IN THE CASE OF:	  

		BOARD DATE:	  4 June 2014

		DOCKET NUMBER:  AR20130015239 


THE BOARD CONSIDERED THE FOLLOWING EVIDENCE:

1.  Application for correction of military records (with supporting documents provided, if any).

2.  Military Personnel Records and advisory opinions (if any).


THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE:

1.  The applicant requests, in effect, correction of his records by changing dates to show he is entitled to the $2,500.00 reenlistment bonus (REB) and $20,000.00 Student Loan Repayment Program (SLRP) incentive written in his enlistment contract.

2.  The applicant states:

* he is having funds recouped that he believes he is eligible to keep
* he learned he was ineligible for his REB though a California Army National Guard (CAARNG) Incentives Task Force (ITF) audit
* his REB addendum was signed on 16 December 2004, but it should have been signed at the time he reenlisted 

3.  The applicant provides:

* ITF Loan Repayment Audit Form
* 10 National Student Loan Data System (NSLDS) printouts
* Citibank statement with loan balances
* Army National Guard (ARNG) Selected Reserve Incentive Program (SRIP) Guidance for Fiscal year 2007, 1 January 2007 through 31 March 2007 (Policy Number 07-04) extract
* Citibank payment records
* ITF Bonus Audit Form
* DA Form 4836 (Oath of Extension of Enlistment or Reenlistment), dated 4 May 2004
* National Guard Bureau (NGB) Form 600-7-3-R-E (Annex R to DA Form 4836)
* SRIP Policy Number 05-01 extract
* DD Form 214 (Certificate of Release or Discharge from Active Duty)
* DA Form 1059 (Service School Academic Evaluation Report)
* Orders Number 266-47, issued by U.S. Army Garrison, Aberdeen Proving Grounds, Aberdeen Proving Grounds, MD, dated 22 September 2004
* DA Form 4836, dated 22 March 2007
* ARNG Retirement Points History Statement, dated 17 April 2012
* Notification of Termination/Recoupment of Incentives memorandum, dated 2 May 2012
* NGB Form 600-7-5-R-E (Annex L to DD Form 4 (Enlistment/Reenlistment Document – Armed Forces of the United States) SLRP Addendum)

CONSIDERATION OF EVIDENCE:

1.  After having prior honorable service in the U.S. Navy, the applicant enlisted in the CAARNG on 23 August 2002.  His NGB Form 21 (Enlistment/Reenlistment Agreement – ARNG) shows he acknowledged he would undergo training in military occupational specialty (MOS) 63Y (Track Vehicle Mechanic).

2.  On 1 September 2002, he was assigned to the U.S. Army Reserve Control Group (Reinforcement).

3.  On 9 May 2003, the applicant enlisted in the CAARNG for a 1-year period for MOS 12B (Combat Engineer).

4.  A DA Form 4836, dated 4 May 2004, shows the applicant extended his enlistment for 3 years.

5.  U.S. Army Garrison, Aberdeen Proving Ground, MD, Orders 266-47, dated 22 September 2004, awarded him MOS 63Y.

6.  On 16 December 2004, the applicant executed an Annex R to DD Form 4 in which he acknowledged he would receive an REB of $2,500.00.  His initial payment of $1,250.00 would be effective the date his extension contract took effect and a subsequent payment of $1,250.00 would be processed upon completion of 3 years of service.

7.  On 22 March 2007, the applicant extended his enlistment in the CAARNG for a 6-year period.

8.  In conjunction with his extension, the applicant executed an Annex L to DD Form 4 in which he indicated he was a prior-service applicant.  He further indicated he held the primary MOS for which he was extending (MOS 63H) which was a critical MOS authorized for the SLRP.  He indicated he had one existing loan in the amount of $6,739.01, but the total amount of repayment would not exceed $20,000.00.  He acknowledged he understood his incentive would be terminated if he voluntarily transferred out of the contracted MOS; or if he failed to extend his enlistment for time served in the Inactive National Guard (ING) within 30 days of return to his unit; or if he failed to become MOS qualified within 24 months after unit inactivation, reorganization, or relocation.

