SUBJECT:

Suzanne R. Bergman,

Petitioner,

Department of Health & Human Service,

Respondent.

DECISION

Petitioner, Suzanne R. Bergman, has no right to a hearing or review by a hearing officer as she is not an employee of the federal government and the agency has not attempted collection of Petitioner's debt by administrative offset. Accordingly, I have no jurisdiction and this matter must be dismissed.

I. PROCEDURAL HISTORY

Petitioner was advised by letter dated April 29, 2004, from Phyllis A. Buckley, Manager, Operations and Technical Support Group, Program Support Center (PSC), Human Resources Service, Division of Payroll, Department of Health & Human Services (HHS), that an audit of her record showed her indebted to HHS for the gross amount of $357.83, net amount $307.78, based upon an overpayment that occurred during pay periods ending December 27, 2003 and January 10, 2004. A salary overpayment worksheet attached to the letter shows Petitioner was overpaid for 29 hours for the pay period that ended December 27, 2003 and for 3.5 hours for the pay period that ended January 10, 2004. A personnel action form (Standard Form 52) attached to the letter reflects that Petitioner left government employment effective December 17, 2003. The April 29, 2004 PSC letter advised Petitioner that she could arrange to make installment payments but did not advise Petitioner that there would be any administrative offset. The letter advised Petitioner that she could submit a request for review by a hearing officer within 15 days of the date of the notice.

A hearing/waiver request form dated May 14, 2004, shows that Petitioner marked both the line requesting hearing officer review and the line requesting waiver of overpayment. Petitioner also submitted a letter dated May 14, 2004, in which she requests a hearing. By letter dated October 8, 2004, Robert Hosenfeld, Director of Human Resources, National Institutes of Health, HHS, advised Petitioner that her request for waiver of the overpayment was denied. Mr. Hosenfeld advised Petitioner that she could make a lump-sum payment or arrange for installment payments, but did not assert that recovery of the overpayment would be made by administrative offset. Mr. Hosenfeld also advised Petitioner that she could request reconsideration by the HHS Office of General Counsel (OGC). Petitioner requested reconsideration by letter dated October 24, 2004. Mr. Hosenfeld forwarded Petitioner's request for reconsideration to the OGC, HHS, by letter dated November 24, 2004. By Memorandum dated January 13, 2005, Robin J. Green, OGC, HHS, forwarded the foregoing materials to the Departmental Appeals Board for action on Petitioner's request for hearing. On February 25, 2005, the case was assigned to me for review and decision pursuant to 45 C.F.R. Part 30.

II. ANALYSIS

Congress, through the Debt Collection Act of 1966 and 1982 and the Debt Collection Improvement Act of 1996 (Pub. L. 104-134, Apr. 26, 1996), mandated that executive, judicial, and legislative agencies collect claims of the United States. 31 U.S.C. § 3711(a). The heads of the executive agencies are required to prescribe debt collection regulations consistent with the standards established by the Attorney General and the Secretary of the Treasury. 31 U.S.C. § 3711(d). ⁽¹⁾ Congress did not specify procedures for agency heads to follow in determining the existence of a valid debt but did specify the minimum procedures required to be followed if the agency head determined to report a valid and overdue debt to a credit reporting agency. No right to a hearing is provided by the Debt Collection Acts.

The standards promulgated by the Attorney General and Secretary of the Treasury pursuant to the Debt Collection Improvement Act, 31 U.S.C. § 3711(d)(2), are found at 31 C.F.R. Parts 900 to 904 (2003) and are referred to as the Federal Claims Collection Standards. A "debt" owed to the government or "claim" of the government are synonymous under the standards and are defined as "an amount of money, funds, or property that has been determined by an agency official to be due the United States from any person, organization, or entity, except another Federal agency." 31 C.F.R. § 900.2(a). The standards specify that they are not the exclusive means for claims collection, but the procedures of other statutes and regulations for particular types of claims apply to those claims. 31 C.F.R. § 900.4. The standards prescribe no specific administrative process to be followed by agency heads (31 C.F.R. § 900.7), except that a written demand for payment of the debt must be made. 31 C.F.R. § 901.2. The contents of the written demand are specified at 31 C.F.R. § 901.2(b) which provides that the letter will inform the debtor of:

(1) The basis for the indebtedness and the rights, if any, the debtor may have to seek review within the agency;

(2) The applicable standards for imposing any interest, penalties, or administrative costs;

(3) The date by which payment should be made to avoid late charges . . . .

