Cassandra Boutelle, ALJ Ruling 2026-20 (HHS-CRD April 30, 2026)

DISMISSAL

Petitioner, Cassandra Boutelle, a former United States Department of Health and Human Services (HHS or agency) employee, requested a hearing to dispute the existence of an alleged debt in the amount of $8,690.72 owed to HHS.  HHS contends that dismissal of the hearing request is appropriate due to lack of jurisdiction.  The applicable debt laws and regulations do not entitle Petitioner as a “previous employee” to a hearing under the circumstances of this case.  Therefore, Petitioner’s request for hearing is hereby DISMISSED due to lack of jurisdiction.

I.       Procedural Background

On February 6, 2026, Petitioner, through counsel, submitted a hearing request using HHS Form 710, to dispute the existence of the alleged debt, in the amount of $8,690.72, owed to HHS.  Departmental Appeals Board (DAB) Docket (Dkt.) Entry Number (No.) 1.   Accompanying Petitioner’s HHS Form 710 is a letter from the Defense Finance and Accounting Service (DFAS) informing Petitioner of the debt and due process rights, and a notice of appearance from Petitioner’s counsel.  DAB Dkt. Entry Nos. 1; 1a; 1b.  On February 10, 2026, an HHS employee emailed Petitioner’s hearing request and supporting documents to the DAB.  DAB Dkt. Entry No. 1c.  The email states “attached

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is the request from former [Center for Disease Control] employee Cassandra Boutelle for a hearing to dispute the validity of her debt.”  Id. at 1.

On February 17, 2026, I issued an Acknowledgment, Order to Show Cause, and Stay of Decision Deadline (Order to Show Cause) directing HHS to address jurisdictional authority over the alleged debt and to provide detailed information regarding its status.  DAB Dkt. Entry No. 3 at 2.  I also provided a deadline for Petitioner to respond to HHS’s filing.  Id.

On February 25, 2026, Petitioner filed her response to the Order to Show Cause.  DAB Dkt. Entry No. 4.  Petitioner states that she worked during the period of time HHS alleges she was overpaid which resulted in the accumulation of this debt.  Petitioner also argues that “there is nothing in the administrative policies or procedures that restricts the authority or jurisdiction of the Administrative Law Judge to have a hearing regarding the validity of the full amount of the debt regardless of any portion that may have been offset through wage theft of Petitioner’s final paycheck.”  Id. at 2-3.

HHS filed its response on February 26, 2026, arguing that the request for hearing should be dismissed because Petitioner is “not entitled to a hearing on the debt,” since the agency is neither seeking an involuntary salary deduction from a current employee’s pay or seeking garnishment of non-federal wages of a former employee.  DAB Dkt. Entry No. 6 at 3-4.

On March 5, 2026, Petitioner filed a reply to HHS’s response to the Order to Show Cause along with two exhibits.  DAB Dkt. Entry Nos. 8; 8a; 8b.  Petitioner argues 45 C.F.R. § 33.4 was not followed, raises tax concerns related to petitioner’s repayment, and claims Petitioner’s future federal employment “will be deterred because she will have a record of having owed a debt to the federal government.”  DAB Dkt. Entry No. 8 at 2-3.

Having reviewed the record before me, this case is ripe for a determination on whether I have jurisdiction to proceed.

II.      Issues Addressed

The following issues are addressed in this ruling:

(1)      Whether Petitioner is entitled to a hearing in this case under the relevant debt laws and regulations; and

(2)      Even if Petitioner is entitled to a hearing, whether I have the authority to exercise jurisdiction over the issues raised in Petitioner’s request for hearing.

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III.     Relevant Fact and Positions

For purposes of deciding whether dismissal is appropriate, I rely on the following facts and statements to support my findings.

