Hodari Brown, DAB CR6534 (2024)

DECISION

Petitioner was hired by the Social Security Administration (SSA) in February 2023 to serve as a Management and Program Analyst with an Official Duty Station (ODS) in Woodlawn, Maryland.  During the hiring process, SSA advised Petitioner that, under the COVID Reentry Policy in effect at the time, he was permitted to telework up to five days per week from an Alternative Duty Station (ADS), provided that the ADS was located within two hours of his ODS.  Petitioner assured the agency that, if hired, he would relocate to the Woodlawn, Maryland area to meet this requirement.  SSA subsequently offered Petitioner the position, designated his ODS as Woodlawn, Maryland, and set his initial salary based on the Washington-Baltimore-Arlington (DCB) locality pay rate.

In or around March 2024, Petitioner’s supervisor became aware that Petitioner had been working full-time from Redford, Michigan since at least June 30, 2023.  As a result, SSA corrected Petitioner’s ODS to Redford, Michigan and changed his salary to the Detroit-Warren-Ann Arbor (DET) locality pay rate, retroactive to June 30, 2023.  Since the DCB locality pay rate is higher than the DET locality pay rate, SSA determined Petitioner received salary overpayments in the amounts of $1,883.76 and $763.20 for the pay periods he was paid at the DCB locality rate.

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After receiving debt letters from SSA, Petitioner filed a hearing request challenging SSA’s debt determination.  For the reasons stated below, I find Petitioner owes debts of $1,883.76 and $763.20 to the United States Government.  Less applicable recoverables, the net totals owed by Petitioner are $1,446.36 and $559.45, respectively.  I also find that SSA failed to expeditiously refer Petitioner’s hearing request in accordance with the applicable statute and regulations.  Accordingly, SSA should not charge Petitioner interest or penalties during the period that it failed to refer this case for adjudication.

I.      Procedural History

In an April 15, 2024 letter, SSA informed Petitioner that he received a net salary overpayment in the amount of $1,883.76 for pay periods 14 through 26 in 2023 and pay periods 1 through 2 in 2024.  Departmental Appeals Board (DAB) Docket (Dkt.) Entry No. 1a.  In a subsequent April 29, 2024 letter, SSA informed Petitioner that he received another net salary overpayment in the amount of $763.20 for the pay periods 3 through 7 in 2024.  DAB Dkt. Entry No. 1b.  The letters informed Petitioner that if the full amounts demanded were not paid within 30 days, then interest and penalties totaling as much as 10 percent may accrue until the debts were paid in full.  DAB Dkt. Entry Nos. 1a, 1b.  SSA’s letters also stated that Petitioner could request a hearing to dispute the existence of the debts or the amount of the debts.  DAB Dkt. Entry Nos. 1a, 1b.

On May 7, 2024, Petitioner sent SSA an email challenging the existence of the debts and requesting a hearing.  DAB Dkt. Entry No. 1.  On July 9, 2024, SSA forwarded Petitioner’s hearing request, by email, to the Civil Remedies Division (CRD) of the United States Department of Health and Human Services’ Departmental Appeals Board.  DAB Dkt. Entry No. 1c.

On July 12, 2024, I issued an Acknowledgment, Prehearing Order, and Notice of Informal Conference or Meeting (Prehearing Order).  DAB Dkt. Entry No. 2.  In the Prehearing Order, I directed SSA to explain why it took over two months to forward the hearing request to CRD.  Id. at 3.  I also provided a schedule for the submission of arguments and evidence as well as notice that I may hold an informal conference or meeting on August 20, 2024, if the parties explained why such a conference or meeting was necessary.  Id. at 3-6.

On July 19, 2024, SSA filed an explanation as to why it untimely forwarded Petitioner’s hearing request to CRD.  DAB Dkt. Entry No. 4.  On July 24, 2024, SSA filed a prehearing brief (SSA Brief) and sixteen proposed exhibits (SSA Exs. 1-16).  DAB Dkt. Entry Nos. 8, 9.  On August 13, 2024, five days after the pre-hearing exchange deadline

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set in my Prehearing Order, Petitioner filed a prehearing brief (P. Brief) and one proposed exhibit (P. Ex. 1).  DAB Dkt. Entry Nos. 10, 11.

