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Former employee means a former em made available to the employee for inployee of the Department who is enti spection and copying; tled to pay from the Department or an (h) The employee's right to request a other agency.

pre-offset hearing concerning the existPay means basic pay, special pay, in ence or amount of the overpayment or centive pay, retired pay, retainer pay, an involuntary repayment schedule; or, in the case of an individual not en (i) The applicable hearing procedures titled to basic pay, other authorized and requirements, including a statepay, including severance pay and/or ment that a timely petition for hearing lump sum payments for accrued annual will stay commencement of collection leave.

proceedings and that a final decision Paying agency means a Federal agen on the hearing will be issued not later cy currently employing an individual than 60 days after the hearing petition and authorizing the payment of his or

is filed, unless a delay is requested and her current pay.

granted; Secretary means the Secretary of the

(j) That any knowingly false or frivoDepartment of Education or an official

lous statements, representations or or employee of the Department acting

evidence may subject the employee to for the Secretary under a delegation of

applicable disciplinary procedures, authority.

civil or criminal penalties; and

(k) That where amounts paid or de(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716) ducted are later waived or found not

owed, unless otherwise provided by $32.3 Pre-offset notice.

law, they will be promptly refunded to At least 30 days before initiating a the employee. deduction from the disposable pay of

(Authority: 5 U.S.C. 5514, 31 U.S.C. 3716) an employee to recover an overpayment of pay or allowances, the Sec $32.4 Employee response. retary sends a written notice to the employee stating

(a) Voluntary repayment agreement.

Within 7 days of receipt of the written (a) The origin, nature and amount of

notice under $32.3, the employee may the overpayment;

submit a request to the Secretary to (b) How interest is charged and ad

arrange for a voluntary repayment ministrative costs and penalties will be

schedule. To arrange for a voluntary assessed, unless excused under 31

repayment schedule, the employee U.S.C. 3716;

shall submit a financial statement and (c) A demand for repayment, pro sign a written repayment agreement viding for an opportunity for the em

approved by the Secretary. An employee to enter into a written repay ployee who arranges for a voluntary rement agreement with the Department; payment schedule may nonetheless re

(d) Where a waiver of repayment is quest a waiver of the overpayment authorized by law, the employee's right under paragraph (b) of this section. to request a waiver;

(b) Waiver. An employee seeking a (e) The Department's intention to de waiver of collection of the debt that is duct 15 percent of the employee's dis authorized by law must request the posable pay, or a specified amount if waiver in writing to the Secretary the disposable pay is severance pay within 10 days of receipt of the written and/or a lump sum annual leave pay notice under $32.3. The employee must ment, to recover the overpayment if a state why he or she believes a waiver waiver is not granted by the Secretary should be granted. and the employee fails to repay the (c) Involuntary repayment schedule. If overpayment or enter into a written the employee claims that the amount repayment agreement;

of the involuntary deduction will cause (f) The amount, frequency, approxi extreme financial hardship and should mate beginning date and duration of be reduced, he or she must submit a the intended deduction;

written explanation and a financial (g) If Government records on which statement signed under oath or affirthe determination of overpayment are mation to the Secretary within 10 days not attached, how those records will be of receipt of the written notice under

(e) Formal discovery between the parties is not provided. (Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)

$32.3. An employee who fails to submit this financial information in a timely manner waives the right to object to the involuntary repayment schedule at a hearing under $32.5. The Secretary notifies the employee, in writing, whether the Secretary will reduce the rate of the involuntary deduction. (Authority: 5 U.S.C. 5514; 31 U.S.C. 3716) $32.5 Pre-offset hearing-general.

(a) An employee who wishes a review of the existence or amount of the overpayment or an involuntary repayment schedule may request a pre-offset hearing. The pre-offset hearing does not review:

(1) The denial of a waiver of repayment under 5 U.S.C. 5584;

(2) The involuntary repayment schedule or financial hardship caused by the amount of the involuntary deduction from the employee's disposable pay, unless the employee has submitted the financial statement and written explanation required under $32.4(c); and

(3) The determination under paragraph (b) of this section that the preoffset hearing is on the written submissions.

