment obtained by the United States against
that employee in a court of the United States;
(3) The offset of any payment to an employee of the
Department of
Education which is expressly allowed under statutes other than 5 U.S.C.
5514, except as to offsets of severance pay and/or lump sum annual
leave
payments as authorized under 31 U.S.C. 3716;
(4) Offsets under 34 CFR part 30; or
(5) An employee election of coverage or of a change
of coverage
under a Federal benefits program which requires periodic deductions
from
pay if the amount to be recovered was accumulated over four pay periods
or less.
Sec. 32.2 Definitions.
The following definitions apply to this part:
Department means the Department of Education.
Disposable pay means the amount that remains from an
employee's pay
after required deductions for Federal, State, and local income taxes;
Social Security taxes, including Medicare taxes; Federal retirement
programs; premiums for health and basic life insurance benefits; and
such other deductions that are required by law to be withheld.
Employee means a current or former employee of the
Department.
Former employee means a former employee of the
Department who is
entitled to pay from the Department or another agency.
Pay means basic pay, special pay, incentive pay,
retired pay,
retainer pay, or, in the case of an individual not entitled to basic
pay, other authorized pay, including severance pay and/or lump sum
payments for accrued annual leave.
Paying agency means a Federal agency currently
employing an
individual and authorizing the payment of his or her current pay.
Secretary means the Secretary of the Department of
Education or an
official or employee of the Department acting for the Secretary under a
delegation of authority.
Sec. 32.3 Pre-offset notice.
At least 30 days before initiating a deduction from
the disposable
pay of an employee to recover an overpayment of pay or allowances, the
Secretary sends a written notice to the employee stating--
(a) The origin, nature and amount of the overpayment;
(b) How interest is charged and administrative costs
and penalties
will be assessed, unless excused under 31 U.S.C. 3716;
(c) A demand for repayment, providing for an
opportunity for the
employee to enter into a written repayment agreement with the
Department;
(d) Where a waiver of repayment is authorized by
law, the employee's
right to request a waiver;
(e) The Department's intention to deduct 15 percent
of the
employee's disposable pay, or a specified amount if the disposable pay
is severance pay and/or a lump sum annual leave payment, to recover the
overpayment if a waiver is not granted by the Secretary and the
employee
fails to repay the overpayment or enter into a written repayment
agreement;
(f) The amount, frequency, approximate beginning
date and duration
of the intended deduction;
(g) If Government records on which the determination
of overpayment
are not attached, how those records will be made available to the
employee for inspection and copying;
(h) The employee's right to request a pre-offset
hearing concerning
the existence or amount of the overpayment or an involuntary repayment
schedule;
(i) The applicable hearing procedures and
requirements, including a
statement that a timely petition for hearing will stay commencement of
collection proceedings and that a final decision on the hearing will be
issued not later than 60 days after the hearing petition is filed,
unless a delay is requested and granted;
(j) That any knowingly false or frivolous
statements,
representations or evidence may subject the employee to applicable
disciplinary procedures, civil or criminal penalties; and
(k) That where amounts paid or deducted are later
waived or found
not owed, unless otherwise provided by law, they will be promptly
refunded to the employee.
Sec. 32.4 Employee response.
(a) Voluntary repayment agreement. Within 7 days of
receipt of the
written notice under Sec. 32.3, the employee may submit a request to
the
Secretary to arrange for a voluntary repayment schedule. To arrange for
a voluntary repayment schedule, the employee shall submit a financial
statement and sign a written repayment agreement approved by the
Secretary. An employee who arranges for a voluntary repayment schedule
may nonetheless request a waiver of the overpayment under paragraph (b)
of this section.
(b) Waiver. An employee seeking a waiver of
collection of the debt
that is authorized by law must request the waiver in writing to the
Secretary within 10 days of receipt of the written notice under
Sec. 32.3. The employee must state why he or she believes a waiver
should be granted.
(c) Involuntary repayment schedule. If the employee
claims that the
amount of the involuntary deduction will cause extreme financial
hardship and should be reduced, he or she must submit a written
explanation and a financial statement signed under oath or affirmation
to the Secretary within 10 days of receipt of the written notice under
Sec. 32.3. An employee who fails to submit this financial information
in
a timely manner waives the right to object to the involuntary repayment
schedule at a hearing under Sec. 32.5. The Secretary notifies the
employee, in writing, whether the Secretary will reduce the rate of the
involuntary deduction.