1. On October 20, 2025, while Petitioner was furloughed due to a lapse in federal appropriations, the Center for Disease Control (CDC) processed an extension for a term limited appointment of Petitioner’s employment not to exceed October 31, 2028.  DAB Dkt. Entry No. 8 at 1.
2. After the furlough period ended, Petitioner continued working for the CDC until December 23, 2025.  Id.
3. On December 23, 2025, HHS processed an SF-50 retroactively terminating Petitioner’s temporary appointment effective November 3, 2025.  Id. at 1-2.
4. On January 2, 2026, Petitioner received her final Civilian Leave and Earnings Statement (LES) which included a salary offset deduction for “indebtedness collected from retroactive earnings and/or adjusted deductions.” CRD Dkt. Entry No. 8b.
5. On January 10, 2026, Petitioner received a letter from DFAS indicating she owed a debt to the United States Government for the salary she was paid from the period of November 3, 2025, through her actual last date of work on December 23, 2025.  DAB Dkt. Entry No. 8 at 2.

IV.    Legal Authority and Analysis

I can only address the merits of Petitioner’s case if I first find that a statute, regulation, or other relevant legal authority gives Petitioner a right to a hearing and gives me the authority to conduct that hearing.  If I determine that no such provision exists, then I must dismiss the case for lack of jurisdiction.  Cf. Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006) (explaining that if a court lacks subject matter jurisdiction over a case, it “must dismiss the complaint in its entirety”).

The laws and regulations authorizing me to conduct HHS debt hearings include: (a) the statute codified at 5 U.S.C. § 5514 and the implementing HHS regulations located at 45 C.F.R. Part 33; (b) the HHS regulations located at 45 C.F.R. Part 32; and (c) potentially, the HHS regulations located at 45 C.F.R. Part 30.

The relevant laws and regulations, however, only authorize me to hear and decide a narrow set of issues after the agency has taken specific steps in connection with a disputed debt.  Here, HHS contends Petitioner’s claim is moot because the Petitioner is

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“not entitled to a hearing on the debt.”  DAB Dkt. Entry No. 6 at 3.   Specifically, HHS argues 45 C.F.R. § 33.3(c)(2) applies to “employees” but Petitioner “is a former employee” and thus the regulation does not apply to her.  Id.  As explained below, I agree with HHS and I conclude I am not authorized to provide Petitioner with a hearing under the present circumstances of this case.  Absent express authority to proceed, I must dismiss Petitioner’s request for hearing.

1. Petitioner is not entitled to a hearing under 5 U.S.C. § 5514 and 45 C.F.R. Part 33

The procedures federal agencies must follow prior to collecting a debt from a federal employee via salary offset (i.e. deductions from the employee’s regular pay) are outlined in 5 U.S.C. § 5514.  Pursuant to the statute, the agency must provide the employee with at least 30 days’ notice of its intent to initiate salary offset and give the employee the opportunity to request a hearing to dispute the existence or amount of the debt, and/or the terms of a repayment schedule established other than by written agreement.  5 U.S.C. § 5514(a)(2).

The HHS regulations implementing 5 U.S.C. § 5514, located at 45 C.F.R. Part 33, authorize employee salary offset hearings to be presided over by a DAB administrative law judge and outlines the procedures governing such hearings.  See 45 C.F.R. §§ 33.2; 33.6; 33.7(a)(2).  Specifically, the regulations define “employee” as “any individual currently employed by [a federal] agency.”  45 C.F.R. § 33.2 (emphasis added).  Throughout the record, Petitioner acknowledges and reiterates that she is no longer an employee of HHS.  See DAB Dkt. Entry Nos. 4 at 2, 5; 8 at 1.  Moreover, there is no indication that HHS is seeking to initiate salary offset against Petitioner as a former employee.  CRD Dkt. Entry No. 6 at 2.  Therefore, I find that Petitioner, as a former employee, is not entitled to a hearing under 5 U.S.C. § 5514 and 45 C.F.R. Part 33.

