Procedures for Settling Claims

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 178

RIN 3206-AH89

Procedures for Settling Claims

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing final

rules of procedure for the settlement of claims submitted to OPM for

Federal civilian employees' compensation and leave, for proceeds of

canceled checks for veterans' benefits payable to deceased

beneficiaries, and for the settlement of deceased employees'

compensation. Before June 30, 1996, these claims were settled by the

United States General Accounting Office (GAO). However, on that date,

pursuant to the Legislative Branch Appropriations Act of 1996, the

authority to settle these claims transferred to the Director, Office of

Management and Budget, who delegated this function to the Office of

Personnel Management.

EFFECTIVE DATE: January 30, 1998.

FOR FURTHER INFORMATION CONTACT: Paul Britner, Senior Attorney, (202)

606-2233, Claims Adjudication Unit, Office of the General Counsel, Room

7537, Office of Personnel Management, 1900 E Street NW., Washington, DC

20415.

SUPPLEMENTARY INFORMATION:

I. Background

Pursuant to the Legislative Branch Appropriations Act of 1996, most

of the claims settlement functions performed by the General Accounting

Office were transferred to the Director, Office of Management and

Budget. See Sec. 211, Pub. L. 104-53, 109 Stat. 535. Subsequently, the

Acting Director delegated these functions to various components within

the Executive branch in a determination order dated June 28, 1996. In

summary, this order delegated to the Office of Personnel Management the

authority to settle claims against the United States involving Federal

employees' compensation and leave, deceased employees' compensation,

and proceeds of canceled checks for veterans' benefits payable to

deceased beneficiaries. Subsequently, Congress codified these changes

through additional legislation. See Pub.L. 104-316, 110 Stat. 3826. The

proposed rules were published in the Federal Register on August 25,

1997. The deadline for receiving comments has passed and no comments

regarding the proposed rules have been received. The final procedures

contain no changes from the proposed procedures and are substantially

similar to the procedures formerly used by GAO, which are found at 4

CFR parts 31, 32 and 33.

Regulatory Flexibility Act

I certify that these regulations would not have a significant

economic impact on a substantial number of small entities because they

would only apply to Federal agencies and employees.

Paperwork Reduction Act

The information collection requirements contained in this rule have

been approved by the Office of Management and Budget (OMB) in

accordance with the Paperwork Reduction Act of 1995 (42 U.S.C. 3501-

3530), and assigned OMB control number 3206-0232. An agency may not

conduct or sponsor, and a person is not required to respond to, a

collection of information unless the collection displays a valid

control number.

Executive Order 12866, Regulatory Review

This rule has been reviewed by the Office of Management and Budget

in accordance with Executive Order 12866.

List of Subjects in 5 CFR Part 178

Administrative practice and procedure, Claims, Compensation,

Government employees.

U.S. Office of Personnel Management.

Janice R. Lachance,

Director.

Accordingly, OPM is amending 5 CFR by adding part 178 as follows:

PART 178--PROCEDURES FOR SETTLING CLAIMS

Subpart A--Administrative Claims--Compensation and Leave, Deceased

Employees' Accounts and Proceeds of Canceled Checks for Veterans'

Benefits Payable to Deceased Beneficiaries

Sec.

178.101 Scope of subpart.

178.102 Procedures for submitting claims.

678.103 Claim filed by a claimant's representative.

178.104 Statutory limitations on claims.

178.105 Basis of claim settlements.

178.106 Form of claim settlements.

178.107 Finality of claim settlements.

Subpart B--Settlement of Accounts for Deceased Civilian Officers and

Employees

178.201 Scope of subpart.

178.202 Definitions.

178.203 Designation of beneficiary.

178.204 Order of payment precedence.

178.205 Procedures upon death of employee.

178.206 Return of unnegotiated Government checks.

178.207 Claims settlement jurisdiction.

178.208 Applicability of general procedures.

Subpart A--Administrative Claims--Compensation and Leave, Deceased

Employees' Accounts and Proceeds of Canceled Checks for Veterans'

Benefits Payable to Deceased Beneficiaries

Authority: 31 U.S.C. 3702; 5 U.S.C. 5583; 38 U.S.C. 5122; Pub.