It is specifically noted that employees of agencies who administer the Social Security Act are not exempt from the application of the Federal Claims Collection Standards. 31 C.F.R. § 901.12(b). No right to a hearing is provided by the Federal Claims Collection Standards.

In this case, the debt has been declared by an agency official of HHS. Accordingly, regulations of the Secretary of HHS regarding debt collection are applicable. The Secretary's regulations are found at 45 C.F.R. Part 30. The provisions of 45 C.F.R. Part 30 apply unless a statute or regulation applicable to a specific situation applies and provides for a different procedure. 45 C.F.R. § 30.4. The Secretary has provided that his failure to comply with the procedures specified in his debt collection regulations is no defense to a debtor. 45 C.F.R. § 30.10.

Section 30.11 of 45 C.F.R. provides, generally, that the Secretary will take aggressive action to track-down debtors and collect debts owed the government. Section 30.12(a) specifies the contents of the first notice or demand for payment to the debtor, including:

(1) The amount and nature of the debt;

(2) The date payment is due, which will generally be 30 days from the date the notice was mailed; and

(3) The assessment under § 30.13 of interest from the date the notice was mailed, and full administrative costs if payment is not received within the 30 days.

When appropriate the Secretary will also inform the debtor in writing of:

(1) His or her right to dispute the debt or request a waiver of the debt, citing the applicable review or waiver authority, the conditions for review or waiver, and the effect of the review or waiver request on collection of the debt, interest, charges and late payment penalties (see § 30.14);

(2) The office, address and telephone number that the debtor should contact to discuss repayment, reconsideration or waiver of the debt;

(3) The proposed sanctions if the debt is overdue, including assessment of late payment penalties under 30.13 (if the debt is more than 90 days overdue) or referral of the debt to a credit reporting agency under § 30.17, or to a collection agency under § 30.18. (See also § 30.5).

The regulations provide that a debtor who disputes a debt must promptly provide supporting evidence. 45 C.F.R. § 30.11(e). Except in the case of administrative offset, the Secretary's regulations provide no right to a hearing or review by a hearing officer or administrative law judge. Administrative offset is the process of satisfying a debt due the government by withholding money due payable from HHS to a debtor or held by HHS for the benefit of the debtor. 45 C.F.R. § 30.15(b). Administrative offset may only be used in the limited circumstances specified at 45 C.F.R. § 30.15(a). Administrative offset may be used to collect debts owed by employees of HHS, but, in such cases, the regulation recognizes that the agency must also comply with the requirements of 5 U.S.C. § 5514, which specifically controls the collection of debt by an agency from its employees. Section 30.15 of 45 C.F.R. provides for notice and a review or hearing by a hearing officer, who may be an administrative law judge, before administrative offset may be effected in employee and other cases. Title 5 U.S.C. § 5514 also requires notice and a hearing before an agency head may direct withholding to recover a debt from an employee's pay.

In this case, the evidence clearly shows that Petitioner has not been a government employee since December 17, 2003. Further, there is no evidence that the agency intends to recover the overpayment by an administrative offset. Because Petitioner is not a federal employee she is not entitled to the due process procedures specified in 5 U.S.C. § 5514. Because no administrative offset is involved, Petitioner is not entitled to the due process procedures specified by 45 C.F.R. § 30.15. Accordingly, based upon review of the foregoing statutory and regulatory authority, I conclude that Petitioner has no right to hearing officer review in this case. The Secretary's regulations provide only that Petitioner has the right to written notice and an opportunity to promptly submit evidence in support of her dispute of the debt. 45 C.F.R. §§ 30.11 and 30.12.

III. CONCLUSION

Petitioner has no right to hearing or review by a hearing officer as she is not an employee of the federal government and the agency has not attempted collection of Petitioner's debt by administrative offset. Accordingly, I have no jurisdiction to conduct a hearing officer review and this matter must be dismissed.

KEITH W. SICKENDICK

Administrative Law Judge

1. Prior to October 16, 1996, the Comptroller General shared responsibility with the Attorney General for debt collection. General Accounting Act of 1996, Pub. L. 104-316, 110 Stat. 3826, 3834-35.