9.  On 1 June 2012, the CAARNG notified the applicant that the CAARNG had audited his REB and SLRP incentive payments and determined that $7,525.00 would be recouped due to payments made in violation of Army regulatory and Department of Defense (DOD) guidance.

10.  A memorandum from the CAARNG ITF Commander, dated 2 July 2013, subject:  ABCMR Appeal for (Applicant), supported approval of the applicant's appeal.  He stated:

	a.  The ITF audited the applicant and discovered he had received an overpayment of his SLRP incentive and he was not eligible for the REB for which he received funds.  There is no evidence of fraud on the part of the Soldier.

	b.  On 22 March 2007, the applicant reenlisted in pay grade E-5 in MOS 63Y and, at the time, he was eligible for an SLRP incentive not to exceed $20,000.00.  To receive the incentive, the applicant should have contracted for a term of service other than 3x5, 6x2, or 8x0 and have at least one qualifying loan.  The applicant had valid loans in the amount of $6,625.00.

	c.  The applicant contracted for a $20,000.00 SLRP entitlement at the time of his reenlistment.  After submitting documents to the State Incentives Manager in 2009 (eligible to receive an incentive for 2008 and 2009), a payment in the amount of $9,000.00 was submitted to the lender on his Federal Stafford Loan on 29 May 2009 in excess of what was allowable by law (based on the loan amount and schedule, the actual payment would have been two payments of $993.75 or $1,987.50).  Carrying out the proper payment schedule to the end of his contracted term (2010 through 2013) would only authorize an additional 4 payments, or $3,975.00, for a total entitlement of $5,962.50.  He was overpaid $3,037.50 for the term of the contract and he fulfilled obligation requirements for initial and continued eligibility of his SLRP under the above SRIP Policy 07-04.

	d.  At the time of his reenlistment on 4 May 2004, the applicant was not eligible to contract for an REB in accordance with SRIP Policy 07-04.  He would had to have contracted for the REB at the time of reenlistment for a term of service of either 3 or 6 years, be MOS qualified in the position for which he was extending, and be in a valid vacant position.  He was required to be MOS qualified at the time of contracting.

	e.  The applicant did not become MOS qualified until 9 December 2004.  The REB incentive was for $2,500.00.  He was paid half on 12 January 2005 and the other half on his third-year contract anniversary.  He would have fulfilled obligations required for eligibility of his REB had he contracted on the date of reenlistment and was MOS qualified at that time.

	f.  To be eligible for the $2,500.00, a properly-executed REB addendum is required at the time of reenlistment and the applicant would have to have been MOS qualified in his unit of assignment at the time of reenlistment, otherwise relief from recoupment is the only favorable action regarding the REB.  Relief from recoupment is also the only favorable action regarding the $3,037.50 SLRP overpayment.

11.  A memorandum from the CAARNG Legal Assistance Officer, dated 3 July 2013, subject:  ABCMR Appeal for (Applicant), stated he agreed that changing the applicant's reenlistment date to 16 December 2004 and changing his SLRP addendum date to 10 December 2007 would relieve him from recoupment.  Further, the applicant relied on his Readiness Noncommissioned Officer (NCO) for his REB and he relied on the CAARNG for SLRP payments made on his behalf to Citibank.

12.  On 21 July 2013, the Chief, Personnel, Programs, Resources, and Manpower Division, NGB, provided an advisory opinion wherein he stated:

	a.  On 9 May 2003, the applicant enlisted as a prior-service Soldier for a 
1-year period in MOS 12B.  He was not duty MOS 12B qualified because his prior-service MOS from the U.S. Navy did not transfer to the ARNG.  He had not yet attended MOS training when he extended his enlistment on 5 May 2004 for 3 years for a $2,500.00 REB.  He did not sign the REB addendum until 16 December 2004 after he graduated from duty MOS qualified training and a bonus control number (BCN) was not requested until 22 December 2004.  He received his first bonus payment on 12 January 2005 in the amount of $1,250.00.  On 23 May 2007, the second and final installment of the bonus was paid in the amount of $1,250.00.  The applicant was not qualified to extend for an incentive in a non-duty MOS qualified status in accordance with DOD Instruction 1205.21 (Reserve Component Incentive Programs), chapter 5, paragraph E5.1.1.7:  "I hold the military grade and skill qualification commensurate with the vacancy."  His addendum was not signed until 7 months after the extension which is not authorized per National Guard Regulation 600-7 (Incentives Programs), paragraph 1-13c, which states "an addendum cannot be completed after the fact in order to gain eligibility for an incentive or the SLRP."

