Lisa Kemp, DAB CR7005 (2026)

DECISION

Petitioner, Lisa Kemp, an employee of the Department of Health and Human Services (HHS), timely appealed HHS’s determination that she owes a gross debt of $2,160.00 (net amount of $1,481.16) arising from salary overpayments during the six pay periods ending March 21, 2026, through May 30, 2026.  For the reasons stated below, I find that Petitioner was overpaid $2,160.00 (net $1,481.16) and I AFFIRM HHS’s determination, subject to the accounting requirements set forth below. 

I.  Background and Procedural History

Petitioner is employed by HHS as a Program Management Officer, GS-14, Step 10, for the Centers for Disease Control and Prevention (CDC).  Departmental Appeals Board (DAB) Civil Remedies Division (CRD) Docket (Dkt.) Entry Numbers (Nos.) 5, 8.  On May 26, 2026, Petitioner executed an HHS Telework Agreement based on a reasonable accommodation, listing her home address in Forsyth, Georgia, as her alternative duty station, and permitting telework three days per week (Monday, Wednesday, Friday).  CRD Dkt. Entry No. 8; see also CRD Dkt. Entry No. 17 ¶ 2.  On June 15, 2026, a

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Standard Form 50 (SF-50) Notification of Personnel Action was processed for Petitioner pursuant to a Presidential directive requiring return to in-person work.  CRD Dkt. Entry No. 5.  The SF-50 changed Petitioner’s official duty station to an in-person office in Macon, Georgia, with a retroactive effective date of March 8, 2026.  CRD Dkt. Entry No. 5.  The SF-50 also reflects a reduction in Petitioner’s locality adjustment from $33,231.00 (Atlanta locality rate) to $23,830.00 (Macon locality rate), with adjusted basic pay changing from $172,915.00 to $163,514.00.  CRD Dkt. Entry No. 5 (boxes 12B, 20B, 12, 20).  Respondent represents that Petitioner was not reporting to the Atlanta, Georgia office during the period from March 2026 through June 2026.  CRD Dkt. Entry No. 17 ¶ 3. 

As a result of the change in duty station, a debt was generated for the six pay periods ending March 21, 2026, through May 30, 2026, reflecting a locality pay difference of $360.00 per pay period, for a gross total debt of $2,160.00.  CRD Dkt. Entry No. 17b (Exhibit 2).  The debt was offset by $678.84, representing refundable portions of taxes, benefits, and other deductions, leaving a net debt of $1,481.16.  Id.; CRD Dkt. Entry No. 1a at 1. 

On July 11, 2026, the Defense Finance and Accounting Service (DFAS), HHS’s payroll agent, sent Petitioner a debt notification letter stating the overpayment resulted from a "Personnel Transaction" and advising Petitioner of a net debt of $1,481.16.  CRD Dkt. Entry No. 1a at 1.  The letter instructed Petitioner that she had 30 calendar days from the date of the letter to request a hearing.  Id. at 2. 

On August 6, 2026, Petitioner electronically signed HHS Form 710, checking the box requesting a hearing to dispute “the existence of the debt and or the amount of the debt owed to HHS, or . . . the Department’s proposed repayment schedule.”  CRD Dkt. Entry No. 1.  On August 28, 2026, HHS Human Resources (HR) processed the request and filed it electronically with the DAB.  CRD Dkt. Entry No. 1. 

On September 3, 2026, I issued an Acknowledgment, Order to Show Cause, and Stay of Decision Deadline (Show Cause Order), noting that the governing regulation requires a hearing request within 15 days of notice, 45 C.F.R. § 33.6(a)(1), whereas the DFAS letter had erroneously stated a 30-day deadline.  CRD Dkt. Entry No. 2 at 2 n.1.  Collection activity and the 60-day decision deadline were stayed pending resolution of the timeliness question.  CRD Dkt. Entry No. 2 at 3, II. 

On September 4, 2026, Petitioner submitted documents in support of her request for hearing, including a Leave and Earnings Statement (LES) for pay period ending August 22, 2026, the SF-50 processed June 15, 2026, an April 9, 2026, email interim approval of her reasonable accommodation (RA), an email chain with HHS human resources, an HHS-990-2 RA telework agreement, and a RA request signed by her supervisor.  CRD Dkt. Entry Nos. 4-9. 