L. No. 104-53, 211, Nov. 19, 1995; E.O. 12107.

Sec. 178.101 Scope of subpart.

(a) Claims covered. This subpart prescribes general procedures

applicable to claims against the United States that may be settled by

the Director of the Office of Personnel Management pursuant to 31

U.S.C. 3702, 5 U.S.C. 5583 and 38 U.S.C. 5122. In general, these claims

involve Federal employees' compensation and leave and claims for

proceeds of canceled checks for veterans' benefits payable to deceased

beneficiaries.

(b) Claims not covered. This subpart does not apply to claims that

are under the exclusive jurisdiction of administrative agencies

pursuant to specific statutory authority or claims concerning matters

that are subject to negotiated grievance procedures under collective

bargaining agreements entered into pursuant to 5 U.S.C. 7121(a). Also,

these procedures do not

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apply to claims under the Fair Labor Standards Act (FLSA). Procedures

for FLSA claims are set out in part 551 of this chapter.

Sec. 178.102 Procedures for submitting claims.

(a) Content of claims. Except as provided in paragraph (b) of this

section, a claim shall be submitted by the claimant in writing and must

be signed by the claimant or by the claimant's representative. While no

specific form is required, the request should describe the basis for

the claim and state the amount sought. The claim should also include:

(1) The name, address, telephone number and facsimile machine

number, if available, of the claimant;

(2) The name, address, telephone number and facsimile machine

number, if available, of the agency employee who denied the claim;

(3) A copy of the denial of the claim; and,

(4) Any other information which the claimant believes OPM should

consider.

(b) Agency submissions of claims. At the discretion of the agency,

the agency may forward the claim to OPM on the claimant's behalf. The

claimant is responsible for ensuring that OPM receives all the

information requested in paragraph (a) of this section.

(c) Administrative report. At OPM's discretion, OPM may request the

agency to provide an administrative report. This report should include:

(1) The agency's factual findings;

(2) The agency's conclusions of law with relevant citations;

(3) The agency's recommendation for disposition of the claim;

(4) A complete copy of any regulation, instruction, memorandum, or

policy relied upon by the agency in making its determination;

(5) A statement that the claimant is or is not a member of a

collective bargaining unit, and if so, a statement that the claim is or

is not covered by a negotiated grievance procedure that specifically

excludes the claim from coverage; and

(6) Any other information that the agency believes OPM should

consider.

(d) Canceled checks for veterans' benefits. Claims for the proceeds

of canceled checks for veterans' benefits payable to deceased

beneficiaries must be accompanied by evidence that the claimant is the

duly appointed representative of the decedent's estate and that the

estate will not escheat.

(e) Where to submit claims. (1) All claims under this section

should be sent to the Claims Adjudication Unit, Room 7535, Office of

the General Counsel, Office of Personnel Management, 1900 E Street NW.,

Washington, DC 20415. Telephone inquiries regarding these claims may be

made to (202) 606-2233.

(2) FLSA claims should be sent to the appropriate OPM Oversight

Division as provided in part 551 of this chapter.

Sec. 178.103 Claim filed by a claimant's representative.

A claim filed by a claimant's representative must be supported by a

duly executed power of attorney or other documentary evidence of the

representative's right to act for the claimant.

Sec. 178.104 Statutory limitations on claims.

(a) Statutory limitations relating to claims generally. Except as

provided in paragraphs (b) and (c) of this section or as otherwise

provided by law, all claims against the United States Government are

subject to the 6-year statute of limitations contained in 31 U.S.C.

3702(b). To satisfy the statutory limitation, a claim must be received

by the Office of Personnel Management, or by the department or agency

out of whose activities the claim arose, within 6 years from the date

the claim accrued. The claimant is responsible for proving that the

claim was filed within the applicable statute of limitations.

(b) Claims under the Fair Labor Standards Act. Claims arising under

the FLSA, 29 U.S.C. 207, et seq., must be received by the Office of

Personnel Management, or by the department or agency out of whose

activity the claim arose, within the time limitations specified in the

FLSA.

(c) Other statutory limitations. Statutes of limitation other than

that identified in paragraph (a) of this section may apply to certain

claims. Claimants are responsible for informing themselves regarding

other possible statutory limitations.