(b) Unless the Secretary determines that a matter reviewable under paragraph (a) of this section turns on an issue of credibility or veracity or cannot be resolved by a review of the documentary evidence, the pre-offset hearing is on the written submissions.

(c) A pre-offset hearing is based on the written submissions for overpayments arising from:

(1) A termination of a temporary promotion;

(2) A cash award;
(3) An erroneous salary rate;

(4) Premature granting of a withingrade increase;

(5) A lump sum payment for annual leave;

(6) Unauthorized appointment to a position;

(7) An error on time and attendance records; or

(8) Other circumstances where the Secretary determines that an oral hearing is not required.

(d) The hearing is conducted by a hearing official who is not an employee of the Department or under the supervision or control of the Secretary.

$32.6 Request for a pre-offset hearing.

(a) Except for an employee who has requested a waiver of collection of the debt under $32.4(b), an employee who wishes a pre-offset hearing must request the hearing within 15 days of receipt of the written notice given under $32.3. The Secretary waives the 15-day requirement if the employee shows that the delay was because of circumstances beyond his or her control or because of failure to receive notice and lack of knowledge of the time limit.

(b) An employee who has requested a waiver under $32.4(b) may request a hearing within 10 days of receipt of a determination by the Secretary denying a waiver.

(c) The request for a hearing must:
(1) Be in writing;
(2) State why the employee:

(i) Contests the existence or amount of the overpayment; or

(ii) Claims that the involuntary repayment schedule will cause extreme financial hardship;

(3) Include all documents on which the employee is relying, other than those provided by the Secretary under $32.3; any document which is a statement of an individual must be in the form of an affidavit; and

(4) Be submitted to the designated hearing official with a copy to the Secretary.

(d) If the employee timely requests a pre-offset hearing or the timelines are waived under paragraph (a) of this section, the Secretary:

(1) Notifies the employee whether the employee may elect an oral hearing; and

(2) Provides the hearing official with a copy of all records on which the determination of the overpayment and any involuntary repayment schedule are based.

(e) An employee who has been given the opportunity to elect an oral hearing and who does elect an oral hearing must notify the hearing official and the Secretary of his or her election in writing within 7 days of receipt of the notice under paragraph (d)(1) of this

section and must identify all proposed (3) At the discretion of the hearing witnesses and all facts and evidence official, about which they will testify. (f) Where an employee requests an

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716) oral hearing, the hearing official notifies the Secretary and the employee of

$32.8 Pre-offset hearing on the written

submissions. the date, time, and location of the hearing. However:

If a hearing is to be held on the writ(1) The employee subsequently may ten submissions, the hearing official elect to have the hearing based only on reviews the records and responses subthe written submissions by notifying mitted by the Secretary and the emthe hearing official and the Secretary ployee under $ 32.6. at least 3 calendar days before the date of the oral hearing. The hearing offi

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716) cial may waive the 3-day requirement for good cause when the employee noti

$32.9 Written decision. fies the hearing official before the date (a) The hearing official issues a writof the hearing; and

ten decision stating the facts sup(2) The request for a hearing of an porting the nature and origin of the employee who fails to appear at the debt and the hearing official's analysis, oral hearing must be dismissed and the

findings and conclusions as to the Secretary's decision affirmed.

amount of the debt and the repayment (Authority: 5 U.S.C. 5514; 31 U.S.C. 3716) schedule within 60 days of filing of the

employee's request for a pre-offset $32.7 Pre-offset oral hearing.

hearing, unless the employee requests, (a) Oral hearings are informal in na and the hearing official grants, a delay ture. The Secretary and the employee, in the proceedings. through their representatives, and by (b) The hearing official decides reference to the documentation sub

whether the Secretary's determination mitted, explain their case. The em of the existence and the amount of the ployee may testify on his or her own

overpayment or the extreme financial behalf, subject to cross examination.

hardship caused by the involuntary reOther witnesses may be called to testify only where the hearing official de

payment schedule is clearly erroneous.