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On September 8, 2026, HHS filed a response conceding the debt notice’s defect in the deadline for Petitioner to file a hearing request, and stating that, if equitable discretion applied, it would find Petitioner’s hearing request timely.  CRD Dkt. Entry No. 11 ¶¶ 1–5.  On September 11, 2026, Petitioner filed her response, asserting her hearing request was timely under the (incorrect) 30-day instruction and asserting that the debt arose from an incorrect assignment of duty station.  CRD Dkt. Entry No. 13 at 1-2. 

On September 15, 2026, I issued an Order Lifting Stay, finding Petitioner’s hearing request timely filed, and setting a decision deadline of October 27, 2026.  CRD Dkt. Entry No. 14 at 3, n.1.  The Order also established a briefing schedule and tentatively scheduled a hearing for September 30, 2026, advising that an oral hearing would be held only if I determined the matter could not be resolved on the documentary record alone because of an issue of credibility or veracity is involved.  Id.  at 14 ¶ 7. 

On September 16, 2026, Fred Thomas III, Deputy Chief Operating Officer (Acting) of CDC, approved a memorandum request that Petitioner’s duty station be changed back to Atlanta, without requesting retroactive effect and with an effective date of September 6, 2026.  CRD Dkt. Entry No. 17c; see also CRD Dkt. Entry No. 17a (corresponding SF-50 processed on September 18, 2026). 

On September 22, 2026, Petitioner filed an Addendum asserting she received no advance notice that her pay “would be changed, reduced, or otherwise affected due to” due to the Macon duty-station assignment.  CRD Dkt. Entry No. 15 at 1.  Petitioner also advised that her duty station had since been administratively corrected back to Atlanta.  Id. at 1; see also CRD Dkt. Entry Nos. 16, 17a. 

On September 24, 2026, HHS filed its prehearing brief and exhibits (SF-50, Debt Calculation Worksheet, and Memorandum to Change Official Worksite).  CRD Dkt. Entry Nos. 17, 17a–17c. 

On September 28, 2026, I canceled the oral hearing scheduled for September 30, 2026, because neither party requested an oral hearing nor explained why the matter could not be resolved on the documentary record alone.  CRD Dkt. Entry No. 18 at 1-2.  I explained this matter would be decided as a paper hearing based on the written record.  Id. at 2. 

The record is now complete and ready for decision. 

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II.  Issues

I will decide the following issues in this case: 

1.  Whether Petitioner owes a debt to the United States Government arising from a salary overpayment;

2.  If so, whether the gross amount of $2,160.00, and the resulting balance of $1,481.16 after amounts already collected, 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., HHS imposed a repayment schedule), whether the terms of the repayment schedule are appropriate. 

5 U.S.C § 5514(a)(2)(D); 45 C.F.R. §§ 33.4(a)(7), 33.6(a)(1). 

III.  Jurisdiction

The statute authorizing these proceedings provides an employee with an opportunity for a hearing concerning an agency’s determination of the existence or amount of an employee’s debt, as well as, where applicable, the terms of a repayment schedule established other than by written agreement between the employee and agency.  See 5 U.S.C. § 5514(a)(2)(D).  The statute further provides that the hearing may be conducted by an administrative law judge appointed by the head of the agency.  5 U.S.C. § 5514(a)(2). 

The Department’s implementing regulations identify the matters that may be addressed in a hearing concerning salary offset.  See 45 C.F.R. §§ 33.2, 33.7(a)(2).  The scope of this proceeding therefore encompasses the issues necessary to determine whether the debt may properly be collected through salary offset, including the existence and amount of the debt and any applicable defenses to collection.  See 45 C.F.R. §§ 33.2, 33.6(d)(2), 33.7(c).  Accordingly, my jurisdiction in this proceeding extends to determining whether Petitioner owes the alleged debt, the amount of any debt owed, and, if applicable, the terms of any repayment schedule established other than by written agreement.  See 5 U.S.C. § 5514(a)(2)(D); 45 C.F.R. §§ 33.4(a)(7), 33.6(a)(1). 