On August 13, 2024, after reviewing the parties’ prehearing submissions, I issued an Order cancelling the informal conference scheduled for August 20, 2024.  DAB Dkt. Entry No. 12.  I noted that neither party identified any witnesses to be examined or any genuine disputes of material fact to be resolved at an informal conference.  Id. at 2.  Accordingly, I concluded an in-person conference was unnecessary and stated I would issue a decision based on the written record.  Id. 

My August 13, 2024 Order also gave SSA six additional days, or until August 19, 2024, to file objections to Petitioner’s untimely proposed exhibit.  Id.  On August 16, 2024, SSA filed its objections to Petitioner’s proposed exhibit.  DAB Dkt. Entry No. 13.

The record is now complete and ready for a decision.

II.     Issues

I may only decide the following issues in this case:

1. Whether Petitioner owes debts to the United States Government (i.e., whether the debts exist);
2. If so, whether $1,883.76 and $763.20 are the correct amounts of the debts owed; and
3. If there is a repayment schedule that is established other than by written agreement (i.e., SSA imposed a repayment schedule), whether the terms of the repayment schedule are appropriate.

III.    Jurisdiction

The three issues identified above are the only appealable issues in a salary overpayment matter.  5 U.S.C. § 5514(a)(2)(D); 20 C.F.R. § 422.810(f)(1)(vii), (h)(4)(ii).

The statute authorizing these proceedings specifies that the head of an agency may appoint an administrative law judge to adjudicate an employee’s appeal of an alleged debt.  See 5 U.S.C. § 5514(a)(2); see also 20 C.F.R. § 422.810(d) (definition of Hearing official), (i)(1).  SSA maintains an interagency agreement under which administrative law

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judges with CRD adjudicate SSA federal salary overpayment cases.  See Portia L. Pierce, DAB CR2049 at 5 (2009); Jan Donsbach, DAB CR1536 (2006).1

IV.    Admission of Evidence

I admit SSA’s proposed exhibits 1-16 into the record without objection.  I also admit Petitioner’s late-filed exhibit into the record over SSA’s objections.  In its objections, SSA contends Petitioner’s proposed exhibit should be excluded because it was filed five days after the deadline set in my Prehearing Order.  DAB Dkt. Entry No. 13 at 1-2.  SSA also argues the exhibit should be excluded on the grounds that it is immaterial.  Id. at 2-5.

With respect to timeliness, my August 13, 2024, Order gave SSA six additional days to file objections to Petitioner’s proposed exhibit.  DAB Dkt. Entry No. 12.  Accordingly, I find that admitting Petitioner’s late-filed exhibit into the record would not unfairly prejudice SSA or unduly delay these proceedings.  I also note SSA was responsible for a significantly longer delay in this case by failing to timely forward Petitioner’s hearing request to CRD.  With respect to materiality, I find Petitioner’s proposed exhibit relevant to resolving Petitioner’s arguments regarding the existence of the debts.  I also note SSA’s objection largely focuses on the merits of Petitioner’s arguments rather than the admissibility of the proposed exhibit.  Therefore, I admit Petitioner’s proposed exhibit into the record.

V.     Decision on the Written Record

In the Prehearing Order, I tentatively scheduled an informal conference for August 20, 2024.  DAB Dkt. Entry No. 2 at 4-5.  However, I also directed the parties to state in their prehearing submissions why an informal conference was necessary to adjudicate this case.  Id. at 5.  Neither party identified any witnesses or explained why an informal conference or meeting was necessary.  In fact, SSA stated a conference was unnecessary and moved for judgment on the record.  SSA Brief at 1.  Moreover, after reviewing the parties’ prehearing submissions, I found no genuine disputes of material fact that need to be resolved at an informal conference.  See 20 C.F.R. § 422.810(h)(3).  Accordingly, in my August 13, 2024 Order, I cancelled the informal conference and stated I would decide this case based on the written record.  DAB Dkt. Entry No. 12 at 2.  Neither party objected to my Order.

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VI.    Findings of Fact

Sometime in 2022, Petitioner applied for the position of Management and Program Analyst, GS-13, step 1, in SSA’s Office of Analytics and Improvements (OAI).  The USAJOBS vacancy announcement listed the ODS for the position as Woodlawn, Maryland and stated the position was eligible for telework, as determined by agency policy, but not eligible for remote work.  SSA Ex. 1 at 1.

