Pay Error and resolution

[rabbidrabbit]

Here is a situation followed by some questions:

Member X of government organization A (for Army) has been improperly paid for 3 years. An official amendment to that members pay is authorized in correction of this error, and the member recieves a lump sum backpayment of what he is owed (example of $28,000 after taxes were withheld). The time taken to complete the transaction from the time the amendment is authorized, to the time the member recieved pay was 8 months.

The member in good-faith trusting the calculations of his employers accounting and financial department, spends the money on various things including registered retirement savings plan contributions to avoid the huge tax hit that the lump sum will cause that year, and uses a portion of it as a downpayment on a house and on a vehicle.

4 months later, the member is told that there was an error in the calculation, and that he must pay back $12,500 of the money recieved. Something was not entered into the computer correctly, resulting in overpayment.

The problem is, the money has been distributed to the member, and is already alloted for legal commitments made by the member. The member had no way of knowing that the calculations were incorrect. His position, background and training are completely unrelated to the financial admininstration system.  He is now faced with being tagged with a large debt through no fault of his own which will put him at a considerably higher level of stress and financial hardship.

The organization obviously will arrange for full repayment of the funds distributed.


Here are some prompting questions on the scenario:

Who should be responsible for the money and to what extent - the member, or the people responsible for the pay error? - and why?

To what extent does responsibility for the error affect the responsibility to repay?

In what respects do you see an ethical dilemma in the scenario?

Why do you feel this way?

Any other thoughts are welcome as discussion, in particular, from your experience, what are reasonable solutions to prevent scenarios such as this within the pay system?

The only thing I could come up with was to calculate the amount owed first, then input it into the pay system and ensure that the correct numbers come up, before distributing funds to the member.

cheers and I look forward to constructive responses.

 

[Jungle]

Who should be responsible for the money and to what extent - the member, or the people responsible for the pay error?

The member is always responsible for his own pay.

To what extent does responsibility for the error affect the responsibility to repay?

It does not. The clerks that make the errors on other member's pay are never held accountable, except maybe for a bullet on the PER... if the supervisor is even made aware of the problem.

In what respects do you see an ethical dilemma in the scenario?

In that the clerk's own pay never has a mistake on it. >

Why do you feel this way?

Because I had the same thing happen to me previously, and I had to pay. Good luck, and negociate paying over a certain period, otherwise they will take the entire amount on your pay until they are repaid.

 

[dapaterson]

CFAOs state that recovery of overpayment is to be made over a period of 1 year, or over the length of time the error occurred.  In this instance, I would push back that the original error was over 3 years, so any repayment should be over 3 years as well.

I would also get someone to provide a detailed explanation in writing of what occurred.  What was the cause of the underpayment?  What was the cause of the overpayment?  In one instance, I was sent detailed information (after a prolonged fight to get it), and was able to reply and inform the powers that be that they had made another mistake that should have been obvious to them (Question: is it possible to be paid more than 31 days in a month?).  Unfortunately, the other error meant I owed even more money...

 

[George Wallace]

CFAOs state that recovery of overpayment is to be made over a period of 1 year, or over the length of time the error occurred.  In this instance, I would push back that the original error was over 3 years, so any repayment should be over 3 years as well.

If you don't mind, could you state which CFAO exactly?

I have run into several people who have had the CF Pay System come back on them two or three years after a Tour and claw back one or more months pay.  This CFAO will be of some help to the many others who are in the same situation.

 

[PO2FinClk]

Contrary to Jungle, the error is not always the clerks' as it is simply data entry based on direction received. Rather the clerks are responsible to enter information based on direction and messages received from higher authorities. I am not saying that errors are not caused by clerks as to err happens to the best of us, however to simply generalize and place all fault on clerks is inaccurate if not to say irresponsible. Most of the errors I have seen occur in recent years has been from higher authorities providing erroneous direction, MP, LCIS & Subsidized Education enrolments debacles come to mind.

Clerks are accountable no differently then any other military person which commits errors in their job and are dealt with no differently.

Rather, I would recommend you follow dapaterson's advice and request a detailed (written) explanation. This will then enable you to have the full picture of events and equip yourself with the tools needed to have a fair and appropriate recovery completed over a desired period.

George, I am guessing 203-3 but have not researched it. The rule is that the amount owed can be repayed over 6 months under local authority, or over the duration which it was received with DMPAP authority. So if they were on tour and received the monies owed for 6 months then that would be the maximum allowable period.

 

[toughenough]

...has been improperly paid for 3 years.

How do you let this go for three years? I can understand not being able to check every single pay stub, but 3 years is a bit negligent on your part. The fact that you are responsible for your pay is taught at the very onset of training, so none of this should be coming as a surprise.