Petitioner also raises concerns regarding the timing of the collection, the notice she received concerning the debt, and her ability to seek a waiver.  See, e.g., CRD Dkt. Entry No. 4.  Those matters are addressed below to the extent they bear on the issues within my jurisdiction.  I do not have authority in this proceeding to grant a waiver of the debt. 

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IV.  Admission of Evidence

No party has objected to the admission of the other party’s submitted exhibits.  Petitioner submitted a request for hearing and supporting documents, including her LES for the pay period ending August 22, 2026; the SF-50 reflecting the duty station change; emails with HHS Human Resources; and documents regarding her RA request.1  CRD Dkt. Entry Nos. 4-9, 16.  HHS submitted a prehearing brief and three exhibits.  CRD Dkt. Entry Nos. 17, 17a–17c.  In the absence of any objection from either party, I admit HHS’s submissions as HHS Exhibits (Exs.) 1-3 (CRD Dkt. Entry Nos. 17a–17c) and Petitioner’s submissions as P. Exs. 1-7 (CRD Dkt. Entry Nos. 4-9, 16). 

V.  Applicable Law

Federal agencies are required to collect debts owed to the United States arising from salary overpayments.  5 U.S.C. § 5514(a)(1).  An employee disputing such a debt may appeal only three issues:  (1) the existence of the debt; (2) the amount of the debt; and (3) if applicable, the terms of a repayment schedule established other than by written agreement.  5 U.S.C. § 5514(a)(2)(D); 45 C.F.R. §§ 33.4(a)(7), 33.6(a)(1), 33.6(d)(2). 

An agency must determine an employee’s locality pay based upon the employee’s “official worksite.” 5 C.F.R. § 531.604(b)(2).  The 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 a telework employee, the agency determines the official worksite on a case-by-case basis, and that determination is “within the sole and exclusive discretion of the authorized agency official, subject only to [Office of Personnel Management] review and oversight.” 5 C.F.R. § 531.605(d).  The official worksite must be located within a locality pay area in which the employee regularly performs work.  5 C.F.R. § 531.605(a)(1). 

Prior to initiating collection by salary offset, the agency must provide the employee written notice of intent to offset and an opportunity to petition for a hearing.  45 C.F.R. § 33.3(c).  An agency may make partial, limited deductions from the four pay periods immediately preceding issuance of a notice of intent to offset without separate prior written notice of offset.  45 C.F.R. § 33.3(d)(1). 

An administrative law judge has no authority to compromise, waive, or forgive a validly existing debt.  Waiver of an erroneous payment of pay may be granted only by the Secretary or designee, upon separate application, where collection would be against equity and good conscience and not in the best interest of the United States, and where

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there is no indication of fraud, misrepresentation, fault, or lack of good faith by the employee.  5 U.S.C. § 5584; 45 C.F.R. § 33.1(c)(3). 

VI.  Discussion

A.  Petitioner is indebted to the United States Government due to a salary overpayment.

Petitioner’s official duty station (ODS) was determined via SF-50 effective March 8, 2026, to be Macon, Georgia, and that determination governed Petitioner’s locality pay during the six pay periods at issue.  CRD Dkt. Entry No. 17a (HHS Ex. 1).  That determination was made by the authorized agency official pursuant to the discretion afforded under 5 C.F.R. § 531.605(d), and Petitioner has not identified any procedural defect in the issuance of the SF-50 itself.  Although Petitioner disputes the underlying duty-station change, her disagreement with the agency’s determination does not, by itself, authorize me to direct HHS to revise the personnel action.  The agency’s designation of an employee’s official worksite, including retroactive correction of that designation, “is within the sole and exclusive discretion of the agency official, subject only to OPM review and oversight.”  5 C.F.R. § 531.605(d)(4). 