	b.  On 22 March 2007, the applicant  extended in the CAARNG for 6 years. Although a BCN was not requested until 3 May 2007, the documents on file support that an incentive was offered at the time of the extension.  Although he was not authorized to add loans under the policy under which he contracted, he had two eligible loans in the amount of $6,625.00 with a yearly entitlement of $993.60 and a maximum entitlement over 6 years of $5,961.60.  On 18 April 2009, the CAARNG State Incentive Office made three anniversary payments in the amount of $3,000.00 each for a combined amount of $9,000.00.  Title 10, U.S. Code, section 16301, paragraph 3b, only authorizes payment of 15 percent on eligible loans:  "The portion or amount of a loan that may be repaid under subsection (a) is 15 percent or $500.00, whichever is greater, for each year of service, plus the amount of any interest that may accrue during the current year."  Contractually, the applicant is still owed three anniversary payments, but the maximum entitlement over the lifetime of his contract has already been exceeded by $3,048.40.

	c.  The CAARNG should proceed with the recoupment process for the REB in the amount of $2,500.00.  NGB cannot retroactively authorize amendment of the date on his extension document to equal the date on his REB addendum to afford MOS eligibility to the Soldier.  DOD Financial Management Regulation 7000.14-R, chapter 2, provides guidance for the repayment process of unearned portions of bonuses, which includes the applicant's REB case.  NGB further recommends proceeding with the recoupment process of overpayment on his SLRP contract in the amount of $3,048.40.  Although the applicant is asking to change the date on his extension document and SLRP addendum to a later time to incorporate ineligible loans, NGB does not have the authority to make such changes.  An overpayment cannot be expunged by the inclusion of other loans by substituting the overpayment as regularly-scheduled payments toward the new loans.

13.  On 22 August 2013, the Chief, Personnel Policy Division, NGB, provided a second advisory opinion wherein he stated:

	a.  The applicant's REB addendum was completed at the direction of his Readiness NCO and the applicant followed the guidance of the subject matter expert.  In the interest of fairness and equity, the applicant should retain the bonus money because he became MOS qualified at the first opportunity to meet the intent of the bonus.

	b.  Reenlistment bonuses are authorized by Title 37, U.S. Code, section 308b.  The wording is not as specific as the corresponding regulation.  Paragraph (a)(2) states the Soldier must reenlist "in a designated military skill."  It does not specify that the Soldier must already be qualified in the MOS.

	c.  Signing a bonus addendum after the fact is not allowed per National Guard Regulation 600-7, paragraph 1-13c, which states, "All required addenda will be completed at the time of enlistment/reenlistment or extension.  An addendum cannot be completed after the fact to gain eligibility for an incentive…"

	d.  The applicant's addendum was signed after the fact because he was not eligible at the time of the contract because he was not MOS qualified.  A Soldier cannot be awarded a bonus for an MOS for which he is not yet qualified.  National Guard Regulation 600-7, paragraph 3-4d, states an REB can be awarded to a Soldier who, "is qualified in and awarded the MOS for his/her position…"

	e.  DOD modified the policy guidance on repayment of bonuses and educational benefits in a memorandum, dated 21 May 2008, Subject:  Repayment of Unearned Portions of Bonuses, Special Pay, and Educational Benefits or Stipends.  The memorandum states, "A member who enters into a written agreement with specified conditions of a pay or benefit, is entitled to the full amount of the pay or benefit if the member fulfills the conditions for that pay or benefit.  The DSD [Deputy Secretary of Defense] policy memorandum recognized that, at that time, members were subject to statutory repayment authorities with varied requirements, and that repayment would be aggressively pursued for any unearned portion of a pay or benefit, as appropriate.  However, it was also understood there may be circumstances that support to the need to refrain from taking such action."