On September 6, 2022, after Petitioner interviewed for the position, OAI’s Executive Officer sent Petitioner an email, stating that the position was in Woodlawn, Maryland, but OAI was currently operating under a COVID Reentry Policy and was offering telework up to five days per week from an ADS.  SSA Ex. 2 at 1.  The email further stated that agency policy required the ADS to be located within two hours of the ODS in Woodlawn, Maryland.  Id. at 2; see also SSA Ex. 3 at 2 (defining ADS as a management-approved worksite that is geographically convenient).  The Executive Officer asked Petitioner to confirm he could meet this requirement.  SSA Ex. 2 at 2.  In response, Petitioner stated he was in Detroit, Michigan but if hired, was willing to move to the Woodlawn, Maryland area “to meet the requirements necessary for the position.”  SSA Ex. 2 at 1.

SSA subsequently sent Petitioner a tentative offer letter, dated September 23, 2022, and an official offer letter, dated November 16, 2022.  SSA Ex. 4.  Both letters stated the position was in Woodlawn, Maryland and proposed a starting salary based on the DCB locality pay area, where Woodlawn, Maryland is located.  Id.; see also OPM 2023 Locality Pay Area Definitions, available at https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2023/locality-pay-area-definitions/ (last visited Aug. 23, 2024).

Petitioner accepted the offer and was given an entrance on duty (EOD) date of February 26, 2023.  SSA Ex. 5.  To document Petitioner’s EOD, SSA issued a form SF-50, Notification of Personnel Action, which listed Petitioner’s ODS as Woodlawn, Maryland.  Id.  As documented in the form, Petitioner’s starting annual salary was set at $112,015, which included a basic pay rate of $84,546 plus a locality adjustment of $27,469 for the DCB locality pay area.  Id.; see also SSA Ex. 11 at 1.

On March 8, 2023, Petitioner received an email from SSA Human Resources Specialist Sara D. Johnson, stating that while inputting his payroll information, she noticed he had a Michigan address.  P. Ex. 1 at 1.  Ms. Johnson asked Petitioner to confirm whether he was working remotely in Michigan or if he had moved to Maryland for the position.  Id. 

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Ms. Johnson also indicated that a Michigan state tax form was attached in case he was working remotely in Michigan.  Id.2

On January 30, 2024, SSA circulated a Commissioner’s Broadcast to all employees, stating that new return to office policies would take effect on April 7, 2024, requiring certain employees to increase their onsite presence.  SSA Ex. 7.  On February 1, 2024, in response to the Commissioner’s Broadcast, Petitioner advised SSA management that he had moved to Michigan the previous summer and requested guidance on how the new policy would impact him.  SSA Ex. 8.  On or before March 18, 2024, Petitioner discussed the matter with his supervisor and confirmed he had been living and working from Redford, Michigan since June 30, 2023.  SSA Ex. 9.

In March 2024, following Petitioner’s discussion with his supervisor, SSA initiated a personnel action to correct Petitioner’s ODS from Woodlawn, Maryland to Redford, Michigan, retroactive to June 30, 2023, based on the information he provided to management.  SSA Exs. 9, 10.  Based on the correction to Petitioner’s ODS, SSA also retroactively reduced Petitioner’s salary from the DCB locality rate to the DET locality rate for the pay periods 202314 through 202402 and 202403 through 202407, which covers the time periods from June 30, 2023 to March 2024.  DAB Dkt. Entry Nos. 1a, 1b.  Redford, Michigan is in the DET locality pay area, and has a lower locality pay rate than Woodlawn, Maryland, which is in the DCB locality pay area.  SSA Ex. 11; see also OPM 2023 Locality Pay Area Definitions, available at https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2023/locality-pay-area-definitions/ (last visited Aug. 23, 2024).