Petitioner’s principal argument is that the underlying duty-station change was erroneous and resulted in an incorrect pay rate and overpayment calculation.  In her response to the Order to Show Cause, Petitioner requests that HHS correct her duty station retroactively, recalculate the affected pay periods, and provide updated personnel and payroll records. CRD Dkt. Entry No. 13, § IV.  She also argues that the resulting debt should be reconsidered after the underlying personnel action is corrected.  See CRD Dkt. Entry No. 15 at 1. 

However, the dispositive question for purposes of my authority under 5 U.S.C. § 5514(a)(2)(D) is whether a debt exists and whether its amount was properly determined.  This proceeding does not authorize me to direct the agency to change the effective date of its official-worksite determination.  Equitable arguments concerning lack of notice or absence of fault may be raised through the applicable waiver process under 5 U.S.C. § 5584, but do not, standing alone, eliminate an otherwise valid debt.  45 C.F.R. § 33.1(c)(3); see also CRD Dkt. Entry No. 14 at 4, C.2.  (ALJ has “no authority to waive or forgive an otherwise valid debt even if it was caused entirely by HHS’s error”). 

Petitioner further requests that I direct HHS to correct the duty station in its personnel and payroll systems, recalculate the affected pay periods, restore backpay beginning in pay period 15, and produce relevant personnel, payroll, and audit records.  CRD Dkt. Entry No. 13, §§ IV, VI.  Those requests seek corrective personnel and payroll action beyond the relief I may order in this salary-offset proceeding.  Under 5 C.F.R.

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§ 531.605(d), the agency determines an employee’s official worksite, subject to OPM review and oversight.  I therefore cannot substitute my judgment for the agency’s determination or direct HHS to make a retroactive correction.  Petitioner may pursue a request for correction through the applicable agency process. 

Because Petitioner’s official worksite was Macon, Georgia, during the relevant pay periods under the SF-50 processed June 15, 2026, and Petitioner was paid during that period at the higher Atlanta-area locality rate, an overpayment debt exists under the operative official worksite determination.  The subsequent administrative change from Macon back to Atlanta does not, by itself, alter the official-worksite designation applicable to the earlier pay periods.  The September 18, 2026, SF-50 changed Petitioner’s duty station back to Atlanta effective September 6, 2026, a date that postdates the overpayment period at issue (pay periods ending March 21, 2026, through May 30, 2026) by several months.  See CRD Dkt. Entry No. 17a.  The September 16, 2026, memorandum approving this change did not request retroactive effect.  CRD Dkt. Entry No. 17 ¶ 6; CRD Dkt. Entry No. 17c (HHS Ex. 3).  Accordingly, the later correction does not change the effective date of the earlier Macon designation.  Unless HHS revises that determination through the applicable administrative process, I must apply the operative designation in deciding whether the resulting salary overpayment constitutes a debt.  See CRD Dkt. Entry No. 15 at 2. 

Petitioner’s assertion that she did not receive advance notice of the locality-pay reduction does not, by itself, eliminate an otherwise established debt.  Any request for waiver based on lack of notice or absence of fault must be pursued through the applicable waiver process.  CRD Dkt. Entry No. 15 at 2. 

B.  Petitioner owes a gross debt of $2,160.00 and a net debt of $1,481.16 after offsets.

HHS’s Debt Calculation Worksheet reflects a locality pay differential of $360.00 per pay period for six pay periods ending March 21 through May 30, 2026, for a total gross debt of $2,160.00.  CRD Dkt. Entry No. 17b (HHS Ex. 2); CRD Dkt. Entry No. 17 ¶ 4.  For each pay period, the worksheet list gross pay of $6,628.00 as paid and $6,268.00 as the amount that should have been paid.  CRD Dkt. Entry No. 17b. 

The worksheet further identifies an offset of $678.84, leaving a net debt of $1,481.16.  Id.; CRD Dkt. Entry No. 1a at 1.  Although the SF-50 reflects annual pay figures that do not, when simply divided across 26 biweekly pay periods, produce exactly the $360.00 differential stated in the worksheet, the worksheet expressly identifies the amounts paid and the amounts that should have been paid for each of the six pay periods at issue.2 

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CRD Dkt. Entry Nos. 17a (Ex. 1), 17b (Debt Calculation Worksheet).  The record does not explain the difference between the annual salary figures and the per-pay-period amounts.  Nevertheless, the worksheet provides a specific calculation of the asserted debt for each affected pay period. 