Sec. 32.5 Pre-offset hearing--general.
(a) An employee who wishes a review of the existence
or amount of
the overpayment or an involuntary repayment schedule may request a pre-
offset hearing. The pre-offset hearing does not review:
(1) The denial of a waiver of repayment under 5
U.S.C. 5584;
(2) The involuntary repayment schedule or financial
hardship caused
by the amount of the involuntary deduction from the employee's
disposable pay, unless the employee has submitted the financial
statement and written explanation required under Sec. 32.4(c); and
(3) The determination under paragraph (b) of this
section that the
pre-offset hearing is on the written submissions.
(b) Unless the Secretary determines that a matter
reviewable under
paragraph (a) of this section turns on an issue of credibility or
veracity or cannot be resolved by a review of the documentary evidence,
the pre-offset hearing is on the written submissions.
(c) A pre-offset hearing is based on the written
submissions for
overpayments arising from:
(1) A termination of a temporary promotion;
(2) A cash award;
(3) An erroneous salary rate;
(4) Premature granting of a within-grade increase;
(5) A lump sum payment for annual leave;
(6) Unauthorized appointment to a position;
(7) An error on time and attendance records; or
(8) Other circumstances where the Secretary
determines that an oral
hearing is not required.
(d) The hearing is conducted by a hearing official
who is not an
employee of the Department or under the supervision or control of the
Secretary.
(e) Formal discovery between the parties is not
provided.
Sec. 32.6 Request for a pre-offset hearing.
(a) Except for an employee who has requested a
waiver of collection
of the debt under Sec. 32.4(b), an employee who wishes a pre-offset
hearing must request the hearing within 15 days of receipt of the
written notice given under Sec. 32.3. The Secretary waives the 15-day
requirement if the employee shows that the delay was because of
circumstances beyond his or her control or because of failure to
receive
notice and lack of knowledge of the time limit.
(b) An employee who has requested a waiver under
Sec. 32.4(b) may
request a hearing within 10 days of receipt of a determination by the
Secretary denying a waiver.
(c) The request for a hearing must:
(1) Be in writing;
(2) State why the employee:
(i) Contests the existence or amount of the
overpayment; or
(ii) Claims that the involuntary repayment schedule
will cause
extreme financial hardship;
(3) Include all documents on which the employee is
relying, other
than those provided by the Secretary under Sec. 32.3; any document
which
is a statement of an individual must be in the form of an affidavit;
and
(4) Be submitted to the designated hearing official with a copy to
the Secretary.
(d) If the employee timely requests a pre-offset
hearing or the
timelines are waived under paragraph (a) of this section, the Secretary:
(1) Notifies the employee whether the employee may
elect an oral
hearing; and
(2) Provides the hearing official with a copy of all
records on
which the determination of the overpayment and any involuntary
repayment
schedule are based.
(e) An employee who has been given the opportunity
to elect an oral
hearing and who does elect an oral hearing must notify the hearing
official and the Secretary of his or her election in writing within 7
days of receipt of the notice under paragraph (d)(1) of this section
and
must identify all proposed witnesses and all facts and evidence about
which they will testify.
(f) Where an employee requests an oral hearing, the
hearing official
notifies the Secretary and the employee of the date, time, and location
of the hearing. However:
(1) The employee subsequently may elect to have the
hearing based
only on the written submissions by notifying the hearing official and
the Secretary at least 3 calendar days before the date of the oral
hearing. The hearing official may waive the 3-day requirement for good
cause when the employee notifies the hearing official before the date
of
the hearing; and
(2) The request for a hearing of an employee who
fails to appear at
the oral hearing must be dismissed and the Secretary's decision
affirmed.
Sec. 32.7 Pre-offset oral hearing.
(a) Oral hearings are informal in nature. The
Secretary and the
employee, through their representatives, and by reference to the
documentation submitted, explain their case. The employee may testify
on
his or her own behalf, subject to cross examination. Other witnesses
may
be called to testify only where the hearing official determines that
their testimony is relevant and not redundant.
(b) The hearing official shall:
(1) Conduct a fair and impartial hearing; and
(2) Preside over the course of the hearing, maintain
decorum, and
avoid delay in the disposition of the hearing.
(c) The employee may represent himself or herself or
may be
represented by another person at the hearing. The employee may not be
represented by a person whose representation creates an actual or
apparent conflict of interest.
