UNITED STATES OF AMERICA MERIT SYSTEMS PROTECTION BOARD MICHAEL C. CEBZANOV, Appellant, v. 100 M.S.P.R. 170 DOCKET NUMBER PH-831M-03-0095-B-1 OFFICE OF PERSONNEL MANAGEMENT, Agency. DATE: September 7, 2005 (CSA8120264) Michael C. Cebzanov, Philadelphia, Pennsylvania, pro se. Kenneth R. Brown, Washington, D.C., for the agency. BEFORE Neil A. G. McPhie, Chairman Barbara J. Sapin, Member OPINION AND ORDER 1 The appellant has filed a timely petition for review of an initial decision after remand that affirmed the determination by the Office of Personnel Management (OPM) that the appellant had received an overpayment of retirement benefits. For the reasons set forth below, we GRANT the petition for review, VACATE the remand initial decision, and REMAND this matter once again for further adjudication. Document #: 110426 v 1
2 BACKGROUND 2 OPM issued a reconsideration decision finding inter alia that the appellant had received an overpayment of $3,140.06 and that he was not entitled to a waiver of the overpayment. MSPB Docket No. PH-831M-03-0095-I-1 Initial Appeal File (IAF 1), Tab 4, Subtab 2. On appeal to the Board, the administrative judge issued an initial decision affirming OPM s reconsideration decision as to the amount and waiver of the overpayment. Id., Tab 8. 3 On petition for review, the Board vacated the initial decision with regard to the finding that the appellant had received an overpayment of $3,140.06 and remanded the matter to the administrative judge for further adjudication of the existence and amount of any overpayment. Cebzanov v. Office of Personnel Management, 96 M.S.P.R. 562 (2004). On remand, after OPM submitted further documentation of its calculation of the overpayment, the administrative judge affirmed OPM s determination that the appellant had received a $3,140.06 overpayment. MSPB Docket No. PH-831M-03-0095-B-1 Initial Appeal File (IAF 2), Tab 10. 4 On petition for review of the remand initial decision, the appellant argues that OPM failed to comply with the Board order to provide readily understandable calculations to support its position that he had received an overpayment. He further asserts that he has not been paid the correct amount of his annuity and that OPM owes him $1,730.10. Petition for Review File, Tab 1. OPM has timely responded to the petition for review. Id., Tab 3. After the close of the record on review, the appellant replied to OPM s response. Id., Tab 4. Because our regulations do not provide for such a reply, we have not considered it in reaching this decision. See 5 C.F.R. 1201.114(i). ANALYSIS 5 The circumstances leading up to this appeal are set forth in detail in our previous decision at Cebzanov, 96 M.S.P.R. 562, 2-8. Briefly, in May 2000,
3 OPM informed the appellant that he had received an overpayment of $9,740. Subsequently, OPM agreed to recalculate his benefit, based on a corrected last day in a pay status of August 14, 1997. After doing so, OPM informed the appellant that he still had an overpayment of $3,140.06 and affirmed the determination on reconsideration. IAF 1, Tab 4, Subtabs 2, 3, 4. This reconsideration decision led to the instant appeal. Id., Tab 1. The administrative judge affirmed the reconsideration decision with regard to the existence and amount of the overpayment. Id., Tab 8. Because it appeared that OPM had used an incorrect formula for calculating the appellant s benefit, the Board remanded the appeal to afford OPM an opportunity to recalculate the amount of the annuity due to the appellant using the correct percentages and reductions for the proper lengths of time and to compare the annuity due with the benefits actually paid to determine whether the appellant had received an overpayment. OPM was to provide the appellant and the administrative judge with its calculations in sufficient detail so that the appellant could readily understand them. Cebzanov, 96 M.S.P.R. 562, 9. 6 OPM bears the burden of proving, by a preponderance of the evidence, the existence and amount of an annuity overpayment. Siefring v. Office of Personnel Management, 94 M.S.P.R. 547, 3 (2003). On remand, OPM has submitted a straightforward and readily understandable analysis of the amount of the gross monthly benefit the appellant was entitled to receive from the August 15, 1997 effective date of his retirement to December 1, 2003. IAF 2, Tab 6, Exhibit 2. OPM has also submitted documents which list the gross amount of each monthly annuity payment due and which indicate that from September to December 1997 the gross annuity benefit due totals $6,282.27; the benefit due for 1998 totals $11,407; the benefit due for 1999 totals $7,644; for 2000, the amount due totals $7,812; for 2001 the total is $8,004; and for 2002 up to the payment made October 1 the total is $6,810. Id., Exhibit 4, pages 1-6. These amounts total $47,959.27. The question of whether the appellant received an overpayment, and
4 if so how much, should be easily answered by comparing the gross amount due, $47,959.27, with the gross amount actually paid to the appellant up to the October 1, 2002 payment. 7 OPM has submitted additional documents detailing the amounts that it states were actually paid to the appellant, which are not so easily understood. According to the Summary of Payments for 1999/2000, which are described as interim payments, the appellant was paid a total of $29,964 beginning in May 1999 and ending in May/June 2000. IAF 2, Tab 6, Exhibit 3, page 1. A second Summary of Payments, described as the record of annuity payments made to the appellant in 2000, contains a column labeled Gross Annuity. No annuity payments are recorded in that column for the months of January to May 2000. In the box for June 2000, $21,713.83 is entered; and the gross annuity column shows payments of $680 per month from July to December 2000. These amounts in the gross annuity column total $25,793.83. Id., page 2. In 2001, the appellant received a gross annuity of $8,364; and in 2002 up to the October 1 payment, he received $7,120. Id., pages 3-4. These amounts recorded on Exhibit 3, pages 2-4, total $41,277.83. 8 In addition to the $21,713.83, described as an adjustment payment for period 2/6/98 to 5/30/2000, the summary of payments for 2000 contains entries on the line for June 2000 of -$29,964.00 in the interim pay column and of $9,740.00 in the advanced annuity column. IAF 2, Tab 6, Exhibit 3, page 2. In its response to the appeal, OPM s representative explained that the calculation of the $3,140.06 overpayment was the result of subtracting the gross annuity totals due (Exhibit 4) from the sum of the gross annuity totals paid and the $9,740 advanced annuity (Exhibit 3, page 2). The representative further explained the $9,740 figure, stating: When OPM originally finalized [the appellant s] retirement, we determined that he had been overpaid in interim payments. Therefore, we advanced him $9,740 in annuity so that his annuity would continue uninterrupted. It is important to note that [the appellant] was not due any of