At the DCB locality rate, in 2023, as a GS-13, step 1 Management and Program Analyst, Petitioner received an annual salary of $112,015, and was paid $53.67 per hour at the DCB locality rate.  SSA Ex. 11 at 1, 3; SSA Ex. 12.  In 2024, Petitioner’s salary increased to $117,962 and his hourly pay increased to $56.52.  SSA Ex. 11 at 5, 7; SSA Ex. 12.  On February 25, 2024, Petitioner received a Within-Grade-Increase to GS-13, step 2, increasing his salary to $121,894 and hourly pay to $58.41 based on the DCB locality rate.  SSA Exs. 12, 13.

With the lower DET locality rate applied, Petitioner’s 2023 salary was reduced from $112,015 to $108,532, with an hourly rate of $52.00.  SSA Ex. 14.  In 2024, Petitioner’s salary as a GS-13, step 1, was reduced from $117,962 to $114,031, with an hourly pay

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rate of $54.64.  SSA Exs. 14, 15.  In 2024, his salary as a GS-13, step 2, was reduced from $121,894 to $117,833, with an hourly pay rate of $56.46.  SSA Exs. 14, 15.

In total, SSA determined the retroactive correction in ODS and locality pay resulted in overpayments to Petitioner in the amounts of $1,883.76 for pay periods 14 through 26 in 2023 and pay periods 1 through 2 in 2024, and $763.20 for pay periods 3 through 7 in 2024.   DAB Dkt. Entry Nos. 1a, 1b; SSA Exs. 12, 13, 14, 15.  Less applicable recoverables, including tax and payroll withholdings, the net salary overpayments received by Petitioner totaled $1,446.36 and $559.45, respectively.  DAB Dkt. Entry Nos. 1a, 1b.

Petitioner admits he resided and worked full-time in Redford, Michigan from June 30, 2023, through March 2024.  See P. Brief at 1 (noting he consistently listed his Michigan address on “all pre-hire and post-hire paperwork”); DAB Dkt. Entry No. 1 at 1 (“I was always in Michigan but assigned to Woodlawn, MD . . . .”); SSA Ex. 16 (stating he always resided in Michigan while his office designation was in Maryland).

VII.   Analysis and Conclusions of Law

1. Petitioner owes debts to the United States Government due to salary overpayments.

As detailed above, Petitioner was hired by SSA in February 2023 to serve as a Management and Program Analyst.  SSA Ex. 5.  During the hiring process, SSA repeatedly stated Petitioner’s ODS was in Woodlawn, Maryland.  SSA Exs. 1, 2, 4, 5.  SSA also advised Petitioner he was permitted to telework up to five days per week under the Reentry Policy in effect at the time, but he was required to do so from an ADS located within two hours of his ODS in Woodlawn, Maryland.  SSA Ex. 2 at 2; see also SSA Ex. 6.  In response, Petitioner advised SSA that, if hired, he would relocate from Michigan to the Woodlawn, Maryland area “to meet the requirements necessary for the position.”  SSA Ex. 3.  In apparent reliance on this representation, SSA offered Petitioner the position, designated his ODS as Woodlawn, Maryland, and calculated his starting salary based on the DCB locality pay rate.  Id.; SSA Exs. 4, 5.

Despite Petitioner’s statements during the hiring process, it does not appear that he ever moved to the Woodlawn, Maryland area after accepting the official offer.  See DAB Dkt. Entry No. 1 at 1-2 (stating “I was always in Michigan but assigned to Woodlawn, MD” and “I have always resided in Michigan while my designation office was in Baltimore”).  Further, it is undisputed that Petitioner performed his work duties full-time from his

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home in Redford, Michigan since at least June 30, 2023.  See id.; P. Brief at 1; DAB Dkt. Entry No. 1 at 1; SSA Exs. 8, 9, 16.

Based on these facts, I agree with SSA that Petitioner should have been paid at the lower DET locality pay rate from June 30, 2023, forward.  By regulation, an agency must determine an employee’s locality pay based on the employee’s “official worksite.”  5 C.F.R. § 531.604(b)(2).  An employee’s official worksite is “the location of an employee’s position of record where the employee regularly performs his or her duties.”  5 C.F.R. § 531.605(a)(1).  For an employee covered by a telework agreement who does not report to the “regular worksite for the employee’s position of record” at least twice each biweekly pay period, “the employee’s official worksite is the location of the employee’s telework site.” 5 C.F.R. § 531.605(d)(1), (3).