 

[Scoobie Newbie]

Not true.  When I was in the reserves I was paid what I thought, transferred to the regs and years later was sent a check for thousands of dollars.  If your being paid what you thought and things change well above your pay grade but don't filter down then who's fault is it?

 

[Harris]

I have to agree with the comments about things being decided/done above/without your knowledge in relation to pay.  I've had many, many pay issues, the majority of which were not caused by me.  For example I received a 15K income tax rebate as a result of the CF "recalculating" my pay.  My spider senses tingled, I declined the cheque and decided to wait for an audit.  Audit happened three months later and it was discovered that I in fact should have gotten a 3K rebate.  If I had taken that original $ and spent it, I would have had to pay 7% interest on it.  Since I waited, I actually receive 5% on the amount I was really owed.

Another example is I was paid one summer in Gagetown as a Pte, Sgt, OCdt and Lt.  I was a Lt at the time.  It took a while to sort that out.  And yes I informed the pay people after each pay that it was incorrect, yet it still kept happening.

In general I find the lower down the chain if finance clerks I deal with, the better the service.

 

[rabbidrabbit]

Not true.  When I was in the reserves I was paid what I thought, transferred to the regs and years later was sent a check for thousands of dollars.  If your being paid what you thought and things change well above your pay grade but don't filter down then who's fault is it?

The scenario in question is my present situation.  I have already done what dapatterson suggested filing a redress to temporarily halt collection efforts, and to have a full pay audit conducted, and be able to sit down with a pay specialist and review everything in detail so that it is clearly understood by myself, as well as the pay system.  Once that is done, to have the necessary time to consult with a financial planner in attempts to minimize the financial impact of this on my family and myself.

I was a primary reservist for several years, and then joined the regular force under ROTP.  Although I stated that this was wrong at the time, I was forced to accept the process they were following, and as a result was paid as an OCdt when I should have been paid as a Pte (between various pay increments as years passed by) while under the ROTP program.  I filed a memo after arriving in Gagetown requesting a review of my enrollment, which resulted in an ETP amendment instruction, and a subsequent backpay of funds.  

It took 8 months from the time the ETP amendment message arrived here, until the changes were made in the pay system with the explanation that they wanted to do it properly so that's why it was taking such a long time.  And it was apparently still f-d up.  

Now I acknowledge that receipt of funds that I am not entitled to should be paid back, however, unless something is worked out to minimize the impact of this error on my family and myself in the process, I could have very serious financial consequences being forced to pay it back in too short a time period.   (ie home forclosure very quickly into my newly acquired mortgage, potentially leading to bankruptcy)  

It strikes me as odd that somewhere in pay services this could have been prevented by calculating the figures beforehand, plugging changes into the system and if the numbers added up it would be good to go, if not, they'd have the ability to sort it out BEFORE the member recieves the money.  This isnt a few hundred or a few thousand, this is twelve thousand dollars and that can seriously screw with somebody's life.  Myself being a 2Lt and the primary source of income for a family, this is a substantial debt to incurr and places many things at risk.

 

[dapaterson]

FinClk got it right - it's CFAO 203-3 that dictates recovery time periods.  See http://www.admfincs.forces.gc.ca/admfincs/subjects/cfao/203-03_e.asp for all the details.

 

[George Wallace]

What clever wording.  This really doesn't help Reservists who have returned from a Tour, been overpaid, and then notified two or three years later that they owe $2 - $8K back to the CF. 

7.     Recovery of an overpayment, advance of unearned pay and allowances, or
deduction for dependants' medical care or dental treatment shall normally
be made either in one sum or by monthly deductions in the pay account. In
the case of monthly deductions, the amount may be recovered over the
greater of:
     a.   a period not exceeding six months; or

    b.   a period equal to the period over which the overpayment was made.

They would have up to six months to pay it back, or the shorter period during which they were being overpaid, not the length of time that it took to find the error.

That could really hurt a Class A soldier.

 

[PO2FinClk]

It strikes me as odd that somewhere in pay services this could have been prevented by calculating the figures beforehand, plugging changes into the system and if the numbers added up it would be good to go, if not, they'd have the ability to sort it out BEFORE the member recieves the money. 

Unfortunately this ability does not exist. only by entering the information into HRMS which in turn triggers changes in CCPS can the amounts be determined. Don't get me wrong, you and I could sit down with all your paperwork and do our best to figure out what it should look like, both those numbers would be an educated guess at best.

