SUBJECT:

Matrice Bullock,

Petitioner,

Social Security Administration,

Respondent

DECISION

Petitioner, Matrice Bullock, is indebted to the United States in the amount of $5010.36, plus penalties and interest accruing since November 10, 2005, and the debt may be collected by Administrative Wage Garnishment (AWG).

I. Background

The Social Security Administration (SSA) notified Petitioner by letter dated February 14, 2003 that she was indebted to the government in the amount of $3004.10. The notice states that the alleged debt arose from SSA's payment of health insurance premiums for Petitioner while she was in a non-pay status. The notice further indicates that Petitioner should have been advised of the debt before she terminated her employment with SSA. The notice requested payment but also advised Petitioner that she had a right to dispute the debt, submit evidence, request a hearing, and/or request a waiver of collection of the debt.

SSA sent Petitioner another notice dated October 11, 2005, that she was indebted to the government in the amount of $5010.36. The notice states that the alleged debt arose from an overpayment, which appears to be related to Petitioner's being granted advanced annual and sick leave in 1999, 2000, and 2001, before she resigned from federal employment on October 17, 2002. The October 2005 notice also indicates that Petitioner should have been advised of the debt before she terminated her employment with SSA. The notice requested payment but also advised Petitioner that she had a right to dispute the debt, submit evidence, request a hearing, and/or request a waiver of collection of the debt.

On August 13, 2006 and September 13, 2006, Pioneer Credit Recovery, Inc. (Pioneer), at the request of the U.S. Department of the Treasury (Treasury), notified Petitioner that Pioneer was collecting a debt to the government of $7383.48. The notices indicate that the debt was referred from SSA. The September 13, 2006 notice from Pioneer indicates that if Petitioner does not pay the debt or enter an acceptable repayment plan before October 13, 2006, Treasury, on behalf of SSA, will issue a wage garnishment order to collect the debt at a rate up to 15 percent of her disposable pay per pay period until the entire debt, including interest, penalties, and costs, is paid in full. The September 13, 2006 notice advised Petitioner that she could inspect the SSA records related to her debt and that she could request a hearing before October 4, 2006, and Treasury would not issue the wage garnishment order until a decision was made on the request for hearing.

Petitioner completed a request for hearing dated October 3, 2006, in which she indicates that she does not owe the $7383.48 debt alleged in the Pioneer notices and that she only learned of the alleged debt a few months prior to receiving the Pioneer notices. She indicates that she requested proof of the debt but that it has not been provided. It appears from date/time stamps on a hand-written note that Pioneer received the request for hearing on October 4, 2006.

Edwina Bailey, Financial Management Analyst for SSA, forwarded the request for hearing and related documents to the Departmental Appeals Board (DAB), Civil Remedies Division (CRD), attached to a letter dated October 18, 2006. Ms. Bailey indicates in her letter that Petitioner has requested a hearing under the AWG process. Ms. Bailey indicates that the matter is forwarded for review and scheduling a hearing.

The case was assigned to me for hearing and decision on October 27, 2006. Counsel for SSA entered their appearance with courtesy copies submitted by email on November 16, 2006 at 10:52 a.m. EST.

On November 17, 2006, I issued an Order that SSA address the following issues:

Under what statutory provision, regulatory provision, delegation of authority by the Commissioner of SSA (the Commissioner), or other lawful authority do I have to exercise jurisdiction and decide this case that is related to an administrative wage garnishment against an individual who may or may not presently be a federal employee?

If I do have jurisdiction and/or authority to decide this matter, do the regulations of the Commissioner at 20 Code of Federal Regulations (C.F.R.) Part 422 or the regulations of the Secretary of Health and Human Services (the Secretary) at 45 C.F.R. Part 285 control?

SSA was directed to respond not later than November 27, 2006. I also provided that SSA could submit any additional argument or documentary evidence in support of its position as to the existence of a debt, its amount, and whether or not Petitioner had proper notice. I further specified that Petitioner could submit not later than November 29, 2006, any documents that she wanted me to consider before issuing a decision on December 4, 2006. Because Petitioner asserts in her request for a hearing that she has not been provided proof of the debt, all documents submitted to my office with the request for hearing were forwarded to her with my November 17-Order. SSA filed its response to my November 17-Order on November 27, 2006, with nine exhibits (SSA Ex.). No submission has been received from Petitioner.