5 the $9,740. Simply adjusting the annuity commencing date from February 6, 1998 to August 15, 1997 does not make this amount disappear. Re-computing the annuity with the new commencing date only lessens the original overpayment. Id., Tab 6. 9 OPM has not explained in what sense it advanced the appellant $9,740. The documents do not establish that OPM made an actual payment of an additional $9,740 when it initially determined that there had been an overpayment of $9,740. Rather, it appears that OPM made estimated interim payments until May/June 2000 totaling $29,964 and that it determined in May 2000 that those estimated payments exceeded the amount of annuity to which the appellant was entitled by $9,740. IAF 1, Tab 4, Subtab 5 at 31-36. OPM did not collect this alleged overpayment. After recalculating the appellant s annuity based on the correct commencement date, OPM determined that the appellant was entitled to $47,959.27 in annuity benefits up to and including the October 1, 2002 payment. Id., Tab 6, Exhibit 4. At that point, OPM should have compared that total due with the total actually paid to determine whether there had been an overpayment or underpayment. 1 1 Exhibit 5 purports to make this comparison, but the figures used to calculate the amounts actually paid before June 1, 2000, differ from those listed in Exhibit 3, page 1, as interim payments. For instance, Exhibit 5 shows that from March 1, 1999, to November 30, 1999, the appellant was paid a gross monthly annuity of $666. IAF 2, Tab 6, Exhibit 5. The record of interim payments shows that on June 1 through December 1, 1999, he was paid $1570 per month. Id., Exhibit 3, page 1. Nor is Exhibit 3, page 2, sufficient to enable the proper comparison to be made. As stated above, it shows a total gross annuity paid in 2000 of $25,793.83 which is the sum of an adjusted payment of $21,713.83 and 6 monthly payments of $680 each. It is unclear whether the $21,713.83 represents actual payments made or the total gross annuity due as of June 1, 2000. OPM s October 16, 2001 reconsideration decision, prepared before it recalculated the annuity due, was sent to the appellant with a document containing a calculation of the overpayment using the same figure of $21,713.83 as the initial payment due. IAF 1, Tab 4, Subtab 5 at 25-30. Exhibit 3, page 2, also includes the interim payment total of $29,964 expressed as a negative number and the advanced annuity of $9,740, but there is no explanation in the record of
6 10 Because we are still unable to determine whether OPM correctly calculated the amount of any overpayment, we find it necessary to remand this matter once again to the administrative judge for further adjudication. See Hollifield v. Office of Personnel Management, 83 M.S.P.R. 563, 20 (1999) (the Board remanded the appeal to the regional office so that OPM could clarify its documentary evidence that was unexplained, not self-explanatory, and technically difficult to understand). The administrative judge shall afford OPM an opportunity to show that, after comparing the total gross benefits due with gross benefits actually paid, the appellant received an overpayment. The appellant may submit evidence and argument to show that OPM s calculation is incorrect. 2 ORDER 11 Accordingly, we REMAND this matter to the Northeastern Regional Office for further adjudication consistent with this Opinion and Order. OPM shall present evidence, in readily understandable form, of the gross amounts actually paid to the appellant. OPM must provide accurate statements of the gross amounts of all checks sent to the appellant or amounts directly deposited into the the relationship among these three items on the Summary of Payments. Adding $21,713.83 to $9,740 results in a total of $31,453.83 and not $29,964. Adding the negative numbers for health benefits, federal tax, and life insurance on the line for June 2000 plus the $3.87 net payment to -$29,964 equals -$31,453.83. Nevertheless, the record does not explain the source of the $21,713.83 figure. It is unlikely that OPM sent the appellant a check for that amount in June 2000, when it believed that the appellant had received an overpayment of $9,740. The numbers on the line for June 2000 appear to be an accounting device to reconcile the appellant s retirement account, rather than a record of actual payments made. 2 The record is further complicated by the fact that not all of the documents listing amounts due and amounts paid clearly indicate whether the document refers to benefits earned or benefits paid. OPM s representative stated during a telephone conference that payment is made on the first of the month for benefits earned the previous month. IAF 2, Tab 7. Thus, in comparing totals of benefits, it is necessary to insure that the comparison is always made between totals of benefits due to be paid on the first of the month and totals of benefits actually paid on the first of the month. This confusion appears to be the basis for the appellant s belief that OPM still owes him $1730.10.
7 appellant s bank account from his first interim payment up to and including the October 1, 2002 payment. The administrative judge shall insure that OPM has followed the Board s explicit instruction and that the record is adequately developed. After affording the appellant an opportunity to refute OPM s evidence, the administrative judge shall make a finding of how much the appellant was paid in benefits and then determine whether an overpayment exists and the amount of any such overpayment. FOR THE BOARD: Washington, D.C. Bentley M. Roberts, Jr. Clerk of the Board