Diana Hodge, DAB CR6774 (2025)

DECISION

Petitioner, Diana Hodge, a current Social Security Administration (SSA) employee, filed a request for hearing challenging an alleged debt owed to SSA resulting from SSA charging Petitioner for 168 hours of administrative leave she used from March 21, 2025 through April 18, 2025, after Petitioner rescinded her agreement to voluntarily separate from federal service through retirement, under the terms of SSA’s Voluntary Separation Incentive Payment (VSIP) program and the VSIP agreement signed by Petitioner.  Specifically, in an email correspondence sent on March 3, 2025, SSA offered all eligible employees a VSIP program.  Under the terms of the VSIP program, if an eligible employee applied for the VSIP program, and was approved, in exchange for the employee’s voluntary separation from federal service through retirement or resignation, the SSA employee would be placed on administrative leave beginning on March 21, 2025 and would receive a lump sum severance payment, contingent upon separation from federal employment by April 19, 2025.  On March 15, 2025, Petitioner was approved for  the VSIP program.  On March 21, 2025, Petitioner began administrative leave.  On April 17, 2025, Petitioner rescinded her VSIP program agreement and retirement and returned to work on April 21, 2025.  As a result of Petitioner rescinding her VSIP Program agreement and retirement, SSA charged Petitioner for 168 hours of administrative leave

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she used from March 21, 2025 through April 18, 2025, specifically in pay periods 7-9 in 2025.

After receiving a debt letter from SSA, Petitioner timely filed a request for hearing challenging SSA’s debt determination.  For the reasons stated below, I find Petitioner owes a debt of $5,874.96 to the United States Government.  Less applicable recoverables, the net total owed by Petitioner is $5,141.77.  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 a May 27, 2025 letter, SSA informed Petitioner that she received a net salary overpayment in the amount of $5,141.77 for pay periods 7 through 9 in 2025.  See Departmental Appeals Board (DAB) Docket (Dkt.) Entry Number (No.) 1a at 1, 9.  The letter informed Petitioner that if the full amount owed was not paid within 30 days, then interest of 5.000% per annum and a late penalty of 6.000% per annum will accrue until the debt is paid in full.1  See id. at 1, 3.  SSA’s letter also stated that Petitioner could request a hearing to dispute the existence of the debt or the amount of the debt.  Id. at 8.

On June 5, 2025, Petitioner sent SSA an email, with supporting documentation attached, challenging the existence of the debt and requesting a hearing.  DAB Dkt. Entry No. 1, 1b at 3-4.  On July 24, 2025, SSA forwarded Petitioner’s request for a hearing, 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. 1b at 1.

On July 25, 2025, 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 49 days to forward the hearing request to CRD.  Id. at 2.  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 September 3, 2025, if the parties explained why such a conference or meeting was necessary.  Id. at 2-5.

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On August 1, 2025, SSA timely filed an explanation as to why it untimely forwarded Petitioner’s request for a hearing to CRD.  DAB Dkt. Entry No. 4.  On August 11, 2025, SSA timely filed its prehearing brief, exhibit list, and three proposed exhibits (SSA Exhibits (Exs.) 1-3).  DAB Dkt. Entry Nos. 5, 6, 6a-6c.  On August 14, 2025, Petitioner emailed the attorney advisor assisting me with this case a response to SSA’s August 1, 2025 explanation (Petitioner’s August 14, 2025 response), with an image as an attachment,2 copying counsel for SSA.  See DAB Dkt. Entry Nos. 7, 8, 10.  On August 14, 2025, the attorney advisor uploaded Petitioner’s filings to the case record in DAB E-File, the Departmental Appeals Board’s e-filing system.  See DAB Dkt. Entry Nos. 7, 9, 10.  The attorney advisor also responded to Petitioner’s email, copying counsel for SSA, referring Petitioner to the requirement to register for DAB E-File, as set forth in my Prehearing Order, and offered to assist Petitioner with registering for DAB E-File.  See DAB Dkt. Entry No. 9.  On August 20, 2025, the attorney advisor confirmed, via email, that Petitioner had successfully registered for DAB E-File and had been granted access to the case in the DAB E-File system.  See DAB Dkt. Entry No. 12 at 1-2.  Petitioner did not file its prehearing exchange by August 26, 2025, as instructed in my Prehearing Order.  See DAB Dkt. Entry No. 2 at 3.