II. Discussion

A. Issue

Pursuant to 31 U.S.C. � 3720D(b)(5) and 31 C.F.R. � 285.11(f)(2), a debtor may request a hearing, either oral or written at the agency's option, to challenge the existence or amount of a debt or the terms of any repayment schedule. See also 20 C.F.R. � 422.425. In this case, Petitioner has not asserted that there was any repayment schedule and I see no evidence that she ever agreed to a repayment schedule. In her request for hearing, Petitioner asserts that she does not owe the debt alleged. Accordingly, the only issue before me is whether a debt exists and its amount.

I advised the parties in my Order of November 17, 2006, that I perceived no issue of credibility or veracity and, subject to their submissions, I did not anticipate that a hearing for the taking of oral testimony or the hearing of oral argument would be necessary. After review of the documents before me, I conclude that there is not an issue of credibility or veracity that would bear upon the issue before me and this case may be resolved upon documentary review. Accordingly, I conclude that no oral hearing is necessary. 31 C.F.R. � 285.11(f)(3).

B. Findings, Analysis and Conclusions

The following numbered headings are my conclusions of law followed by my factual findings and analysis.

1. I have jurisdiction or authority to conduct the requested hearing in this case based upon the request of the Commissioner for Social Security.

I directed that SSA address this issue because I found no statutory or regulatory authority for me to assume responsibility to conduct a hearing in this matter given my assignment to the Department of Health and Human Services (HHS) and the fact that SSA became independent from the HHS in 1995. Pub.L. No 103-296, Social Security Independence and Program Improvements Act of 1994 (Aug. 15, 1994). SSA responded that SSA cases subject to 31 U.S.C. � 3720D(b)(5) are heard by the HHS Departmental Appeals Board (DAB) pursuant to a memorandum of understanding (MOU). SSA Response to November 17, 2006 Order (SSA Response) at 2.

Nevertheless, I conclude that I have the Commissioner's authority to hear and decide this case. Congress has authorized the head of all executive, judicial, and legislative agencies that administer programs that give rise to claims for non-tax debts to effect AWG against non-federal employees, in appropriate cases. 31 U.S.C. � 3720D(a). Congress specified certain procedural requirements that must be satisfied to effect AWG, including affording the debtor an opportunity for a hearing. 31 U.S.C. � 3720D(b) & (c). Pursuant to 31 U.S.C. � 3720D(h), the Secretary of the Treasury issued regulations to implement AWG that are applicable to all federal agencies. 31 C.F.R. � 285.11(a). Pursuant to 31 C.F.R. � 285.11(f), each agency is to prescribe regulations providing for hearings in AWG cases and the hearings may be oral or a "paper hearing," as the agency deems appropriate. The "hearing official" may be any individual the agency head determines qualified, including an ALJ. 31 C.F.R. � 285.11(f)(6). This matter was forwarded to the DAB by SSA for assignment to an administrative law judge (ALJ) for review and hearing on October 18, 2006. The DAB accepted the case and assigned the case to me for hearing and decision on October 27, 2006. Counsel for SSA has further confirmed that the Commissioner authorizes that this case be heard and decided by an ALJ assigned by the DAB. Given these facts, I find sufficient grounds upon which to assert my authority or jurisdiction to hear and decide this matter.

2. The only debt at issue before me is the $5010.36, plus penalties and interest, that allegedly arose from an overpayment related to Petitioner's being granted advanced annual and sick leave in 1999, 2000, and 2001, before she resigned from federal employment on October 17, 2002, as specified in the SSA notice to Petitioner dated October 11, 2005.

The materials submitted by Ms. Edwina Bailey at SSA with the request that the case be assigned to and ALJ for hearing, included evidence of two alleged debts. However, SSA has advised me that the older, $3004.10 debt that allegedly arose from unpaid health insurance premiums and was the subject of the SSA notice dated February 14, 2003, is not at issue before me because collection of that debt by AWG has not yet been initiated. Thus, I conclude that only the alleged debt of $5010.36, plus interest and penalties, is at issue before me.