Petitioner has not specifically disputed the calculation of the debt amount of $2,160.00 gross and $1,481.16 net after the initial offset of $678.84.  See CRD Dkt. Entry Nos. 13, 15.  Her submissions instead challenge the underlying duty-station determination and assert that she did not receive advance notice of the locality pay reduction.  Id.  The absence of a specific objection does not relieve HHS of its burden to establish the existence and amount of the debt.  Based on the Debt Calculation Worksheet and supporting records, I find that HHS has established a gross debt overpayment of $2,160.00 and the net principal debt of $1481.16, after the initial $678.84 offset. 

C.  The remaining debt must reflect all collections and adjustments.

HHS collected $722.02 during the pay period ending August 22, 2026, pursuant to 45 C.F.R. § 33.3(d)(1).  CRD Dkt. Entry No. 4; see also CRD Dkt. Entry No. 17 ¶ 5.  Petitioner has requested documentation identifying the specific pay periods covered by this deduction and confirmation that no further deductions occurred after the stay entered on September 3, 2026.  CRD Dkt. Entry No. 13 at 2-3.  The record before me does not contain a response to this specific document request, nor does it establish whether any deductions were taken while the stay was in effect. 

No formal repayment schedule other than the debt letter’s default 15% involuntary salary offset provision, CRD Dkt. Entry No. 1a at 2, and the initial salary collection identified above appears in the record.  Because the standard 15% involuntary deduction default was identified in the DFAS notice and has not been shown in this record to have been superseded by a different negotiated schedule, I direct HHS to account for the August 22, 2026, collection against the net principal debt of $1,481.16 and to ensure that the balance reflects all collections and adjustments.  HHS must also confirm that no collection inconsistent with the stay occurred while the stay was in effect. 

If the repayment schedule is properly before me, I must determine whether its terms comply with 5 U.S.C. § 5514 and the applicable regulations, rather than presume that the default provision resolves the issue. 

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Assuming the $722.02 collection was credited against the net principal debt of $1,481.16, and no additional collections, refunds, or adjustments occurred, the remaining balance is $759.14. 

VII.  Waiver

Petitioner’s, September 22, 2026, Addendum raises considerations sounding in equity — specifically, an asserted lack of advance notice that her pay would be reduced due to the Macon designation.  CRD Dkt. Entry No. 15 at 1.  Although Petitioner’s lack of notice argument does not, by itself, establish that the debt is invalid or incorrectly calculated, it may be relevant to a separate request for waiver.  My authority in this proceeding is limited to determining whether a debt exists, whether its amount is correct, and, where applicable, whether a repayment schedule established other than by written agreement is appropriate. 5 U.S.C. § 5514(a)(2)(D); 45 C.F.R. §§ 33.4(a)(7), 33.6(a)(1).  I have no authority to waive or forgive an otherwise valid debt.  45 C.F.R. § 33.1(c)(3); CRD Dkt. Entry No. 14 at 3. 

Section 33.1(c)(3) expressly preserves an employee’s ability to request waiver of an erroneous payment under 5 U.S.C. § 5584 and to challenge the amount of validity of a debt through the applicable procedures.  Accordingly, I do not decide whether Petitioner qualifies for a waiver based on lack of notice, absence of fault, or other equitable considerations. 

VIII.   Conclusion and Order

For the reasons stated above, I conclude that Petitioner owes a debt to the government in the gross amount of $2,160.00 arising from salary overpayments during six pay periods ending March 21 through May 30, 2026.  After the initial offset of $678.84, the net principal debt is $1,481.16.  HHS subsequently collected $722.02 from Petitioner’s pay, leaving a remaining balance of $759.14, provided that the $722.02 collection was credited against the net principal debt and no other collections or adjustments occurred.  HHS shall ensure that the final balance reflects all collections and adjustments and that no collection inconsistent with the stay is included.  Any repayment schedule imposed without written agreement must comply with the applicable statutory and regulatory requirements. 

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