A determination is clearly erroneous if termines that their testimony is rel

although there is evidence to support evant and not redundant. (b) The hearing official shall:

the determination, the hearing official, (1) Conduct a fair and impartial hear

considering the record as a whole, is ing; and

left with a definite and firm conviction (2) Preside over the course of the

that a mistake was made. hearing, maintain decorum, and avoid

(c) In making the decision, the heardelay in the disposition of the hearing. ing official is governed by applicable

(c) The employee may represent him Federal statutes, rules and regulations. self or herself or may be represented by (d) The hearing official decides the another person at the hearing. The em issue of extreme financial hardship ployee may not be represented by a caused by the involuntary repayment person whose representation creates an schedule only where the employee has actual or apparent conflict of interest. submitted the financial statement and

(d) Oral hearings are open to the pub written explanation required under lic. However, the hearing official may $32.4(c). Where the hearing official declose all or any portion of the hearing termines that the involuntary repaywhere to do so is in the best interests

ment schedule creates extreme finanof the employee or the public.

cial hardship, he or she must establish (e) Oral hearings may be conducted

a schedule that alleviates the financial by conference call

hardship but may not reduce the invol(1) If the employee is located in a city outside the Washington, DC Met

untary repayment schedule to a deduc

tion of zero percent. ropolitan area;

(2) At the request of the employee; or (Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)

$32.10 Deductions process.

(a) Debts must be collected in one lump sum where possible. If the employee does not agree to a lump sum that exceeds 15 percent of disposable pay, the debt must be collected in installment deductions at officially established pay intervals in the amount established under:

(1) A voluntary repayment agreement;

(2) An involuntary repayment schedule where no hearing is requested; or

(3) The schedule established under the written hearing decision.

(b) Installment deductions must be made over a period not greater than the anticipated period of employment, except as provided under paragraph (d) of this section. If possible, the installment payment must be sufficient in size and frequency to liquidate the debt in, at most, three years. Installment payments of less than $25 may be accepted only in the most unusual circumstances.

(c) Deductions must begin:

(1) After the employee has entered a voluntary repayment schedule;

(2) If a waiver is requested under $32.4(b), after the employee has been denied a waiver by the Secretary; or

(3) If a hearing is requested under $32.5, after a written decision.

(d) If the employee retires or resigns or his or her employment ends before collection of the debt is completed, the amount necessary to liquidate the debt must be offset from subsequent payments of any nature (for example, final salary payment and/or lump sum annual leave payment) due the employee on the date of separation. If the debt cannot be liquidated by offset from any such final payment due the employee on the date of separation, the debt must be liquidated by administrative offset pursuant to 31 U.S.C. 3716 from later payments of any kind due the employee, where appropriate. After the Secretary has complied with the procedures in this part, the Secretary may refer the debt to a paying agency for collection by offset under 5 CFR 550.1108.

(e) Interest, penalties and administrative costs on debts collected under this part must be assessed, in accord

ance with the provisions of 4 CFR 102.13.

(f) An employee's payment, whether voluntary or involuntary, of all or any portion of an alleged debt collected pursuant to this part may not be construed as a waiver of any rights which the employee may have under this part or any other provision of law, except as otherwise provided by law.

(g) Amounts paid or deducted pursuant to this part by an employee for a debt that is waived or otherwise found not owing to the United States or which the Secretary is ordered to refund must be promptly refunded to the employee. (Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)

