IN THE CASE OF:	  

		BOARD DATE:	  14 October 2014

		DOCKET NUMBER:  AR20140007216 


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 relief from recoupment of:

* an overpayment of a reenlistment/extension bonus (REB) 
* an officer accession bonus (OAB) 
* Student Loan Repayment Program (SLRP) funds paid on his behalf

2.  He states he relied on the subject matter expertise of the California Army National Guard (CAARNG) State Incentives Manager, and his placement in a non-critical area of concentration (AOC) was command-directed.

3.  Regarding the REB, he states that through the CAARNG Incentives Task Force (ITF) audit process he was first made aware that he was not eligible to contract for or receive the REB because he had not executed the REB contract on the day he extended his enlistment.  He was also overpaid $7,500.  The ITF used its authority to make the dates match, which left the $7,500 overpayment to be recouped.  He states he will pay back the $7,500 overpayment.

4.  Regarding the OAB, he states he became aware he was not eligible to contract for or receive payment of the OAB through the ITF audit process.  He had no contract on file, he was appointed into an excess slot, and he was not AOC qualified.  

	a.  The reason he was in an excess status was that he was awaiting word from the National Guard Bureau (NGB) that his packet had been accepted so he could obtain AOC 72D (Environmental Science/Engineering).  During the waiting period, according to his commander, the plan was to have him slotted in an excess position and then transfer him to the AOC 72D slot once his packet was approved.  The following year (2008), he attended the Army Medical Department (AMEDD) Basic Officer Leader Course (BOLC) and graduated, thereby becoming AOC qualified. 

	b.  He asks that the Board recommend creation of an OAB addendum dated 9 March 2007, which is the date he was commissioned.  He agrees to terms of service normally listed in an OAB addendum.  His period of service for the OAB does not overlap his period of service for the SLRP.

5.  Regarding the SLRP, he states:

	a.  The incentive was for his period of service after his extension on 22 February 2005.  He received $3,000 in payments for the periods 22 February 2005 to 22 February 2006 and 22 February 2006 to 22 February 2007.  His SLRP benefits ended on 22 February 2007, and he was commissioned on 9 March 2007.  

	b.  Through the ITF audit process, he was made aware that he was eligible to contract for the SLRP, but the contract was executed retroactively and his private loan lender was paid on his behalf as opposed to his eligible lender.  He was unaware that private student loans did not qualify.  The State Incentives Manager at the time, Master Sergeant (MSG) J____, approved the payment.  He submitted supporting documents when he signed the contract on 14 March 2005, and he does have Federal loans he is still paying.  

	c.  He asks the Board to change the date of his SLRP addendum to 22 February 2005 to match the date he extended his enlistment.  He further asks that he be granted relief from recoupment of the $6,000 paid on his private loans.  He did not know private loans were not authorized and relied on the subject matter expertise of the State Incentives Manager.  He had, and still has, eligible loans that could have been paid at that time.  For whatever reason, his private loans were paid.  

6.  He provides a memorandum, subject:  ABCMR [Army Board for Correction of Military Records] Appeal for [Applicant]; e-mail; and documents identified in a list of 12 enclosures.   

CONSIDERATION OF EVIDENCE:

1.  On 10 October 1991, the applicant enlisted in the Florida ARNG (FLARNG).  He later extended his enlistment through 9 October 2000.  He transferred to the CAARNG prior to reaching his expiration term of service (ETS).  On 24 March 2000, he was honorably discharged from the CAARNG upon reaching his ETS.  

2.  Following a brief period of service in the U.S. Army Reserve, on 6 October 2002, he enlisted in the CAARNG for a 3-year period in military occupational specialty (MOS) 91B (Medical Specialist –converted to MOS 91W).  On 22 February 2005, he extended his enlistment for 6 years.  His Official Military Personnel File (OMPF) is void of documentation showing he extended to receive the REB or SLRP incentives.  

