Sunday, June 17, 2007

Two weeks before Robert C. Bobb resigned as D.C. city administrator to run for the school board last year, an unusual request came across his desk: a Cabinet-level appointee was overpaid $75,000 by accident, and now she wanted to keep the money.

Under a little-known D.C. rule, employees who get extra money in their paychecks through a payroll error can petition the government to keep the money. The District can waive collection if it “would be against equity, against good conscience and not in the best interests of the District government.”

According to records obtained through the Freedom of Information Act (FOIA), the $75,000 paid in error from January to August last year to E. Veronica Pace, former director for the city’s Office on Aging, was the largest waiver request in years.

Mr. Bobb approved Miss Pace’s request in September, only to be overruled two months later. Ultimately, the city’s personnel office found Mr. Bobb alone did not have the authority to approve the waiver.

“I truly regret the enormous inconvenience and belated expense created by the system’s failure … however, it was your responsibility to inquire about the increase in salary,” Lisa Marin, former director of the personnel department, wrote in a letter to Mrs. Pace.

The Washington Times obtained the correspondence last week after successfully appealing the partial rejection of a recent FOIA request.

Citing “a clearly unwarranted invasion of privacy,” an attorney for the city’s human resources department declined to reveal names of city employees seeking waivers and copies of final rulings. Those records were ordered released after The Times appealed.

Mr. Bobb did not respond to questions about his decision to approve the waiver last week, and Miss Pace could not be reached for comment. In a letter to personnel officials, she explained the overpayment “resulted from an error beyond my control.”

Miss Pace blamed the error on the fact that the city’s personnel department failed to offset her salary. As a D.C. government employee who resigned in 1991 only to return in 1997, a portion of her salary was supposed to be reduced to cover her annuity.

She also said she thought legislation in 2004 eliminated the salary offset. “Therefore, I was not informed that the law was not being implemented,” she wrote.

Documents show in most cases, employees seeking waivers to avoid returning mistaken overpayments come away disappointed.

Since 2002, the District has been asked to waive collection of a total of $205,000 in 16 separate employee requests. The waivers were denied in all but three cases.

One employee at the University of the District of Columbia was promoted in 2002, but the payroll department incorrectly reported her salary at $67,109, instead of the correct amount, $62,497.

By the time the mistake was discovered, the employee has been overpaid by more than $3,000, and was frustrated that she was ordered to return the money.

Another employee at the D.C. Department of Corrections asked for a waiver of more than $4,000, writing “I do not owe the government … one red cent.”

But there have been exceptions. The largest waiver in recent years was granted in 2003 to Dr. Craig C. Krause, former medical director for St. Elizabeths Hospital, the city’s psychiatric institution.

He was allowed to keep nearly $30,000 in overtime payments, though city regulations do not permit overtime for that job position. However, in a written waiver request, Dr. Krause said he deserved compensation for logging 353 hours as the acting on-call psychiatrist at the request of the hospital’s former chief executive.

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