PART 33—PROGRAM FRAUD CIVIL

REMEDIES ACT

Sec. 33.1 Basis and purpose. 33.2 Definitions. 33.3 Basis for civil penalties and assess

ments. 33.4 Investigation. 33.5 Review by the reviewing official. 33.6 Prerequisites for issuing a complaint. 33.7 Complaint. 33.8 Service of complaint. 33.9 Answer. 33.10 Default upon failure to file an answer. 33.11 Referral of complaint and answer to

the ALJ. 33.12 Notice of hearing. 33.13 Parties to the hearing. 33.14 Separation of functions. 33.15 Ex parte contacts. 33.16 Disqualification of reviewing official

or ALJ. 33.17 Rights of parties. 33.18 Authority of the ALJ. 33.19 Prehearing conferences. 33.20 Disclosure of documents. 33.21 Discovery. 33.22 Exchange of witness lists, statements

and exhibits. 33.23 Subpoenas for attendance at hearing, 33.24 Protective order. 33.25 Fees. 33.26 Form, filing and service of papers. 33.27 Computation of time. 33.28 Motions. 33.29 Sanctions. 33.30 The hearing and burden of proof. 33.31 Determining the amount of penalties

and assessments. 33.32 Location of hearing. 33.33 Witnesses. 33.34 Evidence. 33.35 The record.

33.36 Post-hearing briefs.

mit, favorable decision, ruling, status, 33.37 Initial decision.

or loan guarantee. 33.38 Reconsideration of initial decision. 33.39 Appeal to Department head.

(Authority: 31 U.S.C. 3809) 33.40 Stays ordered by the Department of

Claim means any request, demand, or Justice.

submission: 33.41 Stay pending appeal. 33.42 Judicial review.

(a) Made to the Department for prop33.43 Collection of civil penalties and as

erty, services, or money (including sessments.

money representing grants, coopera33.44 Right to administrative offset.

tive agreements, loans, insurance, or 33.45 Deposit in Treasury of United States. benefits); 33.46 Compromise or settlement.

(b) Made to a recipient of property, 33.47 Limitations.

services, or money from the DepartAUTHORITY: 31 U.S.C. 3801-3812.

ment or to a party to a contract or SOURCE: 53 FR 15675, May 3, 1988, unless

agreement with the Department: otherwise noted.

(1) For property or services if the

United States: $33.1 Basis and purpose.

(i) Provided the property or services; (a) Basis. This part implements the

(ii) Provided any portion of the funds Program Fraud Civil Remedies Act of for the purchase of the property or 1986, Pub. L. No. 99-509, 6101 through

services; or 6104, 100 Stat. 16674 (October 21, 1986), (iii) Will reimburse the recipient or to be codified at 31 U.S.C. 3801 through party for the purchase of the property 3812. This law (31 U.S.C. 3809) requires or services; or each Federal department head to pro (2) For the payment of money (inmulgate regulations necessary to im cluding money representing grants, coplement the provisions of the statute. operative agreements, loans, insurance, (Authority: 31 U.S.C. 3809)

or benefits) if the United States: (b) Purpose. This part:

(i) Provided any portion of the money (1) Establishes administrative proce

requested or demanded; dures for imposing civil penalties and

(ii) Will reimburse the recipient or assessments against persons who make,

party for any portion of the money submit, or present, or cause to be paid on that request or demand; or made, submitted, or presented, false,

(iii) Will guarantee or reinsure any fictitious, or fraudulent claims or writ portion of a loan made by the party; or ten statements to the Department or (c) Made to the Department which to its agents; and

has the effect of decreasing an obliga(2) Specifies the hearing and appeal tion to pay or account for property, rights of persons subject to allegations services, or money. of liability for those penalties and as

(Authority: 31 U.S.C. 3801(a)(3)) sessments.

Complaint means the administrative (Authority: 31 U.S.C. 3809)

complaint served by the reviewing offi$33.2 Definitions.

cial on the defendant under $33.7. As used in this part:

(Authority: 31 U.S.C. 3809) ALJ means an Administrative Law

Defendant means any person alleged Judge in the Department appointed

in a complaint under $33.7 to be liable pursuant to 5 U.S.C. 3105 or detailed to the Department pursuant to 5 U.S.C.

for a civil penalty or assessment under

$33.3. 3344. (Authority: 31 U.S.C. 3801(a)(7)(A))

(Authority: 31 U.S.C. 3809) Benefits, as used in the definition of

Department means the United States "statement," means anything of value,

Department of Education. including but no limited to any advan (Authority: 31 U.S.C. 3809) tage, preference, privilege, license, per

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