(d) Oral hearings are open to the public. However,
the hearing
official may close all or any portion of the hearing where to do so is
in the best interests of the employee or the public.
(e) Oral hearings may be conducted by conference
call--
(1) If the employee is located in a city outside the
Washington, DC
Metropolitan area;
(2) At the request of the employee; or
(3) At the discretion of the hearing official.
Sec. 32.8 Pre-offset hearing on the written submissions.
If a hearing is to be held on the written
submissions, the hearing
official reviews the records and responses submitted by the Secretary
and the employee under Sec. 32.6.
Sec. 32.9 Written decision.
(a) The hearing official issues a written decision
stating the facts
supporting the nature and origin of the debt and the hearing official's
analysis, findings and conclusions as to the amount of the debt and the
repayment schedule within 60 days of filing of the employee's request
for a pre-offset hearing, unless the employee requests, and the hearing
official grants, a delay in the proceedings.
(b) The hearing official decides whether the
Secretary's
determination of the existence and the amount of the overpayment or the
extreme financial hardship caused by the involuntary repayment schedule
is clearly erroneous. A determination is clearly erroneous if although
there is evidence to support the determination, the hearing official,
considering the record as a whole, is left with a definite and firm
conviction that a mistake was made.
(c) In making the decision, the hearing official is
governed by
applicable Federal statutes, rules and regulations.
(d) The hearing official decides the issue of
extreme financial
hardship caused by the involuntary repayment schedule only where the
employee has submitted the financial statement and written explanation
required under Sec. 32.4(c). Where the hearing official determines that
the involuntary repayment schedule creates extreme financial hardship,
he or she must establish a schedule that alleviates the financial
hardship but may not reduce the involuntary repayment schedule to a
deduction of zero percent.
Sec. 32.10 Deductions process.
(a) Debts must be collected in one lump sum where
possible. If the
employee does not agree to a lump sum that exceeds 15 percent of
disposable pay, the debt must be collected in installment deductions at
officially established pay intervals in the amount established under:
(1) A voluntary repayment agreement;
(2) An involuntary repayment schedule where no
hearing is requested;
or
(3) The schedule established under the written
hearing decision.
(b) Installment deductions must be made over a
period not greater
than the anticipated period of employment, except as provided under
paragraph (d) of this section. If possible, the installment payment
must
be sufficient in size and frequency to liquidate the debt in, at most,
three years. Installment payments of less than $25 may be accepted only
in the most unusual circumstances.
(c) Deductions must begin:
(1) After the employee has entered a voluntary
repayment schedule;
(2) If a waiver is requested under Sec. 32.4(b),
after the employee
has been denied a waiver by the Secretary; or
(3) If a hearing is requested under Sec. 32.5, after
a written
decision.
(d) If the employee retires or resigns or his or her
employment ends
before collection of the debt is completed, the amount necessary to
liquidate the debt must be offset from subsequent payments of any
nature
(for example, final salary payment and/or lump sum annual leave
payment)
due the employee on the date of separation. If the debt cannot be
liquidated by offset from any such final payment due the employee on
the
date of separation, the debt must be liquidated by administrative
offset
pursuant to 31 U.S.C. 3716 from later payments of any kind due the
employee, where appropriate. After the Secretary has complied with the
procedures in this part, the Secretary may refer the debt to a paying
agency for collection by offset under 5 CFR 550.1108.
(e) Interest, penalties and administrative costs on
debts collected
under this part must be assessed, in accordance with the provisions of
4
CFR 102.13.
(f) An employee's payment, whether voluntary or
involuntary, of all
or any portion of an alleged debt collected pursuant to this part may
not be construed as a waiver of any rights which the employee may have
under this part or any other provision of law, except as otherwise
provided by law.
(g) Amounts paid or deducted pursuant to this part
by an employee
for a debt that is waived or otherwise found not owing to the United
States or which the Secretary is ordered to refund must be promptly
refunded to the employee.
(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)
31 CFR Parts 900-904 Federal Claims Collection Standards
Please go for the full text of these regulations.
The Debt Collection Act of 1982, the Federal Claims Collection Act of 1966,
P.L. 89-508 (July 19, 1966), Chief Financial
Officers Act of 1990,
P.L. 101-576, (January 23, 1990), The Privacy Act of 1974,
as amended,
may all be found on the GPO website. To review these statutes, please go
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