On August 27, 2025, after reviewing the parties’ prehearing submissions, I issued an Order cancelling the informal conference scheduled for September 3, 2025.  DAB Dkt. Entry No. 13.  I noted that neither party identified any witnesses to be examined, requested an oral hearing, nor stated why an oral hearing was necessary.  Id. at 1.  Accordingly, I concluded that an in-person conference was unnecessary, and stated I would issue a decision based on the written record.  Id. at 2.

On September 2, 2025, seven days after the deadline for Petitioner to file its prehearing exchange, as established in my Prehearing Order, Petitioner filed a document containing supplemental arguments.  DAB Dkt. Entry No. 14 at 1.  Petitioner’s September 2, 2025 filing also includes additional proposed documentary evidence, which I mark as P. Ex. 2.  See id. at 2-14.  Specifically, Petitioner’s September 2, 2025 filing contains a March 15, 2025 email correspondence from SSA notifying Petitioner of approval for participation in the VSIP program, a copy of the Employee Guidance for Implementing the Voluntary Separation Incentive Program, a March 17, 2025 email correspondence from SSA to Petitioner confirming the administrative leave would be paid and containing information regarding when administrative leave would begin under the terms of the VSIP program

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and the required separation date, and a signed copy of Petitioner’s VSIP agreement.  See id.

SSA did not file any objections to Petitioner’s September 2, 2025 untimely filing.

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 a debt to the United States Government;

2) If so, whether $5,874.96 is the correct amount of the debt 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 judges with CRD adjudicate SSA federal salary overpayment cases.  See Portia L. Pierce, DAB CR2049 at 5 (2009); Jan Donsbach, DAB CR1536 (2006).3

IV.     Admission of Evidence

On August 11, 2025, SSA submitted three properly marked exhibits in support of its prehearing exchange.  DAB Dkt. Entry Nos. 6a-6c.  There being no objection, I admit SSA’s proposed exhibits as SSA Exs. 1-3 into the administrative record.

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On August 14, 2025, Petitioner submitted an exhibit (P. Ex. 1).  DAB Dkt. Entry No. 10.  On September 2, 2025, Petitioner submitted its untimely filed supplemental arguments, and additional documentation as an exhibit (P. Ex. 2).  See DAB Dkt. Entry No. 14 at 1-14.  Given that Petitioner is unrepresented by counsel and SSA has not asserted any objections to Petitioner’s submissions, I admit Petitioner’s August 14, 2025 response, Petitioner’s September 2, 2025 supplemental arguments, and P. Exs. 1 and 2 into the administrative record.  See DAB Dkt. Entry Nos. 7, 10, 14.  I also admit the documents attached to the Petitioner’s request for hearing into the administrative record as evidence.  See DAB Dkt. Entry No. 1.

V.     Decision on the Written Record

In the Prehearing Order, I tentatively scheduled an informal conference for September 3, 2025.  DAB Dkt. Entry No. 2 at 2.  However, I also directed the parties to state in their prehearing submissions why an informal conference was necessary to adjudicate this case.  Id. at 4.  Neither party identified any witnesses or explained why an informal conference or meeting was necessary.  Moreover, after reviewing the parties’ written submissions, including Petitioner’s untimely September 2, 2025 filing, I find that a paper hearing is appropriate and that an oral hearing is not necessary.4  See 20 C.F.R. § 422.810(h)(3)(iii).  In my August 27, 2025 Order, I cancelled the informal conference and stated I would decide this case based on the written record.  DAB Dkt. Entry No. 13 at 2.  My August 27, 2025 Order stated, “[i]f the case can be resolved without an oral hearing, then the case may be adjudicated as a “[p]aper hearing[.]”  20 C.F.R. § 422.810(h)(3)(iii).”  Id.  Neither party objected to my Order.