3.  A DA Form 2-1 (Personnel Qualification Record - Part II) shows he served in the CAARNG in MOS 91W from 6 October 2002 to 8 March 2007.  

4.  On 8 March 2007, he was honorably discharged from the CAARNG to accept appointment as a commissioned officer.  

5.  On 8 March 2007, Joint Force Headquarters (JFH), CAARNG, issued Orders 67-1027 appointing him in the ARNG as a second lieutenant (2LT)/O-1 effective 9 March 2007.  He was assigned to a unit in an overstrength position in AOC 92A (Quartermaster, General).  Effective 7 August 2007, he was assigned to duty in AOC 25A (Signal, General).

6.  On 11 December 2007, he was honorably discharged from the CAARNG.

7.  On 13 December 2007, JFH, CAARNG, issued Orders 347-1255 appointing him in the ARNG as a 2LT in the Medical Service Corps effective 12 December 2007.  He was assigned to a unit in AOC 72D (Environmental Science).  

8.  A DA Form 1059 (Service School Academic Evaluation Report), dated 23 May 2008, shows he completed AMEDD BOLC for AOC 72D.  

9.  His Officer Evaluation Report (OER) for the period 24 May 2008 through 23 May 2009 shows he served in an AOC 72D position during the rating period.  

10.  A memorandum, subject:  Designation of Primary AOC and/or Alternate AOC …, dated 11 January 2010, shows he was assigned primary specialty identifier 70B (Health Services Administration) and secondary specialty identifier 72D.  

11.  His OER for the period 24 May 2009 to 23 May 2010 shows he served in an AOC 70B position during the rating period.  Subsequent OERs show he served in:

* AOC 70B during the rating periods ending 7 February 2011, 16 November 2011, and 31 July 2012
* AOC 72D during the rating period ending 31 July 2013

12.  His OMPF does not contain an OAB addendum.

13.  He provides several documents in support of his application, including the following:

	a.  A Military Pay Voucher and associated documents showing $6,000.00 in SLRP funds were disbursed to pay student loans serviced by the Loan Remittance Center.  Several of the associated documents bear the signature block of MSG (then-sergeant first class) J____.

	b.  An article, dated 11 July 2011, from the Federal Bureau of Investigation's website showing MSG J____, the California National Guard's former State Incentives Manager, had entered a plea agreement in which she admitted to submitting $15.2 million in false and fraudulent claims to the U.S. Department of Defense that resulted in wrongfully paid bonuses and loan repayments.  

	c.  An ITF Loan Repayment Audit Form, dated 31 October 2011, showing an audit found the applicant had been eligible to contract for the SLRP when he extended his enlistment in 2005; however, the SLRP agreement was executed retroactively and his loans were not valid loans.  He received a total of $6,000.00 for Fiscal Years 2005 and 2006.  The senior reviewer noted that the applicant must request remittance or a waiver of indebtedness through command channels to the proper authority.  

	d.  An ITF Bonus Audit Form, dated 13 August 2012, showing an audit found he was ineligible for payment of an REB because he signed the REB addendum several weeks after he had extended his enlistment.  The auditor noted he was also overpaid by $7,500.00 for a total of $22,500.00 and found he was subject to full recoupment.  A senior reviewer found that the REB addendum could be corrected at the state level, but that he would still owe the $7,500.00 overpayment.  

	e.  An ITF Bonus Audit Form, also dated 13 August 2012, shows an audit found he was erroneously paid a $10,000.00 OAB with no OAB addendum filed in his record.  The senior reviewer found that, as of 30 July 2012, he was still in a non-qualified position and that he was subject to full recoupment unless an OAB addendum was provided.  The senior reviewer also found that, even if an OAB addendum was provided, he would need an exception to policy (ETP) due to being appointed to an excess position (i.e., overstrength).  
	f.  In a memorandum, subject:  [ABCMR] Appeal for [Applicant], dated          19 November 2013, the ITF Commander confirms the findings of ITF audits and states:

* the applicant relied on MSG J____ and his command and there is no evidence of fraud on his part
* the applicant has three certified debts – $22,500.00 (REB), $10,000.00 (OAB), and $6,000.00 (SLRP)
* as of 13 November 2013, he had repaid $1,096.57 of his SLRP debt
* he did not sign his SLRP addendum or REB addendum at the time of his extension in 2005 in violation of the governing policy
* his private loans were not eligible for payment
* the termination clause in the SLRP addendum he signed stated his eligibility would have terminated when he was commissioned, which contradicted the policy in effect at the time
* he does not have an OAB addendum filed in his record
* to be eligible for the OAB, he would have had to agree to serve in an active status for 6 years and to serve in a critical skill AOC
* to be OAB eligible, he could not be appointed into an excess slot
* prior to receipt of his first OAB payment (as the result of unit reorganization) he was transferred into AOC 70B, an AOC for which he was not qualified
* an SLRP addendum prepared in accordance with the policy in effect at the time would have precluded payment of an OAB
* relief from recoupment in lieu of a recreated SLRP addendum would create the best outcome by allowing him to retain his OAB
* relief from recoupment is the only available option for the OAB because his transfer into an AOC for which he was not qualified would have terminated his eligibility even with a valid OAB addendum 
* relief from recoupment is the only remedy available for the $7,500.00 REB overpayment

	g.  A list showing he has several Federal student loans.

14.  On 24 April 2014, during the processing of this case, the Chief, Personnel Policy Division, National Guard Bureau (NGB), provided an advisory opinion recommending partial approval of the applicant's request.  

	a.  The advisory official notes that the applicant's total REB payments were $7,500.00 over the legal limit and recommends recoupment of the $7,500.00 overpayment.

	b.  Regarding the SLRP, the advisory official states the applicant was eligible for the incentive, but he did not sign the contract on the same day he extended his enlistment, which makes the contract invalid.  A payment of $6,000 was made toward private loans contrary to statute.  There is no evidence of fraud on the part of the applicant, and his SLRP eligibility was terminated without recoupment when he was commissioned on 9 March 2007.  The advisory official recommends relief from recoupment of the $6,000.00 paid toward his private loans.  

	c.  Regarding the OAB, the advisory official states the applicant was eligible for and received the $10,000.00 OAB as an incentive for commissioning into a critical skill AOC.  The ITF determined he was ineligible to receive the OAB because there was no bonus contract on file; however, the fact that he received payment is evidence that there was an agreement.  The advisory official recommends relief from recoupment of the OAB.  

15.  The applicant was provided a copy of the advisory opinion for comment and/or rebuttal.  He did not respond in the time allotted.  

16.  National Guard Regulation 600-7 (Selected Reserve Incentive Programs) sets policies and procedures for the administration of ARNG incentive programs.  It requires completion of applicable incentive addenda on the date a Soldier establishes incentive eligibility by enlisting, extending, or accepting a commission.  

17.  NGB Policy Number 05-02 established policy for the ARNG Selected Reserve Incentive Program (SRIP) for the period 14 December 2004 through 30 September 2005.  It stated:

	a.  The REB for a 6-year extension was $15,000.00 payable in a lump sum effective upon re-enlistment or extension to Soldiers who were otherwise qualified.

	b.  To receive the SLRP, ARNG Soldiers with existing loans could reenlist or extend for a term of service that would provide a contractual obligation of not less than 6-years from the date of the SLRP agreement.  The amount of SLRP was not to exceed $18,000.00 with a maximum payment of 15% or $500.00, whichever was greater ($3,000.00 cap per Soldier per year). 

	c.  Soldiers who contracted for SLRP as an enlisted Soldier could retain eligibility and receive anniversary payments as a commissioned officer or warrant officer throughout their initial contracted period.  This applied to anyone commissioned or appointed on or after 28 October 2004.
18.  NGB Policy Number 07-04 established policy for the ARNG SRIP for the period 1 January to 31 March 2007.  

	a.  Under this policy, the ARNG offered a $10,000.00 OAB to newly commissioned officers and newly appointed warrant officers who agreed to serve in the ARNG and met the following eligibility requirements:

		(1)  Agreed to serve for a period of not less than 6 years in an active drilling status.