3. Petitioner has received sufficient notice of the alleged debt.

SSA argues that Petitioner was on notice that she was indebted to the government based upon her Leave and Earnings Statement (LES) for the pay period that ended on October 19, 2002, which showed a negative annual leave balance of 94.30 hours and a negative sick leave balance of 220.00, reflected as advanced leave in both categories on that LES. SSA Ex. 1. SSA argues that further notice was provided by the letter to Petitioner dated October 11, 2005, which advised her that she was indebted to the government in the amount of $5010.36. The notice states that the alleged debt arose from an overpayment, which appears to be related to Petitioner's being granted advanced annual and sick leave in 1999, 2000, and 2001, before she resigned from federal employment on October 17, 2002. The October 2005-letter advised Petitioner that the debt was due November 10, 2005, that she could submit evidence to show the debt is not owed or should not be collected, that a hearing could be requested, that Petitioner had a right to inspect and copy records related to the debt, that she could request a waiver under certain circumstances, that interest and penalties would be assessed if the debt was not paid within 30 days from the date of the letter, and that the debt could be collected by administrative offset or AWG if not paid. I note that the letter was addressed to Petitioner at the same address as appears on her LES. SSA Ex. 3. Finally, SSA argues that Pioneer gave Petitioner sufficient notice by its letter of September 13, 2006. The Pioneer letter from September 13, 2006, referred to a debt of $7383.48 owed to SSA of which Petitioner had previously been notified by SSA and that was subject to AWG. The Pioneer letter did not further describe the debt. The Pioneer letter advised Petitioner of the possibility of entering a repayment agreement, her right to inspect and copy records related to the debt, or to request a hearing. The Pioneer letter is addressed to a different address than the address that appeared on Petitioner's LES at SSA Ex. 1 and on the October 2005-SSA letter. SSA Ex. 7; SSA Response at 7-9. There is no question that Petitioner received the Pioneer letter as Petitioner requested a hearing and the request for hearing bears the same mailing address for Petitioner as appears on the Pioneer letter. The required contents for an AWG notice are set forth at 31 C.F.R. � 285.11(e) and 20 C.F.R. � 422.405. Considering the contents of the October 2005-SSA notice and the September 2005-Pioneer notice, I find that those notices met the regulatory requirements.

Petitioner asserts in her request for hearing that she did not know where the debt came from and she first learned of the debt a few months previous to her request for hearing when she was called about making payment arrangements. There is no question that Petitioner received the September 2005-Pioneer notice and that notice clearly advised her of her right to copy and inspect the files related to the debt, so Petitioner had the opportunity to discover the source of the debt. Further, with my November 17, 2006 Order, the entire file submitted for hearing by Ms. Bailey was reproduced and sent to Petitioner at the address she provided on her request for hearing. Finally, the certificate of service with the SSA response shows that the SSA response and its exhibits were sent to Petitioner. Thus, I conclude that any argument by Petitioner that she is unaware of the source of the debt is without merit.

4. Petitioner is indebted to the government in the amount of $5010.36 due to an overpayment of pay related to advanced annual and sick leave in 1999, 2000, and 2001, that was converted to Leave Without Pay.

In her request for hearing Petitioner checked the box that states she does not owe the debt. She does not specifically dispute the amount of the debt.

According to the record of leave data for Petitioner at SSA Ex. 2, she used 127 hours of advanced sick leave in 1999 when her pay rate was $16.54 per hour; she used 50 hours of advanced sick leave in 2000 when her pay rate was $17.36 per hour; she used 43 hours of advanced sick leave in 2001 when her pay rate was $18.02 per hour. The document also reflects that she used 26.30 hours of advanced annual leave in 2001 at a pay rate of $18.02 per hour and 68 hours of advanced annual at the rate of $18.55 per hour. After deductions were made for various benefits, the net pay to Petitioner for these hours was $5010.36. When Petitioner left federal employment with these outstanding leave balances, they had to be converted to leave without pay and the net pay Petitioner had received had to be recovered as a debt to the government. 5 C.F.R. � 630.209(a). I have no reason to doubt that Petitioner was advanced sick and annual leave as reflected by the official records produced by SSA. It appears that the calculations support the alleged debt of $5010.36. I conclude that Petitioner was advanced sick and annual leave, that she had negative leave balances when she separated from government employment, that the negative leave balances had to be converted to leave without pay, and, as a result Petitioner was overpaid for those hours in the net amount of $5010.36. Accordingly, I conclude that Petitioner has a debt to the government in the amount of $5010.36 with interest and penalties accruing since November 10, 2005, 30 days after the October 11, 2005-SSA notice to Petitioner requesting payment.

III. Conclusion

Based upon my review of the documents in this case, I conclude that Petitioner is indebted to the United States in the amount of $5010.36, plus penalties and interest accruing since November 10, 2005, and that such debt may be collected by AWG.

Keith W. Sickendick

Administrative Law Judge