VI.     Findings of Fact

On March 3, 2025, SSA sent a broadcast email correspondence to all SSA employees offering a VSIP program to all eligible SSA employees.  DAB Dkt. Entry No. 1 at 6-11.  SSA’s March 3, 2025, email stated “[e]mployees who do not wish to undergo the restructuring process may elect to separate from federal service through retirement or resignation.”  Id. at 8.  SSA’s VSIP Program offer was “available until noon [Eastern Standard Time] March 14[, 2025] to all employees electing to separate from service across all components and positions agencywide.”  Id.  SSA’s March 3, 2025 email also set forth eligibility requirements and a “[s]eparation [w]indow.”  Id. at 8-9.  Specifically,

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under the terms of SSA’s VSIP program, “[e]ligible employees [would] begin administrative leave on March 21, 2025, and must separate no later than April 19, 2025.”  Id. at 4, 5.

Petitioner applied for the VSIP program and signed her VSIP agreement on March 13, 2025.  See DAB Dkt. Entry No. 1 at 12, P. Ex. 2 at 14.

On March 15, 2025, Petitioner received an email from SSA notifying Petitioner that she had been approved under the terms of the VSIP program and that she needed to sign and submit a signed VSIP agreement.5  See P. Ex 2 at 2-11.

On March 17, 2025, Petitioner sent an email correspondence to SSA stating:

I signed the VSIP agreement and was accepted.

I will be submitting [a]dministrative [l]eave beginning March 21, 2025, as indicated in [the] HR email.

Wednesday and Thursday I need to clean out my desk and shred any pertinent docs.

DAB Dkt. Entry No. 1 at 2

On March 17, 2025, Petitioner also sent an email to SSA requesting confirmation from SSA on whether the administrative leave being offered under the terms of the VSIP program would be paid administrative leave.  See id. at 2-3.  In response to Petitioner’s email, SSA confirmed that the administrative leave being offered under the terms of the VSIP program would be paid leave.  Id. at 2.

Under the terms of the VSIP program and Petitioner’s VSIP agreement, Petitioner agreed to voluntarily separate or retire from federal service by April 19, 2025, in exchange for being placed on administrative leave, beginning on March 21, 2025, and becoming eligible to receive a $15,000.00 lump sum severance payment.  See id. at 2-12, P. Ex. 14 at 2-14.  Accordingly, Petitioner began administrative leave on March 21, 2025.  See DAB Dkt. Entry No. 1 at 2.

On April 17, 2025, in an email correspondence to SSA, Petitioner rescinded her agreement to voluntarily retire from federal service by April 19, 2025 under the terms of

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the VSIP program, and returned to work on April 21, 2025.  See SSA Ex. 1 at 1.  In Petitioner’s April 17, 2025 email, Petitioner stated:

This is to confirm I am withdrawing my VSIP application/Retirement and have been approved by SSA SA supervisor [] via phone call to return to work on April 21, 2025.  Please withdraw my VSIP/GRB Retirement application.

Id.

In her request for hearing, Petitioner cites an “unforeseen medical and financial event” as the reason for rescinding her VSIP agreement and returning to work.  DAB Dkt. Entry No. 1 at 1.  However, in her September 2, 2025 filing, Petitioner asserts that she “rescinded only because after final calculations [she] realized that retiring would cause [her] great financial hardship.”  P. Ex. 2 at 1.  After Petitioner rescinded her VSIP program agreement and returned to federal service, SSA charged Petitioner for the 168 hours of administrative leave Petitioner used.6  See DAB Dkt. Entry No. 1a at 9; SSA Ex. 2.  Specifically, SSA charged Petitioner for administrative leave used in pay periods 2025-07, 2025-08, and 2025-09.  See SSA’s Ex. 2.  Specifically, Petitioner used 8 hours of administrative leave in pay period 2025-07, 80 hours of administrative leave in pay period 2025-08, and 80 hours of administrative in pay period 2025-09, for a total of 168 hours of administrative leave.  Id.  When Petitioner rescinded her voluntary retirement under the VSIP program and her VSIP agreement and returned to work on April 21, 2025, SSA changed the 168 hours of administrative leave Petitioner had used to leave without pay (LWOP).  Id. at 1-3.