		(2) Agreed to serve in a critical skill AOC as defined by the ARNG (including, at the time, both AOC 70B and AOC 72D).  

		(3) Were not accepting an appointment as an officer or warrant officer for the purpose of qualifying for employment in a military technician or Active Guard Reserve position.

		(4) Were not receiving and would not receive other specified benefits or incentives including the SLRP.

	b.  The policy also provided for termination of an incentive with recoupment under several conditions including moving to a non-bonus skill or unit, unless the move was required by the ARNG.

19.  Department of Defense Instruction 1340.23, subject:  Waiver Procedures for Debts Resulting from Erroneous Pay and Allowances, states:

	a.  Generally, persons who receive a payment erroneously from the Government acquire no right to the money.  They are bound in equity and good conscience to make restitution.  If a benefit is bestowed by mistake, no matter how careless the act of the Government may have been, the recipient must make restitution.  A waiver is not a matter of right.  It is available to provide relief as a matter of equity, if the circumstances warrant.  

	b.  A waiver usually is not appropriate when a recipient knows, or reasonably should know, that a payment is erroneous.  The recipient has a duty to notify an appropriate official and to set aside the funds for eventual repayment to the Government, even if the Government fails to act after such notification.

	c.  Debts may be waived only when collection would be against equity and good conscience and would not be in the best interests of the United States.  There must be no indication the erroneous payment was solely or partially the result of the fraud, misrepresentation, fault, or lack of good faith of the applicant.  
DISCUSSION AND CONCLUSIONS:

1.  The evidence of record shows the applicant received an overpayment of his REB.  It is reasonable to expect that he would have known the authorized amount of the REB for which he extended his enlistment was $15,000.00.  It is appropriate for him to repay the $7,500.00 he was overpaid, and he has stated that he will do so.  There is no basis for granting the portion of his request pertaining to the REB.  

2.  He was eligible for the SLRP, but payments were applied to private loans that were not authorized for repayment under this incentive.  There is no evidence that he was at fault for these erroneous payments, and the record indicates that the payments were authorized by MSG J____, who later admitted submitting fraudulent claims that led to wrongfully paid bonuses and loan repayments.  In light of the circumstances under which the erroneous payments were made, it would be appropriate to waive recoupment of SLRP payments made on his behalf and return to him any portion he has repaid.  

3.  The evidence of record indicates he was not eligible for an OAB when he was initially appointed, yet he was paid the full amount of the OAB.  He has completed any service obligation he would have incurred under a properly completed OAB addendum, and the bulk of his commissioned service has been in critical skill AOCs.  It appears he has met the intent of the OAB incentive he received.  

4.  He has requested relief in the form of creation of an OAB addendum bearing the date he was commissioned; however, the ITF Commander has noted problems with that approach that appear to be insurmountable.  Considering all of the evidence in this case, the more reasonable relief is that proposed by the Chief, Personnel Policy Division, NGB, in her advisory opinion, and recoupment of his OAB should be waived.   

BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF 

____X____  ___X_____  ___X_____  GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION


BOARD DETERMINATION/RECOMMENDATION:

1.  The Board determined that the evidence presented was 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.  correcting his record to show the National Guard Bureau approved requests for a waiver of recoupment of SLRP payments made on his behalf and the OAB he received were approved and 

	b.  returning to him out of ARNG funds any portion of the SLRP and OAB he has already repaid.

2.  The Board further determined that the evidence presented was 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 recoupment of overpayment of an REB.  



      _______ _   _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)                                         AR20140007216





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ABCMR Record of Proceedings (cont)                                         AR20140007216



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