Here, since at least June 30, 2023, Petitioner regularly performed his work duties in Redford, Michigan.  P. Brief at 1; DAB Dkt. No. 1 at 1; SSA Exs. 8, 9, 16.  During that timeframe, he did not report to the “regular worksite for his position of record” in Woodlawn, Maryland at least twice per biweekly pay period.  See P. Brief at 1; DAB Dkt. No. 1 at 1; SSA Exs. 8, 9, 16.  Moreover, besides permitting telework from an ADS within two hours of Woodlawn, Maryland under a COVID Reentry Policy, there is no evidence that an “authorized agency official” granted Petitioner an exception to the twice-per-biweekly-pay-period standard.  5 C.F.R. § 531.605(d)(2).  Accordingly, I find Petitioner’s official worksite for purposes of calculating locality pay was his telework site in Redford, Michigan.

Based on my finding that Petitioner’s official worksite was in Redford, Michigan, I also find that Petitioner’s salary during the pay periods in question should have been calculated based on the DET locality area rate.  See 5 C.F.R. § 531.604(b)(2);  see also OPM 2023 Locality Pay Area Definitions, available at https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2023/locality-pay-area-definitions/ (last visited Aug. 23, 2024).  Therefore, I conclude Petitioner received salary overpayments for the pay periods in which he was incorrectly paid at the DCB locality area pay rate.

In challenging the debts, Petitioner argues, without evidence, that he was told “during [his] interview and subsequent hiring” that he “was not required to work in Baltimore, Maryland.”  P. Brief at 1.  Petitioner further argues that SSA knew he was working in Michigan because he used a Michigan address on his hiring documents and had both Michigan and Maryland state taxes withheld from his pay.  See DAB Dkt. Entry No. 1.  Petitioner also points to a March 8, 2023, email from Sara D. Johnson, an SSA Human Resources Specialist, in which Ms. Johnson stated that she noticed Petitioner had a Michigan address while inputting his payroll information and provided a Michigan state

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tax form for him to complete if he was working remotely from Michigan.  P. Ex. 1 at 1.  Petitioner contends these actions “reinforced” his understanding that he was permitted to telework from Michigan.  P. Brief at 1.

Petitioner’s arguments are unpersuasive.  The operative factor in determining locality pay is the location of Petitioner’s official worksite—not whether the worksite location was known to or authorized by the agency.  See 5 C.F.R. § 531.604(b).  As explained above, Petitioner’s official worksite, whether authorized or not, was in Redford, Michigan.  Thus, under the applicable regulations and locality pay area definitions, he should have been paid based on the DET locality rate during the relevant pay periods.  See 5 C.F.R. §§ 531.604(b), 531.605(a)(1), (d)(1).

Moreover, while not dispositive in this case, Petitioner’s suggestion that SSA expressly or implicitly authorized him to work from Michigan is inconsistent with the record.  As detailed above, the hiring documents show SSA repeatedly stated the ODS for the position was in Woodlawn, Maryland and specifically advised Petitioner he was required to telework from an ADS within two hours of his ODS.  SSA Exs. 1, 2, 4, 5.  Further, during the application process, Petitioner stated he was living in Michigan but would move to the Woodlawn, Maryland area if hired.  SSA Ex.3.  Petitioner’s use of a Michigan address during the hiring process was consistent with this representation and does not support Petitioner’s claim that SSA knew he intended to work from Michigan.  Additionally, Petitioner’s state tax elections are an administrative payroll matter and do not demonstrate approval, tacit or otherwise, by SSA management of Petitioner’s Michigan worksite.  Petitioner has provided no evidence showing he specifically requested or was granted permission to work remotely from Michigan.

Still further, with respect to Ms. Johnson’s email, there is no evidence that Ms. Johnson, a Human Resources Specialist inquiring about a payroll matter, approved Petitioner’s Michigan worksite or was even a management official authorized to approve Petitioner’s Michigan worksite.3  In fact, there is no evidence any relevant management official knew Petitioner was working full-time from Redford, Michigan until February or March 2024, at which point SSA swiftly moved to correct Petitioner’s ODS and locality pay to match his official worksite.  SSA Exs. 8, 9.  Therefore, I find no merit in Petitioner’s claim that SSA’s actions “reinforced” his understanding that he was permitted to telework from Michigan or that he was somehow eligible for DCB locality pay while teleworking full-time from Michigan.