In a letter dated May 27, 2025, SSA notified Petitioner that she owed a debt of $5,874.96 to the United States Government.  See DAB Dkt. Entry Nos. 1a at 9.  SSA’s letter notified Petitioner that less applicable recoverables, including tax and payroll withholdings, the net salary overpayment received by Petitioner totaled $5,141.77.  Id.  SSA’s letter informed Petitioner that if the full amount owed was not paid within 30 days, then interest of 5.000% per annum and a late penalty of 6.000% per annum will accrue until the debt is paid in full.  See id. at 1, 3.

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VII.     Analysis and Conclusions of Law

1. Petitioner owes a debt to the United States Government due to a salary overpayment.

As part of a program supporting SSA’s restructuring and alignment needs by incentivizing voluntary separations from the agency, SSA offered participating employees administrative leave pursuant to a voluntary and conditional contractual agreement to participate in the agency’s VSIP program.  See DAB Dkt. Entry Nos. 1 at 3-9, 5 at 5-6, 14 at 2-13.   Under the terms of the VSIP program and VSIP agreement, if an employee elected to participate and was approved, the participating employee would receive administrative leave, where the employee would remain in pay status without working, “from March 21, 2025[,] or [the participating employee’s] last day working, until the [employee’s] last day of service or April 19, 2025, whichever is sooner[]” to allow the participating employee to complete retirement or resignation paperwork or other actions needed to separate from the agency and receive the agreed-upon lump sum VSIP payment amount.  See P. Ex. 2 at 3, 5.

Administrative leave is defined as “paid leave authorized at the discretion of an agency under 5 U.S.C. § 6329a (and not authorized under any other provision of statute or Presidential directive) to cover periods within an employee’s tour of duty established for leave purposes when the employee is not engaged in activities that qualify as official hours of work . . . .”  5 C.F.R. § 630.1402.  The applicable regulations states that “[a]dministrative leave is not an entitlement, but is an authority, entrusted to the discretion of the agency, that should be used sparingly, consistent with the sense of Congress expressed in section 1138(b)(2) of Public Law 114-328.”  5 C.F.R. § 630.1403(a)(2).

SSA’s March 3, 2025 broadcast email to all SSA employees offering a VSIP program to all eligible SSA employees was a valid offer with consideration.  DAB Dkt. Entry No. 1 at 6-11.  SSA’s March 3, 2025 email set forth a “[s]eparation [w]indow,” and clearly established that participation in the VSIP program, and receipt of the benefits offered, were conditional and contingent upon the participating employee’s fulfillment of the terms of the agreement.  Id.  Specifically, under the terms of SSA’s VSIP program, “[e]ligible employees [would] begin administrative leave on March 21, 2025, and must separate no later than April 19, 2025.”  Id. at 4, 5 (emphasis added).  Petitioner applied for the VSIP program and signed her VSIP agreement on March 13, 2025.  See DAB Dkt. Entry No. 1 at 2, 12, P. Ex. 2 at 14.  On March 15, 2025, Petitioner was approved by SSA for participation under the terms of the VSIP program and her signed VSIP agreement.  See P. Ex 2 at 2-11.  Thus, I find that SSA’s VSIP program terms and Petitioner’s signed

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VSIP agreement established a valid contractual agreement between SSA and Petitioner.  I also find that when Petitioner rescinded her agreement to voluntarily retire or separate from federal service by April 19, 2025, and returned to work on April 21, 2025, Petitioner failed to fulfill the condition of the VSIP program, and her VSIP agreement, to separate from the agency.  Thus, Petitioner is not entitled to the benefits granted under the VSIP program–including administrative leave granted specifically for the purpose of voluntary separation.

Based on these facts, I agree with SSA that “SSA granted administrative leave specifically to those agreeing to voluntary separate; absent separation, the basis supporting SSA’s grant of this leave type is defunct.”  DAB Dkt. Entry No. 5 at 6.   Therefore, I conclude Petitioner received salary overpayments for the pay periods in which she was granted administrative leave pursuant to the terms and conditions of the SSA VSIP program and Petitioner’s signed VSIP agreement.