Unfortunately, it seems obvious that in your case all of the errors were caused at the onset by incorrect ETP instructions, which when received are actioned in HRMS/CCPS using the information it provides. They must be abided by as they are issued by the managing authority and local bases/ASU's/Wings do not have the authority to override. Inaccurate ETP's, more so for those joining as Junior officers & CT's have been the cause of much headaches for members and RMS staff alike. Which is why I could understand (to an extent) why they wanted to complete the amendment in a slow and methodical way.

This is not to say however that I believe 8 months to be an acceptable time frame. Rather the more you write of your situation the more it becomes very apparent that their is more to this story, that there are more factors which must be considered . These would of contributed to the delays in processing and also perhaps provide clarity on what when and why anything occurred.

Unfortunately through online forums without having a file in front of you, it is hearsay from one bias individual. As such we cannot make a certain or complete determination of what was right and what was not. This will have to be sorted from your end.

Incidentally, dapaterson did not mention anything about a redress, he only suggested you get a written account of what occurred. Two very different things altogether so please be careful in your interpretation of the advice given to you as it could be construed in your completing selective extrapolation. Lastly, since the amalgamation of Admin, Finance and CEP Tech, there no longer exists such a thing as a "Pay Specialist", rather you will sit down with an RMS Clerk.

 

[CountDC]

Not true.  When I was in the reserves I was paid what I thought, transferred to the regs and years later was sent a check for thousands of dollars.  If your being paid what you thought and things change well above your pay grade but don't filter down then who's fault is it?

Yours - should be no thought about it  - you should always know what your pay level is and if that is not what you are paid you should be on the pay staff right away every pay day until resolved.  Also do everything in writing and keep a diary with dates and times. A change is no excuse as all pay related changes are sent out by canforgens that everyone can read so you should be aware of them and take action. Don't worry about stepping on toes either - if the clerk does not have it solved within 1 month (2 pays) then bounce it higher up the chain and keep going higher until satisfied.

 

[CountDC]

In that the clerk's own pay never has a mistake on it. >

Not true - lots of clerks have pay problems too just that we usually pick them up and know how to get them corrected. I know I have had more than my share of errors and have made the same mistake as most people - I trusted the clerk instead of doing my job and monitoring the situation - in the end I paid the price and chalked it up to lesson learned - pay is an individuals responsibility so monitor and question.

 

[PO2FinClk]

Yours - should be no thought about it  - you should always know what your pay level is and if that is not what you are paid you should be on the pay staff right away every pay day until resolved.  Also do everything in writing and keep a diary with dates and times. A change is no excuse as all pay related changes are sent out by canforgens that everyone can read so you should be aware of them and take action.

Note that I am a strong proponent the mbr's are always ultimately responsible for their pay. In their defence however, when dealing with CT's and ETP's, it can be nightmarish for members to know what it is they are expected to receive. Fact is with these issues mbr's cannot be expected to be fully knowledgeable as to what they are supposed to receive when OR staff themselves cannot make the determination with certaintiy due to ambiguous, incomplete or inaccurate ETP's.

In short yes they (the mbr's) are responsible, but some level of understanding must also accompany these expectations in relation to the scenario in play and the official information received.

 

[CountDC]

The scenario in question is my present situation.  I have already done what dapatterson suggested filing a redress to temporarily halt collection efforts, and to have a full pay audit conducted, and be able to sit down with a pay specialist and review everything in detail so that it is clearly understood by myself, as well as the pay system. Once that is done, to have the necessary time to consult with a financial planner in attempts to minimize the financial impact of this on my family and myself.

You should not need a redress - all that was required was a request for pay audit sent to the pay office including the request to hold off collecting until the audit has been completed and a collection period agreed upon. A review with your clerk should most certainly be done. Time to consult with a planner is now - stop waiting. Also play it safe andahve them with hold the monthly payments you are hoping the COC will accept to pay off the debt - this will put you ahead of the game, show that you are serious about it and give you and your family time to adapt to it - IE if you are requesting to pay $200 per month then the pay clerk can withhold that $200 per month and allow it to accumulate on your pay account.

quote author=rabbidrabbit link=topic=77359/post-725493#msg725493 date=1213811645]
I was a primary reservist for several years, and then joined the regular force under ROTP.  Although I stated that this was wrong at the time, I was forced to accept the process they were following, and as a result was paid as an OCdt when I should have been paid as a Pte (between various pay increments as years passed by) while under the ROTP program.  I filed a memo after arriving in Gagetown requesting a review of my enrollment, which resulted in an ETP amendment instruction, and a subsequent backpay of funds.  
[/quote]

From this it appears that you waited years before submitting your memo even though you knew there was a problem.  