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Petitioner asserts various other arguments which fail to address the validity of the debts.  For example, Petitioner claims, without evidence, that SSA has continued hiring out-of-state employees for positions based in Baltimore.  P. Brief at 1.  However, Petitioner does not claim out-of-state SSA employees are routinely paid at the DCB locality rate and, in any event, alleged hiring and salary decisions involving different employees and circumstances are not relevant to the debts at issue in this case.

Petitioner also contends, based on his alleged personal experience with a different federal agency, that SSA’s actions “deviate from the standard practices of other federal agencies.”  P. Brief at 2.  Again, Petitioner fails to offer evidence establishing “the standard practices of other federal agencies,” and at any rate, the alleged practices of different federal agencies have no bearing on the existence or amount of the debts at issue here.  As discussed above, SSA’s locality pay determination in this case was consistent with the regulations generally applicable to all federal agencies and employees.

Petitioner further claims he never received a substantive orientation and argues SSA inaccurately stated he attended an “in-person orientation.”  P. Brief at 1.  It is unclear what statements Petitioner is referring to, as SSA’s brief contains no mention of any orientation, in-person or otherwise.  In any event, neither the format nor the substance of Petitioner’s orientation is at issue in this case.

Finally, Petitioner argues SSA is shifting the blame to him for receiving a locality pay rate he did not request.  P. Brief at 2.  However, my role in this case is not to assign blame to either party, but to determine whether the debts calculated by SSA are valid.  See 20 C.F.R. § 422.810(h).

I acknowledge and understand Petitioner’s frustration and surprise at having to repay money he has already received.  However, the record and the applicable regulations support SSA’s decision to retroactively amend Petitioner’s locality pay to reflect that his official worksite was in Redford, Michigan during the relevant pay periods.  Therefore, I find that Petitioner owes debts to the United States Government for salary overpayments made between June 30, 2023, and March 2024.

2. The total amounts of Petitioner’s debts are $1,883.76 and $763.20.

Petitioner does not dispute that the overpayments were correctly calculated or otherwise raise any arguments concerning the amounts of the debts.  See P. Brief.  Further, SSA has shown that it correctly calculated the amounts of Petitioner’s debts based on the difference between the salary Petitioner received at the DCB locality pay rate and the

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salary Petitioner should have received at the DET locality pay rate during the relevant pay periods.  DAB Dkt. Entry Nos. 1a, 1b; SSA Exs. 12, 13, 14, 15.

Specifically, SSA correctly determined that the overpayments made to Petitioner totaled $1,883.76 for pay periods 14 through 26 in 2023 and pay periods 1 through 2 in 2024; and $763.20 for pay periods 3 through 7 in 2024.  DAB Dkt. Entry Nos. 1a, 1b; SSA Exs. 12, 13, 14, 15.  Less applicable recoverables, including tax and payroll withholdings, the net totals owed by Petitioner are $1,446.36 and $559.45, respectively.  DAB Dkt. Entry Nos. 1a, 1b.

3. A repayment schedule is not at issue in this case, but the parties are urged to come to a repayment agreement to resolve Petitioner’s debts.

A federal employee has the right to dispute the “terms of the repayment schedule” of a debt when an agency imposes a repayment schedule other than by a written agreement between the employee and the agency.  5 U.S.C. § 5514(a)(2)(D).  However, it does not appear that SSA has imposed a repayment schedule in this case and Petitioner has not raised any arguments concerning a repayment schedule.  See P. Brief.

I urge SSA to try to reach an agreement with Petitioner regarding repayment of the debts rather than impose a repayment schedule.  See 5 U.S.C. § 5514(a)(2)(C).  The amount of debt in this case is significant in comparison to Petitioner’s salary and Petitioner remains an employee of the agency.  I also note that if SSA ultimately imposes a repayment schedule on Petitioner, Petitioner may request a hearing seeking review of the terms by an administrative law judge.

4. Petitioner’s dispute of the debt was not baseless, and Petitioner did not dispute the debt with the intent to delay SSA’s collection activity.