In challenging the debt, Petitioner argues, “[a]t no time, nor in the VSIP agreement signed, was I informed that I would have to pay back the [a]dminstrative leave provided under any circumstances.”  DAB Dkt. Entry No. 1 at 1.  I find Petitioner’s argument unpersuasive given that the terms of the VSIP program state, multiple times:

Administrative Leave and Separation Dates: Eligible employees will begin administrative leave on March 21, 2025, and must separate no later than April 19, 2025.

P. Ex. 2 at 12, 13; DAB Dkt. Entry No. 1 at 4, 5, 9 (emphasis added).

Petitioner’s argument that neither the VSIP program terms nor her signed VSIP agreement explicitly state that in the event that Petitioner returns to federal service, and does not fulfill the terms of the VSIP agreement, Petitioner will be charged the administrative leave used is unpersuasive.  As explained above, under the terms of the agreement, retirement or separation from federal service by April 19, 2025 was a condition of Petitioner being granted the administrative leave and the lump sum payment.  See id.  Moreover, in email correspondences with SSA, when Petitioner was confirming whether the administrative leave would be paid leave, Petitioner did not inquire as to whether her failure to fulfill the terms of the VSIP program and her VSIP agreement could result in her being charged for the administrative leave used under the terms of the VSIP program and her signed VSIP agreement.  See  DAB Dkt. Entry No. 1 at 3-4.

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In her September 2, 2025 filing, Petitioner also contends:

Collecting the overpayment would be against equity and good conscience and not in the best interest of the United States.  There was no fraud, misrepresentation, fault, or lack of good faith on my part.  5 U.S.C. § 5584(b)(1).

P. Ex. 2 at 1.

The provisions of 5 U.S.C. § 5584 do not apply in this case.  Pursuant to 5 §U.S.C. § 5584(a):

A claim of the United States against a person arising out of an erroneous payment of pay or allowances made on or after July 1, 1960, or arising out of an erroneous payment of travel, transportation or relocation expenses and allowances, to an employee of an agency, the collection of which would be against equity and good conscience and not in the best interests of the United States, may be waived in whole or in part by—

(1)the authorized official; [or]
(2)the head of the agency when—. . . .

5 U.S.C. § 5584(a).

The “authorized official” is defined as “(1) the head of an agency, with respect to an agency or employee in the legislative branch; or (2) the Director of the Office of Management and Budget, with respect to any other agency or employee.”  5 U.S.C. § 5584(g).  As the administrative law judge adjudicating this SSA debt case, pursuant to 5 U.S.C. § 5514(a)(2) and 20 C.F.R. § 422.810(d), I am not the “authorized official,” nor am I the “head of the agency.”  See 5 U.S.C. § 5584(a).  My authority is limited to that of a Hearing official, as defined by 20 C.F.R. § 422.810(d).  Thus, I do not have the authority to waive Petitioner’s debt.  Further, making a determination on whether “[c]ollecting the overpayment would be against equity and good conscience[,] and not in the best interest of the United States” is also not within my authority.  See P. Ex. 2 at 1; 5 U.S.C. § 5514(a)(2); 20 C.F.R. §§ 422.810(d), (i)(1).

Therefore, I find that Petitioner owes a debt to the United States Government for salary overpayments made in pay periods 2025-07, 2025-08, and 2025-09.

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2. The total amount of Petitioner’s debt is $5,874.96.

Petitioner does not dispute that the overpayments were correctly calculated or otherwise raise any arguments concerning the amount of the debt.  See DAB Dkt. Entry Nos. 1, 7; P. Ex. 2.  Further, SSA has shown that it correctly calculated the amount of Petitioner’s debt based on a conversion of Petitioner’s 168 hours of administrative leave for pay periods 2025-07, 2025-08, and 2025-09 to leave without pay at Petitioner’s hourly salary of $34.97, less applicable recoverables, including tax and payroll withholdings.  DAB Dkt. Entry Nos. 1a at 9, 5 at 6-7; SSA Exs. 2, 3.