quote author=rabbidrabbit link=topic=77359/post-725493#msg725493 date=1213811645]
It took 8 months from the time the ETP amendment message arrived here, until the changes were made in the pay system with the explanation that they wanted to do it properly so that's why it was taking such a long time.  And it was apparently still f-d up.  
[/quote]

sounds like an excuse to me - message was received, enter into system, couple days to filter down and generate, audit to confirm generated pay. 1 - 2 months would be reasonable.  Mind you this is based on one side of the story so there may be details that are missing.

quote author=rabbidrabbit link=topic=77359/post-725493#msg725493 date=1213811645]
Now I acknowledge that receipt of funds that I am not entitled to should be paid back, however, unless something is worked out to minimize the impact of this error on my family and myself in the process, I could have very serious financial consequences being forced to pay it back in too short a time period.   (IE home forclosure very quickly into my newly acquired mortgage, potentially leading to bankruptcy)  
[/quote]

Stop wasting time - get ahold of SISIP Financial Services and make an appointment - they may be a good backup in-case an extended repayment period is not approved. They have loans and grants they may provide to solve the problem for you. The clerks you have talked to should have recommended this to you.

quote author=rabbidrabbit link=topic=77359/post-725493#msg725493 date=1213811645]
It strikes me as odd that somewhere in pay services this could have been prevented by calculating the figures beforehand, plugging changes into the system and if the numbers added up it would be good to go, if not, they'd have the ability to sort it out BEFORE the member receives the money. This isn't a few hundred or a few thousand, this is twelve thousand dollars and that can seriously screw with somebody's life.  Myself being a 2Lt and the primary source of income for a family, this is a substantial debt to incurr and places many things at risk.
[/quote]

I agree to a point - whenever I dealt with a mbr that had a large adjustment made I withheld the payment until I calculated things out to be sure they were accurate. That being said - you could have done the same thing and should have especially as you were already aware that this was an ongoing problem over 3 years.  Certainly the wrong time to assume that everything was correct.

From what you have posted your actions and inaction has compounded the problem and may continue to do so. I am guessing (or hoping) that some of this is due to bad advice being given to you. Redress is a last ditch resort when all else fails as it is usually a long drawn out process - think years (my friend - a sgt clerk - took 5 years to resolve). A memo submitted through the pay office and up the chain to their CO should have covered you. Waiting too long to action your memo did not help. Assuming the pay was right without confirming the amount was a big mistake, especially with all the problem you already had. I do hope that everything will work out for you in the end without undue hardship for you and your family. Please take the big lesson from this and as a leader pass it on to all that work for you in the future.  Be aware of what you should receive, monitor your pay, question every change immediately and do not spend anything above your normal pay until you make sure it is correct as in the end no matter what the final answer is always - the member is responsible for their pay.

Final - my statements are based on what I have read - there is no doubt that the clerk(s) involved would most likely have a slightly different spin on things that may change my opinion.  There may also be details that you have not provided here that may have me form a different opinion. Thus take all of this with a grain of salt and utilize anything of value.

 

[CountDC]

Note that I am a strong proponent the mbr's are always ultimately responsible for their pay. In their defence however, when dealing with CT's and ETP's, it can be nightmarish for members to know what it is they are expected to receive. Fact is with these issues mbr's cannot be expected to be fully knowledgeable as to what they are supposed to receive when OR staff themselves cannot make the determination with certaintiy due to ambiguous, incomplete or inaccurate ETP's.

In short yes they (the mbr's) are responsible, but some level of understanding must also accompany these expectations in relation to the scenario in play and the official information received.

True enough that CT and ETPs can be confusing but it was indicated that the mbr was aware of a problem at the very beginning and it appears from the info provided waited years to take proper action. The level of understanding is based on the members declared knowledge and actions.

 

[rabbidrabbit]

I should clarify that although I objected to the pay decrease from Pte to Ocdt, I was told that this was the way that it was done.  When arriving in Gagetown, I learned from another member that experienced the same thing was requesting a review of his ETP instruction, at which time I did the same.

 

[CountDC]

I should clarify that although I objected to the pay decrease from Pte to Ocdt, I was told that this was the way that it was done.  When arriving in Gagetown, I learned from another member that experienced the same thing was requesting a review of his ETP instruction, at which time I did the same.

This certainly falls into the category of info missing that could change an opinion.  It also falls into the bad advice provided.The pers telling you this should have actually stated that it is the way they are aware of but you should submit a request for clarification/review to be on the safe side.  Better to ask and be told no than not ask and find out later the answer was yes.

 

[rabbidrabbit]

... It also falls into the bad advice provided.The pers telling you this should have actually stated that it is the way they are aware of but you should submit a request for clarification/review to be on the safe side.  Better to ask and be told no than not ask and find out later the answer was yes.

Amen