Sec. 178.105 Basis of claim settlements.

The burden is upon the claimant to establish the timeliness of the

claim, the liability of the United States, and the claimant's right to

payment. The settlement of claims is based upon the written record

only, which will include the submissions by the claimant and the

agency. OPM will accept the facts asserted by the agency, absent clear

and convincing evidence to the contrary.

Sec. 178.106 Form of claim settlements.

OPM will send a settlement to the claimant advising whether the

claim may be allowed in whole or in part. If OPM requested an agency

report or if the agency forwarded the claim on behalf of the claimant,

OPM also will send the agency a copy of the settlement.

Sec. 178.107 Finality of claim settlements.

(a) The OPM settlement is final; no further administrative review

is available within OPM.

(b) Nothing is this subpart limits the right of a claimant to bring

an action in an appropriate United States court.

Subpart B--Settlement of Accounts for Deceased Civilian Officers

and Employees

Authority: 5 U.S.C. 5581, 5582, 5583.

Sec. 178.201 Scope of subpart.

(a) Accounts covered. This subpart prescribes forms and procedures

for the prompt settlement of accounts of deceased civilian officers and

employees of the Federal Government and of the government of the

District of Columbia (including wholly owned and mixed-ownership

Government corporations), as stated in 5 U.S.C. 5581, 5582, 5583.

(b) Accounts not covered. This subpart does not apply to accounts

of deceased officers and employees of the Federal land banks, Federal

intermediate credit banks, or regional banks for cooperatives (see 5

U.S.C. 5581(1)). Also, these procedures do not apply to payment of

unpaid balance of salary or other sums due deceased Senators or Members

of the House of Representatives or their officers or employees (see 2

U.S.C. 36a, 38a).

Sec. 178.202 Definitions.

(a) The term deceased employees as used in this part includes

former civilian officers and employees who die subsequent to separation

from the employing agency.

(b) The term money due means the pay, salary, or allowances due on

account of the services of the decedent for the Federal Government or

the government of the District of Columbia. It includes, but is not

limited to:

(1) All per diem instead of subsistence, mileage, and amounts due

in reimbursement of travel expenses, including incidental and

miscellaneous expenses which are incurred in connection with the travel

and for which reimbursement is due;

(2) All allowances upon change of official station;

(3) All quarters and cost-of-living allowances and overtime or

premium pay;

(4) Amounts due for payment of cash awards for employees'

suggestions;

(5) Amounts due as refund of salary deductions for United States

Savings bonds;

[[Page 68141]]

(6) Payment for all accumulated and current accrued annual or

vacation leave equal to the pay the decedent would have received had he

or she lived and remained in the service until the expiration of the

period of such annual or vacation leave;

(7) The amounts of all checks drawn in payment of such compensation

which were not delivered by the Government to the officer or employee

during his or her lifetime or of any unnegotiated checks returned to

the Government because of the death of the officer or employee; and

(8) Retroactive pay under 5 U.S.C. 5344(b)(2).

Sec. 178.203 Designation of beneficiary.

(a) Agency notification. The employing agency shall notify each

employee of his or her right to designate a beneficiary or

beneficiaries to receive money due, and of the disposition of money due

if a beneficiary is not designated. An employee may change or revoke a

designation at any time under regulations promulgated by the Director

of the Office of Personnel Management or his or her designee.

(b) Designation Form. Standard Form 1152, Designation of

Beneficiary, Unpaid Compensation of Deceased Civilian Employee, is

prescribed for use by employees in designating a beneficiary and in

changing or revoking a previous designation; each agency will furnish

the employee a Standard Form 1152 upon request. In the absence of the

prescribed form, however, any designation, change, or cancellation of

beneficiary witnessed and filed in accordance with the general

requirements of this part will be acceptable.

(c) Who may be designated. An employee may designate any person or

persons as beneficiary. The term person or persons as used in this part

includes a legal entity or the estate of the deceased employee.

(d) Executing and filing a designation of beneficiary form. The

Standard Form 1152 must be executed in duplicate by the employee and

filed with the employing agency where the proper officer will sign it

and insert the date of receipt in the space provided on each part, file

the original, and return the duplicate to the employee. When a

designation of beneficiary is changed or revoked, the employing agency

should return the earlier designation to the employee, keeping a copy

of only the current designation on file.