	f.  When the erroneous payment is the fault of the Government, the recoupment may be waived in accordance with Title 10, U.S. Code, section 2774, paragraph (a), which states, "A claim of the United States against a person arising out of an erroneous payment of any pay or allowances…the collection of which would be against equity and good conscience and not in the best interest of the United States, may be waived in whole…"

	g.  The applicant was eligible for 6 years of repayment at an amount of $993.75 per year for a total of $5,962.50.  This amount is determined by Title 10, U.S. Code, section 16301, paragraph (b), which states 15 percent of the loan or $500.00, whichever is greater, for each year of service.  The amount is calculated:

* $6,625 x 15 percent = $993.75
* $993.75 x 6 years = $5,962.50

	h.  Since his contract indicated $6,739.01 in student loans, of which 15 percent was to be paid annually for 6 years, he was contractually entitled to $1,010.85 per year for a 6-year total of $6,065.10.

	i.  His lender was paid $9,000.  This exceeds his 6-year contractual limit of $6,065.10 by $2,934.90.

	j.  Overpayment by the Government in the amount of $2,934.90 should be recouped.  An audit determined the applicant had $6,625.00 worth of qualifying student loans.  He entered into a contract to receive SLRP benefits based on the student loans amounting to $6,739.01; however, he received $9,000.00 in SLRP benefits.  The excess received by his lender was allocated to pay for other student loans the applicant incurred after his contract.  Since these later loans are after the fact and, therefore, not covered by his extension contract, these later loans are not eligible to be repaid under this contract.

	k.  The State of California agrees with the NGB recommendation.

14.  On 23 August 2013, a copy of the advisory opinion was provided to the applicant for an opportunity to respond; however, a response was not received within the time allotted.

15.  Office of the Under Secretary of Defense memorandum, dated 21 May 2008, subject:  Repayment of Unearned Portions of Bonuses, Special Pay, and Educational Benefits or Stipends, states:

	a.  A member who enters into a written agreement with specified conditions for receipt of pay or benefit is entitled to the full amount of the pay or benefit if the member fulfills the conditions for that pay or benefit.  Any failure to fulfill the service requirements specified in the written agreement may result in termination of the agreement and the member's repayment of an unearned portion of the pay or benefit.

	b.  Under all circumstances, the Secretary concerned has the discretion to, at some point in the process, render a case-by-case determination that the member's repayment of or the Military Department's full payment of an unpaid portion of a pay or benefit is appropriate based on the following:
* contrary to a personnel policy or management objective
* against equity and good conscience; or
* contrary to the best interest of the United States

DISCUSSION AND CONCLUSIONS:

1.  Although the applicant reenlisted on 5 May 2004, he executed an Annex R for a $2,500.00 REB incentive on 16 December 2004 under the guidance of the subject matter expert.  In the interest of fairness and equity, he should retain the REB because he became MOS qualified at the first opportunity to meet the intent of the bonus.

2.  He contracted for repayment of $6,739.01 worth of eligible student loans; however, an audit determined he had only $6,625.00 worth of qualifying student loans.  His lender was paid $9,000.00 and this was applied to other student loans incurred after his contract and exceeded the authorized amount.  Therefore, based upon his contract, his records should be corrected to show a recoupment only in the amount of $2,934.90 (not $3,048.40) for overpayment by the Government toward the eligible loans.

BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF 

___x____  ___x____  ____x___  GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

1.  The Board determined the evidence presented is sufficient to warrant a recommendation for partial relief.  As a result, the Board recommends that all Department of the Army and State Army National Guard records of the individual concerned be corrected by:

	a.  showing an exception to policy was approved authorizing him to retain the $2,500.00 enlistment bonus and

	b.  showing an exception to policy was approved to recoup SLRP payments only in the amount of $2,934.90.

2.  The Board further determined the evidence presented is insufficient to warrant a portion of the requested relief.  As a result, the Board recommends denial of so much of the application that pertains to changing the dates of his SLRP contract.



      ___________x____________
               CHAIRPERSON

I certify that herein is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in this case.

ABCMR Record of Proceedings (cont)                                         AR20130015239



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ABCMR Record of Proceedings (cont)                                         AR20130015239



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