The applicable regulations state that my decision must “includ[e] a determination whether the employee’s petition for hearing was baseless and resulted from an intent to delay the creditor agency’s collection activity.”  20 C.F.R. § 422.810(h)(4)(ii)(B).  I find that Petitioner’s hearing request was not baseless, nor did Petitioner dispute the debt with intent to delay SSA’s collection activities.  Based on the record, it is clear Petitioner is frustrated and surprised by SSA’s overpayment determination and genuinely believes the decision was unwarranted.  Thus, while I do not find Petitioner’s arguments persuasive, I do find that he challenged the debts in good faith and there is no indication Petitioner sought to delay payment of the debt.  It is also worth mentioning that Petitioner did not request any delay in this case despite having the opportunity and right to do so, and the

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greatest delay in the proceedings resulted from SSA’s failure to timely forward Petitioner’s hearing request to CRD.

5. SSA should waive any interest and penalties which accrued during the timeframe it failed to timely refer Petitioner’s hearing request to CRD.

The statute and regulations governing this proceeding require an administrative law judge to issue a decision within 60 days of SSA’s receipt of a hearing request.  5 U.S.C. § 5514(a)(2)(D); 20 C.F.R. § 422.810(f)(1)(xiii), (h)(4)(i).  SSA’s regulations specify that “[t]he recipient of an employee’s request for a hearing must forward the request expeditiously to the hearing official to avoid jeopardizing the hearing official’s ability to issue a decision within this 60-day period.”  20 C.F.R. § 422.810(h)(4)(i).

Here, despite receiving Petitioner’s hearing request on May 7, 2024, SSA did not forward the request to this office for the appointment of an administrative law judge until July 9, 2024, more than 60 days after the request was received.  DAB Dkt. Entry No. 1c.  Accordingly, in violation of its own regulations, SSA’s actions made it impossible for me to adjudicate this case within the required 60-day period.

In the Prehearing Order, I directed SSA to explain why it took so long to forward the hearing request to CRD.  DAB Dkt. Entry No. 2 at 3.  In response, SSA conceded it failed to “expeditiously” refer Petitioner’s hearing request for adjudication, but stated the failure to do so was inadvertent, unintentional, and not meant to delay the proceedings or harm Petitioner.  DAB Dkt. Entry No. 4 at 1.  SSA stated that the SSA official who received the hearing request forwarded it to SSA’s payroll provider to stop payment on any collection actions, but unintentionally failed to forward the hearing request and debt letters to CRD until July 9, 2024, when SSA’s counsel followed up regarding the request.  Id. at 2.

I do not find SSA’s reasons for violating a statutory requirement and its own regulations particularly compelling.  At the same time, the amount of delay in this case is not a sufficient basis for invalidating Petitioner’s debts to the agency.  Nevertheless, I note that SSA stated in its debt letters to Petitioner that it may charge interest and late penalties of up to 10 percent per annum if Petitioner did not pay the entire debt within 30 days.  DAB Dkt. Entry Nos. 1a, 1b.  The only stated exceptions to the date on which interest was to commence were if: (1) the head of SSA or her designee extends the date or (2) the debt is subject to an agreed upon payment schedule.  DAB Dkt. Entry Nos. 1a, 1b.4

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Given SSA’s failure to comply with federal law and the resulting delay in this case, a waiver of interest and penalties associated with SSA’s delay is appropriate.  Charging interest for a period where SSA was in violation of its own regulations, which in turn delayed these proceedings by over two months and caused a violation of a statutory deadline, would be against equity and good conscience and would not be in the best interest of the United States.  See 20 C.F.R. § 422.807(g)(2).  Therefore, SSA should waive any interest or penalties which may have otherwise accrued from the time SSA received Petitioner’s hearing request until the date SSA referred the hearing request to CRD.   I also strongly encourage SSA to reform its system for receiving and forwarding similar hearing requests to ensure it complies with the applicable statutory and regulatory requirements.

VIII.  Conclusion

Petitioner is indebted to the United States Government in the amounts of $1,883.76 and $763.20.  Less applicable recoverables, including tax and payroll withholdings, the net totals owed by Petitioner are $1,446.36 and $559.45, respectively.

This is the final agency decision pursuant to 5 U.S.C. § 5514(a)(2)(D).