2. Petitioner is not entitled to a hearing under 45 C.F.R. Part 32

The regulations located at 45 C.F.R. Part 32 were promulgated to implement the administrative wage garnishment provisions of the Debt Collection Improvement Act of 1996.  See 68 Fed. Reg. 15,092-15,096 (March 28, 2003).  According to the drafters, the purpose of the rule is to allow HHS “to garnish the disposable pay of non-Federal employees to collect delinquent non-tax debts owed to the United States without first obtaining a court order.”  Id. at 15,092 (emphasis added).  Accordingly, 45 C.F.R. Part 32 authorizes the HHS Secretary to issue orders to employers to withhold up to 15% of a debtor’s disposable pay.  45 C.F.R. §§ 32.6, 32.8.

Before HHS can initiate garnishment proceedings against a debtor under Part 32, the agency must provide at least 30 days’ written notice of its intent to initiate such

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proceedings.  45 C.F.R. § 32.4(a).  Among other requirements, the notice must also provide the debtor with an opportunity for a hearing before an ALJ or other qualified individual, “in accordance with § 32.5, concerning the existence or the amount of the debt or the terms of the proposed repayment schedule under the garnishment order. . . .” See id. §§ 32.4(a)(3)(iii); 32.5.  In other words, a debtor is not entitled to a hearing under the administrative wage garnishment provisions unless and until HHS provides the required notice of its intent to garnish the debtor’s non-federal wages.

Here, HHS has not provided written notice to Petitioner stating an intent to initiate administrative wage garnishment proceedings against her.  Because HHS has not initiated administrative garnishment proceedings by providing the required notice to Petitioner, I find that Petitioner is not entitled to a hearing under 45 C.F.R. Part 32.

3. Petitioner is not entitled to a hearing under 45 C.F.R. Part 30

The regulations located at 45 C.F.R. Part 30 outline the general procedures HHS follows in claims and debt collection actions.  Potentially relevant here, 45 C.F.R. § 30.12 provides the procedures applicable to administrative offset, which is when the government withholds funds owed to the debtor to satisfy a debt.  See id. § 30.2 (defining “administrative offset”).

Administrative offset “may be initiated only after the debtor has been sent written notice of the type and amount of the debt” and “the intention of the Department to initiate administrative offset to collect the debt.”  45 C.F.R. § 30.12(c)(2)(i).  The notice must also provide the debtor with “the opportunity for a review within the Department of the determination of indebtedness.”  Id. § 30.12(c)(2)(ii)(C).  Thus, similar to the administrative wage garnishment regulations discussed above, a debtor’s right to request departmental review does not accrue under this section unless and until HHS provides written notice of its intent to initiate administrative offset.

Here, HHS has not issued Petitioner a notice that it intends to collect the alleged debt via administrative offset.  Therefore, I find that Petitioner is not presently entitled to departmental review under 45 C.F.R. § 30.12.

4. Petitioner has not identified any law or regulation which authorizes me to conduct a hearing in this case

Petitioner claims that the alleged overpayment resulted from agency error and that due process and notice requirements were not met, therefore, a hearing is necessary to dispute the validity of the debt.  DAB Dkt. Entry No. 8.  While I understand Petitioner’s argument, as aforementioned, I lack jurisdiction to address any claims regarding this debt until official notice has been provided to Petitioner by HHS of its intention to collect the debt.  Even if I had jurisdiction, the issue before me would be limited to determining if

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the debt is owed and if the amount is valid.  Nevertheless, I note that the Petitioner continued working for the agency until December 23, 2025, despite lacking official CDC employment status after the agency retroactively changed Petitioners employment status.  Accordingly, I recommend HHS consider a waiver of the remaining debt and a reimbursement of any salary offset to Petitioner.

V.     Order

I find that Petitioner is not entitled to a hearing on the alleged debt and has not identified any issues subject to my jurisdiction.  Accordingly, Petitioner’s request for hearing is DISMISSED WITHOUT PREJUDICE.  Petitioner may exercise any available right to a hearing or review regarding the alleged debt if HHS initiates a qualifying collection action in the future.  Petitioner should direct any tax concerns to the Office of Human Resources.

IT IS SO ORDERED.