Specifically, SSA correctly determined that the overpayments made to Petitioner totaled $5,874.96 for pay periods 2025-07, 2025-08, and 2025-09.  See id.  Less applicable recoverables, including tax and payroll withholdings, the net total owed by Petitioner $5,141.77.  Id.

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 debt.

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 DAB Dkt. Entry Nos. 1, 7; P. Ex. 2.

I urge SSA to try to reach an agreement with Petitioner regarding repayment of the debt 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 hourly 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

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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 she challenged the debt 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 only delay in the proceedings resulted from SSA’s failure to timely forward Petitioner’s hearing request to CRD.  See DAB Dkt. Entry No. 2 at 2.

5. SSA’s failure to timely refer Petitioner’s hearing request to CRD is not a basis for finding that Petitioner owes no debt.

Petitioner appears to argue that the debt is invalid, and the case should be dismissed, because of SSA’s failure to adhere to the timeline provided by the regulations.  See DAB Dkt. Entry No. 7.  Despite receiving Petitioner’s request for hearing on June 5, 2025, SSA did not forward the hearing request to CRD for the appointment of an administrative law judge until July 24, 2025.  Specifically, in Petitioner’s August 14, 2025 response, Petitioner states:

Further, Respondent[’s] reason as to why they did not timely [forward] the [h]earing request [to CRD] lacks merit because they had ample time to confirm the validity of the debt as they were the ones who raised the issue. Further, it could have filed the [h]earing [r]equest timely and then address that issue.  It did not have to delay the [h]earing [r]equest to assert validity of debt.  Petitioner respectfully asks the Adjudicator to dismiss this case in favor of Petitioner.

DAB Dkt. Entry No. 7.

In SSA’s August 1, 2025 Late Submission Statement, SSA concedes that it failed to comply with its own regulatory requirement to “expeditiously” refer Petitioner’s hearing request to CRD for an administrative law judge adjudication.  DAB Dkt. Entry No. 4 at 1.  In its Late Submission Statement, SSA explains:

This failure to immediately forward the request was due to the novel nature of Petitioner’s debt which resulted from administrative leave she used prior to revoking her election to voluntarily retire and receive a Voluntary Separation Incentive Payment (VSIP).  SSA did not mean to delay the proceedings or otherwise harm Petitioner.  SSA sought only to determine if the debt was valid before proceeding.  Once SSA’s Office of Human Resources confirmed that Petitioner’s debt was valid, Petitioner’s hearing request was immediately forward to the CRD.

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Id. at 1-2.

The regulations require an administrative law judge to issue a decision in this case within 60 days of SSA’s receipt of Petitioner’s hearing request.  5 U.S.C. § 5514(a)(2)(D); 20 C.F.R. §§ 422.810(f)(1)(xiii) and 422.810(h)(4)(i).  SSA’s regulations specify that “[t]he recipient of an employee’s request for a hearing must forward the request for hearing 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).  Further, “[t]he timely filing of a petition for hearing shall stay the commencement of collection proceedings.”  5 U.S.C. § 5514(a)(2)(D); see 20 C.F.R. § 422.810(f)(1)(xi), (xii).  Once a hearing is requested, salary offset deductions cannot commence until after the hearing official issues a decision upholding the debt.  20 C.F.R. § 422.810(l)(4).

I find SSA’s explanation as to why Petitioner’s request for hearing was not expeditiously forwarded to CRD is reasonable.  Moreover, the delay in this case does not serve as a legal basis to invalidate a debt owed to the United States Government.  Despite this conclusion, SSA must act to expeditiously validate debts, and forward salary overpayment hearing requests for adjudication.

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

Given SSA’s failure to forward Petitioners’ request for hearing expeditiously to the hearing official to avoid jeopardizing the hearing official’s ability to issue a decision within this 60-day period, 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 49 days 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.

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VIII.     Conclusion

Petitioner is indebted to the United States Government in the amount of $5,874.96.  Less applicable recoverables, including tax and payroll withholdings, the net total owed by Petitioner is $5,141.77.

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