(e) Effective period of a designation. A properly executed and

filed designation of beneficiary will be effective as long as

employment by the same agency continues. If an employee resigns and is

reemployed, or is transferred to another agency, the employee must

execute another designation of beneficiary form in accordance with

paragraph (d) of this section. A new designation of beneficiary is not

required, however, when an employee's agency or site, function,

records, equipment, and personnel are absorbed by another agency.

Sec. 178.204 Order of payment precedence.

To facilitate the settlement of the accounts of the deceased

employees, money due an employee at the time of the employee's death

shall be paid to the person or persons surviving at the date of death,

in the following order of precedence, and the payment bars recovery by

another person of amounts so paid:

(a) First, to the beneficiary or beneficiaries designated by the

employee in a writing received in the employing agency prior to the

employee's death;

(b) Second, if there is no designated beneficiary, to the surviving

spouse of the employee;

(c) Third, if none of the above, to the child or children of the

employee and descendants of deceased children by representation;

(d) Fourth, if none of the above, to the parents of the deceased

employee or the survivor of them;

(e) Fifth, if none of the above, to the duly appointed legal

representative of the estate of the deceased employee; and

(f) Sixth, if none of the above, to the person or persons entitled

under the laws of the domicile of the employee at the time of his or

her death.

Sec. 178.205 Procedures upon death of employee.

(a) Claim form. As soon as practicable after the death of an

employee, the agency in which the employee was last employed will

request, in the order of precedence outlined in Sec. 178.204, the

appropriate person or persons to execute Standard Form 1153, Claim for

Unpaid Compensation of Deceased Civilian Employee.

(b) Claims involving minors or incompetents. If a guardian or

committee has been appointed for a minor or incompetent appearing

entitled to unpaid compensation, the claim should be supported by a

certificate of the court showing the appointment and qualification of

the claimant in such capacity. If no guardian or committee has been or

will be appointed, the initial claim should be supported by a statement

showing:

(1) Claimant's relationship to the minor or incompetent, if any;

(2) The name and address of the person having care and custody of

the minor or incompetent;

(3) That any moneys received will be applied to the use and benefit

of the minor or incompetent; and

(4) That the appointment of a guardian or committee is not

contemplated.

Sec. 178.206 Return of unnegotiated Government checks.

All unnegotiated United States Government checks drawn to the order

of a decedent representing money due as defined in Sec. 178.202, and in

the possession of the claimant, should be returned to the employing

agency concerned. Claimants should be instructed to return any other

United States Government checks drawn to the order of a decedent, such

as veterans benefits, social security benefits, or Federal tax refunds,

to the agency from which the checks were received, with a request for

further instructions from that agency.

Sec. 178.207 Claims settlement jurisdiction.

(a) District of Columbia and Government corporations. Claims for

unpaid compensation due deceased employees of the government of the

District of Columbia shall be paid by the District of Columbia, and

those of Government corporations or mixed ownership Government

corporations may be paid by the corporations.

(b) Office of Personnel Management. Each agency shall pay

undisputed claims for the compensation due a deceased employee. Except

as provided in paragraph (a) of this section, disputed claims for money

due deceased employees of the Federal Government will be submitted to

the Claims Adjudication Unit, Office of General Counsel, in accordance

with Sec. 178.102 of subpart A. For example:

(1) When doubt exists as to the amount or validity of the claim;

(2) When doubt exists as to the person(s) properly entitled to

payment; or

(3) When the claim involves uncurrent checks. Uncurrent checks are

unnegotiated and/or undelivered checks for money due the decedent which

have not been paid by the end of the fiscal year after the fiscal year

in which the checks were issued. The checks, if available, should

accompany the claims.

(c) Payment of claim. Claims for money due will be paid by the

appropriate agency only after settlement by the Claims Adjudication

Unit occurs.

[[Page 68142]]

Sec. 178.208 Applicability of general procedures.

When not in conflict with this subpart, the provisions of subpart A

of this part relating to procedures applicable to claims generally are

also applicable to the settlement of account of deceased civilian

officers and employees.

[FR Doc. 97-33928 Filed 12-30-97; 8:45 am]

BILLING CODE 6325-01-P